BOARD MEETING DATE: March 5, 2010
AGENDA NO. 13
PROPOSAL:
Establish Special Revenue Funds: Emission Reduction Education and Outreach Fund; Rule 1118 Mitigation Fund
SYNOPSIS:
South Coast AQMD expects to enter into a settlement agreement with a Supplemental Environmental Project to settle excessive emissions violations. This action is to establish an Emission Reduction Education and Outreach Fund and a Rule 1118 Mitigation Fund with the money collected from the settlement agreement. The purpose of the Emission Reduction Education and Outreach Fund will be to enhance compliance of emission reduction policies by providing source education and consumer education. Rule 1118 monitors refinery and related flaring operations to control and minimize flaring and flare related emissions. The provisions of Rule 1118 establish a mitigation fee payment schedule relating to excessive flare emissions. The purpose of the Rule 1118 Mitigation Fund will be to account for these Rule 1118 mitigation fee payments.
COMMITTEE:
Administrative, February 12, 2010, Recommended for Approval
RECOMMENDED ACTION:
Establish the Emission Reduction Education and Outreach Fund and recognize up to $1,000,000 from a pending SEP settlement;
Establish the Rule 1118 Mitigation Fund and recognize $1,319,000 in a mitigation fee payment from Ultramar.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
Amended in November 2005, Rule 1118 requires petroleum refineries that exceed performance targets on sulfur dioxide emissions from flares pay the AQMD mitigation fees. In July 2009 Ultramar paid a mitigation fee of $1,319,000 for September and October 2008 flaring events which exceeded the sulfur dioxide emissions thresholds specified in the rule. A Special Revenue Fund needs to be established to account for this mitigation fee and future Rule 1118 mitigation fees and to track the projects funded through these fees.
AQMD is in discussions regarding an agreement to settle excessive VOC emissions violations. Under the terms of the proposed agreement, the facility will pay a sum up to $1 million which will be allocated to a Supplemental Environmental Project (SEP). The focus of this project will be to enhance compliance with emission reduction policies by providing source education and consumer education. A Special Revenue Fund needs to be established to account for funds received for this SEP and track its educational activities.
Proposal
Staff proposes that the Board approve the establishment of the Emission Reduction Education and Outreach Fund to enhance compliance of emission reduction policies by providing source education and consumer education and the establishment of the Rule 1118 Mitigation Fund to account for Rule 1118 mitigation fee payments.
Resource Impact
The impacts to the AQMD budget associated with initiating and monitoring projects funded by the Rule 1118 Mitigation Fund and the Emission Reduction Education and Outreach Fund are projected to be minor and within the resources currently allocated for FY 2009-10.