BOARD MEETING DATE: September 7, 2007
AGENDA NO. 10

PROPOSAL:

RECOMMENDED ACTIONS:

1. Transfer $107,125 from the Rule 1309.1 Priority Reserve Fund (Fund 36) to the Science and Technology Advancement FY 2007-08 Budget, Professional and Special Services account.
2. Recognize $100,000 in revenue from U.S. EPA from the Section 103 Grant for the 2006 Collaborative Diesel Emission Reduction Program, and appropriate the $100,000 from the Undesignated Fund Balance to the Science and Technology Advancement FY 2007-08 Budget, Professional and Special Services account.
3. Upon receipt of award from Caltrans, recognize revenue in the amount of $380,000 in the General Fund.
4. As part of the Caltrans award, appropriate $100,000 from the Undesignated Fund Balance to the Science and Technology Advancement FY 2007-08 Budget, Professional and Special Services account.
5.  Authorize the Chairman to execute a contract with Miratech Corporation to develop and demonstrate a diesel particulate filter on a Pacific Harbor Line switch locomotive at a cost not to exceed $307,125 from the Science and Technology Advancement FY 2007-08 Budget, Professional and Special Services Account.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Diesel particulate filters (DPFs) have been introduced in recent years on heavy-duty on-road trucks and buses for PM control and are being used on all 2007 model heavy-duty engines. Hug Engineering of Switzerland has developed and introduced a DPF system for switch locomotives in Europe. Such DPF systems use a fuel-fired burner in order to assist in regeneration of collected PM. Switch locomotives spend much time idling and generally have cooler diesel exhaust which does not self-initiate DPF regeneration.

In February 2006, the Board recognized revenues allocated to AQMD from the federal Diesel Emissions Reduction Program under the U.S. Department of Transportation Federal Highway Administration (FHWA) and the California Department of Transportation (Caltrans). These funds, when received, would be available for such demonstration projects.

In September 2006, the Governing Board approved execution of a contract with Miratech Corporation to develop and demonstrate a diesel particulate filter on a Pacific Harbor Line (PHL) switch locomotive. A contract with Miratech was unable to be executed in FY 2006-07 because of a number of delays including late receipt of U.S. EPA and Caltrans grant awards and a late final agreement for a subcontractor’s critical participation in this project. This subcontractor is MotivePower of Boise, Idaho, who is building the demonstration switch locomotive, as well as 15 other similar locomotives for PHL. The agreement with the proposed prime contractor, Miratech Corporation, resulted in an increase in project cost which will be borne by others.

Proposal

Staff is proposing that Miratech Corporation (the U.S. representative for Hug Engineering) develop and demonstrate a Hug Engineering DPF system on a PHL switch locomotive. PHL provides local rail service at the Ports of Los Angeles and Long Beach. Under an agreement with the Ports and assistance from the AQMD, PHL is upgrading its fleet with 16 repowered locomotives with 2000-horsepower four-cycle engines. These locomotives are to be remanufactured for PHL by MotivePower.

The DPF system is expected to reduce switch locomotive PM emissions by 90 percent. The basic tasks in this project are: engineering the Hug DPF design into the demonstration locomotive; manufacturing and delivering the DPF system; installing the DPF system into the demonstration locomotive; delivering the locomotive to the port area; and demonstrating and monitoring the DPF-equipped switch locomotive for one year in port rail service. Under its operating agreement with the Ports of San Pedro Bay, PHL is investigating DPFs for its switch locomotives and will install them if feasible. Should the project prove successful, MotivePower, with the assistance of Miratech Corporation, would be able to provide retrofit DPF kits for the remainder of PHL switch locomotives.

Benefits to AQMD

The proposed project is included in the March 2007 update of the Technology Advancement Plan under the project entitled, “Develop and Demonstrate Advanced After-Treatment Technologies.” 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.

For this project, the use of a DPF system on a PHL switch locomotive is expected to reduce PM emissions by 90 percent or 0.14 tons per year per locomotive. Should this technology prove successful, it could be retrofitted on 15 PHL switch locomotives and other locomotives that are resident in the South Coast Basin.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions 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 determination 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 project is cosponsored by other entities where AQMD’s contribution will be equally leveraged. Project support will be provided by Miratech Corporation and Pacific Harbor Line. Miratech is an emission control supplier for stationary engines and is affiliated with Hug Engineering, a large European manufacturer of emission controls. Pacific Harbor Line is the sole provider of switch locomotive service for the Ports of Los Angeles and Long Beach. In addition, the U.S. EPA and Caltrans have provided support for this project as cited below.

Resource Impacts

The overall cost for this project is $466,070 with an AQMD cost-share of $107,125 from the Rule 1309.1 Priority Reserve Fund. Cost sharing for this project is as follows:

Sufficient funds are available from the Rule 1309.1 Priority Reserve Fund to cover AQMD’s contribution. The Caltrans funds are part of the U.S. Department of Transportation Federal Highway Administration (FHWA) budget. The funds will be made available to the AQMD through Caltrans for the Diesel Emission Reduction Program for the South Coast Air Quality Management District (DERP) to carry out high priority projects that will further reduce diesel emissions in the South Coast air district. These funds in the amount of $380,000 will be recognized in the General Fund and are designated as follows: $190,000 toward an Engine, Fuel, and Emissions Engineering, Inc. project to develop and demonstrate a selective catalytic reduction (SCR) system on a Metrolink passenger locomotive; $90,000 toward a Miratech project to develop and demonstrate a combination DPF and SCR unit on a Metrolink passenger locomotive head-end power generator set; and $100,000 toward Miratech project to develop and demonstrate a diesel particular filter (DPF) on a Pacific Harbor Line switch locomotive.