1. California Desert Air Working Group Conference Big Bear Lake November 2-3, 2011 1 Mohsen Nazemi, P.E. Deputy Executive Officer South Coast Air Quality Management District

2. South Coast Air Quality Management District (SCAQMD) ● Local Air Pollution Control District in Southern California (All of Orange & Non-Desert Portions of LA, Riverside & San Bernardino Counties) ● Population of over 17 million (about half of State’s population) ● Covers 10,743 sq. miles ● Worst air quality in the nation (Ozone & PM 2.5) ● Receives and Process about 10,000 permits annually ● Regulates over 28,000 stationary sources

4. Ozone Exposures* 8-Hour NAAQS = 75 ppb Nationwide California * Population-weighted incremental exposure to ozone above the 8-Hour NAAQS (> 75 ppb), based on 2008-2010 design values

5. PM2.5 Exposure* Annual Average NAAQS = 15 µg/m3 Nationwide California * Population-weighted incremental exposure to PM2.5 above the NAAQS annual standard, based on 2007-2009 data

6. Types of Energy Production Projects Conventional Natural Gas – Fired Power Plants Renewable Electricity Generation / Solar & Wind Renewable Bioenergy / Biofuels Energy Projects 6

7. 7 Once-Through-Cooling Generating Units in SCAQMD (7,615 MWs) OperatorFacilityUnits Total MW OTC Replacement date Status AESAlamitosBoilers 1-619502020 Pending AESHuntington Beach Boilers 1-48802020 Units 3 & 4 to be shutdown. Units 1 & 2 Pending AESRedondo Beach Boilers 5-813102020 Pending NRGEl SegundoBoilers 3-46702015 Repower permit issued for Boilers 1, 2, & 3 with CCGT - dry cooling by 2013 LADWPHaynesBoilers 1,2,5,6 Turbines 9,10 16232019 Repower permit issued for Boilers 5 & 6 with SCGT - dry cooling by 2013 LADWPHarborTurbines 1,23642015Pending LADWPScattergoodBoilers 1-38182020 LADWP will repower Boiler 3 by 2015

8. 8 List of Recently Approved or Pending Fossil Fuel-Fired Power Plants in SCAQMD Project Size (MW)Location SCAQMD Permit CEC LicenseOffsets Existing Repower & OTC NRG El Segundo (PPA)573El SegundoIssued SB 827 (R-1304) LADWP Haynes (Municipality)616Long BeachIssuedN/ASB 827 (R-1304) Existing Expansions City of Riverside (Municipality)99RiversideIssuedSPPEPurchased ERCs New & Repower CPV Sentinel (PPA)850Desert Hot SpringsIssued AB1318 City of Anaheim (Municipality)200AnaheimIssued Purchased ERCs Walnut Creek/ Edison Mission Energy/AES (PPA)500 City of Industry / Huntington BeachIssued SB 827 (R-1304) & ERCs

9. 9 List of Pending or Denied/ Cancelled Power Plants in SCAQMD ProjectSize (MW)Location SCAQMD Permit CEC LicenseOffsets Pending Watson Cogen (BP Refinery)85CarsonPending SB 827 (R-1304) VOC ERC Palen Solar Millennium Solar Power500Desert CenterPendingIssued SB 827 (R-1304) VOC ERC Denied or Cancelled City of Vernon (Municipality)943VernonDeniedWithdrawnN/A AES Highgrove300Grand TerraceDeniedTerminatedN/A Valle Del Sol/ Edison Mission Energy500RomolandCancelledSuspensionN/A Reliant San Gabriel Energy656 Rancho CucamongaCancelledSuspensionN/A

10. Types of Bioenergy / Biofuels Projects in SCAQMD Bioenergy Projects qualify for Renewable Energy Credits, and include the following in South Coast – Landfill Gas to Energy – POTW Digester Gas to Energy – Other Bioenergy / Biofuels Energy Projects, such as – Dairy/Food Waste Anaerobic Digestion – Biosolid Processing or Thermal Conversion – Post Recycling Municipal Solid Waste (MSW) Thermal Conversion – Green/Wood Waste Thermal Conversion – Biodiesel Production 10

11. Existing Conventional Bioenergy Projects in SCAQMD Landfill or Digester Gas Fired Power Generation using ICEs, gas turbines or boilers 17 landfill gas and 9 digester gas project sites Mass Burn Waste-to-Energy Facilities SERRF (Long Beach) and Commerce (LACSD) Biomass-to-Energy Facility Colmac Energy (on Tribal land) Biodiesel Production 4 permitted facilities 11

12. Recent Bioenergy Projects in SCAQMD Landfill/Digester Gas Projects (R-1309.1) Name/ LocationFeed/ ProductBrief DescriptionProject Status Ameresco Chiquita Energy/ Valencia Landfill Gas/ 9.2 MW Electricity Regenerative gas treatment and two Solar M50 gas turbines Operation began in 2010 LACSD/ Calabasas Landfill Landfill Gas/13.8 MW electricity Regenerative gas treatment and three Solar M50 gas turbines Operation began in 2010 Ridgewood Power/ Brea Olinda Landfill* Landfill Gas/ 30 MW Electricity Regenerative gas treatment and combined cycle w/SCR P/C 2010; Under construction Bowerman Power/ FBR Landfill, Irvine Landfill Gas/ 23 MW Electricity Regenerative gas treatment and five Solar M50 gas turbines P/C issued in 2010 LA County Sanitation District / Palos Verdes Landfill Gas/ 3 MW Electricity Fuel Cell and eight Micro Turbines P /C issued in 2010 Not being pursued Sunshine Gas Producers/ Sylmar Landfill Gas/ 23 MW Electricity Regenerative gas treatment and five Solar M50 gas turbines Proposed permit pending LA City Hyperion Treatment Plant Digester Gas/ 39 MWe and steam Combined cycle cogen with optional pipeline quality gas as alternative Applications under Review, CEQA NOP stages POTWs in Riverside,* Moreno Valley, Perris and Rialto Digester Gas/ 0.6 – 1.2 MW each Gas conditioning and modular fuel cell units at each of the 4 sites Operational 2008, 2009; three units U/C 12

13. Recent Bioenergy Projects in SCAQMD MSW / Biomass Projects (R-1304) Name/ LocationFeed/ ProductBrief DescriptionProject Status IES/ Romoland30 tpd MSW/ steam Experimental pyrolytic system w/thermal oxidizer and HRSG Operated in 06- 08, dismantled in 2010 Biosolid Reduction Technologies (BRT)/ Carson 80 lb/h biosolid / diesel and oxygenate Experimental pyrolytic gasification, reforming and F- T liquefaction Operations began in 2009 Enertech/ Rialto221 dry tpd biosolid/ carbonized fuel “SlurryCarb” process w/high pressure & temp reactor, dewatering, and drying Operation began in 2009 Rentech/ Rialto2,350 dry tpd biomass/ 35 MW and jet fuel Green and wood waste gasification, gas cleaning, F-T liquefaction and combined cycle power plant Applications cancelled in June 2011 for reconfiguration 13

14. Recent Bioenergy Projects in SCAQMD MSW / Biomass Projects (R-1304) (cont’d) Name/ LocationFeed/ ProductBrief DescriptionProject Status Biosoils/ Colton222 dry tpd biosolid/ 8 MW electricity Biosolid dewatering, fluidized bed combustion and landfill gas fired power plant Applications under evaluation CR&R/ Perris200 tpd organic MSW/ pipeline gas Anaerobic digestion of food & organic waste, gas cleaning, CO2 removal and biofilter Pre-application consultation, draft CEQA (MND) circulated Green Conversion Systems/ Los Angeles 1,100 tpd MSW/ 29 MWe and byproducts Mass burn grate firing, steam generation, advanced gas cleaning and ash treatment Pre-application consultation IEUA-Environ Strategy Lease/ Chino 705 wet tpd food and dairy waste Converting existing manure anaerobic digestion system to process food and dairy waste Under reconfiguration 14

15. Renewable Bioenergy/Biofuels Key Permitting Issues No Reference Facilities in California; Most Facilities in Europe and Japan Limited or No Emissions Data for Criteria, Toxics & GHG Pollutants. No California Regulatory Experience. BACT must be determined on a case-by-case basis, as each facility is somewhat unique. Offsets (Provided by Applicant or AQMD) EPA’s GHG Permitting Biomass (3-year Deferral) Local Opposition by Community/Enviro Groups 15

16. 16 When are Emission Offsets Required Under Federal, State & Local NSR Laws? Emission Offsets are required for permitting of: New Facilities & Relocations Existing Facility Modifications/Expansions by: Installation of New Equipment Replacement of Existing Equipment Modification and/or modernization of existing equipment However, under SCAQMD’s NSR Rules certain sources are exempt from providing their own offsets, but SCAQMD still provides the required offsets to comply with Federal & State laws. (SB 827 or Rule 1315)

17. 17 Sources Exempt from Offsets under SCAQMD’s NSR Rules Rule 1309.1 - Priority Reserve –Essential Public Service Sewage Treatment and Landfill facilities; Prison & Police facilities; Fire Fighting facilities; Schools; Hospitals. –Innovative Technology/ Research Operations –Limited Power Plants (CY2000-03 with Mitigation Fees) Rule 1304 - Exemptions –Facility Modernization (Replacement/ Modification/ Relocations/ Repowering for utility boilers) –Air Pollution Control Strategy/ Regulatory Compliance –Emergency Equipment/ Small Sources –State Programs (Portable Equipment/ Resource Recovery & Energy Conservation)

18. State Emission Offset Exemptions Health and Safety Code Section 42314 Applies to Resource Recovery Projects, < 50 MW (80 MW for municipal waste*) Good faith effort to secure all reasonably available ERCs Only if the district has established growth allowance Health and Safety Code Section 42314.1 Applies to Projects that burn municipal waste*, landfill gas, or digester gas, < 50 MW (80 MW, with additional conditions) Good faith effort to secure all available ERCs *Although not defined in state law, based on various part of H&SC (e.g., 41516), municipal waste may include MSW, greenwaste and sludge, etc. 18

19. IES Tire Pyrolysis in Tribal Land (Under Construction) 19 Pyrolytic Converter Thermal Oxidizer APC System

20. 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

21. 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 21