BOARD MEETING

                           STATE OF CALIFORNIA

                           AIR RESOURCES BOARD











               CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

                              1001 I STREET

                          COASTAL HEARING ROOM

                              SECOND FLOOR

                         SACRAMENTO, CALIFORNIA









                        WEDNESDAY, JUNE 28, 2001

                                9:00 A.M.









    JAMES F. PETERS, CSR, RPR
       CERTIFIED SHORTHAND REPORTER
       LICENSE NUMBER 10063

    JANET NICOL, CSR
       CERTIFIED SHORTHAND REPORTING
       LICENSE NUMBER 9764


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                                                               ii

                               APPEARANCES



    BOARD MEMBERS

    Dr. Allan Lloyd, Chairperson

    Mrs. Barbara Riordan

    Dr. William Burke

    Mr. Joseph Calhoun

    Ms. Dorene D'Adamo

    Professor Hugh Friedman

    Dr. William Friedman

    Mr. Matthew McKinnon

    Supervisor Ron Roberts



    STAFF

    Mr. Mike Kenny, Executive Officer

    Mr. Tom Cackette, Deputy Executive Officer

    Mr. Mike Scheible, Deputy Executive Officer

    Ms. Lynn Terry, Deputy Executive Office

    Mr. Michael Benjamin, Manager, Emission Inventory Systems
    Section

    Analisa Bevan, Manager, ZEV Implementation Section

    Mr. Richard Bode, Chief, Health and Exposure Assessment
    Branch

    Mr. Richard Corey, Chief, Research Division

    Mr. Bart Croes, Chief, Research Division

    Mr. Bob Cross, Chief, Mobile Source Control Division


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                                                               iii

                          APPEARANCES CONTINUED

    STAFF CONTINUED

    Ms. Victoria Davis, Staff Counsel

    Ms. Deborah Drechsler, Ph.D, Research Division

    Ms. Krista Eley, Mobile Source Control Division

    Ms. Diane Johnston, Senior Staff Counsel, Office of Legal
    Affairs

    Mr. Jack Kitowski, Chief, On-Roads Control Branch

    Ms. Leslie Krinsk, Senior Staff Counsel

    Ms. Eileen McCauley, Manager, Atmospheric Processes
    Research Section

    Mr. Bart Ostro, Office of Environmental Health Hazard
    Assessment

    Ms. Gayle Sweigert, Mobile Source Control Division


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                                                               iv

                                  INDEX

                                                           Page


    Proceedings                                            1

    Roll Call                                              1

    Item 01-5-1                                            3

         Executive Officer Kenny                           4
         Staff Presentation                                8
         Mr. Rich Bell                                     52
         Mr. Bob Cassidy                                   69
         Mr. Michael Wolterman                             82
         Mr. Tom Austin                                    95
         Mr. Greg Hanssen                                  115
         Mr. Craig Toepfer                                 127
         Mr. David Packard                                 135
         Mr. Thomas Dowling                                141
         Mr. Michael Coates                                144
         Mr. Tim Hastrup                                   145
         Mr. Steve Heckeroth                               148
         Mr. Ken Smith                                     151
         Mr. David Burch                                   154
         Mr. Ted Holcombe                                  159
         Mr. Mickey Oros                                   160
         Mr. Hans-Henning Judek                            163
         Mr. Dale Foster                                   164
         Mr. Alec Brooks                                   173
         Board Discussion                                  191
         Vote                                              203

    Item 01-5-6                                            206

         Vote                                              204

    Item 01-5-2                                            205

         Executive Officer Kenny                           206
         Dr. Deborah Drechsler                             207
         Dr. Daniel Greenbaum                              226
         Questions and Answers                             246
         Mr. Brian Lamb                                    253


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                                                               v

                             INDEX CONTINUED
                                                           Page


    Item 01-5-3                                            260

         Executive Officer Kenny                           261
         Mr. Jim Pederson                                  262
         Board Discussion                                  280

    Item 01-5-5                                            289

         Executive Officer Kenny                           289
         Ms. Theresa Najita                                290
         Ms. Kati Buehler                                  294
         Mr. Joe Carranko                                  296
         Mr. Jerry Maltby                                  309
         Mr. Chris Churchill                               320
         Mr. Kurt Rasmussen                                322
         Mr. Jerry Murdock                                 325

    Item 01-5-4                                            335

         Executive Officer Kenny                           336
         Mr. Bruce Oulrey                                  337
         Ms. Barbara Lee                                   340
         Mr. Wayne Morgan                                  348

    Adjournment                                            355
    Reporter's Certificates                                356,


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                                                               1

 1                             PROCEEDINGS

 2            CHAIRPERSON LLOYD:  Good morning.  The June 28th,

 3  2001 public meeting of the Air Resources Board will now

 4  come to order.  As you'll notice, I guess we've get some

 5  change of positions today, so it will take us a little

 6  while to get used to that.

 7            Superviser DeSaulnier, would you lead us in the

 8  pledge of allegiance.

 9            BOARD MEMBER DeSAULNIER:  I'd be happy to, Mr.

10  Chairman.

11            (Thereupon the Pledge of Allegiance was led

12            by Supervisor DeSaulnier.)

13            CHAIRPERSON LLOYD:  Will the Clerk of the Board,

14  please call the roll.

15            CLERK OF THE BOARD KAVAN:  Dr. Burke?

16            BOARD MEMBER BURKE:  Present.

17            CLERK OF THE BOARD KAVAN:  Mr. Calhoun?

18            Ms. D'Adamo?

19            Supervisor DeSaulnier?

20            BOARD MEMBER DeSAULNIER:  Present.

21            CLERK OF THE BOARD KAVAN:  Professor Friedman?

22            BOARD MEMBER HUGH FRIEDMAN:  Here.

23            CLERK OF THE BOARD KAVAN:  Dr. Friedman?

24            BOARD MEMBER WILLIAM FRIEDMAN:  Here.

25            CLERK OF THE BOARD KAVAN:  Mr. McKinnon?


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 1            BOARD MEMBER McKINNON:  Here.

 2            CLERK OF THE BOARD KAVAN:  Supervisor Patrick?

 3            Mrs. Riordan?

 4            BOARD MEMBER RIORDAN:  Here.

 5            CLERK OF THE BOARD KAVAN:  Supervisor Roberts?

 6            Chairman Lloyd?

 7            CHAIRPERSON LLOYD:  Here.

 8            We are going to have a change in the agenda.  The

 9  first item we will consider will be the standardization of

10  the charges.  Before that, I'd just -- my colleagues here,

11  hopefully Bill is going to hand out a paper on diesel

12  emissions that Tom and I prepared with enormous assistance

13  from our very talented staff.  And we gave that yesterday.

14  It has a critical review of the Air and Waste Management

15  Association in Orlando.

16            I think you'll find this useful, as some of the

17  key issues, and also a good place where you can get a lot

18  of information readily.

19            But as you'll notice from the acknowledgements

20  there, we have outstanding contributions from the staff,

21  literally without whose help, it never would have been

22  finished.

23            It's on, but it isn't coming across very much.

24            Is that any better?

25            I don't know whether there are any other board


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 1  members who want to say anything before we start?

 2            With that then we'll commence with the first item

 3  on the agenda, which is 01-5-1, Public Hearing to Consider

 4  Amendments to the California Zero Emission Vehicle

 5  Regulations Regarding The Treatment Of Majority-Owned

 6  Small or Intermediate Volume Manufactures and

 7  Infrastructure Standardization.

 8            We turn to consideration of the issues related to

 9  the success of the Zero Emission Vehicle Program.  As a

10  Board, we voted unanimously last September and again this

11  January to affirm the ZEV Program and its importance to

12  California's long-term air quality efforts.

13            I am personally very committed to the success of

14  the program, and know that this reflects the commitment of

15  all the Board Members.  Welcome, Didi.  Progress in

16  attaining critical public health, global climate change,

17  and energy diversity goals will be greatly enhanced

18  through the use of ZEV technologies, and this is basically

19  a family of technologies.

20            Can you hear it?

21            I can't control the volume.

22            Thank you.  I'll swallow it.

23            (Laughter.)

24            CHAIRPERSON LLOYD:  Few programs that this board

25  has considered have the ability to provide such


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 1  far-reaching and long-term benefits for California.  Last

 2  January this board approved changes to the ZEV, to the

 3  Zero Emission Vehicle Regulation that reduced the number

 4  of ZEVs required for the near term, while increasing the

 5  number of ZEVs and advanced technology vehicles required

 6  in the long term.

 7            We took this action so that the long-term success

 8  of the ZEV Program could be assured, by providing

 9  additional time to address some of the near-term

10  implementation challenges facing the ZEV Program.

11            The Board directed staff to develop

12  recommendations and begin working on a number of issues.

13  Today, we will be considering staff proposals on two of

14  these issues.  We directed staff to investigate joint

15  ownership issues associated with the treatment of small

16  and intermediate volume manufacturers and standardization

17  of infrastructure for battery electric vehicles.

18            These two issues are important, because they have

19  the potential to directly impact the success of the ZEV

20  Program and public acceptance.

21            Mr. Kenny, will you lease begin the staff

22  presentation on this.

23            EXECUTIVE OFFICER KENNY:  Thank you, Mr. Chairman

24  and Members of the Board.

25            As Dr. Lloyd mentioned there, the issues included


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                                                               5

 1  in the Board item for your consideration.  First is the

 2  staff proposal that would result in a change in the way

 3  that production volumes and associated ZEV requirements

 4  are calculated for auto manufacturers that are majority

 5  owned by another manufacturer.

 6            Small volume manufacturers are not subject to ZEV

 7  requirements.  And intermediate volume manufacturers can

 8  satisfy their entire ZEV requirement with partial ZEVs.

 9  However, there have been a number of mergers and

10  consolidations in the industry over the last few years

11  that have made it increasingly more difficult to classify

12  manufacturers as small, intermediate or large volume, and

13  thus determine their ZEV production requirements.

14            The staff proposal that you will consider today

15  clarifies these relationships and ensures fair and

16  equitable treatment for all manufacturers.

17            The second issue that will be discussed today is

18  staff's proposal to standardize the charging

19  infrastructure for battery electric vehicles.  A concern

20  has been expressed with the current situation and its

21  impact on the success of the ZEV Program.  And this is

22  something that actually staff shares as a significant

23  concern.

24            Right now, we have slightly over 2,000 electric

25  vehicles on the road, but the manufacturers who have


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                                                               6

 1  leased these vehicles have used four different connectors

 2  after plugs in tandem with two different power transfer

 3  techniques.  The situation has not caused serious problems

 4  to date due to the small number of vehicles and the fact

 5  that most of the vehicles were placed with fleets.

 6            Fleets are not as dependent upon access to public

 7  charging as the retail consumer is.  However, we expect to

 8  see two changes over the next decade.  The number of

 9  battery electric vehicles will dramatically increase and

10  we will gradually move from a predominantly fleet based

11  market to a wider consumer market.

12            As a result the changes as approved by this Board

13  in January, staff estimates that the number of EVs will

14  increase to 4,000 by 2003 and increase from 4,000 between

15  the years 2003 and 2010.

16            The lack of charging standardization represents a

17  major implementation barrier with such a large number of

18  vehicles on the horizon.  Staff is concerned that

19  consumers will be very hesitant to embrace EV technology

20  and lease or purchase large numbers of EVs with different

21  charging technologies prevalent in the marketplace.

22            Achieving standardization involves some difficult

23  decisions for a government agency.  Both charging systems,

24  the conductive and the inductive, have undergone

25  considerable technological development.  Both have been


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                                                               7

 1  developed into commercial products that have provided EV

 2  drivers with the ability to safely and reliably charge

 3  their vehicles.

 4            If one is not familiar with the charging

 5  technologies, displays of the charging equipment have been

 6  brought by the industry representatives for viewing.

 7            We would have preferred for the market to have

 8  moved towards a single standard or for the industry to

 9  select one standard through a consensus process.  However,

10  little progress has been achieved over the last four

11  years.  The industry is evenly divided.  Each is committed

12  to the charging technology it is using and has invested

13  in.  There is no process to independently select the

14  charging system.  This leaves the difficult decision to

15  ARB or some other government agency.

16            Staff believes that this Board is the most

17  appropriate agency the make this decision, since we are

18  charged with ensuring the success of the ZEV Program.

19  Staff's proposal incorporates significant input that was

20  provided during the public process, which included a

21  public workshop as well as several stakeholder meetings.

22            Today staff will present their assessment and

23  recommendations on the need for standardization,

24  evaluation of charging systems and proposed regulations to

25  achieve standardization.


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                                                               8

 1            Krista Eley and Gayle Sweigert of the Mobile

 2  Source Control Division will now make the staff

 3  presentation.

 4            AIR POLLUTION SPECIALIST ELEY:  Thank you, Mr.

 5  Kenny.

 6            As you noted, there are two parts to the ZEV item

 7  we are presenting to the first part of the majority owned

 8  small or intermediate volume manufacturers.  Gayle

 9  Sweigert will be presenting the second part, electric

10  vehicle infrastructure standardization.

11            (Thereupon an overhead presentation was

12            presented as follows.)

13            AIR POLLUTION SPECIALIST ELEY:  This part of the

14  item, majority owned small or intermediate volume

15  manufacturers addresses auto manufacturers that partially

16  or wholly own other auto manufacturers.

17                               --o0o--

18            AIR POLLUTION SPECIALIST ELEY:  In the last three

19  or four years there's been a large amount of consolidation

20  among manufacturers.  As a result, it has become difficult

21  to determine whether companies should be considered

22  individual companies for the zero emission vehicle

23  requirements.

24            As such, staff believes there is a need to

25  clarify a manufacturer's volume status and ensure that all


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                                                               9

 1  manufacturers are treated equitably.

 2                               --o0o--

 3            AIR POLLUTION SPECIALIST ELEY:  On this slide are

 4  a few examples of auto companies that have consolidated in

 5  recent years, Mercedes Benz and Chrysler merged to form

 6  DaimlerChrysler.  Ford wholly owns Jaguar, Land Rover and

 7  Volvo, and partially owns Mazda.

 8            General Motors wholly owns Saab and partially

 9  owns' Suzuki and Subaru.  Volkswagen wholly owns

10  Rolls-Royce and Lamborghini.

11                               --o0o--

12            AIR POLLUTION SPECIALIST ELEY:  I'd like to

13  briefly provide you with some background information on

14  the vehicle volume classifications for purposes of ZEV

15  requirements.  A large volume manufacturer is defined as a

16  manufacturer with California annual sales of greater than

17  $60,000.

18            These large volume manufacturers must meet at

19  least 20 percent of the ZEV requirement with pure ZEVs and

20  may meet the remaining eight percent of the ZEV

21  requirement with 20 percent advanced technology partial

22  ZEVs or ATP ZEVs, and 60 percent partial ZEVs or PZEVs.

23            An Intermediate volume manufacturer is defined as

24  a manufacturer with California annual sales greater than

25  $4,500 and less that $60,000.  These intermediate


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 1  manufacturers may meet the ZEV requirement entirely with

 2  partial ZEVs.

 3            A small volume manufacturer or an independent low

 4  volume manufacturer is exempt from all ZEV requirements.

 5  The reason for providing less rigorous requirements for

 6  small and intermediate volume manufacturers is that

 7  smaller companies do not have the resources to develop new

 8  technology as quickly as larger companies.  Those

 9  manufacturers often wait for new technology to trickle

10  down from the large manufacturers.

11            In addition, the smaller companies often have

12  fewer vehicle models, which makes it more difficult to

13  comply with the requirements.

14                               --o0o--

15            AIR POLLUTION SPECIALIST ELEY:  Our current

16  approach to determine a manufacturer's vehicle volume

17  status is based on the principle of "Operationally

18  Independent."  This term "Operationally Independent" is

19  not defined in is ZEV regulations, resulting in a

20  principle that the somewhat uncertain, difficult to apply

21  and subject to individual interpretation.

22            Staff must interpret each new ownership

23  arrangement on a case-by-case basis.  For example, the

24  current vagueness of the term operationally independent

25  has even caused some question as to whether Chrysler and


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 1  Mercedes Benz could be considered operationally

 2  independent following their 1998 merger into one company.

 3            To ARB staff, this would be an obvious

 4  circumvention of the term, since neither company, Daimler

 5  Benz AG or Chrysler Corporation exists separately today.

 6            Nonetheless, this example demonstrates the need

 7  for clarity to ensure predictable and equitable treatment

 8  among the vehicle manufacturers.

 9                               --o0o--

10            AIR POLLUTION SPECIALIST ELEY:  The proposal we

11  are presenting today to define manufacturer volume and

12  multiple ownership situations is based on percent

13  ownership regardless of how operations are structured.

14  Where one company owns greater than 50 percent of another

15  company, their vehicle volumes would be combined and used

16  to determine the ZEV requirements.

17            To incorporate this into the ZEV regulations,

18  staff is proposing to modify the definitions of small and

19  intermediate volume manufacturers.  The proposed

20  definitions would take effect in 2006 to provide auto

21  makers four years of lead time to allow adjustment of

22  market plans.

23                               --o0o--

24            AIR POLLUTION SPECIALIST ELEY:  Here's an example

25  of how the proposal will affect a fictitious company


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 1  before and after the regulation.  This example assumes

 2  that manufacturers will fulfill their credits with 20

 3  percent pure ZEVs, 20 percent ATP ZEVs and 60 percent

 4  PZEVs.

 5            Before the Regulation, we have Company A, a large

 6  manufacturer and company B an intermediate volume

 7  manufacturer, recently purchased by Company A.  After the

 8  regulatory change is in place for the combined company,

 9  there's an eight percent increase of both pure ZEVs and

10  ATP ZEVs, a six percent decrease of PZEVs.

11                               --o0o--

12            AIR POLLUTION SPECIALIST ELEY:  The actual

13  proposal results in an increase of ZEVs required,

14  approximately 160, and an increase in ATP ZEVs required,

15  approximately 950 and a decrease in the number of partial

16  ZEVs required, approximately 4,400 per year.

17            Under current ownership arrangements, there are

18  two auto companies that are affected by this proposal,

19  Ford and Volkswagen.  The cost to Ford to implement this

20  change is 2.6 million for the first year in 2006.  The

21  cost to Volkswagen is less than $100,000.

22            Any future merger and acquisitions would also be

23  impacted by this clarification.  In addition, an emissions

24  impact analysis was performed by staff.  Due to the small

25  increase in ZEVs and advanced technology PZEVs, there is a


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 1  minimal emissions benefit.

 2                               --o0o--

 3            AIR POLLUTION SPECIALIST ELEY:  ARB staff

 4  considered three alternatives to the proposal being

 5  presented today.

 6            The first alternative considered was to keep the

 7  principle of applying the term operationally independent.

 8  However, as mentioned earlier, much uncertainty has been

 9  created about applying this undefined term, creating a

10  burden each time staff interprets a new ownership

11  arrangement on a case-by-case basis.

12            In addition, some manufacturers not involved in

13  multiple ownership situations have commented that the

14  current method has resulted in inequity and

15  competitiveness issues among manufacturers.

16            The second alternative considered was to use an

17  existing provision of the US EPA Regulation used to

18  aggregate the sales volumes.  This provision aggregates

19  vehicle volumes when a company owns ten percent or greater

20  after another company.

21            This alternative was explored at the March 2000

22  workshop.  In general, the auto manufacturers expressed

23  that applying the ten percent aggregation was considered

24  too restrictive for this regulation.

25            The third alternative considered was to develop


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 1  the definition for operationally independent, and include

 2  it in the regulation.  Interested vehicle manufacturers

 3  provide proposed definitions.  One manufacturer's proposed

 4  definition of operationally independent consisted of

 5  separate legal entities, self-sustaining capital

 6  structure, and a separate board of directors.

 7            Staff was unable to define all of the

 8  manufacturer's definitions into a single, clear and

 9  enforceable definition.  The manufacturers themselves

10  could not reach any consensus with this approach.

11            Staff's final recommendation at the suggestion of

12  several auto makers was to use the 50 percent ownership

13  criteria, which is the proposed regulation change being

14  presented today.

15            I would like to close with a staff recommendation

16  that the Board adopt the proposal as presented today.  The

17  proposal simplifies the determination of the manufacturer

18  volume status to ensure predictable and equitable

19  treatment of all our manufacturers.

20            I'll now turn the presentation over to Gayle

21  Sweigert who will be presenting the next part of this

22  item, electric vehicle infrastructure standardization.

23            CHAIRPERSON LLOYD:  Yes.  If it's okay with you,

24  Mike, we'd like to maybe stop at this point and ask

25  questions.


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 1            EXECUTIVE DIRECTOR KENNY:  All right.

 2            CHAIRPERSON LLOYD:  Yes, Dr. Friedman.

 3            BOARD MEMBER WILLIAM FRIEDMAN:  I just had one

 4  question, and it's probably just my business.  This 50

 5  percent proposal presumes that two companies get together.

 6  What if three companies get together of 35, 30 and, you

 7  know, different other percentages?  Isn't that sort of a

 8  backdoor way to avoid -- are you encouraging some

 9  additional mergers of less than 50 percent ownership by

10  this approach?

11            EXECUTIVE DIRECTOR KENNY:  We're not trying to

12  really encourage or discourage.  What we're trying to do

13  is simply reflect, kind of, the reality that we actually

14  currently see in the marketplace.

15            BOARD MEMBER WILLIAM FRIEDMAN:  I understand

16  that.  But out in the world if this 50 percent proposal is

17  the going concern, is there not a side door to this so

18  that people don't get to 50 percent, yet they do mergers

19  and so forth and they avoid the arithmetic that we want to

20  apply?

21            EXECUTIVE DIRECTOR KENNY:  Actually, Dr.

22  Friedman, that could happen.  I mean, actually there is at

23  least a factual scenario in which a company owns, for

24  example, 49 percent of another company, and so therefore

25  there would not be an obligation to count that company in


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 1  its ZEV calculations.

 2            What we were trying to do is essentially reflect

 3  that there are companies that own other companies almost

 4  outright.

 5            BOARD MEMBER WILLIAM FRIEDMAN:  I understand

 6  that.

 7            EXECUTIVE DIRECTOR KENNY:  But what you're saying

 8  is correct.  I mean it is possible to essentially own less

 9  than 50 percent and therefore not calculate it in.

10            CHAIRPERSON LLOYD:  Professor Friedman.

11            BOARD MEMBER HUGH FRIEDMAN:  First of all, I

12  haven't seen the language of the resolution for some

13  reason, but the summary says greater than 50 percent, so

14  you can own 50 percent, which clearly is control, and not

15  be subject to the aggregation, not be subject to the

16  rules.

17            But it would be easy enough, as you point out, to

18  simply take one percent, even if you were over 50, if you

19  had 51 percent, and take the one percent, if you're 60,

20  take ten, to bring yourself down to 50, no greater than

21  50, which takes you out of this, and put it in some other

22  entity.

23            Again, I don't know the language, but I think it

24  has to be crafted very carefully if that's the attitude

25  and the spirit -- if that's our goal.  But I'm not sure


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 1  that we're achieving a kind of fairness and equity that we

 2  are seeking, because there's some fairly large

 3  manufacturers who don't have the sales in California, but

 4  have large sales, and larger than Jaguar or some of these

 5  subsidiaries of other companies, that would be caught in

 6  this web, on the theory that there is control.

 7            But I suspect that the reality is that they

 8  almost compete with each other, some of these subsidiaries

 9  and divisions within the family that we're trying to

10  capture.  So I have some reservations about this.

11            EXECUTIVE DIRECTOR KENNY:  I think you're

12  actually correct about the fact that they are competing

13  with one another for market.  At the same time, what we

14  were trying to reflect is that certain companies actually

15  own all of other companies, in effect.  And so

16  consequently what they do is they have the ability to

17  really control that company, I mean, completely.

18            To the extent that we don't include them as part

19  of the ZEV calculations, we really are essentially

20  ignoring, kind of, one of the facts of life that exists

21  out there, which is companies that are completely

22  controlled and operationally controlled by another.

23            And what we were trying to do is essentially

24  reflect those numbers in the overall ZEV requirement.

25            BOARD MEMBER HUGH FRIEDMAN:  I understand, but I


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 1  think you can have companies with operational control of

 2  others that would easily avoid --

 3            EXECUTIVE OFFICER KENNY:  I think you can avoid

 4  this if you choose to do so.  I just don't think

 5  manufacturers will choose to take the path of avoidance,

 6  because the consequences are actually not that

 7  significant.  I mean, we look at the numbers of vehicles

 8  that we're talking about adding as a result of this

 9  combination, and, yes, there is some increase, but there

10  is also some decrease associated with it.

11            And then at the same time, you know, if companies

12  are owned by other companies, I'm sure there are many

13  other factors that essentially play into that ownership

14  control, and those are the things that companies are going

15  to have to weigh and balance among itself, and decide

16  whether it wants to maybe sell a portion of this company

17  to avoid this particular requirement.

18            BOARD MEMBER HUGH FRIEDMAN:  A factual

19  operational control test, though difficult and requiring

20  an ad hoc case-by-case determination, I think, would, in

21  my own view, would probably be more functionally effective

22  and efficient than a bright line test of 50 percent,

23  which, in a given case, could easily be skirted.

24            I mean, if I were running a company that was

25  acquiring another one of these smaller manufacturers, I'd


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 1  say let's not acquire more than 50 percent, we can void

 2  this, if it's close.  If all we want is control, we can

 3  get working control for a lot less.

 4            EXECUTIVE OFFICER KENNY:  I think your point is

 5  probably valid, when we look at the kinds of facts that

 6  we're confronted with right now.  I mean, as the slide

 7  showed, I mean, this probably really most impacts Ford,

 8  and it probably has very little impact on the other

 9  companies that we're talking about.

10            And the impact there with Ford is essentially one

11  in which they own other companies essentially at the

12  hundred percent level, and that's essentially why they're

13  brought into this.  And the other companies don't own

14  other subsidiaries, you know, at above the 50 percent

15  level.

16            BOARD MEMBER HUGH FRIEDMAN:  What was wrong with

17  the operational control?

18            EXECUTIVE DIRECTOR KENNY:  Just --

19            BOARD MEMBER HUGH FRIEDMAN:  Other than it's not

20  a standard you can apply a yardstick to.

21            EXECUTIVE OFFICER KENNY:  I think it's not a

22  bright line.  What we have to do each time is essentially

23  engage in an interpretation that this particular factual

24  scenario fits within the operational control.  And what we

25  were trying to do was provide something that was kind of


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 1  more sort of --

 2            BOARD MEMBER HUGH FRIEDMAN:  I think Jack, could

 3  you comment.

 4            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  What I

 5  wanted to expound on was Mr. Kenny's point that there are

 6  other factors, many other factors, which go into an

 7  acquisition of another company, and those factors very

 8  often lead the larger company to wholly buy from other

 9  companies.

10            So most of the situations we have dealt with and

11  we see are a very large company purchasing a hundred

12  percent of the smaller company.  And that is the situation

13  where we're still, even at one hundred percent ownership,

14  you know, debating the issue of whether they're

15  operationally independent or not.

16            Manufacturers argue that even when they own one

17  hundred percent of another company, that that other

18  company is still independent.  There are some situations,

19  there is a situation, General Motors owning, I believe, 40

20  percent of another company.

21            They would not be affected by the requirement

22  here.  So there is a tradeoff in where you draw that

23  bright line.  We had originally proposed drawing that

24  bright line at a ten percent level, which is consistent

25  with some of the requirements the US EPA has and other


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 1  aggregate requirements.

 2            And it just seemed too restrictive for this

 3  requirement.  The 50 percent was where we decided to draw

 4  the line, and it will preclude some versus others.

 5            But we believe most of the mergers will happen

 6  apart from the consideration of the ZEV mandate.  There

 7  will be other factors that will overwhelm how much of the

 8  new entity that they purchase.  And in most cases, it

 9  would be one hundred percent.

10            SENIOR STAFF COUNSEL JENNINGS:  I think one other

11  factor that might be relevant is that -- Tom Jennings of

12  the legal staff.  One other factor that might be relevant

13  is that General Motors owns one hundred percent of Saab.

14  So in a way the relationship is the same as Ford's

15  relationship to Volvo, but General Motors has always

16  treated Saab as part of that company and aggregated the

17  volume the way we're proposing it be done in the other

18  situations.

19            So, in that sense, there are other companies

20  affected, but they're already going the way we're

21  proposing to it be.

22            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  I

23  guess the last piece, I'm Bob Cross with ARB, is that

24  companies like DaimlerChrysler, for example, we're trying

25  to argue that they were operationally independent.  And I


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 1  think that that's the case that in our mind we want the

 2  bright line to be on the side of saying hey, these guys

 3  are in.

 4            So I think that the percentage of requirement

 5  makes certain of things like Daimler Chrysler are in, and

 6  provides a little bit of latitude both ways for situations

 7  where you have big companies like GM acquiring small

 8  companies like Saab, for example.

 9            And on those I think it's less critical than in

10  the situations like DaimlerChrysler.

11            BOARD MEMBER HUGH FRIEDMAN:  Thank you.

12            CHAIRPERSON LLOYD:  I had a question on the -- I

13  guess we've got Ford to address that, I know when you

14  mention the 2.6 million before, that was staff's estimate

15  not Ford's estimate.  So I presume that we will -- Ford

16  will testify what that number should be.

17            Any more questions from the Board?

18            Then we will continue with staff presentation.

19            (Thereupon an overhead presentation was

20            presented as follows.)

21            AIR POLLUTION SPECIALIST SWEIGERT:  Thank you.

22  Next, I will discuss staff's recommendation for the

23  standardization of charging systems for battery electric

24  vehicles.  First, I will begin by describing the current

25  situation and the need for standardization.


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 1            I will briefly discuss the process that staff

 2  used to evaluate charging technologies followed by staff's

 3  findings on the merits of each charging system.  I will

 4  conclude the staff presentation with a brief discussion of

 5  the proposed regulatory approach.

 6                               --o0o--

 7            AIR POLLUTION SPECIALIST SWEIGERT:  I will now

 8  begin with a discussion of the need for standardization.

 9            Currently, we have slightly over 2,000 EVs on the

10  road and approximately 3,000 charging stations to support

11  these vehicles at fleet facilities, residences and public

12  sites.  Over 1,000 stations comprise California's public

13  charging network.

14                               --o0o--

15            AIR POLLUTION SPECIALIST SWEIGERT:  There are

16  three basic systems in use, the inductive, the on-board

17  conductive, and the off-board conductive.

18            To further complicate the situation, there are

19  multiple connector types or plugs in use.  The inductive

20  system began with the large cattle connector and is now

21  moving to a small paddle connector.  The industry is in

22  the middle of this transition, which is not expected to be

23  complete until 2003.  As a result, there's limited

24  availability for some inductively charged vehicles.

25            While the conductive systems have used a variety


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 1  of different connectors over the last few years,

 2  considerable progress has been made of moving towards the

 3  Avcon connector as the industry standard.  As a practical

 4  matter the Avcon connector is used in virtually all

 5  conductive public charging installations in California.

 6                               --o0o--

 7            AIR POLLUTION SPECIALIST SWEIGERT:  The following

 8  shows a typical situation, the current diversity of

 9  charging technologies and connector types, public and

10  fleet installations need to install multiple systems to

11  accommodate most EVs on the road.

12                               --o0o--

13            AIR POLLUTION SPECIALIST SWEIGERT:  As a result

14  of the modifications to the ZEV requirements adopted by

15  the Board in January, the number of EVs in California will

16  substantially increase over the next decade.

17            In concert with this increase, marketing efforts

18  will need to shift from fleets to retail customers.  The

19  current situation has a potential to be a barrier to

20  market expansion.  Staff is concerned that the lack of a

21  standard charging system contributes to public perception

22  that the EV market is not yet mature.

23            Consumers could be more apprehensive about

24  embracing EV technology for fear that they may be buying

25  the equivalent of a Beta Video Cassette recorder.  The


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 1  lack of standardization not only decreases the access and

 2  net capacity of the public charging network, but also

 3  results in higher costs.  Because these technologies must

 4  continue to be supportive, public and private sponsors

 5  must maintain higher costs to maintain and expand

 6  California's public charging network.

 7            And finally, the issue of stranded resources.

 8  One charging technology will eventually need to be chosen.

 9  Each technology continues to have the proponents that are

10  investing considerable resources into the development and

11  commercialization of product.  The longer a decision is

12  delayed, the higher the stranded or sunken investments

13  become.

14                               --o0o--

15            AIR POLLUTION SPECIALIST SWEIGERT:  This slide

16  shows the expected number of ZEVs over the next decade.

17  As you can see, the number of ZEVs will be increasing

18  substantially.  It is expected that the majority of these

19  vehicles will be battery electric vehicles through the

20  next seven to ten years.

21            As you can see, an excess of 20,000 vehicles are

22  expected between 2003 and 2006 and up to 100,000 by the

23  year 2010.

24                               --o0o--

25            AIR POLLUTION SPECIALIST SWEIGERT:  There are


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 1  many benefits to standardization, especially for the

 2  consumer.  Standardization will increase access.  Every EV

 3  will fit every charging station, analogous to a gasoline

 4  station in which every vehicle can use any gasoline pump.

 5  This will greatly enhance consumer confidence and support

 6  market expansion.

 7            Standardization assures further technology

 8  improvements by focusing resources into one technology.

 9  This will also make it easier to service and maintain

10  equipment because it costs more to support multiple

11  technologies.

12            Overall, staff believes that standardization will

13  reduce cost for consumer fleet operators and public

14  infrastructure sponsors.

15                               --o0o--

16            AIR POLLUTION SPECIALIST SWEIGERT:  ARB had hoped

17  that market forces for the industry would select the

18  charging system.  Unfortunately, little progress has been

19  made in the industry in moving towards standardization.

20            Four years ago ARB considered developing a

21  similar proposal for standardization, but was asked to

22  wait and let the market decide.  Now, four years later,

23  the industry remains evenly divided and committed to their

24  selective technologies, and there is no independent,

25  nonregulatory selection process available.


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 1            Also, no commitment has been provided by the auto

 2  manufacturers to resolve the issue in the next few years.

 3  The lack of commitment to resolve the issue combined with

 4  our responsibilities for the successful implementation of

 5  the ZEV Program leaves the difficult decision to ARB.

 6                               --o0o--

 7            AIR POLLUTION SPECIALIST SWEIGERT:  The following

 8  slide shows the impact of not standardizing charging

 9  systems either through regulations or market forces.  The

10  graph illustrates the number of EVs that staff estimates

11  would be on the road by 2006 and 2010 by the four auto

12  makers who currently use a different charging system than

13  the one staff is recommending as a standard.

14            The number of EVs with nonstandard charging

15  systems could rapidly increase.  If standardization does

16  not occur by 2006, over 10,000 EVs would be on the road

17  without a standard charging system.  If the decision is

18  not reached until 2010, then there could be five times as

19  many vehicles with the nonstandard charging system.

20            These are some of the reasons why we're making

21  this proposal today.

22                               --o0o--

23            AIR POLLUTION SPECIALIST SWEIGERT:  Next, I will

24  briefly describe the process that ARB used for evaluating

25  the charging technologies.  To begin, I would like to


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 1  describe the function of a charger.  A charger is an

 2  electrical device that converts alternating current

 3  supplied by the electricity grid to direct current to the

 4  vehicle battery for the purposes of charging the vehicle

 5  battery.

 6                               --o0o--

 7            AIR POLLUTION SPECIALIST SWEIGERT:  There are

 8  several important issues that need to be considered when

 9  evaluating a charging system.  One of these is the charger

10  location.  Chargers can be located either on the vehicle

11  or off the vehicle as a separate piece of equipment.

12            The primary benefit of an on-board charger is

13  that the charger goes where the vehicle goes, which

14  reduces the total number of chargers that must be

15  purchased.

16            This is an important consideration, because we

17  anticipate that at least 1.5 charging stations per vehicle

18  will be needed to provide sufficient public, workplace and

19  residential charging support for vehicles.

20            The disadvantage of the on-board system is that

21  it can result in added weight on the vehicle that can

22  reduce vehicle range.

23            Another consideration is the connector or plug

24  used.  This is the device that the consumer will use on a

25  daily basis to connect their car to the charging station.


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 1  The connector must be easy to use so that it will be

 2  accepted by the consumer.  The connector choice is

 3  influenced by the type of charging system selected.

 4            Finally, there are three different types of

 5  charging.  The most common of these is referred to as

 6  Level 2.  It uses dedicated equipment that is permanently

 7  affixed to a 220 outlet.  This is the charging that is

 8  used on a daily basis at residences, fleet facilities and

 9  public sites.

10            Other types of charging include level 1 for

11  convenience, which uses the standard 110 volt outlet

12  connection.  Smaller vehicles use this on a routine basis.

13  Also, it can be a backup for a full performance vehicle,

14  when Level 2 charging is not available.

15            Finally, there is high power or fast charging

16  which can utilize either an on-board or off-board charger.

17                               --o0o--

18            AIR POLLUTION SPECIALIST SWEIGERT:  There are two

19  basic charging systems, conductive and inductive.

20  Conductive systems are further differentiated by whether

21  they use an on-board or an off-board charger.  On-board

22  conductive charging extends power to the charger, which is

23  located on the vehicle.  Connecting to the electricity

24  grid only requires simple equipment, consisting of a

25  ground fault circuit interrupt or GFCI.


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 1            On-board conductive charging is used in Honda and

 2  Ford EVs, as well as with most industrial EVs and electric

 3  buses.  An alternate method of conductive charging uses an

 4  off-board charger.

 5            In this case, the vehicle is equipped with a

 6  charger port, and a charger has to be installed at each

 7  facility whether the EV needs to be recharged.  The only

 8  manufacturer who utilizes this system is DaimlerChrysler.

 9            Finally, inductive charging is a method of

10  transferring power from the charger to the battery

11  mechanically rather than by direct electric contact.

12  Inductive charging is based on the energy transfer in a

13  two-part transformer.

14                               --o0o--

15            AIR POLLUTION SPECIALIST SWEIGERT:  The next step

16  in staff's evaluation process was to identify the

17  selection criteria so that each charging system could be

18  objectively passed.

19            The second step was to collect data pertinent to

20  each charging system.  Next staff evaluated each system

21  and completed a preliminary analysis prior to the public

22  workshop which was held in February.

23                               --o0o--

24            AIR POLLUTION SPECIALIST SWEIGERT:  Staff

25  subsequently incorporated comments received during the


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 1  public workshop and stakeholder process into the selection

 2  criteria.  The selection criteria were grouped into three

 3  broad categories, cost and market, consumer concerns and

 4  future technology evolution.  Fifteen specific criteria

 5  were considered, and each were given a high, medium or low

 6  priority.  Eight of the 15 criteria were considered high

 7  priority.

 8            High priority was assigned to those criteria that

 9  provide the greatest contribution to facilitating the use

10  of electric vehicles, enhancing consumer acceptance and

11  supporting market expansion.

12            Next I will summarize the staff's findings or the

13  results of the technical evaluation conducted on the

14  different charging technologies.

15                               --o0o--

16            AIR POLLUTION SPECIALIST SWEIGERT:  The following

17  criteria were included under cost and market.  One of the

18  most important criteria is the assessment of the current

19  and future system costs.

20            System costs refer to the total costs for the

21  charging system, including all of the equipment located on

22  the vehicle, as well as off the vehicle.

23            The second consideration was open technology

24  market competition.  This includes an evaluation, if there

25  are any licensing fees, patents or other market barriers


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 1  that would prevent additional manufacturers or auto

 2  manufacturers from manufacturing or using the charging

 3  system.

 4            Finally, other considerations include

 5  infrastructure costs.  These are the equipment costs that

 6  the consumer or public infrastructure provider must pay

 7  for the off-board charging station.

 8                               --o0o--

 9            AIR POLLUTION SPECIALIST SWEIGERT:  This slide

10  compares the current system costs for all three charging

11  systems.  Note that this is the cost for the manufacturers

12  to produce the system.  The actual cost numbers are not

13  shown to protect the confidentiality of the data.  The

14  off-board conductive system has the highest costs,

15  approximately $8,000.  And the on-board conductive system

16  has a system cost in the range of $1,900.  The extremely

17  high costs of the off-board conductive system used by

18  DaimlerChrysler, and the fact that the system cost is not

19  likely to be competitive in the near future are the

20  reasons for its removal from most of the other analyses

21  shown later.

22                               --o0o--

23            AIR POLLUTION SPECIALIST SWEIGERT:  This slide

24  illustrates the current list or retail price for different

25  conductive and inductive off-board equipment.  This is the


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 1  equipment that the consumer must purchase in order to be

 2  able to charge their vehicle.  For the conductive system,

 3  this is the wall box.  And for the inductive system, this

 4  represents the price of the charger.

 5            Conductive wall boxes retail between $350 and

 6  $1,900 depending on the model and type of features

 7  desired.  Inductive chargers are priced between $2,000 and

 8  $6,000.  As this slide illustrates, the off-board

 9  equipment prices on average is much lower for conductive

10  than inductive.

11                               --o0o--

12            AIR POLLUTION SPECIALIST SWEIGERT:  I would like

13  to summarize staff findings regarding costs.  I want to

14  emphasize that these are estimates based on information

15  provided by different manufacturers.  And all estimates

16  have a certain level of uncertainty associated with them.

17            As discussed earlier, on-board conductive systems

18  currently have the lowest system cost.  Another benefit of

19  the on-board conductive system is its ability to reduce

20  costs for smaller city vehicles both now and in the

21  future.  This is due to the fact that the size of the

22  charger can be adjusted for the needs and size of the

23  vehicle traction data reading and does not have to rely on

24  the standard charger size, as with an off-board charger.

25  Thus city vehicles with smaller battery packs will require


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 1  smaller chargers, reducing overall system cost.

 2            Another important consideration is the cost of

 3  the infrastructure or charging station.  Costs for the

 4  conductive wall boxes are, on average, lower than the

 5  inductive charger, and staff expects this trend will

 6  continue well into the future.  This is because the cost

 7  of producing a simple conductive wall box is expected to

 8  be less expensive than the cost of producing a charging

 9  station that incorporates a charging electronics as the

10  inductive system does.

11                               --o0o--

12            AIR POLLUTION SPECIALIST SWEIGERT:  Finally,

13  future costs are very important.  Taking all of the

14  previously discussed factors into consideration and

15  reviewing information provided by auto manufacturers,

16  staff estimates that on-board system costs at high volume

17  for conductive systems will be able to achieve cost

18  targets of $700 for city vehicles and $900 for

19  full-function vehicles.

20            Staff recently received information from one

21  manufacturer of inductive charging equipment in which they

22  estimated they would be able to achieve a future high

23  volume cost target identified by conductive.

24                               --o0o--

25            AIR POLLUTION SPECIALIST SWEIGERT:  Patents and


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 1  licensing fees covering infrastructure equipment are a

 2  potential impediment to competition.

 3            This concerns, specifically, with that portion of

 4  the charging system that needs to be compatible with a

 5  variety of vehicles and users.  Conductive systems allow

 6  for an open architecture in which patents or proprietary

 7  designs have been minimized, thus encouraging future

 8  technology of evolution.

 9            Conductive keeps the infrastructure uncomplicated

10  and cost effective, because it uses simple wall box

11  technology.  Inductive systems, on the other hand, rely on

12  a complex or costly charging for the infrastructure.  The

13  conductive wall box is somewhat analogous to the situation

14  with a typical consumer product.  The 110 household outlet

15  remains basically unchanged, allowing products like

16  toasters to evolve and improve over time.  We don't need

17  to constantly change the electrical outlet to accept new

18  technology developments, like the microwave.

19            However, the opposite situation exists for

20  inductive technology, as inductive technology involves the

21  off board charging needs to be replaced or upgraded.

22            Conductive systems have only one patent that

23  covers the connector vehicle inlet.  There is a universal

24  licensing  agreement in place.  This is $100,000 plus four

25  percent of profits and represents a small fraction of the


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 1  total charging system.

 2                               --o0o--

 3            AIR POLLUTION SPECIALIST SWEIGERT:  Manufacturers

 4  of inductive systems have stated that inductive is an open

 5  technology.  However, there are a number of patents

 6  covering inductive technology that introduce a level of

 7  uncertainty regarding costs.  Because there's no universal

 8  licensing agreement covering inductive technology, the

 9  future costs for a new manufacturer are unknown.

10            General Motors, a manufacturer and inductive

11  patent holder, has provided comments that patents issues

12  would be resolved between them and interested

13  manufacturers.

14                               --o0o--

15            AIR POLLUTION SPECIALIST SWEIGERT:  To summarize,

16  staff believes that two high priority cost issues favor

17  the on-board conductive system.

18            Next, I will turn to the discussion of the

19  criteria that have consumer concerns.

20                               --o0o--

21            AIR POLLUTION SPECIALIST SWEIGERT:  High priority

22  criteria included the safety, reliability and durability

23  of charging equipment, the ease of use or how consumer

24  friendly the equipment is.  Charging efficiency is also an

25  important consideration.


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 1            Other criteria include public access, product

 2  support, and the ability to provide convenience or 110

 3  volt charging.

 4                               --o0o--

 5            AIR POLLUTION SPECIALIST SWEIGERT:  All charging

 6  systems meet or exceed the established industry practices

 7  for safety.  These safety standards are included in the

 8  Society of Automotive Engineers' recommended practices for

 9  charging systems.

10            The safety standards are generally implemented

11  through the UL listing process.  While there is no peer

12  review data available, all systems have demonstrated

13  excellent reliability and durability.  This includes

14  meeting stringent industry testing recommendations for the

15  connector 10,000 insertions.

16            There have been field problems with both systems.

17  This includes a failed component in the inductive vehicle

18  inlet that resulted in the safety recall of the EV 1 and

19  S10 last year.

20            There were larger than expected durability

21  problems with the prototype conductive connector.  Both

22  problems have been resolved.

23                               --o0o--

24            AIR POLLUTION SPECIALIST SWEIGERT:  Staff

25  assessment of the inductive paddle is that it is easier to


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 1  use.  It only requires one angle of motion rather than two

 2  with the conductive connector.

 3            However, both systems meet consumers ergonomic

 4  needs and are easier to use than a standard gasoline pump.

 5  All auto manufacturers conducted consumer focus groups to

 6  evaluate different connector designs.

 7            Conductive charging is more efficient than

 8  inductive charging.  Inductive systems are one to two

 9  percent less efficient at the peak power levels.  These

10  sufficiency differences are significantly greater when EVs

11  charge at lower power levels.

12            Therefore, some city EVs as well as EVs with lead

13  acid technology would be expected to have greater

14  efficiency losses, as compared to the comparable

15  conductively recharged vehicles.

16            In addition, full performance, inductively

17  charged EVs that charge often at lower power levels may

18  also have lower charging efficiencies.

19            Staff attempted to conduct independent tests to

20  measure efficiency.  Testing done in El Monte has shown a

21  negligible difference in some cases, but up to a 20

22  percent difference in other cases.

23                               --o0o--

24            AIR POLLUTION SPECIALIST SWEIGERT:  To summarize,

25  conductive equaled or exceeded inductive in four out of


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 1  the five high priority criteria for consumer concerns.

 2                               --o0o--

 3            AIR POLLUTION SPECIALIST SWEIGERT:  Next I will

 4  turn to the discussion of future technology evolution.

 5  This is the ability of different charging systems to keep

 6  pace with the advances in technology.  The high priority

 7  criteria included vehicle to grid or using the battery to

 8  send power back to the grid.

 9            The second criteria is level two plus charging, a

10  fast charging option.  Other considerations are level 3

11  high power charging and auto docking.

12                               --o0o--

13            AIR POLLUTION SPECIALIST SWEIGERT:  Vehicle to

14  grid charging reverses the power flow, in that the charger

15  can provide power to the electricity grid when not

16  charging the batteries.  When EV charger connection

17  systems were developed, they were only expected to deliver

18  power to charged vehicles.  Much has changed in the last

19  ten years.  There are a variety of electric drive vehicles

20  including pure battery electric vehicles that contained

21  all of the basic components needed for a distributed power

22  generation source.

23            This is considered a promising application for

24  the future.  ARB funded a study to evaluate the viability

25  of EVs as power resources.  The conclusion was that EV's


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 1  could be cost competitive in providing power for ancillary

 2  services.  Ancillary services are used to cover imbalances

 3  in power availability by California independent system

 4  operators.

 5            Conductive systems are capable of bi-directional

 6  flow with little or no expensive modifications.  Minimal

 7  modifications are needed to wall boxes, cables and

 8  connects to support vehicle to grid power flow.

 9            However, vehicles need to be designed to allow

10  for this application.  Current inductive systems are not

11  capable of reversing power flow.  Although an inductive

12  system could be designed to do this.  It would require

13  adding components to the vehicle side.  In addition, it

14  would require adding considerable components to the

15  charger, which will significantly increase the cost and

16  complexity of the inductive system.

17                               --o0o--

18            AIR POLLUTION SPECIALIST SWEIGERT:  There are two

19  types of fast charging.  Level 2 plus uses an on-board

20  charger and level 3 uses an off-board charger.  Level 3

21  provides a faster charge time, about 20 minutes to

22  recharge from 20 to 80 percent of charge.  Level 2 plus

23  could recharge a vehicle in less than an hour.

24            However, due to the very high costs of off-board

25  chargers, auto manufacturers do not anticipate a business


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 1  case to support level 3 charging in the near to mid-term.

 2  Level 2 plus is considered by many to be the only cost

 3  effective approach in the near to mid term.  Level 2 plus

 4  is very promising for conductive applications.

 5            Several auto manufacturers are working on

 6  integrated chargers that would provide faster charging.

 7  Some systems are already commercially available.  It is

 8  technologically feasible for inductive, but those systems

 9  are currently under development and it would be more

10  complicated than a comparable are conductive system.

11                               --o0o--

12            AIR POLLUTION SPECIALIST SWEIGERT:  The following

13  slide summarizes staff's findings on the criteria included

14  under technology evolution.  On-board conductive systems

15  exceeded inductive in the two categories of vehicle to

16  grid and level 2 plus charging.

17            Here are the complete results of the staff's

18  technical evaluation.  On-board conductive systems met or

19  exceeded inductive in seven out of the eight high priority

20  criteria.

21                               --o0o--

22            AIR POLLUTION SPECIALIST SWEIGERT:  Next, I will

23  discuss the regulatory approach that staff is recommending

24  to standardize infrastructure.  Staff is recommending that

25  the ZEV regulations be modified to add requirements for


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 1  charging.  There are two basic requirements.  One is for a

 2  conductive vehicle inlet as specified by the Society of

 3  Automotive Engineers in their recommended practice.

 4            This is currently in final draft form and

 5  expected to be finalized later this year.  The second

 6  requirement is to require a minimum on-board charger.

 7  This will ensure that every EV would be able to use every

 8  conductive charging station.

 9            The proposed implementation year is to 2006.

10  This provides industry with a full four years to make

11  changes to vehicle platforms and work out any inner

12  operability issues.

13                               --o0o--

14            AIR POLLUTION SPECIALIST SWEIGERT:  Staff is

15  proposing that these requirements would apply to all

16  vehicles that qualify for 1.0 or greater ZEV credit and

17  which are capable to be designed of level 2 or 220 volt

18  charging.

19            Staff also proposes that grid-connected EV's that

20  will utilize Level 2 charging also be included.  This

21  would exempt all neighborhood electric vehicles and city

22  vehicles that would only be capable of a Level 1 charging.

23                               --o0o--

24            AIR POLLUTION SPECIALIST SWEIGERT:  As part of

25  the regulatory development process, staff considered a


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 1  number of options to the proposed approach.  This included

 2  establishing a consensus process.  Given the divisions

 3  within the industry, there was no viable option for

 4  achieving consensus in the near term.

 5            Another option was to standardize both charging

 6  systems.  However, that would not meet the needs of the

 7  consumer who will need one standardized system in order to

 8  ensure access to public charging.

 9            Other options were to recommend the charging

10  system but not require it or implement through public

11  policy initiatives.  Neither of these approaches would

12  provide certainty to the ZEV Program.

13                               --o0o--

14            AIR POLLUTION SPECIALIST SWEIGERT:  In

15  conclusion, staff has found that on-board conductive

16  charge will provide consumers and public charging

17  supporters with the lowest infrastructure equipment costs,

18  has the greatest potential for future technology

19  evolution, and meets or exceeds industry standards for

20  safety, reliability and durability.

21            Conductive keeps the infrastructure the simplest.

22  And when we have completely standardized, we will achieve

23  the goal of every EV fitting every EV charging station.

24            This concludes the staff presentation.

25            CHAIRPERSON LLOYD:  Thank you very much.


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 1            Questions from the Board or comments?

 2            I have one, I guess.  On your efficiency slide, I

 3  heard what you said, but it wasn't particularly crisp

 4  there.  Can you basically summarize, is it definitive in

 5  terms of that, one system over the other?  You know, I got

 6  some range into negligible to 20 percent, but you know --

 7            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  Yes.

 8  Let me try and clarify.  And you will probably hear both

 9  negligible and 20 percent in the testimony a little bit

10  later.  And they're not necessarily mutually exclusive.

11            We've heard comments from manufacturers and we

12  did a little bit of testing on our own to get our own,

13  sort of, hands-on feel for the testing.  We've confirmed

14  with what we have heard from the manufacturers.

15            At high power levels inductive and conductive can

16  be comparable one to two percent is about right.  And I'm

17  not really an electrical engineer, as a kind of person, so

18  if it helps you, the analogy I use is to kind of think of

19  it like water flow.  And what we're trying to determine is

20  how much the nozzle at the end of the hose might, you

21  know, restrict the water flow coming out.  And when you

22  have that water turned on full blast, inductive and

23  conductive, they're about the same, probably slightly

24  better for conductive.

25            The challenge comes in do you ever need to turn


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 1  that nozzle at half or even less than half?  And there are

 2  a lot of situations where that's the case.

 3            When you can't fill the battery right to the very

 4  top, you can't keep going full blast, full blast and then

 5  shut it off, there has to be some logic to the charging

 6  strategy.  And especially for lead acid batteries, you

 7  need to taper it even more and more and more and more.

 8            So we found that lead acid batteries will have

 9  more of a tendency to have that nozzle turned down a

10  little bit toward the end of the chart, so they will

11  suffer from lower efficiency at some point.

12            In addition, there are other instances where you

13  aren't going to want to do it.  If you cool -- if you

14  charge on a hot day, some of the battery management

15  techniques to ensure long life of the battery, what they

16  do is they cool the battery when you're charging on a hot

17  day.  It can't take all of the heat of the charge all at

18  once.

19            When you're cooling the battery, you're running

20  at a very low charge, you're trickling that charge in

21  there.  And when you're trickling that charge in there,

22  that's when the efficiency drops dramatically.  Level 1

23  charging would be the same thing.  Some of the smaller

24  battery packs would be the same thing.

25            So there's a number of instances we've seen where


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 1  the efficiency is likely to drop.  And so the two percent

 2  number, I think, one to two percent number is right.  And

 3  I think the 20 percent number in some cases is right.

 4            CHAIRPERSON LLOYD:  Thank you.  That's a good

 5  explanation.  I appreciate that Jack.

 6            The other point I heard, staff, on 2006, why that

 7  was selected.  I would be interested in the witnesses

 8  talking about that timeframe.  In fact, the additional

 9  time there would be useful.  So for those who are

10  testifying, it would be a question I would like to

11  explore.

12            Professor Friedman.

13            BOARD MEMBER HUGH FRIEDMAN:  I don't propose,

14  personally, that we get into a full blown discussion of

15  what I'm to raise at this point, but I think before the

16  end of the day, I'd like to hear from any witnesses on it

17  and from the staff, at some point.  To what incentive have

18  you considered, if we were to go this way, what we'd be

19  doing to the existing infrastructure, and those who own

20  vehicles, and how we could assure -- make every reasonable

21  effort to assure that those charging capabilities are

22  still available for the life or the reasonable expectation

23  of life of such vehicle?

24            And I think if we're going to decide that

25  standardization is a must, and have to pick one or the


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 1  other, I mean, inductive is clearly a very legitimate

 2  rational approach.  But assuming comparatively it doesn't

 3  measure up for the reasons that have been proposed, the

 4  stated ones, and we're going to have to pick one, I'm

 5  concerned about what it does to those who in good faith

 6  have not only made them, but have bought them and are

 7  using them.

 8            CHAIRPERSON LLOYD:  I think that's a legitimate

 9  issue there, too.  I think, as you said, we probably could

10  shortly get on that issue.

11            Ms. D'Adamo and then Mr. McKinnon.

12            BOARD MEMBER D'ADAMO:  Just a quick question of

13  Mr. Kitowski.  The issue that you were just raising about

14  efficiency on warm days, would that apply to all batteries

15  or was it just the lead acid?

16            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  It

17  would apply to those batteries that have a thermal

18  management system, which incorporates some sort of cooling

19  or air-conditioning.  That's not necessarily lead acid.

20  That depends on what the manufacturer believes is

21  necessary to ensure the durability of the battery.  There

22  are lead acid systems that use it, but there are nickel

23  metal hydride systems that use it and there are nickel

24  metal hydride systems that don't use it.

25            Most batteries -- well, it's pretty mixed.  It's


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 1  not dependent on the battery type itself, it's the system

 2  approach.  And I believe Honda has used it, General Motors

 3  has used it, Toyota has not.

 4            CHAIRPERSON LLOYD:  Mr. McKinnon.

 5            BOARD MEMBER McKINNON:  Yeah.  I'm concerned

 6  about stranding, kind of, cars.  If we start building more

 7  and more cars with two different systems, I don't know

 8  that we solve the problem.  We may make the problem worse.

 9            I'm also concerned with those that have invested

10  already in inductive.  And if we were to pass this

11  resolution today, I'm interested, as folks testify today,

12  if there might be some room for us to figure out a way to

13  reward the conversion of some of the inductive cars or

14  maybe, you know, they're going to be too old by the time

15  this happens.

16            But it seems to me that at least part of the

17  discussion might be today is how we do the transition.

18  And, frankly, if folks are arguing we should leave it to

19  the market till later, then I think that how we do the

20  transition discussion is still important, because some day

21  we're going to have to deal with that question.

22            CHAIRPERSON LLOYD:  Good point.  I'm sure we'll

23  address that.  I guess I didn't ask you Madam Ombudsman if

24  you would like to comment on the process by which this

25  recommendation was brought before the Board.


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 1            OMBUDSMAN TSCHOGL:  I'd be pleased to.  Chairman

 2  and members of the Board.  The proposed regulation before

 3  you now was developed in response, as you know, to your

 4  request at this year's January board meeting.  I'll

 5  summarize the outreach that staff conducted in preparation

 6  for today.

 7            On February 27th staff held a workshop in El

 8  Monte.  The workshop began at 10:00 a.m. and ended at 8:00

 9  p.m.  The evening session was held to facilitate greater

10  public participation.  Staff sent the workshop

11  announcement to 50 people via the US Postal Service, and

12  electronically to nearly 650 people.  Staff sent the

13  announcement to the environmental community, concerned

14  citizens groups, industry representatives, government

15  agencies and others who have identified their interest in

16  the ZEV mandate.  Staff posted the announcement to our web

17  site as well.

18            Fifty people attended the workshop at some point

19  during the day.  Staff convened a working group to discuss

20  the technical issues surrounding the requirements of these

21  amendments.  The group consisted of the manufacturers of

22  vehicles and charging systems, government agencies and the

23  public.

24            This working group was announced at the February

25  27th workshop, and anyone interested in participating was


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 1  invited to do so.  The working group met on March 14 and

 2  again on April 10 in El Monte.  Staff had an additional 15

 3  individual meetings with interested parties since January

 4  of this year.

 5            These parties included automakers, energy

 6  providers, ZEV enthusiasts, and infrastructure providers.

 7  Staff also conducted a conference call with all seven

 8  automakers on April 17th.

 9            Finally, the staff record and the announcement of

10  this hearing were posted to ARB's web site on May 11.  At

11  this time, the announcement was sent to the recipients

12  identified a few moments ago.

13            Throughout the process, staff heard comments that

14  helped shape the regulation that is before you now.

15            Thank you.

16            CHAIRPERSON LLOYD:  Thanks very much.  Now, going

17  to the public testimony.  Before we do that, again, one of

18  the issues, Mr. Kenny, I would like to explore in addition

19  to some of the issues that have already been raised, is an

20  answer to the argument of well, let the free market take

21  its place.  And I know staff commented on the issue here

22  that we have tried to -- basically tried to come up with

23  some standardization during the last few years and nothing

24  happened.  That's yeah, we're coming here.

25            So, maybe, we can comment on that now or later.


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 1            EXECUTIVE DIRECTOR KENNY:  Yes.  I'd be happy to.

 2  We actually had this discussion, a very similar one to

 3  this, back in 1997/1998.  And, at that point in time, we

 4  actually were looking to standardization.  And we thought

 5  that, in fact, we knew that if we had a standardized route

 6  for exactly the kinds of reasons you've heard today, we

 7  thought it would make the market more successful, we

 8  thought it would be easier on the consumers, we thought

 9  that, in fact, it would probably provide for a dedication

10  of resources that would work to everyone's advantage.

11            At the time, what we heard from the manufacturers

12  was that what we should do is essentially allow the market

13  to, sort of, work this out, and that the market would

14  likely work it out.  There was also a lot of discussion

15  that SAE committees were looking at that and that would

16  help the market move towards some level of being able to

17  work this out.

18            In the end, as a staff, we actually debated this

19  fairly intensely among ourselves to decide whether we

20  should allow it to be worked out over time or whether we

21  should propose to the Board back then a standardized

22  approach.

23            And what we decided back then was that we would

24  allow the market the opportunity to try to work it out.

25  Unfortunately, here we are four years later and the market


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 1  hasn't worked it out, and we don't see any likelihood

 2  that, in fact, given another six months, given another

 3  year, given another two years, that, in fact, the market

 4  would work it out.  It seems, in fact, at this point in

 5  time that the market is even more entrenched than ever

 6  with regard to multiple systems.

 7            CHAIRPERSON LLOYD:  Thank you.

 8            Let's start the public testimony.  I'd like to

 9  remind the witnesses to sign up if you want to testify

10  with the Clerk of the Board and also provide 30 copies of

11  your written statements.

12            So I'd like to start off with the first witness

13  who signed up, and also to alert the others, which is Rich

14  Bell from Ford and Bob Cassidy from Nissan and Michael

15  Wolterman from Toyota.

16            Maybe, Rich, you could also clarify -- that I see

17  that we have later on Craig Toepfer from Ford testifying,

18  one is against and one is for.

19            I presume you're taking about different aspects.

20            MR. BELL:  We fight each other all the time.

21            (Laughter.)

22            MR. BELL:  I'm speaking on the multi-manufacturer

23  issue and Craig is speaking on the inductive charge on

24  behalf of Ford and EVC3.

25            CHAIRPERSON LLOYD:  Is your mike on?


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 1            MR. BELL:  Is there any way to get the slides up

 2  on -- the Board can see but the audience can't.

 3            I'm Rich Bell with Ford Motor Company.  I just

 4  want to speak briefly on multi-manufacturers, since we are

 5  affected the greatest by that proposal.

 6            CHAIRPERSON LLOYD:  I guess does this fall in the

 7  category that no good deed goes unpunished?

 8            (Thereupon an overhead presentation was

 9            presented as follows.)

10            MR. BELL:  That's right.  As part of an overview,

11  I want to talk a little bit about the things your staff

12  has been telling us about what's coming in post-2001 --

13  post January 2001 revisions since the Board last met on

14  this issue, and then talk a little bit about

15  multi-manufacturer rationale for changes, our structure,

16  fairness, cost, air quality benefits and necessity.

17                               --o0o--

18            MR. BELL:  As far as changes since January of

19  2001, there are some revisions we're expecting that will

20  have a positive impact on Ford Motor Company's credit

21  position, and actually make it easier for us to comply,

22  based on where we thought we were in January.

23            And, if you recall, we said in January that near

24  term we thought we were in really good shape with where

25  the direction of the mandate was headed.  But there are a


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 1  couple of other provisions that are being considered,

 2  inclusions of trucks up to 8,500 pounds that would more

 3  than double our requirements of Ford Motor Company,

 4  multi-manufacturer provisions, we increase our ZEV and ADP

 5  said requirements by about 15 percent or equivalent to

 6  about 600 Pure ZEV credits in 2006.

 7                               --o0o--

 8            MR. BELL:  And if we finally had time to go back

 9  and analyze the impact of the fixed three-year volume

10  average that staff proposed to the Board and looked at in

11  January and approved, and that would result in a ten

12  percent greater credit required over the first five years

13  than would be required if we based it on our actual sales.

14            In other words in 2003, our actual sales are

15  lower than the 97/98/99 volume average that we would now

16  have to base it on.  So over that period, you've got a ten

17  percent hit.  And the net effect is basically now piling

18  on of our credit deficit.  We had a deficit earlier than

19  we thought we were going to.

20                               --o0o--

21            MR. BELL:  Moving on to the multi-manufacturer

22  issues specifically.  There are two reasons that staff has

23  provided for making changes.  The first is ambiguity.  And

24  we believe that that can be addressed by staying with the

25  operationally dependent definition and just providing some


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 1  turns and concepts that better define operationally

 2  independent.

 3            As far as fairness is concerned, the second

 4  rationale or change, it's hard for us to talk about

 5  fairness in the ZEV mandate in the same breath, because

 6  it's, you know, it's basically -- it's hard to be fair

 7  when you're requiring manufacturers to do things and other

 8  manufacturers not.

 9            So it is kind of a tough concept.  One can argue

10  that to be equitable you would have to mandate it applied

11  to all manufacturers equally.  You could argue it the

12  other way as well.

13            But basically, you know, all the groupings of

14  affiliated companies, this is approximately the same size,

15  don't have the same ability to -- and resources to apply

16  towards orders meeting, you know, ZEV mandate.  And that's

17  why we feel the fairness issue is kind of soft.

18                               --o0o--

19            MR. BELL:  This slide depicts our view of Ford's

20  structure.  Ford Motor Company is the parent company.  We

21  have divisions of Ford that you're familiar with, Lincoln

22  Mercury.  And they are clearly divisions of Ford Motor

23  Company.  We also have operationally independent

24  corporations, Land Rover, Jaguar, Volvo, Aston Martin and

25  Mazda.


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 1                               --o0o--

 2            MR. BELL:  We view Lincoln and Mercury and Ford

 3  as divisions of Ford Motor Company, not separate legal

 4  entities, and they are clearly not operationally

 5  independent.

 6                               --o0o--

 7            MR. BELL:  Jaguar, Aston Martin, Volvo and Land

 8  Rover are wholly owned subsidiaries.  I think Aston Martin

 9  is as well.  They're operationally independent from us.

10  They are separate, legal entities.  I think you saw these

11  three points earlier in the ARB presentation.

12  Self-sustaining capital structures.  They have a separate

13  Board of Directors, and they maintain their own

14  distinctive image and reputation.  They have their own

15  cycle plans, et cetera.

16                               --o0o--

17            MR. BELL:  Getting back to the fairness.  Staff

18  went through some of the details about how Ford affected

19  and how VW is affected.

20            In Ford's case, we are significantly affected.

21  Volkswagen was estimated at, I think, $100,000 a year and

22  Ford staff estimated it at $2.4 million a year.

23            The revisions would become effective in the 2006

24  model year, and that's well within the scope of our

25  current product plans.  We share the product plans with


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 1  the staff that go out to 2008.  And, in our view, you

 2  know, there's really insufficient time to optimize our

 3  costs and our plan for compliance if it were to take back

 4  in 2006.

 5            And under the proposal our ZEV and ATP ZEV

 6  requirements would grow quite quickly, and we don't see

 7  anything that let's us on the demand side.  Back in

 8  January there was a complete staff report that talked

 9  about the market and whatnot.  This increases our

10  requirements about addressing the demand side of the

11  equation.

12                               --o0o--

13            MR. BELL:  As far as cost is concerned, I have

14  shared some specific numbers with staff, but basically the

15  2006 costs staff has presented are low by our estimates by

16  a factor of about four.  And that varies up and down

17  depending on where staff stands with the efficiency

18  calculations that they're playing with now.  It's about

19  four, based on the efficiency calculation that you saw

20  back in January.

21            So instead of $2.6 million a year it's over $10

22  million a year.  And, of course, those costs go up as the

23  mandate ramps up to 2018.  It goes from four percent to

24  ten percent.  And then also the inclusions of trucks up to

25  8,500 pounds.  That combined effect of those two things,


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 1  our annual cost will go to three and a half times where

 2  they would be in 2006, so it's a significant amount of

 3  money.

 4                               --o0o--

 5            MR. BELL:  Moving on to air quality benefits.

 6  And air quality benefits by the proposal's estimates are

 7  quite low, and there isn't really a discussion of cost

 8  effectiveness in the proposal, except to say that they're

 9  going to dismiss the concept of cost effectiveness based

10  on Ford's decision earlier to retain the mandate despite

11  cost effectiveness.

12            And that basically was related to the Board's

13  view that the mandate made sense regardless of the costs,

14  simply because of technology advancement.  And in our

15  view, the multi-manufacturer division that has been

16  proposed won't promote technology advancements and we

17  think the rationale is somewhat flawed.

18                               --o0o--

19            MR. BELL:  In our view the revisions aren't

20  necessary.  Consolidation within the auto industry isn't a

21  threat to ARB's air quality goals.  You won't end up with

22  fewer ZEVs because of consolidation.  In other words you

23  are where you were regardless of who buys them.  What you

24  would do by this proposal is simply get more of them, not

25  less, than what you're talking about.


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 1            It won't increase the number of ZEV models in our

 2  case.  We won't do Jaguar ZEVs.  We won't do Aston Martin

 3  ZEVs.  We won't do Land Rover ZEV models.  We'll simply

 4  have to do more Ford models to the ones that are already

 5  planned.  We'll have to find a way to market more of those

 6  incentives, other ways to get more customers.

 7                               --o0o--

 8            MR. BELL:  We don't think your revisions are

 9  necessary that you can work with your definition of

10  operationally independent.  You've done all the hard work.

11  Staff has categorized all the manufacturers.  We're all

12  packed in our little boxes, whether we're covered or not.

13  Any further aggregation in industry that things have been

14  set, you just follow the path that we've already laid out.

15                               --o0o--

16            MR. BELL:  So in conclusion, the costs are high.

17  They're nearly exclusive to Ford Motor Company.  The air

18  quality benefits are small.  The consolidation proposes no

19  threat to the goals of the mandate, revisions won't

20  increase the number of ZEV models on the market.  The lead

21  time is insufficient to optimize costs.  And it should

22  probably be at least a couple of years longer.

23            And we believe that revisions are not necessary.

24                               --o0o--

25            MR. BELL:  Getting back to the points that staff


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 1  put up.  We believe that you can fix the definition you

 2  have by adding factors such as separately remedy,

 3  self-sustaining capital structure and operation.

 4            Any question?

 5            CHAIRPERSON LLOYD:  I'm sure there are some.  I'm

 6  sure there will be others who will testify on this

 7  particular item before we get on to the recharging of

 8  standardization to come about.

 9            One of the things you talked about is the timing.

10  And staff has that information there.  Clearly, your

11  bottom line is no time is a good time.  Does additional

12  time help?

13            MR. BELL:  It certainly helps us evolve our

14  product plans, such that we can have the lowest cost

15  compliance plan company.  In other words, look at our cost

16  per credit, put together a plan that makes the most sense.

17            CHAIRPERSON LLOYD:  Yeah, but you're also -- in

18  your concluding comments, you're also pretty confident

19  that the Board can basically cover some of these issues

20  itself without putting it into significantly more

21  production.

22            MR. BELL:  I think so, yeah.

23            CHAIRPERSON LLOYD:  Mr. Kenny.

24            EXECUTIVE DIRECTOR KENNY:  I think this whole

25  discussion really boils down to, kind of, a pretty


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 1  straightforward issue between us and Ford.  And it really

 2  is the question of should the wholly owned subsidiaries be

 3  counted?

 4            And If you look at the operational definition

 5  that Rich was proposing, he's proposing that we not count

 6  those companies even though they are wholly owned

 7  subsidiaries.  And what we're proposing is that we think,

 8  in fact, we should count those companies.  And that really

 9  is kind of, I think, the heart of the question.

10            And what that means is that if we count the

11  companies, then Ford volume does increase and consequently

12  their ZEV obligation increases.

13            CHAIRPERSON LLOYD:  How do you respond to the

14  issue, Mike, where they've got an independent board of

15  directors and cases where they rate independently.  And

16  clearly we know from the badges on there, I can understand

17  why you wouldn't get an Aston Martin ZEV.

18            So there's --

19            BOARD MEMBER WILLIAM FRIEDMAN:  Darn.

20            (Laughter.)

21            EXECUTIVE OFFICER KENNY:  Well, I guess I would

22  use the same argument that was used earlier, which is that

23  wholly owned subsidiaries, if we're going to define them

24  in the context of separate board's of directors, that is

25  not that difficult to establish, and we could actually see


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 1  a kind of Lincoln division, which is a wholly owned

 2  subsidiary, but which essentially is established with a

 3  different board of directors and things like that, if

 4  people chose to try to avoid this particular requirement.

 5            I would also refer back to the argument that Mr.

 6  Jennings made which is that if you look at GM and Saab,

 7  you know, it's a very similar situation, and yet the Saab

 8  vehicles are counted.

 9            And so what we were trying to do is simply

10  reflect that we think these vehicles should be counted,

11  because, in fact, Ford does, in the end, control these

12  five companies.

13            CHAIRPERSON LLOYD:  Yeah, I hear you, but I'm

14  also cognizant of the fact that as we included SUVs into

15  the requirement and then we add here, I can see why Ford

16  would think of this as being picked on rather unfairly at

17  a time when they were actually trying to work with us very

18  strongly.

19            Any comments?

20            Professor Friedman.

21            BOARD MEMBER HUGH FRIEDMAN:  Well, just a

22  follow-up.  Could you respond to the point that this does

23  not promote technological advancement.  It just piles on.

24  It just adds more credit requirement.

25            EXECUTIVE DIRECTOR KENNY:  I don't think it's a


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 1  piling on.  I do think it does promote technological

 2  advancement to the extent that we get greater numbers of

 3  vehicles out into the marketplace.  I mean, ultimately the

 4  goal is to have as many of the, either zero emission

 5  vehicles or Advanced Technology Partial Zero Emission

 6  vehicles in the marketplace as we can achieve.

 7            And I think Rich's comment about the fact that

 8  we're probably not going to see an Aston Martin ZEV or a

 9  Land Rover ZEV, I think, he's probably very accurate in

10  saying that.  But at the same time, those are vehicles

11  that are in the marketplace that essentially do have a

12  pollution consequence to them.  And the entire goal of the

13  ZEV Program was to essentially develop a mobile

14  transportation future in which we minimize the amount of

15  pollution that's coming from those vehicles.

16            BOARD MEMBER HUGH FRIEDMAN:  If they were still

17  owned independently, they would not be subject to these?

18            EXECUTIVE DIRECTOR KENNY:  That's absolutely

19  true.  And actually --

20            BOARD MEMBER HUGH FRIEDMAN:  And some of them

21  were acquired probably in good faith and without any

22  thought that this would mean any changes.

23            EXECUTIVE OFFICER KENNY:  I think it's true, if

24  they continue to be independent companies, they would not

25  be subject to this requirement, because then they would


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 1  fall into either an intermediate volume manufacturer or a

 2  small volume manufacturer.  And they would have either a

 3  different requirement or no requirement, depending on the

 4  fact of that status.

 5            But what we are trying to reflect is that these

 6  are no longer independent companies.  I mean, they are

 7  companies that are completely owned by Ford, and they have

 8  therefore the resources of Ford at their disposal.  And

 9  that's what we've been trying to basically reflect in

10  terms of the ZEV requirement.

11            We did exclude the small volume manufacturers for

12  the simple reason that they didn't have those resources

13  available to them and so we didn't think it made sense to

14  actually put that burden upon them.

15            With regard to the intermediate volume

16  manufacturers, you know, we tried to essentially

17  discriminate in favor of them because of the lack of

18  resources that they had in comparison to the larger volume

19  manufacturers.  But in this situation, Ford is essentially

20  increasing its market share through it's wholly owned

21  subsidiaries, and it did seem to us to be reasonable to

22  include those vehicles as part of the ZEV requirement.

23            BOARD MEMBER HUGH FRIEDMAN:  What would be your

24  outside current product year plan?  In other words, you

25  said 2006 is too soon, but what --


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 1            MR. BELL:  We basically have our ZEV compliance

 2  plan AT PZEVs, PZEVs and ZEVs out to 2008 at this time, so

 3  beyond 2008, it's basically, you know, when we would have

 4  time to completely adjust the --

 5            CHAIRPERSON LLOYD:  Would staff agree with that?

 6            EXECUTIVE OFFICER KENNY:  In terms of a timeframe

 7  for adjustment, I mean we would take Ford at its word on

 8  that.  I don't think we've actually looked at that or have

 9  we?

10            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  We have

11  not looked at that.  Generally, the domestic automakers

12  need an additional more than two years compared to the

13  foreign automakers, the Japanese automakers, and it's

14  probably in the ballpark.

15            BOARD MEMBER HUGH FRIEDMAN:  I guess what's

16  bothering me is that there is something retroactive about

17  this, that sort of bothers me.  It just that we're really

18  in a sense, although hopefully minimally, that the effect

19  of this would be certainly to be a disincentive of some

20  kind for companies to acquire other companies that have

21  been independent, and that would not be subject to these

22  requirements.  And all of a sudden because they've been

23  acquired or 50 percent plus has been acquired, they

24  suddenly are subject to it, particularly where there's

25  special custom type vehicles, and so that just -- all it


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 1  does is increase the volume of the traditional credit.

 2            EXECUTIVE OFFICER KENNY:  That is correct.  I

 3  mean --

 4            BOARD MEMBER HUGH FRIEDMAN:  I know what our goal

 5  is.  And, you know, we're staying the course, but --

 6            EXECUTIVE OFFICER KENNY:  I think the one thing

 7  that is probably worth some exploration is the issue of

 8  timing.  I mean we issued it as a 2006 timeframe, because

 9  we thought that it was actually a reasonable timeframe.

10            If, in fact, we are off by a year or two years,

11  that may be a reasonable course to pursue.

12            BOARD MEMBER RIORDAN:  Mr. Chairman, if I might,

13  I would like to see staff maybe pursue some thought there

14  that would give to Ford and the subsidiaries some

15  opportunities.  Obviously, they're good partners for us in

16  terms of achieving what we want to achieve in terms of the

17  ZEV requirement.  And sometimes a little help can go a

18  long ways in getting everybody on the same track.

19            So while, we understand, or at least I feel I

20  understand what you are trying to achieve through the

21  staff recommendation, it seems to me that maybe there's a

22  timing issue again that we could partner up a little bit.

23            CHAIRPERSON LLOYD:  Supervisor DeSaulnier, Dr.

24  Burke.

25            Anybody down here?


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 1            BOARD MEMBER DeSAULNIER:  Mike, sort of on the

 2  same line of anything, it seems as if we're concerned with

 3  more future mergers and the potential to manipulate the

 4  ruling.  I wonder in terms of what Alan said, when we

 5  started this, your testimony was no good deed goes

 6  unpunished, if there was any discussion about sort of

 7  separating this, the world as we know it now is accepted,

 8  but any future mergers would come under some kind of

 9  control.

10            EXECUTIVE DIRECTOR KENNY:  Actually, I don't

11  think we actually looked at it from that perspective.

12            CHAIRPERSON LLOYD:  Could you?

13            EXECUTIVE DIRECTOR KENNY:  Yes, we could.

14            BOARD MEMBER HUGH FRIEDMAN:  Would you?

15            EXECUTIVE DIRECTOR KENNY:  Yes, we would.

16            (Laughter.)

17            BOARD MEMBER DeSAULNIER:  So to finish my

18  thought, would you do that, please?

19            (Laughter.)

20            EXECUTIVE DIRECTOR KENNY:  Yes, we can.

21            BOARD MEMBER DeSAULNIER:  Thank you.

22            CHAIRPERSON LLOYD:  Dr. Burke.

23            BOARD MEMBER BURKE:  I was right with you up

24  until you said that Jaguar and some of the other

25  divisions, Aston Martin, have the full resources of the


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 1  corporation available to them, which may or may not be

 2  true, I don't know, how do you know that?

 3            Because if I owned Ford Motor Company, what I

 4  would do to obfuscate this rule is to reverse sales to

 5  employees, make the sales so that arguably we kept all the

 6  profit, and then I wouldn't own them.  I'd just take all

 7  the profit.

 8            The other thing that bothers me about what you've

 9  been saying this morning is that you've been speaking

10  about these corporations like they're proprietary

11  corporations.  And they're not, they're public

12  corporations.

13            So 50 percent is not controlling.  A somewhere

14  much lower figure than that is really what a controlling

15  interest in a corporation like this is.  So, you know,

16  you're not really comparing apples and oranges.  And I

17  think there is probably some unfairness there.

18            EXECUTIVE OFFICER KENNY:  In response to that,

19  Dr. Burke, I think we agree with you, that controlling

20  interest could be lower than 50 percent quite easily.

21  What we were trying to do is reach a kind of balanced

22  approach where we thought there was a number that would

23  actually reflect kind of the overall goal that we were

24  trying to achieve.

25            CHAIRPERSON LLOYD:  Any other questions from the


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 1  Board?

 2            Thank you, Rick.  And anyone else testifying on

 3  this particular part of this item?

 4            Then we go with Bob Cassidy, Mike Wolterman and

 5  Tom Austin.

 6            MR. CASSIDY:  Good morning, Dr. Lloyd, Dr. Lloyd

 7  and members of the Board.  I'm Bob Cassidy.  I represent

 8  Nissan Motor Limited this morning.  As you know, Nissan

 9  has two EVs in California.  We have alter EV, which uses

10  the large battle conductive system, and we have the

11  hypermini which is a city car, uses the small inductive

12  system.

13            The first units are produced by GMADB.  The

14  second by TAL.

15            Our view on the than standardization issue is

16  quite simple.  We think it's too soon to select a

17  standard.  I will address several of the issues, which

18  leads Nissan to this conclusion and then I'll offer

19  recommendation.

20            (Thereupon an overhead presenation was

21            presented as follows.)

22            MR. CASSIDY:  Our recommendation is that we delay

23  consideration for one year.  During that time we appoint

24  an independent expert panel to look into this issue in

25  detail.


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 1                               --o0o--

 2            MR. CASSIDY:  One of the important considerations

 3  addressed by staff is cost.  If we look at the cost of the

 4  two systems, they're generally the same.  Intuitively this

 5  makes sense.  The electricity comes out of the wall or out

 6  of the grid, we process it, and we charge the battery.  So

 7  the bits and pieces that go into the charging system

 8  included in the connector are essentially the same and

 9  therefore the costs of the two systems ends up the same.

10            I don't think we should be confused by current

11  selling prices or alleged costs, because they don't really

12  reflect all the bits and pieces in volume production.

13            However, a key consideration as staff has pointed

14  out, is where do you put the money.  And there is a

15  difference between the inductive and conductive.  With

16  that conductive it's on-board and so the money stays with

17  the car.  The inductive system, you can move some of the

18  money to the infrastructure and take it off the car.

19            Nissan believes that one of the largest

20  impediments of the widespread adoption of EVs is the cost

21  of the vehicles.  So we move to do what we can to reduce

22  the cost of the vehicle.  We see the inductive system then

23  as one mechanism to do this.  It takes a few dollars off

24  the car and puts them on the ground.  So from a

25  manufacturer perspective, that's a good choice with this


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 1  criteria.

 2               The Board, of course, needs to address who pays

 3    for what's in the ground, and that's a very good question.

 4                               --o0o--

 5            MR. CASSIDY:  We would propose that the local

 6  community, a local government, perhaps a business that

 7  goes into the charging business itself can be responsible

 8  for this infrastructure.  We think that's appropriate that

 9  other groups become involved in the ZEV mandate as an

10  issue.

11                               --o0o--

12            MR. CASSIDY:  We've heard from staff about

13  efficiency.  Essentially the two systems are very much the

14  same.  We agree with the high level of power numbers that

15  staff has cited.  However, we would point out that the

16  on-board conductive does have a penalty in that the car

17  has to carry around its own charger all of the time.  So

18  you're forced to add this additional weight to the

19  vehicle, and that results in probably the same order of

20  magnitude, loss and efficiency, a one to two percent loss

21  in efficiency by carrying around your own charger.  So

22  when we look at the efficiency issue, we see, yes, they're

23  both pretty good, and it's really not a criteria to make

24  the decision.  They're very much the same.

25            CHAIRPERSON LLOYD:  Bob, would you disagree with


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 1  staff's comment that says high temperatures when there is

 2  a difference there?

 3            MR. CASSIDY:  No, I wouldn't.  That's a good

 4  issue.  It depends very much on the battery selection and

 5  the vehicle design.

 6            For example, the 20 percent of number cited is

 7  also vehicle and battery specific.  The Alter EV, as you

 8  probably know, uses a lithium ion battery.  And its

 9  capability is such that it can sustain a high power level

10  of charging longer than some of the other batteries.

11            So, again, it's very subtle.  I might add that

12  the differences in the efficiency are very small compared

13  to vehicle fuel economy, if you will.  So we're looking at

14  a very small number.  I guess I would suggest that the

15  number is so close and so small again it shouldn't be the

16  basis for a decision.  It shouldn't be the selection

17  criteria.  They are very much the same.

18                               --o0o--

19            MR. CASSIDY:  Real world durability.  This is

20  probably the key concern for Nissan over the proposed

21  choice of the conductive charger.  We've had good

22  experience with the inductive system.  As you know, this

23  is a simple plastic paddle.  It slides in, it slides out.

24  There's no moving parts.  It's hard to break it.

25            The conductive system is in contrast made up of


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 1  many pins and springs, a protector plate.  It is

 2  mechanically reasonably complicated.  We feel that it is

 3  subject to outside contamination and could experience

 4  deterioration.

 5            Nissan originally looked at conductive years ago,

 6  and dismissed it because of those problems.  We understand

 7  the new connector is improved and we support that work and

 8  are pleased to have seen that.

 9            However, we don't think that it has had

10  sufficient time in the market to really judge its real

11  world durability.  We understand its past construction

12  tests, if you will.  We need to let the market beat it up

13  for awhile and see how it really does.

14            CHAIRPERSON LLOYD:  What does Renault use?

15            MR. CASSIDY:  Renault uses a conductive system.

16  In Europe, there are many different conductive systems.

17  And I don't believe they're using that Avcon connector.

18  It's an older style connector.

19                               --o0o--

20            MR. CASSIDY:  Ease of use.  Again, this is a

21  tough issue.  We think that the paddle system is just a

22  slam dunk.  You can push it in.  You can pull it out.  We

23  happen to think the consumers really respond to that and

24  find it easy and contemporary and modern and all the

25  things we want in the EV.


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 1            As you know, the conductive system is a little

 2  bit more complicated.  Is this a deal breaker?  I don't

 3  know.  But clearly we prefer the inductive for our

 4  vehicles.

 5                               --o0o--

 6            MR. CASSIDY:  The next issue I'm calling future

 7  technology.  As you may know, Nissan is very active with

 8  Station Car Programs in Japan.  One program is a joint

 9  program with Toyota as well.  As Station Car Programs

10  require a Robust communication system between the vehicle,

11  its charger and then the control center for the Station

12  Car Program.

13            When we're transferring information such as state

14  of charge, vehicle trouble codes, if you will, the

15  reservation system, access codes, consumer codes, things

16  that we need to make the program run, we dismissed the

17  conductive system because we had concerns about a reliable

18  communication connection.  The mechanical system just

19  isn't as robust as we feel we have with the infrared,

20  which is included in the inductive system.

21                               --o0o--

22            MR. CASSIDY:  So looking at these issues,

23  especially the end-use durability in a communication

24  issue, we offer the following recommendation.  We'd like

25  you to delay consideration for the selection of a


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 1  connector standard for at least one year.  And during this

 2  one year period, we ask that you appoint an independent

 3  expert panel to evaluate the market and system

 4  performance, and make the choice at that time.

 5            Thank you.

 6            CHAIRPERSON LLOYD:  Thank you very much.

 7            Questions or comments from the Board?

 8            Professor Friedman.

 9            BOARD MEMBER HUGH FRIEDMAN:  I think the staff's

10  evaluation in comparing the analysis indicated that the

11  inductive system was easier to use.  But, in your view,

12  would the conductive connector be any less easy to use

13  than using the gas, opening the gas tank door, and

14  unscrewing the gas cap and sticking in the filler?

15            MR. CASSIDY:  In terms of ease of use, if I had a

16  way, I guess, to refuel my Nissan, that was slick as a

17  paddle and everybody else was using gas pumps, we'd market

18  it and sell them like crazy, because it's new and easy to

19  use.

20            We think it's a marketing tool that is effective.

21  We think consumers would like it and we think we'd like to

22  do it.  Is it a deal breaker?  I don't think so.

23            Again, assuming that the real world durability is

24  present, and we simply don't know, we're a little bit

25  reluctant to go with this standard at this time and start


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 1  putting them on vehicles when we ourselves are not

 2  confident they will hold up.

 3            BOARD MEMBER HUGH FRIEDMAN:  What do you think

 4  one year will do?

 5            MR. CASSIDY:  I hope that one year gives us

 6  enough data with these types of connectors to, at least

 7  from Nissan's perspective, to be more comfortable in

 8  saying, okay, maybe this isn't our first choice, but the

 9  choice is okay.

10            At this point, we're reluctant to say the choice

11  is okay.

12            CHAIRPERSON LLOYD:  How many additional cars does

13  staff expect to be out there, so that what -- if we are

14  looking now, and staff has looked at the experience to

15  date, given say X vehicles out there worldwide, now in one

16  year would give us X plus Y, what percentage are we

17  expecting that to be?

18            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  Well, a

19  one year delay, assuming a decision was made in one year

20  from today, and therefore the implementation would need to

21  be delayed from 2006 to 2007, it would result in

22  approximately -- a little over -- well there's the chart

23  right there.  Boy, talk and there it is.  I was going to

24  say a little over 10,000 and the point is there it's about

25  12,000 additional vehicles on the road.


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 1            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  Dr.

 2  Lloyd was asking how much of a --

 3            CHAIRPERSON LLOYD:  No, the point is -- what I'm

 4  looking at as an independent panel what increased database

 5  do they have available during this time?

 6            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  The

 7  question being how many more vehicles do we expect on the

 8  road over the next year?

 9            CHAIRPERSON LLOYD:  Yeah, correct.

10            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  And the

11  number of vehicles, what we're seeing, is there are some

12  vehicles starting to come on the road due to the earlier

13  production of -- higher early production credits the Board

14  gave in January, that number is probably over 500, but

15  less certainly than 2,000.

16            CHAIRPERSON LLOYD:  So a percentage increase but

17  not a significant percentage increase.  And obviously

18  during that time period there is not much durability.

19            DEPUTY EXECUTIVE OFFICER CACKETTE:  I don't think

20  you can postulate that we'd gain a lot of durability

21  experience.  We already pretty much know the consumer

22  response is pretty good.  It's a little easier.  We have a

23  bigger sample, I suppose, of consumer reaction, but the

24  consumer reaction has been positive in both cases, so I

25  don't think we've really anything from that.


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 1            MR. CASSIDY:  Dr. Lloyd, I'd also bring up that

 2  our second point is an independent group to look at this

 3  so we can more systematically tabulate the data.  Our

 4  feeling is much of it seems to be anecdotal, very limited

 5  sample where somebody goes here and their connector didn't

 6  work or there were two choices and neither of them were

 7  the one they needed.

 8            So we really think the independent panel could be

 9  a real plus to try to put these things in a, what we would

10  say, is a more even perspective.

11            CHAIRPERSON LLOYD:  It might take us six months

12  to get the independence of that panel established.  I mean

13  my concern would be that.

14            MR. CASSIDY:  I understand.

15            CHAIRPERSON LLOYD:  Thank you.

16            Ms. D'Adamo.

17            BOARD MEMBER D'ADAMO:  Well, Mr. Cassidy, I

18  appreciate your testimony, especially since your company

19  utilizes both systems, so I think that what you have to

20  say about the comparison is particularly helpful.

21            I would question, however, ease of use, that it's

22  anymore than perhaps a marginal difference, having

23  utilized both systems.  What I'd like to ask you, though,

24  are a couple of questions regarding efficiency and cost.

25  And I'd like to hear from you and then also have staff


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 1  respond.

 2            On cost you're saying that there is a difference

 3  because of where you place the cost, whether it's on the

 4  vehicle or on the charging system.  Could you be more

 5  specific about those figures.  And, secondly, regarding

 6  efficiency, if the on-board conductive chargers add to the

 7  weight and reduce efficiency, how much weight and how much

 8  of a loss of efficiency?

 9            MR. CASSIDY:  Yes, I understand.  Let me answer

10  the second question, because I have firm numbers.  For the

11  Alter EV my technical staff says it would be approximately

12  50 kilograms to introduce the on-board charger and the

13  necessary vehicle structure changes to have it pass the

14  quality appliance procedures.  They estimate a one to two

15  percent reduction in efficiency.

16            Turning to the first question regarding how much,

17  I have not taken that pencil to paper and calculated that.

18  Off the top of my head looking at the pieces, you're

19  probably in the 20 percent of the dollars on conductive

20  system on the ground versus maybe 60 percent of dollars of

21  inductive system.

22            Mike Wolterman from Toyota is speaking on the

23  technical guide, perhaps he can give us an overview.

24            BOARD MEMBER D'ADAMO:  Could staff respond to

25  those two questions?


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 1            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  Well,

 2  I'll respond, but then I also want to point out that there

 3  are technical representatives of the conductive industry

 4  that will also be providing some input especially on the

 5  impact of the efficiency for the conductive charger being

 6  on board the vehicle, that that information will probably

 7  be useful, because there are some scenarios in the future

 8  that will significantly affect that.

 9            But in terms of the cost that we have -- as was

10  stated, the primary cost for the inductive is off-board

11  the vehicle.  The primary cost for the conductive is

12  on-board the vehicle.  Both those costs are expected to

13  reduce in the future.  We evaluated current and future

14  costs on-board and off-board.  Our estimations are

15  certainly that, without a doubt, conductive costs are less

16  expensive off-board the vehicle, and as a system today,

17  you know, in total today.  And the off-board, the

18  off-the-vehicle portion is important because that's the

19  part if we want public infrastructure that people are

20  going to have -- the extra costs people are going to have

21  to pay.

22            In the future it is still very clear to staff

23  that the off-the-vehicle portion of conductive will be

24  less expensive than the on-the-vehicle portion.  The only

25  point in question is whether we've recently received some


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 1  information that the system costs in the future, that the

 2  inductive may be able to get to the point where conductive

 3  could get on the system cost basis.

 4            If those optimistic projections come true, then

 5  the on-board and off-board could get potentially to the

 6  same location in the future, although the off-the-vehicle

 7  portion would remain less for conductive.

 8            BOARD MEMBER D'ADAMO:  I was hoping for something

 9  a little more specific.

10            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  In

11  terms of specific numbers?

12            BOARD MEMBER D'ADAMO:  Um-hmm.

13            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  The

14  dollar amounts.  We showed some -- we provided some

15  numbers in the future, system costs in the lead for

16  conductive are about $700 for a city vehicle, about $900

17  for a full function vehicle.

18            Previously, using our estimates, we had thought

19  inductive would be well over $1,000 for the system.  We

20  recently received some information from General Motors

21  that believes they can, through technological

22  advancements, volume reductions, they can get down to

23  comparable cost reduction levels for conductive.

24  Hopefully, they can.

25            The off-board portion currently is already for


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 1  conductive at $350.  We would expect that to continue to

 2  have cost reductions in the neighborhood of 50 percent.

 3            BOARD MEMBER D'ADAMO:  Thank you.

 4            CHAIRPERSON LLOYD:  Thank you very much.

 5            Thanks, Paul.

 6            Michael Wolterman, Toyota, Tom Austin, and then

 7  Greg Hanssen.

 8            (Thereupon an overhead presentation was

 9            presented as follows.)

10            MR. WOLTERMAN:  Good morning.  My name is Mike

11  Wolterman.   Can you hear me okay?

12            My name is Mike Wolterman and I'm with the Toyota

13  Technical Center in Ann Arbor, Michigan and I'm here

14  representing Toyota Motor Corporation.

15                               --o0o--

16            MR. WOLTERMAN:  And first I'd like to discuss

17  Toyota's experience with charge systems.  As you're aware,

18  Toyota adopted the conductive charge system using Yazaki's

19  coupler for the 1998 model year RAV4 EV.  And we began

20  using the inductive system on our 1999 model year RAV4 EV.

21            Toyota is in the unique position of being the

22  only automaker in the world that has had and is currently

23  operating electric vehicle fleets using both conductive

24  and inductive charge systems.

25            Given our experience with both conductive and


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 1  inductive charge systems, we are the only company that can

 2  provide a comparison of these systems based on our

 3  firsthand experience.  A key point here is that we started

 4  with the conductive system, and through our own analysis

 5  decided to switch to the inductive system.

 6                               --o0o--

 7            MR. WOLTERMAN:  Today, I'd like to discuss

 8  several points with you, one being a comparison of the

 9  inductive and conductive systems.  This is based on our

10  experiences both in the lab and the field.  And I would

11  like to discuss our concerns with the current conductive

12  recommended practice.

13            Specifically, its ability to become an

14  international standard, the fact that the recommended

15  practice is still being developed, the lack of geometric

16  tolerance data, concerns over the interoperability of the

17  coupling and the lack of mandatory communications.

18                               --o0o--

19            MR. WOLTERMAN:  Based on our experience, we have

20  found inductive to be a better system than the conductive

21  system.  This chart shows the results of our experience

22  with the General Motors and all Toyota works inductive

23  systems, and the Yazaki and Avcon conductive systems.

24            These areas are discussed further in our written

25  comments and I'm going to summarize this chart here this


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 1  morning.

 2            Concerning ease of use, staff has already

 3  addressed that issue.  As far as safety, durability and

 4  reliability, the Avcon coupling conductive system relies

 5  on pressure contacts, moving parts, springs and seals.

 6  And during this reliance, we are concerned that the

 7  durability and the reliability of the system over time may

 8  deteriorate.

 9            In our opinion, these issues also foster a safety

10  concern.  Communications is a key component for station

11  car programs and technological advances.  The inductive

12  system utilizes an infrared communications system, which

13  is standardized worldwide and is the same system that is

14  used by your TV remote control, while the conductive

15  system's communication is optional, and I'll discuss this

16  issue further later on.

17            As far as societal costs, efficiency, complexity,

18  we're configuring the systems with like features.  These

19  are similar between the two technologies.

20            Packaging the charge system, especially on

21  smaller vehicles, such as the Ecom or the Nissan

22  Hypermini.  It's easier for the inductive system because

23  the charge port is smaller and the charger is located off

24  the vehicle.  This also results in favorable on-vehicle

25  weight.


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 1            As far as the infrastructure is concerned, staff

 2  in their initial report stated that 60 percent of the

 3  charges in the State of California were inductive.

 4            And finally, the potential for advanced

 5  technologies for both of these systems is there.  However,

 6  one of the points is that neither the inductive nor the

 7  conductive recommended practices, at this point,

 8  acknowledge any advanced technology, such as Level 2 plus

 9  or vehicle-to-grid power.

10            So overall, we believe the inductive system to be

11  superior to the conductive system.

12                               --o0o--

13            MR. WOLTERMAN:  Our concerns related to

14  conductive recommended practice.

15            One is the ability for it to become an

16  international standard.  All the automakers in this room

17  are building vehicles for the worldwide market.  And our

18  vehicles must be designed to meet international standards.

19  It is very costly to design and package one vehicle for

20  one market and another vehicle for the rest of the world.

21            In this regard, the inductive system with the

22  small paddle has been accepted, as an IEC Committee draft.

23  And that draft is now in the review process to become an

24  international standard.

25            In addition, the small paddle inductive coupler


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 1  has been standardized in the US as an SAE recommended

 2  practice J7273, and in Japan as a Japan electric vehicle

 3  standard G107.

 4                               --o0o--

 5            MR. WOLTERMAN:  The IEC started to consider the

 6  standardization of the conductive coupler last year.

 7            However, based on the information that I have

 8  here, there is currently no charge for coupling the

 9  configuration of conventional data in this draft.  We are

10  concerned that the Japanese and the European auto makers

11  that produce small vehicles may not accept the buck type

12  coupler due to the size and the complexity.

13            If the IEC ultimately decides to standardize a

14  coupler that is not Avcon's coupler as their standard, the

15  conductive recommended practice may need to be amended to

16  reflect that.

17            As I mentioned earlier, it's costly to design and

18  package a vehicle for a specific region, as compared to a

19  vehicle that meets worldwide standards.  And we are

20  concerned that if the ARB decides to standardize the

21  coupler at this time, the conductive charge infrastructure

22  in California might need to be changed again in the future

23  as these standards evolve.

24                               --o0o--

25            MR. WOLTERMAN:  Since we do not know what form


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 1  international standards will take in the future, we have

 2  some serious concerns with the use of the conductive

 3  recommended practice.  Specifically, it is now in a draft

 4  form, and as a matter of procedure draft documents are not

 5  referenced in SAE documents, and as such should not be

 6  reference in the ZEV regulations.

 7            As the conductive recommended practice evolves,

 8  the contents may become unacceptable to what the ARB is

 9  looking for.  And I'm curious as to what might happen to

10  the ZEV regulations if the conductive recommended practice

11  were to be substantially changed.

12                               --o0o--

13            MR. WOLTERMAN:  In the current version the

14  conductive recommended practice, there is no geometric

15  tolerance data.  This can be added.  I am one of the two

16  people on the SAE Charging Systems Committee reviewing and

17  trying to try to make the two a recommended practice.

18  However, this review is not complete and I cannot tell you

19  today that the data I've seen can be used to build

20  interoperable components.

21            As a member of the subcommittee reviewing these

22  documents, I'll take some of the responsibility for this

23  tolerance data not being in the current draft.

24                               --o0o--

25            MR. WOLTERMAN:  Another concern is


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 1  interoperability or compatibility from the parts from

 2  various manufacturers.  There is no process in place to

 3  ensure the interoperability between different

 4  manufacturers.  This interoperability needs to address

 5  both the physical and the communications areas.

 6            If consumers are confused today about the

 7  existence of the two charging systems, imagine how

 8  confused they will be when there is only one conductive

 9  charging system, but the connector from supplier A doesn't

10  fit into the inlet from supplier B or the connector from

11  supplier C doesn't communicate with the inlet from

12  supplier D.

13            It should be noted that even though TAL and GM

14  worked together to develop the small inductive system, our

15  first units were not interoperable.

16                               --o0o--

17            MR. WOLTERMAN:  In addition, the conductive

18  recommended practice does not require communications for

19  Level 1 and Level 2 charging.  Communications will be

20  required for station car projects, neighborhood car

21  projects, future technologies.  Even if the conductive

22  recommended practice were changed to require

23  communications, most of the existing infrastructure does

24  not support it.

25            And the communications specified in conductive


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 1  documents, specifically SAE JA1850, which is multiplexing

 2  and SAE 2293 will be obsolete by the year 2007.  Some

 3  other types of communications, such as infrared which is

 4  where we're using the inductive or blue tooth which is a

 5  2.4 gigahertz radio, is required if conductive is to be

 6  operable in the future.

 7            In addition, message sets including header and

 8  data fields need to be developed and communications

 9  interoperability to the various manufacturers' gateways

10  need to be verified.

11                               --o0o--

12            MR. WOLTERMAN:  Given these unknowns, it is

13  virtually impossible for the automakers to use the

14  conductive recommended practice to design future vehicles.

15  This does not mean to imply that the inductive recommended

16  practice is a Level 2 standard.  But the inductive

17  recommended practice is at least one iteration ahead of

18  the conductive practice, in that we have already addressed

19  communications and interoperability issues.

20            In addition, a decision here today for either

21  conductive or inductive will only transfer this debate

22  from here to SAE Charging Systems Committee.  A group of

23  about ten volunteers will now have to argue these issues,

24  specifically can we build partiality drawings, do we need

25  communications, are they interoperable?  And this


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 1  committee is not the place for this debate to take place.

 2            These recommended practices are not mature.  They

 3  are evolving, and they need to be allowed to evolve

 4  naturally, not by force.  Force of these recommended

 5  practices will only result in a substandard document.

 6                               --o0o--

 7            MR. WOLTERMAN:  A major concern for Toyota is the

 8  fact that if the ARB chooses conductive as a single

 9  standard, then the ARB is requiring Toyota to place a part

10  onto its electric vehicles that Toyota does not have

11  confidence in and has chosen not to use, a part which

12  could effect the safety and well-being of our customers.

13                               --o0o--

14            MR. WOLTERMAN:  To summarize, there are too many

15  concerns with conductive to choose conductive as a single

16  standard.  It's actually too soon to choose either

17  conductive or inductive as a single standard.  They both

18  need more time to mature.

19            And if a single standard must be chosen, the

20  inductive system should be chosen, since the recommended

21  practice is more refined at this point in time than the

22  conductive recommended practice.

23                               --o0o--

24            MR. WOLTERMAN:  We believe the marketplace should

25  make the final decision.  The marketplace will reward the


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 1  system that meets the consumer's requirements and punish

 2  the system that does not.  I realize the marketplace is

 3  slow to make a choice, but the losing technology cannot

 4  blame anybody but itself for its failure.

 5            If this is not an acceptable solution, then I

 6  request that the Board appoint an independent expert panel

 7  to evaluate the merits and the demerits of the conductive

 8  and inductive systems, and make a recommendation to the

 9  Board for a single standard.

10            I'd like to also state that a request came up as

11  far as the additional time in delaying this.  That would

12  be helpful in the design process, but I'm not sure it

13  would change our opinion at this point in time.

14            CHAIRPERSON LLOYD:  Just to alert everybody,

15  after this witness we're going to give a ten-minute break

16  for the court reporter.

17            Professor Friedman.

18            BOARD MEMBER HUGH FRIEDMAN:  Mr. Wolterman, if we

19  were to pursue your suggestion and recommendation and seek

20  to appoint an independent panel, and that independent

21  panel, after evaluating the two systems, recommended also

22  as the staff has, a conductive, as far as you're

23  concerned, would that put the matter to rest?

24            MR. WOLTERMAN:  Yeah.  As Toyota, we would agree

25  with that.  If that independent panel came back to you and


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 1  said our recommendation says --

 2            BOARD MEMBER HUGH FRIEDMAN:  And how do you --

 3  what do you mean by independent panel?

 4            MR. WOLTERMAN:  I would probably let the people

 5  who are knowledgeable in the area, but not with any

 6  current or past ties directly to conductive or inductive,

 7  somebody who --

 8            BOARD MEMBER HUGH FRIEDMAN:  Without any past

 9  ties to any automobile manufacturers?

10            MR. WOLTERMAN:  Well, that potentially, too.  How

11  do you get a truly independent panel, I guess, is a little

12  tricky.  I can appreciate the difficulty in doing that,

13  but, you know, some of the professors from well known

14  universities, some knowledgeable people --

15            BOARD MEMBER HUGH FRIEDMAN:  Now, you're talking.

16            (Laughter.)

17            BOARD MEMBER HUGH FRIEDMAN:  Never done any

18  funded research, yeah.

19            (Laughter.)

20            CHAIRPERSON LLOYD:  One question I had, that

21  you're working on a volunteer basis on coming up with an

22  SAE standard for the conductive system, can you explain

23  why you at Toyota would spend some time, given the fact

24  that it's chosen the inductive system?

25            MR. WOLTERMAN:  Well, given the activities going


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 1  on here, it's imperative that both the systems, conductive

 2  and inductive, become built to recommended practices.  And

 3  at the May 10th meeting of the SHR System Committee, which

 4  addressed both inductive and conductive.  And hopefully

 5  because you haven't distinguished between those two, when

 6  they're there, they're working on both of them.

 7            As I mentioned, we're not asking -- that were

 8  included in the proposed draft.  So myself and Tom

 9  Cartwright are taking on the responsibility to make that

10  more of an ability to use backups and address the issues,

11  and is there enough data here, can someone pick this up

12  and actually go forward and build this without having to

13  go to the conversion systems?

14            CHAIRPERSON LLOYD:  Would it be fair to say that

15  given the fact that we're not going to require this until

16  2006, at the earliest, and if we did decide conductive

17  that that may spur the SAE committee to move faster?

18            MR. WOLTERMAN:  It would spur the SAE Committee

19  to move faster, but I think there may still be a lot of

20  issues that need to be resolved, but we may move faster

21  and it may not take any less time.  As I mentioned there's

22  still issues with communications that need to be resolved,

23  interoperability issues would be resolved.

24            So I'm not sure if we're cutting any time off.

25            CHAIRPERSON LLOYD:  Any questions from my


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 1  colleagues on the Board?

 2            Mr. McKinnon.

 3            BOARD MEMBER McKINNON:  Did I understand you

 4  correctly that you felt that the SAE process with ten

 5  volunteers wasn't the best way to set the bill to do

 6  standards?  I mean, it seems counterintuitive to your

 7  argument so far that we should help do that.

 8            MR. WOLTERMAN:  All I'm implying is that SAE is a

 9  volunteer effort.  These people are there not representing

10  their company, but representing themselves.  And as such,

11  of course, their companies support their being there, but

12  as such, it's not something that companies are going to

13  allow people an unlimited amount of time to do that, to

14  spend developing these standards.  It's a slow process,

15  and it's not something that I mean -- we're getting ready

16  to develop, I believe, the current draft of a document,

17  but the current draft still needs more refinement to make

18  it the standard to address the issues that I've brought up

19  today.

20            BOARD MEMBER McKINNON:  Thanks.

21            CHAIRPERSON LLOYD:  Okay.  Thank you very much

22  indeed.

23            We'll take a ten minute break because again, we

24  have a long agenda ahead of us today, so just ten minutes,

25  if that's okay with the court reporter, and then we'll


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 1  start up with Tom Austin right after the break.

 2           (Thereupon a brief recess was taken.)

 3            CHAIRPERSON LLOYD:  I'd like to restart the

 4  meeting, please.

 5            Welcome, Tom, I'm still used to looking over

 6  there.

 7            MR. AUSTIN:  All set.

 8            CHAIRPERSON LLOYD:  Yes, thanks.

 9            (Thereupon an overhead presentation was

10            presented as follows.)

11            MR. AUSTIN:  Good morning, Mr. Chair.  I'm Tom

12  Austin, senior partner of Sierra Research, today providing

13  testimony on behalf General Motors and Toyota.  I'll start

14  by saying that General Motors concurs with the testimony

15  that you just heard from Toyota and Nissan and will not be

16  addressing that issue.  I'm addressing a totally separate

17  issue, the vehicle to grid power services issue.

18            Next.

19                               --o0o--

20            MR. AUSTIN:  The staff report cites vehicle to

21  grid power services as one of the justifications for a

22  conductive charging design requirement by saying that

23  deployment of EVs with vehicle-to-grid power delivery

24  capability would provide another source of value to the

25  owner of the vehicle, and that while the vehicle to grid


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 1  power flow from inductive charges would be possible, it

 2  would be cost prohibitive.

 3            Our analysis concludes that the potential for

 4  vehicle to grid power flow is not a sufficient reason to

 5  require a conductive charging requirement.  Vehicle to

 6  grid power delivery doesn't come close to providing an

 7  economic benefit to the owner as my analysis will

 8  describe.

 9                               --o0o--

10            MR. AUSTIN:  That's a different conclusion than

11  other people reached.  And the reason, the conclusion I've

12  come to, is different is listed on this slide.  Other

13  analyses of this issue have totally ignored the effects of

14  battery life on using the vehicle for vehicle to grid

15  power transfer.

16            In addition, the analyses that you've seen from

17  others have used the current peak electricity crisis as

18  the basis for the economics of this process in the future.

19            Finally, there's been an insignificant

20  attention -- inadequate attention paid to the overlap

21  between peak electricity demand period and peak travel

22  demand period.

23            And, finally, there's been no attention paid to

24  the infrastructure and importantly administrative costs

25  associated with the vehicle to grid power transfer.


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 1                               --o0o--

 2            MR. AUSTIN:  Battery life does not exceed the

 3  vehicle life in electric vehicles.  And so shortening the

 4  battery life with additional charge/discharge cycles must

 5  be accounted for.  There have been projections from

 6  battery producers that the cost of nickel metal hydride

 7  batteries in high volume may come down into the range of

 8  $250 per kilowatt hour as the wholesale price to an OEM.

 9            That will translate into roughly a $500 per

10  kilowatt hour retail price for replacement battery to the

11  owner of electric vehicles.  You've also heard people talk

12  about nickel metal hydride battery life being in the range

13  of thousands of charge/discharge cycles.

14            If you want to look at what the damage, economic

15  damage, to the battery is associated with extra

16  charge/discharge cycles, you merely have to divide the

17  cost per kilowatt hour by the cycle life and it translates

18  into 50 cents per kilowatt hour as the additional battery

19  cost the owner will end up incurring if the vehicle is

20  used for vehicle to grid power transfer.

21                               --o0o--

22            MR. AUSTIN:  Charging/discharging losses are

23  another factor that adds to cost.  To send a kilowatt hour

24  back to the grid, you're going to have to use more than a

25  kilowatt hour drawn from the grid to charge the battery.


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 1  Charging/discharging losses are typically about 30

 2  percent.  That means to send a kilowatt hour back to the

 3  grid it's going to be necessary to purchase 1.4 kilowatt

 4  hours.

 5            If you look at the current prices being charged

 6  by Southern California Edison for off-peak recharging,

 7  which are eight cents per kilowatt hour, that means it's

 8  going to cost 11 cents for every kilowatt hour if it's

 9  transferred back to the grid.

10            And accounting for transmission losses it also is

11  going to translate into higher greenhouse gas emissions

12  associated with the electricity supply, because of the

13  fact that we end up using more fossil fuel to provide the

14  electricity with vehicle to grid transfer as part of the

15  process.

16                               --o0o--

17            MR. AUSTIN:  This graphic shows the practical

18  problem associated with the concept, where I have

19  overlaying on the same graph the current marginal cost of

20  electricity that's experienced by Southern California

21  Edison showing that for summer weekday conditions, the

22  price of electricity, the cost of electricity, peaks at

23  about 3:00 p.m., which is precisely the beginning of the

24  afternoon commute period.

25            So any vehicle that's used to sell electricity


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 1  back to the grid when it's most economic to do so, will

 2  end with a depleted battery and not be available for use

 3  during the p.m. travel period.

 4                               --o0o--

 5            MR. AUSTIN:  You have to account for what would

 6  be called the opportunity cost of not having the vehicle

 7  available for use during normal commuting periods.  I've

 8  done a first order approximation of what that might be by

 9  assuming in this example that someone rents another

10  vehicle for summertime weekdays in order to dedicate the

11  electric vehicle for use by the grid.

12            If you do that, we end up with the opportunity

13  costs being $1.67 per kilowatt hour for the cost of coming

14  up with the replacement transportation if the vehicle is

15  going to be tied up providing power back to the grid.

16                               --o0o--

17            MR. AUSTIN:  The next slide please.  Also, most

18  of the analyses that others have published in this area

19  use current electricity costs, but current costs of

20  electricity are truly an aberration.  By 2002 our estimate

21  is that the cost of electricity during peak periods is

22  unlikely to exceed 15 cents per kilowatt hour.  That's

23  because there are many new energy efficient power plants

24  coming on line.

25            The electricity production costs from these power


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 1  plants is going to be well under ten cents per kilowatt

 2  hour, even if natural gas prices are on the high side.

 3  And unless there are significant new disincentives imposed

 4  on energy producers by the government, we think supply and

 5  demand is going to be back in balance within the next

 6  couple of years.

 7            And the long range forecast for what the value

 8  might be of electricity sold back to the grid is going to

 9  be way down from the 50 to 60 cent per kilowatt hour

10  numbers that are consistent with what current prices have

11  been.

12                               --o0o--

13            MR. AUSTIN:  Here's a summary of what the math

14  looks like.  The 50 cent per kilowatt hour prices that

15  we've seen recently are not going to be with us in the

16  future.  I think a more realistic projection of the value

17  of power transferred back to the grid during peak periods

18  is about 15 cents per kilowatt hour.

19            Then if we look at the elements of cost to the

20  vehicle owner associated with providing electricity back

21  to the grid, we see that battery life reduction is in the

22  neighborhood of 50 cents per kilowatt hour, the cost for

23  recharging the battery is about 11 cents per kilowatt

24  hour.

25            And the opportunity costs for not using the


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 1  vehicle could be $1.67 per kilowatt hour, if you want to

 2  look at rental car costs as the replacement for a total

 3  cost per kilowatt hour of $2.28.

 4                               --O0o--

 5            MR. AUSTIN:  Our conclusions are that if you

 6  account for the opportunity costs of not having the

 7  vehicle available for the afternoon commute period, the

 8  cost to the vehicle owner of providing electric power back

 9  to the grid exceeds by more than a factor of ten the

10  likely value of that electricity and the compensation the

11  owner could conceivably obtain.

12            And even if you ignore the opportunity costs of

13  not having the vehicle available, if you assume this is

14  only being done by people who for some reason don't need

15  to drive their car in the afternoon during summer days,

16  and if you use current electricity prices, it's still not

17  economic because of the damage that's done to the battery

18  when it goes through additional charge/discharge cycles.

19            And when you consider what the cost of

20  electricity is likely to be in the near future when supply

21  and demand come back into balance, the economics of this

22  concept don't even come close to working.  You can look at

23  the assumptions that I've used.  You can change them by 50

24  percent or 100 percent and you're still not going to come

25  close to showing that this makes economic sense for


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 1  vehicle owners.

 2            So for that reason, we see this concept as

 3  providing no justification for a design requirement for

 4  conductive charge systems.

 5            Thank you.

 6            CHAIRPERSON LLOYD:  Thanks, Tom.

 7            Yes, Dr. Friedman and then Mr. McKinnon.

 8            BOARD MEMBER WILLIAM FRIEDMAN:  I need to better

 9  understand this opportunity cost of vehicles out of

10  service.  What is your assumption?  Are you assuming that

11  people are charging their batteries at peak commuter

12  times?

13            MR. AUSTIN:  No.  For this concept to generate

14  maximum revenue --

15            BOARD MEMBER WILLIAM FRIEDMAN:  You gave us a

16  graph and you showed us from 3:00 to 5:00 o'clock the cost

17  is the highest.  And what does that have to do with when

18  people charge their cars and have you factored in how many

19  people don't travel more than 100 miles in a day?

20            MR. AUSTIN:  Just to be clear, I'm not assuming

21  that anyone is charging their car during that period.

22  That's the period when the value of the electricity in the

23  vehicle's battery is the greatest.  That's the period when

24  you want to send it back to the grid to get the maximum

25  economic value out of this concept.


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 1            What I'm showing you here is that that is

 2  precisely the period when the vehicle is needed for the

 3  p.m. commute period, and so if we're going to use the

 4  vehicle to send power back to the grid, the vehicle is not

 5  going to be available for normal commute activity.

 6            This concept doesn't come close to working if

 7  you're talking about sending power back to the grid early

 8  in the morning or overnight, because the marginal cost of

 9  electricity is so low that you can't justify the

10  inefficiency of charging the battery and discharging it.

11            BOARD MEMBER WILLIAM FRIEDMAN:  I guess I

12  understand that.  But on the one hand you're talking about

13  the cost back to the vehicle owner and you're telling me

14  that that's the $1.67, that the vehicle -- that's your

15  cost as a vehicle owner from vehicle to grid transfer,

16  $1.67 per kilowatt hour.

17            Now, how in the world does that -- I own one of

18  these cars let's say, how do I see that $1.67?

19            MR. AUSTIN:  Let me explain it to you.  That is

20  if you assume that the vehicle is tied up sending power

21  back to the grid and can't be driven, but the owner still

22  needs transportation.

23            BOARD MEMBER WILLIAM FRIEDMAN:  I understand all

24  that.  My car is being charged at night, and where -- I

25  don't see that $1.67 anywhere.


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 1            MR. AUSTIN:  My analysis assumes the car is

 2  charged at night.  The point is in order for this concept

 3  to work economically or to come as close to working as it

 4  can, you have to discharge back into the grid in the

 5  mid-afternoon and late afternoon.

 6            That means you can't be driving the car.  If you

 7  need the car for transportation, that $1.67 per kilowatt

 8  hour is the cost of providing transportation with some

 9  other vehicle, like a rental car that you might use only

10  on summer weekdays, where there's a high demand for

11  electricity.

12            BOARD MEMBER WILLIAM FRIEDMAN:  Well, maybe that

13  works for you, but I still can't imagine any need for me

14  to drive any other vehicle or to give a damn about what

15  goes on in terms of my sending power back to the grid at a

16  time when I want to use the car.

17            I mean, it just, in the real world, makes no

18  sense to me for you to add $1.67 to $2.28 and tell me

19  that's what it really costs.

20            MR. AUSTIN:  What makes no sense is to assume

21  that people are actually going to be willing to send power

22  back to the grid in the afternoon when it's needed the

23  most when the primary purpose of the car can't be

24  provided.  You can't use it for transportation and send

25  power back to the grid.


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 1            BOARD MEMBER WILLIAM FRIEDMAN:  The primary

 2  purpose of the car is not to fortify the energy

 3  requirements of the State of California.

 4            MR. AUSTIN:  Exactly.

 5            BOARD MEMBER WILLIAM FRIEDMAN:  Whoever said it

 6  was.  The amount -- what the amount of electricity used

 7  for X thousand cars is a tiny blip on -- it's a pimple on

 8  the nose of what the energy requirements are for the State

 9  of California.

10            MR. AUSTIN:  I'm not disagreeing with that, but

11  when the staff report says there's this big economic value

12  to owners to send power back to the grid, I'm saying well,

13  that doesn't make sense because you can't send power back

14  to the grid and use the car for commuting.  If you're

15  going to tie the car up in that service, you have to look

16  at was that a good investment, what's the opportunity cost

17  of letting the car stay tied up connected to the grid as

18  opposed to having it available to drive.

19            BOARD MEMBER WILLIAM FRIEDMAN:  I understand.

20            CHAIRPERSON LLOYD:  Thanks, Tom.

21            Mr. McKinnon.

22            BOARD MEMBER McKINNON:  Yeah.  First of all, I

23  want to assure you that I'm not going to decide this issue

24  and this resolution today based upon this particular

25  benefit or not benefit or whatever.  It's nice if it


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 1  works.  If it doesn't, that's not what the major thrust of

 2  the decision is about today.

 3            But I do have some questions about the numbers

 4  you used.  And I'll give you a concrete example.  I drive

 5  four miles to work every day.  I have a battery that's got

 6  100 mile range that I drive surface streets actually 30,

 7  35 miles an hour.  So that 100 mile range is pretty real.

 8  That's a good number.

 9            So there's 96 miles of that range I don't need

10  every day.  I get real world conditions of Sacramento.

11  It's hot, and they're saying we might have rolling black

12  outs in the southern part of the city today around 3:00 or

13  4:00 in the afternoon.

14            I get off work at 6:00 o'clock at night, if I'm

15  lucky, okay.  I drive to work.  I plug in.  I program and

16  I say I'm willing to give up 50 percent of my battery.  I

17  only need four percent of it, but something might come up

18  today, whatever, I'm going to give up 50 percent of my

19  battery.  For people that drive further back and forth to

20  work, maybe they only give up ten percent or 20 percent or

21  whatever.

22            Are you calculating -- I mean, are you looking at

23  it as if people 100 percent discharge their battery at

24  that 3:00 p.m. -- prior to 3:00 p.m. or during the 3:00 to

25  7:00 period or whatever?  Is your calculation based upon


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 1  100 percent discharge?

 2            MR. AUSTIN:  No.  The numbers I used are not

 3  simply tied to 100 percent discharge.  If in the example

 4  you used, if you were going to cough up 50 percent of your

 5  battery charge back to the grid during the afternoon peak

 6  period, because you still have enough to drive home, my

 7  analysis indicates that that still would not be in your

 8  long-term economic interests, because it's going to

 9  shorten the life of your battery and the cost to you or to

10  the subsequent purchaser of that vehicle is going to

11  substantially exceed the return you're going to get by

12  selling that power back to the grid.

13            Batteries have a life, which is related to the

14  number of charging/discharging cycles they go through.  If

15  you decide to spend some of that life having your vehicle

16  committed to this type of a system, you have to be

17  prepared to replace the vehicle earlier than it otherwise

18  requires replacement.

19            And when you just run the simple economics of how

20  much will it cost me to replace the battery earlier

21  because I'm sending power back to the grid, it doesn't

22  pencil out.  That factor alone is enough to make it

23  uneconomical.

24            BOARD MEMBER McKINNON:  Well, okay, then let me

25  broaden this question to staff too.  Is an occasional


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 1  discharge unrelated to driving of 50 percent or 20

 2  percent, does that have the same kind of -- how do you put

 3  this -- do I lose battery life as if I was fully

 4  discharging the vehicle for having the cycle -- having to

 5  recharge the 50 percent or the 20 percent?

 6            DEPUTY EXECUTIVE OFFICER CACKETTE:  Well, I think

 7  if you discharge the battery -- the life of the battery is

 8  related to the discharge, so directionally, yes, you would

 9  lose some life, if you did this a lot.

10            But unfortunately the issue that's being

11  discussed is not relevant to where we saw the potential

12  advantages of vehicle to grid.  We did a study that went

13  out and looked at how could battery vehicles help our

14  electric system become more efficient.  And one of the

15  things was well, gee, when you run out of electricity in

16  the afternoon at some peak period, could we have all these

17  batteries dump, you know, their energy back into the grid,

18  the lights stay on.

19            And I think our conclusion was that that's not a

20  very good way of doing things for some of the reasons that

21  Mr. Austin set forth.  But what we did find was that there

22  was another vehicle to grid opportunity that wasn't

23  discussed here, and that is in the area of power

24  regulation.

25            The State pays $800 million a year to power


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 1  plants from the Independent System Operator to have them

 2  spun up and be just sitting there sort of idling ready to

 3  put a little bit of energy in here, take a little bit of

 4  energy out there, because this whole system has to stay in

 5  balance.  As you can guess sometimes there's too much

 6  juice over here and not enough here and voltages aren't

 7  quite right, et cetera.  So they pay power plants to be

 8  spun up and ready to regulate the quality of the power and

 9  the system.

10            And that's where electric vehicles might be a

11  really good match, because if they're plugged in, and not

12  all of them have to be plugged in, but it's going to occur

13  during all times of the day, but when they're plugged in,

14  they can be asked to put a little bit of juice back in to

15  help balance off, you know, a shortage of voltage or a

16  little bit of flow of electricity in one area and put it

17  back in a little bit later, and you wouldn't be going

18  through these 50 percent discharges, you'd be using all of

19  them as a way of kind of an accumulator or a buffer to the

20  system.

21            And that's where we think, because there's a huge

22  amount of money we spend on doing that in the electric

23  system today, that maybe battery vehicles could do it more

24  effectively.  Maybe the utilities could ultimately end up

25  paying for part of electric vehicles to provide that


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 1  service instead of paying it to a power plant to be spun

 2  up and ready to generate electricity when it doesn't need

 3  to be.

 4            And so the issue here, I think, we pretty much

 5  don't think it's a particularly attractive approach

 6  compared to this other one.  And we've, you know, rated

 7  whatever value you want to give to the potential of having

 8  electric vehicles play a part of regulating our

 9  electricity system is more likely to be on the one I

10  described than the one that Tom Austin described.

11            BOARD MEMBER McKINNON:  It's because the prices

12  end up much, much higher.

13            DEPUTY EXECUTIVE OFFICER CACKETTE:  Well, it's

14  not so much the price.  It's that the system has to pay a

15  power plant to be up when it didn't need to be up for an

16  example.  And when that occurs, that's a fairly expensive

17  item.  And if some of that money could go to subsidizing

18  electric vehicles to do the same approach, maybe giving

19  you free electricity, for example, when you're plugged in,

20  it would end up being -- we think it could end up being a

21  lot cheaper way to go for the State as a whole.

22            MR. AUSTIN:  I'm familiar with the concept that

23  Mr. Cackette is describing.  I focused on the analysis

24  that the Board has seen in the past.  I've done some

25  analysis of his other concept as well.  It also doesn't


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 1  pencil out, the potential value to the owners of electric

 2  vehicles is pennies.  The total cost the State incurs in

 3  doing this per electric vehicle in the future is not

 4  sufficient to justify the administrative costs and the

 5  time involved for people to plug their vehicles in when

 6  they normally wouldn't plug them in.

 7            CHAIRPERSON LLOYD:  Any other questions?

 8            One other comment, Tom.  On your first overhead,

 9  the second highlight you had, "...while vehicle to grid

10  power flow from inductive chargers is possible, it would

11  be cost prohibitive," from the staff report.  You didn't

12  address that comment.

13            MR. AUSTIN:  Well, the only point in raising that

14  is this was the rationale given in the staff report for

15  why the conductive option had more appeal.  And I'm not

16  disagreeing with this statement about it being more

17  difficult to do, vehicle-to-grid power transfer with

18  inductive.  It is possible.  I've not analyzed in detail.

19  I'm just saying the basic concept doesn't pencil out, so

20  it's not a reason for doing this.

21            CHAIRPERSON LLOYD:  I'm sure we'll hear some more

22  of this when I think that -- in the comments later on so

23  maybe we have some more questions.

24            Bob.

25            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  Very


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 1  quickly, the question of battery life and its connection

 2  to depth of discharge was sort of left floating.  And I

 3  think Mr. McKinnon brought it up.  I think that if you

 4  discharge a battery very modestly, that has much less

 5  impact on its life than if you go to the full 80 percent

 6  that we consider ending.

 7            So I think that that's the connection to what Tom

 8  was saying which is that if they're floating along and

 9  doing small charge/discharge cycles, that's not a terribly

10  significant impact on the battery life.

11            MR. AUSTIN:  That is true.  But in Mr. McKinnon's

12  example, if you're then using the battery to get home, and

13  discharging it more fully, the net effect is the same for

14  this concept as my analysis indicates.

15            If you only draw it down 40 or 50 percent to send

16  power back to the grid, but you still have to use it that

17  day to get home you're going to end up drawing it down

18  closer to 80 percent and the effect on cycle life is going

19  to be identical to what I've assumed in my analysis.

20            CHAIRPERSON LLOYD:  Yeah, but he goes four miles.

21            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  It

22  goes from 50 to 60 percent.

23            BOARD MEMBER McKINNON:  So as I understand your

24  argument, and I think it probably comes pretty much to a

25  wash, but if this kind of approach becomes a reality, then


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 1  it's probably going to behoove all of us to educate people

 2  on where those lines are where they work and where their

 3  battery works harder.

 4            In other words -- you know, I might decide to

 5  only give up 30 percent instead of 50 percent, based upon

 6  some set of knowledge of what it's going to do to my

 7  battery life.

 8            And so I think you raise real good points.  And I

 9  don't know that what you raise is even a factor in the

10  decision before us today.  It was in the report and you're

11  addressing that and I understand that.  I don't know if

12  it's a huge one for me.

13            But it certainly is one that anyway we go, if we

14  get involved in this grid transfer business, we better

15  consider it and we better think about how people's battery

16  life is affected and give people good data as far as

17  making good choices along the way.

18            Because if I found out, instead of giving up 50

19  percent, I could give up 30 percent and not -- and

20  maximize the efficiency of my battery, help out with the

21  power problem and get paid for it, then that would be the

22  choice I would make.

23            MR. AUSTIN:  I understand that.  And I think what

24  you'll find is that any really careful credible analysis

25  of this issue will show you why the utilities don't use


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 1  batteries for this function now.

 2            BOARD MEMBER WILLIAM FRIEDMAN:  Well, Tom, I need

 3  to apologize to you for being too dense in the beginning

 4  to understand where you're coming from on the transfer

 5  issue.

 6            It seems to me, though, that if we are going to

 7  depend in any way, shape or form on electric vehicles to

 8  solve the energy crisis in the year 2005 or 6, then I'm

 9  living in the wrong State.  I mean, you know, to me it's a

10  way that I can't imagine that that's going to be the

11  successful route to dealing with what we're trying to deal

12  with for the future in terms of energy supply and demand.

13            MR. AUSTIN:  We agree on that.

14            CHAIRPERSON LLOYD:  I think the good news you

15  had -- we're going to have plenty of electricity for next

16  year, so that was good news for all of us.

17            (Laughter.)

18            MR. AUSTIN:  We're permitting a lot of power

19  plants right now.

20            BOARD MEMBER HUGH FRIEDMAN:  I had one quick

21  question.  You're assuming lead acid battery?

22            MR. AUSTIN:  No, nickel metal hydride is what I

23  used in my analysis.

24            BOARD MEMBER HUGH FRIEDMAN:  So when I follow the

25  principle of discharging batteries as fully as possible


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 1  before recharging them, I'm pursuing a bad principle?

 2            MR. AUSTIN:  That's a good principle for nickel

 3  cadmium batteries, if you want to have the maximum power

 4  available.  But a lot of the new technology batteries do

 5  not require a deep discharge to have the maximum power

 6  available after recharge.

 7            BOARD MEMBER HUGH FRIEDMAN:  And lead acid and

 8  nickel metal hydride are the same in that respect?

 9            MR. AUSTIN:  Yes.

10            CHAIRPERSON LLOYD:  Lead acid you don't want to

11  discharge, as Bob mentioned.

12            MR. AUSTIN:  Don't have the same memory problem

13  on that as NiCads do.

14            CHAIRPERSON LLOYD:  Thanks, Tom.

15            We have Greg Hanssen, then Craig Toepfer and

16  David Packard.

17            MR. HANSSEN:  Good morning, almost afternoon.  I

18  didn't really intend to speak on vehicle-to-grid, but just

19  one quick note, if you have to jump through half as many

20  hoops as I had to jump through to get permission from

21  Edison to connect my solar array to the grid, then they've

22  got a ways to go, in my opinion.  I hope they can resolve

23  that.

24            My name is Greg Hanssen.  I'm the co-chairman of

25  the Production Electric Vehicle Drivers Coalition.  I'd


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 1  like to say here that my views here do not -- are not

 2  unanimous amongst the group, but I do speak on behalf of

 3  many of the members, and actually one infrastructure

 4  installer.

 5            I should also note that I have a vested interest

 6  in this, because my company is about to get some RAV4 EVs

 7  and so we are investing in some more magna chargers.

 8            And Toyota has said that they'll build as many as

 9  the market can take.  It's unfortunate that they're

10  limiting it to fleets right now, because I know a lot of

11  people who are still trying to get one.

12            For the record I am pro-conductive and I am

13  pro-inductive.  I'm here to basically argue for duel

14  standards or at least some relaxed method of achieving

15  your goals, you know, without all the harsh endings.

16            I do not support General Motors.  As a matter of

17  fact, I've spent much of my time and energy fighting

18  General Motors in the Legislature and we're preparing to

19  fight them in the court if need be.

20            But it's funny, some of the stuff here in this

21  staff report.  They say, "The proposed infrastructure

22  regulation will have several positive effects for EV

23  drivers and ultimately cleaner air for all of California."

24  I say, wow, that kind of reminds me of the sinister mirror

25  to mirror version of the GM lawsuit, which says that the


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 1  cost of the ZEV program will raise the cost of new cars in

 2  California.  And the people who hold on to their old cars

 3  will create more pollution.  Because it creates more

 4  pollution it goes against these federal laws and State

 5  laws and ARB rules and blah, blah, blah, blah, blah.

 6            It's basically a house of cards that falls apart

 7  if you don't buy into the silly assumption.  I don't

 8  believe that this main issue here is that public

 9  perception is going to be dramatically changed by going to

10  a single standard.  I think if you're worried about public

11  perception in the EV market, there are probably a dozen

12  much more critical issues that you really need to be

13  handling before you talk about whether consumers are

14  worried about inductive or conductive chargers.

15            You know, what is the range of the vehicles, is

16  it fast enough to go on the freeway, is it -- where do I

17  plug it in, how much does it cost to plug in, et cetera,

18  et cetera, et cetera?

19            I mean, if you've driven the vehicles, you've

20  been asked these questions.  So you know where the public

21  misperceptions are.

22            The duel charging standard isn't really that

23  critical of an issue.  As a matter of act, as an EV1

24  driver it's not an issue for me at all, because in

25  southern California anywhere I want to plug in they've got


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 1  an inductive charger.

 2            I mean, there aren't conductive chargers at all

 3  the sites, but just about every site has an inductive

 4  charger.  So as a big paddle EV1 driver I'm doing okay

 5  there.

 6            The staff report mentions that the perception

 7  issue could cause someone with the duel standards to be

 8  confused about whether or not they get an inductive or a

 9  conductive system for their garage.  But I have to ask is

10  that really better than the inductive driver who gets an

11  inductive vehicle and knows that his new charger is going

12  to be a doorstop in five or six years?  I mean, it sounds

13  to me that's a bigger negative there.

14            I'd like to go into the funding for the public

15  infrastructure.  I have to ask, we all know that GM for

16  all of its faults has put a lot of effort into the

17  inductive infrastructure right now and maintaining that

18  infrastructure.

19            If we select conductive as the standard, do you

20  really think Nissan, Toyota or General Motors is going to

21  put a penny into the conductive Avcon infrastructure?

22  Chrysler is not, because they're just building NEVS.  Ford

23  has told me that they have no intention of supporting

24  public infrastructure because most of their vehicles are

25  fleet vehicles.  And Honda, so far, has a less than


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 1  perfect record of supporting the conductive

 2  infrastructure.

 3            So if you mandate conductive, it seems to me that

 4  all of the burden of adding these chargers will fall on

 5  the public.  It would be public money or just very

 6  generous shopping store owners or something like that.

 7            And then we also get into the maintenance issue.

 8  GM has also been very good about maintaining their

 9  chargers, even out-of-warranty chargers they've replaced.

10  I've been told by some of the installers from Clean Filed

11  Connection that, at one point, the issue was so bad with

12  EV1 that they were told not to repair, not to pull out the

13  bad conductive chargers in the field, because they simply

14  weren't being reimbursed for these costs.

15            Now, I mean you can't blame them.  They're a

16  small company.  I mean, I'm sure they would grow

17  tremendously under this regulation, but there is something

18  to be said for a big company with deep pockets buying the

19  infrastructure and supporting the infrastructure and

20  maintaining it.  And so I think that's one point where

21  this rivalry of conductive, inductive is actually kind of

22  healthy.

23            In the staff report they mentioned the effect on

24  employment in California.  And somehow they know that

25  conductive is going to be better for employment in


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 1  California and not that we're talking great numbers of

 2  people here, but the last time I checked more people work

 3  at GM in accordance with the inductive system.

 4            And the last thing I'd like to say is that for

 5  the last couple of years I've been working my butt off

 6  trying to make the electric vehicles market a success.

 7  And I beg of you, please do not mandate a regulation here

 8  that could have detrimental effects on the infancy of the

 9  EV market.

10            CHAIRPERSON LLOYD:  Thanks, Greg.

11            Ms. D'Adamo.

12            BOARD MEMBER D'ADAMO:  Could staff respond to the

13  witness' concerns about the manner in which this would

14  affect public infrastructure.

15            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  Well,

16  I'll give us a short answer to start and maybe somebody

17  else will come in.

18            And the comment by Mr. Hanssen that General

19  Motors has, in fact, supported public infrastructure is

20  entirely true.  They've probably supported it more than

21  any other manufacturer.  That is not necessarily meaning

22  going forward, whether we standardize or don't

23  standardize, that General Motors is a panacea out there

24  for public infrastructure.

25            We haven't any indication that they're going to


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 1  have long-term commitments to expanding and continuing to

 2  support that long-term infrastructure.  Public

 3  infrastructure is a serious issue that we are -- we have

 4  established a stakeholder group on, that we want to work

 5  with all the parties on what is the best mechanism, you

 6  know, how many sites, how do we handle warranty issues,

 7  who pays for them?  We're very committed to doing what's

 8  necessary to get out the adequate number of public

 9  infrastructure.

10            We do need the cooperation of all the parties and

11  really it's a serious issue mostly outside the

12  standardization issue.  If anything, the standardization

13  does help because then you're dealing with one simpler

14  lower cost infrastructure item as opposed to two, and one

15  of them being higher cost.

16            BOARD MEMBER D'ADAMO:  Has staff given Mr.

17  McKinnon's suggestions that he made earlier a thought in

18  terms of rewarding those that convert systems that are out

19  there, including these public infrastructure systems, for

20  example, if GM wanted to maintain its commitment, some

21  sort of subsidy to encourage them to still be involved in

22  the public infrastructure side of this?

23            EXECUTIVE DIRECTOR KENNY:  We have given that

24  some thought.  Unfortunately, we don't have a perfect

25  answer on it.  Part of the difficulty is that it's very


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 1  difficult and very expensive to convert a car.  And so

 2  it's probably unlikely that any cars would be converted.

 3  To the extent that public charging is converted, for

 4  example, from inductive to conductive, what it really

 5  means is simply replacing that particular charging unit.

 6            We can look at some way of trying to incentivize

 7  that, if, in fact, the manufacturer wanted to go that way.

 8  But what I think we're going to have to do is essentially

 9  look at this whole issue of a transition between a duel

10  standard and the Board then going to a single standard,

11  and how we basically make sure that we don't have, at

12  least, some level of obsolescence or some level of market

13  concern about the fact that people who currently own

14  vehicles are losing the opportunity to charge those

15  vehicles for the future.

16            Part of the way we try to address that is with

17  the start date.  When we were looking at 2006 as a

18  reflection of the timeframe, that will give manufacturers

19  the chance to put new systems in place, put new vehicles

20  in place and therefore minimize the number of vehicles

21  that would be out there that would be subjected to this

22  potential obsolescence.

23            At the same time, you don't want anybody in 2006

24  to suddenly have a vehicle that they can't essentially

25  charge, and so we do need to figure out how we're going to


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 1  move in that direction, and that's what we'll continue to

 2  look at.

 3            BOARD MEMBER D'ADAMO:  What would be your

 4  recommendations today, if we act on this regarding the

 5  transition period?

 6            EXECUTIVE DIRECTOR KENNY:  I think the key is

 7  going to provide some level of incentive for the existing

 8  vehicles that are out there and to look at, you know, what

 9  the transition period of time will be between what we

10  currently have in the marketplace and when we would

11  actually see vehicles that are produced that are

12  essentially a single charging standard.

13            BOARD MEMBER D'ADAMO:  I should have been more

14  clear.  Would it be your recommendation and then staff

15  would come back -- first of all, the staff is recommending

16  that we adopt this, but that staff would come back with

17  recommendations for the transition period say in six

18  months or something of that nature?

19            EXECUTIVE OFFICER KENNY:  I think that in terms

20  of coming back to the Board with a transition plan, I

21  think what we would like to do is simply try to develop

22  that plan and then figure out whether we should bring it

23  back to the Board and what the timeframe would be on that.

24  Actually, I can't give you a real direct answer on that

25  today.


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 1            CHAIRPERSON LLOYD:  Mr. McKinnon.

 2            BOARD MEMBER McKINNON:  I was going to say we may

 3  find out down the road that the cars that are left out

 4  there, so to speak, stranded, are old enough that people

 5  aren't using them anymore, that kind of thing.  I mostly

 6  wanted to let Greg respond to this transition issue,

 7  because I'm real interested in what an owner thinks that

 8  bought -- you drove EV1s for quite a while.

 9            MR. HANSSEN:  Yeah, I've got a Gen 1 Magna

10  Charger which has survived four years and a trip to

11  Florida.  And it's still holding up great.  And now

12  because of the transition to the small paddle, we're going

13  to have to get a small paddle charger for the RAV4, which

14  we're willing to do, that is my company, which is just

15  three us.

16            But I know others who have expressed concern

17  about this.  My friend Bob Seldon who has been a long time

18  EV1 driver was seriously looking at a RAV4 EV also and had

19  gotten the paperwork signed up to do all this, but -- and

20  he was ready to buy the charger too, because of course it

21  would work on either of his vehicles, the EV1 or the RAV4,

22  but when ARB announced that they were pursuing this course

23  of mandating conductive charging, he basically had to

24  rethink it, do I really want to get another $2,000 box for

25  this vehicle.  How valuable is it to me to have this


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 1  vehicle?

 2            I was actually kind of surprised, because I would

 3  have thought that he would have just gone for it, because

 4  what's $2,000?  But for a lot of people I think who might

 5  be looking at EVs in the first couple years here,

 6  especially from, you know, like the Toyota products,

 7  buying a charger that they know is going to be a door stop

 8  in a couple of years is just unsettling.  Just from an

 9  efficiency standpoint, it doesn't sound right.  You don't

10  have to invest in that and know that it's going to have a

11  limited appeal.

12            I mean, if you could somehow pull this regulation

13  off as a trick and kind of throw it on people at the last

14  minute and say oh, surprise, by the way, this is

15  happening, you know, then it wouldn't be -- you wouldn't

16  have all this problem.  But as it is right now, anyone

17  who's going out to look at an inductive car, and I guess

18  right now the RAV4 is the only thing out there really

19  available, they have to ask themselves do I want to invest

20  in a charger for this, or should I wait several years

21  before I get, you know, some other vehicle.

22            BOARD MEMBER McKINNON:  You know, the thing that

23  worries me is us tricking people by letting a bunch of

24  cars being built and down the road making this decision --

25            MR. HANSSEN:  I realize the staff has actually


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 1  put some thought into this.  They're not proposing

 2  actually getting rid of any inductive infrastructure until

 3  2010, post-2010.  So you know, in all likelihood, they

 4  would support infrastructure as long as the vehicles are

 5  out there.

 6            CHAIRPERSON LLOYD:  Bob, do you want to comment?

 7            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  I

 8  think, though, that one of the things to recognize is that

 9  right now the fleet of vehicles that's existing out there

10  that uses inductive is leased.  And in many cases leases

11  are coming due, some of them are being renewed, in most

12  cases they're being renewed, some aren't.

13            And the only vehicle that is currently on the

14  market that's inductive is the RAV4, which is also leased.

15  And it would seem to me that if there is a good time to

16  change it's now, when there -- when a product that was

17  made with inductive is several years old.  There's not

18  that many going out that are inductive right now.

19            And another generation of ramping up volume is

20  going to happen in the reasonably near future.  So it

21  seems to me that the problem that we are talking about,

22  the longer we wait the worse they get.

23            MR. HANSSEN:  But you're not changing now, you're

24  changing in 2006.  I mean there could potentially be a lot

25  of vehicles that come out here in the next few years.


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 1            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  But

 2  if you knew the standard was conductive it would be less

 3  likely that there was two standards.

 4            CHAIRPERSON LLOYD:  I think we've got to cut this

 5  off unless there's any more questions from the Board?

 6            Greg, thank you very much.

 7            I'm going to, basically, after the next witness

 8  hold everybody to five minutes.  We've got a number of

 9  people that have been added to the list and we are going

10  to lose a quorum in the early afternoon, so since it's a

11  regulatory item, I wanted to move ahead.

12            But the next person is Greg Toepfer from Ford,

13  and I'd like to give him due time, but then after that

14  then limit people to five minutes and that's for David

15  Packard, Thomas Dowling, Michael Coates, et cetera.

16            MR. TOEPFER:  Mr. Chairman, members of the Board,

17  Thank you for the opportunity to speak to you this

18  morning.  For those of you that I've had the pleasure of

19  meeting in the past, hello.  For those of you who have not

20  met me before, I'd like to introduce myself a little bit

21  and tell you why I'm here.

22            For the past ten years, I've been an employee of

23  Ford Motor Company, a technical specialist responsible for

24  electrical codes and standards development.  In that

25  capacity, I've served in several leadership positions,


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 1  Electric Power Research Institute, Infrastructure Working

 2  Council.  I'm the chairman of the SAE Committee that

 3  created both the inductive and conductive recommended

 4  practices.  I represent the SAE on the National Electric

 5  Code.  I'm the Secretary of the International Electro

 6  Technical Commission, Technical Committee Number 69,

 7  Electric Road and Industrial Vehicles, and I'm also

 8  Secretary of a Joint Steering Committee between ISO and

 9  IEC.

10            I will try to focus my comments on the discussion

11  that we've had on standards this morning.  I respectfully

12  disagree with the points made, and in toto believe them to

13  be either incorrect or inaccurate.  I think if you're to

14  discharge your duties and responsibilities as board

15  members, you need to have the facts, and I hope that

16  you'll understand those as we go forward through my

17  presentation.

18            First of all, a couple of opening statements are

19  important.  Who is the International Electrico Technical

20  Commission?  What is the role that standards play in our

21  society?  And I'd like to address those.

22            The International Electrico Technical Commission

23  is the sibling organization to the International Standards

24  Organization located in Geneva, Switzerland.  IEC as it's

25  called is responsible for developing all electrical


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 1  standards for all equipment worldwide.

 2            ISO on the other hand, handles international

 3  standards for all nonelectrical equipment including

 4  automobiles.

 5            The IEC has 60 member countries, including all of

 6  the industrialized nations and many of the emerging and

 7  industrializing countries around the world.

 8            The IEC consists of 107 technical committees,

 9  four advisory committees, which we call super committees,

10  that deal with environmental aspects, safety, electro

11  magnetic compatibility and telecommunications.

12            We have ten sister committees, which is similar

13  to our FCC, it regulates radio interference and

14  communications, and 17 joint committees for information

15  technology.  We are tied in with virtually every other

16  standards organization whether regional or national or

17  around the world.

18                               --o0o--

19            MR. TOEPFER:  Earlier this morning I passed out

20  an information packet that describes a little bit about

21  the work of international standards organizations to the

22  facilitators here and I also passed out some information

23  from the Society of Automotive Engineers technical

24  standards for their governance policy.

25            Let me clarify what a standard should do.


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 1  According to the IEC, it should meet the requirements of

 2  the global market efficiently.  It should ensure privacy

 3  and maximum worldwide use of the standards and conformity

 4  assessment schemes, assess and improve the quality of

 5  products and services covered by its standards, establish

 6  the conditions of interoperability of complex systems,

 7  increase the efficiency of industrial processes,

 8  contribute to the improvement of human health and safety,

 9  and contribute to the protection of the environment.

10            A shorter thing that I'd like to say about

11  standards is we establish the safety and functional

12  requirements necessary to bring technology from the

13  laboratory into the commercial marketplace, that is our

14  sole purpose.  We are not designers of equipment.

15            Secondly, the activities of these standards

16  committees are regulated by consensus agreement.  In the

17  United States, the American National Standards Institute

18  has that responsibility.  In other countries, similar

19  organizations perform the same function to ensure that

20  people that are directly and materially affected by our

21  work are considered into the process as an open process.

22                               --o0o--

23            MR. TOEPFER:  Now, with respect to international

24  standards, Europe, their regional body satellite and their

25  national standards bodies or the member countries normally


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 1  recognizes and adopts IEC as a mandatory, regulatory

 2  product requirements for anything introduced into the

 3  European union.

 4            IEC Technical Committee 69 has, over the past six

 5  years, developed, under the consensus process, a final

 6  draft international standard for electric vehicle

 7  conductive charging.  My committee has 31 member

 8  countries, 16 of them participating or voting members, 15

 9  of them are observer countries that are interested in our

10  work and are kept abreast of our work through the

11  communications network that we have established.

12            It was approved by a hundred percent of the

13  voting members and published in the first quarter of this

14  year.  I have copies of the standards here.

15            Secondly, the inductive standard, which we took

16  on as a new work item proposal nearly seven years ago, has

17  been through four project leaders, two product changes,

18  and the project leader didn't even show up at the last

19  meeting when the comments that were submitted by all of

20  the countries were to be considered.

21            I hope they will show up at the next meeting,

22  because that is where the standards were that represents

23  the interests of the marketplace and the consumers really

24  should take their place.

25            CHAIRPERSON LLOYD:  I am a little bit concerned.


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 1  I was chopping people to five minutes.  I didn't think you

 2  were -- how much longer are you going to go.

 3            MR. TOEPFER:  I have two slides.

 4            CHAIRPERSON LLOYD:  Okay, good.

 5            MR. TOEPFER:  I think I covered the good stuff

 6  already.

 7            CHAIRPERSON LLOYD:  Slides isn't always a good

 8  indicator of how long it's going to take.

 9                               --o0o--

10            MR. TOEPFER:  Now, in the United States we put in

11  installation rules effective with the 1996 National

12  Electric Code.  They were modified slightly in '99 and

13  they were modified slightly in 2002, which is another

14  important aspect of standards development as all of these

15  organizations have mechanisms in place for review and

16  updating of the standards to ensure their relevancy on a

17  continuing basis.

18            In the United States Electrical Products

19  Standards are developed by Underwriters Laboratory a not

20  for profit private organization that has the same impact

21  of national standards bodies in other countries.

22            Through the development process, we have

23  developed three products standards.  UL 2202 is a basic

24  generic EV charging system equipment standard.  UL 2231 is

25  a personal protection system for EV supply circuits which


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 1  insists on protecting people against shock and fire

 2  hazards.

 3            UL 2251 covers the test requirements to assure

 4  conformity with the functional requirements of plugs,

 5  receptacles and couplers for EVs.  It covers the

 6  conductive connector for vehicle inlets.  There is no

 7  similar standard for inductive.  It may be a proprietary

 8  tie standard located in somebody's offices.

 9            And finally, the Society of Automotive Engineers,

10  as you know, has passed two recommended practices for

11  electric vehicles, one for conductive, one for inductive.

12  At this point in time, both of those documents are being

13  circulated for approval or in the case of conductive a

14  second time.  In the case of inductive a third time.

15            As you know, we've had Gen 1.  We developed a

16  standard for it, and it was replaced by Gen 2.  We

17  developed a standard for it.  Another communications

18  system wasn't functioning properly so they made some

19  revisions to it.  We will send that out to ballot

20  simultaneously with 1772.

21            1772 in its original form was passed, and it had

22  two connectors, the Yazaki connector and the Avcon

23  connector referred to in an Appendix.  Since that time,

24  the 26 voting members of my committee have agreed, by a

25  substantial majority to settle, based on the technical


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 1  information available to us, on the Avcon as being a

 2  superior design.

 3            We are in the process of moving that information

 4  into the body of the report, and with Mr. Wolterman's help

 5  will even try to make it more like the built-to standard

 6  that he insists on.  But it's not really a requirement, if

 7  you read the SAE information that I provided to you.

 8            The other thing that we've done in the second

 9  version of 1772 is that we've improved the part of the

10  system, the control pilot that regulates the safety and

11  management.  There were a few misinterpretations of the

12  information, but I think we've clarified that.

13            We did not change out the connector, modify

14  anything, obsolete any equipment or do anything else that

15  would affect the vehicles that are on the road today.

16            I think we've done an outstanding job in setting

17  up a series of standards, not only industry standards but

18  national standards and international standards that we

19  very, very efficiently together rely on and complement

20  each other perfectly.

21            My conclusion is I know it's a difficult job

22  making all of the conflicting information on this.  I

23  think the staff has done a magnificent job trying to make

24  sense of it, differing opinions, technical data that may

25  be limited or based on assumptions of some kind, and come


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 1  up with a very solid reasonable recommendation to you.

 2            I support their recommendation.  I think you

 3  should go forward with it.  Failure to do so will have a

 4  detrimental effect on the electric vehicle industry.

 5            Number one, I believe that the debate over this

 6  system or that system is an effective barrier to EV

 7  commercialization.  If you believe that EVs are important,

 8  and I personally do, it's time to make a decision.

 9            Secondly, we talked about some costs.  Do we

10  postpone this or study it for a year or debate it

11  continuously, I may retire by the time we get there.

12            So the people that have cars, the people that

13  will be buying cars in the future need that assurance that

14  a single standard that best represents their interests

15  will be in place in California, so that we can get on with

16  it and not create or compound the problems that we've

17  heard about this morning.

18            So thank you very much for your attention.  I

19  hope you do the right thing.

20            CHAIRPERSON LLOYD:  Thank you, Greg.  Thanks for

21  clarifying some of the issues here.

22            Any questions from the Board?

23            Thank you very much.  We have David Packard,

24  Thomas Dowling, Michael Coates, Tim Hastrup.

25            (Thereupon an overhead presentation was


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 1            presented as follows.)

 2            MR. PACKARD:  Hi.  David Packard.  I'm director

 3  of business development of EVI.  I want to thank you, Mr.

 4  Chairman and the Board for allowing me to present today.

 5  EVI is a conductive power control manufacturer.

 6            Second slide, please.

 7                               --o0o--

 8            MR. PACKARD:  We're located in Auburn,

 9  California, and we're on our eighth generation product

10  since our inception in 1994.  We have shipped close to

11  5,000 power control stations, EV charging stations, in

12  that time, and about 3,000 of those have been our ICS

13  model, which makes up the bulk of the conductive

14  infrastructure in California.

15            We have three distinct products that we're now

16  offering that we brought to display today.  And in

17  addition to that we have the DCS 55 model exclusively for

18  the United States Postal Service, that we're working in

19  conjunction with Ford on.

20            We'd like to think we can do all this, come out

21  with all these different products for different

22  applications because we're just such a great company.  But

23  really I think it's a testament to conductive charging,

24  how easy it is to implement a safer public product that

25  people can handle and charge their vehicles.


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 1                               --o0o--

 2            MR. PACKARD:  We appreciate the hard work staff

 3  has done.  We can't imagine having to do something like

 4  this and the difficulty to make the decision and also the

 5  difficulty which it will impose on the automakers for

 6  complying with this.

 7            However, we support the staff's determination

 8  that now is the time to standardize not only for the cost

 9  savings show, but really because this is an ancillary

10  product.  We don't want to lose the focus of the market on

11  selling zero emission vehicles, because that's really what

12  it's all about.  And people are not buying charging

13  stations, they're buying vehicles.  We'd like to think

14  they're buying cars because of our stations but really

15  they're buying the vehicles.  What comes with it, comes

16  with it.

17            We also support staff's decision to go with

18  conductive charging, because on board conductive charging

19  is a product that is going to allow us to really reduce

20  the cost of the market and give us a flexible technology

21  that's reliable, efficient and safe and keep pace with

22  changes in the battery size, battery voltage, battery

23  chemistry on board the vehicle.

24            Additionally as we've had various competitors

25  over the years, it seems that conductive is very conducive


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 1  to competitors entering and leaving the market, and these

 2  are competitors who have had no relationship whatsoever,

 3  who have come into the market at various times.

 4            Next slide.

 5                               --o0o--

 6            MR. PACKARD:  Our current product offering is

 7  shown here as well as over there.  On the left our

 8  flagship ICS-200B is really a high end specialty product.

 9  Some of the users still prefer that, but it's got a lot of

10  features that really aren't needed by the majority of the

11  market.  When we originally designed it, we had to

12  accommodate every possibility, and that added to the cost.

13  It has some features that work in extremely harsh

14  environments.  It can log battery charging profiles and on

15  and on and on.  So we've cost reduced the product and then

16  we came out with DS-50, which is really low-cost

17  residential and fleet unit, and the DS-200-DL, which is a

18  duel unit, able to charge two vehicles at the same time.

19            The interesting thing about that product is it

20  also slashes installation costs, which on a cost per port

21  basis rivals the cost of the hardware.  By putting two

22  units in one, we are able to cut that cost potentially in

23  half.  And also you can see that we go through a pretty

24  rigorous approval process with all the listings we have to

25  get.


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 1            Change the slide please.

 2                               --o0o--

 3            MR. PACKARD:  Conductive technology, as we've

 4  heard, has been around for over 100 years.  We've all been

 5  using it all our lives.  In fact, there's even some

 6  conductive contacts within the inductive unit itself.

 7            The plastic component of the Avcon connector has

 8  been changed to a much more durable unit.  And nobody

 9  feels the pain of breaking those connectors more than we

10  do, because we have to go out and change them out.

11            However, there has been no change to the contacts

12  within the connector, the important part, where we

13  transfer the electricity.  And of all the units we've

14  shipped, over 5,000 units over the past six years or so,

15  we haven't seen any failures in those pressure butt type

16  contacts.

17            Next slide, please.

18                               --o0o--

19            CHAIRPERSON LLOYD:  Dave, can you --

20            MR. PACKARD:  I'm going to skip a bunch of

21  slides.

22            CHAIRPERSON LLOYD:  Okay.

23            MR. PACKARD:  One of the favorite terms we hear

24  about is in-volume, where the price is going to be in

25  volume, and in significant volume, because we know we can


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 1  promise anything and we'll worry about it when we really

 2  get there.  But as far as quality and pricing go in every

 3  year since 1995, we have reduced the price to the market

 4  by reducing the part count within the product, with

 5  innovation and by improving the quality of the product.

 6            We think our track record bears testament to what

 7  we expect in the future.  Mind you, we've been able to

 8  accomplish all of this without the in-volume or

 9  significant volumes in any single year.  And our price

10  reductions have all been due to the market pressures from

11  competitors in conjunction with new engineering designs.

12            You can skip the slide 9.

13                               --o0o--

14            MR. PACKARD:  The future -- I'm sorry, that's

15  eight.  Here we go.

16            We're coming out with a 110-volt product for use

17  in the US, city EVs, NEVs, a 220-volt product for Europe,

18  which is essentially all conductive.  And also our ICS

19  300, which is really the one I wanted to point out, that

20  we've designed.  The design is complete, which will

21  operate up to 200 amps for AC Level 3 charging

22  incorporating the conductive on-board charger with the

23  controller to get higher charge rates on board the

24  vehicle.

25            And all our products are compatible for


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 1  vehicle-to-grid charging.

 2            Change the slide, please.

 3                              --o0o--

 4            MR. PACKARD:  In summary, we support staff's

 5  determination.  We think it's in the best interests of the

 6  market to choose a standard that is -- we think the best

 7  choice is conductive, because it's a safe, reliable,

 8  flexible technology.  It's efficient and it allows us to

 9  stay with one technology for the next hundred years.

10            Thank you.

11            CHAIRPERSON LLOYD:  Thank you.

12            Of course, I'd be very surprised if you said

13  others would, since you make the systems there.

14            Thank you.

15            MR. PACKARD:  I'm trying not to be biased.

16            (Laughter.)

17            CHAIRPERSON LLOYD:  Thank you very much.

18            MR. PACKARD:  Any questions?

19            CHAIRPERSON LLOYD:  Thank you very much.

20            Next, we have Thomas Dowling, Michael Coates, Tim

21  Hastrup.

22            MR. DOWLING:  Good afternoon.  My name is Tom

23  Dowling.  I'm an EV1 owner, and a Ranger EV owner.  I've

24  driven EV1s for about 60,000 miles and the Ranger EV for

25  about 10,000 miles, so I've got a lot of -- I've done a


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 1  lot of public charging all over northern California.

 2  Actually I've rented a RAV4 in southern California and

 3  have done public charging down there, too.  So I'm quite

 4  familiar with the public charging infrastructure and have

 5  had a lot of experience with it.  I've made a lot of trips

 6  back and forth to the Bay Area and other such places, so

 7  I've used it a lot.

 8            At the present time, I have two inductive

 9  chargers at home and a conductive charging station as

10  well.  So I'm quite familiar with them.

11            I'm not here to debate the merits of one versus

12  the other.  They both work.  They both could be improved.

13  My position is that we really already have a standard, the

14  duel standard that we have works.  It could be improved

15  too, but I don't think we should change it now or a year

16  from now or any particular time, unless the cars are not

17  there, you know.

18            I think the charging standard, as even Mr.

19  Packard said, is secondary to the cars.  What people are

20  buying are cars not chargers.  I don't think people are

21  confused by different charging standards now.  I do think,

22  however, that if we do discontinue either standard, we'll

23  make it harder, specially in the short-run, for people to

24  get cars.  The availability will be impacted.  People will

25  not want to buy a car, if they were aware of it, if they


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 1  knew that the charger was going away, or lease the car.

 2            And we know that Toyota is delivering cars now.

 3  There are substantial incentives in the regulations for

 4  early deliveries.  I think we're doing significant

 5  short-term damage if we discontinue either one of the

 6  current standards.  Who would want to buy or lease a

 7  vehicle if they knew that that standard was going away.

 8            That would really make it harder to move

 9  vehicles.  And as Toyota said, they don't feel comfortable

10  with the conductive standards.  They would be forced to

11  put parts on their cars that they don't really like.  So

12  there's going to be a real long time before they're going

13  to be ready to change, I think.

14            So the current standard, I think, it works and I

15  think we should leave it alone and see what cars are

16  manufactured.  And if one of the other kind of cars stops

17  being manufactured, then the decision is made.  And that's

18  really where the marketplace decides, not at the charger

19  level but at the vehicle level.

20            Even today, you'll see that most places have both

21  conductive and inductive charging stations in the same

22  place.  EVI, in fact makes a pedestal, which is installed

23  in several locations where you can mount one of their

24  conductive charging stations and a Gen 2 inductive charger

25  on the same mount back to back.


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 1            You see that at several -- El Dorado Hills park

 2  and ride is an example of that.  There's a picture of that

 3  on EVI's web page.

 4            So anyway, in conclusion I think we have a

 5  standard that works.  It could use improvement.  We should

 6  continue to improve it.  People are buying vehicles and

 7  not charging stations, and we want to make it easier for

 8  people to buy or lease vehicles.  That's what the

 9  regulation is all about.

10            Thank you.

11            CHAIRPERSON LLOYD:  Thank you very much.  Nice to

12  have someone with experience in both systems there.

13            Next, we have Michael Coates, Tim Hastrup, Steve

14  Heckeroth.

15            MR. COATES:  Good morning, Dr. Lloyd and Board

16  Members.  Thank you for allowing me to speak very briefly

17  this morning.  I'm Michael Coates.  I'm speaking as a

18  board member of the Green Car Institute, an independent

19  nonprofit organization dedicated to research and education

20  on automobiles and the environment.  We're a fuel neutral

21  organization.  We're not an advocate for electric vehicles

22  or any specific fuel system or company.

23            We do strongly support the CARB's regulatory

24  approach and move to set a single charging standard.  We

25  think such a standard, from our view of the industry, is


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 1  critical for the industry to move forward with its future

 2  research and development and ultimately with this

 3  marketing.  We might even suggest a shorter time limit for

 4  implementation.

 5            However, we do have one concern that we wanted to

 6  add to this public record.  During the next two years, our

 7  research indicates there may be 20,000 to 30,000

 8  neighborhood electric vehicles introduced to the

 9  California market.  These would probably be the dominant

10  electric vehicles on the market.  And while the staff is

11  focused on charging the city and full function EVs the

12  infrastructure demand is going to be very strong on these

13  Level 1 chargers as well.

14            And so we recommend that any future

15  infrastructure development include this level of charging

16  as well.

17            Thank you.

18            CHAIRPERSON LLOYD:  Thank you very much.

19            Tim Hastrup, Steve Heckeroth and Ken Smith.

20            MR. HASTRUP:  Good afternoon.  Good to see you

21  all again.  I'm Tim Hastrup.  I live in the Sacramento

22  area out in Granite Bay.  As you may remember from our

23  earlier testimony, our family, we've had the pleasure of

24  leasing a Honda EV Plus.  We are one of the first ones

25  since May '97, so we've had some experience with that and


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 1  we continue to love it and it's still going strong.  My

 2  wife is out probably driving as we speak.

 3            CHAIRPERSON LLOYD:  Have you talked to Ben?

 4            (Laughter.)

 5            MR. HASTRUP:  And we also have an EV1.  We

 6  started out with a Gen 1 that got recalled.  We have a Gen

 7  2, which I drove down here.  And so, you know, we've been

 8  happy with them.  We've had a good opportunity to live

 9  with both systems.  Our thoughts are that, gee, you know,

10  they both work great.  They're easy to use.  When we got

11  the Honda back in '97, our son, Carson, was two and a half

12  at the time, didn't last many days.  He was able to plug

13  the car in and continues to love to do that.

14            I'd like to think that that's because, boy,

15  another engineer in the making, and just like his big

16  sister, they'll be just like their dad and they'll be

17  electrical engineers.  But I hate to admit it, it's

18  probably because it's just fairly easy to use.

19            We've had good performance from both of them.

20  They've worked.  We've never really had any problems.

21  We've always felt from Day 1, gosh, why don't we just have

22  a single standard?  Why did we have to go with all of that

23  complexity?  And we still feel that way today.  We think

24  they're both fine.  They're both safe.  I mean, our house

25  hasn't burned down with either system.  Garages are still


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 1  standing.  If we were going to make a nod towards either

 2  one of them we'd probably go with conductive for a couple

 3  of reasons.

 4            One, I think it's a lot simpler.  It's a lower

 5  cost solution.  In my business in manufacturing as an

 6  engineering manager, low cost, is something you appreciate

 7  and think a lot about.  It's more efficient and especially

 8  at the lower power levels when you're pulling less than

 9  full power, it's easier to deal with.  And as we all know

10  these days, as I've been teaching all of my friends,

11  efficiency does count.  And it makes a big deal.  And then

12  another small thing, I think it's just easier to come out

13  with new vehicles or if you have a conversion to adapt to

14  a conductive standard.

15            I've had a conversion.  I've made that work with

16  the conductive standards.  There's really no practical way

17  that I could do that with an inductive.

18            So the bottom line for us is the most important

19  is a single standard.  We think that's important.  If

20  we're going to be going there, we feel comfortable with

21  the conductive.  We probably prefer that.  In closing, I'd

22  like to thank you for your leadership to move us toward a

23  common standard.  Thanks to the staff for their report.

24            You know, we really would have preferred industry

25  to show the leadership.  We just feel that, gosh, it


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 1  really hasn't happened.  We can't continue to delay and

 2  wait and now is a good time before we get a lot of cars

 3  out there.  Now is the time to have the standard.  We

 4  realize that we've probably got a couple of boat anchors

 5  in our garage, because it doesn't look really promising

 6  for us to get replacement EVs.  I may beg and I may plead,

 7  you know, but I know there are no more EV Pluses coming.

 8  We're certainly going to miss it.

 9            Hopefully when the EV1 lease expires, maybe we

10  can extend that for a couple more years, but who knows.

11  And other wise, it's looking kind of bleak.  So, you know,

12  the most important thing is, I think, to get a standard

13  and we hope long term if the cars go away, we'll be able

14  to return another day.

15            Thank you very much.

16            CHAIRPERSON LLOYD:  Thank you, Tim.  That was a

17  very positive report.

18            Steve Heckeroth Ken Smith, David Burch.

19            MR. HECKEROTH:  Hi.  My name is Steve Heckeroth.

20  As a sole architect and EV manufacturer and an EV driver

21  over the last 30 years, I've tried to live a zero emission

22  life.  I have three electric bicycles for my family.  I

23  have two electric cars.  I have probably the largest

24  electric tractor fleet in the world.  It's only 3, but

25  there aren't many, and I drive a Prius for long trips.  I


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 1  got 55 miles to the gallon coming here.  I charge my

 2  electric cars from a seven kilowatt photovoltaic array.

 3            And I just wanted to let you know that for the

 4  last 30 years, I've had this nightmare.  It's a fact that

 5  burning fossil fuel harms our life support system.  In

 6  1995, I testified before this Board and I challenged the

 7  auto industry to a range test, my electric vehicle against

 8  the best they had to offer.  The only requirement was that

 9  the exhaust pipe be terminated and capped.  The auto

10  industry did not take me up on that challenge, because, as

11  you know, they would die.

12            This is the nightmare that I have.  I watch my

13  child in the cab of the car dying of exhaust.  Now, how

14  much harm does exhaust do?  There's a very easy test.  You

15  get in your car with your child, you start the engine, you

16  have the exhaust pipe terminated in the cab, you get out

17  of the car and you watch your child as she struggles for

18  breath.

19            If this is just repeated by a few cars, that's

20  one thing, but this is being repeated all over the world.

21  And this country has taken the lead in putting this

22  technology all over the world.

23            It doesn't matter if it's a small manufacturer or

24  a large manufacturer, this exhaust is harmful.  And there

25  should be fines for it.  It doesn't even matter if it's a


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 1  car.  Another way to test is to take a lawn mower or a

 2  leaf blower, put it in your living room, turn it on and

 3  then sit there and explain to your family why it's more

 4  important to use this energy saving equipment or time

 5  saving equipment over a regular a push mower.

 6            CHAIRPERSON LLOYD:  Wouldn't they ask why you've

 7  got the lawn mower in the living room.

 8            (Laughter.)

 9            MR. HECKEROTH:  Yeah, well I think that's

10  something we should all ask, why we have a polluting -- a

11  lawn mower produces 50 times as much as a vehicle.  So

12  this is a very critical situation, and I think it's

13  incumbent on this body to look at the way -- I've watched

14  for the last nine years, I've testified before this Board,

15  and watched as the zero emission mandate has been pushed

16  back and watered down.  And I want to see it go the other

17  way.  If it can go that way, can it go the other way?  Can

18  you put a fine, like a ten percent fine on every

19  manufacturer of equipment that produces exhaust.

20            Now, I'll close by something I testified on six

21  years ago in '95, and that's the inductive chargers, which

22  I think are only employed by the industry to control the

23  infrastructure.  And I can plug my car in.  Even though it

24  only gets a 75 mile range, I can go across the country in

25  it, because I can plug it into a conductive charger and


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 1  there's millions of them.  And there's no restriction on

 2  my charging.

 3            So please take a second look at ways to make this

 4  zero emission mandate really function in a way that we

 5  eliminate exhaust and stop making deals with the industry.

 6            CHAIRPERSON LLOYD:  Well, but I think it's also,

 7  Steve, to recognize the enormous progress made by the

 8  industry, so that, in fact, some of the companies

 9  legitimately claim that looking at the engine, not

10  emissions or the tailpipe emission which are sometimes

11  cleaner than those going in.

12            So there's been significant progress on that too.

13  So some cases when you put that tailpipe into your car it

14  would be difficult to actively --

15            MR. HECKEROTH:  Yeah, the only reason they could

16  be cleaner is because we've polluted so bad in the past.

17            CHAIRPERSON LLOYD:  Thank you.

18            Next Ken Smith, David Burch and Ted Holcombe.

19            MR. SMITH:  Good morning.  My name is Ken Smith.

20  I represent the American Lung Association of California,

21  but I'm also here on behalf of the Coalition for Clean

22  Air, the Union for Concerned Scientists, Planning

23  Conservation League and the Natural Resources Defense

24  Council.

25            And I'm here today to urge you on behalf of these


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 1  organizations to adopt a single on-board charging

 2  standard.  We need to move on this now.  Don't wait, don't

 3  create more confusion, adopt it now.

 4            While the staff has been very specific in

 5  recommending a single on-board charging system of a

 6  specific type, we are more concerned that you make this

 7  decision for an on-board charging system as opposed to

 8  what type.  We're not opposed to staff's position on this,

 9  but it is essential that you make this single choice now,

10  before we get too many cars out there.

11            I think I drew this assignment on behalf of these

12  organizations, because of more than 20 years of fighting

13  these things.  I have been involved in infrastructures of

14  almost every type of nonpetroleum fuel except hydrogen.

15  I'm sure that I'll get involved in that as we proceed.

16            I'm from the school of hard knocks on this.  I've

17  been out there.  I've been stranded.  I've been

18  everything.  One of my recent experiences was with an EV

19  rental in southern California, where I pulled up to

20  Fashion Aisle, the mall there.  There's five charging

21  stations.  There was one available.  Of course, it's the

22  wrong kind.

23            I won't bore you with all the details of waiting

24  in the restaurant and getting unplugged and replugged and

25  I took a taxi.  I gave up.  I finally -- I was going to an


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 1  ARB meeting and I finally just gave up and took a taxi.  I

 2  just had to have that happen.

 3            Now, the natural gas industry faced this problem

 4  several years ago.  In the eighties, before there was a

 5  lot of production of natural gas vehicles, there were

 6  mostly after-market vehicles, the natural gas industry

 7  decided we've got to step up and solve this problem.

 8            Today, if you get a natural gas vehicle from an

 9  OEM, from an Original Equipment Manufacturer, you can be

10  assured that when you go to a station here in California

11  or anywhere in the country you've got a standard plugin.

12  It's a very simple, you know, easy-to-use system.  I use

13  them all the time with natural gas vehicles.

14            I also want to share with you a massive failure

15  with methanol and the M-85 system.  I watched an SAE

16  committee spend more than five years.  In fact I went away

17  from the industry for two years and came back and didn't

18  see any progress at all.

19            This was all over a fueling system, of not having

20  Joe six-pack put in and see 102 octane methanol and try to

21  put it into his gasoline car.  And the oil industry

22  absolutely insisted on this being solved.  And the car

23  companies came back with, of course, three different

24  unique systems to solve this.  And the oil companies

25  wanted a very elaborate electronic system to solve it.


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 1            And, frankly, it never was resolved.  It failed.

 2  And I would hate to see the electric charging system go in

 3  that direction.  So I urge you to make a decision now.

 4  Sometimes you just can't get the industry to do this

 5  independently like the natural gas vehicle industry did.

 6            Sometimes it requires regulation.  I urge you not

 7  to delay.  Let's get this thing going in the right

 8  direction, do it now.

 9            Thank you very much.

10            CHAIRPERSON LLOYD:  Thanks, Ken.

11            David Burch, Ted Holcombe, Mickey Oros.

12            MR. BURCH:  Good afternoon, Dr. Lloyd and members

13  of the Board.  My name is David Burch.  I'm a senior

14  environmental planner with the Bay Area Air Quality

15  Management District.

16            At the BAAQMD, we have a long record of support

17  for the ZEV mandate and for electric vehicles.  We've

18  devoted significant resources to promoting the EVs in the

19  Bay Area.

20            In addition to providing incentives to acquire

21  vehicles, we also implemented a program to install

22  electric vehicle charging stations around the region to

23  create a network of public EV chargers.

24            Air District staff supports the CARB staff

25  recommendation to adopt a single standard charging


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 1  technology for electric vehicles.  We recognize that the

 2  CARB board needs to consider many factors in evaluating

 3  the staff recommendation.  And the Air District takes no

 4  position as to the relative technical merits of conductive

 5  versus inductive charging.

 6            Our experience indicates that both inductive and

 7  conductive systems are safe and effective.  And testimony

 8  from CARB staff and other speakers today bears that out.

 9            Our key point is that we believe and agree that a

10  single charging standard is an important prerequisite to

11  successful implementation of the ZEV mandate.

12            We believe that the lack of a standard charging

13  technology will impede our efforts to promote electric

14  vehicles and install a network of EV charging in a cost

15  effective manner.

16            The public charging can provide several benefits.

17  It can help to encourage the public to consider purchasing

18  electric vehicles.  It can enable current EV owners to

19  drive their vehicles for more trips and for longer trips.

20  And it can increase the visibility of electric vehicles

21  and help to increase public awareness of this new

22  technology.

23            Like most parties, we would prefer to see a

24  marketplace solution or a voluntary agreement among the

25  automakers, but there has been little or no progress to


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 1  date, and there doesn't seem to be much prospect of an

 2  agreement in the future.  Therefore, we support CARB

 3  staff's recommendation in their efforts to develop a

 4  single standard charging technology via the rule-making

 5  process.

 6            I'd like to emphasize a couple of points.  We

 7  think the public perception is important here.  The lack

 8  of a standardized charging technology contributes to the

 9  public perception that the EV industry is not yet sure.

10            In our interaction with interested members of the

11  public, we find the people are perplexed by the lack of a

12  standard charging technology.  I go out a lot of times and

13  represent the district at events like electric vehicle

14  positions, and I interact with people that are

15  sophisticated about electric vehicles, other people that

16  are just getting introduced to the technology.

17            There are two things I always take home are one,

18  that everybody wants to know how they can get a vehicle

19  and are frustrated at the lack of product out there.  But

20  the other thing is that people, when you start talking

21  about the various types of chargers, and, you know,

22  inductive versus conductive, and couplers, they're just

23  kind of amazed that there isn't a standard out there

24  already.  And almost invariably people say that's got to

25  get fixed, somebody has got to deal with that issue.


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 1            The second point is that the cost to install and

 2  maintain a system of public chargers is higher due to the

 3  need to purchase and service two different types of

 4  charging technology.

 5            The third point, most existing public charging

 6  sites currently provide both inductive and conductive as

 7  has been noted, but that's not the case in all locations.

 8            So we have a situation right now where there's

 9  some stations have both, some only have one, and it

10  complicates the effort to provide the information via web

11  sites and resources to people that want to know where they

12  can go and charge their electric vehicle.

13            And that lack of clear information basically

14  undermines the credibility of the current system and

15  complicates our efforts.

16            Finally, in terms of getting the most bang for

17  the buck with installing EV chargers for the public, it's

18  going to be more effective if all the vehicles can use the

19  same chargers.  Right now, if you've got a site that has

20  one inductive and one conductive charger, you've got two

21  chargers, but if you've got an inductive vehicle and you

22  pull up and that inductive slot is full, well essentially

23  that site is not rendered useful for you in the same

24  situation vice versa.

25            So if you have two chargers that are the same,


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 1  then you've got double the capacity, and it makes for a

 2  more cost effective use of the system, creating more

 3  capacity with the same number of chargers.

 4            What the means is that we can install a greater

 5  capacity with less resources and fewer chargers if

 6  everybody can share the same chargers.

 7            In summary, adoption of a single standard will

 8  facilitate the effort to promote public charging by

 9  reducing the infusion of EV drivers, allowing for more

10  efficient use of the public charging network and reducing

11  the cost in both public and private dollars to construct

12  and maintain a network of public chargers.

13            It seems that there's consensus that we need a

14  single charging standard sooner or later.  The question is

15  when do we take that step.  There's no perfect time.  In

16  our opinion, it makes more sense to adopt a single

17  standard now, while the number of people and chargers that

18  are out there is relatively limited.  The costs and the

19  disruptions from the transition will be minimized if we

20  deal with it now, rather than waiting until we have more

21  vehicles and more chargers out there.

22            If the CARB does adopt a single standard, we're

23  certainly going to work with CARB, automakers and other

24  stakeholders to ensure the most viable and smooth

25  transition to that new standard.


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 1            CHAIRPERSON LLOYD:  Thank you very much.  And we

 2  appreciate the support of the Bay Area to come and testify

 3  today.  We look forward to seeing you in San Francisco

 4  next month.

 5            Next, we have Ted Holcombe, Mickey Oros, and

 6  Hans-Henning Judek.

 7            MR. HOLCOMBE:  Chairman Lloyd, I'll try and make

 8  this brief here.  We also support the concept that a

 9  single standard is preferable to two.  We don't care which

10  one.  We think they both have merit.  They're both good,

11  but settling on one would be desirable.

12            Relative to the grid discussion that came up

13  earlier, I think people -- there might be -- people should

14  realize first of all under deregulation, that we no longer

15  produce the power, so I don't see the utilities going out

16  necessarily to place chargers in order to bring this

17  market in.  But there would be, perhaps, a profitable

18  market there, where somebody who owns a parking lot could

19  put chargers in the parking lot and make a profit out of

20  charging vehicles in the morning and taking power out in

21  an amount in the afternoon if the vehicles are parked

22  everyday, for instance say a BART parking lot or a

23  CalTrans parking lot.  There might be certain areas where

24  this would be profitable.

25            But I would also think that if there was a


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 1  question of taking power out of the vehicle, that that

 2  power might be more valuable to the owner in his own house

 3  to service his own load if, for example, power is lost to

 4  him if he loses a power supply.

 5            So I think that going -- thinking of a battery

 6  electric vehicle as being a backup for a house power

 7  supply might be a more prudent backup use than they can

 8  use a backup for the grid.

 9            And I think that the question of whether the

10  existence of that backup might prevent the placement of

11  gasoline or diesel generators, might be a consideration.

12            Thank you very much.

13            CHAIRPERSON LLOYD:  Thank you, Ted.  Now, Mickey

14  Oros, Hans-Henning Judek and Dale Foster.

15            MR. OROS:  Thank you.  My name is Mickey Oros.  A

16  brief history.  I founded EVI in the early nineties, '92.

17  It was a group that was put together to -- I was working

18  with SMUD as a consultant and was asked to put together a

19  safe, cost effective system for the marketplace.

20            I've since moved on to fuel cells and

21  electrification.  And also I have just been working on

22  doing the design for the electrical systems for the Post

23  Office.  And I am able to say that because of a conductive

24  system, we're able to save a third of the cost doing it

25  conductively for the Post Office.  And when you're talking


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 1  dollars in excess of a half a million dollars for material

 2  costs, it's quite sizable.

 3            In working with SMUD, I was asked to bring in

 4  some -- hire some engineers to help develop this system.

 5  I could have easily gone into an inductive format, no

 6  problem, since I was green and had no basis to start from.

 7            But after thorough investigations we found that

 8  the systems -- there were other systems available out

 9  there that made the inductive system a little less

10  desirable to go with.

11            What I've heard today is comments that go either

12  way if the system were to go inductive or the system were

13  to go conductive.

14            But this is what I have discovered and that is

15  five years ago, if we just look at five years ago, and

16  consider that ground zero, we have done a tremendous

17  amount of engineering development to the point where we've

18  made both systems as safe for the consumer as they could

19  possibly be.

20            Given that five years, and starting from a ground

21  zero with codes, standards and safety, you're giving this

22  industry another five years to work towards, to go ahead

23  if one manufacturer had to change its format.

24            This is a lot of time.  You're giving them a good

25  fair amount of time to go ahead and make that transition.


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 1  So what you're hearing is that it cannot be done, it's too

 2  short.  I think it's just ego and greed talking here.

 3            I don't need to comment on a lot of the comments

 4  that have already been talked about today.  But I think

 5  that if you were to get -- and I'm sure that the Board has

 6  not been given true costs from most of the manufacturers,

 7  for simple reasons.  But I think once these true costs

 8  were to surface, you would probably see that from a

 9  standpoint of the consumer that a conductive system makes

10  a lot of sense.  And when we go out, as the consumers here

11  in the United States today in our country go out and buy,

12  we basically go out, and the first thing that comes to

13  mind is what does it take or how much do we take out of

14  our pocket and cost is always the driving factor.

15            And once we look at that, I think from those that

16  have spoken earlier and said that some developer should

17  come out and bear all the cost to this, we find out that

18  if they were, they would probably also go back to that

19  saying, well what is the most cost effective system for me

20  to get a return on the investment.

21            And we think, again, that drives us towards the

22  conductive standard.  The architecture, conductively, I

23  found over the years is much more open.  The investment

24  costs are far less, and the time is now.  I don't think

25  that you should wait and continue to wait.  It will only


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 1  worsen as time goes on, before the ramp up begins.

 2            And I hope you'll take some of these comments to

 3  heart and take a look.  And I also have figures that would

 4  backup some of the statements that I've made.

 5            Thank you very much.

 6            BOARD MEMBER HUGH FRIEDMAN:  Thank you, Mr. Oros.

 7  Any questions?

 8            Who used the phrase Last of the Mohicans?

 9            Mr. Hans-Henning Judek, and then Mr. Dale Foster

10  and Mr. Alec Brooks.

11            MR. JUDEK:  Good afternoon, ladies and gentlemen.

12  I hope everybody is not too hungry.  It's already after

13  lunch.  So anyway, I just wanted to briefly introduce what

14  we are doing or trying to do.

15            My company is trying to implement an automatic

16  mechanical car parking system in the United States.  And

17  we have a project in the Los Angeles area, which is very

18  close to a subway station.  And about four weeks ago,

19  somebody had the glorious idea that we should probably

20  implement electric vehicles into this apartment facility

21  to provide an intermodal means of transportation.

22            So that means that people who arrive by the

23  subway have the opportunity to get a car right at the

24  subway station.  And I found out that there are already

25  quite a substantial amount of people working on this


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 1  matter, for example, Matt Barth in Riverside and Susan

 2  Shaheen here in the Bay Area.

 3            The problem that I see to make a decision now on

 4  which kind of connector should be used or inductive system

 5  should be used is that we definitely should not forget

 6  that we may in the future have the need to automatize this

 7  whole procedure, that this -- it could be some kind of

 8  robot or some kind of mechanical device would be necessary

 9  that automatically connects the connector or the panel or

10  whatever we are using to the vehicle.

11            And I would like to ask you please try to think

12  now already about these kinds of possibilities, because

13  any cost-sharing system can only really work with these

14  kind of automatic systems.  So it means we will have to

15  think about where to allocate the contact point.  We have

16  to think about how to open, for example, the cover or a

17  flap.  We have to think about how to aim the connecting or

18  conductive device to the car.

19            And I'm really not quite sure we have at the

20  moment really all the facts together to make a decision on

21  this matter.

22            And I'm inviting everybody here to the room to

23  support our effort, because 300 electric cars in the City

24  of Los Angeles would be a good start for electric

25  vehicles.


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 1            Thank you.

 2            BOARD MEMBER HUGH FRIEDMAN:  Thank you.  Are

 3  there any questions?

 4            Dale Foster.

 5            MR. FOSTER:  Good afternoon.  My name is Dale

 6  Foster.  I'm with AeroVironment in Monrovia, California.

 7  I'm the product manager for the off-board Level 3 charger

 8  that uses a conductive charger, which you've heard some

 9  discussion about here.  We're the technology and product

10  that staff is proposing to effectively make obsolete here

11  with your current proposal.  Dr. Paul MacCready and myself

12  on behalf of AeroVironment did submit some bold more

13  extensive remarks on this subject.  So I'll just hit some

14  of the highlights.  We do support standardization of

15  infrastructure.  We think that's very important.

16            We are also a member, one of the founding members

17  of the Electric Vehicle Conductive Charging Coalition, so

18  we support conductive charging for all the reasons that

19  you've heard earlier here today.  We also support the

20  single connector as has been proposed, the Avcon style

21  connector we believe we can get there.

22            At this point, we digress from the majority of

23  the EVC3 membership where we do not support mandating and

24  requiring on-board charging, high-powered charging.  Now,

25  like most of the folks you've got testifying before you,


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 1  we've all got some vested interests in this topic.  And AV

 2  has a lot of invested interest.

 3            We're a small California company and we've

 4  invested millions of dollars in our off-board charging

 5  technology.  And contrary to staff's report we are not OEM

 6  supportive as a contract manufacturer.  We're an

 7  independent company and we sell these to a variety of

 8  clients.

 9            So that being said, AV suggests deleting the

10  requirement for on-board charging.  Let the marketplace

11  decide which is going to work out.  We believe there are

12  justifiable cases and applications for both on and off.

13  The high cost that's been quoted for our charging systems,

14  $45,000 for a 60 kW charger, we believe is mitigated if

15  there are lots of EVs per charger, such as oftentimes in

16  the case of fleets and other repetitive use applications.

17            There is a place for on-board charging in some of

18  these low-powered vehicles.  We think it would be prudent

19  for every manufacturer of a vehicle to supply an on-board

20  charger with it that can plug into the millions of

21  standard 110/220 outlets that are out there.

22            Fast, fast charging on the order that we achieve

23  with our posicharge system, which is something roughly two

24  percent state of charging increased per minute, we think

25  greatly enhances the market viability and acceptance of


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 1  electric vehicles.

 2            And, yes, we need to get more of the OEMs, and

 3  the battery manufacturers to support fast-charging

 4  technology, besides just DaimlerChrysler and some of the

 5  other independents.  But the higher power, fast charging

 6  we think is going to be best accomplished with the

 7  off-board charging.  So standards are important and

 8  useful, but they should enable and not limit advances in

 9  this technology.

10            So in summary we support conductive charging

11  standards.  We support standardizing that connector as

12  proposed.  But we do not support specifying on-board in

13  the mandate.  Leave that open for either on-board or

14  off-board.

15            Thank you very much.

16            CHAIRPERSON LLOYD:  Does staff want to comment on

17  that?

18            Jack, the question was, Dale made the comment

19  about it's okay with conductive but don't specify on-board

20  or off-board.  And so that was my --

21            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  I

22  apologize for that.

23            CHAIRPERSON LLOYD:  That's okay.

24            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  Well,

25  the systems are, you know, fundamentally different.  And


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 1  we did not have an off-board conductive system here

 2  available for review.  In most of our analysis we didn't

 3  put it in the review.  There's one manufacturer who

 4  utilize the system and it's quite extensive and continues

 5  to be quite expensive.

 6            It does have some advantages especially for

 7  larger vehicles, like the Epic, but the direction seems to

 8  be to minimize battery sizes and moving toward smaller

 9  ones.

10            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  Will

11  the connector that we're specifying accept or work with

12  that charger?

13            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  The

14  connector should work.

15            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  So

16  it's really basically --

17            BOARD MEMBER RIORDAN:  Can you speak up just a

18  little bit.

19            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  They

20  never turn me up.

21            BOARD MEMBER RIORDAN:  No, it's not that.  It's

22  the system.  You just have to sit on it.

23            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  I

24  guess the discussion I was having with Jack is that I

25  think that our main concern with specifying on-board


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 1  charging is with Level 2 charging, it's the charging that

 2  will happen between people's garages and at work sites and

 3  things like that.

 4            What I was asking was whether or not if a Level 2

 5  charging with the on-board charging could co-exist or not

 6  with Level 3 capability for off-board fast charging?

 7            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  Which

 8  it can.

 9            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  So

10  maybe we can settle that.  And the next step is can we

11  modify the regulations so that they don't -- or the

12  proposal so that it doesn't specify only on-board charger,

13  in other words, if you're going Level 3 --

14            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  The

15  Level 3 is exempt from the regulations that are set.

16            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:

17  Okay.  Well, does that satisfy you?

18            MR. FOSTER:  Well, I think by specifying on-board

19  you're effectively obsoleting off-board technology.  I

20  realize that it may not apply to a lot of these vehicles

21  or a lot of the buses and other heavy duty things may not

22  apply, but I think that there's going to be no incentive

23  for the automakers to put duel on-board/off-board systems

24  on vehicles.

25            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  The


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 1  situation gets back to the whole reason why we started,

 2  and that we did specify an on-board system, so that every

 3  vehicle can come up onto any charging station and be able

 4  to utilize that charging station.

 5            If there's a Level 3, some systems can be able to

 6  accommodate greater power, recharge quicker, but we still

 7  want those vehicles to be able to not have to have

 8  separate distinct charging systems like exists with the

 9  DaimlerChrysler system today.

10            MR. FOSTER:  But I contend that you could get

11  there with the connector that's being specified.

12            BOARD MEMBER HUGH FRIEDMAN:  I couldn't hear

13  that.

14            MR. FOSTER:  I contend that you could get

15  there -- we have the technology to get there with the

16  connector system that's being supplied.

17            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:

18  We're going around the same circle I just went around, but

19  I'll try again.  I think that the staff strongly believes

20  that for Level 2 charging, which is again the garage, the

21  routine stuff, that the charger should be on a vehicle and

22  connectors should be standardized as proposed.

23            As I understand it, some of AeroVironment's work

24  connects to -- is associated with doing very fast

25  charging.  And if that's the case, their system should be


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 1  able to coexist with the Level 2 that's part of the staff

 2  proposal, in other words, if the vehicle has the wires

 3  between the battery and the pins on the connector.

 4            So I'm not sure that we really have a problem

 5  other than saying that the regulation shouldn't exclude

 6  the possibility of doing Level 3 charging with an

 7  off-board charger.

 8            MR. FOSTER:  And the regulation does not

 9  explicitly exclude off-board charging.  The staff has made

10  that comment to me, but it effectively does when you

11  specify that it requires an on-board charger.

12            BOARD MEMBER RIORDAN:  I thought, at one point,

13  it was not specified that that Level 3 --

14            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  I

15  think he's saying well, for Level 2 that's true, but, you

16  know, in other words we specify an on-board for Level 2,

17  then we are, but I don't think that's exclusive.  In other

18  words, the charger that he's developing is a fast charger,

19  then it's a different system.

20            BOARD MEMBER HUGH FRIEDMAN:  What would you do if

21  you were him, had millions invested, what would you do?

22            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  I

23  would focus on marketing my fast charger as an off-board

24  charger, because the only -- that's what I was asking

25  about the -- if the connector is okay, then his end is


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 1  okay, and all that needs to be on the vehicle is the wire

 2  between the -- well it's not quite that simple, but the

 3  wires between the pins and the battery.  So his off-board

 4  charger does fast charging through the appropriate pins on

 5  the connector, which is already specified.

 6            CHAIRPERSON LLOYD:  So that would be okay.

 7            MR. FOSTER:  That's feasible.  We can continue to

 8  market our product as an off-board fast-charging system.

 9  We have other niche markets that we're doing development

10  work, and we're doing sales work.  And my concern is,

11  again, if by requiring anybody who's going to get a ZEV

12  credit to have an on-board charger greater than three

13  kilowatts, you have effectively disincentivized it by

14  putting any type of off-board combinations.

15            CHAIRPERSON LLOYD:  I think we're hearing some

16  sympathy to your investment here and technology.  I guess

17  what we're trying to look for is some hybrid approach

18  where we can have our cake and eat it, too.

19            MOBILE SOURCE CONTROL DIVISION CHIEF CROSS:  If

20  we go the way he's suggesting though, we're going down the

21  path of multiple standards again, because you can't have

22  off-board and on-board Level 2 charging without multiple

23  standards.

24            ON-ROADS CONTROLS BRANCH CHIEF KITOWSKI:  In

25  effect, it would be analogous to taking the


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 1  DaimlerChrysler system but changing the connector so that

 2  it looks like the Avcon or Ford, so it looks like it will

 3  charge with it.  Some vehicles, like a DaimlerChrysler,

 4  might look like they could go up to a charging station and

 5  they could charge and it would fit, it's just it wouldn't

 6  charge.

 7            CHAIRPERSON LLOYD:  I think we'll probably have

 8  to come back to this point and maybe ask staff how, in

 9  fact, we can work with it in the environment to mitigate

10  some of these issues.

11            Thank you, Dale.

12            Our last witness is Alec Brooks from AC

13  Propulsion.

14            (Thereupon an overhead presentation

15            was presented as follows.)

16            MR. BROOKS:  Good afternoon, Dr. Lloyd and

17  members of the Board.  My name is Alec Brooks.  I'm the

18  Chief Technology Officer at AC Propulsion.  I've been

19  involved in electric vehicles since 1987, both

20  professionally and as a driver.  In 1988, while at

21  AeroVironment, I wrote the proposal to General Motors for

22  the Impact electric car, the predecessor to the EV1, and I

23  was the project manager and chief engineer for the Impact

24  during its development.

25            I've used both conductive and inductive charging


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 1  systems, and I leased an EV1 on the first day they were

 2  available.  And, by the way, I spent $2,000 on a large

 3  pile inductive charger.

 4            I got the EV1 in spite of the inductive charging

 5  system not because of it.  I support the Board's

 6  initiative to settle the charging standards debate once

 7  and for all and I support the staff's recommendations to

 8  standardize on on-board conductive charging.

 9                               --o0o--

10            MR. BROOKS:  Lets skip this, because it's been

11  covered.

12                               --o0o--

13            MR. BROOKS:  "It ain't what you don't know that

14  hurts you; it's what you know for certain that just ain't

15  so."

16            I remembered this when I read a lot of the

17  submitted comments on this issue.  And I was reminded of

18  this pearl of wisdom from Charles Kettering, a great

19  inventor, engineer and educator and head of GM research

20  from 1919 to 1946.

21            There's been an awful lot of, what I consider,

22  misinformation and obfuscation of the facts.

23            Next.

24                               --o0o--

25            MR. BROOKS:  The first one I want to talk about


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 1  is cost.  There is no reason why the on-board components

 2  of a conductive system will always cost more than the

 3  on-board components of the inductive system.  There are

 4  many, many different ways to make a conductive charger,

 5  some will cost more than the inductive on-board

 6  components, and some will cost less.

 7            I want to point out that the display that's been

 8  put up here to compare the inductive and conductive

 9  systems makes use of the latest unreleased version of the

10  inductive system that takes and shows it compared to the

11  six-year old, separate conductive charger, and that is the

12  most complex conductive wall box.  So I don't think it's

13  exactly an apples to apples comparison.

14            These comments from Toyota and GM on the slides

15  show -- and these are taken from the public testimony and

16  submitted -- show that the real cost of the inductive

17  system is high and will remain high through 2020.  GM has

18  said that they don't want to be in the charger business.

19  It's easy to see why due to the cost involved.  But it is

20  hard to see why anyone else would want to be in the

21  inductive charging business.  By contrast, conductive

22  charging systems and connectors are made by small

23  companies that have to pay their bills from the product's

24  sales and are a sustainable business even at today's

25  volumes.


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 1            Next.

 2                               --o0o--

 3            MR. BROOKS:  Let's skip this one, it's been

 4  covered.

 5            Another often-heard but questionable fact is that

 6  the weight of on-board conductive charges will always be

 7  more than the weight of the on-board inductive components.

 8  While this has been the case for some first generation

 9  electric vehicles, new products and approaches may

10  eliminate or even reverse the weight difference.  One

11  nonintegrated six kilowatt charger that I'm aware of could

12  be integrated into the vehicle at a weight of five

13  kilograms, not the 50 that we heard earlier.

14            And GM's claim that a mile of range is lost per

15  kilogram of weight added is completely incorrect.  It

16  doesn't stand up to any rational engineering analysis or

17  even common sense.

18            Southern California Edison tested the EV1 with

19  both minimum and maximum payload conditions and reported

20  range losses of only 1/100 to 6/100 of a mile per kilogram

21  of added weight.

22                               --o0o--

23            MR. BROOKS:  Now, let's talk about consumer

24  friendly.  It's true that the inductive paddle is slightly

25  easier to connect to the vehicle than the conductive


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 1  coupling.  By having used both types quite a bit, this is

 2  a negligible difference.

 3            Another point worth considering in evaluating

 4  consumer friendliness are the multiple warnings attached

 5  to the newest conductive chargers.  These labels warn the

 6  consumer about the potential for burns, fires, shock and

 7  state that the ground fault interrupt device should be

 8  tested prior to each use.

 9            Conductive charging stations also contain some

10  warnings, but these are directed towards service people

11  that will open the box, not the end users of the device,

12  and there is no direction to manually test a ground fault

13  device every time the charge station is used.

14            Imagine a customer that is new to EVs, but is

15  interested in maybe getting one.  Out of curiosity, they

16  have to look at an inductive charger and pull out the

17  paddle.  What do they see?  A warning that you can get

18  burned.

19            By the way, the burn warning label was missing

20  from the charger that's on display here.  The recall from

21  the GEN1 EV1s for a charge port problem is well known.

22  I'd like to share some of my own experience in this area.

23            In February 2000 my EV1 was at the dealership for

24  a tire problem.  When I got the car back, I noticed a

25  smokey electrical smell while charging.  I called the


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 1  dealership and was told rather matter of factly, "Oh,

 2  that.  We put your car on charge after we finished and one

 3  of our technicians noticed smoke coming out of the charge

 4  port, pulled the paddle, but don't worry, we put in a new

 5  port.  It happens a lot."

 6            It was this incident that caused me to cancel the

 7  renewal of my EV1 lease.  A month later all Gen 1 and EV1s

 8  and S10s were recalled because of charge port problems.

 9  We were assured that there was no problem with the 1999

10  Gen 2 EV1s.

11            Next.

12                               --o0o--

13            MR. BROOKS:  Well, there was a problem.  In

14  November 2000, the 1999 Gen 2 EV1 was recalled for a

15  charge port fire danger.  The reasons cited were an

16  internal component variation, whatever that means.  Are

17  there any more flaws or defects in the latest inductive

18  system that we were not aware of?  A recent event suggests

19  that this may be the case.

20            On Monday this week there was a report on the EV1

21  Internet mailing list of a broken paddle on a small paddle

22  inductive charger at a park and ride location in southern

23  California.  I drove over to have a look.

24            Next.

25                               --o0o--


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 1            MR. BROOKS:  This is what I found.  The paddle

 2  casing was shattered.  The plastic was fractured with

 3  clean sharp edges and appeared to be brittle.  I'm not an

 4  expert in plastics, but I wonder if the choice of plastic

 5  for the paddle was severely limited by the requirement

 6  that it withstand temperatures that are hot enough to burn

 7  you.

 8            How the paddle was damaged is unknown.  It could

 9  have been vandalism or it could have been dropped, but it

10  does raise the question of whether the paddle is too

11  fragile for its intended application, and expected use and

12  occasional abuse.

13            I picked out of the dirt a couple of plastic

14  fragments from the paddle and I want to pass them up to

15  the Board to have a look at.  I also have with me a piece

16  of the segment of new Avcon coupler and it's plastic.

17                               --o0o--

18            MR. BROOKS:  What's been talked about in the

19  packaging.  Well, it turns out that the conductive inlet

20  is smaller in volume by about 20 percent than the new

21  small paddle inductive system.  And its mounting depth,

22  the depth from the circuit to the car back is about half

23  as much.

24            There's also in the inductive, there's a

25  requirement for cooling air flow to take away the losses


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 1  from the paddle and port.

 2            Next.

 3                               --o0o--

 4            MR. BROOKS:  Communication is another issue.

 5  Proponents of inductive charging have emphatically stated

 6  that vehicle-to-charge station digital communications will

 7  be an absolute requirement for things like car sharing,

 8  vehicle-to-grid and fuel cell vehicles.  This is not the

 9  case at all.

10            These applications will be better served with

11  wireless broad area coverage such as through

12  cellular-based data systems that will allow communications

13  with the vehicle whether it is parked at the charger,

14  being driven or plugged into a 110-volt outlet at home.

15  Even the Toyota Crayon station car program brochure touts

16  how GPS and cell-based date are used to track the E-com

17  vehicles.

18            Also there is no reason that station cars or

19  shared cars will be EVs.  It makes no sense to mandate a

20  communication method for these purposes as part of an EV

21  charging system.

22            Next.

23                               --o0o--

24            MR. BROOKS:  I want to briefly address charging

25  at higher power than the usual Level 2.  Level 1 or 110


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 1  volt charging is admittedly slow, but in my experience it

 2  has proved very useful.  With my EV1 with the so-called

 3  convenience charger I was able to make overnight trips and

 4  charge with 110 outlets at hotels.

 5            Level 1 charging is a kluge with inductive

 6  charging.  You have to have a separate box, called a

 7  convenience charger, that you remove with the trunk and

 8  unwind two cords, one with the paddle and the other way

 9  with a plug.

10            Level 1 charging is built right into many Level 2

11  conductive chargers, with no additional costs.  You just

12  plug it into a 110 outlet.  Level one is a useful and

13  valuable feature for EV drivers, especially for efficient

14  vehicles and vehicles with lead acid batteries.  You

15  shouldn't reject Level 1 just because it doesn't work well

16  in those vehicles with power-hungry battery cooling

17  systems.

18            Next.

19                               --o0o--

20            MR. BROOKS:  Level 2 Plus is a system that

21  provides faster charging for vehicles with on-board

22  conductive chargers.  The infrastructure side does not

23  require a costly off-board DC charger, only an up-rated EV

24  charge station that looks like the standard unit.  I think

25  we heard a little bit about that from EVI.


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 1            AC Propulsion's Level 2 Plus compatible charging

 2  system allows 20 kilowatts of charge power or about three

 3  times the standard rate.  Level 2 Plus accommodates up to

 4  400 amps AC or 96 kilowatts to allow for future technology

 5  growth in the capability of on-vehicle charging systems.

 6            Level 2 Plus is backward compatible with Level 2,

 7  and drivers of Level 2 Plus vehicles would have the choice

 8  of installing standard Level 2 or uprated Level 2 Plus

 9  charge stations at home.  Level 2 Plus provides the

10  potential to enable the cost effective faster charging

11  public infrastructure that remains compatible with

12  standard Level 2 vehicles.

13            Next.

14                               --o0o--

15            THE COURT REPORTER:  Could you slow down just a

16  tiny bit.

17            MR. BROOKS:  He told me I had to go fast.

18            THE COURT REPORTER:  Yeah, I know you told him,

19  but I can't write that fast.

20            (Laughter.)

21            MR. BROOKS:  I submitted this in writing as well.

22            BOARD MEMBER RIORDAN:  There are competing

23  interests.

24            (Laughter.)

25            CHAIRPERSON LLOYD:  Maybe, Alec, you could


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 1  compromise here and just hit some of the highlights, since

 2  we've got this in front of us then, and maybe slow down a

 3  little bit as well.

 4            MR. BROOKS:  Okay.  Integrated charging is a

 5  method of using -- the components are already there on the

 6  vehicle to drive the wheels to use them as a part of the

 7  charger.  I've made use of figures and charts that the

 8  inductive proponents have shown to compare the cost and

 9  weight of inductive and conductive.  I've put a red line

10  through all of the components that are not needed to be

11  separate with integrated charging, and I've also shown a

12  diagonal red line that shows with integrated charging

13  on-board cost and weight are clearly lower than inductive,

14  and as the inductive camp readily agrees, that the

15  off-board cost and weight are lower with conductive, too.

16            AC Propulsion is not the only company working on

17  integrated charging.  We have patents for our approach,

18  but this is not the only approach.  By the way, our

19  patents are in no way covering any of the standards that

20  we're talking about for the connector and the off-board

21  equipment.  There are at least three other patented

22  integrated charging systems by Fuji, JPL and GM.  Toyota

23  showed an integrated charger in the E-com at EVS14 in 1997

24  and may still have an integrated charger today.

25            Ford and Ecostar showed integrated charging in


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 1  1999.  GM's rejection of integrated charging is based on

 2  their experience for the system that was installed in the

 3  original impacts, now a 12 year old design and several

 4  generations behind the latest technology.

 5            Next.

 6                               --o0o--

 7            MR. BROOKS:  Vehicle-to-grid is a concept that

 8  allows vehicles with electrical storage and generation

 9  capabilities to perform valuable services while they're

10  not being driven.  The earnings potential is enough to

11  transform the economics of EVs -- instead of a cost

12  penalty associated with the emissions benefit, there would

13  instead be a cost reduction associated with the emissions

14  reduction.

15            I took it as a sort of vote of confidence that GM

16  and Toyota were so threatened by vehicle-to-grid that they

17  hired Mr. Austin to try to shoot it down.  If they had

18  spent one-tenth as much effort to find out more about the

19  concept and read the report, they would realize that

20  economic potential for EVs from vehicle-to-grid is not at

21  all related to the daily on-street power sales that we

22  agreed conceptually that that doesn't make any sense.

23            I should point out also that neither Mr. Austin

24  nor anyone from GM contacted us to find out more about the

25  vehicle-to-grid concept.  We're, of course, happy to brief


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 1  any automakers on the concept and let them know what we're

 2  doing.

 3            Next.

 4                               --o0o--

 5            MR. BROOKS:  This is why they're so worried about

 6  it.  What I call the inductive camp dismisses this.  What

 7  I call the inductive system is a vehicle-to-grid disabler.

 8  They say that it's compatible with vehicle-to-grid, but

 9  this is very misleading.

10            The current designs for the inductive system both

11  on the vehicle side and on the infrastructure side are

12  inherently incapable of bidirectional power flow.  By

13  contrast all of the existing Level 2 infrastructure --

14  conductive infrastructure is already vehicle-to-grid

15  compatible right now as installed.

16            It is true that the inductive coupler itself is

17  capable of bidirectional power flow, but the rest of the

18  system isn't.  To make it bidirectional would require

19  completely different designs for the infrastructure side

20  charging equipment and the vehicle side equipment.

21            The vehicle side would end up having to carry

22  around something of similar weight and complexity as the

23  current off-board charger.

24            This is a good example of how inductive charging

25  is hostile to new technologies.  If you want a new


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 1  feature, okay, just rip out and replace all of the

 2  installed charger base.  This is what happened with the

 3  move to the small paddle, thousands of old style large

 4  paddle chargers became obsolete.

 5                               --o0o--

 6            MR. BROOKS:  To sum it up, press on with

 7  selecting on-board conductive as the standard charging

 8  system.  We don't support a one-year delay for letting a

 9  consultant make the decision.  CARB staff already made an

10  independent professional evaluation and we support that.

11            Let the technology for chargers continue to

12  develop, but keep the high technology on the vehicle side

13  and keep the infrastructure side simple by adopting

14  standards that require the minimum possible equipment and

15  costs to safely deliver commodity AC electricity to the

16  vehicle.

17            The inductive system is inferior in many ways,

18  including cost both on and off the vehicle, energy

19  efficiency, robustness and vehicle-to-grid compatibility.

20  Conductive is the right choice.

21            Thank you for putting up with my speed.

22            CHAIRPERSON LLOYD:  Thank you, Alec.  How would

23  you respond to the comments of your previous employer?

24            MR. BROOKS:  I think there's no need to say that

25  you have to -- you can have an option of having only


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 1  off-board DC.  There is no reason whatsoever that you

 2  can't make a vehicle that has both on-board conductive and

 3  off-board DC.  I think at one point Ford was trying to do

 4  that, so they can market the system as best they can.

 5            Any conductive vehicle manufacturer could choose

 6  to adopt compatibility with that system and they chose to.

 7  I think the point that all vehicles being compatible with

 8  the standard level infrastructure is an important one, not

 9  to let that go.

10            CHAIRPERSON LLOYD:  Mr. McKinnon.

11            BOARD MEMBER McKINNON:  Yeah, I kind of had my

12  hand raised at the last speaker and I'll just ask you a

13  follow up to that question.  What would it cost to have --

14  what's the kind of cost variable to have the capability to

15  plug in to -- to have an on-board charger and be able to

16  plug in to say a fast charger like AeroVironment has?

17            MR. BROOKS:  I can give an opinion and then

18  someone from Ford can also talk.

19            Basically, it involves installing a slightly

20  larger or high capacity charged receptacle, which I don't

21  think is a big cost, and putting big wires from the

22  receptacle to the battery pack together with a two volt

23  contactor.  And then it also requires a fairly significant

24  software effort to talk back and forth to the charger.  I

25  think the software effort is probably the most expensive


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 1  part of the whole deal.

 2            BOARD MEMBER McKINNON:  What's your value?  Do

 3  you value the idea of having fast charging?

 4            MR. BROOKS:  Yes, within limits.  I think one

 5  thing to keep in mind is that the electricity company is

 6  charging for capacity about $10 a month per kilowatt.  So

 7  if I have a 60-kilowatt charge station and I have a fixed

 8  overhead of $600 a month before I pump any electricity at

 9  all, as the demand charge.  And also a lot of vehicles may

10  start tapering that power because of battery heating.

11            But I think what you'll find is that the --

12  there's a sweet spot that's somewhere between Level 2 and

13  60 kilowatts.  At AC propulsion we have chosen 20

14  kilowatts.  We have about three times the normal rate as a

15  nice good compromise that allows you to get a full charge

16  for most vehicles in one hour, and get back on the road.

17            To do much higher levels may or may not be cost

18  effective from the infrastructure side or the vehicle

19  side.

20            CHAIRPERSON LLOYD:  Thank you very much, Alec.

21            Does staff have any more comments?

22            EXECUTIVE DIRECTOR KENNY:  No.

23            CHAIRPERSON LLOYD:  I will now close the record

24  on this agenda item.  However, the record will be reopened

25  when the 15-day notice of public availability is issued.


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 1  Written or oral comments received after this hearing date

 2  but before the 15-day notice is issued will not be

 3  accepted as part of the official record on this agenda

 4  item.  When the record is reopened for a 15-day comment

 5  period, the public may submit written comments on the

 6  proposed changes, which will be considered and responded

 7  to in the final statement of reasons for the regulation.

 8            Just a reminder to Board members about our policy

 9  concerning ex parte communications.  While we may

10  communicate off the record with outside persons regarding

11  board rulemaking, we must disclose the names of our

12  contacts and the nature of the contents on the record.

13  This requirement applies specifically to communications

14  which take place after notice of the Board hearing has

15  been published.

16            I will start off with a communication here that I

17  met with Nissan and GM and Toyota on June the 12th in this

18  building.  We discussed the effect of changing to

19  conductive charging systems and the advantage of inductive

20  charging systems.  I met with Mr. Treebolt, Mr. McKeon and

21  Mr. Cassidy from Nissan, Mr. Nike Sadam and Wolterman from

22  Toyota and Mr. Weverstad, Ouwerkerk and Buttacadoli from

23  General Motors.

24            Any other board members starting from the

25  Supervisor?


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 1            BOARD MEMBER DeSAULNIER:  Nothing within the

 2  timeframe, Mr. Chairman.

 3            BOARD MEMBER RIORDAN:  Yes.  Mr. Chairman, I have

 4  met and the conversations would be reflected in the

 5  testimony that was presented today and the written

 6  comments.  I have Mr. Lindstrom Honda, Mr. Foster from

 7  AeroVironment, Mr. Franco, Mr. Rogers from EV1, Mr -- I'll

 8  just spell the last name, X-u from Ecostar, Mr. Fledgeon

 9  from Mazda, Mr. Brooks from AC Propulsion, Mr. Cartwright

10  from Avcon, Mr. Hosner from Litton, and Mr. Riley from BAE

11  Systems.

12            I also met with people from the Board, Mr. Brown,

13  Mr. Bell, Mr. King, Mr. Phan, Toepfer, Arbuckle, Stevens

14  and Richards.

15            CHAIRPERSON LLOYD:  Thank you.

16            Professor Friedman.

17            BOARD MEMBER HUGH FRIEDMAN:  I was also present

18  at the June 12th meeting in these offices with the Toyota

19  and Nissan and GM representatives that you mentioned.

20            I also was present with others at a meeting at

21  the Ford Think facilities in Carlsbad on June 18th for

22  much of the day.  Present were from Ford, Kelly Brown, Mr.

23  Bell, Ms. King, Mr. Phan, Mr. Toepfer, Mr. Arbuckle,

24  Stevens and Richards.

25            And also people from EVC3.  There were among


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 1  others Mr. Lindstrom from Honda, Mr. Foster from

 2  AeroVironment Inc, Mr. Franco from EV1 and Mr. Rogers from

 3  EV1, Mr. Jim Jude from Ecostar, Mr. Fledgeon from Mazda,

 4  Mr. Brooks from AC Propulsion and Mr. Cartwright from

 5  Avcon, and Mr. Hosner from Litton and Chris Riley from BAE

 6  Systems.  The subject was the same, the advantages and

 7  disadvantages of the two systems.

 8            CHAIRPERSON Lloyd:  Thank you.

 9            Ms. D'Adamo.

10            BOARD MEMBER D'ADAMO:  Mr. Chair, I, too, was

11  present at Carlsbad on June 18th at the meeting and met

12  with all of the individuals that Professor Friedman just

13  listed.  In addition, on June 12th in Modesto, I met with

14  representatives -- the following representatives from

15  Nissan, Mr. Cheeba, Mr. McKino Mr. Cassidy.  From Toyota,

16  Mr. Naiki, I'll spell it N-a-i-k-i, Mr. Asada, Mr.

17  Wolterman.  And from GM Mr. Weverstad, Mr. Ouwerkerk,

18  O-u-w-e-r-k-e-r-k, and Mr. Buttacadoli,

19  B-u-t-t-a-c-a-d-o-l-i.

20            The subjects discussed at both meetings were

21  similar to the testimony presented by these individuals

22  today.

23            CHAIRPERSON LLOYD: Mr. McKinnon.

24            BOARD MEMBER McKINNON:  I was at exactly the same

25  meetings as Professor Friedman on June 12th and on June


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 1  18th, with exactly the same people present, and all the

 2  subjects that were discussed at those two meetings have

 3  been thoroughly discussed at this meeting.

 4            CHAIRPERSON LLOYD:  Thank you very much, Mr.

 5  McKinnon.

 6            What I'd like to do at this stage is have board

 7  discussion to consider this in two parts as the staff

 8  presentation was.  The first part on majority-owned,

 9  small/intermediate volume manufacturers.  Any comments

10  from the Board on this or deliberations.

11            Supervisor DeSaulnier.

12            BOARD MEMBER DeSAULNIER:  Mr. Chairman, going

13  back to our brief discussion hours ago, I would be

14  inclined to think that I'd like to see this rule modified

15  just so that we either do it prospectively or we extend

16  the period out, in order to really ensure that those

17  companies that are making the investment are doing some

18  positive things, don't become disincentivized.

19            BOARD MEMBER RIORDAN:  I would agree with that,

20  Mr. Chairman.  I would like to encourage staff to work

21  through this issue and try to be helpful.

22            CHAIRPERSON LLOYD:  Board members, do you have a

23  suggested date here at all if we extend it out?

24            EXECUTIVE OFFICER KENNY:  If I might make a

25  suggestion.


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 1            CHAIRPERSON LLOYD:  Mr. Kenny.

 2            EXECUTIVE DIRECTOR KENNY:  Yes.  One thing that

 3  might be worth considering would be essentially to extend

 4  out the date to 2010, but at the same time to also then

 5  reflect in the regulation that any future acquisitions

 6  that are made by one of the big companies which is subject

 7  to the ZEV requirement, it would be subject to a

 8  specified -- essentially would be -- any future

 9  acquisitions that would be made would essentially be

10  subject to the 50 percent level that we had proposed to

11  you today.  And that that would be in place essentially

12  no -- any company that did that would get a set amount of

13  time, except in fact they would have the ability to sort

14  of make plans and to then adjust before they had to

15  actually comply.

16            And since we would be talking about moving this

17  out to 2010 to address the Board issue that has been

18  raised today, we should look at the same level of equity

19  regarding any future acquisitions that might occur with

20  other companies, but then we would try to identify a

21  specified period of time, for example, four years of lead

22  time, but not less than maybe six years in the event that

23  someone didn't today, something like that.  We would put

24  that out for a 15-day comment.

25            CHAIRPERSON LLOYD:  That would be good.


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 1            BOARD MEMBER RIORDAN:  Yes, I think that sounds

 2  very helpful.

 3            CHAIRPERSON LLOYD:  Any comments from my

 4  colleagues on the right?

 5            BOARD MEMBER HUGH FRIEDMAN:  I think that would

 6  work.

 7            CHAIRPERSON LLOYD:  Mr. McKinnon.

 8            BOARD MEMBER McKINNON:  Sounds like a great

 9  solution to me.

10            CHAIRPERSON LLOYD:  I think you heard the

11  sympathy from the Board to this particular case, but we

12  also recognize that it should be looked at as a specific

13  case here.

14            EXECUTIVE DIRECTOR KENNY:  All right.

15            CHAIRPERSON LLOYD:  So when we come to the

16  resolution then we can reflect that.  Now, the next part

17  of it in terms of the infrastructure standardization, I'm

18  hoping for suggestions from my colleagues here.

19            BOARD MEMBER RIORDAN:  Do you want to --

20            CHAIRPERSON LLOYD:  Don't all speak at once.

21            (Laughter.)

22            BOARD MEMBER D'ADAMO:  Well, I have one issue

23  that I think that -- and I may come back to it.  I wanted

24  to hear from some of the other board members as well on

25  this and other issues.  But on the transition period, I


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 1  know Mr. Kenny made some suggestions earlier.  I would

 2  feel most comfortable if we could include a provision in

 3  the resolution that would address the transition area

 4  period in terms of public infrastructure and individual

 5  owners.

 6            I think probably all of us here today have a

 7  concern that we don't want to see anyone stuck, in

 8  particular with cars that aren't even purchased or leased

 9  yet.  It would be very harmful to the overall cause, if

10  individuals do feel that we could somehow address this

11  issue and just left them out there on their own.

12            And I would encourage that staff come back with

13  recommendations on the subsidy program.  I really would be

14  willing to consider quite a high subsidy in the event that

15  we need to -- we were just talking about relatively few of

16  the individuals, so I think we need more information on

17  that.

18            EXECUTIVE DIRECTOR KENNY:  We'd be happy to do

19  all those things.  I think the issue with regard to the

20  transition is a very legitimate one.  And I do think we

21  want to approach this with the idea of being that we do

22  not strand investments or owners and that we continue to

23  incentivize purchases and not disincentivize anyone.

24            CHAIRPERSON LLOYD:  Yeah.  Again, where I'm

25  coming down here, it's a tough item.  The issue of


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 1  standardization, I think, is very important, because as we

 2  heard at both the September and the January hearing,

 3  consumer acceptance is going to be very important, and I

 4  think we were asked by the auto manufacturers to help

 5  actually get vehicles into the marketplace.

 6            So I think standardization of the charging system

 7  is important.  Other choices, you know, what do we do,

 8  what do we utilize there?  I've gone round and round on

 9  this depending on the presentations and whatnot and so it

10  is a tough issue.

11            But today, I think I heard some additional

12  information I haven't heard before, particularly on the

13  Codes and Standards issue of how much has gone on in that

14  arena.  I heard some additional work in terms of the pros

15  and the cons.  And I think, on balance, I feel that the

16  staff recommendation here is the one to move ahead on,

17  particularly if we look at the flexibility of the program

18  as we look ahead.

19            So that's where I feel that -- I would also agree

20  with Didi, there is a concern about future vehicles --

21  well, current vehicles, what do we do there, so that we

22  don't discourage them.  You've heard some of the testimony

23  from the drivers.  We heard testimony from the drivers

24  both ways, go with inductive, go with conductive, which

25  means that, again, there's not a real bias there.


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 1            I'm pleased to see some of the material

 2  improvement in the conductive system as well.

 3            Professor Friedman.

 4            BOARD MEMBER HUGH FRIEDMAN:  Well, I gather that

 5  even before I joined the Board efforts were under way to

 6  get the industry to develop, by consensus, a single

 7  standard.  I'm sure there were efforts in that direction.

 8  I know the staff provided great impetus.  But unlike --

 9  and I also was hoping the market would take care of it and

10  some day it might, although I don't know.

11            But unlike the Beta and the VHS where everybody

12  wanted to get a piece of this equipment, that it was going

13  to be so great in the house and in the den, and that the

14  cost is even then relatively small, and the market did

15  eventually decide that.

16            But here we've been told all along that the big

17  impediment to the EV is market acceptance, public

18  acceptance.  And it seems clearly to me that as long as

19  there's a duel standard and people are uncertain as to

20  what's going to shake out and whether they will be

21  stranded, that's an influencing factor, along with the

22  other potential advantages or disadvantages of one method

23  of charging over the other, particularly cost, and I've

24  heard information about that today.

25            So it falls on us, I think, to try and make a


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 1  solemn choice.  Unfortunately, we can't split a vote,

 2  unless we want to leave things as they are.

 3            I think that if we do whatever we can

 4  legitimately and reasonably to protect those who have

 5  already made the investment, who have the vehicles and

 6  those who are the big and small manufacturers who have

 7  made the investment and are making the inductive system,

 8  then we will have done as much as we can do, and I do

 9  think that we need to make the choice and we need to do it

10  soon.

11            CHAIRPERSON LLOYD:  The other part I would add

12  there, I would like staff to try to work with

13  AeroVironment.  They've been one of the pioneers,

14  obviously, in the electric vehicle business, and I think

15  that Dr. MacCready has been one of the real pioneers in

16  advancing technologies to see what we can do, how we can

17  work with the system here or how we can look forward and

18  that's an important part in this small business there, how

19  we can move ahead.

20            Small business, of course, maybe they're still

21  partly owned by General Motors, but they're still, I

22  think, the type of company we don't want to penalize for

23  all their efforts here.

24            Any comments?

25            BOARD MEMBER RIORDAN:  Mr. Chairman, I certainly


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 1  agree with many of the thoughts that have been advanced.

 2  We've got to deal with the transition period and I'm very

 3  comfortable with the staff recommendations that have been

 4  made.  We really did want this to be resolved and not

 5  necessarily have to come back to this Board, but clearly

 6  it wasn't resolved and so we do have to take a step today,

 7  which resolves it, and I'm comfortable with the staff

 8  recommendation and then the earlier recommendation for how

 9  to deal with the acquisitions of some of the larger

10  automobile companies.  And I think Mr. Kenny came up with

11  probably a very good compromise, that makes it all work

12  for everybody.

13            CHAIRPERSON LLOYD:  Supervisor DeSaulnier.

14            BOARD MEMBER DeSAULNIER:  I'll just add that

15  although I didn't have any ex parte communications to

16  report, I did have discussions outside the timeframe,

17  because the chairman knows that I was in Japan.  And I'm

18  not without sympathy because of those discussions of the

19  testimony here, and it's a difficult decision as my

20  colleagues have said, but I think staff has done a good

21  job at presenting a recommendation that ultimately will

22  lead to greater success for the whole program.

23            So I'd be supportive for a motion at the

24  appropriate time to support staff's recommendations with

25  Didi's comments in terms of the transition.


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 1            CHAIRPERSON LLOYD:  I think we'd all agree given

 2  what we went through in September and January, if in fact

 3  the free market had taken it out of our hands, but it

 4  doesn't seem to wait.  It's moving in that direction.

 5            So, again, we're called upon to exercise some

 6  judgment here.  And I'm also comfortable by the fact that

 7  it doesn't apply to 2006, so if anything catastrophic

 8  occurs in the next year or so we still have time to change

 9  or do whatever.

10            BOARD MEMBER HUGH FRIEDMAN:  I'm sorry.  I want

11  to add a couple more comments.  I have fought hard and

12  long about the alternative recommendation that we wait a

13  year and/or try and identify some independent experts to

14  whom we could throw this question and ask them to make a

15  recommendation.

16            I don't know.  I just can't see that waiting a

17  year is going to do anything other than make it worse, or

18  at least I don't see that it will improve anything other

19  than to find another group of so-called independents to

20  come up and make the hard choice, or at least help us make

21  the hard choice.

22            But on reflection, I think our staff has done an

23  excellent job.  As far as I can tell, they've been

24  unbiased.  They've been thorough, thoughtful.  We've taken

25  all the input.  They've had all the hearings and the


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 1  workshops.  And I think they're as independent as we're

 2  likely to get, if we could identify those independents out

 3  there.

 4            So while I thought long and hard about it, I just

 5  don't feel that that is particularly viable.

 6            CHAIRPERSON LLOYD:  I concur on that.  I think

 7  the big problem that I have is how do you get an

 8  independent, impartial group and how long will it take to

 9  do that?  I've been reminded by recent actions by the

10  President asking the National Academy for their views on

11  global climate change.  Well, it came back with what

12  everybody was saying.

13            So I think that from the objective perspective we

14  are not sure we can do anything about that with staff.

15  And again, I think we've scoured the world in those areas.

16  Again, I appreciate the sentiments of all the people

17  testifying on the industry side both ways.  I think there

18  was genuine concession about the relative merits of each

19  system.

20            Although, I must say on the standard's side, I

21  thought that when we had that testimony about what's

22  happening internationally, that gave me some comfort that

23  maybe things were further along than I thought.

24            Mr. McKinnon.

25            BOARD MEMBER McKINNON:  I think it's really too


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 1  bad that we had to be the ones to make this decision.

 2  That's kind of my starting point.  Although I've been

 3  watching the development of this data for ten years now,

 4  and certainly the discussion about standardization has

 5  been going at least four years.  And I have a recollection

 6  of it being brought up even before that.  I haven't been

 7  on this Board that long, but I've certainly been

 8  interested in this issue for a decade.

 9            I wish folks had gotten together and figured this

10  out together.  And maybe we'll do better at the next

11  pieces of it.  I mean, there's communication standards,

12  you know, there's things that are going to happen as third

13  parties begin to develop charging stations at the

14  Starbucks or whatever the infrastructure form takes now.

15  There's going to be conversations about how the

16  communications are done, how you sell back the energy, how

17  it's accounted for, all sorts of things.  And hopefully

18  folks will get together and try to figure out how to

19  standardize those things.

20            I think we're not the best to do that, but I

21  think we've been given little choice.  I think if we wait

22  around, we force a situation where we delay the ZEV

23  Program, which may be some people's intention in this.  I

24  wouldn't put that out of the realm of possibility, maybe

25  delays it, or maybe sets up the situation where we have a


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 1  lot more people with cars that lose their value because

 2  they don't have a way to charge them.

 3            So I don't see that we have a lot of choice.  I

 4  think we need to make this decision, and I think that what

 5  would be best from here on for this kind of thing is for

 6  the industry to try to figure out how to move forward

 7  without putting us in this spot to make this decision.

 8            And I would think that folks ought to be working

 9  on the international standards, and, you know, moving

10  forward.  And the SAE Committee, you know, reporting that

11  we've been meeting.  And it's voluntary and certainly

12  shouldn't wait on us.  If the industry can put it

13  together, the industry ought to put it together.

14            Thanks.  I'm going to support.

15            CHAIRPERSON LLOYD:  So do we have a motion?

16            BOARD MEMBER McKINNON:  I'll move it.

17            BOARD MEMBER RIORDAN:  Second.

18            CHAIRPERSON LLOYD:  Okay, so we're including both

19  of those items there as reflected in our discussion up

20  here.

21            All in favor say aye?

22            CHAIRPERSON LLOYD:  Opposed?

23            Thank you.  And thank you very much staff and

24  thank you participants.

25            We're going to take a 15 minute break, before we


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 1  address the next item, which would be the particulate

 2  matter and health effects.

 3            Some of the Board members haven't had lunch yet,

 4  some of the people haven't had it, and the court reporter

 5  really needs a break.

 6            So we'll commence at 2:15.

 7            (Thereupon a brief recess was taken.)

 8            CHAIRPERSON LLOYD:  Where is our legal staff, do

 9  we need a court reporter?

10            Or can somebody take it in longhand?

11            We're going to take up the item here on item

12  01-5-6, three research proposals.  Thank you staff for not

13  saying anything.  We'll move ahead to the Board discussion

14  here, I think.

15            The Board members have had an opportunity to

16  review these proposals?

17            BOARD MEMBER HUGH FRIEDMAN:  Yes.

18            CHAIRPERSON LLOYD:  Are there any additional

19  concerns or comments by the Board?

20            BOARD MEMBER HUGH FRIEDMAN:  I move approval of

21  the proposals as presented.

22            BOARD MEMBER RIORDAN:  I will second the motion.

23            CHAIRPERSON LLOYD:  All in favor say aye?

24            (Ayes.)

25            CHAIRPERSON LLOYD:  Approved unanimously.


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 1            Thank you.

 2            We've been briefed on these research proposals,

 3  so with that we will now take a 15 minute break and then

 4  come back, so we can eat.  And the court reporter must

 5  come back there.

 6            So at least this doesn't hold you up, Bart, now

 7  for contracts.  It would have been a problem, I realize.

 8            So next time we'll put the research proposals at

 9  the front then.

10            Dan, this isn't the way we typically approve

11  research by the way.  This is showing complete faith in

12  Bart here.

13            (Thereupon a lunch recess was taken.)

14            CHAIRPERSON LLOYD:  I'd like to reconvene the

15  Board meeting.

16            The next item on the agenda today is 01-5-2,

17  Public Meeting to Consider an Informational Item on the

18  Health Effects of Particulate Matter and the Status of Air

19  Quality Standards for Particulate Matter.

20            The Children's Environmental Health Protection

21  Act, SB 25 offered by Senator Martha Escutia in 1999,

22  requires the Board in consultation with the Office of

23  Environmental Health Hazard Assessment to reduce

24  California's current ambient air quality standards for the

25  adequacy of health protection, especially for infants and


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 1  children.

 2            The outcome of that evaluation discussed at the

 3  December 7th, 2000 board meeting was that particulate

 4  matter was identified as being one of the three standards

 5  that may be inadequate to protect public health.  The

 6  particulate matter standard was assigned the highest

 7  priority for review and revision.

 8            We also determined that the health effects of

 9  particulate matter are significant enough for us to

10  accelerate this review.  Today, staff from the Board and

11  the Office of Environmental Health Hazard Assessment will

12  update the Board on issues involved in the standard

13  review.

14            At this point I would like to ask Mr. Kenny to

15  introduce the item and begin the staff presentation.

16            EXECUTIVE DIRECTOR KENNY:  Thank you Dr. Lloyd

17  and Members of the Board.  As you stated, Dr. Lloyd, the

18  first standard to be reviewed under the Children's Health

19  Protection Act is particulate matter.

20            As a result of our preliminary evaluation of the

21  health based standards under this Act, we will be

22  reviewing a number of standards over the next several

23  years.  Since it has been some time since the Board

24  adopted ambient air quality standards, I asked staff to

25  provide you with an overview of the standard-setting


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 1  process and the issues involved with the particulate

 2  matter standard.

 3            A standard is adopted in consideration of the

 4  public health, safety and welfare.  Thus, the philosophy

 5  behind this standard is that it represents the definition

 6  of clean air for particular pollutants.  The

 7  standard-setting process does not address issues beyond

 8  health and welfare, such as control measures and the costs

 9  and feasibility or their environmental and economic

10  impacts.

11            Currently, we have three standards to protect

12  Californians from the health impacts of exposure to

13  particulate matter.  These are a 24-hour standard for PM

14  10 and the annual average PM 10 standard and a sulfate

15  standard measured as total suspended particulates.

16            Dr. Deborah Drechsler from the Health and

17  Exposure Assessment Branch and Dr. Michael Lipsett from

18  the Office of Environmental Health Hazard Assessment will

19  make the staff presentation.  Dr. Daniel Greenbaum from

20  the Health Effects Institute will discuss important

21  results from the recent national studies.

22            Dr. Drechsler.

23            (Thereupon an overhead presentation was

24            presented as follows.)

25            DR. DRECHSLER:  Thank you, Mr. Kenny.  Good


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 1  afternoon, Dr. Lloyd and members of the Board.

 2            The ARB in consultation with the Office of

 3  Environmental Health Hazard Assessment is currently

 4  reviewing the California Ambient Air Quality Standards for

 5  Particulate Matter and Sulfates.

 6            Since many of you have joined the Board since it

 7  last considered the ambient air quality standard, our

 8  presentation today is designed to inform you of the many

 9  complex issues staff will be considering during the

10  review.

11            Although the issues relating to particulate

12  matter exposure and health effects can be fairly complex,

13  let me emphasize that the health effects due to exposure

14  to particulate matter are significant.  The body of

15  evidence associating exposure to particulate matter were

16  premature death and cardio-respiratory diseases, including

17  asthma, bronchitis and cardiac problems is substantial.

18  Elevated concentrations of particulate matter also reduce

19  visibility.

20                               --o0o--

21            DR. DRECHSLER:  Our presentation today will cover

22  the following topics:  I will present an overview of the

23  standard setting process and review schedule.  I will also

24  discuss the nature of particulate matter exposure and what

25  makes it more complex than all other air pollutants.


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 1            Following my presentation today we'll be having

 2  Dr. Bart Ostro rather than Dr. Michael Lipsett from the

 3  Office of Environmental Health Hazard Assessment give you

 4  an overview of the latest scientific information on the

 5  adverse health effects of particulate matter and sulfates.

 6            Finally, Daniel Greenbaum, President of the

 7  Health Effects Institute, will discuss several Health

 8  Effects Institute funded epidemiology studies that are

 9  relevant to the particulate matter standards reviewed.  We

10  will also discuss emerging research and particulate matter

11  size composition and effects.

12            So what is an ambient air quality standard?

13                               --o0o--

14            DR. DRECHSLER:  An ambient air quality standard

15  is the legal definition of clean air.  Under California

16  law standards are based solely on health and welfare

17  considerations.  Costs and feasibility are not factors in

18  setting ambient air quality standards.  They play a role

19  only when specific control and implementation measures are

20  proposed for adoption.

21                               --o0o--

22            DR. DRECHSLER:  The Board's efforts, including

23  particular pollutant monitoring, emissions inventory

24  development, air quality modeling, and control strategies

25  development are directed toward achieving clean air in


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 1  California.  Ambient air quality standards form the

 2  foundation of the ARB's programs to achieve clean air for

 3  all Californians.

 4                               --o0o--

 5            DR. DRECHSLER:  The Federal Clean Air Act, which

 6  authorizes the US EPA to set national ambient air quality

 7  standards, also permits states to adopt additional or more

 8  protective State standards.  California has exercised this

 9  right by authorizing the Air Resources Board to set

10  California specific ambient air quality standards for a

11  variety of air pollutants, including particulate matter

12  and sulfates.

13            The Board has been concerned about the health

14  effects of particulate matter for many years.  The

15  original particulate matter standard was based on total

16  suspended particulates.  In 1982 the Board set current

17  California ambient air quality standards for particulate

18  matter, based on the mass of particulate matter ten

19  microns or less in aerodynamic diameter for PM 10 at a

20  level that is more protective of public health than the

21  national ambient air quality standard for PM 10, which is

22  currently in effect.

23            The US EPA has never set a separate standard for

24  sulfates, although California did so in 1977.  The

25  California Health and Safety Code specifies that an


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 1  ambient air quality standard has four elements, definition

 2  of the pollutant, in this case particulate matter and

 3  sulfates.  It also includes an averaging time, for

 4  example, 24 hours concentration to be achieved and

 5  specification for monitoring to determine attainment.

 6                               --o0o--

 7            DR. DRECHSLER:  The current California ambient

 8  air quality standard for particulate matter, as I

 9  mentioned, is based on the mass of ambient particles ten

10  microns or less in aerodynamic diameter for PM 10.  The

11  standard was based on PM 10 because particulate matter ten

12  microns or less in diameter is inhalable and can penetrate

13  deep into the lungs.

14            California has two standards for PM 10, an annual

15  average of 30 micrograms per cubic meter, which protects

16  against long-term health effects, and a 24-hour average of

17  50 micrograms per cubic meter, which protects against

18  short-term health effects.

19            The current sulfates standard is a 24-hour

20  average of 25 micrograms per cubic meter.  You've probably

21  heard that US EPA is also in the process of reviewing

22  their ambient air quality standards for particulate

23  matter.  They expect to promulgate new particulate matter

24  standards in 2003.

25            Next, we will be looking at several questions,


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 1  including what particulate matter is, how small it is and

 2  where it comes from.

 3                               --o0o--

 4            DR. DRECHSLER:  So what is particulate matter?

 5  It is a complex mixture composed of small droplets of

 6  liquid, dry solid granules and solid cores with liquid

 7  coatings.  Particles vary widely in size, shape and

 8  chemical composition, and arise from many sources.  As you

 9  can see from the slide, particulate matter is not a single

10  chemical entity like, for example, ozone.

11            It includes many chemical species that arise from

12  a wide variety of sources.  A few examples are metals,

13  nitrates, soil and carbon.  Also known dead sulfates are a

14  subtraction of particulate matter.  PM 10 can also be

15  divided into several size fractions.

16                               --o0o--

17            DR. DRECHSLER:  The first particles are between

18  2.5 and 10 microns in diameter and arise primarily from

19  natural processes.  Particles less than 2.5 microns in

20  diameter arise primarily from combustion processes.

21            Several examples of substances found in each

22  category are shown on the slide.  Particles less than 0.1

23  micron in diameter are referred to as ultra fine

24  particles.  These are freshly omitted from combustion

25  sources.  They have almost no mass, but the absolute


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 1  number of particles in this size category is very large.

 2            This represents a new and growing area of

 3  research.  Adverse health effects have been associated

 4  with all inhalable particles, PM 10, as well as PM 2.5,

 5  and ultrafine subfractions of PM 10.

 6            The potential for particulate matter to induce

 7  health effects is related to particle size.  Particles ten

 8  microns or less in aerodynamic diameter can be inhaled

 9  deep into the lungs where they can induce tissue damage

10  and various adverse health effects.  Particles larger than

11  ten microns in diameter are generally filtered out in the

12  nasal passages and do not enter the lungs to any great

13  extent.  To give you a perspective on how small these

14  particles are, the left side of the slide shows an

15  electron micrograph of a human hair.

16            On the right is a representation of the cross

17  section of the hair compared with 2 partials, one a ten

18  micron particle and the other a 2.5 micron particle.

19            As I mentioned earlier, the current California

20  ambient air quality standard for particulate matter is

21  based on measurement of the mass of the particles that are

22  ten microns or less in aerodynamic diameter.  So you can

23  see that PM 10 includes the 2.5 micron particle.

24                               --o0o--

25            DR. DRECHSLER:  We often also hear reference to


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 1  PM 2.5.  This is particulate matter with an aerodynamic

 2  diameter of 2.5 microns or less.  If we measure the

 3  concentration of PM 2.5 in the air, we measure only the

 4  particles that are 2.5 microns or less in diameter and

 5  omit all those larger than 2.5 microns in diameter.  Thus

 6  PM 2.5 is a subset of PM 10.

 7                               --o0o--

 8            DR. DRECHSLER:  Particulate matter comes from

 9  many sources, some of which are illustrated on this slide.

10  Some particles are directly emitted from sources such as

11  road dust and combustion related processes like motor

12  vehicles or fireplaces.

13            Still other particles, such as nitrates and

14  sulfates form in the atmosphere from chemical reactions

15  resulting in gas to particle conversion.

16                               --o0o--

17            DR. DRECHSLER:  You may be wondering how much

18  particulate matter we are exposed to in California.

19  Exposure to concentrations of particulate air pollution

20  greater than the State standard is ubiquitous throughout

21  California.

22            This map shows the current area designations with

23  reference to the 24-hour California ambient air quality

24  standard for PM 10.  As you can see, with the exception of

25  a few sparsely populated mountain areas that are


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 1  unclassified due to inadequate air quality monitoring

 2  data, only Lake County is in attainment with the current

 3  standard.

 4            The frequency of the 24-hour standard exceedances

 5  in 1998 range from 0 to 264 days, and in 1999 from 0 to

 6  306 days depending on the air basin.  This means that most

 7  Californian citizens are exposed to PM 10 polluted air on

 8  a few to many days per year.  On the other hand, the

 9  entire state is attainment for the sulfate standard.

10            Ultimately, the particulate matter standards

11  review process necessitates making a number of decisions.

12  ARB and OEHHA staff are studying the scientific literature

13  to determine what particulate matter size, averaging times

14  and concentrations are the most appropriate to ensure

15  protection of the health of all of California's citizens.

16            We are also reviewing and evaluating the

17  scientific literature to determine whether the separate

18  sulfate standard is still needed.

19            The monitoring method is also required with the

20  standard.  Currently, particulate matter and sulfates are

21  monitored with 24-hour filter based particle sampling

22  methods that are typically operated every 6th day.  These

23  methods are not readily amenable to short-term averaging

24  for example for times less than 24 hours.  Also, the

25  one-out-of-six-day monitoring schedule does not adequately


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 1  characterize exposure.

 2            The monitoring and laboratory division is

 3  currently evaluating several new continuous methods to

 4  determine what monitoring strategy will be most useful.

 5  Use of these new methods will allow multiple averaging

 6  times, both long and short term from the output of a

 7  single analyzer.

 8                               --o0o--

 9            DR. DRECHSLER:  As you have seen, promulgation of

10  an ambient air quality standard involves several steps

11  with contributions from staff, from ARB and OEHHA, the

12  public, the Board and others.

13            The standards promulgation process begins with

14  the draft report prepared by staff from OEHHA and ARB that

15  is released for public review and comment.  We are

16  anticipating the release of the first public review draft

17  of the staff report in late September of this year.  This

18  will be followed by a public comment period and several

19  public workshops.

20            The report will also undergo peer review by the

21  Air Quality Advisory Committee, which is OEHHA's outside

22  peer review panel, at a public meeting in November.

23            ARB and OEHHA staff will then revise the draft

24  report to incorporate the comments of the public and the

25  Air Quality Advisory Committee and re-release it for


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 1  further public comment in early March 2002.

 2            We expect to bring you our recommendations for

 3  the particulate matter and sulfate standards at the April

 4  2002 Board hearing.  Our recommendations will include all

 5  of the elements of the standards along with the evaluation

 6  of the supporting science.

 7            The recommendations will be summarized in a

 8  document that contains staff's best advice to you.  At the

 9  hearing, you will consider our recommendations and make a

10  decision on the new particulate matter standards.

11            Thank you.

12            Are there any questions?

13            CHAIRPERSON LLOYD:  Question, what plans are

14  there in the workshops to hold those in some of the

15  economically depressed communities, minority communities.

16            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

17  Richard Bode.  We haven't actually set up our workshops

18  yet, but we've been speaking with the Ombudsman Office

19  about identifying which communities.  Definitely, we're

20  probably looking at those areas that are most impacted

21  right now.  Definitely those areas in the south coast

22  where there is some of the highest particulate matter,

23  especially PM 10 concentrations.

24            CHAIRPERSON LLOYD:  I presume in the Senator's

25  district is one of those?


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 1            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

 2  Yes.

 3            CHAIRPERSON LLOYD:  Thank you very much for your

 4  presentation.

 5            Welcome Dr. Ostro.

 6            DR. OSTRO:  Good afternoon, Mr. Chairman and

 7  members of the Board.  I'm Dr. Bart Ostro from the Office

 8  of Environmental Health Hazard Assessment.  I'm going to

 9  briefly summarize some of the health effects of

10  particulate matter.

11            Basically, there are dozens of epidemiologic

12  studies from around the United States and the world that

13  record associations between particulate matter and both

14  mortality and morbidity or illness.

15            In these studies, particles have been measured as

16  PM 10, as PM two and a half or fine particles, as coarse

17  particles, which are the difference between fine and PM

18  10, that is particles between two and half and 10 microns.

19  Also, some studies have found some effects from sulfates,

20  and a few recent studies have found effects from ultrafine

21  particles.

22            These effects have been observed at current

23  ambient concentrations, which includes levels below the

24  current State standard, and also studies that have looked

25  at it have failed to detect a threshold level for some of


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 1  these effects that is a level of which no effects would

 2  occur.

 3            The effects have been related to both short- and

 4  long-term exposure.  In this case by short-term exposure

 5  we mean the 24-hour average, maybe lag by a day or two,

 6  and by long-term exposure we mean particle averages over

 7  several years.

 8                               --o0o--

 9            DR. OSTRO:  So I want to just provide a brief

10  overview as to how we derived these conclusions.  So I

11  want to talk a little bit about some of the epidemiologic

12  studies that were used to generate these conclusions,

13  specifically studies that relate acute exposure to

14  mortality, those that relate long-term exposure to

15  mortality, morbidity studies, and then a summary of our

16  findings.

17                               --o0o--

18            DR. OSTRO:  Basically, there are several types of

19  studies that look at the health effects of air pollution.

20  We have toxicologic studies, which look at animals exposed

21  in a laboratory setting.  There's controlled human

22  exposure studies where humans are basically exposed in

23  controlled settings, and epidemiologic studies where

24  health outcomes are observed among the free living

25  population and exposure is based usually on fixed-site


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 1  monitors located throughout the community.

 2            As Deborah described, particulate matter is a

 3  very heterogeneous mix of different chemicals and sizes.

 4  Therefore, most of the health effects literature relies on

 5  the epidemiologic studies as opposed to the toxicologic or

 6  human control studies.

 7            So basically, we're looking at data on humans

 8  under real world conditions and there have been recent

 9  animal studies supporting some of these epidemiologic

10  findings.

11                               --o0o--

12            DR. OSTRO:  There's several different types of

13  epidemiologic studies and I'm going to just discuss really

14  the first two that are listed there, time-series study and

15  prospective cohort studies.

16            So by Time-series studies, in this case on

17  mortality, although there are some Times-series studies on

18  morbidity and sickness outcomes as well.  We look at

19  associations, really statistical association, between

20  daily changes in air pollution and daily counts of

21  mortality in a specified city or region.

22            We also look at cause specific mortality, looking

23  at cardiovascular mortality, and maybe respiratory related

24  mortality.  So these studies have to control for other

25  factors that change on a daily basis, such as weather


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 1  changes and day of the week.

 2            And the factors that we typically are concerned

 3  about like smoking or alcohol use or occupational

 4  exposure, obesity, are not risk factors in these types of

 5  studies, because we're looking at daily changes.  And we

 6  really don't expect daily exposures for these things to

 7  change.  And these things are not really related to daily

 8  changes in air pollution, so they don't really affect the

 9  results of these studies.

10            One limitation of these studies is that they

11  examine relatively short material exposure, so they look

12  only at the effects of say yesterday's air pollution or

13  the air pollution over the last few days, so they're

14  looking only at very acute or short-term exposures.

15                               --o0o--

16            DR. OSTRO:  Nevertheless, these studies have

17  found consistent associations with daily mortality, and as

18  I mentioned, this is including all-cause mortality, as

19  well as disease specific mortality, like mortality from

20  cardiovascular outcomes, or respiratory outcomes.  And in

21  the last couple of years, there's actually been some

22  studies relating changes in particles to infant mortality,

23  as well.

24            The studies have been conducted throughout the

25  United States, in many parts of California and throughout


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 1  the world.  I think among these studies are the Health

 2  Effects Institute's studies that Dan Greenbaum from the

 3  Health Effects Institute will be discussing.  They're a

 4  multi-city study.

 5            But it's important to note that besides their

 6  study there's probably several dozen studies that have

 7  also been conducted on mortality.  As I indicated in the

 8  introduction, the associations are found even at very low

 9  concentrations of particulate matter with no apparent

10  threshold.  Some studies have specifically looked at

11  studies with very low air pollution levels or they've

12  statistically tried to model to see if threshold levels

13  exist.  And so far a threshold level has been -- they've

14  been unable to detect the threshold level.

15            The sensitive group that appears from these

16  studies are elderly people, those with chronic heart or

17  lung disease, and infants.  These groups appear to be most

18  susceptible to these mortality effects.

19            The other type of epidemiologic study that has

20  been used in the literature and has been reported in the

21  literature are so-called prospective cohort studies.

22  These are a very different type of study than the

23  Time-series studies.

24            These studies actually use individual level data.

25  They follow a specific group of people over time, maybe


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 1  seven to ten to 20 years, and they examine the impacts of

 2  longer-term exposure that is exposures over several years.

 3            These studies allow us to actually calculate the

 4  number of life years lost in the individuals.  And these

 5  studies are expensive but tend to be very informative.

 6  Now one example of the prospective cohort study is the

 7  American Cancer Society Cohort.

 8            This was a cohort of around 500,000 people from

 9  151 cities in the United States that were followed for

10  about seven years, and actually now they've been followed

11  for a lot more years, but the paper that was published had

12  been followed for seven years.  The study controls for

13  other effects on other factors that can affect mortality

14  like age, sex, smoking, socioeconomic status, obesity,

15  occupational exposure, and alcohol use.  Those things are

16  all controlled for.

17            And then differences in the air pollution levels

18  in the cities are looked at to see if mortality is

19  associated with those pollution levels.  And basically,

20  this study found that both all-caused mortality and

21  cardiopulmonary mortality were associated with fine

22  particles that is PM 2.5 and sulfates.

23            And among the findings were that the exposure to

24  particles over a long period of time, and we're not sure

25  exactly how long the period is needed, but somewhere


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 1  between probably a year and several years, these exposures

 2  were associated with significant loss in life expectancy.

 3  When you compare the most polluted with the least polluted

 4  city in the sample, it's roughly a two-year difference in

 5  life expectancy in the cities after other factors are

 6  controlled for.  So it's quite a significant effect.

 7                               --o0o--

 8            DR. OSTRO:  And there's also been several other

 9  cohort studies that have been published, generally

10  supporting those results.  A study out of Harvard looking

11  at six cities, and a Seventh Day Adventist Cohort study

12  centered in Southern California have also found effects

13  related to particulate matter.  And, again, the Health

14  Effects Institute has funded an independent reanalysis of

15  these data sets, and I think that will be reported on the

16  following.

17                               --o0o--

18            DR. OSTRO:  Another example of a prospective

19  cohort study using morbidity is the Children's Health

20  Study which has been funded by the Air Resources Board.

21            Now, besides the mortality effects, there's a

22  whole suite of morbidity outcomes associated with

23  particulate matter.  Among the more severe particulate

24  matter has been associated with hospitalization for

25  cardiovascular disease, as well as respiratory disease,


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 1  emergency room visits, urgent care visits, doctor visits.

 2  Also there's a whole range of cardiovascular outcomes now,

 3  that are shown to be related to particulate matter.

 4            You probably heard last week there was a study

 5  announced relating particles to heart attacks, one of the

 6  first studies of its kind.  We've also found studies that

 7  relate particulate matter to heart rate, to heart rate

 8  variability, which is a measure of how well the heart can

 9  adapt to stresses, to see reactive protein, which is a

10  measure of inflammation in the blood, which is a predictor

11  of subsequent mortality, and to other blood parameters.

12            Air pollution has also -- particles have also

13  been associated with exacerbation signs of asthma, with

14  acute and chronic bronchitis, with respiratory systems,

15  including cough, shortness of breath and wheeze, with

16  decrements in lung function and with work loss and

17  restricted activity days.

18            Some of these outcomes were included in some

19  recent studies, like the Children's Health Study, which

20  includes 12 cities in southern California.  And they're

21  finding that longer term exposure to particles appear to

22  be related to losses in lung function and increased

23  symptoms among asthmatics.

24                               --o0o--

25            DR. OSTRO:  So to summarize the general findings,


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 1  right now, it's that particles are related to mortality

 2  and morbidity and the results do not appear likely to be

 3  due to confounding or to chance alone.  The exposures

 4  seems to be associated with significant shortening of

 5  life.  There's no apparent threshold for these effects,

 6  that is no apparent safe level, and the effects have been

 7  associated with all the different measures of particles,

 8  PM 10, fine and coarse particles, sulfates and as I

 9  mentioned even some findings now with ultrafines.

10            So I think I'll stop here.

11            CHAIRPERSON LLOYD:  Thank very much.  Any

12  questions by the Board?

13            I found it most intriguing thinking about what

14  you didn't say and that was a plea for more time.  So I

15  was very pleased to hear that.

16            (Laughter.)

17            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

18  Any more questions, Dr. Lloyd?

19            CHAIRPERSON LLOYD:  No, I don't think so.

20            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

21  Okay, with that, I'd like to --

22            CHAIRPERSON LLOYD:  We may have some after we've

23  heard all the presentations.

24            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

25  I'd like to introduce our invited speaker, which is Daniel


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 1  Greenbaum, who's the President of the Health Effects

 2  Institute and he's going to talk about the latest PM

 3  research.

 4            CHAIRPERSON LLOYD:  We really appreciate your

 5  coming down.  I know how busy you are.  We appreciate it

 6  very much, sorry to keep you waiting as well.

 7            (Thereupon an overhead presentation

 8            was presented as well.)

 9            DR. GREENBAUM:  Thank you, Mr. Chairman.  It's

10  our pleasure to be here.  Actually, I'm here with Bob

11  O'Keefe who's the vice president of the Health Effects

12  Institute.  And for the record, as I was introduced, I'm

13  Dan Greenbaum, the president.

14            I actually felt this morning was hearkening back

15  to my own days running a State regulatory agency for Air

16  Quality, so it was interesting to see how you know how to

17  diet better on this side Of the country.

18            If you can give me the next slide, please.

19                              --o0o--

20            DR. GREENBAUM:  Just very briefly, I'll tell you

21  a little bit about who the Health Effects Institute is.

22  And you can flip through these.  First, that we're an

23  independent research institute that has joined Equal Core

24  Funding from government and the US EPA and the industry,

25  but that we have an independent board and expert science


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 1  committees who have no affiliation with either of those

 2  sets of sponsors, who oversee and review all of our

 3  scientific research.

 4            And finally, we've done over 200 studies on the

 5  health effects of a range of pollutants, particulate

 6  matter being the center of that.

 7                               --o0o--

 8            DR. GREENBAUM:  I'm going to briefly review, and

 9  not dwell on some, if you flip that, some of the data that

10  we had in 1997, if you could push the next button there,

11  which, as Bart said, these are the Time-series studies

12  which compare day-to-day relationship between air

13  pollution and health.  There are some -- in 1997, there

14  were some 40 studies, both in the US and Europe.  This

15  actual chart shows studies in Europe in a number of cities

16  with similar results in the United States, showing that

17  there was, to the right side of that line, an increase in

18  risk of about .5 to one percent per ten micrograms of

19  exposure to PM 10, an increase in risk of mortality.  And

20  some similar or sometimes even greater increase in risk

21  for hospitalization.

22            Next slide, please.

23                               --o0o--

24            DR. GREENBAUM:  There also are several studies on

25  long-term epidemiology.  Again, I'm not going to go over


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 1  the details, as Bart just very nicely summarized.  The two

 2  most often cited in 1997 were the Harvard Six Cities study

 3  and the Hope American Cancer Society study.  And those

 4  showed a larger effect, somewhat larger effect of four to

 5  five percent per ten micrograms.

 6            And in the next graphic that's on this page, this

 7  represents the Harvard Six Cities and Stubenville, Ohio,

 8  the S on the graph had about a 26 percent higher risk as

 9  the highest polluted city, compared to Ported, Wisconsin,

10  the P on the graph, which was the least polluted city.

11            Next slide, please.

12                               --o0o--

13            DR. GREENBAUM:  These studies were the basis of

14  the action by EPA in 1997 to set a PM 2.5 as well as the

15  PM 10 standard, as well as supporting some other types of

16  studies.  But there were questions that they and others

17  had at the time about the strength of this epidemiology.

18  There were questions about the importance of different

19  components of the PM mixture, which if you go to the next

20  bullet, please, which this is a very complex mixture, as

21  Deborah Drechsler said.  And there are questions about

22  whether all particles are created equally or are some

23  sources more or less toxic?

24            There were also questions about what mechanism,

25  biological mechanisms, next bullet please, effect might be


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 1  causing these effects.

 2            Next slide.

 3                               --o0o--

 4            DR. GREENBAUM:  There's been a lot of work done,

 5  and you can go through these, you can keep going on the

 6  bullets until you finish the slide, please.  A lot of work

 7  done under way on research funded by you at the Air

 8  Resources Board, by EPA, by us at HEI, by many other

 9  groups.  There are over 500 projects described on line.

10  At a quick inventory that we at HEI have created, at

11  www.pmra.org and if you'll hit the next button you'll see

12  what the home page looks like when you open it.

13            The next slide, please.

14                               --o0o--

15            DR. GREENBAUM:  So what could we do to answer

16  some of these questions?

17            Well, one of the first things that HEI did was

18  funded competitively something called the National

19  Morbidity, Mortality and Air Pollution Study or NMMAPS.

20  This was funded by HEI, but by a team led by the Johns

21  Hopkins University, and also including investigators from

22  Harvard University.  And rather than going city by city,

23  this study attempted to do a systematic analysis in the 90

24  largest US cities of air pollution, mortality and weather

25  using the same techniques in every city, so that you could


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 1  not only know that the results were similar in those

 2  different cities, but could combine them.

 3            There was a similar, although somewhat more

 4  limited, analysis of elderly hospitalization in 14 US

 5  cities that took part in this study.

 6            Next slide.

 7                               --o0o--

 8            DR. GREENBAUM:  And as you can see these cities

 9  span the continent.  These regions are broken up based on

10  EPA's assessment of different general pollution mixtures.

11  And as you can see, there were a number of the cities,

12  obviously in California included, although given that this

13  map wasn't drawn on this side of the country, California

14  was divided into at least two parts, and maybe a third if

15  you count the small corner over towards the Arizona and

16  Mexico borer.

17            Next slide, please.

18                               --o0o--

19            DR. GREENBAUM:  I'm sorry I had not expected the

20  bullets to be here, but this study was very systematic.

21  An extensive analysis was done, and it found when you

22  looked at these 90 cities a relatively consistent increase

23  in mortality, about .45 percent per 10 micrograms per

24  cubic meter of PM 10, which was actually about half the

25  magnitude of previous US analyses, but still a consistent


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 1  effect.

 2            Perhaps, most importantly from this study, there

 3  did not appear to be an effect of other pollutants that

 4  could make this particle effect go away.  And this chart

 5  illustrates that the solid line represents the effective

 6  particles compared to mortality and PM 10.  The other

 7  lines represent particles with other pollutants considered

 8  at the same time.  You see there's some change, but the

 9  effect is still there.

10            It also looked at the question of harvesting.

11  These are day-to-day studies.  Does that mean this is just

12  extremely ill people who are dying a few days earlier or

13  are there some longer term advancements of death.  And

14  they found evidence that there are longer term

15  advancements in death.

16            Next bullet.

17            They looked at whether exposure was measured

18  properly and found that it was not likely to change the

19  results in these kinds of studies.

20            And finally, overall, they found greater

21  confidence in the results of these Time-series studies

22  that we have been using to identify PM as a problematic

23  air pollutant.

24            Next slide.

25                               --o0o--


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 1            DR. GREENBAUM:  They did find when they looked

 2  across regions there were some differences in different

 3  parts of the country.  And in southern California and the

 4  northeast, they saw the largest effects, smaller effects

 5  in some other regions.  They attempted to try and

 6  understand why that is and are continuing under our

 7  sponsorship to do that, looking at things like whether

 8  there may be different pollutant mixtures, other

 9  pollutants that may be present in these that other

10  cities -- in these other regions, along with particles

11  either enhance or detract from the effect.

12            There may be other differences in the regions

13  that we're investigating now.

14            Next slide.

15                               --o0o--

16            DR. GREENBAUM:  We have extracted from that for

17  you the results in California of the 12 cities or at least

18  really the counties in California that they looked at,

19  county level data.  And I will start by cautioning you

20  about this slide not to too quickly say oh, we now know

21  that there's no affected particles in Sacramento, but

22  there is an effect in San Diego or Oakland.

23            These studies were designed to say what is the

24  relative risk across all these cities, but knowing that

25  some cities are smaller and larger doing them in a


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 1  systematic way so that you can combine them very

 2  carefully, because no one city other than perhaps Los

 3  Angeles is probably large enough to be assured that you

 4  would get a positive effect.

 5            Having said that, these are consistently positive

 6  with the exception of a few of the smaller locations.

 7  Sacramento is not.  And clearly the conclusion of both the

 8  investigators and our review committee of these studies

 9  was that there was evidence of a consistent increase in

10  mortality per 10 micrograms per cubic meter.

11            CHAIRPERSON LLOYD:  How do you explain Modesto.

12            DR. GREENBAUM:  Oh, well --

13            CHAIRPERSON LLOYD:  Didi, should be here I guess.

14            DR. GREENBAUM:  Well, that's why I started by

15  cautioning you about jumping to individual cities.

16  Modesto is obviously one of the smaller counties that was

17  included in the study.  And we did have some percentage of

18  the cities that showed up as not showing an effect, but

19  they were so small that it was not clear that that would

20  be necessarily the effect if you had more deaths in that

21  city.

22            We are looking at other factors as we go forward

23  to see whether perhaps there was something else going on

24  in those cities, some other pollutants or other things

25  that got in the way of that.


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 1            BOARD MEMBER RIORDAN:  Dr. Greenbaum, I thought

 2  that I heard you say something about counties.  And then

 3  you backed sort of into cities, is this a county or a

 4  city?

 5            DR. GREENBAUM:  The death rates were based on the

 6  counties around which each of these cities were based, so

 7  this is county level death rates.

 8            BOARD MEMBER RIORDAN:  County level death rates,

 9  but you took out the city and compared the City to the

10  County?

11            DR. GREENBAUM:  No.  What this was is basically

12  comparing the daily air pollution levels in a particular

13  county to the daily mortality levels in that same county

14  to see whether there was a relationship, and also

15  including daily weather patterns to see, because weather

16  itself might be causing it.

17            The only reason we put the city names up here is

18  for some people, particularly non-Californians, Orange

19  County is not as well located as Santa Ana or Anaheim

20  would be for example.  So those are there more for

21  identification.  These are county level analyses.  So it's

22  Los Angeles county for example.

23            BOARD MEMBER RIORDAN:  Thank you.

24            CHAIRPERSON LLOYD:  Again, it's surprising that

25  you got all down in LA.


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 1            DR. GREENBAUM:  Right.  And I think it's fair to

 2  say that we -- I mean, we are using exactly the same

 3  techniques in every city, so there may be some

 4  peculiarities of the analysis, but there also may be some

 5  differences and we're still continuing to probe that.

 6  That may help us understand in the future maybe there's

 7  some part of the particle mixture that's higher than in

 8  these other places and maybe that's why you're seeing a

 9  greater effect as well.

10            CHAIRPERSON LLOYD:  Smoking is taken out of this.

11            DR. GREENBAUM:  These are Time-series studies.

12  These are daily studies, so the smoking behavior doesn't

13  change much from day-to-day, so that one assumes that

14  that's not here.

15            Next slide, please.

16                               --o0o--

17            DR. GREENBAUM:  Now, the other thing that I'll

18  say here is that these investigators did try to test

19  whether as pollution went up, you saw an increase in

20  effect.  That's an important question relating to the

21  causality of pollution causing these effects.  And also as

22  you went down to the lowest levels of pollution, did you

23  still see an effect?

24            Overall for total mortality, they did see

25  generally a linear response, but when you broke that down


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 1  what you saw is that for the bottom part of this slide,

 2  cardiovascular deaths and respiratory deaths, there was a

 3  quite straightforward linear relationship with no matter

 4  how low you went with pollution you still have some

 5  effects, this is for PM 10.

 6            On the other hand, other types of deaths other

 7  types of cancer, for example, did seem to show some

 8  indication that effects didn't really start up until you

 9  got out to about 55 or 60 particles per -- PM 10 per cubic

10  meter.

11            CHAIRPERSON LLOYD:  What was the averaging time

12  on these?

13            DR. GREENBAUM:  These are daily.

14            CHAIRPERSON LLOYD:  Twenty-four hour average.

15            DR. GREENBAUM:  Twenty-four hour average.

16            Next slide.

17                               --o0o--

18            DR. GREENBAUM:  I'm going to ask you to cut me

19  off if I'm going too long.  I obviously want to answer

20  your questions along the way and we can --

21            CHAIRPERSON LLOYD:  We didn't invite you all this

22  way --

23            DR. GREENBAUM:  I'm sorry what?

24            CHAIRPERSON LLOYD:  We can't invite you all this

25  way and cut you off, and it's interesting stuff too, very


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 1  very relevant.

 2            DR. GREENBAUM:  The second set of studies that

 3  Bart described were the so-called long-term studies,

 4  studies that looked at populations of people over a period

 5  of time in their cities, knowing much more about the

 6  individuals, how much they smoked, how much did they

 7  drink, what was their weight which is a big indicator of

 8  health.

 9            And at the time in 1997, pretty much the Harvard

10  Six Cities Study and the American Cancer Society Study

11  were the two premier examples of this.  There were some

12  others of this sort in existence, but these were the

13  largest at the time.

14            These studies have been the ones upon which

15  people have usually estimated the numbers of possible

16  deaths resulting from particulate matter exposure.  And as

17  you can see, there's been a range of estimates made.  This

18  is two examples of US EPA in 1997, then a more recent

19  estimate by the World Health Organization.

20            We were asked in 1997 to conduct an in-depth

21  reanalysis of these studies.  And we had an expert panel

22  pick a team from the University of Ottawa, who had had

23  nothing to do with the original studies, to conduct that.

24            Next slide.

25                               --o0o--


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 1            DR. GREENBAUM:  And if you could go through the

 2  bullets here.  This was a very extensive study.  It was a

 3  study which looked at -- our reanalysis looked at auditing

 4  the original data.  It looked at different analytic

 5  approaches.  It looked at different variables that were in

 6  the database about the individuals, how much pack years of

 7  smoking, which wasn't used in the original study.

 8            It also looked at could there be -- these are

 9  studies -- remember the Steubenville, Ohio had a higher

10  death rate than Wisconsin.  Well, could there be some

11  other difference between those two cities other than air

12  pollution that might explain the difference in death.  And

13  we needed to look at a number of things that the original

14  investigators didn't look at.

15            Next slide.

16                               --o0o--

17            DR. GREENBAUM:  Having done that, I think it's

18  fair to say that overall the reanalysis assured the

19  quality of the data, it replicated the original results,

20  and it was able to test those results against a wide

21  variety of alternative models and analytic approaches

22  without changing the results very substantially.

23            And let me, in this slide just briefly point out

24  that this again is a study.  This was PM 2.5 and sulfates.

25  This is the American Cancer Society.  And they found in


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 1  the original analysis a 17 percent -- 1.17 increase in

 2  risk between the most and the least polluted cities.

 3            When our analysts went in, they've got every

 4  other piece of individual data we put out of there that

 5  might explain away those deaths.  You see the results

 6  under the full and the extended model and they, in fact,

 7  if anything, the effects of PM 2.5 went up slightly.

 8            So our conclusion was that, in general, these

 9  results were very durable and didn't go way.  Even though

10  we only had two of these studies at the time, they seem to

11  be very well done.

12            Next slide, please.

13                               --o0o--

14            DR. GREENBAUM:  There were some very interesting

15  results.  One of those had to do with the risks relating

16  to education.  When we broke up these populations into

17  people without a high school education, people with a high

18  school education and people with greater than a high

19  school education, we saw a marked difference in effect,

20  with the highest estimated effect on mortality being in

21  those without a high school education.

22            We do know education is a reasonably good

23  surrogate for social class for socioeconomic status.  And

24  we don't know exactly what might be causing this or

25  explaining this, but some of the things that have been


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 1  explored were, first of all, it may be that people who are

 2  lower socioeconomic status, in general, have a difference

 3  in their exposure.  And we have seen some data that

 4  suggests that given occupational differences, given less

 5  access to air-conditioning and other things, that actual

 6  exposure may be higher.

 7            There also maybe a -- we know that socioeconomic

 8  status results in generally -- well, worse health status

 9  for a variety of reasons.  And it may be that therefore

10  those people are more frail and more sensitive to the

11  effects of air pollution.  So these are some of the

12  possibilities that are being explored as a result of the

13  study.

14            But it is needless to say an important finding

15  that needs to be looked at more closely, particularly for

16  some of the least protected members of our population.

17            Next slide.

18                              --o0o--

19            DR. GREENBAUM:  Actually, why don't you just skip

20  by this.  I'm just going to say we also did some

21  additional analyses.  And one of the most interesting

22  things about that was we did find some relationship

23  between sulfur dioxide and mortality as well as particles.

24  And it's interesting that that would be the case.

25            Most of the toxicology data does not suggest that


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 1  sulfur dioxide would cause mortality, and so there may be

 2  other examples of why that may be -- other pollutants that

 3  follow along with sulfur dioxide that could be a cause.

 4            CHAIRPERSON LLOYD:  I notice you also mentioned

 5  sulfate as well.  So any efforts to remove sulfur from

 6  fuels is going really in the right direction.

 7            DR. GREENBAUM:  That's correct.  Well, of course,

 8  sulfur dioxide when it comes out it is transformed into

 9  sulfate particles.  And although fuel sulfur is not the

10  largest source in most cases -- actually in California, it

11  probably is a larger source, but in other parts of the

12  country it's not the largest, but it is able to be a

13  noticeable reduction.

14                               --o0o--

15            DR. GREENBAUM:  So to conclude first of all, the

16  reanalysis was able to identify relatively robust

17  associations with fine particle sulfate and sulfur

18  dioxide.

19            We tested those associations in nearly every

20  possible manner within the limitations of the data set,

21  and found that mortality was associated with the

22  particles, but also maybe attributable to more than one

23  component.  Some of these gas pollutants we shouldn't lose

24  site of those.  And I know you haven't lined up to look at

25  those as well in future reviews.


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 1            Next slide.

 2                               --o0o--

 3            DR. GREENBAUM:  I'm just going to just very

 4  briefly just say that the other element here is that as we

 5  go down the path of trying to control any kind of

 6  effectiveness, we are going to be faced with the issue

 7  that PM is a mixture.  And we do not know whether all

 8  particles are created equal in the sense of toxicity.

 9            Are some types of particles, are some sizes of

10  particles, are some sources of particles of more concern

11  and what will be the best method for regulation.  This is

12  the discussion that led EPA to move towards a 2.5

13  standards as well as a PM 10 standard.  There are many

14  studies underway that test different components and

15  different characteristics.  And the initial results are

16  beginning to come in.

17            Next slide.

18                               --o0o--

19            DR. GREENBAUM:  There are many possible culprits,

20  and I doubt we'll ever say that anyone of these is the

21  serious problem.  Many of them have been associated with

22  effects not in and of themselves, though, we may be

23  looking at certain metals on particles that have more

24  effects than others.  There may be certain organic

25  compounds, for example, the kinds of things that we found


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 1  on diesel particles that may have that effect.

 2            Next slide, please.

 3            CHAIRPERSON LLOYD:  How do you define biogenic

 4  particles?

 5            DR. GREENBAUM:  We have actually not done -- I

 6  mean biogenic particles obviously could have health

 7  effects and do have health effects.  Some of them have

 8  health effects in asthma exacerbation we know on a very

 9  regular basis, although those tend to be larger biogenic

10  particles.

11            We have not done studies along the biogenics.  We

12  have those underway currently, so we don't have results on

13  that.

14            Could you keep going with the --

15                               --o0o--

16            DR. GREENBAUM:  We have done a series of studies

17  trying to tease out this question of PM 10 versus PM 2.5

18  versus ultrafine versus PM 10 minus 2.5 of a particle.

19  And I think interestingly we have seen the effects

20  associated with each of those size cuts, with ultrafine in

21  PM 2.5 and the coarse fraction.

22            As this slide from the recent criteria document

23  shows, it's not clear that one of those size cuts is

24  jumping out ahead of the other one as the most

25  consistently problematic.  That doesn't mean that there


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 1  isn't an effect associated with one or another of those

 2  size effects the PM 10 or the PM 2.5.  But it's not clear

 3  that we're seeing a similar kind of levels of effect for

 4  all of these size cuts.  I think one of the considerations

 5  and certainly it was one of the EPA decisions to go to PM

 6  2.5 has to do as much with if you know you need to control

 7  both the coarse fraction and the fine fraction, what's the

 8  best set of standards to ensure that you get at that, and

 9  is the standard only for PM 10 going to be adequate to do

10  that?  I think that has been part of the consideration.

11            There are also a number of studies -- we have

12  studies underway, for example, some just down the road in

13  Davis, at UC Davis and others, looking at the effects of

14  metals, of PAH's, which come on diesel and many other

15  particles and of other components.

16                               --o0o--

17            DR. GREENBAUM:  I'm going to actually stop there.

18  I've been going on for some period of time but just to say

19  that we do have -- in my package there is some discussion

20  about the question about mechanism, about what we're

21  beginning to learn about that, and just to say -- and also

22  the say that we have had a sizable increase in our

23  knowledge since 1997.

24            In general, it has tended to say that the

25  epidemiology studies we had then have held up under quite


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 1  a bit of examination.  There continue to be some questions

 2  we're trying to address, particularly in two areas.  One

 3  is this question of portions of the particle making sure

 4  of what their relative effects might be.

 5            And the second is in the area of better

 6  understanding the biological mechanism underlying these

 7  effects, although we have started to see some of those.

 8            I'll stop there.

 9            CHAIRPERSON LLOYD:  Thank you very much.

10            Any questions from the Board?

11            Mr. McKinnon.

12            BOARD MEMBER McKINNON:  We had a workshop awhile

13  back, and a very interesting discussion around

14  environmental justice.  And I was looking at kind of your

15  using education for socioeconomic, which I'm real

16  interested in not only looking at environmental justice in

17  terms of kind of an ethnic national origin questions, but

18  to some extent socioeconomic and class questions.

19            In other words, there are some neighborhoods that

20  are the hardest impacted and how do you get to evaluating

21  that.  And I'm kind of interested in whether or not you've

22  done any work with kind of that combination of thinking

23  about that.

24            DR. GREENBAUM:  Well, I know the issues well.  I

25  actually sit on the Air and Water Subcommittee of the


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 1  National Environmental Justice Advisory Committee.  I

 2  think you're right to focus this issue beyond just any one

 3  ethnic group or racial group, because I think it is a

 4  broader questions, which these data raise about

 5  socioeconomic status.

 6            Certain groups are obviously going to be more

 7  affected, if you look at the socioeconomic status and we

 8  have to look at that.

 9            We actually have just started down the path of

10  some very specific studies, for example, looking at the

11  question of diesel exhaust and other particles and their

12  ability to exacerbate asthma.  We do know actually we've

13  had an increase in asthma in the country.  That increase

14  has been disproportionate in certain ethnic groups in

15  certain socioeconomic groups.  It's been higher than in

16  others.

17            And we actually are looking at possible studies

18  where we might look at those effects specifically in some

19  of the lower socioeconomic status populations to see

20  whether the effects were high in those settings that they

21  would be in others.  We're trying to get at that question.

22  This finding just pushes this even more in that direction.

23            BOARD MEMBER McKINNON:  Just a follow-up.  Part

24  of the reason I'm real interested in that is that I think

25  we may get confronted with fairly complex sets of facts,


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 1  such as neighborhoods where, in fact, there are

 2  neighborhoods in Los Angeles that are largely African

 3  American, where the folks in that neighborhood went to

 4  work in aerospace plants and ended up with fairly high

 5  levels of health care.

 6            And my guess is that in studying those

 7  neighborhoods we may not -- what we may see is better

 8  health, but the better health is because of better health

 9  care rather than the toxic exposures in that neighborhood.

10            So I think there's some variables that we're

11  going to have to really think through as we begin to look

12  at the economic justice.

13            DR. GREENBAUM:  Right.  And this is the kind of

14  area where you have to look at the different type of set

15  of studies.  These panel studies that Dr. Ostro referred

16  to where you actually go out and you find panels of people

17  and you find out things about them, you get them to agree

18  to participate and you actually get different populations

19  and different settings of exposure and so you can actually

20  see whether or not they have better health care and

21  various other things, where they're employed.

22            The other issue you run into is occupational

23  exposure sometimes and you have to control for those as

24  well.

25            But those sorts of studies may tell us better,


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 1  you know, is this a function of socioeconomic status, is

 2  it a function of ethnicity, is it a function of -- or are

 3  we all subject to similar risks from this exposure?

 4            CHAIRPERSON LLOYD:  Well, also your point there

 5  tying what you're saying in terms of health effects and

 6  education, I think you take into account the USC study,

 7  which is showing that pollution affects the education and

 8  the school absenteeism.  And it's a little bit of a Catch

 9  22 situation.

10            Are you looking at anything directly on

11  children's health work?  I realize that you did an

12  extensive study.  Is there anything that you could shed

13  some light to help us in what we're trying to do here?

14            DR. GREENBAUM:  I don't know that I could sort of

15  quickly give you specific results today.  We do have

16  underway several very key studies actually in this arena.

17  One of them is probably the most interesting.  It's

18  looking at a birth cohort a population that actually

19  happens to be in Europe, but is exposed to levels of

20  particles not dissimilar to what we see in this country.

21            And they have been followed first to see whether

22  there were effects in pregnancy of the mothers or in the

23  children.  Now, we'll be following them to see whether

24  there are effects in their development based on more or

25  less exposure.  And that will be very important to try and


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 1  flesh out more on this very effort.

 2            CHAIRPERSON LLOYD:  Last question, you know, when

 3  I was over in Europe you're subject to the same thing.

 4  They're putting increasing emphasis on noise pollution to

 5  the impact of deaths.  What do you make of that?  Should

 6  we be putting more emphasis on noise?

 7            DR. GREENBAUM:  Well, I was interested

 8  recently --

 9            CHAIRPERSON LLOYD:  In reducing noise I mean.

10            DR. GREENBAUM:  Well, there actually -- you know,

11  in this country under federal law we see things as HAPS,

12  Hazardous Air Pollutants.  But in the noise analyses in

13  Europe, a HAP is a Heavily Annoyed Person and literally

14  that is the kind of jargon that's there.

15            And noise has taken on a health dimension in

16  Europe that it hasn't come close to in this country.  It's

17  been interesting to see that.  We've been looking because

18  we do find research in Europe if that's where the

19  researchers come from, and there's a good opportunity to

20  learn something.

21            And we've been looking for whether there are ways

22  that we could bring that into this discussion because

23  there are certainly certain conditions that one would

24  expect that noise could be a contributor to and some of

25  the very same things that we look for, for instance air


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 1  pollution.

 2            CHAIRPERSON LLOYD:  Have you looked at any of the

 3  data over there, where they basically say, you know, noise

 4  builds more in some cases than traffic accidents.  It

 5  seems difficult to believe, but these are credible people

 6  making that point.

 7            DR. GREENBAUM:  Well, I think they are well done

 8  studies and I think they've gotten a start.  I don't think

 9  that they have the numbers of studies and the numbers of

10  approaches to it than we have, for example on particulate

11  matter and mortality, so that you want to see that built

12  up some before you leap to sort of the numbers, the

13  numbers debate.  But I think you can't dismiss it, and I

14  think it is a real issue.

15            CHAIRPERSON LLOYD:  As an ex regulator, what

16  would be your advice to us, should we, in fact, as we look

17  at some of our regulations, just address the noise issue

18  not do anything about it, but just --

19            DR. GREENBAUM:  Well, certainly noise is

20  something -- I mean, it's certainly something that people

21  have dealt with probably most in this country around very

22  high noise levels, for example, airport noise has been an

23  ongoing concern.

24            But I think we will see increasing attention here

25  and something that we need to look at in certain settings.


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 1  If we think -- your comment a minute go about the

 2  children's health study, the children not being able to go

 3  to school, certainly an effect on a child's ability to

 4  hear as a result of noise exposure is at least as

 5  damaging, if not more damaging, than potential future

 6  growth and development.

 7            CHAIRPERSON LLOYD:  Some of that may be

 8  self-inflicted with music type.

 9            (Laughter.)

10            DR. GREENBAUM:  I'm talking about very young

11  children.

12            (Laughter.)

13            MR. GREENBAUM:  You're really not going to

14  control the music choices of teenagers anymore than I

15  would for my daughter, so that's right.

16            CHAIRPERSON LLOYD:  Thank you very much for

17  coming down.  We appreciate that.  And I know that you're

18  in close contact with our research staff and we appreciate

19  working with you.

20            CHAIRPERSON LLOYD:  And we look forward to

21  continuing to work with the whole staff.

22            CHAIRPERSON LLOYD:  And Dr. Prasad back there as

23  well.

24            Thank you.

25            Is this the end of the presentation?


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 1            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

 2  It's the end of our presentation.

 3            CHAIRPERSON LLOYD:  Any other questions from the

 4  Board?

 5            Thank you very much.  I guess there's no action

 6  required on this particular item.

 7            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

 8  I think we have one person signed up?

 9            CHAIRPERSON LLOYD:  Oh, we do.  Thank you very

10  much.  Thank you.  We do have one person, thank you very

11  much.  Brian, I saw you back there earlier and I forgot,

12  but I'm sure you would have reminded me.

13            Brian Lamb from the Great Basin Unified APCD.  I

14  know they're greatly concerned about a particular town in

15  that area.  And you've made great progress I understand.

16            MR. LAMB:  Thank you, Chairman Lloyd.  You know

17  if you've got particulate matter on the agenda, then I

18  will bundle into my car at 4:00 in the morning and get

19  down here, and say a few words.  Next time just put

20  unspecified pollutant and I'll stay home.

21            Chair and Members of the Board, I am the District

22  Counsel for Great Basin Air Pollution Control District.

23  Many you know Dr. Ellen Hartebick our PPCO.  She sends

24  here regards.  We are the home venue, Southern Inyo County

25  in the home venue for Owens Dry Lake, which is the largest


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 1  single source of particulate matter air pollution in the

 2  country.  We have an inventory of about 100,000 to 300,000

 3  tons of particulate matter emitted directly every year.

 4            We have several 24-hour average concentrations in

 5  excess of 10,000 micrograms per cubic liter, measured at

 6  the ambient air.  In fact, just this year EPA had to add

 7  another digit to its data field in the Ayers Database to

 8  put our figures in there, because it wasn't big enough.

 9            We have a serious air pollution problem.  It

10  affects the surrounding communities in that area.  It

11  affects indian reservations.  It affects military

12  installations, so I'm here to support and encourage your

13  review of the particulate matter standard.

14            We think this is an important pollutant.  We

15  don't have epidemiology -- Owens Valley we don't have the

16  numbers to do that, but we have very persuasive anecdotal

17  evidence that concentrations of particulate matter at

18  chronic health effects that are very deleterious.

19            We want to encourage your staff to be looking at

20  the setting standard, look at the monitoring methods, and

21  try to work with EPA in having methods for monitoring that

22  are consistent.  I've raised with your board before that

23  the current State standards specified a certain method of

24  monitoring.  And in our case, it requires us to have

25  separate really obsolete monitors that are maintained just


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 1  to measure pollutant for the State standard.

 2            We'd really like to see the monitoring methods

 3  coordinated with EPA, so that we can use the same monitors

 4  for both the State and federal standards.

 5            We do support continuous methods of air pollution

 6  monitoring.  We use the Continuous T.O. method at Owens

 7  Lake.  And we do sea concentrations on our high days as

 8  high as 20,000 micrograms per cubic liter over an hour

 9  averaging period.  So it really does give you a picture of

10  the space.  And since a lot of the evidence on PM 10 is

11  that the effects are chronic related to peaks and exposure

12  that kind of information could be very useful both from

13  the standard and for health effects advice.

14            So I encourage you -- we intended the district to

15  participate in this process.  If you're looking for a

16  community that's interested, I might recommend a workshop

17  at Ridgecrest, which is downwind of Owens Lake.  And all

18  of our workshops in Ridgecrest are standing room.  It's a

19  community that feels the effect of particulate matter

20  pollution very dramatically.

21            CHAIRPERSON LLOYD:  Does anybody look to the day

22  to day hospital admissions on these high particulate days?

23            MR. LAMB:  I don't know that they have.  When

24  this issue has come up before -- our population in Inyo

25  County is so sparse especially the southern Inyo County,


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 1  the population of all of southern Inyo County is probably

 2  less than 10,000 people.  You have a self selected

 3  population to a certain extent of the people that live in

 4  the area of Owens Lake with the notable exceptions of the

 5  indian reservations that are near and also the military

 6  installations that are near are not self-selected.

 7            When we visited this issue last time, there was a

 8  tremendous amount of anecdotal evidence from the Navy Base

 9  in Ridgecrest that storm events were connected with like

10  where you go to the bas hospital, sick days.

11            We had in our administrative record a commanding

12  officer of the Navy base asked people to send in E-mails

13  about sick days or family health incidents connected with

14  storm events.  He got like hundreds of E-mails of people

15  anecdotally seen in direct connection between the storm

16  events on Owens Lake and hospital emissions or sick

17  children who are not being able to work.

18            CHAIRPERSON LLOYD:  So you came up with that.

19  I'm glad you've looked at some of the data down in the

20  Coachilla Valley.

21            DR. OSTRO:  No, the only thing -- I mean, there's

22  been a couple of studies on wind blown dust in the Utah

23  Valley and in Spokane and mortality, and they have not

24  found associations between the really high windy days and

25  excess mortality.  And that could be either because


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 1  particles are so big that they don't get inhaled or it

 2  could be that just people are averting on those days and

 3  not spending that time outside, but that's the only

 4  evidence that's there.

 5            BOARD MEMBER RIORDAN:  Brian, just a quick

 6  question, where would people go, other than military,

 7  where would the people go at Ridgecrest for hospital care?

 8            MR. LAMB:  In Ridgecrest, there is a hospital.

 9            BOARD MEMBER RIORDAN:  Is there a hospital there?

10            MR. LAMB:  Yes.  Ridgecrest is pretty well

11  provided for medically.  They have hospitals and medical

12  staff there.  And, of course, the military at the base

13  hospital.

14            BOARD MEMBER RIORDAN:  It would be good to get

15  some data from that.

16            MR. LAMB:  Like I said, it's in anecdotal, but

17  we've been told before is we don't have the numbers for an

18  appropriate study that would come up with significant

19  findings, but there is a lot of anecdotal evidence that we

20  find persuasive.

21            CHAIRPERSON LLOYD:  On this measurement issue, I

22  know we talked to you about that when I was down there a

23  year ago, and I guess I'm still a little bit confused on

24  the issue why we have not had any resolution on that.

25            MR. LAMB:  Well, the current standard, just to


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 1  recap, the current standard says a standard is 50

 2  micrograms per cubic liter as measured using a high volume

 3  size selective inlet monitor according to method B, which

 4  is a secret method, but it's basically hard to get

 5  somebody to provide with method B, but it's basically a

 6  description of the Anderson Monitor that was in effect in

 7  1982.  So the standard adopted a monitor to go with it

 8  monitoring technology in advance and --

 9            CHAIRPERSON LLOYD:  So we have an opportunity to

10  change the measurement method?  Do we intend to do that?

11            HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

12  That's actually definitely one of the things we're looking

13  at.  And we've been talking with the Monitoring Laboratory

14  Division, and they're very interested as well.  And I

15  think right now they're actually conducting a study

16  looking at continuous monitoring methods versus some of

17  the other ones.

18            MR. LAMB:  One of the research proposals that you

19  adopted today was putting those low-temperature methods in

20  Los Angeles to use those for continuing monitoring.  We

21  use the standard ones at Owens Like because the

22  temperature issue is not -- we don't have volatile

23  particulate matter, it doesn't matter for us, but we found

24  those to be very useful and accurate.

25            BOARD MEMBER McKINNON:  Mr. Chairman.


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 1            CHAIRPERSON LLOYD:  Yes.

 2            BOARD MEMBER McKINNON:  Yeah, I think we talked

 3  about this subject about a year or so ago.  And why don't

 4  we set a time today for hearing back on it.

 5            CHAIRPERSON LLOYD:  Maybe a visit from the

 6  Executive Officer.

 7            EXECUTIVE OFFICER KENNY:  We'll be happy to

 8  follow up on this and basically put something together so

 9  the Board actually gets a report on what is happening with

10  regard to monitoring.

11            CHAIRPERSON LLOYD:  Thank you.

12            MR. LAMB:  My final comments.

13            CHAIRPERSON LLOYD:  I think, you know, again I

14  think the work you talk about with the monitoring

15  division, I'd like to understand, because when I was down

16  there, I know obviously we worked with one of your

17  technicians there.  It seems to be pretty compelling to do

18  that, but on the other hand there's clearly some issues

19  with respect to the standard of what's required, et

20  cetera.

21            So what was the last issue?

22            MR. LAMB:  I just wanted to mention as an

23  information point that we are making progress on the work

24  at Owens Lake.  We're expecting by the end of this

25  calendar year to have at least ten square miles of the


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 1  Owens Lake flood, which is about roughly a third of what

 2  we originally identified as needed to control will be

 3  controlled by the end of this year with shallow flooding.

 4  It will be a significant historic and technical and

 5  emotional event to see water from the Los Angeles aqueduct

 6  released back on Owens Lake.

 7            CHAIRPERSON LLOYD:  Can you let us know when that

 8  happens?

 9            BOARD MEMBER RIORDAN:  Are you going to invite us

10  to serve?

11            MR. LAMB:  We'll invite you all.

12            CHAIRPERSON LLOYD:  And I presume you're

13  agreement was with LADWP and not Mr. Freeman?

14            MR. LAMB:  It was with LADWP, yes and it's

15  completely legal and binding.  That's my opinion.

16            (Laughter.)

17            MR. LAMB:  So I really thank you, Dr. Lloyd and

18  your staff and the entire Board for helping us make the

19  progress that we have.  It's only because we are making

20  timely progress against the federal standard that we are

21  really engaged at looking at what the State standard is.

22  This wouldn't be an issue with us if we didn't think we

23  would get past the federal standard in the foreseeable

24  future.

25            So thank you.


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 1            CHAIRPERSON LLOYD:  Thank you very much.

 2            So with that, anymore comments?

 3            And with that, I would like to close this item

 4  and thank the staff very much and thank Bart and Dan and

 5  Bob very much.

 6            Okay.  So we're going to move to the next item,

 7  which is 01-5-3, public meeting to consider the net

 8  effects of education on air quality.  The presentation is

 9  in response to questions raised by the public on the

10  effects of tree planting and vegetation on air quality.

11  Many of us are familiar that the Air Resources Board past

12  research and the effects of air pollution on plant health

13  in crop years.

14            However, we have heard less about the opposite

15  consideration, the effect of trees and other plants have

16  on the quality of the air we breathe.  So I look forward

17  to hearing about how plants influence air quality and any

18  practical applications that might help us achieve cleaner

19  air.

20            Again, I'd like, at this point, to reintroduce

21  Mr. Kenny and begin staff presentation.

22            EXECUTIVE DIRECTOR KENNY:  Thank you, Mr.

23  Chairman and Members of the Board.  Over the years, the

24  staff has put considerable effort in the hydrocarbons that

25  come from plants.  These emissions and other processes


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 1  that we will hear about in the presentation related to air

 2  quality, and thus they can influence the overall

 3  effectiveness of our clean air strategies.

 4            With that, I'd like to turn the presentation over

 5  to Jim Pederson who will make the presentation.

 6            MR. PEDERSON:  Thank you, Mr. Kenny.  Good

 7  afternoon, Dr. Lloyd --

 8            CHAIRPERSON LLOYD:  You've got to chew on it

 9  otherwise it doesn't get you.

10            That's better.

11            (Thereupon an overhead presentation

12            was presented as follows.)

13            MR. PEDERSON:  Thank you Mr. Kenny.  Good

14  afternoon Dr. Lloyd and members of the Board.  This

15  presentation is in response to interests shown by members

16  of the Board and the effects of plants on air quality.

17            We know that there are important anthropogenic

18  emissions related to plants for example, from agricultural

19  activities or tree maintenance.  But today,we will focus

20  on the ways that the plants themselves affect air quality,

21  and the affects of plants have an impact on ARB's efforts

22  to achieve clean air for all Californians.

23            Understanding these effects has been and

24  continues to be a long-term effort.  It is fundamental to

25  the emissions inventory used in our air quality modeling.


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 1  Thus understanding the effects of plants is part of

 2  predicting how hair quality will change as a mandate

 3  emissions change.

 4            And surprisingly we can have a positive influence

 5  on air quality by the use of plants.

 6                               --o0o--

 7            MR. PEDERSON:  I will briefly cover four broad

 8  topics, how vegetation affects air quality, what ARB is

 9  doing in this area, the information gaps that remain, and

10  what each of us can do to help improve air quality by

11  using plants.

12                               --o0o--

13            MR. PEDERSON:  First, let's look at the way

14  plants influence air quality.  I will cover four main

15  effects.  The first two are positive, the effects of

16  cooling and pollutant removal.  And two are negative, the

17  emission of pollutants and release of allergens.

18            The shaded evaporative cooling provided by trees

19  can improve air quality in two ways, cooling reduces the

20  pollutant emissions from many sources, and slows chemical

21  reactions in the air.  A different type of benefit is that

22  that plants speed up removal of some air pollutants.

23  Removal of pollutants by surfaces is called deposition.

24            But trees and other vegetation also emit

25  pollutants biogenic volatile organic compounds.  The


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 1  biogenic gases studied to date are highly reactive,

 2  meaning they are especially efficient in reacting to form

 3  ozone and PM 2.5.

 4            Another negative effect is that many plants

 5  release allergens that can initiate asthmatic responses in

 6  sensitive individuals.  Over 2 million Californians suffer

 7  from asthma.  For many of those individuals, the effects

 8  of allergens is a major health concern.  In the next

 9  several slides, I will cover each of this in more detail,

10  beginning with the air quality effects from cooling.

11                               --o0o--

12            MR. PEDERSON:  This slide shows the cooling

13  provided by Sacramento's urban forest.  The colors

14  represent surface temperature in late June at 1:00 p.m.

15  The coolest surfaces are blue.  The Sacramento River flows

16  from north to south, and the American can be seen in the

17  top right corner.  The areas of green are the urban

18  forest.  These areas are about 50 degrees cooler than the

19  rooftops shown in white which are about 140 degrees

20  Fahrenheit.

21            So how does temperature affect emissions?

22                               --o0o--

23            MR. PEDERSON:  Lower air temperature reduces

24  emissions from many different sources.  Cooling reduces

25  evaporative emissions of volatile organic compounds, for


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 1  example, shaded parking lots can reduce evaporation of

 2  gasoline from vehicle fuel tanks.

 3            In addition potential emission reductions are

 4  available from lowered electrical power demand.  Over the

 5  last decade, the Sacramento Utility District has invested

 6  over $20 million dollars to supply free shade trees and

 7  educate their customers regarding how to place trees from

 8  maximum cooling.

 9            This investment has been formally evaluated and

10  determined to be fiscally sound.  The conclusion is that

11  well sited shade trees can provide a substantial energy

12  savings for individual customers and collectively reduce

13  power demand.  In the extreme, properly placed shade trees

14  can lower individual residential air-conditioning bills by

15  more than 40 percent.  But the average savings are also

16  substantial.

17            The average mature tree in this program cuts the

18  cooling air energy load by 153 kilowatt hours per year.

19  Thus ten mature trees safe the energy needed to power one

20  air-conditioner.

21            When mature, the 300,000 trees planted by SMUD

22  customers will provide energy savings equivalent to 16

23  megawatts of new power generation.  In addition to

24  reducing emissions, lower air temperatures slow chemical

25  reactions, so that even less ozone is formed from those


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 1  reduced precursor emissions.

 2                               --o0o--

 3            MR. PEDERSON:  In addition, to reducing emissions

 4  and slowing reactions, we also know that under some

 5  conditions, plants help clean the air and in some cases we

 6  can predict how the rate of pollutant removal will be

 7  influenced by new plants that are present.

 8            Removal pathways depend on the specific pollutant

 9  and the environmental conditions.  For example, how they

10  react to the pollutants, such as nitric acid, are quickly

11  removed by any surface.  So the limited factor is usually

12  the amount of atmospheric mixing.  In other words, as the

13  pollutant concentration close to the surface is quickly

14  depleted, the bottle neck for removal will come from any

15  limitation in small turbulent motions needed to transport

16  air with high pollutant concentrations into contact with

17  the surface.

18            Thus, for those pollutants, the presence or

19  absence of plants will have relatively little effect on

20  removal rates.  For PM 10, deposition rates depend on

21  complicated relationships between particle size,

22  meteorological variables and surface shapes.  Plants may

23  increase the deposition of some sizes of particles, but

24  this is difficult to quantify.

25            On the other hand, we know that moderately


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 1  reactive pollutants, like ozone and hydrogen dioxide are

 2  removed mainly by uptake into the pours the plant pollutes

 3  called staminodium.

 4            So their removal rate is mainly determined by the

 5  amount of leaf area and whether the staminodium are fully

 6  open, which is fairly predictable.  As you might expect,

 7  deposition rates vary over a wide range.

 8                               --o0o--

 9            MR. PEDERSON:  This slide shows relative amounts

10  of ozone deposition to various surfaces.  Note the range

11  of values given for each plant, and the wide range between

12  the different types of plants.  Various air quality model

13  simulations have suggested that the deposition of all

14  pollutants occurred in both the San Joaquin Valley and

15  Upland areas could be decreasing ozone concentrations in

16  some areas of the valley by more than 10 to 30 parts per

17  million.

18            The two aspects of vegetation that I covered so

19  far have positive effects on air quality.  Unfortunately,

20  plants can also have a negative effect by emitting VOCs

21  that form ozone fine particles.

22                               --o0o--

23            MR. PEDERSON:  This slide shows approximately

24  biogenic emissions for different plants.  The values are

25  Calculated assuming average temperatures and light


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 1  intensity for the month of July in the central valley.  If

 2  the assumed temperatures were 18 degrees warmer, reaching

 3  a max up 170 degrees, that the estimated biogenic

 4  emissions would more than double.

 5            Thus, although, a single number is shown for each

 6  species, in fact, the amount emitted can vary widely,

 7  perhaps by more than a factor of 10, due to seasonal

 8  differences.

 9            Despite the range of values that must be

10  considered for each species, it is also clear that

11  biogenic emissions can vary with the type of plant.  The

12  biogenic VOC emissions are a large portion of the VOC

13  inventory in most California air basins.

14            For example, in the South Coast Air Basin, during

15  ozone episodes, biogenic emissions may be 1/4th of the

16  total VOC inventory.  And they are also more reactive than

17  most anthropogenic emissions.

18            Based on sensitivity simulations, again, using an

19  air quality model, the effects of zeroing out all of the

20  biogenic emissions in the San Joaquin Valley is the

21  reduction of ozone concentrations by about seven parts per

22  billion in the urban plume down wind of Fresno.

23            For concentrations were about 140 parts per

24  billion.  And by three to seven parts per billion over a

25  fairly wide area where concentrations were somewhat


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 1  lowered.

 2            In areas with more nitrogen oxide emissions, we

 3  expect the BBOCs to have a larger effect on ozone

 4  concentrations.  Similarly in future years, as the

 5  anthropogenic emissions are further reduced, the biogenic

 6  emissions will likely have more affect on ozone

 7  concentrations.

 8            Thus characterizing biogenic emissions is

 9  important to our understanding of atmospheric chemistry

10  and our ability to predict future air quality.

11            But the massive emissions alone cannot tell us

12  how much ozone will be formed.  The timing and the

13  location of the biogenic emissions are also important.  We

14  needed inventory that describes that time and location, in

15  addition to the mass of emissions.

16                               --o0o--

17            MR. PEDERSON:  Over the last two decades, the ARB

18  has made a great deal of progress in constructing such an

19  inventory and could be considered a pioneer in this area.

20  However, the ARB is still working to improve that

21  inventory of biogenic VOCs used for air quality modeling.

22            Obtaining the inventory of biogenic emissions

23  requires a great deal of supporting information.  For

24  example, emission rates vary widely between different

25  plant species.  We know that many high emitter species


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 1  release 10,000 VOC compared to low-emitting plants.

 2            Measuring or estimating emissions rates for over

 3  6,000 plants species is a difficult task.

 4            Additionally, because emission rates need to be

 5  multiplied the biomass to get the total emissions, we also

 6  need to know the leaky biomass.

 7            The first step is to identify plant species and

 8  where they grow throughout the State.

 9                               --o0o--

10            MR. PEDERSON:  In this inventory database, the

11  different colors that represent different types of land

12  use for plant communities.

13            The data base had a few of the dominant species

14  in each natural plant community, but their relative

15  numbers, biomass and other species present are usually

16  undefined.  The many climates of California support over

17  6,000 new species.  We have measured emission rates for

18  less than ten percent.  Emission rates for the other 90

19  percent are inferred from measured rates of the related

20  species.

21            Biogenic emissions are calculated by multiplying

22  the plants emission rate times the mass of its weeds.  So

23  we also need a way to figure out the mass of leaves.

24            For that, we use a parameter called Leaf Area

25  Index.


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 1  --o0o--

 2            MR. PEDERSON:  These satellite images go straight

 3  even within the Ozone, season.  The leaf area there is

 4  great.  Areas of Brown representing areas with very low

 5  green vegetation.  Yellow and green and blue representing

 6  increasing leaf area.  The special patterns of leaf Area

 7  are complex.

 8            The special atoms of leaf area are complex and

 9  cannot be characterized based on simple categories, such

10  as agriculture or forests.  For example, note the

11  variability within the central valley during July.  Also,

12  you see decreased leaf area in October for many areas,

13  including the coast range, agricultural areas and the

14  higher elevations in the sierra.

15            We use maps of plants species and leaf area index

16  to estimate the mass of location of emissions because both

17  factors help determine the amount of ozone that will be

18  formed.  But we also set the timing of emissions was

19  important to ozone formation.  You may be surprised at the

20  size of tempo variations and biogenic emissions.

21                               --o0o--

22            MR. PEDERSON:  To illustration the timing, this

23  slide shows the emissions for three principal types of

24  biogenic VOCs expressed in tons per hour, over a five-day

25  ozone episode.  The largest emissions are isoprene.  The


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 1  reason the emissions change from hour to hour and from day

 2  to day is because they respond to light and temperature.

 3            Because August 5th was the hottest day biogenic

 4  emissions were much higher on this day.  As The

 5  temperature in Azusa rose from 99 degrees on August 3rd to

 6  106 on August 5th, the biogenic emissions over the greater

 7  southern California area increased by nearly 40 percent.

 8  The hotter days also tend to be days with higher ozone

 9  concentrations.

10            The amount of ozone formed is also affected by

11  hourly aeration in emissions.  For example emissions late

12  in the day will have less impact, because they have less

13  opportunity to participate in photochemical reactions.

14                               --o0o--

15            MR. PEDERSON:  The last effect I want to mention

16  is the allergens released by plants.  Pollen from grasses,

17  weeds shrubs and trees is an important source of

18  allergens.  Vegetation is also a factor for propagation Of

19  some moulds.  But there are also many other allergens that

20  not related to plants, for example, pet dander and dust

21  mites.

22            For sensitive individuals, allergenic responses

23  can range from discomfort to misery to life-threatening

24  respiratory problems.  Allergens are a factor for about 90

25  percent of asthmatic individuals.  Although, plant


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 1  allergies are an important contributors to asthmatic

 2  responses exposure to these allergens is seasonal, since

 3  most people spend the majority of their time indoors.

 4            Indoor allergens, such as dust mites and moulds

 5  which are present year-round are more frequent triggers of

 6  asthmatic responses.  We've examined both positive and

 7  negative effects in plants, each of which is quite complex

 8  and subject to many assumptions and uncertainties.

 9                               --o0o--

10            MR. PEDERSON:  So as the ARB develops plans to

11  further improve air quality in California, our key

12  question is can we actively predict the effects of trees

13  and vegetation on air quality?  We do know enough to draw

14  several conclusions.

15            The total air quality effect of vegetation

16  depends on the plant's species and it's placement on the

17  microscale.  For example, with respect to a house a

18  microscale meeting its location relative to other sources

19  within our region.  We also know that biogenic emissions

20  are an important part of the emissions inventory.

21            But how do the positive and negative effects of

22  vegetation balance out?  The analysis performed by Dr.

23  Hidre Taha of Lawrence Berkeley National Laboratory

24  suggests that in certain cases, low-emitting trees can

25  reduce ambient ozone by removal of pollutants and emission


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 1  reductions associated with cooling.

 2            However his analysis also suggested that for high

 3  emitting trees, the beneficial cooling air cleaning

 4  effects are offset by the ozone formed from the VOC

 5  emissions.  Thus such trees may actually increase ozone.

 6  It is important to remember that these results should be

 7  interpreted with caution, because of the uncertainties of

 8  large number of barriers.

 9            ARB recognizes the importance of understanding

10  the effects of vegetation on air quality and so we have a

11  number of ongoing efforts.

12                               --o0o--

13            MR. PEDERSON:  Lawrence Berkeley National

14  Laboratory ARB is consulting with that group.

15            As a partner, in the central California ozone

16  study, we are working to organize and raise funds for

17  study of the deposition of pollutants other than ozone.

18            ARB has several research projects who help to

19  address biogenic biomass, biogenic emissions and

20  deposition.  These efforts have resulted in significant

21  improvements in the budget inventory over the last decade,

22  especially in the South Coast Air Basin.

23            We also formed the biogenic working group five

24  years ago to enlist cooperation of academics and other

25  agencies.


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 1            Through the coordination with other agencies, the

 2  group has acquired vegetation maps and leaf biomass

 3  databases.

 4                               --o0o--

 5            MR. PEDERSON:  As part of our efforts to

 6  investigate the health effects of exposure to air

 7  pollutants, we also consider the combined effect of

 8  allergens and air pollutants acting together.  Our most

 9  recent efforts also include outreach For the web page and

10  directly to tree advocate groups.

11                               --o0o--

12            MR. PEDERSON:  Some of the advocacy groups we are

13  working with include the Sacramento Tree Foundation, The

14  Tree People and municipal utility districts.  We'd like to

15  thank the Sacramento Tree Foundation for joining us today.

16            It's too late now to stop by the booth but they

17  came with expert advise and expert help with tree

18  selection and placement for maximum energy conservation.

19            Within the greater Sacramento Area the Tree

20  Foundation can arrange delivery for free shade trees

21  attached to your planning site and your individual needs.

22  Through partnership with tree groups, we can provide

23  information to the public regarding tree selection and

24  placement to improve air quality.

25            These groups are especially well equipped for


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 1  public education.  They already provide valuable guidance

 2  on actions we can take as communities and as individuals

 3  to better our environment.

 4                               --o0o--

 5            MR. PEDERSON:  But what information do we still

 6  need and what are the highest priorities?  The most

 7  critical need is to improve estimates of biogenic VOC

 8  emissions to allow us to better predict future year ozone

 9  concentrations.  To do this, we need more complete

10  inventories of the spacial distribution of plant species.

11  We also need to measure emission rates for more plant

12  species.

13            Our models of deposition require better

14  supporting information for making ozone precursors.  And

15  lastly we can improve our emissions inventory by more

16  fully considering the effects of local temperature

17  variations on energy use and emissions.

18            Filling in these information gaps is important if

19  ARB is to design the best strategies to achieve clean air.

20  Despite the information gaps, at this time we can identify

21  many types of species that are clearly desirable or

22  undesirable from an air quality perspective.

23            So an action we can take now is to inform and

24  influence the public to make planning choices to improve

25  air quality and avoid choices that would degrade air


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 1  quality.

 2            There are effective actions that individuals can

 3  take.  These actions are fairly simple and in the long

 4  term are very cost effective.

 5                               --o0o--

 6            MR. PEDERSON:  The key ideals which we invite

 7  people to be aware of are listed on the slide, achieving

 8  the potential benefits of energy savings and improved air

 9  quality requires planting the right tree in the right

10  location.  The very biggest improvements will come from

11  planting large fast-growing trees in areas that have

12  little coverage at present and planting to shape the west

13  and south sides of buildings and roofs.

14            Shading parking lots or other sources of

15  evaporative emissions also reduces VOCs.  However, for a

16  positive net effect on air quality, it is important to

17  choose species that emit relatively small amounts of VOCs

18  and avoid species that release allergens.

19            The difficulty in promoting use of low emitters

20  and less allergenic species is that these effects are not

21  visible to the public and they are only two of over 40

22  tree characteristics that might be considered in deciding

23  what to plant.  Clearly, influencing consumers directly

24  would be very difficult.

25            Because tree advocacy groups are active and


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 1  effective in public education, that again is our primary

 2  target audience.

 3            The choice of the best tree for a specific

 4  location is not simple, but it is possible to choose trees

 5  with the positive characteristics I talked about today.

 6  The Sawleaf Zelkova on the left is a good example.  It

 7  grows relatively quickly to large size.  It is a low

 8  emitter.  Additionally, it has know known health effects

 9  with respect to allergens or irritants.  From an air

10  quality standpoint, this is a better tree choice than the

11  tree on the right.

12            The Liquidambar is quite popular.  Unfortunately,

13  in addition to requiring maintenance due to litter drop,

14  it is a very high emitter of VOCs.  There are alternative

15  low emitter species that also provide fall color that emit

16  far fewer volatile organic compounds.

17            A great resource for finding the best tree for a

18  particular location is the database Selectree that is

19  available on the web.  Selectree describes over 40

20  characteristics for each of over 1,400 species of trees.

21  Searches can be based on any combination of

22  characteristics.

23            Cal Poly State University at San Luis Obispo

24  developed and maintains this database.  It incorporates up

25  to date information regarding biogenic emissions.


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 1            We have focused on the effects of vegetation on

 2  air quality.  That is only part of the larger picture in

 3  addition to decreasing energy use, trees and vegetation

 4  have other important benefits.  They provide well

 5  quantified watershed benefits, both in urban and nonurban

 6  areas.  For example, by increasing rates of water

 7  percolation, it creates reduced runoff and increased

 8  groundwater supplies.

 9            Other benefits are also well documented.

10  Controlled studies have clearly demonstrated very

11  significant social and psychological benefits from trees

12  in residential areas.  Trees also store carbon in their

13  woody biomass as they grow.  Thus, large long-lived

14  forests can help produce carbon dioxide concentrations.

15            With the carbon storage even for large forests is

16  a relatively small effect compared to other global

17  processes.  Additional, the storage is temporary.  As a

18  tree dies and decays, most of the carbon will be released

19  back to atmosphere, as carbon dioxide.

20            So we cannot rely on urban trees to handle global

21  warming directly.  However, those same trees if properly

22  placed to shade buildings can indirectly help reduce

23  carbon dioxide emissions by reducing the demand for

24  electrical power.

25            To recap we have examined the ways vegetation


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 1  affects ozone and fine particle concentrations both

 2  positively and negatively.  The largest air quality

 3  benefit comes from shade evaporative cooling that reduce

 4  emissions and slow the chemical reactions, but with

 5  removal is also important.

 6            Biogenic emissions of old compounds have a

 7  negative effect and needs to be well quantified to

 8  understand and predict future year concentrations of ozone

 9  and fine particles.

10            We also mentioned the effect of allergens on

11  sensitive individuals including asthmatics.  Plus they may

12  make some practical recommendations regarding how to use

13  plants, how the use of plants can help us to improve air

14  quality.

15            Now, we now there are going to be core day with

16  other groups to help influence planning decisions.

17            In conclusion we know a great deal about the

18  affects of vegetation on air quality.  In particular we

19  see the low emitting plants can have many positive effects

20  on the environment and can even improve air quality.

21            I hope that we have demonstrated the developments

22  and importance of ARB programs of accurately quantifying

23  the effect of vegetation on air quality.

24            Thank you for your time and attention.  We would

25  appreciate and questions or direction.


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 1            CHAIRPERSON LLOYD:  Thank you very much.

 2            Ms. D'Adamo.

 3            BOARD MEMBER D'ADAMO:  This is very interesting

 4  presentation.  How far off are we from data whereby when

 5  we look on a chart listing various tree species and come

 6  with any determination on similar to the information you

 7  had about temperature, freeze, the shade that's generated

 8  from temperature of trees would enable of one air

 9  pollution removal et cetera et cetera go out in

10  production?

11            How far off are we from getting information

12  similar to that in terms of emissions data?

13            MR. PEDERSON:  Michael Benjamin is our expert on

14  biogenic emissions.  He's done a lot of the research that

15  went into the database.

16            BOARD MEMBER D'ADAMO:  And if you could direct

17  your question not just to the negative effects but also to

18  the positive effects reduction of ozone, et cetera.

19            MR. PEDERSON:  Shall we start with the negative

20  of the positive?

21            EMISSION INVENTORY SYSTEMS SECTION MANAGER

22  BENJAMIN:  Thank you.

23            As Jim mentioned, our understanding of biogenic

24  VOC emissions is not that well known.  It would be

25  approximately 6,000 plant species in California.  We have


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 1  measured emission rates for something on the order of 500

 2  of those species.

 3            CHAIRPERSON LLOYD:  Job security.

 4            (Laughter.)

 5            EMISSION INVENTORY SYSTEMS SECTION MANAGER

 6  BENJAMIN:  Measuring these is extremely complex, very

 7  resource intensive, plants are biological systems.  In

 8  many ways it's like the PM studies that we heard earlier.

 9  It's like epidemiologic studies.  It takes a lot of

10  resources and time to measure these biogenic VOC

11  emissions.

12            However, we do feel like we have a fairly good

13  understand of the relative emission  rates of different

14  plant species.

15            BOARD MEMBER D'ADAMO:  Well, what I'd be

16  interested in seeing and maybe others on the Board would

17  disagree, but it seems like a relatively easy way to

18  achieve some benefits.

19            If you have an idea of good trees versus bad

20  trees.  And not having to go through all of the scientific

21  processes for every single of the 6,000 trees, if you had

22  a general idea that that -- that there are probably around

23  50 different species that would get us in that ballpark

24  where the negative aspect are quite minimal and the

25  positive aspects are quite great.


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 1            I would be in favor of exploring and perhaps

 2  we're just a long ways off of that, but I would be in

 3  favor of exploring some sort of incentive based program

 4  either run by the State of California or some similar to

 5  the Carl Moyer Program.  It sounds easy, but if we can

 6  help local air district retrofit, they why can't we

 7  encourage a program of additional treatment, and maybe

 8  expand that a step further.

 9            I remember when I got the staff briefing I had

10  asked this questions, and I don't know what the answer is,

11  but where I live there are -- every year there are

12  hundreds if not thousands of acres of orchards that lack

13  production and they get paved over so that houses can be

14  built.  I suspect that the result of that is that the

15  result of that is that we've got in certain areas more

16  cars and addition emissions.

17            However, there may be -- it may be a wash when

18  you look at the PM impacts of say an almond orchard that

19  is not longer there and reduce the agricultural activity.

20  I don't know, but in my gut it tells me that something

21  should be done in order to encourage -- if those trees are

22  in fact, good overall, if something should be done in

23  order to encourage agricultural production of certain

24  types that are on balance positive to air quality.

25            I don't know that.  I'll just open it up for


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 1  discussion.  I don't know how far off we are from getting

 2  that data so that we can put a program of that nature

 3  together.

 4            CHAIRPERSON LLOYD:  Of course, I assume, Didi,

 5  that while they're are 6,000, you'll put those in classes

 6  so it's not as onerous as one might think.  I would agree

 7  with you Didi.

 8            The other question that I'd like to ask along the

 9  line the Didi was asking, presumably since we're talking

10  about shade trees in some ways deciduous trees would be

11  better, because that would allow you to reduce cooling in

12  the summer and heating in the winter?  Would that be true?

13            MR. PEDERSON:  One of the important things that

14  really the energy savings hinge on is the location.  And

15  SMUD has some great materials on that, the truth audition

16  is also actually come to a siting and looked through that.

17            Planting on the west side is where the big

18  savings is.  The local effects of deposition are

19  important.  We have done some measurements of deposition

20  and we know differences between many species, but we've

21  measured fewer species than on the biogenic side.

22            However, there's probably a smaller range between

23  species on deposition than there is for biogenic

24  emissions.

25            CHAIRPERSON LLOYD:  Maybe, if you could, Mr.


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 1  Kenny, if staff could respond to Ms. D'Adamo with some

 2  suggestions, whether, in fact, that such a program makes

 3  sense.

 4            EXECUTIVE OFFICER KENNY:  We'll be happy to do

 5  that.  I think actually there's a couple of things we can

 6  do.  We can look at least subsidy programs, and we can

 7  also look at least publications that have highlighted

 8  those kinds of trees that are essentially more beneficial

 9  and also highlight those kinds of tress that we just as

10  soon not see and try to essentially put that out there as

11  information so that people actually are educated and make

12  the right choices.

13            But we'll be happy to follow up on this and we

14  can make a report to the Board on what me are able to do

15  and how We can implement this kind of a program.  And I

16  guess, you know, I don't think it's goofy.  I think this

17  is actually something that's actually very valuable so I

18  think it's something we really do want to put some effort

19  into it.

20            BOARD MEMBER D'ADAMO:  If staff could also when

21  it comes back before the Board, include, I know that the

22  Governor's has included in his budget a central valley

23  agricultural assessment.  I've spoken with Ms. Terry about

24  it. And I think the idea is to get the Air Board, along

25  with the various other resources agencies involved to put


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 1  together a database that the idea or the vision would be

 2  to plug in information about the example that I gave an

 3  almond orchard going out of product of what that means in

 4  terms of air quality, water, et cetera, economics.  So I

 5  would hope Trade and Commerce is involved in the economic

 6  piece, so if staff could report back on that piece as

 7  well.

 8            BOARD MEMBER RIORDAN:  Mr. Chairman, I've got to

 9  assume that Cal Poly San Luis Obispo at Pomona they've got

10  a lot of information I would think and I appreciated

11  having the reference of the trees.

12            The partnership with some of these foundations,

13  there's TreePeople in LA.  I'm not sure your group up here

14  that you mentioned.  Certainly we need to involve

15  ourselves with them.  They are the true workers.  And Ms.

16  D'Adamo, I don't know if you've met any of them.  They are

17  so dedicated.  And if we were to really make a difference,

18  I think we need to somehow associate ourselves with them

19  and support them, because they're the ones that would go

20  out and really sell the program, once you've developed the

21  information, and they're really a dedicated group.

22            You also need to work through -- I'm trying to

23  think of the program with the cities where they're

24  designated as -- sacramento is one of them, where you're

25  designated as a tree city, and there's some recognition


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 1  of -- I not -- I think I'm correct when I say this, you're

 2  recognized, but also the City makes a real effort to do

 3  street trees and some really good things that maybe

 4  littler cities may not have undertaken not knowing of the

 5  strong benefits.

 6            But, you know, some of those kinds of linkages

 7  are very important if you really want to make it work

 8  well.

 9            RESEARCH AND ECONOMIC STUDIES BRANCH CHIEF COREY:

10  Board Member Riordan, Richard Corey.  I wanted to respond.

11  It think that's an excellent suggestion and make the point

12  that we have begun those efforts to reach out to a number

13  of the tree organizations who have -- many of them have

14  well established educational programs and they're very

15  perceptive to including within those educational programs

16  information on air quality and emissions that we've

17  discuss with you and expand those efforts and have

18  established a web page that includes links to those

19  organizations as well, and also looking -- and also

20  coordinating with educational programs, landscape

21  architect education programs, as well as others.

22            So we see that linkage as an opportunity to build

23  on it in terms of the vehicle to funnel this information

24  through.

25            BOARD MEMBER RIORDAN:  Thank you.


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 1            CHAIRPERSON LLOYD:  Thank you.  I think before we

 2  conclude this item, I thought that the Board would get

 3  some free samples of trees we should plant, but what

 4  happened to them?

 5            MR. PEDERSON:  You took a little too long on the

 6  earlier item.

 7            (Laughter.)

 8            CHAIRPERSON LLOYD:  You didn't tells us there's

 9  an incentive clause in there.

10            (Laughter.)

11            BOARD MEMBER RIORDAN:  The trees are already

12  planted.

13            MR. PEDERSON:  I'll just make a comment that the

14  fact that a lot of the tree organizations are cited where

15  there's already a program going on, and the place where

16  the biggest change can occur, is where there isn't a

17  program.  So some of the areas that aren't well treed and

18  particular schools, in our cities, could occur.

19            CHAIRPERSON LLOYD:  Well, thank you.  That

20  concludes that item, and thank you very much, staff.

21            We will take a ten minute break now to 4:30 while

22  we change the court reporter an then we'll continue on the

23  smoke management guidelines item.

24            (Thereupon a brief recess was taken.)

25


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 1             CHAIRPERSON LLOYD:  I'd like to restart the board

 2   meeting.

 3             As you'll notice that, contrary to what I stated

 4   before the break, we're going to hold the item on rice straw

 5   phase-down in deference to some of the farmers we may have

 6   here to speak on this item.

 7             So the next item on the agenda today is 01-5-5,

 8   public meeting to consider the 2001 biennial report to the

 9   Legislature on the phase-down of rice straw burning in the

10   Sacramento Valley region.

11             State law requires the Air Resources Board and the

12   California Department of Food and Agriculture to report to

13   the Legislature every two years on progress in reducing the

14   amount of rice straw burning in the Sacramento Valley.

15             This report focus on activities occurring since

16   the 1999 report.

17             The ARB is also required to submit a report

18   presenting findings regarding the air quality, public

19   health, and economic impacts associated with the burning of

20   rice straw through the years 1998 to 2000, when the

21   phase-down schedule was paused at 200,000 acres.  And the

22   pause report is incorporated in the 2001 biennial report.

23             I would now like to ask Mr. Kenny to introduce the

24   item and start the presentation.

25             MR. KENNY:  Thank you, Mr. Chairman, and members


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 1   of the board.

 2             As we reported two years ago, the phase-down

 3   requirements are being met.  The key issue continues to be

 4   the status of alternatives to burning.  Primary alternative

 5   is still soil incorporation, and we recognize we need to

 6   pursue increased opportunities for off-field uses of rice

 7   straw.

 8             Although the diversion rate is still too low,

 9   there are a number of alternatives which are showing

10   promise.

11             Staff will present an update on existing and

12   promising new projects for the use of rice straw, both in

13   the short and longer term.

14             An additional $1 million in funding for the rice

15   straw grant program will be available in July 1st,

16   hopefully.

17             This funding will provide further support and

18   incentives for the use of rice straw, as alternatives other

19   than soil incorporation become more widely available.

20             With that, I'd like to turn the presentation over

21   to Theresa Najita, of the Planning and Technical Support

22   Division.

23             CHAIRPERSON LLOYD:  In relation to the last item,

24   what about straw trees?

25             MR. KENNY:  We'll look at that.


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 1             MS. NAJITA:  Good afternoon, Mr. Chairman and

 2   members of the board.

 3             As the chairman and Mr. Kenny stated, we are

 4   presenting an update on the phase-down of rice burning in

 5   the Sacramento Valley Basin.

 6             Based on comments received, we have made revisions

 7   to the proposed report.  A handout showing these revisions

 8   is available in hard copy on the table outside this room and

 9   is included in your packets.

10             The requirements for the phase-down of rice straw

11   burning have been met.  Beginning this fall, burning will be

12   allowed only for disease control purposes.

13             The availability of alternatives to burning of

14   straw, however, continues to be of critical importance.

15             Air quality impacts are being minimized, but other

16   environmental impacts are mixed.

17             Finally, the cost of incorporating straw back into

18   the soil impacts grower profits, along with other factors.

19             Although the goal to divert 50 percent of the

20   available rice straw to off-field uses has not been

21   achieved, projects are being developed which may improve the

22   long-term outlook.  The most promising projects currently

23   underway involve the use of rice straw for construction

24   material, export, animal feed and compost.

25             Based on discussions with project proponents, our


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 1   best estimate is about 447,000 tons could be used off-field

 2   by 2005, which would represent about 40 percent of the

 3   available straw.

 4             In an effort to help overcome some of the barriers

 5   to burning rice straw, ARB staff planned a forum to showcase

 6   rice straw products and to promote market availability of

 7   rice straw as a commodity.

 8             The Rice Straw Expo will provide an opportunity to

 9   show demonstration projects, expand contacts for the

10   handling of rice straw, and to provide information on the

11   many incentives to use straw.

12             We will be inviting participation from many

13   governments and private stakeholders.

14             We anticipate this event will be held in February

15   or March of 2002.

16             The rice fund was established in 1997 to support

17   development of new rice straw technologies.  Since then the

18   ARB has awarded grants for many demonstration and

19   commercialization projects.

20             A high percentage of the anticipated rice straw

21   usage in 2005 is through projects funded by the rice fund.

22             The proposed state budget for 2001-2002 includes

23   one million for the rice fund.  If this money remains in the

24   budget, we anticipate bringing new applicants to the board

25   for approval this fall or winter.


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 1             The current criteria for the awarding of the rice

 2   fund grants limits to funding to projects that directly

 3   utilize rice straw.

 4             We believe that increased opportunity will result

 5   from an expansion of the criteria to include infrastructure

 6   and marketing program development.

 7             In conclusion, ARB staff recommends that the

 8   Legislature continue efforts to provide financial and

 9   technical support to develop alternatives to the open field

10   burning of rice straw through the use of grant programs, tax

11   incentives and the rice fund, and to encourage the use of

12   rice straw by state agencies for environmentally sound

13   purposes such as erosion control, weed suppression, compost

14   and sound mitigation.

15             This concludes my presentation.  Thank you.

16             CHAIRPERSON LLOYD:  Big incentive bonus there.

17             BOARD MEMBER RIORDAN:  Mr. Chairman.

18             CHAIRPERSON LLOYD:  No wonder I couldn't follow

19   this.

20             Thank you very much.

21             Any question from the board?

22             No.  Thank you.  I guess we'll open --

23             MR. KENNY:  There are witnesses.

24             MS. WALSH:  The first witness is Supervisor

25   William White.


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 1             CHAIRPERSON LLOYD:  Supervisor White.

 2             FROM THE AUDIENCE:  He had to leave.

 3             MS. WALSH:  Kati Buehler.

 4             CHAIRPERSON LLOYD:  Is the witness list coming

 5   along?

 6             MS. BUEHLER:  Good afternoon, Chairman Lloyd and

 7   members of the board.  My name is the Kati Buehler,

 8   representing the California Rice Commission.

 9             We appreciate the opportunity to testify to you

10   today.

11             The California Rice Commission is a statutory

12   organization representing approximately 2500 California rice

13   growers.

14             Earlier today we submitted 25 copies of a letter

15   to the chairman, and I would like to just briefly summarize

16   the points presented within that letter for you today.

17             The commission has appreciated the willingness of

18   your staff to work with us in the development of this report

19   and to have our input and concerns reflected.

20             In particular we would like to thank the hard work

21   of Ms. Theresa Najita, who did most of the heavy lifting to

22   coordinate with commission staff on this project.

23   Ms. Najita has made herself accessible to commission staff

24   and has worked hard to incorporate our comments.

25             The report reflects a few broad themes that have


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 1   become apparent through the progress of the phase-down.

 2             First, growers have worked in good faith to adjust

 3   their farming practices to replace their historical levels

 4   of burning with other management practices.

 5             Second, as a result of those activities, regional

 6   air quality has generally improved.

 7             Third, recent levels of burning coordinated within

 8   the framework of a smart smoke management program can be

 9   accommodated while resulting in few exceedences of the

10   particulate matter standards.

11             And finally, significant alternative uses for rice

12   straw have not yet been developed.

13             This lack of uses for rice straw continues to be

14   an economic burden to growers.

15             As the report indicates, the industry is now

16   spending more than $15 million annually for the management

17   of its rice straw.

18             About one million tons of straw is generated each

19   year.  And we remain hopeful that a demand for this straw

20   will help offset our significant disposal costs.

21             The commission requests that your board, the

22   Department of Food and Agriculture, and other state agencies

23   provide strong support for any measures that will help

24   incentivize and stimulate increased demand for rice

25   straw-based products.


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 1             We hope that your understanding of this dilemma

 2   will enable you to support our goals to increase rice straw

 3   utilization and help make this issue a priority here in

 4   Sacramento.

 5             Again, thank you for the opportunity to address

 6   the board today, and the commission looks forward to

 7   continued work with your staff to address future challenges.

 8             CHAIRPERSON LLOYD:  Thank you very much indeed.

 9   And again look forward to working with you on this expo.

10   Seems like a good idea.

11             MS. BUEHLER:  Thank you.  We are looking forward

12   to working with you on that expo.  I think that will provide

13   a great opportunity to showcase some of these new

14   technologies.

15             CHAIRPERSON LLOYD:  Thank you very much.

16             Next we have Mr. Joe Carrancho, then Jerry Maltby,

17   Kurt Rasmussen and Jeremy Murdock.

18             MR. CARRANCHO:  Chairman Lloyd, members of the

19   board.

20             First off, I'd have to apologize for most of my

21   colleagues who were supposed to testify, walked off, and I

22   came in here with nothing in hand, and I was voted to talk.

23             CHAIRPERSON LLOYD:  We can attest from previously

24   we feel you can hold your end up very well.

25             MR. CARRANCHO:  I've been before you many times as


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 1   a private citizen, as a member of Family Water Alliance, as

 2   a member of the Farm Bureau, which I speak for the rice in

 3   Colusa County.  I was past president of Rice Producers of

 4   California.  I addressed you then.

 5             I am with the -- also with the commission.  I'm on

 6   the executive board.  I've been here a couple times backing

 7   them.

 8             Today I'm wearing a different hat.

 9             Today I'm with California Straw Supply Co-op.

10   This is a group of farmers who have gotten together.  We

11   closed our membership at 130, and we have people waiting to

12   get in and we will probably open our membership.

13             One of the main problems we have is due to the

14   burn program and most recently our lack of price on rice, we

15   don't have any money.

16             We need an infrastructure.  We have no way of

17   doing it.

18             And we are trying to pursue grants, anything we

19   can get to get this thing going.

20             Our main goal is to reduce the cost of the

21   producer to get rid of his rice straw.

22             We are also collecting emissions credits that we

23   will be releasing for whoever needs them for pollution

24   credits.

25             I've watched all of these reports from the


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 1   Legislature come down over the years.  And I will give you

 2   the credit, that this is one of the only ones I've seen

 3   that's been a little fair, in my opinion.

 4             There is thousands and thousands, or least

 5   hundreds, of studies made, and if you look down at the

 6   bottom of the report they always reference a study.  You can

 7   reference any study you want.  You can get studies to say

 8   anything you want them to say.  It's always slanted, in my

 9   opinion, against the farmer.

10             The farmer has done everything he can.  He's

11   been -- what he's been asked to do he's exceeded in every

12   way, shape and form.

13             I think that's demonstrated by the number of

14   complaints you've had.  We fought for and got 318, a pause.

15             Look at your complaints.

16             The ARB chose to not use just Sacramento as their

17   complaint.  They went and also started counting ones in the

18   county.  Before they used to just count Sacramento.  Now

19   they put them all together, because Sacramento didn't have

20   any complaints.

21             A lot of this was done because with 318, even with

22   our 38 percent level, we were able to move burn from east to

23   west, taking it away from Sacramento.

24             Now that we're down to safe harbor that is not

25   possible.


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 1             There are many of my fellow farmers who have never

 2   had to incorporate.  They have buying burn.  This is going

 3   to hit home.

 4             This report, as you've just heard testified, 40

 5   percent by 2005.  I would love that to be true.  God, I

 6   would like that to be true.

 7             But I think you're looking at pie in the sky.

 8             If we were to go back to where this started six,

 9   seven years ago, we would have been looking for rice straw

10   from other states, according to what everybody said they

11   were going to use.  Yet we're using less than one and a half

12   percent of the rice straw.

13             Everything that's been tried has used maybe a

14   little bit of rice straw.

15             One gentleman here that probably alone uses more

16   rice straw than everybody.  He's going to be up here

17   testifying.

18             Some of the ones that would have made it, have

19   they got a grant, but they do not know how to write grants.

20   Didn't get it.  And they're still hanging on.  Without those

21   grants, the money is just wasted.

22             I want you to know, if you don't know already,

23   farmers are not people who want to burn.  We burn out of

24   necessity.  None of us want to pollute.  We breathe the air

25   too.


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 1             Lord knows, when I come to Sacramento I damn near

 2   choke in this smudge you got down here.

 3             I have to go back to the rice country to breathe

 4   clean air.

 5             Speaking of that, you heard testimony today here

 6   how good it is to plant trees.  Cleans the air.  That

 7   doesn't only apply to trees.  That applies to any green

 8   crop.

 9             Take the rice out of the Sacramento Valley and

10   ship our water south and see what kind of pollution you're

11   going to have here.  We will be sweltering in it.

12             Rice cleans your air all but 30 days out of the

13   year.

14             I'm not going to go into detail on each one of

15   these little items that are in this report, because there's

16   other people here that have done it and can do a lot better

17   job than I can.

18             But over the last few years you should know

19   farmers are being regulated out of business, mostly due to

20   the burning of the rice farmer.

21             We have tried everything.

22             What we really need is relief so that it is tied

23   to the use of rice straw.  Something that phases down as the

24   rice straw uses become available.  Promises of rice straw

25   that's going to be used aren't going to get it.


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 1             I'm going to refer to one of the last pages here

 2   in your report, and I will just read it.

 3             Staff have estimates that economic effects for

 4   potential yield loss of ten percent.  The potential revenue

 5   reduction was estimated at about 19 million valley wide with

 6   Colusa County suffering the greatest loss at almost five

 7   million.

 8             I am from Colusa County.

 9             $19 million per year in the name of clean air, and

10   we are less than two percent of the problem.

11             I know government talks about millions and

12   billions like I talk about a dollar and a half, but believe

13   me, folks, $19 million to the rice community is a lot of

14   money.

15             I appreciate the opportunity to speak to you.

16             And if there's any way the ARB can see ways of

17   using rice straw or helping fund rice straw benefits, we're

18   all for it.

19             However, we do need a pause.  We need our pause to

20   continue that we had with the 38 percent until some of those

21   uses can be found.

22             Don't just regulate us out of business.  We're

23   almost there now.

24             And we would find a use for it, but when you lead

25   us down so bad that we don't have any extra money to find


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 1   alternative uses or to fund alternative uses, there isn't

 2   much hope.

 3             Thank you very much.

 4             CHAIRPERSON LLOYD:  Thank you very much.

 5             Yes, Ms. D'Adamo.

 6             BOARD MEMBER D'ADAMO:  In general I don't know if

 7   it's possible to generalize, but for the rice farmers that

 8   for whatever reason choose not to plant for economic

 9   reasons, whether it's because of rice straw burning or other

10   economic factors, what happens to the field?  They go into

11   other crops, is it fallow?

12             MR. CARRANCHO:  Very good example of that is just

13   came up.  They offered us in my area $165 an acre if we

14   would let our water go south.

15             They were only offering that after most of us were

16   planted or most of us would have probably been interested.

17   There was a no brainer.  I mean, it's much better to just

18   not plant.  And a lot of us did it.

19             I didn't particularly do it.  I have a hard time

20   with it.  I almost feel like I'm selling my daughter into

21   prostitution doing that.  I mean, it's just not the thing.

22   We should be planting and we have to support our third-party

23   impacts in our counties.  Our counties would go down.

24             BOARD MEMBER D'ADAMO:  In order to participate in

25   that you have to fallow your field?


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 1             MR. CARRANCHO:  You fallow your field until

 2   October 1.  No water.

 3             Now I've heard about a couple of irrigation

 4   districts who are worried about giving us water for de-comp.

 5   Not in my area.  So far we're fortunate.

 6             But I feel that's probably going to be one of the

 7   first things they're going to cut off.  If we lose our water

 8   to de-comp, then we have nothing.

 9             CHAIRPERSON LLOYD:  Your comment earlier about

10   grants and, you know, not being able to -- not knowing the

11   grantsmanship, I guess, is there anything that we could do

12   to help that?  I have some sympathy there, how do you apply

13   for them or whatnot and writing grants.

14             MR. CARRANCHO:  I've tried for a few of them.

15   And, you know, unless you -- everything is dotted and t'd

16   and in the right order and if one of the main things is you

17   have to have money.  If you don't have money to match it,

18   and it's awful hard to get started without money.

19             And farmers are to the point where if you go out

20   and you get a $100 donation from a farmer, you're doing

21   good.

22             You know, ten years ago you go out and you ask

23   them for a thousand dollars, and it was there.

24             Today, I mean, we're all hurting.  We're trying to

25   keep our nose above water and that's it.


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 1             CHAIRPERSON LLOYD:  The question is to staff, when

 2   you talk about uses, you say that 20,000 tons unchanged for

 3   the last three years and yet by the next five years you

 4   expect that to go by a factor of 20.  It seems really

 5   optimistic estimate.

 6             MR. FLETCHER:  Bob Fletcher.

 7             I think it is optimistic, but we're not certain.

 8   And in discussions that we've had, many of the end users and

 9   many of the people that are under grants right now, we do

10   think that this is, if everything fell into line, if we were

11   able to deal with the export situation and resolve issues

12   associated with, you know, exporting the rice to Japan, then

13   we could open up 150,000 ton a year market.

14             Similarly, some of the construction materials that

15   we've been looking at, there are huge markets around the

16   world, and if some of the people that are producing some of

17   this fiberboard and construction material can develop these

18   markets where they're building essentially prefabricated

19   homes and then they ship these homes in essentially a way

20   that can be sent overseas where they really need housing,

21   they can do it relatively inexpensively, the construction is

22   simple, if that were to happen, you're looking at another

23   150,000 ton a market.

24             But there's no question things have to align

25   properly for that to happen.  So it is not out of the realm


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 1   of possibility that these markets could open up.

 2             CHAIRPERSON LLOYD:  Again, that puts a lot of

 3   hope, and I think I agree in terms of this export, that

 4   would be very helpful in stimulating the market and getting

 5   the advertising out.  I think it's an excellent idea.

 6             MR. CARRANCHO:  Chairman Lloyd, in that light, we

 7   all know how many forest fires we have.  I have been trying

 8   desperately with the Forest Services and Caltrans and what

 9   have you, we have found a way that we can chop our rice

10   straw, bale it so it could be put in for erosion control and

11   actually add the seeds that they need to replant the area.

12             We figure they can drop it from a helicopter.

13             Now, this is one area that we could use multitude

14   of ton, but there is no help.

15             If the state would somehow mandate rice straw is

16   an aquatic plant, you will get no star thistle, you will get

17   no plants that you won't need up there.  It's high altitude.

18   These weeds that we have in rice will not grow there.

19             It would be the perfect erosion control.  It would

20   be the cheapest way to get it into those canyons and so on

21   that they're inaccessible to take it to now.

22             But, there's no incentive.  They have been selling

23   wheat straw and other things for years, and it's hard to

24   make them change.  It's just like taking a woman that's

25   going to the grocery shore and she's been buying Del Monte,


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 1   she's going to buy Del Monte until she can get it real cheap

 2   or something.

 3             It's hard to change the trend.  Even though we

 4   know we have a better product.

 5             MR. FLETCHER:  I think we would agree with

 6   Mr. Carrancho on that, and one of the recommendations that

 7   we have to the Legislature is really to encourage state

 8   agencies to do that.

 9             We wouldn't have the authority, obviously, to do

10   that, but the Legislature would.

11             And I think the other consideration, you know,

12   what we can do through the Rice Straw Expo is really work on

13   Caltrans and some of these other agencies to get to the expo

14   so that we can show them the products and we can work with

15   them, and I think we intend to do that as well.

16             CHAIRPERSON LLOYD:  Again, I think the director of

17   Caltrans, Jeff Morales, is a good person, maybe we can

18   approach him directly and make him aware of this, at least

19   look for a percentage of use to start off.  I think it's an

20   excellent idea.

21             MR. CARRANCHO:  We are ready to supply it, if we

22   can just get some orders.  All we need to orders.

23             You can get us a way to get rid of this rice

24   straw, we can do wonders.  But we need somewhere to get rid

25   of it.  We can't just pile it up in the corner.


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 1             Thank you very much.

 2             CHAIRPERSON LLOYD:  I guess you could pile it in

 3   the corner if Mr. Rasmussen goes to work as well.

 4             BOARD MEMBER McKINNON:  Mr. Chair.

 5             CHAIRPERSON LLOYD:  Yes.

 6             BOARD MEMBER McKINNON:  I had a question, it's

 7   both you and staff, either one, or the Rice Straw

 8   Commission.

 9             You alluded to trade.  And I've been concerned the

10   last several months from agriculture, we've heard a number

11   of times, and also forest products, where prices have just

12   dropped through the floor.

13             And I'm wondering if we're having difficulty with

14   trade agreements that have set up a price system where

15   people can manage to operate, and then I think you alluded

16   to trade barriers on rice straw.  Is it rice or rice straw?

17             And I'm interested in maybe if that's an area

18   where we should be pushing.

19             MR. FLETCHER:  I think it's not trade barriers is

20   probably the wrong word.  We didn't really realize the

21   connotations associated with that.

22             We think it's a barrier and we think it's

23   associated with the Japanese government putting restrictions

24   on rice straw coming in.  And they have been one of our

25   contracts, one of our grantees is actually working with CDFA


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 1   and the United States Department of Agriculture to try to

 2   get a protocol in place that essentially assures that the

 3   rice straw that's being sent over is free of pests,

 4   basically.

 5             So the question for us becomes can we get that

 6   protocol in.

 7             Now, the difficulty with getting that protocol,

 8   there may be other political reasons that are impacting the

 9   ability to do that, but we're looking at a niche market in

10   Japan that's sort of a specialized market, and that's the

11   market we're trying to tap.

12             So I'm not sure that it falls under the

13   traditional trade barrier concept.  It's more just a

14   barrier.

15             BOARD MEMBER McKINNON:  And then it's the price

16   piece of this also a fair -- that prices have been driven

17   down to the point that --

18             MR. CARRANCHO:  In Japan I know I've heard that

19   rice straw sells for as high as $280 a ton.  But we can't

20   get it into them.  There's been some gone into Japan by way

21   of Taiwan.

22             BOARD MEMBER McKINNON:  What about the price of

23   rice?  Has it been driven down given the trade situation?

24             MR. CARRANCHO:  Well, we have to look up to find

25   the bottom.


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 1             BOARD MEMBER McKINNON:  Yeah.  That's what I

 2   thought.

 3             Thank you very much.

 4             CHAIRPERSON LLOYD:  Thank you very much.

 5             Mr. Jerry Maltby, Chris Churchill, Kurt Rasmussen,

 6   and Jeremy Murdock.

 7             MR. MALTBY:  Thank you, Chairman, board members,

 8   for allowing me to speak today.  My name is Jerry Maltby,

 9   the owner of the Broken Box Ranch, which received your grant

10   last year.

11             I thought it behoove me to come up and give you a

12   little report on how we're doing and to answer some

13   questions.

14             I would like to make some comments on a couple of

15   questions that you asked to Joe.

16             And kind of give you my perspective of where I

17   think things need to go as far as the industry and as far as

18   the grant process and basically the money flow.

19             Broken Box has gone ahead with its project.  We

20   might be -- we're couple of months behind schedule only due

21   to some machinery problems that we had with the bagger that

22   we were actually putting the compost, which was composed of

23   50 percent rice straw and 50 percent cattle manure, and

24   basically the machine didn't work.  But we've got another

25   one coming and we innovated our own little crib system,


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 1   which actually has worked just as well, and actually better

 2   than some of the bag deal at a lesser cost.

 3             So sometimes out of adversity comes a shining

 4   light.

 5             We have produced and sold compost this year

 6   already.  We have some now that we are trying to get into

 7   the nursery field, as well as several other horticulture

 8   avenues that we're looking into.

 9             And it's been fairly well accepted.  Right now we

10   just got back our E. coli and salmonella tests, which were

11   nontraceable elements, and in today's day and age of parts

12   per billion, that pretty well says it all.

13             And so we have been approved by the CCOF as an

14   organic product.

15             The process, basically, to refresh your memory

16   puts the compost in a container and/or vessel of some sort

17   and forces air through it, therefore bringing the heat up

18   and keeping it there for a length of time to dissipate any

19   pathogens, as well as turn the product into a hundred

20   percent nitrogen compound that can be put on without any

21   nitrate runoff.  That's especially important in water

22   quality.

23             And we feel as though the process we're using also

24   keeps down the methane production and keeps it within the

25   vessel and actually works to our benefit.


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 1             So we have done some trials with Chico State that

 2   are working out very well.

 3             We're on the road to doing some trials with some

 4   strawberry plants, and hoping that the initial study that we

 5   did, which when I came before you before we knew nothing

 6   about, but sometimes you stumble on something.  You know,

 7   even a blind hog finds an acorn once in a while.

 8             We feel as though we might have something that

 9   could be quite important in the methyl bromide problem in

10   the fact that there is a fungus that comes out of this

11   compost that is mainly because of the rice straw that is

12   getting rid of one of the main funguses that hurts the

13   strawberry production.

14             So by probably September we will have the final

15   results back from that on the trials.  The plants are in

16   their final stages now, and Chico State will have a report

17   that I will certainly pass on to Bruce Oulrey, and I know

18   that he's aware of it.  We've tried to keep him as involved

19   as my contact in letting you know what's going on.

20             The compost situation has worked out very well.

21             The feeding of the rice straw has worked out very

22   well.  We've sold several thousand tons already this year

23   within the last 12 months for feed.  In fact my stacks are

24   pretty well completed.  I've had to cut off my -- the last

25   two sales simply because I needed enough to get me until the


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 1   September harvest for the feedlot that we built.

 2             And we are feeding a ration right now that

 3   consists of about 40 percent rice straw.  Working very well,

 4   as we knew it would, simply because we have fed rice straw

 5   before.

 6             However, when putting other cannery wastes in the

 7   pod system and holding them throughout the year and then

 8   mixing them with rice straw, it has a very advantageous

 9   effect on the rice straw in helping it to make it more

10   digestible.

11             We have recently been working -- I'm not going to

12   steal this man's thunder who is coming up behind me, but we

13   really hopefully have found a product called EM that we have

14   in our water, are injecting it into the water that it lowers

15   the methane production in the rumen of an animal, which is

16   good for the environment.

17             It also starts the decomposition of the silica and

18   lignin within the plant before it actually gets out to the

19   back end of the animal and into our manure piles.

20             So there are some things that have happened here

21   that give us some encouragement.

22             We've also developed an injector to inject

23   molasses and a liquid feed supplement within the bale and

24   then sell the bale that way.  That way we can put the

25   product that was of marginal quality as by itself and make


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 1   it quite acceptable and quite close to alfalfa in actual

 2   feed production.

 3             Now this is going to be quite interesting this

 4   year, and I think that the board and the State of California

 5   has a real opportunity with the travesty that's going in the

 6   Klamath Basin, the Tule Lake Basin on the actual stealing of

 7   the water, and I'll use that term very very proudly, in the

 8   sense that that's exactly what they have done.

 9             And what they have also done is they have put a

10   tremendous amount of alfalfa and oat acreage of production.

11   That is going to drive hay prices up to anywhere from 125 to

12   $175 a ton by this fall.

13             And it has added even additional expenses to the

14   ranching community.

15             But even worse than that, the livestock industry

16   in the Tule Lake basin and the Lower Klamath Basin is going

17   to be without its winter forage stock.

18             Now, you know, it's horrible to live off of

19   somebody else's adversity, but in this case it is a possible

20   avenue to get some of the ranchers to try it.

21             I've shifted over to 12, 15 hundred tons into what

22   I call the high country, high country is anything above 3500

23   foot elevation, and that's where they do feed a lot of

24   forage in the wintertime.

25             Rice straw will not, and I repeat, will not, carry


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 1   an animal at the high elevation through during the winter by

 2   itself, but it will add bulk and it does add some nutrients

 3   than when supplemented can.

 4             And I've had people up there for the last two

 5   years and have already contracted with me for the third year

 6   to ship rice straw up.  They mix it with their native hays,

 7   their alfalfa hays, and the liquid feed and they make it

 8   work.

 9             We're getting more reception to this.

10             The $15 credit I would think, I think, and I don't

11   have any way of knowing, but just by the numbers that you

12   put in here in your report, I would say two-thirds of that

13   came from straw that I sold, because we send out that form,

14   every time we sell a bale of straw, we send out that form.

15   We send them to the timber, the lumber companies of which we

16   sold 1100 tons last year for erosion control.  We send it to

17   them.  We send it to anybody who uses it on the highway

18   construction.  The construction companies we send it to

19   them.

20             We just took your form, copied it and when we send

21   them the bill, said here it is, apply for it.

22             They haven't used it all from last year, you need

23   to, if we want -- if you want to continue this thing, you're

24   going to have to get it used, so please apply for this

25   credit.


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 1             I as a grower, Joe as a grower, cannot apply for

 2   that credit, because we are the person who raises it and

 3   even I as an end user if I raise my own thousand acres of

 4   rice and use my own rice straw, I can't get that credit.

 5             So I think there's a little something in there

 6   that needs to be tweaked.  It shouldn't matter who the end

 7   users is, whether it be a farmer or a timber man or a cattle

 8   man, whoever uses it should be able to get it.  The $20 a

 9   ton that came out of Helen Thompson's bill, of which the

10   regulations, knock on wood, will be done by the first of

11   this month, I think is one of the key points of getting the

12   domestic usage of the straw up.

13             I think it's key and it's cheap key, a very very

14   cheap key.

15             I know a lot -- I can probably -- I don't want to

16   say something I can't live up to, but I think I can probably

17   sell to 5 to 10 thousand tons of straw myself this year if I

18   can tell those guys that I can get them $20 back.  Because I

19   can charge them a lesser -- I can make a little and they can

20   apply for the straw, for the $20 rebate.  You know, the

21   Governor in the infinite wisdom cut it from ten million to

22   two.

23             It really didn't make any difference, because the

24   agency didn't get the rates out in time and still haven't

25   got them out.


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 1             So hopefully they'll be able to have that out by

 2   the first of the July.

 3             I know two million to my operation alone that's

 4   $50,000.

 5             Now on my budget, my banker likes that real well,

 6   but he happened to bring that up, as I reapplied for my

 7   operating loan this year and he says I don't see any income

 8   off that.  I said all I can tell you it's coming.  And I

 9   used the fact, and being an ex-county supervisor, I think I

10   have the right to do this, I said, you know how counties,

11   how the government works, a little slow sometimes.

12             And I said so just, you know, the law is there,

13   and unless they cut the funds out, you know, it's going to

14   be a good thing, and I think it needs to go back up to that

15   $10 million.  I think especially this year.  I think there's

16   a tremendous potential of usage of that.

17             CHAIRPERSON LLOYD:  Let me understand your point

18   there.  Are you saying you haven't received money from whom?

19             MR. MALTBY:  We haven't received it from the

20   Department of Agriculture under the grant program for the, I

21   can't remember, the AB 2586, I think it was, which stated

22   that there would be a rebate back on the usage of rice

23   straw.

24             And in the cattle industry, both dairy and beef, I

25   can make a review, because I've been approached by a couple


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 1   of dairymen now that they've seen the way that I chop the

 2   straw, they say can I use that for bedding.  I said, well,

 3   can I use that for bedding and get my $20.  And I said if

 4   the regs ever come out and say you can, yes, you can, but

 5   technically that wouldn't be the case.

 6             CHAIRPERSON LLOYD:  How long have you been waiting

 7   for this money?

 8             MR.  MALTBY:  Nine, ten, 11 months.  It was passed

 9   in September, wasn't it?  August, September.  So.

10             CHAIRPERSON LLOYD:  Maybe Catherine can help out.

11             You tried to ignore me.

12             MR. MALTBY:  And not to be totally critical, the

13   person who is writing this has been under the gun to do

14   quite a few other things.

15             CHAIRPERSON LLOYD:  I understand.

16             MR. MALTBY:  Agriculture was shoved at him and

17   said, here, you do this and those ten things over here.

18             CHAIRPERSON LLOYD:  Dan Webb was going to be

19   coming over, I think, but he was unfortunately not able to

20   come.  I'm not trying to pick on him.

21             MR. MALTBY:  I'll cut them a little slack for a

22   few more days here, then see what happens.

23             CHAIRPERSON LLOYD:  Do you have much -- I'm

24   getting concerned about the time, Jerry.  I know we have a

25   few more witnesses here.


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 1             MR. MALTBY:  Sure.  I'll try to elaborate just a

 2   little bit.

 3             I spent quite a bit of time in China, five

 4   different trips, over there putting a cattle project

 5   together.  I spent a lot of time in the rural areas.  I know

 6   how rice straw they use and what they use it for.  They use

 7   it for most of the cardboard boxes that you get that come

 8   from China are all made out of rice straw.  All their paper

 9   is made out of rice straw.  There's a very good chance that

10   if the funding were available, most of the paper in

11   California a lot of the newspaper would be made of that rice

12   straw.  I think there's some real things you can do there.

13             And I would just like to say that I think the feed

14   is not the total answer, by any means, but it is something

15   that can be done immediately.

16             The erosion control and Joe has already covered

17   that, but the newspaper thing is big tonnage, is big

18   tonnage.  The feed export could be half a million and

19   million tons a year.

20             Korea was blocked from coming into China because

21   they carried hoof and mouth disease in the rice straw.  That

22   was four million tons.  Four million tons.

23             It is a trade barrier.  He's trying to be nice.

24   I'm not going to be nice.  It is a trade barrier.  I fought

25   it all my life with the cattle industry.  I fought it with


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 1   the rice industry going in.  We've had the stuff sitting on

 2   the docks and to have them say, no, we won't accept this,

 3   but if of course if you lower your price down to a hundred

 4   dollars a ton, sure, just bring it on in, then they'll grind

 5   it, but they don't want to do it.

 6             So it is a trade barrier and they're doing the

 7   same thing with the rice straw.

 8             But again if you have any questions about my

 9   project or other things, I would just like to say I hope

10   that you raise the grant up, and I hope that you do

11   something into the phases of the domestic marketing and

12   allow your grant to take that in, so we can give some of the

13   stuff away.  If I can give a thousand tons of my compost

14   away, and get some sort of compensation just to cover the

15   costs on the first deal, just my cost, all I'm asking for,

16   but me or anybody else, we can get the people to use it and

17   then we will hook them, because this compost is better than

18   commercial fertilizer.  I'm a commercial fertilizer person.

19   I farm a thousand acres of rice and 90 percent of it is that

20   way.

21             CHAIRPERSON LLOYD:  Maybe we can have some free

22   samples at the expo.

23             MR. MALTBY:  Absolutely.  Not a problem.

24             BOARD MEMBER RIORDAN:  Mr. Chairman, if I can just

25   ask about that compost, is it something that could be


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 1   applied to just regular landscaping?  And what I'm thinking

 2   is it's always been my opinion that Caltrans really ought to

 3   use more compost where they landscape, but my question is

 4   maybe it couldn't be used on every type of plant.

 5             MR. MALTBY:  Yes, it can.  In fact we have

 6   qualified for which is a quite extensive list, you just

 7   don't call Caltrans up and ask them do you have this.  You

 8   have to do all this testing, which we have done, and we have

 9   passed, and it's getting Caltrans to use it.  Because they

10   have said, well, we have to cut back on our budget and we

11   don't put as much of that on there as we used to.

12             But yes, the answer to your question is yes.

13             BOARD MEMBER RIORDAN:  Because that's a great use.

14   That's just one of many agencies that ought to be using it.

15             MR. MALTBY:  We've used it for the commercial as

16   well as the landscaping.

17             BOARD MEMBER RIORDAN:  Thank you.

18             CHAIRPERSON LLOYD:  Thank you very much.

19             Chris Churchill, Kurt Rasmussen, Jeremy Murdock.

20             MR. CHURCHILL:  Good afternoon, members of the

21   board.  My name is Chris Churchill and I'm president of

22   Fiber Tech USA.

23             We were one of your grant recipients in 1998.

24             In 1998 the board approved a grant for $750,000

25   for Fiber Tech to build a rice straw particle board plant in


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 1   Colusa that would use between 20 and 40,000 tons of rice

 2   straw a year.

 3             With that money and other private investment, we

 4   have been able to build a plant that we project will use

 5   between 40,000 and 80,000 tons a year depending on which

 6   products we produce.

 7             Unfortunately, as with an establishment of any new

 8   technology and introduction of a new product in the market,

 9   it takes a little longer than you might anticipate.

10             In our case, it took us a little longer to build

11   the plant than we originally anticipated, and then the

12   start-up of the facility took longer than we originally

13   anticipated.

14             One of the major reasons was we're one of the

15   first large-scale industrial users of rice straw, and so

16   when there was a problem, there's no one really to call to

17   say how do you have solve this problem, because nobody had

18   had that experience.

19             So solving the problems was a series of trial and

20   error, and unfortunately trial error is not the fastest way

21   of solving problems and that extended the start-up.

22             However, now we do have the plant operating

23   successfully.  We are now in production.  We are filling

24   orders for customers.  The product we're producing meets all

25   the market requirements.  It's been tested by recognized


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 1   third-party agencies.

 2             We're ramping up our production.  We're not in

 3   full production right now.  We're producing a couple of days

 4   a week, but we will be ramping up over time and we'll be

 5   producing 24 hours a day and seven days a week.  It's at

 6   that point we'll still be using significant amounts of

 7   straw.  You know, we are still -- we're still in business

 8   and people are taking our products.  Hopefully the long road

 9   of starting the plant and getting it up to full production

10   is nearly over.

11             We appreciate the faith that the board put into us

12   for granting us the money.  The money significantly helped

13   us not only in paying our bills, but also in gaining some

14   credibility and raising additional funds.

15             So just wanted to say thank you.

16             CHAIRPERSON LLOYD:  Congratulations.

17             MR. CHURCHILL:  Thank you.

18             CHAIRPERSON LLOYD:  Kurt Rasmussen and Jeremy

19   Murdock.

20             MR. RASMUSSEN:  Dr. Lloyd, thank you for letting

21   me come up here and talk to you.  It's been a little over a

22   year ago that I told you I think we could solve all the rice

23   straw problems.  And I don't know if we can solve them all,

24   but we can give you a long way in the right direction.

25             And I would like to pass you out a couple of


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 1   things that we have done with rice straw.  Here is two

 2   different items, if you want to pass one from each bag.

 3             So what we've been doing is, and I thank you,

 4   Jerry, for your comments.  We've been working with Jerry

 5   Maltby and we've been working with Chico University and we

 6   believe that we can enhance rice straw in the field or off

 7   the fields, so that it will become worth using it again, you

 8   can either use it as a fertilizer and you can use it for

 9   composting.

10             CHAIRPERSON LLOYD:  You can use this for

11   fertilizer or composting?

12             MR. RASMUSSEN:  Yes.  It can used for bedding.  It

13   can also be used for cattle feed.

14             CHAIRPERSON LLOYD:  Bedding?

15             MR. RASMUSSEN:  For bedding.  The dry stuff.

16   There's two bags there.  One is wet and one is dry.

17             The wet one would be one you could use for cattle

18   feed or you can plow it in as a fertilizer.  It can be used

19   either way.

20             The dry one would be very good for bedding for

21   dairy farmers and if you -- so in other words what the thing

22   is that we can check the rice grower and he can solve all

23   the environmental problem for the dairy farmer and here's

24   basically how you would do it.  You would take the rice

25   straw there and give it to his dairy cows at about ten


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 1   percent, and then you would take the other rice straw and

 2   put down as bedding.  You will now be able to eliminate most

 3   of his methane gas out of the rear end of the cow and when

 4   the cow manure drops down in the other kind of bedding, you

 5   will take care of the ammonia, most of the ammonia problem.

 6   So now it makes something like this and then if you will

 7   scoop it off and put it into an air bag and compost it, you

 8   get a better compost than you can buy at Home Depot.

 9             CHAIRPERSON LLOYD:  Did Mr. Maltby verify that

10   there is less methane?  Did you verify that there was less

11   methane from the cow?

12             MR. MALTBY:  I have no way to prove that.

13             MR. RASMUSSEN:  We have no proof of that or how

14   much it is, we just know that it reduces and make the cow

15   healthier.  This is one thing we do know.

16             CHAIRPERSON LLOYD:  How do you know?

17             MR. RASMUSSEN:  There's other research we've done

18   around the world, and many other places, and I don't have

19   all the answers right here, but EM is used in about a

20   hundred countries.  It's not a new thing.  It's a new thing

21   in the United States, but it's around the world in about a

22   hundred countries and it's an national farm policy in about

23   six or seven countries where they use it as a policy.

24             So if you took this and put it into the dairy

25   farms, now you can reduce his emission and odors to the --


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 1   up to there -- up to -- you won't have all this and all

 2   these things coming down so you can help reduce the air

 3   pollution, and make a healthier cow and get rid of the rice

 4   straw and the same time he won't need all of his ponds and

 5   so forth, he won't need it as much, because the straw will

 6   absorb the liquids.

 7             If you read it in the report there you will see

 8   that we can enhance the rice straw by using the EM

 9   implementation, we enhance the nutrition value of it and it

10   will enhance the value and there's more studies being done.

11             But again we need to apply for some funding if we

12   can get some for -- we need more help in funding for data.

13             So, Jeremy, you want to come up?

14             I brought my expert along here, who has been

15   running the program more than I have.  Ask him all the

16   questions.

17             CHAIRPERSON LLOYD:  Okay.

18             MR. MURDOCK:  Thank you for this opportunity to

19   speak.

20             I'm the president of EM Living Soil Systems.  And

21   we've started to work on some of these alternatives to rice

22   straw burning.

23             We feel like the EM culture can be applied to help

24   some of the incorporation problems, and help develop some of

25   the commercial off-field usages of rice straw.


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 1             Basically because of the unique aspects of EM

 2   culture having both anaerobic bacteria and aerobic bacteria,

 3   we can apply it in incorporation methods in both non-flooded

 4   and flooded fields, so some of the problems associated with

 5   non-flooded fields incorporating rice straw is heavy

 6   mechanical or high mechanical energy needed because of the

 7   high fiber content to work it in.

 8             And through preliminary research we have already

 9   found that EM is highly effective at breaking down a lot of

10   the lignin rich fiber that creates that barrier for

11   decomposition.

12             So we feel like there's a lot of possibilities

13   with spraying EM into non-flooded fields and then greatly

14   reducing the mechanical soil straw preparations, which would

15   then decrease energy inputs, and as well as particulate

16   matter emissions.

17             And then with flooded -- the problems associated

18   with flooding, well, they found that flooding is a more

19   effective way to incorporate rice straw, but there is all

20   sorts of putrefactive anaerobic volatile gases coming off

21   the top, large amounts of methane especially.

22             And because there's so many anaerobic bacteria if

23   we spray the rice straw prior to flooding and colonize it

24   with anaerobic bacteria we'll eliminate those gaseous

25   emissions greatly during the winter flooding period.


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 1             We're also working on developing alternative

 2   commercial industry for rice straw.  People have been

 3   talking about RNE.  One of them that has not grown in

 4   popularity or grown in tonnage used is bedding, and we feel

 5   like that bedding has a lot of potential, especially in

 6   poultry industries, because it eliminates the ammonia.

 7             And you are talking about proof of that.  We do

 8   have data now that proves through fermentation we're able to

 9   reduce ammonia levels in ammonia levels 77 percent, and

10   that's from preliminary data.  We're still getting more

11   data.  That's the first point of data collection.

12             And there's many points there after that we're

13   waiting for to come up with the full data analysis.

14             But, we feel like from international research,

15   methane reduction will be parallel to ammonia reduction.

16   I've not been able to find methane research done in America

17   and we hope to do some soon.

18             The other industry is cattle feed.  We're hoping

19   to really expand that and make it a highly affordable price.

20             And we're doing research in the straw burning

21   industry.

22             The material that you have, that straw, it's

23   called bokashi.  And it might become very popular in the

24   next five years, hopefully.

25             But that you alluded to the fact of using it as a


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 1   compost, and the system of agriculture that I've done in the

 2   last two years, called nature farming, uses that as a

 3   compost replacement.  It's a much more efficient method as

 4   far as energy inputs, the mechanical inputs and time inputs,

 5   when compared to making compost, and the results are equal

 6   or greater than using compost.

 7             CHAIRPERSON LLOYD:  But the dry sample that we got

 8   that's not treated with your material?

 9             MR. MURDOCK:  It is.  It's stabilized by drying.

10   It's just the wet and dry.  It's two different products.  In

11   fact you can't use bedding wet.  You know, you need to apply

12   the bedding dry, but yet if you were to --

13             CHAIRPERSON LLOYD:  For example, but like when you

14   use that as a -- in the landscaping as a compost as a mulch?

15             MR. MURDOCK:  You could.  You can use it wet or

16   dry as a mulch, because it gets rained on, dries out, so you

17   can use that wet or dry.  For shipping costs it might be

18   more useful to dry it.

19             You want to, let's say, you're tilling in a cover

20   crop, you would want to apply the bokashi wet into the cover

21   crop and then just --

22             CHAIRPERSON LLOYD:  How do you spell that?

23             MR. MURDOCK:  B-o-k-a-s-h-i.  Bokashi.  And in

24   Japanese it simply means fermented organic matter.

25             And you can make bokashi out of anything.


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 1             The company I founded last year essentially takes

 2   byproducts, takes agricultural wastes and we remediate it

 3   with EM.  We'll remediate anything.  We've done projects

 4   where we remediate a brewery with this and turn it into

 5   cattle feed.

 6             So we remediate waste material that people have to

 7   spend money in hauling off, and we turn it into a

 8   value-added product that they can use on a farm or sell as a

 9   commodity.

10             So we're working with these different -- trying to

11   develop these different alternative usages, off-field usages

12   for bokashi, and basically EM is highly effective at

13   breaking down the surface tension of rice straw, and that's

14   kind of the barrier to incorporation into using it as feed.

15   It's not palatable, it's not soft, it's not easy to

16   incorporate.

17             And just to sum it up, EM is highly effective at

18   breaking down, as you can tell, if you just feel the

19   material, it doesn't feel anything like rice straw

20   untreated.  And if you look at it, the fibers are kind of

21   being pulled apart, and that -- and the data collected is

22   indicative of what one can observe.

23             CHAIRPERSON LLOYD:  Thanks very much.

24             I must say, when I -- Mr. Rasmussen first brought

25   this to our attention, I was a little bit skeptical,


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 1   although hoping that it would pan out, but to hear some

 2   independent verification today that things are working and

 3   seeing this, that's great.

 4             MR. MURDOCK:  It's working out great.  And, you

 5   know, we installed, I was out a few weeks ago installing an

 6   injection system into Jerry's feed lot to inject EM into the

 7   drinking water, and see just vertically integrating EM

 8   allows Jerry to make a higher grade compost easier.

 9             If you insert it earlier into the chain, then the

10   byproducts, the manure created from those cattle will be

11   more conducive into making a higher quality compost.

12             So it's just kind of the chain reaction, and then

13   year after year the populations establish in those

14   environments and EM becomes more and more effective over

15   time, kind of an a logarithmic curve, you know.

16             So whenever you're dealing with something

17   biological on a microbal level, you know, it just takes time

18   to see results.  A lot of times we're used to just putting

19   some highly soluble fertilizer or something just to see

20   results of the plants getting green instantly.  We're seeing

21   results now, and we just have to keep in mind we're dealing

22   with EM, things aren't overnight, but the gains are really

23   large in the long term, especially environmentally, and we

24   just feel like using EM we can just do a lot of things using

25   less energy and creating less volatile gas emissions.


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 1             CHAIRPERSON LLOYD:  Thank you.

 2             Mr. Kenny, we have EM Systems working.

 3             MR. MURDOCK:  Thanks.

 4             CHAIRPERSON LLOYD:  Any questions from the board

 5   or comments?

 6             Ms. D'Adamo.

 7             BOARD MEMBER D'ADAMO:  I had a couple of comments

 8   about the report.

 9             I think that it would be most helpful if in the

10   section regarding environmental assessment of the

11   phase-down, page 21, I think that it should include, my own

12   opinion is that I think it should include the use of water

13   and the impact that that has on our resource base, and I

14   realize that's not utilized in all instances, but as far as

15   the impact, I think it should be included in the discussion.

16             And then in addition earlier, Mr. Carrancho, am I

17   pronouncing your name right, indicated that in some

18   instances where fields are left fallow, well, in many

19   instances, in instances where a farmer, for whatever reason,

20   is not able to continue production, the result may be that

21   the field gets left fallow.

22             What sort of an impact does that have

23   environmentally?

24             And I haven't been out to these areas, I don't

25   know if the result is increased PM from the dust.  I don't


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 1   know.  Just some of the -- something to throw out there.

 2             On the ethanol section, page 15, I just like to

 3   throw it out there that I think it should be more aggressive

 4   and perhaps there should be a discussion of ideas that where

 5   we can -- further along in this report, I realize the

 6   discussion here indicates the difficulties in ethanol

 7   production, but I think we need to have a little bit of a

 8   responsibility in light of the fact that we adopted the RSG.

 9             So I don't know if it would be in this report or

10   just elsewhere where it could be a little more aggressive on

11   this topic.

12             The credit that one of the witnesses raised, that

13   the credit is not available to the producer, could staff

14   speak to that?  Is that something that is a limitation in

15   statute or is it in regulation?

16             MR. FLETCHER:  If you're dealing with the $20

17   credits and the $15 credits, those are accounts that are

18   administered by CDFA, and they are statute in terms of

19   limitations on the ability to provide them to the growers

20   themselves.

21             Now, the emission reduction credits, that was also

22   referred to, is a similar situation in terms of there are

23   credits available.  They can capture them and they are using

24   them.

25             BOARD MEMBER D'ADAMO:  I don't want to take up a


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 1   bunch of time on this today, but maybe if staff could be

 2   directed to pursue this, perhaps a recommendation through

 3   Mr. Ogilvie's office for possible -- there you are.

 4   Clean-up legislation in this area.

 5             And then, lastly, this has just been fascinating

 6   to see the evolution in this area.  I can see great

 7   progress.  I know some of the other board members mentioned

 8   that as well.

 9             I'm just kind of wondering if the witnesses

10   benefit when they come before us periodically to talk about

11   how they've progressed.

12             And it almost seems to me that if they do, if they

13   utilize this as an opportunity to engage in an information

14   exchange, is there something that we can do to further that

15   process along by way of holding workshops or perhaps putting

16   together some sort of a committee or an information exchange

17   of an informal nature, because it seems to me that there's

18   tremendous potential here for additional uses.

19             And as board members, we're fascinated to hear

20   about it, but we're probably not going to be utilizing that

21   information directly.  It just seems that if there were more

22   of you in the room that it would be more useful for you all.

23             So I don't know.  Ms. Terry.

24             MS. TERRY:  Certainly that's our goal with the

25   expo is to really get the word out.  And I think we have


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 1   enough time here, we have planned it during the season where

 2   that the farming community will be available so we will do

 3   our best to have really extensive outreach and bring people

 4   together.

 5             That combined with the changes to the criteria to

 6   allow consideration of projects that involve marketing the

 7   infrastructure, we think it's time to move in that direction

 8   now that we're seeing some success with fundamental concepts

 9   like bedding and particle board and manufacturers, and so

10   on, so we think we can move a little bit more in the

11   marketing stage to bring perhaps Trade and Commerce and some

12   other agencies in more active process.

13             CHAIRPERSON LLOYD:  Good.  Thanks.

14             And your comment on the ethanol, I notice there we

15   did get an e-mail from a Joan Lee, the Gray Panthers,

16   encouraging us to also push on that issue.

17             With that, I guess we -- brings this item to a

18   close.  No need to vote on this, it's not a regulatory item.

19             Thank you very much, staff.

20             And thank you for the presentation from the

21   farmers and the colleagues out there.  Very informative.

22             We'll take a five-minute break before we go into

23   our last item.

24             We're not going to hear the enforcement item

25   today.  We're going to hold that over until the next meeting


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 1   in San Francisco.

 2             So the next item and the last one will be the

 3   smoke management program.

 4             So let's take a five minute break.

 5             (Thereupon a short recess was taken.)

 6             CHAIRPERSON LLOYD:  Last item on the agenda today

 7   is 01-5-4, public meeting to consider the smoke management

 8   guidelines program implementation status.

 9             In March 2000 our board adopted revisions to the

10   agricultural burning guidelines and established the smoke

11   management guidelines for agricultural and prescribed

12   burning.  The revisions enhance the smoke management program

13   by improving data collection and evaluation, augmenting

14   smoke management planning, increasing burner/air agency

15   communication and collaboration and strengthening the

16   burning authorization decision-making process.

17             When the board adopted the guidelines, we also

18   recognized the need for air district support in implementing

19   the new revisions of the guidelines.

20             The board directed staff to work with the air

21   districts and other stakeholders to assist with a variety of

22   programmatic needs, including smoke management forecasting

23   and planning, program costs and environmental impact

24   assessment.

25             While not included as part of the guidelines, the


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 1   board also directed staff to report back on how to address

 2   the issue of smoke from backyard residential burning.

 3             Today staff will provide us with a update on the

 4   status of these efforts, as well as report on air district

 5   progress in implementing the provisions of the guidelines.

 6             Again, I would like to turn this over to Mr. Kenny

 7   and the staff presentation.

 8             MR. KENNY:  Thank you, Dr. Lloyd and members of

 9   the board.

10             Smoke management guidelines adopted by the board

11   last year established a statewide framework for more

12   standardized smoke management planning and decision making.

13   At the same time, they provide air districts with

14   flexibility to design and implement their programs to meet

15   their unique needs.

16             The guidelines established July 1st, 2001, as the

17   deadline for air districts to develop a revised program and

18   submit them to the ARB for approval.

19             In response to the board's direction to work with

20   air districts and other stakeholders on program development,

21   we coordinated with the California Air Pollution Control

22   Officers Association to create nine smoke management working

23   groups.

24             The working groups are made up of a variety of

25   stakeholders, including federal and state land managers,


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 1   fire protection agencies, air districts and the ARB.

 2             The working groups have provided a forum for

 3   discussion of issues and have sponsored the development of a

 4   number of products to assist in development and

 5   implementation of effective smoke management programs.

 6             Today staff will provide an overview of the

 7   working group effort, and highlight a number of the

 8   products.

 9             With that, I'd like to turn it over to Mr. Bruce

10   Oulrey, who will make the staff presentation.

11             MR. OULREY:  Thank you, Mr. Kenny, Mr. Chairman

12   and members of the board.

13             In the interest of time, my presentation will be

14   brief.

15             I will provide with you a quick status update on

16   the implementation of the smoke management guidelines for

17   agricultural and proscribed burning.

18             I will also share the results of an analysis we

19   performed on the need to address residential garbage

20   burning.

21             As you will recall, the board amended the

22   guidelines in March 2000.  The purpose of the guidelines is

23   to reduce smoke impacts and accommodate increases in

24   prescribed burning through strengthened smoke management

25   programs and improved coordination and communication among


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 1   burners and air quality managers.

 2             Implementation of the guidelines is going very

 3   smoothly.  Air managers and burners are work well together

 4   on program development and day-to-day operations.

 5             The guidelines are resulting in strengthened air

 6   district programs in a number of areas, including

 7   utilization of smoke management plans for prescribed

 8   burning; the requirement for burners to obtain local daily

 9   burn authorization no more than 24 hours prior to a burn;

10   the incorporation of marginal burn days to allow for limited

11   burning in specified areas; and the development of smoke

12   management tools for improving the ability to make burn

13   decisions.

14             We formed numerous working groups to assist with

15   meeting the California Environmental Quality Act

16   requirements, public education and outreach and sharing of

17   real time data resources.

18             As a whole, we are very pleased with the progress

19   that is occurring and we are committed to providing

20   additional assistance to air districts for the

21   implementation of their programs.

22             With regard to residential garbage burning,

23   working with stakeholders we identified the following

24   concerns.

25             There is a potential for dioxin emissions from


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 1   this type of burning and we know that seven air districts in

 2   the state do allow for it to occur.

 3             300,000 households reside in these districts with

 4   about 150,000 households that do not have collection and

 5   disposal services.

 6             Information on the actual amount of burning and

 7   definitive data on emissions is still limited.

 8             To address these concerns, we propose the

 9   following.

10             We think educating the public on potential health

11   risks, as well as providing information and alternatives to

12   residential garbage burning is an important first step.

13             We plan to work with air districts and other

14   stakeholders to carry this out.

15             We also propose to work with stakeholders and

16   local agencies to collect more information about residential

17   burning emissions and to encourage improvements to waste

18   collection disposal services.

19             Additionally, we plan to work with air districts

20   and fire protection agencies to investigate options for

21   improving enforcement in areas that don't allow garbage

22   burning.

23             We have added residential garbage burning to ARB's

24   clean air plan and we are committed to further evaluating

25   potential for developing an air toxics control measure.


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 1             We recognize some air districts believe this is a

 2   local issue and we plan to work with them and other air

 3   districts as we go forward.

 4             In conclusion, the implementation of the smoke

 5   management guidelines and air district smoke management

 6   programs are proving to be a success.  Communication and

 7   coordination between burners and air agencies has been

 8   essential.

 9             We are appreciative of the cooperative efforts

10   that have been taking place with stakeholders through the

11   working group process, and we're committed to providing

12   continued support for program development and

13   implementation.

14             Thank you.  That concludes my presentation.

15             CHAIRPERSON LLOYD:  Thank you very much, Bruce.

16             Questions from the board?

17             Questions from the board?

18             No.

19             With that, I think we have two people signed up to

20   testify.  I recognize that Barbara and Wayne were not just

21   here for the -- Wayne Morgan from North Coast AQMD is here,

22   and as well as Barbara Lee, president of CAPCOA.

23             Wayne.

24             MR. MORGAN:  Ladies first.

25             MS. LEE:  Good evening, Mr. Chairman and members


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 1   of the board.

 2             I'm happy to have an opportunity to talk to you

 3   this evening about CAPCOA's efforts to work with ARB staff

 4   implementing the enhanced smoke management guidelines.

 5             I want to start off by acknowledging the extent of

 6   efforts staff have taken to involved air districts in this

 7   phase of the implementation of the program.  We're very

 8   happy with all of the efforts they have done in that area.

 9             There are two specific implementation issues that

10   I would like to draw your attention to.

11             The first is that at the hearing where you adopted

12   this program last year, the board committed to help us

13   secure long-term and full funding for this enhanced smoke

14   management program.

15             We have been working on that over the past year

16   with ARB staff.  I know that you've included in your budget

17   last year a proposal to help districts in their funding

18   efforts for this program.

19             That was not a successful effort on all of our

20   parts.

21             I would like to urge you to make this a top

22   priority in the coming year's budget.  This program is

23   costly to implement.  Many of the efforts are intensive on

24   the part of the district, and the equipment and other

25   infrastructure issues involved are costly for us, and we do


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 1   need some help in funding the program.

 2             So I would like to ask you to please make that a

 3   top priority.

 4             The second issue is that last month the California

 5   Air Pollution Control Officers Association voted

 6   overwhelmingly to ask the ARB board to please move ahead in

 7   adopting an air toxics control measure to ban burn barrels.

 8   We want this to be take top priority for you as well, and

 9   this is because of the high exposure many people receive

10   from uncontrolled emission of garbage in the burn

11   barrels.

12             Unfortunately after we took this vote we heard

13   from three CAPCOA members that they have some significant

14   concerns about hardships this action might create in their

15   areas because they lack sufficient garbage service.  We

16   think these are valid concerns and we urge staff to consider

17   that and address them in the development of the ATCM, so

18   that the public in those areas is not harmed by your actions

19   going forward.

20             But again I want to reiterate CAPCOA's support for

21   an air toxics control measure banning burn barrels and

22   addressing the issues of uncontrolled garbage burning.

23             CHAIRPERSON LLOYD:  Maybe express my ignorance

24   here, but why doesn't the local district have the authority

25   to ban these without relying on ARB to send them an ATCM?


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 1             MS. LEE:  Many districts have gone ahead and done

 2   this.  Some districts are restricted in their ability to do

 3   it, either statutorily in a couple of cases, or for

 4   political reasons in other cases And,

 5             CHAIRPERSON LLOYD:  In those cases you'd like us

 6   to bear the heat and use us to --

 7             MS. LEE:  The districts don't have specific

 8   authority to adopt air toxics control measures in the same

 9   way that the ARB does have, and this is a significant source

10   of air toxics emissions, and we think it's a viable approach

11   to addressing it.

12             CHAIRPERSON LLOYD:  What's the status of our work

13   in this area?

14             MR. FLETCHER:  Well, over the last year we have

15   been working with one of the numerous work groups we've

16   formed on smoke management over the last year, but one of

17   them was specifically targeted at residential burning and

18   specifically garbage burning and we have actually collected

19   quite a bit of information about the scope of the problem

20   and that's the slide up there indicated that there is about

21   300,000 households we think that are in areas that still

22   allow garbage burning.  About half of those are in areas

23   where we think that there is residential service to pick up

24   the garbage.

25             The issues that we're looking at is really trying


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 1   to quantify what the dioxin and benzene, which are probably

 2   the two toxic air contaminants that we're dealing there are.

 3   US EPA has done work to do testing on this for under a

 4   couple different scenarios and that's basically the only

 5   testing that's been done on there.

 6             I think the issues that we need to look at is

 7   working with the fire agencies there is some question about

 8   whether it's better to burn stuff on the ground or burn it

 9   in burn barrel from fire safety perspective, so those are

10   areas I think we need to look into.

11             We need to get a better handle on what the

12   exposure actually is from the combustion of this material.

13             I think the 150, from our perspective, from what

14   we know right now, may be an upper, you know, an upper

15   level.  We just don't know how frequently this occurs.

16             In conjunction with the testing and monitoring

17   we're now going to be doing and we're starting up in the Bay

18   Area and shortly thereafter in the South Coast to start

19   assessing what the ambient levels of dioxin are.  I think it

20   will start giving us a baseline to evaluate what the

21   incremental impacts of this are.

22             Quite frankly, we're going to proceed with a

23   continued collection of the information to try to get a

24   better handle on what the exposures are and what the

25   emissions are and we may end up having to do some of our own


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 1   testing to see what the impact is, but I don't think there's

 2   any question that there are dioxin and benzene emissions

 3   from this source and it's pretty widespread in some of these

 4   areas.

 5             CHAIRPERSON LLOYD:  So that Barbara can go back to

 6   her members and Wayne can go back, and I don't get a call

 7   from Bob Reynolds, when do we expect to bring something to

 8   the board?

 9             MR. FLETCHER:  Well, it usually takes us, our rule

10   of thumb for an airborne toxic control measure it takes

11   about three to five person years and roughly two -- sorry,

12   three to five person, people to develop it and it takes

13   about two years to develop an ATCM.

14             CHAIRPERSON LLOYD:  The clock started when?

15             MR. FLETCHER:  The clock started probably about

16   six months ago.  So I think if we were able to do it in 18

17   months we would probably be okay.

18             CHAIRPERSON LLOYD:  So we're into 2002.

19             MR. FLETCHER:  I think that would be about right.

20   Yeah.  Or what's next year?  2002.  Yeah.  End of 2002.

21             CHAIRPERSON LLOYD:  Good.

22             BOARD MEMBER RIORDAN:  Mr. Chairman.

23             CHAIRPERSON LLOYD:  Yes.

24             BOARD MEMBER RIORDAN:  I just have a comment.

25             When the staff briefed me, I asked them for some


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 1   of the areas that were still allowing the burning, and I

 2   found it very interesting because I expected very remote

 3   little areas to be -- and rural, very rural, to be on that

 4   list.

 5             Reality is they are not necessarily those areas.

 6   In fact there are some areas that I was really shocked that

 7   they were allowing this residential burn.

 8             And in thinking about representing the largest and

 9   the most rural of counties, when you think of the distances

10   of San Bernardino, and we were able to provide either

11   transfer facilities and albeit some of our waste disposal

12   sites might be thought of in jeopardy today for what we know

13   about those sites, but what we knew and when we established

14   them, we were able to provide to 22,000 square miles some

15   sort of waste disposal.

16             Now, some of it had to be obviously driven a

17   tremendous distance.

18             So it concerns me that there are some counties,

19   and I will name a couple of them.  One was Monterey,

20   correct.  Now you tell me about Monterey.  San Luis Obispo.

21   Santa Barbara.  I consider those absolutely -- that's

22   unacceptable.

23             And so I'm a little concerned about what areas

24   we're allowing this burning in.  I mean, I'm a generous

25   person, but I'm not real generous when I think of what our


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 1   areas are doing and those areas are allowing that burning.

 2   It's just not realistic.

 3             MS. LEE:  The three areas that I spoke of that

 4   expressed concerns about hardship were very rural areas.

 5             BOARD MEMBER RIORDAN:  That may be.

 6             MS. LEE:  Lassen, Siskiyou and --

 7             BOARD MEMBER RIORDAN:  Sure.  And those would be

 8   the ones that I would expect and be understanding.

 9             But some of the others, I'm just not understanding

10   of that at all, because you can do transfer facilities.

11   Very easy to do.  I mean, we do it in massive desert areas

12   that, you know, I've represented, so it can be done.

13             CHAIRPERSON LLOYD:  I think we can --

14             MS. LEE:  In the case of the Monterey, I don't

15   know all of the circumstances of all of the areas, but I do

16   know in the case of the Monterey district that when the

17   district was formed, one of the things that went into their

18   charter was that they were unable to ban garbage burning.

19   So.

20             BOARD MEMBER RIORDAN:  That's a very strange one.

21             MS. LEE:  It's a circumstance where as much as

22   they would like to address the situation they can't.

23             CHAIRPERSON LLOYD:  I think you should alert Bob

24   Carr that if he doesn't come next month to testify about

25   transport of ozone from the Bay Area to San Luis Obispo, we


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 1   are going to ask him why does he allow exposure to dioxin

 2   from open burning.  So has he done that trade-off there.  So

 3   just alert Bob, if he's not retired by then.

 4             MS. LEE:  I will.

 5             BOARD MEMBER RIORDAN:  But you can see what I'm

 6   saying.  I mean there are some counties that I truly

 7   understand it, but those others, there's not a reason they

 8   should be having residential burning.

 9             MR. FLETCHER:  Just to clarify, if I might, some

10   of these areas it's not the entire county.

11             BOARD MEMBER RIORDAN:  And I recognize that.

12             But even if you planted their footprint, for

13   instance, on San Bernardino County, you'd see why I have

14   that concern, because it just don't make sense.  It doesn't

15   compute.

16             CHAIRPERSON LLOYD:  I think this paper that was

17   attached to Bob Reynolds' letter here was pretty

18   interesting.  I think it just adds to the case.

19             Thank you very much, Barbara.

20             Wayne.

21             MR. MORGAN:  Dr. Lloyd, members of the board.

22   Good to be here.

23             I have a much greater appreciation for this board

24   because of all the topics that you discussed today.

25             CHAIRPERSON LLOYD:  I appreciate that.


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 1             MR. MORGAN:  All way from cow mature to electric

 2   vehicles.  Quite a challenge.

 3             CHAIRPERSON LLOYD:  Let Bob also know that we

 4   covered it.

 5             MR. MORGAN:  I will do that.

 6             The questions are raised here by Ms. Riordan is

 7   absolutely right on target.  It's really hard to understand

 8   why some of the urbanized areas still allow residential

 9   burning.

10             I can speak a little bit on behalf of Bob Carr,

11   because I know a little bit of his situation is that his

12   residential burning ban is being phased in over a period of

13   about three or four years and it's designed for various

14   communities.

15             So there is an effort underway.

16             But I think it points to something that is I would

17   like to stress and you probably will never hear this from me

18   again and that is at times it is needful for the Air

19   Resources Board to take the leadership.  It really is.  And

20   at times we can help support you in a lot of leaderships,

21   but this is a real delicate political issue when it comes to

22   residential burning.

23             CHAIRPERSON LLOYD:  I recollect when we first

24   started with these regulations, your reactions were not

25   quite the same.


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 1             MR. MORGAN:  Right.

 2             I would also like to thank the Air Resources Board

 3   for approving our smoke management plan.  As you know, we

 4   were the first to go through the process, and we're the

 5   first to receive full approval, and I would really like to

 6   thank Mike Kenny, Lynn Terry, and Bob Fletcher for their

 7   effort in working with us to make that happen.

 8             As you know, we've had our smoke management

 9   program, it's been working for about 10, 11 years now.  As I

10   said before, it's not perfect, but it works.  It's a

11   cooperative program working with those that do the burning

12   of forest slash and so forth.

13             And you were speaking earlier with the rice

14   growers and so forth about incentive programs.

15             One of the things that I would like to suggest

16   that maybe the Air Resources Board investigate, and that

17   would be alternatives and maybe incentive programs for

18   alternatives to avoid the need for burning forest slash.

19   Some of that now is being used because of the economics are

20   right to use it in biomass fuel, but there are incentives at

21   times that need to be applied in order to encourage more and

22   more of that to develop markets and so forth for chipping or

23   for using it for biomass fuel.

24             And so I would like to suggest that if you can

25   think of some financial incentive ways to bring that about,


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 1   that would be very helpful.

 2             CHAIRPERSON LLOYD:  Would that qualify also for

 3   some of the biomass to ethanol?

 4             MR. MORGAN:  That's true.  That's down the road, I

 5   guess.

 6             CHAIRPERSON LLOYD:  Not really far.

 7             MR. MORGAN:  Not too far?

 8             CHAIRPERSON LLOYD:  Yeah.

 9             Your comments, by the way, also, Wayne, really

10   appreciate that, because I know, Lynn, when we went up

11   there, see how far we've come, and so I really would

12   congratulate Mike and Lynn and Bob in their effort.  To hear

13   you say that, it came from a position of not necessarily

14   seeing eye to eye to where it is today.  So that's great.

15             MR. MORGAN:  And it is appreciated and our board

16   especially appreciates it, as well as you folks coming to

17   the North Coast to see it firsthand.

18             So again thank you very much.

19             CHAIRPERSON LLOYD:  The owl picture is still with

20   us.

21             MR. MORGAN:  Do you still have the owl picture?

22             CHAIRPERSON LLOYD:  Yes.

23             MR. MORGAN:  One of the things I wanted to mention

24   and one of the main reasons I wanted to come down was to try

25   and support the Air Resources Board in setting a high


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 1   priority on burning -- banning the burn barrel in

 2   residential areas.

 3             As you probably have been made aware is that the

 4   federal EPA and the New York State Department of Health

 5   performed a study to determine the emission of dioxin,

 6   furans and several other organics.

 7             CHAIRPERSON LLOYD:  This was the paper that was

 8   attached to Bob's letter?

 9             MR. MORGAN:  That's part of it.  That's part of

10   the study, yes.

11             But they equated the emissions from burn barrels

12   with that of a municipal waste incinerator and it showed

13   that a 200 ton per day municipal waste incinerator equated

14   to four households burning in their burn barrels.  So you

15   can see the magnitude of dioxins, furans that go into the

16   community.

17             CHAIRPERSON LLOYD:  They're uncontrolled burns.

18             MR. MORGAN:  They're uncontrolled.  They're

19   emitted at low levels at close proximity to people breathing

20   it, so the impact from it I think is very considerable.

21             And then Bob's letter it showed that three burn

22   barrels equating it again to hospital incinerators, which

23   this board has adopted a control measure for dioxin with

24   hospital incinerators, and in this case I think it was 1700

25   pounds of hospital waste being burned, equated to 500 pounds


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 1   per year of residential waste in a burn barrel, and both of

 2   those it took three burn barrels to equate to the same

 3   dioxin emissions of the hospital incinerator burning that

 4   1700 pounds per year.  1700 or 17,000, I think it was.

 5             So again it kind of shows you the magnitude of

 6   what we're stating here and what the data has shown.

 7             The largest number of complaints that we receive

 8   on the North Coast are from burn barrels, residential

 9   burning.

10             It's a significant part of our workload and

11   responding to these, as well as the fire departments in

12   responding to the smoke complaints, and a lot of them are

13   people burning unapproved materials.

14             And in my opinion it's a real poor use of our

15   resources in that area that it could be better used in other

16   areas if they weren't being diluted in to these particular

17   complaints.

18             There are alternatives available is the other

19   important factor, I think.  Garbage service is available in

20   most areas in California.

21             And as Ms. Riordan said, there are transfer

22   stations in areas that are outlying that allow us proper

23   disposal.

24             In some areas on the northern part of California,

25   I understand there's not garbage service available.


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 1             What I would propose to you is that it could

 2   easily, residential burning from burn barrels could easily

 3   be banned with a proviso that if there is not garbage

 4   service available, then maybe you have to wait until

 5   alternatives catch up a bit.

 6             But where garbage service is available, there's

 7   recycling services available, there really is no need to

 8   burn.

 9             The other issue I would just like to bring out is

10   that I know that you, Dr. Lloyd, are committed to

11   environmental justice issues and making sure those are dealt

12   with.

13             And I'm sure that the other board members here are

14   also committed to environmental justice issues.

15             I believe this is an environmental justice issue.

16   It's occurring in poor and low-income areas, and I think

17   it's something that you can use the board can do about it by

18   asking staff to set a high priority on developing a control

19   measure that will eventually ban or eliminate the dioxin

20   exposures through this route.

21             CHAIRPERSON LLOYD:  I think you heard Bob's

22   response to my question, what you heard was that we are

23   going to set a high priority and we'll go as fast as we can

24   here and Bob had committed to get this to the board towards

25   the end of next year.


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 1             MR. MORGAN:  Thank you very much.  I appreciate it

 2   very much.

 3             CHAIRPERSON LLOYD:  Thank you.

 4             Other questions or comments from the board?

 5             This is informational.  We don't have to take any

 6   action here.

 7             So thank you.  Thank you, staff.  Thank you for

 8   cooperating.

 9             We don't have -- we have no one signed up for any

10   other business here open comment period.

11             So with that, I would like to officially bring the

12   June 28th meeting of the Air Resources Board to a close.

13             Thank you all very much.

14             And thank you, staff.

15             (Thereupon the meeting was adjourned

16             at 6:20 p.m.)

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