BOARD MEETING DATE: August 6, 2004
AGENDA NO. 8

Execute Contracts to Demonstrate Hydrogen Fueling Stations

SYNOPSIS:

On July 11, 2003, the Board approved the release of an RFP to install and demonstrate hydrogen fueling stations in tandem with a fleet of hydrogen internal combustion engine vehicles. The vehicle conversion portion of the RFP was awarded by the Board in March 2004. An outside panel of experts reviewed and scored the nine proposals received for the hydrogen fueling stations. Based on the results of the panel evaluation, this action is to fund two different bidders in an amount not to exceed $2,311,000 from the Clean Fuels Fund to install the hydrogen fueling stations.

COMMITTEE:

Technology, July 23, 2004, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Executive Officer to:

1. Execute a contract with Air Products and Chemicals, Inc. for the installation and demonstration of two electrolyzers and one mobile fueler, with one year of hydrogen fuel supply, in an amount not to exceed $1,916,000 from the Clean Fuels Fund; and
    
2. Execute a contract with Praxair, Inc. for the installation and demonstration of a hydrogen fueling station at their Ontario hydrogen production facility in an amount not to exceed $395,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The AQMP has identified the use of alternative clean fuels in mobile sources as a key air quality attainment strategy. Hydrogen fuel cell vehicles are near zero-emission vehicles but currently have limited availability, high costs, and short warranty periods. Hydrogen-fueled internal combustion engine (ICE) vehicles show promise as a bridge technology between fuel cell vehicles and conventional vehicles and have the potential to significantly reduce VOC, NOx, CO and air toxic emissions as well as greenhouse gas emissions. Furthermore, hydrogen-fueled ICE vehicles will utilize the developing hydrogen infrastructure initiated by the AQMD and help to expedite the expansion of hydrogen infrastructure across the South Coast Air Basin. As part of this process, the Board approved RFP #P2004-01 to provide hydrogen ICE vehicles and fueling stations at five cities in the South Coast Air Basin. The original five cities that volunteered to participate in this project were Burbank, Ontario, Riverside, Santa Ana, and Santa Monica. The city of Santa Monica, however, is currently unable to commit to the project. As a result, staff is evaluating other cities as a replacement in this project.

In response to the RFP, three proposals were received for the vehicle portion and nine proposals were received for the stations. On March 4, 2004 the Governing Board awarded the vehicle conversion project to Quantum Technologies to design, engineer, convert, test, certify, demonstrate, and maintain for sixty months hydrogen ICE vehicles. For the station awards, staff has been discussing co-funding with the DOE since they have a concurrent demonstration program for hydrogen fueling stations and fuel cell vehicles. This project represents not only the opportunity to greatly leverage both agencies’ funding, but also exemplifies the synergy between the AQMD and federal hydrogen programs. Although the DOE was receptive to this concept, Congressional earmarks, which occurred in early 2004, severely reduced the DOE hydrogen budget. This reduction has prevented the DOE from funding their demonstration projects despite announcing the contractors in levels April 27, 2004. In further discussions with the DOE, their awardees, and AQMD consultants in Washington, it has become clear that the DOE will be unable to commit to cost-sharing fueling sites in the near future. Based on this information, staff proposes moving ahead without DOE co-funding but requests the option be kept open should circumstances and federal funding allow.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting applications was published in the following publications on two separate days:
 

1.	Antelope Valley Press	11.	La Opinion	21.	Rafu Shimpo
2.	Black Voice News	12.	La Prensa Hispana	22.	San Bernardino Sun
3.	Chinese Daily News	13.	La Voz Publications	23.	State of California Contracts
4.	Desert Sun	14.	Los Angeles Daily News		Register
5.	Eastern Group Publications	15.	Los Angeles Sentinel	24.	The Daily Breeze
6.	El Chicano	16.	Los Angeles Times	25.	The Excelsior
7.	El Informador	17.	Orange County Register	26.	The Signal
8.	Inland Empire Hispanic News	18.	Philippine News	27.	Wave Community Newspapers
9.	Inland Valley Daily Bulletin	19.	Precinct Reporter
10.	Korea Central Daily	20	Press Enterprise

Additionally, potential bidders were notified utilizing the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov). Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Bid Evaluation

Nine proposals were received in response to the fueling station portion of the RFP, and these were reviewed by an outside panel (Panel) of individuals selected due to their expertise in hydrogen and alternative fuels-related research, development, and demonstration projects. Experts from the DOE, the National Renewable Energy Laboratory, Schatz Energy Research Center (Humboldt State), National Fuel Cell Research Center (UC Irvine), and the Institute of Transportation Studies (UC Davis) comprised the Panel.

The RFP identified 100 possible points for the technical score, 25 possible points for the cost score, and an additional 10 points for the use of renewable energy. The Panel evaluated the technical merits of the proposals, and as outlined in the RFP, proposals not receiving at least eighty points in the technical review were not considered qualified for further review. Of the nine proposals submitted, four were deemed technically qualified, and these proposals were discussed with each of the participating cities to select the technology that best suited their desires and needs. The results of the Panel evaluation are listed in Attachment A.

Proposals

Praxair
Based on the Panel’s evaluation and input from the city of Ontario, staff recommends awarding a contract to Praxair, Inc. (Praxair) to design, install, and make publicly available a hydrogen fueling station at or near its hydrogen production facility in Ontario, located at 5705 E. Airport Drive. The station will tap into the plant’s existing gaseous hydrogen stream to provide fueling for ten light duty vehicles per day (5 kg/hydrogen each). The Praxair facility has been in operation since 1962, producing liquid hydrogen from pipeline natural gas using steam reformation. Due to the large capacity available at this site, this station offers the opportunity for future expansion as more hydrogen vehicles become available. Other advantages of this site include close proximity to Ontario International Airport and interstates I-10 and I-15.

Air Products
Air Products and Chemicals, Inc. (Air Products), partnering with Proton Energy and Northern Power Systems, submitted a proposal with multiple options, including electrolyzers powered by renewable photovoltaics, electrolyzers powered by the grid electricity, delivered liquid hydrogen, and mobile refuelers with compressed hydrogen. Based on the technical evaluation by the Panel and input from the cities, staff recommends installing electrolyzers at the cities of Burbank and Riverside, and implementing a mobile fueler at the city of Santa Ana.

The electrolyzer option allows the cities of Burbank and Riverside to use their city-owned electric utilities to provide the power. Both cities have also expressed interest in expanding their photovoltaic capabilities to ensure renewable hydrogen production in the future.

For the city of Santa Ana, the mobile fueler option provides budgetary and siting flexibility. Since the city has expressed an interest to ultimately produce hydrogen from landfill gas, the mobile fueler option provides sufficient interim hydrogen until the landfill gas technology is further developed and demonstrated.

Staff recommends keeping discussions open with DOE to leverage both agencies’ hydrogen programs in the technology selection and identification of the fifth city. Should DOE funding materialize, staff recommends apportioning it toward funding of the fifth city station and providing liquid hydrogen backup systems for the electrolyzer stations.

A summary of the city technology selections, costs, and the associated bidders are presented in the following table.
 

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in southern California to achieve air quality standards. This project will further develop technology for light-duty alternative fuel vehicles, and is expected to reduce NOx, CO and PM emissions to SULEV Standards. The projects will demonstrate that hydrogen powered vehicles equipped with internal combustion engines are a commercially viable bridge to hydrogen fuel cells, as well as utilize the emerging hydrogen fueling station infrastructure. The project fits within the charter of the AQMD to reduce criteria pollutants and offers the benefits of potential renewable hydrogen production and reduce dependence on foreign oil. Furthermore, the deployment of hydrogen stations advances the California Hydrogen Highway Network initiative as well as the federal Hydrogen Energy Roadmap.

Resource Impacts

The Clean Fuels Program 2003 Annual Report and 2004 Plan Update includes "Develop and Demonstrate Distributed Hydrogen Production and Fueling Stations" as a proposed project. The total cost to the AQMD for the installation and development of the hydrogen stations is not to exceed $2,311,000.

Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources and stationary sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.

Attachment

Attachment A - Evaluation Scores

Attachment A
Results of Panel Evaluation of Proposals Received in Response
to RFP #2004-01

Nine proposals were received in response to the hydrogen station portion of the RFP. The outside panel only reviewed the technical criteria. A total score of 80 points is required to be considered technically qualified and be further assessed by the AQMD and the cities.
 

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