BOARD MEETING DATE: May 1, 2009
AGENDA NO. 7

PROPOSAL:

Execute Contracts for Hydrogen Infrastructure and Issue RFP for AQMD Hydrogen Station Upgrade

SYNOPSIS:

The AQMD currently operates a hydrogen fueling station to accommodate the demonstration and deployment of fuel cell vehicles. Further maintenance of the station is required while upgrade plans are in process. This action is to execute a contract for the maintenance of the AQMD station in an amount not to exceed $88,000. In addition, staff requests to issue an RFP to upgrade the AQMD station for larger capacity and higher pressure consistent with the next generation vehicles. Finally, this action is to execute contracts to cosponsor a hydrogen home fueling appliance study in an amount not to exceed $63,400, and a renewable hydrogen refueling station at Orange County Sanitation District in an amount not to exceed $750,000 from the Clean Fuels Fund.

COMMITTEE:

Technology, April 17, 2009, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute the following contracts from the Clean Fuels Fund:
   1. Hydrogenics Corporation for maintenance and data management services for the hydrogen fueling station at the AQMD headquarters in an amount not to exceed $88,000;
   2. NextEnergy Center to cosponsor a feasibility, design and development study for a 70 MPa hydrogen home fueling appliance project in an amount not to exceed $63,400; and
   3. Air Products and Chemicals, Inc., to cosponsor the development and demonstration of renewable hydrogen energy and fueling station in an amount not to exceed $750,000.
2. Issue RFP #2009-20 to solicit bids from qualified vendors for enhancements to the AQMD hydrogen fueling station in an amount to be determined as part of the competitive bidding process.
    

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD Hydrogen Fueling Station

The AQMD has long recognized the potential of hydrogen fuel cell vehicles to reduce criteria pollutants, toxics and greenhouse gas emissions. An initial phase of hydrogen fueling demonstration stations throughout the South Coast Air Basin was started in 2002-03, including the installation of a hydrogen fueling station at the AQMD headquarters in Diamond Bar. Since opening the station, the AQMD has contracted with Stuart Energy (now Hydrogenics Corporation) for maintenance and data management. This contract will expire on September 15, 2009, and until the plans for an upgraded station are underway, the existing station should be maintained to ensure fueling for the AQMD hydrogen fleet as well as other fuel cell vehicles within the region.

In addition, current hydrogen stations provide 5,000 PSI (35 MPa) fueling, but most of the automakers have gone to increased hydrogen pressure fueling (10,000 PSI or 70 MPa) to increase the range of their next generation vehicles. In order to update the AQMD station, greater capacity and higher pressure fueling is required.
 

Expansion of Hydrogen Infrastructure

In 2008, CARB solicited proposals for hydrogen infrastructure with particular emphasis on renewable sources in southern California. One of the selected projects for award was a new production facility located at the Orange County Sanitation District (OCSD) in Fountain Valley. This station provides electricity, through a stationary fuel cell operating from digester gas, as well as high pressure hydrogen for vehicle fueling. In order to increase project viability, the technology team, Air Products and Chemicals, Inc. (Air Products), FuelCell Energy, UCI, CARB and DOE have requested AQMD participation in the project.

The development and commercialization of the natural gas home refueling appliance has been considered a successful milestone in advancing commercial natural gas vehicle acceptance. As a parallel effort, the major fuel cell automakers and the DOE have undertaken a project to design and develop a hydrogen home refueling device. Phase 1 of this project is to conduct a feasibility study to determine the required parameters and characteristics of such a device, including market cost, durability and design features. If Phase 1 is successful, Phase 2 will proceed with the actual design and development of the device.
 

Proposals

AQMD Hydrogen Fueling Station

In order to continue maintenance and data management of the existing AQMD hydrogen station, a new contract is required with Hydrogenics Corporation. This contract extends beyond the original scope of the project and will ensure the station is maintained while plans are made for the station upgrade. Maintenance and management services for the proposed contract with Hydrogenics Corporation will include the following:

• Train staff in the proper use of the fueling dispenser, card-lock system and vehicle fueling procedures;
• Repair unsafe or inoperable equipment or parts of the fueling system as needed;
• Detailed vehicle fueling reports (paper and electronic); and
• Total station monthly summary reports.

Staff proposes to execute a contract with Hydrogenics Corporation to provide maintenance, management and un-interrupted service for the AQMD hydrogen fueling station for a period of up to two years at a cost not to exceed $88,000 from the Clean Fuels Fund.

Since the installation of the AQMD hydrogen station, there have been many advances in vehicle technologies, an increase in the number of vehicles operating in the South Coast Air Basin, and the expressed need by the automobile manufacturers for higher fueling pressure (70 MPa). Staff proposes to release a Request for Proposal to solicit bids from qualified vendors to increase the total throughput capacity of the hydrogen station and provide both 35 MPa and 70 MPa fueling pressures. The exact cost, scope and characteristics of the system will be determined as part of the competitive bidding process.
 

Expansion of Hydrogen Infrastructure

Air Products has been selected by CARB under solicitation RFP #06-618 to install a new 35/70 MPa hydrogen fueling station at the OCSD Fountain Valley facility. A molten carbonate fuel cell from FuelCell Energy will take the digester gas produced by the waste water facility to produce both electricity and hydrogen for vehicle fueling. The molten carbonate fuel cell and purification system will be installed at the water treatment facility under a DOE Cooperative Agreement. The hydrogen fueling station will be operated by the National Fuel Cell Research Center (NFCRC), University of California, Irvine (UCI). The station will be co-located with an existing, publicly accessible compressed natural gas fueling station and will be designed to dispense 100 kg/day of hydrogen. The station will be publicly accessible to qualified hydrogen vehicles with a target cost of up to two-and-a-half times that of premium gasoline. The AQMD will have access to all data generated from the project. Staff recommends approval of a contract with Air Products to cost-share the installation and demonstration of the renewable hydrogen energy and fueling station at a cost not to exceed $750,000 from the Clean Fuels Fund.

Building large centralized stations, such as the OCSD station, is necessary to ensure adequate initial fueling for vehicle deployments. Another strategy to accelerate the acceptance of hydrogen vehicles is to provide home refueling, similar to fueling for electric and natural gas vehicles. Availability of safe and cost effective home fueling in the form of compressed hydrogen gas can be an important step in successful commercialization of non-fleet hydrogen-fueled light-duty vehicles. A preliminary study has been initiated by GM, Ford, Daimler and Chrysler with project management services provided by NextEnergy Center, and survey, engineering and design services provided by the Gas Technology Institute. The first phase of this project is to conduct a feasibility study with basic design scenarios to determine the cost, detailed design study, and lifetime operation characteristics of a 70MPa residential fueling appliance. Based on the successful completion of this phase, the second phase will be the actual development and evaluation of an in-home refueling system with an expected cost of under $10,000 per unit, and an intended life equal to or longer than that of the vehicle. Staff recommends approval of a contract with NextEnergy Center to cost-share a feasibility, design and development study for a 70 MPa residential fueling appliance in an amount not to exceed $63,400 from the Clean Fuels Fund.
 

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 to Hydrogenics is made under the provisions B.2.c.(2): the project involves the use of proprietary technology; and B.2.c.(3): the contractor has ownership of key assets required for project performance (replacement parts and system components). It is in the best interest of the AQMD to contract with Hydrogenics for maintenance and management services for the AQMD hydrogen fueling station. Hydrogenics, based in Canada with service representatives located in southern California, is well qualified to service and maintain this equipment and they are the only source with direct access to the necessary parts and first-hand experience with the operation and repair of that equipment.

The requests for sole source awards to Air Products and NextEnergy Center are 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. For the Air Products award, project funding will be shared by AQMD, CARB, DOE, FuelCell Energy and Air Products to perform the tasks of design, construction, operation and outreach required for completing the Hydrogen Energy Station and Hydrogen Refueling Station. For the NextEnergy Center award, project funding will be shared by DOE and the State of Michigan. In-kind funding will be supplied by nine vehicle manufacturers who have agreed to provide technical and market guidance and potentially vehicles to fuel using this appliance on a voluntary basis. These manufacturers include Chrysler, Daimler, AG Ford Motor Company, General Motors, Honda, Hyundai, Nissan, Toyota and Volkswagen. The U.S. Army TARDEC-NAC has agreed to provide military application guidance and possibly provide installations to demonstrate the technology as well as vehicles to fuel on a voluntary basis. The cost-share for these projects are shown in the following section.
 

Bid Evaluation

Proposals will be reviewed and evaluated by a diverse, technically qualified panel in accordance with criteria contained in the attached RFP.
 

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids will be published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may be notified utilizing AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov/ where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html). Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.
 

Benefits to AQMD

AQMD’s Clean Fuels Program has been active in funding the development and demonstration of low emission, hydrogen fuel technologies within its Technology Advancement Office. Hydrogen refueling stations are necessary to facilitate the introduction of fuel cell vehicles, which are being deployed within the next two years as part of the Zero Emission Vehicle (ZEV) regulation. The development of an extensive hydrogen fueling network in southern California will accelerate the deployment of these cleaner vehicles. These proposed projects are also included in the Technology Advancement Office 2009 Plan Update under “Develop and Demonstrate Distributed Hydrogen Production and Fueling Stations.”
 

Resource Impacts

The total cost of the proposed contract with Hydrogenics, for maintenance and data management services for the hydrogen fueling station at AQMD headquarters will not exceed $88,000 from the Clean Fuels Fund.

The total cost for the renewable hydrogen energy station is over $8M with AQMD cost not to exceed $750,000 from the Clean Fuels Fund. Air Products will lead the team to develop, install and demonstrate the hydrogen energy and fueling station at OCSD. The following is a list of the funding partners and their funding support.

AQMD’s cost-share of the proposed contract with NextEnergy Center to cosponsor the development of a 70 MPa hydrogen home fueling appliance will not exceed $63,400 from the Clean Fuels Fund. The following table is a list of the funding partners and their cost-share for the project. The AQMD contribution to the Phase 1 feasibility study is $23,400.  If Phase 1 is successful, then Phase 2 design and development will proceed. AQMD contribution to Phase 2 is $40,000 for a total of $63,400.

In-kind funding, which is not reflected in the table, will be supplied by nine vehicle manufacturers who have agreed to provide technical and market guidance and potentially vehicles to fuel using this appliance on a voluntary basis.

The total cost for enhancements to the AQMD hydrogen fueling station under RFP #2009-20 has not been determined at this time. This RFP seeks to solicit bids from qualified parties to provide these services. The exact cost, scope and manner of the services will be determined as part of the competitive bidding process and will be subject to subsequent budget approval by the Board, if applicable.

The Clean Fuels Fund was 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, established 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. The total cost for all the proposed projects is $901,400, which will be funded from the Clean Fuels Fund. Sufficient funds are available from the fund.
 

Attachment (DOC, 1.1m)

RFP #P2009-20 – AQMD Hydrogen Fueling Station