BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY COASTAL HEARING ROOM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA THURSDAY, SEPTEMBER 20, 2001 9:00 A.M. JAMES F. PETERS, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 10063 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Dr. Allan Lloyd, Chairperson Dr. William Burke Mr. Joseph Calhoun Mrs. Barbara Riordan Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Mr. Matthew McKinnon Supervisor Barbara Patrick STAFF Mr. Mike Kenny, Executive Officer Mr. Tom Cackette, Deputy Executive Officer Mr. Mike Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Mr. Don Ames, Assistant Chief Mr. Bart Croes, Chief, Research Division Mr. Bob Cross, Chief, Mobile Source Control Division Ms. Barbara Fry, Chief, Measures Assessment Branch Mr. Jose Gomez, Manager, Technical Development Section Ms. Annette Hebert, Chief, Heavy-Duty Diesel In-Use Strategies Branch Ms. Diane Johnston, Senior Staff Counsel Ms. Leslie Krinsk, Senior Staff Counsel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Ms. Annmarie Mora, Air Pollution Specialist Mr. Kirk Oliver, Senior Staff Counsel Mr. George Poppic, Staff Counsel Ms. Dinh Quach, Air Pollution Specialist Ms. Nancy Steele, Manager, Retrofit Implementation Section Mr. Michael Tollstrup, Chief, Project Assessment Branch Mr. Peter Venturini, Chief, Stationary Source Division Mr. Mark Watkins, Air Pollution Specialist PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv INDEX PAGE Pledge of Allegiance 1 Roll Call 1 Item 01-7-1 2 Remarks by Chairperson Lloyd 2 Remarks by Executive Officer Kenny 3 Staff Presentation 4 Mr. Mike Veney 22 Board Decision 29 Item 01-07-2 30 Remarks by Chairperson Lloyd 30 Remarks by Executive Officer Kenny 33 Staff Presentation 35 Mr. John Bates 70 Mr. Richard Burton 81 Mr. Paul Wuebben 88 Mr. Art Douwes 98 Ms. Pam Jones 103 Mr. Gene Walker 104 Mr. Stuart Hoffman 108 Ms. DiAnn Hillerman 109 Board Decision 125 Item 01-7-3 126 Remarks by Chairperson Lloyd 126 Staff Presentation 126 Board Decision 134 Item 01-7-5 134 Remarks by Chairperson Lloyd 134 Staff Presentation 136 Board Decision 137 Item 01-7-4 137 Remarks by Chairperson Lloyd 137 Remarks by Executive Officer Kenny 138 Staff Presentation 140 Adjournment 164 Reporter's Certificate 165 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON LLOYD: Good morning. The September 3 20th, 2001 meeting of the Air Resources Board will now 4 come to order. 5 Mr. Calhoun, would you please lead us in the 6 Pledge of Allegiance. 7 BOARD MEMBER CALHOUN: Will you please stand and 8 join me in the Pledge of Allegiance. 9 (Thereupon the Pledge of Allegiance was 10 led by Board Member Calhoun.) 11 CHAIRPERSON LLOYD: I think we'll start off with 12 the first Agenda Item, 01-7-1. 13 Thank you. Would the Clerk of the Board please 14 call the role. 15 BOARD CLERK KAVAN: Dr. Burke? 16 BOARD MEMBER BURKE: Present. 17 SECRETARY KAVAN: Mr. Calhoun? 18 BOARD MEMBER CALHOUN: Here. 19 SECRETARY KAVAN: Ms. D'Adamo? 20 CHAIRPERSON LLOYD: She's on her way. 21 SECRETARY KAVAN: Supervisor DeSaulnier? 22 BOARD MEMBER DeSAULNIER: Here. 23 SECRETARY KAVAN: Professor Friedman? 24 Dr. Friedman? 25 Mr. McKinnon? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER McKINNON: Here. 2 SECRETARY KAVAN: Supervisor Patrick? 3 Mrs. Riordan? 4 BOARD MEMBER RIORDAN: Here. 5 SECRETARY KAVAN: Supervisor Roberts? 6 Chairman Lloyd? 7 CHAIRPERSON LLOYD: Here. 8 We are expecting a relatively short meeting 9 today, but obviously I was trying to cut to many corners. 10 I'd like to remind everybody in the audience who 11 wishes to testify on today's agenda items to please sign 12 up with the Clerk of the Board. Also, if you have written 13 comments, if you could provide 30 copies to the Board 14 Clerk. 15 The first item on the agenda is, as I mentioned, 16 01-7-1. Proposed Airborne toxic control measure for 17 hexavalent chromium and cadmium for motor vehicle and 18 mobile equipment coatings. 19 Before turning this over for the staff 20 presentation, I would like to acknowledge the National 21 Paint and Coatings Association and its members, the 22 California Autobody Association, the University of 23 Northern Iowa Waste Reduction Center, and CAPCOA for 24 assisting ARB in the development of this ATCM. 25 Mr. Kenny, would you like to begin the staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 presentation. 2 EXECUTIVE OFFICER KENNY: Yes, thank you, Mr. 3 Chairman and members of the Board. This Board identified 4 hexavalent chromium and cadmium as toxic air contaminants 5 in 1986 and 1987 respectively. You also determined that 6 both compounds were human carcinogens without an 7 identifiable threshold exposure level below which no 8 significant adverse health impacts would be anticipated. 9 The Board has already adopted airborne toxic 10 control measures for hexavalent chromium from cooling 11 towers and chrome plating activities. The proposed ATCM 12 before you today would eliminate hexavalent chromium and 13 cadmium from motor vehicle and mobile equipment coatings. 14 This is an important public health measure because 15 facilities that use such coatings are often located in or 16 near residential areas. Workers who apply these coatings 17 are at even greater risk. 18 This measure originated from the California Air 19 Pollution Control Officer's Association Toxics 20 Subcommittee. The subcommittee recognized the need to 21 take action on automotive coatings and asked ARB to 22 develop the ATCM. The proposed ATCM is consistent with 23 existing rules in the South Coast Air Quality Management 24 District and the Antelope Valley Air Pollution Control 25 District. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 If you adopt this today, California will have 2 consistent statewide controls prohibiting chromium and 3 cadmium in automotive coatings. 4 And with that, Mr. Mark Watkins of our Stationary 5 Source Division will Make the presentation. 6 Mark. 7 (Thereupon an overhead presentation was 8 presented as follows.) 9 AIR POLLUTION SPECIALIST WATKINS: Good morning, 10 Chairman Lloyd and Members of the Board. Today, I'll 11 provide you with background information on hexavalent 12 chromium, lead and cadmium emissions from the application 13 of motor vehicle and mobile equipment coatings, which I 14 will refer to as automotive coatings and present a 15 proposed airborne toxic control measure or ATCM for your 16 consideration. 17 --o0o-- 18 AIR POLLUTION SPECIALIST WATKINS: In my 19 presentation today, I will provide some background on 20 hexavalent chromium and cadmium as Toxic Air contaminants 21 and the process we followed in developing the airborne 22 toxic control measure we are proposing today. 23 I'll give an overview of the types of sources 24 that would be covered under the proposed ATCM, and of the 25 exemptions in the proposed ATCM. Then I'll review the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 impacts and benefits of the proposed ATCM and the issues 2 raised by industry. I'll conclude with a summary and 3 staff's recommendations. 4 --o0o-- 5 AIR POLLUTION SPECIALIST WATKINS: I'll first 6 cover some background on the identification of hexavalent 7 chromium and cadmium as toxic air contaminants. Then I'll 8 discuss the reasons and processes for developing the 9 proposed ATCM. Finally, I'll discuss the emissions and 10 the risks from the use of hexavalent chromium and cadmium 11 in automotive coatings. 12 --o0o-- 13 AIR POLLUTION SPECIALIST WATKINS: Hexavalent 14 chromium was identified by the Board as a toxic air 15 contaminant in 1986. Cadmium was identified as a toxic 16 air contaminant in 1987. The Department of Health 17 Services determined that hexavalent chromium and cadmium 18 should be treated as human carcinogens with no threshold 19 exposure level. Hexavalent chromium is one of the most 20 toxic compounds identified by the ARB. 21 --o0o-- 22 AIR POLLUTION SPECIALIST WATKINS: Our 23 development of the proposed ATCM was initiated by a 24 request from the toxic committee of the California Air 25 Pollution Control Officers Association, or CAPCOA. CAPCOA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Requested that we ban the use of hexavalent chromium and 2 cadmium in auto refinishing coatings, because and 3 assessment of toxic emissions from autobody shops showed 4 the facilities using these automotive coatings can post a 5 significant health risk. 6 We are also proposing a ban on hexavalent 7 chromium and cadmium use in automotive coatings as a 8 pollution prevention measure. It is possible to control 9 hexavalent chromium and cadmium emissions by using a paint 10 spray booth, but mandating that manufacturers eliminate 11 these compounds in automotive coatings will completely 12 eliminate their emissions and risk from automotive coating 13 applications. 14 The South Coast Air Quality Management District 15 and the Antelope Valley Air Pollution Control District 16 already have automotive coating regulations that prohibit 17 the use of coatings containing hexavalent chromium and 18 cadmium. 19 By developing a statewide ATCM, we will require 20 autobody shops throughout California to comply with the 21 same requirements that apply in those districts. In 22 addition, the Health and Safety Code requires that ATCMs 23 for toxic compounds with no threshold exposure level 24 reduce emissions to the lowest level achievable through 25 the application of the best available control technology. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 By eliminate hexavalent chromium in automotive 2 coatings, the proposed ATCM will also reduce the amount of 3 hexavalent chromium waste products in the waste water and 4 solid waste streams. 5 --o0o-- 6 AIR POLLUTION SPECIALIST WATKINS: We conducted 7 extensive public outreach as part of the development of 8 the proposed ATCM. We formed working groups with 9 districts and coatings industry representatives. We 10 surveyed coating manufacturers regarding the sale and use 11 of coatings that contain hexavalent chromium or cadmium in 12 their alternatives. We conducted a public workshop in 13 Sacramento in May of 2001 to discuss the proposed ATCM. 14 Although a representative of the National Paint 15 and Coatings Association came to the workshop, we were 16 disappointed that no automotive coating manufacturers were 17 present even though they were invited. 18 We also visited body shops and a coating facility 19 that was doing work for the military. We also distributed 20 fact sheets written in both English and Spanish on ARB's 21 automotive coating activities at community meetings. 22 --o0o-- 23 AIR POLLUTION SPECIALIST WATKINS: We sent 24 surveys to 58 automotive coatings manufacturers. Our 25 survey results showed that these eight companies PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 manufactured automotive coatings that contained hexavalent 2 chromium. 3 Additionally, one of the major automotive 4 coatings manufacturers did not respond to the survey 5 despite repeated attempts to gather information about 6 their coatings sales. 7 --o0o-- 8 AIR POLLUTION SPECIALIST WATKINS: Our survey 9 results indicate that less than one percent of the 10 automotive coatings sold in California contain hexavalent 11 chromium, and none of these coatings contain cadmium. 12 However, we are proposing to ban cadmium use to prevent 13 its reintroduction into automotive coatings. 14 Based on our survey results, we estimate that 15 approximately 270 pounds of hexavalent chromium were 16 emitted from automotive coating facilities in the year 17 2000. We also estimate that about 560 pounds of lead were 18 emitted from automotive coating facilities. 19 Typically, lead is used in conjunction with 20 hexavalent chromium. We are not banning the use of lead 21 in all automotive coatings because additional data are 22 needed to determine the feasibility of such a ban. We 23 plan to conduct a comprehensive survey in 2002 to gather 24 this additional data. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 AIR POLLUTION SPECIALIST WATKINS: Emissions from 2 autobody shops are particularly of concern because they 3 are typically located in residential areas or close to 4 other businesses leading to potentially significant 5 hotspot exposures. Because of the toxicity of hexavalent 6 chromium, use of even small amounts of it, especially 7 outside of a spray booth, can result in potentially 8 significant risks. 9 For example, using as little as one gallon of 10 coating containing hexavalent chromium can result in a 11 cancer risk of over ten in a million. Our analysis shows 12 that risks can vary from less than one in a million to 13 over 1,600 in a million from the use of coatings 14 containing hexavalent chromium. 15 These high potential risks are of particular 16 concern because body shops are often located in 17 neighborhoods or near residences or other businesses. 18 However, overall air quality trends show declines in 19 ambient concentrations of hexavalent chromium. 20 --o0o-- 21 AIR POLLUTION SPECIALIST WATKINS: A paint spray 22 gun is used to apply automotive coatings. Spraying 23 operations are usually conducted inside of a paint spray 24 booth. The first coatings applied are undercoats also 25 called primers. These undercoats may be used to ensure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 the substrate is clean, to improve the adhesion of the top 2 coat that will subsequently be applied or to provide a 3 corrosion barrier for the metal substrate. 4 After the undercoat is applied, a top coat is 5 applied to provide the final gloss and color. 6 --o0o-- 7 AIR POLLUTION SPECIALIST WATKINS: Next, I will 8 give an overview of the proposed ATCM. I'll discuss four 9 areas of the proposed regulation, applicability, 10 requirements, exemptions and the time lines for 11 compliance. 12 --o0o-- 13 AIR POLLUTION SPECIALIST WATKINS: The proposed 14 ATCM applies to manufacturers and distributors of 15 automotive coatings. The Regulation also applies to 16 autobody shops and other facilities that use automotive 17 coatings including original equipment manufacturing 18 facilities. 19 --o0o-- 20 AIR POLLUTION SPECIALIST WATKINS: Our proposal 21 would eliminate the sale and use of automotive coatings in 22 California that contain hexavalent chromium or cadmium. 23 In addition, coating facilities could not use or possess 24 coatings containing hexavalent chromium or cadmium after a 25 certain date. Similar requirements have been in effect in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 the South Coast Air Quality Management District since 1996 2 and are also in effect in the Antelope Valley Air 3 Pollution Control District. We've also added a test 4 method to the rule to improve enforceability. 5 --o0o-- 6 AIR POLLUTION SPECIALIST WATKINS: The proposed 7 ATCM does not apply to automotive coatings that are sold 8 by manufacturers or distributors for use outside of 9 California. 10 --o0o-- 11 AIR POLLUTION SPECIALIST WATKINS: Here are the 12 proposed timelines for compliance that were released to 13 the public in our original proposal. In a later slide 14 I'll discuss changes to this proposal that extend this 15 timeline with specific compliance dates. 16 All noncomplying automotive coatings for sale and 17 use in California must be manufactured prior to the rule's 18 effective date. Noncomplying coatings manufactured before 19 the rule's effective date may be sold for six months after 20 the rule's effective date. 21 Autobody shops and other end users may use 22 coatings containing hexavalent chromium or cadmium for 12 23 months after the rule's effective date. 24 --o0o-- 25 AIR POLLUTION SPECIALIST WATKINS: Now, I'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 cover some of the impacts, the benefits and issues 2 surrounding the proposed ATCM. 3 --o0o-- 4 AIR POLLUTION SPECIALIST WATKINS: The proposed 5 ATCM is cost effective because it impacts less than one 6 percent of the automotive coatings sold in California and 7 manufacturers already produce compliant coatings. 8 Based on our survey results, the increase in raw 9 materials cost to manufacturers is estimated to be 10 $2,200,000 over five years. Assuming that body shops 11 completely absorb the increase in retail costs for 12 compliant coatings, they would incur an increased cost 13 ranging from $550 to $5,500 per year depending on the 14 number of facilities affected. 15 If, however, this increase in retail cost is 16 passed on to customers, the estimated increase in cost for 17 an average color coating would be about six percent or 18 about $6 per gallon. 19 No additional cost will be incurred by the 20 majority of body shops in California because they have 21 voluntarily discontinued the use of chromated coatings or 22 are already subject to these requirements in the South 23 Coast Air Quality Management District or the Antelope 24 Valley Air Pollution Control District. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 AIR POLLUTION SPECIALIST WATKINS: The proposed 2 ATCM has many benefits. Because the proposed ATCM 3 requires the removal of hexavalent chromium from 4 automotive coatings, hexavalent chromium emissions and 5 risk from this source category would be eliminated. This 6 is important because, as we have mentioned, body shops are 7 often located in neighborhoods or other residential areas. 8 Some of these neighborhoods are in communities with 9 environmental justice concerns. 10 Also, because most of the lead used in automotive 11 coatings is used in conjunction with hexavalent chromium, 12 by eliminating hexavalent chromium, we will also be 13 eliminating lead from these coatings. This is also a 14 pollution prevention measure. Instead of controlling 15 hexavalent chromium with a control device, the proposed 16 ATCM will prevent hexavalent chromium from ever being 17 emitted. 18 Another benefit to the proposed ATCM is statewide 19 consistency. The South Coast Air Quality Management 20 District and the Antelope Valley Air Pollution Control 21 District already have automotive coatings rules that 22 prohibit the use of coatings containing hexavalent 23 chromium in cadmium. 24 These two districts contain nearly half of the 25 automotive coating facilities statewide. The proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 ATCM would require the rest of the automotive coating 2 facilities in California to comply with similar standards. 3 Also, as we have mentioned, the proposed ATCM 4 will reduce the amount of hexavalent chromium in the waste 5 water and solid waste streams. 6 --o0o-- 7 AIR POLLUTION SPECIALIST WATKINS: The original 8 proposal required manufacturers to cease production of 9 noncompliant coatings when the rule became effective. We 10 are now recommending that manufacturers be allowed to 11 produce noncompliant coatings until January 1st, 2003. In 12 addition, coatings manufactured before January 1st, 2003 13 may be sold until June 30th, 2003 and used until December 14 31st, 2003. 15 With these proposed changes, the regulation would 16 promote statewide consistency by providing specific dates 17 for manufacturing, sell-through and use of noncompliant 18 coatings. This will provide ARB staff and districts 19 sufficient time to conduct outreach to impacted 20 communities and end users. It will also allow 21 manufacturers to transition customers who need to change 22 their product lines. 23 --o0o-- 24 AIR POLLUTION SPECIALIST WATKINS: One 25 manufacturer has indicated to us that the use of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 alternative coatings will require that more coating be 2 applied. However, the industry has not provided data to 3 substantiate this claim. In addition, districts with 4 longstanding similar regulations have not found an 5 increase in coatings use. 6 One manufacturer has also stated that there may 7 be some applications for which corrosion protection is 8 critical and use of Hexavalent chromium is necessary. 9 However, they have not been able to identify specific 10 applications for which this is true. In fact, the 11 military has indicated that compliant coatings have passed 12 their corrosion tests for chemical and biological agents. 13 One manufacturer indicated that it would be more 14 cost effective to allow for chromated coatings, but 15 require that painting be performed in a spray booth. We 16 believe that the proposed regulation is more cost 17 effective and health protective than this alternative. 18 Because hexavalent chromium is very toxic and many body 19 shops are located near residences or other businesses, 20 significant hotspot exposures may occur even if a spray 21 booth is used. 22 One manufacturer has also stated that they need 23 additional time to transition to alternative coatings. 24 This company and all other automotive coating 25 manufacturers already have complying coating product PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 lines. In addition, we are proposing changes to the 2 regulation to allow for additional time for compliance. 3 --o0o-- 4 AIR POLLUTION SPECIALIST WATKINS: Now, that I've 5 covered the background and described the proposed ATCM, 6 I'll close my presentation by summarizing a few key points 7 and providing a specific recommendation. 8 --o0o-- 9 AIR POLLUTION SPECIALIST WATKINS: The proposed 10 ATCM requires the best available control technology and is 11 cost effective. The proposed ATCM is a pollution 12 prevention measure that benefits environmental justice 13 communities. The South Coast Air Quality Management 14 District has had a similar regulation in effect since 15 1996, and the Antelope Valley Air Pollution Control 16 District also has a similar regulation. 17 The proposed ATCM eliminates emissions and 18 exposure to hexavalent chromium, a human carcinogen, and 19 the related lead emissions and exposure from the use of 20 automotive coatings. 21 Also, the proposed ATCM will prevent the 22 reintroduction of cadmium, a human carcinogen, into 23 automotive coatings. 24 --o0o-- 25 AIR POLLUTION SPECIALIST WATKINS: The staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 recommends that you adopt the proposed airborne toxic 2 control measure for emissions of hexavalent chromium and 3 cadmium from motor vehicle and mobile equipment coatings 4 as proposed by staff. 5 This concludes my presentation. We'll be happy 6 to answer any your questions. 7 CHAIRPERSON LLOYD: Thank you Mr, Watkins. Madam 8 Ombudsman, would you please describe the public 9 participation process, which was followed in deriving this 10 rule and if you would like to share any concerns or 11 comments with us at this time. 12 OMBUDSMAN TSCHOGL: Thank you. Mr. Chairman, 13 Members of the Board, staff began working on this ATCM in 14 December of last year when they began work on a survey of 15 automotive coating -- a survey of automotive coating 16 officers. 17 In February of this year, staff sent the survey 18 to 58 manufacturers. On May 9th, 2001 staff held a 19 workshop in Sacramento. The workshop announcement was 20 sent to more than 2,500 people including automotive 21 coating manufacturers, the environmental community and 22 community activists. Thirteen people attended the 23 workshop, but they represented over 90 percent of the 24 industry. 25 Nine manufacturers and trade association PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 representatives participated in a working group to discuss 2 the technical aspects of the rule. Staff also made site 3 visits to four automotive repair facilities, two in 4 Sacramento and one each in the bay area and the Los 5 Angeles area. 6 In order to reach out to the community, staff 7 developed a fact sheet, which outlined the regulation. 8 The fact sheet was printed in both Spanish and English and 9 was distributed at community meetings held in the 10 neighborhood assessment program areas. 11 Finally, staff released the report for this item 12 on August 3rd, 2001 for public comment. Also, at that 13 time, staff mailed the notice for today's hearing to 4,500 14 people. 15 This concludes my remarks. 16 Thank you. 17 CHAIRPERSON LLOYD: Thank you very much. Do 18 Board Members have any questions or comments? 19 Dr. Burke. 20 BOARD MEMBER BURKE: First of all, I'd like to 21 say that I really appreciate your presentation. I thought 22 it was excellent. 23 EXECUTIVE OFFICER KENNY: The microphone, Dr. 24 Burke. 25 BOARD MEMBER BURKE: You know, I don't know how PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 to operate these things. 2 (Laughter.) 3 BOARD MEMBER BURKE: I'd like to thank you for 4 your presentation. I though it was absolutely excellent. 5 It's one of the best I've heard since I've been here. 6 A couple of questions on the outreach. Well, can 7 I ask you one question first, if you add Antelope and 8 South Coast and you say it's approximately 50 percent, is 9 it over 50 percent or under 50 percent? 10 MEASURES ASSESSMENT BRANCH CHIEF FRY: It's 11 nearly half slightly under 50 percent. 12 BOARD MEMBER BURKE: Slightly under 50 percent. 13 And so what we were doing in reality is bringing the rest 14 of the State in conformity, the other 40, 50 something. 15 MEASURES ASSESSMENT BRANCH CHIEF FRY: That's 16 correct. 17 BOARD MEMBER BURKE: When you mailed out the 18 notice, you say, to various people for the workshop here. 19 And you got 13 respondents. All of those were industry 20 people? 21 OMBUDSMAN TSCHOGL: I would have to defer to 22 staff to identify the exact members of those, the 23 attendees. However, I would say that it's -- that they 24 were association representatives, so they represented -- 25 BOARD MEMBER BURKE: Well it was some kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 professional group who had a proprietary interest in the 2 organization. 3 MEASURES ASSESSMENT BRANCH CHIEF FRY: Right. We 4 had Representatives from the National Paint and Coatings 5 Association, the California Autobody Association -- 6 BOARD MEMBER BURKE: You don't have to name them. 7 It's a concept that I'm after here. Because then we 8 printed some pamphlets and we distributed them at some 9 meetings. Do we know how many meetings we distributed and 10 how many of those pamphlets were distributed? 11 MEASURES ASSESSMENT BRANCH CHIEF FRY: It was 12 three to four meetings throughout the State that were 13 held. 14 BOARD MEMBER BURKE: Three to four meetings. 15 Well, in the presentation it was said that, you know, most 16 of these paint shops are in environmentally challenged 17 communities. Do you have any idea what percentage are in 18 the environmentally challenged communities? 19 MEASURES ASSESSMENT BRANCH CHIEF FRY: We think a 20 large share of them. And we did receive -- 21 BOARD MEMBER BURKE: Eighty percent, 90 percent? 22 MEASURES ASSESSMENT BRANCH CHIEF FRY: Probably 23 on the order of 80 percent. It's very possible, yes. 24 BOARD MEMBER BURKE: My guess in our district 25 would be closer to 95 percent, 95 percent. And what we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 did for those people is we passed out some brochures 2 before meetings. 3 I'm going to support this regulation, but, you 4 know, I don't think that that's the kind of outreach that 5 we want to do. You know, it's an excellent presentation. 6 The regulation is right on target. It brings it in 7 conformity with Antelope and South Coast, but the people's 8 lives who are affected most by this, not their pocket 9 books, their lives are affected most by this were not 10 properly notified. 11 CHAIRPERSON LLOYD: Any other comments? 12 Yes, Mr. McKinnon. 13 BOARD MEMBER McKINNON: Do we have any idea, and 14 fair enough if we don't, I have this suspicion that a 15 certain amount of the kind of underground economy of 16 California is involved in autobody repair. And it seems 17 to me that a control measure that doesn't take toxics out 18 won't affect underground economy type of businesses. If 19 people are doing autobody repair and they're in garages 20 and that kind of thing, they're not going to put in paint 21 boothes. 22 MEASURES ASSESSMENT BRANCH CHIEF FRY: That's 23 correct. 24 BOARD MEMBER McKINNON: Do we have any idea how 25 large of a problem that is? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 MEASURES ASSESSMENT BRANCH CHIEF FRY: No. 2 CHAIRPERSON LLOYD: Thank you. 3 We have one witness signed up. 4 Mike Veney from Sherwin-Williams. 5 MR. VENEY: Good morning, ladies and gentlemen of 6 the Board. Can everybody hear me okay? 7 CHAIRPERSON LLOYD: Yes. 8 MR. VENEY: Basically, what I've come here today 9 for is to present the evidence of the letter I wrote back 10 in August for the paint companies. 11 I have some panels here that show the number of 12 coats and coating differences. This is from our Ultra 13 System. This is our top of the line paint system for 14 automotive repair. If you're going to have your car 15 repaired through an insurance agency and they're using 16 Sherwin-Williams paint, this is the paint they will use. 17 As you can see, this one is pretty good. It 18 covers about the same amount of coats, the color matches 19 nicely, but the problem is, let me get the exact figures, 20 the chrome-free version of it is about $200 more expensive 21 per gallon. 22 The price for the chrome version of it comes to 23 $157 per gallon. The price of the chrome-such-free 24 version of it is $373 per gallon to the body shops. But 25 we can live with that. I don't know if your body shops PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 will be over pleased with it, but as a manufacturer we can 2 live with that. 3 The next two panels I have show our genesis 4 system which is used by fleet manufacturers, people that 5 paint large trucks, your Coca-Cola trucks, your garbage 6 trucks and all those kind of things. This produces what 7 they call a metameric match, where in direct sunlight 8 these two colors will look identical. Under other sources 9 of light they look pretty much -- I don't know if you guys 10 can see the difference there. So the price difference 11 between those -- 12 CHAIRPERSON LLOYD: We've got a question from Mr. 13 McKinnon. 14 BOARD MEMBER McKINNON: You've lost me. You have 15 two panels up. What is one panel and what is the other 16 panel? 17 MR. VENEY: Okay. What these are is this one 18 here is chrome free, lead free and it's the same color 19 formula as this one here that has the chromated pigments 20 in it. 21 The price difference between those, the one that 22 contains Chrome 6 is $144 per gallon, and the one that is 23 Chrome 6 free is $257 per gallon. 24 This also demonstrates the coat difference. The 25 one that contains the chromated pigments covers in two PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 coats. You have to get up here to about five coats before 2 we consider that covered. We'd probably even consider a 3 6th coat just to make sure. 4 CHAIRPERSON LLOYD: We have another question from 5 Ms. D'Adamo. 6 BOARD MEMBER D'ADAMO: I think you just may have 7 answered it. The bottom part of the panel that's on our 8 right that's just one coat. And as you go up, those 9 labels. 10 MR. VENEY: Yeah. These are one coat of paint 11 with the spray gun. 12 BOARD MEMBER D'ADAMO: And with each white tag 13 it's an additional coat? 14 MR. VENEY: Right. 15 These also -- in the Board report they had said 16 that there wasn't going to be any environmental impact or 17 actually it was going to lower the impact. And from the 18 information they had, that conclusion is correct. But 19 because the Chrome 6 free versions of these do have a 20 lower VOC. But as I think this panel shows, you're 21 talking almost double the number of coats, so you're going 22 to be raising -- and this is just one example. It could 23 be less for other colors more for some. 24 But basically I just wanted to present the 25 information in order to show that what I said in my letter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 was accurate. Those are all the comments I have. 2 Actually there is one more is that in my letter I 3 also had recommended that the alternative requiring spray 4 boothes. After talking with Barbara Fry and Jose Gomez, I 5 understand why that's not possible. 6 We would also like the Board to consider possibly 7 just a ban in the primers. Most top coats are going to be 8 used in a booth. I mean, a reputable paint shop that's 9 doing everything by the law is going to do their paint -- 10 their top coats inside of a paint booth. 11 Those are the only comments I have for the Board 12 today. Are there any questions? 13 CHAIRPERSON LLOYD: You sell this paint in south 14 coast now? 15 MR. VENEY: We do sell the chrome free stuff in 16 south coast. I will tell you that enforcement in south 17 coast is very poor, that there are a lot of, what we call, 18 wagon shops, people that drive in, buy these coatings in 19 other districts that are illegal and sell them to paint 20 shops. 21 CHAIRPERSON LLOYD: What percentage of the market 22 do you have in this particular area, roughly? 23 MR. VENEY: Roughly, we probably have about 20 24 percent of the total market in California. 25 CHAIRPERSON LLOYD: So the rest of the industry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 then will have no problem in complying, it's just 2 Sherwin-Williams that fells that this is going to impact 3 you more? 4 MR. VENEY: I can't speak for the other 5 industries. 6 CHAIRPERSON LLOYD: Well, the fact that we don't 7 have 80 percent of the people here is supporting your 8 testimony implies that. 9 Okay, any other questions from the Board. 10 Dr. Burke. 11 BOARD MEMBER BURKE: I'll pass along to our 12 enforcement division that their enforcement on this is 13 poor. But I understand the problem. It probably is 14 because I know that when we first passed the regulation on 15 boat paint, people were taking their boats down to Tijuana 16 and places and it goes right along with the question by my 17 fellow board member earlier that, you know, when you go 18 into the backyard or the front yard repair shop that those 19 guys are going to paint with anything they can that gets 20 the job done as quickly as they can. 21 They don't even care about their own health, so 22 why should they care about -- and the reason I know they 23 don't care about their own health is the guy who paints my 24 boat is one of my best friends and he was using some 25 terrible paint one day and I said why are you using this, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 not on my boat, because it's easy and it's quick and I had 2 it in the storehouse. I said but it's killing you. He 3 was in the hospital not six months before with respiratory 4 problems. He said that's the way I make my living, you 5 know. That's unfortunately it. 6 The one question I had was that when South Coast 7 passed this, did Sherwin-Williams sue South Coast? 8 MR. VENEY: I wasn't part of the Sherwin Williams 9 organization at that time. I really don't know. I know 10 they were part of the MPCA coalition. 11 BOARD MEMBER BURKE: They sued South Coast. 12 MR. VENEY: I don't know whether they did or not. 13 I don't know that information. 14 BOARD MEMBER BURKE: Trust me, I know. 15 MR. VENEY: It wouldn't surprise me that they 16 did. 17 BOARD MEMBER BURKE: I was just going to ask you 18 to Refresh my memory also on how the lawsuit came out. 19 MR. VENEY: The law passed in South Coast. 20 BOARD MEMBER BURKE: And the lawsuit was -- 21 BOARD MEMBER RIORDAN: Dismissed. 22 BOARD MEMBER BURKE: Yeah. So, you know, the 23 Court system also found out that this was a good thing. 24 Anyway. 25 CHAIRPERSON LLOYD: Any questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 Yes, Mr. McKinnon. 2 BOARD MEMBER McKINNON: Yeah, I appreciate the 3 kind of demonstration between the two types of paint. Can 4 you tell me if you've done any assessment in terms of the 5 potential impact on the workers doing the painting between 6 the two types of paint? 7 MR. VENEY: I know that our industrial hygiene 8 department at Sherwin-Williams has done some testing with 9 traffic paint. I don't know if they've actually done any 10 with the automotive coatings. Traffic paint has high 11 levels of lead and hexavalent chrome in it. 12 I don't know what the results of those are. I 13 can get them for you. 14 BOARD MEMBER McKINNON: But you don't have a 15 comparison Of these two paints in terms of the impact? 16 MR. VENEY: On human health, no I'm sorry. 17 BOARD MEMBER McKINNON: Thanks. 18 CHAIRPERSON LLOYD: Any other comments or 19 questions from the Board? 20 Mr. Kenny, does the staff have anymore comments? 21 EXECUTIVE OFFICER KENNY: Nothing further. 22 CHAIRPERSON LLOYD: Thank you. Then I will close 23 the record on this agenda item. However, the record will 24 be reopened when the 15-day notice of public comment 25 availability is issued. Written or oral comments received PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 after this hearing date, but before the 15-day notice is 2 issued will not be accepted as part of the official record 3 on this agenda item. 4 When the record is reopened for a 15-day comment 5 period, the public may submit written comments the 6 proposed changes which will be considered and responded to 7 in the final statement of reasons for the regulations. 8 Just a reminder to my colleagues. This is a 9 regulatory item, so do we have any ex parte 10 communications? 11 Seeing none, I would ask my colleagues to review 12 the resolution we have before us, and, as described, also 13 by the staff presentation and would be willing to 14 entertain a motion. 15 MR. PATTERSON: So move. 16 BOARD MEMBER RIORDAN: Second. 17 CHAIRPERSON LLOYD: Thank you. 18 All in favor say aye? 19 (Ayes.) 20 CHAIRPERSON LLOYD: That's unanimous, I think. 21 Thank you very much. We'll take a moment while 22 we change over for the next agenda item on the transit bus 23 fleet regulation. 24 (Thereupon a brief recess was taken.) 25 CHAIRPERSON LLOYD: The next Agenda Item is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 01-7-2, a status report on the transit bus fleet 2 regulation. 3 The Board adopted the transit bus rule at our 4 February 2000 board hearing after a lengthy public hearing 5 process that began in January. At that time, a number of 6 issues, such as the status of advanced NOx aftertreatment 7 technologies and hybrid electric bus emission testing were 8 raised. 9 An issue of great interest to most of the Board 10 Members was the alternative NOx reductions strategy for 11 transit districts choosing the diesel path. Since this 12 was both contentious and complicated, let me remind my 13 colleagues what we decided to do at that time. 14 As you will recall, staff proposed a .5 grams per 15 break horsepower hour standard for diesel transit buses 16 purchased in the 2004 through 2006 model years. The 17 Engine Manufacturers Association testified that bus 18 manufacturers won't necessarily make the required 19 investments to meet that standard. As an alternative, the 20 AMA proposed a declining NOx fleet average standard over 21 the same three year period. 22 Between January and February staff worked on a 23 revised proposal for reducing NOx emissions. Staff's 24 revised proposal presented at the February hearing, 25 included an alternative NOx emission reduction strategy as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 proposed by AMA. 2 Briefly here's how it worked or supposed to work. 3 Transit agencies that wanted to purchase 2004 to 2006 4 model year diesel buses would have to apply to the 5 Executive Officer for an exemption. If approved, that 6 exemption would allow transit agencies to purchase diesel 7 buses that emit more than .5 grams per break horsepower 8 hour NOx provided that they demonstrated NOx emission 9 benefits through 2015 equivalent to those achieved if they 10 had purchased that half gram NOx. 11 The Board adopted staff's recommendation with one 12 change during that February discussion. In fact, we 13 changed the language of the staff proposal to require 14 transit agencies applying for the alternative NOx 15 reductions strategy to achieve greater NOx reductions 16 emission benefits through 2015. In fact, what we did was 17 create greater flexibility. 18 The Board, however, chose not to define what 19 greater means in this rule. The Board asked staff to 20 analyze the first exemption application and return to the 21 Board with their findings and recommendations. At which 22 time, we would define the exact meaning of greater within 23 the Regulation. 24 In addition to the alternative NOx strategy 25 exemptions issues, Board Resolution 00-2 included specific PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 instructions to staff to report back to the Board on the 2 implementation issues, the status of advanced 3 aftertreatment technology and the hybrid electric bus 4 testing. 5 So staff is here today to present an update on 6 these implementation issues as well as to provide an 7 analysis of the alternative NOx reductions strategy 8 exemption application. 9 Before turning this over to Mr. Kenny to 10 introduce the item and begin staff presentation, I'd just 11 like to make a couple of personal observations. And I'm 12 going to be particularly interested today to hear 13 presentations from the transit districts and the engine 14 manufacturers because it appears that, again, the industry 15 went off with the flexibility by the Board in this case 16 have really not, and we did this in good faith, have 17 really not stepped up to the plate in terms of providing 18 emissions reductions as we had required, and that the 19 flexibility there was basically used to not comply and to 20 delay. 21 So it appears that also it could be, and I'd be 22 willing to hear what's happening here, that the good faith 23 of the Board and the flexibility that the Board provided 24 to the industry now, in fact, both in terms of the fuel 25 choice, alternate fuels and diesel, as well as the NOx PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 aftertreatment and the compliance strategy and time frame 2 there, may, in fact, if we're not very careful result in a 3 degradation on the air quality that people would have 4 expected if, in fact, we had not allowed that flexibility. 5 So I will be listening intently and I'm sure my 6 colleagues will also from the industry here to see why, in 7 fact, basically the opportunity to work with us has been 8 ignored. We've been very often accused of putting a 9 mandate out there and not allowing flexibility. This 10 isn't the first time that the industry has not used that 11 flexibility and worked with us. And so sometimes we're 12 not -- we are forced, in fact, to be much more 13 prescriptive than we would like to be. 14 And, again, the bottom line here is public 15 health, so Mr. Kenny begin the staff presentation. 16 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman 17 and members of the Board. Today staff will present an 18 update on the public transit bus fleet regulation. This 19 regulation is designed to achieve significant reductions 20 in PM and NOx emissions from 2001 to 2015. Through the 21 implementation of an innovative dual path fleet rule, the 22 fleet rule required particulate matter retrofits along 23 with the use of low sulfur fuel. In addition, the rule 24 included stringent standards for new bus engines starting 25 in 2004. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 As the Chairman has said in his opening 2 statement, staff was asked to report back regularly to the 3 Board regarding implementation progress. Staff was also 4 asked to report on the implementation of alternative 5 emission reduction strategies To compliance with the 2004 6 standards. 7 Further more, the Board requested an update on 8 the status of advanced aftertreatment systems and a report 9 on the development of test procedures for hybrid electric 10 bus emissions. 11 Staff's analysis of the transit bus fleet shows 12 that a majority of the transit agencies are complying with 13 the requirements of the regulation with several 14 qualifications. 15 All agencies have selected a fuel path. 16 Regarding the exemption application for an alternative NOx 17 reduction strategy, 15 transit agencies applied, and 18 additional transit agencies have requested that they be 19 allowed to make late applications. Three of the 15 20 transit agencies submitted plans to demonstrate how they 21 would achieve greater NOx benefits through 2015. None of 22 the 15 transit agencies are demonstrating NOx 23 aftertreatment technology as required. 24 With regard to the development of verification 25 procedures for PM retrofit systems, that is under way, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 staff is evaluating diesel particulate filters under 2 interim verification procedures. So far two companies 3 have had their diesel particulate filters verified for a 4 limited number of engine families and model years. Staff 5 is also developing a test procedure to evaluate hybrid 6 electric bus emissions. 7 Ms. Dinh Quach will be making the staff 8 presentation. 9 Dinh. 10 (Thereupon an overhead presentation was 11 presented as follows.) 12 AIR POLLUTION SPECIALIST QUACH: Good morning, 13 Chairman Lloyd and members of the Board. As stipulated at 14 the transit bus hearing, Resolution 00-2, I will be 15 presenting an update on the public transit bus fleet 16 regulation adopted last year. 17 --o0o-- 18 AIR POLLUTION SPECIALIST QUACH: The main points 19 on my presentation will consist of the following: 20 Background implementation progress, alternative NOx 21 strategy, aftertreatment technology, hybrid electric bus 22 testing, summary, staff recommendations and finally 23 remaining issues. 24 --o0o-- 25 AIR POLLUTION SPECIALIST QUACH: The public PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 transit bus fleet regulation was adopted in February 2000 2 to reduce oxides of nitrogen and particulate matter 3 emissions from urban buses. The regulation includes both 4 a fleet rule, which applies to transit agencies and new 5 engine emissions standards which apply to manufacturers. 6 --o0o-- 7 AIR POLLUTION SPECIALIST QUACH: Before I begin 8 explaining the requirements of the transit bus regulation, 9 let me define an urban bus. According to Title 13 10 California Code of Regulations, Section 1956.2, an urban 11 bus is defined as a passenger carrying vehicle powered by 12 a heavy heavy-duty diesel engine or other type normally 13 powered by a heavy heavy-duty diesel engine with a load 14 capacity of 15 or more passengers and intended primarily 15 for intra-city operation, that is within the confines of a 16 city or greater metropolitan area. 17 --o0o-- 18 AIR POLLUTION SPECIALIST QUACH: The main 19 requirements of the regulation for transit agencies 20 include the following, first, each transit agency must 21 select one of two fuel paths either diesel or alternative 22 fuel by January 31st, 2001. Annual reports must be filed 23 to ensure compliance. 24 Second, every transit agency must comply with a 25 4.8 gram per break horsepower hour NOx fleet average PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 requirement by October 1st, 2002. This can be met -- from 2 now on I will refer to the standard in terms of grams 3 instead of saying the whole phrase. 4 The NOx fleet average may be met by repowering or 5 retiring old engines. An alternative means of compliance 6 is to retire all 1987 and older diesel urban buses by 7 October 1st, 2002. Transit agencies were required to 8 submit reports by January 31st, 2001 detailing their plans 9 for compliance. 10 Third, transit agencies are required to reduce 11 diesel PM emissions with a phase-in retrofit process 12 starting January 1st, 2003. 13 Fourth, transit agencies must switch to 14 low-sulfur fuel, 15 PPM or less for all diesel buses 15 beginning July 1st, 2002. 16 --o0o-- 17 AIR POLLUTION SPECIALIST QUACH: In addition to 18 the fleet rule new standards for diesel engines were 19 adopted which apply to engine manufacturers. A .01 gram 20 PM standard for diesel engines starts on October 1st, 21 2002. For the model year 2004 to 2006, diesel dual fuel 22 and bi-fuel urban bus engines must meet a .5 gram NOx 23 standard. This standard will decrease to .2 grams for NOx 24 in 2007 and beyond. 25 Additional requirements for large transit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 agencies on the diesel path include implementing a zero 2 emission demonstration beginning in 2003 and purchasing 3 zero emission buses beginning in 2008. 4 Large transit agencies on the alternative fuel 5 path are required to make zero remission purchases 6 starting in 2010. 7 --o0o-- 8 AIR POLLUTION SPECIALIST QUACH: As directed by 9 the Board in Resolution 00-2, I will report on the 10 following: Staff's progress in implementing the 11 regulations, the status of alternative NOx strategies 12 propose by some transit agencies, the status of advanced 13 aftertreatment systems for both NOx and PM, the progress 14 towards development of a test procedure for the evaluation 15 of hybrid electric bus emissions. 16 This report is the first update since the public 17 transit bus fleet regulation was adopted in February 2000. 18 --o0o-- 19 AIR POLLUTION SPECIALIST QUACH: All transit 20 agencies had to select a fuel path and provide current and 21 an anticipated bus fleet information including engine 22 types and NOx emissions by January 31st, 2001. 23 From the report, we were able to gather the 24 following information: All 70 transit agencies subject to 25 the Regulation have selected a fuel path, 61 percent have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 selected the diesel path as compared to the 39 percent 2 that selected the alternative fuel path, a breakdown shows 3 that transit agencies in the San Joaquin Air Pollution 4 Control District are evenly divided in fuel path selection 5 with half choosing diesel and half choosing alternative 6 fuel. 7 One air district of special interest is the South 8 Caste Air Quality Management District. Seven transit 9 agencies selected the diesel path even though Rule 1192 10 stipulates that all new bus purchases must be alternative 11 fuel. However, a federal court in California has recently 12 upheld Rule 1192, thereby limiting the possibility that 13 transit agencies in the south coast will be able to 14 purchase diesel buses. 15 Transit agencies within the Bay Area Air Quality 16 Management District overwhelmingly chose the diesel path 17 while only two transit agencies chose the alternative fuel 18 path. 19 In the San Diego County Air Pollution Control 20 District more transit agencies selected the alternative 21 fuel path than diesel path. 22 In the Sacramento Metropolitan Air Quality 23 Management District one transit agency chose the diesel 24 path and the other one chose the alternative fuel path. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 AIR POLLUTION SPECIALIST QUACH: Please note in 2 the slide that some of the following numbers have been 3 revised since the publication of the status report. As of 4 January 31st, 2001, a majority of urban buses in active 5 service are diesel buses as compared to the alternative 6 fuel buses, 78 percent and 22 percent respectively. 7 By October 2002, there will be an eight percent 8 decrease in diesel buses and a 48 percent increase in 9 alternative fuel buses. 10 --o0o-- 11 AIR POLLUTION SPECIALIST QUACH: As part of their 12 annual report, the transit agencies were required to 13 submit NOx emission information for their fleets and 14 demonstrate compliance with the a 4.8 gram NOx fleet 15 average by October 1st, 2002. 16 Fifty-six transit agencies report they will 17 comply with the 4.8 gram NOx fleet average by October 18 2002. Fourteen transit agencies supplied insufficient 19 information or miscalculated their NOx fleet averages. 20 Staff has called these transit agencies, sent them letters 21 and will work with them to resolve noncompliance issues. 22 --o0o-- 23 AIR POLLUTION SPECIALIST QUACH: The second item 24 of discussion is the alternative NOx reductions strategy. 25 Prior to regulation adoption, a representative of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 Engine Manufacturers Association, or EMA, stated that the 2 members might be unwilling to invest in technology to meet 3 the 2004 to 2006 model year NOx emission standards. With 4 input from EMA, ARB staff develop an alternative strategy 5 that the transit agencies could follow. 6 The strategy allows transit agencies the option 7 of applying to the Executive Officer for an exemption 8 which would allow them to purchase engines that do not 9 meet the 2004 to 2006 model year engine emission 10 standards. 11 Transit agencies who are approved for the 12 exemption may purchase 2004 to 2006 model year diesel 13 engines with certified NOx emissions higher than .5 gram 14 NOx. 15 The first requirement for the exemption is to 16 apply to the Executive Officer by June 30th, 2001. 17 Secondly, the transit agency must demonstrate to 18 the Executive Officer that it will achieve NOx emission 19 benefits through 2015 greater than would have been 20 achieved through buying compliant engines. Along with 21 devising a plan to show greater NOx emission benefits, the 22 third requirement is that the transit agency after 23 consulting with EMA must demonstrate or have contracted to 24 demonstrate advanced NOx aftertreatment technology. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 AIR POLLUTION SPECIALIST QUACH: As of the June 2 30th, 2001 deadline, we have received 15 letters 3 requesting an exemption. Of these, four transit agencies 4 submitted plans, but only one of those Santa Clara Valley 5 Transportation Authority, or VTA, submitted a complete 6 plan. The other 11 applicants requested additional time 7 to submit a plan. In the last two weeks staff received 8 plans from five transit agencies. 9 In addition, after June 30th, four transit 10 agencies sent letters requesting the option to submit 11 applications. 12 --o0o-- 13 AIR POLLUTION SPECIALIST QUACH: As requested by 14 the Board, we have brought back the first exemption 15 application from VTA for analysis and discussion. The VTA 16 application included a base line plan and two other plans 17 that they named Option A and Option B. 18 Option A is characterized by repowering 91 of the 19 1992 model year buses in 2002 and purchasing 14 new buses 20 in 2005, thereby increasing their fleet size to 614. 21 Option B is similar to Option A but includes the early 22 retirement of older buses to maintain the fleet size of 23 600. 24 --o0o-- 25 AIR POLLUTION SPECIALIST QUACH: For the purpose PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 of the analysis, we calculated a NOx value for each 2 calendar year. The vehicle miles traveled per bus, 3 horsepower of the engines, and engine load were all 4 assumed to be the same for every bus, thus the NOx values 5 are not the actual NOx emissions, but are proportional to 6 the actual NOx emissions. 7 Please note that the graph has been revised since 8 the publication of the staff report. Both options 9 presented by VTA demonstrated greater NOx emission 10 benefits through 2015. 11 --o0o-- 12 AIR POLLUTION SPECIALIST QUACH: The third 13 requirement for the alternative NOx strategy exemption is 14 that transit agencies must demonstrate or be contracted to 15 demonstrate advanced NOx aftertreatment technology. None 16 of the transit agencies that applied are involved in a 17 demonstration of advanced NOx aftertreatment technology. 18 We've had discussions with representatives of the 19 EMA and California Transit Association on implementation 20 issues regarding the status of advance NOx aftertreatment. 21 These issues continue through -- excuse me, these 22 discussions continue through July of this year. 23 We have told that EMA and its members have no 24 demonstration planned specifically for transit buses, 25 although they are working on NOx aftertreatment for heavy PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 heavy-duty diesel engines in general. 2 EMA's members stressed to us that they are 3 supportive of NOx aftertreatment to meet the 2007 to 2010 4 NOx emissions standards. We must note that at the time 5 the transit bus regulation was adopted, the United States 6 Environmental Protection Agency's NOx truck standards were 7 slated for implementation in 2007. 8 However, before implementation, the standards 9 have now been delayed until 2010. This could lead to a 10 delay of early demonstration programs. 11 --o0o-- 12 AIR POLLUTION SPECIALIST QUACH: Before beginning 13 the update on advanced aftertreatment technology for 14 diesel engines, it would be useful to review the fleet 15 composition of the buses. 16 For retrofiting purposes, the rule divided bus 17 engines into three tiers by model years. The first phase 18 of the retrofits will begin on January 1st, 2003 for tier 19 1 or pre-1991 model year engines. Transit operators are 20 also required to retrofit 50 percent of tier 2 or model 21 year 1991 to 1995 engines by January 1st, 2003. Tier 3 22 includes model year 1996 to 2002 and all phased in later. 23 I should note that these figures differ slightly 24 from those in the status update report because some 25 numbers have been revised. As of January 1st, 2001, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 majority of Tier 1 and Tier 2 engines are two-stroke 2 engines. In contrast the engines in Tier 3 are 3 overwhelmingly four-stroke. 4 --o0o-- 5 AIR POLLUTION SPECIALIST QUACH: By October 2002 6 the transit agencies project they will reduce the number 7 of two-stroke engines in Tier 1 by 51 percent. However, 8 the majority of engines in Tier 1 and Tier 2 are still 9 two-stroke engines. Four-stroke engines will be reduced 10 by 60 percent in Tier 1 and increased by 75 percent in 11 Tier 3. Thus, these figures show that a large number of 12 two-stroke and older engines need to be retrofitted. 13 I will now discuss the status of specific PM 14 aftertreatment technologies. 15 --o0o-- 16 AIR POLLUTION SPECIALIST QUACH: The transit bus 17 rule requires that PM aftertreatment devices reduce PM by 18 85 percent or more. Currently, the only type of PM 19 aftertreatment device that has achieved those reductions 20 is a diesel particulate filter or DPF. DPFs are 21 categorized into two types, passive or active. Passive 22 systems rely on the heat of the exhaust with the aid of a 23 catalyst to combust the PM at a lower temperature than 24 would be required without the catalyst. The goal is to 25 achieve a higher average rate of PM combustion than the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 rate at which the PM is accumulated. 2 Active systems typically use an external source 3 of heat to oxidize the particular matter. They are useful 4 when the exhaust temperatures are not high enough for 5 combustion to occur even with the addition of a catalyst. 6 Prior to its use in any transit bus, ARB requires that a 7 retrofit device be verified to reduce diesel particulate 8 matter emissions by 85 percent or to an absolute level of 9 .01 gram or below. 10 --o0o-- 11 AIR POLLUTION SPECIALIST QUACH: So far two 12 passive diesel particulate filters have been manufactured 13 by Englehard and Johnson Matthey have been verified by our 14 staff. No active retrofit device has been verified yet. 15 The DPFs verified so far are applicable to the 16 engines and the model years listed. The Cummins M11 and 17 ISM engines are used in transit buses. The Detroit Diesel 18 Corporation's Series 50 and Series 60 engines are also 19 used in transit buses. 20 Please note, however, that the first engines 21 required to be retrofitted in transit buses are model year 22 1995 and earlier. 23 --o0o-- 24 AIR POLLUTION SPECIALIST QUACH: In contrast to 25 PM aftertreatment devices, technologies to reduce NOx from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 diesel exhaust are either still under development or at a 2 very early state of commercialization. Selective 3 catalytic reduction, or SCR, has been used for many years 4 with much success in industrial processes, stationary 5 engines and some marine applications. Several studies in 6 heavy-duty engines have estimated that SCR efficiencies 7 can range from 50 to 80 percent or even higher. 8 In a recent ARB sponsored demonstration project, 9 two SCR systems were able to achieve 75 percent reduction 10 in NOx emissions. The project had to be halted before 11 demonstration on an in-use truck due to the need for 12 further catalyst system development. 13 Although, SCR technology is very promising from 14 the standpoint of achieving high control levels of NOx, 15 the application to mobile sources remains very 16 challenging. 17 Exhaust gas recirculation, or EGR, technology is 18 available commercially in the Detroit Diesel Corporation 19 or DDC series 50 EGR heavy heavy-duty diesel engine. The 20 technology as it is used in the DDC Series 50 EGR engine 21 does not offer significant NOx reduction currently. 22 Further developments in the cooled EGR technology 23 hold the potential for much greater NOx reductions. By 24 cooling the exhaust gas before it is introduced into the 25 combustion chambers, the rate of NOx formation can be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 greatly reduced. 2 --o0o-- 3 AIR POLLUTION SPECIALIST QUACH: Lean NOx 4 catalysts have primary been used in combination with other 5 technologies, such as oxidation catalysts and particulate 6 filters. The major disadvantage is that potential NOx 7 reductions or too low to achieve future NOx emission 8 standards. Realistic levels of NOx reduction range from 9 10 to 20 percent without any fuel penalty and 20 to 30 10 percent with a 5 to 7 percent reduction in fuel economy. 11 NOx absorbers are perceived by many as the diesel 12 NOx control technology of the future. A research program 13 conducted by the U.S. Department of Energy concluded that 14 over 80 percent of peak conversion efficiency could be 15 achieved with a fuel economy penalty of less than four 16 percent. 17 Finally, plasma exhaust treatment requires 18 considerable research and development before it will be a 19 commercially viable technology. In laboratory and bench 20 scale research, plasma catalyst systems are achieving 60 21 to 70 percent NOx reduction at 6 to 8 percent fuel 22 penalties. 23 Despite the promising developments for NOx 24 aftertreatment technologies, none of them were ready for a 25 demonstration program in transit buses this past summer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 --o0o-- 2 AIR POLLUTION SPECIALIST QUACH: The fourth and 3 final issue in this update is the development of a test 4 procedure for the hybrid electric buses. There are 5 several reasons for the interest in hybrid technology for 6 urban bus applications. In addition to lower overall 7 emissions, advantages of hybrid technology include added 8 power for accelerations, better fuel economy and lower 9 emissions. 10 Initial testing of heavy-duty hybrid transit 11 buses confirmed that hybrid technologies have reduced 12 emissions and improved fuel economy. New test procedures 13 are needed to accurately assess emissions from hybrid 14 electric buses, because heavy-duty engines are now 15 certified on an engine dynamometer. 16 Correctly assessing emissions from a hybrid 17 electric system will require testing on a chassis 18 dynamometer. A comparison of those emissions in grams per 19 mile must be made with engine certified emissions, which 20 are in grams per brake horsepower hour. We must carefully 21 consider the unique operation of heavy-duty hybrid 22 drivetrains and identify an appropriate driving cycle for 23 testing. 24 The Society of Automotive Engineers, J1711HD 25 procedure will serve as the basis for ARB's test PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 development program. ARB has joined an industry 2 government working group to finalize this procedure. In 3 addition, ARB is testing hybrid electric buses in the 4 development of a test procedure. We plan to propose a 5 heavy-duty hybrid electric vehicle test procedure for the 6 Board's consideration and adoption by late 2002. 7 In conclusion, all 70 transit agencies have 8 selected a fuel path, 56 report that they will comply with 9 the 4.8 gram NOx emission fleet average by October 1st, 10 2002. We are working with those 14 agencies That have not 11 yet provided us with sufficient information or 12 miscalculated their NOx emission fleet averages to get 13 them into compliance. 14 --o0o-- 15 AIR POLLUTION SPECIALIST QUACH: For the 16 alternative NOx strategy exemption, 15 transit agencies 17 applied for the alternative NOx reductions strategies as 18 of July -- excuse me, June 30th, 2001. Of the 15, only 19 four agencies submitted plans. However of the four, only 20 one transit agency submitted a complete plan. 21 In the last two weeks, staff has received late 22 plans from five transit agencies, thus making a total of 23 nine transit agencies that submitted plans out of the 15 24 that applied by June 30th. Finally, four transit agencies 25 have submitted late requests for exemption after the June PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 30th dead line. 2 None of these transit agencies is demonstrating 3 or contracted to demonstrate advanced NOx aftertreatment 4 technology. 5 --o0o-- 6 AIR POLLUTION SPECIALIST QUACH: Staff has 7 verified two PM filter emission control systems for some 8 Cummins and Detroit Diesel bus engines and more 9 verification applications are being reviewed by staff. 10 There is no advanced NOx aftertreatment 11 technology being demonstrated in existing transit buses. 12 Engine manufacturers will be using aftertreatment devices 13 to reduce NOx emissions in new bus engines. Finally, 14 staff is in the process of developing test and 15 certification procedures for hybrid electric buses. 16 --o0o-- 17 AIR POLLUTION SPECIALIST QUACH: Because NOx 18 aftertreatment technology is not yet available for transit 19 buses, we make the following recommendations to the Board. 20 The transit agencies that have applied for an alternative 21 NOx emission control strategy exemption will have to 22 commit resources to a NOx aftertreatment demonstration by 23 December 31st, 2001. 24 An example of a resource commitment would be a 25 resolution by a transit agency board committing funds for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 the demonstration. Further more, the demonstration 2 projects must be in progress one year later, by December 3 31st 2002, with NOx aftertreatment devices installed and 4 operating on buses in fare service. These projects can be 5 done jointly or individually. Staff is recommending that 6 joint projects include a minimum of three transit buses 7 and no more than three transit agencies working together. 8 Joint projects must show 70 to 90 percent NOx emission 9 reduction potential. 10 --o0o-- 11 AIR POLLUTION SPECIALIST QUACH: The remaining 12 issues include the following: Unless all transit agencies 13 comply with the NOx fleet average, there will be a 14 shortfall in the projected NOx reductions. Staff needs 15 guidance on the alternative NOx strategy exemption. How 16 should staff respond to the late plans, late applications 17 and lack of NOx aftertreatment demonstration. 18 Staff does not yet have enough information about 19 PM retrofit technologies that will be available for 20 pre-1995 model year bus engines by next year. Staff will 21 update the Board in mid-2002. 22 Finally, staff requires additional time to 23 develop testing procedures to adequately and fairly 24 represent the lower in-use emissions from hybrid electric 25 buses. Staff will come back next year with a proposal for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 hybrid tests and certification procedures. 2 This concludes my presentation. I thank you for 3 your attention. 4 CHAIRPERSON LLOYD: Thank you very much. A 5 simple question to start with, on the staff 6 recommendations, is there any difference there from what 7 was in the staff report? 8 DEPUTY EXECUTIVE OFFICER CACKETTE: Yes. On the 9 dates for the alternative NOx demonstration program, we 10 had, based on some discussions, had suggested moving them 11 up by about three months each, but that obviously, 12 discussion of the Board, to decide if that's wise or not. 13 CHAIRPERSON LLOYD: No, I would certainly agree 14 with that trend. 15 I think this time I'd like before -- well, I'll 16 listen to my colleagues here, we have three people to 17 testify on this, I don't know whether we want to have some 18 discussion now or whether he want to listen to the 19 presentation, but certainly my colleagues if they want to 20 say anything at this time? 21 We'll listen to the three presentations. And, 22 again, I think picture painted by staff confirms my 23 initial reaction here of great disappointment and concern 24 and recollection that this rule, which we originally put 25 out here was, in fact, an alternative fuel drill. And the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 idea was that we would make all the transit districts go 2 to natural gas. 3 We listened to the transit districts, listened to 4 the industry and basically decided there would be -- 5 offered that flexibility. And clearly what we see coming 6 out of this is that the people who are on natural gas are 7 going on a far faster path to protect public health than 8 the people on the diesel path. And this is very, very sad 9 and doesn't send the right signal to the Board at all for 10 future actions. 11 I'm also very disappointed, by the way. I don't 12 sea anybody on this list representing the engine 13 manufacturers. Being charitable, I know that travel these 14 days is not as easy, but that is it being charitable and 15 maybe staff could comment whether we've had word or 16 whether we approached them with it to -- whether they were 17 going to come anyway. 18 DEPUTY EXECUTIVE OFFICER CACKETTE: We did talk 19 to the Engine Manufacturers Association yesterday and they 20 had not planned on being here, so I don't know if it was a 21 combination of they -- just they couldn't do it or whether 22 it was a combination of the recent events. 23 Do we have other conversations early about 24 attendance and testimony? 25 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 Yes, we've had conversations with the Engine Manufactures 2 Association, and up until the last month, I had expected 3 them to send somebody to the meeting. So, again, I don't 4 know whether it was the recent events or what that caused 5 them to change their mind. 6 This is Nancy Steele. 7 DEPUTY EXECUTIVE OFFICER CACKETTE: And there 8 were no written comments provided? 9 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 10 No. EMA sent no written comments. 11 I think that's particularly illustrative then of 12 that. 13 We have Mr. McKinnon. 14 BOARD MEMBER McKINNON: Yeah. I'd be interested 15 from staff and also from the speakers, I also -- I worked 16 real hard for their to be a diesel path, and I am just 17 disgusted by what I see here. And I'd be interested in 18 what the impact would be if we went back to a CNG 19 requirement? What decisions have been made? Who's bought 20 buses? I'm real interested in having a discussion about, 21 basically, if nobody wants to work with us on the diesel 22 path, maybe we need not to have one. 23 EXECUTIVE OFFICER KENNY: If I might respond. We 24 can provide that information. I think your points are 25 very well taken. We spent a lot of time and a lot of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 effort essentially negotiating a dual path approach. As a 2 staff, we are equally as surprised. It's sort of the 3 response we have seen with regard to the flexibility that 4 the Board offered. And I do think it's even more 5 surprising that sort of the lack of people here today to 6 sort of make comments about this informational 7 presentation to the Board, particularly in light of the 8 fact that we do seem to have a wee bit of a cavalier 9 response to what truly was a very difficult and very 10 flexible response provided by the Board. 11 DEPUTY EXECUTIVE OFFICER CACKETTE: Just as a 12 factual matter, let me point out one thing. The number of 13 transit districts that chose the diesel path and the 14 number that have -- and the number that went for the 15 alternative NOx strategy that ladder is much smaller. So 16 what it implies is that even though other people chose the 17 path, they apparently don't plan on buying new diesel 18 buses in '04 through '06 or they believe that there will 19 be complying buses, which our information tells us there 20 will not be -- complying diesel buses there will not be in 21 that time frame. So some may not have needed to put in 22 the plans, other ones may, for other reasons, didn't 23 apply. 24 EXECUTIVE OFFICER KENNY: And I am going to 25 speculate a little bit here, because I don't know the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 answer to this, but it does worry me that, in fact, over a 2 three-year period transit agencies are not buying buses, 3 and what that basically says for transit agency ridership. 4 You know, one of the assumptions along this path 5 was that we were providing alternatives and we were giving 6 people the opportunity to essentially look at alternative 7 ways to provide good transit ridership to the people who 8 needed transit. And I am worried that, in fact, people 9 may be trying to essentially squeeze us by essentially 10 putting out there that they're not going to buy buses. 11 CHAIRPERSON LLOYD: Mr. Calhoun. 12 BOARD MEMBER CALHOUN: In your opening marks, 13 Chairman Lloyd, you mentioned the fact that the industry 14 had not stepped up to the plate to help with the 15 development of technology for the diesel. And -- 16 CHAIRPERSON LLOYD: No, I think in terms of the 17 rule here I think no, I didn't say that. You misheard me 18 on that part of it. I think as applying to this rule, 19 when we've given the flexibility, they've not stepped up 20 to the plate to follow through on that. But I'm well 21 aware of their significant commitment to the industry on 22 both NOx and particulates, so that was not. I was 23 focusing on this rule. 24 BOARD MEMBER CALHOUN: Okay, thank you. 25 CHAIRPERSON LLOYD: Ms. D'Adamo. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 BOARD MEMBER D'ADAMO: This is either for staff 2 or perhaps for some of the witnesses, but I'm interested 3 in any differences that exist amongst the various transit 4 agencies, in terms of the selection of the diesel versus 5 alternative. And perhaps there's an intention on some of 6 the agencies part's to somehow get around the rule or is 7 it pretty much consistent throughout. 8 DEPUTY EXECUTIVE OFFICER CACKETTE: I think 9 somebody on our staff needs to answer that, because 10 they've worked the closest and very extensively with the 11 various transit districts. 12 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 13 Nancy Steele, mobile sources control and I apologize I 14 didn't hear the beginning of your question, but I think 15 that what you were asking was are the transit agencies 16 thinking that somehow they're going to be able to get 17 around the rule? 18 I have not had any direct conversations with 19 transit agencies telling me that, but other people who 20 work in a support fashion for transit agencies have said 21 to me that they've heard rumors that transit agencies 22 think that we will simply cave and allow them to buy 23 buses. That there's no way we can prevent them from 24 buying buses. 25 And because of that, we stepped up our outreach PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 efforts as soon as we heard that and tried to have more 2 conversations with more transit agencies. And I think 3 because of that, we did get these four late applications. 4 We had transit agencies turn in late plans. So we did get 5 a little bit more interest out of them once we stepped up 6 and said no we really are serious about this regulation. 7 BOARD MEMBER D'ADAMO: Could you also comment on 8 the bay area, it's disappointing to see such a great 9 number of the transit agencies selecting diesel. 10 CHAIRPERSON LLOYD: Mark, didn't leave 11 intentionally, I don't think. 12 (Laughter.) 13 DEPUTY EXECUTIVE OFFICER CACKETTE: Let me 14 comment on that and I think explain the rationale of how 15 people got to a position of supporting one technology or 16 other, but it does appear to be geographic or regional. 17 And probably one of the transit districts that we have the 18 most interaction with, their basis was they believe they 19 provide one of the most reliable services around, and 20 we're very concerned that any newer technologies might be 21 less reliable, and therefore don't want to, you know, 22 damage I guess their reputation and wanted to stay with 23 diesel. 24 Whether that is universal amongst the transit 25 districts in the bay area, I don't know, but that was one PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 of the larger ones. 2 Obviously, on the flip side, other transit 3 districts like MTA in Los Angeles and Sacramento Transit 4 have very positive experiences with natural gas buses, 5 which suggests that there's not a reliability problem and 6 they serve people very well. 7 So whether it's facts, whether it's risk aversion 8 I'm not sure, butt it was clearly almost universal in the 9 bay area to be diesel. And, of course, because of the 10 South Coast rule, it's nearly or will be universal in the 11 south coast that it's alternative fuels. And even at 12 that, that majority of the buses that are covered in the 13 south coast, you know, are going to be natural gas, even 14 without the rule, because MTA was clearly heading down 15 that path and it's the biggest transit district in the 16 State. 17 BOARD MEMBER RIORDAN: Mr. Chairman. 18 CHAIRPERSON LLOYD: Yes, Mrs. Riordan. 19 BOARD MEMBER RIORDAN: I need to ask a question 20 about the others on the fuel path selection. My thought 21 might be, because those are going to be the smaller 22 transit districts in the outlying regions. And I'm 23 wondering if infrastructure is a part of their choice, 24 meaning they'd perhaps go with compressed natural gas if 25 they had an infrastructure for it, but they may not have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 the infrastructure for it. 2 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 3 I can speak to one of the transit agencies in those 4 outlying areas. We've had many conversations with El 5 Dorado Transit and they have clearly stated to us that it 6 is an infrastructure issue. 7 BOARD MEMBER RIORDAN: And the cost of that 8 infrastructure is significant. So I think when we look at 9 others, I would say to my fellow board members, that is 10 going to be a very key element of the decision-making 11 process and why they chose diesel. 12 DEPUTY EXECUTIVE OFFICER CACKETTE: I think in 13 most cases, it's not that natural gas isn't available, but 14 it has more to do with the investment in the refueling 15 station versus the number of buses that they have. 16 BOARD MEMBER RIORDAN: Exactly, which is the 17 infrastructure, which is the capital investment that they 18 have to make. 19 CHAIRPERSON LLOYD: On the 15 people who 20 submitted exemptions applications, only one was adequate, 21 that was the Santa Clara VTA. Of the remainder, the 14 22 remaining ones there, how were they geographically 23 distributed, are they predominantly bay area? 24 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 25 The three others that submitted plans, two are bay area AC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 Transit and Golden Gate and one is south coast Montebello. 2 Of the ones that submitted late plans, they're 3 kind of all over the State, two of them are in the bay 4 area and the others are in other areas. The ones that 5 submitted late applications, again, San Diego, San Luis 6 Obispo, Redding, so all around the State. 7 CHAIRPERSON LLOYD: Okay. Thank you. 8 Supervisor DeSaulnier. 9 BOARD MEMBER DeSAULNIER: Mr. Chairman, I left 10 the room because I thought we were going to have public 11 hearing before comments. But I did mention to the 12 Chairman that after the last couple of meetings, I'm 13 beginning to wish I represented some other area than the 14 bay area. 15 (Laughter.) 16 BOARD MEMBER DeSAULNIER: But I'm as concerned 17 and frustrated as my colleagues are. And this is one of 18 the rulings that I've had second thoughts about in terms 19 of the dual path. And I think all of us clearly thought 20 that if an agency was going to choose the diesel path that 21 the expectation was that they were going to be aggressive 22 in terms of proving that the benefits were as great as the 23 alternative path. 24 But I intuitively, and this is a character flaw 25 sometimes that I have that I trust people, I'm looking at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 Mr. Kenny, not because of I didn't trust him -- 2 (Laughter.) 3 BOARD MEMBER DeSAULNIER: -- but you always told 4 me that this would work. And I remember that conversation 5 you and I had in San Francisco with Tim Carmichael. My 6 concern is a compliance issue. And, you know, I think 7 that's the gist of what we need to discover today. And I 8 done disagree with Matt. If I was to go back to that 9 meeting, I think I would vote against the dual path. 10 And I think we have to send a clear message to 11 all of the transit operators and I will say particularly 12 for the ones in the bay area that this is we mean what we 13 said, and if they don't deliver, they're going to have to 14 choose -- they're going to have to be in the alternative 15 path. 16 So how do we do that within the authority we have 17 and do we have to seek legislative authority? I mean, it 18 comes to my mind that the transit agencies in the bay area 19 Have got more and more money from transportation funding 20 from maintenance and operation. Maybe there's a way 21 legislatively to hold that back from them if they don't 22 comply. 23 EXECUTIVE OFFICER KENNY: Well, I had originally 24 hoped that we'd actually have greater attendance at this 25 meeting, so that, in fact, you know, those who were here PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 would actually hear kind of the Board's response, because 2 this was an anticipated response by the Board. I mean, 3 this is disappointing what we're seeing essentially from 4 the dual path agencies that are on the diesel path. 5 To the extent that we don't have that, I mean, I 6 think what we have to do as a staff is actually go back to 7 the diesel agencies and let them know very clearly that 8 the Board is not happy. And, you know, one of the things 9 that we can do is we should do a follow-up to you with 10 essentially kind of what the response is from the transit 11 agencies after we have gone back to them. 12 I think clear option that should be placed on the 13 table is if, in fact, we don't see the response that was 14 anticipated when the flexibility was provided in the rule, 15 that the rule may be considered for modification, and that 16 we would then bring that rule back to you. 17 But this is very disappointing. And you're 18 right, I mean, we did actually think and I actually 19 personally thought this wa kind of a flexibility that 20 would be a responsible thing to do and would provide the 21 results that we were all looking for. And at least kind 22 of in our first report to you, it's a pretty dissatisfying 23 report that we're making to you. 24 BOARD MEMBER DeSAULNIER: Well, and one of the 25 problems too is if I -- and I'll conclude with this, is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 all of these agencies are out making their plans in terms 2 of their budgets for purchasing and replacing vehicles. 3 So the longer we let them go along, the more -- the deeper 4 we get into their diesel purchases. 5 And I'm little bit concerned with certain level 6 of collusion between the transit operators and the 7 manufacturers, and that's just intuitive. 8 EXECUTIVE OFFICER KENNY: Well, I'm also worried 9 about that. And I'm worried about the fact that to the 10 extent that somebody's on a diesel path and they're not 11 submitting a plan for an alternative NOx proposal, you 12 know, what it's basically saying is they don't plan to buy 13 any buses for a three-year period, and that worries me 14 greatly, because essentially what it's saying is that, you 15 know, they're going to essentially try to just force us. 16 And so I do think that, you know, what we have 17 proposed to you is that we essentially would give them an 18 additional three months roughly to essentially be either 19 serious or not serious about this. And, if, in fact, you 20 know, we think that we are not seeing a serious response 21 that we should come back to you and that response that we 22 would provide to you at that point in time would probably 23 consider essentially a modification to this rule. 24 BOARD MEMBER DeSAULNIER: Thank you, Mr. 25 Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 CHAIRPERSON LLOYD: Ms. D'Adamo. 2 BOARD MEMBER D'ADAMO: Two questions. What sort 3 of authority do we have with regards to sanctions or with 4 regard to those that don't clearly intend upon complying 5 and what sort of communication could be sent now so that 6 we don't wait till staff brings it back to us. 7 GENERAL COUNSEL WALSH: Well, there are certainly 8 provisions in the statute for civil penalties, although 9 those are minor and really are not going to serve the 10 goal. We do have authority to seek injunctive relief, 11 which would require the transit agencies to move forward 12 and come into compliance with the regulation, and that 13 would, in my opinion, be the best way to proceed. 14 BOARD MEMBER D'ADAMO: As a practical matter, 15 though, sending that message now? 16 EXECUTIVE OFFICER KENNY: I think as a practical 17 matter, that's probably the wrong message to send right 18 now. I think as a practical matter what we really need to 19 do is convey to the transit agencies the Board's feelings 20 with regard to the compliance that we're seeing on the 21 diesel paths, and try to essentially move those agencies 22 into a stronger compliance path. And if, in fact, we 23 don't see that occur, I do think it's imperative upon us 24 to essentially report back to you and to probably 25 recommend to you that we look at regulatory modifications PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 to the dual path. 2 CHAIRPERSON LLOYD: Dr. Burke. 3 BOARD MEMBER BURKE: I'm a little confused here. 4 In the 1190 series from South Coast, we obtained our 5 authority through the legislative process. Are you saying 6 that South Coast has more authority than the ARB? 7 EXECUTIVE OFFICER KENNY: No, we actually have 8 the authority, as a Board to -- 9 BOARD MEMBER BURKE: Then my next question is if 10 you replicated, and I know this is a terrible thing to say 11 to the ARB, but I'm saying this, if you replicated the 12 South Coast rule, what would happen? 13 EXECUTIVE OFFICER KENNY: If you essentially 14 adopted a CNG only rule for transit buses in the state, 15 then we would have CNG transit buses throughout the state. 16 BOARD MEMBER BURKE: Now, let me speak, because 17 I'm spent two years on this infrastructure issue. If you 18 do an economic model of infrastructure costs versus costs 19 of effect, including health care and all the other things 20 that tie into continue with the utilization of these 21 buses, infrastructure care becomes minuscule. 22 So, you know, I just would like my fellow board 23 members to think about that. You know, it sounds like big 24 numbers when you're talking about it, but when you're 25 talking about -- I'm not even going to where the loss of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 human life, that's unfair to use, but it's true. But when 2 you talk about the maintenance of people in the State 3 health system not in the private, the State health system, 4 infrastructure costs become less onerous. 5 CHAIRPERSON LLOYD: I think Dr. Burke, I don't 6 disagree with anything you say there. The one caveat, I 7 think is one that Mrs. Riordan mentioned. And some of the 8 transit districts in the state have a slightly different 9 perspective there on that part of it. 10 BOARD MEMBER BURKE: Well, then I think part of 11 our role should be to help them. I if it takes help, give 12 them help. 13 BOARD MEMBER RIORDAN: Just send money. 14 CHAIRPERSON LLOYD: Supervisor Patrick. 15 MR. PATTERSON: Thank you. I'd like to second 16 what Dr. Burke suggested, and that's that, you know, that 17 we help folks. We somehow devise the means through State 18 funding or something to be able to put this infrastructure 19 in place. I remember very clearly when we decided that we 20 wanted to require CNG. I believe it was in 1998, if I'm 21 not mistaken. I have continually felt uncomfortable with 22 this, continually felt uncomfortable with this. 23 And when we dealt with this rule early last year 24 and we suggested a carve out the San Joaquin valley, it 25 was like running into a buzz saw. I mean, wow, it was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 unbelievable. 2 All the transit agencies were just furious about 3 it. And then I realized, now, that half of our folks in 4 the San Joaquin valley have decided, you know, to go ahead 5 and make that commitment, which of course makes me very 6 proud. But, you know, I don't know what's going on behind 7 the scenes, but I think most of us can put two and two 8 together on this one. 9 And I think we made a mistake when we backed 10 down -- when you -- this is like dealing with your 11 children at home. When you say this is what we're going 12 to do, oh gee whiz, I think we're going to go in a 13 different direction, they don't know -- really, they don't 14 know the level of commitment that this Board has and that 15 this agency has. And I'm certainly not implying that 16 these folks are children, but we're sending mixed messages 17 here, and I think that here in lies the problem. 18 And so I'm certainly willing to listen to what 19 folks have to say today, and I think that Mrs. Riordan's 20 point is well taken, you know, that if it's an 21 infrastructure problem, how can we help facilitate them 22 moving in that direction. We know that not everyone has 23 the means to do this. And, you know, unfortunately the 24 transit folks are not the folks that are responsible for 25 public health dollars that are being spent. They're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 responsible for moving people around. 2 So we have to work with them to help them with 3 the infrastructure, to help them have confidence that this 4 will be an effective solution to their transportation 5 problems, but I think that we bear a lot of responsibility 6 in sending mix messages to people. And it appears to me 7 that they're hanging back, sort of, waiting to see where 8 we're going to go next. 9 And so I am glad we're having this conversation, 10 because I think if anything, this Board is sending the 11 message that we're going to tighten things up rather than 12 just allow this to play out. 13 CHAIRPERSON LLOYD: Thank you. Maybe we can go 14 into the witnesses at this time. We've got four 15 witnesses. I'll call them all in order, John Bates with 16 San Luis Obispo Regional Transit Authority; Richard Burton 17 Monterey-Salinas Transit; Paul Wuebben, South Coast AQMD; 18 Art Douwes from Valley Transportation Authority in San 19 Jose. 20 So first John Bates. 21 MR. BATES: Thank you, Mr. Chair and members of 22 the ARB Board. My name is John Bates. I represent the 23 San Luis Obispo Regional Transit Authority. We have 24 several concerns, and I'll be right upfront with you, we 25 are one agency that did submit a request for an exemption PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 late. I believe one of the staff is here who we've been 2 playing phone tag with trying to get an answer to that. 3 It was suggested by Mr. Cross that I attend this 4 meeting to stress the fact that in your staff report that 5 there is a lot of agencies that are requesting or need the 6 time for an exemption to put together a plan. And some of 7 the discussion that I've heard from you folks this morning 8 has a lot to do with the reasons of why we need more time 9 to be able to put a plan together. 10 When you discuss this or you talk about this or 11 have a dialogue about the transit agencies, I believe you 12 utilize the word as urban agencies, okay, and you forget 13 about the rural agencies. We are a very rural area. We 14 only have a population of 243,000 people in our county. 15 When you tag us as an urban agency, you think 16 that we get the same funding as what the urban agencies 17 get as far as how we can provide transportation for the 18 citizens of our area. We are an attainment area, so we do 19 not receive CMAC money. We are one of the few clean 20 counties, and I'm proud to say that. And we want to 21 continue to be a clean county. 22 Some of you asked that you wanted to hear about 23 the impacts of CNG on various agencies. As a rural 24 county, we do not have CNG infrastructure. As a rural 25 agency, we park our vehicles in the outlying yards, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 meaning out from the City of San Luis Obispo, because what 2 we do is we bring people into the hub of San Luis Obispo 3 because that's where the employment is and that's where 4 the university and the community colleges are. 5 So for us to go CNG, it would be a devastating 6 impact because of the lack of revenue. We would have to 7 buy two CNG buses for one diesel because of the distance 8 we travel and the miles per gallon you get from a CNG 9 rather than a diesel bus, so that impacts us greatly. 10 The cost of the CNG vehicles is anywhere from 11 $50,000 to $70,000 more than a diesel bus. We went the 12 diesel path. We would like to continue with that diesel 13 path, but we would also like to request an exemption to be 14 able to work with your staff in coming together with a 15 plan. 16 What I envision for our agency is if we can get 17 an exemption and we can purchase diesel buses during the 18 years of 2004 through 2006, later on down the road once 19 the hybrid technology is much more developed and out of 20 the protostage, I would like to go with that down that 21 path, because it has a less impact on our community or our 22 county rather than CNG would do. 23 We also, with the retrofit, when you talk urban 24 areas versus the rural areas, I think a lot of folks don't 25 understand that there is differences in what is required PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 of each. I know I spoke to Nancy Steele twice. She was 2 very helpful. And thank you, Nancy. 3 I was under the assumption that for the PM matter 4 we would have to start that immediately, but as a rural 5 agency with less than 20 buses, we only have 18 buses. I 6 think you need to make it more known that the PM factor 7 there does not kick in until 2007 is what I understood. 8 But in the staff report here, I see it kicks in 9 at 2006. So here I'm not understanding, you know, what it 10 is. I've had a couple of phone calls from the staff, but 11 we've been playing phone tag and that makes things 12 difficult to try and clarify things. 13 I do want to bring up also is that the regional 14 transit authority administers another transit agency in 15 San Luis Obispo county that's not even on your list, but 16 yet in January I submitted a letter to Mr. Kenny that we 17 were going to go down the diesel path for the south county 18 area transit system. So that is not even on there. 19 So, in essence, I'm requesting that we -- that 20 you strongly think about allowing agencies to apply for an 21 exemption even though that it is past the date of when 22 that was supposed to be submitted. Myself, I didn't 23 realize that the engine manufacturers were not going to be 24 able produce an engine to meet your specifications. I did 25 not realize that until July when I was in an APCD meeting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 in San Luis Obispo where I was applying for funding to 2 purchase buses. 3 And the subject came up in the questioning of the 4 panel at that particular time, and I understand the letter 5 came out in June 19 to various agencies. Our agency did 6 not receive that letter. 7 But that's no excuse. So I'm here to ask you if 8 you would reconsider and allow the agencies to -- or 9 extend that exemption time period so that we can work with 10 one another to resolve some of these issues. 11 I'll be glad to answer any questions. 12 CHAIRPERSON LLOYD: Thank you very much. 13 Mr. McKinnon and Ms. D'Adamo. 14 BOARD MEMBER McKINNON: How many of your bus 15 fleet on a daily basis need to go over the questic grade? 16 MR. BATES: Right now we have 16 trips that go 17 over the questic grade. 18 BOARD MEMBER McKINNON: How many buses are used 19 in those 16 trips? 20 MR. BATES: That is nine buses. 21 BOARD MEMBER McKINNON: Thank you. 22 CHAIRPERSON LLOYD: Ms. D'Adamo and then Dr. 23 Burke. 24 BOARD MEMBER D'ADAMO: If the engine 25 manufacturers had the equipment or the buses available, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 would you be able to comply? 2 MR. BATES: In 2004 and 6? 3 BOARD MEMBER D'ADAMO: Yes. 4 MR. BATES: Yes. Otherwise, right now we have 11 5 newer buses. And when I say newer, they are from 1995 6 through 1999 and the other remaining seven are in the 1980 7 series. So I am gathering information right now so that I 8 can meet the 4.8 grams by October 1 of 2002 to retrofit 9 those older buses with newer engines. 10 And right now what I'm looking at is a Series 40 11 with a New World Transmission, which is also a great 12 impact to our agency, because we're talking about a little 13 over $100,000 to retrofit a 1982 or 1983 bus that's just 14 been rehabbed four years ago with an new engine and a 15 transmission. 16 So it may even cause -- it may have a ripple 17 effect depending upon what our board wants to do. Do they 18 want to go ahead and just take that bus out of service or 19 do they want to pony up the cash that they don't have and 20 reduce service to the residents of the county. 21 BOARD MEMBER D'ADAMO: Mr. Chairman, it's been a 22 while since I've looked at this, and I'm a little rusty on 23 the time lines, could staff answer the question with the 24 dates that the witness has provided, would that be in 25 compliance? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 2 I'm not exactly sure what your question is. 3 BOARD MEMBER D'ADAMO: I just can't tell. He 4 said, yes in response to my question would he be able to 5 comply. He said yes, but then provided a couple of dates, 6 and I'm not sure if those indicates are in compliance with 7 the regulation, would put him in compliance if we was able 8 to meet the dates or the goals that he has set out. 9 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 10 I guess, it's a little more complicated than that. The 11 issue is that all transit agencies if buses are available 12 that are .5 gram NOx from 2004 to 2006 all transit 13 agencies that purchase those buses would be in compliance. 14 The difficulty is that those buses will likely 15 not be available, those engines I should say, will not 16 like available according to the engine manufacturers, and 17 so the transit agencies must purchase essentially 18 noncomplying engines, but at the same time demonstrate to 19 us that through 2015 they can show greater NOx benefits 20 than if they had purchased those .5 gram engines. And 21 that's the difficult in coming up with that plan. 22 So we have had some meetings. We have worked 23 with some of the transit agencies to -- we have a spread 24 sheet that we've given out to show them what tools we have 25 to help them come into compliance. There are some that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 may simply not be able to purchase enough buses to 2 demonstrate that, and there are some that may have such a 3 new fleet already that they're going to have a difficult 4 time coming into compliance. So it is a challenge for 5 them to do this. 6 BOARD MEMBER D'ADAMO: But the real problem is 7 the engine manufacturers that the buses just aren't 8 available. 9 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 10 Yes, it comes back to the manufacturers. 11 CHAIRPERSON LLOYD: Or they could purchase 12 natural gas. 13 RETROFIT IMPLEMENTATION SECTION MANAGER STEELE: 14 They could purchase natural gas and by next year they 15 should be able to purchase hybrid buses and get benefits 16 for those. 17 CHAIRPERSON LLOYD: Dr. Burke. 18 BOARD MEMBER BURKE: A couple of us down here 19 couldn't hear Ms. D'Adamo's first question. 20 BOARD MEMBER D'ADAMO: Well, I was just trying to 21 sort things out. I couldn't really tell exactly where the 22 problem is, if it's engine manufacturers or the air 23 districts or the local transit authorities. So my 24 question of the witness was would he be able to comply 25 with the regulation if the buses were available. And then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 he provided a couple of dates, and I wasn't quite clear on 2 whether or not the dates that he provided were consistent 3 with the reg. 4 BOARD MEMBER BURKE: Thank you. 5 Two things, one I wanted to ask staff, it seems 6 to me from the presentation this morning the traps are 7 only available being certified by those two companies on 8 buses that are newer buses. I mean, so there is no real 9 trap technology for the buses that need traps the worst. 10 Now, there is one that goes on a '95, but other than it's 11 '99, 2000, 2001. 12 CHAIRPERSON LLOYD: Now, you're switching to the 13 particulates. We were talking about the NOx. 14 BOARD MEMBER BURKE: Yeah. On the infrastructure 15 costs, I think you know, been so long since I worked on 16 this, it kind of took me a minute to remember it. There 17 are companies who will provide the infrastructure free. 18 There are gas companies which will provide the 19 infrastructure absolutely free, if you buy their gas from 20 them. So infrastructure then becomes not -- I mean -- 21 CHAIRPERSON LLOYD: Don't they build that in and 22 they recover those costs over a period of time? 23 BOARD MEMBER BURKE: Long term. So I mean it's 24 like -- 25 CHAIRPERSON LLOYD: It's not quite free, but they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 help with it. 2 BOARD MEMBER RIORDAN: It's not free. There's 3 nothing free. 4 (Laughter.) 5 BOARD MEMBER BURKE: But the diesel people who 6 put the technology in also cover that cost in the raised 7 cost of the engine too, so you pay for it all whether you 8 buy diesel or natural gas, but there is no capital outlay. 9 CHAIRPERSON LLOYD: And I agree, Dr. Burke, 10 that's a very attractive option to be able to do that, so 11 I definitely agree. 12 MR. BATES: The only capital outlay on that 13 particular issue is the increase cost of CNG over the 14 diesel, as well as the retrofiting of the maintenance 15 facilities, putting in all the safety devices that you 16 don't have. 17 BOARD MEMBER BURKE: They will pay for that then. 18 They'll either build new facilities or retrofit old 19 facilities. I'm not in the gas sales business, but 20 they've been before us any number of times and have done 21 it several number of times in south coast. 22 BOARD MEMBER RIORDAN: But then are you limited 23 then to buying just their -- 24 BOARD MEMBER BURKE: Oh sure. I mean, you know, 25 it's like -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 BOARD MEMBER RIORDAN: And that's a problem for 2 transit associations because they obviously like the best 3 price for -- and I realize they've done this wonderful 4 things for you, but then you're captive for X number of 5 years. 6 BOARD MEMBER BURKE: Well, you're captive to the 7 diesel people then, either way. 8 BOARD MEMBER RIORDAN: Well. 9 BOARD MEMBER BURKE: I mean, when manufacturers 10 or refiners decide to raise the prices, you know -- 11 BOARD MEMBER RIORDAN: That's true. It used to 12 be that there was opportunity. 13 BOARD MEMBER BURKE: It's a new day. In fact, 14 you're probably in a better place in the long-term 15 contract where you have a fixed price. 16 But you were saying, I didn't mean to interrupt 17 you. 18 MR. BATES: That's all right. 19 CHAIRPERSON LLOYD: I think, thank you very much 20 indeed, we'll move on to the next witness. 21 Thank you. 22 MR. BATES: Thank you. 23 CHAIRPERSON LLOYD: Richard Burton from 24 Monterey-Salinas Transit, then Paul Wuebben, Art Douwes 25 and then we have Pam Jones. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 MR. BURTON: Chairman Lloyd and Members of the 2 Board, I'm Richard Burton. I'm the Director of Facilities 3 and Maintenance for Monterey-Salinas Transit. 4 I would first of all like to say, I've been 5 working with your ARB staff over the last few months. Dr. 6 Nancy Steele, Ms. Dinh Quach that did the presentation, 7 they've been very responsive and knowledgeable in helping 8 us implement the transit rule. 9 I didn't consider myself a witness when I came 10 forward. I was just -- I'll make my remarks and I can 11 offer you a perspective because we have been operating 12 natural gas buses for five years, and can tell you what 13 that experience is about. 14 We are in that category of having submitted a 15 request for exemption by June 30th and met the deadline, 16 however we didn't submit a plan, because we weren't sure 17 what this plan was supposed to look like, not knowing or 18 being able to project what's going to be in the market 19 2004 to 2006. And primarily our reason for requesting an 20 exemption is that we have an option if those .5 NOx buses 21 are not on the market, maybe we can do something. 22 CHAIRPERSON LLOYD: Can I just ask you just as 23 you continue, you have both natural gas and diesel and 24 what's the split do you have in your fleet? 25 MR. BURTON: About 23 percent of your current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 fleet. We have 75 buses in our fleet, 17 of those are 2 natural gas. We started operating eight of them in May of 3 '96 and added an additional nine in May of '97. 4 CHAIRPERSON LLOYD: Thank you. 5 MR. BURTON: I'm here to support the staff 6 recommendation, which is that you allow the staff to work 7 with us in trying to come up with a plan. But I want to 8 give you, as well, our perspective in that we are faced 9 with putting buses on the road to serve the community. 10 When we have mandates such as this that don't have 11 resources to go with them, that's a real problem and we're 12 trying the best we can to do that. 13 We have submitted a plan that we believe over the 14 16-year period being analyzed here, 2000 to 2015, does get 15 newer buses on the road sooner. And I think that's key 16 not just looking at the individual statistic NOx fleet 17 average over that 16-year period in isolation. That's a 18 number, but it's a factor to be considered. 19 The other thing that we're being forced to do is 20 invest dollars in older buses. Buses that are 12 and 16 21 years old, we're having to invest major dollars in to 22 comply with the CARB rule, which is not really a good cost 23 effective use of public money, but that's what the rules 24 require, so that's what we're doing. 25 We would rather be able to buy new buses, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 we're not able to get that done because we have to 2 assemble the money. We're not like a lot of the large 3 transit systems that have some taxing ability or some 4 money coming in from other sources, so we have to assemble 5 the money. Once we have the money then it's a two-year 6 lead time to actually produce a new bus. So that is a 7 problem, and we cannot get all that in place before 2003 8 before the 2004 and 2006 time frame. And we don't want to 9 wait till 2007 to replace buses. 10 We're concerned about putting safe buses, 11 reliable buses, more modern buses, wheelchairs that are 12 more reliable, those kind of things. So we have to try to 13 balance this whole scope of what we're trying to do here. 14 And we think we've come up with a plan to do, essentially 15 which again gets the older buses off the streets sooner. 16 I guess that's what I wanted to say in support of 17 our exemption request and that you allow the Board to -- 18 your staff to consider our exemption along with those 19 other transit systems. 20 Just to give you a few notes on some comments 21 that you've had here this morning. I'm on the California 22 Transit Association Maintenance Committee. We do meet 23 periodically. This obviously has been a big topic in our 24 minds ever since the discussion started with your board 25 about the public transit fleet rule. I know of no one who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 is attempting to dodge any rule. I think we're all trying 2 to find a way to comply with it, and we're trying to find 3 a way to get the money to do it. 4 We can only go so far as the technology will 5 allow, if the technology is not there in the marketplace. 6 And again we can't project what's going to be on the 7 market three, four, six years from now, so we're doing the 8 best we can with the dollars we have available to us. It 9 has been stated that one of the reasons that this rule is 10 focused on public transit is that we have funding 11 available to us. Well, we don't. 12 We have tried some of those sources. We have 13 applied through the Carl Moyer program. We've asked for 14 $200,000. Its the max allowable. We've been granted 15 $92,000 That doesn't come close to doing what we need to 16 do, because we're competing with all those other projects 17 out there in the air districts that have a need for 18 improving air quality as well as us. 19 As I mentioned, our CNG fleet, we have some 20 experience and we often get the question of why is our CNG 21 experience not as wonderful as Sunline Transit Palm 22 Desert, and your own Sacramento RTD here in town. And 23 those are friends of mine, and I talk with them often. 24 And the answer is I don't know. All I can relate is what 25 our experience is. And our experience is that there are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 higher capital operating costs for the initial acquisition 2 of buses, for the fueling infrastructure and maintenance 3 shop modifications that have to be made to incorporate 4 alternate fuel buses. 5 There are higher operating costs, both the 6 maintenance cost per mile and the fuel cost per mile. 7 There are performance penalties that we pay because there 8 are less ranges on these buses. We can't seat as many 9 people, because of the weight considerations. We've had 10 to make alterations in our fueling process in order to 11 keep buses on the road longer. 12 What we've found, I like to tell people when we 13 got into this, we didn't even know how to spell CNG. 14 (Laughter.) 15 MR. BURTON: But we were committed to clean air. 16 As a result of our experience, we have elected to go on 17 the diesel path. And that reason is that we can get more 18 for our money by going to the diesel path. And we've got 19 to remember here that the diesel engines of today are much 20 cleaner than these older smoke and diesel engines we're 21 talking about. They meet the CARB standards. 22 Now, whether they're going to meet them at 2004 23 or 2006, that's the issue. My question, if there is a 24 concern, and I heard you discussed here earlier today, if 25 there is that level of disgust, why are we not focusing on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 the entire diesel inventory? Why are we only looking at 2 public transit buses. There is trucks out there. There 3 is marines. There's the school buses. There's all that 4 kind of stuff. But the rules we're talking about here 5 today only apply to public transit. 6 CHAIRPERSON LLOYD: We have to take one at a 7 time. We are addressing those other issues, rest assured. 8 MR. BURTON: I'm just offering you some feed back 9 sitting in the audience, sir. 10 Thank you. 11 CHAIRPERSON LLOYD: I would like to, by the way, 12 what's happening here is that as we get more into 13 discussion, I have more witnesses signing up, so I'm going 14 to have to try to limit them to five minutes, other wise 15 I'll be -- 16 MR. BURTON: The only other comment I had to make 17 was we looked into the free gas, and it ain't free. We 18 have to be able to guarantee them a certain amount of 19 gallons of fuel per year. And, you're right, there's no 20 upfront capital cost. That's the attraction. But you 21 have to sign a ten-year contract that we're not able to do 22 because the Federal Transit Administration doesn't allow 23 it, and we have to guarantee them a certain number of 24 gallons per year. We're not able to do that. Our fleet 25 is not that big. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 So we've considered options. We've looked for 2 funding. We've looked for ways to do this. We're going 3 to comply. Whatever the rules end up being, we're going 4 to comply. And I assure that other transit systems out 5 there are doing the same. 6 CHAIRPERSON LLOYD: Thank you very much. 7 Questions from the Board? 8 Yes, Ms. D'Adamo. 9 BOARD MEMBER D'ADAMO: Sir, just a quick 10 question. 11 CHAIRPERSON LLOYD: Mr. Burton. 12 MR. BURTON: I'm sorry. 13 BOARD MEMBER D'ADAMO: You said you purchased 14 your first two CNG buses in '96. 15 MR. BURTON: They went into service in May of 16 '96. We had eight buses. 17 BOARD MEMBER D'ADAMO: And have you since that 18 time purchased diesel? 19 MR. BURTON: Well, we have purchased eight CNG 20 buses in services in May of '96. We've purchased nine CNG 21 buses that went into services in May of '97. We purchased 22 21 diesel buses that went into service May of last year, 23 May of 2000. Those are the only new buses we've bought in 24 the last ten years. 25 BOARD MEMBER D'ADAMO: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 CHAIRPERSON LLOYD: Thank you very much. 2 Next we have Paul Wuebben then Art Douwes, Pam 3 Jones. 4 MR. WUEBBEN: Good morning, Mr. Chairman AND 5 members of the Board. My name is Paul Wuebben the Clean 6 Fuels Officer, with the South Coast Air Quality Management 7 District. We greatly appreciate this opportunity to 8 present our comments on this important issue. 9 This is certainly a very appropriate time to 10 consider the emerging information related to the 11 implementation of CARB's rule, especially since the South 12 Caste AQMD's transit bus fleet Rule 1192 was adopted on 13 June 16th the year 2000 and took effect immediately for 14 bus fleets of a hundred or more and was effective starting 15 for July of this year for bus fleets between 15 and 100 16 vehicles. 17 First, I'd like to underscore the importance that 18 the South Coast AQMD places on effective and aggressive 19 control of transit bus emissions. The leadership of such 20 transit agencies as Sunline Transit, Los Angeles County 21 MTA and Orange County Transportation Authority as well as 22 some of the transit districts outside the south coast air 23 basin has proven to be invaluable as we strive to attain 24 the regional air quality standards and reduce exposure to 25 toxic air contaminants such as diesel particulate. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 In addition, the remaining larger transit 2 districts in our air basin have recently begun efforts to 3 procure alternative fuel transit buses. There are several 4 important findings in the report. It is noteworthy that 5 73 percent of the alternative fuel buses in the State are 6 in the south coast air basin, while 78 percent of the 7 buses in the State, as a whole, are diesel. This 8 statistic is powerful proof that the southern California 9 transit fleets have taken a significant leadership role. 10 The report also notes that there are no requests 11 for exemptions from CARB's requirements from the transit 12 districts which have chosen the alternative fuel path. 13 Conversely, 15 transit districts on the diesel path are 14 seeking exemptions from the CARB requirements related to, 15 as you know, the testing of advanced diesel technology. 16 We find that most interesting. 17 After only 18 months of a 15-year path, there is 18 now troubling evidence that diesel technology has not kept 19 up with the less stringent near-term targets CARB has 20 established for the diesel path. In light of the U.S. 21 EPA's three-year delay until 2010 in establishing -- or in 22 imposing the .2 gram per brake horsepower hour NOx 23 emission standard, CARB now in their report suggests that 24 quote, "This change translates into a delay of early 25 demonstration programs so no NOx emission controls are not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 yet available to transit agencies." 2 Now, we must, in all due respect, take exception 3 to that statement in the staff report. NOx controls are 4 available today in the form of natural gas buses, engines 5 I should say, certified to the optional 2.5 or less gram 6 standard. As the South Coast Air Basin and our district 7 reasoned in its adoption of rule 1192 for transit bus 8 fleets, diesel control technology is currently far behind 9 the progress reflected in current, let alone emerging, 10 natural gas technology. 11 The staff report notes that 44 of 86 fleets that 12 have submitted data are not yet in compliance with the 13 October 1, 2002 4.8 average NOx fleet average remission 14 requirement. Of even more concern, 12 of those 44 transit 15 districts have submitted exemption requests with no plan 16 whatsoever, despite a deadline, as you know, of June 30th 17 of this year. 18 We also disagree with your staff's recommendation 19 that additional time be given to initiate demonstration 20 programs with the actual start of an infield demonstration 21 delayed, and as I understand it now, I assume January 1, 22 rather than March of 2003. CARB established its dual path 23 regulatory concept premised in part on the expectation 24 that engine manufacturers would, in fact, come forward 25 with advanced diesel technology demonstrations on a timely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 basis. 2 Now, we learn that after only 18 months of a 3 15-year program they're well behind that schedule. It 4 also appears that engine manufacturers will not be 5 providing advanced technology demonstrations of either a 6 .5 or a .2 gram NOx technology consistent with your 7 requirements. 8 Mr. Chairman and members of the board, it is now 9 time for clear distinctions to be made between the diesel 10 and the alternative fuel path. At a minimum, any loss of 11 near-term emission reduction benefits should be accounted 12 for and made up. Choosing the alternative fuel path 13 presents innovative challenges to bus operators with a 14 difficult test of their leadership frankly. 15 Yet, many have, in fact, stepped up and have 16 overcome those challenges and have formulated and 17 formalized their commitments. Now, those who took less 18 near-term risk and costs associated with the diesel path 19 are asking for exemptions and delay. There is only one 20 adequate description of such proposals, they are simply 21 unfair. 22 We hope that your actions on this agenda item 23 don't have the unintended effect of undermining our local 24 transit bus rule, which is successfully being implemented. 25 We further hope that your board will take action to ensure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 that the diesel vehicles do their fair share of the 2 cleanup effort in a timely fashion. 3 Thank you very much for this opportunity and I'd 4 be glad to address any questions you may have. 5 CHAIRPERSON LLOYD: Thank you very much, Paul. 6 And just one point there on your penultimate paragraph, 7 Paul. I think as Mr. Kenny indicated and as we've 8 indicated consistently in the past that any action here 9 will not undermine your rule at the south coast. 10 MR. WUEBBEN: We greatly appreciate that. 11 CHAIRPERSON LLOYD: Supervisor DeSaulnier. 12 BOARD MEMBER DeSAULNIER: Either for Paul or for 13 Dr. Burke, and I find myself in this instance, in 14 representing the bay area but wanting South Coast to 15 serve, which is -- 16 BOARD MEMBER BURKE: Please don't. 17 BOARD MEMBER DeSAULNIER: So you want the Raiders 18 back? 19 BOARD MEMBER BURKE: We'll take anything. How 20 about the 49ers? 21 BOARD MEMBER DeSAULNIER: When you had these 22 discussions for the transit operators, what's happened in 23 the bay area and we may hear some more of this since we 24 have some of them going to speak, there's the difficult 25 and I think's legitimacy I know there's some legitimacy to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 this, is that by putting more resources into alternative 2 fuels, it takes a way, for instance, from transit runs in 3 the evening hours in low-income communities. So trying to 4 help them to be able -- and also because there's more 5 pressure to get more people out of single occupancy 6 vehicles into transit in all of our urbanized areas in 7 particular. 8 So when you went through this debate, I assume 9 you had that, you're shaking your head. How do you 10 reconcile that to get to the point where you've done what 11 you've done and gone the alternative route. 12 MR. WUEBBEN: Well, I think that our board 13 grappled with that. And in our discussions, for example, 14 with the MTA we addressed that early on. And I think the 15 first thing was that we were fortunate to have tremendous 16 leadership on MTA, which back in 1991/92 established a 17 policy that would establish alternative fuels as the 18 policy. 19 But we did view this question of a trade off 20 between numbers of buses and the fuel choices, in some 21 sense a false choice, because there is a significant 22 amount of exposure to diesel particulate that's 23 disproportionate to the populations that are served by 24 transit fleets that face even greater health risks and 25 perhaps their inability to address or to handle those PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 kinds of health issues. 2 So I guess we looked at that the health costs for 3 exceeded the near-term incremental operating costs. At 4 the same time, your board and our own have worked very 5 hard to create incentives that have, in fact, laid the 6 groundwork for handling some of the differential capital 7 costs, both for the refueling but also for what was 8 referred to as some of the facility modification 9 requirements. 10 So I think that we've moved in that direction. 11 We're even trying to add to that by enhancing the training 12 and maintenance that goes on that's involved with natural 13 gas engines, which is slightly different. 14 So there has really been an evolution in both the 15 differential costs and our understanding of the health 16 costs. And I think that if you were to ask any 17 alternative fuel fleet operator, transit district in 18 southern California if they felt that they made the right 19 decision despite those slightly higher near-term costs, 20 that they would all answer that that's been very favorable 21 experience in the aggregate. 22 We do need resources to continue to build the 23 transit fleet and those resources are being identified. 24 And there is growth going on there, but I think that the 25 choice you've laid out there was one that was originally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 considered a significant one and that's been offset by 2 real experience. 3 BOARD MEMBER DeSAULNIER: So just to conclude, 4 your experience shows that you've been able to handle the 5 issues of taking very restricted resources away from 6 transit ridership and away from particularly 7 environmentally justice neighborhoods, because that's the 8 arguments we hear in the Bay Area. 9 BOARD MEMBER BURKE: Right. And I'll pass along 10 to my wife your very kind comments on her leadership role 11 as the Chairman of the MTA. And she only fives me one 12 minute to speak at home, so I will really try -- 13 (Laughter.) 14 BOARD MEMBER DeSAULNIER: How does she enforce 15 that? 16 (Laughter.) 17 CHAIRPERSON LLOYD: That's true leadership. 18 BOARD MEMBER BURKE: That's true leadership 19 right. Yeah right. 20 Because of the federal lawsuit by the bus riders 21 union, at the MTA the service there was no decrease in the 22 service in environmentally challenged areas or 23 underprivileged areas. 24 But what I was going to address is that, you 25 know, it was a crazy idea of mine a couple of years ago, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 and since I've gotten here it's even crazier, but, you 2 know, I thought out to Mr. Kenny and let him ruminate it 3 with him in his mind. We talk about places that have -- 4 Mrs. Riordan has been giving me an education down here, a 5 short course on, you know, rural -- 6 BOARD MEMBER RIORDAN: Rural versus urban, yes. 7 BOARD MEMBER BURKE: Rural versus Urban, and she 8 makes some excellent points. I think maybe, you know, we 9 should consider it is as our role to not only -- you know, 10 to be able to cobble together some kind of plan. For 11 example, you know, the gentleman who was just here from 12 San Luis Obispo who runs a great transit system and he 13 says the cost, he can't do the volume and the cost. 14 Well, if we took all the small districts and 15 provided a guarantee as a State agency or put them 16 together in some kind of a package, we could probably do 17 all their infrastructure, get a much better cost and 18 natural gas for them than they ever dreamed of getting and 19 improve the air quality. 20 I think there are all kind of ideas like that out 21 there if you just kind of think out of the box a little 22 bit and realize that, you know -- and, you know, I'm not 23 quite sure what would happen to diesel technology if we 24 did something like that. I have a feeling it would be 25 like John F. Kennedy saying we've got to go to the moon PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 and then NASA, you know, all of a sudden gets on the ball 2 and we find ourself walking around the moon playing golf 3 on the moon. 4 So, you know, I think that there's all kinds of 5 positive ramifications to some consideration of some of 6 these issues. And, Paul, I think your letter makes a 7 great case, and I'm extremely proud that we have 73 8 percent of the alternative fuel buses in California in the 9 south coast. I mean, it's something I like. 10 CHAIRPERSON LLOYD: Paul, can I ask you on the 11 new rule, how many buses have actually been brought and 12 are in operation as a result of your rule? 13 MR. WUEBBEN: Well, there are a total today of 14 1,800 natural gas bus engines. 15 CHAIRPERSON LLOYD: No, That wasn't the question. 16 I think as a result of our rule, I don't actually 17 know it precisely since in the last year and a half, 18 there's been perhaps, at least 150, I would think. 19 They've been brought on at MTA, for example, at the rate 20 of about 20 or 30 a month. 21 BOARD MEMBER BURKE: Wait a minute. I'm a little 22 confuse. Weren't you and I at a ARB meeting and they 23 approved a purchase of 500, remember that? 24 CHAIRPERSON LLOYD: Yeah, I was only -- I'm 25 talking about -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 BOARD MEMBER BURKE: How much of those 500 are on 2 the street? 3 MR. WUEBBEN: Well, yes, in terms of the planning 4 cycle, there are. 5 CHAIRPERSON LLOYD: But I was asking how many are 6 on the street? 7 BOARD MEMBER BURKE: On the street. 8 CHAIRPERSON LLOYD: Yeah, right. 9 Thank you very much. We appreciate, again, South 10 Coast coming and taking time and testifying before us. 11 Art Douwes and Pam Jones, Gene Walker, Stuart 12 Hoffman and DiAnn Hillerman. And I'm going to call a 13 close to the witness list at this time, other wise, as I 14 say, we're going on too long. 15 16 MR. DOUWES: Good morning, Dr. Lloyd and members 17 of the Board. I'm Art Douwes with the Santa Clara Valley 18 Transportation Authority. Thank you for this opportunity 19 for allowing us to testify. 20 The VTA is from the bay area and has elected the 21 diesel path. VTA has been working very closely with the 22 ARB staff to comply and follow the regulations of the ARB. 23 VTA has submitted -- excuse me, VTA's present plan for bus 24 procurement and bus fleet do not require for us to 25 purchase and get the liberty of buses through years 2004 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 and 2006. However, VTA has submitted a plan for NOx 2 reduction despite that for two reasons. 3 Number one, there is the potential through the 4 Governor's orders or program for an express bus fleet, 5 which we had not anticipated. And the purchase of those 6 buses may require us to take delivery of some of those 7 buses during those years. 8 Regardless of that, VTA had a plan for NOx 9 reduction through the repowering of 1991, 1992 and 1993 10 buses. That plan was set in effect prior to even that 11 program coming into place. 12 We will continue that process. In fact, we have 13 completed six of the buses right now. We have, I believe, 14 six buses in work of which several are nearly completed. 15 And we have engines on board for the next batch of buses. 16 As far as the test program for the NOx 17 aftertreatment devices, we had discussions with the ARB 18 staff regarding that as to how to proceed with that 19 program. ARB staff informed us that right now there were 20 no manufacturers available to test that, and they will 21 take that on them to provide us some more information. 22 Further more as far as the PM reduction program 23 is concerned, one of the requirements is that starting 24 July of 2002, transit agencies are to start with a 25 ultra-low sulfur diesel fuel. VTA has begun the ultra-low PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 sulfur diesel fuel process. In fact, it's the first 2 agency in the State to completely convert to ultra-low 3 sulfur diesel fuel and that was done in February of this 4 year. 5 Additionally, just recently we have been calling 6 ARB staff continuously over this year to find out what the 7 status was on the PM reduction aftertreatment kits. Just 8 recently, the ARB has approved or verified some kits for 9 our engines. These are for 1995 vehicles or engines and 10 later on. 11 At this time, one of the requirements is that 12 buses should be tested to determine whether those kits 13 will actually work in the fleet. Earlier this month, we 14 had comments come out and they have implemented and 15 installed test devices on some buses to determine that. 16 And, in fact, I believe today is when they will remove the 17 data recorders to determine whether or fleet will be ready 18 for the retrofit program. 19 We will review that program. We will see and 20 determine whether we can start and implement the PM kits 21 as soon as we can. This, however, comes to a question of 22 ARB and the Board. Since these kits are for 1995 engines 23 and thereafter, which do not fall until -- under the 24 requirement until at a later time, 1994 I believe it is, 25 or 1995, will installation of these kits, at this time, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 require us to reinstall a kit when they are do? 2 One of the requirements of the emissions 3 reduction program is also zero emission buses. The diesel 4 path provides, and this is critical, that diesel 5 properties, diesel selected properties, with 200 buses or 6 more start a zero emission bus demonstration program. 7 VTA is very proud that they are part of the 8 California Fuel Cell Partnership. I just happen to have a 9 button on me. We are in the process of designing 10 facilities to handle zero emission buses. We are in the 11 process and have been out on the street for the purchase 12 of zero emission buses. We are jointly working with 13 SamTrans on that program. 14 As a matter of fact, yesterday was the due date 15 for submittals of questions and alternatives to that 16 program. We have received some submittals. 17 First, we'd like to support your staff's 18 recommendation on this program. Secondly, we want you to 19 look at your decision and keep in mind VTA's progress and 20 purpose as part of this program. We feel that we're going 21 forward and staying with the program. We would like to 22 continue with the program and work with the ARB staff and 23 the ARB to continue on and reduce emissions not only in 24 the Santa Clara valley but throughout the bay area and 25 California and the nation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 Thank you. 2 CHAIRPERSON LLOYD: Thank you very much. 3 Any questions? 4 Thank you very much. 5 Comment from Mr. McKinnon. 6 BOARD MEMBER McKINNON: Sir, thank you for paying 7 attention to what we were trying to do. Your district was 8 the one that submitted a plan and that's a good thing and 9 thanks. 10 BOARD MEMBER DeSAULNIER: Thank you. I just, Mr. 11 Chairman, want to point out that Santa Clara is in the bay 12 area. 13 (Laughter.) 14 BOARD MEMBER DeSAULNIER: I hope you all remember 15 that. 16 CHAIRPERSON LLOYD: We have some more witnesses 17 to come. I hope you will embrace them as strongly. 18 BOARD MEMBER DeSAULNIER: Hopefully they have 19 seen the light. 20 CHAIRPERSON LLOYD: Pam Jones from the diesel 21 technology forum. And I'm delighted, Pam, that I know you 22 were sitting back there, and I'm delighted you're going to 23 speak for the industry. And I'm sure you're also 24 disappointed that not body from AMA is here. 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 MS. JONES: Well, I do know some of the 2 companies, as you know, from the workshop the other day 3 have travel restrictions. And I am from the bay area. 4 (Laughter.) 5 MS. JONES: The NOx solution is going to follow 6 two paths, a long-term and a short-term. And the 7 short-term are the retrofit devices and the long-term are 8 the newer engines plus the retrofit devices. 9 The Board has put together an advisory committee 10 on retrofit at which both of those parties come together. 11 And they are coming together on October 2nd down in Los 12 Angeles. I haven't heard mention of that. And this is an 13 important issue, and maybe that's an appropriate time to 14 put this high on the agenda, and in an open and frank 15 discussion, figure out where things are with the 16 technology, because there's kind of a question of the will 17 versus the way. 18 And I think the will is there. There are 19 companies that have been having ongoing discussions with 20 the transit companies. It's not that they've been silent 21 in all this. Likewise, there are retrofit companies that 22 have submitted products for verification, and I believe 23 that Englehard has it, and EGR submitted to ARB under 24 consideration. 25 So I think you would have more of a forum to get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 a really frank discussion with everyone present on October 2 2nd to discuss really where is the technology with this. 3 CHAIRPERSON LLOYD: Well, I think yes, I thought 4 that retrofit was more focused on the PM rather than NOx. 5 MS. JONES: There may be an opportunity to 6 discuss some of the products that have NOx reduction. 7 CHAIRPERSON LLOYD: But normally the people come 8 to the Board rather than the Board go to a committee that 9 it set up. So there's some matter of protocol here. 10 MS. JONES: Well, even if it were informally, 11 it's the same people who would be talking PM and NOx. ANd 12 it is an important issue. 13 CHAIRPERSON LLOYD: And I'm sure that will 14 happen. 15 MS. JONES: That's all. 16 CHAIRPERSON LLOYD: Thank you. Thank you very 17 much. 18 Gene Walker, Golden Gate Transit, Stuart Hoffman 19 A.C. Transit. 20 MR. WALKER: Good morning, Dr. Lloyd and members 21 of the Board. I'm Gene Walker Maintenance Manager for 22 Golden Gate Transit. We submitted a plan. The plan did, 23 in fact, have holes in it that were not completed. The 24 part of the reasoning for this is -- 25 CHAIRPERSON LLOYD: So you knew when you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 submitted it, it had holes in it? 2 MR. WALKER: I submitted the plan with the intent 3 that it be complete, except there were no NOx 4 aftertreatment retrofits available at that time for Golden 5 Gate Transit to enter into a contract with those companies 6 to test the product. 7 Currently, we also are in a partnership with A.C. 8 Transit in the bay area on a ZEV project, the Zero 9 Emission Bus with a fuel cell. We were on track to have 10 coaches replaced in the year 2005. When we heard that the 11 engine manufacturers would not or could not supply us with 12 engines at that time, we took area the stand that our 1991 13 coaches that were ready for replacement that we would not 14 rebuilt those engines using the latest curb kits for 15 two-cycle engines. 16 We are repowering those coaches. We have a 17 contract for engines through 10 of 2002 for the latest 18 four-cycle EGR engines. In 10 of 2002, we will be using 19 the latest technology available that meets the .5 and the 20 2.5 NOx with a PM filter. 21 I have invited all of and any company that I've 22 been able to find or talk to test any NOx device when they 23 would like to use our fleet to do so. We have certainly 24 left ourself open to that in the past with PM devices and 25 we embrace NOx devices. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 As recently as the 10th of this month, I was at 2 Detroit Diesel in Detroit, Michigan, and I was wanting to 3 find out what was available, when it was going to be 4 available and would they assure me that we would have 5 engines in 10 of 2002 that would meet the CARB regulations 6 for California. I was assured they would. We are also 7 involved in the express bus program and have been chosen 8 to have six to eight buses. 9 The MTC has put this on the back burner, because 10 there is the possibility of engines being available in 11 October of 2002 that will be cleaner than what would be 12 used now for the express bus program. I verified that yes 13 there will be an engine for that coach in 10 of 2002 that 14 will be cleaner than what we could have today. So if we 15 want cleaner buses, we will certainly wait till then for 16 our express bus program to get the cleanest technology 17 there. 18 We have been told by the retrofit device 19 manufacturers that two-cycle engines do not have the 20 exhaust temperature signature needed to sustain a PM or 21 NOx retrofit device. We are currently on the street to 22 replace 80 two-cycle engines with the latest four-cycle 23 EGR engines. We will have those in place by December of 24 2003. 25 All other rebuilds have been stopped and we are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 replacing engines with four-cycle technology. When the 2 NOx device is available, we will have engines and 3 equipment that can embrace that technology and clean up 4 the environment. 5 We do not intend to see our reliability of our 6 coaches degradate by not replacing from 2004 through 2006. 7 We intend to repower, refurbish those coaches. If the 8 technology is available and we can replace them on 9 schedule, then somebody is going to get an awfully nice 10 coach out that's been refurbished and has late technology. 11 An important part also of our repower project and 12 the contact that we have entered into, our engines are 13 being bought back by the engine manufacturers as cores and 14 will be taken out of the mainstream. They're not going 15 down the street to get rebuilt and be put in someone 16 else's vehicle and running two-cycle technology again that 17 we all know is not clean. 18 And I thank you for your indulgence. I certainly 19 have worked with staff, Dr. Nancy Steele, Dinh Quach. 20 We've had conversations and I intend to continue those 21 conversations to make sure that we are compliant and that 22 Golden Gate Transit is doing its utmost to protect the 23 environment with the equipment we use on the diesel path 24 that we've chose. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 CHAIRPERSON LLOYD: Thank you. 2 Questions, comments from the Board? 3 Next, we have Stuart Hoffman from A.C. Transit, 4 Then DiAnn Hillerman. And If anybody else does want to 5 testify, this is the last call, please sign up. 6 MR. HOFFMAN: Good morning, Mr. Chairman and 7 Members of the board and ARB staff. My name is Stuart 8 Hoffman represent A.C. Transit today. 9 Although, I didn't have any prepared speech with 10 the findings of the Board and staff, I, too, am concerned. 11 A.C. Transit had chosen the diesel path and submitted 12 alternative NOx strategies and plans to ARB staff by the 13 required deadlines. 14 Although, we have been advised our plan is 15 incomplete, A.C. Transit continues discussions with ARB 16 staff to determine additional low NOx strategies. 17 With the majority of our fleet consisting of 18 two-cycle engines, we are, in addition, aggressively 19 pursuing additional engine repowers, particularly the NOx 20 traps, early acquisitions number one low-sulfur fuel and 21 the purchase of zero emission buses. 22 Let me assure you A.C. Transit is committed to 23 the diesel path. A.C. Transit is excited to continue its 24 partnership with ARB staff in search for low NOx 25 technologies. And I want to assure the Board and staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 that A.C. Transit will not disappoint and make you feel 2 sorry that you had given that as an alternative. 3 Thank you for your time. 4 CHAIRPERSON LLOYD: While our chairman is gone, 5 just let me ask you, if you could, where is A.C. Transit? 6 MR. HOFFMAN: A.C. Transit is located in the Bay 7 Area Air Quality Management District in Oakland, 8 California. 9 BOARD MEMBER RIORDAN: And it's a private 10 transit, is it? 11 MR. HOFFMAN: It's a public transit property. We 12 hall a lot of Oakland Raiders to the -- 13 (Laughter.) 14 BOARD MEMBER RIORDAN: I'm just a little dense, 15 because there have been, in the past, some private transit 16 companies and I thought maybe you represented one of 17 those. 18 MR. HOFFMAN: I don't know if I can comment on 19 that, probably many years ago. 20 BOARD MEMBER RIORDAN: I think it would be 21 appropriate for the next speaker to come forward, DiAnn 22 Hillerman. 23 MS. HILLERMAN: Good morning. I'm a little 24 hesitant to speak this morning, because I am a freshman in 25 the industry. I've only been here since March from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 Florida, but I thought I might be able to give you some 2 fresh eyes on what I've seen. 3 I work for Stewart and Stevenson who is the 4 distributor for Detroit Diesel Engines, who is a 5 manufacturer of both diesel and CNG engines. It seems 6 that the perception here has been that somehow the people 7 that I'm calling on, who are the transit properties in 8 northern California, are not inclined to want to 9 cooperate. And I can tell that you I have spent the last 10 six months calling on everyone of them, and everyone of 11 them has been concerned about how they can do this. 12 I've been asked many questions. I've had not 13 enough answers. Predicting the future is very difficult. 14 It's easy to say do something. It's harder to actually 15 get it done. It isn't that the manufacturers don't want 16 to do it. We all want our children and our grandchildren 17 to grow up in a healthy environment. That is not 18 something that I -- I mean it's obvious, I think to, all 19 of us. 20 The perception that diesel is dirty is incorrect. 21 It was 11 grams not too long ago. It was 11 grams of NOx. 22 It is now down to four grams. It will be down to 2.5 in 23 October of next year. So to say that we aren't working on 24 this problem would be incorrect. We certainly are. 25 We have been told that in Europe, which certainly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 uses many more buses than the United States does, that 2 they have abandoned all other forms and are working on 3 simply clean diesel. But, again, I want to stress that 4 the manufacturers of engines are just as willing to 5 produce CNG engines as they are diesel engines. So to 6 think that they are the enemy is a misperception. 7 I think real obstacle to the CNG is, as Dr. Burke 8 mentioned, the money involved. And I know a lot of the 9 people that I have talked to have said that that money 10 could be going to buying cleaner buses rather than going 11 into the infrastructure. 12 Anyway, it's just a very interesting time to be 13 in this industry. I'm glad to be here. And I come from 14 an industry that I worked in ThermoKing Refrigeration for 15 16 years. I saw them go through a similar problem with 16 freon. I saw them resolve the problem. We now have 17 completely 100 percent ozone friendly freon. So I'm sure 18 that this problem will be resolved, too, but I would ask 19 you to be patient. 20 Thank you. 21 CHAIRPERSON LLOYD: Thank you. 22 I guess there's no other witnesses. So I'd like 23 to ask if there are any other questions or comments from 24 the present by the staff, Mr. Kenny? 25 EXECUTIVE OFFICER KENNY: No. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 CHAIRPERSON LLOYD: Questions from the Board? 2 BOARD MEMBER DeSAULNIER: Mr. Chairman? 3 CHAIRPERSON LLOYD: Yes, Supervisor. 4 BOARD MEMBER DeSAULNIER: Just a comment in terms 5 of, I guess, two comments. One is in terms of the bay 6 area transit operators that came here today is that there 7 one that's been able to, VTA, largely get all the 8 information they need in and they're in compliance. You 9 had the one question about will they be required to 10 reinstall the PM kits, I think was, if I'm getting his 11 question right, so if you could answer that, Mike. 12 But then how do we help the other agencies, I'm 13 not sure if I stated the question right. But he had a 14 question about reinstalling kits. 15 And then how do we help the other agencies, not 16 just in the bay area, but get these applications 17 completed? 18 And then just a comment in terms of the 19 three-month time frame that you mentioned Mike, or if it's 20 longer, in terms of getting conformity on the people who 21 chose the diesel path. And I hear my colleagues saying 22 this, it's not just the bay area, but specifically the bay 23 area, how important this is as a public health issue. And 24 my experience being on the Metropolitan Transportation 25 Commission in the Bay Area is that we've put more money PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 into transit, particularly into operations and management 2 discretionary funds. 3 And for myself if we don't get the public health 4 benefits voting in that agency when we go to the regional 5 transportation plan, I would be less inclined to vote to 6 do that. It's really important, I think when we look at 7 moving people out of single-occupancy vehicles or out of 8 that element of the fleet, the mobile fleet, that we're 9 moving them into transit, that transit compares at least 10 as favorably in terms of public health, whether it be NOx 11 or particulates, or any kind of emission. 12 So I think it's really important for the transit 13 operators in the long-term to be able to make the argument 14 that they compete well against the rest of the fleet to 15 get people out of their automobiles. So it's really -- 16 that's why I had difficulty in voting for the dual path, 17 because I think long-term if you're going to be held to 18 the same standards when you look at funding, whether it's 19 federal funding or state funding for transportation funds. 20 So it's important for us to send a very clear 21 message that we want to help, but they have to comply. 22 And if they fail to comply, then they have to go with 23 alternative fuels and then we have to get into a 24 discussion of how we help with the infrastructure. And 25 certainly in an urbanized area like the bay area, we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 should be able to do it, where the public health risks, 2 because of density and because of the number of buses 3 really has an impact on the agency, like Muni, where they 4 have a very old fleet, diesel fleet. We really need to 5 help them to be able to get the infrastructure and let 6 them have a message that they need to get serious about 7 this, that we need to make them comply and be willing to 8 help. 9 CHAIRPERSON LLOYD: Also, as we look ahead here, 10 clearly my colleagues said today loud and clear, and I 11 think that we're saying we're going to give a last chance 12 to those on the diesel path. And those who don't take it 13 more seriously we're going to have to really go back and 14 re-examine the wisdom of our flexibility choice. 15 So on the resolution, I would like to add a 16 couple of things and my colleagues may want to add some 17 other things as well. But I would like to say to staff 18 have it back to the Board by March of next year. That's 19 after the reports are in at the end of year. That they 20 report back to the Board on the status. 21 But in addition, I would like to suggest that we 22 have, and maybe staff and board representation to go to 23 the engine manufacturers and personally convey the 24 importance of this issue and personally observe what is 25 going on, and that also be as part of that report coming PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 back. 2 And I would hope, also, my colleagues would also 3 look at the transit districts in their particular areas 4 and again try to work with them, stress that this is 5 something we take very seriously. And for those who are 6 ignoring us on the diesel path here that we have the 7 option of going back an opening it up to follow the 8 leadership of Dr. Burke and all the challenges there with 9 maybe some -- for rural districts, but we have to be 10 serious about how to protect public health. 11 And this is not acceptable to date in the turn 12 out in -- I appreciate the response from diesel technology 13 forum. The idea that we, in fact, should be going to a 14 meeting in LA to catch up with the people from the 15 industry, I think is a dangerous one. Certainly I'm going 16 to accommodate that. I would like to include that. 17 Colleagues. 18 Ms. D'Adamo. 19 BOARD MEMBER D'ADAMO: Yes, Mr. Chairman. I 20 would agree that we need to send a delegation to meet with 21 representatives from the engine manufacturers or call them 22 out here. Let me know. I mean I am very concerned about 23 the next steps. We've got garbage trucks, sanitation 24 trucks, school buses. This is just going to send the 25 wrong message, if we allow this course to continue. So PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 I'd be happy to participate in any way possible, and also 2 maybe not for now, but at some later point, perhaps, if 3 staff would get in touch with individual board members to 4 see what we can do to be helpful, taking from the 5 discussion that Supervisor DeSaulnier mentioned. 6 CHAIRPERSON LLOYD: Maybe drive a natural gas bus 7 back for the visit. 8 BOARD MEMBER RIORDAN: Mr. Chairman, I think it 9 would be interesting to pursue with the smaller, more 10 rural districts the idea that Dr. Burke advanced a little 11 bit, which was are there some opportunities if they were 12 to join in an effort to actually put infrastructure in or 13 negotiate with someone to put the infrastructure in, then 14 the ability then to negotiate prices with the natural gas, 15 that there is something to be gained by joining forces as 16 opposed to going on their own, or it may not. 17 There may not be, but it might be interesting to 18 pursue it to see why there wouldn't be. And I think that 19 might help that rural area, that I'm very concerned about. 20 I mean, I understand the urban areas totally 21 agree with my colleagues on that. But I do represent and 22 do understand some of the those rural considerations and I 23 think we have to be sensitive to those. But if there is 24 an opportunity for them to join forces and to actually get 25 further along in what we're requiring, perhaps that's a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 worthwhile effort to look at. 2 EXECUTIVE OFFICER KENNY: All right. Well, the 3 early introduction of traps we would have to re install 4 them at a subsequent point in time. There is no reason 5 for them to reinstall them. What we're looking for 6 essentially is traps be put onto different engines and to 7 the extent that we have a deadline or for when that would 8 occur and they get there early, congratulations. I mean, 9 we would love that. 10 Secondly, with regard to what the staff will do, 11 the Board's message today is a very good one. And, 12 essentially, it will be very helpful. And we have 13 actually tried to coordinate and to contact all the 14 transit agencies, and in some cases transit agencies have 15 almost refused to accept our phone calls. 16 I mean, those are the exceptions, but it has 17 happened where we were simply not responded to. I think 18 Board's message today is one that we'll bring quite loudly 19 and quite clearly, and it will basically provide the 20 response that we really do want to see with regard to this 21 particular rule. And if, in fact, we don't see that 22 response, we'll be back to you quite quickly and we will 23 let you know that with recommendations to essentially 24 modify that rule. 25 CHAIRPERSON LLOYD: Mr. McKinnon, Dr. Burke, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 Supervisor Patrick. 2 BOARD MEMBER McKINNON: I guess my comment is 3 that at the -- after quite a bit of discussion with the 4 California Transit Association, on this Board I was the 5 advocate for going dual path. And I am really, really, 6 really disappointed with everybody involved except the oil 7 companies. The oil companies made low-sulfur diesel 8 available. And we haven't got into that, but they did 9 immediately respond and do their part. 10 I'm very, very disappointed. In March if we 11 don't have any progress, I'm no longer an advocate for 12 dual path. 13 Thanks. 14 CHAIRPERSON LLOYD: I echo your comment, Mr. 15 McKinnon about the oil companies, particularly seeing Mr. 16 Manning there. But I think that's a very valid point, and 17 the comment that was made earlier by VTA that they've 18 converted all their diesel to low-sulfur diesel by last 19 spring could not have been accomplished without obviously 20 the response of the industry, so I further agree with 21 that. 22 Dr. Burke. 23 BOARD MEMBER BURKE: I'll let Ms. Patrick go 24 ahead. 25 CHAIRPERSON LLOYD: Supervisor Patrick. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 BOARD MEMBER PATRICK: Oh, thank you very much. 2 I will be brief. I think that when we decided to go to 3 the dual path, it was to introduce flexibility, that we 4 wanted not to have this rule be a hardship on folks. And 5 so when some of you from the rural areas and some of them 6 have come up and said, gee, we're in a little bit 7 different situation here, those were -- I think that's why 8 this Board made the decision that it did, to have a dual 9 path, was so that when there were circumstances which 10 would be a hardship on an agency that, you know, that was 11 why this was put into place, and knowing that not all 12 transit agencies are the same. 13 I think that, you know, when we look at this 14 again, those will be the kinds of things -- the real 15 issues will be the kinds of issues that I look at, again, 16 in terms of allowing flexibility and then the ones that 17 are not really issues, but just not wanting to move 18 forward in a clean air path I think will be something 19 entirely different. 20 But I think it's important that we do acknowledge 21 that we have heard the concerns of people who, for whom 22 this may be a hardship and it may be an opportunity for us 23 to step up to the plate and work more closely with those 24 agencies, and perhaps others in the community where we can 25 really put together a good working partnership. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 But to me, that was why we introduced flexibility 2 into the process, rather than to have some folks just sort 3 of not be interested in moving forward. 4 CHAIRPERSON LLOYD: Thank you. 5 Dr. Burke. 6 BOARD MEMBER BURKE: I would like to echo the 7 comments of Mr. McKinnon and our Chairman as it relates to 8 the oil companies, because they absolutely did what they 9 said they were going to do. And they have been a bugaboo 10 and bad boys for so many years and everybody wanted to 11 take a look at them and put the squeeze on. But when we 12 did, they came to the plate, but the engine manufacturers 13 have not. 14 Supervisor Patrick, I think you're absolutely 15 right. I think most board members when they considered 16 this looked to the rural areas. And I thank you, again, 17 Mrs. Riordan, for the lesson. I'm telling my -- I'm 18 trying to get into the woman's caucus, so I'm being nice 19 to them today. 20 (Laughter.) 21 BOARD MEMBER DeSAULNIER: It's not working. 22 (Laughter.) 23 BOARD MEMBER BURKE: Yeah, it's not working. But 24 you know, I think that the leadership of the ARB, and I'm 25 not talking about the Board, but Mr. Kenny, your staff, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 your leadership, should, as Ms. Patrick has indicated, see 2 if there is not someway we can't cobble something together 3 here to help these small rural districts. And I, for one, 4 would be willing to go to the Legislature to help or do 5 whatever is necessary so that maybe we could put a 6 package, if they couldn't put together a package. 7 Mrs. Riordan suggested they put a package 8 together. And I think maybe it should be a bigger 9 package, you know, so that if you go 5, 10, 15, 20 years 10 out, you have the kind of a value, then you can really 11 drive the numbers lower. 12 But what I'm really concerned about is that we 13 come back in March, and we find that we're in the same 14 place we are this month, and we'll have lost all these 15 months. So I would -- I'm not going to make this as a 16 motion or anything, but I might ask the Chairman to 17 consider this. And I know it means some extra, 18 significant extra work for you. 19 But I think in order to encourage the engine 20 manufacturers to be more sensitive to the regulations of 21 this board, maybe we should prepare a regulation similar 22 to the level of 92 for presentation to the Board in March 23 of next year. 24 Now, we don't have to take it up, if the report 25 comes back and says they're doing great and everything is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 working out, and we have got a few problems left, and 2 we're working through them, then we can just, you know, do 3 away with it, but at least we don't loose this seven, 4 eight months in the interim. We have something in place 5 that it would give us the kind of action, I think, some of 6 the Board Members have indicated that they're indicated 7 that they're interesting in pursuing. 8 And two, I'd encourage the engine manufacturers, 9 knowing that this bullet is in the chamber, give the 10 engine manufactures the incentive to cooperate. 11 CHAIRPERSON LLOYD: Can we do that legally, Mr. 12 Kenny? 13 EXECUTIVE OFFICER KENNY: It's actually fairly 14 simple to modify the regulation to eliminate the dual 15 path. I mean, the difficulty really is more in terms of 16 timing. For us to essentially give you the option to 17 eliminate the dual path in March, we have to actually 18 notice that through the regulatory process at least 45 19 days in advance of the March board hearing, which would 20 mean we would have to actually put a regulatory proposal 21 on the streets, at least, that would propose that 22 elimination of the dual path in January, at some point in 23 time. 24 The concern there is that, you know, we may be 25 moving too fast to do that. I think it would be wise, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 essentially, for us to have that as the option that the 2 Board may want to consider, but for the Board in March to 3 hear all of the options and to then direct staff at that 4 point in time whether we should essentially move to a 5 regulatory modification, which we could bring back to you 6 probably relatively quickly or to essentially accept the 7 compliance that has been provided by the industry. 8 BOARD MEMBER BURKE: I'm not sure I understand. 9 If you could do it in 45 days after the March meeting, why 10 would having -- we could put it off from the March meeting 11 to the April meeting or May meeting if we so choose. 12 EXECUTIVE OFFICER KENNY: Dr. Burke, all I'm 13 suggesting is essentially what we would be doing is 14 anticipating, essentially, the Board's decision, if we put 15 the regulatory proposal out, because we will to have put a 16 proposal on the streets before the Board has actually 17 given us direction that we are proposing as a staff to 18 eliminate the dual path. 19 And then the Board would be in a position, when 20 that came before them in March or whatever month it came 21 before you to essentially say yes or no. But we would 22 have to actually put it out there as a staff proposal in 23 order to comply with the regulatory requirements. 24 CHAIRPERSON LLOYD: Yeah. I think I hear you, 25 Dr. Burke, but I feel in good faith, I agree with Mr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 Kenny that we'd really be signaling then the way of just 2 moving away from it. I think we're asking staff and the 3 Board to collect data and move very, very quickly on this 4 issue and be ready. But I think to decide to do that that 5 quickly would be tough. 6 And certainly I would like to give the industry a 7 chance to -- 8 BOARD MEMBER BURKE: If 50 percent of the state 9 is already doing it -- 10 CHAIRPERSON LLOYD: We understand. We spent, 11 what, four days on this transit rule. And it was -- we 12 went over all those issues. I don't want to get into 13 those now, Dr. Burke, but I would like to get due process 14 here, so we, in fact, evaluate where we are. Today, I 15 think we're sending a very loud signal to the industry and 16 the transit district. I'd like to give them a chance, in 17 a very short time. I agree with you, we have a very short 18 time here to come back. 19 Mr. Calhoun. 20 BOARD MEMBER CALHOUN: I thought one of the 21 reasons for the Board adopting the dual path was to 22 encourage the development of the diesel technology in 23 addition to what Ms. Patrick said earlier. And I, too, am 24 concerned that it may be somewhat premature, at this 25 point, to say we're going to go ahead and commit to a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 single path if we do that in March. I think maybe it 2 would be worthwhile to let them know that that's going to 3 be a serious consideration. 4 CHAIRPERSON LLOYD: I think that's what we're 5 trying to do. I feel that we'll be amending the 6 resolution if that happens. 7 Any other questions? 8 If there's no further discussion, then we've got 9 the resolution as amended by the comments that we have 10 here. And if we could call for a motion. 11 BOARD MEMBER D'ADAMO: Move approval. 12 CHAIRPERSON LLOYD: All in favor say aye? 13 (Ayes.) 14 CHAIRPERSON LLOYD: It's unanimous. 15 Thank you very much. 16 Now, we're going to take a ten-minute break for 17 the court reporter. This went on much longer than we 18 thought. We will not break for lunch, by the way. For 19 those people who are staying here, if you want to grab a 20 bite to eat downstairs and come back, we'll have a 21 ten-minute break and then we will resume with the research 22 proposals and the energy report. 23 (Thereupon a brief recess was taken.) 24 CHAIRPERSON LLOYD: I'd like to continue with our 25 agenda today. What I'd like to do is to combine two here, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 Agenda Item 01-7-3, and that is the presentation for 2 approval of six research proposals, and then we will have 3 the staff presentation there. And then the other one is 4 Agenda Item 01-7-5, appointments to the Research Screening 5 Committee. 6 So, maybe, first of all, we'll take the research 7 proposals and then go straight into also the new members 8 of the Research Screening Committee. 9 Mr. Kenny, if you'd like to begin the staff 10 presentation. 11 EXECUTIVE OFFICER KENNY: I'm going to be sliding 12 it down to the right. 13 (Thereupon an overhead presentation was 14 presented as follows.) 15 AIR POLLUTION SPECIALIST MORA: Good afternoon, 16 Chairman Lloyd and Members of the Board. Today, we are 17 presenting to you six research proposals for a total of 18 approximately $1.4 million. The concept of these 19 proposals is part of the plan that was approved by the 20 Board in July. 21 These proposals have been reviewed and approved 22 by ARB staff and the Research Screening Committee. These 23 proposals cover a broad range of air pollution 24 disciplines. Each proposal supports the Board's research 25 mission to provide timely and scientific technical PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 information to develop and support the public policy 2 decision required for an effective air pollution control 3 program. 4 --o0o-- 5 AIR POLLUTION SPECIALIST MORA: The first project 6 is entitled Impact of NOx Surface Reaction on the 7 Formation of Particles, Ozone and the Development of 8 Control Strategy Options. It will be conducted by the 9 University of California, Irvine. 10 In this project the investigator will quantify 11 the mechanisms and kinetics of heterogeneous NOx reactions 12 and incorporate descriptions of them in the airshed 13 models. 14 --o0o-- 15 AIR POLLUTION SPECIALIST MORA: This photo is of 16 an Attenuated Total Reflectance Cell. This apparatus 17 allows simultaneous measurements of species in the gas and 18 surface fill of the reaction cell, as a function of time. 19 Understanding the kinetics and mechanisms of atmospheric 20 reaction is of fundamental importance for the ability to 21 collect the model information of ozone and particles. 22 Applications of these models are used to assess 23 various strategies for air pollution control. 24 --o0o-- 25 AIR POLLUTION SPECIALIST MORA: The second PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 project, Development and Evaluation of a Gas Phase 2 Atmospheric Reaction Mechanisms for LOW- NOx Conditions 3 will be conducted by the University of California 4 Riverside. 5 The primary objective of this study is to 6 evaluate and improve the performance of the current 7 version of the SAPRC-99 chemical mechanism for simulating 8 chemical transformations under low and very low NOx 9 conditions. 10 --o0o-- 11 AIR POLLUTION SPECIALIST MORA: Based on the 12 results of the initial evaluation, selected chamber 13 experiments will be carried out using the new next 14 generation environmental chamber being constructed at UCR 15 with U.S. EPA support for low NOx evaluation. 16 The mechanism will be modified as appropriate 17 based on the results of the chamber evaluation. This work 18 is important because low NOx conditions are more 19 representative of actual ambient conditions. 20 CHAIRPERSON LLOYD: Is the chamber up and running 21 now? 22 RESEARCH DIVISION CHIEF CROES: We don't think 23 so. We believe it's still being tested, but it has been 24 constructed obviously. 25 CHAIRPERSON LLOYD: Yes, it looks good. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 thought Dunn Edwards put some money into that as well? 2 RESEARCH DIVISION CHIEF CROES: No. They paid 3 for the lobbyists. They got this put into U.S. EPA's 4 budget. 5 (Laughter.) 6 BOARD MEMBER DeSAULNIER: That's the most 7 important part. 8 (Laughter.) 9 CHAIRPERSON LLOYD: Always trust the research 10 group to be honest. 11 (Laughter.) 12 AIR POLLUTION SPECIALIST MORA: The outcome of 13 this effort will improve our understanding of atmospheric 14 chemistry in rural and remote areas, allow more accurate 15 air quality simulation when modeling low NOx conditions, 16 and lead to more scientifically sound control plans and 17 strategies. 18 --o0o-- 19 AIR POLLUTION SPECIALIST MORA: The third 20 project, Source Apportionment of Fine and Ultrafine 21 Particles in California will be conducted by the 22 University of California, Davis. The objective of this 23 project is to perform a source apportionment of airborne 24 fine and ultrafine particulate matter in California. 25 Particle samples collected during several major PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 ambient field monitoring and source sampling studies, such 2 as SCO-97 in the south coast air basin, and pre-pax in the 3 central valley will be analyzed and a new ultrafine 4 particle source library will be developed. 5 Apportionment of the particulate matter collected 6 from these studies would effectively reveal the 7 contribution that different sources make to fine and 8 ultrafine particle concentrations. 9 --o0o-- 10 AIR POLLUTION SPECIALIST MORA: This is the first 11 time source apportionment will be conducted for ultrafine 12 particles. This slide shows the size differential of PM 13 10 versus an ultrafine particle. As a point of reference, 14 the bottom line of this slide is a human hair of a hundred 15 microns. 16 As you can see, ultrafines are extremely small 17 particles. Because fine particles have been implicated in 18 serious health effects, a better understanding of source 19 contributions to find particle concentrations will enable 20 decision makers to formulate effective control strategies 21 to protect public health. 22 The fourth project, Correlation Between Solids 23 Content and Hiding as it Relates to Calculation of VOC 24 Content in Architectural Coatings will be conducted by the 25 California Polytechnic State University in San Luis PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 Obispo. 2 This project will investigate the relationship 3 between hiding the underlying substrate and the type and 4 amount of solids used in selective classes of waterborne 5 architectural coatings. 6 Paint can labels must state their VOC content 7 which facilitates both enforcement of rules and consumer 8 comparison of the VOC content of different brands. Since 9 the 1970s, local air district rules as well as U.S. EPA 10 rules and the ARB suggested control measure for 11 architectural coatings have required computing the VOC 12 content of coatings on a less water an exempt compound 13 basis. 14 However, for coatings with a high percentage of 15 water, the VOC content calculated in this way can be much 16 higher than actual VOC in the can. Manufacturers indicate 17 that this VOC calculation approach penalizes them from 18 formulating coatings with water. At the Board hearing 19 approving the updated architectural coatings SCM in June 20 2000, the Board directed staff to report back on the 21 feasibility of modifying the calculation of VOC content to 22 address industry comments. 23 This project is an important part of that effort. 24 The results of this project are expected to provide 25 benefits to manufacturers of waterborne coatings and to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 consumers who will better be able to compare labeled VOC 2 contents on paint cans. 3 --o0o-- 4 The fifth project entitled Vehicle-to-Grid 5 Demonstration Project, is a regulation for electric 6 vehicles conducted by AC Propulsion. The objective of 7 this project is to integrate all of the essential elements 8 needed to demonstrate the operation of a battery electric 9 vehicle performing grid regulation while parked and to 10 demonstrate the dependability in actual operation. 11 --o0o-- 12 AIR POLLUTION SPECIALIST MORA: The California 13 ISO has spent no more than $2 million a day on regulation 14 services. This project will be equipped with a battery 15 ZEV with bidirectional charging equipment allowing it to 16 flow into the battery pack to charge it and out of the 17 battery pack to the grid where power regulation is needed. 18 In addition, the car will be equipped with 19 wireless communication equipment, appropriate software and 20 control equipment to allow the grid regulator to control 21 the power flow to and from the vehicle in RealTime. 22 This vehicle will then be tested for a minimum of 23 120 hours of grid connection time to demonstrate the 24 effectiveness of the configuration and technique for grid 25 regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 --o0o-- 2 AIR POLLUTION SPECIALIST MORA: The primary 3 intent is to provide a means for reducing the cost of 4 ownership of such vehicles, thus enhancing the cost 5 effectiveness of the ZEV related emission reductions. 6 --o0o-- 7 AIR POLLUTION SPECIALIST MORA: The sixth project 8 entitled Determination of the Contributions of Light-duty 9 and Heavy-duty Vehicle Emissions to Ambient Particles in 10 California was approved by the Board in April 2001. At 11 that time, we presented this proposal from the University 12 of California, Riverside. 13 Since then the principle investigator has changed 14 Campuses and now resides with the University of 15 California, San Diego. The original objective of this 16 project was to demonstrate source specific protection of 17 ambient particles emitted by motor vehicles will remain 18 the same. This project will obtain the signature from the 19 control conditional using a dynamometer as well as real 20 world conditions such as a tunnel and the freeway. 21 This study builds on the aerosol instrumentation 22 and expertise, developed at UC Riverside with Board 23 support. 24 --o0o-- 25 AIR POLLUTION SPECIALIST MORA: These photos PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 depict the transportable state of the instrument in use at 2 the Caldicot Tunnel and at Long Beach. This next slide 3 shows a device investigating emissions from a diesel truck 4 in El Monte for a dynamometer vehicle emissions study. 5 The original dollar amount remains the same, and we're 6 requested by the Board to approve these changes to such 7 contractors. 8 These projects are needed to meet specific 9 information needs and requirements of our programs. 10 Therefore we're requesting these projects be approved so 11 they can work on them. 12 This concludes the presentation. 13 CHAIRPERSON LLOYD: Thank you very much. I did, 14 my colleagues, get an Email from Dr. Friedman who reviewed 15 all the proposals and discussed them and strongly supports 16 all of them. 17 Any questions? 18 BOARD MEMBER McKINNON: Mr. Chairman, I was going 19 to move Resolution 132 through 137. 20 BOARD MEMBER CALHOUN: Second. 21 CHAIRPERSON LLOYD: All in favor say aye? 22 (Ayes.) 23 CHAIRPERSON LLOYD: Thank you very much. 24 We'll take up the next item, which also affects 25 the Research Division, and this is the appointments to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 Research Screening Committee. The state law authorizes 2 the Air Resources Board to appoint a Research Screening 3 Committee member to advise the ARB on its extramural 4 research activities. 5 The Committee has nine members and one ex officio 6 advisor each representing a scientific or technical 7 discipline that is relevant to review and advise on an air 8 quality research program. 9 We have been privileged over the years to have a 10 host of eminent scientists serve on this committee. As 11 you know, in the firsthand, the workload is significant 12 and the compensation is minimal. Their input has been 13 invaluable to the Board over the years. 14 At our last meeting, we acknowledged the services 15 of departing members Dr. Kent Hoekman and Mr. Mel Zeldin. 16 Nominations for their replacements are before us today. 17 Dr. Steven Japar and Dr. Chung Liu have been 18 identified as two excellent and well-qualified candidates 19 and put forward for the Board's consideration as members 20 of the Research Screening Committee. 21 And, again, I know both of these individuals. I 22 can certainly support, strongly support, their 23 nominations. 24 Mr. Kenny, I'd like for you or your staff to 25 provide the nominee's additional affiliations and areas of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 expertise. 2 RESEARCH DIVISION CHIEF CROES: Dr. Steven Japar 3 is a supervisor of the Environmental Impacts Group in the 4 Research Laboratory at Ford Motor Company. His areas of 5 expertise are in atmospheric chemistry and motor vehicle 6 emissions testing. Dr. Japar is the author of over 80 7 peer review publications, the associate editor of a 8 prestigious scientific journal and a peer review for the 9 last two climate changes estimates by the United Nations. 10 He also provides a strong link to the 11 Coordinating Research Council which is the research arm of 12 the automotive and petroleum industry. 13 The second nominee, Dr. Chung Liu, is the Deputy 14 Executive Officer and Chief Scientist at the South Coast 15 Air Quality Management District. His areas of expertise 16 are in air quality modeling, technology advancement and 17 air quality planning. Dr. Liu has over 75 publications to 18 his credit and has a very broad background in almost all 19 aspects of air pollution. 20 We're obviously very pleased that two such highly 21 qualified candidates are willing to serve on the Research 22 Screening Committee and we recommend that you approve 23 their appointments. 24 BOARD MEMBER PATRICK: Motion. 25 BOARD MEMBER RIORDAN: I'll second it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 CHAIRPERSON LLOYD: All in favor say aye? 2 (Ayes.) 3 CHAIRPERSON LLOYD: Thank you very much. Thank 4 you. 5 Our last item today is a presentation on the 6 electrical energy situation. It's Agenda Item 01-7-4, an 7 informational update on the California energy situation. 8 Before last week's tragedies in New York and 9 Washington D.C., the electrical generation crisis was the 10 most serious technical, financial and public policy issue 11 facing the State. The energy crisis consumed vast amounts 12 of this agency's critical energies and time as we helped 13 Governor Davis and all our sister agencies work through 14 these pressing issues. 15 Also, we've spent a lot of time reassuring 16 ourselves, the general public and the media that air 17 quality could and would be protected as California brought 18 additional power generating facilities on line. 19 The energy crisis is largely, though not 20 completely, behind us. There are a few unfinished 21 powerplant retrofit projects that will be proceeding this 22 fall. The State Legislature has also directed us to 23 undertake two new rulemakings related to power generation, 24 first for distributed generation sources that may enter 25 the California market, which we will be considering later PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 this year, and I think it's in November, and second for 2 existing older, dirtier power generation units that still 3 need to be cleaned up. That rulemaking is due by the 4 middle of 2002. 5 Staff will summarize recent efforts undertaken by 6 State agencies and the local air districts to maintain and 7 expand power generation and also maintain air quality 8 goals in the state. 9 I'd like to turn it over to Mr. Kenny for the 10 beginning of the staff presentation. 11 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman 12 and members of the Board. As you know, the competitive 13 open market system envisioned by the 1996 legislation that 14 deregulated the California electrical utility industry, 15 has not yet materialized. 16 During the latter part of 2000 and early 2001, we 17 saw electricity prices rise many times higher than in 18 1999. Earlier this year, we were also faced with rolling 19 blackouts and the prospect of many hours of blackouts this 20 summer. In response to this electricity emergency, 21 Governor Davis issued a series of Executive Orders in 22 February that embark the State on a plan to increase 23 generating capacity. 24 This effort included boosting output at existing 25 facilities, accelerating powerplant construction and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 streamlining the review process for new facilities. In 2 particular, the Governor's Executive Orders affected the 3 actions of the Air Resources Board, and the local air 4 districts, as air quality regulations were sometimes 5 perceived as a hindrance to maximize generating capacity. 6 Ever since the crisis began, staff has worked 7 diligently with the local air districts, the California 8 Energy Commission and other parties to increase power 9 supply, implement the Governor's directives and maintain 10 the environment. 11 The update we will present today will outline the 12 cooperative efforts made to date and continue endeavors to 13 increase the reliability of California's electrical 14 system. We will also provide a perspective on the 15 estimated air quality impact from the Governor's Executive 16 Orders and the energy situation as a whole. 17 As you will see, staff's preliminary estimates 18 predict some short-term impacts within a long-term 19 reduction in emissions as new clean power generation 20 replaces older higher polluting powerplants. 21 And with that, I'd look to ask Mr. Mike Tollstrup 22 to make the presentation. 23 (Thereupon an overhead presentation was 24 presented as follows.) 25 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Good PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 afternoon, Mr. Chairman and members of the Board. For 2 this agenda item, staff will present an update on the 3 California electrical situation. 4 --o0o-- 5 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: The 6 topics staff will cover today include a brief background 7 on the deregulated California power market and what was 8 expected for summer 2001; the Governor's response to the 9 energy crisis through his Executive Orders; a response 10 from air agencies to implement The Governor's Executive 11 Orders to maintain and increase power generation; what 12 actually happened during this summer; staff's preliminary 13 estimates of the air quality impacts; and California's 14 next steps regarding energy and the role played by the Air 15 Resources Board. 16 --o0o-- 17 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 18 California began to experience significant price 19 fluctuations for electricity during the middle of last 20 year. The average electricity prices from June to 21 September of 2000 were approximately five times higher 22 than in 1999. For the first four months of 2001, the 23 average prices were about eight times higher than the 24 previous winter. 25 There were a number of factors that contributed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 to creating a seller's market subject to extreme price 2 increases. Qualifying facilities were down, because they 3 were not being paid by the utilities. Other powerplants 4 were down for maintenance, installation of air pollution 5 control and other reasons. In addition, drought 6 conditions in the pacific northwest limited the 7 availability of electricity inputs. 8 During this time period of price fluctuations, a 9 number of powerplants underwent scheduled shutdowns for 10 routine maintenance, and the installation of air pollution 11 control equipment. District rules requiring these 12 controls have been in place for many years. The 13 facilities subject to these rules have had long lead times 14 to plan, design and execute pollution control retrofits. 15 The staff believes that these planned outages to comply 16 with air rules had only a minor impact on the crisis 17 situation. 18 Still, along with the high prices, California 19 often found itself short of power and faced many days from 20 the loss of one or two additional key facilities that 21 resulted in rolling blackouts. Given the difficulty in 22 meeting relatively low levels of wind demand, there were 23 great fears that the State would face even more extreme 24 supply shortages this summer. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 2 During the transition from summer to winter, electricity 3 supplies generally increased because consumption in the 4 end drops off with the change in weather. However, during 5 the winter of 2000, we saw the opposite happen. The 6 California Independent System Operator, or ISO, declared 7 system emergencies on 74 days during the winter months 8 from December 2000 to March 2001. 9 More alerts were called in the month of December 10 alone than all of 1998 and 1999 combined. There were also 11 29 days of power curtailments during this period and seven 12 days of unplanned outages or blackouts. 13 --o0o-- 14 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: When 15 California found itself short of the electricity early in 16 the year when demand was low, it was anticipated that hot 17 summer temperatures and a high demand would only 18 exacerbate the problem and lead to frequent rolling 19 blackouts. 20 The California Energy Commission forecasted a 21 61,000 megawatt peak demand for the Summer 2001, assuming 22 a forecasted demand growth and an extreme heat wave. 23 After including import and expected outages, the State was 24 left with a potential shortfall of as much as 5,000 25 megawatts. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 The threat of rolling blackouts was a real 2 concern. Given the high blackout probability, staff 3 expected to see an increase in air pollution emissions 4 from expanded use of diesel backup generators and the need 5 to operate many of the older powerplants at maximum 6 capacity. 7 In particular, staff expected to see a high air 8 quality impact from peaking powerplants, which 9 historically run low operating ours, and therefore were 10 not equipped for the most stringent emission controls. 11 Later in this presentation, staff will describe 12 what actually happened during the summer 2001 in terms of 13 power outages and the air quality impacts. 14 --o0o-- 15 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: On 16 January 17th, 2001, Governor Davis declared an emergency, 17 an energy emergency, in the State in response to the high 18 number of power alerts, instances of rolling blackouts, 19 and the potential for power shortages during the summer. 20 Several Executive Orders followed in February, 21 March and June to augment existing generation and expedite 22 permitting of new peaking powerplants to cover summer 23 needs until more new central station powerplants came on 24 line. 25 The Executive Orders also included mitigation for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 increased operation in order to maintain State and federal 2 ambient air quality standards. In short, one of the 3 primary goals of the Executive Orders was to ensure the 4 State's ability to increase generation while maintaining 5 the California's commitment to the environment. 6 --o0o-- 7 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: I 8 will now summarize the primary air quality related actions 9 authorized by the Governor's Executive orders. Power 10 shortages early this year required greater operation of 11 peaking powerplants, which are permitted to run just 12 several hundred hours per year. 13 Under normal conditions, these peaking plants are 14 only operated to meet high energy demands that occur 15 during the summer months. 16 Because the peaking plants had such high usage 17 rates so early in the year, it was figured that they would 18 be out of hours by May or June. The Executive Orders 19 authorized districts to temporarily modify permit rules 20 that restrict operating hours to ensure reliability to the 21 power grid. 22 The districts were to charge mitigation fees for 23 the excessive emissions and apply those funds to district 24 emission reduction programs. 25 Because of the urgent need for more power in a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 short timeframe, the Executive Orders also created an 2 expedited 21-day permitting process for powerplants with 3 little or no environmental caps that could be operational 4 by September 30th of this year. 5 A four-month expedited process originally created 6 by Assembly Bill 970 was also extended to projects that 7 could on line by August 31st of 2002. 8 Availability of offsets for powerplants was also 9 a growing issue. To help get powerplants on line this 10 summer, the Governor directed the ARB to establish a State 11 Emission Reduction Credit Bank funded by Moyer program 12 emission reductions. The proceeds from the offsets were 13 to be directed to district emission reduction programs 14 that benefit areas near the new emission sources. 15 --o0o-- 16 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Prior 17 to the power crisis, the ARB staff and the districts were 18 coordinating closely with the CEC and U.S. EPA on power 19 plant siting issues. The Executive Orders formalized 20 these efforts and gave energy projects high priority in 21 direct response to the Executive Orders, the districts' 22 expedited processing of powerplant permit applications to 23 help meet the CEC 21-day and four-month permit deadlines. 24 Stringent air quality conditions, such as best 25 available control technology and full mitigation were PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 still required for these facilities. However, ARB staff 2 and the districts were able to provide some flexibility to 3 projects that could not secure pollution control equipment 4 in time to be operational for this summer. 5 On a case-by-case basis, districts placed these 6 sources under abatement order until control equipment 7 could be secured and installed. And any conflicts with 8 federal requirements were handled by the U.S. EPA with 9 administrative orders. To ensure a supply of offsets for 10 summer powerplant projects, ARB staff created the State 11 offset bank from recent NOx and PM 10 emission reductions 12 created by the Moyer program. 13 Credits obtained from the State bank are valid 14 for three years, at which time the source using these 15 credits will be required to obtain permanent reductions or 16 shout down. During this entire effort, ARB staff worked 17 in close coordination with districts, the U.S. EPA, the 18 ISO and the CEC to resolve issues, keep existing 19 generation on line and permit new powerplants. 20 --o0o-- 21 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: As 22 staff mentioned previously, the energy predictions for 23 2001 were for any rolling blackouts due to insufficient 24 power supplies, high uses of diesel backup generators due 25 to blackouts and the need for all powerplants to run at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 maximum capacity. 2 Fortunately, in contrary to the energy shortage 3 predictions, California took sufficient actions to avoid 4 rolling blackouts. In addition, power alerts declared by 5 the ISO have been limited compared to the same period last 6 year. Plan availability has increased and there has been 7 an adequate supply of electricity. 8 The lack of rolling blackouts means that there 9 was no need to run diesel backup generators. And lastly, 10 additional megawatts supplied by clean new powerplants 11 helped reduce dependence on some of the older, higher 12 emitting facilities. 13 --o0o-- 14 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: So 15 what helped California make it through the summer with no 16 rolling blackouts. Staff believes four main factors 17 contributed to the positive summer power outcome. 18 First, the market stabilization was achieved 19 through long-term State power contracts and price caps on 20 spot market electricity sales set by the Federal Energy 21 Regulatory Commission. Second, statewide energy 22 conservation by businesses and consumers. Third, 23 additional generating capacity for new powerplants. And 24 last, a relatively mild average summer season with no 25 extreme heat waves. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 --o0o-- 2 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 3 Stabilization of the electricity situation depended on 4 securing base load power at a set price and managing price 5 volatility associated with last minute power purchased on 6 the spot market. Three elements helped stabilize the 7 market. 8 First, getting the qualifying facilities or QFs 9 back on line helped boost supply. In April 2001, it was 10 estimated that there were almost 2,000 megawatts of QFs 11 off-line. QFs are independent energy producers that have 12 purchase agreements with the utilities to supply power to 13 the utility service area. 14 When it became apparent that the bankrupt utility 15 companies could not be able to honor contract payments, 16 the QF shutdown. Action by the State to ensure QFs were 17 paid were key in bringing the QFs back on line to increase 18 supply. 19 Second, the long-term power contracts secured 20 power well in advance of when it was needed. As of June 21 1st, staff estimates that DWR, Department of Water 22 Resources, signed 28 contracts for an average annual 23 capacity of nearly 7,000 megawatts from 2001 to 2010. 24 Another 3,200 megawatts are agreements in 25 process. And these contracts help to stabilize the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 market. 2 Third, the FERC, after months of intense pressure 3 from the Governor and the California delegation, finally 4 issued an order on June 18th that adopted a price 5 mitigation plan for electricity purchased by the ISO on 6 the spot market during Stage 1, 2 and 3 emergencies. 7 The plan effectively establishes price caps 8 during periods when the demand is the highest, and removed 9 most of the price advantage an operator could gain by 10 keeping units off line. This FERC order also helped to 11 stabilize the market. 12 --o0o-- 13 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: This 14 graph illustrates the statewide average daily forced or 15 scheduled megawatts that were off-line during 2000 and 16 2001 as reported by the ISO. And as you can see a marked 17 decline in outages began around the third quarter of 2001 18 compared to earlier in the year. Staff's next series of 19 slides will explain this downward trend and the factors 20 that helped keep the State out of a crisis situation. 21 --o0o-- 22 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 23 Business and consumer energy conservation has played a 24 significant role in preventing power outages this summer. 25 Information from the Energy Commission indicates that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 there has been an average eight percent decrease in 2 monthly energy demand from 2000 to 2001. Monthly peak 3 energy demand has decreased by almost ten percent from 4 last year. These conservation numbers have been adjusted 5 for weather and population growth. 6 --o0o-- 7 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 8 Expedited permitting of new power generation by federal, 9 State and local regulatory agencies has played a 10 significant role in ensuring that power supply outweighs 11 demand. The CEC, ARB districts and U.S. EPA have given 12 high priority to powerplant project applications and have 13 been working jointly to resolve issues and move 14 applications through the process. 15 The local air districts have approved 36 16 powerplant projects this year totaling just over 3,000 17 megawatts. Ten of those projects utilize the CECs 21-day 18 expedited process authorized by the Governor's Executive 19 Orders. Eleven powerplants totaling almost 1,800 20 megawatts were brought on line so far this year. 21 Two are large base load facilities representing a 22 little over 1,000 megawatts. Another large 320 megawatt 23 peaking plant will eventually be converted to base load 24 operation as well in 2003. 25 And an additional 21 plants are now in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 construction phase. At least seven of those projects 2 representing more than 800 megawatts Are currently 3 schedule to be on line by the end of this year. 4 --o0o-- 5 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 6 Statewide summer weather conditions were another factor 7 that helped California avoid blackouts. There were no 8 extreme weather events. And June to August average 9 temperatures remained constant from 2000 to 2001. More 10 significantly, there was no extended heat wave across the 11 State. 12 The net result of these factors is that there 13 were no rolling blackouts, a very limited number of days 14 with declared power emergencies, lower electricity prices 15 on the spot market and protection of air quality. 16 --o0o-- 17 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 18 Staff's preliminary estimates of NOx emissions from June 19 to August indicate an average reduction of about 24 20 percent from the same time last year based on the average 21 summer NOx emissions of 111 tons per day in 2000 and 22 approximately 84 tons per day in 2001. 23 Staff estimated NOx emissions using actually 24 emissions data from the U.S. EPA acid rain sources, ARB 25 inventory data and megawatt hours generated in the State. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 The acid rain and ARB inventory do not capture 2 all generating units. So as additional data is reported, 3 the average NOx reductions may change. However, staff 4 does not believe that the reduction amount will change 5 significantly and still expects a very substantial overall 6 average decrease in NOx from last year. 7 --o0o-- 8 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: There 9 are several reasons for the NOx emission decrease from 10 last summer to this summer. First, nearly 5,000 megawatts 11 of pollution control retrofits were completed on 17 12 powerplants by August of 2001. 13 Pollution control equipment installed on these 14 plants typically achieves NOx reductions from 80 to 90 15 percent. 16 Second, energy conservation efforts reduced 17 overall demand by eight percent and peak demand by almost 18 ten percent from last year. 19 Third, 11 new powerplants with state-of-art 20 emission controls were put into service from June to 21 September to 2001. These plants likely displaced the need 22 to rely on higher polluting and less efficient peaking 23 turbines which were heavy relied upon late last year and 24 early this year. 25 And last ARB's policy to restrict the use of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 diesel backup generators outside of an actual blackout, 2 and similar district policies for blackout generators have 3 helped to abate both criteria in toxic air contaminants. 4 Fortunately, Diesel engines were not needed to 5 address blackouts and were not routinely used to produce 6 power. 7 --o0o-- 8 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 9 California's goal is to add 15,000 megawatts of generating 10 capacity by 2004. The new California Power Authority has 11 expressed its desire to establish additional generation 12 and ensure the State has adequate reserve capacity. It's 13 mission is to meet the State's need for sufficient 14 electricity reserve through conservation, new generation 15 and greater use of renewable energy. 16 To ensure a reliable power supply the Power 17 Authority's goal is to have a minimum of 15 percent 18 operating reserve in place. Much of California's existing 19 power supply is inefficient and dirty compared with new 20 combined cycle powerplants. 21 The power authority also has plans to help 22 finance cleaner generation through deployment of modern 23 gas fired units, renewable energy and conservation 24 programs. In addition to air quality benefits, the 25 renewable and conservation elements promote resource PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 diversity and steer the State away from too much reliance 2 on natural gas. 3 Therefore, in order to meet the 15,000 megawatt 4 goal and the targeted 15 percent reserve margin, staff 5 anticipates that we will continue on our current track to 6 expedite the permitting of more new clean powerplants. 7 --o0o-- 8 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Since 9 April 1999, the CEC has licensed 26 powerplants totaling 10 about 11,000 megawatts. Nineteen of those projects have 11 yet to come on line. Around 10,000 megawatts of projects 12 are currently in review with the CEC and the districts. 13 CEC figures show that many more powerplant 14 projects are in development. Twenty-eight projects have 15 been formerly announced or are expected to file 16 applications this year. 17 Additional plant projects are expected to be 18 evaluated by the power authority to assess local, regional 19 and system electricity needs. 20 --o0o-- 21 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Were 22 nearly 60 potential powerplant projects still to be filed 23 with the CEC and a number of power related legislative 24 items, staff expects to continue to be heavily involved in 25 energy issues over the next two to three years. Staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 will continue coordinating with the local districts, the 2 CEC, the ISO and the U.S. EPA to resolve air quality 3 permitting issues through regularly scheduled meetings and 4 conference calls. 5 Staff will also continue tracking the status of 6 powerplant projects as they are reviewed through the CEC 7 and district processes and provide guidance and technical 8 assistance as needed. 9 Staff is set to go before the Board this November 10 for the approval of the distributed generation regulations 11 and guidance required by Senate Bill 1298. The focus is 12 on electrical generation near the place of use. ARB is 13 required to adopt uniform emission standards in a 14 certification program for units exempt from district 15 permit. 16 For units subject to permit, staff is developing 17 a permitting guidance. In accordance with Senate Bill 28 18 X, staff is currently working on a regulation to retrofit 19 existing generating units that feed into the State's power 20 grid. 21 Staff is developing emission standards and a 22 retrofit schedule with a portion of the emission 23 reductions go to a State offset bank for new clean 24 powerplants. 25 The regulation is tentatively scheduled to go the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 Board for approval in April of 2002. In conjunction with 2 the regulation is staff is also updating its 1999 3 powerplant siting guidance to evaluate potential 4 technology advancements and look at lower backed emission 5 levels. 6 This concludes staff's presentation. We'll be 7 happy to answer any questions the Board may have. 8 Thank you. 9 CHAIRPERSON LLOYD: Thank you very much, Mike. 10 An excellent presentation overview. We appreciate the 11 staff's work there. Comments, questions from the Board? 12 Dr. Burke. 13 BOARD MEMBER BURKE: I assume, and I'm a positive 14 person on this, I'm not a negative person on this. But 15 our board has a couple questions that they wanted me to 16 ask and I'm going to ask these in the most positive manner 17 I can ask them. 18 I assume that this energy report relates to the 19 money that we turned back to the State for the generator 20 replaced, alternative generators, Mr. Kenny. 21 EXECUTIVE OFFICER KENNY: Generally, The answer 22 would be no, with the exception being that the report did 23 highlight the fact that diesel backup generators are 24 generally not used for power generation. The budget did 25 provide the State -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 BOARD MEMBER BURKE: It's okay. I'm fine. I'm 2 trying to get through this as painlessly as possible. So 3 what we are saying then is basically that the energy 4 crisis is over. 5 EXECUTIVE OFFICER KENNY: No. We're not saying 6 that. What we're saying basically is that as we look at 7 it with a snapshot and the perspective of mid-September of 8 2001, that what we had anticipated to have occurred in the 9 summer of 2001 did actually not occur, and there were a 10 number of things that worked very well, but we also got 11 lucky on some level and we don't know what's going to 12 happen next year. 13 BOARD MEMBER BURKE: Right. I agree with that. 14 Okay. Then let me just read -- no, if it doesn't 15 have anything to do with that then I'm through. 16 CHAIRPERSON LLOYD: Can I just -- maybe I can 17 help Dr. Burke here, because I had a question of staff. 18 And that is given the fact that we had Stage 2 and Stage 3 19 in the winter last year, why are we not going to get the 20 same phenomenon this year? 21 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We had so 22 many power alerts last winter, because those bars that 23 showed 10,000 to 15,000 megawatts off line were that high. 24 The conditions that brought that about were one high 25 natural gas prices and the bankruptcy of the utilities, so PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 that they were no longer paying the qualifying facilities. 2 So they went off line because they couldn't make money. 3 The second factor that did that was many believed 4 that it was advantageous for the independent power 5 producers, those that bought the large utility units to 6 extend maintenance and hold their units off line, because 7 when power went short, prices went up. 8 I think price caps and the experience from last 9 year should carry over in through this year. There is 10 some worry that units will have to come down for routine 11 maintenance and there will be some lack of availability, 12 but hopefully there is. We traditionally have never had a 13 problem before in the winter time coming close to 14 capacity. 15 And with the market protections that are at least 16 in place through next summer, we hopefully will make it 17 that far. There is worry again about next summer and what 18 if conservation goes back down and we get a hotter summer, 19 we still have to continue to provide new capacity to meet 20 that potential demand. 21 CHAIRPERSON LLOYD: And for this winter, we got 22 the additional capacity that's already on line and more 23 coming on line as you were saying, Mike. 24 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: 25 That's correct. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 CHAIRPERSON LLOYD: Ms. D'Adamo. 2 BOARD MEMBER D'ADAMO: With regard to the 3 maintenance is there a schedule so that the maintenance 4 can be staggered amongst the various facilities. 5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: The ISO now 6 has greater authority and is basically in charge of that 7 to make sure that the make is laid out on the schedule and 8 has the ability to call the plants. And under, I think 9 both State law and some of the federal FERC requirement 10 has greater ability this year than last year. 11 BOARD MEMBER D'ADAMO: And in general how often 12 do facilities go off line for their maintenance? 13 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Typically, no 14 more than 5,000 to 8,000 megawatts would need to be done 15 at any one time. And so it depends completely on the 16 facility. Some need to go down for several months. There 17 are still facilities out there that were scheduled last 18 winter or spring to have the air pollution retrofits that 19 now need to go down for that, so it can be a matter of a 20 few weeks to several months depending on the size of the 21 job. 22 BOARD MEMBER D'ADAMO: And how often, though, 23 every year? 24 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I don't think 25 we know. Traditionally, in the marketplace, large PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 facilities would be shut down for six months at a time 2 every winter, simply because there wasn't a need to have 3 them producing. So some of them have gone down routinely 4 and others would be several years in between major 5 maintenance. 6 BOARD MEMBER D'ADAMO: Then I also had a question 7 regarding energy conservation. There was a slide that 8 showed an eight percent reduction in overall monthly 9 energy use. How current is that and do we expect that 10 number to fall a bit now that the most serious aspect of 11 this crisis has somewhat subsided? 12 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It's very 13 current. The figures reflected June through August last 14 year, and August continued the trend. Much of that seemed 15 to come about because of just the public's reaction to say 16 we need to conserve and let's do what I can. It's a real 17 problem, I'll try to help solve it. 18 I don't know how long that would be sustained now 19 that the crisis is not so severe, but also the rates have 20 increased and the financial rewards for conservation are 21 much higher now and that should sustain much of the 22 conservation effort. Plus, many of the types of things 23 that were done our programs are paying for traffic light 24 replacements for more efficiencies or consumers that have 25 replaced bulbs with florescent bulbs. Those conservation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 measures will persist well into the future. 2 So I think the prospects are pretty good that 3 most of that conservation will continue, but, again, it's 4 an area when I think the State needs to be vigilant to 5 make sure that that occurs. 6 CHAIRPERSON LLOYD: I guess any economic decline 7 also is going to lead to some reduction, I presume. 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, yeah, I 9 think there was less growth than what was otherwise 10 projected. 11 BOARD MEMBER D'ADAMO: And just on that, just a 12 note, that I think last time we were in this room or one 13 of the other hearing rooms, I can't remember, the 14 temperature seemed a little warmer and it seems a little 15 more cool today. So I don't know if the people that run 16 this building still are as vigilant as they were. 17 CHAIRPERSON LLOYD: I'm very hot. 18 (Laughter.) 19 BOARD MEMBER D'ADAMO: I'm always cold, but the 20 last time I felt that you are -- 21 BOARD MEMBER BURKE: It's because you're Welsh. 22 (Laughter.) 23 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, State 24 owned or leased facilities average something in the order 25 of between 25 and 30 percent conservation over the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 previous year. So I think they showed, like many other 2 government agencies and businesses that if you try you can 3 conserve quite a bit. 4 CHAIRPERSON LLOYD: I think truly is a little bit 5 cooler. 6 BOARD MEMBER RIORDAN: It's cool, Mr. Chairman. 7 It's cool. Let me tell you, it's cool. 8 CHAIRPERSON LLOYD: Mr. McKinnon. 9 BOARD MEMBER McKINNON: Just a comment. Kind of 10 our way of relating to this issue is as a regulatory 11 agency. And it occurs to me that we're also sort of a 12 bully pulpit. And it occurs to me that when we're talking 13 about kind of the long-term, the notion of renewables is 14 very much like electric cars are to automobile regulation. 15 It's getting towards kind of zero emission. 16 And it seems to me that, as a board, we probably 17 have a role to play to push forward more focus on 18 renewables. And that's not a comment towards staff or 19 anything. I think it's a comment towards fellow board 20 members. And I'm not sure how we do that, but I'd be 21 interested in a discussion on that. 22 CHAIRPERSON LLOYD: Well, I think it's an 23 excellent comment. You know, we interact frequently with 24 the Energy Commission and we should bear that in mind as 25 we look at the technologies. And I think it's good to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 remind us of that. 2 You also remind me of the joint work we have 3 going on with the Energy Commission as a result of some 4 legislation, I think by -- Shelley legislation, which 5 basically requires us to work with the Energy Commission 6 to look petroleum displacement. And that as we look at 7 growth here, how can we, in fact, look at other sources of 8 nonpetroleum energy. And that's ongoing, and I know we're 9 getting that back to the Board here in the next several 10 months. 11 So that's another, I think opportunity there, 12 Matt, to do that, bit I think it's a very good point. 13 With that, if I don't see anymore comments 14 from -- Mr. Kenny? 15 EXECUTIVE OFFICER KENNY: No comments. 16 CHAIRPERSON LLOYD: With that and no other items 17 then nobody to comment, I'd like to thank the staff, 18 again, an excellent presentation. What I'd also like 19 to -- Mr. Tollstrup, Mike, do you have a copy of your the 20 stuff, because I think be very helpful to with the 21 overheads. It would be for me. I think fell members of 22 the Board. 23 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: I 24 will make that available. 25 CHAIRPERSON LLOYD: With that, I'd like to bring PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 the September 20th, 2001 meeting of the Air Resources 2 Board to a close, and we'll see you all next month in 3 Monterey. 4 (Thereupon the Air Resources Board meeting 5 was adjourned at 1:10 p.m.) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 CERTIFICATE OF REPORTER 2 I, JAMES F. PETERS, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing California Air Resources Board meeting was 7 reported in shorthand by me, James F. Peters, a Certified 8 Shorthand Reporter of the State of California, and 9 thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said meeting nor in any 12 way interested in the outcome of said meeting. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 1st day of October, 2001. 15 16 17 18 19 20 21 22 JAMES F. PETERS, CSR, RPR 23 Certified Shorthand Reporter 24 License No. 10063 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345