San Joaquin Valley Unified Air Pollution Control District 

# 2013 Annual Demonstration Report

SIP

- Creditability of Emission Reductions Generated thro ugh Incentive ProgramsSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs Contents

Executive Summary .................................

................................................... .................... 4

I. Background ........................................

................................................... ................. 5

II. Annual Demonstration Report Elements ..............

.................................................. 7

III. Incentive Program Guidelines ......................

................................................... ....... 9

A. District Administered Incentive Programs ......

................................................... ...... 9

B. SIP-Creditable Incentive Program Guidelines ...

................................................... .. 9

C. ARB Carl Moyer Memorial Air Quality Standards A ttainment Program Guidelines13

D. ARB Proposition 1B: Goods Movement Emission Red uction Program Guidelines17

E. USDA NRCS Combustion Systems Improvement of Mob ile Engines Incentive Program Guidelines ................................

................................................... .......... 19

IV. Relevant SIP commitments ..........................

................................................... ..... 23

A. SIP Commitments ...............................

................................................... .............. 23

B. Progress/Achievement of SIP Commitments ....... ................................................ 25

C. SIP Commitment Shortfalls .....................

................................................... .......... 26

V. Monitoring and Enforcement Activities .............

................................................... . 27

A. Carl Moyer Program Specific Monitoring and Enfo rcement Activities ................... 28

B. Proposition 1B Program Monitoring and Enforcemen t Activities ........................... 30

C. Combustion Systems Improvement of Mobile Engine s Program Monitoring and

Enforcement Activities ............................

................................................... .......... 30

VI. Incentive Program Evaluation ......................

................................................... ..... 31

VII. Summary Of Emission Reductions And Cost Effectivene ss ................................ 35

Appendix A District Incentive Program Project Info rmation .........................................A- 1

Appendix B NRCS Combustion System Improvement Prog ram Project Information ..B-1

2013 Annual Demonstration Report Data Sheet (elec tronic attachment)San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs EXECUTIVE SUMMARY

The San Joaquin Valley Unified Air Pollution Contro l District (District) currently operates one of the largest and most well-respected incentiv e programs in California. Since 1992, the District’s incentive programs have provided ove r $500 million in incentive funds. This has been matched by cost-sharing on the part of par ticipating businesses, public agencies, and residents, who together have invested over $400 million. These combined efforts accelerate the adoption of cleaner technolo gies (beyond what is achieved by stringent regulations alone) to achieve over 100,00 0 tons of lifetime emission reductions, improve air quality, improve public health, and pro gress the San Joaquin Valley (Valley) towards attainment of increasingly stringent federa l air quality standards. In addition to District-administered incentive programs, the Calif ornia Air Resources Board (ARB) and the United States Department of Agriculture (USDA) Natural Resources Conservation Service (NRCS) also implement highly effective ince ntive programs in the Valley, further reducing emissions in the Valley.

Although incentive programs result in real air qual ity benefits, the emission reductions resulting from voluntary incentive programs have ge nerally not been quantified for or provided credit in attainment plans to meet federal Clean Air Act (CAA) requirements. District Rule 9610 (State Implementation Plan Credi t for Emission Reductions Generated through Incentive Programs) serves as an administra tive mechanism for crediting emission reductions achieved in the Valley through incentive programs for use in state implementation plans (SIPs). The future year emiss ion reductions claimed in District SIPs through Rule 9610 are to be quantified through annu al demonstration reports, such as this 2013 Annual Demonstration Report.

The emission reductions quantified for SIP credit a s part of this report are summarized in

the table below. Extensive documentation of these reductions, related SIP commitments, and other Rule 9610 requirements are included in th e remainder of this report and in supporting data provided in the 2013 Annual Demonst ration Report Data Sheet that accompanies this report. The emission reductions c laimed for SIP credit are accounted

for in Table 1 below and include reductions of oxid es of nitrogen (NOx), particulate matter (PM), and reactive organic gases (ROG).

Table 1: SIP Claimed Incentive-Based Emission Redu ctions for Future Years

Pollutant Emissions Reduced (tons per day)

2013 2014 2015 2016 2017 2018 2019 2020

NOx 15.59 12.85 10.90 9.31 6.92 6.68 5.60 3.64

PM 0.57 0.48 0.44 0.38 0.29 0.28 0.24 0.16

ROG 1.23 1.03 1.00 0.98 0.97 0.95 0.76 0.50San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs I. BACKGROUND

In developing the 2007 Ozone Plan , the District and ARB recognized the need for

additional emission reductions from sources outside of the District’s regulatory authority to meet the stringent 1997 8-hour ozone standard, part icularly from mobile sources. Subsequently, the plan called for significantly inc reased incentive funding to help accelerate attainment of the standard. Since then, the District has advocated to increase incentive funding for the Valley, resulting in sign ificantly increased funding the last several years. Recognizing the importance of incentive-bas ed emission reductions in addressing increasingly stringent federal standards, the Distr ict and EPA have been working together to develop an administrative framework for providin g federal SIP credit for incentive

programs.

As part of developing new incentive programs aimed at reducing emissions from agricultural equipment, the District and the USDA N RCS collaborated to ensure that both agencies’ incentive programs achieve emission reduc tions that can be credited in SIPs.
Towards that end, in December 2010, the District, E PA, ARB, and USDA NRCS signed a memorandum of understanding (MOU) committing to est ablish a framework for providing such SIP credit. All parties involved (EPA, NRCS, ARB and the District) agreed to work collaboratively to develop a mechanism to provide S IP credit for emission reductions from federal, state, and local incentive programs that m eet the federal criteria of Surplus, Quantifiable, Enforceable, and Permanent.

NRCS and EPA continued to work together to develop a mechanism pursuant to the CAA to quantify SIP credit for emission reductions from farm equipment, achieved through voluntary incentive programs at the state/l ocal level. As a result of these continued efforts, EPA and NRCS signed Implementation Principles for Addressing Agricultural Equipment under the Clean Air Act, in July 2012

.

District Rule 9610 is the result of the collaborati ve efforts between EPA, ARB, NRCS, and the District. Rule 9610 provides the District with an administrative mechanism to take SIP credit for crediting incentive-based emission reduc tions achieved in the Valley. The key components of the District’s Rule 9610 SIP-creditin g process include:

• Incentive Program Guidelines for specific programs, developed through a public process with opportunity for public commenting and EPA concurrence.

• A Manual of Procedures , which assures that all incentive program guidelin es used for SIP creditability are publicly available a nd maintained in a centralized

location on the District’s website.

• Annual Demonstration Reports , such as this report, to quantify the amount of emissions reductions achieved by incentive programs meeting the requirements in Rule 9610. More information on report components a nd process is included later in this report.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs Throughout the SIP-crediting process, the goal is t o quantify incentive-based emission reductions that satisfy the following EPA integrity principles (defined in Section 2.0 of Rule 9610):

• Surplus: emission reductions are not otherwise required by any federal, state, or local regulation or other legal mandate. These emi ssion reductions must also be in excess of the baseline inventories underlying a SIP attainment demonstration.

• Quantifiable: emission reductions can be reliably determined and replicated through the use of well-established, publicly avail able emission factors and calculation methodologies.

• Enforceable: based on the following provisions:

o The emission reductions must be independently and practicably verifiable through inspections, monitoring, and/or other mecha nisms;

o Incentive program violations are defined through l egally binding contracts, including identifying party or parties responsible for ensuring that emission reductions are achieved;

o Grantees are obligated to provide all records need ed to demonstrate that emission reductions are achieved; and

o The public has access to all emission-related info rmation for reductions claimed in the annual demonstration report, as outl ined in Section 4.0 of

Rule 9610.

• Permanent: for the lifetime of the project, assured by actions taken to physically destroy, or permanently disable, baseline equipment or vehicles, or to permanently amend practices to ensure the reduction of emission s for the duration of the project

life.

This report demonstrates that the incentive-based e mission reductions quantified and

claimed for SIP credit meet each of these four inte grity principles and complies with requirements in Rule 9610.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs II. ANNUAL DEMONSTRATION REPORT ELEMENTS

This District-prepared report will demonstrate the quantity of emission reductions achieved through SIP-creditable incentive programs. District Rule 9610 includes several requirements be met in order to demonstrate that th e claimed incentive-based emission

reductions are SIP-creditable. The elements descri bed in Section 4.0 of Rule 9610 that this 2013 Annual Demonstration Report includes are summarized in Table 2.

Table 2: Annual Demonstration Report Requirements

Element Where

satisfied Description of guidelines used, how the guidelines ensure that the claimed emission reductions are SIP-creditable, and a list of any procedures being

used for the first time under the rule Section III of this report

Quantification of emission reductions generated thr ough incentive programs, summarized by pollutant and by years and including:

• Cost-effectiveness

• Funding amount

• Incentive program guideline

• Project type Section VII of this report

Adjustments to reductions claimed in prior annual d emonstration reports NA Identification of SIP commitments in District adopt ed SIP(s) which the District has satisfied in whole or in part through Rule 9610 , including identification and quantification of, and remedies for, any shortfalls Section IV of this report

Project information, including the following, as ap plicable:

• Project identification number

• Project location

• Project type

• Project life

• Implementation date

• Funding provided by the District, NRCS, or ARB

• Guidelines used

• Quantified emission reductions per year, and aggre gated over the project life, by pollutant

• Description of baseline and new equipment

• Additional details as needed Appendices A

and B of this report, Manual of Procedures,

and 2013

Annual

Demonstration Report Data

Sheet

Summary of monitoring and enforcement activities fo r the reporting period for incentive programs for which SIP-creditable emissio n reductions are being claimed, including:

• Identification of project audits, usage reports, i nspections, and other monitoring activities

• List of projects that do not satisfy contractual r equirements and

associated enforcement actions/remedies Section V of this report

Incentive Program Evaluation: retrospective assessm ent of the incentive program performance and recommendations, if any, fo r future enhancements Section VI of this reportSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs Annual Demonstration Report Process

Section 5.0 of Rule 9610 requires the following pro cess for the annual demonstration
report:

1. The APCO shall submit the annual demonstration r eport and information

described in Section 4.0 to ARB and EPA no later th an August 31 of each year. The APCO will present the 2013 Draft Annual Demonst ration Report to the District Governing Board for review on June 20, 2013. The 2 013 annual demonstration report

will be submitted to ARB and EPA for concurrence af ter the June Governing Board public hearing, and prior to August 31, 2013.

2. The APCO shall release the draft annual demonstr ation report to the public and present it to the District Governing Board prior to submittal to ARB and EPA for

concurrence. The 2013 Draft Annual Demonstration Report was rele ased to the public for review and comment on Tuesday, May 21, 2013. The public c omment period ended at 5:00 PM on Tuesday, June 04, 2013. No comments were rec eived. The public has an additional opportunity to comment on the draft repo rt at the June 20, 2013 Governing Board public hearing when it will be presented to t he Governing Board.

3. Previously submitted annual demonstration report s shall be made available on

the District’s website. As this is the first annual demonstration report, t here are currently no previous

versions available on the District’s website. Howe ver, the rule will be made available

on the District’s Manual of Procedures website afte r it has been submitted to ARB and

EPA for concurrence.

Recordkeeping Requirements

Section 6.0 of Rule 9610 requires all documents cre ated and/or used in implementing the requirements of Section 4.0 shall be kept and maint ained as required by the applicable incentive program guidelines. Consistent with the California Public Records Act and other related requirements, such records shall be made av ailable for public review. The public may request records through the District’s Public R ecords Release Request, available on

the District website at: http://www.valleyair.org/General_info/public_record s_release_request.htm . However, the records related to implementation of the USDA NRCS Combustion Systems Improvement of Mobile Engines incentive program are prohibited from mandatory disclosure pursuant to the Federal Food Security Act of 1985 (7 U.S.C. § 608d(2)).San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs III. INCENTIVE PROGRAM GUIDELINES

A. District Administered Incentive Programs

Historically, the District has successfully adminis tered a number of incentive programs aimed at reducing emissions across a wide variety o f sectors in the Valley. These programs include:

• The Heavy-Duty Engine Program:

o Agricultural tractor/mobile equipment

o Stationary agricultural irrigation pumps

o On-road trucks

o Forklifts

o Off-road construction equipment

o Locomotives

o School buses

• Proposition 1B: Goods Movement Emission Reduction Program

o On-road trucks

o Locomotives

• Public Benefits Grant Program

o Light-duty advanced technology vehicles

o Alternative fuel infrastructure

o Advanced transit and transportation

• REMOVE Program

o Bicycle Infrastructure

o E-mobility

o Vanpools

o Commuter subsidies

o Alternative fuel vehicle mechanics training

• Drive Clean! Rebate Program

• Clean Green Yard Machine Program

More information about the above mentioned programs is available on the District website

at: http://www.valleyair.org/Grant_Programs/GrantProgra ms.htm . Each of these programs is effective in assisting the Valley in re aching our air quality attainment goals and the benefits of these programs are reflected in a variety of ways, including advancing new technologies, accelerating fleet turnover with the adoption of new technologies, and influencing the behavior of Valley residents toward s more air-friendly practices. The majority of the emissions reduced have been achieve d through extremely cost-effective heavy-duty equipment replacement, retrofit and repo wer projects; it is these projects that make up the bulk of the claimed emission reductions claimed in this annual demonstration
report.

B. SIP-Creditable Incentive Program Guidelines

Pursuant to Section 4.1 of Rule 9610, the annual de monstration report shall contain a list of any incentive program guidelines that are being used to claim SIP credit under this ruleSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs for the first time. As this is the first annual de monstration report, all incentive program guidelines listed in this report are being used for the first time. That is to say, this is not the first time these guidelines are being used, but the first time they are being used to

claim SIP credit under the administrative mechanism created by Rule 9610.

Section 3.0 of Rule 9610 provides specific requirem ents for the District to follow with regard to incentive program guidelines. This secti on of the rule identifies pre-approved guidelines, guidelines for which EPA will need to m ake determinations on before granting credit in the SIP, and a requirement for maintainin g a website whereby the incentive program guidelines are publicly available.

Section 3.1 of Rule 9610 identifies pre-approved incentive prog ram guidelines from

which the District can claim credit for incentive-b ased emission reductions. These guidelines include:

• ARB Carl Moyer Memorial Air Quality Standards Atta inment Program (Carl Moyer Program) Guidelines for incentive projects funded b y either the Carl Moyer Program or non Carl Moyer funding sources, for the following p roject types:

• On-Road Heavy-Duty Vehicle

• New Vehicle Purchase (Chapter 1, approved 11/17/20 05; Chapter 3, approved 2008; or Chapter 4, approved 4/28/2011);

• Repower (Chapter 1, approved 11/17/2005; Chapter 3 , approved 2008; or Chapter 4, approved 4/28/2011); or

• Retrofit (Chapter 1, approved 11/17/2005; Chapter 3, approved 2008; or Chapter 4, approved 4/28/2011).

• On-Road Heavy-Duty Vehicles Fleet Modernization/Re placement (Chapter 2, approved 11/17/2005; Chapter 4, approved 3/27/2008; or Chapter 5, approved 4/28/2011).

• Off-Road Compression-Ignition Equipment

• Replacement (Chapter 4, approved 3/27/2008; or Cha pter 9, approved 4/28/2011);

• Repower (Chapter 5, approved 11/17/2005; Chapter 5 , approved 3/27/2008; or Chapter 7, approved 4/28/2011); or

• Retrofit (Chapter 5, approved 11/17/2005; Chapter 5, approved 3/27/2008; or Chapter 7, approved 4/28/2011).

• Portable and Stationary Agricultural Sources

• Repower (Chapter 10, approved 11/17/2005; Chapter 10, approved 3/27/2008; or Chapter 10, approved 4/28/2011);

• New purchase of electric motor (Chapter 10, approv ed 11/17/2005; Chapter 10, approved 3/27/2008; or Chapter 10, approved 4/2 8/2011); or

• Retrofit (Chapter 10, approved 11/17/2005; Chapter 10, approved 3/27/2008; or Chapter 10, approved 4/28/2011).San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs • NRCS Conservation Practice Standard 372 - Combusti on System Improvement (approved September 2010); Conservation Practice St andard 723 – Combustion System Air Emission Management (approved May 2009); NRCS General Manual, Title 450, Part 401 – Conservation Practice Standar ds (approved October 18, 2009); NRCS General Manual, Title 450, Part 407 – Document ation, Certification, and Spot Checking (approved October 17, 2009); Conservation Practice Standard 372 Specification (approved September 2010); NRCS Inter im Conservation Practice Standard 723 – Combustion System Air Emission manag ement (approved May 2009); and associated NRCS Program Combustion System Impro vement of Mobile Engines Guidelines for incentive projects funded by EQIP fu nds and accompanying calculation, emission factors, and destruction certification wor ksheets.

• ARB Proposition 1B Goods Movement Emission Reducti on Program Guidelines for Heavy-Duty Diesel Trucks repower, replacement, PM r etrofit, or PM + NOx retrofit incentive projects funded by Proposition 1B funds o r non-Proposition 1B funds. Applicable ARB Proposition 1B Goods Movement Emissi on Reduction Program Guidelines are the 2013 Proposition 1B: Goods Movem ent Emission Reduction Program Guidelines (Appendix A, approved 01/25/2013 ); the 2010 Proposition 1B: Goods Movement Emission Reduction Program Guideline s (Appendix A, approved 03/25/2010); and the 2008 Proposition 1B: Goods Mov ement Emission Reduction Program Guidelines (Appendices A or B, approved 02/ 28/2008).

The summaries of SIP-creditable incentive-based emi ssion reductions claimed under

Section 3.1 of Rule 9610 are included in Section VI I of this annual demonstration report, and the detailed information for each project is pr esented in the 2013 Annual Demonstration Report Data Sheet that accompanies th is report.

Section 3.2 of Rule 9610 allows the District to quantify emiss ion reductions under the rule in accordance with incentive program guidelines not specifically identified in Section 3.1, provided the District submits to EPA a demonstratio n that each such incentive program guideline provides for SIP-creditable emission redu ctions. Incentive program guidelines subject to Section 3.2 may include ARB Carl Moyer P rogram Guidelines, NRCS Combustion System Improvement Conservation Practice Standard 372 and associated NRCS Program Combustion System Improvement of Mobil e Engines Guidelines, and ARB Proposition 1B Goods Movement Emission Reductio n Program Guidelines. Section 3.2 also allows for SIP-credit for case-by-case det erminations under the Carl Moyer Program Guidelines if such determination is reviewe d through a public process and submitted to EPA for approval into the SIP. Any ca se-by-case determinations that have followed the above mentioned process during the rep ort period will be identified in section VII of this report.

The 2013 Annual Demonstration Report employs Sectio n 3.2 of the rule by claiming SIP

credit for incentive-based emission reductions from the ARB Carl Moyer Program Guidelines (2005, 2008, 2011) for locomotive altern ative technology switchers and new electric forklift purchases. The summaries of thes e SIP-creditable incentive-based

emission reductions claimed under Section 3.2 of Ru le 9610 are included in Section VI ofSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs this annual demonstration report and the detailed i nformation for each project is presented in the 2013 Annual Demonstration Report D ata Sheet that accompanies this
report.

The following discussion demonstrates that each suc h incentive program guideline provides for SIP-creditable emission reductions.

Locomotive Repower Projects funded with the 2008 and 2011 Carl Moyer P rogram Guidelines followed all required steps to ensure SIP-creditability criteria were met as follows:

Surplus – There are currently no federal, state, or local rul es or regulations pertaining

to the emissions of locomotives in the state of Cal ifornia. Therefore, all incentivebased emission reductions are surplus.

Quantifiable

– The Carl Moyer Guidelines provide calculation me thodologies and emission factors for locomotive projects. These me thodologies have been reviewed and adopted through a public process. All locomoti ve projects in this 2013 Annual Demonstration Report were quantified using these SI P-creditable calculation methodologies, as referenced on the Manual of Proce dures website.

Enforceable – The District performed inspections pursuant to Carl Moyer Guidel ine requirements and satisfied enforceability requireme nts under Section 4.0 of Rule 9610. These inspections verified contractual requi rements were followed thus ensuring projected emission reductions were achieve d. These projects included legally binding contracts between the grantee and t he District that identified the party or parties responsible for ensuring that the emissi on reductions were achieved. These contracts also obligated the grantee to provide all records needed to demonstrate the

emissions reduced.

Permanent

– Per contractual requirements, the cleaner locomo tive is required to be operated for the duration of the project life.

Purchase of New Electric Forklifts Projects funded with the 2008 Carl Moyer Program Gu idelines followed all required steps to ensure SIP-creditability criteria were met , as follows:

Surplus – The current regulation for off-road mobile equipmen t has an exemption for agricultural-use vehicles. The forklifts that were funded are used solely for agricultural purposes, and therefore are surplus to the state re gulation.

Quantifiable

– The Carl Moyer Guidelines provide calculation me thodologies and emission factors for forklift projects. These meth odologies have been reviewed and adopted through a public process. All forklift pro jects in this report were quantified using these SIP-creditable calculation methodologie s. This methodology assumes the baseline equipment to be a new diesel forklift. Th erefore, new purchases of electricSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs forklifts are calculated based on the difference in emissions between a new diesel

forklift and a new electric forklift.

Enforceable – The District performed inspections pursuant to Carl Moyer Guidel ine requirements and satisfied enforceability requireme nts under Section 4.0 of Rule 9610. These inspections verified contractual requi rements were followed thus ensuring projected emission reductions were achieve d. These projects included legally binding contracts between the grantee and t he District that identified the party or parties responsible for ensuring that the emissi on reductions were achieved. These contracts also obligated the grantee to provide all records needed to demonstrate the

emissions reduced.

Permanent

– Per contractual requirements, the new electric f orklift is required to be operated for the duration of the project life.

Section 3.3 of Rule 9610 requires the District to develop and maintain a Manual of Procedures that includes all incentive program guid elines used to achieve SIP-creditable emission reductions from incentive programs. The r ule requires the Manual of Procedures be made publicly available on the Distri ct’s website and maintained on an ongoing basis as incentive program guidelines are a dopted and includes a description of how incentive program guidelines ensure that emissi on reductions are SIP-creditable. As this is the first annual demonstration report and i t is being taken to the District Governing Board concurrently with Proposed Rule 9610 and asso ciated documents, the Manual of Procedures website is currently available for publi c viewing in Appendix D of the Final Draft Staff Report for Proposed Rule 9610 and is av ailable on the District website at: http://www.valleyair.org/Board_meetings/GB/agenda_m inutes/Agenda/2013/June/Governi ngBoardPacketJune2013.pdf

.

Sections C through E below describe the specific in centive program guidelines identified

in Rule 9610 that were used to reduce emissions and calculate the emission reductions included in this annual demonstration report. Thes e guidelines are developed and periodically revised in a public process with oppor tunity for public review and commenting. In cases where more than one version o f an incentive program guideline was used for a given incentive project, the specifi c version is identified and included within the detailed project information provided in the 2013 Annual Demonstration Report Data Sheet. Based on EPA guidance and requirements of Rule 9610, the following descriptions include details about how each incenti ve program guideline ensures that the EPA integrity principles (also called SIP-creditabi lity criteria) of being surplus, quantifiable, enforceable, and permanent are fulfilled.

C. ARB Carl Moyer Memorial Air Quality Standards A ttainment Program Guidelines

The Carl Moyer Program is a grant program that fund s the incremental cost of cleanerthan-required engines and equipment. Adopted in 19 99 by ARB, this program was created through a public process and provides incen tives to help obtain early or extraSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs emission reductions, especially from emission sourc es in environmental justice communities and areas disproportionately impacted b y air pollution with a primary objective of obtaining cost-effective and surplus e mission reductions.

The Carl Moyer Program has been successfully implem ented through the cooperative

efforts of ARB and air districts in California. As directed by the California Health and Safety Code, ARB’s role is to oversee the Carl Moye r Program by managing program funds, developing and maintaining guidelines, and d etermining cost-effectiveness methodologies. Air districts use the Carl Moyer Pr ogram Guidelines to select, fund, and monitor projects in their jurisdiction by providing grants to public and private entities.

The Carl Moyer Program guidelines include robust ad ministrative requirements to ensure

that emission reductions are enforceable and are ac hieved throughout the life of a project. The District has used the Carl Moyer Program Guidel ines to develop the practices that are currently in place to ensure all EPA integrity principles of Surplus, Quantifiable, Enforceable, and Permanent are met. The following is a summary of how the Carl Moyer Program Guidelines meet each SIP-creditability crit erion:

Surplus The Carl Moyer Program Guidelines ensure that proje cts are surplus to regulations by only allowing projects to be selected that are n ot required by any federal, state, or local regulation, memorandum of agreement/unders tanding with a regulatory agency, settlement agreement, mitigation requiremen t, or other legal mandate. For example, the guidelines have accounted for each adopted regulation to determine the compliance dates of any affected engi nes and emission benefits claimed by each regulation have been determined. M inimum project lives are established in each component to ensure that the pr ogram does not fund actions taken to comply with regulatory deadlines. The min imum project life requirement

also ensures the overall cost effectiveness of the program and that the emission reductions are real for the life of the project. T he summary below provides more detail about how the Carl Moyer Program Guidelines ensure that the SIPcreditability integrity principle of “Surplus” is f ulfilled:

o Requirement that emission reductions generated by i ncentive programs are not required by other regulation

 (Moyer Guidelines Chapter 2, Project Criteria A, H , I, MM).

o Protocols for quantifying maximum project life and maximum emission reductions which account for upcoming regulatory de adlines for a given
source category

 (Moyer Guidelines Chapter 2, Project Criteria B, I and MM).

o Assurance that baseline equipment was in use

 (Moyer Guidelines Chapter 3, Section Z.6(B) and AA .2.).

o Assurance that new/upgraded equipment is not alread y accounted for in future-year inventories underlying a SIP attainment demonstration by natural fleet turnover, finite equipment life or in centives

 The definition of surplus in the Moyer guidelines requires that the emission reductions achieved are above and beyond t hose requiredSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs under existing regulations that are incorporated in to a SIP. As part of the SIP development process, ARB reviews the Moyer project mix to

ensure that the amount of emission reductions credi ted to the program are not included in the future year invento ries specific to

each individual attainment demonstration.

o Procedures that ensure that old equipment was used in the geographic area

of interest

 (Moyer Guidelines, Chapter 2, Section S and Chapte r 3, Section Z.6.(B)).

Quantifiable The District evaluates the potential emission reduc tions that would be achieved by replacing the old equipment with the new equipment using the established calculation methodologies and emissions factors in the program guidelines. The calculation methodology, including calculation form ulas, assumptions, emission factors and sample calculations are part of the Car l Moyer Program Guidelines and have been approved through a public process. To ens ure that real, quantifiable

emission reductions are achieved over the life of a project, the program guidelines require that emission control technologies be certi fied or verified by ARB (certification or verification by the EPA or Intern ational Maritime Organization may be allowed for some source categories for which ARB does not have a certification or verification program). The summary below provid es more detail about how the Carl Moyer Program Guidelines ensure that the SIP-c reditability integrity principle
of “Quantifiable” is fulfilled:

• Emissions data needed to calculate emission reducti ons must be publicly available, current, and accurate. This sh ould include appropriate emission factors, load factors, and oth er conversion factors.

o Moyer Guidelines, Appendix D (Publicly Available) and Chapter 1, Section E.7 (Allows ARB Executive Officer to modify the Guidelines under a public process, to keep them eff ective and upto-date.)

• Guidelines include necessary formulas and instructi ons to calculate emission reductions based on above data, and explic it instructions to ensure appropriate data are used in calculations

o Moyer Guidelines, Appendix C (contains formulas an d instructions)

o Moyer Guidelines, Supplemental document, “Sample Calculations” (contains formulas and instructions)

o Moyer Guidelines, Appendix C, Section B.5, and Sup plemental document, “Sample Calculations” (contains explicit instructions regarding inputs)

• Requirement to provide activity data sufficient to determine actual

emission reductions

o Moyer Guidelines, Chapter 3, Section Z.6.(B)San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs • Requirement to demonstrate the percentage of emissi on reductions that occur in the geographic area of interest, and that emission reductions

are therefore SIP creditable

o Moyer Guidelines, Section S.

o Moyer Guidelines, Section Z.6.(B)

• Requirement to periodically audit completed project s to verify emission reduction projections are fulfilled

o Moyer Guidelines Chapter 2, Sections Z.10.

o Moyer Guidelines Chapter 3, Sections EE.

Enforceable Emission reductions and other required actions are enforceable if: they are independently verifiable; program violations and th ose liable are defined; information

needed to determine emission reductions is availabl e to the public; and they are practicably enforceable in accordance with other EP A guidance on practicable enforceability. The summary below provides more det ail about how the Carl Moyer Program Guidelines ensure that the SIP-creditabilit y integrity principle of “Enforceable”

is fulfilled:

• Require Grantees to provide all necessary recordkee ping and reporting needed to verify emission reductions

o Moyer Guidelines, Chapter 3, Section Z.9 and DD

• Require inspections to ensure incentive program inf ormation is consistent with actual operating equipment

o Moyer Guidelines Chapter 3, Sections AA and BB.

• Identify liable parties and liability associated wi th contract noncompliance

o Moyer Guidelines Chapter 3, Section Z.11.

Permanent

To ensure that the SIP-creditable emission reductio ns are permanent, actions such as pre-inspections and post-inspections of the new equipment and verification that the baseline equipment has been destroyed through t he required process as described in the program guidelines are performed. The summary below provides more detail about how the Carl Moyer Program Guidel ines ensure that the SIPcreditability integrity principle of “Permanent” is fulfilled:

• Data needed to determine and track location of acti vity

o Moyer Guidelines, Chapter 3, Section DD

• Provisions for ensuring that the project was comple ted, including the verification of disposition of baseline equipment.

o Moyer Guidelines Chapter 3, Sections AA and BB

A summary of emission reductions achieved through t he use of the Carl Moyer Program Guidelines is included in Section VII of this repor t. The complete Carl Moyer Program

Guidelines can be found online at: www.arb.ca.gov/msprog/moyer/guidelines/current.htm

.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 17 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs D. ARB Proposition 1B: Goods Movement Emission Red uction Program

Guidelines

In November 2006, California voters approved Propos ition 1B authorizing $1 billion in bond funding to reduce air pollution associated wit h the movement of freight along California’s major trade corridors. Subsequent imp lementing legislation established standards and procedures for the expenditure of the se funds. Governor Schwarzenegger’s Executive Order S-02-07 provides f urther direction to ensure accountability and transparency in administering bo nd-funded programs.

ARB developed the Proposition 1B: Goods Movement Emission Reduction P rogram Guidelines for Implementation (Proposition 1B Guidelines),through a public proces s in consultation with stakeholders, including: air dist ricts, metropolitan planning organizations, port authorities, shipping lines, ra ilroad companies, trucking companies, harbor craft owners, freight distributors, terminal operators, local port community advisory groups, community interest groups, and airports. The Proposition 1B Guidelines ensure that the Distr ict funds qualifying projects that achieve the following results:

• Reduce emissions and health risks;

• Incorporate simplicity and efficiency;

• Ensure cost effectiveness;

• Leverage other funding sources; and

• Provide transparency and accountability.

ARB, under direction from Executive Order S-02-07, established transparency and accountability measures for administering the bond funding. ARB has made all program materials including, but not limited to; guidelines , Board Resolutions, Notice of Funding Availability, summary tables, recommendations for f unding, materials from public workshops, and completed applications submitted by local and state agencies available

on their website.

Through the Proposition 1B Program, the District pr ovides incentive funds to reduce emissions from eligible heavy-duty trucks traveling through California’s major trade corridors and locomotives with the following fundin g options:

• Retrofit of existing vehicles

• Repower of existing vehicles

• Replace an older vehicle with a newer, cleaner veh icle

• A tiered truck transaction, which involves retrofi tting and replacing two different

vehicles.

The program is designed to supplement ARB’s diesel regulations by funding early compliance or providing extra emission reductions b eyond those required by current

rules.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 18 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs The guidelines include robust administrative requir ements to ensure that emission reductions are enforceable and are achieved through out the life of a project. The District has used the Proposition 1B Guidelines to develop t he practices that are currently in place to ensure all EPA integrity principles are me t. The following is a summary of how the Proposition 1B Guidelines meet each SIP-credita bility criterion:

Surplus The Proposition 1B program supplements ARB’s diesel regulations by funding early compliance or providing extra emission reduct ions beyond those required by current rules. The program guidelines require that the District ensure all trucks being considered to receive funding have had ARB ve rify compliance with the state’s diesel regulations and further require that any trucks under contract with the District be noted as such in the state’s online reg ulation reporting database. This

ensures that the new truck will not be used towards compliance during the project life ensuring that the emission reductions are surp lus. Chapter 6 Section E discusses the requirements that fleets remain in co mpliance with the Truck and Bus Regulation and that program funded equipment ca nnot be used towards compliance with the regulation.

Quantifiable The District evaluates the potential reductions tha t would be achieved by replacing the old equipment with the new equipment using the Project Benefits Calculator created by ARB. The calculator is available to the public on ARB’s website at http://www.arb.ca.gov/bonds/gmbond/gmbond.htm and is updated by ARB on a regular basis. Chapter 2 Section C Discusses Proposition 1B progra m emission

reduction calculations.

Enforceable The District has created enforceable contracts, bas ed on requirements in the Proposition 1B Program guidelines, which are signed by both District management and the Grantee to ensure that projects are fully a ccomplished and the integrity principles are met. The legally binding contracts include, but are not limited to, usage reporting requirements for the Grantee, opera ting location requirements for the new vehicle, the destruction requirements of th e baseline equipment/engine,

and an allowance for the District to conduct an aud it of the project at any time during the project life. Appendix A of Proposition 1B Program guidelines details contract requirements for truck projects.

Permanent

To ensure that the SIP-creditable emission reductio ns are permanent, actions such as post-inspections of the new equipment and verifi cation that the baseline equipment has been destroyed through the required p rocess as described in the program guidelines are performed. Chapter 4 Sectio n A of the Proposition 1B program discusses scrap and post inspection require ments.

A summary of emission reductions achieved through t he use of the Proposition 1B Program Guidelines is included in Section VII of th is report. The complete Proposition 1BSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 19 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs Program Guidelines can be found online at: http://www.arb.ca.gov/bonds/gmbond/gmbond.htm

.

E. USDA NRCS Combustion Systems Improvement of Mob ile Engines Incentive Program Guidelines

Under the Food Conservation and Energy Act of 2008, the USDA Secretary provides eligible producers with program support to address serious a ir quality concerns from agricultural operations and help meet regulatory requirements th rough the Environmental Quality Incentives Program (EQIP). The National Air Qualit y Initiative (NAQI, once referred to as “CIG-b”) is a voluntary incentive program with the primarily goal to achieve and maintain the health-based National Ambient Air Quality Standards (NAAQS) within designated nonattainment areas of California. Financial assista nce is targeted to counties that have been identified as having significant air quality resour ce concerns by being designated as nonattainment for Ozone and/or Particulate Matter (PM1 0 / PM2.5). These areas experience air pollution levels that persistently exceed the NAAQS established by the CAA. http://www.ca.nrcs.usda.gov/programs/eqip/2013/2013 _air_quality_initiative.html

Given its experience in running similar incentive p rograms, the District provided assistance to NRCS in developing this new program. Through this program, NRCS provides incentive funds to assist farmers in repla cing diesel powered agricultural equipment with the goal of ensuring the resulting e mission reductions meet the SIPcreditability criteria of being surplus, quantifiab le, enforceable, and permanent. Since 2009, the NRCS program, in combination with the Dis trict’s program, has provided over $105 million in incentives for agricultural equipme nt replacement, with significant continued investment currently ongoing. Eligible p articipants are owners of land in agricultural or forest production or persons who ar e engaged in livestock, agriculture, or forest production on eligible land and that have a natural resource concern on the land.

Applications are accepted on a continuous basis wit h periodic application ranking cut-offs. The NRCS has specific expertise regarding agricultu ral practices and operations and works closely with agricultural stakeholders in rev iewing applications for eligibility. Applications are ranked for funding based upon rank ing criteria developed with input from Local Work Groups, Stakeholders, and the State Tech nical Advisory Committee (STAC). The ranking score of a project is based on multiple factors including but not limited to:

• Whether or not the project location is in an area that has an EPA NAAQS nonattainment designation for PM2.5, PM10, and/or Ozon e and what type of designation that area has (for example “extreme” no nattainment).

• If there are currently any local or state agricult urally based air emission regulatory requirements for the area that the project is locat ed.

• The emission level of the baseline equipment/engin e and the emission factors of the new/replacement equipment/engine.

• The amount of NOx, ROG, and PM that is projected t o be reduced by funding the project.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 20 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs The ranking criteria ensure that the projects with the greatest amount of reductions, resulting in the highest air quality benefit will b e selected for funding.

NRCS has created robust administrative requirements based on those in the Carl Moyer Program Guidelines to ensure that emission reductio ns are enforceable, are achieved throughout the life of a project, and ensure all EP A integrity principles are met. These requirements are contained in Conservation Practice Standard (CPS) 372 – Combustion System Improvement and associated specifications an d procedures. The following is a summary of how the NRCS Guidelines meet each SIP-cr editability criterion:

Surplus Under the NAQI, page 3 of the CA-NRCS program guide lines specifies that SIP

creditable emission reductions are “achieved from c ontracts or parts of contracts funded under the air quality initiative [that] are not required by any federal, state, or local regulation, settlement agreement, mitigation requirement, or other legal mandate.” A rule or regulation does not currently exist for off-road mobile agricultural equipment, so the emission reductions resulting from replacing existing mobile off-road agricultural engines funded under t he NAQI per CPS 372- Combustion Systems Improvement are surplus. The FY 2013 National Air Quality Initiative Programs Description is posted on-line a t: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiative_P rogDesc.pdf

. The 2012 CA-NRCS program guidelines are posted on-l ine at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/AQI/2012_Combustion _Systems_Improvement_ Policy_and_Procedures.pdf

Quantifiable The District provided technical assistance to CA-NR CS in developing their calculation methodologies. The methodologies from the Carl Moyer Program are the basis for components included in CPS-372 and it s supporting documents for the NAQI, including the CA-NRCS program guidelines. The District provided technical assistance to CA-NRCS in developing their calculation methodologies, which are consistent with the Carl Moyer Program. The NRCS Field Office Technical Guide places a ten-year lifespan for proj ects implemented under CPS 372 – Combustion System Improvement, which is also consistent with the Carl Moyer program. A conservation practice lifespan is the minimum time (in years) the implemented practice is expected to be fully fu nctional for its intended purpose (NRCS General Manual, Title 450, Part 401.15) http://directives.sc.egov.usda.gov/viewerFS.aspx?hi d=19430 . A list of California NRCS practice standard life-spans are posted on-lin e at: http://efotg.sc.egov.usda.gov/references/public/CA/ List_of_Practices_Lifespans_20 12-12_CA_Numeric.xlsx

The emission reductions for each project are calcul ated using the methodologies outlined in the Carl Moyer Guidelines. All equipme nt engines are cross-referenced against an ARB executive order that verifies the em ission of every equipment engine. The NRCS calculation worksheets and emissi on factors are posted on-lineSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 21 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiative_A ttachments.pdf

Enforceable The NRCS inspects equipment in proposals prior to c ontract development to verify the existing mobile off-road agricultural equipment is operational per CPS-372 specifications. Destruction of existing equipment is certified by the disposal operator and participant and date-stamped photos ar e provided. The certification worksheet is posted on-line at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiative_A ttachments.pdf.

On an annual basis NRCS reviews at least 5% of all active projects. From these project reviews NRCS verifies that the new equipmen t is still operational. http://directives.sc.egov.usda.gov/RollupViewer.asp x?hid=25728

.

Per Subpart C, 512.22, participants have control of the land for the length of the proposed contract through deed, lease, or other wri tten authorization. If the applicant does not own the land, the landowner must give written consent to install, operate, and maintain the practice through the life span of the practice. This is conducted through a partnership with the USDA Farm Service Agency, who is responsible for program eligibility support.

Subpart F covers Contract Administration and provid es for recovering liquidated damages for certain deviations to a contract. Hand ling contract violations is addressed in Subpart H where violations of contract terms must be corrected by the participant within a reasonable period of time to comply. If the violation continues, the contract may be terminated and futur e program participation

deferred.

Permanent NRCS eligibility is based on the county that the tr actor resides in; in this case, the tractor has to reside within one of the eight count ies of the San Joaquin Valley. Under the NAQI, the NRCS prioritizes applications b ased on a county’s nonattainment designation within California. Applicat ions received from attainment areas are not eligible. Currently, only the emissi on reductions originating from within the eight San Joaquin Valley counties are se eking SIP credit under this proposal. The destruction of the existing mobile o ff-road engines and equipment are verified per CPS 372 specifications, posted on- line at: http://efotg.sc.egov.usda.gov/references/public/CA/ 372-spec-09-2010.doc

. Destruction certification worksheets are posted on- line at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiative_A ttachments.pdf. The NRCS also has a stipulation that the tractor ha s to be tied to the land where it is in use. This requires that th e tractor be used 100% of the time in the San Joaquin Valley. Under the NAQI, NRCS st aff verifies by site visit the operational condition of the existing mobile off-ro ad agricultural equipment.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 22 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs Destruction of the existing equipment and emissions certification verifications are performed to determine contract compliance.

The Combustion Systems Improvement of Mobile Engine s incentive program is unique from other incentive programs in that NRCS is expli citly prohibited from identifying Grantees by name. As directed by the Farm Bill (Fo od Security Act of 1985 (7 U.S.C. § 608d(2))), NRCS must maintain the confidentiality o f information provided by an agricultural producer participating in the NRCS Com bustion Systems Improvement of Mobile Engines incentive program. The information is exempt from mandatory disclosure and may not be used in judicial or administrative p roceedings without the consent of the person involved.

A summary of emission reductions achieved through t he use of the NRCS Combustion System Improvement of Mobile Engines incentive prog ram guidelines is included in Section VII of this report. The NRCS Combustion Sy stem Improvement of Mobile Engines incentive program can be found online at:

• Conservation Practice Standard 372: http://efotg.sc.egov.usda.gov/references/public/CA/ 372-std-09-2010.pdf

• Conservation Practice Standard 372 Specification: http://efotg.sc.egov.usda.gov/references/public/CA/ 372B-OM-ca-8-13.doc

• Procedures: ftp://ftpfc.sc.egov.usda.gov/CA/programs/AQI/2012_Combustion _Systems_Improvement_ Policy_and_Procedures.pdfSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 23 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs IV. RELEVANT SIP COMMITMENTS

Through Rule 9610, the District may rely on project ions of SIP-creditable incentive-based emission reductions to satisfy federal CAA requirem ents, including the demonstration of attainment, Reasonable Further Progress, Rate of Pr ogress, contingency measures, and/or black box reductions (Section 182(e)(5) of t he CAA). For such SIP commitments, the District identifies specific amounts of SIP-cre ditable emission reductions by year in the relevant SIP. This annual demonstration report the n identifies the SIP commitments included in District adopted SIPs (by year, polluta nt, and magnitude) which the District has satisfied, in whole or in part, through SIP-cre ditable emission reductions. This annual demonstration report also identifies and quantifies any SIP commitment shortfalls and remedies for addressing those shortfalls.

A. SIP Commitments

The following table is a summary of SIP commitments to reduce emissions for which the District intends to claim credit for using District Rule 9610 as the administrative mechanism. The magnitude of the emission reduction s are expressed in tons per day (tpd).

Table 3: Relevant Commitments in District-adopted SIPs

District

- adopted

SIP Adoption

date Requirement Year Pollutant Magnitude

2008 PM2.5 Plan Anticipated

6/20/13 Contingency 1 2015 NOx

PM2.5 4.15 tpd

0.10 tpd

2007 Ozone Plan 9/27/07 ARB commitment to reduce ag equipment

emissions 2 2017 NOx 5-10 tpd

2007 Ozone Plan 4/30/07 “Black Box” 2023 3 NOx TBD

2012 PM2.5 Plan 12/20/12 Contingency 4 2020 NOx 1.9 tpd

1 SJVUAPCD, 2008 PM2.5 Plan (April 30, 2008). Retrieved May 2013

at http://www.valleyair.org/Air_Quality_Plans/docs/AQ_ Final_Adopted_PM2.5/13%20Chapter%209.pdf

2 ARB, 2007 State Strategy Attachment B, pages 16-17 (September 27, 2007). Retrieved May 2013 at http://www.arb.ca.gov/planning/sip/2007sip/07-28_at tachment_b.pdf

3 Per CAA §182(e)(5), the District is required to, i n 2019, identify specific control measures that wil l achieve the emissions reductions necessary to fulfill the “blac k box” identified in Chapter 11, page 11-1. http://www.valleyair.org/Air_Quality_Plans/docs/AQ_ Ozone_2007_Adopted/16%20Chapter%2011%20April%202007 .pd

f

4 SJVUAPCD, 2012 PM2.5 Plan (December 20, 2012). Re trieved May 2013 at http://www.valleyair.org/Workshops/postings/2012/12 -20- 12PM25/FinalVersion/09%20Chapter%209%20RACM%20RFP%2 0Contingency.pdfSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 24 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs 2008 PM2.5 Plan

(Contingency Quantification, 2015): The District meets its 2008

PM2.5 Plan

commitment to quantify an adequate amount of conti ngency emissions reductions, including SIP-creditable emissions redu ctions from incentive programs quantified in this report ( http://www.valleyair.org/Workshops/postings/2013/6- 20-13- R9601/PM25ContingencyQuantification.pdf ). On August 28, 2013, EPA proposed to approve a SIP revision to address CAA nonattainment area contingency measure requirements for the 1997 annual and 24-hour fine p articulate matter (PM2.5) NAAQS in the San Joaquin Valley. 5 SIP Creditable incentive-based emission reduction s accounted for by EPA in this proposed approval include on-roa d vehicle replacement projects that have been funded through the Prop 1B program and ag ricultural off-road vehicle replacement projects funded through the Carl Moyer Program.

2007 Ozone Plan

(Agricultural Equipment, 2017): The 2007 San Joaquin Valley 8- Hour Ozone SIP, approved by EPA, contained a commit ment by the ARB to present to their Board a regulation for off-road mobile agricu ltural equipment in 2013. The regulation would move California towards meeting ambient air q uality standards for the Valley by utilizing the cleanest available technologies. Spec ifically, the approved SIP includes a goal to achieve emissions reductions of 5 to 10 ton s per day of NOx from mobile agricultural equipment in the Valley by 2017 to acc elerate progress toward attainment of

the ozone standard. The attainment deadline is 2023

.

Beginning in 2009, the District and NRCS, in partne rship with agricultural stakeholders, launched incentive programs aimed at reducing emiss ions from agricultural equipment. These programs have been well-funded and have achie ved significant emission reductions since 2009. As documented in this repor t, projects implemented to date will achieve 6.62 tpd of NOx reductions in 2017 (see tab le 5), making significant progress, and in fact, already exceeding the minimum of 5tpd NOx commitment in the 2007 Ozone

Plan . While included in this report, ARB plans on repo rting on overall progress made

relative to this SIP commitment in the 3 rd quarter of 2013 (see below description of ARB’s ag equipment effort, and http://www.arb.ca.gov/ag/agtractor/agtractor.htm for further information).

In addition to these already implemented projects, the District has already executed an additional $17.8 million in contracts for 463 units , projecting to achieve an additional 0.85 tons of NOx/day in 2017. NRCS has also executed an additional $9.8 million in contracts for 195 units, projecting to achieve an additional 0.80 tons of NOx/day. Combined with the reductions documented in this report, these pro jects are expected to achieve 8.27 tpd of NOx reductions in 2017 . The District and NRCS are continuing to invest significant additional funding to replace agricultu ral equipment, and the total emissions

reductions achieved towards this commitment is cont inued to grow substantially in the next several years. This progress will be document ed in future annual demonstration
reports.

5 EPA, Approval and Promulgation of Implementation P lans; California; San Joaquin Valley; Contingency M easures for the 1997 PM2.5 Standards, 78 Fed. Reg. 167, pp. 531 13 – 53124. (2013, August 28). (to be codified at 4 0 CFR Part 52). Retrieved November 2013 at http://www.gpo.gov/fdsys/pkg/FR-2013-08-28/pdf/2013 -21010.pdfSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 25 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs The agricultural equipment incentive-based emission reductions documented in this report have been summer-adjusted to allow for compa rison with the 2007 Ozone Plan commitment (based on summer ozone season), using th e seasonal emissions inventory fractions included in the plan’s emissions inventor y as follows:

Table 4: 2007 Ozone Plan Agricultural Equipment Em issions Inventory Seasonal

Fraction

Season Seasonal Fraction

Winter 0.391

Summer 0.609

ARB Rulemaking: ARB’s Regulation for State Implemen tation Plan Credit from Mobile Agricultural Equipment in the San Joaquin Valley wa s adopted by their Board in October 2013. The regulation provides a mechanism to ensur e that the agriculture industry’s voluntary participation in incentive programs in th e San Joaquin Valley is recognized by the EPA. To meet EPA requirements, the emission re ductions must be surplus, quantifiable, enforceable, and permanent. ARB’s re gulation defines the criteria and process that ARB will use to determine that the red uctions from the use of incentives generated from federal, state, and local funds spen t on qualifying mobile agricultural equipment projects are surplus, quantifiable, enfor ceable, and permanent and are therefore eligible for SIP credit.

2007 Ozone Plan (“Black Box” 2023): This commitment will be accounted for in future annual demonstration reports, since these reduction s are necessary to be achieved in

2023.

2012 PM2.5

Plan (Contingency Quantification, 2020): This commitment will be accounted for in future annual demonstration report s, since these reductions are necessary to be achieved in 2020.

B. Progress/Achievement of SIP Commitments

The table below provides a summary of progress made towards meeting the above listed

SIP commitments.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 26 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs Table 5: Summary of Progress Made Towards SIP comm itments

SIP Commitment Incentive Program Reductions (tpd)

2008 PM2.5 Plan : 4.15 tpd of NOx in 2015 0.10 tpd of PM2.5 in 2015 All data for NOx, 2015. See Section II for more in formation. Agricultural Off-road vehicle replacement projects funded through the Carl Moyer Program 1.33 tpd NOx 0.06 tpd PM2.5

On-road vehicle replacement projects funded through the Prop 1B Program 3.78 tpd NOx 0.15 tpd PM2.5

TOTAL (in 2015) 5.11 tpd NOx 0.21 tpd PM2.5

Commitment met? YES

2007 Ozone Plan : 5-10 tpd of NOx from ag equipment in 2017 All data for NOx, 2017. See Section II for more in formation. District Ag Equipment Replacement Program (Moyer) 1.62*

NRCS Combustion System Improvement 5.00*

TOTAL 6.62* Percentage of commitment met to date (Remaining reductions to be demonstrated in future annual reports) 132%

2012 PM2.5 Plan : 1.9 tpd of NOx in 2020 To be demonstrated in future annual reports, since these

reductions are for 2020

2007 Ozone Plan Black Box To be demonstrated in future annual reports (by 201 9), since

these reductions are for 2023

*Adjusted for summer-time emissions inventory, 2007 Ozone Plan

C. SIP Commitment Shortfalls

There are no shortfalls at this time; therefore, th ere are no remedy actions to be taken.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 27 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs V. MONITORING AND ENFORCEMENT ACTIVITIES

Pursuant to Section 4.6 of Rule 9610 this annual de monstration report includes a summary of monitoring and enforcement activities th at were conducted during the reporting period from 01/01/2009 – 05/13/2013. Mon itoring is performed on all projects in the form of pre-inspections prior to contract, post -inspections prior to payment and annual usage surveys filled out by the grantee for the lif e of the project.

Inspections are performed by District staff and inc lude visually verify and photographically document equipment information such as but not limi ted to:

• Make, model, and model year of the engine and/or v ehicle or equipment,

• Vehicle, equipment, and/or engine identification a nd serial numbers,

• Operational condition of vehicle, equipment, and e ngine

The District reviews all inspection information to ensure that the submitted information is true and accurate prior to contracting a new projec t and prior to payment of reimbursement requests from grantees. The table be low illustrates the number of preinspection and post-inspection that were conducted during the reporting period.

Table 6: Incentive Program Project Inspections

Year Pre-Inspections Post-Inspections

2009 1493 126

2010 790 908

2011 1138 973

2012 2293 1355

2013 1224 761

District incentive project contractual agreements s pecify that Grantees must provide data

to the District on an annual basis for the duration of their contract period. The required data includes usage data (mileage, hours of operati on, percent utilization within the District, etc). The usage data is analyzed by the District to ensure that the incentive projects are achieving the projected emission reduc tions. The table below illustrates the quantity of usage report surveys distributed from t he District to Grantees and the quantity of Grantee completed usage report surveys returned to the District through May 13, 2013.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 28 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs Table 7: Incentive Program Annual usage Reports

Year Usage Report Surveys

Distributed to

Grantees Completed Usage Report

Surveys Returned to the

District

2011 1439 1126

2012 3158 2786

2013 389 281

A. Carl Moyer Program Specific Monitoring and Enfo rcement Activities

Project specific audits are conducted in addition t o the monitoring and enforcement

activities mentioned above. Grantees that are unde rreporting or have not summited completed usage report surveys are subjected to Dis trict audits of their projects. These audits follow procedures set forth in the 2008 Carl Moyer Program Guidelines. Additional incentive projects selected for audit include a ran dom sample of 5% or 30 projects (whichever is less) that are at least one year into their implementation period, but have not concluded their implementation period, and all incentive projects where the most recent annual report is delinquent by at least six (6) months of the due date.

Projects selected for auditing are reviewed to ensu re contract terms are fulfilled; emission reduction calculations are verified and project inf ormation is confirmed against the District database for accuracy. An inspection is conducted for each project to verify that the equipment, vehicle or practice is still owned (or i n practice) by the Grantee and operational in the same piece of equipment and/or i ntended use as was contracted. Inspections also verify engine/equipment serial num bers, operational condition and verification of functioning odometer, hour meter/us age device, fuel receipts, or electronic monitoring unit.

If deficiencies are discovered as part of an incent ive project audit, the District utilizes several remedies, including:

Deficiency: Underreporting usage on one or more annual
report

Potential Remedies: Extending project implementation phase Analyzing average usage over project implementation phase Demanding return of funds from Grantee

Deficiency: Non-submittal of annual reports

Potential Remedies: Demanding return of funds from Grantee Excluding Grantee from future incentive

programsSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 29 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs Deficiency: Grantee no longer owns equipment

Potential Remedies: Assign contract to new equipment owner Demanding return of funds from Grantee

During the 2010 Carl Moyer project specific audits conducted by the District, a total 408 projects were at least 1 year into their project li fe. A 5% random sample of these projects was selected totaling 20 projects. Of which, 5 pro jects were found to be non-operational due to theft of copper wire, well failure, or closi ng of a business; 4 projects were found to have inaccurate reading, missing information or imp roper use of electric motor meters for recoding hours of usage; and 2 projects were found to have inaccurate annual usage survey information. In all cases except for the cl osure of a business, observed

deficiencies were resolved and no further action wa s taken by the District. For the 1 project that had a closure of the business, the equ ipment was reposed by creditors and the business entity was no longer viable thus leavi ng no recourse for the District. The project was closed and emissions reductions were no t claimed.

Additionally, 53% of the audited projects reported usages 30% below the contracted usage and 32% of the audited projects were missing annual usage surveys. The reduced usage did not affect the original incentive amounts . Projects were not at the end of their Implementation Phase therefore grantees can run the equipment additional hours for the remainder of agreement to avoid a waiver or return of funds. Projects with missing surveys were monitored and if the grantee failed to submit a survey within 6 months of the due date an inspector was sent out to take a meter reading.

During the 2011 Carl Moyer project specific audits conducted by the District, a total 534 projects were at least 1 year into their project li fe. A 5% random sample of these projects was selected totaling 27 projects. Of which, 2 pro jects were found to have had the associated property sold. In both cases, the Distr ict took no further action against the grantee. The projects were closed the projects emi ssions reductions were not claimed.

Additionally, 54% of the audited projects reported usages below the contracted usage on one or more of the engines in the project and 46% o f the audited projects were past due on their annual usage surveys. The reduced usage di d not affect the original incentive amounts for most of the projects. Those that did h ave a reduction in emissions due to reduced usage still had two (2) or more years remai ning of their Implementation Phase. One project had completed its implementation phase and had a reduction in emissions. In this case, it was determined that extending the con tract term would allow the applicant to satisfy all contractual terms. The applicant signe d a contract amendment extending the implementation phase. Projects that were past due on their usage surveys will be monitored to ensure that the grantee submits the an nual usage survey within 6 months of due date. If the project remains delinquent, the D istrict will send a compliance inspector out to take a meter reading. . The following tabl e shows projects that were determined to

be in violation of their contractual terms and the enforcement actions that were taken by

the District.San Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs Table 8: Carl Moyer Program Projects with Contract ual Violations

Project Number Contractual Violation Action Taken

No projects to report

B. Proposition 1B Program Monitoring and Enforcement A ctivities

In January 2007, Governor Schwarzenegger signed Exe cutive Order S-02-07 which highlighted the importance of transparency and acco untability in administering over $40 billion in bond funding approved by California vote rs in 2006. The Executive Order directs all State government entities responsible for expen ding bond proceeds to establish and document a three part accountability structure. In 2008 Department of Finance (DOF) approved the accountability plan that ARB developed for the Proposition 1B Program

which includes:

• Front-end accountability, which defines the criter ia for expending bond funds as

well as the outcomes that the funds are intended to achieve.

• In-progress accountability, which documents action s to ensure projects are staying within scope and cost, and requires semi-annual rep orts to the Department of

Finance.

• Follow up accountability, which requires Program r eview or fiscal audits to ensure expenditures achieved the intended outcomes and wer e consistent with legal requirements.

The District evaluates Proposition 1B equipment pro jects on an ongoing basis though desk reviews of reports and equipment project updat es provided by equipment owners, review of electronic monitoring unit data (as appli cable), site inspections, equipment inspections, review of equipment maintenance and ac tivity logs, and other measures deemed appropriate. In addition, equipment project contracts require that equipment owners permit the District, ARB, DOF, the Bureau of State Audits, or any authorize designees, access during normal business hours, to conduct ongoing evaluations for the purpose of monitoring the program. The following t able shows projects that were

determined to be in violation of their contractual terms and the enforcement actions that were taken by the District.

Table 9: Proposition 1B Program Projects with Cont ractual Violations

Project Number Contractual Violation Action Taken

No projects to reportSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs One applicant participating in this program was pai d, per contract, $50,000 for the purchase of a replacement truck. The District foun d that the truck was not actually purchased by the applicant and District requested t he applicant to refund the incentive funding or to fulfill contractual obligations by pu rchasing the replacement truck. The applicant responded that he/she no longer had funds , refused to return funding or purchase suitable replacement truck. The District filed a case in court against the applicant and received a judgment for $50,000 in Oc tober of 2012.

C. Combustion Systems Improvement of Mobile Engine s Program Monitoring and

Enforcement Activities

The USDA NRCS webpage at http://www.ca.nrcs.usda.gov/programs/eqip/eqip_prog ram_eligibility.html summarizes program eligibility. The guidelines state the foll owing: The Grantee has control of the land for the length of the proposed contract through dee d, lease, or other written authorization. If the Grantee does not own the land, the landowner must give written consent to install, operate, and maintain the practice through the life span of the practice. Engine improvements are covered under Conservation Practic e Standard 372 – Combustion System Improvement, posted on-line in the NRCS Fiel d Office Technical Guide (FOTG)

at: http://efotg.sc.egov.usda.gov/references/public/CA/ 372-std-09-2010.pdf . The CPS 372 practice life is 10 years as described on the F OTG spreadsheet at: http://efotg.sc.egov.usda.gov/references/public/CA/ List_of_Practices_Lifespans_2012- 12_CA_Numeric.xlsx . NRCS incentive program contracts state that if t he tractor is not retained for 10-years then the Grantee will owe a p ro-rated amount back to the NRCS.

With regards to the identification of project audit s, usage reports, inspections, and other project monitoring activities including enforcement actions as required to Section 4.6 of Rule 9610, the Combustion Systems Improvement of Mo bile Engines incentive program is unique from other incentive programs in that NRC S is explicitly prohibited from identifying grantees by name. As directed by the F arm Bill (Food Security Act of 1985 (7 U.S.C. § 608d(2))), NRCS must maintain the confiden tiality of information provided by an agricultural producer participating in the NRCS Com bustion Systems Improvement of Mobile Engines incentive program. The information is exempt from mandatory disclosure and may not be used in judicial or administrative p roceedings without the consent of the person involved. That said, the USDA NRCS is curre ntly reviewing their processes and may in future years be able to provide additional i nformation for purposes of the District’s annual demonstration reports.

VI. INCENTIVE PROGRAM EVALUATION

The District’s incentive programs have been develop ed around several core principles, including cost-effectiveness, integrity, effective program administration, excellent customer service, the efficient use of District res ources, fiscal transparency and public accountability. As a result of these focused effor ts, the District has become a statewide leader in incentive programs with several elements of these programs being held as models for other air districts’ incentive programs throughout California. In fact, the ARBSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

Page 32 2013 Annual Demonstration Report

SIP Credit f or Emission Reductions Generated Through Incentive Programs routinely calls upon the District to administer sta tewide incentive programs on their behalf

and on behalf of other local air districts. Recent examples include administering the Lower Emission School Bus Program on behalf of ARB and 18 other air districts, the statewide Agricultural Utility Terrain Vehicle (UTV ) program and the statewide School Bus Retrofit Program.

The District is regularly audited by independent ou tside agencies including professional accountancy corporations on behalf of the federal g overnment, ARB, the California DOF

and the California Bureau of State Audits. These c omprehensive and rigorous independent audits focus on every aspect of our inc entive programs including District programmatic and fiscal controls. These audits are conducted to ensure that the public

funds to which the District has been entrusted are spent appropriately and in the manner in which they were intended. The District welcomes these opportunities to gain valuable feedback regarding implementation of these critical programs. Periodic evaluations such as these are important tools that the District uses to ensure continuous improvement in operation of these core emission reduction strategi es. Towards that end, the District’s incentive programs were recently audited by ARB and DOF, including a thorough review of several of the District’s largest and most compl ex incentive programs totaling more than $215 million over a four year period. The aud its focused on the District’s implementation of the following programs:

• Carl Moyer Memorial Air Quality Standards Attainme nt Program,

• Air Quality Improvement Program,

• Proposition 1B: Goods Movement Emission Reduction Program,

• Proposition 1B: Lower Emission School Bus Program, and

• Federal Diesel Emission Reductions Act School Bus Program

These audits included an extensive desk review of s pecific projects, a thorough review of District internal programmatic and fiscal policies and procedures, and field validation of projects to ensure that the expected emission reduc tions were being achieved in practice. Overall, the results of the audits confirmed that t he District’s incentive programs are fiscally sound and are “efficiently and effectively achieving their emission reduction objectives.” ARB’s audit report concluded that the District is meeting or exceeding all requirements for the expenditure of funds and comme nded the District for administering the Proposition 1B Lower Emission School Bus Progra m on behalf of 18 other local air districts. However, the District is continually id entifying opportunities to refine its incentive programs and improve the operational efficiency and effectiveness.

The most recent audits of District administered inc entive programs can be found online at http://www.arb.ca.gov/msprog/moyer/audits/2011/san_ joaquin_valley.htmSan Joaquin Valley Unified Air Pollution Control Di strict January 31, 2014

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SIP Credit f or Emission Reductions Generated Through Incentive Programs This page intentionally blank.San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 352013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsVII. SUMMARY OF EMISSION REDUCTIONS AND COST EFFECTIVENESSThe SIP-creditable incentive-based emission reductions represented in this 2013 Annual Demonstration Report are fromincentive projects implemented 1/1/2009 through 5/13/2013. The data represented in these tables willcontinue to beupdated through each annual demonstration report asmore projects are implemented each year. Althoughthe purpose ofDistrict Rule 9610 is to claim SIP credit for incentive-based emission reductions in the Valley through incentive programsadministered by the District, NRCS, or ARB, this 2013 Annual Demonstration Report only claims SIP credit for thoseprograms administered by the District and NRCS. Future annual demonstration reports may include programs administeredby ARB. For the detailed data used to create the following summary tables, refer to the 2013 Annual Demonstration ReportData Sheet, available electronically with this annual demonstration report.Program SummariesThe following table summarizes the total SIP-creditable incentive-based emission reductions generatedthrough incentiveprograms, expressed in tons per year and tons per day, claimed in this 2013 Annual Demonstration Report. This summaryincludes SIP-creditable incentive-based emission reductions claimed through incentive program guidelines identified inSections 3.1 and 3.2 of Rule 9610.Table 10: Total SIP-Creditable Incentive-Based Emission Reductions Generated Through Incentive ProgramsPollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx1103.44 2660.32 4173.72 5680.67 5725.43 4726.75 4015.30 3432.89 2561.94 2472.73 2079.01 1366.10PM36.29 83.56 144.88 206.30 208.10 177.60 162.59 139.15 105.92 102.48 89.06 60.66ROG116.23 236.79 366.02 452.52 453.88 381.83 370.03 364.03 358.05 351.10 283.63 187.79Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx3.027.2911.4315.5615.6912.9511.009.417.026.775.703.74PM0.100.230.400.570.570.490.450.380.290.280.240.17ROG0.320.651.001.241.241.051.011.000.980.960.780.51San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 362013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsTables 11 and 12 below are the subsets of the summary provided in Table 10. Table 9 identifies emission reductionsclaimed through incentive program guidelines pursuant to Section 3.1 of Rule 9610. Table 10 identifies emission reductionsclaimed through incentive program guidelines pursuant to Section 3.2 of Rule 9610.Table 11: Emission Reductions Claimed through useof Incentive Program Guidelines Pursuant to Section3.1PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx1086.37 2643.25 4151.00 5597.52 5642.28 4643.61 3932.15 3349.74 2478.79 2389.58 1996.21 1283.30PM35.72 82.98 143.96 202.37 204.18 173.68 158.67 135.22 101.99 98.56 85.16 56.75ROG114.60 235.17 364.05 444.22 445.58 373.53 361.73 355.73 349.75 342.80 275.36 179.52Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx2.98 7.24 11.37 15.34 15.46 12.72 10.77 9.186.796.55 5.47 3.52PM0.10 0.23 0.39 0.55 0.56 0.48 0.43 0.370.280.27 0.23 0.16ROG0.31 0.64 1.00 1.22 1.22 1.02 0.99 0.970.960.94 0.75 0.49Table 12: Emission Reductions Claimed through useof Incentive Program Guidelines Pursuant to Section3.2PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx17.06 17.06 22.72 83.15 83.15 83.15 83.15 83.15 83.15 83.15 82.80 82.80PM0.58 0.58 0.92 3.92 3.92 3.92 3.92 3.92 3.92 3.92 3.91 3.91ROG1.62 1.62 1.97 8.30 8.30 8.30 8.30 8.30 8.30 8.30 8.28 8.28Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.05 0.05 0.06 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23PM0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01ROG0.00 0.00 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 372013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsCost EffectivenessThe table below is a summary of the overall cost effectiveness (expressed as dollars per ton of emissions reduced),including incentive contributions, and total lifetime emission reductions, for District-administered incentive programs claimedin this annual demonstration report that utilized the Carl Moyer and Proposition 1B incentive programguidelines asidentified in Sections 3.1 and 3.2 of Rule 9610. Because each incentive program guideline calculatescost effectivenessdifferently, the cost-effectiveness represented inTable 13 was calculated by first determining the cost effectiveness foreach individual project and then averaging that number for all projects accounted for.Table 13: Summary of District-Administered Incentive ProgramsProject TypeIncentiveContributionProvidedGranteeInvestmentTotal EmissionsReductions(Lifetime tons)CostEffectiveness($/tons)Off-Road MobileEquipmentReplacement/Repower/Retrofit1$35,774,661.59 $28,819,236.24 7,557.19 $4,881.28Agricultural Pump Repower1$25,945,807 $8,035,811 8086.21 $5,185.30New Electric Agricultural Pump1$335,144 $1,463,625 387.81 $1,466.23Trucks Replacement1$89,409,800 $118,119,558 10593.76 $14,051.12Locomotives Repower2$16,919,908 $4,509,370 1805.24 $8,940.96New Off-Road Mobile Equipment2,3$82,822 $193,296 3.94 $20,916.971. SIP-creditable incentive-based emission reductions claimed through incentive program guidelines identified in Section 3.1 of Rule 9610.2. SIP-creditable incentive-based emission reductions claimed through incentive program guidelines identified in Section 3.2 of Rule 9610.3. New Off-Road Mobile Equipment is specific to the new purchase of electric large spark ignition (LSI) forklifts.Carl Moyer Incentive Program GuidelinesThe following set of tables summarize the amount ofemission reductions claimed in the SIP under Rule9610 for incentiveprograms administered by the District using the Carl Moyer Incentive Program Guidelines. Table 14 summarizes the totalSIP-creditable incentive-based emission reductionsclaimed under Sections 3.1 and 3.2 of Rule 9610.Tables 13 through16 summarize the emission reductions claimed in theSIP from incentive program guidelines identified in Section 3.1 of Rule9610, while Table 19 summarizes emission reductionsclaimed in the SIP for locomotive alternative technology switchersprojects and new electric forklift purchases, pursuant to Section 3.2 of the rule.San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 382013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsTable 14: Total Claimed SIP-Creditable Incentive-Based Emission Reductions Using the Carl Moyer GuidelinesPollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx865.21 1179.70 1568.04 2105.04 2111.29 1203.82 1064.54 1003.99 951.86 901.84 654.55 607.64PM22.52 31.19 46.24 69.27 69.84 47.87 45.07 43.46 40.90 38.64 30.65 28.43ROG96.41 124.29 170.21 236.49 237.84 165.80 154.00 148.00 142.02 135.07 87.41 84.26Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx2.37 3.23 4.30 5.77 5.78 3.30 2.92 2.75 2.61 2.47 1.79 1.66PM0.06 0.09 0.13 0.19 0.19 0.13 0.12 0.12 0.11 0.11 0.08 0.08ROG0.26 0.34 0.47 0.65 0.65 0.45 0.42 0.41 0.39 0.37 0.24 0.23Table 15: SIP-Creditable Incentive-Based EmissionReductions for Off-Road Compression-Ignition EquipmentReplacement Claimed Pursuant to Section 3.1PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx0.00 0.00 170.33 469.96 484.47 484.47 484.47 484.47484.47 484.47 484.47 484.47PM0.00 0.00 7.73 22.81 23.44 23.44 23.44 23.44 23.4423.44 23.44 23.44ROG0.00 0.00 25.47 72.08 73.83 73.83 73.83 73.83 73.8373.83 73.83 73.83Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.00 0.00 0.47 1.29 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33PM0.00 0.00 0.02 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06ROG0.00 0.00 0.07 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 392013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsTable 16: SIP-Creditable Incentive-Based EmissionReductions for Off-Road Compression-Ignition EquipmentRepower and Retrofit Claimed Pursuant to Section 3.1PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx57.54 108.86 158.88 209.04 213.21 205.70 202.80 152.77 105.18 55.17 5.43 0.42PM1.57 4.12 6.38 8.05 8.24 7.94 7.77 6.50 4.18 1.92 0.25 0.00ROG6.30 12.41 19.36 25.51 26.08 25.24 24.85 19.39 13.73 6.78 0.63 0.00Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.16 0.30 0.44 0.57 0.58 0.56 0.56 0.42 0.29 0.15 0.01 0.00PM0.00 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.01 0.01 0.00 0.00ROG0.02 0.03 0.05 0.07 0.07 0.07 0.07 0.05 0.04 0.02 0.00 0.00Table 17: SIP-Creditable Incentive-Based EmissionReductions for Repower of Agricultural Pumps EnginesClaimed Pursuant to Section 3.1PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx790.60 1036.201190.571307.021294.60394.63 258.26 247.75 243.19 243.19 46.00 21.66PM20.38 25.64 30.22 33.45 33.21 11.53 8.90 8.56 8.328.32 2.02 0.89ROG88.49 109.36 122.05 128.72 127.75 56.54 45.13 44.5944.27 44.27 2.79 1.18Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx2.17 2.84 3.26 3.58 3.55 1.08 0.71 0.68 0.67 0.67 0.13 0.06PM0.06 0.07 0.08 0.09 0.09 0.03 0.02 0.02 0.02 0.02 0.01 0.00ROG0.24 0.30 0.33 0.35 0.35 0.15 0.12 0.12 0.12 0.12 0.01 0.00San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 402013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsTable 18: SIP-Creditable Incentive-Based EmissionReductions for Purchase of New Electric Agricultural PumpMotors Claimed Pursuant to Section 3.1PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx0.00 17.57 25.54 35.86 35.86 35.86 35.86 35.86 35.86 35.86 35.86 18.29PM0.00 0.85 0.99 1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.04 0.19ROG0.00 0.91 1.37 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 0.98Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.00 0.05 0.07 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.05PM0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00ROG0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00Table 19: SIP-Creditable Incentive-Based EmissionReductions for Locomotives and New Electric ForkliftPurchase Claimed Pursuant to Section 3.2PollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx17.06 17.06 22.72 83.15 83.15 83.15 83.15 83.15 83.15 83.15 82.80 82.80PM0.58 0.58 0.92 3.92 3.92 3.92 3.92 3.92 3.92 3.92 3.91 3.91ROG1.62 1.62 1.97 8.30 8.30 8.30 8.30 8.30 8.30 8.30 8.28 8.28Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.05 0.05 0.06 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23PM0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01ROG0.00 0.00 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 412013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsProposition 1B Incentive Program GuidelinesThe following table is a summary of incentive-basedemission reductions claimed in the SIP from incentive programsadministered by the District using the Proposition1B incentive program guidelines, as identified in Section 3.1 of Rule 9610.Table 20: SIP-Creditable Incentive-Based EmissionReductions for On-Road TrucksPollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx91.80 668.19 1185.922004.742043.251952.051379.87858.01 39.20 0.00 0.00 0.00PM8.35 20.76 41.43 73.18 74.41 65.89 53.68 31.85 1.180.00 0.00 0.00ROG0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.25 1.83 3.25 5.49 5.60 5.35 3.78 2.35 0.11 0.00 0.00 0.00PM0.02 0.06 0.11 0.20 0.20 0.18 0.15 0.09 0.00 0.00 0.00 0.00ROG0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00San Joaquin Valley Unified Air Pollution Control DistrictJune 20, 2013Page 422013 Annual Demonstration ReportSIP Credit for Emission Reductions Generated Through IncentiveProgramsNRCS Combustion Systems Improvement of Mobile Equipment Incentive Program GuidelinesThe following table provides a summary of the SIP-creditable incentive-based emission reductions claimed in the SIP forincentive projects administered by the NRCS, as identified in Section 3.1 of Rule 9610.Table 21: SIP-Creditable Incentive-Based EmissionReductions for Agricultural EquipmentPollutantEmissions Reduced (tons per year)200920102011201220132014201520162017201820192020NOx145.08 789.92 1353.02 1495.72 1495.72 1495.72 1495.72 1495.72 1495.72 1495.72 1350.65 705.80PM5.35 30.37 54.30 60.64 60.64 60.64 60.64 60.64 60.64 60.64 55.29 30.27ROG19.37 108.54 188.64 207.87 207.87 207.87 207.87 207.87 207.87 207.87 188.50 99.33Emissions Reduced (tons per day)200920102011201220132014201520162017201820192020NOx0.40 2.16 3.71 4.10 4.10 4.10 4.10 4.10 4.10 4.10 3.70 1.93PM0.01 0.08 0.15 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.15 0.08ROG0.05 0.30 0.52 0.57 0.57 0.57 0.57 0.57 0.57 0.57 0.52 0.27Case-By-Case DeterminationsThe following table provides a summary of the SIP-creditable incentive-based emission reductions for incentive projects thathave been approved through a case-by-case process as identified in section 3.2.2 of Rule 9610.Table 22:Summary of Case-By-Case DeterminationsProject NumberTotal Emissions Reductions(Lifetime tons)Cost Effectiveness($/ton)No projects to reportSan Joaquin Valley Unified Air Pollution Control Di strict June 20, 2013

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District Incentive Program Project InformationSan Joaquin Valley Unified Air Pollution Control Di strict June 20, 2013

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