By Jacob Herson
Managing Editor
Transit California
In September 2022, the California Air Resources Board (CARB) released the Proposed In-Use Locomotive regulation, which aims to transition passenger rail and freight locomotives to zero-emission (ZE) technologies. As released, the regulation posed serious concerns for the Association’s passenger rail and commuter rail agency members. The Association, through a new Rail Subcommittee of the ZEV Task Force, in coordination with passenger and commuter rail agencies from across the state have engaged with CARB over the past 18 months to secure major revisions to the regulation, resulting in the release of modified regulation text on March 1, 2023. The Association and passenger and commuter rail agencies have applauded the revisions and continue to engage with CARB to advocate further refinements.
On September 19, 2022, 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 voicing serious concerns about the Standardized Regulatory Impact Assessment (SRIA) released in May 2022, which underpinned the Proposed In-Use Locomotive regulation.
They stated that the SRIA and Alternative Compliance Pathway (ACP) framework were based on cost estimates and financial assumptions that differed greatly from the research prepared for their own agencies, risking irreparable harm to their operations. They requested that an ACP framework not include a spending account, which would siphon operating funds from underfunded agencies to fund unproven technologies, or a useful life requirement different from federal requirements, which would force agencies to not comply with one or the other. The agencies also requested that the reduction in emissions created by passenger rail compared with cars be factored into the regulation’s calculations. Finally, the letter emphasized the need for dedicated funding to support the conversion.
After CARB released the draft In-Use Locomotive regulation, the Association noted a wide range of concerns with the regulation in a letter on November 3, which requested that CARB establish an alternative approach for regulating passenger and commuter rail agencies At the heart of our concerns was the impact of the proposed regulation on the financial position of California passenger and commuter rail agencies while they face major funding shortfalls. In the lead-up to a CARB public hearing on November 17, the Association and our passenger and commuter rail agencies met directly with CARB board members and executive staff to present our case, and to request that CARB work with the Association to establish an alternative approach in the regulation. At the November 17 public hearing, CARB board members – led by then-Vice Chair Sandy Berg – urged CARB staff to address the Association’s concerns and identify a path forward for passenger and commuter rail agencies. CARB released modified text of the regulation on March 1, 2023 that addressed our concerns. In letters on March 16, the Association and Caltrain both voiced support and appreciation for the modifications while requesting additional refinements.
Alternative Fleet Milestone Option
Modifications included the creation of a third compliance pathway for locomotive operators, the Alternative Fleet Milestone Option (AFMO). As the Association’s letter states, “This third compliance pathway seeks to directly account for the financial limitations of many of California’s intercity and commuter rail agencies as well as the technological limitations of current zero-emission locomotive technology we highlighted in our letter, dated November 3, 2022. We believe that these provisions would accelerate the deployment of zero-emission locomotives without undermining passenger rail service in the state.”
Caltrain’s letter also expressed appreciation for the AFMO compliance pathway. It explained: “This option allows operators to transition to a zero-emission fleet over time in stages, while incentivizing early adoption of zero-emission technology and enabling flexibility for fleets that are mid-transition to offset some of their remaining diesel technology as they move towards cleaner vehicles as quickly as possible.” The agency continued: “The stages of this option allow for mitigation of some of the uncertainty with purchasing requirements, federal regulations, manufacturing availability, and other factors that may impact the timelines for fleet transition.”
The modified regulation allows agencies to submit an application for and comply with an AFMO instead of following the compliance obligations specified under the Spending Account and the In-Use Operational requirements or the Alternative Compliance Plan (ACP). An operator that submits an AFMO application must commit to and, once approved, demonstrate conversion of their fleet to 100 percent Tier 4 locomotives (or cleaner) by 2035, and 100 percent ZE locomotives by 2047, with intermediate conversion targets at 2035 and 2042. Once approved, a locomotive operator’s AFMO is valid in perpetuity unless revoked. A locomotive operator that submits an ACP must commit to an equivalent to or greater reduction of PM, NOx, and GHG emissions than would have been achieved during the five-year verification order under either Section 2478.4, Section 2478.5, or both.
Applications for AFMOs must be submitted to CARB 90 days prior to their requested start date; applications for ACPs must be submitted 180 days in advance. CARB is required to approve or disapprove the AFMO or ACP application within 45 calendar days. While the Association expressed its appreciation for this clear and brief timeline for approval or disapproval, its letter requested “that CARB also clarify that a locomotive operator that submits an AFMO or ACP in accordance with Section 2478.15 shall have no current or retroactive compliance obligations under Sections 2478.4 and 2478.5 while the AFMO or ACP application is being evaluated by CARB. This recommendation seeks to address the financial impacts of the Spending Account requirements that would otherwise exist under the regulation, and which served as the primary basis for our concerns with the proposed regulation, as introduced,” noted the Association.
Caltrain echoed this, noting that “without the certainty that compliance with the Spending Account requirements is not required during the application period, Caltrain would still need to plan for the financial impacts of the Spending Account well in advance in the event that the AFMO is not accepted which would be deleterious to budgeting efforts given the financial planning timelines of public agencies.”
Under the modified proposed regulation, the Executive Officer may revoke an approved AFMO or ACP at any time, providing notice of at least 30 days, for reasons including failure to meet the provision requirements, failure to submit required documentation, failure to obtain approval of a detailed timeline report by no later than one year after the submission deadline, failure to meet the milestone dates set forth in the detailed timeline report, if no extension is obtained, or failure to meet other application requirements in the regulation.
The Association requested that CARB establish “an appeals process that permits the locomotive operator to present information to CARB that identifies valid reasons for the locomotive operator’s failure to meet the requirements, as to be specified, that would otherwise serve as the basis for revocation of an AFMO or ACP. These provisions should allow for a clear process for this appeal to be considered by the Executive Officer and granted, if specified conditions are met,” urged the Association’s letter.
Caltrain’s letter further noted that “an appeal process would benefit both CARB and the operators by setting clear expectations for how to proceed to enable compliance, especially for those agencies with less financial flexibility. We also recommend that CARB’s revocation be stayed while an appeal is pending to avoid disruption.”
MWh Tracking
The modified proposed regulation requires operators to demonstrate compliance by tracking their megawatt-hour (MWh) usage. As drafted, the proposed regulation suggests, but does not clearly state, that locomotive operators should rely on the definition of “usage” in Section 2478.83 to track MWh usage. This definition requires locomotive operators to report MWh usage from the meter and allows them to calculate MWh using annual fuel consumption if the locomotive is not equipped with a functional MWh meter. This lack of clarity may lead to unnecessary confusion and misreporting.
The Association’s letter requested that CARB “clarify the methodology that should be used to track MWh usage under the AFMO and ACP. We also urge CARB to recognize that the technological and human resource capacity of each locomotive operator differs significantly and provide a path toward locomotive operators and CARB identifying an alternative and mutually agreeable methodology for tracking and reporting MWh usage,” noted the Association and further echoed in Caltrain’s letter.
State Funding Assistance
The Association requested that CARB “continue to pursue from the Administration and Legislature dedicated state funding to provide financial incentives to passenger and commuter rail agencies. These incentives should be oriented toward reducing the full incremental capital costs associated with ZE deployments, inclusive of rolling stock and infrastructure costs.”
Caltrain’s letter further noted that “these incentives should not only reduce capital costs associated with ZE deployments, including rolling stock and infrastructure costs, but also further ZE technology through the funding of pilot and demonstration projects of new ZE rail technology that has yet to be vetted by the Federal Railroad Administration for passenger use.”
The letter continued: “Caltrain continues to request that CARB and the state invest in demonstration and pilot projects that will deliver near-term benefits to communities while enabling a broader industry transition to ZEV. Caltrain is interested in running a pilot with a battery-equipped electric multiple unit (BEMU) on the portion of its corridor yet to be electrified provided funding for a BEMU and demonstration project is secured prior to our option expiring in August of 2023.” The agency added: “As we stated in our previous letter, Caltrain is available to work with CARB to move forward on enabling sufficient funding for pilots and ZEV transition for passenger rail agencies.”
Technology Assessments
The Association’s letter also stated support for the completion of technology assessments in 2027 and 2032, which would include an analysis of the progress made in ZE locomotive technologies and provide CARB with the ability to determine if compliance dates need to be adjusted. “As these assessments move forward, we urge CARB to ensure that they are as robust as possible and conducted with input from industry stakeholders and all relevant state and federal departments and agencies,” said the letter. Caltrain’s letter echoed these points.
Caltrain expressed its appreciation “for the attention and understanding of our region’s CARB Board representative Director Davina Hurt and other Board members who raised concerns regarding the impacts of this regulation, as initially drafted, on the future of passenger rail and public transit in our state. We are also very appreciative of the multiple meetings and communications we have had with CARB staff to work to address issues of concern raised in our previous comments while preserving and strengthening environmental benefits.”
Metrolink CEO Darren Kettle commented: “We appreciate the CARB Board of Directors and staff working with Metrolink on a proposed rule that is ambitious and achievable. I look forward to continuing our collaboration with CARB in supporting the transition to cleaner technologies and being a part of Metrolink’s future transition to zero emissions.”
At a second Board Hearing, planned for April 27, the CARB Board will vote on the Proposed In-Use Locomotive Regulation.