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Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 1
Texas Emissions Reduction Plan
Air Quality Division •
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 2
TERP Program
What we do:Provide financial incentives to upgrade or replace older heavy-duty vehicles, non-road equipment, locomotives, marine vessels, and stationary equipment
Why we do it:To reduce nitrogen oxide (NOx ) emissions in nonattainment and near- nonattainment areas.
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 3
NOx Sources
NOx emissions are the result of the combustion process
Cars, trucks, boats, trains
Industrial smokestacks
Electric power generation
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 4
TERP Program
NOX emissions combine with volatile organic compounds (VOC) in the presence of sunlight to form ground level ozone (smog)
NOX + VOC + Ozone
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 5
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 6
Types of Projects
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 7
The TERP Process
OutreachContract
Development
Fiscal
ApplicationReview
Disposition
Monitoring &Usage
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 8
TERP Grants Awarded
Emission Source
Number of
ProjectsGrant Amount
Total Tons of NOX
Reduced
Total 5,714 $745,718,747 156,920
Locomotive 36 $182,834,092 57,630
Marine 84 $47,907,997 14,954
Non-road 2,707 $235,241,596 35,991
On-road 2,841 $267,552,125 44,313
Stationary 46 $12,182,935 4,031
As of July 2009
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 10
TERP Grant Programs
Emissions Reduction Incentive Grants (ERIG)• Approximately $80 million per fiscal year• Competitive process• Funding determined by various factors using a
calculator
Rebate Grants Program• Approximately $30 million per fiscal year• First-come, first-served (non-competitive)• Funding determined by the Rebate Tables
(default factors used)
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 11
Eligible Applicants
Persons that own or operate eligible vehicles and equipment in the eligible counties• Individuals• Businesses• Districts• Non-profits• Government entities
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 12
General Requirements
Horsepower (HP) and Gross Vehicle Weight Ratings (GVWR):• On-Road Vehicles must have a GVWR of 8,500
pounds or higher
• Non-Road, Marine, and Stationary Equipment engines must have a HP rating of 25 or higher
• Locomotives will be over 1,000 HP
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 13
EMISSIONS REDUCTION INCENTIVE GRANTS (ERIG)
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 14
Eligible Emission Sources
On-road heavy-duty vehicles
Non-Road heavy-duty equipment
Stationary engines
Locomotives
Marine vessels
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 15
Eligible Project Categories
New purchases and leases (fleet expansion)
Replacement of old vehicles and equipment with newer models
Repower existing vehicles and equipment (engine replacement)
Retrofit and add-on devices on vehicles and equipment (EPA or CARB certified/verified)
On-site and on-vehicle infrastructure for idle-reduction or electrification systems, and qualifying fuel infrastructure
Rail Relocation and Improvement
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 16
New Purchase or Lease
Purchase or lease of brand new vehicle or equipment (fleet expansion)
New engine must be certified to emit at least 25% less NOx than the federal emission standard applicable to that engine
The grant may pay up to the difference in cost between the cleaner vehicle/equipment and a comparable model/make that only meets the standard
The availability of vehicles and equipment meeting this eligibility standard is very limited
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 17
Replacements
Purchase or lease of a new or newer vehicle or equipment to replace an existing vehicle or equipment
New engine must be certified to emit at least 25% less NOx than the engine being replaced
The old vehicle/equipment must have been owned and operated in Texas for the previous two years, and must be in operating condition
The grant may pay up to 80% of the incremental cost of the replacement vehicle/equipment
The old vehicle or equipment, including the engine, must be scrapped
Old locomotives may be permanently removed from the state in lieu of scrapping
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 18
Repowers
Replacement of an existing engine on a vehicle or equipment
New engine must be certified to emit at least 25% less NOx than the engine being replaced
The grant may pay up to 100% of the incremental cost of the repower
The old engine must be scrapped or sent to an OEM remanufacture facility
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 19
Retrofit or Add-on
Installation of a retrofit or add-on device
The device must be verified to result in at least a 25% reduction in NOx emissions on that engine
The grant may pay up to 100% of the incremental cost of the retrofit or add-on
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 20
Refueling Infrastructure
Purchase and installation of infrastructure to provide a qualifying fuel
Emissions reductions are determined based on what is done with the vehicle or equipment using the fuel
TCEQ may pay up to 50% of the incremental costs
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 21
On-Site Electrification and Idle-Reduction Infrastructure
Purchase and installation of infrastructure to provide electricity or services to vehicles or equipment
Emissions reductions are determined based on what is done with the vehicle or equipment using the infrastructure
TCEQ may pay up to 50% of the incremental cost
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 22
On-Vehicle Electrification and Idle- Reduction Infrastructure
Purchase and installation on a vehicle or piece of equipment to replace the power normally supplied by the propulsion engine
Includes auxiliary power units (APUs) and similar systems
Emissions reductions based on the hours of use of the infrastructure in lieu of the propulsion engine
TCEQ may pay up to 100% of the incremental cost
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 23
Rail Relocation and Improvements
Improvements at a rail intersection in the eligible counties
Emissions reductions may be based on both the reduction in locomotive engine idling and reductions in vehicle engine idling as a result of the improvements
The applicant must provide studies and information to support the emissions reduction projections
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 24
Cost Limits
Projects may not exceed cost per ton limits:• Locomotives & Marine: $5,000• On-road, Non-road, & Stationary: $10,000
May not exceed the incremental cost of the activity:• Replacements may not exceed 80% of the
incremental cost• Retrofits, repowers, on-vehicle infrastructure,
and rail relocation projects may be eligible for 100% of the incremental costs
• On-site refueling or electrification infrastructure may be limited to 50% of the eligible costs
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 25
REBATE GRANTS
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 26
Eligible Emission Sources
On-road heavy-duty diesel vehicles
Non-road heavy-duty diesel equipment• Only certain types vehicles/equipment
Marine vessels are not eligible
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 27
Eligible Project Categories
Replacement of older vehicles and equipment with newer models
Repower (engine replacement) existing vehicles and equipment
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 28
Cost Limits
May not exceed the incremental cost of the activity
Must be the lesser amount of the Rebate Table Amount or the Incremental Cost
Replacements may not exceed 80% of the incremental cost
Repowers may be eligible for 100% of the incremental costs
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 29
Grant Management
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 30
Usage Commitment
On-Road Vehicles:The applicant must commit to operating the vehicle at least 75% of the annual usage in a combination of the eligible counties and on one or more of the designated highways or roadways. At least 25% of the annual usage must occur in the eligible counties.
All Other Equipment:At least 75% of the annual usage must occur in the eligible counties.
Miles/Hours/Fuel Use:Under the ERIG program, the applicant must use the equipment in the eligible counties for the number of hours, miles, or fuel use agreed to in the application. For the Rebate Grants Program, the miles or hours are defaulted.
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 31
Activity Life Commitment
Activity Life:• Grant funded equipment must be used in the
eligible counties/areas for a minimum of 5 years for non-road equipment and 7-years for all other projects, including marine equipment.
Reporting Requirements:• All grant recipients must track and report on the
use and location of all grant-funded equipment for the duration of the Activity Life.
• Reports will be due semi-annually over the duration of the Activity Life.
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 32
Monitoring and Enforcement
The grant recipient must submit usage reports twice per year (GPS reporting may be used in lieu of the paper reports)
In addition to reviewing the usage reports, TCEQ will conduct onsite visits to view the equipment and to ensure that usage records are being maintained
Failure to report or to meet the usage commitments may result in the recipient having to return a share or all of the grant funds
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 33
Global Positioning System
Global Positioning Systems (GPS): OPTIONAL
• The costs to purchase and install a GPS unit to track and log the location and use of the equipment may be included in the incremental cost (these costs will count towards the applicable cost limits).
• The applicant will be responsible for monthly operational and maintenance charges.
• If the applicant uses the TCEQ authorized service provider, the TCEQ may allow the vendor to provide the required usage reports.
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 34
Contracts
Emissions Reduction Incentive Grants• a contract will be sent to the selected applicant
to sign and return• a Notice to Proceed will be sent to the applicant
with the executed contract
Rebate Grants• the application is the contract form (once
approved and signed by TCEQ, it is an executed contract)
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 35
Reimbursement
Grant funds are paid to reimburse expenses incurred by the grant recipient
Reimbursements are made after the purchase
Grant recipients may assign the grant payment to the dealer or financing entity
Reimbursement forms are provided with the contract
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 36
Disposition of Old Equipment
Salvage Only (see exceptions for locomotive)
$1,000 scrappage default amount is used for on-road and non-road projects
Disposition must occur within 90 days of receiving your payment from TCEQ
Every destruction is verified by TERP staff through photos, documents, or site visits.
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 37
Sample Disposition Photo
Wedge Cut in
the Frame
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 38
Sample Disposition Photo
Engine Serial Plate
Hole in the
Engine Block
Cut Frame
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 39
Use of Consultants
Consultants may be available to assist with the application process• The TERP Program has no relationship with
these consultants and it is up to you if you want to use them
• Consultant fees may not be paid for from the grant, nor can the cost basis for determining the total costs include consultant fees, even if those fees are to be paid by the dealer
Air Quality Division • www.terpgrants.org • 800-919-TERP (8377) Page 40
Next Grant Rounds
The next ERIG grant application period will open in the spring of 2010
Next Rebate application period will open in October 2009
Enter your email address on the TERP Web site to receive program updates
www.terpgrants.org
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