Document ID: EPA-HQ-OAR-2004-0437-0131
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-11-24T05:00Z

BOARD
MEETING
STATE
OF
CALIFORNIA
AIR
RESOURCES
BOARD
CALIFORNIA
ENVIRONMENTAL
PROTECTION
AGENCY
CENTRAL
VALLEY
AUDITORIUM,
SECOND
FLOOR
1001
I
STREET
SACRAMENTO,
CALIFORNIA
THURSDAY,
NOVEMBER
15,
2001
9:
00
A.
M.

JAMES
F.
PETERS,
CSR,
RPR
CERTIFIED
SHORTHAND
REPORTER
LICENSE
NUMBER
10063
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
ii
APPEARANCES
BOARD
MEMBERS
Dr.
Allan
Lloyd,
Chairperson
Dr.
William
Burke
Mr.
Joseph
Calhoun
Mr.
Hugh
Friedman
Dr.
William
Friedman
Mrs.
Barbara
Riordan
Ms.
Dorene
D'Adamo
Supervisor
Mark
DeSaulnier
Mr.
Matthew
McKinnon
STAFF
Mr.
Mike
Kenny,
Executive
Officer
Mr.
Tom
Cackette,
Deputy
Executive
Officer
Mr.
Mike
Scheible,
Deputy
Executive
Officer
Ms.
Lynn
Terry,
Deputy
Executive
Officer
Mr.
Steve
Albu,
Chief,
Engineering
Studies
Branch
Mr.
Robert
Barham,
Assistant
Chief
Mr.
Ranjit
Bhullar,
Manager,
Investigation
and
Certification
Section
Ms.
Sarah
Carter,
Air
Resources
Engineer
Mr.
Greg
Chin,
Air
Resources
Engineer
Mr.
Bob
Cross,
Chief,
Mobile
Source
Control
Division
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
iii
APPEARANCE
CONTINIUED
STAFF
CONTINUED
Mr.
Paul
Hughes,
Manager,
Low­
Emmission
Vehicle
Implementation
Section
Mr.
Tom
Jennings,
Senior
Staff
Counsel
Mr.
Leslie
Krinsk,
Senior
Staff
Counsel
Mr.
Bob
Leonard,
Chief,
Surveillance
Branch,
Compliance
Division
Ms.
Kitty
Martin,
Manager,
Permit
Assistance
Center
Mr.
R.
Neil
Nipper,
Air
Resources
Engineer
Mr.
George
Poppic,
Staff
Counsel
Ms.
Marcelle
Surovick,
Air
Pollution
Specialist
Mr.
Mike
Tollstrup,
Chief,
Project
Assessment
Branch
Mr.
Peter
Venturini,
Chief,
Stationary
Source
Division
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
iv
INDEX
PAGE
Pledge
of
Allegiance
1
Roll
Call
1
Comments
by
Chairperson
Lloyd
2
Item
01­
9­
1
2
Chairperson
Lloyd
2
Executive
Officer
Kenny
5
Air
Pollution
Specialist
Surovick
6
Questions
and
Answers
26
Air
Resources
Engineer
Chin
38
Loren
Kaye
49
Ralph
Ordonez
51
Susannah
Churchill
53
Stan
Zwicker
61
Sheryl
Carter
74
Todd
Campbell
87
Bonnie
Holmes­
Gen
92
Valerie
Gates
97
Eric
Wesselman
103
Matha
Arguello
109
S.
N.
Prakash
111
Tim
French
118
Chuck
Solt
134
Karl
Stoffers
139
Joan
Lee
141
Mohsen
Nazemi
143
Bud
Beebe
151
Discussion
163
Motion
168
Vote
168
Afternoon
Session
170
Item
01­
9­
2
170
Executive
Officer
Kenny
170
Air
Resources
Engineer
Carter
171
Discussion
and
Questions
and
Answers
182
Greg
Dana
185
Pete
Hardigan
193
Motion
199
Vote
199
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
v
INDEX
Item
01­
9­
3
199
Chairperson
Lloyd
199
Executive
Officer
Kenny
200
Investigation
and
Certification
Manager
Bhullar
201
Rosa
Salcedo
211
Donald
Gilson
214
Maryann
Gonzalez
216
Sandra
Duval
219
Skip
Orr
226
Motion
227
Vote
227
Item
01­
9­
4
228
Questions
and
Answers
228
Motion
232
Vote
233
Adjournment
233
Reporter's
Certificate
234
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
1
1
PROCEEDINGS
2
CHAIRPERSON
LLOYD:
Good
morning.
November
15th,

3
2001
public
meeting
of
the
Air
Resources
Board
will
now
4
come
to
order.
Ms.
D'Adamo,
will
you
please
lead
us
in
5
the
Pledge
of
Allegiance.

6
(
Thereupon
the
Pledge
of
Allegiance
was
7
recited
in
unison.)

8
CHAIRPERSON
LLOYD:
Will
the
Clerk
of
the
Board
9
please
call
the
roll.

10
BOARD
CLERK
KAVAN:
Dr.
Burke?

11
BOARD
MEMBER
BURKE:
Here.

12
BOARD
CLERK
KAVAN:
Mr.
Calhoun?

13
BOARD
MEMBER
CALHOUN:
Here.

14
BOARD
CLERK
KAVAN:
Ms.
D'adamo?

15
BOARD
MEMBER
D'ADAMO:
Here.

16
BOARD
CLERK
KAVAN:
Supervisor
DeSaulnier?

17
BOARD
MEMBER
DeSAULNIER:
Here.

18
BOARD
CLERK
KAVAN:
Professor
Friedman?

19
BOARD
MEMBER
HUGH
FRIEDMAN:
Here.

20
BOARD
CLERK
KAVAN:
Dr.
Friedman?

21
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Here.

22
BOARD
CLERK
KAVAN:
Mr.
McKinnon?

23
Supervisor
Patrick?

24
Mrs.
Riordan?

25
BOARD
MEMBER
RIORDAN:
Here.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
2
1
BOARD
CLERK
KAVAN:
Supervisor
Roberts?

2
Chairman
Lloyd.

3
CHAIRPERSON
LLOYD:
Here.

4
Just
a
few
comments
before
we
go
into
today's
5
board
meeting.
Apparently,
we
may
be
subject
to
some
6
power
interruptions
in
this
building.
And
if
we
do,

7
apparently,
what
make
a
sound
like
gunfire
might
come
8
through,
cracking
through,
so
people
should
remain
calm.

9
Don't
drop
to
the
floor,
but
just
be
warned
and
so
there's
10
a
caveat
upfront
there.

11
I'd
also
draw
­­
most
of
the
Board
Members
have
12
got
a
copy
of
the
Health
and
Clean
Air
Newsletter.
If
you
13
haven't,
this
is
now
out.

14
The
other
one
I
would
also
like
to
acknowledge
15
and
say
I
had
the
privilege
last
month
of
attending
the
16
Clean
Air
Technologies
Conference
at
the
South
Coast
AQMD
17
under
Dr.
Burke's
leadership
and
organization.
And
I
will
18
say
that
I
thought
it
was
an
excellent
conference.
And,

19
Dr.
Burke,
you
are
to
be
congratulated
and
your
staff,

20
very
good.

21
We'll
go
straight
into
the
first
item.
I
would
22
like
to
remind
­­
this
is
agenda
Item
01­
9­
1.
Again,
as
a
23
caveat,
I
would
like
to
remind
anyone
in
the
audience
who
24
wishes
to
testify
on
today's
items,
please
sign
up
with
25
the
Clerk
of
the
Board.
If
you
have
a
written
statement
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
3
1
also,
please
give
30
copies
to
the
Board
Clerk.

2
The
first
Item
is
01­
9­
1,
Proposed
Regulations
3
for
Distributed
Generation
Power
Units
and
Proposed
4
Guidelines
for
the
District
Permitting
of
Electrical
5
Generation
Sources.

6
So
just
a
reminder
for
people
testifying
and
just
7
to
the
Board
members,
we
actually
have
two
items
covered
8
hundred,
one
a
guideline
and
one
a
regulatory
item.
So
I
9
would
appreciate
when
people
testify
to
make
clear
what
10
aspect
you're
discussing,
so
that,
in
fact,
it
will
help
11
us
keep
them
separate.

12
The
first
matter
concerns
small
power
sources
13
located
at
one's
home
or
office
that
generate
electricity
14
for
the
direct
use
of
those
persons
or
facilities.

15
On­
site
distributed
generation
avoids
the
line
loss
16
associated
with
transmission
from
central
power
stations,

17
and
therefore
has
the
potential
to
be
highly
efficient
and
18
also
reliable.
When
the
waste
heat
captured
and
used
to
19
make
hot
water
the
efficiency
of
DG
goes
up
even
more.

20
As
my
colleagues
already
know,
there's
huge
21
interest
in
DG
as
a
power
source
in
California
nationally
22
and
around
the
world.
The
California
Energy
Commission
is
23
very
enthusiastic
about
these
technologies
and
will
be
24
testifying
later
on
this
item.

25
Our
job
is
to
manage
and
control
any
air
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
4
1
pollution
that
may
be
emitted
from
emerging
DG
2
technologies.
Accordingly,
we
are
here
to
consider
new
3
emission
standards
for
distributed
generation,
plus
a
4
certification
program
to
allow
the
sale
of
DG
units
in
5
California.

6
There's
a
wide
range
of
technology
that
can
be
7
used
for
DG
including
photovoltaics,
fuel
cells,

8
microturbines
and
small
engines.
Some
of
these
are
zero
9
emitting,
others
are
combustion
based
and
need
to
be
10
controlled.

11
And
added
benefit
also
of
distributed
generation,

12
if
the
central
power
station
goes
down,
in
fact,
you
don't
13
lose
power
regionally,
so
this
is
­­
in
these
times,

14
particularly,
this
is
an
added
benefit.

15
The
second
matter
before
the
Board
is
actually
16
something
we
started,
and
that's
my
first
year
on
the
job,

17
in
June
of
1999,
this
Board
adopted
guidelines
for
the
18
permitting
of
powerplants
more
man
50
megawatts
in
size.

19
Today,
we
are
considering
guidelines
for
small
and
20
medium­
sized
powerplants
below
that
threshold,
everything
21
from
zero
to
50
megawatts.

22
For
the
past
several
months
these
small
and
23
intermediate
projects
have
been
handled
on
a
case­
by­
case
24
basis
by
local
districts
with
lots
of
input
from
our
25
staff.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
5
1
Expanding
our
guidance
to
include
powerplants
in
2
this
size
range
will
make
the
whole
process
more
3
consistent
and
more
efficient.

4
Again,
before
turning
things
over
to
our
staff,
I
5
would
like
to
express
my
appreciation
to
the
6
representatives
from
the
affected
industries,

7
environmental
groups,
utilities
and
air
pollution
control
8
districts
for
the
assistance
they
have
provided
us
in
the
9
development
of
the
DG
regulation
and
the
new
powerplant
10
guidelines.

11
At
this
point,
I'd
like
to
turn
it
over
to
Mr.

12
Kenny
to
begin
the
staff
presentation.

13
EXECUTIVE
OFFICER
KENNY:
Thank
you,
Mr.
Chairman
14
and
Members
of
the
Board.
The
California
distributed
15
generation
and
certification
program
was
created
by
Senate
16
Bill
1298,
by
Senator
Bowen.

17
SB
1298
focuses
on
electrical
generation
near
the
18
place
of
use
and
defines
those
sources
as
distributed
19
generation.
The
proposed
certification
program
affects
20
electrical
generation
technologies
that
are
exempt
from
21
air
pollution
control
or
air
quality
management
district
22
permitting
requirements.
The
statute
also
directs
the
Air
23
Resources
Board
to
issue
guidance
to
districts
on
the
24
permitting
of
electrical
generation
technologies
under
25
their
regulatory
jurisdiction.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
6
1
This
category
includes
certain
DG
units,
peakers
2
and
small­
to
medium­
sized
central
station
powerplants.

3
As
Chairman
Lloyd
indicated,
the
Board
has
already
issued
4
guidelines
for
the
permitting
of
major
powerplants,

5
meaning
those
that
produce
50
megawatts
or
more.
That
was
6
done
in
June
of
1999.

7
At
this
point,
I'd
like
to
turn
it
over
to
Ms.

8
Surovick
and
Mr.
Chin
who
will
present
our
proposals.
Ms.

9
Surovick
will
begin
with
an
overview
of
distributed
10
generation
and
followed
with
the
proposed
emission
11
standards
and
certification
requirements.

12
Mr.
Chin
will
then
discuss
the
proposed
guidance
13
for
the
district
permitting
of
electrical
generation
14
sources
that
are
not
to
be
certified
by
the
Board.

15
Ms.
Surovick.

16
AIR
POLLUTION
SPECIALIST
SUROVICK:
Thank
you,

17
Mr.
Kenny.
Good
morning,
Chairman
Lloyd
and
Members
of
18
the
Board.

19
(
Thereupon
an
overhead
presentation
was
20
presented
as
follows.)

21
AIR
POLLUTION
SPECIALIST
SUROVICK:
Members
of
22
the
Board,
Senate
Bill
1298
authored
by
Senator
Debra
23
Bowen
and
signed
on
September
25th,
2000
by
Governor
Gray
24
Davis
requires
the
ARB
to
establish
a
certification
25
program
for
DG
technologies
that
are
not
subject
to
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
2345
7
1
district
permitting.

2
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Can
we
make
it
3
louder,
please.

4
AIR
POLLUTION
SPECIALIST
SUROVICK:
SB
1298
also
5
requires
the
ARB
to
develop
a
guidance
document
for
the
6
districts
to
use
in
the
permitting
of
electrical
7
generation
technologies
that
are
under
their
jurisdiction.

8
The
remainder
of
my
presentation
will
focus
on
SB
9
1298'
s
first
requirement,
the
certification
program.
My
10
presentation
will
be
about
20
minutes
long
and
then
I'll
11
turn
it
over
to
Mr.
Chin
so
that
he
can
spend
about
ten
12
minutes
discussing
SB
1298'
s
second
requirement,
the
13
proposed
guidance
document
for
districts.

14
­­
o0o­­

15
AIR
POLLUTION
SPECIALIST
SUROVICK:
In
my
16
presentation
today,
I
will
summarize
the
purpose
and
17
requirements
of
SB
1298
and
explain
what
distributed
18
generation
or
DG
is.
I'll
then
explain
how
the
staff
19
developed
the
proposed
DG
certification
program
and
20
summarized
the
requirements
of
the
program.
Next,
I'll
21
discuss
the
environmental
and
economic
impacts
and
the
22
staff's
proposed
modifications.

23
And
finally,
I'll
conclude
with
a
summary
and
24
staff's
recommendations.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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8
1
AIR
POLLUTION
SPECIALIST
SUROVICK:
I'll
now
2
summarize
the
requirements
of
SB
1298.

3
­­
o0o­­

4
AIR
POLLUTION
SPECIALIST
SUROVICK:
The
purpose
5
of
SB
1298
was
to
encourage
the
employment
of
DG
6
technology
in
a
way
that
has
a
positive
effect
on
air
7
quality.
On
the
energy
production
basis,
that
is
on
a
8
pound
of
emissions
per
kilowatt
hour
of
electricity
9
produced
emissions
from
some
DG
units
can
be
as
much
as
an
10
order
of
magnitude
higher
than
emissions
from
central
11
station
powerplants.

12
SB
1298
was
created
to
ensure
the
deployment
of
13
only
the
cleanest
DG
technology
in
California.

14
­­
o0o­­

15
AIR
POLLUTION
SPECIALIST
SUROVICK:
SB
1298
16
requires
the
ARB
to
adopt
a
certification
program
for
DG
17
units
that
are
not
subject
to
district
permitting
18
requirements.
The
program
must
include
uniform
emission
19
standards
for
these
units.
The
ARB
has
the
authority
to
20
adopt
these
standards
because
the
units
do
not
fall
under
21
district
or
U.
S.
EPA
jurisdiction.
The
certification
22
program
and
emission
standards
must
be
adopted
by
January
23
1,
2003.
I
will
address
the
details
of
the
proposed
24
certification
program
a
little
bit
later
in
my
25
presentation.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
9
1
SB
1298
requires
two
stages
of
emission
standards
2
that
must
be
expressed
in
pounds
per
megawatt
hour.
The
3
first
stage
of
the
standards
must
reflect
the
best
4
performance
achieved
and
practiced
by
existing
DG
5
technologies
that
are
exempt
from
district
permits.
The
6
law
also
requires
that
by
the
earliest
practicable
date
7
the
standards
be
made
equivalent
to
the
level
determined
8
by
the
ARB
to
be
the
Best
Available
Control
Technology
or
9
BACT,
for
permitted
central
station
powerplants
in
10
California.

11
SB
1298
also
requires
the
ARB
to
approve
a
12
guidance
document
for
the
districts
to
use
in
the
13
permitting
of
electrical
generation
technologies
that
are
14
under
their
jurisdiction.
As
I
mentioned
in
my
15
introduction,
Grant
Chin
will
discuss
the
district
16
guidance
after
I
finish
my
presentation.

17
­­
o0o­­

18
AIR
POLLUTION
SPECIALIST
SUROVICK:
Because
19
distributed
generation
is
a
relatively
new
concept
to
most
20
of
us,
I
will
now
provide
some
detailed
background
21
information
on
what
DG
is.

22
­­
o0o­­

23
AIR
POLLUTION
SPECIALIST
SUROVICK:
DG
is
24
electricity
near
the
source
of
use.
It's
likely
that
most
25
DG
is
being
considered
as
a
supplement
to
grid
supplied
PETERS
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10
1
electricity.
However,
the
increasing
availability
and
2
reliability
of
grid
supplied
electricity
and
DG's
relative
3
newness
and
cost
make
it
difficult
to
predict
the
extent
4
to
which
DG
will
be
installed
in
California.

5
To
date,
only
a
few
DG
units
that
are
not
subject
6
to
district
permitting
requirements
are
currently
7
operating
in
California.
These
units
are
primarily
8
demonstration
projects
and
being
evaluated
at
research
9
facilities
and
other
sites.

10
The
South
Coast
Air
Quality
Management
District
11
is
distributing
150
microturbines
throughout
its
12
jurisdiction.
Eight
stationary
fuel
cells
are
currently
13
operating
in
California.
These
units
are
located
at
US
14
Department
of
Defense
facilities
and
are
undergoing
15
evaluation
by
utility
companies.

16
Often
DG
units
are
integrated
with
waste
heat
17
recovery
systems,
also
referred
to
as
combining
heat
and
18
power
or
CHP.
A
DG
unit
with
CHP
can
produce
electricity
19
and
recover
the
waste
heat
from
the
electrical
generation
20
process.

21
For
example,
the
recovered
waste
heat
can
be
used
22
by
a
hotel
or
hospital
to
heat
water
for
showers
and
23
physical
therapy
spas.
I'll
briefly
show
you
some
24
pictures
of
DG
units
so
that
you
can
get
a
better
idea
of
25
their
size
and
typical
applications.

PETERS
SHORTHAND
REPORTING
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916)
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11
1
­­
o0o­­

2
AIR
POLLUTION
SPECIALIST
SUROVICK:
Here
are
3
several
pictures
of
30
kilowatt
microturbines
as
it
is
4
undergoing
independent
testing
by
the
staff
of
the
ARB.

5
To
put
kilowatts
into
perspective,
a
Raley's
Superstore
6
requires
about
150
to
200
kilowatts.

7
This
unit
was
placed
at
the
Sacramento
Municipal
8
Utility
District
SMUD
office
as
part
of
a
demonstration
9
program.
To
give
you
an
idea
of
the
physical
size
of
this
10
unit,
you
can
see
a
black
laptop
computer
in
the
center
11
picture
near
the
bottom
of
the
microturbine.
We
wish
to
12
thank
Mr.
Bud
Beebe
of
SMUD
and
ARB's
testing
staff
who
13
participated
in
the
nighttime
testing.

14
­­
o0o­­

15
AIR
POLLUTION
SPECIALIST
SUROVICK:
This
is
a
16
picture
of
a
200
kilowatt
fuel
cell
that
is
located
at
the
17
South
Coast
Air
Quality
Management
District's
office
in
18
Diamond
Bar.
This
unit
was
placed
at
the
district
office
19
by
the
Southern
California
Gas
Company
as
part
of
a
20
demonstration
program.

21
­­
o0o­­

22
AIR
POLLUTION
SPECIALIST
SUROVICK:
As
you
can
23
see
from
the
picture
on
the
right,
the
roof
of
the
8th
24
floor
of
our
CalEPA
building
has
about
730
photovoltaic
or
25
PV
panels,
a
total
generating
capacity
of
30
kilowatts.

PETERS
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12
1
In
addition
to
panels,
PV
can
be
incorporated
2
into
roofing
tiles.
The
picture
on
the
left
shows
PV
3
tiles
and
might
be
installed
on
a
roof.

4
­­
o0o­­

5
AIR
POLLUTION
SPECIALIST
SUROVICK:
This
is
a
6
picture
of
several
wind
units
that
are
part
of
a
500
7
kilowatt
installation
located
at
San
Clemente
Island
off
8
the
shore
of
southern
California.

9
­­
o0o­­

10
AIR
POLLUTION
SPECIALIST
SUROVICK:
The
picture
11
on
your
left
is
a
25
kilowatt
Sterling
cycled
external
12
combustion
engine.
Heat
is
provided
outside
this
type
of
13
engine
to
move
a
piston.
The
picture
on
the
right
shows
14
an
external
combustion
engine
integrated
with
PV.

15
­­
o0o­­

16
AIR
POLLUTION
SPECIALIST
SUROVICK:
DG
sources
17
have
the
potential
of
being
placed
closer
to
residential
18
areas
than
central
station
powerplants.
Consequently,
the
19
noise
level
of
DG
technologies
can
be
a
consideration
for
20
potential
users.

21
As
shown
in
the
upper
left
during
site
visits
and
22
source
testing,
ARB
staff
had
to
wear
ear
protection
while
23
some
DG
units
were
operating.
In
the
picture
on
the
24
right,
you
can
see
noise
dampening
materials
that
some
25
manufacturers
can
apply
to
their
DG
units.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
13
1
­­
o0o­­

2
AIR
POLLUTION
SPECIALIST
SUROVICK:
This
table
3
provides
a
comparison
of
the
noise
emissions
from
DG
4
relative
to
the
European
noise
standard
for
electrical
5
generation
technologies
and
US
noise
ordinances.
It
is
6
important
to
point
out
that
this
noise
emissions
data
was
7
not
necessarily
obtained
according
to
a
standardized
8
method.

9
However,
to
put
some
of
these
numbers
into
10
perspective,
a
kitchen
garbage
disposal
reading
at
three
11
feet
is
about
80
decibels.

12
­­
o0o­­

13
AIR
POLLUTION
SPECIALIST
SUROVICK:
In
addition
14
to
the
typical
emissions
that
are
the
subject
of
district
15
permitting
requirements,
DG
units
can
also
be
a
source
of
16
greenhouse
gases.

17
Greenhouse
gas
emissions
including
CO2
and
18
methane
are
generally
higher
than
DG
units,
are
generally
19
higher
from
DG
units
than
from
central
station
20
powerplants.

21
The
yellow
line
on
this
chart
represents
CO2
22
emissions
from
a
new
combined
cycle
central
station
23
powerplants.
You
will
hear
us
mention
combined
cycle
many
24
times
this
morning.
Simply
defined,
a
combined
cycle
25
turbine
captures
waste
heat
from
the
primary
combuster
to
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14
1
produce
additional
electricity.

2
CO2
emissions
from
engines,
fuel
cells
and
3
microturbines
with
and
without
CHP
are
shown
in
the
bars.

4
As
can
be
seen,
efficient
CHP
can
reduce
this
CO2
5
emissions
from
DG
units.

6
However,
even
with
CHP,
a
microturbine
still
has
7
higher
emissions
than
a
central
station
powerplant.

8
­­
o0o­­

9
AIR
POLLUTION
SPECIALIST
SUROVICK:
A
comparison
10
from
methane
emissions
is
presented
here.
The
yellow
line
11
in
this
bar
chart
represents
methane
emissions
from
a
new
12
combined
cycle
central
station
powerplant.
The
bar
on
13
your
left
is
for
fuel
cells.
The
other
is
for
14
microturbines.
An
engine
would
have
methane
emissions
15
about
60
times
higher
than
the
microturbine
use
for
this
16
illustration.

17
­­
o0o­­

18
AIR
POLLUTION
SPECIALIST
SUROVICK:
Another
piece
19
of
background
information
that
we
are
presenting
today
20
relates
to
the
installed
cost
of
DG.
These
costs
do
not
21
include
site­
specific
fuel
or
electricity
prices,
tax
22
rebates
and
other
incentives
or
incorporate
consideration
23
of
the
useful
life
of
the
equipment.
As
you
can
see
from
24
this
slide,
the
installed
costs
per
kilowatt
for
DG
is
25
generally
much
higher
than
for
central
station
PETERS
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15
1
powerplants.

2
As
was
mentioned
earlier,
integrating
CHP
with
DG
3
can
increase
its
cost
attractiveness
by
avoiding
the
need
4
to
purchase
water
heaters
that
would
otherwise
provide
the
5
hot
water.

6
­­
o0o­­

7
AIR
POLLUTION
SPECIALIST
SUROVICK:
I
will
now
8
provide
and
overview
of
the
steps
that
the
staff
took
to
9
develop
the
proposal
that
is
before
you
today.

10
­­
o0o­­

11
AIR
POLLUTION
SPECIALIST
SUROVICK:
In
developing
12
the
proposed
DG
program,
staff
talked
to
potentially
13
affected
manufacturers
and
others
to
gain
an
understanding
14
of
the
various
uses
of
these
technologies.
Staff
also
15
obtained
information
from
manufacturers
on
the
number
of
16
units
they
have
placed
in
California
or
expect
to
place
in
17
the
near
future.
Staff
also
elected
and
evaluated
18
available
emissions
data
from
manufacturers.

19
­­
o0o­­

20
AIR
POLLUTION
SPECIALIST
SUROVICK:
In
addition
21
to
collecting
emissions
information
from
the
22
manufacturers,
the
ARB
staff
conducted
an
independent
23
source
test
of
a
microturbine.

24
The
ombudsman
will
present
to
you
a
little
later
25
this
morning
a
detailed
report
addressing
the
public
PETERS
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16
1
outreach
activities
that
the
ARB
staff
has
conducted
in
2
the
14
months
since
SB
1298
was
signed
by
Governor
Davis.

3
­­
o0o­­

4
AIR
POLLUTION
SPECIALIST
SUROVICK:
SB
1298
5
requires
that
the
emission
standards
for
the
certification
6
program
ultimately
be
equivalent
to
BACT
for
central
7
station
powerplants.
As
you
may
know,
district
BACT
8
determinations
must
adhere
to
U.
S.
EPA
prescribed
9
procedures
and
criteria.

10
In
order
to
develop
this
phase
of
the
standards,

11
ARB
staff
used
the
1999
board
approved
district
guidance
12
document
for
central
station
powerplants
sized
50
13
megawatts
or
larger.

14
Staff
used
the
BACT
determinations
in
this
report
15
for
new
central
station
powerplants
with
combined
cycle
16
gas
turbines.
In
developing
standards
that
reflect
BACT
17
for
powerplants,
the
ARB
staff
considered
the
actual
18
electricity
provided
to
consumers.
This
included
the
19
evaluation
of
the
loss
of
electricity
as
it
is
transmitted
20
from
a
central
station
powerplant
to
the
place
of
use.

21
The
California
Energy
Commission
or
CEC
advised
22
the
ARB
staff
that
the
State's
transmission
and
23
distribution
systems
experience
and
average
line
loss
of
24
ten
percent.
Line
loss
can
be
minimized
when
DG
units
are
25
located
at
or
near
the
place
of
use.

PETERS
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17
1
The
staff
also
evaluated
DG
programs
proposed
by
2
other
government
agencies.

3
­­
o0o­­

4
AIR
POLLUTION
SPECIALIST
SUROVICK:
The
staff
5
evaluated
methods
for
recognizing
the
benefits
of
combined
6
heat
and
power
or
CHP.
As
I
mentioned
earlier,
a
DG
unit
7
integrated
with
CHP
produces
electricity
and
captures
8
waste
heat
to
create
hot
water.

9
Without
CHP,
hot
water
would
be
supplied
by
a
10
water
heater
or
a
boiler
which
would
create
additional
air
11
emissions.
With
CHP
a
DG
unit
uses
fuel
more
efficiently
12
and
reduces
the
total
air
emissions
from
a
facility
13
including
greenhouse
gases
such
as
carbon
dioxide.

14
­­
o0o­­

15
AIR
POLLUTION
SPECIALIST
SUROVICK:
I
will
now
16
provide
and
overview
of
the
requirements
of
the
DG
17
certification
program
that
staff
is
proposing
for
the
18
Board's
consideration.

19
­­
o0o­­

20
AIR
POLLUTION
SPECIALIST
SUROVICK:
As
was
21
mentioned
earlier,
the
certification
program
applies
to
22
manufacturers
of
DG
units
that
are
not
subject
to
district
23
permitting
requirements.
ARB
staff
will
assist
24
manufacturers
in
determining
if
their
DG
units
would
be
25
subject
to
district
permitting
requirements.

PETERS
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18
1
Manufacturers
must
certify
units
that
they
plan
to
sell
2
after
January
1,
2003.

3
Units
that
are
operating
before
then
will
not
be
4
required
to
be
retrofitted.
Units
that
would
be
eligible
5
for
our
certification
program
include
engine
size
less
6
than
50
horsepower,
microturbines
less
300
kilowatts
in
7
size,
and
fuel
cells.

8
­­
o0o­­

9
AIR
POLLUTION
SPECIALIST
SUROVICK:
As
required
10
by
SB
1298,
the
first
stage
of
the
standards
must
reflect
11
best
performance
achieved
in
practice
by
existing
DG
12
technologies.
Staff
is
proposing
standards
for
2003
for
13
DG
units
with
and
without
CHP.

14
The
standards
for
units
with
CHP
reflect
the
15
benefits
of
avoiding
emissions
from
boilers
that
would
16
otherwise
be
used
to
produce
hot
water.
These
CHP
units
17
must
be
able
to
achieve
a
minimum
efficiency
of
60
percent
18
for
conversion
of
fuel
to
usable
energy.
Provisions
have
19
also
been
included
to
recognize
the
benefits
of
20
integrating
DG
units
with
zero
emission
technologies,
such
21
as
wind
turbines,
PV
and
nonreformer
based
fuel
cells.

22
­­
o0o­­

23
AIR
POLLUTION
SPECIALIST
SUROVICK:
DG
units
sold
24
after
January
1,
2007
must
be
certified
to
the
2007
25
emission
standards,
which
reflect
BACT
for
central
station
PETERS
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19
1
powerplants
after
an
adjustment
for
line
loss.
DG
units
2
operating
before
January
1,
2007
will
not
have
to
be
3
certified
to
the
new
limits
nor
will
they
have
to
be
4
retrofitted
to
meet
the
new
standards.

5
Like
the
standards
we
are
proposing
for
2003,
we
6
have
also
proposed
provisions
to
recognize
the
benefits
of
7
efficient
CHP.

8
­­
o0o­­

9
AIR
POLLUTION
SPECIALIST
SUROVICK:
The
10
provisions
include
a
simple
calculation
that
the
11
manufacturer
can
use
to
obtain
credit
for
the
heat
12
recovered
from
a
CHP
application.

13
­­
o0o­­

14
AIR
POLLUTION
SPECIALIST
SUROVICK:
This
slide
15
shows
a
comparison
of
the
2003
and
2007
standards
for
NOx
16
emissions.
The
red
line
on
the
top
indicates
the
2003
17
standard,
and
the
yellow
line
indicates
the
2007
standard.

18
The
bar
on
the
left
represents
new
permitted
19
central
station
powerplant
emissions.
As
was
mentioned
20
earlier,
the
2007
standard
reflects
central
station
21
powerplant
emissions
with
an
adjustment
for
line
loss.

22
The
three
bars
on
the
right
indicate
that
23
microturbines
reciprocating
engines
and
fuel
cells
can
24
meet
the
2003
standard.
In
order
to
meet
the
2007
25
standards
manufacturers
will
be
required
to
add
on
air
PETERS
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20
1
pollution
control
equipment,
perform
combustion
2
modifications,
increase
overall
efficiencies
and/
or
3
integrate
efficient
CHP.

4
However,
fuel
cells
have
demonstrated
that
they
5
can
currently
meet
the
2007
standard.

6
­­
o0o­­

7
AIR
POLLUTION
SPECIALIST
SUROVICK:
This
slide
8
shows
the
variation
of
NOx
emissions
for
different
power
9
production
loads
for
two
different
microturbines.
The
10
yellow
line
represents
the
proposed
2003
emission
11
standard.
The
red
line
shows
the
emission
levels
for
one
12
microturbine
at
100
percent
load,
75
percent
load
and
50
13
percent
load.

14
The
black
line
shows
the
emission
levels
for
15
another
microturbine
for
the
same
loads.
As
can
be
seen,

16
the
power
load
can
effect
NOx
emissions
and
can
vary
among
17
models.
For
this
reason
the
testing
parameters
for
the
18
certification
program
require
multiple
load
testing.

19
­­
o0o­­

20
AIR
POLLUTION
SPECIALIST
SUROVICK:
Manufacturers
21
seeking
certification
must
submit
an
application
package
22
that
contains
an
emissions
test
report
and
information
23
demonstrating
the
ability
of
the
DG
unit
to
maintain
24
emission
standards
for
15,000
hours.
Other
requirements
25
include
labeling
and
record
keeping
requirements
for
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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21
1
manufacturers
and
enforcement
and
penalty
provisions.

2
SB
1298
allows
the
ARB
to
recover
the
cost
of
3
administering
this
program.
Thus,
staff
is
proposing
a
4
$
2,500
application
fee.
Staff
is
proposing
certifications
5
be
valid
for
four
years.

6
­­
o0o­­

7
AIR
POLLUTION
SPECIALIST
SUROVICK:
During
the
8
development
of
the
DG
program,
staff
identified
several
9
ways
to
recognize
the
benefits
of
using
clean
and
10
efficient
DG
in
California.
Staff
is
proposing
provisions
11
to
allow
manufacturers
of
zero
emission
technologies
to
12
seek
voluntary
certification.
Some
of
these
manufacturers
13
may
want
to
seek
ARB
certification
for
marketing
purposes.

14
To
provide
and
economic
incentive
for
the
cleanest
15
technologies,
zero
emission
technologies
that
are
seeking
16
voluntary
certification
will
not
be
assessed
a
fee.

17
For
the
same
reason
that
DG
can
meet
the
2007
18
standards
by
2003
will
have
the
2003
certification
fee
19
waived.

20
­­
o0o­­

21
AIR
POLLUTION
SPECIALIST
SUROVICK:
Efficient
DG
22
is
encouraged
indirectly
by
the
fact
that
the
proposed
23
emission
standards
are
expressed
on
a
pounds
per
megawatt
24
hour
basis.

25
In
addition,
staff
included
provisions
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
22
1
recognize
the
benefits
of
efficient
CHP
for
both
the
2003
2
and
2007
standards.
Provisions
are
also
proposed
to
3
recognize
the
benefits
of
integrating
DG
with
zero
4
emission
technologies.
Encouraging
the
efficient
5
conversion
of
fuel
to
usable
energy,
recognizing
the
6
benefits
of
CHP
and
facilitating
the
acceptance
of
zero
7
emission
technologies
assist
in
the
efforts
to
reduce
8
emissions
of
greenhouse
gases,
particularly
CO2.

9
­­
o0o­­

10
AIR
POLLUTION
SPECIALIST
SUROVICK:
Staff
is
11
proposing
to
complete
another
technical
review
of
DG
12
technologies
and
emissions
data
and
report
their
findings
13
to
the
Board
by
July
2005.
We
are
proposing
this
review
14
because
DG
is
just
beginning
to
enter
the
market
and
its
15
future
operating
conditions
and
uses
are
uncertain
at
this
16
time.

17
Staff
will
evaluate
the
testing
procedures
in
the
18
regulation
to
determine
if
they
should
be
refined,

19
evaluate
the
ability
of
DG
technologies
to
maintain
20
emission
standards
over
time
and
evaluate
the
methods
used
21
to
recognize
CHP
benefits
for
the
2007
standards.

22
Staff
will
also
evaluate
the
2007
standards
in
23
light
of
any
new
BACT
determinations
for
central
station
24
powerplants,
changes
to
DG
technology
designs
and
related
25
information
that
could
have
a
bearing
on
the
2007
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
23
1
standards.

2
­­
o0o­­

3
AIR
POLLUTION
SPECIALIST
SUROVICK:
I
will
now
4
discuss
the
environmental
and
economic
impacts
of
the
5
proposed
DG
certification
program.

6
­­
o0o­­

7
AIR
POLLUTION
SPECIALIST
SUROVICK:
The
8
certification
program
and
uniform
emission
standards
will
9
ensure
the
deployment
of
the
cleanest
DG
technology
into
10
all
communities
of
California.
Setting
standards
for
DG
11
before
it
enters
the
market
will
help
protect
all
12
California
communities
for
these
new
sources
of
air
13
emissions.

14
Staff
conducted
an
analysis
of
the
potential
15
environmental
impacts
of
the
proposed
DG
Regulation
and
16
determined
that
its
requirements
would
have
no
significant
17
adverse
environmental
impacts.
Staff
evaluated
the
18
economic
impacts
that
the
proposed
DG
program
may
have
on
19
potentially
affected
businesses.
Costs
to
a
manufacturer
20
for
developing
a
complete
application
package
for
one
DG
21
unit
model
ranges
from
about
$
10,000
to
$
20,000,
this
22
includes
the
$
2,500
application
fee,
the
cost
for
23
preparing
the
application
and
the
cost
for
source
testing.

24
These
costs,
of
course,
would
be
spread
over
the
25
multiple
sales
of
a
particular
DG
model.
Manufacturers
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
24
1
are
expected
to
be
able
to
meet
the
2003
emission
2
standards
with
current
designs
or
redesigns
that
are
3
currently
underway.

4
However,
to
meet
the
2007
standards,
some
5
manufacturers
of
DG
will
have
to
redesign
their
product
or
6
add
on
air
pollution
control
equipment.
The
additional
7
cost
to
manufacturers
for
these
modifications
is
unknown
8
at
this
time,
and
will
be
evaluated
during
the
2005
9
technical
review
when
more
information
on
DG
becomes
10
available.

11
­­
o0o­­

12
AIR
POLLUTION
SPECIALIST
SUROVICK:
I
will
now
13
discuss
the
staff's
proposed
modifications
to
the
DG
14
certification
program.

15
­­
o0o­­

16
AIR
POLLUTION
SPECIALIST
SUROVICK:
Staff
is
17
proposing
some
modifications.

18
CHAIRPERSON
LLOYD:
Mr.
Kenny,
can
we
just
­­
the
19
Board
member
have
got
some
questions
on
this
first
­­

20
okay.
No,
sorry.
Clarification
after
the
discussion
of
21
the
DG,
I
think
the
Board
members
have
some
questions
on
22
that
aspect
before
we
move
into
the
guidelines.
I
realize
23
I
jumped
to
soon,
sorry.

24
AIR
POLLUTION
SPECIALIST
SUROVICK:
Staff
is
25
proposing
some
modifications
to
the
method
for
averaging
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
25
1
the
emissions
testing
results.
Staff
is
also
recommending
2
that
the
proposed
CHP
provision
for
2007
be
modified
to
3
reflect
only
a
minimum
60
percent
efficiency.

4
­­
o0o­­

5
AIR
POLLUTION
SPECIALIST
SUROVICK:
Finally,

6
staff
is
proposing
a
number
of
minor
clarifications.

7
­­
o0o­­

8
AIR
POLLUTION
SPECIALIST
SUROVICK:
I
will
now
9
summarize
the
staff's
proposed
DG
certification
program
10
that
we
are
recommending
for
your
adoption.

11
­­
o0o­­

12
AIR
POLLUTION
SPECIALIST
SUROVICK:
SB
1298
13
requires
the
ARB
to
develop
a
DG
certification
program.

14
It
requires
effective
DG
technologies
to
meet
near­
term
15
emission
standards
that
reflect
emission
levels
achieved
16
by
the
cleanest
DG
technologies
that
are
currently
17
available.

18
It
requires
these
technologies
to
ultimately
meet
19
longer
term
emission
standards
that
reflect
central
20
station
powerplant
BACT
limits.
Staff
is
proposing
a
DG
21
certification
program
that
ensures
only
the
cleanest
22
technologies
are
used
in
California.
The
requirements
23
provide
flexibility
to
manufacturers
from
meeting
the
BACT
24
standards
and
provides
economic
incentives
to
25
manufacturers
interested
in
deploying
their
zero
and
near
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
26
1
zero
emission
technologies
into
the
California
market.

2
The
program
also
provides
for
a
technology
review
3
in
2005
of
electrical
generation
technologies
that
will
4
address
the
advances
and
uses
of
DG
technologies
in
5
California
over
the
next
four
years.

6
AIR
POLLUTION
SPECIALIST
SUROVICK:
The
staff
7
recommends
that
the
Board
adopt
a
proposed
DG
8
certification
program
and
emission
standards
for
staff's
9
proposed
modifications.

10
This
concludes
my
presentation.

11
CHAIRPERSON
LLOYD:
Thank
you
very
much.
I
think
12
Professor
Friedman
you
had
a
question.

13
BOARD
MEMBER
HUGH
FRIEDMAN:
I
had
a
couple
of
14
questions.
They
relate
to
the
letter
of
the
California
15
Technology
Trade
and
Commerce
Agency
with
respect
to
these
16
proposed
regulations.
And
I'm
just
wondering
to
what
17
extent
the
staff
has
taken
these
into
account,
and
in
its
18
proposed
modifications
made
any
specific
response
to
these
19
rather
specific
comments.

20
The
letter
is
marked
number
18
in
our
file,
and
21
it
was
a
letter
dated
November
8th,
and
it's
fairly
short.

22
It
basically
comments
on
the
contradictory
cost
impact
23
statements.
And
the
incomplete
­­
according
to
them,
the
24
incomplete
cost
impact
assessments,
and
then
it
also
25
comments
on
the
record
keeping
requirement.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
27
1
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
The
letter
2
calls
for
some
clarifications
that
we
will
proceed
and
3
make
before
we
file
the
regulation
with
OAL
when
the
final
4
statement
of
reasons
­­

5
BOARD
MEMBER
HUGH
FRIEDMAN:
On
the
15
day
­­

6
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Yeah,
it
7
would
be
on
the
15­
day
comment
period,
right.

8
The
one
comment
I
think
that
is
fairly
9
problematic
is
we
haven't
assessed
the
cost
of
the
2007
10
standards
and
we
ought
to
do
so
before
we
adopt
them.
The
11
law
is
fairly
clear
in
that
it
requires
eventually
a
move
12
to
lower
levels
as
represented
by
central
station
13
powerplants.
I
don't
think
the
industry
knows
what
14
ultimately
the
costs
will
be
and
it's
very
difficult
to
15
quantify
at
this
time.

16
So
what
we
indicated
in
our
report
is
that
it
17
will
be
significant
development
costs
and
we'll
have
to
18
review
that
later.
It
would
be
very
hard
to
do
a
19
significant
improvement
in
that
in
the
short­
term
for
the
20
information
we
have
today.
So
I
think
we'd
have
to
21
respond
in
a
similar
manner
that
we
can't
fully
perform
22
that
task
today.

23
BOARD
MEMBER
HUGH
FRIEDMAN:
So
you
feel
that
you
24
can
satisfactorily
comply
with
the
apparent
requirement
of
25
the
Board
assessing
the
potential
cost
impact
by
saying
we
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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28
1
will
do
it
in
the
future.

2
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Yes.

3
BOARD
MEMBER
HUGH
FRIEDMAN:
Because
as
a
4
practical
matter
you
can't
do
it
now.

5
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Right,
and
6
delaying
the
date
for
implementation
will
not
change
­­

7
BOARD
MEMBER
HUGH
FRIEDMAN:
That
won't
change
8
anything,
it
makes
it
worse.

9
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
­­
change
the
10
cost.
It
just
may
spread
out
when
they
can
occur.

11
BOARD
MEMBER
HUGH
FRIEDMAN:
But
I
am
a
little
12
troubled
by
the
disparity
in
what
they
indicate
will
be
13
the
realistic
cost
estimate
for
the
2003
impact.
Their
14
letter
says
it
will
be
a
range
from
$
11,000
to
$
21,500.

15
And
the
total
cost
to
manufacturers
to
comply
with
these
16
2003
standards
could
run
as
high
as
$
370,000.

17
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
I
think
18
that's
all
dependent
on
the
number
of
units
that
are
19
certified
and
have
to
go
through
the
process
and
that's
20
unknown
right
now.
So
obviously
if
hundreds
of
units
21
get
­­
different
technologies
get
certified,
the
cost
22
would
be
much
higher
than
what's
there.
Maybe
staff
can
23
comment
on
that.

24
CHAIRPERSON
LLOYD:
But
presumably
based
on
the
25
limited
number
of
manufacturers
hundreds
would
be
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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29
1
unlikely.

2
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Yeah,
that
3
would
be
my
estimate
also.
Can
staff
provide
anymore
4
info?

5
BOARD
MEMBER
HUGH
FRIEDMAN:
You
understand,
I'm
6
just
trying
to
clarify
the
record
here.

7
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Kitty
8
Martin.

9
The
information
we
just
presented
to
you
in
the
10
slide,
I
think
if
you
recall
is
$
10,000
to
$
20,000,
and
11
that
would
be
the
cost
for
a
manufacturer
to
certify
each
12
model.
And
we
made
the
comment
that
that
obviously
would
13
be
spread
over
multiple
sales
of
an
individual
model.
And
14
if
a
manufacturer
had
multiple
models
that
had
different
15
emission
profiles,
then,
yes,
the
cost
would
be
greater
16
than
the
information
you
saw
on
the
slide.

17
BOARD
MEMBER
HUGH
FRIEDMAN:
Okay,
they
use
18
$
11,000
to
$
21,500.

19
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Yes.

20
And
that
was
our
cost
for
the
purposes
of
the
presentation
21
today,
we
did
a
bit
of
rounding
for
you.

22
BOARD
MEMBER
HUGH
FRIEDMAN:
You
rounded.

23
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
But
in
24
our
staff
report
it
does
agree
with
the
costs
in
the
Trade
25
and
Commerce
letter.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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30
1
BOARD
MEMBER
HUGH
FRIEDMAN:
And
then,
finally,

2
there's
a
comment
on
record
keeping
requirements.
And
I
3
notice
in
the
proposed
modification
we
still
have
the
same
4
language
that
manufacturers
must
keep
records
like
5
diamonds
and
love
forever.

6
(
Laughter.)

7
BOARD
MEMBER
HUGH
FRIEDMAN:
I
mean
there
is
no
8
­­
it
just
says
indefinitely
or
it
doesn't
even
say
it,
it
9
just
says
shall
keep
them,
retain
them,
and
maybe
some
10
thought
should
be
given.
If
it's
unduly
burdensome,
that
11
there
ought
to
be
a
cutoff.

12
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
And,

13
again,
based
on
our
information
today
we
felt
that
it
was
14
appropriate
for
them
to
keep
that
information
at
least
15
through
2005
when
we
did
the
technology
review
and
we
16
certainly
can
revisit
­­

17
BOARD
MEMBER
HUGH
FRIEDMAN:
Somehow
outside
the
18
limit
­­

19
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Yes.

20
BOARD
MEMBER
HUGH
FRIEDMAN:
­­
so
that
at
some
21
point
they
can
calendar
not
having
to
worry
about
keeping
22
them
forever.

23
Thank
you.

24
CHAIRPERSON
LLOYD:
Dr.
Burke.

25
BOARD
MEMBER
BURKE:
Well,
I've
missed
a
couple
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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31
1
of
meetings,
because
I
wasn't
feeling
up
to
par,
so
I
2
guess
I
have
some
time
coming.
So
I'll
be
talking
for
the
3
next
hour.

4
(
Laughter.)

5
BOARD
MEMBER
BURKE:
I
know
you
missed
me
in
6
Oakland
and
Santa
Barbara,
missed
me
at
all
the
good
ones.

7
You
know,
the
South
Coast
is
particularly
8
interested
in
microturbine
technology.
South
Coast
is
the
9
largest
purchaser
of
microturbine
technology
in
the
world,

10
and
not
by
a
little
bit,
but
by
a
big
margin.

11
In
fact,
yesterday
we
just
acquired
$
5
million
12
more
worth
of
microturbines.
And
so
I
was
particularly
13
interested
in
how
many
different
manufacturers
of
14
microturbines
did
you
analyze
while
doing
this
report?

15
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
During
16
the
course
of
developing
this
measure,
we
talked
to,
in
17
the
case
of
microturbine
manufacturers,
three
18
manufacturers
that
have
a
presence
in
California.

19
BOARD
MEMBER
BURKE:
And
those
are?

20
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:

21
Capstone,
Bowman
and
Honeywell.
Honeywell
has
since
22
stepped
out
of
the
market.

23
BOARD
MEMBER
BURKE:
Yes,
so
there's
only
two
and
24
there's
really
only
one
that's
viable.
What
really
caught
25
my
eye
in
these
reports
is
where
did
you
get
your
cost
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
32
1
figures
on
installation?

2
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
The
3
cost
figures
for
both
the
microturbine
as
well
as
the
4
other
equipment
came
from
manufacturers.
In
the
case
of
5
DG
that
equipment
is
almost
exclusively
installed
by
the
6
manufacturers
as
opposed
to
a
distributor.

7
BOARD
MEMBER
BURKE:
Let
me
assure
you
that
the
8
price
for
installation
for
microturbines
is
at
least
700
9
percent
more
than
you
have
in
this
report.
At
least
on
10
the
most
simple
installation,
it
is
at
least
seven
times
11
what
you
have
here.

12
So
that
makes
me
wonder
­­
you
know,
it's
kind
of
13
like
going
to
the
fox
and
asking
him
how
many
chickens
in
14
the
coupe?

15
You
know,
if
you
go
­­
because
I'm
reading
the
16
letter
from
Capstone.
I'm
a
big
Capstone
supporter.
In
17
fact,
people
were
accusing
me
of
having
Capstone
stock
for
18
awhile.
Then
a
big
article
came
out
and
Capstone
lost
30
19
percent
of
its
stock
value
in
one
day.
And
that's
the
day
20
I
said
it
sounds
like
a
stock
I
would
have,
but
I
didn't
21
have.

22
But
they
had
a
number
of
questions
in
their
23
letter
to
you
as
it
related
not
only
to
the
definition,

24
but
also
to
waste
gas,
and
those
issues,
and
I
didn't
hear
25
that
addressed.
But
more
important,
when
you
tested
for
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
33
1
the
emissions
test
that
you
used,
what
type
of
fuel
did
2
you
use
in
the
microturbine?

3
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
The
4
tests
that
we
conducted
at
the
SMUD
unit
here
in
5
Sacramento
was
based
on
natural
gas
episode,
natural
gas
6
fired
unit.
It
was
their
30
KW
unit.

7
BOARD
MEMBER
BURKE:
And
I
assume
that
was
also
8
the
same
units
that
you
tested
for
the
noise
level?

9
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:

10
Actually,
as
we
mentioned
in
the
slide
presentation,
the
11
noise
information
came
from
the
manufacturers,
and
it
may
12
reflect
a
variety
of
testing
methodologies,
so
we
have
not
13
spent
a
lot
of
time
doing
individual
­­

14
BOARD
MEMBER
BURKE:
So
we
really
don't
know
what
15
the
noise
level
is,
we
just
know
what
they
told
us
it
was.

16
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
We
have
17
a
range
of
numbers
that
have
been
provided
to
us.

18
BOARD
MEMBER
BURKE:
By
the
manufacturer.

19
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:

20
Exactly.

21
BOARD
MEMBER
BURKE:
So
we
don't
know
what
the
22
real
test
numbers
are
as
it
relates
to
size.
I've
got
to
23
tell
you
they're
not
really
that
noisy,
but
I'm
always
24
concerned
when
a
governmental
agency
asks
the
manufacturer
25
of
a
product
for
the
specs.
We
are
going
to
write
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
34
1
regulation
and
we're
writing
it
based
on
information
that
2
are
provided
by
the
manufacturer.

3
I
had
one
other
question.

4
CHAIRPERSON
LLOYD:
I
think
in
that
case,
Dr.

5
Burke,
noise
was
just
put
in
the
information.
I
think
6
we're
focusing
on
emissions.

7
BOARD
MEMBER
BURKE:
I
understand
that,
but
if
8
you
present
a
package
and
it's
presented
to
the
Air
9
Resources
Board,
you
assume
that
all
the
information
is
10
correct.

11
CHAIRPERSON
LLOYD:
But
I
think
in
fairness
to
12
staff
in
this
case,
we
didn't
do
independent
tests,
that
13
was
disclosed.
Typically,
manufacturers
are
not
going
to
14
underestimate
their
parameters,
I
would
guess.
If
15
anything,
I
don't
think
­­
I
would
say
that
they're
going
16
to
be
quieter
than
they
are.

17
BOARD
MEMBER
BURKE:
Well
­­

18
CHAIRPERSON
LLOYD:
Anyway,
that's
­­

19
BOARD
MEMBER
BURKE:
Yeah.
Did
you,
at
anytime,

20
talk
to
South
Coast
about
any
of
our
tests
with
this
21
equipment?

22
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Mr.

23
Grant
Chin
has
talked
to
the
South
Coast
at
length
about
24
the
microturbines,
I'll
have
him
address
that.

25
AIR
RESOURCES
ENGINEER
CHIN:
Grant
Chin.
We
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
35
1
have
been
in
contact
with
South
Coast
about
their
program
2
for
installing
microturbines.
We're
also
aware
of
some
of
3
the
testing
activity
that's
been
conducted
by
UC
Irvine.

4
BOARD
MEMBER
BURKE:
Thank
you.

5
CHAIRPERSON
LLOYD:
Anybody
else?

6
BOARD
MEMBER
BURKE:
Last
question.
As
it
7
relates
in
the
Capstone
letter
on
waste
gases,
what
is
8
your
answer
to
their
objection
or
definition
of
waste
9
gases?

10
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:

11
Capstone's
comment,
my
interpretation
of
their
comment
in
12
the
letter,
is
that
we
have
made
some
comments
regarding
13
available
control
equipment
for
available
controls
for
14
equipment
that's
fired
by
waste
gas.
And
as
Grant
will
15
discuss
a
little
bit
later,
one
of
the
challenges
with
16
putting
control
equipment
on
waste
gas
fired
units
is
the
17
contaminants
in
waste
gas
will
foul
or
poison,
if
you
18
will,
the
catalysts.
So
a
catalyst
based
unit
cannot
be
19
applied.

20
Capstone
was
referring
to
an
emerging
technology,

21
the
xonon
technology,
as
being
a
possible
opportunity
for
22
consideration
for
reducing
emissions
from
waste
gas.
And
23
it
certainly
is
a
possible
opportunity.
It
has
not
been
24
applied
to
that
type
of
fuel.
And
certainly
we
will
track
25
applications
of
xonon
to
that
type
of
waste
gas
fired
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
36
1
unit.

2
CHAIRPERSON
LLOYD:
Any
other
questions
from
the
3
Board?

4
I
had
a
question
in
terms
of
setting
the
2005
5
mid­
2005
technology
and
review.
If
you
look
at
the
time
6
between
now
and
then,
it's
clearly
much
­­
it's
actually
7
very
close
to
the
2007
new
guidelines,
new
standard
8
setting.
What's
the
basis
for
selection
of
July
2005?

9
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
10
Tollstrup.
I
guess
the
basis
that
we
used
for
the
2005
11
date
is
that
we
believe
this
is
an
emerging
market
and
we
12
wanted
to
give
the
market
time
to
develop
and
for
the
13
manufacturers
to
get
going
on
the
developing
technologies,

14
and
we
felt
that
that
was
an
adequate
time
frame
between
15
the
2003
and
the
2005
standard
where
we
might
see
16
something
happen
in
the
marketplace
or
not
and
we'd
be
17
able
to
report
those
results
back
to
the
Board
at
that
18
time.

19
CHAIRPERSON
LLOYD:
Do
you,
at
that
time,
if
the
20
standards
­­
or
if
you
like
the
technology
for
central
21
powerplants
has
advanced
that,
in
fact,
these
numbers
are
22
also
significantly
reduced,
how
does
that
affect
the
23
guidelines
for
2007?

24
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
On
25
the
guidance
side,
the
cert
side,
the
limits
are
set
by
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
37
1
the
Board,
but
on
the
guidance
side,
the
limits
in
that
2
reg
are
established
to
reflect
advances
in
technology.
We
3
have
an
initial
standard
in
2003,
and
staff
has
proposed
4
in
the
package
before
you
today
that
we
would
come
back
5
periodically
as
technology
advances
and
update
those
6
numbers
when
we
felt
it
was
necessary
to
do
so.
So
we
7
would
be
following
and
there
would
be
advances
as
they
8
occurred.

9
CHAIRPERSON
LLOYD:
But
the
cert
for
2007
is
.07.

10
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
The
cert
for
11
2007
wouldn't
change,
but
if
we
find
out
that
central
12
power
is
now
far
cleaner
than
we
set
it,
then
we'd
have
to
13
review
that
and
say
that
we
set
an
additional
level
and
14
what
time
frame
would
be
appropriate
for
that
additional
15
level.
The
legislation
says
the
target
is
do
what
central
16
power
can
do
from
an
emissions
standpoint.

17
CHAIRPERSON
LLOYD:
And
if
that's
changing
also,

18
then
we'd
have
to
change
the
­­

19
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Right,
but
20
it's
not
an
automatic,
and
we'd
have
to
review
the
facts
21
and
then
the
Board
would
have
to
make
a
decision
on
what
22
the
best
way
to
proceed
is.

23
CHAIRPERSON
LLOYD:
Okay.
Thank
you
very
much.

24
I
appreciate
staff's
indulgence
to
take
care
of
that
item.

25
(
Thereupon
an
overhead
presentation
was
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
38
1
presented
as
follows.)

2
AIR
RESOURCES
ENGINEER
CHIN:
Okay.
I'd
like
to
3
thank
Marcelle.
In
addition
to
the
DG
certification
4
program
that
Marcelle
just
described,
SB
1298
also
5
requires
the
ARB
to
develop
a
guidance
document
for
6
districts
to
use
in
the
permitting
of
electrical
7
generation
technologies
that
are
under
their
jurisdiction.

8
The
remainder
of
my
presentation
will
focus
on
9
the
ARB's
proposed
guidance
documentation.

10
­­
o0o­­

11
AIR
RESOURCES
ENGINEER
CHIN:
In
my
presentation
12
today,
I
will
briefly
mention
the
requirements
of
SB
1298
13
and
explain
what
the
DG
guidance
addresses.
I'll
then
14
summarize
the
recommendations
in
the
DG
guidance
and
15
discuss
the
staff's
proposed
provisions
for
updating
the
16
guidance
as
new
information
becomes
available.

17
I'll
also
address
the
staff's
proposed
18
modifications.
And
finally,
I'll
conclude
with
staff's
19
recommendations.

20
­­
o0o­­

21
AIR
RESOURCES
ENGINEER
CHIN:
I'll
now
briefly,

22
again,
discuss
what
the
SB
1298
requires.

23
­­
o0o­­

24
AIR
RESOURCES
ENGINEER
CHIN:
Marcelle
just
25
described
the
ARB's
staff
proposal
to
respond
to
SB
1298'
s
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
39
1
first
requirement
to
adopt
a
certification
program
and
2
uniform
emission
standards
for
DG
units
that
are
not
3
subject
to
district
permitting
requirements.
I
will
now
4
address
SB
1298'
s
requirement
that
by
January
1,
2003
the
5
ARB
developed
a
guidance
document
for
the
districts
to
use
6
in
their
permitting
of
electrical
generation
technologies
7
that
are
under
their
jurisdiction.

8
­­
o0o­­

9
AIR
RESOURCES
ENGINEER
CHIN:
I'll
now
explain
10
what
the
DG
guidance
addresses.

11
­­
o0o­­

12
AIR
RESOURCES
ENGINEER
CHIN:
The
proposed
13
guidance
for
your
consideration
today
is
intended
to
14
assist
districts
in
making
BACT
determinations
for
15
electrical
generation
technologies.
The
proposed
guidance
16
is
intended
to
be
a
companion
document
to
the
Board
17
approved
1999
powerplant
guidance,
which
addressed
central
18
station
powerplants,
that
is
turbines
50
megawatts
and
19
larger
that
follow
under
the
jurisdiction
of
the
20
California
Energy
Commission.

21
As
SB
1298
requires,
guidance
addresses
22
information
on
Best
Available
Control
Technology,
or
BACT,

23
determinations,
attainment
of
central
station
powerplant
24
levels
by
all
electrical
generation
technologies
and
25
methods
for
streamlining
the
permitting
of
electrical
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
40
1
generation
technologies.

2
While
these
guidelines
are
recommendations
rather
3
than
regulations,
districts
have
usually
accepted
an
4
implement
guidance
issued
by
the
ARB.
The
1999
powerplant
5
guidance
is
a
good
example
and
that
all
central
station
6
powerplants
permitted
after
its
issuance
have
been
7
required
to
meet
emission
levels
at
least
as
stringent
as
8
the
levels
recommended
by
the
guidance.

9
­­
o0o­­

10
AIR
RESOURCES
ENGINEER
CHIN:
The
following
three
11
slides
show
examples
of
electrical
generation
technologies
12
that
would
be
subject
to
the
guidelines.
This
is
a
13
schematic
of
a
turbine
with
Combined
Heat
and
Power
or
14
CHP.
The
combuster
is
located
in
the
circle
on
the
left,

15
and
the
heat
recovery
unit
is
on
the
right
side
of
the
16
picture.

17
­­
o0o­­

18
AIR
RESOURCES
ENGINEER
CHIN:
This
is
a
five
19
megawatt
turbine
with
CHP
at
a
hospital.
All
equipment
20
shown
in
the
previous
slide
is
inside
the
large
container.

21
­­
o0o­­

22
AIR
RESOURCES
ENGINEER
CHIN:
This
is
a
picture
23
of
a
230
kilowatt
natural
gas
fired
reciprocating
engine
24
equipped
with
CHP.
About
100
such
units
have
been
25
permitted
in
California
used
at
hospitals,
hotels
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
41
1
other
institutions
that
require
hot
water.

2
­­
o0o­­

3
AIR
RESOURCES
ENGINEER
CHIN:
Some
landfills
or
4
waste
water
treatment
facilities
use
waste
gas
or
on­
site
5
electrical
generation.
On
the
right
is
a
picture
of
three
6
large
engines
that
use
landfill
gas
to
generate
about
8.5
7
megawatts.
If
the
waste
gas
is
not
used
for
electricity
8
by
a
landfill,
then
it
is
burned
in
a
flare
as
shown
in
9
the
picture
on
the
left.

10
­­
o0o­­

11
AIR
RESOURCES
ENGINEER
CHIN:
In
a
few
instances
12
in
California,
landfill
emissions
are
discharged
and
13
control
to
the
air.

14
­­
o0o­­

15
AIR
RESOURCES
ENGINEER
CHIN:
I
will
summarize
16
the
recommendations
in
the
DG
guidance.
This
table
17
summarizes
staff's
recommendations
for
achieved
in
18
practice
levels
for
natural
gas
fired
turbines.
The
ARB
19
staff
proposed
that
the
recommended
BACT
levels
for
20
turbines
be
divided
into
three
size
categories
to
take
21
into
account
the
insufficiencies
that
are
inherent
with
22
smaller
turbines.

23
Like
the
certification
program,
emission
levels
24
are
expressed
in
terms
of
pounds
per
megawatt
hour.
It
is
25
important
to
note
that
these
BACT
recommendations
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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42
1
represent
achieved
in
practical
levels
for
this
source
2
category.
Districts
are
required
to
make
BACT
3
determinations
on
a
case­
by­
case
basis
and
may
establish
4
more
stringent
BACT
levels
depending
on
the
specific
5
parameters
and
conditions
of
each
application.

6
­­
o0o­­

7
AIR
RESOURCES
ENGINEER
CHIN:
Although
not
shown
8
in
this
slide,
recommended
BACT
levels
for
turbines
fueled
9
by
waste
gas
are
somewhat
higher,
that
reflect
the
lowest
10
levels
that
have
been
achieved
in
practice
without
11
catalytic
based
controls.
Contaminants
and
waste
gas,

12
specifically
styloxanes
can
poison
catalytic
control
13
equipment
and
thus
prevent
its
noose.

14
­­
o0o­­

15
AIR
RESOURCES
ENGINEER
CHIN:
This
slide
presents
16
the
recommended
BACT
levels
for
electrical
generation
17
technologies
that
use
reciprocating
engines.
These
18
recommendations
reflect
the
lowest
levels
achieved
in
19
practice
by
natural
gas
fueled
engines
equipped
with
20
after­
treatment
controls.

21
As
with
turbines,
engines
using
waste
gas
cannot
22
use
catalytic
based
post­
combustion
treatment.
Therefore,

23
the
recommended
levels
for
this
category
are
somewhat
24
higher
and
reflect
the
use
of
the
cleanest
engines
without
25
add­
on
controls.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
43
1
­­
o0o­­

2
AIR
RESOURCES
ENGINEER
CHIN:
With
regard
to
3
particulate
matter
or
PM,
the
recommended
levels
for
both
4
turbines
and
engines
are
essentially
equivalent
to
using
5
pipeline
quality
natural
gas.
The
use
of
natural
gas
as
a
6
fuel
is
considered
BACT
for
PM.

7
­­
o0o­­

8
AIR
RESOURCES
ENGINEER
CHIN:
As
I
mentioned
9
earlier,
SB
1298
also
directed
the
ARB
to
address
methods
10
for
streamlining
the
permitting
and
approval
of
the
11
electrical
generation
units.
We've
reviewed
several
12
district
permits
streamlining
programs
and
determined
that
13
there
are
some
opportunities
to
simplify
the
process.

14
These
include
specifying
consistent
BACT
levels
15
for
electrical
generation
technologies,
minimizing
the
16
reverification
of
emissions
data
for
technologies
that
17
have
been
certified
by
the
ARB,
and
using
standardized
18
permit
conditions.

19
Staff
recommends
that
districts
evaluate
their
20
permitting
programs
to
identify
opportunities
to
include
21
these
recommendations.

22
­­
o0o­­

23
AIR
RESOURCES
ENGINEER
CHIN:
I'll
now
discuss
24
the
staff's
proposed
provisions
for
updating
the
guidance
25
as
new
information
becomes
available.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
44
1
­­
o0o­­

2
AIR
RESOURCES
ENGINEER
CHIN:
The
first
bar
on
3
this
chart
represents
currently
recommended
BACT
levels
4
for
a
combined
cycle
central
station
powerplant.

5
The
second
bar
represents
the
level
4
turbine
in
6
the
12
to
50
megawatt
category,
while
the
third
bar
7
represents
the
level
for
an
engine.

8
SB
1298
directs
that
at
the
earliest
practicable
9
date,
the
BACT
determinations
that
ARB
addresses
should
be
10
made
equivalent
to
that
of
central
station
powerplants.

11
As
you
can
see,
current
BACT
levels
have
been
achieved
in
12
practice
for
turbines
and
engines
are
not
equivalent
for
13
BACT
level
for
central
station
powerplants.

14
Our
guidance
encourages
in­
use
of
efficient
CHP
15
as
one
way
of
making
progress
toward
achieving
central
16
station
powerplant
BACT
levels.

17
­­
o0o­­

18
AIR
RESOURCES
ENGINEER
CHIN:
As
I
mentioned,

19
just
mentioned,
SB
1298
directs
that
at
the
earliest
20
practicable
date,
BACT
determinations
for
electrical
21
generation
equipment
should
be
made
equivalent
to
that
of
22
central
station
powerplants.
The
guidance
for
23
consideration
today
reflects
current
BACT
determinations
24
for
electrical
generation
technology.

25
These
determinations
have
been
made
by
local
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
45
1
districts
according
to
very
specific
procedures
prescribed
2
under
the
federal
Clean
Air
Act.
Therefore,
we
believe
3
that
the
guidance
will
require
periodic
technical
updates
4
to
incorporate
updated
BACT
determinations
that
reflect
5
progress
toward
the
achievement
of
central
station
6
powerplant
levels
by
all
electrical
generation
7
technologies.

8
In
recent
months,
a
number
of
agencies
including
9
the
U.
S.
EPA
have
proposed
various
techniques
and
10
assumptions
to
use
for
calculating
CHP
benefits.
As
CHP
11
applications
penetrate
the
market,
the
ARB
staff
12
anticipates
that
more
detailed
information
will
emerge
13
regarding
the
extent
to
which
captured
heat
is
actually
14
used
by
the
facility.

15
Thus,
the
ARB
staff
anticipates
that
the
16
techniques
and
assumptions
that
we
have
recommended
for
17
calculating
for
CHP
benefits
in
the
guidelines
will
18
require
updating.

19
Therefore,
we
are
proposing
today
that
the
ARB
20
Executive
Officer
be
allowed
to
direct
staff
to
21
periodically
update
the
guidance
to
reflect
newly
22
available
information,
specifically
that
relates
to
CHP
23
and
BACT
determinations
that
have
been
achieved
in
24
practice.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
46
1
AIR
RESOURCES
ENGINEER
CHIN:
Staff
is
proposing
2
several
minor
technical
clarifications.

3
­­
o0o­­

4
AIR
RESOURCES
ENGINEER
CHIN:
In
conclusion,
the
5
staff
recommends
that
the
Board
approve
the
proposed
6
guidance
for
the
permitting
of
electrical
generation
7
technologies.

8
BOARD
MEMBER
RIORDAN:
Mr.
Chairman?

9
CHAIRPERSON
LLOYD:
Yes,
Mrs.
Riordan.

10
BOARD
MEMBER
RIORDAN:
Can
I
just
ask
one
11
clarification
and
that
was
on
your
slide
with
the
waste
12
gas
flared
engine,
you
gave
some
numbers.
And
quite
13
frankly,
I
don't
have
them
down,
and
I
would
like
to
have
14
that.

15
AIR
RESOURCES
ENGINEER
CHIN:
There's
three
large
16
engines
that
generate
about
8.5
megawatts
of
electricity,

17
and
that's
into
the
grid.

18
BOARD
MEMBER
RIORDAN:
It
was
8.5,
thank
you.

19
CHAIRPERSON
LLOYD:
Before
we
get
into
the
20
Board's
questions,
again,
Madam
Ombudsman,
would
you
21
please
describe
the
public
participation
process
that
22
occurred
while
this
item
was
being
developed
and
share
23
with
us
any
concerns
or
comments
you
have
with
us
at
this
24
time.

25
OMBUDSMAN
TSCHOGL:
Can
you
hear
me?
Okay.
I
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
47
1
would
be
pleased
to
do
that.
The
process
began
with
a
2
workshop
in
Sacramento
on
the
morning
of
November
8th,

3
2000.
This
workshop
was
announced
to
more
than
2,000
4
people
and
organizations.
These
2,000
recipients
5
represented
community
environmental
organizations,
energy
6
providers,
equipment
manufacturers
and
governmental
7
agencies
with
energy
related
interests.
Thirty­
nine
8
people
attended
the
workshop.

9
Following
the
initial
workshop,
staff
established
10
several
working
groups.
These
working
groups
discussed
11
technical
and
nontechnical
issues
related
to
the
proposed
12
regulation
before
you
now.
The
working
group
membership
13
consisted
of
90
people
and
met
six
times
between
January
14
and
June
2001.

15
Each
meeting
was
attended
by
about
40
people
16
representing
the
environmental
community,
technology
and
17
energy
providers
as
well
as
government
agencies.

18
Beginning
in
July
of
this
year,
staff
continued
19
the
workshop
process
by
holding
four
additional
20
consultation
meetings.
This
time
staff
took
to
the
road
21
holding
workshops
at
the
South
Coast,
Bay
Area
and
San
22
Joaquin
Valley
Air
Districts.

23
The
fourth
workshop
was
held
in
Sacramento.

24
Attendance
at
these
workshops
ranged
from
less
than
ten
in
25
the
San
Joaquin
valley
to
approximately
30
in
the
South
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
48
1
Coast
and
40
here
in
Sacramento.

2
Staff
used
these
community
meetings
as
well
as
3
those
held
to
discuss
the
SB
25
program
and
environmental
4
justice
policy
to
distribute
information
on
this
proposal,

5
as
well
as
on
other
stationary
source
division
programs
6
and
risk
reduction
activities.

7
To
this
end,
staff
developed
several
fact
sheets
8
and
brochures
covering
many
of
ARB's
programs
in
both
9
Spanish
and
English.
Throughout
the
process,
staff
met
10
and
discussed
the
proposal
with
stakeholders
as
the
need
11
arose.
This
included
over
15
private
meetings
and
five
12
conference
calls
with
the
local
air
districts.

13
In
addition,
staff
conducted
a
half
dozen
site
14
visits
to
both
manufacturing
facilities,
as
well
as
15
installation
sites.
On
September
28th,
staff
released
the
16
final
proposed
regulation
and
staff
report.
Also,
on
that
17
date,
staff
sent
out
the
announcement
for
this
hearing
to
18
1,200
people
via
the
U.
S.
Postal
Service
and
an
additional
19
760
people
via
Email.

20
Finally,
on
October
1st,
staff
sent
a
copy
of
the
21
report
and
the
district
guidance
document
to
each
of
the
22
air
districts.
This
concludes
my
comments
on
outreach
23
activities.

24
Thank
you.

25
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Any
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
49
1
additional
questions
from
my
colleagues
on
the
Board?

2
Seeing
none,
I
would
like
to
call
the
first
3
witness
signed
to
speak
up
here.
Again,
we
have
Loren
4
Kaye,
Ralph
Ordonez
and
Susannah
Churchill.

5
Again,
I
would
appreciate
when
you
testify
if
you
6
could
identify
whether
you're
addressing
both
of
these
7
items
or
whether
it's
the
guidelines
or
the
certification
8
program.

9
MR.
KAYE:
Thank
you,
Mr.
Chairman.
My
name
is
10
Loren
Kaye.
I'm
with
Kahl/
Pownall
Advocates
here
in
11
Sacramento
and
we
represent
Plug
Power
Incorporated.
It's
12
a
fuel
cell
manufacturer
located
in
New
York.

13
And
I
just
wanted
to
briefly
commend
the
staff
14
for
their
excellent
work
in
developing
this
regulation.

15
I'm
speaking,
Mr.
Chairman,
to
the
certification
16
regulation
that
they
produced
not
only
an
excellent
17
certification
regulation,
but
the
process
that
they
18
undertook
that
you
just
heard
described
was
very
open
and
19
I
think
incorporated
a
wide
variety
of
stakeholders
and
20
opinions.
So
we
just
wanted
to
let
you
know
that
you
did
21
a
great
job
and
we
urge
your
adopting
the
regulation
22
today.

23
CHAIRPERSON
LLOYD:
A
question,
when
do
you
24
anticipate
submitting
your
unit
for
certification,
and
25
when
do
you
anticipate
the
first
of
your
units
arriving
in
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
50
1
California?

2
MR.
KAYE:
Well,
the
first
of
our
units
arrived
3
about
a
month
ago
at
UC
Irvine
at
the
national
fuel
cell
4
center
for
them
to
­­

5
CHAIRPERSON
LLOYD:
A
caveat,
for
commercial
6
operation.

7
MR.
KAYE:
For
commercial
operation,
as
soon
as
8
we
can
sell
them.

9
(
Laughter.)

10
MR.
KAYE:
But
I
would
put
out
for
Dr.
Burke's
11
information,
in
case
it
hasn't
yet
come
to
his
attention,

12
that
the
South
Coast
Air
District
is
in
the
middle
of
a
13
Request
For
Proposals
to
acquire
and
test
a
number
of
14
small
scale
residential
fuel
cells.
And
that
will
be
an
15
opportunity
for
when
we
help
our
company,
but
some
fuel
16
cell
purveyors
in
the
country,
to
place
them
in
17
California,
but
we're
open
for
business.
And
as
soon
as
18
this
regulation
is
adopted,
we'll
begin
to
submit
our
19
product
for
certification.

20
CHAIRPERSON
LLOYD:
You
saw
staff's
estimate
of
21
the
price
range
for
fuel
cell
power.
Do
you
think
those
22
are
sound
numbers?

23
MR.
KAYE:
I
think
that
in
a
commercial
­­
once
24
we
get
into
a
commercial
environment,
those
are
sound
25
numbers,
and
we
hope
that,
like
2007,
certainly
that
PETERS
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51
1
they'll
be
far,
far
less
expensive
than
what
you
saw.

2
We're
obviously,
I
think,
we're
a
little
above
3
that
right
now
because
we're
in
a
precommercial
phase,
but
4
I
think
those
are
appropriate
for
commercial
deployment.

5
CHAIRPERSON
LLOYD:
Let
the
record
state
that
6
Loren
is
saying
we'll
have
much
cheaper
fuel
cells
in
7
2007,
and
you
can
give
us
a
good
deal,
I
hope.

8
MR.
KAYE:
You
bet.

9
CHAIRPERSON
LLOYD:
Thank
you.

10
Ralph
Ordonez,
Susannah
Churchill
and
Stan
11
Zwicker.

12
MR.
ORDONEZ:
Good
morning.
My
name
is
Ralph
13
Ordonez.
I
work
with
Solar
Turbines
in
San
Diego
14
California.
And
I'd
like
to
talk
a
little
bit
about
our
15
operations.

16
We
manufacturer
power
generation
turbines
1
to
14
17
megawatts
sited
throughout
the
world,
including
600
CHP
18
applications
within
the
United
States.
The
nice
thing
19
about
the
solar
turbine
application
is
that
there's
a
lot
20
of
exhaust
heat
that
we
use
for
supplying
heat
or
cooling
21
load
to
universities,
hotels
and
industrial
facilities.

22
But
besides
supplying
turbine
machinery,
we
also
23
have
a
construction
services
department
in
which
we
24
actually
develop
and
construct
CHP
projects.
In
addition,

25
we
operate
cogeneration
facilities.
So
as
you
can
tell,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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52
1
we
have
an
interest
in
what's
going
on
with
the
CHP
2
application.

3
We're
encouraged
by
the
fact
that
the
regulatory
4
community
is
going
to
output
based
standard,
pounds
per
5
megawatt
hours.
There
is
some
concern
on
our
part
as
far
6
as
the
minimum
efficiency
requirements
currently
written
7
in
the
guidance
document.

8
We
think
that
the
pounds
per
megawatt
hour
is
a
9
good
thing
to
have
within
the
regulations,
and
there's
no
10
need
for
actual
minimum
efficiency
requirements.
The
11
nature
of
the
calculation
allows
efficiency
be
12
incorporated
into
the
standard.

13
Information
has
been
submitted
to
staff
showing
14
that
the
efficiencies
of
cogeneration
operations
are
not
15
meeting
the
minimum
requirements
currently
in
the
guidance
16
document.

17
One
of
the
compelling
cases
is
we
have
a
unit
18
called
the
STAC
unit,
which
stands
for
Steam
Turbine
19
Assisted
Cogeneration.
This
is
a
unit
that,
by
design,

20
maximized
use
of
exhaust
heat,
but
the
overall
thermal
21
efficiency
is
way
less
than
what
is
being
proposed
in
the
22
guidance.

23
So
we
understand
that
the
minimum
requirements
24
for
efficiency
are
being
removed
from
the
certification
25
documents.
We
also
like
that
type
of
consideration
within
PETERS
SHORTHAND
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1
the
guidance
document,
whether
it
be
through
removal
at
2
the
beginning
or
through
education
on
the
efficiencies
of
3
cogeneration
projects.

4
That
concludes
my
statement.

5
CHAIRPERSON
LLOYD:
Thank
you
very
much.

6
Questions
from
the
Board?

7
I
know
you
make
a
statement
here
that
you
feel
8
it's
unnecessary
to
put
the
minimum
efficiency
criteria
in
9
the
guidance
document.
I'd
like
to
get
a
staff
response
10
on
that?

11
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
12
Tollstrup.
The
way
that
the
guidance
document
is
13
currently
set
up
it
establishes
a
pounds
per
megawatt
14
level
for
the
units
to
meet.
The
efficiency
standard
is
15
not
a
requirement
in
there.
It
provides
an
option
to
16
folks
that
want
to
take
advantage
of
that.
There
is
17
another
issue
on
the
guidance
side
that
how
would
the
18
districts
credit
that
CHP
number.
They
have
issues
that
19
they
have
to
deal
with
because
of
their
new
source
review
20
programs
and
BACT
and
all,
but
it
is
currently
an
option.

21
There
is
a
pounds
per
megawatt
number
in
there
currently.

22
CHAIRPERSON
LLOYD:
Okay,
thank
you.

23
Thank
you
very
much.

24
Susannah
Churchill,
Stan
Zwicker,
Sheryl
Carter.

25
MS.
CHURCHILL:
Hello
and
thank
you
very
much,

PETERS
SHORTHAND
REPORTING
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1
Chairman
and
Members
of
the
Board.
My
name
is
Susannah
2
Churchill.
I'm
the
energy
advocate
for
the
California
3
Public
Industry
Research
Group,
CALPIRG,
and
I'll
be
4
speaking
about
both
pieces
of
the
proceeding
today.

5
CALPIRG
is
a
nonprofit
nonpartisan
advocate
for
6
the
public
interest.
And
we
respectfully
submit
these
7
comments
on
behalf
of
the
60,000
citizen
members
of
8
CALPIRG
around
the
state,
and
CALPIRG
charitable
trusts,

9
which
is
the
organization's
research
and
policy
arm.

10
CALPIRG
would
like
to
applaud
the
Air
Resources
11
Board
for
its
commitment
to
developing
strong
emissions
12
guidelines
and
certification
standards
for
distributed
13
generation
technologies.
And
as
we
showed
with
the
14
delivery
to
two
days
ago
of
over
5,300
public
comments
15
from
our
members
in
support
of
clean
distributed
16
generation,
the
public
is
behind
our
conviction
that
in
17
order
to
protect
public
health
and
air
quality
it's
18
imperative
that
the
ARB
support
clean
DG.

19
I
would
also
like
to
submit
as
official
testimony
20
the
CALPIRG
charitable
trust
recent
report
on
the
variety
21
of
available
distributed
generation
technologies
entitled,

22
The
Good,
The
Bad
and
The
Other,
Public
Health
and
the
23
Future
of
Distributed
Generation.

24
And
as
this
report
shows,
diesel
and
dirty
fossil
25
fuel
distributed
generation
pose
serious
health
threats
to
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
Californians
when
used
for
even
a
very
limited
number
of
2
hours
per
year.

3
Fortunately,
as
our
report
also
outlines,

4
alternatives
to
dirty
fossil
fuel
technologies
exist,
such
5
as
solar
photovoltaic
technologies,
wind
turbines,
fuel
6
cells,
and
combined
heat
and
power
systems.
And
strong
7
standards
and
guidelines
at
this
proceeding
are
going
to
8
be
critical
to
ensure
that
California
consumers
who
are
9
buying
DG
technologies
in
the
future
are
pointed
in
the
10
right
direction
towards
these
clean
technologies
and
away
11
from
the
dirtier
ones.

12
And
while
overall
we
believe
that
the
ARB
has
13
issued
strong
draft
regulations
and
guidelines,
we
urge
14
the
Board
to
adopt
the
modifications
summarized
below,

15
which
I
believe
will
also
be
echoed
by
other
environmental
16
coalition
members
here
today.

17
First,
is
that
the
guidance
districts
should
18
establish
a
single
aggressive
performance
based
emission
19
standards
for
2003
and
an
output
based
equivalent
of
five
20
parts
per
million
at
15
percent
oxygen.

21
Second,
the
guidance
to
air
districts
should
22
clarify
that
the
emission
standards
for
distributed
23
generation
will
be
equivalent
to
the
new
combined
cycle
of
24
a
natural
gas
central
station
powerplant
by
2007.

25
Third,
the
certification
regulations
should
PETERS
SHORTHAND
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1
include
an
interim
standard
to
ensure
progress
towards
the
2
2007
standards.

3
Fourth,
both
the
certification
regulation
and
the
4
guidance
to
districts
should
incorporate
the
combined
heat
5
and
power
credit
methodology
proposed
by
NRDC
in
their
6
comments,
and
include
greater
recognition
of
the
climate
7
change
mitigation
benefits
of
higher
efficiencies.

8
Fifth,
both
the
certification
regulation
and
9
guidance
to
districts
should
clarify
the
Board's
intent
to
10
exclude
only
true
emergency
generators
and
not
all
diesel
11
generators,
and
strengthen
enforcement
guidance
to
ensure
12
that
outcome.

13
And
then
finally,
if
portable
generators
are
to
14
be
exempted
from
these
proceedings,
the
Board
should
15
direct
staff
to
reevaluate
the
standards
included
in
the
16
portable
equipment
registration
program
to
make
them
17
consistent
with
the
standards
adopted
here
today.

18
Those
are
all
my
comments
and
thank
you
very
much
19
for
your
attention.

20
CHAIRPERSON
LLOYD:
Thank
you.

21
Any
questions?

22
Yes,
Ms.
D'Adamo.

23
BOARD
MEMBER
D'ADAMO:
If
staff
could
respond.

24
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
25
Tollstrup.
The
first
comment
was
on
the
single
standard
PETERS
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1
for
'
03.
What
staff
is
proposing
is
a
variety
of
2
standards
based
on
technologies
that
are
out
there
today.

3
One
of
our
concerns
was
setting
a
single
standard
4
of
five
parts
per
million
would
effectively
knockout
IC
5
engines
and
some
of
the
other
technologies
that
are
6
currently
available
out
there,
wouldn't
give
them
an
7
opportunity
to,
in
a
short
time
frame,
develop
the
8
technologies
to
meet
those
limits.

9
CHAIRPERSON
LLOYD:
Although,
we
do
have
a
letter
10
here
saying
that
even
at
the
numbers
we
choose,
we're
11
going
to
knock
out
IC
engines
anyway.

12
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
It
13
will
certainly
have
some
impact
on
diesel
fired
units.

14
They
have
quite
a
bit
to
go
to
get
to
the
levels
we
have.

15
There
are
natural
gas
engines
that
are
available
out
there
16
that
can
meet
the
'
03
standards.
Certainly,
the
'
07
17
standards
are
going
to
be
a
major
hurdle
for
those
types
18
of
technologies.

19
On
the
'
07
date
for
the
guidance,
the
way
that
20
we've
drafted
the
guidance
to
date
staff
would
be
21
periodically
following
advances
in
technology
and
updating
22
the
guidance
on
an
ongoing
basis
as
it
became
available.

23
The
BACT
process
is
in
place
for
those
pieces
of
24
equipment.
The
districts
are
required
to
do
a
25
case­
by­
case
evaluation
as
these
units
come
in
and
as
the
PETERS
SHORTHAND
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1
technology
becomes
available.
We
worked
closely
with
the
2
districts
as
we've
done
in
the
past,
and
certainly
work
3
with
them
to
make
sure
that
the
lowest
achievable
levels
4
are
met
on
any
of
these
units
as
they
become
available.

5
And
we
do
think
that
there
are
certain
6
applications
that
will
meet
the
'
07
standards
now,
and
the
7
turbines
and
other
technologies,
and
we
think
that
we'll
8
get
there
with
other
technologies
as
we
get
closer
to
'
07.

9
On
the
interim
standard
for
the
certification
10
program,
staff
has
established
a
fairly
aggressive
11
schedule
for
meeting
the
central
station
powerplant
12
levels.
It
basically
gives
the
manufacturers
a
four­
year
13
window
between
'
03,
which
is
when
the
first
set
of
14
standards
kick
in
in
'
07,
to
develop
the
technologies
to
15
be
able
to
compete
by
2007.

16
So
we
don't
think
that
it
makes
a
lot
of
sense
17
from
the
development
side
to
put
the
interim
standard
in
18
there.
We've
got
a
very
short
window
in
which
they
have
19
to
comply
and
it
will
keep
them
on
track
without
an
20
interim
standard.

21
As
far
as
the
CHP
issue
goes,
the
proposal
that
22
is
recommended
by
NRDC
­­
the
approach
that
staff
took
on
23
the
CHP
issue
was
basically
to
come
up
with
a
very
simple
24
approach
that
gave
credit
providing
you
meet
a
certain
25
cutoff,
which
is
the
60
percent
efficiency.

PETERS
SHORTHAND
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1
It's
a
factor
or
a
process
that
can
be
met
at
the
2
manufacturers'
level,
and
it
doesn't
need
to
have
3
site­
specific
evaluation.
So
the
manufacturer
could
4
design
the
equipment
to
meet
the
60
percent
efficiency,

5
and
once
they
were
certified,
then
they
could
sell
the
6
units
and
there
would
be
no
further
requirements
after
7
that.

8
NRDC's
methods
is
a
more
complicated
method.
We
9
feel
it
would
require
possibly
some
site­
specific
10
information
in
order
to
implement
that
procedure.

11
Two
other
issues
that
were
brought
up,
excluding
12
the
backup
generators,
staff
recognizes
that
there
is
a
13
need
under
certain
circumstances
to
have
emergency
backup
14
equipment.
And
the
only
way
to
fill
that
void
currently
15
are
with
technology
such
as
diesel
engines.
It's
staff's
16
goal
to
make
sure
that
diesel
engines
are
put
back
in
to
a
17
use
or
kept
in
a
use
where
they're
run
only
in
emergency
18
situations.
They're
not
used
for
load­
shedding
or
other
19
purposes.
And
providing
they're
kept
in
that
arena,

20
they're
used
for
those
true
situations
where
they're
21
needed,
it
didn't
make
sense
to
bring
them
under
guidance,

22
which
would
essentially
have
prohibited
the
use
of
those
23
units.

24
So
we
think
that
with
that,
in
addition,
backup
25
generators
are
being
looked
at
under
the
effort
that's
PETERS
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1
being
undertaken
with
the
diesel
risk
management
program.

2
We
will
be
bringing
recommendations
back
to
the
Board
next
3
year
some
time
for
retrofiting
and
new
standards
for
the
4
backup
engines.

5
As
far
as
the
portable
engines,
this
is
the
last
6
comment,
I
believe,
the
portable
engines
­­
under
the
7
portable
equipment
program
right
now,
a
portable
engine
is
8
a
unit
that
would
not
operate
at
a
site
more
than
12
9
months.
If
someone
were
to
bring
a
unit
in
and
operate
it
10
for
12
months
and
then
bring
in
another,
they
would
fall
11
outside
of
our
program.

12
In
addition
to
that,
we
have
supported
the
13
districts
and
basically
worked
with
the
districts
to
make
14
sure
that
certain
uses
of
portable
engines
are
not
15
occurring.
And
we
intend
to
bring
when
we
come
back
with
16
a
diesel
PM
update,
we
do
intend
to
bring
back
some
17
recommendations
for
dealing
with
issues
where
portable
18
equipment
may
be
misused
for
power
generation,
you
know,

19
basically
to
get
in
the
reg
and
to
make
sure
it's
firm
and
20
people
understand.
But
right
now
we
are
supporting
21
districts
and
making
sure
that
portable
equipment
is
not
22
misused.

23
So
with
that,
I
conclude.
I
think
I've
got
all
24
the
issues
that
were
raised.

25
CHAIRPERSON
LLOYD:
Yes,
the
answer
was
longer
PETERS
SHORTHAND
REPORTING
CORPORATION
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362­
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1
than
the
testimony.
It's
impressive.

2
(
Laughter.)

3
CHAIRPERSON
LLOYD:
Any
other
questions
from
the
4
Board?

5
Thank
you.

6
By
the
way,
I
understand
you're
going
to
be
7
getting
a
bill
from
staff
because
the
5,000
letters
burned
8
up
one
of
our
fax
machines.

9
(
Laughter.)

10
MS.
CHURCHILL:
I'm
sorry,
they
were
­­

11
(
Laughter.)

12
MS.
CHURCHILL:
I
hope
it
wasn't
a
problem.

13
CHAIRPERSON
LLOYD:
Thank
you.

14
Stan
Zwicker,
Sheryl
Carter
and
Todd
Campbell.

15
MR.
ZWICKER:
Good
morning,
Dr.
Lloyd
and
Members
16
of
the
Board.
I
was
just
thinking
on
the
way
up
here,

17
it's
been
about
28
years
since
I
first
appeared
before
the
18
Board
on
an
issue,
so
I
go
back
a
long
way
as
you
know.

19
My
name
is
Stan
Zwicker.
I'm
an
environmental
20
consultant
and
I
have
been
retained
by
Bowman
Power
who
21
must
be
the
only
viable
one,
since
Dr.
Burke
says
there's
22
only
one
viable
manufacturer.
I
hadn't
realized
Capstone
23
wasn't
viable,
Kevin.

24
Bowman
Power
systems
is
a
manufacturer
of
25
microturbines,
small
scale
microturbine
integrated
PETERS
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1
cogeneration
systems.
And
Mr.
Tony
Hines,
who
was
the
2
Vice
President
of
Operations
was
supposed
to
be
here
with
3
me
today
to
talk
about
some
of
the
business
issues.

4
However,
he
got
detained
on
the
east
coast
and
had
some
5
difficulties.

6
Bowman
appreciates
the
opportunity
to
participate
7
in
both
the
public
consultation
meetings
and
work
group
8
process
that
the
proceed
the
issuance
of
the
proposal,
and
9
we
wish
to
commend
the
staff
for
the
efforts
in
support
of
10
­­
and
are
supportive
for
the
Phase
1
standards.

11
Particularly,
we
fought
long
and
hard
for
the
12
inclusion
of
the
cogeneration
or
CHP
credit,
which
we
13
think
is
very
good,
and
we
think
it's
even
a
crucial
part
14
of
the
puzzle
for
the
deployment
of
DG,
because,
you
know,

15
the
efficiencies
that
you
get
when
you
take
a
microturbine
16
and
only
electric
goes
into
20
maybe
30
percent.
When
you
17
get
cogeneration,
you're
getting
80
percent
efficiency
and
18
we
think
that's
where
the
viable
economics
for
these
19
issues
are.

20
We
believe
that
this
is
consistent
with
the
21
intent
and
vision
by
the
Legislature
in
enacting
1298
to
22
promote
clean
efficient
energy,
and
we
intend
to
offer
23
microturbine
CHP
systems
which
meet
your
standards,

24
whatever
they
are,
for
the
certification
testing
program.

25
I
have
a
couple
of
points
I
wanted
to
make,
and
PETERS
SHORTHAND
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1
the
first
one
sort
of
is
to
look
from
a
business
aspect
2
I'm
trying
to
do
this
on
behalf
of
Tony,
because
obviously
3
dealing
with
the
business
aspect
is
not
my
cup
of
tea
on
4
this.

5
But
you're
looking
at
a
business
climate
where
6
end­
users
are
going
to
either
purchase
something
for
7
either
backup
or
DG
systems.
And
so
you're
looking
at
8
microturbines,
such
as
ours
or
Capstone
in
contrast
to
9
backup
diesel
fire
generators.
They're
only
going
to
10
purchase
one
unit.
And
so
what's
happening
by
imposing
11
and
not
treating
them
the
same
in
terms
of
the
emission
12
limits
they
have
to
meet,
you're
sort
of
putting
the
13
microturbines
or
the
cleaner
fuel
at
a
disadvantage.

14
And
we
really
think
you
need
to
look
at
all
these
15
from
the
same
perspective
in
terms
of
emission
16
requirements.
So
we
think
that,
however,
you
regulate
the
17
emergency
generators,
they
should
pretty
much
apply
to
the
18
same
systems
as
these,
so
we're
on
an
even
keel.

19
As
indicated
Bowman
supports
the
emission
limits
20
for
2003
with
the
inclusion
of
the
emission
credits
for
21
cogen.
We
do
have
several
concerns
with
certain
aspects
22
of
the
regulations
as
proposed
on
September
28th,
and
I
23
just
want
to
highlight
them.

24
First
of
all,
the
selection
of
January
2001
as
25
the
effective
date
and
2005
is
a
choice
for
the
date.

PETERS
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1
And
secondly,
we
have
some
concerns
regarding
the
2
final
number
that
you
have
for
2007
of
.07.

3
Regarding
the
selection
of
the
2000
date,
2000
4
sounds
good.
As
the
earliest
practical
date,
we
don't
5
think
it's
real.
We
think
it's
maybe
the
earliest
6
possible
date.
We
believe
that
it's
going
to
necessitate
7
on
our
part
significant
technological
breakthroughs
in
8
order
to
meet
the
standard
­­
that
standard
in
2007.
It's
9
about
an
order
of
magnitude
lower
than
what
you've
got
for
10
2003.

11
That's
going
to
require
considerable
investment,

12
and
most
likely
more
time
to
accomplish
it,
if,
in
fact,

13
it
is
even
achievable
this
technology,
and
I
think
it
is,

14
but
it's
going
to
take
awhile.

15
A
major
concern
with
your
date,
is
there
going
to
16
be
sufficient
time
for
us
to
recover
the
costs
from
an
17
investment
standpoint
in
meeting
these
units
for
2003
and
18
at
the
same
time
not
being
able
to
sell
that
product
19
anymore,
if
they
have
to
make
substantial
investments
and
20
substantial
changes.

21
Four
year
life
cycle
is
minimal
at
best.
So
we
22
wanted
to
­­
and
remember
that
these
units
are
going
to
be
23
sold
in
the
hundreds
maybe
a
couple
of
thousand.
It's
not
24
like
you're
selling
automobiles
in
the
millions,
so
the
25
cost
recovery
is
a
lot
tougher
for
a
product
like
this.

PETERS
SHORTHAND
REPORTING
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916)
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1
The
concept
of
the
technology
review
as
proposed
2
is
a
vital
step
and
we're
very
pleased
that
that's
going
3
to
be
there,
and
we
endorse
the
need
for
it.
We
think,

4
however,
that
maybe
a
more
appropriate
approach
for
the
5
Board
would
be
to
defer
adopting
Phase
2
emission
limits
6
until
this
technology
review
is
conducted.

7
Their
approach
would
provide
all
of
us
with
more
8
time
and
the
ability
to
get
more
information.
Obviously,

9
we
have
limited
manufacturers,
limited
cost
information.

10
We
have
a
standard
going
in
place
in
the
year
2003.
We
11
have
a
plan
to
review
it
in
2005.
And
I
think
that
12
perhaps
we
can
delay
it
till
that
point
till
we
have
some
13
of
the
data
and
some
of
the
questions
answered.
There's
14
really
no
urgency.

15
The
only
urgency
would
be
is
if
you
really
stick
16
to
the
2007
date,
which
I
think
is
the
earliest
possible
17
date
not
the
earliest
practical
date.

18
And
so,
in
essence,
I
think
if
you
go
and
have
19
that
review
and
gather
all
that
information,
I
think
it
20
should
be
­­
what
you
should
do
is
have
that
technology
21
report
referred
back
to
the
Board,
which
it
is,
but
have
22
it
for
reconsideration
and
consideration
of
what
standard
23
you're
going
to
adopt
for
the
second
level.

24
Moving
on.

25
CHAIRPERSON
LLOYD:
Stan,
I'm
a
little
worried
PETERS
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1
that
you're
reading
all
your
pages
here.

2
MR.
ZWICKER:
I'm
trying
to
skim
through
them.

3
CHAIRPERSON
LLOYD:
You
haven't
done
very
well
so
4
far.

5
(
Laughter.)

6
CHAIRPERSON
LLOYD:
Maybe
you
could
just
7
highlight
a
couple
of
things
there,
because
we
do
have
the
8
written
statement,
and
I
think
it
would
be
helpful
for
us,

9
because
I
know
you
have
some
good
points
here,
I
don't
10
want
those
to
get
lost.

11
MR.
ZWICKER:
I
wanted
to
go
onto
the
.07
number
12
and
I
wanted
to
raise
the
issue
of,
when
you
go
to
talk
13
about
central
station
powerplants,
I
like
to
make
the
14
differentiation
between
equal
and
equivalent.
And
I
think
15
that's
something
you
need
to
consider.

16
When
you
look
at
the
central
station
powerplant,

17
and
I'll
talk
in
parts
per
million,
like
two
and
a
half
18
parts
per
million,
and
you
go
out
there
and
say
now
we'll
19
have
to
make
the
small
microturbines
meet
that
central
20
station
powerplant,
I
don't
think
that's
what
the
21
legislation
said.

22
I
think
in
essence
the
legislation
used
the
word
23
equivalent
not
equal
and
that
may
be
­­
that's
a
24
distinction,
but
what
does
equivalent
mean?
Microturbines
25
are
not
designed
to
have
the
­­
will
not
have
any
of
the
PETERS
SHORTHAND
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1
control
technologies
if
they
wouldn't
be
economic
with
2
them.

3
So
if
we
can
meet
numbers
that
are
better
than
4
nine,
which
we
can
without
all
that,
we
avoid
issues
such
5
as
the
ammonia
issues
and
other
things,
and
I
think
you
6
need
to
consider
that
in
the
equivalency.
What
isn't
7
appropriate
for
a
small
microturbine
unit
that,
in
our
8
case
right
now
is
an
80
kilowatt
unit
and
how
much
total
9
emissions
it
puts
­­
total
emissions
it
puts
out
versus
a
10
rate
that
you're
specifying
that
you
have
for
a
central
11
powerplant.

12
I
think
you
need
to
be
a
more,
at
least
to
13
consider
the
differences
between
equal
and
equivalent
and
14
I've
made
that
argument
before,
and,
you
know,
and
I
know
15
everybody
is
aware
of
it,
but
I
think
it's
something
I
16
wanted
to
point
out
here.

17
Finally,
the
old
argument
about
BACT
is
it
in
a
18
permit
or
is
it
achieved
in
practice,
and
I
think
we're
19
submitting
that
even
though
you've
got
things
in
a
permit
20
and
you're
using
that
number,
as
the
bay
basis
for
setting
21
the
standards
hasn't
really
been
achieved
in
practice
yet
22
and
can
you
really
go
with
that.

23
And
I
think
those
are
the
key
issues,
and
I
know
24
you've
got
all
details
here.
And,
again,
just
to
sum
up,

25
we
thank
you
for
the
opportunity
to
be
in
this
process
and
PETERS
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1
we're
going
to
be
around.
And
I
know
Dr.
Burke,
you're
2
back,
my
comment
was
I
didn't
know
Capstone
wasn't
viable
3
anymore?

4
BOARD
MEMBER
BURKE:
What
do
you
mean
it's
not
5
viable?

6
MR.
ZWICKER:
Well,
you
said
there
was
only
one
7
viable
microturbine
manufacturer,
and
since
I'm
8
representing
Bowman.

9
BOARD
MEMBER
BURKE:
If
I
did
say
that,
I
didn't
10
mean
to
say
that,
I
apologize.

11
MR.
ZWICKER:
That's
okay,
because
I
was
sort
of
12
making
a
joke
out
of
it,
because
we
feel
we're
viable,
and
13
just
we
have
some
units
for
commercial
application.

14
BOARD
MEMBER
BURKE:
What
were
your
gross
sales
15
last
year?

16
MR.
ZWICKER:
Don't
talk
about
last
year.
I
was
17
going
to
say
we
have
units
coming
being
shipped
into
18
California
right
now.
There
will
be
by
the
end
of
the
19
year
for
some
service.
And
we
probably
have
several
more
20
coming.

21
BOARD
MEMBER
BURKE:
I
didn't
mean
to
insult
your
22
company.

23
But
over
the
historical
period
of
the
last
four
24
or
five
there's
only
been
one
real
viable
microturbine.

25
Now,
you
may
be
the
second.

PETERS
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1
MR.
ZWICKER:
We
think
we
are
­­

2
BOARD
MEMBER
BURKE:
I
think
they're
the
second
3
and
they
just
dropped
out.

4
MR.
ZWICKER:
We
think
we
are
the
second
and
we
5
invite
you
down
to
see
our
unit
any
time.

6
BOARD
MEMBER
BURKE:
I
would
move.

7
MR.
ZWICKER:
Thank
you
very
much
and
that
sort
8
of
sums
up
the
statement.
I'll
be
happy
to
try
and
answer
9
any
questions.

10
CHAIRPERSON
LLOYD:
Thank
you,
Stan.
I
11
appreciate
your
cutting
it
short
with
the
high
points.

12
I'd
like
to
ask,
clearly
Stan
has
made
that
13
column
and
staff
must
have
evaluated
this
and
I
don't
know
14
if
that's
a
legal
or
technical
question
there.

15
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Well,
we're
16
trying
to
get
emissions
so
that
per
kilowatt
hour
of
17
electricity
produced
the
environment
doesn't
suffer.
If
18
we
use
a
small
unit
rather
than
produce
it
in
the
central
19
powerplant,
that's
our
ultimate
goal
is
equal,
you
know,

20
protection
of
the
environment.

21
CHAIRPERSON
LLOYD:
So
you
feel
­­

22
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
You
know,
the
23
consumer
of
the
electricity
has
the
option
of
getting
it
24
many
different
ways.

25
CHAIRPERSON
LLOYD:
So
you've
pretty
­­

PETERS
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1
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
And
then
2
there
are
zero
options
that
are
involving
such
as
solar
3
and
others
for
on
site
for
those
that
choose
that,
so
that
4
we
think
the
clear
goal
if
you're
going
to
use
a
5
combustion
source
or
a
fuel
cell
is
to
get
those
emissions
6
so
that
the
environment
doesn't
see
any
additional
damage
7
over
the
alternative
method.

8
CHAIRPERSON
LLOYD:
You'd
be
pretty
confident
if
9
you
went
to
Senator
Bowen
and
asked
her
what
she
intended,

10
that
she
would
agree
with
staff.

11
DEPUTY
DIRECTOR
SCHEIBLE:
I
think
we
are.
I
12
think
we're
interpreting
the
statute
correctly.

13
CHAIRPERSON
LLOYD:
Questions
from
Professor
14
Friedman.

15
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
just
to
16
follow­
up,
I
hope
this
is
germane
that
last
question,
but
17
I
think
EMA
raised
a
similar
question
about
biomass
fuel,

18
gas
engines
and
whether
these
certification
regulations
19
would
apply
to
them,
and
suggested
that
it
would
not
be
20
really
very
good
public
policy
if
our
standards
precluded
21
as
a
practical
matter
the
manufacture
of
those
kinds
of
22
sources
of
energy.

23
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
Right.
I
24
don't
think
we
see
distributed
generation
units
that
fall
25
under
the
certification
reg
going
in
and
using
biomass.

PETERS
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1
That's
going
to
be
in
a
permitted
application
that
is
2
covered
by
the
guidance,
where
we
do
make
an
allowance
for
3
recognizing
that
you
can't
control
the
emissions
4
associated
with
combusting
the
biogas
as
well
as
you
can
5
pipeline
natural
gas.

6
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
then
more
7
broadly
the
whole
issue
of
cost
benefit
and
the
problem
of
8
the
manufacturer
of
these
small
units
complying
with
9
standards.
I
understand
the
argument
that
it's
got
the
10
same
impact
on
what
we
breathe,
but
maybe
there
needs
to
11
be
some
flexibility
under
what's
called
the
best
available
12
technology
and
under
what
we
treat
as
equal
or
equivalent.

13
I
mean
we
want
to
be
careful
that
we
don't
14
unconsciously
and
unwittingly
drive
out
of
the
marketplace
15
what
otherwise
might
be
useful
and
economic
if
the
16
difference
is
not
significant.

17
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
I
think
18
that's
the
type
of
issue
that
we'll
readdress
in
2005
when
19
we
see,
okay,
much
progress
can
be
made,
is
the
goal
going
20
to
be
made,
if
not,
is
it
close,
and
if
it's
close
will
21
additional
time
or
should
we
set
an
interim
level.
If
22
it's
not
even
close,
then
I
think
we
have
to
make
the
23
decision
is
the
technology
ever
going
to
make
it
or
do
we
24
say
that
that's
not
viable.

25
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
my
PETERS
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1
understanding
is
that
in
2005
there
will
be
a
review
and
2
it
will
be
before
this
Board,
however
it's
constituted
at
3
that
time
and
there's
ample
opportunity
at
that
time
in
4
light
of
what's
learned
and
in
light
of
then
existing
best
5
available
practices.

6
MR.
ZWICKER:
I
just
wanted
to
make
certain
­­

7
BOARD
MEMBER
HUGH
FRIEDMAN:
For
these
8
proposed
­­
this
is
another
example,
it
seems
to
me,
of
9
engineering
by
rule.
And
we're
glad
that
you're
worried
10
about
it,
but
we
don't
want
you
to
lose
a
lot
of
sleep.

11
MR.
ZWICKER:
Don't
worry,
I
wouldn't
lose
any
12
sleep.
I
just
wanted
to
make
sure
that,
you
know,
when
we
13
have
the
technology
review
that
all
items
are
open.
I
14
mean,
I
went
into
the
state
and
said
if
you
choose
to
15
adopt
the
rule
today,
as
it
is
with
the
numbers
today,

16
then
let's
make
sure
we
seriously
consider
what's
really
17
there
instead
of
having
just
a
staff
report
validating
18
what
we've
done.

19
BOARD
MEMBER
HUGH
FRIEDMAN:
This
is
a
clear
20
signal
that
is
the
staff.
And
if
adopted,
it's
our
goal,

21
this
is
what
we
want
to
achieve,
and
hopefully
we
could
22
achieve
it
by
this
time
line,
but
with
recognition
that
23
we'll
have
to
take
another
look
beforehand.

24
MR.
ZWICKER:
Fine.

25
CHAIRPERSON
LLOYD:
Mr.
Kenny
I
think
has
PETERS
SHORTHAND
REPORTING
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1
something
to
say.

2
EXECUTIVE
OFFICER
KENNY:
If
I
could
just
add
a
3
couple
of
things.
I
went
back
and
was
looking
at
the
4
statute
as
the
dialogue
was
going
on,
and
the
statute
is
5
actually
fairly
clear
and
it
really
provides
both
a
6
challenge
and
an
opportunity
to
the
industry.

7
And
the
opportunity
is
essentially,
you
know,
to
8
provide
these
small
microturbines
into
the
marketplace.

9
But
the
challenge
is
and
it's
provided
by
the
Legislature,

10
is
that
the
Legislature
did
direct
that
they
be
as
clean
11
as
central
station
powerplants.

12
And
what
the
Legislature
was
directing
us
to
do
13
was
to
really
provide
for
standards
that
were
equivalent
14
to
central
station
powerplant
standards
and
that's
what
we
15
tried
to
do.
And
that
is
the
challenge
for
the
industry
16
in
this
particular
situation,
and
it
will
probably
be
a
17
very
difficult
challenge.

18
CHAIRPERSON
LLOYD:
Yeah.

19
Again,
and
reading
from
that,
it
does
say
that
it
20
is
in
the
public
interest
to
encourage
the
deployment
of
21
distributed
generation
in
a
way
that
has
a
positive
effect
22
on
air
quality,
so
that's
supporting
what
you're
saying.

23
BOARD
MEMBER
BURKE:
Mr.
Chairman.

24
CHAIRPERSON
LLOYD:
Dr.
Burke.

25
BOARD
MEMBER
BURKE:
After
September
11th,
I
PETERS
SHORTHAND
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CORPORATION
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1
think
there's
been
a
reassessment
of
that.
And
adding
2
distributed
generation
throughout
the
United
States
may
be
3
a
national
defense
issue
or
a
national
security
issue.

4
So,
you
know,
as
important
as
it
is
from
the
air
quality
5
perspective,
it
is
also
a
very
crucial
defense
issue.

6
MR.
ZWICKER:
Just
to
sum
up,
this
is
a
good
7
technology.
It's
an
emerging
technology,
and
it's
going
8
to
grow,
and
it's
going
to
have
a
good
impact
on
not
only
9
air
quality
over
what's
out
there
today,
but
also
in
the
10
energy
security
area,
and
so
we
need
not
do
anything
11
that's
going
to,
you
know,
block
it
from
emerging.
And
I
12
think
we're
on
the
right
track.

13
CHAIRPERSON
LLOYD:
Yeah.
And,
again,
I
think
14
staff
wants
to
have
it
both
ways,
we
want
to
have
units
15
out
there,
and
we
want
to
protect
air
quality.

16
Thank
you
very
much.

17
And
I
guess
we
need
the
competition
so
we
want
to
18
keep
you
in
business
as
well.

19
Next,
we
ever
Sheryl
Carter,
Todd
Campbell
and
20
Bonnie
Holmes­
Gen.

21
MS.
CARTER:
Good
morning.
I'm
Sheryl
Carter.
I
22
represent
the
Natural
Resources
Defense
Council
and
our
23
nearly
100,000
members
in
California.
We've
been
working
24
on
energy
and
air
quality
related
issues
in
California
for
25
over
two
decades.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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75
1
I
want
to
join
those
who
came
before
me
and
I'm
2
positive
those
who
will
come
after
me
in
commending
the
3
staff
for
the
excellent
work
that
they
did
on
these
4
documents.

5
As
we
just
covered,
the
legislation
that
directs
6
the
ARB
to
develop
both
the
certification
program
7
regulations
and
the
guidance
to
districts,
which
is
SB
8
1298,
recognizes,
as
do
we,
that
distributed
generation
9
can
contribute
to
helping
California
meet
the
energy
10
requirements
of
its
citizens
and
businesses.

11
It
also
declares,
as
Chairman
Lloyd
just
12
mentioned,
that
it
is
in
the
public
interest
to
encourage
13
the
deployment
of
distributed
generation
technology
in
a
14
way
that
has
a
positive
impact
on
air
quality.

15
It's
the
attempt
to
balance
these
two
16
considerations
that
led
to
the
adoption
of
a
phased
17
emissions
standard
approach
that
we're
discussing
here
18
today
to
reach
the
best
available
control
technology
19
emission
level
for
permitted
central
station
powerplants
20
in
California.

21
My
comments
are
going
to
address
both
the
22
certification
regulation
and
the
guidance
to
districts,

23
and
I'll
try
to
be
very
clear
on
which
applies
to
which
24
one
as
some
of
them
apply
to
both.

25
I
would
love
to,
if
we
had
more
time,
up
here,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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76
1
I'd
love
to
spend
time
discussing
a
lot
of
the
things
that
2
are
right
with
the
regulations
and
with
the
guidance
3
document.
They
certainly
outweigh
the
issues
from
4
modification
that
I'm
going
to
suggest
today,
but
we
don't
5
have
time
for
that.
But
I
just
wanted
to
note
that
there
6
are
more
things
that
are
right
with
these
documents
than
7
not.

8
We
strongly
support
the
proposed
regulation
and
9
draft
guidance
and
urge
the
Board
to
adopt
them
with
some
10
very
important
modifications,
which
we
believe
will
better
11
encourage
appropriate
distributed
generation
technologies
12
for
California
without
adverse
environmental
impacts.

13
With
these
modifications,
this
regulation
and
14
guidance
could
become
national
models
for
distributed
15
generation
regulations.
I
have
six
modifications
which
16
are
detailed
in
our
written
comments
that
I'll
just
17
briefly
cover,
and
then
I'd
be
happy
to
answer
any
18
questions
after
that.

19
The
first
modification,
the
guidance
to
districts
20
we
believe
should
establish
a
single
aggressive
21
performance
based
emission
standard
or
BACT
level
at
an
22
output
based
equivalent
of
five
parts
per
million
NOx.

23
The
draft
proposes
seven
initial
standards.
We
24
urge
the
Board
to
adopt
one
performance
based
standard
25
here.
There's
no
reason
to
allow
different
environmental
PETERS
SHORTHAND
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362­
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1
standards
based
on
technology
or
size
since
the
units
2
covered
performed
the
same
or
substitutable
functions.

3
Absent
this
modification
by
the
Board,
we
urge
4
the
Board
to
strongly
state
the
intent
that
one
5
performance
standard
should
be
reached
as
soon
as
6
possible.

7
The
second
modification,
the
guidance
to
8
districts
should
clarify
that
the
emission
standard
for
9
generation
will
be
equivalent
to
best
available
control
10
technology
emission
levels
for
a
central
station
11
powerplant
in
California
by
at
most
2007,
which
would
be
12
consistent
with
the
certification
program
for
the
smaller
13
DG
units,
if
not
sooner.

14
Only
a
clear,
strong
recommendation
in
the
ARB
15
guidance
to
districts
will
incentivize
manufacturers
to
16
make
the
necessary
technological
advances.

17
The
third
modification,
both
the
certification
18
regulation
and
the
guidance
to
districts
provide
for
a
19
combined
heat
and
power
credit.
And
NRDC
strongly
20
supports
such
a
credit.

21
However,
we
have
proposed
an
alternative
approach
22
to
the
two
different
credit
calculation
methodologies
23
proposed
by
staff,
which
provide
a
more
effective
24
incentive
to
encourage
improvement
in
efficiency
without
25
compromising
environmental
protection.
Our
methodology
PETERS
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1
directly
addresses
the
avoided
emissions
in
a
combined
2
heat
and
power
system
and
will
consistently
estimate
a
3
realistic
emissions
credit.

4
We
urge
the
Board
to
modify
both
the
5
certification
regulation
and
the
guidance
to
districts
to
6
include
the
credit
methodology
that
we
proposed
in
our
7
comments,
and
also
include
a
greater
recognition
of
the
8
climate
change
mitigation
benefits
of
greater
9
efficiencies.

10
Absent
adoption
of
our
methodology
for
both
the
11
certification
and
the
guidance,
we
urge
you
to
at
least
12
adopt
our
methodology
for
the
guidance
document.
Based
on
13
the
comments
made
by
staff,
our
methodology
is
much
more
14
easily
used
if
you're
looking
on
a
site­
by­
site
basis,

15
which
would
still
apply
to
the
guidance
documents.

16
Our
fourth
modification
that
we
proposed
to
the
17
Board
is
that
both
the
certification
regulation
and
18
guidance
to
districts
should
clarify
the
Board's
intent
to
19
exclude
only
true
emergency
generators,
not
all
diesel
20
generators,
to
strengthen
enforcement
guidance
to
ensure
21
this
outcome.

22
The
Board
should
recommend
in
the
guidance
that
23
districts
adopt
the
strict
ARB
definition
of
the
emergency
24
generation,
which
is
generation
that's
used
when
power
is
25
interrupted.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
The
fifth
modification,
if
portable
generators
2
are
to
be
exempted
from
the
certification
regulation
and
3
the
guidance
to
districts,
the
Board
should
direct
staff
4
to
reevaluate
the
standards
included
in
the
portable
5
equipment
registration
program
to
make
them
consistent
6
with
the
standards
adopted
by
the
certification
regulation
7
and
guidance
as
soon
as
practicable.

8
Portable
generators
perform
the
same
or
9
substitutable
functions
as
other
distributed
generation
10
and
should
be
held
to
the
same
environmental
standards.

11
And
finally,
we're
concerned
that
with
only
12
initial
and
final
standard
levels
and
dates
established,

13
this
is
for
the
certification
regulation,
the
technology
14
review
at
2005,
just
two
years
after
the
program
begins,

15
becomes
not
a
check­
in
on
advancing
technology
and
16
markets,
but
rather
an
almost
automatic
delay
in
the
final
17
standards
at
2007.

18
We
believe
that
an
interim
standard
would
help
19
ensure
progress
toward
the
2007
standard.
Absent
this
20
modification,
we
urge
the
Board
to
strengthen
its
intent
21
to
hold
to
the
2007
standard.

22
Distributed
generation,
we
believe,
can
play
an
23
important
role
in
meeting
our
energy
needs
and
reducing
24
the
environmental
impacts
of
the
current
energy
system.

25
But
this
can
only
happen
if
clear
regulations
are
PETERS
SHORTHAND
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1
established
now
to
aim
the
market
in
the
right
direction.

2
And
we
urge
the
Board
to
adopt
both
these
3
documents
with
the
modifications
that
we've
suggested
in
4
order
to
do
this.

5
That's
it.

6
Thanks.

7
CHAIRPERSON
LLOYD:
Thank
you
very
much.
And
I
8
appreciate
again
your
constructive
suggestions,
if
we
9
don't
adopt,
exactly
what
you
want.
That
was
very
be
10
helpful.

11
The
comment,
maybe
staff
could
answer,
in
terms
12
of
the
guidance
to
districts
to
incorporate
CHP,
Sheryl
13
mentioned
that
the
NRDC
methodology,
at
least
in
that
14
case,
would
be
easier
for
the
districts
to
use.
Does
15
staff
concur?

16
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
17
Tollstrup.
Again,
one
of
the
issues
that
we
have
with
the
18
CHP
on
the
district
side
is
that
under
the
proposal
that
19
NRDC
is
offering,
you're
basically
giving
credit
for
20
avoided
emissions.
There
are
some
issues
there
with
BACT
21
and
how
you
credit
those
emissions.
The
proposal
that
we
22
have
is
a
suggestion
to
the
districts.
We
don't
give
any
23
specifics
on
how
they're
going
to
implement
it
or
how
24
they're
going
to
get
through
some
of
the
federal
hurdles
25
that
exist.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
I
think
as
far
as
CHP
goes
on
that
end,
we'd
like
2
to
continue
to
work
with
folks,
the
districts
and
others
3
to
see
if
there
is
someway
that
can
be
incorporated.
But
4
to
give
them
credit
as
suggested
in
that
CHP
calculation
5
method
is
problematic
at
this
time.

6
CHAIRPERSON
LLOYD:
So
was
that
a
no?

7
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Yes.

8
Basically,
I
think
that
the
suggestion
that
we
have
right
9
now
is
basically
that
­­

10
CHAIRPERSON
LLOYD:
Do
you
see
merit,
though,
in
11
maybe
working
with
the
districts
and
CAPCOA,
and
maybe
12
NRDC
and
the
Board
to
see
if
we
can
craft
something
which
13
would
­­

14
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:

15
Absolutely.
You
know,
EPA
is
under
way
right
now
to
work
16
out
a
CHP
policy.
There
are
some
issues
with
it,
and
I
17
think
that
it's
just
emerging
and
there's
a
lot
of
work
18
that
needs
to
be
done
to
see
how
this
fits
in.

19
CHAIRPERSON
LLOYD:
I
think
the
comment
you
had
20
in
terms
of
just
true
emergency
generators,
I
don't
think
21
that
staff
would
object
to
that.

22
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:

23
Absolutely.

24
CHAIRPERSON
LLOYD:
Ms.
D'Adamo.

25
BOARD
MEMBER
D'ADAMO:
If
what
you
just
described
PETERS
SHORTHAND
REPORTING
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916)
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82
1
would
take
place,
would
there
be
enough
flexibility
within
2
the
resolution
to
allow
for
that
process?

3
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Kitty
4
Martin.
One
of
the
earlier
slides
in
the
guidance
5
document
we
asked
that
the
Executive
Officer
be
given
the
6
authority
to
direct
staff
to
update
the
guidance
document
7
in
two
areas.

8
One
was
for
BACT
determination,
the
other
was
the
9
process
for
handling
CHP.
So
as
we
are
currently
crafting
10
the
resolution,
yes,
there
is
flexibility.

11
BOARD
MEMBER
D'ADAMO:
Thank
you.

12
CHAIRPERSON
LLOYD:
I
had
a
question
here.
This
13
has
come
up
several
times
and
I
guess
to,
if
you
like,

14
this
is
a
case
where,
on
the
face
of
it,
you
would
think
15
setting
an
interim
standard
in
2005
would
make
a
lot
of
16
sense
and
basically
trying
to
make
sure
that
we
reach
our
17
target
in
2007
to
show
there's
progress.

18
But
I
also
have
heard,
which
I
think
heard
from
19
staff,
is
that
that
could
actually
be
counter
productive.

20
Maybe,
you
could
just,
for
all
of
us,
just
educate
up
on
21
that
point.

22
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Well,

23
I
believe
that,
you
know,
the
standard
that
we've
set
in
24
2007
to
be
equivalent
to
central
station
powerplant,

25
although
there
are
some
technologies
now
that
will
meet
PETERS
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1
those
standards
currently,
there
are
significant
hurdles
2
to
be
overcome
for
some
of
the
fossil
fuel
fired
units.

3
And
to
go
through
the
design
and
the
retooling
4
and
marketing
of
this
type
of
equipment,
obviously,
takes
5
time.
With
the
first
standard
kicking
in
in
2003
and
the
6
second
standard
following
just
a
short
four
years
later,

7
you
know,
we
felt
that
that
was
adequate
incentive,
you
8
know,
with
that
firm
standard
in
2007
to
move
towards
9
getting
that
standard
in
place.

10
In
addition
to
that,
you
know,
whoever
can
get
11
there
first
is
basically
going
to,
you
know,
have
an
12
advantage
marketwise.
So
we
think
there's
some
incentive
13
there
in
the
marketplace
to
get
this
out
there
as
soon
as
14
possible.

15
CHAIRPERSON
LLOYD:
We
understand
that,
if
I
hear
16
this
correctly,
and
it
certainly
hurts
us
that
in
maybe
17
2006
Texas
will
have
a
tougher
standard
than
we
do.

18
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Texas
19
has
­­
they
have
adopted
a
distributed
generation
program.

20
Their
standards,
they
do
have
an
interim
standard
that
21
kicks
in
in
2005,
and
then
they
have
the
final
standard.

22
CHAIRPERSON
LLOYD:
And
what
is
that
standard
in
23
2005?

24
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
.14.

25
CHAIRPERSON
LLOYD:
And
ours
will
be?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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84
1
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
.07.

2
CHAIRPERSON
LLOYD:
No,
when
is
ours?

3
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
In
4
2007
ours
will
be
.07.

5
CHAIRPERSON
LLOYD:
But
in
2005
there's
will
be
6
.14
and
ours
will
be
.5.

7
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
.5
8
right
now.

9
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
We
went
back
10
and
forth
with
this
at
the
staff
level.
And
so
we
know
11
what
the
ultimate
goal
is,
which
is
to
reach
central
12
power.
It
looked
like
there's,
it's
at
least
possible,
we
13
can't
say
for
certain
that
will
happen,
but
it's
possible
14
it
will
happen.

15
We
decided
to
go
for
the
gold
and
do
it
in,
what
16
we
thought
was
the
minimum
time
possible,
which
was
four
17
years
or
five
years
from
today,
as
opposed
to
the
18
alternative
of
setting
an
interim
standard
which
would
be
19
something
of
a
goal
setting
without
clear
direction,
and
20
then
delaying
time
for
a
two­
step
process.

21
So
we
think
that
the
time
frame
we've
recommended
22
and
with
the
one
step,
offers
better
prospect
for
getting
23
where
we
want
to
go
as
soon
as
possible.
And
quite
24
frankly,
we'll
have
to
watch
this
closely
and
come
back
25
and
see
whether
or
not
that
was
right,
but
it's
clearly
a
PETERS
SHORTHAND
REPORTING
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362­
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85
1
judgment
call
over
which
way
to
go.

2
And
it's
not
like
there's
some
technology
out
3
there
we
say
we
know
in
three
years
we
can
get
this
in
4
half.
We
don't
know
about
the
second
half.
We've
got
to
5
work
solving
the
whole
problem.

6
CHAIRPERSON
LLOYD:
I
appreciate
that.

7
Dr.
Burke.

8
BOARD
MEMBER
BURKE:
I'm
going
to
support
this
9
regulation.
And,
Ms.
Carter,
I
don't
want
you
to
take
10
this
personally,
I
support
NRDC
in
a
great
number
of
their
11
efforts.

12
But
something
that
has
been
troubling
me
for
a
13
number
of
years,
you
get
up
and
you
say
I
represent
14
100,000
people.
Do
you
know
that
for
a
fact?

15
MS.
CARTER:
I
think
yes.

16
BOARD
MEMBER
BURKE:
Do
you
know
that
there
are
17
100,000
people
in
NRDC?

18
MS.
CARTER:
We
actually
have
550,000
members
in
19
the
U.
S.
In
California
I
said
we
have
nearly
100,000
20
members.

21
BOARD
MEMBER
BURKE:
That's
great.
Is
it
a
22
secret
organization?

23
MS.
CARTER:
No,
it
is
not.

24
BOARD
MEMBER
BURKE:
Well,
then
why
isn't
your
25
membership
list
made
available
to
the
public?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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86
1
You
see
because
every
time
NRDC
testifies
before
2
either
South
Coast
or
this
Board,
I'm
not
sure
who
you
3
really
represent,
because
if
you
say
we
represent
500,000
4
people
across
the
United
States,
but
I
can't
tell
you
who
5
they
are,
then,
you
know,
it's
­­
I
mean,
I'm
just
­­
this
6
is
not
you
personally.
I'm
going
to
be
on
this
the
rest
7
of
my
term
here
and
at
the
South
Coast,
because
I
think
8
that
when
people
­­
we
demand
to
know
who
industry
is
when
9
they
come
here,
and
the
environmentalists
we
need
to
know
10
who
they
are,
because
there
have
been
a
lot
of
things
in
11
this
country
we've
been
taking
for
granted,
when
people
12
come
up
to
testify
to
make
sure
we
say
that
they
are
who
13
they
are
on
the
face
value.

14
But
I'm
going
to
be
looking
behind
everybody.

15
NRDC
is
going
to
be
one
of
them,
too.
I've
asked
your
16
lawyers
enumerable
times
who
are
your
members,
who
are
17
your
contributors,
and
how
do
you
formulate
policy?

18
Nobody
seems
to
be
able
to
tell
me
that.

19
Some
mythical
thing
out
of
New
York
City,
which
20
puts
out
a
brochure
and
lists
about
12
board
members
and
21
then
after
that
nothing.
So
I
appreciate
your
testimony.

22
I
agree
with
you
on
this
issue
today,
but
I
really
would
23
like
to
know
who
you
and
some
of
these
other
people
really
24
represent.

25
So
if
you
go
back
to
your
people,
you
can
tell
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
87
1
them
if
they
really
want
credibility
as
far
as
I'm
2
concerned,
the
rest
of
my
board
members
may
be
totally
3
satisfied,
but
I'm
not
going
to
be
totally
satisfied
4
anymore
till
I
know
who
really
are
your
members.

5
CHAIRPERSON
LLOYD:
Thank
you.

6
Thank
you
very
much.

7
Todd
Campbell.

8
And
now
you
know
the
next
question
from
Dr.

9
Burke,
the
Coalition
for
Clean
Air.

10
MR.
CAMPBELL:
We
represent
26
people
that
I
know
11
of.

12
(
Laughter.)

13
BOARD
MEMBER
BURKE:
It
really
makes
it
tough.

14
MR.
CAMPBELL:
Twenty­
six
people,
that
would
be
15
staff
and
Board.

16
(
Laughter.)

17
MR.
CAMPBELL:
But
we
claim
higher.
My
name
is
18
Todd
Campbell.
I'm
the
policy
director
for
the
Coalition
19
for
Clean
Air.
I'd
like
to
wish
a
good
morning
to
20
everyone
on
the
Board
and
good
morning,
Chairman
Lloyd
and
21
Members
of
the
Board.

22
We
strongly
support
this
rule
before
you
today.

23
The
governing
board
has
an
opportunity,
in
our
opinion,
to
24
take
a
big
bite
out
of
the
emissions
apple
by
passing
this
25
rule.
There's
been
a
lot
of
discussion
on
cost
PETERS
SHORTHAND
REPORTING
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916)
362­
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1
effectiveness
today.
And
one
thing
I'd
like
to
remind
the
2
Board
is
we're
in
2001,
and
these
regulations
fall
into
3
the
2003
and
2007.

4
However,
you
know,
most
of
all
these
5
technologies,
if
not
all,
are
actually
in
place
today.

6
Certainly,
fuel
cells
are
out
there
and
with
the
release
7
of
our
joint
report
with
the
California
Public
Interest
8
Research
Group,
the
Good
the
Bad
and
the
Other,
we
give
9
you
several
examples
of
what
we
consider
to
be
very
viable
10
technologies
to
meet,
very
aggressive
standards.

11
I
also
have
strong
faith
in
the
Air
Resources
12
Board
staff,
and
I
think
they
do
excellent
work.
They
13
also
have
the
opportunity
to
utilize
resources.
One
of
14
the
biggest
gems
I
believe
is
the
South
Coast
Air
Quality
15
Management
District
through
the
good
work
of
Dr.

16
Wallerstein
and
Dr.
Lu
and
the
technology
advancement
17
office.
There
are
many
districts
out
there,
but
the
South
18
Coast
in
particular,
that
are
advancing
technology
through
19
the
technology
advancement
office.

20
And
so
I
just
want
to
remind
the
Board
that
we
21
are
facing
issues
of
increased
density,
increased
growth,

22
and
the
State
is
failing
to
meet
its
air
quality
goals.

23
We're
struggling
to
meet
our
air
quality
goals.
So
we
24
need
to
take
the
biggest
bite
of
the
apple
and
be
25
aggressive
and
evaluate
our
positions
as
we
go
along,
but
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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89
1
certainly
we've
got
to
keep
our
eyes
on
zero,
and
this
is
2
what
this
agency
has
stood
for
for
quite
some
time,
I
3
believe,
at
least
the
beginning
of
this
millennium.

4
We
also
strongly
support
the
comments
submitted
5
by
the
Natural
Resources
Defense
Council.
And
that
has
6
been
made
known
in
the
comments
as
well
as
the
letter
that
7
the
Air
Resources
Board
should
have
received.

8
We
also
believe
it's
­­
and
I
don't
want
to
go
9
through
all
the
comments
that
the
previous
speakers
have
10
gone
through,
because
I
have
confidence
that
you've
heard
11
them
and
I
don't
want
to
belabor
the
points.

12
But
I
want
you
to
know
that
in
our
report,
we
13
found
in
our
own
personal
assessment
that
we
released,
you
14
know,
in
the
beginning
of
October,
that
this
category
15
alone
releases
11,500
tons
of
NOx
per
year.
It
also
16
releases
approximately
600
tons
of
PM
per
year,
so
those
17
are
significant
numbers.

18
We
believe,
therefore,
it's
very
important
to
19
adopt
stringent
rules,
and
we
also
believe
we
should
adopt
20
one
progressive
standard
not
seven
different
standards.

21
We
should
have
a
performance
based
standard
and
we
also
22
agree
with
the
5
PPM
DD
level
for
NOx
across
the
Board,

23
even
for
lower
than
three
megawatt
hour
­­
I
mean
three
24
megawatt
engines
because
of
several
things.

25
One,
the
Bay
Area
Air
Quality
Management
District
PETERS
SHORTHAND
REPORTING
CORPORATION
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362­
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1
believes
it's
cost
effective
and
feasible
using
certain
2
technologies,
such
as
SCR
and
oxidation
catalysts.

3
There
are
also
the
XO,
NOx
strategies
that
showed
4
that
that
level
is
achievable
in
practice
as
well
as
other
5
documentation
in
the
staff
report.

6
We
also
believe
that
there
is
importance
for
an
7
interim
standard.
And
if
there
isn't
an
interim
standard
8
adopted
today,
we
strongly
encourage
the
Air
Resources
9
Board
or
the
governing
board
to
adopt
a
very
strict
10
adherence
to
the
2007
standards,
so
that
those
standards
11
don't
slip.

12
We
really
need
these
ton
reductions
and
we
also
13
need
a
technology
transfer.
As
you
know,
in
a
lot
of
our
14
programs,
we're
advancing
technology,
we're
not
just
15
advancing
technology
and
distributed
generation,
but
we're
16
also
advancing
technology
for
other
applications.
And
SCR
17
and
oxidation
catalysts
are
also
being
used
in
our
mobile
18
source
side.

19
Although
they're
not
directly
related,
they're
20
both
trying
to
tackle
the
same
problem,
and
that's
the
21
reduction
of
smog
forming
chemicals
in
particulate
matter,

22
some
of
which
are
known
to
be
toxic.
So
I'd
like
you
to
23
keep
that
in
mind.

24
I
also
believe
that
the
credit
methodology
25
proposed
by
the
Natural
Resources
Defense
Council
is
one
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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91
1
that
should
be
strongly
considered.
And
because
there's
2
not
going
to
be
actual
implementation
till
2003,
there
3
seems
to
be
some
time
that
EPA,
the
Air
Resources
Board,

4
and
the
Natural
Resources
Defense
Council
can
work
out
5
some
of
the
problems
that
staff
may
have
with
the
6
methodology,
but
I
believe
that
the
methodology
that
7
they're
proposing
not
only
protects
the
environment
while
8
encourages
complying
heat
and
power
technologies,
which
we
9
so
desperately
need,
because
even
in
graduate
school,
I
10
know
the
importance
of
industrial
ecology,
using
and
11
harnessing
energy
that
we're
losing
to
our
benefit.

12
And
that
truly
reduces
emissions,
and
we
need
to
13
do
more
of
that.
And
so
I
believe
their
strategy
does
14
this
as
well,
advances
or
encourages
the
market
to
develop
15
CHP.

16
Finally,
I
also
want
to
jump
on
the
band
wagon
of
17
saying
that
we
really,
truly
need
equivalent
emissions
18
performance
for
generation
that
meets
the
combined
natural
19
gas
central
station
powerplant
standard
by
2007.
We
need
20
these
standards.
We're
struggling
to
get
into
attainment,

21
and
we
absolutely
need
them.

22
So
with
that,
I
just
want
to
thank
you
for
your
23
time.
If
you
have
any
questions,
I'll
be
more
than
glad
24
to
answer
them.

25
Thank
you.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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92
1
CHAIRPERSON
LLOYD:
Thank
you,
Todd.

2
Questions
from
the
Board?

3
Thank
you
very
much.

4
Bonnie
Holmes­
Gen,
Valerie
Gates,
Eric
Wesselman.

5
MS.
HOLMES­
GEN:
Good
morning.
Bonnie
Holmes­
Gen
6
with
the
American
Lung
Association
of
California.

7
And
I'm
speaking
at
least
on
behalf
of
the
over
8
100
individuals
who
wrote
letters
to
you,
and
I
believe
9
you
have
those
letters
in
your
packet
from
our
10
organization.

11
I
speak
on
behalf
of
the
American
Lung
12
Association
of
California
and
the
California
Thoracic
13
Society.
We
are
here,
in
addition
to
NRDC
and
Coalition
14
for
Clean
Air
and
some
of
the
other
groups
here
today,
to
15
support
the
good
staff
work
on
this
regulation.
We
are
16
involved
in
this
issue
because
of
our
concern
about
the
17
public
health
impacts
of
the
emissions
from
all
types
of
18
small
and
on­
site
generators,
distributed
generation,

19
emergency
generators
and
portable
generators.

20
I
understand
today
you're
just
dealing
with
21
distributed
generation,
but
we
are
concerned
that
all
of
22
these
small
and
on­
site
generators
are
responsible
for
23
significant
air
pollution
emissions.
And
we
have
a
deep
24
commitment
to
reducing
those
emissions
and
promoting
clean
25
and
renewable
generation
technologies.

PETERS
SHORTHAND
REPORTING
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916)
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1
I
wanted
to
just
focus
on
two
issues,
in
addition
2
to
joining
with
the
comments
by
NRDC
and
the
Coalition
for
3
Clean
Air,
and
those
issues
are
enforcement,
number
one,

4
and,
number
two,
the
need
for
rapid
ARB
action
to
address
5
diesel
bugs
and
portable
generators.

6
On
enforcement,
I
want
to
urge
the
Air
Board
to
7
pay
particular
attention
to
the
need
for
strong
8
enforcement
programs
to
ensure
that
we
don't
have
9
opportunities
for
circumventing
these
DG
regulations.
For
10
example,
you
have
excluded,
of
course,
portable
generators
11
and
backup
generators
from
the
regulations,
and
we
want
to
12
make
sure
that
those
types
of
generators
are
not
able
to
13
circumvent
the
system
and
become
used
essentially
as
14
distributed
generation.

15
And
we
also
want
to
make
sure
that
the
Board
16
determines
that
the
those
units
that
are
certified
DG
17
units
only
operate
on
the
fuel
they
were
certified
to
use.

18
There
are
some
situations
of
fuel
switching.
For
example,

19
combustion
turbines
could
be
switched
to
diesel
or
other
20
distillate
fuels.
And
we
want
to
make
sure
that
kind
of
21
situation
does
not
occur,
because
obviously
there
would
be
22
a
huge
increase
in
the
emissions
beyond
what
was
23
certified.

24
In
addition
to
enforcement,
again,
we
are
25
concerned
about
­­
we
remain
extremely
concerned
about
the
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1
impact
of
toxic
emissions
from
diesel
backup
generators
2
and
portable
generators.
I
know
that
you
plan
to
move
3
ahead
quickly,
and
we
want
to
urge
you
to
please
do
move
4
ahead
quickly
and
control
emissions
from
those
sources
as
5
rapidly
as
possible.

6
We're
very
concerned
about
the
comments
that
were
7
submit
by
Capstone
and
the
potential
scenario
that
acting
8
now
on
DG
and
delaying
action
on
these
other
types
of
9
technologies
that
are
mainly
diesel
could
tilt
the
10
competitive
playing
field
in
favor
of
those
higher
11
polluting
technologies.
We
absolutely
do
not
want
that
to
12
occur.
And
I
know
that
you
don't
want
that
to
occur
13
either.

14
But
I
think
moving
ahead
quickly
on
regulations
15
to
control
diesel
bugs
and
portable
generators
is
16
extremely
important
to
ensure
that
we
do
have
a
level
17
playing
field
and
emit
strong
emission
controls
to
achieve
18
the
central
station
standards
for
all
types
of
on­
site
19
technologies.

20
In
closing,
we
urge
you
to
move
ahead,
adopt
the
21
stringent
emission
standards
that
you
have
before
you
22
today
and
move
forward
quickly
on
diesel
backup
generators
23
and
portable
generators
as
your
next
step.

24
We
believe
that
pursuing
clean
and
renewable
25
sources
for
small
power
generators
will
be
an
incredible
PETERS
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1
improvement
for
air
quality
and
public
health.
At
the
2
same
time,
we'll
be
helping
to
promote
low
emitting
and
3
renewable
power
technologies
and
improve
our
chances
for
4
energy
security.

5
CHAIRPERSON
LLOYD:
Thank
you
very
much,
Bonnie.

6
Any
questions?

7
Yes,
Mr.
Calhoun.

8
BOARD
MEMBER
CALHOUN:
I
guess
I'd
like
to
hear
9
the
staff's
comment
about
her
interest
in
an
enforcement
10
program
to
be
certain
that
portable
and
backup
generators
11
don't
circumvent
the
system.

12
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
13
Tollstrup.
One
of
the
staff's
goals
is
to
work
closely
14
with
the
districts
to
make
sure,
and
we
have
been
all
15
along
during
the
whole
energy
crisis,
working
with
the
16
districts
to
make
sure
that
equipment,
such
as
the
backup
17
generators,
which
have
been
minimal
controls,
portable
18
equipment,
which
we
argue
with
some
over
its
intended
use,

19
they're
all
used
in
a
fashion
that
they
were
intended
to
20
be
used.

21
We
have
worked
on
a
number
of
cases
with
22
districts
to
make
sure
that,
you
know,
equipment
under
the
23
portable
equipment
program
if
it's
misused
it's
taken
out
24
of
our
program
and
sent
back
to
the
district
for
permits,

25
and
then
also
working
with
them
on
what
the
restrictions
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1
should
be
for
emergency
generators
and
we
will
continue
to
2
do
so.

3
BOARD
MEMBER
CALHOUN:
I
guess
I'd
like
to
ask
do
4
you
have
something
specific
in
mind
that
you
think
that
5
should
be
done
that
isn't
being
done?

6
MS.
HOLMES­
GEN:
Well,
because
there
are
so
many
7
of
these
generators
throughout
the
state,
and
obviously
it
8
presents
an
enforcement
challenge,
and
we're
concerned
9
that
in
the
cases
where
natural
gas
shortages
or
prices
10
spikes
occur,
there
could
be
some
operators
that
switch
11
fuels
in
order
to
avoid
the
cost
of
natural
gas
or
avoid
12
using
a
fuel
that's
in
short
supply.

13
And
we
want
to
make
sure
that
the
Air
Board
is
14
working
very
closely
with
the
districts
to
ensure
that
15
their
enforcement
teams
are
looking
for
this
sort
of
16
misuse
of
certified
equipment.

17
BOARD
MEMBER
CALHOUN:
Well,
I
think
we've
heard
18
the
staff's
comment
and
it
appears
as
though
they
19
obviously
have
this
in
mind,
and
are
working
with
the
20
local
districts
in
an
effort
to
try
and
accomplish
this.

21
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
I'll
22
add
one
other
comment.
This
is
Kitty
Martin.

23
We
will
have
on
our
web
site
a
list
of
all
the
24
equipment
that
has
been
certified
as
meeting
our
25
standards.
It
will
allow
districts
to
quickly
in
the
PETERS
SHORTHAND
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CORPORATION
(
916)
362­
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1
field
double
check
to
make
sure
that
a
device
is,
one,

2
certified
and,
two,
is
using
the
appropriate
fuel.

3
CHAIRPERSON
LLOYD:
Thank
you.

4
We'll
take
one
more
witness,
Valerie
Gates,
and
5
then
we're
going
to
take
a
ten
minute
break
for
the
6
benefit
of
the
court
reporter.
So
we'll
take
Valerie,

7
then
after
the
break
we'll
get
Eric
Wesselman.

8
MS.
GATES:
Good
morning.
I'm
Valerie
Gates
and
9
I
am
a
real
person
from
the
Sierra
Club.
I
received
a
10
letter
in
the
mail
regarding
this
issue,
and
signed
my
11
name
saying
it
sounded
good
to
me,
so
they
sent
me
an
12
email
and
asked
me
to
come
and
here
I
am.

13
(
Laughter.)

14
MS.
GATES:
I
am
a
community
leader
concerned
15
with
supporting
a
village
environment
in
Fair
Oaks,
which
16
is
17
miles
east
of
Sacramento.
My
husband
and
I
bought
17
some
subdivision
land
in
Butte
County,
and
so
I
took
some
18
planning
classes
because
I
wanted
to
learn
how
to
19
ethically
develop
that
land
in
Butte
County.

20
As
an
aside,
the
air
quality
isn't
good
enough
21
for
me
to
live
up
there,
because
of
the
rice
burning.
I
22
have
some
lung
problems
because
I've
­­
I
put
fiberglass
23
insulation
in
my
attic.
Even
though
I
wore
a
mask,
I
had
24
some
severe
problems
after,
but
I
didn't
sue
anybody.
I
25
just
try
to
live
a
healthy
from
now
on.

PETERS
SHORTHAND
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1
But
anyway,
my
neighbors
found
out
that
I
was
2
taking
these
planning
classes
and
asked
me
to
help
with
3
concerns
in
our
village
where
contractors
are
demolishing
4
the
historic
buildings
and
putting
up
subdivision
quality
5
homes,
so
needless
to
say
we
have
a
community
involved
6
with
this
preservation.

7
My
direct
air
quality
concern
with
air
pollution
8
is
caused
by
the
asbestos
fibers
unleashed
during
the
9
demolition.
But
my
husband
and
I
are
presently
members
of
10
the
Sierra
Club.
I
was
at
birth.
My
father
a
pathologist
11
and
environmentalists
studied
causes
of
cancer
in
the
12
1950s
and
1960s.

13
I
met
my
husband,
a
landscape
architect
on
a
14
Sierra
Club
trail
maintenance
trip
in
1968.
We
are
a
15
family
who
supports
conservation
of
energy.
We
wear
wool
16
sweaters
in
the
winter,
sip
ice
lemonade
by
a
fan
in
the
17
hot
summer.

18
However,
blackouts
are
life
threatening
to
my
19
paraplegic
mother
who
requires
a
moderate
temperature
in
20
her
environment.
We
must
balance
our
energy
needs
with
21
our
requirement
for
clean
air.
The
Sierra
Club
has
22
recommended
several
modifications
with
respect
to
DG
23
technologies.

24
Briefly,
the
district
guidance
should
strongly
25
recommend
that
all
the
distributed
generation
meet
PETERS
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1
emission
standards
that
are
equivalent
to
the
cleanest
2
central
station
powerplants
by
2007;
that
the
proposed
3
certification
regulation
and
draft
guidance
that
exempts
4
distributed
generation
units
that
are
registered
under
5
CARB's
portable
equipment
registration
program,
PERP,
has
6
language
that
exempts
­­
the
proposed
certification
has
7
language
that
exempts
the
distributed
generation
units.

8
And
because
units
registered
under
PERP
are
held
9
to
weaker
emission
standards,
I'm
concerned
that
10
stationary
units
could
be
easily
converted
to
portable
11
units
and
moved
once
a
year
to
avoid
the
stronger
12
emissions
reductions
under
the
DG
certification
13
regulation.

14
To
avoid
creating
greater
environmental
and
15
public
health
problems,
CARB
should
act
to
make
the
16
emissions
limits
in
the
PERP
consistent
with
the
standards
17
in
the
certification
regulation
and
guidance
to
districts
18
as
soon
as
possible.

19
Finally,
I
urge
the
Board
to
strongly
recommend
20
that
the
air
districts
adopt
the
definition
of
emergency
21
generation
in
the
draft
guidance,
somebody
already
said
22
that
okay.

23
Anyway,
we
need
energy.
However,
air
pollution
24
has
life
threatening
consequences
for
some
people.

25
Regarding
concern
for
the
cost
to
the
manufacturers,
the
PETERS
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1
potential
costs
to
the
manufacturers,
I
think
that
this
2
process
could
also
be
considered
to
be
economic
3
stimulation
that
the
people
who
designed
the
new
features
4
to
make
these
things
have
better
air
quality,
deserve
to
5
make
a
living,
too,
that's
about
all
I
have
to
say.

6
CHAIRPERSON
LLOYD:
Preferably
in
California.

7
MS.
GATES:
Excuse
me?

8
CHAIRPERSON
LLOYD:
Dr.
Friedman.

9
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Could
staff
just
10
comment
about
the
potential
misuse
of
the
PERP
approach.

11
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Well,

12
first
of
all,
I
will
say
that
if
anybody
is
aware
of
13
someone
using
a
piece
of
equipment
registered
under
the
14
portable
equipment
program
for
a
DG
purpose,
let
us
know,

15
and
we'll
work
with
the
district
to
make
sure
that
doesn't
16
happen,
because
that's
an
improper
use
of
the
equipment.

17
Second,
we
are
intending
when
we
do
come
back
to
18
board
­­

19
BOARD
MEMBER
WILLIAM
FRIEDMAN:
I
appreciate
20
that,
but
what
is
the
likelihood
of
that
kind
of
whistle
21
blower
activity,
if
you
will?
I
mean,
you
know
how
­­
I
22
mean
I
presume
that
this
is
going
to
be
reasonably
23
clandestine
uses.
So
is
this
a
real
­­
could
this
be
a
24
problem
or
real
problem?

25
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
The
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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101
1
issue
has
been
brought
to
our
attention
before.
And
it
is
2
a
potential
problem.
We
have
put
people
on
notice
that
we
3
think
it's
an
improper
use
of
portable
equipment
under
our
4
program.

5
And
when
we
run
across
these
individuals,
we
have
6
been
taking
action
and
making
sure
that
they
don't
use
it
7
that
way.

8
CHAIRPERSON
LLOYD:
Professor
Friedman.

9
BOARD
MEMBER
HUGH
FRIEDMAN:
How
do
you
run
10
across
it?
How
do
we
run
across
it?

11
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:

12
Usually,
it's
through
either
the
districts
in
their
13
day­
to­
day
activities
inspecting.
We
don't
go
out
and
do
14
any
inspections
ourselves.
We
have
been
tipped
off
a
few
15
times
by
anonymous
people.
But
for
the
most
part,
it's
16
through
district
inspections
where
they
run
across
this
17
activity.

18
CHAIRPERSON
LLOYD:
I
think
the
concern
is
likely
19
to
be
a
significant
problem
or
is
it
isolated?

20
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
I
21
think
it's
probably
an
isolated
problem.
You
know
we
have
22
quite
a
few
pieces
of
equipment
registered
under
our
23
program.
And
the
program
is
designed,
equipment
can
move
24
from
source
to
source,
point
to
point
to
operate.

25
The
districts
do
a
good
job
of,
you
know,
they're
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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1
out
there,
they're
doing
the
inspections.
When
they
see
2
it,
they
do
make
sure
it's
a
proper
use.
So
we
don't
see
3
this
as
a
widespread
problem,
but
there
may
be
individual
4
cases
where
it
does
occur.

5
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
I
think
we
6
had
greater
fears
of
what
might
happen
during
this
last
7
summer.
These
units
are
very
expensive
to
rent,
but
8
during
the
prospects
where
certain
businesses
were
facing
9
black
outs
at
unknown
times
and
the
loss
of
their
business
10
or
their
loss
of
production,
quite
a
few
of
the
units
11
won't
go
out
as
rental
units
and
people
were
paying
the
12
$
5,000
a
week
or
thereabouts
what
it
cost.

13
And
we
did
have
fears
that
some
of
those
that
14
once
they
had
the
unit
on
site
might
be
tempted
to
say
15
during
times
when
I'm
paying
high
rates
it's
cheaper
to
16
use
this
generator
than
not.

17
We
gave
them
guidance
and
guidance
to
the
18
districts
that
putting
the
generator
on
site,
using
it
19
during
a
blackout
at
the
facility
was
appropriate.
Using
20
it
as
a
way
to
mitigate
high
power
bills
was
21
inappropriate.

22
I
think
now
we
seem
to
be
past
that
and
blackouts
23
are
no
longer
a
major
concern,
that
relatively
few
people
24
would
be
induced
to
want
to
bring
one
of
these
units
and
25
pay
that
amount
that
way.

PETERS
SHORTHAND
REPORTING
CORPORATION
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103
1
ASSISTANT
CHIEF
BARHAM:
This
is
Bob
Barham
with
2
the
Stationary
Source
Division.
I
just
want
to
also
add
3
that
in
the
longer
term,
I
think
the
solution
to
this
4
problem
will
be
through
the
diesel
program,
where
we're
5
going
to
be
mandating
lower
sulfur
fuel
catalysts
on
these
6
diesel
engines,
things
that
will
make
them
much,
much
7
cleaner
than
they
currently
are.

8
CHAIRPERSON
LLOYD:
Thank
you,
Mr.
Barham.

9
Thank
you
very
much.

10
We'll
take
a
break.
I
make
it
about
17
minutes
11
past,
why
don't
we
reassemble
at
11:
30,
since
there's
no
12
clock
in
this
room,
11:
30.

13
(
Thereupon
a
brief
recess
was
taken.)

14
CHAIRPERSON
LLOYD:
I'd
like
to
recommence,

15
please.

16
As
often
is
the
case,
we
have
more
witnesses
than
17
we
had
before,
so
we
better
move
ahead.

18
I'll
start
with
Eric
Wesselman,
Martha
Arguello,

19
and
S.
N.
Prakash.

20
MR.
WESSELMAN:
Good
morning.
My
name
is
Eric
21
Wesselman.
I'm
with
the
Sierra
Club.
And
I'm
happy
to
be
22
here
today
to
provide
comments
on
the
proposed
distributed
23
generation
certification
program
and
the
draft
guidance.

24
The
Sierra
Club
is
also
a
membership
based
25
organization
with
nearly
200,000
members
in
the
state
of
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
104
1
California
alone.
Some
of
them
actually
are
on
the
table
2
before
you
here.
Nearly
3,000
of
our
members
submitted
3
some
comments
regarding
these
proceedings,
so
I
hope
4
you'll
have
the
time
to
take
a
look
at
some
of
them.

5
This
Sierra
Club
is
generally
very
supportive
of
6
the
certification
program
and
the
draft
guidance,
that
the
7
staff
has
come
up
with.
And,
again,
we'd
very
much
like
8
to
congratulate
the
staff
on
a
job
well
done.

9
There
are
some
important
modifications
that
we
10
would
also
like
to
recommend.
We've
heard
a
number
of
11
them
from
other
organizations,
such
as
CALPIRG
and
NRDC
12
already.
And
so
a
lot
of
my
comments
will
be
reaffirming
13
of
those
comments,
and
so
I'll
be
brief
and
to
the
point
14
with
a
little
bit
of
some
changes
given
what
we've
heard
15
so
far
here
today.

16
Our
primary
goal,
of
course,
is
to
ensure
that
DG
17
units
are
clean
as
the
cleanest
central
station
power
18
units
out
there.
And
that's
something
that
the
Sierra
19
Club
feels
could
be
stronger
in
the
draft
guidance,
and
20
that
there
should
be
a
clear
statement
that
it
should
be
21
by
2007,
so
we're
assured
to
get
to
the
stated
intent
of
22
the
legislation.

23
The
second
major
recommendation
for
modifications
24
is
along
the
lines
of
what
NRDC
had
stated,
the
different
25
types
of
distributed
generation
that
is
covered
in
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
105
1
draft
guidance
performs
essentially
the
same
or
2
substitutable
functions,
and
therefore
they
should
be
held
3
to
the
same
environmental
standards,
and
that
gets
to
the
4
different
standards
that
are
set
for
the
different
costs
5
and
technologies
in
the
documents
in
the
regulations.

6
So
we
would
urge
that
the
standard
for
that
7
uniform
standard
of
five
parts
per
million
volume
be
8
adopted.
And
the
standards
are
already
set
for
units
that
9
are
between
3
and
50
megawatts,
so
it
sets
these
other
10
turbines
outside
of
those
parameters,
essentially
you
have
11
the
same
purpose.
We
would
urge
the
adoption
of
the
12
uniform
standard.

13
And
barring
that
from
happening
today,
we
would
14
urge
that
the
staff
express
an
intent
to
get
to
a
uniform
15
standard
over
time.
I
mean,
we'd
be
happy
to
continue
to
16
work
with
the
staff
and
the
Board
to
ensure
that
kind
of
17
an
outcome,
obviously
for
environmental
and
public
health
18
concerns.

19
Finally
­­
well,
not
quite
finally,
but
thirdly
20
is
the
portable
generation
issue.
The
exemption
we've
21
already
heard
a
lot
about
that,
and
I
appreciate
the
22
questions
and
comments
regarding
that
issue.
The
Sierra
23
Club
is
very
concerned
about
that
exemption
for
portable
24
units.
While
right
now
there
may
not
be
that
many
units
25
that
would
­­
there
might
be
a
problem
with
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
106
1
currently.
I
think
that
with
the
stricter
emission
2
standards
for
2007,
we
see
an
increasing
incentive,
as
the
3
years
go
on,
for
the
stationary
units
to
become
portable
4
units
or
to
have
some
sort
of
problems
with
this
5
exemption.

6
Therefore,
we
really
do
feel
that
the
PERP
7
standards
need
to
be
brought
­­
emission
standards
need
to
8
be
brought
in
line
with
the
standards
that
are
being
set
9
here
today
as
soon
as
possible.

10
And
as
I
expressed
at
the
outset,
we
would
also
11
support
the
adoption
of
an
interim
standard
and
strong
12
enforcement
to
ensure
that
­­
right
now,
of
course,

13
emergency
backup
generators
are
not
included
in
this
14
proceeding,
but
a
concern
is
though
that
some
of
these
15
units
could
be
used
to
reduce
business
costs
or
the
costs
16
of
buying
power
off
the
grid,
generate
yourself
to
save
17
some
power.

18
Well,
if
that
happens,
then
all
of
a
sudden
we
19
have
a
problem
and
enforcement
could
help
to
deal
with
20
that
to
ensure
that
they're
brought
in
to
be
covered
by
21
the
certification
program.

22
And
finally,
I
think
the
issue
of
natural
23
security
is
very
valid
with
this
issue
of
distributed
24
generation.
And
I
think
distributed
generation
technology
25
does
have
and
can
play
a
very
important
role
in
protecting
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
107
1
national
security.

2
My
brother
happened
to
be
in
the
Pentagon
when
it
3
was
struck
by
the
plane
and
so
I
was
touched
as
millions
4
of
other
Americans
were,
of
course,
by
this
issue.
But
I
5
really
do
feel,
though,
that
sense,
emergency
generators
6
are
excluded
from
this
proceeding,
that
those
events,
and
7
that
issue
and
the
issue
of
national
security
really
8
shouldn't
be
brought
to
bear
on
this
proceeding.
I
don't
9
think
this
is
the
right
place
for
that,
since
really
the
10
issue
there
for
national
security
would
be
to
ensure
that
11
in
a
situation
of
emergency
that
we
have
electricity.

12
And
to
wrap
up,
I
just
want
to
again
thank
the
13
Board
for
your
efforts
and
the
staff
for
an
excellent
job.

14
I'd
be
happy
to
take
any
questions.

15
CHAIRPERSON
LLOYD:
Thank
you
very
much.

16
Dr.
Burke.

17
BOARD
MEMBER
BURKE:
I
will
make
this
very
quick.

18
Now,
Ms.
Gates
is
a
member
of
the
Sierra
Club,
right,
and
19
I
found
her
testimony
very
powerful
and
she's
the
kind
of
20
person
that
makes
me
getup
in
the
morning
and
come
to
do
21
this,
and
I'm
sure
also
my
other
fellow
board
members.

22
Now,
you
represent
the
organization
is
that
true?

23
MR.
WESSELMAN:
Yes.

24
BOARD
MEMBER
BURKE:
So
how
do
you
formulate
your
25
policy
for
what
you're
going
to
testify
to?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
108
1
MR.
WESSELMAN:
Well
­­

2
BOARD
MEMBER
BURKE:
Is
it
by
the
national
3
organization,
California
organization,
your
office,
three
4
guys
in
your
office,
how
do
you
do
that?

5
MR.
WESSELMAN:
Well,
it
varies
actually
6
depending
on
the
issue.

7
BOARD
MEMBER
BURKE:
How
did
you
do
it
for
today?

8
MR.
WESSELMAN:
For
today,
since
this
is
a
state
9
issue,
I
had
to
clear
my
thoughts
with
the
California
10
Sierra
Club,
with
the
staff
that
are
involved
in
the
11
California
Sierra
Club.

12
BOARD
MEMBER
BURKE:
And
when
you
clear
it
with
13
the
state
organization,
do
they
give
you
some
kind
of
14
resolution
or
authorization?

15
MR.
WESSELMAN:
No,
it's
verbal.
There's
an
16
energy
committee
that
the
Sierra
Club
has
formed
that
has
17
the
authority
for
the
State
of
California
to
authorize
18
actions
and
­­

19
BOARD
MEMBER
BURKE:
What
prohibits
you
from
20
changing
the
testimony,
other
than
losing
your
job,
when
21
you
come
up
to
testify?

22
MR.
WESSELMAN:
I
didn't
change
it,
I
just
23
changed
my
emphasis.

24
BOARD
MEMBER
BURKE:
I
see.
Well,
I
just
25
wondered,
you
know,
because
you
could
change
it.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
109
1
Thank
you.

2
CHAIRPERSON
LLOYD:
Thank
you.

3
Martha
Arguello,
S.
N.
Prakash
and
Tim
French.

4
MS.
ARGUELLO:
Good
morning
and
thank
you.

5
My
name
is
Martha
Arguello.
I
am
the
coordinator
6
of
the
environment
and
health
programs
for
Physicians
For
7
Social
Responsibility.
We're
also
a
national
8
organization.
We
have
over
a
35­
year
tradition
of
working
9
on
public
health
issues,
always
guided
by
the
principle
10
that
it
is
better
to
prevent
what
we
cannot
cure.

11
We
have
been
the
conscience
of
American
medicine
12
for
those
35
years.
We
have
promoted
adoption
of
more
13
precautionary
principles
to
protect
human
health
and
the
14
environment.
And
so
today
we
applaud
you
and
hope
that
15
you
adopt
these
strong
rules
on
distributed
generation.

16
Rules
that
will
be
protective
of
both
health
and
17
the
environment.
We
hope
you
establish
aggressive
18
distributed
generation
standards
that
will
eliminate
the
19
dirtiest
DG.
We
also
encourage
the
Board
to
recognize
the
20
importance
of
reduction
of
CO2.
And
we
are
deeply
21
concerned
that
the
current
issues
do
not
address
existing
22
backup
generators.
These
generators
are,
by
and
large,

23
diesel.

24
At
some
preliminary
mapping
that
was
conducted
by
25
environmental
defense
and
presented
at
a
recent
conference
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
110
1
that
we
had
on
energy
and
health
co­
sponsored
between
2
Physicians
For
Social
Responsibility
and
American
Lung,
we
3
found
that
many
of
these
backup
utility
generators
are
4
located
in
densely
populated
parts
of
the
state,
where
we
5
imagine
there
will
be
considerable
environmental
justice
6
impacts
and
disproportionate
impacts
in
some
of
7
California's
most
vulnerable
populations,
children,
the
8
elderly
and
the
emergent
majority
groups
that
still
have
9
not
received
equal
protection
by
many
of
the
laws
and
10
rules.

11
PSR
also
encourages
you
to
begin
to
look
at
the
12
ethical
implications
of
using
diesel
backup
generators
in
13
health
care
settings
and
hope
that
you
will
work
with
us
14
to
incentivize
the
switch
to
cleaner
sources
of
energy,

15
particularly
in
health
care
settings,
where
they
will
have
16
disproportionate
impacts
on
those
who
are
ill
and
most
17
vulnerable.
Again,
we
support
the
recommendations
that's
18
been
made
by
the
NRDC
and
again
we
hope
that
you
adopt
the
19
strictest
possible
protections
and
rules
on
distributed
20
generation.

21
Thank
you.

22
BOARD
MEMBER
HUGH
FRIEDMAN:
Are
there
any
23
questions
from
the
Board?

24
Thank
you
very
much.

25
The
next
speaker
is
Mr.
Prakash
and
then
Mr.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
111
1
French.

2
MR.
PRAKASH:
Chairman
of
the
Board
and
members
3
of
the
Board,
my
name
is
Prakash.
I'm
representing
STM
4
Power
Incorporated,
maker
of
Stirling
engines.
We
power
5
up
engines
in
the
range
of
25
kilowatts
of
electricity,

6
using
various
different
­­
various
types
of
fuels.

7
Thank
you
for
organizing
this
public
meeting
and
8
giving
STM
power
the
opportunity
to
present
its
views
on
9
the
proposed
CARB
rules.

10
We
believe
that
STM
is
the
world
leader
in
11
external
combustion
Sterling
engine
technology.
Our
first
12
product
is
a
25
kilowatt
DG
unit,
that
is
truly
multi­
fuel
13
capable
and
can
run
on
heat
produced
by
different
types
of
14
fuels,
conventional
gasses,
and
liquid
fuels,
renewable
15
resources,
such
as
biomass,
solar
energy,
resource
liquid
16
fuels
such
as
landfill
gas,
flare
gas
and
bio
gas
waste
17
heat
from
municipal
processes.

18
As
the
nation's
electric
and
gas
networks
are
19
reaching
capacity,
most
people
would
agree
that
20
utilization
of
modular,
environmentally
clean
DG
21
technologies
closer
to
the
energy
user
can
augment
the
22
supply
capacity
reduced
in
this
interest,
improve
23
reliability
and
reduce
the
straining
on
the
grids
and
24
pipelines
experienced
recently
in
California
and
25
elsewhere.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
112
1
Moreover,
recent
events
have
highlighted
the
one
2
liberty
of
large
powerplants
and
transmission
lines
as
3
potential
terrorist
targets,
liberating
the
energy
4
secretary
on
top
of
the
national
security
agenda.

5
Multi­
fuel
capable
DG
technology,
such
as
the
STM
6
power
units,
are
well
suited
to
our
nation's
national
7
security
and
energy
security.
STM
firmly
believes
that
DG
8
technology
should
not
be
more
polluting
than
central
power
9
stations,
after
appropriate
adjustments
are
made
for
10
losses
in
transmission
and
distribution
system.

11
According
to
these
losses
and
intangible
benefits
12
of
DG,
STM
believes
that
a
higher
level,
one
pound
per
13
megawatt
of
NOx
is
a
reasonable,
cost
effective,
regulated
14
standard
for
2003
and
beyond.

15
STM
does
not
believe
that
the
proposed
2007
NOx
16
standard
applied
to
.05
pounds
per
megawatt
however
is
17
cost
effectively
achievable,
but
will
nonetheless
continue
18
its
aggressive
dial
up
of
low
NOx
combustion
system,
so
19
that
it
can
remain
among
the
cleanest
available
DG
20
technologies.

21
STM
will
continue
to
work
with
regulators
or
22
other
organizations
in
crafting
new
rules
that
not
only
23
protect
the
environment
and
public
health
but
also
provide
24
room
for
the
DG
industry
to
prosper
and
grow.
We
at
STM
25
are
committed
to
bringing
efficient
cost
effective
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
113
1
socially
responsible
products
to
market.

2
STM
is
committed
to
making
our
environmentally
3
friendly
external
heat
engine
technology
as
commonplace
as
4
diesel
engines
are
today.
And
we
hope
that
the
CARB
5
regulated
actions
will
support
the
cause.

6
For
this,
STM
suggests
to
CARB
to
reconsider
its
7
proposed
standards
to
allow
for
the
development
of
the
8
nascent
DG
industry
in
California
and
throughout
North
9
America.

10
Thank
you
for
your
attention.

11
I'm
happy
to
answer
any
questions
you
have.

12
CHAIRPERSON
LLOYD:
Thank
you
very
much.

13
Any
questions?

14
So
what
you're
saying
is
we
should
delay
until
15
you
catch
up?

16
MR.
PRAKASH:
Things
are
technically
feasible.

17
It
doesn't
mean
that
it
is
cost
effective.
It
doesn't
18
mean
that
the
marketplace
will
buy
it
at
that
price.
So
19
until
some
technologies
take
root,
you
will
not
know
what
20
is
the
cost
impact
on
the
generation.

21
For
example,
somebody
generating
300
megawatts
22
can
amortize
the
cost.
What
about
guys
developing
100
23
kilowatts
and
less,
those
are
also
DG
units.
Engines
24
cannot
do
the
same
thing.
There
are
technological
25
limitations
out
there,
and
on
top
of
that
there
are
size
PETERS
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1
limitations
too.

2
You
cannot
operate
the
best
technology
to
3
everything.
The
standards
should
also
be
based
on
sizes.

4
Size
is
an
important
factor.
Combustion
is
not
just
a
5
chemical
conversion,
it
is
size
dependent.
I'm
a
chemical
6
engineer,
so
I'm
talking
like
that.

7
CHAIRPERSON
LLOYD:
Does
staff
want
to
comment?

8
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Just
9
one
comment
on
the
proposed
standard
that
STM
is
10
mentioning
that
would
be
essentially
for
2003
double
the
11
number
that
staff
is
proposing.
And,
again,
the
directive
12
of
SB
1298
was
to
set
the
first
stage
of
the
standard
at
a
13
level
that
reflected
the
cleanest
technology
out
there.

14
And
as
you
might
remember,
we
mentioned
a
couple
15
of
the
size
categories
that
would
fall
under
our
cert
16
program.
And
those
would
be,
you
know,
relatively
small
17
in
the
same
category
as
the
STM
technology
would
be.

18
MR.
PRAKASH:
From
what
I
understand
by
the
19
testimony,
I
think
it
was
less
than
three
megawatts
will
20
have
the
same
standard,
but
100
kilowatts
is
a
little
21
bit
­­
much
small
than
three
megawatts.

22
CHAIRPERSON
LLOYD:
Staff.

23
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
One
24
clarification.
I
think
there
may
be
some
confusion
on
the
25
part
of
STM
in
that
we've
differentiated
our
BACT
PETERS
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1
recommendations.
That
would
be
for
the
guideline
document
2
by
size,
and
that's
for
that
equipment
which
would
fall
3
under
district
jurisdiction.

4
It
is
unlikely
that
the
size
that
the
STM
product
5
currently
as
it's
configured
at,
which
I
believe
is
25
KW,

6
would
fall
under
district
permitting.
But
it's
easy
to
7
confuse
the
guidance
recommendations
with
the
cert
8
program.

9
MR.
PRAKASH:
Am
I
to
understand
that
under
three
10
megawatts
it
would
be
district
property
and
there
would
be
11
some
leeway
because
of
the
size?

12
AIR
RESOURCES
ENGINEER
CHIN:
This
is
Grant
Chin.

13
The
certification
program
applies
to
electrical
generation
14
that's
not
in
their
district
jurisdiction.
In
terms
of
15
some
of
the
size,
you
know,
we've
heard
mentioned
16
reciprocating
engines,
less
than
50
horsepower
and
then
17
for
a
gas
or
combustion
turbine,
typically
they're
exempt
18
if
they're
300
KW
or
less.

19
CHAIRPERSON
LLOYD:
Okay.

20
MR.
PRAKASH:
Thank
you.

21
CHAIRPERSON
LLOYD:
Professor
Friedman.

22
BOARD
MEMBER
HUGH
FRIEDMAN:
But
do
you
23
understand
1298
in
its
requirement
that
we
apply
BACT,
do
24
you
understand
that
to
preclude
cost
considerations?
I
25
mean,
best
available
control
technology
that's
available
PETERS
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1
may
not
be
salable,
I
guess
is
the
point.

2
MR.
PRAKASH:
Correct.

3
BOARD
MEMBER
HUGH
FRIEDMAN:
At
least
a
price
4
that
people
are
willing
to
pay.
And
so
I
guess
my
5
question
is,
is
there
any
validity
to
that
position
or
do
6
you
even
consider
it?

7
I
mean,
I
know
we
did
cost
it
out
and
there
is
8
some
argument,
I
guess
at
least
some
have
said
it
that
9
you've
underestimated
the
costs
of
these
units.

10
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Again,

11
for
the
equipment
that
would
fall
under
our
cert
program,

12
we
refer
to
that
as
the
small
stuff
basically.
The
13
directive
in
SB
1298
was
to
look
at
the
cleanest
14
technology
that
was
currently
in
operation
out
there.

15
There
was
no
mention
of
BACT
for
that
first
stage
of
16
standards.

17
So
it
was
more
of
a
directive
to
just
look
and
18
identify
and
craft
our
standard
to
reflect
the
cleanest
19
technologies.

20
BOARD
MEMBER
HUGH
FRIEDMAN:
Out
there,

21
regardless
of
cost,
but
we
do
­­
at
least
we've
attempted
22
to
make
cost
estimates.

23
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
We
did
24
address
cost
estimates
for
both
the
manufacturers
in
the
25
field
now
out
there
selling
units
as
well
as
those
that
PETERS
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1
anticipate
it.

2
BOARD
MEMBER
HUGH
FRIEDMAN:
And
you
feel
those
3
are
underestimated?

4
MR.
PRAKASH:
The
cost
numbers
are
reasonable
5
from
what
I
see,
but
does
the
­­

6
BOARD
MEMBER
HUGH
FRIEDMAN:
For
2003?

7
MR.
PRAKASH:
Yes.

8
BOARD
MEMBER
HUGH
FRIEDMAN:
But
for
2007,
we
9
understand
that
that's
going
to
have
to
be
reviewed.

10
MR.
PRAKASH:
But
to
comply
with
the
2003
11
standard,
there
are
penalties
in
the
technology,
either
in
12
efficiency
or
more
gas
consumption,
things
that.
So
at
13
that
level
will
the
people
buy
it?

14
CHAIRPERSON
LLOYD:
Mr.
Prakash,
are
you
based
­­

15
where
are
you
based?

16
MR.
PRAKASH:
Anarbor,
Michigan.

17
CHAIRPERSON
LLOYD:
How
much
discussion
have
you
18
had
with
the
staff
on
this
item?

19
MR.
PRAKASH:
Not
me
personally,
but
I'm
aware
of
20
the
discussions
that
have
gone
on
earlier.
We
can
taylor
21
the
engine
to
meet
different
standards.

22
CHAIRPERSON
LLOYD:
It
sounds
as
though,
I
think,

23
that
you
will
probably
benefit
to
having
some
more
24
discussions
from
staff,
because
I
think
mutual
exchange
of
25
information
would
be
beneficial
there.

PETERS
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1
MR.
PRAKASH:
Okay,
thank
you,
sir.

2
CHAIRPERSON
LLOYD:
We
appreciate
it
very
much.

3
Thank
you.

4
Tim
French,
Chuck
Solt,
Karl
Stoffers.

5
MR.
FRENCH:
Mr.
Chairman,
Members
of
the
Board,

6
good
morning.
My
name
is
Tim
French.
I'm
counsel
with
7
the
Engine
Manufacturers
Association.
EMA,
among
other
8
companies,
represents
the
leading
manufacturers
of
gaseous
9
fuel,
natural
gas
fueled,
reciprocating
internal
10
combustion
engines,
what
we
sometimes
call
RICE.
And
some
11
of
these
engines
are
used
in
distributed
generation
or
DG
12
applications.

13
And
my
comments
today
will
go
to
the
14
certification
proposal
that's
before
you
as
opposed
to
the
15
guidelines.

16
Before
I
address
EMA's
principal
concerns
with
17
respect
to
the
certification
program,
I,
like
the
others,

18
on
behalf
of
EMA
do
want
to
commend
your
staff
for
their
19
efforts
in
this
matter.

20
At
all
times
all
of
your
staff
exemplified
21
professionalism,
in
putting
this
rule­
making
together.

22
They
ensured
that
all
points
of
view
were
solicited
and
23
fairly
reconsidered
and
they
provided
many
opportunities
24
for
a
truly
open
debate
about
these
issues.
And
I
want
to
25
personally
salute
Grant,
Kitty
and
Marcelle
for
all
their
PETERS
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1
really
good
work
that
was
done
in
this
effort.

2
Now,
that
being
said
­­

3
(
Laughter.)

4
MR.
FRENCH:
­­
we
do
have
some
concerns
about
5
where
we
ended
up
as
we
discussed.

6
CHAIRPERSON
LLOYD:
We're
not
surprised.

7
(
Laughter.)

8
MR.
FRENCH:
In
a
nutshell
our
basic
concern
is
9
while
the
2003
standards
do
properly
reflect
BACT,
what
10
is,
you
know,
best
achievable
in
practice.
And
for
11
gaseous
fueled
RICE
it
already
requires
that
2003
12
standards
that
you
apply
either
an
SCR
or
a
TWC
type
13
catalyst
system
which
can
be
very
expensive.

14
That
while
those
standards
reflect
BACT,
the
2007
15
standards
are
frankly
infeasible
and
cost
prohibitive
for
16
RICE
applications,
natural
gas
reciprocating
engines.
And
17
this
result,
in
our
view,
is
not
reflective
of
sound
18
public
policy,
and
is,
in
fact,
in
conflict
with
some
of
19
the
other
initiatives
that
are
going
on.

20
You've
heard
of
the
ARICE
program
being
21
spearheaded
by
your
California
Energy
Commission,
the
22
DOE's
ARES
program.
Both
of
these
programs
are
trying
to
23
look
at
ways
to
advance
RICE
technologies
and
efficiencies
24
and
put
out
a
product
by
2010.

25
Now,
some
of
the
stretch
goals
that
are
being
PETERS
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1
considered
there
actually
match
the
2003
level.
But
the
2
point
is
that
the
2007
standard,
if
you
adopt
it
today,

3
recognizes
that
in
all
likelihood
you
are
effectively
4
banning
RICE
engines,
natural
gas
fueled
RICE
engines
for
5
these
applications.
And
I
just
think
we
need
to
be
clear
6
about
that.

7
And
in
light
of
our
concerns,
we're
seeking
two
8
basic
changes
to
the
proposal
that's
before
you
today
and
9
ask
you
to
consider
them.

10
First,
we
would
ask
that
you
suspend
the
2007
11
standards,
and
in
their
place
have
a
more
comprehensive
12
technology
review
as
we'll
discuss
in
more
detail.
We
13
think
the
technology
review
in
2005
may
be,
with
respect
14
to
RICE,
be
preordained
to
find
unavailability
of
RICE
15
technology.

16
So,
either,
you
know,
suspend
the
2007
standards
17
and
in
their
place
have
a
more
comprehensive
technology
18
review
that
can
better
align
itself
with
the
ARICE
program
19
and
the
ARES
program,
take
advantage
of
some
of
the
20
research
that's
being
done
there
or
alternatively
defer
21
the
2007
standards
to
2011.

22
Again,
that
will
allow
for
full
coordination
with
23
some
of
these
other
programs
that
are
going
on
at
DOE
and
24
CEC
level.

25
Now,
you
may
be
asking
yourself,
well,
we've
got
PETERS
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1
an
underlying
statute
to
deal
with
and
you
absolutely
do.

2
But
as
we've
heard
before,
Senate
Bill
1298
talks
about
3
implementing
standards
equivalent
to
combined
cycle
4
powerplants
as
early
as
practicable,
not
as
early
as
5
possible,
as
early
as
practicable.

6
And
I
think
it's
incumbent
upon
us
to
consider
7
all
of
the
types
of
sources
that
are
reasonably
used
in
8
this
category
and
factor
in
what
is
practicable
and
not.

9
And
we're
saying
that
if
you're
considering
or
want
to
10
hold
open
the
door
for
RICE
type
natural
gas
engines
2007
11
is
not
practicable.

12
The
remainder
of
my
comments
will
just
sort
of
go
13
to
highlight
some
of
the
reasons
behind
changes
that
we're
14
suggesting.
So
if
I'm
belaboring
a
point
or
if
it's
15
something
you've
already
read
in
our
written
comments,
let
16
me
know
and
I'll
move
on,
because
I
know
you've
got
a
busy
17
docket
today.

18
CHAIRPERSON
LLOYD:
We're
agreeing
with
you.

19
MR.
FRENCH:
Under
the
2003
standards,
understand
20
that
we
are
already
achieving
BACT,
and
that
requires
for
21
natural
gas
RICE
installation
of
catalytic
advanced
22
after­
treatment
systems.
Some
of
these
system
can
cost
23
$
30,000
to
$
50,000
a
unit.
And
remember
that
in
your
24
certification
rule,
in
the
certification
program,
you're
25
dealing
with
engines
that
are
generally
under
100
PETERS
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1
horsepower,
those
that
already
are,
sort
of,
under
the
2
radar
for
your
district
programs.

3
And
these
engines
may
cost
as
little
as
$
5,000.

4
So
you're
already
in
a
range
where
the
after­
treatment
is
5
exceeding
the
cost
of
the
underlying
engine.
Now,
2007
6
would
go
way
beyond
2003.
You'd
have
an
86
percent
7
compelled
reduction
in
NOx,
a
98
percent
reduction
in
CO
8
emissions.

9
And
that
type
of
step
for
these
types
of
engines
10
will
require
some,
as
of
now,
unforeseen
advancements
in
11
the
cost
efficiency
and
effectiveness
of
NOx
catalysts
and
12
other
technologies,
and
we're
just
not
confident
we
can
13
get
there.

14
We
would
also
say
that
that
target
is
so
15
aggressive
that
given
the
overall
market
volume
that
we're
16
dealing
with
for
DG,
you
may
find
some
manufacturers
17
facing
a
disincentive
to
really
see
if
they
can
get
to
18
2007
thinking.
It's
a
forgone
conclusion
that
they
can't,

19
which
is
why
I
said
before
the
2005
technology
review,
if
20
the
2007
is
standards
are
set
in
stone,
may
become
for
21
RICE
engines,
natural
gas
engines,
somewhat
of
a
wasted
22
exercise,
because
you
may
not
find
a
lot
of
manufacturers
23
spending
a
lot
of
money
to
try
to
achieve
a
98
percent
24
reduction
over
a
four­
year
period.
It
just
may
not
be
25
cost
effective.
From
an
economic
perspective,
it
may
not
PETERS
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1
be
feasible
for
manufacturers
to
spend
those
dollars
in
2
that
manner.

3
And,
again,
if
that's
what
the
effect
of
this
is
4
to
drive
RICE
out
of
this
marketplace,
aren't
we
setting
5
up
a
dynamic
that's
fundamentally
inconsistent
with
the
6
ARICE
program
and
the
ARES
program.
And
if
we
are,
I
7
think
we
ought
to
double
check
whether
or
not
that's
sound
8
public
policy
for
all
the
reasons
that
we've
seen
for
9
either
over
the
course
of
the
summer
with
respect
to
10
energy
concerns.

11
Bear
in
mind
that
the
relative
efficiency
of
a
12
turbine,
not
counting
CHP,
but
a
turbine
is
at
about
20
to
13
25
percent
energy
efficient.
A
RICE
engine
is
generally
14
in
the
range
of
45
to
50
percent
efficient,
so
there
are
15
energy
tradeoffs
that
you're
concerned
with
when
you're
16
ruling
out
RICE
engines.

17
We've
also
seen
the
greenhouse
gas
factors
for
18
some
of
these
other
technologies,
where
RICE
engines
are
19
very
favorable
on
that
front
as
well.

20
The
proposal
that's
before
you,
in
our
view,
does
21
not
adequately
address
the
cost
issues
to
manufacturers.

22
In
fact,
there
are
no
cost
parameters
considered
with
23
respect
to
what
happens
in
2007,
the
types
of
expenditures
24
in
R&
D
and
result
in
product
costs
that
would
follow
from
25
the
implementation
of
2007.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
124
1
People
say,
well,
we'll
just
get
to
that
when
we
2
get
to
that.
I'm
not
entirely
sure
that
that's
consistent
3
with
your
legal
obligations
to
fully
consider
the
cost
4
impacts
of
what
you're
voting
on.
But
understand
also
for
5
2007,
you're
voting
on
something
that
you
don't
know
what
6
the
cost
impacts
are.
And
I
would
submit
that
they
are
7
cost
prohibitive
impacts
for
natural
gas
RICE
engines.

8
We
have
other
more
technical
comments
that
we've
9
submitted
in
our
writing
to
the
Board.
We
would
recommend
10
those
to
you.

11
And
just
in
summary
then,
we
would
ask
that
you
12
give
earnest
consideration
to
either
delaying
the
2007
13
standards
to
2011
to
allow
better
coordination
with
some
14
of
our
other
public
policy
initiatives
or
have
a
much
more
15
comprehensive
tech
review
in
2007
that
will
therefore
16
create
the
prospect
that
that
can
be
a
meaningful
review
17
process.

18
And
I
might
also
add
that
bear
in
mind
that
the
19
emissions
from
this
source,
under
a
100
horsepower
DG
20
application,
the
aggregate
emissions
are
not
even
in
your
21
inventory
right
now
according
to
your
staff
report.

22
So
if
you
try
to
do
a
cost
per
ton
benefit
23
analysis,
you
couldn't
do
it.
It
would
be
off
the
chart.

24
So
that
also
weighs
in
terms
of
the
cost
effectiveness
of
25
what's
being
discussed
here
today.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
125
1
That
concludes
my
comments.
Again,
those
2
concerns,
notwithstanding
despite
2007,
a
process
that
3
your
staff
undertook
under
an
accelerated
time
frame
was
4
admirable.
And
that's
all
I
have.
I'd
be
happy
to
try
to
5
answer
any
questions
you
have.

6
CHAIRPERSON
LLOYD:
Professor
Friedman.

7
BOARD
MEMBER
HUGH
FRIEDMAN:
In
your
summary
you
8
said
among
other
things
that
you
urged
a
more
9
comprehensive
assessment
and
review
in
'
07.
Did
you
mean
10
05?

11
MR.
FRENCH:
No.
I
mean
ideally
we'd
like
to
see
12
the
tech
review
in
'
07,
because
I
think
that
affords
more
13
opportunity
for
the
research
programs
that
are
in
ARICE
14
and
ARES
to
come
to
the
floor.
Now,
if
you're
going
to
15
stick
with
a
2005
tech
review,
I
would
say
that
definitely
16
needs
to
be
more
comprehensive.
Not
just
be
a
report
to
17
the
Board,
but
a
full
­­
not
adjudication,
but
a
full
18
consideration
of
the
merits
of
what
those
2007
standards
19
are
looking
like
at
that
point.

20
We've
heard
from
other
commenters
on
no,
no,
no,

21
make
sure
you
set
the
2007
standards
in
stone
so
that
the
22
2005
tech
review
doesn't
allow
for
any
slippage.
Well,

23
then
what's
the
point
of
having
the
review.
And,
in
fact,

24
we're
saying
that
without
a
real
opportunity
to
look
at
25
where
we
are
in
2005
the
prospect
of
full
reconsideration,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
126
1
I
fear
that
our
natural
gas
engine
suppliers
are
going
to
2
exit
this
marketplace.

3
BOARD
MEMBER
HUGH
FRIEDMAN:
Just
a
follow­
up,

4
what
does
the
staff
understand
the
technological
review
5
would
consist
of
in
2005?

6
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Staff
7
anticipates
that
that
review
would
be
along
the
same
lines
8
as
what
we
did
to
get
here
today.
So
we'd
talk
about
­­

9
BOARD
MEMBER
HUGH
FRIEDMAN:
Comprehensive,

10
reassessment,
full
discussion.

11
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Yes.

12
BOARD
MEMBER
HUGH
FRIEDMAN:
Whatever
has
been
13
chiseled
in
stone
can
be
rechiseled?
I
mean,
unless
it's
14
in
front
of
a
burning
bush,
in
which
case
­­

15
(
Laughter.)

16
MR.
FRENCH:
If
there's
a
burning
bush
talking,

17
we
all
go
home,
I
stipulate
to
that.

18
(
Laughter.)

19
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
You
got
20
me
earlier
with
the
love
and
the
diamonds
thing,
so
the
21
burning
bush,
we'll
include
that
if
you
want.

22
CHAIRPERSON
LLOYD:
Be
careful
of
the
bush.

23
(
Laughter.)

24
CHAIRPERSON
LLOYD:
Your
comment
about
ARICE,
did
25
someone
comment
on
that?
I
wasn't
aware
of
this
program
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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127
1
when
it
started.
It
sounds
from
your
testimony
that
ARB
2
is
not
involved
and
I
think
is
that
true
ARB
is
not
­­
is
3
ARB
involved
with
that
program?

4
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
I'd
be
5
glad
to
comment
on
that.
Peter
Venturini
is
a
member
of
6
the
ARICE
Committee
over
at
the
CEC.
Peter
is
our
7
Division
Chief.
We
also
have
one
of
our
managers
in
the
8
division
in
the
diesel
program
as
a
member
of
that.

9
And
in
the
course
of
developing
this
measure,
we
10
were
in
close
contact
with
the
main
staff
person
about
the
11
levels
we
were
considering.
In
fact,
I
got
an
Email
as
12
recently
as
a
couple
of
weeks
ago.
They
wanted
to
double
13
check
and
make
sure
their
targets
for
an
RFP
that
they
14
were
released
were
in
line
with
what
we
were
recommending.

15
So
we
intend
to
stay
dialed
into
that.

16
CHAIRPERSON
LLOYD:
That
program
is
already
17
underway?

18
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
And
clearly
19
we
need
advances
in
the
control
level
for
internal
20
combustion
engines
that
are
used
beyond
for
electricity
21
generation,
whether
or
not
the
engine
will
be
clean
22
enough,
so
that
it's
desirable
relative
to
the
other
way
23
of
generating
electricity
is
independent
of
how
it
is
used
24
in
portable
equipment,
how
is
it
used
for
backup
emergency
25
generation,
how
is
it
used
for
all
the
other
uses
of
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
128
1
internal
combustion
engine.

2
MR.
FRENCH:
And
I
understand
that,
but
I
just
3
want
the
Board
to
be
aware
from
the
manufacturers'

4
perspective
that
when
you
say
aye
to
2007,
you're
probably
5
saying
so
long
to
natural
gas
engines
in
this
application.

6
CHAIRPERSON
LLOYD:
I
guess
you
can
turn
that
7
around
in
saying
when
you're
look
at
the
business
cycle
8
for
business
purposes
at
least
you
have
some
parameters
9
that
you
can
evaluate
in
terms
of
that
business
decision.

10
MR.
FRENCH:
Right,
but
you
know
86
percent
and
11
98
percent
off
of
a
.15
gram
standard
over
four
years
in
12
this
market
share
is
very,
very
tough.

13
Thank
you
very
much.

14
CHAIRPERSON
LLOYD:
Thank
you
Tim.

15
Sorry,
Mr.
Calhoun.

16
BOARD
MEMBER
CALHOUN:
Mr.
French,
you
talked
17
about
the
2003
standards
and
the
2007
standards,
isn't
it
18
somewhat
premature
to
make
a
definitive
statement
about
19
the
feasibility
of
the
2007
standards?

20
MR.
FRENCH:
All
we
can
do
is
go
on
with
what
we
21
know
about
today
in
terms
of
relative
cost
for
this
size
22
engine.
Now,
if
you're
talking
about
a
4,200
horsepower
23
engine
that
is
in
some
very
large
distributed
generation
24
situations
or
pumping
applications,
there
I
agree,
that
if
25
we
were
talking
about
what's
feasible
in
2007,
we'd
have
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
129
1
lot
more
leeway
in
terms
of
what
we
could
promise.

2
But
this
is
a
100
horsepower
or
less
where
the
3
underlying
cost
of
the
engine
might
be
$
5,000,
$
7,000,

4
$
10,000.
And
in
that
application,
we
feel
pretty
5
confident
that
the
cost
prohibitiveness,
even
if
you
could
6
make
technology
breakthroughs
is
going
to
not
keep
us
in
7
this
marketplace.

8
BOARD
MEMBER
CALHOUN:
Well,
I'll
now
go
ahead
9
and
ask
you
the
question
I
had
intended
to
ask.

10
MR.
FRENCH:
Oh,
I'm
sorry.

11
BOARD
MEMBER
CALHOUN:
No,
that's
fine.
I
said
12
are
the
standards
of
technology,
are
they
technically
13
feasible
is
that
the
problem,
or
is
it
that
the
cost
to
do
14
that
would
be
prohibitive?

15
MR.
FRENCH:
I
think
our
principal
concern
right
16
now
is
that
for
this
size
category,
given
what
we
know
17
today
about
catalysts
that
can
be
used
either
lean
burn
or
18
rich
burn
natural
gas
engines
is
technologically
19
infeasible
to
think
that
we
can
get
to
those
numbers
in
a
20
commercially
viable
way.

21
BOARD
MEMBER
CALHOUN:
The
staff
has
indicated
22
that
­­

23
BOARD
MEMBER
HUGH
FRIEDMAN:
But
he's
combined
24
his
answers,
as
I
heard
it.
When
you
added
it
in
a
25
commercially
economic
way
or
feasible
way,
you're
­­
is
it
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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130
1
not
feasible
technologically,
regardless
of
cost?

2
MR.
FRENCH:
Right.

3
BOARD
MEMBER
HUGH
FRIEDMAN:
And
then
when
you
4
consider,
and
take
cost
into
account
and
what
you
think
5
the
consumer
will
or
won't
pay,
what
the
market
will
bear,

6
then
does
that
render
what
is
technologically,
we're
7
capable
of
achieving,
no
longer
viable
economically?

8
MR.
FRENCH:
It's
the
first
point
is
the
crux
of
9
our
comment.

10
BOARD
MEMBER
HUGH
FRIEDMAN:
So
it's
back
to
the
11
drawing
board.
Technologically
we
can't
do
it.

12
MR.
FRENCH:
We
can't
do
it.

13
BOARD
MEMBER
HUGH
FRIEDMAN:
No
matter
what
the
14
cost
is?

15
MR.
FRENCH:
As
we
sit
here
today,
that's
our
16
best
assessment.

17
BOARD
MEMBER
HUGH
FRIEDMAN:
Yeah,
that's
your
18
estimate
of
what
will
happen
several
years
from
now?

19
MR.
FRENCH:
Yes.
And,
again,
you
just
don't
20
have
as
much
opportunity
when
the
source
and
the
package
21
is
at
this
size
range.

22
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
One
23
follow­
up
comment
from
staff.
You
might
have
noticed
when
24
we
did
our
presentation
on
the
certification
side
of
these
25
two
items,
you
did
not
see
an
IC
engine
example
given,
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
131
1
photograph.
That's
primarily
because
we're
not
aware
of
2
any
engines
in
that
size
category
that
are
being
used
for
3
DG.

4
Larger
IC
engines
would
fall
under
the
permit
5
program.
And
Mr.
French
mentioned
earlier
that
the
6
inventory
was
limited
for
this
category.
To
our
7
knowledge,
we
have
not
been
able
to
identify
an
existing
8
unit.
There
are
some
manufacturers
who
have
indicated
an
9
interest
and
now
have
an
IC
engine
based
unit
out
there.

10
However,
that
would
fall
under
district
requirements.

11
CHAIRPERSON
LLOYD:
Ms.
D'Adamo.

12
BOARD
MEMBER
D'ADAMO:
I'm
looking
through
the
13
material
here,
and
I
missed
this
morning's
presentation
by
14
staff,
so
I
apologize
if
you
went
over
this,
but
did
staff
15
prepare
a
cost
effectiveness
analysis?

16
PERMIT
ASSISTANCE
CENTER
MANAGER
MARTIN:
Staff
17
presented
some
cost
information
this
morning.
And
18
essentially
what
we
estimated
for
the
cost
of
complying
19
with
the
2003
standard,
the
cost
would
be
somewhere
20
between
$
10,000
and
$
20,000.
That
would
include
the
cost
21
of
doing
a
source
test,
pulling
the
application
materials
22
together
and
paying
the
$
2,500
application
fee.

23
We
noted
that
in
the
case
of
the
2007
standards,

24
it
was
not
possible
for
us,
at
this
time,
to
make
an
25
estimate
of
what
the
cost
of
compliance
is.
There
are
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
132
1
number
of
alternatives
that
the
manufacturers
can
use
to
2
reduce
or
can
consider
to
reduce
emissions
including
3
redesign,
increasing
efficiency,
adding
on
CHP
or
adding
4
on
control
equipment.
But
because
there
is
a
variety
of
5
measures
that
they
have
at
their
hands,
we
didn't
go
into
6
a
detailed
cost
analysis.
We
intend
to
revisit
that
in
7
2005
as
part
of
our
technical
review.

8
BOARD
MEMBER
D'ADAMO:
How
does
that
analysis
or
9
lack
of
an
analysis
when
a
regulation
is
technology
10
driven,
how
does
that
compare
to
other
regulations?
I
11
don't
know
if
you'd
be
the
proper
person
to
answer
that
or
12
someone
else
on
the
mobile
source
side
of
things,
where
we
13
adopt
a
regulation
and
we
realize
upfront
that
the
14
technology
is
not
yet
present,
do
we
normally
defer
cost
15
effective
analysis
for
a
later
date?

16
EXECUTIVE
OFFICER
KENNY:
Let
me
try
to
take
a
17
stab
at
this.
Normally,
we
do
not
defer.
The
difference
18
here
is
that
we
do
have
legislative
direction
that
we
19
were,
essentially,
to
put
together
standards
for
20
distributed
generation
for
2007,
so
that's
why
we
have
21
done
this.

22
I
would
also,
essentially,
I
think,
add
that
with
23
regard
to
the
answer
you
just
heard,
that
I
think
there's
24
a
kind
of
clarification
that
needs
to
be
added
to
it.
We
25
do
have
cost
estimates
with
regard
to
a
number
of
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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133
1
technologies,
even
before
2007
and
those
would
be
the
2
solar,
the
wind,
the
fuel
cells
things
like
that.

3
And
the
2003
cost
estimates
that
we
provided
to
4
you
today
would
be
essentially
applicable
also
for
2007
5
with
the
anticipation
also
that
with
additional
time,

6
those
numbers
would
be
potentially
lower
than
we
are
7
anticipating
for
2003.

8
What
we
don't
have
is
essentially
the
ability
to
9
provide
cost
estimates
in
2007
for
the
IC
engine
10
technologies
or
for
the
microturbine
technologies.
And
11
the
reason
for
that
is
that
they
are
going
to
have
to
make
12
a
substantial
jump
with
regard
to
their
emission
controls
13
in
order
for
them
to
be
able
to
meet
those
particular
14
levels
that
are
being
established
for
2007.

15
But,
again,
what
we
were
trying
to
do
is
meet
the
16
base
line
direction
of
the
Legislature,
which
is
that
we
17
were
to
establish
standards
that
matched
up
with
central
18
station
power
plants,
so
that,
in
fact,
the
general
power
19
that
was
provided
throughout
the
state
of
California
would
20
be
as
clean
or
cleaner
than
central
station
powerplants.

21
BOARD
MEMBER
D'ADAMO:
Right,
and
the
legislation
22
doesn't
require
cost
effectiveness
as
part
of
the
23
analysis.

24
EXECUTIVE
OFFICER
KENNY:
Correct,
and
I
think
25
what
we
­­
and
part
of
the
reason
that
we
are
trying
to
PETERS
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1
come
back
in
2005
is
that
we
will
have
a
better
handle
on
2
some
of
the
technologies
that
have
been
developed
for
3
microturbines
and
for
IC
engines
and
to
provide
you
with
4
kind
of
numbers
that
can
then
be
used
for
consideration.

5
I
do
think
it's
going
to
be
a
very,
very
tough
6
challenge
for
the
microturbines
or
for
the
IC
engines
to
7
meet
those
particular
numbers
at
lower
costs.

8
BOARD
MEMBER
D'ADAMO:
Thank
you.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much.

10
Chuck
Solt,
Karl
Stoffers
and
Mohsen
Nazemi.

11
MR.
SOLT:
I
only
have
one
item
I
was
going
to
12
address
today,
and
that's
basically
the
same
item
that
13
Ralph
Ordonez
talked
about
earlier,
the
issue
of
the
14
recommended
change
by
staff
in
the
certification
program
15
to
drop
the
efficiency
threshold
and
the
recommendation
16
that
that
be
carried
over
into
the
guidance
documents
17
also.

18
I
would
like
to
suggest
that
consideration
of
the
19
heat
recovery
credit
is
not
an
option.
The
heat
recovery
20
from
large
central
gas
turbines
was
considered
in
21
establishment
of
the
.07
pounds
per
megawatt
hour
number
22
which
is
the
2007
number.
No
existing
large
gas
turbine
23
projects
or
any
of
the
ones
that
are
currently
under
24
construction
can
meet
the
.07
without
the
heat
recovery
25
consideration,
and
none
of
them
meet
60
percent
overall
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
average
annual
overall
efficiency.

2
Distributed
generation
needs
the
same
appropriate
3
consideration
of
the
emission
reductions
associated
with
4
the
heat
recovery
in
order
to
meet
the
.07.

5
At
.07
with
the
heat
recovery
credit,
any
6
distributed
generation
unit
will
be
as
clean
or
cleaner
7
than
the
alternative
of
purchasing
electricity
and
using
a
8
boiler
to
provide
the
heat
requirements.
Exclusion
of
a
9
heat
credit
by
an
efficiency
threshold
would
kill
many
10
clean
distributed
generation
projects.

11
If
the
efficiency
threshold
is
maintained,
it
12
will
have
a
negative
impact
on
the
environment.
It
will
13
impose
economic
hardship
on
many
California
companies
and
14
on
the
State
of
California
institutions.
And
accordingly,

15
it
will
have
a
significant
impact
on
the
California
16
economy
and
it
will
eliminate
many
distributed
generation
17
projects
that
would
have
provided
much
needed
electric
18
generation
capacity
in
California.

19
That's
all
I
have.

20
Thank
you.

21
CHAIRPERSON
LLOYD:
A
pretty
strong
statement
in
22
there
in
terms
of
what
impact
that
phrase
would
have.
I'd
23
like
to
get
staff's
response
on
that.

24
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
25
Tollstrup,
again.
The
.07
standard,
Mr.
Solt,
is
correct
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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362­
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1
that's
based
on
what
we
believe
is
equivalent
central
2
station
powerplant
50
percent
efficiency
for
that
type
of
3
a
unit.
It
does
use
heat
recovery.
It
does
make
that
4
consideration.

5
The
CHP
into
that,
which
is
an
option
that
we
6
provided,
again,
we've
asked
that
we
be
able
to
come
back
7
with
updates
to
not
only
the
BACT
numbers
but
the
CHP
8
numbers
as
well
and
to
work
with
others
to
establish
the
9
proper
procedure,
at
least
on
the
certification
side
­­
or
10
on
the
guidance
side
to
see
how
that
gets
incorporated.

11
CHAIRPERSON
LLOYD:
Does
that
satisfy
you?

12
MR.
SOLT:
If,
in
fact,
there
will
be
additional
13
consideration
of
what
I
presented,
yes.

14
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Yeah,

15
we
will.

16
CHAIRPERSON
LLOYD:
Thank
you.

17
Professor
Friedman.

18
BOARD
MEMBER
HUGH
FRIEDMAN:
This
is
not
a
19
complete
sentence,
so
I'm
having
trouble
understanding
20
what
it
is.
I
mean,
unless
I'm
missing
something.
The
21
phrase
is
out
of
context,
and
I
didn't
go
back
and
read
22
its
source.
But
that
you
agree
with
all
of
the
23
consequences
that
he's
pointed
out
will
ensue
if
that
24
phrase
is
not
deleted?

25
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
I'm
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
sorry,
what?

2
CHAIRPERSON
LLOYD:
This
is
referring
to
his
3
letter.

4
BOARD
MEMBER
HUGH
FRIEDMAN:
I'm
referring
to
his
5
letter.
I'm
referring
to
his
letter
and
I
don't
see
­­

6
I'm
sorry,
I
didn't
make
myself
clear.
I'm
referring
to
a
7
letter
that
Mr.
Solt
submitted.

8
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Staff
9
does
not
agree
that
this
will
have
a
negative
impact
on
10
the
environment.
Obviously,
I
think
that
the
program
that
11
we
have
before
you
today
will
result
in
the
cleanest
12
technologies
available
being
put
into
use.
That's
13
definitely
a
positive
effect.

14
We
think
that,
again,
that
the
DG
market
is
15
emerging.
And
we
are
evaluating
that
and
we
will
come
16
back
in
2005
with
an
update
as
to
where
that
is
and
the
17
impacts
that
that
does
have.
So
we
have
a
mechanism
in
18
there
to
deal
with
these
issues.

19
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
do
you,
first
20
of
all,
agree
that
the
continued
presence
and
inclusion
of
21
this
phrase
in
the
sentence,
whatever
it
is
that
contains
22
it,
is
necessary
and
that
if
it's
retained
it
will
­­
you
23
said
it
will
not
have
a
negative
effect
on
the
24
environment,
in
your
opinion.

25
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
That's
correct.

2
BOARD
MEMBER
HUGH
FRIEDMAN:
In
deed,
it's
3
presumably
not
counterproductive.
It's
intended
to
­­

4
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
To
5
provide
and
incentive
or
flexibility,
yes.

6
BOARD
MEMBER
HUGH
FRIEDMAN:
Although,
do
you
7
agree
that
it
will
or
will
not
have
an
economic
­­

8
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
I
9
think,
at
this
point
in
time,
it's
difficult
to
tell
what
10
the
economic
impacts
will
be.

11
BOARD
MEMBER
HUGH
FRIEDMAN:
It
could
12
potentially,
that's
part
of
this
cost
issue?

13
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
And
14
that's
what
staff
has
agreed
to
come
back
and
address
as
15
we
get
more
information.

16
BOARD
MEMBER
HUGH
FRIEDMAN:
And
you
can't
agree
17
that
it
absolutely
for
sure
will
eliminate
a
lot
of
18
distributed
generation
projects?

19
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Well,

20
I
think
there
is
a
number
of
technologies
that
are
21
available
right
now
that
can
meet
the
standard.
There
are
22
some
obviously
in
the
market
that
can't.

23
CHAIRPERSON
LLOYD:
I
think
Mr.
Solt's
got
our
24
attention,
and
I
would
suggest
to
staff
that
maybe
given
25
the
content
of
the
letter
and
the
distribution
list,
I
PETERS
SHORTHAND
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916)
362­
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139
1
think,
we
should
maybe
­­
it
would
prudent
to
respond?

2
MR.
SOLT:
You
mean
right
now?

3
CHAIRPERSON
LLOYD:
No,
no,
no,
for
them
to
4
respond.

5
Thank
you.

6
MR.
SOLT:
Thank
you.

7
Karl
Stoffers,
and
also
if
you
could
identify
the
8
person
with
you,
Mohsen
Nazemi
and
Joan
Lee.

9
MR.
STOFFERS:
Good
morning.
Thank
you
for
10
allowing
us
to
speak.
My
name
is
Karl
Stoffers
­­

11
CHAIRPERSON
LLOYD:
Can
you
speak
closer
to
the
12
mic,
we
can't
hear
you.

13
MR.
STOFFERS:
My
name
is
Karl
Stoffers.
I
am
a
14
retired
faculty
member
from
California
State
University,

15
Sacramento.
I'm
a
member
of
Gray
Panthers
and
Joan
Lee,

16
who
is
with
me,
is
our
chairperson.

17
I
am
concerned
about
clean
air,
because
clean
air
18
affects
our
health,
my
health.
I
am
concerned
about
clean
19
air,
because
of
the
long­
range
dangers
of
global
warming.

20
I
think
you
see
presentations
today
have
very
much
been
21
concerned
with
the
balance
of
resources
that
use
renewable
22
energy
like
solar
and
wind,
and
those
that
are
based
on
23
fossil
fuels.

24
We
all
know
about
the
fuel
aspect.
This
one
25
thing
with
the
renewable
resources
wind
and
sunshine
is
PETERS
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REPORTING
CORPORATION
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1
that
once
you
have
installed
your
system,
the
energy
comes
2
for
free.

3
With
fossil
fuel
based
resources
month
after
4
month,
you
pay
a
bill
for
your
fuel
and
we
have
5
experienced
during
the
last
year,
year
and
a
half
what
can
6
happen
to
the
prices
of
fossil
fuels.

7
Additionally,
we
have
had
recent
bad
experiences
8
with
terrorism
and
therefore
the
possibility
that
your
9
fuel
resources
will
be
disrupted
by
an
evil
act
should
not
10
remain
outside
of
our
thinking
of
what
we
will
do.

11
If
this
Board
adopts
tough
requirements
for
12
emissions,
then
a
beneficial
side
effect
is
that
for
the
13
foreseeable
future
the
balance
between
small
powerplants
14
based
on
renewable
resources
and
small
powerplants
based
15
on
fossil
fuels,
will
be
shifted
in
the
direction
of
the
16
renewable
clean
resources.

17
I
think
this
consideration
is
an
additional
18
reason
why
the
Board
should
resolve
to
have
tough
19
standards
for
emissions,
pursue
certification
of
20
facilities
and
impose
penalties
for
violations
of
those.

21
Thank
you
for
listening
to
me.

22
CHAIRPERSON
LLOYD:
Thank
you
for
pointing
out
23
that
I
think
you've
emphasized
something
which
we've
not
24
heard
in
the
testimony
and
that
is
the
benefits
of
these
25
zero
emission
technologies
and
renewables
which
clearly
is
PETERS
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(
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1
considerable
and
will
only
get
more
important.

2
Thank
you.

3
MS.
LEE:
Thank
you
for
allowing
me
to
speak
just
4
a
little
out
of
order
here
since
the
two
of
us
have
come
5
together
to
speak
for
Gray
Panthers.
I'm
not
only
the
6
local
chairperson
of
Gray
Panthers,
but
also
the
7
legislative
liaison
for
the
entire
state.

8
And
some
gentleman
over
here
who
spoke
about
our
9
priority
setting
and
so
on,
I
would
like
to
point
out
that
10
we
set
our
priorities
nationally
through
a
democratic
11
process
in
a
convention.
And
that
trickles
down
until
the
12
local
chapters
meet
and
discuss
these
issues
and
set
their
13
priorities.
And
so
it's
all
done
in
a
very
democratic
14
fashion.

15
The
Gray
Panthers
have
been
involved
in
the
16
issues
of
clean
air
for
20
some
years
now.
I
testified
17
early
on
with
Lloyd
Connolley's
efforts
to
bring
into
18
control
rice
straw
burning.
We've
worked
with
the
Spare
19
The
Air
Program.
And
currently
I've
served
on
the
rice
20
alternative
grant
awards
review
team,
and
we
strongly
21
support
the
adoption
of
these
standards
and
urge
you
to
22
set
the
strongest
standards
possible
for
emission
and
23
efficiency.

24
And
we're
well
aware
that
you
need
to
strike
a
25
balance
in
siting
those
times
frames
to
allow
new
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
technologies
and
support
the
entrepreneurs
from
becoming
2
strongly
discouraged
to
cooperate
with
the
standards
and
3
work
toward
our
mutual
goals.

4
Don't
lose
sightof
the
fact
that
you
here
on
the
5
Board
represent
us,
that
you
are
speaking
for
us
when
you
6
set
these
standards.
And
we
count
on
you
to
represent
the
7
interests
of
real
people
out
there
in
the
communities
when
8
certifying
and
monitoring
power
sources.

9
In
weighing
the
efforts
of
this
program,
remember
10
the
costs
of
health
care,
which
are
way
out
of
control,

11
out
of
control
for
individual
Californians
who
are,
in
the
12
past
winter,
have
been
stressed
by
the
problem
of
deciding
13
between
food,
between
pills,
between
their
rent
and
their
14
energy
bills.

15
We
have
commiserated
with
them.
We
have
16
cooperated
with
the
CARES
program
which
is
trying
to
help
17
them
pay
their
energy
bills,
even
retroactively.
And
we
18
can't
postpone
the
speedy
movement
toward
containment
of
19
air
quality
problems.

20
There
are
so
many
of
us,
myself
included,
who
are
21
chronic
asthmatics,
who
have
emphysema,
who
have
heart
22
problems.
And
these
people
deserve
your
maximum
effort
to
23
move
and
support
these
strong
protections.

24
Thank
you
very
much.

25
CHAIRPERSON
LLOYD:
Thank
you
very
much.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
Mohsen
Nazemi,
Joan
Lee
and
Bud
Beebe.

2
MS.
LEE:
That's
me
Joan
Lee.

3
CHAIRPERSON
LLOYD:
Oh,
thank
you.
Sorry.

4
Mohsen,
welcome.

5
MR.
NAZEMI:
Good
afternoon.
My
name
is
Mohsen
6
Nazemi.
I'm
Assistant
Deputy
Executive
Officer
of
the
7
South
Coast
Air
Quality
Management
District.
And
I'm
in
8
charge
of
Permitting
and
Compliance
of
both
central
power
9
generation
as
well
as
distributed
generation
in
South
10
Coast.

11
First
of
all,
I
want
to
indicate
upfront
that
I
12
am
in
support
of
both
programs
that
ARB
is
voting
on
13
today.
And
I
want
to
commend
ARB
staff
for
the
hard
work
14
they've
done.
I
think
they've
done
an
excellent
job.

15
As
we
all
learned,
sort
of,
painfully
the
last
16
couple
of
years,
the
electric
generation
is
of
significant
17
growth
to
an
unprecedented
urgency
in
the
last
two
years.

18
And
individually
or
cumulatively,
the
emissions
could
have
19
a
significant
impact
on
the
air
quality.
So
the
efforts
20
that
you're
talking
today
is
going
to
go
a
long
way.

21
As
recommended
by
Dr.
Lloyd,
I'm
going
to
break
22
up
my
comments
into
two,
one,
regarding
certification
and
23
one
regarding
the
guidance
document.

24
On
the
certification,
South
Coast
strongly
25
supports
the
program.
These
are
sources
of
electrical
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
generation
that
are
typically
unregulated
because
of
the
2
exemptions
at
the
local
districts.
And
again
in
3
aggregate,
the
result
in
emissions
could
be
significant
4
for
the
region
and
for
localized
areas.

5
We
believe
it's
appropriate
to
recognize
the
6
efficiency
of
fuel
use
and
reduced
greenhouse
gases
in
the
7
certification
program.
And,
in
general,
these
sources
do
8
not
go
through
the
regular
permitting
process
where
BACT
9
offsets
and
all
the
other
stuff
is
looked
at.
So
it
is
10
appropriate
to
look
at
all
of
that.

11
My
only
two
comments
on
the
certification
program
12
are,
one,
that
enforcements
should
be
a
very
integral
part
13
of
this
program.
I
understand
that
ARB
is
responsible
for
14
this
program.
And
South
Coast
supports
any
effort
that
we
15
can
do
in
terms
of
assistance
and
looking
at
random
16
testing
of
actual
field
units,
because
one
particular
17
lesson
that
we
have
learned
is
that
it's
fine
to
have
a
18
laboratory
or
a
model
unit
certified,
but
once
it
goes
out
19
in
the
field,
especially
if
it
has
sophisticated
control
20
systems
associated
with
it,
the
actual
operator
could
do
a
21
lot
of
things
with
the
unit
that
may
not
actually
perform
22
in
its
intended
performance
level.
So
we
urge
you
to
have
23
a
careful
look
at
that.

24
And
then,
secondly,
there
are
some
requirements
25
that
we
use
whenever
we
see
a
technology
that
hasn't
PETERS
SHORTHAND
REPORTING
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1
really
been
proven.
And
I
just
want
to
recommend
that
in
2
some
cases
you
may
need
to
look
at
tests
from
a
couple
of
3
models,
the
same
model
engines
or
whatever
type
of
units
4
before
the
units
are
certified.

5
With
respect
to
the
guidance
document,
I,
first
6
of
all,
recognize
that
this
is
just
a
guidance
document.

7
So
I
understand
that
districts
can
do
different
things
8
with
the
guidance
document
as
they
go
through
their
permit
9
process
on
a
case­
by­
case
basis.
This
was
something
that
10
the
SB
1298
required
and
therefore
it's
there.

11
However,
I
want
to
point
out
that
the
guidance
12
document
references
what
BACT
is.
And
BACT
is
really
a
13
program
under
new
source
review.
It's
generally
14
administered
under
the
federal
and
state
Clean
Air
Act
and
15
the
local
new
source
review
program.
There
are
certain
16
requirements
that
we
go
through.

17
In
general,
what
I
want
to
point
out
is
that,

18
first
of
all,
the
size
of
the
units
that
are
being
19
considered
under
this
guidance
document
compared
to
the
20
previous
guidance
document
that
your
board
approved
seems
21
to
imply
that
if
it's
less
than
50,
it
should
be
treated
22
differently
than
a
central
power
generation.

23
I
just
want
to
point
out
that
just
this
year
we
24
have
permitted
nine
units
in
that
three
to
12
megawatt
25
range
that
are
being
used
for
central
power
generation,

PETERS
SHORTHAND
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1
and
another
six
or
seven
in
the
12
to
50
megawatt,
again
2
at
central
generation.
We
have
similar
numbers
actually
3
in
the
process
of
being
permitted
now.

4
So
I
want
to
leave
with
you
the
impression
that
5
you
shouldn't
really
draw
a
big
distinction
between
6
central
generation
and
less
than
50
megawatts.
There
7
really
is
one
type
of
unit
that
should
be
regulated.

8
The
other
point
that
I
want
to
make
is
the
9
requirements
or
the
guidance
suggests
that
these
standards
10
be
established
in
pounds
per
megawatt
hour.
And
I
just
11
want
to
tell
you
what
the
reality
of
it
is
and
I
think
12
staff
has
recognized
that
as
part
of
the
information
in
13
the
document
that
the
local
districts
are
establishing
14
BACT
requirements
in
terms
of
emission
concentrations,

15
PPM.
And
to
imply
that
there
will
be
a
different
standard
16
in
the
guidance
document,
where
in
reality
the
local
17
districts
impose
those
requirements
in
PPM,
I
think,
may
18
be
confusing
to
some
of
the
public
and
industry
who
look
19
at
it.

20
However,
we
don't
really
have
an
objection
in
21
looking
at
different
ways
of
requiring
BACT.
I'm
just
22
telling
you
that
I
don't
want
the
Board
to
believe
that
23
once
this
document
is
approved
that
tomorrow
districts
are
24
going
to
impose
pounds
per
megawatt
hour.
That's
a
much
25
more
difficult
type
of
a
requirement
to
monitor
PETERS
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1
continuously
in
the
field.
And
for
permitted
equipment,

2
we
do
require
continuous
monitoring
and
several
other
3
things.
So
PPM
is
really
what
we
rely
on
for
enforcement
4
purposes.

5
On
that
basis
then
our
BACT
requirements,
and
6
I've
checked
this
with
several
other
districts,
I
believe
7
it's
common
throughout
California,
is,
at
this
time
at
8
least,
five
PPM
for
simple
cycle
and
two
and
a
half
PPM
9
NOx
for
a
combined
cycle
or
cogeneration
unit.

10
And
I
think
the
real
message
should
be
this
is
11
what
the
BACT
requirement
is,
this
is
what
the
guidance
is
12
telling
the
districts
to
do,
anything
that
implies,
for
13
example,
that
if
you
have
a
combined
cycle,
you
can
14
actually
have
a
threshold
higher
than
five
PPM,
I
think
is
15
not
in
reality
the
case.
The
districts
do
require
two
and
16
a
half
PPM
for
combined
cycle
and
cogeneration
units,
and
17
five
PPM
for
simple
cycle.
Now,
having
said
that,
I
think
18
we
still
support
what
you're
doing
in
the
certification
19
program,
which
is
efficient
use
of
fuel,
recovery
of
heat
20
or
power
and
reduction
of
greenhouse
gases.

21
But
as
late
as
yesterday
at
the
CEC
hearing,

22
there
was
a
big
discussion
on
simple
cycle
versus
combined
23
cycle,
and
the
State
still
believes
that
there
is
a
need
24
for
certain
peaking
power
that
can
be
brought
on
line
25
quickly.
And
those
are
generally
typically
simple
cycle
PETERS
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1
turbines.
They're
not
combined
cycle.
So
that's
why
2
there
are
these
two
standards.

3
And
these
two
standards
are
what's
in
place
4
today.
I
don't
want
to
also
give
the
impression
that
in
5
2007
BACT
for
central
power
and
for
cogeneration
or
6
distributed
generation
will
still
be
two
and
a
half
and
7
five.
By
then
things
may
change
and
that's
what
the
state
8
and
federal
law
actually
requires
us
to
do
to
move
ahead
9
with
advancement
in
technology.

10
So
in
a
nutshell,
I
think
my
recommendation,
as
11
stated
in
the
letter
by
Barry
Wallerstein
to
the
Board,
is
12
that
the
guidance
should
really
state
that
BACT
is
13
implemented
through
the
districts,
which
is
two
and
a
half
14
and
five
today,
and
with
a
caveat
that
local
districts
can
15
make
further
BACT
determinations,
go
forward
with
16
additional
case­
by­
case
determinations
and
determine
what,

17
in
each
cast
BACT
should
or
shouldn't
be.

18
My
only
other
comment
on
this
is
that
we
actually
19
support
the
permit
streamlining
provisions
and
20
recommendations
in
this
report.
Actually,
our
district
21
was
the
first
that
came
up
with
the
precertification
22
streamline
standard
permits
and
expeditious
processing.

23
And
Dr.
Burke
is
aware,
just
last
Friday
we
gave
a
24
presentation
to
the
Board
that
this
year
alone
we
have
25
reduced
­­
or
actually
we
have
increased
our
permit
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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1
production
by
50
percent
and
reduced
our
backlog
by
37
2
percent.

3
So
we
are
all
with
the
recommendations
and
we
4
encourage
that
other
districts
also
proceed
with
that.

5
With
that,
I'll
be
happy
to
answer
any
questions.

6
CHAIRPERSON
LLOYD:
Thirty­
seven
percent
of
what?

7
MR.
NAZEMI:
Of
our
backlog
at
the
beginning
of
8
the
year.
By
the
end
of
this
year
we'll
be
down
37
9
percent
on
permits
that
we
process.

10
CHAIRPERSON
LLOYD:
Thirty
percent
of
what
11
number?

12
MR.
NAZEMI:
Our
starting
number
was
around
ten
13
thousand
applications
and
we're
going
to
be
down
to
6,500
14
by
the
end
of
the
year.

15
CHAIRPERSON
LLOYD:
I'd
like
staff's
comment
on
16
the
point
that
Dr.
Wallerstein
made
vis
a
vis
the
BACT
17
numbers
of
five
and
2.5.

18
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
19
Tollstrup.
First
of
all,
I
fully
agree
with
Mr.
Nazemi's
20
comments.
He
certainly
had
some
valid
points.
When
staff
21
put
together
the
guidance
document
our
intent
was
to
set
22
the
ceiling
for
these
smaller
units
that
are
less
than
50
23
megawatts.
We
did
not
set
BACT
levels
for
combined
cycled
24
and
simple
cycle.
We
basically
set
the
ceiling
with
the
25
understanding
that
districts
will
go
through
their
BACT
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
process
and
evaluate
on
a
case­
by­
case
basis,
and
where
2
the
particular
application
merits,
where
they
can
use
the
3
low
temperature
catalyst
that
they
would
be
down
at
the
4
combined
cycle
limits.

5
And
we
fully
support
that
and
we
would
certainly
6
push
the
districts
toward
that
level.
It
is
not
7
specifically
listed
in
the
guidance.
Again,
we
had
a
8
single
level
that
represents
the
upper
end
and
would
be
9
the
simply
cycle
limits.

10
CHAIRPERSON
LLOYD:
What
about
the
comment
that
11
the
concern
here
that
the
district's
BACT
guideline
would
12
be
challenged
based
on
CARB's
recommendation
of
five?

13
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
I
think
we
14
can
go
in
and
clarify
in
the
guidance
before
we
put
it
out
15
as
a
final
that
where
someone
is
using
a
small
turbine
in
16
a
combined
cycle
mode
or
where
it's
in
a
combined
heat
and
17
power,
basically
that
reduces
the
temperature
so
that
the
18
more
efficient
catalyst
technology
is
feasible,
then
19
that's
BACT.

20
CHAIRPERSON
LLOYD:
Okay,
good.

21
DEPUTY
EXECUTIVE
OFFICER
SCHEIBLE:
We
don't
see
22
too
many
applications
like
that.
Most
of
the
combined
23
cycles
are
large
units.

24
CHAIRPERSON
LLOYD:
But
this
would
help,
yes.

25
Dr.
Burke.

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1
BOARD
MEMBER
BURKE:
Well,
since
I
have
a
vested
2
interest
in
his
testimony,
I'd
like
to
thank
Mr.
Nazemi
3
for
coming
and
I'd
like
to
thank
the
ARB
for
considering
4
our
letter.
We
did
have
some
concerns.
We
are
obviously
5
going
to
support
this,
but
you
know,
we
just
wanted
you
to
6
recognize
some
of
our
concerns.
We
appreciate
it.

7
CHAIRPERSON
LLOYD:
We
appreciate
it
coming.

8
Our
last
person
to
testify
is
Bud
Beebe
from
9
SMUD.

10
MR.
BEEBE:
Good
morning,
still,
I
think.
My
11
name
is
Bud
Beebe.
I
am
a
regulatory
affairs
coordinator
12
for
the
Renewable
Generation
Assets
Group
at
SMUD.
And
13
all
of
that
means
that
I
work
with
a
lot
of
distributed
14
generation,
particularly
those
that
can
add
societal
15
benefit
and
robustness
to
the
local
electrical
grid,
and
16
certainly
distributed
generation
is
a
part
of
that.

17
SMUD
has
a
stake
in
distributed
generation.
We
18
have
been
active
in
the
process
in
working
with
the
staff
19
and
helping
bring
some
of
the
experience
that
we've
had
20
with
distributed
generation
to
set
before
the
other
people
21
who
are
in
the
stakeholders
process.

22
And
I'd
like
to
congratulate
the
staff
really
on
23
being
able
to
put
together
what
is
not
only
a
set
of
24
regulations
done
in
a
short
amount
of
time,
but
also
a
25
very
concise
set
that
I
think
adds
an
accessibility
that
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
is
often
not
in
regulations.
I
think
people
can
read
2
these
things
and
understand
what
they
say
and
develop
3
business
plans
and
future
actions
based
on
them,
and
I
4
think
that's
a
very
important
piece
of
this.

5
Certainly,
at
SMUD
we
support
the
output
that
you
6
have
before
you
today,
and
hope
that
this
becomes
a
part
7
of
California's
future.

8
I'd
like
to
comment
on
what
the
gentleman
from
9
Bowman
mentioned
and
that
is
that
equivalent
and
equal
is
10
a
big
issue.
And
we
shouldn't
try
to
confuse
the
two.
I
11
think
we
are
on
track
to
understanding
that
we
want
to
do
12
equivalence
an
not
equals.
Equals
are
easy
for
staff
to
13
do
because
you
can
just
like
set
them
up
there
and
people
14
can't
really
shoot
at
you,
but
equivalents
are
much
more
15
difficult.
They
take
technical
depth.
They
take
an
16
understanding
of
processes
and
a
number
of
things,
and
17
that
is
a
difficult
point.

18
And
let's
start
to
look
at
just
some
of
the
19
examples
of
characteristics
of
distributed
generation
that
20
either
need
or
deserve
the
equivalency
that
is
not
equated
21
vis
a
vis
to
central
station
power.

22
And
certainly
central
station
power
is
the
bogey
23
that
we're
looking
at
here.
Central
station
power
today
24
in
California
is
very
clean
and
provides
electricity
25
efficiently
and
reliably
to
this
great
society.

PETERS
SHORTHAND
REPORTING
CORPORATION
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1
But
when
you
look,
for
instance,
at
line
losses,

2
central
station
power
has
line
losses
inherent
in
the
3
transformers
and
the
distribution
getting
it
down
to
where
4
the
loads
are
actually
applied.

5
Distributed
generation
can
make
great
strides
6
there.
And
these
regulations
should
recognize
that,
and,

7
in
fact,
they
do.

8
Some
of
the
criteria
pollutants
that
we
deal
with
9
in
central
station
power
need
to
be
dealt
with
differently
10
when
you
realize
that
this
stuff
is
going
to
be
in
11
somebody's
backyard.
CO,
Carbon
Monoxide,
for
instance
is
12
a
ground
release
from
a
combustion
source
to
a
distributed
13
generator,
may
well
need
to
have
a
different
equivalency
14
for
distributed
generation
relative
to
central
station
15
power.

16
So
these
things
that
the
staff,
from
my
view,
has
17
adequately
addressed
given
the
other
big
problem,
which
is
18
we
don't
really
know
what
the
future
is
going
to
bring.

19
We
know
what
we
have
as
a
present
system
using
emergency
20
diesel
backups,
central
station
power,
those
are
the
known
21
things.
Some
of
these
other
items
are
pretty
obvious,

22
like
line
losses
and
maybe
carbon
monoxide
as
a
local
23
ground
release.

24
But
what
we
see
as
a
paradigm
shift
in
the
use
of
25
distributed
generation
is
really
what's
of
concern
here.

PETERS
SHORTHAND
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1
If
we're
looking
at
tens
of
thousands,
hundreds
of
2
thousands
of
these
perhaps
combustion
based
devices,

3
deployed
throughout
the
urban
and
suburban
environments,

4
we
can
no
longer
continue
to
treat
these
things
as
de
5
minimis
as
they
certainly
are
in
the
local
implementation
6
plans
today.

7
And,
of
course,
what
Senator
Bowen's
bill
in
SB
8
1298
did
was
to
recognize
the
potential
for
this
big
9
change,
and
give
this
Board
the
requirement
to
put
10
together
adequate
defense
for
the
future
should
that
all
11
come
to
pass.

12
Photovoltaics
on
every
roof,
a
combustion
based
13
generator
in
every
basement,
whether
this
is
really
going
14
to
happen
or
not
we
can't
say,
but
we
do
know
that
we
15
can't
be
held
back
from
progress
in
the
future
as
we
see
16
it
by
our
fears
of
what
could
possibly
happen.

17
And
to
that
extent,
what
we
have
is
these
concise
18
regulations
and
guidance
and
certification
criteria
here
19
are,
in
our
belief,
very
­­
we're
very
supportive
of
that
20
and
we
think
that
the
process
can
go
ahead
in
a
practical
21
fashion
based
on
these
documents.

22
They
are
a
reasonable
starting
point
for
the
23
process
to
go
ahead,
but
really
the
challenge
that
I
see
24
is
to
take
these
documents
which
should
be
accessible
to
25
the
general
populous
and
for
architects,
mechanical
PETERS
SHORTHAND
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1
contractors,
electrical
contractors,
local
permitting
2
authorities
that
are
not
air
permitting
authorities,
the
3
building
owners,
the
building
leasers,
the
people
who
rent
4
space,
those
are
the
people
that
have
to
begin
to
5
understand
that
distributed
generation
is
not
emergency
6
generators
and
the
central
station
normal
distribution
7
system
that
we
have
today.

8
If
it's
going
to
give
us
the
societal
benefit
for
9
the
future,
the
people
who
use
it
and
architects
who
10
design
it
into
their
buildings
are
going
to
have
to
give
11
us
projects
that
will
allow
us
to
understand
how
society
12
will
use
this
so
that
this
good
start
in
the
certification
13
and
guidance
procedures
will
have
a
practical
foundation
14
in
order
to
go
from
2005
to
2007.

15
And
so
I
call
not
only
on
this
Board
but
on
the
16
general
population
who
could
use
this
stuff
to
bring
us
17
good
projects
that
become
good
examples
of
how
we
can
18
overcome
the
difficulties
of
combustion
technologies.

19
They're
not
particularly
efficient
in
the
distributed
20
domain,
that
have
some
other
problems
associated
with
them
21
and
give
us
projects
that
show
what
can
be
done.

22
That's
really
the
end
of
what
I
had
intended
to
23
say
when
I
came
into
this
building,
but
I
want
to
take
a
24
pot
shot
at
the
national
security
issue.

25
Distributed
generation,
as
I've
said,
is
not
just
PETERS
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1
emergency
generators
in
our
present
electrical
supply.

2
Although,
it's
a
very
reliable
supply,
a
very
robust
3
supply
as
we've
seen,
for
instance,
in
the
disaster
in
New
4
York
City.
It's
remarkable
that
we
were
able
to
look
at
5
television
cameras
focusing
on
that
stuff,
even
though
the
6
electrical
distribution
system
in
New
York
City
had
been
7
greatly
damaged
at
that
point.

8
But
for
those
of
us
who
have
been
looking
at
9
distributed
generation,
we
see
that
with
society's
10
changing
needs,
the
way
we
use
electricity,
distributed
11
generation
can
bring
with
it
a
tremendous
new
robustness
12
to
the
electricity
supply.
And
one
of
the
things
I
would
13
be
lost
if
we
stayed
in
this
present
paradigm
of
thinking
14
of
it
only
as
an
electrical
emergency
backup.

15
So
we
need
to
get
beyond
that.
And
if
we
do,

16
we'll
certainly
have
a
more
robust
­­
I
just
cut
myself
17
off
I've
done
that
before
­­
we
will
have
a
more
robust
18
electric
supply.
And
if
we
follow
those
processors
and
19
certification
procedures,
we'll
have
an
environmentally
20
superior
electricity
supply.

21
Thank
you
very
much.

22
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Any
23
questions,
comments?

24
Dr.
Burke.

25
BOARD
MEMBER
BURKE:
I
had
two
questions.
One,

PETERS
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1
how
many
units,
microturbines,
do
you
have
at
SMUD?

2
MR.
BEEBE:
I
have
one
that's
operational,

3
another
that
will
be
operational
in
three
weeks.
And
4
there's
been
an
evolution
there.
Do
you
want
to
know
5
other
distributed
­­

6
BOARD
MEMBER
BURKE:
What
I
was
trying
to
7
ascertain
is
when
our
staff
gave
us
this
presentation
this
8
morning,
they
called
on
you
as
­­
they
used
you
as
a
basis
9
of
authority
and
I
just
wondered
if
­­
so
they
were
basing
10
that
on
one
unit.

11
MR.
BEEBE:
They
tested
one
unit.
It
happened
to
12
be
ours.
And
I
think
that
the
advantage
was
that
ours
was
13
not
a
manufacturer's
unit.
It
was
a
unit
that
was
in
the
14
field
being
tested
in
a
grid
connected
environment.

15
BOARD
MEMBER
BURKE:
Okay.
But
it
was
a
16
manufacturer
that
they
had
mentioned,
because
I
recognized
17
it
from
the
picture.

18
And
on
the
national
security
issue,
don't
take
19
what
I
said
too
literally.
My
position
is
that
if
you
20
distribute
the
power
and
you're
not
based
solely
on
the
21
grid
as
a
source,
it
gives
you
a
greater
reliability
22
factor
in
certain
areas,
and
I'm
not
talking
about
in
the
23
standby
generator
capacity,
I'm
talking
about
the
straight
24
power
capacity.

25
You
know,
if
a
base
has
distributed
generated
PETERS
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1
power,
it
can
still
operate
if
the
main
grid
is
out.
So
2
you
know,
I
don't
want
you
to
think
that
I'm
talking
about
3
the
standby
generator
mode,
I'm
talking
about
an
actual
4
sustainable
reliable
generation
of
distributed
power
mode.

5
MR.
BEEBE:
Dr.
Burke,
I'm
very
glad
that
you
6
made
that
so
obvious
to
everyone
here.
That's
really
7
good.
And,
as
I
said,
SMUD
is
proud
of
our
reliability.

8
We
have
a
very
liable
distribution
grid
and
we
have
9
reliable
resources
coming
in
to
it.

10
That's
good.
But
if
distributed
generation
can
11
make
it
more
reliable,
we
want
to
see
that
for
our
12
customers
who
own
us.
And
if
we
can
do
all
that
and
not
13
foul
the
air,
that's
even
better.

14
CHAIRPERSON
LLOYD:
The
unit
that
was
tested
at
15
SMUD,
what
manufacturer
was
that?

16
MR.
BEEBE:
That
was
a
Capstone
model
330.
The
17
Capstone
model
60
or
the
60
kilowatt
unit
will
go
into
18
operation
within
about
four
weeks.

19
CHAIRPERSON
LLOYD:
I
thought
that
was
the
case.

20
I
just
wanted
to,
again,
point
out
that
we
have
a
letter
21
from
Capstone
but
nobody
was
testifying
on
behalf
of
22
Capstone
today.
And
I
gather
from
the
comments
of
the
23
letter,
they're
supportive
of
our
proposed
staff
24
recommendations.

25
MR.
BEEBE:
I
couldn't
speak
for
them,
but
they
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1
certainly
have
been
an
active
participant.

2
CHAIRPERSON
LLOYD:
Thank
you.

3
With
that,
Mr.
Kenny,
do
you
have
anymore
further
4
comments?

5
EXECUTIVE
OFFICER
KENNY:
Two
real
short
6
comments.
What
we
tried
to
do
here
is
essentially
carry
7
forward
the
Legislature's
and
Senator
Bowen's
intent
with
8
regard
to
1298.
What
we
think
we've
presented
to
you
is
9
something
that
actually
does
that.

10
And
then
secondly,
I
simply
want
to
commend
and
11
acknowledge
ARB
staff.
I
mean
the
objective
and
the
12
obligation
that
we
actually
had,
and
I'm
talking
13
specifically
about
the
people
directly
seated
behind
me,

14
was
to
bring
this
before
you
before
January
1st,
2003.

15
And,
in
fact,
the
people
behind
me
actually
16
brought
this
to
you,
you
know,
more
than
a
year
early.

17
And
that
was
essentially
a
fairly
daunting
task
and
yet
18
they
accomplished
it.
So
I
just
simply
wanted
to
really
19
kind
of
acknowledge
them.

20
CHAIRPERSON
LLOYD:
I'm
sure
in
that
spirit,

21
you're
going
to
let
them
coast
between
now
and
January
22
2003.

23
(
Laughter.)

24
EXECUTIVE
OFFICER
KENNY:
Unfortunately
no
good
25
deed
goes
unpunished.

PETERS
SHORTHAND
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1
(
Laughter.)

2
BOARD
MEMBER
RIORDAN:
Mr.
Chairman,
might
I
3
suggest
that
maybe,
Mr.
Kenny,
you
inform
the
author
of
4
the
bill
that
we
were
able
to
do
that.
I'm
sure
the
staff
5
is
probably
tracking
it,
but
that
is
commendable,
and
6
normally
government
is
never
so
efficient.

7
CHAIRPERSON
LLOYD:
I'd
like
to
close
the
record
8
first,
if
you
don't
mind,
Matt
and
then
­­
or
do
you
want
9
to
ask
some
questions?

10
Mr.
McKinnon.

11
BOARD
MEMBER
McKINNON:
Yeah,
I
really
apologize
12
for
missing
the
first
part
of
the
session
today.
In
my
13
other
world,
we
began
to
experience
another
waive
of
14
layoffs
in
the
airline
industry
and
­­
but
there
is
one
15
little
piece
of
this
that
I'm
still
trying
to
muddle
16
through.
And
that
is
the
turbine
efficiency
question
in
17
combined
cycle
settings
where
you're
considering
the
use
18
of
the
heat
and
in
some
cases
the
reuse
of
the
heat
in
the
19
turbine
cycle.

20
And
I
think
in
raising
this
issue,
first,
is
kind
21
of
recognition
that
staff
kind
of
was
pretty
innovative
22
here
to
start
working
through
this
area.
What
I'm
23
wondering
is
if
our
standard
that
we're
setting
in
that
24
area
is
too
far
from
what's
really
possible
today,
and
if
25
we
shouldn't
think
about
getting
it
closer
to
what's
PETERS
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1
possible
today
to
encourage
folks
to
develop
in
that
area?

2
So
it's
kind
of
a
two­
part
question,
and
I'm
interested
in
3
staff's
opinion
on
that.

4
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
Mike
5
Tollstrup.
Again,
there
certainly
are
some
issues
with
6
efficiency
in
meeting
the
standards
that
we
try
to
7
encourage
the
use
of
CHP,
include
efficiency
numbers
8
there,
recognizing
that
there
were
some
hurdles
to
come.

9
We
set
a
very
high
mark
for
folks
to
meet
on
that
side.

10
On
the
other,
well
­­
go
back
to
2003
standards.

11
The
2003
standards
we
set
them.
They
were
achievable
12
levels
that
we
believe
are
out
there
now.
There
is
an
13
option
to
consider
CHP
efficiency
standards
on
the
cert
14
side
for
that
program.

15
On
the
2007
side,
again,
we
set
the
levels
16
comparable
to
central
station
powerplants
as
directed
by
17
the
legislation.
And
in
addition
to
that,
it
wasn't
a
18
requirement
of
1298,
but
it
was
to
provide
what
we
thought
19
was
some
needed
flexibility,
the
consideration
of
CHP
as
20
an
alternative
to
meeting
that
direct
central
station
21
powerplant
level.

22
I'm
not
sure
if
I
answered
your
question,
but
23
that's
kind
of
where
staff
went
with
the
numbers
and
what
24
we
think
is
achievable
now
for
2003.
And
then
2007
there
25
certainly
are
some
issues
in
meeting
those
numbers.

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1
CHAIRPERSON
LLOYD:
Professor
Friedman.

2
BOARD
MEMBER
HUGH
FRIEDMAN:
Matt,
I
just
wanted
3
to
­­
I
realize
you
missed
some
of
this
dialogue.
I
think
4
you
came
in
after
we
had
a
fair
amount
of
conversation
on
5
that
point.
You're
not
the
only
that
had
concerns,
I
know
6
I
did,
about
the
cost
and
whether
it
was
feasible,
the
7
2007.

8
Apparently,
they're
satisfied
that
the
2003
9
standards
are
presently
achievable.
And
we're
in
2005
10
under
this
proposal
going
to
have
a
pretty
full
blown
11
comprehensive
review,
technological
review,
which
will
12
include
what's
now,
or
in
2005,
one
of
the
things
that
13
would
then
be
available
are
what
the
costs
are
and
what
14
the
problems
are
to
move
it
forward
and
to
attain
these
15
set
standards
for
2007.

16
And
then
in
light
of
what
ever
we
learn
then,

17
we're
in
a
position
or
whoever
our
successors
may
be
to
18
make
appropriate
adjustments,
at
least
that
was
the
19
conversation,
and
the
focus
was
largely
on
that.

20
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
I
21
might
also
add
that
we've
had
fairly
extensive
discussions
22
today
on
both
sides
from
the
environmental
concerns
and
23
then
also
from
the
industry
side
on
the
standard.
And
24
staff
has
agreed
to
go
back
and
look
at
the
CHP
to
see
if
25
there
is
a
methodology
we
could
use
to
enter
in
or
bring
PETERS
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1
this
consideration,
provide
some
flexibility
to
the
2
manufacturers.
And
that
will
be
part
of
the
2005
update
3
that
we
bring
back
to
the
Board.

4
BOARD
MEMBER
McKINNON:
Okay.
Well,
I'm
still
a
5
little
bit
uncomfortable
about
it,
but
I
think
that
it
was
6
a
pretty
innovative
piece
to
move
in
with
this.
And
I
7
think,
you
know,
you
all
did
good
with
it.
I'm
just
8
wondering
if
we've
left
enough
room
there.
And
so
I
guess
9
we'll
find
out
in
2005.
I'm
not
overwhelmed
with
joy
10
about
that
approach
to
it,
but
I
otherwise
think
that
it's
11
very,
very
important
that
we
do
this
regulation.

12
Thank
you.

13
CHAIRPERSON
LLOYD:
We
don't
have
to
wait
until
14
2005.

15
I
guess
what
I'd
like
to
do,
I
guess
we'll
have
16
some
more
discussion
on
this
issue,
but
I'd
like
to
close
17
the
record
on
this
agenda
item.
However,
the
record
will
18
be
reopened
when
the
15­
day
notice
of
public
availability
19
is
issued.
Written
or
oral
comments
received
after
this
20
hearing
date,
but
before
the
15­
day
notice
issue
will
not
21
be
accepted
as
part
of
the
official
record
on
this
agenda
22
item.

23
When
the
record
is
reopened
for
a
15­
day
comment
24
period,
the
public
may
submit
written
comments
on
the
25
proposed
changes,
which
will
be
considered
and
responded
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1
to
in
the
final
statement
of
reasons
for
the
regulation.

2
And
for
my
colleagues
here,
part
of
what
we're
3
looking
at
here,
we've
got
a
two­
part
­­
to
issues
that
4
we're
going
to
be
voting
on.
One
part
is
regulatory,
so
5
are
there
any
ex
parte
communications?

6
Seeing
none,
again,
I'd
like
to
maybe
have
some
7
further
discussion
on
the
two
aspects.
Maybe
the
first
8
one
we
can
do
isw
one
of
the
things
I
think
would
be
the
9
certification
for
distributed
generation,
and
then
we'll
10
follow
up
that
with
the
guidelines.
One
of
the
things
I
11
would
like
to
just
lead
off
with
on
the
certification
and
12
guidance
I
think
for
CHP,
I
think
I
was
pleased
to
hear
13
Mike
say
that
that
will
be
looked
at
as
part
of
the
issue
14
there.

15
I
think
I'm
compelled,
I
guess,
I
was
initially
16
looking
at
an
interim
standard.
I
guess,
I'll
go
with
17
staff's
guidance
there
in
terms
of,
at
least
I
personally
18
feel
that
that
seems
to
be
a
prudent
approach.
While
I
19
listened
to
both
sides
of
the
argument
there,
clearly
it
20
seems
to
me
it
may
not
be
prudent.
Although,
I
think
21
we've
also
heard
today
that
we
want
to
get
down
as
soon
as
22
possible
to
the
low
numbers
in
2007.

23
Again,
I
was
also
very
much
reminded
of
part
of
24
our
job
here
when
we
had
the
testimony
late
on
here,
that
25
we
should,
in
fact,
be
offering
encouragement
for
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renewables
and
really
inherently
clean
technologies
here,

2
and
that's
in
our
charter
to
provide
that
opportunity
for
3
clean
air,
so
to
me
that
was
a
very
good
reminder.

4
I
think
we
had
some
initial
comments
which
the,
I
5
think,
staff
was
going
to
look
at
very
carefully.
And
6
that
was
some
of
the
issues
in
terms
of
the
portable
7
generators
and
to
bring
those
in
line,
I
think,
making
8
sure
that,
in
fact,
we
were
only
talking
about
some
of
the
9
true
emergency
generators.
I
don't
know
whether
that's
10
reflected
in
the
resolution,
but
I
think
those
are
11
important
issues
there.

12
Those
are
some
of
the
things
that
I
thought
of.

13
And,
again,
I
would
like
to
reinforce
what
my
colleagues
14
were
saying
here.
And,
Mr.
Kenny,
I
think
staff
has
done
15
a
tremendous
job
here
with
a
very
difficult
­­
but
working
16
with
all
segments,
I
think
it's
really
to
be
applauded.

17
Professor
Friedman.

18
BOARD
MEMBER
HUGH
FRIEDMAN:
I
would
just
like
to
19
add
that
I
think
having
heard
all
this
that
the
proposal
20
from
the
staff,
the
recommendation
on
both,
is
very
a
21
reasoned,
appropriate
response
to
the
legislation.
After
22
all
that's
what
triggered
it,
and
we're
really
responding
23
to
a
requirement.

24
And
I
understand
the
controversy
over
the
time
25
line
and
I
understand
the,
I
think
I
hope
I
understand,

PETERS
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the
issues
of
cost
concerns
and
whether
the
2007
standards
2
can
be
achieved.
But
I
think
this
is
also
not
only
a
3
reasonable
and
appropriate
response
to
the
legislative
4
mandate,
but
a
very
strategic
one.
Once
again,
the
staff
5
has
come
up
with,
I
think,
a
very
strategic
response
in
6
the
sense
of
what
is
a
very
goal
oriented,
and
hopefully
7
it
will
have
­­
hopefully
our
concerns
about
whether
it
8
will
be
any
kind
of
a
disincentive
won't
be
met
and
9
hopefully
we'll
monitor
and
be
able
to
see
by
2005
what
10
we've
brought.

11
But
I
commend
the
staff,
once
again,
on
a
good
12
piece
of
work
apparently
in
the
light
of
a
lot
of
public
13
input
and
all
constituencies
having
had
their
say.

14
CHAIRPERSON
LLOYD:
I'd
like
to
add
another
15
point,
which
is
part
of
my
earlier
comments
about
16
renewables.
Again,
we
talked
about
some
of
the
energy
17
security
concerns
there,
but
I
think
we
are
now
having
­­

18
we're
providing
a
significant
incentive
for
people
to
go
19
to
renewables
getting
away
from
some
of
the
other
fossil
20
fuels
here.

21
I
think
that's
­­
I
think
we're
creating
some
22
substantial
opportunities
which
I
think
is
going
to
be
23
very,
very
important,
which
ties
into
the
health
issues,

24
public
health.
And
I
think
that's
an
important
aspect,

25
which
we
haven't
highlighted,
but
I
think
it's
going
to
be
PETERS
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1
important.

2
Any
other
comments
from
the
Board,
before
I
3
entertain
a
motion?

4
Dr.
Burke.

5
I
would
concur
if
we
can
include
the
changes
I
6
suggested
on
caveats,
et
cetera,
et
cetera,
et
cetera.

7
GENERAL
COUNSEL
WALSH:
We
can
include
that
8
language
in
the
resolution
based
on
the
statement
into
the
9
record
regarding
the
districts
on
making
sure
that
the
10
program
is
properly
implemented.

11
CHAIRPERSON
LLOYD:
And
other
things.

12
GENERAL
COUNSEL
WALSH:
And
the
other
things.

13
(
Laughter.)

14
CHAIRPERSON
LLOYD:
I
guess
we'll
get
a
chance
to
15
look
at
that.
Okay,
we're
voting
on
the
distributed
16
guidelines.

17
BOARD
MEMBER
D'ADAMO:
Mr.
Chairman,
I
just
think
18
it's
probably
a
little
bit
vague.
For
those
of
us
in
the
19
future
who
may
want
to
go
back,
could
staff
just
briefly
20
recount
the
additional
changes,
just
so
we
have
a
record
21
of
it.

22
EXECUTIVE
OFFICER
KENNY:
Actually,
I
think
the
23
changes
that
we
were
talking
about
were
essentially
24
incorporating
into
the
resolution
the
issue
of
CHP
and
25
making
sure
that
we
actually
do
a
comprehensive
review
of
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1
that
in
2005.

2
Additionally,
there
was
the
question
about
3
portable
power
and
ensuring
that,
in
fact,
portable
power
4
is
not
improperly
utilized.

5
And
then
lastly
there
was
the
concern
about
6
renewables
­­
or
actually
not
a
concern,
but
essentially
7
kind
of
an
incentivization
for
renewables
and
making
sure
8
that
that's
reflected
in
the
resolution.
And
what
we
can
9
do
is
we
can
essentially
incorporate
those
all
into
the
10
resolution,
before
it
is
finalized.

11
CHAIRPERSON
LLOYD:
The
other
one
point,
working
12
with
the
districts
to
make
sure
that,
in
fact,
as
we
look
13
at
these
generators
they're
a
true
emergency.

14
EXECUTIVE
OFFICER
KENNY:
That's
correct.

15
PROJECT
ASSESSMENT
BRANCH
CHIEF
TOLLSTRUP:
And
16
there
was
also
the
issue
of
emergency
backup.

17
BOARD
MEMBER
BURKE:
I'll
move
that
motion.

18
BOARD
MEMBER
D'ADAMO:
Second.

19
CHAIRPERSON
LLOYD:
All
in
favor
say
aye?

20
(
Ayes.)

21
CHAIRPERSON
LLOYD:
Anybody
against?

22
Thank
you.

23
Now,
we'll
look
at
the
issue
of
the
guidelines.

24
Again,
I
guess
we
have
some
of
the
same
comments
in
there
25
I
think
we've
probably
reflected
it
already.

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1
BOARD
MEMBER
McKINNON:
Mr.
Chairman,
I'll
move
2
it.

3
BOARD
MEMBER
RIORDAN:
I'll
second
the
motion.

4
CHAIRPERSON
LLOYD:
All
in
favor
say
aye?

5
(
Ayes.)

6
CHAIRPERSON
LLOYD:
Anybody
against,
no?

7
Well,
thank
you
very
much
indeed
again.
Thank
8
you,
staff,
and
thank
you
for
all
the
contributions
from
9
the
various
stakeholders.
I
thought
we
were
going
to
go
10
through
lunch,
but
I
keep
forgetting
we
have
a
court
11
reporter
who
needs
feeding,
as
well
as
staff
and
board
12
members,
so
we're
going
to
take
actually
try
­­
do
you
13
think
you
can
eat
in
15
minutes
­­
okay
a
15­
minute
break
14
and
then
we
will
continue
with
agenda
item
01­
9­
2,

15
low­
emission
vehicle
regulations.

16
(
Thereupon
a
lunch
recess
was
taken.)

17
18
19
20
21
22
23
24
25
PETERS
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1
AFTERNOON
SESSION
2
CHAIRPERSON
LLOYD:
The
next
item
on
the
agenda
3
today
is
01­
9­
2,
proposed
amendments
to
the
low­
emission
4
vehicle
regulations.

5
Since
this
is
a
relatively
straightforward
item
6
and
by
specific
request
of
my
colleagues,
I
will
go
7
directly
to
the
staff's
presentation.

8
Mr.
Kenny.

9
EXECUTIVE
OFFICER
KENNY:
Thank
you,
Mr.
Chairman
10
and
Members
of
the
Board.
As
a
staff
we
continuously
seek
11
to
improve
California's
vehicle
regulations
and
test
12
procedures.
Our
goal
is
to
improve
clarity,
increase
13
uniformity
with
the
U.
S.
Environmental
Protection
Agency
14
of
what
is
appropriate,
minimize
the
cost
wherever
15
possible
and
anticipate
and
resolve
regulatory
issues
long
16
before
they
pose
any
serious
problem
for
manufacturers.

17
In
1998,
the
Board
adopted
the
second
phase
of
18
the
low­
emission
vehicle
program,
the
LEV
II
program,
that
19
action
extended
the
original
LEV
I
Regulation
through
20
2010,
thereby
increasing
the
overall
benefits
of
the
21
program.

22
In
December
2000,
the
LEV
II
regulations
were
23
revised,
oncee
again,
to
take
advantage
of
some
elements
24
of
the
federal
tier
2
emission
standards.
And
the
latter
25
action
ensured
that
California
has
the
benefit
of
the
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1
cleanest
vehicles
possible.

2
Today
the
staff
is
proposing
a
number
of
minor
3
modifications
to
the
LEV
II
regulations
including
the
4
addition
of
new
emission
standards
for
particulate
matter.

5
As
before,
these
changes
will
continue
to
facilitate
the
6
certification
of
the
cleanest
possible
vehicles
in
7
California
and
to
streamline
the
requirements
for
8
manufacturers.

9
And
with
that,
I
would
now
like
to
turn
it
over
10
to
Sara
Carter
who
will
make
the
presentation.

11
Sara.

12
AIR
RESOURCES
ENGINEER
CARTER:
Thank
you,
Mike.

13
Good
morning,
Chairman
Lloyd
and
Members
of
the
Board.

14
Today
I
will
be
presenting
staff's
proposal
to
adopt
15
particulate
standards
for
gasoline
vehicles
and
more
16
stringent
requirements
for
multi­
fuel
vehicles
that
17
receive
partial
zero
emission
vehicle
credit,
as
well
as
a
18
number
of
administrative
revisions
to
the
low­
emission
19
vehicle
program.

20
(
Thereupon
an
overhead
presentation
was
21
presented
as
follows.)

22
AIR
RESOURCES
ENGINEER
CARTER:
In
1990
the
Air
23
Resources
Board
adopted
the
low­
emission
vehicle,
or
LEV
I
24
program,
which
significantly
reduced
exhaust
emissions
25
from
the
light­
and
medium­
duty
vehicle
fleet
between
1994
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1
and
2003.

2
Both
the
LEV
I
regulations
and
the
second
phase
3
of
these
regulations,
LEV
II,
adopted
in
November
1998
4
include
three
primary
elements.
The
first
consists
of
5
tiers
of
exhaust
emission
standards
for
increasingly
more
6
stringent
categories
of
low­
mission
vehicles.
The
second
7
is
a
mechanism
requiring
each
manufacturer
to
phase­
in
a
8
progressively
cleaner
mix
of
vehicles
from
year
to
year
9
with
the
option
of
credit
banking
and
trading.
And
the
10
third
is
a
requirement
that
a
specified
percentage
of
11
passenger
cars
and
trucks
be
ZEVs,
vehicles
with
no
12
emissions.

13
­­
o0o­­

14
AIR
RESOURCES
ENGINEER
CARTER:
These
are
the
15
emission
standards
for
passenger
cars
under
LEV
II.
The
16
benefits
of
these
new
standards
compared
the
LEV
I
range
17
from
a
75
percent
reduction
in
NOx
emissions
from
18
passenger
cars
to
a
90
percent
reduction
in
NOx
emissions
19
from
the
largest
sport
utility
vehicles
and
trucks.

20
The
nonmethane
organic
gas
or
NMOG
standards
21
remain
unchanged
from
the
already
stringent
LEV
I
22
standards.
The
LEV
II
program
also
establishes
a
near
23
zero
super
ultra­
low
emission
vehicle,
or
SULEV,
emission
24
category.
The
transitional
low
emission,
or
T­
LEV,

25
category
has
dropped
for
LEV
II.

PETERS
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1
­­
o0o­­

2
AIR
RESOURCES
ENGINEER
CARTER:
The
ARB
3
continuously
seeks
to
improve
California
regulations
and
4
test
procedures.
Our
goal
is
to
ensure
that
California
5
continues
to
receive
the
cleanest
vehicles
possible,
while
6
minimizing
costs
wherever
possible.

7
Today's
proposal
supports
these
goals
by
8
proposing
a
number
of
changes
to
the
LEV
II
regulations,

9
including
new
emission
standards
and
administrative
10
amendments.

11
­­
o0o­­

12
AIR
RESOURCES
ENGINEER
CARTER:
The
new
emission
13
standards
being
proposed
today
include
establishment
of
14
particulate
matter
standards
for
gasoline
vehicles
and
15
modifications
to
the
partial
zero
emission
vehicle
or
PZEV
16
requirements
for
bi­
fuel,
flexible
fuel
or
dual­
fuel
17
vehicles.

18
­­
o0o­­

19
AIR
RESOURCES
ENGINEER
CARTER:
Currently,

20
California
only
requires
that
diesel
vehicles
meet
21
particulate
matter
or
PM
standards.
For
LEV
II
vehicles
22
under
8,500
pounds,
the
standard
is
ten
milligrams
per
23
mile.
Comparable
federal
regulations
require
both
24
gasoline
and
diesel
vehicles
to
meet
a
PM
standard
of
ten
25
milligrams
per
mile.

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1
Accordingly,
staff
is
proposing
to
require
that
2
gasoline
LEV
II
vehicles
also
meet
applicable
PM
3
standards.
The
primary
purpose
of
these
standards
would
4
be
to
ensure
that
manufacturers
introducing
direct
5
injection
gasoline
engines
will
continue
to
provide
low
PM
6
emissions.

7
Direct
injection
engines
may
offer
improved
fuel
8
economy
compared
to
current
engines,
which
makes
them
9
attractive,
but
these
engines
tend
to
emit
higher
PM
and
10
NOx
emissions.

11
Therefore,
staff
feels
it
is
appropriate
to
12
require
gasoline
vehicles
to
meet
applicable
PM
standards
13
in
order
to
provide
an
additional
measure
of
protection
of
14
public
health.
Data
indicate
that
current
gasoline
15
vehicles
can
readily
meet
the
proposed
standards.

16
­­
o0o­­

17
AIR
RESOURCES
ENGINEER
CARTER:
Currently,
a
18
natural
gas
or
alcohol
bi­
fuel,
flexible
fuel,
or
dual
19
fuel
vehicle
may
certify
to
two
emission
standards.
The
20
lower
standard
when
operating
on
the
alternative
fuel
and
21
the
next
higher
emission
standard
when
operating
on
22
gasoline.

23
The
LEV
regulations
were
structured
to
give
24
special
consideration
to
these
types
of
vehicles
because
25
emissions
from
alternative
fuel
vehicles
are
likely
to
PETERS
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362­
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1
exhibit
a
lower
ozone
forming
potential
than
emissions
2
from
gasoline
vehicles.

3
­­
o0o­­

4
AIR
RESOURCES
ENGINEER
CARTER:
As
part
of
the
5
LEV
II
rule­
making,
the
ZEV
requirement
was
modified
to
6
allow
a
manufacturer
to
meet
a
portion
of
its
ZEV
7
obligation
using
extremely
clean
vehicles.
The
new
8
emission
category
of
partial
zero
emission
vehicle
or
PZEV
9
basically
reflects
the
SULEV
emission
standards
with
10
additional
strict
requirements,
such
as
having
to
meet
11
this
standards
at
150,000
miles
instead
of
120,000,

12
meeting
zero
evaporative
emission
requirements
and
13
providing
a
15­
year,
150,000
mile
emission
warranty.

14
A
manufacturer
that
meets
these
strict
15
requirements
may
qualify
for
partial
ZEV
credits
that
can
16
be
used
to
offset
the
ZEV
requirement.
The
granting
of
17
partial
ZEV
credits
for
PZEVs
is
premised
on
the
18
assumption
that
the
PZEVs
provide
emission
benefits
beyond
19
those
achievable
by
a
vehicle
certifying
to
the
SULEV
20
standard.

21
Within
this
context,
staff
is
proposing
that
any
22
bi­
fuel,
flexible
fuel
or
dual
fuel
vehicle
that
certifies
23
to
PZEV
standard
must
certify
to
the
SULEV
emission
24
standard
on
both
gasoline
and
the
cleaner
fuel.

25
If
a
manufacturer
does
not
wish
to
earn
a
partial
PETERS
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1
ZEV
credit
from
a
bi­
fuel,
flexible
fuel
or
dual
fuel
2
vehicle,
then
the
manufacturer
would
still
be
allowed
to
3
certify
to
a
higher
standard
when
operating
on
gasoline.

4
­­
o0o­­

5
AIR
RESOURCES
ENGINEER
CARTER:
In
addition
to
6
the
proposed
revisions
just
discussed,
today's
proposal
7
contains
a
number
of
administrative
amendments.
These
8
amendments
include
the
adoption
of
a
gasoline
nonmethane
9
organic
gas
correction
factor
of
1.04.
This
factor
would
10
allow
manufacturers
to
reduce
testing
costs
by
not
11
measuring
carbonates
which
are
consistently
low
12
percentages
of
gasoline
exhaust
and
costly
to
measure.

13
This
amendment
would
also
align
California
and
federal
14
testing
requirements.

15
A
second
administrative
amendment
is
extending
16
the
applicability
of
generic
reactivity
adjustment
factors
17
or
RAFs
indefinitely
for
alternative
fuels.

18
Generic
RAFs
are
also
used
to
reduce
testing
19
costs.
These
RAFs
currently
sunset
after
the
2003
model
20
year.
It
should
be
noted
that
the
generic
RAF
of
Phase
2
21
gasoline
will
not
be
similarly
extended.
The
reason
for
22
this
is
two­
fold.

23
First,
the
Phase
2
gasoline
RAF
was
established
24
using
fuel
containing
Methyl
Tertiary
Butyl
Ether
or
MTBE.

25
MTBE
has
been
banned
from
use
in
California
gasoline
PETERS
SHORTHAND
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1
starting
December
31st,
2002.

2
Second,
limited
testing
on
production
vehicles
3
indicate
that
current
generic
RAFs
for
Phase
2
gasoline
4
are
too
low.
Therefore,
it
would
be
inappropriate
to
5
extend
their
applicability
beyond
the
2003
time
frame.

6
However,
manufacturers
would
be
allowed
to
7
develop
specific
RAFs
for
individual
groups
of
gasoline
8
vehicles
after
2003.

9
A
third
administrative
amendment
is
to
update
and
10
revise
the
AB
965
guidelines.
These
guidelines
are
11
required
by
the
California
Health
and
Safety
Code.
They
12
allow
limited
numbers
of
federal
vehicles
that
do
not
meet
13
California
emission
standards
to
be
sold
here,
provided
14
their
emissions
are
offset
by
cleaner
California
vehicles.

15
Currently,
the
AB
965
guidelines
do
not
extend
16
beyond
the
period
covered
by
the
LEV
I
regulations
that
is
17
the
2003
model
year.
They
also
do
not
reflect
the
changes
18
to
the
vehicle
enforcement
procedures
due
to
streamline
19
certification
measures
adopted
in
2000
known
as
the
Cap
20
2000
program.

21
Today's
proposal
would
revise
these
guidelines
to
22
better
reflect
Cap
2000,
as
well
as
the
LEV
II
program
and
23
extend
their
applicability
through
2010.
The
fourth
24
administrative
amendment
being
proposed
today
is
the
25
result
of
a
previous
oversight
on
the
part
of
staff.

PETERS
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1
Overall,
the
LEV
II
regulations
provide
slightly
2
less
stringent
in­
use
standards
for
the
first
three
years
3
that
a
new
vehicle
model
is
introduced
that
complies
with
4
the
LEV
II
program.
However,
intermediate
in­
use
5
standards
were
inadvertently
omitted
for
light­
duty
trucks
6
engineered
for
heavier
duty
cycles.
These
vehicles
have
a
7
base
pay
load
capacity
of
2,300
pounds
or
higher.
They
8
were
also
emitted
for
LEV
II
vehicles
certifying
to
9
150,000
mile
standards.

10
Accordingly,
staff
is
proposing
intermediate
11
in­
use
standards
for
these
emission
categories.
Finally,

12
a
number
of
primarily
technical
revisions
to
the
13
nonmethane
organic
gas
test
procedures
are
being
proposed.

14
The
maximum
incremental
reactivity
scale
is
also
being
15
updated
to
reflect
new
values
adopted
as
part
of
a
recent
16
consumer
products
rule­
making.

17
­­
o0o­­

18
AIR
RESOURCES
ENGINEER
CARTER:
Staff
is
also
19
proposing
a
couple
of
changes
to
the
original
45­
day
20
notice.
These
15­
day
changes
are
available
at
the
back
21
table.

22
The
first
of
these
involves
the
use
of
dual
fired
23
heaters
on
ZEVs.
Currently,
fuel­
fired
heaters
on
ZEVs
24
are
permitted
to
operate
only
below
40
degrees
F,
above
25
that
temperature
other
heating
systems
must
be
used
that
PETERS
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CORPORATION
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1
emit
no
emissions.

2
At
this
time,
fuel­
fire
heaters
must
meet
the
3
ULEV
emission
levels
when
operating
between
68
and
86
4
degrees
F.
For
this
rulemaking,
staff
had
proposed
that
5
fuel­
fire
heaters
meet
the
cleanest
possible
standards,

6
meaning
SULEV
standards
when
operating
at
40
degrees
F
to
7
ensure
the
lowest
possible
emissions
from
ZEVs
and
to
8
better
reflect
actual
operating
temperatures
consistent
9
with
the
ZEV
concept.

10
Prior
to
issuing
the
45­
day
notice,
staff
11
provided
industry
with
a
revised
fuel
fire
heater
proposed
12
requirements
and
requested
their
comments.
At
that
time,

13
the
only
comment
received
was
a
request
that
the
proposed
14
implementation
date
of
2003
be
delayed
until
2005.
This
15
change
is
incorporated
into
the
final
proposal.

16
­­
o0o­­

17
AIR
RESOURCES
ENGINEER
CARTER:
Subsequent
to
the
18
45­
day
notice,
however,
industry
informed
staff
that
it
19
was
neither
technologically
nor
economically
feasible
to
20
meet
the
new
requirements
in
that
time
frame.
Since
staff
21
had
relied
on
industry's
initial
positive
assessment,
we
22
had
not
performed
tests
of
our
own.

23
Consequently,
staff
is
proposing
to
drop
this
24
proposal
until
we
can
perform
additional
tests
and
work
25
with
suppliers
to
evaluate
further
emission
reductions
PETERS
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1
from
these
devices.
Since
these
devices
may
be
used
in
2
other
vehicles
in
the
future,
such
as
hybrids,
fuel
cells
3
and
possibly
very
efficient
diesels
that
will
have
little
4
waste
heat
but
cabin
heating,
staff
will
revisit
the
5
proposal
at
a
later
date.

6
Staff
has
coordinated
with
the
northeast
states
7
in
this
matter,
since
the
climate
would
require
the
use
of
8
fuel
fire
heaters
more
than
in
California.
They
concurred
9
that
this
issue
should
be
dropped
for
the
time
being
until
10
further
studies
are
performed
in
order
to
facilitate
a
11
smooth
launch
of
ZEVs
in
their
part
of
the
country.

12
­­
o0o­­

13
AIR
RESOURCES
ENGINEER
CARTER:
The
second
15­
day
14
change
being
proposed
today
is
to
modify
the
nonmethane
15
organic
gas
fleet
average
requirement
for
independent
16
low­
volume
manufacturers.
Independent
low­
volume
17
manufacturers
produce
between
4,500
and
10,000
vehicles
18
per
year
for
California
sales.
A
manufacturer
in
this
19
category
will
generally
produce
only
a
limited
number
of
20
test
groups.

21
Therefore,
it
would
be
difficult
to
meet
a
22
continually
changing
fleet
average
requirement.
The
23
proposed
15­
day
modifications
are
intended
to
ease
the
24
certification
burden
on
these
manufacturers.
The
proposed
25
nonmethane
organic
gas
fleet
average
requirements
for
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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362­
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1
independent
low­
volume
manufacturers
would
be
more
2
stringent
than
that
required
for
small
volume
­­
for
a
3
small
volume
manufacturer,
but
it
would
be
less
stringent
4
than
that
applicable
to
a
large
volume
manufacturer.

5
Providing
special
consideration
for
independent
6
low­
volume
manufacturers
is
consistent
with
the
policy
the
7
Board
demonstrated
were
the
ZEV
regulations.

8
­­
o0o­­

9
AIR
RESOURCES
ENGINEER
CARTER:
To
summarize
10
staff's
proposal
will
help
ensure
California
continues
to
11
receive
the
cleanest
vehicles
available.
It
will
help
12
facilitate
the
certification
of
clean
vehicles
in
13
California,
and
it
will
help
eliminate
unnecessary
costs
14
to
vehicle
manufacturers.

15
For
those
reasons
staff
recommends
the
Board
16
adopt
this
proposal
including
the
proposed
15­
day
changes.

17
CHAIRPERSON
LLOYD:
Thank
you
very
much,
Sara.

18
Madam
Ombudsman,
will
you
describe
the
public
19
participation
the
occurred
while
this
time
item
was
being
20
brought
before
the
Board
and
express
any
comments
or
21
concerns
you
may
have
to
the
Board
at
this
time.

22
OMBUDSMAN
TSCHOGL:
Thank
you.
Mr.
Chairman,
and
23
Members
of
the
Board,
staff
began
their
outreach
process
24
in
February
of
this
year
by
sending
out
notification
of
25
this
proposal.
The
notification
went
to
the
affected
PETERS
SHORTHAND
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362­
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1
industries,
the
environmental
community
and
to
2
governmental
organizations.

3
Since
this
Regulation
is
largely
amendments,

4
which
align
California
regulations
with
those
of
the
5
federal
government,
staff
did
not
schedule
a
formal
6
workshop.
Staff
did
announce
that
a
workshop
would
be
7
held
if
any
of
the
constituents
felt
it
was
necessary.
No
8
one
indicated
a
workshop
was
necessary,
so
none
was
held.

9
In
an
effort
to
provide
as
much
opportunity
for
10
interested
parties
to
comment,
staff
made
themselves
11
available
in
person,
over
the
phone
and
through
Email.

12
They
received
many
comments,
many
of
which
helped
shape
13
the
document
before
you
now.

14
Finally,
on
September
28th,
staff
posted
the
15
proposal
and
announced
today's
hearing.
Staff
sent
the
16
announcement
to
over
400
people
via
the
U.
S.
Postal
17
Service
and
Email.

18
Thank
you.

19
CHAIRPERSON
LLOYD:
Thank
you.

20
Any
board
members
have
any
questions
at
this
21
time?

22
Mr.
McKinnon.

23
BOARD
MEMBER
McKINNON:
Yeah,
I
have
no
problem
24
with
the
proposal.
There's
just
one,
kind
of,
little
25
strand
that
was
out
there
and
that's
the
fuel
heater
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
issue.
And
I
guess
in
any
event
that
some
day
that's
2
going
to
come
back
at
us
as
something
that
we're
going
to
3
need
to
deal
with.

4
I
have
a
recollection
that
CALSTART
and
some
5
others
were
working
on
seats
that
heated
the
person
rather
6
than
heating
the
air.
And
I
think
when
I
talked
to
staff
7
about
it
earlier,
the
major
issue
left
out
there
was
like
8
defroster
heat
and
that
kind
of
thing.

9
And
I
guess
I'm
wondering
if
maybe
we
couldn't
10
kind
of
get
out
ahead
of
that
and
figure
out
where
all
of
11
that's
at,
and
whether
or
not
we
need
to
support
research
12
or
some
initiative
in
that
area.

13
CHAIRPERSON
LLOYD:
I
remember
the
same
thing.
I
14
wondered
also
what
happened
there.
Tom,
do
you
know
what
15
happened?

16
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
I
don't
17
believe
that
we've
done
any
focus
research
on
those
18
technologies,
but
those
are
both,
you
know,
used
on
19
actually
some
EVs
now
like
a
window,
a
front
window
type
20
defogger,
for
example.

21
So
that's
something
we
can
certainly
look
at,
but
22
just
a
bit
of
the
history
that
may
not
have
come
through.

23
The
reason
we
put
this
requirement
in
here
was
because
the
24
northeast
states
asked
for
it,
because
we
didn't
think
we
25
didn't
want
any
fuel­
fire
heaters
because
most
of
the
time
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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362­
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184
1
it
rarely
gets
below
40
degrees,
but
they
do.

2
And
our
motivation
to
change
the
standard
was,
in
3
fact,
solely
that
these
vehicles
ought
to
have
the
4
cleanest
fuel­
fire
heater.
We
adopted
a
SULEV
standard.

5
It
used
to
be
ULEV
was
the
cleanest,
so
we
thought
let's
6
make
it
SULEV.
It
turned
out
that
those
who
are
pursuing
7
the
heaters
ran
into
some
problems
being
able
to
get
them
8
down
to
the
SULEV
level.

9
And
so
we
talked
to
the
northeast
and
asked,
you
10
know
what,
do
you
want
us
to
make
the
change
or
not
or
11
back
off?
And
they
basically
said,
you
know,
since
12
they're
just
trying
to
get
the
ZEV
program
going
in
their
13
states,
they
would
appreciate
this
being
removed
as
an
14
issue.
So
that's
kind
of
like
why
we
did
it
in
this,
sort
15
of,
clumsy
way
here
today.

16
But
I
think,
you
know,
that's
a
good
point.
We
17
can
try
to
take
a
look
at
whether
there
are
some
18
alternative
technologies.
I
don't
think
we'd
want
to
19
spend
a
lot
of
our
own
money
on
it,
because
it
really
20
doesn't
affect
us
very
much.
Maybe,
we
can
consult
with
21
the
northeast
states
and
see
what
their
degree
of
interest
22
is.

23
BOARD
MEMBER
McKINNON:
Okay,
thank
you.

24
CHAIRPERSON
LLOYD:
Thank
you.

25
Mr.
Calhoun.

PETERS
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1
BOARD
MEMBER
CALHOUN:
This
particular
question
2
pertains
to
the
particulate
standards,
of
the
particulate
3
emissions
from
direct
injection
gasoline
power
vehicles
4
such
that
it
would
warrant
establishing
emission
5
standards?

6
MOBILE
SOURCE
CONTROL
DIVISION
CHIEF
CROSS:
They
7
have
the
potential
to
be.
And
so
I
think,
you
know,
it's
8
going
to
depend
on
how
small
the
fuel
droplets
are
and
9
what
the
combustion
system
in
the
engine
is,
but
they
have
10
the
potential
to
be
that
more
so
than
the
current
port
11
injected
premixed
engines,
so
it's
a
preventative.

12
BOARD
MEMBER
CALHOUN:
Getting
ahead
of
the
game.

13
Thank
you.

14
CHAIRPERSON
LLOYD:
Thank
you.
I'd
like
to
now
15
call
the
first
two
witnesses
for
this
item
signed
up
to
16
speak
are
Greg
Dana
from
the
Alliance
of
Automobile
17
Manufacturers
and
Pete
Hardigan
from
Ford.

18
MR.
DANA:
Good
afternoon.
My
name
is
Greg
Dana,

19
and
I'm
vice
president
of
Environmental
Affairs
at
the
20
Alliance
of
Automotive
Manufacturers.

21
And
Dr.
Burke
isn't
here
so
I
can't
tell
him
who
22
my
members
are
and
how
many
there
are.
But
we
represent
23
13
manufacturers
and
I
can
name
them
for
you
if
you'd
24
like,
and
represent
about
90
percent
of
the
sales
here
in
25
the
United
States.

PETERS
SHORTHAND
REPORTING
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1
Now,
I'm
not
here
to
complain
about
any
of
the
2
changes
you've
made.
In
fact,
I'd
like
to
thank
the
staff
3
and
the
Board
for
considering
some
of
the
revisions
4
they've
made
to
align
the
California
program
more
closer
5
with
the
federal
program,
because
we're
facing
a
lot
of
6
requirements
in
the
next
few
years,
and
anything
we
can
do
7
to
align
the
two
programs
to
make
things
slightly
less
8
costly
and
slightly
less
difficult
to
do
is
always
9
helpful,
so
we
appreciate
that
activity.

10
The
second
point
I
wanted
to
raise
today
­­

11
you'll
see
my
testimony.
Unfortunately,
it
looks
like
12
nobody
got
the
letter
we
sent
to
the
Board,
or
the
staff
13
certainly
hasn't
seen
it,
but
I
would
like
to
point
out
14
that
we
really
did
send
the
Board
a
letter
on
October
26th
15
about
this,
and
apparently
it
got
lost
somewhere.

16
Really,
it's
an
issue
of,
again,
further
17
streamlining
or
further
making
federal
and
California
18
consistent.

19
CHAIRPERSON
LLOYD:
In
these
days,
we've
got
20
heightened
security
based
on
where
the
letters
were
21
received.

22
(
Laughter.)

23
MR.
DANA:
But
what
this
letter
said
was
24
basically
that
under
the
current
federal
and
California
25
rules,
we
phase­
in
both
Tier
2
and
LEV
II
at
25,
50,
75
PETERS
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1
100
percent
over
four
years.
The
federal
evap
emissions
2
also
phase­
in
at
that
same
schedule.

3
The
only
one
that's
odd
is
the
California
4
evaporative
emissions
phase­
in
at
40,
80
and
100
percent,

5
which
is
a
different
schedule.

6
And
what
we're
starting
to
look
now
at
2004
and
5
7
model
years
in
terms
of
what
we're
going
to
do.
And
as
we
8
look
at
that,
we
see
that
slightly
odder
phase­
in
for
9
evaporative
emissions
here
in
California
is
causing
us
10
some
problems
in
terms
of
trying
to
get
all
our
models
11
lined
up
for,
you
know,
over
three
year
design
cycles,
and
12
trying
to
do
it
in
the
least
amount
of
hassle
and
expense.

13
And
having
to
deal
with
this
slightly
different
14
phase­
in
will,
in
fact,
be
a
lot
more
costly
for
us
as
15
manufacturers.
And
we'd
like
to
see
if
the
Board
would
16
consider
changing
that
phase­
in
to
be
the
same
as
the
17
federal
phase­
in,
which
is
25,
50,
75
and
100.

18
CHAIRPERSON
LLOYD:
Do
I
interpret
your
request
19
and
the
outcome
here
was
that
you
are
most
successful
at
20
the
federal
level
in
getting
a
more
relaxed
phase­
in
than
21
you
were
in
California?

22
(
Laughter.)

23
MR.
DANA:
I
can't
remember
what
we
talked
about
24
at
the
federal
level
and
California,
to
be
honest
with
25
you,
Dr.
Lloyd.

PETERS
SHORTHAND
REPORTING
CORPORATION
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1
That's
the
way
the
federal
rule
came
out
and
I
2
don't
remember
the
details
of
how
that
was
debated
or
3
discussed.

4
CHAIRPERSON
LLOYD:
Which
came
first?

5
MR.
DANA:
You
guys
were
first.

6
CHAIRPERSON
LLOYD:
But
apparently
this
is
not
to
7
do
with
today's
item?

8
MR.
DANA:
No.
You
know,
again
we
were
concerned
9
that
we're
looking
very
closely
now
at
the
model
year
when
10
this
takes
place.
And
we'd
like
to
somehow
to
get
it
11
before
the
Board
somehow
to
get
you
thinking
about
it,
of
12
what's
really
an
important
issue
for
us
in
terms
of
trying
13
to
phase­
in
all
the
changes
to
all
the
models
over
the
14
years.

15
CHAIRPERSON
LLOYD:
I
see
what
you're
saying,

16
Greg.
It
seems
tough
to
say
now
we've
got
to
slow
down
17
because
the
feds
have
slowed
down.
And
my
original
18
comment
was
that
you
were
clearly
more
successful
at
the
19
federal
level
in
slowing
things
down
than
you
were
in
20
California
where
our
need
is
greatest.

21
MR.
DANA:
Well,
Tom
suggested
outside
that
we
22
might
want
to
move
the
federal
phase
up
to
the
same
as
23
California's.

24
CHAIRPERSON
LLOYD:
That's
right.
That's
25
exactly
­­
I
think
we
would
support
that,
so
if
we
can
go
PETERS
SHORTHAND
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1
with
you
to
the
feds
and
actually
suggest
that,
we'd
be
2
very
happy.

3
MR.
DANA:
But
understand,
too,
that
the
exhaust
4
and
evaporative
have
been
interactions,
so
having
even
5
exhaust
emission
standards
phasing
differently
evap
also
6
causes
us
some
concerns.

7
And,
again,
we
just
would
like
to
see
if
the
8
Board
would
be
willing
to
consider
this
change,
because
it
9
does
relax
some
of
the
burden.
If
you
had
seen
our
10
letter,
we
did
actually
do
an
analysis
looking
at
the
air
11
quality
impacts,
and
there
is
a
slight
negative
impact
on
12
ROG
emissions
on
how
to
cover
emissions,
and
that
analysis
13
was
attached
to
the
letter
to
the
Board,
which
I'm
not
14
sure
you
saw.

15
CHAIRPERSON
LLOYD:
I'm
open
to
suggestion
from
16
my
colleagues.
One
of
the
things
I
would
like
to
suggest,

17
Greg,
that
since
this
wasn't
on
the
agenda
here
for
staff
18
to
consider
your
letter,
we
get
a
chance
to
do
that
and
19
hear
back
from
staff.
That
would
seem
to
be
more
­­

20
BOARD
MEMBER
RIORDAN:
Mr.
Chairman,
my
question
21
was
going
to
be
to
the
speaker.
Have
you
brought
this
to
22
the
staff
prior
to
this
moment
or
through
your
letter?
I
23
mean,
have
you
had
an
opportunity
to
sit
down
and
talk
to
24
them
about
it?

25
MR.
DANA:
Well,
we
talked
to
them
just
briefly
a
PETERS
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1
little
bit
ago,
but
apparently
they
had
never
been
aware
2
of
this
letter
either
and
that's
what
started
me
wondering
3
if
you
folks
ever
saw
the
letter
in
the
first
place.
So
4
we
need
to
get
back
and
do
that
and
I'll
be
happy
to
leave
5
this
copy
with
the
clerk
here
so
you
can
all
get
a
copy
of
6
it.

7
BOARD
MEMBER
RIORDAN:
Because
I
think,
Mr.

8
Chairman,
it
sort
of
comes
up
a
little
bit
unexpectedly
to
9
some
of
us.
And
I
think
the
staff
needs
an
opportunity
to
10
look
at
it,
and
maybe
have
some
dialogue
with
you.

11
MR.
DANA:
Well,
we
assumed
that
the
letter
I
12
sent
on
October
26th
would
have
been
seen
by
the
Board
and
13
the
staff
and
it
wouldn't
have
been
a
surprise,
but
14
obviously
that
didn't
happen.

15
CHAIRPERSON
LLOYD:
Mr.
Calhoun,
and
then
Ms.

16
D'Adamo.

17
BOARD
MEMBER
CALHOUN:
I
guess
I
can
understand
18
why
they
would
want
to
harmonize
the
evap
with
the
19
introduction
of
the
other
model.
It
seems
to
me
it
would
20
really
make
sense,
because
the
evap
system
isn't
21
considered
independent
of
the
other
parts
of
the
overall
22
emissions
control
system.
While
I
have
not
discussed
this
23
with
the
staff,
I
don't
think
they
would
seriously
object
24
to
it,
but
that's
me
talking.

25
But
that's
not
an
issue
today,
of
what
it's
PETERS
SHORTHAND
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1
something
that
will
have
to
come
back
at
a
later
date.

2
CHAIRPERSON
LLOYD:
Yes,
Ms.
D'Adamo.

3
BOARD
MEMBER
D'ADAMO:
Well,
I
don't
have
any
4
objection
to
a
dialogue
with
staff,
but
I
would
just
say
5
that
flip
slide
would
also
hold
true
if
your
viewpoint
is
6
that
the
federal
standard
is
making
it
more
difficult
for
7
you
to
comply
with
the
state
standard.
I
would
propose
to
8
you
that
you
look
at
it
a
little
differently,
that
the
9
state
standard
is
going
to
make
a
lot
more
ease
for
you
to
10
comply
with
the
federal
standard.

11
If
you
can
meet
the
state
standard
of
course
you
12
can
meet
the
federal
standard,
correct?

13
MR.
DANA:
It's
the
fact
that
we
have
to
run
all
14
the
different
models
at
various
time
frames
and
looking
at
15
the
phase­
ins
we
have.
There's
an
interaction
between
16
evaporative
emission
standards
and
jump­
up
emission
17
standards,
so
that
the
unique
evaporative
phase­
in
has
18
added
substantial
cost
and
complexity
to
our
phase­
in
of
19
all
the
vehicles.
That's
the
problem
that
we're
going
to
20
spend
additional
costs
and
additional
manpower
because
of
21
that
different
phase­
in,
and
an
additional
burden
on
us
22
trying
to
get
in
compliance
with
the
regulations.

23
CHAIRPERSON
LLOYD:
One
thing
I
would
say,

24
though,
we
are
at
a
disadvantage
Greg,
not
having
that
25
letter.
I
don't
think
we're
being
able
to
give
due
PETERS
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1
justice
to
your
viewpoint.
I'm
also
concerned
that
I'm
2
going
to
lose
a
quorum
at
3:
00
o'clock.
And
so
we
have
3
this
item
and
another
regulatory
item.
So
if
you
still
4
want
to
ask
a
question,
Mr.
McKinnon.

5
MR.
DANA:
Well,
I
apologize.

6
BOARD
MEMBER
McKINNON:
I'll
just
make
a
short
7
and
sweet
statement.
It
seems
that
hearing
after
hearing
8
recently
what
we
hear
is
that
there
is
a
lower
federal
9
standard
that
we
need
to
go
meet.
And
over
time
we're
10
going
to
have
a
difficult
time
distinguishing
when
that's
11
really
the
case
or
when
that's
really
the
change
in
let's
12
just
say
the
political
orientation
of
the
state
and
13
federal
government.

14
And
I
mean
no
offense
to
you
or
to
this
15
particular
issue,
but
we're
hearing
that
now
sort
of
over
16
and
over
again.
And
we're
trying
to
clean
up
air
to
meet
17
federal
standards.

18
So,
anyway
thanks.

19
CHAIRPERSON
LLOYD:
Thank
you
very
much.

20
Thank
you,
Greg.

21
MR.
DANA:
Well,
Dr.
Lloyd,
I
apologize
you
22
didn't
get
the
letter.
I'll
leave
it
with
the
Clerk
and
23
make
sure
that
the
copies
get
to
you
and
the
staff
and
24
talk
some
more
about
it.

25
CHAIRPERSON
LLOYD:
Ms.
Walsh.

PETERS
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1
GENERAL
COUNSEL
WALSH:
And
Chairman
Lloyd,
if
I
2
could
just
clarify
for
the
­­
of
what
is
staff's
position
3
that
while
this
letter
may
have
gone
astray
and
we
will
4
need
to
take
a
look
at
the
issue,
that
today
the
concern
5
is
that
the
requests
contained
in
the
letter
are
really
6
outside
the
scope
of
the
notice
for
the
matter
that
you're
7
considering
today.

8
CHAIRPERSON
LLOYD:
Thank
you.

9
Peter
Hardigan
of
Ford.

10
MR.
HARDIGAN:
I'm
Pete
Hardigan.
I
work
at
Ford
11
Motor
Company.
I'm
also
going
to
take
another
run
at
you
12
guys
on
this
federal
California
evap
phase­
in
issue.

13
If
you
could
put
up
the
chart.

14
­­
o0o­­

15
MR.
HARDIGAN:
Before
I
start,
I
want
to
commend
16
staff
on
the
changes
they've
already
made.
They
worked
17
with
manufacturers
to
resolve
issues,
and
most
importantly
18
these
changes
didn't
impact
air
quality
in
a
negative
19
manner.

20
Along
those
same
lines,
the
phase­
in
for
evap
in
21
California,
as
you
know
or
as
Greg
pointed
out,
is
a
three
22
year
phase­
in.
Federally,
the
evap
and
tailpipe
is
23
four­
year
phase­
in.
In
California
the
exhaust
phase­
in
is
24
over
four
years.

25
What
that
does
it
kind
of
stands
out,
and
it
PETERS
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1
results
in
higher
resource
utilization,
higher
costs
2
because
what
happens,
for
example,
in
2005
­­
and
if
you'd
3
go
to
the
next
chart.

4
­­
o0o­­

5
MR.
HARDIGAN:
In
2005,
what
this
chart
shows
is
6
the
red
are
the
percentage
of
vehicles
that
we're
phasing
7
into
the
California
evaporative
systems,
or
California
8
evaporative
standard.
The
blue
are
the
vehicles
we're
9
phasing
into
the
exhaust
standards.

10
And
the
red
vehicles
in
this
are
the
red
vehicles
11
we
have
to
touch
twice.
They
are
vehicles
where
in
2004,

12
for
example,
we
would
have
to
phase
them
into
the
13
California
evap
standard
and
then
a
year
or
two
later
14
phase
them
into
the
exhaust
standard.

15
What
that
does
is
it
forces
us
to
touch
the
16
vehicle
twice,
duplicate
some
of
the
engineering
resources
17
and
to
have
an
exhaust
evap
interaction.

18
So
not
only
in
2004
do
we
have
to
calibrate
19
evaporative
systems
we
have
to
do
some
exhaust
work
to
20
account
for
that
evaporative
change.
And,
again,
in
2006
21
or
7
when
we
phase­
into
the
exhaust
standards,
we've
got
22
to
go
back
and
do
some
evap
work
to
account
for
the
23
exhaust
interaction
adjusting
for
the
evap
standard.

24
For
example,
suppose
the
Mustang
is
a
2004
model
25
year
vehicle
that
weere
phasing
into
the
LEV
II
standards
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
195
1
for
evap,
we
don't
need
it
to
me
the
25
percent
phase­
in
2
for
exhaust,
but
we
need
it
to
meet
the
40
percent
3
phase­
in
for
evap.

4
So
we're
going
to
put
some
resources
toward
that
5
vehicle
to
calibrate
the
evaporative
system.
And
2005
6
we've
scheduled
a
quiet
year
for
the
vehicle.
We're
going
7
to
pull
those
resources
off.
We
don't
need
to
phase
it
in
8
to
exhaust
until
2006,
at
which
time
we're
going
to
have
9
to
put
the
resources
back
on
the
vehicle
program
and
10
calibrate
it
to
meet
the
exhaust
standard.

11
I
guess
the
real
issue
here
is
that
it's
much
12
easier
to
touch
the
vehicle
once
rather
than
twice.
We've
13
got
to
touch
them
in
2004
and
then
again
at
some
other
14
point,
and
it
provides
a
much
smoother
phase­
in
if
we
can
15
do
a
four­
year
phase­
in.

16
We
did
some
math
in
looking
at
the
pure
cost
of
17
what
it's
going
to
cost
just
Ford.
And
the
three­
year
18
phase­
in
is
going
to
effect
about
30
percent
of
our
engine
19
families
or
our
engine
platforms.
It's
going
to
cost
20
about
$
5
million
and
it's
going
to
increase
our
workload
21
by
about
36
percent
a
year.

22
CHAIRPERSON
LLOYD:
When
you
testified
to
EPA
on
23
their
standard,
did
you
make
the
case
that
if
they'd
align
24
with
California,
you'd
be
saving
time
and
resources?

25
MR.
HARDIGAN:
No,
because
they
have
a
four­
year
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
196
1
phase­
in.

2
CHAIRPERSON
LLOYD:
No,
but
they
hadn't
set
that,

3
we
had
set
it
first.

4
MR.
HARDIGAN:
The
issue
isn't
matching
up
with
5
the
EPA
standards.
The
issue
is
matching
up
with
a
6
four­
year
exhaust
phase­
in.
We've
already
committed
to
7
doing
the
LEV
II
evaporative
hardware.

8
CHAIRPERSON
LLOYD:
Am
I
missing
something
or
is
9
it
­­
it
seems
to
me
that
­­
Mr.
Cackette,
maybe
you
can
10
help
me
out.

11
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Well,
I
can
12
try
to
help
a
little
bit
here,
I
guess.
I
think,

13
listening
to
this,
that
the
issue
is
not
so
much
federal
14
versus
California,
but
that
in
California
you
have
to
15
fully
implement
the
evap
standard
in
three
years
and
the
16
tailpipe
in
four
years.
And
to
the
extent
there's
some
17
interaction
between
the
way
that
you
calibrate
a
system
18
with
the
new
evap
versus
the
new
tailpipe,
there
will
be
19
some
engines
that
they
have
to
sort
of
recertify
twice
or
20
have
to
do
work
on
twice,
which
will
cost
them
some
21
resources.

22
I
don't
recall
that
this
issue
was
brought
up
at
23
the
LEV
II
hearing,
which
is
where
this
was
all
done
at
24
one
time.
So
that
differential
at
the
time
was
not
an
25
issue
raised
by
the
auto
industry.
We
were
probably
given
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
197
1
more
by
the
earlier,
the
better
the
more
tons
you
get.

2
And
as
I
understand
what
was
in
the
letter,
I
didn't
see,

3
but
it
was
something
like
a
seven­
tenths
of
a
ton
per
day
4
ROG
loss
by
stretching
it
out
one
year.

5
I
suppose
the
other
option,
I
know
they're
being
6
pressed
real
hard,
but
the
other
option
is
they
cannot
do
7
their
engine
­­
the
tailpipe
standards
in
three
years
8
instead
of
four
years.
That
would
at
least
line
them
up
9
and
they
would
have
to
trade
off
whether
the
additional
10
hardware
costs
versus
the
savings
workload
on
doing
things
11
twice.
That's
the
only
other
option
I
can
see
other
than
12
giving
up
the
emission
reductions.

13
MR.
HARDIGAN:
He
did
a
very
good
job
of
14
explaining
what
I
was
trying
to
explain.
The
15
environmental
impact
is
fairly
small
of
going
to
a
16
four­
year
phase­
in.
And
he's
right
this
isn't
a
federal
17
versus
California
issue,
and
it's
not
a
capability
issue.

18
We
know
how
to
do
LEV
II
evap.
It's
going
to
be
19
difficult,
but
we've
had
some
breakthroughs.
It's
the
20
most
stringent
evaporative
standard
in
the
world,
but
we
21
know
how
to
do
it.

22
We're
not
asking
for
an
additional
year
of
23
phase­
in,
because
we
need
more
time.
What
we're
asking
24
for
is
an
additional
year
so
we
can
save
resources
and
25
money.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
198
1
CHAIRPERSON
LLOYD:
Well,
as
I
said
before,
I
2
think
we
can't
decide
it
here
today.
It's
outside
of
the
3
scope.
I
think
we
know
your
comments
Pete
were
4
registered.
And
I
think
we'll
go
back
to
staff
and
we'd
5
look
to
staff
into
coming
back
to
the
Board
if
they
feel
6
there's
merit
in
this.

7
Thank
you
very
much.

8
MR.
HARDIGAN:
Thank
you.

9
CHAIRPERSON
LLOYD:
Mr.
Kenny,
do
you
have
any
10
further
comments?

11
EXECUTIVE
OFFICER
KENNY:
No.

12
BOARD
MEMBER
D'ADAMO:
I'll
move
the
resolution.

13
CHAIRPERSON
LLOYD:
I
will
now
close
the
record
14
on
this
agenda
item.
However,
the
record
will
be
reopened
15
when
the
15­
day
notice
of
public
availability
is
issued.

16
Written
or
oral
comments
received
after
this
hearing
date
17
but
before
the
15­
day
notice
is
issued
will
not
be
18
accepted
as
part
of
the
official
record
on
this
agenda
19
item.

20
When
the
record
is
reopened
for
the
15­
day
21
comment
period,
the
public
may
submit
written
comments
on
22
the
proposed
changes
which
will
be
considered
and
23
responded
to
in
the
final
statement
of
reasons
for
the
24
regulation.

25
Reminder,
again,
any
ex
parte
communications
on
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
199
1
this
item?

2
Seeing
none,
we
have
a
resolution
before
us.
Do
3
I
have
a
motion?

4
BOARD
MEMBER
D'ADAMO:
So
moved.

5
BOARD
MEMBER
CALHOUN:
Second.

6
CHAIRPERSON
LLOYD:
All
in
favor
say
aye?

7
(
Ayes.)

8
CHAIRPERSON
LLOYD:
Anyone
against?

9
Thank
you.

10
Thank
you
very
much
staff.
And
we
look
forward
11
to
seeing
you
in
El
Monte
next
month.
By
the
way,
we
have
12
been
encouraged
by
Bill
Valdez
to
come
down
more
often,
so
13
we'll
try
to
do
that.

14
The
next
agenda
item
is
01­
9­
3,
proposed
15
amendments
to
Title
17
regarding
the
list
of
vapor
16
recovery
equipment
defects.

17
We've
know
for
years
that
gasoline
vapors
from
18
dispensing
facilities
are
a
significant
emissions
source.

19
Accordingly,
both
we
and
the
local
air
districts
have
20
taken
multiple
steps
to
control
those
vapors.

21
Next
year,
this
Board
will
be
considering
the
22
latest
iteration
of
vapor
control
technology,
fully
23
automated,
self­
diagnosing
systems
that
provide
realtime
24
information
about
how
the
vapor
controls
are
performing.

25
Enhanced
vehicle
recovery
is
what
staff
is
calling
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
200
1
effort.

2
In
the
meantime,
we
need
to
be
diligent
about
3
what's
out
there.
Any
control
system
is
only
as
good
as
4
the
part
it
is
made
up
of.
That's
why
ARB
maintains
a
5
list
of
observed
vapor
recovery
system
defects
that
may
6
substantially
impair
the
effectiveness
of
vapor
control
7
systems.

8
At
this
point,
I
would
like
to
ask
Mr.
Kenny
to
9
introduce
the
team
and
begin
staff's
presentation.

10
EXECUTIVE
OFFICER
KENNY:
Thank
you,
Mr.
Chairman
11
and
Members
of
the
Board.
State
law
requires
ARB
to
list
12
the
defects
that
substantially
impair
the
effectiveness
of
13
vapor
recovery
equipment
used
in
vehicle
fueling
14
operations.

15
We
do
this
so
that
these
can
be
targeted
for
16
ongoing
maintenance
and
repair
and
strict
enforcement
as
17
appropriate.
Since
the
public
uses
fuel
dispensers
every
18
day,
it's
vital
that
the
systems
to
protect
their
health
19
function
correctly.

20
Initially,
the
Board
identified
vapor
recovery
21
defects
by
regulation
listing
the
12
defects
that
were
22
common
to
every
vapor
recovery
system.
That
was
back
in
23
the
1970s
when
the
systems
consisted
of
just
two
parts,

24
the
bulky
bevels
on
the
gasoline
nozzles
and
the
awkward
25
dual
hoses.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
201
1
However,
starting
in
1982,
as
these
systems
2
became
more
sophisticated
and
more
diverse,
we
began
3
certifying
each
vapor
recovery
system
by
executive
order.

4
Those
same
orders
identified
the
potential
defects
that
5
were
specific
to
each
system.

6
Since
1982
ARB
has
issued
more
than
175
executive
7
orders
certifying
these
various
systems.
Today,
we're
8
proposing
an
update
to
the
original
defects
regulations
so
9
that
everyone
can
see
the
comprehensive
list
of
defects
10
available,
and
that
would
be
available
industrywide.

11
Staff
believes
the
comprehensive
list
will
be
12
more
effective
as
a
compliance
and
enforcement
tool.
The
13
proposed
list
compiles
defects
from
the
175
plus
executive
14
orders
and
lists
them
by
manufacturer,
executive
order
15
number
and
equipment
type.

16
This
list
also
describes
each
defect
in
detail
17
and
how
to
identify
them
in
the
field.
The
original
12
18
defects
are
also
included
on
the
list.

19
With
that,
Ranjit
Bhullar
will
make
the
staff
20
presentation.

21
(
Thereupon
an
overhead
presetation
was
22
presented
as
follows.)

23
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
24
BHULLAR:
Thank
you,
Mr.
Kenny.
Good
afternoon,
Chairman
25
Lloyd
and
Members
of
the
Board.
Today
I
will
discuss,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
202
1
present
our
proposed
amendments
to
the
Title
17
vapor
2
recovery
equipment
defect
list.
In
California
there
are
3
roughly
10,000
service
stations,
which
dispense
14
billion
4
gallons
of
gasoline
each
year.
With
vapor
recovery
in
5
place,
410
tons
of
hydrocarbons
are
captured
each
day.

6
­­
o0o­­

7
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
8
BHULLAR:
The
excess
emissions
that
result
by
the
loss
of
9
even
one
percent
of
the
effectiveness
of
these
systems
is
10
significant.
One
of
the
unique
features
of
the
vapor
11
recovery
control
is
that
they're
the
only
emissions
source
12
that
is
routinely
used
by
the
public.

13
­­
o0o­­

14
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
15
BHULLAR:
In
California,
the
districts
and
ARB
have
16
distinct
roles
in
the
vapor
recovery
program.
The
Air
17
Resources
Board
establishes
the
minimum
efficiencies
and
18
certifies
systems
which
meet
standards,
while
the
19
districts
adopt
rules
requiring
the
installation
and
use
20
of
the
vapor
recovery
systems
at
the
service
stations
and
21
permit
those
systems
and
conduct
the
compliance
22
inspections
to
ensure
that
they're
operating
as
certified.

23
­­
o0o­­

24
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
25
BHULLAR:
With
regards
to
the
identification
of
defects,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
203
1
the
Air
Resources
Board
is
responsible
for
identifying
2
equipment
defects
in
systems
for
the
control
of
gasoline
3
vapors
resulting
from
motor
vehicle
operations
which
4
substantial
impair
the
effectiveness
of
the
systems
in
5
reducing
air
contaminants.

6
­­
o0o­­

7
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
8
BHULLAR:
The
Board
has
met
this
mandate
by
compiling
a
9
list
of
12
equipment
defects,
which
were
incorporated
into
10
Title
17
in
1982.
Subsequently
to
this,
we
have
also
11
identified
defects
in
separate
certification
executive
12
orders.

13
So
as
it
is
today,
we
have
a
list
of
defects
on
14
one
page
in
Title
17,
and
then
we
also
have
the
defects
15
contained
in
all
the
executive
orders.

16
­­
o0o­­

17
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
18
BHULLAR:
With
regards
to
enforcement,
the
Health
and
19
Safety
Code
requires
that
when
a
district
determines
that
20
a
component
contains
a
defect
that
that
component
shall
be
21
marked
out
of
order.

22
And
this
is
the
only
case
where
the
district
has
23
the
authority
to
remove
a
control
equipment
from
service
24
due
to
a
defect.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
204
1
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
2
BHULLAR:
With
the
passage
of
AB
1164
in
1999,
the
Board
3
was
directed
to
implement
some
changes
to
the
4
identification
of
defects.
And
this
includes
not
only
5
identifying
defects
for
vapor
recovery
equipment
but
also
6
listing
them,
while
as
well
as
conducting
a
public
7
workshop
on
or
before
January
1,
2001
to
determine
whether
8
an
update
of
the
list
is
necessary.

9
A
workshop
was
held
in
December
of
2000,
and
the
10
original
list
was
discussed.
And
it
was
deemed
necessary,

11
at
that
time,
to
go
ahead
and
update
the
list
as
it
is.

12
As
well
under
the
bill,
we
are
also
required
to
13
complete
an
update
no
later
than
12
months
from
the
date
14
of
the
determination
that
the
update
is
necessary,
and
15
that
the
review
process
of
the
list
is
to
be
conducted
at
16
least
one
every
three
years.

17
It
can
be
conducted
more
often
upon
written
18
request
and
upon
approval
from
the
Executive
Officer
that
19
a
review
of
the
list
is
necessary.

20
­­
o0o­­

21
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
22
BHULLAR:
In
compiling
the
proposed
list
a
set
of
criteria
23
was
used
for
determining
a
substantially
impaired
defect.

24
And
this
includes
that
the
defect
did
not
exist
when
the
25
system
was
certified.
There
are
excess
emissions
PETERS
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1
associated
with
the
defect,
which
degrades
fueling
point
2
or
system
efficiency
by
at
least
five
percent.
And
that
3
also
that
a
verification
procedure
exists
to
identify
the
4
defect.

5
­­
o0o­­

6
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
7
BHULLAR:
The
proposed
list
is
a
combination
of
the
8
defects
from
the
1982
list,
the
defects
that
were
9
individually
specified
in
the
executive
orders,
as
well
as
10
those
defects
that
have
been
determined
from
the
field
11
work
inspections
by
district
and
state
personnel.

12
­­
o0o­­

13
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
14
BHULLAR:
This
slides
illustrates
an
example
of
a
defect
15
that
may
be
observed
in
the
field.
In
this
case,
the
16
defect
is
concerning
a
hose.
The
defective
condition
as
17
stated
in
our
proposed
list,
"
If
any
hose
with
a
visible
18
opening,"
and
the
verification
procedure
in
this
case
is
19
direct
observation.

20
­­
o0o­­

21
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
22
BHULLAR:
Another
illustration
of
a
possible
defect
would
23
be
with
a
vapor
valve
on
a
nozzle.
In
this
case,
we
24
applied
the
bag
test
to
check
for
leaks
in
nozzles.
And
25
if
the
nozzle
is
leaking,
the
bag
will
collapse
and
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
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1
would
be
deemed
a
defect.

2
­­
o0o­­

3
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
4
BHULLAR:
There
are
a
number
of
benefits
from
compiling
5
the
list.
One
being
that
it
provides
a
central
reference
6
so
it
can
be
consulted
very
easily
as
to
what
defects
are
7
for
vapor
recovery
systems.

8
It
establishes
uniform
State
enforcement,
between
9
the
districts
which
are
very
clear
as
to
what
is
a
defect,

10
and
what
is
to
be
tagged
out.
It
supplies
a
preventative
11
maintenance
guide
for
service
station
operators
if
they
12
choose
to
be
proactive
will
have
a
reference
that
they
can
13
consult
and
look
for
potential
conditions,
which
may
be
a
14
defect
and
which
could
result
in
being
tagged
out
if
the
15
district
were
to
come
for
an
inspection.

16
And
it
also
helps
to
reduce
excess
emissions
by
17
recognizing
what
a
defect
is
and
having
these
remedied
as
18
quickly
as
possible.

19
­­
o0o­­

20
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
21
BHULLAR:
Issues
with
these
proposed
lists.
One
of
the
22
issues
that
has
come
up
regards
the
tagging
out.
And
23
particularly
when
would
an
entire
station
be
subject
to
24
being
tagged
out.
In
other
words,
when
would
all
the
25
fueling
points
be
tagged
out
so
nobody
could
dispense
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
207
1
fuel?

2
In
a
response,
we
are
proposing
to
specify
three
3
defects
which
will
shut
down
an
entire
fueling
operation,

4
those
being
the
failure
of
a
leak
decay
test
for
vacuum
5
assist
systems,
the
vapor
processor
unit
inoperative
and
a
6
central
vacuum
entered
inoperative.

7
­­
o0o­­

8
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
9
BHULLAR:
Another
issue
with
the
list
was
the
definition
10
of
substantially
impairs.
We
are
proposing
in
the
11
resolution
to
include
the
definition
as
a
set
of
criteria
12
that
I
listed
earlier,
the
three
criteria,
being
that
the
13
defect
was
not
present
during
certification
of
the
system,

14
that
there
is
at
least
a
five
percent
degradation
in
the
15
system
efficiency
and
that
the
defect
can
be
verified
in
16
the
field.

17
With
that,
and
having
gone
back
and
reviewed
the
18
list,
we're
also
proposing
to
eliminate
three
defects
that
19
do
not
meet
the
substantially
impairing
criterion.
Those
20
being
a
nozzle
spout
which
exceeds
the
roundness
21
specification,
the
fill
tight
drop
tube
drain
assembly,

22
which
is
not
able
to
maintain
pressure
integrity
and
the
23
fill
tight
swivel
adaptor,
which
does
not
rotate.

24
­­
o0o­­

25
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
208
1
BHULLAR:
As
well
additional
proposed
15­
day
changes
2
include
replacing
the
date
of
the
list,
the
August
21st
3
date
of
the
list
to
read
date
of
issuance
and
to
be
filled
4
in
once
the
process
is
complete.

5
We're
also
proposing
based
upon
a
comment
to
6
correct
the
language
for
a
particular
nozzle
that
was
as
7
it
was
stated.

8
­­
o0o­­

9
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
10
BHULLAR:
In
summary,
with
this
we
are
proposing
to
amend
11
the
vapor
recovery
equipment
defect
list
and
incorporate
12
by
reference
into
Title
17,
as
well
as
have
future
updates
13
to
be
implemented
by
the
Executive
Officer.

14
­­
o0o­­

15
INVESTIGATION
AND
CERTIFICATION
SECTION
MANAGER
16
BHULLAR:
In
closing,
I
would
like
to
acknowledge
the
time
17
put
in
by
a
number
of
organizations
in
helping,
you
18
know
­­
helping
put
together
the
list
and
providing
19
comments
and
suggestions,
the
air
pollution
control
20
districts,
CAPCOA,
the
vapor
recovery
manufacturers,
WSPA
21
and
CIOMA.

22
Thank
you.

23
CHAIRPERSON
LLOYD:
Thank
you
very
much.

24
Madam
Ombudsman,
would
you
please
describe
the
25
public
participation
process
that
occurred
while
this
item
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
209
1
was
being
developed
and
share
any
concerns
or
comments
2
that
you
may
have
with
the
Board
at
this
time.

3
OMBUDSMAN
TSCHOGL:
Thank
you.

4
Mr.
Chairman
and
Members
of
the
Board,
as
you
5
heard,
staff
began
developing
these
amendments
in
December
6
of
2000
by
holding
a
public
workshop.
The
workshop's
7
purpose
was
to
determine
if
amendments
were
even
8
necessary.
Staff
sent
announcements
for
this
workshop
to
9
nearly
600
people
by
either
U.
S.
mail
or
an
Email
list.

10
The
workshop
was
held
in
Sacramento
on
December
11
13th
with
about
45
people
in
attendance
representing
the
12
vapor
recovery
industry,
gas
station
owners,
air
13
districts,
staff
petroleum
suppliers
and
the
general
14
public.

15
Staff
conducted
two
additional
public
workshops
16
to
further
define
the
list
of
equipment
listed
­­
included
17
on
the
defects
list
and
to
work
out
the
amendments
18
language.
These
workshops
were
noticed
in
a
similar
19
manner
to
the
first
one.
They
were
both
held
in
20
Sacramento,
one
on
May
22nd
of
this
year
and
the
other
on
21
August
16th,
roughly
45
people
attended
each
of
those
22
workshops.

23
Staff
also
participated
in
nine
meetings
of
the
24
CAPCOA
enforcement
managers
and
vapor
recovery
committees.

25
These
meetings
were
held
beginning
on
January
25th
of
this
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
210
1
year
and
continuing
through
this
month.

2
The
meetings
were
held
throughout
California
and
3
locations
such
as
Monterey,
Santa
Barbara,
Diamond
Bar
and
4
Lake
Tahoe.

5
Committee
participation
included
air
districts
6
and
industry
representatives.
To
further
refine
these
7
amendments,
staff
convened
a
defects
list
committee,
which
8
was
made
up
of
industry
and
government
members.
This
9
committee
met
twice
in
June
of
this
year
and
the
members
10
were
invited
to
participate
in
many
of
the
CAPCOA
11
committees.

12
Throughout
the
process,
staff
provided
the
13
opportunity
for
public
comment.
Staff
also
fielded
14
countless
calls
from
interested
parties
to
collect
input
15
and
answer
questions.
Additionally,
staff
met
or
16
teleconferenced
with
individual
stakeholders
on
more
than
17
50
different
occasions.
I
should
note
that
refinements
to
18
this
item
have
continued
up
to
this
very
date.

19
Finally,
the
staff
report
and
announcement
for
20
today's
hearing
were
released
on
the
28th
of
September.

21
Staff
mailed
a
report
to
more
than
450
people
and
posted
22
it
on
our
web
site
for
download.

23
This
concludes
my
remarks.

24
Thank
you.

25
CHAIRPERSON
LLOYD:
Thank
you
very
much,
Kathy.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
211
1
A
very
comprehensive
report
and
I'd
like
to
2
extend
my
thanks
for
all
the
effort
you
put
in
on
this
3
item
too.

4
Thank
you
very
much.

5
Do
the
board
members
have
any
questions
at
this
6
point?

7
With
that,
we'll
move
to
the
witnesses.
I'd
like
8
to
call
up
the
first
three,
Rosa
Salcedo,
Donald
Gilson
9
and
Maryann
Gonzalez.

10
MR.
SALCEDO:
Good
afternoon,
Mr.
Chairman
and
11
Members
of
the
Board.
My
name
is
Rosa
Salcedo.
I'm
the
12
Chair
of
the
CAPCOA.

13
CHAIRPERSON
LLOYD:
Sorry
about
that.

14
MS.
SALCEDO:
You've
got
it
close
enough,
don't
15
worry
about
it.
I'm
the
chair
of
the
CAPCOA
vapor
16
recovery
committee,
and
today
I
am
here
on
behalf
of
the
17
CAPCOA
to
support
the
proposed
amendments
of
Section
94006
18
of
Title
17
of
the
California
Code
of
Regulations
or
vapor
19
recovery
equipment
defects
listed
as
reflected
in
the
20
September
28th
hearing
notice.

21
ARB
staff
has
worked
with
CAPCOA's
vapor
recovery
22
committee
throughout
the
process
of
developing
these
23
revisions
and
has
considered
and
addressed
many
of
the
24
Committee's
concerns
and
requests.

25
This
existing
defects
list
is
outdated
and
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
212
1
proposed
revisions
will
help
districts
and
operators
2
improve
ongoing
compliance
and
gasoline
fueling
3
facilities.
ARB
has
worked
with
CAPCOA
throughout
the
4
past
years
workshops
and
meetings
to
develop
the
proposed
5
revisions
and
successfully
reach
consensus.

6
With
a
level
of
detail
on
the
revised
defects
7
lists,
there
have
been
conclusions
that
not
everyone
was
8
enthusiastic
about
it,
but
CAPCOA
is
satisfied
that
its
9
major
concerns
have
been
addressed.

10
The
proposed
revisions
are
also
formatted
for
11
easier
use
by
inspectors
and
operators.
This
new
format
12
will
also
make
future
revisions
to
a
defects
list
simpler.

13
CAPCOA
expects
the
list
will
be
regularly
updated
14
to
reflect
new
equipment,
new
executive
orders
and
15
continued
fuel
compliance
experience.
CAPCOA
therefore
16
supports
the
proposed
revisions
of
September
28th.

17
In
the
interests
of
facilitating
implementation
18
of
the
revised
defects
list,
CAPCOA
requests
that
the
19
following
measures
be
taken:
Number
1,
that
test
20
procedures
listed
as
verification
means
on
the
defects
21
list
be
posted
on
the
CARB
web
site.

22
Number
two
that
an
equipment
list
be
made
23
available
for
nozzles
where
the
insertion
into
the
locked
24
mechanism
can
be
verified
visually
and
a
test
method
be
25
provided
for
those
that
cannot
be
verified
visually.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
213
1
Number
three
that
CARB
prepare
an
advisory.

2
Four,
that
CARB
in
conjunction
with
CAPCOA
3
committees
prepare
implementation
guidelines.

4
Five,
that
CARB
provide
training
to
districts
and
5
continue
this
on
an
ongoing
basis
as
Title
17
defects
list
6
is
implemented
and
questions
arise.

7
And
finally,
six,
that
the
revised
defects
list
8
be
effective
immediately.

9
Now,
I
would
like
to
clarify
that
the
changes
to
10
the
defects
list
made
today
are
short
notice
to
us.

11
CAPCOA
has
not
had
the
time
to
review,
discuss
and
reach
12
agreement
on
these
changes.

13
Therefore,
CAPCOA
requests
that
the
Board
take
an
14
action
today
to
approve
the
revised
list.
And
if
the
list
15
is
approved
with
the
proposed
15­
day
changes
that
these
be
16
deferred
to
a
later
date
where
CAPCOA
has
had
the
time
to
17
review
and
discuss
them.

18
And
with
that,
I
would
like
to
thank
the
Board
19
and
ARB
staff
for
working
with
us
throughout
this
process
20
and
the
Board
for
providing
the
direction.
And
we
look
21
forward
to
the
continuing
effort.
I
would
like
to
point
22
out
that
the
written
copy
of
my
testimony
that
you
may
23
have
is
not
exactly
what
I
just
stated
because
of
the
last
24
minute
changes,
so
we
had
to
make
last
minute
amends.

25
Thank
you
very
much.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
214
1
CHAIRPERSON
LLOYD:
Thank
you
very
much.

2
Donald
Gilson.

3
MR.
GILSON:
Good
afternoon.
My
name
is
Don
4
Gilson.
I'm
with
Chevron
Products
Company
in
San
Ramon.

5
And
I
wanted
to
say
that
I
support
the
changes
that
have
6
been
made
this
afternoon
by
the
Staff.
I
appreciate
the
7
hard
work
that
everyone
has
put
into
this.
I
think
they
8
really
reflect
the
whole
concept
here
of
having
a
set
of
9
rules,
if
you
will,
that
not
only
­­
that
inspectors,
but
10
also
operators
can
follow
and
know
what
really
needs
to
be
11
done
to
keep
their
systems
in
good
condition.

12
I
have
two
comments
I
do
want
to
make
about
two
13
items
that
I'd
like
to
bring
up.
One
has
to
do
with
the
14
poppet
valve,
one
of
the
items
that's
on
the
defect
list,

15
it's
on
the
first
page.
And
this
is
the
issue,
and
it's
16
addressed
in
the
letter
that
I
wrote
to
the
Board,
that
17
when
you
have
a
defective
poppet
valve
it
may
or
it
may
18
not
be
working
right,
it
doesn't
close
all
the
way.
And
19
the
concern
is
that
there
may
be
some
emissions
related
to
20
this,
that's
the
reason
it's
on
the
list.

21
It
turns
out
of
course,
there's
a
cap
that's
over
22
the
valve.
This
is
on
the
connection
that's
made
for
the
23
vapor
return.
There
are
actually
no
emissions
related
to
24
that
situation,
as
long
as
the
cap
is
in
place,
and,
of
25
course,
when
the
cap
is
in
good
condition.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
215
1
The
only
time
that
there
is
a
situation
where
2
emissions
could
occur
is
when
the
cap
is
removed
and
3
before
the
fitting
is
put
on
by
the
truck
during
delivery.

4
So
this
is
a
very
short
period
of
time
that
that
occurs.

5
I
don't
feel
that
that
potential
for
emissions
6
that
it's
only
for
certain
systems
is
enough
to
warrant
it
7
being
considered
a
significant
defect.

8
What
I
suggest
is
that
staff
look
at
the
9
situation
and
look
at
it
from
the
standpoint
and
see
which
10
systems
really
need
to
be
included
on
the
list,
because
it
11
makes
a
difference
what
kind
of
system
it
is,
whether
it's
12
under
pressure
or
possibly
not
under
pressure
when
it's
in
13
use.

14
My
second
point
is
that
I'd
like
to
see
that
15
there
be
some
sort
of
inspection
guidelines
that
are
16
issued
that
allows
folks,
not
only
the
inspectors,
but
the
17
system
operators
to
know
exactly
what
the
items
that
are
18
on
the
list
mean,
and
help
them
to
make
a
determination,

19
either
as
operators
as
they're
inspecting
their
systems
or
20
when
there's
a
meeting
between
the
inspector
and
the
21
operator
when
a
defect
is
found
to
make
sure
everyone
22
agrees
what
is
the
problem
and
what
needs
to
be
done.

23
With
that,
I
want
to
thank
the
staff
for
their
24
diligent
work
on
this,
and
I'll
take
any
questions
if
you
25
have
any.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
216
1
Thank
you.

2
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Any
3
questions?

4
Thank
you
very
much.

5
Maryann
Gonzalez,
Sandra
Duval,
and
Skip
Orr.

6
MS.
GONZALEZ:
Hello.
My
name
is
Maryann
7
Gonzalez.
I'm
here
representing
BP
ARCO.
First
of
all,

8
I'd
like
to
thank
you
for
giving
us
an
opportunity
to
9
provide
comments.
I,
too,
want
to
reiterate
that
we
thank
10
the
staff
for
working
so
diligently
with
us
and
we
support
11
the
last
minute
changes
made.

12
We
support
the
development
and
adoption
of
a
13
vapor
recovery
equipment
defects
list.
However,
we
want
14
to
maintain
or
we
want
to
just
qualify
that.
We
believe
15
the
items
being
included
on
this
list
should
be
determined
16
to
substantially
impair
the
effectiveness
of
the
vapor
17
recovery
system.

18
Now,
we're
not
necessarily
sure.
I
just
have
one
19
item
really
that
I
believe
and
feel
that
it
doesn't
meet
20
that
definition.
This
is
the
Phase
1
inoperative
poppet
21
item,
we
believe
that
definition
is
too
broad
and
the
22
meaning
of
inoperative
is
not
clear.

23
As
Don
just
described,
the
vapor
poppet
is
24
normally
covered
by
a
dust
cap
and
is
only
exposed
at
the
25
moment
gasoline
is
being
delivered
into
the
underground
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
217
1
storage
tank.
So
we
believe
the
potential
for
emissions
2
to
be
released
from
an
inoperative
poppet
is
minimal
and
3
may
not
meet
the
definition
of
substantially
impairing
the
4
effectiveness
of
the
vapor
recovery
system.

5
There
is
a
risk
for
tagging
out
and
shutting
down
6
underground
storage
tanks
when
they
don't
meet
the
7
definition
of
the
rule,
and
that
is
our
concern.
So
we
8
respectfully
request
that
this
item
be
revised
or
removed
9
from
the
list.

10
My
last
comment
is
in
regards
to
guidance
or
11
enforcement
guidelines.
BP
supports
that
ARB
develop
and
12
provide
enforcement
guidelines
to
the
local
air
pollution
13
control
districts
regarding
the
interpretation
and
14
implementation
of
the
vapor
recovery
equipment
defects
15
list.

16
We
believe
that
guidance
from
ARB
to
the
local
17
air
pollution
control
districts
will
facilitate
uniform
18
inspection
and
enforcement
throughout
California.

19
With
that,
that's
the
end
of
my
comments,
and
20
I'll
take
any
questions
if
you
have
any
for
me.

21
CHAIRPERSON
LLOYD:
Thank
you
very
much.
I
would
22
like
to
get
staff's
comment
on
the
poppet
issues.
It's
23
the
second
speaker
that's
brought
that
up.

24
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
This
was
an
25
item
that
was
on
the
original
1970s
list.
And
we
looked
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
218
1
at
it
a
little
bit
differently
from
some
of
the
other
2
items.
If
the
valve
itself
fails,
the
argument
is
that
3
there
is
a
secondary
containment
system,
this
dust
cap
4
which
has
a
gasket
on
it.

5
The
reason
we
didn't
take
it
off
is
that
we
don't
6
find
­­
I
shouldn't
say
very
high,
but
we
find
a
number
of
7
gaskets
and
caps
that
are
not
put
back
on
or
that
are
8
faulty
themselves.
And
so
the
secondary
containment
9
system
isn't
always
there
in
the
field
right
now.
So
we
10
felt
kind
of
as
a
system,
we
ought
to
leave
that
on
in
11
order
­­
because
without
that
secondary
containment
the
12
thing
could
leak
all
the
time.

13
So
that
was
our
reason
for
leaving
it
on.
And
14
clearly
in
that
scenario
you
could
have
emissions
that
go
15
well
above
the
criteria.
If
the
dust
cap
is
on
and
16
sealed,
then
it's
what
the
speakers
say
is
the
emissions
17
would
probably
be
very
small
if
that
poppet
valve
did
not
18
properly
seal.

19
MS.
GONZALEZ:
If
I
could
just
make
a
comment
20
with
that
respect.
In
the,
I
believe,
early
August
21
version
of
the
list
there
was
some
additional
language.

22
It
said,
"
Phase
1
vapor
poppet
inoperative
and
cap
or
23
gasket
missing
or
inoperative."

24
So
there
was
more
to
the
item.
And
so,
I
think
25
it
helps
just
qualify,
if
you
will,
or
narrow
the
scope.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
219
1
CHAIRPERSON
LLOYD:
Sounds
as
though
that's
2
possible.

3
BOARD
MEMBER
RIORDAN:
Is
that
possible?

4
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Yeah,
I
think
5
it
addresses
the
concern.
I'm
not
quite
sure
why
it
got
6
dropped
out.

7
We
can
take
a
look
at
that
and
if
it
seems
8
appropriate
to
add
that
in,
we'll
add
that
back
in.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much.

10
MS.
GONZALEZ:
Thank
you.

11
CHAIRPERSON
LLOYD:
Sandra
Duval
and
Skip
Orr.

12
MS.
DUVAL:
Sandra
Duval.
I'm
the
government
13
relations
director
for
the
California
Independent
Oil
14
Marketers
Association.
I
appreciate
the
chance
to
make
15
comments
this
afternoon.

16
We'd
like
to
echo
what
the
previous
speakers
have
17
said
about
the
hard
work
of
the
staff
and
certainly
18
appreciate
having
the
opportunity
to
have
some
input
into
19
the
list.

20
We
do,
however,
still
have
some
pretty
strong
21
concerns
about
the
list,
and
we
would
like
to
ask
that
the
22
Board
not
take
action
today,
but
rather
have
us
go
back
23
and
work
on
this
a
little
bit
more.

24
That
issue
of
substantial,
while
the
five
percent
25
that's
going
to
be
placed
into
the
resolution
does
help
us
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
220
1
a
little
bit
with
our
concerns,
we
would
like
to
see
that
2
concept
incorporated
actually
into
the
list,
particularly
3
with
regard
to
the
first
three
items
that
are
very
broad.

4
Without
a
qualifier
of
those
first
three
items
5
being
substantial
and
having
that
incorporated
into
the
6
list,
we
feel
that
there
could
be
items
that
would
be
7
tagged
out
that
are
technically
on
the
list
but
are
not
8
substantial,
and
so
we
do
have
some
concerns
with
that
9
regard.

10
We're
concerned
that
this
list
is
perhaps
a
11
little
bit
too
inclusive
without
that
provision
being
12
placed
into
or
conceptualized
either
in
the
regulation
13
itself
or
on
the
list,
and
that
items
can
be
tagged
out
14
that
would
not
actually
substantially
impair
the
15
effectiveness
of
the
vapor
recovery
system
that
is
16
required
in
the
Health
and
Safety
Code.

17
And
we're
also
concerned
about
some
of
the
items
18
on
the
list
including
the
now
famous
poppet
valve
issue,

19
that
since
that's
been
beat
to
death
already,
I'll
reserve
20
my
comment
on
that.

21
CHAIRPERSON
LLOYD:
Thank
you
very
much
indeed.

22
Any
questions
or
comments
from
the
Board?

23
Mr.
McKinnon.

24
BOARD
MEMBER
McKINNON:
Yeah,
I
think
that
this
25
is
probably
the
biggest
question
on
this,
kind
of,
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
221
1
staff.
I
think
several
letters
addressed
this
question
of
2
kind
of
defining
what's
a
substantial
defect
and
what's
3
not.
So
where
are
we
at
on
that?

4
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Well,
what
5
we're
doing
as
part
of
the
­­
proposing
as
part
of
the
6
15­
day
changes
is
to
add
a
definition
of
what
is
a
7
substantial
­­
in
fact
everybody
has
commented
on
that,
I
8
think
that's
necessary.

9
We
actually
have
used
for
20
some
years
10
definitions
to
identify
what
a
defect
is.
And,
in
fact,

11
in
the
early
years
that
was
ten
percent.
A
defect
was
12
something
that
if
it
failed
would
cause
a
ten
percent
13
increase
in
emissions
and
since
1982
it's
been
five
14
percent.
And
that's
what
was
the
basis
of
these
being
put
15
on
the
individual
certifications
or
executive
orders
of
16
each
piece
of
equipment.

17
So,
essentially,
what
we're
doing
is
18
incorporating
what
we've
used
in
the
past
into
this
19
document,
and
saying
this
is
the
criteria
by
which
an
item
20
either
goes
on
the
list
or
doesn't
go
on
the
list.
And
21
for
all
the
items
we
have
out
there,
we
have
either
an
22
engineering
analysis
or
some
data
and
testing
that
was
23
done
to
identify
the
defect
in
the
first
place.
So
I
24
think
that
the
comment
that
there
could
be
items
on
the
25
list
which
are
not
substantial,
I
suppose
that's
possible,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
222
1
but
if
we've
done
our
homework
correctly
like
I
think
we
2
have,
then
we've
either
done
the
analysis
or
have
data
3
that
says
it's
over
five
percent
to
get
on
the
list
in
the
4
first
place.

5
MS.
DUVAL:
I
think
that
my
concern
if
I
can
6
clarify
that
is
with
the
first
three
items
on
the
list
7
which
are
not
specific
items,
but
for
example
the
first
8
item
is,
"
Any
equipment
defect
which
is
identified
in
an
9
executive
order
certifying
a
system
pursuant
to
the
10
certification
procedures
incorporated
in..."
and
the
site
11
of
the
Regulation.

12
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
If
we
can
13
just
maybe
one
at
a
time
go
to
those,
maybe
it
would
be
14
helpful.

15
I
think
that
just
says
that
as
part
of
certifying
16
a
given
piece
of
equipment
or
system,
we
identified
the
17
defects,
and
then
the
defects
in
the
past
just
stayed
on
18
that
document
and
were
hard
to
find,
et
cetera.
Now,
they
19
would
automatically
essentially
become
an
item
of
this
20
list.

21
And
so
the
five
percent
criteria
applies
to
22
putting
it
on
the
executive
order
to
start
off
with,
so
23
the
same
criteria
apply
to
the
EO
as
does
the
list.

24
MS.
DUVAL:
That
helps.

25
BOARD
MEMBER
D'ADAMO:
Well
a
question
to
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
223
1
witness.
Does
that
help
in
your
understanding
of
it,
what
2
Mr.
Cackette
just
described,
as
long
as
there
that
five
3
percent
threshold?
Do
you
have
any
remaining
concerns?

4
MS.
DUVAL:
I
would
still
have
a
concern
that
5
there
would
be
­­
that,
yes,
there
would
be
defects
that
6
would
appear
on
that
list
that
don't
meet
the
criteria,

7
but
I
think
that's
something
that
we
would
need
to
work
8
out
in
the
EOs
as
opposed
to
in
this
regulation.

9
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
The
next
two
10
items
basically
say
if
somebody
has
tampered
with
the
11
system
and
doesn't
look
like
what
was
certified,
it's
12
automatically
a
defect.
You
can't
have
something
missing,

13
you
know,
no
catalytic
converter
on
your
car
or
putting
on
14
a
hot
rod
carburetor
to
replace
what
was
on
there
when
it
15
wasn't
certified,
those
are
automatic
defects.

16
We
find
those
and
they
are
tagged
out.
You
know,

17
on
a
car,
if
we
find
them,
the
person
gets
a
fine.
It's
18
the
same
principle,
I
think,
if
that's
what
you
were
19
meaning
by
the
next
two.

20
MS.
DUVAL:
The
next
two
items
­­

21
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
I'm
looking
22
at
the
list
here.

23
MS.
DUVAL:
Yeah,
your're
right,
and
that
is
what
24
I
mean
by
the
next
two
items.

25
I
guess
my
point
is
is
that
this
list
is
not
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
224
1
intended
to
be
a
list
with
every
defect
with
the
system,

2
but
only
major
defects.
And
while,
yes,
within
the
next
3
two
items
I'm
going
to
concede
that
if
any
of
these
parts
4
are
absent
or
disconnected
or
you've
used
an
uncertified
5
component
that
there
are
regulations
within
the
body
of
6
regulation
you
have
now
that
would
cause
a
penalty
to
the
7
personal
who
owned
it.
You
wouldn't
be
able
to
use
that
8
system,
but
that
does
not
necessarily
mean
that
it
rises
9
to
the
point
of
being
a
major
defect.

10
So
in
other
words,
what
we're
doing
is
we're
11
creating
a
situation
where
you're
penalized
for
not
having
12
a
certified
component
and
having
a
major
defect,
when,
in
13
fact,
it
may
not
actually
­­
while
it
may
be
uncertified,

14
that
doesn't
mean
it
doesn't
work.
It's
just
uncertified.

15
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
That
puts
us
16
in
an
impossible
situation.
I
mean,
how
can
we
show
that
17
the
use
of
an
inappropriate
device
that
we
don't
even
know
18
what
it
is
increases
emissions
more
than
five
percent?
It
19
just
seems
to
me
that
if
you
­­
that
there's
a
bit
of
a
20
blurr
here
in
the
line
that
if
you've
tampered
with
the
21
system
there's
got
to
be
a
remedy,
and
the
remedy
has
to
22
be
one
that's,
you
know,
fairly
strong
and
that
would
rise
23
to
the
level
of
a
major
defect.

24
I
mean,
you
use
an
uncertified
nozzle
we
have
no
25
idea
if
it
works
right
or
not,
because
I
don't
know
what
PETERS
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1
an
uncertified
nozzle
is
until
I
see
one.

2
MS.
DUVAL:
Well,
and
I
guess
my
point
is
you
3
already
have
a
remedy
for
that.
If
you
see
an
uncertified
4
nozzle,
then
it
can't
be
used,
whether
it's
on
the
list
or
5
not.

6
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Yeah,
but
7
that's
exactly
the
same
remedy
of
their
being
on
the
list.

8
So
all
this
does
is
a
clarify
that
if
it's
on
the
list
you
9
ought
to
get
a
tag
it
out,
which
means
that
piece
of
10
componentry
cannot
be
used
from
that
moment
on,
and
then
11
it's
up
to
the
district
what
they
actually
do
about
that
12
whether
they
issue
a
notice
of
violation
or
penalty
or
13
not.

14
MS.
DUVAL:
I
guess
I'm
worried
about
their
being
15
two
penalties
associated
with
one
defect.

16
GENERAL
COUNSEL
WALSH:
I
would
suggest
that
17
that's
very
consistent
with
our
normal
enforcement
18
practice
everywhere.
Our
expectation
is
if
we
find
a
19
violation,
the
noncompliance
has
to
be
corrected
20
immediately,
and
typically
there
is
a
penalty
attached
as
21
well
with
that
noncompliance,
those
two
things,
the
22
corrective
action
and
the
penalty
together
make
up
the
23
response
to
the
violation.
That's
standard
practice.

24
MS.
DUVAL:
And
I'm
not
suggesting
that
it
25
shouldn't
be.
I'm
suggesting
that
there
shouldn't
be
a
PETERS
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penalty
for
both
­­
there
shouldn't
be
two
penalties
for
2
the
same
defect,
both
for
not
having
a
certified
component
3
and
for
being
on
the
major
defects
list,
and
maybe
that's
4
not
a
possibility.

5
CHAIRPERSON
LLOYD:
No.

6
GENERAL
COUNSEL
WALSH:
There
would
not
be
two
7
penalties.
The
corrective
action
and
a
civil
penalty,
but
8
there
would
be
only
one
of
each.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much.

10
The
last
witness
is
Skip
Orr,
Husky
Corporation.

11
MR.
ORR:
Mr.
Chairman
and
Board,
as
a
vapor
12
recovery
equipment
manufacturer,
Husky
is
pleased
with
the
13
improvements
being
made
in
the
vapor
recovery
defects
and
14
verification
procedure
list.
We've
attended
all
the
15
workshops
either
in
person
or
by
conference
phone.
The
16
staff
has
been
very
interested
in
any
input
that
would
17
make
the
list
more
effective
and
workable.

18
The
results
is
a
list
that
will
allow
a
quick
19
identification
and
removal
of
vapor
recovery
equipment
20
that
is
no
longer
performing
as
certified
and
will
also
21
prevent
the
hardships
to
the
station
owner
and
would
22
endure
a
properly
performing
equipment
was
unnecessarily
23
identified
as
defective.

24
And
I'd
like
to
thank
the
staff
for
the
work
25
they've
done
and
we're
in
total
agreement.

PETERS
SHORTHAND
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1
CHAIRPERSON
LLOYD:
Great
to
hear
that
support.

2
Thank
you
very
much.

3
And
a
clear
reflection
of
the
great
work
staff
4
has
done
here.

5
Do
the
Board
members
have
any
additional
6
questions?

7
I
guess
this
is
a
­­
I'll
now
close
the
record
on
8
this
agenda
item.
However,
the
record
will
be
reopened
9
when
the
15­
day
notice
of
public
availability
is
issued.

10
Written
or
oral
comments
received
after
this
11
hearing
date
but
before
the
15­
day
notice
is
issued
will
12
not
be
accepted
as
part
of
the
official
record
on
this
13
agenda
item.
When
the
record
is
reopened
for
a
15­
day
14
comment
period,
the
public
may
submit
written
comments
on
15
the
proposed
changes
which
will
be
considered
and
16
responded
to
in
the
final
statement
of
reasons
for
the
17
regulation.

18
Any
ex
parte
communications?

19
So
we'd
entertain
a
motion
on
this
item?

20
BOARD
MEMBER
D'ADAMO:
So
moved.

21
BOARD
MEMBER
RIORDAN:
Second.

22
CHAIRPERSON
LLOYD:
All
in
favor
say
aye?

23
(
Ayes.)

24
CHAIRPERSON
LLOYD:
No
one
against?

25
Thank
you
very
much,
staff.

PETERS
SHORTHAND
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1
We
appreciate
the
efforts
there.

2
So
now
we
come
to
our
last
item
which
we
have
to
3
wrap
up
fairly
quickly
to
get
a
quorum
here.

4
The
next
item
of
business
before
the
Board
today
5
are
two
research
proposals.

6
Does
the
Research
Division
staff
have
anything
7
they
wish
to
say
about
the
proposals?

8
MS.
WELLER:
Mr.
Chairman,
we
have
a
brief
9
presentation,
which
we
could
give
or
we
could
just
go
10
directly
to
questions,
if
you
would
like.

11
The
two
proposals
that
are
before
you
are
the
12
Development
and
Application
of
ambient
aerosol
13
concentrators
to
conduct
health
studies
in
the
Los
Angeles
14
basin.
Would
you
care
for
the
presentation
or
­­

15
CHAIRPERSON
LLOYD:
Well,
I
think
some
of
the
16
Board
Members
have
been
briefed
on
this
item,
and
I
think
17
maybe
we
could
go
to
Board
questions
on
these.

18
BOARD
MEMBER
RIORDAN:
Mr.
Chairman,
that
would
19
be
fine
with
me.
And
I
just
have
one
brief
question.

20
Obviously,
there's
a
substantial
investment
that
we're
21
making
in
this
mobile
facility,
correct?

22
MS.
WELLER:
Yes.

23
BOARD
MEMBER
RIORDAN:
Okay.
At
such
a
point
in
24
time,
what's
the
ownership
of
that
facility?
And
if
it
25
were
to
have
some
duration
of
use,
do
we
still
have
a
part
PETERS
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1
of
it,
if
indeed
we
have
some
ownership
in
it?

2
MS.
WELLER:
Well,
first
of
all,
the
super
site
3
program
is
extremely
correlated
with
that
project.
So
4
even
though
there
is
a
substantial
component
that
ARB
is
5
contributing
to
that
project,
it's
component
is
involved
6
in
a
$
13
million
program.

7
But
I
believe
you're
asking
if
the
mobile
8
facility
would
belong
to
the
Air
Resources
Board?

9
BOARD
MEMBER
RIORDAN:
Well,
would
we
have
some
10
ownership?

11
MS.
WELLER:
Some
ownership
of
that.

12
BOARD
MEMBER
RIORDAN:
What
happens
there?
Who
13
owns
this
thing?

14
RESEARCH
DIVISION
CHIEF
CROES:
For
any
equipment
15
that
we
buy
as
part
of
our
project,
we
retain
ownership,

16
but
parts
of
this
facility
are
bought
with
U.
S.
EPA
funds
17
and
we
would
not
have
ownership
of
that.

18
BOARD
MEMBER
RIORDAN:
But
we
would
have
maybe
a
19
joint
ownership?

20
RESEARCH
DIVISION
CHIEF
CROES:
Yes.

21
EXECUTIVE
OFFICER
KENNY:
Actually,
if
I
might.

22
I
think
the
general
answer
is
going
to
be
no.
Generally,

23
what
we're
doing
here
is
we
are
funding
some
research
24
that's
being
done
at
UCLA.
And
it
essentially
relates
to
25
the
PM.
I
mean
there
is
equipment
that's
being
purchased,

PETERS
SHORTHAND
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1
but
it's
a
combination
of
a
lot
of
dollars
from
a
lot
of
2
agencies.
And
it's
going
to
be
very
hard
to
trace
it
and
3
be
able
to
say
that
it's
specifically
our
equipment
and
4
our
dollars.

5
CHAIRPERSON
LLOYD:
This
trailer
is
not
6
self­
propelled.

7
EXECUTIVE
OFFICER
KENNY:
Correct.

8
BOARD
MEMBER
RIORDAN:
It
does
not
move?

9
CHAIRPERSON
LLOYD:
Well,
unless
you
pull
it.

10
(
Laughter.)

11
MS.
WELLER:
The
facilities
are
completely
12
mobile,
but
not
self
mobile.

13
BOARD
MEMBER
RIORDAN:
What
I'm
leading
up
to
is
14
I
see
potentially
some,
maybe
at
some
point
in
time,
you
15
could
conceivably
get
some
income
from
this,
doing
some
16
studies
in
the
future.
I'm
not
saying
currently,
but
in
17
the
future.

18
And
I'm
just
wondering
if
we
would
derive
any
19
benefit
from
that
investment
that
we're
making.

20
EXECUTIVE
OFFICER
KENNY:
We
will
derive
benefit
21
from
the
investment.
And
it's
kind
of
along
the
lines
of
22
kind
of
what
we've
been
doing
with
the
Children's
Health
23
Study
and
all
the
information
and
additional
research
24
that's
being
accomplished.
What's
happening
here
is
that
25
there
essentially
is
PM
concentrated
work
that's
being
PETERS
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1
done
through
UCLA,
and
it's
also
being
done
in
conjunction
2
with
the
super
site
that
the
federal
government
is
funding
3
at
UCLA.

4
And
so
we're
trying
to
tap
into
that
and
take
5
advantage
of
all
the
work
that's
being
done
there
and
then
6
at
the
same
time
sort
of
extend
that
with
the
contribution
7
that's
being
provided
by
ARB.

8
But
in
terms
of,
you
know,
some
actual
hardware
9
or
something
like
that
that
we
could
actually
point
to
10
that
we
would
probably
see
in
the
future,
I
doubt
that
11
we'll
get
that.

12
CHAIRPERSON
LLOYD:
I
guess
no
more
questions
on
13
that
proposal.

14
The
next
one
is
on
the
chamber
at
Riverside.

15
MS.
WELLER:
Right.
The
next
proposal
is
on
16
improved
reactivity
estimates
for
Volatile
Organic
17
Compounds
used
in
architectural
coatings.

18
And
again,
similar
to
the
concentrator
proposal,

19
this
proposal
takes
advantage
of
a
$
3
million
smog
chamber
20
that
is
being
developed
at
the
University
of
California,

21
Riverside
for
which
there
is
outside
EPA
funding.
And
the
22
funding
for
that
proposal
from
ARB
would
be
$
240,102.

23
And,
again,
I'd
be
glad
to
take
any
questions
on
24
that
proposal.

25
CHAIRPERSON
LLOYD:
I
guess
on
the
photograph
we
PETERS
SHORTHAND
REPORTING
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1
have
here,
you
show
a
person
that's
in
front
of
the
2
chamber
just
to
show
the
scale
of
the
chamber.
It's
a
3
pretty
big
chamber.

4
MS.
WELLER:
Right,
if
you
could
bring
up
the
5
picture
of
the
chamber.

6
The
chamber
is
being
constructed
now.
It's
under
7
construction.

8
CHAIRPERSON
LLOYD:
And
that
was
for
about
80K
a
9
year
for
three
years.

10
MS.
WELLER:
That
one
is
for
$
240,102.
And,
of
11
course,
the
advantage
of
that
chamber
is
that
it
can
use
12
lower
NOx
reaction
components
that
are
close
to
the
13
ambient
components.
So
it's
called
the
next
generation
14
smog
chamber.
It's
a
great
innovation
in
smog
chambers.

15
CHAIRPERSON
LLOYD:
Thank
you.
I
have
no
16
questions.

17
Any
board
members
have
questions?

18
Do
we
have
a
vote
on
those
research
proposals?

19
BOARD
MEMBER
CALHOUN:
I
so
move,
Mr.
Chairman.

20
BOARD
MEMBER
RIORDAN:
Second.

21
CHAIRPERSON
LLOYD:
One
questions
just
before
we
22
have
the
vote.
I
know
that
Dr.
Friedman
was
briefed
on
23
the
research
proposals,
did
he
have
any
concerns?

24
RESEARCH
DIVISION
CHIEF
CROES:
The
only
concern
25
he
had
was
that
the
animal
work
that
was
part
of
the
PETERS
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1
concentrator
project
should
include
some
heart
end­
points.

2
So
they've
included
­­
he
had
those
discussions
before
we
3
got
the
final
proposals,
so
they
have
a
consult
­­
a
4
professor
from
the
Cardiac
Department
at
UCLA
that's
apart
5
of
this
project.

6
CHAIRPERSON
LLOYD:
Okay.

7
So
all
in
favor
say
aye?

8
(
Ayes.)

9
CHAIRPERSON
LLOYD:
Anyone
against?

10
With
that
thank
you
very
much.
I
guess
seeing
no
11
additional
public
items,
I'd
like
to
officially
bring
the
12
November
15th
Air
Resources
Board
Meeting
to
a
close.

13
Thank
you
all
very
much.

14
(
Thereupon
the
California
Air
Resources
Board
15
meeting
was
adjourned
at
3:
00
p.
m.)

16
17
18
19
20
21
22
23
24
25
PETERS
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REPORTING
CORPORATION
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916)
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1
CERTIFICATE
OF
REPORTER
2
I,
JAMES
F.
PETERS,
a
Certified
Shorthand
3
Reporter
of
the
State
of
California,
and
Registered
4
Professional
Reporter,
do
hereby
certify:

5
That
I
am
a
disinterested
person
herein;
that
the
6
foregoing
California
Air
Resources
Board
meeting
was
7
reported
in
shorthand
by
me,
James
F.
Peters,
a
Certified
8
Shorthand
Reporter
of
the
State
of
California,
and
9
thereafter
transcribed
into
typewriting.

10
I
further
certify
that
I
am
not
of
counsel
or
11
attorney
for
any
of
the
parties
to
said
meeting
nor
in
any
12
way
interested
in
the
outcome
of
said
meeting.

13
IN
WITNESS
WHEREOF,
I
have
hereunto
set
my
hand
14
this
26th
day
of
November,
2001.

15
16
17
18
19
20
21
22
23
JAMES
F.
PETERS,
CSR,
RPR
24
Certified
Shorthand
Reporter
25
License
No.
10063
PETERS
SHORTHAND
REPORTING
CORPORATION
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