Federal Register, Volume 74, Number 9, January 14, 2009, Pages 1871-2292 Page: 1,909
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Federal Register/Vol. 74, No. 9/Wednesday, January 14, 2009/Rules and Regulations
Response: We agree that for the
Increment of Progress SIP revision, the
amount of actual TERP reductions was
less than the projections. Because of this
experience, we worked with the State to
revise the methodology for estimating
emission reductions in this attainment
demonstration SIP. The revised
methodology uses assumptions that are
more conservative. Specifically, the
average project life was increased by
40% and the cost effectiveness was
reduced by slightly more than 51%. The
formula now relies upon the following
assumptions: $6000/ton, 250 days/yr
operation and a 7-year project life.
Using these revised assumptions, the
TERP emission reduction projections
relied upon in the demonstration
modeling and the WOE are greatly
reduced. Increasing the project life has
the effect of reducing the emission
reductions assumed in any given year.
The cut in the revised cost-effectiveness
assumption is intended to address,
among other things, the commenters'
concerns about there being fewer
reductions per dollar spent each
succeeding year.
For comparison, on January 26, 2007,
the cost effectiveness of TERP projects
completed in DFW averaged $3730.24/
ton; by September 23, 2007, DFW
projects averaged $3743.59/ton; and by
April 2, 2008, DFW projects averaged
$3959/ton. California's experience with
the Carl Moyer program 2 has achieved
emissions reductions at an average cost
of $3900/ton through October 2006. We
believe the revised cost effectiveness of
$6000/ton provides room for the
increase in cost/ton that we are seeing
in the DFW area.
In its May 2007 SIP revision, TCEQ
indicated as a weight of evidence (WOE)
measure that additional TERP
reductions were possible if additional
monies were appropriated by the
legislature for the 2008/2009 legislature.
House Bill 1 signed by the Governor on
July 15, 2007, appropriated to TCEQ,
TERP funds of $297,144,243 for fiscal
years (FYs) 2008/2009. In the April 23,
2008 submittal, relying upon these
additional appropriated monies, TCEQ
projected that the TERP could
potentially achieve an additional 14.2
tpd of NOx emissions reductions. Since
these emissions reductions were not
available early enough to include as
control measures in the modeling, their
impact on the DFW area's air quality
was instead predicted by EPA, using
sensitivity modeling runs, to estimate
2 The Carl Moyer Program 2006 Status Report is
in the docket for this rulemaking and can be viewedat http://www.arb.ca.gov/msprog/moyer/status/
2006status_report.pdf.the ppb change on the monitors in the
modeling-based weight of evidence
(WOE) analysis.
To achieve the projected additional
14.2 tpd of NOx emissions reductions
from TERP, using the revised TERP
methodology, the Texas legislature
needed to appropriate to the TCEQ,
sufficient FY2008 and FY2009 3 TERP
funds for the TCEQ to allocate a total of
$149,100,0004 to the DFW area for
TERP Emission Reduction Incentive
Grant (ERIG) projects; this amount does
not include the funds required to
achieve the IOP shortfall.5 TCEQ
received a sufficient amount of TERP
monies to have available $188,475,000
to achieve the IOP SIP shortfall
($39,375,000) and achieve an additional
14.2 tpd ($149,100,000) in 2008 and
2009.
In the April 2008 submittal, the TCEQ
posited that it could achieve the
additional 14.2 tpd of TERP NOx
reductions by spending in the DFW area
50% of the FY2008 TERP funds and
70% of the FY2009 TERP funds.
Whether funds are spent in exactly
these percentages each year however, is
not the issue; the essential point is that
TCEQ enters into TERP grant contracts
worth at least $149,100,000 in the DFW
area for projects to achieve 14.2 tpd in
calendar years 2008 and early 2009.
TCEQ roughly split in half for each
fiscal year, the $297,144,243
appropriated TERP funds-
$148,572,121.50. Of this
$148,572,121.50 "split," TCEQ used
approximately $40 million for other
TERP programs, including rebate grants
and FY2007 unfunded TERP
applications, including the IOP SIP
shortfall. EPA notes that the IOP
shortfall has now been met. Considering
the factors meant that TCEQ had
approximately $106,000,000 FY2008
TERP monies for the FY2008 to achieve
additional reductions beyond those
considered in the May 2007 SIP
submission through ERIG projects in
TERP-eligible counties. Applications
submitted to TCEQ during the FY2008
round of project applications totaled
approximately $94.5 million for the
DFW area. Of these applications
however, it appears from the draft
September Report that $51,532,511.79
have been selected for funding.6
3 The TCEQ fiscal year runs from September 1
through August 31.
4tUsing the revised SIP credit methodology, each
ton costs (6000 x 250 x 7) -$10,500,000. Therefore,
14.2 x 10,500,000 = $149,100,000.
5 Using the revised SIP credit methodology: 3.75
tpd x $10,500,000 = $39,375,000 to correct the IOP
SIP shortfall.6 Per the TERP Biennial Report to the Texas
Legislature December 2008 draft, dated SeptemberAs a result, to achieve the 14.2 tpd
projection, TCEQ needs to enter into
FY2009 TERP grant contracts worth
$97,567,488.21 ($149,100,000 -
51,532,511.79 = $97,567,488.21). In
summary, after accounting for the tpd of
TERP NOx emissions reductions
obtained by the FY2008 grant contracts,
to obtain the remaining tpd of TERP
NOx emissions reductions to achieve a
total of 14.2 tpd as projected as part of
the WOE, the TCEQ would need to enter
into TERP grant contracts with DFW-
area applicants worth $149,100,000 for
projects to be completed as early as
possible in calendar 2009. Due to a
number of factors, including Hurricane
Ike, the TCEQ will begin its first round
of requests for funding from FY2009
TERP grant monies in December 2008.
For more information concerning the
timing of FY2009 TERP projects due to
Hurricane Ike, please see the
Supplemental TSD dated December
2008.
TERP has safeguards to ensure that
when funds are provided to grantees,
they must achieve the associated
reductions. Grantees are required to
track usage and report to the TCEQ
every six months; they must meet the
reporting requirements delineated in
their specific grant contract. TERP is
enforceable against the grant recipient.
Over the activity life of each TERP
grant-funded activity, the grant recipient
commits the generated emissions
reductions to the SIP. The recipient is
responsible for achieving the annual
and total NOx emissions reductions
within the eligible areas as defined in
the contract. Recipients will be required
to return all or a pro rata share of the
grant funds to the TCEQ if the emissions
reductions are not achieved.
EPA continues to carefully review the
biennial reports that TCEQ is required
to submit to the Legislature pursuant to
Texas Health and Safety Code, 386.057
and 386.116(d). The draft September
TERP Biennial Report to the Texas
Legislature indicates that 488 projects
have been selected for funding in the
DFW area, totaling $51,532,511.79 to
reduce an estimated 3.72 tpd in NOx
emissions beyond what was included in
the May 2007 modeling. Based upon the
draft September Report, the average
cost/ton for these projects increased to
$6710.13, versus the revised
methodology of $6000/ton. At this rate,
to achieve the 14.2 tpd in NOx
emissions reductions, the TCEQ must be
22, 2008. This draft was prepared using data from
mid-summer. The final report, due in December
2008, will incorporate all of the contracts awardedor pending to date. See the docket for this
rulemaking.1909
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United States. Office of the Federal Register. Federal Register, Volume 74, Number 9, January 14, 2009, Pages 1871-2292, periodical, January 14, 2009; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc132871/m1/46/: accessed March 29, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.