June 11, 2003
The South Coast Air Quality Management District’s Governing
Board has directed the agency’s staff to develop a plan to bring the Southland’s
power plants back into the emission reduction and credit trading program known
as RECLAIM.
AQMD staff now will develop a specific rule proposal, for
consideration by its Board this fall, to regulate the power plants’ trading
activity in RECLAIM. That plan would include safeguards to prevent future
emission credit price spikes. Power plants would rejoin RECLAIM
effective Jan. 1, 2004.
“Power plants have installed pollution controls during the
past two years that will reduce their emissions by up to 90 percent,” said Barry
Wallerstein, AQMD’s executive officer.
“Due to these emission reductions, power plants now can
rejoin the emission credit market without affecting the stability of credit
prices.”
In May 2001, during the state’s energy crisis, AQMD’s Board
separated power plants from the rest of the RECLAIM market to stabilize emission
credit prices and assure adequate power supply. At that time, most power plants
had not installed pollution controls and as a result bought most of the
available credits to increase their electricity production and resulting
emissions.
Due to AQMD Board action in May 2001, power plants now have
installed pollution controls to reduce their emissions by up to 90 percent.
Since power plants now have much lower emissions, they are expected to have
excess credits available for sale to other facilities, even if the state were to
experience another energy crisis similar to that in 2000-2001.
AQMD adopted RECLAIM -- short for the REgional CLean Air
Incentives Market -- in 1993 to reduce compliance costs and increase compliance
flexibility for the more than 300 largest sources of nitrogen and sulfur oxide
emissions. The program assigned an emissions cap for each facility that
declined each year to assure overall emissions reductions. Facilities have the
option of installing pollution control equipment and potentially generating
excess emission reduction credits for sale, or purchasing credits from other
sources to meet their cap.
In other action on June 6, the Board:
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Adopted a $101.6 million budget for fiscal year 2003-04
with estimated revenues of $95.5 million. The budget reflects a $2.7 million
increase from last year due to employee labor agreements, a $5.9 million
increase in retirement contributions and a 3.2 million decrease in emission
fees. To balance the budget, the Board cut spending by $6.7 million,
eliminated 22 vacant positions and tapped $6.1 million in reserve funding. The
adopted budget will fund 798 positions – 356 fewer than in fiscal year
1991-92. Adjusted for inflation, next year’s budget is 38 percent less than
the one adopted in 1991-92;
-
Adopted a 3 percent across-the-board fee increase, equal
to inflation. Other minor fee adjustments are expected to increase revenues
by $176,000 in the 2003-04 fiscal year;
-
In a major step forward for the region’s nascent hydrogen
fueling network, approved $1.89 million to develop three additional hydrogen
fueling stations, and to advance fuel cell vehicle technology. The Board
approved seven projects in a second phase of hydrogen infrastructure
development, including building hydrogen fueling stations in Los Angeles,
Torrance and Diamond Bar. Last fall, AQMD’s Board approved the first phase of
the project with hydrogen fueling sites at Los Angeles International Airport,
Long Beach, Anaheim, Irvine and Palm Springs; and
-
Amended Rule 1193 – Clean On-Road Residential and
Commercial Waste Collection Vehicles, to extend the sunset date to July 1,
2004 for dual-fueled waste collection trucks, which burn diesel and natural
gas. The sunset date was further extended to July 1, 2005 for dual-fueled
waste vehicles equipped with particulate traps.
AQMD is the air pollution control agency for Orange County
and major portions of Los Angeles, San Bernardino and Riverside counties.
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