1. Proposed Amendments to Rule 1110.2 – Emissions from Gaseous- and Liquid- Fueled Internal Combustion Engines Presented at Southern California Gas Co. Seminar “Managing Air Quality Compliance and Audits” March 22, 2006

2. Engine Compliance Problems  Unannounced emission tests show high non-compliance rate  127 tests during 2001-2004 – old engines subject to Rule 1110.2 and new engines subject to more stringent BACT  Engines driving compressors, pumps and electrical generators  Engines by nine engine manufacturers or packagers

3. 2001-2004 AQMD Compliance Testing of I.C. Engines NOx CO % Non-Compliance with Permit Limits 63.8% Rule 1110.2 Limits, ppm* 36-45 2,000 Average ppm* 72 732 Maximum ppm* 85012,500 * All dry, by volume, and corrected to 15% O2

4. Tested NOx versus Permit Limit for Non-Compliant Engines

5. Reasons for High Rate of Non- Compliance  Inadequate periodic monitoring  Source tests skipped in many cases  Source tests not representative of normal compliance status  Inadequate air/fuel ratio control systems on rich-burn engines: Many have inadequate self-diagnostics Many have inadequate self-diagnostics Some problems cannot be self-diagnosed (e.g., O2 sensor drift) Some problems cannot be self-diagnosed (e.g., O2 sensor drift)

6. CARB 2001 RACT/BARCT Determination  Inspection and monitoring recommendations are more stringent than Rule 1110.2 Periodic checking and recording of engine and emission control system parameters Periodic checking and recording of engine and emission control system parameters Periodic emission checks using portable analyzer in addition to periodic source testing Periodic emission checks using portable analyzer in addition to periodic source testing

7. Changes Needed in Rule 1110.2  Lower CEMS thresholds  CO CEMS in addition to NOx CEMS  Increased frequency of source tests  Reform source test procedures “As-Is” testing (no pre-test) “As-Is” testing (no pre-test) AQMD-approved protocol AQMD-approved protocol Test report submitted to AQMD Test report submitted to AQMD

8. Changes Needed in Rule 1110.2 (Continued)  Inspection and Maintenance Plan similar to CARB RACT/BARCT Continuous monitoring and recording of engine and emission control system parameters Continuous monitoring and recording of engine and emission control system parameters Weekly inspections of data Weekly inspections of data  Portable analyzer emission checks  Better recordkeeping  Reporting of non-compliance Rule 430 protection if breakdown Rule 430 protection if breakdown

9. ICE Working Group Field Program (Rich-Burn Engines)  Task 1 – Weekly emission checks on six engines to assess capabilities of existing AFRCs when properly maintained  Task 2 – Assessment, using CEMS monitoring, of four modern AFRCs  Task 3 – Evaluation of low-cost analyzers for automatic semi-continuous emissions checking (partially funded by AQMD)

10. Other Rule 1110.2 Changes Being Considered  Reduction of VOC and CO emission limits  Eliminate efficiency correction because it is difficult to determine and often ignored  Require that new engines to be used for distributed generation (DG) meet CARB 2007 DG emission standards

11. Emission Comparison

12. CARB 2007 DG Standards lb/MW-hrEquivalent ppm @ 15% O2*** NOx.07 * 1.6-4.0 CO0.1 * 3.7-9.3 VOC.02 * 1.3-3.2 PMClean Fuel ** *CHP credit of 1 MW-hr per 3.4 MMBtu of waste heat recovered ** Natural gas or equiv *** HHV efficiency: 28%-70%

13. Process and Estimated Schedule  Public Workshop – June 2006  Public Hearing (AQMD Board) – 9/8/06  Effective Date of Amended Rule: 9/8/06 Some of the new requirements will have later compliance deadlines. Some of the new requirements will have later compliance deadlines.