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HomeMy WebLinkAbout5/6/2009 - STAFF REPORTS - 2.H. iy ti V � w R�,P City Council Staff Report Date: May 6, 2009 CONSENT CALENDAR Subject: SUPPORT OF LEGISLATIVE EFFORTS BY THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (AQMD) TO OVERTURN THE STATE SUPERIOR COURT RULING RELATIVE TO ISSUANCE OF AIR QUALITY PERMITS From: David H. Ready, City Manager Initiated by: Public Works and Engineering Department SUMMARY Approval of this Resolution will support efforts by AQMD to approve State legislation to add sections to the Public Resources Code relating to air pollution and support and endorse any and all efforts of the AQMD to resume issuing air quality permits and overturn the State Superior Court's decision. RECOMMENDATION: ADOPT RESOLUTION NO. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUPPORTING LEGISLATIVE EFFORTS BY THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT TO OVERTURN THE STATE SUPERIOR COURT RULING RELATIVE TO ISSUANCE OF AIR QUALITY PERMITS" STAFF ANALYSIS: As a result of a recent court ruling, the South Coast Air Quality Management District (AQMD) is suspending operation of its internal bank of emission reduction credits (ERCs) also known as offset credits. They are advising the public relative to significant changes to be made to this permitting program. As a result of the court decision, no essential public service projects can be permitted; no other local government and business permits can be issued. The only remaining option for local government and business is to purchase emission reduction credits (ERCs) in the open market which are expensive and potentially unaffordable. ITEM NO. 2 . City Council Staff Report May 6, 2009- Page 2 Support of AQMD Permit Issuance The court decision impacts all permit applicants intending to obtain credits for essential public services such as hospitals, schools, police stations, landfills, or sewage treatment plants. Businesses are impacted, as well, including auto body shops, service stations, printers, and other medium and large businesses. This item was presented to CVAG's Energy and Environmental Resources Committee on March 12th and the Committee requested that the presentation be done to the Executive Committee. The Executive Committee approved a similar Resolution on March 30, 2009- The AQMD is working on proposed legislation to address the court ruling. FISCAL IMPACT: Approval of this Resolution has no fiscal impact on City funds. SUBMITTED: David J. Barakian Thomas J. WiJ9on Director of Public Works/City Engineer Assistant City Manager r David H. Ready, City M r ATTACHMENTS: 1. Resolution 2. Public Resources Code Amendment RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA SUPPORTING LEGISLATIVE EFFORTS BY THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (AQMD) TO OVERTURN THE STATE SUPERIOR COURT RULING RELATIVE TO ISSUANCE OF AIR QUALITY PERMITS. WHEREAS, the South Coast Air Quality Management District, (AQMD), is the agency responsible for attaining state and federal clean air standards in the South Coast Air Basin; and WHEREAS, the Riverside County portion of the Salton Sea Desert Air Basin that includes the Coachella Valley is under the AQMD jurisdiction under the provisions of the Health and Safety Code Section 40413; and WHEREAS, the AQMD, CVAG and the City of Palm Springs, have a demonstrated history of implementing of PM10 control strategies; and collaborating on other air quality efforts benefitting the residents of Eastern Riverside County and the Coachella Valley communities; and WHEREAS, CVAG and its member agencies, under the guidance of the AQMD, has implemented and maintained a Coachella Valley State Implementation Plan (CVSIP) addressing air quality mitigation efforts for maintenance of the federal PM-10 air quality standard; and WHEREAS, due to a recent State Superior Court decision, the AQMD has suspended operations of its internal bank of emission reduction credits (ERCs) also known as offset credits; and WHEREAS, operation of the internal bank is needed for the AQMD to provide credits to permit applicants from the Rule 1309.1 Priority Reserve, and for AQMD to allow permit applicants exemptions from offset requirements specified in Rule 1304; and WHEREAS this court action also impacts thousands of previously issued permits in which the AQMD cannot ensure the long-term validity of permits issued on or after August 3, 2007, or possibly on or after September 8, 2006; and WHEREAS, without AQMD's bank of offset credits, no essential public service projects can be permitted; no other local government and business permits can be issued; including hospitals, schools, police stations, landfills, sewage treatment plants, renewable energy projects; and WHEREAS, any facilities, regardless of size, are also affected including auto body shops, service stations, printers, local government and other medium and large businesses; and l Resolution No. Page 2 WHEREAS, without legal remedy, the only remaining option for local government and business is to purchase ERCs in Open Market which are extremely limited, expensive and potentially unaffordable; and WHEREAS, this court action impacts businesses in the City of Palm Springs; thereby resulting in a direct severe economic impact; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The City Council hereby declares and resolves its support and endorses any and all efforts of the South Coast Air Quality Management District to resume issuing permits and overturn the State Superior Court's decision. Section 2. The City Council further resolves its support of a legislative amendment to add sections 21080(b)(16) and 21080(b)(17) to the Public Resources Code relating to air pollution to be sponsored by Senator Rod Wright representing Senate District 25 including Los Angeles, Long Beach, and Inglewood. ADOPTED this 6th day of May, 2009. ATTEST: David H. Ready, City Manager James Thompson, City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. _ is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on May 6, 2009, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California Public Resources Code Amendment An act to add sections 21080(b)(1 G) and 21080(b)(17) of the Public Resources Code, relating to air pollution, and declaring the urgency thereof, to take effect immediately. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. (a) The Legislature finds and declares all of the following: (1) Due to a state court decision under the California Envirotnnental Quality Act, the South Coast Air Quality Management District is unable to issue over a thousand pending permits which rely on the District's internal offset bank to offset their emissions. These permits are either exempt from offsets under District rules, or eligible to receive credits frorn the District's "Priority Reserve," including essential public services. (2) The state court order also required the District to set aside several thousand permits which were issued in reliance on the District's internal offsets bank during the pendency of the litigation- (3) Among the projects that are on hold, or must be set aside, are those such as projects for equipment replacement or relocation, projects which would reduce emissions, essential public services such as hospitals, schools, landfills, and sewage treatment plants, renewable energy projects, and small sources, including small businesses that are unable to locate or afford credits on the open market. As time goes on, many other similar I L projects will likely have to be placed on hold, or will have to withdraw their applications or not submit any applications to the District. (4) if prompt legislative action is not taken to correct this situation, there will be significant harm to the economy and loss of jobs, and new jobs will not be created. (5) In addition, due to the state court decision, the District is unable to issue credits from its Priority Reserve to thermal power plants that are necessary to meet the current and .future projected electricity needs of the region and to prevent blackouts during peak demand period. (6) The District also needs to be able to issue permits to allow existing power plants to eliminate reliance on once-through cooling, and to allow the existing aged higher emitting and less efficient power plants to be replaced with new cleaner and more efficient power plants. (7) The District also needs to be able to issue permits to provide necessary peaking power to support increased reliance on renewable energy as will be required by A1332 and other state efforts to reduce greenhouse gases. (b) It is therefore necessary that legislation be enacted to allow the District to resurne issuing pen-nits and to overturn the state court decision, thereby vacating the order to set aside permits that have already been issued, without, however, exempting the pen-nits themselves from CEQA. 2 SECTION 2. Section 21080 of the Public Resources Code is amended to add paragraphs 21080(b)(16) and 21080(b)(17), to read: 21080(b)(16), No California Environmental Quality Act (CEQA) analysis shall be required of the adoption or implementation of South Coast Air Quality Management District (District)rules establishing offset exemptions, providing Priority Reserve credits, or creating or tracking the credits used for offset exemptions or Priority Reserve projects, if discretionary projects that use such exemptions or credits are subject to CEQA (or exempt therefrom) and all the requirements of this paragraph are satisfied. This paragraph applies only to offset exemptions used under District Rule 1304, as amended June 14, 1996, Priority Reserve Credits pursuant to District Rule 1309-1, as amended May 3, 2002, and implementation of District Rule 1315, as adopted September 6, 2006 and re- adopted August 3, 2007. This paragraph applies only if all of the following requirements are satisfied: (i) District rules require use of the best available control technology, as defined in Health & Safety Code Section 40405, and air quality modeling to assure the source will not cause a violation, or make significantly worse an existing violation of any ambient air quality standards, as defined in District Rule 1303, (unless exempt fiom modeling under District Rule 1304 as amended June 14, 1996) for each new , relocated or modified source with an emissions increase of one pound per day or greater of any air contaminant; (ii) District rules prohibit the construction of any new, relocated, or modified permit unit if the emissions of any toxic air contaminant, as listed by the District Board, exceed a 3 cumulative increase in maximum individual cancer risk at any receptor location of(A) greater than one in one million, if the pennit unit is constructed without best available control technology for toxic air contaminants, or (13) greater than ten in one million, if the permit unit is constructed with best available control technology for toxic air contaminants; or if the permit unit exceeds a chronic or acute non-cancer health effect hazard index of 1.0; (iii) The District accounts for the use of offset credits pursuant to this paragraph as part of its state implementation plan submissions, and demonstrates that such use will not interfere with attainment or maintenance of ambient air quality standards, and (iv) District Rules 1304, 1309.1, and 1315, as described in this paragraph, have been submitted to the U.S. Envirommental Protection Agency(EPA), and have not been disapproved by EPA. 21080(b)(17). If a thermal power plant is subject to California Environmental Quality Act(CEQA) and the State Energy Resources Conservation and Development Commission (California Energy Commission), or other public agency will act as lead agency for the plant, no additional CEQA analysis is required of the creation or use of Priority Reserve offset credits by such power plants pursuant to South Coast Air Quality Management District(District) Mule 1309.1, as amended August 3, 2007, if all of the following requirements are satisfied: (i) District rules include the requirements and prohibitions specified in Section 21080(b)(I6)(i) and(ii); 4 E, (ii) The power plant emissions comply with the requirements for best available control technology, air quality modeling impacts, toxics impacts, and emissions levels as specified in District Rule 1309.1 as aznended August 3, 2007; (iii) The power plant has entered into long-term contracts with Southern California Edison Company, San Diego Gas and Electric Company, or the state of California to provide electricity in Southern California or is a municipal-owned power plant designed and constructed not to exceed its native demand load projections, or otherwise, as specified in District Rule 1309.1; (iv) The District accounts for the power plants' use of Priority Reserve offset credits pursuant to this paragraph as part of its state implementation plan submissions, and demonstrates that such use will not interfere with attainment or maintenance of ambient air quality standards; (v) Rule 1309.1 as amended August 3, 2007, and Rule 1315, as adopted September 6, 2006, and re-adopted August 3, 2007, have been submitted to the U.S. Environmental Protection Agency(EPA) and have not been disapproved by EPA; (vi)The California Energy Conunission has conducted a needs assessment which has detennined that the thermal power plant is necessary to meet future energy needs in Southern California or the District, and has determined it is necessary for the plant to be located in the District; (vii) The power plant pays a mitigation fee for Priority Reserve offset credits obtained which shall be at minimum the amount set Forth in District Rule 1309.1 as amended August 3, 2007, The District Board may by rule amendment, after a public hearing, increase such fees without affecting the applicability of section 21080(b)(17). The 5 y ,� District shall, to the extent technically and economically feasible, use such mitigation fees to mitigate emissions of the relevant pollutant or its precursors in the area impacted by emissions from the power plant, with a minimum of one third to be used for installation of renewable or alternative sources of energy, except that up to 10%may be used by the District for administration of the mitigation program. The California Energy Commission shall perform a needs assessment considering the issues specified in clause (vi) for each thermal power plant proposed to be located in the District, whether or not the plant is required to obtain certification from the Commission. SEC_ 3 Due to unique circumstances concerning the South Coast Air Quality Management District, the Legislature finds and declares that a general statute cannot be made applicable witbin the meaning of Section 16 of Article IV of the California Constitution. SEC. 4 This act is an urgency statute necessary for the immediate preservation of the public peace, health or safety within the meaning of Section 8 of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are.- Due to a state court CEQA decision, the South Coast Air Quality Management District is unable to issue over a thousand pending permits which arc either exempt from offset 6 requirements or qualified to use offset credits from the District's "Priority Reserve" and is required to set aside thousands of permits already issued. 7 7t