### Appendix D

Reasonable Further Progress a nd Contingenc y Reductions(This page intentionally left blank.)May 7, 2007 Appendix D 1 Introduction

Reasonable further progress (R FP) refers to the annual emi ssion reductions required to demonstrate continued and steady progress toward attaining air quality standards. A
SIP must demonstrate both RFP and attainment to be approvable. It must also include contingency emission reductions that must be achieved if a nonattainment area fails to
meet certain milestones. The RFP r equirements for the 8- hour ozone standard are described in the “Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard,” and build upon the requirement s specified in Clean Air Act sections 172(c)(2), 182(b)(1) and 182(c)(2)(b).

This appendix will summarize how Californi a meets its RFP and contingency reduction requirements. It is impo rtant to note that the requirements are met in every nonattainment area with already-adopted meas ures. No new emission reduction commitments are required and no reductions fr om the State Strat egy’s proposed new
measures are needed to m eet the requirements.

RFP Requirements

RFP requirements vary by nonattainment classi fication. The following is a discussion about RFP requirements for California nonattain ment areas as initially designated by
U.S. EPA.

Areas with a basic classification that can at tain the standard within the first five years after the designations become effective (2004-2009) do not hav e to demonstrate RFP. Three basic areas, Sutter Buttes, Butte County and San Diego County will meet the federal standard by 2009. Areas with a marg inal classification – Imperial County and San Francisco Bay Area – are not s ubject to RFP requirements.

Moderate and basic areas that require more t han five years to attain must demonstrate
RFP. Their RFP demonstrations include an initial 15 percent reduction in ROG and/or
NOx emissions from the 2002 baseline ROG inventory by 2008. They then must achieve additional reductions per year, aver aged across each consecutive 3-year period or part thereof until their atta inment year. Basic areas needi ng additional time to attain include: Eastern Kern, Sout hern Mountain Counties, Cent ral Mountain Counties, and Western Nevada County. Moderate areas include: Ventura, Antelope Valley and Western Mojave Desert.

Areas whose 1-hour ozone rate of progress plans were not approved by the U.S. EPA are subject to different RFP requirements. These areas still must meet the initial RFP target of 15 percent ROG reductions for the first six years (2002-2008), as set forth in Clean Air Act section 182(b)(1). They cannot use NOx emission reductions to satisfy the initial target when ROG emissions are not sufficient. The area s subject to this restriction are Coachella Valley, Antelope Valley, and Western Mojave Desert, which comprise the former Southeast Desert 1-hour ozone nonattainment area. This presents a challenge for the former Southeast Desert areas because their nonattainment status is due in part to pollution transported from the South Co ast. In such situations,May 7, 2007 Appendix D 2 U.S. EPA allows the nonattainment area to account for emissi ons occurring, and emission reductions achieved, in upwind areas to be credited towards rate of progress. With transport included in the calculation, the Coachella Valley meets rate of progress requirements.

For RFP, nonattainment areas classified serious and above must demonstrate an 18 percent reduction in ROG and/or NOx emissions from the 2002 baseline ROG inventory by 2008. In the years that follo w, they must demonstrate, on average, an additional 3 percent per year reduction in ROG and/or NOx emissions until their attainment year. Serious areas are: San Joaquin Valley, Coachella Valley and
Sacramento. Note that for the reasons given above, Coachel la Valley is subject to a 15 percent ROG-only reduction requirement from 2002 to 2008. The South Coast Air
Basin is classified as severe.

For moderate and above 8-hour ozone nonattain ment areas, a limit ed amount of NOx reductions may also be used, to a point, as a substitution for ROG reductions for RFP.
NOx emission reductions creditable toward th e RFP requirement cannot be greater than
the cumulative NOx reductions that are nece ssary to demonstrate attainment. This attainment consistency requirement is m eant to prevent the substitution of NOx reductions for progress purposes that w ould not lead toward attaining the ozone
standard.

U.S. EPA has taken the position in guidanc e, and not in regulation, that for nonattainment areas classified under Subpar t 2, reductions needed for progress in the attainment year should equate to those needed for attainment. ARB staff disagrees. We believe a plain reading of the Act indica tes that a 3 percent reduction per year is needed between the next-to-last milestone year and the attainment year . For example, in a severe-15 area, the next-to-last milest one year is 2017 and the attainment year is 2018. A 45 percent reduction is needed in 2017 for RFP. Therefore, the RFP requirement for the next year (2018) is thre e percent more, or 48 percent – and not the
reductions needed for attainment.

Upwind Emissions in RFP Demonstrations

Ozone levels are influenced by ROG and NO x emitted both within a nonattainment area and transported from upw ind locations. U.S. EPA acknowledges this relationship by allowing emission reductions from upwind lo cations outside the nonattainment area to be included for RFP, up to 100 kilometers for ROG and 200 kilometers for NOx.

The inclusion of transport contributions of ROG and NOx provides key emission reductions in RFP analyses for the following nonattainment areas: Antelope Valley and Western Mojave Desert, Central Mountain C ounties, Coachella Valley, Eastern Kern,
Southern Mountain Counties and Western Nevada. Their em ission inventories for RFP purposes include ROG and NOx emissions from counties that are (1 ) entirely within the designated 100km and 200km distances, and (2) part of the area’s established federally-approved transport couples.

Federal Motor Vehicle Control Program AdjustmentsMay 7, 2007 Appendix D 3 Section 182(b)(1)(D) of the Cl ean Air Act stipulates that emission reductions stemming
from the federal on-road motor vehicle control program as it existed in 1990 may not be used to help meet minimum emission reducti on requirements for RF P purposes. This precludes states from securing the em ission reductions required to demonstrate satisfactory progress for ozone simply on the merit of the federal motor vehicle control program as it existed in 1990. The Clean Air Ac t also prohibits states from taking credit for emission reductions resulting from using gasoline with a Reid vapor pressure limit specified by 1990. States are required to adjust for the benefits of these federal programs in RFP calculations. ARB staff ha s considered the combined benefits of the federal motor vehicle and fuel volatility programs for purposes of this discussion, and
will reference them below as the “federal program” and “federal program adjustments”.

California’s pioneering efforts to set emission standards from motor vehicles resulted in
nationwide emission standards adopted by U.S EPA. In general, California’s auto emission standards have been, and are, mo re stringent than f ederal standards, particularly for passenger vehicles.

In analyzing what federal program adj ustments should be made to California nonattainment area RFP reductions, ARB st aff analysis concluded that the federal program did not provide any additional benefits beyond Califo rnia’s program and that the federal program adjustment in all nonattainment areas should be zero. This is a bit different than the rate of pr ogress reductions for the last 1-hour ozone SIP, where some federal program adjustments we re made. ARB staff’s met hodology for calculating the federal program benefits remain s unchanged, except to refl ect a change in the baseline year from 1990 (for 1-hour ozone plans) to 2002.

California’s on-road control program has continued to advance since 1990, so
emissions from motor vehicles in 2002 ar e much lower than they were in 1990. Additionally, large increases in vehicle miles traveled from 1990 to 2002 result in a higher-emitting federal fleet for 8-hour ozone RFP than for the 1-hour ozone rate of progress. Combined, these factors lead to the conclusion that the pre-1990 federal program provides no benefits to Ca lifornia in 8-hour ozone RFP plans.

Contingency Requirements

Contingency reductions are to take effect without further ARB or air district action if the
nonattainment area does not achieve an RFP mile stone, or if the area does not attain
the federal 8-hour ozone or PM 2.5 standard at the end of th eir identified attainment year. This requirement does not apply to marg inal nonattainment ar eas, only to basic, moderate, serious, severe and extreme areas (for RFP only). Since these contingency
reductions must be achieved without further action, U.S. EPA has interpreted this to mean that the contingency reductions must be from measures that have already been adopted when the submittal is made (or possi bly prior to U.S. EPA taking action).

The bulk of emission reductions needed to attain the federal standards in this submittal are achieved through regulations that make up California’s mobile source emission control program, which has been very successf ul in reducing emissions within CaliforniaMay 7, 2007 Appendix D 4 and represents the foundation s upporting attainment of both federal and State ambient air quality standards. ARB has a well est ablished history of adopting and implementing mobile source control regulations on time or earlier than it has committed to do so. As a result, we expect to achieve, and even exceed, our RFP goals without the need for contingency reductions.

For all nonattainment areas , already-adopted measures provide more emission
reductions than are needed to meet RFP r equirements in every milestone year. Therefore, the emi ssion reductions from adopted measur es that go beyond the RFP requirements will constitute the contingency r eductions in the unlikely event that the
State does not meet the RFP goals.

Failure to meet federal air quality standar ds is determined by monitored air quality values in the attainment year, and is therefore determined a fter the end of the attainment year. California's motor vehicl e emission control program allows ARB to provide additional emission r eductions each year, based on the increasing benefits of measures that are already bei ng implemented. Therefore, ARB proposes to include the
benefits of one additional year of its ongoing motor vehi cle program, including vehicle fleet turnover, and light-duty vehicle inspec tion and maintenance in the year following each area’s attainment year.

Contingencies for new technologies

In terms of contingency for a ttainment, additional provisions apply to extreme areas that include new technologies in their attainment plans. These attainment demonstration plans can rely on future advances in emissi on reduction technologies (referred to as new technologies) if the State, among other things, submits enforceable commitments to develop and adopt contingency measures if the anticipated technologies do not achieve the planned reductions, and if the St ate demonstrates that the contingency reductions shall be adequate to achieve atta inment and reasonable further progress.

These contingency reductions to back-up the new technology provisions are not due until three years before implementation of these new technology provisions. The need for technology development and long-term measur es, as well the process for identifying long-term emission reductions is discussed in Chapter 3.

Reasonable Further Progress and Contingency Demonstrations

The following descriptions for each nonattain ment area outline California’s RFP and related contingency reductions demonstrati ons. Since already-adopted measures provide all contingency reductions needed for RF P and attainment, the requirement that reductions will occur without any further action by ARB or local air dist ricts is fully met.

ARB staff reports for each nonattainment area will include demonstration of RFP and contingency reductions. Detailed charts providing the background for RFP and contingency reductions for South Coast, San Joaquin Valley, and Coachella Valley, can be found on pages 6-8 of this appendix. All three of these areas are expected to request a change in their nonattainment classifi cations – extreme for both South CoastMay 7, 2007 Appendix D 5 and San Joaquin Valley and severe-15 for Coac hella Valley. The charts reflect the anticipated nonattainment classifications.

South Coast

The South Coast meets its RFP targets through 2014 purely on the basis of ROG reductions from the existing control program. From 2017 fo rward, the South Coast will
need to use both ROG and NOx reductions fr om the existing control program. Reductions from proposed new measures are not needed to achieve the progress targets.

Adopted measures in the South Coast Ai r Basin are expected to yield enough
reductions to meet the RFP goals and will also yield a su rplus that will meet the contingency reduction require ments for the area.

San Joaquin Valley

The San Joaquin Valley meet s its RFP targets through bot h ROG and NOx reductions from the existing control pr ogram. Reductions from prop osed new measures are not needed to achieve the progress targets.

Adopted measures in the San Joaquin Vall ey are expected to yield enough reductions to meet the RFP goals and will also yield a surplus that will meet the contingency reduction requirements for the area.

Coachella Valley

Because the Southeast Desert 1-hour oz one nonattainment area did not have a federally-approved progress plan, the Coac hella Valley’s 8-hour RFP plan must demonstrate a 15 percent emission reduction from 2002 to 2008 by relying only on ROG reductions. The area meets this require ment. Expecting the South Coast District to request a bump up to the severe -15 classi fication for the Coachella Valley, progress is calculated through 2018. Upwind emi ssions of ROG have been used from Orange County, the portion of San Be rnardino County within the South Coast Air Basin, and the portion of Riverside County within South Coas t Air Basin. Upwind emissions of NOx
from these counties an d Los Angeles County hav e also been included.

Adopted measures in the Coachella Valley are expected to yield enough reductions to meet the RFP goals and will also yield a surplus that will meet the contingency reduction requirements for the area.May 7, 2007 Appendix D 6 Detailed Analysis of South Coast Reasonable Further Progr ess and Contingency (summer planning, tons per day)

2002 2008 2011 2014 2017 2020 2023

Baseline ROG 897.2 651.0 599.2 566.4 546.4 536.4 533.6 FMVCP/RVP Adjustment 0 0 0 0 0 0 0
RACT Corrections 0 0 0 0 0 0 0 Adjusted Baseline ROG 897.2 651.0 599.2 566.4 546.4 536.4 533.6
RFP commitment for ROG reductions
from new measures 0 0 0 0 0 0 Required % change since previous milestone year (ROG or NOx) compared to 2002 18% 9% 9% 9% 9% 9%

Required % change since 2002

(ROG or NOx) 18% 27% 36% 45% 54% 63%

Target ROG levels 735.7 655.0 574.2 493.5 412.7 332.0 Apparent shortfall in ROG -84.7 -55.8 -7.8 53.0 123.6 201.7 Apparent shortfall in ROG, % -9.4% -6.2% -0.9% 5.9% 13.8% 22.5% ROG shortfall previously provided by NOx substitution, % 0 0.0% 0.0% 0.0% 5.9% 13.8%

Actual ROG shortfall, % -9.4% -6.2% -0.9% 5.9% 7.9% 8.7%

Baseline NOx 1078.4 849.6 737.1 649.7 578.0 530.2 505.1 FMVCP Adjustment 0 0 0 0 0 0 0 Adjusted Baseline NOx 1078.4 849.6 737.1 649.7 578.0 530.2 505.1
RFP commitment for NOx reductions
from new measures 0 0 0 0 0 0 0

Change in NOx since 2002 228.9 341.3 428.7 500.5 548.2 573.3 Change in NOx since 2002, % 21. 2% 31.7% 39.8% 46.4% 50.8% 53.2% NOx reductions since 2002 already
used for RFP substitution and contingency through last milestone year, % 0.0% 3.0% 6.0% 9.0% 17.9% 28.7%

NOx reductions since 2002 available for RFP substitution and contingency in this milestone year, % 21.2% 28.7% 33.8% 37.4% 33.0% 24.4%

Change in NOx since 2002 used for
ROG substitution in this milestone year, % 0.0% 0.0% 0.0% 5.9% 7.9% 8.7%

Change in NOx since 2002 used for contingency in this milestone year, % 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%

Change in NOx since 2002 surplus after meeting substitution and contingency needs in this milestone year, % 18.2% 25.7% 30.8% 28.5% 22.1% 12.7%

Are RFP Requirements Met? yes yes yes yes yes yes
Are Contingency Reduction Requirements Met? yes yes yes yes yes yesMay 7, 2007 Appendix D 7 Detailed Analysis of San Joaquin Valley
Reasonable Further Pr ogress and Contingency (summer planning, tons per day)

2002 2008 2011 2014 2017 2020 2023

Baseline ROG 468.0 426.5 405.8 403.7 400.3 402.3 408.8 FMVCP/RVP Adjustment 0 0 0 0 0 0 0
RACT Corrections 0 0 0 0 0 0 0 Adjusted Baseline ROG 468.0 426.5 405.8 403.7 400.3 402.3 408.8
RFP commitment for ROG reductions
from new measures 0 0 0 0 0 0

Required % change since previous milestone year (ROG or NOx) compared to 2002 18% 9% 9% 9% 9% 9%

Required % change since 2002 (ROG or NOx) 18% 27% 36% 45% 54% 63%

Target ROG levels 383.8 341.6 299.5 257.4 215.3 173.2 Apparent shortfall in ROG 42.8 64.2 104.2 142.9 187.0 235.6 Apparent shortfall in ROG, % 9.1% 13.7% 22.3% 30.5% 40.0% 50.3% ROG shortfall previously provided by NOx substitution, % 0 9.1% 13.7% 22.3% 30.5% 40.0%

Actual ROG shortfall, % 9.1% 4.6% 8.5% 8.3% 9.4% 10.4%

Baseline NOx 642.30 567.67 493.11 419.55 362.24 321.68 295.14 FMVCP Adjustment 0 0 0 0 0 0 0 Adjusted Baseline NOx 642.30 567.7 493.1 419.5 362.2 321.7 295.1
RFP commitment for NOx reductions
from new measures 0 0 0 0 0 0 0

Change in NOx since 2002 74.6 149.2 222.8 280.1 320.6 347.2 Change in NOx since 2002, % 11.6% 23.2% 34.7% 43.6% 49.9% 54.0% NOx reductions since 2002 already
used for RFP substitution and contingency through last milestone year, % 0.0% 11.6% 16.7% 25.3% 33.5% 43.0%

NOx reductions since 2002 available
for RFP substitution and contingency in this milestone year, % 11.6% 11.6% 18.0% 18.3% 16.4% 11.1%

Change in NOx since 2002 used for
ROG substitution in this milestone year, % 9.1% 4.6% 8.5% 8.3% 9.4% 10.4%

Change in NOx since 2002 used for contingency in this milestone year, % 2.5% 3.0% 3.0% 3.0% 3.0% 3.0%*

Change in NOx since 2002 surplus after meeting substitution and contingency needs in this milestone year, % 0.0% 6.5% 9.4% 10.1% 7.0% 0.7%

Are RFP Requirements Met? yes yes yes yes yes yes
Are Contingency Reduction Requirements Met? yes yes yes yes yes yes**

* 2024 mobile source program reductions are relie d upon to meet 2023 contingency requirements. ** Contingency requirements met in 2023 through r eductions from already-adopted mobile source

measures.May 7, 2007 Appendix D 8 Detailed Analysis of Coachella Valley
Reasonable Further Pr ogress and Contingency (summer planning, tons per day)

2002 2008 2011 2014 2017 2018

Baseline ROG 379.3 299.9 282.0 271.4 265.9 265.0 FMVCP/RVP Adjustment 0 0 0 0 0 0

RACT Corrections 0 0 0 0 0 0 Adjusted Baseline ROG 379. 3 299.9 282.0 271.4 265.9 265.0
RFP commitment for ROG reductions from

new measures 0 0 0 0 0

Required % change since previous milestone year (ROG or NOx) compared to 2002 15% 9% 9% 9% 3%

Required % change since 2002

(ROG or NOx) 15% 24% 33% 42% 45%

Target ROG levels 322.4 288.3 254.1 220.0 208.6 Apparent shortfall in ROG -22.50 -6.29 17.32 45.92 56.39 Apparent shortfall in ROG, % -5.9% -1.7% 4.6% 12.1% 14.9% ROG shortfall previously provided by NOx substitution, % 0.0% 0.0% 0.0% 4.6% 12.1%

Actual ROG shortfall, % -5.9% -1.7% 4.6% 7.5% 2.8%

Baseline NOx 1159.3 917.2 794.6 697.2 618.1 597.4 FMVCP Adjustment 0 0 0 0 0 0 Adjusted Baseline NOx 1159.3 917.2 794.6 697.2 618.1 597.4

RFP commitment for NOx reductions
from new measures 0 0 0 0 0 0

Change in NOx since 2002 242.1 364.7 462.0 541.2 561.9 Change in NOx since 2002, % 20.9% 31.5% 39.9% 46.7% 48.5% NOx reductions since 2002 already used for RFP substitution and contingency through last milestone year, % 0.0% 3.0% 6.0% 13.3% 23.8%

NOx reductions since 2002 available for RFP substitution and contingency in this milestone year, % 20.9% 28.5% 33. 9% 33.4% 24.6%

Change in NOx since 2002 used for
ROG substitution in this milestone year, % 0.0% 0.0% 4.3% 7.5% 2.8%

Change in NOx since 2002 used for contingency in this milestone year, % 3.0% 3.0% 3.0% 3.0% 3.0%

Change in NOx since 2002 surplus after meeting substitution and contingency needs in this milestone year, % 17.9% 25.5% 26. 5% 22.9% 18.9%

Are RFP Requirements Met? yes yes yes yes yes

Are Contingency Reduction Requirements Met? yes yes yes yes yes