BOARD MEETING DATE: September 10, 2010
AGENDA NO. 32

REPORT:

Technology Committee

SYNOPSIS:

The Technology Committee met on July 23, 2010. Major topics included Technology Advancement items reflected in the regular Board Agenda for the September Board meeting. A summary of these topics with the Committee's comments is provided. The next Technology Committee meeting will be on September 24, 2010 at #9;12 p.m. in CC-8.

RECOMMENDED ACTION:

Receive and file.  
 

Josie Gonzales
Technology Committee Chair

Attendance: Committee Member William Burke participated by video-teleconference. Committee Chair Josie Gonzales and Committee Members Judith Mitchell and Dennis Yates were in attendance at District headquarters. Committee Members Marion Ashley and Miguel Pulido were absent.

SEPTEMBER BOARD AGENDA ITEMS 

1. Appropriate Funds to 2010 Lawnmower Exchange Program for Events Scheduled in FY 2010-11
   
   At its February 5, 2010 meeting, the Board recognized funds to conduct the AQMD’s “Mow Down Air Pollution 2010” Program. Twelve events have been scheduled from May 1 through August 7, 2010 with 9,380 mowers to be exchanged. This action is to approve the transfer of $50,000 from the Air Quality Investment Fund to the FY 2010-11 Science & Technology Advancement budget to carry out the lawnmower exchange events scheduled in FY 2010-11.
   
   Dr. Burke wanted to ensure that the AQMD is receiving the best discount possible from lawnmower manufacturers. Staff committed to investigate strategies for the next RFP to ensure the AQMD receives the lowest possible price for the equipment.
   
   Dr. Burke also asked if staff had an estimate of the number of lawnmowers and leaf blowers that are still available for possible exchange. Staff committed to identify both inventories.
   
   Committee Chair Gonzales requested the 2011 program focus on host locations in communities that are both higher in emissions and economically impacted.  
   
   Moved by Yates; seconded by Mitchell; unanimously approved. 
   
   
2. Execute Contract to Administer Hybrid Truck and Bus Voucher Incentive Project and Appropriate Funds from Undesignated Fund Balance
   
   In December 2009, the Board approved the allocation of $1.5 million to cost-share the hybrid truck and bus voucher incentive project (HVIP) which reduces the high cost of hybrid vehicles within the AQMD region. This action is to execute a contract with CALSTART for the HVIP in an amount not to exceed $1.5 million from the Clean Fuels Fund. In addition, the Board previously recognized $1 million from the U.S. EPA for truck retrofits, but the contract was not executed by the end of the fiscal year due to a delay of Proposition 1B state funds as match for these projects. As a result, this action is to also appropriate funds from the undesignated fund balance to conduct the project. 
   
   Moved by Mitchell; seconded by Yates; unanimously approved. 
   
   
3. Transfer Funds from Clean Fuels Program Fund, Carl Moyer Program Fund AB 923 Account, and Proposition 1B Program Fund for Administrative Support and Related Activities
   
   The Clean Fuels, Carl Moyer and Proposition 1B Goods Movement Programs execute hundreds of contracts totaling over $150 million annually. These large programs have ongoing administrative, outreach, education and other directly related activities which require outside contractor resources and technical and expert support. Each fiscal year, staff requests fund transfers to support each of these programs. This action is to transfer $600,000 from the Clean Fuels Program Fund, $300,000 from the Carl Moyer Program Fund AB 923 Account, and $300,000 from the Proposition 1B Program Fund to the FY 2010-11 Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account to support these administrative activities. 
   
   Dr. Burke asked if the administrative fees are sufficient to cover the AQMD on-going activities for these programs. Staff responded that initially when the Carl Moyer Program started, AQMD used its own funds to administer the Program.  Staff now has sufficient fees, due to the large number of incentive programs administered by the agency, to cover staff activities; staff will, however, continue to monitor all of the program costs to ensure future activities are adequately covered.
   
   Moved by Yates; seconded by Mitchell; unanimously approved.
   
   
4. California Fuel Cell Partnership Steering Team Meeting Summary and Quarterly Update
   
   This report summarizes the California Fuel Cell Partnership Steering Team meeting held June 22-23, 2010 and provides quarterly updates for the period beginning January 2010.
   
   Councilmember Mitchell remarked that Honda is demonstrating a new solar hydrogen station at their Torrance facility and asked when it would be available and how much it would cost.  Staff explained that the station is intended to demonstrate an advanced electrolysis unit operating renewably but has not been announced for commercial sale.  Although such a station is likely very expensive, there are other methods of hydrogen production, such as steam reformation, which costs significantly less and can become competitive with gasoline when used in a fuel cell vehicle. 
   
   This was a receive and file item.  
   
   
5. Appropriate Funds and Execute Contracts for LNG Infrastructure under Department of Energy (DOE) American Recovery and Reinvestment Act and Clean Cities Programs
   
   In November 2009, the AQMD received two DOE awards for natural gas infrastructure and vehicles. The Board authorized contracts with United Parcel Service (UPS) for $5,591,610 and Applied LNG Technologies for $150,000.  UPS has subsequently requested the infrastructure portion of their award be granted to Clean Energy. This action is to execute a contract with Clean Energy in an amount not to exceed $1,534,517 for this station. In addition, this action is to appropriate funds in the amount of $150,000 into the FY 2010-11 Science & Technology Advancement FY 2010-11 Budget, Professional and Special Services Account, for a previously approved contract with Applied LNG Technologies, Inc.
   
   Councilmember Mitchell asked why AQMD is administering a project that includes constructing an LNG station in Las Vegas. Staff responded this project will have benefits in the South Coast Air Basin because the Las Vegas LNG station, in conjunction with the Ontario LNG station, will be able to provide fuel for LNG trucks that travel along Interstate 15 in our Basin thereby reducing emissions from diesel trucks. This LNG fueling corridor may also be used by drayage LNG trucks that operate at the ports.  
   
   Moved by Mitchell; seconded by Yates; unanimously approved.
   
   
6. Recognize Funds and Execute Contracts for Natural Gas Fueling Stations under California Energy Commission AB 118 Program
   
   In May 2010, the California Energy Commission announced AB 118 Alternative and Renewable Fuel and Vehicle Technology Program awards, of which $2.9 million was granted to the AQMD. This action is to recognize these funds into the Clean Fuels Fund, and then execute a contract with Clean Energy for the construction of up to eight CNG and two LNG fueling stations in an amount not to exceed $2,600,000 and a contract with Earth Energy Fuels, Inc. to construct a CNG fueling station in an amount not to exceed $300,000.
   
   Councilmember Mitchell asked why the cost of the Earth Energy Fuels station is much higher than the Clean Energy stations. Staff answered that the cost of installing natural gas fueling stations varies because construction and permitting costs will vary with each site location. However, the per station costs are typically $1 to $2 million. 
   
   Moved by Yates; seconded by Mitchell; unanimously approved. 
   
   
7. Recognize Funds from CARB, Transfer Funds and Appropriate Funds to Execute New Contract, and Amend Existing Contract for Demonstration of Aftertreatment Technology for Locomotives
   
   In June 2010, the AQMD received a $150,957 award from CARB to further demonstrate diesel particulate filter (DPF) technologies in locomotives. This action is to recognize $150,957 from CARB and execute a contract with Caterpillar, Inc. to demonstrate a DPF technology on a switch locomotive. On February 5, 2010, the Board recognized $100,000 from the U.S. EPA and awarded $25,000 to MotivePower, Inc. to assist in the design and optimization of a selective catalytic reduction system on a Metrolink passenger locomotive. Since then, staff has worked with MotivePower to execute the contract. However, the contract negotiation was not completed by the end of FY 2009-10. This action is to reappropriate funds from the Undesignated Fund Balance and reissue the existing award to MotivePower.
   
   Mayor Yates asked for clarification on the amount Pacific Harbor Lines (PHL) would be contributing to the demonstration project and expressed concern that PHL was not contributing any funds to the project.  Staff responded that, while PHL was not contributing to the demonstration program, they have contributed to the purchase of the locomotive being used in the program and have been active in the past using their funds in upgrading their fleet to lower emitting locomotives. 
   
   Councilmember Mitchell expressed support for the project because through this demonstration program, the PHL fleet would become substantially cleaner than it is today. 
   
   Chairperson Gonzales requested and received clarification from staff on the amount of the Engine, Fuel, and Emissions Engineering contract ($75,000) and the amount of PM reductions (84%) that would be realized by upgrading PHL locomotive with the demonstration technology (a new engine equipped with a diesel particulate filter).   
   
   Moved by Mitchell; seconded by Burke; unanimously approved. 
   
   ITEM FOR DISCUSSION ONLY
    
8. Report on Natural Gas Fueling Infrastructure to Support the Implementation of Rule 1193 (presentation only)
   
   Staff will present existing and planned enhancement of the natural gas infrastructure in this basin with recommendations for further improvements.
   
   Staff provided a report on the current state of natural gas refueling in support of the seven AQMD Fleet Rules. Staff indicated that are about 8,500 natural gas vehicles operating in the South Coast Air Basin due to the Fleet Rules. Staff estimates that by 2020 the number would increase to about 12,800. A majority of the vehicles will be transit buses and refuse vehicles. There are about 4,200 natural gas transit buses and 1,800 refuse trucks currently operating in the Basin. As a result of the amendments to Rule 1193, staff estimates that there may be up to 4,500 refuse trucks operating in 2020. Staff indicated that there will be a need to further expand the natural gas refueling network.
   
   Staff indicated that there are over 100 natural gas refueling stations in the South Coast Air Quality Management District. Of the total number of stations, there are around 30 LNG refueling stations and about 60 CNG stations with public access. Of the 60 CNG stations, about 39 are capable of fueling heavy-duty vehicles. Staff presented maps showing the geographic distribution of the natural gas refueling stations indicating that fleets domiciled within a five mile radius of a natural gas station would be required to purchase alternative fueled vehicles. There are gaps in the region where natural gas stations are not within five miles. As such, a fleet could request an exemption from the purchase of natural gas vehicles. In addition, some of the waste haulers prefer to secure new yards to domicile vehicles closer to their service areas. As such, new stations would need to be constructed. Staff indicated that relative to Rule 1193, staff envisioned that the natural gas refueling station network would be constructed at maintenance yards, transfer stations, and landfills.
   
   Staff provided some examples of cost to construct natural gas stations with fuel throughput ranging from 100,000 diesel gallon equivalents (dge) per year to 400,000 dge per year. The costs range from around $800,000 to around $1.3 million. Staff indicated that the California Energy Commission (CEC) has been providing grants for natural gas stations, several to refuse fleets. In addition, CEC is providing funding to help construct a bio-gas to LNG production plant located in Simi Valley. The MSRC has been funding the expansion of alternative-fueled vehicles. In the latest solicitation, the MSRC received 32 project proposals of which five were from refuse fleets. The MSRC program was oversubscribed suggesting a need to continue expansion of the natural gas refueling network.
   
   Staff concluded with discussions of future activities. Staff will continue to evaluate the natural gas refueling network capacity and the need to further expand the refueling network. In addition, staff will work through the Rule 1193 Implementation Working Group to solicit input from stakeholders on refueling infrastructure needs. As a result of the evaluation and input, staff will bring for the Board’s consideration possibly releasing a solicitation for new or expanded natural gas refueling stations.
   
   Committee members commented on the need for the infrastructure. A question was asked whether natural gas engines are zero emissions. Staff indicated that there are emissions, but lower than the diesel-powered engines. In addition, there are greenhouse gas benefits with the use of the natural gas engines compared to diesel-powered engines. Councilmember Mitchell commented on the station conversions. She asked whether the natural gas stations will become stranded assets given the cost of the stations and the need to go to ever cleaner fuels. Staff indicated that in prior solicitations, additional points were given to projects that contained footprints for the installation of hydrogen fueling. Staff believes that the natural gas stations can serve as a transition to a hydrogen fueling network.
   
   Committee Chair Gonzales commented that in the future city planning commissions should include provisions for alternative fuels in the construction of traditional gasoline stations and/or use existing non-operating facilities, i.e., car washes, for constructing alternative fuel stations with the aim of bringing the cost down.
   
   Mayor Yates mentioned that signage on roads and freeways should be more visible to locate alternative fuel stations.  

Public Comment Period

With regard to Agenda Item #1 Board Assistant Nicole Nishimura inquired, on behalf of Board Member Dr. Joseph K. Lyou, about the AQMD’s policy to contract with companies that are not in compliance with the AQMD regulations. Specifically, Pick Your Part Auto Recyclers, was issued a Notice of Violation in June 2010 for a fire at their Wilmington facility in relation to a Lawnmower Exchange Program event. Pick Your Part has provided pick-up and disposal of old mowers at the exchange events. Staff indicated that AQMD reviews the background of companies it deals with to ensure there is not a recurring history of violations. In this particular case with Pick Your Part, the company has provided good service at previous events, has not had previous violations regarding these services, and is working toward resolving the current NOV.

Regarding Agenda Item #2 Nicole Nishimura asked whether the AQMD would be using any of the administrative funds that are being allocated to CALSTART to administer the AQMD HVIP on behalf of the AQMD. Staff confirmed that all of the administrative funds being allocated to CALSTART are from the Clean Fuels Fund and will be exclusively for the costs incurred by CALSTART to develop, implement, and deploy the program on behalf of the AQMD.

Other Business – There was no other business. 

The next meeting will be September 24. The meeting was adjourned at 1:25 p.m.

Attachment (DOC, 29k)

A - Attendance