GOVERNING BOARD

Skip Barwick, Chair Councilmember, City of Tulare

Hub Walsh, Vice Chair Supervisor, Merced County

Oliver L. Baines III Councilmember, City of Fresno

Tony Barba Supervisor, Kings County

Sally J. Bomprezzi Councilmember, City of Madera

Dennis Brazil Mayor, City of Gustine

Judith G. Case Supervisor, Fresno County

David Couch Supervisor, Kern County

Bob Elliott Supervisor, San Joaquin County

Harold Hanson Councilmember, City of Bakersfield

William O’Brien Supervisor, Stanislaus County

Alexander C. Sherriffs, M.D. Appointed by Governor

Tom Wheeler Supervisor, Madera County

J. Steven Worthley Supervisor, Tulare County

Seyed Sadredin

Executive Director
Air Pollution Control Officer

Northern Region Office 4800 Enterprise Way Modesto, CA 95356

- 8718 (209) 557

- 6400 • FAX (209) 557

- 6475

Central Region Office

1990 East Gettysburg Avenue Fresno, CA 93726

- 0244 (559) 230

- 6000 • FAX (559) 230

- 6061

Southern Region Office 34946 Flyover Court Bakersfield, CA 93308

- 9725 (661) 392

- 5500 • FAX (661) 392

- 5585

www.valleyair.org DATE: September 19, 2013

TO: SJV UAP CD G overning B oard

FROM: Seyed Sadredin, Executive Director/APCO

Project Coordinator s : Samir Sheikh/Jessica Fierro

RE: ITEM NUMBER 7: ADOPT THE PROPOSED 2013

PLAN FOR THE REVOKED 1

- HOUR OZONE

STANDARD

RECOMMENDATION:

1. Adopt the Proposed 2013 Plan for the Revoked 1

- H our Ozone Standard, and

2. Authorize the Chair to sign the resolution adopting the Proposed

2013 Plan for the Revoked 1

- H our Ozone Standar d , including

the VMT offset demonstration for the 2007 Ozone Plan

, and

3. Direct staff to forward the adopted 2013 Plan for the Revoked 1

- H our Ozone Standard and the attached resolution to the California Air Resources Board (ARB) for approva l and submittal to the U.S. Environmental Protection Agency (EPA).

BACKGROUND:

The combined efforts of the Valley’s businesses and residents have resulted in Valley ozone levels being better today than ever. Since 1992, the District has adopted numerous attainment plans and over 500 rules, and billions of dollars have been invested by Valley

businesses to reduce emissions

. Additionally, through the District’s well-respected incentive program, the District has provided over $500 million in incentive funds, resulting in over 100,000 tons of lifetime

emission reductions. Each District incentive investment is matched by investments on the part of the participating businesses, public agencies, and residents, who together have also invested over $400 million in these incentive program projects. However, many challenges remain in attaining increasingly stringent federal standards.SJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

2 In addition to the multiple attainment plans currently in place, the District is mandated by the federal Clean Air Act (CAA) to develop and implement two new ozone attainment plans (state implementation plans , or “SIPs” ) in the near future: a plan for the U.S. Environmental Protection Agency’s (EPA) revoked 1 -hour ozone standard due in 2013 (today’s recommendation) and a plan for EPA’s newest 8 -hour ozone standard (standard established in 2008; plan due in 2015/2016).

This 2013 Plan for the Revoked 1-Hour Ozone Standard was developed with public participation and meets all applicable federal requirements.

DISCUSSION:

Why is the District adopting a plan for a revoked standard?

The latest plan to address the 1-hour ozone standard, the 2004 Extreme Ozone

Attainment Demonstration Plan ( 2004 Plan ), was adopted by the District in 2004. EPAsubsequently revoked the 1-hour ozone standard in 2005 in pursuit of the more healthprotective 8-hour standard and adopted anti-backsliding provisions to preserve existing

1-hour ozone control measures and emissions reductions obligations. This revocation delayed EPA action on the District’s 2004 Plan until 2010. Subsequent litigation challenged EPA’s approval of the 2004 Plan , and the c ourt vacat ed EPA’s approval due to EPA’s delayed action

. EPA withdrew its approval of the 2004 Plan in the Federal Register in November 2012, and the District is now required to submit a new plan for

the revoked 1-hour ozone standard.

Progress in reducing ozone levels in the Valley

Due to the Valley’s significant investment and hard work in reducing emissions, the District anticipates attaining EPA’s revoked 1 -hour standard as measures from more recent 8-hour ozone and PM2.5 (particulate matter 2.5 microns or less in diameter) plans continue to be implemented. There has been significant progress in reducing the Valley’s 1 -hour ozone concentrations. Between 1996 and 2012, the number of days over the 1-hour ozone standard has decreased 95%, and the number of hours over the

standard ha s decreased 97%. As of the date of this report, there have been no 1-hour

ozone exceedances in 2013. The maximum level, or “peak,” 1-hour ozone concentrations are also decreasing, with a 13% decrease between 2003 and 2012.

Exceedances of the Revoked 1-hour Ozone Standard

(1996 and 2012)

Year Days over the

Standard Hours over the

Standard

1996 56 281

2012 3 7SJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

3 The Valley’s ozone precursor emissions are being significantly reduced b etween 2007 and 2017, with oxides of nitrogen (NOx) emissions being reduced 49% and volatile organic compounds (VOC) emissions being reduced 20%. Research and modeling has consistently demonstrated that the Valley is a NOx-limited area, and reducing NOx emissions continues to be the most effective strateg y for reducing Valley ozone concentrations (much more effective than reducing VOC emissions). These emission reductions exceed the minimum reductions needed for the Rate of Progress (ROP) demonstration required for the 1-hour ozone plan.

San Joaquin Valley NOx Summer Inventory Trend

The Valley is also showing progress with respect to 8-hour ozone concentrations. The Valley’s 8

- hour ozone “design value,” an EPA worst-case calculation used to demonstrate attainment, was the lowest on record in 2012. Exceedances of the 8-hour

ozone standard decreased 60% between 2003 and 2012. 2013 continues to show ozone progress, despite heat episodes and wildfires.

Addressing EPA’s 2008 8 -hour ozone standard of 75 parts per billion (ppb), however, will pose a tremendous challenge for the Valley

, given the naturally high background ozone levels and ozone transport into the Valley

. Attaining the 2008 8-hour ozone standard will require significant additional emissions reductions, and may not even be possible without a virtual elimination of the emissions associated with fossil-fuel combustion and transition to zero-emission technology. Although an attainment deadline of 2032 may seem like the distant future, in reality this deadline may not provide adequate time for the necessary transformative measures to be planned and implemented.

These issues must be carefully considered in the course of preparing the plan for the 2008 8-hour ozone standard, which would be due to EPA in 2015 or 2016, pending

0.0 100.0 200.0 300.0 400.0 500.0 600.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017NOx EmissionsSJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

4 EPA’s final implementation rule for this standard. The foundational District and ARB analyses needed for this plan are already underway.

Reaching attainment of the revoked 1-hour ozone standard

The attainment test for the 1-hour ozone stan dard of 0.12 parts per million is based on the number of exceedance days per year, averaged over a three-year period. A site with an average of 1 or fewer exceedance days per year, as averaged over a three-year period, meets the standard. In other words, if the site has 3 or fewer exceedance days in a three-year period, then it meets the standard; if that site has more than 3 exceedance days in a three-year period, then it does not meet the standard. If a single site violates the standard, the entire San Joaquin Valley is then in violation of the

revoked 1-hour ozone standard.

As shown in the table below, the Valley could attain the standard as early as 2013, based on the number of exceedance days betwee n 2011 and 2013, depending on ozone concentrations for the remainder of 2013, and pending EPA approval of a 2012 exceedance caused by a fire (eligible to be excluded as an “exceptional event” under the Clean Air Act). However, over recent years, the Valle y’s exceedance days have been limited to a few hours in late summer/early fall (back to school period). As little as four hours over a three year period at any location can keep the entire Valley out of attainment. A single episode of ozone build up could prolong nonattainment.

Exceedances of the Revoked 1-hour Ozone Standard

, 2011 – 2013

Monitoring Site 2011 2012 2013** Total

Clovis 2 0 0 2

Fresno

- 1 st

/Garland 0 1 0 1

Fresno

- Drummond 3 0* 0 3

Fresno

- Sierra Skypark 0 1 0 1

Parlier 1 1 0 2

Visalia 0 0 0 0

Arvin

- DiGiorgio 0 0 0 0

Bakersfield

- California 0 0 0 0

Edison 0 0 0 0

*Exceptional event pending for exceedance day **2013 is a partial year

With this challenging nature of the 1-hour ozone standard in mind, and based on the modeling and other analysis conducted as part of this planning effort, 2017 is the official attainment year for the 2013 Plan for the Revoked 1-Hour Ozone Standard , consistent with CAA §172(a)(2)(A)

. The table below shows 1-hour design values, which represent the fourth highest 1-hour ozone concentration over a three year period. Expressed in parts per billion (ppb), a value of 125 ppb or higher indicates nonattainment, and a value of 124 or lower indicates attainment. All monitoring sites in an area must be within theSJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

5 standard for the area to reach attainment. Values shown for 2005 through 2007 are based on collected air monitoring data, and the values shown for 2015 through 2017 are based on future year modeling conducted for this plan. These values show that all Valley sites would fall below the standard, and therefore the Valley would be in attainment, by 2017

.

Design Values: 2005-07 versus 2015- 17 (shown in parts per billion, or ppb)

Role of Air Alerts in addressing remaining exceedances

Currently, the Valley is subject to penalties under Section 185 of the CAA amounting to approximately $ 29 million dollars per year due to nonattainment of the revoked 1-hour standard. This matter is also under litigation with a Bay area law firm (EarthJustice) seeking imposition of additional penalties on Valley businesses. Attaining the 1-hour ozone standard will remove exposure by Valley businesses to additional penalties and will return full local control to the Valley for decisions regarding the need, the magnitude, and the expenditure of Department of Motor Vehicle (DMV) dollars.

Given the episodic and limited nature of remaining 1-hour ozone exceedances, there is an opportunity for the general public and businesses to reduce emissions through the District’s Air Alerts program. The District developed the Air Alerts notification system to address potential exceedances of the 1-hour ozone standard. Used in late summer when the air basin historically experiences such exceedances, Air Alerts provide a structured process to notify the public that ozone levels are rising and advise them that emission-reduction actions are needed to prevent an exceedance, such as using alternative transportation and postponing emission-causing activity that creates ozone

precursors.

Air Alerts are a public education and warning system designed to notify residents of impending periods of deteriorating air quality that consists of extensive outreach efforts to inform the public through news releases, TV, radio, and social media. Air Alerts are

Monitoring Station Design Value (2005

- 07) Design Value

(2015

- 17)

Edison 135 119.3

Arvin

– Bear Mountain Blvd. 131 107.4

Fresno

– 1 st Street 130 103.7

Clovis 125 104.1

Bakersfield

– California Ave 117 98 .0

Visalia 112 94.5

Fresno

– Drummond 110 93 .0

Modesto

– 14 th Street 109 95.9

Turlock 104 91.8

Stockton 101 86.3

Merced 102 83.5

Madera 95 82.4SJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

6 activated during August/September, coinciding with back- to -school periods, and are declared Valley-wide given the nature of ozone plumes.

There is a causal correlation between the Valley’s incidences of 1 -hour ozone exceedances and the beginning of the new school year. During the past few years, t he only exceedances have occurred during mid-afternoon hours at the beginning of the school year (as demonstrated in the following charts ), suggesting that the increase in traffic to and from school sites is the source of these emissions. Recognizing this, the District has embarked on an aggressive public education and outreach campaign to 1) educate Valley drivers, particularly those with school-aged children, of the correlation and 2) encourage them to modify their behavior when dropping off and picking up students. The District’s Governing Board recently approved funding to conduct targeted outreach to an estimated 841 schools and 168,000 students during the 2013-14 school year to reduce school-site idling.

Narrowing Range of 1-hour Ozone Exceedances by Month

0 10 20 30 40 50 60 70 80

Apr May Jun Jul Aug Sep Oct NovExceedances 1980-84 1990-94

2000-04 2008-12SJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

7

Narrowing Range of 1-hour Ozone Exceedances by Hour

Summary of the 2013 Plan for the Revoked 1-Hour Ozone Standard

The District’s 2013 Plan for the Revoked 1-Hour Ozone Standard meets all federal requirements, as illustrated in the following table.

Requirement Federal CAA Location in plan

Rate of Progress (ROP) demonstration §172(c)(2) and 182(c)(2) Chapter 4

Contingency measures:

 For ROP

 For attainment year §172(c)(9) and 182(c)(9) Chapter 4

Attainment demonstration §182(c)(2)(A) and 172(a)(2) Chapters 2 and

4

Reasonably Available Control Measures (RACM) demonstration §172(c)(1) Chapters 3 and 4; Appendix C

Clean fuels/clean technologies for boilers §182(e)(3) Chapter 4

Vehicle miles traveled (VMT) offset

demonstration §182(d)(1)(A) Appendix D

The District ’s strategy for attaining the revoked 1979 1-hour ozone standard includes adopted strategies from current District plans ( 2007 Ozone Plan, 2008 PM2.5 Plan,

2012 PM2.5 Plan ), including strategies implemented by both the District and the ARB. The District strategy is a multi-faceted approach that uses a combination of conventional and innovative control strategies. The District’s comprehensive strategySJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

8 includes regulatory actions; incentive programs; technology advancement programs; comprehensive policy and legislative activities; extensive public outreach, participation, and communication; and other innovative strategies.

Despite the extensive and innovative strategy already in place, the District continues to evaluate the technological feasibility and cost-effectiveness of all potential regulatory control technologies that might be available to further reduce emissions. The District’s

“ n o stone unturned” ana lysis did not reveal additional regulatory control measures

, aside from those already identified during development of the 2012 PM2.5 Plan

. However, further study measures will assist in preparation of upcoming 8-hour ozone plan. The following table includes a summary of upcoming additional regulatory actions

carried over from the 2012 PM2.5 Plan to this plan and Further Study Measures that will assist in the preparation of the upcoming 8-hour ozone plan.

Additional Regulatory and Further Study Strategies

Regulatory Control Strategies ( also included in the 2012 PM2.5 Plan) Adoption

Date

Amend Rule 4905 (Natural Gas

- fired, Fan

- type Residential Central Furnaces) 201 4

Amend Rule 4308 (Boilers, Steam Generators, and Process Heaters 0.075 to <2 MMBtu/hr) 201 3

Further Study Measures Completion

Date

Rule 4103 Open Burning 2015

Rule 4106 Prescribed Burning 2013

Rule 4311 Flares 2013

Rule 4601 Architectural Coatings 2014

Rule 4624 Transfer of Organic Liquids 2014

Rule 4693 Bakery Ovens 2014

Lawn Care Equipment 2013

Asphalt/Concrete Operations 2013

VMT growth offset demonstration for the 8-hour and 1-hour ozone plans

Under CAA §182(d)(1)(A), ozone plans must show that adopted transportation control strategies offset vehicle miles traveled (VMT) growth

. As part of EPA’s revocation of its prior approval of the District’s 2004 Plan , EPA also withdrew its prior approval of the

VMT offset demonstration for the 1997 8-hour oz one standard (part of the District’s

2007 Ozone Plan ). As such, the District and ARB compiled VMT offset analysis for both

1-hour and 8-hour ozone in the 2013 Plan for the Revoked 1-Hour Ozone Standard

. This analysis is consistent with EPA’s recent August 2012 guidance.

For this analysis, two scenarios were calculated using 1990 as the calculation base year: one for the revoked 1-hour ozone standard (with attainment year of 2017) and one for the 1997 8-hour ozone standard (with attainment year of 2023). The scenariosSJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

9 include emissions estimates for the attainment year with no new additional motor
vehicle controls, but with increases in VMT; with no new motor vehicle controls and no VMT growth; and with full motor vehicle controls and projected VMT growth. The motor vehicle controls used in the analysis include state-implemented transportation control strategies and locally implemented transportation control measures. As illustrated in the chart below, the actual emissions (the blue column) are less than the hypothetical emissions (green column); therefore, the federal requirements for VMT offsets have

been satisfied.

VMT Growth Offset Demonstration

Plan prepared with opportunities for public input

The District and ARB co-hosted a public workshop in April 2013 at District offices and

via webcast to outline and receive comments on 2013 Plan for the Revoked 1-hour

Ozone Standard

. The District and ARB also met with interested stakeholders (including the Central Valley Air Quality Coalition, or CVAQ) upon request. A public comment period was held for the proposed plan from August 20 through September 3, 2013. Additionally, throughout the plan development process District staff has communicated that comments are welcomed at any time up to and including at the public hearing for the adoption of the plan. All significant comments and responses are summarized in Appendix J of the plan. Some of the key issues raised during development of the 2013

Pl an for the Revoked 1-Hour Ozone Standard are summarized below:

Arvin Monitor

Comment: How does the relocation of the Arvin ozone monitor affect the Valley’s 1

- hour ozone attainment? 0 100 200 300 400 500 600

1990 Base Year 1-hour (2017) 8-hour (2023)NOx Emissions (tpd) Base Year emissions

No new measures,

w/VMT Growth

No new measures, no VMT growth

Actual emissions,

w/controls and VMT growthSJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

10 Response: Removal of the Arvin Bear Mountain monitor was unforeseen, as the property owner declined to renew the lease with the state Air Resources Board (ARB) for the monitoring site and continues to decline requests to allow the site to be reinstalled. Contrary to what some commenters have suggested, EPA has not determined that the Arvin Bear Mountain monitor must be replaced to demonstrate

attainment of the 1-hour ozone standard.

A new Arvin monitoring site (Arvin-Di Giorgio) was established just 2.2 miles away, on a school site that is more representative of population exposure. The District is sponsoring a saturation study in Arvin to measure relative differences in ozone concentrations in the Arvin area in August and September 2013, with final results expected in early 2014. Preliminary results from the first several weeks of monitoring conducted in this study indicate that the new Arvin-Di Giorgio site is recording relatively higher values than the former Arvin-Bear Mountain site. Collectively, information from the new Arvin monitoring site and other research, including the current saturation study, will be used to support an attainment finding.

Additionally, ARB was able to use the 2005 through 2007 data from the Arvin Bear Mountain monitoring site to model attainment in 2017 at that site as emissions

continue to decrease.

Clean Air Act Section 185 non -attainment penalty fees

Comment: How would the Valley’s reaching attainment of the revoked 1 -hour ozone standard affect the Section 185 non-attainment penalty and the amount of DMV fees being collected?

Response: Currently, the Valley is subject to non-attainment penalties under CAA §185 for approximately $29 million dollars per year due to non-attainment of the revoked 1-hour standard. This matter is also under litigation with certain environmental groups seeking to increase non-attainment penalties charged to Valley businesses. Attaining the standard will remove exposure by Valley businesses and residents to nonattainment penalties and will return full local control to the Valley for decisions regarding the need, the magnitude, and the expenditure of DMV dollars. The emissions reductions achieved through DMV dollars and corresponding District incentive programs are making a significant impact in addressing the Valley’s air quality challenges , including challenges with respect to

both 1-hour ozone and 8-hour ozone.

Additional measures to attain the revoked 1-hour ozone standard before 2017

Comment: Are additional control measures available that could expedite attainment

to earlier than 2017?

Response: No specific suggestions were provided for new control measures that could achieve additional emissions reductions and help to expedite attainment of theSJVUAPCD Governing Board

ADOPT THE PROPOSED 2013 PLAN FOR THE REVOKED 1-HOUR OZONE STANDARD September 19, 2013

11 standard. The District reviewed additional opportunities to reduce emissions of ozone precursors under this plan, and found that all feasible and reasonably available measures are already in place and will continue to reduce emissions over the next few years. The District did identify further study measures to be evaluated for potential incorporation in the District’s upcoming plan for the 2008 8 -hour ozone

standard.

The modeling and other analyses in the plan show that the Valley will attain the 1- hour ozone standard by 2017, based on implementation of ongoing emissions control strategies. This is not to say that attainment before 2017 is not possible. As of the posting of this plan, attainment could be possible as early as 2013. On the other hand, it takes as little as four hours over a three-year period (where those four hours occur on four separate days at a single air monitoring site) to keep the entire Valley out of attainment. A single episode of ozone build up could prolong nonattainment. With this challenging nature of the 1-hour ozone standard in mind,

and based on the modeling and other analysis conducted as part of this planning effort, 2017 is the official attainment year for this plan. The 2017 attainment year is consistent with the five-year attainment timeframe of CAA §172(a)(2)(A); in addition, this plan is not using the full 10-year attainment timeframe allowed under CAA §172(a)(2), nor does it rely on yet- to

- be

- identified “black box” emission reductions under CAA §182(e)(5).

In contrast to this comment, the District received other comments noting that the 2017 attainment date in the plan is reasonable, within legal requirements, and expeditious.

FISCAL IMPACT:

The District’s strategy for attaining the revoked 1979 1 -hour ozone standard primarily consists of strategies included in previously adopted District plans ( 2007 Ozone Plan,
2008 PM2.5 Plan, 2012 PM2.5 Plan ), which will be implemented in the future over a period of several years. While the workload implications will likely be significant, the extent of the fiscal impact on future budgets is uncertain, and existing staff resources

will be utilized to the extent feasible to minimize the need for additional resources

. If necessary, staff will request additional needed resources from your Board either through annual budget requests or mid-year budget adjustments. Therefore, no modification of the District’s Budget is necessary at this time.

Attachments: Attachment A: Resolution for the Proposed 2013 Plan for the Revoked 1-hour Ozone Standard ( 6 pages) Attachment B: Proposed 2013 Plan for the Revoked 1-hour Ozone Standard (640 pages )