BOARD MEETING DATE: December 3, 2010
AGENDA NO. 30
REPORT:
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, November 19, 2010. Following is a summary of that meeting. The next meeting will be January 21, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTIONS:
Receive and file.
Dennis Yates, Chair,
Stationary Source Committee
Attendance
The meeting began at 10:35 a.m. Present were Dennis Yates, Jane Carney and Judith Mitchell. Absent were Bill Campbell and Ronald Loveridge and Josie Gonzales.
Committee Chair Dennis Yates announced that agenda item #1 would be heard out of order prior to agenda item #1A.
INFORMATIONAL ITEM
Proposed Rule 1315 Federal New Source Review Tracking System
Mohsen Nazemi, Deputy Executive Officer of Engineering & Compliance, presented a summary of Proposed Rule 1315. He explained that the Governing Board previously adopted Rule 1315 in 2006 and 2007. AQMD was sued on CEQA grounds in both cases and the State Superior Court Judge invalidated Rule 1315 (along with amendments to Rule 1309.1), and the Governing Board repealed the Rule in January of this year. The purpose of the proposed rule is to maintain AQMDs ability to continue issuing permits to sources that obtain offsets pursuant to the Priority Reserve, Rule 1309.1, or are exempt from providing offsets pursuant to Rule 1304 Exemption, as well as to memorialize the tracking procedures used to verify and ensure that AQMDs offset account balances remain positive. AQMD has implemented a federal NSR tracking system for approximately two decades.
The proposed version of Rule 1315 includes the same tracking elements as the previously adopted version, however, it also includes strengthened equivalency backstop provisions. Additionally, since the prior lawsuits were on CEQA grounds, the proposed rule includes CEQA backstop measures designed to ensure that the actual impacts of implementing the rule do not exceed those evaluated in the CEQA document. Mr. Nazemi explained what the sources of initial offset account balances and the subsequent sources of deposits to the offset accounts and the types of projects using offsets from the offset accounts (including essential public services and sources that emit less than four tons per yearprimarily small business). Offsets in the offset accounts that remain unused each year are carried over to the next year. However, because EPA has a policy requiring that offsets be surplus at the time of use, the carried over amounts are adjusted downwards to reflect changes in emissions requirements applicable to permitted stationary sources that became effective during the year.
Mr. Nazemi then discussed the annual demonstrations of equivalency that the proposed rule require to be prepared after each reporting period is completed. In addition, the equivalency reports also include projections of the account balances for the following two years to provide timely estimates of future balances. If a projection were to indicate that a shortfall is likely, staff would report to the Governing Board with recommendations to prevent the shortfall, such as generation of new offsets, purchase of existing offsets on the open market, or amending Rule 1304 and/or Rule 1309.1 to eliminate certain offset exemptions to ensure AQMD does not continue issuing permits relying on the offset accounts if the balances do not remain positive.
Governing Board Member Jane Carney asked why the accounting is not done in real time rather than in annual demonstrations. Mr. Nazemi responded that there are two reasons: the credits and debits are tracked in AQMDs permit database and Engineering & Compliance staff reverify the data at the end of each reporting period to ensure that it is correct and many of the credits result from permits which have become inactive for nonpayment of fees. However, AQMD rules allow facilities up to one year after such inactivations to pay the delinquent fees and have their permits reactivated. Therefore, credit is not taken for such inactivations until the repayment grace period has expired.
Mr. Nazemi next discussed the equivalency backstop provisions and the CEQA backstop provisions. If an equivalency demonstration shows that there is a shortfall in an offset account, AQMD would stop funding the Priority Reserve for that nonattainment air contaminant and would stop issuing permits to major sources relying on the offset accounts for that contaminant. Additionally, if there is a shortfall or a projected shortfall, AQMD would recommend to the Governing Board appropriate action to rectify or prevent the shortfall. Similarly, if the cumulative net emissions increase of any nonattainment air contaminant resulting from implementation of the proposed rule were to exceed the threshold specified in the rule, which are based upon the growth assumptions in the 2007 AQMP and analyzed in the CEQA document, AQMD would stop issuing permits to major or minor sources relying on an offset exemption or the Priority Reserve for the same nonattainment air contaminant until the cumulative net emission increase returns to a level at least ten percent below the threshold.
The Proposed Rule 1315 development process began with a Public Consultation and CEQA Scoping Meeting in April 2009. The draft CEQA document, draft rule, preliminary draft staff report, and public notice were released in September 2010, and the Public Workshop was held the same month. The CEQA comment period closed in early November and six comment letters were received: five supporting adoption of the proposed rule and rejecting the alternatives and one, from four of the environmental groups that were plaintiffs in the previous lawsuits, disagreeing with the rule. Governing Board Member Judith Mitchell asked if there was the potential for the backstop measures to result in an extended period of AQMD being unable to issue permits relying on offset exemptions or the Priority Reserve. Mr. Nazemi stated that there was a previous permit moratorium for about a year and a half after AQMD lost the previous lawsuit, however, the state law was changed and AQMD is currently issuing permits under the authority of SB 827, which expires in May 2012. Therefore, it is necessary to adopt the proposed rule, submit it to CARB for review, and have CARB submit it to EPA for inclusion in the SIP prior to May 2012. Kurt Wiese, General Counsel, continued that a renewed permit moratorium is theoretically possible, but is not expected.
During public comments, Greg Adams of County Sanitation Districts of Los Angeles County asked if EPA has committed to review the SIP submittal on a fast track. Mr. Nazemi responded that AQMD staff has been working with EPA throughout the rule development process and we expect that EPA would complete its review quickly.
ACTION ITEM
1A Execute Sole Source Contract for Contact Database of E-mail Addresses
Chris Marlia, Assistant DEO of Information Management recommended approval of a Sole Source Contract with CHMB Consulting Firm for purchase of a database of contact information including email addresses for 1.16 million residents in the AQMDs jurisdiction ($100,000) as well as consulting services ($20,000) to assist with the implementation of a List Management System for a total of $120,000. A brief discussion followed as to the projected growth of the database as well as how the database would actually be used. No public comments were received following the presentation. The item was unanimously approved for consideration at the December 3, 2010 Board Meeting.
Moved (Yates) seconded (Carney), and unanimously recommended for approval.
INFORMATIONAL ITEMS
Rule 1415 Reduction of Refrigerant Emissions from Stationary Refrigeration and Air Conditioning Systems and Rule 1415.1 Reduction of Refrigerant Emissions from Stationary Refrigeration Systems
Naveen Berry, Planning & Rules Manager, presented staff proposal to amend existing Rule 1415 and adopt a new rule, Rule 1415.1. Board Member Judith Mitchell asked for clarification on the cost impacts of the proposed rules. Staff indicated that CARBs analysis showing that the best refrigerant management practices incorporated in the rules would minimize refrigerant leaks, resulting in cost savings that more than exceed the compliance costs. Staff explained that additional cost to the industry was based on the number of additional facilities that are expected to register their equipment with the District.
Rule 314 Fees for Architectural Coatings
Naveen Berry, Planning & Rules Manager, presented the annual status report on the revenue/expense and compliance activities associated with the architectural coatings program. Board Member Yates inquired about the impacts of Proposition 26 on this fee rule. Staff explained that amendment to the rule is not proposed. The public inquired about the expense and revenue gap that exists and if the District had any plans to raise the fees to eliminate the gap. Staff explained that costs associated with architectural coatings program were previously covered by fees from other sources, so the revenue is to balance the fair share costs. Additionally, staff explained that staff does not plan to increase fees for Rule 314.Rule 1143 Consumer Paint Thinners and Multipurpose Solvents Public Education and Outreach
Naveen Berry, Planning & Rules Manager, presented an update on the Education and Outreach efforts required by Rule 1143 Consumer Paint Thinners & Multi-Purpose Solvents to communicate potential increased hazards associated with lower polluting products that may have been re-formulated with higher flammability materials. One question raised by committee member Carney was addressed to clarify that it is the Districts intent that communication brochures distributed to retailers be displayed adjacent or in close proximity to the products.
WRITTEN REPORTS
All written reports were acknowledged by the Committee.
PUBLIC COMMENTS
There were no public comments.
Mayor Yates announced that the next Stationary Source Committee meeting will be on January 21, 2011.
The meeting was adjourned at 11:35 a.m.
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