BOARD MEETING DATE: September 10, 2010
AGENDA NO. 4

PROPOSAL:

Adopt Resolution and Recognize Funds from CARB, Transfer Funds and Appropriate Funds to Execute New Contract, and Amend Existing Contract for Demonstration of Aftertreatment Technology for Locomotives

SYNOPSIS:

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 adopt a resolution with CARB, 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.

COMMITTEE:

Technology, July 23, 2010, Recommended for Approval

RECOMMENDED ACTIONS:

1. Adopt Resolution and recognize $150,957 in grant funds from CARB in the General Fund to demonstrate diesel particulate filter technology on a switch locomotive.

2. Transfer $78,487 from Rule 1309.1 Priority Reserve to the FY 2010-11 Science & Technology Advancement Budget, Professional, and Special Services Account.

3. Appropriate $150,957 from the Undesignated Fund Balance to the FY 2010-11 Science & Technology Advancement Budget, Professional, and Special Services Account.

4. Authorize the Chairman to execute a contract with Caterpillar, Inc. to cosponsor the development and demonstration of a diesel particulate filter technology on a switch locomotive in an amount not to exceed $229,444 from the Science & Technology Advancement Budget, Professional, and Special Services Account.

5. Appropriate $25,000 from the Undesignated Fund Balance to the FY 2010-11 Science & Technology Advancement Budget, Professional, and Special Services Account.

6. Authorize the Executive Officer to amend the contract with MotivePower, Inc., originally approved on February 5, 2010, to assist in the design and optimization of the selective catalytic reduction system on a Metrolink passenger locomotive for an amount not to exceed $25,000 from the Science & Technology Advancement Budget, Professional, and Special Services Account.
   

Barry R. Wallerstein, D.Env.
Executive Officer

Background

CARB Air Quality Improvement Program (AQIP) – Demonstration of DPF Project

Switch locomotives are primarily operated within the State and are estimated by CARB to emit over 9 tons per day of NOx and 0.2 ton per day of PM emissions. Selective catalytic reduction (SCR) and diesel particulate filter (DPF) technologies are capable of reducing these emissions. Additional field demonstrations would provide further information on the use of such technologies and could lead to early commercialization. On June 23, 2010, the AQMD received a grant award from CARB under the AB 118 AQIP Advanced Locomotive Aftertreatment Technology Demonstration Project. The grant award of $150,957 would be to demonstrate a DPF technology on a switch locomotive diesel engine. At the time CARB released its solicitation for the AQIP project, staff worked with Caterpillar, Inc. to identify potential locomotive engine emission reduction projects. The proposed funding request submitted to CARB was for $229,444. With the CARB award, there will be a shortfall in funding of $78,487.

MotivePower, Inc.

On February 5, 2010, the Board recognized $100,000 in a grant from U.S. EPA, of which $75,000 was awarded to Engine, Fuel, and Emissions Engineering, Inc. (EF&EE) to develop and demonstrate a redesigned SCR system on a Metrolink passenger locomotive. At the same time, the Board awarded the remaining $25,000 to MotivePower, Inc. (MotivePower) to assist EF&EE in the redesign and optimization stage of the demonstration project. The U.S. EPA funds were transferred to the FY 2009-10 Science & Technology Advancement Budget, Professional, and Special

Services Account. While a contract has been executed with EF&EE prior to the end of the fiscal year, contract negotiation with MotivePower was not completed by the end of the fiscal year. As such, a Board action is required to reappropriate $25,000 from the Undesignated Fund Balance to the FY 2010-11 Science and Technology Advancement Budget and reissue the award to MotivePower.

Proposal

CARB Air Quality Improvement Program (AQIP) – Demonstration of DPF Project

The proposed project is to assess the reliability and emission reduction potential of DPF technology on a switch locomotive diesel engine.

Caterpillar, Inc. proposes to select a switch locomotive that is expected to be certified to the U.S. EPA Tier 3 switch locomotive emissions standards. Relevant engine and locomotive data will be used to fabricate a DPF suitable for switch locomotive applications. The fabricated DPF will then be installed on the exhaust system of the locomotive. The locomotive will be tested to establish the emission reduction potential of the relatively new DPF. The locomotive will then be operated in normal switch service in the Pacific Harbor Lines fleet at the Ports of Los Angeles and Long Beach for 3,000 hours. During operation, the DPF will be examined to check for substrate wear, ash, loose elements, structural integrity, and other maintenance issues. The locomotive will be retested at 1,500 and 3,000 hours to evaluate the performance, reliability, and emissions-reduction potential of the DPF technology.

Caterpillar, Inc. has agreed to administer a project to develop and demonstrate the DPF system for reduction of PM emissions from a switch locomotive diesel engine. In addition to the grant from the CARB, staff is proposing to cofund in an amount not to exceed $78,487 to cover the shortfall from the grant award, and Caterpillar, Inc. will provide $229,444 in-kind contribution to conduct the development and demonstration program. The funding from AQMD is proposed to come from the Rule 1309.1 Priority Reserve. There are sufficient funds in the Priority Reserve to cover the requested funding of $78,487.

In accepting CARB’s grant, CARB has requested that AQMD adopt a resolution agreeing to the terms and conditions of the grant, including administrative, financial, monitoring, and reporting responsibilities. The AQMD’s role as the administrative lead will be similar to our participation in other state and federal grant programs for funding research and demonstration projects. This action is to adopt a resolution accepting the terms and conditions of CARB’s AB 118 AQIP Advanced Technology Demonstration Project requirements, recognize $150,957 from CARB, and execute a contract with Caterpillar, Inc. to demonstrate a DPF technology on a switch locomotive.   

MotivePower, Inc.

This action is to appropriate $25,000 from the Undesignated Fund Balance and reissue the original award to MotivePower. The original award was funded under the Science & Technology Advancement Budget, Professional, and Special Services Account, which required that the award be executed before the end of FY 2009-10. Staff has been working to execute a contract with MotivePower. However, the contract negotiation was not completed by the end of FY 2009-10. Staff anticipates completion of the contract before the end of September 2010. As such, staff proposes that funds be appropriated from the Undesignated Fund Balance to the FY 2010-11 Science and Technology Advancement budget and reissue the original award to MotivePower.

Benefits to AQMD

The proposed project is included in the 2009 Technology Advancement Plan Update under the category, “Emission Control Technologies: Develop and Demonstrate Advanced Aftertreatment Technologies.” The AQMP relies upon the expedited implementation of advanced technologies in Southern California to achieve air quality standards and to continue reductions in air toxic exposure, and this project will help the AQMD to achieve its clean air goals.

The use of DPF on a switch locomotive is expected to reduce PM emissions by about 64 percent or approximately 0.5 ton per year per locomotive. While this project will demonstrate DPF on a switch locomotive, transferring the technology to locomotives in line-haul service will result in similar reduction of PM emissions, reducing the health risks associated with diesel PM from locomotives in California, especially at Ports and railyards.

Sole Source Justification

Section VII.C.2 of the Policy for Clean Air Incentive Contracts identifies provisions under which a sole source award may be justified. This request for a sole source award is made under provision C.2.d: Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interest of the AQMD. This request for a sole source award is made under provision C.2.c(3): the contractor has ownership of key assets required for project performance, and C.2.d(1): projects involving cost sharing by multiple sponsors. In addition, Caterpillar, Inc. is identified as the Technology Demonstrator for the CARB AQIP Advanced Locomotive Aftertreatment Technology Demonstration Project.

Caterpillar, Inc. is an industry leader in the design and manufacture of diesel engines and a wide range of exhaust aftertreatment technologies including SCR and DPF. In addition, Caterpillar, Inc. services and remanufactures locomotives with advanced aftertreatment technologies and brings unique experience and capabilities to the proposed project.

The details of the cost-share provided by CARB and Caterpillar, Inc. are shown in the following section.

Resource Impacts

The total cost for the execution of the new contract is estimated to be $458,888, of which AQMD’s cost share shall not exceed $78,487 in addition to a total of $150,957 in cofunding to be received from CARB. Caterpillar, Inc. will provide the remaining $229,444 in-kind contribution.

The total estimated cost-share for this project is provided below:

Additionally, the total cost for the amendment of the existing contract shall not exceed $25,000. Funding for the execution of the new contract and the amendment of the existing contract shall not exceed $254,444 from the FY 2010-11 Science & Technology Advancement Budget, Professional, and Special Services Account.

Attachment (DOC, 30k)

A Resolution of the South Coast Air Quality Management District Board Recognizing Funds and Accepting the Terms and Conditions of CARB’s AB 118 AQIP Advanced Technology Demonstration Project Requirements