BOARD MEETING DATE: April 1, 2005
AGENDA NO. 7

Execute Contracts Under State Emissions Mitigation Program

SYNOPSIS:

At the July 20, 2001 meeting, the Board established the State Emissions Mitigation Fund to recognize up to $30,000,000 in State funds from CARB. Some of the funds have not been used due to uncommitted projects and projects that cannot meet the required CARB deadline of June 30, 2005 by which all funds must be expended. An amount of approximately $1.5 million is available. This action is to de-obligate funds for Board approved locomotive and construction equipment projects under the Rule 2202 AQIP and Carl Moyer programs, and fund the same projects using $1,463,317 from the State Emissions Mitigation Fund. The de-obligated funds in the Rule 2202 AQIP and Carl Moyer programs will be used to fund cost effective projects in the respective programs in the near future.

COMMITTEE:

Technology, March 25, 2005, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize the Chairman to de-obligate funds in the amount of $446,450 awarded to Sukut Equipment, Inc. to re-power five diesel-powered wheel scrapers under the Rule 2202 AQIP Program (Fund 27), and approve the same project in an amount not to exceed $446,450 under the State Emissions Mitigation Program (Fund 39).
    
2. Authorize the Chairman to de-obligate funds in the amount of $700,000 awarded to OceanAir Environmental to upgrade two diesel-powered locomotive under the Rule 2202 AQIP Program, and approve the same project in an amount not to exceed $573,333 under the State Emissions Mitigation Program (Fund 39).
    
3. Authorize the Chairman to de-obligate funds in the amount of $443,534 awarded to Rentrac, Inc. to re-power engines on three wheel scrapers under the Carl Moyer Program (Fund 32), and approve the same project in an amount not to exceed $443,534 under the State Emissions Mitigation Program (Fund 39).

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In 2001, a statewide NOx and PM Reduction Program was created to mitigate excess emissions from peaker power generation units. In response to this request, the Board at its July 20, 2001 meeting, approved the establishment of the State Emissions Mitigation Fund. The AQMD received a total of $28,922,925 under this program in Calendar Years 2001 and 2002. Some of the funds have not been expended due to uncommitted projects and projects that cannot meet the required CARB deadline of June 30, 2005 by which all funds must be expended. A balance of approximately $1.5 million is currently available in this program.

In order to complete the proposed projects in an expeditious manner and to meet the above June 30, 2005 deadline, staff proposes to choose projects which were previously approved by the Board under the Rule 2202 Air Quality Investment Program (AQIP) and the Carl Moyer Program. The Rule 2202 AQIP projects were submitted by applicants in response to RFP #P2004-22 and were approved on October 1, 2004. The Carl Moyer Program projects were submitted by applicants in response to RFP #2005-02 and were approved on March 4, 2005. All of the proposed projects to be transferred to the State Emission Mitigation Fund have received concurrences from CARB.

Proposal

Staff proposes to transfer the following Board approved projects to the State Emission Mitigation Program (Fund 39):

• Sukut Equipment Inc. to re-power five diesel-powered wheel scrapers in an amount not to exceed $466,450 from the Rule 2202 AQIP;
• OceanAir Environmental to upgrade two diesel-powered locomotives in an amount not to exceed $573,333 from the Rule 2202 AQIP; and
• Rentrac, Inc. to re-power five engines on three wheel scrapers in an amount not to exceed $443,534 from the Carl Moyer Program

The proposed projects, funding amounts, and the emission reductions are presented in Attachment A.

A contract has been executed with Sukut Equipment Inc. for the project currently under the Rule 2202 AQIP. The proposed action would simply recognize a different source of funding.

For the proposed awards to REMTRAC, Inc. and OceanAir Environmental, staff will execute contracts as expeditiously as possible so that the emission reductions can occur as early as possible. It is anticipated that all projects will be completed by June 30, 2005. If for some unforeseen reason, these proposed projects cannot be funded by the State Emissions Mitigation Program funds, they will be funded, as previously approved by the Board, by their respective Rule 2202 AQIP and Carl Moyer Program funds. The de-obligated funds in the Rule 2202 AQIP or Carl Moyer programs will be used to fund cost effective projects in the respective programs in the near future.

Benefits to AQMD

The successful implementation of this program will result in mitigation of excess NO_x and PM emissions produced by peaking power plants, which must operate to accommodate peak electrical loads. These projects will also produce concurrent toxic compounds emissions reductions (e.g. lowered diesel exhaust particulate), which is an additional benefit. Finally, administration of this program at the local level will provide greater certainty and confidence for achieving the emission reductions since the AQMD has acquired experience and expertise in identifying emission sources and available control or prevention technologies.

Resource Impacts

Total cost of the proposed projects shall not exceed $1,463,317 from the State Emissions Mitigation Fund.

Attachment A

Proposed Projects

Attachment A

Proposed Projects
 

/ / /