BOARD MEETING DATE: September 10, 2010
AGENDA NO. 22

REPORT:

Enter Into Mitigation Agreement with City of Newport Beach Regarding Use of Emission Credits for CEQA Mitigation

SYNOPSIS:

The City of Newport Beach has approached the AQMD seeking guidance on using mobile source emission reduction credits to mitigate significant NOx emissions during dredging activities to remove contaminated sediments from the Rhine Channel of the Lower Newport Harbor.  The City of Newport Beach has committed to implementing all feasible onsite mitigation such as use of the cleanest burning construction equipment and boats available, however project air quality impacts will remain significant without the use of emissions reduction credits. In response to similar requests in the past, AQMD has established a procedure to follow when using emission credits as CEQA mitigation.  As a responsible agency, the AQMD would enter into a Mitigation Agreement with the lead agency, signed by the Executive Officer.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

Receive and file. 
 

Barry R. Wallerstein, D.Env.
Executive Officer

Proposed Project Background

The City of Newport Beach is the lead agency under CEQA overseeing the removal of contaminated sediments from the Rhine Channel of the Lower Newport Harbor. Approximately 150,000 cubic yards of sediments will be dredged and shipped via ocean barge for disposal at the Port of Long Beach Middle Harbor Confined Disposal Facility. The dredging activities are scheduled to occur over a four to five month period beginning in October 2010. The City of Newport Beach prepared and certified a Mitigated Negative Declaration (MND) for the contaminated sediment removal project on July 27, 2010. The City of Newport Beach has committed to implementing all feasible onsite mitigation measures, including using the cleanest burning construction equipment and boats available. However, even after implementing all feasible onsite measures, project air quality impacts will remain significant without the use of emissions reduction credits. If the City of Newport Beach were to prepare an environmental impact report due to significant air quality impacts, the additional time necessary for this extended environmental analysis may jeopardize the city’s ability to dispose of the contaminated sediments at the Port of Long Beach.  

Use of Mobile Source Emission Reduction Credit Background

In the past, CEQA lead agencies have approached the AQMD for information and guidance with regard to using emission credits as CEQA mitigation, primarily for construction air quality impacts. Although it is preferable that CEQA lead agencies identify onsite or local emission reduction mitigation measures using available low emission technologies, there is nothing to preclude them from using emission credits as CEQA mitigation. In response to these past requests, AQMD staff has developed a recommended procedure for using emission credits as CEQA mitigation. The following provides an overview of the procedure.

  • The lead agency must demonstrate that it has made a good faith effort to identify clean, low emission technologies to mitigate significant construction air quality impacts. It is preferable that emission reduction mitigation measure occur onsite or in the immediate vicinity of the proposed project.

  • Prior to approval of a mitigation measure that allows the use of emission credits, the lead agency must demonstrate that there are no significant localized air quality impacts. To demonstrate that the project will not generate significant localized air quality impacts, the lead agency must perform dispersion modeling according to the most current AQMD protocols. If the project is five acres or smaller, the lead agency may use the AQMD’s localized significance threshold methodology and tables.

  • Prior to commencement of the construction project in accordance with established AQMD protocols for generating emission credits, the project applicant shall provide emission credits in amounts sufficient to reduce significant impacts for each pollutant that exceeds applicable significance thresholds for each phase of the project. The offset credits must meet the following criteria:

  • The project applicant must demonstrate that the emission credits were derived from emission reduction project(s) through AQMD-approved protocols.

  • The credit must be concurrent for the duration of the project, meaning the emission credits have not expired before or during the time period when the emissions from the project would occur.

  • The project proponent shall retire the entire amount of emission credits needed to mitigate the exceedance of the applicable significance threshold for each significant pollutant prior to commencement of the construction project.

  • If any emissions exceed the original estimation of emission credits needed, the project applicant or consultant shall reconcile the emissions that exceed the original estimation of emission credits purchased. The project proponent will be given a 15-day reconciliation period without penalties to purchase additional emission credits, if needed, to continue the project; failure to do so will result in a penalty of purchasing additional credits in an amount equal to the additional excess emissions plus 100 percent of the additional excess emissions.

  • The project proponent’s construction contractor shall record the hour meter reading for each piece of equipment and the project applicant shall record all the equipment used and hours of operations. The project applicant or consultant shall prepare and submit a monthly report to the lead agency within seven days after the end of each construction month to demonstrate that conditions have been met.

Because the AQMD is not the Lead Agency for land development projects where emission credits may be used as CEQA mitigation, it is not responsible for approving the environmental document and/or Mitigation Monitoring and Reporting Plan (MMRP) in which the mitigation measure is required. However, the AQMD typically would have approval authority over a mitigation measure using emission credits to reduce regional air quality impacts, as well as enforcement and monitoring responsibility under the MMRP. In accordance with Public Resources Code §21081.6, the MMRP should outline the party responsible for implementing mitigation and the enforcement agency. Pursuant to CEQA Guidelines §15126.4(a)(2), to ensure that the mitigation measure is fully enforceable through a legally binding instrument, a Mitigation Agreement or other legally binding contractual instrument should be prepared. The Mitigation Agreement must be signed by the AQMD and the Lead Agency.

Conclusion

In accordance with the above procedure, the City of Newport Beach has submitted a Mitigation Agreement to the AQMD staff with regard to using emission credits as CEQA mitigation. The City of Newport Beach intends to use only Mobile Source Emission Reduction Credits and not New Source Review Emission Reduction Credits or RECLAIM Trading Credits. Staff has reviewed the materials provided by the City of Newport Beach and concluded that they have followed the process established by AQMD staff. The Mitigation Agreement consists of a legally binding agreement to be signed by the City of Newport Beach and AQMD’s Executive Officer.

Attachment (DOC, 34k)

Mitigation Agreement


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