BOARD MEETING DATE: December 3, 2010
AGENDA NO. 11

PROPOSAL:

Execute Contract for Expansion of Hydrogen Fueling Infrastructure

SYNOPSIS:

On October 21, 2010, the California Energy Commission released a Notice of Proposed Award recommending funding for eight projects that will develop hydrogen fueling infrastructure within the South Coast Air Basin. Additional funds are needed to offset high initial costs and investment for production and distribution of hydrogen for these projects. The eight stations are strategically located and will play a significant role by providing hydrogen in Southern California in areas with high vehicle densities. This action is to execute a contract with Air Products and Chemicals, Inc., in an amount not to exceed $1,000,000 from the Clean Fuels Fund for expansion of hydrogen fueling infrastructure.

COMMITTEE:

Technology, November 19, 2010, Recommended for Approval

RECOMMENDED ACTIONS:

Authorize the Chairman to execute a contract with Air Products and Chemicals, Inc., in an amount not to exceed $1,000,000 from the Clean Fuels Fund (31).
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On June 2, 2010, the California Energy Commission (CEC) released Solicitation Number PON-09-608 to fund projects that develop infrastructure necessary to dispense hydrogen transportation fuel. The intent of this solicitation was to upgrade public and private infrastructure investments, expand the network of publicly accessible and fleet fueling stations, and develop infrastructure that will be needed to dispense hydrogen based on the population of existing and anticipated fuel cell vehicles (FCVs) and hydrogen internal combustion engine vehicles (HICEVs). The solicitation focused on the original equipment manufacturers’ (OEM) deployment of FCVs and HICEVs in identified clusters and connector stations in California. In addition, it allowed for the strategic establishment of justified hydrogen stations where vehicle populations will be sufficient. It included potential additional funding for stations that exceed the renewable hydrogen content standard set forth by SB 1505, exceed the minimum daily station capacity, and for stations that can achieve an accelerated establishment schedule.

On October 21, 2010, the CEC released a Notice of Proposed Award recommending funding for a number of projects including eight projects that will develop hydrogen fueling infrastructure within the South Coast Air Basin.

The proposed locations for these stations are strategic in that they would fill significant gaps in the availability of hydrogen in Southern California as part of the California Hydrogen Highway Network, including the construction and/or upgrade of an existing station at the AQMD headquarters in Diamond Bar. The stations are in heavily traveled areas close to main corridors and adjacent to key residential areas considered by OEMs to be hydrogen-technology first-adopters. Additional funds are needed to offset high initial costs and investment for production and distribution of hydrogen for these projects.

Proposal

The proposed hydrogen fueling stations will be new, publicly accessible, next generation (35 MPa and 70 MPa) hydrogen fueling stations located throughout Southern California, including the construction and upgrade of an existing station at AQMD headquarters in Diamond Bar. They will utilize improved delivery technologies to reduce the cost of transporting low-priced hydrogen made in centrally located facilities with high availability. The station concepts are simple, modular, expandable to full-sized station capacities, and reduce initial capital costs at the point of use including reduced overall site maintenance costs. The modular design incorporates a minimized station footprint to utilize existing retail gasoline forecourt locations and can be readily duplicated at a majority of existing gasoline retail stations in a number of markets for the broadest deployment. Due to the requirements of SB 1505, hydrogen made from renewable resources will also be made available for dispensing on a regular basis.

The locations of the stations that received awards from CEC are shown in the table below:

This action is to execute a contract with Air Products and Chemicals, Inc. (APCI) in an amount not to exceed $1,000,000 from the Clean Fuels Fund. 

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 vehicles and refueling stations are necessary to comply with the Zero Emission Vehicle (ZEV) regulation to reduce criteria pollutant emissions. The development of an extensive hydrogen fueling network in Southern California will accelerate the deployment of these cleaner vehicles. Specifically, the proposed project leverages existing activities included in the Technology Advancement Office 2010 Plan Update under “Hydrogen Technologies and Infrastructure.”

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. For the APCI hydrogen fueling station project, the 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.

Significant project funding will be provided by the CEC and APCI including in-kind funding to perform the tasks of design, construction, operation and outreach required for completing the eight hydrogen fueling stations. Furthermore, these stations fill a critical gap in the region for hydrogen fueling, and promotes the utilization of the cleanest passenger vehicles.

The project team includes APCI as the prime contractor to the AQMD, and General Physics and Engineering, Procurement and Construction, LLC for station design and construction. The APCI team is uniquely qualified for these projects because of their expertise and experience in hydrogen safety, production, and distribution and fueling.

Resource Impacts

The total cost for the hydrogen vehicle demonstration project is estimated to be $13,311,257, of which AQMD’s cost share shall not exceed $1,000,000 in addition to a total of $12,311,257 in cofunding to be received from CEC and APCI.

Sufficient funds for these proposed projects 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.