MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BAY AREA AIR QUALITY MANAGEMENT DISTRICT BOARD ROOM 939 ELLIS STREET SAN FRANCISCO, CALIFORNIA THURSDAY, JULY 22, 1999 9:30 A.M. VICKI L. OGELVIE, C.S.R. LICENSE NO. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT ALAN C. LLOYD, PH.D., CHAIRMAN JOSEPH C. CALHOUN MARK DESAULNIER DR. WILLIAM FRIEDMAN LYNNE T. EDGERTON MATTHEW R. MCKINNON BARBARA RIORDAN STAFF: MICHAEL KENNY, EXECUTIVE DIRECTOR TOM CACKETTE, CHIEF DEPUTY EXECUTIVE OFFICER MIKE SCHEIBLE, DEPUTY EXECUTIVE OFFICER LYNN TERRY, DEPUTY EXECUTIVE OFFICER KATHLEEN WALSH, GENERAL COUNSEL BRUCE OULREY, OMBUDSMAN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X --O0O-- PAGE PROCEEDINGS 1 CALL TO ORDER 1 PLEDGE OF ALLEGIANCE 1 ROLL CALL 1 OPENING REMARKS BY CHAIRMAN LLOYD 1 AGENDA ITEMS: 99-6-1 PUBLIC HEARING TO CONSIDER APPROVAL OF A REVISION TO THE OZONE STATE IMPLEMENTATION PLAN FOR THE SAN FRANCISCO BAY AREA INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 2 STAFF PRESENTATION: MIKE KENNY 4 KIM HEROY-ROGALSKI 5 PUBLIC COMMENT: MR. J. NEVIN 5 CINDY TUCK 23 SUSAN SHARA 25 GREG PERRY 27 JOHN HOLTZCLEW 31 99-6-2 PUBLIC MEETING TO CONSIDER PROPOSED GUIDANCE FOR POWER PLANT SITING AND BEST AVAILABLE CONTROL TECHNOLOGY INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 46 STAFF PRESENTATION: MIKE KENNY 48 MICHAEL TOLLSTRUP 50 BRUCE OULREY 63 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (CONTINUED) --O0O-- PAGE PUBLIC COMMENTS: CHRIS TOOKER 73 TIM SHIPPY 90 AFTERNOON SESSION 102 GARY RUBENSTEIN 102 ALLAN BEDWELL 127 LIZANNE REYNOLDS 160 SHANNON BROOME 161 CHUCK SOLT 167 JACK BRUNTON 172 RICHARD SMITH 174 ANDREW WASHINGTON 179 99-6-3 PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE CLEAN FUELS REGULATIONS REGARDING CLEAN FUEL OUTLETS INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 199 STAFF PRESENTATION: MIKE KENNY 200 ERIK WHITE 201 BRUCE OULREY 207 PUBLIC COMMENT: STEVEN SMITH 210 ROLAND WANG 215 99-6-4 PUBLIC MEETING TO CONSIDER A STATUS REPORT ON AIR POLLUTION CONTROL ENFORCEMENT IN CALIFORNIA INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 221 STAFF PRESENTATION: MIKE KENNY 223 KATHLEEN WALSH 223 GREG BINDER 229 CHUCK BEDDOW 241 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v I N D E X (CONTINUED) --O0O-- PAGE PUBLIC COMMENT: CHARLIE PETERS 256 OPEN SESSION TO PROVIDE AN OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO ADDRESS THE BOARD ON SUBJECT MATTERS WITHIN THE JURISDICTION OF THE BOARD 262 ADJOURNMENT 262 CERTIFICATE OF REPORTER 263 --O0O-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --O0O-- 3 CHAIRMAN LLOYD: GOOD MORNING. THE JULY 22, 1999 4 PUBLIC MEETING OF THE AIR RESOURCES BOARD WILL NOW COME TO 5 ORDER. 6 I WOULD LIKE TO ASK MR. MCKINNON TO LEAD US IN THE 7 PLEDGE OF ALLEGIANCE. 8 (THEREUPON THE PLEDGE OF ALLEGIANCE WAS RECITED.) 9 CHAIRMAN LLOYD: THANK YOU. 10 WOULD THE CLERK OF THE BOARD PLEASE CALL THE ROLL. 11 MS. HUTCHENS: CALHOUN. 12 BOARD MEMBER CALHOUN: HERE. 13 MS. HUTCHENS: DESAULNIER. 14 BOARD MEMBER DESAULNIER: HERE. 15 MS. HUTCHENS: EDGERTON. 16 BOARD MEMBER EDGERTON: HERE. 17 MS. HUTCHENS: DR. FRIEDMAN. 18 BOARD MEMBER FRIEDMAN: HERE. 19 MS. HUTCHENS: MATTHEW MCKINNON. 20 BOARD MEMBER MCKINNON: HERE. 21 MS. HUTCHENS: BARBARA RIORDAN. 22 BOARD MEMBER RIORDAN: HERE. 23 MS. HUTCHENS: ALAN LLOYD. 24 CHAIRMAN LLOYD: HERE. 25 FIRST OF ALL, I WOULD LIKE TO THANK THE BAY AREA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 DISTRICT FOR HOSTING OUR MEETING IN SAN FRANCISCO THIS 2 MORNING, AND I WOULD PARTICULARLY LIKE TO THANK THE EXECUTIVE 3 OFFICER FOR THE GRACIOUS HOSTING OF THIS AND FOR ALSO MEETING 4 WITH US LAST NIGHT. 5 I WOULD ALSO CONGRATULATE YOU ON TURNING OUT SUCH 6 WONDERFUL WEATHER AS WE DROVE IN. WE REALLY APPRECIATE THE 7 POWER THAT YOU HAVE TO TURN IT ON. 8 WE ARE ALSO PLEASED, THIS IS OUR FIRST AWAY FROM 9 SACRAMENTO MEETING IN 1999, WE ARE HOPING TO DO THIS AS A 10 CONSTANT PATTERN TO MOVE AROUND THE STATE, SO I THINK IT IS 11 VERY GOOD FOR US TO BE ABLE TO SEE THE LOCAL DISTRICTS AND 12 VICE VERSA. 13 WE HAVE ALSO HAVE A SPECIAL REASON FOR BEING HERE 14 TODAY, WHICH IS TO CONSIDER THE BAY AREA'S RECENT REVISION TO 15 THE STATE IMPLEMENTATION PLAN FOR OZONE. 16 SO, I THINK WITHOUT FURTHER ADIEU, WE WILL SEE TO 17 THAT. I WOULD LIKE TO LOOK AT AGENDA ITEM 99-6-1. 18 I WOULD LIKE TO REMIND ANYONE IN THE AUDIENCE WHO 19 WISHES TO TESTIFY ON TODAY'S AGENDA ITEMS TO PLEASE SIGN UP 20 WITH THE CLERK OF THE BOARD, AND IF YOU HAVE A WRITTEN 21 STATEMENT, PLEASE GIVE 20 COPIES, IF YOU CAN, TO, AGAIN, THE 22 BOARD CLERK. THAT WILL HELP US IN THAT PROCESS. 23 THE FIRST ITEM ON THE AGENDA IS 99-6-1, PUBLIC 24 HEARING TO CONSIDER REVISIONS TO THE OZONE STATE 25 IMPLEMENTATION PLAN, OR SIP, FOR THE SAN FRANCISCO BAY AREA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 LIKE MANY OF THE PLANS THAT COME BEFORE THE BOARD, 2 THIS HAS A VERY NEAR TERM FOCUS, DESIGNED TO ASSURE THAT THE 3 BAY AREA WILL ATTAIN THE ONE-HOUR FEDERAL OZONE STANDARD BY 4 NOVEMBER OF NEXT YEAR. 5 SO, WE ARE LOOKING AT WHAT CAN BE ACCOMPLISHED 6 ESSENTIALLY IN ONE YEAR'S TIME. OBVIOUSLY, THAT IS GOING TO 7 BE A CHALLENGE. 8 THE BAY AREA, I THINK, IS UNUSUAL IN THAT ITS PEAK 9 OZONE LEVELS HAVE HOVERED RIGHT AT OR JUST BELOW THE FEDERAL 10 OZONE STANDARD FOR A NUMBER OF YEARS, AND IT IS CHALLENGING 11 TO IDENTIFY JUST THE RIGHT COMBINATION OF MEASURES FOR 12 FEDERAL ATTAINMENT. 13 I THINK THE OTHER PART ABOUT THE BAY AREA THAT 14 SHOULD BE WORTH RECOGNIZING, WHICH IS THE DISTRICT IS BLESSED 15 WITH AN UNUSUAL DEGREE OF CIVIC AND BUSINESS PARTICIPATION IN 16 ITS PLANNING EFFORTS. 17 IT IS A MODEL WITH THEIR "SPARE THE AIR" CAMPAIGN, 18 MULTIPLE ACTIVITIES AND COMPANIES HELPING TO CURTAIL 19 EMISSIONS ACTIVITIES DURING OZONE EPISODES, WHICH IS 20 INDICATIVE OF THE WHOLE REGION'S COMMITMENT TO MEETING PUBLIC 21 HEALTH GOALS. 22 THIS IS A VERY LAUDABLE EFFORT. 23 I THINK THIS PARTICIPATION IS EXEMPLARY AND 24 PRECISELY THE SORT OF PROGRAM THAT WE WANT TO ENCOURAGE AT 25 THE LOCAL LEVEL. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 I THINK WE WILL SAY SOME MORE ABOUT THAT LATER. AT 2 THIS POINT, I WOULD LIKE TO ASK MR. KENNY, WOULD YOU 3 INTRODUCE THE ITEM AND BEGIN THE STAFF PRESENTATION. 4 AGAIN, MR. KENNY, I CONGRATULATE YOU FROM GETTING 5 BACK FROM WASHINGTON. HE WAS OUT THERE YESTERDAY NEGOTIATING 6 ON SOME OF THE OPTIONS WITH SENATOR FEINSTEIN, AND HE IS WITH 7 US THIS MORNING. 8 MR. KENNY: IT IS A FRONT. 9 THANK YOU, MR. CHAIRMAN AND MEMBERS OF THE BOARD. 10 GOOD MORNING. 11 WE ALL CELEBRATED IN 1995 WHEN THE BAY AREA BECAME 12 THE FIRST MAJOR URBAN AREA IN CALIFORNIA TO BE FORMALLY 13 LABELED WITH ATTAINMENT STATUS FOR THE FEDERAL ONE-HOUR OZONE 14 STANDARD, BASED ON FOUR YEARS OF CLEAN DATA. 15 BUT ALMOST BEFORE THE INK WAS DRY ON THAT ACTION, 16 WE WERE REMINDED RECENTLY THAT ATTAINMENT STATUS CAN BE 17 TENUOUS. 18 THE BAY AREA RECORDED ELEVEN DAYS OVER THE FEDERAL 19 STANDARD IN 1995, FOLLOWED BY EIGHT DAYS IN 1996. THESE HIGH 20 OZONE LEVELS PROMPTED US EPA TO RETURN THE AREA TO 21 NONATTAINMENT. 22 TO MEET THE NEW ATTAINMENT DATE OF NOVEMBER 2000, 23 THIS PLAN BY NECESSITY RELIES PRIMARILY ON MEASURES THAT ARE 24 ALREADY IN PLACE. IN FACT, NEARLY 90 PERCENT OF THE TOTAL 25 EMISSION REDUCTIONS NEEDED FOR ATTAINMENT COME FROM ARB'S PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 ADOPTED REGULATIONS FOR MOBILE SOURCES, FUELS AND CONSUMER 2 PRODUCTS. 3 WHEN THE STAFF BRINGS NEW STATEWIDE MEASURES TO YOU 4 FOR CONSIDERATION, THE FOCUS IS OFTEN ON SOUTHERN CALIFORNIA, 5 BUT THIS PLAN ILLUSTRATES HOW IMPORTANT THE BOARD'S PROGRAMS 6 ARE TO THE REST OF THE STATE AS WELL. 7 THE DISTRICT'S ELEMENT OF THE PLAN INCLUDES ITS 8 EXISTING PROGRAMS, BUT ALSO ANOTHER 20 TONS PER DAY OF NEW 9 HYDROCARBON REDUCTIONS AS WELL AS VOLUNTARY MEASURES. 10 WHILE STAFF WILL DISCUSS THE TECHNICAL DIFFICULTIES 11 IN IDENTIFYING A SPECIFIC EMISSION REDUCTION TARGET, WE 12 BELIEVE THAT THE DISTRICT DID THE BEST JOB IT COULD GIVEN THE 13 CIRCUMSTANCES OF THE REDESIGNATION REQUIREMENTS. 14 AND WITH THAT, BEFORE I INTRODUCE THE AIR RESOURCES 15 BOARD STAFF TO MAKE THE PRESENTATION, I WOULD LIKE TO 16 INTRODUCE MR. JIM NEVIN, CHAIRMAN OF THE BAY AREA AIR QUALITY 17 MANAGEMENT DISTRICT BOARD. 18 MR. NEVIN: THANK YOU, MIKE. 19 FIRST OF ALL, CHAIRMAN LLOYD, MEMBERS OF THE BOARD, 20 I WOULD LIKE TO WELCOME YOU TO SAN FRANCISCO. I'M THE KID 21 FROM LEFT FIELD, DOWN THERE, DEFENSELESS, BUT IT IS ALWAYS A 22 PLEASURE TO REPRESENT WILLIE BROWN, MAYOR OF SAN FRANCISCO, 23 IN WELCOMING YOU TO THIS GREAT CITY. 24 I FEEL AT HOME, BUT I FEEL LIKE I SHOULD BE UP IN 25 YOUR SEAT, MR. CHAIRMAN, AND I'M KIND OF INSULTED THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 SUPERVISOR DESAULNIER GETS TO KEEP HIS OWN CHAIR AND GETS TO 2 VOTE TWICE. 3 BOARD MEMBER DESAULNIER: IT IS A PLEASURE TO SEE 4 YOU HERE THIS MORNING, TOO. 5 MR. NEVIN: BUT ANYWAY, WELCOME TO SAN FRANCISCO, 6 AND I AM HERE TODAY TO INTRODUCE THE BAY AREA'S 1999 OZONE 7 ATTAINMENT PLAN FOR YOUR CONSIDERATION. 8 WE ASK YOU TO APPROVE THIS PLAN AND THEN TRANSMIT 9 IT TO THE US EPA AS PART OF THE STATE IMPLEMENTATION PLAN. 10 WE IN THE BAY AREA THINK WE HAVE WORKED VERY HARD 11 SINCE OUR AGENCY WAS FORMED BACK IN 1955 TO REDUCE AIR 12 POLLUTION AND TO ENSURE HEALTHY AIR FOR OUR RESIDENTS AND FOR 13 OUR DOWNWIND NEIGHBORS. WE ARE PROUD OF OUR RECORD OF 14 SUCCESS IN ALL OF THESE EFFORTS. 15 MUCH OF THAT SUCCESS WAS DUE TO OUR PARTNERSHIP 16 WITH YOUR AGENCY AND THE EFFICACY OF YOUR PROGRAMS TO REDUCE 17 EMISSIONS FROM MOTOR VEHICLES AND OTHER SOURCES UNDER YOUR 18 JURISDICTION. 19 WITH FIVE YEARS OF ATTAINMENT IN THE EARLY 1990'S, 20 WE THOUGHT WE HAD ACHIEVED THE FEDERAL OZONE TARGET, AND WE 21 SAW THE MORE STRINGENT STATE OZONE STANDARDS AS OUR NEXT 22 MILESTONE IN OUR CONTINUING PATH TO CLEANER AND CLEANER AND 23 CLEANER AIR, BUT WE SUFFERED SETBACKS IN RECENT YEARS IN OUR 24 EFFORTS TO REDUCE THE OZONE LEVELS. 25 VIOLATIONS OF THE NATIONAL ONE-HOUR STANDARD IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 1995 AND 1996, EPA REDESIGNED THE BAY AREA BACK TO 2 NONATTAINMENT STATUS WITH NEW PLANNING AND ATTAINMENT 3 DEADLINES. 4 WE ARE CONFIDENT THAT THE EMISSION RATES FOR THE 5 OZONE PRECURSORS CONTINUE TO CLIMB, AND WE EXPECT TO 6 ESTABLISH OUR ATTAINMENT STATUS IN THE NEAR FUTURE. 7 THE OZONE ATTAINMENT PLAN THAT YOU ARE CONSIDERING, 8 THAT ARE AT YOUR DESKS TODAY, IS THE FORMAL AND QUANTIFIED 9 STATEMENT OF OUR FUTURE PATH. 10 SINCE EPA'S REOXYGENATION ACTION, WE HAVE WORKED 11 VERY HARD TO PREPARE WHAT WE THINK IS A GOOD PLAN TO MEET THE 12 COMPRESSED SCHEDULES SET BY THE EPA. OUR COLLEAGUE AGENCY 13 PARTNERS, THE METROPOLITAN TRANSPORTATION COMMISSION AND ALSO 14 THE ASSOCIATION OF BAY AREA GOVERNMENTS, HAVE COOPERATED IN 15 THIS PLAN DEVELOPMENT PROCESS. 16 WE ARE VERY OPEN AS FAR AS OUR PARTICIPATORY 17 PROCESS, AND MANY WORKSHOPS, MAILINGS AND WEBSITE WITH 18 CONSOLIDATED COMMUNICATIONS WITH ALL INTERESTED PARTIES TOOK 19 PLACE WHO RECEIVED AND WHO RESPONDED TO MANY, MANY COMMENTS. 20 THE PLAN BEFORE YOU TODAY MEETS ALL THE 21 REQUIREMENTS OF THE EPA FEDERAL REGISTER NOTICE OF JULY 10, 22 1998. WE HAVE PREPARED THE BEST PLAN POSSIBLE, WE BELIEVE, 23 UNDER OUR UNIQUE CIRCUMSTANCES AND THE SCHEDULE THAT WAS SET 24 BY THE EPA. 25 IT INCLUDES TEN STATIONARY SOURCE MEASURES, ONE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 MOBILE SOURCE MEASURE AND TWO VOLUNTARY MEASURES. IT RETAINS 2 ALL OF THE TRANSPORTATION CONTROL MEASURES THAT ARE STILL 3 RELEVANT IN THE STATE IMPLEMENTATION PLAN, OR THE SIP. 4 I BELIEVE THIS PLAN IS AN AMBITIOUS BUT AT THE SAME 5 TIME REALISTIC APPROACH IN OUR CONTINUING EFFORT TO PROVIDE 6 CLEAN AIR FOR THE BAY AREA AND FOR OUR NEIGHBORS. 7 AS PART OF THE PLANNING PROCESS, WE COMPLIED WITH 8 ALL APPLICABLE PUBLIC NOTICE AND PUBLIC PARTICIPATION 9 REQUIREMENTS. 10 WE PREPARED A COMPREHENSIVE INITIAL STUDY TO ASSESS 11 POTENTIAL ADVERSE ENVIRONMENTAL IMPACTS OF THE PLAN AND 12 PREPARED A NEGATIVE DECLARATION TO FULFILL OUR OBLIGATION 13 UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. 14 I WANT TO ACKNOWLEDGE AND THANK AGAIN ALL OF THESE 15 PEOPLE, PARTICULARLY THE ARB STAFF MEMBERS, MIKE, AND ALL 16 THOSE THAT PARTICIPATED IN THE PLAN DEVELOPMENT PROCESS. 17 WE RECOMMEND THAT YOU APPROVE THIS PLAN AND 18 TRANSMIT IT AS EXPEDITIOUSLY AS POSSIBLE TO THE EPA, AND I 19 THANK YOU FOR YOUR TIME THIS MORNING, AND AGAIN, WELCOME TO 20 SAN FRANCISCO BAY AREA. 21 CHAIRMAN LLOYD: THANK YOU VERY MUCH, JIM. 22 MR. KENNY: WITH THAT, NOW I WOULD LIKE TO 23 INTRODUCE MS. KIM HEROY-ROGALSKI TO BEGIN THE STAFF 24 PRESENTATION. 25 MS. HEROY-ROGALSKI: THANK YOU, MR. KENNY. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 GOOD MORNING, CHAIRMAN LLOYD AND MEMBERS OF THE 2 BOARD. 3 BOARD MEMBER DESAULNIER: ONE OF THE CHARMING 4 ASPECTS. 5 MS. HEROY-ROGALSKI: OKAY. LET ME GET STARTED 6 AGAIN, FOR CONSIDERATION TODAY, WE ARE PRESENTING THE 1999 7 SAN FRANCISCO BAY AREA OZONE ATTAINMENT PLAN FOR THE FEDERAL 8 ONE-HOUR OZONE STANDARD. 9 WE ARE ASKING YOU TO APPROVE THIS PLAN AS A 10 REVISION TO CALIFORNIA STATE IMPLEMENTATION PLAN OR SIP. 11 IN MY PRESENTATION TODAY, I WILL FIRST GIVE SOME 12 BACKGROUND ON AIR QUALITY IN THE BAY AREA, I'LL DESCRIBE THE 13 AREA'S STATUS WITH RESPECT TO THE FEDERAL OZONE STANDARDS AND 14 EXPLAIN WHY THIS PLAN WAS REQUIRED. 15 THEN I'LL DESCRIBE OUR EVALUATION OF THE PLAN 16 AGAINST THE REQUIREMENTS THE PLAN HAS TO MEET AND DISCUSS OUR 17 CONCLUSIONS AND RECOMMENDATION. 18 BEFORE DISCUSSING THE BAY AREA'S AIR QUALITY, I 19 WOULD LIKE TO SET THE STAGE BY SHOWING THE TRENDS IN 20 POPULATION, TRAVEL AND EMISSIONS SINCE 1980. 21 POPULATION IN THE BAY AREA HAS INCREASED FROM ABOUT 22 5 MILLION IN 1980 TO NEARLY 7 MILLION TODAY. VEHICLE TRAVEL 23 HAS INCREASED AT AN EVEN FASTER PACE. 24 HOWEVER, EVEN DESPITE THIS GROWTH, EMISSION OF 25 POLLUTANTS THAT FORM OZONE HAVE DECREASED OVER 40 PERCENT IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 THE SAME TIME FRAME AND WILL CONTINUE TO DECREASE INTO THE 2 FUTURE. 3 NOW, LET'S LOOK AT THE MEASURED AIR QUALITY OVER 4 THE LAST 15 YEARS. THIS SLIDE SHOWS THE NUMBER OF DAYS THAT 5 THE BAY AREA EXCEEDED THE STATE AND FEDERAL OZONE STANDARDS. 6 BY WAY OF REFERENCE, THE FEDERAL ONE-HOUR OZONE 7 STANDARD IS 12 PARTS PER HUNDRED MILLION, WHILE THE MORE 8 HEALTH PROTECTIVE STATE ONE-HOUR STANDARD IS SET AT 9. THE 9 STATE STANDARD PROVIDES ABOUT THE SAME LEVEL OF PROTECTION AS 10 THE NEW FEDERAL EIGHT-HOUR OZONE STANDARD. 11 AIR QUALITY HAS GENERALLY IMPROVED IN THE BAY AREA 12 SINCE THE 1980'S, ALTHOUGH THERE IS VARIABILITY FROM YEAR TO 13 YEAR AS SHOWN BY THE SLIDE. 14 THUS FAR IN 1999, THE BAY AREA HAS EXCEEDED THE 15 FEDERAL OZONE STANDARD ON TWO DAYS. BECAUSE THE BAY AREA IS 16 CLOSE TO THE STANDARD, EVEN SMALL WEATHER VARIATIONS CAN MAKE 17 THE DIFFERENCE BETWEEN MEETING OR EXCEEDING THE STANDARD. 18 OVERALL, THE RECENT EXCEEDENCE TELL US THAT THE BAY 19 AREA WILL NEED TO CONTINUE EMISSION REDUCTION UNTIL IT CAN 20 ATTAIN UNDER ALL WEATHER CONDITIONS. 21 THE VARIATIONS IN AIR QUALITY OVER THE LAST DECADE 22 IN THE BAY AREA THAT YOU SAW REFLECTED ON THE LAST SLIDE ARE 23 REFLECTED IN THE BAY AREA'S OFFICIAL ATTAINMENT STATUS FOR 24 THE FEDERAL OZONE STANDARD. 25 FOLLOWING THE 1990 AMENDMENTS TO THE FEDERAL CLEAN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 AIR ACT, US EPA DESIGNATED THE BAY AREA AS NONATTAINMENT WITH 2 A MODERATE CLASSIFICATION. 3 THEN IN 1995, AFTER FIVE YEARS OF NO VIOLATIONS FOR 4 THIS STANDARD, US EPA REDESIGNED THE BAY AREA TO ATTAINMENT. 5 BASED ON THE EXCEEDENCE THAT OCCURRED IN 1995 AND 6 1996, THE US EPA RETURNED THE BAY AREA TO NONATTAINMENT. 7 LAST SUMMER AND THIS SUMMER THE REGION HAS EXCEEDED THE 8 STANDARD AGAIN. 9 THE PLAN TO ATTAIN THE FEDERAL ONE-HOUR OZONE 10 STANDARD THAT IS BEFORE YOU TODAY IS THE MOST RECENT AIR 11 QUALITY PLAN FOR THE BAY AREA. THE DISTRICT'S LAST FEDERAL 12 PLAN WAS THE 1994 OZONE MAINTENANCE PLAN. 13 THE MAINTENANCE PLAN WAS BASED ON THE EXPECTATION 14 THAT AS LONG AS EMISSION STAYED BELOW 1990 LEVELS, THE AREA 15 WOULD CONTINUE TO ATTAIN THE STANDARD. 16 ALTHOUGH TOTAL EMISSIONS HAVE CONTINUED TO DROP 17 SINCE 1990, THE MAINTENANCE PLAN STRATEGY WAS INSUFFICIENT. 18 THE REQUIREMENT FOR A 1999 SIP REVISION IS THE RESULT. 19 PLANS REQUIRED BY THE CALIFORNIA CLEAN AIR ACT 20 FOCUS ON ENSURING CONTINUED PROGRESS, PLANS ALL FEASIBLE 21 MEASURES RATHER THAN MEETING SET ATTAINMENT DEADLINES LIKE 22 THE FEDERAL PLAN. 23 THE 1997 CLEAN AIR PLAN, OR CAP, IS THE MOST RECENT 24 CALIFORNIA PLAN FOR THE BAY AREA. SOME OF THE VOC MEASURES 25 IN 1997 CAP ARE INCLUDED IN TODAY'S PLAN. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 THOSE NOT INCLUDED ARE MEASURES THAT WILL NOT BE 2 IMPLEMENTED BEFORE 2,000 OR THAT WILL PROVIDE ONLY MINIMAL 3 EMISSION REDUCTIONS. 4 OKAY. LET'S TAKE A CLOSER LOOK NOW AT THE 1999 5 SIP. 6 WHEN US EPA RETURNED THE BAY AREA TO NONATTAINMENT 7 LAST YEAR, THE AGENCY DESIGNED A SPECIFIC STREAMLINE PLANNING 8 REQUIREMENT, ACKNOWLEDGING THAT THIS WAS AN UNUSUAL SITUATION 9 CALLING FOR A CUSTOMIZED APPROACH. 10 THE BAY AREA WAS GIVEN ABOUT A YEAR TO DEVELOP AN 11 ACCELERATED PLAN TO BRING THE REGION INTO ATTAINMENT BY 12 NOVEMBER OF 2000. 13 THE SIP REVISION HAD TO CONTAIN THE 1995 INVENTORY, 14 AN ATTAINMENT ASSESSMENT, CONTROLS, CONTINGENCY MEASURES IN 15 CASE THE AREA FAILED TO ATTAIN THE STANDARD ON SCHEDULE AND 16 FINALLY NEW EMISSION BUDGETS FOR TRANSPORTATION CONFORMITY. 17 I WILL DISCUSS HOW THE PLAN SATISFIES EACH OF THESE 18 REQUIREMENTS. 19 THAT FIRST REQUIREMENT WAS FOR THE DISTRICT TO 20 PROVIDE A 1995 EMISSIONS INVENTORY, WHICH IS SHOWN HERE. 21 THE ON-ROAD MOTOR VEHICLE EMISSIONS MAKE UP THE 22 LARGEST PORTION OF THE EMISSIONS INVENTORY AND ACCOUNT FOR 23 THE MAJORITY OF THE REDUCTIONS AS WELL. 24 THE SOURCES UNDER DISTRICT CONTROL CONTRIBUTED 25 ABOUT ONE-QUARTER TO ONE-THIRD OF THE TOTAL 1995 EMISSIONS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 1995 REPRESENTS THE STARTING POINT OF THE PLAN. US 2 EPA CHOSE 1995 AS THE BASE YEAR, BECAUSE OF THE NEW 3 VIOLATIONS THAT OCCURRED THAT YEAR. 4 THE END POINT IS THE ATTAINMENT YEAR, THE YEAR 5 2000. ALTHOUGH THE DISTRICT HAD TO IDENTIFY THE PROJECTED 6 EMISSIONS IN 2000 AS PART OF THE ATTAINMENT ASSESSMENT, US 7 EPA DID NOT REQUIRE THAT THIS INVENTORY BE INCLUDED IN THE 8 SIP SUBMITTAL. 9 NOW, I WOULD LIKE TO DISCUSS THE ATTAINMENT 10 ASSESSMENTS. 11 US EPA SPECIFIED THAT THE DISTRICT WAS TO PREPARE 12 AN ATTAINMENT ASSESSMENT BASED ON AVAILABLE DATA AND 13 TECHNICAL ANALYSIS. OUR REQUIREMENT IS LESS RIGOROUS THAN 14 THE TYPICAL ATTAINMENT DEMONSTRATION REQUIRED FOR A FEDERAL 15 PLAN. 16 BECAUSE THE BAY AREA HAD DONE AN ATTAINMENT FOR A 17 NUMBER OF YEARS, THE AVAILABLE MODELING TOOLS ARE LESS 18 SOPHISTICATED AND OZONE EPISODE DATA ARE OLDER THAN FOR OTHER 19 NONATTAINMENT AREAS IN CALIFORNIA. 20 THE ONE-YEAR SCHEDULE FOR PLANNED DEVELOPMENT 21 PRECLUDED NEW FIELD STUDIES OR MODELING REFINERS. HOWEVER, A 22 MULTI-MILLION DOLLAR FIELD STUDY PLANNED FOR NEXT SUMMER IN 23 NORTHERN AND CENTRAL CALIFORNIA WILL SIGNIFICANTLY IMPROVE 24 THE MODELING TOOLS IN THE BAY AREA AND THROUGHOUT TO STUDY 25 THE AIR. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 THIS STUDY SHOULD GIVE US A BETTER HANDLE ON HOW 2 BAY AREA EMISSIONS AFFECT AIR QUALITIES WITHIN THE REGION AND 3 IN THE COMMUNITIES DOWNWIND, IN THE VALLEY AND ELSEWHERE. 4 BECAUSE TODAY'S TECHNICAL TOOLS FOR THE BAY AREA 5 ARE SO LIMITED, THERE IS CLEARLY UNCERTAINTY AS TO THE 6 SPECIFIC EMISSION REDUCTION TARGET FOR ATTAINMENT IN THE YEAR 7 2000. 8 IN OUR VIEW, THIS UNDERLYING UNCERTAINTY 9 OVERSHADOWS TECHNICAL ISSUES SUCH AS THE USE OF 1995 FOR THE 10 BASE YEAR FOR ATTAINMENT ASSESSMENT. 11 THE RECENT VIOLATIONS IN 1998 AND THIS YEAR MAKE IT 12 CLEAR THAT MORE EMISSION REDUCTIONS ARE NEEDED. 13 THE DISTRICT'S APPROACH TO COMMITTING TO ACHIEVE 14 NEW REDUCTIONS BY NEXT YEAR IS THE APPROPRIATE RESPONSE FROM 15 A PUBLIC HEALTH STANDPOINT. 16 IF THESE REDUCTIONS DO NOT PROVE TO BE ENOUGH TO 17 BRING THE REGION INTO ATTAINMENT BY NEXT YEAR, THERE IS A 18 CONTINGENCY OF AN ADDITIONAL 44 TONS PER DAY OF THOSE THAT 19 PROCURE OR REDUCTIONS THAT WILL OCCUR BY 2001 DUE TO THE 20 CONTROL MEASURES ALREADY IN PLACE. 21 IN ADDITION, AS THE DISTRICT ACKNOWLEDGED IN ITS 22 PLAN, THIS WILL NOT BE THE LAST CLEAN AIR PLAN FOR THE BAY 23 AREA. THERE IS A TRIENNIAL PROCESS UNDER THE CALIFORNIA 24 CLEAN AIR ACT THAT PROVIDES A MECHANISM FOR ASSURING THAT ALL 25 FEASIBLE STRATEGIES TO REDUCE EMISSIONS ARE PURSUED IN THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 BAY AREA, BOTH THE BAY AREA AND LOCAL PROBLEMS, AS WELL AS 2 THE TRANSPORT, CONTRIBUTION TO THE DOWNWIND AREAS WILL BE 3 ADDRESSED IN THAT PROCESS. 4 ALSO, ONCE THE LEGAL ISSUES ARE SORTED OUT 5 REGARDING THE NEW FEDERAL STANDARDS, ADDITIONAL CLEAN AIR 6 PLANS WILL BE DEVELOPED THROUGHOUT CALIFORNIA. 7 FINALLY, ONE LAST POINT ABOUT THE ATTAINMENT 8 ASSESSMENT, LIKE MOST SIPS, THIS PLAN NEEDS TO ACHIEVE THE 9 STANDARD IN ATTAINMENT HERE, IN THIS CASE, IN THE YEAR 2000. 10 THUS, 2000 IS DEDUCED TO BE THE FIRST CLEAN YEAR. 11 BECAUSE ATTAINMENT IS OFFICIALLY BASED ON A THREE-YEAR 12 PERIOD, THE REGION WILL NEED TO APPLY FOR AN EXTENSION OF THE 13 ATTAINMENT DATE AS ALLOWED BY THE CLEAN AIR ACT. 14 IN THE ATTAINMENT ASSESSMENT, THE DISTRICT USED 15 MODELING OF THE 1989 OZONE EPISODES TO ESTIMATE THE 16 REDUCTIONS NEEDED TO BRING DOWN OZONE VALUES AT THE PEAK SITE 17 IN LIVERMORE. 18 THE PLAN TARGETS VOCS BASED ON THE DISTRICT'S 19 RELATIVE EFFECTIVENESS OF VOC VERSUS NOX CONTROLS IN REDUCING 20 BAY AREA OZONE. 21 THE ATTAINMENT ASSESSMENT SHOWS THAT GIVEN THE 1992 22 TONS PER DAY OF NOX, SUFFICIENT REDUCTION PROJECTED TO OCCUR 23 BETWEEN 1995 AND 2000, VOC EMISSIONS MUST BE REDUCED BY 128 24 TONS PER DAY TO REACH ATTAINMENT. 25 THE MAJORITY OF THESE EMISSION REDUCTIONS WILL COME PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 FROM EXISTING PROGRAMS, PRIMARILY ARB'S MOTOR VEHICLE 2 PROGRAMS. 3 108 TONS PER DAY OF VOC REDUCTIONS WILL BE 4 GENERATED BY MEASURES ALREADY ON THE BOOKS. TWENTY0 TONS PER 5 DAY OF VOC REDUCTIONS MUST BE ACHIEVED FROM NEW MEASURES. 6 SO, LET'S TALK A LITTLE BIT MORE ABOUT THOSE NEW 7 MEASURES. THE PLAN HAS FIVE ADOPTED BAY AREA RULES NOT 8 PREVIOUSLY REFLECTED IN THE SIP BUT PROVIDES 4.6 TONS PER DAY 9 IN VOC REDUCTION. 10 NOW, I WILL DISCUSS THE MOST IMPORTANT PART OF THE 11 PLAN, THE DISTRICT'S COMMITMENT FOR 20 TONS PER DAY IN NEW 12 EMISSION REDUCTION. 13 THE FIRST NEW MEASURE IS INCREASED ENFORCEMENT OF 14 REFUELING CONTROLS AT GAS STATIONS. 15 AS YOU HEARD LAST MONTH, THERE ARE PROBLEMS WITH 16 THE EFFECTIVENESS OF VAPOR RECOVERY SYSTEMS AT GAS STATIONS. 17 ARB'S ENHANCED VAPOR RECOVERY PROGRAM IS AIMED AT IMPROVING 18 SYSTEM EFFECTIVENESS BUT WILL NOT BE PLANNED IN TIME FOR THE 19 BAY AREA'S 2000 ATTAINMENT DATE. 20 THE BAY AREA DISTRICT HAS COMMITTED TO TAKE 21 ENFORCEMENT AND PERMITTING ACTIONS NOW TO REDUCE EXCESS VAPOR 22 RECOVERY EMISSIONS BY 13.5 TONS PER DAY. 23 THE PLAN ALSO ADDS FIVE NEW MEASURES WHICH WILL 24 PROVIDE ABOUT 6.6 TONS PER DAY IN VOC REDUCTION. 25 THE BIGGEST NEW MEASURE WILL ELIMINATE NEW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 REDUCTIONS FOR VAPOR RECOVERY REQUIREMENTS FOR SOME SMALL GAS 2 STATIONS AND REQUIRE THE USE OF VAPOR RECOVERY NOZZLES 3 COMPATIBLE WITH THE VAPOR RECOVERY SYSTEMS ON NEW CARS. 4 THE NEXT BIGGEST MEASURE PROHIBITS USE OF VOC 5 CONTAMINATED SOIL AS COVER IN LANDFILLS. THE SOIL WILL HAVE 6 TO BE TREATED INSTEAD OF ALLOWING VOCS TO EVAPORATE INTO THE 7 ATMOSPHERE. 8 SIMILARLY, THE PLAN CONTAINS A MEASURE PROHIBITING 9 THE AERATION OF VOC CONTAMINATED SOILS, BUT IT ALSO CONTAINS 10 A MEASURE OF REQUIRING THE RETROFIT OF CERTAIN COMPONENTS ON 11 REFINERY TANKS. 12 FINALLY, THE PLAN CONTAINS A MEASURE THAT WAS 13 RECENTLY ADOPTED BY THE DISTRICT TO REDUCE VOC EMISSIONS FROM 14 FOAM PRODUCTS MANUFACTURE. 15 THE REMAINING FOUR MEASURES ARE SCHEDULED FOR 16 ADOPTION THIS YEAR, WITH IMPLEMENTATION BY JUNE OF 2000. 17 AS CALIFORNIA CONTINUES TO GROW, OUR CHALLENGES ARE 18 TO MAINTAIN OR INCREASE MOBILITY WHILE REDUCING EMISSIONS. 19 WHILE ARB PROGRAMS REQUIRE EVER CLEANER VEHICLES AND FUELS, 20 IN THE BAY AREA, MTC IS RESPONSIBLE FOR TRANSPORTATION 21 CONTROL MEASURES, OR TCM, THAT SEEK TO REDUCE MOTOR VEHICLE 22 USE OR ACTIVITY. 23 THE CURRENT BAY AREA SIP CONTAINS 28 TCMS, 24 INCLUDING SUCH MEASURES AS IMPROVING AND EXPANDING TRANSIT 25 AND BUILDING HIGH OCCUPANCY VEHICLE LANES. THE BAY AREA PLAN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 WAS SUPPOSED TO REMOVE FOUR OBSOLETE TCMS FROM THE OZONE SIP. 2 ALTHOUGH THE AIR QUALITY OF THIS BOARD'S VEHICLE 3 AND FUEL PROGRAMS ARE OUTPACING GROWTH FOR NOW, THE LONG-TERM 4 AIR QUALITY SOLUTION FOR CALIFORNIA MUST INCLUDE AN EFFICIENT 5 TRANSPORTATION SYSTEM WITH LOWER EMISSIONS PER CAPITA. 6 ALL THREE OF THE COLLEAGUE AGENCIES IN THE BAY 7 AREA, MTC, BAAQMD AND THE ASSOCIATION OF BAY AREA 8 GOVERNMENTS, THE DISTRICT WILL NEED TO HELP DEVELOP THE 9 INFRASTRUCTURE AND STRATEGY TO ACHIEVE THIS GOAL. 10 THE NEXT TWO ELEMENTS OF THE PLAN ARE VOLUNTARY 11 MEASURES AND CONTINGENCY MEASURES. THE BAY AREA DISTRICT 12 OPERATES AN INNOVATIVE VOLUNTARY PUBLIC EDUCATION PROGRAM 13 CALLED, SPARE THE AIR. 14 WHEN HIGH OZONE LEVELS ARE PREDICTED, THE DISTRICT 15 CALLS FOR SPARE THE AIR DAY TO ENCOURAGE PEOPLE TO MAKE 16 PERSONAL CHOICES TO DRIVE LESS AND CUT THE USE OF LAWN AND 17 GARDEN TOOLS. 18 A KEY FACTOR IN THE SUCCESS OF SPARE THE AIR WOULD 19 BE THE OVER 1,000 BAY AREA EMPLOYERS WHO PROMOTE AND SUPPORT 20 THE PROGRAM. 21 THE DISTRICT INCLUDED THE SPARE THE AIR AS A PLAN 22 OF THE SIP MEASURE BUT DID NOT CLAIM SIP CREDIT FOR THE 23 PROGRAM'S EMISSIONS REDUCTION. ARB IS CURRENTLY FUNDING A 24 STUDY TO QUANTIFY THE EMISSION OF VOLUNTARY PUBLIC EDUCATION 25 PROGRAMS LIKE SPARE THE AIR. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 WE LOOK FORWARD INTO BEING ABLE TO QUANTIFY THE 2 BENEFITS OF SUCH PROGRAMS IN THE FUTURE AIR QUALITY PLANS. 3 NEXT, CONTINGENCY MEASURES, THE CLEAN AIR ACT 4 REQUIRES THE SIP TO INCLUDE THE CONTINGENCY MEASURES TO BE 5 IMPLEMENTED IF AN AREA FAILS TO MAKE PROGRESS OR ATTAIN A 6 STANDARD ON SCHEDULE. 7 IN THIS PLAN THE CONTINGENCY MEASURES ARE THE 8 ADDITIONAL BENEFITS THAT ADOPTED MEASURES WILL PRODUCE AFTER 9 THE YEAR 2000. 10 THEY CONSIST PRIMARILY OF ARB PROGRAMS, SUCH AS THE 11 CONSUMER PRODUCT STANDARDS AND MOTOR VEHICLES CONTROL THAT 12 WOULD YIELD THE INCREASING BENEFITS OVER TIME AS THE VEHICLE 13 FLEET TURNS OVER TO CLEANER MODELS. 14 THIS PLAN ALSO ADDRESSES THE CONFORMITY PROCESS 15 ESTABLISHED BY THE FEDERAL CLEAN AIR ACT TO ASSURE THAT 16 FEDERAL FUNDS AND DECISIONS DO NOT SUPPORT ACTIVITIES THAT 17 CONTRIBUTE TO VIOLATIONS OF AIR QUALITY STANDARDS. 18 THERE ARE TWO TYPES OF CONFORMITY, TRANSPORTATION 19 CONFORMITY AND GENERAL CONFORMITY. TRANSPORTATION CONFORMITY 20 APPLIES TO TRANSPORTATION PLANS AND PROJECTS THAT DEPEND ON 21 FEDERAL DOLLARS FOR APPROVAL, SUCH AS HIGHWAY EXPANSIONS. 22 THE 1999 SIP ESTABLISHES A NEW EMISSIONS FUNDING 23 FOR ON-ROAD MOTOR VEHICLES BASED ON THE ATTAINMENT PROJECT. 24 THE NEW BUDGET IS 175 TONS PER DAY OF VOCS AND 247 TONS PER 25 DAY OF NOX, WHICH IS MORE STRINGENT THAN THE BUDGET CONCLUDED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 IN 1999 FOR MAINTENANCE PLANS. 2 FOR A TRANSPORTATION PROJECT TO BE APPROVED, THE 3 PROJECTED EMISSION MUST FIT WITHIN THIS BUDGET. 4 GENERAL CONFORMITY APPLES TO FEDERAL ACTION 5 INVOLVING NON-HIGHWAY PROJECTS, SUCH AS AIRPORTS AND MILITARY 6 BASE EXPANSIONS. 7 WHILE THERE IS NO EXPLICIT BUDGET FOR GENERAL 8 CONFORMITY, ONE WAY TO COMPLY WITH THE REQUIREMENT IS TO 9 COMPARE AN EXPECTED EMISSIONS FROM COVERED PROJECTS AGAINST 10 THE ATTAINMENT YEAR INVENTORY, WHICH IN THIS CASE CAN BE 11 DERIVED BY THE BAY AREA PLAN. 12 ALL RIGHT. IN CONCLUSION, THE STAFF BELIEVES THAT 13 THIS PLAN WITH THE DISTRICT'S COMMITMENT TO ACHIEVE 20 TONS 14 PER DAY IN NEW EMISSION REDUCTIONS IS A POSITIVE NEXT STEP 15 TOWARDS CLEANER AIR IN THE BAY AREA. 16 MORE REDUCTION WILL BE NEEDED IN THE FUTURE TO 17 ADDRESS CONTINUED GROWTH, TO ASSURE MAINTENANCE OF THE 18 FEDERAL STANDARD UNDER ALL CIRCUMSTANCES, TO ATTAIN THE MORE 19 HEALTH PROTECTED STATE STANDARDS AND TO ADDRESS THE DOWNWIND 20 IMPACT OF BAY AREA EMISSIONS. 21 THE DISTRICT, MTC, BAAQMD, ARB, AND THE US EPA ALL 22 NEED TO KEEP PRESSING THE ENVELOPE TO DEVELOP EVERY 23 TECHNICALLY FEASIBLE AND COST-EFFECTIVE MEASURE TO GUARANTEE 24 THE BAY AREA CITIZENS ENJOY CLEAN AIR, NO MATTER WHAT THE 25 WEATHER. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 OVERALL, STAFF FINDS THAT THE PLAN IS REASONABLE 2 AND MEETS US EPA'S MINIMUM REQUIREMENTS. 3 THEREFORE, WE RECOMMEND THAT THE BOARD APPROVE THE 4 BAY AREA 1999 PLAN, INCLUDING THE 1995 INVENTORY ATTAINMENT 5 ASSESSMENT, CONTROL STRATEGY, TRANSPORTATION CONFORMITY 6 BUDGET AND THE CONTINGENCY MEASURES. FURTHERMORE, WE 7 RECOMMEND THE BOARD TO DIRECT THE EXECUTIVE OFFICER TO SUBMIT 8 THE PLAN TO US EPA AS A SIP REVISION AS SOON AS POSSIBLE. 9 THANK YOU. WE WILL BE HAPPY TO ANSWER ANY 10 QUESTIONS. 11 CHAIRMAN LLOYD: THANK YOU VERY MUCH FOR YOUR 12 PRESENTATION. 13 I HAVE SOME QUESTIONS, BUT I WILL OPEN IT UP TO 14 BOARD MEMBERS FIRST OF ALL. 15 QUESTIONS FROM THE BOARD? 16 BOARD MEMBER DESAULNIER: JUST A COMMENT. 17 I'LL RESERVE COMMENTS FOR LATER. 18 THIS IS, AS YOU KNOW, THERE WERE COMMENTS BY STAFF 19 IN TERMS OF THE PROCESS AND HOW UNUSUAL IT WAS, AND OUR OWN 20 BUDGET CONSTRAINTS TRYING TO DO OUR REGULAR REGULATORY 21 OVERSIGHT OF THE BAY AREA, TRYING TO PUT THIS ATTAINMENT PLAN 22 TOGETHER, I THINK WAS A SUCCESS STORY. 23 THERE ARE PEOPLE THAT WOULD LIKE CHANGES MORE 24 AGGRESSIVELY, AND SOME IN THE BUSINESS COMMUNITY WOULD LIKE 25 SPARE THE AIR BE INCLUDED. I WOULD LIKE TO PARTICULARLY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 CONGRATULATE ELLEN GARVEY AND HER STAFF FOR GETTING THIS DONE 2 IN A TIMELY FASHION, AND ALSO FOR CARB'S STAFF WHO RESPONDED 3 SO THAT WE COULD FORWARD THIS ON TO US EPA. 4 CHAIRMAN LLOYD: I WOULD ALSO LIKE TO SAY I POINTED 5 OUT STAFF, BECAUSE THIS WASN'T THE TYPICAL REGULAR ANALYSIS 6 THAT YOU WOULD REGULARLY GO THROUGH, EVERYONE RECOGNIZES 7 THAT. 8 THE OTHER PART OF IT IS THAT AS WE ENTER THESE 9 LARGER FIELD PROGRAMS, WE WILL GET A MUCH BETTER DATABASE TO 10 ASSESS, SO THAT IS WHERE WE ARE GOING. 11 I WOULD LIKE TO CONGRATULATE THE PEOPLE WHO 12 PARTICIPATED IN THIS FIELD OF PROGRAMS. IT WAS EXPENSIVE, 13 BUT I THINK THEY ARE A VERY IMPORTANT PIECE OF THE PUZZLE SO 14 THAT WE CAN ACTUALLY HAVE A BETTER DATABASE SO YOU CAN 15 UNDERSTAND WHAT IS HAPPENING IN THE ATMOSPHERE. 16 ONE OTHER QUESTION TO STAFF, IS IT 1000 BUSINESSES 17 THAT ARE INVOLVED IN SPARE THE AIR? 18 MS. HEROY-ROGALSKI: YES. 19 THERE MIGHT BE SLIGHTLY OVER A 1000. 20 CHAIRMAN LLOYD: AGAIN, I WOULD LIKE TO REITERATE 21 THE SUPERVISOR'S COMMENT THERE. I THINK THAT I AM PLEASED TO 22 SEE STAFF RESPONDING TO THAT. 23 IT IS JUST THE TYPE OF PROGRAM THAT WE NEED TO 24 ENCOURAGE. I THINK IF WE CAN EVEN GET THAT TYPE OF 25 PARTICIPATION, I THINK THAT WE HAVE TO FIND A WAY OF WORKING PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 WITH EPA SO, IN FACT, THAT THE CREDITS CAN BE ATTAINED FOR 2 THAT. 3 THERE ARE SOME COMMENTS HERE REPRESENTING SOME OF 4 THE BUSINESS COMMUNITY AND FULLY SUPPORTIVE OF THAT. WE 5 UNDERSTAND THIS TIME WHY THAT DID NOT HAPPEN, BUT AS A RESULT 6 OF OUR RESOURCE PROGRAM IN CONJUNCTION WITH THE BAY AREA AND 7 IN CONJUNCTION WITH, I THINK, VOLUNTARY MEASURES, I THINK IT 8 IS VERY IMPORTANT, BECAUSE WE ARE TRYING TO TIE THIS ALL 9 TOGETHER. 10 SO, WE HAVE TO FIND A WAY TO QUANTIFY IT. 11 ANY OTHER COMMENTS FROM THE BOARD? 12 I HAVE FOUR WITNESSES TO TESTIFY HERE. I WILL GIVE 13 THE ORDER SO THAT THE PEOPLE CAN GET READY. CINDY TUCK, 14 SUSAN SHARA, GREG PERRY AND JOHN HOLTZCLEW. 15 SO, WITH THAT, WE WILL START OFF WITH CINDY. I 16 THINK CINDY IS TESTIFYING ON BEHALF OF CALIFORNIA COUNCIL FOR 17 ENVIRONMENTAL AND ECONOMIC BALANCE, BAY AREA COUNCIL, SILICON 18 VALLEY MANUFACTURING GROUP, BAY AREA LEAGUE OF INDUSTRIAL 19 ASSOCIATIONS AND WESTERN STATES PETROLEUM ASSOCIATION. 20 MS. TUCK: THANK YOU, CHAIRMAN LLOYD AND MEMBERS. 21 I AM CINDY TUCK, AND I AM REPRESENTING THESE 22 EMPLOYEES TODAY, AND I AM ALSO PROVIDING COMMENTS ON BEHALF 23 OF THE FOUR OTHER ORGANIZATIONS, WHO ARE, THE BAY AREA 24 COUNCIL, THE BAY AREA LEAGUE OF INDUSTRIAL ASSOCIATIONS, THE 25 SILICON VALLEY MANUFACTURING GROUP AND THE WESTERN STATES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 PETROLEUM ASSOCIATION. 2 THESE ORGANIZATIONS HAVE ACTIVELY PARTICIPATED IN 3 THE PROCESS AS A DISTRICT, AND THEY HAVE SUBMITTED JOINT 4 WRITTEN COMMENTS TO THE BOARD, AND SO MY COMMENTS WILL BE 5 BRIEF THIS MORNING. 6 THANK YOU. 7 THE APPROACH THE DISTRICT HAS TAKEN IS CONSISTENT 8 WITH THE REQUIREMENT OF THE FEDERAL CLEAN AIR ACT. IT IS 9 ALSO RESPONSIVE TO EPA'S DIRECTION TO THE DISTRICT AND 10 FINALLY, VERY IMPORTANT, IT IS BASED ON SOUND SCIENCE. 11 THE PLAN APPROPRIATELY INCREASES THE RELIANCE ON 12 REDUCING THE VOC EMISSIONS IN ORDER TO REDUCE OZONE 13 CONCENTRATION IN THE BAY AREA. 14 THE BOTTOMLINE IS THAT THE DISTRICT'S 1999 PLAN 15 REPRESENTS A REASONABLE APPROACH TO REDUCING OZONE 16 CONCENTRATIONS IN THE BAY AREA. 17 IT WAS NOTED IN THE GROUP'S JOINT LETTER THAT FIVE 18 ORGANIZATIONS WERE DISAPPOINTED THAT THIS PLAN DID NOT 19 INCLUDE CREDIT FOR THE SPARE THE AIR PROGRAM, AND SUSAN 20 SHARA, WITH LOCKHEED-MARTIN IS HERE THIS MORNING, I THINK SHE 21 WILL FOLLOW ME TO PRESENT COMMENTS ON THAT ISSUE. 22 THESE ORGANIZATIONS DO URGE ARB TO WORK WITH THE 23 DISTRICT TO TRY TO INCORPORATE CREDIT AS SOON AS POSSIBLE 24 INTO THE SIP. 25 FOR TODAY'S ACTION, THE FIVE ORGANIZATIONS ARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 PLEASED TO SUPPORT THE ACTIONS AND REQUEST THAT ARB HAVE THE 2 EXECUTIVE OFFICER SUBMIT THE PLAN ON TO EPA TO BE 3 INCORPORATED INTO THE SIP. 4 I WILL BE GLAD TO ANSWER ANY QUESTIONS. 5 CHAIRMAN LLOYD: THANK YOU, CINDY. 6 ANY QUESTIONS FROM THE BOARD MEMBERS? 7 THANK YOU VERY MUCH. 8 MS. TUCK: THANK YOU. 9 CHAIRMAN LLOYD: THE NEXT PERSON TO TESTIFY IS 10 SUSAN SHARA, OF LOCKHEED. 11 MS. SHARA: GOOD MORNING. 12 AS YOU MAY REMEMBER, MY NAME IS SUSAN SHARA. I AM 13 THE COMMUTE MANAGER FOR LOCKHEED MARTIN. OUR HEADQUARTERS 14 ARE IN SUNNYVALE. 15 LOCKHEED-MARTIN HAS BEEN A STRONG SUPPORTER OF THE 16 SPARE THE AIR PROGRAM SINCE INCEPTION, AND WE HAVE BEEN A 17 STRONG ADVOCATE ON VOLUNTARY MEASURES, AND IN PARTICULAR, OF 18 THE BAY AREA CLEAN AIR PARTNERSHIP. 19 LOCKHEED-MARTIN IS ONLY ONE OF MANY, AS WE 20 MENTIONED EARLIER, A THOUSAND EMPLOYERS WHO ACTIVELY ARE 21 SUPPORTING SPARE THE AIR. WE SUPPORT VOLUNTARY TRIP 22 REDUCTION PROGRAMS IN AN EFFORT TO PROMPT CLEAN AIR AND 23 TRANSPORTATION MOBILITY. 24 THE SPARE THE AIR SEASON AND SPARE THE AIR ALERT 25 ARE WIDELY ADVERTISED THROUGHOUT OUR COMPANY. THE EMPLOYEE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 INCENTIVES AND INFORMATION HAVE BECOME A PART OF OUR CULTURE. 2 IN FACT, JUST RECENTLY OUR COMPANY PRESIDENT 3 THANKED EMPLOYEES FOR THEIR EFFORTS ON REDUCING POLLUTION 4 DURING THE RECENT HEAT SPELL. THIS THANK YOU WAS INCLUDED IN 5 THE WEEKLY BUSINESS BRIEFS AND DISTRIBUTED TO ALL 8,000 6 EMPLOYEES. 7 VOLUNTARY EFFORTS DO MAKE A DIFFERENCE. WE FEEL 8 THAT IT IS IMPERATIVE TO ENCOURAGE AND INCENTIVIZE CONTINUED 9 AND ADDITIONAL VOLUNTARY EFFORTS BY EMPLOYERS IN OUR REGION. 10 THIS SEASON, LARGER NUMBERS OF EMPLOYERS ARE 11 PARTICIPATING IN SPARE THE AIR, WHICH HAS TRULY BECOME PART 12 OF OUR VOCABULARY. LEGITIMATIZING THE VOLUNTEER EFFORTS AND 13 RECOGNIZING THE EFFECTIVENESS THROUGH INCLUSION IN THE SIP 14 FOR CREDIT ARE THE LOGICAL NEXT STEPS. 15 I UNDERSTAND THAT THE DISTRICT, THE BAY AREA 16 COUNCIL, THE SILICON VALLEY MANUFACTURING GROUP, THE FOUNDERS 17 OF BAY CAP WILL BE WORKING WITH ARB ON THIS ISSUE. 18 ACTING TOGETHER, I'M CONFIDENT THAT WE CAN REACH AN 19 AGREEMENT WITH EPA REGION 9 TO RECEIVE SIP CREDIT FOR 20 VOLUNTARY MEASURES IN A TIMELY MANNER. 21 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 22 QUESTIONS? 23 BOARD MEMBER MCKINNON: YES. AS SOMEONE THAT IS 24 VERY FAMILIAR WITH LOTS OF FOLKS THAT WORK AT LOCKHEED, 25 SUNNYVALE, THANK YOU FOR EVERYTHING THAT YOU ARE DOING TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 MAKE THAT WORK. 2 I KNOW THAT IN MY OTHER LIFE, LOTS OF MACHINIST 3 UNION MEMBERS COMMUTE TO STOCKTON AND ALL SORTS OF PLACES, 4 AND YOU ALL WORK REAL HARD TO MAKING THAT WORK. 5 I LOOK FORWARD TO, AND I THINK I UNDERSTAND THE 6 DIFFICULTY IS QUANTIFYING HOW THE PROGRAM WORKS, AND WHAT THE 7 RESULTS ARE, AND I HOPE WE ALL GET TOGETHER AND GET SOMETHING 8 WORKED OUT SO WE CAN FIGURE OUT WHEN TO DO IT, SO I THINK 9 STAFF IS GOING TO WORK ON THAT. 10 CHAIRMAN LLOYD: THANK YOU. THE NEXT PERSON TO 11 TESTIFY IS GREG PERRY. 12 MR. PERRY: THANK YOU. 13 I ADVISE YOU NOT TO ACCEPT THIS IN THE SIP, 14 PRIMARILY BECAUSE, AS ALL OF YOU KNOW, IT IS NOT SUFFICIENT. 15 YOU CAN'T SAY BY TAKING THINGS THAT ARE ALREADY 16 IMPLEMENTED WHEN WE CAN LOOK OUT AND SEE THAT THE AIR IS 17 DIRTY BY A VIOLATION THAT WE HAVE HAD THIS YEAR AND BY 18 COUNTING THOSE AGAIN, CALL THE PLAN TO ACHIEVE ATTAINMENT. 19 IT JUST DOESN'T WORK THAT WAY. IF YOU WANT TO 20 ACHIEVE ATTAINMENT, NOT TO START DOING ANYTHING BUT SERIOUSLY 21 ADDRESS THAT BIG GREEN SPOT ON THE BOTTOM OF YOUR SLIDES FROM 22 MOBILE SOURCES RATHER THAN DOUBLE COUNTING MEASURES THAT YOU 23 ALREADY HAVE IN THERE. 24 YOU KNOW AND I KNOW THAT SINCE 1995 THERE HAVE BEEN 25 TONS OF HOUSES GOING UP IN THE STOCKTON AREA, AS YOU MENTION, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 MANY IN HOLLISTER, AND EVERYWHERE ELSE, BECAUSE THE 2 ASSOCIATION OF BAY AREA GOVERNMENTS LOVES TO HAVE A TAX 3 REVENUE FROM ALL OF THESE BUSINESSES COMING AND ISN'T WILLING 4 TO HAVE DENSER HOUSING NEXT TO THEIR NICE BACKYARDS, AND IF 5 YOU WANT TO HAVE DOWNTOWN ATTAINMENT, YOU WOULD HAVE TO START 6 ADDRESSING THE REASON THAT WE HAVE ALL THIS BAD AIR OUT 7 THERE. 8 THAT IS THE BIG GREEN SECTION, FROM ALL THE CARS 9 OUT THERE, THAT THIS PLAN DOES ABSOLUTELY NOTHING TO ADDRESS. 10 SO, I AM ALL IN FAVOR OF THE MEASURES AS THEY ARE, 11 BUT DO NOT CALL THEM A WAY TO ACHIEVE ATTAINMENT. 12 JUST BECAUSE SOME OF YOU WORKED FOR YOUR DOCTORATE 13 ARE SMART ENOUGH TO KNOW IT IS NOT ENOUGH. 14 THANK YOU. 15 CHAIRMAN LLOYD: THANK YOU. ANY QUESTIONS OR 16 COMMENTS? 17 BOARD MEMBER CALHOUN: IT'S A GOOD SEGWAY INTO THE 18 QUESTION THAT I HAD IN THE BACK OF MY MIND, ONE OF THOSE 19 SLIDES THAT THE ARB STAFF SHOWED, THE DISTRICT MEASURES, 20 GASOLINE STATIONS 3.2, LANDFILLS 2.1, CONTAMINATED SOIL 21 AERATION .6 -- 22 MS. HEROY-ROGALSKI: I'M SORRY. CAN YOU REPEAT THE 23 QUESTION? 24 WE ARE HAVING DIFFICULTY HEARING YOU. THE MIKE 25 KEEPS ON GOING IN AND OUT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 BOARD MEMBER CALHOUN: ONE OF THE SLIDES YOU 2 SHOWED, THE NEW DISTRICT VOC MEASURES, TONS PER DAY ON PAGE, 3 WELL, SLIDE -- GASOLINE STATION, LANDFILLS, CONTAMINATED 4 SOILS, ARE THOSE MEASURES ALREADY ON THE BOOKS? 5 MS. HEROY-ROGALSKI: IN FACT, THOSE ARE THE 6 MEASURES THAT, THE NEW MEASURES THAT THE DISTRICT HAS ADDED 7 TO THE PLAN. 8 THE OTHER MEASURES THAT ARE THE BASIS OF THIS PLAN 9 ARE ALREADY ADOPTED, THOSE ARE FOR BOTH OF THEM, BUT THESE 10 FIVE MEASURES ARE THE NEW DIMENSIONS THAT THE DISTRICT HAS 11 MADE IN THE PLAN, WITH THE LAST MEASURE ON THAT LIST BEING 12 ADOPTED. 13 BOARD MEMBER CALHOUN: SO, THE DISTRICT DID NOT 14 HAVE A REQUIREMENT FOR FLOATING ROOF TANKS AT THE PRESENT 15 TIME? 16 MS. HEROY-ROGALSKI: THERE IS QUITE A NUMBER OF 17 REQUIREMENTS THAT ARE PLACED ON THE DISTRICT FOR REFINERIES 18 RIGHT NOW. 19 THESE ARE BASICALLY INCREMENTAL TYPE OF -- THE 20 ADDITIONAL EMISSIONS SOURCE, SO EVERYWHERE THERE IS AN 21 OPPORTUNITY TO APPLY FEASIBLE CONTROL, THEN THE DISTRICT IS 22 LOOKING AT TIGHTENING THOSE UP, AND THAT IS WHAT THIS 23 REPRESENTS. 24 SO, THESE ARE IN ADDITION TO WHAT IS ALREADY IN 25 PLACE TODAY. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 BOARD MEMBER CALHOUN: I WAS CURIOUS TO KNOW WHAT 2 TO DO IN THE CASE OF THE FLOATING ROOF TANKS. 3 MS. HEROY-ROGALSKI: YOU ARE RIGHT. 4 THE DISTRICT ALREADY HAS CONTROLS ON, MANY CONTROLS 5 ON THE REFINERY TANKS. WHAT THIS SPECIFIC MEASURE WILL DO IS 6 REQUIRE THE RETROFIT OF ONE OF THE PARTS OF FLOATING ROOF 7 TANKS, THE SLOTTED GUIDE POLES. 8 THOSE ARE ONE OF THE PARTS THAT THE DISTRICT STAFF 9 HAS CONCLUDED IS RESPONSIBLE FOR A LARGE PART OF THE 10 EMISSIONS FROM TANKS, SO THIS IS A NEW RETROFIT REQUIREMENT 11 ON TOP OF THE DISTRICT CONTROLS THAT THE DISTRICT ALREADY 12 HAS. 13 BOARD MEMBER CALHOUN: THANK YOU. 14 CHAIRMAN LLOYD: THANK YOU, MR. PERRY. 15 I THINK AS I SAID EARLIER, I THINK WE RECOGNIZE 16 THAT IT'S A MORE RIGOROUS JOB THAT CAN BE DONE FOR THIS 17 ANALYSIS, BUT FOR THIS PARTICULAR PLAN AND TIME FRAME 18 INVOLVED, THIS IS, I THINK, A REASONABLE APPROACH TO WHAT IS 19 GOING ON. 20 AS WE GET MORE DATA, WE UNDERSTAND THE 21 WEEKEND-WEEKDAY EFFECT, ALL OF THESE I THINK WILL BECOME 22 NECESSARY TO UNDERSTAND HOW THIS RELATIONSHIP, PARTICULARLY 23 BETWEEN THE GROWTH OF ALL AREAS AND THE GENERATION OF OZONE, 24 SO I THINK THIS IS A CONTINUATION. 25 BUT AGAIN, I COMMEND THE EFFORTS OF THE BAY AREA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 STAFF WITH CONJUNCTION WITH ARB IN THIS TIME FRAME TO TRY AND 2 MOVE AHEAD IN CONJUNCTION WITH THE PRIVATE SECTOR, BUT IT IS 3 THE BEGINNING OF MAJOR EFFORTS HERE, AND I THINK YOU WILL SEE 4 MUCH MORE RIGOROUS ANALYSIS IN THE YEARS AHEAD. 5 THANK YOU FOR THE COMMENTS. 6 OUR LAST WITNESS IS JOHN HOLTZCLEW. I APOLOGIZE 7 FOR MESSING UP YOUR NAME. 8 MR. HOLTZCLEW: CHAIRMAN LLOYD, MARK, OTHER MEMBERS 9 OF THE BOARD, WELCOME TO SAN FRANCISCO. 10 I'M JOHN HOLTZCLEW, AND I AM REPRESENTING THE 11 SIERRA CLUB. AS YOUR STAFF HAS SAID, WE HAVE ACHIEVED MOST 12 OF THE EMISSION REDUCTIONS THAT WE NEED TO ACHIEVE FROM 1995 13 TO 2000 TO MEET THE STANDARD. 14 A WEEK AND A HALF AGO, WE HAD A NUMBER OF STATE 15 EXCEEDENCE, A NUMBER OF FEDERAL EXCEEDENCE AND FOUR 16 VIOLATIONS OF STATE STANDARDS. 17 I THINK THAT SAYS WE ARE NOT GOING FAR ENOUGH. AS 18 YOUR STAFF HAS ALSO SAID, MOST OF THE REDUCTIONS THAT WE NEED 19 TO ACHIEVE ARE IN THE MOBILE SOURCE AREA, 60 PERCENT OR MORE. 20 WE HAVE HAD TREMENDOUS REDUCTION IN THOSE OVER THE 21 LAST 30 YEARS, THANKS PRIMARILY TO THE ARB AND THE BAR, FOR 22 DECREASING THE EMISSIONS FROM THE TAIL PIPES PER MILE. 23 BUT THE OTHER HALF OF THAT EQUATION IN REDUCING 24 MOBILE SOURCE EMISSIONS IS REDUCING THE NUMBER OF MILES THAT 25 WE DRIVE, OR AT LEAST THE NUMBER OF MILES PER CAPITA THAT WE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 DRIVE, AND THAT IS MTC'S BAILIWICK. 2 WHAT HAS MTC BROUGHT IN TRANSPORTATION OR CONTROL 3 MEASURES OR TCM'S TO THIS PLAN? 4 NONE, NOT A SINGLE ONE. 5 WHAT IS BEING DISTRIBUTED TO YOU IS MY TESTIMONY A 6 MONTH AGO TO THE PUBLIC HEARING OF THE THREE JOINT AGENCIES, 7 LEAD AGENCIES FOR THIS PLAN. 8 I ASKED FOR FOUR TRANSPORTATION CONTROL MEASURES TO 9 BE ADOPTED. MTC AVOIDED RESPONDING TO THOSE FOUR CONTROL 10 MEASURES BY RELYING ON THAT MTC HAS NO LAND USE AUTHORITY. 11 WELL, I THINK IF YOU READ THOSE MEASURES, YOU WILL 12 SEE THAT THEY DO NOT REQUIRE MTC TO HAVE LAND USE AUTHORITY. 13 THE FIRST ONE, FUND ONLY TRANSPORTATION SYSTEM 14 EXPANSIONS WITHIN CITY OR COUNTIES THAT HAVE ZONING TO STOP 15 SPRAWL GROWTH AND IMPLEMENTS SMART GROWTH, ESPECIALLY IN 16 TRANSIT CORES. 17 ALL THAT REQUIRES IS FOR MTC TO APPLY THEIR 18 DISCRETION TO MAKE SURE THAT FUNDING FOR ROADS OF TRANSIT 19 GOES ONLY TO CITIES AND COUNTIES WHICH HAVE POLICES TO USE IT 20 EFFICIENTLY TO ALLOW THE DEVELOPMENT, WHICH IS PEDESTRIAN AND 21 TRANSIT ORIENTED, AND DISCOURAGES GROWTH IN VEHICLE MILES TO 22 TRAVEL. 23 THAT IS WHAT THAT IS WITHIN THEIR DISCRETIONARY 24 POWER. IT DOESN'T REQUIRE LANGUAGE POWER. 25 SECOND ONE, FUND ONLY TRANSPORTATION SYSTEM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 EXPANSIONS WITHIN CITIES OR COUNTIES WHERE 80 PERCENT OF 2 EMPLOYEES ARE OFFERED PARKING CASH OUT FOR COMMUTER CHECK. 3 THAT DOES NOT REQUIRE MTC TO HAVE CONTROL OVER THE LAWYERS. 4 ALL THAT IT REQUIRES AGAIN, DOES IT GO TO CITIES 5 AND COUNTIES THAT USE IT EFFICIENTLY AND THE CITIES AND 6 COUNTIES AND THE CMAS HAVE THAT KIND OF AUTHORITY. 7 THE SAME AS THE THIRD ONE, FUND ONLY TRANSPORTATION 8 SYSTEM EXPANSIONS WITHIN CITIES OR COUNTIES WHERE 80 PERCENT 9 OF NON RESIDENTIAL PARKING PLACES ARE METERED OR OTHERWISE 10 CHARGED FOR AT MARKET RATES. ANOTHER TRANSPORTATION 11 FINANCING MEASURE THAT WOULD DECREASE DRIVING. 12 THE FOURTH ONE, EXPAND NO HIGHWAYS OR BUILD NEW 13 HIGH OCCUPYING VEHICLE LANES THAT ARE NOT BUS ONLY. JUST 14 DON'T BUILD NEW ROADS THAT ARE GOING TO BE SPRAWLING, THAT IS 15 WHAT INDUCES DISCRETIONARY AUTHORITY. 16 SO, WHAT I WOULD ASK YOU TODAY TO DO IS FIRST TO 17 HAVE YOUR STAFF ISSUE A LEGAL OPINION ABOUT WHETHER OR NOT 18 MTC HAS THIS AUTHORITY, AND SEND THAT OPINION TO THE THREE 19 LEAD AGENCIES WITH A COPY TO THE SIERRA CLUB, AND SECOND, TO 20 REJECT THIS PLAN. 21 SEND IT BACK WITH THE INSTRUCTIONS THAT MTC AND THE 22 THREE LEAD AGENCIES ADOPT TRANSPORTATION CONTROL MEASURES 23 WHICH ACHIEVE THIS KIND OF VMT REDUCTIONS. 24 THANK YOU VERY MUCH. 25 CHAIRMAN LLOYD: THANK YOU MUCH. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 ANY QUESTIONS? 2 MARK. 3 BOARD MEMBER DESAULNIER: I HAVE A COMMENT AND A 4 QUESTION, BECAUSE I DON'T DISAGREE -- ONE OF THE PLEASURES I 5 HAD WAS, BESIDES BEING A MEMBER OF CARB AND THE AIR DISTRICT, 6 I AM ALSO ON MTC, SO I WAS DRAFTED FOR A COUPLE OF THOSE 7 THINGS. 8 I DON'T WANT PEOPLE TO THINK THAT I'M NECESSARILY 9 ADDICTED TO PUBLIC MEETINGS. 10 ALTHOUGH I LOVE MY APPOINTMENT HERE, AND I HOPE THE 11 GOVERNOR KNOWS THAT, MAYBE STAFF COULD RESPOND TO THE ONGOING 12 PROCESS. 13 I THINK WHAT OUR CHAIRMAN JUST SAID, THE PROBLEMS 14 OF TRYING TO DO THIS CONDENSED VERSION THAT JOHN KNOWS ABOUT, 15 BUT ALSO TO DO SOME OF THE THINGS THAT JOHN HAS ENCOURAGED, 16 WHAT I WOULD SHARE WITH A COUPLE OF THE BOARD MEMBERS, ONE OF 17 THE REAL PROBLEMS WE HAVE IN THE BAY AREA IS NOT JUST THE 18 GROWTH WITHIN THE NINE COUNTIES OF THE BAY AREA BUT THE WHOLE 19 ISSUE THAT ACTUALLY HELPED THE GENESIS OF THIS PETITION FROM 20 THE PETITIONERS IS THE AREA AROUND TRANSPORTS AND THE IRONING 21 OUT OF TERMS OF OUR GROWTH AND THE SPRAWL THAT JOHN TALKED 22 ABOUT, WHAT MATT JUST TALKED ABOUT, ABOUT SOME OF HIS MEMBERS 23 HAVING TO COMMUTE FROM SANTA CLARA OUT TO TRACY WHERE THERE 24 IS MORE AFFORDABLE HOUSING OUTSIDE OF THE AIR DISTRICT AND 25 THE PROBLEMS WITH THAT TRANSPORT AND THE GROWTH. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 MTC, THE GROWTH IN TERMS OF VEHICLE MILE TRAVEL IS 2 FROM OUTSIDE OF THE REGION, THAT IS IN THE NEXT 20 YEARS ARE 3 THOSE PEOPLE ARE GOING TO BE TRAVELING IN AND THE PROBLEMS 4 WITH TRYING TO DO SOME OF THE THINGS THAT JOHN SUGGESTED, AND 5 THEN THE ARGUMENT THAT THAT WILL FURTHER INDUCE THE SPRAWL 6 GOING OUTSIDE OF THE BAY AREA DISTRICT. 7 SO, THOSE SORT OF MANAGING THE GROWTH AND THE 8 MULTIPLE SOURCES AND THE VEHICLE MILES TRAVELING TRYING TO DO 9 A SPRAWL GROWTH, WHICH WE ARE ALL TRYING TO DEFINE WHAT THAT 10 IS, BUT EVERYBODY IS IN FAVOR OF IS AS OPPOSED TO DUMB 11 GROWTH. 12 MAYBE STAFF COULD JUST, THAT IS A LONG -- 13 PARTICULARLY OUR PROBLEM, BUT IT IS BASICALLY VERY 14 SUMMARIZED. THE STAFF CAN RESPOND TO HOW WE CAN DEAL WITH 15 SOME OF THE SUGGESTIONS FROM THE SIERRA CLUB AND THE PREVIOUS 16 SPEAKER TALKED TO WITH REAL PROBLEMS, BUT WE HAVE TO DEAL 17 WITH THIS AS IT GROWS, AND WE TRY TO MONITOR AND TRY TO LOOK 18 AT OTHER THINGS THAT WE CAN DO, THE CARB, THE DISTRICT AND 19 MTC CAN DO AND OTHER THINGS WE CAN ADD TO THE SCOPE. 20 SO, THE ONGOING PROCESS OF MANAGING OUR GROWTH 21 QUESTION. 22 CHAIRMAN LLOYD: I WOULD LIKE TO ASK JOHN A 23 QUESTION. 24 CAN YOU TELL ME OR CAN YOU GIVE ME SOME EXAMPLES 25 WHERE IMPLEMENTATION OF TCMS HAVE REALLY WORKED. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 MR. HOLTZCLEW: WE HAVEN'T SEEN MANY EXAMPLES OF 2 REAL STRONG IMPLEMENTATION OF TCMS. 3 WE HAVE SEEN TCMS IN THE BAY AREA THAT I THINK HAVE 4 WORKED TO SOME EXTENT. I'M NOT SURE THAT THE RESULTS HAVE 5 BEEN QUANTIFIED BY THE AIR DISTRICT. WE WOULD HAVE TO SPEAK 6 TO THAT. 7 AS FAR AS ENCOURAGING SMART GROWTH THAT MARK 8 MENTIONED, THE VALLEY TRANSIT AND THE MANUFACTURERS GROUP AND 9 THE SIERRA CLUB AND OTHERS IN SANTA CLARA COUNTY ARE WORKING 10 VERY HARD TO ENCOURAGE SMART GROWTH. 11 SO, I THINK THERE ARE THINGS THAT WE CAN DO TO 12 ENCOURAGE THAT WITHIN THE REGION SO PEOPLE DON'T HAVE TO 13 COMMUTE. THERE IS AFFORDABLE HOUSING WITHIN THE REGIONS THAT 14 I HAVE TO DO SOMETHING ABOUT. 15 I'M SORRY I DON'T HAVE A MORE COMPLETE ANSWER TO 16 YOUR QUESTION. 17 CHAIRMAN LLOYD: I HEAR THAT. 18 THE OTHER ISSUE THAT I WOULD SAY IS, AS WE'RE 19 COMING UP NEXT YEAR TO LOOKING AT OUR ZERO EMISSION VEHICLE 20 PROGRAM REQUIREMENTS AND OUR LOW EMISSION VEHICLE 21 REQUIREMENTS, WE ARE AGAIN CUTTING DOWN ALL TAIL PIPE 22 EMISSIONS, AND WE CONTINUE TO DO THAT IN A VERY STRONG 23 MANNER, ULTIMATELY ENDING UP WITH ZERO EMISSIONS. 24 SO, WE COULD END UP WITH ZERO EMISSIONS, BUT WE 25 WOULD STILL HAVE THE CONGESTION PROBLEM. ANYTHING THAT WE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 CAN DO TO CUT DOWN THOSE EMISSIONS AND ANYTHING YOU CAN DO TO 2 ENCOURAGE CLEANER TRANSPORTATION THROUGH CLEANER FUELS, 3 THROUGH ELECTRIC VEHICLES, FUEL CELLS, WHATEVER IS THIS GOING 4 TO HEAD US IN THE RIGHT DIRECTION. 5 MR. HOLTZCLEW: LET ME RESPOND A LITTLE BIT FURTHER 6 TO YOUR QUESTION. 7 I DO NOT KNOW WHETHER IT WAS PROMULGATED AS A 8 TRANSPORTATION CONTROL MEASURE, BUT CERTAINLY THE STATE OF 9 OREGON HAS IMPLEMENTED GROWTH CONTROL LAWS AND IN-FILL 10 REGULATIONS THAT HAVE RESULTED IN MUCH LESS VMT AND MUCH 11 SHORTER TRIPS THAN WHAT IT WOULD HAVE ACHIEVED OTHERWISE 12 ACCORDING TO THEIR OWN ANALYSIS. 13 MARYLAND HAS RECENTLY IMPLEMENTED WEAKER BUT 14 SIMILAR TYPE OF LAWS. NEW JERSEY IS STARTING AND SO ON. SO 15 THOSE KINDS OF THINGS CAN BE ACHIEVED. 16 WHETHER OR NOT THEY CALL THEM TRANSPORTATION 17 CONTROL MEASURES, THIS IS THE TOOL WE HAVE HERE. 18 CHAIRMAN LLOYD: I HEAR WHERE YOU ARE COMING FROM, 19 AND AGAIN, IT IS A TOUGH ISSUE, AND MY EXPERIENCE 20 PARTICULARLY DOWN IN THE SOUTH COAST THAT TCMS ARE TOUGH 21 POLITICALLY AND ALSO ATYPICAL TO QUANTIFY AND ATYPICAL TO 22 IMPLEMENT. 23 THE OTHER THING I WOULD COMMENT, AGAIN, AS WE MOVE 24 AHEAD TO THE CLEANER TRANSPORTATION, WE ARE FOCUSING ON THE 25 HEAVY DUTY SIDE AND ALSO ON THE THINGS LIKE THE TRANSIT BUSES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 SO WE CAN TRY AND GET PEOPLE MORE INTO BUSES. WE ARE ALSO 2 PUSHING FOR CLEANER BUSES AS WELL. 3 MR. HOLTZCLEW: TO RESPOND A LITTLE BIT FURTHER, 4 AGAIN, MTC HAS ANALYZED A SMART GROWTH ALTERNATIVE THAT IS 5 SIMILAR TO THE TCMS THAT I'VE LISTED, WHAT THEY WOULD ACHIEVE 6 IN 1994 AS SO-CALLED DRAFT ALTERNATIVE TO THEIR REGIONAL 7 TRANSPORTATION PLAN. 8 THEIR ANALYSIS SHOWS THAT THIS ALTERNATIVE WOULD 9 HAVE REDUCED ALL DRIVING BY SIX PERCENT, I THINK, REDUCED 10 CONGESTION, AS YOU MENTIONED, BY 13 PERCENT AND MOBILE SOURCE 11 EMISSIONS BY 5 TO 10 PERCENT, DEPENDING ON THE VARIOUS 12 SOURCES OR EMISSIONS. 13 CHAIRMAN LLOYD: QUESTIONS? 14 BOARD MEMBER EDGERTON: I DON'T WANT -- I WOULD 15 LIKE TO HEAR WHAT THE STAFF HAD TO SAY TO SUPERVISOR 16 DESAULNIER ABOUT THE QUESTION, AND THEN I HAVE MY COMMENTS. 17 MR. KENNY: I GET A SHOT AT THAT, AND I THINK THE 18 QUESTION IS A VERY GOOD ONE. 19 HISTORICALLY, WHAT WE HAVE BEEN TRYING TO DO IS 20 ESSENTIALLY FOCUS ON EMISSION REDUCTIONS THROUGH ZERO 21 TECHNOLOGIES, AND IF YOU LOOK AT SOME OF THE THINGS THAT THIS 22 BOARD HAS DONE OVER THE YEARS, THEY HAVE BASICALLY BEEN VERY 23 SUCCESSFUL IN ACHIEVING SUCCESS IN THAT ARENA. 24 AT THE SAME TIME, WE HAVE LOOKED AT TCM 25 HISTORICALLY, AND YOU NOTED THERE HAS BEEN SOME DIFFICULTY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 WITH TCM BOTH POLITICALLY AND SOCIALLY THROUGHOUT THE STATE. 2 I THINK AS THE STATE CONTINUES TO GROW AND AS WE 3 CONTINUE TO HAVE A FAIR AMOUNT OF SUCCESS WITH REGARD TO THE 4 ZERO AND NEAR ZERO TECHNOLOGY, THERE IS AN ABSOLUTE NEED TO 5 BLEND WHERE WE HAVE GONE WITH THE TECHNOLOGY AND THE KINDS OF 6 THINGS THAT SUPERVISOR DESAULNIER WAS TALKING ABOUT AND THE 7 WITNESSES WERE TALKING ABOUT. 8 ONE OF THE THINGS THAT WE TRIED TO DO IN THE LAST 9 YEAR TO SOMEWHAT ACCOMPLISH THAT IS THAT WE DID HAVE A ONE 10 DAY, TWO DAY SYMPOSIUM IN WHICH WE INVITED LOCAL OFFICIALS TO 11 THE AIR RESOURCES BOARD, AND WE TALKED ABOUT AIR QUALITY 12 ISSUES AND SOME OF THE GROWTH ISSUES AS A WAY OF TRYING TO 13 MELD EVERYONE TOGETHER, LOOKING AT THE EMISSION REDUCTION 14 STRATEGIES THAT WE HAVE BEEN SUCCESSFUL AT AND WHERE WE HAVE 15 TO GO AS THE POPULATION CONTINUES TO GROW. 16 I SEE THAT THERE IS A LOT MORE TO DO THERE, AND I 17 THINK THERE IS A LOT MORE TO TRY TO ACCOMPLISH WITH REGARD TO 18 MELDING. 19 SO, I DO NOT HAVE ANY GREAT ANSWER TO YOUR 20 QUESTION. 21 I THINK IT REALLY IS A SITUATION IN WHICH IN ONE 22 HAND WE HAVE BEEN VERY SUCCESSFUL AND ON THE OTHER HAND THERE 23 IS A LOT MORE TO DO, AND I THINK WE NEED TO START TO PURSUE 24 MORE OF THE KINDS OF THINGS THAT WE DID EARLIER THIS YEAR AND 25 BASICALLY BRING A LOT OF OLD STUFF FROM THE OFFICIALS HANDS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 AND GIVE THEM A SENSE OF WHAT WE ARE TRYING TO DO AND THEN 2 TRIED TO TWIST AND STRATAGIZE ABOUT THE NEXT GUESS THAT WE 3 CAN TAKE TO OFFICIALLY BLEND THESE THINGS TOGETHER AND THEN 4 MOVE FORWARD. 5 SO, IT IS KIND OF A PLACE WHERE WE ALMOST HAVE TO 6 GO. 7 CHAIRMAN LLOYD: JOHN ALSO ASKED SPECIFIC QUESTION 8 OF STAFF TO LOOK INTO THE AUTHORITY. 9 IS THAT SOMETHING THAT STAFF COULD DO? 10 MR. KENNY: WE ARE HAPPY TO DO THAT. 11 BOARD MEMBER DESAULNIER: PERHAPS, MIKE, TOO, ONE 12 OF THE THINGS THAT YOU COULD REALLY HELP US, THE DISTRICT, IS 13 TO, AS A STATE AGENCY, HELP US WITH THE PARTNERS IN THE 14 VALLEY AS TO SOME OF THE GROWTH ISSUES AS WE ARE STRUGGLING A 15 LITTLE WITH THAT. 16 WE HAVE STARTED SOME INITIATIVES TO COMMUNICATE 17 WITH THEM ABOUT GROWTH AND THE AIR POLLUTION AND THE WATER 18 QUALITY. INASMUCH AS THE TRANSPORT ISSUE WAS PART OF THIS, 19 AND HOW WE AS THE STATE AGENCY CAN HELP THE BAY AREA DISTRICT 20 DEAL WITH OUR DOWNWIND NEIGHBORS AROUND GROWTH, BUT ALL THESE 21 ISSUES, AND I WILL SHARE WITH ALL OF YOU, I REMEMBER SITTING 22 IN ONE, TWO MEETINGS AFTER GOING TO LOS ANGELES DEALING WITH 23 GROWTH IN THE BAY AREA AND REALIZING THAT SOME OF THE THINGS 24 THAT THE CHAIRMAN HAS WORKED ON IN TERMS OF ALTERNATIVE FUELS 25 AND HYBRID CARS, THINKING THIS IS GREAT, AND WE ARE GOING TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 REALLY DROP TAIL PIPE EMISSIONS, BUT IF IT BECOMES MORE 2 ATTRACTIVE FOR PEOPLE TO BUY THOSE CARS AND COMMUTE ON TO 3 TRACY AND STOCKTON, YOU LOSE THE AIR QUALITY BENEFITS, BUT 4 YOU DO NOT SOLVE SOMEBODY ELSE'S SOCIAL PROBLEMS THAT ARE NOW 5 A PURVIEW OF THIS BOARD, BUT WE ARE STRUGGLING FOR WHERE THAT 6 PURVIEW AND AUTHORITY SHOULD BE. 7 CHAIRMAN LLOYD: YES, LYNN. 8 BOARD MEMBER EDGERTON: YES. 9 WOULD YOU KINDLY GIVE US A LITTLE BACKGROUND ON 10 YOURSELF. 11 MR. HOLTZCLEW: YES. I AM JOHN HOLTZCLEW. 12 I USED TO DESIGN NUCLEAR POWER REACTORS FOR 13 WESTINGHOUSE AND G.E. 14 I LEFT THAT IN THE ANTI-WAR YEARS AND WENT BACK AND 15 GOT A PH.D., IN IRVINE, IN SOCIOLOGY, SO I WOULD HAVE THE 16 SOCIOLOGICAL PART TO BALANCE THE ENGINEERING, AND I WORKED AT 17 ABAG FOR FIVE YEARS DOING REGIONAL GROWTH PLANNING 18 PROJECTIONS. 19 THEN I HAVE BEEN ACTIVE IN THE SIERRA CLUB FOR 25 20 YEARS. SO, I AM THE CHAIR OF THE SIERRA CLUB'S NATIONAL 21 TRANSPORTATION COMMITTEE AND ON THE SAN FRANCISCO GROUPS 22 EXECUTIVE COMMITTEE. 23 BOARD MEMBER EDGERTON: SO, YOU ARE THE JOHN 24 HOLTZCLEW THAT I HAVE HEARD OF OVER THE YEARS? 25 YES, YOU ARE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 MR. HOLTZCLEW: THERE ARE MORE THAN ONE OF US. 2 BOARD MEMBER EDGERTON: I WOULD LIKE TO SAY THAT 3 MOST OF YOU ARE AWARE OF GOVERNOR DAVIS'S COMMITMENT FOR THE 4 TWENTY-FIRST CENTURY INFRASTRUCTURE THAT WILL HOPEFULLY MAKE 5 SOME PROPOSAL WITH RESPECT TO LAND USE THAT MAY BE A PLACE 6 WHERE THE SUGGESTIONS MIGHT BE OF VALUE. 7 THE SECOND COMMENT THAT I HAVE IS THAT EACH ONE OF 8 THESE THAT YOU RECOMMEND, WELL, THE FIRST THREE, HAVE TO DO 9 WITH SPENDING AUTHORITY, AND I WAS WONDERING WHETHER YOU WERE 10 ASKING OUR COUNSEL TO LOOK AT IT WHETHER YOU GOT A RESPONSE 11 FROM THE MTA COUNSEL, I MEAN, WHAT DID THEIR LAWYER SAY? 12 DID THEY SAY THEY COULD NOT DO THIS WITHOUT THE 13 STATE AUTHORITY? 14 MR. HOLTZCLEW: I HEARD NOTHING FROM MTC ABOUT THAT 15 IN THE MONTH SINCE I MADE THE SUGGESTION. 16 BOARD MEMBER EDGERTON: HAVE YOU SPECIFICALLY 17 CONTACTED LEGAL COUNSEL FOR THEIR DECISION ABOUT WHETHER THEY 18 HAVE THE AUTHORITY TO FUND ONLY TRANSPORTATION SYSTEM 19 EXPANSIONS WITHIN CITIES AND COUNTIES THAT HAVE ZONING TO 20 STOP SPRAWL GROWTH? 21 MR. HOLTZCLEW: NO. 22 BOARD MEMBER EDGERTON: I RECOMMEND THAT IS A PLACE 23 TO START SO THAT OUR LEGAL COUNSEL WOULD HAVE THE BENEFIT OF 24 THAT. 25 MTA'S VIEW IS THAT SPENDING ISSUES COULD BE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 AFFECTED BY FAIRNESS AMONG THE DIFFERENT COUNTIES AS YOU WELL 2 KNOW. 3 MR. KENNY: I MIGHT ADD, AS WE ANSWER THE 4 QUESTIONS, WE WILL COORDINATE WITH MTC TO MAKE SURE WE HAVE 5 AN UNDERSTANDING OF THE PICTURE AND GO IN THE RIGHT 6 DIRECTION. 7 CHAIRMAN LLOYD: FIVE YEARS ABAG -- DID YOU DECLARE 8 VICTORY AND LEAVE OR DECLARE -- 9 BOARD MEMBER DESAULNIER: HE SAW THE FUTURE AND 10 WANTED TO GET OUT. 11 MR. HOLTZCLEW: I WAS FRUSTRATED WITH THE LACK OF 12 POWER AND AUTHORITY. 13 I DECIDED I COULD DO MORE AS AN ACTIVIST THAN 14 RESEARCHER. 15 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 16 MR. HOLTZCLEW: THANK FOR HOLDING THE HEARING HERE. 17 CHAIRMAN LLOYD: WHEN WE TALK ABOUT THE EXPEDITING 18 OF THE DELIVERY OF THIS PLAN TO EPA, WHAT TIME FRAME ARE WE 19 TALKING ABOUT? 20 MS. MARVIN: TURN AROUND IN THE NEXT WEEK OR TWO. 21 CHAIRMAN LLOYD: THANK YOU. 22 COMMENTS FROM THE BOARD? 23 BOARD MEMBER DESAULNIER: IF THERE ARE NO OTHER 24 QUESTIONS OR COMMENTS, I HAVE A COMMENT. 25 I WANT TO THANK THE DISTRICT STAFF AND ALL AGENCIES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 THAT HAVE WORKED TO GET TO THIS POINT, AND FOR MYSELF, I AM 2 APPRECIATIVE OF STAFF AND WHAT THE PEOPLE HAVE DONE, AND I 3 WOULD BE HAPPY TO MOVE THE STAFF RECOMMENDATION -- UNLESS THE 4 STAFF WANTS TO CUT ME OFF. 5 KATHLEEN IS MOVING AROUND TO PUT THE LEGAL WORDS -- 6 MS. WALSH: THERE ARE WRITTEN COMMENTS THAT WE WANT 7 TO ENTER INTO THE RECORD. 8 MR. HONCOOP: WE RECEIVED A LETTER, JULY 12, FROM 9 ENVIRONMENTAL LAW AND JUSTICE CLINIC, AND REFERENCES PREVIOUS 10 COMMENTS BEFORE THE BAY AREA AQMD BE INCORPORATED, AND GOES 11 ON TO STATE THE PLAN IS FLAWED BECAUSE IT DOES NOT ANALYZE 12 THE 1998 OZONE LEVELS, AND THE PLAN WILL NOT RESULT IN 13 ATTAINMENT. 14 THE RESPONSE IS THAT WE ACKNOWLEDGED THAT IN THE 15 STAFF RESPONSE, AND IT IS IMPORTANT TO FOCUS ON THE 20 TONS A 16 DAY OF REDUCTIONS IN THE PLAN, AN ADDITIONAL REDUCTION. 17 SECOND PIECE OF CORRESPONDENCE WAS FAX RECEIVED 18 FROM MICHAEL BARR, OF PILLSBURY, MATTISON AND SUTRO, RECEIVED 19 JULY 19, FOR THE CREDIT FOR SPARE THE AIR, AN ISSUE THAT WE 20 HAVE TALKED ABOUT IN THE PRESENTATION AND FOLLOW-UP WITH 21 ADDITIONAL COMMENTS. 22 FINALLY, A THIRD PIECE OF CORRESPONDENCE WAS A 23 LETTER, JULY 5, FROM SHERMAN LEWIS, OF THE HAYWARD AREA 24 PLANNING ASSOCIATION, RAISING A NUMBER OF ISSUES SIMILAR TO 25 WHAT WE WERE TALKING ABOUT BEFORE, QUESTIONING ADEQUACY FOR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 CONTROL MEASURES IN THE PLAN, AND THE SECOND ISSUE HE RAISED, 2 MOTOR VEHICLES EMISSION INVENTORY WAS UNDERQUANTIFIED, AND 3 THE DISTRICT HAS USED THE BEST AVAILABLE MODEL AND EMISSIONS 4 ARE IMPROVED, AND WE ARE WORKING ON A NEW EMISSIONS INVENTORY 5 MODEL. 6 THIRD COMMENT REQUESTED SIMILAR, WHICH STANDARD, 7 AND THIS IS THE FEDERAL PLAN AND THE FEDERAL STANDARDS 8 APPLIES. 9 FINALLY, HE COMMENTED ON THE NEED FOR NEW VEHICLE 10 TRAVEL MODEL, AND THE RESPONSE IS THAT WE HAVE MET WITH THE 11 METROPOLITAN TRANSPORTATION COMMISSION STAFF, AND WE ARE 12 TRACKING THE DEVELOPMENT OF THE NEW MODELS THAT PROVIDE 13 BETTER DATA ON THE EMISSIONS. 14 THAT CONCLUDES THE COMMENTS THAT WE RECEIVED. 15 CHAIRMAN LLOYD: OKAY. 16 BOARD MEMBER DESAULNIER: MAY I PROCEED? 17 I MOVE THE STAFF RECOMMENDATION. ALSO, WITH THE 18 COMMENT THAT I UNDERSTAND FROM THE CHAIRMAN THAT STAFF IS 19 GOING TO RESPOND TO THE QUESTIONS FROM DR. HOLTZCLEW AND THE 20 OTHER PEOPLE THAT SPOKE. 21 BOARD MEMBER RIORDAN: SECOND. 22 CHAIRMAN LLOYD: ALL IN FAVOR, SAY AYE. 23 ANY OPPOSED, NAY. 24 AGAIN, CONGRATULATIONS, AND I HOPE YOU ARE 25 SUCCESSFUL BRINGING THE BAY AREA INTO COMPLIANCE, AND THEN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 THE NEXT COMPLIANCE IS COMPLIANCE WITH THE STATE STANDARD, 2 AND WE LOOK FORWARD TO WORKING COOPERATIVELY IN THE YEARS 3 AHEAD. 4 THANK YOU FOR THE COOPERATION. WE ARE ALL 5 STAKEHOLDERS IN THIS. 6 THANK YOU. 7 I WILL ALLOW A MOMENT TO CHANGE TO THE NEXT ITEM ON 8 THE POWER PLANT DOCUMENT. 9 THE NEXT ITEM ON THE AGENDA IS 99-6-2. 10 I HAVE DEDICATED MY CHAIRMANSHIP TO WHAT I HAVE 11 CALLED THE COUNT-DOWN-TO-ZERO. GOVERNOR DAVIS EXPRESSED THE 12 SAME SENTIMENTS AT OUR FUEL CELL PARTNERSHIP EVENT IN APRIL 13 WHEN HE SAID CALIFORNIA'S GOAL FOR VEHICULAR EMISSIONS IS 14 SIMPLE, ZERO, ZIP, NADA. 15 WE NEED TO ACHIEVE THAT GOAL FOR AS MANY EMISSION 16 SOURCES AS WE POSSIBLY CAN TO MEET OUR PUBLIC HEALTH 17 OBJECTIVES. 18 POWER PLANTS ARE A CRUCIAL PART OF THIS STRATEGY. 19 NOT ONLY ARE THEY LARGE EMISSION SOURCES IN THEIR OWN RIGHT, 20 THEY CAN ALSO TRANSPORT EMISSIONS FOR SEVERAL MILES DOWNWIND 21 DUE TO THE HEIGHT OF THEIR STACKS, EFFECTING BOTH URBAN AND 22 WILDERNESS AREAS. 23 IN ADDITION, POWER PLANTS ARE THE SOURCE OF 24 UPSTREAM, LIFE-CYCLE EMISSIONS FROM ELECTRIC VEHICLES. 25 FINALLY, OUR CHOICES ABOUT POWER GENERATION PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 CONTRIBUTE DIRECTLY TO FUEL CONSUMPTION, ENERGY EFFICIENCY 2 AND GLOBAL CLIMATE CHANGE EMISSIONS. 3 SO, IT MATTERS HOW CLEAN THEY ARE. AT THE SAME 4 TIME, WE NEED TO ACCOMMODATE OTHER SOCIETAL NEEDS AS WE HEAD 5 DOWN THE ZERO EMISSIONS PATH. 6 I THINK THE ARTICLE IN TODAY'S CHRONICLE REFLECTED 7 AGAIN THE CHALLENGE THAT WE FACE THERE IN THE ENERGY NEEDS OF 8 CALIFORNIA. 9 AGAIN, POWER PLANTS ARE A CASE IN POINT. WE ARE IN 10 THE MIDST OF A VAST DEREGULATORY PROCESS THAT IS CHANGING THE 11 FACE OF CALIFORNIA'S ENERGY SUPPLIES. 12 SOME 30-ODD NEW POWER PLANTS ARE NOW ON THE DRAWING 13 BOARD WITH SEVERAL ADVANCING TO THE PERMITTING STAGE. OUR 14 EXPECTATIONS OF THE POWER PLANT PROPONENTS HAVE TO BE CLEAR, 15 FAIR, TECHNOLOGICALLY ACHIEVABLE AND COST EFFECTIVE. 16 THE GUIDANCE WE ARE ABOUT TO CONSIDER WAS DEVELOPED 17 BY STAFF, IN CONSULTATION WITH ALL THE AFFECTED PARTIES. THE 18 ARB HAS ALWAYS WORKED CLOSELY WITH THE ENERGY COMMISSION, BUT 19 WE'RE WORKING EVEN MORE CLOSELY WITH THEM NOW, AND CEC 20 COMMISSIONER BOB LAURIE IS ACTUALLY HERE WITH US TODAY TO 21 PARTICIPATE IN THIS PROCEEDING. 22 STAFF WILL MAKE A PRESENTATION TODAY. SO, I THINK 23 IT IS AN IMPORTANT MEETING FOR US TODAY. IT IS A VERY 24 IMPORTANT DISCUSSION ITEM FOR MANY, IMPORTANT DISCUSSIONS OF 25 THE VARIOUS TECHNOLOGIES HERE AND ON THE HORIZON. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 IT IS EXCITING TO SEE ACTIVITY GOING ON AS WE HAVE 2 SEEN IN THE MOBILE SOURCE, TREMENDOUS PROGRESS, WE ARE SEEING 3 THAT OCCURRING IN THE STATIONARY POWER PLANT PHASE, AND WE 4 SEE THAT IN TERMS OF CONVENTIONAL POWER PLANTS AND THE VERY 5 CLEAN, SUCH AS FUEL CELLS. 6 THIS IS VERY ENCOURAGING, AND WE ARE GOING THROUGH 7 A DYNAMIC PROCESS WITH THE RESTRUCTURING, AND IT IS 8 CHALLENGING AND AN EXCITING TIME. 9 I WOULD LIKE MR. KENNY TO INTRODUCE THE ITEM. 10 MR. KENNY: THANK YOU, MR. CHAIRMAN. 11 IN 1996, LEGISLATION WAS ENACTED DEREGULATING THE 12 ELECTRIC UTILITY INDUSTRY IN CALIFORNIA TO CREATE A 13 COMPETITIVE, OPEN-MARKET SYSTEM TO SERVE THE ELECTRICITY 14 NEEDS OF HOMES, BUSINESSES, INDUSTRY AND FARMS. 15 IN RESPONSE, THERE HAS BEEN AN INCREASE IN THE 16 NUMBER OF PROPOSED NEW MAJOR POWER PLANTS OVER THE NEXT FEW 17 YEARS. 18 THESE NEW POWER PLANTS TOTAL OVER 22,000 MEGAWATTS 19 AND REPRESENT A SIGNIFICANT EMISSIONS SOURCES EVEN WITH THE 20 APPLICATION OF STATE-OF-THE-ART EMISSION CONTROL 21 TECHNOLOGIES. 22 CALIFORNIA ENERGY COMMISSION REGULATIONS PERMIT 23 AND, IN SOME CASES, REQUIRE THAT STATE AND LOCAL AGENCIES 24 PARTICIPATE IN THE POWER PLANT SITING PROCESS. 25 THIS PARTICIPATION IS INTENDED TO ENSURE THAT POWER PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 PLANTS COMPLY WITH ALL APPLICABLE LAWS, ORDINANCES, 2 REGULATIONS AND STANDARDS. 3 BASED ON OUR OWN ASSESSMENT OF AVAILABLE 4 INFORMATION AND DISCUSSIONS WITH INTERESTED PARTIES, WE ARE 5 PROPOSING GUIDANCE THAT PROVIDES A BASIS FOR AIR RESOURCES 6 BOARD STAFF'S POSITION IN ITS REVIEW OF THESE POWER PLANT 7 PERMITTING DECISIONS. 8 SINCE FEBRUARY 1999, STAFF HAS WORKED WITH LOCAL 9 AIR DISTRICTS, THE CALIFORNIA ENERGY COMMISSION, ELECTRIC 10 POWER PRODUCERS, AFFECTED INDUSTRY, ENVIRONMENTAL GROUPS AND 11 THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY IN 12 DEVELOPING THE GUIDANCE. 13 THE PROPOSED GUIDANCE BEFORE YOU TODAY REPRESENTS 14 THE PRODUCT OF THAT EFFORT. AS PROPOSED, THE GUIDANCE IS 15 EXPECTED TO ASSIST DISTRICTS IN MAKING DECISIONS AS THEY 16 PARTICIPATE IN THE POWER PLANT SITING PROCESS. 17 IT WILL PROVIDE AFFECTED PARTIES WITH AN 18 UNDERSTANDING OF WHAT POSITION ARB STAFF WILL TAKE IN ITS 19 REVIEW OF PROPOSED PROJECTS. 20 IT WILL ALSO PROVIDE DISTRICTS WITH INFORMATION TO 21 ASSIST THEM IN MAKING BEST AVAILABLE CONTROL TECHNOLOGY 22 DETERMINATIONS AND PROMOTE POWER PLANT CONSTRUCTION AND 23 OPERATION THAT MINIMIZES OR ELIMINATES ADVERSE AIR QUALITY 24 IMPACTS. 25 MR. MIKE TOLLSTRUP OF THE STATIONARY SOURCE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 DIVISION WILL EXPLAIN OUR PROPOSAL TO YOU. 2 MR. TOLLSTRUP: GOOD MORNING, MR. CHAIRMAN AND 3 MEMBERS OF THE BOARD. 4 FOR THIS AGENDA ITEM, STAFF WILL PRESENT PROPOSED 5 GUIDANCE FOR POWER PLANT SITING AND BEST AVAILABLE CONTROL 6 TECHNOLOGY. 7 BEFORE GOING INTO THE SPECIFIC RECOMMENDATIONS OF 8 THE GUIDANCE DOCUMENT, STAFF WILL BRIEFLY PROVIDE SOME 9 BACKGROUND ON THE PURPOSE OF THE GUIDANCE, THE IMPACTS OF 10 DEREGULATION ON THE ELECTRIC UTILITY INDUSTRY AND THE POWER 11 PLANT SITING PROCESS. 12 THE PROPOSED GUIDANCE DOCUMENT IS INTENDED TO 13 PROVIDE ARB'S PERSPECTIVE ON THE CURRENT STATUS OF BEST 14 AVAILABLE CONTROL TECHNOLOGY, BACT, FOR LARGE NEW GAS TURBINE 15 PROJECTS. 16 IN ADDITION, THE GUIDANCE IS INTENDED TO ASSIST 17 DISTRICTS AND PROVIDE INFORMATION TO POTENTIAL APPLICANTS ON 18 CALIFORNIA REGULATORY REQUIREMENTS. 19 WE WOULD EXPECT THE DISTRICTS WOULD USE THE 20 GUIDANCE TO ASSIST THEM IN THEIR FORMAL CASE-BY-CASE BASIS 21 BACT DETERMINATIONS, EVALUATING OTHER PROJECT-SPECIFIC 22 CONSIDERATIONS, AIR QUALITY CONSIDERATIONS AND ADVANCES IN 23 TECHNOLOGY. 24 IN 1996, THE LEGISLATURE PASSED A LAW WHICH 25 DEREGULATED THE ELECTRIC INDUSTRY TO CREATE A COMPETITIVE, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 OPEN MARKET SYSTEM FOR SERVING THE ELECTRICITY NEEDS OF 2 HOMES, BUSINESSES, INDUSTRY AND FARMS. 3 MR. CHRIS TOOKER, FROM THE CALIFORNIA ENERGY 4 COMMISSION, WILL GIVE A BRIEF PRESENTATION FOLLOWING STAFF'S 5 PRESENTATION ON DEREGULATION AND ITS IMPACT IN CALIFORNIA. 6 IN RESPONSE TO DEREGULATION, CEC STAFF HAVE 7 IDENTIFIED 35 PLANTS PROPOSED FOR CONSTRUCTION WITHIN 8 CALIFORNIA IN THE NEXT FEW YEARS, TOTALING MORE THAN 22,000 9 MEGAWATTS IN GENERATION CAPACITY. 10 IN 1998, THE TOTAL IN-STATE INSTALLED ELECTRICAL 11 GENERATION CAPACITY WAS 53,7000 MEGAWATTS. 12 CEC STAFF HAS ESTIMATED THE DEMAND FOR ELECTRICITY 13 WILL INCREASE TO 68,000 MEGAWATTS BY 2015. THIS REPRESENTS 14 ADDITIONAL MINIMUM CAPACITY NEED OF 14,300 MEGAWATTS OVER THE 15 NEXT 17 YEARS. 16 THE CEC HAS EXCLUSIVE AUTHORITY FOR LICENSING MAJOR 17 POWER PLANT PROJECTS 50 MEGAWATTS AND LARGER IN SIZE. 18 PROJECTS LESS THAN 50 MEGAWATTS ARE SUBJECT TO LOCAL DISTRICT 19 PERMIT PROGRAMS. 20 THE CEC CITING PROCESS CONSISTS OF TWO PHASES. THE 21 FIRST PHASE IS THE NOTICE OF INTENTION, NOI, TO FILE AN 22 APPLICATION FOR CERTIFICATION. 23 THE NOI PROCESS HAS TRADITIONALLY BEEN USED TO 24 DETERMINE THE NEED FOR A PROPOSED POWER PLANT, SITE 25 ACCEPTABILITY AND SUITABILITY AND ALTERNATIVES TO A PROPOSED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 PROJECT. 2 WITH THE DEREGULATION OF THE ELECTRIC UTILITY 3 INDUSTRY, APPLICANTS ARE REQUESTING AND RECEIVING EXEMPTION 4 FROM THE NOI PHASE. 5 RECENTLY, THE CEC AMENDED ITS POLICIES AND 6 PROCEDURES TO PROVIDE AND EXEMPTION FROM THE NOI PROCESS FOR 7 NATURAL GAS-FIRED MERCHANT POWER PLANT PROJECTS. 8 THE SECOND PHASE OF THE CEC PROCESS IS THE 9 APPLICATION FOR CERTIFICATION, AFC. IT IS IN THIS PHASE THAT 10 THE PROPOSED POWER PLANT IS EXAMINED TO ENSURE THAT IT IS 11 SAFE, RELIABLE, ENVIRONMENTALLY SOUND AND COMPLIES WITH ALL 12 APPLICABLE REQUIREMENTS. 13 THE CEC PROCESS PROVIDES FOR LOCAL AND STATE AGENCY 14 AND PUBLIC PARTICIPATION IN THE SITING OF MAJOR POWER PLANTS. 15 LOCAL DISTRICTS PARTICIPATE IN THE SITING PROCESS 16 THROUGH THE PREPARATION OF A DETERMINATION OF COMPLIANCE, 17 DOC. IT IS THROUGH THE DOC THAT DISTRICTS DETERMINE WHETHER 18 A PROJECT COMPLIES WITH ALL APPLICABLE LOCAL, STATE AND 19 FEDERAL REQUIREMENTS. 20 AT THE DISTRICT LEVEL, THE DOC TAKES THE PLACE OF 21 THE REVIEW PERFORMED FOR AUTHORITY TO CONSTRUCT PERMIT 22 APPLICATIONS. 23 THE DOC IS INCLUDED AS PART OF THE CEC'S STAFF 24 ASSESSMENT FOR A PROJECT. 25 UPON CONSTRUCTION OF A FACILITY, DISTRICTS ISSUE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 THE APPROPRIATE OPERATING PERMITS AND PURSUE NORMAL 2 COMPLIANCE ACTIVITIES. 3 UPON REQUEST, ARB STAFF PROVIDES TECHNICAL 4 ASSISTANCE TO LOCAL AIR DISTRICTS AND CEC STAFF. THE 5 PROPOSED GUIDANCE IS TIMELY GIVEN THAT THERE ARE 10 PROPOSED 6 POWER PLANTS CURRENTLY GOING THROUGH THE SITING PROCESS AND 7 WILL GREATLY ASSIST IN THE SITING OF THE ADDITIONAL POWER 8 PLANTS EXPECTED OVER THE NEXT FEW YEARS. 9 THE ARB PARTICIPATES IN THE CEC SITING PROCESS 10 THROUGH REVIEWING AND COMMENTING ON THE DISTRICT'S DOC. 11 WHAT WE ARE SEEING IN THE WAY OF NEW PROPOSED POWER 12 PLANTS ARE LARGE, NATURAL GAS-FIRED COMBINED-CYCLE AND 13 COGENERATION TURBINES EQUIPPED WITH STATE-OF-THE-ART EMISSION 14 CONTROLS WITH GENERATING CAPACITIES RANGING FROM 125 15 MEGAWATTS TO OVER 1,000 MEGAWATTS. 16 THESE UNITS ARE TO BE OPERATED AS MERCHANT MODE, 17 MEANING POWER WILL BE PRODUCED DEPENDING ON DEMAND WITH 18 FREQUENT STARTUPS AND SHUTDOWNS OF THE TURBINES. 19 EMISSIONS FROM JUST ONE OF THESE FACILITIES IS 20 EXPECTED ON AVERAGE TO BE 150 TO 250 TONS A YEAR FOR NOX; 480 21 TO 630 TONS PER YEAR FOR CARBON MONOXIDE; 20 TO 100 TONS PER 22 YEAR FOR VOLATILE ORGANIC COMPOUNDS; 90 TO 120 TONS PER YEAR 23 FOR PM 10; AND 10 TO 40 TONS PER YEAR FOR SULFUR OXIDES. 24 THIS REPRESENTS EMISSIONS FROM A TYPICAL-SIZED 25 PROJECT RANGING FROM 500 TO APPROXIMATELY 700 MEGAWATTS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 EMISSIONS WILL BE MORE OR LESS DEPENDING ON THE SIZE OF THE 2 PROJECT. 3 THE GUIDANCE DOCUMENT COVERS FIVE MAIN AREAS, 4 INCLUDING BACT, EMISSIONS OFFSETS, AMBIENT AIR QUALITY IMPACT 5 ANALYSIS, HEALTH RISK ASSESSMENTS AND OTHER PERMITTING 6 CONSIDERATIONS. 7 IN DEVELOPING THE DOCUMENT, STAFF HELD A SCOPING 8 MEETING ON FEBRUARY 24, 1999, TO SOLICIT PUBLIC AND INDUSTRY 9 PARTICIPATION. THREE SUBSEQUENT WORKSHOPS WERE HELD ON MAY 10 21, MAY 25 AND JULY 6. 11 IN ADDITION, NUMEROUS MEETINGS WERE HELD WITH 12 INTERESTED PARTIES. 13 IN REVIEWING BACT, STAFF FOCUSED ON NATURAL 14 GAS-FIRED TURBINES USED FOR POWER PRODUCTION AND LIMITED OUR 15 REVIEW TO UNITS GREATER THAN 20 MEGAWATTS. 16 BACT WAS EVALUATED FOR THE FIVE CRITERIA 17 POLLUTANTS, INCLUDING NOX, CO, VOC, PM 10 AND SOX. 18 DUE TO THE LARGE SIZE OF THE PROPOSED POWER PLANTS 19 AND THEIR MERCHANT MODE OPERATION, TWO SPECIAL CONSIDERATIONS 20 WERE EVALUATED DURING THE BACT REVIEW. 21 THESE WERE THE EFFECT OF FREQUENT STARTUPS AND 22 SHUTDOWNS AND AMMONIA SLIP RESULTING FROM THE USE OF SCR, 23 SELECTIVE CATALYTIC REDUCTION CONTROL TECHNOLOGY. 24 AMMONIA SLIP OCCURS WHEN AMMONIA, USED AS A 25 REDUCING AGENT FOR NOX CONTROL WITH SCR, DOES NOT GET REACTED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 AND IS EMITTED DIRECTLY OUT THE STACK. 2 STAFF'S REVIEW OF BACT WAS CONSISTENT WITH DISTRICT 3 RULE DEFINITIONS AND INCLUDED ESTABLISHING CLASS OR CATEGORY 4 OF SOURCE. 5 FOR STAFF'S REVIEW, CLASS OR CATEGORY WAS 6 ESTABLISHED AS NATURAL GAS-FIRED TURBINES GREATER THAN 50 7 MEGAWATTS. 8 BACT IS DEFINED AS THE MOST STRINGENT OF THE 9 FOLLOWING, THE FIRST IS ACHIEVED IN PRACTICE. 10 STAFF SEARCHED FOR OPERATING FACILITIES THAT HAVE 11 BEEN TESTED OR HAVE CONTINUOUS EMISSIONS MONITORING DATA TO 12 SUPPORT AN ACHIEVABLE EMISSION LEVEL. 13 IN ORDER TO QUALIFY AS ACHIEVED IN PRACTICE, A 14 TECHNOLOGY MUST SHOW CONTINUED COMPLIANCE OVER TIME WITH AN 15 EMISSION LIMIT. 16 FOR THE US EPA, THIS TIME LIMIT IS TYPICALLY SIX 17 MONTHS. THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 18 REQUIRES TWELVE MONTHS FOR THIS DEMONSTRATION. 19 NEXT STAFF REVIEWED IDENTIFIED SIP MEASURES AND 20 LOCAL, STATE AND FEDERAL RULES FOR STRINGENT EMISSION LIMITS. 21 THE FINAL CATEGORY EVALUATED WAS TECHNOLOGICALLY 22 FEASIBLE AND COST EFFECTIVE. HERE STAFF EVALUATED CUTTING 23 EDGE TECHNOLOGIES THAT HAVE NOT YET BRIDGED THE GAP TO 24 ACHIEVED IN PRACTICE. 25 TWO VERY PROMISING TECHNOLOGIES THAT WE HAVE LOOKED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 AT INCLUDED SCONOX AND CATALYTICA SYSTEMS. 2 IN ADDITION TO THE CRITERIA JUST MENTIONED, THERE 3 MAY BE CONSIDERATION DONE ON A CASE-BY-CASE BASIS WHERE IT 4 CAN BE JUSTIFIED THAT PROJECT CIRCUMSTANCES MERIT SPECIAL 5 CONSIDERATION. 6 THE GUIDANCE SPECIFIES BACT LEVELS FOR SIMPLE-CYCLE 7 AND COMBINED-CYCLE, COGENERATION CONFIGURATIONS. IN THE 8 SIMPLE CYCLE CONFIGURATION, EXHAUST HEAT FROM THE TURBINE IS 9 NOT RECOVERED AND, THEREFORE, LOST THROUGH THE STACK. 10 THIS RESULTS IN HIGHER STACK GAS TEMPERATURES WHICH 11 IMPACT THE PERFORMANCE OF THE CONTROL SYSTEMS. EXHAUST HEAT 12 IS RECOVERED IN COMBINED-CYCLE AND COGENERATION UNITS, 13 EFFECTIVELY LOWERING STACK GAS TEMPERATURES AND IMPROVING 14 EFFICIENCY OF THE CONTROL SYSTEMS. 15 BASED ON STAFF'S REVIEW, THE FOLLOWING BACT LEVELS 16 ARE RECOMMENDED FOR MAJOR POWER PLANTS OF SIMPLE-CYCLE 17 CONFIGURATION; 5 PPM NOX MEASURED ON A THREE-HOUR ROLLING 18 AVERAGE; 6 PPM CO MEASURED ON A THREE-HOUR ROLLING AVERAGE; 2 19 PPM VOC MEASURED ON A THREE-HOUR ROLLING AVERAGE. 20 FOR COMBINED-CYCLE AND COGENERATION CONFIGURATIONS, 21 STAFF RECOMMENDS: TWO AND A HALF PPM NOX MEASURED ON A 22 ONE-HOUR ROLLING AVERAGE, OR EQUIVALENTLY, TWO PPM ON A 23 THREE-HOUR ROLLING AVERAGE; 6 PPM CO MEASURED ON A THREE-HOUR 24 ROLLING AVERAGE; AND TWO PPM VOC MEASURED ON A ONE-HOUR 25 ROLLING AVERAGE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 THESE LEVELS ARE CONSISTENT WITH RECENT BACT 2 DETERMINATIONS MADE BY DISTRICTS. 3 FOR PM 10 AND SOX, STAFF RECOMMENDS FOR ALL TURBINE 4 CONFIGURATIONS THAT DISTRICTS ESTABLISH EMISSION LIMITS BASED 5 ON THE COMBUSTION OF NATURAL GAS CONTAINING NO MORE THAN ONE 6 GRAIN SULFUR PER 100 STANDARD CUBIC FEET. 7 FOR SOX, THIS WOULD BE EQUIVALENT TO NO MORE THAN 8 HALF PPM. 9 HERE AGAIN, THESE LEVELS ARE CONSISTENT WITH RECENT 10 DISTRICT BACT DETERMINATIONS. 11 IN ORDER TO GIVE THE BOARD AN IDEA OF THE 12 TREMENDOUS PROGRESS MADE IN REDUCING NOX EMISSIONS FROM GAS 13 TURBINES, THIS GRAPH SHOWS THAT OVER THE LAST 15 YEARS OR SO 14 NOX EMISSIONS HAVE DROPPED FROM APPROXIMATELY 95 PPM TO THE 15 CURRENT LEVEL OF 2.5 PPM. 16 WHEN CONSIDERING EFFICIENCY OF DIFFERENT FOSSIL 17 FUEL-FIRED FACILITIES, GAS TURBINE PROJECTS EMIT CONSIDERABLY 18 LESS ON A POUND OF NOX PER MEGAWATT-HOUR OF ELECTRICITY 19 PRODUCED. 20 THIS CHART SHOWS THAT THESE NEW POWER PLANTS 21 EMISSIONS ARE ALMOST 70 PERCENT LESS THAN A WELL-CONTROLLED 22 GAS-FIRED UTILITY BOILER AND BETTER THAN 90 PERCENT LESS THAN 23 A TYPICAL EAST COAST COAL-FIRED FACILITY. 24 THE LARGE SIZE AND RESULTING EMISSIONS FROM THESE 25 PROPOSED PROJECTS WILL TRIGGER OFFSET REQUIREMENTS IN EACH PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 DISTRICT. BECAUSE OF THE LARGE QUANTITY OF OFFSETS NEEDED TO 2 MITIGATE EACH OF THESE FACILITIES AND THE POTENTIAL FOR AIR 3 QUALITY IMPACTS, A COMPLETE AND THOROUGH PUBLIC PROCESS NEEDS 4 TO BE ENSURED DURING THE DOC PROCESS. 5 AS A RESULT, STAFF RECOMMENDS THE FOLLOWING 6 MILESTONES, WHICH ARE CONSISTENT WITH CEC REGULATIONS, BE MET 7 FOR SECURING OFFSETS. 8 FIRST, THE APPLICANT SHOULD MAKE EVERY EFFORT TO 9 SUBMIT A COMPLETE OFFSET PACKAGE AT THE TIME OF APPLICATION 10 SUBMITTAL. 11 TO THE EXTENT POSSIBLE, IDENTIFICATION AND 12 QUANTIFICATION OF PROPOSED OFFSETS SHOULD BE INCLUDED WITH 13 THE APPLICATION PACKAGE. 14 LETTERS OF INTENT SHOULD BE SIGNED FOR POTENTIAL 15 SOURCES OF OFFSETS BY THE TIME THE PRELIMINARY DOC IS ISSUED. 16 BY THE TIME THE FINAL DOC IS ISSUED, OPTION 17 CONTRACTS SHOULD BE SIGNED. 18 FINALLY, OFFSETS MUST BE SECURED AND IN PLACE PRIOR 19 TO COMMENCEMENT OF OPERATION. 20 THE NEED FOR LARGE QUANTITIES OF OFFSETS WILL 21 REQUIRE MANY OF THE PROPOSED POWER PLANTS TO SEEK OFFSETS 22 FROM A NUMBER OF NONTRADITIONAL AREAS. 23 TWO AREAS OF PARTICULAR CONCERN ARE INTERPOLLUTANT 24 AND INTERBASIN OFFSETS. 25 INTERPOLLUTANT TRADES INVOLVE TRADING ONE PRECURSOR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 POLLUTANT FOR ANOTHER. AN EXAMPLE WOULD BE TRADING VOC FOR 2 NOX, OR VICE VERSA, IN OZONE NONATTAINMENT AREAS. 3 INTERBASIN TRADING INVOLVES TRANSFERRING EMISSION 4 REDUCTIONS CREATED IN ONE AIR BASIN FOR USE IN ANOTHER. 5 BECAUSE OF THE UNCERTAINTIES INHERENT IN OFFSET 6 PROGRAMS, WE ARE RECOMMENDING THAT APPLICANTS, PRIOR TO 7 SEEKING INTERPOLLUTANT OR INTERBASIN TRADES, USE ALL 8 APPLICANT HELD ERCS AND EXHAUST ALL POTENTIAL ON-SITE 9 EMISSION REDUCTIONS. 10 HISTORICALLY, DISTRICTS HAVE REQUIRED THAT 11 INTERPOLLUTANT OFFSET RATIOS BE ESTABLISHED ON A CASE-BY-CASE 12 BASIS. 13 IN NO CASE SHOULD AN INTERPOLLUTANT RATIO BE LESS 14 THAN ONE-TO-ONE. FOR PM 10 AND PM 2.5 AND THEIR PRECURSORS, 15 A MINIMUM OF ONE-TO-ONE IS USED. 16 THIS IS CONSISTENT WITH LONGSTANDING ARB POLICY. 17 FOR OZONE PRECURSORS, STAFF IS IN THE PROCESS OF 18 DEVELOPING RATIOS FOR EACH AIR BASIN. 19 STAFF CONTINUES TO SUPPORT CASE-BY-CASE 20 JUSTIFICATIONS WHERE AN APPLICANT SO CHOOSES. HOWEVER, AS AN 21 ALTERNATIVE, STAFF IS PROPOSING TO PROVIDE FURTHER GUIDANCE 22 ON THESE RATIOS TO ASSIST DISTRICTS. 23 THE HEALTH AND SAFETY CODE ALLOWS FOR THE USE OF 24 INTERBASIN OFFSETS PROVIDED A NUMBER OF CRITERIA ARE MET. 25 FIRST, THE SOURCE OF THE OFFSETS MUST BE IN AN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 UPWIND AIR BASIN WITH A WORSE NONATTAINMENT CLASSIFICATION 2 THAN THE AIR BASIN WHERE THE PROJECT IS LOCATED. 3 THERE MUST BE AN ESTABLISHED TRANSPORT RELATIONSHIP 4 WITH OVERWHELMING TRANSPORT ON THE DOWNWIND DISTRICT. 5 INTERBASIN TRADES MUST BE APPROVED BY BOTH 6 DISTRICTS. THIS ALLOWS FOR CONSIDERATION OF AIR QUALITY 7 IMPACTS, PUBLIC HEALTH IMPACTS AND THE EFFECT ON REGIONAL 8 ECONOMY. 9 STAFF'S PROPOSED GUIDANCE FOR INTERBASIN OFFSETS IS 10 AS FOLLOWS. INTERBASIN TRADES ARE TO BE LIMITED TO 11 POLLUTANTS THAT HAVE REGIONAL IMPACTS. THIS INCLUDES OZONE 12 AND PM 10 PRECURSORS. 13 INTERBASIN OFFSET RATIOS ARE TO BE ESTABLISHED AT 14 NO LESS THAN TWO-TO-ONE FOR SOURCES WITHIN 50 MILES DISTANCE 15 BETWEEN THE SOURCE OF THE OFFSETS AND THE LOCATION OF THE 16 PROJECT. 17 THIS RATIO WOULD BE INCREASED BY ONE FOR EACH 18 ADDITIONAL 25 MILES. 19 FOR EXAMPLE, IF THE SOURCE OF THE OFFSETS IS 100 20 MILES FROM THE PROPOSED PROJECT, THE INTERBASIN RATIO WOULD 21 BE FOUR-TO-ONE. 22 IN MOST INSTANCES, DISTRICTS PERFORM AMBIENT AIR 23 QUALITY IMPACT ANALYSES AND HEALTH RISK ASSESSMENTS FOR MAJOR 24 POWER PLANTS. 25 STAFF IS NOT RECOMMENDING ANY NEW CHANGES TO THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 PROCEDURES ALREADY ESTABLISHED FOR EACH OF THESE. 2 THIS GUIDANCE DOCUMENT SUMMARIZES THE CURRENT 3 METHODS AND PROCEDURES FOLLOWED WHEN CONDUCTING AN AMBIENT 4 AIR QUALITY ANALYSIS OR HEALTH RISK ASSESSMENT. 5 PERMITS ISSUED FOR MAJOR POWER PLANTS NEED TO BE 6 DRAFTED IN A MANNER THAT WILL ENSURE ONGOING COMPLIANCE WITH 7 EMISSION LIMITS. 8 ANY ASSUMPTIONS OR SPECIFICATIONS USED IN THE 9 DISTRICTS TECHNICAL ANALYSIS THAT AFFECT EMISSIONS SHOULD BE 10 INCLUDED ON THE PERMITS AS ENFORCEABLE LIMITS. 11 WHEN EMISSION LIMITS ARE ESTABLISHED, SPECIFIC 12 REQUIREMENTS FOR MONITORING, REPORTING AND RECORDKEEPING NEED 13 TO BE ESTABLISHED TO ENSURE ONGOING COMPLIANCE. 14 AT A MINIMUM, WHERE CONTINUOUS EMISSIONS MONITORING 15 EQUIPMENT IS NOT INSTALLED, INITIAL AND ANNUAL SOURCE TESTING 16 SHOULD BE REQUIRED. 17 ARB STAFF WILL WORK CLOSELY WITH DISTRICTS TO 18 EVALUATE MONITORING REQUIREMENTS ON A CASE-BY-CASE BASIS. 19 STAFF IS PROPOSING THAT AMMONIA SLIP BE LIMITED TO 20 AS LOW A LIMIT AS POSSIBLE AND IN NO EVENT TO EXCEED 5 PPM. 21 HISTORICALLY, DISTRICTS HAVE REQUIRED 10 PPM FOR 22 AMMONIA SLIP, INCLUDING RECENT DETERMINATIONS FOR MAJOR POWER 23 PLANT PROJECTS. 24 WE BELIEVE LIMITING AMMONIA SLIP TO NO MORE THAN 5 25 PPM IS APPROPRIATE AND ACHIEVABLE. EACH DISTRICT SHOULD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 CAREFULLY CONSIDER THE IMPACTS OF AMMONIA EMISSIONS FROM 2 THESE PROJECTS, AND WHERE SIGNIFICANT CONCERNS ARE 3 IDENTIFIED, DISTRICTS MAY NEED TO AMEND THEIR NEW SOURCE 4 REVIEW RULES TO MINIMIZE THE IMPACTS. 5 AMMONIA LIMITS SHOULD BE VERIFIED WITH ANNUAL 6 SOURCE TESTING AND ONGOING COMPLIANCE ESTABLISHED WITH 7 MONITORING AND RECORDKEEPING REQUIREMENTS. 8 IN CONCLUSION, ARB STAFF RECOMMENDS THAT THE BOARD 9 APPROVE THE PROPOSED GUIDANCE FOR POWER PLANT SITING AND BEST 10 AVAILABLE CONTROL TECHNOLOGY. 11 HOWEVER, THERE ARE SOME TECHNICAL CORRECTIONS AND 12 CLARIFICATIONS THAT STAFF WOULD LIKE TO MAKE. TWO ITEMS THAT 13 I WOULD LIKE TO SPECIFICALLY MENTION ARE, THE GUIDANCE 14 ERRONEOUSLY SUGGESTS THAT CONTINUOUS EMISSIONS MONITORS BE 15 USED FOR VOC AND NH3, AMMONIA EMISSIONS. 16 STAFF ACKNOWLEDGES THAT THOSE ARE NOT ACCURATE CEMS 17 FOR MEASURING THESE POLLUTANTS; THEREFORE, WE ARE PROPOSING 18 TO REMOVE THIS REFERENCE FROM THE DOCUMENT. 19 THE SECOND ITEM INVOLVES A STATEMENT IN THE REPORT 20 THAT AMMONIA IS A LISTED TOXIC AIR CONTAMINANT IN CALIFORNIA. 21 THIS IS AN INCORRECT STATEMENT. 22 AMMONIA IS NEITHER A FEDERAL HAZARDOUS AIR 23 POLLUTANT NOR A STATE IDENTIFIED HAP. THERE ARE CURRENTLY NO 24 FEDERAL OR STATE CANCER VALUES FOR THIS POLLUTANT. 25 THE NON-CANCER HEALTH EFFECTS OF CONCERN ARE ACUTE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 AND CHRONIC EFFECTS THAT TARGET THE EYE AND RESPIRATORY 2 SYSTEMS. 3 OTHER CHANGES STAFF PROPOSES TO MAKE ARE 4 NONSUBSTANTIVE TECHNICAL CHANGES THAT WILL PROVIDE ADDITIONAL 5 CLARIFICATION IN THE GUIDANCE. 6 BECAUSE WE ACKNOWLEDGE THAT TECHNOLOGY IS 7 CONTINUING TO ADVANCE, STAFF INTENDS TO MONITOR TECHNOLOGY IN 8 THIS AREA. 9 THAT CONCLUDES MY PRESENTATION. THANK YOU. 10 CHAIRMAN LLOYD: THANK YOU, MR. KENNY. 11 DOES STAFF HAVE ANY COMMENTS AT THIS TIME? 12 MR. KENNY: NO. 13 CHAIRMAN LLOYD: MR. OMBUDSMAN, DO YOU HAVE ANY 14 ADDITIONAL COMMENTS AS TO THE PROCESS THAT STAFF UNDERTOOK 15 BEFORE WE GET STARTED? 16 MR. OULREY: THANK YOU, MR. CHAIRMAN AND MEMBERS OF 17 THE BOARD. 18 AS YOU HEARD FROM STAFF, THE GUIDANCE BEFORE YOU 19 HAS BEEN DEVELOPED WITH MANY PREPARATIONS STARTING IN 1999 20 AND THE PRESENT. 21 ARB INVITED 400 INDIVIDUALS AND COMPANIES TO 22 PARTICIPATE IN ADDITIONAL SCOPING MEETING ON FEBRUARY 24. 23 ABOUT 15 INDIVIDUALS ATTENDED THE MEETING, INCLUDING UTILITY 24 COMPANIES, EMISSION CONTROL VENDORS AND CALIFORNIA ENERGY 25 COMMISSION AND AIR DISTRICT REPRESENTATIVES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 ON APRIL 23, THE STAFF INVITED THE SAME LIST OF 2 ABOUT 400 INDIVIDUALS AND COMPANIES TO PARTICIPATE IN TWO 3 PUBLIC WORKSHOPS, ONE IN SACRAMENTO ON MAY 21, AND ONE IN 4 DIAMOND BAR, ON MAY 25. 5 APPROXIMATELY 60 INDIVIDUALS PARTICIPATED IN THESE 6 TWO WORKSHOPS, INCLUDING THE US EPA, UTILITY COMPANIES 7 REPRESENTATIVES, SUCH AS SOUTHERN CALIFORNIA EDISON AND 8 SACRAMENTO METROPOLITAN UTILITY DISTRICT AND POWER PLANT 9 REPRESENTATIVES SUCH AS HIGH DESERT POWER PLANT, PITTSBURG 10 DISTRICT ENERGY UTILITY AND SUTTER POWER PLANT, 11 REPRESENTATIVES FROM THE POLLUTION CONTROL INDUSTRY INCLUDING 12 CATALYTICA, GOAL LINE ENVIRONMENTAL TECHNOLOGIES AND GENERAL 13 ELECTRIC COMPANY, UNION REPRESENTATIVES INCLUDING THE 14 CALIFORNIA UNIONS FOR RELIABLE ENERGY, AIR DISTRICT 15 REPRESENTATIVES AND THE CALIFORNIA ENERGY COMMISSION. 16 ON JUNE 23, ARB STAFF INVITED ABOUT 400 INDIVIDUALS 17 TO ATTEND A JULY 6 WORKSHOP, AND APPROXIMATELY 25 INDIVIDUALS 18 PARTICIPATED IN THIS WORKSHOP, REPRESENTING A CROSS-SECTION 19 OF INTEREST SIMILAR TO THE MAY WORKSHOPS. 20 ADDITIONALLY, STAFF HAD ABOUT 80 TELEPHONE 21 COMMUNICATIONS AND HELD ONE-ON-ONE MEETINGS AND 22 TELECONFERENCES WITH VARIOUS STAKEHOLDERS, INCLUDING GOAL 23 LINE ENVIRONMENTAL TECHNOLOGIES AND THE GENERAL ELECTRIC 24 COMPANY AND THE CAPICO ENGINEERING MANAGERS AND THE 25 CALIFORNIA ENERGY COMMISSION'S STAFF. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 FINALLY, ON JUNE 23, THE GUIDANCE WAS POSTED ON THE 2 AIR RESOURCES BOARD'S WEBSITE, AND ON JUNE 28, STAFF MAILED 3 COPIES OF THE GUIDANCE AND NOTICES OF THIS BOARD MEETING TO 4 APPROXIMATELY 400 INDIVIDUALS THAT I REFERRED TO EARLIER. 5 STAFF HAS REACHED OUT TO STAKEHOLDERS AND AFFECTED 6 PARTIES, BEEN INVOLVED WITH THEM IN A DELIBERATIVE AND 7 MEANINGFUL PUBLIC PROCESS ON A COMPLEX SUBJECT MATTER UNDER 8 CHALLENGING TIME CONCERNS. 9 THAT INCLUDES MY COMMENTS. THANK YOU. 10 CHAIRMAN LLOYD: THANK YOU, BRUCE. 11 YES, I AM GOING TO OPEN IT UP TO QUESTIONS FROM THE 12 BOARD. 13 QUESTIONS? 14 BOARD MEMBER EDGERTON: ACTUALLY, I HAVE A POINT OF 15 ORDER THAT I WANT TO MAKE ESSENTIALLY, AND THAT IS, IT HAS 16 BEEN A PLEASURE TO SIT ON THIS BOARD SINCE 1993 TO 1999, AND 17 I HAVE FOUND IT ALWAYS CHALLENGING WHEN THINGS ARE MORE 18 CONTROVERSIAL, BECAUSE WE ALWAYS GET A LARGE NUMBER OF 19 DOCUMENTS, WITHIN 24 HOURS. 20 I HAVE ALWAYS BEEN SOMEWHAT TROUBLED BY THAT. BUT 21 I GENERALLY FELT THAT I KNEW ENOUGH ABOUT WHERE EVERYONE WAS 22 TO HANDLE IT. 23 IN THE LAST FEW DAYS, AN ATTORNEY I KNOW IN 24 SOUTHERN CALIFORNIA POINTED OUT TO ME THAT WHEN THEY GET INTO 25 LITIGATION, THIS IS SOMETHING I NEVER THOUGHT ABOUT, THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 BOARD MEMBERS, WE ARE CONCLUSIVELY PRESUMED TO HAVE READ 2 EVERYTHING THAT IS IN THE ADMINISTRATIVE RECORD AND TO HAVE 3 UNDERSTOOD IT, AND THEN TO BASE OUR DECISION ON IT, AND I 4 WANTED TO BRING THIS UP INTO THE PUBLIC FORUM BECAUSE IT IS A 5 CONSIDERABLE CONCERN TO ME. 6 TODAY IS JUST ONE MORE TIME THAT I HAVE COME TO A 7 MEETING WITH A TREMENDOUS VOLUME OF MATERIAL BACK AND FORTH 8 ON VERY HIGHLY TECHNICAL ISSUES. SO, I AM NOT, AS THIS 9 ATTORNEY SAID TO ME, WHAT I SAID WAS, WHAT WOULD YOU 10 RECOMMEND THAT THE BOARD MEMBER DO IN THAT CASE SO THAT THE 11 ITEMS ARE NOT RELIED UPON, SAY -- BECAUSE WE WILL JUST SAY, 12 YOU ARE NOT GOING TO READ ANY OF THOSE, AND YOU ARE NOT GOING 13 TO BASE YOUR DECISION ON THEM, AND THEN THOSE INDIVIDUALS AND 14 THOSE COMPANIES DON'T GET THEIR INFORMATION IN, AND WE WILL 15 NOT HAVE MADE IT INTO THE RECORD AS FAR AS MY VOTE IS 16 CONCERNED. 17 THAT WOULD CREATE SOME PROBLEM IN COURT AS TO 18 WHETHER THERE IS ADMINISTRATIVE ACKNOWLEDGMENT. 19 ANYWAY, MR. CHAIRMAN, I DO NOT WANT TO TAKE ANY 20 MORE OF YOUR TIME ON THIS, BUT I WANTED TO ASK YOU IF YOU 21 MIGHT SUPPORT THE ASKING OF STAFF TO LOOK INTO THIS ISSUE AND 22 GIVE US A LITTLE MORE GUIDANCE ON HOW IT COULD BE BETTER 23 HANDLED IN TERMS OF OUR BEING PRESUMED TO HAVE READ ALL YOUR 24 COMPLAINTS THAT HAVE COME IN AT MIDNIGHT WHILE WE ARE TUCKED 25 INTO BED, AND THEN THE NEXT MORNING WE ARE TO MAKE A RULING. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 MR. KENNY: IF I COULD PROVIDE A QUICK RESPONSE, 2 WHAT WE HAVE PREVIOUSLY HAVE DONE IS WE PROVIDED A 45-DAY 3 NOTICE PERIOD THAT ESSENTIALLY ENDS ON THE DAY OF THE 4 HEARING. 5 CONSEQUENTLY, INDIVIDUALS ARE ENTITLED TO SUBMIT 6 MATERIALS AT ANY TIME DURING THIS 45-DAY NOTICE PERIOD. 7 THE ONLY WAY TO REALLY ADDRESS THAT WOULD BE TO 8 ESSENTIALLY HAVE A 45-DAY NOTICE PERIOD END AT A PERIOD OF 9 TIME BEFORE THE BOARD MEETING ACTUALLY OCCURS, AND THEN 10 PROVIDE A PERIOD OF TIME WHERE NO MORE COMMENTS WERE COMING 11 IN, AND THEN AT THE TIME OF THE BOARD HEARING, COMMENTS AGAIN 12 WOULD BE REOPENED. 13 BUT, I MEAN, JUST UNDER THE EXISTING PROCESS, I 14 SHARE YOUR CONCERNS, BECAUSE ESSENTIALLY A LOT OF MATERIAL 15 DOES TEND TO COME IN AT THE LAST MOMENT. 16 CHAIRMAN LLOYD: YES. 17 COULD YOU LOOK INTO THAT A LITTLE BIT FURTHER? 18 BOARD MEMBER EDGERTON: CAN YOU COME BACK WITH A 19 RECOMMENDATION HERE, AND CAN YOU REFLECT ON THAT AND DISCUSS 20 WITH THE CHAIRMAN AND COME BACK AND LET US KNOW THAT? 21 MY FIRST QUESTION SOUNDS CONSTRUCTIVE. 22 MR. KENNY: WE WILL BE HAPPY TO LOOK AT THAT. 23 CHAIRMAN LLOYD: IT WOULD BE HELPFUL ALSO IF YOU 24 ASK TWO ATTORNEYS. 25 I HAVE QUESTIONS OF STAFF AND BOARD MEMBERS AS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 WELL. IT IS CLEAR FROM THE GUIDANCE THAT WE ARE FOCUSING ON 2 THE LARGER POWER PLANTS, WE ARE LOOKING AT BASICALLY ABOVE 50 3 MEGAWATTS AND EVEN HIGHER, HUNDREDS OF MEGAWATTS. 4 THAT IS THE IMPORTANT DISTINCTION AS WE MOVE AHEAD. 5 AS I SAID EARLIER, CLEARLY THERE ARE OTHER 6 TECHNOLOGIES THAT COME UNDER WAY THAT IS NOT THE FOCUS OF OUR 7 MEETING TODAY. 8 THE NOX LEVEL THAT YOU TALKED ABOUT, THERE IS SOME 9 CONCERN ABOUT WHETHER YOU CAN ACTUALLY MEASURE NOX LEVELS TO 10 THAT NUMBER. 11 STAFF, COMMENTS ON THAT? 12 MR. TOLLSTRUP: THIS ISSUE HAS COME UP OVER AND 13 OVER AGAIN IN THE PROCESS OF DEVELOPING THE NOX. 14 BASICALLY WHAT HAS HAPPENED IS THAT TECHNOLOGY HAS 15 PROGRESSED AT SUCH AN ADVANCED RATE THAT THE SOURCE METHODS 16 THAT WE HAVE ARE NOT CAUGHT UP WITH THE TECHNOLOGY AT THIS 17 TIME. 18 WE ARE STILL DEALING WITH THE TEST METHODS THAT 19 WERE INTENDED TO MEASURE 10 PARTS TO 50 PARTS OF A MILLION 20 AND MUCH BIGGER NUMBERS. 21 WHEN WE GET DOWN TO THESE LOW NUMBERS, THERE ARE 22 CONCERNS THAT THE PROCEDURES AND METHODOLOGY THAT WE HAVE MAY 23 NOT BE ACCURATE MEASUREMENTS. 24 STAFF ACKNOWLEDGES THAT THERE MAY BE SOME ISSUES 25 HERE THAT CURRENTLY IN THE PROCESS OF WORKING WITH THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 MONITORING AND LAB DIVISIONS AND WE HAVE HAD NUMEROUS 2 DISCUSSIONS WITH THEM AND IT IS NOT AN ISSUE OF WHETHER THE 3 TECHNOLOGY IS THERE, A CERTAIN MEASURE THAT IS MUCH LOWER 4 THAN THIS, SO THE INSTRUMENTATION IS THERE, BUT IT IS PUTTING 5 TOGETHER THE PROCEDURES AND THE METHODOLOGIES THAT ENSURE THE 6 LEVELS CONSISTENTLY AND REPRODUCE THEM. 7 SO OUR PROPOSAL IS BASICALLY TO WORK WITH THE 8 MONITORING LAB DIVISION AND IDENTIFY WHERE THE PROBLEMS ARE 9 AND DEVELOP THE PROCEDURES FOR DOING THE TESTING, AND TRY TO 10 DO SO BEFORE THE FACILITIES ARE ACTUALLY BUILT AND THE 11 TESTING NEEDS TO BE DONE. 12 CHAIRMAN LLOYD: ALSO, I WAS BRIEFED -- 13 MR. VENTURINI: MR. CHAIRMAN, IF I MIGHT ADD 14 BRIEFLY TO ANNOTATE MR. TOLLSTRUP'S STATEMENT, THERE IS SOME 15 DIFFERENCES ON THIS, AND WE THINK IT IS APPROPRIATE FOR US TO 16 LOOK INTO, THE SOUTH COAST DISTRICT FEELS THEY CAN ACCURATELY 17 MEASURE PLUS OR MINUS 1 PPM. 18 THERE ARE SOME DIFFERENCES HERE, AND IT IS 19 IMPORTANT TO COVER IT, AND WE NEED TO TAKE A LOOK AND TO THE 20 EXTENT METHODS ARE IMPROVED THAT I THINK ARE REALLY GOOD 21 NEWS, THAT WE WOULD BE HAPPY TO LOOK INTO THAT, AND WE ARE 22 WORKING WITH THE SOUTH COAST DISTRICT. 23 CHAIRMAN LLOYD: I WAS PLEASED TO SEE THE STAFF 24 RECOGNIZING THE INHERENT INTERBASIN TRADE OFFS. 25 YOU INDICATE THAT YOU WERE LOOKING AT A SPECIFIC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 BASIS THAT MAY LINK TO ANOTHER QUESTION WHEN YOU REFER TO 2 SOME OF THE PHOTOCHEMICAL MODELING GUIDELINES. 3 DOES STAFF EYE THERE THAT SITING MODELING IS BEING 4 LOOKED AT FOR CERTAIN SITING IMPACTS? 5 MR. VENTURINI: MR. CHAIRMAN, MY UNDERSTANDING IS 6 THAT IN THE ACT NOW THAT THEY ARE CONDUCTING FOR THESE 7 PROJECTS, THEY DO NOT DO PHOTOCHEMICAL MODELING, BECAUSE EVEN 8 THE SIZE OF THESE PROJECTS, THE MODELS ARE NOT SOPHISTICATED 9 ENOUGH TO SEE THE EFFECT HERE, AND THAT IS MY UNDERSTANDING. 10 BUT FOR ESTABLISHING THE RATIO THAT WE ARE TALKING 11 ABOUT, THAT PARTICULAR MODELING WOULD BE APPROPRIATE TO THE 12 RIGHTS OF ASSISTING THE RATIO. 13 CHAIRMAN LLOYD: IS THERE A SPECIFIC MODEL THAT YOU 14 ARE LOOKING AT THIS? 15 MR. VENTURINI: I WOULD SAY THAT IT WOULD BE THE 16 MODEL THAT OUR CURRENT MODEL THAT THEY ARE USING FOR THIS 17 ACTIVITY. 18 CHAIRMAN LLOYD: WELL, IT IS CLEAR FROM THE LIST OF 19 WITNESSES THAT THERE IS QUITE A BIT OF DEBATE THAT WE SHOULD 20 BE DOING. 21 I THINK IT IS REALLY A TOUGH ISSUE, AND I KNOW THE 22 OTHER BOARD MEMBERS TURNED OVER TO -- 23 BOARD MEMBER CALHOUN: YES, MY QUESTION RELATES TO 24 THE NUMBERS. 25 I WAS CONCERNED IN THE STAFF REPORT AS TO WHETHER PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 OR NOT THE TOLERANCE LEVEL THAT THE STAFF HAS PROPOSED IS 2 BASED ON DEMONSTRATED TECHNOLOGY THAT I HEARD YOU SAY A FEW 3 MOMENTS AGO THAT TECHNOLOGY IS OLD TECHNOLOGY AND SOME OF THE 4 STANDARDS HAVE NOT BEEN, THE METHODOLOGY FOR MEASURING ARE 5 NOT CAUGHT UP WITH THE TECHNOLOGY. 6 MY QUESTION IS WHETHER THE GUIDANCE THAT YOU ARE 7 RECOMMENDING IS BASED ON TECHNOLOGY THAT EXISTS TODAY? 8 MR. TOLLSTRUP: TO ANSWER YOUR QUESTION, I THINK 9 THAT IT IS BASED ON TECHNOLOGY THAT IS OUT THERE TODAY BEING 10 USED ON TURBINES IN THE U.S. AND THROUGHOUT THE WORLD. 11 I THINK THAT THERE ARE A NUMBER OF UNANSWERED 12 QUESTIONS ABOUT HOW THIS NEW GENERATION OF TURBINES WILL 13 OPERATE. THERE ARE NOT A LOT OF THEM AROUND AND WORKING AT 14 THIS POINT IN TIME. 15 SO, WE ARE MAKING SOME STROBILATIONS THAT THE 16 TECHNOLOGY WILL WORK ON THESE LARGER PROJECTS. 17 LIKE THE TECHNOLOGIES, THAT SCR HAS BEEN OUT THERE 18 FOR A NUMBER OF YEARS WITH ONE INSTALLATION AND WORKS 19 EFFECTIVELY, AND WE BELIEVE THAT IT WILL BRIDGE THE GAP TO 20 THE LARGER TURBINE TECHNOLOGY, SUCH AS SCONOX TECHNOLOGY IS 21 VERY PROMISING, AND CERTAINLY WE ARE LOOKING TO GET THOSE IN 22 PLACE AND IMPROVING AS WELL. 23 BOARD MEMBER CALHOUN: YEAH. I HAVE A COUPLE OF 24 OTHER QUESTIONS, BUT I WILL WAIT UNTIL AFTER THE TESTIMONY. 25 BOARD MEMBER EDGERTON: I JUST WANT TO BE SURE AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 FOLLOW UP WITH MIKE ON THIS NOW. 2 THERE HAS BEEN SCONOX TECHNOLOGY THAT HAS BEEN 3 OPERATING OVER TWO YEARS AT VERNON AT THE FEDERAL PLANT 4 THERE; IS THAT CORRECT? 5 MR. TOLLSTRUP: THAT IS CORRECT. 6 BOARD MEMBER EDGERTON: AND IT HAS BEEN 7 SUCCESSFULLY OPERATING AT LEVELS SUBSTANTIALLY BELOW WHAT HAS 8 BEEN RECOMMENDED? 9 I DO NOT WANT TO TAKE A LOT OF TIME, AND I DO NOT 10 WANT TO LET THAT PASS WITHOUT MAKING THAT OR WITHOUT GETTING 11 THE CONFIRMATION IF THAT IS TRUE. 12 MR. TOLLSTRUP: WE HAVE SEEN THE RECENT DATA FROM 13 SCONOX, AND IN THE LAST COUPLE OF MONTHS THEY HAVE BEEN 14 OPERATING AT LOWER LEVELS, BUT THAT IS ONLY OVER THE LAST FEW 15 MONTHS, BUT BEFORE THAT, WE BELIEVE IT WAS CONSISTENT WITH 16 THE NUMBERS IN THE DOCUMENT. 17 BOARD MEMBER EDGERTON: I THOUGHT THAT WHEN YOU 18 BRIEFED ME YOU CONCLUDED THAT THEY WERE DOING BETTER THAN THE 19 2 PARTS OF A MILLION FOR 2 YEARS AND NOW THEY WERE DOWN TO .8 20 IN NOX, SO I MEAN THE QUESTION IS, THERE ARE A COUPLE OF 21 MONTHS BUSINESS, THIS TIME PERIOD HAS TO DO WITH BEING WAY 22 DOWN. 23 MR. TOLLSTRUP: WE HAD LOOKED AT THE TECHNOLOGY AND 24 WE LOOKED AT SOME EMISSION DATA PROJECT AND THEY HAD VERIFIED 25 THAT THEY HAVE BEEN OPERATING AT 2 PPM AT A 3-HOUR AVERAGE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 AND OVER THE LAST FEW MONTHS THEY HAVE KNOCKED THOSE NUMBERS 2 DOWN, AND THEY ARE CURRENTLY OPERATING BELOW, LIMITED DATA 3 THAT WE HAVE SEEN. 4 BOARD MEMBER EDGERTON: SO, IN THE LAST FEW MONTHS, 5 YOU ARE TALKING, YOU SAY IN THE LAST FEW MONTHS, YOU MEAN 6 BELOW ONE PART. 7 MR. TOLLSTRUP: THAT IS CORRECT. 8 BOARD MEMBER EDGERTON: THANK YOU. 9 CHAIRMAN LLOYD: QUESTIONS FROM ANY OTHER BOARD 10 MEMBERS AT THIS TIME? 11 WE HAVE GOT 10 WITNESSES SIGNED UP TO TESTIFY, IN 12 THAT WE HAVE A LOT OF ADDITIONAL INFORMATION PRESENTED. THE 13 FIRST ONE IS CHRIS TOOKER, FROM THE CALIFORNIA ENERGY 14 COMMISSION. 15 AGAIN, AS I SAID EARLIER, WE NEED TO WORK CLOSELY 16 WITH THE COMMISSION ON THIS ISSUE. 17 THANK YOU FOR COMING. 18 MR. TOOKER: THANK YOU FOR INVITING ME. 19 I WOULD LIKE TO START OUT BEFORE I MAKE MY 20 PRESENTATION AND GIVE YOU A LITTLE BACKGROUND ON MYSELF SO 21 YOU CAN KIND OF UNDERSTAND WHERE I AM COMING FROM IN TERMS OF 22 COMMENTS THAT I AM REPRESENTING HERE TODAY. 23 MY NAME IS CHRIS TOOKER, AND I SUPERVISE THE AIR 24 QUALITY UNIT IN THE ENVIRONMENTAL PROTECTION OFFICE IN THE 25 CALIFORNIA ENERGY COMMISSION. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 THE COMMISSION IS RESPONSIBLE FOR DOING INDEPENDENT 2 ANALYSIS OF HOME POWER APPLICATIONS. 3 SPECIFICALLY, MY STAFF EVALUATED THE POTENTIAL AIR 4 QUALITY IMPACTS OF POWER PLANT APPLICATIONS, BOTH FROM THE 5 STANDPOINT OF CEQA, WHICH IS A BROADER VIEW, AS WELL AS FROM 6 A REGULATORY PERSPECTIVE OF ASSURING THAT THE DISTRICT IS 7 ABLE TO COMPLETE A TIMELY REVIEW OF THE PROJECT AND PROVIDE A 8 DETERMINATION OF COMPLIANCE. 9 TO ENSURE THAT, WE WORK NOT ONLY WITH THE DISTRICT 10 BUT WITH THE ARB STAFF AND THE EPA STAFF TO ASSURE CONSENSUS 11 THAT THE PROJECT AS DESIGNED AND PROPOSED WOULD BE ABLE TO 12 COMPLY WITH BOTH THE STATE AND FEDERAL REGULATORY 13 REQUIREMENTS. 14 ALTHOUGH THE LICENSE THAT THE COMMISSION ISSUES 15 ONLY PERTAINS, IS ONLY A STATE LEVEL LICENSE, IT DOES NOT 16 OVERRIDE OR REPLACE THE REQUIREMENTS, AND THE GOAL IS TO 17 ASSURE THAT WHEN THE STATE ISSUES A LICENSE THAT WE WILL NOT 18 BE ISSUING A LICENSE THAT HAS ANY INCONSISTENCIES POTENTIALLY 19 WITH THE FEDERAL PERMITS, WHICH MAY BE AN ISSUE. 20 I MUST SAY THAT WE HAVE HAD A VERY LARGE SUCCESS 21 WITH THE SUPPORT OF THE AIR RESOURCES BOARD STAFF AND THE EPA 22 AND WORKING TOWARDS THAT GOAL ON THE PROJECT BEFORE US TODAY, 23 AND I APPRECIATE THAT. 24 WHAT I WOULD LIKE TO TALK ABOUT TODAY IS TO GIVE 25 YOU A LITTLE BIT MORE SPECIFIC INFORMATION AND TARGET A FEW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 POINTS THAT ARE IMPORTANT FOR YOUR UNDERSTANDING OF 2 DEREGULATION AND THEN TO READ INTO THE RECORD OUR LETTER OF 3 SUPPORT OF THE PROPOSED GUIDANCE DOCUMENT. 4 THE MESSAGE I WOULD LIKE TO LEAVE YOU WITH ABOUT 5 CALIFORNIA ELECTRICITY MARKET IS UNCERTAINTY, UNCERTAINTY NOT 6 ONLY BECAUSE IT STILL IS EVOLVING BUT BECAUSE UNCERTAINTY IS 7 A CHARACTERISTIC OF A FREE MARKET. 8 WE HISTORICALLY HAD FORCED AN UNREGULATED MARKET IN 9 CALIFORNIA IN TERMS OF ELECTRICITY GENERATION AND WE HAD A 10 GREAT DEGREE PREDICTABILITY OF FUTURE SUPPLIES OF 11 ELECTRICITY. 12 WE NO LONGER HAVE THAT ABILITY OF TRADE OFF THAT 13 WE HAD IN TERMS OF MOVING TOWARD AN OPEN MARKET. 14 NEXT SLIDE, PLEASE. 15 I THINK THE AIR RESOURCE STAFF HAS A VERY GOOD 16 CONCEPT AND FEELING FOR WHAT IS EVOLVING UNDER AB 1890 WITH 17 THE RESTRUCTURING ELECTRICITY INDUSTRY, BUT I WANTED TO TOUCH 18 ON A FEW PLAIN POINTS. 19 THE FIRST BEING THAT IN ADDITION TO THE NEW POWER 20 PLANTS THAT WE ARE SEEING, DIVESTITURE WAS A MAJOR COMPONENT 21 OF DEREGULATION, SO THAT PACIFIC GAS AND ELECTRIC AND OTHER 22 REGULATORY UTILITIES HAVE AT THIS POINT DIVESTED IN 23 THEMSELVES IN MOST, IF NOT ALL, OF THE FOSSIL-FIRED UNITS. 24 WE WILL BE SEEING, AND WE ARE ALREADY SEEING IN 25 CERTAIN CASES, THE ACQUISITION OF THOSE UNITS AND THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 PROPOSAL FOR MODIFICATION OF THOSE UNITS TO OPERATE IN A NEW 2 MARKET, AND OTHER DIVESTED UNITS MAY CONTINUE TO OPERATE THE 3 WAY THEY ARE CURRENTLY DESIGNED. 4 THE EXISTING UNITS IN THE SYSTEM ARE REALITY, AND 5 THERE IS SOME UNCERTAINTY AS TO WHETHER ON A INDIVIDUAL BASIS 6 THEY WILL CONTINUE AS CURRENTLY DESIGNED AND PERMITTED OR 7 WHETHER THEY WILL BE MODIFIED AND REPERMITTED AS PLAYERS IN 8 THE NEW MARKET. 9 OF COURSE, WE HAVE A WHOLE RAFT OF POWER PLANT 10 PROPOSALS, AND AS YOU HAVE HEARD MANY TIMES A LIST OF 35, OF 11 WHICH ARE COMPLETED LICENSING OF ONE AND NEAR COMPLETED 12 LICENSING OF TWO MORE AND HAVE ABOUT EIGHT OTHERS ALONG WITH 13 THOSE TWO IN THE LICENSING PROCESS. 14 WE ALSO HAVE A RENEWABLE RESEARCH PROGRAM UNDER 15 DEREGULATION. THERE IS AN INCENTIVE SUBSIDY PROVIDED UNDER 16 DEREGULATION TO HELP GET RENEWABLE TECHNOLOGIES OVER THE HUMP 17 AND COMPETITIVE IN THE NEW MARKET. 18 SO, THOSE WILL BE PLAYERS IN THE MARKET AS WELL IF 19 THEY CAN ESTABLISH AN ECONOMIC FOOTHOLD IN THE MARKET, AND 20 THERE IS UNCERTAINTY THERE. 21 OUR RESEARCH PROGRAM WILL BE ORIENTED IN PART TO 22 TRY TO IDENTIFY POTENTIAL SOLUTIONS OR AT WAYS TO GET 23 RENEWABLES INTO THE MARKET. 24 IN TERMS OF DIVESTURE, AGAIN THERE ARE 18,000 25 MEGAWATTS OF GENERATING CAPACITY SOLD BY THE IOUS. BUYERS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 ARE NEW TO CALIFORNIA BUT NOT NEW TO THE ENERGY INDUSTRY, 2 WHICH WE SEE AS A PLUS. 3 OF COURSE, HYDRO AND NUCLEAR MAY BE DIVESTED INTO 4 THE FUTURE, AND THERE IS SOME UNCERTAINTY AS TO HOW AND WHEN 5 THOSE ACTIONS ARE GOING TO TAKE PLACE. THOSE RESOURCES WILL 6 CONTINUE TO BE PLAYERS IN THE MARKET. 7 NEXT SLIDE. 8 IN TERMS OF THE, AGAIN, THE CALIFORNIA MEGAWATT 9 RUSH, 35 NEW POWER PLANTS RANGING FROM 500 TO 1500 MEGAWATTS, 10 COMBUSTION, TURBINE, COMBINED-CYCLE PROJECTS GREATER THAN 11 22,000 MEGAWATTS, AND I THINK IT IS AN UNDERSTATEMENT TO SAY 12 THAT THE NUMBER AND SIZE OF THESE FACILITIES HAS BEEN QUITE 13 CHALLENGING FOR US IN THE REGULATORY ARENA AND WILL CONTINUE 14 TO BE. 15 AGAIN, WE APPRECIATE THE ASSISTANCE OF THE AIR 16 RESOURCES BOARD STAFF AS WELL AS THE ENVIRONMENTAL PROTECTION 17 AGENCY STAFF TO WORK WITH US DURING THIS REGULATORY PROCESS. 18 NEXT SLIDE. 19 IN TERMS OF NEED FOR NEW GENERATION, AGAIN, THIS 20 COMES BACK TO THE QUESTION OF UNCERTAINTY. AS STAFF POINTED 21 OUT IN THEIR PRESENTATION, THE COMMISSION HAS PROJECTED NEED 22 OF 67,000 MEGAWATTS BY 2007, AND DOUBLE THAT BY 2015, AND THE 23 REAL QUESTION IS HOW WILL THAT DEMAND BE SATISFIED. 24 IT WILL BE SATISFIED IN GREAT PART, WE BELIEVE, BY 25 NEW POWER PLANTS THAT ARE CURRENTLY BEING PROPOSED, BUT IT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 MAY ALSO BE SATISFIED THROUGH A LESSER OR A GREATER OR LESSER 2 DEGREE BY INCREASED IMPORTS OF OUT-OF-STATE POWER BY 3 RENEWABLE PROJECTS, BY IMPLEMENTATION OF DEMAND SIDE 4 MANAGEMENT AND ALSO BY MARKETING AS A COMMODITY IN THE MARKET 5 OF THE VALUES OF ANCILLARY SERVICES, SUCH AS VOLTAGE SUPPORT 6 THAT CERTAIN UNITS PROVIDE TRANSMISSION SYSTEMS OR BLACK 7 START CAPABILITIES THAT UNITS MAY HAVE TO BE ABLE TO BRING 8 THIS SYSTEM BACK UP AFTER AN OUTAGE. 9 SO, THERE ARE A LOT OF NON-DIRECT ECONOMIC FACTORS 10 IN WHICH THE INDEPENDENT SYSTEM OPERATOR WILL BE LOOKING AT 11 TO PRICE IN THE MARKET, IF YOU WILL, WHICH MAY MEAN THAT SOME 12 EXISTING UNITS FROM THE AIR QUALITY PROSPECTIVE MAY BE 13 INEFFICIENT AND MAY HAVE SOME COMPETITIVE ADVANTAGES IN A 14 RELATIVE STANCE BECAUSE OF THEIR LOCATION IN A SYSTEM. 15 THE NEXT SLIDE IN TERMS OF OTHER ALTERNATIVES, 16 OUT-OF-STATE POWERABLE RENEWABLY, DSM AND DISTRIBUTED ENERGY 17 RESOURCES, WE HAVE NOT TALKED ABOUT THIS MUCH, BUT WE THINK 18 THAT, AS ARB DOES, THERE IS A FUTURE POTENTIAL FOR SEEING A 19 LOT MORE SMALL DEGENERATION SOURCES. 20 THEY COULD BE FUEL CELLS. THEY COULD BE 21 MICROTURBINES. THEY COULD BE BATTERIES. THERE COULD BE A 22 LOT OF DIFFERENT TECHNOLOGY OPTIONS FOR PROVIDING ELECTRICITY 23 SERVICES. 24 WE ARE WORKING CLOSELY WITH THE AIR RESOURCES BOARD 25 AND ARE LOOKING INTO THOSE OPTIONS IN THAT EVOLVING AREA AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 ONE THAT MAY PROVIDE A SIGNIFICANT SUPPLY OPTION FOR THE 2 ELECTRICITY SYSTEM AT THE LOCAL LEVEL. 3 OF COURSE, THE SELF-GENERATION, AS TECHNOLOGY 4 ADVANCES THERE MAY BE MORE AND MORE INTEREST OF PEOPLE GOING 5 OFF LINE AND USING NEW TECHNOLOGIES TO PROVIDE THEIR OWN 6 INDEPENDENT SUPPLIES. 7 LASTLY, WHAT THIS MEANS TO YOU. WHAT THIS MEANS TO 8 THE AIR REGULATORY ARENA IS THAT THE GUIDANCE DOCUMENT THAT 9 YOU HAVE BEFORE YOU TODAY IS VERY TIMELY. 10 WE SEE IT BEING USEFUL IN AT LEAST 15 DISTRICTS OF 11 TODAY IN SITING ISSUES, OTHER THAN YOUR AIR QUALITY, SUCH AS 12 WATER SUPPLY, LOAD REQUIREMENTS, SYSTEM NEEDS AND 13 TRANSMISSION AVAILABILITY MAY ACTUALLY RESULT IN PROJECTS 14 BEING PREFERENTIALLY SITED IN OTHER AREAS. 15 IF OFFSETS, ALSO, ARE NOT SUFFICIENT, WE MAY SEE 16 CHOICES OF SITING FACILITIES WHICH WOULD HAVE A PREFERENCE 17 FOR BEING IN AREAS WHERE MORE OFFSETS ARE AVAILABLE AND MORE 18 FLEXIBILITY IN TERMS OFFSETTING PROJECTS IS AVAILABLE. 19 SO, AGAIN WE COME BACK TO THE WHOLE QUESTION OF THE 20 UNCERTAINTY OF THE OPERATION OF THE SYSTEM IN THE FUTURE AND 21 THE FACT THAT THERE ARE A LOT OF FACTORS IN COMBINATION THAT 22 WILL DETERMINE NOT ONLY WHERE THE PROJECTS ARE PROPOSED BUT 23 ULTIMATELY WHETHER OR NOT THEY ARE LICENSED IN THOSE 24 LOCATIONS UNDER THE CONTEXT THAT THEY ARE PROPOSED IN. 25 I WOULD LIKE TO CONCLUDE MY PRESENTATION BY READING PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 INTO THE RECORD A LETTER OF SUPPORT FOR THE PROPOSED GUIDANCE 2 DOCUMENT SENT YESTERDAY TO THE ARB EXECUTIVE OFFICER. 3 THE COMMISSION FULLY SUPPORTS THE CALIFORNIA AIR 4 RESOURCES BOARD STAFF'S ONGOING EFFORTS TO PROVIDE THE ITEMS 5 TO AIR DISTRICTS IN POWER PLANT DEVELOPERS ON AIR QUALITY 6 ISSUES ASSOCIATED WITH POWER PLANTS LICENSED BY THE 7 COMMISSION. 8 WE BELIEVE THIS EFFORT IS CONSISTENT WITH THE CARB 9 CEC JOINT POLICY STATEMENT IN COMPLIANCE WITH AIR QUALITY 10 LAWS BY NEW POWER PLANTS, AND WE SUPPORT THE BOARD'S APPROVAL 11 OF THE PROPOSED GUIDANCE DOCUMENT. 12 THE ENERGY COMMISSION ISSUES THAT ARE ASSOCIATED 13 WITH LARGE POWER PLANTS IN CALIFORNIA ARE ADDRESSED BY LOCAL 14 AIR DISTRICTS BY CARRYING OUT THE DETERMINATION OF COMPLIANCE 15 REVIEW AS PART OF THE COMMISSION'S LICENSING PROCESS. 16 THE TWO MOST SIGNIFICANT COMPONENTS ARE THE 17 INDUSTRY DOC REVIEW, UNDER THE NEW RESEARCH REVIEW RULE BY 18 THE EVALUATION OF THE COMMISSION, OFFSETS PROPOSED TO THE 19 PROJECT AND THE DETERMINATION OF BEST AVAILABLE CONTROL 20 TECHNOLOGY LEVELS REQUIRED FOR PROJECTS EMISSIONS OF REGULAR 21 AIR POLLUTANTS. 22 RESOLUTION OF BOTH OF THESE ISSUES IS CRITICAL TO 23 ASSURING A TIMELY LICENSING PROCESS. 24 OVERSIGHT RULES THAT CARB AND US ENVIRONMENTAL 25 PROTECTION AGENCY PLACE ARE CRITICAL IN ASSURING THAT THE AIR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 DISTRICTS CARRY OUT THEIR REVIEW RESPONSIBILITIES CONSISTENT 2 WITH THEIR RESPECTIVE NEW SOURCE REVIEW PROGRAMS. 3 IN THIS LIGHT, THE PROPOSED GUIDANCE DOCUMENT FOR 4 POWER PLANT SITING, THE BEST AVAILABLE CONTROL POLICY HELPS 5 PROVIDE UNIFORMITY AND CONSISTENCY IN THE PROCESS AND 6 FACILITATES TIMELY DECISIONS FOR POWER PLANT DEVELOPERS AND 7 NEW ELECTRICITY MARKET IN CALIFORNIA. 8 WE UNDERSTAND THAT THE BACK LEVELS FOR POWER PLANT 9 EMISSIONS AND EMISSIONS OFFSET RATIOS CONTAINED IN THE 10 GUIDANCE DOCUMENT ARE NOT BEING PROPOSED AS REGULATIONS AND 11 ARE OPEN TO DISCUSSION AND INDIVIDUAL PERMITTING PROCESSES 12 BASED ON INFORMATION PROVIDED BY AIR DISTRICTS, APPLICANTS 13 AND OTHER PARTICIPANTS. 14 AT SOME POINT, INDIVIDUAL AIR DISTRICTS DECIDE TO 15 ADOPT THE RULES WHICH INCORPORATES SUCH LEVELS, THE 16 COMMISSION STAFF WOULD LIKE TO PROVIDE INFORMATION ON POWER 17 PLANT LICENSING, GENERATION TECHNOLOGY RESEARCH AND 18 ELECTRICITY SYSTEM OPERATION TO HELP ESTABLISH AN ANALYTICAL 19 FRAMEWORK FOR PUBLIC REVIEW AND DISCUSSION OF THOSE RULES. 20 WITH RESPECT TO AIR EMISSION OFFSETS AND THEIR 21 LIMITED AVAILABILITY, WE BELIEVE IT IS IMPORTANT TO BALANCE 22 THE GOALS OF AIR QUALITY AND THE NEED FOR A RELIABLE 23 ELECTRICITY SUPPLY. 24 THANK YOU, AGAIN, FOR WORKING WITH THE AIR 25 DISTRICTS, THE COMMISSION AND POWER PLANT DEVELOPERS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 IF YOU HAVE ANY QUESTIONS, I WILL ANSWER THEM NOW. 2 CHAIRMAN LLOYD: THANK YOU, VERY MUCH INDEED, MR. 3 TOOKER. 4 COULD YOU DEFINE ON YOUR LAST DATE THERE WITH 5 BALANCING THE AIR QUALITY NEEDS WITH THE ELECTRICITY DEMAND. 6 MR. TOOKER: AS WE HAVE GONE THROUGH THE PROCESS OF 7 EVALUATING THE FIRST FEW LARGE POWER PLANT FACILITIES IN 8 THIS DEREGULATED MARKET, THERE HAS BEEN INCREASING CONCERN 9 RAISED BY LOCAL COMMUNITIES THAT THE OFFSET BANKS OF LOCAL 10 DISTRICTS ARE BEING EXHAUSTED BY THE OFFSETS THAT ARE 11 PURCHASED TO MEET THE LIABILITIES OF THESE PROJECTS. 12 THERE IS SOME CONCERN AMONG THE COMMISSIONERS AS 13 WELL TO UNDERSTAND WHAT BOTH THE MAGNITUDE OF THAT EFFECT IS 14 THROUGHOUT CALIFORNIA AND WHAT THE DYAMIC IS IN TERMS OF 15 POTENTIAL FOR ADDITIONAL OFFSETS BEING GENERATED IN THE 16 OFFSET MARKET TO FACILITATE MORE POWER PLANTS AS WELL AS 17 FUTURE ECONOMIC GROWTH. 18 SO, THE ISSUE THAT THEY FEEL IS IMPORTANT TO DEAL 19 WITH, WHICH WE WILL RAISE, AND I THINK WILL INCREASINGLY BE 20 RAISED IN THE CONTEXT OF INDIVIDUALS APPLYING FOR 21 APPLICATIONS, THEY HAVE ASKED THE STAFF TO LOOK INTO THIS 22 QUESTION OF BETTER DEFINING FOR THEM EXISTING OFFSET SYSTEMS 23 OR PROGRAMS AND OPTIONS FOR OFFSETS TO BE PROVIDED FOR POWER 24 PLANT APPLICATIONS AS WELL AS ANY POTENTIAL LIMITATIONS THAT 25 WE MIGHT FORESEE IN THAT ANALYSIS FOR SITING OF FUTURE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 FACILITIES. 2 WE ARE CURRENTLY DEVELOPING A SCOPE OF WORK FOR 3 THAT, AND WE WILL BE COORDINATING THAT WORK WITH THE AIR 4 RESOURCES BOARD STAFF. 5 CHAIRMAN LLOYD: IS THE ISSUANCE OF THIS DOCUMENT 6 IN A TIMELY MANNER IMPORTANT ENOUGH TO INFORM THOSE IN THE 7 PROCESS? 8 MR. TOOKER: VERY VERY IMPORTANT. 9 I BELIEVE THAT THIS REFLECTS -- IN MY MIND 10 PERSONALLY, THIS DOCUMENT REALLY REFLECTS WHAT THE AIR 11 RESOURCES BOARD STAFF HAS BEEN DOING WITH US, ESPECIALLY FOR 12 THE LAST TWO YEARS, IN TRYING TO PROVIDE MORE GUIDANCE TO 13 DISTRICTS IN HELPING TO RESOLVE THESE ISSUES ON A 14 CASE-BY-CASE BASIS. 15 I THINK FORMALIZING IT IN THIS DOCUMENT, IT WILL 16 MAKE THAT PROCESS EVEN MORE EFFECTIVE. 17 CHAIRMAN LLOYD: QUESTIONS OF THE BOARD MEMBERS? 18 MS. EDGERTON. 19 BOARD MEMBER EDGERTON: YES. 20 I WANT TO FIRST THANK YOU, MR. TOOKER, OR IS IT DR. 21 TOOKER? 22 MR. TOOKER: IT IS ACTUALLY DR. TOOKER, BUT CHRIS 23 IS FINE. 24 BOARD MEMBER EDGERTON: WELL, CHRIS, I WANTED TO 25 ASK WHETHER YOU COULD COMPARE THE CALIFORNIA MEGAWATT RUSH PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 WITH THE MEGAWATT RUSH OTHER STATES MAY OR MAY NOT BE SEEING? 2 MR. TOOKER: I ACTUALLY CANNOT IN A QUANTITATIVE 3 SENSE. 4 ALL I CAN TELL YOU IS THAT FOR THE MOST PART 5 CALIFORNIA SEEMS TO BE IN FRONT OF THE PACK IN TERMS OF ITS 6 PROGRESS IN MOVING INTO ITS DEREGULATED MARKET. 7 I KNOW THERE ARE SOME EFFORTS IN THE EAST COAST. I 8 DON'T KNOW THE SPECIFICS OF THE KINDS AND MAGNITUDES OF 9 PROJECT APPLICATIONS THAT THEY HAVE BEFORE THEM. 10 BOARD MEMBER EDGERTON: I HAVE BEEN TOLD THAT 11 CALIFORNIA IS GETTING BY FAR THE LION'S SHARE OF THE 12 APPLICATIONS AND CONSIDERED THE PLACE OF CHOICE TO PUT MOST 13 OF THIS NEW POWER IN REGULATION, AT LEAST RIGHT NOW. 14 IS YOUR IMPRESSION THAT THAT IS CORRECT, OR DO YOU 15 HAVE AN IMPRESSION THAT IS CORRECT EXCEPT NOT NORTHEAST? 16 DO YOU HAVE ANY GUIDANCE FOR ME? 17 MR. TOOKER: MY IMPRESSION AS A PERSON WORKING IN 18 THE REGULATORY PROGRAM IS THAT THEY ARE ALL COMING TO US. 19 ONE THING THAT I WOULD SAY IS THAT YOU NEED TO 20 RECOGNIZE AS THIS MARKET DEVELOPS, IT IS NOT A STATE MARKET. 21 IT IS A WESTERN STATES MARKET, AND IF WE ARE GOING TO IMPORT 22 AND EXPORT POWER, AND THERE IS A DYNAMIC OF CHANGING DEMAND 23 THAT IN WHICH WE EXPORT MORE POWER, FOR INSTANCE, SAY TO THE 24 NORTHWEST AND SOMETIMES WE IMPORT MORE, AND SO THERE IS A -- 25 YOU CAN LOOK AT THIS AS NOT ONLY A CALIFORNIA STATE MARKET PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 BUT A WIDER MARKET IN WHICH PROJECTS LICENSED IN THIS STATE 2 WILL BE COMPETING IN THE MARKET TO SELL POWER NOT JUST HERE 3 BUT TO POTENTIALLY EXPORT IT, AND THAT WILL BE AFFECTED BY 4 THE CAPACITY IN THE TRANSMISSION SYSTEM AS WELL AS THE 5 RELATIVE VALUES AND COMMODITIES IN THE MARKET IN TERMS OF 6 SERVICES AND HAVE MARGINAL COST FOR THE POWER. 7 BOARD MEMBER EDGERTON: THANK YOU. THAT IS VERY 8 HELPFUL. 9 BECAUSE THAT IS WHAT I AM TRYING TO GET A GRIP ON 10 SINCE I HAVE SEEN THE MEGAWATT PROJECTIONS FOR WHAT 11 CALIFORNIA IS EXPECTED TO MEET, AND I AM SEEING THAT IS 12 PROPOSED AROUND 22,000 MEGAWATTS TO BE BUILT HERE, AND 13 OBVIOUSLY THERE IS AN EXCESS OR THERE IS A DIFFERENCE THERE, 14 OR IT COULD BE DOUBLED WHAT IS PROJECTED TO BE NEEDED HERE. 15 SO, PERHAPS THAT IS A BALLPARK FIGURE, AND I KNOW 16 THESE ARE ALL ESTIMATE APPLICATIONS, AND WHAT WE MIGHT THINK 17 ABOUT IN TERMS ABOUT WHAT MAY BE EXPORTED IN CALIFORNIA. 18 MR. TOOKER: ACTUALLY, I DO NOT HAVE THE NUMBERS ON 19 THAT. 20 AN ASSOCIATE OF MINE TAKES WHAT HE CALLS THE SHOE 21 FACTORY APPROACH. WE USED TO HAVE A CLEARLY DEFINED 22 DETERMINATION WHERE PROJECTS HAD TO FIT IN THE KNEE CAP. 23 WE REALLY DO NOT HAVE THAT ANY MORE, AND IT IS KIND 24 OF LIKE BUILDING A SHOE FACTORY. IF YOU BUILD IT YOU CAN 25 SELL YOUR SHOES AND YOU MAKE MONEY, FINE, AND IF YOU DON'T, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 YOU GO BROKE. 2 THAT IS THE REALITY OF THE MARKET. SO, IF WE SEE 3 22,000 MEGAWATTS OF APPLICATIONS, IT DOES NOT NECESSARILY 4 MEAN THAT ALL OF THOSE ARE GOING TO BE BUILT OR THAT ALL THAT 5 ARE GOING TO BE BUILT ARE GOING TO BE COMPETITIVE AND 6 SUCCESSFUL. 7 BOARD MEMBER EDGERTON: I DO NOT WANT TO TAKE TOO 8 MUCH TIME ON THIS ISSUE, BUT HOW MANY PEOPLE DO YOU HAVE 9 WORKING WITH YOU IN THE AIR QUALITY DIVISION OF THE CEC? 10 MR. TOOKER: I DO NOT WANT TO OVER RATE THINGS 11 ACTUALLY, BUT THE AIR QUALITY UNIT, WHICH IS PART OF AN 12 OFFICE, A PART OF A DIVISION, BUT I CURRENTLY HAVE NINE 13 STAFF, SEVEN OF WHICH WORK AN AIR QUALITY ISSUES. 14 BOARD MEMBER EDGERTON: SO, IF I UNDERSTAND YOU 15 RIGHT, THEY HAVE TO HANDLE MORE THAN ONE OF THESE PLANTS? 16 MR. TOOKER: MY EXPECTATION IS THAT IF EACH ONE OF 17 THOSE STAFF WHO ARE ENGINEERS WITH AIR QUALITY BACKGROUND 18 SIMILAR TO YOUR BOARD STAFF WORK ON TWO PROJECTS AT ONCE. 19 BOARD MEMBER EDGERTON: DO YOU USE THE -- MAYBE YOU 20 DO, DO YOU USE US EPA TOP DOWN BEST AVAILABLE CONTROL 21 TECHNOLOGY DOCUMENT FROM 1989 AND THE NEW RESOURCE REVIEW 22 DOCUMENT FROM 1990 GUIDANCE AS YOUR BASIS FOR DETERMINING THE 23 BACT OR THE SITE REVIEW OF THE PLANT? 24 MR. TOOKER: WE USE THOSE DOCUMENTS IN TERMS OF 25 UNDERSTANDING THE EXPECTATIONS OF EPA AND ARB. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 I WANT TO POINT OUT THAT IN OUR PROCESS WE SEE BACT 2 DETERMINATIONS AS PRIMARILY BEING THE RESPONSIBILITY OF THE 3 DISTRICT WITH OVERSIGHT GUIDANCE PROVIDED FROM ARB, AND WE 4 BELIEVE THAT IS CONSISTENT WITH THE REGULATIONS AND THE 5 REQUIREMENTS OF THE DISTRICT TO PROVIDE A DETERMINATION OF 6 COMPLIANCE WHICH IDENTIFIES WHETHER OR NOT THE PROJECT WILL 7 COMPLY WITH THE REGULATIONS. 8 IT DOESN'T MEAN THAT WE DON'T ENGAGE IN DIALOGUE 9 ABOUT WHAT WE BELIEVE BASED ON THE INDIVIDUAL PROJECT MIGHT 10 BE APPROPRIATE TO THE DISTRICT TO CONSIDER IT BACT, AND WE, 11 AS ARB, WILL FILE COMMENTS IF WE FEEL APPROPRIATE ON THE 12 PRELIMINARY DETERMINATION OF COMPLIANCE ONCE IT IS PUBLISHED 13 AND DURING THE PUBLIC COMMENT PERIOD. 14 BUT AT THE SAME TIME, WE WORK CLOSELY ON A 15 DAY-TO-DAY BASIS IN WORKSHOPS WITH THE DISTRICT STAFF THROUGH 16 THE ANALYSIS PROCESS, AND WE PROVIDE THEM INPUT, AND THEY 17 PROVIDE US INPUT. 18 IT IS A DYNAMIC PROCESS FOR A BETTER UNDERSTANDING 19 PROJECTS, PROVIDING THEM WITH ADDITIONAL INFORMATION THAT 20 THEY MAY NEED. 21 BOARD MEMBER EDGERTON: SO, IF I UNDERSTAND YOU 22 CORRECTLY, YOU KNOW, THE CEC STAFF, WOULD NOT, AS A 23 RESPONSIBILITY, ASK WHEN THE APPLICATION COMES IN FOR THE 24 PROPOSAL TO START OUT WITH THE BEST AVAILABLE TECHNOLOGY? 25 MR. TOOKER: OUR REGULATIONS DO NOT ALLOW THAT AT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 THIS POINT IN TIME. 2 WHAT THEY DO ALLOW FOR IS THAT FOR AN APPLICATION 3 TO BE COMPLETE, REGULATIONS SAY THAT ALL INFORMATION REQUIRED 4 BY A DISTRICT TO ISSUE ITS DETERMINATION OF COMPLIANCE HAS TO 5 BE INCLUDED IN THE APPLICATION. 6 SO, WE WOULD SOLICIT FROM THE DISTRICT THEIR 7 COMMENTS ON THE ADEQUACY OF THE DOCUMENT WHEN THEY RECEIVE IT 8 AND GO THROUGH OUR ADDITIONAL DATA ADEQUACY REVIEW, AND WE 9 INCORPORATE THEIR COMMENTS TO OUR COMMISSION WHETHER THE 10 DOCUMENT IS ADEQUATE TO START AN ANALYSIS PROCESS. 11 BOARD MEMBER EDGERTON: THANK YOU. 12 BOARD MEMBER RIORDAN: JUST A FOLLOW ALONG, PRIOR 13 TO DEREGULATION, WHAT WAS THE EXPORT PICTURE LIKE, I JUST DO 14 NOT HAVE A SENSE OF THAT, WERE WE EXPORTING MUCH ELECTRIC? 15 MR. TOOKER: I DO NOT DEAL WITH THE ECONOMICS IN 16 THE IN-AND-OUT-OF-STATE VERY MUCH, BUT WHAT I CAN TELL YOU IS 17 THAT I DO KNOW IS HISTORICALLY WE USED TO IMPORT A LOT OF 18 ELECTRICITY FROM THE NORTHWEST AND AT CERTAIN TIMES OF THE 19 YEAR WHEN HYDRO WAS QUITE AVAILABLE, DURING OTHER TIMES OF 20 THE YEAR WHEN IT WAS LOWER AND THE NORTHWEST NEEDED POWER, WE 21 EXPORTED POWER TO THEM. 22 WITH THE ADVENT OF OR THE HEIGHTENING OF CONCERNS 23 ABOUT FISHERIES AND IMPACTS FROM A LOT OF THEIR HYDRO 24 FACILITIES IN THE NORTHWEST, THEY ARE TRYING TO BUILD MORE 25 COAL FACILITIES AND SO FORTH, BUT THEY ARE ALSO IMPORTING PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 MORE POWER. 2 SO, AS THE FACTORS THAT AFFECT GENERATIONS IN EACH 3 OF THESE SECTORS CHANGES, YOU WILL SEE A DYNAMIC SHIFTING 4 BACK AND FORTH. BUT I CANNOT SPEAK TO THE ACTUAL QUANTITIES 5 OF THAT DYNAMIC. 6 BOARD MEMBER EDGERTON: I HAVE ONE MORE QUESTION. 7 FOR THE RECORD, SIR, WOULD IT BE FAIR TO SAY THAT 8 IF WE DO NOT GET THE CLEANEST PLANTS IN CALIFORNIA THAT ARE 9 POSSIBLE, THAT WE WOULD END UP ACTUALLY IMPORTING AIR 10 POLLUTION AS WE WOULD GET MORE PLANTS, AND WE WOULD EXPORT 11 THE ENERGY BUT WOULD BE STUCK WITH THE AIR POLLUTION? 12 SO, WE ARE AT SOME RISK HERE. ON ONE HAND THE 13 STATE WANTS TO BE A LEADER IN PRODUCING ELECTRICITY, AND WE 14 ARE VERY BULLISH ON HAVING A VERY SOUND ECONOMY AND DELIGHTED 15 TO BE PART OF IT. 16 ON THE OTHER HAND, WE DO NOT WANT TO DO IT IN A WAY 17 THAT RESULTS IN OUR BEARING THE POLLUTION PROPORTION FOR OUR 18 SAKE. 19 MR. TOOKER: WHAT I CAN SAFELY SAY IN RESPONSE IS 20 IF YOU WANT TO MINIMIZE THE AMOUNT OF POLLUTION YOU IMPORT, 21 YOU NEED TO BUILD THE CLEANEST FACILITIES THAT YOU CAN. 22 CHAIRMAN LLOYD: THANK YOU FOR THAT VERY STRAIGHT 23 FORWARD STATEMENT. 24 OUR NEXT WITNESS IS TIM SHIPPY, FROM PEERLESS 25 MANUFACTURING COMPANY, AND THEN AFTER THAT, WE HAVE ALLAN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 BEDWELL, AND THEN GARY RUBENSTEIN. 2 MR. SHIPPY: I WOULD LIKE TO THANK THE STAFF FOR 3 INVITING ME AND THE ARB STAFF FOR THE OUTSTANDING JOB BEING 4 CONDUCTED TOGETHER. 5 MY NAME IS TIM SHIPPY. I REPRESENT A COMPANY 6 CALLED PEERLESS MANUFACTURING, BASED OUT OF DALLAS. WE ARE 7 THE LEADING SCR SYSTEM SUPPLIERS IN THE UNITED STATES WITH 8 OVER 150 SYSTEMS SINCE WE BEGAN DOING SCR SYSTEMS IN THE LATE 9 1980'S. 10 OVER HALF OF THESE ARE FOR LARGE APPLICATIONS AND 11 ARE REPRESENTATIVE OF POWER PLANTS. WE SUPPLIED MANY OF THE 12 SCR SYSTEMS FOR THE PLAN IN THE BACT DOCUMENT AND ARE 13 SUPPLING MANY OF THE FUTURE PLANTS THAT WILL BE GOING IN 14 HOPEFULLY. 15 WE DO ARE DOING THE CALVINE SUTTER IN YUBA CITY, 16 THE SCR SYSTEM DOWN TO 2.35 OR 2.5 NOX OUTLET IN 10 PPM SLIP. 17 BUT I WOULD LIKE TO START AT TODAY IS THE BIG 18 PICTURE. THE PRIMARY GOAL IS TO LOWER THE OZONE LEVELS, AND 19 THE WAY TO DO THAT IS TO LOWER THE NOX AND VOCS. 20 SCR IS THE MOST RELIABLE AND BEST PROVEN 21 TECHNOLOGY FOR LARGE GAS TURBINE GREATER THAN 20 MEGAWATTS OF 22 ELECTRICITY. 23 THE TECHNOLOGY WAS DEVELOPED IN THE LATE 60'S AND 24 70'S AND APPLIED IN JAPAN AND IN EUROPE AND NOT UNTIL THE 25 LATE 1980'S DID IT COME INTO THE UNITED STATES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 I DO NOT WANT TO GO INTO DETAIL ABOUT THE BASIS OF 2 SCR, BUT FOR THOSE THAT ARE UNFAMILIAR WITH THE PROCESS, I 3 WOULD LIKE TO. THE SYSTEM CAN DO 90 TO 95 PERCENT 4 REDUCTIONS, AND WE HAVE ACTUALLY HAVE DONE SYSTEMS ON DIESEL 5 ENGINES AS HIGH AS 99 PERCENT REDUCTION. 6 SO, THE TECHNOLOGY APPLIES TO A WIDE RANGE, SO THE 7 TECHNOLOGIES -- WE HAVE THEM IN FIRE HEATERS IN THE 8 REFINERIES IN THE BAY AREA, AND WE CAN HANDLE MOSTLY FUELS, 9 AND IT BASICALLY REDUCES THE NOX, WHICH IS THE PRIMARY 10 PROBLEM THAT WE ARE LOOKING AT. 11 THE WAY THIS SYSTEM WORKS IS IT USES AMMONIA AND A 12 CATALYST WAY TO PRODUCE NOX THAT'S HARMLESS, NITROGEN, 75 13 PERCENT OF THE AIR THAT WE BREATHE, IN WATER, IT COMES OUT 14 THE STACK. 15 THE AMMONIA INJECTION SYSTEM IS THE KEY TO THE CRC 16 SYSTEM. THE AMMONIA IS DISTRIBUTED ACROSS THE FACE OF THE 17 CATALYST AND THEN THE CATALYST ABSORBS THE AMMONIA. 18 SO, THE CATALYST BASICALLY CAN BE CONSIDERED AS A 19 SPONGE ABSORBING THE AMMONIA THAT COMES ALONG. 20 NOW, THE SYSTEMS WERE DESIGNED TO MINIMIZE THIS 21 AMMONIA SLIPPAGE AND BECOME A TOPIC OF THE COMPETITORS WHO 22 ARE TRYING TO BASICALLY DRIVE OUR TECHNOLOGY OUT OF EXISTENCE 23 IN THE FUTURE. 24 SINCE THIS AMMONIA EMISSION ISSUE HAS BECOME A 25 MAJOR TOPIC, I WOULD LIKE TO TALK A LITTLE BIT ABOUT THAT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 WHAT IS AMMONIA SLIP? WHAT EFFECT DOES IT HAVE AND 2 WHAT CONTROLS IT? 3 WHY IS IT BEING LOWERED TO THIS 5 PPM THEN WE HAVE 4 BEEN GOING TO AND MOST HAS BEEN GOING TO 10 TO 20 PPM. 5 AS MENTIONED, THE SLIP IS THE AMMONIA THAT PASSES 6 THROUGH THE CATALYST. SINCE THE DEVELOPMENT IN THE 60'S AND 7 70'S AND IN COMMERCIALIZATION IN JAPAN AND IN EUROPE AND 8 FINALLY IN THE STATES IN THE 80'S, PERMITS HAVE TYPICALLY 9 BEEN 10 TO 20 PPM. 10 NOW, THIS IS GUARANTEED SLIP, AND THIS IS A VERY 11 IMPORTANT POINT THAT I WANT TO BRING UP, WHEN SYSTEMS, SCR 12 SYSTEMS SUPPLIER GUARANTEES 10 PPM AMMONIA SLIP AND THAT IS 13 NOT WHAT IS COMING OUT OF THE STACK, AS THE CATALYST AGES, 14 THAT SPONGE BEGINS TO LOSE ITS ACTIVITY, AND THE SLIP WILL 15 GRADUALLY INCREASE OVER TIME. 16 SO, ON A 10 PPM SLIP FOR THE FIRST COUPLE OF YEARS 17 OF OPERATION, THE SLIP WILL BE IN THE RANGE OF 0 TO MAYBE TO 18 2 TO MAYBE 3 PPM TOPS, AND IT WILL GRADUALLY INCREASE TO 10. 19 THIS IS BASED ON A 10 PPM GUARANTEE. SO, I WOULD 20 SAY OVER THE AVERAGE THESE SYSTEMS LAST ON A GUARANTEE, WE 21 GUARANTEE THESE THINGS FOR THREE TO FIVE YEARS BELOW THE PPM 22 AND TO THE 90 PERCENT OF UPS AND DOWNS TO THESE GIANT LEVELS 23 THAT ARE BEING TALKED ABOUT TODAY. 24 THIS SLIP WOULD AVERAGE APPROXIMATELY FOUR PPM OVER 25 AN EIGHT YEAR LIFE. WE HAVE SUPPLIED MANY SYSTEMS BACK IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 THE LATE 80'S THAT ARE STILL RUNNING TODAY WITH THEIR 2 ORIGINAL CATALYST AND HAVE NOT MET THEIR 10 PPM SLIP 3 CRITERIA. 4 SO, I WOULD SAY THAT 80 TO 90 PERCENT OF THE 5 SYSTEMS DID NOT REPLACE THEIR CATALYST THAT WE DID BACK IN 6 THE LATE 80'S AND EARLY 90'S. SO THE TECHNOLOGY IS PROVEN 7 AND IS RELIABLE. 8 THE NUMBER ONE POINT THAT I WANT PEOPLE TO 9 UNDERSTAND IS THE SLIP IS NOT SPEWING OUT 10 PPM AMMONIA ALL 10 THE TIME. 11 THE GENTLEMAN THAT IS GOING TO BE SPEAKING AFTER ME 12 WILL SAY A LOT ABOUT AMMONIA, SO I WANTED TO BRING THE ISSUES 13 UP. 14 I DID A LITTLE RESEARCH AND FOUND SOME VERY 15 INTERESTING DATA REGARDING AMMONIA SLIP. THE AIR RESOURCES 16 BOARD HAS ALREADY LOOKED AT DEVELOPING COMPREHENSIVE AMMONIA 17 EMISSIONS INVENTORY, AND ON THE CARB WEBSITE I FOUND AN 18 INTERESTING PRESENTATION ABOUT PATRICK GAFF, I BELIEVE IS HIS 19 NAME, GIVEN SOMETIME LAST YEAR. 20 THE PRESENTATION MATERIAL, A VERY NICE SLIDE I 21 MIGHT ADD, INVOLVES AMMONIA EMISSIONS, RESOURCES EMISSIONS, 22 CURRENT AMMONIA INVENTORIES, GENERAL INFORMATION AND 23 COMPLEXITY OF DEVELOPING THE AMMONIA EMISSIONS INVENTORY. 24 TWO PIE GRAPHS THAT DEPICTED THE PERCENTAGES OF 25 AMMONIA BASED ON A NATIONAL EMISSIONS ENTERED BASICALLY WAS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 BROKEN DOWN LIKE THIS, 43 PERCENT OF THE AMMONIA EMISSIONS 2 ARE FROM CATTLE, 27 PERCENT ARE FROM POULTRY, 10 PERCENT FROM 3 SWINE OR HOGS, 9 PERCENT FROM FERTILIZER, 5 PERCENT FROM 4 REFRIGERATION SOURCES AND 6 PERCENT FROM OTHER, AND THAT 5 OTHER IS WATER TREATMENT FACILITIES THAT USE AMMONIA, QUEMANS 6 EMIT AMMONIA, AND SHEEPS AND OTHERS. 7 THE OTHER STUDY WAS THE SAN JOAQUIN STUDY IN 1998 8 AND THE BREAKDOWN THERE WAS 44 PERCENT LIVESTOCK, 42 PERCENT 9 SOIL, AND 6 PERCENT FERTILIZER AND 4 PERCENT WATER TREATMENT 10 AND 4 PERCENT OTHER. 11 SO, SCR IS IN SUCH A SMALL BLIP ON THIS EMISSIONS 12 CRITERIA, BUT TO PUT IT IN MORE PERSPECTIVE, LET'S LOOK AT 13 TYPICAL EMISSIONS IN THIS REPORT BY MR. GAFF. 14 HIS REPORT INDICATES THAT THESE ARE TYPICAL 15 NUMBERS. 16 I MEAN THEY MAY BE A LITTLE BIT OFF, BUT IN HIS 17 REPORT HE HAD 585 DAIRY COWS PRODUCE 1700 POUNDS OF AMMONIA 18 AND 200,000 POULTRY PRODUCE 39 TONS PER YEAR, AND FERTILIZERS 19 PRODUCE 30 TONS PER YEAR PER 10 SQUARE MILES OF HARVESTED 20 FARMLAND. 21 SO, I WENT TO THE 1997 CALIFORNIA AGRICULTURAL 22 CENSUS WEBSITE AND FOUND THAT THERE ARE 1.4 MILLION DAIRY 23 COWS, AND 240 MILLION CHICKENS IN 17,000 SQUARE MILES OF 24 HARVESTED FARMLAND. 25 SO, THEREFORE, DAIRY COWS IN CALIFORNIA CONTRIBUTE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 TO 40,000, APPROXIMATELY, TONS PER YEAR OF AMMONIA. CHICKENS 2 PRODUCE 47,000 TONS PER YEAR, AND FERTILIZER 50,000 TONS PER 3 YEAR OF AMMONIA. 4 SO, JUST THESE LITTLE THINGS, THESE ARE JUST 5 CHICKENS, JUST A SMALL PORTION OF WHAT THE AMMONIA EMISSIONS 6 ARE. 7 SO, THERE IS ALSO NON DAIRY COWS, SOIL WATER 8 TREATMENT AND REFRIGERATION SYSTEMS THAT ARE IN AMMONIA. 9 NOW, LET'S LOOK AT EMISSIONS FROM SCR SYSTEMS, AND 10 LIKE I SAID, THE AVERAGE IS ABOUT FOUR PPM OVER THE LIFE OF 11 EIGHT YEARS OVER THE PROJECT. 12 LET'S CONSIDER THE POTENTIAL POWER PLANTS 13 REFERENCING THESE 35 POWER PLANTS. LET'S SAY THAT ALL 35 14 POWER PLANTS PUT SCR ON, AND LET'S SAY WE GUARANTEE THE 10 15 SLIP, THE OLD SLIP WE TALKED ABOUT. 16 A TYPICAL POWER PLANT IS A TWO GAS TURBINE, AND 17 THESE ARE BIG GAS TURBINES, AND LIKE I SAID, THE SCR HAS BEEN 18 DEVELOPED AND HAS BEEN PUT ON WESTINGHOUSE 501 S AND THESE 19 BIG GAS TURBINES THAT WE HAVE BEEN TALKING ABOUT, EVEN THE 20 NEW MACHINES, THE 501 G'S, ARE DOING CONSISTENCIES UP IN THE 21 NORTHEAST. 22 SO, IT IS VERY FLEXIBLE TECHNOLOGY. SO, THE 23 TYPICAL POWER PLANT CONSISTS OF TWO GAS TURBINES, AND LET'S 24 ASSUME THAT THESE TURBINES LIKE THE ONES AT THE SUTTER PLANT 25 IN YUBA CITY, AND LET'S TALK ABOUT THE SUTTER PLANT, THESE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 ARE WESTINGHOUSE 501 TURBINES WITH 500 MEGAWATTS. 2 THE AMMONIA EMISSIONS FOR EACH TURBINE IS BASED ON 3 5 PPM AVERAGES, WHICH IS REALLY HIGHER THAN WHAT IT REALLY IS 4 OVER AN EIGHT YEAR SPAN, WOULD BE 63 TONS A YEAR, OR MORE 5 REALISTIC, EACH OF THESE TURBINES WOULD BE ABOUT 3 PPM OVER 6 THE AVERAGE, WHICH IS ABOUT 38 TONS PER YEAR. 7 SO, WITH THE NEW GUIDANCE THAT IS TALKING ABOUT 5 8 PPM IN WHICH WE DO NOT HAVE A PROBLEM WITH GOING DOWN TO 5 9 PPM NOX, WE PREFER THAT THE NOX THAT THE AMMONIA EMISSIONS 10 STAY UP AT 10 PPM, BUT AT A 5 PPM GUARANTEE AS A GUIDANCE 11 THAT WE WOULD BE RUNNING ON A AVERAGE OF PROBABLY 0 TO 2 FOR 12 THE FIRST TWO TO THREE YEARS AND GRADUALLY INCREASE TO THE 5 13 PPM AFTER 8 TO 10 YEARS, WE ARE PROBABLY AVERAGING ABOUT 2 14 PPMS, WHICH WOULD BE ABOUT 25 TONS PER YEAR. 15 SO IF ALL THE 35 PLANTS PUT SCR ON THERE AND WE ARE 16 AT THE OLD CRITERIA OF 10 PPM SLIP THAT WOULD AMOUNT TO 17 18,000 TONS PER YEAR FROM 1,800 TO 2,000 TONS PER YEAR FOR 18 ALL THE POWER PLANTS. 19 AGAIN ONE POULTRY FARMER EMITS 196 TONS PER YEAR 20 AND THERE ARE 240 POULTRY FARMS IN CALIFORNIA. SO ONE POWER 21 PLANT IS COMPARED TO 63.5 TONS PER YEAR COMPARED TO 196 PER 22 YEAR FROM ONE POULTRY FARM. 23 SO I THINK THAT REALLY PUTS THINGS INTO PERSPECTIVE 24 ON WHAT WE ARE TALKING ABOUT ON THE AMMONIA EMISSIONS AND WHY 25 WE ARE TRYING TO DO HERE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 ON OUR COMPETING TECHNOLOGIES ARE COMING OUT TO THE 2 WORKSHOPS AND ARE REALLY HAMMERING THE AMMONIA ISSUE BUT TO 3 ME IT IS NOT AN ISSUE. 4 COST, YOU MAY BE ALL INTERESTED IN COST OF LOWERING 5 THE SLIP LIMIT. AGAIN, I AM GETTING AWAY FROM THE SUBJECT OF 6 WE ARE TRYING TO REDUCE NOX. I REALLY NEED TO TALK ABOUT 7 THIS AMMONIA. 8 GOING FROM A 10 PPM TO A 5 PPM SLIP. THEY ARE JUST 9 BALL PARK NUMBERS THAT DROP BACK EACH OF THESE POWER PLANTS, 10 LIKE THE SUTTER PLANT IS PROBABLY ABOUT $2 MILLION TO PUT SCR 11 ON BOTH TO GET DOWN TO 2.5 PPM NOX TO GET DOWN TO 2.0 BALL 12 PARK, TO GO TO THE 10 SLIP GUARANTEE TO A 5 SLIP GUARANTEE IS 13 WHAT YOU ARE DOING YOU ARE NOT DOING ANYTHING BY GOING ON THE 14 GUARANTEE, THE SLIP IS GOING TO BE ABOUT THE SAME BUT THE 15 COST INCREASE IS PUTTING MORE CATALYST AND MORE SPONGE TO 16 ABSORB THE AMMONIA PLUS YOU HAVE TO DISTRIBUTE THE AMMONIA A 17 LITTLE BIT BETTER TO MAKE SURE THAT YOU DO NOT EXCEED THOSE 18 SLIP LIMITS. 19 OUR GUARANTEE IS THAT 3 OR 4 OR 5 YEARS OUT, SO 20 THAT IS GOING TO THE 10 PPM OR THE 5 PPM. SO, YOU ARE ADDING 21 ABOUT 15 PERCENT TO THE COST INSTEAD OF 2.3 MILLION VERSUS $2 22 MILLION FOR A WHOLE PLANT. 23 THERE IS TALK ABOUT GOING DOWN TO TWO SLIP, AND 24 THAT IS SOMETHING THAT IN MASSACHUSETTS WHERE I BELIEVE I DO 25 NOT WANT TO GET INTO THE POLITICS THERE BUT THERE HAS BEEN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 SOME REAL INTERESTING POLITICS GOING ON UP THERE IN 2 MASSACHUSETTS WHERE THE CRITERIA IS TO BEGIN WITH ONE OF THE 3 GENTLEMAN I WENT TO A CONFERENCE WHERE THEY HAD A CONFERENCE 4 ASSOCIATION WHERE THERE IS A LOT OF POWER PLANTS, AND TO 5 ANSWER YOUR QUESTION, THERE IS PROBABLY, NORTHEAST, WHICH IS 6 COMPARABLE TO WHAT CALIFORNIA'S PROPOSAL, BUT MAYBE A LITTLE 7 BIT LESS, IN ALL THE NORTHEAST STATES, I SAW MASSACHUSETTS 8 7,000 MEGAWATTS, SO ALL OF THEM IN THE NORTHEAST ARE PROBABLY 9 CLOSE TO 15,000 TO 20,000 MEGAWATTS. 10 THERE IS TALK ABOUT GOING DOWN TO THIS 2 PPM SLIP 11 WHICH THE MASSACHUSETTS DET IS REALLY ON THE ZONE, NOX 12 TECHNOLOGY AND SAYS THOSE 2 PPM SLIP IS WHAT YOU WANT TO GO, 13 WE WANT TO GO TO ZERO AMMONIA SLIP. 14 WELL, WHAT HE DIDN'T REALIZE WHEN HE SAID THAT IS 15 THAT HE BREATHED OUT 3 PPM OF AMMONIA OUT OF HIS MOUTH. WE 16 ARE TRYING TO CONTROL STACKS IN MASSACHUSETTS DOWN TO 2 PPM. 17 THAT REALLY MAKES SENSE TO ME. 18 SO, IN CONCLUSION. ALTHOUGH SCR, I AM A SCR SYSTEM 19 SUPPLIER, AND IF YOU GUYS LOWER THIS TO 2 PPM AND 1 PPM NOX 20 AND TWO PPM AMMONIA SLIP, THEN THAT IS MORE MONEY TO OUR 21 COMPANY. 22 I AM UP HERE TALKING, AND LET'S LOOK AT THIS 23 REALISTICALLY. I AM LOOKING AT ECONOMICS-WISE IS THAT REALLY 24 HELPING THE ENVIRONMENT WHEN WE HAVE A POULTRY FARM DOING 196 25 TONS PER YEAR, AND THAT IS THREE TIMES WHAT THE POWER PLANT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 WILL DO OVER THE LIFETIME OF THE PROJECT. 2 IT JUST DOESN'T MAKE SENSE. 3 I LEAVE WITH THAT FINAL STATISTIC AS I TALKED TO 4 YOU HERE, AND YOU MAY WANT TO COVER UP, BUT WITH 3 PPM 5 AMMONIA COMING OUT OF MY MOUTH, WE SUPPORT THE GUIDANCE AND 6 WE UNDERSTAND THAT THE 5 PPM COULD DROP THE AMMONIA IS 7 REASONABLE AND THE CRITERIA IS GETTING DOWN TO 2.5 PPM NOX IS 8 DOABLE WITH THE SCR. 9 ACTUALLY YOU WILL LOWER IT, AND WHEN YOU ARE 10 LOWERING IT WITH THE AMMONIA SLIP AT THE SAME TIME, IT IS 11 VERY COST-PROHIBITIVE, AND YOU HAVE TO LOOK AT A LOT OF KEY 12 THINGS IN THE SCR SYSTEM TO REDUCE THE NOX DOWN THAT FAR WHEN 13 YOU ARE REDUCING THE AMMONIA SLIPS AT THE SAME TIME. 14 CHAIRMAN LLOYD: THANK YOU VERY MUCH, MR. SHIPPY. 15 I MUST SAY WE ARE TALKING ABOUT THE SCARCITY OF NOX 16 OFFSETS, AND I REALLY APPRECIATE THE EFFORT THAT YOU HAVE 17 GONE TO IDENTIFY ALL OF THE SOURCES THAT WE HAVE FOR AMMONIA. 18 WE DO NOT LACK SUFFICIENT AMMONIA OFFSETS. 19 MR. SHIPPY: I WAS HOPING I WAS GOING TO TALK AFTER 20 OTHER SPEAKERS, BUT I WAS UP FIRST, SO --. 21 CHAIRMAN LLOYD: ANY OTHER QUESTIONS FROM THE 22 BOARD? 23 THANK YOU. BY THE WAY, WHAT ARE WE ARE GOING TO DO 24 AT THIS STAGE? ARE WE GOING TO TAKE A HALF-HOUR BREAK? 25 THE COURT REPORTER IS RAISING HER HAND, AND WE ALSO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 NEED TO TAKE A BREAK, AND I KNOW THAT WE ARE COMING UP TO 2 SOME HEAVY TESTIMONY HERE, AND I WANT TO TAKE A BREAK. 3 BOARD MEMBER EDGERTON: I APPRECIATE YOUR COMMENTS 4 AND I APPRECIATE YOUR CONCERNS IN TRYING TO PUT IT INTO 5 PERSPECTIVE FOR US, BUT I ALSO, IN MY MIND, AMMONIA NITRATES 6 ARE OUR BIGGEST FINE PARTICULATE PROBLEM IN CALIFORNIA. 7 MR. SHIPPY: OKAY. I HAVE A COMMENT ON THAT. 8 BOARD MEMBER EDGERTON: I THOUGHT YOU MIGHT, AND I 9 WANTED TO GIVE YOU THE OPPORTUNITY. 10 MR. SHIPPY: THE AMMONIA NITRATE IN THE SAME REPORT 11 THAT MR. GAFF DID WITH COMING UP WITH AN INVENTORY OF THESE 12 ITEMS, AND LET ME FIND IT HERE IN MY SCRIBBLE. 13 BOARD MEMBER EDGERTON: I GUESS MY POINT IS, DON'T 14 WE HAVE A RESPONSIBILITY TO START TO DO THE VERY BEST WE CAN 15 WITH THE BEST AVAILABLE TECHNOLOGY? 16 ISN'T THAT THE LEGAL OBLIGATION THAT WE HAVE 17 IRRESPECTIVE OF HOW MUCH AMMONIA IS EMITTED? 18 MR. SHIPPY: WELL, IN PROSPECTIVE THOUGH, WE ARE 19 EMITTING VERY LITTLE AMOUNTS OF AMMONIA. 20 I MEAN, THE AMOUNT OF AMMONIA THAT IS EMITTED IN 21 THE TECHNOLOGY IS, LIKE I SAY, IT IS LOW, AND THAT IS WHY I 22 WAS GIVEN THESE STATS ON THE POULTRY FARMS AND THINGS LIKE 23 THAT. 24 BECAUSE IF YOU ARE ALL WORRIED ABOUT PPM .5 PPM 10 25 IN AMMONIA NITRATES, EVEN IF WE WERE PPM 10 ALL THE TIME, 24 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 HOURS A DAY, IN ALL 35 PLANTS, DOES NOT EVEN COME CLOSE TO 2 WHAT A GROUP OF JUST POULTRY FARMS WOULD BE IN AMMONIA 3 NITRATE EMISSIONS. 4 BOARD MEMBER EDGERTON: I JUST WANT YOU TO BE AWARE 5 THAT, FOR EXAMPLE, IN THE SOUTH COAST, ONE OF THE ISSUES THAT 6 HAS BEEN QUITE CONTROVERSIAL HAS BEEN THE DAIRY FARMERS AND 7 HAVING AGRICULTURAL ACTIVITY THERE. 8 SO, WHILE IN ONE SENSE IT IS AMUSING AND ANOTHER 9 SENSE IT IS SERIOUS. 10 MR. SHIPPY: NO, I TAKE IT TOTALLY SERIOUS. 11 LET'S LOWER IT DOWN, BUT LET'S GO TO A REASONABLE 12 STEP, AND I THINK THAT ARB HAS DONE THAT TO GO DOWN FROM A 10 13 TO A 5. 14 WE ARE HAVING WHAT OUR GUARANTEE IS, AND THAT IS 15 NOT WHAT IS GOING TO BE AMUSED BUT WE ARE HAVING WHAT WE 16 GUARANTEE FOR THE LIFE OF THE PROJECT. 17 SO, I SUPPORT THE DOCUMENT AS IT IS. 18 CHAIRMAN LLOYD: ANY OTHER COMMENTS FROM THE BOARD 19 MEMBERS? 20 WITH THAT, WE WILL ADJOURN AT 12 O'CLOCK AND GET 21 BACK HERE AT 12:30 PROMPT. 22 (THEREUPON THE LUNCH RECESS WAS TAKEN.) 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 A F T E R N O O N S E S S I O N 2 --O0O-- 3 CHAIRMAN LLOYD: I WOULD LIKE TO RECOMMENCE THE 4 HEARING, AND MR. ALLAN BEDWELL IS AVAILABLE FOR HIS 5 TESTIMONY -- NO. 6 I GUESS THEY DON'T FORFEIT. THEY HAVE THE RIGHT TO 7 COME BACK. 8 WE WILL CONTINUE WITH GARY RUBINSTEIN, SIERRA 9 RESEARCH. 10 MR. RUBENSTEIN: THANK YOU, MR. CHAIRMAN. 11 THERE WAS SOME SUGGESTION IN THE AUDIENCE THAT 12 MAYBE THEY DID FORFEIT THEIR SPOT. I UNDERSTAND THE CONCERN. 13 GOOD AFTERNOON, MEMBERS OF THE BOARD. 14 MY NAME IS GARY RUBENSTEIN, AND I AM A SENIOR 15 PARTNER OF SIERRA RESEARCH, AN AIR QUALITY CONSULTANT FIRM 16 BASED IN SACRAMENTO. 17 SIERRA HAS ASSISTED PROJECT DEVELOPERS IN 18 CALIFORNIA IN THE DESIGN AND LICENSING OF OVER 6,000 19 MEGAWATTS OF ELECTRICAL GENERATING CAPACITY OVER THE LAST 15 20 TO 20 YEARS. 21 OF THE 35 PROJECTS TOTALING OVER 22,000 MEGAWATTS 22 THAT THE CALIFORNIA ENERGY COMMISSION HAS IDENTIFIED AS 23 PROPOSED IN CALIFORNIA, AT THE PRESENT TIME WE ARE CURRENTLY 24 WORKING ON 8 OF THOSE PROJECTS TOTALING APPROXIMATELY 6,000 25 MEGAWATTS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 WE HAVE WORKED WITH ALL OF THE MAJOR EQUIPMENT 2 SUPPLIERS, INCLUDING BOTH TURBINE VENDORS, BOILER VENDORS AND 3 EMISSION CONTROL VENDORS, AND WE HAVE DIRECTLY WORKED ON SOME 4 OF THE PROJECTS THAT STAFF HAS IDENTIFIED AS BEING EXAMPLES 5 OF THE LEADING AIR POLLUTION CONTROL TECHNOLOGIES IN PLACE IN 6 CALIFORNIA TODAY, INCLUDING THE CROCKETT COGENERATION PROJECT 7 AND THE SMUD-SPA CAMPBELL SOUP COGENERATION PROJECT. 8 OUR EXPERIENCE INCLUDES ASSISTING PROJECT 9 DEVELOPERS WITH EMISSION CONTROL SYSTEM DESIGN ISSUES, 10 ASSISTING THEM WITH COMMISSIONING START UP ACTIVITIES, AND 11 PROJECT OPERATING ISSUES RELATED TO AIR POLLUTION CONTROL 12 SYSTEMS. 13 UNLIKE SOME OF THE OTHER SPEAKERS WHO ARE HERE 14 TODAY WE DO NOT SELL ANYTHING. WE ARE NOT HERE TO SELL ANY 15 EMISSION CONTROL SYSTEMS, AND WE HAVE NO FINANCIAL INTEREST 16 IN ANY ONE TECHNOLOGY AS COMPARED WITH ANY OTHERS. 17 IN GENERAL, WE SUPPORT THE STAFF'S EFFORTS AND 18 ESTABLISHMENT OF BACT LEVELS IN GUIDANCE OF A STATEWIDE BASIS 19 TO ENSURE CONSISTENCY AND PREDICTABILITY FOR POWER PLANT 20 LICENSING OVER THE COMING MONTHS. 21 AS YOU KNOW, WE ARE FACING AN UNPRECEDENTED SURGE 22 IN PROPOSALS FOR CLEAN, NEW POWER PLANTS IN CALIFORNIA TO 23 SATISFY THE PENT UP DEMAND FOR NEW GENERATION IN THE STATE. 24 WE BELIEVE THAT THE ESTABLISHMENT OF STATEWIDE 25 GUIDANCE FOR BACT FOR A PARTICULAR SOURCE CATEGORY SHOULD NOT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 BE THE MATTER OF ROUTINE AS BACT DECISIONS SHOULD BE MADE ON 2 A CASE-BY-CASE BASIS. 3 HOWEVER, WE BELIEVE WE ARE DEALING WITH AN 4 EXCEPTIONAL SITUATION HERE AND THAT EXCEPTIONAL REVIEW IS 5 APPROPRIATE AND THAT THE STAFF'S PROPOSED GUIDANCE OVER THE 6 NEXT ONE TO TWO YEARS WILL BE VERY USEFUL, NEVERTHELESS, 7 WHICH IS TO HELP CHRIS TOOKER'S WORKLOAD OVER THE COMING 8 MONTHS. 9 WITH RESPECT TO THE STAFF'S SPECIFIC PROPOSAL 10 REGARDING THE BACT REQUIREMENTS, WE BELIEVE THAT, IN GENERAL, 11 THEY REPRESENT STATE OF THE ART WITH RESPECT TO GAS TURBINES 12 AND POWER PLANTS. 13 HOWEVER, IN SOME CASES WE BELIEVE THAT THE STAFF'S 14 PROPOSAL WOULD REQUIRE CONCENTRATION OF POLLUTANTS TO BE 15 LOWER THAN THE CORRESPONDING LEVELS IN THE AIR RIGHT HERE. 16 IN OTHER CASES WE HAVE CONCERNS ABOUT THE ABILITY TO MEASURE 17 CONCENTRATIONS AT THESE LOW LEVELS. 18 AS MR. TOLLSTRUP INDICATED, THE ABILITY TO CONTROL 19 PUSH UP FOR POWER PLANTS HAS OUTPUSHED OUR ABILITY TO MEASURE 20 POLLUTANTS AND POWER PLANTS. 21 WITH RESPECT TO THE SPECIFIC RECOMMENDATIONS FOR 22 BACT THAT THE STAFF HAS PROPOSED, WE SUPPORT THE PROPOSED 23 BACT DETERMINATIONS FOR OXIDES OF NOX, SOX AND PM10. 24 WE CAUTIOUSLY SUPPORT THE PROPOSED DETERMINATION 25 FOR VOC EVEN THOUGH THIS REPRESENTS THE LEVEL IN THE STACK PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 THAT IS COMPARABLE TO AMBIENT LEVELS ON THOSE SUMMER DAYS. 2 HOWEVER, WE BELIEVE THAT THE PROPOSED BACT LEVEL 3 FOR HYDROCARBONS SHOULD BE CONTINGENT ON ADOPTION OF AN EPA 4 APPROVED TEST METHOD THAT IS CAPABLE FOR MEASURING 5 HYDROCARBON LEVELS AT LEAST 1 PPM BELOW THAT LEVEL. 6 WITH RESPECT TO CARBON MONOXIDE, WE BELIEVE THAT 7 THE STAFF'S PROPOSED DETERMINATION GOES TOO FAR EVEN IN THE 8 VERY FEW NONATTAINMENT AREAS THAT WE HAVE IN CALIFORNIA. 9 THE REASON IS BECAUSE IT REQUIRES CO LEVELS IN 10 POWER PLANT STACKS TO BE LOWER THAN THE STATE AMBIENT AIR 11 QUALITY STANDARD. 12 IT IS VERY DIFFICULT TO IMAGINE, BECAUSE I AM SURE 13 THAT WE HAVE NEVER DEALT WITH A SOURCE CATEGORY BEFORE IT IS 14 IMPOSSIBLE TO GET POLLUTION LEVELS FROM THE EXHAUST OF THAT 15 SOURCE LOWER THAN THE STATE AIR QUALITY STANDARDS, WHERE THE 16 AIR IS CERTAIN, WE CAN ALL BREATHE, BUT THAT IS THE FACT THAT 17 HAS HAPPENED WITH THE TECHNOLOGY HERE. 18 IN ATTAINMENT AREAS FOR CO WHICH IS MOST OF THE 19 STATE, WE AGREE WITH STAFF'S PROPOSAL THAT THERE SHOULD BE 20 FLEXIBILITY IN ESTABLISHING APPROPRIATE BACT LEVELS. 21 THE REASON WHY WE THINK THIS FLEXIBILITY IS 22 APPROPRIATE IS BECAUSE IT IS SIMPLY NOT POSSIBLE BECAUSE OF 23 THE WAY THESE PLANTS ARE DESIGNED FOR A PLANT LIKE THIS TO 24 CAUSE VIOLATIONS OF STATE OR FEDERAL CO LEVELS, NO MATTER 25 WHAT HAPPENS HERE, NO MATTER HOW MANY OF THEM YOU BUILD IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 ONE LOCATION, THEY SIMPLY AREN'T DIRTY ENOUGH TO CAUSE ANY 2 VIOLATIONS OF THE STATE STANDARDS. 3 THAT IS WHY WE THINK THAT FLEXIBILITY FOR 4 NONATTAINMENT IS APPROPRIATE. 5 FINALLY, WE BELIEVE THAT ANY OF THE BACT 6 DETERMINATIONS WITH RESPECT TO AMMONIA SLIP SHOULD BE 7 DEFERRED UNTIL SUCH TIME AS LOCAL AIR DISTRICTS ESTABLISHED 8 THE COMPREHENSIVE PLAN FOR DEALING WITH AMBIENT PM10 AND 9 PM2.5 CONTROLS. 10 WE BELIEVE THAT THE CURRENT DESIGN PRACTICE OF 11 REQUIRING PLANTS TO HAVE AMMONIA SLIP LEVELS OF NOT MORE THAN 12 10 PPM IS ADEQUATE AND SHOULD BE INCLUDED IN THE STAFF'S 13 GUIDANCE. 14 IF A MORE STRINGENT BACT LEVEL, FOR EXAMPLE 5 PPM 15 PROPOSED BY THE STAFF, IS REQUIRED TO THE BOARD CONNECTION 16 WITH FEEDBACK, SHOULD BE LIMITED TO ONLY THOSE AREAS OF THE 17 STATE THAT ACTUALLY HAVE THE BACT REQUIREMENTS FOR AMMONIA, 18 AND MOST AIR DISTRICTS DO NOT, BECAUSE THEY HAVE NOT TAKEN 19 THE STEP OF ACTUALLY SIGNING IT. 20 ONE OF THE CONTROL ISSUES SHOULD BE REQUIRED IF ANY 21 FROM INDUSTRIAL SOURCE. 22 OTHERS HAVE SUGGESTED LOWER LEVELS SHOULD BE 23 REQUIRED FOR NOX, CO AND OR AMMONIA. WE BELIEVE THAT THE 24 PROPOSED BACT LEVELS FOR NOX THAT STAFF HAS PROPOSED 25 REPRESENTING THE CUTTING EDGE OF TECHNOLOGY, AND THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 ALTERNATIVE TECHNOLOGIES UNDER DEVELOPMENT HAVE NOT BEEN 2 DEMONSTRATED TO CONSISTENTLY MEET LEVELS LOWER THAN THOSE 3 PROPOSED BY THE STAFF. 4 WITH RESPECT TO CO, WE DO NOT BELIEVE THERE IS ANY 5 RATIONAL BASIS FOR REQUIRING CO LEVELS TO CARBON STACK TO BE 6 LOWER THAN THE AMBIENT AIR QUALITY STANDARDS. 7 FINALLY, WE BELIEVE THAT IT IS PREMATURE TO REQUIRE 8 THESE 10 PPM REQUIREMENTS FOR THAT COMPOUND UNTIL SUCH TIME 9 AS THERE IS MORE PLANNING DONE TO DETERMINE WHETHER OR IN 10 WHAT WAY WE SHOULD CONTROL AMMONIA. 11 FOCUSING ON A COUPLE OF DETAIL MARKS WITH RESPECT 12 TO THE NOX LEVELS THAT ARE PROPOSED, AS I SAID, WE BELIEVE 13 THEY REPRESENT THE LIMIT OF TECHNOLOGY AT PRESENT AND LIKELY 14 FOR THE NEXT SEVERAL YEARS. 15 THE PROPOSED 2.5 PPM NOX LEVEL ON A ONE YEAR 16 AVERAGE BASIS WERE REQUIRED ACTUAL NOX LEVELS ON AN ONGOING 17 BASIS PROVIDING ADEQUATE COMPLIANCE MARKS WHICH IS NEARLY 99 18 PERCENT BELOW UNCONTROLLED LEVELS. 19 THERE ARE SERIOUS QUESTIONS ABOUT OUR ABILITY TO 20 MEASURE NOX LEVELS OF 2 TO 2.5 PARTS PER MILLION, AND IN 21 FACT, THE SOUTH COAST AIR QUALITY DISTRICT HAS ESTABLISHED 22 ENFORCEMENT TOLERANCE OF 1 ONE PART PER MILLION OF NOX 23 LEVELS, IN THIS CASE, THAT IS 40 PERCENT OF WHAT WE ARE 24 PROPOSING TO BE OUR LIMIT. 25 WHILE THERE HAS BEEN SOME DISCUSSION OF NEW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 EMISSION CONTROL TECHNOLOGIES, SUCH AS SCONOX, THAT HAVE THE 2 POTENTIAL TO ACHIEVE NOX LEVELS LOWER THAN 2.5 PPM, THAT 3 POTENTIAL SIMPLY HAS NOT BEEN DEMONSTRATED OR REALIZED. 4 FIRST, THE SCONOX TECHNOLOGY IS SIMPLY NOT 5 COMMERCIALLY AVAILABLE FROM ESTABLISHED VENDORS FOR THE SIZE 6 OF EQUIPMENT THAT WE ARE TALKING ABOUT TODAY, PROJECTS OVER 7 50 MEGAWATTS. 8 ARB IS THE EXCLUSIVE LICENSEE OF GOAL LINE'S SCONOX 9 SYSTEM FOR POWER GENERATION UNITS OF 100 MEGAWATTS OR 10 GREATER. 11 IN JANUARY 18, 1999 LETTER TO THE CONNECTICUT 12 DEPARTMENT OF ENVIRONMENTAL PROTECTION, ABB INDICATED "AT THE 13 PRESENT TIME A LARGE SCALE SCONOX DESIGN CONFIRMED SUITABLE 14 FOR INTEGRATION INTO AN ABB LARGE COMBINED-CYCLE POWER PLANT 15 SIMPLY DOES NOT EXIST." 16 I MET WITH SENIOR MANAGEMENT AT ABB IN BOSTON 17 EARLIER THIS WEEK, INCLUDED OFFICERS OF ABB POWER GENERATION, 18 HE CONFIRMED THAT THE POSITION EXPRESSED IN THE JANUARY 1999 19 LETTER REMAINS TRUE TODAY. 20 THE TECHNOLOGY IS SIMPLY NOT COMMERCIALLY AVAILABLE 21 FOR THE SIZE UNITS THAT WE ARE TALKING ABOUT. THEIR PLAN IS 22 TO HAVE THAT SYSTEM DESIGNED AND READY FOR COMMERCIAL 23 PROPOSALS WITHIN APPROXIMATELY 12 MONTHS OF LAST JANUARY OR 24 THE LAST QUARTER OF THIS YEAR OR THE FIRST QUARTER OF NEXT 25 YEAR. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 THAT IS THE FIRST TIME WHEN THE DESIGNS WILL BE 2 AVAILABLE SO THAT THE PROJECT DEVELOPER CAN EVEN GET A 3 QUOTATION, IT WILL STILL BE TWO OR THREE YEARS BEYOND THAT 4 BEFORE THESE DESIGNS ARE ACTUALLY IN OPERATION. 5 EVEN NOW, BASED ON THE WORK THAT HAS BEEN DONE OVER 6 THE LAST YEAR, IT IS CRYSTAL CLEAR THAT IF AND WHEN THE 7 SCONOX SYSTEM BECOMES COMMERCIALLY AVAILABLE, IT IS NOT GOING 8 TO LOOK ANYTHING LIKE THE SYSTEM THAT IS IN PLACE IN 9 DEVELOPMENT HERE IN SOUTHERN CALIFORNIA. 10 ANYONE WHO SUGGESTS ANYTHING DIFFERENT HAS SIMPLY 11 NOT KEPT ABREAST OF ABB'S DEVELOPMENT WORK IN THIS AREA. AS 12 YOU KNOW, IN-USE DEMONSTRATIONS ARE VERY CRITICAL TO 13 DETERMINATION OF BEST AVAILABLE CONTROL TECHNOLOGY. 14 STAFF PROPOSED VERY HEAVILY ON SOURCE TEST DATA AND 15 ON CONTINUOUS MONITORING DATA. LAST YEAR WE ASKED EPA FOR A 16 COPY OF THE CONTINUOUS MONITORING DATA THAT THEY RELIED UPON 17 IN REVIEWING THE SCONOX SYSTEM. 18 WE TOOK A LOOK AT THAT DATA AND THAT WAS THE SECOND 19 BATCH OF DATA SUBMITTED. THE FIRST BATCH DID SHOW A 20 PERFORMANCE THAT WAS PARTICULARLY GOOD AND THE SECOND BATCH 21 WAS MUCH BETTER AND EPA MADE THE SECOND BACT SHOULD BE TWO 22 AND A HALF PARTS PER MILLION FOR NOX. 23 OUR ONLY ANALYSIS OF THE DATA HAS BEEN PROVIDED TO 24 YOUR STAFF PREVIOUSLY. IT SHOWS THAT THE SCONOX SYSTEM IN 25 OPERATION IN SOUTHERN CALIFORNIA WOULD HAVE VIOLATED 2 PPM, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 3-HOUR NOX LIMIT AT A RATE OF 44 TIMES PER YEAR. 2 IF WE WOULD HAVE VIOLATED 2.5 PPM, 1 HOUR AVERAGE 3 LIMIT AT A RATE OF 24 TIMES PER YEAR. THAT IS NOT COUNTING 4 STARTUPS AND SHUTDOWNS WHICH ARE PERTAINED TO CONDITIONS THAT 5 ALL TRANSIENT AGENCIES DO NOT TREAT AS VIOLATION. 6 SOUTH COAST DISTRICT WHEN THEY REVIEWED THE EXACT 7 SAME DATA THOSE WERE ALL OKAY, THOSE ARE UPSETS AND 8 BREAKDOWNS. 9 THAT MAY BE FINE FOR A DEMONSTRATION PROJECT. WE 10 HAD EXPERIENCE WITH OPERATING PLANTS USING THESE TYPES OF 11 TECHNOLOGIES, ADVANCE LOW NOX DESIGNS. 12 OUR SOURCE IS THEY TEND TO GET UPSET IF YOU HAVE UP 13 SETS TWO OR THREE TIMES A YEAR, AND WE ADVISE OUR CLIENTS 14 DESIGN SYSTEMS SO THEY WILL NOT HAVE VIOLATIONS MORE THAN 15 FOUR OR FIVE TIMES A YEAR. 16 SCONOX SYSTEMS SIMPLY HAS NOT ESTABLISHED A RATIO 17 YET WITH THE AVAILABILITY TO MEET LEVELS AS LOW AS 2.5 PPM 18 WITH THE KIND OF ENFORCEMENT LEVEL THAT YOU EXPECT TO SEE 19 FROM A REGULARLY OPERATING POWER PLANT. 20 AND THE EARLIER THE SYSTEM DOES GO COMMERCIAL IT IS 21 NOT GOING TO BE THE SAME DESIGN. CONSEQUENTLY WE BELIEVE THE 22 STAFF'S PROPOSED LEVEL OF 2 AND 2.5 PPM REPRESENTS THE 23 CURRENT AND DEMONSTRATED STATE OF ART AND SHOULD BE APPROVED 24 BY THE BOARD AS STATEWIDE GUIDANCE. 25 WITH RESPECT TO LOWER CO LEVELS, AS I INDICATED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 EARLIER, WE BELIEVE THAT EVEN THE STAFF'S CURRENT PROPOSAL IS 2 TOO STRINGENT, BECAUSE IT REQUIRES THE AIR INSIDE THE TURBINE 3 EXHAUST STACKS TO BE CLEANER THAN THE STATE AMBIENT AIR 4 QUALITY STANDARDS. 5 THE FACT THAT THERE IS CONTROL TECHNOLOGY AVAILABLE 6 AND THAT IS INDISPUTABLE, THERE IS CONTROL TECHNOLOGY 7 AVAILABLE TO MAKE IT EVEN CLEANER, BUT IT IS A MATTER OF 8 POLICY, THE QUESTION OF WHY WE SHOULD REQUIRE SOMETHING LIKE 9 THAT TO GET CO LEVELS IN THE STACK LOWER THAN THE AMBIENT 10 LEVEL STANDARDS. 11 SOME PROJECTS DEVELOPERS MAY CHOSE TO PROPOSE LOWER 12 CO LEVELS, BUT I DO NOT BELIEVE THAT THE STATE OR LOCAL AIR 13 DISTRICT SHOULD REQUIRE THAT KIND OF PERFORMANCE AND 14 CERTAINLY NOT IN MORE ATTAINMENT AREAS WHICH IS IN MOST OF 15 CALIFORNIA. 16 AND FINALLY WITH RESPECT TO LOWER AMMONIA SLIP 17 LEVELS, AS I MENTIONED THERE IS NO BASIS AS YET FOR 18 ESTABLISHING LOWER AMMONIA SLIP LEVELS AND SIMPLY BECAUSE 19 THERE HAS NOT BEEN A LOT OF WORK GOING ON IN CALIFORNIA. AND 20 OBVIOUSLY MANY DISTRICTS ARE PUTTING TOGETHER THE PPM 10 21 QUALITY PLANS AND AMMONIA IS A CRITICAL COMPONENT OF THAT AND 22 THERE IS NO QUESTION ABOUT THAT. 23 BUT NO ONE HAS DECIDED YET WHAT SOURCES OF AMMONIA 24 WE ARE LOOKING AT AND WHAT LEVEL OF CONTROL IS REQUIRED. 25 SOME HAS SUGGESTED THAT IF WE DO NOT DO SOMETHING NOW, THERE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 IS GOING TO BE A LAND RUSH OF PROJECTS GETTING THE 10 PPM AND 2 WE ARE GOING TO LOSE THIS TREMENDOUS OPPORTUNITY AND THAT IS 3 SIMPLY NOT THE CASE. 4 ALL THE PLANTS REQUIRE TODAY WOULD BE ABLE PROPOSED 5 TODAY WOULD BE ABLE TO MEET THE 5 PPM SLIP LEVEL IF REQUIRED 6 TO DO SO IN FUTURE DATES. IT REQUIRES INCREASE THIS 7 OPERATING COST AND IT REQUIRES MORE FREQUENT CHANGES OF 8 CATALYST AND ASSOCIATED WASTE DISPOSAL BUT THERE ARE NO 9 TECHNICAL IMPEDIMENT TO DOING THAT. 10 BUT PLANTS TODAY IN 10 PPM AMMONIA SLIP DOES NOT 11 MEAN THAT YOU CANNOT REQUIRE THEM TO COME TO A LOWER LEVEL IF 12 YOU DECIDE YOU NEED TO. 13 YOU CAN LOWER AMMONIA SLIP LEVELS THAT COULD GET 14 YOU FROM THE EXISTING GROUP OF PLANTS AT EVEN GREATER COST BY 15 ADDING ADDITIONAL CATALYST AND ALL PRUDENT DESIGNS INCLUDING 16 THE SCONOX SYSTEM TO MAKE PROVISION FOR THE ADDITIONAL 17 CATALYST MATERIAL TO BE ADDED AT A LATER DATE AS NECESSARY. 18 CONSEQUENTLY THERE ARE NO LOST OPPORTUNITIES. AND 19 I BELIEVE IT IS PREMATURE TO JUMP IN AND ESTABLISH A BACT 20 LEVEL FOR A AMMONIA SLIP THAT IS LOWER THAN THE CURRENT SLIDE 21 PRACTICE UNTIL WE REALLY LOOK INSIDE AND DECIDE WHETHER WE 22 NEED TO CONTROL EMISSIONS FROM THESE TYPES OF SOURCES. 23 SUGGESTIONS BY GOAL LINE OF NORMAL TECHNOLOGIES 24 THAT HAVE A LOWER AMMONIA SLIP OF 2 PPM SHOULD BE SET FORTH 25 BY BAY AREA GUIDANCE AND FRANKLY I THINK IT SHOULD BE BASED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 ON THEM WANTING TO SELL THEIR EQUIPMENT. 2 THIS IS THE MOST EVIDENCE AS WHEN YOU TAKE A LOOK 3 AT HOW GOAL LINE HAS PARTICIPATED IN LICENSING PROCEDURES 4 ACROSS THE COUNTRY. IN THE CASE OF ONE PROJECT IF 5 CONNECTICUT, THEY CHALLENGED THE PERMIT ISSUE FOR A PROJECT 6 BECAUSE THE BACT DETERMINED ISSUED BY THE CONNECTICUT'S 7 DEPARTMENT OF ENVIRONMENTAL PROTECTION. IT DID NOT SPECIFY 8 THAT STILL NOX WAS BACT. 9 THERE ARE OTHER ISSUES THAT THE BOARD SHOULD BE 10 AWARE OF REGARDING THE SCONOX SYSTEM BEFORE ADOPTING ANY 11 REQUIREMENTS BASED ON THE TECHNOLOGY. 12 FOR EXAMPLE, AT THE OPERATING DEMONSTRATION 13 FACILITIES IN SOUTHERN CALIFORNIA, EMISSION CONTROL CONSISTED 14 SIMPLY QUITE MORE THAN JUST THE SCONOX CATALYST. THAT PLANT 15 USES WATER INJECTION AS PART OF ITS NOX CONTROL SYSTEM, AND 16 REQUIRES A SULFUR SCRUBBER TO REMOVE SULFUR IN THE NATURAL 17 GAS. 18 AS WE ALL KNOW THERE ARE ONLY TRACE QUANTITIES OF 19 SULFUR PRESENT IN NATURAL GAS. FROM THE SCONOX CATALYST IT 20 IS SO SENSITIVE TO SULFUR THAT EVEN SMALL AMOUNTS OF SULFUR 21 WILL RENDER THE CATALYST INEFFECTIVE WITHIN A RELATIVELY 22 SHORT PERIOD OF TIME AND SCONOX SHOWS VERY CLEARLY HOW THEY 23 COULD NOT MEET 2.5 PPM LEVEL ON A DAILY AVERAGE BASIS WITHOUT 24 SOME TREATMENTS OF THE SULFUR IN THE NATURAL GAS AND THAT IS 25 WHY THEY HAVE THAT SYSTEM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 ONCE AGAIN ABB'S DESIGN PROPOSAL FOR THE SCONOX 2 SYSTEMS IS QUITE DIFFERENT THAN GOAL LINE'S IN MANY RESPECTS. 3 AND I DO NOT THINK THAT YOU ARE GOING TO SEE SULFUR SCRUBBERS 4 ON NEW PLANTS ONCE THAT SYSTEM GETS COMMERCIAL. 5 HOWEVER, THAT SYSTEM HAS NOT BEEN TESTED YET. 6 IN SUMMARY, WE SUPPORT THE PROPOSED BACT 7 DETERMINATIONS FOR NOX, SOX, AND PM 10 EMISSIONS. WE 8 CAUTIOUSLY SUPPORT THE PROPOSED VOC DETERMINATION FOR 9 HYDROCARBONS CONTINGENT ON ADOPTION OF AN EPA APPROVED TEST 10 METHOD THAT HAS A SENSITIVITY AND DETECTION LEVEL AT LEAST 1 11 PPM BELOW THE PROPOSED LIMIT. 12 IN CO ATTAINMENT AREAS, WHICH INCLUDE MOST OF 13 CALIFORNIA, WE SUPPORT STAFF'S PROPOSAL THAT THERE SHOULD BE 14 FLEXIBILITY IN ESTABLISHING CO LEVELS WITHIN POWER PLANTS AND 15 FOR NONATTAINMENT AREAS. WE DO NOT BELIEVE THE BACT LEVEL 16 SHOULD BE ANY MORE STRINGENT THAN THE STATE AMBIENT AIR 17 QUALITY STANDARD. 18 FINALLY, WE BELIEVE THAT ANY BACT DETERMINATION 19 WITH RESPECT TO AMMONIA SLIP SHOULD BE DEFERRED UNTIL SUCH 20 TIME AS DISTRICTS DETERMINE THE NEED TO CONTROL AMMONIA 21 EMISSIONS AS THE NEED FROM INDUSTRIAL SOURCES. 22 IN THE ALTERNATIVE, WE BELIEVE THAT THE STAFF'S 23 PROPOSAL OF 5 PPM BACT DETERMINATION SHOULD BE APPLICABLE 24 ONLY IN THOSE AREAS OF THE STATE WHICH HAVE A PLACE TO SIGN 25 IF THEY NEED TO OPPOSE BACT FOR AMMONIA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 WE BELIEVE THAT STAFF'S PROPOSAL IS MOST TIMELY, 2 AND WE URGE YOUR CONSIDERATION AND ADOPTION OF GUIDELINES IN 3 SOME FORM TODAY. THE MERE PRESENCE OF PROPOSED GUIDELINES 4 OVER THE LAST SEVERAL MONTHS HAS PROVED TO BE DISRUPTIVE TO 5 THE LICENSING PROCESS, AND FURTHER DELAYS AND UNCERTAINTY 6 BECAUSE OF A DELAYED DECISION BY YOUR BOARD WOULD 7 RESPECTFULLY MAKES THINGS WORSE. 8 THUS, WE WOULD URGE THAT YOU REJECT ANY SUGGESTIONS 9 FOR DELAYS AND THAT YOU MAKE A DECISION TODAY. 10 I ALSO HAVE ANSWERS TO A COUPLE OF THE QUESTIONS 11 THAT WERE RAISED EARLIER BY MS. EDGERTON REGARDING POWER 12 PLANT DEVELOPMENT IN OTHER PARTS OF THE COUNTY. 13 ACTUALLY, I HAVE WITH ME PERMITS THAT HAVE GONE OUT 14 TO PUBLIC COMMENT FOR 5 PROJECTS IN THE NORTHEAST TOTALING 15 SOME 2500 MEGAWATTS, THE PERMITS THAT ARE ISSUED IN 16 MASSACHUSETTS, NEW HAMPSHIRE, CONNECTICUT, AND MAINE AND 17 GIVEN THAT STATE OF ACTIVITY, IN FACT, THOSE STATES TOGETHER 18 ARE ALREADY AHEAD OF CALIFORNIA. 19 THEY HAVE MORE PROJECTS FURTHER DOWN THE LINE OF 20 MEGAWATT BASIS THAN WE DO. 21 WITH RESPECT TO LEVELS OF AMMONIA NITRATE, ACTUALLY 22 MOST OF THE STATE AMMONIA NITRATES REPRESENTS SOMEWHERE 23 BETWEEN 10 AND 25 PERCENT OF TOTAL PM 10 LEVELS, AND THAT 24 THERE IS QUITE A BIT BY AREA WITH SOME OF THE MOST SEVERE 25 PROBLEMS ACTUALLY NEEDING THE AGRICULTURE REGIONS LIKE THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 SAN JOAQUIN VALLEY WHERE AMMONIA NITRATE IS A HIGHER FRACTION 2 THAN TOTAL. 3 I HAVE NEVER FOUND ANY SMOKING GUN IF YOU WILL WITH 4 RESPECT TO FINE PARTICLES. IF YOU CONTINUE TO WORK WITH THE 5 SOOT THAT IS OUT THERE, IT IS A REAL MIX OF DIFFERENT THINGS, 6 WHICH IS SOME REASON WHY IT IS SO COMPLICATED, BUT YOU CANNOT 7 POINT TO ANY ONE COMPONENT LIKE NITRATES OR AMMONIA NITRATES, 8 LET'S SAY IT IS A LOT OF DIFFERENT COMPONENTS. 9 THANK YOU FOR YOUR TIME. THAT CONCLUDES MY 10 PRESENTATION, AND I WILL BE HAPPY TO ANSWER ANY QUESTIONS 11 THAT YOU MAY HAVE. 12 CHAIRMAN LLOYD: THANK YOU VERY MUCH, MR. 13 RUBENSTEIN. 14 A QUESTION, YOU TALK ABOUT CO IN NONATTAINMENT 15 AREAS, HOW DO YOU RECONCILE YOUR COMMENTS WITH THE FACT THAT 16 RECENTLY NATIONAL ACADEMY OF SCIENCE ASSOCIATED CO AS A 17 PRECURSOR TO OZONE? 18 MR. RUBENSTEIN: I AM AWARE OF THAT ISSUE, AND 19 FRANKLY, I WOULD HAVE THOUGHT THAT BEFORE THE STATE EMBARKED 20 ON THE PROCESS OF EXCLUDING ETHANE, WHICH IS MORE REACTIVE 21 THAN CO IN THE OZONE PROCESS, ETHANE IS NOW EXCLUDED FROM ALL 22 HYDROCARBON REGULATION IN CALIFORNIA, THAT WOULD HAVE BEEN 23 CONSIDERED. 24 I THINK THAT IF THERE IS CONCERN ABOUT LOOKING AT 25 THE LESSER REACTIVE COMPOUNDS WHICH ARE POSSIBLY MOST PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 CRITICAL IN THE SOUTH COAST AREAS WHERE YOU HAVE MORE 2 TRANSPORT BUSINESSES, I THINK THAT SHOULD BE DONE IN A 3 COORDINATED MANNER. 4 OPPOSING THE CO IS GOING TO BE REGULATED AS A MILD 5 PRECURSOR, I THINK THAT WOULD SORT OF BE APPROPRIATE. 6 I DON'T THINK YOU SHOULD DO THAT BY LOOKING AT A 7 BACT DETERMINATION AS AN OPPORTUNITY TO DEVELOP, IF YOU WILL, 8 A INTERPLAY PLANT REDUCTION. 9 CHAIRMAN LLOYD: WE HAVE TO RESPOND TO THE 10 SUGGESTIONS FROM THE ACADEMY HERE AND FOR THE BACT HEADING 11 DOWN THE LINE THIS IS AN ADDITIONAL DIMENSION THAT I THINK WE 12 NEED TO ADDRESS, AND WE HAVE TO ADDRESS IT ALSO IN YOUR 13 VIEWS. 14 MS. EDGERTON. 15 BOARD MEMBER EDGERTON: THANK YOU FOR ANSWERING A 16 COUPLE OF MY QUESTIONS. 17 OF THE EIGHT THAT YOU ARE IN YOUR OFFICE WHERE YOU 18 HAVE BEEN ADVISING, THE EIGHT POWER PLANTS, WHAT ARE THEY, 19 ARE ANY OF THEM SCONOX OR ZONEON OR CATALYTICA? 20 MR. RUBENSTEIN: WELL, ACTUALLY WE HAVE DONE SOME 21 WORK FOR CATALYTICA IN SANTA CLARA, BUT THAT IS A SMALL PILOT 22 PROJECT, AND TECHNICALLY THE LARGER POWER PLANT PROJECTS THAT 23 WE ARE WORKING ON INVOLVED THAT TECHNOLOGY, NONE OF THE 24 PROJECTS THAT WE ARE WORKING ON ARE SCONOX TECHNOLOGY, 25 BECAUSE AS I HAVE SAID, THE TECHNOLOGY IS NOT COMMERCIALLY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 AVAILABLE FOR THE SIZE OF UNITS THAT ARE BEING PROPOSED. 2 I CAN ASSURE YOU THAT IF SOMEONE HAD A NON-AMMONIA 3 BASED CONTROL TECHNOLOGY OUT THERE, THERE WOULD BE A LONG 4 LINE OF PEOPLE SIGNING UP. 5 BOARD MEMBER EDGERTON: BUT GIVEN WHAT YOU KNOW AND 6 GIVEN WHAT YOUR CONVERSATIONS WITH ABB, AT WHAT POINT WOULD 7 YOU SUGGEST TO YOUR POTENTIAL CLIENTS, I WANT TO PUT TOGETHER 8 AN ENERGY PLANT OR A FINANCING CONSORTIUM, AND I CAME TO YOU 9 AND I SAID, TELL ME YOUR WHAT IS YOUR ADVICE, AT WHAT POINT 10 WOULD YOU SOLICIT THAT OR WOULD YOU ADVISE ME OR YOU TELLING 11 YOUR POWER PLANT PEOPLE TO COME TO YOUR COMPANY? 12 MR. RUBENSTEIN: WHAT I AM TELLING THEM IS THAT AT 13 THE PRESENT TIME IF THEY NEED TO GET A LICENSE FOR PROJECT IN 14 THE NEXT 6 TO 9 TO 12 MONTHS THAT IT IS UNLIKELY THAT THEY 15 ARE GOING TO FIND A COMMERCIAL PROPOSAL OR COMMERCIAL 16 GUARANTEE FROM ABB THAT IS GOING TO SATISFY THEIR NEEDS, 17 BECAUSE IF THEY WANT TO GET A LICENSE IN THE NEXT 6 TO 9 18 MONTHS THEY WOULD HAVE HAD TO FILE THEIR APPLICATION 6 TO 9 19 MONTHS AGO, THEY ARE ALREADY IN THE PIPELINE. 20 FOR PROJECTS THAT ARE GOING TO BE COMING DOWN OVER 21 THE NEXT 6 TO 12 MONTHS THEN, AS ABB MOVES TOWARDS MAKING 22 THIS TECHNOLOGY COMMERCIALLY AVAILABLE, AS CATALYTICA, AS 23 GENERAL ELECTRIC MOVES TOWARD MAKING THE OZONE TECHNOLOGY 24 COMMERCIALLY AVAILABLE FOR LARGE PLANTS, THEN I WOULD 25 CERTAINLY ENCOURAGE MY CLIENTS TO LOOK AT THAT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 THERE IS NO REASON NOT TO. 2 BOARD MEMBER EDGERTON: SO, MY UNDERSTANDING, 3 RIGHT, ASSUMING THAT I COME TO YOU WITH MY PROPOSAL, MY LYNN 4 EDGERTON PLANT, AND I'M NOT IN THE PIPELINE YET, NOW I 5 WANTED -- SO, YOU SAY IF I WANTED TO USE THE SCONOX OR IF I 6 WANT TO GO TO ABB OR GE THAT I COULD FILE IT WITH THE ENERGY 7 COMMISSION NOW, BUT I WOULDN'T, I SHOULDN'T EXPECT TO BE ABLE 8 TO REPRESENT OR I WANT TO OPERATE IT UNTIL A YEAR OR SO FROM 9 NOW? 10 MR. RUBENSTEIN: NO, I WOULD ENCOURAGE YOU TO FILE 11 AN APPLICATION TO GIVE YOU THE FLEXIBILITY TO CHOOSE ANY ONE 12 OF THESE TECHNOLOGIES. 13 BECAUSE I THINK WHEN IT COMES TO WHAT THE GUARANTEE 14 THE COMMERCIAL GUARANTEE OF THESE LEVELS WON'T BE THE SAME. 15 THERE ARE SOME ADVANTAGES AND DISADVANTAGES TO EACH OF THE 16 TECHNOLOGY. 17 FOR EXAMPLE, MANY POWER PLANTS IN CALIFORNIA USE 18 WHAT IS CALLED DUCT-FIRING, WHERE THEY HAVE BURNERS IN THE 19 WASTE HEAT RECOVERY BOILERS TO GENERATE ADDITIONAL HEAT IN 20 THE SUMMERTIME BECAUSE TURBINE GAS TURBINES ARE VERY 21 SENSITIVE TO TEMPERATURE, AND IT INCLINES AS TEMPERATURE GOES 22 UP, SO THE TURBINES TEND TO HAVE LOWER OUTPUT IN THE 23 SUMMERTIME, WHICH IS WHEN THEY NEED OUTPUT THE MOST. 24 THESE DUCT-BURNERS ARE BURNERS, THEY GENERATE NOX 25 EMISSIONS, AND SCR SYSTEMS OR SCONOX SYSTEM WHICH CONTROL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 THOSE EMISSIONS, THE NOX SYSTEM WOULD NOT BECAUSE IT CONTROLS 2 NOX EMISSIONS IN THE TURBINE, SO I WOULD HAVE TO ASK YOU WERE 3 YOU PLANNING ON USING DUCT-FIRE OR NOT BECAUSE IF YOU WERE 4 THEN I MAY SUGGEST YOU TO USE SOME CATALYTICA CONTROL RATHER 5 THAN SCONOX, IF NOT, YOU MIGHT HAVE ALL THREE. 6 I WOULD ASK QUESTIONS ABOUT WHAT OTHER TYPES OF 7 OPERATIONS ARE GOING TO BE IN THE FACILITY, WHAT THE DUTY 8 CYCLE IS GOING TO BE, AND THEN THERE ARE OTHER THINGS THAT 9 HELP YOU GET TO THE POINT TO DECIDE, OKAY, WHICH TECHNOLOGY 10 SHOULD I SOLICIT QUOTATIONS FOR, AND CLEARLY THE SCR SYSTEM 11 IS GOING TO HAVE HIGHER OPERATING MAINTENANCE COST OVER ITS 12 LIFE THAN SCONOX SYSTEMS, AND SO YOU ARE GOING TO WANT TO 13 COMPARE THE LIFE-CYCLE ACROSS THE BOTH OF THOSE TO MAKE YOUR 14 DETERMINATION. 15 THE PROBLEM IS THAT IF I GAVE YOU THAT ADVICE 16 TODAY, YOU WOULDN'T BE ABLE TO DO ANYTHING WITH IT, BECAUSE 17 YOU CANNOT GET THAT KIND OF INFORMATION FROM ANYBODY ABOUT 18 THE SCONOX SYSTEM, AND I'M NOT SURE IF YOU CAN GET THAT 19 INFORMATION ABOUT ZONEON FOR THE TYPES OF PLANTS THAT WE ARE 20 TALKING ABOUT. 21 WE ARE ALL TALKING ABOUT THE SAME APPROXIMATE LEVEL 22 OF EMISSION CONTROL. THE COMPETITION IS GOING TO BE BETWEEN 23 THESE TECHNOLOGIES ON ECONOMICS AND RELIABILITY, WHICH I 24 THINK IS WHERE IT SHOULD BE. 25 BOARD MEMBER EDGERTON: BUT DO YOU THINK IF I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 UNDERSTAND YOU RIGHT BY THE END OF THE YEAR I COULD GET THIS 2 INFORMATION? 3 MR RUBENSTEIN: RIGHT. 4 THAT IS YOUR CURRENT STATED INTENTION AND THAT MAY 5 SLIP. 6 BOARD MEMBER EDGERTON: THANK YOU. 7 BOARD MEMBER FRIEDMAN: WHO WOULD WE GET, JUST GET 8 STAFF SPEAKING, SPECIFICALLY ABOUT THE CARBON MONOXIDE STACK 9 ISSUE THAT MR. RUBENSTEIN RAISED, I KNOW THAT WE HAVE BEEN 10 HEARING FROM GARY FOR AT LEAST THREE OR FOUR MONTHS WITH 11 THESE ARGUMENTS, SO WHAT IS OUR VIEW OF THE POINTS THAT HE 12 HAS BEEN MAKING? 13 MR. VENTURINI: DR. FRIEDMAN, LET ME MAKE A COUPLE 14 POINTS, THEN I WILL ASK MR. TOLLSTRUP TO HANDLE THE TECHNICAL 15 PERSPECTIVE. 16 LOOKING AT THE CO, AND ONE OF THE THINGS THAT 17 GUIDES US IS THE FACT OF DETERMINATION AND THE GUIDELINES FOR 18 THAT, BASICALLY WE LOOKED A LITTLE BIT AT WHAT PROJECT 19 APPLICANTS HAVE PUT IN THEIR PERMITS NOW, THEY ARE AGREEING 20 TO WHAT HAS BEEN DONE ELSEWHERE, AND BASICALLY THERE IS 6 21 PPM, WE ARE RECOMMENDING AND STAY CONSISTENT WITH APPLICANTS 22 PROPOSALS AT THIS TIME. 23 WE DID PUT SOME LANGUAGE AND GUIDANCE FLEXIBILITY 24 IN THE CONTAINMENT AREAS THAT DISTRICTS COULD CONSIDER THEIR 25 OWN SPECIFIC SITUATION. BECAUSE I THINK THE IMPORTANT POINT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 HERE IS THAT THE DISTRICTS, THEY HAVE THE ULTIMATE FINAL 2 DECISION MAKING ON WHAT IS BACKED ON A CASE BY CASE BASIS. 3 THIS GIVING THEM THE BEST THINKING WE HAVE AT THIS 4 POINT ON THIS. 5 WITH RESPECT TO THE AMMONIA SITUATION, EXCEPT FOR 6 THE SOUTH COAST, NONE OF THE OTHER DISTRICTS TO MY 7 ACKNOWLEDGE ADDRESS IT ONLY IN THE RULES. 8 LOOKING AT ALL THE TECHNOLOGY, LOOKING AT WHAT IS 9 BEING DONE, WE FELT COMFORTABLE SUGGESTING THAT THAT LEVEL, 10 WHICH IS TYPICALLY 10, NOW ON SLIP THAT, WE FELT COMFORTABLE 11 AND IT WOULD BE PRUDENT TO MOVE THAT DOWN TO 5 OR LOWER IS 12 WHAT OUR SUGGESTION AND THAT WE FELT THIS SHOULD HAVE 13 FLEXIBILITY ON THAT DEPENDING ON THEIR OWN LOCAL SITUATION, 14 THEIR NEED AND SITUATION WITH RESPECTIVE PPM IN THEIR AREA. 15 BOARD MEMBER FRIEDMAN: WELL, I'M JUST TRYING TO 16 SIT HERE AND REASON OUT THE ISSUE OF NBM CO IS GREATER THAN 17 CO IN THE STACK, I'M TRYING TO MAKE SENSE, AND I'M WHERE I 18 DON'T CARE ABOUT OTHER APPLICATIONS HAVE CONTAINED, I WANT TO 19 KNOW THAT THE INTELLIGENCE OF THE ISSUE, AND I COULD 20 APPRECIATE NO MATTER WHAT THE CO LEVEL IS IN THE STACK IT 21 STILL GOING TO CONTRIBUTE CARBON MONOXIDE AND MAYBE THE 22 ANSWER IS THAT WE HAVE TOO MUCH CARBON MONOXIDE IN THE 23 AMBIENT ENVIRONMENT, BUT IT IS A LITTLE BIT STRANGE TO 24 SUGGEST LESSER LEVELS WHEN THE LEVELS ARE ALREADY BELOW WHAT 25 WE ARE EXPOSED TO ALL THE TIME. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 MR. SCHEIBLE: I WOULD SAY, DR. FRIEDMAN, WHERE YOU 2 NEED CO REDUCTIONS, EVERY LITTLE BIT HELPS, AND THIS IS A 3 LITTLE BIT THAT IS A FEW HUNDRED TONS A YEAR PROBABLY FROM A 4 MAJOR SIZE POWER UNIT. 5 THE FACT THAT THE TECHNOLOGY LEVEL IN THE STACK IS 6 LOWER THAN THE STANDARD, WE HAVE A SIMILAR SITUATION WITH 7 CARS WHEREAS THE LEV TECHNOLOGY CARS OR IN ANY CASE WOULD BE 8 THE AIR OUT IS CLEANER THAN WHAT WENT IN, THAT DOES NOT MAKE 9 EMISSION REDUCTIONS WORTHLESS. 10 IT JUST MEANS THAT THEY ARE NOT THE CARS THAT ARE 11 VERY CLEAN. 12 BOARD MEMBER FRIEDMAN: THANK YOU. I APPRECIATE 13 THAT. 14 CHAIRMAN LLOYD: I WOULD LIKE TO ASK A QUESTION OF 15 STAFF, AND I GUESS MAYBE ITS THAT MR. BEDWELL MISSED HIS 16 TURN, AND I REALIZE, GARY, YOU REALIZE THE SIGNIFICANCE OF 17 YOUR STATEMENTS REASONABLY QUESTIONING THE SCONOX DATA SAYING 18 THAT YOU HAVE 44 VIOLATIONS OF THE 2 PPM STANDARD, I THOUGHT 19 YOU INDICATED THAT YOU SHARED THAT WITH THE ARB STAFF. 20 MR. RUBENSTEIN: YES. THAT ANALYSIS WAS ATTACHED 21 TO MY MAY 17, 1999 LETTER TO THE STAFF, WHICH I BELIEVE THE 22 BOARD MEMBERS -- 23 CHAIRMAN LLOYD: STAFF, COMMENTS ON THAT, AND I 24 HOPE MR. BEDWELL WILL ADDRESS THAT ISSUE, ALSO. 25 MR. TOLLSTRUP: YES, SIR. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 WE ALSO RECEIVED THE SCONOX DATA QUITE SOMETIME 2 AGO, AND IT WAS TWO PARTS, BASICALLY BY SIX MONTHS, AND THERE 3 WERE SOME PROBLEMS AND ADDITIONAL INFORMATION WAS SUBMITTED 4 AFTER THAT POINT IN TIME. 5 WE BASICALLY REVIEWED THE INFORMATION, AND WORKING 6 WITH THE SOUTH COAST, WE WERE ABLE TO EXPLAIN AWAY A NUMBER 7 OR MOST OF THE, I AM SUGGESTING ALL OF THE EXCURSIONS AND DID 8 NOT ATTRIBUTE TO THE CATALYST BUT AS YOU CAN SEE THERE IS 9 SOME OTHER MALFUNCTION OF THE SYSTEM BASED ON BEING ABLE TO 10 EXCUSE THOSE. 11 THAT IS PRETTY MUCH HOW WE DID OUR EVALUATION AND 12 CERTIFIED THE LETTER IN 2 TO 3 HOURS, AND WE WERE ABLE TO 13 LOOK AND EXPLAIN AWAY THOSE EXCURSIONS. 14 CHAIRMAN LLOYD: YOU SAY YOU WERE ABLE TO EXPLAIN 15 AWAY 44 POTENTIAL VIOLATIONS. 16 MR. TOLLSTRUP: THERE WERE QUITE A FEW EXCURSIONS, 17 AND I DON'T REMEMBER THE EXACT NUMBER, BUT WE DID LOOK 18 CLOSELY AT THOSE EXCURSIONS AND WERE ABLE TO EXPLAIN THEM 19 AWAY AND THEN EXPLAINED IN MY MIND IT WAS NOT DUE TO CATALYST 20 ITSELF. 21 CHAIRMAN LLOYD: SO, DO I READ INTO THAT ALSO THAT 22 NOW WE ARE GOING TO EXTRAPOLATE THAT OR SCALE UP BY SAY A 23 FACTOR OF 10, I HAVE SOME MORE CONCERNS ABOUT POTENTIAL 24 VIOLATIONS THAT YOU MAY NOT BE ABLE TO EXPLAIN AWAY, OR AM I 25 PUTTING WORDS INTO YOUR MOUTH? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 MR. TOLLSTRUP: WELL, I THINK THERE ARE A NUMBER OF 2 CONCERNS IN SCALING UP THE TECHNOLOGIES TO THESE LOGIC TERMS. 3 WE CERTAINLY ARE CONCERNED. THE LEVELS THAT WE 4 HAVE SET, WE THINK, ARE ACHIEVABLE LEVELS AND WILL ACHIEVABLE 5 ON AN ONGOING BASIS. 6 AS TO WHETHER THERE WILL BE ADDITIONAL EXCURSIONS 7 SCALING UP, WE DEFINITELY HAVE SOME CONCERNS THERE. 8 CHAIRMAN LLOYD: IS IT TYPICAL THAT ON A NEW 9 TECHNOLOGY THE WAY YOU GET SOME VIOLATIONS THERE OR A CLIENT 10 GETS VIOLATIONS THAT YOU ARE LOOKING AT GREAT DETAIL TO SEE 11 IF YOU CAN EXPLAIN AWAY THOSE, OR IS THIS STEMMING FROM THE 12 FACT THAT THE SOUTH COAST GETS EXPLAINED AWAY AS A 13 DEMONSTRATION TECHNOLOGY? 14 MR. TOLLSTRUP: YEAH. I THINK THAT AT ANY TIME THE 15 DISTRICT LOOKS AT CONTINUING USE DATA, BEFORE WE TAKE ANY 16 ACTION AT ALL, WE LOOK AT THE SPIKES, AND SEE WHAT WAS IN IT, 17 WHAT WAS IT THAT IT ATTRIBUTED TO AND ACCOUNTED FOR AND THERE 18 IS TYPICAL VIOLATION. 19 CHAIRMAN LLOYD: ARE SPIKES MORE DIFFICULT WHEN YOU 20 ARE LOOKING AT THE VERY LOW NUMBERS? 21 MR. TOLLSTRUP: I THINK YOU WOULD BE GETTING DOWN 22 TO THESE LEVELS, I THINK BASICALLY THIS IS SPECULATION ON MY 23 PART, BASICALLY WE WOULD SEE THE MORE EXCURSION, YES, AND WE 24 ARE GETTING THE TECHNOLOGY DOWN TO THE LOWER LIMIT, AND 25 THEREFORE, THE MINOR UPSETS AT THESE LOW, LOW LEVELS ARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 GOING TO GO UP ABOVE THE ONES THAT ARE SET, THERE IS MORE 2 HIGHER LEVELS, THERE IS LESS FLEXIBILITY HERE, 1, 2 AND 3 PPM 3 RANGE. 4 CHAIRMAN LLOYD: THANK YOU. 5 YES. MR. RUBENSTEIN. 6 MR. RUBENSTEIN: MR. CHAIRMAN, ACTUALLY I SPENT 7 QUITE A BIT OF TIME LOOKING AT THE ISSUE OF EXCURSION OF 8 THESE TYPES OF TECHNOLOGIES, NOT JUST SCONOX BUT SCR SYSTEMS 9 AS WELL. 10 THE SUGGESTION OF MOST OF THE EXCURSIONS WERE NOT 11 RELATED TO THE CATALYST ISN'T REALLY THE POINT, BECAUSE THE 12 LIMIT ISN'T 2.5 PPM AND WILL EXCUSE EXCURSIONS THAT ARE 13 RELATED TO OTHER THINGS ITS 2.5 PPM A PERIOD. 14 IN A SPECIFIC CASE AND I AM FAMILIAR ONE OF THE 15 THEM THE REAL FOUR RUNNERS OF THIS TYPE OF TECHNOLOGY THAT WE 16 ARE LOOKING AT THE ULTRA LOW TECHNOLOGY IS THE SMUD-SPA 17 CAMPBELL SOUP PROJECT IN SACRAMENTO. 18 THAT IS BY THE STANDARDS WE ARE TALKING ABOUT TODAY 19 IS SMALLER UNIT, IT IS ROUGHLY 102 MEGAWATTS IN SIZE, AND IT 20 USES AN ADVANCED DRY LOW NOX COMBUSTION SYSTEM WHICH HAS NOX 21 LEVELS COMING OUT OF THE TURBINE AT UNDERLINED PPM AND USES 22 SELECTIVE CATALYTIC REDUCTION TO MEET A 3 HOUR AVERAGE NOX 23 PPM. 24 SO, WE ARE IN THE SAME BALL PARK THAT WE ARE 25 TALKING ABOUT TODAY. THAT TECHNOLOGY HAD THREE OR FOUR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 EXCURSIONS IN THE FIRST SIX MONTHS, AND IT WAS REALLY IN 2 CALIFORNIA, IT WAS ONE OF A KIND, BECAUSE IT WAS A FIRST OF 3 ITS KIND. 4 AND THAT LEVEL OF EXCURSION THREE OR FOUR IN SIX 5 MONTHS WAS ENOUGH TO RAISE THE ATTENTION OF LOCAL AIR 6 DISTRICT ENFORCEMENT CENTER AND AFFORD A NEW TECHNOLOGY AND 7 SO WITH THE IDEA THAT YOU COULD START OFF WITH A TECHNOLOGY 8 THAT HAS AT THE PRESENT TIME PERHAPS EXCURSION LEVELS TWO OR 9 FIVE OT TEN LIKE THAT IS SIMPLY NOT COMPETITIVE FOR MORE 10 LIABILITY RESPECT. 11 AND ANY EXCURSIONS OF THAT MAY HAVE NOTHING TO DO 12 WITH CATALYST EITHER. THEY HAD TO DO WITH A PLETHORA OF 13 THINGS THAT AFFECT NOX ISSUES. 14 CHAIRMAN LLOYD: ANY OTHER QUESTIONS OF THE BOARD? 15 THANK YOU VERY MUCH. I HOPE MR. ALLEN BEDWELL IS 16 BACK. 17 MR. BEDWELL: GOOD MORNING. MY NAME IS ALLAN 18 BEDWELL. 19 I WOULD LIKE TO APOLOGIZE FIRST OF ALL FOR BEING 20 LATE. THE BOARD'S TIME IS VERY IMPORTANT AND CERTAINLY THIS 21 ISSUE IN TERMS OF POWER PLANT EMISSIONS IS EQUALLY AS 22 IMPORTANT. 23 KEEPING IN MIND THAT THE THOUGHTS SHARED BY 24 SPEAKERS, I WILL LIMIT MY AMMONIA EMISSIONS AS WELL AS MY 25 EMISSIONS OF HOT AIR. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 AS I MENTIONED, GOAL LINE ENVIRONMENTAL TECHNOLOGY 2 IS A PRODUCER OF ADDITIONAL CATALYST ESSENTIALLY BEING MADE, 3 MANUFACTURE CATALYST FOR THE CONTROL AIR POLLUTION FROM POWER 4 PLANTS, INTERNAL COMBUSTION ENGINES, DIESEL ENGINES, AND ALSO 5 INDUSTRIAL SOURCES FOR VOC EMISSION CONTROL. 6 GOAL LINE HAS TAKEN A VERY CLOSE LOOK AT GUIDANCE 7 THAT HAS BEEN DEVELOPED BY THE CARB STAFF. 8 JUST BY WAY OF STARTING OUT, WHAT I AM ABOUT TO SAY 9 I THINK THAT THE JOB THE CARB STAFF DID IN POWER PLANT 10 EMISSIONS BOTH DEMONSTRATED PERMITTED AROUND THE COUNTRY IS A 11 GOOD FIRST STEP. 12 I IMAGINE THE LIGHTS WERE ON VERY LATE AT NIGHT ON 13 2020 L STREET THANKS THERE TO THE WORK, UNDER A VERY RAPID 14 AND AGGRESSIVE TIME FRAME. 15 OVERALL WE ARE VERY PLEASED THAT CARB IS MOVING TO 16 ESTABLISH UNIFORM STANDARDS FOR POWER PLANT SITING HERE IN 17 CALIFORNIA, BECAUSE IT'S A GOOD FIRST STEP TO TRY AND GET 18 TOWARDS ATTAINMENT FOR THE STATE. 19 GOAL LINE SHARES THE BOARD'S INTEREST IN 20 MAINTAINING ITS WORLDWIDE LEADERSHIP AS THE PREEMINENT 21 CONTROLLER AND PRODUCER OF EMISSIONS TO ALL SORTS OF 22 COMBUSTION SOURCES. 23 IN THE LAST 10 YEARS CARB HAS BEEN VIEWED AS A 24 LEADER AROUND THE COUNTRY AND FRANKLY AROUND THE WORLD AT 25 SETTING LOW EMISSIONS THAT PROTECT THE HUMAN HEALTH PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 ENVIRONMENT AND WORKERS ASSOCIATED WITH THIS OPERATION THAT 2 ARE MANY RESOURCES. 3 HOWEVER I MUST SAY THAT GOAL LINE IS VERY CONCERNED 4 THAT CARB'S PROPOSED EMISSION STANDARDS FALL SIGNIFICANTLY 5 SHORT OF WHAT CURRENT TECHNOLOGY CAN DO AND IS DOING TO 6 MINIMIZE POWER PLANT POLLUTION NOT ONLY HERE IN CALIFORNIA 7 BUT AROUND THE COUNTRY. 8 IN ADDITION WE BELIEVE THAT CARB'S PROPOSED 9 STANDARDS LAG BEHIND POLLUTION STANDARDS IN TWO OTHER STATES 10 FOR THE CONTROL OF AMMONIA AND FOUR OTHER STATES FOR THE 11 CONTROL OF NOX. 12 AFTER A DECADE OF SETTING VERY AGGRESSIVE FIRST UN 13 THE NATION STANDARDS SUCH AS ZERO EMISSION VEHICLES CARB'S 14 PROPOSED POWER PLANT STANDARDS ARE DISAPPOINTING IN THEIR 15 LACK OF STRINGENCY. 16 IN THE PAST OTHER STATES HAVE LOOKED TO CALIFORNIA 17 FOR GUIDANCE ON ESTABLISHING AGGRESSIVE CLEAN AIR STANDARDS. 18 WE THINK THIS OUGHT TO CONTINUE. 19 WHAT IS MOST DISTURBING IS THAT CARB IS PROPOSING 20 STANDARDS FOR THREE POLLUTANTS AT LEVELS HIGHER THAN ITS OWN 21 GUIDANCE DOCUMENT IDENTIFIES AS STATE OF THE ART 22 DEMONSTRATIVE PRACTICE TECHNICALLY FEASIBLE AND COMMERCIALLY 23 AVAILABLE. 24 WITH THE NUMBER OF NEW POWER PLANTS BEING DEVELOPED 25 IN THE STATE, POWER PLANT POLLUTION STANDARDS THAT THE BOARD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 IS CONSIDERING TODAY ARE POLLUTION LEVELS THAT CALIFORNIANS 2 WILL HAVE TO LIVE WITH FOR THE NEXT 30 YEARS. 3 AS PROPOSED, THESE STANDARDS WILL NOT HELP AIR 4 QUALITY MANAGEMENT DISTRICTS TO REACH ATTAINMENT IN OUR 5 ESTIMATION. WE BELIEVE CARB CAN DO BETTER THAN WHAT HAS BEEN 6 PROPOSED IN THE DRAFT GUIDANCE DOCUMENT IN FACT MUCH BETTER. 7 SPECIFICALLY, CARB'S GUIDANCE DOCUMENT IDENTIFIES 8 STANDARDS IN OTHER STATES AND OR TECHNOLOGY PERFORMANCE THAT 9 DEMONSTRATES MORE STRINGENT, LESS POLLUTING EMISSION RATES 10 FOR POWER PLANTS. 11 YET CARB IS NOT ADOPTING THESE STANDARDS. THIS 12 RAISES A NUMBER OF QUESTIONS THE FIRST OF WHICH IS WHY HAS 13 CARB PROPOSED STANDARDS THAT DO NOT REFLECT THESE MORE HEALTH 14 PROTECTIVE POLLUTION LIMITS AND PERFORMANCE? 15 I WOULD LIKE TO TALK ABOUT THOSE THREE POLLUTANTS 16 AND OUR CONCERNS ABOUT THE GUIDANCE DOCUMENT SPECIFICALLY IN 17 TERMS OF INCONSISTENCY OF THESE IDENTIFIED APPROVED DOCUMENT. 18 THESE ARE VERY IMPORTANT POINTS AND SOMEWHAT TECHNICAL WITH A 19 VERY IMPORTANT FROM THE STANDPOINT IN DECISIONS THAT YOU CAN 20 BE MAKING TODAY REGARDS ON WHAT STANDARDS POWER PLANTS NEED 21 TO COMPLY WITH. 22 IT IS VERY IMPORTANT THAT ANY TYPE OF GUIDANCE 23 DOCUMENTS FOR THE AIR DISTRICTS OBVIOUSLY BE AS CLEAR AND 24 STRAIGHTFORWARD AND REFLECTIVE OF THE MOST STRINGENT 25 STANDARDS AROUND THE COUNTRY. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 LET ME START BY TALKING ABOUT AMMONIA, AMMONIA IS 2 IDENTIFIED IN CARB'S GUIDANCE DOCUMENT ON PAGE 24 AND C-8 AS 3 A MAJOR PRECURSOR TO FINE PARTICULATE POLLUTION, PM 10 AND PM 4 2.5, JUST LIKE NOX IS A PRECURSOR TO OZONE. 5 ON THOSE SAME PAGES, CARB ACKNOWLEDGES THAT 6 CALIFORNIA IS NOT CURRENTLY IN ATTAINMENT FOR PM 10 AND 7 EXPECTED PM 2.5 STANDARDS. ON THE WEST COAST, ACCORDING TO A 8 NUMBER OF STUDIES AMMONIA NITRATE, FORMED WHEN NOX AND 9 AMMONIA MIX, IS THE NUMBER ONE FINE PARTICULATE THAT 10 CALIFORNIANS BREATHE. 11 AS CARB IS AWARE, EXPOSURE TO THIS FINE PARTICULATE 12 HAS BEEN DIRECTLY LINKED WITH PREMATURE DEATH BY THE US EPA 13 AND RESULTED IN THE FEDERAL AGENCY PROMULGATING 1997 NATIONAL 14 AMBIENT AIR QUALITY STANDARDS DESIGNED TO LIMIT AND REDUCE 15 EMISSIONS OF HEALTH THREATENING FINE PARTICULATES SUCH AS 16 AMMONIA NITRATE. 17 CARB HAS ACKNOWLEDGED THIS HEALTH THREAT ON PAGE 24 18 BY SAYING "GIVEN THE POTENTIAL FOR HEALTH IMPACTS AND 19 INCREASES IN PM 10 AND PM 2.5, DISTRICTS SHOULD ENSURE THAT 20 AMMONIA EMISSIONS ARE MINIMIZED FROM PROJECTS USING SELECTIVE 21 CATALYTIC REDUCTION THAT WE BREATHE." 22 YET, CARB IS ONLY PROPOSING AN EMISSIONS RATE OF 5 23 PPM FOR EMISSIONS OF AMMONIA FROM CALIFORNIA POWER PLANTS. 24 THIS IS VERY DISTURBING SINCE CARB ACKNOWLEDGES IN THIS 25 GUIDANCE DOCUMENT ON PAGE 24 THE STATES OF MASSACHUSETTS AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 RHODE ISLAND HAVE ESTABLISHED BACT LIMITS OF 2 PPM AMMONIA 2 SLIP FOR POWER PLANTS. 3 IN FACT, MASSACHUSETTS RECENTLY PERMITTED TWO 580 4 MEGAWATT PLANTS AT 2 PPM AMMONIA SLIP. 5 AGAIN, CARB ACKNOWLEDGES THESE STATE STANDARDS ON 6 PAGE 24 AND C -17 OF THE GUIDANCE. CERTAINLY CARB SHOULD AT 7 LEAST MATCH THOSE STANDARDS OF THESE OTHER STATES. AND AGAIN 8 WE WONDER WHY CARB ISN'T ESTABLISHING A SIMILAR 2 PPM AMMONIA 9 SLIP STANDARD WHEN IT HAS EVIDENCE THAT IT HAS BEEN 10 ESTABLISHED IN OTHER STATES. 11 WE ARE CURIOUS HOW CARB ASSES THE RESULTING HEALTH 12 IMPACTS, INCLUDING EARLY DEATHS, RESULTING FROM ADDITIONAL 13 FINE PARTICULATE POLLUTION SECONDARILY GENERATED BY 5 PPM 14 AMMONIA SLIP? WE FEEL THIS NEEDS FURTHER REVIEW BY THE 15 BOARD. 16 ON PAGES 24 AND C-8, THE CARB GUIDANCE ALSO STATES 17 I QUOTE AGAIN HERE "LEVELS AS LOW AS 2 PPMVD AT 15 PERCENT 18 OXYGEN HAVE BEEN PROPOSED AND GUARANTEED BY CONTROL VENDORS." 19 AGAIN, IF THE POLLUTION CONTROL INDUSTRY IS ON THE 20 RECORD GUARANTEEING A 2 PPM LEVEL, WHY ISN'T CARB 21 ESTABLISHING A 2 PPM AMMONIA SLIP LIMIT? THE BOARD NEEDS TO 22 LOOK INTO THIS AS WELL. 23 WE NOTE THAT IN APPENDIX D OF THE CARB DOCUMENT MAY 24 HAVE BEEN MISINTERPRETED SOME OF THE DOCUMENTATIONS PROVIDED 25 BY SCR VENDORS AS SAYING THAT THE LOWEST THEY CAN GO IS 5 PPM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 AMMONIA. 2 IN REALITY, THE 5 PPM AMMONIA SLIP RATE WAS THE 3 AMMONIA SLIP RATE REQUESTED OF SCR VENDORS BY THE AUTHOR DR. 4 PHYLLIS FOX OF CURE THE INDIVIDUAL TO WHOM THE VENDOR 5 GUARANTEES ARE ADDRESSED. 6 AS A FURTHER CONFIRMATION OF SCR'S ABILITY TO MEET 7 THE 2 PPM STANDARD IN OTHER STATES, GOAL LINE HAS ATTACHED TO 8 THIS TESTIMONY WHICH MEMBERS OF THE BOARD HAVE TWO SCR VENDOR 9 GUARANTEES FOR 2 PPM AMMONIA SLIP. 10 THE ENVIRONMENTAL CONSEQUENCES OF RELAXED 5 PPM 11 AMMONIA POLLUTION STANDARDS ARE ALARMING. HIGHLY 12 CONSERVATIVE CALCULATIONS REVEAL THAT IF ONLY 17 OF THE 35 13 PROPOSED POWER PLANTS ARE BUILT IN CALIFORNIA WITH 5 PPM 14 AMMONIA SLIP. 15 THAT STANDARD HAS THE POTENTIAL TO RESULT IN OVER 16 1,692 TONS OF AMMONIA POLLUTION PER YEAR FOR THE NEXT 30 17 YEARS BEING EMITTED BY THESE PLANTS INTO THE AIR THAT 18 CALIFORNIANS BREATHE. 19 IF CARB WERE TO ADOPT THE 2 PPM AMMONIA STANDARD 20 ALREADY ESTABLISHED BY TWO OTHER STATES AND AS WELL 21 GUARANTEED BY POLLUTION CONTROL VENDORS, POTENTIAL AMMONIA 22 POLLUTION SHOULD BE CUT TO JUST 677 TONS PER YEAR. 23 A 2 PPM AMMONIA SLIP RATE MEANS THE POTENTIAL FOR 24 1,000 TONS LESS AMMONIA PER YEAR GOING INTO CALIFORNIA'S 25 ATMOSPHERE AND FORMING DANGEROUS FINE PARTICULATES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 THE IMPACT OF CARB'S PROPOSED ACTION ON THE HEALTH 2 OF CALIFORNIA RESIDENTS COULD BE SIGNIFICANT. THE BOARD 3 NEEDS TO ASK CARB STAFF TO ANALYZE THIS IMPACT AND INCLUDE 4 THE ANALYSIS IN A REVISED GUIDANCE DOCUMENT. 5 THIS INCONSISTENCY IN AMMONIA STANDARDS BETWEEN 6 STATES RAISES A NUMBER OF QUESTIONS. HAS CARB CONDUCTED AN 7 ANALYSIS SIMILAR TO THAT OF GOAL LINE'S WHICH IDENTIFIES THE 8 TOTAL TONS PER YEAR OF AMMONIA LOADING FROM THE 35 POWER 9 PLANTS PROPOSED FOR CONSTRUCTION AT 5 PPM VERSUS A 2 PPM 10 AMMONIA SLIP RATE? 11 HOW WILL CARB MEET HEALTH BASED STANDARDS FOR PM 10 12 AND PM 2.5 EMISSION REDUCTIONS WITH A 5 PPM STANDARD WHEN A 2 13 PPM STANDARD WILL GET THE STATE THAT MUCH CLOSER TO 14 ATTAINMENT? 15 WHICH OTHER INDUSTRIES WILL CARB REQUIRE ADDITIONAL 16 REDUCTIONS FROM? THE AGRICULTURAL INDUSTRY? SMALL BUSINESS? 17 THESE ARE COST EFFECTIVE REDUCTIONS THE POWER INDUSTRY CAN 18 TAKE NOW, AS PART OF ITS FAIR SHARE IN HELPING CALIFORNIA 19 MEET FEDERAL CLEAN AIR STANDARDS, REDUCE AIR TOXICS AND MAKE 20 THE AIR SAFER FOR CALIFORNIANS TO BREATHE. CARB NEEDS TO 21 ASSESS THE TRADE OFFS AND INCLUDE THAT IN A REVISED GUIDANCE 22 DOCUMENT. 23 NEXT I WOULD LIKE TO BRIEFLY TALK ABOUT NOX 24 EMISSION. CARB IS PROPOSING A 2.5 PPM NOX EMISSIONS RATE 25 AVERAGED OVER ONE HOUR. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 ON PAGE 22 OF CARB'S DRAFT GUIDANCE DOCUMENT, CARB 2 IDENTIFIES TWO 580 MEGAWATTS POWER PLANTS IN MASSACHUSETTS 3 THAT HAVE BEEN PERMITTED AT 2 PPM NOX AVERAGED OVER ONE HOUR. 4 IN ADDITION, THE STATE OF CONNECTICUT ISSUED A 5 PERMIT IN MARCH FOR A 740 MEGAWATT PLANT AT 2 PPM NOX 6 AVERAGED OVER ONE HOUR. 7 IN MAY, THE STATE OF NEW HAMPSHIRE ISSUED TWO 8 PERMITS FOR TWO POWER PLANTS, THE 525 MEGAWATT NEWINGTON 9 PLANT AND THE 740 MEGAWATT LONDONDERRY PLANT, BOTH AT 2 PPM 10 NOX AVERAGED OVER ONE HOUR. RHODE ISLAND HAS INFORMED POWER 11 PLANT APPLICANTS THAT THEIR NOX STANDARD IS 2 PPM ON A ONE 12 HOUR BASIS. 13 AGAIN LOOKING AT THE POTENTIAL LOAD OF NOX IN THE 14 ATMOSPHERE OUR CALCULATIONS SHOW AGAIN THAT IF 17 OF THE 35 15 PROPOSED POWER PLANTS ARE BUILT WITH THE PROPOSED NOX LIMITS 16 OF 2.5 PPM, THAT LIMIT HAS THE POTENTIAL TO RESULT IN OVER 17 2,289 TONS OF NOX POLLUTION BEING EMITTED PER YEAR FOR THE 18 NEXT 30 YEARS. 19 IF CARB WERE TO ADOPT THE 2 PPM NOX EMISSIONS 20 STANDARD ALREADY ESTABLISHED BY THESE OTHER STATES IN NEW 21 ENGLAND, NOX POLLUTION WILL BE CUT TO A POTENTIAL OF 1,831 22 TONS PER YEAR. 23 THUS A 2 PPM NOX EMISSIONS RATE MEANS 458 TONS LESS 24 NOX GOING INTO THE ATMOSPHERE TO FORM OZONE. 25 THIS STILL RAISES ADDITIONAL QUESTIONS ABOUT THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 GUIDANCE THAT WE FEEL THAT CARB SHOULD ANSWER. FIRST WHAT 2 ARE THE ATTAINMENT IMPLICATIONS OF A 450 TON NOX REDUCTION 3 FOR CALIFORNIA? 4 ACCORDING TO THE US PUBLIC INTEREST RESEARCH GROUP, 5 450 TONS OF NOX FROM POWER PLANTS EQUALS THE ANNUAL EMISSIONS 6 OF AT LEAST 20,000 CARS ON THE ROAD WHICH WOULD BE HIGHER 7 HERE IN CALIFORNIA BECAUSE CALIFORNIA HAS HIGHER AND MORE 8 STRINGENT STANDARDS FOR EMISSIONS WITH CARB THAT IS THE US 9 AVERAGE. 10 CERTAINLY AVOIDING THE ANNUAL EMISSIONS OF OVER 450 11 TONS OF NOX WOULD BENEFIT REACHING ATTAINMENT STATUS AS WELL 12 AS PROVIDING FOR ECONOMIC GROWTH IN OTHER SEGMENTS OF THE 13 CALIFORNIA ECONOMY NOT TO MENTION IMPROVED PUBLIC HEALTH. 14 IN ADDITION A 450 TON REDUCTION IN NOX MEANS POWER 15 DEVELOPERS WILL BE ABLE TO AVOID BEING FORCED TO PURCHASE 16 MORE OF THE EXTREMELY EXPENSIVE AND IN SOME CASES COMPLETELY 17 NONEXISTENT OFFSETS TO COVER THEIR EMISSIONS AT A HIGHER NOX 18 RATE. 19 THIS UNNECESSARILY HIGH NOX RATE RAISES A NUMBER OF 20 QUESTIONS. WHY IS CARB ACKNOWLEDGING THAT PERMITS HAVE BEEN 21 ISSUED BY OTHER STATES AT 2 PPM NOX AVERAGED OVER ONE HOUR, 22 BUT DECLINING TO ESTABLISH THAT SAME STANDARD ITSELF? HOW 23 DOES CARB JUSTIFY THE HEALTH IMPACTS AND ECONOMIC IMPACTS OF 24 A HIGHER NOX POLLUTION RATE? 25 IF, BY CHANCE, CARB'S AND THIS IS BASED OFF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 DISCUSSIONS WITH CARB'S STAFF, CARB PROPOSED 2.5 PPM NOX 2 STANDARD IS SOMEHOW RELATED TO START-UP AND SHUT DOWN 3 EMISSIONS, THERE IS NO DISCUSSION OF THIS FACT ANYWHERE IN 4 THE GUIDANCE DOCUMENT OF THAT I COULD FIND. 5 WHILE GOAL LINE IS FULLY SUPPORTIVE OF STRICT START 6 UP AND SHUT DOWN EMISSION LIMITS, THERE NEEDS TO BE AN 7 EXPLICIT START UP AND SHUT DOWN LIMIT ESTABLISHED BY CARB 8 WITH THE RATIONALE FOR THE PROPOSED EMISSIONS LIMITS AND IT 9 NEEDS TO BE PUBLICLY REVIEWED AS WELL. 10 OTHERWISE A 2.5 PPM NOX EMISSIONS LIMIT WITH NO 11 CONDITIONS RELATED TO START UP AND SHUT DOWN WILL LIKELY BE 12 INTERPRETED BY AIR DISTRICTS AS JUST THAT NO START UP OR SHUT 13 DOWN CONDITIONS AT ALL IT IS JUST A STRAIGHT OPERATIONAL 14 STANDARD. 15 HOW DOES CARB EXPECT TO INSTITUTE A START UP AND 16 SHUT DOWN STANDARD THAT DISTRICTS WILL FOLLOW WITHOUT ANY 17 GUIDANCE TO THAT EFFECT? IF CARB DOES INTEND FOR THERE TO BE 18 A START UP SHUT DOWN STANDARD, THEN CARB SHOULD STATE EXACTLY 19 THAT IN A REVISED GUIDANCE DOCUMENT FOR PUBLIC REVIEW. 20 JUST LIKE AMMONIA, THESE INCONSISTENCIES NEED TO BE 21 REVIEWED AND RESOLVED BY THE BOARD BEFORE FINAL GUIDANCE IS 22 ESTABLISHED BY CARB. 23 FINALLY I WOULD LIKE TO TALK ABOUT CARBON MONOXIDE 24 EMISSIONS. CARB IS PROPOSING A 6 PPM EMISSIONS RATE FOR POWER 25 PLANTS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 THIS EMISSIONS RATE DIRECTLY CONTRADICTS CARB'S OWN 2 GUIDANCE DOCUMENT SURVEY WHICH DOCUMENTS SIGNIFICANTLY LOWER 3 RATES OF .06 PPM TO .02 PPM CO DEMONSTRATED IN PRACTICE OVER 4 2 TO 3 YEARS AT FOUR POWER PLANTS PROFILED ON PAGE 27 OF THE 5 GUIDANCE DOCUMENT. 6 ON PAGES C-25 AND C-26, CARB IDENTIFIES CO EMISSION 7 SOURCE TEST RESULTS FOR SEVERAL MORE PLANTS IN ADDITION TO 8 THE PLANTS IDENTIFIED ABOVE. AGAIN CARB VERIFIES THAT THE CO 9 EMISSION RATES ARE BETWEEN .1 AND 2.02 PPM USING OXIDATION 10 CATALYSTS. 11 HERE AGAIN, THESE INCONSISTENCIES IN THE GUIDANCE 12 DOCUMENT RAISE THE FOLLOWING QUESTIONS. WHY IS CARB 13 ACKNOWLEDGING VERIFIED CO EMISSION RATES AT OR BELOW 2 PPM , 14 YET DECLINING TO ESTABLISH THAT STANDARD FOR FUTURE POWER 15 PLANTS? WHAT IS THE ADVANTAGE OF A HIGH CO EMISSIONS RATE 16 AND TO WHOM? 17 CARB HAS MANY DISTRICTS THAT ARE IN THE ATTAINMENT 18 FOR CO. IF INSTITUTED COULD THIS 6 PPM STANDARD THREATEN 19 THAT ATTAINMENT? AGAIN, WHAT ARE THE ADDITIONAL HEALTH 20 IMPACTS POSED BY A 6 PPM CO EMISSIONS RATE COMPARED TO A 2 21 PPM LIMIT? 22 AGAIN THESE INCONSISTENCIES NEED TO BE FURTHER 23 REVIEWED AND RESOLVED PRIOR TO CARB ESTABLISHING FINAL 24 GUIDANCE FOR THE AIR DISTRICTS. 25 FINALLY, EVEN IF THE STACK CONCENTRATIONS ARE LOWER PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 THEN AMBIENT CONCENTRATIONS THAT IS GOOD NEWS THAT IS 2 CLEANING THE AIR AND CERTAINLY GOAL LINE SUPPORTS STACK 3 EMISSIONS THAT ARE MUCH LOWER THAN AMBIENT EMISSIONS, THAT IS 4 HOW WE ARE GOING TO ATTAINMENT, AND THIS ALSO HOW WE ARE 5 GOING TO GO BEYOND ATTAINMENT. 6 I ALSO WANT TO BRIEFLY TOUCH ON THE ISSUE OF 7 EMISSION CONTROL ECONOMICS RAISED IN THE CARB GUIDANCE 8 DOCUMENT. 9 THE GUIDANCE DOCUMENT, AND SUBSEQUENT 10 CORRESPONDENCE BETWEEN GOAL LINE AND CARB SEEMS TO IMPLY THAT 11 MORE STRINGENT AMMONIA SLIP AND NOX EMISSION STANDARDS MAY BE 12 ECONOMICALLY INFEASIBLE FOR TRADITIONAL SELECTIVE CATALYTIC 13 REDUCTION SYSTEMS. 14 THAT ASSUMPTION NEEDS TO BE BOTH CLOSELY AND 15 OBJECTIVELY ANALYZED BY CARB THROUGH CONSULTATION WITH POWER 16 PLANT OPERATORS WHO HAVE MADE RECENT PURCHASES AND 17 INSTALLATION OF SCR CATALYST NOT SCR VENDORS. 18 I THINK IT IS IMPORTANT YOU GO DIRECTLY TO THE 19 USERS OF THIS TECHNOLOGY TO VERIFY THE PERFORMANCE AND COST 20 VERSUS SPEAKING AND ONLY CONSULTING WITH VENDORS. 21 CARB SHOULD CONTACT POWER PLANT OPERATORS WHO HAVE 22 DEMONSTRATED AMMONIA SLIP LEVELS AT 2 PPM OR BELOW AND ASK 23 THEM THE FOLLOWING QUESTIONS: ONE, WHAT IS THE ANNUAL OR 24 BIENNIAL CATALYST REPLACEMENT COST EXCLUDING DOWN TIME? 25 TWO, WHAT HAS THE EMISSIONS PERFORMANCE BEEN WITH PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 ANNUAL OR BIENNIAL REPLACEMENT? 2 THREE, HOW MUCH TIME HAS IT TAKEN TO REPLACE 3 CATALYST REPLACEMENT ON A MERCHANT OPERATION? 4 FOUR, HOW EASY WOULD IT BE TO DESIGN A SYSTEM THAT 5 ALLOWS CATALYST REPLACEMENT DURING OPERATION THAT IS SIMILAR 6 TO CURRENT CATALYST REPLACEMENT DESIGNS FOR COMPETING 7 EMISSION CONTROL SYSTEMS SUCH AS SCONOX? 8 FIVE, WHAT IS THE DOCUMENTED COST EFFECTIVENESS, ON 9 A DOLLAR PER TON BACT BASIS, OF ANNUAL OR BIENNIAL CATALYST 10 REPLACEMENT BY USERS OF SCR? 11 SIX, WHAT WOULD THE APPEARS TO SUPPORT SCR TO THE 12 EXCLUSION OF OTHER EMISSION CONTROL TECHNOLOGIES? 13 SEVEN, WHY IS CARB ASSERTING A POSITION THAT 14 APPEARS TO SUPPORT SCR TO THE EXCLUSION OF THE EMISSION 15 CONTROL TECHNOLOGIES? 16 THESE ARE CRITICAL QUESTIONS FOR CARB TO 17 QUANTITATIVELY ASSESS AND ANSWER BEFORE ESTABLISHING 18 STANDARDS THAT INFER COST EFFECTIVENESS. 19 IT IS IMPORTANT TO NOTE JUST HOW MUCH FURTHER CARB 20 COULD GO ON POLLUTION CONTROL AND JUST HOW REASONABLE GOAL 21 LINE'S POSITION IS. GOAL LINE DEVELOPER PATENT HOLDER AND 22 PROPRIETARY OWNER OF SCONOX THAT IS THAT REVOLUTIONARY 23 CONTROL TECHNOLOGY THAT EVERYBODY IS SO CONCERN ABOUT THAT 24 HAS NOW TWICE DRIVEN FEDERAL AIR STANDARDS FOR NOX FOR POWER 25 PLANTS FROM 9 PPM TO 2 PPM IN JUST TWO YEARS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 THE TECHNOLOGY IS PROVEN IT HAS BEEN RESPONSIBLE 2 FOR SAY POWER PLANT STANDARDS ACROSS THE COUNTRY AND HAS BEEN 3 VERIFIED BY A NUMBER OF REGULATORY AGENCIES. 4 IN LOS ANGELES SCONOX HAS BEEN OPERATING ON THE 5 FEDERAL CO-GENERATION FACILITY PLAN FOR TWO AND A HALF YEARS. 6 SINCE APRIL 1 AFTER SLIGHTLY INCREASING CATALYST VOLUME, 7 SCONOX HAS CONSISTENTLY DEMONSTRATED NEAR ZERO EMISSION RATES 8 OF .8 PPM NOX .5 PPM CO AND ZERO AMMONIA ON A 15 MINUTE 9 ROLLING AVERAGE. 10 LET ME SAY THAT AGAIN, .8 PPM FOR NOX, .5 PPM FOR 11 CO AND ZERO AMMONIA. AGAIN THE NOX AND CO RATES ARE VERIFIED 12 BY CEMS DATA THAT ITSELF IN TERMS OF SENSE OF EQUIPMENT HAVE 13 BEEN VERIFIED THREE DIFFERENT WAYS AND THIS AGAIN HAS BEEN 14 DEMONSTRATED ON A 15 MINUTE AVERAGE. 15 SCONOX'S NEAR ZERO EMISSIONS PERFORMANCE ON NOX AND 16 CO IS INHERENT IN THE DESIGN OF THE TECHNOLOGY, AND AS I SAID 17 BEFORE, WE DO NOT USE AMMONIA. 18 WHILE WE HAVE NOT DONE SIX MONTHS OF OPERATION 19 DEMONSTRATING OF .8 PPM THE NOX EMISSIONS RATE WE WILL BE 20 SOON IN A POSITION TO DEMONSTRATE THAT. 21 WE ARE CONFIDENT THAT A BACT DETERMINATION AT OR 22 BELOW 1 PPM FOR NOX 1 PPM FOR CO AND ZERO PPM FOR AMMONIA 23 WILL BE CALLED FOR IN HE NEXT FEW MONTHS ON THE BASIS OF 24 SCONOX PERFORMANCE. 25 IN CLOSING IT IS APPARENT THAT THEE ARE A NUMBER OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 INCONSISTENCIES IN CARB'S GUIDANCE DOCUMENT AND I THINK I 2 HAVE BEEN VERY THOROUGH AT POINTING THESE OUT AND THE REASON 3 I HAVE BEEN VERY THOROUGH IS I THINK THESE ARE IMPORTANT 4 POINTS THAT THE BOARD NEEDS TO REALIZE TO RESOLVE BEFORE YOU 5 CAN MAKE AN ADEQUATELY INFORMED DECISIONS ON THESE STANDARDS. 6 SIMPLY PUT, THERE ARE A NUMBER OF QUESTIONS THAT 7 NEED ANSWERS BEFORE YOU CAN MAKE A DECISION. THESE ARE 8 IMPORTANT QUESTIONS THAT DESERVE MORE TIME TO ANSWER BEYOND 9 ONLY THIS HEARING. 10 WE THEREFORE URGE CARB TO DELAY ITS VERY IMPORTANT 11 AND FINAL DECISION ON ANY PROPOSED STANDARDS UNTIL FURTHER 12 ANALYSIS IS DONE. THE QUESTIONS THAT I HAVE RAISED TODAY 13 NEED TO BE ANSWERED IN A REVISED GUIDANCE DOCUMENT RELEASED 14 FOR PUBLIC REVIEW. 15 IN ORDER TO HELP LAUNCH FURTHER REVIEW OF THESE 16 STANDARDS AND TO ASSIST CARB IN SETTING THE MOST EFFECTIVE 17 POLLUTION LEVELS POSSIBLE, GOAL LINE HAS THE FOLLOWING 18 PROPOSAL. 19 AGAIN IN THE INTEREST OF FAIR PLAY AND CREATING A 20 LEVEL FIELD FOR COMPETITION BETWEEN POLLUTION CONTROL VENDORS 21 AND REGULATORY CERTAINTY FOR POWER DEVELOPER, GOAL LINE WOULD 22 SUPPORT REVISED CARB GUIDANCE THAT WOULD ENUNCIATE A TWO, 23 TWO, AND TWO, GUIDELINE FOR AMMONIA, NOX AND CO AT THIS TIME. 24 SUCH A GUIDELINE 2 PPM STANDARD IS VERY REASONABLE 25 BASED ON TODAY'S TECHNOLOGY AND ONE THAT CARB GUIDANCE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 DOCUMENT ITSELF REPEATEDLY IDENTIFIES AS THE CURRENT STATE OF 2 THE ART, TECHNICALLY FEASIBLE AND COMMERCIALLY AVAILABLE. 3 SUCH A TWO AND TWO GUIDELINE WOULD END A TEN YEAR 4 MONOPOLY ON POLLUTION CONTROL, FORCE ALL EMISSION CONTROL 5 TECHNOLOGY VENDORS TO BE FAIR AND TRANSPARENT IN THEIR 6 PRICING, OPTIMIZE THEIR SYSTEMS FOR MAXIMUM POLLUTION 7 CONTROL, AND PROVIDE POWER PLANT DEVELOPERS WITH THE FIRST 8 REAL CHOICE IN POLLUTION CONTROL IN 15 YEARS. 9 THIS PERFORMANCE BASED FREE MARKET APPROACH TO 10 POLLUTION CONTROL IS WHAT AGENCIES LIKE CARB HAVE BEEN 11 STRIVING FOR AROUND THE COUNTRY FOR THE LAST DECADE. 12 IN OTHER WORDS, CARB HAS AN OPPORTUNITY HERE TO SET 13 EMISSION STANDARDS THAT ALLOW FULL AND FREE COMPETITION IN 14 THE MARKET PLACE TO DRIVE DOWN THE COSTS AND TO DRIVE DOWN 15 EMISSIONS. THIS A SIGNIFICANT OPPORTUNITY CARB SHOULD NOT 16 PASS UP. IN FACT THIS OPPORTUNITY HAS BEEN TAKEN BY OTHER 17 STATES LIKE MASSACHUSETTS AND RHODE ISLAND. 18 SUCH AN APPROACH SHOULD ALSO BE SUPPORTED BY SCR 19 VENDORS. AFTER ALL A 2 PPM LEVEL FOR AMMONIA AND NOX IS 20 WARRANTED BY THE MANUFACTURERS OF SCR AS DOCUMENTED BY THE 21 TWO SCR VENDOR GUARANTEES WE HAVE SHARED WITH CARB, AS WELL 22 AS THE TWO PLANTS THAT HAVE BEEN PERMITTED IN MASSACHUSETTS 23 AS 2 PPM AMMONIA SLIP AND 2 PPM NOX. 24 CERTAINLY CARB SHOULD ESTABLISH A GUIDELINE AT 25 LEAST AS STRINGENT AS THE WARRANTIES PROVIDED BY EMISSION PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 CONTROL VENDORS. 2 HAS CARB REVIEWED THE 2 PPM AMMONIA SLIP WARRANTIES 3 BY SCR VENDORS? 4 GOAL LINE HAS SHARED A COPY OF ITS WARRANTY WITH 5 CARB STAFF. 6 THE POWER PLANT POLLUTION STANDARDS THAT THE BOARD 7 DECIDES UPON WILL BE POLLUTION STANDARDS FOR THAT 8 CALIFORNIANS WILL LIVE WITH FOR THE NEXT 30 YEARS. WE 9 BELIEVE CARB CAN DO BETTER THAN AND SHOULD DO BETTER. 10 WE WILL BE VERY HAPPY AS A COMPANY TO WORK WITH YOU 11 TO PROVIDE YOU ADDITIONAL INFORMATION IN ORDER TO ACHIEVE 12 STRINGENT STANDARDS AND THE MOST PROTECTIVE HEALTH BASE 13 ENVIRONMENTAL STANDARDS THAT ARE ACHIEVABLE. 14 THANK YOU AGAIN FOR YOUR TIME THIS AFTERNOON AND I 15 AGAIN APOLOGIZE FOR BEING LATE AND I URGE YOU TO MAKE THE 16 RIGHT DECISION AND TAKE MORE TIME TO ESTABLISH STANDARDS THAT 17 ARE JUST AS PROTECTIVE OF PUBLIC HEALTH AS THOSE THAT HAVE 18 MADE BY OTHER REGULATORIES IN OTHER STATES. 19 CHAIRMAN LLOYD: THANK YOU VERY MUCH MR. BEDWELL. 20 BOARD MEMBER CALHOUN: DID YOU ATTEND ANY OF THE 21 STAFF WORKSHOPS. 22 MR. BEDWELL: YES, I DID I ACTUALLY ATTENDED THE 23 LAST ONE IN SACRAMENTO ON JULY 6 AND RAISED A NUMBER OF THESE 24 CONCERNS THEN THAT WAS KIND OF LONG IN THE PROCESS. 25 THEN WE HAD GOAL LINE STAFF ATTENDING THE OTHER PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 WORKSHOPS AND THEY RAISED SOME OF THE SAME CONCERNS. 2 CHAIRMAN LLOYD: MS. EDGERTON. 3 BOARD MEMBER EDGERTON: WELL FIRST OF ALL MR. 4 BEDWELL THANK YOU FOR COMING OUT AND GIVING THAT EXCELLENT 5 PRESENTATION. 6 I WOULD ASSURE YOU AND I'LL ASK MR. KENNY AND 7 ANYONE ELSE THAT MAKES ANY CONFIRMATIONS, THAT THE AIR 8 RESOURCES BOARD FIND THE PRESENTATION THAT YOU HAVE MADE AND 9 THE TECHNOLOGY THE SCONOX TECHNOLOGY TREMENDOUSLY EXCITING 10 OVER OZONE IN POTENTIAL TO HELP US REACH THE CLEAN AIR GOALS. 11 I DO NOT WANT YOU TO HAVE ANY MISUNDERSTANDING 12 ABOUT THAT ITS SOMETIMES I HAVE HAD LENGTHY CONVERSATIONS 13 WITH EACH OF THE MEMBERS OF THE STAFF AND TEAM AND EXECUTIVE 14 COMMITTEE AND THE CHAIR AND SOME OF THE MEMBERS OF THE BOARD 15 AS WELL. 16 THERE IS KEEN INTEREST IN THE POTENTIAL THAT THIS 17 TECHNOLOGY HOLDS. SO I WOULD HATE FOR YOU TO LEAVE 18 IRRESPECTIVE OF WHAT HAPPENS HERE WITH ANY OTHER IDEA OTHER 19 THAN THAT WE ARE VERY EXCITED ABOUT IT. 20 I DID HAVE A COUPLE OF QUESTIONS THAT I THINK I 21 NEED TO BE ABLE TO ASK THE STAFF TO HELP US AS WELL AS YOU. 22 WE ARE STILL, I AM STILL -- I HAVE TALKED TO THE STAFF A LOT 23 ABOUT 2 PARTS PER MILLION, OVER 3 HOURS VERSUS 2 PARTS, 2.5 24 PER MILLION OVER ONE HOUR, AND I HAVE ALSO TALKED WITH U.S. 25 EPA REPRESENTATIVE WHO IS HERE, IS HE STILL HERE, WHAT IS HIS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 NAME? 2 ABOUT THAT, HE IS TRYING TO GET A BIT MORE CLARITY 3 ABOUT WHERE THE STAFF PROPOSAL IS RELATIVE TO THE 4 MASSACHUSETTS, CONNECTICUT, NEW HAMPSHIRE AND RHODE ISLAND 5 STANDARDS. 6 IN MY OPINION CORRECTLY FROM WHAT STAFF IS TELLING 7 ME IN TERMS OF THE DIFFERENCE BETWEEN THE HOURLY THING THE 8 DIFFERENCE BETWEEN 3 HOURS AND ONE HOUR, 2.5 FOR ONE HOUR AND 9 2.0 FOR THREE HOURS IS IT ESSENTIALLY EQUIVALENT. 10 MR. TOLLSTRUP: IT IS MORE COMPLICATED THAN THAT. 11 BOARD MEMBER EDGERTON: I REALLY APPRECIATE YOU 12 DOING THAT BUT I DON'T WANT EPA REPRESENTATIVE TO COME UP BUT 13 I WOULD LIKE TO HAVE A BIT MORE UNDERSTANDING OF THAT ON THE 14 RECORD. I CAN FIGURE OUT. 15 MR. TOLLSTRUP: MR. BEDWELL, BROUGHT UP BASICALLY 16 FOUR ISSUES ONE, AMMONIA START UP AND SHUT DOWNS. IN THE 17 DOCUMENT WE MADE IT VERY CLEAR THE NEED TO ESTABLISH LIMITS 18 ON START UP AND SHUT DOWNS THE 2.5 LIMIT THAT WE HAVE IN THE 19 DOCUMENT IS NOT APPLIED TO START UP AND SHUT DOWN THEORY IT 20 APPLIES OUTSIDE OF THAT BRIDGE SO IT IS VERY CLEAR THAT THE 21 DISTRICTS NEED TO BE VERY SPECIFIC ON IDENTIFY THE START UP 22 AND SHUTDOWN PERIODS. 23 THE REASON FOR THAT IS THAT ANYWHERE FROM 20 TO 60 24 PERCENT OF THE OVERALL NOX EMISSIONS ON THE ANNUAL BASIS ARE 25 ATTRIBUTABLE TO THE START UP AND SHUTDOWN AND REMAINDER OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 THE OPERATION IS ON THE LOW. 2 AS FAR AS AMMONIA GOES, BASICALLY THE ISSUE THERE 3 FOR US IS THAT MOST DISTRICT N S R DO NOT PROVIDE FOR 4 CONSIDERATION EITHER DIRECTLY AMMONIA EMITTED AMMONIA OR 5 SECONDARY FORMATION. 6 SO IT HAS LEFT US WITH HOW IS THE DISTRICT GOING TO 7 DEAL WITH IT IN A REGULATORY STANDPOINT IN REGULATING 8 AMMONIA. AS MR. BEDWELL CURRENTLY SAID WE MISINTERPRETED, WE 9 ARE AWARE THAT THERE ARE MANUFACTURES THAT ARE GOING TO 10 GUARANTEE THE SLIP. 11 WHAT WE BASICALLY DID WAS WE LOOKED AT WHERE THEY 12 ARE NOW 10 PPM AND THE VENDOR GUARANTEE IS 2 AND ALSO THERE 13 WAS SOME AT 5 AND BASICALLY WHAT OUR RECOMMENDATION IS IN THE 14 GUIDANCE IS THAT WE THINK THAT THE DISTRICT NEEDS TO EVALUATE 15 THE -- BASED ON THEIR OWN SPECIAL CIRCUMSTANCES. 16 FOR EXAMPLE, THE DISTRICT THAT HAS A SERIOUS PPM 10 17 PROBLEM, THEY MAY WANT TO EVALUATE THE NEED TO GO DOWN TO PPM 18 AND WITH THAT THEY MAY NEED TO CHANGE THE N S R RULES AND IF 19 THEY NEED TO DO IT WITH THAT DETERMINATION. 20 THE DISTRICT THAT DON'T HAVE A PPM 10 PROBLEM, 21 PERHAPS THEY DON'T NEED TO GO THAT LOW. THE GUIDANCE DOES 22 NOT SAY 5 IS THE LIMIT. WE CONSIDER 5 AT THE LOW AS TO 23 CONSIDERATIONS. ALSO I WOULD LIKE TO POINT OUT THAT AT THE 24 FACILITIES BACK EAST, IF YOU LOOK AT A NUMBER OF THEM AND 25 THERE ARE QUITE A NUMBER OF THEM BACK THERE RECENTLY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 PERMITTED AND I MIGHT ADD THAT THEY THESE ARE NOT BUILT BUT 2 RECENTLY ISSUED PERMITS. 3 IT IS ALL OVER THE PLACE. THE AMMONIA SLIP LEVELS 4 IN WHICH THEY ARE 2 PPM WITH NO CONDITIONS IN MASSACHUSETTS 5 THEY HAVE A 0 AMMONIA WITHIN FIVE YEARS THEY HAVE TO EVALUATE 6 THE POSSIBILITY OF GOING TO 0 EMISSION AMMONIA TECHNOLOGY. 7 BUT IN THE OTHER STATES LIKE NEW YORK, CONNECTICUT, 8 NEW HAMPSHIRE WE ARE SEEING LIMITS OF 10 PPM STILL SET. 9 SO THERE IS A MISH-MASH BACK EAST. AS FAR AS NOX 10 GOES, BASICALLY WHAT WE SEE IS THERE IS QUITE A VARIATION OF 11 NOX IN BACK EAST AS WELL. THERE ARE PERMITS AT 2 PPM AND 3 12 HOURS, AND THEN THERE ARE PERMITS AT 2.5 PPM AND 2 HOURS. 13 AND THEN THERE IS THE 2 PPM THAT MR. BEDWELL REFERS 14 TO IN THE TWO MASSACHUSETTS FACILITIES, AND BELLINGHAM. 15 IT IS NOT STRAIGHT FORWARD, AND BASICALLY WHAT THEY 16 REQUIRE IN THE PERMIT IS THAT THEY DO HAVE 2 PPM AMMONIA SLIP 17 LEVEL AND IN ADDITION TO THAT WHEN THEY DO HAVE A POWER 18 AUGMENTATION THAT GOES UP TO 3.5 PPM OVER THE COURSE OF THE 19 YEAR THIS IS NOX OVER THE COURSE OF THE YEAR A 12 MONTH 20 ROLLING AVERAGE THEY CANNOT EXCEED 2.3 PPMS. 21 SO REALLY IT SHOULD TOTAL 2.3 PPMS. 22 AND IN ADDITION WE SHOULD NOTE THAT THE PERIODS 23 THAT THE POWER ISSUE OCCURS IS GENERALLY GOING TO BE WHEN THE 24 AIR QUALITY IS WORSE AND REALLY WE ARE DOING IT ON THE DAYS 25 WHEN IT IS ABSOLUTELY THE WORST AIR FAULT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 THE MAIN THING IS THE LIMIT THAT WE HAVE IS 2.5 2 ACROSS THE BOARD REGARDLESS IS EVERY BIT AS STRINGENT. IT IS 3 BLACK AND WHITE. IT IS EASY TO ENFORCE ACROSS THE BOARD, 2.5 4 AND ONE HOUR IS A VERY STRINGENT -- AND WE THINK IT IS AS 5 STRINGENT AS ANYTHING ESTABLISHED BACK EAST. 6 AS FOR AS CO GOES, I WILL ADMIT THAT IN THE 7 DOCUMENT WE SITE A NUMBER OF FACILITIES THAT HAVE BEEN EITHER 8 LIMITED OR TESTED AT LESS THAN THE 60 PPM THAT WE HAVE IN OUR 9 DOCUMENTS AND IN FACT WE HAVE A FACILITY 1.8 PPM. 10 WE LOOKED AT THOSE FACILITIES AND LOOKED AT THEM 11 VERY CLOSELY. ONE OF THE REASONS THAT WE DID NOT CONSIDER 12 THEM, AND THERE ARE A NUMBER OF REASONS, AND ONE IS THAT THEY 13 ARE GENERALLY SMALLER -- AND NON EQUIPPED -- THEY ARE NOT 14 EQUIPPED -- WHAT WE ARE TALKING ABOUT HERE -- THEY ARE MUCH 15 LARGER UNITS AND MANY OF THE TURBINES ARE BASE LOAD OPERATING 16 CONSTANTLY AND THAT MANY OF THEM HAVE WATER INJECTION IS 17 ANOTHER FACTOR. 18 WHEN WE LOOKED AT THE NOX LIMIT THE ONLY FACILITY 19 THAT WE COULD REALLY COMPARE IT TO WAS IN OPERATIONS AND WAS 20 ENGAGED. WE HAVE ONE IN EVERY NEW GENERATION TURBINE, A 21 FRAME 7. 22 AND A 5.9 PPM LEVEL, ESSENTIALLY 6 AND THEY HAVE 23 BEEN MEETING THE 6 PPM LIMIT ON A CONTINUOUS BASIS AND THERE 24 HAVE BEEN SOME PROBLEMS BUT WE HAVE TALKED TO THE 25 MANUFACTURER AND THEY THINK THAT IT SHOULDN'T BE A CONCERN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 THAT THE 6 PPM LIMIT THAT WE HAVE PROPOSED IS A LIMIT THAT 2 CAN BE REACHED. 3 BOARD MEMBER EDGERTON: MAY I INTERRUPT YOU FOR ONE 4 SECOND ON THAT? 5 I WANT TO BE SURE AND GET THIS DOWN. THIS IS WHERE 6 I WANT TO MAKE SURE WE ARE ON THE SAME PAGE. 7 I AM LOOKING AT APPENDIX C PAGE 25 OF THE GREEN 8 BACKED ARB REPORT. 9 AND I AM LOOKING AT THE CROCKETT COGENERATION 10 PLANT, AND I'M NOT SEEING 6 PPM. I AM SEEING 1.11. 11 MR. TOLLSTRUP: YES. 12 THE PERMIT 6 PPM IS AND THE SOURCE TEST DATA HAS A 13 TENDENCY WHICH SHOWS 1.11. REMEMBER HERE AGAIN, YOU HAVE A 14 SIMILAR ISSUE AS YOU DO WITH AMMONIA THE MANUFACTURER 15 GENERALLY DESIGNED THE SYSTEM TO MEET GREY HOLD LEVELS FROM 16 THE BEGINNING AND GRADUALLY GO UP TO THE POINT THEY GET TO 17 THE UPPER LIMIT ON THE PERMIT. 18 BOARD MEMBER EDGERTON: WELL JUST A MINUTE, LET ME 19 JUST DO ANOTHER THING HERE WHILE WE ARE TALKING ABOUT THIS. 20 THERE IS ALSO A LETTER HERE FROM GIL HART, AND I 21 READ IT ABOUT TWO HOURS AGO. 22 HERE IS LETTER DATED JULY 19, TO MR. BOB GEORGE, 23 PROJECT MANAGEMENT BRANCH, CALIFORNIA AIR RESOURCES BOARD. 24 ENGLEHARDT HAS BEEN SUPPLYING OXIDATION CATALYST 25 FOR MOVING FUEL EMISSIONS FOR POWER PLANTS FOR OVER 13 YEARS, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 AND IT GOES ON, INSTALLED THE 2 CO OXIDATION SYSTEMS AT THE 2 CROCKETT COGENERATION PLANT. 3 IT GOES ON AND IT SAYS, THEY ARE EXTREMELY 4 CONFIDENT THAT THE TECHNOLOGY FOR CONTROLLING CO EMISSIONS 5 HAS BEEN DEMONSTRATED FOR OVER 13 YEARS AND FOR OVER A 118 6 INSTALLATIONS IN THE U.S. AND IN EUROPE OVER A BROAD RANGE OF 7 TURBINE. 8 WHILE A WIDE RANGE OF GEOGRAPHIC AND CLIMATIC 9 CONDITIONS. WITH CO CONVERSIONS TYPICALLY 90 PERCENT AND 10 HIGHER. AND THE MOST RELEVANT WHICH IS WITH STACK CO 11 EMISSION LEVELS MEASURED FROM A WIDE NUMBER OF SOURCE TEST 12 DATA TO BE LESS THAN ONE PPM, 1 PPM. 13 NOW IF THE PERMIT IS 6 PPM, THEN THAT IS ONE THING 14 BUT WHAT HAS BEEN MEASURED AND WHAT THEY ARE SAYING IN THEIR 15 LETTER TO US, IS THAT ACHIEVABLE AND BEING ACHIEVED ON OVER 16 118 INSTALLATIONS IS 1 PPM. 17 MR. TOLLSTRUP: YES. WE ADDRESSED THAT. 18 WE DID RECEIVE THAT LETTER THE OTHER DAY, AND WE 19 ARE REAL CONCERNED ABOUT WHAT THEY SAW AND WHO HAD DONE THE 20 ANALYSIS AND WE CALLED THAT EVENING TO CLARIFY. 21 THE ISSUE OF THE LETTER WAS, TO CLARIFY AN ISSUE 22 THAT WAS RECENTLY SERVICED WITH THE CROCKETT GENERATION 23 FACILITY, WITH THE CROCKETT FACILITY THEY HAVE APPLIED TO THE 24 BAY AREA DISTRICT TO RAISE THEIR CO FROM 5.9 TO 10 PPM. 25 WHAT THE DISCUSSIONS, BASICALLY WHAT THEY WERE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 SAYING IS THEY FELT CONFIDENT THAT THEY COULD MEET THE 6 PPM 2 LIMIT AND THAT IS WHAT THEY WERE ALLUDING TO. 3 AND DO YOU HAVE UNITS LESS GO AT THE LOWER LEVELS 4 AND AGAIN I AM THINKING THAT THERE IS SOME ISSUES BETWEEN HOW 5 THEY SERVICE AND OPERATE AND THE TYPE OF TURBINES THAT ARE 6 OUT THERE AND TO FURTHER SUPPORTING WHAT STAFF DID AND WHAT 7 IS IN THE DOCUMENT. 8 IF YOU LOOK AT THE RECENT PERMIT DECISION BACK 9 EAST, IF YOU LOOK AT THESE LARGE TERMS THAT ARE BEING 10 PERMITTED BACK THERE WE WILL SEE THAT THE CO BACK THERE IS 11 SLIDING AT BASICALLY 100 PERCENT LOAD DOWN TO AROUND 3 PPM AS 12 YOU DROP TO 75 PERCENT AND THEN WHEN YOU GET UP TO 50 PERCENT 13 LOAD YOU GO CLEAR UP TO 20 PPMS. 14 SO, IT IS A SLIDING SCALE, AND THEY ARE MERCHANT 15 AND IT IS SOME LOAD. AND IN THESE OPERATIONS THERE ARE A LOT 16 OF UP AND DOWNS IN THE SLIDE SCALE OPERATIONS HERE. 17 BOARD MEMBER EDGERTON: I WOULD LIKE TO MAKE A 18 COMMENT HERE AND I APPRECIATE THAT YOU CALLED THEM AND THAT 19 YOU TRIED TO WORK IT OUT BUT THIS IS PUTS THE BOARD MEMBERS, 20 PARTICULARLY MYSELF IN A VERY MUCH OF A DIFFICULT SITUATION 21 BECAUSE ALL OF THE WRITTEN MATERIALS SHOWS CLEARLY THAT 2 PPM 22 OR LESS AND EVEN IN YOUR OWN ANALYSIS. 23 AND THEN I GET A LETTER FROM ENGLEHARDT WHICH IS 24 VIRTUALLY BORE HIS GREAT COMPANY IN A BLUE CHIP REPUTATION 25 AND THEIR LETTER DOES NOT SAY AT ALL WHAT YOU SAY IT IS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 SAYING. AND THEN THAT IS AN UNTENABLE POSITION FOR SOMEBODY 2 TO BE IN. 3 MR VENTURINI: I AM GOING TO TRY AND MR. TOLLSTRUP 4 MAY HAVE SOME MORE QUESTIONING AS HE IS VERY VERY CLOSE TO 5 THIS FOR A VERY VERY LONG TIME. 6 ONE OF THE THINGS THAT STRUCK ME WITH SOME OF THE 7 EARLIER TESTIMONY PARTICULARLY BY THE GENTLEMEN FROM 8 PEERLESS, AND I THINK ONE OF THE ISSUES IT COMES DOWN TO IS 9 YOU HAVE A PERMIT LIMIT. 10 THAT IS THE MAXIMUM THAT IS ALLOWED, THESE SYSTEMS 11 ARE DESIGNED TO OPERATE MUCH BELOW THAT LIMIT. 12 AND SO I THINK WHEN WE LOOK AT THE ACTUAL TEST DATA 13 YOU HAVE TO KIND OF PUT THAT IN PERSPECTIVE OF THE SYSTEM AND 14 PRACTICE OUR OPERATING MUCH LOWER BECAUSE THEY HAVE TO ASSURE 15 ON A ONGOING BASIS THEY DON'T COME INTO VIOLATION. 16 THEY ALSO ARE WHAT CATALYST WOULD HAVE FOR A 17 LIFETIME SO THEY HAVE TO DESIGN IF THEY ARE GOING TO HAVE ANY 18 MEANINGFUL LIFE IN THAT CATALYST BEFORE THEY HAVE TO CHANGE 19 IT OUT AND INCUR THAT EXPENSE. 20 THEY ARE GOING TO HAVE TO BE VERY MUCH BELOW SO 21 OVER TIME THERE WILL BE SOME DEGRADATION. I WAS ENCOURAGED 22 BY MR. PERSONS STATEMENT THAT IF YOU SET IT AT SLIP LEVEL AT 23 5 OVER THE LIFE OF THE CATALYST I THINK IT WOULD BE AVERAGING 24 AROUND 2. 25 SO I THINK THAT IS WHAT YOU HAVE TO CONSIDER WHEN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 YOU ARE LOOKING AT THE TEST DATA THAT WAS TAKEN IN THE POINT 2 OF TIME VERSUS WHERE WE ARE TALKING ABOUT HERE, LIMITS THAT 3 GO ON TO THE PERMIT. I HOPE THAT WILL BE HELPFUL. 4 BOARD MEMBER EDGERTON: THANK YOU. I AM SORRY THAT 5 I INTERRUPTED YOU. 6 MR. TOLLSTRUP: WE HAVE ANOTHER LETTER HERE AS WELL 7 FROM EVEN GALLON HEART AS WELL. THIS ONE IS DATED JANUARY 5, 8 1999 AND IT IS TO THE U.S. EPA. 9 BASICALLY, WHAT THEY SAY IN HERE IS, THEY ARE 10 WILLING TO GUARANTEE LEVEL 4 PPM, AT 15 PERCENT OF 2, SO, CO 11 LEVELS ARE ALL OVER THE PLACE. 12 I CAME DOWN TO LOOKING AT THE DATA AND LOOKING AT 13 WHAT WE FELT COMFORTABLE WITH THESE LARGE TURBINES AND WE 14 DON'T WANT THEM OUT. WHAT THEY COULD ACHIEVE ON AN ONGOING 15 BASIS AND CONTINUOUSLY COMPLYING WITH THE LIMITS, AND THAT IS 16 WHERE THE STAFF IS. 17 MR. SCHEIBLE: I THINK I CAN SUM IT UP. 18 WE ARE LOOKING FOR THE BEST THAT THE UNITS CAN DO 19 UNDER ALL CIRCUMSTANCES THAT WOULD BE REPEATEDLY EXPECTED IN 20 THEIR OPERATION. 21 AND THAT LEADS TO A HIGHER NUMBER THAN WHAT THEY 22 ACTUALLY DO IN PRACTICE UNDER MANY OF THEIR CONDITIONS. THEY 23 HAVE TO MEET IT ALL THE TIME, THEY HAVE TO MEET IT EVERY HOUR 24 OR THREE HOUR PERIOD THROUGHOUT THE YEAR AND THAT MAKES THE 25 AVERAGING TIME AND MAKES THE STANDARD A LOT TOUGHER THAN IT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 APPEARS TO BE. 2 CHAIRMAN LLOYD: THANK YOU. THERE ARE NO OTHER 3 QUESTIONS FROM THE BOARD MEMBERS? 4 MR. RUBENSTEIN: IF I MAY JUST QUICKLY RESPOND TO 5 WHAT THEY WERE SAYING, AND I HAVE A COUPLE OF POINTS. 6 FIRST OF ALL, I CONCUR WITH HER WHEN THEY SAID ON 7 AMMONIA, THAT IS SOMETHING HAS DISCUSSION WITH CARB STAFF ON. 8 IN RELATION TO 5 PPM VERSUS 2 PPM STANDARD, THE 9 ARGUMENT THAT I AM HEARING AS FAR AS PROCEDURAL NATURE, AND I 10 THINK IT IS IMPORTANT TO NOTE THAT THE PROCEDURAL ARGUMENTS 11 BEING MADE FOR 2 PPM STANDARD, THE PROCEDURAL ARGUMENT IS NOW 12 BEING MADE FOR 5 PPM STANDARD. 13 DOES THAT MAKE SENSE WHAT I AM SAYING? 14 FOR EXAMPLE, LET ME REPHRASE THIS -- WHEN I 15 QUESTION OR FOR EXAMPLE, DURING THIS LAST STINT YOU HAD WHERE 16 YOU WERE QUESTIONING WHY CAN'T CARB GO TO A 2 PPM AMMONIA 17 STANDARD? 18 THE RESPONSE BACK IS, WELL THERE ARE SOME 19 PROCEDURAL ISSUES YET CARB IS PROPOSING A 5 PPM AMMONIA SLIP 20 STANDARD AND WOULD NOT THE SAME PROCEDURAL ISSUES APPLY 21 THERE? 22 AND I THINK WHAT REALLY NEEDS TO BE ASKED IS WHAT 23 TECHNICALLY IS KEEPING CARB FROM NO ISSUE TO PPM STANDARD NOT 24 PROCEDURALLY BECAUSE APPARENTLY THOSE PROCEDURAL LIMITS DO 25 NOT EXIST FOR 5 PPM BUT THEY DO FOR TWO PPM LIMITS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 AND TO ME THAT IS THE THAT TOUGHEST PROCESS OF 2 CONSISTENT OR LOGICAL RATIONALE FOR WHY CARB DID NOT GO TO A 3 LOWER LIMIT ON AMMONIA. 4 DOES THAT HELP? 5 BOARD MEMBER EDGERTON: MR. CHAIRMAN, I WANTED TO 6 MAKE ONE COMMENT THEN. 7 OBVIOUSLY I HAVE TRIED TO SPEND AS MUCH TIME AS I 8 COULD TO UNDERSTAND THIS VERY IMPORTANT ISSUE FACING US AND 9 FACING THE STATE AND DISTRICTS, AND FACING THE ELECTRICITY 10 AND POWER GENERATORS. 11 ONE OF THE THINGS THAT I DID IN THE COURSE OF THAT, 12 I HAD AN OPPORTUNITY TO REVIEW SOME OF THE PAPERS THAT HAVE 13 BEEN FILED IN THE NORTHEAST, AND THERE WAS A MOTION FOR 14 RECONSIDERATION OR PETITION FOR RECONSIDERATION FILED BY GOAL 15 LINE AT THE ENVIRONMENTAL APPEALS BOARD. 16 YOU AT U.S. EPA AND THEIR MAKING THE ARGUMENTS 17 THAT THE LONDON AREA PLANT IF I RECALL CORRECTLY, THAT IS IN 18 NEW HAMPSHIRE AND THEY MADE A MISTAKE IN NOT SETTING BACT 19 THIS THAT YOU ARE HERE ARGUING HERE TODAY AND THAT THEY HAD 20 MADE A MISTAKE THERE. 21 THEY ARE HAVING A THOROUGH TOP DOWN BACT 22 DETERMINATION IN WHICH THEY LOOK AT THE MOST STRINGENT 23 TECHNOLOGY AND THEN BACK DOWN FROM THERE WITH RESPECT TO THE 24 CITING AND LICENSING OF EVERY PLANT. 25 CONNECTED TO THAT IS THE FACT THAT IN THIS SAME PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 DOCUMENT, THERE WAS CONSIDERABLE CITATION TO THE SOUTH COAST 2 AIR QUALITY MANAGEMENT DISTRICT AND TO THE REGION 9 3 INDICATIONS THAT THEY ARE ACTIVELY INTERESTED IN DESIGNATING 4 SCONOX AS BACT, IF I UNDERSTAND THAT CORRECTLY. 5 MR. BEDWELL: YES AND ACTUALLY WHAT THE SOUTH COAST 6 DID TWICE BOTH IN 1997 AND IN 1998 WAS ACTUALLY DESIGNATED 0 7 KNOCK AS ACHIEVING THE LOWEST ACHIEVABLE EMISSIONS RATE AND 8 FOR SOUTH COAST IT WOULD ALSO BE BACT. SO YOU ARE RIGHT. 9 BOARD MEMBER EDGERTON: SO IS MY CONCERN IS THAT I 10 THINK THAT WE NEED TO BE AWARE OF IT HERE IN THE STATE OF 11 CALIFORNIA AND THE ENERGY COMMISSION REPRESENTATIVE MADE IT 12 VERY CLEAR THAT ALL OF THE PLANTS IN CALIFORNIA MUST MEET 13 BOTH FEDERAL AND STATE AND LOCAL REQUIREMENTS. 14 AND IT IS MY, I PUT IN A COUPLE OF CALLS, IT IS MY 15 UNDERSTANDING THAT THE U.S. EPA IS NOW CONCERNED THAT REGION 16 1 AND REGION 9 MAYBE HAVING DIFFERENT APPROACHES HERE AND IT 17 APPEARS THAT THE NATIONAL EPA IS TAKING AN INTEREST IN THIS 18 ISSUE AND MAYBE STEPPING IN AT SOME POINT TO PROVIDE 19 ADDITIONAL GUIDANCE. 20 I EXPECTED AT THAT POINT OF COURSE WE WOULD LIKE TO 21 BE INVOLVED AND LIKE TO BE SURE OURS IS HARMONIOUS WITH 22 THEIRS. DO YOU HAVE A SENSE OF, CAN YOU CONTRIBUTE ANYTHING 23 TO WHAT I LEARNED BY MY OWN INVESTIGATION? 24 MR. BEDWELL: YES, I THINK YOU RAISED SOME VERY 25 GOOD POINTS. CERTAINLY FOR BACT AND LAYER AND THE STANDPOINT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 OF AMMONIA, IS THAT STATES WILL TALLY THESE AND THE FEDERAL 2 GOVERNMENT OBVIOUSLY NEEDS TO IMPLEMENTS FEDERAL HEALTH BASED 3 STANDARDS FOR CLEAN AIR. 4 AND CARB ITSELF MAKES CONNECTION BETWEEN AMMONIA 5 EMISSIONS AND PM 10 EMISSIONS. THE ADDITIONAL ITEM AND THIS 6 IS ALSO TIES INTO SOMETHING THAT MR. TOLLSTRUP SAID THAT YES, 7 IN SOME CASES THERE ARE DISTRICTS WITHIN CALIFORNIA THAT ARE 8 IN ATTAINMENT FOR PM 10 HOWEVER I THINK A VERY STRONG 9 ARGUMENT COULD BE MADE AT THAT, AT LEAST FROM PROJECTIONS AND 10 CALCULATIONS AND A VARIETY OF STUDIES IS THAT, MOST IF NOT 11 ALL OF THE CALIFORNIA DISTRICTS WILL NOT BE IN COMPLIANCE 12 WITH P M 2.5. 13 AND YES THERE IS AN APPEAL RIGHT NOW GOING ON IN 14 AN APPEALS COURT DECISION BY EPA RELATED TO THE NOX STANDARDS 15 OF PPM 2.5. 16 I THINK IT IS CONVENTIONAL WISDOM THAT EVERYBODY 17 BELIEVES IN IT AND IT WILL BE OVER TURNED OR AT LEAST EPA 18 WILL BE SLIGHTLY DELAYED BY THROWING OUT THE PPM 2.5 19 STANDARDS. 20 BUT THE FACT WILL WITHIN THE NEXT FEW YEARS, IN 21 FACT ESTABLISH A TEAM WITH PPM STANDARDS AND REGARDLESS OF 22 WHAT THE PM 10 ARE, THE PM 2.5, WHERE AMMONIA NITRATE ON THE 23 WEST COAST IS IDENTIFIED AS THE LARGEST PPM 2.5 COMPONENT 24 THAT CARB HAS DEMONSTRATED IN THE PAST NEEDS TO ANTICIPATE 25 SOME OF THOSE COMPLIANCE ISSUES AND THOSE HEALTH ISSUES AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 IN FACT MOVE FOR STRICTER AMMONIA STANDARD AS YOU ACTUALLY 2 YOU HAVE IDENTIFIED IN YOUR OWN DOCUMENT TRACER. 3 CHAIRMAN LLOYD: I MIGHT FIND OUT THAT CARB IS WAY 4 AHEAD OF THEM, BECAUSE WE DO NOT RELY ON THE EPA 72.5, I 5 THINK WE HAVE GONE ON RECORD SAYING THAT WE HAVE PM 10, 2.5. 6 PM 10 IS KIND OF THE STATE AND IS ACTUALLY MORE 7 STRINGENT THAN WHAT WE USE. WE USE THE FEDERAL PM 2.5 8 STANDARDS. 9 SO WE DON'T RELY ON THAT. SO WHEN I THINK WE ARE 10 FULLY COVERED IN OUR DUTY IN THAT AREA. 11 MR. BEDWELL: I'M DELIGHTED, I'M NOT TRYING TO 12 REMIND YOU OF YOUR DUTIES AS MUCH JUST PRAISE THIS ISSUE OF 13 THE CONTRIBUTION OF AMMONIA 2 TO ATTAINMENT OF THAT STANDARD. 14 CHAIRMAN LLOYD: I THINK YOU HAVE USED UP YOUR 15 ALLOCATION OF AMMONIA EMISSIONS. 16 MR. BEDWELL: WELL NOT MY ALLOCATION, THANK YOU. 17 CHAIRMAN LLOYD: NO, THANK YOU VERY MUCH. I LET 18 YOU TAKE THAT TIME BECAUSE I THINK IT WAS IMPORTANT BUT THERE 19 ARE A LOT OF ISSUES THAT COME UP ASSOCIATED WITH THESE 20 TECHNOLOGIES, AND I THINK MR. RUBENSTEIN ALSO DID A GOOD JOB 21 WITH THE DOCUMENTS AND SOME OF YOU ARE CONCERNED AND WE ARE 22 ALSO LOOKING AT THE OTHER SIDE. 23 SO I WANT TO MAKE SURE THAT WE HAD A FULL HEARING 24 WITH THOSE CONSEQUENTIAL ATTRIBUTES BUT THE FUTURE WITNESSES, 25 WE HAVE SIX TO COME, ARE LIMITED TO FIVE MINUTES BECAUSE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 OTHERWISE WE WILL LOSE A QUORUM HERE. 2 SO, THANK YOU VERY MUCH, MR. BEDWELL. I WOULD 3 INVITE OUR PLAN AND I WOULD ASK OUR FUTURE WITNESSES IF THEY 4 WOULD LIMIT THEIR TESTIMONY TO 5 MINUTES AND TO FOCUS ON NEW 5 ISSUES, IF YOU HAVE WRITTEN TESTIMONY JUST TO HIGHLIGHT THE 6 KEY POINTS THAT THEY SAY ARE VERY IMPORTANT ISSUES FOR US OR 7 WE WILL LOSE A QUORUM. 8 MS. REYNOLDS: GOOD AFTERNOON, CHAIRMAN LLOYD AND 9 BOARD MEMBERS. 10 I AM LIZANNE REYNOLDS, REPRESENTING CURE, 11 CALIFORNIA UNIONS FOR RELIABLE ENERGY. CURE HAS BEEN 12 ACTIVELY INVOLVED IN POWER PLANTS PLANNING CASES BEFORE THE 13 CET FOR THE LAST TWO YEARS. 14 SO WE ARE FAMILIAR WITH THE DIALOGUE, THAT IS GOING 15 ON HERE, IT HAS BEEN GOING ON HERE FOR TWO YEARS AND THAT IS 16 PART OF WHY WE ARE GETTING DOWN TO LOWER AND LOWER EMISSION 17 LEVELS IS BECAUSE THERE ARE PEOPLE ON BOTH SIDE OF THE FENCE 18 SAYING IT SHOULD BE HIGHER, IT SHOULD BE LOWER AND THAT IS 19 CONVERGING AND MAKING US PROGRESS IN THE FIELDS. 20 OUR MAIN CONCERN HERE AND WE THINK THAT THE STAFF 21 HAS DONE A GREAT JOB IN THE LIMITED TIME AVAILABLE TO PULL 22 TOGETHER A GREAT DOCUMENT AND REFLECT WHAT THEY ARE 23 COMFORTABLE WITH AND ALTHOUGH WE THINK THAT THE DATA SUPPORT 24 A LOWER BACK FOR CO AND LOWER AMMONIA SLIPS IS THAT OUR 25 PRIMARY CONCERN IS THE DIALOGUE DOES NOT STOP HERE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 WE ARE CONCERNED WITH THE BOARD, WE THINK THAT THE 2 GUIDANCE IS GOOD AND SHOULD BE ADOPTED BUT WE THINK THE BOARD 3 SHOULD SEND A CLEAR MESSAGE THAT THIS IS NOT SET IN STONE. 4 WE NEED TO CONTINUE ON THIS PATH WHERE IS WILL 5 LOWER OUR EMISSION LEVEL AND THIS IS JUST A GUIDANCE AND AS A 6 NEW DATA AND NEW TECHNOLOGY BECOMES AVAILABLE, THAT SHOULD BE 7 REFLECTED IN THE FACT DETERMINATION FOR EACH POWER PLANT. 8 SO JUST TO BE BRIEF, THAT IS OUR MAIN CONCERN AND 9 WE HOPE THAT YOU REFLECT THAT IN THE RESOLUTION. 10 CHAIRMAN LLOYD: SO THANK YOU VERY MUCH AND I THINK 11 YOU WILL BE PLEASANTLY SURPRISED WHEN WE GET TO THAT POINT. 12 BOARD MEMBER DESAULNIER: WHEN? 13 CHAIRMAN LLOYD: IT IS YOUR HOSPITALITY. OUR NEXT 14 WITNESS IS SHANNON BROOME, THEN CHUCK SOLT, THEN JACK 15 BRUNTON. 16 MS. BROOME: I WILL HOLD THIS DOWN HERE SO 17 HOPEFULLY YOU WILL HEAR ME. GOOD AFTERNOON, I AM SHANNON 18 BROOME, I AM COUNCIL AND MANAGER OF THE SENIOR ACT PROGRAM 19 FOR THE GENERAL ELECTRIC COMPANY AND WE APPRECIATE THE 20 OPPORTUNITY TO BE HERE TODAY AND TO DISCUSS THESE IMPORTANT 21 MATTERS OF THE EMISSION PIT BULL IN FACT POWER PLANTS IN 22 CALIFORNIA. 23 I WILL TRY TO BE REALLY BRIEF. YOU HAVE WRITTEN 24 TESTIMONY FROM US THAT WE SUBMITTED EARLIER IN THE WEEK AND I 25 AM JUST GOING HIT 3 QUICK HIGHLIGHTS. BY WAY OF BACKGROUND G PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 E IS THE LARGEST MANUFACTURER OF GAS AND STEAM TERMS IN THE 2 UNITED STATES AND THE WORLD. 3 WE SELL APPROXIMATELY 60 PERCENT OF THE GAS 4 TURBINES IN THE U. S. MARKET AND OVER THE LAST 10 YEARS WE 5 HAVE MADE A SUBSTANTIAL INVESTMENT GREATER THAN 200 MILLION 6 DOLLARS IN REDUCING EMISSIONS FROM GAS TURBINES AT THE 7 GENERATION POINT. 8 NOT DEALING WITH ADD ON CONTROL THAT HAVE OTHER 9 NEGATIVE IMPACTS ON THE ENVIRONMENT. OUR ENGINEERS HAVE 10 DEVELOPED A COMBINED CYCLE GAS TURBINE THAT ACHIEVED AN 11 EMISSION LIMIT IN PRACTICE OF 9 PPM. 12 WITHOUT THE ADD ON CONTROLS AND THIS IS A 13 PHENOMENAL ACHIEVEMENT IN POLLUTION PREVENTION AND THAT HAS 14 BEEN G E'S FOCUS AND IT HAS NOT BEEN MATCHED BY ANY OTHER 15 MANUFACTURER IN THE WORLD. 16 THEY ARE TRYING BUT THEY ARE NOT THERE YET. 3 17 POINTS, FIRST, WE TOO ARE CONCERNED OF THE ABBREVIATED NATURE 18 OF THE PROCESS PARTICULARLY JUST NOT HAVING THE ACTUAL 19 WRITTEN GUIDANCE DOCUMENT FOR EVEN 30 DAYS BEFORE COMMENTS 20 WERE DUE. 21 WE WOULD LIKE IT IF THE BOARD COULD LEAVE THE 22 RECORD OPEN OR FIND A WAY THAT WE COULD REVISIT THIS ISSUE 23 POTENTIALLY IN THE FALL SO THAT PEOPLE WOULD HAVE FURTHER 24 OPPORTUNITIES TO WORK WITH STAFF AND GO OVER SOME OF THE VERY 25 COMPLICATED TECHNICAL ISSUES RAISED HERE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 THE SECOND POINT IS, WE DISAGREE WITH THE INCLUSION 2 OF A 2.5 PPM NOX LIMIT FOR ALL COMBINED CYCLE GAS TURBINE AS 3 I MENTIONED. OUR TURBINE 9 PPM WITHOUT ADD ON CONTROLS AND WE 4 THINK PUBLIC POLICY FAVORS INVESTMENT IF POLLUTION PREVENTION 5 TECHNOLOGY AND ONE OF THE THINGS THAT WE DISCUSSED WITH OUR 6 VICE PRESIDENT IN THE BUSINESS DEVELOPMENT IS WHERE DO WE 7 INVEST IN THE NEXT 200 MILLION, SHOULD WE PURCHASE CATALYTICA 8 OR GOAL LINE, THESE ARE REAL DISCUSSIONS THAT WE HAVE. 9 CHAIRMAN LLOYD: IS THAT THE PURPOSE FOR 10 ELIMINATING COMPETITION? 11 MS. BROOME: WELL WE WANT TO BE WHERE THE 12 REGULATIONS ARE GOING. AND WE THINK THAT THE U.S. SHOULD BE 13 INVESTING IN A POLLUTION PREVENTION, AT THE SOURCE AND NOT 14 DISADVANTAGING THOSE TECHNOLOGIES. 15 HOWEVER, WE HAVE BEEN WORKING WITH STAFF ON THIS 16 ISSUE, AND ONE OF OUR BIGGEST CONCERNS IS THAT THIS NOT SET A 17 NEGATIVE PRECEDENT. AS YOU MAY KNOW, I AM SURE YOU KNOW, 18 THAT CALIFORNIA TAKES ON A MORE STRINGENT VIEW OF BADGE IN 19 MANY CASES THAN OTHER STATES DO. 20 AND WE WOULD LIKE IT TO BE CLEAR IN THE DOCUMENTS 21 THAT THIS GUIDANCE DOCUMENT IS ADDRESSING CALIFORNIA BADGE 22 WHICH IS EQUIVALENT TO FEDERAL LAYER IN MOST CASES AND MAYBE 23 MORE STRINGENT THAN FEDERAL BACK WHERE BACK IS APPLIED IN 24 OTHER STATES AND THAT IS DOESN'T TAKE INTO ACCOUNT ENERGY, 25 ECONOMICALLY AND ENVIRONMENTAL FACTORS TO THE SAME EXTENT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 THAT ARE CONSIDERED IN OTHER BACK PROGRAMS AND THAT IN 2 APPROPRIATE CIRCUMSTANCES YOUR DISTRICT WOULD HAVE THAT 3 FLEXIBILITY TO CONSIDER THESE ISSUES AS WELL AND WE HAVE THE 4 CONSENSUS OF THE STAFF ON THAT CLARIFICATION AND I THINK THAT 5 THEY THOUGHT IT WAS THEIR POSITION IN THE FIRST INSTANCE AND 6 I DO KNOW IF THEY WANT TO SPEAK TO IT RIGHT NOW OR AFTER I 7 GET THROUGH MY OTHER 2 POINTS? 8 CHAIRMAN LLOYD: I SEE NODDING OF HEADS SO I THINK 9 THAT YOU HAVE CONCURRENCE. 10 MS. BROOME: SO AS LONG AS THEY AGREE TO THAT 11 LANGUAGE WE CAN SUPPORT GOING FORWARD WITH THIS AS IT IS NOW. 12 IF THE BOARD DOES NOT, THE THIRD POINT IS THAT THE 13 GUIDANCE DOCUMENT RECOMMENDS 5 PPM FOR SIMPLE CYCLE GAS 14 TURBINES BUT DOES NOT CLARIFY THAT IS ONLY ACHIEVABLE ON 15 SIMPLE CYCLE TURBINES OPERATING BELOW 900 DEGREES AND WHEN 16 YOU GET INTO SOME OF THE LARGER SIMPLE CYCLE TURBINES THE 5 17 PPM IS NOT DEMONSTRATED FOR NOX. 18 I THINK WE HAVE CONSENSUS ON THAT AS WELL AND THEY 19 HAVE AGREED TO INSERT, I HAVE JUST COME UP WITH A 900 20 NUMBER, I HAVE CALLER ID SO I HAVE TO SEE ABOUT THIS 21 PARTICULAR NUMBER BUT THE LOW HIGH ISSUE WE AGREED WE HAD 22 NEVER HAD A DISAGREEMENT ABOUT THAT AND THAT WAS A MATTER OF 23 CLARIFYING THAT IN THE DOCUMENTS. 24 WITH THAT CLARIFICATION, WE ARE SUPPORTED OF THAT 25 POINT. I JUST WANT TO CLOSE WITH THE FACT THAT THESE ISSUES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 ON A POLICY BASIS ARE VERY IMPORTANT TO G E AND ON A COAL 2 DISPLACEMENT IS NOT AS MUCH OF AN ISSUE HERE SOMEONE EARLIER 3 MENTIONED GLOBAL WARMING AND THOSE ISSUES WE WANT TO SEE 4 EXCLUSIVE PREVENTION TECHNOLOGY LIKE OURS THAT ARE MUCH MORE 5 ECONOMICAL THAN ADDING A SCR ON A 2.9 PPM MACHINE MAKING US 6 NON COMPETITIVE WITH THE 25 PPM MACHINE. 7 WE WANT TO SEE THE INCENTIVES TO GO TO THESE MORE 8 EFFICIENT ELECTRIC GENERATING METHODS THAT REDUCE CARBON 9 DIOXIDE BY A HUGE AMOUNT AND WE SENSE THE DISADVANTAGE 10 APPROACHES LIKE OURS THROUGHOUT THE COUNTRY BY SETTING 11 PRECEDENTS SAYING THAT THIS IS BACKED EVERYWHERE WE COULD 12 REALLY SEE DAMAGE ON THE ENVIRONMENTAL SIDE FROM DOING THAT 13 EVEN THOUGH YOU REDUCE NOX, EVEN A SMALL INCREMENT AND WE 14 WANT TO BE SURE THAT THOSE PUBLIC ISSUES ARE IN YOUR MIND AS 15 YOU GO FORWARD WITH THESE ISSUES. THANK YOU. ANY QUESTIONS? 16 CHAIRMAN LLOYD: QUESTIONS FROM THE BOARD MEMBERS. 17 BOARD MEMBER EDGERTON: I'M SORRY TO HAVE TO STICK 18 WITH THIS, BUT ON ONE OF THE ISSUES THAT WE TALKED ABOUT A 19 LITTLE BIT WHICH IS SUGGESTING THAT THERE BE ADDED TO THE 20 GUIDELINES AND TO THE RESOLUTION A REQUEST TO THE DISTRICT 21 THAT THEY TOO WILL TAKE INTO CONSIDERATION CO 2 EMISSIONS 22 FROM THE TECHNOLOGY SO THAT, THAT WILL BE ALSO IN THE MIX, AS 23 CALIFORNIA GOES FORWARD TO MAKE SURE THAT WE HAVE AN 24 INTEGRATED POLICY WITH THE TOXIC AIR CLEANER PRODUCTIONS, 25 EMISSION REDUCTION CRITERIA REDUCTIONS, GREEN HOUSE GAS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 RESOURCES. 2 MS. BROOME: AND JUST TO ANSWER YOUR EARLIER 3 QUESTION ABOUT THE ZONEON, WE ARE LOOKING AT DESIGNS IN TWO 4 YEARS AND COMMERCIAL VIABILITY NOT FOR FOUR TO FIVE YEARS. 5 WE THINK IT IS A GREAT TECHNOLOGY BUT WE AGREE 6 WITH THE STAFF THAT SCONE AND SCONOX ARE NOT READY FOR PRIME 7 TIME OR LARGE MACHINES. AND AS PEOPLE ARE APPARENTLY 8 INVOLVED IN THE ZONEON ISSUE WHICH IS PROBABLY THE ACHED IN 9 SUPPORT OF MY PROPOSAL. 10 CHAIRMAN LLOYD: LET'S SEE THE NEXT WITNESS FOR A 11 POINT ON THAT. 12 THANK YOU VERY MUCH, MS. BROOME. 13 MR. MENEBROKER: JUST ONE CLARIFICATION WITH BACT 14 DEFINITION, THERE IS SOME CONFUSION WITH REGARDS TO 15 CALIFORNIA BACT IS EQUIVALENT TO FEDERAL AIR DISTRICT AND 16 THERE IS SOME KIND OF CONFUSION THERE AND WE WILL IN THE 17 DOCUMENT INDICATE THAT IN THE BACK THAT IT IS EQUIVILENT TO 18 THE FEDERAL LAYER AND INDICATE WHAT THE FEDERAL BACK 19 DEFINITION IS AND IT IS DIFFERENT. 20 CHAIRMAN LLOYD: SO ONE QUESTION OF STAFF QUICKLY 21 THE LETTER JULY 19 FROM G E, ON FIGURE 2, DO YOU AGREE 22 GENERALLY WITH THE RANKINGS OF THE TECHNOLOGY COSTS THERE? 23 MR. VENTURINI: I HAVE NOT REALLY HAD A CHANCE TO 24 LOOK AT THEM YET. WE HAVE NOT LOCATED IN DETAIL I WILL GET 25 BACK TO YOU. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 CHAIRMAN LLOYD: YES. OKAY. 2 MR. SOLT, FROM CATALYTICA INDUSTRY, CAN WE HAVE A 3 CHANCE TO HEAR YOUR RESPONSE? 4 MR. SOLT: I CAN NOT STAY TO LONG BECAUSE I NEED TO 5 GO SEE MY BROKER BEFORE GE BUYS US. 6 MY NAME IS CHUCK SOLT, AND I WORK FOR CATALYTICA, 7 AND WE MANUFACTURE TECHNOLOGY FOR GAS PURPOSE WHICH IS -- 8 AND YOU MAY OF HEARD THAT REFERRED TO ALSO TODAY. IT IS JUST 9 COMING INTO COMMERCIALIZATION TODAY. 10 IT IS CAPABLE OF REACHING THE BACK LEVELS THAT WE 11 ARE TALKING ABOUT IN THIS DOCUMENT WITHOUT EXHAUST GAS CLEAN 12 UP IT ALSO USES NO COMPONENTS SO I WILL NOT TALK ABOUT 13 AMMONIA OR EVEN CHICKENS FOR THAT MATTER. AND IT IS ALSO IS 14 NOT SUBJECT TO NOX EXCURSIONS. 15 SO WE HAVE ANOMALIES IN OPERATION AND SO THE NOX IS 16 GOING BETWEEN ONE HOUR AVERAGES AND 3 HOUR AVERAGES BECAUSE 17 THAT HAS NO CONSEQUENCE FOR OUR TECHNOLOGY ALSO. 18 IT ELIMINATE NOX FORMATION IN THE COMPBUSTION 19 ITSELF. NOT IN THE TURBINE EXHAUST AND BECAUSE OF THAT IT IS 20 USES POLLUTION PROVENTION TECHNOLOGY MUCH AS G E'S LOW NOX 21 SYSTEM ELIMINATES THE FORMATION OF NOX IN THE FIRST PLACE 22 WHICH IS BETTER THAN THEY DO. 23 IT IS APPLICABLE TO ALL SIZES OF TURBINES. WE ARE 24 WORKING WITH THE LARGEST TURBINE MANUFACTURERS AND WITH THE 25 SOME MALL STRIP MANUFATURERS AND MUCH IN BETWEEN. SOME OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 THE ASPECTS OF THIS PARTICULAR TECHNOLOGY ALLOWS RESULTS IN 2 DIFFERENT APPLICATIONS, APPROACHES, AND CONSEQUENCES. 3 YOU HEARD GARY RUBENSTEIN TALKING A LITTLE BIT 4 EARLIER WITH THE ASPECT OF DEDUCTING BURNERS. SINCE YOU ARE 5 CONTROLLING THE FORMATION OF NOX AND PREVENTING THE NOX FROM 6 COMBUSTION WHEN YOU TALK ABOUT DLN OR ZONEON OR WHATEVER IT 7 MEANS THEN THAT ANY NOX THAT WOULD BE GENERATED FROM THE 8 EXHAUST WOULD NOT BE CLEANED UP BY THIS TECHNOLOGY. 9 THAT IS A VERY TRUE STATEMENT. ON THE OTHER SIDE 10 OF THE COIN THERE ARE SOME ASPECTS ABOUT THE TECHNOLOGY THAT 11 JUST MIGHT IN FACT MAY REDUCE THE START UP WITH EMISSIONS 12 PRETTY DRAMATICALLY. 13 WE HAVE PROGRAMS RIGHT NOW WITH GENERAL ELECTRIC, 14 PRATT WHITNEY AND SEVERAL OTHER TURBINE MANUFACTURERS. THEY 15 ARE ALL AT VARIOUS STAGES AND MOST OF THEM ARE UNDER 16 CONFIDENTIALITY STATEMENTS SO I CANNOT TELL YOU MUCH ABOUT 17 THEM ANYWAY. 18 WE DO INVITE YOU THOUGH TO VISIT THE WEBSITE AND 19 DISCOVER ANYTHING ELSE YOU WANT TO ABOUT THE TECHNOLOGY. THE 20 ONE POINT THAT I WANT TO BRING OUT ABOUT REGARDING THE 21 DOCUMENT AND PROCEEDINGS THAT YOU ARE CONDUCTING TODAY. 22 CALIFORNIA HAS A TREMENDOUS OPPORTUNITY RIGHT NOW 23 AND YOU PEOPLE HAVE A TREMENDOUS OPPORTUNITY TO GRADUALLY 24 REDUCE THE EMISSIONS IN THE STATE OF CALIFORNIA. 25 BY REPLACING EXISTING STEAM GENERATIONS WITH THESE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 HIGHLY DEFICIENT LOW GAS TURBINE SYSTEMS YOU COULD GET A 2 DOUBLE IMPACT ON THE REDUCTION OF THE EMISSIONS. 3 FIRST OF ALL, WITH ALL THE EFFICIENCIES 4 SUBSTANTIALLY HIGHER WE ARE TALKING ABOUT REPLACING 30 TO 35 5 PERCENT EFFICIENT STEAM EMISSION WITH 60 PERCENT EFFICIENT 6 COMBINED SITE AND GENERATION AND IT WILL MUCH LOWER NOX LEVEL 7 TO BOOT. 8 SO YOU GET DOUBLE IMPACT AND A RESULT IN USE 9 ACCORDING TO THE NUMBERS THAT MIKE WAS SHOWING EARLIER. 10 EVERY TIME YOU REPLACE A MEGAWATT OF STEAM GENERATION TO GAS 11 TURBINE CYCLE GENERATION YOU REMOVE TWO-THIRDS OF THE NOX 12 GENERATED THAT WAS PRODUCED OF ELECTRICITY. 13 THAT OPPORTUNITY IS SOMETHING THAT WE HAVE TO MAKE 14 SURE THAT WE TAKE ADVANTAGE OF. THE LEVEL THAT IS 15 ESTABLISHED FOR THE GUIDANCE DOCUMENT HERE IS VERY IMPORTANT. 16 IF THE LEVEL IS SET TOO HIGH IT IS VERY EASY TO DO THE MATH 17 AND THE MEGAWATTS AND FIND OUT HOW INCREMENTAL INCREASE YOU 18 GET IN THE ATMOSPHERE AS A RESULT OF SETTING THE LEVEL TOO 19 HIGH. 20 BUT ON THE OTHER HAND IF YOU SET THE LEVEL TOO LOW 21 SO THAT YOU CAN INCREASE EITHER THE COST OR THE RISK OR BOTH 22 TO THE POINT WHERE PEOPLE DO NOT REPLACE THE EXISTING STEAM 23 GENERATIONS WITH THESE NOX GAS TURBINE SYSTEMS YOU HAVE LOST 24 THE OPPORTUNITY TO REDUCE THE NOX IN THE STATE OF CALIFORNIA. 25 SO YOU CANNOT HAVE IT A LITTLE TOO HIGH OR TOO LOW. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 YOU HAVE TO BE CAREFUL IN CONSIDERING THESE NUMBERS 2 SO THAT YOU LOOK AT BOTH ASPECTS OR LOSE THE OPPORTUNITY TO 3 REAP THE BENEFITS IN REPLACING THE EXISTING STEAM GENERATION. 4 THAT IS REALLY ALL THAT I HAVE PREPARED RIGHT NOW AND I WANT 5 TO THANK YOU FOR YOUR TIME AND I ENTERTAIN THE CLOSENESS THAT 6 WE HAD. 7 CHAIRMAN LLOYD: I WOULD LIKE TO COMMENTS ON THE 8 TIME FRAME, COMMERCIAL. 9 I WOULD LIKE YOU TO COMMENT ON THE PREVIOUS 10 SPEAKERS. 11 MR. SOLT: OH, ON THE RESTART AVAILABILITIES. 12 WELL, AGAIN WE WERE IN DISCUSSIONS WITH GENERAL 13 ELECTRIC THAT ARE COVERED BY CONFIDENTIALITY TREATMENTS, SO I 14 CANNOT REALLY TELL YOU SPECIFICALLY WHAT WE WERE TALKING 15 ABOUT WITH REGARDS TO GENERAL ELECTRIC. 16 WE HAVE A UNIT OPERATING TODAY THAT DOES NOT 17 CONSTITUTE COMMERCIAL AVAILABILITY, ACCORDING TO MATT HEATH, 18 DEFINITION WOULD NOT PASS AN ACHIEVEMENT PRACTICE THRESHOLD 19 IN SIX MONTHS TO CLEAN UP THIS OPERATION. 20 ALTHOUGH THAT IS THE PROGRESS, THE UNIT WILL EXCEED 21 IN SIX MONTHS QUITE QUICKLY AND SO THAT WILL BE AVAILABLE IN 22 THAT REGARD, BUT THE PRIMARY THING IS -- 23 CHAIRMAN LLOYD: YOU DON'T DISAGREE WITH THE 24 PREVIOUS SPEAKERS TIME FRAME? 25 MR. SOLT: I DISAGREE WITH IT, YES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 CAN I DO THAT? 2 ALL SHE SAID IT WAS NOT AVAILABLE FOR PRIME TIME 3 TODAY AND I'M NOT QUITE SURE WHAT THAT REALLY MEANS, YOU 4 COULD SAY. 5 CHAIRMAN LLOYD: I THINK SHE WAS A LITTLE BIT MORE 6 SPECIFIC IN TERMS THAT THE TIME THAT WOULD BE PRIME TIME. 7 MR. SOLT: YOU COULD SAY IF GE HAS A FOUR-YEAR BACK 8 LOG RIGHT NOW, WHICH IS WHAT THEY SAY, I WOULD SAY THAT IN MY 9 OPINION AND AGAIN I'M NOT THE GUY IN THE NEGOTIATION WITH GE 10 AND I'M NOT SURE WHAT GE TERMS ARE. 11 BUT FROM THE TERM MANUFACTURERS THAT I AM DEALING 12 WITH, IT APPEARS TO ME THAT YOU WOULD BE ABLE TO GET THE 13 TECHNOLOGY ON SOME OF THE UNITS IN THE BACK LOG. SO IT IS 14 THAT FAR ALONG. 15 SOME OF THE TURBINE MANUFACTURERS HAS BEEN WORKING 16 ON THIS FOR QUITE A WHILE AND ONE IS SCHEDULED FOR OPERATIONS 17 IN THE YEAR 2000. WE HAVE ONE THAT WE COULD SHIP THIS YEAR 18 YET, ON SMALLER TURBINES. 19 OUR TECHNOLOGY HAS TO BE DESIGNED INTO THE ENGINE, 20 IT DOESN'T GO INTO THE EXHAUST. IN THE CASE OF THE SCONOX 21 ANY UNIT THAT IS OUT THERE TODAY EXISTING AND ANY NEW SCR 22 DOES NOT INTERFERE WITH THIS OPERATION. WE HAVE TO DESIGN IN 23 THE TURBINE AND UNTIL THAT IS DONE IT IS NOT GOING TO BE 24 AVAILABLE. 25 CHAIRMAN LLOYD: AND WE ARE TALKING ABOUT YEARS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 TAKING A WHILE TO GET THE PLANTS LICENSED AND THE GAP IS NOT 2 AS GREAT AS WHAT IT MAY APPEAR. 3 MR. SOLT: YES. 4 CHAIRMAN LLOYD: QUESTIONS FROM THE BOARD? 5 THANK YOU VERY MUCH. AND I THANK ALL THOSE 6 SPEAKERS FOR KEEPING TO THE FIVE MINUTES. 7 WE HAVE JACK BRUTON FROM SEMPRA ENERGY. 8 MR. BRUNTON: CHAIRMAN LLOYD AND MEMBERS OF THE 9 BOARD, MY NAME IS JACK BRUNTON, AND I AM THE POLICY MANAGER 10 FOR ENVIRONMENTAL SAFETY FOR SEMPRA ENERGY. 11 SEMPRA ENERGY IS THE PARENT COMPANY OF THE SOUTHERN 12 CALIFORNIA GAS COMPANIES, SAN DIEGO GAS AND ELECTRIC AND 13 SEVERAL DEREGULATED BUSINESS UNITS INCLUDING SEMPRA ENERGY 14 RESOURCES. 15 SEMPRA RESOURCES IS PROPOSING TO BUILD ONE OR MORE 16 OF THE LARGE ENERGY PLANTS WITH THE BEST DEMONSTRATED CONTROL 17 TECHNOLOGY THAT THERE IS, AND WE ALSO TAKE COMPLIANCE VERY 18 SERIOUSLY. 19 I WOULD LIKE TO STRONGLY SUPPORT THE COMMENTS MADE 20 PREVIOUSLY BY GARY RUBENSTEIN WHO MADE PROBABLY MADE MORE 21 ADEQUATELY THE POINTS THAT WE HAVE CONCERNS ABOUT. THE ULTRA 22 LOW VOC LEVEL, THE UNPROVEN NEED FOR SUCH A LOW AMMONIA SLIP 23 LEVEL AND ESPECIALLY THE ABILITY AND NEED TO BE ABLE TO 24 RELIABLY AND PRECISELY MONITOR ALL OF THE LOW LEVELS THAT ARE 25 BEING PROPOSED. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 AS MR. SCHEIBLE SAID EARLIER WE HAVE TO COMPLY 2 CONTINUOUSLY OVER A WIDE RANGE OF DIFFERENT OPERATIONS. WE 3 ARE ALSO THE COMPANY THAT IS DEMONSTRATING THE 5 PPM NOX 4 LEVEL ON SIMPLE CYCLE TURBINES AND ARE AIR RICH PRESSURE 5 STATE IN SOUTHERN KERN COUNTY. 6 WE HAD INSTALLED A CATALYST THAT THE MANUFACTURER 7 WAS FOUND INCAPABLE OF MEETING 5 PPM AND WAS GUARANTEEING IT 8 AND THE CATALYST FAILED AND THE MANUFACTURER WENT BANKRUPT 9 AND WE ARE NOW TRYING TO DEMONSTRATE THIS 5 PPM WITH ANOTHER 10 TECHNOLOGY. 11 SO IT IS VERY IMPORTANT THAT WE NOT ONLY LISTEN TO 12 A TECHNOLOGY MANUFACTURER WORDS BUT THAT, THAT TECHNOLOGY 13 HAVE GONE THROUGH A SERIOUS DEMONSTRATED PRACTICE PROTOCOL 14 THAT REQUIRES IT TO MEET THE SAME LEVELS OF CONTROLS, 15 MONITORING, ET CETERA, THAT AN OPERATING POWER PLANT WOULD 16 HAVE TO MEET. 17 AND THAT IS ONE OF THE CONCERNS THAT WE REALLY 18 HAVE, AND IN A INTEREST OF TIME, I WILL DEFER ANY FURTHER 19 COMMENTS, WE HAVE BEEN ANTICIPATING THE PROCESS SINCE THE 20 BEGINNING AND HAVE SUBMITTED SOME WRITTEN COMMENTS. 21 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 22 ANY QUESTIONS FROM THE BOARD MEMBERS? 23 BOARD MEMBER EDGERTON: DO YOU, ALSO, THANK YOU FOR 24 YOUR COMMENTS, DO YOU ALSO HAVE POWER PLANTS THAT YOU ARE 25 PUTTING IN INTERNATIONALLY? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 MR. BRUNTON: AT THIS POINT AND TIME, OUR FOCUS 2 INTERNATIONALLY IS NATURAL GAS DISTRIBUTION SYSTEMS. 3 CHAIRMAN LLOYD: THANK YOU VERY MUCH. OUR NEXT 4 SPEAKER IS RICHARD SMITH, FROM THE MODESTO IRRIGATION 5 DISTRICT. 6 MR. SMITH: THANK YOU, MR. CHAIRMAN. THANK YOU, 7 BOARD. 8 THE MODESTO IRRIGATION DISTRICT AND ALL THE 9 ELECTRIC UTILITY OUT HERE IN CENTRAL CALIFORNIA WE CURRENTLY 10 OPERATE G E GAS TERMINAL PLANTS BUT ALSO BASICALLY LOADED 11 ELEMENT THOUSANDS FROM GE AERO DIRECTIVE PLANT. 12 WE HAVE A PERMITTED NOX LIMIT OF 3.5 PPM. WE HAVE 13 A AMMONIA SLIP THAT WE USE SCR TECHNOLOGY. OUR AMMONIA SLIP 14 LIMIT, IS PRETTY LIBERAL, AT 25 FEET IN. WE WERE PERMITTED 15 IN 1993, 1994, IN THAT TIME PERIOD. 16 ONE OF THE THINGS THAT WE DO THE MOST WITH OUR 17 PLANTS IS, AND ONE OF THE REASONS THAT WE RUN, IS WE DO WHAT 18 IS CALLED, LOAD FOLLOWING OR REGULATION. 19 THIS IS REAL NEED FOR ELECTRIC UTILITIES FOR 20 CALIFORNIA AND A REAL NEED FOR INDEPENDENT SYSTEM OPERATORS 21 IN CALIFORNIA VERSION OF THE WESTERN GRID OPERATOR. WHAT IT 22 DOES IS IT MATCHES THE ACTUAL NEED FOR ELECTRICITY THROUGHOUT 23 THE STATE AND IN LOCAL AREAS. 24 AND IF YOU DO NOT MATCH IN LOCAL AREAS YOU HAVE 25 POWER QUALITY ISSUES, YOU MIGHT FOR INSTANCE HAVE, VOLTAGE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 SUPPORT PROBLEMS ON YOUR GRID AND TRANSMISSION PROBLEMS WHERE 2 YOU CANNOT PROVIDE THE TRANSMISSION FROM ONE POINT TO 3 ANOTHER. 4 SO ALL UTILITIES NEED LOAD REGULATION. AND YOU CAN 5 DO THIS A NUMBER OF DIFFERENT WAYS, BUT ONE WAY IS WITH HYDRO 6 UNITS AND IT IS VERY SIMPLE. 7 YOU JUST RUN THEM UP AND DOWN PROVIDED, A, THAT YOU 8 HAVE WATER, AND B, THAT YOU DO NOT HAVE FISH FLOAT 9 REQUIREMENTS, LIKE ON ONE OF OUR HYDRO UNITS IN DON PEDRO 10 DOWN IN CENTRAL CALIFORNIA, WE HAVE FISH FLOW REQUIREMENTS 11 THROUGHOUT FROM TIME TO TIME AND THEN WE HAVE TO PROVIDE A 12 STATE MAX FLOW AFTER THAT OUT OF OUR HYDRO UNITS. 13 WHEN WE DO THIS WE USE OUR PLANS WHICH IS, DEALING 14 WITH 5,000 GAS TURBINES TO LOAD FALL. AND WE SIT AT ABOUT 40 15 MEGAWATTS OR 50 MEGAWATTS AND WE GO UP AND BETWEEN 30 AND 50 16 AS THE LOAD DEMANDS. 17 WHAT REALLY HAPPENS HERE AND IS A CONCERN TO US IS 18 THAT THE AMMONIA USE WITH THE AMMONIA SLIP REALLY VARIES WHEN 19 THE UNIT OPERATES IN THE TRANSITORY SITUATION LIKE THIS WHEN 20 YOU OPERATE UP AND DOWN. 21 OUR PERMITTED SLIP MAY GO FROM 8 PPM TO 12 TO 16 22 DOWN TO 8 IN A MATTER OF A HALF AN HOUR DEPENDING ON HOW WE 23 OPERATE THE UNIT. AND THE REASON THAT IT HAPPENS LIKE THAT 24 IS BECAUSE AS LOAD GOES UP, JUST STAY WITH ME A LITTLE BIT 25 HERE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 AS LOAD GOES UP YOU HAVE MORE NOX OUT OF THE 2 TURBINE AND THERE IS ABOUT A 1 TO 2 MINUTE RESPONSE TIME FOR 3 THE AMMONIA SYSTEM TO CATCH UP WITH THAT. AND AS THE LOAD 4 GOES DOWN THERE IS THE SAME TYPE OF RESPONSE TIME AND SO YOU 5 ARE INCREASING X AMOUNT OF AMMONIA AND THEN YOUR LOAD GOES 6 DOWN. 7 NOW YOUR NOX DROPS WITH THE TURBINE AND YOU HAVE 8 AMMONIA SLIP THAT IS BIGGER THAN IN THIS CASE THE 5 PPM THAT 9 YOU ARE PROPOSING. SECONDLY, OUR CATALYST MANUFACTURER 10 ENGLEHARDT, WE HAD A GUARANTEE OF 12 PPM FROM THEM AND THAT 11 WAS GOOD FOR THREE YEARS. 12 THEY DID NOT MEET THE GUARANTEE SO THEY CAME OUT 13 AND TOOK THE ENTIRE CATALYST OUT AND REMANUFACTURED IT, PUT 14 IT BACK IN AND MET THE GUARANTEE. 15 BUT OUR CONCERN IS, THAT WE HAVE SEEN NOW SINCE WE 16 HAVE OPERATED IN 1993 THAT THERE IS A STEADY DEGRADATION ON 17 THE SCR CATALYST PERFORMANCE. 18 AND COMBINED WITH THE LOAD FOLLOWING THAT WE LIKE 19 TO DO AND DEGRADATION, OUR ORIGINAL INTENT WAS TO REPLACE THE 20 CATALYST EVERY SEVEN YEARS AND THAT WAS HOW IT WAS BUILT TO 21 US FROM DIFFERENT MANUFACTURERS. SEVEN YEARS IS ABOUT THE 22 GOING RATE TO CHANGING OUT THE CATALYST. 23 WELL AT 5 PPM LIMIT, I AM TELLING YOU FROM AN 24 ACTUAL OPERATING EXPERIENCE FOR A USED LOAD FALL, ITS HARD 25 FOR YOU TO IMAGINE THAT YOU COULD BE IN SERVICE FOR THE YEAR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 AND MEET THAT LIMIT. 2 AND ANOTHER CONCERN OF MINE IS THE WAY THAT THE 3 CATALYST MANUFACTURERS PROVIDED THEIR GUARANTEE. ONE OF THE 4 THINGS THAT YOU WILL SEE IF YOU THROUGHOUT YOUR DOCUMENT IS 5 THAT THEY WRITE THEIR GUARANTEE LETTERS WITH NO STIPULATION 6 ON WHAT THE BACK PRESSURE IS FOR YOUR HRSG, WHAT THE LOSSES 7 ARE. 8 SO WHAT THAT ALLOWS THEM TO DO IS BASICALLY SAY WE 9 CAN MAKE OUR CATALYST AS BIG AS WE WANT WITH AS MUCH BACK 10 PRESSURE AS WE WANT AND IF YOU ARE JUST GOING TO COPY THE 11 OPERATORS MORE AND MORE BUT WE WILL STILL MEET THAT LIMIT. 12 IT IS ONLY AN ADVANTAGE TO THEM. IT IS NOT AN 13 ADVANTAGE ECONOMICALLY TO THE OPERATOR BECAUSE YOU ARE GOING 14 TO TAKE A HUGE HIT MAYBE TWO TO FIVE PERCENT EFFICIENCY DROP 15 DEPENDING ON HOW MUCH CATALYST THEY HAVE TO ADD. 16 AND LIKE THE MAN WAS PREVIOUSLY WAS SAYING, THE 17 CATALYST IS LIKE A GIANT SPONGE, THE MORE YOU HAVE OF IT THE 18 MORE YOU ARE ABLE TO TAKE OUT THE NOX BUT ADDITIONALLY THE 19 MORE IT STACKS ON THE BLOCKAGE TO YOUR EXHAUST FLOW, WHICH ON 20 GAS TURBINES IS A BIG IMPACT ON PERFORMANCE AND EFFICIENCY. 21 SO IN OTHER WORDS, YOU ARE USING MORE FUEL AND YOU 22 ARE WASTING A NATURAL RESOURCE THERE TO. SO AS AN OPERATOR, 23 WHAT WE WOULD LIKE TO SEE IN THE LANGUAGE FROM THE AIR 24 RESOURCES BOARD IS SOME FLEXIBILITY FOR UNITS THAT LOAD 25 FOLLOW LIKE WE DO. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 RIGHT NOW WE HAVE LANGUAGE IN THERE THAT REFLECTS 2 THE START UP AND SHUT DOWN TRANSITORY SITUATIONS BUT DOES NOT 3 ALLOW FOR LOAD FOLLOWING THROUGHOUT THE DAY. SO IF WE ARE 4 GOING TO KEEP THIS LIMIT OF 5 PPM IT WOULD BE ONLY FOR BASE 5 LOADED PLANTS THAT ARE TESTED AT BASE LOAD CONDITIONS BECAUSE 6 IT CANNOT BE ACHIEVED FROM MY POINT OF VIEW IN PRACTICE WITH 7 SCR. 8 CHAIRMAN LLOYD: DID YOU PASS THOSE COMMENTS ON TO 9 STAFF? 10 MR. SMITH: WE BROUGHT THOSE ISSUE BACK ON THE 11 APRIL 23 MEETING. 12 MR. TOLLSTRUP: I WOULD JUST LIKE TO SAY THAT THE 13 GUIDANCE THAT WE HAVE IS NOT MEANT TO APPLY TO THAT FOR THE 14 NEW SYSTEMS. 15 THEY ARE MEANT FOR THE SYSTEMS THAT ARE BEING 16 DESIGNED. 17 MR. SMITH: WE ARE LOOKING AT ANOTHER ALLEN 6,000 18 PLANT INTENTIONALLY IN THE FUTURE, VERY SIMILAR TO OUR 5,000 19 PLANT IN LOAD. AND WE WOULD LIKE TO OPERATE IN A SIMILAR WAY 20 IN A LOAD FOLLOWING REGULATION WAY, AND I DISAGREE WITH YOU 21 THAT YOU HAVE LOOKED INTO THE SITUATION OF LOAD FOLLOWING 22 WITH SCR AND CATALYST. 23 I DO NOT SEE ANYBODY THAT HAS REALLY STUDIED THAT 24 AND YOU HAVE TO UNDERSTAND HOW THE AMMONIA IS INJECTED, IT 25 FOLLOWS THE LOAD BUT THERE IS NO WAY IT CAN KEEP UP AS EXACT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 AS 5 PPM IN MY OPINION BASED ON WHAT I HAVE SEEN IN THE 2 CIRCUIT. 3 MR. TOLLSTRUP: WHAT WE HAVE SEEN AND ARE 4 RECOMMENDING IN THE MERCHANT PLANTS LOOKING AT HERE ALL 5 OPERATE HERE IN A SIMILAR FASHION THAT GO UP AND DOWN AND 6 LOW, AND WE HAVE THE GUARANTEES FROM THE MANUFACTURERS WITH 7 OTHERS THAT THEY CAN MEET THESE ON THE NEW DESIGN SYSTEM AND 8 ITS DESIGNS. 9 CHAIRMAN LLOYD: IT IS BETTER THAN THE CATALYST 10 MANUFACTURER IN TERMS OF THEIR WARRANTIES. 11 MR. SMITH: THAT IS TRUE BUT IT IS GOOD TO PUSH FOR 12 THE SEVEN OR EIGHT YEAR WARRANTY AND THAT MAKES A BIG 13 DIFFERENCE. 14 CHAIRMAN LLOYD: THANK YOU VERY MUCH FOR THOSE 15 COMMENTS. 16 OUR LAST PERSON TO TESTIFY THIS AFTERNOON IS ANDREW 17 WASHINGTON, FROM OGDEN ENERGY. 18 MR. WASHINGTON: THANK YOU, MR. CHAIRMAN AND 19 MEMBERS OF THE BOARD. 20 I AM ANDREW WASHINGTON, FROM OGDEN ENERGY, AND I AM 21 THE PLANT DEVELOPER, AND WE HAVE A PROJECT IN BARNEY MOUNTAIN 22 IN THE CALIFORNIA AREA, IN FREMONT AND I'M HERE TODAY AND I 23 HAVE JUST A FEW COMMENTS AND I GUESS SOME QUESTIONS AND 24 CLARIFICATIONS TO GET ON THE DRAFT DOCUMENT. 25 BASICALLY WE ARE CONCERNED, WE HAVE HEARD TODAY AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 READ WHAT THE DOCUMENTS AND THIS IS GUIDANCE AND WE JUST WANT 2 TO MAKE SURE THAT THIS DID DOES NOT BECOME LATER DOWN THE 3 ROAD AS REGULATION. 4 MY FIRST COMMENT WAS ALREADY MENTIONED BRIEFLY AND 5 THAT WAS ABOUT THIS BEING AN ONGOING DOCUMENT, IN THAT SENSE, 6 RATHER THAN STATING A PARTICULAR NUMBER FOR FACTS, AND I 7 UNDERSTAND THAT THERE IS A PACKING CLEARING HOUSE WHERE A LOT 8 CAN BE BROUGHT OUT AND THE LOCAL DISTRICT, AND THE 9 DETERMINATION OF THIS, LET'S JUST STATE THAT WILL BE DONE ON 10 THE TOP DOWN BASIS RATHER THAN GOING THROUGH THE ARGUMENTS IN 11 THE DOCUMENT OF WHAT THE ACTUAL NUMBER WILL BE. 12 MY SECOND POINT IS ON IS THE SOX AND THE PM BACT 13 NUMBERS, THAT SAYS THAT THE ANCESTORS APPLIED BY OUR 14 REGULATED ENTITY IS CLEAR TO US THAT IT CAN ONLY BE SUPPLIED 15 BY SOUTHERN CALIFORNIA GAS OR PACIFIC GAS AND ELECTRIC OR IT 16 CAN BE BY GAS MARKETER OR SOME OTHER PIPELINE. 17 THE THIRD POINT I HAVE IS ON THE LIMITS OF START UP 18 AND SHUT DOWNS AND THE LANGUAGE LIMIT SUGGESTS THAT WE WOULD 19 LIMIT THE NUMBER OF START UP AND SHUT DOWNS PPM AND THAT 20 WOULD DETER FROM THE CURRENT ABILITY OF THESE FACILITIES 21 RATHER THAN PUTTING A CAP ON THE NUMBER OF STARTUPS AND 22 SHUTDOWNS, I THINK THE SAME CONTROLS COULD BE ACCOMPLISHED BY 23 JUST PUTTING THE LIMIT OF TOTAL AMOUNT OF TONS PER YEAR. 24 THAT IS THE EXTENT OF MY COMMENTS, AND I WOULD LIKE 25 TO HEAR FROM THE STAFF. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 2 STAFF WOULD YOU LIKE TO COMMENT? 3 MR. VENTURINI: YES, LET ME CLARIFY A COUPLE OF 4 THINGS. 5 THIS IS A GUIDANCE THAT YOU SAID EARLIER THAT THE 6 DISTRICT MAKES A FINAL BACT DECISION. 7 WITH RESPECT TO THE BACT CLEARINGHOUSE THAT WAS 8 ESTABLISHED SOMETIME AGO, AND THE PURPOSE OF THAT 9 CLEARINGHOUSE IS, ONCE THE DISTRICT HAVE MADE MASS DECISIONS 10 FOR A VARIETY OF CATEGORY SOURCES, AND THEY TRANSMIT IT TO US 11 AND PUT IT IN THE CLEARINGHOUSE TO MAKE IT AVAILABLE FOR USE 12 BY OTHER DISTRICTS AND OTHER INDIVIDUALS. 13 I WILL LET MR. TOLLSTRUP RESPOND TO THE NATURAL GAS 14 AND THE STARTUP, SHUT DOWN THAT I THINK THAT WE DID EARLIER. 15 MR. TOLLSTRUP: AS FAR AS FUEL GAS GOES WE DO 16 MENTION IN THE DOCUMENT THAT THESE SUPPLIED BY REGULATED 17 ENTITY AND WHAT WE ARE TRYING TO DO THERE IS NOT A 18 REQUIREMENT BUT WE WANT TO MAKE SURE THEY HAVE A CONSISTENT 19 SUPPLY OF FUEL THAT THEY ARE NOT ADDING FUEL GAS FOR 20 SOMETHING IN THERE THAT SHOULD NOT BE THERE BUT THAT THEY 21 HAVE A CLEAN SUPPLY OF NATURAL GAS. 22 IT IS NOT AN ISSUE OF WHERE BUT THEY ARE GETTING IT 23 FROM AS LONG AS THEY ARE GUARANTEED A CONSISTENT SUPPLY OF 24 FUEL FOR THIS PROJECT. AS FAR AS STARTUP AND SHUTDOWN ON THE 25 UNIT THAT IS THE ISSUE FOR THE DISTRICT TO ADDRESS AND THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 THE GUIDANCE IS CLEAR, THERE IS A REAL ISSUE ON THESE 2 PROJECTS AND THEY JUST NEED TO GET A HANDLE ON A NUMBER OF 3 STARTUP AND SHUTDOWNS BECAUSE IT HAS THE SAME EMISSIONS AND 4 ENFORCEABLE CONDITIONS TO MONITOR THAT IN OUR PERMITS. 5 BOARD MEMBER CALHOUN: I GUESS I DID NOT HEAR, THE 6 QUALITY OF STATEMENT ABOUT THIS PLAN TO DEREGULATE IT, AND 7 YOU CHOSE TO EXPLAIN WHY YOU DECIDED THAT YOU HAD SOME 8 CONCERNS THAT YOU WOULD ADDRESS, MR. WASHINGTON, AND 9 INVESTIGATE THAT AGAIN. 10 MR. TOLLSTRUP: WHEN WE EVALUATED THE CONTROLS FOR 11 THE VARIOUS POLLUTANTS, AND PARTICULARLY WITH SOX AND PM 10, 12 ONE OF THE RECOMMENDATIONS IS THAT THE FUEL GAS, A NATURAL 13 GAS THAT IS SUPPLIED, HAVE A SULFUR CONTENT NO MORE THAN ONE 14 GRAIN PER SQUARE FOOT. 15 THEY HAVE TO HAVE A SUPPLIER THAT IS WILLING TO 16 SUPPLY SO THAT THEY WILL CONTINUOUSLY MEET IT AS SET ON THE 17 PERMIT. 18 WE PUT REGULATED ENTITIES IN THERE, AND THERE MAY 19 BE OTHER ENTITIES IN WHICH THEY CAN GET THE FUEL FROM. 20 WE ARE TRYING TO CLARIFY THEY NEED TO GET A FIRM 21 COMMITMENT ON THE FUEL AS REFLECTED ON THE PERMIT AS AN 22 ENFORCEABILITY CONDITION. 23 MR. WASHINGTON: IN THE SUMMARY PAGE THERE, IT 24 SAYS -- AND THEY GO AS FAR -- AND IT SAYS, REGULATED BY THE 25 PUBLIC UTILITIES COMMISSION. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 IF THAT IS JUST A SUGGESTION OR OPTION, THAT IS 2 FINE. 3 MR. TOLLSTRUP: THAT IS JUST A SUGGESTION. 4 IT IS NOT A REQUIREMENT. IT IS THE RECOMMENDATION 5 OF STAFF. WE ARE NOT AWARE OF OTHER PEOPLE'S -- THAT THEY 6 ARE NOT OUT THERE, WE ARE NOT SAYING YOU CANNOT USE. WE JUST 7 WANT TO MAKE SURE IT IS FIELD SUPPLY AND ON THE PERMIT. 8 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 9 ARE THERE ANY OTHER WRITTEN COMMENTS SUBMITTED FOR 10 THE RECORD? 11 MR. MENEBROKER: WE HAVE SEVERAL LETTERS HERE. 12 CHAIRMAN LLOYD: ARE THESE SEPARATE TO THE 13 TESTIMONY? 14 MR. MENEBROKER: YES. 15 THESE ARE LETTERS THAT HAVE BEEN SUBMITTED THAT DID 16 NOT GET TESTIFIED TO, AND I WILL NOT REPEAT ANYTHING THAT WE 17 HAVE DISCUSSED TODAY. 18 WE RECEIVED ONE FROM THE COALITION OF CLEAN AIR 19 THAT WAS GENERALLY SUPPORTIVE AND TALKED ABOUT THE BACT 20 ISSUE, WHICH HAS ALREADY BEEN ADDRESSED. 21 THERE IS THE ENGLEHARDT LETTER IN WHICH MS. 22 EDGERTON REFERRED TO EARLIER, AND HIGH DESERT POWER PLANT 23 SUBMITTED A LETTER THAT HAD SEVERAL ISSUES THAT HAD BEEN 24 DISCUSSED, AND THEY HAD TWO ADDITIONAL ONES. 25 ONE THEY HAD A LESS ANNUAL SOURCE TEST ABILITY TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 GO WITH LESS SOURCE TEST IF THEY COULD SHOW AFTER THE INITIAL 2 FIRST FEW YEARS THAT THE LIMITED VARIABILITY, AND BASICALLY 3 THERE IS NOTHING IN OUR DOCUMENTS OR THE DISTRICT REGS THAT 4 WOULD PREVENT THAT FROM OCCURRING AFTER A FEW YEARS HOW THAT 5 COULD BE DONE. 6 THEY DISAGREE WITH THE SITING OFFSETS RATIOS IN THE 7 GUIDANCE. WE FEEL THERE IS A DEFINITE NEED THERE BECAUSE A 8 LOT OF MAJOR ISSUES THAT COME UP. 9 THE LA DEPARTMENT OF WATER AND POWER SUBMITTED A 10 LETTER. THEY REQUESTED THE GUIDANCE CLARIFY AND NOT TO JUST 11 BE USED TO RECLAIM. THERE IS NOT ON OUR PART TO HAVE THIS 12 REPLACE THIS REQUIREMENT OF THE PROGRAM. 13 THEY REQUEST BACT FOR PM 10 AND SO2 TO BE REVISED 14 TO REFLECT USAGE OF NATURAL GAS. I THINK MIKE COVERED THAT. 15 THAT WOULD BE UP TO FIVE GRAINS BACT TO ONE GRAIN. 16 THERE IS THE LETTER FROM MONTEREY BAY UNIFIED APPD, 17 AND THEY WANTED US TO INVESTIGATE THE AMBIENT AIR QUALITY 18 ISSUES SUCH AS DOWNWIND AND FEEL THAT THAT IS BETTER HANDLED 19 THROUGH THE PROCESS, THROUGH THE GUIDANCE PROCESS. 20 THEY SAY THERE IS NO JUSTIFICATION FOR THE SURVEY 21 NOX RATIO, AND IT SHOULD NOT BE RECOMMENDED. THAT IS THE 22 SAME ISSUE THAT WE HAD EARLIER, AND WE FEEL IT SHOULD BE. 23 PGE GENERATING COMPANY IS IN GENERAL AGREEMENT WITH 24 THE GUIDANCE, AND THEY AGREE THAT THOSE NOX AND VOCS THAT ARE 25 DEMONSTRATED. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 SAN LUIS OBISPO COUNTY APC GENERALLY SUPPORTS OUR 2 GUIDANCE AND THE ARB'S GUIDANCE IS INVALUABLE. 3 SMUD WANTS THE GUIDANCE AND SUPPORTS FACILITY WIDE 4 LIMITS, SO LET'S NOT DISCOURAGE THEM. 5 IN OUR DOCUMENTS WE DO SAY THAT WE NEED FACILITY 6 WIDE LIMITS THAT HAVE TO BE ENFORCEABLE, AND IT IS DIFFICULT 7 TO WRITE SUCH PERMITS BUT NOTHING PROHIBITS. 8 SUNRISE COGEN AND POWER COMPANY HAD A LETTER WITH 9 ALL THE ISSUES RAISED THAT HAVE BEEN DISCUSSED TODAY, AND I 10 THINK MAYBE PGE GENERATING COMPANY HAD A GENERAL AGREEMENT 11 WITH THE GUIDANCE AND HAD A FEW OTHER ISSUES THAT HAD BEEN 12 COVERED. 13 THEY ARE URGING ARB TO INCREASE THE ROLE IN 14 ESTABLISHING OFFSET RATIOS. 15 WE HAD A LETTER FROM THE US EPA THAT ENCOURAGES THE 16 BOARD TO ADOPT THE GUIDANCE, AND IT CONSISTS OF COMMENTS TO 17 THE DISTRICT DURING THE PERMITTING ACTIONS IN RECENT PAST AS 18 WELL AS THE CURRENT APPLICATIONS. 19 THERE ARE TWO ITEMS THAT THEY DISCUSSED THAT THEY 20 AGREED WITH THE GUIDANCE FOR NOX, WHICH IS 2.5 PER HOUR OR 2 21 TO 3 HOURS, AND THEY ALSO AGREE WITH OFFSETS. 22 WE RECEIVED ALSO A LETTER FROM THE GAS TURBINE 23 ASSOCIATION, AND THERE ARE ISSUES RAISED RIGHT THERE THAT 24 HAVE BEEN DISCUSSED ALREADY. 25 MR. SCHEIBLE: MR. CHAIRMAN, I JUST WANT TO CLARIFY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 SOMETHING. I DO NOT KNOW IF I HEARD THAT RIGHT. 2 I THINK WE HAVE TO CHARACTERIZE THE CLAUSE OF THE 3 CLEAN AIR NRNADC AS NOT SUPPORTIVE OF THE NOX DETERMINATION. 4 THEY ARE SUGGESTING THAT WE SHOULD SAVE TECHNOLOGY WITH A 5 ZERO AMMONIA EMISSION AND REPRESENT THE BACT FOR NOX. 6 CHAIRMAN LLOYD: I WAS GOING TO ASK THE QUESTION, 7 AND I WAS AWARE OF THE LETTER, AND I THINK IT WAS WISHFUL 8 THINKING. 9 MR. SCHEIBLE: IT HAS BEEN A LONG DAY. 10 CHAIRMAN LLOYD: THANK YOU. 11 MR. KENNY, DO YOU HAVE ANY COMMENTS? 12 MR. KENNY: IF I COULD ADD JUST A COUPLE MORE 13 COMMENTS. 14 ALTHOUGH IT HAS BEEN A LONG DAY ON THIS ISSUE, I DO 15 THINK IT HAS BEEN VERY INTERESTING AND VERY FASCINATING. IT 16 WAS NOT ALL THAT LONG AGO THAT WE WERE TALKING ABOUT 17 DOUBLE-DIGIT NUMBERS WITH REGARDS TO NOX LIKE THIS, AND I 18 THINK THAT IT IS KIND OF FASCINATING TO SORT OF LISTEN TO THE 19 TESTIMONY GO ON TODAY AND TO HEAR PEOPLE TALKING ABOUT 20 SINGLE-DIGIT NUMBERS THROUGHOUT THE DISCUSSION. 21 WHAT WE ARE TALKING ABOUT ARE THINGS THAT REALLY 22 AIM TOWARD WHAT YOU TALKED ABOUT NOT THAT LONG AGO, WHICH IS 23 ZERO AND NEAR ZERO TECHNOLOGIES, AND I THINK WHEN YOU LOOK AT 24 THAT AND COMBINE WITH ALL THE POWER PLANTS THAT ARE BEING 25 CONSIDERED FOR SITING IN CALIFORNIA, IT IS ACTUALLY VERY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 ENCOURAGING. 2 WITH THAT IN MIND, I DO RECOMMEND THAT THE BOARD 3 ADOPT THE GUIDANCE. 4 CHAIRMAN LLOYD: I WOULD LIKE TO SAY A COUPLE OF 5 COMMENTS FOLLOWING UP ON MR. KENNY. 6 I THINK THAT AGAIN AS WE HAVE SEEN THE EMISSION 7 CONTROLS FOR THESE GAS POWER PLANTS WILL CONTINUE TO BE 8 INVOLVED IN, AND CLEARLY WHAT WE SEE HERE NOW IS HOW BACT HAS 9 CHANGED SIGNIFICANTLY, AND WILL IN THE FUTURE, AND WE WANT TO 10 BE APPRISED OF THAT, SO I WOULD REQUEST IN THE RESOLUTION 11 THAT THE STAFF ACTUALLY KEEP US INFORMED OF EXACTLY WHAT IS 12 GOING ON. 13 IT IS A FASCINATING FIELD, AND AGAIN IT IS 14 DELIGHTFUL TO SEE THE TECHNOLOGIES AS THEY ARE GOING ON AND 15 NOW COMPETING AND GETTING DOWN TO LOW NUMBERS AND IN SOME 16 CASES DEALS WITH DIFFERENCES OF .5 PPMS. 17 I WOULD ALSO LIKE TO ASK STAFF THAT IF THEY COULD 18 EXPLORE MECHANISMS OF WHICH WE COULD ENCOURAGE THESE 19 NON-AMMONIA TECHNOLOGIES INTO THE FIELDS. 20 I'M FULLY CONCERNED ABOUT THE SCALE OF THE ISSUES 21 BUT IT HAS MADE ITS WAY IN WHICH WE CAN MAKE SURE FOR SOME OF 22 THESE POWER THINGS THAT WE DO NOT HAVE THE SAME CONCERNS 23 ABOUT HOW WE ENCOURAGE THEM TO GET NON-AMMONIA IN THERE, AND 24 I WOULD LIKE TO SEE THE STAFF TO SEE WHAT MECHANISMS WOULD BE 25 UTILIZED, AND AGAIN, I THINK THAT THAT IS VERY, VERY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 EXCITING. 2 THESE ARE THINGS THAT TYPICAL TECHNOLOGY ENCOURAGES 3 OUT THERE ALONG WITH THE SCR. 4 AGAIN, ONE OF THE COMMENTS THAT I WOULD LIKE TO 5 MAKE, OR I WOULD WAIT FOR THE BOARD MEMBERS TO MAKE COMMENTS, 6 THAT WE SET A TIME FOR STAFF TO COME BACK TO US WITH AN 7 UPDATE OF WHERE WE STAND WITH THESE TECHNOLOGIES AND MODIFY 8 THINGS AS NECESSARY. 9 SO, ON THE OTHER HAND, I WILL LEAVE IT OPEN. 10 BOARD MEMBER CALHOUN: MR. CHAIRMAN AND MEMBERS OF 11 THE BOARD, THIS IS A GUIDANCE DOCUMENT AND THAT IS WHAT IT 12 IS. 13 IT IS NOT A REGULATION, AND I VIEW IT AS A LIVING 14 DOCUMENT, AND THE STAFF IS CONSISTENT WITH THE ACTION TAKEN 15 IN THE PAST WHENEVER THEY OBSERVE THAT SOME CHANGES SHOULD BE 16 MADE, THEY ALWAYS COME BACK TO THE BOARD, AND I'M PREPARED TO 17 SUPPORT THE STAFF RECOMMENDATION AND MOVE THE DOCUMENT AND 18 ITEM ALONG. 19 BOARD MEMBER RIORDAN: LET ME SECOND MR. CALHOUN'S 20 MOTION -- 21 BOARD MEMBER EDGERTON: SUBSTITUTE MOTION, MR. 22 CHAIRMAN. 23 I WOULD LIKE TO MOVE THAT THE DOCUMENT, THE 24 GUIDANCE, TO BE AMENDED AS WAS PROPOSED BY GOAL LINE 25 TECHNOLOGY. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 I RECOGNIZE THAT THE COMMENTS THAT WERE MADE BY 2 REPRESENTATIVES OF CATALYTICA REALLY TO GO TO THE HEART OF 3 THE ISSUE THAT THE STAFF IS STRUGGLING WITH, AND THE BOARD IS 4 STRUGGLING WITH, IS YOU DON'T WANT TO SET THIS, YOU DO NOT 5 WANT TO RECOMMEND A TECHNOLOGY THAT IS NOT QUITE READY AND 6 WILL DAMPEN THE ENTHUSIASM FOR PROPOSING CLEAN PLANTS IN 7 CALIFORNIA. 8 ON THE OTHER HAND, YOU DO NOT WANT TO HAVE A 9 GUIDANCE THAT FAILS TO RECOGNIZE THAT THERE ARE TECHNOLOGIES 10 THAT ARE REACHING VERY, VERY PROTECTIVE STANDARDS. 11 SO, THAT IS WHY I WOULD LIKE TO MOVE THAT WE MAKE 12 THAT CHANGE. I DO IT MINDFUL OF THAT I BELIEVE THAT UNDER 13 EPA GUIDANCE THAT APPLIES TO US AS DELEGATED THAT A PERMIT 14 ISSUE WILL BEAR A HEAVY BURDEN, IF JUSTIFIED, IF IT CHOOSES 15 NOT TO REQUIRE THE APPLICATION OF THE MOST ENVIRONMENTALLY 16 PROTECTIVE TECHNOLOGY. 17 I AM CONCERNED THAT THE PERMIT ISSUING AGENCY UNDER 18 THIS GUIDANCE MIGHT ELIMINATE THE TECHNOLOGY FOR 19 CONSIDERATION, IN FACT, WHICH HAS BEEN LICENSED AND 20 COMMERCIALLY AVAILABLE AND HAS BEEN OPERATING FULL SCALE FOR 21 TWO YEARS, WHICH IS, IN FACT, WHAT WE HAVE SEEN AT SCONOX. 22 I APPRECIATE THAT THE SCONOX PLANT DOWN IN VERNON, 23 I APPRECIATE THE CONCERNS ABOUT WHETHER IT HAS BEEN OPERATING 24 AT COMMERCIAL SCALE, AND WITH CONSIDERABLE HUMILITY I MAKE 25 THIS MOTION, BECAUSE I CERTAINLY UNDERSTAND THE CONCERNS THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 ARE RAISED. 2 ON THE OTHER HAND, UNDER EPA REGULATION AND 3 GUIDELINES AS I UNDERSTAND THEM, THE SIZE OF THE INSTALLATION 4 SHOULD NOT BE DETERMINED IN THE DETERMINATION, AND IT HAS THE 5 CHARACTERISTICS OF THE EXHAUST GASES AND THE SIZE OF THE UNIT 6 WHICH SHOULD DETERMINE THE APPLICABLE AVAILABILITY. 7 FINALLY, I THINK THAT WE AS INDIVIDUALS WHO ARE 8 APPOINTED TO IMPLEMENT THE CLEAN AIR ACT AND THE EPA 9 REGULATIONS AND STATE CLEAN AIR HAVE THE OBLIGATION TO 10 IMPLEMENT WHAT SENATOR MUSKY INTENDED IN THIS CLEAN AIR ACT, 11 WHICH WAS THAT THESE DETERMINATIONS BE TECHNOLOGY-FORCING IN 12 SOME MEASURES. 13 SO, I AM TIPPED IN THE DIRECTION OF MAKING THIS 14 MOTION WITH THE UNDERSTANDING THAT IT PROBABLY WILL NOT PASS, 15 THAT THE GUIDANCE WILL PASS, BUT I DO WANT TO GO ON THE 16 RECORD SAYING THAT I THOUGHT THAT THE SPIRIT OF WHAT SHOULD 17 BE REQUIRED HAS BEEN MET. 18 IS THERE A SECOND? 19 CHAIRMAN LLOYD: SECOND OF THE MOTION? 20 BOARD MEMBER EDGERTON: ALTERNATIVELY, I WOULD LIKE 21 TO ASK TO MOVE IN A FRIENDLY AMENDMENT THAT THE STAFF REVISIT 22 THIS AND COME BACK TO THE BOARD IN SIX MONTHS, BECAUSE THIS 23 IS SUCH A DYNAMIC AREA, AND IF THEY FIND THAT THERE ARE 24 IMPROVEMENTS AND THEY FEEL MORE COMFORTABLE WITH THE SCALE UP 25 WITH THE TECHNOLOGY, THAT YOU COME BACK TO US AND LET US KNOW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 HOW IT IS GOING. 2 THE CONCERN THAT I HAVE HERE IS THAT SO MANY BIG 3 PLANTS ARE GOING ON-LINE NOW AND THEY ARE BEING PLANNED NOW 4 AND THERE ARE A TREMENDOUS AMOUNT OF DOLLARS GOING IN TO 5 PUTTING THEM ON-LINE NOW, AND WHATEVER TECHNOLOGY IS CHOSEN 6 NOW MAY BE DIFFICULT TO -- MAYBE THEY WILL NOT BE BUILDING 7 MORE PLANTS LATER, SO WE WANT TO BE SURE THAT AS THESE GO 8 ALONG WE CAPTURE ALL THE BENEFITS THAT WE CAN FOR CALIFORNIA. 9 OR WILL YOU HAVE A SECOND, A FRIENDLY AMENDMENT? 10 BOARD MEMBER CALHOUN: YES. 11 BOARD MEMBER RIORDAN: AND AS THE SECONDER OF THE 12 MOTION, I NEED TO ASK FOR A LITTLE BIT OF CLARIFICATION. 13 WHEN YOU SAY YOU ARE GOING TO BRING IT BACK TO THE 14 STAFF, DO YOU BRING IT BACK TO THE BOARD IN THE FORM OF A 15 REPORT? 16 WHAT DO YOU ENVISION THERE? 17 I AM SURE THAT THE STAFF WILL REPORT BACK TO US ON 18 WHAT HAS BEEN DEVELOPING IN THE FIELD AND THAT IF THE STAFF 19 BELIEVES THAT IT IS TIME TO MAKE CHANGES ONE WAY OR THE 20 OTHER, THE STAFF WILL SAY SO. 21 BOARD MEMBER EDGERTON: I WILL NOT PREJUDGE WHAT 22 THE STAFF MIGHT SAY. THE STAFF MIGHT COME BACK AND MAKE A 23 REPORT AND SAY THIS IS WHERE WE THINK WE SHOULD BE STAYING. 24 BOARD MEMBER RIORDAN: AND I WOULD SUPPORT THAT AND 25 ACCEPT THAT, BECAUSE MY CONCERN WAS THAT IT SHOULD BE IN THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 FORM OF A REPORT, JUST AS YOU SAID AND NOT SOMETHING THAT 2 NECESSARILY THAT WAS CALENDARED FOR A REHEARING OF PERHAPS 3 WHAT WE HAVE HEARD TODAY OVER AGAIN. 4 SO, WITH THAT, I WOULD CERTAINLY ACCEPT THAT. 5 BOARD MEMBER EDGERTON: JUST MAKE SURE THAT I 6 UNDERSTAND THAT, IF THERE ARE CHANGES, I WOULD EXPECT THAT 7 THERE WOULD BE CHANGES PROPOSED. 8 IF THEY DO COME TO THE CONCLUSION THAT THERE HAVE 9 BEEN CHANGES IN SIX MONTHS, I WOULD EXPECT THAT WE WOULD HAVE 10 ANOTHER HEARING WHICH WOULD PROVIDE THE NEW INFORMATION. 11 BOARD MEMBER RIORDAN: THAT WOULD GO WITHOUT 12 SAYING, BUT IF THERE IS NO NEED FOR THAT, THEN WE DO NOT NEED 13 TO REHEAR IT. 14 CHAIRMAN LLOYD: DOES EVERYONE UNDERSTAND? 15 MR. KENNY: WE UNDERSTAND PERFECTLY. 16 CHAIRMAN LLOYD: I HAVE A MOTION AND SECOND. 17 AFTER FURTHER RESOLVE THAT THE BOARD DIRECT STAFF 18 TO EVALUATE THE NEED FOR MODIFICATION UPDATES SO THAT THE 19 GUIDANCE INVEST IN BEST AVAILABLE CONTROL AND TECHNOLOGY AND 20 AS INFORMATION BECOMES AVAILABLE TO IMPROVE MODIFICATION 21 UPDATE THROUGH THE EXECUTIVE OFFICER. 22 IT IS FURTHER RESOLVED THAT BOARD DIRECT STAFF TO 23 REPORT BACK TO THE BOARD WITH ANY MODIFICATION UPDATES AND 24 ITEMS FOR POWER PLANTS THAT ARE INVESTED ON THE BOARD OF 25 TECHNOLOGY ON THE PERIODIC BASIS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 THE FIRST UPDATE SHOULD OCCUR WITHIN SIX MONTHS OR 2 SOONER IF CIRCUMSTANCES REQUIRE AS OF THE DATE OF THIS 3 RESOLUTION. 4 SO, IF ANYTHING HAPPENS WITHIN SIX MONTHS, WE WILL 5 HEAR ABOUT THAT. I HAD ORIGINALLY HAD TWELVE MONTHS, BUT I 6 LOWERED IT TO SIX MONTHS. 7 MR. KENNY: THE ONLY CLARIFICATION I CAN SAY IS AS 8 WE GET TO THE SIX-MONTH PERIOD, IF IT IS NOT APPROPRIATE TO 9 UPDATE, THEN WE REPORT TO THE BOARD BUT NOT NECESSARILY 10 UPDATE. 11 CHAIRMAN LLOYD: CORRECT. 12 I THINK MATT HAS SOMETHING. 13 BOARD MEMBER MCKINNON: YES. 14 IF I COULD, MR. CHAIR, THANK YOU. 15 I GUESS I WOULD LIKE TO START OUT KIND OF WITH 16 PERSPECTIVE. THE PERSPECTIVE HERE IS THAT IN CALIFORNIA WE 17 ARE GOING TO GET A GREAT NUMBER OF NEW POWER PLANTS, AND THIS 18 STAFF AND THIS BOARD MOVED VERY QUICKLY TO HELP GET GUIDANCE 19 TOGETHER SO THAT THAT COULD BE DEALT WITH, AND I THINK THAT 20 THAT PERSPECTIVE HAS TO BE TALKED ABOUT. 21 I THINK THAT CERTAINLY IT IS A DYNAMIC PROCESS, AND 22 THERE IS A LOT TO BE WATCHED ALONG THE WAY. I THINK WE HAVE 23 JUST KIND OF DEALT WITH THAT, AND THAT IS IMPORTANT. 24 IT IS, HOWEVER, IT IS A REGULATION IN STONE, BUT 25 ONE OF THE THINGS THAT WAS A CONCERN ALONG THE WAY TO A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 NUMBER OF FOLKS, AND I SHOULD PROBABLY DISCLOSE, AND IT IS 2 NOT REGULATION, AND I WILL DISCLOSE IT ANYWAY, I DID HAVE A 3 VERY, VERY BRIEF EX PARTE CONVERSATION WITH LIZANNE REYNOLDS 4 FROM THE CALIFORNIA UNIONS FOR RELIABLE ENERGY, AND 5 EVERYTHING THAT SHE AND I COVERED IN THAT TWO OR THREE 6 SENTENCES, SHE COVERED IN HER PRESENTATION, HOWEVER BRIEF HER 7 PRESENTATION WAS. 8 SHE LED THE WAY OF SHOWING THE CHAIRMAN'S RESPECT 9 FOR THE FIVE MINUTE TIME LIMIT. 10 BOARD MEMBER DESAULNIER: YOURS IS ALMOST UP, MATT. 11 BOARD MEMBER MCKINNON: I WANT TO AMEND CONTRA 12 COSTA COUNTY'S -- NO, I AM JUST JOKING. 13 WHAT I AM PROPOSING IS THAT AN AMENDMENT IN THE 14 GUIDANCE DOCUMENT THAT IT IS NOT CONSTRUED TO MEAN THAT POWER 15 PLANTS NEED NOT COMPLY WITH THE FEDERAL CLEAN AIR ACT OR THE 16 STATE IMPLEMENTATION PLAN, AND THERE WAS SOME CONTROVERSY 17 ABOUT WHETHER OR NOT THERE WAS A CONFLICT BETWEEN THE TWO. 18 I THINK THAT SHOULD BE PART OF THE MOTION. 19 MR. KENNY: I THINK WITH REGARDS TO THAT, THE 20 GUIDANCE DOCUMENT, I WOULD AGREE WITH YOU, SHOULD NOT BE 21 CONSTRUED IN THAT FASHION, SO WE CAN PROBABLY PUT MONEY IN 22 THERE DEPENDING ON HOW WE WOULD ACTUALLY DO THAT. 23 BUT WE WILL BE DOING THAT AND MAKING SURE WE HAVE 24 COPIES. 25 BOARD MEMBER RIORDAN: DO WE NEED TO MAKE THAT A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 PART OF THE AMENDMENT IN THIS RESOLUTION? 2 CHAIRMAN LLOYD: I WOULD LIKE TO HAVE THE STAFF 3 TAKE A LOOK AND GET SOME ADVICE ON THAT. 4 MR. KENNY: BASED ON -- WHAT WE CAN DO IS YOU CAN 5 MAKE IT PART OF THE RESOLUTION IF YOU CHOOSE, OR OTHERWISE 6 YOU CAN SIMPLY GIVE DIRECTION TO THE STAFF, AND WE WILL 7 ASSURE THAT IT, IN FACT, IT WILL BE INCORPORATED INTO THAT. 8 BOARD MEMBER MCKINNON: I AM ACTUALLY PROPOSING IT 9 AS AMENDMENT TO THE RESOLUTION. 10 BOARD MEMBER RIORDAN: I WILL SECOND THAT. 11 BOARD MEMBER EDGERTON: MR. CHAIRMAN, I HAVE TWO 12 MORE. 13 CHAIRMAN LLOYD: YOU HAD YOUR ALLOCATION. 14 BOARD MEMBER EDGERTON: I THINK IT HAS BEEN 15 APPROVED THAT THE PROPOSED ADDITION TO THE REGULATION THAT 16 SAYS AS THE BOARD FINDS THAT STAFF ANALYSIS INDICATES THAT 17 EXHAUST TEMPERATURE IS THE FACTOR IN THE PERFORMANCE IN THE 18 CATALYTIC EMISSION CONTROL SINGLE-CYCLE GAS TURBINE, COMBINED 19 HAVE HIGHER EXHAUST GAS TEMPERATURES THAN COMBINED-CYCLES AND 20 COGENERATION COMBINED TURBINE CONFIGURATIONS WHICH RESULT IN 21 HIGHER EMISSIONS. 22 THEREFORE, IN THE INTEREST OF THE AIR QUALITY, THE 23 BOARD DID DISCOURAGE SCD OF SIMPLE-CYCLE POWER PLANTS UNLESS 24 AIR POLLUTANTS ARE CONTROLLED. 25 SO, LEVELS REPRESENTING BEST AVAILABLE CONTROL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 TECHNOLOGY FOR CONTROL CYCLE COGENERATION PLANTS, WILL YOU 2 ACCEPT THAT FOR AN AMENDMENT? 3 IS THERE A SECOND? 4 CHAIRMAN LLOYD: HOW MANY APPLICATIONS ARE THERE 5 FOR A SINGLE CYCLE? 6 MR. SCHEIBLE: THE DILEMMA IS THAT BECAUSE THEY ARE 7 MUCH HIGHER ENERGY, OF THE COMBINED CYCLE PLANTS, PRODUCE 8 LOWER EMISSION PROBLEMS, AND THEY SEEM TO BE A POLICY CALL 9 WHETHER OR NOT WE LOOK AT AND SAY THERE IS A POTENTIAL FOR 10 SIMPLE BUT UNDESIRABLE -- 11 CHAIRMAN LLOYD: BUT ON THE OTHER HAND IF WE 12 INSTRUCT STAFF IN THE UPDATE TO COME BACK AND GIVE US AN IDEA 13 OF THE ACTIVITY IN THAT AREA, MAYBE THAT WILL GIVE US TIME TO 14 ACT ON THAT. 15 THAT IS JUST A SUGGESTION. 16 SO, I AGREE WITH YOU. 17 BOARD MEMBER EDGERTON: SO, MR. CALHOUN, ARE YOU 18 ACCEPTING OF THE -- 19 BOARD MEMBER RIORDAN: I THINK THAT THE CHAIRMAN'S 20 SUGGESTION IS A GOOD ONE. 21 RATHER THAN PUTTING INTO A RESOLUTION AT THIS 22 TIME -- 23 BOARD MEMBER CALHOUN: OKAY. LET'S LET THE STAFF 24 EVALUATE THESE THINGS AND THEN COME BACK WITH THEM, WHATEVER 25 YOU ARE COMFORTABLE WITH, AND AFTER YOU HAD MADE THE CHANGES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 HERE AT THE LAST MINUTE, I THINK THAT WE DO HAVE ADEQUATE 2 TIME FOR STAFF AND CHANGES THAT YOU SUGGESTED TODAY, AND COME 3 BACK TO THE BOARD IN A FEW MONTHS. 4 CHANGES CAN BE MADE AND RECOMMEND THEM AT THAT 5 TIME. SOME OF THESE THINGS HAVE FAR REACHING IMPLICATIONS. 6 BOARD MEMBER EDGERTON: THIS WAS ACTUALLY APPROVED 7 THROUGH STAFF. 8 I THINK IT IS PRETTY SELF-EVIDENT. IF IT IS NOT 9 CONSIDERED NEEDED, THEN I GUESS IT WILL BE IN THE RECORD AND 10 TRANSCRIPT AS SOMETHING THAT WE DISCUSSED NOT BEING NEEDED 11 BECAUSE THERE WERE NO PROPOSALS. 12 CHAIRMAN LLOYD: YOU ARE ALSO SAYING THAT WE ARE 13 NOT DISMISSING THEM, BECAUSE IF IT COMES UP IN THE NEXT SIX 14 MONTH UPDATE AS AN ISSUE, WE WILL ADDRESS IT. 15 BOARD MEMBER EDGERTON: AND THEN THE LAST ONE, IT 16 IS JUST FORMALLY, HOW WOULD YOU HANDLE THE POINT WE DISCUSSED 17 ABOUT HAVING CO 2 EMISSION ASKING THE DISTRICT TO INCLUDE 18 THOSE EMISSIONS IN THEIR CONSIDERATION? 19 CHAIRMAN LLOYD: THEN I WOULD COME BACK TO STAFF, 20 WHETHER IT WOULD BE PERTINENT TO SAY THAT THE DISTRICT BEGAN 21 AS A GUIDELINE THAT THE DISTRICT WOULD COLLECT AT THE SAME 22 TIME. 23 MR. KENNY: I THINK THAT THERE IS SOME VALUE IN 24 LOOKING AT CO 2 EMISSIONS, AND I THINK WE SHOULD LOOK AT HOW 25 WE ARE GOING TO DO THAT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 SO, IF WE COULD, AND YOU REQUEST THAT WE DO THAT IN 2 THE SIX MONTH REVIEW OR THE SIX MONTH REPORT TO THE BOARD. 3 BOARD MEMBER EDGERTON: THAT IS ACCEPTABLE IF THAT 4 WAS REPORTED BACK TO US IN SIX MONTHS, HOW IS THE BEST WAY TO 5 HANDLE THAT? 6 CHAIRMAN LLOYD: I THINK WORKING WITH THE ENERGY 7 COMMISSION ON THAT SENSE, AGAIN, THE POWER PLANTS ARE IN THE 8 PLANNING STAGE TO DO THAT, SO THAT WOULD PROBABLY BE 9 ACCEPTABLE. 10 FOR THIS CASE, WE WILL INSTRUCT STAFF TO RATIFY THE 11 ISSUE IN THE SIX MONTHS OR SOONER UPDATE. 12 BOARD MEMBER EDGERTON: MR. CHAIRMAN, COULD WE HAVE 13 THAT IN THE FINAL DOCUMENT, HOWEVER, JUST A FOOTNOTE SAYING 14 THAT WE ARE GOING TO BE LOOKING AT THAT SO THAT IT IS 15 REFLECTED, PEOPLE ARE PUT ON NOTICE THAT THIS IS SOMETHING 16 THAT IS OF CONCERN TO US? 17 THE ISSUE HERE IS HAVING AN INTEGRATED POLICY WITH 18 RESPECT TO AIR, GREENHOUSE AIR EMISSIONS, GREENHOUSE AIR 19 EMISSIONS AND TOXIC CONTAMINANTS, AND I THINK THAT THE MORE 20 THAT WE CAN REMIND, WE DO NOT WANT TO TAKE AWAY WITH THE LEFT 21 HAND THAN WE DID WITH THE RIGHT HAND, I THINK THAT THE MORE 22 THAT WE REMIND THAT IS AN EMERGING ISSUE, THAT WILL BE GOOD. 23 MR. KENNY: FROM STAFF PERSPECTIVE, WE CAN DO THAT 24 EITHER WAY. 25 IF THE BOARD'S PREFERENCE IS FOR US TO PUT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 SOMETHING IN THE DOCUMENT THAT REFLECTS THAT WE ARE LOOKING 2 AT CO EMISSIONS AND WORKING WITH THE ENERGY COMMISSION AND 3 THE APPLICANTS AND THE STAKEHOLDERS WITH REGARDS TO THAT, WE 4 CAN INCLUDE THEM. 5 CHAIRMAN LLOYD: I WOULD SAY I WOULD BE COMFORTABLE 6 WITH THAT LANGUAGE AT THIS TIME. 7 YES. 8 DO WE HAVE A MOTION? 9 IS IT SECONDED? 10 ALL THOSE IN FAVOR, SAY AYE. 11 YES, AND THANK YOU VERY MUCH. THANK YOU STAFF AND 12 THANK YOU FOR ALL THE WITNESSES HERE. 13 DO WE NEED A BREAK? 14 OKAY. WE WILL TAKE A SHORT BREAK. 15 (THEREUPON A DISCUSSION WAS HELD OFF THE RECORD.) 16 CHAIRMAN LLOYD: THE NEXT ITEM ON THE AGENDA IS 17 99-6-3. 18 THIS ITEM, AND AGAIN I WILL ASK STAFF TO MOVE VERY 19 QUICKLY, IN 1990, THIS BOARD ADOPTED ITS FIRST LOW EMISSION 20 VEHICLE OR LEV REGULATIONS. 21 THE RULES REQUIRE NEW VEHICLES TO MEET INCREASINGLY 22 STRINGENT EMISSION STANDARDS. THEY ALSO REQUIRE IF CAR 23 MANUFACTURERS DECIDE TO PRODUCE LARGE NUMBERS OF 24 ALTERNATIVELY FUELED VEHICLES, THAT THE SAME ALTERNATIVE 25 FUELS BE MADE AVAILABLE TO THE PUBLIC AT A FIXED NUMBER OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 RETAIL STATIONS. 2 NINE YEARS AGO, IT WAS EXPECTED THAT ALTERNATIVE 3 FUELS WOULD PLAY A MAJOR ROLE IN MEETING NEAR-TERM LEV 4 REQUIREMENTS. THAT HAS NOT HAPPENED YET. 5 THOUGH, IN THE FUTURE, IT STILL MIGHT. 6 CAR MANUFACTURERS HAVE MOSTLY RELIED UPON A 7 COMBINATION OF ADVANCED TECHNOLOGY AND CLEAN BURNING 8 FORMULATED GASOLINE. IN ADDITION, THE ALTERNATIVE FUEL 9 VEHICLES CURRENTLY ON THE ROAD IN CALIFORNIA TEND TO BE IN 10 CENTRALIZED FLEETS WHERE REFUELING ISN'T A SIGNIFICANT ISSUE. 11 HOWEVER, WE HAVE GOOD NEWS AND BAD NEWS. THE GOOD 12 NEWS IS WE HAVE SEEN DRAMATIC IMPROVEMENTS IN TECHNOLOGY, AND 13 WE HAVE ALSO SEEN SIGNIFICANT IMPROVEMENTS IN NATURAL GAS 14 VEHICLES. 15 STAFF IS PROPOSING CHANGES TO THE CLEAN FUEL OUTLET 16 REQUIREMENT TO REFLECT THIS CURRENT STATUS AND WHERE THEY 17 THINK THE TREND MAY BE GOING. 18 I HAD A FEW COMMENTS ON THIS, BUT WE WILL RESERVE 19 THEM UNTIL AFTER THIS PRESENTATION. 20 AT THIS PARTICULAR POINT, I WOULD LIKE TO ASK MR. 21 KENNY TO INTRODUCE THE ITEM AND TO HAVE THE STAFF 22 PRESENTATION. 23 MR. KENNY: THANK YOU, MR. CHAIRMAN AND MEMBERS OF 24 THE BOARD. 25 I WOULD LIKE TO INTRODUCE MR. WHITE TO MAKE THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 PRESENTATION. 2 MR. WHITE: GOOD AFTERNOON, MR. CHAIRMAN AND 3 MEMBERS OF THE BOARD. 4 TODAY I WILL PRESENT TO YOU THE STAFF'S PROPOSED 5 AMENDMENTS TO THE CLEAN FUEL REGULATION REGARDING CLEAN FUEL 6 OUTLETS. 7 WE WILL UPDATE REGULATIONS AS WELL AS PROVIDE MORE 8 FLEXIBILITY AND IMPLEMENTATION. THE CLEAN FUEL REGULATIONS 9 WERE PROVEN TO WORK IN 1990. IT WAS ANTICIPATED THAT 10 AUTOMOBILE MANUFACTURERS WOULD NEED TO PRODUCE ALTERNATIVE 11 FUEL VEHICLES TO MEET STRINGENT EMISSION STANDARDS 12 ESTABLISHED BY THE LEV REGULATION. 13 SINCE THAT TIME, THE NUMBER OF ALTERNATIVE FUEL 14 LEVS PRODUCED WAS LESS THAN EXPECTED. AS A RESULT, THE 15 20,000 VEHICLE TRIGGER HAS NOT BEEN REACHED FOR ANY CLEAN 16 FUEL. 17 ONE REASON THE AUTO MAKERS HAVE PRODUCED FEWER 18 ALTERNATIVE FUEL VEHICLES THAN HAVE BEEN ANTICIPATED IS THAT 19 THEY HAVE BEEN ABLE TO MEET THE LEV STANDARDS INCLUDING THE 20 VERY CLEAN EMISSION VEHICLE IN THE LEV STANDARDS USING 21 CALIFORNIA REFORMULATED GASOLINE THAT WERE INTRODUCED STATE 22 WIDE IN 1996. 23 AS THIS SLIDE SHOWS, THE POPULATION OF ALTERNATIVE 24 LEV IN CALIFORNIA IS LESS THAN 20,000 VEHICLE TRIGGER FOR 25 EACH FUEL TYPE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 THE LARGEST POPULATION OF ALTERNATIVE FUEL LEV 2 OPERATING ON M85 IS CURRENTLY AND APPROXIMATELY THERE ARE 3 APPROXIMATELY 11,500 LEVS WITH THIS FUEL OPERATING IN THE 4 STATE. 5 IN ADDITION THERE ARE NEARLY 72,000 DEDICATED AND 6 FUEL EMG AND LEV CURRENTLY OPERATING. AUTO MAKERS HAVE OFTEN 7 BEGUN TO PRODUCE DEDICATED LEV THAT OPERATE ON LEG. 8 HOWEVER, THE NUMBER OF THESE VEHICLES PRODUCED TO 9 DATE IS SMALL, ONLY SLIGHTLY MORE THAN A THOUSAND. 10 THE SUPPORT SYSTEM ON THE ALTERNATIVE FUEL VEHICLE 11 POPULATION IS A LIMITED FUEL INFRASTRUCTURE CURRENTLY EXIST. 12 INFRASTRUCTURE CONSISTS OF A NUMBER OF PUBLIC FUELING 13 FACILITIES, HOWEVER MOST OF THESE FACILITIES HAVE RESTRICTED 14 ACCESS OR ARE COMPLETELY PRIVATE. 15 THE CURRENT ALTERNATIVE FUEL INFRASTRUCTURE 16 CONSISTS OF 219 CNG FACILITIES AND 278 LPG FACILITIES AND 63 17 M85 FUELING FACILITIES, PRIMARILY INSTALLED AS A RESULT OF A 18 DEMONSTRATION PROGRAM BEING CONDUCTED BY THE ENERGY 19 COMMISSION. 20 STAFF IS PROPOSING AN AMENDMENT TO UPDATE THE JUNE 21 REGULATION TO BETTER REFLECT THE CURRENT STATE OF THE LEV 22 VEHICLE MARKET AND TO MAKE THE REGULATIONS MORE EFFICIENT. 23 IN DEVELOPING THE PROPOSED AMENDMENT, STAFF CALLED 24 THE SUNSET REVIEW WORKSHOP IN NOVEMBER OF 1998. COMMENTS 25 WERE REVIEWED AT THAT TIME ON THE NEED TO UPDATE THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 REGULATIONS, TO REFLECT THE CURRENT LEV ALTERNATIVE FUEL 2 MARKET. 3 AS A RESULT OF THESE COMMENTS, STAFF HELD A PUBLIC 4 WORKSHOP IN MARCH OF THIS YEAR TO DISCUSS A PROPOSED 5 AMENDMENT TO THE REGULATION. THIS WORKSHOP WAS ATTENDED BY 6 STAKEHOLDERS IN THE PETROLEUM INDUSTRY AND ALTERNATIVE FUEL 7 PROVIDERS AND THE ENERGY COMMISSION. 8 THE WORKSHOP NOTICES WERE MAILED TO OVER 7,000 9 INDIVIDUALS AND COMPANIES WHICH INCLUDED REFINERS AND 10 PETROLEUM ASSOCIATION AND INDIVIDUAL RETAIL SERVICE STATIONS 11 IN THE STATE. 12 STAFF HAS ALSO HAD CONSIDERABLE INFORMAL 13 DISCUSSIONS WITH ENVIRONMENTAL ORGANIZATIONS, THE ENERGY 14 COMMISSION AND LOCAL AIR DISTRICTS TO DEVELOP AND REFINE THE 15 PROPOSED AMENDMENTS. 16 THE PROPOSED AMENDMENTS BEFORE YOU TODAY WOULD 17 MODIFY SEVERAL KEY ELEMENTS OF THE REGULATIONS. FIRST, THE 18 STAFF PROPOSES TO MODIFY THE METHOD USED TO DETERMINE THE 19 NUMBER OF VEHICLES QUALIFYING TOWARDS THE VEHICLE TRIGGER. 20 STAFF ALSO TO MODIFY THE METHOD USED TO DETERMINE 21 THE NUMBER OF CLEAN FUEL OUTLETS REQUIRED. THE STAFF 22 PROPOSAL WOULD ALSO PROVIDE FLEXIBILITY WITHIN THE 23 REGULATIONS TO ALLOW THE EXECUTIVE OFFICER TO MAKE DIFFERENT 24 ADJUSTMENTS BASED ON MARKET CONDITIONS. 25 IN ADDITION, STAFF IS PROPOSING AN AMENDMENT TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 STREAMLINE AND UPDATE PROVISIONS, AND FINALLY STAFF PROPOSES 2 SUNSET PROVISIONS THAT WOULD END THE REQUIREMENT TO PAY TWO 3 OUTLETS FOR PARTICULAR FUEL AND CERTAIN CRITERIA ON THAT. 4 THE FIRST PROPOSED AMENDMENT WOULD MODIFY THE 5 METHOD USED TO DETERMINE THE NUMBER OF VEHICLES QUALIFYING 6 TOWARDS THE 20,000 VEHICLE TRIGGER. 7 CURRENTLY ALL VEHICLES REGARDLESS ON HOW THEY ARE 8 OPERATED OR FUELED ARE COUNTED DEEPLY TOWARDS THIS TRIGGER. 9 THIS MEANS THAT ESSENTIALLY FEW FLEET VEHICLES ARE COUNTED 10 THE SAME AS PUBLIC VEHICLES THAT USE RETAIL FACILITIES. 11 THE STAFF PROPOSED MODIFICATIONS WITH DISCOUNTS OF 12 CLEAN OPERATED VEHICLES BY 75 PERCENT TO ACCOUNT FOR THEIR 13 MAIN FUEL AT NON RETAIL FACILITIES. 14 ONCE THE VEHICLE TRIGGER HAS BEEN REACHED, STAFF IS 15 PROPOSING MODIFICATIONS TO THE METHOD USED TO DETERMINE THE 16 NUMBER OF CLEAN FUEL OUTLETS REQUIRED. STAFF PROPOSES TO 17 INCLUDE THE VOLUME OF FUEL USED BY FLEET VEHICLES QUALIFYING 18 TOWARDS THE VEHICLE TRIGGER. 19 CURRENTLY THE FUEL USED BY THESE VEHICLES IS NOT 20 INCLUDED IN THIS CALCULATION. THE STAFF IS ALSO PROPOSING 21 TO ELIMINATE THE FUEL VOLUME DISCOUNT PROVIDED TO FLEXIBLE 22 FUEL AND DUAL FUELED VEHICLES TO THE COUNT THREE AS GASOLINE. 23 STAFF ALSO PROPOSES TO MODIFY THE FUEL OUTLETS 24 THROUGHPUT ON THE CURRENT 600,000 GASOLINE A GALLON, THE 25 300,000 GASOLINE EQUIVALENT IN GALLONS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 THIS WAS THE LEVEL USED THROUGH 1996 WHICH WAS 2 INTENDED TO SITE MORE CLEAN FUEL OUTLETS DURING THIS 3 PROGRAM'S CRITICAL EARLY YEARS TO EFFECTIVELY DOUBLE THE 4 NUMBER OF OUTLETS REQUIRED. 5 FINALLY STAFF PROPOSES TO EXTEND THE CREDIT FOR 6 EXISTING PUBLIC FACILITIES TO ALL CLEAN FUELS. CURRENTLY 7 THIS CREDIT ONLY APPLIED TO M85 AND CERTAIN CNG OUTLETS. 8 IN ORDER TO PROVIDE FLEXIBILITY IN DETERMINING THE 9 FUELING DEMANDS ON ALTERNATIVE FUEL LEV, STAFF PROPOSES TO 10 ALLOW THE EXECUTIVE OFFICER TO ADJUST CERTAIN PROVISIONS IN 11 THE REGULATIONS. 12 FIRST, THE STAFF PROPOSES TO ALLOW THE EXECUTIVE 13 OFFICER TO REDUCE THE DISCOUNT PROVIDED TO COMPLETE VEHICLES 14 IN THE VEHICLE TRIGGER CALCULATIONS BASED ON THE INFORMATION 15 REGARDING THE FUELING PRACTICES OF THESE VEHICLES. 16 THE STAFF ALSO PROPOSES TO ALLOW THE EXECUTIVE 17 OFFICER TO ADJUST THE REQUIRED NUMBER OF OUTLETS TO REFLECT 18 ACTUAL MARKET CONDITIONS. 19 INTERESTED PARTIES WOULD BE NOTIFIED OF ANY 20 ADJUSTMENT MADE BY THE EXECUTIVE OFFICER AND WOULD BE 21 PROVIDED WITH THE OPPORTUNITY TO COMMENT. 22 THE STAFF ALSO PROPOSES THE CHANGES TO STREAMLINE 23 AND UPDATE THE PROVISIONS OF THE REGULATIONS. 24 FIRST, STAFF PROPOSES TO STREAMLINE THE REPORTING 25 REQUIREMENTS BY REDUCING THE ARB BI-ANNUAL NOTIFICATION TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 OIL COMPANIES TO ONCE PER YEAR. 2 IN ADDITION, STAFF PROPOSES TO DELAY REPORTING 3 REQUIREMENTS FROM THE INDUSTRY UNTIL THE TIME THAT THE 4 INFORMATION IS NEEDED TO MAKE THE CLEAN AIR DETERMINATION. 5 STAFF ALSO PROPOSES TO SIMPLIFY THE REQUIREMENT BY 6 ONLY REQUIRING THAT GASOLINE OUTLETS PROVIDE THE SAME BASIC 7 AMENITIES TO BOTH GASOLINE AND CLEAN FUEL CUSTOMERS. 8 FINALLY, STAFF PROPOSES TO REMOVE OBSOLETE 9 SECTIONS THAT PERTAIN ONLY TO THE SOUTH COAST AIR QUALITY 10 MANAGEMENT DISTRICT FOR THE YEARS 1994 THROUGH 1996. 11 THE FINAL PROPOSED MODIFICATION WAS ESTABLISHED TO 12 DISPENSE PROVISIONS THAT REMOVE THE REQUIREMENT OF SITE CLEAN 13 FUEL OUTLETS WITH 10 PERCENT OF THE RETAIL GASOLINE STATIONS 14 IN THE STATE HAVE BEEN EQUIPPED TO DISPENSE THAT FUEL. 15 THE PROPOSED AMENDMENTS TO THE CLEAN FUEL 16 REGULATIONS WILL HAVE SEVERAL IMPACTS ON THE PROGRAM. FIRST 17 THE PROPOSED MODIFICATION TO THE DETERMINATION OF THE 18 REQUIRED NUMBER OF CLEAN FUEL OUTLETS WILL INCREASE THE 19 NUMBER OF OUTLETS REQUIRED DURING THE PROGRAM FOR THE YEAR, 20 WHICH IS CONSISTENT WITH THE BOARD'S ORIGINAL INTENT. 21 THESE MODIFICATIONS WILL AT LEAST DOUBLE THE NUMBER 22 OF OUTLETS REQUIRED. FOR INSTANCE, FOR 20,000 PUBLIC 23 VEHICLES FUELED IN RETAIL FACILITIES, THE PROPOSED AMENDMENTS 24 WOULD INCREASE THE NUMBER OF REQUIRED OUTLETS FROM 25 APPROXIMATELY 22 TO 48. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 HOWEVER, BY DISCOUNTING FLEET VEHICLES QUALIFYING 2 TOWARDS THE VEHICLE TRIGGER, IT IS LIKELY THAT THE BASIS IT 3 WOULD TRIGGER MAY BE RECENTLY DELAYED. THE OVERALL IMPACT 4 THOUGH IS THAT NO ADDITIONAL COST IS EXPECTED OVER THE LIFE 5 OF THE PROGRAM. 6 IN SUMMARY, THE PROPOSED AMENDMENTS THAT THESE 7 REGULATIONS WILL PROVIDE, ADDITIONAL FLEXIBILITY AND UPDATE 8 THE PROGRAM THAT WILL REDUCE THE REPORTING TO THE INDUSTRY 9 AND WILL REMOVE OBSOLETE SECTIONS AND THEY WILL INCREASE THE 10 NUMBER OF OUTLETS REQUIRED FOR THE PROGRAM THROUGHOUT THE 11 YEAR. 12 IMPORTANTLY, PROPOSED AMENDMENTS WILL CONTINUE TO 13 ALLOW THE PROGRAM TO SUPPORT THE LEV PROGRAM INCLUDING THE 14 ORIGINAL ADOPTED LEV 2 PROGRAM AS WELL AS FUTURE FUEL CELL 15 VEHICLES. 16 THE STAFF RECOMMENDS THAT THE BOARD ADOPT THE 17 PROPOSED AMENDMENTS TO THE CLEAN FUEL REGULATION. 18 THIS CONCLUDES MY PRESENTATION. 19 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 20 MR. OMBUDSMAN, WOULD YOU PLEASE SPECIFY -- 21 MR. OULREY: MR. CHAIRMAN AND MEMBERS OF THE BOARD, 22 THE REGULATION AMENDMENTS BEFORE YOU WERE DEVELOPED IN THE 23 NOVEMBER 10, 1998 PRECEDENT. 24 ARB INVITED APPROXIMATELY 2200 INDIVIDUALS AND 25 COMPANIES TO PARTICIPATE IN NOVEMBER 10 REGULATION REVIEW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 WORKSHOP. 2 OVER 20 INDIVIDUALS PARTICIPATED IN THE WORKSHOP 3 INCLUDING REPRESENTATIVES FROM THE PETROLEUM INDUSTRY, 4 INCLUDING THE WESTERN STATES PETROLEUM ASSOCIATION, VEHICLE 5 MANUFACTURERS, VEHICLE MANUFACTURES INCLUDING ISUZU AND FORD 6 MOTOR COMPANY, REPRESENTATIVES FROM THE ALTERNATIVE FUELS 7 INDUSTRY, INCLUDING THE CALIFORNIA NATURAL GAS AND VEHICLE 8 COALITION AND THE WESTERN PROPANE GAS ASSOCIATION AND 9 REPRESENTATIVES FROM THE CALIFORNIA ENERGY COMMISSION. 10 ON FEBRUARY 19, ARB INVITED 7,000 INDIVIDUALS AND 11 COMPANIES INCLUDING 6,000 SERVICE STATION OWNERS TO 12 PARTICIPATE IN THE MARCH 18 CLEAN FUEL REGULATION WORKSHOP. 13 ABOUT 15 INDIVIDUALS ATTENDED INCLUDING MEMBERS FROM THE OIL 14 INDUSTRY, ALTERNATIVE FUEL INDUSTRY, AND THE CALIFORNIA 15 ENERGY COMMISSION. 16 ADDITIONALLY, STAFF HAD TELEPHONE COMMUNICATIONS 17 AND HELD ONE-ON-ONE MEETINGS WITH NUMEROUS STAKEHOLDERS, 18 INCLUDING CALIFORNIA INDEPENDENT OIL MARKETERS ASSOCIATION, 19 THE WESTERN STATES PETROLEUM ASSOCIATION, THE UNION OF 20 CONCERNED SCIENTISTS, AND THE SOUTH COAST AIR QUALITY 21 MANAGEMENT DISTRICT. 22 FINALLY, ON MAY 25, STAFF MAILED COPIES OF THE 23 STAFF REPORT AND NOTICES OF THIS HEARING TO APPROXIMATELY 24 1,000 INDIVIDUALS AND COMPANIES. THE STAFF REPORT WAS ALSO 25 POSTED ON THE WEBSITE AT THAT TIME. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 THE STAFF HAS REACHED OUT TO STAKEHOLDERS AND 2 AFFECTED PARTIES AND HAS INVOLVED THEM IN A MEANINGFUL PUBLIC 3 PROCESS ON A VERY CHALLENGING TIME FRAME. 4 THAT CONCLUDES MY REMARKS. 5 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 6 QUESTIONS FROM THE BOARD? 7 MR. CALHOUN. 8 BOARD MEMBER CALHOUN: HOW LONG HAS THIS REGULATION 9 BEEN ON THE BOOKS? 10 MR. KENNY: FIVE, SIX, SEVEN YEARS. 11 MR. SIMEROTH: YES. 12 IT WAS ORIGINALLY ADOPTED IN 1990 AND BECAME 13 EFFECTIVE IN 1991. 14 BOARD MEMBER CALHOUN: THERE HAS BEEN NO TRIGGER TO 15 THIS DATE? 16 MR. SIMEROTH: NO. 17 BOARD MEMBER CALHOUN: I THINK THAT REGULATION IS 18 LONG OVER DUE FOR OVERHAUL AND I PREPARED TO SUPPORT THAT. 19 CHAIRMAN LLOYD: COULD WE GO BACK ONE SLIDE. 20 AGAIN, TO ME THIS CAPTURES OUR NEED AGAIN TO KEEP THIS THERE 21 AND NOT WHAT IT IS FOR AND NOT JUST FOR MODIFICATIONS BUT AS 22 WE LOOK AT NECAR 4, WE ARE STILL IN THE SITUATION OF 23 UNDERSTANDING WHAT FUEL THAT WE WILL USE AND A LITTLE BIT 24 MORE COMPLICATED AS SOME OF THE OTHER ISSUES, SO WE HAVE 25 INCREASING NATURAL GAS FLEET, AND WE NOW HAVE WITH THE FUEL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 CELL WITH THAT VEHICLE RUNNING ON HYDROGEN AND IN THAT CASE 2 LIQUIDIZED HYDROGEN OR COMPRESSED HYDROGEN, AND THEN YOU HAVE 3 THE METHANOL, AND THEN YOU CONTINUE TO HAVE THE CLEANER 4 BURNING GASOLINE, AND OF COURSE THE DIESEL VEHICLES AND THEN 5 YOU HAVE ELECTRIC. 6 SO, I THINK THAT IT IS VERY IMPORTANT TO MOVE 7 AHEAD, BECAUSE WE DO NOT HAVE ALL THE ANSWERS. AS WE HAVE 8 SEEN, THE GREAT GAS SPIKES RECENTLY IT IS IMPORTANT THAT WE 9 LOOK AT FUEL FLEXIBILITY. 10 SO, I THINK THAT IT IS IMPORTANT TO HAVE THIS, BUT 11 I AGREE WITH MR. CALHOUN THAT IT IS APPROPRIATE TO LOOK AT 12 THE REGULATIONS HERE. 13 I JUST WANTED TO MAKE THAT POINT. 14 I THINK WE HAVE GOT TWO WITNESSES, AS I UNDERSTAND, 15 TO TESTIFY ON THIS PARTICULAR ISSUE. MR. STEVEN SMITH, FROM 16 THE WESTERN STATES PETROLEUM ASSOCIATION, AND THEN ROLAND 17 WANG, FROM THE UNION OF CONCERNED SCIENTISTS. 18 MR. SMITH: GOOD AFTERNOON, MR. CHAIRMAN AND 19 MEMBERS. I AM HERE TODAY REPRESENTING THE WESTERN STATES 20 PETROLEUM ASSOCIATION WITH OUR COMMENTS TODAY, AND WE THANK 21 YOU FOR THE CHANCE TO TALK AND PROVIDE A FEW COMMENTS. 22 FIRST, I WOULD LIKE TO START WITH MAYBE JUST A 23 LITTLE BIT OF BACKGROUND TO HELP. IN EARLY 1997, A COUPLE OF 24 YEARS AGO I GUESS, GOVERNOR WILSON ISSUED EXECUTIVE WORK 25 ORDER W-144-97, THAT IN PART DIRECTED CALIFORNIA AGENCIES TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 COMPLETE AND CONDUCT A SUNSET REVIEW OF ALL REGULATIONS BY 2 THIS HEARING, 1999. 3 FOLLOWING THE GOVERNOR'S ORDER WSPA IDENTIFIED THIS 4 REGULATION AS ONE THAT WE FELT DESERVED A SUNSET REVIEW AND 5 WE SUBMITTED A LETTER TO CAL EPA IN MAY OF 1997 REQUESTING 6 THAT THIS REGULATION BE CONSIDERED FOR REPEAL OR REVISIONS. 7 WSPA'S LETTER DESCRIBED HOW THE WORLD OF 8 ALTERNATIVE FUELS AND ALTERNATIVE VEHICLES HAD CHANGED 9 ENORMOUSLY WHICH I DO NOT THINK ANY OF US WOULD ARGUE WITH 10 SINCE THE REGULATION WAS ADOPTED IN 1990. 11 THOSE CHANGES REALLY, AT LEAST FROM OUR POINT OF 12 VIEW, INCLUDED, AS MR. LLOYD SAID, GROWTH OF ALTERNATIVE 13 FUELS IN CENTRALLY FUELED FLEETS BUT NOT NECESSARILY IN 14 PUBLIC USE. 15 SECONDLY, REALLY WE CAN IN SOME CASES EVEN 16 DIMINISHING DEMAND FOR ALTERNATIVE FUELS IN THE PUBLIC ARENA 17 AND THREE, AND AGAIN, THIS ONE IS REALLY THE REAL SUCCESS 18 STORY OF GASOLINE FUELS IN VEHICLES IN MEETING THE EVER MORE 19 CHALLENGING CLEAN EMISSION STANDARDS, AND THAT WAS A BIT OF A 20 CHANGE BACK FROM THE SETTING BACK IN 1990 WHEN I THINK A LOT 21 OF FOLKS THOUGHT THAT GASOLINE VEHICLES IN FUELS COULD NOT 22 MEET THE TOUGH STANDARDS IN PLACE TODAY. 23 WELL ARB STAFF TOOK THOSE COMMENTS AND HAS SINCE 24 CONDUCTED, I THINK, A GOOD REVIEW OF THE REGULATION. BUT 25 WITH THE POSITION HERE TODAY IS REALLY THAT WE PREFER THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 THE REGULATION BE REPEALED FOR THREE GOOD REASONS, AT LEAST 2 GOOD REASONS IN OUR OPINION. 3 FIRST THERE ARE NO AIR QUALITY BENEFITS. LET ME 4 REPEAT, THERE ARE NO AIR QUALITY BENEFITS CREDITED TO A 5 CALIFORNIA SIP FOR THIS REGULATION. 6 IN FACT STAFF REPORTS SAYS ON PAGE 27, NO SPECIFIC 7 EMISSION BENEFITS CAN BE ASSOCIATED WITH THESE REGULATIONS. 8 SECONDLY AS THERE ARE NO ASSOCIATED AIR QUALITY BENEFITS, 9 THERE ARE NO ASSOCIATED COST EFFECTIVENESS WITH THIS 10 REGULATION. 11 AND FINALLY I GUESS CERTAINLY FROM OUR INDUSTRY'S 12 POINT OF VIEW THIS REGULATION IS A GOVERNMENT MANDATE AND 13 WITH THIS IN PRACTICE OPPOSES MANDATE IS IF THIS REGULATION 14 TRIGGERS IT WILL ESSENTIALLY FORCE OUR INDUSTRY TO AS LARGE 15 GASOLINE RETAILERS TO PROVIDE ALTERNATIVE RETAIL OUTLETS 16 WHETHER WE THINK THAT IS IN OUR BEST POSITION FOR OUR 17 COMPANIES OR NOT. 18 STAFF HAS INSTEAD PROPOSED EXTENSIVE CHANGES TO THE 19 REGULATION AND WHICH DOES AGREE WITH THE PROPOSED AMENDMENTS. 20 WE THINK THEY ARE USEFUL AND WE THINK THEY ARE PROGRESSIVE 21 AND THEY ELIMINATE UNNECESSARILY REPORTING REQUIREMENTS THEY 22 MAKE THE REGULATION MUCH MORE REFLECTIVE OF THE ACTUAL 23 CURRENT ALTERNATIVE FUEL VEHICLE MARKET PLACE. 24 AND WE REALLY THINK STAFF HAS TAKEN A GOOD HARD 25 LOOK AT THE ALTERNATIVE FUEL VEHICLE MARKET PLACE, STUDIED IT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 AND MADE SOME REAL GOOD AND POSITIVE AND PROGRESSIVE CHANGES 2 TO THE REGULATIONS, SO WE WOULD LIKE TO COMPLIMENT THEM FOR 3 THEIR RECOMMENDED CHANGES. 4 WE MUST NOTE THOUGH AS I THINK MR. CALHOUN BROUGHT 5 UP, THIS REGULATION WAS ADOPTED IN 1991, OR ADOPTED IN 1990 6 AND EFFECTIVE IN 1991 AND IT BECAME EFFECTIVE AND IN PLACE 7 NOW FOR EIGHT YEARS WITHOUT TRIGGERING REALLY ANYTHING MORE 8 THAN REPORTING REQUIREMENTS. 9 SO IF REPEAL IS NOT POSSIBLE AT THIS TIME, WHICH 10 AGAIN WE WOULD LIKE FOR YOU TO CONSIDER, IF REPEAL IS NOT 11 POSSIBLE, THEN WE DO AGREE WITH THE STAFF CHANGES, BUT WE 12 WOULD LIKE TO ALSO PROPOSE AND SUGGEST THAT THE BOARD ADOPT A 13 SUNSET DATE FOR THIS REGULATION OF THE CALENDAR YEAR 2006. 14 NOW THIS SUNSET DATE WOULD ONLY APPLY IF THE 15 STATION MANDATE TRIGGER DOES NOT OCCUR BY THAT YEAR. WE FEEL 16 THAT THE SUNSET REQUEST IS IN THE TRUE SPIRIT OF REGULATORY 17 REFORM AND SUNSET REVIEW AND ALLOWS 6 MORE YEARS OF 18 ALTERNATIVE FUEL DEVELOPMENT IN CALIFORNIA AND THEN IN TOTAL 19 GOING ALL THE WAY BACK TO 1990 THAT WOULD ALLOW 14 YEARS, 14 20 YEARS FROM THE REGULATIONS 1991 EFFECTIVE DATE FOR THE 21 TRIGGERING OF ALTERNATIVE FUEL OUTLETS. IN OUR VIEW ANY 22 REGULATION THAT DOES NOT PROVIDE BENEFITS THEN 14 YEARS OF 23 ADOPTION IS RIPE, IN FACT IS VERY OVER RIPE FOR SUNSET. 24 SO IN CONCLUSION, WE AGREE WITH THE STAFF CHANGES 25 AND WE THINK THAT THEY ARE POSITIVE AND WE WOULD PREFER A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 REPEAL BUT AT A MINIMUM WE WOULD LIKE TO ASK THE BOARD TO 2 CONSIDER A SUNSET DATE IN 2006 IF THE REGULATION DOES NOT 3 TRIGGER BY THAT YEAR. I WOULD BE HAPPY TO ANSWER ANY 4 QUESTIONS. 5 CHAIRMAN LLOYD: I COULD NOT AGREE WITH YOU MORE ON 6 HOW THINGS HAVE CHANGED SINCE 1990 AND 1991. I CONGRATULATE 7 YOUR INDUSTRY ON TWO POINTS, TWO MAJOR POINTS REALLY 8 IMPROVEMENT IN THE GASOLINE TECHNOLOGY AND THE CLEAN UP OF 9 GASOLINE AND ALSO FOR JOINING THE FUEL CELL PARTNERSHIP THE 10 PPM MEMBERS RECOGNIZED THE NEED FOR FUEL DIVERSITY AND 11 CONTINUE TO PARTICIPATE IN THAT PARTNERSHIP WHICH I THINK IS 12 RIGHT IN LINE ON WHAT WE NEED TO DO THERE. 13 I CANNOT HOWEVER LET THE OPPORTUNITY GO WITHOUT 14 ALSO SAYING THAT I THINK THE ROLE OF THESE ALTERNATE FUELS I 15 THINK PLAYED A BIG PART IN CATALYZING THE MOVEMENT IN THE 16 IMPROVEMENT OF FUEL TECHNOLOGY. 17 SO I THINK THAT IT IS GOOD TO HAVE THAT ENERGY AND 18 COMPETITION THERE. I THINK THAT IN BOTH WAYS WE ARE 19 APPRECIATED OF THE BROADENING OUT OF THE PETROLEUM INDUSTRY 20 TO THE ENERGY COMPANIES. SO THEY ARE ACTUALLY WORKING WITH 21 US IN PARTNERSHIP AND WE WILL NEED THESE IN ACTUAL IN 22 STRUCTURED IN THE ENERGY COUNCIL TO WORK WITH THE ENERGY 23 COMMISSION, WE ARE DELIGHTED WITH THAT PART. 24 MR. SMITH: WE ARE HAPPY TO PARTICIPATE. 25 THANK YOU. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 CHAIRMAN LLOYD: THANK YOU, AND I KNOW MARK 2 APPRECIATES ALL THE EFFORTS THAT YOU ARE MAKING AT BEING 3 QUITE AT THE REFINERY. 4 BOARD MEMBER DESAULNIER: I WOULD DEFINITELY 5 RECIPROCATE BY BEING QUIET RIGHT NOW, AND I APPRECIATE YOUR 6 TALK ABOUT THE C-WORD, COMPETITION. 7 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 8 THE LAST PERSON TO TESTIFY IS ROLAND WANG. 9 MR. WANG: THANK YOU, MR. CHAIRMAN. 10 MY NAME IS ROLAND WANG, AND I AM WITH THE UNION OF 11 CONCERNED SCIENTISTS, AND WE ARE BASED ACROSS THE BAY IN 12 BERKELEY, CALIFORNIA. 13 IT IS A PLEASURE FOR ME TO ADDRESS THIS VERY 14 IMPORTANT ISSUE ON THE CLEAN FUELS TRIGGER TODAY TO YOU, MR. 15 CHAIRMAN AND MEMBERS OF THE BOARD. 16 I GUESS I SHOULD START OUT BY SAYING THAT IT IS MY 17 ORGANIZATION HAS A STARKLY DIFFERENT OPINION ABOUT THE 18 NECESSITY FOR THIS RULE WHETHER IT IS APPROPRIATE TO REPEAL 19 THE RULE AT THIS POINT OR SUNSET IT IN 2006. 20 WE SHARPLY DIFFER ALSO ON THE QUESTION OF WHETHER 21 THIS IS PROVIDING OR WILL PROVIDE ANY AIR QUALITY BENEFITS OR 22 ANY OTHER KIND OF BENEFITS IN TERMS OF ENERGY DIVERSITY TO 23 THE STATE OF CALIFORNIA. 24 OBVIOUSLY I THINK THAT THE STAFF PRESENTATION 25 SHOWING IN ONE OF THE LAST SLIDES A PICTURE OF THE NECAR 4, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 THE SAME AS THE CHRYSLER PROTOTYPE FUEL TYPE VEHICLE. THAT 2 IS THE CORNERSTONE OF THE ENTIRE ZEV PROGRAM THE CORNERSTONE 3 OF THE CALIFORNIA'S FUTURE PLANS FOR ATTAINMENT AND 4 MAINTENANCE OF STATE, FEDERAL CLEAN AIR STANDARDS AND THOSE 5 ON THIS PARTICULATE MATTER, ESPECIALLY WITHOUT THE PROGRAM, I 6 THINK IT IS GOING TO BE VERY DIFFICULT FOR THE BOARD, THIS 7 BOARD AND FUTURE BOARDS, ESPECIALLY FOR THE BOARD CONSIDERED 8 IN 2006 TO FIGURE OUT HOW WE ARE GOING TO DEVELOP AN 9 ATTAINMENT PLAN FOR THE STATE OF CALIFORNIA. 10 THE ZEV PROGRAM MUST BE A PART OF THAT AS YOU BUILD 11 TOWARDS THE FUTURE BEYOND 2010, ESPECIALLY. SO I GUESS WE 12 SHARPLY DIFFER. 13 THE CLEAN FUEL TRIGGER FEEL IS PERHAPS IS A 14 IMPERFECT TOOL BUT IT IS A ISSUE OF CHICKEN AND EGG SYNDROME 15 OF ALTERNATIVE FUELS BUT MUST BE DEALT WITH IN SOME MANNER 16 AND THIS IS HAS PROVIDED SOME UNCERTAINLY TO VEHICLE 17 SUPPLIERS, AND WE FEEL THAT IT IS CRITICAL ESPECIALLY IN THIS 18 TIME WITH THE CALIFORNIA FUEL CELL PARTNERSHIP JUST BEING 19 ANNOUNCED AND MOMENTUM TOWARDS BUILDING TOWARD FUEL CELL 20 FUTURE THAT THIS IS EXACTLY THE WRONG TIME TO REPEAL THIS 21 PROVISION THAT WAS MADE. 22 I GUESS THAT IS WHERE WE SHARPLY DIFFER WITH WSPA 23 2006 IS ALSO AN INAPPROPRIATE TIME FRAME TO CONSIDER 24 SUNSETTING, I ALSO WANT TO POINT OUT WE THINK THAT THE 25 VEHICLE HAS DONE THE AMAZING THING AND AS THE CHAIRMAN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 CORRECTLY POINTED OUT, THERE IS NO SMALL PART DUE TO THE 2 PRODDING OF THE SPECTRA OF COMPETITION OF THE FUEL. 3 THE CLEAN FUEL TRIGGER IT IS CONTINUED EXISTENCE 4 OF THE TRIGGER IS A POSITIVE IN TERMS OF PRODDING 5 COMPETITION. AND YOU SHOULD ALSO RECOGNIZE THAT THERE ARE 6 GREEN HOUSE GAS BENEFITS TO ALTERNATIVE FUELS. 7 AND THERE ARE SUPPLY ENERGY DIVERSITY AS A BENEFIT 8 TO BROADEN OUR FUEL SUPPLY SYSTEM OUT BEYOND GASOLINE. THE 9 CHEVRON SITUATION THIS PAST WEEK HAS POINTED THAT OUT QUITE 10 SHARPLY FOR THE BOARD MEMBERS AND THE STATE OF CALIFORNIA. 11 WITH HAVING SAID THAT, I WOULD SAY THAT WE 12 APPRECIATED STAFFS RESPONSIVENESS TO OUR CONCERNS ABOUT THE 13 MODIFICATION, GENERALLY WE ARE VERY SUPPORTIVE OF WHAT STAFF 14 HAS DONE WITH MODIFICATIONS. WE THINK THAT THEY HAVE 15 MODIFIED IT IN A WAY WHICH MAKES A LOT OF SENSE. 16 OUR CONCERNS WHICH THEY HAVE ADDRESSED CURRENTLY 17 WAS WHETHER THE 75 PERCENT DISCOUNT FACTOR TO THE FLEET 18 VEHICLES WAS APPROPRIATE AND WE SUPPORT THE FLEXIBILITY FOR 19 THE EXECUTIVE OFFICER TO RECONSIDER THAT IF THE INFORMATION 20 ARISES. 21 THERE IS ONE REMAINING ISSUE THAT WE DO HAVE IS WE 22 THINK THAT THE BOARD SHOULD MONITOR THE INTRODUCTION OF THE 23 ALTERNATIVE FUEL VEHICLES ESPECIALLY AS THE FUEL CELL PROGRAM 24 RAMPS UP. 25 AND WE THINK THAT THEY SHOULD MONITOR THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 INTRODUCTION, ESPECIALLY IN TERMS OF REGIONAL DISTRIBUTION 2 AND ADJUST THE LEVEL TO 20,000 VEHICLE TRIGGER LEVELS IF 3 APPROPRIATE. 4 WE THINK THE STAFF AND BOARD SHOULD MONITOR THAT 5 AND REPORT BACK TO THE BOARD ON AN ANNUAL BASIS TO SEE IF 6 THAT LEVEL IS STILL APPROPRIATE. I THINK WHAT WE ARE SEEING 7 WITH THE FUEL CELL VEHICLES IS THAT TECHNOLOGY HAS EVOLVED 8 QUITE RAPIDLY, MUCH FASTER THAN PERHAPS MANY OF US HAVE 9 PREDICTED EVEN A YEAR OR TWO AGO. 10 AND I THINK THAT THE BOARD HAS BEEN GOOD AT TRYING 11 TO ADOPT NEW INFORMATION AND ADOPT TO BE FLEXIBLE IN LIGHT OF 12 NEW TECHNOLOGY AND I THINK THAT MONITORING THE SITUATION OF 13 PARTICULARLY THE 20,000 VEHICLE TRIGGER WOULD KEEP IN THE 14 SPIRIT OF THE BOARD CONSIDERING THE INFORMATION AND THE PACE 15 LEVEL OF TECHNOLOGY DEVELOPMENT. 16 SO, THAT CONCLUDES MY REMARKS, AND AGAIN, WE ARE 17 VERY SUPPORTIVE OF THE PROGRAM, AND IT IS GENERALLY VERY 18 SUPPORTIVE OF THE NEW MODIFICATION PROPOSED BY THE STAFF, AND 19 WE HAVE THAT ONE REMAINING ISSUE WHICH WE ARE UNABLE TO 20 RESOLVE AT THIS POINT. 21 CHAIRMAN LLOYD: THANK YOU VERY MUCH, ROLAND. 22 DO WE HAVE ANY QUESTIONS? 23 NO. 24 THANK YOU. THANK YOU VERY MUCH. 25 ARE THERE ANY OTHER WRITTEN COMMENTS TO PUT IN THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 RECORD? 2 PLEASE MOVE QUICKLY. 3 MR. YEE: YES. 4 WE HAVE FIVE WRITTEN COMMENTS TO ENTER INTO THE 5 RECORD. 6 WE HAVE TWO LETTERS FROM SOUTH COAST AIR QUALITY 7 MANAGEMENT DISTRICT AND THE COUNCIL OF ENERGY COMMISSION THAT 8 STRONGLY SUPPORTS THE STAFF RECOMMENDATIONS. 9 WE HAVE A LETTER FROM THE CALIFORNIA NATURAL GAS 10 VEHICLE COALITION, WHICH BASICALLY SUPPORTS THE PROPOSED 11 AMENDMENTS AS SOME CAUTIONARY SUPPORT IN TERMS AS TO HOW WE 12 TREAT THE FLEET VEHICLES IN THE DISCOUNT DUE TO THE MAJOR 13 EMPHASIS WHERE THEY SEE THE MARKET GROWING. 14 HOWEVER, AS WE DISCUSSED, THE EO ADJUSTMENT TO 15 ALLOW THE 75 PERCENT DISCOUNT, WE ADJUST THAT DOWN TO MONITOR 16 THE MARKET PLACE. 17 THE NEXT LETTER IS FROM THE AMERICAN METHANOL 18 INSTITUTE. THEY BASICALLY SUPPORT THE STAFF PROPOSED 19 AMENDMENT. HOWEVER, THEY DO DISAGREE WITH OUR 75 PERCENT 20 DISCOUNT FOR FLEET VEHICLES. 21 THEY BASE THEIR ARGUMENTS ON THE NATIONAL SURVEYS 22 WHICH SUGGESTS SOMETHING LOWER. HOWEVER, STAFF HAS EVALUATED 23 THIS INFORMATION, AND WE FOUND THAT IT REALLY CONSIDERED 24 VEHICLES BOTH IN TERMS OF GASOLINE, DIESEL AND ALL FUELS. 25 SO, WE WOULD SUSPECT THOSE NUMBERS WOULD SHOW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 SOMETHING DIFFERENT IF YOU LOOK AT CALIFORNIA OUTLETS, MOST 2 OF THOSE OUTLETS IN TERMS OF ALTERNATIVE FUELS ARE OWNED BY 3 PRIVATE INDIVIDUALS AND VERY LITTLE BY THE PUBLIC. 4 THEREFORE, THAT IS WHY WE ARE RECOMMENDING THE 75 5 PERCENT. ADDITIONALLY THE EO ADJUSTMENT WOULD ALSO ADDRESS 6 FURTHER ADJUSTMENT OF THAT DISCOUNT. 7 THE LAST LETTER IS FROM THE METHONEX CORPORATION. 8 AGAIN, THEY BASICALLY SUPPORT THE STAFF RECOMMENDATION, AND 9 THEY AGREE WITH THE AMERICAN METHANOL INSTITUTE'S CONCERNS 10 ABOUT THE 75 PERCENT DISCOUNTS, AND AGAIN THEY ADDRESSED 11 THAT. 12 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 13 SINCE ALL OF THE TESTIMONY HAS BEEN SUBMITTED AND 14 STAFF COMMENTS ARE ENTERED INTO THE RECORD AND THE BOARD HAS 15 NOT GRANTED EXTENSION, I AM CLOSING THE RECORD FOR THIS 16 PORTION OF THE AGENDA ITEM 99-6-3. 17 WRITTEN OR ORAL COMMENTS RECEIVED AFTER WILL NOT BE 18 ACCEPTED AS PART OF THE OFFICIAL RECORD ON THIS ITEM. 19 JUST A REMINDER TO ALL MEMBERS CONCERNED IS THE EX 20 PARTE COMMUNICATIONS. WHILE WE MAY COMMUNICATE OFF THE 21 RECORD WITHOUT OUTSIDE PERSONS REGARDING BOARD RULEMAKING, WE 22 MUST DISCLOSE THE NAME OF OUR CONTACTS AND THE MAJOR CONTENTS 23 ON THE RECORD. 24 JUST A REMINDER THAT SPECIFICALLY THAT THE 25 COMMUNICATION THAT TAKES PLACE AFTER THE NOTICE OF THE BOARD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 HEARING. 2 ANY THERE ANY COMMUNICATIONS IN WHICH MEMBERS NEED 3 TO DISCLOSE? 4 SEEING NONE, JUST BEFORE WE LOOK AT THE RESOLUTION, 5 ONE THING I WOULD LIKE TO ASK STAFF IS, WOULD YOU LOOK AT THE 6 ISSUE OF DENSITY REGULATION HERE? 7 BECAUSE AGAIN AS I SAID EARLIER I HAVE SOME 8 EMOTIONS ON THIS VERY CRITICAL THINGS WE MOVE AHEAD AND WORK 9 WITH THE ENERGY COMMISSION, JUST TO EXPLORE THAT. 10 MR. KENNY: I THINK THAT IS A VERY LEGITIMATE 11 POINT. 12 IN FACT, WE DO SEE HIGH DENSITY OF LESS THAN 20,000 13 AND I THINK THAT IS SOMETHING TO LOOK AT AND CONSIDER 14 MODIFYING. 15 BOARD MEMBER RIORDAN: MR. CHAIRMAN, I MOVE 16 APPROVAL OF RESOLUTION 99-32. 17 CHAIRMAN LLOYD: ALL THOSE IN FAVOR, SAY AYE. 18 AGAINST? 19 THANK YOU VERY MUCH INDEED. THANK YOU FOR THE 20 STAFF'S COOPERATION AND ALSO FOR THE WITNESSES COOPERATION 21 IN MOVING AHEAD. 22 WE WERE LOSING MR. CALHOUN HERE, AND THAT IS WHY I 23 CUT YOU OFF VERY QUICKLY. 24 THE FINAL ITEM ON THE AGENDA ITEM TODAY IS 99-6-4, 25 A STATUS REPORT IN AIR QUALITY ENFORCEMENT IN CALIFORNIA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 I DON'T THINK THAT IT CAN BE SAID OFTEN ENOUGH THAT 2 THE HEART OF ANY REGULATORY PROGRAM IS FOLLOWING THROUGH ON 3 THE RULES. 4 WE NEED TO ENSURE THAT THE WORDS THAT WE PUT ONTO 5 THE PAPER ARE REALIZED IN THE ACTUAL WORLD. THAT TAKES 6 ENFORCEMENT. 7 WITHOUT A SOLID CREDIBLE ENFORCEMENT PROGRAM, THIS 8 BOARD'S EFFORTS WOULD BE FOR NAUGHT. SO, I AM LOOKING 9 FORWARD TO HEARING ABOUT ARB'S MANY COMPLIANCE PROGRAMS. 10 THE TIMING IS ALSO PROPITIOUS BECAUSE ENVIRONMENTAL 11 ENFORCEMENT HAS BEEN GETTING A LOT OF MEDIA AND LEGISLATIVE 12 ATTENTION RECENTLY. 13 WHILE SOME OF THAT ATTENTION HAS BEEN NEGATIVE, 14 AGAIN, PERHAPS DESERVEDLY SO, TODAY'S PRESENTATION IS AN 15 OPPORTUNITY TO HEAR SOME OF OUR STORIES. 16 THE BOARD SHOULD BE AWARE THAT THERE IS A RENEWED 17 FOCUS ON ENFORCEMENT PROGRAMS WITHIN CAL EPA. SECRETARY 18 HICKOX HAS INSTRUCTED EACH OF THE SIX BOARDS AND DEPARTMENTS 19 THAT ARE CURRENTLY UNDER CAL EPA, INCLUDING ARB, TO TAKE A 20 CLOSE LOOK AT ITS ENFORCEMENT EFFORTS AND TO REDIRECT ITS 21 RESOURCES AS NEEDED TO ACHIEVE THE COMPLIANCE OBJECTIVES. 22 MR. KENNY IS DOING THAT NOW AS PART OF NEXT YEARS 23 BUDGETARY PROCESS. IF ANY OF THE BOARD MEMBERS THAT WERE 24 HERE AT THIS PRESENTATION LAST YEAR, THE STAFF ASSURES ME 25 THAT IT HAS BEEN UPDATED, AND IT WAS ALSO EXPANDED BY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 CONTINUING IMPROVEMENT IN THE ENFORCEMENT PROGRAM AS A RESULT 2 OF THE ENFORCEMENT INITIATIVE COMMISSIONED BY THE EXECUTIVE 3 STAFF IN 1998. 4 AGAIN, I WAS SPECIFICALLY INSTRUCTED BY THE 5 EXECUTIVE OFFICER TO BE VERY ALERT IN LISTENING TO ALL OF THE 6 PRESENTATION. SO, YOU WILL BE SEEING THAT I AM HERE. 7 AT THIS POINT, I WOULD LIKE TO ASK MR. KENNY TO 8 INTRODUCE THE ITEM AND THE STAFF. 9 MR. KENNY: THANK YOU, MR. CHAIRMAN AND MEMBERS OF 10 THE BOARD. THE PRESENTATION TODAY WILL PROVIDE A BROAD 11 OVERVIEW OF THE PROGRAM AS WELL AS ASSESSMENTS OF THE 12 CHALLENGES THAT WE FACE. 13 THE ENFORCEMENT IS WHERE THE "RUBBER MEETS THE 14 ROAD" AND IS A NECESSARY COMPONENT OF AN AIR POLLUTION 15 CONTROL PROGRAM AND ENSURES THE EFFECTIVENESS OF THE 16 REGULATION YOU ADOPT. 17 RESPONSIBILITY FOR ARB'S EFFECTIVE ENFORCEMENT 18 PROGRAM IS SHARED BY THE COMPLIANCE DIVISION, THE MOBILE 19 SOURCE DIVISION AND THE OFFICE OF LEGAL AFFAIRS. 20 KATHLEEN WALSH WILL BEGIN THE PRESENTATION THIS 21 AFTERNOON, FOLLOWED BY MR. GREG BINDER, OF THE MOBILE SOURCE 22 OPERATIONS DIVISION, AND MR. CHUCK BEDDOW OF THE COMPLIANCE 23 DIVISION. 24 KATHLEEN. 25 MS. WALSH: THANK YOU, MIKE, AND GOOD AFTERNOON, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 CHAIRMAN LLOYD AND MEMBERS OF THE BOARD. 2 WE WILL START OUT WITH A BRIEF LITTLE SLIDE SHOW 3 AND SOME MUSIC TO LET YOU RELAX FROM THE LAST WHIRLWIND ITEM. 4 ONE OF THE THINGS THAT WE HAVE BEEN HEARING FROM 5 MR. KENNY OVER THE PAST SEVERAL MONTHS IS A LITANY THAT I'M 6 GOING TO QUOTE AS, PLAN IT, DO IT, PRESERVE IT. 7 THAT IS PLAN FOR ATTAINMENT OF AIR QUALITY 8 STANDARDS, CREATE AND IMPLEMENT PROGRAMS THAT WILL ALLOW US 9 TO ACHIEVE. 10 TODAY WE ARE GOING TO TALK A LITTLE BIT ABOUT THE 11 PROGRAMS AT ARB THAT FOCUS ON THE PRESERVE IT PART OF THAT 12 LITANY. 13 TO MOVE ON TO THE SCOPE OF THE CHALLENGE FACING THE 14 AIR RESOURCE BOARD IN ITS EFFORTS TO PRESERVE THE REDUCTIONS 15 FROM OUR PROGRAMS. WE ARE LOOKING AT THE STATE OF CALIFORNIA 16 WITH A POPULATION OF OVER 32 MILLION PEOPLE, WHICH MEANS WE 17 HAVE 32 PLUS MILLION PEOPLE IN CALIFORNIA AND 25 MILLION MORE 18 VEHICLES, 14 BILLION GALLONS OF GASOLINE MOVING THROUGH 19 13,000 SERVICE STATIONS, 4,000 CARGO TANKS AND WE ARE ALSO 20 REGULATING 600 MILLION CONSUMER PRODUCTS IN THE STATE OF 21 CALIFORNIA, AND IN OUR WORK WITH THE DISTRICTS AND THE U.S. 22 EPA OVER SEEING THE EFFORTS AT 40,000 STATIONARY SOURCES 23 THROUGHOUT THE STATE. 24 WE BRING A NUMBER OF ENFORCEMENT RESOURCES TO THIS 25 EFFORT. WAY TOO MANY THINGS FOR ME TO DO AT ONCE, PRESS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 BUTTONS, TALK AND HOLD THE MICROPHONE. 2 ARB HAS APPROXIMATELY NO LESS THAN THOUSANDS OF 3 FOLKS ON STAFF. WE HAVE JUST OVER 70 OF THOSE FOLKS WORKING 4 PRIMARILY IN DIRECT ENFORCEMENT ACTIVITY. 5 AND IN OUR COMPLIANCE DIVISION, MOBILE SOURCE 6 OPERATION DIVISION, MOBILE SOURCE CONTROL DIVISION ARE 7 REASONABLY CREATED TO THE STRATEGIC ENVIRONMENTAL 8 INVESTIGATION UNIT AND THE OFFICE OF LEGAL AFFAIRS. 9 THOSE EFFORTS ARE COMPLEMENTED BY A LITTLE OVER A 10 HUNDRED STAFF ALSO FROM COMPLIANCE DIVISION AND MOBILE SOURCE 11 AND OFFICE OF LEGAL AFFAIRS THAT WORK ON COMPLIANCE RELATED 12 ACTIVITIES. 13 WE ALSO WORK AND ARE ABLE TO LEVERAGE THE EFFECTS 14 OF THESE RESOURCES BY PARTNERING WITH ENFORCEMENT PERSONNEL 15 FROM A 35 LOCAL AIR POLLUTION CONTROL DISTRICT AND FEDERAL 16 EPA. AND WHAT WE HAVE AT THE DISTRICT IS APPROXIMATELY 300 17 INSPECTORS WORKING PRIMARILY ON THE 40,000 STATIONARY 18 SOURCES. 19 AND 14 INSPECTORS IN REGION ONLY U.S. EPA. THE 20 OVERALL OBJECTIVE OF THESE PROGRAMS IS FIRST AND FOR MOST TO 21 PROTECT THE PUBLIC HEALTH. AND WE DO THAT BY WORKING TO 22 REDUCE EXCESS EMISSIONS, WE LOOK FOR COST EFFECTIVE 23 REDUCTIONS AND IMPORTANTLY FOR A CREDIBLE ENFORCEMENT PROGRAM 24 CREATE EQUITY FOR ALL OF THE PLAYERS IN THE FIELD. 25 THAT IS TO PROTECT THE INTEREST OF GOOD CORPORATE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 AND BUSINESS CITIZENS THE FOLKS WHO WISH TO AND DO COMPLY 2 WITH OUR REGULATIONS. THERE ARE A NUMBER OF PRINCIPALS THAT 3 GOVERN THE ENFORCEMENT EFFORTS THAT WE UNDERTAKE EVEN THOUGH 4 THE PRINCIPLES THAT WE TRY TO KEEP IN MIND EVERY DAY AS WE GO 5 DO OUR JOBS. 6 THE FIRST AND FOREMOST IS THAT IT IS IMPORTANT WE 7 ENFORCE THE LAW FAIRLY AND FIRMLY, THIS HAS A GREAT EFFECT ON 8 THE CREDIBILITY OF THE PROGRAM AND THE DETERRENT EFFECT ON 9 OUR ENFORCEMENT ACTIVITIES. 10 THE CONDITION OF THE APPLICATION OF THE STANDARD IS 11 IMPORTANT TO CREDIBILITY OF THE ENFORCEMENT PROGRAM, AND IN 12 TERMS OF CREATING AN EFFECTIVE DETERRENT IS IMPORTANT THAT 13 THE PENALTIES THAT WE SEEK ARE COMMENSURATE WITH THE NATURE 14 OF THE VIOLATION THAT WE FIND OUT IN THE FIELD. 15 IT IS ALSO CRITICAL THAT WE USE OUR RESOURCE AS I 16 INDICATED EARLIER OR HALF OF OUR ENFORCEMENT RESOURCES ARE 17 DEVOTED TO ARE COMPLIANCE SYSTEMS ACTIVITY TO MAKE SURE THAT 18 THE FOLKS THAT REGULATE UNDERSTAND THAT THE RULES HAVE BEEN 19 WRITTEN CLEARLY AND ARE CAPABLE OF BEING COMPLIED WITHIN THE 20 FIELD. 21 WE WORK CLOSELY WITH THE ENFORCEMENT STAFF FROM THE 22 LOCAL AIR POLLUTION CONTROL DISTRICT TO INCREASE THE 23 EFFECTIVENESS OF THEIR PROGRAMS AND ALSO TO HAVE THE BENEFIT 24 OF SOME OF THEIR REALLY WHERE THE "RUBBER HITS THE ROAD" 25 EXPERIENCE WITH THE VAST ARRAY OF REGULATED SOURCES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 THROUGHOUT THE STATE. 2 AND AGAIN, THE OVERALL GOAL HERE IS A LEVEL PLAYING 3 FIELD. WHEN WE LOOK AT ENFORCEMENT IN CALIFORNIA, WE LOOK AT 4 3 DIFFERENT COMPONENTS TO THE ENFORCEMENT PROGRAM, THE FIRST 5 BEING TRAINING. AND THE AIR RESOURCES BOARD IS WELL REKNOWN 6 FOR ITS FINE SET OF TRAINING PROGRAM THAT ARE PRODUCED AND 7 PROVIDED FOR BOTH ENFORCEMENT STAFF THROUGHOUT THE STATE THAT 8 IS NOT ONLY AIR QUALITY ENFORCEMENT STAFF BUT ENFORCEMENT 9 STAFF IN OTHER ENVIRONMENTAL PROGRAMS THROUGHOUT THE STATE AS 10 WELL AS TRAINING FOR INDUSTRY FOLKS, AND AGAIN THE FOLKS WHO 11 NEED TO UNDERSTAND THE REGULATIONS IN ORDER TO MAKE SURE THAT 12 OPERATIONS ARE CONDUCTED IN COMPLIANCE WITH THOSE 13 REGULATIONS. 14 IN ADDITION TO TRAINING, WE HAVE A VERY ACTIVE 15 COMPLIANCE ASSISTANCE PROGRAM IN CALIFORNIA. THIS PROGRAM 16 HAS BEEN IN PLACE FOR A NUMBER OF YEARS, AND IT IS OFTEN 17 TIMES UNCITED AS ONE OF THE JEWELS OF THE AIR RESOURCES BOARD 18 ENFORCEMENT PROGRAM. 19 WE HAVE A NUMBER OF PUBLICATIONS THAT HAVE BEEN 20 PRODUCED BY THE AIR RESOURCES BOARD COMPLIANCE ASSISTANCE 21 PROGRAM FOLKS, TECHNICAL MANUALS THAT ADDRESS A NUMBER OF 22 AREAS, SPECIFICALLY WE HAVE THREE IN ONE CATEGORIES OF 23 REGULATORY PROGRAMS THAT ARE ADDRESSED AS TECHNICAL MANUAL 24 AND WE PRODUCE SELF INSPECTION HANDBOOKS AND HAVE DONE THEM 25 IN CASES BECAUSE OF ADDITIONAL, IN LANGUAGES IN ADDITION TO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 ENGLISH WHERE WE HAVE, FOR EXAMPLE, A GREAT NUMBER OF 2 OPERATORS WHO MAY SPEAK ANOTHER LANGUAGE. 3 DRY CLEANERS WE OFTEN FIND, HAVE OPERATORS THAT ARE 4 KOREAN SPEAKING AND TO MAKE SURE WE GET ACROSS THE CLEAR 5 MESSAGE OF THE REQUIREMENTS OF THE REGULATIONS WE MAKE THAT 6 EFFORT TO REACH OUT TO THOSE FOLKS AS WELL. 7 THEN IN ADDITION WE HAVE A NUMBER OF PAMPHLETS THAT 8 ARE AVAILABLE TO THE PUBLIC UPON REQUEST. THE THIRD 9 COMPONENT OF ENFORCEMENT AND THE COMPONENT THAT WE ARE GOING 10 TO FOCUS ON A BIT THIS AFTERNOON IS WHAT I CALL DIRECT 11 ENFORCEMENT. 12 AND THAT IS DIRECT INVESTIGATION, INSPECTION, AND 13 MONITORING ACTIVITY THAT ARE IN THE EFFORTS THAT ALLOW US TO 14 IDENTIFY AREAS WHERE WE DO HAVE NONCOMPLIANCE SITUATIONS TO 15 MOVE IN AND ADDRESS THEM AS QUICKLY AS POSSIBLE AND THE 16 PRIMARY GOAL ALWAYS IS TO BRING FOLKS IN COMPLIANCE WITH THE 17 REGULATION AS QUICKLY AS POSSIBLE BECAUSE IT IS IMPORTANT TO 18 AN EFFECTIVE ENFORCEMENT PROGRAM WE ALSO SEE PENALTIES THAT 19 ARE PROVIDED FOR BY A NUMBER OF STATUTES THAT A COMPANY THE 20 REGULATION THAT THIS BOARD STOPS, THAT IS AN IMPORTANT PART 21 OF GETTING ACROSS THE MESSAGE AND MAKING CLEAR THAT VIOLATING 22 THE LAW IS NOT SOMETHING THAT IS GOING TO BE ACCEPTABLE IN 23 CALIFORNIA. 24 WE REGULATE A NUMBER OF TYPES OF CATEGORIES, AS WE 25 MOVE ON TO THE FOLKS WHO SEE MUCH OF THE EFFORT WHERE THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 "RUBBER MEETS THE ROAD" HERE, I AM JUST GOING TO RUN THROUGH 2 THOSE QUICKLY AND MOVE ON TO MR. GREG BINDER, WHO IS THE 3 MANAGER OF OUR MOBILE SOURCE ENFORCEMENT SECTION WHO IS GOING 4 TO TAKE US THROUGH A TOUR OF OUR MOBILE SOURCE ENFORCEMENT 5 PROGRAM AND WHEN MR. BINDER IS DONE THEN MR. CHUCK BEDDOW WHO 6 IS THE MANAGER OF OUR FIELD ENFORCEMENT SECTION WILL TALK 7 ABOUT AN ARRAY OF REGULATORY PROGRAM ENFORCEMENT FOR MOTOR 8 VEHICLES FUELS, CONSUMER PRODUCTS, CARGO TANKS, STATIONARY 9 SOURCES INCLUDING ASBESTOS DEMOLITION ACTIVITIES. SO WITH 10 THAT INTRODUCTION I WILL TURN IT OVER TO GREG BINDER. 11 MR. BINDER: THANK YOU. GOOD AFTERNOON MR. 12 CHAIRMAN AND MEMBERS OF THE BOARD. MY NAME IS GREGORY BINDER 13 AND IT IS MY PLEASURE TODAY TO GIVE YOU A OVERVIEW OF OUR 14 COMPLIANCE. 15 IN THE ENFORCEMENT PROGRAM IS TO HELP ASSURE OUR 16 MOBILE SOURCE REGULATIONS ARE OBTAINED OR FULLY DEVELOPED. 17 OUR MOBILE SOURCE PROGRAM IS DEVELOPED AND IMPLEMENTED BY 2 18 DIVISIONS. THE MOBILE SOURCE CONTROL DIVISION AND THE MOBILE 19 SOURCE OF OPERATIONS DIVISION. 20 WHILE THE MOBILE SOURCE CONTROL DIVISION PRIMARILY 21 CONDUCTS REGULATORY DEVELOPMENT AND ENSURES SUPPORT. MAJORITY 22 OF THE MOBILE SOURCE COMPLIANCE AND ENFORCEMENT PROGRAMS ARE 23 CONDUCTED BY THE MOBILE SOURCE OPERATIONS DIVISIONS. 24 THE MOBILE SOURCE OPERATION DIVISION CONDUCTS 25 COMPLIANCE PROGRAMS FOR NEW AND IN USE VEHICLES AND IS IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 COMPLIANCE WITH OUR EMISSION STANDARDS AND CERTIFICATION 2 REQUIREMENTS. 3 THESE PROGRAMS ARE SUPPORTED BY THE 4 ARB LABORATORIES SUCH AS THOSE IN EL MONTE. ONE OF OUR MAJOR 5 EFFORTS IS TO ENSURE THAT THE CALIFORNIA CERTIFIED EMISSION 6 FAMILIES REMAIN COMPLIANT, NOT ONLY WHEN THEY ARE NEW BUT 7 THROUGHOUT THEIR USEFUL LIFE. 8 THIS SLIDE ILLUSTRATES ARB'S COMPLIANCE PROGRAMS 9 STANDS FIRM DURING THE TYPICAL LIFECYCLE. ONE OF OUR FIRST 10 PROGRAMS THAT THE VEHICLE IS ANXIOUS TO USE IS THE 11 CERTIFICATION AND THIS IS AT A PREPRODUCTION LEVEL. 12 ENGINE FAMILIES FOR ALL NEW VEHICLES AND MOST NEW 13 ENGINES FOR ON AND OFF ROAD USE MUST BE CERTIFIED BY THE ARB 14 AS MEETING CALIFORNIA'S EXHAUST AND EVAPORATIVE EMISSIONS 15 STANDARDS AND THEIR LIABILITY REQUIREMENTS. 16 THE MANUFACTURER DEMONSTRATED TO US BY PROVIDING 17 TEST DATA FROM DEMONSTRATION FROM DURABLE VEHICLES. OUR NEXT 18 PROGRAM BY CARB IS AUDIT. 19 THE NEW VEHICLE AND ENGINE AUDIT PROCESS ASSURES 20 THAT EACH CERTIFIED ENGINE FAMILY COMPLIES WITH THE 21 APPLICABLE EMISSION STANDARDS AT THE TIME OF PRODUCTION. 22 THIS IS A CRITICAL POINT IN THE COMPLIANCE PROCESS 23 BECAUSE IF I HAD A VIOLATION OR A LEAK CAN PREVENT OR LIMIT 24 THE SALE AND USE OF NON COMPLIANT ENGINES IN CALIFORNIA AND 25 THEIR ASSOCIATED AIR QUALITY. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 CHAIRMAN LLOYD: THIS IS THE GROUP THAT IDENTIFIED 2 THE PROBLEM WITH TOYOTA. 3 MR. BINDER: THAT WAS OUR ADVANCED ENGINEERING 4 SECTION. 5 IS THERE A PROBLEM HERE? 6 CHAIRMAN LLOYD: IS THAT DIFFERENT? 7 IT IS NOT COMPLIANCE. IT WAS NOT THE AUDIT 8 PROCESS. 9 MR. BINDER: THE NEXT THREE PROGRAMS ARE BEING USED 10 APPROPRIATELY. STARTING WITH THE DEALERSHIP INSPECTIONS. 11 NEW AND USED DEALERSHIPS ON FLEETS ARE EXPECTED STATE WIDE 12 AND TO ASSURE AND VERIFY CERTIFICATION EMISSIONS LABELING AND 13 OTHER VEHICLE REQUIREMENTS AND TO PREVENT THE EMISSIONS 14 CONTROL TAMPERING. 15 IN USE COMPLIANCE IS ANOTHER PROGRAM THAT WE 16 OPERATE. THE ARB CONDUCTS IN USE TESTING TO CONSUMER OWNED 17 VEHICLES TO ASSURE THE COMPLIANCE WITH THE EMISSION STANDARDS 18 OVER THE VEHICLES USEFUL LIFE. 19 OVER THE LAST 15 YEARS THE IN USE TESTING PROGRAMS 20 IS NOT ONLY INSTRUMENTAL IN ENCOURAGING MANUFACTURERS TO 21 INCREASE THE DURABILITY OF THEIR EMISSION CONTROL SYSTEMS. 22 AND FINALLY A SMOG CHECK. A SMOG CHECK IS 23 CALIFORNIA'S BY ANNUAL INSPECTION AND MAINTENANCE PROGRAM 24 AND IT WORKS TO INSURE MOTORIST TO MAINTAIN THEIR VEHICLES AT 25 THE LOWEST EMISSIONS AND FUEL EFFICIENCIES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 THE ARB PROVIDES TECHNICAL SUPPORT TO THE 2 DEPARTMENT OF CONSUMER AFFAIRS OR THE SMOG CHECK PROGRAM. 3 THIS SLIDE ILLUSTRATES THE ON ROAD CATEGORIES THAT ARE 4 CURRENTLY REGULATED. 5 NOTE THE LARGE NUMBER OF ENGINE FAMILIES THAT BE 6 CERTIFIED EACH YEAR. ALL OF THESE ENGINE FAMILIES AND THE 7 INDIVIDUAL UNITS SOLD, FALL UNDER ARB COMPLIANCE PORTION OF 8 THE PROGRAM. 9 THE OFF ROAD AND NON ROAD AND UTILITY INDUSTRY 10 CATEGORIES ARE MORE RECENT ADDITION TO OUR MOBILE SOURCE 11 PROGRAM WITH OVER 500 ENGINE FAMILIES CERTIFIED THIS YEAR IN 12 HUGE ANNUAL SALES THE OFF ROAD CATEGORIES ADDED A WHOLE NEW 13 RESPONSIBILITY ON OUR COMPLIANCE ENFORCEMENT PROGRAMS. 14 SINCE MANY OF THESE MANUFACTURERS ARE REGULATED 15 FOR THE FIRST TIME, ARB STAFF HAS ADDITIONAL SUPPORT TO THE 16 MANUFACTURERS TO ASSURE COMPLIANCE WITH REGULATIONS. 17 AUDIT TESTING ASSURES THAT PRODUCTION VEHICLES ARE 18 MEETING THE EMISSION STANDARD THAT WERE CERTIFIED TO. 19 CURRENTLY MANUFACTURERS MUST RANDOMLY TEST A STATISTICALLY 20 VALID SAMPLE OF THE CALIFORNIA DESTINED ASSEMBLY LINE 21 PRODUCTION. 22 THIS DATA IS ANALYZED BY THE ARB PROVISION 23 COMPLIANCE VERIFYING THE SAMPLING REQUIREMENTS AND MONITORING 24 THE REPAIR OF FAILING ENGINE VEHICLES AND WORKING WITH THE 25 MANUFACTURERS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 MANY MANUFACTURERS THAT HAVE FAILING ENGINE TO 2 ASSURE THAT THE APPROPRIATE ACTION IS BEING TAKEN. THIS 3 CHART SHOWS THAT THE AUDIT PROGRAM HAS CORRECTED A 4 SIGNIFICANT NUMBER OF FAILING ENGINES. 5 HOWEVER A GOOD AUDIT PROGRAM CANNOT BE OPERATED BY 6 DAILY REVIEW ALONE. AND ONE OF OUR GOALS IS TO SCHEDULE ON 7 SITE FACTORY AUDITS ON VEHICLE ENGINE MANUFACTURERS. AND 8 TITLE 13 WHEN VEHICLE COMPLIANCE TESTING IN LABORATORIES. 9 CALIFORNIA LAWS AND THE FEDERAL CLEAN AIR ACT 10 PROHIBIT ANY MODIFICATION TO DEGRADED OR REDUCE THE FUNCTION 11 OF THE VEHICLES ORIGINAL EMISSION CONTROL SYSTEM. 12 HOWEVER IF PROPERLY DESIGNED MANY AFTER MARKET 13 PARTS DO NOT INCREASE VEHICLE EMISSIONS AND ARB HAS A PROCESS 14 TO EXEMPT OR TO CERTIFY AFTER MARKET PARTS OR REGULATORY FIT 15 SYSTEMS FOR MANUFACTURERS THAT CAN DEMONSTRATE THEIR PARTS DO 16 NOT ABRASIVELY AFFECT EMISSIONS. 17 DURING 1998 THE ARB REVIEWED AND ISSUED 145 18 EXECUTIVE ORDERS TO MANUFACTURERS ALLOWING THE SALE OF AFTER 19 MARKET PARTS FOR A SPECIFIC APPLICATION. PART OF THE AFTER 20 MARKET PARTS PROGRAM INCLUDES CERTIFYING LIQUID PETROLEUM GAS 21 AND COMPRESSED NATURAL GAS STRUCTURAL FIT SYSTEMS AND HEAVY 22 DUTY DIESEL FUEL TO ASSURE THAT EMISSIONS AND LP2 SYSTEMS ARE 23 NOT AFFECTED. 24 MANUFACTURERS MAY ALSO REQUEST A LIMITED 25 EXPERIMENTAL PERMIT TO USE A NON CALIFORNIA CERTIFIED VEHICLE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 IN CALIFORNIA FOR A SPECIFIC REASON. OFTEN THIS IS TO 2 EVALUATE A PROTOTYPE OF TEST VEHICLE IN THE HEAT CALIFORNIA 3 ENVIRONMENT LIKE IN DEATH VALLEY. 4 THESE ARE EXAMPLES OF SOME COMMONLY EVALUATED AFTER 5 MARKET PARTS, AND THE AIR INTAKE SYSTEMS AND THE AFTER MARKET 6 REPLACEMENT CATALYST AND FUEL RETROFIT SYSTEMS. 7 THE ARB CONDUCTS IN USE OF CONSUMER OWNED VEHICLES 8 COVERING APPROXIMATELY 40 ENGINE FAMILIES EACH YEAR. IF 9 ENGINE FAMILIES FAILS THE TESTING THE ARB TYPICALLY 10 NEGOTIATES A CORRECTIVE ACTION WITH THE MANUFACTURER AND THAT 11 INCLUDES A RECALL WITH THE AFFECTED VEHICLES. 12 IF NECESSARY THE RECALL PROCESS MAYBE ORDERED BY 13 THE ARB AND IF APPROPRIATE THE ARB ASSESSES CIVIL PENALTIES 14 IN COURSE OF A SETTLEMENT IN LIEU OF LITIGATION. ALL RECALLS 15 ARE MONITORED BY THE ARB AND ARE TIED INTO THE DMV 16 REGISTRATION COST. 17 THIS PROGRAM INSURES EMISSION CONTROL SYSTEMS 18 REMAIN EFFECTIVE THROUGHOUT THE LIFE AND IT ENCOURAGES 19 MANUFACTURERS TO BUILD DURABLE EMISSION CONTROL SYSTEMS. 20 THIS CHART IS A REAL TESTAMENT OF HOW A COMPLIANCE PROGRAM 21 CAN INFLUENCE THE REVOLUTIONARY IMPROVEMENTS IN EMISSION 22 CONTROLS. 23 IN THE NEW TESTING PROGRAM HAS RESULTED IN THE 24 DEVELOPMENT OF MORE DURABLE EMISSION CONTROL SYSTEMS. DURING 25 THE EARLY 80'S ALMOST EVERY ENGINE FAMILY TESTED WAS FAILING. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 THIS TREND HAS FOR THE MOST PART CONTINUED TO 2 DECLINE AND IT IS INTERESTING TO NOTE DURING PERIODS OF 3 SIGNIFICANT TECHNOLOGY CHANGES FAILURE RATES SLIGHTLY RISE 4 BUT THE -- DECLINE AS TECHNOLOGY DEVELOPS AND BECOMES MORE 5 DURABLE. 6 THE ARB OPERATES ONE OF THE WORLDS FIRST FULLY 7 PORTABLE DYNAMOMETER TESTING CAPABLE OF BOTH ASM SETASTATE 8 AND RT240 TRANS IN TESTING. THIS TEST SYSTEM IS FULLY SELF 9 CONTAINED AND CAN BE SET UP ON THE STREET OR IN A PARKING 10 LOT. 11 ITS APPLICATIONS INCLUDE VOLUNTARY ROAD SIDE 12 PROVISIONS EMISSION TESTING IN CORPORATION WITH THE 13 CALIFORNIA HIGHWAY PATROL. FLEET INSPECTIONS AND CURRENTLY 14 CEUS AND THREE U.S. MEXICO PORTS OF ENTRY, A PART OF THE TEST 15 PROGRAM OF VEHICLES ENTERING THE STATE OF CALIFORNIA. 16 THE ARB ALSO OPERATES ON THE ONLY WORLD DUAL 17 SENSOR, REMOTE SENSING SYSTEMS. WITH THE KIT DIGITIZING EACH 18 LICENSE PLATE AND MAKING TWO INDEPENDENT MEASUREMENTS OF THE 19 CARBON DIOXIDE, HYDROCARBONS CONCENTRATION FROM EACH VEHICLE. 20 ONE OF OUR CURRENT APPLICATIONS THAT WE ARE ALL 21 SENSING IS A JOINT ARB IN THE LOS ANGELES COUNTY DISTRICT 22 ATTORNEY'S TEST PROGRAM FOR TAXIS SHOW AND COMPLIANCE CALLED 23 CLEAN FLEET. 24 EACH TAXI FLEET TEST PROGRAM VOLUNTARILY SIGNS AN 25 AGREEMENT TO PARTICIPATE IN GOOD FAITH PROGRAM REQUIREMENTS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 IN LIEU OF ARB INSPECTIONS AND LADA CLEAN FLEET INSTITUTION. 2 EACH TAXI FLEET WOULD THEN BE MEASURED THREE TIMES 3 WITH THE ARB REMOTE FACING EQUIPMENT AND ANY VEHICLES THAT 4 EXCEED THE EMISSION CUT POINTS ON TWO OF THE THREE 5 MEASUREMENTS ARE REQUIRED TO HAVE TO BE REPAIRED AND SMOG 6 CHECKED. SINCE THE PROGRAM BEGAN IN 1993 CONTINUES THE 7 AVERAGE FLEET FAILURES IS A LITTLE OVER 30 PERCENT DOWN TO 8 ABOUT 13 PERCENT WHICH IS CLOSE TO THE AVERAGE VEHICLE 9 FAILURE RATE ON THE SMOG CHECK PROGRAM. 10 DUE TO THE FACT THAT TAXIS CAN BE DRIVEN OVER 11 100,000 MILES A YEAR. THE CLEANING UP OF GROWTH FLEETING 12 TAXI CAN PRODUCE A LARGE AIR QUALITY BENEFIT. DURING 1998 13 THE PROGRAM HAS GROWN TO INCLUDE MORE THAN 1500 TAXIS IN LOS 14 ANGELES ALONE. BASED ON THE SUCCESS OF THE PROGRAM THE ARB 15 STAFF IS WORKING WITH THE LA PD'S OFFICE TO EXPAND THIS 16 PROGRAM INTO OTHER COUNTIES STATEWIDE. 17 ONE OF OUR REGULATORY MILESTONES THE ON BOARD 18 DIAGNOSTICS, TWO REQUIREMENTS HAVE BEEN INCORPORATED IN 19 CALIFORNIA CARS AND TRUCKS SINCE 1996. THE TRANSITION FROM 20 REGULATIONS TO FULLY FUNCTIONAL RELIABLE MASS PRODUCED OB 2 21 SYSTEMS HAS BEEN DUE IN LARGE PART TO THE IN-SHARING SUPPORT 22 BY THE MOBILE SOURCE CONTROL DIVISION. 23 THIS DIVISION IS NOW UTILIZING THIS EXPERTISE BY 24 CONDUCTING A REAL WORLD TESTING PROGRAM TO ASSURE EACH 25 MANUFACTURER OB 2 SYSTEMS PERFORM AS REQUIRED. THIS PROGRAM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 HAS BEEN VERY EFFECTIVE AND HAS IDENTIFIED PROBLEMS WITH 2 SEVERAL MANUFACTURERS OBG SYSTEMS. 3 IF PROBLEMS ARE DISCOVERED STAFF WORKS WITH THE 4 MANUFACTURERS TO RESOLVE THE ISSUES. SEVERAL VIOLATIONS HAVE 5 BEEN CORRECTED AND SOME ARE CURRENTLY IN ADJUDICATION. 6 CONSIDERING THE COMPLEXITY OF VARIATIONS OF EACH 7 MANUFACTURING MONITORING SYSTEMS IN SOFTWARE AND ASSURING OB 8 2 COMPLIANCE IS AS VITAL AS EVER, THE ARB AND THE BUREAU OF 9 AUTOMOTIVE REPAIR WORK COOPERATIVELY ON MANY PROGRAMS TO 10 SUPPORT SMOG CHECK. 11 WE CONTINUE OUR USE CAR LOT BEFORE THEY ARE 12 DISTRAUGHT BY THESE PROGRAMS. 13 WE HAVE OPERATED JOINT ROAD SIDE EVALUATION 14 PROGRAMS AND WE PROVIDE ASSISTANCE WHEN WE REQUEST ON THE 15 ENFORCEMENT ACTIONS TO REDUCE SMOG CHECK FRAUD. ONE OF THE 16 MORE COMMON FORMS OF SMOG CHECK FRAUD IS CLEAN PIPING WHICH 17 IS THE PRACTICE OF USING A KNOWN CLEAN VEHICLE FOR THE TAIL 18 PIPE PORTION OF THE SMOG CHECK AND FALSELY PASSING THE 19 VEHICLES THAT WOULD PROBABLY FAIL. 20 VIOLATORS CAN RECEIVE PRISON TIME, FINES, LICENSES 21 AND EQUIPMENT FORFEITURE. WHEN COMPLIANCE PROGRAMS ARE 22 IGNORED AND ARE VIOLATED OUR COMPLIANCE EFFORTS TRANSITION 23 INTO ENFORCEMENT ACTIONS, SOME OF THE AREAS WE ENFORCE 24 INCLUDE ILLEGAL VEHICLES AND ENGINES, GREY MARKET VEHICLES, 25 AND ILLEGAL AFTER MARKET PARTS AND HEAVY DUTY DIESEL SMOKE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 ASIDE FROM THE MOBILE SOURCES ASIDE FROM THE SMOG 2 CHECK PROGRAM, THE ARB HAS SOLE AUTHORITY FOR STATE WIDE ON 3 AND OFF ROAD WHOLE SOURCE ENFORCEMENT. 4 CALIFORNIA CERTIFIED VEHICLE ENGINES ARE ON THE 5 CORNERSTONE OF THE ARB MOBILE SOURCE PROGRAM. ENFORCING THIS 6 REQUIREMENT IS CRITICAL TO ACHIEVING OUR EMISSION REDUCTION 7 GOALS. 8 THE FOLLOWING SLIDES HIGHLIGHT OUR MAJOR 9 ENFORCEMENT AREA. AS SHOWN IN THIS SLIDE ALL NEW MOTOR 10 VEHICLES IN MOST ENGINES THAT ARE OFFERED FOR SALE IN 11 CALIFORNIA ARE UNIQUELY IDENTIFIED WITH THE EMISSION LABEL 12 THAT STATES THE VEHICLE OR ENGINE MEETS THE CALIFORNIA 13 EMISSION REQUIREMENTS AND IS CERTIFIED FOR SALE IN 14 CALIFORNIA. 15 A VEHICLE OR ENGINE THAT MEETS ONLY FEDERAL 16 EMISSION REQUIREMENTS AS KNOWN IN THE 49 STATES. A 17 CALIFORNIA RESIDENT, BUSINESS OR FLEET MAY NOT PURCHASE OR 18 SELL OR USE A NEW 49 STATE VEHICLE IN CALIFORNIA. 19 BY STATUTE THE NEW MOTOR VEHICLES DEFINED HAVING 20 LESS THAN 7500 ODOMETER MILES. THERE ARE SOME EXCEPTIONS FOR 21 GENERAL CALIFORNIA RESIDENTS. HOWEVER IN GENERAL THE 22 CALIFORNIA CERTIFICATION REQUIREMENTS ARE VIGOROUSLY ENFORCED 23 BY THE ARB. 24 OUR ENFORCEMENT ACTION RANGE FROM MANUFACTURERS CAR 25 DEALERS AND FLEET AND WRECKING COMPANIES THAT USE NEW 49 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 STATE VEHICLES FOR INTRASTATE RENTALS. THE RECENT CONCLUSION 2 OF OFF ROAD ENGINES TO THE MOBILE SOURCE PROGRAM HAS CREATED 3 A WHOLE NEW ENFORCEMENT AREA. 4 BUT THE LARGE NUMBERS OF OFF ROAD UTILITY IN 5 CALIFORNIA WHICH IS OVER 2.2 MILLION IN 1998 REPRESENTS A 6 REAL CHALLENGE TO OUR ENFORCEMENT EFFORTS. THIS SLIDE IS AN 7 EXAMPLE OF ONE OF OUR CURRENT CASES INVOLVING LAWN MOWERS 8 THAT WERE SOLD IN CALIFORNIA FROM AN OFFICER THAT BOUGHT 9 ENGINES. 10 THIS SLIDE HIGHLIGHTS TYPICAL SMALL VOLUME CUSTOM 11 MOTORCYCLES. SOME OF THE MANUFACTURERS OF THESE MOTORCYCLES 12 ARE CONTINUALLY HAVING DIFFICULTY MEETING OUR REQUIREMENTS 13 AND THEY ARE BEING INVESTIGATED FOR BEING NON CALIFORNIA 14 CERTIFIED SALES AND EMISSION CONTROL TAMPERING. 15 GRAY MARKET VEHICLES DO NOT MEET CALIFORNIA OR THE 16 U.S. EPA EMISSION REQUIREMENTS OR THE U.S. SAFETY STANDARDS. 17 ALTHOUGH THE PROBLEM IS NOT AS LARGE SCALE THAT IT WAS DURING 18 THE 1980'S ILLEGAL GRAY MARKET SALES OF SPECIALTY AND HIGH 19 PERFORMANCE VEHICLES CONTINUES TO BE A PROBLEM AND A PART OF 20 OUR ENFORCEMENT EFFORTS. 21 CURRENTLY THE ARB IS PART OF THE MULTI AGENCY 22 EFFORT TO IMPLEMENT PROVISIONS OF HRA WHICH APPLY TO GRAY 23 MARKET MEXICAN VEHICLES. THE ARB IN COOPERATION WITH THE 24 CALIFORNIA HIGHWAY PATROL IS TESTING HEAVY DUTY TRUCKS AND 25 BUSES FOR EXCESSIVE SMOKE AND TAMPER. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 EVERY WD VEHICLE TRAVELING IN CALIFORNIA INCLUDING 2 THOSE REGISTERED IN OTHER STATES AND FOREIGN COUNTRIES IS 3 SUBJECT TO INSPECTION AND TO TESTING. 4 ALTHOUGH ONLY TWO PERCENT OF CALIFORNIA VEHICLES 5 ARE HEAVY DUTY, THEY PRODUCE ABOUT 30 PERCENT OF THE OXIDES 6 OF NITROGEN AND 65 PERCENT OF THE PARTICULATE EMISSIONS 7 ATTRIBUTED TO MOTOR VEHICLES. 8 ON THIS SLIDE, ON THE OPACITY STANDARDS BY A WHOLE 9 YEAR. THIS SLIDE SHOWS THAT HEAVY DUTY ENFORCEMENT 10 STATISTICS SINCE THE PROGRAM WAS REINITIATED ON JUNE 1, 1998, 11 BOTH THE FAILURE RATE AND THE RATE OF CITATION APPEALS 12 CONTINUE TO DECLINE. 13 THIS IS VERY ENCOURAGING BECAUSE IT APPEARS THAT 14 TRUCK AND FLEET OWNERS ARE FOCUSING MORE EFFORT ON PROPER 15 MAINTENANCE WHICH DIRECTLY IMPRESSED UPON ME AND REDUCED THE 16 DIESEL PARTICULATE EMISSIONS WHICH ARE IDENTIFIED AS A TOXIC 17 AIR CONTAMINANT. 18 THE FINAL 2 SLIDES OF MY PRESENTATION OUTLINE THE 19 POTENTIAL CIVIL COUNTIES FOR MOTOR VEHICLES AND ENGINES AND 20 HEAVY DUTY DIESEL SMOKE ENFORCEMENT. IN ADDITION TO CIVIL 21 COUNTIES MOST OF THEM ARE MOBILE SOURCES AND ALSO INCLUDE 22 SOME TYPE OF CORRECTIVE ACTIONS THAT JUST REAPPEARS AND 23 RECALLS OR REMOVAL OF NON COMPLYING VEHICLE AS STRINGENT IN 24 CALIFORNIA. 25 THIS CONCLUDES THE MOBILE SOURCE PORTION OF THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 PRESENTATION, AND NOW I WOULD LIKE TO TURN THE PRESENTATION 2 OVER TO MR. CHUCK BEDDOW, OF THE COMPLIANCE DIVISION. 3 MR. BEDDOW: THANK YOU, MR. BINDER, MR. CHAIRMAN 4 AND MEMBERS OF THE BOARD. 5 THIS AFTERNOON I AM GOING TO TALK ABOUT THE AIR 6 RESOURCES BOARD AND THE STATES STATIONARY SOURCE CONTROL 7 PROGRAM. 8 IN THE STATE THERE ARE BASICALLY 5 PROGRAMS THAT 9 CONSTITUTE UNSTATIONARY SOURCES. THE FIRST 3 PROGRAMS ON 10 YOUR SLIDE ARE PROGRAMS FOR WHICH THE AIR RESOURCES BOARD HAS 11 DIRECT AUTHORITY. 12 AND THE MOTOR VEHICLES, AND CONSUMER PRODUCTS AND 13 CARGO TANKS. THE ASBESTOS PROGRAM IS SPLIT UP AMONG THE 14 DISTRICT AND THE ARB STAFF DEPENDING WHETHER THE STAFF HAS 15 DELEGATED OR NOT AND OF COURSE LOCAL DISTRICTS HAVE A VERY 16 MAJOR ROLE IN STATIONARY SOURCES OTHER THAN THE ONE'S LISTED 17 ABOVE. 18 FIRST OF ALL I WILL TALK ABOUT MOTOR VEHICLE FUEL 19 ENFORCEMENT. AS YOU ARE WELL AWARE GASOLINE IS A LARGE 20 SOURCE OF EMISSIONS IN CALIFORNIA AND OVER 14 BILLIONS OF 21 GALLONS SOLD PER YEAR 2.3 BILLION GALLONS OF DIESEL FUEL. 17 22 REFINERIES ET CETERA AND 13,000 SERVICE STATIONS. 23 OF ALL THOSE SOURCES OUR STAFF IS ABLE TO INSPECT 24 APPROXIMATELY FIVE PERCENT OF THE FUEL THAT IS SOLD ANNUALLY. 25 HOW WE INSPECT THE FUEL BASICALLY IS WE GO TO EVERY POINT IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 THE DISTRIBUTION CHAIN WHERE FUEL COMES INTO THE STATE, WHERE 2 IT IS SOLD, WHERE IT IS MADE AND WHERE IT IS DISTRIBUTED AND 3 THAT BEING A IMPORT FACILITY, THAT BEING REFINERIES, THAT 4 BEING AT THE BORDER, THAT BEING AT TERMINALS OR SERVICE 5 STATIONS. 6 TYPICALLY, OUR INSPECTORS SAMPLE THE FUEL TO SEE IF 7 IT MEETS THE FUEL QUALITY SPECIFICATIONS AT THE AIR RESOURCES 8 BOARD AND AT ALL POINTS THROUGHOUT THE STATE AND THAT IS ONE 9 OF IS INSPECTORS THERE PULLING A SAMPLE FROM THE FIXED ROOF 10 TANK AT A REFINERY. 11 WE HAVE A MOBILE FUELS LABORATORY WHICH IS A 12 CONVERTED 1974 GREYHOUND BUS THAT HAS A COMPLETE FUELS 13 LABORATORY INSIDE AND IT TRAVELS UP AND DOWN THE STATE AND 14 SPENDS MOST OF ITS TIME IN THE SOUTH COAST WHERE WE ARE 15 ACTUALLY ABLE TO TEST FUEL, SAMPLE FUEL DURING THE DAY AND 16 TEST FUEL DURING THE EVENING AND KNOW IF WE HAVE A PROBLEM BY 17 THE NEXT MORNING. 18 THAT IS GOOD FOR US AND IT IS ALSO GOOD FOR THE 19 INDUSTRY THEY ARE VERY APPRECIATIVE TO FIND OUT IF THEY HAVE 20 A PROBLEM THE NEXT DAY RATHER THAN A WEEK LATER WHILE THEY 21 MAY HAVE DISPENSE -- AND GALLONS OF FUEL. IT ALSO KEEPS 22 DIRTY FUEL OUT OF THE MARKET PLACE. 23 THIS IS A VIEW OF THE INSIDE OF THE MOBILE FUELS 24 LABORATORY. AS I SAID OUR INSPECTORS BRING SAMPLES TO THE, 25 WHAT WE CALL THE BUS, DAILY AND CHEMIST IN THE MONITORING LAB PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 DIVISION DO IT IN THE EVENING AND RUN THE SAMPLES TYPICALLY 2 UNTIL 11 OR 12 O'CLOCK AT NIGHT. 3 SOME OF THE TYPICAL VIOLATIONS WE FIND FOR MOTOR 4 VEHICLES FUEL REGULATIONS .MOST OF THE VIOLATIONS FROM MAJOR 5 REFINERIES ARE INADVERTENT ERRORS AND STATES OPERATOR ERRORS 6 AND THINGS LIKE THAT. 7 THERE ARE AS WITH ANYTHING IF THERE IS AWAY TO MAKE 8 A DOLLAR OUT THERE, THERE IS USUALLY SOMEBODY OUT THERE 9 TRYING TO BEAT THE SYSTEM. WE FIND THAT WITH PEOPLE 10 ILLEGALLY BLENDING FUELS AND SOMETIMES WE WORK WITH THE BOARD 11 OF EQUALIZATION AND ON TAX EVASION CASES PEOPLE WHO ARE 12 EVADING TAXES AND BOTH ILLEGALLY BLENDING FUELS WE GET THE 13 PRODUCTS BROUGHT INTO THE STATE ILLEGALLY AND THERE ARE ALSO 14 SOME TIES OCCASIONALLY WITH ORGANIZED CRIME WITH FUELS. 15 FUEL COUNTIES CAN RANGE FROM ADMINISTRATIVE 16 PENALTIES OF $25,000 PER DAY AND $300,000 MAXIMUM AS SHOWN. 17 WE HAVE CIVIL AND CRIMINAL REMEDIES AVAILABLE TO US. 18 CONSUMER PRODUCTS ENFORCEMENT IS THE SECOND AREA 19 FOR WHICH THE AIR RESOURCES BOARD HAS DIRECT AUTHORITY, THERE 20 ARE OVER 600 MILLION UNITS IN THE TOTAL INVENTORY AND 93 21 PRODUCT CATEGORIES AND ALL THOSE NUMBERS WILL BE GOING UP ALL 22 THE TIME AS THIS CATEGORY BECOMES MORE REGULATED. IT IS THE 23 LARGEST COMMISSION CATEGORY BY FAR IS THE HAIR SPRAY CASE 24 AND WINDSHIELD WASHER FLUIDS, ET CETERA. 25 AGAIN WE EXPECT ABOUT FIVE PERCENT TO 7 PERCENT OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 THE INVENTORY YEARLY. WE ALSO GO THROUGHOUT THE STATE WE DO 2 NOT HAVE ANY KIND OF MOBILE LIBRATORY FOR THIS BUT WE SEND 3 INSPECTORS THROUGHOUT THE STATE TO ANY POINT IN THE JUSDICIAL 4 CHAIN WHERE WE FEEL THERE ARE PRODUCTS SOLD INCLUDING FLEET 5 MARKETS, SUPER MARKETS ANYWHERE, MANUFACTURERS, DISTRIBUTORS. 6 SOME OF THE TYPICAL VIOLATIONS THAT WE FIND ARE OF COURSE 7 VOLATILE ORGANIC COMPOUND LIMITS HIGHER THAN THE STANDARD 8 PRODUCTS THAT ARE NOT DAY COATED AND FOR AEROSOL COATINGS 9 IMPROPER LABELING REQUIREMENTS. 10 ONE PHENOMENON THAT WE HAVE RUN INTO THE LAST FEW 11 YEARS BUT NOT SO MUCH LATELY ARE WHAT WE CALL DIVERTED 12 PRODUCTS, THEY ARE PRODUCTS THAT ARE ILLEGAL FOR CALIFORNIA 13 USE AND ARE BROUGHT INTO OUR STATE WHERE THE LABELS ARE 14 DEFACED OR REMOVED SO THEY CANNOT BE TRACED BACK TO THE 15 MANUFACTURER. 16 WHEN WE FEEL WE ARE GETTING A HANDLE ON THAT 17 THEY'RE SOME VERY LARGE COMPANIES THAT ARE IMPORTING PRODUCTS 18 INTO THIS STATE AND A VERY LARGE SOURCE WITH AN EXCESS 19 EMISSIONS. THERE IS AREA WHERE THE AIR RESOURCES BOARD HAS 20 PRIMARY AUTHORITY IS CARGO TANK ENFORCEMENT. 21 THERE ARE OVER 4,000 CARGO TANKS CERTIFICATE 22 ANNUALLY. THESE ARE A PART OF THE VICTIM RECOVERY CHAIN 23 WHERE THE VAPORS FROM THE SERVICE STATION AND THE TERMINAL 24 ARE COLLECTED AND BROUGHT BACK FOR PROCESSING AT REFINERIES 25 OR TERMINALS AND IT IS A VERY LARGE SOURCE OF EMISSIONS THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 WE INSPECT IN THIS CASE ABOUT 4 PERCENT OF THE CARGO TANKS 2 ANNUALLY. 3 SOME OF THE COMMON VIOLATIONS THAT WE FIND ARE 4 EXCESS VAPOR LEAKS, LIQUID LEAKS, VAPOR VALVE WHICH IS INSIDE 5 THE TRUCK MALFUNCTIONING AND PEOPLE CERTIFYING TRUCKS 6 ILLEGALLY. ABOUT THE NON COMPLIANCE RATE THE CARGO TANKS IS 7 ABOUT 15 PERCENT AT THIS TIME AND AS YOU CAN SEE VAPOR VALVES 8 STAYS AND FAILURE OF THE PRESSURE TEST IS A MAJOR VIOLATION. 9 THE ASBESTOS PROGRAM AS I SAID, IS A PROGRAM THAT 10 IS SHARED BY THE AIR RESOURCES BOARD FOR NON DELEGATED 11 DISTRICTS AND FOR THE AIR RESOURCES BOARD SIDE WE ACTUALLY GO 12 TO SMALLER DISTRICTS AND ENFORCE THE ASBESTOS PROGRAM FOR 13 THEM AND WE RECEIVE NOTIFICATION AS WELL. THAT WOULD BE 16 14 DISTRICTS WHERE WE HAVE THIS AND DO THIS RESPONSIBILITY. 15 TYPICAL VIOLATIONS INCLUDE NON NOTIFICATION NOT 16 WETTING THE PRODUCT, IMPROBABLE DISPOSAL, INVISIBLE 17 EMISSIONS, IMPROPER LABELING, AND ESPECIALLY USING WORKERS 18 THAT ARE NOT CERTIFIED OR TRAINED. 19 THIS IS A CASE A SCENARIO OF A CASE THAT IN 20 IMPERIAL COUNTY IN WHICH THE IMPERIAL COUNTY DISTRICT 21 ATTORNEY HANDLED THE CASE AND IT WAS A VERY LARGE COMPANY 22 WHERE THEY HIRED A COMPANY THAT WAS NOT QUALIFIED TO DO THIS 23 WORK AND ON THE RIGHT SIDE YOU CAN SEE THIS ASBESTOS JUST 24 LAYING ON THE GROUND AND THIS CASE WAS JUST SETTLED IN THE 25 LAST COUPLE OF WEEKS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 THEY PAID A FINE OF $750,000 AND IT ALSO PUT 2 $500,000 INTO AN ESCROW ACCOUNT SO WHEN CLEANUP IS COMPLETED 3 THE AIR RESOURCE BOARD, PARTICULARLY MR. MORGESTER WILL GO 4 DOWN AND CERTIFY THAT THE CLEAN UP HAS BEEN DONE PROPERLY AND 5 ONLY THEN WILL THE $500,000 BE GIVEN BACK. 6 OF COURSE, ONE OF THE LARGEST SOURCES OF STATIONARY 7 SOURCE ENFORCEMENT IN THE STATE IS WHAT THE LOCAL DISTRICT 8 DO, OVER 35 DISTRICT IN THIS STATE AND THEY HAVE 40,000 9 SOURCES AND I THINK MS. WALSH EARLIER SAID THAT 300 10 INSPECTORS AND 150,000 PERMITTED UNITS AND SOME VERY LARGE 11 SOURCES AND CONSIDERING THE NUMBER OF SOURCES IT IS A LITTLE 12 BIT DIFFICULT FOR THEM TO GET TO THEM EVEN ONCE A YEAR. 13 AND SOME OF THE SMALLER SOURCE ONLY ONCE EVERY 14 THREE TO FOUR YEARS. SOME OF THE TYPICAL VIOLATIONS FOR 15 STATIONARY SOURCES THIS BEING THE REFINERY PHYSICAL EMISSIONS 16 A VERY DIFFICULT ENFORCEMENT PROBLEM AND ODOR NUISANCES WHERE 17 IT IS SOMETIMES DIFFICULT TO DETERMINE WHERE THE PROBLEM IS 18 AND HOW THE SOLVE IT, RECORD KEEPING, OPERATING WITHOUT A 19 PERMIT AND NOT IN COMPLIANCE WITH PERMIT CONDITIONS. 20 AND OF COURSE NOT MEETING YOUR RULE REQUIREMENT AND 21 TOXIC CONDITIONS AND EXCEEDENCE OF RECLAIM ANALYSIS. 22 STATIONARY SOURCE VIOLATION AND THERE IS A VERY BIG EXAMPLE 23 OF EXCESSIVE EMISSIONS. IMPROPER BURNING OF MATERIALS, 24 NUISANCE PROBLEMS, FAILURE TO OBTAIN AND POST PERMITS, BEING 25 OUT OF COMPLIANCE WITH YOUR PERMIT REQUIREMENTS SO THAT THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 SOURCE TESTING TYPICALLY STACKS EXCEEDING AND VIOLATION OF 2 CO, THIS THE TRUCK DUMPING SOLVENTS AT THE LANDFILL WITHOUT 3 CONTROL. THIS IS ONCE A SIGNIFICANT CASE THAT HAPPENED 4 SEVERAL YEARS AGO IN THE KERN COUNTY AREA, THE KERN COUNTY 5 DISTRICT ATTORNEY HANDLED THE CASE AND IT WAS A CASE WITH THE 6 TANK ON THE LEFT WAS SUPPOSED TO HAVE VAPOR RECOVERY FOR THE 7 PRODUCT THAT WAS IN THE TANK AND IT WAS ALSO A VOLATILE 8 PRODUCT, AND ONE EVENING WHEN IT WAS VERY COLD AND THE AIR 9 WAS HEAVY AND DAMP THE VAPORS CAME OUT ON THE TANK AND 10 COVERED THE ROAD THAT WAS NEXT DOOR AND THIS SAILOR THAT WAS 11 ON LEAVE DROVE BY AND THE SPARK FROM HIS CAR ACTUALLY IGNITED 12 HIS CAR AND BURNED IT UP AND BURNED HIM UP AND WHAT HAPPENED 13 WITH THIS CASE IS THE COMPANY HAD TO PAY 2.5 MILLION DOLLARS, 14 AND THEY HAD TO PUT ASIDE 2.5 MILLION DOLLARS FOR CLEANUP. 15 WE ALSO BESIDES THE LOCAL DISTRICTS AND THE AIR 16 RESOURCES BOARD WE PARTICIPATE IN MULTI MEDIA WITH OTHER 17 AGENCIES, WE HAVE TASK FORCES THROUGHOUT THE STATE, A LOT OF 18 TASK FORCES COUNTY BASED AND REGIONAL BASED AND WE WORK WITH 19 FEDERAL PEOPLE AND OTHER CAL EPA AGENCIES, POLICE AGENCIES, 20 FISH AND GAME AND A LOT OF REGULATORY AGENCIES AND ONE OF 21 THEM IS IN THE TASK FORCE. THIS IS A MAP THAT SHOWS THE TASK 22 FORCE THAT ARE IN PLACE THROUGHOUT THE STATE. THIS IS A BIG 23 PRIORITY WITH CAL EPA. AND IT HAS BEEN A VERY POSITIVE 24 PROGRAM. 25 YOU CAN SEE THAT TASK FORCES ARE OF ALL DIFFERENT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 DESCRIPTIONS. STATE, COUNTY, U S, ET CETERA, FEDERAL, A LOT 2 OF DIFFERENT PEOPLE IN THESE TASK FORCES. FOR STATIONARY 3 SOURCE PENALTIES WE HAVE CIVIL PENALTIES WHICH ARE VERY 4 SIMILAR TO CRIMINAL PENALTIES ONLY THEY DO NOT INVOLVE ANY 5 JAIL TIME AND THEY GO FROM A $1,000 A DAY RESTRICT LIABILITY 6 UP TO $50,000 A DAY FOR WILLFUL AND INTENTIONAL VIOLATIONS. 7 CRIMINAL FELONIES ARE VERY SIMILAR AND LIKE I SAID THEY DO OR 8 CAN INVOLVE JAIL TIME AS WELL. 9 THE LAST SLIDE THAT I WILL TALK ABOUT IS THE NEW 10 GROUP OF ABOUT FIVE PEOPLE IN THE COMPLIANCE DIVISION NOW AND 11 THEY HANDLE CASES THAT ARE VERY DIFFICULT CASES MAYBE WITH 12 ELEMENTS THAT ARE NOT THAT DESIRABLE. THIS PERSON IS SETTING 13 UP A CO-BERG CAMERA WHERE WE CAN LEAVE ON-SITE FOR SOURCES 14 THAT MIGHT VIOLATE OVER TIME OR WOULD REQUIRE A LOT OF 15 SURVEILLANCE. 16 AND WITH THAT I WILL TURN THE PRESENTATION BACK TO 17 MS. WALSH AND SHE WILL TALK ABOUT THE LEGAL DIVISION. 18 MS. WALSH: ONE FINAL RESOURCE THAT WE BRING TO 19 THESE ENFORCEMENT ACTIVITIES IS THE STAFF FROM THE OFFICE OF 20 LEGAL AFFAIRS. WE ARE INVOLVED IN A BROAD RANGE OF THE 21 ENFORCEMENT ACTIVITIES THAT HELP DEVELOP AND PRESENT TRAINING 22 AND COMPLIANCE ASSISTANCE MATERIALS TO MAKE SURE THAT WE ARE 23 GETTING THOSE ALL LEGALLY RIGHT AND CORRECT WHEN WE ARE OUT 24 THERE PROVIDING INFORMATION TO THE PUBLIC ABOUT THE RULES 25 THAT AFFECT THEIR BUSINESSES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 WE ARE INVOLVED IN CASE DEVELOPMENT, OFTEN TIMES 2 FROM EARLY ON IN THE CASE, INSPECTORS OR INVESTIGATORS WILL 3 DETERMINE THAT THERE ARE ISSUES OR DIFFICULTIES THAT WILL 4 REQUIRE SOME LEGAL EFFORTS UP FRONT INCLUDING DEVELOPING 5 LEGAL OPINIONS OR SEEKING LEGAL PROCESS TO GAIN ACCESS TO 6 SITES OR INFORMATION THAT WE WOULD NEED TO ASSESS ABILITIES 7 COMPLIANCE AND NON COMPLIANCE WITH THE LEGAL REGULATIONS. 8 THIS OFFICE IS ACTIVELY INVOLVED IN THE CASE RESOLUTION 9 PROCESS. THE VAST MAJORITY OF THE CASES ARE MATTERS THAT ARE 10 DEVELOPED AT THE AIR RESOURCES BOARD OR SOLD INFORMALLY 11 THROUGH THE SETTLEMENTS AND WHEN I SAY INFORMALLY THESE 12 SETTLEMENTS WOULD BE REDUCED TO SETTLEMENT AGREEMENTS WHICH 13 OFTEN INVOLVE SPECIFIC DIRECTIONS REGARDING THE KINDS OF 14 ACTIVITIES, MONITORING ACTIVITY THAT A SOURCE WOULD INTAKE 15 CHANGES IN THE FACILITY OR IN THEIR OPERATIONS TO ASSURE 16 COMPLIANCE IN THE FUTURE, PENALTIES, AND OTHER TYPES OF 17 MECHANISMS THAT WE FIND HELPFUL TO MAKE FOLKS NOT ONLY COME 18 INTO COMPLIANCE WHEN THEIR FAMILIES ARE IN VIOLATION BUT THAT 19 THEY WOULD STAY IN COMPLIANCE OVER THE LONG RUN. 20 WE ARE INVOLVED IN ADJUDICATION OF CASES IN THOSE 21 RARE INSTANCES WHERE WE ARE NOT ABLE TO SETTLE CASES. WE 22 FIND THAT SETTLEMENTS TYPICALLY COME ABOUT SITTING DOWN THE 23 FOLKS AND SPEND A LITTLE BIT OF TIME TALKING ABOUT THE 24 INFORMATION THAT WAS DEVELOPED AND COMING TO AN AGREEMENT 25 WITH THE SOURCE ABOUT WHAT IS ACTUALLY HAPPENING AND BRINGING PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 THEM TO A PLACE WHERE THEY UNDERSTAND THE APPLICATION OF THE 2 LAW AND THAT TYPICALLY GETS US RESOLUTION OF THE CASE. WHERE 3 THAT DOES NOT HAPPEN WE HAVE ADJUDICATION THAT IS 4 ADMINISTRATIVE IN NATURE OR TRADITION TYPE OF PROCEEDINGS 5 WHICH MAY BE CRIMINAL PROCEEDINGS OR THE LEGAL OFFICE WORKS 6 WITH INSPECTORS IN INVESTIGATORY STAFF TO DETERMINE 7 APPROPRIATE REFERRALS WHERE THAT IS NECESSARY AND WE WOULD 8 TYPICALLY REFER AN ITEM THAT LOOKS LIKE IT SHOULD HAVE A 9 CRIMINAL TREATMENT TO A LOCAL D A OR U.S. ATTORNEYS OFFICE WE 10 WORK CLOSELY WITH THE STATE ATTORNEYS GENERAL OFFICE WITH A 11 LARGER CIVIL ACTION WHERE SOME SORT OF A ADJUDICATION MAY BE 12 NECESSARY TO BRING ACTION TO COMPLETION. 13 FINALLY I WOULD LIKE TO MENTION ONE ISSUE THAT I 14 THINK IS AN IMPORTANT PART OF AN EFFECTIVE ENFORCEMENT 15 PROGRAM AND A VERY BRIGHT PERSON WHO ONE TIME SAID IT IS HARD 16 TO CONTROL SOMETHING IF YOU CANNOT MEASURE IT. 17 WE SPENDS A LOT OF TIME TRYING TO COME UP WITH 18 EFFICIENT EFFECTIVE WAYS TO MEASURE THE EFFECTIVENESS OF THE 19 USE OF OUR ENFORCEMENT RESOURCES. WE HAVE BEEN INVOLVED WITH 20 SOME EFFORTS FROM U. S. EPA BOTH REGIONALLY AND NATIONALLY 21 LOOKING AT AND INVESTIGATING THE CREATION OF ALTERNATIVES FOR 22 PERFORMANCE MEASURES THAT WILL ALLOW US TO GET BETTER AT 23 IDENTIFYING THOSE TYPES OF ENFORCEMENT ACTIVITIES THAT 24 MAXIMIZE THE PUBLIC HEALTH PROTECTION AND EMISSION REDUCTION 25 IMPROVEMENTS AS OPPOSED TO THE TRADITIONAL TYPES OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 MEASUREMENT THAT WE HAVE WHICH IS A NUMBER OF CASES, NUMBER 2 OF FILING, AMOUNT OF PENALTIES, HOW MANY CASES ARE CLOSED, 3 THOSE ARE THE THINGS THAT ARE STILL IMPORTANT MEASURES FOR 4 HOW WELL WE ARE USING OUR RESOURCES BUT WE ARE LOOKING FOR 5 SOMETHING THAT PROVIDES US WITH A MORE ROBUST WAY OF MAKING 6 THOSE TYPES OF JUDGMENTS. 7 SPECIFICALLY ONE OF THE WAYS THAT WE ARE DOING THAT 8 RIGHT NOW IS THROUGH RULE EFFECTIVENESS STUDIES, RATHER THAN 9 GOING INTO FOR EXAMPLE, THE DISTRICT IN AN AUDIT CAPACITY AND 10 TAKE A LOOK AT THEIR ENFORCEMENT PROGRAM AND COME TO AN 11 OVERALL CONCLUSION OF HOW GOOD THE ENFORCEMENT PROGRAM IS. 12 WE ARE GOING IN AND TAKING A SPECIFIC RULE OR 13 PROGRAM, GOING OUT TO A SIGNIFICANT NUMBER OF SOURCES IN A 14 REPRESENTATIVE NUMBER OF LARGE DISTRICTS AND SMALL DISTRICTS 15 AND LOOKING AT HOW WELL, THE RULE IS BEING COMPLIED WITH OVER 16 THAT SPECIFIC NUMBER OF SOURCES. 17 THAT GIVES US A GOOD SENSE OF THE IMPORTANT ISSUES 18 THAT IS A RULE UNDERSTANDABLE OR ENFORCEABLE AS WRITTEN AND 19 WHAT ARE THE PROBLEMS THAT ARE PREVENTING FOLKS FROM 20 COMPLYING FOR THAT AND IS THAT A PROBLEM AND GIVES US A MUCH 21 BETTER ROAD MAP FOR DETERMINING WHAT WE OUGHT TO DO TO 22 IMPROVE COMPLIANCE IN THOSE SPECIFIC AREAS. 23 THEN FINALLY IN CONCLUSION, WE ALL AGREE I THINK 24 AND ARE HERE TODAY OR THIS AFTERNOON BECAUSE WE BELIEVE THAT 25 ENFORCEMENT IS ESSENTIAL TO INSURING THE EFFECTIVENESS OF THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 AIR QUALITY MEASURES THAT THE AIR RESOURCES BOARD STAFF AND 2 BOARD PUTS SO MUCH TIME AND ENERGY INTO PUTTING IN PLACE. 3 THE THREE COMPONENTS OF AN ENFORCEMENT PROGRAM AS 4 WE DISCUSSED, TRAINING, COMPLIANCE ASSISTANCE, AND DIRECT 5 ENFORCEMENT OR INSPECTION OF AN INVESTIGATION, EACH ONE OF 6 THESE COMPONENTS IS NECESSARY TO AN EFFECTIVE ENFORCEMENT 7 PROGRAM BUT NONE IS SUFFICIENT IN AND OF ITSELF SO WE TRY TO 8 DEPLOY OUR ENFORCEMENT RESOURCES IN A WAY TO COVER ALL OF 9 THOSE BASES. 10 WE BELIEVE THAT ENFORCEMENT PROGRAM THAT IS 11 CONCEIVED AND CARRIED OUT IN THIS FASHION IS COST EFFECTIVE 12 IT DOES BRINGS EMISSION REDUCTIONS THAT ARE SO NECESSARY TO 13 ACHIEVING THE QUALITY GOALS IN CALIFORNIA. 14 AND FINALLY I GUESS THIS IS THE PITCH FOR THE FOLKS 15 OUT THERE IN THE FIELD DOING A LOT OF HARD WORK AND WHO 16 UNDERSTAND WHAT, AND ALTHOUGH THEY REPRESENT 10 PERCENT OF 17 OUR RESOURCES WE BRING TO AIR QUALITY IMPROVEMENT IN 18 CALIFORNIA, THAT EVERY ADDITIONAL INSPECTOR OR INVESTIGATOR 19 THEY GET THEY HAVE SOME PLACE TO PUT THAT PERSON AND GET 20 ADDITIONAL EMISSION REDUCTIONS AND MORE HEALTH PROTECTION, 21 THANK YOU. 22 CHAIRMAN LLOYD: THANK YOU VERY MUCH. ONE QUESTION 23 FOR CHUCK, WHEN YOU TALKED ABOUT COMPLIANCE WITH RECLAIM, HOW 24 IS THAT GOING? 25 IS THAT WHERE THE RECIPE COMES INTO PLACE? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 MR. MORGESTER: RIGHT, BECAUSE WE RECENTLY ARE IN 2 THE PROCESS OF DOING A AUDIT AND QUITE FRANKLY WE ARE 3 SOMEWHAT DISAPPOINTED IN THE FINE LEVEL BY LEAKING VIOLATIONS 4 AND WE ARE WORKING WITH THE SOUTH COAST AIR QUALITY 5 MANAGEMENT DISTRICT TRYING TO STRENGTHEN THAT PROGRAM. 6 CHAIRMAN LLOYD: THE COMMENT WAS TO BE 10 PERCENT 7 WAS THAT A PLEA FOR MORE OR HOW MANY YOU COULD DO WITH LESS? 8 MS. WALSH: WELL, WE WILL DO A GOOD JOB WITH 9 WHATEVER RESOURCES WE HAVE BUT IT WAS TO LEAVE YOU WITH THE 10 MESSAGE THAT FOR EVERY ADDITIONAL RESOURCE WE WILL REDOUBLE 11 OUR EFFORTS AND GET YOU MORE BENEFIT OUT OF OUR ENFORCEMENT 12 PROGRAM. 13 CHAIRMAN LLOYD: I CERTAINLY APPRECIATE THE 14 BRIEFING, AND I AM IMPRESSED WITH THE DEPTH AND BREADTH OF 15 WHAT IS GOING ON. 16 I'M IMPRESSED WITH THE WORK THAT IS GOING ON. 17 ANY QUESTIONS FROM THE BOARD OR COMMENTS? 18 BOARD MEMBER RIORDAN: NO. 19 I WOULD JUST LIKE TO SAY, MR. CHAIRMAN, SPEAKING 20 BACK TO A TIME WHERE THERE WAS IN MY DISTRICT A GENTLEMAN 21 THAT HAD SOME PROBLEMS WITH ILLEGAL FUELS AND KNEW SOMETHING 22 ABOUT THEM AND I MUST SAY THAT EVEN THOUGH WE NEVER CONVINCED 23 HIM TO MOVE FORWARD TO GIVE US THE INFORMATION AND PROMISE 24 HIM AMITY THE STAFF WAS THERE TO HELP HIM AND HE FELT VERY 25 THREATENED AND UNFORTUNATELY AND THESE ARE SOME SERIOUS CASES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 AND YOU ARE DEALING WITH PEOPLE THAT HAVE LITTLE OR NO 2 RESPECT FOR THE LAW, AND YOU KNOW, I REALLY APPRECIATED WHAT 3 EFFORT OUR STAFF MADE TO TRY TO GET THIS MAN TO GIVE US THE 4 INFORMATION SO WE GO MOVE FORWARD BUT AND I AM HOPING THAT 5 OTHERS ARE A LITTLE BRAVER IN WORKING WITH SOME OF THOSE 6 ELEMENTS THAT ARE REAL SERIOUS CRIMINALS, THAT IS WHAT THEY 7 ARE. 8 THERE ARE A LOT OF PEOPLE THAT WE DEAL WITH THAT 9 UNFORTUNATELY THAT UNFORTUNATELY MAKE ERRORS AND THEN THERE 10 IS THIS OTHER CRIMINAL SIDE AND I DO NOT THINK PEOPLE REALLY 11 RESPECT YOU ENOUGH FOR HAVING TO WORK WITH THAT ELEMENT. 12 BOARD MEMBER DESAULNIER: I WILL BE CAREFUL FOR 13 WHAT I SAY BECAUSE MIKE AND I WERE LISTENING BUT I DID HEAR 14 THAT THING ABOUT ORGANIZED CRIME SO I AM AFRAID I MIGHT SAY 15 SOMETHING THAT MIGHT IRRITATE SOMEBODY THAT MIGHT HAVE SOME 16 INFLUENCE THAT WHO WILL BE SOMEONE WHO ARE INTIMIDATING AND 17 SAY -- 18 ONE OF THE COMPLAINTS THAT I GET IN CONTRA COSTA 19 COUNTY AND I THINK THAT THERE IS STILL IN THE -- BUSINESS 20 AND TRUST IN SOME OF THE COLLABORATIONS AND OTHER GOVERNING 21 BODIES BUT FOR INSTANCE IF THERE IS A STATIONARY SOURCES OVER 22 THERE AND BOTH CHEVRON AND TOSCO NOW YOU WILL HAVE THE COUNTY 23 HEALTH DEPARTMENT AND NOW THE NATIONAL CHEMICAL SAFETY AND 24 INVESTIGATOR BOARDS SO TO BE FAIR AND COLLABORATE SO THOSE 25 ARE THE INSTANCES THAT TOSCO THERE ARE THREE ROOT CAUSE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 ANALYSIS AND HOW WE ALL COLLABORATE AND BASICALLY USE THE 2 BEST BANK FOR THE BUCK SO TO SPEAK, AND TO MAKE SURE IT IS 3 FOCUSED AND GET THE BEST RESULTS OPPOSED TO HAVING FREE 4 REDUNDANT PROCESS AND ALL COME TO THE SAME CONCLUSION FROM 5 THE DIFFERENT AUTHORITIES. SO JUST ANY COMMENTS OR ANY KIND 6 OF RESPONSES ON HOW TO MOVE THAT WAY. 7 MS. WALSH: WE CERTAINLY AGREE WITH THAT STATEMENT 8 AND SEDIMENT AND SPEND A GREAT DEAL OF TIME WORKING WITH 9 OTHER JURISDICTIONS IN THE STATE THAT WOULD BE SOME OF THE 10 SISTER AGENCIES THAT ARE AT CAL EPA AND I BELIEVE CHUCK 11 MENTIONED THAT WE WORK WITH THE BUREAU OF AUTOMOTIVE REPAIRS, 12 AND WE WORK SOMETIMES WITH THE BOARD OF EQUALIZATION. 13 WE TRY TO TAKE EVERY OPPORTUNITY THAT WE CAN AND 14 CREATE OPPORTUNITIES FOR THE FOLKS THAT ARE OUT THERE IN THE 15 FIELDS DOING THESE KINDS OF INSPECTION AND VISITS TO GET 16 TOGETHER AND WORK TOGETHER TO UNDERSTAND THE OTHER REGULATORY 17 PROGRAMS AND ENFORCEMENT PROGRAMS JUST SO WE CAN AVOID 18 DUPLICATION OF RESOURCES, AND TRY TO DEPLOY THE FOLKS WHO ARE 19 GOING TO BE THE BEST ABLE TO MAKE SOMETHING OF AN INSPECTION 20 CASE AND WHERE WE ARE NOT THE FOLKS OR THAT AGENCY SAVE OUR 21 RESOURCES FOR SOME PLACE WHERE WE CAN REALLY GET THE BANK FOR 22 THE BUCK. WE DO MAKE GREAT EFFORTS TO CREATE AS MUCH OF A 23 NETWORK THAT WE CAN OF THE STATE, FEDERAL AND LOCAL LEVEL AND 24 EVEN BEYOND THE ENVIRONMENTAL AGENCIES THAT WE WORK WITH. 25 CHAIRMAN LLOYD: THANK YOU. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 BOARD MEMBER EDGERTON: I JUST WANT TO SAY THAT I 2 NOTICED THE GRAPHS, THEY ARE KIND OF DARK BUT THE GRAPHS DID 3 SHOW THE SUCCESS AND I THINK THE ENFORCEMENT PROGRAM HAS BEEN 4 VERY SUCCESSFUL, THANK YOU. 5 CHAIRMAN LLOYD: WE HAVE ONE BRAVE WITNESS, CHARLIE 6 PETERS. 7 MR. PETERS: MR. ALAN LLOYD AND MEMBERS OF THE 8 BOARD, THANK YOU FOR THE COMMENTS THAT I AM BRAVE. 9 I DO NOT KNOW THAT THAT IS TRUE. BUT THIS SUBJECT 10 HAS BEEN VERY INTERESTING TO ME FOR QUITE SOMETIME. AND 11 EVERYTHING THAT I HEARD SAID SOUNDED ABSOLUTELY VALID AND 12 IMPORTANT AND IMPORTANT FOR THE PROCESS IN GETTING, OF MAKING 13 FOR BETTER AIR, AND BETTER STATE OF CALIFORNIA. 14 BUT I PERCEIVE THAT THERE IS A OPPORTUNITY THAT THE 15 AIR RESOURCES BOARD COULD CERTAINLY ASSIST WITH, AND THAT IS 16 THE ENFORCEMENT IN THE AUTOMOTIVE REPAIR INDUSTRY. 17 IT IS OUR OPINION THAT AS AN EXAMPLE IN THE SMOG 18 CHECK PROGRAM, OF ALL OF THE DATA AND INFORMATION THAT WE 19 HAVE SEEN FROM THAT PROGRAM FROM THE ADMINISTRATION IN 20 PROBABLY THE LAST EIGHT YEARS SAID THAT THAT PROGRAM HAD NO 21 EFFECT. 22 I DO NOT AGREE WITH THAT. BUT WE ARE REQUIRING ALL 23 THE MINI MOTORIST IN THE STATE OF CALIFORNIA TO PARTICIPATE 24 IN THAT PROGRAM AND NOT REALLY TAKING ANY CREDIT FOR WHAT IT 25 DOES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 TO GIVE YOU AN EXAMPLE OF A METHOD THAT HAS BEEN 2 UTILIZED AND HAS BEEN VERY SUCCESSFUL OR HAS BEEN STATED TO 3 BE VERY SUCCESSFUL THE GENTLEMEN WROTE THE LETTER TO THE 4 PREVIOUS GOVERNOR CONCERNING AN ENFORCEMENT PROBLEM WITHIN 5 THE LEVEL WHERE IT APPEARS THAT HE USES EXAMPLES SOMETHINGS 6 WHAT HAPPENED WAS IT WAS A OSHA INSPECTOR IN THE STATE OF 7 MAINE, IT WAS THE NUMBER ONE OSHA INSPECTOR IN THE COUNTRY, 8 HAD THE MOST AMOUNT OF FINES AND THE HIGHEST QUANTITY OF 9 FINES OF ANY OSHA INSPECTOR IN THE NATION AND HE LOOKED AT 10 THE RECORD IN THE WORKPLACE AND SAFETY AND FOUND THAT THEY 11 WERE LAST. 12 DEAD LAST PLACE. SO HE WENT TO THE SUPERVISOR AND 13 HE SAID, YOU KNOW I KIND OF THINK THERE IS A OPPORTUNITY HERE 14 TO DO THINGS A LITTLE DIFFERENTLY. I WOULD LIKE TO TRY 15 SOMETHING WHAT DO YOU THINK? THE RESULT OF THAT WAS THAT THE 16 OSHA INSPECTOR WENT OUT AND WORKED ON TRYING TO GET WORKPLACE 17 SAFETY COMPLIANCE AND THE RESULT OF THAT WERE THAT THE STATE 18 OF MAINE WENT FROM DEAD LAST IN THE COUNTRY TO ALMOST FIRST 19 PLACE IN THE COUNTRY AND MY FRIENDS SAW THIS OBSERVATION, AND 20 I THINK IT WAS ON C SPAN OR ONE OF THOSE KINDS OF PROGRAMS, 21 PEOPLE COMMUNICATING ABOUT THIS METHOD OF MANAGEMENT AND HOW 22 EFFECTIVE IT WAS AND HOW THIS IS HOW GOVERNMENT SHOULD ACT 23 AND IT WAS MR. RUSH, OUR VICE PRESIDENT AND OUR PRESIDENT 24 SAYING THAT THIS IS HOW IT SHOULD WORK. 25 BASED ON THAT PAST PRACTICE IN THE STATE OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 CALIFORNIA IN A UNDER COVER PARKED CAR PROGRAM THAT WAS 2 STARTED IN 1986 AND ENDED IN 1991, WHERE WE SET A STANDARD 3 FOR REQUIRED EQUIPMENT UNDER THE HOOD AND RAN LESS THAN 100 4 CARS PER STATION AND WE CHANGED THE EFFECT OF THE PROGRAM ON 5 GETTING COMPLIANCE OUT OF THE STATION PROBABLY OVER 80 6 PERCENT ALLIANCE TO OVER 80 PERCENT COMPLIANCE BECAUSE WE SAT 7 AND DEMANDED SOME CHANGES IN BEHAVIOR. 8 I AM ABSOLUTELY CONVINCED THAT IF WE TREATED THAT 9 INDUSTRY BY DEMANDING THAT THERE WAS COMPLIANCE, BY GOING IN 10 AND AUDITING AND THERE WAS A VERY INTERESTING SUBJECT THAT 11 CAME UP TODAY AND TALKING ABOUT HOW YOU CAN REGULATE FUELS, 12 AND GOING OUT WITH THE TEST LAB AND INFORMED THE ENTITY THAT 13 IS TESTED IMMEDIATELY AS TO RESULTS AND SO FORTH SO 14 COMPLIANCE CAN BE ADDRESSED IMMEDIATELY. 15 WE HAVE CURRENTLY HAVE SITUATIONS IN AUTOMOTIVE 16 REPAIR WHERE WE HAVE SIGNIFICANTLY NONCOMPLIANCE ISSUE WHERE 17 IT IS UP TO A YEAR BEFORE THE STATION EVEN FINDS OUT THERE IS 18 A PROBLEM. 19 WE THINK THAT THE MOBILE SOURCE IS AN IMPORTANT 20 SOURCE AND WE WOULD VERY MUCH APPRECIATE IT IF THE BOARD, THE 21 AIR RESOURCES BOARD CONSIDER THE POSSIBILITY OF HAVING A 22 LITTLE PILOTS STUDY WHICH WAS AGREED TO IN MAY OF 1993 TO 23 FIND OUT IF WE CAN DO THIS A LOT BETTER THEN THE PUBLIC AND 24 THE STATE OF CALIFORNIA DESERVES BETTER. MUCH BETTER AND I 25 WOULD BE HAPPY TO ANSWER ANY QUESTIONS. I WOULD LIKE TO ADD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 ANOTHER LITTLE THING BEFORE I SHUT THAT OFF. 2 I JUST NOTICED THIS WEEKEND IN THE CHRONICLE THAT 3 THE GOVERNOR MAY NOT LIKE THE CHRONICLE VERY MUCH RIGHT NOW, 4 BUT WAS TALKING ABOUT AN ARTICLE THAT WAS ON SAVING THE AIR, 5 100,000 CARS, SUPPOSEDLY DID NOT DRIVE ON A SAVE THE AIR 6 RESULTING IN 4 TONS OF REDUCTION, THAT IS ABOUT FOUR-TENTHS 7 OF A FLEET, ABOUT 4 TONS IN ONE DAY, BECAUSE THE CARS WERE 8 NOT DRIVEN. 9 I PROPOSE TO YOU THAT WITH THE NUMBER OF TONNAGE 10 REDUCTION THAT CAN BE QUANTIFIED, JUSTIFIED AT BEING REDUCED 11 WITH A PROPERLY RANGE SMOG CHECK PROGRAM AND JUST WITH THAT 12 PART WHICH THERE ARE MUCH BROADER ISSUES THAN WITH AUTOMOTIVE 13 REPAIR THAT I DO NOT BELIEVE THAT THE AIR RESOURCE BOARD HAS 14 COEFFICIENCY INVOLVED IN THAT THEY ARE GETTING A HIGHER 12 15 TONS OF REDUCTION AND THAT IS NOT EVEN A GRAIN OF SAND ON THE 16 BEACH AND I THINK THERE ARE MANY THOUSANDS OF TONS REDUCTION 17 THAT COULD BE GOTTEN WITHOUT BEING ADVERSARIAL WITHOUT PAYING 18 HUGE FINES AND SO ON AND ALL THE OTHER ISSUES THAT YOU TALKED 19 ABOUT ARE CRITICALLY IMPORTANT TO GET COMPLIANCE. WE NEED TO 20 CHANGE OUR MANAGING OF THE PROGRAM TO GET HUGE REDUCTIONS OF 21 EMISSIONS. AND I WILL BE HAPPY TO ANSWER ANY QUESTIONS. 22 CHAIRMAN LLOYD: SOUNDS LIKE AN OPPORTUNITY FOR MR. 23 CACKETTE TO COMMENT ON. 24 MR. CACKETTE: DO I GET THE LAST WORD HERE? 25 CHAIRMAN LLOYD: I DON'T WANT YOU TO GET BORED. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 MR. CACKETTE: MY COMMENT WOULD BE THAT I AGREE 2 WITH MR. PETERS THAT WHAT WE NEED IS QUALITY IN THE SMOG 3 CHECK AND HOW WE GET IT IS AT ISSUE, BUT I THINK BY LISTENING 4 TO THE PRESENTATION THAT YOU HEARD BEFORE, I HAVE TO DISAGREE 5 WITH HIM THAT ENFORCEMENT IS NOT AN IMPORTANT PART. 6 WE HAVE SEEN IN THE LOG CHECK PROGRAM A CRIMINAL 7 ELEMENTS THE FIRST BIG SWEEP THAT WE DID WITH THE B A R IN 8 SOUTHERN CALIFORNIA THAT PUT 30 PEOPLE IN JAIL AND WE FOUND 9 GUNS AND OTHER CRIMINAL ACTIVITIES ASSOCIATED WITH SOME OF 10 THEM AND THOSE PEOPLE WERE PROCESSING HUGE NUMBERS OF CARS 11 WITHOUT EVER TESTING THEM AND WITH THAT KIND OF ENFORCEMENT 12 NOT COOPERATIVE HANDS HOLDING TYPE ACTIVITY IS APPROPRIATE 13 AND IN OTHER CASES, I THINK PEOPLE ARE EITHER WITHOUT CERTAIN 14 SKILLS OR JUST CUTTING CORNERS AND A PRESENCE AND NOT 15 NECESSARILY A PRESENCE OF HEAVY HANDED ENFORCEMENT BUT A 16 PRESENCE THAT WE KNOW YOU ARE NOT DOING IT QUITE RIGHT BUT 17 YOU KNOW IT HELPS FOR THEM FOR CERTAIN PERSON OR SHOPS TO 18 KNOW THAT WE KNOW THAT THAT CAN ENCOURAGE QUALITY IN THE 19 INSPECTION AND REPAIR PROCESS AND THAT IS IMPORTANT BECAUSE 20 THIS PROGRAM HAS A TENDENCY TO HAVE THE LEAST COMMON 21 DENOMINATOR PROGRAM AND IN OPERATES IN ECONOMIC COMPETITION 22 AND THE SMOG CHECK PROGRAM AS A RESULT IS TO BE DRIVEN BY THE 23 LEAST PERFORMING LOWEST COST FOLKS IN THE MARKET PLACE AND 24 THAT CAN BE A NEGATIVE AS WE HAVE SEEN FOR AIR QUALITY 25 BECAUSE PEOPLE CUT CORNERS AND DO ZERO REPAIRS AND THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 CUSTOMERS TRIES TO GETS OUT FOR THE LEAST DOLLAR RATHER THAN 2 GETTING THEIR CAR FIXED. 3 AND TO THAT EXTENT I THINK THAT CHARLIE'S BELIEF IN 4 QUALITY ASPECT IN COOPERATION AMONGST GOVERNMENT IS VERY GOOD 5 AND I THOUGHT THAT IF WE HAD THAT IN OUR ENFORCEMENT PROGRAM 6 SMOG CHECK AS WELL AS WITH COMPLIANCE ASSISTANCE AND THOSE 7 KINDS OF THINGS. 8 SO I THINK IT HAS TO BE A COMBINATION OF BOTH HARD 9 ENFORCEMENT FOR SOME CASES AND QUALITY AND COMPLIANCE 10 ASSISTANCE IN OTHER CASES. 11 MR. PETERS: IF I COULD RESPOND TO THAT. 12 I COULD NOT AGREE WITH YOU MORE ABOUT WHAT TOM HAD 13 TO SAY BUT I KIND OF WONDERED IF WE DON'T NEED A COMBINATION 14 OF THE TWO WHERE WE GO AND ASK FOR COMPLIANCE AND WE DON'T 15 GET IT AND WE HAVE THE BIG GUNS THERE TO GO MAKE SURE THEY 16 GET COMPLIANCE AND BASED ON PAST PRACTICE WE HAVE SEEN HUGE 17 CHANGES IN BEHAVIOR THERE AND COULD BENEFIT IN HUGE REDUCTION 18 EMISSIONS SO ALL OF THIS AND I AM NOT JUST COUNTING ANY OF 19 THE THINGS THAT ARE ON THE TABLE BUT I THINK THERE IS A HUGE 20 OPPORTUNITY TO BE CONSIDERED IN A SMALL PILOT PROJECT THAT 21 COULD PROVE THAT THAT WOULD BE QUITE EFFECTIVE AND WORTH 22 CONSIDERATION OF A BROADER BASE. 23 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 24 I GUESS IT LOOKS LIKE THERE ARE NO MORE 25 PRESENTATIONS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 ARE THERE ANY OTHER WRITTEN COMMENTS THAT NEED TO 2 BE ENTERED INTO THE RECORD? 3 MS. WALSH: NO. 4 CHAIRMAN LLOYD: ANY FURTHER COMMENTS, MR. KENNY. 5 MR. KENNY: NO. 6 CHAIRMAN LLOYD: I GUESS IF IT IS NOT A REGULATORY 7 ITEM, IT IS NOT NECESSARILY TO OFFICIALLY CLOSE THIS IN THE 8 RESOLUTION, AND WE WILL MOVE ON TO THE OPEN COMMENT PERIOD, 9 AND WE HAVE NO ONE SIGNED UP TO PROVIDE ANY COMMENTS HERE 10 BEFORE CLOSING. 11 AGAIN, I WOULD LIKE TO THANK THE STAFF HERE FOR 12 MAKING THE ARRANGEMENTS FOR COMING HERE AND THE BAY AREA 13 STAFF AGAIN VERY MUCH AND THANK YOU ALL. 14 I GUESS THAT COMPLETES THE AGENDA, SO I WILL 15 ENTERTAIN A MOTION TO ADJOURN. 16 BOARD MEMBER DESAULNIER: BEFORE WE DO, I JUST 17 WOULD LIKE TO APOLOGIZE FOR THE SOUND SYSTEM. THERE IS NO 18 TRUTH TO THE RUMOR THAT WE ARE DELIBERATELY TRYING TO 19 SABOTAGE CERTAIN MIKES. 20 (THEREUPON THE REGULAR BOARD MEETING 21 OF THE AIR RESOURCES BOARD WAS ADJOURNED 22 AT 5:30 P.M.) 23 --O0O-- 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. OGELVIE, A CERTIFIED SHORTHAND 4 REPORTER OF THE STATE OF CALIFORNIA, DO HEREBY CERTIFY: 5 THAT I AM A DISINTERESTED PERSON HEREIN; THAT THE 6 FOREGOING HEARING WAS REPORTED IN SHORTHAND BY ME, VICKI L. 7 OGELVIE, A CERTIFIED SHORTHAND REPORTER OF THE STATE OF 8 CALIFORNIA, AND THEREAFTER TRANSCRIBED INTO TYPEWRITING. 9 I FURTHER CERTIFY THAT I AM NOT OF COUNSEL OR 10 ATTORNEY FOR ANY OF THE PARTIES TO SAID HEARING NOR IN ANY 11 WAY INTERESTED IN THE OUTCOME OF SAID HEARING. 12 IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND 13 THIS FIRST DAY OF AUGUST, 1999. 14 15 16 VICKI L. OGELVIE 17 CERTIFIED SHORTHAND REPORTER LICENSE NO. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345