Technical Support Document for the Revision To the Texas State Implementation Plan (SIP) for the Texas Substitute Program of the Federal Clean Fuel Fleet Program

EPA - Region 6

December 20002 Technical Support Document for the Revision To the Texas State Implementation Plan (SIP) for the Texas Substitute Program of the Federal Clean Fuel Fleet Program

**I. BACKGROUND**

On November 15, 1990, Congress enacted amendments to the 1977 Clean Air Act; Public Law 101-549, 104 Stat. 2399, codified at 42 U.S.C. 7401-7671q. The Clean Fuel Fleet Program (CFFP) is contained in Subchapter II, part C, entitled, "Clean Fuel Vehicles," of Title II of the Clean Air Act, as amended November 15, 1990 (CAA), sections 241 - 250 (42 U.S.C. 7581-7590). Part C was added to the CAA to establish two programs: a clean-fuel vehicle pilot program in the State of California (the California Pilot Test Program) and a Federal CFFP in certain ozone and carbon monoxide (CO) nonattainment areas. Regulations for the Federal CFFP were promulgated on March 1, 1993 (58 FR 11901), and have been codified at 40 CFR sections 88.301-93

- 88.313-93.

The CAA required certain States to adopt and submit to EPA SIP revisions containing a CFFP for nonattainment areas with 1980 populations greater than 250,000 that are classified as severe or worse for ozone, or which have a design value of at least 16.0 ppm for carbon monoxide (CO).

In Texas, the following Consolidated Metropolitan Statistical Areas (CMSA) or Metropolitan Statistical Areas (MSA) designated ozone nonattainment are classified serious and above and required to implement a CFFP. The Houston/Galveston/Brazoria CMSA was

classified as Severe and has as its nonattainment area the counties of Harris, Montgomery, Brazoria, Fort Bend, Waller, Liberty, Chambers, and Galveston. The Dallas/Fort Worth CMSA was classified as Serious and has as its nonattainment area the counties of Dallas, Tarrant, Collins, and Denton. The El Paso MSA was classified as serious and has as its nonattainment area the county of El Paso.

The CAA provides that the States’ CFFP SIP revisions must require fleet operators with 10 or more centrally fueled vehicles or capable of being centrally fueled to include a specified percentage of clean-fuel vehicles in their purchases each year. There are additional specifications in section 246 of the CAA with which the States’ SIP revisions must also comply, including the requirements3 that covered fleet operators must operate the Clean Fuel Vehicles (CFVs) in covered nonattainment areas on a clean alternative fuel,

defined as a fuel on which the vehicle meets EPA’s CFV standards. EPA promulgated emission standards for CFVs in September 1994. (See
40 CFR 88)

The CFFP will introduce lower pollution emitting vehicles, "clean fuel vehicles" (CFV's), into centrally fueled fleets by requiring covered fleet operators to include a percentage of CFV's in their new fleet purchases. The goal of the CFFP is to reduce emissions of non-methane organic gasses (NMOG), oxides of nitrogen (NOx), and CO through the introduction of CFV's into the covered areas. Both NMOG and NOx are precursors of ozone and, in most areas, their

reduction will reduce the concentration of ozone in covered ozone

nonattainment areas. Reductions of vehicular CO emissions will

reduce the concentration of CO in covered CO nonattainment areas.

Congress chose centrally fueled fleets because operators of these fleets have more control over obtaining fuel than the general public. Additionally, the control which operators maintain over their fleets simplifies maintenance and refueling of these vehicles. Finally, because fleet vehicles typically travel more miles on an annual basis than do non-fleet vehicles, they provide greater opportunity to improve air quality on a per vehicle basis.

Section 182(c)(4) of the CAA, 42 U.S.C. 7511a(c)(4), allows States to opt-out of the Federal CFFP by submitting, for EPA approval, a SIP revision consisting of a substitute program resulting in as much or greater long term emissions reductions in ozone producing and toxic air emissions as the Federal CFFP. The EPA may approve such a revision "only if it consists exclusively of provisions other than those required under this Act for the area."

Unless a State chooses to opt-out of the CFFP per section 182(c)(4)(A) of the CAA; section 246 of the CAA, 42 U.S.C. 7586, directs a State containing covered areas to revise its SIP, within 42 months after enactment of the CAA, to establish a CFFP, whereby at least a specified percentage (as discussed in Section F of this document) of all newly acquired vehicles of covered fleets, beginning with model year (MY) 1998 and thereafter, shall be CFV's and such vehicles

shall use the fuel on which the vehicle was certified to be a CFV (or shall use a fuel which will result in even less emissions than the fuel which was used for certification), when operating in the

covered area.4 On May 22, 1997, and April 23, 1998, EPA issued guidance and a direct final rule respectively, allowing a one year delay of the CFFP in those areas that are unable to meet the purchase requirements cited in the CAA. (See 63 FR 20103, April 23, 1998)

**II. REVIEW OF TEXAS CFFP SIP REVISION**

The State of Texas choose to opt-out of the Federal CFFP pursuant to section 182(c)(4) of the CAA in a committal SIP revision submitted to EPA on November 15, 1992. In July 1994, Texas submitted the State’s opt-out program in a SIP revision to EPA and adopted rules to implement the Texas CFF program. The Texas Clean Fuel Fleet SIP was revised based upon State legislative changes and submitted to EPA in a letter dated August 6, 1996. On June 20, 1997, the supporting legislation for the August 6, 1996, submittal was modified and, as a result, the legislative authority in the submittal was no longer in effect. On October 17, 1997, the Region proposed disapproval of the Texas Clean Fuel Fleet SIP due to changes in the State law that altered the current SIP submittal, and because the State had not made a convincing and compelling equivalency

determination with the Federal CFFP. See 62 FR 53997.

The Region received a further SIP revision on August 27, 1998, to Chapter 114 and the State’s plan for implementing a substitute program to opt out of the Federal CFFP. The revision was adopted after reasonable public notice and public hearing as required by sections 110(a)(2) and 110(l) of the CAA and 40 CFR 51.102(f). The State is withdrawing the August 6, 1996, SIP revision. On October 1, 1998, the Region determined the SIP revision met completeness criteria. The State also submitted supplemental

technical clarification information in a letter to the EPA dated November 17, 2000 (Attachemnt A). Texas’ CFF substitute plan is comprised of a State fleet program - the Texas Clean Fleet (TCF) program - supplemented with additional volatile organic compound (VOC) and nitrogen oxide (NOx) emission controls. The additional emission controls are used to make up the shortfall between the TCF and the Federal CFF programs, and are controls beyond those required by the CAA. Details on the calculations for the TCF emission reductions and shortfalls and control measures used to make up the shortfalls, can be found later in this TSD.

The areas affected by this program include the counties of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller. These eight counties comprise the5 Houston/Galveston ozone nonattainment area. The El Paso nonattainment area includes El Paso county. The Dallas/Fort Worth nonattainment area includes the counties of Collin, Dallas, Denton, and Tarrant. The Beaumont/Port Author Nonattainment area includes the counties of Hardin, Jefferson, and Orange. Texas has submitted the El Paso, Dallas/Ft Worth and Houston/Galveston ozone

nonattainment areas into the Texas SIP for the Texas Clean Fleet

Program.

The following is an analysis of the August 27, 1998, Texas SIP revision (with the supplemental technical clarification information submitted November 17, 2000) to identify concerns regarding conformance to the requirements of the Federal CFFP as provided in section 246 of the CAA and appropriate sections of 40 CFR part 88. This analysis will also determine the State’s substitute program emissions reduction equivalency to the Federal CFFP. Texas improved their technical position by work on fleet inventory and modeling the differences between the State and Federal program. By continuing to understand the differences and likeness between each program, the technical approach is enhanced for the equivalency demonstration and the State substitute program will likely withstand challenges.

A. Subchapter A. Definitions. Section 114.3.

Covered Areas

Requirements: Areas (Covered Areas) required to implement a CFFP are defined in section 246(a)(2) of the CAA.

The Proposed Revision: Page 16 of the Revision, 30 TAC Chapter 114, Section 114.3,

“Low Emission Vehicle Fleet Definitions.” The State rule defines covered areas as “affected areas” with a population of 350,000 or more and classified as a serious, severe, or extreme nonattainment area. Texas removed the specific definitions of the Houston/Galveston, Beaumont/Port Arthur, Dallas/Ft Worth and El Paso nonattainment areas. The Federal definition of covered area is with a 1980 population of 250,000 or more classified as a serious, severe, or extreme nonattainment area. The different population numbers could cause confusion and misapplication of the regulation for Beaumont/Port Arthur moderate ozone nonattainment area. However, Texas has acknowledge that if the Beaumont moderate ozone nonattainment area is bumped-up6 to serious, the area would be subject to the State CFF substitution programs.

Conclusion: In EPA's opinion, the Revision has fulfilled the requirements for the establishment of a CFFP in the appropriate Serious and

above nonattainment areas. The Texas CFFP substitute SIP revision has identified the appropriate covered areas as the Houston/Galveston, Dallas/Ft Worth, and El Paso ozone

nonattainment areas.

Continue Subchapter A. Definitions. Sections 114.1 and 114.3.

Requirements: Sections 241(1), (2), (3), (4), (5), (6) and (7) of the CAA, 42 U.S.C. 7511, and 40 CFR 88.302-94 define specific terms that are to be used in the State regulations.

The Proposed Revision: 30 TAC Chapter, Sections 114.1 and 114.3 contains definitions of terms used by Texas in their rule. This Revision has removed some terms from the previous submittal and redefined terms that were consistent with section 241(1), (2), (3), (4), (5), (6) and (7) of the CAA as well as 40 CFR part 88.302-94. The definitions of “Capable of being centrally fueled”, “Centrally fueled”, ”Clean-fuel vehicle”, and “Control” were removed in

this revision. “Affected area” substitutes for “Covered area.” “Affected entity” substitutes for “Covered fleet operator.” The word

“control” is still used in the definition of “Private entity.”

Conclusion: In EPA's opinion, Texas definition of “Fleet Vehicle” in Section

114.3 is not consistent with the CAA and as found in 40 CFR 88.302-94. One hundred percent centrally fueled vehicles or capable of being centrally fuel and parked at a residence are not exempted from the requirements of the Federal CFF program. The fact that one or more vehicles in a fleet is/are not centrally fueled does not exempt the entire fleet from the Federal CFF program. The fact that a vehicle is not centrally fueled does not mean it could not be centrally fueled in accordance with the definition of “capable of being centrally fueled.” The fact that the use of fleet less than 50 percent of the total annual vehicle miles traveled or time in any one7 affected area does not mean it is exempted from the Federal CFF program. Texas’ definitions creates inconsistency with the Federal CFF program by providing different means of determining what vehicles are in the program, ( **control** and **can be centrally**

**fueled** or **capable** as compared to **operates primarily** ) and promoting the exclusion of certain fleet vehicles (school buses), (100% centrally fueled or capable and parked at a individual residence) that are required in the Federal CFF program. The Revision has not fulfilled the requirements that the definitions of appropriate terms in the Revision be

consistent with the CAA and as found in 40 CFR 88.302-94.

C. Covered Fleets

Requirements: Section 241(5) of the CAA defines the vehicles/fleets that must

be in a CFFP.

Revision: Section 114.150 “Requirements for Mass Transit Authorities”

identifies Mass Transit fleets and Section 114.151 “Requirements for Local Government and Private Persons” identifies local governments fleets greater than 15 vehicles, excluding law enforcement and emergency vehicles, and private persons fleets greater than 25 vehicles, excluding emergency vehicles, that are to be included in the Texas CFFP. Mass Transit fleets must ensure that at least 50 percent of their

fleet vehicles are certified. The number of vehicles in a covered fleet for the Texas CFFP, by legislative design, does

not match the number of vehicles in a covered fleet defined in the Federal CFFP set forth in section 241(5) of the CAA. School buses used to transport students are not included in Texas’ definition of a fleet vehicle. Which means they are not a covered fleet, as in the Federal CFF program, in the Houston/Galveston, Dallas/Ft Worth and El Paso nonattainment areas. Texas also excludes fleet vehicles that are “capable of being centrally fueled” by their definition of “operate primarily.” Any motor vehicles that operate less than 50 percent of the total annual vehicle miles traveled or time in any one affected area means those fleet vehicles can be capable of being centrally refueled and should not be excluded as “covered fleet vehicles.” The Texas Clean Fleet program will

reduce the number of fleet vehicles that would have been in the Federal CFF program resulting in less fleet aggregation, thus, less CFV’s purchased.8 Conclusion: In EPA's opinion, Texas corrected the deficiencies in the previous submittal and identified the appropriate Federal Clean Fuel Fleet aggregation in the El Paso, Dallas/Ft Worth, and Houston/Galveston nonattainment areas and compared them to their Texas Clean Fleet program aggregation for the same areas. The Texas Clean Fleet program still

excludes certain covered fleets from their total fleet aggregation in the El Paso, Dallas/Ft Worth, and Houston/Galveston nonattainment areas which causes a shortfall in the number of vehicles as compared to the FCFF program. Texas’s technical approach and equivalency determination method has quantified accurately as possible the covered Federal and State program fleets in the nonattainment areas. The State has done an adequate

determination of fleet vehicle baseline numbers for comparison and the Revision’s technical evaluation is sufficiently comprehensive to determine their program shortfalls. Noted shortfalls and input differences between the programs are modeled by use of Texas’ technical formula spreadsheet.

D. Vehicles Classes Covered

Requirements: Section 242, 42 U.S.C. 7582, Section 243, 42 U.S.C. 7583, and Section 245, 42 U.S.C. 7585 of the CAA and 40 CFR 88 Subpart

C defines the vehicle classes and emission standards covered in the CFFP. In addition, Section 245(a) of the CAA, 42 U.S.C. 7585, exempts heavy-duty vehicles more than 26,000 Gross Vehicle Weight Rating (GVWR) from clean-fuel emission

standards.

Revision:

Section 114.3 “Low Emission Vehicle Fleet Definitions” defines

a “certified” vehicle as a vehicle that has been issued a certificate of conformity by EPA......with the standards as defined in 40 CFR parts 86 and 88. The definition of

“Clean-fueled vehicle” was removed from the revision which identified the class or category of clean fuel vehicles certified to applicable emission standards. In addition, section 114.152. “Use of Certain Vehicles for Compliance” was repealed and the applicable requirements was moved to Section9 114.150 and 114.151. The classes of vehicles included in the

Revision are now identified in the definitions of “Low emission vehicle (LEV)” and “certified.”

Conclusion: In EPA's opinion, the Revision has fulfilled the requirements concerning the vehicle classes which must be in a CFFP.

E. Clean Fuel Vehicles (CFV)

Requirements: Section 241(7) of the CAA, requires a CFV must be defined as

a motor vehicle in one of the vehicle classes that are certified by the EPA to meet, for any MY, one of the three sets of increasingly stringent clean fuel vehicle emission standards that apply to CFV in that vehicle class for that MY. These standards are referred to as Low-emission vehicle (LEV) standards, Inherently low emission vehicles (ILEV) standards, Ultra low-emission vehicle (ULEV) standards, and Zero-emission vehicle (ZEV) standards. The emission standards for these vehicles are found in 40 CFR 88.104-94, 40 CFR 88.105-94, 40 CFR 88.306-94, 40 CFR 88.311-93, and 40 CFR 88.311-98.

Revision: Section 114.1 defines a “Low emission vehicle (LEV)” as a vehicle which has been certified to meet, for any model year, applicable standards under the Federal CAA, Part C, Subchapter II, and a set of emission standards, contained in 40 CFR 88.104-94, 40 CFR 88.105-94, and 40 CFR 88.311-93, that classifies it as a Low Emission Vehicle (LEV), Inherently Low Emission Vehicle (LEV), Ultra Low Emission Vehicle (ULEV), or a Zero Emission Vehicle (ZEV). Section 114.152 “Use of Certain Vehicles for Compliance” was repealed and the applicable requirements was moved to Section 114.150 and 114.151. Section 114.150 “Requirements for Mass Transit Authorities” allows certain vehicles acquired before September 1, 1999, but not certified to CFFP standards, to be counted toward compliance with a fleet implementation schedule for the affected entity’s total fleet while in use by that entity provided these vehicles are capable of operating on any of the following fuels: electricity, ethanol or ethanol/gasoline blends of 85% or greater ethanol, LPG(propane), methanol or methanol/gasoline blends of 85% or greater methanol, or natural gas. Section 114.151 “Requirements for Local Governments and Private Entities” allows certain vehicles acquired before September 1,10 1995, but not certified to CFFP standards, to be counted toward compliance with a fleet implementation schedule for the affected entity’s total fleet while in use by that entity provided these vehicles are capable of operating on any of the following fuels: electricity, ethanol or ethanol/gasoline blends of 85% or greater ethanol, LPG(propane), methanol or methanol/gasoline blends of 85% or greater methanol, or natural gas.

Conclusion: In EPA's opinion, the Revision has fulfilled most but not all of the requirements concerning the emission standards of the CFV's that are to be in a CFFP. A reference to 40 CFR 88.306-94, “Requirements for a converted vehicle to qualify as a clean-fuel vehicle”, is needed in the Texas CFF Program that vehicles acquired prior to September 1, 1999 for Mass Transit authorities, September 1, 1995 for Local Governments and Private Entities, or before SIP approval, and that operates on the fuels identified in Section 114.150 and 114.151, need to be certified per 40 CFR 88.304-94 and 88.306-94 to qualify as a CFFV purchase and to generate credit. The result of this omission in the Texas Clean Fleet program allows vehicles not certified to CFFV standards to be counted for compliance under

the schedule where these vehicles would not under the FCFF

program.

F. Percentage Requirements

Requirements: Section 246(b) of the CAA contains the phase-in requirements that the covered fleets must meet with respect to new acquisitions.

Revision: Section 114.150 contains the CFV proportion (50%) to total covered fleet requirements for Mass Transit Authorities in the Texas CFFP. It is unknown what compliance date is required for

Mass Transit fleets. Since the state program became applicable on September 1 1998, it is assumed the Mass transit fleets must be in compliance by that date. Section 114.151 contains the CFV purchase percentage and proportion requirements for local governments and private entities. Both 114.150 and 114.151 also allow for the conversion of vehicles or the purchase of PCC, MERCs, or Texas Mobile Emission Reduction Credit Fund to11 satisfy the percentage requirements. (See Section G below concerning the Credit Program.) The requirements of Section 114.151 are not identical to section 246(b) of the CAA. Texas has proposed the following schedule for local government and private persons fleet CFV purchase percentage and proportion to total fleet percentage requirements: (1) 30% of fleet vehicles purchased after September 1, 1998, or at least 10% of the fleet vehicles in the total fleet as of September 1, 1998; (2) 50% of the fleet vehicles purchased after September 1, 2000; (3) 70% of the light-duty fleet vehicles purchased after September 1, 2002, and at least 50% of the heavy-duty fleet vehicles purchased as of September 1, 2002. In addition, Section 114.151(c) exempts local governments and private persons from the purchase requirements if 70% or more of their fleet is/are Clean Fuel Vehicles.

Conclusion: In EPA's opinion, the state’s phase-in schedule does not match the Federal phase-in schedule program requirements of new CFV acquisitions that must be in a Federal CFF program. The Federal requirements are: 30% of purchases in MY 1999; 50% of purchases in MY2000; and 70% of purchases in MY2001+. The state program has a two year span between increasing purchase requirements whereas the Federal program has a one year span between increasing purchase requirements. This results in a slower CFF vehicle compliance accumulation for the state program as compared to the Federal program.

G. Credit Program

Requirements: Section 246(f) of the CAA and 40 CFR 88.304-94 requires the State

to implement a credit program. The requirements contain tables which have specified credit values that must be included in a CFFP. A fleet operator can generate credits in any of several ways: (1) by the purchase of more CFV’s than the minimum required by a CFFP, (2) by the purchase of CFV which meet more stringent standards than the minimum required by the CFFP, (3) by the purchase of CFV not required by the CFFP, and (4) by the purchase of CFV before MY 1999. The credits generated may be used by a covered fleet operator to satisfy the purchase requirements of a CFFP or may be traded by one covered fleet operator to another, provided the credits were generated and used in, and both operators are located in, the same12 nonattainment area. Certain restrictions on the trading of the

credits between vehicle classes must be observed. The credits do not depreciate with time and are to be freely traded without interference by the state. Non-covered fleet operators can voluntarily participate in the CFFP.

Revision: Section 114.157 “Low Emission Vehicle Fleet Program Compliance Credits,” Section 114.201 “Mobile Emission Reduction Credit Program” and Section 114.202 “Texas Mobile Emission Reduction Credit Trading Fund” of the Texas CFFP provides for a Credit Program which provides credits for operators who acquire more CFV’s and/or convert more vehicles to CFV's than the Texas CFFP requires in any year; acquires CFV’s and/or converts vehicles to certified CFV’s which meet more stringent emission standards than the Low Emission Vehicle (LEV) standards; acquires CFV’s in exempted vehicle categories and/or converts exempted vehicles to certified CFV’s; or, after EPA approval of the SIP Revision, acquires certified CFV’s and/or converts vehicles to

certified CFV’s prior to MY 1999. The Revision does not contain similar tables showing the credit which will be granted for

CFV’s for the various classes of vehicles for the purchasing/acquisition mandate; credit in lieu of purchase/acquisition; or purchasing/acquiring more vehicles than required; all of which are in the C94 tables, contained in Tables to Subpart C of Part 88.

The Revision restricts credit issue to the nonattainment area in which they are generated. It is unclear if fleets

allowed to use the Texas Mobile Emission Credit Fund are using Mobile Emission Reduction Credits (MERC’s) generated

outside the fleets nonattainment areas.

Section 114.157 “Low Emission Vehicle Fleet Program Compliance Credits” allows Program Compliance Credits (PCC’s) to be awarded and generated by fleets to meet the state program purchase requirements by the following methodology:

(1) LEV - one credit;

(2) ULEV - two credits; and

(3) ILEV and ZEV - three credits.13 PCC’s are awarded according to the estimated remaining useful life of the vehicle (normally five years as per commission guidance). Only fleets that are subject to the Texas Clean Fleet program may be awarded PCC’s. The awarding of PCC’s allows entities to generate more credits and thus fleets are able to comply easier with the state program than what would be possible under the Federal CFF program credit tables. This results in less CFV’s being needed to meet the state’s purchase requirements as compared to the Federal CFF program credit tables.

MERC’s may be used by other fleets and by stationary sources. The Revision does provide a methodology for using the MERC’s for stationary source VOC and NOX emission trades. MERC’s are awarded to individual vehicles, where applicable, as shown in Tables C and D of the TNRCC credit guidance manual. Tables E and F are used to show the number of additional light-duty and heavy-duty LEV purchases required to generate the minimum one ton of VOC or Nox emission reductions per year needed before fleet-to- stationary source MERC trades are allowed. Fleets may request both PCC’s and MERC’s in their compliance report.

Non-road vehicles, though not covered by the Texas Clean Fleet program, may generate MERC’s. Light rail vehicles operated by a mass transit authority may obtain MERC’s. The Federal CFF program does not allow non-road vehicles to

generate MERC’s.

Credit for Non-program Fleets in Nonattainment areas - MERC’s will be an option for any fleet primarily operating in any of the nonattainment areas. PCC’s will be an option only for fleets that are covered by the Texas Clean Fleet program. Fleets in all four nonattainment areas may generate MERC’s regardless of their inclusion in the overall fleet program, however, MERC’s are only tradable within the nonattainment area in which they were generated. Fleets outside of nonattainment areas may generate MERC’s from the purchase of LEV’s. However, these MERC’s cannot be banked. It is unclear if these MERC’s cannot be traded, purchased, or if they are used in the Texas Mobile Emission Reduction Credit Fund. Fleets that are not subject to the Texas Clean Fleet program (less than 16 for local14 governments and less than 26 for private) but that would be subject to the Federal CFF program (10 or more) can generate credits where the Federal program would not. Resulting in less vehicles accumulated in the state program as compared to the Federal CFF program.

The Revision restricts fleet to fleet credit trading or purchasing within LDV and HDV classes only. Trading of credits between vehicle subclasses (LDV and LDT) and (LHDV, MHDV, and HDV) is permitted but no trading in an upward

direction for HDV subclasses.

Section 114.201 “Mobile Emission Reduction Credit Program” participation is voluntary. Section 114.201(k) specifies that the credits will be awarded in two-year increments for the period of 1998 through 2002. After 2002, MERC will be awarded according to the expected remaining useful life of the vehicle (normally five years per TNRCC guidance). The monetary values of the credits are to be established by the market and not set by the administrative authority. Credits may only be traded, sold, banked, for later use by fleet vehicle owners or other mobile or stationary sources of emissions within the same

nonattainment area.

The Revision provides for mandatory registration of affected entities but not voluntary registration of unaffected entities (any other persons). The Revision shows calculation formula of their purchase/acquisition requirements but no examples. Examples are found in the TNRCC guidance manual located at their web-site. In order to apply for a MERC, the affected entity

must submit the certified emission standard of the credit vehicle, the annual VMT traveled by the vehicle, the amount of time in years the vehicle is expected to be in service and a current fleet report per Section 114.150 or 114.155. Upon verification by the TNRCC of the credit registration, a certificate will be awarded to each vehicle indicating, where applicable, the certified air emission standard, the weight class of the vehicle, the amount of emissions reduced per year, the number of years the emission reduction will be credited, and the number of light-duty or heavy-duty vehicle fleet to fleet MERC. A total emissions credit summary sheet will be

issued to the fleet upon issuance of any MERC certificate. MERC

are banked with the TNRCC Mobile Source Division for fleet to fleet trades and with the TNRCC Emissions Bank for trading between fleets and stationary sources.15 Conclusion: In EPA's opinion, the Revision is inconsistence with the requirements concerning the establishment of a similar credit program that must be in a CFF program. The use of PCC’s weakens the equivalency with the Federal CFF program. The Texas Clean Fleet credit generation tables are different from the Federal program and do not generate the same

credits as determined in the Federal credit tables. The awarding of PCC’s allows entities to generate more credits and thus fleets are able to comply easier with the State program than what would be possible under the Federal CFF program credit tables. This results in less CFV’s being needed to meet the state’s purchase requirements as compared to the Federal CFF program credit tables. The use of non- programed fleets and non-road vehicles for credit generation

further lessens the accumulation of CFV’s that would be needed under the Federal CFF program.

H. Exclusions or Exceptions to Compliance.

Requirements: Section 241(5) defines motor vehicles that are not included in the Federal program. Motor vehicles held for lease or rental to the general public, motor vehicles held for sale by motor vehicle dealers (including demonstration vehicles), motor vehicles used for motor vehicle manufacturer product evaluations or tests, law enforcement and other emergency vehicles, or nonroad vehicles (including farm and construction vehicles). In addition, a vehicle which under normal operations is garaged at a personal residence at night shall not be considered to be a vehicle which is capable of being centrally fueled. However, a vehicle parked at a personal residence at night and centrally fueled 100 percent of the time is considered a covered vehicle.

Revision: Sections 114.153 “Exceptions” and 114.154 “Exceptions for Certain Mass Transit Authorities” provide exceptions (or compliance waivers) from the fleet vehicle purchase percentage requirements of the Texas Clean Fleet for up to two years. Exceptions are determined by TNRCC staff based on the following criteria:

(1). A firm engaged in fixed price contracts with public16 works agencies can demonstrate that compliance with the LEV requirements of the Texas Clean Fleet program would result

in substantial economic harm to the firm under a contract entered into before September 1, 1997;

(2). Fuels required for operating LEV vehicles are not

available in the affected areas in which the vehicle

operates;

(3). The fleet is unable to secure financing provided by or arranged through a supplier for the fuels required to operate the LEV vehicles;

(4). The projected net costs of the fueling for conversion or replacement and operation of a LEV is reasonably expected to exceed comparable costs of conventional

vehicles when measured over the useful life of the fleet vehicle. Include cost calculations for any available state or Federal funding or incentives for use of fuels required

to operate LEV’s.

(5). Original equipment manufacturer’s vehicles, or converted vehicles, that have been certified by EPA as LEV’s and meet the normal requirements and practices of the local government or private entity are not available.

Section 114.154 provides exceptions for certain Mass Transit Authorities confirmed at a tax election before July 1, 1985, and in which the principal city has a population of less than 750,000, according to the most recent Federal census. Exceptions are determined by TNRCC staff based on the following criteria:

(1). The authority’s vehicles will be operating primarily in a area in which neither the authority nor the supplier has or can reasonably be expected to establish a central refueling station necessary for the operation of LEV’s.

(2). The authority is unable to acquire or be provided equipment or refueling facilities necessary to operate LEV’s at a projected cost that is reasonable expected to result in no greater net cost than the continued use of equipment or refueling facilities used to operate conventional vehicles, measured over the expected useful life of the equipment or facilities supplied.17 Conclusion: The Texas Clean Fleet program allows generous exceptions to compliance as compared to the Federal CFF program. Realistically, the unavailability of certified CFV’s would apply to all fleets under both state and Federal programs, but the degree of economic harm and the cost for certified vehicles andrefueling infrastructures, and thus the economic burden will vary from fleet owner to fleet owner. This makes it very difficult to determine the unreasonableness of the program requirements. The CAA mandates that the SIP revision require fuel providers to make clean alternative fuel available to the covered fleets and economical from the standpoint of vehicle owners. Section 114.154 allows additional exceptions for Mass Transit Authorities in El Paso and Beaumont/Port Arthur should it become included in the Texas Clean Fleet program upon redesignation or for any future area with a population of less than 750,000 designated to serious nonattainment. The results of these exceptions in the state rule weakens the purchase of CFV’s when compared to the Federal CFF program.

I. Fuel Use

Requirements: Section 246(b) of the CAA and 40 CFR 88.304.93(3) requires that the fuel (or a fuel which will result in even less emissions than the fuel which was used for certification) on which the

vehicle was certified to be a CFV be used 100% of the time the

vehicle is in the covered area. In those cases where covered fleet operators choose to have vehicles with conventional petroleum backup fuel, substantiation of the use of the required fuel in the covered area must be kept as part of the record keeping requirements.

Revision: Section 114.155 “Reporting” requires documentation estimating the percentages of the vehicles’ operational fuel by the measured vehicle miles traveled or time operated on each fuel.

It does not state clearly that dual-fuel/flexible-fuel vehicles are to operate, while in the covered area, on the fuel(s) for which it was certified as a CFV. Reports are submitted biennially by September 1, of each even number year. Section 114.156 “Recordkeeping” requires record retention of a minimum of three years.18 Conclusion: In EPA's opinion, the Revision is not specific on the requirement regarding the certified fuel used by CFV’s in the covered area of a CFFP. The biennially reporting instead of annual reports is less stringent than the Federal CFF program. The state does have guidance documents and report forms available for fleet operators at their Internet web-site.

J. Fuel Availability

Requirements: Section 246(d) of the CAA requires the choice of fuel for the CFV’s will be made by the covered fleet operator. Section 246(e) of the CAA requires the SIP revision shall require fuel providers to make clean alternative fuel available to the

covered fleets.

Revision: The revision does not require fuel providers to make clean alternative fuels available to covered fleet operators.

Conclusion: In EPA's opinion, the Revision has not addressed and fulfilled the requirements concerning fuel availability in the Texas substitute program.

K. Consultation

Requirements: Section 246(a)(4) of the CAA require the SIP revision must be developed in consultation with fleet operators, vehicle manufacturers, fuel producers and distributors of motor vehicle fuel, and other interested parties taking into consideration operational range, specialty uses, vehicle and fuel availability, cost, safety, resale values, and other relevant

factors.

Revision: The State organized public hearings, which met on May 19, 1998 in Austin and Irving. The comment period closed on May 26, 1998. The hearings included oral and written testimony and participants discussed issues relating to the program. The19 hearing dates were published in the Texas Register . Attendance sheets, oral and written comments from the meetings were

submitted with the Revision.

Conclusion: In EPA's opinion, the Revision has fulfilled the requirements concerning consultation in a CFFP.

L. Record keeping and Monitoring

Requirements: No specific Record keeping and monitoring requirements are

found in the section 246 of the CAA or 40 CFR 88.304-94.

The State provides a reasonable process to determine which fleets should report data to the State, consistent with the State's approach to "operate primarily in the affected area.” However, the state’ approach to determine which entities are affected by the state program and compliance with fleet purchases is left to the fleet operators. A private fleet is required to count only fleet vehicles when determining fleet size, regardless of the total number of vehicles in their fleet. Local government fleet operators

must count all vehicles within their fleets that are required to be registered for use on public roads, excluding law enforcement and emergency vehicles, to determine fleet size for registration purposes. The distinction between fleet vehicles and vehicles is only made for registration purposes. For reporting purposes, both private and local government fleets use the definition of “fleet” vehicles to determine their compliance in percentage of fleet vehicle purchases. Potentially covered fleets are required to register within 90 days of meeting the minimum fleet size for local governments and private fleets.

Report forms and samples forms used by fleet operators are provided in the TNRCC Fleet Guidance Manuel. The TNRCC will use the initial registration and biannually reporting to determine compliance. However, no detailed description of how the data will be processed, maintained, updated and used to confirm compliance with unregistered or non-programed fleets.

The Revision: Sections 114.1, 114.3, 114.150, 114.151, 114.153, 114.154,20 114.153-114.157, and 114.201-114.202 were published in the Texas Register on August 14, 1998. Section 115.152 was repealed. Such publication effectively notifies the regulated community of impending regulations. Section 114.151 requires affected fleets to register by September 1, 1998 , and those fleets that become covered after September 1, 1998 , to register with the TNRCC within 90 days of attaining covered fleet status. No clear process for updating the fleet list registration on a timely basis (between the two years) and no clear process to identify non-compliance or unregistered covered fleets.

Section 114.155 requires that certain information be reported to the TNRCC. Most of the information required is included in report forms provided in the Guidance Manual provided on their web-site. Fueling patterns are not included. It is unknown if this information is reported on TNRCC report forms which allows the TNRCC to monitor the performance of the operators.

The SIP Revision does not include copies of report forms used by the covered operators.

Section 114.155 does not give an overview of how the operator is to record data on any TNRCC report forms or how the data will be processed, maintained, updated and used to confirm compliance by covered fleets. An instruction booklet developed by TNRCC, and located on their web-site, is helpful to assist fleet operators in properly using any provided forms.

Currently, TNRCC dedicates six people to organize, define the data bases, and handle the data which emanates from the Texas Clean Fleet program.

No oversight of the data acquisition process was identified.

Conclusion: In EPA's opinion, the Revision has demonstrated reasonable adequacy concerning Record keeping and monitoring in a CFFP. However, no clear process for updating the fleet list registration on a timely basis (between the two years) and no clear process to identify non-compliance or unregistered

covered fleets are in the State rules.21 M. Enforcement

Requirements: The State must be able to adequately enforce the requirements of the regulations adopted for implementation of their CFFP.

The Revision: The Texas Health and Safety Code, Chapter 382, also known as the Texas Clean Air Act (TCAA), provides the commission with broad enforcement powers in Section 382.011. The executive director is charged with the duty to enforce the TCAA, the rules promulgated under the TCAA, and orders of the commission. The enforcement rules of the commission provide for enforcement through administrative proceedings, civil lawsuits, and criminal proceedings. Through administrative proceedings, the commission impose orders to achieve compliance accompanied by penalties of up to $10,000 per day per violation. The commission may also pursue civil legal proceedings through the Office of the Attorney General. Fines of up to $25,000 per day per violation, injunctions, court orders, and cost of litigation can be assessed in a civil action under the TCAA. Criminal enforcement may also be initiated through the Attorney General, with fines up to $300,000 and imprisonment of up to five years with possible penalties. In addition to the general penalty provisions, the rules of the commission require the

denial of marketable credits in certain situations. Violations of the state’s substitute program rules may also

result in the denial of credits. Enforcement of the emission standards and fleet implementation schedule requirements will be done through financial penalties and/or credit denial. Compliance with the fleet implementation schedule’s purchase and proportion percentage requirements will be monitored through reporting. Entities affected must report compliance with these requirements. Inadequate reporting, fraud, abuse or other findings will be liable for the full range of enforcement actions and penalties discussed previously.

In addition, the TNRCC has authority to issue cease and desist orders when it deems the public health or the environment is in danger of being damaged.

Conclusion: In EPA's opinion, the Revision has fulfilled statuary requirements concerning enforcement in a CFF program. However, the program will need to continue to survey,22 register, track and conduct random inspections to maintain the integrity of the Texas Clean Fleet program.

N. TCM Exemptions

Requirements: 40 CFR 88.307-94 requires States to exempt any CFV, required by law to participate in a CFFP, from temporal-based (e.g., time-of-day or day-of-week) transportation control measures (TCM) existing for air quality reasons so long as the exemption does not create a clear and direct safety hazard. In the case of high occupancy vehicle lanes, this exemption only applies to CFV that are certified to be ILEV's pursuant to 40 CFR

88.313-93.

The Revision: The Revision does not address or contain any temporal TCM exemptions for CFV’s in the Texas Clean Fleet program.

Conclusion: In EPA's opinion, the Revision is required to address the issue of TCM exemptions since the covered area is required to have mandatory TCM measures. This makes the State program more stringent than the Federal program. The Revisions has not fulfilled the requirements pursuant to 40 CFR 88.313-93.

**III. TECHNICAL ANALYSIS**

**TCF Program vs. Federal CFF Program:**

Modeling of the federal CFF program and the TCF program was performed using a spreadsheet model developed by the TNRCC’s Mobile Source Section. The spreadsheet model estimates the number of low emission vehicles and conventional vehicles in each program and extrapolates the amount of emission reductions generated by each program through the number of LEV’s purchased.

Estimates of the number of LEV’s purchased each year for the TCF program and the federal CFF program were calculated by modeling the different LEV purchase requirements of each program. For both programs, fleet size, base vehicle population, growth rate, turnover rate, centrally refueled rate, waiver rate, and program effectiveness were modeled. The TCF program also included a23 grandfathering rate. Using the modeling parameters, the spreadsheet estimated the covered fleet population for each year. The estimated LEV population for each year was obtained by multiplying the covered vehicle population by each program’s required new purchased percentages. The state’s detailed analysis of the calculation methods are contained in the August 27, 1998, SIP revision section B.2, and the supplemental technical clarification information submitted November 17, 2000. The estimated emission reductions attributed to each program were determined by multiplying the estimated number of LEV’s purchased each year by an emission reduction factor. The emission reductions factors were generated by TNRCC using EPA’s MOBILE 5a emissions model. EPA NOTE: The emission reduction factors generated by TNRCC are conservative and are modeled using TNRCC’s unique inputs to Mobile 5a. The EPA will accept the state’s emission reduction factors because other factor differences resulted in very small differences in the final total tonnage reduced.

The following is the base LDV and HDV vehicle population for each

of the nonattainment areas.

**Table 1. Base Vehicle Population**

**Affected area** TCF Program Federal CFF Program

LDV HDV LDV HDV

Houston/Galveston 35,706 3,105 50,121 4,957

El Paso 2,481 103 4,682 299

Dallas/Ft Worth 29,105 2,191 41,978 3,160

**TOTAL** 67,292 5,399 96,781 8,416

The following is the input base vehicle population and VOC and NOX emission reductions (output) calculated by TNRCC for Hou/Gal, El Paso, and D/FW non-attainment areas:24 **1998 - 2007 total Table 2. Base vehicle Population Tonnage Reductions** 

LDV HDV VOC NOx

TCF Program 67,292 5,399 928 822

Federal CFF

Program 96,781 8,416 1,876 1,671

The above table shows the TCF program has a shortfall in VOC and NOx emissions as compared to the federal CFF program. The shortfalls between the TCF and Federal CFF programs for VOC and NOx are 948 and 849 tons, respectively, over the 1998 to 2007 ten year period.

The turnover rate and the centrally refueled rates used to arrive at the above tonnage reductions are not the same as in the States’s backup data for the August 27, 1998, SIP revision section B.2. The respective rates used are per the technical clarification information supplemental dated November 17, 2000. The turnover rate input was changed from three years to four and the centrally refueled rates of 100 percent and 69 percent for the state and federal programs, respectively, were changed to 80 percent for both programs. The reason for these changes are: (1) Owners of LDV’s are keeping them longer due to the high expense and reliability of the vehicle and longer financing time periods. The average time a LDV owner keeps their vehicle has grown over the years. A longer turnover rate of four years would also be more realistic and supportive of the modeled 250 ozone day input calculation and the 100,000 miles lifetime emission standards used in the state’s methodology. EPA

NOTE: The emission reduction differences between the three or four year turnover rates are small. However, EPA thinks it is best to use practicable input values that attempt to show realistic results in the spreadsheet model. (2) The 100 percent centrally refueled rate used as an input value in the state program spreadsheet is not a valid assumption. The state failed to consider fleets that have fleet vehicles not operating primarily (less than 50%) in the affected area, or fleet vehicles that met an exemption from the state program. (3) The derived surveyed input value for the centrally refueled rate of 69 percent for the federal CFF program did not include the portion of the surveyed fleet that **could be** centrally refueled. The 69 percent is the percent number of fleets surveyed

that **can or could** refuel all of their fleet vehicles all of the time in the nonattainment area. The remaining fleets surveyed have a portion of their fleet not capable of 100 percent centralized25 refueling and a portion that **is or could** be capable of 100 percent centralized refueling all of the time. That portion of the fleets surveyed that **is or could be** 100 percent centralized refueled all

of the time was left out of the calculation that derived the 69 percent. A better way to calculate the surveyed percentage results of the fleet population is by using a weighted average (mean) methodology.

The state did a fleet survey in March of 1998 by contacting fleet owners and managers and asking questions regarding their fueling capabilities as identified in the survey questionnaire. The state surveyed medium size (>10 but <26) fleets were 70 out of 124 registered and large size (>25) fleets were 175 out of 340 registered. Their survey calculations showed a central refueling rate of 67 percent for the medium fleet and 70.2 percent for the large fleet with a combined average for medium and large fleets of 69 percent.

Region 6 obtained a copy of the survey and calculated the following results. Medium size fleets surveyed showed a weighted mean of 74.5 percent and large size fleets showed a weighted mean of 74.9 percent. The survey results show a central refueling rate of approximately 75 percent for both medium and large fleets. The 75 percentage rate

includes the surveyed fleet population that is not affected by each program. To accurately reflect the centralized refueling rate of the affected fleet population, the unaffected fleets count are removed from the calculations which produces a 85.7 percent centralize refueling rate for fleets greater than 10 and less than 26, and a 87.5 percent centralize refueling rate for fleets larger than 25. The final results using the survey shows an approximate centralize refueling rate of 87 percent for both medium and large fleets. To account for fleets not surveyed, this office used an 80 percent centralize refueling rate as an input value for approximating both affected fleets in the TNRCC spreadsheet tables instead of the 100 percent centralized refueling rate input value used for the TCF program and the 69 percent centralized refueling rate used for the federal CFF program.

The TNRCC agreed with the above discussions, and their technical clarification information supplemental dated November 17, 2000, reflects those changes.

As discussed earlier, the State’s CFF Substitute Plan is composed of the TCF program and additional VOC and NOx emissions reductions

as needed so that the State’s CFF Substitute Plan in total will meet the Federal CFF requirement for VOC and NOx emissions reductions.26 **Shortfall Reconciliation:**

Originally, Texas submitted into the SIP anticipated emission reductions from the National Low Emission Vehicle (NLEV) program to make up shortfalls in the equivalency determination. Unfortunately, the state cannot substitute the anticipated emission

reductions of the NLEV program for their TCF program shortfalls. The NLEV program is not an appropriate substitute program for the state because the NLEV program does not require a SIP revision by Texas to achieve the intended reductions in air pollution. Under the NLEV regulations the Northeast states, in effect, accept NLEV through a

SIP commitment. States outside the Northeast do not need to make such a SIP revision. Since Section 182(c)(4)(B) of the CAA requires the CFF program substitute to be contained in a SIP revision, Texas cannot rely on NLEV, a national program which will be implemented in Texas without any SIP action by the state, to make up the shortfalls in their State CFF Substitute Plan between the TCF program and the Federal CFF program. The following paragraphs detail how the shortfall is made up, as discussed in the State’s supplemental technical clarification information submitted November 17, 2000.

For the shortfall of VOC emissions the State is using the emission reductions achieved through the state requirements codified in 30 TAC Sections 115.352-115.359, regarding Fugitive Emission Control in Petroleum Refining, Natural Gas/Gasoline Processing, and

Petrochemical Processes in Ozone Nonattainment Areas. The state requirements codified in 30 TAC Section 115.211(a)(1), regarding Volatile Organic Compound Transfer Operations at Gasoline Terminals,

will also be used to offset shortfalls in emission reductions from the state program. The emission reductions from these rules are identified in the state’s 15 percent Rate of Progress Plan and go above the requirements of VOC RACT. These rules are for VOC emission

reductions.

The following table shows the estimated VOC emission reductions from controls on fugitive emission and VOC transfer operations in the Houston/Galveston, Dallas/Ft Worth and El Paso nonattainment areas.27 **Table 3. VOC Reductions from Fugitive Emissions and VOC Transfer Operations**  **(Estimated for**  **Houston-Galveston, El**  **Paso and Dallas-Fort**  **Worth)**

**Year Houston-Galveston El Paso**  **Dallas-Fort Worth**

**Fugitive**

**VOC Tons/Day**  **Bulk Gas**

**VOC Tons/Day**  **Fugitive**

**VOC Tons/Day**  **Bulk Gas**

**VOC Tons/Day**  **Fugitive**

**VOC Tons/Day**  **Bulk Gas**

**VOC Tons/Day** 

1998 46.03 3.36 1.13 0.77 0.07 2.17

1999 46.03 3.36 1.13 0.77 0.07 2.17

2000 46.03 3.36 1.13 0.77 0.07 2.17

2001 46.03 3.36 1.13 0.77 0.07 2.17

2002 46.03 3.36 1.13 0.77 0.07 2.17

2003 46.03 3.36 1.13 0.77 0.07 2.17

2004 46.03 3.36 1.13 0.77 0.07 2.17

2005 46.03 3.36 1.13 0.77 0.07 2.17

2006 46.03 3.36 1.13 0.77 0.07 2.17

2007 46.03 3.36 1.13 0.77 0.07 2.17

Totals = 460.3 33.6 11.3 7.7 0.7 21.7

Total Combined Reduction(TCR)in

Tons per Day = **493.9 19**  **22.4**

Total Tons of VOCs

Reduced from 1998 to

2007 = (TCR x 250 day Ozone Year) **123,475.00 4,750.00**  **5,600.00**

The State has identified excess NOx emission reductions resulting from state mandated NOx reduction requirements placed on electric generating facilities (EGFs) by the 76th Texas Legislature in Senate Bill 7 for the HGA and DFW nonattainment areas. These requirements are found in 30 TAC, Chapter 101, Subchapter H, Emissions Banking and Trading, Division 1, Utility Electric Generation and Division 2, Emissions Banking and Trading of Allowances. The State estimates, and the EPA concurs, that these reductions combined with other state mandated reductions will result in a 184 tpd reduction from EGFs in the eight-county HGA area. For the DFW area, electric utilities reductions of NOx emissions are estimated at 129 tpd.

Table 4 summarizes the NOx emissions reductions.28 **Table 4. Estimated NOx Emissions Reductions**

Nonattainment Area Tons/Day 1998-2007

Total Tons

Houston-Galveston 184 460,000

Dallas/Fort Worth 129 322,500

The following table shows EPA’s estimated VOC and NOx emission reductions using the TNRCC spreadsheet model for the HGA, DFW and

El Paso nonattainment areas.

**Table 5. Estimated Tons Reductions for 1998-2007**

VOC NOx

Federal LDV HDV **Total** LDV HDV **Total**

Hou/Gal 683 329 **1012** 585 319 **904**

El Paso 64 20 **84** 55 19 **74**

D/FW 571 209 **780** 490 203 **693**

**Total** 1318 558 **1876** 1130 541 **1671**

VOC NOx

State LDV HDV **Total** LDV HDV **Total**

Hou/Gal 365 138 **503** 313 134 **447**

El Paso 25 5 **30** 22 4 **26**

D/FW 298 97 **395** 255 94 **349**

**Total** 688 240 **928** 590 232 **822**

Comparing the estimated emission reductions in Tables 3 and 4 with Table 5 shows state controls on fugitive emission and VOC transfer operations make up the shortfall of VOC emissions reduction from the state’s Clean Fleet program. State controls for NOx emissions in the Houston/Galveston and Dallas/Ft Worth nonattainment areas make up the shortfall for NOx in those areas. The El Paso nonattainment area has a NOx waiver in place, so the state program can make up the combined VOC and NOx shortfall from the VOC controls on fugitive emissions and VOC transfer operations in the El Paso area.29 **IV. Conclusions**

The EPA has reviewed the Revision by the State of Texas for implementation of a substitute CFF program. EPA’s responsibility is to express an opinion on the submittal based on current Federal CAA requirements, EPA regulations and guidance. EPA conducted its

review to obtain reasonable assurance that the program submittal does not produce misapplications of the law and is free of material

misstatements. EPA also evaluated the overall effectiveness of the program. EPA believes that its evaluation provides a reasonable basis for its opinion.

In EPA’s opinion, the substitute CFF program (comprised of the TCF program, supplemented with additional VOC and NOx emission controls for mitigation of TCF program emissions shortfalls) as submitted by

Texas is sufficient to meet both the VOC and NOx emission reduction components of ozone producing pollutants of the federal CFF program. Due to the state’s Clean Fleet program departure from many of the federal requirements as noted in this technical support document, the program by itself is not sufficiently comprehensive of the requirements of Sections 110 and 246 of the Act and appropriate sections of 40 CFR part 88 to alone substitute for the Federal CFF program. However, in combination with the above RACT VOC fugitive controls rules and VOC transfer operations rules, and with the specified NOx reductions beyond federal requirements to cover the federal CFF program NOx reductions shortfall, the state substitute program does demonstrate equivalency or better long term reductions in ozone producing and toxic air pollutants than the Federal CFF

program.

**V. Recommendations**

The Regional office recommends approval of the state’s substitute CFF program for the Federal CFF program.

## APPENDIX A

**State Supplemental Technical Clarification**

**Information Letter Dated November 17, 2000** NOTE TO READER: The February 7, 2001 (66 FR 9203) di rect final rule Federal Regi ster approving the Texas clean fuel fleet substitution program and this technical support document for the February 7, 2001 Federal Register action cite a November 17, 2000, letter from the Texas Natural Resource Conservation Commission (TNRCC) to EPA with additional technical information clarifying "how the State would make up the shortfall for nitrogen oxide (NOx) and volatile organic compound (VOC) emissions between the State’s present (August 27, 1998) CFF program and the Federal CFF program." The November 17, 2000, le tter was not found in EPA files. However, the November 21, 2000, letter on the following five pages is probably the le tter referred to. Also, the November 21, 2000, letter is in EPA f iles with this technical support document.Robert J. Huston, Chairman

R. B. "Ralph" Marquez, Commissioner

John M. Baker, Commissioner

Jeffrey A. Saitas, Executive Director



### TEXAS NATURAL RESOURCE CONSERVATION COMMISSION

Protecting Texas by Reducing and Preventing Pollution

Mr. Gregg A Cooke Regional Administrator, Region 6

U.S. Environmental Protection Agency

1445 Ross Avenue, Suite 1200 Dallas, Texas 75202-2733

Dear Mr. Cooke: November 21, 2000

N

_ _j

This letter provides the supplemental data relating to the Texas Clean Fleet (TCF) program equivalency determination that was requested by the U.S. Environmental Protection Agency (EPA)

in a letter from Mr. Thomas Diggs dated October 19, 2000. EPA requested the Texas Natural

Resource Conservation Commission to provide a letter oftechnical supplement to the State's August 19, 1998 submittal titled "Revisions to Chapter 114 and to the State Implementation Plan."

Specifically, EPA requested:

• Tables showing the State's final emissions values for volatile organic compounds (VOC) and

oxides of nitrogen (NOx) from the TCF program and comparing any emission shortfalls that

exist between TCF and Federal Clean Fuel Fleet programs.

• Quantification of VOC controls above Reasonably Available Control Technology to
demonstrate substitute programs to make up the VOC shortfalls.

• Quantification ofNOx controls above federal required programs to demonstrate substitute

programs to make up the NOx shortfalls.

• Revised final spreadsheets for both VOC and NOx emissions reflecting the changes in

turnover years (4 years versus 3) and centrally fueled percentages (80 percent for both

programs versus I 00 percent

- state and 69 percent

- federal).

Enclosed with this letter are two revised tables: Table I for VOC and Table 2 for NOx that outline

the emission shortfalls for both VOC and NOx, using the revised turnover rate and centrally fueled

percentages as requested in the EPA letter. The estimated emission shortfalls for the TCF program for the 1998-2007 ten-year period are 947.9 total tons or 0.38 tons per day (tpd) for VOC and 848.2

total tons or 0.34 tpd for NOx.

11 3087 • 512/239 1000 • Internet address: www.tnrcc.state.tx.us P.O. Box 13087 • Austin, Texas 787 · · printn! on recycled paper usmg soy-based ink .. 

## -**----~**Mr. Gregg A. Cooke Page2

November 

### 21, 2000

The State identified additional VOC emission reductions from VOC controls on fugitive emissions

and VOC transfer operations in the August 19, 1998 SIP submittal. These are provided in Table 3

included with this letter. A portion of the additional emission reduction from these VOC control strategies was identified as an offset for the VOC shortfalls in the Dallas/Fort Worth (DFW) and

Houston/Galveston (HGA) nonattainrnent areas. The additional VOC emission reductions are also

identified to offset the combined VOC and NOx shortfall for the El Paso (EP) nonattainrnent area since EP has a NOx waiver in place.

The State has identified excess NOx emission reductions resulting from state mandated NOx

reduction requirements placed on electric generating facilities (EGFs) by the 76'h Texas Legislature

in Senate Bill 7 for the HGA and DFW nonattainment areas. These requirements are found in 30 TAC, Chapter 101, Subchapter H, Emissions Banking and Trading, Division I, Utility Electric

Generation and Division 2, Emissions Banking and Trading of Allowances. These reductions

combined with other state mandated reductions call for a 184 tpd reduction from EGFs in the eightcounty HGA area. For the DFW area, electric utilities were required to reduce NOx emissions by

129 tpd. Both of these reduction measures go beyond federally required controls for NOx in these

areas and more than make up for any short fall in the state's opt-out Clean Fuel Fleet Program.

If there are any questions relating to this information, please contact Ms. Hazel Barbour on my staff

at (512) 239-1439 or by e-mail at hbarbour@tnrcc.state.tx.us.

Sincerely,

### L--t1"f'f~;"b;~~;;as~, P.E., Executive Director

atural Resource Conservation Commission

EnclosuresTablel.TexasCleanFleetandFederalCleanFuelFleetProgramComparisons-VOCOctober25,2000TotalCombinedEmissionReductionOutputPage-ConfiguredforRealTimeLEVParametersNon-AttainmentArea:AllPvt&LciGovVOCReductionsHDV0BaseLEVPopulation=67,2925,399BaseFleetVehiclePopulation=96,7818,416GrowthRate(%)=2.22.2GrowthRate(%)=2.22.2TurnoverRateinYears=410.5TurnoverRateinYears=410.5CentrallyRefueled(%)=8080CentrallyRefueled(%)=8080AverageWaiverRate(%)=3030AverageWaiverRate(%)=1010GrandfatheringRate(%)=101ProgramEffectiveness(%)=8080ProgramEffectiveness(%)=80·soEmissionReductionVariablesEmissionReductionVariablesmissionReductionFactor(g/mlle)=0.140.98EmissionReductionFactor(g/mlle)=0.140.98VMT(miles/day)=100144VMT(miles/day)=100144DaysIOzoneYear=250250DaysIOzoneYear=250250StateLEVPopulationcalculatedwiththefollowingpurchaseschedule:YearLDVRate(%)HDVRate(%)9/1/983030n1998009/1/005050199930509/1/02+70502000505020017050StateProgramReductionOutputLDVHDVYears:TONS/DAYTONS/DAYYears:TONS/DAYTONS/DAY19980.0010.00019980.0100.00619990.0030.00119990.0700.03920000.0330.01220000.2020.08420010.1060.03720010.3860.13420020.1920.06420020.5750.18720030.3160.09620030.7180.24220040.4300.13220040.7930.29820050.5050.16920050.8210.35520060.5690.20620060.8390.41420070.5960.24420070.8570.473-0.275--,r0.096AverageReductionperDay:-AverageReductionperDay:CombinedAverageReduction=I0.371ITons/DayCombinedAverageReduction=TotalTonsReduced(1998-2007)=I927.95ITID•OzoneYr.TotalTonsReducedTable2.TexasCleanFleetandFederalCleanFuelFleetProgramComparisons-NOxOctober25,2000TotalCombinedEmissionReductionOutputPage-ConfiguredforRealTimeLEVParametersNon-AttainmentArea:AllPvt&LciGovBaseFleetVehiclePopulation=GrowthRate(%)=TurnoverRateInYears=CentrallyRefueled(%)=AverageWaiverRate(%)=esLDV067,2922.248030GrandfatheringRate(%)=10ProgramEffectiveness(%)=80EmissionReductionVariablesmissionReductionFactor(g/mlle)=0.12VMT(miles/day)=100DaysIOzoneYear=250StateLEVPopulationcalculatedwiththefollowingpurchaseschedule:YearLDVRate(%)9/1/98309/1/00509/1/02+70StateProgramReductionOutputLDVYears:1998199920002001200220032004200520062007AverageReductionperDay:CombinedAverageReduction=TotalTonsReduced(1998-2007)=TONS/DAY0.0010.0030.0280.0900.1640.2710.3690.4330.4880.5110.236HDV05,3992.210.580301800.95144250HDVRate(%)305050HDVTONS/DAY0.0000.0010.0110.0360.0620.0930.1280.1630.2000.2370.093TID•OzoneYr.BaseLEVPopulation=BaseFleetVehiclePopulation=GrowthRate(%)=TurnoverRateInYears=CentrallyRefueled(%)=AverageWaiverRate(%)=096,7812.248010ProgramEffectiveness(%)=80EmissionReductionVariablesEmissionReductionFactor(g/mlle)=0.12VMT(miles/day)=DaysIOzoneYear=1998199920002001Years:1998199920002001200220032004200520062007AverageReductionperDay:CombinedAverageReduction=TotalTonsReduced0305070TONS/DAY0.0080.0600.1730.3310.4930.6150.6800.7040.7190.73508,4162.210.58010800.951442500505050TONS/DAY0.0060.0380.0810.130..0.1820.2350.2890.3440.4010.459Table 3. VOC Reductions from Fugitive Emissions and VOC Transfer Operations (Estimated for Houston-Galveston, El Paso and Dallas-Fort Worth)

Houston-Galveston El Paso Dallas-Fort Worth

Year Fugitive Bulk Gas Fugitive Bulk Gas Fugitive Bulk Gas



# voc voc voc voc voc voc Tons/Day Tons/Day Tons/Day Tons/Day Tons/Day Tons/Day

1998 46.03 3.36 1.13 0.77 0,07 2.17

1999 46.03 3.36 1.13 0.77 0.07 2.17

2000 46.03 3.36 1.13 0.77 0,07 2.17

2001 46.03 3.36 1.13 0.77 0.07 2.17

2002 46.03 3.36 1.13 0.77 0.07 2.17

2003 46.03 3.36 1.13 0.77 0,07 2.17

2004 46.03 3.36 1.13 0.77 0,07 2.17

2005 46.03 3.36 1.13 0.77 0,07 2.17

2006 46.03 3.36 1.13 0.77 

### O.o7 2.17

2007 46.03 3.36 Ll3 0.77 0,07 2.17

Accumulated Totals= 460.3 33.6 11.3 7.7 0.7 21.7

Total Combined Reduction 493.9 19 22.4

(TCR) 

### in Tons per Dav = Total Tons ofVOCs

Reduced from

1998- 2007 

## = 123,475.00 4,750.00 5,600.00

tTCR x 250 dav Ozone Y earl