BILL ANALYSIS                                                                                                                                                                                                    Ó






           SENATE TRANSPORTATION & HOUSING COMMITTEE       BILL NO: sb 793
          SENATOR MARK DESAULNIER, CHAIRMAN              AUTHOR:  lara
                                                         VERSION: 4/1/13
          Analysis by:  Erin Riches                      FISCAL:  yes
          Hearing date:  April 30, 2013



          SUBJECT:

          Air pollution:  oceangoing vessels

          DESCRIPTION:

          This bill exempts vessels, under limited circumstances, from the  
          state Air Resources Board's regulations governing vessels at  
          port.

          ANALYSIS:

          In November 2006, California voters approved Proposition 1B, the  
          Highway Safety, Traffic Reduction, Air Quality, and Port  
          Security Bond Act of 2006.  Proposition 1B authorized the state  
          to issue $19.925 billion in general obligation bonds for  
          transportation-related programs, including $1.0 billion for the  
          Goods Movement Emission Reduction Program (program).  The state  
          Air Resources Board (ARB) administers this program, which funds  
          projects to retrofit and replace high-polluting trucks and  
          locomotives, as well as projects to reduce emissions from  
          vessels at berth in ports.  

          In December 2007, ARB approved the Airborne Toxic Control  
          Measure for Auxiliary Diesel Engines Operated on Ocean-Going  
          Vessels At-Berth in a California Port regulation (at-berth  
          regulation).  The at-berth regulation applies to all container  
          vessels, passenger vessels (cruise ships), and refrigerated  
          cargo vessels that visit California ports (defined as the Ports  
          of Hueneme, Long Beach, Los Angeles, Oakland, and San Diego).   
          The regulation does not apply to vehicle carriers, bulk ships,  
          and tankers.  The at-berth regulation:

           Provides that a vessel fleet refers to vessels owned and  
            operated by, or otherwise under the direct control of, the  
            same person.  The regulation deems that each fleet is composed  
            of one type of vessel (e.g., Carnival cruise ships) and that  
            fleets are separate for each port (e.g., Carnival would have a  




          SB 793 (LARA)                                          Page 2

                                                                       


            Port of Los Angeles fleet and a Port of San Francisco fleet).
           Requires vessel fleet operators visiting California ports to  
            reduce at-berth emissions by either turning off their  
            auxiliary engines and connecting the vessel to shore-based  
            power, or by using alternative control techniques that achieve  
            equivalent emission reductions.  
           Requires that by January 1, 2014, at least  50 percent  of a  
            vessel fleet's visit to a port must meet operational time  
            limits, as follows:  a vessel may operate its auxiliary diesel  
            engines for no more than three hours if the vessel transfers  
            the engines to shore-based power, or no more than five hours  
            if the vessel does not transfer the engines to shore-based  
            power.  For example, if a fleet makes 10 visits to a  
            California port during a quarter, in at least five of those  
            visits its vessels' auxiliary diesel engines must be operated  
            no more than three or five hours total, depending on whether a  
            transfer to shore-based power occurs.   

           Requires that by January 1, 2014, a vessel fleet's onboard  
            auxiliary diesel engine power generation while docked at berth  
            shall be reduced by at least  50 percent  from the fleet's  
            baseline power generation.
           Increases the two requirements above to  70 percent  by 2017 and  
            to  80 percent  by 2020.
           Provides exemptions from limits on hours of operation in cases  
            of emergency events, such as the port being unable to provide  
            electrical power due to equipment failure or a transmission or  
            distribution emergency, or delays caused by US Coast Guard or  
            US Department of Homeland Security inspections.
           Requires both terminal and vessel fleet operators to submit  
            compliance plans to ARB.  Terminal operators submitted their  
            initial plans in July 2009; the regulation requires them to  
            submit updates in July 2013, July 2016, and July 2019.  Fleet  
            operators also submitted their initial plans in July 2009,  
            with updates required in July 2011, July 2013, July 2016, and  
            July 2019.  

           This bill  exempts a vessel from the at-berth regulation's  
          operational time limits if the vessel's testing and safety  
          inspections of its equipment allowing the use of shoreside  
          electricity validates its safety, and:

           The vessel operator has made the necessary effort to complete  
            testing and inspection;
           The vessel operator has notified ARB;
           The vessel operator has properly recorded the testing and  




          SB 793 (LARA)                                          Page 3

                                                                       


            validation procedures, as specified; and
           The vessel operator or terminal operator has ordered or  
            scheduled any necessary repairs for the earliest possible  
            time.

          COMMENTS:
          
           1.Purpose  .  The author states that although the at-berth  
            regulation exempts vessel operators from operational time  
            limits under emergency circumstances, it does not provide any  
            exemptions for non-emergency circumstances.  This bill seeks  
            to provide a safety net for vessel operators who are  
            attempting to comply with the regulation but are unable to  
            successfully connect to shoreside power, whether due to a  
            problem on the port side or with the ship. 

           2.Background  .  The at-berth regulation requires a vessel  
            operator, when in port, to either turn off auxiliary engines  
            and connect to shoreside power (e.g., grid-based electrical  
            power) or use alternative control techniques to achieve  
            emissions reductions.  Most vessel fleet operators have chosen  
            the first option.  Accordingly, vessel fleet operators are  
            making significant capital investments to retrofit, improve,  
            and/or modify equipment to make vessels capable of connecting  
            with an external power source when at port.  On the land side,  
            California terminal and port operators are undertaking  
            projects - partially funded with Proposition 1B funds - to  
            provide onshore electrical power at their berths.  About 60  
            berths are operational to date, and ARB expects another 34  
            berth projects to come on line in 2013.

            The at-berth regulation requires a vessel operator bringing a  
            vessel into a port for the first time to test and validate  
            shoreside power interactions in order to certify those  
            connections as successful.  In an effort to help ensure that  
            these complex interactions will be successful on both sides,  
            the at-berth regulation also requires both vessel fleet  
            operators and terminal operators to submit plans to ARB.  The  
            next update for both plans is due July 1, 2013.
            Currently, if testing shows the connections are not  
            successful, the vessel operator can switch back to auxiliary  
            engine power without consequence.  Beginning January 1, 2014,  
            however, ARB could significantly penalize a vessel operator in  
            this situation for exceeding operational time limits.  The  
            Pacific Merchant Shipping Association (PMSA), sponsor of this  
            bill, points out that fleets will have vessels making initial  




          SB 793 (LARA)                                          Page 4

                                                                       


            visits to ports on an ongoing basis as they add new ships; in  
            addition, passing test procedures at one port does not qualify  
            a vessel to pass at another port.  PMSA seeks to ensure that a  
            vessel entering a port for the first time after January 1,  
            2014, is protected against penalties if it exceeds operational  
            time limits because testing procedures indicate that linking  
            to shoreside power is unsafe or not possible.  
                 
            3.Solution in search of a problem  ?  The sponsor and author of  
            this bill state that they have submitted several letters to  
            ARB requesting assistance with this issue and have not  
            received a response.  ARB indicates that because no major  
            issues have been encountered thus far in testing and  
            validation procedures with the several dozen berths that are  
            already providing shoreside power, it does not expect issues  
            to arise next year.  If problems do occur, ARB has the  
            flexibility to exempt from penalties vessels that exceed  
            operational time limits.  ARB indicates it would prefer to  
            deal with such incidents on a case-by-case basis to ensure  
            that the vessel operators in question are indeed making a good  
            faith effort to comply, as compared to the blanket exemption  
            provided by this bill.  If this bill becomes law, ARB will  
            have to begin a new rulemaking process to amend the at-berth  
            regulation, which could take up to two years and thus would  
            not address PMSA's desire for protections beginning January 1,  
            2014.  

          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,                                             April 24,  
          2013.)

               SUPPORT:  Pacific Merchant Shipping Association (sponsor)

               OPPOSED:  None received.