1. South Coast AQMD’s Regulatory Updates California Desert Air Working Group 2012 Conference November 7-8, 2012 La Quinta, CA 1 Mohsen Nazemi, P.E. Deputy Executive Officer South Coast Air Quality Management District

2. What is South Coast Air Quality Management District? Local Air Pollution Control Agency in Southern California (All of Orange & Non-Desert Portions of LA, Riverside & San Bernardino Counties) Population of 17 million (about half of State’s population) Worst air quality in the nation (Ozone & PM 2.5) Receives and Processes about 10,000 permit applications annually Regulates over 27,000 stationary sources

3. SCAQMD Regulatory Update 2012 Highlights SCAQMD/ Cabazon Tribe Agreements First in the nation Sampling, Monitoring and Enforcement Agreement to enforce local rules in Tribal Land Hydraulic Fracking Governing Board Study Session (April 12, 2012) SCAQMD Conference (September 18, 2012) Governing Board Report on Rule Development (October 5, 2012) 3

4. SCAQMD Regulatory Update 2012 Highlights Winter “Check Before You Burn” Program Rule 445 – Wood Burning Devices (November through February) Clean Communities Plan Activities Pilot Projects in cities of San Bernardino and Boyle Heights 2012 AQMP CAPCOA Greenhouse Gas Offset Exchange 4

5. SCAQMD Regulatory Update 2012 Highlights Staff Recommendations to create emission reductions for Offset Exemptions to Repowering Power Plants Salton Sea Odor Incident Implementation of Powering the Future Energy Policy 5

6. SCAQMD Regulatory Update Power Plants CPV Sentinel 8 x 100 MW (800 MWs) Simple Cycle Gas Turbines Located in Desert Hot Springs Expected Start Date: December 2012 Passed Legislation (AB 1318) for Offsets $53 Million Mitigation Fees to be used for emission reduction projects in Coachella Valley RFPs released Projects evaluated at Administrative Committee meeting on October 16, 2012 Contract Awards at future Governing Board meeting 6

7. CPV Sentinel, Palm Springs 7

8. 8 Regulatory Update Power Plants Walnut Creek Project 5 x 100 MW (500 MWs) Simple Cycle Gas Turbines Edison Mission Energy, located in City of Industry Expected Startup in December 2012 Purchased and proposed to retire two old boilers from AES at Huntington Beach Generation Station for offsets (Units 3 & 4)

9. Shutdown of HB Units 3 & 4 Main Supply Line Cut/ Double Flanged 9

10. Shutdown of HB Units 3 & 4 Cut a 3’X4’ Section of Boiler Walls on Both Ends 10

11. San Onofre Nuclear Generating Stations (SONGS) Shutdown In January 2012, SCE found small leak of radioactive steam in SONGS Unit 3 SONGS Unit 2 already offline for plant maintenance Total of 2,200 MWs lost - enough for 1.4 million homes. CAISO has projected electricity shortfalls in San Diego, So. Orange and parts of LA Counties, during hot weather

12. Restart of Huntington Beach Units 3 & 4 In March 2012, CAISO requested that HB Units 3 & 4 be brought back online to avoid blackouts in San Diego and So. Orange Counties in hot weather while SONGS is shutdown 12

13. San Onofre Nuclear Generating Station News 13

14. San Onofre Nuclear Generating Station News 14

15. Location Matters - Walnut Creek, HB and San Onofre 15

16. Walnut Creek 16

17. Converting Existing Synchronous Generators into Synchronous Condensers at Huntington Beach July 2012 EME/AES presented CEC discussion to convert the synchronous generators at Huntington Beach units 3 and 4 into synchronous condensers. Operation of synchronous condensers will increase grid reliability. Increased grid reliability is of current concern due to the non-operational status of SONGS. 17

18. Salton Sea Odor Incident

19. Dispersion Modeling Predictions vs. Observations

20. Historic odor factors – Salton Sea Higher water temperatures Eutrophication from agricultural runoff Algal bloom & bacterial growth Anaerobic O 2 depletion/ mass asphyxiation Algal bloom (2005) Fish kill (2007) Cattle feed lot (80,000 head)

21. NOx Reductions Needed to Meet Federal Ozone Standards 1. Preliminary emissions estimates based on data from 2007 AQMP, updated where more recent data available: CARB 2010 projections for trucks and off-road equipment; International Maritime Organization standards for vessels; EPA 2008 rule for locomotives; Vessels is average of high and low emissions estimates based on varying deployment assumptions for IMO vessels and range of ports’ cargo forecasts. 2. Source: 2007 AQMP; analysis for 80 ppb fed standard. 3. Preliminary analysis for 75 ppb fed standard

23. Steps for Adopting Clean Energy Passenger Transport o Clean energy vehicles for public fleets (electric, hybrid, fuel cell’ etc.) o Incentives for infrastructures o Extend electric rail systems Goods Movement o Zero-emission container movement systems from ports to railyards o Electric or other zero- emission cargo handling equipment such as cranes and yardtrucks at railyards, ports etc. o Lanes for use by electric or other clean energy trucks on key corridors o Electrify rail lines Land Use o Growth near clean transit and freight system hubs and corridors o Incentives for zero-emission charging and fueling infrastructure Adopt Policies to Encourage Industry Action o Electric motors and other zero-emission equipment where feasible o Fuels with reduced air pollution impacts (e.g. natural gas) where electrification or other zero emission technology is not feasible Construction Equipment o Hybrid electric, hydraulic hybrid and other clean technologies Encourage Actions for Residences o “Greening” of homes with strategies such as solar roof panels, and energy conservation and efficiency strategies o Plug-in vehicle charging capability o Electric water and space heaters Electricity Generation and Storage o Renewable power generation and storage o Incentives for zero-emission distributed electrical generation (e.g. fuel cells, photovoltaics) Ships o Incentives or requirements for the lowest polluting ships to call on Southern California ports o Shore-power, or equivalent, for ships at berth beyond regulatory requirements Research o Research to advance and demonstrate electric drive, hybrid electric, hydrogen and other zero and near-zero emission technologies Funding o Federal and other funding sources for transportation infrastructure (e.g. dedicated truck lanes, rail electrification) o Partnerships to receive competitive grants 23

24. 24 AQMD’s Energy Policy

25. AQMD 10 Point Energy Policy 1. Promote zero- or near-zero emission technologies 2. Encourage “demand-side” energy management 3. Encourage “distributed generation,” including “renewables,” as well as storage of electricity. 4. Complement additional fossil-fueled power plants with intermittent renewable energy sources such as wind and solar while minimizing impacts from these plants. 5. Public Education and Outreach 6. Develop partnerships with state universities and colleges for zero and near zero emission technologies. 7. Seek accelerated deployment of clean, efficient vehicle technologies vehicles by studying potential funding and incentive programs, standardizing electric vehicle charging systems and develop a more cost-effective electricity rate for charging hybrid and electric vehicles. 8. Develop and demonstrate the use of biogas and other energy sources from biomass, such as from landfills and wastewater treatment plants. 9. Develop partnership with the California Energy Commission (CEC) and Public Utilities Commission (PUC) on energy policy and regulations. 10. Track and report progress in energy usage and emission reductions.