Innovative Clean Transit Regulation CalACT 2018 Autumn Conference, Napa Valley November 15, 2018

Overview Need for NOx and greenhouse gas (GHG) reductions Transit agencies are key partners and lead the way Proposed Innovative Clean Transit (ICT) regulation Available funding Next steps

Major NOx Reductions Needed South Coast Mobile Source NOx Emissions (tons per day) Action beyond current programs needed by 2031 Mobile source emissions reduced more than 50% Truck and bus emissions reduced by nearly 70% Heavy duty and federal sources remain largest contributors

California Sustainability Targets Achieve 1990 GHG levels by 2020 40% below 1990 levels by 2030 80% less from transportation by 2050 Cleaner electricity targets (SB 100) 60% renewable electricity by 2030 Zero carbon electricity by 2045 Full carbon neutrality by 20451 Executive Order B-55-18

Transit Agencies are Partners Long-term partners in introducing new technologies Cleaner engines, alternative fuels, exhaust retrofits Leading adoption of zero-emission (ZE) technologies and low-NOx engines Addressing barriers, expanding education and outreach Developing sustainable transportation Reduce light-duty vehicle miles travelled Increase connectivity Enhance mobility

Transit Agencies Lead the Way More than 50 transit agencies making zero emission bus (ZEB) purchases Fuel cell and battery electric buses 153 in operation 433 placed orders 729 awarded or planned

Setting Early Goals for Complete Transition to Zero-Emissions Agency Total Buses ZEB Target AC Transit 632 2040a Anaheim Resort Transportation 82 2019/2020 Antelope Valley Transit 77 2019 Foothill Transit 373 2030 GTrans 65 2035 Humboldt Transit Authorityb 30 LA Metro 2452 LADOT 357 Porterville Transit 20 2025 SamTrans 369 2033 San Joaquin RTD 111 Santa Clara VTA 485 Santa Cruz Metro 98 Santa Monica BBB 200 SFMTA 620c Union City Transit 26 2028/29a 16 transit agencies committed to making full transition to ZEBs Nearly 50 percent of all buses in California a Target not a directive from Board b Joint application with Arcata & Mad River Transit System c 327 trolley buses not included in total

Broad Support for ZEB Deployment Wide range of zero emission buses and multiple manufacturers CPUC approved truck and bus infrastructure investments PG&E: $236 million SCE: $343 million and new rate schedule SDG&E: $151 million proposed (pending decision) Department of General Services streamlining ZEB purchases Substantial incentives encourage early actions Continued technology advancement and cost reductions are needed for full transition

Principles of Staff Proposal Achieve zero-emission transit system by 2040 Partner with transit agencies on long-term strategies and implementation Encourage early action Ensure sufficient funding opportunities for successful transition Enhance transit services and encourage innovative mobility options Provide environmental benefits, especially in disadvantaged communities (DAC) Ensure requirements are technologically and financially feasible Monitor progress and report back to Board periodically

Proposed ICT Regulation Summary ZEB rollout plan ZEB purchase requirement Discharge early ZEB purchases Flexibility and exemptions ZE mobility option Low NOx engines and renewable fuels Annual reporting and record keeping requirements

Requirements Differ by Fleet Size Changed from Original Proposal Requirements Differ by Fleet Size Large transit agency* Has more than 65 peak buses and operate in the South Coast or the San Joaquin Valley, or Serves populations > 200,000 and has more than 100 peak buses Small transit agency includes all others * Includes all buses with a GVWR >14,000 lbs, but excludes demand response buses.

Individual ZEB Rollout Plan Informs funding plans, utilities, and engages general public Approved by the transit’s board of directors and submitted by June 30, 2020 for large transit agencies June 30, 2023 for small transit agencies Rollout plan components Goal of full transition to ZEBs by 2040 Show how ZEBs will serve DACs Schedule for bus purchase, conversion and infrastructure build out Identify potential funding sources

ZEB Percentage of New Bus Purchases Changed from Original Proposal ZEB Purchase Schedule Full useful life for buses 2023 requirement discharged if 850 ZEBs purchased by 12/31/2020 2024 requirement discharged again if 1,250 ZEBs purchased by 12/31/2021 All early ZEB purchases count towards future compliance Comprehensive review prior to first purchase requirement Year ZEB Percentage of New Bus Purchases Large Transit Agency Small Transit Agency 2023 25% - 2024 2025 2026 50% 2027 2028 2029 & after 100%

Later Phase-In for Excluded Buses Cutaway, motor coach, double decker, and articulated buses Excluded from ZEB purchases until January 1, 2026, and Applicable bus type passes Altoona testing Voluntary ZEB purchases still count towards compliance

Comprehensive Review of ZEB Technologies Costs Vehicle & infrastructure capital costs, O&M costs Battery Performance Battery degradation Reliability Availability, road call, fuel efficiency, etc. Range Real world operating range Continue coordination for successful implementation Evaluate transit agencies experience and identify issues Technology status for cutaway and other bus types Help formulate appropriate policies and funding strategies Board update one year prior to first purchase requirements

Exemptions to Safeguard Uncertainties Changed from Original Proposal Changed from Original Proposal Exemptions to Safeguard Uncertainties Needed ZEB type is not available Exemptions based on available depot charging BEBs Daily mileage needs cannot be met Gradeability needs cannot be met Incremental capital costs cannot be offset with funding and financing Cannot afford incremental managed net electricity cost Delay of infrastructure construction Agency declared financial hardship *With available depot charging BEB of the same bus type.

Credit to Recognize Early Actions Changed from Original Proposal Changed from Original Proposal Credit to Recognize Early Actions Technology In Service Bonus ZEB Credit FCEB >January 1, 2018 to January 1, 2023 +1 January 1, 2018 +2 BEB Trolley January 1, 2018 to December 31, 2019 +1/10 Bonus for pioneers with ZEBs already in service Took more risks with early technologies and higher costs Worked to address barriers Credits count towards future obligations and extends funding eligibility

Transit Agencies May Comply Jointly Meet individual ZEB targets collectively In same Metropolitan Planning Organization, Regional Transportation Planning Organization, Air District, Air Basin, or All members share infrastructure Complements SB 375, provides more flexibility, better land use, and reduces costs

Zero-Emission Mobility ZE car sharing, vanpool, micro transit, bicycle, or scooters May be used in lieu of ZEB purchases 320K Passenger Miles Large Transit Agency = Miles from bike sharing programs receive a 3X multiplier incentive Small Transit Agency 180K Passenger Miles =

Low NOx Engines & Renewable Fuels NOx Exempt Areas (shaded green) Low-NOx engines purchases begin January 1, 2020 All transit agencies Excludes buses dispatched from NOx exempt areas If engine commercially available for 2 years Does not require switching fuel types Renewable fuels when fuel contracts are renewed Excludes small transit agencies

Significant Incentives Available HVIP Low NOX engines, ZEVs, advanced technology, & infrastructure FY 18-19 $125 M VW Zero-emission transit, school, & shuttle bus replacements $130 M Carl Moyer Cleaner engines & ZEVs up to $80,000/bus plus fueling infrastructure FY 18-19 $79 M AB 617 Engine replacement & infrastructure in DAC FY 18-19 $245 M LCTOP Expanded bus or rail services, & multimodal facilities FY 17-18 $146 M* TIRCP Rail, bus, ferry transit improvements FY 17-18 $291 M* Utility Programs Charging infrastructure service upgrades and electricity rates (SB350) >$575 M LCFS Credits for using low carbon transportation fuels ~$10,000/bus/yr * Calculated from cap-and-trade auction proceeds listed at arb.ca.gov/cc/capandtrade/auction/aug-2018/ca_proceeds_report.pdf

Statewide NOX and PM2.5 Emissions Benefits Reduce NOX and PM2.5 tailpipe emissions 7,000 tons and 39 tons respectively from 2020 to 2050

GHG Emissions Benefits Reduce GHG emissions by 19 MMT CO2e from 2020 to 2050

Benefits of Proposed ICT Regulation Health benefits, especially in DACs Climate benefits Job creation Reduces energy use Less dependence on petroleum fuel Leads zero-emission technology in other heavy-duty sectors Other societal benefits

Next Steps 15 day changes available for comment Comment period ends November 26, 2018 Second hearing Anticipated December 2018 or January 2019 for vote https://www.arb.ca.gov/regact/2018/ict2018/ict2018.htm

Contact Information Tony Brasil, Branch Chief Transportation and Clean Technology tony.brasil@arb.ca.gov (916) 323-2927 Innovative Clean Transit https://arb.ca.gov/msprog/ict/ict.htm Yachun Chow, Manager yachun.chow@arb.ca.gov , (916) 322-7450 Shirin Barfjani, Lead Staff shirin.barfjani@arb.ca.gov , (916) 445-6017