Committee Agenda Date: August 19,2005

Agendaitem No. 17

County of Santa Clara
Office of the County Executive

<C!

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Office of Budget and Analysis

FGOC-CE04 081905

Prepared by: Anne
Gendron-Thompson
Principal Budget and
Public Policy Analyst
DATE:

August 19, 2005

TO:

Supervisor Pete McHugh, Chairperson
Supervisor James T. Beall, Jr., Vice-Chairperson
Finance & Government Operations Committee

FROM:

Gary A. Graves

Chief Deputy County Executive
SUBJECT:

Quarterly Status Report on Fuel Cell Advancement Initiative Adopted by the Board of Supervisors on
September 14, 2004.

RECOMMENDED ACTION

Accept status report on advancement ofFuel Cell Initiative adopted by the Board on September 14, 2004.
ETSCAT. TMPETCATTONS

Board of Supervisprs;:Dohald F. eage,.Biahcd Aivatado, Pete McHugh,Jim Beall, Liz Ktiiss
pbunt/Executiyei-Pfeter.Kutra'sy

Commjttee'ftgenda Date: August 19;20Q5
Agerida-ltein No. 17

Acceptance of this report will not impact the General Fund. It is anticipated that any future funding to support this effort
will come from grants and other forms of outside funding.
REASONS FOR RECOMMENDATTON

This report is provided as an update on the progress that has been made toward the
advancement of fuel cell use in Santa Clara County in the areas of Legislation, Vehicles, Buildings and Plaiming. The
last status report to the Finance and Government Operations Committee was on April 6, 2005.
T.P.GTST.ATTON

The FY 2006 proposed Federal Earmark requests were approved by the full Board on February 28,2005. An Earmark
request for Fossil Energy Research and Development funds in the amount of $2,500,000 was submitted to Senators
Feinstein and Boxer and Congressman Honda on March 1, 2005, to fund fuel cell power generation demonstration
projects at Vasona County Park and at another County facility. The Vasona Park site would be co—located with the
Youth Science Institute (YSI). The fuel cell installation would generate power for a building to be constructed by YSI,
prodtice hydrogen for use in County fleet vehicles, and be fully integrated into YSI's K-12 science education
curriculrun. An additional fuel cell demonstration project site would be chosen, with potential sites including 24/7

facilities such as Elmwood Jail, the County's 911 Communications Center, or various Health and Hospital facilities. The
funding aimouncement for Earmark requests will be made sometime between October 2005 and March 2006.
Your Board has sent two support letters on AB 1660(Pavley). AB 1660 would require the State Department of General
Services to partner with counties, cities, and school districts to create a statewide government group purchase program
that would negotiate the lowest possible purchase price for alternative fuel and hybrid vehicles. This measure requires
the Director of General Services to establish an advisory committee consisting of representatives from organizations
included in this partnership, no later than April 1, 2006. The first letter ofsupport was sent to the Assembly
Appropriations Committee on May 3, 2005 and the second letter ofsupport was sent to the Senate Government
Modernization Committee on June 8, 2005. The bill is scheduled to be heard in the Senate Appropriations Committee on
August 15, 2005.
VEHICLES

The County of Santa Clara Fleet Management Department continues to focus on alternative fuel vehicles and emissions
reductions. An element of the strategic fleet plan for the department is to review pending legislation that will affect
future purchase decisions, as well as costs attributed to the current fleet to meet compliance standards.

The present County Fleet includes 39 Hybrid Vehicles, 50 Neighborhood Electric Vehicles, 26 Electric Forklifts and
Electric Taylor Dunn Carts and 9 Propane Forklifts. All are light duty for a total of 124 Alternate Fuel Vehicles.
Hvbrid Vehicles

Fleet Management was awarded a rebate in the amount of $10,000 from the Bay Area Air Quality Management
Department(BAAQMD)for purchasing hybrid vehicles. The Government Accormt Manager for Ford Motor Company
has notified Fleet Management that a Model Year 2006 Ford Escape Hybrid will be delivered to the County by August

Board of Supervisors;,Donald F. Gage,Blanpia Alvarado, Pete firlcHugh,Jim/Beali, Liz Kniss

:Goun1y Executive: Peter Kutras Jr. .

CommMee Agenda Date: August 19,2005

Agenda Item Nol 17
20, 2005.This particular model is one of the new Sport Utility Vehicle(SUV)style hybrid vehicles. We will have use of
the vehicle for demonstration to various County Departments.The Department of Environmental Health received grant
funds to purchase a vehicle to assist with the enforcement of waste tire disposal. The Department of Environmental
Health intends to purchase a hybrid vehicle and will consequently qualify for an additional $2,000 rebate.

The Roads Department has four hybrid vehicles (included in the count above) and has realized $8,000 in grant(rebate)
funds for purchasing these vehicles. While the Department is not currently purchasing any vehicles (due to budget

constraints). Roads Department staff have developed replacement plans which call for the procurement of only hybrid
vehicles when pool vehicles are retired and replaced. In addition, the Roads Department has eight SMART (electric)
vehicles.

Hvbrid Electric Vehicle Conference Call

On June 15, 2005, Fleet Management attended a conference call sponsored by the Center for a New American Dream.
The purpose of the call was to inform local officials, public and private purchasers, and fleet managers about ways to

incorporate new energy—efficient electric light duty vehicles in fleets. The call covered issues relevant to California
jurisdictions, including program and policy initiatives. This call was co-sponsored by the California Association of
Counties and the Union of Concerned Scientists. During the call, a variety of subjects was discussed, including a
discussion about the State Initiative(AB 1660)to expand the use of hybrids in public fleets and consolidating the

purchasing opportunities for local govenunents. The Califomia Air Resources Board and the California Department of
General Services hosted this portion of the call.

A vehicle lifecycle calculator will be available in September,2005 to assist fleet departments in comparing the cost of a
hybrid against standard vehicles by class. Hybrid sales continue to be strong and as a result, most manufacturers do not
offer fleet incentives. AB 1660 would allow for a more competitive bid process to generate lower costs to municipal
fleets.
Particulate Matter

The Califomia Environmental Protection Agency,in conjimction with the Califomia Air Resources Board(ARB), has
identified particulate matter(PM)pollution as one of Califomia's highest public health priorities. PM consists of small
liquid and solid particles suspended in the air. Particles smaller than 10 microns in size are known as PMIO.

The Legislature passed Senate Bill 656 in 2003 to reduce public exposure to PMIO. The legislation requires the ARB,in
consultation with local air pollution control and air quality management districts, to adopt a list of the most readily
available, feasible and cost-effective control measures that could be implemented by air districts to reduce PMIO. The
list of air district control measures was adopted by ARB on November 18, 2004. The ARB also developed a list of State
PM control measures for mobile and stationary sources, including measures planned for adoption as part of ARB's
Diesel Risk Reduction Plan.

Within the Diesel Risk Reduction Plan, both on-road and off-road diesel vehicles are identified as PMIO producers.

The County owns approximately 231 diesel vehicles: 200 Roads vehicles and 31 tracks and buses. The buses are used to
transport prisoners.

Engine manufaeturers are mandated to provide equipment that meets the new emissions requirements by 2007 model
year. It is estimated that the new standards will increase engine costs by $7,000 per vehicle.

Board of Supervisors: Donald F. Gage, Bianca Alvarado, Pete fdcHugh,Jim Beaii, Liz Kniss
County Executive: PeterRutras Jr..

Committee Agenda Date: Augu^ 19,2005
Agenda Item No. 17

A conference sponsored by ARB is scheduled for August 15,2005 to address pending legislation that is expected to
require existing diesel vehicles to meet new reduced PM emissions standards no later than January, 2007 by installing
retrofit devices. Retrofit devices are identified, tested and certified for compliance by ARB and BAAQMD. Selection of

catalytic exhaust versus Diesel Particulate Matter(DPM)traps is contingent on duty cycle, run time, idle time, and
exhaust temperature. In addition, the device must be compatible with the engine year, make and model.

Fleet Management, working in conjunction with BAAQMD and retrofit vendors, opted for the catalj^ic exhaust trap for
31 of its non—Roads vehicles. This system will be compliant for anticipated legislation. BAAQMD has awarded the
County $63,000 for 21 vehicles to be retrofitted with PM traps. BAAQMD has reserved another $80,000 for 10 other
Santa Clara County vehicles that are currently undergoing evaluation to determine which certified PM trap is required.
Santa Clara County has received letters of confirmation from both BAAQMD and the retrofit vendors that funds will be
paid by BAAQMD directly to the vendor on behalf of Santa Clara County to perform the retrofit work on those County
vehicles. Installation of the 31 retrofit devices will occur during September - December,2005.

The Roads Department is in the process of finalizing an application for submittal to BAAQMD for reimbursement of the
estimated $600,000 in retrofit costs of the 200 Roads diesel—fueled vehicles. It is anticipated that fiill reimbursement will
be possible through grant funding.

Ultra Low Sulfur Diesel(ULSD)fuel is required for PM traps to function effectively. Refineries are required to have
nationwide production and availability by September, 2006. Santa Clara County Fleet will have ULSD fuel by
September, 2005.
Hvdrogen-Fueled Demonstration Vehicle

An information—exchange workshop was hosted jointly by Santa Clara County and the California Fuel Cell Partnership
on May 6,2005. The workshop was held at the County Center at Charcot and was attended by elected officials,
administrators and planners from regional cities and counties. The workshop included a presentation by the Santa Clara
Valley Transportation Authority(VTA)of the Zero—Emission Bus Demonstration Program,information about
Califomia's Hydrogen fueling stations and demonstrations of Hydrogen Fuel Cell vehicles by DaimlerChrysler, Nissan,
and Toyota. Califomia currently has 16 Hydrogen Fueling Stations in operation throughout the State and another 5 in the
planning stages. At the fueling stations, liquid hydrogen is compressed, vaporized into a gas and then moved into a
separate tank for use in the three hydrogen—powered VTA buses. VTA has agreed to negotiate with Santa Clara County
for use of the fueling station to supply hydrogen for use in the Cormty's future demonstration vehicles.

The County's Fleet Manager,Dave Snow,has submitted a letter of intent to acquire a hydrogen fuel cell vehicle(HFCV)
for demonstration in the Coimty. The letter of intent was submitted to the Califomia Fuel Cell Partnership(CaFCP)on
July 21,2005. The CaFCP will forward the letter to eight HFCV manufacturers and continues to offer the County
support for participation in the Hydrogen Highway effort.

The CaFCP believes that Santa Clara County is an excellent candidate for a demonstration vehicle as there are currently

3 hydrogen refueling stations within 60 miles of the County, and 2 more within 120 miles. One is located in Santa Clara

County at 3990 Zanker Road in San Jose. The County has more than 40 Emergency Responders trained to handle
hydrogen vehicle and refueling issues. Community outreach programs and public awareness campaigns are imderway in

support of the VTA fuel cell bus demonstration.
BTnLDTNnS

Board dfSupetvisdrs: Donald F. Gage, BlancaAlvaradd, Pete McHugh,Jim Beaii, Dzkiiiss
Gbunti'Executive:-Peter Kutras Jr.

Gomniiftee flgehtia^ :Migu^ 19,2005

Agenda item No.17
Information-exchange meetings were held on April 1 and April 15, 2005.

On April 1, 2005, representatives from Ion America shared information about their commercial solid-state systems that
will produce reliable power for buildings at a competitive cost when compared to grid power. This company has several
5 kW systems working as demonstration projects that produce electricity for the company's building and hydrogen for its
vehicles.

On April 15, 2005, a representative from Plugpower Fuel Cell Systems shared information about hydrogen-powered
back-up power sources for buildings. The hydrogen-powered back-up generators would replace lead acid batteries of
existing back-up generators. The Facilities and Fleet Department is conducting a cost-benefit analysis of the product in
comparison to the County's existing back-up generators.
PLANNING

The Administration received a letter on July 18, 2005,from the State Department of Transportation(CALTRANS)
explaining that Santa Clara Coimty was not selected for grant funding for the planning of a fuel cell demonstration
project and education program. The Administration plans to submit a proposal for the FY 2007 grant cycle.
Without fiorther Board direction, the Administration does not have the authority to utilize General Frmd resources in this
effort. As a result, little progress can be made if grant funds are not received.
BACKGROUND

The following chronological history provides a summary of activities in support of fuel cell advancement since the
adoption of the initiative.

09/14/04 - Board adopted Santa Clara County Fuel Cell Advancement Initiative (Attachment A)
10/15/04 - Application for CALTRANS Plaiming Grant submitted
10/19/04 - Board approved Work Plan framework

01/09/05 - Mercury News Article -"A New Energy, Silicon Valley players are on the hunt for breakthroughs in
alternative-power technology—and venture capitalists are taking notice"

01/28/05 - Presentation to Fuel Cell Working Group by Chevron Texaco and FuelCell Energy,Inc.
03/01/05 - Board approved status report

03/01/05 - Administration submitted $2.5 million Earmark request
04/01/05 - Presentation to Fuel Cell Working Group by ION America
04/15/05 - Presentation to Fuel Cell Working Group by Plugpower

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete Mchiugh,Jlm Beail, LIzKnIss

Gounly Executive:,P,etef kutras-Jr..

Committee Agenda Date: August 19,2005
Agenda item No. 17

Fuel Cell Systems

04/19/05 - Board approved status report and delegated authority to Facilities and Fleet to submit letters of interest to
acquire a demonstration fuel cell vehicle

05/06/05 - Joint presentation — County of Santa Clara and California Fuel Cell Partnership presented hydrogen
demonstration vehicles and information to regional public and private participants
05/23/05 - Mercury News Article -"Jump-starting the Hydrogen Car Dream"
07/18/05 - Received rejection letter from CALTRANS Planning Grant

07/21/05 - Letter of interest to acquire a fuel cell vehicle submitted to OEM (Operating Equipment Manufacturers)
Members of the California Fuel Cell Partnership
08/19/05 - Status report to FGOC
ATTACHMENTS

Fuel Cell Advancement Initiative

Board dfSupetvisorsiDoh'aid F/Gage..'Biancd*Alvarad6, Pete McHugh,Jim'Beall, LizKriiss
Gounty Executive: Peter Kutras Jr.