Air Quality Division May 2016 Page 1 Texas Emissions Reduction Plan (TERP): Helping to Keep the Air Clean in Texas

Air Quality Division May 2016 Page 2 What is TERP? Provides grants to reduce nitrogen oxides (NO X ) emissions from mobile sources Supports programs to encourage the use of alternative fuels for transportation in Texas Helps to keep the air in Texas clean

Air Quality Division May 2016 Page 3 Ground level ozone is created by chemical reactions of NO X and volatile organic compounds (VOC) in the presence of sunlight. NO X + VOC + Sunlight = OZONE Why Reduce NO X Emissions?

Air Quality Division May 2016 Page 4 Non-Attainment Areas & Areas of Concern for Air Quality

Air Quality Division May 2016 Page 5 Mobile Sources of NO X

Air Quality Division May 2016 Page 6 NO X Emissions by Source Dallas-Fort Worth Area

Air Quality Division May 2016 Page 7 NO X Emissions by Source Houston-Galveston-Brazoria Area

Air Quality Division May 2016 Page 8 Through the early retirement of heavy-duty vehicles and pieces of equipment, particularly those with large diesel engines By replacing older engines with newer models with more stringent federal emission standards for NO X and other pollutants How Does TERP Reduce NO X Emissions from Mobile Sources?

Air Quality Division May 2016 Page 9 Meet Adrian, TERP Grantee Adrian owns a small trucking company in Houston, Texas. Adrian owned and operated a 1989 Peterbilt dump truck. He operates 100% of the time in the Houston area hauling sand and gravel between job sites.

Air Quality Division May 2016 Page 10 Adrian attended the Houston Trucking Show where he met TERP staff members and found out about the Emissions Reduction Incentive Grants (ERIG) program. Adrian’s TERP Story

Air Quality Division May 2016 Page 11 Adrian received an from TERP announcing the opening of an ERIG round. Adrian attended an ERIG application workshop in Houston led by TERP staff. Armed with good information, Adrian began to complete the ERIG application for replacement projects. TERP staff was readily available to answer Adrian’s questions. Adrian’s TERP Story

Air Quality Division May 2016 Page 12 After comparing the emissions of the vehicle being replaced and the emissions of the vehicle being purchased, Adrian found it hard to believe that not only would TERP help him replace his old truck, the new truck would emit 98% fewer emissions than his old one. 98% Cleaner Adrian’s TERP Story

Air Quality Division May 2016 Page 13 Maximum Grant Amount at 80% of the Cost to Replace the Vehicle $123,200 Maximum Grant Amount at $15K Cost per Ton of NO X Reduced $225,200 Adrian Requested: $120,000 Adrian’s TERP Story New Vehicle Cost = $154,000

Air Quality Division May 2016 Page 14 Adrian drove his truck to his local mechanic who certified that the diesel engine had at least seven years of useful life left. Adrian’s TERP Story

Air Quality Division May 2016 Page 15 Adrian’s TERP Story With the application deadline drawing near, Adrian put the finishing touches on his application. Just to be safe, Adrian hand-delivered his application to TERP.

Air Quality Division May 2016 Page 16 Three months later, Adrian was notified that his project was selected for award! Adrian’s TERP Story

Air Quality Division May 2016 Page 17 Within a few weeks, Adrian got a contract from the TCEQ in the mail. Adrian agreed to: –destroy his old truck; –operate the grant-funded vehicle 100% of the time in the Houston area for the next seven years; and –report the usage of the grant- funded vehicle to the TCEQ on an annual basis for the next seven years. Adrian’s TERP Story

Air Quality Division May 2016 Page 18 Adrian’s TERP Story Adrian was reimbursed $120,000 Adrian was left with a balance of only $34,000

Air Quality Division May 2016 Page 19 Adrian’s TERP Story After being reimbursed, and as a final step in the replacement process, Adrian destroyed his old truck.

Air Quality Division May 2016 Page 20 Diesel Emissions Reduction Incentive (DERI) Program Emissions Reduction Incentive Grants (ERIG) Program Rebate Grants Program Third-Party Grants Program Drayage Truck Incentive Program (DTIP) Texas Clean Fleet Program (TCFP) Texas Natural Gas Vehicle Grant Program (TNGVGP) Clean Transportation Triangle (CTT) Program Alternative Fueling Facilities Program (AFFP) Texas Clean School Bus Program New Technology Implementation Grant (NTIG) Program Be Like Adrian! Is there a TERP Grant for You?

Air Quality Division May 2016 Page 21 DERI-ERIG

Air Quality Division May 2016 Page 22 A competitive grant program that provides incentives to upgrade or replace older heavy- duty vehicles, non-road equipment, locomotives, marine vessels, and stationary equipment Eligible replacement vehicles and equipment include: Diesel Engines; Alternative Fuel Vehicles and Equipment; Hybrid Vehicles and Equipment; Idle Reduction Infrastructure; and Refueling Infrastructure. DERI–ERIG

Air Quality Division May 2016 Page 23 DERI–Rebate Grants

Air Quality Division May 2016 Page 24 DERI-Rebate Grants Limited to replacement or repower of heavy-duty on-road diesel vehicles and select non-road equipment Faster, simpler process for projects consistent with the ERIG requirements First-come, first-served - quicker selection process On-road diesel vehicles may be replaced with diesel, natural gas, propane, or electric powered vehicles

Air Quality Division May 2016 Page 25 DTIP

Air Quality Division May 2016 Page 26 Provides incentives for the replacement of older drayage trucks operating at seaports and Class I rail yards in areas of Texas designated as nonattainment. Eligible applicants must operate a drayage truck in one or more of the designated seaports or yards for a minimum number of visits per year. Eligible vehicles & equipment include: – on-road vehicles with a GVWR greater than 26,000 pounds; and – yard trucks (terminal tractors) with an engine rated at greater than 125 horsepower. DTIP

Air Quality Division May 2016 Page 27 Clean Transportation Triangle

Air Quality Division May 2016 Page 28 TCFP

Air Quality Division May 2016 Page 29 Provides incentives for the replacement of diesel vehicles with alternative fuel and hybrid vehicles Alternative fuels include compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), hydrogen, methanol (85% by volume), and electricity. This program allows for replacement of light-duty and heavy-duty diesel vehicles. Applicants must own at least 75 vehicles and operate those vehicles in Texas. Applicants must apply to replace at least 20 vehicles. TCFP

Air Quality Division May 2016 Page 30 TNGVGP

Air Quality Division May 2016 Page 31 Provides grants for the replacement and repower of heavy-duty and medium-duty vehicles and engines with heavy-duty and medium-duty compressed or liquefied natural gas (CNG or LNG) vehicles and engines Applications are submitted through Participating Dealers and awards are made on a first-come, first-served basis. The new engine must be certified to emit no more than 0.2 grams per brake horsepower-hour of NO X. TNGVGP

Air Quality Division May 2016 Page 32 CTT/AFFP

Air Quality Division May 2016 Page 33 The CTT provides grants for the construction or reconstruction of facilities to dispense natural gas. Facilities must be in the nonattainment areas, affected counties, or counties along and between the interstate highways connecting Dallas-Fort Worth, Houston, and San Antonio. The AFFP provides grants for facilities to dispense alternative fuels. Grant-funded facilities must be located in the nonattainment areas of Texas. Eligible Alternative Fuels include: Biodiesel, Hydrogen, Methanol (85% by volume), Natural Gas, Propane, and Electricity. CTT/AFFP

Air Quality Division May 2016 Page 34 Texas Clean School Bus

Air Quality Division May 2016 Page 35 The Texas Clean School Bus Program is a statewide program designed to reduce emissions of diesel exhaust from school buses. Projects may include diesel oxidation catalysts, diesel particulate filters, and emissions-reducing add-on equipment. This program focuses on the reduction of particulate matter (PM 10 ) in diesel exhaust by retrofitting older school buses. Texas Clean School Bus

Air Quality Division May 2016 Page 36 SO 2 scrubbers installed at power plant in Texas NTIG

Air Quality Division May 2016 Page 37 The primary purpose of this grant program is to offset the cost of emission reductions from facilities and other stationary sources in Texas. Eligible categories include: Electricity Storage; New Technology; and Advanced Clean Energy. NTIG

Air Quality Division May 2016 Page 38 How Are We Doing? DERI Funds Awarded by Area September 2001-August 2015

Air Quality Division May 2016 Page 39 How Are We Doing? DERI Funds Awarded by Emission Source September 2001-August 2015

Air Quality Division May 2016 Page 40 When Can I Apply? PROGRAM Next Planned Grant Round Grant Funds Available Emissions Reduction Incentive GrantsFall 2016$51.7 Million Texas Natural Gas Vehicle Grant Program NOW ACCEPTING APPLICATIONS! $37.8 Million Texas Clean Fleet ProgramFall 2016$5.9 Million Texas Clean School Bus ProgramSummer 2016$5.9 Million Drayage Truck Incentive ProgramFall 2016$4.7 Million Rebate GrantsSpring 2017$10 Million Clean Transportation TriangleSummer 2016$5.9 Million Alternative Fueling Facilities ProgramSummer 2016$5.9 Million New Technology Implementation GrantsSummer 2016$3.5 Million

Air Quality Division May 2016 Page 41 TERP Updates

Air Quality Division May 2016 Page 42 TERP Contact Information Web site: Toll Free: TERP (8377)