BOARD MEETING DATE: June 4, 2004
AGENDA NO. 6

Award Multiple Contracts for Natural Gas Refueling Station Infrastructure and Reissue RFP

SYNOPSIS:

On October 3, 2003 the Board approved release of a $1.5 million RFP to solicit proposals for natural gas refueling station infrastructure projects from the Clean Fuels Fund. Twenty-six proposals were received by the RFP deadline of December 16, 2003. Staff believes that 16 of these proposals deserve funding and proposes that funding, in the amount of $1,280,000, reverted back to the AQMD from its AES Settlement Fund and Clean Fuels Fund be used to fund these projects. This action is to de-obligate prior funding commitments, revert funds back to the Clean Fuels Fund, and to approve multiple contract awards from this RFP. Total AQMD funding for these projects shall not exceed $2,742,323. Staff is recommending that the RFP be reissued to solicit additional natural gas fueling infrastructure projects with a budget ranging from $726,046 to $1,726,046.

COMMITTEE:

Technology, April 23, 2004, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize the Chairman to execute contracts with the following entities in an amount not to exceed $2,742,323. Of that amount, $2,396,323 would be from the Clean Fuels Fund and $346,800 will come from the AES Settlement Fund.

1. A contract with RF Dickson Co., Inc., in an amount not to exceed $211,148 from the Clean Fuels Fund, to offset the costs of upgrading an existing CNG station at their facility in Bellflower.
2. A contract with Downs Commercial Fueling, in an amount not to exceed $203,137 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new L/CNG fueling system at their commercial fueling station in Temecula.
3. A contract with Orange Co. Sanitation District, in an amount not to exceed $24,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new dispenser and credit card payment system at their facility in Fountain Valley.
4. A contract with Consolidated Disposal Service, in an amount not to exceed $222,038 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new LNG fueling system at their waste transfer station in Long Beach.
5. A contract with Burrtec, Inc., in an amount not to exceed $188,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new LNG fueling station at their refuse transfer station in Santa Clarita.
6. A contract with Sysco Food Services, in an amount not to exceed $250,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new LNG fueling system at their food distribution center in the City of Walnut.
7. A contract with Clean Energy, Inc., in an amount not to exceed $114,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new public access CNG fueling station at Foothill Transit in Pomona.
8. A contract with Clean Energy, Inc., in an amount not to exceed $250,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new 24-hour public access CNG fueling station in Mission Viejo.
9. A contract with Clean Energy, Inc., in an amount not to exceed $190,000 from the Clean Fuels Fund, to offset the costs of upgrading an existing CNG fueling station at the Southern California Gas Company facility in Santa Monica.
10. A contract with Clean Energy, Inc., in an amount not to exceed $120,000 from the Clean Fuels Fund, to offset the costs of upgrading an existing LNG facility to a L/CNG fueling station at the Riverside County Waste Management Department’s Agua Mansa facility in Riverside.
11. A contract with Clean Energy, Inc., in an amount not to exceed $250,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new 24 hour public access CNG fueling station at the Southern California Gas Co.’s Canoga Park facility.
12. A contract with Gas Equipment Systems, Inc., in an amount not to exceed $150,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new CNG fueling system at the County of Los Angeles Department of Beaches and Harbors’ facility in Malibu.
13. A contract with Gas Equipment Systems, Inc., in an amount not to exceed $150,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new CNG fueling system at the County of Los Angeles Department of Beaches and Harbors’ facility in Zuma Beach.
14. A contract with Gas Equipment Systems, Inc., in an amount not to exceed $150,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new CNG fueling system at the intersection of California & Third Streets in the City of Beaumont.
15. A contract with Gas Equipment Systems, Inc., in an amount not to exceed $120,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new CNG fueling station at the City of San Fernando Public Works Department yard.
16. A contract with the City of La Verne, in an amount not to exceed $150,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new CNG fueling station at the City Hall in La Verne.

2. Reduce the March 2003 Board approved funding of $750,000 awarded to Praxair, Inc., of $137,264 awarded to Cryogenic Equipment Services, and $549,054 awarded to SunLine Services Group from the Clean Fuels Fund to $0. The un-spent $1,436,318 will revert to fund the current proposal.
    
3. Reduce the November 2000 Board approved funding of $35,000 awarded to the Gas Research Institute from the Clean Fuels Fund to $0. The un-spent $35,000 will revert to fund the current proposal.
    
4. Amend the original amount of $892,615 of existing contract #02157 with Clean Energy to an amount not to exceed $742,364. The un-spent $150,251 will revert to fund the current proposal.
    
5. Reduce the July 2001 Board approved funding of $10,350 awarded to CALSTART and $230,000 awarded to Pinnacle CNG from the AES Settlement Fund to $0. The un-spent $240,350 will revert to fund the current proposal.
    
6. Amend the original amount of $301,250 of existing contract #02074 with Clean Energy to an amount not to exceed $88,800. The sum of $106,000 had already been de-obligated. The un-spent $106,450 will revert to fund the current proposal.
    
7. Authorize the re-issue of the original Request for Proposals (RFP P2004-09) with a two-month contract preparation / submission period to solicit additional natural gas fueling station project proposals with a budget ranging from $726,046 to $1,726,046 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On October 3, 2003, the Board authorized release of RFP #P2004-09 soliciting cost-shared proposals for installing new natural gas fueling facilities within the South Coast AQMD jurisdictional boundaries. Continued expansion of the natural gas fueling infrastructure needs to occur in order to support increased public and private fleet fueling needs and support future incentive program awards such as the Chairman’s School Bus Replacement initiative and the Carl Moyer Program.

The Board approved a total of $1.5 million from the Clean Fuels Fund to support the RFP. This funding is designed to offset capital investment costs, resulting in conveniently located, publicly-accessible fueling stations. For this RFP, funding was only provided for natural gas fueling stations. Applications were accepted from either public agencies or private entities (i.e. state and local governments, automobile manufacturers, alternative fuel suppliers, manufacturers of natural gas related equipment, and end users of natural gas motor fuel). While the RFP did not require components to be currently hydrogen compatible, it provided for additional points for considering such hydrogen compatibility issues. In any event, staff believes that natural gas fueling stations are inherently hydrogen-compatible because the fuel may be used to generate hydrogen.

The level of required cost share is based upon the amount of grant funds requested (see Table 1 below) and the cost share is based upon cash expenditures, (i.e. land/lease, equipment, engineering, permits, installation, etc.). In-kind services are limited to 10 percent.

Table 1. Cost-Share Request Limitations
 

The general requirements of the RFP are identified below:

1)	Proposed project must be located within the jurisdictional boundaries of the South Coast Air Quality Management District.
2)	Proposed project shall be a natural gas "fast-fill" station with public access.
3)	Project schedule shall be limited to an eighteen-month timeframe.
4)	Proposed project may request cost-share funds for capital investment costs only.
5)	Applicant will be contractually obligated to proposed station throughput.

Twenty-six proposals were received by December 16, 2003 (the closing date of the solicitation) totaling $4.6 million in requested funding.

In prior years, the Board has recognized the need for additional natural gas fueling infrastructure, and has awarded funding for several alternative fueling infrastructure projects through the Clean Fuel Funds, the AES Settlement Fund, and from the Rule 1309.1 Priority Reserve Funds. While these actions have resulted in establishing 37 new fueling stations and the upgrade of an additional 27 stations, a few of the proposed projects that were awarded funding cannot be completed due to permitting and contracting issues. As a result, staff is proposing to either fully or partially terminate the remainder of these contracts. The de-obligated funds could be made available to cover the additional funding requests beyond the Board approved allocation of $1.5 million.

Proposal

As mentioned above, 26 proposals were received by the RFP deadline of December 16, 2003. Figure 1 shows the geographical locations of the 26 proposed refueling station projects and differentiates between stations that incorporated hydrogen compatibility design and equipment specifications and those that did not. As seen in Figure 1, in addition to the existing infrastructure network, these new projects are strategically located to help establish an infrastructure "backbone" that will allow for fueling of all types of natural gas vehicles throughout the Basin.

Figure 1. Locations of the existing and the 26 proposed natural gas refueling stations.

All proposals received in response to RFP #2004-09 were evaluated and scored by a diverse, technically qualified panel in accordance with criteria contained in the RFP. The evaluation panel’s technical scores for each proposal are provided in Attachment A. Sixteen of the 26 proposals are deemed technically qualified.

As codes and standards for hydrogen fueling stations do not currently exist, the RFP did not require components to be currently hydrogen compatible; however, it provided for additional points to applicants committing to station designs and space consideration that could incorporate hydrogen compatible equipment for future transportation applications. Equipment modifications and retrofitting with hydrogen compatible plumbing, tubing, dispensers and compressors qualified for these additional points. Of the twenty-six proposals received, twenty made specific commitments for making the fueling infrastructure project hydrogen compatible in the future. Of the sixteen proposals recommended for funding, all sixteen have made specific commitments for making the fueling infrastructure project hydrogen compatible in the future.

Eight projects proposed by Gas Equipment Services Inc., or where they will act as the contractor, will utilize 3,600 psi compressors manufactured by Ingersoll-Rand. These compressors are made from Type 316 stainless steel and, with appropriate field modifications to seals and other internals, should be able to perform with hydrogen at various delivery pressures.

Six projects proposed by Clean Energy Inc. will use best engineering practices to design all electrical systems to be hydrogen compatible, specifically to NFPA 70 standards and cross reference these with NFPA 50A standards. Additional PVC conduit to house hydrogen plumbing/tubing made from Type 316 stainless steel will be installed. Space considerations will be incorporated into all station design for future hydrogen storage, dispensing and reforming equipment.

Five proposed LNG projects are already compatible with the storage and dispensing of liquid hydrogen by the storage tanks design and construction. All four projects will make space and design improvements in order to facilitate the addition of hydrogen refueling equipment later.

The project proposed by RF Dickson Co. has sufficient space for additional civil improvements for hydrogen-specific compression and storage systems. Best engineering practices will be employed to design all electrical, plumbing/tubing and fire safety systems for future hydrogen dispensing operations. In any event, AQMD staff believes that natural gas fueling stations are inherently hydrogen-compatible because the fuel may be used to generate hydrogen at some future date.
 

At the original funding level of $1.5 million only the top eight proposals could be funded. The eight proposals are listed in Table 2. Staff is recommending that the proposals listed in Table 2 be funded with the original $1.5 million allocated by the Board.

Table 2. Projects proposed to be funded with the
original $1.5 million Board allocated funds.
 

Staff believes that continued expansion of the alternative clean fuels infrastructure is needed, and therefore that funding of the majority of the remaining projects should also be considered. To facilitate the funding of additional projects, staff is proposing that natural gas refueling infrastructure contract awards that have not been initiated or completed for various reasons be terminated and the remaining funds be de-obligated and used to fund additional proposals under the current solicitation. The following sections describe the contract awards that staff is proposing that the Board de-obligate.

Existing Contract Awards Proposed to be De-obligated

Table 3 provides a list of eight projects where either partial or entire funding awards are proposed to be de-obligated. A brief discussion of each of the projects is provided in the following section.

Table 3. Existing projects proposed to be de-obligated.
 

Additional funds may become available. Staff is working closely with the Orange County Transportation Authority (OCTA) to go forward with their LNG fleet and fueling infrastructure expansion plans. At the October 2002 meeting the Board awarded $1 million to OCTA. AQMD staff will submit a letter to OCTA requesting resolution of the expansion within 90 days.

CryoEquipment Services

At its April 2003 meeting, the Board awarded $137,264 to CryoEquipment Services to partially offset the installation cost of a new LNG production facility. CryoEquipment Services proposed to construct the LNG production facility on Southern California Gas Company property. However, Southern California Gas Company indicated that the property proposed originally is needed for other purposes. With the possible advent of several LNG terminals being installed on the West Coast, CryoEquipment Services is discontinuing the investment until such time as they can determine that the LNG terminals may not come to fruition. As a result, staff proposes that $137,264 revert to the Clean Fuels Fund and be used to fund the current solicitation.

SunLine Services Group

At its April 2003 meeting, the Board awarded $549,054 to SunLine Services Group in Thousand Palms to partially offset the installation cost of a new LNG production facility. SunLine Services Group recently indicated that, given other operational priorities as well as the possible advent of several LNG terminals being installed on the West Coast, they are discontinuing the investment until such time as they can determine that the LNG terminals may not come to fruition. As a result, staff proposes that these funds revert to the Clean Fuels Fund and be used to fund the current solicitation.

Clean Energy, Inc. – Unused Funds

At its August 2001 meeting, the Board awarded $892,615 to Pickens Fuel Corporation (now Clean Energy, Inc.) to upgrade 17 existing CNG stations throughout the South Coast Air Basin. Three of the 17 sites, located at John Wayne Airport, the SuperShuttle headquarters in Anaheim and the Orange County Sanitation District office, did not require funding as originally proposed. A new station was constructed at John Wayne Airport, as opposed to being upgraded, and AQMD funding was not required. SuperShuttle moved their headquarters from the Anaheim site to a new location and installed their fueling station at their own expense. Lastly, the Orange County Sanitation District facility will be upgraded with relatively-new equipment from Clean Energy’s existing City of Industry site, as that site is being claimed by the City under eminent domain. As a result, $150,251 remain unused. Staff proposes that $150,251 revert to the Clean Fuels Fund and be used to fund the current solicitation.

Gas Research Institute

At its November 2000 meeting, the Board awarded $35,000 to the Gas Research Institute (GRI) to upgrade the existing LNG station at the UPS Ontario Airport facility. GRI was unable to secure consensus and sufficient funding through the technical partner ALT-USA to perform the upgrade; hence AQMD funds were not utilized. As a result, staff proposes that these funds revert to the Clean Fuels Fund and be used to fund this proposal.

CALSTART/WestStart

At its July 2001 meeting, the Board awarded $10,350 to CalStart to defray the cost of installing a slow-fill CNG station at its headquarters. CALSTART terminated the project as they moved their headquarters and no longer have adequate space to accommodate the station. Staff proposes that these funds revert to the Clean Fuels Fund and be used to fund the current solicitation.

Clean Energy – Administrative Services Co-Op

At its July 2001 meeting, the Board awarded $106,450 to Clean Energy, Inc. to install a new CNG fueling station at the Administrative Services Co-Op in Gardena (a taxicab company servicing LAX). Due to contracting issues between Clean Energy, Inc. and Administrative Services Co-Op, the station was not constructed. As a result, staff proposes that these funds revert to the Clean Fuels Fund and be used to fund the current solicitation.

Pinnacle CNG

At its July 2001 meeting, the Board awarded $230,000 to Pinnacle CNG to install a new CNG fueling station at Ware Disposal in Santa Ana. Due to contracting issues between Pinnacle CNG and Ware Disposal the station was not constructed. As a result, staff proposes that these funds revert to the Clean Fuels Fund and be used to fund the current solicitation.

Praxair, Inc.

At its October 2002 meeting, the Board awarded $750,000 to Praxair, Inc. to offset the costs of purchasing and installing an LNG production facility at the Wilmington air separation facility. With the possible advent of several LNG terminals being installed on the West Coast, Praxair is discontinuing the investment until such time as they can determine that the LNG terminals may not come to fruition. As a result, staff proposes that these funds revert to the Clean Fuels Fund and be used to fund the current solicitation.

Upon the Board’s approval, contracts will be amended to de-obligate funds, where appropriate.

Staff Proposed Funding of Additional Proposals

Table 4 lists the remaining proposals under the current solicitation that could be funded with the de-obligated funds proposed in the previous section. Staff is recommending that an additional 8 proposals be funded at a cost not to exceed $1,280,000. A total of 16 proposals are recommended for funding at a cost not to exceed $2,742,323.

Table 4. Proposals Recommended for Award with the Proposed De-Obligated Funds.
 

The eight proposals listed in Table 4 received technical scores above the minimum criteria of 56 points. The remaining ten proposals received scores below the minimum criteria.

The total award proposed would be $2,742,323 for the 16 projects. Of the total amount, $2,396,323 would be from the Clean Fuels Fund and $346,800 will come from the AES Settlement Fund.

Staff recommends that the Board authorize the re-issuance of the original Request for Proposal (RFP P2004-09) allowing for a solicitation period of two months with a budget of up to $1,726,046 using the de-obligated funds that revert to the Clean Fuels Fund. Applicants will be encouraged to re-apply to the re-released RFP as well as other future programs funded through the Clean Fuels Fund and other incentive programs such as the California Energy Commission and Mobile Source Air Pollution Review Committee (MSRC) programs.

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. By constructing more natural gas fueling facilities, benefits from this project will accrue to all cities and area residents. Such new construction will provide a coordinated effort, plan for growth of the overall infrastructure and enable the transition to future hydrogen refueling infrastructure. There are economies of scale from the extensive infrastructure being planned and installed, possibly reducing the cost and making alternative refueling stations more affordable. While having no direct impact on air emission reductions, new CNG stations will help facilitate the introduction of low emission, natural gas fueled vehicles (NGVs) initially in private and public fleets in the area. Such increased penetration of NGVs will provide direct emissions reductions of NOx, VOC, CO, PM, and air toxic compounds throughout the Basin.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids will be published in the following publications:
 

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

Additionally, potential bidders will be 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 will be 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 where it can be viewed by making menu selections "Inside AQMD"/"Employment and Business Opportunities"/"Business Opportunities" or by going directly to http://www.aqmd.gov/rfp/index.html). Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

In addition to publication in the above-cited publications, over 100 individual RFP notices were mailed to interested businesses and individuals.

Bid Evaluation

Proposals received were evaluated by a diverse, technically qualified panel in accordance with criteria contained in the attached RFP. The evaluation panel consisted of a representative from CARB, an independent technical expert, and the AQMD Fleet Rules Implementation Manager. The panel make-up consisted of one Asian/Pacific Islander, one Caucasian, and one Hispanic; two female and one male. Attachment A provides a summary of the proposals received ranked by the scores received from the evaluation panel.

Twenty-six proposals were received with a requested funding totaling $4.6 million. Of the 26 proposals received, 16 were scored with a technical value above 56 points (the minimum score needed for further consideration). The remaining 10 proposals are not deemed for funding consideration since they did not meet the requirements of the RFP or was not sufficiently clear in the project proposal.

In accordance with approved AQMD RFP guidelines, the least-cost proposal was awarded the most points in the cost category. All other proposals received a percentage of that highest score, with proposals costing over twice the lowest score getting zero points.

Some of the proposals are recommended to receive only partial funding compared to their original request. The partial funding recommendations are based on adjustments to the requested funding amount to represent the upper throughput limits specified in the RFP. In one proposal, the project proponent indicated that additional funds that were not originally anticipated are being provided at this time. As such, the recommended AQMD funding is reduced from the original request.

Resource Impacts

Funding, in an amount not to exceed $2,742,323, is proposed to fund 16 proposals shown in Tables 2 and 4. Funding of $1.5 million would be from the Clean Fuels Fund originally allocated by the Board. The remaining $1,242,323 would be from prior year natural gas fueling project awards that staff is requesting the Board to de-obligate. Upon the Board’s approval, $346,800 of the $1,968,369 would be returned to the AES Settlement Fund and $1,622,369 (from Table 3) would be returned to the Clean Fuels Fund.

Table 5. Summary of awards to be de-obligated

Attachment

Attachment A. - Evaluation of Proposals RFP #P2004-09 Recommended for Awards

Attachment A
Evaluation of Proposals RFP #P2004-09 Recommended for Awards
 

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