Notice having been duly given, the regular meeting of the South Coast Air Quality Management District Board was held at District Headquarters, 21865 E. Copley Drive, Diamond Bar, California. Members present:
Mayor Michael D. Antonovich (arrived at 10:00 a.m.)
County of Los Angeles
Councilmember Marvin Braude
Cities of Los Angeles County - Western Region
Cody G. Cluff
Governor’s Appointee
Councilmember Norma J. Glover
Cities of Orange County
Ms. Mee H. Lee
Senate Rules Committee Appointee
Councilmember Leonard Paulitz
Cities of San Bernardino County
Councilmember Nell Soto
Cities of Los Angeles County - Eastern Region
Members Absent:
Mayor Ronald O. Loveridge
Cities of Riverside County
Supervisor James W. Silva
County of Orange
Supervisor S. Roy Wilson, Ed.D.
County of Riverside
The meeting was called to order at 9:40 a.m. by Chairman Mikels.
• Opening Comments
Mr. Paulitz. Commented that in attending the National League of Cities Congressional Conference held recently in Washington, D.C., he was amazed by the League’s opposition to EPA’s proposed new standards for ozone and particulates. Since it appears likely that the California League of Cities might also take that position, he has requested from staff a position paper to take with him to the June meeting of the Environmental Committee of the California League of Cities and attempt to get the League to express their concerns, rather than just opposition.
Mr. Braude. Expressed satisfaction with the performance of his EV, which has more than ample range and power to suit virtually all his transportation needs.
James M. Lents, Ph.D., Executive Officer. Presented a brief videotape on the history of EVs titled "A Century of Electric Vehicles" and a trailer for a commercial on the EV1 vehicle manufactured by General Motors.
CONSENT CALENDAR
4(A). Set Public Hearing April 11, 1997 to Amend Rule 1610 - Old-Vehicle Scrapping
18(A). Modify Contingency Purchase/Sales Agreement for Real Property Located at 9150 Flair Drive, El Monte, CA
Agenda Items Nos. 5 and 14 were held for discussion.
Ms. Soto noted that while 17 business representatives attended the bidders conference for this item, only one proposal was submitted in response to the RFP. She asked that staff examine whether there is something staff can do, or not do, so as not to discourage or preclude business representatives from submitting proposals.
(Mr. Antonovich arrived at 10:00 a.m.)
Ms. Soto questioned whether it would be more economical to hire a Technical Advisor rather than contracting for these services. Larry Rhinehart, Local Government Director, responded that as the technical support service evolved two to three years ago, AQMD was in the midst of a major budget crisis and downsizing of staff, and it was felt it would be inappropriate to increase staff. Mr. Paulitz added that the AQMD does provide support services to the MSRC, for which MSRC pays. With respect to the technical aspect, however, the MSRC felt there should be a third-party type of relationship, and decided to contract for this service.
Ms. Soto indicated that she is pleased the RFP is going out, and asked that staff ensure that there is extensive outreach to women-, minority-, and disabled veteran-owned businesses.
Written Comments (Regarding Item #30) Submitted by:
California Restaurant Association
SB 211 (Kelley) - Neighborhood Electric Vehicles SUPPORT
SB 270 (Peace) - Foreign Vehicles: State Standards SUPPORT
AB 183 (Richter) - Smog Check Ombudsperson OPPOSE UNLESS AMENDED
AB 208 (Migden) - Smog Check Repairs, Tax Credits SUPPORT
SB 42 (Kopp) - Smog Check, Older Cars NEUTRAL
SB 61 (Haynes) - Smog Check, CARB Standards OPPOSE
THE MOTION WAS SECONDED BY MR. BRAUDE AND PASSED BY A UNANIMOUS VOTE OF THE BOARD MEMBERS PRESENT (Absent: Burke, Loveridge, Silva and Wilson).
Chung Liu, Assistant DEO of Technology Advancement, gave a brief report.
PUBLIC HEARINGS
Pang Mueller, Senior Manager/Stationary Source Compliance, gave the staff report. The public hearing was opened, and the Board heard testimony from the following individuals:
• Speaking in support of PR 2506:
CYNTHIA VERDUGO-PERALTA, Ethnic Community Advisory Group
ROBERT WYMAN, Attorney, on behalf of Regulatory Flexibility Group
LEE WALLACE, Pacific Enterprises/Southern California Gas
BILL QUINN, California Council for Environmental and Economic Balance
MARTIN LEDWITZ, Southern California Edison
JOHN OWYANG, Market-Based Solutions
Ms. Verdugo-Peralta suggested that electricity conservation should also be a component of the ASC program. Messrs. Wyman, Quinn and Owyang expressed concern that the 10 percent discount in PR 2506 [statement in Subparagraph (k)(1) that each 10 pounds of ASCs converted shall generate 9 pounds of RTCs] was unnecessary and considered by them as a tax or penalty that would lessen the motivation for companies to invest in activities in order to generate ASCs. Mr. Wallace emphasized that for consumers, the bottom line is price, not the amount of emissions. The advantage of a rule such as PR 2506 is that it will incentivize the manufacturers to come forward with equipment that has lower emissions. With regard to the 10 percent discount, he suggested that the Board adopt PR 2506, and have further debate in the future on the appropriateness of a discount.
• Speaking in opposition to PR 2506:
GAIL RUDERMAN FEUER, Natural Resources Defense Council (NRDC)
TIM CARMICHAEL, Coalition for Clean Air
1) Expressed the following concerns:
• The four definitions for "baseline emission rate" specified in Subparagraph (c)(4) of PR 2506 do not offer much assurance that the ASC program will not result in an overall net increase in emissions, because: (i) PR 2506 involves a largely unregulated group of sources, therefore definition (A), "the emission rate allowed by the most stringent regulatory requirement applicable to the source", does not pertain to most of the sources in the area source category; (ii) most of the measures in the SIP for the area source category will not be implemented until after 2006, so definition (B), "the emission rate in an applicable AQMP Control Measure with implementation dates contemporaneous with the emission reduction", does not offer much assurance for the short term; (iii) with respect to definition (C), the NRDC found out recently that the determination of what is the "median" is in part based on AP 42, which according to EPA is not an appropriate method of determining median emissions because the emissions can vary by a factor of ten; and (iv) definition (D), "the documented actual historical emission rate, as approved by the Executive Officer and averaged over the two years preceding the date of initial Pre-ASC Plan or ASC Plan submittal" is not clear.
• In their recent letter to Board members, the Coalition suggested that the discount factor should be 20 percent. Upon further investigation and analysis of PR 2506, the Coalition believes that even 20 percent is not enough to protect against the potential adverse impacts of the proposed rule.
Ms. Mueller responded that in addition to the four definitions for baseline emission rate in Subparagraph (c)(4) of PR 2506, Subparagraph (d)(2)(c) specifies that an emission reduction from an area source must be real, quantifiable, permanent, enforceable and surplus--meaning it has not been assumed for in the AQMP--in order to be eligible to generate ASCs. Therefore, there is a significant amount of individual case analysis conducted that would include all of these components.
• No position expressed:
JOHN BILLHEIMER, Small Business Coalition
Commented that if these unregulated sources need to be brought under control, perhaps that should happen through the normal procedures that the AQMD has followed for other sources that are regulated.
There being no further testimony, the public hearing was closed.
Written Comments Submitted by:
David P. Howekamp, U.S. EPA
Mr. Braude expressed his concern with any rule that would grant credits for the purpose of advancing technical innovation, which would happen anyway. While he is an ardent supporter of utilizing market forces and diminishing command-and-control as much as possible, he felt he needed further information in order to fully understand the possible impacts of PR 2506. He suggested continuing the public hearing to the Board’s April 11, 1997 meeting, and asked that industry representatives provide additional documentation and that staff brief the Board members on the proposed rule and its significance in accelerating introduction of lower-emitting technologies.
Ms. Glover asked staff to comment on the concerns raised regarding the discount. Dr. Lents responded that staff believes the 10 percent discount provides a fair balance that will not overly hurt the market, and at the same time help address some of the environmental concerns raised.
Mr. Paulitz commented that his concern regarding the discount is whether or not it is large enough. He was concerned when he learned that these credits could go back to 1991, allowing a RECLAIM facility to defer reducing its emissions by buying credits for emission reductions that occurred in the past. He questioned whether there would actually be a net reduction of emissions.
In response to a question by Chairman Mikels as to whether ASC programs are mandated, General Counsel Peter Greenwald stated that state law requires that the Board grant credit to non-permitted sources, which credit can be used in a marketable trading program (i.e., RECLAIM) or for new source permitting. The law does not specify when such a rule has to be adopted.
Chairman Mikels commented that PR 2506 attempts to provide incentives for numerous small sources that are not regulated to help advance technology; which he believes is a real benefit. While there is some uncertainty with respect to the 10 percent discount, he believes the more broad-based issues will be addressed when the Board considers the intercredit trading rule, which will actually serve as the canopy for AQMD’s various trading rules.
Mr. Cluff asked if staff had performed any analysis that would indicate if credits generated under the proposed ASC program by companies located outside the basin would have an impact on smaller businesses in the basin as far as disincentivizing their movement towards advanced technologies, by reducing the sale price of their credits. He also asked about testing methodologies and how staff would establish the historical emissions record for any one of these area sources.
Ms. Mueller responded that staff did not perform a broad analysis for all the categories proposed under the ASC program. However, when staff was attempting to develop a command-and-control rule to reduce emissions from water heaters, an argument was made that there are manufacturers located outside the basin that could bring this product in and drive away those businesses located in the basin. Under PR 2506, however, companies in the basin will have an opportunity to recoup some of the capital investment that they may have to make for the ASCs. Regarding methodology on the historical emissions, staff will make that determination on a case-by-case basis.
Expressing her support for deferring this item one month, Ms. Soto asked that staff attempt to reach a compromise, if possible, with the environmental community to address the concerns expressed by NRDC and the Coalition for Clean Air.
Chairman Mikels indicated that he wanted to hear from staff at the April 11 Board meeting on an entire range of unpermitted sources--equipment, consumer products, off-road vehicles--so that the Board could get a clearer understanding of the possible impacts of PR 2506 and the significance of those impacts.
AYES: Braude, Cluff, Paulitz, and Soto.
NOES: Antonovich, Glover, Lee and Mikels.
ABSENT: Burke, Loveridge, Silva and Wilson.
Chairman Mikels added that the public hearing on PR 2506 will be opened for further testimony at the April 11, 1997 Board meeting.
Chairman Mikels announced that there would be no action to report as a result of the closed session. The Board adjourned to closed session at 11:53 a.m., pursuant to Government Code Section 54956(a), to confer with its counsel regarding pending litigation which has been initiated formally and to which the District is a party. The titles of the litigation are:
Respectfully Submitted,
SAUNDRA McDANIEL
Senior Deputy Clerk
Date Minutes Approved: ________________________
____________________________________________
Jon D. Mikels, Chairman
ACRONYMS
AB = Assembly Bill
AQMD = (South Coast) Air Quality Management District
AQMP = Air Quality Management Plan
ARB = Air Resources Board
ASC = Area Source Credit
CEMS = Continuous Emissions Monitoring System
DEO = Deputy Executive Officer
EPA = Environmental Protection Agency
EV = Electric Vehicle
FY = Fiscal Year
MSRC = Mobile Source (Air Pollution Reduction) Review Committee
NOx = Oxides of Nitrogen
PM10 = Particulate Matter < 10 microns
PR = Proposed Rule
RECLAIM = REgional CLean Air Incentives Market
RFP = Request for Proposals
RTC = RECLAIM Trading Credit
SB = Senate Bill
SBPEA = San Bernardino Public Employees Association
SIP = State Implementation Plan
SOx = Oxides of Sulfur
VOC = Volatile Organic Compound