# THE CARL MOYER PROGRAM

GUIDELINES

Approved Revision 2005

Release Date: January 6, 2006



# California Environmental Protection Agency



# Air Resources 

# BoardIn memory of Dr. Carl Moyer (1937 - 1997)

This program is named in honor of the late Dr. Carl Moyer, whose extraordinary dedication, hard work, vision and leadership made this program possible. He created and masterminded this program, in a noble effort to unite business and government in the name of public interest to improve California’s air quality.

This update was a collaborative effort and has bene fited from the valuable contributions of the participating air districts. The ARB apprec iates the considerable efforts of district staff both in the development of these guidelines a s well as the day-to-day implementation of the Carl Moyer Program.

Disclaimer

Publication does not signify that the content refle cts the views and policies of the California Air Resources Board, nor does the mentio n of trade names or commercial products constitute endorsement or recommendation f or their use.EXECUTIVE SUMMARY

Air pollution is a serious problem for California. Over 90 percent of Californians live in areas that have unhealthful air at times. Air poll ution has been tied to serious health impacts. Studies have linked particulate pollution to premature death in the elderly and other vulnerable populations. Research also shows that children exposed to unhealthful levels of ozone, or smog, suffer decreased lung fun ction growth and increased asthma.

The California Air Resources Board (ARB), together with the 35 local air districts, is responsible for developing and implementing strateg ies to reduce air pollution and achieve health-based ambient air quality standards. Emission standards on new vehicles and engines help to reduce air pollution a s older sources are retired and replaced by newer, cleaner vehicles and engines. H owever, new emission standards alone will not solve California’s air pollution pro blem. Although older sources of pollution contribute a disproportionate share of em issions, there are technologies

available to reduce these emissions. Devices are a vailable that can reduce emissions from in-use vehicles and equipment by up to 85 perc ent, and new, low-emission engines equipment and vehicles are available that c an reduce emissions by 25 to 85 percent. However, reducing emissions from these in-use sources can be difficult. The Carl Moyer Memorial Air Quality Standards Attai nment Program (Carl Moyer Program) has proven to be an effective, cost-effective, and popular means of reducing emissions from existing pollution sourc es.

The Carl Moyer Program is a grant program, implemen ted by a partnership of ARB and local air districts, that funds the incremental cos t of cleaner-than-required engines, equipment, and other sources of pollution. Carl Mo yer Program grants provide early or

extra emission reductions. It can also accelerate the development and

commercialization of advanced emission control tech nology, accelerate the turnover rate of old equipment to newer and cleaner equipmen t, and help reduce costs to the regulated community. Projects to reduce emissions from on-road heavy-duty vehicles, idle reduction technologies, off-road diesel equipm ent, transportation refrigeration units, off-road spark-ignition equipment, marine vessels, locomotives, and agricultural engines have been eligible for grants. Legislative changes enacted in 2004 made projects to reduce emissions from other agricultural sources, l ight-duty vehicles, and on-road fleet modernization eligible for Carl Moyer Program fundi ng as well. These legislative changes also created a new incentive program aimed at previously unregulated agricultural sources, which ARB staff is proposing to call the Agricultural Assistance Program.

In its first six years, the Carl Moyer Program has provided $154 million in funding to clean up almost 7,000 engines statewide. The Carl Moyer Program has reduced about 18 tons per day of nitrogen oxides (NOx, a smog-for ming pollutant), and 1 ton per day of diesel particulate matter. The emission reducti ons funded through Carl Moyer Program grants are very cost-effective, about $3,000 per ton of NOx, comparing favorably to the cost-effectiveness of ot her air pollution regulations. Therecent legislative changes expand the focus of the Carl Moyer Program to additional

pollutants – reactive organic gases (which combine with NOx in the atmosphere to form smog) and particulate matter (which includes toxic diesel particulate matter). This change will allow the Carl Moyer Program to more co mprehensively address all of California’s air pollution challenges, including th e air toxic risk associated with emissions from diesel engines.

The legislative changes enacted in 2004 also provid ed increased and continued funding for the Carl Moyer Program and other incentive prog rams – up to $141 million a year statewide through 2015. Emission reductions achiev ed through the Carl Moyer Program are an important component of th e California State Implementation Plan (SIP) – the State’s federally-required road ma p to reducing emissions to meet the health-based ambient air quality standards. All em ission reductions funded with Carl Moyer Program funds must be real, surplus, qua ntifiable, and enforceable in order to be credited toward California’s obligations in t he SIP. These Guidelines describe project criteria to ensure that projects funded by the Carl Moyer Program achieve

SIP-creditable emission reductions. The Guidelines also formalize the administrative requirements for both ARB and the local districts t hat administer the Carl Moyer Program. Funding criteria for the Agric ultural Assistance Program are based on the Carl Moyer Program Guidelines, but the emission reductions under the Agricultural Assistance Program are not required to be surplus to regulatory requirements.

It is important to note that regulations will conti nue to be the primary means to reduce emissions to improve air quality. The incentives p rovided by the Carl Moyer Program, and other incentive programs, are intended to compl ement, not replace, these regulatory requirements. Although incentive progra ms can help reduce costs to the regulated community, there are simply not enough fu nds to purchase all the emission

reductions needed to achieve healthful air.

The Carl Moyer Program has proven to be immensely p opular in its first seven years, with the demand for grants routinely outstripping a vailable funds. The inclusion of additional project categories combined with increas ed funding will allow the Carl Moyer Program to more fully realize the potent ial of incentive programs to improve air quality in California. In order to assure that the Carl Moyer Program remains responsive to the challenges facing air pollution c ontrol today, ARB staff is committed to improve all aspects of the Program from the technic al data to the administrative requirements to customer service. Toward that end, ARB staff will update the technical information, as needed; encourage transparency in P rogram administration; and continue to explore ways to increase Program access ibility, especially to small

businesses.TABLE OF CONTENTS

EXECUTIVE SUMMARY

PART I – PROGRAM OVERVIEW AND ADMINISTRATIVE REQUIR EMENTS

Chapter One – Program Overview .....................

................................................... ........ I-1 Chapter Two – Administration of the Carl Moyer Prog ram........................................... II-1

PART II – PROJECT CRITERIA

Chapter One – Heavy-Duty On-Road Vehicles ..........

................................................... I-1 Chapter Two – Heavy-Duty On-Road Fleet Modernizatio n .......................................... II-1 Chapter Three – Reducing Idling Emissions from Heav y-Duty Vehicles..................... III-1 Chapter Four – Transport Refrigeration Units ......

................................................... ...IV-1 Chapter Five – Compression-Ignition Off-Road Equipm ent .........................................V-1 Chapter Six – Large Spark-Ignition Off-Road Equipme nt............................................VI-1 Chapter Seven – Airport Ground Support Equipment ... .............................................VII-1 Chapter Eight – Locomotives ........................

................................................... .........VIII-1 Chapter Nine – Marine Vessels......................

................................................... ..........IX-1 Chapter Ten – Agricultural Sources .................

................................................... .........X-1 Chapter Eleven – Light-Duty Vehicles...............

................................................... .......XI-1 Chapter Twelve – Zero-Emission Technologies........ .................................................XI I-1

PART III – AGRICULTURAL ASSISTANCE PROGRAM

PART IV – APPENDICES

Appendix A – Acronyms Appendix B – Tables for Emission Reduction and Cost -Effectiveness Calculations Appendix C – Cost-Effectiveness Calculation Methodo logy Appendix D – Example Calculations Appendix E – Description of Certification and Verif ication Executive Orders Appendix F – Retrofit Emission Control Strategies

# THE CARL MOYER PROGRAM GUIDELINES

PART I of IV

PROGRAM OVERVIEW AND ADMINISTRATIVE

REQUIREMENTS

Approved Revision 2005 November 17, 2005TABLE OF CONTENTS

Chapter One – Program Overview .....................

................................................... ........ I-1

Chapter Two – Administration of the Carl Moyer Prog ram........................................... II-1I-1 PROGRAM OVERVIEW Chapter One

PROGRAM OVERVIEW

The Carl Moyer Program Air Quality Standards Attain ment Program (“Carl Moyer Program”) enacted in Health and Safety Code (HSC) section 44275, et seq. is a grant program that funds the incremental cost of cleaner-than-required engines, equipment, and other sources of air pollut ion. Although air pollution regulations have significantly reduced emissions an d improved air quality across the State, many areas of California continue to experie nce unhealthful air. The Carl Moyer Program complements California’s regulat ory program by providing incentives to obtain early or extra emission reduct ions, especially from emission sources in environmental justice communities and ar eas disproportionately impacted by air pollution.

This document describes approved revisions to the C arl Moyer Program Guidelines to respond to legislation enacted in 2005, and to upda te the program to reflect current technical information and regulatory requirements f or vehicles, equipment, engines and other pollution sources in California.

I. Background

Since 1998, the Carl Moyer Program has provided gra nts to encourage the owners of heavy-duty diesel engines to go beyond regulatory r equirements by retrofitting, repowering, or replacing their engines with newer a nd cleaner ones. With the clean-up of about 7,000 old, high-emission engines, resultin g in about 18 tons per day of oxides of nitrogen (NOx) emission reductions throughout th e State, the Carl Moyer Program is a successful and popular air pollution program. Th e Carl Moyer Program offers critical

emission reductions that are needed to achieve heal th-based air quality standards and prevent the loss of federal transportation funds th roughout California. Although the Program has evolved, it retains its primary objecti ve of obtaining cost-effective and surplus emission reductions to be credited toward C alifornia’s legally-enforceable obligations in the State Implementation Plan (SIP) – California’s roadmap for attaining the health-based national ambient air quality stand ards. In addition, Carl Moyer Program grants accelerate the turnover r ate of old engines to newer and cleaner engines; accelerate the development and com mercialization of advanced, reduced-emission technology; and help reduce costs to the regulated community.

On January 1, 2005, new legislation (AB 923, Fireba ugh/Pavley) took effect, which expands the Carl Moyer Program to include additiona l pollutants, as well as additional sources of air pollution (HSC section 44275). The legislation requires the ARB to establish or update grant criteria (HSC section 442 83) and guidelines for covered projects, as revised by the bill, by January 1, 200 6.I-2 PROGRAM OVERVIEW

The Carl Moyer Program has been successfully implem ented through the cooperative efforts of the Air Resources Board (ARB or “Board”) and the local air pollution control and air quality management districts (“air district s” or “districts”). Each year, the ARB makes grant awards to air districts that apply for Carl Moyer Program funds to implement local programs. The air districts, follo wing the Guidelines criteria approved by the Board, provide grants to public and private entities for the incremental cost of cleaner-than-required engines and/or equipment. In implementing the Carl Moyer Program, local districts enjoy considera ble flexibility. For instance, districts may impose additional or more stringent eligibility requirements for projects in their districts. This flexibility allows air districts t o tailor the use of Carl Moyer Program funds to meet local air quality objectives.

Although the Carl Moyer Program is an important com ponent of California’s clean air plan, it is important to note that there are simply not sufficient public funds to purchase the emission reductions needed to provide healthful air. The Carl Moyer Program is not an easy path to compliance with regulatory requirem ents, but the Program can provide

financial incentives to those who are able to secur e early or extra emission reductions.

II. Legislative Changes

Three key pieces of legislation enacted in 2004 and 2005 provided increased and continued funding, and expanded the Carl Moyer Prog ram. These include Senate Bill 1107, Assembly Bill 923 (Firebaugh/Pavl ey), and Assembly Bill 1394 (Levine). In addition, on September 6, 2005, Gover nor Schwarzenegger signed Senate Bill 467 (Lowenthal) which requires the ARB to revise the Carl Moyer Program Guidelines to include projects in which an applican t turns in off-road equipment powered by an internal combustion engines and replaces that equipment with new zero-emission technologies. This legislation will take effect on January 1, 2006. ARB staff will evaluate how to incorporate the requirements of thi s legislation into the Carl Moyer Program in 2006.

A. Senate Bill 1107 (SB 1107)

As part of the fiscal year 2004-2005 budget, SB 110 7 adjusted the Smog Check fee while extending the newer-vehicle Smog Check exempt ion, securing about $7 million for consumer assistance in the Smog Check program and a bout $61 million in annual funding to be deposited in the Air Pollution Contro l Fund to fund the Carl Moyer Program “...to mitigate or remediate the h arm caused by the type of motor vehicle on which the fee is imposed” (HSC section 4 4091.1).

B. Assembly Bill 923 (AB 923)

AB 923 provided two additional sources of funding f or the Carl Moyer Program, and expanded the program to include new emission source s and new pollutants.I-3 PROGRAM OVERVIEW

This legislation adjusted the tire fee that is asse ssed on purchasers of new tires from $1.00 per tire to $1.75 per tire starting on Januar y 1, 2005. The tire fee is reduced to $1.50 per tire staring on January 1, 2007 (Public R esources Code section 42885). The adjustments to the tire fee will provide about $25 million for clean air programs like the Carl Moyer Program in fiscal year 2005-2006, decrea sing to $16 million a year from 2007 through 2015.

AB 923 also provided air district governing boards with the authority to approve a $2 increase in motor vehicle registration fees (“MV Fees”). The adjustment to the motor vehicle registration fee provides up to $55 million directly to the local air districts for four specific incentive programs, including projects eli gible for funding under the Carl Moyer Program, “...that the district determines remediate air pollution harms created by motor vehicles on which the surcharge is imposed.” The other three programs that may be funded with the $2 MV Fee are the purchase of new school

buses under the Lower Emission School Bus Guideline s [ARB, 2004], light-duty accelerated vehicle retirement or repair programs [ ARB, 2001], and a program targeted at previously unregulated agricultural sources – th e “Agricultural Assistance Program.” As directed by AB 923, the funding criteria for the Agricultural Assistance Program are based on the Carl Moyer Program Guidelines and appe ar in Part III of this document.

AB 923 expanded the Carl Moyer Program to include l ight-duty vehicle projects and agricultural sources of air pollution as defined in HSC section 39011.5(a). AB 923 also

directed ARB to consider emission reductions of rea ctive organic gases (ROG) and particulate matter (PM10) emissions, as well as NOx , when evaluating eligible projects. The legislation specifically directs ARB to develop a weighted cost-effectiveness to evaluate projects that obtain NOx, ROG and PM10 emi ssion reductions.

C. Assembly Bill 1394 (AB 1394)

AB 1394 (Levine) directed the ARB to broaden the Ca rl Moyer Program to include heavy-duty fleet modernization projects that reduce NOx and/or PM10 emissions through the replacement of old trucks. New criteri a are in these Guidelines so districts may select appropriate projects that would qualify for funding under the heavy-duty fleet modernization source category.

III. Summary of Guideline Revisions

A. Addition of ROG and PM10

With the enactment of AB 923, the Carl Moyer Progra m has expanded from a NOx-focused incentive program to include projects t hat also reduce ROG and PM10. This change allows the Carl Moyer Program to more c omprehensively address all of California’s air pollution challenges, including th e air toxic risk associated with emissions from diesel engines.I-4 PROGRAM OVERVIEW

Reactive organic gases combine in the atmosphere wi th NOx to form smog. Because different regions of the State require a different combination of ROG and NOx emission reductions to meet ambient air quality standards, t he inclusion of ROG in the Carl Moyer Program will allow local regions to tail or the Carl Moyer Program to more closely meet the requirements of their local SIP.

The addition of PM10 allows the Carl Moyer Program to respond to the major air quality challenge of diesel particulate matter. The ARB ha s identified particulate emissions from diesel-fueled engines as toxic air contaminant s (TACs), and reducing diesel particulate emissions is a priority for the ARB. I n October 2000, the ARB approved a comprehensive Diesel Risk Reduction Plan [ARB, 2000 ] to reduce diesel emissions from both new and existing diesel-fueled engines an d vehicles. The Plan is a roadmap that identifies the steps that ARB will be taking t o develop specific regulations to reduce diesel PM10 emissions. The ability to fund project s that reduce PM10 emissions will help ARB and districts reduce the risk associated w ith exposure to toxic diesel PM10.

Retrofit technologies to reduce PM10 emissions from diesel engines are becoming more widely available. These retrofit technologies include diesel oxidation catalysts, passive and active diesel particulate filters, flow -through filters, and fuel additives. A number of these retrofits have been verified by t he ARB and could be funded using Carl Moyer Program grants. Airborne toxic control measures (ATCMs) already require

some diesel-fueled sources to install retrofit devi ces. Fleets that are subject to these ATCMs may still qualify for Carl Moyer Program fund s if they install retrofits earlier than required so that the emission reductions achieved a re surplus to regulatory requirements.

B. New Cost-Effectiveness Formula to Include NOx, R OG and PM10

Emission Reductions

As discussed earlier, AB 923 requires the ARB to es tablish a weighted cost-effectiveness cap for Carl Moyer Program proje cts that reduce emissions of NOx, ROG and PM10. Cost-effectiveness for the Carl Moye r Program was previously based only on NOx emission reductions.

Cost-effectiveness is a measure of the dollars prov ided to a project for each ton of covered emission reductions. To calculate Carl Moy er Program cost-effectiveness, the project grant amount is annualized based on the pro ject’s life and an appropriate discount rate. This annual cost is then divided by the project’s estimated annual emission reductions. In order to consider NOx, ROG and PM10 emission reductions in one calculation, ARB staff weighted the emission re ductions to develop a “weighted

cost-effectiveness.”

For NOx and ROG emission reductions, a weighting fa ctor of one is used. Oxides of nitrogen and ROG are precursor emissions – that is they combine in the atmosphere with other emissions to form air pollutants such as ozone (smog) or secondary particulate matter. The relative importance of NOx , ROG and other precursor emissionsI-5 PROGRAM OVERVIEW

in the formation of smog and PM depends on many fac tors including location, temperature, geographic features, and the concentra tion of other pollutants. In order to accurately reflect the actual role of NOx and ROG, the weighting factors would have to be adjusted for each individual air basin. Histori cally, the ARB has treated NOx and ROG emissions equally. For example, the cost-effec tiveness of ARB’s regulations is generally provided in dollars per ton of NOx + ROG, with no weighting factors. The Carl Moyer Program follows the same approach and, thus, NOx and ROG emission reductions carry a weighting factor of one in the w eighted cost-effectiveness formula.

ARB staff believes it is appropriate for emission r eductions of combustion PM10 to carry additional weight in the calculation because, for a n equivalent weight, these emissions

are more harmful to human health. Non-combustion P M10 is not included in the weighted cost-effectiveness formula at this time be cause specific project criteria for non-engine projects have not yet been developed.

ARB staff considered a range of weighting factors f or combustion PM10, ranging from

10 to 30. In Carl Moyer Program Advisory: # 05-001 (December 20 , 2004), the staff weighted combustion PM10 emission reductions by 10 on an interim basis based on the

cost to control combustion PM10 in the Solid Waste Collection Vehicle ATCM [ARB, 2003a]; that is, a weighting factor of 10 wou ld offset the increased cost of reducing an equal amount of combustion PM10 emissio ns compared to the emissions of ozone precursors such as NOx. Based on an evalu ation of a broader range of diesel ATCMs, staff found that the current cost to control PM10 is about 15 times the cost to control the ozone precursors NOx and ROG.

ARB staff also evaluated the relative health benefi ts of reducing NOx emissions and reducing PM10 emissions. ARB staff estimated the m onetary benefits by considering health endpoints that could be expected from reduci ng a given amount of combustion PM10 emissions, including premature deaths, asthma related emergency room visits, work loss days, and minor restricted activity days. Staff estimated monetary values for

these benefits based on various economic values est ablished for these health endpoints by both the U.S. EPA and the ARB [U.S. EPA, 2000a; U.S. EPA, 2000b; U.S. EPA, 2003; U.S. EPA, 2004; ARB, 2003b]. Based on this e valuation, the health benefits of reducing one ton of PM10 outweighed the health bene fits of reducing one ton of NOx by

about 30 times.

Based on the staff’s evaluation, as well as discuss ions with stakeholder groups, combustion PM10 is weighted by 20 times. Staff bel ieves that this weighting factor balances the objective of the Carl Moyer Program to obtain SIP-creditable emission reductions while also reducing the risk associated with toxic diesel particulate matter.

Thus, the formula for weighted cost-effectiveness i s:

Annualized Cost ($/year)
(NOx reductions + ROG reductions + 20 x combustion PM10 reductions) (tons/year)I-6 PROGRAM OVERVIEW

Some stakeholders also suggested incorporating expo sure, particularly to sensitive receptors such as school children, into the cost-ef fectiveness calculation. After considering the nature of mobile source projects wh ich travel throughout local air districts, and sometimes the entire state, and the potential difficulties associated with assessing the location, timing, and duration of emi ssions of each individual Carl Moyer Program project, it was decided not to i ncorporate exposure into the

cost-effectiveness calculation at this time.

Although the weighted cost-effectiveness formula do es not incorporate exposure, it

should be noted that local districts have the discr etion to use project selection criteria that account for exposure. In addition, local dist ricts with a population of over one million must have a method in place to provide for the expenditure of 50 percent of Carl Moyer Program (HSC section 43023.5) funds for projects that operate or are based in environmental justice areas.

C. Administrative Requirements

To ensure the best use of public funds and continue d public confidence, the Carl Moyer Program must have clearly defined admini strative responsibilities and oversight. The administrative criteria formalize e xisting practices and policies, and contain minimum requirements that ARB and local air districts must follow to continue implementing a successful statewide Carl Moyer Prog ram based on the requirements of the Health and Safety Code. The requirements ident ify ARB’s responsibilities pertaining to program oversight, audits, and recapture of dist ricts’ funds. They also identify the minimum requirements that districts must include in their local programs so ARB can

document the districts’ success and determine if fu nds need to be recaptured.

D. Agricultural Sources

The Carl Moyer Program has funded the clean-up of o ver 2,000 agricultural engines. AB 923 expanded the source categories that are elig ible for Carl Moyer Program funding to include agricultural sources of air poll ution as defined in HSC section 39011.5(a). This definition includes stationary an d area-wide sources of pollution including engines, livestock operations, and other agricultural activities.

The Guidelines respond to the legislative direction by including projects to reduce emissions from internal combustion engines that are agricultural sources. However, project criteria for non-engine agricultural projec ts have not been proposed at this time.

The Board has directed the Executive Officer develo p and approve project criteria for non-engine agricultural sources when technology is available to ensure that the emission reductions are real, surplus, quantifiable , and enforceable. If these projects include reductions of non-combustion PM10, the crit eria will include a weighting factor

for non-combustion PM10 for use in the cost-effecti veness formula.I-7 PROGRAM OVERVIEW

E. Agricultural Assistance Program

AB 923, in HSC section 44229, also creates an oppor tunity to provide incentives to fund new purchases, retrofit, repower, or add-on equipme nt for previously unregulated sources of air pollution. ARB staff is referring t o this new program as the “Agricultural Assistance Program”. AB 923 allows a portion of th e $2 MV Fees to be used to fund this program. One major difference from the Carl M oyer Program is that Agricultural Assistance Program projects are not required to ach ieve surplus emission reductions. The HSC requires that Agricultural Assistance Progr am projects comply with the Carl Moyer Program Guidelines. Based on this statu tory guidance, the Agricultural Assistance Program is modeled on the Carl Moyer Pro gram Guidelines. Agricultural Assistance Program projects are limited to those fo r which the Board has approved Carl Moyer Program Guidelines. Guidelines for stat ionary and portable agricultural engines are included. Guidelines for non-engine pr ojects, such as dairies, are not included at this time, but will be developed by ARB staff, in consultation with interested stakeholders, when technologies for such projects b ecome available.

F. Light-Duty Vehicle Program

AB 923 authorizes the districts and the ARB to fund projects to reduce emissions from light-duty vehicles under the Carl Moyer Program (H SC section 44275). Light-duty vehicle projects are initially limited to voluntary accelerated vehicle retirement (VAVR) programs that meet the ARB’s VAVR regulations. The option of using remote sensing devices (RSDs) to identify high emitting vehicles t hat can be targeted for voluntary early retirement and is taking a two-step approach to int egrate RSD into the Carl Moyer Program and the VAVR regulation is also an option. As a first step, the ARB has authorized a RSD-based “High-Emitting Vehicle Ident ification, Repair, and Scrapping Program” to be run by the South Coast Air Quality M anagement District during 2005 and 2006. The ARB will use the data from this proj ect to revise the VAVR regulation and these guidelines in 2006. After the ARB revise s the regulation and the Carl Moyer Program Guidelines to fully incorporate RSD, any di strict that chooses to would be able to develop and implement RSD-based VAVR programs.

G. On-Road Fleet Modernization Program

AB 1394 expanded the Carl Moyer Program to include on-road fleet modernization (HSC section 44297), which is the replacement of an old, high-polluting, heavy-duty vehicle, which was not likely to be replaced on its own, with a cleaner vehicle. Fleet modernization provides incentive funds to truck own ers that typically do not have the financial resources to buy a newer, cleaner vehicle . Incentives offset part of the cost of the newer, lower polluting vehicle. ARB staff has incorporated a heavy-duty vehicle fleet modernization component into the Carl Moyer P rogram.I-8 PROGRAM OVERVIEW

H. Zero-Emission Projects

Zero-emission technology, such as electric equipmen t, is a key element of California's long-term plan for attaining health-based air quali ty standards. Zero-emission technology is able to provide major reductions of N Ox, ROG, and PM10 emissions, as well as reductions in emissions of TACs and greenho use gases. In addition, electric equipment will remain emission-free throughout its life. Yet, despite these attributes, and the fact that electric technologies are ideally suited for a number of Carl Moyer Program projects, there have been relati vely few zero-emission projects funded through Carl Moyer Program grants. District s are now required to encourage zero-emission projects. Each district may choose h ow to encourage zero-emission projects. Options include, but are not limited to, a funding set-aside, priority processing, or additional outreach. ARB staff has also develop ed a Zero-Emission Project chapter in these Guidelines to highlight potential projects

.

I. Streamlining Program Administration for Small Bu sinesses

ARB staff is committed to work with local air distr icts to evaluate ways to improve the efficiency of the Carl Moyer Program. Improved pro gram efficiency would benefit all applicants seeking Carl Moyer Program grants, but m ay be especially beneficial for

small businesses.

As part of this effort, ARB staff will work with th e South Coast Air Quality Management District staff to develop a program next year to ex amine the feasibility of a rebate or voucher program to streamline and expedite fund dis bursement. Based on the results of this program, ARB staff will evaluate whether a rebate or voucher program can be implemented statewide. If feasible, ARB staff will develop specific criteria for rebate or voucher programs to be incorporated in the next Car l Moyer Program Guideline revision. Prior to the next Guideline revision, AR B staff may also provide interim guidance to districts on how to implement a rebate or voucher program.

J. Other Revisions

In addition to the revisions specifically discussed above, the Carl Moyer Program guideline revision also contains other criteria tha t are specific to each project category. These revisions reflect input from the public and a ir districts, as well as new statutory requirements.

The Guidelines adjust the cost-effectiveness cap fr om $13,600 per ton of NOx to $14,300 per ton of weighted NOx, ROG, and combustio n PM10 emissions to account for an approximately 5 percent inflation rate from 2003 to present. This number is based on the California average Consumer Price Inde x [U.S. BLS, 2005]. A discount rate of 4 percent is used to calculate the capital recovery factors in determining the annualized cost of Carl Moyer Program grants provid ed for a project. This number is based on the average annual yields for U.S. Treasur y securities, averaged fromI-9 PROGRAM OVERVIEW

January 2005 through August 2005, with a 3-year, 5- year, 7-year, and 10-year maturation [U.S. FRB, 2005].

Additionally, the revisions also reflect the curren t regulatory environment, new technology, and potential projects. These project criteria, along with program administration criteria and updated emission rates are discussed in more detail in each chapter of the Guidelines.

IV. References

ARB, 2000. Risk Reduction Plan to Reduce Particula te Matter Emissions from Diesel-Fueled Engines and Vehicles. http://www.arb.ca.gov/diesel/documents/rrpFinal.pdf

ARB, 2001. Staff Report: Initial Statement of Rea sons. Proposed Amendments to Air Resources Board Voluntary Accelerated Vehicle Retir ement Regulations – Minimize Differences Between ARB and BAR VAVR Regulations an d Allow Parts Recycling and

Resale of Non-Emission Related and Non-Drive Train Parts. http://www.arb.ca.gov/regact/vavr/isor.pdf

ARB, 2003a. Staff Report: Initial Statement of Re asons. Proposed Diesel Particulate Matter Control Measure for On-Road Heavy-Duty Resid ential and Commercial Solid Waste Collection Vehicles. http://www.arb.ca.gov/r egact/dieselswcv/isor.pdf

ARB, 2003b. Final Research Report: The Economic V alue of Respiratory and Cardiovascular Hospitalizations, May 31, 2003. ftp://ftp.arb.ca.gov/carbis/research/apr/past/99-32 9.pdf

ARB, 2004. Lower-Emission School Bus Program – Fin al Revised Guideline Addendum. http://www.arb.ca.gov/msprog/schoolbus/2 004final.pdf

U.S. BLS, 2005. Consumer Price Index – All Urban C onsumers, http://data.bls.gov/cgibin/surveymost , U.S. Department of Labor, Bureau of Labor Statist ics, August 2005.

U.S. EPA, 2000a. Regulatory Impact Analysis: Heav y-Duty Engines and Vehicle Standards and Highway Diesel Fuel Sulfur Control Re quirements, December 2000. EPA-420-R-00-026. Office of Air Radiation, Researc h Triangle Park, NC

U.S. EPA, 2000b. Cost of Illness Handbook. http:/ /www.epa.gov/oppt/coi/view.html

U.S. EPA 2003. Draft Regulatory Impact Analysis: Control of Emissions from Nonroad Diesel Engines, April 2003, EPA-420-R-03-008, Offic e of Transportation and Air Quality.

U.S. EPA, 2004. Final Regulatory Impact Analysis: Control of Emissions from Nonroad Diesel Engines, May 2004, EPA-420-R-04-007, Office of Transportation and Air Quality.I-10 PROGRAM OVERVIEW

U.S. FRB, 2005. Federal Reserve Statistical Releas e, H.15, Selected Interest Rates, http://federalreserve.gov/Releases/H15/data.htm , U.S. Federal Reserve Board, Release date: September 19, 2005.II-1 PROGRAM ADMINISTRATION Chapter Two

ADMINISTRATION OF THE CARL MOYER PROGRAM

The Carl Moyer Program has been successfully implem ented through the cooperative efforts of the Air Resources Board (ARB) and the lo cal air pollution control and air quality management districts (districts). Health a nd Safety Code (HSC) section 44286 authorizes ARB to make grant awards to local air di stricts that apply for funds to implement a local Carl Moyer Program. The ARB has ultimate oversight responsibility for the statewide Carl Moyer Program. The district s implement their local programs in accordance with the guideline criteria approved by ARB. These Guidelines are binding and enforceable. The ARB provides the districts wi th flexibility in implementing the program, including the authority to implement stric ter criteria based on their local air pollution challenges and air quality goals.

The ARB’s goal is to administer the Carl Moyer Prog ram stringently enough to ensure emissions benefits are realized, while maintaining enough flexibility to allow for ease in district and applicant participation and maintainin g enough transparency for public scrutiny. The ARB has followed the requirements of HSC sections 44287 through 44297 in determining and reporting the success of l ocal districts’ programs. For each funding cycle, the districts are currently required to report to ARB three times during the two-year period, in order for ARB staff to track lo cal progress in spending the Carl Moyer Program funds. With continued funding i ncreasing up to $140 million per year from all funding sources through 2015, it is c ritical to track funds from the point the district applies for funds from ARB, through the po int the local district pays for a project, and during project implementation. This chapter fo rmalizes the minimum requirements

that ARB and local air districts must follow to con tinue implementing a successful statewide Carl Moyer Program. The chapter is desig ned to outline ARB’s responsibility pertaining to program oversight, audits, and recapt ure of districts’ funds. It also provides the minimum requirements that districts mu st include in their local programs so ARB can document and publicly report the districts’ success and failures, and determine if there is a need to recapture Carl Moyer Program funds.

I. Administrative Terminology

Carl Moyer Program Funds. Carl Moyer Program funds include both the state fu nds awarded by the ARB (as provided by statute) and dis trict matching funds.

Contract. A contract, grant, or other legally binding agreeme nt used by a district to obligate and expend funds for a project funded thro ugh the Carl Moyer Program.II-2 PROGRAM ADMINISTRATION

II. Funding Sources and Types of Carl Moyer Project s

A. New Carl Moyer Program Funding Sources

Two key pieces of legislation enacted in 2004 have expanded the Carl Moyer Program and brought an increased, continued source of annua l funding through 2015. These are Senate Bill 1107and Assembly Bill 923 (Firebaugh/Pa vley).

1. Senate Bill 1107 (SB 1107)

As part of the fiscal year 2004-2005 budget, this l egislation adjusted the Smog Check fee while extending the newer-vehicle Smog Check ex emption, securing about $7 million for consumer assistance in the Smog Chec k program and about $61 million in annual funding to be deposited in the Air Pollution Control Fund to fund the Carl Moyer Program “... to the extent that the state board or a participating district determines that the moneys are expended to mitigate or remediate the harm caused by the type of motor vehicle on which the fee is impos ed” (HSC, section 44091.1).

The adjustment to the Smog Check fee is imposed on vehicles that are subject to biennial smog checks. Vehicles subject to the Smog Check Program include gasoline-powered passenger cars, light-duty trucks, medium-duty trucks, and heavy-duty trucks. These vehicles emit about 620 t ons per day (tpd) of NOx, 400 tpd of ROG, and 13 tpd of PM10 emissions. It is the harms caused by these automotive pollutants that the fees will be used to mitigate. Under the Smog Check Program, vehicles are required to be tested every two years to measure the levels of NOx, hydrocarbon (HC), and carbon monoxide (CO) emission s. Vehicles exceeding the allowed emission thresholds are required to be repa ired prior to being able to renew their registrations with the Department of Motor Ve hicles. Vehicles powered with diesel engines are not subject to the Smog Check Program.

Gasoline engines generally do not produce as many N Ox and PM10 emissions as diesel engines. On a per mile driven basis, the AR B’s emission inventory shows that heavy-duty diesel trucks emit about 22 times the NO x, 21 times the PM10, and 1.5 times the ROG emissions compared to gasoline-po wered vehicles subject to the Smog Check Program (see Table 2-1). In addition t o heavy-duty diesel trucks, other heavy-duty diesel engines and pollution sources als o contribute significantly to NOx, ROG, and PM10 emissions.

Particulate matter emissions from both gasoline-pow ered vehicles and heavy-duty diesel vehicles are formed in the combustion proces s and are dominated by fine PM. Strong links have been demonstrated between elevate d fine particulate levels and premature deaths, hospital admissions, emergency ro om visits, and asthma attacks [ARB, 2002]. In addition, regardless of their orig in, whether from light-duty gasoline-powered vehicles or other sources, NOx and ROG emissions react in the atmosphere to form ozone. Ozone is a powerful oxid ant that can damage the respiratory tract, causing inflammation and irritat ion, and induces symptoms such asII-3 PROGRAM ADMINISTRATION

coughing, chest tightness, shortness of breath, and worsening of asthma symptoms [ARB, 2005]. Recent evidence has, for the first ti me, linked the onset of asthma to exposure to elevated ozone levels in exercising chi ldren [McConnell, 2002]. Light-duty

vehicles are one of a multitude of sources that emi t both NOx and ROG; a strategy that effectively reduces these emissions, no matter from what source, would reduce the harm caused by motor vehicles and have positive hea lth benefits for the people of California, and particularly for sensitive groups, including young children.

Table 2-1 NOx, ROG, and PM10 Emissions from Vehicles Subject to the Smog Check

Program and Heavy-Duty Diesel Trucks for 2005

(grams per mile)

Pollutants “Smog-Check” Vehicles Heavy-Duty Diesel Trucks

NOx 0.7 15.2

ROG 0.4 0.7

PM10 0.015 0.32

Source: EMFAC2002_v2.2, April 23, 2003

Gasoline-powered vehicles, particularly light-duty vehicles, in California are already subject to the most stringent emission standards in the nation. It is challenging to obtain

additional emission reductions from individual new vehicles over these already extremely low emission levels. In-use emissions fr om existing gasoline-powered vehicles are significant, especially from older veh icles, due to deterioration and as a result of mal-maintenance. However, in-use emissio ns already are being addressed through the Smog Check Program as well as the vehic le repair and scrap program being operated by the Bureau of Automotive Repairs (BAR) (HSC, sections 44100-44122, in part).

As discussed earlier, AB 923 expanded the Carl Moye r Program to allow funding for projects to reduce emissions from light-duty vehicl es (HSC, section 44275). Thus, project criteria have been developed for funding li ght-duty vehicle projects through the voluntary accelerated vehicle retirement program. ARB staff will also participate in a program that is being planned for 2006 in the South Coast Air Basin to evaluate a remote sensing program to detect gross-polluting ve hicles. Staff believes that the programs described above, both for the BAR program and the ARB Carl Moyer Program, for light-duty vehicles represent adequate and reasonable efforts to reduce emissions from this class of vehicles. As staff ga ins more information on the

accelerated vehicle retirement and the remote sensi ng programs, staff plans to revisit this category and will revise the funding criteria for these projects to more fully incorporate them in the Carl Moyer Program.

Based on the discussion presented above, maximum an d cost-effective emission benefits to mitigate the harms caused by light-duty vehicles would be obtained if funds from the adjustment to the Smog Check fee, as provi ded for by SB 1107, are used toII-4 PROGRAM ADMINISTRATION

reduce emissions from other sources of the same pol lutants as automobiles produce. This approach would most expediently and effectivel y reduce NOx, ROG, and PM10

emissions and would serve the best interests of the people of California. Local air districts have the authority to select projects tha t would most effectively reduce NOx, ROG, and PM10 emissions in their local area.

2. Assembly Bill 923 (AB 923)

This legislation introduced significant revisions t o the Carl Moyer Program, including two new funding sources for the Carl Moyer Program – th e adjustment to the tire fee and an allowance for an increase to the motor vehicle regi stration fee.

Increase in Tire Fee. Assembly Bill 923 adjusted the tire fee that is ass essed on purchasers of new tires from the current $1.00 per tire to $1.75 per tire starting January 1, 2005. The tire fee is reduced to $1.50 per tire staring on and after January 1, 2007 (Public Resources Code, section 428 85). The adjustments to the tire fee translate to about $25 million available for th e Carl Moyer Program in 2005-2006, and $16 million from 2007 on.

The legislation requires a portion of the revenues generated by the tire fee to be deposited in the Air Pollution Control Fund for use by the ARB and the air districts. AB 923 also requires the ARB to expend or allocate the portion of the tire fee adjustment that is directed to the Air Pollution Co ntrol Fund to fund programs and projects that mitigate or remediate air pollution c aused by tires in the state, to the extent that the state board or the applicable district det ermines that the program or project remediates air pollution harms created by tires upo n which the fee described in Section 42885 is imposed” (Public Resources Code, s ection 42889).

Air pollutants generated through tire wear are part iculate matter whose composition is directly related to the constituents and processes used to manufacture the new tire. Tires are manufactured using a mixture of natural r ubber; styrene-butadiene synthetic rubber; carbon black; molecular sulfur and sulfur c ompounds; silicone elastomers; phenolic resin; aromatic, naphthenic, and paraffini c oils; petroleum waxes; zinc oxide, titanium dioxide and other metals; fatty acids and inert materials. Carbon blacks typically contain varying quantities of adsorbed by -products from the production processes, particularly aromatic compounds. Typica l classes of chemicals adsorbed onto the carbon black surface are carcinogenic poly cyclic aromatic hydrocarbons (PAHs), nitro-derivatives of PAHs and sulfur-contai ning PAHs. The presence of these compounds can significantly increase the hazards of carbon black exposure. Some of these compounds have been identified by the ARB as TACs.

The legislative intent of the portion of the tire f ee as expressed in AB 923 is to reduce PM and TAC emissions to improve air quality for Cal ifornians. Elevated PM emissions have been linked to premature deaths and other heal th ailments, such as asthma attacks. Fine PM, regardless of source, can bypass the body’s defense mechanism and can embed deep in the lungs. Ongoing studies have indicated that particulate matterII-5 PROGRAM ADMINISTRATION

pollution may significantly reduce lung function gr owth in children [Peters et al. 2001, Avol et. al. 2001, Gauderman et al. 2002] and that exposure to diesel PM could also cause lung cancer [ARB, 2002].

Technologies used to reduce PM emissions from tires generally involve strategies to reduce tire wear. This could be accomplished eithe r through the use of high-mileage tires or by maintaining proper tire pressures. Alt hough high-mileage tires have been available for a number of years, they have been mar keted principally for their high-mileage attribute rather than for their potent ial to reduce PM emissions. Similarly, although tire manufacturers have informed consumers on the benefits of maintaining proper tire pressures in terms of prolonging tire l ife and improving fuel economy, they have not engaged in presenting the impacts of impro per tire inflation on PM emissions.

Existing criteria for funding Carl Moyer Program pr ojects are based on the net emission benefits of using a low-emission engine or advanced technology compared to a conventional engine or technology. In the case of tires, it is very difficult to accurately quantify the emission benefits of using high-mileag e tires versus conventional tires. Although basic information on tire wear is known, f actors affecting tire wear PM emissions specific to the types of tires currently available, such as high mileage tires, conventional tires, high performance tires, as well as other specialty tires, have not been developed. Tire wear is also dependent on mat erial and manufacturing process, as well as operational conditions, such as vehicle speed, load, tire pressures, and road

conditions.

Because of these factors, the potential emission be nefits of high-mileage tires compared to conventional tires, or due to maintaini ng proper tire inflation, are very difficult to quantify accurately and to enforce. S ince the primary objective of the Carl Moyer Program is to obtain surplus emission re ductions, and because of the uncertainty in the actual emission benefits of thes e strategies, criteria for projects that reduce tire wear cannot be developed for this Guide lines revision. ARB staff will continue to evaluate the potential for these projec ts to receive Carl Moyer Program funding as technologies to reduce tire wear emissio ns continue to be developed so that we can accurately quantify the emission benefits.

Since projects to reduce tire wear cannot be evalua ted using traditional Carl Moyer Program criteria, the funds associated w ith the tire fee will be used on projects that remediate the harms caused by PM and TAC emissions generally, since these emissions are caused by tires.

Potential $2 Motor Vehicle Registration Fee Increas e ($2 MV Fee). AB 923

amended the HSC to authorize districts in non-attai nment areas to increase the motor vehicle registration fee surcharge, currently autho rized up to $4 to fund specified air district activities to implement the California Cle an Air Act, by up to $2, provided air district governing boards formally approve the incr ease. Health and Safety Code section 44229 (b) directs the districts to use the $2 MV Fee increase to implement anyII-6 PROGRAM ADMINISTRATION

or all of the following four programs “...that the di strict determines remediate air pollution harms created by motor vehicles on which the surcharge is imposed”:

• Projects eligible for grants under the Carl Moyer Program.

• The new purchase, retrofit, repower, or add-on equ ipment for previously unregulated agricultural sources of air pollution, for a minimu m of three years from the date of adoption of an applicable rule or standard, or unti l the compliance date of that rule or standard, whichever is later. The ARB is calling t his program the “Agricultural Assistance Program.”

• The new purchase of school buses pursuant to the L ower-Emission School Bus Program.

• An accelerated vehicle retirement or repair progra m.

If each eligible district chose to use the entire $ 2 increase to fund the Carl Moyer Program, the adjustment to the motor veh icle registration fee could provide up to $55 million directly to the local air distric ts for the Carl Moyer Program. Motor vehicles subject to the registration fee surcharge include all on-road vehicles, e.g. light-duty, medium-duty, and heavy-duty vehicles. On-road vehicles are major contributors of NOx, ROG, and PM10 emissions. As s hown in Table 2-2, these vehicles emit about 1,518 tons per day of NOx, 772 tons per day of ROG, and 50 tons per day of PM10 in 2005. As discussed in previous sections, s trong links have been demonstrated between elevated fine particulate levels and premat ure deaths, hospital admissions, emergency room visits, and asthma attacks [ARB, 200 2]. In addition, NOx and ROG emissions react in the atmosphere to form ozone, a powerful oxidant that can damage the respiratory tract, causing inflammation and irr itation, and induces symptoms such as coughing, chest tightness, shortness of breath, and worsening of asthma symptoms [ARB, 2005]. On-road vehicles are one of a multitu de of sources that emit the NOx, ROG, and PM10 emissions that cause these harms. In addition to heavy-duty diesel trucks, other heavy-duty diesel engines and polluti on sources also contribute significantly to NOx, ROG, and PM10 emissions. As shown in Table 2-2, these other mobile sources emit about 908 tons per day of NOx, 436 tons per day of ROG, and 69 tons per day of PM10 in 2005. A strategy that e ffectively reduces these emissions, no matter from what sources, would reduce the harms caused by motor vehicles and have positive health benefits for the people of Cal ifornia, particularly for sensitive groups, including young children.II-7 PROGRAM ADMINISTRATION Table 2-2 NOx, ROG, and PM10 Emissions from

On-Road Mobile and Off-Road Mobile Sources for 2005

(tons per day)

Pollutants On-Road Mobile Off-Road Mobile

NOx 1518 908

ROG 772 436

PM10 50 69

Source: The California Almanac of Emissions and Ai r Quality, 2005 Edition

B. Outreach Funds

The ARB sets aside up to two percent of the total C arl Moyer Program annual funding for local air district outreach to implement their local program. These funds are

distributed to each district based on the annual al location of project funds that a district

receives. Administrative funds shall be used for d irect costs associated with the tasks outlined in this chapter and must be documented by the district. Examples of such costs and the documentation required are:

• Staff time to complete the tasks outlined in this chapter. The staff time shall be

documented with time sheets.

• If consultants are used to assist districts in adm inistering their local programs, consultant fees may also qualify. They shall be do cumented with a contract and

invoices.

• Printing, mailing and travel costs directly associ ated with the implementation of the Carl Moyer Program may also qualify. These costs s hall be documented with receipts and/or invoices.

C. Matching Funds

The district matching fund requirement is important because it provides a literal “buy-in” from the districts responsible for the selection, m onitoring, and enforcement of the projects. This requirement helps ensure that the m ost worthwhile projects are selected and that more funds are available for clean air pro jects.II-8 PROGRAM ADMINISTRATION 1. Match Fund Formula

Currently districts participating in the Carl Moyer Program are required to provide $1 in match funding for every $2 of state Carl Moyer Prog ram funding awarded by ARB, with a cap on statewide match funds at a total of $12 mi llion. The formula provided below is used to determine each district’s required matching funds.

District’s annual allocation * $12,000,000 [Current annual funding level - (ARB & district adm in./outreach funds + 10% holdback)]

The ARB recognizes the fiscal realities, especially for rural districts, which make it a challenge to meet matching fund requirements of the Carl Moyer Program. Currently, a district receiving the minimum grant award of $200, 000 may request a waiver of the match fund requirement provided the district can de monstrate appropriate staff commitment for program implementation and administr ation. The ARB staff works closely with local district staff to determine the proper level of commitment necessary based on previous history of projects funded and pe rformance.

2. Sources of Matching Funds and Allowable Expendit ures

Districts have a variety of local funds under their fiduciary control that can be used to meet their match fund requirement. Districts are a llowed to meet their matching fund requirement on an overall program basis, rather tha n a project-by-project basis. This allows the districts the flexibility to fund worthw hile clean air projects from a variety of targeted funding sources.

AB 2766 - $4 Surcharge on Motor Vehicle Registratio n Fees ($4 MV Fee). Many districts receive funds from a $4 surcharge on moto r vehicle registration fees. Funds generated by the $4 MV Fee must be used for project s that reduce emissions from

motor vehicles and infrastructure when it serves Ca rl Moyer Program motor vehicle projects [ARB, 1998]. Table 2-3 below gives a part ial list of motor vehicles that are eligible to be funded by the $4 MV Fee. The non-mo tor vehicles listed below are not eligible project categories for motor vehicle regis tration fee funds.II-9 PROGRAM ADMINISTRATION Table 2-3

Motor Vehicles vs. Non-Motor Vehicles

Motor Vehicles Non-Motor Vehicles

Automobiles Locomotives

Trucks Aircraft Buses Lawn mowers (non-riding)

Vans Leaf blowers Road graders Refrigeration units

Earth movers Chain saws Tractors Auxiliary generators Golf carts Welding machines Motorcycles Pleasure craft Self-propelled harvesters Cranes

Forklifts Marine vessels Sweepers Stationary agricultural engines Motorized Bicycles Bicycles

AB 923 – $2 MV Fee. As previously discussed, statewide the $2 MV Fee could generate up to $55 million annually if local govern ing boards approve the adjustment. As indicated in HSC sections 41081(d), 44225 and 44 229(b), districts approving the adjustment must use those funds in one of the four areas previously discussed.

If districts use the $2 MV Fee to pay for projects that meet the Carl Moyer Program criteria (including infrastructure in support of a Carl Moyer Program-funded motor vehicle project) or light-duty accelerated vehicle retirement and repair programs that meet the Carl Moyer Program Guidelines, those funds count toward a district’s match fund requirement. Emission reductions generated fr om projects in both categories are considered to be surplus. Note that projects paid for under the Agricultural Assistance Program do not need to meet the criteria that all f unded emission reductions must be “surplus” to those reductions required by law, alth ough other Carl Moyer Program criteria, however, must be met. In addition, proje cts paid for under the Lower Emission School Bus Program also do not have to be surplus n or do they have to meet the cost-effectiveness criteria under the Carl Moyer Pr ogram. Hence, only funds from the $2 MV Fee that are used on projects that meet the C arl Moyer Program Criteria may count toward the district’s match funding requireme nt.

Since the Health and Safety Code requires districts to use the $2 MV Fee on projects in four specified areas, it is necessary for ARB to mo nitor and document that public funds are being spent as intended by law. Hence, all pro jects funded by the $2 MV Fee will be subject to the same reporting, auditing, and ove rsight requirements as other Carl Moyer Program projects. After deciding whethe r to adopt the additional $2 MV Fee and which category(ies) of projects to use the fund s for, districts must report projects funded by the extra $2 MV Fee in the Carl Moyer Pro gram database (including non-Carl Moyer Program projects funded with the $2 MV Fee).II-10 PROGRAM ADMINISTRATION

Other District Funds. Other funds under the districts’ budget authority may be used as match. The eligible expenditures for match with ot her district funds include:

• Carl Moyer Program Projects. Match funds may be u sed to pay for any project which meets the Carl Moyer Program requirements of providing cost-effective emission reductions that are real, surplus, enforce able, and quantifiable and that meet the other project criteria in these Guidelines

.

• Incremental Fuel Cost. Match funds may be used to pay for the incremental cost of liquid or gaseous fuel and electricity, other than standard gasoline or diesel, which is integral to a Carl Moyer Program qualifying project

.

• Infrastructure Projects. Match funds may be used for electric and alternative fuel infrastructure projects that serve Carl Moyer Progr am qualifying projects.

• In-Kind Contributions. Up to 15 percent of a dist rict’s match requirement may be fulfilled through in-kind contributions. In-kind c ontributions are local funds under the district’s fiduciary control that are used to pay f or administering the local Carl Moyer Program, including but not limited to, staff resour ces assigned to the Carl Moyer Program, and printing, mailing, transportation and travel cost used by that staff to implement the Carl Moyer Program. Examples of acce ptable indirect costs are administrative staff services to the Carl Moyer Pro gram, office space, and telephone

service. These in-kind contributions must be made in the same time frame as the agreement term for the funds, must be proportional to the time and amount dedicated to Carl Moyer Program activities, and sha ll not be carried over to other years. The in-kind contributions must be documente d and records available for review during ARB or other State monitoring visits and audits. Acceptable documentation includes time sheets, contracts, and invoices.

Districts are entitled to use any funds under their budget authority to cover the in-kind costs to administer the Carl Moyer Program. When u sing these other district funds for in-kind match, districts must follow any guidelines and other legal requirements for expending those other funds. While the two percent outreach funds that districts

receive with each allocation comes under the distri cts’ budget authority, those outreach funds shall not be counted as part of a district’s in-kind match contribution

Matching Funds from Outside Sources. HSC section 44287(e) allows port authorities to provide match funding for port projects. Port auth orities may participate through projects involving their own equipment, or by solic iting port tenants to apply for project funding. To encourage port authority participation , port authorities are authorized to put up match funding for port projects, to satisfy dist ricts' match funding obligations. Thus, funding provided by a port authority for a qualifyi ng project, or for associated infrastructure, would count toward the district’s m atching fund requirement. No more than 30 percent of a district’s match obligation sh all come from a port authority.II-11 PROGRAM ADMINISTRATION

Private companies are not allowed to provide match funding to satisfy the districts' match funding obligation. The requirement that dis tricts provide the matching funds facilitates an equitable distribution of funds, by preventing companies with “deep pockets” from tying up the majority of the funds. This requirement also helps ensure that districts independently evaluate the projects they approve for funding.

D. Cost-Effectiveness

Carl Moyer Program funding shall only be used to pa y for the incremental cost of a project, minus any other public financial assistanc e, up to the program

cost-effectiveness limit. Public financial assista nce includes, but is not limited to, Environmental Quality Incentives Program (EQIP) and Federal Transportation Authority (FTA) funds. Only Carl Moyer Program funding, fund ing under the district’s fiduciary budget authority or funding provided by a port auth ority (to meet the match fund requirement), is included in the cost-effectiveness calculation. Private funding is not

included in the cost-effectiveness calculation. Th us, a project that costs more than the cost-effectiveness limit may be funded, but only if outside funding is used to “buy down” the incremental cost. Funding for infrastructure i s not included in the cost-effectiveness

calculation. For more details on how to determine the cost-effectiveness of a particular project, see Part II of the Guidelines, Chapters 1- 12. A general discussion of the cost-effectiveness calculation methodology is prese nted in Part IV of the Guidelines, Appendix C.

E. Obligation

Since the inception of the Carl Moyer Program, ARB has required districts to obligate state funds one year from June 30 of the year the d istrict receives its initial Grant Award and Authorization Form. This requirement ensures A RB that state funds will be spent in a timely manner as required by law.

When obligating funds, districts shall do so by con tracting with owners to complete selected projects. Funds are considered to be obli gated when the district takes one of the following actions:

• The district’s governing board approves a project for funding through a resolution, minute order, letter or other written instrument.

• The Air Pollution Control Officer (APCO) or design ated district staff, if given the authority by the governing board, approves a contra ct.

• The contract between the district and the owner is fully executed.

Carl Moyer Program funds shall be obligated by a di strict one year from June 30 of the year a district received its Grant A ward and Authorization Form.II-12 PROGRAM ADMINISTRATION

In the event previous years’ funds were awarded or obligated to projects that withdraw or are terminated, those funds shall be awarded and /or obligated to other projects along with the current year’s funds, following the curren t year’s requirements. However, for tracking purposes, they must be reported with the c orrect previous year’s reports.

F. Expenditures

HSC section 44287(k) requires that Carl Moyer Progr am funds be expended by a district two years from June 30 of the year a distr ict received its initial Grant Award and Authorization Form. Districts expend funds by payi ng owners for completing milestones of projects under contract. Prior to paying for a delivered engine/vehicle or making final payment for completed project, the district must re ceive an invoice from the owner and complete a satisfactory post-inspection.

Some districts withhold a percentage of the grant a mount until all annual reporting requirements are met. These withhold payments ensu re the owners submit their annual reports and do so in a timely fashion. Districts t hat have withhold payments as part of

the contract with the owner shall count the withhol d payments as expended, for the purposes of this section, once the district pays th e invoice(s) for all but the withhold

amount.

In the event previous years’ funds (that were oblig ated and invoiced) are returned to a district, those returned funds are to be re-obligat ed to projects along with the current year’s funds, and following the current year’s requ irements. However, for tracking purposes, they must be reported with the correct pr evious year’s reports.

G. “At-Risk” Districts

In accordance with HSC section 44291(d), ARB shall monitor the districts’ implementation of the Carl Moyer Program. The ARB will use the minimum requirements outlined in this chapter as the benchm ark for satisfactory implementation of the Carl Moyer Program. The ARB will also evalu ate districts’ implementation of their local Carl Moyer Program through monitoring and aud iting as required. A district will be

determined to be “at-risk” if the district fails to demonstrate that it is implementing the local program consistent with this chapter, which i ncludes but is not limited to any of the following:

• Funds not being obligated and/or expended within t he required time frames.

• Funds being spent in any way that is not consisten t with the requirements of the Carl Moyer Program. For example, not maintaining a dequate fiscal and programmatic records.

• Funds being spent in a way that is not consistent with the district’s own policies and procedures manual.II-13 PROGRAM ADMINISTRATION

• Implementing the local Carl Moyer Program in a way that cannot guarantee the funds are being used for projects that provide real , quantifiable, and surplus

emissions reductions within the cost-effectiveness limits.

The ARB shall provide technical assistance to distr icts that are determined to be “at-risk.” The repercussions for “at-risk” distric ts that fail to correct deficiencies are outlined, in Section XI - ARB’s Oversight.

H. Training and Technical Assistance

The ARB provides training and technical assistance to districts through several means. On a day-to-day basis ARB maintains regular communi cation with the local districts through ARB’s district liaison and the district’s C arl Moyer Program contact person. The ARB also provides training and technical assistance when monitoring districts’ performance, including review of projects and repor ts, and making on-site monitoring

visits.

After each Guideline revision, ARB provides trainin g and technical assistance on the changes to the Guidelines. This training is mandat ory for all participating districts. The ARB, in conjunction with the districts, also provid es training and technical assistance at the quarterly Incentive Program Implementation Team (IPI Team) meetings. All districts must attend at least two IPI Team meetings per year . At-risk districts must attend all IPI Team meetings.

III. ARB’s Carl Moyer Program Award Process

The ARB determines the tentative awards for each ye ar in accordance with the formula identified in HSC section 44299.2(a). The formula provides a minimum allocation of $200,000 to all districts. Districts that accept o nly the minimum allocation may request a waiver from the match requirement. With the exce ption of the South Coast Air Quality Management District (SCAQMD), awards that exceed th e minimum allocation of $200,000 are calculated based on district populatio n, severity of the air quality problems and the historical funding awards under the Carl Mo yer Program. The SCAQMD award is based solely on population. Each year, tentativ e funding awards are provided in the Carl Moyer Program solicitation package.

Districts may request more than the tentative award . In fact, districts are encouraged to request the maximum funding for which they can comm it the required match funds. Even though some districts will opt to accept the m inimum award and have the match requirement waived, ARB expects that the total fund ing requested will exceed the funding available. Each year, all funds will be aw arded and ARB will determine the final funding award among the districts. If any district requests less than their tentative award, the remaining funds will be allocated among the districts that requested more than their tentative award following the required f ormula.II-14 PROGRAM ADMINISTRATION

Health and Safety Code section 44286 grants ARB the authority to set aside 10 percent of Carl Moyer Program funds for projects to pay for projects that are multi-district in nature. As such, ARB will include an annual 10 per cent hold-back from project funds to pay for projects that operate a portion of the time or miles outside their primary district of operation (within California). This includes proje cts that have significant air quality impacts in neighboring districts as a result of air pollution transport. The ARB’s 10 percent hold-back funds will also focus on areas of statewide importance. In Year 7 (fiscal year 2004-2005), ARB prioritized goods move ment projects. Examples of multi-district projects funded in Year 7 include co nstruction equipment, marine vessels,

line haul trucks and a locomotive.

IV. ARB’s Carl Moyer Program Solicitation

A. Solicitation

The ARB solicits district applications to conduct a local Carl Moyer Program, by sending solicitation packets to the Air Pollution Control O fficer (APCO) at each district. The solicitation packet is also made available electron ically on the Carl Moyer Program website. The application packet includes all of th e following:

• A cover letter with instructions for completing an d submitting the application.

• An application with match requirement information and documentation requirements.

• A match waiver request form.

• A list of the tentative awards.

B. Districts’ Carl Moyer Program Applications

Districts interested in participating in the Carl M oyer Program must submit a completed application packet with all documentation by the po sted deadline, which is 60 days from the date of the solicitation. The completed applic ation packet must include the

documents described below.

1. Completed Application

The ARB application must be completed and originall y signed. All information requested must be provided or the application will be considered incomplete.

2. Documentation for Match Commitment

Any district may elect to request the minimum alloc ation of $200,000 per year and request a match waiver. Districts that request a m atch commitment waiver shall document the request by submitting the match commit ment waiver request form which commits the district to provide sufficient resource s to implement the localII-15 PROGRAM ADMINISTRATION

Carl Moyer Program. The match waiver must be origi nally signed by the APCO. Districts requesting the monetary match waiver are not eligible to receive reallocated Carl Moyer Program funds.

Districts receiving an award that exceeds the $200, 000 minimum allocation must provide documentation of monetary match of district funds that has or will be spent on eligible projects. Projects that have been complet ed shall be documented by entering or uploading the project data into the Carl Moyer P rogram database. Future projects shall be proposed by listing the type of monetary m atch on the application and identifying the source of funds that the district w ill be using. The ARB staff will verify

that the listed amount and source of funds are avai lable for the district to use under the Carl Moyer Program. Districts may also meet up to 15 percent of their match requirement with in-kind contributions.

3. Local District Board Resolution

The application must include a resolution of the di strict governing board that authorizes the district to participate in the Carl Moyer Progr am and accept funds from ARB. Districts may want to include language and funding amounts in the resolution that provide the districts with the opportunity to accep t additional funds, should additional

funds become available. For districts with a match requirement, the board resolution shall authorize the APCO to apply sufficient fundin g to meet the match requirement. Since Carl Moyer Program funding is now authorized until 2015, districts may include a board resolution, which authorizes the district to implement the Carl Moyer Program for multiple years. Each year the district would docum ent the resolution as still being in effect by simply including a copy of the resolution with the signed application.

4. Local Carl Moyer Program Implementation Plan

The district shall include a Carl Moyer Program imp lementation plan for obligating the grant award, including, but not limited to, how the district will complete the tasks of outreach, solicitation, application processing, obl igation and invoicing of funds, reporting and monitoring. The plan must include a timeline f or completing milestones for the identified tasks. Districts that have already subm itted their implementation plan in previous years may submit just their timetable for implementation of the milestones and, if appropriate, changes the district is making to t he local implementation of the Carl Moyer Program.

5. Documentation of Obligation and Expenditure of P revious

Grant Awards

Districts that have previously been awarded Carl Mo yer Program funds must have submitted, or submit with the application, document ation of the status (obligation/expenditure) of all previous years’ Car l Moyer Program funds for which no final report has been submitted. The details of th is status report are described under section IV.F.1., below. ARB reviews the documentat ion to evaluate each district’sII-16 PROGRAM ADMINISTRATION

status of obligating and expending previous years’ funds before approving additional allocations. This evaluation ensures funds are exp ended within the time frames required by the HSC section 44287(k).

C. Review and Approval of Carl Moyer Program Applic ations

The ARB receives the applications and determines if each application is complete. If the application is incomplete, ARB shall provide th e district with a written explanation of what is missing from the application within ten wor king days of receipt of the application. Once the district application is complete, ARB shal l verify all commitments of monetary match and, complete a review of all previous years’ Carl Moyer Program funding.

While districts may apply for funding each year, be ginning with Year 9 (fiscal year 2006-2007) for the Year 10 funding application, ARB specifies minimum requirements regarding the amount of funds that each district mu st obligate from previous awards in order to receive a grant award in the new funding c ycle. The requirements are as

follows:

• Any district receiving the minimum award of $200,0 00 that has not obligated at least 50 percent of their funds from the previous year sh all not be eligible to receive funds for the current fiscal year.

• Any district receiving more than the minimum award of $200,000 that has not obligated 70 percent of their funds from the previo us year shall only be eligible to apply for a reduced award amount and shall not be e ligible to accept additional funds, should they become available.

Any district that has not met the obligation requir ements by the application deadline may still reserve funds for the current year. Howe ver, the district will be given a grant award that contains conditions requiring that the district must obligate and provide documentation of that obligation for an inc reased percentage (70 percent for districts that requested the minimum allocation and 90 percent for districts that requested more than the minimum allocation) of thei r allocation by April 30 of the current year. Any district that fails to meet this obligation requirement shall have their current year’s allocation cancelled or reduce d. ARB will consider the amount of funds that can be reasonably obligated in consultat ion with the district.

ARB shall redistribute any cancelled funds followin g the formula identified in HSC section 44299.2(a). However, only those distri cts that have applied for additional funds during the application period, and have met the match fund requirements and the obligation requirements will b e considered in the formula.

• Districts may elect to return unobligated funds fr om previous years to obtain their full current year award.II-17 PROGRAM ADMINISTRATION

• “At-risk” districts are only eligible to apply for funds once corrective action has been

taken and the “at-risk” determination has been remo ved.

Complete applications, which fulfill all criteria, shall be approved no later than 60 days after receipt. On a case-by-case basis, ARB may el ect to approve an application that is missing a particular item and make the submittal of that item a stipulation of the Grant Agreement. For example, sometimes district staff i s unable to obtain a board resolution before the application deadline. In such a case, A RB may allow a board resolution to be submitted with the signed Grant Agreement or pri or to the district’s initial

disbursement.

D. Final Grant Awards

Once all of the districts’ applications have been a pproved, ARB will determine the final awards. Final awards are incorporated into the Gra nt Award and Authorization with the

districts. The Grant Award and Authorization Form shall specify the amount of each districts’ award that are from the smog check fee, the tire fee and for outreach. The ARB prepares and submits two original copies of the Grant Award and Authorization Forms to qualifying districts. The districts revie w and have the authorized person (usually the APCO) originally sign both copies of t he agreement. The districts retain one fully executed copy of the agreement for their files and return one original copy of the fully executed agreement to the ARB. April 30 of each year is the deadline for acceptance of a grant award. From June 30 followin g the full execution of the agreement, the districts have 12 months (one year) to obligate and 24 months (two years) to expend the grant award.

E. Disbursement Requests to Districts

1. Initial Disbursements

In order to receive a disbursement, each district m ust submit a Grant Disbursement Request to ARB. The Grant Disbursement Request for m must be signed by a district board-authorized party. If there are stipulations on the Grant Award and Authorization form, all stipulations must be met prior to submitt ing the initial disbursement request. For the initial disbursement, districts may request up to ten percent of their allocation or $100,000, whichever is greater. If a district subm its a request that documents the need for more than ten percent or $100,000, to the satis faction of ARB, a larger disbursement may be made. In addition, districts may request ha lf of their administrative funds.

Districts will receive one check for both administr ation and project funds. However, districts must account for the administration and p roject funds separately.

Prior to receiving the initial disbursement, distri cts must submit documentation of the obligation and expenditure of previous years’ Carl Moyer Program and required matching funds as follows:II-18 PROGRAM ADMINISTRATION

• Obligation and expenditure of 100 percent of all C arl Moyer Program funds and required district match from allocations awarded 2 or more years previous.

• Obligation of at least 90 percent of the previous year’s Carl Moyer Program and required match funds.

Districts that maintain withhold payments to ensure owners submit annual reports, shall count those withhold payments as expended when calc ulating the percentage of funds expended for the purposes of this section.

2. Additional Disbursements

For additional disbursements of Carl Moyer Program funds, districts must submit a Grant Disbursement Request and provide documentatio n of obligation of previous and current years’ funds as follows:

• Obligation of 100 percent of all previous years’ f unds, documented by entering or uploading the projects’ information into the databa se and the submission of a copy of pertinent pages (initial page, signature page an d page describing the project) of the executed contracts for the same projects.

• Obligation of 50 percent of the initial disburseme nt, documented by entering or uploading the projects’ information into the databa se and submitting a copy of approval by board resolution, minute order, or boar d letter; APCO approved contracts; or, fully executed contracts. On a case -by-case basis, ARB may accept other documentation of the commitment to obligate c urrent year’s funds.

Districts may request the other half of their admin istrative funds when 50 percent of their Carl Moyer Program funds have been obligated. Dist ricts will again receive one check for both administration and project funds and must account for the administration and project funds separately.

3. Earned Interest

Any Carl Moyer Program funds provided by the State that are deposited in interest bearing accounts must be reported to ARB. The inte rest income must be used to fund projects that meet the current Carl Moyer Program G uidelines. Projects funded by interest earned shall be entered or uploaded into t he database and included in the final report of the year from which the interest accrued.

F. District Reporting Requirements

Districts are required to report on the status of e ach year of Carl Moyer Program funding three times. The required reports - the status, an nual and final reports - are described

below. Districts that fail to submit a satisfactor y annual report on a timely basis shall beII-19 PROGRAM ADMINISTRATION

deemed “at-risk.” Districts that fail to submit sa tisfactory initial and final reports may

also be deemed “at-risk.”

1. Status Report

Each district shall submit their status report to A RB in mid-November at the time Carl Moyer Program district applications are due. If a district is not applying for the next year’s Carl Moyer Program, the district shall submi t the status report, by itself, by November 15. The report shall use the ARB prescrib ed format to indicate the district’s progress in meeting its projected milestones from i ts current year’s Carl Moyer Program funds. This report shall be made publicly available . Funds that have been obligated to projects shall be documented by updating the projec t data in the Carl Moyer Program database. While not being termed “at-risk,” any di strict that has not met the minimum obligation requirement of their funds (50 percent o f funds obligated for districts receiving the minimum allocation or less and 70 percent of fu nds obligated for districts receiving more than the minimum allocation), at this time, sh all be monitored more closely by ARB and may be provided extra training and technica l assistance. In addition, any district not meeting the minimum obligation require ment shall either not be eligible for funding or only be eligible for the minimum award a s specified in Section IV.C. of this chapter.

If a district has not already done so, the district shall submit their written policies and procedures manual for the implementation of the Car l Moyer Program as part of the status report. If all funds have been obligated, t he database updated, and the policies and procedures manual submitted to ARB by the Novem ber 15 deadline, the status report will (with ARB approval) satisfy the require ment for the annual report.

2. Annual Report

Districts shall submit an annual report by or befor e June 30 of the year following their allocation. This report shall be made publicly ava ilable. At a minimum, districts shall submit a brief narrative report on their implementa tion of the Carl Moyer Program and update all of their project information in the data base to assure data is current and accurate. The brief narrative shall specifically i nclude information on:

• Total applications received.

• Efforts to meet environmental justice mandates, if required.

• Efforts to outreach to potential zero-emission and small business projects.

• Monitoring and auditing efforts and results.

• Enforcement actions and recaptured funds, if any.

• Outstanding features and accomplishments.II-20 PROGRAM ADMINISTRATION

• Challenges in implementation.

• For Year 8 only, information on the average and me dian time to obligate funds (from receipt of application to execution of contract).

The update of the project information shall include the following:

• Carl Moyer Program projects, including those funde d by state funds (specified by smog check or tire fee), interest accrued on state funds, and local matching funds.

• Other projects funded by AB 923 (Light Duty Vehicl e, Lower Emission School Bus, and Agricultural Assistance Programs).

• Any significant deviations relative to the origina l project shall be provided as an update. The status of emissions reductions by proje cts in the implementation phase is assumed to be as originally submitted, unless up dated by the district.

• Copies of executed contracts for all Carl Moyer Pr ogram projects and AB 923 funded projects. Districts may make and submit one complete copy of their standard contract format and then submit only the pertinent pages (initial page, signature page and page describing the project) of the agreem ents to ARB. Districts are required to submit only one copy of each agreement or the pertinent pages of each agreement.

If a district has previously submitted a satisfacto ry annual report, all funds have been expended and the database updated, the district may complete a combined annual and final report brief narrative, which will (with ARB approval) satisfy the requirement for the final report.

3. Final Report

Districts shall submit a final report no later than June 30 of the second year following their award or after all Carl Moyer Program funds a nd local match commitment have been expended. This report shall be made publicly available. At a minimum, districts shall submit a brief narrative report on their impl ementation of the Carl Moyer Program and update all of their required project informatio n already entered into the database and any new project information. The brief narrati ve shall specifically include

information on:

• Results of environmental justice efforts, if requi red.

• Results of outreach efforts to zero-emission and s mall business projects.

• Monitoring and auditing efforts and results.II-21 PROGRAM ADMINISTRATION

• Enforcement actions and recaptured funds, if any.

• Outstanding features and accomplishments.

• Challenges in implementation.

• For Year 8 only, information on the average and me dian time to expend funds (from contract execution to invoice payment)

The update will ensure that the data in the databas e is current and accurate. The update shall include all of the following:

• Modifications to Carl Moyer Program projects, incl uding both state funds, interest accrued on state funds, and local matching funds.

• Modifications to AB 923 funds obligated for projec ts not meeting Carl Moyer Program requirements.

• Any significant deviations relative to the origina l project shall be provided as an update. The status of emissions reductions by proje cts in the implementation phase is assumed to be as originally submitted, unless up dated by the district.

• Copies of executed contracts, as listed in item tw o above, that obligate Carl Moyer Program and local match funds to project s, which were not previously

submitted.

• Copies of invoices that document the amount Carl M oyer Program funds and local district match expended for each project.

G. Policies and Procedures Manual

Each District shall maintain a current policies and procedures manual, which is in conformance with or more stringent than these guide lines. The policies and procedures manual must, at a minimum, include the overall plan and day-to-day process for the districts’ implementation of the following tasks as outlined in this chapter:

• District solicitation (including outreach efforts to environmental justice communities, to small businesses, and for zero-emission projects ) and project acceptance.

• Project selection.

• Obligation of funds to projects.

• Contract development and boilerplate language.

• Monitoring of projects.II-22 PROGRAM ADMINISTRATION

• Expending the funds.

• Auditing of projects, and when necessary recapturi ng funds.

• Reporting to ARB.

• Requesting disbursements from ARB.

The policies and procedures manual shall be submitt ed to ARB for approval with the Year 8 status report by November 15, 2006, or with the next year’s Carl Moyer Program application in November 2006, and with any substant ive revision thereafter.

H. Timeline for Each Year of Funds

Mid-September ARB solicits applications from the districts

based on tentative awards

Mid-November ARB receives applications from the districts including districts’ status report from the previous year

Early January ARB notifies districts of final awards

April 30 District deadline to accept or decline funds

June 30 following year Districts’ annual report to ARB – funds must be obligated

June 30 of second year Districts’ final report to ARB – projects invoiced and paid for, funds expended

V. District Solicitation and Project Acceptance

Each district must maintain and follow written poli cies and procedures for soliciting and accepting projects. ARB encourages districts to pr ovide clear and detailed information to the owner regarding the reporting requirements a nd consequences for failure to

demonstrate achievement of emissions reductions.

A. Outreach

Outreach prior to and during the time frame of the solicitation is critical for the success of a local program. The districts shall focus thei r outreach in a way that encourages applications from all sectors, including environmen tal justice communities, small businesses, and zero-emission projects. Below are brief descriptions of the types of practices that should be included as part of a dist rict’s outreach activities.II-23 PROGRAM ADMINISTRATION 1. List of Interested Parties

Districts should maintain a list of interested part ies throughout the year and mail a notification to the parties on the list when funds are available. This list should also include prior applicants, public agencies (e.g. pub lic works departments, sanitation departments, school districts), engine dealers/dist ributors, and where appropriate, port authorities, and farm bureaus.

2. Local Newspaper Announcement

Districts are encouraged to put an announcement in local newspapers, in locally based trade newsletters including the local farm bureau a nd in the trade journals of organizations representing zero-emission technologi es such as the Clean Cities

Coalition and WestStart-CALSTART.

3. Web Site Notification

If the district has a website, the Carl Moyer Progr am solicitation should be advertised on the district’s website. Similarly, if the district has a newsletter, the Carl Moyer Program

solicitation should be advertised in the district’s newsletter.

4. Prior Participants

Districts should solicit additional projects from p rior participants with successfully implemented projects, especially during monitoring visits.

5. Small Business

Districts are encouraged to expand the participatio n of small business by advertising to targeted industries, offering workshops to the engi ne dealer network, and offering to assist small business owners with the completion of the application. For example, many

urban districts have found the construction industr y to be a viable source of projects, when the districts provide outreach, training and t echnical assistance to the many small businesses that own qualifying equipment.

6. Agricultural Community

Districts with agricultural communities are encoura ged to contact the local agricultural department and request that a flyer is posted that will be visible to farmers when they come in to get their pesticide use permits.II-24 PROGRAM ADMINISTRATION 7. Advertising

Districts may consider requiring their grantees to place a logo or decal on the new engine(s) advertising that the engine was funded by the district and ARB with Carl Moyer Program funds.

B. Environmental Justice

It is important that projects funded under the Carl Moyer Program benefit all Californians especially those in communities disproportionately impacted by air pollution. As such, ARB encourages all districts to incorporate an envi ronmental justice component in their local Carl Moyer Programs. Districts with a popula tion greater than 1 million inhabitants are required to provide funding to projects that be nefit environmental justice areas (HSC section 43023.5). This will continue to be a requirement and an important component of the Carl Moyer Program for these distr icts. These districts are encouraged to continue updating current written pol icies and procedures, where necessary, to define the environmental justice area s within district boundaries. They must market the Carl Moyer Program to owners that o perate or are based in environmental justice areas. These districts must select from their applicant pool in a way that ensures that 50 percent or more of their C arl Moyer Program funds (including the smog check fee, and adjustment to the tire fee) are expended on projects that are located and/or operate in environmental justice are as. The ARB also recommends these districts expend 50 percent or more of their $2 MV Fee funds on projects that are located and/or operate in environmental justice are as.

C. Project Solicitation

Below are brief descriptions of the options distric ts typically use for accepting applications. Districts may solicit two years of f unds with one solicitation in order to stay current with the obligation requirements. When com bining two years of funds in one solicitation, however, the previous year’s funds mu st be obligated first.

1. Over the Counter

The over the counter method is also referred to as a first-come first-served application process, where the district announces the first day project applications will be accepted. Applications are accepted until all of the funds ar e obligated. This method provides districts with smaller populations a greater opport unity to garner Carl Moyer Program eligible projects. This method may also maximize f lexibility for applicants by allowing them to apply at any time, up until the funds run o ut.

2. Notice of Funds Available (NOFA)

The NOFA method is also referred to as Request for Proposals (RFP), or Call for Projects. Districts following this method announce an application deadline for all proposals to be submitted. This method allows prop osals to be accepted from the dateII-25 PROGRAM ADMINISTRATION

of the solicitation to a specified date and time. This method provides districts with a high demand for Carl Moyer Program funds with the o pportunity to select the most cost-effective projects that meet local criteria th rough a competitive rating and ranking

process.

D. Project Applications

For consistency throughout the Carl Moyer Program, to assist applicants statewide and to limit confusion, ARB encourages all districts to use the same application form for the Carl Moyer Program. The application is available o n the Carl Moyer Program web site at http://www.arb.ca.gov/msprog/moyer/moyer.htm. D istricts that use their own application form shall ensure it includes all the i nformation the ARB application includes, as listed in each source category chapter. A few d istricts run their local Carl Moyer Program concurrently with other local he avy-duty incentive programs, which use one combined and unique application form. In t hese cases districts will have unique application forms.

No matter which forms are used, districts’ applicat ions must include a disclosure statement that the owner (or the owner’s designee) must initial/sign. The disclosure

statement certifies that the owner has not submitte d and shall not submit an application for Carl Moyer Program funds to any other district and/or the ARB for the same project. Owners are allowed to re-apply for project funding only if a previous application for the same project has been rejected and is no longer bei ng considered for funding. In addition, owners are required to disclose the value of any current financial incentive that directly reduces the project price, including tax c redits or deductions, grants, or other public financial assistance, for the same engine. The incremental cost of the project shall be reduced by the amount of the current finan cial incentive. Any owner or owner’s designee who is found to have submitted multiple ap plications for the same engine and/or not disclosed any current financial incentiv e shall, at a minimum, be disqualified from funding for that engine from all sources and m ay also be banned from submitting future applications to any and all Carl Moyer Progr am solicitations. In addition, as a violation of law, including but not limited to the Business and Professional Code, ARB and the districts may levee fines and/or seek crimi nal charges.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants who cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.II-26 PROGRAM ADMINISTRATION 1. Completeness of Application

In accordance with HSC section 44288(a), districts must review all applications for completeness upon receipt and notify the applicants in writing if their application is not complete within five working days of receipt of the application. The notification must clearly state what is required to make the applicat ion complete. A copy of the notification must be maintained with the applicatio n. This written notification must be accomplished using one of the options below:

• A letter, sent through the U.S. mail.

• An email message.

• A boiler plate form with check-offs.

No matter what method is selected, the notification must be copied, with the original handed or sent to the owner and the copy must be pl aced in the applicant file along with a copy of the incomplete application. Districts ar e encouraged to assist applicants, especially small business applicants, in completing their applications. Districts may determine that an application is not in good faith, credible or in compliance with the Carl Moyer Program and its objectives.

2. Eligibility of Projects

All complete applications that are in good faith, c redible, and in compliance with the Carl Moyer Program and its objectives, must be revi ewed by the district for eligibility. This process must include all of the following:

• Entering or uploading the data from the applicatio n into the database or the

database calculator to ensure it meets the emission reductions and cost-effectiveness criteria of the Carl Moyer Progr am.

• Checking to ensure the project meets all of the mi nimum requirements outlined in the chapter for the appropriate category.

• Maintaining a record of the eligibility verificati on in the applicant file.

E. Application Tracking

Districts must have a system for tracking applicati ons. Districts may use the database to track applications. At a minimum, the tracking system shall include the name and address of the owner, the category, and type of bas eline engine. The district shall also maintain a copy of each application and a file for each selected project. A district may use a solely electronic file system only after the district satisfactorily demonstrates to

ARB that all documentation is maintained and can be easily accessed on demand.II-27 PROGRAM ADMINISTRATION

VI. Project Selection

The districts have the authority and responsibility for selecting Carl Moyer Program eligible projects in their areas. Once a district has checked the eligibility of projects, the district must follow its policies and procedures ma nual in selecting projects to fund. The record of each project’s rating and ranking, receip t date, or other project selection criteria must be maintained with the application. Districts may choose to disqualify an application if the applicant defaulted or otherwise violated the terms of a previous Carl Moyer Program contract or other incentive prog ram contract. Districts must ensure that selected projects are surplus to compliance de adlines of adopted regulations.

The requirements in the following paragraph apply t o those districts that do not currently operate and maintain their own database.

At this time, the project information shall be ente red into the database to ensure the project meets the emission reduction requirements a nd cost-effectiveness criteria of the Carl Moyer Program. No project shall be funded unl ess the database indicates the emission reduction requirements and cost-effectiven ess criteria of the Carl Moyer Program have been met. If the database indicates the project does not meet either the emission reduction requirements or the cost-effectiveness criteria of the Carl Moyer Program, and the district representative thinks the project should actually qualify, the district representative may contact hi s or her ARB liaison to determine if the project is, in fact, eligible.

Districts that currently operate and maintain their own database will upload their project information when the district requests disbursement of funds from the ARB.

Once a project is selected, a flag shall be set in the database indicating that the project has been selected for funding. The project shall b e assigned a Carl Moyer Program project number by the ARB database. Districts may continue to use their own numbering system within their district. All exchan ges between ARB and the districts shall utilize the standardized project grant number ing system, and may also use the district’s number system upon request.

Districts shall make every effort to process an app lication and grant an award rapidly. The district shall provide ARB with information on the average and median time frames to award grants as part of the districts’ Year 8 an nual report. A file shall be created for all projects selected for funding. Grant award not ification shall be in writing, and a copy of the grant award notification letter must be main tained in the applicant file.

VII. Obligation of Funds to Projects

Districts shall obligate their allocation of Carl M oyer Program funds consistent with other sections of this chapter. In addition, districts t hat have a match requirement must obligate their match funds in a way that meets all of the Carl Moyer Program criteria. Districts must document their in-kind support with fiscal records of resource allocationsII-28 PROGRAM ADMINISTRATION

to the Carl Moyer Program. Districts may meet up t o 15 percent of their match funding requirement with in-kind contributions.

For ease of financial tracking of funds, and to the maximum extent practical, projects should be paid entirely through either ARB funds or district match funds. If ARB funds and district match funds must be mixed, it shall be for only one project and, if the project is for more than one engine, for only one engine. If funds from two years or phases of the programs are used for a project, the funds must be either ARB funds or district

match funds but not both.

VIII. Minimum Contract Requirements

When paying for projects using Carl Moyer Program f unds, districts must enter into a contract with the applicant. The contract must be signed and the project milestones (e.g. engine delivery, engine installation, final i nspection, and acceptance) shown in the contract must be met before Carl Moyer Program fund s are given to an applicant. The equipment must be operating before the final paymen t is issued. In order to provide consistency in contract requirements throughout the Carl Moyer Program, staff has conducted an extensive review of contracts used by many local districts participating in the Carl Moyer Program. Staff also conducted sever al working group meetings to determine the minimum content for contracts used by districts under the Carl Moyer Program. Based on this research and inp ut from districts, all districts participating in the Carl Moyer Program are require d to incorporate the following minimum requirements in contracts entered into with applicants who have been selected to receive funds under the Carl Moyer Prog ram. Samples of contract terms from existing districts’ contracts are provided to districts upon request. Actual language

in each district’s contracts shall be established b y the district in consultation with the district’s legal staff.

A. Party Names and Date

All contracts shall state the name of the district and the owner as parties to the contract. All contracts shall also state that, in addition to enforcement by the district, the ARB, as an intended third party beneficiary, reserves the r ight to audit and enforce the terms of the contract at any time during the contract term.

B. Contract Term

All contracts shall provide the term of the contrac t. The term of the contract must extend to the end of the project life and shall inc lude both the project completion and project implementation time frames. The contract t erm shall include two main time

frames

− project completion and project implementation/life periods

− to ensure that the district and ARB can fully enforce the contract ter ms during the life of the Carl Moyer Program-funded project.

Contract Term = Project Completion + Project Implem entation/LifeII-29 PROGRAM ADMINISTRATION 1. Project Completion

The project completion time frame is the first part of the contract term. Project completion is the time frame starting with the date of execution of the contract to when the project is complete i.e., becomes operational. This includes the time period when an engine or vehicle is ordered, delivered and inst alled. Districts may require periodic reporting during this time frame. The contract sha ll include a specified time frame in which project completion shall occur, so that the f unds are expended within the two-year required timeframe. The contract shall also requir e that no work may begin on the project until the contract is fully executed.

2. Project Implementation/Life

The project implementation/life time frame is the s econd part of the contract term. The project implementation time frame equals the projec t life. Project life is the number of years that a Carl Moyer Program project obtains or is claimed to obtain surplus emission reductions while operating in California. Surplus emission reductions are reductions that are early or extra. That is, the r eductions occur prior to a rule compliance date or the reductions exceed the requir ements of a rule or regulation.

The contract shall specify that the project impleme ntation equals the period of time during which the owner is required to operate and m aintain their Carl Moyer Program-funded engine/vehicle according to the terms of the contract. The contract shall specify that by executing the contra ct, the owner understands and agrees to operate the engine/vehicle according to the term s of the contract and to cooperate with the district and ARB in implementation, monito ring, enforcement, and other efforts to assure the emissions benefits are real, quantifi able, surplus, and enforceable. The minimum project implementation time frame shall be three years, unless otherwise approved in advance by the ARB. The maximum projec t implementation/life is defined in the following chapters under each specific sourc e category. A local air district must inform ARB if the district imposes additional restr ictions on the project life for any source category. The project implementation time frame in cludes the district monitoring and ARB auditing phases which may run concurrently or s equentially:

• During all or a part of the project implementation term, the district is responsible for monitoring the project to assure the project is ope rational and emissions reductions are realized. The contract shall require the owner to report at least annually to the district on the operation of the vehicles or equipm ent during this district monitoring phase. The contract shall inform the owner that no ncompliance with the reporting requirements shall require on-site monitoring. The district monitoring phase shall match the project life when the project life is les s than five years. When the project life is more than five years, the district monitori ng phase shall be for a minimum of five years.II-30 PROGRAM ADMINISTRATION

• While the district remains responsible for the enf orcement of the contract, the district shall also include language in the contract that cl early states the owner understands and agrees that the ARB has the authority and reser ves the right to monitor and enforce the terms of the contract at any time durin g the project life to ensure

emission reductions are obtained for a minimum of 7 5 percent operation within California or as specified in the contract for mari ne projects, including the period between 5 years and the end of the project life for those projects with project lives that are more than 5 years. The contract shall als o inform the owner that ARB will seek whatever legal, equitable, and other remedies are available under State law for the owner’s failure to comply with the Carl Moyer P rogram requirements and failure to fully perform under the contract.

The contract term may also outline other timing req uirements. For example, districts may include a requirement that the owner sign and r eturn the contract by a certain date or the Board’s obligation of funds to the project i s nullified.

C. Payment

In order to ensure that the district and ARB are pa ying only for the incremental cost of eligible items, paying only once for each engine, a nd the equipment being paid for is operating, all contracts must include the following payment terms.

1. Maximum Contract Amount

The maximum contract amount (which is the increment al cost, partial incremental cost, or funding cap), must meet the required minimum cos t-effectiveness limit. The maximum contract amount may never exceed the increm ental cost. If a district desires

to have their maximum contract amounts in round num bers, the district is only allowed

to round down.

2. Itemized Invoices

Payment terms must require itemized invoices from t he engine supplier for repowers or paid invoices from the vehicle owner for new vehicl es and satisfactory post-inspection by the district prior to payment of the owner’s inv oice. Partial payments may be made only if the payment process and requirements have b een reviewed and approved by the district. Payments shall be made directly to the p roject applicant only if the invoice has been paid and the payment is a reimbursement. Paym ents may be made to the engine dealer or distributor only if such payment arrangem ents are specified in the contract.

3. Disclosure of Funds

The owner (or owner’s designee) must initial/sign a disclosure statement. The

disclosure statement certifies that once the owner (or the owner's designee) signs this contract for this project, the owner (or designee) shall not submit another application or sign another contract for the same specific engine( s) with any other source of funds,II-31 PROGRAM ADMINISTRATION

including but not limited to, other districts or to ARB for a multi-district solicitation. Any owner or owner’s designee who is found to have subm itted multiple applications or signed multiple contracts for the same engine(s) sh all, at a minimum, be disqualified from funding for that engine(s) from all sources an d may also be banned from submitting future applications to any and all Carl Moyer Program solicitations. In addition, as a violation of law, including but not limited to the Business and Professional Code, ARB and the districts may levee fines and/or seek criminal charges.

4. Non-Compliance Terms

Districts shall include terms to cancel contracts o r withhold payment for non-compliance with or not meeting the obligations of the contract , and may include a term that cancels the contract if it is not executed by the owner in a timely manner.

D. Carl Moyer Program Criteria

All contracts shall include basic Carl Moyer Progra m Guidelines. Contracts must contain either a general statement of compliance wi th all Carl Moyer Program Guidelines and/or outline those requirements, as fo llows:

• The project shall not be required by any local, st ate and/or federal rule, regulation or MOU currently in effect.

• The low emissions technology must be certified or verified (as outlined in the following source category chapters) and meet the cu rrent NOx, PM and/or ROG requirements. If the low emissions technology is n ot certified or verified it may be approved based on an ARB case-by-case evaluation. When approved by an ARB case-by-case evaluation, the method for emissions v erification must be included as part of the contract.

• Rights to the emission reductions must not be clai med by any participant as emission reduction credits or in an averaging, bank ing, and trading program.

• The new engine/equipment/vehicle must not have bee n purchased prior to the effective date of the contract or the date of the g overning board’s approval, if applicable, whichever occurs first. The purpose of this requirement is to avoid funding of engines purchased prior to implementatio n of the contract, which would violate the Carl Moyer Program statutory provisions

.

• The existing (old) engine must be destroyed and re ndered useless. Destruction

methods for the vehicle in the fleet modernization category and for the vehicle and engine in the light duty category are further descr ibed in those chapters. Engines must have a complete and fully visible and legible engine serial number in order to be eligible for an engine repower. The destruction of the engine must be documented by the district seeing the destroyed eng ine or the receipt from the qualified vehicle salvage yard (see Part II, Chapte r 2: Fleet Modernization, SalvageII-32 PROGRAM ADMINISTRATION

Requirements for definition ) . Engines without a visible and legible serial num ber may be repowered if district staff stamp the engine block with the Carl Moyer Program project number and district staf f is present to personally verify engine removal from the project vehicle or equipmen t and the subsequent engine

destruction. ARB will consider alternatives to sta mping the engine block on a district-by-district basis.

• The new engine/vehicle/equipment must remain in se rvice for the project life; operate in California as per the source category re quirements specified in the following chapters; and, operate a specified amount . The district may specify minimum operating requirements within air district or air basin boundaries.

E. Maintenance of the Engine/Vehicle

All contracts shall require the owner to maintain t he engine/vehicle according to the manufacturer’s specifications for the life of the p roject. This includes a requirement for no tampering. The owner is also responsible for ma intaining a working hour meter, or other approved usage measuring device, for projects that document hours of operation as a means of calculating emissions reductions and cost-effectiveness. If the hour meter/usage device fails, the owner remains respons ible for validating any hours not recorded by the hour meter/usage device. The owner must either repair or replace the non-operating meter/device or provide other documen tation of equipment operating hours acceptable to the district.

F. Project Specifications and Performance Expectati ons

All contracts shall include detailed information on the baseline engine. This detailed information shall include at a minimum, the make, m odel, model year, horsepower and serial number of the baseline engine. All contract s shall also include the same detailed information on the new engine. This requirement ma y be met by including the project application as an attachment to the contract. An e ngine, which meets or exceeds the certification of the proposed engine, may be substi tuted with prior approval of the district. All contracts shall specify the amount t he engine is to operate based on hours, miles or fuel usage within California (or the distr ict) each year. Due to fluctuations in weather and other unforeseen circumstances, distric ts may average multiple years’ usage to determine annual usage.

G. Repercussions for Nonperformance

The contract must outline the repercussions to the owner for nonperformance and for not meeting any of the obligations of the contract. The contract must also inform the owner that ARB and the district have the authority to fine the owner or seek other remedies available under the law for noncompliance with Carl Moyer Program requirements and nonperformance with the contract. Districts may consider unforeseen circumstances beyond the owners’ control in determi ning repercussions for nonperformance.II-33 PROGRAM ADMINISTRATION

H. On-Site Inspections

All contracts shall include language that allows th e district, ARB or their designee(s) to inspect the engine(s) and/or records relating to th e engine during the term of the

contract.

I. Auditing

All contracts shall include language that allows fo r fiscal auditing by the district, ARB or a third party designee during the life of the proje ct.

J. Records and Records Retention

All contracts shall include language requiring the owner to maintain records and retain the records for at least three years after the term of the contract.

K. Reporting

All contracts must include a provision for owners t o submit, at a minimum, annual reports commencing one year after project completio n and annually thereafter for the district monitoring and auditing phase of the contr act. The district shall include the dates the annual report is due. The owner shall al so submit a copy of evidence of the appropriate insurance. If the district monitoring phase of the contract term exceeds five years, the owner’s reporting responsibility may be reduced to once every other year after the initial five years of reporting. If the project is a zero-emission technology, reporting may be reduced to biennially for the firs t six years, and no annual reports are required thereafter.

L. Insurance

All contracts shall require owners to carry and (as required by annual reports or requested during monitoring and auditing) provide p roof of insurance covering the new engines throughout the term of the agreement. A di strict may require more or additional

insurance.

M. Notices

All contracts shall include contact information for both parties to the contract, and how to

send and receive notices.

N. Signature Blocks

All contracts must include signature blocks with an area for the dates that the contract is signed.II-34 PROGRAM ADMINISTRATION

O. Optional Contract Terms

All districts have the option to include other term s and conditions in their agreements. Below, are contract terms that are used by some dis tricts. Even though they are not required, all districts have the option of includin g the following additional contract terms:

1. Severability

If any part of agreement is found invalid by a cour t of law, the severability contract term maintains the enforceability of the remainder of th e contract.

2. Tax Implications and Information

Each district should consult with its tax attorney regarding potential tax implications for the owners and what, if any, actions the district w ill take as a result of the attorney’s

assessment.

3. Non-Allocation of Funds

If funds are not available from ARB, this contract term provides the district the ability to

cancel the contract

4. Decals

Districts may want to add a contract term to requir e a decal to be affixed on the new engine. This is one method for outreach.

5. Electronic Monitoring Unit

Some categories (marine, locomotive and fleet moder nization) require the installation of an Electronic Monitoring Unit (EMU). Contracts for those categories must include a contract term for EMUs. Districts may require the installation of an EMU with each new engine for other categories as well. The EMU is a Carl Moyer Program eligible expense and may be added to the incentive amount as long as the project still meets the cost-effectiveness cap. Districts may allow projec ts with EMUs to complete all reporting through the electronic data system.

6. Incorporate the Application

In order to assure the baseline engine in the appli cation is the one being replaced, districts may want to incorporate the application b y reference.II-35 PROGRAM ADMINISTRATION

IX. Districts’ Monitoring Requirements

A. Pre-Inspection

Once an application is deemed eligible and before c ontract execution, a pre-inspection shall be completed by the district. The one except ion is for public agencies (e.g. public works departments, transit organizations, and schoo l districts). Districts may choose to allow public agencies to provide documentation of t he engine and its use.

The pre-inspection shall, at a minimum, include col lecting the serial number of the baseline engine and verifying the information in th e application about the baseline engine (make, model, model year, horsepower). The pre-inspection shall also verify the engine is operational (with a start up) and that th e engine is working as described in the application (document function and use). A photo s hall be taken for the file. The photo must include the applicant’s name, the date and the serial number of the engine.

A pre-monitoring form shall be used to document the pre-inspection. The required elements for a pre-inspection form include all of t he following:

• Owner’s name, address and telephone number.

• Location of the engine.

• Verification of the baseline engine information (m ake, model, model year, horsepower, and serial number) as described in the application.

• Space for the inspector to record whether the engi ne is in running condition, make comments, and attach pictures.

A hard copy of the completed pre-inspection form sh all be maintained in the project file. Districts may utilize paraprofessional staff, with training, to complete pre-inspections. Districts may also complete the Carl Moyer Program pre-inspections in combination with permit inspections.

B. Post-Inspection

Post-inspections shall be completed on all projects funded under the Carl Moyer Program. The post-inspection shall occu r after the district receives an invoice from the owner for an engine, but prior to the district paying for that engine (or making final payment for the engine). For public f leets, such as transit organizations,

where more than 20 of the vehicles in the fleet are included in the project, the district may choose to inspect a random sample of the vehicl es included in the project. The sample size must be statistically significant.

The district’s post-inspection must verify that the engine listed in the contract was installed. The inspector shall record the informat ion from the plate (serial number,II-36 PROGRAM ADMINISTRATION

make, model, model year, and horsepower) on the ins pection form and verify it with the information listed in the contract. The engine mus t be operational in the equipment or vehicle as stated in the contract. The inspector m ust visually witness all engines start up and mobile projects run. The vehicle or engine information must be documented with pictures.

Where applicable, the post-inspection shall also ve rify that the baseline engine or vehicle is destroyed and rendered useless. Dependi ng on the method of destruction selected, the inspector must see the destroyed engi ne, witness the engine destruction, and take photos of the destroyed engine. The photo s shall include the name of the owner and date of the inspection. For engines with a complete, fully visible and legible engine serial number, the district must see the des troyed engine or the receipt from the qualified vehicle salvage yard. For engines withou t a complete, visible, and legible serial numbers, the district staff must stamp the e ngine block with the Carl Moyer Program project number and be present to personally verify engine removal from the project vehicle or equipment and the subsequent eng ine destruction. ARB will consider alternatives to stamping the engine block on a dist rict-by-district basis. The district must follow all additional requirements for the methods of destruction for fleet modernization and light-duty categories as further described in t hose chapters.

A post-inspection form shall be used to document th e post-inspection. The required elements for a post inspection form include all of the following:

• Owner’s name, address and telephone.

• Location of the engine.

• Baseline engine information (make, model, model ye ar, horsepower, and serial number) as written in the application and/or contra ct.

• Space for the inspector to record whether the engi ne was scrapped or destroyed.

• New engine information (make, model, model year, h orsepower, and serial number).

• Space for the inspector to record whether the engi ne is in running condition and

make comments.

Photos shall be maintained with the hard copy file or electronically and made available upon ARB request. The completed form shall be main tained in the project file. Final payment shall only be made to an owner once a satis factory post-inspection has been completed.

C. Annual Reports

Districts shall require all owners to submit annual reports commencing one year after project completion and annually thereafter for the term of the contract. The annualII-37 PROGRAM ADMINISTRATION

report shall be in a format prescribed by the distr ict and shall contain all of the following

information:

• Owner’s name, address, and telephone number.

• Location of the engine.

• Engine information (make, model, model year, horse power, and serial number).

• Condition of the engine, including current working condition and any major maintenance of the engine that significantly affect ed the annual usage of the engine.

• Any conditions (e.g. weather, permits) that signif icantly affected the annual usage of the engine.

• Readings of the usage meter (hour meter, odometer, EMU, etc.).

• A copy of evidence of the appropriate insurance.

The districts shall review the annual report for co mpleteness, accuracy, and usage. A hard copy of the annual report and a written reco rd of the district’s analysis of the annual report shall be maintained in the project fi le. If the project performed 30 percent above or below the usage specified in the contract, the district shall flag the project. Any project that has been flagged for performance s hall be evaluated over a multiyear basis. If the project’s usage does not average out to within 30 percent of the usage specified in the contract over at least a 3 year pe riod, the district shall take appropriate

action to ensure the contracted emissions reduction s are realized. Appropriate actions include, but are not limited to, recapturing funds from the project in proportion to the loss

in emissions reductions.

There are a few situations whereby the district may reduce annual reporting requirements. If the district’s monitoring phase o f the contract term exceeds five years, the owner’s reporting responsibility may be reduced to once every other year after an initial five years of satisfactory reporting. If t he project involves a zero-emission technology, reporting may be reduced to biennially for the first six years and no annual reports are required thereafter. If the project ha s an EMU, the annual report may be collected through the electronic data system.

If an annual report is incomplete, inaccurate or no t received from an owner on schedule the district shall make a reasonable attempt to obt ain the complete and accurate report

from the owner. If the district is unable to obtai n the report, all of the engines in that project shall be audited by the district. Owners w ith outstanding reports shall not be granted any additional Carl Moyer Program funds unt il all reports are satisfactorily submitted. Districts may bar an owner from applyin g for any additional Carl Moyer Program funds, if that owner has a histo ry of not submitting satisfactory annual reports.II-38 PROGRAM ADMINISTRATION

D. Audits

Districts shall audit at least ten percent (or a st atistically significant number) of the projects that have more than a three-year project l ife and are within two years of contract expiration. In addition, district audits shall include all of the projects whose owners fail to report annually. The audit shall be completed by district staff and shall include verification that the engines paid for are still operational in the same equipment and meet the mileage, fuel usage, or hours of opera tion indicated on the executed contract. This shall be completed by checking the serial number of the engine; witnessing the engine operate; and checking the odo meter, hour meter/usage device, fuel receipts, or EMU.

Districts shall also randomly audit at least five p ercent (or a statistically significant number) of the projects at the end of the contract term. Districts shall also include those projects whose owners failed to report annually and those projects that were found to be below the level of use during the audit two years p rior to the end of the contract. The audit shall be completed by district staff and shal l, at a minimum, include verifying that the engines paid for are still operational in the s ame equipment and meet the mileage, fuel usage, or hours of operation indicated on the executed contract. This shall be completed by checking the serial number of the engi ne; witnessing the engine operate; and checking the odometer, hour meter/usage device, fuel receipts, or EMU.

If the project is more than 30 percent below or abo ve an annual average of the level of use outlined in the contract, the district shall ta ke appropriate action to ensure the emissions benefits are realized and captured during the term of the contract. In addition, the district shall audit all of the other engines owned by the same participant and included in the same Carl Moyer Program funded project.

X. Expenditure Requirements

The final payment for a project shall only be made after a post-inspection is satisfactorily completed (see post-inspection secti on above) and all invoices have been received and approved. The district shall review t he itemized receipts and only pay for eligible expenses. Eligible expenses are limited t o those mechanical items that are necessary to complete the installation of the new e ngine or retrofit. At the discretion of the district the labor and sales tax directly assoc iated with that installation may be included. The district shall maintain copies of al l invoices and documentation of payment in the project file. For all on-road proje cts, if a compliance check was not previously completed, the district shall verify wit h its ARB district liaison that there are no outstanding violations prior to payment.

Districts may make progress payments to owners prov ided the progress payments are based on a predetermined schedule that is set forth in the contract between the district and the owner. Those progress payments shall only be made after the owner provides the district with sufficient evidence of completing predetermined milestones (e.g.II-39 PROGRAM ADMINISTRATION

delivery of an engine). The district must maintain a clear record of progress payments

in the file and in the administration/fiscal unit o f the district. Progress payments include final payments that are withheld until all reportin g requirements are met, also known as withhold payments. For purposes of ascertaining th e percentage of funds expended to qualify for disbursement requests, districts that d emonstrate the maintenance of withhold payments as a part of contracts with owner s, may count the value of the withheld payment as expended once all other invoice s for the project are paid.

XI. ARB's Oversight

The ARB’s oversight responsibilities for the Carl M oyer Program are multifaceted. The

ARB must ensure that the emission reductions claime d by the Carl Moyer Program are real, surplus, enforceable, and quantifiable. The ARB is responsible for ensuring the funds are expended on projects that meet and follow the Health and Safety Code and Carl Moyer Program Guidelines. The ARB is also res ponsible for reviewing districts’ progress obligating and expending statewide funds, ultimately determining, when necessary, the need to reallocate funds within a fu nding cycle. The ARB may contract with an independent third party to ensure the struc ture of the Carl Moyer Program ensures the integrity of the program. The ARB staf f shall report to the Board annually on the progress of the Carl Moyer Program. In carr ying out these responsibilities, ARB maintains a close working relationship with the dis tricts.

A. Monitoring and Auditing of District Programs

Monitoring is an ongoing process that is designed t o provide training and technical assistance, as well as oversight, to the districts. Throughout the implementation of the Carl Moyer Program, ARB completes desk reviews of d istrict programs, on-site monitoring, and audits. Desk reviews include revie wing project data to ensure

emissions reductions and cost-effectiveness meet Ca rl Moyer Program Guidelines, and are real, surplus, enforceable, and quantifiable. At a minimum, the project data review shall occur when a district obligates funds on June 30 one year after the award of funds, and on June 30 two years after the award of funds. During the project data review, any Carl Moyer Program funds expended on a project or p ortion of a project that ARB finds, through its monitoring and auditing of districts, t o not be eligible shall be documented as a finding in the district’s audit. The ARB will wo rk closely with the district to determine the appropriate action necessary to rectify the inc orrect project selection. If the correction is not made by the district, the distric t will be deemed “at risk.”

The ARB also reviews all districts’ Carl Moyer Prog ram policy and procedures manuals to ensure they are consistent with Carl Moyer Progr am rules, guidelines, and advisories. This review shall be completed at the time of the i nitial report, and when determined necessary by ARB.

The ARB shall complete on-site monitoring on at lea st 5 percent of district projects, that were funded in the last completed funding cycle, fo r at least 4 districts per year. Due to statistical significance in random sampling, ARB ma y monitor up to 100 percent of theII-40 PROGRAM ADMINISTRATION

projects of a district if the district funds 20 or less projects per year. During the on-site monitoring, ARB shall review and verify that projec t data, emission reductions and cost-effectiveness meet Carl Moyer Program Guidelin es and advisories, and all emission reductions are real, quantifiable, and sur plus. The ARB’s on-site monitoring includes randomly selecting a sample of at least 5 percent of the projects funded in one funding cycle, completing an on-site file review, a nd project field review for each sampled project. The on-site monitoring also inclu des reviewing the implementation of the district’s local program for consistency with C arl Moyer Program Guidelines, advisories, and the district’s policies and procedu res manual. This includes reviewing administrative (i.e. fiscal) controls.

Auditing is a periodic formal process designed to a ssess each district’s implementation of the Carl Moyer Program and that its implementati on is consistent with all applicable rules, regulations, and guidelines, including the d istrict’s own policies and procedures manual. Audits may be fiscal, programmatic, or bot h. A district may be audited with or without a previous monitoring or auditing. For exa mple, the State Bureau of Audits may audit a district whether or not ARB has previously monitored or audited the same district. An audit may include all components of b oth desk and on-site reviews. The ARB may include an audit of the Carl Moyer Program with any other scheduled ARB audit of a district. The ARB may also designate a third party auditor to perform the

audit.

At the conclusion of monitoring and/or auditing, AR B shall provide the district with a written report. This written review shall include, if applicable, any deficiencies in the district’s program that require correction. The di strict will have 30 calendar days, from the date of the written report, to correct the defi ciencies and respond in writing to the report. The ARB staff will provide the district wi th the opportunity for training and technical assistance to develop and implement a cor rective action plan. If ARB determines the district has not taken adequate corr ective action within the allotted 30 days, the district will be deemed “at-risk”; the district shall not be eligible to apply for future funding; and ARB shall hold at least one pub lic meeting to consider public comments prior to recapturing all Carl Moyer Progra m funds that have not been obligated by the district. When recapturing projec t funds, ARB may also recapture administrative funds associated with the project fu nds. The ARB shall reallocate those funds to districts that are eligible to receive add itional funds based on applications for the same fiscal year.

B. ARB Administrative Action

The administrative actions described in this sectio n are the procedures ARB shall follow to recapture funds. The HSC section 44287(k), requ ires any funds not expended by a district by June 30 of the second calendar year fol lowing the date of the reservation, to

revert back to the ARB as of that June 30. Those f unds shall be recaptured and

reallocated to another district or districts based on applications for the same fiscal year. The HSC section 44287(k) also requires that any dis trict whose allocation has beenII-41 PROGRAM ADMINISTRATION

recaptured remain eligible to reserve funds for loc al administration of the Carl Moyer Program.

1. “At-Risk” Districts

Any and all districts that have not provided an ann ual report documenting the obligation

of all of their funding by June 30 of the year following t heir award are defined as an “at-risk” district. Any district that has been ide ntified as “at-risk” by ARB will receive a letter from ARB by July 30 of the year following th e district’s award (or as soon thereafter as practically possible) stating the rea son the district has been identified as

“at-risk.” The ARB notification letter will also r equire the district to develop and submit an acceptable remedial plan within 30 calendar days from the date the district receives notification (sent certified mail) from ARB.

2. Submittal of a Remedial Plan

The remedial plan shall include all of the followin g:

• An outline of milestones the district will follow to fully obligate the remainder of their allocation by December 30.

• An outline of milestones to completely expend the funds by the second June 30 following their award.

• An annual report documenting the amount of match a nd Carl Moyer Program funds the district has obligated to date.

Upon receipt of the remedial plan, ARB will review and approve or disapprove the plan as acceptable. If a district does not submit an ac ceptable plan within 30 calendar days, the ARB shall begin administrative action to recapt ure the funds from that district. When recapturing project funds, ARB may also recapt ure administrative funds associated with the project funds. The ARB will re allocate those funds to districts that are eligible to receive additional funds based on a pplications for the same fiscal year.

3. ARB Assistance to Meet Acceptable Remedial Plan

Once an acceptable remedial action plan is submitte d by an “at-risk” district, ARB will provide the district with technical assistance to a nd monitor the district’s progress in meeting the milestones in the remedial plan. This will require the “at-risk” district to update and submit reports on progress in meeting th eir milestones as required by ARB. If the “at-risk” district falls 30 or more days beh ind its remedial plan, ARB will take administrative action to recapture the remaining un obligated Carl Moyer Program funds

from that district. Those funds will be reallocate d to districts that are eligible to receive additional funds based on applications for the same fiscal year.II-42 PROGRAM ADMINISTRATION 4. Obligation and Expenditure of Match Funds

If a district has obligated funds from an allocatio n, and any of the allocation has been recaptured by the ARB, the district remains respons ible for obligating and expending all of the required match for the obligated amount of t he allocation. No further disbursements from any allocation will be made to a district that has an outstanding match requirement from any previous allocation.

C. ARB Allocation of Recaptured District Funds

When ARB recaptures funds in any fiscal year, ARB w ill only consider the districts that have applied for and have sufficient match to accep t additional funding for the same year and type of (district or multi-district) alloc ation. The ARB will not consider any

districts that are “at-risk” at the time of this al location. The ARB is not able to reallocate funds to any district receiving the minimum award o f $200,000 unless that district is able to provide match funds for the minimum award of $20 0,000 plus any additional funds applied for.

Once ARB has a list of districts with sufficient ma tch and that are not “at-risk,” ARB will use the following steps to allocate the recaptured funds to the district(s) that are eligible

to receive an additional award.

• The ARB will first try to allocate funds to distri cts that are located in the same air

basin as the district from which the funds have bee n recaptured.

• If there are no districts in the air basin that ha ve sufficient match and are in good standing, then ARB will allocate the funds to distr icts that have projects that travel through the same air basin as the district from whi ch the funds were recaptured.

• If there are no districts that have projects that travel through the same air basin, ARB will allocate the recaptured funds to the districts that have already obligated all of their allocation of that same FY funds; and, are th e first, or among the first, to propose a Carl Moyer Program eligible and viable pr oject, which will be completed (funds obligated and expended) within two years of the original allocation of the

reallocated funds.

The new allocated funds must be spent in the same c ategory (district or multi-district) from which they came. These funds may or may not i nclude the administration funds originally associated with them.

D. Report to the Board

The Carl Moyer Program staff shall report to the Bo ard annually on the progress in implementing the Carl Moyer Program. This report w ill provide the general public withII-43 PROGRAM ADMINISTRATION

another opportunity to be advised of the results of the program. This report shall include the following topic areas:

• Total applications received for current year’s fun ds.

• Efforts and results of outreach to potential envir onmental justice, zero-emission projects, and small business project owners.

• The status of the obligation and expenditure of th e current year’s funds statewide and by district.

• The status of the obligation and expenditure of pr evious years’ funds statewide and by district.

• District and ARB monitoring and auditing efforts a nd results, including any audits completed by independent third parties.

• The status of emissions reductions by projects in the implementation phase of their contracts, including reasons for and solutions to s hortfalls for projects that do not perform as projected.

• Outstanding features and accomplishments of the di stricts and ARB.

• Challenges for the districts and ARB in implementi ng the Carl Moyer Program.

The ARB encourages the districts to report to their governing boards in a similar

fashion.

XII. References

ARB, 1998. Air Resources Board. ARB 1998 Criteria and Guidelines for the Use of Motor Vehicle Registration Fees. http://www.arb.ca.gov/planning/tsaq/mvrfp/criteria/ criteria.htm

ARB, 2002. Air Resources Board and Office of Envir onmental Health Hazard Assessment. Staff Report: Public Hearing to Consid er Amendments to the Ambient Air Quality Standards for Particulate Matter and Sulfat es. ftp://ftp.arb.ca.gov/carbis/regact/aaqspm/isor.pdf

ARB, 2005. Air Resources Board. Staff Report: Rev iew of California Ambient Air Quality Standards for Ozone. ftp://ftp.arb.ca.gov/ carbis/regact/ozone05/isorv3.pdf

Avol, E.L., et al. 2001. Respiratory effects of r elocating to areas of differing air pollution

levels. Am J Respir Crit Care Med, 164: 2067-2072.II-44 PROGRAM ADMINISTRATION

Gauderman, W.J., et al. 2002. Association between air pollution and lung function growth in Southern California children: Results fro m a second cohort. Am J Resp Crit Care Med, 166(1): 74-84.

McConnell, R., et al. 2002. Asthma in exercising children exposed to ozone: A cohort study. Lancet, 359: 386–391.

Peters, A., D.W. Dockery, J.E. Muller, and M.A. Mit tleman. 2001. Increased particulate air pollution and the triggering of myocardial infa rction. Circulation ; 103: 2810-2815.

# THE CARL MOYER PROGRAM GUIDELINES

PART II of IV



# PROJECT CRITERIA

Approved Revision 2005 November 17, 2005TABLE OF CONTENTS

Chapter One –Heavy-Duty On-Road Vehicles ........... ..................................................I -1

Chapter Two –Heavy-Duty On-Road Fleet Modernization ..........................................II-1

Chapter Three – Reducing Idling Emissions from Heav y-Duty Vehicles....................III-1

Chapter Four – Transport Refrigeration Units .......

................................................... . IV-1

Chapter Five – Compression-Ignition Off-Road Equipm ent ....................................... V-1

Chapter Six – Large Spark-Ignition Off-Road Equipme nt.......................................... VI-1

Chapter Seven – Airport Ground Support Equipment ... ........................................... VII-1

Chapter Eight – Locomotives ........................

................................................... ....... VIII-1

Chapter Nine – Marine Vessels......................

................................................... ........ IX-1

Chapter Ten – Agricultural Sources .................

................................................... ....... X-1

Chapter Eleven – Light-Duty Vehicles...............

................................................... ..... XI-1

Chapter Twelve – Zero-Emission Technologies........ ............................................... XII- 1I-1 ON-ROAD HEAVY-DUTY VEHICLES Chapter One

ON-ROAD HEAVY-DUTY VEHICLES

This chapter addresses the project criteria for on- road heavy-duty vehicles (HDVs). It

also contains a brief overview of the HDV emission inventory, current engine emission standards and regulations impacting HDVs available control technologies, potential projects eligible for funding, and cost-effectivene ss calculations. Since the 2003 Guidelines, the Air Resources Board (ARB or Board) has adopted many regulations that affect existing heavy-duty vehicles. The project c riteria in this chapter have been updated to reflect these new regulatory requirement s. The Carl Moyer Program provides financial incentives to pay for the increm ental cost of cleaner-than-required HDV purchase of new vehicles, repowers, and retrofi ts.

I. Introduction

On-road HDVs encompass a large variety of vehicles such as buses, solid waste collection vehicles (SWCV), street sweepers, delive ry trucks and more. These vehicles are typically categorized by weight. Vehicles grea ter than 8,501 pounds (lbs) gross vehicle weight rating (GVWR) are considered to be H DVs which can also be subcategorized as light heavy-duty (LHD), medium he avy-duty (MHD) and heavy heavy-duty (HHD) vehicles (see Table 1-1).

Table 1-1 Heavy-Duty Vehicle Classifications

Vehicle Classification GVWR Light Heavy-duty (LHD) 8,501 < 14,000 lbs Medium Heavy-Duty (MHD) 14,001 < 33,000 lbs Heavy Heavy-Duty (HHD) 33,001 or more lbs

HDVs can also be further categorized by use and fue l type. Regulations traditionally refer to the vehicle usage type such as SWCVs, urba n buses, and public fleets. Section III of this chapter provides information on regulations that currently impact these

vehicles.

Fuel types for HDVs include diesel, alternative die sel fuels, compressed natural gas (CNG), liquefied natural gas (LNG), liquefied propa ne gas (LPG), gasoline and electricity. The majority of HDVs are powered by c ompression-ignition engines typically fueled with diesel fuel. This preference for diese l engines presents an air quality challenge since diesel emissions of oxides of nitro gen (NOx) and particulate matter (PM) have not been controlled to the extent that ga soline-fueled vehicle emissions have, particularly for light and medium-duty vehicl es. Furthermore, HDVs involved in the transport of goods typically accrue higher annu al mileage than other vehicles.I-2 ON-ROAD HEAVY-DUTY VEHICLES

Consequently, the share of total emissions from HDV s is disproportionately higher than their population would suggest.

II. Emissions

Even though the population of all HDVs, including u rban buses, account for approximately one percent of all on-road vehicles, they emit about 55 percent of the on-road statewide NOx emissions, 14 percent of the statewide reactive organic gases (ROG) emissions and 35 percent of the statewide PM1 0 emissions. As shown in Table 1-2, the NOx, ROG and PM10 annual emissions f rom HDVs will decrease through 2010. However, it is important to note tha t emissions from other on-road motor vehicle categories will also decrease, and by 2010, HDVs will contribute an even larger

share of the emissions from motor vehicles. In add ition, daily vehicle miles traveled (VMT) by HDVs are projected to increase by about 11 percent from 2005 to 2010. Clearly, emissions from heavy-duty vehicles have to be reduced further if California is to achieve its air quality goals.

Table 1-2 Heavy-Duty Vehicle Annual Emissions* Vehicles Greater than 8,500 Pounds

VMT NOx

tpd ROG

tpd PM10

tpd

2005 61,446,000 839 107 18

2010 69,112,000 654 84 15

* 2005 Almanac

III. Regulatory Requirements

All HDVs sold in California have engines that have been certified to specific standards. Those standards are, in general, consistent nationw ide and are discussed below. Urban transit buses are an exception, having more s tringent requirements than other HDVs until the two standards align in 2007. All pu rchases of new vehicles funded by the Carl Moyer Program must be surplus to these min imum requirements.

In addition, the ARB has developed, or is in the pr ocess of developing, additional regulations which will overlay these new engine sta ndards for specific categories. These categories, discussed below, include transit vehicles, SWCVs, school buses, public fleets and private fleets. Any Carl Moyer P rogram project must be surplus to these regulations.

A. Emission Standards

Engine emission standards have progressively and su bstantially reduced NOx and PM emissions from HDVs. Table 1-3 lists the existing and future NOx and PM emission standards for heavy-duty engines as found in Title 13, California Code of RegulationsI-3 ON-ROAD HEAVY-DUTY VEHICLES Table 1-3 Emission Standards for Heavy-Duty Diesel Engines (grams per brake horsepower-hour (g/bhp-hr))

(1) NOx plus NMHC (2) NOx plus NMHC with 0.5 g/bhp-hr NMHC cap (3) Between 2007-2009, U.S. EPA requires 50 percent of heavy-duty diesel engine family certifications to meet the 0.2 g/bhp-hr NOx standard. Averaging is allowed, a nd it is expected that most engines will conform to the fleet NOx average of approximately 1.2 g-bhp/hr. (4) Optional Standard sunsets on December 31, 2006

(CCR), section 1956.8 [ARB, 2002a]. Urban buses ha ve a separate set of standards and are shown in Table 1-4 as found in Title 13, CC R, section 1956.1 [ARB, 2002b].

Table 1-4

Emission Standards for Urban Buses

(g/bhp-hr)

(1) Standard applies to urban bus equipped with die sel-fuel, dual fuel, or bi-fuel engines. (2) NOx plus NMHC (3) NOx plus NMHC with 0.5 g/bhp-hr NMHC cap (4) Between 2007-2009, U.S. EPA requires 50 percent of heavy-duty diesel engine family certifications to meet the 0.2 g/bhp-hr NOx standard. Averaging is allowed, and i t is expected that most engines will conform to the fleet NOx average of approximately 1.2 g-bhp/hr. (5) Standard sunsets on December 31, 2006

B. Fleet Regulation for Transit Agencies

1. Transit Fleet Vehicles

The fleet regulation for transit agencies was amend ed by the Board on February 24, 2005 [ARB, 2005]. This regulation imp acts vehicles owned or operated by a transit agency. The specific transit fleet vehic les impacted are on-road vehicles 8,501 pounds GVWR or greater powered by a heavy-dut y engine fueled by diesel or

Diesel Urban Bus Alt Fuel Urban Bus Alt Fuel Urban Bus Optional Standard (5)

Model Year NOx PM NOx PM NOx + NMHC PM

2004 - 2006 0.5 (1) 0.01 2.4 (2) or 2.5 (3) 0.01 1.8 - 0.3 0.03 - 0.01

2007 1.2 (4) 0.01 1.2 (4) 0.01 

## - -

2010 0.2 0.01 0.2 0.01 

## - -

Heavy-Duty Vehicles Heavy-Duty Optional Standard (4 )

Model Year NOx PM NOx + NMHC PM

2004 - 2006 2.4 (1) or 2.5 (2) 0.1 1.8 - 0.3 0.03 - 0.01

2007 1.2 (3) 0.01 

## - -

2010 0.2 0.01 

## - -I-4 ON-ROAD HEAVY-DUTY VEHICLES

alternative fuel that are not urban buses. Transit agencies operating only gasoline-powered vehicles are not subject to this r egulation.

The regulation establishes a fleet average NOx stan dard and PM emission reduction requirement for transit fleet vehicles phased-in be tween 2007 and 2010. Transit fleet vehicles are subject to the heavy-duty diesel engin e emission standards and not the urban bus engine exhaust emission standards.

A transit agency must meet NOx emission averages of 3.2 g/bhp-hr by December 31, 2007, and 2.4 g/bhp-hr by December 31, 2010, from its transit fleet vehicles. A transit agency must also reduce diesel PM emissions of its transit fleet vehicles by 40 percent as of December 31, 2007, and 80 percent as of December 31, 2010, compared to the agency’s baselin e emissions as of January 1, 2005.

2. Urban Bus

An urban transit bus is a passenger-carrying vehicl e powered by a heavy heavy-duty diesel engine with a load capacity of fifteen or mo re passengers and intended primarily for short rides and frequent stops. Urban transit buses statewide are subject to ARB’s Public Transit Agency Vehicle regulation amended in 2005. The regulation required transit agencies that own, operate or lease urban b uses to choose a diesel fuel or alternative fuel path and follow the requirements a s described for each fuel path.

Agencies on the alternative fuel path are required to:

• Purchase or lease alternative fuel buses that meet the current standards for 85 percent of the annual purchases made by the agen cy, through 2015.

• Only purchase new buses with an engine certified t o an optional PM standard of 0.03 g/bhp-hr or lower.

• Agencies established before January 1, 2005 that a re on the alternative-fuel path shall not operate an active fleet of urban buses wi th:

- Average NOx emissions in excess of 4.8 g/bhp-hr, ba sed on the engine certification standards of the engines in the activ e fleet.

- Diesel PM emission totals exceeding: (1) 40 percent of the agency’s January 1, 2002 dies el PM average beginning January 1, 2007. (2) 15 percent of the agency’s January 1, 2002 dies el PM average beginning January 1, 2009.

Agencies on the diesel fuel path are required to:

• Purchase a diesel-fueled, dual-fueled or bi-fueled bus with 2004-2006 MY engines certified to 0.5 g/bhp-hr of NOx and 0.01 g/bhp-hr of PM or an alternative fuel bus with an engine certified to an optional PM standard of 0.03 g/bhp-hr or lower.

• Agencies established before January 1, 2005 that a re on the diesel fuel path shall not operate an active fleet of urban buses with:I-5 ON-ROAD HEAVY-DUTY VEHICLES

- Average NOx emissions in excess of 4.8 g/bhp-hr, b ased on the engine certification standards of the engines in the activ e fleet.

- Diesel PM emission totals exceeding: (1) 40 percent of the agency’s January 1, 2002 dies el PM average beginning January 1, 2005. (2) 15 percent of the agency’s January 1, 2002 dies el PM average or equal to 0.01 g/bhp-hr times the total number of current die sel-fueled active fleet buses whichever is greater beginning January 1, 200 7.

Agencies established after January 1, 2005, regardl ess of which path they choose, shall not operate an active fleet of urban buses with:

• Average NOx emissions in excess of 4.0 g/bhp-hr, o r the NOx average of the active fleet of the transit agency from which it was forme d whichever is lower, or in the case of a merger of two or more transit agencies or parts of two or more transit agencies, the average of the NOx fleet averages, wh ichever is lower.

• Diesel PM exhaust emissions exceeding the followin g values: (1) Through December 31, 2009, 0.05 g/bhp-hr times the total number of

diesel-fueled buses in the active fleet. (2) As of January 1, 2010, 0.01 g/bhp-hr times the total number of diesel-fueled

buses in the active fleet.

C. Solid Waste Collection Vehicles

SWCVs are on-road heavy-duty vehicles with a GVWR o f 14,000 pounds or more and are used for the purpose of collecting residential and commercial solid waste. SWCVs are subject to a statewide diesel PM control measur e adopted by the Board on September 23, 2003 [ARB, 2004]. The regulation req uires each owner to use one of the best available control technologies (BACT) as d escribed in the regulation on each engine or collection vehicle in the fleet.

BACT, as defined by the regulation, can be summariz ed as an engine or power system certified to the optional 0.01 g/bhp-hr PM standard ; an engine or power system certified to the 0.1 g/bhp-hr PM emission standard, used in c onjunction with the highest level diesel emission control system (DECS); an alternati ve fuel or heavy-duty pilot ignition engine, model year 2004 – 2006 certified to the opt ional standard; or the highest level diesel emission control strategy that is verified.

BACT compliance deadlines are phased in, and are ba sed on a group of engine model years as listed in Table 1-5. It is important to n ote that Group 2 requirements apply to specific model years (MY) based on the fleet size. Compliance deadlines begin in 2004 and continue through 2010.I-6 ON-ROAD HEAVY-DUTY VEHICLES Table 1-5 Implementation Schedule for Solid Waste Collection Vehicles,

Model Years 1960 to 2006

Group Engine Model Years Percentage of Group to Use Best

Available Control Technology Compliance

Deadline

1 1988 – 2002 10

25

50

100 December 31, 2004

December 31, 2005 December 31, 2006 December 31, 2007

2a 1960 – 1987

(Total fleet ≥ 15 collection vehicles) 15

40

60

80

100 December 31, 2005

December 31, 2006 December 31, 2007 December 31, 2008 December 31, 2009

2b 1960 – 1987

(Total fleet < 15 collection vehicles) 25

50

75

100 December 31, 2007

December 31, 2008 December 31, 2009 December 31, 2010

3 2003 – 2006 (Includes dual-fuel and bi-fuel engines) 50

100 December 31, 2009

December 31, 2010

D. Upcoming Regulations

Municipal or utility-owned on-road heavy-duty diese l-fueled vehicles, such as dump trucks, street sweepers, and aerial lift trucks are not currently regulated by a fleet rule. The Board will consider a proposed in-use diesel pa rticulate control measure for public and utility fleets in December 2005 which may impac t the project criteria for these projects. Due to low mileage, these projects are g enerally only eligible for small grant

amounts.

Private on-road heavy-duty diesel-fueled vehicle fl eets such as in-use heavy-duty trucks are not currently regulated. The Board is tentativ ely scheduled to hear a proposed diesel particulate control measure for private flee ts in 2006 which may impact the project criteria for these projects.

IV. Potential Project Types

The Carl Moyer Program can achieve emission reducti ons from heavy-duty vehicles operating in California. The project criteria are designed to ensure that the emission reductions expected through the deployment of low-e mission engines or retrofit technologies under this program are surplus, real, quantifiable, and enforceable.I-7 ON-ROAD HEAVY-DUTY VEHICLES

There are four main types of HDV projects: purchas e of new vehicle, repower, retrofit,

and alternative fuels. Each of these are discussed below.

Commercially available low-emission HDVs are consid ered suitable Carl Moyer Program projects, either as new engine/v ehicle purchases or new engine purchases for vehicle repowers. Recent statutory c hanges now allow for the potential to fund LHD projects. Due to the uncertainty of futur e requests, LHD projects will be considered initially on a case-by-case basis. If a n appreciable number of applications are received for LHD projects, ARB will develop spe cific guidance.

Diesel engines, due to their high efficiency and lo ng life, dominate the HDV markets. However, their typical lean-burn, high-compression, high-temperature operation has resulted in technical limitations for achieving sig nificant NOx emission reductions. Alternative fuel engines, especially those fueled b y CNG and LNG, have been able to

achieve NOx emissions of about half of a convention al diesel engine. Alternative fuel engines, including LPG engines, are available for M HD truck applications and HHD engines used in trash truck applications.

In 2010, both the alternative-fuel and diesel fuel standards will align at 0.2 g/bhp-hr NOx. As a result, engine manufacturer s have invested significant resources for the development of reduced-emission d iesel engines and progress has been made, especially with the integration of advan ced electronics, the use of exhaust gas recirculation, and after treatment devices. To day's generation of HD diesel engines are nearly as clean as some of the alternative-fuel engines produced prior to 2003. Nevertheless, it is likely that only alternative-fu el engines will meet the lower NOx emission standard requirements for Carl Moyer Progr am funding for the purchases of

new vehicles at this time.

The variety of alternative fuel engines available a nd the number sold in California has increased significantly. However, due to increasin gly stringent emission standards, the number of available alternative fuel engines being certified each year has decreased. As engine technology matures, the number and variet y of engines certified to the emission standards will expand. Alternative fuel v ehicles have had the most success in the urban bus market. Presently, approximately 50 percent of all bus sales in California are alternative fuel vehicles and a significant num ber of transit agencies have focused exclusively on alternative fuel buses for new bus p urchases.

A. Purchase of New Vehicle

New vehicle purchases of LNG and CNG HDVs are expec ted to continue to be the most common type of project for on-road heavy-duty vehic les under the Carl Moyer Program, although LPG vehicles continue to be an option. Th e ARB certifies engines destined for sale in California and provides the engine manufact urers with an Executive Order (EO) for each certified engine family which is used to d etermine eligibility for new vehicle purchases and engine repowers. To be eligible, the new vehicle/engine must be certified to one of the ARB’s current optional emis sion standards ofI-8 ON-ROAD HEAVY-DUTY VEHICLES

1.8 g/bhp-hr NOx + NMHC or lower through 2006, rega rdless of fuel type or engine design. Beginning in January 2007, the optional st andards will sunset, and projects for the purchase of a new vehicle must have an engine c ertified to 0.2 g/bhp-hr of NOx.

The Heavy-Duty Diesel-Engine and Vehicle Standard w ill continue to be used as the baseline for determining eligibility for on-road pu rchases of new vehicles except urban buses. Engines and vehicles certified to the Heavy -Duty Otto-Cycle Engine Standard may also be eligible for funding if certified to a level equivalent to the current optional diesel standard or 30 percent less than the current diesel standard. Since new engines are certified throughout the year, districts are en couraged to contact ARB for the most current list of eligible engines.

Purchases of new vehicles must also be beyond the r equirements of ARB’s regulations. Thus, applicants must submit evidence of compliance with the regulations or documentation to support that Carl Moyer Program fu nds will not be used to meet regulatory requirements.

Heavy-duty hybrid electric vehicle purchases are an other new vehicle purchase project type eligible for Carl Moyer Program funding. Heav y-duty hybrid-electric propulsion systems combine two motive power sources: an energ y storage system such as batteries or ultra-capacitors, and an internal comb ustion engine, turbine, or fuel cell functioning as an auxiliary power unit. An electri c motor provides partial or complete power to the wheels. In addition, energy otherwise lost as heat during braking is captured through regenerative braking to charge the energy storage system.

In order to qualify for the Carl Moyer Program, the hybrid-electric drive system must be certified using the "California Interim Certificati on Procedures for 2004 and Subsequent Model Hybrid-Electric Vehicles, in the Urban Bus an d Heavy-Duty Vehicle Classes." These test procedures provide a method to quantify the emission benefits of a hybridelectric drive system which is not possible through engine certification methods. At this time, one gasoline hybrid-electric drive system for use in urban buses is certified to the optional NOx standards at 0.6 g/bhp-hr and is class ified as an alternative fuel bus.

Average Banking and Trading (ABT) engines (i.e., al l Family Emission Limit (FEL)-certified engines) are not eligible to partic ipate in the Carl Moyer Program for new vehicle purchase projects since emission benefits f rom an engine certified to an FEL level are not surplus emissions.

B. Repower

Vehicle repower refers to the replacement of an exi sting engine with a newer engine

certified to lower emission standards. For the Car l Moyer Program, existing HDV engines, regardless of model year, must be repowere d with an ARB certified engine, Model Year 1991 or newer. Engine repowers are allo wed only when the highest available ARB verified retrofit is installed as par t of the repower project. All other eligibility criteria must also be met. Under the C arl Moyer Program, funding is notI-9 ON-ROAD HEAVY-DUTY VEHICLES

available for projects in which spark-ignition engi nes (i.e., natural gas or gasoline, etc.) are replaced with new diesel engines.

Replacement of an old mechanical engine with a newe r mechanical engine that is certified to a lower NOx emission standard may be c ost-effective. (Mechanical engines are those having mechanically-controlled injection timing. These engines are common in pre-1991 models). Some air districts have also expressed interest in mechanical-to-electronic engine repowers for on-roa d heavy-duty engines. Although substantial NOx emission reductions may occur in th ese types of projects, installation of an electronically controlled engine into a mechanic al engine platform is difficult due to the significant differences in fuel and electrical systems. Thus, mechanical-to-electronic engine repower projects will be considered on a cas e-by-case basis.

Another possible repower option is the use of an en gine that was certified to a FEL level as the replacement engine. FEL engines can be fund ed for vehicle repower projects only if they are certified to a level that is below the required emission standard. Due to the possibility of emission credits being generated from FEL engine averaging, specific guidelines must be followed when calculating emissi on reductions. These guidelines are explained in the repower portion of the Project Criteria section below.

C. Retrofit

Retrofit involves modifications to an engine and/or fuel system such that the retrofitted engine does not have the same specifications as the original engine. Retrofit projects are allowed for all engine model years, regardless of mechanical or electronic control. The most straightforward retrofit projects are add- on after treatments. ARB has approved formal verification procedures for several retrofit kits and diesel emission control strategies. The verification process is on going, and districts are encouraged to contact ARB to obtain the most current list of elig ible retrofits. Retrofits may also include engine and/or fuel system component upgrade s that could be done at the time of an engine rebuild, resulting in a lower emission configuration. See Appendix F for more detailed information regarding retrofits.

D. Alternative Fuel

Districts have the option to fund the cost differen ce between conventional diesel fuel

and an alternative fuel such as alternative-diesel fuel, CNG, LNG, and LPG with matching funds. The fuel purchase must be an integ ral part of an engine purchase, repower, or retrofit.

V. Project Criteria

Reduced-emission on-road heavy-duty vehicle project s which include the purchase of a new vehicle, vehicle engine replacement (repower), and engine retrofit, can be considered for incentive funding. The project crit eria listed below for on-road heavy-duty vehicles provide districts, fleet operat ors, transit agencies, and applicantsI-10 ON-ROAD HEAVY-DUTY VEHICLES

with the minimum qualifications for the Carl Moyer Program. The primary criteria for selection are: emission reductions, cost-effective ness, and ability for the project to be completed within the timeframe of the program. Sam ple calculations that illustrate the methodology for determining emission reductions and cost-effectiveness are included in Appendices C and D.

Participating districts retain the authority to imp ose additional requirements in order to

address local concerns.

A. General

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum of agreement/understanding with a regulatory agency, s ettlement agreement, mitigation requirement, or other legal mandate.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ PM10 reduced calculated in accordance with the co st-effectiveness methodology discussed in this chapter.

• No emission reductions generated by the Carl Moyer Program shall be used as marketable emission reduction credits, or to offset any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging banking and tra ding program.

• Projects must have a minimum project life of three years. ARB may approve a shorter project life on a case-by-case basis. Proj ects with shorter lives may be subject to additional funding restrictions, such as a lower cost-effectiveness limit or a project cost cap.

• The contract term must extend to the end of the pr oject life.

• Funded projects must have at least 75 percent of t he vehicle’s annual miles traveled

in California.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the air district suggests potential surplus, real, quantifiable and enforceable emission reducti on benefits.

• Vehicles operating under a compliance extension gr anted by the ARB, a local district, or the U.S. EPA are not eligible for fund ing.I-11 ON-ROAD HEAVY-DUTY VEHICLES

• Default project life for on-road projects are as f ollows:

School buses > 33,000 GVWR - New 20 years

Buses > 33,000 GVWR - New 12 years Other On-road - New 10 years Repowers + Retrofits 5 years Retrofits 5 years Applicants must provide documentation to justify a longer project life. The default project life does not consider upcoming regulatory requirements. Project life may be shorter due to regulatory requirements.

• On-road heavy-duty diesel vehicles with a gross ve hicle weight rating between 8,501 and 14,000 pounds may be considered for Carl Moyer Program funding for new, repower and retrofit projects on a case-by-cas e basis.

• All engines in new vehicle purchases and repower p rojects must be certified by the ARB for sale in California and must comply with dur ability and warranty requirements.

• All aftermarket emission controls (retrofits) must be verified by ARB.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

B. Compliance Check

After the district receives an application for any on-road repower or retrofit project but before the district APCO signs an agreement for fun ding a project, the district must submit information regarding the project to ARB to check for outstanding violations. The process for completing the compliance check is as f ollows:

• The district shall email its ARB district liaison the registered owner’s name, vehicle identification number, California Highway Patrol nu mber, Department of Transportation number or Interstate Commerce Commis sion number for each engine to be repowered or retrofitted in the projec t. Due to the large number of vehicles that could require compliance checks, dist ricts are encouraged to submit this data as soon as possible after receipt of the application.

• The liaison will forward that information electron ically to the responsible parties at

ARB. The liaison will email the district the resul ts of the compliance check within seven working days.

• If the compliance check indicates there is an outs tanding violation the district shall inform the engine owner in writing that no disburse ment may be made until the owner provides proof that the violation has been co rrected and the fines have been paid.I-12 ON-ROAD HEAVY-DUTY VEHICLES

• If the outstanding violation is based on problems with the baseline engine (e.g., gross polluter) the new engine must be installed (i nstead of fixing the old engine), the vehicle must be operational, the engine owner m ust pay the violation and submit documentation of the violation being corrected with , or before submitting, the

invoice.

• During inspections, districts must also check for a sticker verifying engines subject to the software upgrades for diesel trucks (i.e., chip reflash) have completed the upgrade before receiving funding.

C. Purchase of New Vehicle

The following criteria apply to all on-road new veh icle purchases

• Engines must be certified to an optional, low-emis sion standard of at least 1.8 g/bhp-hr NOx + NMHC or provide at least a 30 pe rcent reduction of NOx compared to the baseline NOx emission factors for t he specific vehicle type to claim NOx reductions from the project.

• Fleets/agencies affected by upcoming fleet regulat ions may use Carl Moyer Program funding to purchase a new vehicle if the project li fe expires prior to the final compliance date for the reductions in the regulatio n. For example, if a project with a 3-year project life is funded in December 2006, the emission reductions must be surplus to any emission reductions that are require d by any regulations that apply through December 2009.

• Fleets/agencies purchasing vehicles that will be a ffected by upcoming emission standards may use Carl Moyer Program funding to pur chase a new vehicle up to the compliance date of the new standard.

• The Heavy-Duty Diesel-Engine and Vehicle Standard will be used as the baseline for determining eligibility for the purchase of a n ew on-road vehicle. Engines and vehicles certified to the Heavy-Duty Otto-Cycle Eng ine Standard may be eligible if certified to a level equivalent to the current opti onal diesel standard or 30 percent

less than the current diesel standard.

• Through 2006, the purchase of a new vehicles is el igible for the Carl Moyer Program if the engine is certified to an optional, low-emis sion standard of 1.8 g/bhp-hr NOx + NMHC or less.

• From 2007 to 2009, the purchase of a new vehicle i s eligible for the Carl Moyer Program if the engine is certified to a 0.2 g/bhp-hr NOx emission limit.

• Engines used in any ABT program are not eligible f or funding.I-13 ON-ROAD HEAVY-DUTY VEHICLES

D. Repower

The following criteria apply to all on-road repower (engine replacement) projects.

• Repower replacement engines must be an ARB certifi ed engine with a Model Year

of 1991 or newer.

• On-road engine repowers are allowed only when the highest available ARB retrofit is installed as part of the repower project.

• If a repower project does not meet the weighted co st-effective limit due to a retrofit, then the project is only eligible for the cost up t o the weighted cost-effective limit.

• The full cost of a retrofit kit included in a repo wer project may be funded subject to the $14,300 weighted cost-effectiveness limit.

• If no retrofit is shown to be technically feasible to the district and ARB, the retrofit is not required.

• Repower projects that reduce NOx emissions must be certified by ARB to a NOx reduction level of at least 15 percent from the baseline engine to claim NOx reductions from the project.

• Fleets/agencies affected by upcoming fleet regulat ions may use Carl Moyer Program funding for repower projects if the project life ex pires prior to the final compliance date for the reductions in the regulation. For exa mple, if a project with a 3-year project life is funded in December 2006, the emissi on reductions must be surplus to any emission reductions that are required by any re gulations that apply through

December 2009.

• Funding requests for other related repowering equi pment, such as the vehicle transmission, will be considered on a case-by-case basis, based upon whether it is a necessary expense, and is at the discretion of the district.

• The replacement engine used in vehicle repower pro jects may be a new, rebuilt, or remanufactured engine. Eligible rebuilt or remanuf actured engines are those offered by the original engine manufacturer (OEM) or by a n on-OEM rebuilder who demonstrates to the ARB that the rebuilt engine and parts are functionally equivalent from an emissions and durability standpoint to the OEM engine and components being replaced. Rebuild and remanufactured engines that are not re-certified to new emission standards, shall use the emission standard s associated with the original engine block.

• For repowers, replacement engines manufactured aft er September 30, 2002, that are not certified to at least the 2.4 g/bhp-hr NOx + NMHC, orI-14 ON-ROAD HEAVY-DUTY VEHICLES

2.5 g/bhp-hr NOx + NMHC with a 0.5 g/bhp-hr NMHC ca p, are ineligible to participate in the Carl Moyer Program.

• Engines that are certified to a FEL NOx or NOx + N MHC level that is lower than the required emission standard are eligible for use in vehicle repower projects. However, the emission level that can be used in cos t-effectiveness calculations for these engines would be the applicable emission stan dards and not the FEL levels.

• Replacement engines subject to the software upgrad es for diesel trucks (i.e., chip reflash) must complete the software upgrade process before being installed in a vehicle. The cost of the software upgrade, if any, is not an eligible Carl Moyer Program expense.

• Mechanical-to-electronic engine repower projects w ill be considered on a case-by-case basis.

• Funding is not available for projects to replace s park-ignition engines (i.e., natural gas or gasoline, etc.) with diesel engines.

E. Retrofit

The following criteria apply to all on-road retrofi t projects:

• Only ARB-verified retrofits are eligible for fundi ng.

• Retrofit projects that reduce NOx emissions must b e verified by ARB to a NOx reduction level of at least 15 percent from the baseline engine to claim NOx reductions from the project.

• Retrofit projects that control PM must use the hig hest level cost-effective technology available for the equipment being retrofitted. The following are the diesel PM reductions for each ARB verified level: Level 1 (2 5 percent reduction), Level 2 (50 percent reduction), or Level 3 (85 perc ent reduction).

• Fleets/agencies affected by upcoming fleet regulat ions may use Carl Moyer Program funding for retrofit projects if the project life e xpires prior to the final compliance date for the reductions in the regulation. For example, if a project with a 3-year project life is funded in December 2006, the emission reduc tions must be surplus to any emission reductions that are required by any regula tions that apply through

December 2009.

• If the retrofit device reduces both NOx and PM emi ssions and is being installed to comply with a PM requirement, only the cost of the NOx reductions is eligible for Carl Moyer Program funding.I-15 ON-ROAD HEAVY-DUTY VEHICLES

• From 2007 to 2009, retrofits of urban buses and tr ansit vehicles will be considered on a case-by-case basis. Applicants must provide d ocumentation that the retrofit will not be used to off-set a new diesel urban bus purch ase.

• The cost of the retrofit, all filters and maintena nce needed during the project life, may be paid for with Carl Moyer Program funding pro vided it meets the weighted

cost-effectiveness limit.

F. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

G. Fuel

• Carl Moyer Program funds can not be used for fuel projects, however funds under a district's budgetary authority or fiduciary control (i.e. match funds) may be used to pay for the incremental cost of liquid or gaseous f uel, other than standard gasoline or diesel, which is integral to a covered emission reducing technology that is part of a project receiving grant funding under the Program . If all Carl Moyer Program criteria are met and the project is not a “fuel-onl y” project, the incremental cost of alternative fuel can be considered a qualified matc hing contribution from a district.

H. Glider Kits

• An engine repower for a glider kit (replacement ca b and chassis) is eligible for funding. The replacement engine must be newer than the glider kit and meet the general program criteria above.

• Glider kits are not an eligible expense under the Carl Moyer Program.

I. Heavy-Duty Trucks

Currently, most in-use heavy-duty trucks, or heavy- duty vehicles designed to carry an entire load such as long-haul, short-haul, delivery , and construction trucks, are not subject to any fleet rules. The ARB is developing a fleet rule for private heavy-duty vehicles that is tentatively scheduled to be presen ted to the Board in 2006. If approved, it may affect the project criteria for these projec ts. Eligible heavy-duty truck projects including new vehicle purchases, repowers, and retr ofits are subject to the general

criteria cited above.

• Heavy-duty trucks are eligible for funding if they meet the general program criteria

above.

• New hybrid electric vehicle (HEV) purchases will b e considered on a case-by-case
basis if the HEV is certified to the current NOx an d PM standards.I-16 ON-ROAD HEAVY-DUTY VEHICLES

J. Private Fleets

Private on-road heavy-duty diesel vehicle fleets ar e not currently regulated by a fleet regulation. The Board is tentatively scheduled to consider a proposed diesel particulate control measure for these fleets in 2006 which may affect the project criteria for these projects.

• Private fleet vehicles are eligible for funding if they meet the general program criteria

above.

K. Public and Utility Fleets

Municipal and utility-owned on-road heavy-duty dies el-fueled vehicles are not currently regulated by a fleet regulation. The ARB will cons ider a proposed diesel particulate

control measure for these fleets in December 2005 w hich may affect the project criteria for these projects. Due to low mileage, these proj ects are generally only eligible for small grant amounts.

• Public and utility fleet vehicles are eligible for funding if they meet the general program criteria listed above.

L. School Buses

School buses are vehicles used for the express purp ose of transporting students through grade 12 from home to school, school to hom e and to any school sponsored

activities.

• School buses are eligible for Carl Moyer Program f unding if they meet the general program criteria above; however, their relatively l ow annual miles traveled usually allows for minimum grant amounts.

M. Solid Waste Collection Vehicles

SWCVs are on-road heavy-duty vehicles with a GVWR o f 14,000 pounds or more that are used for the purpose of collecting residential and commercial solid waste. SWCVs are subject to a statewide in-use diesel particulat e matter airborne toxic control measure (ATCM). Projects that meet the following criteria provide emission reductions that are surplus to the regulatory requirements and may be f unded:

• Projects are subject to the general program criter ia listed above.

• Projects will be considered on a case-by-case basi s. All SWCV projects must submit compliance records as described in the SWCV rule to show that the funds will not be used to meet the rule’s requirements. The SWCV regulation requires owners to maintain compliance records including the following beginning December 31, 2004: the name of the company, address , and fleet terminal(s) namesI-17 ON-ROAD HEAVY-DUTY VEHICLES

and locations; statement of compliance; a list by v ehicle identification number of collection vehicles identifying each vehicle type, engine manufacturer, model year, family, and series; status as active fleet or back- up vehicle, and correlated to each collection vehicle; the installed diesel emission c ontrol strategy, fuel or fuel additives used as a diesel emission control strategy; and bac kup vehicle mileage. The companies must also identify out of which terminal the vehicles potentially receiving Carl Moyer Program funds operate. This information must be submitted with the application and will be forwarded to ARB by the dis tricts. ARB and/or the district will notify applicants if any additional documentation i s required.

• During 2007-2009, new SWCV purchases must meet the new vehicle purchase requirements above and must be certified to 0.2 g/b hp-hr for NOx.

• Surplus NOx reductions from retrofit projects are eligible for funding as described in

the retrofit criteria above.



### • Purchase of new vehicles, repower, and retrofit pro jects for SWCVs in group 2a (MY 1960-1987 with a total fleet of > 15 collection vehicles) of the ATCM are eligible for funding through December 31, 2006 if the follow ing are met:

− 100 percent of the vehicles in group 2a must be in compliance with the SWCV ATCM and in operation by December 31, 2006.

− 20 percent of the vehicles in group 2a would be el igible for the incremental cost of the new vehicle purchase, repower or retrofit pr oject up to the weighted

cost-effectiveness limit.

− The maximum project life for these projects is thr ee years.

• Purchase of new vehicles, repower, and retrofit pr ojects for SWCVs in group 2b (MY 1960-1987 with a total fleet of < 15 collection vehicles) of the ATCM are eligible for funding through December 31, 2007 if one of the following options are met:

− If 100 percent of the vehicles in group 2b are in compliance with the SWCV ATCM and in operation by December 31, 2006, 50 perc ent of the vehicles in group 2b would be eligible for the incremental cost of the new vehicle purchase, repower or retrofit project up to the weighted cost -effectiveness limit. The project life for 50 percent of the vehicles is three years and the remaining 50 percent is four years.

− If 100 percent of the vehicles in group 2b are in compliance with the SWCV ATCM and in operation by December 31, 2007, 25 perc ent of the vehicles in group 2b would be eligible for the incremental cost of the new vehicle purchase, repower or retrofit project up to the weighted cost -effectiveness limit. The project life for these vehicles is three years.I-18 ON-ROAD HEAVY-DUTY VEHICLES

• Purchase of new vehicles, repower, and retrofit pr ojects for SWCVs in group 3 (MY 2003-2006) of the ATCM are eligible for funding through December 31, 2007 if one of the following options are met:

− If the project is in operation by December 31, 200 6, the remaining group 3 vehicles in the fleet do not have to show complianc e with the ATCM. The project life for 50 percent of the vehicles is four years a nd the remaining 50 percent is four years.

− After December 31, 2006, 100 percent of the group 3 vehicles of the fleet must show compliance with the SWCV ATCM and be in operat ion by December 31, 2007 in order to receive funds. Fifty percent of these vehicles would be eligible for the incremental cost of the p roject up to the weighted costeffectiveness limit. The project life for these ve hicles is three years.

N. Street Sweepers and Other Stop-and-Go Vehicles

Stop-and-go vehicles, such as street sweepers, may be included in the public fleet rule scheduled to be considered by the Board in December 2005. This may affect the project criteria for these projects.

• Street sweeper projects that are surplus to regula tions are eligible for funding for the purchase of a new vehicle, repower, and retrofit pr ojects. See the general program

criteria listed above.

O. Transit Fleet Vehicles (Non-Urban Buses and Tran sit Vehicles)

Transit fleets include commuter service buses and o r transit fleet vehicles that are not urban buses. These fleets are subject to a statewi de in-use fleet rule that impacts vehicles with a GVWR of 8,501 pounds or greater and are powered by a heavy-duty engine fueled by diesel or alternative fuel that ar e owned or operated by a transit

agency.

• Projects are subject to the general program criter ia listed above.

• Projects will be considered on a case-by-case basi s. Beginning in January 2006, transit agencies are required to submit annual docu mentation of compliance with the

transit fleet rule to ARB for all transit vehicles that are not urban buses. Districts will work with ARB to determine if applicants are in com pliance with the regulatory requirements and to ensure that Carl Moyer Program funds will not be used to meet these requirements. Transit agencies are not requi red to submit any additional regulatory compliance information with the Carl Moy er Program application and will be notified if districts and/or ARB require additio nal documentation.

• Through 2006, purchases of new vehicles by transit agencies are eligible for Carl Moyer Program funding if the engine is certifi ed to the optional standard of 1.8 g/bhp-hr NOx + NMHC.I-19 ON-ROAD HEAVY-DUTY VEHICLES

• From 2007 to 2009 purchases of new vehicles are el igible for funding if the engine is certified to 0.2 g/bhp-hr NOx.

• Transit agency fleets established before January 1 , 2007 are eligible for Carl Moyer Program funds for new, repower and retro fit projects through December 31, 2007 if documentation is provided that shows: 1. The whole fleet has met the 3.2 g/bhp-hr NOx fle et average, and 2. Diesel PM reductions of 40 percent compared to J anuary 1, 2005 PM levels. These projects shall have a four year project life if installed and in operation by December 31, 2006 and a three year project life if installed and in operation by December 31, 2007.

• Transit agency fleets established before January 1 , 2007 are eligible for Carl Moyer Program funds for purchases of new vehic les, repower and retrofit projects if documentation is provided that shows: 1. The whole fleet has met the 2.4 g/bhp-hr NOx fle et average, and 2. Diesel PM reductions of 80 percent compared to J anuary 1, 2005 PM levels or equal to 0.01 g/bhp-hr times the total number of tr ansit fleet vehicles in the current fleet, whichever is greater. These projects may have the default project life.

• Transit agency fleets established after January 1, 2007 are eligible for Carl Moyer Program funds for purchases of new vehic les, repower and retrofit projects through December 31, 2007 if documentation is provided that shows: 1. The whole fleet has met the 2.4 g/bhp-hr NOx fle et average, and 2. Diesel PM reductions of 50 percent compared to t he fleet’s baseline when

established. These projects shall have a five year project life if installed and in operation by December 31, 2007, four year project life if instal led and in operation by December 31, 2008 and a three year project life if installed and in operation by December 31, 2009.

• Transit agency fleets established after January 1, 2007 are eligible for Carl Moyer Program funds for purchases of new vehic les, repower and retrofit projects beginning January 1, 2008 if documentation is provided that shows: 1. The whole fleet has met the 2.4 g/bhp-hr NOx fle et average, and 2. Diesel PM reductions of 80 percent compared to t he fleet’s baseline when

established. These projects may have the default project life.

P. Urban Transit Buses

An urban transit bus is a passenger-carrying vehicl e powered by a heavy heavy-duty diesel engine with a load capacity of fifteen or mo re passengers and intended primarily for intra-city operation, short rides and frequent stops. Urban transit buses statewideI-20 ON-ROAD HEAVY-DUTY VEHICLES

are subject to an in-use and new vehicle purchase r egulation that requires transit agencies that own, operate or lease urban buses to choose a diesel-fuel or alternative fuel path and follow the requirements a s described for each fuel path.

• Projects are subject to the general program criter ia listed above.

• Projects will be considered on a case-by-case basi s. In January of each year, transit agencies are required to submit annual documentatio n of compliance with the transit

fleet rule to ARB for all urban buses. Districts w ill work with ARB to determine if applicants are in compliance with the regulatory re quirements and to ensure that Carl Moyer Program funds will not be used to meet t hese requirements. Transit agencies are not required to submit any additional regulatory compliance information with the Carl Moyer Program application and will be notified if districts and/or ARB require additional documentation.

• For urban bus new vehicle projects, only the porti on not funded by the Federal Transit Administration (FTA) is eligible for Carl M oyer Program funding. Proper documentation must be provided. The full increment al cost for an urban transit bus that is not funded by FTA may be granted under the Carl Moyer Program. Operation and maintenance costs are not eligible for Carl Moy er Program funding.

• Through 2006, alternative fuel new bus purchases a re eligible for Carl Moyer Program funds if the engine is certified to at least the optional standard of 1.8 g/bhp-hr for NOx + NMHC.

• Through 2006, diesel fuel new bus purchases are el igible for Carl Moyer Program funds if the engine is certified to 0.2 g/bhp-hr fo r NOx.

• From 2007 to 2009 new bus purchases are eligible f or funding if the engine is certified to 0.2 g/bhp-hr NOx.

• All urban bus fleets established before January 1, 2005 are eligible for Carl Moyer Program funds for the purchase of a new bus, repower and retrofit projects if documentation is provided that shows: 1. The whole fleet has met the 4.8 g/bhp-hr NOx ave rage, and 2. PM reductions of 85 percent compared to January 1, 2002 PM levels or equal to 0.01 g/bhp-hr times the total number of current die sel-fueled active fleet buses, whichever is greater. These projects may have the default project life.

• All urban bus fleets established after January 1, 2005 are eligible for Carl Moyer Program funds for the purchase of a new bus, repower and retrofit projects through December 31, 2006 if documentation is provided that shows: 1. The whole fleet has met the 4.0 g/bhp-hr NOx ave rage, and 2. May not have a diesel PM emission total exceedin g 0.05 g/bhp-hr (exhaust emission value) times the total number of diesel-fu eled buses in the active fleet.I-21 ON-ROAD HEAVY-DUTY VEHICLES

These projects shall have a three year project life if installed and in operation by December 31, 2006.

• Urban bus fleets established after January 1, 2005 are eligible for Carl Moyer Program funds for the purchase of a new bus, repower and retrofit projects if documentation is provided that shows: 1. The whole fleet has met the 4.0 g/bhp-hr NOx ave rage, and 2. May not have a diesel PM emission total exceedin g 0.01 g/bhp-hr (exhaust emission value) times the total number of diesel-fu eled buses in the active fleet. These projects may have the default project life.

• New hybrid electric bus (HEB) purchases will be co nsidered on a case-by-case basis, if the HEB is certified to the current NOx a nd PM standards.

VI. Cost-Effectiveness Calculations

To receive Carl Moyer Program funding, each project must meet the maximum cost effective threshold of $14,300 per weighted to n of covered pollutants reduced. Only funds provided by the Carl Moyer Program and l ocal district matching funds are to be used in determining cost-effectiveness.

The emission factors in the tables of Appendix B re flect preliminary data developed by ARB staff as part of a comprehensive effort to upda te the emissions models used for

on-road motor vehicles and off-road mobile sources. These draft data were made available on ARB's website in early 2005, but are s ubject to change as staff completes its analyses and the associated model development. Appropriate emission factors as a function of vehicle type and model year are illustr ated in Appendix B. ARB staff will issue Carl Moyer Program Advisories to update the t ables as necessary.

The converted emission standards used in the calcul ations are the standards described in the emission standard section of this chapter th at have been adjusted using the fuel correction factors and NOx fraction factors in Appe ndix B. It is important to note that

urban buses have different standards than other hea vy-duty vehicles.

Examples

On-road project calculations are generally mileage based. However, some projects such as stop-and-go vehicles can use fuel-based cal culations.

For a purchase of a new vehicle, the baseline will be an engine certified to the current standard. The reduced technology will be an engine certified to the current optional standard or 30 percent less than the current standa rd. For repower projects, the baseline will be the model year of the existing eng ine that would have been rebuilt. The reduced technology will be the engine certified to at least 5.0 g/bhp-hr of NOx that will be installed instead of the rebuilt engine. The ba seline for a retrofit project is theI-22 ON-ROAD HEAVY-DUTY VEHICLES

existing engine. The reduced technology is the ver ified level of emission reductions for

the retrofit.

A detailed description of how to calculate cost-eff ectiveness can be found in Appendices C and D.

VII. Minimum Project Application Requirements

A. Application

The applicant must provide the minimum information listed in Table 1-6.

A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.I-23 ON-ROAD HEAVY-DUTY VEHICLES Table 1-6 Minimum Application Requirements for On-Road Heavy- Duty Vehicle Projects

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contract Phone Number Person with Contract Signing Authority Person who Filled out Funding Application Project Address (if different from above)

Vehicle Information Vehicle Type (Solid Waste Collection Vehicle, Street Sweeper, School Bus, Urban Bus, Other Transit Vehicle, Other Heavy-Heavy Duty Vehicle, Other Medium-Heavy Duty Vehicle, or Other Light-Heavy Duty Vehicle) Vehicle Identification Number (VIN)

Vehicle Make

Vehicle Model

Model Year
Vehicle GVWR

Vehicle License Plate Number Department of Transportation Number (if interstate) California Highway Patrol CA Number Projected Year of Purchase of New Vehicle

Baseline Vehicle Fuel New Vehicle Vendor (optional)

Activity Information Percent Operation in California Percent Operation in District Project Life

Annual Miles Traveled or Gallons Fuel Used

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional)

ADDITIONAL INFORMATIONNEW PURCHASE PROJECTS ONLY Engine Make Engine Model Engine Year Engine Serial Number NEW PURCHASE (cont.) ARB Certification Executive Order (if Engine Certified to Alt. NOx Standard) Fuel Type Baseline Fuel Type for Main and (if applicable) Auxiliary Engine Auxiliary Engine Make, Model, Year, Serial Number, Horsepower, Tier, Fuel, and Family (if applicable)

Baseline Cost

New Vehicle Cost

ADDITIONAL INFORMATIONREPOWER PROJECTS ONLY

Baseline Main Engine Family Engine Make Engine Model Engine Year Engine Serial Number Fuel Type

Reduced Emission Main Engine Family Engine Make Engine Model Engine Year Engine Serial Number Fuel Type
ARB Executive Order Number (If Engine Certified to Alt NOx Standard) Baseline and Reduced Auxiliary Engine Make, Model, Year, Serial Number, Horsepower, Tier, and Engine Family (if applicable) Engine Remanufacture Cost Newer Engine Cost Newer Engine Installation Cost

ADDITIONAL INFORMATIONRETROFIT ONLY Engine Family, Make, Model, Year, and (if applicable) Tier Engine Serial Number Fuel Type

Retrofit Device Make and Serial Number

ARB-Verified Retrofit Device
Retrofit Device ARB Executive Order
Retrofit Device Serial Number Verification Level (Level 1, 2 or 3) ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)

Retrofit Device Cost Cost of Retrofit Installation (optional) Cost of Retrofit Maintenance for Project Life (optional)I-24 ON-ROAD HEAVY-DUTY VEHICLES

B. Reporting and Monitoring

Reporting and monitoring requirements for districts are described in the Administrative Chapter of these Guidelines.

Fleet operators and transit agencies participating in the Carl Moyer Program are required to keep appropriate records during the lif e of the funded project as determined by the district and ARB. Records must contain, at a minimum, total miles traveled in and outside of California, fuel usage, and maintena nce and repair information. Records must be retained and updated throughout the project life and made available at the request of the district or ARB.

VIII. References

ARB, 2002a. Air Resources Board. December 12, 200 2. California Exhaust Emission Standards and Test Procedures for 1985 through 2003 Model Heavy-Duty Diesel Engines and Vehicles. http://www.arb.ca.gov /msprog/onroadhd/85- 03hddtps_levhdg02_clean_11-14.doc

ARB, 2002b. Air Resources Board. December 12, 200 2. California Exhaust Emission Standards and Test Procedures for 2004 and Subseque nt Model Heavy-Duty Diesel Engines and Vehicles. http://www.arb.ca.gov/msprog/onroadhd/2004hddtps_le vhdg02_clean_11-13.doc

ARB, 2004. Air Resources Board. June 4, 2004. Di esel Particulate Matter Control Measure for On-road Heavy-duty Diesel-fueled Reside ntial and Commercial Sold Waste Collection Vehicles. http://www.arb.ca.gov/regact/ dieselswcv/fro2.doc

ARB, 2005. Air Resources Board. January 7, 2005. Staff Report: Proposed Modifications to the Fleet Rule for the Transit Age ncies and New Requirements for Transit Fleet Vehicles. http://www.arb.ca.gov/regac t/bus04/isor.pdfII-1 FLEET MODERNIZATION Chapter Two

HEAVY-DUTY ON-ROAD FLEET MODERNIZATION

This chapter adds a fleet modernization source cate gory to the Carl Moyer Program. Fleet modernization provides incentives to replace old high-polluting heavy-duty vehicles with newer, lower emission replacement veh icles. The fleet modernization source category provides real emission benefits by retiring the high polluting vehicle earlier than would have been expected through norma l attrition. Carl Moyer Program funds for fleet modernization projects are used to offset part of the cost of the replacement vehicle. Project funds also pay for a diesel particulate emission reduction

device to further reduce emissions and an electroni c monitoring unit to verify miles

traveled in California and the district. An additi onal vehicle replacement strategy

included in fleet modernization is the tiered trans action. A tiered transaction project combines the purchase of a new vehicle certified to the optional NOx standard by one owner with the replacement of an old vehicle by a s econd owner.

I. Introduction

Heavy-duty diesel trucks are durable and stay in op eration for an average of 18.5 years. Old trucks contribute disproportionately to the sta te’s NOx, ROG, and PM10 emissions. Pre-1990 heavy-duty trucks emit one and a half time s as much NOx and two and a half

times as much PM10 as a truck that meets current st andards. These old trucks tend to be driven by relatively low-income operators and ar e concentrated in specific industrial sectors. Generally, the income generated from the old trucks operating in low paid vocations does not justify the purchase of a newer truck, even with the improved fuel economy, reduced maintenance costs, and fewer downt ime expenses of a newer truck. These old trucks continue operating until they dete riorate to a point that it does not make economic sense to repair them.

The Carl Moyer Program for on-road vehicles was des igned to pay for the incremental purchase cost of a new vehicle that is cleaner than the required emission standards. However, the owners of the oldest trucks cannot aff ord to buy a new vehicle that qualifies for incentive funds. It is unlikely that the old truck owners would be willing to

invest in a newer truck since the old truck is stil l operating. In addition, operators of old

trucks do not have an incentive to sell their truck s since the market price for the old trucks is undervalued relative to its utility to th e truck owner. Traditional scrap programs, which provide incentives to scrap a vehic le, may not lower emissions from the old, heavy-duty sector because the old, scrappe d truck is likely to be replaced with

another affordable old truck.

Recognizing that resources were not available to ge t old, high polluting vehicles off the road, AB 1394 was passed in 2004 directing ARB to c onsider fleet modernization as a potential project under the Carl Moyer Program. As such, the Air Resources Board (ARB or Board) has created a source category that p rovides incentive funds to replace old vehicles that were unlikely to be removed from operation with newer, cleaner vehicles. The incentives provided by the Carl Moye r Program change the economics ofII-2 FLEET MODERNIZATION

vehicle replacement, making it economically feasibl e for owners who could not previously justify the expense.

II. Emissions

According to ARB’s motor vehicle inventory, 1990 an d older vehicles account for 33 percent of California’s heavy-duty fleet. This equates to about 58,800 pre-1991 and older heavy-duty vehicles traveling over four milli on miles per day statewide. In 2005,

these vehicles will emit about 107 tons of NOx and three tons of PM10 per day, as

reflected in Table 2-1. The number of these old tr ucks will decrease to slightly over 32,000 by 2010, but this gradual decline is not suf ficient if California is to achieve its air quality goals. This is of particular concern becau se emissions from older trucks often occur in environmental justice areas, such as ports , which are heavily impacted by high

volumes of truck traffic.

Table 2-1

Statewide Calendar Year 2005 Contribution of Pollutants by On-Road Heavy-Duty Ve hicles

1990 Model Year and Older*

Population NOx ROG PM10

2005 58,775 107 6 3

2010 32,155 43 3 1

*EMFAC2002 v2.2 (April 03)

Using data from the United States Census Bureau 200 2 Economic Census - Vehicles and Use Survey [U.S. Census Use Survey], ARB staff determined that in California there are specific industrial sectors that have the highest concentration of old vehicles. Most significant to the fleet modernization categor y are the vocations with the highest numbers of 1990 and older trucks in service. Appro ximately 60 percent of the mining fleet is 1990 and older; 55 percent of the trucks e ngaged in agriculture and forestry are 1990 and older; and, 43 percent of the construction fleet is 1990 and older. In addition to these fleets, it is widely recognized that haule rs moving goods from California’s ports and rail yards utilize the oldest trucks in the fle et.

The concentration of old trucks in specific vocatio ns generally occurs through a series of

sales of the individual trucks. Trends in the indu stry show that fleets which normally

utilize new trucks turn over their trucks in three to five years. The vehicles are then sold to operators that drive high mileage in a well-paid vocation. After several years of use, the vehicle is sold again, moved into a low-paid, l ow-mileage sector and driven until it deteriorates to the point where it does not make ec onomic sense to repair it. The owners of the oldest vehicles tend to buy another o ld vehicle to replace the truck that has deteriorated, and do not normally purchase a ne w or newer vehicle. Data from the U.S. Census Use Survey supports this claim: four o ut of five newer trucks (<5 years old) are purchased as new vehicles, while four out of five old trucks (>15 years old) are purchased as used vehicles.II-3 FLEET MODERNIZATION

III. Regulatory Requirements

To help meet California’s air quality goals, the AR B has adopted engine emission standards and several mobile source fleet regulatio ns that apply to on-road trucks. In addition, ARB is currently drafting regulations tha t will be considered by the Board in late 2005 and 2006. Recently adopted regulations demonstrate the Board’s increased

commitment to reduce emissions from the in-use flee t. The standards and regulations, which may impact eligibility for all heavy-duty, on -road projects, including fleet modernization, are included in Chapter One. All Ca rl Moyer Program project emission reductions must be surplus to regulatory requiremen ts. Applicants from fleet categories must be especially cognizant of the impact of recen tly adopted and upcoming requirements, such as solid waste collection vehicl es and public and utility fleets.

Public and private, on-road, heavy-duty, diesel-fue led vehicle fleets, such as in-use heavy-duty trucks, are not currently regulated. Th e Board will hear a proposed diesel particulate control measure for private fleets in 2 006, which may further impact the project criteria for these projects.

Fleet modernization incentives may be used for the purchase of a new vehicle. For standard fleet modernization projects that replace an old vehicle with a new vehicle, the new vehicle must be certified to more stringent emi ssion standards than the vehicle being replaced. With tiered transaction projects, the new vehicle must be certified to ARB’s current optional NOx emission standards of 1. 8 grams per brake horsepower-hour (g/bhp-hr) of NOx through 200 6, regardless of fuel type or engine design. Beginning in 2007, the optional sta ndards will sunset and projects for new vehicle/engine must be certified to 0.2 g/bhp-h r of NOx. Since new engines are certified throughout the year, districts are encour aged to contact ARB for the most current list of eligible engines.

IV. Development of the Fleet Modernization Source C ategory

The ARB has long recognized the need to reduce emis sions from the oldest trucks in the heavy-duty diesel truck sector. In 1994, the A RB proposed a concept for retiring heavy-duty vehicles in its State Implementation Pla n for Ozone as Measure M-7. The measure envisioned the program could be self-sustai ning through the sale of the old trucks for export to overseas markets. However, th e M-7 measure was eventually withdrawn because of concern regarding the lack of funding and analyses showing that the old, high emitting trucks removed from the flee t were likely to be replaced with similar aged trucks from outside the area.

In 2001, the Sacramento Metropolitan Air Quality Ma nagement District (SMAQMD) received ARB’s approval to establish a fleet modern ization pilot program, which was funded by the Sacramento Emergency Clean Air Transp ortation program in partnership with the Sacramento Area Council of Governments (SA COG). The Sacramento program was designed to replace the oldest trucks i n a fleet by scrapping the trucks and providing a monetary incentive to purchase newer tr ucks with fewer emissions. The SMAQMD developed the concept as an alternative to o n-road repower projects. Also inII-4 FLEET MODERNIZATION

2001, the Gateway Cities Coalition of Governments, located in the area surrounding the Port of Long Beach, initiated a fleet modernization program that mirrored the Sacramento program. To ensure that incentives were changing the normal purchase practices of operators with the oldest trucks, both pilot programs required the

destruction of the old truck and a commitment to ke ep the replacement vehicle in the same location doing the same type of work. These r equirements aimed to resolve the concerns raised in response to the original M-7 mea sure.

A. Sacramento Metropolitan Air Quality Management D istrict Program

The SMAQMD in partnership with SACOG administers a fleet modernization program for the Sacramento and surrounding air districts. This region includes El Dorado, Placer, Sacramento, Solano and Yolo counties. The SMAQMD pilot program was implemented in 2002 with the expectation that data would be gathered on the replacement vehicles for five years. To date, the SMAQMD program has appropriated approximately $10 million to replace 300 trucks. T he average incentive award for the program is $35,000 with a cost-effectiveness of $8, 000/ton of NOx reduced. It is estimated that the SMAQMD program has reduced 200 t ons of NOx and 30 tons of PM10 per year. The replaced vehicles come primaril y from construction and heavy-hauling vocations.

B. Gateway Cities Council of Governments Program

The Gateway Cities Council of Governments (COG) adm inisters a program in the region surrounding the Port of Long Beach and the Port of Los Angeles. The COG is a joint powers authority whose members are the 27 cities in southeast Los Angeles County and the Port of Long Beach. The COG program has ex pended approximately $7.6 million on the replacement of 350 trucks. The average incentive award for the program is $25,000 with a cost-effectiveness of $8, 400/ton of NOx reduced. It is estimated that the COG program has reduced 193 tons of NOx and 42 tons of PM10 per year. The replacement vehicles are owned prima rily by independent operators working in port related vocations. The Gateway veh icles tend to be older and have lower mileage than the Sacramento program. Approxi mately 85 percent of the program participants are non-English speaking. The Gateway Cities program has received funding from multiple sources including the ARB, th e United States Environmental Protection Agency (U.S. EPA), the Mobile Source Air Pollution Reduction Review Committee, and the Port of Los Angeles.

C. Lessons Learned

In developing the criteria for the heavy-duty fleet modernization source category, ARB staff, in collaboration with a multi-agency workgro up, established parameters based on the legislative guidance and mandates, data from ex isting federal and state emission inventories, and data and expertise gathered from t he pilot programs. This information has been instrumental in the development of project criteria for a robust, statewide program. To insure real emission reductions, the c riteria includes requirements that assure the newly-funded truck will have the same co nfiguration as the old truck, that itII-5 FLEET MODERNIZATION

will stay in the same vocation and not move to a ne w location, and that the greatest emission reductions are realized through the use of diesel emission reduction devices. Rigorous qualifying criteria has been developed to assure that the replaced vehicle would have been operating for the project life and that the heavy-duty fleet modernization participants would have been unlikely to have replaced their old truck

with a newer truck without incentive funds. The fu lfillment of contract obligations is addressed through the use of electronic monitoring devices and monitoring and reporting requirements.

V. Key Components of the Fleet Modernization Source Ca tegory

Ensuring that the emission reductions from an incen tive program are real, quantifiable, enforceable, and surplus, is critical to the succes s of the Carl Moyer Program. Given the new niche that fleet modernization must serve, new and rigorous criteria have been developed to protect the integrity of the program. The major criteria include: eligibility of the old vehicle, vocations, model years, project li fe, weight class, salvage requirements, electronic monitoring units, funding caps, subtract ing the cost of repairs, tiered transactions, and administrative tools.

A. Eligibility of the Old Vehicle and Replacement V ehicle

To receive funding for fleet modernization projects , participants must show that the old vehicle meets the following requirements: it must be a model year 1990 or older; it must have California registration for the last three yea rs; the participant must show proof of ownership, vocation, operation, and documentation t o verify actual mileage; and the old vehicle must be turned over to an approved salvage yard for destruction, this includes requiring the engine be destroyed and the frame rai ls cut. The replacement vehicle must be model year 1999 or newer and it must be ide ntical to the old vehicle including axle configuration and body type to prevent a chang e in vocation during the life of the project. New vehicles participating in tiered tran saction projects are required to meet the optional NOx standard.

B. Vocations

One of the goals of the fleet modernization is to e nsure that participants continue to do the same type of work and do not drift to other voc ations once they have acquired a newer vehicle that is capable of traveling long dis tances with greater reliability. This restriction is necessary because the movement of a fleet modernization truck to a new

vocation would result in another old truck backfill ing the original vocation. The program requires participants to show proof of vocation for the previous three years and maintain that vocation for the life of the project.

Vocation is further emphasized by providing greater incentives to vehicles operating in vocations known to have the highest number of old t rucks in service. Targeted vocations include vehicles operating in agricultura l, construction, mining, forestry vocations, vehicles that move goods in and out of p orts and rail yards, and public fleet vehicles in low-population areas as defined in the public fleet regulations adopted by theII-6 FLEET MODERNIZATION

ARB in December 2005. Participants from the target ed vocation are eligible for a five year project life, rather than the standard three y ear project life available for other types

of vocations.

C. Model Years

To be eligible for the fleet modernization source c ategory, the old vehicle must be a model year 1990 or older. This model year was sele cted for several reasons. The

emission factors for the 1990 and older vehicle mak e it a high emitting vehicle at 21.2 grams of NOx/mile and 1.32 grams of PM/mile. The EMFAC 2002 inventory shows that there are approximately 58,000 of these old vehicles on the road today. Reducing the number of these high emitting vehicles will improve air quality. The SMAQMD pilot program originally allowed only 1983 a nd older vehicles to participate in its program. The district then modified its pilot program to allow 1986 and older vehicles. Recently, the district moved the eligibl e model year to 1990 and older vehicles because it has exhausted the number of available ap plicants with 1986 and older

vehicles. Districts should consider a similar stra tegy when establishing a fleet modernization category- initially targeting the ver y oldest trucks and then moving up the allowable age as the program progresses.

Under fleet modernization, the replacement vehicle must be model year 1999 or newer. A 1999 model year was selected due to reduced emiss ion factors, concern with consent decree engines, and affordability to participants. Dual-calibration engines manufactured from 1993-1998 are bound by ARB and U.S. EPA consen t degrees and are not eligible for Carl Moyer Program funding. Districts will nee d to verify the engine model year for 1999 model year vehicles because 1998 model year en gines may have been installed and are not eligible for funding. Experience with the Gateway COG pilot program shows that a majority of their fleet modernization participants purchased 1999 model year replacement trucks. 1999 is a popular choice because it is generally the least expensive model qualified for fleet modernization f unding. Selecting a newer, more expensive model year would make the fleet moderniza tion inaccessible to program participants that are from low-paid vocations.

D. Project Life

The project life for fleet modernization projects, with the exception of target vocations, is three-years. A three-year project life was selecte d because inventory data show the life expectancy of a 1990 on-road, heavy-duty vehicle th at is still on the road is an additional 5.5 years. This means that 50 percent o f the heavy-duty fleet 15 years and older would remain on the road for another 5.5 year s on average, while the other 50 percent would retire through attrition. It is e xpected that the old trucks volunteered for a fleet modernization project will be those wit h less remaining life. To be protective of air quality and ensure that real emission reduct ions are achieved, three years has been selected as an acceptable project life. This approach follows what has already been established in the existing regulations for th e Voluntary Accelerated Light-Duty Vehicle Retirement Program. The light-duty program is designed to retire very oldII-7 FLEET MODERNIZATION

light duty vehicles. In that program the life expe ctancy was reduced by 50 percent to

determine the credit value.

Targeted vocations are allowed a five-year project life because they are known to keep the oldest vehicles in service for more years and w ould be less likely to replace their trucks with a newer truck than the average old truc k owner. Data indicate that in these very limited target vocations, the normal practice for purchasing vehicles is to purchase vehicles of the same age or older. For these vocat ions, the data justifies allowing a five year project life.

E. Weight Class

The focus of the fleet modernization pilot programs has been the replacement of heavy heavy-duty trucks with all analysis conducted on th e heaviest class of vehicles. Fleet modernization projects will continue to focus on ve hicles having a gross vehicle weight rating of 33,000 pounds and greater. However, some districts have expressed an interest in including vehicles in the medium heavy- duty class. Districts may request inclusion of medium heavy-duty vehicles with a weig ht class rating of 19,501-33,000 pounds on a case-by-case basis.

F

. Salvage Requirements

Fleet modernization requires that the old truck be scrapped. To ensure that the vehicle will not be used again, the criteria specify that a qualified salvage yard destroy the engine as specified in the Administration Chapter o f these Guidelines and cut the frame rails of the old vehicle. This requirement has bee n established to ensure that emission reductions are real. It prevents the old trucks fr om being moved into another locale to continue emitting high levels of pollutants.

G. Electronic Monitoring Units

All fleet modernization replacement vehicles must b e equipped with an electronic monitoring unit (EMU). The EMU electronically repo rts vehicle miles traveled and the number of miles a vehicle has operated within Calif ornia and district boundaries. This requirement has been established to verify that the replacement vehicle continues to operate in the same location as the old, scrapped v ehicle.

H. Funding Caps

The fleet modernization criteria sets a maximum fun ding amount of 72 percent of the value of a used, replacement vehicle and 80 percent of the invoice price of a new vehicle. These caps are based on the maximum loan value available through lending

institutions.II-8 FLEET MODERNIZATION

I. Subtracting the Cost of Repairs

Fleet modernization projects are required to subtra ct the cost of repairs needed for the

old vehicle from the incremental cost of the new ve hicles. The cost of repairs is subtracted because it is assumed that repair costs are a normal business expense that would have been incurred by the participant had the vehicle stayed in service. The repair costs are identified during the inspection v erifying the operating condition of the

old vehicle.

J. Tiered Transactions

Tiered transactions are an additional vehicle repla cement strategy available through

fleet modernization. A tiered transaction combines the emission reductions achieved from the purchase of a new vehicle meeting the opti onal NOx standard with a basic fleet modernization project. Combining both transactions provides additional incentives to offset the cost of purchasing the vehicle meeting t he optional standard. However, linking the purchase of the new vehicle by one owne r, with the retirement of an old truck and purchase of a replacement truck by a second par ticipant, presents complexities that

are not found in the basic fleet modernization tran saction. Tiered transactions are a new concept enacted by legislation and have not bee n included in the pilot programs. Local air districts may develop and implement tiere d transactions as part of their fleet modernization component. ARB must approve a distri ct’s proposed tiered transaction component prior to implementation.

K. Administrative Tools

The ARB must review and approve local air district fleet modernization guidelines prior to the district funding fleet modernization project s. This requirement has been established because both pilot programs show there are many administrative tools needed to implement fleet modernization. These inc lude: contracts with the applicant, dealers and scrap yards; performance requirements; reimbursement procedures; pre- and post-inspections; and, monitoring and enfo rcement considerations. This requirement will help achieve ARB’s goal of establi shing a robust, verifiable, enforceable fleet modernization component that reac hes previously non-eligible sectors. As with all Carl Moyer Program components, district s are provided with outreach funds, which are approximately two percent of the Carl Moy er Program grant. In addition, there are a number of funding sources districts may use to cover in-kind costs. When using these other funding sources, districts must f ollow the guidelines for expending

those other funds.

VI. Potential Projects

As discussed, there are two types of potential proj ects available under the fleet modernization category. The first is the replaceme nt of an old vehicle (1990 or older) with the new or newer vehicle (1999 or newer). The second type of project is a tiered transaction, which links the emission reductions ac hieved from the purchase of a newII-9 FLEET MODERNIZATION

vehicle meeting the optional NOx standard with the retirement of an old vehicle (1990 and older). Under the tiered transaction pro ject, two transactions take place:

• A participant proposes the purchase of a new vehic le meeting the optional NOx

standard and estimates the cost of this transaction based on a new, heavy-duty vehicle purchase (as discussed in Chapter One, Sect ion V-C).

• This same owner identifies a standard fleet modern ization project that meets the

fleet modernization criteria and estimates the cost -effectiveness of the project.

• The combined cost-effectiveness of both transactio ns is used to determine

cost-effectiveness.

Tiered transactions could potentially be utilized b y one party that purchases new equipment meeting the optional standard and contrib utes replacement vehicles to a

fleet that has old vehicles.

In addition to replacing an old, high-emitting vehi cle with a newer, cleaner vehicle, fleet modernization requires the use of diesel emission c ontrol strategy (DECS) on all projects. An ARB-verified DECS is required on all fleet modernization vehicles. In selecting the appropriate DECS for the project, pre ference is given to the device providing the highest level of emission reductions. Examples of DECS include diesel particulate filters, diesel oxidation catalysts, an d flow through filters. Incentive funds may be used to cover the cost of DECS maintenance a nd filters needed for the duration of the project life.

The requirement for a DECS may be waived by the ARB . The waiver must be based upon the specifics of individual projects including cost, vehicle duty cycle restrictions, availability, and other factors. Additional detail s regarding the DECS requirement, including funding and data logging options, are inc luded in Section VII-C.

VII. Project Criteria

Fleet modernization projects, which include scrappi ng an old, high-emitting vehicle and replacing it with a newer, cleaner vehicle, are eli gible for incentive funding. The project criteria listed below provide the minimum qualifica tions for the Carl Moyer Program. Sample calculations that illustrate the methodology for determining emission reductions and cost-effectiveness are included in Appendix D.

Participating districts retain the authority to imp ose additional requirements in order to

address local concerns.

A. General Criteria

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum ofII-10 FLEET MODERNIZATION

agreement/understanding with a regulatory agency, s ettlement agreement, mitigation requirement, or other legal mandate.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx +

ROG + combustion PM10 reduced calculated in accorda nce with the cost-effectiveness methodology discussed in this ch apter.

• No emission reductions generated by the Carl Moyer Program shall be used as

marketable emission reduction credits or to offset any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging banking and tra ding program.

• In funding fleet modernization projects, the repla cement vehicle must reduce NOx emissions by at least 15 percent from the old vehic le emissions.

• Carl Moyer Program grants can be no greater than a project’s incremental cost. The incremental cost is the cost of the project minus t he baseline cost. The incremental cost shall be reduced by the value of any current f inancial incentive that reduces the project price, including tax credits or deductions, grants, or other public financial

assistance.

• Fleet modernization projects have a minimum projec t life of three years. Project life is the number of years that a Carl Moyer Program pr oject must operate in California under the conditions specified in the grant funding agreement.

• The default project life does not consider upcomin g regulatory requirements. Project life may be shorter due to regulatory requirements.

• Fleet operators with vehicles in open vocation cat egories are eligible to receive funding for a maximum of five vehicles. There is n o restriction on the number of vehicles per fleet that can be funded in targeted v ocation categories.

• Fleet modernization project life must be equal to the project contract life.

• Vehicles equipped with glider kits are not eligibl e to participate in the fleet modernization category; this includes both old and replacement vehicles. Glider kits are replacement chassis and cab for on-road heavy-d uty vehicles. Glider kits are identified with a vehicle identification number (VI N) starting with the letters “GL”.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the air district suggests potential surplus, real, quantifiable and enforceable emission reducti on benefits.II-11 FLEET MODERNIZATION

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on a case-by-case basis. Al l projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

B. Participant Requirements

The following categories of vehicles are eligible f or Carl Moyer Program funding:

• Open Category : Vehicles from any vocation or fleet size are eli gible for funding provided the participant submits conclusive documen tation of annual mileage and vehicle usage in California. The maximum project l ife is three years.

• Targeted Vocation Category : Vehicles operating in agricultural, construction

, mining, port hauling, and forestry vocations, or ve hicles that move goods in and out of ports and rail yards may apply as a targeted voc ation. The participant is required to submit conclusive documentation of annual mileag e and vehicle usage in California. The maximum project life is five years

.

• The old vehicle must have both engine and chassis of model year 1990 or older.

• The old vehicle must have been registered in Calif ornia for the previous three years.

• The old vehicle must be in operational condition t o qualify for funding. Operating condition must be determined through a California H ighway Patrol’s Biennial Inspection of Terminals (CHP BIT) or equivalent ins pection. The inspection must identify any needed repairs and the estimated cost of the repairs. The district will also verify the operating condition of the truck by a visual and operational inspection. If the district cannot conduct a pre-inspection, th e ARB may approve one of the following methods on a case-by-case basis:

− The motor carrier company may submit a completed C HP 90-Day Safety Inspection Form documenting the inspection and the estimated cost of any repairs.

− A participating dealership or motor company may co nduct the inspection of the old vehicle and provide pictures verifying the vehi cle condition. The dealer must provide a completed CHP 90-Day Safety Inspection Fo rm and documentation of any necessary repairs. The participant will pay th e cost of the inspection.

− Other methods as approved by ARB.

• The participant must currently own and operate the old vehicle. If it is unclear whether a vehicle is owned or leased by a participa nt, the district will determine whether the vehicle is eligible.II-12 FLEET MODERNIZATION

• Participants must submit documentation of annual m iles traveled for the previous three years to determine cost-effectiveness. Exam ples of documentation include: logbooks, fuel records, and, maintenance records or tax records.

• The participant must maintain replacement value in surance coverage for the project

life.

• The participant must be in compliance with air qua lity laws; all outstanding citations must be paid up.

C. Replacement Vehicle Requirements

All replacement vehicles must meet the following co nditions before funding is awarded to the participant.

• Model Year: The replacement vehicle must have bot h an engine and chassis model year of 1999 and newer.

• The replacement vehicle must operate in the same v ocation for the project life. The participant must stay in the contracted vocation fo r a minimum of 85 percent of the miles, as specified in the application. If a chang e of vocation is required to stay in operation, a written explanation must be provided t o the district and approved by the

ARB.

• The annual mileage of the replacement vehicle must not exceed 150 percent of the baseline project mileage, except as approved by the district and ARB.

• Engine Horsepower Requirements: The horsepower ra ting for the replacement vehicle engine must not be greater than 120 percent of the original manufacturer rated horsepower (baseline horsepower) for the old vehicle engine. This is necessary because engine horsepower is related to t he emissions produced by heavy-duty diesel engines. Auditing of the replace ment vehicle's horsepower may occur throughout the length of the agreement.

− Participants must use the horsepower rating listed on the old engine tag. If the engine tag is not legible, a dynamometer test can b e used to determine the horsepower rating. The results of a dynamometer te st will take into account a 15 percent loss in actual horsepower, based on tran smission loss. The participant must pay the cost of dynamometer testin g.

− In the event the replacement engine horsepower is more than 20 percent greater than the old vehicle, it must be derated (reduced) to not exceed the 20 percent allowable increase. The 20 percent allowable incre ase in horsepower is

calculated as follows:

(Old Engine Horsepower) x (1.20) = Maximum New Engi ne Horsepower

(Example: 300 HP x 1.20 = 360 HP)II-13 FLEET MODERNIZATION

− In limited situations, the district may approve a greater than 20 percent increase in horsepower.

• Weight Class: Eligible vehicles must have a Calif ornia heavy-heavy gross vehicle weight rating of 33,000 pounds. Vehicles having a California medium heavy-duty weight rating of 19,501-33,000 pounds may be eligib le upon the request of the district on a case-by-case basis. The replacement vehicle must be in the same weight rating as the old vehicle.

• Body and Axle Configuration: The replacement vehi cle must have the same axle and body configuration as the old vehicle. The dis trict may allow slight changes based on the latest technology. Changes must be re quested and approved prior to the purchase of the replacement vehicle.

• Warranty Requirements: All participants must purc hase a minimum of a one-year or 100,000-mile major component engine warranty for th e replacement vehicle. The warranty must cover parts and labor. It is recomme nded that the highest grade warranty be purchased in order to avoid expensive r epairs in the future. No Carl Moyer Program funds will be issued for mainten ance or repairs related to the operation of the vehicle. The participant takes so le responsibility for ensuring that the vehicle is in operational condition throughout the agreement period.

• ARB Verified Diesel Emission Control System (DECS) : An ARB-verified DECS is required on all replacement vehicles.

− In selecting the appropriate DECS for the project, preference shall be given to the DECS providing the highest level of NOx and PM1 0reductions.

− The DECS must be installed prior to vehicle delive ry to the participant and must stay in operation on the replacement vehicle for th e project life.

− The cost of the device, and all filters and mainte nance of the filters needed during the project life, may be paid for with incen tive funding provided it meets

the cost-effectiveness limit.

− Upon approval of the ARB, the district may waive t he requirement for installation of the DECS. The waiver must be based upon the spe cifics of individual projects, including cost, vehicle duty cycle restri ctions, availability, and other

factors.

− Data-logging may be conducted on the old vehicle t o determine the proper DECS device needed for the replacement vehicle. Data-lo gging, which is the collection of exhaust temperatures, must be conducted while a vehicle is in service. The information gathered from the old vehicle is applie d to the replacement vehicle. Data-logging may be paid for with incentive funding , if it meets the

cost effectiveness limit.II-14 FLEET MODERNIZATION

− The participant must maintain the DECS as specifie d by the manufacturer’s warranty requirements. The participant must provid e maintenance reports to the district as required.

− If an ARB-approved DECS is not available at the ti me the replacement vehicle is purchased, a DECS will be installed when a DECS com patible with the engine and the vehicle duty cycle has been verified by ARB , unless otherwise stipulated at the time of purchase by the district.

− Vehicles outfitted with dual exhaust will be addre ssed on a case-by-case basis. The district will determine if no DECS is required, or if a DECS shall be installed on both exhaust tailpipes, or if the exhaust shall be converted to a single pipe

with a DECS.

− Additional information on retrofit systems is incl uded in Appendix F - Retrofit Emission Control Systems.

• Electronic Monitoring Unit (EMU): The EMU electro nically reports vehicle miles traveled and the number of miles a vehicle has oper ated within the California and district boundaries. An EMU is required on all rep lacement vehicles.

− Installation and maintenance of the EMU may be inc luded in the cost of the project.

− If an affordable and suitable EMU is not available at the time the replacement vehicle is ready for delivery, the vehicle may be d elivered to the applicant. The owner will be required to return the vehicle to the dealer when an EMU is

available for installation. Verification of the in stallation must be submitted to the district following installation.

− EMU data must be reported to the district for the project life.

− If the EMU is not functioning properly as indicted by the district, the participant will submit mileage reports as specified the distri ct.

− Upon approval of the ARB, the district may waive t he requirement for installation

of an EMU.

• Engine and Emission Control Modifications: Emissi on controls on the replacement vehicle engine cannot be modified in any manner. U nauthorized modification to engine performance (including changes in horsepower ), emission characteristics, engine emission components (not including repairs w ith like-original equipment manufacturers replacement parts), or any other modi fications to the engine’s

emission control function or the EMU are not allowe d.II-15 FLEET MODERNIZATION

D. Tiered Transactions

Districts may establish a tiered transaction compon ent within their fleet modernization source category. Tiered transactions were added to the Carl Moyer Program with the enactment of AB 1394 in January 2005, but were not included in the fleet modernization pilot programs. As a result, there is no experienc e or model to guide districts in implementing a tiered transaction component. ARB m ust approve district plans for implementing a tiered transaction component prior t o funding projects in this unmapped territory.

A tiered transaction combines the emission reductio ns achieved from the purchase of a new vehicle meeting the optional NOx standard with the replacement of a 1990 or older vehicle. In the tiered transaction, the purchaser of a new vehicle meeting the optional

standard identifies a standard fleet modernization project that meets the fleet modernization criteria, including the participation of a 1999 or newer replacement vehicle. A second participant acquires the replace ment vehicle and scraps a 1990 or older vehicle. Tiered transaction programs should include the following elements; however, districts may request that ARB consider al ternative components.

• In determining the grant award for the purchaser o f the new vehicle, the emission benefits and cost-effectiveness of the project must include two transactions:

− Emission reductions from the currently applicable standard to the new vehicle meeting the optional standard.

− Emission reductions from the old vehicle to the re placement vehicle.

• The baseline cost for the new vehicle purchase is the cost of a new vehicle that

meets the current emission standards. The incremen tal cost eligible for funding is the cost of the vehicle meeting the optional standa rd minus cost of the vehicle meeting the existing standards. This is the standa rd method used for new, on-road Moyer projects.

− Emission reductions from the old vehicle are based on the annual mileage traveled by the old vehicle.

− The participant scrapping the old vehicle is subje ct to all fleet modernization project criteria. The participant purchasing the n ew vehicle is subject to all on-road, heavy-duty project criteria.

− The participant purchasing the new vehicle is not eligible for emission reductions from scrapping an old vehicle within his/her own fl eet.

VllI. Emission Reduction and Cost-Effectiveness Cal culations

To receive weighted Carl Moyer Program funding, eac h fleet modernization project must meet the maximum cost-effectiveness threshold of $1 4,300 per weighted ton of NOx +II-16 FLEET MODERNIZATION

ROG + PM10 reduced. State and local funds used to pay for a fleet modernization project are to be used in determining cost-effectiv eness. Any federal incentives must be discounted from the overall grant award. Appropria te emission factors as a function of vehicle type and model year are illustrated in Tabl es B-5 in Appendix B. Sample calculations for the fleet modernization category a re provided in Appendix D.

IX. Minimum Project Application Requirements

All fleet modernization applicants must provide the minimum information listed in the following table (Table 2-2).

Table 2-2

Minimum Application Requirements for Fleet Moderniz ation

Applicant Information Organization, Company or Individual Name

Street Address City, State, Zip Code Primary Contact Name Primary Contract Phone Number Person with Contract Signing Authority Person who Filled out Funding Application Project Address (if different from above)

Old Vehicle Information Vehicle Type (Solid Waste Collection Vehicle, Stree t Sweeper, School Bus, Urban Bus, Other Transit Vehicle, Other Heavy-Heavy Duty Vehicle, Other Medium-Heavy Duty Vehicle, or Other Light-Heavy Duty Vehicle)

Vehicle Vocation Vehicle Identification Number (VIN)

Vehicle Make

Vehicle Model

Vehicle Model Year

GVWR Horsepower

License Plate Number Registered Truck Owner Department of Transportation Number (if interstate) California Highway Patrol Number

Vehicle Fuel Engine Family Engine Make Engine Model Engine Year Engine Serial Number

ARB Executive Order Number (If Engine Certified to Alt NOx Standard)

New Vehicle Information (Same as Above) Retrofit Information

Retrofit Device Make

ARB-Verified Retrofit Device Name

Retrofit Device Serial Number

Retrofit Device ARB Executive Order Verification Level (Level 1, 2 or 3) ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number

Activity Information

Vehicle Vocation Percent Operation in California Percent Operation in District Project Life

Annual Miles Traveled or Gallons Fuel Used

Cost Information Adjusted Loan Value of Replacement Vehicle

Retrofit Device Cost Cost of Retrofit Installation (optional) Cost of Retrofit Maintenance for Project Life (optional) Cost of Retrofit Warranty (optional) EMU Cost (optional)II-17 FLEET MODERNIZATION

A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.

In addition, the following items must accompany the completed application at the time of

submittal:

• A copy of the old vehicle title.

• Copies of California Motor Carrier Permits and per mit applications for the last three years. If the participant does not have a Motor Ca rrier Permit, submit copies of the Department of Motor Vehicle registration and proof of insurance for the old vehicle for the last three years.

• The participant must provide mileage verification for the previous three years.

• Proof of vehicle vocation for the last three years

.

• The participant may be required to provide either:

− Copies of the participant’s United States Internal Revenue Service Form 2290 (Heavy Highway Vehicle Use Tax Return) for the prev ious three years.

− United States Internal Revenue Service Schedule C.

• If the old vehicle engine tag is missing, the part icipant may be required to provide a dynamometer printout of the engine horsepower from a participating engineII-18 FLEET MODERNIZATION

dealership, or another means of obtaining the requi red information approved by the

ARB.

• The district may request any additional informatio n.

X. Administrative Requirements

Districts must establish fleet modernization polici es and guidelines before they can fund fleet modernization projects. Many administrative tools are needed to manage a reliable fleet modernization source category. This includes agreements with local dealerships and salvage yards, reimbursement proced ures, the development of contracts, etc. The ARB must approve district flee t modernization policies and guidelines prior to district implementation of a fl eet modernization category. The ARB will provide examples for district use. The distri ct’s fleet modernization guidelines must

address all of the above criteria as well as the it ems discussed in the following sections.

A. Determining Awards

Grant award determinations must be made with the fo llowing considerations:

• Funding awards are based on the average miles per year driven during the previous three years. Fleet averages can not be used. Part icipants must submit conclusive documentation of mileage including logbooks, fuel records, and maintenance

records maintained for individual vehicles.

• The incentive amount available for the purchase of the vehicle will be based upon three criteria: cost-effectiveness of the project b ased upon the weighted

NOx + ROG + combustion PM10 emission benefits as ca lculated by the district; the value of the used vehicle based upon the National A utomotive Dealership Association (N.A.D.A.) adjusted loan value or new v ehicle invoice price; and, less any costs associated with repairs noted during the vehicle inspection.

• The maximum reimbursement for all awards will be t he N.A.D.A. adjusted loan value of the replacement truck or the maximum calculated incentive -- whichever is less. The funding amount of a used , replacement vehicle shall not exceed the value of the vehicle given by the N.A.D.A. commercial vehicle gu ide adjusted loan value. The funding amount of a new replacement vehicle shall not exceed 80 percent of the invoice price.

• If suitable equipment is available and deemed cost -effective by the district, supplemental incentive funding will be provided to cover installation of a DECS

and/or an EMU.

• Incentive funding can only be used to pay for item s essential to the operation of the vehicle. Optional items, such as cigar lighters an d custom mud flaps, must be paid for at the owner’s expense.II-19 FLEET MODERNIZATION

• The participant may obtain financing to assist in the purchase of a replacement

vehicle.

B. Dealer Requirements

Districts are encouraged to establish contracts wit h dealers that are selling replacement vehicles to fleet modernization participants. Expe rience with the pilot programs has shown that dealers have provided participants with needed assistance in the application process. Vehicle dealers are encouraged to help in the application process as much as possible. If districts use vehicle dealers in impl ementing the fleet modernization category, reimbursement cannot be issued until all forms are submitted and approved by the district.

Participants may purchase the replacement vehicles from a private party, provided all required documentation is submitted. This includes warranty requirements and all other fleet modernization requirements.

Vehicle dealers are expected to do the following:

• Provide basic information about the fleet moderniz ation category. Districts will provide liaison training to dealership staff.

• Inform participants of rights and responsibilities as outlined in the district and ARB guidelines.

• Help the participants complete the application. T he vehicle dealers will ensure that the participant correctly completes the application . It is important to make sure that all information is filled out correctly and that th e participant understands the meaning of the program and the contract. The district will provide all forms and certificates as appendices to the application. Once complete, the dealer will submit the application package to the district.

To ensure that an application package is complete, the dealer will make sure that all the following items are complete and included in the pa rticipant’s submission to the district. The following must be completed before reimbursemen t can be made:

• Submit a signed and complete application.

• Provide documentation showing that the old vehicle is roadworthy. This includes documentation showing that the old vehicle has pass ed a CHP BIT inspection old vehicle in the past 90 days or conduct an equivalen t vehicle inspection and sign as appropriate. The district reserves the right to au dit the dealer’s record of inspection.

• Provide invoices of all work performed on the repl acement vehicle. The invoices must include all engine, transmission, body and oth er work performed on the replacement vehicle. Invoices must include the ins tallation of all equipment required by this program: EMU (at the discretion of the dis trict), diesel emission controlII-20 FLEET MODERNIZATION

system (at the discretion of the district), and eng ine horsepower derated, if

necessary.

• Submit digital photographs of the old vehicle and the replacement vehicle to the district. The district will specify the required d igital format. Reimbursement will not be processed until all photographs are received and verified by the district. Before submitting photographs to the district, dealers mus t verify that photographs are clear. All VIN and engine serial numbers must be l egible.

Photographs of the old vehicle must include the fo llowing views:

− Right Side - hood down.

− Front - hood down.

− Left Side - hood down.

− VIN Tag - inside vehicle or on frame rail.

− Engine - left side.

− Engine - right side.

− Engine Serial Number - either tag or stamp on bloc k.

− License plate.

− Rear.

Photographs of the replacement vehicle must include the following views:

− Right Side - hood down.

− Front - hood down.

− Left Side - hood down.

− VIN Tag - inside vehicle.

− VIN Tag - on frame rail.

− Engine - left side.

− Engine - right side.

− Engine Serial Number and Engine Information – tag.

− License plate.

− Rear.

− Electronic Monitoring Unit (in working condition).

− Diesel Emission Control Device (if available).

− Odometer Reading.

− Additional modifications (if applicable).

• Provide certification that the old vehicle will be delivered to a qualified salvage yard.

The certification must state that the vehicle will be picked up by the salvage yard within 30 days of receipt of the old truck. The co ntract must include the make, model, year, VIN, engine make, engine serial number , and the date the vehicle is expected to be delivered. It is the dealer’s respo nsibility to ensure that the salvage actually occurs, to obtain the completed Certificat e of Vehicle Destruction, and to

ensure that the Certificate of Vehicle Destruction has been filed with the district. The district will not cover the salvage costs.II-21 FLEET MODERNIZATION

• Provide documentation of replacement vehicle warra nty and registration.

• Provide proof of replacement vehicle financing. T he financing package will enable

the district to determine the reimbursement costs t hat may be accrued in case the participant defaults on the contracted performance requirements.

Prior to releasing the replacement vehicle to the p articipant, the dealer must have documentation of a district pre-inspection of the o ld vehicle and a post-inspection of the replacement vehicle. Upon request of the district, ARB may waive inspection requirements.

After the application and all required documentatio n have been approved by the district, the dealer must provide the district with proof of sale of the replacement vehicle.

C. Salvage Requirements

Destruction of the old vehicle chassis and engine p ermanently removes the old, high emitting vehicles from service. The old vehicle mu st be driven to a qualified vehicle salvage yard for destruction. Vehicle salvage yard s are required to enter into an agreement with the district to qualify for particip ation. Qualified vehicle salvage yards are required to be licensed by the Department of Mo tor Vehicles (DMV) as an auto-dismantler; have a current, valid California E nvironmental Protection Agency (Cal/EPA) Hazardous Materials Generators Permit; an d be in compliance with all local, state and federal laws and regulations.

Funding is not available for the salvage of any old vehicle. The vehicle salvage value will be negotiated between the participant, the dea lership and the salvage yard. The salvage yard operator must do the following:

• Dismantle the old vehicle within 60 days of receip t. The destruction must be done in accordance with program guidelines.

• The old vehicle’s engine must be destroyed and ren dered useless as specified in the Administration Chapter of these Guidelines

• Cut the frame rails of the old vehicle to ensure t hat the vehicle will not be used again.

• Take photographs of the destroyed engine as specif ied in the Administration Chapter of these Guidelines and the cut frame rails . Photographs of the destroyed engine block and cut frame rails must be provided t o the district within ten business days of salvaging the vehicle. The following pictu re views must be taken:

− Front of vehicle with hood down.

− Right side of vehicle with hood down.

− Left side of vehicle with hood down.II-22 FLEET MODERNIZATION

− Serial number printed either on the tag inside in the cab or on the frame rail.

− Engine side view.

− Engine serial number either stamped on the block o r on the tag.

− Destroyed engine block either in-frame or out of f rame as specified in the Administration Chapter of these Guidelines.

− Cut frame rails.

• File a “Non-Repairable Vehicle Certificate” with t he DMV using an “Application for Salvage Certification or Non-Repairable Vehicle Cer tification”.

• Upon request of the district, ARB may approve an a lternative disposition for the old

vehicle.

• Upon request of the district, ARB may approve an e xtension to the required

timeframe for vehicle destruction.

D. Pre- and Post-Inspections

To protect the integrity of the fleet modernization source category, districts must conduct a pre-inspection of the old vehicle and a p ost-inspection of the replacement vehicle. Districts are encouraged to design rigoro us pre- and post-inspection procedures. At a minimum, the inspection of the ol d vehicle must be conducted to establish that it has been in service, that it meet s the described weight class and configuration, and that costs associated with neede d repairs have been identified and deducted from the incentive award. The cost of rep airs needed for the old vehicle will be subtracted from the incremental cost of the gran t award.

Post-inspection of the replacement vehicle must be conducted to verify that the vehicle meets the contract description, including class and configuration descriptions, DECS and EMU installation, and any other items deemed ne cessary to confirm the authenticity project. Upon the request of the district, the ARB may approve an alternative method of ascertaining the authenticity of the old and replac ement vehicle.

E. Minimum Reporting Requirements

Fleet modernization reporting requirements have bee n established to verify that project participants meet contract requirements and to quan tify the emission reductions achieved through the Carl Moyer Program. Fleet mod ernization projects are subject to the following minimum reporting requirements:

• If the participant has a California Motor Carrier Permit, a current copy must be submitted to the district annually. If the partici pant does not have a California Motor Carrier Permit, the participant must provide regist ration and proof of insurance to the district annually.

• The participant must provide annual reports for th e life of the project. The report on the replacement truck will include information such as the number of hours ofII-23 FLEET MODERNIZATION

operation, miles driven in the district and Califor nia, the amount of fuel consumed in the twelve months preceding the report date, detail s regarding maintenance and servicing, and any other items specified by the dis trict.

• Participants from targeted vocation categories mus t provide documentation of

vocation on an annual basis.

• If the replacement vehicle is involved in an accid ent, the participant must report the accident to district staff within 14 days. The par ticipant will be required to provide a police report of the accident, a letter from the in surance company regarding the accident and any additional information requested b y the district. The participant is required to repair the vehicle and return it to ope ration, if possible. Down time due to an accident will be credited toward the performa nce requirements as along as the information is reported as requested and the repair s are made as soon as possible. If the vehicle is totaled, the participant and the district staff must come to an agreement regarding any requirements that still nee d to be met.

F. Compliance Checks

After the district qualifies fleet modernization pr ojects for funding, but before the district APCO signs an agreement for funding a project, the district must submit the project to ARB to check for outstanding violations. The proce ss for completing the compliance

check is as follows:

• The district shall email its ARB district liaison the contact name, address, organization or business name, DOT number, CHP numb er, and VIN for the project.

• The liaison shall then forward that information el ectronically to the responsible parties at ARB. The liaison will email the distric t the results of the compliance check within 14 working days.

• If the compliance check indicates there is an outs tanding violation the district shall inform the applicant in writing that no disbursemen t may be made until the owner provides proof that the fines have been paid.

• Clearance of the citation requires proof of repair or a “Statement of Facts” documenting that the old truck will be scrapped. T he “Statement of Facts” can be written by the dealer or the participant explaining the old truck will be scrapped as required by the Carl Moyer fleet modernization prog ram. The statement and a copy of the fleet modernization contract should be provi ded along with the penalty payment. Include the citation number on all docume nts.

G. Recovery of Incentive Funds

The district must establish a mechanism to assure t he participant fulfills all contractual obligations. This includes owning and operating th e replacement vehicle for the project life, and staying in the agreed upon vocation for t he duration of the contract.II-24 FLEET MODERNIZATION

Participants must meet an 80 percent minimum baseli ne mileage requirement for the life of the project and agree to repay a pro-rated porti on of the incentive funding for failure to fulfill the minimum performance requirements. Upon request of the district, ARB may approve an alternate minimum baseline requirement. The district will determine the method of notice and achieving fund recovery. Opti ons may include:

• List the district as co-lien holder on the title o f the replacement vehicle for the term of the agreement. The participant must submit a compl eted Uniform Commercial Code-1 Financing Statement Form to the California S ecretary of State, with a copy sent to the district, within 30 days of the purchas e of the replacement vehicle. The financing statement must have the district as the s ecured party and the vehicle

should be listed as collateral.

• The participant must be the registered owner of th e replacement vehicle for the project life. If the replacement vehicle is sold w ithin the project life, the new owner must assume the obligations under the participant’s contract with the district and comply with the terms and conditions of the contrac t. The district must approve the change in ownership prior to the sale.

XI. References

ARB 2002. California Emissions Inventory Model, EM FAC2002, v2.2 (Apr03).

ARB 2005. California Emissions Inventory Model, EM FAC2005.

Gateway Cities Council of Governments. November 200 4, Gateway Cities Clean Air Pilot Program: Truck Fleet Modernization Program G uidelines.

Sacramento Metropolitan Air Quality Management Dist rict. May 2005. Fleet Modernization Impacts on Normal Vehicle Turnover - Issue Paper.

Sacramento Metropolitan Air Quality Management Dist rict. Fall 2004, Version 3.0. The Sacramento Emergency Clean Air Transportation ( SECAT) Program, Policies

and Guidelines.

United States Department of Commerce Economics and Statistics Administration,

United States Census Bureau. 2002 Economic Census Vehicle Inventory and Use Survey, Geographic Area Series.III-1 REDUCING HDV IDLING EMISSIONS Chapter Three

REDUCING IDLING EMISSIONS FROM HEAVY-DUTY VEHICLES

This chapter addresses the project criteria for idl ing reduction technologies that may be installed on on-road heavy-duty vehicles. Projects that meet the criteria may be considered for Carl Moyer Program funding. This ch apter contains a brief overview of the engine idling practices of truck operators, emi ssion inventories, available control technology, emission reductions and cost effectiven ess calculations. This chapter expands eligible idling reduction techniques to ele ctrification projects. Information specific to electric auxiliary power units (APU) an d other zero-emission technologies is provided in Chapter 12: Zero-Emission Technologies

.

I. Introduction

Heavy-duty vehicles are employed in line-haul servi ce carrying goods across the state and throughout the nation. The majority of heavy-d uty vehicles are powered by diesel engines. Heavy-duty vehicles employed in line-haul service are typically greater than 33,000 pounds gross vehicle weight rating (GVWR), a re grouped under a Class 8 truck classification, and often accrue very high annual m ileage. It is not uncommon for a line-haul truck to accrue 100,000 miles or more ann ually. These heavy-duty vehicles (HDV) idle at low engine speeds for a significant a mount of time for various operational reasons. The low engine efficiency at these idle s peeds results in significant increases in fuel consumption and emissions.

Truck idling practices vary among different fleets, operators, and geographical locations. Two main purposes of idling are to keep the engine and fuel warm, especially in cold weather, and to heat or cool the truck’s cab/sleepe r compartment. Although technologies for reducing idling emissions from hea vy-duty trucks are commercially available, relatively high initial costs have preve nted these idling reduction strategies from being more widely utilized.

The average power demand for an APU operating under extreme climate conditions is estimated to be approximately 2.3 kilowatts (kW) f or winter conditions and 3.1 kW for summer conditions [Wallace, 2003; Lutsey, 2003]. S taff assumed that the diesel-fueled APU would provide an average of 2.7 kW power to pro vide sleeper berth comfort and electrical power for accessories.

The Carl Moyer Program can provide incentives to re duce emissions from truck idling by encouraging the purchase and installation of alt ernative idling reduction technologies. These technologies not only reduce i dling emissions from heavy-duty trucks, but can also result in fuel savings and red uced maintenance costs to truck operators.III-2 REDUCING HDV IDLING EMISSIONS

II. Emissions

According to the Air Resources Board’s (ARB or “Boa rd”) emission inventory, idling emissions from heavy heavy-duty diesel (HHD) trucks account for approximately 29 tons per day (tpd) of nitrogen oxides (NOx), 1.6 tpd of reactive organic gases (ROG) and 0.7 tpd of particulate matter (PM10). This rep resents about 7 percent of the total NOx, ROG and PM10 emissions from this sector of veh icles in California. Idling emissions from individual trucks are significant an d the idling emission rate for HHD diesel trucks is large. For example, a single HHD truck that idles an average of 1,500 hours per year emits approximately: 564 pound s/year of NOx, 114 pounds/year of ROG and 7.6 pounds/year of PM10 from idling.

III. Regulatory Requirements

A. School Bus Idling

An airborne toxic control measure (ATCM) became eff ective on July 16, 2003, that restricts idling by school buses and other special classes of vehicles at schools. The regulation also limited the idling of these buses a nd vehicles to no more than five minutes when within 100 feet of a school. [ARB, 200 3]

B. Heavy-Duty Vehicle Idling

On February 1, 2005, an ATCM became effective that extended idling limitations beyond school buses to include diesel APUs, and hea vy-duty diesel trucks over 10,000 GVWR. The ATCM specifically limits idling o f the main engine or the operation of diesel-fueled APU systems when health, safety or operational concerns are not an issue. This regulation limits the idling of HDVs t o no more than five minutes if the truck is within 100 feet of a school or home. These requ irements apply to both California and

non-California trucks.

In addition to statewide restrictions on idling, so me local government and municipalities have ordinances restricting idling time for some ty pes of vehicles. Carl Moyer Program funding for projects must be surplus to the require ments of both the ATCM and local

ordinances.

C. Idling Restrictions

In October 2005, the Board approved a proposal that removes the exemption for idling of heavy duty trucks equipped with sleeper berths. This proposal prohibits heavy duty trucks with sleeper berths from idling more than fi ve minutes unless certain conditions are met. Beginning in 2008, model year 2006 and old er trucks may operate APUs powered by a certified diesel engine. Model year 2 007 and newer trucks may only operate an APU for longer than 5 minutes if the exh aust of the APU powered by a certified diesel engine is equipped with a level 3 PM retrofit device or is routed through the main engine exhaust with a level 3 PM retrofit device; however, the truck must not

be within 100 feet of a restricted area such as a s chool or residential area. In addition,III-3 REDUCING HDV IDLING EMISSIONS

2008 and subsequent model year heavy duty trucks ma y idle longer than longer than

five minutes in a non-restricted area if the main e ngine meets a low NOx standard of 30 g/hr.

The Board approval of the regulation means that beg inning with the 2008 calendar year the baseline for calculating the benefits of truck idle reduction projects will be the 15.1 g/hr NMHC+NOx and .087 g/hr of PM emission rat e for APUs assumed in the idling regulation. Zero-emission or near-zero emis sion technologies would be eligible for funding using the lower emission baseline.

IV. Potential Projects

A. Auxiliary Power Units

APUs are usually installed on the truck chassis out side the truck cab to provide power for the truck’s accessory loads and to keep the eng ine warm when the truck is parked. This allows the operator to refrain from idling the truck’s main engine. The extent of

labor involved in the installation of an APU on the truck depends on the configuration of the truck engine and chassis and the plumbing of it s heating/cooling system. Heating and cooling of the cab compartment are accomplished through either dedicated equipment supplied with the APU or through the truc k's existing heating and cooling system. APUs are commercially available and meet m ost of the power needs of truck operators. Some APUs are available with an electri c option for a few hundred dollars

more.

B. Truck Stop Electrification

Another strategy for reducing truck idling is the r etrofit of trucks with components such as engine block heaters, fuel heaters, electric hea ters and air conditioning for cab/sleeper areas. This strategy requires the inst allation of charging infrastructure at truck stops and rest areas. Specific information a nd project criteria pertaining to truck stop electrification is provided in Chapter 12: Ze ro-Emission Technologies.

C. Advanced Travel Center Electrification

An alternative to truck stop electrification that d oes not require truck modification has been introduced by IdleAire Technologies. Specific information and project criteria are provided in Chapter 12: Zero-Emission Technologies

.

D. Direct-Fired Heaters and Thermal Storage

Direct-fired heaters for truck heating applications are devices that use the combustion heat of a small internal combustion engine to provi de heat directly to the truck's cab/sleeper area through the use of a small heat ex changer. Because it is designed to provide heat directly from a combustion flame, the heating efficiency of these units is higher than that obtained through the truck's engin e due to reduced mechanical losses and fuel consumption. Two primary limitations of d irect-fired heaters for this applicationIII-4 REDUCING HDV IDLING EMISSIONS

are that they cannot provide cooling and that they draw on the truck's battery power during operation. Direct-fired heater technologies continue to evolve, but they have not gained widespread commercial acceptance.

Thermal storage systems provide both heating and co oling for the cab/sleeper area. This technology uses the heat of transformation ass ociated with material phase change to provide heating and cooling to the cab/sleeper a rea. However, the technology cannot provide cooling at night unless the truck's air con ditioner was used in the daytime.

V. Project Criteria

The project criteria for eligible idling reduction strategies for heavy-duty vehicles provide districts and fleet operators with the minimum requ irements for participation in the Carl Moyer Program. The criteria have been develop ed specifically for idling reduction technologies that will be installed on a heavy-duty truck to reduce the truck's idling emissions. The ARB may develop additional project criteria for idling reduction strategies if additional technologies enter the mar ket.

Idling reduction technologies provide a cost-effect ive means to reduce idling emissions from heavy-duty diesel trucks. Carl Moyer Program funds can be used to pay for a portion of the capital cost of idling reduction equ ipment as well as the installation costs.

A. General Criteria

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum of agreement/understanding, settlement agreement, miti gation requirement, or other legally binding document.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG + combustion PM10, reduced calculated in accordance with the cost-effectiveness methodology discussed in this section.

• No emission reductions generated with funding from the Carl Moyer Program shall be used as marketable emission reduction credits, o r to satisfy any emission reduction obligation of any person or entity.

• No emission reductions from a project funded by th e Carl Moyer Program shall be used for credit under any federal or state emission averaging, banking and trading

program

• Carl Moyer Program grants shall be no greater than a project’s incremental cost. The incremental cost is the cost of the project min us the baseline cost. The incremental cost shall be reduced by the value of a ny current financial incentive that reduces the project price, including but not limite d to tax credits or deductions, grants, or other public financial assistance.III-5 REDUCING HDV IDLING EMISSIONS

• Projects must have a minimum project life of three years. The ARB may approve shorter project life in writing for good cause on a case-by-case basis. Projects with shorter lives may be subject to additional funding restrictions, such as a lower cost-effectiveness limit or a project cost cap.

• The contract term must extend to the end of the pr oject life.

• The default project life does not consider upcomin g regulatory requirements. Project life may be shorter due to regulatory requirements.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• Repower projects must provide at least a 15 percen t NOx emission benefit compared to baseline idling NOx emissions.

• 75 percent of the APU usage must be in California. The ARB may approve exceptions on a case by case basis.

• Air districts are encouraged to co-fund projects t hat will produce emission reductions

in more than one air district.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis is evidence provided to the air district suggests potential surplus, real, quantifiable and enforceable emission reducti on benefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on a case-by-case basis. Al l projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

B. APUs and Alternative Technologies

• The engine used in an APU must meet current emissi on standards, be certified by the ARB for sale in California, and comply with all applicable durability and warranty requirements.

• If an internal combustion engine APU is available with an electric plug-in option, the incremental cost of the plug-in option is eligible for Carl Moyer Program funding.

• An hour-meter or other means to measure usage must be installed with an APU to track operation. The participant shall provide thi s information to ARB or the district upon request during the life of the project.III-6 REDUCING HDV IDLING EMISSIONS

• The default load factor for the engine used in an APU shall be the maximum power rating of the engine, unless another load factor is proposed by the participant and supported by proper documentation as determined by the ARB.

• Emission benefits must be based on the vehicle's i dling time that occurs in California. At least 75 percent of the idling time must be in California. ARB may approve exceptions on a case-by-case basis.

• The actual capital cost, up to $5,500, of an APU m ay be eligible for funding.

• The installation cost of an APU, including install ation of an hour-meter, up to a maximum of $1,700 per diesel APU and a maximum of $ 3,400 per alternative fuel, electric motor, or fuel cell APU, may be funded.

• The full cost of a PM retrofit device may be funde d provided that the cost-effectiveness for the overall project does not exceed $14,300.

C. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

VI. Minimum Project Requirements

A. Application

In order to qualify for incentive funds, districts make applications available and solicit proposals for reduced-emission projects from HDV op erators. The applicant must provide at least the following information listed i n Table 3-2.

A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.III-7 REDUCING HDV IDLING EMISSIONS

Table 3-2 Minimum Application Information Auxiliary Power Unit Projects

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contract Phone Number Person with Contract Signing Authority Person who Filled out Funding Application Project Address (if different from above)

Vehicle Information Vehicle Type (Solid Waste Collection Vehicle, Street Sweeper, School Bus, Urban Bus, Other Transit Vehicle, Other Heavy-Heavy Duty Vehicle,Other Medium-Heavy Duty Vehicle, or Other LightHeavy Duty Vehicle) Vehicle Identification Number (VIN)

Vehicle Make

Vehicle Model

Model Year
Vehicle GVWR

Vehicle License Plate Number Department of Transportation Number (if interstate) California Highway Patrol CA Number Engine Make Engine Model Engine Year Engine Serial Number ARB Certification Executive Order (if Engine Certified to Alt. NOx Standard) Fuel Type Auxiliary Engine Make, Model, Year, Serial Number, Horsepower, Tier, and Family (if applicable) APU Engine Information Engine Make Engine Model Engine Year Fuel Type Engine Tier Certified APU or Alternative Technology Cost APU or Alternative Technology Installation Cost

Activity Information Percent Operation in California Percent Operation in District Project Life

Annual Gallons Fuel Used

Annual Hours Idled

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional)

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.III-8 REDUCING HDV IDLING EMISSIONS

B. Reporting and Monitoring

The district has the authority to conduct periodic checks or solicit operating records from the applicant that has received Carl Moyer Program funds for emission reduction projects. This is to ensure that the APU is operat ed as stated in the program application. Fleet operators participating in the Carl Moyer Program are required to keep appropriate records during the life of the pro ject. Records must contain, at a minimum, total California hours idled. Records mus t be retained and updated throughout the project life and made available at t he request of the district.

VII. References

ARB, 2003. Final Regulation Order: Airborne Toxic Control Measure to Limit School Bus Idling And Idling At Schools. July 16, 2003.

ARB, 2004. Staff Report: Initial Statement of Reas ons for Proposed Rulemaking, Airborne Toxic Control Measure for Idling Reduction . September 1, 2005.

Lutsey, Nicholas. Fuel Cells For Auxiliary Power i n Trucks: Requirements, Benefits, and Marketability. Institute of Transportation Stu dies, University of California, Davis. UCD-ITS-RR-03-04. July 2003.

Wallace, John Paul. Modeling of Line-Haul Truck Au xiliary Power Units in ADVISOR 2002. Institute of Transportation Studies, Univers ity of California, Davis. UCD-ITS-RR03-07. August 2003IV-1 TRANSPORT

REFRIGERATION UNITS Chapter Four

TRANSPORT REFRIGERATION UNITS

This chapter is a new source category and presents the project criteria for transport refrigeration units (TRU) and transport refrigerati on generator sets. This chapter also contains a brief overview of the engine operating c haracteristics of transport refrigeration units, emission inventory, available control technology, potential projects eligible for funding, and emission reduction and co st-effectiveness calculation methodologies. Information is also provided for po tential consideration of other alternative technologies or strategies that may off er real emission reduction of transport refrigeration unit operations from transport refrig eration unit diesel engines. For more information about zero-emission technology, consult Chapter 12: Zero-Emission Technologies.

I. Introduction

TRUs are employed in service carrying perishable go ods throughout the world. TRUs use an internal combustion engine to run the compre ssor of the refrigeration system. TRUs and TRU generator sets operating in the United States are generally powered by diesel engines, typically between 9 and 36 horsepow er. TRUs may be installed on trucks, trailers, shipping containers, and railcars to refrigerate perishable contents. When a refrigerated trailer becomes disconnected fr om the tractor, the trailer TRU will continue to maintain temperature. When the tractor is parked at a rest stop or shut down, the TRU engine continues to cycle. TRU gener ator sets are also attached to ocean-going shipping containers when they are on la nd, to provide electric power to the shipping container's refrigeration system between t he port and cold storage warehouse

or distribution center.

II. Emissions

There are currently about 31,000 TRUs and TRU gener ator sets based in California, and another 7,500 out-of-state refrigerated trailer s and 1,700 railcar TRUs operating in California at any given time. The Air Resources Board (ARB or “Board”) estimates that emissions of diesel particulate emissions from TRUs and TRU generator sets were almost two tons per day or 2.6 percent of the total statewide diesel particulate matter

emissions in 2000. Estimated NOx emissions in 2000 were about 20 tons per day. Based on emission projections, the diesel PM10 emis sions from TRUs will decrease to about 1.6 tons per day in 2010 and decrease again t o about 0.3 tons per day in 2020,

because of the cumulative effects of new emission s tandards and ARB's in-use TRU Airborne Toxic Control Measure (ATCM).IV-2 TRANSPORT

REFRIGERATION UNITS III. Regulatory Requirements

In February 2004, the Board approved an ATCM for TR Us that set in-use performance standards for PM10 emissions beginning in 2008. Co mpliance is phased in over the next 12 years.

The TRU ATCM In-Use Performance Standards and compl iance dates must be considered when determining whether emission reduct ions are surplus. Table 4-1 gives

the TRU and TRU Generator Set In-Use Performance St andards and Table 4-2 provides a graphical representation of the implemen tation schedule. The region in Table 4-2 labeled Potential Surplus Reductions show s a window of opportunity where projects can achieve emissions reductions prior to the compliance date of the TRU ATCM [ARB, 2003].

Table 4-1

TRU and TRU Generator Set In-Use Performance Standa rds

Horsepower Category Engine Certification Value

PM10 Emissions Standard (grams/horsepower-hour) Options for Meeting

Performance Standard

Low Emission Performance Standards

less than 25 0.30 g/hp-hr  Use an engine that meets the Engine Certification Value

 Retrofit with at least Level 2 DECS* (> 50% PM10 reduction)

 Use an Alternative Technology

25 or greater 0.22 g/hp-hr  Use an engine that meets the Engine Certification Value

 Retrofit with at least Level 2 DECS

 Use an Alternative Technology

Ultra-Low Emission Performance Standard

less than 25 N/A  Retrofit with Level 3 DECS (> 85% PM10 reduction)

 Use an Alternative Technology

25 or greater 0.02 g/hp-hr  Use an engine that meets the Engine Certification Value

 Retrofit with Level 3 DECS

 Use an Alternative Technology * Diesel Emission Control SystemIV-3 TRANSPORT

REFRIGERATION UNITS • Table 4-2

≥ 25 hp TRU and TRU Generator Set Engines In-Use Com pliance Dates

(Compliance date is December 31 of applicable year)

In-Use Compliance Year

MY ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20

‘01 & Older L L L L L L L U U U U U U

‘02 L L L L L L L U U U U U

‘03 U U U U U U U U U U U

‘04 U U U U U U U U U U

‘05 U U U U U U U U U

‘06 U U U U U U U U

‘07 U U U U U U U

‘08 U U U U U U

‘09 U U U U U

‘10 U U U U

‘11 U U U

‘12 U U

‘13

< 25 Hp 2013 and subsequent MY must meet ULETRU 7 y ears after MY L = Low-Emission TRU, U = Ultra Low-Emission TRU

IV. Potential Projects

TRU owners can apply for Carl Moyer Program grant f unds for projects that achieve surplus emission reductions by repowering with clea ner certified engines, installing verified retrofit diesel emission control strategie s, or using alternative technologies to reduce or eliminate NOx, ROG, and PM10 emissions. Many of the technologies discussed below have not yet been verified. Howeve r, they are included in this discussion since they could provide real emission r eductions and could potentially be verified during the time frame covered by the Guide lines.

A. New Purchase

Purchase of a new TRU is eligible for Carl Moyer Pr ogram funding if the new TRU is cleaner than what would have normally been purchase d – a diesel engine. Thus the incremental cost of the new purchase of alternative technologies may be eligible for Carl Moyer Program grants.

B. Repower

Repowering TRUs with cleaner certified diesel engin es is one type of potential project. However, there may be some compatibility issues wit h some engines due to spatial and electronic control differences (e.g., the new engin e is too big to fit in the available space or the electronic controls are incompatible). Thos e compatibility issues must be resolved prior to submitting a grant application.

Potential Surplus

EmissionsIV-4 TRANSPORT

REFRIGERATION UNITS C. Retrofit with a Diesel Emission Control Strategy

Retrofit with a diesel emission control strategy is another potential project if the retrofit is not required by the TRU ATCM or any other regulatio n. Diesel retrofit systems must be verified by ARB in order to qualify for Carl Moyer Program funding. Potential retrofits include diesel oxidation catalysts, diesel particul ate filters, flow though filters and fuel

additives.

D. Alternative Technologies to Reduce or Eliminate NOx, ROG, and PM

Emissions

Alternative technologies are defined under the TRU ATCM as electric standby, cryogenic temperature control systems, alternative fuels, alternative diesel fuels, fuel cells, and other systems that reduce or eliminate d iesel engine operation. Brief descriptions of each of these potential project typ es follow.

1. Electric Standby

Electric standby equipped TRUs allow the TRU engine to be shut off when a compatible electric power supply is available at a facility so TRU diesel engine emissions are eliminated while the TRU is plugged in at the facil ity. See Chapter 12: Zero-Emission Technologies for more information.

2. Hybrid Electric TRU

Hybrid electric TRUs have been available in Europe for several years. The diesel engine drives a generator that, in turn, powers an electric semi-hermetic refrigeration compressor and electrically driven fans, all contro lled by an advanced microprocessor. This hybrid electric TRU is easily adaptable to run on electric grid power when at a facility, so that diesel engine operation is elimin ated. The cost is higher than a traditional TRU, but costs less than it would to re trofit a traditional TRU with an electric standby system. One big advantage is that the hybr id design provides full refrigeration capacity for the initial chill-down. The hybrid de sign is also very likely to be adaptable for future use with fuel cell technology

3. Cryogenic Temperature Control Systems

Cryogenic temperature control systems heat and cool using a cryogen, such as liquid carbon dioxide or liquid nitrogen that is routed th rough an evaporator coil that cools air blown over the coil. Since there is no diesel engi ne, diesel PM10 emissions are eliminated. Capital costs for these types of syste ms are ten percent higher than a diesel TRU, but the facility infrastructure costs f or cryogenic "fuel" storage and dispensing add to the capital cost.IV-5 TRANSPORT

REFRIGERATION UNITS 4. Alternative Fuels

Conventional diesel engines are internal combustion , compression-ignition engines. In contrast, engines that operate on an alternative fu el, such as compressed natural gas (CNG), liquefied natural gas (LNG), and liquid prop ane gas (LPG), are usually spark-ignited. Engines certified to operate on alt ernative fuels produce substantially lower PM10 and NOx emissions than diesel-fueled eng ines that are not equipped with

exhaust after-treatment.

5. Alternative Diesel Fuels

Before any alternative diesel fuel can be used to c omply with a diesel PM10 control measure or used in a Carl Moyer Program project, it must be verified through ARB’s Verification Procedure, which includes a special se ction that deals specifically with

alternative diesel fuels.

The Carl Moyer Program does not fund fuel-only proj ects however, districts may use matching funds to pay for the incremental cost of a lternative diesel fuels if they are part of a Carl Moyer Program project. Recordkeeping and reporting must provide assurance that the emission reductions are real, quantifiable , surplus and enforceable.

6. Fuel Cells

Compared to a conventional diesel-powered TRU, fuel cell TRUs would offer zero or near-zero emissions of criteria pollutants and lowe r greenhouse gas emissions. At this time, there are no fuel cells appropriately sized f or use on a TRU, but electrically-driven TRUs could be powered by fuel cells on or off the r oad (e.g., at a facility).

V. Project Criteria

Participating districts retain the authority to imp ose additional more stringent requirements in order to address local issues.

A. General Criteria

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum of agreement/understanding, settlement agreement, miti gation requirement, or other legally binding document.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ combustion PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in this chapter.IV-6 TRANSPORT

REFRIGERATION UNITS • No emission reductions generated by the Carl Moyer Program shall be used as marketable emission reduction credits, or to satisf y any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging, banking, and t rading program.

• Carl Moyer Program grants shall be no greater than a project’s incremental cost. The incremental cost is the cost of the project min us the baseline cost. The incremental cost shall be reduced by the value of a ny current financial incentive that reduces the project price, including but not limite d to tax credits or deductions, grants, or other public financial assistance.

• Projects must have a minimum project life of three years. ARB may approve shorter project life in writing for good cause on a case-by -case basis. Projects with shorter lives may be subject to additional funding restrict ions, such as a lower cost-effectiveness limit or a project cost cap.

• The contract term must extend to the end of the pr oject life.

• The default project life does not consider upcomin g regulatory requirements. Project life may be shorter due to regulatory requirements.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All p rojects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• Projects with more than a 5 year project life must have a contract term of at least 5 years.

• Emission benefits must be based on the TRU operati ons that occur in California. 75 percent of TRU operations must be in California. The ARB may approve exceptions in writing on a case-by-case basis.

• Air districts are encouraged to co-fund projects t hat will produce emission reductions in more than one air district. (Most TRU projects will provide multi-district emission reductions.)

B. Repowers

• For repower projects, Carl Moyer Program funds sha ll only be used to pay for the incremental costs of an eligible engine and the cos t to install that engine in the TRU equipment.IV-7 TRANSPORT

REFRIGERATION UNITS • The replacement engine for repower projects used i n the TRU must meet current emission standards and be certified by the ARB for sale in California. Compliance with all applicable durability and warranty require ments is required.

• Repower projects must provide at least 15 percent NOx emission benefit compared

to baseline NOx emission level.

• The participant shall install an hour-meter or oth er means to measure usage on the TRU to track operating hours, and shall provide thi s information to ARB or the district
upon request.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis is evidence provided to the air district suggests potential surplus, real, quantifiable and enforceable emission reducti on benefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on a case-by-case basis. Al l projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

C. Retrofits

• For retrofit projects, diesel emission control str ategies used on TRUs must be verified by ARB for sale in California. Compliance with all applicable durability and warranty requirements is required.

• Alternative technologies such as electric standby and pure cryogenic systems are not required to be verified, but ARB must review an d approve such systems in writing on a case-by-case basis. The district shall require recordkeeping and reporting to assure that estimated emission reducti ons are achieved.

D. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

VI. Cost-Effectiveness

To receive Carl Moyer Program funding, each project must meet the maximum cost-effective threshold of $14,300 per weighted to n of covered pollutants reduced. Only funds provided by the Carl Moyer Program and l ocal district matching funds are to be used in determining cost-effectiveness.

In general, the emission reduction benefit represen ts the difference in the emission level of a baseline engine and reduced-emission engine, r etrofit, or use of alternative technology. TRU engine annual emissions are calcul ated by multiplying the emissionIV-8 TRANSPORT

REFRIGERATION UNITS factor in grams per horsepower-hour for each pollut ant by the rated hp, load factor, and activity (annual engine hours of operation).

VII. Minimum Project Requirements

A. Application

In order to qualify for incentive funds, districts make applications available and solicit proposals for reduced-emission projects from distri bution centers and TRU owners. The applicant must provide at least the following i nformation listed in Table 4-4.

A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.

B. Reporting and Monitoring

The district has the authority to conduct periodic checks or solicit operating records from the applicant that has received Carl Moyer Program funds for emission reduction projects. This is to ensure that the TRU is operat ed as stated in the program application. Fleet operators participating in the Carl Moyer Program are required to keep appropriate records during the life of the pro ject. Records must contain, at a minimum, total California hours idled. Records mus t be retained and updated throughout the project life and made available at t he request of the district.IV-9 TRANSPORT

REFRIGERATION UNITS Table 4-4 Minimum Application Information Transport Refrigera tion Unit Projects

Applicant Information Organization, Company or Individual Name
Street Address City, County, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

Project Information TRU Application (Truck, Trailer, Shipping Container, or Railcar) Vehicle ID Type (VIN, Railcar Recording Mark, Container Number, or Company ID Number)
Vehicle ID Number
TRU Make
TRU Model
TRU Model Year TRU Serial Number TRU Horsepower Rating TRU Fuel Type TRU Engine Tier TRU Engine Family

Activity Information Will the new engine have a functioning hour meter for the life of the project? Annual Hours of Operation or Annual Gallons of Fuel Consumption Percent Operation in California Percent Operation in District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)
EMU Make
EMU Model
EMU Model Year
EMU ID Number EMU Cost (optional) ADDITIONAL INFORMATION –
NEW PURCHASE ONLY Project Year of Purchase of New Equipment Baseline Cost
New TRU Cost New TRU Vendor (optional)

ADDITIONAL INFORMATION –
REPOWER PROJECTS ONLY
Reduced Emission TRU Make
Reduced Emission TRU Model
Reduced Emission TRU Model Year Reduced Emission TRU Serial Number Reduced Emission TRU Horsepower Rating Reduced Emission TRU Fuel Type Reduced Emission TRU Engine Tier Reduced Emission TRU Engine Family TRU Remanufacture Cost – Parts
TRU Remanufacture Cost – Labor TRU Repower Cost – Engine TRU Repower Cost – Labor New Engine Vendor (optional) New Engine Installer (optional)

ADDITIONAL INFORMATION –
RETROFIT PROJECTS ONLY
ARB-Verified Retrofit Device
Retrofit Device Make
Retrofit Device Serial Number Verification Level (Level 1, Level 2, Level 3) ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)
Retrofit Device ARB Executive Order
Retrofit Device Cost Cost of Retrofit Device Installation Cost (optional ) Cost of Retrofit Maintenance for Life of Project (optional)

VIII. References

ARB, 2003. ARB, Staff Report: Initial Statement of Reasons for Proposed Rulemaking,

Airborne Toxic Control Measure for In-Use Diesel-Fu eled Transport Refrigeration Units (TRU) and TRU Generator Sets, and Facilities Where TRUs Operate, Stationary Source Division, Emissions Assessment Branch, October 28, 2003.V-1 OFF-ROAD CI ENGINES Chapter Five

COMPRESSION-IGNITION OFF-ROAD EQUIPMENT

This chapter presents the project criteria for off- road compression-ignition (CI) equipment projects under the Carl Moyer Program. I t also contains a brief overview of the current regulations, incentive projects eligibl e for funding, project criteria, cost effectiveness calculations, and minimum application requirements for off-road CI equipment. Updates to the project criteria in this chapter since the 2003 Guidelines include: 1) lowering the minimum engine horsepower (hp) to 25 hp, and 2) prioritizing Tier 2 or Tier 3 repowers.

I. Introduction

Off-road CI equipment eligible for Carl Moyer Progr am funding includes equipment 25 hp (19 kilowatt) or greater such as construction and agricultural equipment. This also includes auxiliary engines found on off-road e quipment and on-road vehicles. Excluded from this discussion are engines that prop el or are used on locomotives, marine vessel propulsion and auxiliary, and most fo rklifts (except for class 7 forklifts) which are discussed in other chapters of these Guid elines. Aircraft engines are excluded from the Carl Moyer Program. In addition, the Carl Moyer Program does not apply to off-road engines used for underground mini ng operations, which are regulated by the Mining Safety and Health Administration.

II. Emissions

Off-road CI engines are used in a wide array of app lications including agricultural tractors, backhoes, excavators, trenchers, and moto r graders. Off-road equipment can be categorized broadly into equipment less than 175 hp and equipment equal to or greater than 175 hp.

Table 5-1 displays statewide population and emissio n estimates for off-road CI engines.

Table 5-1 Statewide Emissions from Off-Road Compression-Ignit ion Engines* (tons per day)

Population NOx ROG PM10

2005 350,420 453 54 30
2010 354,175 354 24 39 *Includes agricultural, construction, dredging, dri lling, industrial, and logging equipment.V-2 OFF-ROAD CI ENGINES

III. Regulatory Requirements

A. Off-Road Compression Engine Regulations

The Air Resources Board (ARB or “Board”) is preempt ed from regulating new farm and construction equipment less than 175 hp. The U.S. Environmental Protection Agency (U.S. EPA) has sole authority to regulate this type of equipment. ARB has the authority to regulate new off-road equipment equal to or grea ter than 175 hp and non-preempted off-road equipment less than 175 hp. ARB and U.S. EPA have worked closely to harmonize the off-road CI standards. ARB is not pr eempted from regulating in-use equipment; a discussion of these regulations may be found in Section III. B of this chapter.

Current off-road engine regulations contain exhaust emission standards that engines are not to exceed under steady state and transient conditions [ARB, 2000 and ARB, 2004b]. In addition, the regulations include provi sions that assist engine and equipment manufacturers in complying with emission standards through: 1) flexibility provisions for equipment manufacturers, 2) Averaging, Banking, and Trading (ABT) programs, and 3) the Tier 4 Early Introduction Incentive for engi ne manufacturers. Since the objective of the Carl Moyer Program is the deployment of clea ner-than-required low-emission engines to achieve maximum emission reduction benef its, it is important to understand the regulatory provisions that allow for the sale o f engines not meeting the current applicable emission standards.

1. Emission Standards

Emissions from off-road equipment between 175 and 7 50 horsepower were uncontrolled prior to 1996. Estimates of NOx emiss ion rates from uncontrolled off-road engines range from 8.2 g/bhp-hr to 14 g/bhp-hr. In January 1992, the Board adopted exhaust emission standards for off-road diesel-cycl e engines 175 hp and greater, effective beginning with 1996 model year engines.

In August 1996, the U.S. EPA, ARB, and off-road die sel engine manufacturers signed a Statement of Principles which called for harmonizat ion of ARB and U.S. EPA off-road diesel engine regulations, as appropriate, in excha nge for an accelerated introduction of progressively more stringent standards. The U.S. E PA adopted emission standards in 1998 and again in 2004 that provided for new NOx + non-methane hydrocarbons (NMHC), PM, and carbon monoxide (CO) emission stand ards for engines within different power categories in a tiered approach, co mmonly referred to as “Tier”

standards. These standards are defined in Title 13 , California Code of Regulations (CCR), sections 2423(b)(1). ARB has since amended the California exhaust emission standards for off-road diesel engines to harmonize with the federal requirements. Table 5-2 summarizes the existing and future emissi on standards for these engines.V-3 OFF-ROAD CI ENGINES Table 5-2

ARB and U.S. EPA Exhaust Emission Standards for New Off-Road Diesel Engines ≥ 25 hp

(g/bhp-hr)

Maximum

Rated

Power (hp) Tier Model Year NOx HC NOx+NMHC CO PM

25=<50 Tier 1 2000-2003 — — 7.1 4.1 0.60

Tier 2 2004-2007 — — 5.6 4.1 0.45

Tier 4 Interim 2008-2012 — — 5.6 4.1 0.22

Tier 4 2013 and later — — 3.5 4.1 0.02

Tier 1 2000-2003 (a) 6.9 — — — —

Tier 2 2004-2007 — — 5.6 3.7 0.30 50=<75

Tier 3 (b) 2008-2011 — — 3.5 3.7 0.30

Tier 4 Interim 2008-2012 — — 3.5 3.7 0.22

Tier 4 2013 and later — — 3.5 3.7 0.02

Tier 1 2000-2003 (a) 6.9 — — — —

Tier 2 2004-2007 — — 5.6 3.7 0.30 75=<100

Tier 3 2008-2011 — — 3.5 3.7 0.30

Tier 4 Interim (c) 2012-2014 2.5 0.14 — 3.7 0.015

Tier 4 2015 and later 0.3 0.14 — 3.7 0.015

Tier 1 2000-2002 (a) 6.9 — — — —

Tier 2 2003-2006 — — 4.9 3.7 0.22 100=<175

Tier 3 2007-2011 — — 3.0 2.6 0.22

Tier 4 Interim (c) 2012-2014 2.5 0.14 — 3.7 0.015

Tier 4 2015 and later 0.3 0.14 — 3.7 0.015

Tier 1 1996-2002 6.9 1.0 — 8.5 0.40

Tier 2 2003-2005 — — 4.9 2.6 0.15 175=<300

Tier 3 (d) 2006-2010 — — 3.0 2.6 0.15

Tier 4 Interim (c) 2011-2013 1.5 0.14 — 2.6 0.015

Tier 4 2013 and later 0.3 0.14 — 2.2 0.015

Tier 1 1996-2000 6.9 1.0 — 8.5 0.40

Tier 2 2001-2005 — — 4.8 2.6 0.15 300=<600

Tier 3 (d) 2006-2010 — — 3.0 2.6 0.15

Tier 4 Interim (c) 2011-2013 1.5 0.14 — 2.6 0.015

Tier 4 2013 and later 0.3 0.14 — 2.2 0.015

Tier 1 1996-2001 6.9 1.0 — 8.5 0.40

Tier 2 2002-2005 — — 4.8 2.6 0.15 600=<750

Tier 3 (d) 2006-2010 — — 3.0 2.6 0.15

Tier 4 Interim (c) 2011-2013 1.5 0.14 — 2.6 0.015

Tier 4 2013 and later 0.3 0.14 — 2.2 0.015

≥ 750 Tier 1 2000-2005 6.9 1.0 — 8.5 0.4

Tier 2 2006-2010 — — 4.8 2.6 0.15

Tier 4 Interim 2011-2014 2.6 0.30 — 2.6 0.07

Tier 4 2015 and later 2.6 0.14 — 2.6 0.03

(a) ARB model years, U.S. EPA model years for Tier 1 st art at 1998 for 50=<75 hp and 75=<100 hp, and 1997 for 100=<175 hp.
(b) Engine families in this power category may meet the Tier 3 PM standard instead of the Tier 4 interim P M standard in exchange for introducing the final Tier 4 PM sta ndard in 2012.
(c) The implementation schedule shown is the three-year alternate NOx approach. Other schedules are avail able.
(d) Caterpillar, Cummins, Detroit Diesel Corporation, a nd Volvo Truck Corporation have agreed to comply wi th these standards by 2005.V-4 OFF-ROAD CI ENGINES 2. Flexibility Provisions for Equipment Manufacture rs

Current regulations for off-road heavy-duty CI engi nes contain a flexibility provision that allows original equipment manufacturers (OEMs) to u se engines not meeting current applicable emission standards in their existing pro duct line for new equipment. Thus, engines that are certified under the flexibility pr ovisions do not comply with current applicable emission standards, and are not eligible as replacement engines for the Carl Moyer Program. The flexibility provision took effect with the introduction of Tier 2 engines (Tier 1 for power categories less than 50 h p) and applies separately for each engine power category. Engine families certified u nder the flexibility provision must have previously been certified to a prior engine st andard, for example Tier 1.

There are four main elements to the flexibility pro gram: 1) a percent-of-production allowance, 2) a small-volume allowance, 3) continua nce of the Tier 1 allowance to use up existing inventories of engines, and 4) availabi lity of hardship relief. The adoption of

the Tier 4 emission standards added several additio nal components to the program including technical hardship allowances, retroactiv e use of flexibilities, delayed implementation, an economic hardship allowance, an early introduction incentive, and a labeling requirement. The percent-of-production al lowance is the largest component of the program and allows each equipment manufacturer to use flexibility engines in its new product line over a seven-year period in cumula tive quantities that sum up to 80 percent of a single year’s national production a t the end of the seven years.

Except for engines used in flexibility allowances p rior to January 1, 2007, flexibility engines will be labeled according to the requiremen ts of Title 13, CCR, sections 2423(d) and 2424(c). In addition, the Executive Order (EO) for engines certified under this program state that the engines were certified in co mpliance with Title 13, CCR, section 2423(d).

3. Averaging, Banking, and Trading

Off-road engine manufacturers are allowed the flexi bility to participate in an ABT program in lieu of only producing engines that comp ly with the current emission standards. The emission benefits from an engine ce rtified to a lower Family Emission Limit (FEL) may be used to offset the emissions fro m engines certified to a higher FEL levels within the engine manufacturer’s ABT program . As a result, ABT emission credits are generated from the lower FEL level engine since it is certified lower than the required emission standards. These engines are onl y eligible for Carl Moyer Program funding as part of repower projects. In these case s, the emission factor based on the applicable emission standard, not the certified FEL level, will be used in emission

calculations. The FEL emission level is identified on the EO and is located under the

emission standard.V-5 OFF-ROAD CI ENGINES 4. Tier 4 Early Introduction Incentives for Engine Manufacturers (“Engine Offsets”)

Engine manufacturers may voluntarily certify engine s to the Tier 4 standards prior to 2011 in exchange for making fewer Tier 4 engines af ter 2011. These early introduction Tier 4 engines are not eligible for Carl Moyer Prog ram funding. These engines are first offered to OEMs to use as part of the flexibility p rogram (see Section III. A. 2 above). Should the OEM decline the engine, the engine manuf acturer may use it as part of the “Tier 4 Early Introduction Incentive for Engine Man ufacturers” created by Title 13, CCR, section 2423(b)(6).

Engines used as part of the “Tier 4 Early Introduct ion Incentive for Engine Manufacturers” must be in production by September 1 of the year prior to the first model year when the standards would otherwise be applicab le, where the model year means the manufacturer’s annual production period which i ncludes January 1 of a calendar year or, if the manufacturer has no annual producti on period, the calendar year. Engines sold during the transitional “phase-in” mod el years (years where the Tier 4 interim standards are in effect) are not considered “early” introduction engines.

These engines will meet all federal labeling requir ements but will add the following statement: “This engine meets U.S. EPA emission st andards under 40 CFR 1039.104(a)” and an additional statement of “meetin g ARB requirements under 13 CCR section 2423(b)(6)”. In addition, the EO for engin es certified under this program will reference that the engines were certified in compli ance with 13 CCR section 2423(b)(6).

B. Upcoming Regulations

The Board approved a cargo handling equipment regul ation in December 2005 that applies to diesel-fueled cargo handling equipment a t California's ports and intermodal railyards. Cargo handling equipment is used to tran sfer goods and includes equipment such as yard tractors (hostlers), rubber tire gantr y cranes, top handlers, side handlers, forklifts, loaders, and mobile cranes. Specific Ca rl Moyer Program project criteria are being identified for this equipment and will be ava ilable in early 2006.

The ARB is also developing a control measure to red uce diesel particulate matter emissions from in-use, off-road, diesel-fueled, mob ile equipment greater than or equal to 25 horsepower. This includes, but is not limite d to, construction equipment, mining equipment, airport ground support equipment, and in dustrial equipment such as forklifts. The proposal will not cover equipment used in agric ultural operations, cargo handling at ports and intermodal rail facilities, or equipment already covered by an in-use rule or agreement. This item is scheduled to be heard by t he Board in 2006. If approved, it may affect project criteria for off-road projects.V-6 OFF-ROAD CI ENGINES

IV. Potential Projects

The Carl Moyer Program can achieve significant emis sion reductions from off-road diesel engines operating in California. All eligib le projects must use certified technology or technology that has been verified by the ARB for real and quantifiable emission reductions that go beyond any regulatory requiremen t. The project criteria included in this chapter are designed to ensure that emission r eductions achieved by the deployment of reduced-emission engines or retrofit technologies are surplus, real, quantifiable, and enforceable.

Off-road projects fall into three distinct categori es: 1) new purchase of equipment equipped with an emission certified engine, 2) repo wer with an emission certified engine, and 3) retrofit with a verified diesel emis sion control strategy (DECS). Based on past experience, most projects will likely fall und er the repower category for off-road projects. Emerging reduced-emission technologies, such as engine retrofit or new engine technologies, will become eligible for progr am participation after ARB grants

verification or certification for sale in Californi a. Districts have the option to fund the

cost difference between conventional diesel fuel an d an alternative fuel such as alternative-diesel fuel, CNG, LNG, and LPG with mat ching funds. The fuel purchase must be an integral part of an engine purchase, rep ower, or retrofit project.

Auxiliary engines on mobile equipment are considere d portable engines and are regulated by the ARB’s Portable Equipment Air Toxic s Control Measure (ATCM). Auxiliary engines that are an integral part of the vehicle’s or barge’s main function, and are not covered under any district rule may be elig ible for Carl Moyer Program funding. Because the ATCM requires that all portable engines be certified engines by January 1, 2010, projects must begin by January 1, 2007, to meet the minimum three year project life requirement [ARB, 2004a].

Class 7 diesel forklifts are the only diesel forkli fts eligible for Carl Moyer Program funding and are subject to all off-road project cri teria. The district must obtain and verify

documentation of the classification of the forklift prior to funding. Class 7 forklifts typically have a lift capacity of over 6,000 pounds , pneumatic tires, and internal combustion, compression ignition engines powered al most exclusively by diesel. Many of the characteristics of these forklifts, includin g pneumatic tires for rough terrain, make them exclusively for outdoor use.

A. New Purchase

For most engine categories, the current standard is Tier 2 or Tier 3 with an optional Blue Sky Standard that applies through Tier 3. How ever, at this time, no engines have been certified to the Blue Sky standard. New equip ment having an engine that was certified to any FEL level is not eligible for new purchase in the Carl Moyer Program. This is because the emission level from an eligible FEL engine in the new equipment would be considered to be at the level of the requi red emission standard for that engine,V-7 OFF-ROAD CI ENGINES

through the averaging provision of the ABT program discussed previously. Therefore, the emissions from an FEL engine in the new equipme nt would not be surplus when compared to the emissions from a new engine meeting the required emission

standards.

For some off-road equipment such as yard tractors, it may be possible to purchase new equipment with a new on-road engine certified to AR B’s optional NOx emission credit standard instead of a new off-road engine. Where t his is the case, emission benefits relative to the baseline engine are calculated base d on on-road engine emission factors. If an applicant provides ARB with documentation sho wing that in past practice, the fleet has been powered by off-road engines, then the base line emission may be calculated using the off-road engine emission factors.

B. Repower

Replacement of the in-use engine (i.e., repower) wi th an emission-certified engine instead of rebuilding the existing engine to its or iginal uncontrolled specifications is the most common type of off-road project. Although thi s is commonly a diesel-to-diesel repower, significant NOx and PM benefits are achiev ed due to the high emission levels of the uncontrolled engine being replaced. Eligibl e engines are those that are certified to the current applicable emission standard or to a n optional credit emission standard. For off-road equipment with similar modes of operat ion to on-road vehicles, other possible options include the replacement of an olde r uncontrolled diesel off-road engine with a new or rebuilt on-road engine certified to a n emission standard equal to or lower

than the Tier 2 off-road emission standard or a new er emission-certified alternative fuel engine.

The Carl Moyer Program Guidelines require repower w ith a newer engine meeting current applicable emission standards (i.e., Tier 2 or Tier 3). If this is not a technical or practical option, as determined by the engine manuf acturer, a newer emission-certified engine that meets the Tier 1 standards may be used. Off-road CI engines have undergone major design changes to meet new and more stringent emission regulations. Off-road engine manufacturers have made significant hardware modifications in order to meet the Tier 2 emission standards for engines with horsepower rating of 100 hp and greater. The incorporation of air-to-air aftercool ers and other auxiliary systems have resulted in Tier 2 engines for some applications th at are physically different than the earlier Tier 1 engines. As a result, some existing equipment cannot accept Tier 2 engines without extensive modifications. This may involve cutting the equipment frame to gain adequate space for the Tier 2 engine. In t hese situations, technical, cost, and safety considerations make a new Tier 2 engine repo wer infeasible. Thus, the use of a newer emission-certified engine meeting the earlier Tier 1 emission standard may be justified. Specific information on the eligibility of these projects is further described in the project criteria.

In addition, ARB staff requires that all repower pr ojects funded by the Carl Moyer Program install a retrofit device if one is available. ARB staff requires thatV-8 OFF-ROAD CI ENGINES

the highest level ARB-verified retrofit device be i nstalled for retrofit projects if the project meets the cost effectiveness limit of $14,300 per w eighted ton. If a Level 3 device is not

feasible or does not meet the cost-effectiveness li mit, a Level 2 device must be installed; if no Level 3 or Level 2 devices are fea sible a Level 1 device must be installed. Due to limited current availability of retrofit dev ices for off-road engines it is likely that a

retrofit will not be available in the near term. R epower projects are not disqualified from participation in the Carl Moyer Program if retrofit devices are not available, feasible, or if the cost of the available retrofit places the proje ct over cost-effectiveness limit.

Funding is not available for projects where a spark -ignition engine (i.e., natural gas, gasoline, etc.) is replaced with a diesel engine.

C. Retrofit

Retrofit refers to modifications made to an engine and/or fuel system such that the specifications of the retrofitted engine are not th e same as the original engine, please refer to Appendix F for more detailed information. The most straightforward retrofit projects are add-on after treatments. Other retrof its include upgrades of components that can be accomplished at the time of engine rebu ild and result in a lower emission configuration. To qualify for Carl Moyer Program f unding, the retrofit technology must be verified for sale in California and must comply with established durability and warranty requirements. Retrofits are verified for diesel PM reductions of: Level 1 - 25 percent, Level 2 - 50 percent, and Level 3 - 85 percent. Although retrofit technology options for off-road diesel engines are limited, it is possible that retrofit technologies that

have been used to reduce NOx and PM emissions from on-road heavy-duty diesel engines may be used to control off-road engine emis sions in some applications. More information on DECS, including a list of currently verified DECS, may be found at http://www.arb.ca.gov/diesel/verdev/verdev.htm

.

V. Project Criteria

Participating districts retain the authority to imp ose more stringent additional requirements in order to address local concerns.

A. General

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum of agreement/understanding with a regulatory agency, s ettlement agreement, mitigation requirement, or other legal mandate.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG + PM10 reduced, calculated in accordance with the c ost-effectiveness methodology discussed in this chapter.V-9 OFF-ROAD CI ENGINES

• No emission reductions generated by the Carl Moyer Program shall be used as marketable emission reduction credits, or to satisf y any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging, banking, and t rading program.

• Carl Moyer Program grants can be no greater than a project’s incremental cost. The incremental cost is the cost of the project minus t he baseline cost. The incremental cost shall be reduced by the value of any current f inancial incentive that reduces the project price, including, but not limited to, tax c redits or deductions, grants, or other public financial assistance.

• Projects must have a minimum project life of three years. ARB may approve a shorter project life in writing for good cause on a case-by-case basis. Projects with shorter lives may be subject to additional funding restrictions, such as a lower cost-effectiveness limit or a project cost cap.

• The contract term must extend to the end of the pr oject life.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the air district suggests potential surplus, real, quantifiable, and enforceable emission reduct ion benefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• The certification emission standard and Tier desig nation for the engine must be

determined from the Executive Order issued for that engine, not by the engine model year. Executive Orders for off-road engines may be found at http://www.arb.ca.gov/msprog/offroad/cert/cert,php

• Reduced-emission engines or retrofits must be cert ified/verified for sale in California and must comply with durability and warranty requir ements. These may include new ARB certified engines, ARB certified after-market p art engine/control devices, and verified diesel emission control strategies.

• Engines participating in the ABT program that are certified to FELs higher than the applicable emission standards, as designated on the Executive Order, are ineligible to participate in the Carl Moyer Program.

• Equipment manufactured under the “Flexibility Prov isions for Equipment Manufacturers”, as detailed in Title 13, CCR, secti on 2423(d), are ineligible for Carl Moyer Program funding as a replacement engine.V-10 OFF-ROAD CI ENGINES

• Engines that are participating in the “Tier 4 Earl y Introduction Incentive for Engine Manufacturers” program, as detailed in Title 13, CC R, section 2423(b)(6), are ineligible for Carl Moyer Program funding.

• Auxiliary engines on mobile equipment are eligible for Carl Moyer Program funding through January 1, 2007 if they are an integral par t of the vehicle’s or vessel’s main function and are not covered by any district rule.

• Class 7 diesel forklifts are the only diesel forkl ifts eligible for diesel-to-diesel repower in the Carl Moyer Program and are subject to all of f-road project criteria. The district must obtain and verify documentation of the classif ication of the forklift prior to funding.

• Funded projects must operate at least 75 percent o f total equipment operation hours

in California.

• Default project life

Off-road new purchase 10 years
Off-road repower 7 years

Off-road repower and retrofit 5 years

Retrofit 5 years

Applicants must provide documentation to justify a longer project life.

B. New Purchase

• Engines must be certified to an ARB optional NOx o r NOx+NMHC emission credit standard for off-road diesel engines that is at lea st 30 percent lower than current applicable emission standards or for some equipment , such as yard tractors, an on-road engine certified to ARB’s optional NOx emis sion credit standard

• Engines that are certified to FEL levels are not e ligible for funding in new equipment purchase projects.

C. Repower

• For repower projects that replace uncontrolled eng ines in existing equipment, the replacement engine must be certified to either: 1) the current applicable emission standard except as noted below, 2) to a FEL NOx or NOx+NMHC level that is lower than the required emission standard, or 3) to an op tional credit emission standard as applicable for the horsepower rating.

• For equipment repower projects that replace emissi on-certified engines in existing equipment, the replacement engine must be certified to a NOx emission standardV-11 OFF-ROAD CI ENGINES

that is at least 15 percent lower than the emission standard(s) applicable to the existing engine.

• Engines used in equipment repower projects may be new, emission-certified rebuilt, or emission-certified remanufactured units. Eligib le new engine are those offered by the original equipment manufacturer (OEM) or by a n on-OEM who demonstrates to the ARB that the repower is functionally equivalent with regard to emissions, durability, and safety as described in Appendix G. Eligible rebuilt or remanufactured engines are those offered by the OEM or by a non-OE M rebuilder who demonstrates to the ARB that the rebuilt engine and parts are fu nctionally equivalent from an emissions and durability standpoint to the original engine and components being replaced as described in Appendix G. Rebuilt and r emanufactured engines that are

not re-certified to new emission standards shall us e the emission standards associated with the original engine block.

• ARB strongly recommends that districts give priori ty to Tier 2 or Tier 3 repowers. However, ARB recognizes that in some cases repower with the current applicable standard is not possible. In these cases a Tier 1 repower may be allowed if the conditions below are met and the project meets a pr oject cost-effectiveness cap of $6,000 per weighted ton of emission reductions for the repower portion of the project. Tier 1 repowers of specialty equipment no t meeting the project costeffectiveness cap may be allowed on a case-by-case basis.

• If repower with an engine meeting the current appl icable standard is technically infeasible, unsafe, or cost prohibitive, the replac ement must meet the most current practicable previously applicable emission standard . The district shall determine eligibility of a Tier 1 engine repower project on a case-by-case basis by obtaining a Tier 2/Tier 3 repower exemption using one of the tw o following methods:

1. The Carl Moyer Program application may include a written statement of reason(s) from the engine manufacturer verifying th at a particular piece of equipment cannot accommodate an engine meeting curr ent standards without major modifications, safety risks, or exorbitant co st. The letter must include information on the equipment being repowered, the e ngine being replaced, the reason why an engine meeting the currently applicab le standard cannot be used (including details on required equipment modificati ons with pictures of the equipment, engineering drawings as necessary, and c ost for the Tier 2/Tier 3 engine), and the proposed Tier 1 replacement engine . Districts must submit the written statement of reason(s) to ARB as an attachm ent to the annual report.

2. The engine manufacturer may provide ARB with suf ficient information on engine and/or equipment models for which Tier 2/Tier 3 rep owers are available, and engine and/or equipment models for which Tier 2/Tie r 3 repowers are not feasible. Engine manufacturers who are interested in pursuing this option should

contact ARB. ARB staff will maintain a list of suc h engines and/or equipment

models and make that list available to district sta ff.V-12 OFF-ROAD CI ENGINES

• If an ARB-verified diesel emission control strateg y is available for the replacement engine, ARB requires installation of the retrofit v erified to the highest level, as discussed in the retrofit section of these project criteria, which still meets the cost-effectiveness limit of $14,300.

• For repowers of equipment with baseline engines ma nufactured under the flexibility provision, as detailed in Title 13, CCR, section 24 23(d), baseline emission rates shall be determined by using the latest applicable Tier emission standard for that engine model year and horsepower rating. Alternati ve emission rates will be allowed

with documentation of the actual emission rates fro m the manufacturer based on the engine serial number. Districts must submit all do cumentation to ARB as an attachment to the annual report.

• Replacement of an uncontrolled diesel off-road eng ine with a new or rebuilt on-road engine certified to an emission standard equal to o r lower than the Tier 2 off-road

emission standard or a newer emission-certified alt ernative-fuel engine is eligible for funding in off-road equipment with similar modes of operation to on-road vehicles. Other equipment may be eligible for funding on a ca se-by-case basis. These repowers must meet all other applicable project cri teria.

D. Retrofit

• Only ARB-verified retrofits are eligible for fundi ng. Emerging engine retrofits will become eligible for Program participation once ARB grants verification for sale in California. Non-verified technologies may be consi dered on a case by case basis if: 1) an application for verification of the retrofit or add-on equipment on the proposed engine category is pending, or 2) for highly specia lized equipment where it is unlikely

that a retrofit would be verified.

• Retrofit projects that control PM must use the hig hest level ARB-verified technology available for the equipment being retrofitted. The following are the diesel PM

reductions for each verified level:

– Level 1 - 25 percent;

– Level 2 - 50 percent; and

– Level 3 - 85 percent.

• Retrofit projects that control NOx must reduce NOx emissions from uncontrolled engines to the current applicable emission standard . If this is not feasible, the project must reduce NOx to at least the applicable Tier 1 NOx emission level (6.9 g/bhp-hr or lower). For emission-certified en gines, the retrofit technology must be able to reduce NOx emissions by at least 15 perc ent.

• The cost of the retrofit, filters, and maintenance of the retrofit device needed during the project life may be paid for with incentive fun ding provided it meets the

cost-effectiveness limit.V-13 OFF-ROAD CI ENGINES

E. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

VI. Cost-Effectiveness

To receive Carl Moyer Program funding, each project must meet the maximum cost-effective threshold of $14,300 per weighted to n of covered pollutants reduced. Only funds provided by the Carl Moyer Program and l ocal district matching funds are to be used in determining cost-effectiveness.

Emission reduction benefits represent the differenc e in the emission levels of the existing baseline technology relative to the newer, reduced-emission technology. Baseline and reduced engine emission factors are li sted in Table B-12 in Appendix B. These factors reflect preliminary emission data bas ed on model input values to the OFFROAD emission inventory model for engines greate r than or equal to 25 hp.

A detailed description of how to calculate cost-eff ectiveness can be found in Appendix C. Off-road emission reduction calculatio ns will use either the fuel or hour based formula as discussed Appendix C. The equipme nt activity level must be based on actual hours reading from an hour-meter or other similarly appropriate documentation provided by the applicant (i.e., fuel receipts). Future annual hours of equipment operation for determining emission reduct ions must be based only on readings from an installed and fully operational ho ur-meter. A properly functioning hour-meter is required to support equipment activit y information included in the application for Carl Moyer Program funding. See th e Administrative Part of the Guidelines for additional information on this topic . In addition, specific cost-effectiveness criteria and sample calculations for off-road projects may be found in Section V of Appendix D.

VII. Minimum Project Requirements

These are minimum project application requirements; the district has full authority to require additional application, reporting, monitori ng, and scrapping requirements.

A. Application

Districts solicit bids for reduced-emission project s from off-road diesel equipment operators. The applicant must provide the minimum information illustrated in Table 5-3

below.V-14 OFF-ROAD CI ENGINES Table 5-3 Minimum Application Information for Off-road CI Pro jects

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

Equipment Information Equipment Type/Function Equipment Make Equipment Model Equipment Model Year Equipment Serial Number Number of Main Engines on this Equipment

Activity Information Will the piece of equipment have a functioning hour meter for the full project life? (yes/no) Equipment Annual Hours of Operation or Gallons Fuel Consumption Percent Operation in California Percent Operation in Air District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional)

ADDITIONAL INFORMATION --

NEW PURCHASE PROJECTS ONLY Projected Year of Purchase of New Equipment Engine Information (for each project engine) New Engine Family New Engine Make New Engine Model New Engine Serial Number New Engine Horsepower NEW PURCHASE PROJECTS ONLY(cont.) New Engine Tier Fuel Type
Baseline Cost New Equipment Cost

ADDITIONAL INFORMATION --

REPOWER PROJECT ONLY Number of Main Engines to be Repowered Engine Information (for each project engine) Baseline Fuel Type Baseline Engine Make, Model, and Year Baseline Engine Horsepower Baseline Engine Tier Baseline Engine Serial Number Engine Annual Gallons Fuel Consumption or Hours of Operation Reduced Engine Fuel Type Reduced Engine Make, Model, and Year Reduced Engine Horsepower Reduced Engine Tier Reduced Engine Serial Number (if available) Reduced Engine Family Engine Baseline Cost New Engine Cost New Engine Installation Cost (optional)

ADDITIONAL INFORMATION --

RETROFITS ONLY Engine Make, Model, and Year Engine Horsepower Engine Serial Number Engine Tier Fuel Type

ARB-Verified Retrofit Device Name

Retrofit Device Serial Number

Retrofit Device Verification Level ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)

Retrofit Device ARB Executive Order Number

Cost of Retrofit Cost of Installation (optional) Cost of Maintenance for Life of Project (optional)

A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications forV-15 OFF-ROAD CI ENGINES

the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.

B. Reporting and Monitoring

Districts must abide by all reporting and monitorin g requirements described in Part I-Program Administration. Monitoring of proje ct progress ensures that the vehicle or engine is operated as stated in the program appl ication. Fleet operators and transit agencies participating in the Carl Moyer Program ar e required to keep appropriate records during the life of the funded project. Rec ords must be retained and updated for the duration of the project life and made available at the request of the district or ARB.

IV. References

ARB, 2000. Staff Report: Initial Statement of Reas ons. Public Hearing to Consider Amendments to Off-road Compression-ignition Engine Regulations: 2000 and Later Emissions Standards, Compliance Requirements and Te st Procedures. http://www.arb.ca.gov/regact/ciengine/isor.pdf

ARB, 2004a. Staff Report: Initial Statement of Rea sons. Proposed Amendments to the regulation for Statewide Portable Equipment Registr ation Program. http://www.arb.ca.gov/regact/portreg/isor.pdf

ARB, 2004b. Staff Report: Initial Statement of Rea sons. Public Hearing to Consider Amendments to the California Off-road Emissions Reg ulations for Compression-ignition Engines and Equipment. http://www.arb.ca.gov/regact /offrdcie/isor.pdfVI-1 OFF-ROAD LSI ENGINES Chapter Six

LARGE SPARK-IGNITION OFF-ROAD EQUIPMENT

Due to the upcoming regulations for large spark-ign ition (LSI) equipment that include forklifts, this chapter has been added to replace t he Forklift Chapter in the 2003 Guidelines. This revision of the Guidelines expand s funding opportunities from only forklifts to all LSI equipment types. The chapter provides an overview of off-road LSI equipment and discusses the emissions from LSI equi pment, the State and federal emission standards, and potential types of projects eligible for funding.

The Carl Moyer Program funds projects that provide emission reductions that are surplus to any regulation. Because proposed regula tions for LSI equipment are scheduled for consideration by the Board, staff wil l provide specific criteria to districts through a technical advisory approved by the Execut ive Officer once the Board has approved the proposed regulations.

In the interim, districts may continue to use the 2 003 Carl Moyer Program Guidelines to fund projects or request consideration of other pro jects on a case-by-case basis.

I. Introduction

LSI engines are typically derived from automobile e ngines and are most commonly fueled by gasoline or liquefied petroleum gas. A s mall number are fueled by compressed natural gas (CNG), and some have dual fu el capability. Off-road LSI equipment includes the following types of equipment : large turf care equipment, scrubber/sweepers, airport service vehicles, and a variety of other agricultural, construction, and general industrial equipment. Th e largest group of LSI equipment in California is forklifts, representing almost half o f the LSI inventory.

The U.S. Environmental Protection Agency (U.S. EPA) has sole authority to regulate new farm and construction equipment less than 175 h p. However, the Air Resources Board (ARB) has authority to regulate off-road equi pment equal to or greater than 175 hp, and all in-use off-road equipment and non-p reempted off-road equipment less than 175 hp.

II. Emissions

Uncontrolled LSI engines can emit more than 12 gram s per brake horsepower-hour (g/bhp-hr) of oxides of nitrogen plus hydrocarbons (NOx + HC). Statewide, the NOx + HC emissions from LSI equipment are approxima tely 70 tons per day.

The equipment categories shown in Table 6-1 represe nt the largest contribution to the overall off-road LSI inventory and are the focus of the proposed LSI regulation. Although these three categories account for only 60 percent of the off-road LSI equipment population in 2004, they account for more than 80 percent of the NOx + HCVI-2 OFF-ROAD LSI ENGINES Table 6-1 Statewide Emissions from Off-Road LSI Equipment

(tons per day)

2004 2010 2020 Equipment Category NOx ROG NOx ROG NOx ROG

Industrial Forklifts 40.4 11.8 19.9 5.3 15.6 3.4 Airport Ground Support Equipment 3.3 0.6 1.5 0.3 1.0 0.2

Sweeper/Scrubbers 0.8 0.2 0.3 0.1 0.2 0.1

Total 44.5 12.6 21.7 5.7 16.8 3.7

off-road LSI emission inventory. As shown in Table 6-1, most of those emissions are from forklifts, 80 percent of which are in large fl eets.

III. Regulatory Requirements

A. Emission Standards

In 1998, the ARB adopted LSI regulations that addre ssed the State's obligations under the 1994 State Implementation Plan (SIP). The SIP is California’s federally required plan describing how the State will reduce emissions and meet federal clean air

standards.

That regulation required all new LSI engines over 2 5 horsepower sold in California to be certified to a standard of 3.0 g/bhp-hr of NOx + HC . This was to be phased in from 2001 to 2004. In 2002, U.S. EPA adopted a more st ringent standard requiring that new LSI engines meet a 2.0 standard of g/bhp-hr of NOx + HC beginning in 2007.

B. Proposed Regulation

In order to achieve California’s clean air goals, t he 2003 SIP calls for further reductions from new and in-use LSI engines.

1. Emission Standards

The ARB staff has developed a proposal that would p rovide more low emission options for equipment purchases. Staff is proposing to req uire 2007 model year engines to meet a 2.0 g/bhp-hr standard and 2010 and subsequen t model year engines to meet a 0.6 g/bhp-hr standard. ARB staff is also proposing NOx + HC optional stand ards so that new 2007 engines can be certified to 0.1, 0.2, 0.4, 0.6, 1.0, and 1.5 g/bhp-hr. For model years 2010 and beyond, new engines could be certifi ed to 0.1, 0.2, and 0.4 g/bhp-hr.VI-3 OFF-ROAD LSI ENGINES 2. Fleet Rules

As part of the staff proposal, equipment fleets wou ld have to meet average emission requirements. Large and mid-size fleets of forklif ts, airport ground support equipment (GSE), sweeper/scrubbers (with a displacement great er than one liter), and non-GSE industrial tow tractors would have specific emissio n averages to meet.

Table 6-2 lists the proposed standards required of manufacturers as well as proposed compliance dates for fleets. The proposed averages that fleets would be required to meet would be based on the total number of pieces o f equipment in the fleet. Equipment with hour-meters documenting usage of les s than 251 hours per year would be exempt from the fleet average emission level req uirements.

Table 6-2 Current and Proposed Emission Standards and Fleet A verage Requirements (g/bhp-hr of NOx + HC)

LSI Fleet Type 2005 2006 2007 2008 2009 2010 2011 2012 2013 2016

Current Standards (CA and U.S. EPA) 3.0 2.0

Proposed Standards 3.0 2.0 0.6

Proposed Optional Standards 0.1, 0.2, 0.4, 0.6, 1.0, and 1.5 0.1, 0.2, and 0.4

Proposed Fleet Average Large Fleet Forklift 2.4 2.4 1.7 1.7 1.1 1.1

Proposed Fleet Average

Mid-size Fleet Forklift 2.6 2.6 2.0 2.0 1.4 1.4

Proposed Fleet Average

Non-forklift 3.0 3.0 2.7 2.7 2.5 2.5

Proposed Fleet Average

Small Fleet 3.0

Proposed Fleet Average Ground Support Equipment 3.0

Proposed Agricultural Crop Preparation Services Fleets 12 11.1 10.2 9.3 8.4 7.5 6.6 5.7 3

IV. Potential Projects

The ARB encourages replacement of LSI equipment wit h zero-emission equipment

where feasible. Information about zero-emission st rategies is provided in Chapter 12. Below are brief descriptions of potential projects. Off-road projects fall into three categories: 1) new purchase of an emission certifi ed engine, 2) repower with an emission certified engine, and 3) retrofit with ARB -verified technology.VI-4 OFF-ROAD LSI ENGINES

A. New Purchase

New or expanding facilities purchasing LSI equipmen t with engines that are certified to 30 percent below the current standard may qualify f or funding if the emission reductions are shown to exceed any regulatory requirements or LSI regulations adopted by ARB. This could be accomplished by purchasing equipment that is electric or certified to an optional low emission standard.

Since replacing an older electric forklift with a n ewer electric model would not reduce emissions, projects with "electric to electric" rep lacements are excluded. Purchase of new CNG LSI equipment may also be eligible if it is certified to meet optional low

emission standards.

B. Repower

Repower refers to the replacement of an existing en gine with a newer engine certified to

lower emission standards. This is an alternative t o rebuilding an existing engine to the original higher emitting specifications the existin g engine. The replacement engine must include all the emission control components th at an engine certified to the

standard would have as stated in the Executive Orde r. There may be some limits to repowering of LSI equipment because installing a ne wer engine design into existing equipment may not always be feasible. The baseline emissions for these projects would be the emission rate of the existing engine. The baseline cost would be the cost to rebuild. Repower projects may qualify for fundi ng if the emission reductions are shown to exceed any regulatory requirement or LSI r egulations adopted by ARB. Repowers of certified engines must provide at least a 15 percent emission reduction from the baseline engine and repowers of uncontroll ed engines must meet the current

emission standard.

C. Retrofit

Retrofit refers to modifications or additions made to an engine and/or fuel system such that the specifications of the retrofitted engine a re not the same as the original engine. Data has shown that existing LSI engines retrofitte d with closed loop, catalyst-based emission systems could achieve emission reductions similar to those achieved from new engines designed with catalysts. Retrofits for LSI equipment will likely incorporate advanced automotive-inspired emission control techn ologies that dramatically reduce emissions while meeting operational requirements. (See Appendix F for more discussion on retrofits.) This technology has been in use for about 10 years on a variety of LSI equipment. A retrofit would usually be inst alled at the time of engine rebuild or a regularly scheduled maintenance. To qualify for C arl Moyer Program funding, the emission control technology must be verified for sa le in California. The ARB has an interim verification procedure which manufacturers use to verify their emission control systems for LSI equipment.VI-5 OFF-ROAD LSI ENGINES

To be eligible to receive Carl Moyer Program funds, emission reductions must exceed any regulatory requirement or LSI regulations adopted by ARB. Typ ically under the Carl Moyer Program, retrofit projects are allowed i f they provide at least 15 percent reductions in emissions. However, under the propos ed LSI regulations only retrofits that reduce emissions by 25 percent or more will be verified. Hence, only retrofits that reduce emissions on uncontrolled LSI engines by 25 percent would be for Carl Moyer Program funding. Retrofit systems for i nstallation on emission-certified engines must by verified to a 2.0 g/bhp-hr of NOx+H C level or lower.

The eligible cost would be the complete emission co ntrol system and installation costs. It must be installed according to the criteria stat ed in the interim verification letter or Executive Order as applicable.

Since nearly half of the LSI equipment in Californi a is forklifts, some information on forklift classes is presented below. The Industria l Truck Association (ITA) has defined

seven classes of forklifts. These classes are defi ned by the type of engine, work environment (indoors, outdoors, narrow aisle, smoot h or rough surfaces), operator positions (sit down or standing), and equipment cha racteristics (type of tire, maximum grade, etc.). Several classes are further divided by operating characteristics.

Classifications are described in Table 6-3.

Table 6-3

Forklift Classes

Class Lift Code Engine Type Type/Use 1 1 Counterbalanced rider, stand up
1 4 Three-wheel, sit down 1 5 Counterbalanced rider, sit down 1 6 Counterbalanced rider, sit down

2 Narrow aisle truck

3 Electric

Hand or hand/rider truck

4 Rider, sit down, generally suitable for

indoor use on hard surfaces

5 Internal

Combustion Rider, sit down, typically used

outdoors, on rough surfaces or steep

inclines

6 Internal

combustion

and Electric Ride on unit with the ability to tow at

least 1,000 pounds; designed to tow cargo rather than lift it (e.g. an airport

tug)

7 Internal

combustion (primarily diesel) Rough terrain forklift truck for outdoor

use; almost exclusively powered by

diesel enginesVI-6 OFF-ROAD LSI ENGINES

Class 1 forklifts (lift codes 5 and 6) can be used in many of the same work applications as the class 4 or 5 forklifts because they are simi lar in design and specification. Increasing the use of class 1 forklifts relative to class 4 and 5 forklifts would reduce NOx

emissions of the fleets.

Class 6 trucks are ride-on vehicles designed to tow at least 1,000 pounds. Airport tugs are an example of a Class 6 truck. See Chapter 7 f or a description of Ground Support Equipment.

Class 7 consists of rough terrain forklifts for out door use. See Chapter 5 for project funding criteria for Class 7 forklifts which are us ually powered by diesel engines.

V. Proposed Project Criteria

Since all Carl Moyer Program projects must be surpl us to any regulations, specific project criteria that define project eligibility fo r the LSI source category must be based on LSI regulations that are adopted by the Board. After Board approval of the LSI regulation, staff will develop criteria for those p rojects that provide emission reductions beyond the approved regulatory requirements. Staff recommends that the Board grant the Executive Officer the authority to approve LSI project criteria in a technical advisory. In the interim, forklift projects would be allowed as approved under Chapter 12 (Zero-emission Technologies) for electric forklift replacements and the 2003 Carl Moyer Program Guidelines. During this interim period add itional LSI projects may be considered on a case-by-case basis.

On September 6, 2005, Governor Schwarzenegger signe d Senate Bill 467 (Lowenthal) which requires the ARB to revise the Carl Moyer Pro gram Guidelines to include projects in which an applicant turns in off-road equipment p owered by an internal combustion engines and replaces that equipment with new zero-e mission technologies. This legislation will take effect on January 1, 2006. A RB staff will evaluate how to incorporate the requirements of this legislation in to the Carl Moyer Program in 2006.

VI. Minimum Project Requirements

These are minimum project application requirements; the district has full authority to require additional application, reporting, monitori ng, and scrapping requirements.

A. Application

Districts solicit bids for reduced-emission project s from off-road equipment operators. The applicant must provide the minimum information illustrated in Table 6-4 below.VI-7 OFF-ROAD LSI ENGINES Table 6-4 Minimum Application Requirements for LSI Projects

Applicant Information Organization, Company or Individual Name

Street Address City, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above) Equipment Information Forklift will be for: existing operation or facilit y, facility expansion, or new facility operations (select one) Does the applicant rent/lease forklift to

others? Equipment Make Equipment Model Equipment Model Year Equipment Serial Number Maximum Rated Lift Capacity (pounds)

Forklift Class

Activity Information Will the piece of equipment have a functioning hour meter for the full project life? (yes/no) Annual Hours of Operation or Gallons Fuel Consumption Percent Operation in California Percent Operation in District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional) ADDITIONAL INFORMATION -

NEW PURCHASE ONLY Engine Family Engine Make Engine Model Engine Year Fuel Type Engine Serial Number Engine Tier Baseline Equipment Cost New Equipment Cost

ADDITIONAL INFORMATION -

REPOWER ONLY Baseline Engine Information Fuel Type Engine Make, Model and Year Engine Serial Number Engine Horsepower Engine Tier Engine Remanufacture Cost Reduced Engine Information Fuel Type Engine Make, Model and Year Engine Serial Number Engine Horsepower Engine Tier Newer Engine Cost Newer Engine Installation Cost

ADDITIONAL INFORMATION -

RETROFIT ONLY
ARB-Verified Retrofit Device Name
Retrofit Device Make
Retrofit Device Serial Number Verification Level (Level 1, Level 2, Level 3) ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)
Retrofit Device ARB Executive Order
Retrofit Device Cost
Cost of Retrofit Device Installation Cost (optional) Cost of Retrofit Maintenance for Life of Project (optional)AIRPORT GSE VII -1 Chapter Seven

AIRPORT GROUND SUPPORT EQUIPMENT

This chapter describes the airport ground support e quipment (GSE) category under the Carl Moyer Program. It also gives a brief overview of the requirements for fleets. It discusses different types of equipment, current emi ssion standards, available control technology, and potential incentive projects eligib le for funding.

All Carl Moyer Program projects must be surplus to any regulation. Because regulations for GSE equipment with spark-ignition e ngines are currently scheduled for consideration by the Board in late 2005, this chapt er does not present criteria districts would use in selecting a project to fund. Staff wi ll present specific criteria to districts through a technical advisory approved by the Execut ive Officer once the Board has approved the proposed regulations for large spark-i gnition (LSI) equipment. In the interim, projects would be allowed as approved unde r the 2003 guidelines.

I. Introduction

Airport vehicles and ground support equipment are u sed to transport passengers as well as baggage and freight, to support maintenance and repair functions, and to provide power to various service functions. Airpor t GSE includes aircraft pushback tugs, baggage and cargo tugs, carts, forklifts and lifts, ground power units, air conditioning units, belt loaders, and other equipme nt. Vehicles and equipment at airports fall into two broad categories. Land-side vehicles and equipment are used on the passenger/entry side of the airport. Air-side vehicles are used principally (at least half of the time) on the tarmac. For the purposes of the Carl Moyer Program, this airport GSE chapter is only to be used to evaluate air-side equipment. Land-side vehicles and equipment may be considered under the on-road vehic les (Chapter 1) and off-road vehicles and equipment (Chapters 5 and 6) project c riteria of the Carl Moyer Program.

Airport GSE is typically powered by gasoline, diese l or propane. Airport GSE can also be powered by electric motors having zero exhaust e missions. Electric GSE is commercially available from a number of manufacture rs, and interest in the use of electric equipment is increasing. Currently, there are no federal or California regulations that require the use of electric GSE. There are ai rports throughout the United States, however, with a very high percentage of electric GS E. For example, Denver International Airport was designed for all electric GSE. Also, Logan International Airport in Boston has made considerable progress in switchi ng to electric GSE equipment.

Airport GSE are used from the moment an aircraft la nds until it takes off. GSE perform a variety of functions such as towing, powering, an d servicing aircrafts. There is great diversity in the type of equipment used, as well as in the variety of engines that power GSE. Table 7.1 below lists the commonly used types of GSE. Airport GSE can be owned by airlines, airports, cargo handlers, mail a nd parcel companies or managementAIRPORT GSE VII -2 companies. Most airlines own or maintain the GSE t hey use, or have full service leasing from equipment management companies. Airpo rts usually own the buildings and other stationary infrastructure on site and lea se them to the airlines. The installation and cost of improvements, including el ectric equipment and vehicle infrastructure, are usually subject to the approval of the airport's property management. Costs can either be borne by the airport or passed on to the airlines. There is also a growing trend for airports to own the ground power units and charge the airlines for the time of usage.

Table 7-1 Types of Airport GSE

Baggage Tug

Belt Loader Forklifts, lifts & cargo loaders

Ground Power Unit Aircraft Tug (narrow & wide body)

Airstart Unit

Air Conditioner

Deicer Cart & Lavatory Cart

Fuel Trucks Utility Trucks (lavatory, maintenance,

water & service)

Bobtail

II. Regulatory Requirements

The United States Environmental Protection Agency ( U.S. EPA) and ARB have adopted emission standards that will be phased in for new G SE equipment powered by off-road internal combustion (IC) engines. Internal combust ion engines used in GSE can be powered by either compression-ignition (CI or “dies el”) engines or by spark-ignition (SI) engines using gasoline, compressed natural gas (CNG ), or propane fuel. GSE is regulated under ARB and U.S. EPA's emission standar ds for off-road equipment.

ARB has the authority to regulate new off-road CI e quipment equal to or greater than 175 hp and non-preempted off-road CI less than 175 horsepower. In January 1992, the Board adopted exhaust emission standards for off-ro ad diesel engines 175 hp and greater, effective beginning with 1996 model year e ngines.

In August 1996, the U.S. EPA, ARB, and off-road die sel engine manufacturers signed a Statement of Principles, which established a progre ssive set of emission standards and

called for harmonization of ARB and U.S. EPA off-ro ad diesel engine regulations. The U.S. EPA adopted emission standards in 1998 and aga in in 2004 that provided for new oxides of nitrogen (NOx) + non-methane hydrocarbons (NMHC), PM, and carbon monoxide (CO) emission standards for engines within different power categories to beAIRPORT GSE VII -3 effective in a tiered approach, commonly referred t o as Tier standards. ARB has since

amended the California exhaust emission standards f or off-road diesel engines (originally adopted in 1992) to include non-preempt engines below 175 horsepower and to harmonize with the federal requirements. Please refer to Chapter 5: Compression-Ignition Off-Road Equipment for more di scussion on these requirements.

In 1998, the ARB adopted regulations for off-road L SI engines sold in California. The regulations require new LSI engines 25 horsepower a nd greater to be certified to an emission standard of 3.0 g/bhp-hr of NOx+HC. This standard was phased in between 2001 and 2004. The U.S. EPA followed in 2002, ado pting the same NOx+HC standard beginning in 2004. At the same time, the U.S. EPA also adopted a standard of 2.0 g/bhp-hr NOx+HC, beginning in 2007. ARB is cur rently developing a proposal that includes new emission standards and fleet requireme nts for LSI engines and equipment. This proposal is scheduled for Board co nsideration in late 2005 and would govern the development of project criteria for GSE. Please refer to Chapter 6: Off-Road Large Spark Ignition Equipment for more di scussion on the off-road LSI equipment category and emission requirements.

In 2002, the ARB and several airlines entered into a Memorandum of Understanding (MOU) aimed at introducing cleaner GSE, with an emp hasis on electric GSE, into the South Coast Air Basin. Under the agreement, all ma jor airlines operating at five airports in the South Coast Air Basin (LAX, Ontario, Orange County, Burbank, and Long Beach) would begin to incorporate lower-emission GSE into their fleets. GSE projects that are surplus to the emission reductions required under t he MOU are eligible for funding under the Carl Moyer Program. After the original p ublication of these Guidelines, the airlines exercised their option to terminate the MO U. The South Coast Air Quality Management District should coordinate with ARB staf f prior to funding GSE projects.

III. Potential Projects

A cost-effective strategy to reduce emissions invol ves the purchase of electric GSE,

which has no exhaust emissions. Electric GSE is co mmercially available for a number of equipment types, including belt loaders, baggage tractors, aircraft tugs, lifts, and ground power units. Several airlines and airports have conducted electric GSE demonstration programs and fleet conversion program s. Further discussion of electric GSE experiences can be found in Chapter 12: Zero-E mission Technologies and a report by Arcadis, Geraghty & Miller [ARB, 1999].

Airport GSE emissions can also be decreased by retr ofitting the equipment with a PM filter, diesel oxidation catalyst or a three-way ca talyst. For instance, catalysts have

been added to SI GSE to meet the current LSI emissi on standards. In addition, to reduce emissions GSE can be repowered with a new, c leaner IC engines.

The Carl Moyer Program will fund the purchase of el ectric GSE, as well as GSE repower and retrofit projects if this equipment is not subject to any existing or planned regulations, funded through another incentive progr am, or used to generate credits ofAIRPORT GSE VII -4 any type. In addition, projects that are surplus to the emission reductions required under the South Coast MOU are eligible for funding. The most promising categories are those where electric equipment has been used and demonstr ated and are readily available

from commercial vendors. This includes electric ba ggage tugs, belt loaders, and aircraft tugs. These equipment categories also represent a significant portion of the statewide GSE population and have some of the highest average annual hours of usage. Purchase of electric GSE instead of IC-engine GSE w ould yield significant emission benefits. Therefore, the Carl Moyer Program guidel ines would continue to target these categories. Other promising projects include lifts and cargo loaders. Carts, lavatory carts and air-start units each represent a smaller fraction of the GSE equipment inventory. Fuel, utility, water, and service truck s are not covered under the current airport GSE guidelines, but may be considered under the on-road vehicle category (Chapter 1).

IV. Project Criteria

Since potential GSE projects could involve either C I or SI engines, eligibility criteria for GSE would be dependent on the base engine of the GS E and any regulatory requirements, including fleet requirements, applica ble to the GSE category. For projects involving CI GSE, please refer to Chapter 5. For LSI GSE, specific project criteria will be developed based on the outcome of the proposed regulation for LSI engines and equipment currently scheduled for Board ’s consideration in late 2005. Staff recommends that the Board grant the Executive Officer authority to approve GSE project criteria in a Carl Moyer Program advisory. Until the Board adopts the upcoming LSI regulation, districts may continue to fund GSE projects using the 2003 Carl Moyer Program Guidelines. In addition, airport GSE used at non-commercial airports would be eligible for funding. During this interim period, additional GSE projects may be considered on a case-by-case basis.

Airport GSE projects funded by the Carl Moyer Progr am must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG + combustio n PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in the Guidelines.

On September 6, 2005, Governor Schwarzenegger signe d Senate Bill 467 (Lowenthal) which requires the ARB to revise the Carl Moyer Pro gram Guidelines to include projects in which an applicant turns in off-road equipment p owered by an internal combustion engines and replaces that equipment with new zero-e mission technologies. This legislation will take effect on January 1, 2006. A RB staff will evaluate how to incorporate the requirements of this legislation in to the Carl Moyer Program in 2006.AIRPORT GSE VII -5 Table 7-2 Minimum Application Requirements for Ground Support Equipment

Applicant Information Organization, Company or Individual Name

Street Address City, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

Equipment Information Equipment Type (A/C tugs – narrow body, AC tugs – wide body, belt loader, baggage tug, cargo loaders, ground power units, or lifts) Equipment Operator (airline, airport, equipment management company, or other) Equipment Make, Model and Year Equipment Serial Number Projected Year of Purchase of New GSE

Baseline GSE Fuel

New GSE Vendor (optional)

Activity Information Will the piece of equipment have a functioning hour meter for the full project life? (yes/no) Annual Hours of Operation or Gallons Fuel Consumption Percent Operation in California Percent Operation in District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional) ADDITIONAL INFORMATION -

NEW PURCHASE ONLY Engine Family Engine Make, Model, Year Fuel Type Engine Serial Number Engine Tier Baseline Equipment Cost New Equipment Cost

ADDITIONAL INFORMATION -

REPOWER ONLY Baseline Engine Information Fuel Type Engine Make, Model and Year Engine Serial Number Engine Horsepower Engine Tier Engine Remanufacture Cost Reduced Engine Information Fuel Type Engine Make, Model and Year Engine Serial Number Engine Horsepower Engine Tier Newer Engine Cost Newer Engine Installation Cost

ADDITIONAL INFORMATION -

RETROFIT ONLY
ARB-Verified Retrofit Device Name
Retrofit Device Make Retrofit Device Serial Number Verification Level (Level 1, Level 2, Level 3) ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)
Retrofit Device ARB Executive Order
Retrofit Device Cost
Cost of Retrofit Device Installation Cost Cost of Retrofit Maintenance for Life of Project

V. References

ARB, 1999. Assessment of Airport Ground Support Eq uipment Using Electric Power or Low-Emitting Fuels (Final Report), Final Report to Air Resources Board. Arcadis Geraghty & Miller, July 20, 1999.VIII-1 LOCOMOTIVES Chapter Eight

LOCOMOTIVES

This chapter presents program criteria for locomoti ve projects, and provides an overview of the locomotive industry, locomotive emi ssions, current emission control requirements, and types of incentive projects eligi ble for funding. The chapter also sets requirements for installation of an idle-limiting d evice (ILD) on project locomotives, and defines criteria for hybrid and multiple engine swi tcher projects.

I. Introduction

Locomotives move more than 40 percent of the freigh t in the United States, on a ton-miles basis [Association of American Railroads, 2004]. Most locomotives operating today are diesel-electric, using a diesel engine to drive a generator, which in turn drives the locomotive wheels. Locomotive engines have ver y long useful lives, with the capability of being rebuilt numerous times.

Locomotives provide line-haul, short-haul, switcher , and passenger service. Each of these locomotive types has discrete functions and c haracteristics:

• Line Haul - Line-haul locomotives typically transport goods between major urban centers, sometimes up to 3,000 miles apart. Line-h aul locomotives operate at higher speeds than other locomotives and generally utilize engines with 3,000 or greater horsepower. Because reliability is important for l ine-haul operators, these

locomotives tend to be newer and well-maintained.

• Short-Haul - Short-haul locomotives perform a combination of line-haul and railyard service. Typically, they use 2,000 to 3,800 horsep ower engines, and move freight regionally or locally. For the purposes of the Car l Moyer Program, short-haul

locomotives are treated the same as line-haul locom otives.

• Switcher

- Switch locomotives separate and move railcars fr om track to track or transfer cars to and from regional carriers. Typic ally, they use 1,500 to 2,300 horsepower diesel engines, travel short distances a t low speeds, make numerous stops, and idle frequently for long periods of time . Switcher locomotives are generally remanufactured from aging line-haul locom otives. Switchers are typically the oldest and most poorly maintained locomotives.

• Passenger

- Passenger locomotives haul passengers rather tha n freight, and are typically used in high speed, line-haul type operat ions. The average passenger train is about 10 years old and has a 3,000 to 3,600 hors epower engine.VIII-2 LOCOMOTIVES

II. Emissions

Locomotives are a significant source of oxides of n itrogen (NOx) and particulate matter (PM) emissions. Line haul and short-haul locomotiv es emit over 90 percent of locomotive NOx and PM emissions in California, whil e switchers and passenger locomotives are responsible for about six and two p ercent of locomotive emissions, respectively. Although switch locomotives generate less overall emissions than line-haul locomotives, their emissions tend to be c oncentrated at and around railyards, and can pose greater health concerns for nearby com munities.

About 25 percent of the State’s locomotive NOx and PM emissions occur in the Mojave Desert Air Basin (See Table 8-1, below). The bulk of these emissions are generated by the hauling of freight from the Ports of Los Angele s and Long Beach through Barstow to points east. Barstow is home to the second largest rail yard west of the Mississippi River; the largest is the Roseville Rail Yard in th e Sacramento Valley. Locomotives in the South Coast Air Basin contribute about 20 perce nt of statewide locomotive emissions, while the locomotives in the San Joaquin Valley and Sacramento Valley each account for about 15 percent.

Table 8-1 Locomotive Emission Inventory (Annual average tons per day in 2005)

Region NOx PM
Mojave Desert Air Basin 39 1.3

South Coast Air Basin 33 1.0 San Joaquin Valley 24 0.7 Sacramento Valley 23 0.7 Bay Area 11 0.3

Rest of the State 32 1.1

Total 162 5.1

Based on ARB’s CCOS Emissions Inventory (Version 2. 12)

III. Regulatory Requirements

The U.S. Environmental Protection Agency (U.S. EPA) , with its sole authority to set

emission standards for new and remanufactured locom otives, has adopted phased-in locomotive emission standards [Federal Register, Ap ril 16, 1998]. Federal locomotive emission standards contain two primary provisions: 1) remanufacture emission limits applicable to railroads whenever they remanufacture or rebuild their locomotive engines, and 2) emission standards for new locomoti ves applicable to locomotive

manufacturers.VIII-3 LOCOMOTIVES

A. Locomotive Remanufacture Emission Standards

Regulation of remanufactured locomotives is critica l because locomotives are generally remanufactured five to ten times during their servi ce lives. U.S. EPA’s locomotive remanufacture emission standards therefore provide a mechanism to reduce emissions from the existing fleet. Federal locomotive remanu facture emission standards require locomotives originally manufactured in 1973 or late r to meet the emission limits listed in Table 8-2 whenever they are rebuilt or remanufactur ed. Locomotives originally manufactured before 1973 are exempt from the federa l locomotive remanufacture requirements.

Table 8-2

Federal Exhaust Emission Standards for Locomotives for New Engines and at Time of Remanufacture

(g/bhp-hr)

Duty-cycle Gaseous and Particulate Emissions

HC CO NOx PM Tier 0 (1973 – 2001 model years)

Line-haul/ Passenger 1.00 5.0 9.5 0.60

Switcher 2.10 8.0 14.0 0.72 Tier 1 (2002 – 2004 model years)

Line-haul/ Passenger 0.55 2.2 7.4 0.45

Switcher 1.20 2.5 11.0 0.54 Tier 2 (2005 and later model years)

Line-haul/ Passenger 0.30 1.5 5.5 0.20

Switcher 0.60 2.4 8.1 0.24

U.S. EPA locomotive remanufacture requirements also include an exemption for small railroads -- line-haul railroads with fewer than 1, 500 employees, and switch railroads with fewer than 500 employees. Surface Transportat ion Board (STB) freight railroad classifications, based on annual revenues, provide an equivalent mechanism for distinguishing between large and small railroads in California. STB railroad classifications, and the applicable U.S. EPA remanu facture requirements, are as

follows:

• Class I Railroads - Class I freight railroads are carriers with annu al revenues greater than or equal to $266.7 million. Locomotives owned and operated by Class I

railroads in California must meet the U.S. EPA rema nufacture emission limits in Table 8-2. The Union Pacific Railroad (UP) and the Burlington Northern & Santa Fe Railroad (BNSF) are the only Class I freight railro ad companies operating in

California.VIII-4 LOCOMOTIVES

• Class II Railroads - Class II railroads are carriers with annual reve nues between $21.3 and $266.7 million. Class II railroads are e xempt from federal locomotive remanufacture requirements. Currently, there are n o Class II railroads headquartered in California. For the purposes of the Carl Moyer Program, a Clas s II railroad locomotive must meet the same project crit eria as a Class III railroad

locomotive.

• Class III Railroads - Class III railroads are carriers with annual rev enues less than $21.3 million. Class III railroads in California a re largely exempt from federal locomotive engine remanufacture requirements. As a result, many older, unregulated locomotives continue to operate at Clas s III railroads.

• Military and Industrial Railroads – Over 100 military and industrial locomotives owned by non-railroad companies operate in Californ ia. These locomotives are generally much smaller in size and horsepower than locomotives used by larger rail yards, are confined to small yards or industrial pl ants, and are typically 40 to 60 years old. Military and industrial locomotives are largely exempt from federal locomotive remanufacture requirements. For the pur poses of the Carl Moyer Program, military and industrial locomot ives must meet the same project

criteria as a Class III railroad locomotive.

• Passenger Service Railroads – Amtrak is California’s only passenger locomotive operator not considered a small railroad by federal regulations. Amtrak is therefore the state’s only passenger railroad subject to fede ral locomotive remanufacture requirements. Amtrak locomotives are currently req uired to meet all Tier 1 and Tier 2 emission limits, but are not subject to Tier 0 remanufacture requirements for their 1973 through 2001 model year locomotives unti l 2007.

The practical impact of the federal small railroad exemption from locomotive remanufacture requirements is that UP, BNSF, and Am trak locomotives must meet federal remanufacture emission limits, while other railroads can remanufacture to

uncontrolled emission levels.

B. Emission Standards for New Locomotives

The second component of federal locomotive standard s took effect in 2000, applies to locomotive manufacturers, and requires all new loco motives to meet the tiered emission standards in Table 8-2. Because these standards ap ply to locomotive manufacturers, all railroads, regardless of size, must purchase lo comotives meeting Tier 2 emission limits when purchasing a new locomotive. In practi ce, however, only Class I railroads purchase new locomotives, while Class III railroads typically purchase existing in-use

locomotives.VIII-5 LOCOMOTIVES

C. Upcoming Regulations

In May 2004, U.S. EPA issued an Advanced Notice of Proposed Rulemaking, signaling its intent to pursue more stringent standards for n ew and existing locomotives [U.S. EPA, 2004]. The standards are likely to be m odeled after 2007 and 2010 on-road and off-road diesel engine standards, and to be bas ed on the application of catalytic after-treatment technology. The new locomotive sta ndards could be phased in beginning as early as 2011.

D. South Coast Locomotive Memorandum of Understand ing

The Air Resources Board (ARB or “Board”) and U.S. E PA have an enforceable Memorandum of Understanding (MOU) with UP and BNSF railroads to implement a locomotive fleet average emissions program in the S outh Coast Air Basin (SCAB). The purpose of the South Coast MOU is to expedite the i ntroduction of new, lower-emitting locomotive engines in the SCAB. The agreement comm its UP and BNSF railroads to achieve a 5.5 g/bhp-hr locomotive fleet average NOx emission rate in the SCAB by 2010. The railroads can also get credit towards th eir 2010 fleet average target by exceeding the fleet average emissions targets betwe en 2005 and 2009.

In order to ensure Carl Moyer Program funding achie ves surplus emission reductions, railroads subject to the South Coast MOU must meet the following minimum project

criteria:

• Locomotive projects in the SCAB may not be include d in the MOU fleet average emission rate compliance demonstration.

• The project baseline emission rate for all locomot ives in the SCAB subject to the South Coast MOU shall be equivalent to the Tier 2 e mission rates identified for

line-haul and switch locomotives in Table B-16.

• Class I freight railroad locomotive projects in al l air districts, with the exception of the South Coast, must have a minimum project life of te n years.

This last requirement helps ensure that a cleaner l ocomotive funded in another air district cannot be exchanged for a dirtier locomoti ve in the SCAB at the completion of the project life to demonstrate compliance with the South Coast MOU. Allowing such an exchange, even at the end of the project life, coul d result in higher overall emissions since the locomotive exchanged into the participati ng air district could be dirtier than the original project locomotive.

E. Statewide Locomotive Memorandum of Understandin g

In June 2005, ARB signed a Statewide MOU with UP an d BNSF railroads. The MOU requires UP and BNSF to install an ILD on over 99 p ercent of their intrastate locomotives between June 30, 2006 and June 30, 2008 . The Statewide MOU also requires 80 percent of the diesel fuel dispensed to UP and BNSF locomotives in California to be low-sulfur diesel by the end of 20 06. This agreement complements anVIII-6 LOCOMOTIVES

ARB intrastate locomotive fuels regulation, adopted in November 2004, which requires

all intrastate diesel locomotives to use California reformulated low-sulfur diesel fuel by January 1, 2007. The Statewide MOU also requires t hat railroads conduct health risk assessments at California’s rail yards and consider additional long-term strategies to reduce idling PM emissions and health risks. Becau se the Statewide MOU requires virtually all UP and BNSF locomotives have ILDs, IL D projects for UP and BNSF locomotives are not eligible for Carl Moyer Program funding.

IV. Potential Projects

Projects eligible for Carl Moyer Program incentive funding include repower or retrofit of an existing locomotive engine, purchase of a new re duced-emission engine or locomotive, or installation of an ILD. Hybrid and multiple engine switch locomotive projects have also received Carl Moyer Program fund ing in recent years and are eligible for funding. Other technologies that offer real em ission reductions may also be considered on a case-by-case basis. Funding for pr ojects considered on a case-by-case basis shall be contingent on a clear d emonstration that the project shall achieve surplus, real, quantifiable, and enforceabl e emission reductions.

A. Repower

A locomotive engine repower involves replacing an e xisting locomotive engine with a newer, lower-emitting engine. Locomotive repower p rojects must achieve at least a 15 percent NOx reduction beyond existing emissions lev els. Repower projects for 1973 and later year Class III locomotives must achieve a t least Tier 0-equivalent emission rates if a remanufacture kit certified by U.S. EPA to meet Tier 0 or lower emission levels

is available. Baseline emissions for locomotive re power projects reflect federal emission requirements for engine remanufacture (e.g . Tier 0 through Tier 2 emission rates for Class I locomotives, and uncontrolled emi ssions for pre-1973 locomotives and Class III locomotives). Baseline costs for repower projects reflect the cost to remanufacture the project engine or $50,000, whiche ver is greater. All locomotive repower projects must include installation of an au tomatic engine start-stop (AESS) idle reduction device if the project locomotive is not a lready equipped with such a device and installation is technically feasible.

B. Retrofits

Retrofits involve hardware modifications to the eng ine or exhaust system to reduce emissions. Potential retrofit projects involve the addition of an ARB-verified retrofit device, or installation of a U.S. EPA-certified rem anufacture emission kit. For most Carl Moyer Program categories, a retrofit device mu st be ARB-verified in order to be considered for funding. To date, however, very few retrofit technologies have been

verified to reduce emissions from a locomotive. Re trofit technologies generally develop first for on-road sources, and are later refined fo r use on off-road engines. Because of

the lack of retrofit devices verified for use on a locomotive engine, ARB will consider funding a locomotive after-treatment retrofit devic e which is not yet ARB-verified for useVIII-7 LOCOMOTIVES

on locomotives on a case-by-case basis. Applicants for funding on a case-by-case basis must meet the applicable project criteria ide ntified in Section V of this chapter.

In recent years, engine manufacturers have also dev eloped U.S. EPA-certified engine

remanufacture kits for use on locomotives. To be e ligible for Carl Moyer Program funding, remanufacture kits must be U.S. EPA certif ied to achieve at least Tier 0 locomotive emission standards on the project locomo tive engine. Remanufacture kit projects must also achieve at least 15 percent NOx reductions from the project locomotive if taking credit for NOx emission reduct ions. Kits which utilize fuel injection timing retard must be clearly demonstrated to not i ncrease in-use PM or hydrocarbon emissions to be eligible for funding. Individual e ngine parts or other locomotive components are not eligible for funding except as p art of a complete U.S. EPA-certified engine remanufacture kit.

C. Idle-Limiting Devices

Locomotive operators idle their engines to maintain battery charge, warmth of the engine coolant, fuel, oil, and water, and comfortab le temperatures inside the operator cabs. Locomotives also idle to ensure the engine i s readily available (avoiding unnecessary starting and shutting-down), and becaus e of habitual practice. Installation of an ILD can significantly reduce emissions from l ocomotives, which typically spend 40 to 60 percent of their operating time in the idl e duty cycle.

The ILD technologies on the market today vary in op erational requirements and predictability of idling reductions. The AESS prov ides an automatic, fully integrated mechanism to reduce idling and does not rely upon a locomotive operator or require additional engines or infrastructure. An AESS typi cally uses a central computer to monitor vital engine parameters, such as battery ch arge, water temperature, and brake pressure, and automatically shuts off the engine af ter a set time. This technology is generally applicable to more locomotive types and o perating conditions than other ILD

devices.

Other ILDs include diesel driven heating systems (D DHS), stationary power plug-in units, and locomotive auxiliary power units (APU). These ILD technologies can reduce locomotive idling time under certain conditions. F or example, a DDHS is particularly effective in colder climates, while a stationary po wer plug-in unit is feasible only for site specific locomotives where plug-in technology can be permanently located. Costs for these ILDs range from $4,000 to $12,000 for a s hore power plug-in unit, $8,000 to $15,000 for an AESS, and $25,000 to $35,000 for an DHSS or APU.

Because an AESS unit can provide significant and pr edictable air quality benefits at a relatively low cost, locomotive repower projects wi thout a functioning ILD must include installation of an AESS, if feasible, to receive pr ogram funding. The Carl Moyer Program shall pay actual equipment costs up to a maximum of $8,000 for

the AESS and actual installation costs of the AESS up to $3,400. The award cap reflects the fact that AESS installation significan tly reduces locomotive operating costsVIII-8 LOCOMOTIVES

and has a typical capital payback period of one to three years. Other ILD technologies may be considered for program funding on a case-by- case basis if an AESS device cannot be installed on the project locomotive.

D. Alternative Technology Switch Locomotives

In recent years, several diesel-electric hybrid swi tch locomotives have been funded through the Carl Moyer Program. Hybrid switch loco motives significantly reduce PM and NOx emissions, idling time, and fuel use compar ed to conventional switchers. These locomotives use the same basic concept as a g as-electric hybrid automobile -- a battery pack powers the locomotive, while a small d iesel engine runs as needed to keep the batteries charged. Hybrid locomotives typicall y utilize an aging locomotive frame and replace the existing large diesel engine, gener ator, and analog controls with a small diesel generator, battery pack, and computerized co ntrol module. The batteries can provide up to 90 percent of the locomotive horsepow er at full load, while the remaining power comes from a 300 to 800 horsepower diesel eng ine. In addition to driving the locomotive, the added weight of the battery pack pr ovides additional traction to propel

the locomotive.

Switch locomotive projects which involve replacing the main engine with multiple heavy-duty truck or off-road engines have also beco me more common. Multi-engine locomotive projects also typically involve signific antly refurbishing an existing locomotive frame with new batteries, electronics, and controls . The replacement engines typically have a much lower horsepower rating and lower emiss ions than the engine they replace. For the purposes of the Carl Moyer Progra m, hybrid and multiple engine switchers, as described above, are defined as alter native technology switchers.

Switch locomotive purchase practices are unique. F ew new locomotives are manufactured and purchased by the railroads for use in switcher service. Instead, as line-haul locomotives get older and less reliable, they are remanufactured for switching service and moved to a rail yard. In many cases, C lass III railroads will purchase older switchers when they are retired by Class I railroad s. Because railroads do not typically purchase newly manufactured switcher locomotives, a n alternative technology switcher is considered a new locomotive purchase for the pur pose of the Carl Moyer Program.

Baseline project emissions and costs for alternativ e technology switchers also reflect differing Class I and Class III regulatory requirem ents and purchase practices. Since Class I railroads are required to meet federal loco motive remanufacture emission standards for 1973 and newer locomotives, a new Cla ss I switcher would typically emit

at Tier 0 emission rates. Class III railroads -- w hich are not subject to federal requirements and typically purchase older, in-use l ocomotives -- typically remanufacture

to uncontrolled emission levels. Baseline emission s for hybrid and multiple engine switcher projects at Class I and Class III railroad s therefore reflect Tier 0 and uncontrolled emission rates, respectively.VIII-9 LOCOMOTIVES

The Carl Moyer Program may fund up to 60 percent an d 80 percent of the total cost of an alternative technology switcher for Class I and Class III railroads, respectively. Project funding caps reflect the differential cost of a typical switcher purchased by Class I and Class III railroads, as described above . Funding caps have also been set in recognition that an alternative technology switcher achieves significant fuel cost savings

over its lifetime relative to a traditional switch locomotive.

U.S. EPA requires new switchers with an aggregate e ngine power rating greater than or equal to 1,006 horsepower to be certified to meet f ederal locomotive emission standards. An alternative technology switcher with federal locomotive certification must be evaluated based upon its certified locomotive em ission rate. If federal locomotive certification is not required or not yet complete, the switcher may be evaluated and considered for Carl Moyer Program funding based upo n the project engine’s on- or off road engine certification. However, alternativ e technology switchers must meet all federal certification requirements before program f unding can be distributed to the project participant. Federal locomotive certificat ion must demonstrate the locomotive emits NOx at a rate at least 30 percent below the T ier 2 locomotive emission standard.

V. Project Criteria

These criteria provide the minimum requirements for all Carl Moyer Program locomotive projects. Participating districts retain the autho rity to impose additional requirements in

order to address local concerns.

A. General

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by or used to comply with any federal, sta te or local regulation, memorandum of agreement/understanding with a regula tory agency, settlement agreement, mitigation requirement, or other legally binding document. Inclusion in a rail yard or port emission reduction plan, lease ag reement, or other voluntarily adopted strategy does not exclude a locomotive proj ect from funding eligibility, if such a project is not otherwise required.

• No emission reductions generated by the Carl Moyer Program shall be used as marketable emission reduction credits, or to offset any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging banking and tra ding program.

• Locomotive operators utilizing an alternative emis sion control plan (AECP) to comply

with California’s locomotive low-sulfur diesel fuel requirements shall not be eligible for Carl Moyer Program funds.VIII-10 LOCOMOTIVES

• Beginning January 1, 2007, all diesel locomotive p rojects must use ARB low-sulfur

diesel fuel. Emission reductions and costs associa ted with use of ARB low-sulfur diesel shall not be included in project cost-effect iveness calculations.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ combustion PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in this chapter.

• Carl Moyer Program grants can be no greater than a project’s incremental cost. The incremental cost is the cost of the project minus t he baseline cost. The incremental cost shall be reduced by the value of any current f inancial incentive that reduces the project price, including tax credits or deductions, grants, or other public financial

assistance.

• The contract term for all locomotive projects must be equivalent to the project life. The project life is defined as the number of years used to evaluate project

cost-effectiveness.

• Class I freight locomotive projects in air distric ts other than the South Coast must have a minimum project life of ten years. All othe r locomotive projects have a minimum project life of three years. ARB may appro ve a shorter project life on a case-by-case basis. Projects with shorter lives ma y be subject to additional funding restrictions, such as a lower cost-effectiveness li mit or a project cost cap.

• The maximum project life for a locomotive project is 20 years.

• Because of uncertainty in locomotive load factors, locomotive project activity must be based upon fuel consumption.

• Seventy-five percent of estimated annual miles tra veled and annual fuel consumption must occur in California.

• The energy consumption rate for a locomotive engin e is 20.8 bhp-hr per gallon. The energy consumption factor for an on- or off-road en gine used in a locomotive application is 18.5 bhp-hr per gallon.

• Carl Moyer Program funds cannot be use to pay for labor or parts used during

routine maintenance.

• Class I locomotives subject to the South Coast MOU are eligible for Carl Moyer Program funding only if such locomotives are excluded from the fleet average emission rate calculations which demonstrat e compliance with the MOU provisions. The baseline emission rates used to de termine emission reductions and cost-effectiveness for these locomotive projects re flect the Tier 2 emission rates for

line-haul and switch locomotives identified in Tabl e B-16. Locomotives subject toVIII-11 LOCOMOTIVES

the South Coast MOU which receive Carl Moyer Progra m funding are ineligible to receive fleet average emission credits.

• Military and industrial locomotives and locomotive s owned or operated by Class II railroads use the same Carl Moyer Program criteria as Class III railroad locomotives.

• Locomotive engine emissions, if based on emission testing, must be determined following the most current and approved U.S. EPA em ission testing procedures for

locomotives.

• All locomotive new purchase or repower projects mu st include an electronic monitoring unit (EMU) to track activity and geograp hic location. Eligible EMUs include a geographic positioning system (GPS) unit, transponding device, automated vehicle locator (AVL), or other similar device. Th e EMU must be capable of providing complete digital information regarding to tal activity both within the air district and the State of California; this informat ion shall be reported to air districts annually for the project life. The full purchase, installation and data summarization

or transmittal costs associated with the EMU is eli gible for Carl Moyer Program funding, and may be included when calculating proje ct cost-effectiveness.

• For all liquefied natural gas-diesel or other dual fuel locomotive projects, an EMU must be used to electronically monitor activity and fuel consumption by fuel type.

• Potential projects which fall outside of these cri teria may be considered on a case-by-case basis if evidence provided by the air district suggests potential surplus, real, quantifiable, and enforceable emission reduct ion benefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All p rojects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

B. New Purchase

• Purchase of a new locomotive must achieve federal Tier 2 locomotive emission standards for PM and hydrocarbon emissions, and a N Ox emission rate at least 30 percent below Tier 2 locomotive emission standar ds.

• For the purposes of the Carl Moyer Program, an alt ernative technology switcher is defined as a hybrid (e.g., Green Goat) or multiple engine switcher in which an existing locomotive chassis is significantly refurb ished with a new engine, batteries, electronic controls, and/or other equipment. An al ternative technology switcher project is considered a new locomotive purchase and must meet all emission criteria for a new locomotive purchase. Other switch locomo tives may be considered for funding as an alternative technology switcher on a case-by-case basis.VIII-12 LOCOMOTIVES

• Baseline emissions for an alternative technology s witcher project reflect Tier 0

emission rates for Class I locomotives and uncontro lled emission rates for Class III locomotives. The cost of an alternative technology switcher eligible for Carl Moyer Program funding shall not exceed 60 perc ent of the total cost of the new switcher for Class I railroad switchers, and 80 per cent of the total cost of the new

switcher for Class III railroad switchers.

• Baseline emissions and costs for a new locomotive purchase project which is not an alternative technology switcher reflect Tier 2 emis sion rates and the cost of a new Tier 2 locomotive, respectively.

• An alternative technology switcher with federal lo comotive certification must be evaluated based upon its federally certified locomo tive emission rate; alternatively, if federal locomotive certification is not required or not yet complete, the project may be evaluated and considered for funding based upon its on- or off-road engine certification. If not federally certified, locomot ives may on a case-by-case basis

utilize NOx emission rates associated an ARB determ ination of an Ultra-Low

Emission Locomotive under the South Coast MOU. Loc omotives must meet all federal certification requirements before funding c an be distributed to the project participant.

C. Repower

• Locomotive repower projects must achieve at least a 15 percent NOx reduction beyond existing emission levels.

• Baseline emissions for a locomotive engine repower are based upon federal emission requirements for engine remanufacture (see Section III of this chapter) and the corresponding emission rates in Table B-16. Ba seline costs for a locomotive engine repower equal the actual remanufacture cost or $50,000, whichever is
greater.

• 1973 and later model year Class III locomotives mu st achieve at least Tier 0 emission levels, if Tier 0 remanufacture kits are a vailable.

• Alternative-fueled engines must be ARB- or U.S. EP A-certified to achieve a reduced emission level in a locomotive application. Altern ative-fueled engines not certified to achieve a reduced emission limit in a locomotive ap plication may be eligible for funding on a case-by-case basis.

D. Retrofit

• A retrofit device must be ARB-verified to reduce e missions from the project engine in order to be eligible for funding. Non-verified tec hnologies may be considered on a case by case basis if: 1) an application for verif ication of the retrofit or add-on equipment on the proposed engine category is pendin g, 2) the retrofit or add-onVIII-13 LOCOMOTIVES

equipment has been verified or certified by ARB or U.S. EPA for use on a similar engine category, or 3) project emission benefit, du rability, and applicability have been or shall be demonstrated through in-situ testi ng.

• Retrofits considered for funding on a case-by-case basis must be clearly demonstrated to achieve the expected emission reduc tions for the full project life, function properly under the project locomotive engi ne duty cycle, and to not harm the locomotive engine.

• Remanufacture emission kits must achieve at least a 15 percent NOx reduction and

be U.S. EPA certified to achieve at least Tier 0 lo comotive emission standards on the project locomotive engine. Emission kits must be demonstrated not to increase in-use emissions of NOx, ROG, or PM emissions. Ind ividual engine parts or other locomotive components are not eligible for funding except as part of a complete U.S. EPA certified engine retrofit kit.

E. Idle-Limiting Device

• All locomotive purchase and repower projects (exce pt alternative technology switchers) must include purchase and installation o f an AESS ILD to reduce unnecessary engine idling if the locomotive is not already equipped with such a device and AESS installation is technically feasibl e.

• If not already required by a rule, regulation, MOU , or other legal mandate, the purchase and installation cost of an AESS is eligib le for Carl Moyer Program funding, subject to the following limitations:

− The Carl Moyer Program may provide actual equipmen t costs up to a maximum of $8,000 for a locomotive-specific AESS.

− The Carl Moyer Program may provide the lower amoun t of actual installation costs of the AESS, up to a maximum of $3,400.

− AESS emission reductions are calculated by applyin g the ILD factors in Table B-17. Appendix D provides details regarding use of the ILD factors.

− All ILDs must comply with applicable durability an d warranty requirements.

F. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

VI. Cost-EffectivenessVIII-14 LOCOMOTIVES

To receive Carl Moyer Program funding, each project must meet the maximum cost-effective threshold of $14,300 per weighted to n of covered pollutants reduced. Only funds provided by the Carl Moyer Program and l ocal district matching funds are to be used in determining cost-effectiveness. Emissio n reduction benefits represent the difference in the emission levels of the existing b aseline technology relative to the newer, reduced-emission technology. Baseline and r educed engine emission factors are listed in Table B-16 in Appendix B. These fact ors represent U.S. EPA emission

factors from U.S. EPA Technical Highlights – Emission Factors fo r Locomotives [December 1997], with fuel correction factors appli ed.

As mentioned earlier, an AESS ILD is required for a ll locomotive repower or new purchase projects (other than alternative technolog y switchers) if feasible. An ILD Factor, identified in Table B-17, is used to accoun t for the air quality benefits of reduced idling.

A detailed description and examples of how to calcu late cost-effectiveness can be found in Appendix D. Locomotive emission reduction calcu lations will use the fuel- based formula as discussed in Appendix C.

VII. Minimum Project Application Requirements

The minimum application requirements for locomotive projects are described below. Air districts have full authority to require additional application, reporting, and monitoring requirements.

A. Application

Districts solicit bids for reduced-emission project s for locomotives. The applicant must provide the minimum information listed in Table 8-3 . A disclosure must also be included stating that the proposed project has not been fund ed and is not being considered for funding by another air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for t he same project may be banned from submitting future applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is eligible for funding if the project parameters a re coordinated amongst the participating districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a pr evious application has been rejected and is no longer being considered for funding.VIII-15 LOCOMOTIVES Table 8-3 Minimum Application Requirements for Locomotive Pro jects

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

Locomotive Information Railroad Class (Class 1 or Class 3) Locomotive Type (Line Haul, Traditional Switcher, Alt. Technology Switcher, Passenger)

Locomotive Make

Locomotive Model Locomotive Horsepower

Locomotive Serial Number Fuel Type Engine Make Engine Model Engine Year Engine Serial Number

Activity Information Does the project locomotive already have a functioning automatic engine start-stop (AESS) ILD installed? (yes/no) Annual Gallons Fuel Consumption Percent Operation in California Percent Operation in District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional)

ADDITIONAL INFORMATION –

NEW PURCHASE PROJECTS ONLY Projected Year of Purchase of New Locomotive

New Locomotive Cost Locomotive Vendor (optional) Alt. Technology Switcher New Purchase Information What type of engine(s) does the new switcher use? (on-road or off-road/stationary) Engine Make, Model, Year, Horsepower, and Serial Number (for each engine) ARB Certification Executive Order, if any (on-road engine(s) only) Engine Family and Tier (off-road/stationary engine(s) only) New Switcher Fuel Consumption (if different from baseline) Has this locomotive been certified by U.S. EPA? If yes:

U.S. EPA certified locomotive NOx emission rate (g/bhp-hr)

U.S. EPA certified locomotive HC emission rate (g/bhp-hr)

U.S. EPA certified locomotive PM emission rate (g/bhp-hr)

ADDITIONAL INFORMATION –

REPOWER PROJECTS ONLY Reduced Emission Engine Make Reduced Emission Engine Model Reduced Emission Engine Serial Number Reduced Emission Engine Horsepower Engine Rebuild Cost New Lower Emission Engine Cost New Lower Emission Engine Installation Cost New Engine Vendor (optional) New Engine Installer (optional)

ADDITIONAL INFORMATION –

LOCOMOTIVE IDLING LIMITING DEVICE OR

ENGINE REMANUFACTURE KIT ONLY For AESS ILD Projects

AESS Make

AESS Model

AESS Year

AESS ID Number AESS Capital Cost

AESS Installation Cost For Engine Remanufacture Kits

Remanufacture Kit Make

Remanufacture Kit Model

U.S. EPA Certified Locomotive Emission Level (Tier 0, Tier 1, or Tier 2)

Remanufacture Kit CostVIII-16 LOCOMOTIVES

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.

B. Reporting and Monitoring

Air districts must abide by all reporting and monit oring requirements described in Chapter 1 – Program Administration. Monitoring of project progress ensures that the vehicle or engine is operated as stated in the prog ram application. Records must be retained and updated for the duration of the projec t life and made available at the request of the air district or ARB.

VIII. References

Association of American Railroads, 2004. Associati on of American Railroads, 2004, Overview of U.S. Freight Railroads.

Federal Register, April 16, 1998. Federal Register , Part II - Environmental Protection Agency, Emission Standards for Locomotives and Loco motive Engines Final Rule; 40 CFR Parts 85, 89 and 92; April 16, 1998.

U.S. EPA, 2004. U.S. EPA Advanced Notice of Propos ed Rulemaking on the Control of Emissions of Air Pollution from New Locomotive Engi nes and New Marine Compression-Ignition Engines Less Than 30 Liters Pe r Cylinder;

Docket OAR-2003-0190.IX-1 MARINE VESSELS Chapter Nine

MARINE VESSELS

This chapter presents program criteria for marine v essel projects, and provides an overview of types of marine vessels, current emissi on control requirements, and available emission reduction technologies. The ch apter also expands eligibility for Carl Moyer Program marine vessel projects to marine vessels with wet exhaust systems, and utilizes a single set of emission fact ors for propulsion and auxiliary engines, consistent with federal emission standards

.

I. Introduction

Marine vessels eligible for Carl Moyer Program fund ing include harbor craft and oceangoing ships, but exclude recreational vessels such as personal watercraft. Historically, harbor craft have received the vast m ajority of Carl Moyer Program funding for marine vessels. However, oceangoing vessels re main eligible for funding if they operate in California Coastal Waters enough to gene rate cost-effective emission reductions and the proposed project meets all appli cable Carl Moyer Program criteria. A map of California Coastal Waters can be found in Figure 9-1.

A. Harbor Craft

Harbor craft include tugboats, fishing vessels, wor k boats, crew boats, ferries, Coast Guard vessels, and some military vessels. Th ese vessels generally stay within

California Coastal Waters and often leave and retur n to the same port. Tugboats generally have the most powerful engines, averaging about 1,300 horsepower. Commercial fishing and work boats, at the other end of the spectrum, average a little over 200 horsepower [ARB, 2003]. Beginning on Janu ary 1, 2007, all fuel sold to harbor craft statewide will be required to meet Air Resources Board (ARB or “Board”) low-sulfur diesel fuel standards. This ARB require ment goes into effect on January 1, 2006 in the South Coast Air Basin.

B. Oceangoing Ships

Oceangoing ships usually travel internationally and include container ships, bulk carriers, general cargo ships, tankers, military sh ips, auto carriers, cruise ships and ocean-going tugboats. Oceangoing ships generally ru n on one or more 750 or greater horsepower engines. Most oceangoing ships run thei r main propulsion engines on a mixture of residual and distillate fuel (heavy fuel oil). Diesel gas turbine propulsion engines and auxiliary engines on ocean-going ships often run on cleaner marine gas oil (MGO).IX-2 MARINE VESSELS

C. Propulsion Engines

Both propulsion and auxiliary marine vessel engines are eligible for Carl Moyer Program funding. For the purpose of the Carl Moyer Program , a propulsion engine is defined as an engine that powers the vessel through the water or directs the movement of the

vessel. About two-thirds of harbor craft in Califo rnia have one propulsion engine, while the remaining vessels have two or more engines [ARB , 2003]. Unlike most recreational vessel engines, harbor craft engines typically push the vessel through the water rather than hydroplaning, endure heavy use, and operate up to 6,000 hours a year. Harbor craft propulsion engines are therefore designed for prolonged operation at high loads.

Ocean-going vessels may be propelled by diesel pist on engines, steam turbines, or diesel-fueled gas turbines. In addition, diesel pi ston or turbine engines on oceangoing vessels may be used to drive generators to create e lectric power for propulsion.

D. Auxiliary Engines

Auxiliary engines are used to power on-board equipm ent such as electrical lights, refrigeration units, and radios. For the purposes of the Carl Moyer Program, an auxiliary engine is defined as a marine vessel engi ne that is not the propulsion engine whose fuel, cooling, or exhaust systems are an inte gral part of the vessel or require special mounting hardware. All other engines are c onsidered portable and may be eligible for funding under the Off-Road Compression Ignition project criteria (See Chapter 5).

About 40 percent of harbor craft in California have auxiliary engines; almost half of these vessels are equipped with more than one engin e [ARB, 2003]. Harbor craft auxiliary engines range from 4 to 400 horsepower, w ith ferries, tug boats, and commercial work boats having the highest horsepower auxiliary engines.

II. Emissions

Marine vessels are a significant source of airborne particulate matter (PM) and oxides of nitrogen (NOx), particularly at and around the Stat e’s major maritime ports. The Ports of Los Angeles and Long Beach are among the busiest in the world, and emissions from marine vessels serving the ports impact air quality in surrounding communities and the South Coast Air Basin. At the Port of Los Angeles, for example, marine vessels are responsible for about two-thirds of port-related NO x emissions and over 80 percent of port-related PM emissions -- locomotives, heavy-dut y trucks, and cargo-handling equipment contribute the bulk of remaining emission s [Port of Los Angeles Air Quality Task Force, 2005]. As trade with the Pacific Rim c ountries continues to grow, marine vessel emissions are projected to increase signific antly.

As shown in Table 9-1, emissions from ocean-going s hips are far greater than emissions from harbor craft. The majority of Calif ornia’s commercial marine vessel NOx and PM emissions (excluding emissions in the outer continental shelf) occur in theIX-3 MARINE VESSELS

South Coast Air Basin. The San Francisco Bay Area, home to the Port of Oakland, is responsible for another 20 percent of the State’s t otal marine vessel emissions.

Table 9-1

Marine Vessel Emissions (Statewide, Annual Average, tpd)

Pollutant by Vessel Type 2005 2010 2015 2020

NOx

Harbor Craft 24 25 25 25 Ocean-going Ships 119 132 156 181

Total 143 157 181 206

PM

Harbor Craft 1.3 1.3 1.3 1.4 Ocean-going Ships 10.3 11.3 13.0 14.9

Total 11.6 12.6 14.4 16.2

ROG

Harbor Craft 3 3 3 3 Ocean-going Ships 6 7 8 10

Total 9 10 11 13

Based on the 2005 ARB Emission Inventory Almanac. N umbers may not total due to rounding.

PM tends to be a localized pollutant, having the gr eatest impact in proximity to where it is emitted. PM emissions from vessels which spend much of their time further off-shore, such as fishing vessels, may therefore have less of a human health impact than emissions from vessels which operate closer to shor e. At this time, however, PM emission standards for marine vessel engines are no t differentiated by vessel type based upon the potential for human exposure. ARB s taff will evaluate whether PM

emissions from certain vessels should be discounted based on exposure potential in future Carl Moyer Program Guideline revisions.IX-4 MARINE VESSELS Figure 9-1

California Coastal Water Boundaries

III. Regulatory Requirements

Most marine vessels in operation today have uncontr olled engines, since marine vessel emission standards have only recently begun being p hased-in. Harbor craft began being subject to U.S. Environmental Protection Agen cy (U.S. EPA) emission standards beginning in 2004, while new oceangoing vessels hav e recently become subject to

federal and international emission standards.

A. Harbor Craft Emission Standards

Unlike other Carl Moyer Program categories, marine vessel propulsion and auxiliary engine emission standards are based upon cylinder d isplacement rather than horsepower. Basing standards on displacement rathe r than horsepower is intended to help ensure that each engine is not subject to mult iple standards, since marine engines can be tuned for different power output.

U.S. EPA harbor craft emission standards, adopted i n 1999, apply to new diesel-powered engines with a displacement of up to 30 liters per cylinder. The standards apply to both propulsion and auxiliary en gines and take effect between 2004 and 2007, depending upon the engine size [Federal R egister, 1999]. Table 9-2 provides more information regarding federal harbor craft engine standards.IX-5 MARINE VESSELS Table 9-2 U.S. EPA Marine Propulsion and Auxiliary Engine Emission Standards

(g/kW-hr)*

Displacement (liter/cyl) Starting

Date NOx+THC** PM

D < 0.9 2005 7.5 0.40

0.9 < D < 1.2 2004 7.2 0.30

1.2 < D < 2.5 2004 7.2 0.20

2.5 < D < 5.0 2007 7.2 0.20

5 < D < 15 2007 5.8 0.20

15 < D < 20 (P < 3300 kW) 2007 7.8 0.27

15 < D < 20 (P > 3300 kW) 2007 8.7 0.50

20 < D < 25 2007 9.8 0.50

25 < D < 30 2007 11.0 0.50

* grams per kilowatt-hour. ** NOx plus total hydrocarbon emissions.

In May 2004, U.S. EPA issued an Advanced Notice of Proposed Rulemaking, signaling its intent to pursue more stringent standards for n ew and existing harbor craft engines [U.S. EPA, 2004]. The standards are likely to be m odeled after 2007 diesel off-road and 2010 heavy-duty diesel on-road engine standards, an d be based on the application of catalytic after-treatment technology. The new stan dards could be phased in as early as 2011 and require a 90 percent reduction from previo us limits.

ARB staff is also developing a rule that may requir e the Best Available Control Technology (BACT), such as after-treatment devices or accelerated turnover, to reduce emissions from existing harbor craft fleets. The r ule is scheduled to be considered for adoption by the Board in mid- to late-2006. If the rule is adopted, ARB shall publish an advisory describing how the rule impacts Carl Moyer Program funding eligibility.

B. Oceangoing Vessel Emission Standards

International oceangoing vessels fall under the reg ulatory jurisdiction of the International Maritime Organization (IMO). In 1997, the IMO esta blished NOx emission standards for diesel-powered propulsion and auxiliary engines ove r 130 kW (174 hp) on new ocean-going ships. The IMO standards have been rat ified by the requisite number of nations and became enforceable in May 2004. Engine manufacturers have generally produced IMO-compliant engines since January 1, 200 1, however, since the standards were retroactive to that date upon ratification.IX-6 MARINE VESSELS Table 9-3 International Maritime Organization NOx Emission St andards

Engine Speed (rpm) NOx (g/kW-hr) NOx (g/bhr-hr)

n < 130 17.0 12.7

130 < n < 2000 45n (-0.2) (convert from g/kW-hr)

n > 2000 9.8 7.3

n = IMO rated engine speed (crankshaft revolutions per minute).

U.S. EPA also adopted NOx emission standards for ne w oceangoing vessel engines in 2003 [U.S. EPA, 2003]. The federal standards are v irtually equivalent to the IMO standards but apply only to vessels flagged or regi stered in the United States beginning in 2004. U.S. EPA has also committed to adopt more stringent standards for oceangoing vessel engines by April 2007. The IMO a nd U.S. EPA standards do not include PM or reactive organic gas (ROG) emission l imits, leaving marine vessels largely unregulated for these pollutants.

An ARB rule requiring oceangoing vessel auxiliary e ngines run on MGO or marine diesel oil (MDO) while at dock or in California Coa stal Waters is also under development. Use of MGO or MDO in place of dirtier heavy fuel oil can achieve up to 80 percent emission reductions from oceangoing vess el auxiliary engines. The draft rule is scheduled to be considered by the Board in December 2005 and could require implementation beginning in mid-2006.

Finally, ARB staff is developing a rule to require ships that visit California frequently to implement emission reduction strategies. The rule will be considered for adoption by the Board sometime in 2006. ARB will publish an ad visory once these rules are adopted describing how each rule impacts Carl Moyer Program funding eligibility.

C. Voluntary Emission Standards—The Blue Sky Serie s Program

In order to provide engine manufacturers with an in centive to produce engines that are cleaner than those required by regulations, the fed eral government developed the Blue Sky Series Program. U.S. EPA’s voluntary Blue Sky Series Program permits manufacturers to certify their engines to more stri ngent emission standards than required. New marine vessel purchase projects must meet the federal Blue Sky Standards to qualify for Carl Moyer Program funding . To date, no marine vessel propulsion engines have been certified to meet the Blue Sky standards, and no marine vessel new purchase projects have been funded throu gh the Carl Moyer Program.IX-7 MARINE VESSELS Table 9-4 “Blue Sky Series” Voluntary Emission Standards

(g/kW-hr)

Cylinder Displacement (D, dm 3 ) NOx+THC PM

Power ≥ 37 kW & D < 0.9 4.0 0.24

0.9 < D < 1.2 4.0 0.18

1.2 < D < 2.5 4.0 0.12

2.5 < D < 5.0 5.0 0.12

5.0 < D <15 5.0 0.16

15 < D < 20 & Power < 3300 kW 5.2 0.30

15 < D < 20 & Power < 3300 kW 5.9 0.30

20 < D < 25 5.9 0.30

25 < D < 30 6.6 0.30

IV. Potential Projects

The vast majority of Carl Moyer Program marine vess el projects thus far involve harbor craft, rather than oceangoing vessels. Harbor craf t projects have been more common

due to several factors – their emissions tend to oc cur solely within California Coastal Waters, vessel activity is more predictable, and en gine replacement is extremely

cost-effective.

Marine vessel projects that could potentially quali fy for incentive funding under the Carl Moyer Program include the purchase of a new re duced emission marine vessel, a marine vessel repower, or a marine vessel retrofit. Shore power projects to reduce marine vessel auxiliary engine emissions may also b e eligible for Carl Moyer Program funding and are discussed in Chapter 12. Projects to replace gasoline-fueled engines with diesel engines are not eligible for funding.

A. New Purchase

New marine vessels with propulsion engines certifie d to U.S. EPA’s Blue Sky Series emission limits are eligible for Carl Moyer Program funding. While no marine vessel propulsion engines currently meet the Blue Sky Stan dards, engines meeting certification emission limits may become commercially available a s engine technologies continue to

advance.

B. Repower

To date, most Carl Moyer Program marine vessel proj ects have involved replacing or “repowering” an old harbor craft engine with a newe r, cleaner engine. Most of these projects have involved replacing an older mechanica l engine with a newer electronically controlled engine. For all Carl Moyer Program engi ne repowers, the replacement engine certified emission rate must provide at leas t a 15 percent NOx reduction relative to the baseline engine. If the replacement engine is significantly modified orIX-8 MARINE VESSELS

re-configured in any way during the project life, e missions testing must be conducted to

determine its new emission rates.

Engine repowers for marine vessels equipped with a wet exhaust system are eligible for Carl Moyer Program funding. Since a wet exhaust sy stem reduces air emissions from both the baseline and the newer, cleaner engine, re power projects on marine vessels with these systems may result in slightly fewer emi ssion reductions compared to repowers of vessels with dry exhaust. An analysis of emissions data from California harbor craft indicates wet exhaust systems reduce P M and NOx emissions from propulsion and auxiliary engines by 1 to 19 percent . In order to ensure emission reductions projects on vessels with wet exhaust sys tems are not overstated, a conservative 20 percent NOx and PM emission reducti on factor must be applied to both the baseline and reduced emission engine (See marin e vessel Example Calculation 3 in Appendix D for more information). The Carl Moyer P rogram does not provide funding to repair or replace any component of the wet exhaust system itself.

C. Retrofits

Potential marine vessel retrofit projects involve t he addition of an ARB-verified diesel particulate filter, diesel oxidation catalyst, or s elective catalytic reduction technology. A retrofit device must typically be verified by ARB i n order to be considered for funding. To date, however, very few retrofit technologies ha ve been verified to reduce emissions from marine vessels. Retrofit technologies general ly develop first for on-road sources, and are refined for use on off-road engines. Becau se of the lack of retrofit devices verified for use on a marine vessel engine, a marin e vessel retrofit device which is not yet verified may be considered for funding on a cas e-by-case basis. Applicants for funding on a case-by-case basis must meet the appli cable project criteria described in Section V of this chapter.

In recent years, engine manufacturers have also dev eloped engine remanufacture retrofit kits certified by the IMO to meet IMO NOx emission standards. To be eligible for Carl Moyer Program funding, a remanufacture retrofi t kit must be certified by the ARB, U.S. EPA, or the IMO to reduce emissions from the p roject vessel engine. NOx emissions must be reduced by at least 15 percent to take credit for NOx emission reductions. Remanufacture kits which employ fuel i njection timing retard are only eligible for funding if it is demonstrated that PM emissions from the project vessel shall

not increase. If the retrofit kit certification do es not specify a specific percent reduction or emission rate for NOx, PM, or ROG, emissions tes ting must be conducted annually for the life of the project to ensure the retrofit does not increase emissions of these individual pollutants. Individual engine parts or other vessel components are not eligible for funding unless as part of a complete certified engine remanufacture kit.

D. On-Board Testing

Because of the high variability in marine engine em ission rates, districts may utilize on-board testing to determine baseline marine vesse l emission rates for the purposes ofIX-9 MARINE VESSELS

Carl Moyer Program cost-effectiveness calculations, if testing follows approved test procedures. Constant speed propulsion engines shoul d be tested on the International Organization for Standardization’s (ISO) 8178- E2 t est cycle and constant speed auxiliary engines on the ISO 8178-D2 test cycle. V ariable speed auxiliary engines and variable speed propulsion engines used with variabl e-pitch propellers (or electrically coupled propellers) should be tested on the ISO 817 8-C1 duty cycle. All other engines, including those used with fixed-pitch propellers, s hould be tested on the ISO 8178-E3 Marine Propeller Law Heavy Duty operating cycle. W hen on-board testing is conducted in accordance with approved procedures, these resul ts must be used when calculating emission reductions. The maximum acceptable values of baseline NOx, ROG, and PM

emission factors derived from in-situ source testin g are 20 g/bhp-hr, 2.0 g/bhp-hr, and 1.0 g/bhp-hr, respectively. If emission testing is not feasible, the applicant can use the default baseline emission factors presented in Appe ndix B.

V. Project Criteria

These criteria provide the minimum requirements for all Carl Moyer Program marine vessel projects. Participating districts retain th e authority to impose additional requirements in order to address local concerns.

A. General

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum of agreement/understanding with air quality regulators , settlement agreement, mitigation requirement, or other legal mandate. In clusion in a port emission reduction plan, lease agreement, or other voluntari ly adopted strategy does not exclude a marine vessel project from Carl Moyer Pro gram funding eligibility, if such project is not otherwise required.

• No emission reductions generated by the Carl Moyer Program shall be used as marketable emission reduction credits, or to offset any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging banking and tra ding program.

• Marine vessels and engines utilizing an alternativ e compliance plan to comply with a rule, requirement, or other mandate shall not be el igible for Carl Moyer Program

funds.

• A marine vessel engine receiving any type of emiss ion reduction credit or offset is ineligible for Carl Moyer Program funding.

• Beginning January 1, 2007, all harbor craft with d iesel engines must use ARB low-sulfur diesel fuel to be eligible for Carl Moye r Program funding. EmissionIX-10 MARINE VESSELS

reductions and costs associated with use of ARB die sel shall not be included in project cost-effectiveness calculations.

• Only marine vessel engines with a United States Co ast Guard Documentation Number or IMO/Lloyd’s Number are eligible for Carl Moyer Program funding. This information must be included in the project applica tion.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ combustion PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in this chapter.

• Carl Moyer Program grants can be no greater than a project’s incremental cost. The incremental cost is the cost of the project minus t he baseline cost. The incremental cost shall be reduced by the value of any current f inancial incentive that reduces the project price, including tax credits or deductions, grants, or other public financial

assistance.

• The contract term for all marine vessel projects m ust be equivalent to the project life. The project life is defined as the number of years used to evaluate project

cost-effectiveness.

• Projects must have a minimum project life of three years. ARB may approve shorter project life on a case-by-case basis. Projects wit h shorter lives may be subject to additional funding restrictions, such as a lower co st-effectiveness limit or a project
cost cap.

• The maximum project life for marine vessel project s (equivalent to the average engine life reported by U.S. EPA) is as follows:

Maximum Project Life Engine displacement < 5.0 liter/cyl. 16 years Engine displacement >5.0 liter/cyl. 23 years Auxiliary engines 17 years

• Only marine vessel activity in California waters m ay be used to determine project emission reductions. For the purposes of the Carl Moyer Program, California water boundaries are based upon each air districts' emiss ion inventory boundary. If a local district has not established an emission inventory boundary, the ARB and district staff will determine an appropriate boundary for us e in project evaluation.

• Non-captive California fleets and vessels may be c onsidered for funding on case-by-case basis if their operation in California coastal waters can be properly

documented.IX-11 MARINE VESSELS

• Marine vessels which are not self-propelled (e.g. barges) are not eligible for Carl Moyer Program funding.

• Project marine vessels must be equipped with a fun ctioning tamper proof electronic monitoring unit (EMU) to track activity and geograp hic location. The EMU must be turned on and functional when the project engine is running to record all vessel trips and activity. If the EMU is battery powered, the b attery life must be long enough to ensure the EMU is charged and functional each time the project vessel is operated. Electronic information from the EMU regarding total and percent of activity (fuel use or hours of operation) within the air district coas tal boundary and California Coastal Waters must be reported to air district annually. The cost of a new unit, as well as

installation and data summarization and transmittal costs, may be included in the Carl Moyer Program grant and in the project cost-ef fectiveness calculations if not required by any rule, statute, MOU, or other mandat e.

• Carl Moyer Program funds cannot be expended on cos ts for labor or parts used during routine maintenance.

• Funding is not available for projects where spark- ignition engines (i.e. natural gas or gasoline, etc.) are replaced with diesel engines.

• Engines on marine vessels with wet exhaust systems are eligible for Carl Moyer Program funding if the project vessel me ets all other applicable program requirements. The wet exhaust systems themselves a re not eligible for Carl Moyer Program funding. A wet exhaust factor o f 0.80 must be applied to the baseline and reduced emission propulsion and auxili ary engine emission calculations for all projects on vessels with wet e xhaust systems.

• Potential projects which fall outside of these cri teria may be considered on a case by-case basis if evidence provided by the air district suggests potential surplus, real, quantifiable, and enforceable emission reduct ion benefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on a case-by-case basis. Al l projects considered for funding on a case-by-case basis must receive ARB approval p rior to receiving program funding.

B. New Purchase

• A new marine vessel must meet the U.S. EPA Blue Sk y Series Standards identified in Table 9-4 to be eligible for funding. All prop ulsion and auxiliary engines on new marine vessel purchase projects must also achieve a t least a 30 percent NOx

emission reduction from baseline levels.IX-12 MARINE VESSELS

C. Repower

• A replacement engine or retrofit must provide a 15 percent minimum NOx emission reduction relative to the baseline engine.

D. Retrofit

• A retrofit device must be ARB-verified to reduce e missions from the project engine in order to be eligible for funding. Non-verified tec hnologies may be considered on a case by case basis if: 1) an application for verif ication of the retrofit or add-on equipment on the proposed engine category is pendin g, 2) the retrofit or add-on equipment has been verified or certified by ARB for use on a similar engine category, or 3) project emission benefit, durabilit y, and applicability have been or shall be demonstrated through in-situ testing.

• Retrofits considered for funding on a case-by-case basis must be clearly demonstrated to achieve the expected emission reduc tions for the full project life, to function properly under the project vessel engine d uty cycle, and to not harm the vessel engine.

• To be eligible for Carl Moyer Program funding, an engine remanufacture retrofit kit must be certified by the ARB, U.S. EPA, or the IMO to reduce emissions from the project vessel engine. NOx emissions must be reduc ed by at least 15 percent to take credit for NOx emission reductions. Engine re manufacture kits must also not increase NOx, PM, or ROG emissions from the project vessel. If the engine certification does not specify a specific percent r eduction or emission rate for NOx, PM, or ROG, emissions testing must be conducted ann ually for the life of the project

to ensure the retrofit does not increase emissions from these individual pollutants. Individual engine parts or other vessel components are not eligible for funding unless as part of a complete certified engine reman ufacture kit.

E. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

VI Cost-Effectiveness Calculations

To receive Carl Moyer Program funding, each project must meet the maximum cost-effective threshold of $14,300 per weighted to n of covered pollutants reduced. Only funds provided by the Carl Moyer Program and l ocal district matching funds are to be used in determining cost-effectiveness. Emissio n reduction benefits represent the difference in the emission levels of the existing b aseline technology relative to the newer, reduced-emission technology. Baseline and r educed engine emission factors are listed in Table B-18 in Appendix B. Harbor cra ft emission factors represent off-roadIX-13 MARINE VESSELS

engine emission factors for uncontrolled engines, a nd harbor craft emission standards for controlled engines. Fuel correction factors ha ve been applied to all emission factors.

A detailed description of how to calculate cost-eff ectiveness can be found in Appendix C. Marine vessel emission reduction calcu lations will use either the fuel- or hour-based formula as discussed in Appendix C. Exa mples of cost-effectiveness calculations can also be found in Appendix D.

VII. Minimum Project Application Requirements

These are minimum project application requirements. Air districts have full authority to require additional application, reporting, and moni toring requirements.

A. Application

Districts solicit bids for reduced-emission project s for marine vessels. The applicant must provide the minimum information illustrated in Table 9-5.

A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.IX-14 MARINE VESSELS Table 9-5 Minimum Application Requirements for Marine Vessel Projects

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

MARINE VESSEL REPOWER Equipment Type (Commercial Fishing, Charter Fishing, Crew and Supply, Ferry Excursion, Pilot, Tow, Tug, Work, or Other) Number of Propulsion Engines to be Repowered Number of Auxiliary Engines to be Repowered

Vessel Name

Vessel Make

Vessel Model

Vessel Year
U.S. Coast Guard Documentation Number (IMO/Lloyd's Number if oceangoing vessel) Does the project vessel utilize a wet exhaust system? (yes/no)

Engine Information – Needed for Each Project Engine (Propulsion and/or Auxiliary) Baseline Engine Make Baseline Engine Model Baseline Engine Year Baseline Engine Serial Number Baseline Engine Horsepower Baseline Engine Displacement (ltr/cyl) Baseline Engine Fuel Will the vessel engine have a functioning hour meter for the full project life? (yes/no) Engine Annual Hours of Operation or Gallons Fuel Consumption Newer Engine Make Newer Engine Model Newer Engine Year Newer Engine Serial Number (if available) Newer Engine Horsepower Newer Engine Displacement (ltr/cyl) Activity Information Vessel Berthing Location (if any) Percent Operation in California Waters Percent Operation in District Waters Vessel Annual Hours of Operation or Gallons Fuel Consumption Does Vessel Remain in Port Only? (yes, no) Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional)

Cost Information– Needed for Each Project Engine (Propulsion and/or Auxiliary) Cost to Rebuild Existing Engine New Engine Purchase Price New Engine Installation Cost New Engine Vendor (optional) New Engine Installer (optional)

B. Reporting and Monitoring

Air districts must abide by all reporting and monit oring requirements described in Chapter 1 – Program Administration. Monitoring of project progress ensures that the vessel or engine is operated as stated in the progr am application. Records must beIX-15 MARINE VESSELS

retained and updated for the duration of the projec t life and made available at the request of the air district or ARB.

VIII. References

ARB, 2003. California Air Resources Board 2003 Har bor Craft Survey.

Federal Register, 1999. Federal Register - Environmental Protection Agency, Control of Emissions of Air Pollution From New Marine Compress ion-Ignition Engines at or Above

37 kW , December 29, 1999 (Volume 64, Number 249).

Port of Los Angeles Air Quality Task Force, 2005. Port of Los Angeles Air Quality Task Force, Port of Los Angeles No Net Increase in Air Emission s Final Report , June 24,

2005.

U.S. EPA, 2003. U.S. EPA, Control of Emissions From New Marine CompressionIgnition Engines at or Above 30 Liters Per Cylinder , Federal Register 9745-9789, 28

Feb 2003.

U.S. EPA, 2004. United States Environmental Protect ion Agency, U.S. EPA Advanced Notice of Proposed Rulemaking on the Control of Emi ssions of Air Pollution from New Locomotive Engines and New Marine Compression-Ignit ion Engines Less Than 30 Liters Per Cylinder

(Docket OAR-2003-0190).AGRICULTURAL SOURCES X-1 Chapter Ten

AGRICULTURAL SOURCES

This chapter presents the project criteria under th e Carl Moyer Program for stationary and portable agricultural engines and for non-engin e agricultural projects (e.g. dairies). Previous versions of the Carl Moyer Program Guideli nes only allowed funding for stationary agricultural irrigation pump engines; el igible projects now include other non-mobile agricultural engines and non-engine sour ces. Information about mobile agricultural use equipment (e.g. tractors) can be f ound in Chapter 5: Compression Ignition Off-Road Equipment. This chapter also con tains an overview of agricultural sources of air pollution, current regulations, pote ntial project types, and application requirements. For information about electric-power ed agricultural equipment, please consult Chapter 12: Zero-Emission Technologies.

I. Introduction

The agricultural industry contributes greatly to th e economy and identity of California. Approximately 78,500 farming operations within Cali fornia produce 13 percent of the nation's gross farming receipts, while representing only 4 percent of the total farms in the nation. Agricultural marketings from Californi a's farmers and ranchers reached $27.8 billion in 2003 [CASS, 2003].

Until the enactment of Senate Bill 700 (SB 700, Flo rez) in 2003, the agricultural industry in California was largely exempt from air pollution regulations. Local air districts are currently adopting regulations to reduce air pollut ion from agricultural engines as well as other agricultural sources.

Since 1998, the Carl Moyer Program has provided sig nificant funding for repowers or retrofits of internal combustion engines powering i rrigation pumps, and for engine replacement of self-propelled farm equipment. Rece nt legislative changes extended the Carl Moyer Program to additional agricultural sourc es of air pollution.

II. Emissions

Emissions attributed to agricultural use of off-roa d vehicles are included in the emissions estimates found in the Chapter 5: Compre ssion Ignition Off-Road Equipment. Currently available estimates for other agricultural sources are discussed

below.

As part of the airborne toxic control measure (ATCM ) for stationary diesel engines, ARB staff worked with the local districts and the agric ultural community to create an estimate of emissions from stationary diesel-fueled engines used in agricultural operations [ARB, 2003]. ARB staff was unable to project the emissio ns for future years with any degreeAGRICULTURAL SOURCES X-2 of certainty because of the limited data available. The emissions estimates for stationary agricultural use of diesel engines are s hown in Table 10-1.

Table 10-1 Statewide Emissions from Agricultural Use of Statio nary Diesel Engines for 2001 (prime engines, tons per day)

Population NOx ROG PM10

5,338 21.1 4.3 1.5

No emissions estimates for stationary spark-ignited (SI) agricultural use engines are available because the population of stationary SI e ngines in agricultural operations is

not known.

Emission estimates for livestock operations were de veloped for the recent regulatory process for creating a definition for large confine d animal facility (CAF) [ARB, 2005b]. The emission estimates (found in Table 10-2) are ba sed on current best available data

as of March 2005. The emission factors used to dev elop livestock emission estimates

will be refined as additional research studies are completed.

Table 10-2

Statewide ROG and PM10 Emissions from Livestock for 2004 (tons per day)

ROG PM10

Dairies 35.7 8.3

Other livestock 10.1 11

III. Statutory and Regulatory Requirements

A. SB 700

In 2003, SB 700 amended and added air pollution con trol requirements in the California Health and Safety Code (sections 39011.5, 39023.3, 40724, 40724.5, 40724.6, 40724.7, 40731, 42301.16, 42301.17, 42301.18, 42310 , and 44559.9) to include requirements for agricultural sources of air pollut ion. Some of the key requirements of this legislation are listed below:

• The legislation defined “agricultural source of ai r pollution” as a source or group of sources used in the production of crops or raising of fowl or animals located on contiguous property and under common ownership or c ontrol. Four categories of emission sources are identified as part of this def inition:

− Large CAFs.

− Internal combustion engines, including portable an d off-road engines, unless used to propel instruments of husbandry.AGRICULTURAL SOURCES X-3 − Sources subject to requirements of Title V, the fe deral operating permitting program for major stationary sources.

− Sources of emissions otherwise subject to district regulation.

• The legislation removed language exempting agricul tural sources from air quality permits in the Health and Safety Code in its entire ty. As a result, agricultural operations may be required to obtain air permits fr om local districts.

• The legislation established specific agricultural source permitting and exemption requirements for local districts.

• The legislation required certain districts to adop t by regulation a set of measures to reduce emissions from agricultural sources in feder al particulate matter

non-attainment areas.

• The legislation required the ARB to establish a de finition for a “large” CAF, and required certain districts to adopt rules requiring large CAFs to obtain permits and implement emission mitigation measures.

B. Stationary Diesel Engines ATCM

In February 2004, the Board adopted an ATCM for sta tionary compression ignition (CI) engines greater than 50 horsepower [ARB, 2003]. Th e Board amended the ATCM in May 2005 [ARB, 2005a]. The control measure require s new CI engines for agricultural operations, including those used to repower agricul tural equipment, to meet ARB and federal new off-road engine PM certification standa rds for engines of the same horsepower and model year. The only exception to t his requirement is for the installation of Tier 2 engines through January 1, 2 008, purchased with Carl Moyer Program funds.

ARB staff is currently working on the development o f in-use stationary diesel agricultural engine requirements to be considered by the Board i n 2006.

C. Portable Diesel Engine ATCM

An ATCM for portable diesel engines was adopted by the Board in February 2004 [ARB, 2004]. The control measure requires all diesel-fue led portable engines 50 horsepower and greater to be certified to Tier 1, 2, or 3 fede ral and state off-road engine emission standards by 2010. The ATCM also requires fleets o f portable engines 50 horsepower and greater to meet weighted particulate matter emi ssion standards that become more stringent in 2013, 2017, and 2020.

D. Large Confined Animal Facility Definition

In response to the requirements of SB 700, the Boar d approved a definition for large CAF on June 23, 2005 [ARB, 2005b]. The definition (shown in Table 10-3) is based onAGRICULTURAL SOURCES X-4 headcount of livestock categories and takes into co nsideration the federal ozone

attainment status of districts as well as livestock population and operational practices of facilities. A recordkeeping component requires the owner or operator of a large CAF to keep a daily record of animals at the facility and to submit the information to the local air district consistent with applicable local rules.

Table 10-3 Large Confined Animal Facility Definition by Livest ock Category (facilities at or exceeding threshold are considere d large)

Livestock Category Non-Attainment Areas* Attainment Areas* Dairy 1,000 milk producing cows 2,000 milk producin g cows Beef Feedlots 2,500 beef cattle 5,000 beef cattle

Other Cattle Operations 7,500 calves, heifers, or

other cattle 15,000 calves, heifers, or

other cattle Chickens – Broilers 650,000 1,300,000 Chickens – Egg Layers 650,000 1,300,000

Turkeys 100,000 200,000 Swine 3,000 6,000 Sheep and Goats 15,000 30,000
Horses 2,500 5,000
Ducks 650,000 1,300,000
Rabbits, Pheasants, Llamas, Others 30,000 60,000

*Federal 1-hour ozone designation as of January 1, 2004

By July 1, 2006, air districts in federal ozone non -attainment areas must adopt rules requiring large CAFs to submit a mitigation plan to reduce air contaminants to the extent

feasible. Each air district in a federal ozone att ainment area must adopt a similar rule by July 1, 2006, unless its district board makes a finding in a public hearing that large

CAFs will not contribute to violations of state or federal standards. Large CAFs have six months from the date of adoption of the district ru le to submit their mitigation plans to the district; the districts have an additional six months to approve submitted plans. One year after submitting their plans (July 1, 2008), l arge CAFs must comply with the requirements of their mitigation plans.

E. Local Air District Rules

Because most Carl Moyer Program projects affect mob ile sources that are subject to statewide regulation, few district rules affect Car l Moyer Program funding. However, future district rules impacting agricultural source s must be considered when determining whether projects provide reductions surplus to regu latory requirements.

Internal combustion engines: Prior to the adoption of SB 700, most air distric ts specifically exempted agricultural engines from pro hibitory rules for stationary internalAGRICULTURAL SOURCES X-5 combustion engines greater than 50 horsepower. As a result, stationary agricultural engine emissions were largely uncontrolled. These districts have amended (or will amend) their internal combustion engine rules to re move the agricultural operation exemption. In these districts, stationary internal combustion engines used in agricultural operations are now required (or will be required) t o meet the emission standards/limits, permitting conditions, and compliance requirements of the local district.

Large Confined Animal Facilities: As outlined in the previous section, local air di stricts in federal ozone non-attainment areas are required to adopt rules developed to mitigate emissions from large CAFs. Local air districts in federal ozone attainment areas are also required to develop rules to mitigate large CA F emissions unless their district boards make a finding in a public hearing that larg e CAFs will not contribute to

violations of state or federal standards. A number of air districts have or are preparing to adopt regulations to meet these requirements.

Fugitive Dust Control: A number of air districts require agricultural op erations to reduce fugitive dust emissions through local rules. Local rules for particulate matter dust control generally require agricultural operations t o implement a variety of practice-specific options to reduce particulate mat ter. These practices may include methods to reduce the movement of soil during land preparation, cultivation, and harvesting, suppression of dust on unpaved roads, a lternatives to burning, and reduction of agricultural chemical applications.

IV. Potential Projects

Potential Carl Moyer Program projects for agricultu ral sources fall into three broad categories:

• Mobile source projects. Criteria for the projects may be found in Chapter 5: Compression Ignition Off-Road Equipment

.

• Stationary and portable agricultural engines.

• Non-engine agricultural sources.

The Carl Moyer Program seeks cost-effective emissio n reductions from stationary and portable agricultural engines operating in Californ ia. Criteria are designed to ensure that the emission reductions expected through the d eployment of electric motors, reduced-emission engines, or retrofit technologies under this program are real, surplus, enforceable, and quantifiable. In addition, at eac h district’s discretion, eligible projects may be subject to funding or cost-effectiveness cap s.

Portable diesel engine repower projects must begin by January 1, 2007, to meet the three year project life requirement due to the requ irement of the diesel-fueled portable engines ATCM that all diesel-fueled portable engine s be certified engines by January 1, 2010 [ARB, 2004].AGRICULTURAL SOURCES X-6 A. New Purchase

The only Carl Moyer Program eligible project for a new agricultural stationary or portable equipment purchase is a new electric motor . For the purposes of determining emission reductions, the new electric motor will be compared to an off-road diesel engine certified to the current off-road emission s tandards.

B. Repower

1. Repower with Electric Motors

Replacement of uncontrolled or older engines in agr icultural operations with electric motors provides significant emission benefits. Die sel and SI engines may be repowered with electric motors. In addition, selected costs for necessary peripheral equipment associated with the motor (e.g., control panel, mot or leads, service pole with guy wire, connecting electric line) may be included in determ ining the grant amount awarded.

In June 2005, the Public Utilities Commission appro ved a reduced electricity rate and

line extension allowance for Pacific Gas and Electr ic (PG&E) and Southern California Edison (SCE) to be used for conversion of stationar y agricultural internal combustion engines to electric. Individuals enrolling in the PG&E and SCE incentive programs may receive funds through the Carl Moyer Program for an electric motor replacing an internal combustion engine, regardless of whether they are c urrently under Carl Moyer Program

contract. Because of the limited enrollment timefr ame, ARB will allow grantees currently under contract to negotiate new contracts if they choose to participate in the utilities’ incentive programs. Please refer to Cha pter 12: Zero-Emission Technologies for specific information on these projects.

2. Repower with Emission-Certified Engines

Stationary and portable agricultural engines may be repowered with new off-road engines certified to the current applicable off-roa d emission standards. This provision applies to repowers with diesel and SI engines. Di esel engines may be replaced with cleaner diesel or SI engines. SI engines may only be replaced with cleaner SI engines; projects replacing SI engines with diesel engines a re not eligible for Carl Moyer Program funding. Emission reductions mu st be surplus to state or district rules and any permit conditions. Cost-effectivenes s calculations are based on the rebuild cost of the engine being replaced.

3. Repower with SI Engines Exceeding Local Distri ct

Requirements

Very few power systems using SI engines for station ary and portable applications have been certified to meet applicable emission standard s. These power systems are typically assembled by third parties and are not re quired to be certified because they are used in stationary applications. Because under certain conditions SI engines canAGRICULTURAL SOURCES X-7 be significantly cleaner than diesel engines, Carl Moyer Program funds may be used to fund purchases of non-certified SI engines in some cases. This provision is available until January 1, 2008. This will allow ARB and the districts an opportunity to assess the emission performance and durability of non-certifie d SI engines in the field. The emission reductions provided by a non-certified SI engine must be surplus to any local

district rules. Emission reduction calculations wi ll be based on the rebuild cost of the engine being replaced.

Non-certified SI engines purchased through the Carl Moyer Program will be required to have best available emission control components, an d will be subject to source testing and monitoring requirements as described in the Pro ject Criteria or local district requirements, whichever is more stringent. The cos ts associated for testing and monitoring may not be included in the grant award.

C. Retrofit

A retrofit involves modifications to the engine and /or fuel system such that the retrofitted engine does not have the same specifications as the original engine. Retrofit projects that reduce NOx may be applicable to certain diesel or SI engine families. Emission control technologies that have been verified for us e to reduce NOx and PM10 emissions in other applications for on-road or off-road diese l or SI engines may be applicable to stationary and portable agricultural engines. A NO x retrofit for an uncontrolled diesel engine must be verified to reduce emissions to the applicable new engine tier standard or less for a given engine size and not increase pa rticulate matter. An emission-certified stationary or portable engine ma y use a retrofit kit that is verified to reduce NOx or NOx + non-methane hydrocarbon (NMHC) emissions by at least 15 percent from the applicable emission standard. Uncontrolled SI engines may use a

retrofit kit verified to reduce emissions to the cu rrently applicable standard for large SI equipment, or if not feasible, with a retrofit k it verified to reduce emissions to at least 3.0 g/bhp-hr. The emission reductions provided by a retrofit kit must be surplus to the

local district rule. Emission reduction calculatio ns will be based on the emission rates of the existing engine being retrofitted.

Additional information on retrofit emission control strategies is provided in Appendix F.

D. Non-Engine Projects

Recent legislative changes have extended the Carl M oyer Program to non-engine agricultural sources of air pollution. The Board h as directed the Executive Officer to develop and approve project criteria for non-engine agricultural sources where technology is available to ensure the emission redu ctions are real, surplus, quantifiable, and enforceable. No specific project criteria are included at this time due to the limited data available on specific control technologies. A RB staff will continue to work closely

with the districts and interested stakeholders to m onitor technological developments to determine when and if it is it appropriate to devel op project criteria for non-engine

sources.AGRICULTURAL SOURCES X-8 Potential control technologies and regulatory optio ns will be evaluated for suitability under Carl Moyer Program requirements. During thes e evaluations, ARB staff will

consider:

• Whether the technology provides real, quantifiable , and enforceable emission

reductions.

• The availability of standardized testing procedure s that will quantify emission reductions from these technologies.

• Availability of baseline emission factors.

• Potential multi-media issues.

While engines have a statewide certification or ver ification process to prove the emission levels are achieved in practice, there is no comparable statewide process for stationary and area-wide sources. In developing st atewide project criteria for non-engine technology, ARB staff will need to consi der how to ensure that emission

reductions are achieved.

If non-engine agricultural projects include reducti ons of non-combustion PM, the criteria will include a weighting factor for non-combustion PM for use in the cost-effectiveness

formula.

The following sections provide background on some p otential non-engine agricultural projects.

1. Livestock Operations

Air emissions of concern from livestock include amm onia, nitrous oxide, methane, carbon dioxide, volatile organic compounds (VOC), h ydrogen sulfide, and particulate matter. The emissions can come from animal housing , storage areas for manure and wastewater, cropland where manure is applied, and d irectly from the cows. Livestock emissions are most significant in the San Joaquin V alley and the South Coast Air Basin.

The South Coast Air Quality Management District ado pted Rule 1127 - Emission

Reductions from Livestock Waste in 2004. This rule requires dairies to clear manure from corrals more frequently and send the manure to an emissions-controlled compost facility, an anaerobic digester, or to agricultural land where manure is approved for spreading as fertilizer.

The San Joaquin Valley Unified Air Pollution Contro l District recently approved a VOC emission factor to be used for permitting San Joaqu in Valley dairies. The District reviewed important classes of VOC constituents and key dairy processes individuallyAGRICULTURAL SOURCES X-9 before approving a total dairy emission factor of 1 9.3 lbs/year/head. The District will consider regulations to reduce emissions from dairi es in the near future.

With the upcoming SB 700 deadlines for approving la rge CAF mitigation plans, there is a need for a rapid, objective assessment of which t echnologies are most likely to be successful in California’s unique economic, regulat ory, and environmental conditions. The Dairy Manure Technology Feasibility Assessment Panel, created and hosted by the ARB, was convened in February 2005 to carry out thi s work. Members were drawn from government, industry, academia, and environmen tal and conservation groups.

The Panel evaluated technologies for their potentia l to reduce environmental impacts resulting from air emissions and from releases of n utrients, salts, and pathogens to the environment. The Panel is assessing the ability of the technology to prevent releases of contaminants and is considering their efficacy in r educing environmental impacts, energy production (if any), economic performance (i ncluding saleable products produced by the technology), quality of supporting data, and the development status. The Panel’s draft report is scheduled for release i n early 2006.

In general, potential technologies may be classifie d into categories including:

• Thermal conversion (including combustion and gasif ication).

• Solid-liquid separation (including dehydration).

• Composting.

• Anaerobic digestion.

• Aerators/mixers.

• Nitrification/denitrification.

• Covers.

• Microbials, enzymes, and other additives.

• Feed management.

• Trapping nutrients in biomass (e.g. crops, plants in constructed wetlands, algae, fish).

• Combination systems (such as wastewater treatment plants).

It is likely that no single technology will solve a ll of the problems associated with dairy manure and each dairy will likely require its own u nique combination of technologies to address the specific problems of that area. Resear ch still needs to be done on VOC emissions to quantify amounts emitted from each por tion of the dairy, and reactivity of the chemical species to form ozone. Without this i nformation and a lack of standard testing procedures, it is difficult to assess how v arious technologies will reduce these emissions, reduce ozone formation, and improve air quality.

2. Other Projects

Non-combustion particulate matter reductions can be achieved through the use of chemical dust suppressants, road paving, and harves ting equipment with catch-frame technology to eliminate the need for sweeping. For some of these projects, multimedia impacts must also be considered.AGRICULTURAL SOURCES X-10 Another potential project is the evaluation of irri gation pump efficiency. Improvement in pump efficiency through parts replacement and repai r has the potential for emission reductions of NOx, ROG, and PM by reduced work by t he engine or motor for water
output.

V. Project Criteria

The project criteria below have been designed to pr ovide districts and potential applicants with a list of minimum eligibility requi rements for Carl Moyer Program funding. Criteria focus on emission reductions, co st-effectiveness, and the ability for a project to be completed within the timeframe of the program. Additional information about funding electric motors for irrigation pumps is available in Chapter 12: Zero-Emission Technologies.

Participating districts retain the authority to imp ose additional requirements in order to

address local concerns.

A. General

• Projects that replace non-mobile agricultural engi nes with electric motors should be encouraged. After electric motors, priority should be given to engine repowers with certified engines, and then to engine retrofits and non-certified engines, if applicable.

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state or local regulation, memorandum of agreement/understanding with a regulatory agency, s ettlement agreement, mitigation requirement, or other legal mandate.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ combustion PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in this chapter.

• No emission reductions generated by the Carl Moyer Program shall be used as marketable emission reduction credits, or to offset any emission reduction obligation of any person or entity.

• No project funded by the Carl Moyer Program shall be used for credit under any federal or state emission averaging banking and tra ding program.

• Carl Moyer Program grants can be no greater than a project’s incremental cost. The incremental cost is the cost of the project minus t he baseline cost. The incremental cost shall be reduced by the value of any current f inancial incentive that reduces the project price, including tax credits or deductions, grants, or other public financial

assistance.AGRICULTURAL SOURCES X-11 • Projects must have a minimum project life of three years. ARB may approve shorter project life on a case-by-case basis. Projects wit h shorter lives may be subject to additional funding restrictions, such as a lower co st-effectiveness limit or a project
cost cap.

• The contract term must extend to the end of the pr oject life.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the air district suggests potential surplus, real, quantifiable, and enforceable emission reduct ion benefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on a case-by-case basis. Al l projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• An engine must be rated at greater than 25 hp, whi ch is equivalent to an electric motor greater than 19 kW.

• Projects must operate at least 75 percent of total equipment hours in California.

• The default project life when determining project benefits for new purchases or repowers shall be ten years for electric motors. T he default project life for engines without documentation shall be seven years. A long er project life may be used with approval by ARB staff, however, sufficient document ation must be provided to ARB that supports the selected project life based on th e actual remaining useful life. The default project life does not consider upcoming reg ulatory requirements. Project life may be shorter due to regulatory requirements.

B. New Purchase

• Engine purchases for new 2005 or later model year agricultural stationary or portable equipment can only be electric motors.

C. Repower

• A repower of an uncontrolled or emission certified (1996+ model year) diesel engine must be with one of the following:

− A new electric motor.

− A new off-road diesel engine certified to the curr ent applicable emission

standards.

− A new off-road spark-ignited (SI) engine certified to the current applicable

emission standards.

− A new SI engine that exceeds local district emissi on requirements and is subject to and complies with local district permitting, mon itoring, record keeping and reporting requirements. This criterion will sunset on January 1, 2008.AGRICULTURAL SOURCES X-12 • A repower of an uncontrolled SI engine must be wit h one of the following:

− A new electric motor.

− A new off-road SI engine certified to the current applicable emission standards.

− A new SI engine that exceeds local district emissi on requirements and is subject to and complies with local district permitting, mon itoring, record keeping and reporting requirements. This criterion will sunset on January 1, 2008.

• A repower of an emissions-controlled SI engine mus t be with one of the following:

− A new electric motor.

− A new off-road SI engine certified to the current applicable emission standards.

− A new SI engine that meets or exceeds local distri ct emission requirements and is subject to and complies with local district perm itting, monitoring, record keeping and reporting requirements, provided that t he new engine provides a

NOx emission reduction of at least 15% from the bas eline engine NOx emissions. This criterion will sunset on January 1 , 2008.

• Electric motors may replace diesel or SI engines. The applicant must have documentation of payment to the local utility compa ny for power installation. This requirement of documentation also applies to new in stallations.

• Off-road diesel engines must be certified for sale in California and must comply with durability and warranty requirements.

• The use of a non-certified SI engine shall be subj ect to approval by ARB staff. Emissions testing of a non-certified SI engine shal l be conducted using an ARB-approved source testing procedure, such as ARB Test Method 100.

• Non-certified SI engines shall be required to incl ude currently available emission control components such as closed-loop fuel control systems, and three-way catalysts.

• Non-certified SI engines shall be subject to sourc e testing with an ARB-approved testing procedure following local district requirem ents.

• Non-certified SI engines must be emission tested u sing a portable analyzer every 1,000 hours of operation and at least annually, or following local district monitoring requirements, whichever is most stringent. The emi ssion tests shall measure NOx and hydrocarbon emissions. An alternative monitori ng schedule may be used upon approval by ARB staff.

• The costs associated with source testing and monit oring requirements for non-certified SI engines are not eligible for fundi ng.AGRICULTURAL SOURCES X-13 D. Retrofit

• A retrofit of an uncontrolled diesel engine that r educes NOx must be with a retrofit kit

that is verified to reduce NOx or NOx+NMHC emission s to the applicable new engine Tier standard or less for a given engine siz e.

• A retrofit of an uncontrolled SI engine that reduc es NOx must be with a retrofit kit

that is verified to reduce NOx+NMHC emissions to th e currently applicable standard for off-road large spark-ignited equipment. If thi s is not feasible, the project must reduce NOx+NMHC emissions to at least 3.0 g/bhp-hr or less.

• A retrofit of an emission-certified (1996+ model y ear) off-road diesel engine that

reduces NOx must be with a retrofit kit that is ver ified to reduce NOx or NOx+NMHC emissions by at least 15 percent from the applicabl e NOx or NOx+NMHC emission

standard.

• Reduced-emission retrofit kits must be verified fo llowing California test procedures and must comply with durability and warranty requir ements.

E. Scrap

• Scrap requirements are described in the 2005 Carl Moyer Program Guidelines, Part I, Chapter 2: Administration of the Carl Moye r Program.

VI. Cost-Effectiveness

To receive Carl Moyer Program funding, each project must meet the maximum cost-effective threshold of $14,300 per weighted to n of covered pollutants reduced. Only funds provided by the Carl Moyer Program and l ocal district matching funds are to be used in determining cost-effectiveness.

Cost-effectiveness methodology and sample project c alculations are provided in Appendices C and D. Emission reduction benefits ar e calculated by comparing the emission levels and operating parameters of the bas eline engine and the replacement, reduced emission engine or motor. The emission red uctions and cost-effectiveness of an agricultural engine project may be calculated ba sed on annual hours of operation or annual fuel consumption.

VII. Minimum Project Requirements

A. Application

The minimum application information for stationary and portable agricultural engine projects is in Table 10-4. Districts may request a dditional information from the applicant.AGRICULTURAL SOURCES X-14 Table 10-4 Minimum Application Information for Stationary and Portable

Agricultural Engine Projects

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

Equipment Information Equipment Type (portable, stationary, other) Equipment Make Equipment Model Equipment Year Equipment Serial Number Baseline Equipment Fuel New Equipment Vendor (optional)

Activity Information Will the new engine have a functioning hour meter for the life of the project? Annual Hours of Operation or Annual Gallons of Fuel Consumption Percent Operation in California Percent Operation in District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional) ADDITIONAL INFORMATION –

NEW PURCHASE PROJECTS ONLY

New Electric Motor Make

New Electric Motor Model

New Electric Motor Serial Number New Electric Motor Family

New Electric Motor Year New Electric Horsepower (converted from kilowatts) Projected Year of Purchase of New Equipment

Baseline Cost New Reduced Emission Equipment Cost New Electric Motor Vendor (optional)

ADDITIONAL INFORMATION –

REPOWER PROJECTS ONLY Existing and Newer Engine/Motor Make Existing and Newer Engine/Motor Model Existing and Newer Engine/Motor Year Existing and Newer Engine/Motor Serial Number (if available) Existing and Newer Engine/Motor Fuel Type Existing and Newer Engine/Motor Horsepower Existing and Newer Engine/Motor Tier Existing and Newer Engine/Motor Family Is this project participating in the PG&E AG-ICE or the SCE TOU-PA-ICE Incentive Programs? Is this project engine a currently covered by a Moy er Program contract? Engine Rebuild Cost New Reduced Emission Equipment Cost New Engine Vendor (optional) New Engine Installer (optional)

ADDITIONAL INFORMATION –

RETROFIT PROJECTS ONLY

ARB-Verified Retrofit Device

Retrofit Device Serial Number ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)

Retrofit Device Executive Order Verification Level (Level 1,2 or 3)

Retrofit Device Cost Cost of Retrofit Installation (optional) Cost of Retrofit Maintenance for Life of Project (o ptional)AGRICULTURAL SOURCES X-15 A disclosure must also be included stating that the proposed project has not been funded and is not being considered for funding by a nother air district, ARB, or any other public agency. Any applicant who is found to have submitted multiple applications for the same project may be banned from submitting futu re applications to any and all Carl Moyer Program solicitations and may be subject to criminal sanctions. A project funded cooperatively by multiple air districts is e ligible for funding if the project parameters are coordinated amongst the participatin g districts and the project meets all applicable Carl Moyer Program criteria. Applicants are allowed to re-apply for project funding if a previous application has been rejected and is no longer being considered for funding.

Third party applications are not allowed. The owne r of the engine must sign and agree to the application. However, a third party (e.g. e ngine dealer or distributor) may complete an application or part of an application o n an owner’s behalf. Applications must include a signature section for third parties. The third party signature section must include signature and date lines, and blanks for th e third party to list how much they are being paid, if anything, to complete the applicatio n and what source of funds are being used to pay them. To make the Carl Moyer Program a ccessible to all potential applicants, including applicants that cannot afford to hire third party assistance, districts are encouraged to provide technical assistance to a pplicants in completing the application.

B. Reporting and Monitoring

Owners of stationary and portable agricultural engi nes participating in the Carl Moyer Program are required to keep appropriate records during the life of the project. During the project life, the district has the authority to conduct periodic checks or solicit operating records from the recipient of Carl Moyer Program funds. This is to ensure that the engine is being operated as stated in the project application. The recipient must maintain and update operating record s throughout the project life and have them available to the district upon request. Annual records must contain, at a minimum, total actual hours of operations or estima ted amount of fuel used from actual fuel receipts. Actual hours of operations are acce ptable for an engine equipped with a

non-reset hour meter.

Monitoring may be required to comply with district requirements and to ensure the program incentives are being applied toward the pro ject as specified in the application. To ease the tracking of the equipment over the life of the project, a district registration certificate may be issued to the equipment owner.

VIII. References

ARB, 2003. Air Resources Board. Staff Report: In itial Statement of Reasons, Airborne Toxic Control Measure for Stationary Compression Ig nition Engines. http://www.arb.ca.gov/regact/statde/isor.pdfAGRICULTURAL SOURCES X-16 ARB, 2004. Air Resources Board. Staff Report: In itial Statement of Reasons, Airborne

Toxic Control Measure for Diesel-fueled Portable En gines. http://www.arb.ca.gov/regact/porteng/isor.pdf

ARB 2005a. Air Resources Board. Staff Report: In itial Statement of Reasons for Proposed Revisions to the Airborne Toxic Control Me asure for Stationary Compression Ignition Engines. http://www.arb.ca.gov/regact/statde05/isor.pdf

ARB, 2005b. Air Resources Board. Staff Report: I nitial Statement of Reasons, Public Hearing to Consider the Large Confined Animal Facil ity Definition. http://www.arb.ca.gov/regact/lcaf05/isor.pdf

CASS, 2003. California Agricultural Statistics Ser vice. California Agricultural Statistics, 2003. California Agricultural Overview. http://www.nass.usda.gov/ca/bul/agstat/indexcas.htmXI-1 LIGHT-DUTY VEHICLES Chapter Eleven

LIGHT-DUTY VEHICLES

This is a new chapter that addresses the project cr iteria for on-road, light-duty vehicle projects under the Carl Moyer Program. The chapter contains a brief overview of the light-duty vehicle emission inventory, current engi ne emission standards, available control technologies, potential projects eligible f or funding, and emission reduction and cost-effectiveness calculation methodologies.

I. Introduction

Light-duty vehicles include passenger cars and ligh t-duty trucks such as pick-up trucks, sport utility vehicles (SUVs), and vans. In 2005, the estimated number of light-duty

vehicles in California is over 21 million vehicles. This number is expected to increase to over 23 million vehicles by 2010. Light-duty vehic les are major contributors to California’s ozone and particulate matter air pollu tion. Although emissions from light-duty vehicles are decreasing with the impleme ntation of stricter emission control standards, light-duty vehicles contribute about hal f of the ozone producing emissions

from all on-road vehicles.

II. Emissions

The oxides of nitrogen (NOx), reactive organic gas (ROG), and particulate matter (PM10) emissions from the light-duty fleet are show n in Table 11-1. In addition to these pollutants, light-duty vehicles emit toxic air cont aminants and carbon monoxide (CO).

Table 11-1 Statewide Emissions from On-Road Light-Duty Vehicle s

(tons per day)

Population NOx ROG PM10

2005 21,500,000 574 583 29
2010 23,700,000 388 405 32

Older, light-duty vehicles (pre-1990 model years) a ccount for 56 percent of the ROG and 41 percent of the NOx emissions from all light- duty vehicles in 2005 despite accounting for only 19 percent of the vehicle popul ation and less than 13 percent of the vehicle miles traveled (VMT). Generally, these old er vehicles emit more pollutants

because of less restrictive emission standards and increased wear and tear on drive train and emission control components. Additionall y, the subset of older vehicles that are not well maintained has a higher probability of being high emitters. As a result, older vehicles tend to be major contributors to ozo ne and particulate matter air pollution

in California.XI-2 LIGHT-DUTY VEHICLES

III. Regulatory Requirements

California’s emission controls for light-duty vehic les date back to the 1960s. Emission standards have become more restrictive over the yea rs, enabled by new control technologies and cleaner fuels.

Since the 1990s, the Low Emission Vehicle (LEV) reg ulations have been the cornerstone of the ARB’s program to reduce emission s from light-duty vehicles. The LEV program, implemented in 1994, established four tiers of low emission standards and provided manufacturers with the option of certi fying their vehicles to any mix of these standards as long as they complied with an av erage non-methane organic gas annual fleet requirement. The fleet average requir ement gradually decreased each year between 1994 and 2003, resulting in the introductio n of a greater number of cleaner vehicles each proceeding model year. The LEV II re gulation, adopted in 1998, set even more stringent, declining fleet average emission re quirements for 2004 through 2010 as well as lowering the NOx emission standards.

Figure 11-1 shows the progressively more stringent emission standards for new light-duty vehicles from 1970 through 2010. As a r esult of the ARB’s LEV program, a new 2005 model year car is on average 99 percent cl eaner than an uncontrolled car.

California also has requirements to ensure vehicles ’ emission control systems continue to work throughout their lives. Under the Inspecti on and Maintenance Program (Smog Check), vehicles are tested biennially to ens ure that they stay clean as they age. A Smog Check includes a tailpipe emissions test and a visual inspection of the emission control system. For vehicles equipped with on-boar d diagnostic (OBD II) systems

Emission Standards for New Light-Duty Vehicles

1970-2010

0 1 2 3 4 5 6 7 8 9

19 7 0 1972 19 7 4

1 97 6 19 7 8

1 98 0 19 8 2 1984 1986

1 98 8 19 9 0

1 992 19 9 4 19 9 6 1998
2 00 0 20 0 2 2004 2006
2 00 8 20 1 0ROG + NOx Emissions (g/mi) Figure 11-1XI-3 LIGHT-DUTY VEHICLES

(model years 1996 and later), the inspection also i ncludes a check of the malfunction indicator light to ensure that no problems have bee n detected with the vehicle’s emission control system.

IV. Potential Projects

Under the general heading of light-duty vehicle pro jects, the ARB has identified two programs that are eligible for funding under the Ca rl Moyer Program: voluntary accelerated vehicle retirement (VAVR) and voluntary vehicle repair (VVR). Both programs have the potential to decrease excess emis sions from older, high emitting vehicles. These Guidelines will focus on implement ing the VAVR program under the Carl Moyer Program. The ARB staff will continue to assess how to incorporate VVR into the Carl Moyer Program and anticipates providi ng guidance on VVR in 2006. As part of this assessment, the ARB staff will also ev aluate extending the guidance to medium-duty vehicles.

A. VAVR Programs

The goal of VAVR programs is to retire older, more polluting vehicles earlier than their expected lifetime, thereby eliminating air pollutio n emissions associated with their operation. VAVR programs are strictly voluntary pr ograms overseen by the ARB and administered by local air districts. Enterprise op erators are contracted by the district and are responsible for evaluating, approving, and disposing of qualified light-duty

vehicles. Real emission reductions can be achieved as vehicles are still fully operational and have a useful life remaining. Ther efore, to qualify for a VAVR program, a vehicle must meet registration, functionality, an d equipment eligibility criteria. To accommodate car collectors and others with potentia l interest in vehicles offered for retirement, VAVR programs provide the public with a n opportunity to purchase vehicles in whole or in part before the vehicle is entered i nto the VAVR program. Vehicles accepted into the program for emission reductions m ust be retired by crushing the vehicle to such a degree that the vehicle and its p arts are rendered unusable.

B. Legislative and Regulatory History of VAVR

Vehicle scrapping programs were first introduced in California in the early 1990s. In the 1994 State Implementation Plan (SIP), the ARB inclu ded a measure calling for a vehicle scrapping program in the South Coast Air Basin. Se nate Bill 501 (Calderon, 1995) directed the ARB to adopt a regulation governing VA VR which would include market-based, privately-operated VAVR enterprises a nd the generation of emission reduction credits. (See California Health and Safe ty Code sections 44100-44122, in part.) The ARB adopted VAVR regulations in 1998 an d amended these regulations in 2002 [ARB, 1998 and ARB, 2001]. In 1998 and 1999, the ARB conducted a pilot program for retiring light-duty vehicles in the Sou th Coast Air Basin. While the results of the pilot program were encouraging, funding limitat ions did not permit expansion of the program to achieve the emission reductions called f or in the SIP.XI-4 LIGHT-DUTY VEHICLES

The 2003 SIP did not contain an explicit commitment to vehicle retirement because sufficient funding for such programs had not been s ecured. However, the SIP did acknowledge the need to provide incentives for VAVR programs in the long term. Legislative changes to the Carl Moyer Program enact ed with the signing of Assembly Bill 923 (Firebaugh, 2004) added light-dut y vehicle projects to the list of allowable projects and provided additional means of funding VAVR programs to reduce NOx, ROG, and PM10 emissions.

C. District VAVR and the BAR Vehicle Retirement Pro grams

Four districts have recently operated or continue t o operate VAVR programs including the Bay Area Air Quality Management District (AQMD) , San Diego Air Pollution Control District (APCD), Santa Barbara APCD, and South Coas t AQMD. Between 2000 and 2003, these districts scrapped over 21,000 vehicles or over 5,000 vehicles per year.

In addition to district VAVR programs, the Bureau o f Automotive Repair’s (BAR) Smog Check Program includes a voluntary vehicle ret irement element. As part of BAR’s Consumer Assistance Program, owners of qualif ying vehicles that fail the biennial inspection are given the option of volunta rily retiring their vehicle rather than repairing it. BAR offers $1,000 in exchange for th e vehicle.

District VAVR programs work outside of BAR’s Smog C heck Program to ensure that district programs generate emission reductions that are surplus to the those obtained through the Smog Check. BAR’s program covers vehic les that have failed their biennial Smog Check while the district programs cover vehicl es that have passed their biennial Smog Check or are “off cycle” for Smog Check (i.e., not due for their biennial inspection). To ensure that the two programs do no t compete with one another, vehicles that are within 60 days from their next re quired Smog Check must pass the Smog Check inspection under the VAVR regulation. I f the vehicles are between 61 to 90 days of the next Smog Check, the district must v erify that the vehicle has not failed the Smog Check inspection before the vehicle can be accepted. Additionally, the vehicle cannot be operating under either a BAR repa ir cost waiver or economic hardship

extension.

D. Remote Sensing

Studies by the ARB, BAR, the U.S. Environmental Pro tection Agency (U.S. EPA), and the University of Denver, Colorado, among others, h ave shown that remote sensing devices (RSD) can be effective tools in identifying high emitting vehicles [BAR, 2001; U.S. EPA; Stedman, 1994; and Stedman].

Remote sensing typically uses infrared and, at time s, ultraviolet spectroscopy to measure the concentrations of air pollutants in veh icle exhaust while the vehicle is in use on the roadway. Concentrations of ROG, NOx, an d CO in parts per million or percent are recorded along with the vehicle’s speed and rate of acceleration and a photo of the license plate.XI-5 LIGHT-DUTY VEHICLES

The option of using RSD is included to identify hig h emitting vehicles that can then be contacted for participation in voluntary early reti rement programs. Staff is taking a two-step approach to integrate RSD into the Carl Mo yer Program and the VAVR regulation. As a first step, the ARB would authori ze an RSD-based “High-Emitting Vehicle Identification, Repair, and Scrapping Progr am” to be run by the South Coast AQMD starting in Spring 2006. Then, the ARB would use the data from this program to revise the VAVR regulation and provide additional C arl Moyer Program guidance in 2006 to fully incorporate RSD. The revisions would codify the use of RSD; establish protocols for quantifying emission reductions; and determine the appropriate application of Moyer funds to RSD-based VAVR programs. As part of this guidance, the ARB

would evaluate what elements related to the use of RSD would be eligible for funding under the Carl Moyer Program consistent with legisl ative requirements and Board direction. After the ARB revises the regulation an d Carl Moyer Program guidance, any district may develop and implement an RSD-based VAV R program.

The South Coast project will mark the first time an RSD-based VAVR program has been implemented. Because the methodology for calculati ng the emission reductions associated with retiring or repairing high-emitting vehicles has not been established and the level of vehicle owner participation cannot be predicted in advance, the cost-effectiveness of the program cannot be fully e stablished in advance. Carl Moyer Program funds can only be used for proje cts that meet the $14,300 per weighted ton cost-effectiveness limit. By undertak ing this introductory RSD program, the South Coast Air District is taking some risk if the program ultimately exceeds the

cost-effectiveness limit.

V. Project Criteria

Light-duty vehicle projects will initially be limit ed to VAVR programs that meet the ARB’s VAVR regulations. As noted above, the Guidelines a lso provide for an RSD implementation program in the South Coast. The pro ject criteria listed below provide districts with the minimum qualifications for the C arl Moyer Program.

The criteria listed below highlight many, but not a ll, of the requirements of the ARB’s VAVR regulation. VAVR programs must meet all of th e requirements of the regulation. Districts starting VAVR programs using Carl Moyer P rogram funding should reference these Guidelines as well as the regulation. Where the Carl Moyer Program Guidelines go beyond the requirements of the regulation, it is noted below. Participating districts retain the authority to impose additional requireme nts to address local concerns.

A. General Requirements

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state, or local regulation ; memorandum of agreement/understanding with a regulatory agency; s ettlement agreement; mitigation requirement; or other legal mandate.XI-6 LIGHT-DUTY VEHICLES

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ combustion PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in this chapter.

• No emission reductions generated by the Carl Moyer Program shall be used as

marketable emission reduction credits or to offset any emission reduction obligation of any person or entity.

• Projects must have a minimum project life of three years. The ARB may approve shorter project life on a case-by-case basis. Proj ects with shorter lives may be subject to additional funding restrictions, such as a lower cost-effectiveness limit or a project cost cap. The contract term must extend to the end of the project life. The default project life does not consider upcoming reg ulatory requirements.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the ARB suggests potential surplus, real, quantifiable, and enforceable emission reduction be nefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All p rojects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• Participation in a light-duty VAVR program shall b e entirely voluntary for vehicle

owners.

• VAVR programs shall comply with all provisions of the VAVR regulations found in Title 13 California Code of Regulations, Division 3 , Chapter 13, Article 1, section 2601 et seq.

• VAVR programs seeking funding under the Carl Moyer Program shall comply with all applicable provisions of the Carl Moyer Program Gui delines including “Administration of the Carl Moyer Program.”

• Funding of program administrative costs, including advertising or outreach, shall be

limited to the amount allowable under statute.

B. Vehicle Eligibility Requirements

• The vehicle to be retired must be currently regist ered with the Department of Motor Vehicles (DMV) as an operating vehicle and mu st have been registered for at least 24 consecutive months prior to the final date of the sale to a VAVR enterprise to an address, or addresses, within the district in which the VAVR enterprise is operated. Smog Checks must be performed as require d by the DMV in order for the vehicle to be considered registered.XI-7 LIGHT-DUTY VEHICLES

1. A vehicle may also be eligible if the owner of t he vehicle placed the vehicle in planned non-operational status per Vehicle Code sec tion 4604, et seq., for a total of 2 months during the continuous 24 month registra tion period, occurring at least 3 months prior to the date of sale to the VAVR ente rprise.

2. A vehicle may also be eligible if the registrati on has lapsed for a period not to exceed 180 days during the previous 24 months and a ll appropriate registration fees and late penalties have been paid to the DMV, provided that the vehicle is registered for at 90 days immediately prior to its date of sale to a VAVR enterprise.

NOTE: These eligibility requirements are stricter than the ARB’s current VAVR regulation but are consistent with the requirements of Health and Safety Code

section 44094.

• The vehicle to be retired shall be driven to the V AVR enterprise purchase site under its own power and shall pass a functional and equip ment eligibility inspections as specified in the ARB’s VAVR regulation.

• The vehicle to be retired shall not be operating u nder a Smog Check repair cost

waiver.

• If a vehicle volunteered for retirement is within 60 days of its next required Smog Check inspection, the vehicle shall pass the S mog Check inspection without receiving a repair cost waiver or economic hardship extension prior to acceptance by a VAVR enterprise operator.

• If a vehicle volunteered for retirement is within 61-90 days of its next required Smog Check inspection, the district shall verify th at the vehicle has not failed a Smog Check inspection during this time frame.

C. Calculating Emission Reductions

• Emission reductions from VAVR programs shall be ca lculated in accordance with the methodology specified in the ARB’s VAVR regulations . Emission reductions, by model year of vehicle retired, are shown in Table 1 1-2. (The table is also included in Appendix B, Tables for Emission-Reduction and Cost- Effectiveness Calculations, at Table B-21.)

• The project life for a vehicle retirement project is three years as specified in the ARB’s VAVR regulation.

D. Offering Vehicles/Parts to the Public

• The enterprise operator must inform the district o f the vehicles that are ready for dismantling.XI-8 LIGHT-DUTY VEHICLES

• The district must provide a detailed description o f the vehicle to interested parties including collectors and enthusiasts.

• The enterprise operator must wait a minimum of 10 days before submitting a Notice

to Dismantle to the DMV.

• If an interested person contacts the enterprise op erator, the enterprise operator must hold the vehicle for an additional, minimum of 7 da ys.

• Non-emission-related and non-drive train parts fro m the vehicle may be sold at the sole discretion of the enterprise operator.

• Engine, emission-related parts, transmission, and drive train parts must be removed from the vehicle and destroyed after the 10 day wai ting period but prior to offering the remaining parts for sale. (Emission-related an d drive train parts are defined in the VAVR regulation.)

• If a vehicle or its emission-related or drive trai n parts are sold instead of retired, no emission reductions will be generated, and Carl Moy er Program funds may to be used for retiring the vehicle.

E. Recordkeeping

• For each vehicle retired, the district shall retai n the following information:

1. Vehicle Identification Number (VIN). 2. Vehicle license plate number. 3. Vehicle model year. 4. Vehicle odometer reading.

5. Vehicle make and model. 6. Name, address, and phone number of legal owner s elling vehicle to the enterprise operator. 7. Name and business address of inspector conductin g the vehicle’s eligibility inspection, if the VAVR enterprise operator contrac ts with an ARB-approved inspection entity to perform the vehicle functional and equipment eligibility inspection. 8. Date of purchase of vehicle by enterprise operat or. 9. Date of vehicle retirement.

10. Emission reduction claimed.XI-9 LIGHT-DUTY VEHICLES

• The VAVR enterprise operator shall maintain the fo llowing:

1. Reproduction of California Certificate of Title and registration, as signed-off by the seller at time of final sale to the VAVR enterp rise. 2. Reproduction of the applicable certificate of fu nctional and equipment eligibility; 3. Reproduction of the applicable Notice to Dismant ler (DMV Registration 42 form). 4. Reproduction of written documentation from the D MV verifying that a vehicle meets the vehicle registration requirements of the ARB’s VAVR regulations. 5. If the retired vehicle was within 60 days of its next required Smog Check inspection, a reproduction of documentation that th e vehicle passed its Smog Check inspection.

• Districts and enterprise operators shall retain th ese records for the life of the project plus an additional three years.

NOTE: This requirement is stricter than the ARB’s current VAVR regulation which requires that records be maintained for the life of the project but is consistent with the Carl Moyer Program administrative requirements.

F. Criteria for South Coast AQMD RSD/Scrapping/Repa ir Project

• The South Coast AQMD may operate an RSD-based high -emitting vehicle identification, repair, and scrapping program.

• Prior to project implementation, the district shal l submit a detailed project plan for approval by the ARB’s Executive Officer (EO).

1. The plan shall include a detailed protocol descr ibing the installation, calibration, and operation of RSD that will be used to identify high emitters along with the methodology for processing of the data collected. 2. The plan shall include itemized, estimated proje ct costs including, but not limited to, the funds allocated to vehicle repair and the n umber of vehicles to be repaired; the funds allocated to vehicle retirement and the number of vehicles to be retired; and the costs allocated to RSD data col lection, data analysis, outreach, and solicitation of vehicle owners. 3. The plan shall include a sample of the letter th at the South Coast AQMD intends to send to vehicle owners soliciting their voluntar y participation in the project. 4. The project must follow the plan, and any substa ntive changes must be pre-approved by the EO.

• The South Coast AQMD shall permit the ARB to perfo rm emissions testing on a subset of the retired vehicles selected by the ARB prior to dismantling.

• As part of the Carl Moyer Program reporting requir ements, the South Coast AQMD shall report on each vehicle retired or repaired un der this program.XI-10 LIGHT-DUTY VEHICLES

• The ARB may conduct periodic auditing of the progr am, and the South Coast AQMD shall provide any required information concerning t he program.

• If vehicle records are missing, incomplete, or chr onically late, the ARB may disallow

emission reduction credit for that vehicle.

• The ARB has not yet established the methodology fo r calculating the extra emission benefits from retiring high-emitting vehicles ident ified using RSD. Because of this, the emission reductions achieved under this project shall be calculated in accordance with a new methodology that will be esta blished during the next revision of the VAVR regulation.

• An acceleration simulation mode (ASM) Smog Check t est must be run on all vehicles being retired or repaired during this intr oductory RSD/scrapping/repair project to help establish the emission reduction ca lculation methodology.

VI. Emission Reduction and Cost-Effectiveness Calcu lations

For VAVR projects, the emission reduction benefits represent the difference in the emission levels of the retired vehicle and the repl acement vehicles. The ARB approved the methodology for calculating emission reductions associated with VAVR at its December 1998 Board meeting [ARB, 1998]. Emission reductions, by model year of vehicle retired, calculated in accordance with the approved methodology are listed in

Table 11-2. The table lists the reductions over th e full three year life of a vehicle retirement project. The methodology for retiring h igh-emitting vehicles identified via RSD has not yet been established.

A detailed description of how to calculate cost-eff ectiveness can be found in Appendix C: Cost-Effectiveness Calculation Methodo logy and Appendix D: Example

Calculations.XI-11 LIGHT-DUTY VEHICLES Table 11-2 Voluntary Accelerated Light-Duty Vehicle Retirement Program

Emission Reductions for Calendar Year 2006*

Total Pounds Per Vehicle Over 3 Year Credit Life

Emission Reductions (pounds) – 3 Year Credit Life

Model Year NOx ROG** CO PM10

65 and earlier 151 496 2,757 0.68
66 145 471 2,552 0.67
67 148 477 2,611 0.65
68 156 492 2,731 0.81
69 162 504 2,841 0.56
70 169 438 2,971 0.99
71 172 449 2,990 0.95
72 177 458 3,037 0.83
73 180 469 3,082 0.64
74 159 401 2,859 1.20
75 145 345 2,861 1.17
76 130 222 2,673 1.04
77 108 183 2,546 1.13
78 107 186 2,493 1.10
79 95 168 1,625 0.90
80 85 129 1,373 1.13
81 62 108 1,092 1.22
82 66 101 1,085 1.36

83 73 85 934 1.22

84 73 74 883 1.05

85 69 59 575 0.89

86 71 61 527 0.91

87 67 71 468 0.92

88 67 65 430 0.85

89 50 46 492 0.84

90 38 45 529 0.81

91 38 42 514 0.76

92 40 41 510 0.71

93 35 31 279 0.64

94 19 17 21 0.54

* Table is repeated in Appendix B, Table B-21 ** Includes exhaust and evaporative emissions

Source: EMFAC2002, Version 2.2, statewide, annual average . Assumes average 1965 through 2006 vehicle as replacement vehicle for vehicles retired in calendar year 2006.

This table updates the emission reductions provided in the ARB’s VAVR regulation consistent with the methodology in the staff report, Proposed Regulatio ns for Voluntary Accelerated Light-Duty Vehicle Retirement Enterprises, released October 23, 1998, and approved by the ARB on December 10, 1998.XI-12 LIGHT-DUTY VEHICLES

VII. Minimum Project Application Requirements

Districts must submit a VAVR plan to the ARB, consi stent with the Carl Moyer Program Guidelines. The district must receive written appr oval of the plan from the ARB’s EO prior to implementing the VAVR program under the Ca rl Moyer Program. The district must also follow all other Carl Moyer Program repor ting requirements.

The district plan must at a minimum include:

1. The name, title, and telephone number of the dis trict contact for the VAVR program. 2. An evaluation of environmental justice considera tions including, but not limited to, outreach addressing community needs. 3. An estimate of the number of vehicles that may b e retired and an estimate of the cost-effectiveness of the program along with all as sumptions and calculations that were used to derive the estimate (recognizing that the ultimate cost-effectiveness will depend on the mix of vehicles actually retired ). 4. A sample of the enterprise operation contract. 5. A description of the methods that will be used a nd a timetable for monitoring and auditing enterprise operations. 6. A copy of the statement of certification that an enterprise operator has demonstrated compliance with all applicable provisions of the re gulation. 7. The methodology and sample records for verifying that a vehicle is eligible for inclusion in the VAVR program including confirmatio n of compliance with any Smog Check requirements. 8. The protocol for informing the public of the ava ilability of eligible vehicles for sale. 9. A sample of the records that will be required of the enterprise operator. 10. A description of changes to the VAVR program th at are more stringent than those listed in the statewide regulation (if a district c hooses to adopt requirements beyond those required). 11. Any additional information necessary to explain or clarify how the district plan complies with the VAVR regulation and the Carl Moye r Program.

The annual report shall contain, for each vehicle r etired, at a minimum:

1. Vehicle Identification Number (VIN). 2. Vehicle license plate number. 3. Vehicle model year. 4. Vehicle odometer reading.

5. Vehicle make and model. 6. Name, address, and phone number of legal owner s elling vehicle to the enterprise operator. 7. Name and business address of inspector conductin g the vehicle’s eligibility inspection, if the VAVR enterprise operator contrac ts with an ARB-approved inspection entity to perform the vehicle functional and equipment eligibility inspection. 8. Date of purchase of vehicle by enterprise operat or. 9. Date of vehicle retirement.XI-13 LIGHT-DUTY VEHICLES

10. Emission reductions claimed.

VIII. References

ARB, 1998. Air Resources Board, Proposed Regulatio ns for Voluntary Accelerated Light-Duty Vehicle Retirement Enterprises, October 23, 1998.

ARB, 2001. Air Resources Board, Proposed Amendment s to Air Resources Board Voluntary Accelerated Vehicle Retirement Regulation s – Minimize the Differences Between ARB and BAR VAVR Regulation and Allow Parts Recycling and Resale of Non-Emission-Related and Non-Drive Train Parts, Nov ember 30, 2001.

BAR, 2001. Bureau of Automotive Repair, Remote Sen sing Device High Emitter Identification with Confirmatory Roadside Inspectio n, Final Report 2001-06, August 30, 2001.

U.S. EPA. Julian W. Jones, C. Ted Ripberger, and N iranjan Vescio, U.S. Environmental Protection Agency, Office of Res earch and Development, FINAL REPORT An Investigation of Remote Sensing Devices f or Chemical Characterization of

Motor Vehicle Exhaust.

Stedman. Donald H. Stedman and Gary A. Bishop, Dep artment of Chemistry and Biochemistry, University of Denver, Colorado, Emiss ions-Based Mobile Source Inventory Methods.

Stedman, 1994. Donald H. Stedman, On-Road Remote S ensing of CO and HC Emissions in California, February 1994, ARB Contrac t No. A032-093.XII-1 ZERO-EMISSION TECHNOLOGIES Chapter Twelve

ZERO-EMISSION TECHNOLOGIES

This is a new chapter that highlights some of the a vailable zero-emission technologies eligible for Carl Moyer Program funding. It provid es more detail on zero-emission technologies and, for some project types, provides additional project criteria. It also

describes emission reduction and cost-effectiveness calculation methodologies. This chapter is a supplement to other chapters in these Guidelines: it does not replace or supersede any other criteria.

I. Introduction

A. Benefits of Zero-Emission Projects

Zero-emission technology is a key element of Califo rnia's long-term plan for attaining health-based air quality standards. Electric motor s are the most commercially viable zero-emission technology available today. In gener al, replacing internal combustion engines with electric motors provides major reducti ons in oxides of nitrogen (NOx) and particulate matter (PM10). Zero-emission technolog ies also have a number of societal benefits that are not quantified in the Carl Moyer Program. These include reductions in toxic air contaminants, greenhouse gases, petroleum consumption and noise pollution. In addition, electricity production does not have a s many “upstream” emission impacts as the production of combustible fuels. Refining, storage and delivery all have associated emissions from routine operations and ac cidents (e.g., fuel spills). Furthermore, unlike other technologies with emissio n control devices that may lose effectiveness over time, with zero-emission equipme nt there is no emission rate deterioration. Electric equipment will remain emis sion-free throughout its useful life.

Although the purchase price of electric equipment c an be higher than comparable internal combustion engine equipment, owners and op erators generally realize significant fuel and maintenance cost savings. The higher purchase price is sometimes recouped through these savings during the life of t he equipment. Higher salvage values and longer lives can provide electric equipment wit h an economic advantage compared to internal combustion engine equipment. In additi on, electric equipment operators sometimes derive indirect benefits from privileges like access to restricted areas, use of carpool lanes and even public relations benefits.

Yet, despite these attributes and the fact that ele ctric technologies may be well-suited for a multitude of applications, there have been re latively few zero-emission projects funded by the Carl Moyer Program. Many prospective buyers still perceive electric equipment to be an unfamiliar, risky technology or are deterred by the higher initial investment. The Carl Moyer Program can address bot h of these issues, first by serving as a source of information regarding electric techn ologies and, second, by providing grants to help offset increased costs. Zero-emission projects should becomeXII-2 ZERO-EMISSION TECHNOLOGIES

increasingly competitive within the Carl Moyer Prog ram. New regulations, tighter emission standards, increasing petroleum prices, an d technology advances are helping to make zero-emission technologies more competitive . As regulatory requirements continue to decrease baseline emission levels, Carl Moyer Program applicants need to find cleaner technologies to qualify for funding.

The Air Resources Board (ARB) requires districts to encourage zero-emission projects. This encouragement can be demonstrated in a number of ways. Districts operating on a “first-come-first-served” basis may rotate zero-e mission projects to the top of the list, regardless of when the applications were submitted. Districts that solicit projects and rank them by cost-effectiveness may choose to fund zero-emission projects first, regardless of their cost-effectiveness (as long as the project does not exceed $14,300 per weighted ton). Alternatively, districts may ea rmark a percentage of their allocation for zero-emission projects or increase outreach eff orts that target zero-emission projects. Any of these strategies are acceptable, as well as other means of encouragement. Districts’ policies and procedures must describe how they plan to encourage zero-emission technologies.

B. Types of Zero-Emission Projects

To date, the Carl Moyer Program has funded approximately 231 electric forklifts, 55 hybrid-electric buses, 7 electric motor driven a gricultural pumps, and 4 electric battery hybrid locomotives. In addition, 30 truck stop spaces are scheduled to be equipped with IdleAire systems to reduce truck idli ng under the Carl Moyer Program. In all of these projects, the NOx-only cost effectiven ess is very favorable. These projects will be even more cost-effective when reactive orga nic gases (ROG) and combustion PM are taken into account with the new weighted cos t-effectiveness formula. Zero-emission projects have an inherent emissions a dvantage because there is no NOx versus PM trade-off (as with some diesel projects) and no additional cost for controlling

PM or ROG.

In addition to agricultural pumps, buses, locomotiv es, and forklifts, there are several other applications where zero-emission technologies are capable of replacing combustion engines. Marine ports, airport ground s upport equipment (GSE), and industrial equipment are all good candidates for ze ro-emission technology. In addition, electric motors can substitute for idling trucks an d engines used for truck refrigeration units. All these applications are eligible for the Carl Moyer Program funding, and zero-emission technologies are the cleanest option.

In the following section, we discuss the availabili ty and provisions for using zero and near-zero emission technologies. For new applicati ons of zero-emission technologies not addressed elsewhere in the Guidelines, such as truck parking space electrification, we outline the parameters for Carl Moyer Program el igibility. Although many of these projects will be assessed on a case-by-case basis a t this time, our intent is to provide a general framework for evaluation. As with all proj ects, emission reductions must beXII-3 ZERO-EMISSION TECHNOLOGIES

surplus, real, quantifiable, and enforceable and th e project must meet the cost-effectiveness threshold of $14,300 per weighte d ton of reduced emissions.

Most Carl Moyer Program projects can simply substit ute an electric motor for an internal combustion engine. In those cases, the same criter ia and methodologies apply as for a typical repower or new purchase, except as noted in the criteria section of this chapter. All relevant regulations and MOUs discussed or refe rred to in the respective chapters also apply to zero-emission projects. The only dif ference is that the new or replacement piece of equipment has no emissions.

II. Regulatory Requirements

Regulatory requirements that apply to the baseline equipment are included in the respective chapters pertaining to the category of e quipment under consideration. Because there are no regulatory requirements for Ca rl Moyer Program categories that mandate zero-emission technologies, emission reduct ions resulting from using such technologies will always be surplus.

III. Potential Zero-Emission Projects

A. Electrically-Driven Agricultural Equipment

Agricultural equipment, such as pumps, provides an ideal application and the potential for wide-scale deployment of a zero-emission techno logy. Statewide, several thousand internal-combustion engines are used for pumping wa ter for agricultural purposes. To date over 2,000 pumps have been replaced using Carl Moyer Program funds, all but a few of those replacements were with diesel engines. Farmers are reluctant to purchase electrically driven pumps for several reasons but t he high cost of installing infrastructure and unpredictable electricity rates have been the p rimary deterrents to purchasing electric motor pumps. In addition, farmers usually have to pay substantial fixed charges for electricity even when the electric pump is not used. Because of these issues, most farmers opt for diesel pumps.

A new utility company incentive program coupled wit h Carl Moyer Program funding provides an opportunity to go electric. Pacific Ga s and Electric (PG&E) and Southern California Edison (SCE) have developed a rate-based incentive program that helps make electric motor irrigation pumps cost-competiti ve with diesel pumps. These new incentive rates, which have been approved by the Pu blic Utility Commission, are structured with the intent to achieve cost parity b etween owning and operating electrically driven agricultural pumps and diesel p umps capable of equal output. The rates were developed with a diesel price assumption of $1.15 per gallon. The rates are guaranteed to remain fixed (with the exception of a one and one half percent annual increase) until the year 2015. With current diesel prices more than double the assumed $1.15 price, electrically driven pumps should prove a viable economic option to diesel-powered pumps. The PG&E and SCE incentive p rograms are first-come-first-served programs that are accepting applications through July 31, 2007.XII-4 ZERO-EMISSION TECHNOLOGIES

Applicants must obtain prior approval from the dist rict before purchasing an electric motor under the PG&E and SCE incentive programs.

The PG&E and SCE incentive programs also provide fu nding to partially or fully offset the cost of extending power lines to the pump sites and eliminate the fixed demand charge, so customers do not have to pay a fee for t he months that the pump is not operated. Carl Moyer Program funding coupled with the PG&E and SCE incentive programs can provide lower electricity rates, price stability, infrastructure subsidies and waived demand charges, making electric motor pumps a very attractive option.

In order to qualify for the PG&E or SCE incentive p rogram, the applicant must replace an internal combustion engine (excluding those fire d with natural gas) used for irrigation pumping which was installed and operational prior t o September 1, 2004. In addition, the replaced engine must be destroyed or, if purcha sed with Carl Moyer Program funds, surrendered, destroyed, relocated or removed as ins tructed by the ARB and the local air district. All Tier 1 engines originally funded by the Carl Moyer Program that are replaced through the PG&E or SCE incentive program must be destroyed as described in the Administration Chapter (Chapter Two, Part I of the Approved Carl Moyer Program Guidelines). If a Tier 2 engine currently under Mo yer contract is relocated to replace a dirtier engine within the air district, then the di rtier engine must be destroyed. Districts should conduct pre-inspections to ensure the dirtie r engine is operational, and post-inspections to ensure that the replacement Tie r 2 engine is properly installed and functioning.

Districts may allow the sale of Tier 2 engines that are replaced through the PG&E or SCE incentive program if documentation is provided to establish the chain-of-custody of the engine, and the sale price. If the district al lows the sale of Tier 2 engines, all proceeds from the sale must be divided between the applicant and the district based upon the ratio of original funding provided for the purchase of the Tier 2 Moyer engine. Funds returned to the district must be spent on Moy er eligible projects (funds may be used to offset the added cost of the pre- and post- inspections). If the Tier 2 engine cannot be relocated or sold within 60 days of the e lectric service being energized, it must be destroyed. If the engine is sold out of Ca lifornia, documentation that the engine

will not be used in or re-sold into California must be provided to the district.

Because the PG&E and SCE incentive programs are a l imited time offer, ARB staff will allow pump engines currently under Carl Moyer Progr am contract to be replaced with electric motors under the incentive programs, with the contract to be revised to reflect the use of an electric motor. The remaining projec t life of the initially funded engine project would be added to the project life for the new electric motor pump project. The increased project life would be used in the cost-ef fectiveness calculation, and the contract duration will be increased accordingly.

For replacement agricultural pump engines not curre ntly funded by the Carl Moyer Program, applicants are allowed to use o ne-half of the normal rebuild cost for the baseline cost. Normally, Carl Moyer Progra m participants apply for grants at theXII-5 ZERO-EMISSION TECHNOLOGIES

time an engine needs to be rebuilt. In these cases , the grower would pay the base rebuild cost, while the Program would fund the incr emental cost of a repowering with a newer, cleaner engine. Because the PG&E and SCE in centive programs are a limited time first-come, first-served offer, some growers m ay choose to replace their engines

with an electric motor before the normal rebuild in terval for their engine. Because it will be difficult to determine where each individual eng ine is in its rebuild cycle, it is assumed that all engines taking advantage of the PG &E and SCE incentive programs are halfway through their rebuild cycle – and that the applicant’s base cost would be half

the rebuild cost.

Carl Moyer Program applicants using the PG&E and SC E incentive programs will also have to make adjustments to the emission reduction calculations. Because to date virtually no electric agricultural pump projects ha ve been funded through Carl Moyer Program grants, the PG&E and SCE incenti ve programs take credit for the emission reduction between a Tier 3 engine and an e lectric motor. As a condition of the PG&E and SCE incentive programs, these emission red uctions must be donated to the Carl Moyer Program for clean air. The emission red uction benefit between the replaced engine and a Tier 3 engine, may be included in the cost-effectiveness calculation to determine the grant amount. An example of this cal culation is provided in Appendix D.

Project Criteria for Electrically Driven Agricultur al Equipment

• Purchases of new 2005 or later model year agricult ural equipment can only be

electric motors.

• Priority must be given to projects that replace st ationary agricultural engines with

electric motors.

• Agricultural equipment that use an electric motor may use a default 10 year project life for calculating cost-effectiveness.

• Costs for necessary peripheral equipment associate d with the motor (e.g. control panel, motor leads, service pole with guy wire, and connecting electric line) may be included in the grant award amount.

• District match funds may be used for infrastructur e purchase and installation.

• District match funds may be used to offset the hig her cost of electricity relative to diesel fuel, if applicable. In this case, the fuel cost difference will be accounted for when calculating the cost-effectiveness of the proj ect.

• All electric-driven equipment must have a function ing kilowatt-hour meter, or other method approved by the local air district, to monit or usage.XII-6 ZERO-EMISSION TECHNOLOGIES

B. Marine Shore-Side Provided Power

In addition to being the largest source of air poll ution in many districts, ports are often situated in environmental justice areas. For these reasons, ports are a primary focus for emission reduction strategies throughout the state. Governor Schwarzenegger has directed state and regional air agencies to work to gether with the U.S. Environmental Protection Agency, industry and community stakehold ers to address port-related sources of air pollution.

The largest emission source at ports is marine vess els. One strategy for reducing marine vessel emissions is “cold ironing” where shi ps plug into shore-side power while docked, rather than continuously running their dies el engines to generate electricity. Cold-ironing requires the proper electrical supply connections from the shore — lines, transformers, switching gear, cables, etc. — and t he necessary hook-ups on the ship.

Cold ironing, long used for naval vessels, has rece ntly been implemented in the non-military sector in Juneau, Alaska and at the Po rt of Los Angeles. Four specially-equipped cruise ships plug into shore-sid e power in Juneau during hotelling operations, while a container vessel plugs in at th e electrified berth in Los Angeles. In addition, the Port of Long Beach has begun work to provide dockside electricity to

accommodate two retrofitted oil tankers and work ha s begun in Seattle to convert a berth for cruise ships. Other ports in the U.S. an d worldwide are also considering cold-ironing. Early results of ARB’s shore-electri fication feasibility study indicate that cold-ironing is a cost-effective measure to reduce pollutants from a variety of ships — namely, cruise ships, container ships, and refriger ated bulk ships — at several California ports.

Most marine projects in the Carl Moyer Program deal with harbor craft. Cold ironing projects go beyond harbor craft and include cruise ships, tankers, and freighters. Because cold ironing is a nascent technology, it is difficult to specifically identify the exact components that will be eligible for Carl Moy er Program funding. Because each cold ironing project will be unique, each must be c onsidered for grant funding on a case-by-case basis. The cost-effectiveness and gra nt amount will depend on a number of issues such as interface compatibility, operatin g voltage, energy needs and electricity availability at the dock. However, evidence must b e submitted to the air district to prove that all emission reductions are surplus, real, qua ntifiable, and enforceable and the

cost-effectiveness limit is not exceeded

. Applications will be evaluated based on factors including, but not limited to, frequency and durati on of port visitations, energy usage at the dock, seasonal operating variances and regulari ty of travel routes.

C. Forklifts and Other Large Spark-Ignition Equipm ent

The Carl Moyer Program has two general emission con trol strategies for forklifts -- (1) purchase of new electric forklifts instead of n ew internal combustion engine (ICE) forklifts; and (2) retrofit or repower of internal combustion forklifts that do not lendXII-7 ZERO-EMISSION TECHNOLOGIES

themselves to electric substitution. Specific proj ect criteria for funding large spark-ignition (LSI) engines are not yet formalized in these Carl Moyer Program Guidelines pending the Board’s action on the staff’ s proposed regulations for LSI engines and equipment. However, staff proposes the following changes regarding electric forklift projects:

• The cost-effectiveness limit for electric forklift s is $7,000 per weighted ton of reduced

emissions.

• Leased forklifts are eligible for funding if the l ease term is three years or more.

Chapter Six provides additional background discussi on on this project category and potential criteria that could be used to establish funding eligibility under the Carl Moyer Program for both strategies. Until the Board adopt s the LSI regulation, districts may continue to fund forklift projects using the 2003 C arl Moyer Program Guidelines. During this interim period, additional zero-emission LSI p rojects may be considered on a case-by-case basis.

D. Airport Ground Support Equipment

Electric GSE have several attributes that make them appeal to users. Participants of demonstration and fleet conversion programs like th e way that electric GSE handle and appreciate the fact that they are more “task specif ic”. Battery weight often provides valuable ballast needed to lift heavy objects or pu sh airplanes; usage is often conducive to charging cycles; there are no odors; and no liqu id fuel required in the aircraft staging area. Most importantly, electric GSE can be cost-e ffective and generally have relatively short payback periods. Electric GSE are commercial ly available and commonly used for a number of equipment types including belt load ers, baggage tractors, aircraft tugs, lifts, ground power units, cargo loaders, lavatory carts and air-start units. However, the higher capital cost of electric equipment is often a deterrent to prospective buyers. Carl Moyer Program funds can be used to offset this initial capital investment.

As discussed in Chapter Seven, there are currently no regulations requiring the use of electric ground support equipment (GSE) at airports but there is a Memorandum of Understanding that involves five airports in southe rn California (Los Angeles, Ontario, Orange County, Burbank, and Long Beach). The Carl Moyer Program will fund the purchase of new electric GSE instead of new GSE pow ered by internal combustion engines if this equipment is surplus to the MOU; is not used to meet the requirements of any regulation, including the upcoming large-spark ignition regulation; is not funded through any other incentive program; and is not use d to generate credits of any type.

E. Idling Reduction Technologies

Truck drivers idle their propulsion engines for a n umber of reasons but the main purpose is for interior climate control -- heating and cooling the cab/sleeper compartment of the truck. A pilot survey on truck idling trends conducted in NorthernXII-8 ZERO-EMISSION TECHNOLOGIES

California indicates that 67 percent of idling is t o provide heating and 83 percent for air conditioning [Brodrick et al., 2001]. Therefore, d evices capable of providing heating and air conditioning without operating the propulsion i nternal combustion engine may substantially reduce emissions associated with truc k idling. Such devices are eligible for funding in the Carl Moyer Program.

Idling emissions, as well as fuel consumption, can be reduced by installing an available zero-emission idling control technology such as an on-board non-internal combustion engine device; by using a site-specific off-vehicle technology such as IdleAire; or by combining on and off-vehicle technologies.

Available zero-emission on-vehicle technologies inc lude generators or upgraded alternators coupled with inverter/chargers and elec tric heating ventilation and air conditioning (HVAC) systems. On-board battery pack s or fuel cells are also an option. Off-vehicle technologies include grid-supplied elec tricity at truck stops and advanced truck stop electrification (e.g., IdleAire). The u se of these devices, in lieu of operating the heavy-duty engine at idle, will result in signi ficant NOx reductions. Reductions in PM and ROG are also expected but to a lesser extent depending on the type of alternative idle reduction device/strategy used.

In October 2005, the Board will consider a proposal that would limit idling of heavy-duty trucks equipped with sleeper berths. This proposal would prohibit heavy duty trucks with sleeper berths from idling more than five minu tes unless certain conditions are met. If the Board approves the staff recommendations, th e baseline for calculating the benefits of truck idle reduction projects would be a certified diesel APU. Zero-emission technologies would be eligible for funding using th e lower emission baseline.

1. Idling Reduction Technology Options

Because the vast majority of truck idling occurs aw ay from truck stops, the most effective idle reduction technologies are those tha t are available to meet operator needs at any location idling occurs. The costs of these technologies vary widely, although the initial capital investment can typically be recover ed within one to three years from reduced fuel and maintenance savings. Still, truck owners and operators have not been receptive to these solutions because of their highe r initial cost.

Another on-board idle reduction system utilizes ele ctric heating, ventilation, and air conditioning (HVACs) instead of internal combustion engine-driven HVACs. These electric HVACs can be powered directly from the gri d, a fuel cell, or from energy stored in battery packs. The battery packs can be charged from the grid, from the truck’s alternator, or from a small on-board gen-set. Fuel cells are an emerging zero-emission technology that may also substitute for idling truc k engines or auxiliary power units in

the future.

Carl Moyer Program funds could be used to help defr ay the initial cost of equipping the truck with the necessary idle-reducing electric equ ipment. The Carl Moyer ProgramXII-9 ZERO-EMISSION TECHNOLOGIES

would pay up to $5,500 toward electric equipment an d up to $3,400 for its installation. In order to be eligible for funding, 75 percent of the applicant’s usage must take place

within California.

2. Truck Stop Electrification

Installation of electric power infrastructure at tr uck stops, or truck stop electrification (TSE), is gaining support as an idling reduction st rategy. Under this option, trucks would be provided with 110 volt alternating current (AC) electrical power at truck stops to run the electric air conditioning, heating and o nboard appliances. The electric supply can also be used to charge on-board batteries for e lectricity use away from the truck stop. Truck stops would need to be equipped with e lectrical outlets throughout the parking spaces and trucks would need to be equipped , at a minimum, with inverter/chargers and electrical power connections. If fitted with batteries, the truck could use electricity away from the truck stop. The inverter/charger is used to charge

the truck batteries and to convert the truck’s 12 v olt direct current (DC) batteries to 120 volt AC power for all onboard appliances. Curr ently, AC power inverters that are built into the truck are offered as a factory optio n by Freightliner, Volvo and International. The cost for inverter/chargers is a pproximately $1,400, a 600-700 Ah lead acid battery pack (good for about 8-15 hours of HVA C and appliance operation) costs approximately $8,000.

As discussed above, the Carl Moyer Program would pa y up to $5,500 toward electric equipment on-board the truck and up to $3,400 for i ts installation. TSE infrastructure installation at truck stops costs approximately $2, 000 per truck parking space. District matching funds may be used to offset this cost.

3. Advanced Truck Stop Electrification

An alternative to the TSE system that does not need truck modifications has been introduced by IdleAire Technologies. This system p rovides heating and air conditioning to the truck, as well as electrical power for on-bo ard appliances. It also provides basic services such as telephone and internet access and cable or satellite television. The unit is connected to the truck through a console mo unted to the truck window using a template insert. The console contains all the nece ssary connections and controls, including a card reader for the billing system. Th e infrastructure cost is approximately $17,000 per parking space but may vary depending on the number of parking spaces

installed.

Several advanced truck stop electrification project s have been installed with state and local funding. Carl Moyer Program funds may be use d for installing advanced truck stop electrification systems (e.g., IdleAire system s). In these cases, a partial payment would be made upfront to help offset the initial ca pital investment. The remainder of the grant amount would be paid out in installments base d on system utilization. The amount of the initial payment and subsequent instal lments will be determined on a case-by-case basis.XII-10 ZERO-EMISSION TECHNOLOGIES

The truck idling reduction projects described are j ust a few of many zero-emission idle reduction strategies. Other technologies and proje cts may also be eligible for Carl Moyer Program funding on a case-by-case basis. As with all projects, emission reductions must be surplus, real, quantifiable, and enforceable and the project must meet the cost-effectiveness threshold of $14,300 pe r weighted ton of emission

reductions.

F. Transportation Refrigeration Units

Electric standby transportation refrigeration units allow the engine to be turned off when a compatible electric power supply is available to operate the transportation refrigeration unit (TRU). Diesel engine emissions are eliminated while the TRU is plugged in at the facility. TRU manufacturers currently offer an ele ctric standby option on most models but very few trucks operating in the United States – less than one percent of trucks with TRUs – opt for these units. Electric standby TRU m odels are common in Europe where approximately 90 percent of all truck TRUs have som e type of electricity plug-in capability. As currently designed, however, the el ectric motors are only sized to hold a temperature set point and may not have sufficient p ower to pre-cool large trailer enclosures. This technology does not reduce emissi ons when the vehicle is away from an electricity source.

Electrically-driven TRUs could, in the long term, b e powered by fuel cells. This would allow the TRU to operate emission-free while enrout e or when stopped at a facility, regardless of the availability of electricity. As previously mentioned, fuel cell technology for this application is not currently market-ready.

Zero-emission TRU projects will be evaluated on a c ase-by-case basis. Criteria for other TRU projects are discussed in Chapter Four: Transport Refrigeration Units.

G. Other Zero-Emission Projects

This chapter addresses some of the most likely zero -emission technology projects. It is by no means a complete list of zero-emission techno logy projects. Other zero-emission technology projects either require no special consi deration (e.g., an internal combustion engine is directly replaced with an electric motor) or are described in the appropriate chapters (e.g., electric TRUs and power plug-in uni ts to reduce locomotive idling). Zero-emission technology projects not specifically addressed in this chapter or elsewhere in the Guidelines may be considered for C arl Moyer Program funding on a case-by-case basis. As with all projects, emission reductions must be surplus, real, quantifiable, and enforceable and the project must meet the cost-effectiveness threshold of $14,300 per weighted ton.

ARB staff will continue to work closely with intere sted stakeholders to monitor technological developments in effort to determine w hen it may be appropriate to develop or modify criteria for zero-emission projec ts. If necessary, ARB will issueXII-11 ZERO-EMISSION TECHNOLOGIES

advisories to inform prospective applicants and dis tricts of any new policy developments regarding Carl Moyer Program projects using zero-em ission technologies.

On September 6, 2005, Governor Schwarzenegger signe d Senate Bill 467 (Lowenthal) which requires the ARB to revise the Carl Moyer Pro gram Guidelines to include projects in which an applicant turns in off-road equipment p owered by internal combustion engines and replaces that equipment with new zero-e mission technologies. This legislation will take effect on January 1, 2006. A RB staff will evaluate how to incorporate the requirements of this legislation in to the Carl Moyer Program in 2006.

IV. References

Brodrick, C .J., N. P. Lutsey, Q. A. Keen, D. I. Ru bins, J. P. Wallace, H. A. Dwyer, and S. W. Gouse III, Truck Idling Trends: Results of a Pilot Survey in Northern California, Society of Automotive Engineers, Technical Paper Se ries 2001-01-2828, Warrendale, PA, 2001.

# THE CARL MOYER PROGRAM GUIDELINES

PART III of IV



# AGRICULTURAL ASSISTANCE PROGRAM

Approved November 17, 20051 AGRICULTURAL ASSISTANCE

PROGRAM AGRICULTURAL ASSISTANCE PROGRAM

The Agricultural Assistance Program was created thr ough provisions of Assembly Bill 923 (AB 923, Firebaugh) and went into effect on January 1, 2005. This legislation authorizes local districts to increase the motor vehicle registration fee. One of the projects which may be funded with the monies is compliance with emission reduction requirements for previously unregulated a gricultural sources of air pollution. Unlike the Carl Moyer Program, the Agricultural Ass istance Program does not require the emissions reductions to be surplus. This docum ent presents an overview of the Agricultural Assistance Program, current regulation s, potential project types, application requirements, and methodology for calculating the c ost-effectiveness of total reductions for a project.

I. Background

Local air districts may impose a surcharge on motor vehicle registration fees (up to $4 per vehicle) for air quality improvement strateg ies (California Health and Safety Code (HSC) sections 41081 and 44229). In 2004, AB 923 p rovided districts with the authority to increase the allowable surcharge by up to an add itional $2. Districts receiving the additional $2 surcharge may use the funds to implem ent four specific programs:

• projects funded through the Carl Moyer Program.

• the new purchase, retrofit, repower, or add-on of previously unregulated equipment for agricultural sources.

• school bus purchases through the Lower Emission Sc hool Bus Program.

• an accelerated vehicle retirement or repair progra m.

The Agricultural Assistance Program was created to implement the second program: “the new purchase, retrofit, repower, or add-on of previously unregulated equipment for agricultural sources.”

Districts funds from the two dollar surcharge that are applied to the Agricultural Assistance Program may be used to help agricultural operations meet local and state air quality requirements. Qualified projects are eligi ble for funding for a minimum of three years from the date of adoption of an applicable ru le or standard, or until the compliance date of that rule or standard, whichever is later. Eligible projects are not required to provide surplus emission reductions. The emission benefits of projects funded by the Agricultural Assistance Program are already counted in the emission benefits of individual local or state rules. District funds ap plied to the Agricultural Assistance Program do not count for district match funds in th e Carl Moyer Program.

“Agricultural source of air pollution,” for the pur poses of AB 923 and the Agricultural Assistance Program, is defined in HSC section 39011 .5(a) as a source or group of sources used in the production of crops or raising of fowl or animals located on2 AGRICULTURAL ASSISTANCE

PROGRAM contiguous property and under common ownership or c ontrol. Four categories of emission sources are identified as part of this def inition:

• confined animal facilities (CAFs).

• internal combustion engines, including portable an d off-road engines, unless used to propel instruments of husbandry.

• sources subject to requirements of Title V, the fe deral Operating Permitting Program for major stationary sources.

• sources of emissions otherwise subject to district regulation.

The statutory provisions of AB 923 also require tha t Agricultural Assistance Program projects follow the Carl Moyer Guidelines [ARB, 200 5c]. Project criteria are based on the Carl Moyer Program Guidelines, with modificatio ns to the surplus emission reductions requirements and cost-effectiveness meth odology.

II. Statutory and Regulatory Requirements

A. SB 700

In 2003, Senate Bill 700 (SB 700, Florez) amended a nd added air pollution control requirements in the HSC (sections 39011.5, 39023.3, 40724, 40724.5, 40724.6, 40724.7, 40731, 42301.16, 42301.17, 42301.18, 42310 , and 44559.9) to include requirements for agricultural sources of air pollut ion. Some of the key requirements of this legislation are listed below:

• The legislation created a definition for “agricult ural source of air pollution.” The definition is provided in the preceeding section of this document.

• The legislation removed language exempting agricul tural sources from air quality permits in the HSC in its entirety. As a result, a gricultural operations may be required to obtain air permits from local districts

.

• The legislation established specific agricultural source permitting and exemption requirements for local districts.

• The legislation required certain districts to adop t by regulation a set of measures to reduce emissions from agricultural sources in feder al particulate matter

non-attainment areas.

• The legislation required the ARB to establish a de finition for a “large” CAF, and required certain districts to adopt rules requiring large CAFs to obtain permits and implement emission mitigation measures.

B. Stationary Diesel Engines ATCM

In February 2004, the Board adopted an air toxics c ontrol measure (ATCM) for stationary compression ignition (CI) engines greate r than 50 horsepower [ARB, 2003].3 AGRICULTURAL ASSISTANCE

PROGRAM The Board amended the ATCM in May 2005 [ARB, 2005a] . The control measure requires new CI engines for agricultural operations , including those used to repower agricultural equipment, to meet ARB and federal new off-road engine PM certification standards for engines of the same horsepower and mo del year. The only exception to this requirement is for the installation of Tier 2 engines funds through January 1, 2008, purchased with Carl Moyer Program.

ARB staff is currently working on the development o f in-use stationary diesel agricultural engine requirements to be considered by the Board i n 2006.

C. Diesel-Fueled Portable Engines ATCM

An ATCM for portable diesel engines was adopted by the Board in February 2004 [ARB, 2004]. The control measure requires all diesel-fue led portable engines 50 horsepower and greater to be certified to Tier 1, 2, or 3 fede ral and state off-road engine emission standards by 2010. The ATCM also requires fleets o f portable engines 50 horsepower and greater to meet weighted particulate matter emi ssion standards that become more stringent in 2013, 2017, and 2020.

D. Large Confined Animal Facility Definition

In response to the requirements of SB 700, the Boar d approved a definition for large CAF on June 23, 2005 [ARB, 2005b]. The definition (shown in Table 1) is based on headcount of livestock categories and takes into co nsideration the federal ozone

attainment status of districts as well as livestock population and operational practices of facilities. A recordkeeping component requires the owner or operator of a large CAF to keep a daily record of animals at the facility and to submit the information to the local air district consistent with applicable local rules.

By July 1, 2006, air districts in federal ozone non -attainment areas must adopt rules requiring large CAFs to submit a mitigation plan to reduce air contaminants to the extent

feasible. Each air district in a federal ozone att ainment area must adopt a similar rule by July 1, 2006, unless its district board makes a finding in a public hearing that large

CAFs will not contribute to violations of state or federal standards. Large CAFs have six months from the date of adoption of the distric t rule to submit their mitigation plans to the district; the districts have an additional six months to approve submitted plans. One year after submitting their plans (July 1, 2008), l arge CAFs must comply with the requirements of their mitigation plans.4 AGRICULTURAL ASSISTANCE

PROGRAM Table 1 Large Confined Animal Facility Definition by Livest ock Category (facilities at or exceeding threshold are considere d large)

Livestock Category Non-Attainment Areas* Attainment Areas* Dairy 1,000 milk producing cows 2,000 milk producin g cows Beef Feedlots 2,500 beef cattle 5,000 beef cattle

Other Cattle Operations 7,500 calves, heifers, or

other cattle 15,000 calves, heifers, or

other cattle Chickens – Broilers 650,000 1,300,000 Chickens – Egg Layers 650,000 1,300,000

Turkeys 100,000 200,000 Swine 3,000 6,000 Sheep and Goats 15,000 30,000
Horses 2,500 5,000
Ducks 650,000 1,300,000
Rabbits, Pheasants, Llamas, Others 30,000 60,000

*Federal 1-hour ozone designation as of January 1, 2004

E. Local Air District Rules

Internal combustion engines: Prior to the adoption of SB 700, most air distric ts specifically exempted agricultural engines from pro hibitory rules for stationary internal combustion engines greater than 50 horsepower. As a result, stationary agricultural engine emissions were largely uncontrolled. These districts have amended (or will amend) their internal combustion engine rules to re move the agricultural operation exemption. In these districts, stationary internal combustion engines used in agricultural operations are now required (or will be required) t o meet the emission standards/limits, permitting conditions, and compliance requirements of the local district.

Large Confined Animal Facilities: As outlined in the previous section, local air di stricts in federal ozone non-attainment areas are required to adopt rules developed to mitigate emissions from large CAFs. Local air districts in federal ozone attainment areas are also required to develop rules to mitigate large CA F emissions unless their district boards make a finding in a public hearing that larg e CAFs will not contribute to

violations of state or federal standards. A number of air districts have or are preparing to adopt regulations to meet these requirements.

Fugitive Dust Control: A number of air districts require agricultural op erations to reduce fugitive dust emissions through local rules. Local rules for particulate matter dust control generally require agricultural operations t o implement a variety of practice-specific options to reduce particulate mat ter. These practices may include methods to reduce the movement of soil during land preparation, cultivation, and5 AGRICULTURAL ASSISTANCE

PROGRAM harvesting, suppression of dust on unpaved roads, a lternatives to burning, and reduction of agricultural chemical applications.

IV. Potential Projects

The statutory provisions of AB 923 include requirem ents for Agricultural Assistance Program eligible projects:

• Projects must involve the new purchase, retrofit, repower, or add-on of equipment.

• Projects must reduce emissions from previously unr egulated sources; that is, sources that are unregulated as of January 1, 2005 (the effective date of the legislation), but are subject to regulation at the time of the grant.

• Projects must be funded within three years of rule adoption or before the compliance date of the rule, whichever is later.

• The ARB must determine that the applicable rule co mplies with HSC sections 40913, 40914, and 40915 pertaining to district atta inment plan measures. District plans must be designed to achieve and maintain the state ambient air quality standards by the earliest practicable date through the use of all feasible measures. ARB routinely reviews district rules for compliance with these requirements and will treat agriculture-related rules the same way.

Criteria for the Agricultural Assistance Program ar e adapted from the 2005 Carl Moyer Program Guidelines and are designed to ensure that the emission reductions expected through the deployment of elect ric motors, reduced-emission engines, or retrofit technologies under this progra m are real, enforceable, and quantifiable. All projects must meet a weighted co st-effectiveness of total reductions criterion of $14,300 per weighted ton of pollutants reduced. In addition, at each district’s discretion, eligible projects may be subject to fun ding or cost-effectiveness of total reductions caps. A project must be in operation fo r at least three years from the time it is first put into operation; ARB may approve a shor ter project life on a case-by-case

basis.

A. New Purchase

The only eligible project for a new agricultural st ationary or portable equipment purchase is a new electric motor. For the purposes of determining emission reductions, the new electric motor is compared to an off-road d iesel engine certified to the current

off-road emission standards.6 AGRICULTURAL ASSISTANCE

PROGRAM B. Repower

1. Repower with Electric Motors

Replacement of uncontrolled or older engines in agr icultural operations with electric motors provides significant emission benefits. Die sel and SI engines may be repowered with electric motors. In addition, selected costs for necessary peripheral equipment associated with the motor (e.g., control panel, mot or leads, service pole with guy wire, connecting electric line) may be included in determ ining the grant amount awarded.

In June 2005, the Public Utilities Commission appro ved a reduced electricity rate and

line extension allowance for Pacific Gas and Electr ic (PG&E) and Southern California Edison (SCE) to be used for conversion of stationar y agricultural internal combustion engines to electric. Individuals enrolling in the PG&E and SCE incentive programs may receive funds through the Agricultural Assistance P rogram for an electric motor replacement of an internal combustion engine. Plea se refer to Part II, Chapter 12: Zero-Emission Technologies in the 2005 Carl Moyer P rogram Guidelines for specific information on these projects.

2. Repower with Emission-Certified Engines

Stationary and portable agricultural engines may be repowered with new off-road engines certified to the current applicable off-roa d emission standards. This provision applies to repowers with diesel and spark-ignited ( SI) engines. Diesel engines may be replaced with cleaner diesel or SI engines. SI eng ines may only be replaced with cleaner SI engines; projects replacing SI engines w ith diesel engines are not eligible for Agricultural Assistance Program funding. Cost-effe ctiveness of total reductions

calculations are based on the rebuild cost of the e ngine being replaced.

3. Repower with SI Engines Meeting Local District Requirements

Very few power systems using SI engines for station ary and portable applications have been certified to meet applicable emission standard s. These power systems are typically assembled by third parties and are not re quired to be certified because they are used in stationary applications. Because under certain conditions SI engines can be significantly cleaner than diesel engines, Agric ultural Assistance Program funds may be used to fund purchases of non-certified SI engin es in some cases. This provision is available until January 1, 2008. This will allow A RB and the districts an opportunity to assess the emission performance and durability of n on-certified SI engines in the field.

Emission reduction calculations are based on the re build cost of the engine being replaced.

Non-certified SI engines purchased through the Agri cultural Assistance Program are required to have best available emission control co mponents, and are subject to local7 AGRICULTURAL ASSISTANCE

PROGRAM district source testing and monitoring requirements . The costs associated for testing and monitoring may not be included in the grant awa rd.

C. Retrofit

A retrofit involves modifications to the engine and /or fuel system such that the retrofitted engine does not have the same specifications as the original engine. Retrofit projects that reduce NOx may be applicable to certain diesel or SI engine families. Emission control technologies that have been verified for us e to reduce NOx and PM emissions in other applications for on-road or off-road diesel o r SI engines may be applicable to stationary and portable agricultural engines. A NO x retrofit for an uncontrolled diesel engine must be verified to reduce emissions to the applicable new engine tier standard or less for a given engine size and not increase pa rticulate matter. An emission-certified stationary or portable engine ma y use a retrofit kit that is verified to reduce NOx or NOx + non-methane hydrocarbon (NMHC) emissions by at least 15 percent from the applicable emission standard. Uncontrolled SI engines may use a

retrofit kit verified to reduce emissions to the cu rrently applicable standard for large SI equipment, or if not feasible, with a retrofit k it verified to reduce emissions to at least 3.0 g/bhp-hr. The emission reductions provided by a retrofit kit must meet local district rule requirements. Emission reduction calculations are based on the emission rates of the existing engine being retrofitted.

D. Non-Engine Projects

The Board has directed the Executive Officer to dev elop project criteria for non-engine agricultural sources where technology is available to ensure the emission reductions are real, quantifiable, and enforceable. However, no s pecific project criteria have been identified currently due to the limited data availa ble on specific control technologies. ARB staff will continue to work closely with the di stricts and interested stakeholders to monitor technological developments to determine whe n and if it is it appropriate to develop project criteria for non-engine sources.

Agricultural Assistance Program funding will not be available for non-engine agricultural projects until ARB staff develop Carl Moyer Program project criteria for these sources. Potential control technologies and regulatory optio ns will be evaluated for suitability under Agricultural Assistance Program requirements. During these evaluations, ARB

staff will consider:

• whether the technology provides real, quantifiable , and enforceable emission

reductions.

• the availability of standardized testing procedure s that will quantify emission reductions from these technologies.

• availability of baseline emission factors.

• potential multi-media issues.8 AGRICULTURAL ASSISTANCE

PROGRAM While engines have a statewide certification or ver ification process to prove the emission levels are achieved in practice, there is no comparable statewide process for stationary or area-wide sources. In developing sta tewide project criteria for non-engine technology ARB staff will consider how to assure re ductions are achieved.

If non-engine agricultural projects include reducti ons of non-combustion PM, the criteria will include a weighting factor for non-combustion PM for use in the cost-effectiveness

of total reductions formula.

The following sections provide background on some p otential non-engine agricultural projects.

1. Livestock Operations

Air emissions of concern from livestock include amm onia, nitrous oxide, methane, carbon dioxide, volatile organic compounds (VOC), h ydrogen sulfide, and particulate matter. The emissions can come from animal housing , storage areas for manure and wastewater, cropland where manure is applied, and d irectly from the cows. Livestock emissions are most significant in the San Joaquin V alley and the South Coast Air Basin.

The South Coast Air Quality Management District ado pted Rule 1127 - Emission

Reductions from Livestock Waste in 2004. This rule requires dairies to clear manure from corrals more frequently and send the manure to an emissions-controlled compost facility, an anaerobic digester, or to agricultural land where manure is approved for spreading as fertilizer.

The San Joaquin Valley Unified Air Pollution Contro l District recently adopted a VOC emission factor to be used for permitting San Joaqu in Valley dairies. The District reviewed important classes of VOC constituents and key dairy processes individually before approving a total dairy emission factor of 1 9.3 lbs/year/head. The District will consider regulations to reduce emissions from dairi es in the near future.

With the upcoming SB 700 deadlines for approving la rge CAF mitigation plans, there is a need for a rapid, objective assessment of which t echnologies are most likely to be successful in California’s unique economic, regulat ory, and environmental conditions. The Dairy Manure Technology Feasibility Assessment Panel, created and hosted by the ARB, was convened in February 2005 to carry out thi s work. Members were drawn from government, industry, academia, and environmen tal and conservation groups.

The Panel evaluated technologies for their potentia l to reduce environmental impacts resulting from air emissions and from releases of n utrients, salts, and pathogens to the environment. The Panel is assessing the ability of the technology to prevent releases of contaminants and is considering their efficacy in r educing environmental impacts, energy production (if any), economic performance (i ncluding saleable products produced by the technology), quality of supporting data, and the development status. The Panel’s draft report is scheduled for release i n early 2006.9 AGRICULTURAL ASSISTANCE

PROGRAM In general, potential technologies may be classifie d into categories including:

• Thermal conversion (including combustion and gasif ication).

• Solid-liquid separation (including dehydration).

• Composting.

• Anaerobic digestion.

• Aerators/mixers.

• Nitrification/denitrification.

• Covers.

• Microbials, enzymes, and other additives.

• Feed management.

• Trapping nutrients in biomass (e.g. crops, plants in constructed wetlands, algae, fish).

• Combination systems (such as wastewater treatment plants).

It is likely that no single technology will solve a ll of the problems associated with dairy manure and each dairy will likely require its own u nique combination of technologies to address the specific problems of that area. Resear ch still needs to be done on VOC emissions to quantify amounts emitted from each por tion of the dairy, and reactivity of the chemical species to form ozone. Without this i nformation and a lack of standard testing procedures, it is difficult to assess how v arious technologies will reduce these emissions, reduce ozone formation, and improve air quality.

2. Other Projects

Non-combustion particulate matter reductions can be achieved through the use of chemical dust suppressants, road paving, and harves ting equipment with catch-frame technology to eliminate the need for sweeping. For some of these projects, multimedia impacts must also be considered.

Another potential project is the evaluation of irri gation pump efficiency. Improvement in pump efficiency through parts replacement and repai r has the potential for emission reductions of NOx, ROG, and PM10 by reduced work by the engine or motor for water
output.

V. Project Criteria

The project criteria below have been designed to pr ovide districts and potential applicants with a list of minimum eligibility requi rements for Agricultural Assistance Program funding. Criteria focus on emission reduct ions, cost-effectiveness of total reductions, and the ability for a project to be com pleted within the timeframe of the program. Additional information about funding elec tric motors for irrigation pumps is available in Part II, Chapter 12: Zero Emission Te chnologies of the 2005 Carl Moyer Program Guidelines.10 AGRICULTURAL ASSISTANCE

PROGRAM Participating districts retain the authority to imp ose additional requirements in order to

address local concerns.

A. General

• The Agricultural Assistance Program may be used to fund projects from previously unregulated agricultural sources of air pollution f or a minimum of three years from the adoption of an applicable rule or until the com pliance date, whichever is later. Emission reductions are not required to be surplus.

• Projects must meet a cost-effectiveness of total r eductions of $14,300 per weighed

ton of NOx + ROG + combustion PM10 reduced calculat ed in accordance with the cost-effectiveness of total reductions methodology discussed in this chapter.

• No project funded by the Agricultural Assistance P rogram shall be used for credit under any federal or state emission averaging banki ng and trading program.

• Agricultural Assistance Program grants can be no g reater than a project’s

incremental cost. The incremental cost is the cost of the project minus the baseline cost. The incremental cost shall be reduced by the value of any current financial incentive that reduces the project price, including tax credits or deductions, grants, or other public financial assistance.

• Projects must have a minimum project life of three years. ARB may approve shorter project life on a case-by-case basis. Projects wit h shorter lives may be subject to additional funding restrictions, such as a lower co st-effectiveness of total reductions limit or a project cost cap.

• The contract term must extend to the end of the pr oject life.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the air district suggests potential real, quantifiable, and enforceable emission reduction be nefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on a case-by-case basis. Al l projects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• An engine must be rated at greater than 25 hp, whi ch is equivalent to an electric motor greater than 19 kW.

• Projects must operate at least 75 percent of total equipment hours in California.

• The default project life when determining project benefits for new purchases or repowers shall be ten years for electric motors. T he default project life for engines without documentation shall be seven years. A long er project life may be used with11 AGRICULTURAL ASSISTANCE

PROGRAM approval by ARB staff, however, sufficient document ation must be provided to ARB that supports the selected project life based on th e actual remaining useful life.

B. New Purchase

• Engine purchases for new 2005 or later model year agricultural stationary or portable equipment can only be electric motors.

C. Repower

• A repower of an uncontrolled or emission certified (1996+ model year) diesel engine must be with one of the following:

− A new electric motor.

− A new off-road diesel engine certified to the curr ent applicable emission

standards.

− A new off-road spark-ignited (SI) engine certified to the current applicable

emission standards.

− A new SI engine that meets or exceeds local distri ct emission requirements and is subject to and complies with local district perm itting, monitoring, record keeping and reporting requirements. This criterion will sunset on January 1, 2008.

• A repower of an uncontrolled SI engine must be wit h one of the following:

− A new electric motor.

− A new off-road SI engine certified to the current applicable emission standards.

− A new SI engine that meets or exceeds local distri ct emission requirements and is subject to and complies with local district perm itting, monitoring, record keeping and reporting requirements. This criterion will sunset on January 1, 2008.

• A repower of an emissions-controlled SI engine mus t be with one of the following:

− A new electric motor.

− A new off-road SI engine certified to the current applicable emission standards.

− A new SI engine that meets or exceeds local distri ct emission requirements and is subject to and complies with local district perm itting, monitoring, record keeping and reporting requirements, provided that t he new engine provides a

NOx emission reduction of at least 15% from the bas eline engine NOx emissions. This criterion will sunset on January 1 , 2008.

• Electric motors may replace diesel or SI engines. The applicant must have documentation of payment to the local utility compa ny for power installation. This requirement of documentation also applies to new in stallations.

• Off-road diesel engines must be certified for sale in California and must comply with durability and warranty requirements.12 AGRICULTURAL ASSISTANCE

PROGRAM • The use of a non-certified SI engine shall be subj ect to approval by ARB staff. Emissions testing of a non-certified SI engine shal l be conducted using an ARB-approved source testing procedure, such as ARB Test Method 100.

• Non-certified SI engines shall be required to incl ude currently available emission control components such as closed-loop fuel control systems, and three-way catalysts.

• Non-certified SI engines shall be subject to sourc e testing with an ARB-approved testing procedure following local district requirem ents.

• Non-certified SI engines shall be subject to NOx a nd hydrocarbon emission readings using a portable analyzer following local district monitoring requirements.

• The costs associated with source testing and monit oring requirements for non-certified SI engines are not eligible for fundi ng.

D. Retrofit

• A retrofit of an uncontrolled diesel engine that r educes NOx must be with a retrofit kit

that is verified to reduce NOx or NOx+NMHC emission s to the applicable new engine Tier standard or less for a given engine siz e.

• A retrofit of an uncontrolled SI engine that reduc es NOx must be with a retrofit kit

that is verified to reduce NOx+NMHC emissions to th e currently applicable standard for off-road large spark-ignited equipment. If thi s is not feasible, the project must reduce NOx+NMHC emissions to at least 3.0 g/bhp-hr or less.

• A retrofit of an emission-certified (1996+ model y ear) off-road diesel engine that

reduces NOx must be with a retrofit kit that is ver ified to reduce NOx or NOx+NMHC emissions by at least 15 percent from the applicabl e NOx or NOx+NMHC emission

standard.

• Reduced-emission retrofit kits must be verified fo llowing California test procedures and must comply with durability and warranty requir ements.

E. Scrap

• The existing (old) engine must be destroyed and re ndered useless. Engines must have a complete and fully visible and legible engin e serial number in order to be eligible for an engine repower. The destruction of the engine must be documented by district staff seeing the destroyed engine or th e receipt from a qualified vehicle salvage yard (see 2005 Carl Moyer Program Guideline s, Part II, Chapter 2: Fleet Modernization, Salvage Requirements for definition ) . Engines without a visible and legible serial number may be repowered if district staff stamp the engine block with the Agricultural Assistance Program project number and district staff is present to13 AGRICULTURAL ASSISTANCE

PROGRAM personally verify engine removal from the project v ehicle or equipment and the subsequent engine destruction. ARB staff will cons ider alternatives to stamping the engine block on a district-by-district basis.

VI. Cost-Effectiveness of Total Reductions

Projects funded through the Agricultural Assistance Program are not required to achieve surplus emission reductions. The cost-effectivenes s calculations used in the Carl Moyer Program are not appropriate for evaluati ng Agricultural Assistance Program projects because those calculations are based on su rplus emission reductions.

In order to ensure that the technologies and costs of projects funded by the Agricultural Assistance Program are generally comparable to thos e funded by the Carl Moyer Program, ARB staff require Agricultural Assistance Program projects to

meet a “cost-effectiveness of total reductions” cri terion. The cost-effectiveness of total reductions is determined by subtracting the emissio ns of the new engine from the emissions of the old engine. Districts may set mor e restrictive cost-effectiveness of total reductions limits when implementing local programs.

The cost-effectiveness of total reductions is the a nnualized cost divided by the emission reductions as if no regulatory requirement existed:

Annualized Cost ($/year)
Weighted Emission Reductions if no Regulatory Requi rement Existed (tons/yr)

For example, the cost-effectiveness of total reduct ions calculations for an agricultural irrigation pump engine would generally assume a pro ject life of seven years, even if a local rule for agricultural use engines takes effec t in two years.

The cost-effectiveness of total reductions cannot b e compared to the cost-effectiveness of Carl Moyer Program-eligible projects because it includes the total emission reductions associated with a project instead of onl y the surplus emission reductions.

As described in the 2005 Carl Moyer Program Guideli nes, the weighted total emission reductions are estimated by taking the sum of the p roject’s annual emission reductions of NOx, ROG, and combustion PM using the following formula:

Weighted Total Emission Reductions = NOx reductions (tons/yr) + ROG reductions (tons/yr) + 20*[combustion PM reduct ions (tons/yr)]

NOx and ROG emissions are given equal weight; combu stion PM is given a greater weighting due to the higher cost of reducing PM emi ssions.

The annual emission reductions for each pollutant ( NOx, ROG, and combustion PM) are determined by calculating the annual emissions for the baseline technology, and then14 AGRICULTURAL ASSISTANCE

PROGRAM subtracting from it the annual emissions of the red uced technology. Annual emissions may be calculated based on hours of operation or fu el consumption.

Annual Emissions Based on Hours of Operation = Emission Standard (g/bhp-hr) * Engine Horsepower * Load Factor * Activity (hrs/y r) * ton/907,200 g

Annual Emissions Based on Fuel Consumption = Emission Standard (g/bhp-hr) * Energy Consumption Factor (bhp-hr/gal) * Activity ( gal/yr) * ton/907,200 g

The engine load factor is an indicator of the nomin al amount of work done by the engine for a particular application. It is given as a fra ction of the rated horsepower of the engine and varies with engine application. For pr ojects in which the horsepower of the baseline technology and reduced technology differ b y more than 25 percent, the load factor must be adjusted using the following formula :

Replacement Load Factor = Load Factor baseline * hp baseline /hp reduced

It is important to understand the replacement load factor must never exceed 100 percent in cases where the reduced technology e ngine is significantly smaller than the baseline technology engine.

The emission standards and load factors for off-roa d diesel engines and large SI engines in Appendix B of the 2005 Carl Moyer Pro gram Guidelines may be used for these calculations. The default energy consumption factor for a stationary agricultural irrigation pump engine greater than 50 hp is 17.56 bhp-hr/gal.

Annualized cost is the amortization of the one-time incentive grant amount for the life of the project to yield an estimated annual cost. The annualized cost is calculated by multiplying the incremental cost by the capital rec overy factor (CRF).

Annualized cost ($) = CRF * incremental cost

The CRF is the level of earnings reasonably expected by invest ing state funds in various financial instruments over the length of an Agricultural Assistance Program project. The CRF uses an interest rate and project life to determine the rate at which earnings could reasonably be expected if the same f unds were invested over a length of time equaling the project life. The CRF is calcula ted following formula:

Capitol Recovery Factor (CRF) = [(1 + i) n (i)] / [(1 + i) n - 1]

Where

i = discount rate (4%) n = project life (at least 3 years, see project cri teria for default maximums)

The discount rate of 4 percent reflects the prevail ing earning potential for state funds that could reasonably be expected by investing stat e funds in various financial15 AGRICULTURAL ASSISTANCE

PROGRAM instruments over the length of the minimum project life of Agricultural Assistance Program projects

Table B-1 in Appendix B of the 2005 Carl Moyer Prog ram Guidelines lists the CRF for various project lives using a discount rate of 4 pe rcent.

The incremental cost of a project is calculated by subtracting the cost of the baseline technology from the cost of the reduced technology.

Incremental Cost ($) = Cost of Reduced Technology – Cost of Baselin e Technology

Generally, the cost of the baseline technology for a new purchase is the price of a new piece of equipment meeting the current emission sta ndards. The cost of the baseline technology for a repower is the cost of rebuilding the existing engine.

An example of calculating the cost-effectiveness of total reductions is provided below. In this example, a district regulation requires tha t uncontrolled stationary engines used in agricultural operations must be retired from ser vice by January 1, 2008. The project cannot meet the three year surplus emission reducti ons requirement for the Carl Moyer Program, but is eligible for funding through the Ag ricultural Assistance Program.

Example: Engine Repower (diesel to diesel) Based on Hours

Baseline Technology information:

• Baseline Technology (application): 1990 John Deer e C 8.3P

• Engine horsepower (application): 285 hp

• Activity (application): 3,000 hours per year

• Load factor (default): 0.65

• Emission Factors: 7.60 g/bhp-hr NOx; 0.82 g/bhp-h r ROG; 0.274 g/bhp-hr PM10

• Baseline rebuild cost (quote provided with applica tion): $4,000

Reduced Technology information:

• Reduced Technology (application): 2005 John Deere 6081HF70-275

• Engine horsepower (application): 275 hp

• Activity (application): 3,000 hr/yr

• Load factor (calculated): 0.65 * (285 hp/275 hp) = 0.67

• Emission Factors: 4.15 g/bhp-hr NOx; 0.12 g/bhp-h r ROG; 0.088 g/bhp-hr PM10

• New engine cost (quote provided with application): $22,500

Emission Reduction Calculations: Annual NOx baseline technology emissions (7.60 g/bhp-hr * 285 hp * 0.65 * 3,000 hrs)(ton/907 ,200 g) = 4.65 tons/yr NOx Annual NOx reduced technology emissions (4.15 g/bhp-hr * 275 hp * 0.67 * 3,000 hrs)(ton/907 ,200 g) = 2.53 tons/yr NOx16 AGRICULTURAL ASSISTANCE

PROGRAM Annual ROG baseline technology emissions (0.82 g/bhp-hr * 285 hp * 0.65 * 3,000 hrs)(ton/907 ,200 g) = 0.50 tons/yr ROG Annual ROG reduced technology emissions (0.12 g/bhp-hr * 275 hp * 0.67 * 3,000 hrs)(ton/907 ,200 g) = 0.07 tons/yr ROG Annual Combustion PM baseline technology emissions (0.274 g/bhp-hr * 285 hp * 0.65 * 3,000 hrs)(ton/90 7,200 g) = 0.168 tons/yr PM10 Annual Combustion PM reduced technology emissions (0.088 g/bhp-hr * 275 hp * 0.67 * 3,000 hrs)(ton/90 7,200 g) = 0.054 tons/yr PM10

• NOx emission benefits = 4.65 tons/yr – 2.53 tons/ yr = 2.12 tons/yr NOx

• ROG emission benefits = 0.50 tons/yr – 0.07 tons/y r = 0.43 tons/yr ROG

• PM10 emission benefits = 0.168 tons/yr – 0.054 ton s/yr = 0.114 tons/yr PM10

Weighted Total Emission Reductions = 2.12 tons/yr + 0.43 tons/yr + 20(0.114 tons/yr) = 4.83 weighted tons/yr

Project life: 7 years; CRF = 0.167

Incremental Cost = $22,500 - $4,000 = $18,500

Annualized Cost = 0.167 * $18,500 = $3,090/yr

Cost-Effectiveness of Total Reductions: ($/yr)/( weighted tons/yr) = ($3,090)/(4.83 weighte d tons/yr)

= $640/ton of weighted emissions reduced

The cost-effectiveness for this project is less tha n $14,300 per weighted ton of total emissions reduced. This project qualifies for the maximum amount of grant funds requested.

VII. Minimum Project Requirements

A. Application

The minimum application information for stationary and portable agricultural engine projects is in Table 2. Districts may request addi tional information from the applicant.

A disclosure must also be included stating that onc e an applicant submits an application for a specific engine to one district or ARB as par t of a multi-district solicitation, the owner shall not submit an application to any other source of funds, including, but not limited to, other districts or ARB for the same eng ine. Any applicant who is found to have submitted multiple applications for the same e ngine will, at a minimum, be disqualified from funding for that engine from all sources and may also be banned from submitting future applications to any and all Agric ultural Assistance Program and Carl Moyer Program solicitations.17 AGRICULTURAL ASSISTANCE

PROGRAM Table 2 Minimum Application Information for Stationary and Portable

Agricultural Engine Projects Agricultural Assistance Program

Applicant Information Organization, Company or Individual Name

Street Address City, County, State, Zip Code Primary Contact Name Primary Contact Phone Number Person with Contract Signing Authority Person who Filled Out Funding Application Project Address (if different from above)

Equipment Information Equipment Type (portable, stationary, other) Equipment Make Equipment Model Equipment Year Equipment Serial Number Baseline Equipment Fuel New Equipment Vendor (optional)

Activity Information Will the new engine have a functioning hour meter for the life of the project? Annual Hours of Operation or Annual Gallons of Fuel Consumption Percent Operation in California Percent Operation in District Project Life

Electronic Monitoring Unit (EMU) Will a new eligible EMU be installed as part of this project? (yes/no)

EMU Make

EMU Model

EMU Model Year

EMU ID Number EMU Cost (optional) ADDITIONAL INFORMATION –

NEW PURCHASE PROJECTS ONLY

New Electric Motor Make

New Electric Motor Model

New Electric Motor Serial Number New Electric Motor Family

New Electric Motor Year New Electric Horsepower (converted from kilowatts) Projected Year of Purchase of New Equipment

Baseline Cost New Reduced Emission Equipment Cost New Electric Motor Vendor (optional)

ADDITIONAL INFORMATION –

REPOWER PROJECTS ONLY Existing and Newer Engine/Motor Make Existing and Newer Engine/Motor Model Existing and Newer Engine/Motor Year Existing and Newer Engine/Motor Serial Number (if available) Existing and Newer Engine/Motor Fuel Type Existing and Newer Engine/Motor Horsepower Existing and Newer Engine/Motor Tier Existing and Newer Engine/Motor Family Is this project participating in the PG&E AG-ICE or the SCE TOU-PA-ICE Incentive Programs? Is this project engine a currently covered by a Moy er Program contract? Engine Rebuild Cost New Reduced Emission Equipment Cost New Engine Vendor (optional) New Engine Installer (optional)

ADDITIONAL INFORMATION –

RETROFIT PROJECTS ONLY

ARB-Verified Retrofit Device

Retrofit Device Serial Number ARB-Verified NOx Reduction (%) ARB-Verified PM Reduction (%) ARB-Verified ROG Reduction (%)

Retrofit Device Executive Order Verification Level (Level 1,2 or 3)

Retrofit Device Cost Cost of Retrofit Installation (optional) Cost of Retrofit Maintenance for Life of Project (o ptional)18 AGRICULTURAL ASSISTANCE

PROGRAM Third party applications are not allowed. The equi pment owner must sign and agree to the application. However, a third party (e.g. engi ne dealer or distributor) may complete an application or part of an application on an owne r’s behalf. Applications must include a signature section for third parties. The third p arty signature section must include signature and date lines, and blanks for the third party to list how much they are being paid, if anything, to complete the application and what source of funds are being used to pay them. Districts are encouraged to provide tech nical assistance to applicants in completing the application.

B. Reporting and Monitoring

Owners of stationary and portable agricultural engi nes participating in the Agricultural Assistance Program are required to kee p appropriate records for the life of the project and for three years after the project l ife is completed. The district has the authority to conduct periodic checks or solicit ope rating records from the recipient of Agricultural Assistance Program funds. This is to ensure that the engine is being operated as stated in the project application. The recipient must maintain and update operating records throughout the project life and h ave them available to the district upon request. Annual records must contain, at a minimum , total actual hours of operations or

estimated amount of fuel used from actual fuel rece ipts. Actual hours of operations are acceptable for an engine equipped with a non-reset hour meter.

Monitoring may be required to comply with district requirements and to ensure the program incentives are being applied toward the pro ject as specified in the application. To ease the tracking of the equipment over the life of the project, a district registration certificate may be issued to the equipment owner.

Districts providing Agricultural Assistance Program incentive funds must maintain separate record for projects funded through the Car l Moyer Program and the Agricultural Assistance Program.

VIII. References

ARB, 2003. Air Resources Board. Staff Report: In itial Statement of Reasons, Airborne Toxic Control Measure for Stationary Compression Ig nition Engines. http://www.arb.ca.gov/regact/statde/isor.pdf

ARB, 2004. Air Resources Board. Staff Report: In itial Statement of Reasons, Airborne

Toxic Control Measure for Diesel-fueled Portable En gines. http://www.arb.ca.gov/regact/porteng/isor.pdf

ARB 2005a. Air Resources Board. Staff Report: In itial Statement of Reasons for Proposed Revisions to the Airborne Toxic Control Me asure for Stationary Compression Ignition Engines. http://www.arb.ca.gov/regact/statde05/isor.pdf19 AGRICULTURAL ASSISTANCE

PROGRAM ARB, 2005b. Air Resources Board. Staff Report: I nitial Statement of Reasons, Public Hearing to Consider the Large Confined Animal Facil ity Definition. http://www.arb.ca.gov/regact/lcaf05/isor.pdf

ARB 2005c. Air Resources Board. The Carl Moyer Me morial Air Quality Standards Attainment Program Guidelines, Revision 2005.

CASS 2003. California Agricultural Statistics Serv ice. California Agricultural Statistics, 2003. California Agricultural Overview. http://www.nass.usda.gov/ca/bul/agstat/indexcas.htm

# THE CARL MOYER PROGRAM GUIDELINES

PART IV



# APPENDICES

Approved

November 17, 2005TABLE OF CONTENTS

Appendix A – Acronyms

Appendix B – Tables for Emission Reduction and Cost -Effectiveness Calculations

Appendix C – Cost-Effectiveness Calculation Methodo logy

Appendix D – Example Calculations

Appendix E – Description of Certification and Verif ication Executive Orders

Appendix F – Retrofit Emission Control Strategies

Appendix G – Description of Functional Equivalency of Non-Original Equipment

Manufacturer Repowers and Rebuilt Engines for use i n Repowers

## APPENDIX A

ACRONYMSA-1 ACRONYMS APPENDIX A

ACRONYMS

AAP Agricultural Assistance Program AB Assembly Bill ABT Average Banking and Trading AC Alternating Current

AECP Alternative Emission Control Plan AESS Automatic Engine Start-Stop Ah Amp-hour

APCD Air Pollution Control District

APCO Air Pollution Control Officer APU Auxiliary Power Unit AQMD Air Quality Management District

ARB California Air Resources Board

ASM Acceleration Simulation Mode

ATCM Airborne Toxic Control Measure

ATE Advanced Travel Center Electrification

AVL Automatic Vehicle Locator BACT Best Available Control Technology BAR Bureau of Automotive Repair bhp Brake Horsepower BNSF Burlington Northern and Santa Fe Railroad

BTU British Thermal Unit

C/E Cost Effectiveness CAF Confined Animal Facility CCR California Code of Regulations CI Compression Ignition CNG Compressed Natural Gas

CO Carbon Monoxide

COG Council of Governments CRF Capital Recovery Factor

DC Direct Current DDHS Diesel Driven Heating System DECS Diesel Emission Control Strategy DMV Department of Motor Vehicles DOC Diesel Oxidation Catalyst DOE Department of Energy

DPF Diesel Particulate Filter E/S Electric Standby ECF Energy Consumption Factor ECF Energy Consumption Factor

EF Emission Factor

EGR Exhaust Gas RecirculationA-2 ACRONYMS

EMFAC ARB’s On-Road Motor Vehicle Emission Inventor y Model EMU Electronic Monitoring Unit

EO Executive Order EQIP Environmental Quality Incentives Program

ERCs Emission Reduction Credits

ES Emission Standards FBC Fuel-Borne Catalyst

FCF Fuel Correction Factor FEL Family Emission Limit

FTA Federal Transit Administration FTF Flow-Through Filter

FY Fiscal Year

g gram g/bhp-hr gram per brake horsepower-hour gal Gallon GPS Geographic Positioning System GSE Ground Support Equipment GTL Gas-to-Liquid GVWR Gross Vehicle Weight Rating HC Hydrocarbons HD Heavy-Duty HDDE Heavy-Duty Diesel Engine HDT Heavy-Duty Truck HDV Heavy-Duty Vehicle HEB Hybrid-Electric Bus HHDV Heavy Heavy-Duty Vehicle hp Horsepower

hr Hour HSC California Health and Safety Code HVAC Heating, Ventilation and Air Conditioning

IC Internal Combustion ICE Internal Combustion Engine ILD Idle Limiting Device IMO International Maritime Organization IPI Team Incentive Program Implementation Team

IRS Internal Revenue Service ISO International Standards Organization

kW Kilowatt

lbs Pounds LETRU Low Emission Transport Refrigeration Unit

LF Load Factor LHD Light Heavy-Duty LNG Liquefied Natural Gas LPG Liquefied Propane Gas LSI Large Spark Ignited

MDO Marine Diesel OilA-3 ACRONYMS

MGO Marine Gas Oil MHDV Medium Heavy-Duty Vehicle

mi Mile MOA Memorandum of Agreement MOU Memorandum of Understanding MV Fee Motor Vehicle Registration Fee

MY Model Year NADA National Automotive Dealership Association NMHC Non-Methane Hydrocarbons

NOFA Notice of Funds Available NOx Oxides of Nitrogen OBD II On-Road Diagnostics, Phase II OEM Original Equipment Manufacturer PAH Polycyclic Aromatic Hydrocarbons PEM Proton Exchange Membrane

PG&E Pacific Gas and Electric

PM Particulate Matter

PM10 Inhalable Particulate Matter RFP Request for Proposals ROG Reactive Organic Gas RSD Remote Sensing Device

SB Senate Bill

SCAB South Coast Air Basin SCAQMD South Coast Air Quality Management District

SCE Southern California Edison SCR Selective Catalytic Reduction SIP State Implementation Plan SMAQMD Sacramento Metropolitan Air Quality Manageme nt District SOF Soluble Organic Fraction

SOFC Solid Oxide Fuel Cell SOP Statement of Principles SORE Small Off Road Engine STB Surface Transportation Board

STD Standard SULEV Super Ultra Low Emission Vehicle SUV Sport-Utility Vehicle

SWCV Solid Waste Collection Vehicle

TAC Toxic Air Contaminant

TFV Transit Fleet Vehicle THC Total Hydrocarbon TIP Transportation Implementation Plan tpd Tons Per Day TRU Transport Refrigeration Unit TSE Truck Stop Electrification U.S. EPA U.S. Environmental Protection Agency

UB Urban BusA-4 ACRONYMS

ULETRU Ultra Low Emission Transport Refrigeration Unit

ULEV Ultra Low Emission Vehicle

UP Union Pacific Railroad

V Volt VAVR Voluntary Accelerated Vehicle Retirement

VIN Vehicle Identification Number

VMT Vehicle Miles Traveled VOC Volatile Organic Compound VVR Voluntary Vehicle Repair yr Year

ZEB Zero Emission Bus

## APPENDIX B

TABLES FOR EMISSION REDUCTION AND

COST-EFFECTIVENESS CALCULATIONSB-1 EMISSION REDUCTION TABLES APPENDIX B

TABLES FOR EMISSION REDUCTION AND

COST-EFFECTIVENESS CALCULATIONS

This appendix presents tables summarizing the data needed to calculate the emission reductions and cost-effectiveness of potential proj ects. Included are data such as engine emission factors, load factors, and other co nversion factors used in the calculations discussed in Appendix C: Cost-Effecti veness Calculation Methodology and Appendix D: Example Calculations.

The emission factors in the tables reflect prelimin ary data on emission rates developed by ARB staff as part of a comprehensive effort to u pdate the emissions models used for

on-road motor vehicles and off-road mobile sources. These draft data were made available on ARB's website in early 2005, but are s ubject to change as staff completes its analyses and the associated model development. ARB staff will issue Carl Moyer Program Advisories to update the tables as necessary.B-2 EMISSION REDUCTION TABLES

CRF FOR ALL PROJECTS

Table B-1

HEAVY-DUTY ON-ROAD VEHICLES

Tables B-2 – B-8

HEAVY-DUTY TRUCK IDLE REDUCTION

Tables B-9 – B-10

TRANSPORT REFRIGERATION UNITS

Table B-11

OFF-ROAD EQUIPMENT AND

STATIONARY AND PORTABLE AGRICULTURAL ENGINES

Tables B-12 – B-13

LARGE SPARK IGNITION ENGINES

Table B-14

AIRPORT GROUND SUPPORT EQUIPMENT

Table B-15

LOCOMOTIVES

Tables B-16 – B-17

MARINE VESSELS

Tables B-18 – B-23

LIGHT-DUTY VEHICLES

Table B-21

REFERENCE

Tables B-25 – B-28B-3 EMISSION REDUCTION TABLES 

### ALL PROJECTS

Table B-1 Capital Recovery Factors (CRF) for Various Project Life

At Four Percent Discount Rate

Project Life CRF

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20 0.360

0.275

0.225

0.191

0.167

0.149

0.134

0.123

0.114

0.107

0.100

0.095

0.090

0.086

0.082

0.079

0.076

0.074B-4 EMISSION REDUCTION TABLES 

### HEAVY-DUTY ON-ROAD VEHICLES

Table B-2 Heavy-Duty Engines 2004-2006

Converted Emission Standards

(g/bhp-hr)

a – 2004-2006 emission standard for all on-road hea vy duty engines except diesel urban buses. b – 2004-2006 optional emission standards for all o n-road heavy duty engines except diesel

urban buses.

c – 2004-2006 emission standard for all on-road hea vy duty engines except urban buses.

d – 2004-2006 emission standard for all urban buses

. e - Emission standards were converted where appropr iate, using the NMHC and NOx fraction

default values and the ultra low-sulfur diesel fuel correction factors listed in Appendix B, Tables B-22 and B-24, respectively

Table B-3

Heavy-Duty Alternative Fuel Engines

Converted Emission Standards

(g/bhp-hr)

Model Year NOx PM10

1988 – 1989 6.0 0.60

1990 6.0 0.60

1991 – 1993 5.0 0.25

1994 – 1997 5.0 0.10 1998 - September 2002 4.0 0.10

October 2002 – 2006 2.0 0.10

2007 1.2 0.01

2010 0.2 0.01 EO

Certification

Level Converted Emission Standards

NOx + NMHC Diesel NOx (e) Diesel ROG (e) Alternative

Fuel NOx

2.5 (a) 2.21 0.12 2.00

1.8 (b) 1.59 0.09 1.44

1.5 (b) 1.33 0.07 1.20

1.2 (b) 1.06 0.06 0.96

0.9 (b) 0.80 0.04 0.72

0.6 (b) 0.53 0.03 0.48

0.3 (b) 0.27 0.01 0.24

PM10 Diesel PM10 Alternative

Fuel PM10

0.10 (c) 0.072 0.100

0.03 (b) 0.022 0.030

0.02 (b) 0.014 0.020

0.01 (b,d) 0.007 0.010B-5 EMISSION REDUCTION TABLES Table B-4 Medium Heavy-Duty Vehicles 14,001-33,000 lbs GVWR NOx, ROG, and PM10 Emission Factors

(g/mile) (a)

Model Year NOx ROG PM10

Pre-1984

1984 – 1986

1987 – 1990

1991 – 1993

1994 – 1997

1998 – 2002

2003+

2004 – 2006

2007+ 17.21

16.65

14.60

12.18

10.70

9.77

5.39

5.12

0.51 0.29

0.29

0.18

0.16

0.10

0.08

0.08

0.08

0.02 0.792

0.720

0.504

0.288

0.216

0.144

0.216

0.216

0.024
a - Emission factors were converted using the ultra low-sulfur diesel fuel correction

factors listed in table B-24.

Table B-5 Diesel Heavy Heavy-Duty Vehicles 33,000+ lbs GVWR NOx, ROG, and PM10 Emission Factors

(g/mile) (a)

Model Year NOx ROG PM10

Pre-1987

1987 – 1990

1991 – 1993

1994 – 1997

1998 – 2002

2003 – 2006

2007 – 2009

2010+ 21.39

21.11

18.23

17.95

17.58

11.63

6.36

1.06 1.04

0.81

0.54

0.40

0.51

0.26

0.23

0.18 1.249

1.354

0.562

0.367

0.403

0.252

0.028

0.028
a - Emission factors were converted using the ultra low-sulfur diesel fuel correction

factors listed in table B-24.B-6 EMISSION REDUCTION TABLES Table B-6

Diesel Urban Buses NOx, ROG, and PM10 Converted Emission Standards (g/bhp-hr)

Model Year NOx ROG PM10

1987 – 1990 (a)

1991 – 1993 (a)

1994 – 1995 (a)

1996 – 2002 (a)

2003 (a,b)

2004 – 2006 (c)

2007 – 2009

2010 5.58

4.65

4.65

3.72

2.21

- 1.20

0.20 1.17

1.17

1.17

1.17

0.12

- 0.19

0.19 0.432

0.072

0.050

0.036

0.007

- 0.010

0.010
a - Emission standards were converted where appropr iate, using the NMHC and NOx

fraction default values and the ultra low-sulfur diesel fuel correction factors listed in Appendix B, Tables B-22 and B-24, respectively.

b - NOx+NMHC emission standard converted to NOx and ROG. c - As of the date of publication, no diesel buses have been certified to the 0.5 g/bhp-hr 2004-2006 model year emission standard.

Table B-7

Natural Gas Urban Buses

NOx and PM10 Converted Emission Standards

(g/bhp-hr)

Model Year NOx PM10

1991 – 1993

1994 – 1995

1996 – 1997

1998 – 2002 (b)

2003 – 2006 (a,b,c)

2007 – 2009

2010+ 5.00

5.00

4.00

2.50

1.44

1.20

0.20 0.100

0.070

0.050

0.050

0.020

0.010

0.010

a - NOx+NMHC emission standard converted to NOx onl y. b - A majority of the natural gas urban buses have been certified to the optional standards. Therefore, these values are based on th e optional standards. c - Many natural gas urban buses have been certifie d to optional standards below this

level.B-7 EMISSION REDUCTION TABLES Table B-8 Conversion Factors for NOx, ROG and PM10 Heavy-Duty Vehicle Projects (bhp-hr/mile)

Model Year Medium HeavyDuty 14,001-33,000 lbs. Heavy HeavyDuty 33,000 lbs. + Urban Bus

33,000 lbs.

+
Pre-1978 2.3 2.9 4.3

1978 – 1981 2.3 2.8 4.3

1982 – 1983 2.3 2.8 4.3

1984 – 1990 2.3 2.7 4.3

1991 – 1995 2.3 2.7 4.3

1996+ 2.3 2.6 a 4.3
a - 2.6 bhp-hr/mile is for all heavy-duty line haul trucks (class 8).B-8 EMISSION REDUCTION TABLES 

### HEAVY-DUTY TRUCK IDLE REDUCTION

Table B-9 Heavy Heavy-Duty Vehicle Idling Emission Factors* (g/hr)

Model Year NOx ROG PM10

Pre-1975 54.50 186.85 25.30

1975 – 1976 63.45 164.42 21.05

1977 – 1979 74.65 139.65 16.70

1980 – 1983 90.35 111.32 12.11

1984 – 1986 106.00 88.29 8.77

1987 – 1989 121.50 70.42 6.34

1991 – 1993 120.50 65.61 6.11

1994 – 1997 136.00 52.26 4.43

1998 164.50 37.77 2.62

1999 – 2002 171.00 34.28 2.28

2003 187.00 27.24 1.65

2004 – 2006 191.50 25.56 1.50

2007 – 2009 191.50 25.56 0.83

2010+ 191.50 25.56 0.15
*Factors are for truck idling at a RPM >800

Table B-10 Emission Factors for Small Off-Road Diesel Engines

(g/bhp-hr) (a)

Horsepower Model Year NOx ROG PM10

< 11 Pre-1995 9.30 1.26 0.720

< 11 1995 – 1999 8.70 0.88 0.410

< 11 2000 – 2004 5.76 0.57 0.376

< 11 2005 – 2007 4.14 0.41 0.304

< 11 2008 – 2020 4.14 0.41 0.152

11 – <25 Pre-1995 6.44 1.54 0.550

11 – <25 1995 – 1999 6.44 0.75 0.413

11 – <25 2000 – 2004 5.49 0.54 0.306

11 – <25 2005 – 2007 4.33 0.43 0.306

11 – <25 2008 – 2020 4.33 0.43 0.152
a - Emission factors were converted using the ultra low-sulfur diesel fuel correction factors listed in

table B-25.B-9 EMISSION REDUCTION TABLES 

### TRANSPORT REFRIGERATION UNITS

Table B-11 TRU Engine Load Factors (Default Values)

Horsepower Load Factor

<25 0.64

25 – 50 0.53B-10 EMISSION REDUCTION TABLES 

### OFF-ROAD EQUIPMENT

AND
STATIONARY AND PORTABLE AGRICULTURAL ENGINES

Table B-12

Emission Factors for Off-Road Diesel Engines (g/bhp-hr) (a)

Horsepower Tier NOx ROG PM10
25 – 49 Uncontrolled pre-1988 6.51 2.21 0.547

Uncontrolled 1988 + 6.42 2.17 0.547

1 5.26 1.74 0.480

2 4.63 0.29 0.280

4 Interim 4.55 0.12 0.128

4 Final 2.75 0.12 0.008 50 – 74 Uncontrolled pre-1988 12.09 1.73 0.605

Uncontrolled 1988+ 8.14 1.19 0.497

1 6.54 1.19 0.552

2 4.75 0.23 0.192

3 2.74 0.12 0.192

4 Interim 2.74 0.12 0.064

4 Final 2.74 0.12 0.008 75 – 99 Uncontrolled pre-1988 12.09 1.73 0.605

Uncontrolled 1988+ 8.14 1.19 0.497

1 6.54 1.19 0.552

2 4.75 0.23 0.192

3 2.74 0.12 0.192

4 Interim 2.15 0.11 0.008

4 Final 0.26 0.06 0.008 100 – 174 Uncontrolled pre-1970 13.02 1.59 0.554

Uncontrolled 1970 – 1971 12.09 1.32 0.475

Uncontrolled 1972 – 1979 11.16 1.20 0.396

Uncontrolled 1980 – 1984 10.23 1.13 0.396

Uncontrolled 1985 – 1987 10.23 1.06 0.396 Uncontrolled post-1987 7.60 0.82 0.274

1 6.54 0.82 0.304

2 4.17 0.19 0.128

3 2.32 0.12 0.112

4 Interim 2.15 0.11 0.008

4 Final 0.26 0.06 0.008 175 – 299 Uncontrolled pre-1970 13.02 1.52 0.554

Uncontrolled 1970 – 1971 12.09 1.26 0.475

Uncontrolled 1972 – 1979 11.16 1.14 0.396

Uncontrolled 1980 – 1984 10.23 1.08 0.396B-11 EMISSION REDUCTION TABLES a - Emission factors were converted using the ultra low-sulfur diesel fuel correction factors

listed in table B-25. Horsepower Tier NOX ROG PM10

Uncontrolled 1985 – 1987 10.23 1.01 0.396
Uncontrolled post-1987 7.60 0.82 0.274

1 5.93 0.38 0.120

2 4.15 0.12 0.088

3 2.32 0.12 0.088

4 Interim 1.29 0.08 0.008

4 Final 0.26 0.06 0.008 300 – 750 Uncontrolled pre- 1970 13.02 1.52 0.533

Uncontrolled 1970 – 1971 12.09 1.26 0.454

Uncontrolled 1972 – 1979 11.16 1.14 0.382

Uncontrolled 1980 – 1984 10.23 1.08 0.382

Uncontrolled 1985 – 1987 10.23 1.01 0.382 Uncontrolled post- 1987 7.60 0.82 0.274

1 5.93 0.38 0.120

2 3.79 0.12 0.088

3 2.32 0.12 0.088

4 Interim 1.29 0.08 0.008

4 Final 0.26 0.06 0.008 >750 Uncontrolled pre- 1970 13.02 1.52 0.533

Uncontrolled 1970 – 1971 12.09 1.26 0.454

Uncontrolled 1972 – 1979 11.16 1.14 0.382

Uncontrolled 1980 – 1984 10.23 1.08 0.382

Uncontrolled 1985 – 1987 10.23 1.01 0.382 Uncontrolled post- 1987 7.60 0.82 0.274

1 5.93 0.38 0.120

2 3.87 0.12 0.088

4 Interim 2.24 0.12 0.048

4 Final 2.24 0.06 0.016B-12 EMISSION REDUCTION TABLES Table B-13 Default Load Factors for Off-Road Heavy-Duty Diesel Engines

Category Equipment Type Load Factor
Agriculture Agricultural Mowers 0.43

Agricultural Tractors 0.70

Balers 0.58

Combines 0.70 Hydro Power Units 0.48 Sprayers 0.50

Swathers 0.55

Tillers 0.78 Other Agricultural Equipment 0.51

Construction Cranes 0.43

Crawler Tractors 0.64 Crushing/Processing 0.78

Excavators 0.57

Graders 0.61 Off-Highway Tractors 0.65

Off-Highway Trucks 0.57

Pavers 0.62 Other Paving Equipment 0.53

Rollers 0.56

Rubber-Tired Dozers 0.59

Rubber-Tired Loaders 0.54 Scrapers 0.72 Signal Boards 0.78

Skid Steer Loaders 0.55 Surfacing Equipment 0.45

Tractors/Loaders/Backhoes 0.55

Trenchers 0.75 Other Construction Equipment 0.62 Cargo Handling Container Handling Equipment 0.59

Cranes 0.43

Excavators 0.57

Forklifts 0.30 Other,

General Industrial Equipment 0.51

Sweeper/Scrubber 0.68

Tractors/Loaders/Backhoes 0.55

Yard Trucks 0.65 Stationary and Portable Agricultural Engines Stationary Irrigation Pump 0.65

Portable Irrigation Pump 0.65

Other 0.51

Other All 0.43B-13 EMISSION REDUCTION TABLES 

### LARGE SPARK IGNITION ENGINES

Table B-14a Emission Factors for Off-Road LSI Engines by Model Year (g/bhp-hr)

Horsepower Fuel Model Year NOx ROG PM10

25

– 49 Gasoline Uncontrolled – all years 8.01 3.81 0.060

2001 6.91 3.00 0.060

2002 5.52 2.37 0.060

2003 4.52 1.64 0.060

2004

– 2006 1.33 0.72 0.060

2007

– 2009 0.89 0.48 0.060

2010+ 0.27 0.14 0.060

Alt Fuel Uncontrolled – all years 13.00 1.25 0.060

2001 10.40 1.05 0.060

2002 7.79 0.84 0.060

2003 5.19 0.64 0.060

2004

– 2006 1.95 0.13 0.060

2007

– 2009 1.30 0.08 0.060

2010+ 0.39 0.03 0.060

50

– 120 Gasoline Uncontrolled – all years 11.84 2.66 0.060

2001 9.58 2.11 0.060

2002 7.32 1.56 0.060

2003 5.06 1.00 0.060

2004

– 2006 1.78 0.26 0.060

2007

– 2009 1.19 0.18 0.060

2010+ 0.36 0.05 0.060

Alt Fuel Uncontrolled – all years 10.51 1.40 0.060

2001 8.54 1.16 0.060

2002 6.56 0.92 0.060

2003 4.57 0.68 0.060

2004

– 2006 1.58 0.14 0.060

2007

– 2009 1.05 0.10 0.060

2010+ 0.32 0.03 0.060

>120 Gasoline Uncontrolled – all years 12.94 1.63 0.060

2001 10.29 1.35 0.060

2002 7.64 1.07 0.060

2003 4.98 0.79 0.060

2004

– 2006 1.94 0.16 0.060B-14 EMISSION REDUCTION TABLES

Horsepower Fuel Model Year NOx ROG PM10

2007

– 2009 1.29 0.11 0.060

2010+ 0.39 0.03 0.060

Alt Fuel Uncontrolled – all years 10.51 1.25 0.060

2001 8.53 1.05 0.060

2002 6.54 0.85 0.060

2003 4.56 0.64 0.060

2004

– 2006 1.58 0.13 0.060

2007

– 2009 1.05 0.08 0.060

2010+ 0.32 0.03 0.060



### LARGE SPARK IGNITION ENGINES

Table B-14b Off-Road Equipment Default Load Factors

Equipment Load Factor

Agricultural LSI
Agricultural Tractors 0.62 Balers and other Ag Equip. 0.55 Sprayers 0.50 Stationary and Portable Engines 0.65

Swathers 0.52

Construction
Asphalt Pavers 0.66 Bore/Drill Rigs 0.80 Paving Equipment 0.60

Rollers 0.60 Rough Terrain Forklifts 0.60

Rubber Tired Loaders 0.55

Skid Steer Loaders 0.60

Trenchers 0.65

Lawn and Turf
Turf Equipment 0.60
Light Commercial

Forklift 0.30
Other Industrial Equip. 0.50B-15 EMISSION REDUCTION TABLES 

### AIRPORT GROUND SUPPORT EQUIPMENT

Table B-15 Default Load Factors for LSI and Diesel Equipment

Equipment Load Factor

Belt Loader 0.50 Baggage Tug 0.55 Cargo Loaders 0.50 A/C Tugs wide body 0.80 A/C Tugs narrow body 0.80

Lifts 0.50

Ground Power Units 0.75

Forklift 0.30B-16 EMISSION REDUCTION TABLES 

### LOCOMOTIVES

Table B-16

Locomotive Emission Factors a

(g/bhp-hr)

Engine Model Year Type NOx ROG b PM10 b

Pre-1973 (Uncontrolled) Line-haul 11.70 0.47 0.288

Switcher 15.66 0.99 0.396 1973-2001 (Tier 0) Line-haul 7.74 0.47 0.288

Switcher 11.34 0.99 0.396 2002-2004 (Tier 1) Line-haul 6.03 0.47 0.288

Switcher 8.91 0.99 0.396 2005 and later (Tier 2) Line-haul 4.50 0.26 0.153

Switcher 6.57 0.51 0.189

a - Emission factors from U.S. EPA Technical Highlights - Emission Factors fo r Locomotives , December 1997, with fuel correction factors (FCF) applied. NOx and PM10 FCFs for all Carl Moyer Program categories is 0.9.

b - HC and PM standards are less stringent than act ual emission rates. Emission factors reflect actual emission rates per U.S. EPA document cited above.

Table B-17 Locomotive Idle-Limiting Device Factors

Type Factor

Switchers 0.90

Line-Haul 0.97 Passenger 0.97

Note: Factors based on assumption ILD reduces locom otive engine idling by 50 percent.B-17 EMISSION REDUCTION TABLES 

### MARINE VESSELS

Table B-18 Harbor Craft Propulsion and Auxiliary Engine Emissi on Factors (g/bhp-hr)
Horsepower Year NOx ROG PM10

pre-1988 12.09 1.73 0.605

1988 - 2004 8.14 1.19 0.497 50

– 99

2005+ 4.22 0.54 0.320

pre-1970 13.02 1.59 0.554

1970 - 1971 12.09 1.32 0.475

1972 - 1979 11.16 1.20 0.396

1980 - 1984 10.23 1.13 0.396

1985 - 1987 10.23 1.06 0.396

1988 - 2003 7.60 0.82 0.274 100

– 174

2004+ 4.17 0.39 0.240 a

pre-1970 13.02 1.52 0.554

1970 - 1971 12.09 1.26 0.475

1972 - 1979 11.16 1.14 0.396

1980 - 1984 10.23 1.08 0.396

1985 - 1987 10.23 1.01 0.396

1988 - 2003 7.60 0.82 0.274 175

– 299

2004+ 4.17 0.39 0.160 b

pre-1970 13.02 1.52 0.533

1970 - 1971 12.09 1.26 0.454

1972 - 1979 11.16 1.14 0.382

1980 - 1984 10.23 1.08 0.382

1985 - 1987 10.23 1.01 0.382

1988 - 2003 7.60 0.82 0.274 300

– 750

2004+ 4.17 0.39 0.160

pre-1970 13.02 1.52 0.533

1970 - 1971 12.09 1.26 0.454

1972 - 1979 11.16 1.14 0.382

1980 - 1984 10.23 1.08 0.382

1985 - 1987 10.23 1.01 0.382

1988 - 2006 7.60 0.82 0.274

2007+ (1.2 < D < 5.0 c ) 4.17 0.39 0.160

2007+ (5 < D < 15 c ) 4.60 0.44 0.216

2007+ (15 < D < 20 c ) 5.03 0.48 0.400

2007+ (20 < D < 25 c ) 5.77 0.54 0.400 >750

2007+

(25 < D < 30 c ) 6.35 0.59 0.400

a - If engine displacement < 0.9 liters/cyl, PM10 = 0.320 g/bhp-hr; If engine displacement > 1.2 liters/cyl.,PM10 =0.160 g/bhp-hr. b – If engine displacement < 1.2 liters/cyl., PM10 = 0.24 g/bhp-hr. c – Engine displacement in liters per cylinder.B-18 EMISSION REDUCTION TABLES Table B-19

Harbor Craft Load Factors

Engine Vessel Type Factor

Commercial Fishing 0.27

Charter Fishing 0.52 Ferry/Excursion 0.76 Crew & Supply 0.45

Pilot 0.51

Tow 0.68
Tug 0.50

Work 0.45 Propulsion

Other 0.52

Tug 0.31 Auxiliary Other 0.43

Table B-20

Harbor Craft Fuel Consumption Rate Factors

(bhp-hr/gal)

Engine Displacement Fuel Consumption Rate < 5 liters/cylinder 18.5

> 5 liters/cylinder 20.8B-19 EMISSION REDUCTION TABLES 

### LIGHT-DUTY VEHICLES

Table B-21 Voluntary Accelerated Light-Duty Vehicle Retirement Program

Emission Reductions for Calendar Year 2006*

Total Pounds Per Vehicle Over 3 Year Credit Life
Emission Reductions (pounds) – 3 Year Credit Life

Model Year NOx ROG** CO PM10

65 and earlier 151 496 2,757 0.68
66 145 471 2,552 0.67
67 148 477 2,611 0.65
68 156 492 2,731 0.81
69 162 504 2,841 0.56
70 169 438 2,971 0.99
71 172 449 2,990 0.95
72 177 458 3,037 0.83
73 180 469 3,082 0.64
74 159 401 2,859 1.20
75 145 345 2,861 1.17
76 130 222 2,673 1.04
77 108 183 2,546 1.13
78 107 186 2,493 1.10
79 95 168 1,625 0.90
80 85 129 1,373 1.13
81 62 108 1,092 1.22
82 66 101 1,085 1.36

83 73 85 934 1.22

84 73 74 883 1.05

85 69 59 575 0.89

86 71 61 527 0.91

87 67 71 468 0.92

88 67 65 430 0.85

89 50 46 492 0.84

90 38 45 529 0.81

91 38 42 514 0.76

92 40 41 510 0.71

93 35 31 279 0.64

94 19 17 21 0.54 * Table is repeated in the Light-Duty Vehicle Chapt er, Table 11-2 ** Includes exhaust and evaporative emissions Source: EMFAC2002, Version 2.2, statewide, annual average . Assumes average 1965 through 2006 vehicle as replacement vehicle for veh icles retired in calendar year 2006.

This table updates the emission reductions provided in ARB’s VAVR regulation consistent with the methodology in the staff report

, Proposed Regulations for Voluntary Accelerated Light-Duty Vehicle Retirement Enterpris es , released October 23, 1998, and approved by ARB on December 10, 1998.B-20 EMISSION REDUCTION TABLES 

### REFERENCES

The information in these tables has already been in corporated into the preceding

emission factor tables. These tables are included for informational purposes.

Table B-22

NOx and NMHC Fraction Default Values For All Engines Except TRUs

Diesel Engines Alternative Fuel Engines

NOx NMHC NOx NMHC

0.95 0.05 0.80 0.20

Table B-23

NOx and NMHC Fractions for TRUs

Horsepower Model Year NOx NMHC

< 25 All 0.80 0.20

25 – 50 2004 and earlier 0.80 0.20

25 – 50 2005 to 2008 0.90 0.10

25 – 50 2008 and later 0.95 0.05

Table B-24 Fuel Correction Factors for On-Road Diesel Engines

Model Year NOx PM10 HC

Pre- 2007

2007+ 0.93

0.93 0.72

0.80 0.72

0.72B-21 EMISSION REDUCTION TABLES Table B-25 Fuel Correction Factors for Off-Road Diesel Engines

Model

Year NOx PM10

Pre-Tier 1 0.930 0.720

Tier 1+ 0.948 0.800

## APPENDIX C

COST-EFFECTIVENESS CALCULATION METHODOLOGYCOST-EFFECTIVENESS C-1 APPENDIX C

COST-EFFECTIVENESS CALCULATION METHODOLOGY

I. Introduction

To receive Carl Moyer Program funding, each project must meet the maximum costeffectiveness limit of $14,300 per weighted ton of surplus NOx, ROG, and PM10 (PM10 means combustion PM) emissions reduced. Only Carl Moyer Program funding, funding under the district’s fiduciary budget authority, or funding provided by a port authority (to meet the match fund requirement) are included in de termining the cost-effectiveness of surplus emission reductions. For more details see Part 1, Chapter 2: Administration of the Carl Moyer Program.

II. General Cost-Effectiveness Calculations

The cost-effectiveness of a project is determined b y dividing the annual cost of the potential project by the annual weighted surplus em ission reductions that will be achieved by the project as shown in formula C-1 bel ow.

Formula C-1: Cost-Effectiveness of Weighted Surplus Emission Reductions ($/ton):

Annualized Cost ($/yr) Annual Weighted Surplus Emission Reductions (tons/y r)

Descriptions on how to calculate annual emission re ductions and annualized cost are provided in the following sections.

A. Calculating the Annual Weighted Surplus Emission Reductions

Annual weighted emission reductions are estimated b y taking the sum of the project’s annual surplus pollutant reductions following formu la C-2 below. This will allow projects that reduce one, two, or all three of the covered p ollutants to be evaluated for eligibility to receive Carl Moyer Program funding. While NOx a nd ROG emissions are given equal weight; emissions of combustion PM10 (such as diesel exhaust PM10 emissions)

have been identified as a toxic air contaminant and thus carry a greater weight in the

calculation.

Formula C-2: Annual Weighted Surplus Emission Reduc tions:

NOx reductions (tons/yr) + ROG reductions (tons/yr) + [20 * (PM10 reductions (tons/yr)]

The result of formula C-2 is used to complete formu la C-1 to determine the cost-effectiveness of surplus emission reductions.COST-EFFECTIVENESS C-2 In order to determine the annual surplus emission r eductions by pollutant, formula C-3 below must be completed for each pollutant (NOx, RO G, and PM10), for the baseline technology and the reduced technology, totaling up to 6 calculations:

1. Annual emissions of NOx for the baseline technol ogy 2. Annual emissions of NOx for the reduced technolo gy 3. Annual emissions of ROG for the baseline technol ogy 4. Annual emissions of ROG for the reduced technolo gy 5. Annual emissions of PM10 for the baseline techno logy

6. Annual emissions of PM10 for the reduced technol ogy

These calculations are completed for each pollutant by multiplying the engine emission factor or converted emission standard by the annual activity level and by other adjustment factors as specified for the calculation methodologies presented.

The baseline technology is the technology applied under normal business practi ces, such as, an engine certified by ARB to the current emission standards for new purchases; or the existing engine in a vehicle or e quipment for repowers and retrofits.

The reduced technology is the newer technology used by the applicant to o btain surplus emission reductions. The newer technology may be one of the following:



### • For a new purchase it would be the engine certified by ARB to reduce NOx emissions by at least 30 percent less than the curr ent NOx emission standard, or certified by ARB to the optional NOx or NOx+NMHC em ission standard. Locomotive and marine vessel new purchases have slightly diffe rent criteria. Please see the specific source category cost-effectiveness criteri a for more information.



### • For a repower it would be the replacement engine ce rtified by ARB (for locomotives and marine vessels it would be EPA verified) to a m inimum of 15 percent less than the NOx emissions from the baseline technology (exi sting engine).



### • For a NOx retrofit it would be an ARB-verified retr ofit technology that will reduce NOx emissions by a minimum of 15 percent from the N Ox emissions of the baseline technology.



### • For a PM retrofit it would be the ARB-verified dies el emission control strategy (DECS) that reduces PM emissions as level 1 (25 per cent reduction), level 2 (50 percent reduction), or level 3 (85 percent redu ction).

Since the emission factor or converted standard is given in units of grams, a conversion from grams to tons is also required, as described i n formula C-3 below.

Formula C-3: Estimated Annual Emissions by Pollutan t (tons/yr):

Emission Factor or Converted Emission Standard (g/b hp-hr) * Annual Activity * Adjustment Factor(s) * Percent Operation in CA * to n/907,200gCOST-EFFECTIVENESS C-3 The Carl Moyer Program allows the emissions reducti ons from a project to be calculated using the following activity factors on an annual basis:



### • Hours of operation,



### • Fuel consumption, or



### • Miles traveled.

Specific activity factors allowed for each project category may differ and are identified in the source category chapters of the Carl Moyer Prog ram Guidelines.

1. Calculating Annual Emissions Based on Hours of O peration

When actual annual hours of equipment operation are the basis for determining emission reductions, the equipment activity level m ust be based on a properly functioning hour meter. (See Part 1, Program Overv iew and Administrative Requirements, Chapter 2 Administration of the Carl Moyer Program, section VII and the relative source category chapter for additional inf ormation on this topic). In addition, the horsepower rating of the engine and an engine load factor found in Appendix B must be

used. A default load factor of 0.43 is used for th ose projects where no specific equipment load factor is available in Appendix B. The method for calculating emission reductions based on hours of operation is described in formula C-4 below.

Formula C-4: Estimated Annual Emissions based on ho urs of Operation (tons/yr):

Emission Factor or Converted Emission Standard (g/b hp-hr) * Horsepower * Load Factor * Activity (hrs/yr) * Percent Operation in CA * ton/907,200g

The engine load factor is an indicator of the nomin al amount of work done by the engine for a particular application. It is given as a fra ction of the rated horsepower of the engine and varies with engine application. For pr ojects in which the horsepower of the baseline technology and reduced technology are diff erent by more than 25 percent, the load factor must be adjusted following formula C-5 below. It is important to understand the replacement load factor must never exceed 100 p ercent in cases where the reduced technology engine is significantly smaller than the baseline technology engine.

Formula C-5: Replacement Load Factor:

Load Factor baseline

* hp baseline

/hp reduced

2. Calculating Annual Emissions Based on Fuel Consu mption

When annual fuel consumption is used for determinin g emission reductions, the equipment activity level must be based on annual fu el usage within California provided by the applicant. Fuel records must be maintained by the engine owner as described in Part 1, Chapter 2: Administration of the Carl Moye r Program, section VII.COST-EFFECTIVENESS C-4 An energy consumption factor (ECF) must be used to convert emissions given in g/bhp-hr to units of grams of emissions per gallon of fuel used (g/gal). The ECF is a number that combines the effects of engine efficien cy and the energy content of the fuel used in that engine into an approximation of the am ount of work output by an engine for

each unit of fuel consumed. Formula C-6 below is t he formula for calculating annual

emissions based on annual fuel consumed.

Formula C-6: Estimated Annual Emissions based on Fu el Consumed using Emission Factors or Converted Emission Standard (tons/yr):

Emission Factor or Converted Emission Standard (g/b hp-hr) * ECF (hp-hr/gal) *

Activity (gal/yr) * Percent Operation in CA * ton/907,200g

For on-road projects, if the emission factor is in g/mile, a unit conversion factor (bhp-hr/mile) found in Table B-8 in Appendix B must be used to convert from g/mile to g/bhp-hr. This is completed by dividing the emissi on factor (g/mile) by the conversion factor (bhp-hr/mile) resulting in (g/bhp-hr). Form ula C-7 below is used to calculate

annual emissions for fuel based on-road calculation s.

Formula C-7: Estimated Annual Emissions based on Fu el Consumed using On-Road Emission Factors (tons/yr):

[On-Road Emission Factor (g/mile)/Unit Conversion F actor (bhp-hr/mile)] * ECF (hp-hr/gal) * Activity (gal/yr) * Percent Operation in CA * ton/907,200g

3. Calculating Annual Emissions Based on Annual Mil es Traveled

Calculations based on annual miles traveled are onl y used for on-road projects. Mileage records must be maintained by the engine ow ner as described in Part 1, Chapter 2: Administration of the Carl Moyer Progra m, section VII, and the relative source category chapter.

Calculations Using Emission Factors: There is no conversion since the emission factors for on-road projects provided are given in units of g/mile. Formula C-8 describes the method for calculating pollutant emis sions based on emission

factors and miles traveled.

Formula C-8: Estimated Annual Emissions based on Mi leage using Emission Factors (tons/yr):

Emission Factor (g/mile) * Activity (miles/yr) * Percent Operation in CA * ton/907,200g

Calculating Annual Emissions Based on Converted Sta ndards : The unit conversion factor found in Table B-8 in Appendix B is used to convert the units of the converted emission standard (g/bhp-hr) to g/mil e. Formula C-9 describes the method for calculating pollutant emissions using co nverted emission standards.COST-EFFECTIVENESS C-5 Formula C-9: Estimated Annual Emissions based on Mi leage using Converted Emission Standards (tons/yr):

Converted Emission Standard (g/bhp-hr) * Unit Conve rsion (bhp-hr/mile) * Activity (miles/yr)

* Percent Operation in CA * ton/907,200g

4. Calculating Annual Surplus Emission Reductions b y Pollutant

The final step in this portion of the calculations is to determine the annual surplus emission reductions by pollutant. For new purchase s and repower projects, subtract the annual emissions for the reduced technology from th e annual emissions for the baseline technology following formula C-10 below.

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers

and New Purchases:

Annual Emissions for the Baseline Technology – Annual Emissions for the Reduced Technology

For retrofits, multiply the baseline technology pol lutant emissions by the percent of

emission reductions that the ARB-verified reduced t echnology is verified to following

formula C-11 below.

Formula C-11: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Retrofits:

Annual Emissions for the Baseline Technology * Reduced Technology Verification Percent

Calculations must be done for each pollutant, NOx, PM10, and ROG, giving a total of

three calculations.

For a repower + retrofit calculation the baseline t o be used for the retrofit portion of the calculation will be the repower’s reduced technolog y emissions. For fleet modernization projects the baseline will be the newer vehicle emi ssions.

The annual surplus emission reductions by pollutant would be used in Formula C-2 to calculate the annual surplus emission reductions.

B. Determining the Annualized Cost

Annualized cost is the amortization of the one-time incentive grant amount for the life of the project to yield an estimated annual cost. The annualized cost is calculated by multiplying the incremental cost by the capital rec overy factor (CRF). The resulting annualized cost is used to complete formula C-12 to determine the cost-effectiveness of surplus emission reductions.COST-EFFECTIVENESS C-6 Formula C-12: Annualized Cost ($):

CRF * incremental cost ($)

1. Calculating the CRF

The CRF is the level of earnings reasonably expected by invest ing state funds in various financial instruments over the length of a Carl Moyer Program project. The CRF uses an interest rate and project life to d etermine the rate at which earnings could reasonably be expected if the same funds were invested over a length of time equaling the project life. The CRF is calculated f ollowing formula C-13 below.

Formula C-13: Capitol Recovery Factor (CRF):

[(1 + i) n (i)] / [(1 + i) n

- 1]

Where

i = discount rate (4 percent)

n = project life (at least 3 years see specific proj ect criteria for default maximums)

The discount rate of 4 percent reflects the prevail ing earning potential for state funds that could reasonably be expected by investing stat e funds in various financial instruments over the length of the minimum project life of Carl Moyer Program projects.

Table B-1 in Appendix B lists the CRF for various p roject lives using a discount rate of 4 percent. Use the result from formula C-13 to com plete formula C-12 to determine the annualized cost of a project.

2. Calculating the Incremental Cost

The incremental cost is determined by subtracting t he cost of the baseline technology from the cost of the reduced technology, as describ ed in formula C-14 below.

Formula C-14: Incremental Cost ($):

Cost of Reduced Technology ($) – Cost of Baseline T echnology ($)

Generally the cost of the baseline technology for a new purchase is the price of a new piece of equipment meeting the current emission sta ndards. The cost of the baseline technology for a repower is the cost of rebuilding the existing engine. For retrofits, there is no baseline technology cost; hence the entire co st of the retrofit is eligible for funding.COST-EFFECTIVENESS C-7 For fleet modernization projects, the incremental c ost is determined by adjusting the value given to the vehicle by the National Automoti ve Dealership Association (N.A.D.A.), as described in formula C-15 below.

Formula C-15: Incremental Cost for Fleet Moderniza tion Projects ($):

When the replacement vehicle is not new:

N.A.D.A value

where the N.A.D.A value is the retail value of the used vehicle * 72 percent

.

When the replacement vehicle is new: Invoice of the New Vehicle * 80 percent

Use the results from formula C-14 or C-15 to comple te formula C-12 to determine the annualized cost of a project.COST-EFFECTIVENESS C-8 III. List of Formulas

For an easy reference, the necessary formulas to ca lculate the cost-effectiveness of surplus emission reductions for a project funded th rough the Carl Moyer Program are provided below.

Formula C-1 : Cost-Effectiveness of Weighted Surplus Emission R eductions ($/ton):

Annualized Cost ($/yr) Annual Weighted Surplus Emission Reductions (tons/y r)

Formula C-2 : Annual Weighted Surplus Emission Reductions:

NOx reductions (tons/yr) + ROG reductions (tons/yr) + [20 * PM10 reductions (tons/yr)]

Formula C-3 : Estimated Annual Emissions by Pollutant (tons/yr) :

Emission Factor or Converted Emission Standard (g/b hp-hr) * Annual Activity * Adjustment Factor(s) * Percent Operation in CA* (to n/907,200g)

Formula C-4 : Estimated Annual Emissions based on hours of Oper ation (tons/yr):

Emission Factor or Converted Emission Standard (g/b hp-hr) * Horsepower * Load Factor * Activity (hrs/yr) * Percent Operation in CA * ton/907,200g

Formula C-5 : Replacement Load Factor:

Load Factor baseline * hp baseline /hp reduced

Formula C-6 : Estimated Annual Emissions based on Fuel Consumed using Emission Factors or Converted Emission Standard (tons/yr):

Emission Factor or Converted Emission Standard (g/b hp-hr) * ECF (hp-hr/gal) *

Activity (gal/yr) * Percent Operation in CA * ton/907,200g

Formula C-7 : Estimated Annual Emissions based on Fuel Consumed using On-Road Emission Factors (tons/yr):

[On-Road Emission Factor (g/mile)/Unit Conversion F actor (bhp-hr/mile)] * ECF (hp-hr/gal) * Activity (gal/yr) * Percent Operation in CA * ton/907,200g

Formula C-8 : Estimated Annual Emissions based on Mileage using Emission Factors (tons/yr):

Emission Factor (g/mile) * Activity (miles/yr) * Percent Operation in CA * ton/907,200gCOST-EFFECTIVENESS C-9 Formula C-9 : Estimated Annual Emissions based on Mileage using Converted Emission Standards (tons/yr):

Converted Emission Standard (g/bhp-hr) * Unit Conve rsion Factor (bhp-hr/mile) *

Activity (miles/yr) * Percent Operation in CA * ton/907,200g

Formula C-10: Annual Surplus Emission Reductions by Pollutant (t ons/yr) for Repowers

and New Purchases:

Annual Emissions for the Baseline Technology – Annual Emissions for the Reduced Technology

Formula C-11 : Annual Surplus Emission Reductions by Pollutant ( tons/yr) for Retrofits:

Annual Emissions for the Baseline Technology * Reduced Technology Verification Percent

Formula C-12 : Annualized Cost ($):

CRF * incremental cost ($)

Formula C-13 : Capitol Recovery Factor (CRF):

[(1 + i) n (i)] / [(1 + i) n - 1]

Where i = discount rate (4 percent) and n = project life (at least 3 years see specific project criteria for default maximums)

Formula C-14 : Incremental Cost ($):

Cost of Reduced Technology ($) – Cost of Baseline T echnology ($)

Formula C-15: Incremental Cost for Fleet Modernization Projects ($):

When the replacement vehicle is not new:

N.A.D.A value

where the N.A.D.A value is the retail value of the used vehicle * 72 percent

.

When the replacement vehicle is new: Invoice of the New Vehicle * 80 percent

## APPENDIX D

EXAMPLE CALCULATIONSD-1 EXAMPLE CALCULATIONS APPENDIX D

EXAMPLE CALCULATIONS

TABLE OF CONTENTS

I. On-Road Heavy-Duty Vehicles

II. On-Road Heavy-Duty Fleet Modernization

III. Heavy-Duty Truck Idle Reduction

IV. Transport Refrigeration Units

V. Off-Road Compression Ignition Equipment

VI. Large Spark-Ignition Off-Road Equipment (pendin g Board action)

VII. Ground Support Equipment (pending Board action )

VIII. Locomotives

IX. Marine Vessels

X. Agricultural Sources

XI. Light-Duty Vehicles

XII. Zero-Emission TechnologiesD-2 EXAMPLE CALCULATIONS

I. On-Road Heavy-Duty Vehicles

This section provides several examples of calculati ons for determining the cost-effectiveness of surplus emission reductions f or on-road projects.

A. General Criteria for On-Road Cost-Effectiveness Calculations

• Funded projects must have a minimum project life o f 3 years. Project life is the number of years that a Carl Moyer Program project w ill operate in California under the conditions specified in the grant funding agree ment.

• The default project life for on-road projects are as follows:

School buses > 33,000 GVWR - New 20 years

Buses > 33,000 GVWR - New 12 years Other On-Road - New 10 years Repowers + Retrofits 5 years Retrofits 5 years Applicants must provide documentation to justify a longer project life.

• Only the minimum verified levels of NOx and PM10 e mission reductions will be used to calculate cost-effectiveness for retrofit projec ts.

• In these calculations, PM10 refers to combustion p articulate matter.

• ROG reductions cannot be counted in projects where the new engine or retrofit

device are not verified or certified for ROG.

• When the model year of the vehicle chassis and the model year of the existing engine are different, the newer of the two model ye ars, either the vehicle or the engine, shall be used to determine the baseline emi ssions for calculations.

• When calculating the baseline emissions for a glid er kit repower project, the baseline for the project is the chassis year or the old engi ne model year, whichever is newer.

• The incremental emission difference between the lo wer FEL level to the required emission standard cannot be used for the purpose of calculating Carl Moyer Program emission benefits. The maximum amount of e mission reduction that can be claimed is the difference between the applicable required emission standard for the replacement engine (not the FEL level) and the baseline emission level of the existing engines.

• Most on-road calculations will be based on mileage . Refuse haulers and street sweepers may have fuel based calculations if fuel r eceipts can be provided to document previous usage. Other vehicles may also u se fuel based calculations on a case-by-case basis.D-3 EXAMPLE CALCULATIONS

• Refuse vehicles and street sweepers often have two engines, one for motive power and one for auxiliary operations. Emission benefit s are calculated individually for each engine using fuel consumption rates for each u nit if available. If individual engine fuel consumption information is not availabl e, the applicant must provide and document an estimate for the typical activities of each engine based on best engineering judgment so that emissions can be deter mined. Factors such as fuel economy, typical operating loads, and hours of oper ation for each engine must be provided.

• Table D-1 provides the source of emission factors to be used in on-road

cost-effectiveness calculations.

Table D-1

On-Road Heavy-Duty Vehicle Calculations

Source of Emission Factors

New Repower Retrofit

Vehicle Type Baseline

Factor Reduced

Factor Baseline

Factor Reduced

Factor Baseline

Factor Reduced

Factor

Medium Heavy Duty

Vehicle B-4 B-2 or B-3 B-3 or B-4 B-3 or B-4 B-4 % verified as

shown on

Executive
Order

Heavy Duty

Vehicle B-5 B-2 or B-3 B-3 or B-5 B-3 or B-5 B-5 % verified as

shown on

Executive
Order

Urban Bus (Alternative Fuel) B-2 or B-7 B-2 or B-3 B-7 B-7 B-7 % verified as

shown on

Executive

Order

Urban Bus (Diesel) B-2 or B-6 B-2 or B-3 B-6 B-6 or B-7 B-6 % verified as

shown on

Executive
Order

• The energy consumption factor to be used for all o n-road fuel based calculations is 18.5 bhp/hr-gal.

• The baseline cost for retrofit projects is zero ($ 0). The full cost of a retrofit is potentially eligible for funding.

• For retrofit projects that only take credit for NO x reductions from a Level 3 DECS (because the PM10 reductions are required by regula tion) the baseline cost is one-half the project cost.D-4 EXAMPLE CALCULATIONS

• School bus calculations shall use the MHD or HHD v ehicle emission factors and conversion factors depending on GVWR to calculate c ost-effectiveness.

• Applicants may claim ROG emission reductions from DECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduc tion of hydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emission reductions. For example, a technology that provides a 40 percen t emission reduction of hydrocarbons would be permitted to apply a 25 perce nt reduction in ROG emissions for determining eligibility and grant amount in the Carl Moyer Program.

• Although electronic monitoring units are not requi red by the ARB, when an EMU is required by a district, it is an eligible expense f or any category.

• FTA provides up to an 80 percent grant for new urb an bus purchases. For these projects the incremental cost would be the differen ce between the FTA grant amount and the cost of the reduced technology or baseline technology.

• The cost of alternative fuel projects must be base d on the total amortized cost of hardware (i.e., new engine or repower), and fuel, i f applicable.

• If all Carl Moyer Program criteria are met and the project is not a “fuel-only” project,

the incremental cost of alternative fuel can be con sidered a qualified matching

contribution from a district.

B. Examples

Example 1 – New Purchase of LNG Heavy-Duty Truck

A trucking company proposes to purchase a new 2005 model year heavy heavy-duty truck equipped with a LNG engine certified to the o ptional standard of 1.8 g/bhp-hr NOx + NMHC and 0.03 g/bhp-hr PM10 instead of a new heav y heavy-duty truck equipped with a diesel engine. This vehicle operates 100 pe rcent of the time in California.

Baseline Technology Information :

• Baseline technology (application): 2005 diesel he avy heavy-duty on road truck

• Cost (quote provided with application): $180,000

• New diesel vehicle emission rates (Table B-5): 11 .63 g/mi NOx, 0.26 g/mi ROG, 0.252 g/mi PM10

• Activity (application): 100,000 mi/yr

• Percent operate in California (application): 100 percent

Reduced Technology Information :

• Reduced technology (application): 2005 heavy-duty LNG truckD-5 EXAMPLE CALCULATIONS

• Cost (quote provided with application): $220,000

• New LNG vehicle emission standard (Table B-2): 1. 44 g/bhp-hr NOx, 0.030 g/bhp-hr PM10

• Conversion factor to convert g/bhp-hr to g/mi (Tab le B-8): 2.6 bhp-hr/mi

Emission Reduction Calculations:

Formula C-8: Estimated Annual Emissions based on M ileage using Emission Factors (use for baseline calculations) 1. Annual NOx baseline technology emissions (11.63 g/mi * 100,000 mi/yr)(ton/907,200 g) = 1.28 tons/yr NOx 2. Annual PM10 baseline technology emissions (0.252 g/mi * 100,000 mi/yr)(ton/907,200 g) = 0.028 tons/yr PM10

Formula C-9: Estimated Annual Emissions based on M ileage using a Converted

Emission Standards

(use for reduced calculations) 3. Annual NOx reduced technology emissions (1.44 g/bhp-hr * 2.6 bhp-hr/mi * 100,000 mi/yr)(ton /907,200 g) = 0.41 tons/yr NOx 4. Annual PM10 reduced technology emissions (0.030 g/bhp-hr * 2.6 bhp-hr/mi * 100,000 mi/yr)(to n/907,200 g) = 0.009 tons/yr PM10

ROG emission factors not available for reduced tech nology therefore ROG emission

reductions cannot be calculated.

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 1.28 tons/yr – 0.41 tons/ yr = 0.87 tons/yr NOx

• PM10 emission benefits = 0.028 tons/yr – 0.009 ton s/yr = 0.019 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.87 + 20(0.019) = 1.25 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1) = 0.123

Formula C-14: Incremental Cost $220,000 – $180,000 = $40,000

Formula C-12: Annualized Cost $40,000 * 0.123 = $4,920/yrD-6 EXAMPLE CALCULATIONS

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surpl us Emission Reductions ($/ton) ($4,920/yr)/(1.25 weighted tons/yr) = $3,936/ton of weighted surplus emissions reduced

The weighted cost-effectiveness for the example is less than $14,300 per ton of pollutants reduced. This project qualifies for the maximum amount of grant funds requested.

Example 2 – Diesel to Diesel Heavy-Duty Truck Repow er + Retrofit

A line haul trucking company proposes to repower a 1994 heavy heavy-duty diesel truck with a model year 2003 certified diesel engine and retrofit the engine with a Level 3

retrofit that is verified for both PM10 and NOx red uctions. This vehicle operates 90 percent of the time in California.

Baseline Technology Information :

• Baseline technology (application): 1994 diesel he avy heavy-duty engine

• Cost rebuild (quote provided with application): $ 8,000

• Baseline cost of retrofit: $0

• Emission rates (Table B-5): 17.95 g/mi NOx, 0.40 g/mi ROG, 0.367 g/mi PM10

• Activity (application): 60,000 mi/yr

• Percent operated in California (application): 90 percent

Reduced Technology Information :

• Reduced technology (application): 2003 diesel hea vy heavy-duty engine

• Repower cost (quote provided with application): $ 35,000

• Retrofit cost (quote provided with application): $18,000 + $600 annual filter

maintenance

• Emission rates (Table B-5): 11.63 g/mi NOx, 0.26 g/mi ROG, 0.252 g/mi PM10

• Retrofit verification emission levels (EO): 25 pe rcent reduction of NOx and 85 percent reduction of PM10. ROG is not counted s ince the retrofit device is not

verified for ROG.

Emission Reduction Calculations : Formula C-8: Estimated Annual Emissions based on M ileage using Emission Factors 1. Annual NOx baseline technology emissions (17.95 g/mi * 0.90 * 60,000 mi/yr)(ton/907,200 g) = 1.07 tons/yr NOx 2. Annual NOx reduced technology emissions (11.63 g/mi * 0.90 * 60,000 mi/yr)(ton/907,200 g) = 0.69 tons/yr NOx 3. Annual ROG baseline technology emissions (0.40 g/mi * 0.90 * 60,000 mi/yr)(ton/907,200 g) = 0.02 tons/yr ROG 4. Annual ROG reduced technology emissions (0.26 g/mi * 0.90 * 60,000 mi/yr)(ton/907,200 g) = 0.02 tons/yr ROG 5. Annual PM10 baseline technology emissions (0.367 g/mi * 0.90 * 60,000 mi/yr)(ton/907,200 g) = 0.022 tons/yr PM10D-7 EXAMPLE CALCULATIONS

6. Annual PM10 reduced technology emissions (0.252 g/mi * 0.90 * 60,000 mi/yr)(ton/907,200 g) = 0.015 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 1.07 tons/yr – 0.69 tons/ yr = 0.38 tons/yr NOx

• ROG emission benefits = 0.02 tons/yr – 0.02 tons/y r = 0 tons/yr ROG

• PM10 emission benefits= 0.022 tons/yr – 0.015 tons /yr = 0.007 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions b y Pollutant (tons/yr)

for Retrofits 0.69 tons/yr NOx * 0.25 = 0.17 tons/yr NOx 0.015 tons/yr PM10 * 0.85 = 0.013 tons/yr PM10

Total NOx Emission Benefits 0.38 + 0.17 = 0.55 tons/yr NOx

Total PM10 Emission Benefits 0.007 + 0.013 = 0.02 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.55 + 20(0.02) = 0.95 weighted tons/yr

Annualized Cost: Project Life: 5 years CRF (Table B-1) = 0.225

Formula C-14: Incremental Cost $35,000 + $18,000 + ($600*5) – $8,000 = $48,000

Formula C-12: Annualized Cost $48,000 * 0.225 = $10,800/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($10,800/yr)/(0.95 weighted tons/yr) = $11,368/ton of weighted surplus emissions reduced

The cost-effectiveness for the example is less than $14,300 per ton of weighted pollutants reduced. This project qualifies for the maximum amount of grant funds requested.

Example 3 – Diesel Heavy-Duty Truck Retrofit A trucking company proposes to retrofit a 2005 heav y heavy-duty diesel truck with a

Level 3 retrofit that is verified for both PM and N Ox reductions. This vehicle operates 80 percent of the time in California.D-8 EXAMPLE CALCULATIONS

Baseline Technology Information :

• Baseline technology (application): 2005 heavy hea vy-duty diesel truck

• Cost (retrofits are eligible for full cost unless being installed to meet regulatory requirements): $0

• New diesel vehicle emission rates (Table B-5): 11 .63 g/mi NOx; 0.252 g/mi of PM10

• Activity (application): 100,000 mi/yr

• Percent operated in California (application): 80 percent

Reduced Technology Information :

• Retrofit verification emission levels (EO): 25 pe rcent reduction of NOx and 85 percent reduction of PM10. ROG is not counted s ince the retrofit device is not

verified for ROG.

• Retrofit cost (quote provided with application): $18,000 + $600 annual filter

maintenance

Emission Reduction Calculations : Formula C-8: Estimated Annual Emissions based on M ileage using Emission Factors 1. Annual NOx baseline technology emissions (11.63 g/mi * 0.80 * 100,000 mi/yr)(ton/907,200 g) = 1.03 tons/yr NOx 2. Annual PM10 baseline technology emissions (0.252 g/mi * 0.80 * 100,000 mi/yr)(ton/907,200 g) = 0.022 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Retrofits 1.03 * 0.25 = 0.26 tons/yr NOx 0.022 * 0.85 = 0.019 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.26 + 20(0.019) =0.64 weighted tons/yr

Annualized Cost: Project Life: 5 years CRF (Table B-1): = 0.225

Formula C-14: Incremental Cost $18,000 + ($600*5) – $0 = $21,000

Formula C-12: Annualized Cost 0.225 * 21,000 =$4,725/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($4,725/yr)/(0.64 weighted tons/yr) = $7,383/ton of weighted surplus emissions reducedD-9 EXAMPLE CALCULATIONS

For retrofit projects that only take credit for NOx reductions from a Level 3 DECS (because the PM reductions are required by regulati on) the baseline cost is one-half the project cost.

The cost-effectiveness for the example is less than $14,300 per ton of pollutants reduced. This project qualifies for the maximum am ount of grant funds requested.

Example 4 –Purchase of a New CNG Street Sweeper
A company proposes to purchase a new CNG street swe eper instead of a diesel sweeper. The GVWR of the new vehicle is 24,000 lbs . The CNG engine is certified to the optional emission standard of 1.2 g/bhp-hr for NOx+NMHC and 0.01 g/bhp-hr PM10. This vehicle operates 100 percent of the time in Ca lifornia.

Baseline Technology Information:

• Baseline technology (application): 2005 medium he avy-duty diesel vehicle

• Cost (quote provided with application): $125,000

• New diesel vehicle emission rates (Table B-4): 5. 12 g/mi NOx, 0.08 g/mi ROG, 0.216 g/mi PM10

• Conversion factor to convert g/mile to g/bhp-hr (T able B-8): 2.3 bhp-hr/mi

• Energy consumption factor: 18.5 bhp-hr/gal

• Activity (application): 5,000 gal/yr

• Percent operated in California (application): 100 percent

Reduced Technology Information:

• Reduced technology (application): 2005 medium hea vy-duty CNG vehicle

• Cost (quote provided with application): $160,000

• New CNG vehicle emission standard (Table B-2): 0. 96 g/bhp-hr NOx, 0.01 g/bhp-hr PM10

• Energy consumption factor: 18.5 bhp-hr/gal

Emission Reduction Calculations : Formula C-7: Estimated Annual Emissions based on F uel Consumed using On-Road Emission Factors (tons/yr) 1. Annual NOx baseline technology emissions (5.12 g/mi / 2.3 bhp-hr/mi)(5,000 gal/yr)(18.5 bhp- hr/gal)(ton/907,200 g) = 0.23 tons/yr NOx 2. Annual PM10 baseline technology emissions (0.216 g/mi / 2.3 bhp-hr/mi)(5,000 gal/yr)(18.5 bhp -hr/gal)(ton/907,200 g) = 0.01 tons/yr PM10

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factor or Converted Emission Standards (tons/yr) 3. Annual NOx reduced technology emissions (0.96 g/bhp-hr)(5,000 gal/yr)(18.5 bhp-hr/gal)(ton/ 907,200 g) = 0.10 tons/yr NOxD-10 EXAMPLE CALCULATIONS

4. Annual PM10 reduced technology emissions (0.01 g/bhp-hr)(5,000 gal/yr)(18.5 bhp-hr/gal)(ton/ 907,200 g) = 0.001 tons/yr PM10

ROG emission factors not available for reduced tech nology therefore

ROG emission reductions cannot be calculated.

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 0.23 tons/yr – 0.10 tons/ yr = 0.13 tons/yr NOx

• PM10 emission benefits = 0.01 tons/yr – 0.001 tons /yr = 0.009 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.13 + 20(0.009) = 0.31 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1): = 0.123

Formula C-14: Incremental Cost $160,000 – $125,000 = $35,000

Formula C-12: Annualized Cost 0.123 * $35,000 = $4,305/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surpl us Emission Reductions ($/ton) ($4,305/yr)/(0.31 weighted tons/yr) = $13,887/ton of weighted surplus emissions reduced

The cost-effectiveness for the example is less than $14,300 per ton of pollutants reduced. This project qualifies for the maximum am ount of grant funds requested.

Example 5 - Repower + Retrofit of Street Sweeper

A company proposes to repower a 2001 diesel street sweeper with a 2006 CNG engine certified to the optional heavy-duty engine standar d of 1.8 g/bhp-hr NOx + NMHC and 0.03 g/bhp-hr PM10. The company will also retrofit the engine with a Level 3 retrofit

that is verified for both PM and NOx reductions. T his vehicle has a GVWR of 19,000 lbs. and operates 100 percent of the time in California.

Baseline Technology Information :

• Baseline technology (application): 2001 diesel me dium heavy-duty engine

• Cost of rebuild (quote provided with application): $14,000

• Emission rates (Table B-4): 9.77 g/mi NOx, 0.08 g /mi ROG, 0.144 g/mi PM10

• Conversion factor to convert g/mile to g/bhp-hr (T able B-8): 2.3 bhp-hr/miD-11 EXAMPLE CALCULATIONS

• Energy consumption factor: 18.5 bhp-hr/gal

• Activity (application): 7,667 gal/yr

• Percent operated in California (application): 100 percent

Reduced Technology Information :

• Reduced technology (application): 2006 CNG medium heavy-duty engine

• Cost (quote provided with application): $47,750

• Converted emission standard (Table B-2): 1.44 g/b hp-hr NOx; 0.030 g/bhp-hr PM10

• Retrofit Cost (quote provided with application): $18,000 + $600 annual filter

maintenance

• Retrofit verification emission levels (EO): 25 pe rcent reduction of NOx and 85 percent reduction of PM10. ROG is not counted s ince the retrofit device is not

verified for ROG.

• Energy consumption factor: 18.5 bhp-hr/gal

Emission Reduction Calculations : Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standards (tons/yr) 1. Annual NOx baseline technology emissions (9.77 g/mi / 2.3 bhp-hr/mi)(7,667 gal/yr)(18.5 bhp- hr/gal)(ton/907,200 g) = 0.66 tons/yr NOx 2. Annual PM10 baseline technology emissions (0.144 g/mi / 2.3 bhp-hr/mi)(7,667 gal/yr)(18.5 bhp -hr/gal)(ton/907,200 g) = 0.010 tons/yr PM10

Formula C-7: Estimated Annual Emissions based on F uel Consumed using On-Road Emission Factors (tons/yr) 3. Annual NOx reduced technology emissions (1.44 g/bhp-hr)(7,667 gal/yr)(18.5 bhp-hr/gal)(ton/ 907,200 g) = 0.23 tons/yr NOx 4. Annual PM10 reduced technology emissions (0.030 g/bhp-hr)(7,667 gal/yr)(18.5 bhp-hr/gal)(ton /907,200 g) = 0.005 tons/yr PM10

ROG emission factors not available for reduced tech nology therefore

ROG emission reductions cannot be calculated.

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 0.66 tons/yr – 0.23 tons/y r = 0.43 tons/yr NOx

• PM10 emission benefits = 0.010 tons/yr – 0.005 ton s/yr = 0.005 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions b y Pollutant (tons/yr)

for Retrofits 0.23 tons/yr NOx * 0.25 = 0.06 tons/yr NOx 0.005 tons/yr PM10 * 0.85 = 0.004 tons/yr PM10D-12 EXAMPLE CALCULATIONS

Total NOx Emission Benefits 0.43 + 0.06 = 0.49 tons/yr NOx

Total PM10 Emission Benefits 0.005 + 0.004 = 0.009 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.49 +20(0.009) = 0.67 weighted tons/yr

Annualized Cost : Project Life: 5 years CRF (Table B-1) = 0.225

Formula C-14: Incremental Cost $47,750 + $18,000 + ($600 * 5) – $14,000 = $54,750

Formula C-12: Annualized Cost 0.225 * $54,750 = $12,319/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surpl us Emission Reductions ($/ton) ($12,319/yr)/(0.67 weighted tons/yr) = $18,387/ton of weighted surplus emissions reduced

The cost-effectiveness for this example is greater than the $14,300 per ton weighted cost-effectiveness requirement. In order to meet t he $14,300 per ton weighted cost-effectiveness requirement, this project would only qualify for a fraction of the incremental cost – $42,582. This amount is determi ned by multiplying the maximum allowed cost-effectiveness by the estimated annual emission reductions and dividing by the capital recovery factor:

($14,300 * 0.67)/0.225 = $42,582

Example 6 –Purchase of a New CNG Bus
A transit agency proposes to purchase a new 2005 CN G bus certified to the alternative fuel optional standard of 1.2 g/bhp-hr NOx + NMHC a nd 0.01 g/bhp-hr PM10 instead of

a new CNG bus certified to the current alternative fuel standard of 2.5g/bhp-hr NOx+NMHC. The baseline cost for this project is ba sed on a diesel engine. This new CNG bus is surplus to the ARB transit bus fleet rul e. The new bus will operate 100 percent of the time in California.

Baseline Technology Information :

• Baseline technology (application): 2005 CNG urban bus

• Cost (quote provided with application): $350,000

• Emission standard (Table B-2): 2.0 g/bhp-hr NOx a nd 0.010 g/bhp-hr PM10D-13 EXAMPLE CALCULATIONS

• Activity (application): 50,000 mi/yr

• Percent operated in California (application): 100 percent

Reduced Technology Information :

• Reduced technology (application): 2005 CNG urban bus certified to optional

standard

• Cost (quote provided with application): $390,000

• Converted emission standard (Table B-2): 0.96 g/b hp-hr NOx and 0.010 g/bhp-hr PM10

• Conversion factor to convert the standard in g/bhp -hr to g/mi (Table B-8): 4.3 bhp-hr/mi

Emission Reduction Calculations:

Formula C-9: Estimated Annual Emissions based on Mileage using a Converted

Emission Standards 1. Annual NOx baseline technology emissions (2.00 g/bhp-hr *4.3 bhp-hr/mi)(50,000 mi/yr)(ton/90 7,200 g) = 0.47 tons/yr NOx 2. Annual NOx reduced technology emissions (0.96 g/bhp-hr * 4.3 bhp-hr/mi)(50,000 mi/yr)(ton/9 07,200 g) = 0.23 tons/yr NOx 3. Annual PM10 baseline technology emissions (0.010 g/bhp-hr *4.3 bhp-hr/mi)(50,000 mi/yr)(ton/9 07,200 g) = 0.002 tons/yr PM10 4. Annual PM10 reduced technology emissions (0.010 g/bhp-hr * 4.3 bhp-hr/mi)(50,000 mi/yr)(ton/ 907,200 g) = 0.002 tons/yr PM10

ROG emission factors not available for reduced tech nology therefore

ROG emission reductions cannot be calculated.

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 0.47 tons/yr – 0.23 tons/y r = 0.24 tons/yr NOx

• PM10 emission benefits = 0.002 tons/yr – 0.002 ton s/yr = 0 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.24 + 20(0) = 0.24 weighted tons/yr

Annualized Cost: Project Life: 12 years CRF (Table B-1) = 0.107

Transit agencies receive an 80 percent grant from t he Federal Transportation Agency for most new vehicle purchases. This grant must be subtracted before calculating the

incremental cost.

Transit agency’s cost for baseline technology: $350 ,000 * 0.20 = $70,000D-14 EXAMPLE CALCULATIONS

Transit agency’s cost for reduced technology: $390, 000 * 0.20 = $78,000

Formula C-14: Incremental Cost $78,000 – $70,000 = $8,000

Formula C-12: Annualized Cost 0.107 * $8,000 = $856/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($856/yr)/(0.24 weighted tons/yr) = $3,566/ton of weighted surplus emissions reduced

The cost-effectiveness for the example is less than $14,300 per ton of pollutants reduced. This project qualifies for the maximum am ount of grant funds requested.

C. Auxiliary Engine Calculations

To calculate the emission benefits of an auxiliary engine, see the Example #3 in the off-road section of this Appendix.D-15 EXAMPLE CALCULATIONS

II. On-Road Heavy-Duty Fleet Modernization

This section provides examples of calculations for determining the cost-effectiveness of surplus emission reductions for fleet modernization projects.

A. General Criteria for Fleet Modernization Cost-Ef fectiveness

Calculations

• Target vocations are eligible for a five year proj ect life.

• Applicants may claim ROG emission reductions from DECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduc tion of hydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emission reductions. For example, a technology that provides a 40 percen t emission reduction of hydrocarbons would be permitted to apply a 25 perce nt reduction in ROG emissions for determining eligibility and grant amount in the Carl Moyer Program.

• For these calculations, PM10 refers to combustion PM10.

B. Examples

Example 1 – Replacement of a Heavy-Heavy Duty Truck from a Targeted Vocation A participant wants to scrap an old, heavy heavy-du ty truck used to haul cargo from the Port of Long Beach and replace it with a newer, use d truck. The participant has provided conclusive documentation that for the last three years the old truck operated 100 percent of the time in and around the Port area . The replacement truck will be equipped with a Level 1 diesel emission control sys tem (DECS) and an electronic monitoring unit (EMU). The replacement truck is re quired to continue operating in the same vocation and location for the life of the proj ect.

Baseline Technology Information

• Baseline technology (application): 1983 heavy hea vy-duty diesel truck

• Emission rates (Table B-5): 21.39 g/mi NOx, 1.04 g/mi ROG, 1.249 g/mi PM10

• Activity (application): 42,000 miles/year

• Percent operated in California (application): 100 percent

• Vocation (application): Port hauling

Reduced Technology Information :

• Reduced technology (application): 2000 heavy heav y-duty diesel truck

• Emission rates (Table B-5): 17.58 g/mi NOx, 0.51 g/mi ROG, 0.403 g/mi PM10D-16 EXAMPLE CALCULATIONS

• Retrofit verification emission levels (EO): 25 pe rcent NOx; 85 percent PM reduction

• Cost (quote provided with application): $40,000

• DECS cost (quote provided with application): $18, 300

• EMU cost: $1,150 (Includes installation and monit oring for five years)

Emission Reduction Calculations:

Formula C-8: Estimated Annual Emissions Based on M ileage Using

Emission Factors 1. Annual NOx baseline technology emissions (21.39 g/mi * 42,000 mi)(ton/ 907,200 g) = 0.990 t ons/yr NOx 2. Annual NOx reduced technology emissions (17.58 g/mi * 42,000 mi)(ton/ 907,200 g) = 0.814 to ns/yr NOx 3. Annual ROG baseline technology emissions (1.04 g/mi * 42,000 mi) (ton/ 907,200 g) = 0.048 t ons/yr ROG 4. Annual ROG reduced technology emissions (0.51 g/mi * 42,000 mi)(ton/ 907,200 g) = 0.024 ton s/yr ROG 5. Annual PM10 baseline technology emissions (1.249 g/mi * 42,000 mi)(ton/ 907,200 g) = 0.058 tons/yr PM10 6. Annual PM10 reduced technology emissions (0.403 g/mi * 42,000 mi)(ton/ 907,200 g) = 0.019 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers and New Purchases:

• NOx Emission Benefits = 0.990 tons/yr - 0.814 to ns/yr = 0.176 tons/yr NOx

• ROG Emission Benefits = 0.048 tons/yr - 0.024 ton s/yr = 0.024 tons/yr ROG

• PM10 Emission Benefits = 0.058 tons/yr - 0.019 ton s/yr = 0.039 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Retrofits: Emission benefits of the replacement truck with the DECS providing an additional 25 percent NOx and 85 percent PM reduction 0.814 tons/yr NOx * 0.25 = 0.204 tons/yr NOx 0.019 tons/yr PM10 * 0.85 = 0.016 tons/yr PM10

Total NOx Emission Benefits 0.176 tons/yr + 0.204 tons/yr = 0.380 tons/yr NOx

Total PM10 Emission Benefits 0.039 tons/yr + 0.016 tons/yr = 0.055 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.380 tons/yr + 0.024 tons/yr + 20(0.055 tons/yr) = 1.504 weighted tons/yr

Annualized Cost Project Life = 5 Years CRF (Table B-1) = 0.225D-17 EXAMPLE CALCULATIONS

Formula C-15: Incremental Cost NADA Value of Replacement Truck: 0.72 * $40,000 = $28,800 Replacement Truck + DECS + EMU: $28,800 + $18,300 + $1,150 = $48,250

Formula C-12: Annualized Cost $48,250 * 0.225 = $10,856/yr

Cost-Effectiveness Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions =($10,856/yr) / (1.504 weighted tons/yr) = $7,218 weighted tons/yr

In this example, the cost-effectiveness is less tha n threshold of $14,300 per weighted ton of pollutants reduced. This project qualifies for $28,800, the maximum amount of grant funds requested. The applicant will take out a loan to pay the remaining $12,000 for the replacement truck.

Example 2 – Tiered Transaction
The owner of a 2000 model year, heavy heavy-duty tr uck wants to purchase a new 2005 model year truck meeting the optional NOx stan dard. He has proposed a tiered transaction where he will buy a new truck and contr ibute his 2000 model year truck to

the owner of a 1990 truck. The owner of the old tr uck has agreed to scrap the old, heavy heavy-duty truck that is used exclusively to haul agricultural commodities. The old truck owner has provided conclusive documentati on that for the last three years the truck operated 100 percent of the time in the Centr al Valley region. The replacement truck will be equipped with a Level 3 diesel emissi on reduction system (DECS) and an electronic monitoring unit (EMU). The replacement truck is required to continue operating in the same vocation and location for the life of the project.

a. Fleet Modernization Transaction

Old Vehicle Information (Baseline Technology) :

• Model: 1990 heavy heavy-duty diesel truck

• Activity: 65,000 miles/year

• Vocation: Agriculture (qualifies as a target voc ation)

• Percent Operation in California: 100 percent

• Emission Rates (Table B-5): 21.11 g/mi NOx , 0.81 g/mi ROG, 1.354 g/mi PM10

Replacement Truck Information (Reduced Technology) :

• Model: 2000 heavy heavy-duty diesel truck

• Cost (quote provided with application): $50,000

• Emission Rates (Table B-5): 17.58 g/mi NOx, 0.51 g/mi ROG, 0.403 g/mi PM10

• DECS Cost: $19,100 (Level 3, 25 percent NOx + 85 percent PM Reduction)

• EMU Cost: $1,150 (Includes installation and monit oring for five years)D-18 EXAMPLE CALCULATIONS

Emission Reduction Calculations:

Formula C-8: Estimated Annual Emissions Based on M ileage Using Emission Factors 1. Annual NOx baseline technology emissions (21.11 g/mi * 65,000 mi) / (ton/907,200 g) = 1.51 tons/yr NOx 2. Annual NOx reduced technology emissions (17.58 g/mi * 65,000 mi) / (ton/907,200 g) = 1.26 tons/yr NOx 3. Annual ROG baseline technology emissions (0.81 g/mi * 65,000 mi) / (ton/907,200 g) = 0.06 tons/yr ROG 4. Annual ROG reduced technology emissions (0.51 g/mi * 65,000 mi) / (ton/907,200 g) = 0.04 tons/yr ROG 5. Annual PM10 baseline technology emissions (1.354 g/mi * 65,000 mi) / (ton/907,200 g) = 0.0 97 tons/yr PM10 6. Annual PM10 reduced technology emissions (0.403 g/mi * 65,000 mi) / (ton/907,200 g) = 0.02 9 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant

• NOx Emission Benefits = (1.51 -1.26) tons/yr = 0.25 tons/yr NOx

• ROG Emission Benefits = (0.06 - 0.04) tons/yr = 0.02 tons/yr ROG

• PM10 Emission Benefits = (0.097 - 0.029) tons/yr = 0.068 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions w ith DECS Emission Benefits of the Replacement Truck with the DECS providing an additional 25 percent NOx and 85 percent PM reduction

• NOx Emission Benefits = (1.26 tons/yr * 0.25) = 0.32 tons/yr NOx

• PM10 Emission Benefits = (0.029 tons/yr * 0.85) = 0.025 tons/yr PM10

Total NOx Emission Benefits 0.25 tons/yr + 0.32 tons/yr = 0.57 tons/yr NOx

Total PM10 Emission Benefits 0.068 tons/yr + 0.025 tons/yr = 0.093 tons/yr PM10

Formula C.2: Annual Weighted Surplus Emission Redu ctions 0.57 tons/yr + 0.02 tons/yr + 20(0.093 tons/yr) = 2.45 weighted tons/yr

Annualized Cost Project Life = 5 Years (target vocations are eligib le for 5 year project life) Capital Recovery Factor = 0.225 (Table B-1)

Incremental Cost NADA Value of Replacement Truck: $36,000

Replacement Truck + DECS + EMU = $36,000 + $19,100 + $1,150 = $56,250D-19 EXAMPLE CALCULATIONS

Formula C-12: Annualized Cost Incremental Cost * Capital Recovery Factor $56,250 * 0.225 = $12,656

Cost-Effectiveness Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($12,656/yr) / (2.45 weighted ton/yr)

= $5,166/ton of weighted surplus emissions reduced

b. New Vehicle Transaction

Baseline Technology Information:

• Baseline Technology: 2005 heavy heavy-duty diesel truck

• Cost (quote provide with application): $110,000

• Emission Rates (Table B-5): 11.63 g/mi NOx, 0.252 g/mi PM10

• Percent operation in California (application): 10 0 percent

Reduced Technology Information (New, Low Emission, Optional Standard Truck):

• Reduced technology (application): 2005 heavy-duty LNG truck certified to the

1.8 NOx + NMMC + 0.030 PM Standard

• Cost (quote provided with application): $150,000

• New LNG vehicle emission standard (Table B-2): 1. 44 g/bhp-hr NOx, 0.030 g/bhp-hr PM10

• Conversion factor to convert the standard to g/mi (Table B-8): 2.6 bhp-hr/mi

• Activity: 75,000 mi/year

Emission Reduction Calculations:

Formula C-8: Estimated Annual Emissions Based on M ileage Using Emission Factors (used for baseline calculations)

Formula C-9: Estimated Annual Emissions Based on M ileage Using Converted

Emission Standards (used for reduced calculations)

1. Annual NOx baseline technology emissions (11.63 g/mi * 75,000 mi/yr)(ton / 907,200 g) = 0 .96 tons/yr NOx 2. Annual NOx reduced technology emissions (1.44 g/bhp-hr * 2.6 bhp-hr/mi * 75,000 mi/yr)(ton / 907,200 g) = 0.31 tons/yr NOx 3. Annual PM10 baseline technology emissions (0.252 g/mi * 75,000 mi/yr)(ton / 907,200 g) = 0.0 21 tons/yr PM10 4. Annual PM10 reduced technology emissions (0.030 g/bhp-hr * 2.6 bhp-hr/mi * 75,000 mi/yr)(ton /907,200 g) = 0.006 tons/yr PM10

ROG emission factors not available for reduced tech nology therefore

ROG emission reductions cannot be calculated.D-20 EXAMPLE CALCULATIONS

Formula C-10: Annual Surplus Emission Reductions by Pollutant for New Purchases

• NOx emission benefits = 0.96 tons/yr – 0.31 tons /yr = 0.65 tons/yr NOx

• PM10 emission benefits = 0.021 tons/yr – 0.006 ton s/yr = 0.015 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.65 tons/year + 20(0.015) tons/year = 0.95 weigh ted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1) = 0.123

Formula C-14: Incremental Cost $150,000 - $110,000 = $40,000

Formula C-12: Annualized Cost $40,000 * 0.123 = $4,920/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surpl us Emission Reductions ($/ton) = ($4,920/yr) / (0.95 weighted tons/yr) = $5,179/ton of weighted surplus emissions reduced

c. Tiered Transaction Calculations

Annualized Cost of the Tiered Transaction Fleet Mod. Project Life: 5 Years (Target vocations have 5 year project life) CRF (Table B-1) = 0.225

New, Low NOx Truck Project Life: 10 Years CRF (Table B-1) = 0.123

Incremental Cost of the Tiered Transaction: (Incremental cost of the Fleet Mod Project from Sec tion a) + (Incremental cost of the New, Low NOx Project from section b) $56,250 + $40,000 = $96,250

Annualized Cost of the Tiered Transaction (Annualized Cost of Fleet Mod. Project from section a) + (Annualized Cost of New, Low NOx Project from section b) $12,656 + $4,920 = $17,576D-21 EXAMPLE CALCULATIONS

Emission Reductions Annual Weighted Surplus Emission Reductions of the Tiered Transaction

(Weighed Emissions Reductions of the Fleet Mod Proj ect) + (Weighed Emission Reductions of the New, Low-NOx Project)

(2.45 weighted tons/yr) + (0.95 weighted tons/yr) = 3.40 weighted tons/yr

Cost-Effectiveness of the Tiered Transaction Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) = ($17,567/yr) / (3.40 weighted tons/year) = $5,167/year of weighted surplus emissions reduced

In this example, the cost-effectiveness is less tha n the threshold of $14,300 per weighted ton of pollutants reduced. Both tiered tr ansaction project applicants qualify for the maximum amount of grant funds requested. A bre akdown of the project cost

follows:

• Carl Moyer Program incentives for the tiered trans action project:

Replacement truck (72 percent of $50,000 + full cost of EMU and retrofit) $ 56,250 New truck (Incremental cost) $ 40,000 Total Carl Moyer Program incentives $ 96,250

• Net cost of the tiered transaction to the fleet mo d. participant:

Cost of the replacement truck: $ 50,000 Cost of EMU and retrofit $ 20,250 Total cost of truck/EMU/retrofit $ 70,250

Carl Moyer Program Incentive -$56,250 Net cost to participant $14,000

• Net cost of the tiered transaction to the new low NOx truck purchaser:

Cost of the new, low NOx truck: $150,000 Value of the 2000 replacement truck: $ 50,000 Carl Moyer Program Incentive -$ 40,000 Payment received for replacement truck -$ 50,000 Net cost to participant for new truck $110,000D-22 EXAMPLE CALCULATIONS

III. Heavy-Duty Truck Idle Reduction

This section provides an example calculation for de termining the cost-effectiveness of surplus emission reductions for heavy-duty truck id ling reducing technology projects.

A. General Criteria for Heavy-Duty Truck Idling Red ucing Technologies

Cost-Effectiveness Calculations

• The actual capital cost, up to $5,500, of an APU m ay be funded.

• The installation cost of an APU, including install ation of an hour meter, up to a maximum of $1,700 per diesel APU and a maximum of $ 3,400 per alternative fuel, electric motor, or fuel cell APU, may be funded.

• The cost of a PM retrofit may be funded provided t he overall project cost effectiveness is under the limit of $14,300

• For these calculations, PM10 refers to combustion PM10.

• The minimum project life is three years.

• Annual hours of equipment operation for determinin g emission reductions must be based only on readings from an installed and fully operational hour meter. A properly functioning hour meter is required to supp ort equipment activity information included in the application for Carl Moyer Program funding.

• Applicants may claim ROG emission reductions from DECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduc tion of hydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emission reductions. For example, a technology that provides a 40 percen t emission reduction of hydrocarbons would be permitted to apply a 25 perce nt reduction in ROG emissions for determining eligibility and grant amount in the Carl Moyer Program.

• Default maximum project life: Off-road new purchase 10 years Off-road repower 7 years Repower + retrofit 5 years Retrofit 5 years Project life beyond the default maximum may be subm itted with documentation for approval by ARB.D-23 EXAMPLE CALCULATIONS

B. Example

Example 1 (Truck Stop Electrification (TSE) Project

A HDV truck operator proposes to install a TSE syst em consisting of an electrical plug, inverter/charger and electrical HVAC on a HDV to su bstitute shore power for the truck’s auxiliary power unit (APU). The APU operates 1,800 hours/year.

Annual Baseline Idling Hours at truck stop in Calif ornia: 1,800 Idling Power Requirement: 2.7 kilowatts = 1.99 hp

Idling Substitution Rate: 100% Conversion factor: 1 ton = 907,200g Estimated cost of electrical plug, inverter/charger

and electrical HVAC: $10,000

Estimated Installation Cost: $4,000 Amount Requested: $8,900

The truck idling emission rates for 2007 are: 191.5 gm/hr of NOx, 25.6 gm/hr of ROG and 1.5 gm/hr of PM ( Table B-9 ).

The APU idling emission factors for 2008 and subseq uent years are: 5.76 gm/bhp-hr for NOx, .57 gm/bhp-hr and 0.376 gm/ bhp-hr for PM ( Table B-10

).

Formula C-3 : Estimated Annual Emissions by Pollutant (tons/yr) : Truck emissions in 2007 are: NOx: (191.5 gm/hr)(1800 hrs/year)/(907,200 gm/ton) = 0.38 ton/yr ROG: (25.6 gm/hr)(1800 hrs/year)/(907,200 gm/ton) = 0.051 ton/yr PM: (1.5 gm/hr)(1800 hrs/year)/(907,200 gm/ton) = . 003 ton/yr

Formula C-10:

Annual Surplus Emission Reductions by Pollutant (t ons/yr) Baseline – Reduced (TSE is the reduced so emissions = 0) NOx = 0.38 ton/yr - (0.0 ton/yr) = 0.38 ton/yr ROG = 0.051 ton/yr - (0.0 ton/yr) = 0.051 PM : (0.003 ton/yr) – (0.0 ton/yr) = 0.003 ton/yr

Formula C-2: Annual Weighted Surplus Emission Reduc tions: Annual Weighted Surplus Emissions Reductions in 200 7: (0.38) + (0.051) + (20)(0.003) = 0.461 ton/yr

Formula C-3 : Estimated Annual Emissions by Pollutant (tons/yr) : APU emissions in 2008 are baseline: 4.14 gm/bhp-hr of NOx, 0.41 gm/bhp-hr of ROG and 0.152 gm/bhp-hr of PM ( Table B-10 ) NOx (4.14 gm/bhp-hr)(2 hp)(1800 hrs/yr)/(907,200 gm /ton) = 0.02 ton/yr ROG (0.41 gm/bhp-hr)(2 hp)(1800 hr/yr)/(907,200 gm/ ton = 0.002 ton/yrD-24 EXAMPLE CALCULATIONS

PM: (0.152 gm/bhp-hr)(2 hp)(1800 hrs/yr)(907,200 gm /ton) = 0.001 ton/yr

Reduced emissions in 2008 are the APU baseline valu es due to TSE = zero emissions

Formula C-2: Annual Weighted Surplus Emission Reduc tions: Annual Weighted Surplus Emissions Reductions in 200 8 are (0.02 ton/yr) + (.002 ton/yr)) + (20)(0.001 ton/yr) = 0.032 ton/yr

2009 is same as 2008

Average over three years is: ((0.461) + (0.032) + (.032))/(3) = 0.175 tons/yr

Cost and Cost-Effectiveness Calculations

The annualized cost is based on the installation co st of the electrification package, the expected life of the project (3 years), and the int erest rate (3%) used to amortize the project cost over the project life. The maximum am ount that can be funded by the Carl Moyer Program fund is determined as follows:

Electrification Capital Cost : $10,000 Electrification Installation Cost: $4,000 CMP Amount Requested: $8,900

Formula C-13 : Capitol Recovery Factor (CRF): [(1 + 0.04) 3 (0.04)]/[(1 + 0.04) 3 – 1]= 0.361
Formula C-12 : Annualized Cost ($): Annualized Cost (0.361)($8,900)= $3,213/yr Cost-Effectiveness (Based on weighted average emiss ions reduction) ($3,213/year)/(0.175 tons/year)= $18,360/ton

. Amount that would qualify: ($14,300)*(0.175)/(0.35) = $7,150

Project starts in 2008:

Annual Weighted Surplus Emissions Reductions in 200 8 are (0.02 ton/yr) + (.002 ton/yr)) + (20)(0.001 ton/yr) = 0.032 ton/yr

And this is the same for 2009 and 2010 for a three year project life.

So the cost effectiveness is:

($3,213/year)/(0.032 tons/year)= $ 100,093/ton

Amount that would qualify: ($14,300)*(0.032)/(0.361) = $1,268D-25 EXAMPLE CALCULATIONS

IV. Transport Refrigeration Units

This section provides two examples of calculations for determining the cost-effectiveness of surplus emission reductions f or TRU projects.

A. General Criteria for TRU Cost-Effectiveness Calc ulations:

• TRU emission reduction calculations will use eithe r fuel-based or hour-based

formula for cost-effectiveness calculations.

• Annual hours of equipment operation for determinin g emission reductions must be based only on readings from an installed and fully operational hour meter. A properly functioning hour meter is required to supp ort equipment activity information included in the application for CMP funding.

• TRU engine emissions increase with load. Load fact ors have been determined for TRU engines and have been found to vary by engine h orsepower category. Table B-11 shows the default load factors assigned for use in the Carl Moyer Program.

• Baseline and reduced engine emission factors are l isted in Table B-12 Appendix B.

• Applicants may claim ROG emission reductions from DECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduc tion of hydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emission reductions. For example, a technology that provides a 40 percen t emission reduction of hydrocarbons would be permitted to apply a 25 perce nt reduction in ROG emissions for determining eligibility and grant amount in the Carl Moyer Program.

B. Examples

Example 1 – Repower A TRU owner proposes to purchase and install a new engine in an existing trailer TRU that uses a 1999 model year TRU Tier 1 engine rated at 37.8 hp. From records, the owner knows the existing TRU engine has operated an average of 1,300 hours per year. The owner anticipates this operating trend w ill continue for the next three years. He doesn’t know what the TRU engine load factor is for his operations. Both the old and new operations occur 100 percent in California. The replacement engine will be a 2006 model year Tier 2 engine rated at 37.8 hp. Th e cost of the new certified engine will be $4,000; the cost to replace the existing en gine with a remanufactured 1999 model year engine is $3200. Installation and engin eering costs for the repower will beD-26 EXAMPLE CALCULATIONS

$700 greater than replacement with a remanufactured engine due to the need to modify

motor mounts.

Baseline Technology Information:

• Baseline technology (application): 1999 engine

• Emission factors (Table B-12): 5.26 g/bhp-hr NOx, 1.74 g/bhp-hr ROG, 0.480 g/bhp-hr PM10 (Tier 1)

• Engine rated HP (application): 37.8 hp

• Default load factor (Table B-11): 0.53

• Annual hours of operation (application): 1,300 ho urs

Reduced Technology Information:

• Reduced technology (application): 2006 engine

• Emission factors (Table B-12): 4.63 g/bhp-hr NOx, 0.29 g/bhp-hr ROG, 0.280 g/bhp-hr PM10 (Tier 2)

• Reduced engine rated HP (application): 37.8 hp

• Default load factor (Table B-11): 0.53

Emission Reduction Calculations:

Formula C-4: Estimated Annual Emissions based on Hours of Operation (tons/yr) 1. Annual NOx baseline technology emissions (5.26 g/bhp-hr)(37.80 hp)(0.53)(1,300 hrs/yr)(1 ton /907,200 g) = 0.15 tons/yr NOx 2. Annual NOx reduced technology emissions (4.63 g/bhp-hr)(37.80 hp)(0.53)(1,300 hrs/yr)(1 ton /907,200 g) = 0.13 ton/yr NOx 3. Annual ROG baseline technology emissions (1.74 g/bhp-hr)(37.80 hp)(.53)(1,300 hrs/yr)(1ton/9 07,200 g) = 0.05 tons/yr ROG 4. Annual ROG reduced technology emissions (0.290 g/bhp-hr)(37.80 hp)(0.53)(1,300 hrs/yr)(1 to n/907,200 g) = 0.01 ton/yr ROG 5. Annual PM10 baseline technology emissions (0.480 g/bhp-hr)(37.8 hp)(0.530)(1,300 hrs/yr)(1 to n/907,200 g)

= 0.014 tons/yr tons/yr PM10

6. Annual PM10 reduced technology emissions (0.280 g/bhp-hr)(37.80 hp)(0.530)(1,300 hrs/yr)(1 t on/907,200 g) = 0.008 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 0.15 tons/yr - 0.13 tons/y r = 0.01 tons/yr NOx

• ROG emission benefits = 0.05 tons/yr - 0.01 tons/y r = 0.04 tons/yr ROG

• PM10 emission benefits = 0.014 tons/yr - 0.008 ton s/yr = 0.006 tons/yr PM10D-27 EXAMPLE CALCULATIONS

Formula C-2: Annual Weighted Surplus Emission Red uctions: 0.01 + 0.04 + 20(0.006) = 0.17 weighted tons/yr

Annualized Cost: Project Life: 3 years CRF (Table B-1): = 0.360

Formula C -14: Incremental Cost: $4,000 + $700 - $3,200 = $1,500

Formula C-12: Annualized Cost $1,500 * 0.360 = $540/yr

Cost Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton): ($540yr)/(0.17 weighted ton/yr) = $3,176/ton of weighted surplus emissions reduce d

This project would qualify for a $1,500 Carl Moyer Program grant, covering all of the capital and installation costs of the project.

Example 2 – Retrofit A TRU owner decides to retrofit a 34 hp model year 2001 TRU Tier 1 engine with a verified Level 3 active diesel particulate filter ( DPF) system that uses a fuel-borne catalyst (FBC). The capital cost for the DPF syste m with FBC dosing unit is $2,800, including installation. The owner reports operatin g the TRU 2,000 hours per year. The project would commence by January 1, 2007. The app licant is willing to commit to a three year project life.

Surplus emissions from early compliance: Model year 2001 TRU engines must comply with the TR U ATCM's LETRU In-Use Performance Standard (Level 2 – 50 percent PM reduc tion) by the end of 2008. Model year 2001 TRU engines must also comply with the TRU ATCM’s ULETRU standard (Level 3 – 85 percent PM reduction) by the end of 2 015. Therefore, all of the emission reductions in 2007 and 2008 would be surplus. And, in the third year of the project, 2009, the surplus emissions would be 35 percent (85 percent minus 50 percent) of the baseline engine emissions. The ARB test data shows ROG reductions of 55 percent from use of the DPF. For the Carl Moyer Program, t he applicant may count a 50 percent ROG reduction for the cost-effectiveness calculation.

Baseline Technology Information:

• Baseline technology (application): 34 hp model ye ar 2001 TRU engine

• Baseline engine rated HP (application): 34 hp

• Default load factor (Table B-11): 0.53 (assumed t o stay constant before and after project)

• Annual hours of operation (application): 2,000 hr /yrD-28 EXAMPLE CALCULATIONS

• Emission factors (Table B-12): 1.74 g/bhp-hr ROG, 0.480 g/bhp-hr PM10

Reduced Technology Information:

• Reduced technology (application): Level 3 active diesel particulate filter (DPF) system that uses a fuel-borne catalyst (FBC).

• Retrofit verification emission level (EO): 50 perc ent ROG, 85 percent PM10

• Cost (quote provided by applicant): $2,800 for DP F system with FBC dosing including installation.

• Annual hours of operation (application): 2,000 hr

Emission Reduction Calculations

Formula C-4: Estimated Annual Emissions based on h ours of Operation (tons/yr) 1. Annual ROG baseline technology emissions (1.74 g/bhp-hr)(0.53)(2,000 hr)(1 ton/907,200 g) = 0.07 tons/yr ROG 2. Annual PM10 baseline technology emissions (0.480 g/bhp-hr)(34.00 hp)(0.530)(2,000 hrs/yr)(1 t on/907,200 g) = 0.019 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Retrofits

Estimated emission reductions are: 2007: 0.07 tons/yr * 0.50 = 0.04 tons/yr ROG 2008: 0.07 tons/yr * 0.50 = 0.04 tons/yr ROG 2009: 0.07 tons/yr * 0.50 = 0.04 tons/yr ROG

2007: 0.019 tons/yr * 0.85 = 0.016 tons/yr PM10 2008: 0.019 tons/yr * 0.85 = 0.016 tons/yr PM10 2009: 0.019 tons/yr * 0.35 = 0.007 tons/yr PM10

Average PM10 Reductions = (0.016 tons/yr PM10 + 0.0 16 tons/yr PM10 + 0.007 tons/yr PM10)/3 = 0.013 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.04 + 20(0.013) = 0.30 weighted tons/yr

Annualized Cost: Project Life: 3 years CRF (Table B-1): = 0.360

Formula C-14: Incremental Cost $2,800 – $0 = $2,800

(Note: Annual operating costs above normal (e.g., cost of FBC) cannot be paid for with Carl Moyer Program funds, but air districts may ele ct to pay for these with matching funds.)D-29 EXAMPLE CALCULATIONS

Formula C-12: Annualized Cost 0.360 * $2,800 = $1,008/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surpl us Emission Reductions ($/ton) ($1,008/yr)/(0.30 weighted ton/yr) =$3,360/ ton of weighted surplus emissions reduced

The cost-effectiveness is below the $14,300 thresho ld. This project would therefore qualify for a $2,800 Carl Moyer Program grant cover ing all of the capital costs and installation costs of the projectD-30 EXAMPLE CALCULATIONS

V. Off-Road Compression-Ignition Engines

This section provides four examples of calculations for determining the cost-effectiveness of surplus emission reductions f or off-road compression-ignition projects.

A. General Criteria for Off-Road Compression-Igniti on Engine

Cost-Effectiveness Calculations

• Off-road emission reduction calculations will use either fuel-based or hour-based formula for weighted cost-effectiveness calculation s.

• Annual hours of equipment operation for determinin g emission reductions must be based only on readings from an installed and fully operational hour meter. A properly functioning hour meter is required to supp ort equipment activity information included in the application for CMP funding.

• For applications or equipment not listed in Table B-13 in Appendix B, a default load

factor of 0.43 must be used.

• The replacement load factor should never exceed 10 0 percent in cases where the replacement engine is significantly smaller than th e existing engine

• Baseline and reduced engine emission factors are l isted in Table B-12 of Appendix B.

• For off-road equipment capable of operation with a new certified on-road engine instead of a new off-road engine (i.e., yard hostle rs, yard goats), emission benefits from the baseline engine will be based on an on-roa d engine. If an applicant provides sufficient documentation to show that past practices involve predominantly the use of off-road engines in yard hostlers, then an off-road engine emission factor

baseline can be used.

• For new purchases of off-road equipment powered by an on-road engine, emission benefits relative to the baseline engine are calcul ated based on on-road engine emission factors. If an applicant provides ARB wit h documentation showing that in past practice, the fleet has been powered by off-ro ad engines, then the baseline emission may be calculated using the off-road engin e emission factors.

• For calculations based on fuel consumption, use th e default energy consumption factor (ECF) of 18.5 bhp-hr/gallon.

• Default project life

Default

Off-road new purchase 10 yearsD-31 EXAMPLE CALCULATIONS

Off-road repower 7 years

Off-road repower and retrofit 5 years

Retrofit 5 years

Project life beyond the default project life may be submitted with documentation for approval by ARB.

• Applicants may claim ROG emission reductions from DECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduc tion of hydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emission reductions. For example, a technology that provides a 40 percen t emission reduction of hydrocarbons would be permitted to apply a 25 perce nt reduction in ROG emissions for determining eligibility and grant amount in the Carl Moyer Program.

B. Examples

Example 1 – Repower with a Tier 2 Engine and Retrof it with a Level 3 DECS A construction company wants to repower an uncontro lled scraper with a Tier 2 engine. The baseline engine is a 300 hp 1987 Caterpillar 33 06 that operates for 1,500 hours per year and would cost $11,500 to rebuild. The applic ant is proposing to install a 300 hp 2004 Caterpillar C9 that costs $80,000. This equip ment operates 100 percent of the time in California and has a project life of 5 year s. A Level 3 diesel particulate filter has been verified for use on a 2004 Caterpillar C9 engi ne and has a cost of $15,000. Since installation of a retrofit device is required for o ff-road projects if available and feasible, the cost-effectiveness of the project including the installation of the DECS must be

determined.

Baseline Technology Information:

• Engine: 1987 Caterpillar 3306

• HP (application): 300

• Hours of operation (application): 1,500

• Cost of rebuild (quote provided with application): $11,500

• Load factor (Table B-13): 0.72

• Emission factors (Table B-12): 10.23 g/bhp-hr NOx ; 1.01 g/bhp-hr ROG; 0.382 g/bhp-hr PM10

Reduced Technology Information:

• Engine: 2004 Caterpillar C9 (Executive Order U-R- 001-0247; Engine family 4CPXL08.8HSK)

• HP (application): 300

• Hours of operation (application): 1,500

• Cost of new engine (quote provided with applicatio n): $80,000D-32 EXAMPLE CALCULATIONS

• Load factor (Table B-13): 0.72

• Emission factors (Table B-12): 3.79 g/bhp-hr NOx; 0.12 g/bhp-hr ROG; 0.088 g/bhp-hr PM10

• Percent operating in California (application): 10 0 percent

• Retrofit: Level 3 verified reductions: 85 perce nt PM10

• Cost of retrofit (quote provided with application) : $15,000

Emission Reduction Calculations:

Formula C-4: Estimated Annual Emissions based on Hours of Operation (tons/yr) 1. Annual NOx baseline technology emissions 10.23 g/bhp-hr *300 hp*0.72*1500 hr*(ton/907,200 g) = 3.65 tons/yr NOx 2. Annual NOx reduced technology emissions 3.79 g/bhp-hr *300 hp*0.72*1500 hr*(ton/907,200 g) = 1.35 tons/yr NOx 3. Annual ROG baseline technology emissions 1.01 g/bhp-hr *300 hp* 0.72*1500 hr*(ton/907,200 g) = 0.36 tons/yr ROG 4. Annual ROG reduced technology emissions 0.12 g/bhp-hr *300 hp*0.72*1500 hr*(ton/907,200 g) = 0.04 tons/yr ROG 5. Annual PM10 baseline technology emissions 0.382 g/bhp-hr *300 hp*0.72*1500 hr*(ton/907,200 g) = 0.136 tons/yr PM10 6. Annual PM10 reduced technology emissions 0.088 g/bhp-hr *300 hp*0.72*1500 hr*(ton/907,200 g) = 0.031 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOx = 3.65 tons/yr - 1.35 tons/y r = 2.30 tons/yr NOx

• Emission benefits ROG = 0.36 tons/yr - 0.04 tons/ yr = 0.32 tons/yr ROG

• Emission benefits PM10 = 0.136 tons/yr - 0.031 ton s/yr = 0.105 tons/yr PM10

Formula C-11: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Retrofits 0.031 tons/yr PM10 * 0.85 = 0.026 tons/yr PM10

Total PM10 Emission Benefits 0.105 tons/yr + 0.026 tons/yr = 0.131 tons/yr PM1 0

Formula C-2: Annual Weighted Surplus Emission Redu ctions 2.30 tons/yr + 0.32 tons/yr + 20(0.131 tons/yr) = 5 .24 weighted tons/yr

Annualized Cost: Project Life: 5 years CRF (Table B-1): = 0.225

Formula C-14: Incremental Cost $95,000 - $11,500 = $83,500

Formula C-12: Annualized Cost 0.225 * $83,500 = $18,788D-33 EXAMPLE CALCULATIONS

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($18,788/yr)/(5.24 weighted tons/yr) = $3,585/tons of weighted surplus emissions reduced

Example 2 – New Purchase An applicant wants to purchase a new yard tractor w ith an LNG 250 hp on-road engine certified to ARB’s Heavy Duty Optional Standard (20 04 Cummins C Gas Plus 8.3 L) at a cost of $96,800. The applicant has provided docume ntation that they would normally have purchased a yard tractor with a 2004 250 hp Ti er 2 off-road diesel engine at a cost of $61,250. The annual hours of operation is 1,250 hours, the equipment operates 100 percent of the time in California, and has a pr oject life of 10 years. The default load

factor is 0.43.

Baseline Technology Information:

• Engine: 2004 Tier 2 off-road diesel engine

• HP (application): 250

• Annual hours of operation (application): 2,000

• Default load factor: 0.43

• Cost of new equipment (quote provided with applica tion): $61,250

• Emission factors (Table B-12): 4.15 g/bhp-hr NOx; 0.12 g/bhp-hr ROG; 0.088 g/bhp-hr PM10

Reduced Technology Information:

• Engine (application): 2004 Cummins C Gas Plus (Ex ecutive Order A-021-0362)

• HP (application): 250

• Annual hours of operation (application): 2,000

• Default load factor: 0.43

• Cost of new equipment (quote provided with applica tion): $96,800

• Converted emission standards (Table B-2): 1.44 g/ bhp-hr NOx; 0.030 g/bhp-hr PM10

• Percent operating in California (application): 10 0 percent

Emission Reduction Calculations:

Formula C-4: Estimated Annual Emissions based on h ours of Operation (tons/yr) 1. Annual NOx baseline technology emissions 4.15 g/bhp-hr *250 hp*0.43*2,000 hr*(ton/907,200 g) = 0.98 tons/yr NOx 2. Annual NOx reduced technology emissions 1.44 g/bhp-hr *250 hp*0.43*2,000 hr*(ton/907,200 g) = 0.34 tons/yr NOx 3. Annual PM10 baseline technology emissions 0.088 g/bhp-hr *250 hp*0.43*2,000 hr*(ton/907,200 g ) = 0.021 tons/yr PM10 4. Annual PM10 reduced technology emissions 0.030 g/bhp-hr *250 hp*0.43*2,000 hr*(ton/907,200 g ) = 0.007 tons/yr PM10D-34 EXAMPLE CALCULATIONS

ROG emission factors not available for reduced tech nology therefore ROG emission

reductions cannot be calculated.

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOx =0.98 tons/yr - 0.34 tons/yr = 0.64 tons/yr NOx

• Emission benefits PM10= 0.021 tons/yr - 0.007 tons /yr = 0.014 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.64 tons/yr + 20(0.014 tons/yr) = 0.92 weighted to ns/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1): = 0.123

Formula C-14: Incremental Cost $96,800 - $61,250 = $35,550

Formula C-12: Annualized Cost 0.123 * 35,550 = $4,373/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($4,373/yr)/ (0.92 weighted tons/yr) = $4,753/tons of weighted surplus emissions reduced

Example 3 – Auxiliary Engine Repower An applicant wants to repower the auxiliary engine of a street sweeper with a Tier 2 engine. The baseline engine is a Tier 1 200 hp eng ine that consumes an estimated 4,500 gallons fuel per year and would cost $7,000 t o rebuild. The applicant is proposing to install a 200 hp Tier 2 engine that costs $35,00 0. This equipment operates 100 percent of the time in California and has a pro ject life of 7 years. No retrofit device has been verified for this engine or equipment.

Baseline Technology Information:

• Engine (application): Tier 1 off-road diesel engi ne

• HP (application): 200 (not used for calculation, but used to determine appropriate emission factors)

• Annual fuel consumption (application): 4,500

• Cost of rebuild (quote provided with application): $7,000

• Energy consumption factor: 18.5 bhp-hr/gal

• Emission factors (Table B-12): 5.93 g/bhp-hr NOx; 0.38 g/bhp-hr ROG; 0.120 g/bhp-hr PM10D-35 EXAMPLE CALCULATIONS

Reduced Technology Information:

• Engine (application): Tier 2 off-road diesel engi ne

• HP (application): 200 (not used for calculation, but used to determine appropriate emission factors)

• Annual fuel consumption (application): 4,500 gall ons

• Cost of new equipment (quote provided with applica tion): $35,000

• Energy consumption factor: 18.5 bhp-hr/gal

• Emission factors (Table B-12): 4.15 g/bhp-hr NOx; 0.12 g/bhp-hr ROG; 0.088 g/bhp-hr PM10

• Percent operating in California (application): 10 0 percent

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standard (tons/yr) 1. Annual NOx baseline technology emissions 5.93 g/bhp-hr *18.5 bhp-hr/gal *4,500 gal*(ton/907, 200 g) = 0.54 tons/yr NOx 2. Annual NOx reduced technology emissions 4.15 g/bhp-hr *18.5 bhp-hr/gal *4,500 gal*(ton/907, 200 g) = 0.38 tons/yr NOx 3. Annual ROG baseline technology emissions 0.38 g/bhp-hr *18.5 bhp-hr/gal *4,500 gal*(ton/907, 200 g) = 0.03 tons/yr ROG 4. Annual ROG reduced technology emissions 0.12 g/bhp-hr *18.5 bhp-hr/gal *4,500 gal*(ton/907, 200 g) = 0.01 tons/yr ROG 5. Annual PM10 baseline technology emissions 0.120 g/bhp-hr *18.5 bhp-hr/gal *4,500 gal*(ton/907 ,200 g) = 0.011 tons/yr PM10 6. Annual PM10 reduced technology emissions 0.088 g/bhp-hr *18.5 bhp-hr/gal *4,500 gal*(ton/907 ,200 g) = 0.008 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOx = 0.54 tons/yr - 0.38 tons/y r = 0.16 tons/yr NOx

• Emission benefits ROG = 0.03 tons/yr - 0.01tons/y r = 0.02 tons/yr ROG

• Emission benefits PM10 = 0.011 tons/yr -0.008 tons /yr = 0.003 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.16 tons/yr + 0.02 tons/yr + 20(0.003 tons/yr) = 0.24 weighted tons/yr

Annualized Cost: Project Life: 7 years CRF (Table B-1): = 0.167

Formula C-14: Incremental Cost $35,000 - $7,000 = $28,000

Formula C-12: Annualized Cost 0.167 * $28,000 = $4,676D-36 EXAMPLE CALCULATIONS

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($4,676/yr/ (0.24 weighted tons/yr) = $19,483/tons of weighted surplus emissions reduce d

The cost-effectiveness for this example is greater than the $14,300 per weighted ton cost-effectiveness requirement. In order to meet t he $14,300 per weighted ton cost-effectiveness requirement, this project would only qualify for a fraction of the incremental cost $20,551. This amount is determine d by multiplying the maximum allowed cost --effectiveness by the estimated annua l emission reductions and divided by the capital recovery factor: ($14,300 * 0.24)/0.167 = $20,551

Example 4 – Retrofit of a Tier 1 Engine with a Leve l 2 DECS A Level 2 diesel oxidation catalyst with emulsified fuel has been verified for use on a yard tractor with a Tier 1 110 hp 2002 Case 4TA-390 engine. The cost of installing the retrofit is $2,000 and is verified for 50 percent r eductions of PM10 and 15 percent reductions of NOx. The yard tractor consumes 5,000 gallons of fuel per year. There is an incremental cost for the fuel of $0.20/ gallon t hat is eligible for funding with match funds by the district. The incremental cost was ca lculated with information provided from the applicant (i.e. quote from distributor). Retrofit projects have a maximum project life of 5 years.

Baseline Technology Information:

• Engine: 2002 Case 4TA-390

• Gallons consumed (application): 5,000 gal/yr

• Cost: $0

• Energy consumption factor: 18.5 bhp-hr/gal

• Emission factors (Table B-12): 6.54 g/bhp-hr NOx; 0.304 g/bhp-hr PM10

Reduced Technology Information:

• Level 2 verified reductions: 15 percent NOx; 50 p ercent PM10

• Cost of retrofit (quote provided with application) : $2,000

• Percent operating in California (application): 10 0 percent

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumption using Emission Factors or Converted Emission Standard (tons/yr) 1. Annual NOx baseline technology emissions 6.54 g/bhp-hr * 5,000 gal* 18.5 bhp-hr/gal *(ton/90 7,200 g) = 0.67 tons/yr NOx 2. Annual PM10 baseline technology emissions 0.304 g/bhp-hr * 5,000 gal * 18.5 bhp-hr/gal *(ton/ 907,200 g) = 0.031 tons/yr PM10D-37 EXAMPLE CALCULATIONS

Formula C-11: Annual Surplus Emission Reductions by Pollutant (tons/yr) for retrofits

• 0.67 tons/yr * 0.15 = 0.10 tons/yr NOx

• 0.031 tons/yr * 0.50 = 0.016 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 0.10 tons/yr + 0 tons/yr + 20(0.016 tons/yr) = 0.42 weighted tons/yr

Annualized Cost: Project Life: 5 years CRF (Table B-1): = 0.225

Formula C-14: Incremental Cost $2,000 - $0 = $2,000

Formula C-12: Annualized Cost 0.225 * $2,000 = $450

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($450/yr)/(0.42 weighted tons/yr) = $1,071/tons of weighted surplus emissions reduced

Calculations with incremental cost of fuel paid for with district funds (if district chooses to provide funding for increased fuel cost)

5,000 gal/ yr * 5 years project life * $0.20/gal = $5,000

District may pay up to $5,000 for incremental cost of fuel.

Annualized Cost: Project Life: 5 years CRF (Table B-1): = 0.225

Formula C-14: Incremental Cost ($2,000 + $5,000) - $0 = $7,000

Formula C-12: Annualized Cost 0.225 * $7,000 = $1,575

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($1,575/yr)/(0.34 weighted tons/yr) = $4,632/tons of weighted surplus emissions reducedD-38 EXAMPLE CALCULATIONS

VI. Large Spark-Ignition Off-Road Equipment

Example calculations will be included once project criteria are developed.D-39 EXAMPLE CALCULATIONS

VII. Ground Support Equipment

Sample calculations will be added once project crit eria are developed.D-40 EXAMPLE CALCULATIONS

VIII. Locomotives

This section provides four examples of calculations for determining cost-effectiveness of surplus emission reductions for locomotive projects

.

A. General Criteria for Locomotive Cost-Effectivene ss Calculations

• Baseline emissions for a locomotive engine repower are based upon federal emission requirements for engine remanufacture (see Chapter VIII, Section III) and the corresponding emission rates in Table B-16. Ba seline costs for a locomotive engine repower equal the actual remanufacture cost or $50,000, whichever is
greater.

• For the purposes of the Carl Moyer Program, an alt ernative technology switcher is defined as a hybrid (e.g., Green Goat) or multiple engine switcher in which an existing locomotive chassis is significantly refurb ished with a new engine, batteries, electronic controls, and/or other equipment. An al ternative technology switcher must

meet Tier 2 locomotive emission standards for PM an d hydrocarbons and be 30 percent cleaner than Tier 2 locomotive emission standards for NOx. An alternative technology switcher project is consider ed a new locomotive purchase.

• Baseline emissions for an alternative technology s witcher project reflect Tier 0

emission rates for Class I locomotives and uncontro lled emission rates for Class III locomotives. The cost of an alternative technology switcher eligible for Carl Moyer Program funding shall not exceed 60 percent of the total cost of the new switcher for Class I locomotives, and 80 percent of the total co st of the new switcher for Class III

locomotives.

• Baseline emissions and costs for a new locomotive purchase project which is not an alternative technology switcher reflect Tier 2 emis sion rates and the cost of a new Tier 2 locomotive, respectively.

• Locomotive repower projects must achieve a 15 perc ent NOx reduction beyond existing emission levels.

• All locomotive purchase and repower projects (exce pt alternative technology switchers) must include purchase and installation o f an automatic engine start-stop (AESS) ILD to reduce unnecessary engine idling if t he locomotive is not already equipped with such a device and AESS installation i s technically feasible.

• If not already required by a rule, regulation, MOU , or other legal mandate, the purchase and installation cost of an AESS is eligib le for Carl Moyer Program funding, subject to the following limitations:

− The Carl Moyer Program may provide actual equipmen t costs up to a maximum of $8,000 for a locomotive-specific AESS.D-41 EXAMPLE CALCULATIONS

− The Carl Moyer Program may provide the lower amoun t of actual installation costs of the AESS, up to a maximum of $3,400.

− AESS emission reductions are calculated by applyin g the ILD factors in Table B-17 to the reduced engine emissions.

• Because of uncertainty in locomotive load factors, locomotive project activity must be based upon annual fuel consumption.

• The energy consumption rate for a locomotive engin e is 20.8 bhp-hr per gallon. The energy consumption rate for an on- or off-road engi ne used in a locomotive application is 18.5 bhp-hr per gallon.

• Class I freight locomotive projects in all air dis tricts other than the South Coast must have a minimum project life of ten years. All othe r locomotive projects have a minimum project life of three years.

• The maximum project life for a locomotive project is 20 years.

• The baseline emission rates used to determine emis sion reductions and cost-effectiveness for locomotives subject to the S outh Coast MOU reflect the Tier 2

locomotive emission factors for line-haul and switc h locomotives identified in

Table B-16.

• Benefits of an AESS are reflected by applying the ILD factor to the newer locomotive engine only if: 1) the project locomotive is operat ed by a Class 3 railroad or Amtrak; 2) the baseline engine does not have a functioning AESS; and 3) a functioning AESS is to be installed on the project locomotive. The ILD factor is never used to

calculate the cost-effectiveness of new locomotive purchase projects or for Class 1 locomotive projects (since Class 1 locomotives are required to install an AESS as part of the Statewide Locomotive MOU). The ILD emi ssion reduction factor is found in Table B-17. Example 1 utilizes the ILD fac tor to calculate the costeffectiveness of a Class 3 locomotive repower.

• For alternative technology switcher projects, fuel consumption for the new locomotive may differ from baseline fuel consumptio n if the new locomotive fuel use is sufficiently documented to ARB and air district staff.

B. Examples

Example 1 – Switch Locomotive Engine Repower (Class III Railroad) A Class III railroad operator opts to replace an ex isting 1971 model year switch locomotive engine with a new 2006 model year Tier 2 locomotive engine. The existing locomotive consumes 40,000 gallons of fuel per year . The cost to rebuild the existing engine is $48,000, while the cost to purchase and i nstall the new engine is $350,000. The cost to purchase an automatic engine start-stop ILD is $8,000, while installation ofD-42 EXAMPLE CALCULATIONS

the device costs $3,000. The railroad company will commit to a 10 year project life.

Emission reductions are calculated as follows:

Baseline Technology Information:

• Locomotive model year (application): 1971

• Locomotive emission rate (Table B-16): 15.66 g/bh p-hr NOx, 0.99 g/bhp-hr ROG, 0.396 g/bhp-hr PM10

• Activity (application): 40,000 gal/year

• Energy consumption factor = 20.8 bhp-hr/gal

Reduced Technology Information:

• Engine model year (application): 2006

• Emission rate (Table B-16): 6.57 g/bhp-hr NOx, 0. 51 g/bhp-hr ROG, 0.189 g/bhp-hr PM10

• Activity (application): 40,000 gal/year

• Energy consumption factor = 20.8 bhp-hr/gal

• ILD emission reduction factor (Table B-17): 0.90

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on Fu el Consumed using Emission Factors or Converted Emission Standard (tons/yr): 1. Annual NOx baseline technology emissions (15.66 g/bhp-hr*40,000 gal/yr*20.8 bhp-hr/gal)*(ton /907,200g) = 14.36 ton/yr NOx 2. Annual NOx reduced technology emissions (6.57 g/bhp-hr*40,000 gal/yr*20.8 bhp-hr/gal*0.90)* (ton/907,200g) = 5.42 ton/yr NOx 3. Annual ROG baseline technology emissions (0.99 g/bhp-hr *40,000 gal/yr*20.8 bhp-hr/gal)*(ton /907,200g) = 0.91 ton/yr ROG 4. Annual ROG reduced technology emissions (0.51 g/bhp-hr*40,000 gal/yr*20.8 bhp-hr/gal *0.90) *(ton/907,200g) = 0.42 ton/yr ROG 5. Annual combustion PM10 baseline technology (0.396 g/bhp-hr*40,000 gal/yr*20.8 bhp-hr/gal)*(ton /907,200g) = 0.363 ton/yr PM10 6. Annual combustion PM10 reduced technology emissi ons (0.189 g/bhp-hr*40,000 gal/yr*20.8 bhp-hr/gal *0.90 )*(ton/907,200g) = 0.156 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers

and New Purchases

• NOx emission benefits = 14.36 tons/yr – 5.42 tons /yr = 8.94 tons/yr NOx

• ROG emission benefits = 0.91 tons/yr - 0.42 tons/ yr = 0.49 tons/yr ROG

• PM10 emission benefits= 0.363 tons/yr - 0.156 tons /yr = 0.207 tons/yr PM10D-43 EXAMPLE CALCULATIONS

Formula C-2: Annual Weighted Surplus Emission Reduc tions 8.94 tons/yr + 0.49 tons/yr + 20(0.207 tons/yr) = 1 3.57 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1): = 0.123

Formula C-14: Incremental Cost ($350,000 + $11,000) - $50,000 = $311,000

Formula C-12: Annualized Cost 0.123 * $311,000 = $38,253/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($38,253/yr)/(13.57 weighted tons/yr) = $2,819/tons of weighted surplus emissions reduced

Example 2 – Line-Haul Locomotive Engine Repower (Cl ass I Railroad) A Class I railroad operator opts to replace his exi sting 1976 line-haul locomotive engine with a new 2006 model year Tier 2 locomotive engine . Based on the fuel receipts, it is determined that the existing and new locomotive eng ines will consume 75,000 gallons of fuel per year. The cost to rebuild the existing engine is $65,000, while the cost of the new engine plus installation is $390,000. The rail road will commit to a 20 year project

life. Emission reductions are calculated as follow s:

Baseline Technology Information:

• Locomotive model year (application): 1976

• Emission rate (Table B-16): 7.74 g/bhp-hr NOx, 0. 47 g/bhp-hr ROG, 0.288 g/bhp-hr PM10

• Activity (application): 75,000 gal/year

• Energy consumption factor = 20.8 bhp-hr/gal

Reduced Technology Information:

• Engine model year (application): 2006

• Emission rate (Table B-16): 4.50 g/bhp-hr NOx, 0. 26 g/bhp-hr ROG, 0.153 g/bhp-hr PM10

• Activity (application): 75,000 gal/year

• Energy consumption factor = 20.8 bhp-hr/galD-44 EXAMPLE CALCULATIONS

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standard (tons/yr): 1. Annual NOx baseline technology emissions (7.74 g/bhp-hr * 20.8 bhp-hr/gal * 75,000 gal/yr) * (ton/907,200g) = 13.31 ton/yr NOx 2. Annual NOx reduced technology emissions (4.50 g/bhp-hr * 20.8 bhp-hr/gal * 75,000 gal/yr) * (ton/907,200g) = 7.74 ton/yr NOx 3. Annual ROG baseline technology emissions (0.47 g/bhp-hr * 20.8 bhp-hr/gal * 75,000 gal/yr) * (ton/907,200g) = 0.81 ton/yr ROG 4. Annual ROG reduced technology emissions (0.26 g/bhp-hr * 20.8 bhp-hr/gal * 75,000 gal/yr) * (ton/907,200g) = 0.45 ton/yr ROG 5. Annual combustion PM10 baseline technology (0.288 g/bhp-hr * 20.8 bhp-hr/gal * 75,000 gal/yr) *(ton/907,200g) = 0.495 ton/yr PM10 6. Annual combustion PM10 reduced technology emissi ons (0.153 g/bhp-hr * 20.8 bhp-hr/gal * 75,000 gal/yr) *(ton/907,200g) = 0.263 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOx = 13.31 tons/yr - 7.74 tons/ yr = 5.57 tons/yr NOx

• Emission benefits ROG = 0.81 tons/yr - 0.45 tons/y r = 0.36 tons/yr ROG

• Emission benefits PM10 = 0.495 tons/yr - 0.263 ton s/yr = 0.232 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 5.57 tons/yr + 0.36 tons/yr + 20(0.232 tons/yr) = 1 0.57 weighted tons/yr

Annualized Cost: Project Life: 20 years CRF (Table B-1): = 0.074

Formula C-14: Incremental Cost $390,000 - $65,000 = $325,000

Formula C-12: Annualized Cost 0.074 * $325,000 = $24,050/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($24,050/yr)/(10.57 weighted tons/yr) = $2,275/tons of weighted surplus emissions reducedD-45 EXAMPLE CALCULATIONS

Example 3 – Hybrid Switch Locomotive Purchase (Clas s I Railroad) A Class I railroad has the opportunity to purchase a locomotive frame refurbished with an 800 horsepower Tier 2 certified off-road engine. Because the project is a hybrid locomotive project, and involves significantly refu rbishing the existing locomotive frame with a new battery and other equipment, the project is considered a new locomotive purchase. A typical switcher with activity similar to that of the new locomotive consumes 45,000 gallons fuel per year. The applica nt provides documentation to demonstrate the new advanced technology switcher wi ll reduce fuel consumption by 33 percent. The cost of the locomotive project is $1.1 million. The project life is 10 years. Emission reductions are calculated as fo llows:

Baseline Technology Information:

• Baseline locomotive model year: none

• Baseline emission rates (reflect locomotive Tier 0 emission factors, Table B-16): 11.34 g/bhp-hr NOx, 0.99 g/bhp-hr ROG, 0.396 g/bhp- hr PM

• Activity (application): 45,000 gal/year

• Energy consumption factor = 20.8 bhp-hr/gal

Reduced Technology Information:

• Engine model year: 2006

• Reduced emission rates (reflect off-road Tier 2 em ission factors, Table B-12): 3.87 g/bhp-hr NOx, 0.12 g/bhp-hr ROG, 0.088 g/bhp-h r PM10

• Activity (application): 30,000 gal/year

• Energy consumption factor = 18.5 bhp-hr/gal

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standard (tons/yr): 1. Annual NOx baseline technology emissions (11.34 g/bhp-hr * 45,000 gal/yr * 20.8 bhp-hr/gal) *(ton/907,200g) = 11.70 ton/yr NOx 2. Annual NOx reduced technology emissions (3.87 g/bhp-hr * 30,000 gal/yr * 18.5 bhp-hr/gal) * (ton/907,200g) = 2.37 ton/yr NOx

3. Annual ROG baseline technology emissions (0.99 g/bhp-hr * 45,000 gal/yr * 20.8 bhp-hr/gal) * (ton/907,200g) = 1.02 ton/yr ROG 4. Annual ROG reduced technology emissions (0.12 g/bhp-hr * 30,000 gal/yr * 18.5 bhp-hr/gal) * (ton/907,200g) = 0.07 ton/yr ROG 5. Annual combustion PM10 baseline technology (0.396 g/bhp-hr * 45,000 gal/yr * 20.8 bhp-hr/gal) *(ton/907,200g) = 0.409 ton/yr PM10D-46 EXAMPLE CALCULATIONS

6. Annual combustion PM10 reduced technology emissi ons (0.088 g/bhp-hr * 30,000 gal/yr * 18.5 bhp-hr/gal) *(ton/907,200g) = 0.054 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers

and New Purchases

• Emission benefits NOx = 11.70 tons/yr – 2.37 tons/ yr = 9.33 tons/yr NOx

• Emission benefits ROG = 1.02 tons/yr - 0.07 tons/y r = 0.95 tons/yr ROG

• Emission benefits PM10 = 0.409 tons/yr - 0.054 ton s/yr = 0.335 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Reduc tions 9.33 tons/yr + 0.95 tons/yr + 20(0.335 tons/yr) = 1 6.98 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1): = 0.123

Formula C-14: Incremental Cost $1,100,000 * 0.60 = $660,000

Formula C-12: Annualized Cost 0.123 * $660,000 = $81,180/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($81,180/yr)/(16.98 weighted tons/yr) = $4,781/tons of weighted surplus emissions reduced

Example 4 – Multiple Engine Switcher Purchase (Clas s III Railroad) A Class III railroad operator has the opportunity t o purchase a switch locomotive with three Tier 3 certified 700 horsepower off-road engi nes. Because this is a multiple engine switcher with new electronics, a new battery , and other components, the project is evaluated as a new locomotive purchase. Fuel re ceipts indicate other switch locomotives with the same activity in the rail yard consume 45,000 gallons of fuel per year. The cost of the new multiple engine switcher is $975,000. The project life is 5 years. Emission reductions are calculated as fol lows:

Baseline Technology Information:

• Locomotive model year: none

• Locomotive emission rate (uncontrolled, Table B-16 ): 15.66 g/bhp-hr NOx, 0.99 g/bhp-hr ROG, 0.396 g/bhp-hr PM10

• Activity (application): 45,000 gal/year

• Energy consumption factor = 20.8 bhp-hr/galD-47 EXAMPLE CALCULATIONS

Reduced Technology Information:

• Engine model year: 2006

• Emission rates (reflect off-road Tier 3 emission f actors, Table B-12): 2.32 g/bhp-hr NOx, 0.12 g/bhp-hr ROG, 0.088 g/bhp-h r PM10

• Activity (application): 45,000 gal/year

• Energy consumption factor = 18.5 bhp-hr/gal

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standard (tons/yr): 1. Annual NOx baseline technology emissions (15.66 g/bhp-hr * 45,000 gal/yr * 20.8 bhp-hr/gal) *(ton/907,200g) = 16.16 ton/yr NOx 2. Annual NOx reduced technology emissions (2.32 g/bhp-hr * 45,000 gal/yr * 18.5 bhp-hr/gal) * (ton/907,200g) = 2.13 ton/yr NOx 3. Annual ROG baseline technology emissions (0.99 g/bhp-hr * 45,000 gal/yr * 20.8 bhp-hr/gal) * (ton/907,200g) = 1.02 ton/yr ROG 4. Annual ROG reduced technology emissions (0.12 g/bhp-hr * 45,000 gal/yr * 18.5 bhp-hr/gal) * (ton/907,200g) = 0.11 ton/yr ROG 5. Annual combustion PM10 baseline technology (0.396 g/bhp-hr * 45,000 gal/yr * 20.8 bhp-hr/gal) *(ton/907,200g) = 0.409 ton/yr PM10 6. Annual combustion PM10 reduced technology emissi ons (0.088 g/bhp-hr * 45,000 gal/yr * 18.5 bhp-hr/gal) *(ton/907,200g) = 0.081 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions by Pollutant (tons/yr) for Repowers

and New Purchases

• Emission benefits NOx = 16.16 tons/yr – 2.13 to ns/yr = 14.03 tons/yr NOx

• Emission benefits ROG = 1.02 tons/yr – 0.11 tons/ yr = 0.91 tons/yr ROG

• Emission benefits PM10 = 0.409 tons/yr – 0.081 ton s/yr = 0.328 tons/yr PM10 Formula C-2: Annual Weighted Surplus Emission Reduc tions 14.03 tons/yr + 0.91 tons/yr + 20(0.328 tons/yr) = 21.50 weighted tons/yr

Annualized Cost: Project Life: 5 years CRF (Table B-1): = 0.225

Formula C-14: Incremental Cost $975,000 * 0.80 = $780,000

Formula C-12: Annualized Cost 0.225 * $780,000 = $175,500/yrD-48 EXAMPLE CALCULATIONS

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($175,500/yr)/(21.50 weighted tons/yr) = $8,163/tons of weighted surplus emissions reducedD-49 EXAMPLE CALCULATIONS

IX. Marine Vessels

This section provides three examples of calculation s for determining the cost-effectiveness of surplus emission reductions f or marine vessel projects.

A. General Criteria for Marine Vessel Cost-Effectiv eness Calculations

• Engines on marine vessels with wet exhaust systems are eligible for Carl Moyer Program funding if the project vessel meets all oth er applicable program requirements. The wet exhaust systems themselves a re not eligible for Carl Moyer Program funding. A wet exhaust factor of 0.80 must be applied to the baseline and reduced emission propulsion and auxiliary engine em ission calculations for all projects on vessels with wet exhaust systems.

• Projects must have a minimum project life of three years.

• The maximum project life for marine vessel project s (equivalent to the average engine life reported by U.S. EPA) is as follows: Engine displacement < 5.0 liter/cyl. 16 years Engine displacement >5.0 liter/cyl. 23 years Auxiliary engines 17 years

B. Examples

Example 1 – Tugboat Propulsion Engine Repower A tugboat operator wishes to replace a 1975 model y ear 1,200 horsepower tugboat propulsion engine during the normal overhaul period with a 2006 model year 1,200 horsepower engine. Both engines have a displ acement of 7.0 liters per cylinder. The operator documents that the vessel consumes 95, 000 gallons of fuel annually

within California Coastal Waters. The cost to rebu ild the old engine is $100,000. The cost to purchase and install the new engine and new GPS unit on the vessel are $250,000 and $2,500, respectively. The operator co mmits to a 5 year project life.

Emission reductions are calculated as follows:

Baseline Technology Information:

• Baseline technology (application): 1975

• Engine horsepower (application): 1,200 hp

• Engine emission rate (Table B-18): 11.16 g/bhp-hr NOx, 1.14 g/bhp-hr ROG, 0.382 g/bhp-hr PM10

• Activity (application): 95,000 gal/yr

• Engine displacement (application): 7.0 liters/cyl inder

• Fuel consumption rate (Table B-20): 20.8 bhp-hr/g al

Reduced Technology Information:

• Reduced technology (application): 2005

• Engine horsepower (application) = 1,200 hpD-50 EXAMPLE CALCULATIONS

• Engine emission rate (Table B-18): 7.60 g/bhp-hr NOx, 0.82 g/bhp-hr ROG, 0.274 g/bhp-hr PM10

• Activity (application): 95,000 gal/yr

• Fuel consumption rate (Table B-20): 20.8 bhp-hr/g al

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standards (tons/yr) 1. Annual NOx baseline technology emissions (11.16 g/bhp-hr)(95,000 gal/yr)(20.8 bhp-hr/gal)(to n/907,200 g) = 24.31 ton/yr NOx 2. Annual NOx reduced technology emissions (7.60 g/bhp-hr * 95,000 gal/yr * 20.8 bhp-hr/gal)(t on/907,200 g) = 16.55 ton/yr NOx 3. Annual ROG baseline technology emissions (1.14 g/bhp-hr * 95,000 gal/yr * 20.8 bhp-hr/gal)(t on/907,200 g) = 2.48 ton/yr ROG 4. Annual ROG reduced technology emissions (0.82 g/bhp-hr * 95,000 gal/yr * 20.8 bhp-hr/gal)(t on/907,200 g) = 1.79 ton/yr ROG 5. Annual PM10 baseline technology emissions (0.382 g/bhp-hr * 95,000 gal/yr * 20.8 bhp-hr/gal)( ton/907,200 g) = 0.832 ton/yr PM10 6. Annual PM10 reduced technology emissions (0.274 g/bhp-hr * 95,000 gal/yr * 20.8 bhp-hr/gal)( ton/907,200 g) = 0.597 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission reductions = 24.31 tons/yr – 16.55 to ns/yr = 7.76 tons/yr NOx

• ROG emission reductions = 2.48 tons/yr – 1.79 tons /yr = 0.69 tons/yr ROG

• PM10 emission reductions = 0.832 tons/yr – 0.597 t ons/yr= 0.235 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 7.76 + 0.69 +20(0.235) = 13.15 weighted tons/yr

Annualized Cost: Project life = 5 years CRF (Table B-1) = 0.225

Formula C-14: Incremental Cost ($250,000 + $2,500) - $100,000 = $152,500

Formula C-12: Annualized Cost ($152,500 * 0.225) = $34,312/yrD-51 EXAMPLE CALCULATIONS

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Surplus Emissio n Reductions ($34,312/year)/(13.15 weighted tons/yr) = $2,609/ton of weighted surplus emissions reduced

Example 2 – Fishing Vessel Auxiliary Engine Repower A charter fishing vessel owner wishes to repower a 125 horsepower 1985 auxiliary engine with a new 2005 model year 200 horsepower en gine. The new engine has a displacement 1.3 liters per cylinder. The vessel o wner has documented that the vessel auxiliary engine operates for 900 hours annually in California waters. The cost to rebuild the existing engine is $2,600. The cost to purchase and install a new engine and GPS unit is $52,500. The applicant will commit to a 10 year project life. Emission

reductions are calculated as follows:

Baseline Technology Information:

• Baseline technology (application): 1985

• Engine horsepower (application): 125 hp

• Engine emission rate (Table B-18): 10.23 g/bhp-hr NOx, 1.06 g/bhp-hr ROG, 0.396 g/bhp-hr PM10

• Activity (application): 900 hr/yr

• Engine load factor (Table B-19): 0.43

Reduced Technology Information:

• Reduced technology (application): 2005

• Engine horsepower (application) = 200 hp

• Emission rate (Table B-18): 4.17 g/bhp-hr NOx, 0. 39 g/bhp-hr ROG, 0.160 g/bhp-hr PM10

• Activity (application): 900 hr/yr

• Engine displacement (application) = 1.3 liters per cylinder

• Load adjustment ( Formula C-5: Replacement Load Factor ): = 0.43*(125 hp/200 hp) = 0.27

Emission Reduction Calculations:

Formula C-4: Estimated Annual Emissions based on H ours of Operation (tons/yr) 1. Annual NOx baseline technology emissions (10.23 g/bhp-hr * 900 hr/yr * 125 hp * 0.43)(ton/90 7,200 g) = 0.55 ton/yr NOx 2. Annual NOx reduced technology emissions (4.17 g/bhp-hr * 900 hr/yr * 200 hp * 0.27)(ton/907 ,200 g) = 0.22 ton/yr NOx 3. Annual ROG baseline technology emissions (1.06 g/bhp-hr * 900 hr/yr * 125 hp * 0.43)(ton/907 ,200 g) = 0.06 ton/yr ROG 4. Annual ROG reduced technology emissions (0.39 g/bhp-hr * 900 hr/yr * 200 hp * 0.27)(ton/907 ,200 g) = 0.02 ton/yr ROGD-52 EXAMPLE CALCULATIONS

5. Annual PM10 baseline technology emissions (0.396 g/bhp-hr * 900 hr/yr * 125 hp * 0.43)(ton/90 7,200 g = 0.021 ton/yr PM10 6. Annual PM10 reduced technology emissions (0.14 g/bhp-hr * 900 hrs/year * 200 hp * 0.27)(ton/ 907,200 g) = 0.008 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission reductions = 0.55 tons/yr – 0.22 tons /yr = 0.33 tons/yr NOx

• ROG emission reductions = 0.06 tons/yr – 0.02 tons /yr = 0.04 tons/yr ROG

• PM10 emission reductions = 0.021 tons/yr – 0.008 t ons/yr= 0.013 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.33 tons/yr + 0.04 tons/yr + 20(0.013 tons/yr) = 0 .63 weighted tons/yr

Annualized Cost: Project life = 10 years CRF (Table B-1) = 0.123

Formula C-14: Incremental Cost $52,500 - $2,600 = $49,900

Formula C-12: Annualized Cost ($49,900 * 0.123) = $6,137/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($6,137/year)/ (0.63 weighted tons/yr) = $9,741/ton of weighted surplus emissions reduced

Example 3 – Fishing Vessel Propulsion Engine Repowe r (Wet Exhaust System) A commercial fishing vessel owner wishes to repower a 1973 250 horsepower propulsion engine with a new 2006 model year 250 ho rsepower engine. The existing and replacement engines both have a displacement of 1.4 liters per cylinder. The vessel has a wet exhaust system. The vessel owner has documented that the vessel propulsion engine consumes 24,000 gallons of fuel a nnually in California waters. The cost to rebuild the existing engine is $3,250. The cost to purchase and install a new engine is $51,300. The vessel will be outfitted wi th a new GPS unit for $2,300. The applicant will commit to a 5 year project life. Em ission reductions are calculated as

follows:

Baseline Technology Information:

• Baseline technology (application): 1973

• Engine horsepower (application): 250 hpD-53 EXAMPLE CALCULATIONS

• Engine emission rate (Table B-18): 11.16 g/bhp-hr NOx, 1.14 g/bhp-hr ROG, 0.396 g/bhp-hr PM10

• Activity (application): 24,000 gal/yr

• Engine displacement (application): 1.4 liters/cyl inder

• Fuel consumption rate (Table B-20): 18.5 bhp-hr/g al

• Wet exhaust emission factor (default): 0.80

Reduced-Emission Technology Information:

• Reduced technology (application): 2006

• Engine horsepower (application): 250 hp

• Emission rate (Table B-18): 4.17 g/bhp-hr NOx, 0. 39 g/bhp-hr ROG, 0.160 g/bhp-hr PM10

• Activity (application): 24,000 gal/yr

• Engine displacement (application): 1.4 liters per cylinder

• Fuel consumption rate (Table B-20): 18.5 bhp-hr/g al

• Wet exhaust emission factor (default) = 0.80

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions based on F uel Consumed using Emission Factors or Converted Emission Standard (tons/yr) 1. Annual NOx baseline technology emissions (11.16 g/bhp-hr * 24,000 gal/yr * 18.5 bhp-hr/gal * 0.80)(ton/907,200 g) = 4.30 ton/yr NOx 2. Annual NOx reduced technology emissions (4.17 g/bhp-hr * 24,000 gal/yr * 18.5 bhp-hr/gal * 0.80)(ton/907,200 g) = 1.63 ton/yr NOx 3. Annual ROG baseline technology emissions (1.14 g/bhp-hr * 24,000 gal/yr * 18.5 bhp-hr/gal * 0.80)(ton/907,200 g) = 0.45 ton/yr ROG 4. Annual ROG reduced technology emissions (0.39 g.bhp-hr * 24,000 gal/yr * 18.5 bhp-hr/gal * 0.80)(ton/907,200 g) = 0.15 ton/yr ROG 5. Annual PM10 baseline technology emissions (0.396 g/bhp-hr * 24,000 gal/yr * 18.5 bhp-hr/gal * 0.80)(ton/907,200 g) = 0.155 ton/yr PM10 6. Annual PM10 reduced technology emissions (0.160 g/bhp-hr * 24,000 gal/yr * 18.5 bhp-hr/gal * 0.80)(ton/907,200 g) = 0.063 ton/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant for Repowers and

New Purchases

• NOx Emission Reductions = 4.30 tons/yr – 1.63 tons /yr = 2.67 tons/yr NOx

• ROG Emission Reductions = 0.45 tons/yr – 0.15 tons /yr = 0.30 tons/yr ROG

• PM10 Emission Reductions = 0.155 tons/yr – 0.063 t ons/yr = 0.092 tons/yr PM10D-54 EXAMPLE CALCULATIONS

Formula C-2: Annual Weighted Surplus Emission Redu ctions 2.67 + 0.30 +20(0.092) = 4.81 weighted tons/yr

Annualized Cost: Project life = 5 years CRF (Table B-1) = 0.225

Formula C-14: Incremental Cost ($51,300 + 2,300) - $3,250 = $50,350

Formula C-12: Annualized Cost $50,350 * 0.225 = $11,328/yr

Cost Effectiveness: Formula C-1: Cost-Effectiveness of Surplus Emissio n Reductions ($11,328/year)/(4.81 weighted tons/yr) = $2,355/ ton of weighted surplus emissions reducedD-55 EXAMPLE CALCULATIONS

X. Agricultural Sources

This section provides three examples of calculation s for determining the cost-effectiveness of surplus emission reductions f or agricultural source projects.

A. General Criteria for Agricultural Source Cost-Ef fectiveness

Calculations

• Projects must have a minimum project life of three years. ARB may approve a shorter project life on a case-by-case basis. Proj ects with shorter lives may be subject to additional funding restrictions, such as a lower cost-effectiveness limit or a project cost cap.

• The default project life when determining project benefits for new purchases to repowers shall be ten years for electric motors and for engines with documentation. The default project life for engines without docume ntation shall be seven years. A longer project life may be used with approval by ARB staff, however, sufficient documentation must be provided to ARB that supports the selected project life based on actual remaining useful life.

• In these calculations PM10 refers to combustion pa rticulate matter.

• Emission reduction calculations may be based on ho urs of operation or on fuel

usage.

• Baseline and reduced technology emission factors a re listed in Tables B-12 and B-14a of Appendix B.

• Load factors for selected equipment categories are in Tables B-13 and B-14b of Appendix B.

• For emission reduction calculations based on fuel usage, an energy consumption factor must be used. The default energy consumptio n factor for stationary agricultural irrigation pump engines greater than 5 0 hp is 17.56 bhp-hr/gal.

B. Examples

Example 1 - Repower (diesel to diesel) Based on Hou rs

Baseline Technology Information:

• Baseline technology (application): 1977 John Dee re JD6466A

• Engine horsepower (application): 182 hp

• Activity (application): 3,000 hours per year

• Load factor (Table B-13): 0.65

• Emission factors (Table B-12): 11.16 g/bhp-hr NOx ; 1.14 g/bhp-hr ROG; 0.396 g/bhp-hr PM10D-56 EXAMPLE CALCULATIONS

• Baseline rebuild cost (quote provided with applica tion): $3,500

Reduced Technology Information:

• Reduced technology (application): 2005 John Deere 6068HF275-225

• Engine horsepower (application): 184 hp

• Activity (application): 3,000 hr/yr

• Load factor (Table B-13): 0.65

• Emission factors (Table B-12): 4.15 g/bhp-hr NOx; 0.12 g/bhp-hr ROG; 0.088 g/bhp-hr PM10

• New engine cost (quote provided with application): $20,320 (includes hour meter)

Emission Reduction Calculations : Formula C-4: Estimated Annual Emissions Based on H ours of Operation (tons/yr) 1. Annual NOx baseline technology emissions (11.16 g/bhp-hr * 182 hp * 0.65 * 3,000 hrs)(ton/90 7,200 g) = 4.37 tons/yr NOx 2. Annual NOx reduced technology emissions (4.15 g/bhp-hr * 184 hp * 0.65 * 3,000 hrs)(ton/907 ,200 g) = 1.64 tons/yr NOx 3. Annual ROG baseline technology emissions (1.14 g/bhp-hr * 182 hp * 0.65 * 3,000 hrs)(ton/907 ,200 g) = 0.45 tons/yr ROG 4. Annual ROG reduced technology emissions (0.12 g/bhp-hr * 184 hp * 0.65 * 3,000 hrs)(ton/907 ,200 g) = 0.05 tons/yr ROG 5. Annual PM10 baseline technology emissions (0.396 g/bhp-hr * 182 hp * 0.65 * 3,000 hrs)(ton/90 7,200 g) = 0.155 tons/yr PM10 6. Annual PM10 reduced technology emissions (0.088 g/bhp-hr * 184 hp * 0.65 * 3,000 hrs)(ton/90 7,200 g) = 0.035 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 4.37 tons/yr – 1.64 ton s/yr = 2.73 tons/yr NOx

• ROG emission benefits = 0.45 tons/yr – 0.05 tons /yr = 0.40 tons/yr ROG

• PM10 emission benefits = 0.155 tons/yr – 0.035 ton s/yr = 0.120 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 2.73 tons/yr + 0.40 tons/yr + 20(0.120 tons/yr) = 5.53 weighted tons/yr

Annualized Cost: Project life: 7 years CRF (Table B-1): 0.167

Formula C-14: Incremental Cost $20,320 - $3,500 = $16,820

Formula C-12: Annualized Cost 0.167 * $16,820 = $2,809/yrD-57 EXAMPLE CALCULATIONS

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($2,809/yr)/(5.53 weighted tons/yr) = $508/tons of weighted surplus emissions reduced

The cost-effectiveness for this project is less tha n $14,300 per weighted ton of emissions reduced. This project qualifies for the maximum amount of grant funds requested.

Example 2 - Repower (diesel to diesel) Based on Fue l Use

Baseline Technology information:

• Baseline Technology (application): 1979 Cummins N TC 220

• Engine horsepower (application): 220 hp

• Annual fuel consumption (application): 8,000 gal/ yr

• Energy consumption factor (default): 17.56 bhp-hr /gal

• Emission Factors (Table B-12): 11.16 g/bhp-hr NOx ; 1.20 g/bhp-hr ROG; 0.396 g/bhp-hr PM1010

• Rebuild cost (quote provided with application): $ 2,500

Reduced Technology information:

• Reduced Technology (application): 2005 Case I-H P X190

• Engine horsepower (application): 190 hp

• Energy consumption factor (default): 17.56 bhp-hr /gal

• Annual fuel consumption (application): 8,000 gal/ yr

• Emission Factors (Table B-12): 4.15 g/bhp-hr NOx; 0.12 g/bhp-hr ROG; 0.088 g/bhp-hr PM1010

• New engine cost (quote provided with application): $16,500 (includes hour meter)

Emission Reduction Calculations:

Formula C-6: Estimated Annual Emissions Based on F uel Consumed using Emission Factors or Converted Emission Standard (tons/yr) 1. Annual NOx baseline technology emissions (11.16 g/bhp-hr * 17.56 bhp-hr/gal * 8,000 gal)(ton /907,200 g) = 1.73 tons/yr NOx 2. Annual NOx reduced technology emissions (4.15 g/bhp-hr * 17.56 bhp-hr/gal * 8,000 gal)(ton/ 907,200 g) = 0.64 tons/yr NOx 3. Annual ROG baseline technology emissions (1.20 g/bhp-hr * 17.56 bhp-hr/gal * 8,000 gal)(ton/ 907,200 g) = 0.19 tons/yr ROG 4. Annual ROG reduced technology emissions (0.12 g/bhp-hr * 17.56 bhp-hr/gal * 8,000 gal/yr)(t on/907,200 g) = 0.02 tons/yr ROG 5. Annual PM10 baseline technology emissions (0.396 g/bhp-hr * 17.56 bhp-hr/gal * 8,000 gal)(ton /907,200 g) = 0.061 tons/yr PM10 6. Annual PM10 reduced technology emissions (0.088 g/bhp-hr * 17.56 bhp-hr/gal * 8,000 gal/yr)( ton/907,200 g) = 0.014 tons/yr PM10D-58 EXAMPLE CALCULATIONS

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 1.73 tons/yr – 0.64 tons/y r = 1.09 tons/yr NOx

• ROG emission benefits = 0.19 tons/yr – 0.02 tons/y r = 0.17 tons/yr ROG

• PM10 emission benefits = 0.061 tons/yr – 0.014 ton s/yr = 0.047 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Red uctions 1.09 tons/yr + 0.17 tons/yr + 20(0.047 tons/yr) = 2.20 weighted tons/yr

Annualized Cost: Project life: 7 years CRF (Table B-1): 0.167

Formula C-14: Incremental Cost $16,500 - $2,500 = $14,000

Formula C-12: Annualized Cost 0.167 * $14,000 = $2,338/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($2,338/yr)/(2.20 weighted tons/yr) = $1,063/tons of weighted surplus emissions reduced

The cost-effectiveness for this project is less tha n $14,300 per weighted ton of emissions reduced. This project qualifies for the maximum amount of grant funds requested.

Example 3 – Natural Gas Repower Based on Hours

Baseline Technology information:

• Baseline Technology (application): 1980 Detroit D iesel 8V71

• Engine horsepower (application): 220 hp

• Activity (application): 2,000 hours per year

• Load factor (Table B-13): 0.65

• Emission Factors (Table B-12): 10.23 g/bhp-hr NOx ; 1.08 g/bhp-hr ROG; 0.396 g/bhp-hr PM10

• Rebuild cost (quote provided with application): $ 6,000

Reduced Technology information:

• Reduced Technology (application): 2005 Cummins GT A 8.3

• Engine horsepower (application): 200 hp

• Activity (application): 2,000 hr/yr

• Load factor (calculated using Formula C-5): 0.65 * (220 hp/200 hp) = 0.72

• Emission Factors (Table B-14a): 1.58 g/bhp-hr NOx; 0.13 g/bhp-hr ROG; 0.060 g/bhp-hr PM10D-59 EXAMPLE CALCULATIONS

• New engine cost (quote provided with application): $29,000 (includes hour meter)

Emission Reduction Calculations:

Formula C-4: Estimated Annual Emissions Based on H ours of Operation (tons/yr) 1. Annual NOx baseline technology emissions (10.23 g/bhp-hr * 220 hp * 0.65 * 2,000 hrs)(ton/90 7,200 g) = 3.23 tons/yr NOx 2. Annual NOx reduced technology emissions (1.58 g/bhp-hr * 200 hp * 0.72 * 2,000 hrs)(ton/907 ,200 g) = 0.50 tons/yr NOx 3. Annual ROG baseline technology emissions (1.08 g/bhp-hr * 220 hp * 0.65 * 2,000 hrs)(ton/907 ,200 g) = 0.34 tons/yr ROG 4. Annual ROG reduced technology emissions (0.13 g/bhp-hr * 200 hp * 0.72 * 2,000 hrs)(ton/907 ,200 g) = 0.04 tons/yr ROG 5. Annual PM10 baseline technology emissions (0.396 g/bhp-hr * 220 hp * 0.65 * 2,000 hrs)(ton/90 7,200 g) = 0.125 tons/yr PM10 6. Annual PM10 reduced technology emissions (0.060 g/bhp-hr * 200 hp * 0.72 * 2,000 hrs)(ton/90 7,200 g) = 0.019 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• NOx emission benefits = 3.23 tons/yr – 0.50 tons/y r = 2.73 tons/yr NOx

• ROG emission benefits = 0.34 tons/yr – 0.04 tons/y r = 0.30 tons/yr ROG

• PM10 emission benefits = 0.125 tons/yr – 0.019 ton s/yr = 0.106 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 2.73 tons/yr + 0.30 tons/yr + 20(0.106 tons/yr) = 5.15 weighted tons/yr

Annualized Cost: Project life: 7 years CRF (Table B-1): 0.167

Formula C-14: Incremental Cost $29,000 - $6,000 = $23,000

Formula C-12: Annualized Cost 0.167 * $23,000 = $3,841/yr

Cost-Effectiveness: Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($3,841/yr)/(5.15 weighted tons/yr) = $746/tons of weighted surplus emissions reduced

The cost-effectiveness for this project is less tha n $14,300 per weighted ton of emissions reduced. This project qualifies for the maximum amount of grant funds requested.D-60 EXAMPLE CALCULATIONS

XI. Light-Duty Vehicles

This section provides an example calculation for de termining the cost-effectiveness of surplus emission reductions for light-duty vehicle projects.

A. General Criteria for Light-Duty Vehicle Cost-Eff ectiveness

Calculations

• Emission reductions from VAVR programs shall be ca lculated in accordance with the methodology specified in the ARB’s VAVR regulations . Emission reductions, by model year of vehicle retired, are shown in Table 1 1-2. (The table is also included in Appendix B, Tables for Emission-Reduction and Cost- Effectiveness Calculations, at Table B-21.)

• The project life for a vehicle retirement project is three years as specified in the ARB’s VAVR regulation.

• In calculating cost-effectiveness, the total cost is the full cost paid by the district using State funds (i.e, the total paid to the enter prise operator to retire a vehicle, not just the amount paid to the vehicle owner).

• Cost-effectiveness is calculated without interim r ounding to the annualized cost or the annual weighted surplus emission reduction.

• For these calculations, PM10 refers to combustion PM10.

B. Examples

Example 1 - Voluntary Accelerated Vehicle Retiremen t Project A district pays $750 to retire a 1980 model year li ght-duty vehicle during calendar year 2006. Please note that the cost of $750 is the tot al cost paid by the district with Carl Moyer Program or AB 923 funds to the enterpris e operator to retire the vehicle, not just the amount paid to the vehicle owner.

Emissions Reduction Calculations:

Table B-21 lists the emission reductions over the 3 year project life in pounds.

• NOx emission benefit = 85 pounds over 3 years (from Table B-21) = (85 lb)/[(3 yrs)*(2000 lb/ton)] = 0.0142 tons/yr NOx

• ROG emission benefit = 129 pounds over 3 years (from Table B-21) = (129 lb)/[(3 yrs)*(2000 lb/ton)] = 0.0215 tons/yr ROGD-61 EXAMPLE CALCULATIONS

• PM10 emission benefit = 1.13 pounds over 3 years (from Table B-21) = (1.13 lb)/[(3 yrs)*(2000 lb/ton)] = 0.000188 tons /yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.0142 + 0.0215 + 20*(0.000188) = 0.0394 weighted tons/yr

Annualized Cost:

Project life: 3 years CRF (Table B-1) = 0.360

Total cost: $750

Formula C-12: Annualized cost 0.360 * $750 = $270/yr

Cost-Effectiveness:

Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/ton) ($270/yr)/(0.0394 weighted tons/yr) = $6,850/weighted ton of surplus emissions reducedD-62 EXAMPLE CALCULATIONS

XII. Zero-Emission Technologies

This section provides several examples of calculati ons for determining the cost-effectiveness of surplus emission reductions f or zero-emission projects.

A. General Criteria for Zero-Emission Technology Co st-Effectiveness

Calculations

Electrically Driven Agricultural Pumps

• Agricultural pumps that use an electric motor may use a 10 year project life for calculating cost effectiveness.

• All electric-driven agricultural pumps must have a functioning kilowatt-hour meter, or other method approved by the local air district, to monitor usage.

• Participants in the PG&E/SCE rate incentive progra ms must use Tier 3 engine emission factors for calculating reduced technology emissions.

• Participants in the PG&E/SCE rate incentive progra ms may use one-half the rebuild cost for calculating incremental cost.

• Participants in the PG&E/SCE rate incentive progra ms who are replacing a baseline Tier 2 engine still under contract with the Carl Mo yer Program may use zero rebuild cost in calculating incremental cost.

• For these calculations, PM10 refers to combustion PM10.

• The minimum project life is three years.

Electric Idle Reduction

• The actual capital cost, up to $5,500, of an APU m ay be funded.

• The installation cost of an APU, including install ation of an hour meter, up to a maximum of $3,400 per electric motor or fuel cell A PU may be funded.

B. Examples

Example 1 – Replacing a Diesel Pump Engine with a E lectric Pump Motor: Not

Participating in PG&E/SCE Incentive Program An applicant wants to purchase a 2005 GE 5K445FT328 , 100 hp (75 kW) electric pump motor to replace a 1991 Caterpillar 3116, 155 hp di esel pump engine with uncontrolled emissions. The motor costs $26,700; otherwise the applicant would have to rebuild the diesel engine at a cost of $7,000. On average, the applicant currently operates theD-63 EXAMPLE CALCULATIONS

diesel pump engine at 65 percent of the maximum loa d rating for 2,000 hours each year. The pump operates 100 percent of the time in California.

Baseline Technology Information:

• Engine (application): 1991 Caterpillar 3116, dies el off-road engine (uncontrolled)

• Engine HP (application): 155 hp

• Load factor (default for agricultural pumps): 0.6 5

• Activity (application): 2,000 hours per year

• Cost rebuild (quote provided with application): $ 7,000

• Emission factors (Table B-12): 7.60 g/bhp-hr NOx; 0.82 g/bhp-hr ROG; 0.274 g/bhp-hr PM10

Reduced Technology Information:

• Engine (application): 2005 GE 5K445FT328, electri c motor

• Engine HP (application): 100 hp (75 kW)

• Activity (application): 2,000 hours per year

• Percent operate in California (application): 100 percent

• Cost of new equipment (quote provided with applica tion): $26,700

• Emissions: 0 g/bhp-hr NOx; 0 g/bhp-hr ROG; 0 g/bh p-hr PM10

Emission Reduction Calculations : Formula C-4: Estimated Annual Emissions Based on H ours of Operation 1. Annual NOx baseline technology emissions (7.60 g/hp-hr *155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 1.69 tons/yr NOx 2. Annual NOx reduced technology emissions = 0 ton s/yr 3. Annual ROG baseline technology emissions (0.82 g/hp-hr *155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.18 tons/yr ROG 4. Annual ROG reduced technology emissions = 0 ton s/yr 5. Annual PM10 baseline technology emissions (0.274 g/hp-hr *155 hp *0.65 * 2,000 hrs)/(907,200 g/ton) = 0.061 tons/yr PM 6. Annual PM10 reduced technology emissions = 0 t ons/yr

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOx = 1.69 tons/yr - 0 tons/yr = 1.69 tons/yr NOx

• Emission benefits ROG = 0.18 tons/yr - 0 tons/yr = 0.18 tons/yr ROG

• Emission benefits PM10 = 0.061 tons/yr - 0 tons/yr = 0.013 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 1.69 + 0.18 + 20(0.061) = 3.09 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1) = 0.123D-64 EXAMPLE CALCULATIONS

Formula C-14: Incremental Cost $26,700 – $7,000 = $19,700

Formula C-12: Annualized Cost $19,700 * 0.123 = $2,423/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/weighted ton) ($2,423/yr)/(3.09 weighted ton/yr)

= $784/weighted ton of surplus emissions reduced

The cost-effectiveness for the example is less than $14,300 per weighted ton of pollutants reduced. This project qualifies for the maximum amount of grant funds requested.

Example 2 – Replacing a Diesel Pump Engine with a E lectric Pump Motor:

Applicant Is Participating in PG&E/SCE Incentive Pr ogram An applicant wants to purchase a 2005 GE 5K445FT328 , 100 hp (75 kW) electric pump motor to replace a 1991 Caterpillar 3116, 155 hp di esel pump engine with uncontrolled emissions. The motor costs $26,700; otherwise the applicant would have to rebuild the diesel engine at a cost of $7,000. On average, the applicant currently operates the diesel pump engine at 65 percent of the maximum loa d rating for 2,000 hours each year. The pump operates 100 percent of the time in California. The applicant is eligible and has been accepted in the PG&E/SCE rate incentiv e program.

Baseline Technology Information:

• Engine (application): 1991 Caterpillar 3116, dies el off-road (uncontrolled)

• Engine HP (Application): 155 hp

• Load factor (default for agricultural pumps): 0.6 5

• Activity (application): 2,000 hours per year

• Cost to rebuild (quote provided with application): $7,000

• Emission factors (Table B-12): 7.60 g/bhp-hr NOx; 0.82 g/bhp-hr ROG; 0.274 g/bhp-hr PM10

Reduced Technology Information:

• Engine (application): 2005 GE 5K445FT328, electri c

• Engine HP (application): 100 hp (75 kW)

• Activity (application): 2,000 hours per year

• Percent operate in California (application): 100 percent

• Cost of new equipment (quote provided with applica tion): $26,700

• Emissions: Applicant can only claim emission benef its from baseline to a comparable Tier 3 engine

.D-65 EXAMPLE CALCULATIONS

Electric motor: 0 g/bhp-hr NOx; 0 g/bhp-hr ROG; 0 g/bhp-hr PM Tier 3 155 hp diesel engine (Table B-12): 2.32 g/bhp-hr NOx; 0.12 g/bhp-hr RO G; 0.112g/bhp-hr PM10

Emission Reduction Calculations : Formula C-4: Estimated Annual Emissions Based on H ours of Operation 1. Annual NOx baseline technology emissions (7.60 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 1.69 tons/yr NOx 2. Annual NOx Tier 3 technology emissions (2.32 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.52 tons/yr NOx 3. Annual ROG baseline technology emissions (0.82 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.18 tons/yr ROG 4. Annual ROG Tier 3 technology emissions (0.12 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.03 tons/yr ROG 5. Annual PM10 baseline technology emissions (0.274 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,20 0 g/ton) = 0.061 tons/yr PM10 6. Annual PM10 Tier 3 technology emissions (0.112 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,20 0 g/ton) = 0.025 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOX = 1.69 tons/yr- 0.52 tons/yr = 1.17 tons/yr NOx

• Emission benefits ROG = 0.18 tons/yr - 0.03 tons/ yr = 0.15 tons/yr ROG

• Emission benefits PM10 = 0.061 tons/yr - 0.025 ton s/yr = 0.036 tons/yr PM10

Formula C.2 – Annual Weighted Surplus Emission Redu ctions 1.17 + 0.15 + 20(0.036) = 2.04 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1) = 0.123

Formula C-14: Incremental Cost $26,700 – ($7,000/2) = $23,200 *Applicant may use o ne-half rebuild cost for baseline, as per criteria

Formula C-12: Annualized Cost $23,200 * 0.123 = $2,854/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/weighted ton) ($2,854/yr)/(2.04 weighted ton/yr) = $1,399/weighted ton of surplus emissions reducedD-66 EXAMPLE CALCULATIONS

The cost-effectiveness for the example is less than $14,300 per weighted ton of pollutants reduced. This project qualifies for the maximum amount of grant funds requested.

Example 3 – Replacing a Diesel Pump Engine with a E lectric Pump Motor:

Applicant Is Participating in PG&E/SCE Incentive Pr ogram and Replaced Engine Is a CMP-Funded Tier 2 Engine

An applicant wants to purchase a 2005 GE 5K445FT328 , 100 hp (75 kW) electric pump motor to replace a Tier 2 155 hp diesel pump engine . The motor costs $26,700. On average, the applicant currently operates the diese l pump engine at 65 percent of the maximum load rating for 2,000 hours each year. The pump operates 100 percent of the time in California. The Tier 2 engine was purchase d with Carl Moyer Program funds three years ago, and is still under contract. The engine has not reached its rebuild interval. The applicant is eligible and has been a ccepted in the PG&E/SCE rate incentive program.

Baseline Technology Information:

• Engine (application): 2004 Tier 2 diesel off-road

• Engine HP (application): 155 hp

• Load factor(default for agricultural pumps): 0.65

• Activity (application): 2,000 hours per year

• Cost rebuild (quote provided with application): $ 0

• Emission factors (Table B-12): 4.17 g/bhp-hr NOx; 0.19 g/bhp-hr ROG; 0.128 g/bhp-hr PM10

Reduced Technology Information:

• Engine (application): 2005 GE 5K445FT328, electri c

• Engine HP (application): 100 hp (75 kW)

• Activity (application): 2,000 hours per year

• Percent operate in California (application): 100 percent

• Cost of new equipment (quote provided with applica tion): $26,700

• Emissions: Applicant can only claim emission benef its from baseline to a comparable Tier 3 engine. Tier 3 155 hp diesel engine (Table B-12): 2.32 g/bhp-hr NOx; 0.12 g/bhp-hr RO G; 0.112g/bhp-hr PM10

Emission Reduction Calculations : Formula C-4 - Estimated Annual Emissions based on H ours of Operation 1. Annual NOx baseline technology emissions (4.17 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.93 tons/yr NOx 2. Annual NOx Tier 3 technology emissions (2.32 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.52 tons/yr NOx 3. Annual ROG baseline technology emissionsD-67 EXAMPLE CALCULATIONS

(0.19 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.04 tons/yr ROG 4. Annual ROG Tier 3 technology emissions (0.12 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,200 g/ton) = 0.03 tons/yr ROG 5. Annual PM10 baseline technology emissions (0.128 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,20 0 g/ton)= 0.028 tons/yr PM10 6. Annual PM10 Tier 3 technology emissions (0.112 g/hp-hr * 155 hp * 0.65 * 2,000 hrs)/(907,20 0 g/ton)= 0.025 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOX = 0.93 tons/yr- 0.52 tons/yr = 0.41 tons/yr NOx

• Emission benefits ROG = 0.04 tons/yr - 0.03 tons/y r = 0.01 tons/yr ROG

• Emission benefits PM10= 0.028 tons/yr - 0.025 tons /yr = 0.003 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.41 tons/yr + 0.01 tons/yr + 20(0.003 tons/yr) = 0.480 weighted tons/yr

Annualized Cost: Project Life: 10 years CRF (Table B-1) = 0.123

Formula C-14: Incremental Cost $26,700 – $0* = $26,700 *Applicant may use a rebuil d cost of $0 since the project is still under Moyer contract and has not reached a re build

interval.

Formula C-12: Annualized Cost $26,700 * 0.123 = $3,284/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/weighted ton) ($3,284/yr)/(0.480 weighted ton/yr) = $6,842/weighted ton of surplus emissions reduced

The cost-effectiveness for the example is less than $14,300 per weighted ton of pollutants reduced. This project qualifies for the maximum amount of grant funds requested.

Example 4 – Electric Idle Reduction Package Replace s Main Diesel Engine Idling An applicant wants to purchase an electric package that includes an electric HVAC, a large alternator, and inverter/charger and a lead a cid battery pack. These units will replace all idling that uses the truck’s main propu lsion engine. The package costs $10,000 and another $2,000 for installation. The ap plicant currently idles his 1999 MY truck engine an average of 1,250 hours each year.D-68 EXAMPLE CALCULATIONS

Baseline Technology Information:

• Main engine model year (application): 1999

• Annual hours of idling (application): 1,250

• Main Engine idling emission rate (Table B-9): 171 .00 g/hr NOx, 34.28 g/hr ROG, g/hr 2.28 PM10

Reduced Technology Information:

• 110 VAC, 60 Hz HVAC (8300 BTU) ; 270 A alternator; lead acid battery pack; inverter/charger (applicati on)

• Annual hours of idling (application): 1,250

• Percent operate in California (application): 100 percent

• Cost of new equipment (quote provided with applica tion): $10,000

• Cost of installation (quote provided with applicat ion): $2,000

• Electric emission rates: 0 g/bhp-hr NOx; 0 g/bhp -hr ROG; 0 g/bhp-hr PM10

Emission Reduction Calculations : Formula C-4: Estimated Annual Emissions based on H ours of Operation 1. Annual NOx baseline technology emissions (171.00 g/hr * 1,250 hrs)/(907,200 g/ton) = 0.24 tons/yr NOx 2. Annual NOx reduced technology emissions = 0 t ons/yr NOx 3. Annual ROG baseline technology emissions (34.28 g/hr * 1,250 hrs)/(907,200 g/ton) = 0.05 tons/yr ROG 4. Annual ROG reduced technology emissions = 0 to ns/yr ROG 5. Annual combustion PM10 baseline technology emiss ions (2.28 g/hr * 1,250 hrs)/(907,200 g/ton) = 0.003 tons/yr PM10 6. Annual combustion PM10 reduced technology emissi ons = 0 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y Pollutant (tons/yr) for Repowers and New Purchases

• Emission benefits NOX = 0.24 tons/yr - 0 tons/yr = 0.24 tons/yr NOx

• Emission benefits ROG = 0.05 tons/yr - 0 tons/yr = 0.05 tons/yr ROG

• Emission benefits PM10 = 0.003 tons/yr - 0 tons/yr = 0.003 tons/yr PM10

Formula C-2: Annual Weighted Surplus Emission Redu ctions 0.24 tons/yr + 0.05 tons/yr + 20(0.003 tons/yr) = 0.350 weighted tons/yr

Annualized Cost: Project Life: 5 years CRF (Table B-1) = 0.225

Formula C-14: Incremental Cost Capital cost: $10,000 CMP will pay up to $5 ,500, as per guideline criteria Installation cost: $2,000 $5,500 + $2,000= $7,500D-69 EXAMPLE CALCULATIONS

Formula C-12: Annualized Cost $7,500 * 0.225 = $1,688/yr

Cost-Effectiveness : Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions ($/weighted ton) ($1,688/yr)/( 0.350 weighted ton/yr)

= $4,823/weighted ton of surplus emissions reduced

The cost-effectiveness for the example is less than $14,300 per weighted ton of pollutants reduced. This project qualifies for the maximum amount of grant funds requested.

Example 5 – Purchase of TRU with Electric Standby O ption The TRU owner proposes to purchase a TRU that is eq uipped with electric standby in lieu of one without this option. This would virtua lly eliminate TRU engine operation while the TRU is at the facility. The TRU owner ha s submitted records that show his fleet of facility-controlled TRUs has operated an a verage of three hours per day of TRU engine run time while at the facility. The increme ntal cost of the E/S option is $2,000. Facility infrastructure would cost $5,000. TRUs op erate at the facility 360 days per year. The new TRU would be equipped with a 2006 eng ine rated at 36.2 hp to maintain cooling when the truck is not at the facility.

Baseline Technology

• Engine rating = 36.2 hp

• Model year = 2006

• Default load factor = 0.53

• Emission factors (Table B-12): 4.63 g/bhp-hr NOx , 0.29 g/bhp-hr ROG, 0.280 g/bhp-hr PM10

Reduced Technology

• Electric standby = zero emissions

• Annual TRU engine activity replaced with electric standby = (3 hrs/day)(360 days/yr) = 1,080hr/yr

Emission Reduction Calculations:

Formula C-4: Estimated Annual Emissions based on hours of Operation (tons/yr) 1. Annual NOx baseline technology emissions (4.63 g/bhp-hp)(36.2 hp)(0.53)(1,080 hrs/yr)(1 ton/ 907,200g) = 0.10 tons/yr NOx 2. Annual NOx reduced technology emissions (0 g/bhp-hr)(36.2hp)(0.53)(1,080hrs)(1 ton/907,200g ) = 0 ton/yr NOx 3. Annual ROG baseline technology emissions (0.29 g/bhp-hr)(36.20hp)(.53)(1,080 hrs/yr)(1ton/90 7,200g) = 0.007 tons/yr ROGD-70 EXAMPLE CALCULATIONS

4. Annual ROG reduced technology emissions (0 g/bhp-hr)(36.2hp)(0.53)(1,080hrs)(1 ton/907,200g ) = 0 ton/yr ROG 5. Annual PM10 baseline technology emissions (0.280 g/bhp-hp)(36.2 hp)(0.530)(1,080 hrs/yr)(1 to n/907,200g) = 0.006 tons/yr tons/yr PM10 6. Annual PM10 reduced technology emissions (0 g/bhp-hp)(36.2 hp)(0.530)(1,080 hrs/yr)(1 ton/90 7,200g) = 0 tons/yr PM10

Formula C-10: Annual Surplus Emission Reductions b y pollutant (tons/yr) for Repowers

and New Purchases

• NOx emission benefits = 0.10 tons/yr - 0 tons/yr = 0.10 tons/yr NOx

• ROG emission benefits = 0.007 tons/yr - 0 tons/yr = 0.007 tons/yr ROG

• PM10emission benefits = 0.006 tons/yr - 0 tons/yr = 0.006 tons/yr PM10

Formula C-2, Annual Weighted Surplus Emission Reduc tions:

0.10 tons/yr + 0.007 tons/yr + 20(0.006 tons/yr) = 0.227 weighted tons/yr

Annualized Cost: Project Life: 3 years CRF (Table B-1): =0.360

Incremental Cost: =$2,000

Formula C- 12-Annualized Cost 0.360 * $2,000 = $720/yr

Cost Effectiveness: Formula C-1 Cost-Effectiveness of Weighted Surplus Emission Reductions ($/ton):

($720/yr)/(0.227 weighted tons/yr) = $3,172/ton of weighted surplus emissions reduced

The $5,000 cost for electric power plugs cannot be funded by the Carl Moyer Program

because it is considered infrastructure. The air d istrict may pay for this with district

match funds.

This project qualifies for the $2,000 cost of the E /S option.

## APPENDIX E

DESCRIPTION OF CERTIFICATION AND VERIFICATION

EXECUTIVE ORDERSE-1 CERTIFICATION AND VERIFICATION APPENDIX E

DESCRIPTION OF CERTIFICATION AND VERIFICATION

I. New Engine Certification

The Air Resources Board (ARB) certifies engines des tined for sale in California and provides the engine manufacturers with an Executive Order (EO) for each certified engine family. An example of an EO is shown in Fig ure E-1. The EO includes general information about the certified engine such as engi ne family, displacement, horsepower rating(s), intended service class, and emission con trol systems. It also shows the applicable certification emission standards as well as the average emission levels measured during the actual certification test proce dure. For the purpose of the Carl Moyer Program, the certification emission standards are used to calculate emission

reductions. The certification emission standards a re shown in the row titled “(DIRECT) STD” under the respective “FTP” column headings fo r each pollutant. For instance, the Cummins 8.3 liter natural gas engine illustrated in Figure E-1 was certified to a combined oxides of nitrogen plus non-methane hydroc arbon (NOx+NMHC) emission standard of 1.8 g/bhp-hr, a carbon monoxide (CO) em ission standard of 15.5 g/bhp-hr, and a particulate matter (PM) emission standard of 0.03 g/bhp-hr.

In the case where an EO shows emission values in th e rows labeled “AVERAGE STD” and/or “FEL”, the engine is certified for participa tion in an averaging, banking, and trading (AB&T) program. AB&T engines (i.e., all FE L-certified engines) are not eligible to participate in the CMP for new vehicle purchase projects since emission benefits from an engine certified to an FEL level are not surplus emissions.E-2 CERTIFICATION AND VERIFICATION Figure E-1 Sample Executive Order

ARB Executive Order
for Heavy-Duty On-Road EnginesE-3 CERTIFICATION AND VERIFICATION

II. Retrofit System Verification

The ARB’s verification procedures provide a way to thoroughly evaluate the emission reduction capabilities and durability of a variety of emission control strategies as part of a retrofit in-use program. It ensures that emissio n reductions achieved by a control strategy are both real and durable and that product ion units in the field are achieving

emission reductions which are consistent with their verification.

The ARB has a verification procedure for in-use str ategies to control emissions from diesel engines (diesel emission control systems or DECS). The verification procedure requires a minimum PM reduction of at least 25 perc ent. If a diesel emission control strategy also reduces NOx emissions by at least 15 percent, that reduction can also be verified. Emission control strategies for diesel e ngines are verified based on a tiered

verification classification shown in Table E-1 belo w. It is the responsibility of the diesel emission control strategies manufacturer to provide data to verify emission reduction

claims. The ARB issues Executive Orders for verifi ed emission control strategies destined for sale in California. An example of an EO for a retrofit emission control system for diesel engines is shown in Figure E-2.

Applicants may claim ROG emission reductions from D ECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduction of h ydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emi ssion reductions. For example, a technology that provides a 40 percent emission redu ction of hydrocarbons would be permitted to apply a 25 percent reduction in ROG em issions for determining eligibility and grant amount in the Carl Moyer Program.

Table E-1

Verification Levels for Diesel Emission Control Str ategies

Pollutant Emission Reduction Classification

< 25% Not Verified

> 25% Level 1

> 50% Level 2 PM

> 85%, or

< 0.01 g/bhp-hr Level 3

< 15% Not Verified NOx

> 15% Verified in 5% IncrementsE-4 CERTIFICATION AND VERIFICATION

ARB staff has also developed an interim retrofit ve rification procedure for large spark-ignition engines (LSI). This interim procedu re can be used to verify retrofit systems to reduce NOx and HC emissions from spark-i gnition engines until the interim procedure is formally adopted by the ARB. Emission control strategies for LSI engines

are verified based on a tiered verification classif ication shown in Table E-2 below.

Table E-2. LSI Emission Control System Verificatio n Levels



### Classification Percentage Reduction (HC+NOx) Absolute Emissions (HC+NOx)

LSI Level 1 (1) > 25% (2) Not Applicable

LSI Level 2 (1) > 75% (3) 3.0 g/bhp-hr (3)

LSI Level 3a (1) > 85% (4) 0.5, 1.0, 1.5, 2.0, 2.5 g/bhp-hr

LSI Level 3b (5) Not Applicable 0.5, 1.0, 1.5, 2.0 g/bhp-hr

Notes:
(1) Applicable to uncontrolled engines only
(2) The allowed verified emissions reduction is capped at 25% regardless of

actual emission test values
(3) The allowed verified reduction for LSI Level 2 is c apped at 75% or 3.0 g/bhp-hr regardless of actual emission test val ues (4) Verified in 5% increments, applicable to LSI Level 3a classifications only
(5) Applicable to emission-controlled engines onlyE-5 CERTIFICATION AND VERIFICATION Figure E-2 Example of an EO for a Retrofit Emission Control Sy stemE-6 CERTIFICATION AND VERIFICATIONE-7 CERTIFICATION AND VERIFICATION

## APPENDIX F

RETROFIT EMISSION CONTROL STRATEGIESG-1 RETROFITS APPENDIX F

RETROFIT EMISSION CONTROL STRATEGIES

All retrofit systems must be verified by ARB in ord er to qualify for Carl Moyer Program funding. Potential compression-ignited (diesel) en gine retrofits include diesel oxidation catalysts, diesel particulate filters, flow though filters and fuel additives. Potential spark-ignited engines include closed-loop fuel cont rol, three-way catalyst, fuel injection, or any combination thereof.

I. Compression-Ignited (Diesel) Engines

A. Diesel Oxidation Catalysts

A diesel oxidation catalyst (DOC) reduces carbon mo noxide (CO), hydrocarbons (HC), and the soluble organic fraction (SOF) of diesel PM through catalytic oxidation. Negligible reductions of the solid particle portion of PM also occur. Exhaust gases are not filtered, as with a diesel particulate filter ( DPF) so the solid particles escape. A DOC reduces total PM emissions up to 30 percent. PM em ission reductions at this higher end are typically associated with engines that emit "wet" PM (i.e., particles that have a higher percentage of SOF, unburned or partially bur ned fuel, adsorbed onto the particle surface). Older engines or engines that have less efficient fuel combustion typically produce PM with higher SOF. Engines that more effi ciently combust the fuel would have less SOF adsorbed on the soot particle, so the PM emission reductions would be less on a percentage basis.

B. Passive Diesel Particulate Filters

A DPF uses a porous substrate to filter out PM part icles from the exhaust. DPFs must "regenerate" or be cleaned periodically to remove t he collected particulate matter. A passive DPF has a catalyst coating on the filter su rfaces that lowers the PM ignition temperature, allowing the collected PM to burn off. Emissions of HC and CO are also reduced by catalytic oxidation. This approach is c alled "passive" regeneration because no outside source of energy or intervention is requ ired for regeneration, making it very attractive due to its simplicity.

C. Active Diesel Particulate Filters

Active DPFs use an external source of energy or ext ernal intervention to increase the exhaust temperature to the point where PM oxidation can occur, achieving a regeneration. Additional heat may be added to the exhaust using electrical power, microwaves, or injecting fuel. Another approach us es periodic, short-duration use of an intake throttle to reduce the amount of excess air, so the exhaust temperature rises as a result of not having to heat the excess air. The t emperature of the filter and collected PM increases until the PM burns off, at which point the throttle re-opens. Active DPFsG-2 RETROFITS

systems can initiate regeneration when the backpres sure on the filter reaches a specified level or the operator can initiate a rege neration when a warning light indicates backpressure has exceeded a set point. For applica tions where the engine-out PM is relatively high, or the exhaust temperature is rela tively cool, active regeneration systems may be more effective than a passive DPF. Emission reductions of HC and CO can also occur in active DPFs, and to a greater extent if the DPF system uses lightly catalyzed surfaces or fuel-borne catalysts to assis t in achieving regenerations.

D. Flow-Through Filters

Unlike the DPF, in which only the exhaust gases can pass through the substrate, the flow-though filter (FTF) does not physically "trap" and accumulate PM. Instead, exhaust flows through a medium (such as a wire mesh or meta l foils) that has a high density of tortuous flow channels, thus giving rise to turbule nt flow conditions that favor PM oxidation. The medium is typically treated with an oxidizing catalyst that is able to reduce emissions of PM, HC, and CO, or the FTF is u sed in conjunction with a fuel borne catalyst (FBC). The filtration efficiency of the FTF is typically lower than that of a DPF because unburned PM is not "trapped", but the F TF is less likely to plug under unfavorable conditions, such as high PM emissions o r low exhaust temperature.

E. Fuel Additives

A fuel additive is designed to be added to fuel or fuel systems so that it is present in-cylinder during combustion. Fuel additives can reduce the total mass of PM emissions, with variable effects on CO, NOx and gas eous HC production. A fuel-borne catalyst (FBC) is an additive that is used with die sel fuel to aid in soot removal by decreasing the ignition temperature of the carbonac eous exhaust. FBCs can be used with passive and active filter systems to improve f uel economy, aid system performance, and decrease mass PM emissions. FBC/D PF systems have been verified for on-road use in California in medium duty and he avy-duty engines. In addition, FBC/DPF systems are in wide spread use in Europe in both on-road and off-road, mobile and stationary applications. Use of FBCs wi th DOCs or FTFs may not be verified for use in California since catalytic part icle emissions occur and the consequences of such emissions are unknown.

II. Spark-Ignition Engines

Retrofit refers to modifications or additions made to an engine and/or fuel system such that the specifications of the retrofitted engine a re not the same as the original engine. Retrofits for LSI equipment will likely incorporate advanced automotive-inspired emission control technologies that dramatically red uce emissions while still meeting operational requirements. These have already been in use on a variety of LSI equipment for about 10 years. To qualify for Carl Moyer Program funding, the retrofit technology must be verified for sale in California and must comply with established durability and warranty requirements.G-3 RETROFITS

A. Three-Way Catalyst

Three-way catalytic converters have helped manufact urers to meet progressively

lower-emissions standards. Manufacturers have inst alled three-way catalysts on automobiles for more than 25 years. Advanced three -way catalysts will likely be components in new LSI retrofit kit, and have been s hown to be robust in research demonstrations for the 2001 LSI regulation.

LSI catalyst volumes are much lower than light duty vehicles - between 40 to 60 percent of engine displacement. Precious metal loading of the catalytic converter in a current LSI application is typically half of that in automotive applications. LSI catalysts in retrofits will likely use multi-layered wash coa ts that increase precious metals performance to achieve lower emissions. Due to con fined space on forklifts, the three-way catalysts are made such that they can be a direct fit replacement of the original vehicle silencer. Other LSI equipment wil l most likely be adaptable to catalyst

additions.

B. Closed-Loop Fuel Control System

Central to automotive emission control systems is t he closed-loop fuel control system. Since 1980, automotive emission control systems hav e used a closed-loop fuel control system to help reduce emissions. This technology h as increasingly been applied to LSI retrofit technology in the last 10 years. A closed -loop fuel control system uses sensors to monitor exhaust gas concentrations, and feed thi s information back to an electronic control module, which in turn keeps the air to fuel mixture at an optimum level. The sensors (usually oxygen sensors) deteriorate over t ime, causing the system to lose emissions reduction ability, but equipment with sen sors have indicator lights that can alert the operator of an sensor failure so that the y can replace the oxygen sensors as

needed.

C. Fuel-Injection System

To help ensure more precise metering of fuel and op timum combustion, carburetors will likely be replaced by sequential fuel injection or a more sophisticated regulator/mixer. Today's advanced systems must maintain an extremely tight stoichometric air to fuel balance during nearly all engine operations because wide fluctuations from the stoichiometric position will result in less ability to reduce NOx and hydrocarbons.

## APPENDIX G

DESCRIPTION OF FUNCTIONAL EQUIVALENCY OF
NON-ORIGINAL EQUIPMENT MANUFACTURER REPOWERS

AND REBUILT ENGINES FOR USE IN REPOWERSG-1 NON-OEM REPOWER AND REBUILD Appendix G

Description of Functional Equivalency of Non-Origin al Equipment Manufacturer

Repowers and Rebuilt Engines for use in Repowers

A repower or an engine rebuild may be performed by the original equipment manufacturer (OEM) or a non-OEM. An original equip ment manufacturer, for the purposes of the Carl Moyer Program, means any perso n engaged in the manufacturing or assembling of new vehicles or equipment for resa le under its own brand name. These manufactures provide the original product des ign and materials for the equipment assembly and manufacture and are directly responsible for manufacturing and modifying the products, making them commerciall y available, and providing the warranty.

I. Non-Original Equipment Manufacturer Repowers

The Carl Moyer Program provides funding opportuniti es for equipment repowers with a lower emission engine; like-to-like repowers are no t eligible for funding. In accordance with the Carl Moyer Program guidelines, a non-OEM r epower must be “ functionally equivalent” to an OEM repower with regard to emissions, durabil ity, and safety. A non-OEM repower consists of removing an existing en gine and replacing it with a lower emission certified engine, however the installer do es not use the procedures and/or parts specified by the OEM in their repower documen tation. The non-OEM repower must also maintain the emission performance of the replacement engine in operation.

A. Requirements to Establish Functional Equivalenc y

The following actions are necessary and sufficient for Carl Moyer Program applicants to follow when demonstrating functional equivalency.

The Carl Moyer Program applicant must:

• Submit to the Air Pollution Control Officer/Execut ive Officer of the governing air district a list of OEM and non-OEM parts to be used in the repower and the corresponding components that they replace (if repl acing parts).

• Submit a letter of qualification from the installe r who will perform the work.

• Submit a detailed description of the work to be pe rformed on the equipment including necessary engine mapping and drawings and engineering analyses to demonstrate safety and durability.G-2 NON-OEM REPOWER AND REBUILD

The following further explain these requirements:

1. List of Functionally Equivalent Parts

Carl Moyer Program applicants proposing to perform non-OEM repowers must submit

to the Air Pollution Control Officer/Executive Offi cer of the governing air district the following information for each repower:

• The serial number, make, model year and configurat ion of both the original engine and the replacement engine.

• The component parts list (CPL) or arrangement numb ers for both the original engine and the replacement engine, including the exhaust a nd cooling systems if modified during the repower.

• The original equipment (OE) number and description of parts replaced.

• The replacement part identification number.

• A statement that all non-OEM replacement parts are functionally equivalent to the corresponding OE parts.

The applicant or the non-OEM installer must also co mply with any request from the ARB

or Air Pollution Control Officer/Executive Officer of the governing air district for any additional information, including sample parts for inspection and records required by section 2221 (b) of title 13 of the California Code of Regulations.

2. Letter of Qualification

Any Carl Moyer Program applicant proposing to perfo rm a non-OEM repower must submit a letter of qualification from the installer addressed to the Air Pollution Control Officer/Executive Officer of the governing air dist rict. The letter should describe the installer’s operations and experience. It must inc lude the following:

• The name and address(es) of the installer.

• The length of time the installer has been operatin g.

• The number of employees and how many are actually involved in installing engines.

• The type of heavy-duty equipment it repowers.

• The number of items it normally repowers annually.

• Background and experience of the owners including education, training and certifications; previous heavy-duty engine repowers experience; and any experience

with an OEM or its franchised dealers.

• Whether the business specializes in any particular type or make of heavy-duty equipment.

• Whether it has performed work under the Carl Moyer Program; any other state or local program; or for any Federal, state or local a gency.

• Whether it has ever been investigated for malpract ice or tampering with heavy-duty engines and if so, the results of the investigation

.G-3 NON-OEM REPOWER AND REBUILD

The letter must be signed by the owner of the busin ess and must include the following

statement:

“ I affirm that the repower described in the Carl Moy er Program application will use only OE parts or non-OE parts from the parts list submit ted to the air district. The replacement engine will be functionally equivalent from a durability standpoint to one offered by the OEM in the same power category and w ill maintain the emissions performance of the replacement engine in operation. Furthermore, the repowered equipment will maintain all safety specifications o f the original equipment.”

After review of the letter, the air district or ARB may request additional information.

3. Description of Work to be Performed

The Carl Moyer Program applicant must submit an add itional letter describing the proposed work or work already performed on the equi pment. The letter must confirm that the parts used are equivalent to the CPL parts or corresponding arrangement number parts. In addition, the letter must include details on required equipment modifications with pictures of the equipment and en gineering drawings as necessary.

The letter must also state that the repowered equip ment is functionally equivalent from a durability standpoint to one offered by the OEM i n the same power category and that the emission performance of the engine is maintaine d in operation. Any test data that

substantiate these emission claims shall be attache d or included in the letter.

B. Other Restrictions and Considerations

The ARB or the district may require emission testin g on any piece of equipment, whether repowered by an OEM or non-OEM. Emissions testing may be specified prior to approval of a project as a condition of the gran t, but normally will not be specified unless ARB has reason to believe that a proposed re power will not be functionally equivalent from an emissions and durability standpo int to an OEM repower. Emissions testing may also be required after the project has been completed, in cases where there is evidence of malpractice or tampering. Engines t hat do not achieve the stated emission levels may be denied all or part of the re quested funding. In cases where the money has already been disbursed, the applicant wil l be responsible for providing an acceptable engine or for reimbursing the state for Carl Moyer Program funds expended. In addition, other penalties may apply.

II. Non-Original Equipment Manufacturer Rebuilt En gines for Use in Repowers

The Carl Moyer Program provides funding opportuniti es for equipment repowers using rebuilt engines. In accordance with the Carl Moyer Program guidelines, a non-OEM rebuilt engine must be “ functionally equivalent” to an OEM rebuilt engine with regard to emissions and durability.G-4 NON-OEM REPOWER AND REBUILD

A. Requirements to Establish Functional Equivalenc y

The following actions are necessary and sufficient for Carl Moyer Program applicants to follow when demonstrating functional equivalency.

The Carl Moyer Program applicant must:

• Submit to the Air Pollution Control Officer/Execut ive Officer of the governing air district a list of non-original equipment parts or to be used in the rebuilt engine and the corresponding components that they replace.

• Submit a letter of qualification from the rebuilde r who will perform the work.

• Submit a detailed description of the work to be pe rformed on the engine.

The following further explain these requirements:

1. List of Functionally Equivalent Parts

Carl Moyer Program applicants proposing to use non- OEM rebuilt engines must submit

to the Air Pollution Control Officer/Executive Offi cer of the governing air district the following information for each rebuilt engine:

• The serial number, make, model year and configurat ion of the original engine.

• The component parts list (CPL) or arrangement numb ers for the original engine.

• The original equipment (OE) number and description of parts replaced.

• The replacement part identification number.

• A statement that all non-OEM replacement parts are functionally equivalent, as defined in the equivalency provision by section 242 1 (a)(13) of title 13 of the California Code of Regulations, to the correspondin g OE parts.

The applicant or the non-OEM replacement part manuf acturer must also comply with any request from the ARB or Air Pollution Control O fficer/Executive Officer of the governing air district for any additional informati on, including sample parts for inspection and records required by section 2221 (b) of title 1 3 of the California Code of Regulations.

2. Letter of Qualification

Any Carl Moyer Program applicant proposing to use a non-OEM rebuilt engine must submit a letter of qualification from the rebuilder addressed to the Air Pollution Control Officer/Executive Officer of the governing air dist rict. The letter should describe the rebuilder’s operations and experience. It must inc lude the following:

• The name and address(es) of the rebuilder.

• The length of time the rebuilder has been operatin g.

• The number of employees and how many are actually involved in rebuilding engines.G-5 NON-OEM REPOWER AND REBUILD

• The type of heavy-duty parts it rebuilds (full eng ines, fuel systems, blocks, etc.).

• The number of items it normally rebuilds annually.

• Background and experience of the owners including education, training and certifications; previous heavy-duty engine rebuild experience; and any experience

with an OEM or its franchised dealers.

• Whether the business specializes in any particular type or make of heavy-duty engine or parts.

• Whether it has performed work under the Carl Moyer Program; any other state or local program; or for any Federal, state or local a gency.

• Whether it has ever been investigated for malpract ice or tampering with heavy-duty engines and if so, the results of the investigation

.

The letter must be signed by the owner of the busin ess and must include the following

statement:

“ I affirm that the rebuilt engine described in the C arl Moyer Program application will use only OE parts or non-OE parts from the parts list s ubmitted to the air district. Furthermore, the rebuilt engine will be functionall y equivalent from an emissions and durability standpoint to the OEM engine it is repla cing.”

After review of the letter the air district or ARB may request additional information.

3. Description of Work to be Performed

The Carl Moyer Program applicant must submit an add itional letter describing the proposed work or work already performed on the rebu ilt engine. The letter must confirm that the parts used are equivalent to the CPL parts or corresponding arrangement number parts and that the rebuilt engine has the sa me configuration as the original engine. In addition, any re-calibrations or adjustm ents performed on the engine or engine components must be set forth in detail, as w ell as any work performed on parts that were taken out of the engine and re-inserted.

The letter must also state that the rebuilt engine is functionally equivalent to an OEM rebuilt engine with regard to emissions and durabil ity. Any test data that substantiate

these emission claims shall be attached or included in the letter.

B. Other Restrictions and Considerations

The ARB may require emission testing on any engine, whether rebuilt by an OEM or non-OEM rebuilder. Engine testing may be specified prior to approval of a project as a condition of the grant for all rebuilders rebuildin g under the grant, but normally will not be specified unless ARB has reason to believe that a proposed rebuilt engine will not be functionally equivalent from an emissions and durab ility standpoint to the OEM engine it is replacing. Engine testing may also be required after the project has been completed, in cases where there is evidence of malpractice or tampering. Engines that do not achieve the stated emission levels may be denied al l or part of the requested funding.G-6 NON-OEM REPOWER AND REBUILD

In cases where the money has already been disbursed , the applicant will be responsible for providing an acceptable engine or for reimbursi ng the state for Carl Moyer Program funds expended. In addition, other penalties may a pply.

# THE CARL MOYER PROGRAM

GUIDELINES

2006 Project Criteria for Light-Duty Vehicles

Initial Release Date: October 20, 2006 Adopted: December 7, 2006



# California Environmental Protection Agency 

# Air Resources 

# Board2006 Project Criteria XI-1 LIGHT-DUTY VEHICLES Chapter Eleven

LIGHT-DUTY VEHICLES

This chapter addresses the project criteria for on- road, light-duty vehicle projects. The chapter contains a brief overview of the light-duty vehicle emission inventory, current engine emission standards, available control techno logies, potential projects eligible for funding, and emission reduction and cost-effectiven ess calculations.

I. Introduction

Light-duty vehicles include passenger cars, pick-up trucks, sport utility vehicles (SUVs), and vans. In 2005, the estimated number of light-d uty vehicles in California was over 21 million vehicles. Although emissions from light -duty vehicles are decreasing with the implementation of stricter emission control standar ds, light-duty vehicles are still major contributors to California’s air pollution, and inc entive programs offer a way to reduce emission from the existing fleet.

II. Emissions

The oxides of nitrogen (NOx), reactive organic gas (ROG), and particulate matter (PM10) emissions from the light-duty fleet are show n in Table 11-1.

Table 11-1 Statewide Emissions from On-Road Light-Duty Vehicle s

(tons per day) Population NOx ROG PM10

2005 21,500,000 574 583 29
2010 23,700,000 388 405 32
Source: ARB 2006 Almanac Emission Projection Data (http://www.arb.ca.gov/ei/emissiondata.htm)

Older, light-duty vehicles (pre-1990 model years) a ccount for 56 percent of the ROG and 41 percent of the NOx emissions from all light- duty vehicles in 2005, despite accounting for only 19 percent of the vehicle popul ation and less than 13 percent of the vehicle miles traveled (VMT). Generally, these old er vehicles emit more pollutants because of less stringent emission standards and in creased wear and tear on drive train and emission control components. Even well maintai ned, older vehicles tend to be higher emitting than newer ones because they lack a dvanced emission controls.

III. Regulatory Requirements

California’s emission controls for light-duty vehic les date back to the 1960s. New control technologies and cleaner fuels have enabled more restrictive emission standards over the years.2006 Project Criteria XI-2 LIGHT-DUTY VEHICLES

Since the 1990s, the Low Emission Vehicle (LEV) reg ulations have been the cornerstone of the ARB’s program to reduce emission s from light-duty vehicles. The LEV program, implemented in 1994, established four tiers of low emission standards and provided manufacturers with the option of certi fying their vehicles to any mix of these standards as long as they complied with an av erage non-methane organic gas annual fleet requirement. The fleet average requir ement gradually decreased each year between 1994 and 2003, resulting in the introductio n of a greater number of cleaner vehicles each proceeding model year. The LEV II re gulation set even more stringent, declining fleet average emission requirements for 2 004 through 2010 and lowered the

NOx emission standards. As a result of the ARB’s L EV program, a new 2005 model year car is on average 99 percent cleaner than an u ncontrolled car.

California also has requirements to ensure vehicles ’ emission control systems continue to work throughout their lives. Under the Smog Che ck program, vehicles are tested biennially to ensure that they stay clean as they a ge. A Smog Check includes a tailpipe emissions test and a visual inspection of the emiss ion control system. For vehicles equipped with on-board diagnostic (OBD II) systems (model years 1996 and later), the inspection also includes a check of the malfunction indicator light to ensure that no problems have been detected with the vehicle’s emis sion control system.

IV. Potential Projects: Voluntary Accelerated Vehi cle Retirement and Voluntary Repair of Vehicles

Light-duty vehicle projects were added to the Carl Moyer Program with legislative changes signed into law in 2004 (AB 923). The ARB has identified two types of lightduty vehicle projects that are eligible for funding under the Carl Moyer Program: voluntary accelerated vehicle retirement (VAVR or v ehicle scrapping) and voluntary repair of vehicles (VRV). Both programs can reduce excess emissions from older, high emitting vehicles. Some districts may choose to ru n only a VAVR program or only a VRV program; others may choose to run VAVR and VRV programs in coordination, so vehicle owners have the option of choosing between vehicle repair and retirement.

The ARB originally adopted project criteria for VAV R programs in the 2005 Carl Moyer Program Guidelines [ARB 2005]. This revision expan ds vehicle scrapping opportunities by adding criteria for the optional use of remote s ensing devices (RSD) or other technologies to identify high emitting vehicles for participation in VAVR programs and establishing project criteria for VRV programs.

RSD typically uses infrared and/or ultraviolet spec troscopy to measure the concentrations of air pollutants in vehicle exhaust while the vehicle is in use on the roadway. Concentrations of ROG, NOx, and CO are re corded along with a photo of the license plate. Studies have shown that RSD can be an effective tool in identifying high emitting vehicles [BAR, 2001; U.S. EPA; Stedman, 19 94; and Stedman].2006 Project Criteria XI-3 LIGHT-DUTY VEHICLES

A. VAVR Background

The goal of VAVR programs is to retire older, more polluting vehicles earlier than their expected lifetime, thereby eliminating the emission s associated with their operation. VAVR programs are strictly voluntary programs overs een by the ARB and administered by local air districts. Private enterprise operato rs are contracted by the district and are responsible for evaluating, approving, and disposin g of qualified light-duty vehicles.

Real emission reductions can be achieved as vehicle s are still fully operational and have a useful life remaining. Therefore, to qualif y for a VAVR program, a vehicle must meet registration, functionality, and equipment eli gibility criteria. To accommodate car collectors and others with potential interest in ve hicles offered for retirement, VAVR programs provide the public with an opportunity to purchase vehicles in whole or in part before the vehicle is retired. Vehicles accepted i nto the program must be retired by crushing the vehicle to such a degree that it and i ts parts are rendered unusable.

The California Health and Safety Code (sections 441 00-44122, in part) establishes the framework for VAVR programs. As required in State law, the ARB has adopted a regulation governing VAVR programs that includes ma rket-based, privately-operated VAVR enterprises and the generation of emission red uction credits. [ARB, 1998 and ARB, 2001] The VAVR regulation now provides for th e optional use of technologies to identify high emitting vehicles [ARB, 2006].

In addition to district administered VAVR programs, BAR’s Smog Check Program includes a voluntary vehicle retirement element. A s part of BAR’s Consumer Assistance Program, owners of qualifying vehicles t hat fail the biennial Smog Check are given the option of voluntarily retiring their vehi cle rather than repairing it. District-run VAVR programs complement BAR’s Smog Check Program. District programs generate emission reductions that are surplus to those obtai ned through the Smog Check. BAR’s program covers vehicles that have failed their bien nial Smog Check while the district programs cover vehicles that have passed their bien nial Smog Check or are between biennial inspections (i.e., “off-cycle” from Smog C heck).

Two types of VAVR programs are allowed which we ref er to as “conventional VAVR programs” and “high emitter VAVR programs,” respect ively. In conventional VAVR programs, any older vehicle may be retired provided it meets the minimum eligibility requirements. Emission reductions are achieved bec ause these older vehicles, even ones that meet their Smog Check standards, emit mor e pollutants than the newer vehicles that replace them upon retirement. To est imate the emission reductions, the retired vehicle’s emissions are not directly measur ed, so it is assumed that the retired vehicle produces the average emissions of its model year. In addition, because a replacement vehicle’s emissions are not measured an d the vehicle chosen as a replacement is not specified, it is assumed that th e replacement vehicle produces the emissions of a “fleet average” vehicle. The Carl M oyer Program Guidelines include a look up table which lists emission reductions by mo del year of vehicle retired.2006 Project Criteria XI-4 LIGHT-DUTY VEHICLES

In high emitter VAVR programs, RSD or other technol ogies are used to identify the highest emitting vehicles in the fleet for possible participation. By targeting only the highest emitting vehicles, the programs can achieve extra emission reductions relative to conventional VAVR programs. The conventional VA VR emission reduction tables

cannot be used to estimate the reductions for this type of program because the tables do not reflect the fact that only the highest emitt ing vehicles would be targeted for voluntary participation. The Carl Moyer Program Gu idelines provide the method for calculating the emission reductions for high emitte r VAVR programs.

Districts interesting in running VAVR programs with Carl Moyer Program funds would have the option of choosing which type of program t o operate.

B. VRV Background

Funding voluntary emission-related repairs can redu ce emissions from the existing fleet. Vehicle repair projects must achieve surplus emissi on reductions to receive funding under the Carl Moyer Program. Vehicle owners routi nely pay for repairs on their own vehicles. Simply shifting the cost of repairs from the owner to the State does not, in and of itself, result in surplus emission reductions. Surplus emission reductions are achieved only by funding repairs that would not hav e occurred otherwise or by accelerating repairs so they occur earlier than the y would have otherwise. Distinguishing repairs that would only occur with S tate funding from those that would have happened in the absence of funding (“anyways r eductions”) is a challenge. To ensure emission reductions are surplus to the Smog Check program, vehicles must be outside of their biennial Smog Check window in orde r to participate.

It is also important that incentive-based repair pr ograms do not discourage vehicle owners from keeping up with routine vehicle mainten ance. Only vehicles identified through remote sensing, high emitter profile, or eq uivalent technologies are eligible for VRV. VRV programs would not be open to “walk ins” (i.e, vehicles not identified as possible high emitters) because this would create a disincentive for people to keep up

with routine vehicle maintenance.

Also critical to the success of vehicle repair proj ects is ensuring that emission control system failures are correctly diagnosed and repaire d so that real emission reductions are achieved. To address this, project criteria re quire systematic diagnosis and repair in accordance with standard industry protocols to ensu re that vehicles are correctly and efficiently repaired.

During the development of these Guidelines, some st akeholders suggested that Statefunded voluntary repair programs be available only to low income vehicle owners because they are least financially able, and theref ore least likely, to make the repairs in absence of State funding. ARB staff acknowledges t his concern. However, it’s been ARB policy with respect to the Carl Moyer Program t o provide a broader level of guidance sufficient to ensure that emission reducti ons are real, quantifiable, enforceable, and surplus. The ARB leaves decisions on how Carl Moyer Program funds2006 Project Criteria XI-5 LIGHT-DUTY VEHICLES

should be distributed to the air districts administ ering the program at the local level. ARB staff agrees that this is an issue that air dis tricts should consider as they design VRV programs.

C. New Elements: Light-Duty Vehicle Carl Moyer Pro gram Projects

The following section provides background on the ne w elements of the Carl Moyer Program Guidelines for light-duty vehicle programs.

• Provisions for high emitter VAVR programs which uti lize technologies such as RSD to identify possible high emitting vehicles.

• A method to calculate the extra emission reductions for retiring vehicles identified as high emitters.

• Project criteria for VRV programs.

1. Identifying High Emitting Vehicles for VAVR or V RV

High emitter VAVR or VRV programs would incorporate RSD, high emitter profiles, or equivalent technologies to identify candidate vehic les. However, emission reduction

estimates are not based on these measurements. Ins tead, the vehicle’s emissions are based on a confirmatory Smog Check test which would be used to establish the vehicle’s baseline emissions. At this time, ARB st aff does not believe that a split second RSD measurement is quantitatively reflective of a vehicle’s emissions over a driving cycle.

To be eligible for high emitter VAVR or VRV program s, an identified vehicle’s confirmatory Smog Check test would need to exceed t he pass/fail emission standard (cutpoint) for the model year and vehicle class. F or the purposes of this program, a high emitting vehicle is defined as one that fails the Smog Check test. Vehicles whose emissions are below the pass/fail emission standard could still be voluntarily retired and

receive the emission reductions for conventional VA VR programs. For vehicles that are not testable on the acceleration simulation mode (A SM) testing equipment, a two speed idle (TSI) Smog Check may be substituted.

2. Calculating Emission Benefits of High Emitter VA VR

The same fundamental approach that is used for conv entional VAVR programs to estimate emission reductions is used for retiring h igh emitting vehicles. However, the input variables would be different, reflecting the fact that the retired vehicle has been identified as a high emitting vehicle and its emiss ions have been measured. Unlike conventional VAVR programs, which assume retired ve hicles pass Smog Check, high emitting vehicles identified off-cycle would presum ably fail their next Smog Check. Consequently, the emission rate of the retired vehi cle would change over the credit life. It would be higher before the vehicle’s next bienni al Smog Check, but after the Smog Check, its emissions would be lower because it would have had to be repaired in order to stay on the road.2006 Project Criteria XI-6 LIGHT-DUTY VEHICLES

For the first year of the three year credit life, a retired vehicle’s baseline emissions would be equal to the confirmatory Smog Check ASM r eading converted to a federal test procedure (FTP) based gram per mile emission r ate using conversion equations developed from the 2004 Evaluation of the California Enhanced Inspecti on and Maintenance (Smog Check) Program . [ARB/BAR, 2004; ARB/BAR, 2005]

For years two and three of the credit life, its emi ssions would have been lower because, had it not been retired, it would have presumably f ailed its Smog Check and been repaired to pass Smog Check. ARB staff proposes th at the retired vehicle’s baseline emissions for years two and three be equal to the S mog Check pass/fail emission cutpoint pollutant concentrations for the vehicle c lass and model year, converted to an FTP based gram per mile emission rate. This approa ch assumes retired vehicles are one year away, on average, from their next biennial Smog Check. Some vehicles may fail the Smog Check test for only one pollutant. I f a vehicle’s emissions at time of retirement were below the Smog Check pass/fail cutp oint for a pollutant, the emissions for that pollutant would be equal to its measured e missions at the time of retirement because the Smog Check program would not have force d any reduction of the passing pollutant.

ARB staff recommends using the average VMT of the m odel year of the vehicle retired

as with conventional VAVR. Staff considered the al ternative of estimating an individual

vehicle’s VMT based on the difference in odometer r eading between its last two Smog Checks. This approach was suggested when the VAVR regulation was last updated in 2002. At that time, ARB staff concluded that the S mog Check odometer data were not sufficiently reliable because a portion of these da ta are inaccurate. However, as part of the flexibility provided in the Guidelines, distric ts have the option of using actual mileage if that proves feasible in the fleet of vehicles be ing retired.

Emissions of the replacement vehicle would be equal to the average emissions of the light-duty fleet, and the VMT of the replacement ve hicle would be equal to that of the

retired vehicle as with conventional VAVR. This re flects the fact that owners are not required to document how they replace the vehicles they retire. However, some air districts and other stakeholders have expressed int erest in allowing programs which provide additional incentives for owners who docume nt that they have purchased a

vehicle certified to the ARB’s LEV or cleaner emiss ion standard. In this case, the replacement vehicle’s emission rate would be the av erage emission rate of a LEVcertified vehicle of the model year purchased, base d on the ARB’s motor vehicle

emission model.

3. Repair Requirements

A guiding principle for the vehicle repair requirem ents is that vehicles must be systematically diagnosed and repaired by licensed S mog Check technicians in accordance with accepted industry protocols and all laws and regulations governing automotive repair to ensure that repairs are durabl e and real emission reductions are2006 Project Criteria XI-7 LIGHT-DUTY VEHICLES

achieved. Systematic diagnosis and repair is the k ey to successful repair programs. Quick and inexpensive repairs which temporarily mas k more serious problems do not result in long lasting emission reductions.

ARB staff has based its repair criteria on the prot ocols used in BAR’s Consumer Assistance Program. The ARB encourages air distric ts to pay careful consideration to the need for systematic diagnosis and repair protoc ols as they develop contracts with the Smog Check stations to perform the testing, dia gnosis, and repair services. The contracts should include the appropriate detail in the scope of work to ensure that stations follow systematic diagnosis and repair pro tocols.

4. Evaporative Emission Reductions

RSD does not measure evaporative emissions, and hig h emitter profiles do not predict the likelihood of evaporative Smog Check failures. Vehicles identified as high exhaust emitters do not necessarily have high evaporative e missions as well. ARB staff is providing districts the option of including an evap orative emission element in their higher emitter VAVR or VRV programs. Districts may conduc t evaporative emission testing of vehicles identified as exhaust high emitters if the y choose.

One challenge associated with testing vehicles’ fue l evaporative systems is that the test equipment is still under development. BAR is in th e process of developing regulations to add a low pressure fuel evaporative test to the Smog Check program, but at this time, no equipment has been certified by BAR. However, s everal manufacturers’ equipment are undergoing certification. Only equipment that has been submitted for certification may be used in programs that test for evaporative e missions. If vehicles fail the low pressure evaporative, they would be eligible for ex tra evaporative emission reduction credits if retired or could receive repairs of evap orative controls.

Calculating the emission reductions associated with retiring or repairing vehicles identified as evaporative high emitters presents a challenge because the low pressure evaporative testing equipment does not directly mea sure a mass-based emission rate. Consequently, the emission benefits cannot be measu red directly. Staff has based the emission reductions on pilot studies by the ARB and others that quantified in the laboratory the benefits of repairing vehicles which failed the low pressure evaporative test. (See Environmental Impacts of Implementing A Low Pressur e Evaporative Test in the California Smog Check Program , released November 29, 2005, http://www.arb.ca.gov/msprog/smogcheck/evap_report. pdf .) [ARB, 2005] The report presents baseline evaporative emission rates and av erage control factors for repairs from which ARB staff estimated an average emission reduction.

During the final workshop on these revisions, one c ommenter suggested that vehicles identified as “liquid leakers” during the confirmat ory Smog Check test should also qualify for extra emission reductions if retired or if those leaks are repaired. ARB staff agrees but has not yet developed a proposed method for calculating benefits. ARB staff2006 Project Criteria XI-8 LIGHT-DUTY VEHICLES

will work with air districts to appropriately quant ify these emission reductions if they are a part of a district’s VAVR or VRV program.

5. PM Emission Reductions

Identification of PM high emitters is not a standar d part of VAVR or VRV programs. RSD and high emitter profiles have not been demonst rated as tools to identify PM high emitters, and vehicles identified as having high RO G or NOx exhaust emissions do not necessarily produce high PM emissions as well. The ARB supports the goal of reducing PM emissions from the light-duty fleet and is fundi ng research into measuring PM emissions in light-duty vehicles. A further challe nge in quantifying PM emissions is that the Smog Check ASM test does not measure PM.

ARB staff acknowledges that the South Coast AQMD wi ll attempt to evaluate methods for identifying and quantifying PM high emitters as part of its high emitter retirement and repair program. ARB staff supports assigning extra PM emission reductions for retirement or repair once a viable, technologically supportable method of quantifying PM

benefits is demonstrated.

The Guidelines include broad provisions for PM high emitter programs. If a district program includes a PM component, the program plan m ust specify the procedure and analytical approach that would be used to measure P M. The plan must also outline how

the district intends to evaluate and validate that its proposed method of measure PM

emissions in the field correlates with scientifical ly accepted methods of measuring PM emissions in the laboratory. However, because of t he uncertainties in measuring PM, districts may not rely on the extra emission reduct ions from retiring PM high emitters to show that the program is cost-effective at this tim e.

6. Credit Life

The current VAVR program uses a three year credit l ife. Surveys conducted since the regulation was adopted in 1998 support the three ye ar credit life. These surveys conducted in the Bay Area and South Coast indicate that owners estimated their vehicles would have lasted on average 3-3.5 years i f they had not been retired. The

South Coast data are from the 1999 time frame. How ever, Bay Area survey data are available from as recently as 2004-2005. Some have argued that regional differences may support a longer credit life. On the other han d, a high emitting vehicle may actually have a shorter life due to its need for potentially costly repairs. At this time, ARB staff does not have data that would support changing the credit life.

For VRV projects, the credit life is one year becau se, on average, vehicles are one year away for their next biennial Smog Check. To ensure that emission reductions are surplus to the Smog Check program, the credit life of the repair is the period of time between the repair and the vehicle’s next scheduled Smog Check. At that time, the Smog Check program would have forced the reductions to occur, so they would no longer be surplus.2006 Project Criteria XI-9 LIGHT-DUTY VEHICLES

The one year credit life for repairs is an exceptio n to the three year minimum project life in the Carl Moyer Program, reflecting the unique na ture of vehicle repair projects. The ARB has set a three year minimum project life for o ther source categories to ensure emission reductions are surplus, particularly for p rojects funded in advance of regulatory compliance deadlines where engine owners know they will need to repower or replace their equipment. Vehicle repair is unique because, in absence of being identified via RSD or other technology, motorists may not know the ir vehicles need repairs until the time of their next Smog Check. By accelerating rep airs a year before the Smog Check program would have required them, surplus reduction s are achieved.

7. Cost-Effectiveness for High Emitter VAVR and VRV

For the Carl Moyer Program, the ARB considers progr am costs to be those directly related to repowering, replacing, or retrofitting a n engine. All other costs are considered

administrative. Administrative funds are not inclu ded in the program cost-effectiveness

calculations but must be accounted for relative to the administrative limits associated with each funding source.

Costs directly related to identifying potential hig h emitting vehicles and the costs to repair or retire vehicles are program-related. The se include the actual costs of remote sensing measurements; the costs of contacting poten tial participants, the costs of the Smog Check tests required to confirm candidate vehi cles’ emissions; and the cost of diagnosing vehicles for repairs. ARB staff conside rs funds spent on outreach, data analysis, and development of data analysis tools su ch as databases to be

administrative costs.

Evaluating the cost-effectiveness presents unique c hallenges not seen in other Carl Moyer Program source categories. For all othe r categories, potential grant recipients submit applications in advance. During the application period, each project is evaluated to ensure that it meets the Carl Moyer Gu idelines’ project criteria and costeffectiveness limits. Projects that are identified as cost-effective may then be eligible to receive funding. For VAVR and VRV programs, a diff erent dynamic exists.

The nature of these voluntary programs does not all ow an opportunity to fully assess the cost-effectiveness during an application period . Costs are incurred up front to identify and diagnose high emitting vehicles. Howe ver, the benefits cannot be fully estimated in advance because they depend on the par ticipation rate and the mix of vehicles retired or repaired. The cost-effectivene ss can only be calculated after the fact.

In addition, the nature of repair programs may lead to stranded costs that do not result in emission reductions. A Smog Check technician mu st take time to diagnose a vehicle to assess whether it is a good candidate for repair . Technicians may find that some vehicles are either not repairable or would be proh ibitively expensive to repair. While no

emission reductions would be achieved from these ve hicles, funds would be expended in conducting the diagnosis. These stranded costs must be accounted for.2006 Project Criteria XI-10 LIGHT-DUTY VEHICLES

For VAVR and VRV programs, the costs to identify hi gh emitting vehicles and diagnose them are distributed across the successfully repair ed vehicles. Therefore, VAVR and VRV programs would individually need to meet the Ca rl Moyer Program costeffectiveness limit. This reflects the unique natu re of these programs and should not be considered a precedent applicable to other source c ategories. Cost-effectiveness for all other source categories would continue to be fully evaluated in advance on an engine by engine basis.

8. Flexibility in Program Design

Air district representatives have encouraged the AR B to provide flexibility for districts to develop specialized programs to address unique, loc al circumstances. They’ve noted that districts may be overly limited in designing p rograms if the program criteria are too prescriptive. ARB staff agrees that districts need flexibility, provided they incorporate

sufficient controls to ensure the emission reductio ns are real, quantifiable, enforceable, and surplus. ARB staff has attempted to incorporat e this flexibility into the Guidelines.

Some stakeholders have voiced the concern that a “o ne size fits all” approach may not work for the calculation methodology. ARB staff ha s provided a calculation methodology that works in most cases. However, if a district implements a narrowly focused program, the variables specified in the ARB ’s guidance may not be appropriate to reflect the district’s program. Districts have the option of proposing modifications to the calculation methodology, where necessary, to re flect unique elements of their program. Any proposed modifications must be includ ed in the district’s program plan. The onus is on the district to document that the pr oposed modifications are technically sound and justified. The district must have ARB ap proval to use an alternative methodology.

V. Project Criteria for VAVR and VRV

This section provides the project criteria for VAVR and VRV programs funded through the Carl Moyer Program. Unless noted, the criteria apply to both VAVR and VRV programs. VAVR programs must also comply with all provisions of the regulations found in Title 13 California Code of Regulations, D ivision 3, Chapter 13, Article 1, section 2601 et seq.

These criteria provide districts with the minimum q ualifications for the Carl Moyer Program. Districts retain the authority to impose additional requirements to address

local concerns.

A. General Requirements

• Emission reductions obtained through Carl Moyer Pr ogram projects must not be required by any federal, state, or local regulation ; memorandum of2006 Project Criteria XI-11 LIGHT-DUTY VEHICLES

agreement/understanding with a regulatory agency; s ettlement agreement; mitigation requirement; or other legal mandate.

• Projects must meet a cost-effectiveness of $14,300 per weighed ton of NOx + ROG

+ combustion PM10 reduced calculated in accordance with the cost-effectiveness methodology discussed in this chapter.

• No emission reductions generated by the Carl Moyer Program shall be used as

marketable emission reduction credits or to offset any emission reduction obligation of any person or entity.

• Potential projects that fall outside of these crit eria may be considered on a case-by-case basis if evidence provided to the ARB suggests potential surplus, real, quantifiable, and enforceable emission reduction be nefits.

• Air districts must consult with ARB staff to deter mine eligibility of all projects considered for funding on case-by-case basis. All p rojects considered on a case-by-case basis must receive ARB approval prior to receiving program funding.

• Programs utilizing funding under the Carl Moyer Pr ogram shall comply with all applicable provisions of the Carl Moyer Program Gui delines including “Administration of the Carl Moyer Program.”

B. Vehicle Eligibility Requirements

• Participation shall be entirely voluntary for vehi cle owners.

• The vehicle must be a gasoline-powered passenger c ar or light-duty truck up to 8,500 pounds gross vehicle weight.

• The vehicle must be currently registered with the Department of Motor Vehicles (DMV) as an operating vehicle and must have been re gistered for at least 24 consecutive months prior to the final date of th e sale to a VAVR enterprise or the date of repair to an address, or addresses, within the district in which the VAVR enterprise or VRV program is operated. Smog Checks must be performed as required by the DMV in order for the vehicle to be considered registered.

1. A vehicle may also be eligible if the owner of t he vehicle placed the vehicle in planned non-operational status per Vehicle Code sec tion 4604, et seq., for a total of 2 months during the continuous 24 month registra tion period, occurring at least 3 months prior to the date of sale to the VAVR ente rprise or the date of repair.

2. A vehicle may also be eligible if the registrati on has lapsed for a period not to exceed 180 days during the previous 24 months and a ll appropriate registration fees and late penalties have been paid to the DMV, provided that the vehicle is2006 Project Criteria XI-12 LIGHT-DUTY VEHICLES

registered for at least 90 days immediately prior t o its date of sale to a VAVR enterprise or date of repair.

• The vehicle to be retired shall be driven to the V AVR enterprise purchase site or VRV repair station under its own power.

• The vehicle to be retired shall not be operating u nder a Smog Check repair cost or economic hardship waiver.

• Vehicles whose emission control systems have been tampered with, as defined in Title 16 California Code of Regulations, Division 3 3, Chapter 1, Article 5.5, section 3340.41.5, are not eligible until such tampering ha s been completely corrected.

Additional Requirements for VAVR Programs Only

• If a vehicle volunteered for retirement is within 60 days of its next required Smog Check inspection, the vehicle shall pass the S mog Check inspection without receiving a repair cost waiver or economic hardship extension prior to acceptance by a VAVR enterprise operator.

• If a vehicle volunteered for retirement is within 61-90 days of its next required Smog Check inspection, the district shall verify th at the vehicle has not failed a Smog Check inspection during this time frame.

• The vehicle shall pass functional and equipment el igibility inspections as specified in the ARB’s VAVR regulation.

Additional Requirements for High Emitter VAVR or VR V Programs

• Only vehicles identified as potential high emittin g through a technology such as RSD or a high emitter profile database approved by the ARB and operated in accordance with the VAVR regulations found in Title 13 Califor nia Code of Regulations, Division 3, Chapter 13, Article 1, section 2601 et seq. are potentially eligible for VRV programs or to receive extra emission reduction cre dit for VAVR programs.

• A vehicle must receive a confirmatory Smog Check A SM test to establish its baseline emissions. To be eligible for a VRV progr am or to receive extra emission reduction credit from a VAVR program, a vehicle’s A SM test must exceed the pass/fail emission standard for the model year and vehicle class as defined in Title 16, Division 33, Chapter 1, Article 5.5, Section 33 40.42 of the California Code of Regulations. The emission standards are listed on BAR’s web site at: http://www.smogcheck.ca.gov/ftp/pdfdocs/asm_ph43.pd f

.

− Vehicles not testable under the ASM test may be gi ven a TSI Smog Check test to determine eligibility.2006 Project Criteria XI-13 LIGHT-DUTY VEHICLES

− If the vehicle’s emissions are below the pass/fail emission standards, the vehicle is not considered a high emitting vehicle. These v ehicles could still be voluntarily

retired and receive the emission reductions from a conventional VAVR program but do not quality for a VRV program.

− For pre-1974 model years, the pass/fail emission s tandards for the 1974 model may be used for purposes of qualifying vehicles for the program.

− The Smog Check test must be conducted by a BAR-lic ensed technician and must be conducted in accordance with BAR regulation s and procedures.

Additional Requirements for VRV Programs Only

• All repairs must be completed at least 91 days in advance of the vehicle’s next biennial Smog Check.

• Vehicles covered under their manufacturer’s warran ty period are not eligible. Warranty requirements are found in Title 13 Califor nia Code of Regulations, Division 3, Chapter 1, Article 6, section 2035 et seq. and A rticle 1, section 1961.

− Manufacturer warranties generally cover vehicles f or a period of 3 years or 50,000 miles whichever first occurs, with high-pric ed parts covered for a period of 7 years or 70,000 miles whichever first occurs.

− For 2004 model year and newer vehicles certified t o optional 150,000 mile emission standards, the high-priced part warranty i s extended to 8 years or 100,000 miles whichever first occurs.

• Vehicles registered to a non-profit organization, fleet, or business are not eligible.

• A vehicle may only be repaired once in its lifetim e through a VRV program.

C. Program Plan Requirements

• A district shall submit a program plan to the ARB for approval prior to initiating a VAVR or VRV program.

• The district must receive written approval of the plan from the ARB’s Executive Officer (EO) prior to implementing a VAVR or VRV pr ogram.

• The program must follow the plan, and any substant ive changes must be pre-approved by the EO.

• A district’s program plan must at a minimum includ e:

1. The name, title, and telephone number of the dis trict contact for the program.2006 Project Criteria XI-14 LIGHT-DUTY VEHICLES

2. An evaluation of environmental justice considera tions including, but not limited to, outreach addressing community needs. 3. An estimate of the number of vehicles that may b e retired and/or repaired and an estimate of the cost-effectiveness of the program a long with all assumptions and

calculations that were used to derive the estimate (recognizing that the ultimate costeffectiveness will depend on the mix of vehicles ac tually retired/repaired). 4. A copy of the contract with the VAVR enterprise operations, repair stations, and any other contractor(s) who will be responsible for run ning the program. 5. A description of the methods that will be used a nd a timetable for monitoring and auditing enterprise operations and/or repair statio ns. 6. A copy of the statement of certification that a VAVR enterprise operator has demonstrated compliance with all applicable provisi ons of the VAVR regulation. 7. The methodology and sample records for verifying that a vehicle is eligible for inclusion in the VAVR program including confirmatio n of compliance with any Smog Check requirements. 8. The protocol for informing the public of the ava ilability of eligible vehicles for sale (applies to VAVR programs only). 9. A sample of the records that will be required of the VAVR enterprise operator and/or repair stations. 10. A description of elements of the district progr am that are stricter than the minimum requirements listed in the guidance, if applicable.

Additional Requirements for High Emitter VAVR and V RV Programs

• The plan must also include:

1. A detailed description of the operation of the t echnology including but not limited to set up, typical operation, location and location criteria, calibration, and

maintenance. 2. A detailed description of the type and model of all equipment and software used to identify high emitting vehicles. 3. A copy of the standard operating procedures or p rotocols for that technology including maintenance of the technology including e quipment and software. 4. The specific criteria to be used in the applicat ion of the technology to identify a high emitting vehicle. 5. Documentation that personnel who will be operati ng the technology are trained and qualified for such operation. 6. A detailed description of the methodology that w ill be used to calculate extra emission reductions, including any deviations from the ARB’s recommended

method. 7. If a district intends to include an evaporative testing element in its program, the plan must specify the test equipment. 8. If a district intends to include a PM testing el ement in its program, the plan must specify the test equipment and test protocol.2006 Project Criteria XI-15 LIGHT-DUTY VEHICLES

9. A scope of work for the business(es) that will b e performing the vehicle testing and repairs including the general diagnosis and rep air protocols to ensure costeffective and durable repairs (for VRV programs onl y). 10. An itemized breakdown of estimated project cost s including, but not limited to, the funds allocated to: identifying high emitting vehicles (e.g. RSD data collection costs); vehicle retirement including the number of vehicles to be retired; the funds allocated to vehicle repair and the number of vehicles to be repaired; data analysis; and outreach to and solici tation of vehicles owners.

D. Recordkeeping and Reporting

• For each vehicle retired or repaired, the district shall retain records of the following

information. This information must be included in the annual report to the ARB:

1. Vehicle Identification Number (VIN). 2. Vehicle license plate number. 3. Vehicle model year. 4. Vehicle odometer reading.

5. Vehicle make and model. 6. Name, address, and phone number of legal vehicle owner(s). 7. Name and business address of the VAVR enterprise operator or of the business conducting the repair.

8. Emission reduction claimed. 9. Date of purchase of vehicle by enterprise operat or. [VAVR only] 10. Date of vehicle retirement. [VAVR only] 11. Amount paid for each repair and nature of each repair. [VRV only] 12. Date of repair. [VRV only] 13. Pre and post-repair Smog Check test results [VR V only] 14. Data identifying vehicle as potential high emit ting vehicle for VAVR or VRV participation. [High Emitter VAVR or VRV only] 15. Confirmatory Smog Check test results and date o f Smog Check test. [High Emitter VAVR or VRV only]

• For VAVR programs, the VAVR enterprise operator mu st maintain the following

records. The records are not required to be part of the annual report, but must be available for review, if requested:

1. Reproduction of California Certificate of Title and registration, as signed-off by the seller at time of final sale to the VAVR enterp rise. 2. Reproduction of the applicable certificate of fu nctional and equipment eligibility; 3. Reproduction of the applicable Notice to Dismant ler (DMV Registration 42 form). 4. Reproduction of written documentation from the D MV verifying that a vehicle meets the vehicle registration requirements of the ARB’s VAVR regulations. 5. If the retired vehicle was within 60 days of its next required Smog Check inspection, a reproduction of documentation that th e vehicle passed its Smog Check inspection.2006 Project Criteria XI-16 LIGHT-DUTY VEHICLES

• Districts and enterprise operators shall retain th ese records for the life of the project plus an additional 3 years.

E. Calculating Emission Reductions

1. Conventional VAVR Program Emission Reductions

• Emission reductions from VAVR programs shall be ca lculated in accordance with the methodology specified in the ARB’s VAVR regulations . Emission reductions, by model year of vehicle retired, are shown in Table 1 1-2 (at the end of the chapter).

• The project life for a vehicle retirement project is 3 years.

2. High Emitting VAVR Program Emission Reductions

The emission reductions for high emitting VAVR prog rams are calculated as follows:

Emission Reductions = [ER retired * VMT retired - ER replacement * VMT replacement ] * Life retired

Where: ER retired = Emission rate of retired vehicle

VMT retired = Vehicle miles traveled of retired vehicle

ER replacement = Emission rate of replacement vehicle

VMT replacement = Vehicle miles traveled of replacement vehicle

Life retired = The remaining life of the retired vehicle

a. Exhaust Emissions of Retired Vehicle

• For year 1 of the 3 year project life, the baselin e ROG ex , NOx, and CO emission rates are equal to the pollutant concentrations mea sured in the confirmatory ASM Smog Check test converted to an FTP-based gram per mile emission rate using the conversion listed in Table 11-3 (at the end of the chapter).

− For vehicles exempt from Smog Check (pre-1976 mode l years), the emissions

measured at time of retirement are the baseline emi ssions for the full 3 year

credit life.

• For years 2 and 3 of the 3 year project life, the baseline ROG ex , NOx, and CO emission rates are equal to the lesser of the two f ollowing values:

− The Smog Check pass/fail emission cutpoint polluta nt concentrations for the model year and vehicle class converted to an FTP ba sed gram per mile emission rate using the conversion equations in Table 11-3.2006 Project Criteria XI-17 LIGHT-DUTY VEHICLES

− The pollutant concentration measured in the ASM te st at the time of retirement, converted to an FTP based gram per mile emission ra te using the conversion equations used in Table 11-3.

• The VMT is the average VMT of the vehicle’s model year based on the ARB’s motor vehicle emission model. The average VMT for each m odel year is listed in Table 11-

4.

b. Exhaust Emissions for the Replacement Vehicle

• If the vehicle owner is not required to document h ow the retired vehicle is replaced, the replacement vehicle emissions are assumed to eq ual fleet average emission rate calculated using the ARB’s motor vehicle emission m odel.

For vehicles retired in 2007, the replacement vehic le emission rates are:

ROG

Exhaust g/mile ROG Evap

Running Loss g/mile ROG Evap

Hot Soak g/trip ROG Evap

Diurnal+Resting g/day/vehicle CO

Exhaust g/mile NOx

Exhaust g/mile PM10

Exhaust g/mile

0.344 0.248 0.296 1.85 6.20 0.573 0.015

For vehicles retired in 2008, the replacement vehic le emission rates are:

ROG

Exhaust g/mile ROG Evap

Running Loss g/mile ROG Evap

Hot Soak g/trip ROG Evap

Diurnal+Resting g/day/vehicle CO

Exhaust g/mile NOx

Exhaust g/mile PM10

Exhaust g/mile

0.310 0.232 0.285 1.77 5.69 0.542 0.016 Note: Emission rates calculated using EMFAC Workin g Draft 2B (June 2006). Numbers are subject to change pending final version of emission invento ry model.

• If a VAVR program is set up to provide extra incen tives for the purchase of a LEVcertified or cleaner replacement vehicle and if the owner documents that the replacement vehicle is certified to a LEV or cleane r emission standard as defined in the ARB’s LEV regulations (Title 13, Division 3, Ch apter 1, Article 1, Sections 1960.1 and 1961 of the California Code of Regulations), th e replacement vehicle emissions are assumed to equal the average emission rate of a vehicle certified to the LEV emission standard for the model year purchased as a replacement, based on ARB’s

emission model.

For vehicles retired in 2007, the replacement LEV e mission rates by model year are:

LEV

Model

Year ROG

Exhaust g/mile ROG Evap

Running Loss g/mile ROG Evap

Hot Soak g/trip ROG Evap

Diurnal+Resting g/day/vehicle CO

Exhaust g/mile NOx

Exhaust g/mile PM10

Exhaust g/mile

1997 0.108 0.084 0.151 0.651 3.979 0.354 0.019

1998 0.102 0.073 0.130 0.566 3.843 0.347 0.018

1999 0.097 0.062 0.109 0.495 3.679 0.334 0.016

2000 0.092 0.050 0.086 0.412 3.494 0.321 0.015

2001 0.086 0.036 0.063 0.325 3.269 0.305 0.013

2002 0.081 0.028 0.046 0.267 3.057 0.305 0.012

2003 0.071 0.023 0.035 0.224 2.659 0.270 0.0102006 Project Criteria XI-18 LIGHT-DUTY VEHICLES

For vehicles retired in 2008, the replacement LEV e mission rates by model year are:

LEV

Model

Year ROG

Exhaust g/mile ROG Evap

Running Loss g/mile ROG Evap

Hot Soak g/trip ROG Evap

Diurnal+Resting g/day/vehicle CO

Exhaust g/mile NOx

Exhaust g/mile PM10

Exhaust g/mile

1997 0.112 0.095 0.173 0.725 4.094 0.358 0.021

1998 0.106 0.084 0.151 0.645 3.976 0.354 0.020

1999 0.101 0.074 0.130 0.568 3.821 0.342 0.018

2000 0.096 0.062 0.109 0.494 3.658 0.329 0.016

2001 0.091 0.050 0.086 0.408 3.466 0.315 0.014

2002 0.088 0.036 0.062 0.324 3.321 0.322 0.014

2003 0.081 0.029 0.046 0.269 3.033 0.301 0.012

2004 0.053 0.023 0.035 0.224 1.989 0.185 0.011 Note: Emission rates calculated using EMFAC Workin g Draft 2B (June 2006). Numbers are subject to change pending final version of emission invento ry model.

• The VMT of the replacement vehicle is equal to the VMT of the retired vehicle.

c. Evaporative Emission Reductions

• Evaporative emission reductions are calculated usi ng the methodology for conventional VAVR programs if no evaporative testin g is conducted on the retired vehicle. The reductions, based on the retired vehi cle’s model year, are listed in

Table 11-2.

• Districts may, at their option, conduct evaporativ e testing on vehicles identified as exhaust high emitting vehicles to determine whether they are evaporative high emitting vehicles as well.

− Low pressure fuel evaporative testing must be cond ucted using equipment that

has been submitted to BAR for certification.

− Evaporative testing must be conducted in accordanc e with the manufacturer’s standard operating procedures and the protocols for low pressure fuel evaporative testing developed by BAR.

− Only vehicles that fail the low pressure fuel evap orative test are eligible to receive extra emission reductions as a high evapora tive emitter.

− For vehicles identified as high evaporative emitte rs, the emission reductions for retirement are equal to the evaporative emission re ductions for conventional VAVR listed in Table 11-2 plus the average emission reductions for repairing evaporative system failures estimated by ARB staff in its evaluation of the low pressure evaporative test, 14.5 pounds of ROG per v ehicle per year.2006 Project Criteria XI-19 LIGHT-DUTY VEHICLES d. Particulate Matter Emission Reductions

• PM exhaust emission reductions are calculated usin g the methodology for conventional VAVR programs. The reductions are bas ed on the retired vehicle’s model year and are found in Table 11-2.

• If a viable method to measure and correlate PM emi ssions from vehicles is demonstrated and validated, districts have the opti on of measuring the PM emissions of vehicles identified as possible high e mitters and quantifying the extra emission reductions of retiring PM high emitting ve hicles, subject to ARB approval.

• If a district intends to attempt to identify and q uantify emission reductions from retiring PM high emitting vehicles, the district’s program plan must specify the analytical approach that would be used to measure P M emissions.

3. VRV Emission Reductions

• Emission benefits are calculated from the differen ce between the pre and post-repair Smog Check test where the post-repair test is a ful l test, not a “fast pass” test.

• The pre and post repair Smog Check testing should be as close to the time of repair as possible.

• To calculate pre- and post-repair emission rates, the pollutant concentrations

measured in the ASM test are converted to an FTP ba sed gram per mile emission rate using the conversion equations listed in Table 11-3.

• The VMT is the average VMT of the vehicle’s model year based on the ARB’s motor vehicle emission model. Average VMT for each model year is listed in Table 11-4.

• The life of the emission credit for exhaust and ev aporative repairs is one year.

• The mass emission reduction is equal to the gram p er mile emission reduction multiplied by the VMT multiplied by the one year cr edit life.

Emission Reductions = [ER pre-repair - ER post-repair

]* VMT * Life

Where: ER pre-repair

= Emission rate of vehicle prior to repair, based on prerepair Smog Check converted to gram per mile rate u sing

ASM-FTP conversion

ER post-repair

= Emission rate of vehicle after repair, based on post-repair Smog Check converted to gram per mile rate using AS MFTP conversion

VMT = Vehicle miles traveled of vehicle Life = Life of repair = 1 year2006 Project Criteria XI-20 LIGHT-DUTY VEHICLES

• For vehicles identified as high evaporative emitte rs via the low pressure evaporative test and repaired, emission reductions are equal to the average emission reductions for repairing evaporative system failures estimated by ARB staff in its evaluation of the low pressure evaporative test, 14.5 pounds of R OG per vehicle per year.

4. Modifications to Calculation Methodology for VAV R and VRV

• Air districts retain the option of proposing modif ications to the calculation methodology, where necessary, to reflect unique ele ments of their program. Districts must provide technical justifications to support any proposed modifications to the default methodology in their program plan. The district must receive written approval from the ARB to use a modified methodology

.

− If a district receives approval to use a modified calculation methodology, emission reductions for all vehicles retired or rep aired must be calculated in accordance with that approved methodology.

F. Cost-Effectiveness Calculations

• Cost-effectiveness must be calculated in accordanc e with the methodology described in Appendix C of The Carl Moyer Program Guidelines – Approved

Revision 2005

.

• State funds used to pay for the administrative cos ts of VAVR and VRV programs are

not included in the cost-effectiveness calculations , but must be accounted for

relative to the administrative limits associated wi th each funding source. Administrative costs include funds spent on outreac h, data analysis, and development of data analysis tools such as database s.

Additional Requirements for High Emitter VAVR and V RV Programs

• The district must include the State or DMV funds e xpended on program-related costs to identify and retire/repair high emitting v ehicles in the cost-effectiveness

calculations.

− Program-related costs are the costs directly linke d to conducting RSD measurements, Smog Check tests, diagnosing vehicles , and the costs to retire vehicles or repair vehicles.

− Broad programmatic costs (e.g. the cost of RSD) wh ich cannot be attributed to retiring a specific vehicle shall be distributed pr oportionally across each vehicle repaired or retired.

− All State funds used to pay for diagnosing and att empting to repair vehicles that are ultimately deemed unrepairable or are unsuccess ful in lowering emissions below the Smog Check emission standards must also b e included into the cost-2006 Project Criteria XI-21 LIGHT-DUTY VEHICLES

effectiveness calculations. These costs shall be d istributed across each vehicle successfully repaired.

− The program cost-effectiveness shall be calculated separately for VAVR and VRV programs and for each year of program funding. The results shall be reported in the district’s annual and final report for that year of funding.

• If the district has a cap on the amount it pays fo r repairs, vehicle owners may contribute their own funds to pay for repairs that exceed the district cap. Funds contributed by vehicle owners are not included in t he cost-effectiveness calculation.

G. Offering Vehicles/Parts to the Public (VAVR only )

• The enterprise operator must inform the district o f the vehicles that are ready for dismantling.

• The district must provide a detailed description o f the vehicle to interested parties including collectors and enthusiasts.

• The enterprise operator must wait a minimum of 10 days before submitting a Notice

to Dismantle to the DMV.

• If an interested person contacts the enterprise op erator, the enterprise operator must hold the vehicle for an additional, minimum of 7 da ys.

• Non-emission-related and non-drive train parts fro m the vehicle may be sold at the sole discretion of the enterprise operator.

• Engine, emission-related parts, transmission, and drive train parts must be removed from the vehicle and destroyed after the 10 day wai ting period but prior to offering the remaining parts for sale. (Emission-related an d drive train parts are defined in the VAVR regulation.)

• If a vehicle or its emission-related or drive trai n parts are sold instead of retired, no emission reductions will be generated, and no Carl Moyer Program funds may be used for retiring the vehicle.

H. Repair Requirements (VRV only)

• Vehicles must only be diagnosed and repaired by Sm og Check technicians licensed by BAR at Smog Check stations licensed by BAR.

• The Smog Check technicians and Smog Check stations must comply with all California laws and regulations governing automotiv e repair.2006 Project Criteria XI-22 LIGHT-DUTY VEHICLES

• The legal owner of the vehicle must provide writte n approval in advance authorizing the diagnosis and all repairs. The owner must be p rovided a final invoice detailing the cost of parts, labor, and tax for the repair in accordance with the Automotive Repair Act.

• Only emission-related repairs are fundable through a VRV program.

• Stations and technicians must follow a systematic diagnostic approach, in accordance with standard industry protocols, that o btains relevant data about the engine and emission control system on the vehicle, based on the type of emissionrelated Smog Check failure.

− The systematic approach includes a diagnostic rout ine that provides sufficient data to diagnose and repair emission failures in a cost-effective and efficient manner. Data may include, but, are not limited to, compression readings, leak down percentages, intake manifold vacuum readings, scan tool data, condition of grounds, other electrical connections along with wi ring, oxygen sensor testing, and other industry accepted factory testing procedu res. Diagnostic and repair procedures specified by the vehicle manufacturer sh ould take precedence over generic procedures.

− The diagnosis must ensure the vehicle’s engine is i n good mechanical condition before performing repairs. This should include an inspection of basic engine operation (i.e., fuel control, individual cylinder contribution, cylinder seal, internal engine noises, oil burning, etc.) and a comprehensi ve visual inspection. All

defects must be noted.

− Diagnostic strategies must have the goal of maximu m emission reductions for repair funds spent. Technicians must not perform d iagnostic strategies and repairs that would result in short term emission re ductions or minimal reductions.

• The technician must document all serviceable and d efective emission related parts and systems found during the diagnosis and repair p rocess and must provide the

documentation to the district. The district must r etain a copy. The ARB recommends that districts provide a standardized di agnostic form to aid technicians in recording basic diagnostic information.

− An example of a standardized diagnostic form, from BAR’s training course for Smog Check technicians, is provided in Figure 11-1 (at the end of the chapter).

− It may not be necessary to fill out the diagnostic data form completely because all the tests listed may not be appropriate for every v ehicle.

− The diagnostic form should be considered a guide, not a list of the complete diagnosis required. The ARB recognizes that each v ehicles diagnosis is unique. Other tests may be required to completely diagnose emission failures.2006 Project Criteria XI-23 LIGHT-DUTY VEHICLES

• If the technician discovers tampering during the p re-repair test or during the diagnosis, the technician must stop performing the test, diagnosis, or repair and contact the district to inform them of the tamperin g. Tampered vehicles are not eligible for participation in a VRV program until s uch tampering has been completely

corrected.

• If a vehicle repair requires the replacement of th e catalytic converter, the replacement catalytic converter must either be a ne w aftermarket catalytic converter that has been certified by the ARB for use on OBDII -equipped vehicles or an original equipment manufacturer (OEM) catalytic converter. Because of significant concerns about verifying catalytic converter durability, no used, recycled, salvaged, rebuilt, or remanufactured aftermarket or OEM catalytic convert er may be installed under the Voluntary Repair of Vehicles program.

• To receive emission credit under the Carl Moyer Pr ogram, the repair of the vehicle must bring the vehicle’s emissions into compliance with the Smog Check emissions standards for the model year and vehicle class. Re pairs that leave a vehicle’s emissions greater than the ASM emissions standards are not creditable.

• The invoice for the repair must clearly detail eac h repair and associated cost, in accordance with all applicable automotive repair la ws and regulations, before the invoice is paid. The invoice must include all repa irs performed on the vehicle.

• The district must designate a qualified staff pers on or third party unaffiliated with the Smog Check station to handle complaints or disagree ments that may arise between the vehicle owner and the repair station. The cont act information for that person must be made available to all vehicle owners who pa rticipate in the program.

− The district should maintain a record of disputes and their resolution for use in evaluating and improving the program.

Evaporative Repairs

• Districts may, at their option, conduct evaporativ e testing on vehicles identified as potential exhaust high emitting vehicles and brough t in for repairs.

• Low pressure fuel evaporative testing must be cond ucted using equipment that has

been submitted to BAR for certification. Stations must follow testing and repair procedures prescribed in policy or regulations adop ted by BAR.

• Evaporative testing must be conducted in accordanc e with the manufacturer’s standard operating procedures and the protocols for low pressure fuel evaporative testing developed by BAR.2006 Project Criteria XI-24 LIGHT-DUTY VEHICLES

• Only vehicles that fail the low pressure fuel evap orative test are eligible for evaporative repairs.

• Evaporative repairs must bring the vehicle’s emiss ions into compliance with the low pressure fuel evaporative test to be creditable.

Particulate Matter Repairs

• If a viable method to measure PM emissions from ve hicles is demonstrated, districts have the option of measuring the PM emissions of ve hicles identified as possible high emitters and quantifying the emission reductio ns of repairing PM high emitting vehicles, subject to ARB approval.

• If a district intends to attempt to identify and q uantify emission reductions from repairing PM high emitting vehicles, the district’s VRV program plan must specify the analytical approach that would be used to measure a nd quantify PM emissions.2006 Project Criteria XI-25 LIGHT-DUTY VEHICLES Table 11-2

Voluntary Accelerated Light-Duty Vehicle Retirement Program

Emission Reductions for Calendar Year 2007

Total Pounds Per Vehicle Over 3 Year Credit Life Emission Reductions (pounds) – 3 Year Credit Life

Model Year TotalROG* NOx CO PM10 ROG exh ROG evap

65 and earlier 506 158 2,999 0.74 279 227
66 472 152 2,771 0.81 239 233
67 479 154 2,823 0.77 243 236
68 487 159 2,889 0.83 249 239
69 498 163 2,967 0.99 255 243
70 431 167 3,056 1.04 261 170
71 436 169 3,053 1.13 270 166
72 442 172 3,059 1.06 279 163
73 448 173 3,070 0.97 284 165
74 386 152 2,821 1.20 264 122
75 320 137 2,656 1.03 207 113
76 215 110 2,246 0.75 104 111
77 173 93 2,203 0.63 90 83
78 177 92 2,191 0.88 91 86
79 161 82 1,455 0.86 77 84
80 124 74 1,211 0.69 59 65

81 105 56 934 1.16 45 59

82 102 59 920 1.04 44 58

83 92 62 795 0.91 34 58

84 99 62 752 0.93 32 67

85 92 57 490 0.86 24 68

86 89 57 446 0.89 23 66

87 80 55 407 0.80 22 58

88 72 55 371 0.77 22 50

89 51 44 424 0.71 24 27

90 49 34 450 0.68 25 24

91 44 35 438 0.63 25 19

92 42 36 434 0.60 25 17

93 32 34 253 0.55 18 14

94 19 22 40 0.49 7 12
* Includes exhaust and evaporative emissions

Source: Calculated using EMFAC Working Draft 2B (June 200 6). Numbers are subject to change pending final version of emission inventory model. Assumes average 1965 through 2007 vehicle as replacement vehicle for vehicles retired in calenda r year 2007.2006 Project Criteria XI-26 LIGHT-DUTY VEHICLES Table 11-2 (continued)

Voluntary Accelerated Light-Duty Vehicle Retirement Program

Emission Reductions for Calendar Year 2008

Total Pounds Per Vehicle Over 3 Year Credit Life

Emission Reductions (pounds) – 3 Year Credit Life

Model Year TotalROG* NOx CO PM10 ROG exh ROG evap

65 and earlier 503 159 2,993 0.73 278 226
66 470 152 2,760 0.69 240 230
67 478 155 2,812 0.70 244 234
68 487 159 2,879 0.72 250 237
69 497 163 2,956 0.75 257 240
70 431 167 3,047 1.23 263 168
71 439 170 3,047 0.84 272 167
72 443 171 3,050 0.88 281 162
73 450 173 3,063 0.79 285 165
74 388 155 2,835 1.39 267 122
75 324 143 2,686 0.98 210 114
76 212 109 2,209 0.79 103 110
77 171 92 2,160 0.67 88 83
78 173 92 2,144 0.66 89 85
79 160 82 1,436 0.91 76 84
80 122 74 1,195 0.74 58 64

81 104 56 928 1.00 45 59

82 102 60 912 0.92 43 58

83 93 63 791 0.84 34 58

84 100 63 751 0.84 32 68

85 95 57 499 0.89 25 70

86 94 58 466 0.90 24 70

87 85 57 428 0.83 24 62

88 77 56 395 0.80 23 54

89 56 45 445 0.77 25 31

90 54 36 470 0.76 26 28

91 49 37 460 0.72 27 22

92 47 38 456 0.66 27 20

93 37 36 278 0.60 20 18

94 25 25 73 0.56 10 15
* Includes exhaust and evaporative emissions

Source: Calculated using EMFAC Working Draft 2B (June 200 6). Numbers are subject to change pending final version of emission inventory model. Assumes average 1965 through 2008 vehicle as replacement vehicle for vehicles retired in calenda r year 2008.2006 Project Criteria XI-27 LIGHT-DUTY VEHICLES Table 11-3 ASM-FTP Correlation Equations 1

Pre-1990 Model Year Correlation Equations

FTP_HC = 1.2648 * exp( - 4.67052
+ 0.46382 * hc_term + 0.09452 * co_term + 0.03577 * no_term + 0.57829 * wt_term - 0.06326 * my_term + 0.20932 * trk)

FTP_CO = 1.2281 * exp( - 2.65939
+ 0.08030 * hc_term + 0.32408 * co_term + 0.03324 * co_term**2 + 0.05589 * no_term + 0.61969 * wt_term - 0.05339 * my_term + 0.31869 * trk)

FTP_NOX = 1.0810 * exp( - 5.73623
+ 0.06145 * hc_term - 0.02089 * co_term**2 + 0.44703 * no_term + 0.04710 * no_term**2 + 0.72928 * wt_term - 0.02559 * my_term - 0.00109 * my_term**2 + 0.10580 * trk)

where: hc_term = ln( (ASM1_HC*ASM2_HC)^.5 ) - 3.729 89

co_term = ln( (ASM1_CO*ASM2_CO)^.5 ) + 2.07246 no_term = ln( (ASM1_NO*ASM2_NO)^.5 ) - 5.83534 MY_Term = model_year - 1982.71 wt_term = ln( vehicle_weight in pounds) TRK = 0 if vehicle is a passenger car and 1 if vehi cle is a light-duty truck

1 Conversion equations developed by Eastern Research Group and Sierra Research and used in the ARB

and BAR’s 2004 Evaluation of the California Enhanced Inspecti on and Maintenance (Smog Check) Program

.2006 Project Criteria XI-28 LIGHT-DUTY VEHICLES

1990 and Newer Model Year Correlation Equations

FTP_HC = 1.1754 * exp( - 6.32723
+ 0.24549 * hc_term + 0.09376 * hc_term**2 + 0.06653 * no_term + 0.01206 * no_term**2 + 0.56581 * wt_term - 0.10438 * my_term - 0.00564 * my_term**2 + 0.24477 * trk) ;

FTP_CO = 1.2055 * exp( 0.90704
+ 0.04418 * hc_term**2 + 0.17796 * co_term + 0.08789 * no_term + 0.01483 * no_term**2 - 0.12753 * my_term - 0.00681 * my_term**2 + 0.37580 * trk) ;

FTP_NOX = 1.1056 * exp( - 6.51660
+ 0.25586 * no_term + 0.04326 * no_term**2 + 0.65599 * wt_term - 0.09092 * my_term - 0.00998 * my_term**2 + 0.24958 * trk)

where: hc_term = ln (ASM1_HC*ASM2_HC)^.5 ) - 2.3239 3 ;

co_term = ln (ASM1_CO*ASM2_CO)^.5 ) + 3.45963 ; no_term = ln (ASM1_NO*ASM2_NO)^.5 ) - 3.71310 ; MY_Term = model_year - 1993.69; wt_term = ln( vehicle_weight in pounds) TRK = 0 if vehicle is a passenger car and 1 if vehi cle is a light-duty truck

For cases in which the HC or NO ASM scores are zero , they are set to 1 ppm; for cases in which the CO ASM score is zero, it is set to 0.01%.

Definitions: FTP_HC = Estimated hydrocarbon FTP emi ssion rate in grams per mile

FTP_CO = Estimated CO FTP emission rate in grams pe r mile FTP_NO = Estimated NOx FTP emission rate in grams p er mile ASM1_HC = Measured ASM 5015 mode hydrocarbon concen tration in ppm ASM2_HC = Measured ASM 2525 mode hydrocarbon concen tration in ppm ASM1_CO = Measured ASM 5015 mode CO concentration i n percent ASM2_CO = Measured ASM 2525 mode hydrocarbon concen tration in percent ASM1_NO = Measured ASM 5015 mode NOx concentration in ppm ASM2_NO = Measured ASM 2525 mode NOx concentration in ppm2006 Project Criteria XI-29 LIGHT-DUTY VEHICLES Table 11-4 Average Vehicle Miles Traveled by Model Year

Model Year Annual VMT*

in 2007 Annual VMT*

in 2008

1965 and older 5,173 5,118

1966 5,250 5,164

1967 5,350 5,264

1968 5,485 5,400

1969 5,635 5,550

1970 5,786 5,698

1971 5,910 5,823

1972 6,048 5,955

1973 6,132 6,039

1974 6,163 6,068

1975 6,312 6,212

1976 6,376 6,269

1977 6,475 6,364

1978 6,544 6,433

1979 6,636 6,520

1980 6,701 6,586

1981 6,794 6,676

1982 6,893 6,771

1983 6,998 6,870

1984 7,172 7,042

1985 7,306 7,168

1986 7,497 7,360

1987 7,600 7,456

1988 7,763 7,615

1989 7,943 7,787

1990 8,108 7,942

1991 8,317 8,143

1992 8,538 8,346

1993 8,787 8,582

1994 9,022 8,801

1995 9,252 9,010

1996 9,540 9,280

1997 9,834 9,552

1998 10,176 9,866

1999 10,546 10,205

2000 10,912 10,529

2001 11,328 10,897

2002 11,824 11,324

2003 12,411 11,819

2004 13,150 12,426

2005 13,983 13,064

2006 13,999

*Average vehicle VMT calculated using EMFAC Working Draft 2B (June 2006). Numbers are subject to change pending final version of emission inventory model.2006 Project Criteria XI-30 LIGHT-DUTY VEHICLES Figure 11-1 Sample Diagnostic Data Form 2

DIAGNOSTIC DATA FORM
The following chart is designed to assist the CAP s tation technician in the diagnosis and repair of fa iling CAP vehicles. Each vehicle and its emission failure(s) are unique and may requ ire further tests than those listed below. Not all vehicles may require these tests. Factory test procedures take precedence over any ge neric test. WRITE YES (Y), NO (N) OR READING/EXPLAINATION. DO N OT CHECK

Technician # Date CAP ID# Year / Make / Model Vehicle License #

Work order # Confirm basic engine condition: Engine condition: any smoking, knocking, head gaske t leaks or any other degraded engine condition(s)?

______________________ (*As needed*) compression test, cylinder balance te st, leak down test results (whichever test was appr opriate)
#1 _________ #2 _________ #3 _________ #4 _________ #5 _________ #6 _________ #7 _________ #8 ________

_ Base timing ___________ Total timing advance ______ _____ Coolant Temp ___________ Vacuum readings ____

______ Ignition system: overall condition, are there any misfires? (HC fail ures) What is the specific component of the ignitio n system that needs to be replaced / repaired? List below

___________________________________________________ ___________________________________________________ _____ Fuel pressure within specs? Y/N _________ results__

___________________________________________________ _____________ Air Injection System (if applicable) Is AIS functioning correctly? Y/N__ ____ if no, why ___________________________________ EGR system (if applicable) Is system functioning correctly? Y/ N _____________ Is valve getting vacuum? Y/N ______

________ Does engine stumble/die when valve is manually rais ed? Y/N _____________ Is EGR valve defective? Y/N _

__________________ Is system restricted? Y/N:__________ Is system plug ged? Y/N __________ Other:_________________________

_______________ Are there any Factory Technical Service Bulletins ( TSBs), recalls/warranties related to the emission f ailure? ____________________ Are there any Diagnostic Trouble Code(s) stored? If yes, are they emission related? If yes, record cod e(s) ______________________ If vehicle is OBDI did you clear the codes and did they return? If vehicle is OBDII what is recorded i n “Freeze Frame Data”? Is vehicle failing for monitors? __________________

___________________________________________________ _____________ Oxygen Sensor : Low Voltage: ____________mV High Voltage: _______ _____mV Rise time: ____________mS

NOTE : min/max/rate of change measured while artificiall y manipulating air/fuel mixture full rich & full le an. Average voltage: ____________ Is O2 sensor function ing correctly? ____________________________________

_______________ Is vehicle in fuel control? Y/N____________ If no i s O2 biased? Rich Y/N ____________ Lean Y/N _______

____ Will computer respond to an artificial O2 signal? Y /N, if no, why?

___________________________________________________ ___________________________________________________ ______ What are fuel trim numbers under test conditions? _

___________________________________________________ _______________ Cross-reference the failed emission(s) with the rel ated failed test. Final Diagnosis / What component(s) or system(s) ne ed to be repaired or replaced and why



### CATALYTIC CONVERTER DIAGNOSTIC ROUTINE

Factory diagnostic/testing procedures take preceden ce over generic tests.

Cat tests are valid or useful to the extent the veh icle is in fuel control. CAT tests require certain conditions be created by upstream systems in order to be valid. Fuel control is not j ust a varying O2S and/or fuel metering device. Fuel control is defined as the vehicle’s ability to control fuel in response to the O2S inpu t signal keeping the air/fuel ratio at 14.7 to 1 (s toichiometric). CAT replacement is generally the last repair approved. Do not request a CAT with other repairs associated with its efficiency. DO NOT REQUEST A CAT ON A VEHICLE THAT IS NOT IN FU EL CONTROL.

RECORD ON THE WORK ORDER “THE VEHICLE IS IN FUEL CO NTROL”. O2 snap test CO2 cranking test Pre CAT / Post CAT (intrusive test) Factory specific temperature tes t O2% ____ % HC: _______ ppm Pre CAT: ________ Post C AT: _______ temp in _____ temp out _____

CO2: _______ CAT efficiency: _____% Two CAT tests are more conclusive than one. A gener ic temperature test alone is not acceptable. Temper ature tests are best used to confirm another test. An intrusive test is an optio nal test to confirm the effectiveness of the reduct ion portion of the catalyst.

2 Sample diagnostic form from BAR’s training course to licensed Smog Check technicians. Not all fields may be relevant for district VRV program. Districts may design the ir own forms if they choose.2006 Project Criteria XI-31 LIGHT-DUTY VEHICLES

VI. References

ARB, 1998. Air Resources Board, Proposed Regulatio ns for Voluntary Accelerated Light-Duty Vehicle Retirement Enterprises, October 23, 1998.

ARB, 2001. Air Resources Board, Proposed Amendment s to Air Resources Board Voluntary Accelerated Vehicle Retirement Regulation s – Minimize the Differences Between ARB and BAR VAVR Regulation and Allow Parts Recycling and Resale of Non-Emission-Related and Non-Drive Train Parts, Nov ember 30, 2001.

ARB, 2005. Air Resources Board, Environmental Impa cts of Implementing A Low Pressure Evaporative Test in the California Smog Ch eck Program, November 29, 2005.

ARB, 2006. Amendments to the Air Resources Board’s Regulations for Voluntary Accelerated Light-Duty Vehicle Retirement Enterpris es, December 7, 2006.

ARB/BAR, 2004. Technical Support Document for Eval uation of the California Enhanced Vehicle Inspection and Maintenance (Smog C heck) Program: April 2004 Draft Report to the Inspection and Maintenance Revi ew Committee, June 2004.

ARB/BAR, 2005. April 2004 Evaluation of the Califo rnia Enhanced Vehicle Inspection and Maintenance (Smog Check) Program: Report to th e Legislature, September 2005.

BAR, 2001. Bureau of Automotive Repair, Remote Sen sing Device High Emitter Identification with Confirmatory Roadside Inspectio n, Final Report 2001-06, August 30, 2001.

Stedman. Donald H. Stedman and Gary A. Bishop, Dep artment of Chemistry and Biochemistry, University of Denver, Colorado, Emiss ions-Based Mobile Source Inventory Methods.

Stedman, 1994. Donald H. Stedman, On-Road Remote S ensing of CO and HC Emissions in California, February 1994, ARB Contrac t No. A032-093.

U.S. EPA. Julian W. Jones, C. Ted Ripberger, and N iranjan Vescio, U.S. Environmental Protection Agency, Office of Res earch and Development, FINAL REPORT An Investigation of Remote Sensing Devices f or Chemical Characterization of

Motor Vehicle Exhaust.1 Carl Moyer Program Advisory: 06-001

Minimum Specifications for Electronic Monitoring Un its

This page updated January 30, 2006

This advisory provides guidance on the minimum requ ired specifications for electronic monitoring units (EMU) required to be installed on fleet modernization, locomotive, and marine projects funded using the 2005 revised Carl Moyer Program Guidelines.

With the recent revisions to the Carl Moyer Guideli nes, marine * , locomotive and fleet modernization projects require the installation of an EMU. Although not required by the Carl Moyer Program Guidelines, districts may choose to require the installation of an EMU system with each new engine for other source ca tegories. The full purchase of the EMU (including warranty, data retrieval, compil ation, and transmission to the district, and the installation cost) is eligible for Carl Moy er Program funding, and may be included when calculating project cost-effectivenes s. The following are minimum specifications for the districts to follow. Distri cts may allow projects with EMUs installed that meet these minimum specifications to complete all reporting through the electronic data system. A district may require additional spe cifications and/or more stringent specifications at its discretion.

Minimum Specifications

When is the EMU required to operate?

The EMU must be powered at all times during vehicle /equipment operation. If the EMU is battery powered, the battery life must be long e nough to ensure the EMU is charged and functional each time the vehicle/equipment is o perated.

What will the EMU track?

The EMU must track the geographic position and eith er the operated hours or the mileage traveled, or both, of the vehicle/equipment

.

All data must be recorded while the vehicle/equipme nt is in operation. The vehicle/equipment position must be updated upon sta rtup and at least once every 30 minutes during vehicle/equipment operation. The ti me-to-first-fix should be no longer

than five minutes.

* Installation of an EMU is not required for Year 8 funded marine projects. South Coast Air Quality Management District (AQMD) has agreed to conduct a pilot for year 8 funds that would require EMUs compliant with the minimum specifications listed he re be installed on South Coast AQMD marine projects

. ARB will use the information gained from South Coas t AQMD's experience procuring EMUs for Year 8 funded marine projects to update the minimum EMU sp ecifications listed here with regard to marine projects for Year 9 projects.2

How must the EMU store and transmit collected data?

The collected data must be provided to the district on a periodic basis, or, at the discretion of the district, the data may be transmi tted directly to the district in real-time. The EMU must include either the capability to autom atically transmit the stored data from the vehicle/equipment, or enable downloading o f the stored data through a port in the device. If the storage method is used, the EMU must have the capacity to store as much data as is necessary to ensure that data is no t over-written prior to any scheduled data retrieval. At the discretion of the district, the stored data may be encrypted, or otherwise protected, and require a password distrib uted only to the district and ARB.

What data must be recorded?

The EMU must store the time, date, position, elapse d time since last recorded position, elapsed operated hours since last recorded position , and accrued mileage since last recorded position (required for fleet modernization projects). The positional data stored and transmitted must either be accompanied by softw are which will code raw positional data using the following codes, or directly transmi t the positional data pre-coded into these zones;

1. Whether or not the position is in the district b oundary (including district coastal boundary for marine projects). 2. Whether or not the position is in California (in cluding its coastal waters). 3. Whether or not the position is outside Californi a (including its coastal waters). 4. Other zones within the district, or other distri cts in California, may be specified at

the discretion of the district.

How often must the collected data be provided to th e district?

Periodically (preferably on a monthly basis, but at least quarterly for fleet modernization projects and annually for all other projects), the data must be downloaded and

transmitted to the district in an electronic format specified by the district.

What information must be provided to the district?

For each vehicle/equipment the submitted data shall include at least:

− Grant ID number. (Optional)

− Vehicle ID, Equipment ID, or Vessel ID.

− Date of download.

− Total accumulated miles and/or hours operated by c oded zone described above. All data collected must be reported regardless of w hether hours or miles or both

were recorded.

− Date and time that any failure or malfunction of t he EMU occurred.

− Time periods, if any, that the EMU was not operati onal.

− Fuel consumption. This is optional, and is not re quired to be monitored by the EMU. However, liquefied natural gas-diesel and oth er dual fuel locomotive projects, marine projects, and other fuel based pro jects are required to monitor and report fuel consumption in their annual reports , as specified in the revised Carl Moyer Guidelines.3

How long must the collected data be submitted to th e district?

Data collected must be submitted to the district fo r the lesser of five years or the project life. As noted above, districts may allow projects with EMUs installed to complete all reporting through the electronic data system. For the remainder of the projects life, if any, reporting may continue to be completed through the electronic system, although this is not required. However, reporting must cont inue to be completed as required in the revised Carl Moyer Guidelines.

How rugged must the EMU be?

The EMU must be tamperproof and be rugged enough to withstand the operating environment of the vehicle/equipment for the expect ed life of the project, if installed per

the manufacturer’s instructions.

What are the warranty requirements?

The EMU must have a full repair or equivalent repla cement warranty for 5 years. If the project life is less than five years, the warranty may equal the project life. It the project life is longer than 5 years the contract may also c ontain an option for the participant to extend the warranty beyond the minimum amount (with district approval). This extended warranty may be included when calculating cost-effectiveness for Carl Moyer funding eligibility. The reporting must continue t o be completed through the electronic system for the extent of the warranty.

What data must be provided in the event the EMU fai ls?

The EMU must accurately track vehicle/equipment pos ition and activity during the operation of the vehicle/equipment. If the unit fa ils to record as described above for a period exceeding five (5) percent of the annual rep orting period the participant is required to submit as part of the annual report doc umentation of the vehicle/equipment activity during the missing time period.

Can these minimum specifications be modified by the district?

It will be the responsibility of the district to as sure that participants install, operate and report data using the EMU in accordance with these specifications and the requirements contained in the revised Carl Moyer Guidelines. On a case-by-case basis, and with ARB’s approval, for projects in which an EMU meetin g these specifications is either not available for the vehicle/equipment, or results in additional costs exceeding ten (10) percent of the project cost (excluding the cost of the EMU), some of these specifications may be modified or deleted, or monit oring and reporting may be allowed using prior ARB approved methods. The district mus t justify the request for such an exemption, including a demonstration that a reasona ble effort (such as an RFP or other means) was made to contract with a supplier for an EMU meeting the minimum specifications.4

What about projects in which an EMU is already inst alled on the vehicle/equipment?

On a case-by-case basis, for projects in which an E MU is already in place on the vehicle/equipment, at the option of the participant and the district, that EMU may be utilized and some of these specifications may be mo dified or deleted, as approved by ARB. In such cases, it will be the responsibility of the participant to provide information on the specifications of the EMU system and to main tain the EMU system in working condition for the lesser of five years or the proje ct life.-1- Carl Moyer Program Advisory: 06-002

Clarifications to 2005 Carl Moyer Program Guideline s

This page updated March 10, 2006

On November 17, 2005, the Air Resources Board (ARB) approved revisions to the Carl Moyer Program Guidelines. The ARB staff issued the approved revision of the 2005 Guidelines on January 6, 2006. In February 20 06, the Air Resources Board staff conducted district training sessions on the new Gui delines. The district training sessions and initial implementation of the project criteria identified typographical errors and areas in which the intent was not clear. In order to provid e clarification on these issues, this advisory provides ARB staff’s interpretation of som e provisions of the 2005 Carl Moyer Program Guidelines to assist the districts with loc al implementation of the Program.

Part I, Chapter Two: Administration

Which Guidelines should districts use for Year 7 an d Year 8 funds?

For Year 7, districts may choose to use either the 2003 Guidelines or the 2005 Guidelines. However, districts must use the same Guidelines for all of one fiscal year’s funding. For Year 8, districts must use the 2005 Guidelines.

Can the $2 motor vehicle fee be used as match? Yes, the $2 motor vehicle fee authorized under AB 9 23 can be used as match. However, only projects funded for mobile sources that meet t he criteria of the Carl Moyer Program are eligible as match.

Please clarify how interest income should be treate d. Interest income from Carl Moyer Program funds must be used to fund projects that meet current Carl Moyer Program Guidelines. Districts a re required to report the interest income annually. Projects funded from interest income mus t be reported in the annual report and the final report of the year from which the interes t is obligated to a project.

Can project proponents apply for other grant fundin g? This is discussed on page II-25, D. Project Applica tions in the second paragraph. The intent of this paragraph was not to prohibit applic ants from submitting multiple applications.

Instead district forms must include a statement fro m the applicant as to which, if any, other grant programs have been applied to for project fun ding. If grant funding is received from another entity, the applicant must comply with Sect ion 44283(g) of the Health and Safety Code, which states:

“for purposes of determining any grant amount pursu ant to this chapter, the incremental cost of any new purchase, retrofit, rep ower, or add-on equipment shall be reduced by the value of any current financial incen tive that directly reduces the project price, including any tax credits or deductions, gra nts, or other public financial-2-

assistance. Project proponents applying for fundin g shall be required to state in their application any other public financial assistance t o the project.”

Any project proponent who is found to have received multiple funding for the same project without providing written notification to the appro priate district(s) of the amounts awarded shall, at a minimum, be disqualified from funding f or that engine from all sources and may also be banned from submitting future applications to any and all Carl Moyer Program solicitations. In addition, as a violation of law, including but not limited to the Business and Professional Code, ARB and/or the districts may lev ee fines and/or seek criminal charges.

Can a district make payment to an engine distributo r or dealer rather than to the project applicant? Paragraph VIII.C.2. Itemized Invoices, on page II-3 0 of the administrative guidelines provides flexibility to the districts in this regar d. Payment may be made to the engine distributor or dealer if such payment arrangements are specified in the contract between the district and the project proponent.

Please clarify Paragraph VIII, G, Page II-32, Admin istrative Guidelines, regarding the ability to seek fines. Section 43016 of the Health and Safety Code authori zes ARB to seek remedies for violations of “any order, rule, or regulation adopt ed pursuant to this part”. The intent of this language is to disclose to the applicant that ARB c an apply fines or seek other remedies if necessary to assist districts with enforcement. Th e districts can also seek remedies by enforcing the contract terms through contract law a nd provisions of the Business and

Professions Code.

Can a district charge the project applicant a fee f or engine inspection(s)? No. Performing engine inspections is part of the a dministration of the Carl Moyer Program. The cost to the district of performing such inspect ions may be covered by the program administration funding provided to each district.

Clarifications in Chapter Two

Page II-11. Section E. Obligation. The second bullet reads as follows:

• The Air Pollution Control Officer (APCO) or designa ted district staff, if given the authority by the governing board, approves a contra ct.

ARB would also consider the selection of a project by the APCO or designated staff, if given the authority by the governing board, as obli gated funds.-3-

PART II: PROJECT CRITERIA

How should a district document if there are no dies el retrofits verified (for an off-road project), or if a retrofit is not technica lly feasible (for on-road or off-road projects)? For off-road diesel equipment repowers, an ARB-veri fied diesel emission control strategy is required if one is available. Districts should consult the ARB verification website to

determine if there is a retrofit available. Distri cts should document their determination in the project file. If there is a significant delay between the time the district checked the website and the time funds are obligated to the pro ject, district may opt to re-check the website. If no retrofit is available, districts mu st inform their ARB liaison by e-mail. No ARB approval is necessary to proceed with the proje ct. For both on-road and off-road repower projects, a retrofit is not required if the re is a technical reason the retrofit cannot be installed. If this is the case, the district sh ould document this determination in the project file, and inform their ARB liaison by e-mai l. No ARB approval is necessary to proceed with the project.

Chapter One: Heavy-Duty On-Road Vehicles

What effect does the Public Fleet Rule have on the ability to fund projects in this

sector? The Air Resources Board adopted the Diesel Particul ate Matter Control Measure for OnRoad Heavy-Duty Diesel Vehicles operated by Public Agencies and Utilities at its December 8, 2005 Board Hearing. The rule mandates municipal and utility vehicle owners

reduce diesel PM emissions from their affected vehi cles through the application of Best Available Control Technology on these vehicles by s pecified implementation dates. The Board adopted the proposed regulations with some mo difications. Therefore, a 15-day notice will be forthcoming. Once the regulation is complete, ARB will issue an advisory for funding Carl Moyer Program projects subject to the Public Fleet rule. In the interim,

districts should work with their ARB liaison to det ermine project eligibility.

Clarifications in Chapter One

Page I-14, E. Retrofit . The third bullet reads:

• Retrofit projects that control PM must use the high est level cost-effective technology available for the equipment being retrofitted....

This is a typographical error. The highest level t echnology available must be applied regardless of cost-effectiveness. The Carl Moyer P rogram will only pay for the portion of the project that is cost-effective.

Page I-18, M. Solid Waste Collection Vehicles . The last sentence of the first sub-bullet, under the first bullet, reads:

“The project life for 50 percent of the vehicles is four years and the remaining 50 percent is four years.”-4-

This is a typographical error. The underlined “fou r” should be replaced with “three.”

Clarifications to Appendices Related to Heavy-Duty On-Road Vehicles

Page D-4 . The first bullet reads:

• School bus calculations shall use the MHD or HHD ve hicle emission factor and conversion factors depending on GVWR to calculate c ost-effectiveness.

This is incorrect. School bus calculations shall o nly use the MHD vehicle emission factors and conversion factors when calculating cost-effect iveness.

Chapter Two: Fleet Modernization

Are there different requirements for school buses p articipating in the fleet modernization program? Not at this time. ARB staff is currently working w ith local air districts and other groups to evaluate a fleet modernization program that is spec ifically tailored to the unique operating

characteristics of school buses. If ARB staff dete rmines that a unique program is warranted, a Carl Moyer Program Advisory will be is sued to describe this program.

Clarifications in Chapter Two

Page II-9. VI. Potential Projects. When selecting the appropriate DECS for a given project, the selection must be based on criteria de veloped by the respective district. This procedure contains criteria outlining the methodolo gy/preference for the selection of the highest level of emission reductions.

Page II-11. B. Participant Requirements. Second bullet. The Target Vocation Category includes public fleet vehicles in low-population ar eas as defined in the public fleet regulation adopted by the ARB in December 2005.

Page II-13. C. Replacement Vehicle Requirements. Under “ARB Verified Diesel Emission Control System (DECS),” the district selec tion process is the same as described earlier under “Potential Projects.”

Page II-16. Table 2-2, Minimum Application Require ments for Fleet Modernization . The subcategory titled “New Vehicle Information” is rep laced with “Replacement Vehicle

Information.”

Chapter Three: Reducing Idling Emissions from Heav y-Duty Vehicles

Are APU engines less than 25 horsepower eligible fo r Carl Moyer Program funding?

Yes.-5-

Clarifications in Chapter Three

Page III-3. The second paragraph identifies the baseline for calculating the benefits of truck idle reduction projects beginning with the 20 08 calendar year as 15.1 g/hr NMHC+NOx and 0.087 g/hr of PM. In order to use the se emission rates in calculations,

the fuel correction factor and ROG conversion facto r must be applied. The converted emission rates to use for calculation purposes are: ROG = 0.9 g/hr, NOx = 13.6 g/hr, and PM = 0.070 g/hr.

Page III-6, Section B, APUs and Alternative Technol ogies . These project criteria were not updated to reflect the ARB’s adoption of an idling reduction ATCM in October 2005. Only

the incremental cost and the incremental cost of in stalling an APU that is cleaner than required by the regulation is eligible for funding.

Clarifications to Appendices Related to Reducing Id ling Emissions

Page D-22. Section III, Heavy-Duty Truck Idle Redu ction. This section was not updated to reflect the ARB’s adoption of an idling reduction A TCM in October 2005. The section should be replaced with the attachment to this Advi sory.

Chapter Four: Transport Refrigeration Units

Are TRU engines less than 25 horsepower eligible fo r Carl Moyer Program funding?

Yes.

Chapter Five: Compression-Ignition Off-Road Equipm ent

How does the Carl Moyer Program handle auxiliary en gines? The Carl Moyer Program allows funding for auxiliary engines on mobile equipment that are considered an integral part of the vehicle’s main f unction. ARB regulates these auxiliary engines through the ATCM for Diesel Particulate Mat ter from Portable Engines. This ATCM is applicable to all portable engines having a maximum rated horsepower of 50 bhp and greater and fueled with diesel, except for thos e specifically excluded in Title 17, California Code of Regulations Section 93116.1 (b). These engines are eligible for Carl Moyer Program funding until January 1, 2007 if the engine was registered in ARB’s Portable Engine Registration Program prior to Janua ry 1, 2006.

How will the cargo handling rule affect funding in this category? In December 2005, the Board approved a regulation o n mobile cargo handling equipment at ports and intermodal rail yards. Once the regula tion is complete, ARB will issue an advisory for funding Carl Moyer projects subject to the Cargo Handling rule. Until this advisory is released, district staff should contact their ARB liaison with all questions regarding project eligibility.-6-

Clarifications in Chapter Five

Page V-3, Table 5-2. Footnote (a) reads:

(a) ARB model years, U.S. EPA model years for Tier 1 st art at 1998 for 50=<75 hp and 75=<100 hp, and 1997 for 100=<175 hp.

This footnote should also note that Tier 1 starts a t 1999 for 25 =<50 hp. Footnote (a) should also be added to the Tier 1 model year range for 25=<50 hp.

Clarifications to Appendices Related to Compression -Ignited Off-Road Equipment

Page D-33, Example 2. The default load factor shown in this example is 0.43. The correct

default load factor is 0.65.

Chapter Eight: Locomotives

Page VIII-13. The following bullet is needed for clarification in Section D,

• Only engine remanufacture kit parts (plus installa tion costs) which are integral to

achievement of the U. S. EPA certified emission lev el are eligible for Carl Moyer Program funding. Baseline costs for engine remanuf acture kits shall reflect the typical cost to remanufacture the project engine in a manne r consistent with existing regulatory requirements (i.e., to uncontrolled emission levels for Class III railroads. Class I railroads’ required emission level depends upon the locomotive model year).

Chapter Nine: Marine Vessels

Are electronic monitoring units (EMU) required on m arine vessel projects? Installation of an EMU is not required for Year 8 f unded marine projects. South Coast Air Quality Management District (AQMD) has agreed to co nduct a pilot for year 8 funds that would require EMUs compliant with the minimum speci fications listed in Advisory 06-001 be installed on South Coast AQMD marine projects. ARB will use the information gained from South Coast AQMD's experience procuring EMUs f or Year 8 funded marine projects to update the minimum EMU specifications listed her e with regard to marine projects for Year 9 projects. Please consult Advisory 06-001 fo r more information.

Clarifications in Chapter Nine

Page IX-10. The first complete bullet reads:

• Only marine vessel engines with a United States Coa st Guard Documentation Number or IMO/Lloyd’s Number are eligible for Carl Moyer P rogram funding. This information must be included in the project application.

The U.S. Coast Guard Documentation Number can also be on the vessel, and would be acceptable.-7-

Page IX-10. The following bullet is needed for clarification:

• Marine vessel project criteria and guidelines appl y to marine vessel engines

> 50 horsepower. Refer to the off-road engine projec t criteria and guidelines for marine engines between 25 and 50 horsepower (Table 5-2, pa ge V-3).

Clarifications to Appendices Related to Marine Vess els

Page B-17, Table B-18. 2005 and 2006 model year marine vessel engines be tween 300 and 750 horsepower and cylinder displacement >2.5 l iters per cylinder should use the following emission factors when calculating cost-ef fectiveness: 7.6 g/bhp-hr NOx, 0.82 g/bhp-hr ROG, and 0.274 g/bhp-hr PM.

Chapter Ten: Agricultural Sources

Page X-14, Table 10-4, Minimum Application Informat ion for Stationary and Portable Agricultural Engine Projects . In the section entitled “Equipment Information,” only the “Equipment Type” is required. The section entitled “Electronic Monitoring Unit” should be

deleted.

Chapter Twelve: Zero Emission Technologies

Is ancillary equipment for electrification of agric ultural pumps, such as variable frequency drives and soft start technology, an elig ible expense under the Carl Moyer Program? At the discretion of the district, ancillary equipm ent may be eligible expenses under the Carl Moyer Program if the district determines that the equipment is necessary for the project.

Clarifications in Chapter Twelve

Page XII-7. The first bullet reads:

• The cost-effectiveness limit for electric forklifts is $7,000 per weighted ton of reduced

emissions.

This cost-effectiveness limit was only intended to apply to electric forklifts with a lift capacity between 3,000 and 6,000 pounds. The cost- effectiveness limit for electric forklifts with a lift capacity above 6,000 pounds is $14,300 per weighted ton of reduced emissions.

Clarifications to Appendices Related to Zero-Emissi on Projects

Page D-67. Example 4. This example was not updated to reflect the ARB’s adoption of an idling reduction ATCM in October 2005. Please refe r to the calculation in the attachment to this Advisory for an example of an electric idle reduction project.-8- Attachment

I. Heavy-Duty Truck Idle Reduction

This section provides an example calculation for de termining the cost-effectiveness of surplus emission reductions for heavy-duty truck id ling reducing technology projects.

A. General Criteria for Heavy-Duty Truck Idling Red ucing Technologies

Cost-Effectiveness Calculations

• The incremental cost, up to $5,500, of an auxiliar y power unit (APU) may be funded.

• The incremental installation cost of an APU, inclu ding installation of an hour meter, up to a maximum of $3,400 per electric motor or fuel c ell APU, may be funded.

• The cost of a PM retrofit may be funded provided t he overall project cost effectiveness is under the limit of $14,300

• For these calculations, PM10 refers to combustion PM10.

• The minimum project life is three years.

• Annual hours of equipment operation for determinin g emission reductions must be based only on readings from an installed and fully operational hour meter. A properly functioning hour meter is required to support equip ment activity information included in the application for Carl Moyer Program funding.

• Applicants may claim ROG emission reductions from DECS if hydrocarbon emission reductions for that technology are obtained from th e ARB’s retrofit website at: http://www.arb.ca.gov/diesel/verdev/verdev.htm . For the Carl Moyer Program, ROG emission reductions will be credited at the 25 perc ent, 50 percent, and 85 percent

reduction levels. To calculate emission reductions of ROG for the Carl Moyer Program, applicants should use the percentage reduction of h ydrocarbons from the ARB’s retrofit website to determine the appropriate "level" of emi ssion reductions. For example, a technology that provides a 40 percent emission redu ction of hydrocarbons would be permitted to apply a 25 percent reduction in ROG em issions for determining eligibility and grant amount in the Carl Moyer Program.

• Default maximum project life: Off-road new purchase 10 years Off-road repower 7 years Repower + retrofit 5 years Retrofit 5 years Project life beyond the default maximum may be subm itted with documentation for approval by ARB.-9-

B. Example

Example 1 – Electric APU Project

A HDV truck operator proposes to install an idle re duction system consisting of an electrical plug, inverter/charger and electrical HV AC on a HDV to provide shore power for the truck. The APU operates 1,800 hours/year.

Annual Baseline Idling Hours at truck stop in Calif ornia: 1,800 Idling Power Requirement 2.7 kw = 1.99 hp Idling Substitution Rate: 100% Conversion factor: 1 ton = 907,200g Cost of electrical plug, inverter/charger and elect rical HVAC: $10,000

Installation Cost: $4,000 Capital Cost of Diesel APU $6,000 Installation Cost of Diesel APU $2,000

Incremental Cost $6,000 Amount Requested $6,000

The truck idling emission rates for 2007 are: 191.5 g/hr of NOx, 25.6 g/hr of ROG and 1.5 g/hr of PM ( Table B-9 ).

The APU idling emission factors for 2008 and subseq uent years are: 13.6 g/hr for NOx, 0.9 g/hr and 0.070 g/hr for PM

Formula C-3 : Estimated Annual Emissions by Pollutant (tons/yr) : Truck emissions in 2007 are: NOx = (191.5 g/hr)(1800 hrs/year)/(907,200 g/ton) = 0.38 ton/yr ROG = (25.6 g/hr)(1800 hrs/year)/(907,200 g/ton) = 0.051 ton/yr PM = (1.5 g/hr)(1800 hrs/year)/(907,200 g/ton) = .0 03 ton/yr

Formula C-10:

Annual Surplus Emission Reductions by Pollutant (t ons/yr) Baseline – Reduced (electric idle reduction is the reduced technology so emissions = 0) NOx = 0.38 ton/yr - (0.0 ton/yr) = 0.38 ton/yr ROG = 0.051 ton/yr - (0.0 ton/yr) = 0.051ton/yr PM = 0.003 ton/yr – (0.0 ton/yr) = 0.003 ton/yr

Formula C-2: Annual Weighted Surplus Emission Reduc tions: Annual Weighted Surplus Emissions Reductions in 200 7: (0.38 ton/yr) + (0.051 ton/yr) + (20)(0.003 ton/yr) = 0.461 ton/yr

Formula C-3 : Estimated Annual Emissions by Pollutant (tons/yr) : APU emissions in 2008 are baseline: 13.6 g/hr of NO x, 0.9 g/hr of ROG and 0.07 g/hr of PM NOx = (13.6 g/hr)(1800 hrs/yr)/(907,200 g/ton) = 0 .03 ton/yr ROG = (0.9 g/hr)(1800 hr/yr)/(907,200 g/ton = 0.002 ton/yr PM: = (0.07 g/hr)(1800 hrs/yr)(907,200 g/ton) = 0.0 001 ton/yr-10-

Reduced emissions in 2008 are the APU baseline valu es because the electric idle

reduction has zero emissions.

Formula C-2: Annual Weighted Surplus Emission Reduc tions: Annual Weighted Surplus Emissions Reductions in 200 8 are (0.03 ton/yr) + (.002 ton/yr)) + (20)(0.0001 ton/yr ) = 0.034 ton/yr

2009 is same as 2008

Average over three years is: ((0.461 ton/yr) + (0.034 ton/yr) + (.034 ton/yr))/( 3) = 0.176 tons/yr

Cost and Cost-Effectiveness Calculations

The annualized cost is based on the incremental cos t of the electrification package, the expected life of the project assumed to be 3 years, and the interest rate (4%) used to amortize the project cost over the project life. T he maximum amount that can be funded by the Carl Moyer Program fund is determined as fol lows: CMP Amount Requested: $6,000

Formula C-13 : Capitol Recovery Factor (CRF): CRF = 0.360 ( from Table B-1 )

Formula C-12 : Annualized Cost ($): Annualized Cost (0.360)($6,000)= $2,160/yr Cost-Effectiveness (Based on weighted average emiss ions reduction) ($2,160/year)/(0.176 tons/year)= $12,273/ton

.

If the project starts in 2008:

Annual Weighted Surplus Emissions Reductions in 200 8 are: (0.03 ton/yr) + (.002 ton/yr)) + (20)(0.0001 ton/yr ) = 0.034 ton/yr This is the same for 2009 and 2010 if the project h as a three year life.

So the cost-effectiveness is:

($2,160)/(0.034 tons/year)= $63,529/ton

Amount that would qualify: ($14,300)*(0.034)/(0.361) = $1,3471 Carl Moyer Program Advisory: 06-003

2005 Carl Moyer Program Guidelines – Revised Emissi on Factors for Medium

Heavy-Duty and Large Spark Ignited Equipment

This page updated September 25, 2006

On November 17, 2005, the Air Resources Board (ARB) approved revisions to the Carl Moyer Program Guidelines. The ARB staff issued the approved revised 2005 Guidelines on January 6, 2006. Advisories are subs equently issued as necessary to clarify or modify details within the approved Guide lines.

This advisory corrects errors in the tables describ ing the emission factors for medium heavy-duty engines and large spark ignited (LSI) en gines. This advisory also provides emission factors for LSI engines that are certified to optional standards and for LSI

retrofits.

The following table replaces Table B-4 in Appendix B.

Revised Table B-4 Medium Heavy-Duty Vehicles 14,001-33,000 lbs GVWR NOx, ROG, and PM10 Emission Factors

(g/mile) (a)

Model Year NOx ROG PM10

Pre-1984

1984 – 1986

1987 – 1990

1991 – 1993

1994 – 1997

1998 – 2002

2003

2004 – 2006

2007-2009

2010+ 17.21

16.65

14.60

12.18

10.70

9.77

5.39

5.12

2.79

0.51 0.29

0.29

0.18

0.16

0.10

0.08

0.08

0.08

0.05

0.02 0.792

0.720

0.504

0.288

0.216

0.144

0.216

0.216

0.024

0.024
a - Emission factors were converted using the ultra low-sulfur diesel fuel correction

factors listed in table B-24.2

The following table replaces Table B-14a in Appendi x B.

Revised Table B-14a Emission Factors for Off-Road LSI Engines by Model Year (g/bhp-hr)

Horsepower Fuel Model Year NOx ROG PM10

25 – 49 Gasoline Uncontrolled – pre-2004 8.01 3.81 0.060

Controlled 2001-2006 1.33 0.72 0.060

Controlled 2007-2009 0.89 0.48 0.060

Controlled 2010+ 0.27 0.14 0.060 Alt Fuel Uncontrolled – pre-2004 13.00 0.90 0.060

Controlled 2001-2006 1.95 0.09 0.060

Controlled 2007-2009 1.30 0.06 0.060

Controlled 2010+ 0.39 0.02 0.060

50 – 120 Gasoline Uncontrolled – pre-2004 11.84 2.66 0.060

Controlled 2001-2006 1.78 0.26 0.060

Controlled 2007-2009 1.19 0.18 0.060

Controlled 2010+ 0.36 0.05 0.060 Alt Fuel Uncontrolled – pre-2004 10.51 1.02 0.060

Controlled 2001-2006 1.58 0.11 0.060

Controlled 2007-2009 1.05 0.07 0.060

Controlled 2010+ 0.32 0.02 0.060

>120 Gasoline Uncontrolled – pre-2004 12.94 1.63 0.060

Controlled 2001-2006 1.94 0.16 0.060

Controlled 2007-2009 1.29 0.11 0.060

Controlled 2010+ 0.39 0.03 0.060 Alt Fuel Uncontrolled – pre-2004 10.51 0.90 0.060

Controlled 2001-2006 1.58 0.09 0.060

Controlled 2007-2009 1.05 0.06 0.060

Controlled 2010+ 0.32 0.02 0.0603

The following Table B-14c is added in Appendix B.

Table B-14c Emission Factors for Off-Road LSI Engines Certified to Optional Standards (g/bhp-hr)

Horsepower Fuel Optional

Standard NOx ROG PM10

25-50 Gasoline 1.50 0.67 0.36 0.060

1.00 0.44 0.24 0.060

0.60 0.27 0.14 0.060

0.40 0.18 0.10 0.060

0.20 0.09 0.05 0.060

0.10 0.04 0.02 0.060

Alt Fuel 1.50 0.98 0.05 0.060

1.00 0.65 0.03 0.060

0.60 0.39 0.02 0.060

0.40 0.26 0.01 0.060

0.20 0.13 0.01 0.060

0.10 0.07 0.00 0.060

50-120 Gasoline 1.50 0.89 0.13 0.060

1.00 0.59 0.09 0.060

0.60 0.36 0.05 0.060

0.40 0.24 0.04 0.060

0.20 0.12 0.02 0.060

0.10 0.06 0.01 0.060

Alt Fuel 1.50 0.79 0.05 0.060

1.00 0.53 0.03 0.060

0.60 0.32 0.02 0.060

0.40 0.21 0.01 0.060

0.20 0.11 0.01 0.060

0.10 0.05 0.00 0.060

>120 Gasoline 1.50 0.97 0.08 0.060

1.00 0.65 0.05 0.060

0.60 0.39 0.03 0.060

0.40 0.26 0.02 0.060

0.20 0.13 0.01 0.060

0.10 0.06 0.01 0.060

Alt Fuel 1.50 0.79 0.05 0.060

1.00 0.53 0.03 0.060

0.60 0.32 0.02 0.060

0.40 0.21 0.01 0.060

0.20 0.11 0.01 0.060

0.10 0.05 0.00 0.0604

Calculating Retrofit Emission Reductions.

Manufacturers of LSI retrofit systems may verify to a percent emission reduction or absolute emissions. If a retrofit system is verifi ed to a percent reduction, the emission factors will be that verified percent of the approp riate emissions factors in Table B-14a. If a retrofit system is verified to an absolute emi ssion number, use Table B-14d for the

emission factors.

The following Table B-14d is added in Appendix B.

Table B-14d Emission Factors for Off-Road LSI Engine Retrofits

Verified to Absolute Emission Number

(g/bhp-hr)

Level 3a or 3b any horsepower NOx ROG PM10

Gasoline 3.0 g/bhp-hr 1.78 0.26 0.060

2.5 g/bhp-hr 1.48 0.22 0.060 2.0 g/bhp-hr 1.19 0.18 0.060 1.5 g/bhp-hr 0.89 0.13 0.060 1.0 g/bhp-hr 0.59 0.09 0.060 0.6 g/bhp-hr 0.36 0.05 0.060 0.5 g/bhp-hr 0.30 0.04 0.060

Alt Fuel 3.0 g/bhp-hr 1.58 0.10 0.060

2.5 g/bhp-hr 1.32 0.09 0.060 2.0 g/bhp-hr 1.05 0.07 0.060 1.5 g/bhp-hr 0.79 0.05 0.060 1.0 g/bhp-hr 0.53 0.03 0.060 0.6 g/bhp-hr 0.32 0.02 0.060 0.5 g/bhp-hr 0.26 0.02 0.060-1- Carl Moyer Program Advisory: 06-004

Revised Criteria and Clarifications to School Bus F leet Modernization Projects

2005 Carl Moyer Program Guidelines
This page updated November 30, 2006

On November 17, 2005, the Air Resources Board (ARB) approved revisions to the Carl Moyer Program Guidelines. The ARB staff issued the approved revised 2005 Guidelines on January 6, 2006. Advisories are subsequently is sued as necessary to clarify or modify details within the approved Guidelines.

The Carl Moyer Program fleet modernization project criteria, as presently structured, were developed generically for all heavy-duty vehicles a nd were not specifically designed for school bus projects. ARB staff re-evaluated those criteria to give air districts and school districts more flexibility in funding school bus fl eet modernization projects. This advisory presents the revised project criteria that are to b e used only when evaluating school bus fleet modernization projects. The revised criteria presented in this advisory for school bus fleet modernization projects are intended to supple ment the existing fleet modernization criteria in the 2005 Carl Moyer Guidelines. When e valuating school bus fleet modernization projects, district staff must use the criteria contained in the 2005 Carl Moyer Guidelines, unless specifically superseded by the c riteria in this advisory.

Revised Criteria for School Bus Projects: The following requirements in the 2005 Carl Moyer G uidelines are revised for school bus fleet modernization projects:

Section VII.B.

• Project Life – The current fleet modernization program limits th e project life to 5 years for targeted vocations and 3 years for other vocations. Based on school bus data available to ARB staff, the maximum allowable project life for school buses participating in a fleet modernization program is a s follows:

o Pre-1977 model year (MY) school buses: Five years

o Model year 1977 and newer school buses: Eleven Yea rs

The model years shown above refer to the model year of the old school bus that is being replaced, not the new replacement school b us.

• Eligible Model Years for School Bus – Heavy-duty vehicles model year 1990 and older are eligible to be replaced under the Car l Moyer fleet modernization program. This requirement is waived for school bus fleet modernization projects. Thus, existing school buses of any model year may participate in the fleet modernization program, provided cost-effectiv eness and other specified

criteria are met.-2-

Section VII.C.

• Engine warranty

– The current fleet modernization program requires the applicant to purchase a minimum of a one-year or 10 0,000-mile major component engine warranty for the replacement vehic le. This requirement is waived for school bus fleet modernization projects.

• Electronic monitoring units – The current fleet modernization program requires the replacement vehicle to be equipped wit h an electronic monitoring unit (EMU) to report vehicle miles traveled and the number of miles a vehicle has operated within California and district boundar ies. However, it also has a provision that allows a district to waive the requi rement for installation of an EMU, upon approval of the ARB. For school bus flee t modernization projects, ARB approval is automatically given for districts t o waive the EMU requirement.

Section X.A.

• Maximum award – The current fleet modernization program limits t he maximum funding amount to 80 percent of the cost of a repla cement vehicle when the replacement vehicle is a brand new vehicle and to t he National Automotive Dealership Association (NADA) adjusted loan value w hen the replacement vehicle is a used vehicle. These requirements are waived for school bus fleet modernization projects. Thus, the full cost of the replacement vehicle could be funded, provided the cost-effectiveness criterion i s met.

New Criterion for School Bus Projects: The following is a new requirement applicable only to school buses. This requirement is added to assure that school buses being replaced th rough the Carl Moyer fleet modernization program are actually being used to tr ansport children to and from school. Since the California Highway Patrol (CHP) conducts annual safety certification inspections on school buses, the old school bus must be CHP-saf ety certified in order to be eligible to receive funding. This requirement is consistent wi th the Lower-Emission School Bus Program Guidelines.

Section VII.B.

• California Highway Patrol (CHP) safety certificatio n requirement – All school buses participating in the Carl Moyer fleet modernization program must have a current CHP safety certification as of Decem ber 31, 2005, and at the time funding is awarded to replace the bus (i.e., t he school bus cannot have a lapsed CHP safety certification), and must be curre ntly registered with the Department of Motor Vehicles.

Clarifications of Criteria for School Bus Fleet Mod ernization Projects

What emission factors are to be used for School Bus es? All Carl Moyer school bus projects must use the emi ssion factors for medium heavy-duty vehicles as shown in Table B-4 of the Carl Moyer Pr ogram Advisory 04-003.-3-

What particulate matter (PM) weighting factor is to be used for School Buses? The PM weighting factor to be used for all school b us projects is the 20 times factor allowed in the 2005 Carl Moyer Guidelines.

Can old school buses be sold out of the country ins tead of destroyed? The fleet modernization program has a provision tha t allows a district to request an alternative disposition of the old vehicle.

Sample Calculation

Example – Replacing a 1980 MY School Bus with a New 2007 MY School Bus The replacement school bus will be delivered from t he manufacturer, equipped with a PM trap as standard equipment. The air district does not require installation of an EMU with the replacement school bus.

Baseline Technology Information :

• Baseline technology: 1980 MY school bus

• Emission rates (Table B-4, 2005 Carl Moyer Guideli nes): 17.21 grams/mile (g/mi) oxides of nitrogen (NOx) 0.29 g/mi reactive organic gases (ROG), 0.792 g/mi PM10

• Activity: 13,000 miles/year (mi/yr)

• Percent operated in California: 100 percent

Reduced Technology Information :

• Reduced technology: 2007 MY school bus

• Emission rates (Table B-4, 2005 Carl Moyer Guideli nes): 2.79 g/mi NOx, 0.05 g/mi ROG, 0.024 g/mi PM10

• Cost (quote provided with application): $115,000

Emission Reduction Calculations: Formula C-8, 2005 Carl Moyer Guidelines: Estimated Annual Emissions Based on Mileage Using E mission Factors 1. Annual NOx baseline technology emissions (17.21 g/mi * 13,000 mi)(ton/ 907,200 g) = 0.247 t ons/year (tons/yr)NOx 2. Annual NOx reduced technology emissions (2.79 g/mi * 13,000 mi)(ton/ 907,200 g) = 0.040 ton s/yr NOx 3. Annual ROG baseline technology emissions (0.29 g/mi * 13,000 mi) (ton/ 907,200 g) = 0.0042 tons/yr ROG 4. Annual ROG reduced technology emissions (0.05 g/mi * 13,000 mi)(ton/ 907,200 g) = 0.0007 to ns/yr ROG 5. Annual PM10 baseline technology emissions (0.792 g/mi * 13,000 mi)(ton/ 907,200 g) = 0.0113 tons/yr PM10 6. Annual PM10 reduced technology emissions (0.024 g/mi * 13,000 mi)(ton/ 907,200 g) = 0.0003 tons/yr PM10-4-

Formula C-10, 2005 Carl Moyer Guidelines: Annual Su rplus Emission Reductions by Pollutant (tons/yr) for Repowers and New Purchases:

• NOx Emission Benefits = 0.247 tons/yr - 0.040 to ns/yr = 0.207 tons/yr NOx

• ROG Emission Benefits = 0.0042 tons/yr - 0.0007 t ons/yr = 0.004 tons/yr ROG

• PM10 Emission Benefits = 0.0113 tons/yr - 0.0003 t ons/yr = 0.011 tons/yr PM10

Formula C-2, 2005 Carl Moyer Guidelines: Annual Wei ghted Surplus Emission Reductions 0.207 tons/yr + 0.004 tons/yr + 20(0.011 tons/yr) = 0.431 weighted tons/yr

Annualized Cost Project Life = 11 Years CRF (Table B-1

, 2005 Carl Moyer Guidelines) = 0.114

Formula C-12, 2005 Carl Moyer Guidelines: Annualiz ed Cost $115,000 * 0.114 = $13,110/yr

Cost-Effectiveness Formula C-1: Cost-Effectiveness of Weighted Surplu s Emission Reductions = ($13,110/yr) / (0.431 weighted tons/yr) = $30,418 weighted tons/yr

In this example, the cost-effectiveness is more tha n the threshold of $14,300 per weighted ton of pollutants reduced. This project qualifies for a maximum grant of $54,063 ($14,300/$30,418 x $115,000), which is approximatel y 50% of the new school bus cost.