# Final Statement of Reasons for Rulemaking

Including Summary of Comments and Agency Responses

PROPOSED AMENDMENTS TO THE

AIRBORNE TOXIC CONTROL MEASURE FOR IN-USE DIESEL-FUELED TRANSPORT REFRIGERATION UNITS (TRU) A ND TRU GENERATOR SETS, AND FACILITIES WHERE TRUs OPERA TE

Public Hearing Date: November 18, 2010

Agenda Item No.: 10-10-6

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Contents Page

I. General.........................................

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II. Summary of Comments and Agency Responses to the Original Proposal........... 3

A. Written Comments Received During the 45-Day Publ ic Comment Period and the Public Hearing............................. .................................................. 3 B. Oral Comments Provided During the ARB Public Hea ring....................... 10

## THIS PAGE INTENTIONALLY LEFT BLANK1 State of California

AIR RESOURCES BOARD

Final Statement of Reasons for Rulemaking, Including Summary of Comments and Agency Responses



### PROPOSED AMENDMENTS TO THE AIRBORNE TOXIC CONTROL

MEASURE FOR IN-USE DIESEL-FUELED TRANSPORT REFRIGERATION UNITS (TRU) AND TRU GENERATOR SETS, A ND

FACILITIES WHERE TRUs OPERATE

Public Hearing Date: November 18, 2010

Agenda Item No.: 10-10-6

I. GENERAL

In this rulemaking, the Air Resources Board (ARB or Board) adopted amendments to

the Airborne Toxic Control Measure for In-Use Diese l-Fueled Transport Refrigeration Units (TRU) and TRU Generator Sets, and Facilities Where TRUs Operate (TRU ATCM), title 13 California Code of Regulations (CCR ), section 2477. These changes are needed because they address compliance requirem ents that, per the originally-adopted TRU ATCM, became effective at th e end of 2010. There are

additional issues related to the TRU ATCM that will be addressed during a later rulemaking.

On September 29, 2010, ARB published a Notice for a November 18, 2010, public hearing to consider the amendments to the TRU ATCM. The Initial Statement of Reasons (Staff Report) for the proposed amendments to the TRU ATCM was also made available for public review and comment starti ng on September 29, 2010. The Staff Report contains a description of the purpose and necessity for the amendments to the regulation. The text of the amendments was inc luded as Appendix A of the Staff Report. These documents were posted on ARB’s Inter net website for the rulemaking at: http://www.arb.ca.gov/regact/2010/tru2010/tru2010.h tm . The Notice and Staff Report are incorporated by reference herein.

Three amendments were considered and adopted by the Board:

1. The in-use performance standard for model year ( MY) 2003 TRU engines in the 25 hp and greater category and MY 2003 and MY 2004 TRU engines in the less than 25 hp category were changed to allow TRU owner s to comply by either meeting the ultra-low-emission TRU (ULETRU) in-use performance standard or, as an option, the less stringent low-emission TRU ( LETRU) in-use standard. The2

initial compliance deadlines for MYs 2003 and 2004 TRU engines are December 31, 2010 and December 31, 2011, respective ly. The proposed amendments would also require that all MY 2003 and MY 2004 engines that initially comply by meeting the LETRU in-use stand ard must subsequently meet the ULETRU standard seven years after the initial L ETRU compliance date (i.e., 2017 or 2018).

2. Requirements for “flexibility” engines used in T RUs by original equipment manufacturers (OEM) under the federal Transitional Program for Equipment Manufacturers and California’s equipment manufactur er flexibility program (title 13 CCR, section 2423(d)) were clarified. Flexibili ty engines are new engines that

are allowed under State and federal law to be certi fied to a lower emission standard than is otherwise in effect for new engine s at the time of manufacture. 1

The amendments clarify that the operational life of flexibility engines installed

before the effective date of these amendments is se ven years from the year of engine manufacture. Flexibility engines installed after the effective date of the amendments would have a shorter operational life un der the amendments, based on the effective model year, the last year that a f lexibility engine’s prior-tier

emission standard was in effect.

3. New reporting requirements for TRU original equi pment manufacturers were added, which require the filing of periodic reports that include unit and engine data for coming production periods and sales inform ation for previous years and reporting periods going forward.

On November 18, 2010, the Board conducted a public hearing and received oral and written comments. At the conclusion of the hearing , the Board adopted Resolution 10-39 which approved the proposed amendm ents without modification.

Fiscal Impacts. The Executive Officer has determined that this regu latory action will not impose a mandate on local agencies or school di stricts or otherwise create costs to any federal, state, or local agencies. Rather, the regulation will result in cost savings for those public agencies that own affected TRU engines . The Executive Officer also has

determined that the amendments will have no adverse impact on business competiveness, employment, business creation, elimi nation, or expansion. The proposed regulatory action may result in the creati on of jobs or businesses, or expansion of businesses that manufacture, market, i nstall or maintain the diesel emissions control strategies needed to comply with the LETRU in-use performance standard. Further discussion of the economic impac ts of the amendments can be found in Chapter V of the Staff Report.

Consideration of Alternatives. The regulatory amendments in this rulemaking were the result of extensive discussions involving ARB, engine manufacturers, TRU manufacturers, and key stakeholders. A discussion of alternatives to the amendments

1 Title 40 Code of Federal Regulations (CFR) § 89.10 2, 40 CFR §1039.625, 40 CFR §1068.265, and title 13 CCR § 2423(d) (CFR, 2010a; CFR, 2010b; CFR, 2010c; CCR, 2 010)).3

as proposed is found in Chapter II of the Staff Rep ort. These included retaining the existing provisions (a “no action” alternative); de laying the in-use compliance date for MY 2003 engines by one year; and only allowing a on e-year adjustment for “flexibility” engines.

For the reasons set forth in the Staff Report, in s taff’s comments and responses at the hearings, and in the FSOR, the Board has determined that none of the alternatives considered by the agency or that have otherwise bee n identified and brought to the attention of the agency would be more effective in carrying out the purpose for which the regulatory action was proposed or would be as e ffective and less burdensome to affected private persons than the action taken by t he Board.

II. SUMMARY OF PUBLIC COMMENTS AND AGENCY RESPONSES

A. Written Comments Received During the 45-Day Publ ic Comment Period and the Public Hearing

The Board received written comments during the form al 45-day rulemaking comment period, which began with the notice publication on September 29, 2010, and ended with written comments submitted at the Board hearing on November 18, 2010. Persons submitting written comments during the 45-day publi c comment period and at the public hearing are listed in Table 1. Following the list are summaries of each comment made regarding the specific regulatory action proposed a s well as agency responses. Each response includes an explanation of either any chan ges made to accommodate the comment or the reasons for making no change.

Table 1. List of Individuals and Businesses Submit ting Written Comments Received During the 45-day Comment Period and at th e Public Hearing

Commenter

Reference Code Name and Affiliation Date Comment

Received
CARR Rodney Carr, Sr.; Carr Transport 11-08-2010 TKC Erich Lucht; Thermo King Corporation 11-15-2010 RYPOS Peter Bransfield; Rypos, Inc. 11-16-2010 ET Vicki Carne; C. W. Ennis Trucking 11-17-2010 JCT Vicki Carne; John Carne Trucking 11-17-2010

MECA Antonio Santos; Manufacturers of Emission

Controls Association 11-17-2010 CTA Matt Schrap; California Trucking Association 11 -17-2010 ATA Michael Tunnell; American Trucking

Associations 11-17-2010

PF Tom Sem; Proventia Filters 11-18-2010 SRP Senator Richard Polanco (retired); Rypos, Inc. 11-18-2010 AP-20SD Alex Padilla; 20 th Senate District 11-18-2010 JBT Oralia Ornelas; Juarez Bros. Trucking, Inc. 11- 18-20104

Availability and Reliability of Retrofits

1. Comment : The amendments are needed because there is a lack of available ULETRU retrofits. (CTA, ATA)

Agency Response: This is consistent with the Staff Report’s evaluati on of the

need for the amendment.

2. Comment: There are plenty of LETRU retrofits available, they are proven and reliable (some free reliability upgrades have been made), and ULETRU retrofits are ready for trials now. There are more than 50 s mall business dealerships in California providing retrofit emissions controls. The Board should not send mixed signals to those that have spent resources to meet the standards. Millions of dollars have been invested to bring this technology to the market. Delays in implementing emission control requirements will onl y cause retrofit manufacturers to be extremely cautious in making fu ture investments. It would

be foolish in the current economic environment to d rive away private investment in clean technology. (RYPOS, PF, MECA, AP-20SD)

Agency Response: As discussed in the Staff Report, these points were

considered in staff’s evaluation of the need for an d feasibility of these

amendments. Staff will continue to consider these points in future rulemaking

efforts.

3. Comment: ULETRU retrofits have a limited track record which means that buyers will be reluctant to purchase unproven ULETR U retrofit technology. (ATA)

Agency Response: Staff agrees that ULETRU retrofits have not been widely used as of today. This was a key reason for the de cision to allow either ULETRU or LETRU as compliance options. Staff encourages T RU owners to begin working with retrofit manufacturers as early as pos sible in trial testing ULETRU devices in order to gain operating experience and f amiliarity with the devices so that improvements, if necessary, can be made in a t imely manner.

4. Comment: Diesel particulate filters are effective at reducin g PM emissions; therefore, ARB should consider maximizing the use o f these technologies wherever possible to meet regulatory obligations. ( RYPOS, MECA)

Agency Response: Staff recognizes that diesel particulate filters ar e an effective control technology for reducing diesel pa rticulate matter. Staff is also aware that the use of cleaner engines also reduces diesel PM emissions and public health risk. The TRU ATCM allows both optio ns and the amendments do nothing to change this.5

Enforcement

5. Comment : Less than 50 percent of the TRUs operating in Ca lifornia are compliant and the Board should provide the resource s to adequately and diligently enforce and implement the regulation to maintain a level economic playing field. (RYPOS, SRP, AP-20SD)

Agency Response: This comment is related to the ongoing implementati on and enforcement of the regulation and not specifically to the proposed amendments. However, staff agrees that enforcement efforts need to be adequate to ensure compliance and maintain a level playing field, and that ARB is fully committed to

effective enforcement of the TRU ATCM.

6

. Comment : CTA members are willing to assist ARB in the enf orcement of the regulation and to help educate carriers nationwide. (CTA)

Agency Response: Enforcement cooperation and coordination are apprec iated. Staff is interested in working with CTA on outreach to their members so that they are informed about this regulation.

Economic Issues

7. Comment : The recession has severely impacted refrigerated carriers’ ability to manage their assets. In the midst of the largest f reight recession in 40 years (a 16.5 percent decrease in volumes from 2007 to 2009) , TRU owners have spent significant amounts of money to comply. With the p roposed amendments, all of the oldest and dirtiest engines will have been retr ofitted, scrapped, or replaced, so steps already taken have resulted in public heal th protections. Given the economic conditions facing businesses today, some t ype of economic relief is warranted. (CTA, ATA)

Agency Response: This comment is not specific to the proposed amendm ents. As discussed in the Staff Report, staff estimates t hat cost savings will result from the amendment to allow MY 2003 engines to comply by optionally meeting the less costly LETRU in-use standard instead of the mo re stringent ULETRU standard. The 16.5 percent decrease in freight vol umes cited by the commenters

is close to what was cited for revenue reductions f or all trucking sectors in the July 19, 2010 issue of ATA’s trade journal, Transpo rt Topics , at pages A20 to A23 (emphasis added). Staff is also aware of trade journal articles that clearly indicate the refrigerated trucking sector has weath ered the recession much better than other trucking sectors. The amendments do not impede the refrigerated trucking sector’s ability to weather the recession and in fact provide some

economic relief.

8. Comment : The Board should not allow the recession to be b lamed or used as a means to delay, defer, extend, or stop rules and re gulations from being enforced.6

The defeat of Proposition 23 showed that California voters don’t support suspending the law. Changing the compliance schedu le would bring into question the regulatory reliability and stability o f regulations and the certainty of enforcement. (SRP)

Agency Response: These amendments were not made to provide regulat ory relief due to the economic recession. The primary reason for amending the in-use standard for MY 2003 TRU engines was the lac k of available Level 3 (ULETRU) control technology in sufficient numbers t o meet the demand expected from the TRU ATCM as initially adopted. T he primary reason for the amendments for flexibility engines and manufacturer reporting requirements were to address issues arising from the unexpected high number of flexibility engines

installed in TRU.

9. Comment: There is an unfair financial burden on small operat ors who are not able to qualify for financial assistance. (CARR, ET )

Agency Response: As discussed in the Staff Report, staff estimates t hat cost savings will result from the amendment to allow MY 2003 engines to comply by optionally meeting the LETRU in-use standard instea d of the more stringent and more expensive ULETRU standard. Staff believes the TRU ATCM is structured to be fair for all TRU owners, whether they are a s mall or large operator. A company’s ability to get financing is typically bas ed on their credit rating and other factors that are beyond the control of ARB.

10. Comment: There is an unfair financial burden on larger compa nies who cannot compete with smaller companies that get financial h elp. (JBT)

Agency Response: See response to Comment 9.

Financial Assistance

11. Comment : ARB should allocate money to pay for compliance. There are no grants available for TRUs. (JBT)

Agency Response: As mentioned, at pages I-5 through I-6, of the Rev ised 2003 Staff Report for the TRU ATCM, which can be fo und at http://www.arb.ca.gov/regact/trude03/isor.pdf , several voluntary grant programs, including the Carl Moyer Program, exist for funding TRU upgrades. The Carl Moyer Program provides funding for projects that ac hieve surplus emissions reductions, meaning the emissions reductions occur sometime before a regulatory deadline or are reduced beyond what is r equired by regulation. For example, partial funding may be available for zero emission TRU systems because emissions are reduced beyond TRU ATCM requi rements. Potential applicants should contact their local air district to determine eligibility and if TRU7

funding applications are being accepted. A list of local air district contacts is available at: http://www.arb.ca.gov/capcoa/roster.h tm.

TRU Manufacturer Reporting

12. Comment: OEM reporting is not immediately feasible. The tim eline and work required to automate this process has not yet been determined. It is estimated to

take at least 18 months after the effective date of the amendments. (TKC)

Agency Response: If an internal automated process is not in use, TRU OEM may elect to gather data manually. However, the pr oposed amendments include a provision for OEMs to request alternative reporti ng systems. Staff is committed to working with TRU OEMs to explore and develop rep orting systems and processes that are equivalent to and at least as ef fective as those proposed in

the amendments.

13. Comment : The OEM reporting amendment needs to include lan guage protecting the equipment and engine manufacturers f rom liability for unintentionally distributing inaccurate information to the end-user. (TKC)

Agency Response: Like all stakeholders subject to ARB regulations, T RU OEMs and engine manufacturers may be subject to pen alties for noncompliance. However, ARB considers noncompliance on a case-by-c ase basis and will use its enforcement discretion in determining whether viola tions have been committed and if penalties are appropriate. One factor that ARB always considers is whether the stakeholder has acted in good faith in attempting to comply with the regulation’s requirements. In the case of TRU OEMs and engine manufacturers, ARB will consider the OEM and manufacturers good fa ith in providing complete

and accurate information to ARB and end-users. ARB is aware that the information required to be provided by TRU OEMs and engine manufacturers is detailed, and it is not the intent of the regulatio n to penalize inadvertent or minor technical errors. Rather, in an effort to gather t he information necessary to make the TRU ATCM effective, the emphasis by ARB staff w ill be to evaluate data gaps and inaccuracies and work with the TRU OEMs an d engine manufacturers

to resolve deficiencies so that the best and most a ccurate information is provided to ensure full compliance by all stakeholders (i.e, TRU OEMs, engine manufacturers, TRU owners and operators). While AR B may not initiate enforcement against an OEM or engine manufacture, w ho while acting to comply in good faith has made unintentional, inadvertent e rrors in its reporting, ARB cannot shield the OEM or manufacturer from third pa rty actions (TRU owners and operators) who may be adversely affected by the errors committed.8

14. Comment : OEM reporting amendments need to include languag e protecting against the misuse of proprietary data submitted to ARB by the manufacturer. (TKC)

Agency Response: The proposed amendments include a provision for confidential information or data submitted by TRU O EMs [see subparagraph (f)(3)(C)]. Staff is committed to ensuring data th at is identified as confidential is handled in accordance with regulations for disclosu re of public records, title 17 CCR, section 91000.

General Comments

15. Comment : Although we are in general support of the propos ed amendments, there is no reasonable justification for delaying t he compliance dates beyond what is being proposed in these amendments. Delays in enforcement result in delays in reductions and are detrimental to the goa ls of the regulation. No significant installations take place until 60 days prior to a compliance deadline, so delays cause compliance efforts to stop until then. The Board should not adopt the amendments that would provide for delays or ext ensions beyond the currently proposed amendments. (RYPOS, MECA, SRP, AP-20SD)

Agency Response: ARB staff is appreciative of the support for the pr oposed amendments, and their recognition that the amendmen ts address the current limited availability of verified Level 3 retrofit d evices and that the amendments will reduce the cost of complying with the TRU ATCM whil e providing increased emission reductions from the affected engines. Giv en the short timeframe between the Board hearing (November 18, 2010) and t he December 31, 2010, compliance date for MY 2003 TRU engines, the Board directed staff to use its discretion in not immediately commencing enforcemen t during the first quarter of 2011 (see response to Comment 8 in Section B). Thi s delay will not undermine the goals of the regulation. The Board has also di rected staff to return with

additional amendments to the TRU ATCM in 2011. In addressing future amendments, staff will fully consider the impact of enforcement delays on compliance actions as those amendments are develope d.

16. Comment: The Board should not open the TRU ATCM to further d iscussion in 2011. (SRP)

Agency Response: This comment is not specific to the proposed amendm ents. During implementation of the original TRU ATCM, sta ff identified a number of outstanding issues that warrant further discussion with stakeholders. The Board agreed that at least several issues require further consideration and has directed

staff to work with stakeholders to determine if the se and other issues need to be resolved in a future rulemaking. The commenter is encouraged to participate in that process to provide its perspective and share i ts concerns.9

17. Comment: Regulatory changes need to be made far in advance o f implementation deadlines. TRU owners need as much advance notice of regulatory changes as possible. (ATA)

Agency Response: Staff understands the benefit to compliance plannin g provided by advanced notice of regulatory changes a nd will consider this, to the extent possible, in future rulemaking efforts.

18. Comment: The amendments are needed, but don’t go far enough and do not consider other factors. For example, the Board nee ds to consider the following: the appropriateness of a 7-year operational life an d the “two in seven years” compliance requirements; the need to align future c ompliance deadlines with the introduction of new engines that meet ULETRU standa rd; whether the regulation should provide a compliance-extension period for f leets that have expended resources to meet the first step in the current two -step process; whether there is a lack of compliant, reliable retrofit equipment; w hether technology costs are much higher than originally projected; whether over all economic impacts have been under-estimated; and whether the estimates of the TRU population operating in California and TRU emissions inventory need to be improved. (CTA, ATA)

Agency Response: Staff has been directed by the Board to work with

stakeholders on these issues to determine which of them need to be resolved through rulemaking. The Board also directed staff to return with additional proposed amendments in 2011.

19. Comment: A better way to control diesel emissions would be f or ARB to set up an inspection system that would identify those unit s that are polluting and smoking and bad for the environment and would requi re that those units be upgraded; those that are in good condition would ge t a compliance certificate. (JCT)

Agency Response: This comment is not specific to the proposed amendm ents. The proposed amendments did not change the process for determining compliance with the in-use standards. However, the approach recommended by the commenter is likely to impose a significant eco nomic burden on the industry given the emission testing costs to each TRU owner. Additionally, there are significant state costs for implementing such a pro gram.

20. Comment: ARB should take into consideration the feasibility, costs, emissions impacts of changes to this ATCM as well as changes to other ATCMs. (MECA)

Agency Response: The Staff Report chapters II, II, IV, and V fully c onsidered feasibility, costs, and emissions impacts associate d with the proposed amendments to the TRU ATCM. ARB has similarly full y considered the listed factors in proposing amendments for other in-use di esel regulations. See staff10

reports for in-use truck and bus and drayage regula tions and in-use off-road and large spark-ignition engine regulations, which resp ectively can be found at http://www.arb.ca.gov/regact/2010/truckbus10/truckb us10.htm , and http://www.arb.ca.gov/regact/2010/offroadlsi10/offr oadlsi10.htm.

21. Comment: The OEM, not the equipment owner, should be respons ible for reducing emissions. This approach would be preferr ed over ARB creating a new retrofit industry. (JBT)

Agency Response: This comment is not specific to the proposed amendm ents. The proposed amendments did not change the applicab ility or party responsible for compliance. Compliance responsibility for in-u se TRUs must be with the equipment owner. The goal of the Diesel Risk Reduc tion Plan that the Board approved in 2000 is to reduce diesel PM emissions a nd associated potential cancer risk by 75 percent by 2010 and 85 percent by 2020. Natural turnover to cleaner equipment is not fast enough to meet Califo rnia’s public health and State Implementation Plan needs. The accelerated upgrade and replacement of TRUs will ensure that the majority of the TRU fleet will be comprised of ultra-low emission TRUs by 2020.

Support Comments

22. Comment : Several commenters indicated support for diesel emissions control measures and cleaner, healthier, better quality air . (RYPOS, ET, MECA, ATA, SRP, AP-20SD, JBT)

Comment : The proposed amendments are needed and should be adopted. (RYPOS, MECA, CTA, ATA, AP-20SD, JBT)

Agency Response: ARB staff agrees with these comments. They are consistent with staff’s finding presented in the St aff Report and presentation.

B. Oral Comments Provided During the ARB Public Hea ring

The general public presented comments to the Board during the ARB public hearing held on November 18, 2010, in Sacramento, Californi a. Persons that made oral statements on the proposed amendments are listed in Table 2. Written comments submitted the day of the hearing are addressed in T able 1 and subsequent responses. Following the list are summaries of each oral comme nt made regarding the specific regulatory action proposed as well as agency respon ses. Each response includes an explanation of either any changes made to accommoda te the comment or the reasons for making no change.11 Table 2. List of Individuals and Businesses Presenting Oral Comments During the ARB Public Hear ing

Commenter

Reference

Code Name and Affiliation Written

Comments

Provided

MECA Joe Kubsh; Manufacturers of Emission Controls Association Yes PF Tom Sem; Proventia Filters Yes HR Pat Smith; Harris Ranch No SAVMART Dan Miller; Save Mart No CVTR Michael Shuemake; Central Valley Trailer Repai r No 21EAGLE1 Larry Milton; 21 Eagle No SRP Senator Richard Polanco; Rypos Yes RYPOS Peter Bransfield; Rypos, Inc. Yes LA Mik Skvarla; Lukas Advocates No CTA Matt Schrap; California Trucking Association Ye s 21EAGLE2 Ralph Shulhe; 21 Eagle No ATA Mike Tunnell; American Trucking Associations Ye s

Availability and Reliability of Retrofits

1. Comment: LETRU (Level 2) control technologies are available and reliable. Retrofit manufacturers have the inventory and produ ction capability to meet customer demand for Level 2 VDECS compliance techno logy and have established distribution channels and excellent geo graphic coverage for sales, service, and support in California and across the c ountry. Over 4,600 diesel particulate filters have been delivered to the mark etplace. Combined, the retrofit systems have completed over 11 million hours of ope ration and captured over 85 tons of particulate matter. (MECA, PF, RYPOS)

Agency Response: This is consistent with the Staff Report and justif ication for the proposed amendments.

2. Comment: ULETRU (Level 3) control technologies are being exp anded and will be more readily available. These technologies are ready for trial testing. One manufacturer has a goal to complete verification of two Level 3 VDECS in early 2011 after completing thousands of hours of testing . (MECA, RYPOS)

Agency Response: Staff encourages expedited trial testing and will m onitor the verification progress. If verification is delayed, staff may need to evaluate the impact on future compliance dates in the TRU ATCM.

3. Comment: We have tried ULETRU (Level 3) compliance technolog y and the results were disastrous. More field testing is nee ded prior to verification of these devices. (HR)12

Agency Response: Staff has been closely monitoring the introduction of Level 3 VDECS in the marketplace and understands th at TRUs are a very challenging application for VDECS retrofits. Staff recognizes that more testing may be needed during the verification process. How ever, staff believes that the VDECS manufacturers have been very proactive in add ressing issues that have arisen for retrofits deployed in the field. Operat ors may also need to adjust historic operation and maintenance procedures for e ngines using exhaust after-treatment systems. Heightened monitoring of engine operation and periodic maintenance of fuel injectors and other components are very important to successfully using diesel particulate filters.

4. Comment: Warranties on VDECS have been said to be four years or 2,600 hours, whichever comes first. However, for m ost carriers that relates to only two years and some may be as low as one year o f warranty. (CVTR)

Agency Response: This comment is not specific to the proposed amendm ents. The warranty duration is stipulated by the Verifica tion Procedure (title 13, CCR, section 2707). Staff understands that the annual u sage of a TRU varies greatly from one type of use to another. Low-use TRUs may operate for four years before the warranty expires and unusually high-use TRUs may operate 2,600 hours in a single year. Increasing warranty duration would have a direct

effect on the cost of VDECS. VDECS manufacturers r eport the actual life of VDECS is much longer than the warranty.

5. Comment: Even though LETRU (Level 2) VDECS have been verifie d, there have been some reliability problems. However, manu facturers are proactively fixing these problems. More field testing is neede d to provide a good comfort level for industry. Reliability is something this industry relies on because food safety and liability would otherwise be a problem. A pragmatic approach to produce a sustainable regulation that protects the end user is needed. (HR, CVTR, CTA)

Agency Response: Staff agrees that reliability and food safety are m ajor concerns. Over 4,600 Level 2 VDECS have been insta lled on TRUs and have been operated over 11 million hours with very few i ssues reported. Staff closely monitors reports of problems with Level 2 VDECS. A s recognized by the commenters, manufacturers have been proactively add ressing problems that have been identified, and we have found that manufa cturers have been quick to provide reliability upgrades and replacements at no charge and with minimal disruption of service. It has been reported that s ome VDEC malfunctions have occurred because of inappropriate service and maint enance by end-users. It is the end-users responsibility to follow the owner’s manual requirements for operation and maintenance, which means some changes to operation and maintenance procedures may be required to ensure re liable operation of

VDECS.13

6. Comment: There is only one Level 2 VDECS manufacturer provid ing product for

each of the TRU manufacturers. Owners are forced t o use only one vendor, so it’s a bit monopolistic. (CVTR)

Agency Response: At this time, there are two VDECS manufacturers tha t have

verified Level 2 devices that can be used on traile r TRUs manufactured by both of the major TRU OEMs. As to commenter’s claim tha t owners are forced to use the products of only one vendor and the practice is monopolistic, ARB has no authority over how VDECS manufacturers market their products. Moreover, retrofitting with a VDECS is not the only complianc e option available to endusers; repowering with a new or rebuilt replacement engine, replacing the entire unit, or using an Alternative Technology are also c ompliance options. See

comment 7.

7. Comment: Engine replacement, rebuild, and exhaust retrofits are all available compliance options. There is and will continue to be competition between compliance technology providers. The refrigerated trucking industry has thrived with only two TRU manufacturers for the last 30 yea rs. VDECS prices have been held constant in spite of increasing costs over tim e. (RYPOS)

Agency Response: Staff agrees with this comment. See also the respo nse to

Comment 6.

Enforcement

8. Comment: The compliance deadline for MY 2003 engines should be pushed out 90 days, to March 31, 2011, due to the November 18, 2010, Board decision being so close to the December 31, 2010 compliance date. (SAVEMART, CVTR, CTA)

Agency Response: As presently written, the TRU ATCM requires that all MY 2003 TRU engines comply with the regulation by D ecember 31, 2010. This compliance date was not changed. The amendment for MY 2003 compliance instead provides owners with an alternative path fo r compliance that provides owners with greater compliance flexibility. While not amending the date for compliance, staff recognized that in some cases del iveries and installations of Level 2 (LETRU) VDECS, the new compliance pathway, may not occur by the end of the year. To address this, ARB has informed stakeholders that it will use its enforcement discretion not to enforce complianc e for MY 2003 engines that
have a December 31, 2010 deadline until March 31, 2 011.

9. Comment: Certainty of enforcement is critical to achieving c ompliance. We need robust enforcement. (SRP, CTA)

Agency Response: Staff agrees with the commenter. ARB enforcement s taff has been actively enforcing the TRU ATCM and will c ontinue to do so.14

Economic Issues

10. Comment: Retrofit compliance costs are roughly two and a hal f to three times greater than originally projected. Also, engine re powers are the primary compliance strategy used by nearly two-thirds of af fected units. The regulation

should be further modified to eliminate the current two- and seven-year compliance requirement and instead align future com pliance with the introduction of new engines meeting the ULETRU standard for the 25 to 50 horsepower category. (ATA)

Agency Response: The Staff Report showed that the proposed amendment s actually result in cost savings. The second complia nce step may not be necessary for high-use units that would normally be scheduled for retirement. Staff has been directed by the Board to work with s takeholders on this and other issues, and to return to the Board in 2011 with pro posed amendments for Board consideration. In working through these issues, st aff will use the best information that is available at the time to update the estimat es, modeling, and evaluations of TRU populations, emissions, exposure, health risk, costs, cost-effectiveness, and other required considerations.

11. Comment: There should be an extended compliance period for f leets that have expended financial resources complying with step on e of the current two-step process. (ATA)

Agency Response: This comment is not specific to the proposed amendm ents. A single compliance step that stops at LETRU would only reduce PM emissions by 50 percent and would not meet the emission reduc tion goals of the Diesel Risk Reduction Plan (DRRP). Meeting the ULETRU sta ndard is necessary to meet the goals of the DRRP, which is to reduce dies el PM emissions by 85 percent by 2020. However, staff has been direct ed by the Board to work with stakeholders and to propose changes for considerati on by the board in 2011.

12. Comment: The Board should not allow the recession to be blam ed or used as a means to delay, defer, extend, or stop rules and re gulations from being enforced. The defeat of Proposition 23 showed that California voters don’t support suspending the law. Changing the compliance schedu le would bring into question the regulatory reliability and stability o f regulations and the certainty of enforcement. (SRP)

Agency Response: These amendments were not made to provide regulator y relief due to the economic recession. The primary reason for amending the In-use standard for MY 2003 TRU engines was the lac k of available Level 3 control technology in sufficient numbers to meet th e demand. The primary reason for the amendments for flexibility engines a nd manufacturer reporting requirements were to address issues arising from th e unexpected high number of flexibility engines installed in TRUs.15

TRU Manufacturer Reporting

13. Comment: We have been working with ARB staff to address the con cern over the confidentiality of competitively sensitive data that is required in the reporting requirements. We believe that the optional reporti ng mechanisms that have been included in the current update will provide th e possibility of working with ARB staff to achieve compliance. (LA)

Agency Response: Staff is committed to working with TRU OEMs in expl oring and developing reporting systems and processes that are equivalent to and at least as effective as those proposed in the amendme nts, and will at the same time work to address manufacturers’ confidentiality and data availability issues. There are provisions in the rule that allow for the se situations like these to be

resolved.

General Comments

14. Comment : Several commenters indicated support for or no oppo sition to the proposed amendments, or acknowledged that the propo sed amendments are needed. (MECA, HR, SAVMART, CVTR, SRP, RYPOS, CTA, ATA)

Agency Response: No response necessary.

15. Comment: Regulatory certainty is important and needed to get compliance and to protect investments in the development and verif ication of control technology. These clean technologies are creating jobs in Calif ornia. Over $100 million has been invested in research and development of contro l technologies. (MECA, SRP, RYPOS)

Agency Response: Staff understands the need for regulatory certainty and encourages these stakeholders to participate in the rulemaking process for the subsequent amendments to ensure their concerns are considered.

16. Comment: The Board should consider a 10-year operational lif e for TRUs instead of the seven-year life currently in the ATC M. (HR, CVTR, CTA)

Agency Response: This comment is not specific to the proposed amendm ents. Staff will look at the feasibility of extending the operational life to up to 10 years, in consideration of risk and cost, in a subsequent rulemaking, as directed by the

Board.

17. Comment: Future amendments should not go beyond what is bein g proposed today. (SRP)

Agency Response: This comment is not specific to the proposed amendm ents. During implementation of the original TRU ATCM, sta ff identified a number of16

outstanding issues that warrant further discussion with stakeholders. The Board

has directed staff to work with stakeholders to det ermine if these issues need to be resolved through rulemaking. The commenter is e ncouraged to participate in that process to provide his perspective.

18. Comment: Any future changes to the regulation need to be mad e as soon as possible to provide certainty to those facing compl iance decisions. There has been an estimated 83 to 133 million dollars already spent on repowers and retrofits, so there has been a significant financia l commitment made to this regulation. The Board should direct staff to keep working on the regulation to work the bugs out. (ATA)

Agency Response: See response to Comment 17 in Section A.

19. Comment: Several commenters from a single company promoted t heir fuel additive as a compliance option; but first, it need ed to be verified. These commenters requested an expedited verification so t hat it could be used to comply as soon as possible. (21EAGLE1, 21EAGLE2)

Agency Response: This comment is not specific to the proposed amendm ents. These commenters were directed by the Board to cont act appropriate staff for verification of control technologies. Staff have b een in contact with these suppliers and have explained the verification proce ss to them.