BOARD MEETING DATE: November 4, 2005
AGENDA NO. 4

PROPOSAL:

Execute Contract to Cosponsor Development and Demonstration of On-Board Diagnostic Systems for Natural Gas Vehicles

SYNOPSIS:

On-Board Diagnostic systems (OBDII) are required on light- and medium-duty vehicles to help identify and diagnose emission problems with the increasingly complex engines and emission controls of newer vehicles. Baytech Corporation is a small-volume manufacturer who has developed and certified CNG systems for General Motors vehicles for many years. This action is to enter into a contract with Baytech Corporation to develop engine calibrations and perform emission testing to demonstrate OBDII compliance with their newest CNG system for General Motors full-size vans and cut-away vans. This demonstration will be used to certify the CNG vans for Model Year 2006. The total cost of this project is estimated to be $774,896 with AQMD funding not to exceed $319,615.

COMMITTEE:

Technology, October 28, 2005. Less than a quorum was present during the discussion of this item; the Acting Chairman communicated his concurrence and recommendation that this item be for-warded for Board consideration.

RECOMMENDED ACTIONS:

Authorize the Executive Officer to execute a contract with Baytech Corporation to develop and demonstrate On-Board Diagnostic systems for natural gas vehicles in an amount not to exceed $319,615 from the Clean Fuels Fund (Fund 31).

Barry R. Wallerstein, D.Env.
Executive Officer


Background

Over the last decade, natural gas has emerged as a leading low-emission alternative fuel technology for both stationary and mobile source applications. Based on the most recent emission inventory and toxic air pollution studies, mobile sources are the predominant contributor to ozone and fine particulate precursor emissions and to the public’s exposure to toxic air contaminants in Southern California. As a result, AQMD has aggressively promoted the use of natural gas and other alternative fueled vehicles.

Thousands of light- and medium-duty vans and van-derived vehicles operate in the Los Angeles Basin. Such applications include pick-up and delivery services, service trucks, passenger shuttle services, shuttle buses, and school buses. These vehicles typically oper-ate within a fixed area or over fixed routes, and are therefore ideal candidates for CNG vehicle usage and emerging refueling infrastructure. Available low-emission natural gas vehicle technologies are limited for these applications since Chrysler and Ford have ceased production, and General Motors will cease production this year.

Baytech Corporation is a small-volume manufacturer of certified CNG and propane systems for General Motors (GM) vehicles and engines. Baytech has certified numerous engine families with U.S. EPA and CARB since 1991. These included light-, medium- and heavy-duty vehicles.

CARB has required the newest generation of On-Board Diagnostic systems (OBDII) on light- and medium-duty vehicles since 1996. Such systems are required to help identify and diagnose problems with the increasingly complex engines and emission control systems of new vehicles. This includes monitoring the fuel injection system, ignition system, catalytic converter and numerous sensors and actuators. Baytech, in converting GM vehi-cles to CNG, has also developed expertise to adapt the GM engine, electronics and OBDII system to CNG.

CARB has granted flexibility in recent years to small-volume manufacturers of alternative fuel vehicles such as Baytech, due to the significant hurdles to fully comply with OBDII requirements. For 2005 models, CARB granted Baytech OBDII approval with near-full compliance; however, for 2006 models full compliance is required.

Proposal

Baytech Corporation has proposed to develop engine calibrations and perform emission testing to demonstrate OBDII compliance with their newest CNG system for 2006 model General Motors full-size vans and cut-away vans. This will be performed through the fol-lowing tasks.

Task 1 - Baytech will secure aged components and specialized equipment to induce mal-functions. Baytech will also secure a CNG full-sized van and CNG cut-away van for de-velopment, emission testing and demonstration.

Task 2 – Baytech will identify OBDII emission monitoring requirements that require re-calibration, specifically parameters for the fuel system and catalytic converter. Calibrations will be altered and refined to make the system comply with OBDII monitoring requirements and emission failure criteria. This will likely involve the oxygen sensors, fuel trim, misfire monitoring, and catalyst monitoring systems; other systems may be affected.

Task 3 - Chassis and engine dynamometer emission testing will be conducted to verify compliance with monitoring requirements. This will include testing with aged and mal-functioning components. Cold FTP-75, Hot-505 and HD Transient Engine emission tests will be performed demonstrating emission compliance at 4,000 miles of system aging.

Task 4 - Baytech will develop detailed OBDII compliance documents for the CARB certi-fication. In addition, streamlined OBDII procedures will be developed and presented to the CARB which can be used in future years for alternative OBDII certification. The overall project will require approximately 10 months to complete.

In summary, staff is requesting Board approval to enter into a contract with Baytech Cor-poration at a cost not to exceed $319,615 to perform the above tasks. Sufficient funds are available from the Clean Fuels Fund (Fund 31).

Benefits to AQMD

The proposed project is included in the March 2005 update of the Technology Advancement Plan under the project entitled, “Develop and Demonstrate Advanced Alternative Fuel Heavy-Duty and Medium-Duty Engines and Vehicles.” The AQMP relies upon the expedited implementation of advanced technologies in Southern California to achieve air quality standards and to continue reductions in air toxic exposure.

The AQMD has been extremely proactive in developing and demonstrating low-emission, medium- and heavy-duty natural gas vehicles. This project will help provide better air quality by reducing the NOx and particulate emissions from these vehicles while also re-ducing carbon dioxide greenhouse gas emissions.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provi-sions under which a sole source award may be justified. This request for a sole source award is made under provision B.2.d.: Other circumstances exist which in the determina-tion of the Executive Officer require such waiver in the best interest of the AQMD. Specifically, these circumstances are: B.2.d.(1) Project involving cost sharing by multiple sponsors.

This program is cosponsored by several entities, and AQMD’s contribution will be approximately 40 percent. Other project sponsors will be Texas Commission on Envi-ronmental Quality (TCEQ), General Motors (GM), Baytech Corporation, Clean Energy and BAF Technologies (BAF).

TCEQ recently awarded Baytech a grant to help accomplish the tasks of this project to ultimately improve air quality in Texas. GM is the world’s largest vehicle manufacturer, intends to supply gasoline vehicles for Baytech conversions to natural gas, and will sup-ply aged components and test equipment for this project. Clean Energy is the largest provider of vehicular natural gas in North America. BAF is a national distributor for Baytech and has installed more than 1000 Baytech CNG systems in the last nine years.

Resource Impacts

Total cost for the proposed project is approximately $774,896. The proposed contribution from the Clean Fuels Fund shall not exceed $319,615. The total estimated cost-share for this proposed project is as follows:

Texas Commission on Environmental Quality $112,561
General Motors 138,250
Baytech Corporation  88,560
Clean Energy  69,825
BAF Technologies 46,085
AQMD 319,615
        Total $774,896

Sufficient AQMD funds are available in the Clean Fuels Fund, which is established as special revenue 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 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 sup-port the objectives of the Clean Fuels Program.

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