BOARD MEETING DATE: March 6, 2009
AGENDA NO. 6

PROPOSAL:

Execute Contract to Cosponsor LNG Fueling Station at Ports

SYNOPSIS:

In 2008, AQMD provided funding to California Cartage Company to replace 132 heavy-duty Class 8 diesel-fueled trucks with LNG-fueled trucks. These trucks will serve the Ports of Los Angeles and Long Beach and are in need of convenient and accessible fueling. This action is execute a contract with California Cartage Company to install a LNG fueling station at the Ports at an AQMD cost not to exceed $532,500 from the Clean Fuels Fund. The remaining project cost of $532,500 will be funded by the Ports of Los Angeles and Long Beach.

COMMITTEE:

Technology, February 20, 2009, Recommended for Approval

RECOMMENDED ACTIONS:

Authorize the Chairman to execute:

1. A Memorandum of Agreement (MOA) with the Port of Los Angeles and the Port of Long Beach to receive $266,250 from each of the two ports, and recognize the total amount of $532,500 in the Clean Fuels Fund; and
    
2. Upon execution of the MOA with both ports, a contract with California Cartage Company to install a LNG fueling station at the ports at a total cost not to exceed $1,065,000 from the Clean Fuels Fund, of which $532,500 is the contribution from the Ports discussed above, and $532,500 is from the AQMD Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In 2008, AQMD provided funding to California Cartage Company to replace 132 older diesel-fueled trucks with new LNG-fueled trucks. The total funding of $11,880,000 was comprised of $6,600,000 from the Proposition 1B Goods Movement Program, $4,922,000 from federal EPA grant, and $358,000 from the Clean Fuels Fund. As of this date, approximately 120 LNG trucks have been delivered and most of them are in service.

California Cartage Company also operates LNG yard hostlers. To accommodate approximately 150 LNG trucks and yard hostlers, California Cartage Company needs two LNG fueling units at two different locations. The availability of these two fueling stations will be very important to the success of this alternative fuel project. California Cartage Company has contacted Chart Industries, Inc. and Applied LNG Technologies, and these fueling units are available and can be installed in an expeditious manner.
 

Proposal

This project is to acquire and install two LNG fueling units from Chart Industries, Inc. and Applied LNG Technologies. The combined fueling capacity of the two units will be approximately 12,000 gallons and this will provide sufficient fuel for California Cartage Company’s LNG-fueled heavy-duty truck and yard hostler fleet. The cost of a IMC-6,000 unit from Chart Industries, Inc. is approximately $580,000 and the cost of a second IMC-6,000 unit from Applied LNG Technologies is approximately $485,000. The total project cost amounts to approximately $1,065,000 and includes the cost of the two units, site preparation, permits, installation and start up.

Staff recommends the Board authorize executing a MOA with Port of Los Angeles (POLA) and Port of Long Beach (POLB)to receive $266,250 from each of the two ports and place the total amount of $532,500 in the Clean Fuels Fund. Staff also recommends executing a contract with California Cartage Company to install the LNG fueling units at the ports at a total cost not to exceed $1,065,000 from the Clean Fuels Fund. AQMD’s cost-share from the Clean Fuels Fund, excluding contributions from the two Ports, in this project will not exceed $532,500.

Benefits to AQMD

The proposed project is included in the Technology Advancement Office Clean Fuels Program 2008 Plan Update under item “Infrastructure and Deployment.” The contiguous Ports of Los Angeles and Long Beach are the single largest source of emissions in the South Coast Air Basin, and port trucks contribute significantly towards these emissions. The AQMD strongly supports the use of clean fuels, including natural gas as a transportation fuel. Natural gas vehicles are among the cleanest alternative-fueled vehicles at the present, and the successful demonstration of this project will accelerate and increase the penetration of natural gas fueled trucks in port applications.

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.(1): Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interests of the AQMD. Such circumstances may include but are not limited to: Projects involving cost sharing by multiple sponsors.

California Cartage Company has received an award from AQMD to replace 132 older diesel-fueled trucks with new LNG-fueled trucks, and most of these trucks and some LNG-fueled yard hostlers are already in service. California Cartage Company has extensive experience in the operation of alternative fueled trucks and is a pioneer in the use of such trucks in port operations. California Cartage Company is also demonstrating a CNG-fueled heavy-duty truck project at the ports where the trucks and fueling infrastructure were acquired with AQMD, POLA, POLB and SoCalGas funds.
 

Resource Impacts

The total project cost is estimated to be $1,065,000. AQMD’s contribution of $532,500 will be provided from the Clean Fuels Fund and remaining amount of $532,500 will be provided by POLA and POLB.

The following table summarizes the proposed levels of funding from the participants:

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.