Gommittee Agenda p^e:Deciember 8,2005
Agenda ttemNOi.8

County of Santa Clara
Office of the County Executive

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Office of Budget and Analysis
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FGOC-CE03 120805

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

DATE:

December 8, 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

RECOMMENDED ACTION

Accept status report on advancement ofFuel Cell Initiative adopted by the Board on September 14, 2004
FISCAL TMPTJCATTONS

Acceptance of this report will not impact the General Fimd. It is anticipated that future funding to support this effort will
come from grants, earmarks, settlements that specify alternative energy use, and other forms of outside funding.

Board of Supervisors: Donald F. Gage, Bianc'a'Alvarado, Pete MeHugh,Jim B'eail, Liz Kniss
County Executive: Peter Kutras Jr.

Gornmlttee Agenda Date:December 8,2005
Agenda Kem Npi 8

REASONS FOR RECOMMENDATION

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 Planning. The last status report was submitted to the
Board on September 13, 2005, as part of the Finance and Government Operations Committee report.
The FY 2006 Federal Earmark request, submitted by Representative Mike Honda, has been included in the Energy and
Water Conference Report in the amount of $1.5 million. This bill was approved by the House of Representatives in
November and Senate approval, as well as Presidential signature, is anticipated.
The earmark request would 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, produce hydrogen for use in County fleet
vehicles, and be folly integrated into YSTs K-12 science education curriculum. An additional foel 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 earmark may require a local match of up to 50%. The Administration is exploring various options to meet the match
requirement.

AB 1660(Pavley), a measure supported by the Board of Supervisors to create an Energy-Efficient Vehicle Group
Purchase Program within the State Department of General Services, was signed by the Governor. AB 1660 requires the
department to establish an advisory committee with representatives from counties, cities, school boards, special districts,
community colleges, and state agencies that would negotiate contracts at the lowest possible purchasing price for
alternative foel and hybrid vehicles. It is thought that the County could realize substantial savings by pooling vehicle
purchases at a discounted price and reduce air pollution emissions by increasing the use of hybrid and altemative foel
vehicles.
VEHTCT.ES

The County of Santa Clara Fleet Management Department continues to focus on altemative foel vehicles and emissions
reductions. 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 129 Altemate Fuel
Vehicles.
Ultra-Low Sulfor Diesel HJLSDl

ULSD foel is required for PM traps and catalytic converters to function effectively. Refineries were required to have
nationwide production and availability by September 2006, however hurricane impacts to refineries have relaxed
production requirements. The EPA has provided a 45-day extension for terminals and retail outlets to comply with the
15ppm standard, moving the retail compliance date to October 15, 2006. County Fleet has been purchasing ULSD since
September 2005. The effects of reduced lubricity associated with the foel may have contributed to premature foel pump
failures in County buses. Fleet is closely monitoring the effects of the foel going forward.
Retrofit Devices

Board of Supervisprs; Donald F. Gage,.BlaiicaAlvarad'p. Pete firtcHugh,Jlifr/Beail, LizKnIss
County Executive; Peter Kutras Jr.

Gpmmittee Agenda Date:December 8,2005

Agenda Item tidi8
15 of 22 catalytic converters were installed on County vehicles. Installation took place November 11 to November 13,
2005. Installation and parts were billed direct to Bay Area Air Quality Management District(BAAQMD)under the
BAAQMD Particulate Matter(PMIO)retrofit grant program guidelines. Remaining installations will occur prior to
December 2005.

Roads Department staff began working with Air Board staff in August 2005 to determine ifPM Retrofit Program grants
were available. Air Board staff submitted a finalized contract to Roads on October 12, 2005 and the Roads Department
submitted a completed Diesel PMIO Retrofit Program contract to the Air Board on October 19, 2005. While the current
amount of this grant is only $3,000, Air Board representatives urged Roads Department staff to prepare and submit this
contract as a placeholder prior to all new requests being routed to the Carl Moyer Program.
While all of the $2 million allocated to the Diesel PM Retrofit Program has been awarded by the Air Board, it is
anticipated that current grant recipients may return a portion of their grant funds as unexpended, primarily due to using
less expensive retrofit strategies. Should some grant fimds be returned to the Air Board, these returned dollars will be
reallocated to the Roads Department contract through an amendment by the Air Board.
BAAQMD funds for PMIO retrofits for trucks have been exhausted, and requests are now being transferred to the Carl
Moyer Grant Program.

Data-loggers were acquired on loan, free of charge to the County, so that Fleet could install the devices on the Roads
and Airport Department equipment. Fleet is currently working to record information needed to evaluate best emission
reduction strategy for this equipment. Grant funding for the Roads and Airports Department is likely. At present the
Roads and Airports Department has 110 vehicles that will be affected by emission control strategies.
SIGNIFICANT EVENTS ATTENDED BY FLEET MANAGEMENT

August 15, 2005:

California Air Pollution Control Officer's Association conference; Diesel Emissions Reduction for Public Agency and
Utility Fleets.The two day conference addressed diesel reduction methodology and included re-powering diesel engines
to natural gas, retrofit devices to trap particulate matter pollution, and diesel fiiel alternatives such as bio-diesel,
emulsified fuel and ultra-low sulfiir diesel. Speakers included various vendors, California Air Resource Board members,
and representatives fi-om the Bay Area Air Quality Management District. Information and analysis of altematives and
available grant funds validated department decisions to pursue grant funds for retrofit catalytic trap devices to best
reduce emissions on current fleet. Conference was attended by Fleet Management and the Roads and Airports
Department.

August 22, 2005:

Communication received fi-om Bay Area Air Quality Management District regarding Vehicle Incentive Program for
FY07. Program reflects similar opportunity from FY06; S2,000.00/vehicle hybrid rebate. Fleet Management intends to
pursue this grant based on approved vehicle replacement purchases for FY07.
August 23, 2005:

Board of Supervisors:Donald F. edge,.BIancaAivaradp, Pete R/lcHugh, Jllfi:Deal!, LIzKriiss
.CohntyExecutivesRhterKutras J

Gommittee ftgenaa Date:December 8,2005
Agenda ttem N0V8

CalTrans hosted a grant workshop in Oakland. Four grant package opportunities were outlined: Environmental Justice,
Community Based Transportation Planning, Partnership Plarining, and Transit Planning. For purposes of stationary
hydrogen fuel cell as altemative power source for the County of Santa Clara, Fleet Management recommended the
Environmental Justice Grant to the Office of Budget and Analysis. Fleet assisted in writing an application for this grant.
August 24, 2005:

A response was provided to Gwen Mitchell, Director of the Office ofPublic Affairs, for information relative to County

fleet and fuel consumption. Information was sent to the media and a phone interview with the Fleet Manager occurred.
No additional actions resulted after the interview. A reporter mentioned that the Coimty had a high ratio of altemative
fuel vehicles, and below average fuel consumption, relative to other municipalities.
August 25, 2005:

The Fleet Manager attended a forum at the Califomia Air Resource Board(CARB)to discuss implications of South
Coast Fleet Rules considered for adoption in the Bay Area. The mles specifically pertained to requirements ofzero
emissions street sweepers and trash trucks that would affect the Roads and Airports Department. CARB has always been
fiiel neutral in pursuit of fleet emissions reductions. Recently, the South Coast mles left sweepers and garbage tracks in
Long Beach out of service during a severe natural gas shortage.
September 6-10,2005:

Communications transpired with General Motors and Ford Motor Company Fuel Cell vehicle representatives. The
County's letter of intent to acquire a demonstration fuel cell vehicle was received by Original Equipment Manufacturers
(OEM),partners ofthe Califomia Fuel Cell Partnership. The Ford Motor Company has a medium duty bus available and
will consider the County for future light duty vehicles. General Motors anticipates choosing a demonstration partner in
early 2007, based on availability of technology, and will continue communications with the County.
September 16, 2005:

The Califomia Air Resource Board voted not to adopt South Coast rales, pertaining to zero emission sweepers and
garbage tracks, for the Bay Area.

September 16, 2005:

Sustainable Silicon Valley Educational Forum; Califomia Fuel Cell Partnership presentation. Attended by Fleet
Management and Building Operations, the presentation included a fiiel cell vehicle overview and subsequent question
and answer session.

September 30, 2005:

Califomia Fuel Cell Partnership Road Rally; vehicle demonstration at San Jose State University campus. The rally had
representatives from all OEM partners and provided an opportunity to advertise the County's letter of intent to acquire a
fuel cell demonstration vehicle.

October 26, 2005:

■ Board ofBupervisprs: Donald F. Gage, Bianca Alvarado, Pete McHugh,Jinii Beall, Liz Kniss
Ddunty Executive: Peter Kutras Jr.

Cbmmfttee Agenda Date:December 8,2005

Agenda Kerti No.8

West Valley College Center for Advanced Transportation Technology;"Change the Future" conference to highlight
hydrogen fuel cell vehicles. Presenters included the California Fuel Cell Partnership, California Air Resource Board, and
the Santa Clara Valley Transportation Authority. Topics included a review of the California Hydrogen Highway, new
hydrogen station construction in Menlo Park and the availability of hydrogen demonstration vehicle grants from CARB
in 2006. As a result of attending this meeting, the Fleet Manager was invited to a grant workshop at the Air Resource
Board on October 28, 2005.
October 28,2005;

Air Resource Board Grant workshop; request for input at California Hydrogen Highway(SB76) workshop. SB76
provides $6.5 million for state sponsored hydrogen demonstration projects. OEM vendors and hydrogen station
engineers attended the workshop to"discuss how CARB should develop an ITB (Invitation to Bid)for hydrogen vehicles
and hydrogen fuel stations. CARB intends to purchase vehicles and loan them to end users through a grant program. The
County would be an eligible user.
November 22, 2005:

Bay Area Air Quality Management District(BAAQMD)Grant Workshop; Carl Moyer Program Grants to Reduce
Diesel Emissions held at the Santa Clara Valley Transportation Agency auditorium. Approximately $2.5 million was
announced as available for next year. Grant applications are due by December 22,2005. Three program projects for
diesel equipment: Repower-changing engines to yield emissions reductions greater than 15%; Retrofit - install
CARB-verified device to reduce emissions greater than 15%;Purchase new vehicle - engine must be at least 30%
cleaner than the normal baseline standard for new engines. Applications will receiver higher credit when vehicles
operate in AB 1390 areas (high pollution areas designated by CARB). AB 1390 identified areas will be listed on the
BAAQMD web site on December 10, 2005.

All opportunities listed are ineligible when legislation is passed for requirement of emission reductions. To circumvent
loss of grant eligibility. Fleet Management intends to apply for several on-road engine retrofits as the department will
have met the 20% required retrofits.
BAAQMD states that through 2012, Carl Moyer Grant funds will increase from $2.5 million to $10 million annually.
Next year's program will include Fleet Modernization, an opportunity to replace older vehicles with grant funding. This
will be a primary focus for the department.

The Roads Department attended this workshop and is communicating with Fleet Management to apply for grant funds as
well.

BACKGROUND

The following chronological history provides a summary of activities in support offuel 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 Planning Grant submitted

n Board of Supervisors: Dphald F. Gage, Blanca Alvaradd, Pete McHugh,Jim Beall, Liz Kriiss
.Gourity Executive: Peter kutras Jr.

Committee Agenda Date: December 8,2005
Agenda item Ndi 8

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 Cormty Fuel Ceil Working Group by Chevron Texaco and FuelCell Energy,Inc.
03/01/05 - Administration submitted $2.5 million Earmark request
03/01/05 - Board accepted quarterley status report
04/01/05 - Presentation to County Fuel Cell Working Group by Ion America
04/15/05 - Presentation to County Fuel Cell Working Group by Plugpower Fuel Cell Systems

04/19/05 - Board accepted 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-powered 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 ofinterest to acquire a fuel cell vehicle submitted to OEM (Operating Equipment Manufacturers)
Members of the California Fuel Cell Partnership

08/15/05 - CAPCO County Administrators -sponsored conference regarding Particulate Matter emissions attended by
Fleet Manager and Roads Department
08/23/05 - Caltrans-sponsored conference regarding available grant funds attended by Fleet Manager
08/25/05 - California Air Resources Board Forum

09/13/05 - Board accepted quarterly status report
09/16/05 - Sustainable Silicon Valley Educational Forum; California Fuel Cell Partnership presentation
09/30/05 - California Fuel Cell Partnership Road Rally at San Jose State University campus
10/14/05 - Application for Caltrans Planning Grant submitted
10/26/05 - West Valley College Center for Advanced Transportation Technology "Change the Future" conference
10/28/05 - Air Resource Board Grant workshop

'Board ofBupemsprs:,Dpnajd B/Gage.B
■County'ExecutiyeiiPPtef ^

Pete MclHugh,jirti B.eall, LitKniss

e&minittee Agenda Date '. December 8,200^
Agenda Item NOi8

11/22/05 - BAAQMD grant workshop
12/8/05 - Quarterly Status Report to Finanee and Government Operations Committee
ATTACHMENTS

•Fuel Cell Initiative

Board of Supervisors: Donald F, Gaga, Blanca Aivarado, Pete McHugh, Jim Beali, Liz Kniss
County Executive: Peter Kutras Jr.