South Coast Air Quality Management District
South Coast Air Quality Management DistrictSUMMARY MINUTES OF THE
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
FRIDAY, JANUARY 19, 2001
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:
William A. Burke, Ed.D., Chairman
Speaker of the Assembly AppointeeCouncilmember Norma J. Glover, Vice Chairman
Cities of Orange CountySupervisor Michael D. Antonovich (arrived at 9:20 a.m.)
County of Los AngelesCouncilmember Hal Bernson
Cities of Los Angeles County - Western RegionMs. Jane W. Carney
Senate Rules Committee AppointeeCouncilmember Beatrice J. S. LaPisto-Kirtley
Cities of Los Angeles County - Eastern RegionMayor Ronald O. Loveridge (arrived at 10:12 a.m.)
Cities of Riverside CountySupervisor Jon D. Mikels
County of San BernardinoMayor Pro Tem Leonard Paulitz
Cities of San Bernardino CountyCynthia Verdugo-Peralta
Governor’s AppointeeSupervisor S. Roy Wilson, Ed.D.
County of Riverside
Members Absent:
Supervisor Cynthia P. Coad, Ed.D.
County of Orange
Chairman Burke called the meeting to order at 9:10 a.m.
Chairman Burke. 1) Commented that he had requested Executive Officer Dr. Barry Wallerstein to develop for the Board’s consideration a list of proposed projects that will be funded by revenue received from the settlement of two cases. The proposed projects will include permit streamlining and enhanced outreach to minority communities, and Dr. Wallerstein will also seek input from the Board’s Inland Empire Committee, as well as individual Board members.
Mr. Paulitz: 1) Provided Board members with brochures on the Fuel Cell Partnership, which held a meeting in November 2000 to dedicate its facilities in Sacramento. 2) Requested to place an item on the agenda for the Board to authorize the Executive Officer to convey to the ARB at its upcoming meeting the Board’s position on the EV mandate. He subsequently withdrew his request, upon assurance by Dr. Wallerstein that staff planned to testify at the ARB hearing, as it regularly does, to represent the Board’s policies as reflected in the AQMP and other actions that the Board has taken over the course of the years in terms of various policy positions.
Ms. Verdugo-Peralta. 1) Noted that at the California Fuel Cell Partnership Steering Committee meeting held recently in Detroit, she gave a presentation on AQMD’s commitment to existing and future fuel cell projects. She also mentioned several events in the South Coast basin, such as the Los Angeles Marathon and the California Speedway, where fuel cell vehicles can possibly be exhibited. 2) Announced that Jack Broadbent, DEO of Planning, Rule Development, and Area Sources, was leaving the AQMD to serve as manager of air quality issues for the EPA. She expressed appreciation to Mr. Broadbent for the technical support he had provided to her and the other members of the Board, and that she looked forward to working with him in the future on air quality matters.
(Mr. Antonovich arrived at 9:20 a.m.)
- Report to the Board Concerning Energy Crisis
Mohsen Nazemi, Asst. DEO/Engineering & Compliance, gave a brief slide presentation on the present energy crisis throughout the state of California. The AQMD’s objective is to meet California’s power demand and protect the air quality in the South Coast area. The major concerns are: (i) increased use of in-basin uncontrolled or dirty central electrical generation units; (ii) the impact of the power crisis on RECLAIM and RTC prices; (iii) increased use of diesel-fired emergency back-up generation units; and (iv) increased emissions during electrical emergencies due to inoperability of air pollution control equipment. To address these concerns, staff will take the following steps:
- Accelerate replacement and control of existing dirty units
- Support/promote environmental dispatch (use cleanest units first and dirtiest units last and only to avoid emergencies)
- Address power plant opertions impacts on RECLAIM and RTC prices
- Support/promote use of clean new generation technologies for new power plants and distributed generation (AB 970 and SB 1298)
- Minimize use of existing diesel-fired emergency back-up generation units
Chairman Burke commented that the LADWP was holding board meetings on January 18 and 19, 2001 regarding the energy crisis, and he directed staff to obtain any information from LADWP derived from these meetings which could prove helpful in AQMD’s efforts to address the concerns noted above, and to incorporate that information into the planning process for addressing RECLAIM and RTC prices (Agenda Item No. 23) for the subsequent report back to the Board.
CONSENT CALENDAR
Agenda Items Nos. 3, 6, 8, and 9 were held for discussion.
MS. GLOVER MOVED APPROVAL OF AGENDA ITEMS 1, 2, 5, 7, 10 THROUGH 19, AND ITEM NO. 4, WHICH INCLUDED ADOPTION OF RESOLUTION NO. 01-2, REQUESTING FUNDING FROM THE CALIFORNIA ENERGY COMMISSION TO IMPLEMENT THE HEAVY-DUTY FUEL INFRASTRUCTURE PROGRAM, AS RECOMMENDED BY STAFF. THE MOTION WAS SECONDED BY MR. BERNSON, AND PASSED, BY THE FOLLOWING VOTE:
AYES: Antonovich, Bernson, Burke, Carney (except Item #11), Glover, LaPisto-Kirtley, Mikels, Paulitz, Verdugo-Peralta, and Wilson.
NOES: None.
ABSTAIN: Carney (on Item #11 only).
ABSENT: Coad and Loveridge.
3. Execute Contract to Co-Sponsor Development of Dual Inductive/Conductive
Charger Bracket to Allow Reduction of EV Charging Infrastructure CostsDr. Wallerstein recommended that this item be continued for 30 days so that staff could brief Ms. LaPisto-Kirtley further on the item, as requested.
BY UNANIMOUS CONSENT OF THE BOARD (Absent: Coad and Loveridge), AGENDA ITEM NO. 3 WAS CONTINUED TO THE FEBRUARY 16, 2001 BOARD MEETING.
6. Submit Applications to ARB and California Energy Commission to Receive Funds
for Implementation of Lower-Emission School Bus Retrofit and Replacement
ProgramGretchen Knudsen of International Truck & Engine Corporation and Tim Carmichael of Coalition for Clean Air addressed the Board.
Ms. Knudsen expressed opposition to the item, and requested clarification as to how AQMD planned to administer the program, given the inconsistencies between CARB’s allocation of funding for purchases of advanced low-emission diesel school buses, and AQMD’s Proposed Rule 1195, which would effectively ban such purchases.
Dr. Wallerstein responded that PR 1195 - Clean On-Road School Buses, will be brought to the Board at its February 16, 2001 meeting to set a hearing for March 16, 2001. This item is for the AQMD to request its fair share of the available state funds for the residents of Southern California. If the Board later determines any inconsistencies, that would be addressed at the time the Board considers adoption of the rule.
Mr. Carmichael suggested that when AQMD applies for the funding, that it notes in the application that it would like the CEC to consider allowing AQMD to use the monies that are currently restricted for clean diesel for alternative fuels.
ON MOTION OF DR. WILSON, SECONDED BY MS. GLOVER, AND CARRIED UNANIMOUSLY (Absent: Coad and Loveridge), THE BOARD APPROVED AGENDA ITEM NO. 6, AS RECOMMENDED BY STAFF.
8. Execute Contracts for Analyses of Exhaust from Diesel- and CNG-Fueled Vehicles
The following individuals addressed the Board to speak on this item:
TIM CARMICHAEL, Coalition for Clean Air
Raised two concerns: 1) The Ames testing that the University of California, Davis will conduct is a qualitative, not a quantitative, test and will not provide definitive answers to questions about toxicity relative to the exhaust streams. 2) Under the proposed program, diesel engines will be tested with particulate traps installed; whereas, the natural gas engines will not have particulate traps. He suggested that if one type of engine is tested with the particulate trap, the other engine should have the particulate trap as well.
Mr. Mikels expressed his belief that there should be a straightforward comparison of comparably-equipped engines.
Dr. Wallerstein recommended that the Board approve the item so that staff can get the test facilities and vehicles in place, and that staff will return to the Board in 30 days with a proposed augmentation to the program to include a full matrix of engines with particulate traps.
GAIL RUDERMAN FEUER, Natural Resources Defense Council
Expressed concern, also, with regard to the Ames testing not being useful in differentiating between complex mixtures as to which exhaust has the greater toxicity. She urged the Board, instead of having the Ames tests conducted, to speciate the natural gas, examine the toxicity of each of the constituents, and then compare it to diesel exhaust.
Dr. Elaine Chang, Asst. DEO/Planning, Rule Development, and Area Sources, responded that, as part of its proposal, staff will conduct a chemical speciated study. Therefore, the exhaust samples will be analyzed for each potential toxic component.
DAVE SMITH, BP
Expressed belief that the intent of the testing was to try to compare as similar vehicles as possible that are currently on the road. Noted that he was not aware of any CNG vehicles in operation at this time that have particulate traps and it is questionable as to whether or not the traps would work on the vehicles because of the exhaust temperatures from CNG buses.
BILL BUNN, International
Emphasized the importance of the data to be derived from the Ames tests.
ON MOTION OF MS. GLOVER, SECONDED BY MR. PAULITZ, AND CARRIED UNANIMOUSLY (Absent: Coad, LaPisto-Kirtley, and Loveridge), THE BOARD APPROVED AGENDA ITEM NO. 8, AS RECOMMENDED BY STAFF.
9. Execute Contract for Janitorial Services at Diamond Bar Headquarters
With respect to the two highest-rated firms, Dr. Wallerstein pointed out that using the AQMD’s point process, a new contractor would be selected, Bell Building Maintenance, because its cost is approximately $9,300 a year less than the current contractor, Diamond Contract Services. However, the current contractor is doing an excellent job, is familiar with the building, and AQMD has had good building security with this firm. Therefore, in terms of the best return for the agency, staff believed the Board might want to consider the second place firm, which is the current contractor.
Dr. Wilson inquired as to the hourly wage that the two firms are paying the employees. Dr. Wallerstein responded that Bell would pay a slightly lower wage to the janitors than Diamond. Therefore, if the current staff were to be kept on by Bell, as is usually the case, it is possible that they would receive a lower wage, when they have been doing a very good job.
Mr. Antonovich commented that when Bell applied for a contract with the County of Los Angeles, it indicated it had 535 employees. For this item, however, Bell received 10 points, as a small contractor, for having less than 100 employees.
Eudora Tharp, Director of Human Resources, responded that both Los Angeles County and Bell explained that the larger number of employees included subcontractors that were available to use on the contract, but were not employees of Bell Building Maintenance.
(Mr. Loveridge arrived at 10:12 a.m.)
ON MOTION OF MR. ANTONOVICH, SECONDED BY MR. MIKELS, AND CARRIED UNANIMOUSLY (Absent: Coad), THE BOARD REFERRED AGENDA ITEM NO. 8 TO THE ADMINISTRATIVE COMMITTEE FOR FURTHER REVIEW, INCLUDING THE ISSUE OF SMALL BUSINESS CRITERIA AND SUBCONTRACTORS.
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Chairman Burke announced that Dr. Coad would no longer be serving on the Board. Because of her election as Chairman of the Board of Supervisors of Orange County, Dr. Coad elected to relinquish her seat. Supervisor James Silva has been appointed to fill the unexpired term of Supervisor Coad.
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BOARD CALENDAR
Agenda Item No. 24 was taken out of order.
Dr. Wallerstein commented that staff recommended expanding the student intern program to year-round since the program proved successful during the summer months. Dr. Wallerstein expressed appreciation to Mr. Antonovich for his suggestion to expand the program.
ON A MOTION DULY MADE AND SECONDED, AND CARRIED UNANIMOUSLY (Absent: Coad), THE BOARD APPROVED AGENDA ITEM NO. 24 AS RECOMMENDED BY STAFF.
ON MOTION OF MS. LaPISTO-KIRTLEY, DULY SECONDED AND CARRIED UNANIMOUSLY (Absent: Coad), THE BOARD RECEIVED AND FILED AGENDA ITEMS NO. 21 AND NO. 22 AND ADOPTED THE FOLLOWING POSITION ON LEGISLATION, AS RECOMMENDED:
State Legislative Concept #7 – Orders for Abatement APPROVE
MR. BERNSON MOVED TO LIMIT EACH MEMBER OF THE PUBLIC WHO ADDRESSED THE BOARD ON THIS ITEM TO ONE MINUTE TO COMMENT, UNLESS THERE WAS A QUESTION BY A BOARD MEMBER. THE MOTION WAS SECONDED BY DR. WILSON, AND PASSED, BY THE FOLLOWING VOTE:
AYES: Antonovich, Bernson, Burke, Carney, Glover,
LaPisto-Kirtley, Loveridge, Mikels, and Wilson.NOES: None.
ABSTAIN: Paulitz.
ABSENT: Coad and Verdugo-Peralta.
The following individuals addressed the Board to speak on the item:
*NADER MANSOUR, Southern California Edison Company
*MIKE SCHEIBLE, Air Resources Board
AMY ZIMPFER, U.S. EPA
RON WILKNISS, Western States Petroleum Association
*ROBERT WYMAN, Attorney on behalf of Regulatory Flexibility Group
SUMA PEESAPATI, Communities for a Better Environment
LEE WALLACE, Sempra Energy/Southern California Gas Company
*CYNTHIA PRAUL, State of California Energy Commission
*BRUCE MOORE, Los Angeles Department of Water & Power
CURTIS COLEMAN, Attorney on behalf of CMTA Southern California Air Quality Alliance
BILL QUINN, California Council for Environmental and Economic Balance
*GAIL RUDERMAN FEUER, Natural Resources Defense Council
*TIM CARMICHAEL, Coalition for Clean Air
STEVEN A. BROILES, Attorney on behalf of City of Pasadena
CHRISTINE GRANDSTAFF, Cantor Fitzgerald Environmental Brokerage Services
JON OWYANG, Market-Based Solutions
DR. ANNE SHOLTZ, Automated Credit Exchange
BRIAN McQUOWN, Reliant Energy
GARY RUBENSTEIN, Sierra Research/El Segundo Power and Long Beach Generation
TIM HEMIG, El Segundo Power LLC
SHARON RUBALCAVA, Attorney on behalf of El Segundo Power LLC
SUSAN LIVINGSTON, BP
*Submitted Written Comments
Industry, state and federal regulatory agencies, and the environmental community expressed support for initiating rulemaking to amend RECLAIM to address current deficiencies, strengthen the regulation, and stabilize RTC prices. Industry expressed the following concerns:
Regarding the staff recommendation that the larger facilities remaining in the RECLAIM universe file a compliance plan to demonstrate compliance with NOx allocations for the years 2001- 2003, believe these plans would limit their flexibility and eliminate their ability to respond to changing market conditions.
Mobile source credits is a part of the existing rule that has never been fully implemented because of the failure to get SIP approval. Given staff’s analysis about the anticipated shortfall of RTCs in the power sector, mobile source credits will be needed.
Staff should explore wider availability of the AQIP for a period of one to three years to assure that there are adequate supplies of affordable RTCs.
Requested an extension of the reconciliation period for this RECLAIM cycle to allow the market to digest the actions that the Board takes and allow stabilization of RTC prices.
One power producer expressed opposition to the proposal to bifurcate power producers from the RECLAIM market. Three principal reasons for the company’s concern: first, believe bifurcation is unfair to facilities who have made substantial investments to comply with the current RECLAIM program; secondly, believe the bifurcation will ultimately reduce incentives for retrofitting NOx controls, rather than encourage them; third, believe the bifurcation could force companies that currently plan to be in compliance 2000, 2001, and 2002 into noncompliance. It is uncertain whether or not EPA and ARB will be willing to approve programs which call for the payment of a fee in lieu of actually complying with the allocation.
LADWP has sufficient NOx allocations to meet their native load; however, the generation which it is prepared to offer to the state at its current prices will cause it to exceed that NOx allocation. LADWP proposed that if electric utilities exceed their annual allocations for the years 2001-2003, no future RTC deductions be imposed, if the $15,000 per ton fee is paid to the AQMD.
Dr. Wallerstein indicated that staff proposes to seek comments during the rulemaking process as to whether that provision should be sustained in RECLAIM relative to the power plants. Staff has identified this as an issue and will work with LADWP on this and other issues.
Regarding industry’s request for an extension of the reconciliation period; staff would not recommend such an extension because it would send the wrong message to facilities, that their noncompliance is acceptable. The Board’s action should be taken as a clear sign to power generators that they should not be purchasing credits within the current reconciliation period that are not already purchased. These facilities should discuss with the chief prosecutor’s staff the possibility of stipulated orders for abatement which would provide them with an alternate means of compliance.
The ARB, EPA, and CEC emphasized the urgency of AQMD taking decisive actions at this time; actions they believe are needed by both energy and air regulatory agencies as expeditiously as possible, because electricity market conditions are expected to be highly volatile this year and possibly the next. They will work in parallel with AQMD, fully participating in the rulemaking process, so that when staff brings the rule amendments before the Board, they could have good assurance that it would receive quick approval at the state and federal level.
Environmental representatives expressed belief that the proposed compliance plans should be strengthened to require companies to install cost effective controls. They expressed concern with the proposed temporary AQIP program because RECLAIM has finally reached a point where companies are being pushed to install cost-effective controls, and allowing mobile source credits in will artificially bring the prices down and companies will delay installation of controls even further. They urged the Board to move forward with Proposed Rule 1612.1 – Mobile Source Credit Generation Pilot Program as the solution and not a temporary AQIP, and to require that power plants install BACT—either SCR or SCONOX.
Opposition to the staff recommendations was expressed by CBE because of their belief that the current high cost of NOx RTCs is not the result of an external crisis, but the failure of industry to implement available, affordable pollution controls for the past seven years. Now is not the time to expand the RECLAIM program to include mobile source credits or to increase the supply; now is the time to mandate pollution control.
The City of Pasadena, the only municipal utility fully participating in the California ISO, expressed opposition to the staff recommendation creating a separate cap and control program for power generators, because of its belief that this separation would discourage the development of additional power generation within the basin. Further, the $7.50 for purchasing the utility RTCs will influence the amount at which power can be bid into the power exchange because it will tend to keep the prices up.
Written Comments Submitted by:
Bahram Farmanara, Tissurama Industries, Inc.
Jack Kyser, Los Angeles County Economic Development CorporationIndicating that she would prefer to have staff’s recommendation regarding SIP approval of mobile and area source credits continued to the March 16, 2001 Board meeting so that it can be considered by the Board along with Proposed Rule 1612.1,
MS. CARNEY MOVED THAT THE BOARD: 1) CONTINUE THE RECOMMENDATION BY STAFF TO OBTAIN EXPEDITED CARB AND EPA APPROVAL OF MOBILE SOURCE AND AREA SOURCE CREDIT GENERATION RULES TO THE MARCH 16, 2001 BOARD MEETING; AND 2) APPROVE THE FOLLOWING STAFF RECOMMENDATIONS:
1) INITIATE RULEMAKING ACTIVITIES TO:
(a) temporarily bifurcate large power plants from RECLAIM including a mitigation fee for emissions in excess of allocations;
(b) initiate a temporary, and limited, pilot RECLAIM Air Quality Investment Program (AQIP);
(c) require RECLAIM facilities reporting 10 tons or more in 1999 to file a compliance plan to demonstrate compliance with NOx RTCs held by those facilities for Compliance Year 2001, 2002, and 2003;
(d) improve registration and timely reporting of RTC trades; and
(e) develop specific missing data protocol for missing and late electronic reports:
2) CONTINUE TO ENTER INTO STIPULATED ORDERS FOR ABATEMENT WITH COMPANIES EXPERIENCING TROUBLE COMPLYING WITH THEIR CURRENT COMPLIANCE YEAR ALLOCATIONS.
THE MOTION WAS SECONDED BY MS. GLOVER.
Ms. Carney added that staff could bring additional recommendations back to the Board, if other ideas emerge in the working group process. She clarified, at Dr. Wallerstein’s request, that staff would not be pursuing every suggestion contained in the white paper.
Ms. LaPisto-Kirtley commented that regardless of what solutions are developed, the emissions benefits of the RECLAIM program should remain.
THE MOTION BY MS. CARNEY, SECONDED BY MS. GLOVER, CARRRIED BY THE FOLLOWING VOTE:
AYES: Antonovich, Bernson, Burke, Carney, Glover,
LaPisto-Kirtley, Loveridge, Mikels, Paulitz, and Wilson.NOES: None.
ABSTAIN: Verdugo-Peralta.
ABSENT: Coad.
PUBLIC HEARINGS
Laki Tisopulos, Planning & Rules Manager, gave the staff report.
The public hearing was opened, and the Board heard testimony from the following individual:
SHARON RUBALCAVA, Attorney on behalf of Steelcase
Commented that the applicability section of the rule is triggered by the use of 20 tons of VOC materials per year, but believe it is the staff’s intent that it is actually limited to emissions that are reported as part of the annual emission fee. Asked for clarification that this does not include use of architectural coatings, VOC cleaning materials, and so forth.
Mr. Tisopulos confirmed that Ms. Rubalcava was correct with regard to the applicability and that architectural coatings that are typically used for building beautification are not part of the inventory.
There being no further testimony, the public hearing was closed.
ON MOTION OF MS. GLOVER, SECONDED BY
DR. WILSON, AND CARRIED UNANIMOUSLY (Absent: Coad), THE BOARD ADOPTED RESOLUTION NO. 01-1, ADOPTING RULE 1132 AND CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT, AS RECOMMENDED BY STAFF.
Mr. Broadbent stated that staff recommended the hearing on PAR 1610 be continued to the April 20, 2001 Board meeting to allow further time for ARB input.
ON MOTION OF MS. LaPISTO-KIRTLEY, SECONDED BY MS. GLOVER, AND CARRIED UNANIMOUSLY (Absent: Coad), THE BOARD CONTINUED THE PUBLIC HEARING ON RULE 1610 TO APRIL 20, 2001.
OTHER BUSINESS
ON MOTION OF MS. LaPISTO-KIRTLEY, SECONDED BY MR. PAULITZ, AND CARRIED UNANIMOUSLY (Absent: Coad), THE BOARD APPROVED AGENDA ITEM NO. 27 AS RECOMMENDED BY STAFF.
PUBLIC COMMENT PERIOD - (Public Comment on Non-Agenda Items, Pursuant to Government Code Section 54954.3)
There was no public comment on non-agenda items.
CLOSED SESSION
The Board did not meet in closed session.
ADJOURNMENT
The meeting was adjourned by Chairman Burke at 12:20 p.m.
The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on January 19, 2001.
Respectfully Submitted,
SAUNDRA McDANIEL
Senior Deputy Clerk
Date Minutes Approved: ________________________
____________________________________________
William A. Burke, Ed.D., Chairman
ACRONYMS
AQIP = Air Quality Investment Program
AQMP = Air Quality Management Plan
ARB = Air Resources Board
CEC = California Energy Commission
CEQA = California Environmental Quality Act
CMTA – California Manufacturers and Technology Association
CNG = Compressed Natural Gas
DEO = Deputy Executive Officer
EPA = Environmental Protection Agency
EV = Electric Vehicle
FY = Fiscal Year
ISO = Independent System Operator
LADWP = Los Angeles Department of Water & Power
NOx = Oxides of Nitrogen
RFP = Request for Proposals
RFQ = Request for Quotations
RTC = RECLAIM Trading Credit
SIP = State Implementation Plan
VOC = Volatile Organic Compound
ZEV = Zero Emission Vehicle