October 17, 2003

The Philadelphia Diesel Difference Workgroup Meeting

30th Street Station, The Chapel
30th and Market Streets
Philadelphia, Pennsylvania 19104

IN ATTENDANCE:

Joe Berty, Berty Reaction Engineers, Ltd.
April Birnbaum, Air Management Services, Department of Public Health, Philadelphia.
William Campbell, Seasoned Energy.
Francine Carlini, Pennsylvania Department of Environmental Protection (PA DEP).
Ray Chalmers, US EPA, Region III.
Eric Cheung, Clean Air Council/Clean Cities Program, Philadelphia.
A. J. Dowd, National Railroad Passenger Corporation, Amtrak.
Morris Fine, Air Management Services, Department of Public Health, Philadelphia.
Kirt Flowers, Amtrak Automotive Group.
Michael Gray, Rentar Environmental Solutions.
John Hadalski, Managing Director's Office, Philadelphia.
Michael Hennessy, Transmatic, Inc.
Jack Lebeau, Rentar Environmental Solutions.
Philip Marotta, School District of Philadelphia.
Roberta T. Perry, Amtrak Environmental.
Richard Ross, School District of Philadelphia.
Thomas Sandin, EkoBalans.
Arleen Shulman, Pennsylvania Department of Environmental Protection (PA DEP).
Jienki Synn, DVRPC.
Christopher P. Thomas, Managing Director's Office, Philadelphia.

INTRODUCTIONS:

Mr. Morris Fine, Director of Air Management Services, Department of Public Health, City of Philadelphia, welcomed all in attendance. He thanked Amtrak for the use of the Chapel Room as a meeting venue. Mr. Fine concluded the introductory portion of the agenda by asserting that the Diesel Difference initiative is exploring several new fronts, which were discussed throughout subsequent portions of the meeting.

CITY OF PHILADLPHIA PA DEP GRANT:

Ms. April Birnbaum, Air Management Services, announced that the Office of Fleet Management, City of Philadelphia, will submit an application to the Pennsylvania Department of Environmental Protection's Diesel Retrofit Demonstration Project grant program. The application proposes the installation of diesel oxidation catalysts on twenty-nine vehicles from the Departments of Water and Aviation. Ms. Arleen Shulman, of the PA DEP, informed the Workgroup that October 10, 2003 began the 90-day period following the entrance of VEPCO's consent order into Court. She expects the VEPCO settlement to total approximately $750,000. Once attained, this settlement will fund the selected Diesel Retrofit Demonstration Projects throughout the Commonwealth of Pennsylvania. Notification of project selection will likely occur in the spring of 2004.

CLEAN AIR COUNCIL NON-MONETARY RECOGNITION PROGRAM:

Mr. Eric Cheung of the Clean Air Council/Clean Cities Program updated the Working Group as to the status of the Clean Air Council Non-Monetary Recognition Program. This program promotes diesel retrofit and clean technology projects through non-monetary incentives, such as media coverage and outreach assistance. Mr. Cheung presented sample Diesel Difference logos, which he circulated amongst the group for suggestions. Ideas for improvement included the expansion of the three clouds situated above the cityscape into a larger sky area that incorporates the cityscape, and the addition of a picture of William Penn as a recognizable figure of Philadelphia. Mr. Cheung will continue to work on the logo, as well as the letterhead. He aims to complete these projects within two weeks. Mr. Cheung is also creating a Diesel Difference website that will initially link from the homepage of the Clean Air Council website.

Mr. Cheung proposed a kick off event to publicize implemented retrofit projects. Candidates for recognition include the Wissahickon, Lower Merion, and Philadelphia School Districts, SEPTA, and Amtrak. One issue that emerged was the concern of standardized recognition for different levels of commitment to the voluntary implementation of clean diesel technologies. As a result of this conversation, the Workgroup established a sub-committee to develop criteria for recognition. Chaired by Mr. John Hadalski, members of the sub-committee include Mr. Jack LeBeau, Ms. Arleen Shulman, Ms. Roberta Perry, Mr. Kirt Flowers, Mr. Ray Chalmers, Mr. Eric Cheung, Mr. Richard Ross, and Ms. April Birnbaum.

The issue also arose as to the continued absence of SEPTA at Diesel Difference Workgroup meetings. SEPTA is currently employing particulate traps on their buses without the use of ULSD: a technique which does not capitalize on the maximum emissions reduction benefit available from the technology. Numerous Workgroup members felt that SEPTA representatives need to be in attendance at future meetings and additional contact is necessary in order to ensure their presence.

CORPORATE SPONSORSHIP: CASE STUDY OF TEXAS' ADOPT-A-SCHOOL BUS PROGRAM

Ms. April Birnbaum introduced three potential areas of exploration for the Diesel Difference Workgroup. The first of these was a Corporate Sponsorship program crafted by the Texas Adopt-A-School Bus Program. Partnered with the Texas chapter of the American Lung Association, the Adopt-A-School Bus Program proposed a black-tie Milestone Gala Event, which costs at least $25,000 per invitation. The proceeds of this event are directly applied to the installation of clean diesel technologies on area school buses. Targeted sponsors included Citigroup, local radio stations, foundations, and other corporations who possess the capability to contribute. Accordingly, non-monetary incentives, such as logos, plaques, media attention, and membership on a steering committee, are key elements of the Corporate Sponsorship partnership.

Texas' Adopt-A-School Bus Program has also partnered with Ebby Home Realtors to form a Realtor Affinity Referral Program. If an Ebby Home Realtor client purchases or sells a home in a school district that participates in the Adopt-A-School Bus Program, they receive a cash rebate that ranges from $300 to $4000, depending upon the price of the transaction. Ebby also makes a donation to the Adopt-A-school Bus Program for every purchase or sell through the Realtor Affinity Referral Program. To learn more about these programs, please access the Adopt-A-School Bus website at
http://www.adopt-a-schoolbus.org.

MOBILE SOURCE EMISSIONS REDUCTION CREDITS FOR PENNSYLVANIA

The second area of exploration for the Diesel Difference Workgroup discussed by Ms. April Birnbaum was the notion of establishing a mobile source emissions reduction credit system for the Commonwealth of Pennsylvania. This system would be a voluntary, open- market trading program for credits generated by retrofitting vehicles with clean diesel technologies. Credits would be composed of emissions reductions that exceed reductions required by law. Thus, they would not be used to come into attainment in an area that is designated as "nonattainment" for a National Ambient Air Quality Standard.

The mechanism of trading would occur between retrofitted mobile sources, and stationary sources that wish to offset increased emissions from expansion of current pollution practices. Therefore, corporate growth would not be hampered by environmental compliance. Credits generated from mobile sources would have to be quantifiable, permanent, surplus, and enforceable. Clearly, this is a far more difficult endeavor for mobile sources than for stationary sources. As retrofit technology currently focuses on the reduction of PM10 and NOx, these pollutants seem to be the most obvious choice for trading.

One of the primary issues surrounding the establishment of a Mobile Source Emissions Reduction Credit system for Pennsylvania is the economic viability of such a program. Undoubtedly, credits do not retain a value if the market for them does not exist. Also, the number of credits that could be pooled from diesel retrofit pilot projects may not be enough to make the endeavor worthwhile. Further analysis is needed in order to determine the program's feasibility.

STATE OF PENNSYLVANIA TAX CREDIT FOR EPA VERIFIED RETROFIT TECHNOLOGIES: MODEL OF OREGON'S "POLLUTION CONTROL" FACILITY CREDIT

The third area of exploration for the Diesel Difference Workgroup described by Ms. April Birnbaum was the idea of a State of Pennsylvania Tax Credit for EPA Verified Retrofit Technologies, as modeled after the State of Oregon's "Pollution Control" Facility Credit. Since January 2000, the State of Oregon has offered a thirty-five percent tax reimbursement credit for state taxpayers who purchase a "pollution control facility." A "pollution control facility" is defined as any equipment or device that is used to reduce or control air pollution, which includes EPA verified retrofit technologies. The tax credit was formed from the alteration of an existing environmental compliance reimbursement credit that dates to the 1970s.

One issue to consider in the application of the Oregon tax credit model for use in Pennsylvania is that to qualify for reimbursement, your pollution control facility must remain in the state where the credit was redeemed. Due to Pennsylvania's proximity to other states, we would need to target fleets that are confined to Pennsylvania and pay state taxes. Despite its ingenuity, Oregon has yet to receive any applications for the tax credit reimbursement. Nevertheless, the State is hoping to improve upon its utilization as we approach more stringent regulations in 2006. For more information, contact the Oregon Department of Environmental Quality at http://www.deq.state.or.us/aq/factsheets/cleandieselretrofit_taxcredit.pdf.

FEEDBACK ON AREAS OF EXPLORATION

After hearing the three areas of exploration, the Working Group identified a need to formulate a list of companies with "deep pockets" to target for possible corporate sponsorship. The question arose as to what the Diesel Difference would and could do with the money received from such a partnership. It became clear that we need to decide if we want to be our own 501c3 or link the group to an exiting not-for-profit organization, like the Clean Air Council. Accordingly, the issue of organizational structure will be added to next month's Diesel Difference Working Group meeting agenda.

In response, Ms. Arlene Shulman motioned to form four adhoc working groups:
1. Committee on Criteria.
2. Committee on Mobile Source Emissions Reduction Credits.
3. Committee on Tax Credits.
4. Committee on Organizational Structure.
These groups are to report back to the Working Group at large by the first of the year, indicating whether to proceed and under what conditions. Ms. Fran Carlini seconded this motion, which was tabled for discussion at the next meeting.

FUNDRAISING UPDATE

Ms. April Birnbaum discussed the status of grant funding for retrofit programs. The Clean Fuels Formula Grant created by TEA-21 was never funded. However, the Toyota Settlement grant application process will most likely begin sometime in early to mid-spring next year. Finally, the EPA Office of Environmental Justice Small Grants Program has yet to be updated for FY 2004 (October 1, 2003-Septmeber 30, 2004).

HYDROCARBON SPECIATION FROM PURINOX PROJECTS

Mr. Morris Fine spoke on the issue of increased levels of hydrocarbons resulting from proposed PuriNOx demonstration projects. He stated that any increases due to these projects would be de minimus in nature.

FOOD FOR FUTURE MEETINGS

Mr. Morris Fine asked the Workgroup if anyone would like to provide refreshments for the coming Workgroup meetings. If your organization would like to contribute, please contact Ms. April Birnbaum at (215) 685-9425 and/or at April.Birnbaum@phila.gov, of your interest in participating.

NEXT MEETING AND LOCATION:

Mr. Kirt Flowers volunteered the 30th Street Rail Station as a venue for next month's Diesel Difference Working Group Meeting. Those in attendance agreed upon Monday, November 17th as an appropriate date. The meeting will take place in the Chapel Room from approximately 10 AM until 12 PM. Please assemble at the Information Desk, where Amtrak personnel will escort you to the meeting room.