BOARD MEETING DATE: June 2, 2006
AGENDA NO. 4

Execute Contract to Expand Reformer System and Upgrade Refueling Station in Coachella Valley

SYNOPSIS:

On September 13, 2002, the Board awarded a contract with SunLine Services Group to install and demonstrate a natural gas reformer hydrogen refueling station.  This station has successfully demonstrated the viability of on-site hydrogen production and has fueled numerous vehicles, including two fuel cell buses, a hydrogen internal combustion engine, HCNG buses, as well as numerous light-duty fuel cell vehicles.  The original contract has expired, whereas demand for hydrogen fuel has increased.   This action is to co-fund the upgrade of the existing infrastructure to commercial standards in an amount not to exceed $640,000 from the Clean Fuels Fund, with a total project cost of $1,200,000.

COMMITTEE:

Technology, May 26, 2006, Recommended for Approval

RECOMMENDED ACTIONS

Authorize the Chairman to execute a sole-source contract with SunLine Services Group to co-fund the upgrade of the existing hydrogen infrastructure at a cost not to exceed $640,000 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 management attainment strategy.  Hydrogen vehicles, including those powered by fuel cell and internal combustion engine (ICE), have the potential to significantly reduce VOC, NOx, CO and toxic emissions as well as greenhouse gas emissions.  Over the past five years, the AQMD, along with industry and state/federal agencies, has co-funded the development of initial hydrogen stations throughout the basin.  Most recently, the implementation of the five-cities vehicle and station demonstration program has received state and national recognition for its development of fueling infrastructure and promotion of hydrogen vehicle technologies.  AQMD continues to coordinate its hydrogen activities with the California Hydrogen Highway Network and the U.S. Department of Energy.

In September 2002, the Board approved co-funding for an initial network of five hydrogen fueling stations in the South Coast Basin.  One of the stations co-funded was in the Coachella Valley and utilized autothermal catalytic reformation of natural gas to generate hydrogen fuel for the buses and some light-duty vehicles at SunLine Transit Authority (SunLine).  To date, this station is the only one in the Basin that provides hydrogen fueling for transit buses.  However, the original contract has expired and SunLine has continued to increase its demand for hydrogen fuel.  SunLine has operated a 30-foot fuel cell bus, and continues to operate a 40-foot hydrogen ICE hybrid-electric bus.  Additionally, SunLine also operates two buses that utilize a mixture of hydrogen and natural gas, and also provides fueling for numerous light-duty vehicles.  AQMD has co-funded the development and demonstration of most of these vehicle projects.

Proposal

In order to fully service their existing hydrogen vehicles and accommodate plans for expanding their hydrogen fleet, SunLine would like to modify their existing facility to near-commercial standards by conducting the following upgrades:

• Replacing the current prototype reformer with the commercial HyRadix Aptus™ Hydrogen Generator capable of producing up to 100 kg/day, as well as a six-year maintenance agreement to guarantee reformer operation.
• Installing 60 kg of hydrogen storage, increasing the stored capacity to 180 kg
• Replacing the current dispenser with a two-hose dispenser for light-duty vehicles and fast-fill for buses
• Installing a FuelForce 814-C hydrogen fuel island card reader, with magnetic reader
• Replacing the current booster compressor with a PDC booster compressor to allow fast high-pressure recovery time

These upgrades will allow SunLine to operate at least one zero emission bus and possibly expand their fleet to further support CARB’s zero emission bus goals in the Urban Bus Rule.  The upgrade will also allow the refueling station to conform to the Hydrogen Highway Network guidelines and provide additional data gathering for a more robust, commercial-level refueling facility.

The recommended action is to award a sole-source contract to SunLine to conduct the above upgrades at a cost not to exceed $640,000 from the Clean Fuels Fund, with total project costs of $1,200,000.  The remaining funding is being provided by SunLine.

Sole Source Justification

In the “Procurement Policy and Procedure” document, Section VIII outlines the provisions for awarding a sole source contract.  Specifically, under item B. 2.d, “Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interests of AQMD,” namely (1) “Projects involving cost sharing by multiple sponsors."

The proposed project includes a proposed 47.7% cost share by SunLine.

SunLine Services Group is among the most progressive transit agencies operating within the AQMD.  It has aggressively and successfully implemented alternative fueled vehicles in their commercial operations, including hydrogen-fueled buses.  SunLine Services Group has extensive experience in designing, implementing and successfully operating gaseous fueling stations and gaseous fueled vehicles.

Benefits to AQMD

The proposed project is included in the Technology Advancement Office Clean Fuels Program 2006 Plan Update under the item “Develop and Demonstrate Distributed Hydrogen Production and Fueling Stations.”  The projects identified in the Plan Update are intended to expand and upgrade the hydrogen infrastructure in the Basin.

AQMD has been extremely proactive in developing and demonstrating cost-effective production and utilization of clean fuels, including hydrogen.  Fuel cell vehicles constitute the cleanest alternative-fuel vehicles today, and hydrogen infrastructure will accelerate the acceptance and ultimate commercialization of these vehicles.

Resource Impacts

The total amount of AQMD funding for this program shall not exceed $640,000.

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 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.