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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 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 -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 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-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 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-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 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-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 304 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 305 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 306 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 307 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 308 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 309 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 310 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 311 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 312 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 313 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 314 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 315 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 316 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 317 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 318 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 319 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 320 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 321 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 322 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 323 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 324 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 -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 325 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 326 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 327 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 328 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 329 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 330 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 331 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 332 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 333 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 334 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 335 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 336 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 337 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 338 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 339 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 340 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 341 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 342 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? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 343 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 344 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 345 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 346 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 347 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 348 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 349 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 350 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, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 351 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 352 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 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 353 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 354 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. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 355 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.) 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 CERTIFICATE OF REPORTER 2 I, JAMES F. PETERS, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing California Air Resources Board meeting was 7 reported in shorthand by me, ames F. Peters, a Certified 8 Shorthand Reporter of the State of California, and 9 thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said meeting nor in any 12 way interested in the outcome of said meeting. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 13th day of July, 2001. 15 16 17 18 19 20 21 22 23 JAMES F. PETERS, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 10063 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, JANET H. NICOL, a Certified Shorthand Reporter 4 of the State of California, do hereby certify that I am a 5 disinterested person herein; that I reported the foregoing 6 meeting in shorthand writing; that I thereafter caused my 7 shorthand writing to be transcribed into typewriting. 8 I further certify that I am not of counsel or 9 attorney for any of the parties to said meeting, or in any 10 way interested in the outcome of said meeting. 11 IN WITNESS WHEREOF, I have hereunto set my hand 12 this 7th day of July 2001. 13 14 15 16 Janet H. Nicol 17 Certified Shorthand Reporter License Number 9764 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345