BOARD MEETING DATE: February 5, 2010
AGENDA NO. 31

PROPOSAL:

Stationary Source Committee

SYNOPSIS:

The Stationary Source Committee met Friday, January 22, 2010.  Following is a summary of that meeting.  The next meeting will be February 19, at 10:30 a.m., in Conference Room CC8.

RECOMMENDED ACTION:

Receive and file.
 

Dennis Yates, Chair
Stationary Source Committee

Attendance

The meeting began at 10:45 a.m.  Present were Dennis Yates, Bill Campbell (attended by videoconference), Dr. Burke (attended by videoconference), Josie Gonzales and Ronald Loveridge (left at 11:10 a.m.).  Absent was Jane Carney. 

INFORMATIONAL ITEM

1. Briefing on Regulation IX Standards for Performance for New Stationary Sources and Regulation X National Emission Standards for Hazardous Air Pollutants
   
   Jill Whynot, Director of Strategic Initiatives, gave a brief summary.  Regulations IX and X are updated each year to incorporate federal standards by reference.  There were no actions for Regulation X this year, and three actions for Regulation IX.  This is a routine item that will come to the Board for public hearing in March.
   
2. Rule 1309.2 Offset Budget and Amend Rule 1309 Emission Reduction Credits and Short Term Credits
   
   Dr. Laki Tisopulos, Assistant Deputy Executive Officer with the Planning, Rule Development and Area Sources gave the staff presentation.  In an effort to streamline the CEQA analysis associated with the re-adoption of Rule 1315, staff is proposing the rescission of Rule 1309.2 which establishes an offset budget of last resort for stationary sources unable to obtain offset credits in the open market and ineligible for Priority Reserve.  Implementation of Rule 1309.2 is subject to U.S. EPA and CARB approval.  U.S. EPA has not to date approved implementation of the rule and, therefore, no stationary source was able to take advantage of it.  Rescission of Rule 1309.2 will assure that sources not covered under offset exemptions of Rules 1304 or 1309.1 will not be able to access offsets under Rule 1309.2.  Further, the proposed amendments to Rule 1309 will eliminate references to Rule 1309.2 and transfer specific noticing requirements for short term credits, currently included in Rule 1309.2, to Rule 1309.
   
   Committee Members voted to receive and file the report.
   
3. Rule 317 Clean Air Act Non-Attainment Fees Status Report
   
   Dr. Laki Tisopulos updated the Committee on U.S. EPAs guidance on implementing Section 185 of the CAA, flexibilities available under Section 1729(e) and U.S. EPAs response to the concepts presented by the CAAAC.  Mayor Yates expressed his frustration regarding U.S. EPAs reluctance in exempting clean units from the program.  Staff is proposing to restructure Rule 317 in a manner that complies with Section 185 primarily due to the ease of approvability and certainty it provides, using the attainment year emissions as the baseline and incorporating certain flexibilities that U.S. EPA cited in their recently released guidance such as multi-facility aggregation under common ownership and facility-wide emissions aggregation.  Further, staff indicated that Section 185 provides the Board with complete flexibility in determining how to utilize the fees.  Under this flexibility the Board could consider crediting the remitted fees toward the impacted facilities Regulation III fees.  This will significantly reduce the fee burden on local facilities.  Staff indicated that they are also exploring the opportunity of crediting AB118 grants in a similar fashion.  Any remaining fees could be invested following the prioritization provided by the Board.  Staff also briefed the Committee on the comments received on the recently held meeting with the stakeholders, including the desire by certain representatives from industry to develop an alternative program under Section 172(e) that relies on vehicle license fees.  Several members of the committee expressed that the vehicle license fee would be a difficult approach to pursue under the current economic climate and should be pursued only as a last resort approach.  Supervisor Campbell commented that the flexibilities recommended by staff are moving in the right direction but also recommended that in establishing the emissions baseline staff should continue to explore multi-year flexibility rather than relying on a single year.  Several member of the public that testified expressed appreciation for staffs efforts and their desire to continue to work with staff and U.S. EPA in developing a local program that provides the highest level of flexibility and minimizes impacts on the local economy.    

WRITTEN REPORTS

All written reports were acknowledged by the Committee.

PUBLIC COMMENTS

Nicole Nishimura, Board Assistant to Dr. Lyou, commented that Rule 317 was not listed on the Rule and Control Measure Forecast.

Mayor Yates announced that the next Stationary Source Committee meeting will be on February 19, 2010.

The meeting was adjourned at 11:30 a.m.

Attachments (DOC, 50k)

Attendance Roster