Texas Emissions Reduction Plan (TERP) Helping to Keep the Air Clean in Texas

What is TERP? Provides grants to reduce nitrogen oxides (NOX) 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 Talking Points: The Texas Emissions Reduction Plan (TERP) program provides grants to reduce nitrogen oxides (NOX) emissions from mobile sources in order to help areas come into compliance or remain in compliance with the National Ambient Air Quality Standards under the Federal Clean Air Act. In other words, to help keep the air clean in Texas. The TERP program also supports grant programs to encourage the use of alternative fuels for transportation in Texas.

Why Reduce NOX Emissions? Ground level ozone is created by chemical reactions of NOX and volatile organic compounds (VOC) in the presence of sunlight. Talking Points: NOX emissions combine with volatile organic compounds (VOC) in the presence of sunlight to form ground level ozone (smog). By helping to reduce the NOX in the ozone equation, TERP is helping to assure that air in this state remains safe to breathe and meets federal standards established under the Federal Clean Air Act. NOX + VOC + Sunlight = OZONE

Non-Attainment Areas & Eligible Counties Diesel Emissions Reduction Incentive Program Eligible Counties for Fiscal Year 2016-2017 Non-Attainment Areas & Eligible Counties Talking Points: Map shows areas that TERP is helping come into compliance or remain in compliance with the National Ambient Air Quality Standards under the Federal Clean Air Act. Discuss areas of concern for ozone vs. non-attainment areas for ozone. Areas of concern (TERP eligible areas other than HGB, DFW, and El Paso): goal is to keep these areas from becoming non-attainment areas Non-attainment areas: goal is to bring them into compliance with federal emission standards Dallas-Fort Worth: Eight-Hour Ozone Non-attainment Area Houston-Galveston-Brazoria: Eight-Hour Ground-Level Ozone Non-attainment Area City of El Paso: Particulate Matter (PM10) Non-attainment Area (for PM not for NOx) Areas classified as nonattainment areas for SO2 will also be eligible for future grant rounds. **Areas may vary by grant program.

Mobile Sources of NOX Talking Points: Provide examples of TERP eligible mobile sources. Note that point/area source emissions can be controlled via permitting. Mobile source emissions have tailpipe emission standards set by the federal government. Not only are mobile source emissions nearly impossible to control via permitting, but in most areas in Texas they are the biggest contributor to NOX emissions.

NOX Emissions by Source Dallas-Fort Worth Area Talking points: In 2014, mobile sources contributed more NOx emissions in the DFW Area than point and area sources combined.

NOX Emissions by Source Houston-Galveston-Brazoria Area Talking points: In 2014, mobile sources contributed more NOx emissions in the HGB Area than point and area sources combined.

How Does TERP Reduce NOX Emissions from Mobile Sources? 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 NOX and other pollutants Talking Points: Many heavy-duty vehicles and pieces of equipment, particularly those with large diesel engines, will last a long time before the vehicles and equipment are retired. The federal engine emission standards for NOX and other pollutants are much more stringent now than when older vehicles and equipment were put into service. TERP provides incentives for owners of heavy-duty vehicles and equipment to replace or upgrade their vehicles and equipment sooner than they would have otherwise done. The old, dirty vehicle or piece of equipment being replaced is rendered inoperable to ensure that it will not return to operation. The result is that emissions from the operation of these large engines will be much less as a result of the TERP incentives and, therefore, the air will be cleaner than it would have been had the old equipment not been retired early.

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. Talking Points: Provide a general overview of eligibility requirements: Any person who operates/plans to operate on-road heavy-duty vehicles, non-road equipment, or stationary engines primarily in one or more of the nonattainment areas or other eligible counties Eligible applicants include: individuals, corporations, organizations, governments or governmental subdivisions or agencies, business trusts, partnerships, associations, or any other legal entity Eligible projects include: on-road heavy-duty vehicles with a GVWR of 8,5000lbs or greater as well as non-road equipment with a hp rating of 25hp or greater

Adrian’s TERP Story Adrian attended the Houston Trucking Show where he met TERP staff members and found out about the Emissions Reduction Incentive Grants (ERIG) program. Talking Points: TERP staff members informed Adrian that he could replace his truck with a newer, cleaner, more efficient truck under the TERP Emissions Reduction Incentive Grants (ERIG) Program. Adrian could not believe he could get up to 80% of the incremental cost to replace his truck through the ERIG program! Until now, Adrian had no intention of replacing his truck. His diesel engine still had at least seven years of useful life left. TERP Staff encouraged Adrian to sign-up for TERP email updates so he would be notified when the next ERIG grant round opened.

Adrian’s TERP Story Adrian received an e-mail 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. Talking Points: How to get copies RFGAs and the necessary application forms  visit terpgrants.org or call us at 1-800-919-TERP Information necessary to complete the ERIG application for replacement projects including: information related to the vehicle & engine in the vehicle being replaced; information related to the vehicle being purchased (like for like); and the difference between the emissions of the vehicle being replaced and the emissions of the vehicle being purchased (EPA Certification Data). Emphasize that help is available to applicants during the application process. Third party preparers are available, but may charge for their services. TERP services are FREE!

98% Adrian’s TERP Story Cleaner 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% Talking Points: Discuss the minimum emission reductions to be achieved by a project. (25% reduction) Cleaner

Maximum Grant Amount at 80% of the Cost to Replace the Vehicle Adrian’s TERP Story New Vehicle Cost = $154,000 Maximum Grant Amount at 80% of the Cost to Replace the Vehicle $123,200 Adrian Requested: $120,000 Talking Points: The grant recipient may be eligible for reimbursement of up to 80% of the eligible costs for the purchase or lease of the replacement vehicle, subject to cost effectiveness limits established by the TCEQ. For example, in the last grant round the cost per ton limit was set at $15,000/ton on NOx reduced, so requested grant amounts could be at $15,000/ton of NOx or lower in order to be considered for grant funding. Why is there a cost/ton limit? TERP aims to fund the most cost-efficient projects (the greatest NOx reductions for the least amount of money) Applicants are eligible for a grant amount that is either up to 80% of the eligible costs or up to $15,000/ton of NOx reduced, whichever amount is lower. In Adrian’s case, his cost/ton was around $10,000/ton of NOx reduced To be competitive, applicants have the option to set their requested grant amount much lower than their maximum grant amount.

Adrian’s TERP Story Adrian drove his truck to his local mechanic who certified that the diesel engine had at least seven years of useful life left. Talking Points: In order for a replacement activity to result in creditable emissions reductions, the applicant must intend to continue to use the vehicle being replaced for the same type of use and amount of use over the same period as the activity life, absent the award of a grant.

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. Talking Points: Provide overview of forms/attachments to be submitted with application: Application Forms, Registration, Title, W-9, vehicle photos. TERP Provides forms Verify that the emission reductions are taking place in the state (if asked) Process for submitting applications. Applicants may hand deliver their applications or mail them to TERP

Adrian’s TERP Story Three months later, Adrian was notified that his project was selected for award! Talking Points: Provide an overview of competitive selection process. Applications are reviewed multiple times before being scored. Primary selection factor—project cost effectiveness (cost of NOx reduced) Discuss why Adrian’s project helps to achieve the goals of the TERP. Goal: reduce the amount of NOx emissions through early retirement

Adrian’s TERP Story Within a few weeks, Adrian got a contract from the TCEQ in the mail. Adrian agreed to: decommission his old truck and engine; 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. Talking Points: Projects selected for funding will be awarded a grant through the development and execution of a grant contract that is signed by the recipient and by an official of the TCEQ. The grant recipient must agree to monitor and track the use of grant-funded vehicles for the length of the activity life designated in the grant contracts. usage does not have to be 100% in one particular area. Discuss how contract requirements may vary by project. The activity life is used to determine the total reductions of NOX emissions and cost-effectiveness of the project.

Adrian’s TERP Story Adrian was reimbursed $120,000 Talking Points: Grant payments will be reimbursements, meaning that the agency will remit payment after the eligible expense has been incurred by the recipient. Adrian was reimbursed $120,000 Adrian was left with a balance of only $34,000

Adrian’s TERP Story Talking Points: The applicant must agree to decommission any old vehicle, equipment, or engine replaced under this program no later than 90 days after receiving reimbursement from the TCEQ. Reporting starts from the time disposition is approved by the TCEQ. Where is Adrian Now- with a booming business, and operating 4 grant-funded vehicles. After being reimbursed, and as a final step in the replacement process, Adrian destroyed his old truck.

Be Like Adrian! Is there a TERP Grant for You? 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

DERI-ERIG Are you interested in upgrading or replacing older heavy-duty vehicles, non-road equipment, locomotives, marine vessels, or stationary equipment?

DERI-ERIG A competitive grant program that provides incentives to repower 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-Rebate Grants Are you looking for the simplest route to upgrading or replacing your heavy-duty vehicle or non-road equipment?

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 and equipment may be replaced with diesel, natural gas, propane, or electric powered vehicles Talking Points: The downside to the Rebate Grants program is that there are typically less funds available for award compared to the ERIG program.

DTIP Are you currently operating your heavy-duty vehicle or non-road and cargo-handling equipment at a Class I railyard in the Dallas-Fort Worth or El-Paso Areas? Or at a seaport in the Houston-Galveston-Brazoria Area?

DTIP Provides incentives for the replacement of older drayage trucks and cargo-handling equipment operating at seaports and Class I railyards in areas of Texas designated as nonattainment on a first-come, first-served basis. Eligible applicants must operate eligible seaport terminals and Class I intermodal rail yards located in the state's air quality nonattainment areas. Other participating facilities of the Houston Ship Channel Security District (HSCSD) will be considered. Models of drayage trucks eligible for replacement under this program include: heavy-duty on-road vehicle with a gross vehicle weight rating (GVWR) over 26,000 pounds; non-road yard truck; and other cargo handling equipment. Talking Points: Grantees are required to operate at least 250 days out of the year (250 days or visits; only one visit per day) Some types of cargo-handling equipment include: Diesel truck lifts Container handlers (top-loaders, reach stackers, etc.)

TCFP Do you have a fleet of at least 75 diesel vehicles, and would be interested in replacing at least 20 of those vehicles with alternative fuel or hybrid vehicles?

TCFP Provides incentives to owners of large fleets in Texas to replace diesel vehicles with alternative fuel and hybrid vehicles 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. Replacement vehicles must be hybrid vehicles or vehicles fueled by one of the following alternative fuels: Electricity, Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG), Hydrogen, Propane (LPG), or methanol (85% by volume) light-duty vehicle- gross vehicle weight rating (GVWR) less than 10,000 lbs. heavy-duty vehicle- GVWR greater than 8,500 lbs. Alternative fuels include compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), hydrogen, methanol (85% by volume), and electricity.

TNGVGP Maybe you don’t have a fleet of 75 vehicles, but would still be interested in upgrading or replacing your vehicle with a CNG or LNG engine or vehicle.

TNGVGP 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. 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 NOX.

CTT/AFFP Are you interested in building fueling infrastructure for alternative fuel vehicles and equipment?

CTT/AFFP 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. 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. Talking Points: Grant-funded fueling stations must be made available to the public and must operate for at least three years. Though both the CTT and AFFP grant programs have unique features (i.e., fuel options, funding allocations and geographic requirements), because of the similarities between these programs, the TCEQ solicits applications for both programs under a joint Request for Grant Applications (RFGA) and provides one application track for applicants to apply to one or both programs, depending on the eligibility of the project. TERP supports projects involving the purchase of alternative fuel vehicles as well as the development of fueling infrastructure

Clean Transportation Triangle Talking Points: The goal of the Clean Transportation Triangle is to ensure that natural gas vehicles purchased, leased, or otherwise commercially financed or repowered under the TERP program have access to fuel, and to build the foundation for a self-sustaining market for natural gas vehicles in Texas. The Clean Transportation Triangle includes the state's air quality nonattainment areas, other areas of concern for air quality, and counties within the triangular area between Houston, San Antonio, and Dallas-Fort Worth. The eligible counties for the four programs that follow vary from the DERI and DTIP grant programs.

Texas Clean School Bus Program Are you looking for grant funding to help your school district retrofit older school buses?

Texas Clean School Bus Program The Texas Clean School Bus Program is a statewide program designed to reduce diesel exhaust emissions from school buses. Projects may include retrofitting school buses with diesel oxidation catalysts, diesel particulate filters, and emissions-reducing add-on equipment. This program focuses on the reduction of particulate matter (PM10) in diesel exhaust by retrofitting older school buses.

SO2 scrubbers installed at power plant in Texas NTIG Are you currently working on an energy storage project related to renewable energy? Or a project to install advanced clean energy technology at a power generation facility? SO2 scrubbers installed at power plant in Texas

NTIG The primary purpose of this grant program is to offset the cost of the implementation of existing technologies that reduce the emissions from facilities and other stationary sources in Texas. Eligible categories include: Electricity Storage; New Technology; and Advanced Clean Energy.

DERI Funds Awarded by Area How Are We Doing? DERI Funds Awarded by Area September 2001-August 2016 Talking Points: To date, in the DERI Program alone, TERP has awarded just over of a BILLION dollars in grant funds!

DERI Funds Awarded by Emission Source September 2001-August 2016 How Are We Doing? DERI Funds Awarded by Emission Source September 2001-August 2016 Talking Points: To date, in the DERI Program alone, TERP has awarded just over a BILLION dollars in grant funds!

FY16-17 Available Funding Program Funds Available Emissions Reduction Incentive Grants $51.7 Million Texas Natural Gas Vehicle Grant Program $37.8 Million Texas Clean Fleet Program $5.9 Million Texas Clean School Bus Program Drayage Truck Incentive Program $4.7 Million Rebate Grants $10 Million Clean Transportation Triangle Alternative Fueling Facilities Program New Technology Implementation Grants $3.5 Million Talking Points: The Legislature is still in session so the opening dates and other details are not able to be finalized due to pending legislation. Provide an update on grant rounds that that are still open: TNGVGP DTIP Rebate

TERP E-Mail Updates www.terpgrants.org Talking Points: Encourage people interested in learning more information about the TERP program to visit www.terpgrants.org where they can sign up receive TERP e-mail updates, and view upcoming program workshop schedules.

TERP Contact Information Website: www.terpgrants.org E-mail: terp@tceq.texas.gov Toll Free: 800-919-TERP (8377)