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BOARD MEETING DATE: October 7, 2005
AGENDA NO. 5

PROPOSAL:

Amend Contract to Provide Maintenance Services for Hydrogen Fueling Stations for "Five Cities" Project Participants

SYNOPSIS:

On August 6 and December 3, 2004, the Board authorized execution of contracts to construct hydrogen fueling stations in five cities to support the AQMD’s "Five Cities" Project. The fueling stations will support a fleet of five electric hybrid vehicles at each site that have been converted to hydrogen fuel. This action is to fund maintenance services for three of the stations and leases of mobile fuelers for two of the stations for the five-year project term in an additional amount not to exceed $903,332 from the Clean Fuels Fund.

COMMITTEE:

Technology, September 23, 2005, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to amend the "Five Cities" contract with Air Products and Chemicals, Inc. to provide maintenance services for the three electrolyzer hydrogen fueling stations and additional lease and operating costs for the two mobile fuelers in the "Five Cities" Program, in an amount not to exceed $903,332 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer


Background

The AQMP has identified the use of alternative clean fuels in mobile sources as a key air quality attainment strategy. Hydrogen fuel cell vehicles are near zero-emission vehicles but currently have limited availability, high costs, and short warranty periods. Hydrogen-fueled internal combustion engine (ICE) vehicles show promise as a bridge technology between fuel cell vehicles and conventional vehicles and have the potential to significantly reduce VOC, NOx, CO and air toxic emissions as well as greenhouse gas emissions. Furthermore, hydrogen-fueled ICE vehicles will utilize the developing hydrogen infrastructure initiated by the AQMD and help to expedite the expansion of hydrogen infrastructure across the South Coast Air Basin. As part of this process, the Board approved RFP #P2004-01 to provide hydrogen ICE vehicles and fueling stations at five cities in the South Coast Air Basin. The five cities that will participate in this project are Burbank, Ontario, Riverside, Santa Ana, and Santa Monica.

Proposal

Air Products and Chemicals, Inc. (Air Products), partnering with Proton Energy, submitted a proposal with multiple options for providing hydrogen fueling [including electrolyzers powered by renewable photovoltaics, electrolyzers powered by grid electricity, delivered liquid hydrogen, and mobile refuelers with compressed hydrogen]. Based on the technical evaluation by the RFP panel and input from the cities, the Board approved installing electrolyzers at the cities of Santa Monica, Riverside and Burbank and implementing mobile fuelers at the cities of Ontario and Santa Ana. The mobile fuelers will be leased.

A summary of the electrolyzer maintenance and mobile fueler lease and operational costs are summarized in the following table. The first year of lease and operational costs for the mobile fuelers have previously been approved by the Board and were included in the original contract.
 

City Technology Maintenance (M)/Lease-Service(L) AQMD Cost

Santa Monica

Electrolyzer

$1500/month x 60 months + $20,000 parts + $40,000
Electrolyzer for 60 months (M)

$150,000

Riverside

Electrolyzer

$1500/month x 60 months + $20,000 parts + $40,000
Electrolyzer for 60 months (M)

$150,000

Burbank

Electrolyzer

$1500/month x 60 months + $20,000 parts + $40,000
Electrolyzer for 60 months (M)

$150,000

Santa Ana

Mobile Fueler

$4000/month x 48 months + $1000/refill x 34.66 refills
over 48 months (L)*

$226,666

Ontario

Mobile Fueler

$4000/month x 48 months + $1000/refill x 34.66 refills
over 48 months (L)*

$226,666

Total

   

$903,332

*Lease and service costs for the mobile fuelers for the first year as well as fuel costs were
 included in the original contract.

The "Five Cities" Program is a hydrogen-fueled vehicle and fueling station technologies demonstration at five cities for a period of five years. In order to ensure that the program is effective and meets the established goals of the program, the fueling equipment must be fully operational and available on-site for the entire demonstration. This additional funding will ensure that the electrolyzer systems will be fully operational and that the mobile fuelers will be on-site for the entire five years.

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards. This project will further develop technology for light-duty alternative fuel vehicles, and is expected to reduce NOx, CO and PM emissions to SULEV Standards. The projects will demonstrate that hydrogen powered vehicles equipped with internal combustion engines are a commercially viable bridge to hydrogen fuel cells, as well as utilize the emerging hydrogen fueling station infrastructure. The project fits within the charter of the AQMD to reduce criteria pollutants and offers the benefit of replacing oil-derived gasoline with hydrogen. Furthermore, the deployment of hydrogen stations advances the California Hydrogen Highway Network initiative as well as the federal Hydrogen Energy Roadmap.

Resource Impacts

The Clean Fuels Program 2003 Annual Report and 2004 Plan Update includes "Develop and Demonstrate Distributed Hydrogen Production and Fueling Stations" as a proposed project. The total cost to the AQMD for the installation and development of the two additional hydrogen stations is not to exceed $1,094,000. Included in this funding is the cost for hydrogen fuel for the first year of the program at the Ontario City site. This will provide a baseline cost for delivered hydrogen fuel to fueling sites to be compared to other sites relying on delivered hydrogen.

Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources and stationary sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. These request for sole source awards are made under provisions B.2.d.(2): the project is a time extension of an existing contract; and B.2.d.(3): the contractor has a commitment to multiple project phases. For the following reasons, staff believes it is in the best interest of the AQMD to cosponsor the proposed partnership project.

Air Products operates a large (500 tons per day) hydrogen production facility in the industrial section of Los Angeles, serving that sector with over 17 miles of hydrogen pipeline. Air Products was awarded this contract as a result of a competitive RFP by achieving the highest score on their bid proposal.

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