The Association Leads Engagement on CARB's Innovative Clean Transit Regulation's Comprehensive Review, Charts Path on Proposed In-Use Locomotive Regulation
By Jacob Herson
Managing Editor
Transit California
The California Transit Association continues to lead engagement with the California Air Resources Board (CARB) to ensure that California’s transit industry can navigate and effectively respond to CARB regulations and receive the state funding support necessary to ensure that transit operations are not harmed as California’s transit agencies are charged with deploying zero-emission technologies. As Transit California readers will recall, the Association led an aggressive advocacy campaign in the years leading up to the adoption of the Innovative Clean Transit (ICT) regulation in 2018, which resulted in significant amendments to the regulation. Included in the concessions we won for the industry was the requirement that CARB conduct a third-party assessment of the status of the transit industry’s transition toward zero-emission buses (ZEBs) and the state of ZEB technology before the first ZEB purchase requirements takes effect at the beginning of 2023. That “comprehensive review” was released on August 22, 2022, and set for hearing by CARB at a public meeting on September 22, 2022. In the lead-up to this public meeting, Association staff worked with our ZEV Task Force and leaders from across the Association to develop and implement an advocacy strategy on the comprehensive review that focused on elevating critical information for CARB board members and securing approval of a series of recommendations for easing the transition to ZEBs.
The same month, CARB released the draft In-Use Locomotive (IUL) regulation, which aims to transition passenger rail and freight locomotives to zero-emission technologies. As released, the draft IUL regulation poses serious concerns for the Association’s passenger rail and commuter rail agency members.
Innovative Clean Transit Regulation
The Association’s engagement on the ICT regulation’s comprehensive review, as directed by ou
r ZEV Task Force, focused on:
- Highlighting for CARB, stakeholders, and the general public the leadership that California’s transit agencies and the Association demonstrated on ZEB deployment following the adoption of the ICT regulation;
- Elevating the continued financial, operational, and technological challenges faced by California’s transit agencies as they transition to ZEBs and the devastating impacts the pandemic has had on our industry; and,
- Securing agreement on the recommendations for easing the transition that were ideated by the ZEV Task Force.
More specifically, to that end, a delegation of Association members, comprised of Foothill Transit CEO and ZEV Task Force Chair Doran Barnes, San Diego Metropolitan Transit System CEO and Executive Committee Vice Chair Sharon Cooney, Orange County Transportation Authority (OCTA) CEO Darrell E. Johnson, OCTA Manager of State and Federal Relations Kristin Jacinto, Alameda-Contra Costa Transit District (AC Transit) General Manager and CEO Michael Hursh, Los Angeles County Metropolitan Transportation Authority Deputy Executive Officer Michael Turner, and Executive Director Michael Pimentel met with CARB board members to speak to our industry’s successes, the challenges we continue to face, and the support from CARB that is necessary to meet the goals of the ICT regulation. This message was carried into our comment letter to CARB on the ICT comprehensive review as well as collateral material shared broadly throughout CARB.
At the September 22 public meeting of CARB on the ICT comprehensive review, the Association was represented in a coordinated 30-minute presentation by ZEV Task Force Chair and Foothill Transit CEO Doran Barnes, Foothill Transit Board Member Felicia Williams, AC Transit General Manager and CEO Michael Hursh, and Executive Director Michael Pimentel.
California transit agencies and our industry at large received a chorus of applause and commendations from members of the CARB Board for the progress achieved so far on the adoption of and transition to zero-emission technologies.
CARB Vice Chair Sandy Berg said, “We asked you in 2018 to come to the table and lead the way, and transit has truly done that…great job…congratulations.” Board Member Dr. John Balmes noted that it was “refreshing to see how CTA and its members have stepped up to try to work with us and make the Innovative Clean Transit regulation a reality,” while Board Member Hector De La Torre remarked that he was “pleasantly surprised” by the significant progress the industry has made.
CARB affirmed its understanding of the challenges the industry still faces relative to the continued transition to ZEBs and generally, due to COVID-19’s financial and operational impacts and the looming fiscal cliff. Board members acknowledged that the industry is still “in crisis,” and described the challenges as “dire,” stating that they do not want to “crush” the industry.
Board members directed staff to implement all six of the Association’s recommendations, which follow:
- Update CARB’s administrative policies and funding guidelines to ensure transit agencies retain continued access to funding from the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) [after requirements go into effect].
- Establish an executive-level ICT regulation working group at CARB, with participation from the California Energy Commission, California Public Utilities Commission, the Governor’s Office of Business and Economic Development, and the Association, to identify and troubleshoot challenges to ICT implementation as they arise.
- Update CARB’s Low Carbon Fuel Standards regulation to authorize transit agencies to track and report electricity usage from a meter dedicated to charging infrastructure.
- Continue to coordinate with the California Energy Commission on the development of infrastructure funding programs that are complementary to HVIP and that support large-scale ZEB deployments.
- Continue to support increased funding for ZEB deployment and charging/refueling infrastructure in the State Budget and federal reauthorization-appropriations bills.
- Continue to coordinate with the California Public Utilities Commission to extend and make permanent today’s Commercial Electric Vehicle tariffs.
Though formal action was not taken on the recommendations, several board members, including the Vice Chair, discussed that beyond 2023, the regulation should be updated to tie compliance obligations to funding availability. The Association will follow up to see how CARB staff will follow through on the intent of the statement. Board Members also requested more regular check-ins by CARB staff and the industry. In restating the direction, Vice Chair Berg remarked, “This is not a regulated entity that we need to push, prod, and cajole…these are partners.”
Agency leaders remain determined to accomplish shared environmental goals while focused on financial and operational realities. “OCTA was an early adopter of zero-emission technology and we are committed to finding the best solution to bring cleaner air to our communities,” said OCTA CEO Darrell E. Johnson. “At the same time, it’s important to ensure the incremental cost of zero-emission technology does not reduce our ability to provide reliable and frequent bus service for those in Orange County who need it most.”
Association Executive Committee Vice Chair and San Diego MTS CEO Sharon Cooney said, “ZEBs continue to be far more expensive than compressed natural gas (CNG) buses and therefore we hope that CARB will continue to make funding available to offset that extra cost. We will also need CARB to work with us as we navigate the challenges of providing adequate charging infrastructure in an urbanized environment.”
AC Transit General Manager and CEO Michael Hursh spoke to the logistical and financial challenges of hydrogen fuel: “As California's largest bus-only transit agency, AC Transit's zero-emission fleet is not only how we improve Bay Area air quality but how we help correct the devastating health impacts on disadvantaged communities, who make up more than 50 percent of our daily riders. Yet, despite fleet advancements, this transit district's sustained progress is in peril due to the uncertain availability and rising costs of hydrogen fuel and electricity. The State of California requires that a third of our hydrogen fuel be renewable, but when more transit agencies transition to zero-emission, hydrogen production facilities will invariably fail to meet demand. In our instance, there is just one Bay Area hydrogen production plant, and it lacks a direct pipeline. As a result, we are trucking hydrogen from Southern California twice per week at exorbitant costs.”
Hursh added concern over grid unreliability. “Additionally, the current flex alerts and rolling blackouts mean the region's electrical grid is dangerously precarious,” he said. “The ongoing drought exacerbates this volatile mix by threatening hydroelectric capacity. In response, public safety power shutoffs are routinely announced. Ultimately, our emerging bus fleet, soon to total 85 ZEBs, can be hobbled and perhaps sidelined by the barriers of an unreliable electrical grid and questionable hydrogen infrastructure.”
Hursh also sounded the alarm on the looming “fiscal cliff” faced by the industry: “Another near-term barrier to the 2040 mandated transition is AC Transit's operating budget. The farebox has been a critical funding source, which helps cover AC Transit's daily operating costs, including the dramatic spikes in clean energy fuel costs. However, the COVID-19 pandemic effectively decimated our fare recovery. Although recent trends demonstrate we are approaching a 50 percent fare recovery, our transit district has a $30 million deficit this fiscal year. Federal emergency funds were a lifeline that protected our bus service and staved off layoffs, but those dollars will soon be exhausted. This loss of fare revenue is the primary cause of the ‘fiscal cliff’ as we project our future finances.”
The uncertainty of future demand coupled with the challenge of developing the operator workforce round out the picture for AC Transit. “Unquestionably, a long-term barrier to zero -emission transition is the riding public,” said Hursh. “AC Transit has not operated our full complement of service since March 2020, when many Bay Area employers were mandated to adopt remote work. As employers struggle to redefine in-office work schedules within city centers, our bus service remains in flux. Commuters are shifting their travel patterns, and it is increasingly unclear if AC Transit will regain the substantial ridership levels experienced prior to the COVID-19 pandemic. Our transition is further threatened by frontline worker shortages — specifically, the increasing challenge of sourcing, hiring, and certifying new bus operators.”
ZEV Task Force Chair and Foothill Transit CEO Doran Barnes said the comprehensive review “does a good job of assessing our progress as an industry. We’ve leaned in on trying to advance the technology, and that advancement hasn’t been quite as quick as expected, in part because of COVID. As you look across the industry, and as I talk to our various transit systems, everybody is working on this and trying to figure out how to continue to expand and scale. The biggest challenge in my mind is that there’s still a substantial cost difference between a ZEV and a traditionally powered vehicle, whether that’s diesel or CNG. As operators, it’s a matter of how we fill that funding gap at a time when there’s a lot of other funding pressures on us, again partly coming out of COVID.”
“I think a big fear is that we could face a scenario in which we advance zero-emission technology but have to cut service because of the funding gap, and that’s not an acceptable solution. That’s where we’re asking for CARB to even further lean in with some ways to be able to deal with these issues as they come up dynamically going forward. It’s true that there is more money available at the state and federal level than there has ever been, but the reality is that it’s still not enough. A number of agencies, including Foothill Transit, have applied for federal and state grants and not received any.” Foothill Transit faces a 250% cost increase for hydrogen-powered buses over CNG, a differential it can absorb for a small percentage of its fleet but not the entire fleet.
In-Use Locomotive Regulation
On September 19, Caltrain, Sonoma Marin Area Rail Transit (SMART), Southern California Regional Rail Authority (Metrolink), the San Joaquin Joint Powers Authority (SSJPA), the Altamont Corridor Express (ACE), and North County Transit District (NCTD) submitted a joint letter to the state Department of Finance and CARB regarding the Standardized Regulatory Impact Assessment (SRIA) released on May 26, 2022, for the proposed In-Use Locomotive Regulation.
The letter states, “As environmental leaders among public transportation agencies and operators of the state’s cleanest passenger locomotive fleets, we share CARB’s desire to reduce statewide emissions from the transportation sector, including locomotives.” The letter details the passenger rail agencies’ concerns.
The SRIA and Alternative Compliance Pathway (ACP) framework “include critical cost estimates and financial assumptions that appear to greatly diverge from the research prepared on behalf of our individual agencies, or which are missing altogether.” If this issue is unresolved, the regulation “will cause irreparable harm to public passenger and freight rail agencies,” requiring them “to consider extreme cost containment measures such as deferring critical maintenance or expansion, reduced service, or significantly increased fares that could threaten ridership and the continued operational viability of public passenger rail agencies beginning to slowly recover from precipitous declines in ridership and farebox revenues.”
The agencies’ request that an ACP framework “not include reverting to a spending account or useful life requirement for public agencies as a means of further reducing emissions. The spending account siphons off critical operating funds from agencies already underfunded to meet service needs to fund an unknown technology with an unknown time horizon and cost for commercial development. This penalizes operators who act in good faith to deploy the cleanest technology available when a zero-emissions alternative has not been developed or proven scalable and operational for revenue service. A useful life requirement that is different from the federal requirement places rail agencies in the position of being out of compliance and subject to penalty from one or the other requirement no matter what course of action is taken.”
The agencies also note that “the reduction in emissions afforded by public transit and passenger rail agencies is not accounted for in the regulation. The reduced emissions and reduction in VMT from passenger rail ridership should be factored in when accounting for net greenhouse gas emissions from passenger rail locomotives.”
Finally, “the availability of commensurate, dedicated, and reliable funding will be required to develop zero-emissions locomotive equipment, facilitate future fleet conversion, complete planning and reporting requirements, and potential expansions.”
Metrolink CEO Darren M. Kettle separately commented, “We join regional passenger rail operators across the state in our commitment to advancing the state’s mobility and sustainability goals. Building on our leadership in reducing emissions as the first railroad in the world to fully implement 100% renewable fuel, powering the largest Tier 4 locomotive fleet of any passenger rail agency in California, Metrolink is committed to a framework that encourages collaboration and innovation in the passenger rail sector to deploy zero-emission technologies when fully developed and operationally feasible."
CARB released the draft In-Use Locomotive regulation on September 23, starting a public comment period that extends to November 7. CARB will hold a public hearing on November 17 to consider the proposed regulation. The Association through a new Rail Subcommittee of the ZEV Task Force will be engaging with CARB, beginning in October, to advocate for solutions to the above referenced concerns, hoping for a similarly cooperative arc as continues to play out with regard to the ICT regulation.