BOARD MEETING DATE: July 9, 2010
AGENDA NO. 41
(Continued from June 4, 2010 Board Meeting)
PROPOSAL:
Amend Rule 1193 – Clean On-Road Residential and Commercial Refuse Collection Vehicles
SYNOPSIS:
Amendments are proposed to Rule 1193 to address recent court decisions on fleet rule applicability in terms of modifying the scope of the rule to apply to government fleets. In addition, amendments are proposed to require the use of alternative-fuel solid waste collection vehicles when government agencies issue contracts for new or renewed solid waste collection services for both commercial and residential service.
COMMITTEE:
Mobile Source, October 16, 2009, January 22, 2010, March 19, 2010, April 16, 2010, and June 18, 2010, Reviewed
RECOMMENDED ACTIONS:
Adopt the attached resolution:
- Certifying the Final Subsequent Environmental Assessment; and
- Amending Rule 1193 – Clean On-Road Residential and Commercial Refuse Collection Vehicles
Barry R. Wallerstein, D.Env.
Executive Officer
Background
In an effort to reduce mobile source emissions from public and certain private sector fleet vehicles, the Board adopted seven on-road vehicle fleet rules in 2000 and 2001. One of these fleet rules, Rule 1193 – Clean On-Road Residential and Commercial Refuse Collection Vehicles, was adopted on June 16, 2000. Rule 1193 as adopted in 2000 requires public and certain private fleets that provide refuse collection services to purchase alternative fuel vehicles at the time fleets are ready to purchase new or replace existing diesel fueled refuse vehicles. Rule 1193 was phased-in between July 1, 2001 and July 1, 2002 and affected all public and private refuse fleets with 15 or more refuse vehicles. Types of refuse vehicles affected include solid waste collection vehicles, rolloff vehicles, and transfer vehicles with gross vehicle weight ratings of 14,000 pounds or more. In addition, Rule 1193 provided exemptions if alternative-fueled refuse vehicles are not commercially available or could not be used in certain applications.
Rule 1193 along with another five fleet rules were challenged in court relative to the mandatory requirement to purchase alternative-fueled vehicles. The plaintiff alleged that the fleet rules were preempted under Section 209(a) of the Clean Air Act and that the rules cannot be enforced without obtaining a waiver from the U.S. EPA. After a series of Court decisions including the U.S. Supreme Court, an agreement was reached between the parties which provided that the fleet rules are not preempted by the Clean Air Act Section 209(a) in so far as they direct the purchasing, procuring, leasing, and contracting decisions of state and local government entities, and private entities under contract to, or operating under an exclusive contract or a franchise with, state and local government entities. In addition, the parties agreed that the fleet rules do not apply to federal government entities. Based on the court decisions and the settlement, under the provisions of Rule 1193, private refuse collection operators under contract to government agencies must provide alternative-fueled or other rule compliant vehicles to perform such services.
Since the settlement in 2005, Rule 1193 has been implemented on a case-by-case basis based on the court decisions and in accordance with the settlement agreement. Specifically, public and private refuse fleets have requested clarifications on the applicability of the rule as it applied to refuse collection services at commercial establishments and at transfer stations. As such, staff began the development of proposed amendments to clarify Rule 1193 given the various mechanisms that local jurisdictions use for refuse collection services.
Proposal
Under existing Rule 1193, public and certain private refuse fleets with 15 or more refuse vehicles must purchase alternative fueled vehicles at the time the fleets are replacing existing diesel fueled vehicles or adding new refuse vehicles to their fleets. Staff is proposing that governmental agencies that contract or limit the number of private refuse collection providers enter into contracts for alternative-fueled vehicles for refuse services. As private refuse fleets enter into new contracts or renew existing contracts to provide refuse collection services to government entities, the services would be with alternative-fueled refuse vehicles. Any refuse vehicles used in an existing contract would not be affected by the proposed amendments until the contract is renewed. The number of alternative-fueled vehicles used under contract is a function of the type of contract. For new residential refuse collection services contracts, affected private fleets would be required to provide 100 percent alternative-fueled vehicles. For renewal of existing contracts and new commercial refuse collection contracts, private fleets providing refuse services would be given a choice to either provide alternative-fueled vehicles within seven years of contract renewals or replace diesel-fueled refuse vehicles that are 12 years or older with alternative-fueled vehicles. Diesel powered refuse vehicles removed from service would not be allowed to operate in another existing contract. However, these vehicles may replace older vehicles used in other refuse collection services that are provided through contractual agreements with government entities or used solely between private entities. Fleets would still be required to replace existing diesel vehicles with alternative-fueled vehicles at the time they are ready to replace vehicles. All refuse collection services would be with alternative-fueled vehicles by January 1, 2020. Lastly, governmental agencies or private refuse fleets would report to the AQMD the compliance approach each fleet has chosen.
The proposed provisions would apply only to governmental agencies that contract for exclusive refuse collection services or limit the number of private refuse collection providers through franchise or contractual agreements. The proposed amendments would not apply to refuse collection vehicles that operate in jurisdictions that do not require any contractual arrangements and instead operate under agreements such as open permits and business licenses, or where there are no restrictions on the number of providers operating in the local jurisdictions.
There is a general recognition that as part of the proposed amendments, some smaller refuse fleets with less than 15 refuse vehicles would now be subject to the proposed amendments as they operate in a contract with a city having vehicles such that the combined fleet total is 15 or more. As such, staff is proposing that refuse fleets with less than 15 refuse vehicles be given the choice to either implement the proposed amendments or replace existing older diesel powered vehicles with alternative-fueled vehicles at the time the fleet is ready to replace vehicles.
In addition to the use of alternative fueled vehicles as discussed above, staff is proposing flexibility in the use of diesel-powered vehicles if fleets cannot take delivery of alternative fueled vehicles in a timely manner; the use of diesel-powered vehicles when there are vehicle breakdowns and alternative-fueled vehicles are not available as backups; an alternative-fueled refuse vehicle is not commercially-available; or if an alternative fuel refueling infrastructure is temporarily not available at the start of a new or renewed residential refuse collection services contract. Staff is proposing that the implementation flexibility be provided through a “technical infeasibility certification request” or TICR process similar to the process provided in Rules 1186.1 and 1196.
During the public commenting period, private refuse fleets indicated that there is a need to have a mix of alternative-fueled and conventional-fueled vehicles to provide clean-up response in emergency situations such as natural disasters. Comments were made that disruption in the alternative fuel refueling infrastructure could occur. As such, private refuse fleets would not be able to respond in a timely manner. A similar comment was made when Rule 1196 was adopted. Unlike Rule 1196, there will be a number of diesel-powered refuse vehicles not subject to PAR 1193 because they operate in private-to-private refuse collection services or in jurisdictions where there are no limits on the number of refuse collection providers to provide such services. In addition, staff indicated that by the time a majority of the refuse vehicles are alternative-fueled, there should be sufficient supplies of alternative fuel. Mobile refueling would be available also. Regardless, staff believes that a small number of refuse vehicles may be diesel-powered if the refueling infrastructure is not fully built. As such, staff is proposing that refuse fleets with 50 or more vehicle may have up to 3 percent of the total number of solid waste collection vehicles subject to Rule 1193 (automated side loaders, rear loaders, and front end loader vehicles that collect waste at residential curbside or collect waste at commercial establishments or multi-family dwelling units) used under contract as diesel-powered vehicles. Staff is proposing that up to 20 percent of the roll-off and transfer vehicles subject to Rule 1193 be diesel powered vehicles that meet 2010 NOx and PM emissions standards. For fleets with less than 50 vehicles, up to three diesel solid waste collection vehicles may remain in the fleet.
Staff believes that existing District Rule 118 provides the necessary flexibility in case of an emergency where the Governor or President declares a state of emergency. Rule 118 authorizes the AQMD Executive Officer to waive provisions of AQMD rules during that emergency.
Lastly, staff is proposing additional definitions in order to implement the proposed amendments and deleting provisions that are no longer applicable.
A summary of the proposed amendments is provided in Attachment A. Specific proposed rule language can be found in Attachment D. Minor clarification language revisions are proposed to the proposed rule language released on June 8, 2010 and are shown in blue highlights (see Attachment D). A final Staff Report is provided in Attachment E.
Public Process and Policy Issues
A summary of the public process is provided in Attachment B. Staff began the development of proposed amendments in early-2009. In September 2009, staff released proposed amendments to clarify the implementation of Rule 1193 similar to Rule 1186.1. In the September 2009 proposal, all new and renewed refuse collection service contracts would require the use of alternative-fueled vehicles immediately from the start of contract service. Comments were received that unlike street sweeper fleets subject to Rule 1186.1, private refuse fleets have a wider variety of contractual arrangements. In addition, the proposed amendments would place a significant financial burden on private fleets to comply. A majority of the private fleets expressed that the financial issues are not with the purchase of alternative-fueled vehicles, but rather the rate at which new alternative-fueled vehicles would have to be purchased given that a portion of their contracts are renewed on an annual basis.
Staff conducted a survey of public and private refuse fleets to gather up-to-date information regarding the number and types of refuse vehicles in operation in the South Coast Air Basin. In addition, staff surveyed government entities regarding the types of contractual arrangements various governmental agencies use for refuse collection services.
In January 2010, staff proposed a limited phase-in approach that would allow for either a two or three-year period (depending on fleet size) for private refuse fleets to provide 100 percent alternative-fueled vehicles. Regardless, private fleets commented that there would be significant financial burden to affected fleets. In addition, private fleets with newer diesel-powered vehicles would not be able to recoup their investments in these vehicles.
Several fleets offered alternative implementation proposals for staff’s consideration. One alternative is to allow private fleets to continue to use vehicles that are 12 years and newer. In each subsequent year, vehicles older than 12 years would not be allowed to continue to provide refuse service. Eventually, all vehicles would be alternative-fueled under such a “rolling” model year replacement approach. Another alternative proposed is the allowance of a specific number of years for fleets to turnover their diesel vehicles based on individual contract performance periods (i.e., if a contract has a seven year period, then by the end of the seventh year, there would be 100 percent alternative fueled vehicles). This would apply to contracts that are renewed on an annual basis or may have options to extend the contract performance periods. In addition to the two alternatives, comments were received that smaller fleets that have never been subject to Rule 1193 are now forced into replacing vehicles and cannot compete with larger fleets.
After the April 2010 Set Hearing date, staff received comments that most larger fleets are more in favor of the “rolling” model year retirement approach and smaller fleets were more inclined to implement a replacement approach within a specific number of years. All of the private fleets that have met with staff indicated that they are supportive of having 100 percent alternative-fueled vehicles for new residential contracts and that all refuse vehicles providing service under contract would be alternative-fueled beginning January 1, 2020.
In addition to comments from private fleet operators, comments were received from the Coalition for Clean Air that the “rolling” model year retirement approach would replace older diesel vehicles faster than staff’s original proposal. Recognizing that no single set of provisions could be applied to all fleets, staff is now proposing that fleets have a choice of the “rolling” model year retirement approach or replacement within seven years, upon contract renewal or execution of new commercial contracts. However, there may be fleets that would continue to incur significant financial burden despite the two approaches. In particular, refuse fleets that have a large number of older refuse vehicles (older than 12 years) could be significantly affected. A comment was received regarding a consideration of credits that can be given to fleets that have been replacing diesel refuse vehicles used in non-affected Rule 1193 refuse services with alternative-fueled vehicles so that the fleet can be given additional time to turnover diesel vehicles under contract. The environmental organizations commented on the possibility of seeking a cost-effective means to clean-up older diesel refuse vehicles that are not subject to Rule 1193. Staff believes that the credit approach has merits given that there will still be a large number of older, diesel-powered refuse vehicles not subject to Rule 1193. However, staff has not been able to develop a process to appropriately apply the credits at this point without further discussions with all stakeholders. Staff will continue to work with all stakeholders to determine the feasibility of such an approach. If the approach proves to be feasible, enforceable, and result in surplus emission reductions, staff will report back to the Board and discuss potential recommendations.
Emission Reductions
Proposed amended rule (PAR) 1193 would affect approximately 2,900 diesel-powered refuse collection vehicles in the current public and private fleets today. Based on the proposed amendments, it is estimated that by 2020 oxides of nitrogen emissions would be reduced by 576 tons/year (or about 1.6 tons/day) and greenhouse gas emissions by 119,200 tons of CO2 equivalent. In addition, there would be continued reduction in air toxic emissions as alternative fueled vehicles replace diesel-powered refuse vehicles not subject to the proposed amendments.
California Environmental Quality Act (CEQA)
Pursuant to California Environmental Quality Act (CEQA) Guidelines §15252 and AQMD Rule 110, a Final Subsequent Environmental Assessment (SEA) for PAR 1193 – On-Road Residential and Commercial Refuse Collection Vehicles, has been prepared. The Draft SEA was released for a 30-day public review and comment period beginning on March 17, 2010, and ending on April 15, 2010. Two comment letters were received from the public. One comment letter did not address CEQA issues and response to comments has been addressed in the Final Staff Report for PAR 1193 instead of the SEA. Responses have been prepared for the other comment letter, and both that comment letter and responses to those comments have been incorporated into the SEA such that it is now a Final SEA. (See Attachment F)
Socioeconomic Assessment
The socioeconomic report for PAR 1193 includes the analysis of two implementation scenarios. Scenario 1 is the proposed amendments, as of April 2, 2010. Scenario 2 differs from Scenario 1 in its application of the criteria to commercial solid waste collection contracts between private fleets and government agencies by allowing greater flexibility in the use of existing diesel vehicles in these contracts. The distinctions between Scenario 1 and 2 would result in a difference in the utilization of diesel and alternative-fuel vehicles under each scenario.
PAR 1193 would affect approximately 45 facilities in the waste management and remediation services sector of the South Coast’s regional economy. Additional affected facilities are in the nonstore retail sector, which includes fuel dealers.
Under Scenario 1, the average annual total cost is projected to be $14.4 million from 2010 to 2025. Under Scenario 2, the average annual total cost would be $13.3 million over the same period. Under Scenario 1, 93 percent of average annual cost ($13.4 million) would occur in the waste management and remediation services sector and seven percent ($1 million) would occur in the nonstore retail sector. Under Scenario 2, 93 percent of the average annual costs ($12.4 million) would occur in the waste management and remediation services sector and seven percent ($0.9 million) would occur in the nonstore retail sector.
The overall job impacts are similar for both scenarios. Under Scenario 1, 195 jobs in the four county region could be forgone annually, on average, between 2010 and 2025. Under Scenario 2, 172 jobs in the four county region could be forgone annually, on average, between 2010 and 2025. Job impacts in the local economy at the sectoral level relative to total industry employment are modest. Adoption of the proposed amended rule is expected to cause very few changes in the relative costs of production and prices of goods in the local economy. The Socioeconomic Assessment is provided in Attachment G. Since the Socioeconomic Assessment was prepared, additional flexibilities have been added to the proposed amendments.
Cost Impacts
AQMD staff assessment of the cost impacts for the proposed rule amendment indicates that with the current staff proposal, the cost-effectiveness of PAR 1193 would be $7,430 per ton of NOx reduced. The cost-effectiveness includes capital and operational costs. The costs resulting from PAR 1193 are related to the interest rate expense associated with the accelerated purchase of alternative-fuel vehicles and a nominal increase in the affected vehicle population. Cost impacts associated with the early retirement of existing diesel vehicles and replacement with rule compliant vehicles, costing approximately $300,000 each (about $40,000 more than corresponding diesel vehicles) were also incorporated into the analysis. Finally, cost impacts would be incurred due to the accelerated construction of alternative-fuel refueling stations.
Resource Impacts
PAR 1193 would continue to require public and private refuse collection operators to purchase alternative-fueled or pilot-ignition vehicles at the time the operators are adding or replacing refuse collection vehicles in their fleets. PAR 1193 would require that when governmental agencies contract for refuse collection services, that they contract for 100 percent alternative-fueled vehicles. PAR 1193 would apply to private refuse operators who have contracts with governmental agencies to provide refuse collection services. Governmental agencies and private refuse fleets would report to the AQMD how they would comply with PAR 1193. In addition, certain fleets may request some compliance flexibility through the technical infeasibility certification request process. Staff believes that there will be minimal resource impacts on the AQMD to track compliance of the rule. In addition, fleet operators keep records of their purchases and procurement information and for private fleet operators, contractual arrangements with governmental agencies. There will be small administrative costs associated with random inspection of fleet operators for rule implementation and enforcement purposes and the tracking of the penetration of alternative fueled or dual-fuel vehicles into the market. Staff believes that there are sufficient resources to implement the proposed amendments to Rule 1193.
Recommendation
Staff recommends that proposed amendments to Rule 1193 be adopted. The proposed rule amendments would clarify the AQMD’s authority to implement and enforce Rule 1193. With adoption of the proposed amendments, there will be additional criteria pollutant and greenhouse gas emissions reductions occurring earlier than under existing Rule 1193.
Attachments (EXE, 1.6m)
A. Summary of PAR 1193 Proposal
B. Rule Development Process
C. Resolution
D. Proposed Amendments to Rule 1193
E. Final Staff Report on PAR 1193
F. Final Subsequent Environmental Assessment
G. Socioeconomic Assessment
Errata ( DOC, 30k)