BOARD MEETING DATE: January 7, 2005
AGENDA NO. 8
(Continued from the December 3, 2004 Board meeting)

Award Multiple Contracts for Natural Gas Refueling Station Infrastructure, Amend Prior Funding Commitment and Reissue RFP

SYNOPSIS:

On August 6, 2004, the Board approved the re-release of an RFP to solicit proposals for natural gas refueling station infrastructure projects. The budget for the RFP ranged from $726,046 to $1,726,046. At this time, only $726,046 is available. Nine proposals were received by the RFP deadline of October 1, 2004. Staff recommends that eight of the proposals be funded at a total cost not to exceed $980,618 from the Clean Fuels Fund. Staff proposes that $254,572 from the Clean Fuels Fund be used to augment the original budget of $726,046 to cover the eight recommended proposals for a total amount not to exceed $980,618. Staff recommends amending a prior funding commitment to Clean Energy, Inc. for fueling infrastructure totaling $200,000 and reverting these funds to the AES Settlement Fund. In addition, staff recommends that the RFP be reissued to solicit additional natural gas fueling infrastructure projects with a budget of $245,428, $200,000 from the AES Settlement Fund and $45,428 from the Clean Fuels Fund.

COMMITTEE:

Technology, November 19, 2004, Recommended for Approval

RECOMMENDED ACTION:

1. Amend the contract and reduce the October 2002 Board approved funding of $1,000,000 awarded to Clean Energy, Inc. from the AES Settlement Fund to $800,000. The unspent $200,000 will revert to the AES Settlement Fund.
    
2. Authorize the Chairman to execute contracts with the following entities in an amount not to exceed $980,618 from the Clean Fuels Fund.

1. A contract with City of Whittier, in an amount not to exceed $150,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new public access CNG fueling station at the city yard.
2. A contract with UCLA Fleet and Transit Services, in an amount not to exceed $15,921 from the Clean Fuels Fund, to offset the costs of upgrading the existing public access station with a new dispenser and card reader.
3. A contract with Whittier Union High School, in an amount not to exceed $15,921 from the Clean Fuels Fund, to offset the costs of upgrading the existing public access station with a new dispenser and card reader.
4. A contract with Sanitation Districts of Los Angeles County, in an amount not to exceed $250,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new fast-fill public access CNG fueling station at the Joint Water Pollution Control Plant located in the City of Carson.
5. A contract with Lake Elsinore Unified School District, in an amount not to exceed $75,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new CNG fueling station at the school’s maintenance yard.
6. A contract with Yellow Cab Company, in an amount not to exceed $150,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new public access CNG fueling station at 1619 East Lincoln Ave., Anaheim.
7. A contract with City of Sierra Madre, in an amount not to exceed $73,776 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new public access CNG fueling station at the city yard.
8. A contract with First Student Inc., in an amount not to exceed $250,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new public access CNG fueling station at the bus yard in the City of Gardena.

3. Authorize the reissuance 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 of $245,428. Of that amount, $45,428 will come from the Clean Fuels Fund and $200,000 from the AES Settlement Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On August 6, 2004, the Board authorized the re-issuance 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 $726,046 to $1,726,046. At this time, only $726,046 is available 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).

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 over 47 new fueling stations and the upgrade of an additional 32 stations, a proposed project that was awarded funding cannot be completed due to contracting issues. As a result, staff is proposing to amend this contract. The reverted funds could be made available to cover the reissue of RFP 2004-09.

Proposal

Nine proposals were received by October 1, 2004 (the closing date of the solicitation) totaling over $1.2 million in requested funding. Eight of the nine proposals were deemed technically qualified for a total of $980,618 in funds, exceeding the available level of funding. Staff is recommending that the eight proposals be funded at this time. Staff also recommends the amendment of an existing contract with Clean Energy, Inc., reverting unspent funds back to the AES Settlement Fund. Staff proposes these unspent funds be used in the re-issuance of the natural gas infrastructure RFP. In addition, staff is administratively terminating a contract with Waste Management Energy Solutions.

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 of the total proposed cost of the project.

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.

As mentioned above, nine proposals were received by the RFP deadline of October 1, 2004. 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.

As fully developed 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 nine proposals received, eight made specific commitments for making the fueling infrastructure project hydrogen compatible in the future, including;

1)	The use of stainless steel that, with modifications, is hydrogen capable.
2)	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.
3)	Additional PVC conduit to house hydrogen plumbing/tubing made from Type 316 stainless steel will be installed.
4)	Space considerations will be incorporated into all station design for future hydrogen storage, dispensing and reforming equipment.

The nine proposals were evaluated by a panel as described in the Bid Evaluation Section below. Staff is recommending that eight of the nine proposals be funded.

Table 2. Projects proposed to be funded

The staff recommendation would require an additional $254,572 of funding from the Clean Fuels Fund to augment the original available funds of $726,046. Table 3 provides the project an amendment of an existing contract is proposed. The total amount of unused funds is $200,000. Staff is recommending the $200,000 revert to the AES Settlement Fund and be used for future alternative-fuel infrastructure awards as part of the staff’s recommendation to re-issue the natural gas infrastructure RFP. A brief discussion of the project that staff is recommending for de-obligation is provided in the following section.

Table 3. Funds to revert to AES Settlement Fund

Clean Energy, Inc. – Amend Contract
At its July 2001 meeting, the Board awarded $1,400,000 to Pickens Fuel Corporation (now Clean Energy, Inc.) to cost-share the construction of seven new CNG stations throughout the South Coast basin. Three of the eight sites, located in south Orange County, San Gabriel and the Mid Wilshire area, did not require funding as originally proposed. Funding has already been reduced for two of these three stations in previous Board actions in the amount of $400,000. The third site, located on Exposition Boulevard in Los Angeles, could not be contracted for with the landowners. As a result, $200,000 of the $1.4 million remain unused. Staff proposes that $200,000 revert to the AES Settlement Fund and be used to fund the re-issue of the natural gas infrastructure RFP.

Waste Management Energy Solutions, Inc.
In addition, a contract with Waste Management Energy Solutions has been terminated at their request. At its April 2003 meeting, the Board awarded $300,000 to Waste Management Energy Solutions, Inc. to partially offset the installation cost of a new LNG production facility. Waste Management proposed to construct the LNG production facility at the Bradley Landfill in Los Angeles. However, permitting restrictions would not allow for the potential increase in local noise and traffic resulting from the production facility and Waste Management was not allowed to construct the facility in Southern California. The new facility is now being planned for construction in Livermore, California. The company has negotiated an exchange arrangement with Applied LNG Technologies (ALT) where ALT will supply the local refueling station on a gallon-for-gallon basis for every gallon of LNG produced at the Livermore facility. As a result, $300,000 has reverted to the Clean Fuels Fund.

In summary, staff recommends:

1)	Funding the eight proposals listed in Table 2 at a cost not to exceed $980,618. Sufficient funds are available from the Clean Fuels Fund with $726,046 from the original proposal funding level and $254,572 from the Clean Fuels Fund.
2)	Amended an existing contract with Clean Energy, Inc. reducing the award by $200,000 (Table 3).
3)	Re-issuance of RFP #P2004-09 to further expand the natural gas refueling infrastructure in the South Coast Air Basin.

Benefits to AQMD

The 2003 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 and inviting bids was published in the following publications:
 

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 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.

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 an Alternative Strategies Section Manager from CARB, an independent technical consultant to the AQMD, and the AQMD Fleet Rules Implementation Manager; 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.

Nine proposals were received with a requested funding totaling $1.23 million. Of the nine proposals received, eight were scored with a technical value above 56 points (the minimum score needed for further consideration). The remaining proposal was not deemed for funding consideration since it 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.

Staff recommends that the Board authorize the re-issuance of the original RFP #P2004-09 allowing for a solicitation period of two months with a budget of up to $245,428 using the $200,000 in funds that reverted to the AES Settlement Fund as well as $45,428 in additional funds from 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.

Resource Impacts

Funding, in an amount not to exceed $980,618, is proposed to fund the eight proposals shown in Table 2. Funding of $726,046 was from the Clean Fuels Fund originally allocated by the Board.

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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