Air Quality Division TERP (8377) Page 1 Texas Emissions Reduction Plan (TERP) Workshop Air Quality Division

Air Quality Division TERP (8377) Page 2 TERP Workshop Program Description Grant Programs Grantee Responsibilities Application Forms

Air Quality Division TERP (8377) Page 3 TERP

Air Quality Division TERP (8377) Page 4 TERP

Air Quality Division TERP (8377) Page 5 TERP Provides incentives for projects that reduce nitrogen oxides (NOx) –NOx emissions combine with volatile organic compounds (VOCs) in the presence of sunlight to form ground-level ozone (smog) –Certain areas of the state are in noncompliance with federal Clean Air Act requirements for levels of ozone

Air Quality Division TERP (8377) Page 6 Map of TERP Eligible Counties Current RFA Eligible Areas Houston-Galveston-Brazoria: Brazoria Fort Bend Waller Montgomery Liberty Chambers Galveston Harris Dallas-Fort Worth: Denton Collin Tarrant Dallas Rockwall Kaufman Ellis Johnson Parker Beaumont-Port Arthur: Hardin Orange Jefferson

Air Quality Division TERP (8377) Page 7 Grant Programs Emissions Reduction Incentive Grants –$126 million –Competitive process –Non-road equipment, public works projects Rebate Grants Program –$10 million  Small businesses - $5 million –First-come, first-served

Air Quality Division TERP (8377) Page 8 Small Business Eligibility A small business is defined as a person who: owns and operates no more than two vehicles or pieces of equipment, one of which is: - an on-road diesel heavy-duty vehicle with a pre-1994 engine model; or - a non-road diesel-powered piece of equipment with an engine with uncontrolled emissions

Air Quality Division TERP (8377) Page 9 Emissions Reduction Incentive Grants Eligibility Operate or plan to operate: –On-road heavy-duty vehicles –Stationary engines –Locomotives –Marine vessels Must operate 75% of the annual usage in the eligible areas for a minimum of 7 years –Non-road equipment Must operate 75% of the annual usage in the eligible areas for a minimum of 5 years

Air Quality Division TERP (8377) Page 10 Emissions Reduction Incentive Grants Eligibility Eligible Source Categories: –On-road – vehicles with equal to or greater than 8,500 gross vehicle weight rating (GVWR) –Non-road – engines equal to or greater than 25 horsepower (hp) –Marine vessels - engines equal to or greater than 25 hp –Stationary equipment - engines equal to or greater than 25 hp –Locomotives

Air Quality Division TERP (8377) Page 11 Emissions Reduction Incentive Grants Eligibility Types of Projects: –New purchases and leases (fleet expansion) –Replacement of old vehicles and equipment with newer models (limited to 80% of eligible incremental costs) –Repower existing vehicles and equipment (engine replacement)

Air Quality Division TERP (8377) Page 12 Emissions Reduction Incentive Grants Eligibility Types of Projects: –Retrofit and add-on devices to vehicles and equipment (EPA or CARB certified/verified ) –Infrastructure for idle-reduction or electrification systems, and qualifying fuel infrastructure

Air Quality Division TERP (8377) Page 13 Emissions Reduction Incentive Grants Eligibility Activity must be at least 25% cleaner for NOx than baseline vehicle or equipment Grant request must not exceed cost/ton limits: –Locomotives: $2,500 –Marine: $4,000 –Non-road: $10,000 –On-road: $5,500 –Stationary: $5,500

Air Quality Division TERP (8377) Page 14 Emissions Reduction Incentive Grants Eligibility Grant request may not exceed incremental cost of activity –Replacements may not exceed 80% of incremental costs –Retrofits and repowers may be eligible for 100% of the incremental costs

Air Quality Division TERP (8377) Page 15 Rebate Grants Eligibility Operate or plan to operate: –On-road heavy-duty vehicles Must operate 75% of the annual usage in the eligible areas for 7 years –Non-road equipment Must operate 75% of the annual usage in the eligible areas for 5 or 7 years

Air Quality Division TERP (8377) Page 16 Rebate Grants Eligibility Eligible Source Categories: –On-road – vehicles with equal to or greater than 8,500 gross vehicle weight rating (GVWR) –Non-road – engines equal to or greater than 25 horsepower (hp)

Air Quality Division TERP (8377) Page 17 Rebate Grants Eligibility Types of Projects: –Replacement of old vehicles and equipment with newer models  Limited to 80% of eligible incremental costs –Repower (engine replacement) existing vehicles and equipment  Up to 100%

Air Quality Division TERP (8377) Page 18 Grant Program Projects Emissions Reduction Incentive Grants New purchases and leases Replacements Repowers Retrofit and add-on devices Infrastructure Rebate Grants Replacements Repowers

Air Quality Division TERP (8377) Page 19 Grant Program Source Categories Emissions Reduction Incentive Grants On-road Non-road Marine vessels Locomotives Stationary equipment Rebate Grants On-road diesel Non-road diesel

Air Quality Division TERP (8377) Page 20 Caution Consultants may be available to assist with the application process –The TCEQ has no relationship with these consultants and it is up to you if you want to use them –Consultant fees may not be paid for from the grant, nor can the cost basis for determining the total costs include consultant fees, even if those fees are to be paid by the dealer

Air Quality Division TERP (8377) Page 21 Caution Do not overstate the annual usage or the percentage of use in the eligible counties –You will be obligated to return grant funds if you do not meet the annual usage commitment

Air Quality Division TERP (8377) Page 22 Contract Emissions Reduction Incentive Grants – a contract will be sent to the selected applicant to sign and return –a Notice to Proceed will be sent to the applicant with the executed contract Rebate Grants –the application is the contract form (once approved and signed by TCEQ, it is an executed contract)

Air Quality Division TERP (8377) Page 23 Reimbursement Grant funds are paid to reimburse expenses incurred by the grant recipient Reimbursements are made after the purchase Grant recipients may assign the grant payment to the dealer or financing entity Reimbursement forms are provided with the contract

Air Quality Division TERP (8377) Page 24 Disposition Salvage Only $1,000 default amount for on-road and non-road 90 days payment from TCEQ

Air Quality Division TERP (8377) Page 25 Usage Commitment For all grants, the recipient is obligated under the contract to use the grant- funded equipment for at least 75% of the annual usage (miles, hours, or fuel) within the eligible counties

Air Quality Division TERP (8377) Page 26 Reporting All recipients must track and report on the use and location of all grant-funded equipment Reports will be due semi-annually over the activity life

Air Quality Division TERP (8377) Page 27 TCEQ Monitoring/Enforcement In addition to reviewing the usage reports, TCEQ will conduct onsite visits to view the equipment and to ensure that usage records are being maintained Failure to report or to meet the usage commitments may result in the recipient having to return a share or all of the grant funds

Air Quality Division TERP (8377) Page 28 Required Information for the Application Baseline Engine (currently operating) –Year –Engine Family Code New Engine –Year –Engine Family Code Example: 6CPXH0928EBK

Air Quality Division TERP (8377) Page 29 Rebate Grants Application

Air Quality Division TERP (8377) Page 30 Emissions Reduction Incentive Grants Application

Air Quality Division TERP (8377) Page 31 Application Information Calculations to complete forms –Calculator at –Technical Supplements

Air Quality Division TERP (8377) Page 32 Contacts Web Site: Toll Free: TERP (8377)