BOARD
MEETING
STATE
OF
CALIFORNIA
AIR
RESOURCES
BOARD
JOE
SERNA,
JR.
BUILDING
CALIFORNIA
ENVIRONMENTAL
PROTECTION
AGENCY
CENTRAL
VALLEY
AUDITORIUM,
SECOND
FLOOR
1001
I
STREET
SACRAMENTO,
CALIFORNIA
THURSDAY,
MARCH
27,
2003
9:
00
A.
M.

JAMES
F.
PETERS,
CSR,
RPR
CERTIFIED
SHORTHAND
REPORTER
LICENSE
NUMBER
10063
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
ii
APPEARANCES
BOARD
MEMBERS
Dr.
Alan
Lloyd,
Chairperson
Dr.
William
Burke
Mr.
Joseph
Calhoun
Ms.
Dorene
D'Adamo
Supervisor
Mark
DeSaulnier
Professor
Hugh
Friedman
Dr.
William
Friedman
Mr.
Matthew
McKinnon
Mrs.
Barbara
Riordan
Supervisor
Ron
Roberts
STAFF
Ms.
Catherine
Witherspoon,
Executive
Officer
Mr.
Tom
Cackette,
Chief
Deputy
Executive
Officer
Mr.
Mike
Scheible,
Deputy
Executive
Officer
Ms.
Lynn
Terry,
Deputy
Executive
Officer
Ms.
Kathleen
Walsh,
General
Counsel
Dr.
Alberto
Ayala,
Manager,
Alternative
Strategies
Section,
MSCD
Ms.
Analisa
Bevan,
Manager,
ZEV
Implementation
Section,
MSCD
Mr.
Richard
Bode,
Chief,
Health
and
Exposure
Assessment
Branch,
Research
Division
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
iii
APPEARANCES
CONTINUED
STAFF
Mr.
Craig
Childers
Mr.
Bart
Croes,
P.
E.,
Chief,
Research
Division
Mr.
Bob
Cross,
Chief,
MSCD
Ms.
Krista
Fregoso,
Air
Pollution
Specialist,
Planning
and
Regulatory
Development
Section,
MSCD
Mr.
Tom
Jennings,
Senior
Staff
Counsel
Ms.
Diane
Johnston,
Senior
Staff
Counsel
Dr.
Norman
Kado,
Air
Pollution
Specialist
Ms.
Renee
Kemena,
Manager,
Planning
and
Regulatory
Development
Section,
MSCD
Mr.
Jack
Kitowski,
Chief,
On­
Road
Controls
Branch,
MSCD
Mr.
Bob
Nguyen,
Air
Resources
Engineer,
Alternative
Strategies
Section,
MSCD
Mr.
Chuck
Shulock,
Vehicle
Program
Specialist,
MSCD
Dr.
Barbara
Weller,
Manager,
Population
Studies
Section,
Research
Division
ALSO
PRESENT
Mr.
Tom
Addison,
Bay
Area
Air
Quality
Management
District
Dr.
Menahem
Anderman,
Consultant
Ms.
Marilyn
Bardet
Ms.
Clare
Bell,
E­
Vet
Mr.
John
Boesel,
Calstart/
Westart
Mr.
Thomas
Bradley,
Self
Mr.
Scott
Briasco,
Los
Angeles
Department
of
Water
and
Power
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
iv
APPEARANCES
CONTINUED
ALSO
PRESENT
Mr.
Kelly
Brown,
Ford
Motor
Company
Dr.
Louis
Browning,
ICF
Consulting
Dr.
Nicholas
Carter
Mr.
Steve
Casner,
Self
Mr.
Michael
Coates,
Green
Car
Group
Mr.
Michael
Conlon,
Automotive
Engine
Rebuilders
Mr.
Steven
Dibner
Mr.
Armando
Flores,
Latino
PAC,
Stansilaus
County
Hispanic
Chamber
of
Commerce
Mr.
Tom
Fulks,
Green
Car
Marketing
&
Communications
Mr.
Andrew
Frank,
U.
C.
Davis
Mr.
S.
David
Freeman
Mr.
Tom
Gage,
AC
Propulsion
Mr.
Marc
Geller
Mr.
Robert
Gibney,
Avestor
Mr.
Tim
Hastrup
Mr.
Steve
Heckeroth,
02
Mr.
David
Hermance,
Toyota
Mr.
Henry
Hogo,
SCAQMD
Mr.
Steve
HOEK,
Automotive
Engine
Rebuilders
Ms.
Bonnie
Homes­
Gen,
American
Lung
Association
Mr.
Steve
Hurd,
Caterpillar
Mr.
Rolad
Hwang,
NRDC
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
v
APPEARANCES
CONTINUED
ALSO
PRESENT
Mr.
Carl
Johnson,
NYS
Department
of
Environmental
Conservcation
Mr.
Mike
Kane,
Self
Dr.
Douglas
Kerr,
Self
Ms.
Christine
Kirby,
Massachusetts
Department
of
Environmental
Protection
Mr.
Robert
P.
Kittell,
Electricab
Energy
Mr.
Ed
Kjaer,
SCE
Mr.
Ben
Knight,
American
Honda
Ms.
Gretchen
Knudsen,
International
Truck
and
Engine
Corporation
Ms.
Patricia
Lakinsmith,
Monterey
Technologies
Ms.
Elaine
Lissner,
EV
Driver
Mr.
Jason
Mark,
UCS
Mr.
Daniel
McCarthy,
Evercel
Inc.

Mr.
Rick
McCourt,
Company
Construction
Ms.
Amanda
Miller,
EPRI
Mr.
Clayton
Miller,
Construction
Industry
Air
Quality
Coalition
Mr.
Diego
Miralles,
EV
Works
Mr.
Bill
Mirth,
Federal­
Mogul
Mr.
David
Modisette,
California
Electric
Transportation
Coalition
Mr.
Dana
Muscato,
Phoenix
Motor
Cars
Ms.
Mary
Nickerson,
Toyota
Mr.
Mark
Nordheim,
WSPA
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
vi
APPEARANCES
CONTINUED
ALSO
PRESENT
Councilman
Henery
Perea,
City
of
Fresno
Ms.
Kimberly
Rogers
Mr.
Serge
Roy,
Capitech
Ms.
Bev
Sanders
Mr.
Paul
Scott,
PEVDC
Ms.
Zan
Dubin
Scott,
Self
Mr.
Bill
Smith,
Virtual
Agile
Manufacturing
Ms.
Sandray
Spelliscy,
PCL
Mr.
Dan
Sturges,
Mobility
Lab
Mr.
Dean
Taylor,
SoCal
Edison
Mr.
Mike
Thompson,
Self/
Air
Breather
Mr.
Edward
Thorpe,
PEVDC
Mr.
Joe
Tomita,
Toyota
Mr.
Jay
Wagner,
Dana
Corporation
Mr.
Bill
Warf,
SMUD
Mr.
Reagan
Wilson,
Stanislaus
County
PETERS
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REPORTING
CORPORATION
(
916)
362­
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vii
INDEX
PAGE
Pledge
of
Allegiance
1
Roll
Call
1
Item
03­
2­
1
5
Chairperson
Lloyd
5
Executive
Officer
Witherspoon
5
Staff
Presentation
6
Q&
A
10
Item
03­
2­
2
18
Item
03­
2­
3
18
Chairperson
Lloyd
18
Executive
Officer
Witherspoon
20
Staff
Presentation
21
Q&
A
36
Mr.
Michael
Conlon
43
Mr.
Steve
HOEK
52
Mr.
Bill
Mirth
54
Mr.
Jay
Wagner
55
Mt.
Steve
Hurd
56
Mr.
Clayton
Miller
58
Mr.
Rick
McCourt
60
Ms.
Gretchen
Knudsen
62
Ms.
Sandra
Spelliscy
63
Ms.
Bonnie
Holmes­
Gen
64
Mr.
Mark
Nordheim
65
Mr.
Dean
Taylor
70
Mr.
Tom
Addison
72
Mr.
Henry
Hogo
88
Motion
99
Vote
101
Item
03­
2­
4
101
Chairperson
Lloyd
101
Executive
Officer
Witherspoon
108
Staff
Presentation
110
Mr.
S.
David
Freeman
161
Ombudsman
Tschogl
168
Q&
A
170
Dr.
Menahem
Anderman
195
Councilman
Henry
Perea
212
Dr.
Andrew
Frank
214
Dr.
Louis
Browning
220
Ms.
Amanda
Miller
224
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
viii
INDEX
CONTINUED
PAGE
Mr.
Joe
Tomita
226
Ms.
Mary
Nickerson
229
Mr.
David
Hermance
235
Mr.
Ben
Knight
250
Mr.
Kelly
Brown
266
Mr.
Reagan
Wilson
294
Mr.
Scott
Briasco
301
Mr.
Bill
Warf
305
Mr.
John
Boesel
311
Mr.
Ed
Kjaer
314
Mr.
David
Modissette
317
Ms.
Bonnie
Holmes­
Gen
331
Mr.
Jason
Mark
337
Mr.
Roland
Hwang
345
Mr.
Tom
Gage
352
Mr.
Dana
Muscato
358
Mr.
Dan
Sturges
363
Mr.
Tom
Fulks
373
Mr.
Michael
Coates
376
Mr.
Diego
Miralles
377
Mr.
Robert
P.
Kittell
379
Mr.
Tom
Addison
384
Mr.
Henry
Hogo
387
Mr.
Carl
Johnson
391
Mr.
Paul
Scott
394
Ms.
Zan
Dubin
Scott
395
Mr.
Mike
Kane
397
Ms.
Christine
Kirby
402
Mr.
Armando
Flores
404
Mr.
Tim
Hastrup
406
Mr.
Robert
Gibney
408
Mr.
Daniel
McCarthy
411
Mr.
Serge
Roy
413
Mr.
Mike
Thompson
415
Ms.
Marilyn
Bardet
420
Ms.
Bev
Sanders
425
Ms.
Clare
Bell
429
Ms.
Elaine
Lissner
431
Ms.
Kimberly
Rogers
435
Ms.
Patricia
Lakinsmith
438
Mr.
Edward
Thorpe
444
Mr.
Steve
Heckeroth
446
Mr.
Thomas
Bradley
450
Mr.
Stephen
Casner
453
Dr.
Douglas
Kerr
454
Dr.
Nicholas
Carter
459
Mr.
Marc
Geller
464
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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ix
INDEX
CONTINUED
PAGE
Mr.
Bill
Smith
469
Recess
473
Reporter's
Certificate
474
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
1
1
PROCEEDINGS
2
CHAIRPERSON
LLOYD:
Good
morning.
The
March
3
27th,
2003
public
meeting
of
the
Air
Resources
Board
will
4
now
come
to
order.

5
Mr.
Calhoun,
would
please
lead
the
Board
in
the
6
Pledge
of
Allegiance.

7
(
Thereupon
the
Pledge
of
Allegiance
was
8
Recited
in
unison.)

9
CHAIRPERSON
LLOYD:
Thank
you.

10
Will
the
clerk
of
the
Board
please
call
the
roll.

11
BOARD
CLERK
DORAIS:
Dr.
Burke?

12
BOARD
MEMBER
BURKE:
Present.

13
BOARD
CLERK
DORAIS:
Mr.
Calhoun?

14
BOARD
MEMBER
CALHOUN:
Here.

15
BOARD
CLERK
DORAIS:
Ms.
D'Adamo?

16
BOARD
MEMBER
D'ADAMO:
Here.

17
BOARD
CLERK
DORAIS:
Supervisor
DeSaulnier?

18
BOARD
MEMBER
DeSAULNIER:
Here.

19
BOARD
CLERK
DORAIS:
Professor
Friedman?

20
BOARD
MEMBER
HUGH
FRIEDMAN:
Here.

21
BOARD
CLERK
DORAIS:
Dr.
Friedman?

22
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Here.

23
BOARD
CLERK
DORAIS:
Mr.
McKinnon?

24
BOARD
MEMBER
McKINNON:
Here.

25
BOARD
CLERK
DORAIS:
Supervisor
Patrick?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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2
1
Mrs.
Riordan?

2
BOARD
MEMBER
RIORDAN:
Here.

3
BOARD
CLERK
DORAIS:
Supervisor
Roberts?

4
BOARD
MEMBER
ROBERTS:
Here.

5
BOARD
CLERK
DORAIS:
Chairman
Lloyd?

6
CHAIRPERSON
LLOYD:
Here.

7
Thank
you.

8
Good
morning
again.

9
First
of
all
I
would
like
to
welcome
our
new
10
Executive
Officer,
Catherine
Witherspoon.
It's
her
first
11
Board
meeting.

12
So
we're
delighted
to
have
you
here,
Catherine,

13
and
we're
delighted
to
be
working
with
you.
It's
a
tough
14
start
to
a
career
in
this
job,
but
I
know
you
can
handle
15
it.

16
EXECUTIVE
OFFICER
WITHERSPOON:
Thank
you.

17
CHAIRPERSON
LLOYD:
Before
we
get
started,
just
18
note
about
today's
proceedings.

19
We
are
postponing
Agenda
Item
03­
2­
2
until
next
20
month
regarding
appointments
to
the
Research
Screening
21
Committee,
to
give
staff
a
little
more
time
to
talk
to
22
potential
candidates.

23
So
after
our
regular
health
update
we'll
go
24
directly
to
Agenda
Item
Number
3,
the
Carl
Moyer,
school
25
bus
Item.
We're
expecting
that
discussion
to
take
about
PETERS
SHORTHAND
REPORTING
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3
1
an
hour,
as
we're
hoping.
So
if
you're
here
for
the
Zero
2
Emission
Vehicle
Regulation,
which
obviously
is
the
3
highlight
of
the
day
for
many
of
us,
you
have
a
bit
of
4
time
to
get
some
coffee,
work
on
testimony,
talk
to
staff,

5
et
cetera.

6
Then
once
we
get
started
with
ZEV,
we
proceed
7
straight
through
the
rest
of
the
day,
only
taking
short
8
breaks
for
the
court
reporter
every
two
hours.

9
That's
to
accommodate
the
large
list
of
witnesses
10
we're
expecting
today.
We
don't
have
an
idea
of
the
11
number
of
witnesses
at
this
time,
but
obviously
in
the
12
next
few
hours
we'll
have
a
pretty
good
idea.

13
If
need
be
we'll
extend
the
hearing
to
tomorrow.

14
But
my
colleagues
now
will
have
to
gauge
that
to
see
how
15
long
and
how
fast
we
can
get
along.
And
clearly,
in
that
16
context,
I'm
already
under
significant
pressure
by
my
17
colleagues
here
to
limit
the
testimony,
given
that
we
may
18
have
a
large
number
of
people.
And
so,
as
you
can
see
the
19
pincer
movement
here,
it's
likely
that
I
will
have
to
20
exert
three
minutes
or
so
if
we
have
a
large
number
of
21
witnesses.
But
we
won't
know
that,
and
I've
give
the
22
witnesses
plenty
of
time.
Clearly,
the
testimony
up
front
23
from
the
major
stakeholders,
that
will
not
be
impacted
by
24
the
three
minutes
because
these
are
some
critical
issues,

25
and
we'll
need
adequate
response
to
the
staff
presentation
PETERS
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4
1
as
well.

2
I'd
also
like
to
ask
anyone
in
the
audience
who
3
wishes
to
testify
today,
as
I
indicated,
keep
comments
as
4
brief
as
possible.
The
other
part
of
it
I
think,
and
5
consistent
with
this,
you
know,
we've
had
hundreds
of
6
letters,
many
of
which
repeat
the
same
message.
So
people
7
who
are
testifying
who
all
have
the
same
message,
it
would
8
be
helpful,
in
fact,
if
you
just
highlight
any
9
differences.
Believe
me,
as
I've
indicated
when
I
was
10
flooded
the
last
time
with
E­
mails,
it's
like
a
dessert.

11
You
know,
the
first
few
teaspoons
or
tablespoons
are
12
excellent.
But
after,
you
know,
a
truckload
of
that,
it
13
doesn't
have
the
same
impact.

14
So
I
think
it's
important
that
we
focus
some
of
15
those
so
we
add
on.
And
the
Board
again
has
read
a
lot
of
16
the
material
here,
and
I
think
we're
smart
enough
to
be
17
able
to
digest
the
key
parts.

18
But
as
I
indicated,
until
we
know
the
number
of
19
people
signed,
we
will
not
have
a
good
idea
of
where
we
20
are.

21
So
with
that
I
guess
we
will
proceed
to
the
first
22
agenda
item
today.
Reminding
anybody
who
wishes
to
sign
23
up,
please
see
the
attendant
outside.
And
if
you
have
24
copies
of
the
written
statements,
provide
30
copies
if
you
25
can.

PETERS
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5
1
The
item
here
is
the
recent
health
research
2
conducted
in
the
Netherlands
regarding
the
association
3
between
traffic­
related
air
pollution
and
mortality
in
an
4
elderly
population.

5
At
this
point
I'd
like
to
turn
it
Ms.
Witherspoon
6
to
introduce
the
item
and
begin
staff's
presentation.

7
EXECUTIVE
OFFICER
WITHERSPOON:
You're
going
to
8
have
to
get
used
to
saying
that.
It's
a
longer
name.

9
Good
morning,
Dr.
Lloyd
and
members
of
the
Board.

10
This
a
particularly
interesting
health
study
11
because
it
adds
to
our
understanding
of
particulate
matter
12
and
its
effect
on
the
elderly.
Over
the
past
few
years
we
13
have
talked
to
you
many
times
about
children's
unique
14
vulnerability
to
air
pollution.
This
study
reminds
us
15
that
there
are
other
sensitive
populations
at
risk.

16
This
study
also
has
an
environmental
justice
17
angle
because
it
involves
near­
roadway
and
near­
highway
18
exposures,
something
that
many
California
communities
are
19
concerned
about.

20
We
talked
about
some
of
these
issues
at
the
21
January
meeting,
and
we
will
be
addressing
the
subject
of
22
environmental
justice
research
and
data
needs
again
in
23
April.

24
Dr.
Norman
Kado
will
make
the
staff
presentation
25
this
morning.

PETERS
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6
1
Dr.
Kado?

2
DR.
KADO:
Thank
you
very
much,
Ms.
Witherspoon.

3
Good
morning,
Chairman
Lloyd
and
members
of
the
4
Board.

5
(
Thereupon
an
overhead
presentation
was
6
Presented
as
follows.)

7
DR.
KADO:
Investigators
have
previously
reported
8
associations
between
long­
term
exposure
to
particulate
9
matter,
air
pollution
and
mortality.
The
Air
Resources
10
Board
has
recently
adopted
new
annual
PM10
and
PM2.5
11
standards
and
continues
to
review
the
latest
information
12
to
protect
the
most
sensitive
members
of
the
public
from
13
chronic
and
cute
health
effects
related
to
particulate
air
14
pollution.

15
The
presentation
this
morning
is
a
discussion
of
16
a
study
evaluating
the
association
between
long­
term
17
exposure
to
traffic­
related
pollutants
and
cardiopulmonary
18
mortality
in
a
cohort
of
individuals,
age
55
to
69.

19
­­
o0o­­

20
DR.
KADO:
Results
of
three
previous
studies
21
presented
in
an
earlier
health
update
have
suggested
that
22
long­
term
exposure
to
particulate
matter
air
pollution
is
23
associated
with
increased
mortality
from
respiratory
and
24
cardiovascular
disease
and
from
lung
cancer.

25
For
estimating
exposure
to
air
pollutants
in
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1
these
studies,
investigators
compared
several
large,

2
usually
metropolitan
regions
with
different
ambient
air
3
pollution
concentrations,
with
the
assumption
that
4
exposure
is
uniform
within
each
region.
This
assumption,

5
however,
may
not
accurately
reflect
exposure,
especially
6
for
pollutants
with
important
local
sources.

7
Investigators
in
Europe
reported
that
8
concentrations
of
nitrogen
dioxide,
an
important
9
traffic­
related
pollutant,
for
example,
varied
between
10
small
regions
within
cities.
They
indicated
that
traffic
11
intensity
and
distance
to
major
roadways
are
important
in
12
assessing
long­
term
exposure
to
this
pollutant.

13
Investigators
have
further
reported
that
chronic
14
respiratory
disease
in
children
is
associated
with
living
15
near
major
roadways.

16
­­
o0o­­

17
DR.
KADO:
The
focus
of
today's
health
update
is
18
a
study
recently
published
by
Hoek
and
Colleagues
in
the
19
medical
journal
Lancet.
In
the
article
they
reported
an
20
association
between
mortality
and
indicators
of
21
traffic­
related
air
pollution
in
the
Netherlands.

22
The
subject
for
the
study
­­
the
subjects
for
the
23
study
consisted
of
4500
residents
randomly
selected
as
a
24
subset
from
the
Netherlands
cohort
study
on
diet
and
25
cancer,
which
is
an
ongoing
study
started
in
1986
on
over
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1
120,000
residents.

2
The
investigators
specifically
evaluated
3
cardiopulmonary
mortality
and
its
association
with
4
traffic­
related
air
pollution.

5
The
pollutants
of
interest
in
this
study
were
6
black
smoke
and
nitrogen
dioxide.
These
pollutants
were
7
used
as
indicators
of
exposure
to
traffic
pollutants.

8
The
investigators
determined
background
levels
9
for
the
entire
region
and
for
their
urban
environment.

10
Further,
the
investigators
used
living
near
major
roadways
11
as
an
index
for
exposure
to
local
traffic­
generated
12
pollutants.
This
was
defined
as
living
within
100
meters
13
of
a
freeway
or
within
50
meters
of
a
major
street
in
14
their
evaluation.

15
­­
o0o­­

16
DR.
KADO:
Over
the
course
of
this
study
there
17
were
185
cardiopulmonary
deaths.
After
adjusting
for
18
confounding
factors,
such
as
smoking
and
background
19
exposure
to
black
smoke
and
nitrogen
dioxide,
those
living
20
near
a
major
roadway
or
a
freeway
had
higher
relative
risk
21
for
cardiopulmonary
mortality.
This
corresponded
to
22
approximately
twenty
cardiopulmonary
deaths
for
23
individuals
living
near
major
roadways
in
this
study.

24
Interestingly,
when
the
population
was
limited
to
25
those
who
lived
in
the
same
location
for
ten
years
or
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1
more,
the
risk
for
cardiopulmonary
mortality
increased
for
2
those
living
near
a
major
roadway.
This
implies
that
3
longer
periods
of
exposure
to
traffic­
related
pollutants
4
may
increase
the
risk
to
cardiopulmonary
deaths.

5
­­
o0o­­

6
DR.
KADO:
This
study
agrees
with
findings
from
7
three
previous
cohort
studies
conducted
in
the
United
8
States,
demonstrating
an
association
between
exposure
to
9
air
pollution
and
cardiopulmonary
mortality.
The
10
consistency
of
the
association
across
different
countries
11
gives
credence
to
the
idea
that
air
pollution
is
12
associated
with
mortality
in
both
the
United
States
and
13
Europe.

14
The
results
from
this
study
indicate
that
there
15
is
a
consistent
association
between
cardiopulmonary
16
mortality
and
living
near
a
major
roadway,
and
further
17
indicates
the
importance
of
assessing
exposure
at
a
finer
18
scale
especially
with
regards
to
a
local
source
pollution
19
such
as
vehicular
traffic.

20
The
finding
of
increased
risk
for
those
living
21
near
roadways
is
important
to
the
State
of
California
22
where
many
of
our
citizens
live
in
close
proximity
to
23
major
roads
and
freeways.
Motorized
traffic
emissions
24
result
in
small
scale
spatial
variations
with
high
25
concentrations
at
short
distances
from
major
roads.
This
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1
exposure
could
result
in
adverse
health
effects.

2
Although
black
smoke
and
nitrogen
dioxide
were
3
used
as
indicators
for
traffic­
related
air
pollution,

4
these
components
may
not
be
directly
responsible
for
the
5
observed
mortality.
It
is
possible
that
some
other
6
traffic­
related
pollutants
such
as
ultrafine
particles
or
7
diesel
particulate
matter,
for
example,
is
responsible
for
8
the
health
effect
­­
of
the
effect
observed
in
this
study.

9
This
concludes
the
health
update.
And
we
would
10
be
happy
to
answer
any
questions.

11
Thank
you
very
much.

12
CHAIRPERSON
LLOYD:
Thank
you.

13
I
think
that's
an
excellent
background
setting
14
and
rationale
for
the
subsequent
items
today.

15
Questions
from
the
Board?

16
Dr.
Friedman.

17
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Well,
just
a
18
comment.

19
This
is
one
of
a
growing
number
of
reports
on
the
20
same
subject
that
­­
in
which
this
association
exists.

21
And
it
places
a
premium
on
two
things:
First,
the
efforts
22
that
we're
trying
to
make
with
respect
to
environmental
23
justice.
And,
second,
on
trying
to
identify
or
getting
24
the
research
done
to
identify
the
constituent
parts
of
25
particles
that
may
be
responsible
in
an
ultimate
sense
for
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1
the
causation.
We're
still
pretty
far
from
that,
but
2
there
clearly
is
a
direction
that
we
must
traverse
to
get
3
the
answer
to
that.
There's
no
question
that
there
is
a
4
relationship
between
mortality
and
what
it
is
we're
5
breathing.
We
need
to
find
out
exactly
what
component
6
part
is
the
culprit.

7
CHAIRPERSON
LLOYD:
Dr.
Burke.

8
BOARD
MEMBER
BURKE:
I
agree
with
Dr.
Friedman
in
9
part
of
his
statement
and
disagree
with
him
in
another
10
part.

11
At
South
Coast
we're
obviously
concerned
about
12
the
causal
relationship
to
illness.
And,
therefore,
we
13
are
undertaking
some
studies
in
groundbreaking
areas,

14
including
the
cause
of
brain
cancer
from
air
pollution,
as
15
well
as
some
of
our
asthma
problems.

16
But,
you
know,
environmental
justice
is
a
very
17
precious
term
to
me.
And
you
know,
having
a
study
like
18
this
and
saying
it
has
impact
on
environmental
justice
19
doesn't
­­
isn't
relevant
to
me,
because
saying
the
20
freeway
runs
by
it,
I
mean
a
freeway
runs
by
­­
through
21
west
L.
A.,
and
we
know
they're
not
environmentally
22
challenged.
Runs
through
Encino,
and
we
know
they're
not
23
environmentally
challenged.
So
having
a
freeway
run
24
through
your
neighborhood
does
not
necessarily
mean
you're
25
economically
or
environmentally
looking
for
environmental
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1
justice.

2
And
to
slap
that
label
on
a
study
like
that
to
3
people
of
color
I
think
is
offensive.
Just
one
personal
4
opinion.

5
EXECUTIVE
OFFICER
WITHERSPOON:
If
I
might
6
respond
since
I'm
the
one
who
brought
the
issue
up.

7
The
exposures
that
we're
talking
about
are
very
8
proximate
to
the
freeway,
in
very
close
distance.
And
so
9
even
when
the
freeways
are
running
through
more
wealthy
10
communities,
the
land
uses
immediately
adjacent
to
the
11
freeway
tend
to
be
industrial,
mixed
use,
lower
income.

12
And
so
I
don't
think
we've
violated
the
principle
of
13
environmental
justice,
because
lower
income
people
do
tend
14
to
end
up
in
housing
that
might
be
immediately
adjacent
to
15
freeways
and
roadways.

16
BOARD
MEMBER
BURKE:
Well,
you
know
Sunset
17
Boulevard?
Are
you
familiar
with
Sunset
Boulevard
in
18
Beverly
Hills?
Do
you
think
they're
economically
19
challenged?

20
BOARD
MEMBER
WILLIAM
FRIEDMAN:
I
haven't
seen
a
21
diesel
truck
on
Sunset
Boulevard
since
I've
lived
there.

22
And
I
lived
on
Sunset
Boulevard
­­

23
BOARD
MEMBER
BURKE:
Have
you
seen
any
on
the
24
405?

25
CHAIRPERSON
LLOYD:
Please.
I
think
that
­­

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1
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Yeah.
But
­­

2
BOARD
MEMBER
BURKE:
Well,
we're
talking
about
3
freeways
here.
We're
not
talking
about
surface
streets.

4
Sunset
Boulevard
and
the
405
is
the
most
highly
congested
5
freeway
in
the
State
of
California
with
435,000
cars
and
6
trucks
a
day.
So
I
mean
­­

7
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Billy,
I
live
400
8
yards
from
there,
not
200
feet
from
diesel,
which
is
what
9
these
studies
are
talking
about.

10
And,
believe
me,
there's
no
­­
my
comments
had
no
11
intent
to
offend
any
specific
group
of
individuals.
I
12
think
­­
what
I
said
was
there's
an
implication.
And
13
there
is
an
implication,
and
it
needs
to
be
studied
14
further.
That's
what
these
studies
mean
to
me,
that
there
15
is
­­
there's
a
fruitful
area
for
further
inquiry.

16
BOARD
MEMBER
BURKE:
Well,
I
happen
to
live
less
17
than
­­
have
for
the
past
twenty
years,
probably
eight
18
blocks
from
there.
And
if
­­
you
know
where
Arrow
Street
19
is?

20
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Yes,
I
do.

21
BOARD
MEMBER
BURKE:
That's
the
street
after
the
22
405
on
the
east
side?

23
The
houses
in
that
area
have
been
diminished
in
24
value
because
of
the
proximity
to
the
405.
Now
only
25
because
of
sound
pollution.
Because
of
the
pollution
from
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1
the
trucks
and
the
cars
going
by.

2
I
just
­­
you
know,
environmental
justice
to
me
3
means
people
who
don't
have
a
voice.
Just
because
a
4
freeway
runs
by
your
place
I
don't
think
means
that
you
5
don't
have
a
voice.

6
That's,
you
know
­­
I
didn't
mean
your
comment
7
was
offensive,
Doc,
you
know.
But
I
just
­­
all
my
life
8
people
have
been
slapping
labels
on
things
for
people
who
9
are
environmentally
or
economically
challenged
and
calling
10
them,
you
know,
things
that
we
need
study
for
those
11
people.

12
Well,
this
is
not
a
key
element.
Maybe
an
13
element,
but
not
a
key
element
in
what
you
need
to
study
14
for
poor
and
environmentally
challenged
people
as
far
as
15
I'm
concerned.
And
maybe
it's
just
a
difference
of
16
opinion.

17
EXECUTIVE
OFFICER
WITHERSPOON:
Staff
would
agree
18
with
that
assessment.
It's
just
one
element.
And
I
19
didn't
mean
to
imply
that
this
was
the
entire
20
environmental
justice
story.
It's
just
one
piece.

21
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

22
BOARD
MEMBER
McKINNON:
Yeah,
I
think
there's
23
probably
less
contradictions
between
what
folks
said
to
24
each
other.
I
think
both
are
sort
of
important
25
perspectives,
as
kind
of
working
through
what
we're
seeing
PETERS
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15
1
in
and
discussing
in
the
environmental
justice
area.

2
It
is
true
that
it's
more
than
freeways
and
3
trucks,
because
there's
lots
of
stationary
source
4
problems.
There
are
retail
commercial
problems
like
gas
5
stations
and
laundries
and
laundromats.
There
are
some
6
small
things
like
Barrio
Logan
situation
where
we're
7
looking
at
plating.

8
And
in
some
EJ
communities
there
is
heavy
truck
9
traffic,
not
only
on
freeways,
but
also
on
surface
10
streets.
I
think
of
the
Alameda
corridor.
On
freeways
I
11
think
of
Boyle
Heights
where
there's
a
bunch
of
freeways
12
that
sort
of
come
together
in
interchanges
sort
of
with
a
13
neighborhood.

14
And
I
guess
it
seems
to
me
that
if
we're
going
to
15
do
what's
right
for
Californians
in
all
communities,
one
16
of
the
things
we're
going
to
have
to
do
is
get
better
at
17
measuring
how
all
those
impacts
come
together.
And
I
18
think
that
what
we're
going
to
find,
and
I
think
there's
19
sufficient
evidence
actually
at
this
point,
that
a
lot
of
20
the
stationary
source,
commercial
source,
and
even
freeway
21
location
impacts
neighborhoods
of
color.

22
And
I
think
we
have
to
get
better
at
measuring
23
those
impacts
so
that
we
can
have
a
discussion
about
what
24
we're
going
to
do
about
it
and
what
measures
will
begin
to
25
correct
the
problem.
If
we
don't
measure
it,
we
won't
be
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1
able
to
correct
the
problem.
We
may
do
a
lot
of
things
2
that
work
and
we
may
do
things
that
don't
work.

3
Finally,
I'm
real
concerned
­­
and
one
of
the
4
things
that
seems
to
happen
is
school
districts
tend
to
5
buy
land
where
it
is
cheapest.
And
one
of
the
places
6
where
land
is
the
cheapest
is
next
to
freeways.
And
that
7
seems
to
be
a
reoccurring
pattern.
I'm
not
sure
how
we're
8
going
to
get
at
that,
but
we
certainly
need
to
figure
out
9
a
way,
because
it
isn't
a
good
way
of
siting
a
school.

10
And
I
think
that
is
beyond
EJ.
I
think
that
11
happens
in
all
communities.
I
think
it's
just
really
a
12
common
occurrence
because
that's
where
the
land
is
least
13
valuable.

14
Thanks.

15
CHAIRPERSON
LLOYD:
Thank
you.

16
Supervisor
Roberts.

17
BOARD
MEMBER
ROBERTS:
I
don't
want
to
interrupt
18
any
of
this,
but
I'd
like
to
ask
a
question
about
the
19
presentation.

20
CHAIRPERSON
LLOYD:
Please
do.

21
BOARD
MEMBER
ROBERTS:
You
made
reference
to
22
major
roads
and
freeways
without
giving
us
any
definition
23
as
to
what
that
means
in
levels
of
traffic.
What's
a
24
major
road,
to
begin
with,
as
per
this
study?
I'd
like
to
25
get
some
perspective
in
this.
Because,
believe
it
or
not,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
17
1
we're
building
some
of
most
expensive
housing
in
our
2
community
right
next
to
major
roads
and
freeways.
I'd
3
just
like
to
have
some
understanding
of
this
because
I
4
think
it's
bigger
than
any
one
community.
It
transcends
5
all
of
that.

6
And
I
thought
this
Board
was
about
cleaning
up
7
the
air,
period.
Okay?

8
Could
you
help
me?
What's
a
major
road?

9
Everybody
up
here
knows
except
for
me,
so
please
help
me.

10
DR.
KADO:
It
was
defined
in
a
number
of
­­
there
11
are
companion
papers
in
this
­­
related
to
this
study.

12
And
freeways,
they
had
specific
number
in
the
thousands.

13
I
don't
remember
the
exact
number.
Major
roads
were
a
14
little
bit
less
than
that.
I
can't
give
you
the
exact
15
number.

16
BOARD
MEMBER
ROBERTS:
Would
you
for
me
17
personally
get
that
information,
because
I'd
like
some
18
perspective.
Because
a
major
road
get
involved
a
little
19
bit
with
transportation
planning,
and
that
has
no
meaning
20
whatsoever.
And
we've
got
a
lot
of
things
I
would
21
describe
as
major
roads.
And
I'm
not
going
to
tell
you
22
how
close
I
live
to
one,
but
it's
very
close
­­
or
how
23
close
I
live
to
a
freeway.

24
But
I
think
beyond
that
­­
I
think
the
25
implications
here
is
that,
you
know,
there's
something
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
18
1
be
concerned
with
and
there's
some
additional
studies
that
2
probably
we're
going
to
have
to
do.
And
I
don't
think
it
3
does
any
­­
if
it
comes
as
a
surprise
to
anybody,
I'll
be
4
surprised
over
that.

5
But
I'd
like
to
have
some
perspective
in
terms
of
6
what
they
found,
what
this
environment
really
looked
like
7
that
they
were
studying.

8
CHAIRPERSON
LLOYD:
You
might
have
to
pay
a
site
9
visit
to
answer
that
question
comprehensively.

10
BOARD
MEMBER
ROBERTS:
I'll
be
available
in
June,

11
if
that's
an
option.

12
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Thank
13
you.

14
Seeing
no
further
comments
or
questions,
we'll
15
bring
that
item
to
a
close
and
thank
the
staff.
Thank
you
16
very
much.

17
And
I
guess
we
look
forward
next
month
to
the
18
discussions
on
the
new
RSE
members.

19
Thank
you.

20
CHAIRPERSON
LLOYD:
So
with
that
we'll
move
on
to
21
the
next
agenda
item.
I'll
just
speak
as
staff
turns
22
over.
And
this
one
is
Agenda
Item
03­
2­
3,
public
meeting
23
to
consider
Prop
40
and
related
amendments
to
the
Carl
24
Moyer
Program
and
the
School
Bus
Program
guidelines.

25
Again,
thanks
for
everybody
passing
off
on
­­
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
19
1
public
passing
off
on
Prop
40.
We
have
some
funds
2
actually
for
this
very
important
program.

3
I
had
the
pleasure
of
knowing
Dr.
Carl
Moyer
4
personally.
And
he
truly
was
a
visionary
ahead
of
his
5
time,
who
recognized
the
prolonged
life
of
diesel
engine
6
meant
that
old
high­
polluting
vehicles
and
equipment
were
7
going
to
be
around
for
a
very
long
time
and
would
present
8
an
air
quality
challenge.
This
foresight
in
fact
was
the
9
genesis
of
the
Moyer
Program,
which
is
passed
by
the
10
Legislature.

11
Carl
believed
that
a
collaborative
effort
between
12
private
entities
and
government
could
promote
cleaner
13
engines
and
have
a
significant
positive
impact
on
air
14
quality.
And
clearly
that
vision
has
proven
to
be
true.

15
The
continuing
success
of
his
program
demonstrates
again
16
how
right
he
was.
And
now
we
have
a
parallel
program
for
17
lower­
emission
school
buses
that
applies
the
same
18
philosophy
to
those
vehicles.

19
Something
that
Dr.
Moyer
may
not
have
anticipated
20
is
how
environment
justice
would
come
to
be
part
of
his
21
effort.
We
now
have
laws
that
direct
50
percent
of
all
22
Carl
Moyer
and
school
bus
monies
to
the
areas
that
are
23
heavily
impacted
by
air
pollution.

24
The
other
thing
that's
changed
is
our
options
for
25
cleaning
up
diesel
engines.
When
the
Carl
Moyer
Program
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
20
1
began,
replacement,
rebuilds,
and
alternative
fuel
2
subsidies
were
the
only
options.
Now
we
have
3
after­
treatment
possibilities
as
well,
and
have
learned
a
4
lot
more
about
the
relative
benefits
of
all
the
different
5
strategies.

6
Ms.
Witherspoon,
are
you
ready
to
begin
staff's
7
presentation?

8
EXECUTIVE
OFFICER
WITHERSPOON:
Yes.
Thank
you,

9
Dr.
Lloyd.

10
Last
year
California
voters
approved
Proposition
11
40,
the
California
Clean
Water,
Clean
Air,
Safe
12
Neighborhood
Parks
and
Coastal
Protection
Act,
thus
13
providing
the
funds
for
the
Carl
Moyer
and
Lower­
Emission
14
School
Bus
Programs
to
continue
for
two
more
years.

15
Under
the
Carl
Moyer
Program,
truck
drivers,

16
forklift
operators,
farmers,
commercial
fishermen,
and
17
many
other
hard
working
Californians
have
gotten
the
18
financial
assistance
to
replace
older,
higher­
emitting
19
diesel
equipment
with
newer
and
cleaner
technologies.

20
All
Californians
have
benefited
from
the
21
cumulative
air
quality
improvements
of
these
projects.

22
During
the
first
three
years
of
the
Carl
Moyer
Program
23
smog­
forming
NOx
emissions
have
been
reduced
statewide
by
24
over
11
tons
per
day.

25
The
Lower­
Emission
School
Bus
Program
provides
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
21
1
similar
benefits.
Through
this
program,
California
school
2
districts
are
providing
direct
public
health
benefits
to
3
their
students
by
reducing
NOx
and
diesel
PM
from
the
4
vehicles
that
bring
the
children
to
school.
In
addition,

5
thousands
of
school
children
are
now
being
transported
in
6
new
buses
meeting
the
most
current
safety
standards.

7
Over
the
past
two
years
more
than
500
old,

8
high­
emitting
school
buses
have
been
removed
from
service
9
and
replaced
with
new,
cleaner
models.
In
addition,
about
10
1500
buses
have
been
equipped
with
retrofit
devices
to
11
date
and
more
than
3,000
will
have
such
aftertreatment
12
when
the
retrofit
component
of
the
existing
program
is
13
completed
this
fall.

14
The
guideline
revisions
staff
are
proposing
today
15
will
update
these
programs
and
allow
us
to
continue
16
achieving
real
and
quantifiable
reductions
of
NOx
PM.

17
With
that,
I'll
now
ask
Dr.
Alberto
Ayala
and
Ms.

18
Krista
Fregoso
to
proceed
with
the
staff
presentation.

19
(
Thereupon
an
overhead
presentation
was
20
Presented
as
follows.)

21
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

22
Thank
you,
Ms.
Witherspoon.

23
And
thank
you,
Dr.
Lloyd
and
members
of
the
24
Board.

25
Staff
are
here
today
to
propose
to
you
revisions
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
22
1
to
the
existing
guidelines
for
two
clean­
air
incentive
2
programs
in
California,
the
Carl
Moyer
Program
and
the
3
Lower­
Emission
School
Bus
Program.

4
These
revisions
we
believe
improve
on
the
past
5
success
of
these
programs
and
allow
us
to
move
forward
6
with
the
funding
made
available
by
proposition
40.

7
­­
o0o­­

8
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:
I
9
will
briefly
discuss
Proposition
40
and
the
funding
made
10
available
to
the
Carl
Moyer
and
the
School
Bus
programs.

11
Then
I
will
present
an
overview
of
the
changes
made
to
the
12
existing
guidelines
for
the
Carl
Moyer
Program,
which
you
13
approved
on
November
16th,
2000.

14
I
will
then
turn
it
over
to
Ms.
Krista
Fregoso,

15
who
will
discuss
for
you
the
proposed
revisions
to
the
16
Lower­
Emissions
School
Bus
Program.

17
These
are
separate
incentive
programs
with
their
18
own
distinct
guidelines,
but
they
come
together
under
the
19
funding
umbrella
of
the
voter­
approved
Proposition
40.

20
Finally,
since
release
of
the
documents
for
21
public
comment,
the
staff
have
identified
some
corrections
22
and
clarifying
changes
to
both
sets
of
guidelines.
We
23
will
describe
these
further
changes
and
ask
for
your
24
consideration
and
approval.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
23
1
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

2
Proposition
40
is
a
California
Clean
Water,
Clean
3
Air,
Safe
Neighborhood
Parks
and
Coastal
Protection
Act
4
approved
by
California
voters
in
March
2002.
It
provides
5
the
only
current
source
of
funding
for
the
Carl
Moyer
and
6
School
Bus
Programs.

7
This
proposition
provides
funding
for
eligible
8
projects
that
affect
air
quality
in
the
state
and
local
9
parks
and
recreation
areas.

10
ARB
has
been
allocated
$
25
million
for
the
11
current
fiscal
year,
and
a
similar
amount
of
funding
is
12
expected
for
Fiscal
Year
2003­
2004.

13
Of
this,
Assembly
Bill
425
directs
that
20
14
percent
be
allocated
for
the
purchase
of
new,
clean,
safe
15
school
buses.
Funding
must
be
allocated
to
eligible
16
projects
that
meet
the
approved
program
guidelines,

17
including
environmental
justice
requirements.

18
­­
o0o­­

19
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:
In
20
the
four
years
that
the
Carl
Moyer
Program
has
been
in
21
existence,
approximately
$
114
million
have
been
allocated
22
for
projects.
We
are
currently
nearing
the
end
of
the
23
reporting
cycle
for
year
four,
and
districts
tell
us
that
24
all
funds
have
been
allocated
to
eligible
projects.

25
The
Carl
Moyer
Program
has
been
widely
successful
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
24
1
in
its
goal
to
deploy
cleaner
than
required
engine
2
technology
and
has
resulted
in
significant
near­
term
3
reductions
of
emissions
of
nitrogen
oxides
and
particulate
4
matter.

5
The
program
has
been
over­
subscribed
with
6
significantly
more
eligible
projects
than
there
is
funding
7
for.
The
success
of
the
Moyer
Program
is
illustrated
by
8
the
statistics
for
the
first
three
years.
Results
for
the
9
fourth
are
still
coming
in
from
the
districts,
and
the
10
Board
will
hear
a
status
report
on
these
results
in
the
11
fall.

12
The
program
has
resulted
in
average
reductions
of
13
11
tons
of
NOx
emissions
per
day,
at
an
average
cost
14
effectiveness
of
$
4,000
per
ton
of
NOx
reduced.
This
15
compares
very
favorably
to
the
current
cost
effectiveness
16
limit
of
$
13,000
per
ton.

17
The
program
has
funded
more
than
4300
engines,

18
with
a
fairly
even
split
between
diesel
and
alternative
19
fuel.

20
­­
o0o­­

21
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

22
The
new
finding
made
available
by
Proposition
40
23
and
a
number
of
recent
developments
prompted
staff
to
24
revise
the
existing
guidelines.
The
revisions
to
the
25
Moyer
guidelines
include
the
following:

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
25
1
First,
we're
proposing
new
district
requirements
2
for
matching
funding
allocations.
The
staff
is
also
3
proposing
a
new
provision
which
allows
districts
to
fund
4
projects
that
reduce
PM
emissions
only
as
long
as
it
is
5
with
district
match
funds.

6
These
first
two
revisions
will
be
discussed
in
7
more
detail
with
the
next
few
slides.

8
Other
changes
to
the
Moyer
guidelines
include
an
9
increase
in
the
maximum
cost
effectiveness
from
13,000
to
10
13,600
per
ton
of
NOx
reduced.
This
is
done
to
account
11
for
cost­
of­
living
increases
relative
to
the
last
update
12
of
the
guidelines
in
November
of
2000.

13
Although
environmental
justice
requirements
with
14
part
of
the
funds
allocated
last
year,
they
were
not
15
formally
spelled
out
in
the
current
guidelines,
which
were
16
approved
in
2000.
We
have
added
this
language
to
the
17
proposed
revisions.
We
have
formalized
the
reporting
18
requirements
for
the
districts.
This
is
important
since
19
we
have
already
been
informed
that
the
Department
of
20
Finance
will
formally
audit
both
the
ARB
and
the
districts
21
in
the
implementation
of
these
Proposition
40
funds.

22
And,
finally,
the
majority
of
the
changes
to
the
23
guidelines
are
technical
updates
related
to
new
emission
24
factors
and
inventories
as
well
as
new
emission
standards
25
that
recently
came
into
effect.
ARB
and
district
staff
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
26
1
have
also
worked
closely
and
consider
the
lessons
learned
2
in
the
four
years
of
the
Carl
Moyer
Program
3
implementation.

4
This
experience
is
reflected
in
a
number
of
5
clarifying
statements
throughout
the
document.
One
of
the
6
proposed
technical
updates
relates
to
a
specific
guidance
7
for
projects
that
involve
engine
repowers.
In
The
public
8
document
staff
proposes
that
only
rebuilt
engines
and
9
parts
offered
by
the
original
equipment
manufacturer
shall
10
be
eligible
for
Moyer
funding.

11
We
will
present
to
you
a
proposal
to
include
more
12
flexibility
and
allow
for
a
wider
variety
of
rebuilt
13
engines
to
qualify
for
participation
so
long
as
they
14
result
in
real,
quantifiable
and
enforceable
remission
15
reductions
16
­­
o0o­­

17
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

18
Per
Proposition
40
language,
each
district
is
19
eligible
to
receive
no
less
than
$
100,000
a
year.
The
20
staff
proposes
that
smaller
districts
which
based
on
21
population
only
qualify
for
this
minimum
disbursement
may
22
request
a
waiver
of
the
matching
requirement
so
long
as
23
sufficient
district
resources
are
committed
to
24
administration
of
the
program.

25
In
addition,
new
participating
districts
must
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
27
1
receive
appropriate
training
from
ARB
for
program
2
implementation
before
receiving
their
allocation.

3
For
the
larger
districts
the
matching
requirement
4
is
the
same
as
in
the
past.
For
every
$
2
from
proposition
5
40,
they
must
commit
$
1
from
funds
under
their
authority.

6
Up
to
15
percent
of
this
match
requirement
can
be
made
by
7
a
district's
in­
kind
administrative
costs.

8
­­
o0o­­

9
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:
In
10
the
current
fiscal
year
Proposition
40
has
made
available
11
a
total
of
$
19.5
million
for
projects.
Each
California
12
air
district
is
eligible
for
a
minimum
allocation
of
13
$
100,000.
Districts
with
either
populations
of
14
approximately
330,000
or
more
or
a
nonattainment
of
15
federal
lows
in
the
standards
are
eligible
for
additional
16
funding
determined
based
on
equal
weight
for
each
of
these
17
factors.

18
­­
o0o­­

19
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

20
The
program
will
continue
the
goals
and
21
requirements
for
reduction
of
PM
emissions
recommended
by
22
the
Carl
Moyer
Advisory
Board.
Areas
in
nonattainment
of
23
the
federal
PM
standards
must
fund
projects
that
result
in
24
a
minimum
overall
PM
emission
reduction
of
25
percent.

25
Currently
the
San
Joaquin
Valley
and
South
Coast
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
28
1
Districts
have
this
requirement.
The
rest
of
the
2
districts
must
attempt
to
meet
this
goal.

3
The
staff
proposed
additional
flexibility
be
4
added
to
the
program.
Districts
may
use
matching
funds
5
for
projects
that
result
in
PM
emission
reductions
only.

6
This
could
be
projects
like
diesel
particulate
filters
or
7
oxidation
catalysts.
Although
these
projects
do
not
offer
8
NOx
reductions
consistent
with
the
original
focus
of
the
9
Carl
Moyer
program,
reductions
of
toxic
PM
emissions
are
10
critical
and
the
staff
believe
offering
this
flexibility
11
to
districts
to
fund
these
projects
is
important.

12
­­
o0o­­

13
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

14
The
final
slide
in
the
staff
presentation
of
the
15
Moyer
Program
provisions
is
a
summary
of
further
proposed
16
modifications.
Since
the
release
of
the
guideline
17
document
for
public
comment
on
the
27th
of
last
month,
a
18
number
of
minor
points
requiring
further
clarification
and
19
correction
have
been
identified.
The
staff
will
submit
an
20
amended
document
to
the
executive
officer
for
final
21
resolution
and
approval.

22
Lastly,
in
an
effort
to
ensure
real
emission
23
reductions
over
the
useful
life
of
an
engine,
the
staff's
24
original
proposal
codify
an
existing
policy
requiring
the
25
use
of
OEM
engines
and
parts.
We
are
now
proposing
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
29
1
allow
the
use
of
non­
OEM
rebuilt
engines
and
parts
as
long
2
as
they
can
be
demonstrated
to
ARB
to
be
functionally
3
equivalent
from
an
emissions
and
durability
standpoint
to
4
the
OEM
engines
and
components
being
replaced.

5
Staff
has
worked
with
the
independent
rebuilder
6
stakeholders
who
concur
with
the
proposed
language
and
7
approach.
The
staff
will
also
continue
to
work
with
all
8
other
stakeholders
to
determine
the
specific
aspects
of
9
this
demonstration.

10
I
will
now
turn
it
over
to
Ms.
Fregoso,
who
will
11
present
the
revisions
for
the
Lower­
Emission
School
Bus
12
Program
and
conclude
the
staff
presentation.

13
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
14
SPECIALIST
FREGOSO:
Thank
you,
Dr.
Ayala.

15
I
will
now
present
the
staff's
proposal
for
16
revisions
to
the
Lower­
Emission
School
Bus
Program.

17
­­
o0o­­

18
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
19
SPECIALIST
FREGOSO:
The
purpose
of
this
incentive
program
20
is
to
reduce
school
children's
exposure
to
toxic
PM
21
emissions
and
smog­
forming
NOx
emissions.

22
­­
o0o­­

23
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
24
SPECIALIST
FREGOSO:
First,
let
me
begin
with
a
brief
25
status
summary
of
the
existing
Lower­
Emission
School
Bus
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
30
1
Program.

2
In
December
2000,
the
Board
adopted
the
original
3
guidance
document
for
use
by
the
California
Energy
4
Commission
and
the
local
air
districts
in
implement
the
5
program.
The
program
has
been
a
success
since
its
6
inception
two
years
ago.
A
total
of
$
49.5
million
has
7
been
used
to
purchase
new
lower­
emitting
school
buses
8
meeting
the
latest
federal
motor
vehicle
safety
standards.

9
An
additional
$
16.5
million
in
funding
is
being
10
used
to
equip
in­
use
diesel
buses
with
retrofit
devices
11
that
reduce
cancer­
causing
PM
emissions.
With
this
12
funding
over
500
old,
high­
polluting
buses
have
been
13
removed
from
service
and
replaced
with
new,
safe,

14
lower­
emitting
models.
The
retrofit
component
is
ongoing
15
and
is
scheduled
for
completion
in
the
fall
of
2003.
At
16
that
time
we
expect
that
about
3,000
in­
use
diesel
school
17
buses
will
be
equipped
with
ARB­
verified
retrofit
devises
18
that
significantly
reduces
PM
emissions.

19
­­
o0o­­

20
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
21
SPECIALIST
FREGOSO:
Dr.
Ayala
has
already
discussed
that
22
Proposition
40
is
the
only
current
funding
source
for
the
23
Carl
Moyer
Program
and
the
Lower­
Emission
School
Bus
24
Program.

25
Assembly
Bill
425
directs
that
20
percent
of
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
31
1
Proposition
40
funds
available
to
the
ARB
be
used
to
2
purchase
new
school
buses.
For
this
fiscal
year
a
funding
3
allocation
of
$
4,920,000
is
available
to
continue
the
4
Lower­
Emission
School
Bus
Program.
This
means
we
will
be
5
able
to
replace
at
least
45
old
school
buses
throughout
6
California
with
new
lower
emitting
models.

7
In
the
next
fiscal
year
a
similar
amount
is
8
expected
to
be
available.
Neither
Proposition
40
nor
9
Assembly
Bill
425
provided
funding
to
continue
the
10
retrofit
component
of
the
program.

11
­­
o0o­­

12
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
13
SPECIALIST
FREGOSO:
Now
I
will
discuss
the
staff's
14
proposed
revisions
to
the
program,
most
of
which
are
15
administrative
revisions.

16
First,
we
are
updating
the
funding
allocations
17
for
regions
throughout
California.
Seven
of
the
largest
18
air
districts
will
receive
distinct
funding
allocations.

19
The
remaining
funds
will
be
pooled
for
distribution
to
20
school
districts
in
the
rest
of
the
State.

21
As
done
in
the
previous
two
years
of
the
program,

22
the
funding
allocations
are
based
on
population.

23
Next
we
are
updating
the
program
timetable,
which
24
with
include
an
enforceable
delivery
deadline
with
a
25
penalty
provision
for
the
late
delivery
of
school
buses.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
32
1
I'll
discuss
this
penalty
provision
in
just
a
few
minutes.

2
We
are
also
proposing
that
fewer
air
districts
3
self­
administer
the
program
this
year.
Instead
we
are
4
focusing
more
program
administration
at
the
California
5
Energy
Commission,
which
has
extensive
experience
in
6
implementing
the
program.
The
three
air
districts
that
7
have
requested
to
continue
to
self­
administer
the
program
8
may
do
so
under
our
proposal.

9
The
staff
believes
this
proposed
revision
is
10
appropriate
due
to
the
smaller
pot
of
funding
available
11
and
the
increased
auditing
requirements
associated
with
12
Proposition
40.

13
And,
finally,
our
proposal
reduces
the
match
14
funding
contribution
for
school
districts
severely
15
impacted
by
transportation
service
costs.
In
the
previous
16
two
years
of
the
program
school
districts
with
bus
fleets
17
comprised
with
at
least
20
percent
pre­
1977
model
year
18
in­
use
buses
could
qualify
for
a
reduced
match
funding
19
amount
capped
as
$
15,000.
Our
proposal
now
caps
this
20
reduced
match
funding
amount
at
$
10,000
and
is
applicable
21
to
any
qualified
new
bus
purchase
that
replaces
an
in­
use
22
pre­
1977
model
year
bus.

23
­­
o0o­­

24
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
25
SPECIALIST
FREGOSO:
In
addition
to
the
administrative
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
33
1
revisions
I
just
discussed,
we
are
proposing
two
2
significant
changes
to
the
current
program
guidelines.

3
First,
our
proposal
includes
updated
eligibility
4
criteria
for
funding
new
school
buses
with
2003
model
year
5
engines.

6
Next,
our
proposal
includes
a
mechanism
for
7
assessing
a
monetary
penalty
on
the
business
entity
8
responsible
for
a
delay
that
results
in
school
buses
being
9
delivered
late
to
school
districts.

10
I'll
now
discuss
each
of
these
revisions
in
more
11
detail.

12
­­
o0o­­

13
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
14
SPECIALIST
FREGOSO:
We
are
updating
the
eligibility
15
criteria
for
funding
new
school
buses
to
account
for
more
16
stringent
NOx
emissions
requirements
that
took
effect
on
17
October
1st,
2002.
Because
of
these
more
stringent
18
requirements,
the
Lower­
Emission
School
Bus
Program
is
in
19
a
transitional
period
for
2003
model
year.

20
Our
proposed
eligibility
criteria
reflect
this
21
transitional
period
for
NOx
requirements
and
also
require
22
that
engines
in
funded
school
buses
provide
reductions
in
23
toxic
PM
emissions.

24
There
is
one
thing
we
want
to
clarify
for
the
25
Board
based
on
recent
information.
There
are
two
engine
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
34
1
manufacturers
that
supply
engines
for
natural
gas
school
2
buses.
Cummins
currently
has
an
oxidation
catalyst.
And
3
John
Deere
will
be
certifying
with
an
oxidation
catalyst
4
by
this
July.

5
Our
proposal
will
not
provide
any
funding
for
6
school
buses
equipped
with
engines
that
are
subject
to
the
7
October
2002
requirements
and
that
require
the
payment
of
8
a
nonconformance
penalty.

9
Our
proposal
maintains
the
program's
funding
10
split
of
two­
thirds
of
the
funding
for
new
alternative
11
fuel
purchases
and
one­
third
of
the
funding
for
new
diesel
12
purchases
as
a
statewide
goal.

13
And,
finally,
this
proposal
is
only
applicable
to
14
2003
model
year
engines.
We
will
again
consider
guideline
15
revisions
when
the
2004
standards
become
effective
for
all
16
engine
manufacturers.
At
that
time,
we
will
be
looking
to
17
reinstate
the
program's
requirement
for
NOx
reductions.

18
­­
o0o­­

19
PLANNING
AND
REGULATORY
DEVELOPMENT
SECTION
AP
20
SPECIALIST
FREGOSO:
The
final
significant
revision
to
the
21
Lower­
Emissions
School
Bus
Program
is
the
staff's
proposal
22
to
add
a
mechanism
for
assessing
a
monetary
penalty
on
the
23
business
entity
responsible
for
the
failure
to
deliver
24
school
buses
to
school
districts
by
the
September
1st,

25
2004
deadline.
This
mechanism
will
level
the
playing
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
35
1
field
for
business
entities
such
as
school
bus
2
distributors
that
stand
to
profit
from
the
Lower­
Emission
3
School
Bus
Program.
The
previous
program
guidelines
did
4
not
include
any
mechanism
to
mitigate
situations
in
which
5
school
buses
were
delivered
to
school
districts
after
the
6
program's
delivery
deadline.

7
In
the
staff's
proposal
released
for
public
8
comment
on
February
27th,
we
originally
proposed
that
9
either
the
California
Energy
Commission
or
the
air
10
districts
that
self­
administer
the
program
be
the
agencies
11
to
enforce
the
penalty
provision.
These
are
the
agencies
12
signing
the
funding
contracts
with
school
districts.

13
However,
based
on
public
comment
we
are
now
modifying
the
14
proposal
to
place
the
responsibility
for
enforcing
this
15
provision
on
the
ARB
rather
than
on
the
Energy
Commission
16
or
the
air
districts.
The
staff
will
submit
this
modified
17
revision
to
the
executive
officer
for
final
approval
once
18
the
public
record
for
this
item
is
closed.

19
This
slide
concludes
the
staff
presentation.
We
20
have
provided
for
you
an
overview
of
staff's
proposed
21
revisions
to
the
guidelines
of
two
important
incentive
22
programs.
The
funding
made
available
by
Proposition
40
23
precipitated
these
changes
which
have
built
on
these
24
programs'
previous
successes.
The
proposed
revisions
25
offer
the
necessary
tools
for
deployment
of
projects
at
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
36
1
the
local
district
level
based
on
the
latest
information.

2
Staff
believes
the
revisions
and
further
3
modifications
will
result
in
significant
improvements
to
4
the
guidelines
governing
the
Carl
Moyer
and
the
5
Lower­
Emission
School
Bus
Programs.
Thus,
we
recommend
6
approval.

7
Thank
you.
And
the
concludes
our
presentation.

8
CHAIRPERSON
LLOYD:
Thank
you
very
much.

9
Comments,
questions
for
the
staff?

10
Mr.
Calhoun.

11
BOARD
MEMBER
CALHOUN:
I
have
two
questions,
one
12
of
which
I
will
hold
off
on
until
we
get
some
testimony.

13
But
have
we
ever
denied
funding
to
a
local
14
district
because
of
its
inability
to
match
the
required
15
funds?

16
Don't
all
of
you
speak
at
once
now.

17
PLANNING
AND
REGULATORY
DEVELOPMENT
MANAGER
18
KEMENA:
This
is
Renee
Kemena
with
the
Mobile
Source
19
Control
Division.

20
Are
you
speaking
in
relation
to
the
Moyer
Program
21
or
the
School
Bus
Program?

22
BOARD
MEMBER
CALHOUN:
Both.

23
CHAIRPERSON
LLOYD:
Simple
question.
Is
there
24
any
where
we
denied
any
application
because
the
district
25
had
not
local
matching
funds,
that
we
know
of?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
37
1
PLANNING
AND
REGULATORY
DEVELOPMENT
MANAGER
2
KEMENA:
The
match
fund
on
the
School
Bus
Program
was
a
3
requirement
of
the
program,
and
they
were
all
able
to
come
4
in
with
match
funding.

5
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

6
That
is
the
experience
that
we've
had
with
the
7
Moyer
Program
as
well.

8
CHAIRPERSON
LLOYD:
So
the
answer
is
no?

9
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

10
Correct.

11
BOARD
MEMBER
CALHOUN:
The
second
question,
I'll
12
wait
until
we
hear
some
testimony.

13
CHAIRPERSON
LLOYD:
Are
you
sure?

14
Then
Professor
Friedman.

15
BOARD
MEMBER
HUGH
FRIEDMAN:
I
have
a
couple
of
16
quick
questions
too.

17
CAPCOA's
concerned
­­
wrote
about
their
concern
18
for
the
matching
fund
requirement
for
the
smaller
19
districts
receiving
the
minimum
100,000.
And
the
proposal
20
would
revise
the
guidelines
for
a
one­
year
waiver.
But
21
what
happens
after
that
one
year?

22
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:
I
23
think
initially
the
staff
recommends
that
we
look
at
24
implementation
of
the
program
over
the
first
year
and
25
consider
either
extending
or
modifying
the
proposal
based
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
38
1
on
the
one­
year
experience.

2
BOARD
MEMBER
HUGH
FRIEDMAN:
There's
also,
I
3
guess
­­
what,
a
15
percent
credit
for
administrative
­­

4
absorption
of
administrative
­­

5
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

6
That's
correct.
Which
is
currently
in
the
existing
7
guidelines,
and
we're
not
changing
that
requirement,

8
that's
correct.

9
BOARD
MEMBER
HUGH
FRIEDMAN:
Okay.
And
as
I
10
heard
the
revisions,
the
Errata,
those
appear
to
me
­­

11
although
I'm
not
technically
adroit
­­
but
it
seems
to
me
12
that
that
pretty
much
responds
and
takes
care
of
the
13
concern
expressed
by
the
automotive
engineer
rebuilders,

14
by
recognizing
and
allowing
in
the
standards
non­
OEM
that
15
are
equivalent.
Is
that
what
the
intent
is?

16
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:

17
That's
correct.
As
we
stated
in
the
staff
18
presentation,
we
are
at
a
point
where
we
are
ready
to
move
19
forward
and
work
with
all
of
the
stakeholders
to
determine
20
how
we're
going
to
proceed.
But
essentially
allows
both
21
the
OEM
and
the
non­
OEM
manufacturers
to
potentially
22
participate
in
the
program,
yes.

23
BOARD
MEMBER
HUGH
FRIEDMAN:
Thank
you.

24
CHAIRPERSON
LLOYD:
Supervisor
DeSaulnier.

25
BOARD
MEMBER
DeSAULNIER:
Thank
you,
Mr.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
Chairman.

2
I
don't
like
to
sound
parochial,
and
I've
always
3
tried
to
be
collegial
particularly
in
regards
to
our
4
downwind
neighbors
from
the
Bay
Area,
but
I'd
like
to
hear
5
staff's
rationale
in
terms
of
the
Moyer
Program
and
the
6
shift
from
more
of
a
population­
driven
formula;
and
in
7
relation
to
the
letter
from
ARAPCO,
I'd
like
some
8
comments.

9
Don't
all
jump
in
at
once.

10
EXECUTIVE
OFFICER
WITHERSPOON:
The
original
11
allocation
was
defined
by
statute
that
both
population
and
12
the
need
for
the
district
to
receive
emission
reductions
13
under
the
M4
measure
of
the
1994
SIP,
which
is
really
a
14
code
for
being
a
long­
term
ozone
nonattainment
area.
And
15
so
we
have
an
nonattainment
status
plus
population
in
the
16
formula
that
we
have
been
implementing
for
several
years
17
now.

18
There
is
a
lot
of
discussion
going
on
about
19
whether
that
should
be
revisited.
And
there
are
bills
in
20
the
Legislature
this
year,
I
think
more
than
one,
that
may
21
address
future
Carl
Moyer
criteria,
because
a
lot
of
this
22
is
driven
by
statute,
be
it
the
cost­
effective
threshold
23
or
funding
allocations.

24
And,
also,
the
program
has
always
been
about
NOx.

25
And
many
people
believe
now
that
it
should
embrace
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
40
1
particulate
matter
as
well.
And
when
you
start
looking
at
2
particulate
matter
and
ozone,
your
view
about
3
nonattainment
areas
shifts;
where
for
particulate
matter,

4
urban
density,
roadways,
that
sort
of
thing,
comes
back
5
into
higher
prominence
than
regional
wide­
scale
ozone
6
types
of
considerations.

7
So
I
think
that
the
Legislature
will
be
taking
8
that
up.
And
we're
certainly
open
to
a
change
in
the
9
criteria.
It's
necessary
to
look
at
it.
But
for
the
time
10
being
for
prop
40,
we
continued
with
the
status
quo
until
11
there
is
a
change
in
statute.

12
BOARD
MEMBER
DeSAULNIER:
Catherine,
I
don't
mean
13
to
be
a
pest,
but
I
will
be
for
this
instance.

14
When
we
went
through
smog
check,
I
was
reminded
15
by
the
Chairman
several
times
to
be
agnostic
when
it
comes
16
to
which
kind
of
public
health
issue
we
were
dealing
with.

17
And
this
is
a
problem
for
us
obviously
in
the
Bay
Area.

18
So
the
question
is:
How
much
flexibility
do
we
have
as
a
19
Board
regarding
the
statute?
And
what
can
we
do
to
20
rectify
what
at
least
I
perceive
to
be
an
inequity
and
21
creates
problems
as
I've
mentioned
to
you
in
other
22
relationships
that
we
have
with
our
downwind
neighbors?

23
EXECUTIVE
OFFICER
WITHERSPOON:
Well,
the
Bay
24
Area
believes
that
we
do
have
discretion
to
interpret
how
25
M4
is
read
and
to
put
more
or
less
emphasis
on
it.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
41
1
But,
again,
we're
operating
from
the
precedent
2
that's
been
in
place
for
several
years
now,
mindful
that
3
big
changes
could
be
coming
in
how
Carl
Moyer
is
4
administered
in
the
future.
But
not
wanting
to
step
out
5
ahead
of
the
entire
debate
in
the
Legislature
because
6
there
are
settled
expectations
now
over
years
of
time
that
7
this
is
how
the
formula
will
play
out.
And
any
time
8
dollars
come
in,
they
flow
back
out
in
this
way.

9
BOARD
MEMBER
DeSAULNIER:
Well,
does
that
formula
10
contradict
in
the
statute
the
drive
toward
consideration
11
of
EJ
and
in
terms
of
the
total
cost
effectiveness
in
the
12
25
percent
goal?
There
seems
to
be
some
contradictions.

13
And
whether
that
was
in
the
statute
that
needs
to
be
fixed
14
or
whether
administratively
or
by
legislative
action
of
15
this
Board,
we
can
at
least
move
­­
is
my
question
then
16
secondarily:
How
does
this
Board
engage
with
the
17
Legislature,
if
necessary,
to
correct
the
problem?

18
EXECUTIVE
OFFICER
WITHERSPOON:
We're
19
recommending
as
a
staff
that
you
don't
move
today.
But
20
we've
already
begun
those
discussions
with
numbers
of
21
stakeholders
to
find
out
where
they
all
are
on
the
issue
22
of
NOx
versus
particulate
matter,
on
cost
effectiveness
23
ceilings.
And
we'll
engage
them
as
well
on
allocation
24
criteria
for
the
future.
And
so
we're
very
happy
to
do
25
that.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
42
1
And
I'd
be
happy
to
keep
you
apprised
of
every
2
discussion
that's
going
on
in
that
regard
and
the
status
3
of
the
bills.

4
BOARD
MEMBER
DeSAULNIER:
So
is
that
a,
yes,

5
there
are
contradictions
between
the
goals
stated
in
the
6
statute?

7
EXECUTIVE
OFFICER
WITHERSPOON:
I
don't
think
8
there
are
contradictions
in
the
statute.
I
think
the
9
statute's
out
of
step
with
where
we
are
now,
shifting
from
10
a
pure
ozone
emphasis
to
more
emphasis
on
particulates.

11
So
it's
out
of
step
with
reality
and
real
life
of
both
12
pollutants
matter
a
great
deal
and
the
money
matters
for
13
cleaning
up
particulates
as
well
as
NOx.
But
the
statute
14
was
about
ozone
and
it
was
about
NOx.

15
CHAIRPERSON
LLOYD:
Can
I
ask,
now
that
we
only
16
have
one
lawyer
on
the
front
row,
can
we
have
our
legal
17
counsel.
Because
the
way
I
heard
the
question
was
that
18
there
was
the
Bay
Area's
interpretation,
presumably
based
19
on
their
legal
counsel.

20
Ms.
Walsh,
how
do
you
­­
I
presume
you
concur
21
with
the
EO?

22
GENERAL
COUNSEL
WALSH:
Right.
This
Board
has
23
the
authority
to
balance
the
various
factors
that
the
24
statute
directs
you
to
consider
in
determining
how
the
25
money
will
be
passed
out.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
43
1
And
there
are
some,
not
inconsistencies,
but
some
2
of
those
factors
are
looking
at
the
issues
from
different
3
points
of
view.
And
so
this
Board
has
the
responsibility,

4
and
staff
has
presented
you
with
a
proposal
that
exercises
5
that
responsibility
to
balance
those
factors.

6
BOARD
MEMBER
DeSAULNIER:
I'm
done
for
now,
Mr.

7
Chairman.
I
appreciate
the
staff's
response,
although
I
8
don't
necessarily
agree.

9
CHAIRPERSON
LLOYD:
Okay.
So
do
you
need
a
later
10
response
from
the
staff
following
up
the
meeting
or
are
11
you
satisfied
­­

12
BOARD
MEMBER
DeSAULNIER:
No,
I
was
going
to
13
wait
­­
we
do
have
some
public
comment,
I
take
it,
and
14
we've
got
discussion
on
other
issues
from
what
I
15
understand.
So
­­

16
CHAIRPERSON
LLOYD:
Okay.
Thank
you.

17
Any
other
questions?

18
With
that,
thank
you.

19
I'd
like
to
now
call
up
the
first
three
witnesses
20
who
are
signed
up
to
speak
on
this
item.
And
they're
21
Michael
Conlon,
Steve
HOEK,
and
Bill
Mirth.

22
MR.
CONLON:
Good
morning.
You
all
hear
me?

23
CHAIRPERSON
LLOYD:
Yes.

24
MR.
CONLON:
My
name
is
Michael
Conlon.
I
am
the
25
legal
counsel
for
the
Automotive
Engine
Rebuilders
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
44
1
Association.
I'm
here
representing
them
and
also
six
2
other
associations
in
the
heavy
duty
engine
field,

3
including
the
National
Engine
Parts
Manufacturers
4
Association
and
the
Association
of
Diesel
Specialists.

5
We're
here
on
one
issue
only
this
morning
related
6
to
the
Carl
Moyer
guidelines,
and
that's
the
addition
of
7
restrictions
on
what
parts
in
engines
can
be
used
under
8
the
Carl
Moyer
Program.
We
are
here
to
offer
our
support
9
for
the
revised
language
regarding
the
repowering
that
10
staff
presented
this
morning.

11
Originally
we
filed
extensive
comments
with
12
respect
to
the
original
language,
which
would
have
granted
13
a
monopoly
on
repowering
projects
to
engines
and
parts
14
produced
by
the
original
equipment
manufacturers.
That
15
original
proposal
had
no
technical,
environmental,
or
16
financial
justification.

17
As
a
fact,
emissions
problems
are
not
caused
by
18
rebuilding,
and
there's
a
1987
ARB
study
that
indicates
19
that.

20
It
says
that
heavy­
duty
engine
rebuilding
21
practices
do
not
significantly
impact
engine
emissions.

22
And
it
also
says
that
there
is
no
evidence
that
the
use
of
23
aftermarket
parts
increases
emissions.

24
CHAIRPERSON
LLOYD:
I
think
you've
been
heard,

25
your
support,
and
the
staff
has
agreed
with
you.
The
only
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
thing
you
can
do
now
is
alienate
the
Board.

2
So
I
think,
you
know,
you've
made
your
point.

3
MR.
CONLON:
All
right.
The
only
thing
that
­­

4
well,
first
of
all
I
would
like
to
praise
the
staff,
if
I
5
could,
because
this
issue
came
up
very
quickly.
They
met
6
with
us.
We
went
very
quickly
and
resolved
this
problem.

7
And
there
is
one
concern
that
we
had,
and
that
is
8
testing.
As
independent
rebuilders,
we
do
not
build
and
9
rebuild
the
number
of
engines
that
the
OE's
do.
We
do
10
rebuild
them
to
the
exact
same
specifications
and
we
do
11
use
direct
replacement
parts.
In
those
circumstances
we
12
don't
think
that
testing
should
be
required.
And
if
it
13
was
required,
it
would
amount
to
a
prohibition
on
our
14
being
able
to
do
it.

15
In
discussions
with
the
staff,
we
understand
that
16
this
Board
has
a
right
to
require
testing
at
any
time
in
17
order
to
ensure
clean
air,
and
we
don't
fight
that.
But
18
we
have
asked,
and
it
is
our
understanding
that
staff
is
19
not
going
to
be
looking
towards
testing
as
the
primary
or
20
maybe
even
the
secondary
way
for
us
to
demonstrate
21
compliance,
but
will
only
use
testing
if
and
when
we
can't
22
show
in
any
other
way
that
this
is
emissions
equivalent.

23
And
I
was
just
wondering
if
the
staff
would
comment
on
24
that.

25
BOARD
MEMBER
CALHOUN:
Before
the
staff
comment
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
46
1
let
me
ask
you
a
question,
Mr.
Conlon.

2
MR.
CONLON:
Yes,
sir.

3
BOARD
MEMBER
CALHOUN:
How
would
you
propose
to
4
convince
the
staff
that
it
is
functionally
equivalent
to
5
an
OEM
part?

6
MR.
CONLON:
There
are
­­
all
of
the
replacement
7
parts
that
are
used
are
designed
to
the
exact
8
specifications
of
the
OE
parts.
And
those
are
the
parts
9
that
are
used.
Also
the
rebuilding
will
be
done
to
exact
10
OE
specifications.
If
those
two
things
are
complied
with,

11
then
we
believe
that
the
emissions
will
be
exactly
the
12
same.

13
BOARD
MEMBER
CALHOUN:
Is
that
true
for
all
of
14
the
parts
that
you're
talking
about?

15
MR.
CONLON:
We
believe
so,
yes,
sir.
And
I
have
16
people
here
from
the
parts
companies
who
can
speak
to
that
17
more
directly.

18
BOARD
MEMBER
CALHOUN:
Bob.

19
MOBILE
SOURCE
CONTROL
DIVISION
CHIEF
CROSS:
Bob
20
Cross
with
the
staff.

21
I
think
that
the
problem
which
has
kind
of
22
stirred
this
up
in
the
first
place
and
caused
the
23
negotiations
to
be
so
extended
is
that
the
parts
industry
24
typically
does
what's
called
consolidating
parts.
And
so
25
that
they'll
in
many
cases
have,
you
know,
one
part
which
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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47
1
would
fit
where
maybe
three
or
four
different
ones
from
2
the
original
engine
manufacturer
would.
And
there's
3
probably
been
a
30­
year
argument
about
whether
or
not
4
those
parts
are
in
fact
equivalent.
And
the
staff
has
5
always
sort
of
felt,
"
Well,
gosh,
if
the
engine
6
manufacturer
chose
to
make
three
different
ones,
they
must
7
have
had
a
reason
for
it."
And
then
the
consolidation
8
folks
have
usually
said,
Well,
yeah.
But
maybe
we
know
9
how
to
make
the
parts
functionally
identical.
And,

10
therefore,
we
can
save
the
owner
or
rebuilder
some
money
11
by
doing
a
parts
consolidation."

12
And
I
think
that
both
sides
have
merit.
I
think
13
our
concern
as
the
staff
is
that
the
practice
of
parts
14
consolidation
can
get
carried
away
to
the
point
where
it
15
does
start
to
have
a
very
significant
impact.

16
For
example,
if
you
had
turbochargers
that
were
17
consolidated
­­
or
maybe
injectors
that
were
consolidated,

18
you
would
be
emissions
concerned.
And
I
think
that
what
19
the
staff
wants
to
do
with
the
language
here
is
ensure
20
that
if
we
have
that
concern
of
a
specific
rebuilder's
21
application,
we'd
like
to
be
able
to
have
the
rebuilder
22
have
to
prove
basically
that
the
engine's
emissions
23
equivalent.

24
And
clearly
if
the
engine
is
rebuilt
with
OE
25
parts,
there
isn't
going
to
be
a
problem.
If
they
can
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
48
1
demonstrate
clearly
that
the
parts
consolidations
that
2
they've
done
are
functionally
identical,
I
think
we
don't
3
have
a
problem.
But
we
don't
want
to
have
a
situation
4
where
our
hands
are
tied
if
we
have
the
engineering
5
concern
I
just
mentioned.

6
MR.
CONLON:
And
I
think
we
would
agree
with
7
that.

8
I
think
consolidating
can
describe
two
different
9
situations.
One
is
where
you
do
take
parts
that
are
10
different
and
they
­­
and
there
is
a
part
that's
combined
11
to
function
the
same
as
both
of
them.
But
sometimes
a
12
manufacturer
will
give
the
same
part
two
or
three
13
different
part
numbers
for
use
in
different
applications.

14
And
one
part
is
put
out
by
the
aftermarket
to
cover
what
15
is
exactly
the
same
part,
but
just
different
part
numbers.

16
So
in
a
latter
case
we
couldn't
think
there's
any
17
difference.
But
in
the
former
case
I
would
agree
with
Mr.

18
Cross,
that
there
does
have
to
be
some
proof
that
that
19
consolidation
has
not
done
anything
to
change
the
20
emissions
effect
of
that
part.

21
BOARD
MEMBER
CALHOUN:
I
don't
think
the
reg
22
requires
that
the
part
be
identical.
I
think
it
states
23
that
it
must
be
equivalent
from
an
emissions
and
24
durability
standpoint.
And
I
certainly
see
the
staff
25
maybe
in
some
cases
may
want
to
ask
the
manufacturer
of
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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49
1
that
part
to
demonstrate
that
that
is
in
fact
the
case.

2
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

3
BOARD
MEMBER
McKINNON:
Yeah,
we're
talking
about
4
using
taxpayer
money
to
subsidize
cleaning
up
engines
5
here.
And
I
think
it
is
important
that
we
have
some
6
bottom­
line
way
of
measuring
whether
or
not
the
rebuilds
7
work.

8
But
the
thing
I'm
not
very
clear
on
is,
what
does
9
that
mean?
Does
that
mean
that
we
certify
each
rebuilder
10
on
each
kind
of
engine
they
rebuild,
or
does
that
mean
we
11
do
some
sampling
method?

12
Can
you
map
out
for
me
what
it
looks
like
and
13
what
it
costs?

14
MOBILE
SOURCE
CONTROL
DIVISION
CHIEF
CROSS:

15
Well,
basically
we
already
have
an
existing
16
process
that
we
use
to
look
at
aftermarket
parts.
And
17
typically
the
process
looks
at
speed
equipment
or
18
non­
OEM­
type
parts.
But
it's
a
process
that
can
also
be
19
applied
to
this
use.

20
And
in
the
light
­­
well,
let's
see.
I
won't
go
21
there.

22
The
concern
that
I
guess
we
would
have
is
that
­­

23
or
the
way
we
would
do
this
is
that
the
rebuilder,
if
they
24
use
the
exact
part
that
the
engine
manufacturer
specifies,

25
we
would
presume
that
they're
doing
it
correctly.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
50
1
If
they
have
a
an
engineering
basis
for
what
the
2
gentleman
here
has
explained,
that
there
is
­­
you
know,

3
that
they've
got
a
Cummins
drawing,
for
example
of
a
4
piston
that's
got
five
part
numbers
on
it
that
apply
to
5
that
piston.
Then
clearly
you
would
be
able
to
say
by
6
looking
at
the
Cummins
drawing,
"
Yeah.
That's
okay."

7
I
think
when
we
get
into
the
injectors
and
8
turbos,
we're
going
to
look
more
closely.

9
So
let
me
backup.

10
So
for
the
short
block
stuff
I
think
we
would
11
work
with
them
to
try
and
buy
off
on
an
engineering
basis
12
that
they're
using
the
right
parts.
And
we'd
probably
do
13
it
through
spot
checking,
if
you
will.
I
don't
think
14
that
­­
the
staff
doesn't
have
the
wherewithal
to
try
and
15
tear
­­
you
know,
mentally
tear
apart
every
engine
that
16
they
rebuild.
I
think
we
just
need
to
look
at
their
17
practices
and
say,
okay,
do
they
typically
use
the
right
18
parts?

19
I
think
when
we
get
into
emissions
parts
and
20
parts
that
are
not
exact
replacement
for
the
OEM,
then
we
21
start
having
to
look
more
closely.
And
as
the
engine
gets
22
further
and
further
from
an
exact
OEM
rebuilt
engine,
our
23
concern
gets
greater.
At
some
point
we're
going
to
say,

24
"
You
know,
that
doesn't
really
look
like
an
OEM
engine,

25
and
we
want
you
to
test
it
and
so
we
really
­­
and
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
51
1
discretion
is
already
exercised
for
speed
equipment
now.

2
I
mean
basically
­­
an
intake
manifold
that
basically
3
works
the
same
as
a
factory
manifold,
they
say,
"
Fine,

4
it's
a
replacement
part."
You
know,
if
it's
a
whole
new
5
fuel­
injection
system,
they
say,
"
Yeah,
better
test
that."

6
So
I
think
we
would
just
use
that
same
process
for
this
7
application.

8
BOARD
MEMBER
McKINNON:
Thank
you.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much
indeed.

10
Thank
you.

11
MR.
CONLON:
We
did
have
originally
six
people
12
who
were
going
to
testify
this
morning.
But
in
keeping,

13
Mr.
Chairman,
with
your
remarks,
I've
asked
two
of
them
14
not
to.
But
I
would
like
to
just
at
least
identify
them.

15
Mr.
Mike
Jeffries
of
Lane
Parts,
who
is
a
rebuilder,
who
16
would
like
to
participate
in
the
Carl
Moyer
Program;
and
17
also
Mr.
Bob
Rasmussen,
who
is
the
Chairman
and
Founder
of
18
IPD
Parts
of
Torrance,
California,
who
is
one
of
the
three
19
major
parts
suppliers
in
the
heavy­
duty
aftermarket.

20
And
the
other
three
I've
asked
to
be
very,
very
21
brief.

22
Thank
you
very
much
for
your
time.

23
CHAIRPERSON
LLOYD:
Thank
you
very
much
indeed.

24
I
would
ask
if
you
could
keep
your
comments
to
25
three
minutes.
And
I
guess
I
will
enforce
that.
If
we
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
have
questions,
obviously
that's
added
on.
But,

2
particularly,
when
again
you're
speaking
in
favor
of
the
3
staff
proposal.

4
Thank
you.

5
MR.
HOEK:
Good
morning.
My
name's
Steve
Hoek.

6
I'm
the
Vice
President
of
North
State
Truck
Equipment
up
7
in
Redding,
California.
We've
been
in
business
since
8
1978.
And
we're
a
rebuilder
engines,
transmissions,
and
9
rear­
ends
for
the
heavy­
duty
truck
market.

10
Being
an
independent
rebuilder,
we
build
all
11
different
makes
and
all
different
brands.
We've
supplied
12
about
20
engines
to
the
Carl
Moyer
Program
since
the
year
13
2000.
I
just
wanted
to
give
you
some
background
on
how
we
14
build
engines.

15
We
build
engines
back
to
the
OE
specs.
We
16
actually
have
a
dyno
facility
and
a
test
cell
where
we
17
check
all
the
parameters.
Our
engines
carry
the
same,
if
18
not
better,
warranties
as
the
OEM's.

19
But
the
cost
savings
on
engines
that
come
from
us
20
versus
the
OE
dealers
up
in
our
area
is
quite
a
bit
21
difference
in
price.
The
average
price
on
a
Cummins
22
repower
from
our
company
is
approximately
$
19,000
versus
23
24,000
by
the
OEM
truck
dealers.
And
on
a
Cat
engine
24
repower
our
company's
price
is
approximately
$
21,000
25
compared
to
$
28,000
by
the
same
OE
truck
dealer.
And
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
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1
these
prices
were
verified
by
the
Shasta
County
Air
2
District.
So
our
numbers
are
correct.

3
I'd
also
like
to
let
you
know
what
our
company
is
4
doing
even
though
we
are
an
independent
rebuilder.
We're
5
in
the
process
of
right
now
of
upgrading
our
dyno
to
6
sample
oxides
of
nitrogen,
hydrocarbons,
carbon
dioxide.

7
We've
been
doing
PM
for
a
long
time.

8
CHAIRPERSON
LLOYD:
This
is
really
an
9
advertisement
for
your
company,
and
I
appreciate
that.

10
But
I
think
again
keeping
what
we're
trying
to
address
11
here,
if
you
could
just
be
specific
in
terms
of
addressing
12
the
staff
proposal.

13
MR.
HOEK:
As
a
non­
OE
we
have
supplied
quite
a
14
few
engines
for
you.
And
what
brought
us
to
here
is
15
hearing
the
wording
that
we
were
going
to
get
cut
out
of
16
the
loop.

17
CHAIRPERSON
LLOYD:
Staff
was
heard
you,
and
18
we're
very
pleased
that
they
did.

19
Thank
you.

20
Mr.
McKinnon.

21
BOARD
MEMBER
McKINNON:
Do
you
use
the
OEM's
22
parts
when
you
do
your
rebuilds
or
do
you
manufacture
and
23
machine
­­

24
MR.
HOEK:
I
don't
manufacture.
I
am
a
25
rebuilder.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
I
have
been
­­
we
have
been
a
Cummins
dealer
2
since
1979,
until
January.
We
were
let
go
as
a
Cummins
3
dealer
because
we
deal
in
the
aftermarket
parts
industry.

4
We
have
been
with
Federal­
Mogul
since
1989.
We
5
have
approximately
­­
I
would
say
we've
sold
over
4,000
6
engine
kits
with
their
product.
Very
good
product.

7
BOARD
MEMBER
McKINNON:
So
you
use
an
aftermarket
8
supplier
that
supplies
to
lots
of
folks.
So
­­

9
MR.
HOEK:
Absolutely.

10
BOARD
MEMBER
McKINNON:
Okay.
You
don't
11
manufacture
your
own
parts?

12
MR.
HOEK:
No.
No,
we
assemble,
we
assemble.

13
BOARD
MEMBER
McKINNON:
Great.
Thanks.

14
CHAIRPERSON
LLOYD:
Thank
you
very
much.

15
So
we've
got
Bill
Mirth,
Jay
Wagner,
Steve
Hurd.

16
MR.
MIRTH:
Thank
you.

17
My
names
is
Bill
Mirth.
I'm
the
National
Sales
18
Manager
for
the
FP
Diesel
brand
of
parts
offered
by
19
Federal­
Mogul.

20
Federal­
Mogul
is
a
global
supplier
of
engine
21
components
and
subsystems.
We
serve
the
world's
OE
and
22
aftermarket
markets.
We
employ
49,000
people
worldwide.

23
And
we're
close
to
a
$
6
billion
corporation.

24
We
have
a
unique
mix
of
53
percent
of
our
25
products
go
to
our
OE
customers,
while
47
percent
go
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
55
1
our
aftermarket
customers.

2
And
we
also
have
over
200
manufacturing
3
facilities
worldwide.
We
do
produce
the
liners
and
the
4
pistons
and
the
valves
and
gaskets
and
so
forth.

5
And
FP
Diesel
is
our
brand
offering,
and
our
6
headquarters
is
in
Westminster,
California,
where
we
7
employ
close
to
100
people.

8
We
support
and
we
thank
the
Board
for
considering
9
our
proposal
of
changing
the
wording,
because
we
provide
10
equal
specifications
in
qualities
for
our
OE
and
11
aftermarket
customers
alike.
And
since
aftermarket
12
components
are
less
expensive
than
OE,
the
Carl
Moyer
13
Program
can
go
farther
in
supplying
product
for
engines.

14
CHAIRPERSON
LLOYD:
Thank
you
very
much.
I
thank
15
you
for
keeping
the
time.

16
Jay
Wagner,
Steve
Hurd,
Clayton
Miller.

17
MR.
WAGNER:
Good
morning.

18
I'm
Jay
Wagner,
and
I'm
here
representing
Dana
19
Corporation.

20
Dana
Corporation
is
based
in
Toledo,
Ohio.
And
21
we're
operating
and
reproducing
automotive
parts
for
both
22
the
original
equipment
manufacturers
and
the
aftermarket
23
for
nearly
100
years.

24
In
2002
Dana
reported
sales
of
$
10
billion
in
25
sales
and
employs
over
60,000
people
throughout
the
world.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
Our
goal
is
to
generate
sales
for
about
50
2
percent
of
the
aftermarket
and
50
percent
of
the
OE.

3
Currently
we
produce
axles,
brake
systems,

4
chassis,
bearings,
liners,
filtration
systems,
camshafts,

5
for
both
the
aftermarket
and
the
OE.

6
The
list
of
people
that
we
are
currently
7
producing
­­
and
I'll
try
to
keep
this
very
short
­­
are
8
John
Deere,
Ford
Motor
Company,
Caterpillar,
Cummins,

9
Daimler­
Chysler,
Detroit
Diesel,
Fiat,
General
Motors,

10
Honda,
Mack,
Navistar,
Nissan,
Toyota,
Wakishaw.
The
same
11
technology
that
we
place
into
the
OE
product
is
placed
12
into
our
aftermarket
product.

13
Dana
became
involved
when
we
had
heard
that
there
14
was
a
change
in
the
way
the
wording
was
on
the
Carl
Moyer
15
Program.
And
we
feel
though
we've
been
working
very
16
closely
with
the
staff
to
change
that
wording
so
that
we
17
will
have
a
level
playing
field.

18
We
support
the
new
wording.
And
we
want
to
thank
19
you
for
the
time.
Thank
you.

20
CHAIRPERSON
LLOYD:
Thank
you
very
much
indeed.

21
Next,
Steve
Hurd.

22
MR.
HURD:
Good
morning.
I'm
Steve
Hurd
from
23
Caterpillar
in
Peoria,
Illinois.

24
Caterpillar
has
been
actively
participating
in
25
the
Carl
Moyer
Program
now
for
a
few
years
and
we
are
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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57
1
committed
to
this
success
of
this
program.
And
really
I'm
2
here
to
support
these
changes.
Most
of
them
are
going
to
3
improve
the
program.
I
just
realized
this
morning
though
4
about
this
OEM­
only
wording.
And
I
guess
­­
I
don't
want
5
to
belabor
the
point
or
argue
here
in
front
of
the
Board.

6
I
think
­­
we
have
not
yet
met
with
the
staff.
I
don't
7
represent
our
reman
program.
But
we
will
meet
with
the
8
staff
in
the
near
future
on
this
issue
of
OEM­
only
9
remanufactured
engines.

10
I
guess
I
could
make
a
few
comments.

11
The
way
it
was
written
where
the
parts
must
be
12
procured
from
the
OEM,
you
know,
this
will
help
assure
13
that
the
expected
emissions
reductions
do
occur,
without
a
14
lot
of
excess
effort.
Basically,
only
Caterpillar
knows
15
Caterpillar
specifications.
All
the
recent
engineering
16
upgrades
are
going
to
be
included
in
our
remanufactured
17
engines
as
well.

18
We're
prepared
to
run
a
complete
eight­
mode
19
emissions
test
in
an
EPA
certified
lab
for
our
Cat
reman
20
emissions
repower
engine
arrangements.
And
I
guess
21
basically
­­
we're
prepared
next
month
to
meet
and
discuss
22
this
issue
with
the
ARB
staff.

23
Thank
you.

24
CHAIRPERSON
LLOYD:
Thank
you.
And
I
encourage
25
you
to
do
so
there.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
58
1
Thank
you.

2
Next
we
have
Clayton
Miller,
Rick
McCourt,

3
Gretchen
Knudsen.

4
MR.
MILLER:
Good
morning,
Chairman
Lloyd
and
5
members
of
the
Board.
My
name
is
Clayton
Miller.
And
I
6
am
representing
the
Construction
Industry
Air
Quality
7
Coalition.

8
CIAQC
is
comprised
of
the
four
major
construction
9
and
home­
building
industries
in
southern
California,
which
10
include
the
Associated
General
Contractors
of
California,

11
Building
Industry
Association
of
Southern
California,

12
Engineering
Contractors
Association
of
Southern
13
California,
Contractors
Association,
representing
14
approximately
3300
member
companies.

15
I
am
here
this
morning
to
express
CIAQC's
support
16
for
the
proposed
revisions
to
the
Carl
Moyer
Program
17
guidelines.
CIAQC
believes
that
this
is
a
very
important
18
program
that
provides
meaningful
incentives
for
projects
19
that
result
in
real
quantifiable
and
cost­
effective
20
emission
reductions.

21
Many
CIAQC
member
companies
recognize
the
value
22
of
this
program
and
other
incentive­
based
programs
23
operating
in
the
South
Coast
AQMD.
To
date
grants
to
24
CIAQC
member
companies
have
resulted
in
repowering
of
over
25
270
off­
road
diesel
powered
engines
since
mid­
2001,
with
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SHORTHAND
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1
resulting
NOx
emission
reductions
of
about
1.9
tons
per
2
day.

3
With
me
this
morning
is
Rick
McCourt
with
Sukut
4
Construction,
a
company
that
has
shown
tremendous
5
initiative
and
has
repowered
57
heavy­
duty
off­
road
6
engines.

7
CIAQC
supports
staff's
recommendations
for
8
technical
revisions,
including
calculation
method
9
revisions,
emission
factor
adjustments
for
older
engines,

10
and
allowing
local
air
districts
to
consider
the
11
cost­
effectiveness
of
reducing
PM
when
selecting
12
proposals.

13
CIAQC
also
supports
what
we
believe
to
be
as
14
staff's
recommendation
that
engine
repowers
do
not
15
necessarily
need
to
be
performed
only
by
an
OEM
dealership
16
or
distributor.

17
Several
CIAQC
member
companies
have
repowered
18
their
equipment
in­
house
or
in
the
field,
such
as
Sukut
19
Construction.
We
do
not
believe
emission
reductions
will
20
only
be
achieved
if
OEM
dealerships
or
distributors
21
perform
the
project
installations.

22
What
I'm
here
this
morning
to
ask
for
is
we
are
23
asking
for
further
clarification
of
the
guidelines
that
24
expressly
make
this
point.

25
Without
the
opportunity
for
companies
to
select
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
between
0EM
dealerships
or
distributors
or
utilizing
their
2
own
in­
house
capacities
to
repower
approved
projects,
many
3
companies
simply
will
not
be
able
to
participate
in
the
4
program.

5
We
believe
Carl
Moyer
is
a
very
cost­
effective
6
program,
and
the
recommended
revisions
to
the
guidelines
7
will
further
enhance
this
important
incentive­
based
8
program.

9
Thank
you.

10
CHAIRPERSON
LLOYD:
Thank
you
very
much.

11
Rick
McCourt,
Gretchen
Knudsen,
and
Sandra
12
Spelliscy.

13
MR.
McCOURT:
Good
morning,
ladies
and
gentlemen.

14
My
name
is
Rick
McCourt
with
Sukut
Construction.

15
Our
company
is
a
general
engineering
contractor
with
16
operations
in
southern
California.
Our
core
business
is
17
earth
moving.
So
we
use
a
fleet
of
heavy
off­
road
18
construction
pieces
of
equipment
numbering
over
130.

19
Our
company's
been
proud
to
participate
in
engine
20
replacement
programs
with
not
only
Carl
Moyer,
ARB,
and
21
MSRC.
And
our
accomplishments,
Clayton
mentioned
we've
22
repowered
57
units
right
now.
Forty
of
those
have
been
23
done
by
our
staff
in
the
field.

24
We've
sourced
17
of
those
conversions
through
the
25
dealer
network
primarily
based
on
the
time
and
production
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
constraints.

2
We've
sent
23
of
our
in­
house
mechanics
through
3
dealer
technical
courses
to
understand
the
complexity
of
4
the
electronic­
controlled
engine
systems.
With
that
we've
5
purchased
and
installed
laptop
computer
systems
with
the
6
diagnostic
software
in
the
field
to
ensure
we
got
the
7
proper
emissions
in
optimum
performance
parameters.

8
We
have
found
OEM
warranties
have
been
valid
with
9
our
field
installations.
There's
no
cut
in
the
warranty
10
program,
whether
our
people
do
it
or
whether
the
dealers
11
do
it.

12
We
strongly
support
the
staff
to
allow
the
13
contractor
to
do
the
conversions,
engine
replacements
in
14
the
field,
as
we've
shown
significant
success
in
doing
15
today.

16
And
my
final
comment
would
be,
we're
proud
to
17
partner
in
these
programs
with
ARB,
South
Coast,
and
the
18
other
air
districts
that
we
work
in,
and
hope
to
do
more
19
in
the
future.

20
Thank
you.

21
CHAIRPERSON
LLOYD:
Thank
you
very
much.

22
Yes,
Mr.
McKinnon
has
got
a
question
for
you,
Mr.

23
McCourt.

24
BOARD
MEMBER
McKINNON:
Are
your
in­
house
25
mechanics
apprenticed
or
otherwise
trained?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
No,
all
of
our
mechanics
are
members
of
the
2
Operating
Engineers
Local
12
Union.
Most
are
journeyman
3
mechanics.
We
have
some
apprentice
mechanics
that
are
4
supervised
by
journeymen.

5
BOARD
MEMBER
McKINNON:
But
the
journeymen
have
6
been
through
an
apprenticeship,
is
that
­­
somewhere
along
7
the
line?

8
MR.
McCOURT:
Yes.
That's
the
normal
progression
9
through
the
union
ranks.

10
BOARD
MEMBER
McKINNON:
Great.
Thanks.

11
CHAIRPERSON
LLOYD:
Thank
you.

12
Gretchen
Knudsen,
Sandra
Spelliscy,
Bonnie
13
Holmes­
Gen.

14
MS.
KNUDSEN:
Good
morning.
My
names
is
Gretchen
15
Knudsen.
I'm
here
today
representing
International
Truck
16
and
Engine
corporation.

17
We
stand
in
support
of
the
guidelines.
I'm
not
18
going
to
comment
specifically
on
the
repower
issue
at
this
19
time.
But
I
did
want
to
speak
directly
on
the
20
Lower­
Emission
School
Bus
Program.
We
really
appreciate
21
the
work
that
staff
has
taken
in
their
careful
22
consideration
of
the
program,
of
the
implementation
23
guidelines.
And
we
wanted
to
voice
our
support.

24
I
also
wanted
to
just
thank
and
remind
the
Board
25
again
that
California
is
the
first
state
in
the
country
PETERS
SHORTHAND
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CORPORATION
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1
that
has
low­
emitting
diesel
technology
school
buses
in
2
use
throughout
the
state.
And
you're
really
setting
an
3
example
for
a
lot
of
the
other
states
as
far
as
4
implementing
this
technology.
We
were
pleased
that
there
5
was
the
ability
of
the
state
to
continue
this
program.

6
Thank
you.

7
CHAIRPERSON
LLOYD:
Again,
Thank
your
company
for
8
this
leadership
on
this
issue,
combined
with
getting
the
9
low
sulphur
diesel
to
do
that.
Thank
you.

10
Next
we
Sandra
Spelliscy,
Bonnie
Holmes­
Gen,
and
11
Mark
Nordheim.

12
MS.
SPELLISCY:
Sandra
Spelliscy
with
the
13
Planning
and
Conservation
League.

14
I
just
want
to
say
briefly
we're
also
in
support
15
of
the
changes
recommended
by
the
staff
today.

16
Particularly
like
the
fact
that
we
continue
to
drive
17
improvements
and
technology
by
supporting
equipment
that
18
meets
lower
standards.
So
we're
happy
to
see
that
19
recommendation
today.

20
And
I
just
want
to
add
that
the
single
greatest
21
challenge
that
we
face
in
both
of
these
programs
is
that
22
we
simply
don't
have
enough
money
to
do
what
we
need
to
23
do.
And
we
are
looking
forward
to
working
with
all
of
24
you,
and
urge
you
to
bring
any
influence
you
have
to
bear
25
on
the
administration,
on
the
Legislature
to
work
to
get
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
some
permanent
funding
for
these
programs,
because
they're
2
vital
and
we
just
don't
have
the
money
today
to
do
what
we
3
need.

4
Thank
you.

5
CHAIRPERSON
LLOYD:
Thank
you,
Sandy.
I
agree
6
with
you
completely.

7
Bonnie
Holmes­
Gen,
Mark
Nordheim,
Dean
Taylor.

8
MS.
HOLMES­
GEN:
I'm
Bonnie
Holmes­
Gen
with
the
9
American
Lung
Association
of
California.

10
I
just
wanted
to
join
the
comments
of
my
11
colleague,
Sandra
Spelliscy,
that
we
too
are
strong
12
supporters
of
these
programs.
We
definitely
need
to
get
a
13
stable,
long­
term
source
of
funding
for
these
programs.

14
And
that's
really
the
next
big
task
that
we
all
need
to
15
work
on
together
and
that
we
are
working
on
in
the
16
Legislature.

17
We
believe
these
proposed
program
changes
are
18
enhancements
to
the
program.
They're
positive
and
we
19
support
them,
especially
adding
flexibility
with
regard
to
20
PM­
only
projects.
That's
a
big
concern
of
ours,
because
21
we
do
need
to
do
as
much
as
possible
to
reduce
diesel
22
particulates.
So
we
ask
your
support
for
these
changes.

23
CHAIRPERSON
LLOYD:
Thank
you.

24
BOARD
MEMBER
BURKE:
Mr.
Chair.

25
CHAIRPERSON
LLOYD:
Yes,
Dr.
Burke.

PETERS
SHORTHAND
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CORPORATION
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1
BOARD
MEMBER
BURKE:
We
at
this
end
of
the
podium
2
were
particularly
waiting
for
her
testimony,
because
on
3
our
sheet
here
it
says
that
she's
with
the
American
Lunch
4
Association.

5
And
so
I
told
the
fellow
members
I
was
really
6
going
to
support
whatever
she
wanted.

7
(
Laughter.)

8
CHAIRPERSON
LLOYD:
I
think
that
must
be
a
9
subsidiary
to
the
California
Restaurant
Association.

10
Thank
you.

11
Mark
Nordheim,
Dean
Taylor,
Tom
Addison.

12
MR.
NORDHEIM:
Mr.
Chairman
and
Board
members,
my
13
name
is
Mark
Nordheim.
I'm
with
the
Chevron­
Texaco
14
Corporation.
But
I'm
here
today
representing
the
Western
15
States
Petroleum
Association.

16
And
I
want
to
start
my
presentation
with
a
wee
17
apology
to
the
staff
and
the
Board
for
our
sort
of
late
18
reentry
into
this
issue.
But
there
are
a
number
of
19
current
events
that
have
significantly
renewed
our
20
interest
in
these
programs,
the
first
of
which
is
sort
of
21
the
massive
state
budget
crisis
that
we're
facing
and
the
22
generally
poor
economic
situation
that
exists
in
the
23
state.
In
our
view,
that
drives
us
to
search
as
hard
as
24
we
possibly
can
in
search
of
the
most
cost­
effective
25
utilization
of
the
money
that's
currently
available
to
us
PETERS
SHORTHAND
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CORPORATION
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1
in
the
system.

2
We're
facing
­­
this
program
was
designed
­­
and
3
I'm
talking
about
both
the
Moyer
Program
and
the
School
4
Bus
Program
­­
to
try
and
get
at
those
source
categories
5
that
were
either
hard
to
regulate
or
there
are
economic
6
hardships
associated
with
those
regulations.
That
7
includes
things
as
far
and
wide
as
was
talked
about
in
the
8
staff
report
earlier.
But
that's
the
ports
of
L.
A.
­­
los
9
Angeles,
the
ports
of
Oakland,
all
the
federal
sources
­­

10
planes,
boats,
and
trains
that
we've
all
been
chasing
the
11
feds
to
try
and
get
a
handle
on.
It
includes
agricultural
12
engines
in
the
Sacramento
and
San
Joaquin
Valleys.
It
13
certainly
includes
the
school
buses
and
many,
many
other
14
types
of
programs.
So
we
think
it's
absolutely
imperative
15
that
we
do
everything
we
can
to
focus
the
maximum
value
of
16
the
limited
resources.

17
CHAIRPERSON
LLOYD:
You've
got
about
a
minute,

18
Mark.

19
MR.
NORDHEIM:
You
mean
all
42
of
those
got
three
20
and
there's
one
guy
on
this
side
gets
­­
I'll
be
­­

21
CHAIRPERSON
LLOYD:
No,
no,
no,
no,
unless
we
22
bank
some
of
the
credits
from
a
couple
of
the
previous
23
speakers,
which
I'll
do.
But
I'll
give
you
two
at
most.

24
MR.
NORDHEIM:
Okay.
A)
We
want
to
­­
we're
25
very
much
supportive
of
the
staff
recommendation
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
create
­­
what
we
think
is
a
very
creative
way
to
bring
2
some
PM
control
into
the
program.
Remember
that
because
3
I'm
going
to
loop
back
to
it
in
the
School
Bus
Program.

4
We
really
want
to
encourage
the
staff
and
the
5
Board
to
scrub
the
guidelines
on
both
ends
to
make
sure
6
that
we're
really
focusing
monies
on
non­
mandated
7
programs.

8
The
school
­­
let
me
jump
to
the
School
Bus
9
Program.
We
really
have
two
serious
recommendations.
And
10
we're
concerned
by
the
fact
that
the
retrofit
money
for
11
diesel
technology
has
dropped
out,
and
that
the
funding
12
for
future
new
vehicle
purchases
is
biased
two­
thirds
to
13
alternative
fuels
and
one­
third
to
diesel.
If
you
look
at
14
the
cost
benefit
numbers
that
were
talked
about
by
the
15
staff
today,
75
percent
of
the
emission
reductions
that
16
will
have
occurred
by
the
end
of
2003
will
come
from
the
17
retrofit
program.
If
you
look
at
the
cost
of
these
new
18
buses
using
the
math
in
this
staff's
report,
the
new
19
vehicles
come
out
at
$
307,000
a
ton
for
combined
NOx
and
20
PM.

21
That
emphasizes
the
importance
from
trying
to
do
22
whatever
we
can
to
trying
and
keep
as
much
of
the
retrofit
23
programs
on
the
diesel
side
in
play.

24
The
language
­­
the
controlling
language
in
AB
25
425
talks
about
the
acquisition
or
the
­­
it
doesn't
talk
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
about
the
purchase.
It
doesn't
talk
about
new.
And
so
we
2
think
there's
flexibility
in
there
to
deal
with
the
issue.

3
We
think
it
gives
you
the
flexibility
to
stick
to
your
4
original
policy
decisions
and
invest
half
the
money
on
5
diesel,
half
of
the
money
on
alternative
fuels,
and
then
6
split
the
diesel
50/
50
between
new
and
old.

7
As
a
minimum
we
would
strongly
encourage
you
to
8
look
at
what
you're
doing
with
the
PM
program
in
the
Moyer
9
Program.
There's
a
tremendous
opportunity
to
use
matching
10
money
to
get
into
the
retrofit
arena.
We
can't
let
the
11
retrofit
program
go
or
you
lose
75
percent
of
the
benefit
12
of
the
investment.

13
Jumping
quickly
to
the
distribution
between
14
alternative
fuels
and
diesel.
If
you
look
at
the
original
15
recommendation
from
the
Board
to
the
staff,
it
talked
16
about
distributing
the
money
50
percent
to
alternative
17
fuels
and
50
percent
to
diesel
technology.
It
didn't
say
18
50
percent
for
new
CNG,
50
percent
for
new
diesel.
We
19
think
that
if
you
can't
find
a
way
to
keep
the
retrofit
20
programs
in,
you
ought
to
be
at
least
keeping
the
21
technology
on
an
even
playing
field,
particularly
since
22
the
diesel
technology
incrementally
is
cheaper
than
the
23
alternative
fuel
technology.

24
I
heard
reference
to
some
of
the
new
CNG
buses
25
coming
on
line
with
particulate
traps.
We
were
a
little
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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69
1
bit
puzzled
that
this
proposal
doesn't
require
the
use
of
2
oxidation
catalysts
on
CNG
purchased
buses
by
virtual
of
3
the
data
that's
come
to
light
through
your
research.

4
We
think
that
the
funding
mechanism
in
this
is
5
bias
towards
alternative
fuels
to
the
6
counterproductiveness
of
achieving
the
greatest
emission
7
reductions
for
the
greatest
investment
in
the
taxpayer's
8
money.

9
We
think
there's
some
critical
things.
We
think
10
that
there's
ways
to
improve
this.
We'd
like
to
suggest
11
that
the
Board
direct
the
staff
to
seriously
consider
12
those
kinds
of
things.
If
you'd
like
to
make
those
13
recommendations
today,
fine.
But
we
think
they're
14
important
enough
that
they
need
to
be
vetted.
And
if
15
you're
not
ready
and
prepared
to
act
today,
then
we'd
like
16
to
see
this
proposal
back
in
front
of
the
Board
before
you
17
take
final
action.

18
Thank
you.

19
CHAIRPERSON
LLOYD:
Thank
you,
Mark.

20
Any
questions?

21
Thank
you.

22
I
guess
we'll
come
back
and
­­
I'd
like
some
23
staff
comments
on
those
issues
raised
by
Mark
there.

24
We'll
come
back
on
that,
Mark.

25
MR.
NORDHEIM:
I'll
be
here
if
you'd
like
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
70
1
chat.

2
CHAIRPERSON
LLOYD:
Thank
you.

3
Dean
Taylor,
Tom
Addison,
Henry
Hogo.

4
MR.
TAYLOR:
Good
morning.
My
name
is
Dean
5
Taylor.
I
work
for
an
electric
utility.
But
I'm
here
6
representing
the
California
Electric
Transportation
7
Coalition,
which
is
the
four
large
electric
utilities
in
8
the
State
of
California
as
well
as
a
number
of
component
9
suppliers
for
electric­
drive
vehicles.

10
And
we
want
to
apologize
for
being
maybe
late
11
commenters
on
this.
But
we
have
a
long
history
with
the
12
Moyer
Program.
In
fact
Dave
Modisette
and
myself
and
13
others
worked
with
Carl
Moyer
getting
this
through
the
14
Legislature
and
have
been
long­
time
supporter
of
this,
for
15
a
very
long
time.
But
you
might
say
our
industry's
been
a
16
bit
distracted
recently,
so
we
haven't
paid
very
close
17
attention.

18
But
I
think
we
have
enormous
enthusiasm
for
the
19
non­
road
side.
We
worked
hard
on
the
original
program
to
20
have
non­
road
vehicles,
you
know,
be
eligible.
And
would
21
suggest
that
we
would
like
to
work,
you
know,
in
the
next
22
round
with
the
Board
and
staff
for
improvements
in
this
23
program.
They're
particularly
cost­
effective
programs,

24
the
non­
road.
In
fact
the
forklifts
in
the
current
25
regulations
are
I
think
the
only
one
that
has
to
meet
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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71
1
$
3000
per
ton
cap.
Everything
else
is
much
higher,
as
2
high
as
13,000
per
ton.

3
We
have
three
specific
maybe
suggestions
just
to
4
call
out
some
interesting
possibilities
for
the
future.

5
One
is
truck
refrigeration
units
have
huge
NOx
6
reduction
potential.
I
mean
it's
just
amazing.
We're
7
doing
a
project
out
in
the
Riverside
area,
it's
probably
8
in
the
$
1,000
to
$
2,000
per
ton
range.
There
may
need
to
9
be
some
clarification
or,
maybe
even
better,
specific
set
10
of
rules
just
for
that
technology
as
the
emission
11
reduction
potential
is
so
large.

12
Three
is
the
issue
­­
I
mean
second
is
the
issue
13
on
forklifts.
There
is
a
proposed
upcoming
regulation
14
that
would
do
a
command
control
regulation
for
forklifts.

15
And
that
probably
isn't
a
wonderful
thing.
But
prior
to
16
that
we
would
suggest
that
those
forklifts
that
are
17
converted
under
the
Moyer
Program
to
electric
very
18
cost­
effectively
get
emission
credit
for
their
full
life.

19
Right
now,
if
I'm
correct,
the
staff
is
saying
20
that
they
would
just
get
two
years
of
emission
reduction.

21
Say
you
buy
it
in
2003;
this
new
tailpipe
emission
22
standard
comes
in
2005;
you
would
just
get
two
years
of
23
emission
reductions.
We
think
that
should
be
the
full
24
life
of
that
electric
forklift.
So
let's
say
it's,

25
whatever,
ten
years.
That
would
make
it
very
cost
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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72
1
effective.

2
And
that's
my
understanding
is
the
traditional
3
way
its
been
done,
you
know,
with
other
business
4
organizations
in
the
state.
If
you
beat
­­
you
know,
if
5
you're
earlier
than
the
adoption
of
a
new
proposed
SIP
6
measure,
then
you
get
full
credit.

7
And
then,
lastly,
maybe
other
areas
of
the
state
8
need
to
have
a
higher
cap
than
this
$
3,000
per
ton.
Would
9
suggest
maybe
the
Board
would
consider
or
the
staff
would
10
consider
having
it
up
at
a
higher
number,
let's
say,

11
12,000,
so
that
that
would
allow
areas
such
as
Sacramento
12
or
the
Central
Valley
that
have
early
attainment
dates
to
13
take
advantage
of
this,
rather
than,
you
know,
having
to
14
meet
this
very
tough
requirement
of
3,000.
Some
electric
15
forklifts
obviously
can,
but
I'm
saying
not
all
of
them
16
can.

17
And,
lastly,
just
to
end,
let's
work
together
to
18
find
ways
to
capture
the
electric
utilities'
enthusiasm.

19
We
obviously
get
a
lot
of
requests
from
our
customers
all
20
over
the
state,
in
interest,
be
it
a
bag
tug
or
a
forklift
21
or
a
truck
refrigeration
unit
to
electrify.

22
CHAIRPERSON
LLOYD:
Thank
you.

23
Tom
Addison
and
Henry
Hogo.

24
MR.
ADDISON:
Good
morning,
Dr.
Lloyd,
Board
25
members.
My
name's
Tom
Addison.
I'm
with
the
Bay
Area
PETERS
SHORTHAND
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CORPORATION
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916)
362­
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73
1
Air
District.
I'm
not
here
today
to
talk
about
OEM
or
2
aftermarket
parts.
I'll
also
try
to
be
brief.

3
I'm
actually
here
today
to
speak
against
the
4
proposed
staff
distribution
of
the
Prop
40
Moyer
funding.

5
But
before
I
do
that,
I'd
like
to
say
a
couple
of
things
6
about,
from
our
perspective
for
the
Bay
Area
Air
District,

7
what
a
well­
run
and
well­
managed
program
we
think
this
is.

8
We
actually
think
this
is
an
example
of
how
local
9
districts
and
ARB
are
working
successfully
together
in
a
10
way
that
really
is
exemplary
to
cut
diesel
exhaust
and
to
11
reduce
public
exposure
to
it.
And
that's
very
much
a
good
12
thing.

13
I'd
also
like
to
let
you
know
that
while
we've
14
been
making
the
comments
that
I'm
going
to
make
today
for
15
roughly
the
last
four
years,
we've
had
­­
and
we
16
appreciate
the
opportunity
to
talk
with
your
staff
about
17
it.
And
we
very
much
appreciate
their
receptiveness
to
18
hearing
us
out
on
it.
And
so
I
wanted
to
make
sure
that
19
the
Board
did
as
well.

20
So
essentially
what
we're
proposing
is
that
the
21
staff
distribution
is
flawed
because
it
doesn't
make
sense
22
for
a
variety
of
reasons.
Most
significantly
for
public
23
health
reasons.
We
think
the
distribution
should
be
based
24
solely
on
population.

25
Right
now
the
distribution
includes
a
1994
SIP
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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74
1
control
measure,
Control
Measure
M4.
And
that
control
2
measure
has
officially
expired.
It
expired
last
year.

3
And
we
don't
think
that
using
that
distribution
today
in
4
2003
makes
much
sense.

5
The
reason
that
we
don't
think
it
makes
sense
is
6
that
we
think
the
biggest
public
health
benefits
to
the
7
Carl
Moyer
Program
come
from
reducing
public
exposure
to
8
diesel
particulate.
That's
where
the
real
public
health
9
benefits
of
the
program
are.
And
the
way
that
you
10
maximize
reduction
of
exposure
to
diesel
particulate
is
11
you
give
out
the
funding
based
on
population
density.

12
Why
is
that?

13
Because
unfortunately
diesel
exhaust
is
14
everywhere.
It's
ubiquitous
in
our
society.

15
So
to
maximize
the
public
health
benefit,
to
16
minimize
the
exposure
to
diesel
particulate,
we
think
the
17
right
strategy
is
to
give
out
the
money
based
on
18
population
density.

19
Now,
population
density
is
hard
to
figure
out.

20
Population
is
a
good
surrogate
for
population
density.
We
21
think
population
is
the
right
thing
to
use
from
a
22
practical
point
of
view
because
population
density
is
hard
23
to
get
a
handle
on.

24
So
we
would
say
that
public
health,
population
is
25
the
right
way
to
go.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
75
1
What
about
equity?

2
CHAIRPERSON
LLOYD:
Can
you
­­

3
MR.
ADDISON:
I'll
be
brief.
I'm
almost
done.

4
From
an
equity
perspective,
this
a
bond
measure.

5
Everybody
contributes
in
the
State
of
California
equally
6
to
bond
funding.
Currently
we
would
argue
the
benefits
­­

7
the
public
health
benefits
are
not
being
distributed
8
equitably.

9
We
think
there
are
some
political
arguments
as
10
well
for
looking
at
the
distribution.

11
Fundamentally
I
think
Ms.
Witherspoon
got
it
12
right.
Ms.
Witherspoon
said
to
you
the
statute
is
out
of
13
step
with
where
we
are
now.
And
that's
I
think
a
14
reflection
of
the
shift
in
our
understanding
of
the
15
epidemiology
and
the
relative
importance
of
PM
reductions
16
versus
ozone
reductions.

17
Our
legal
counsel
feels
that
you
certainly
have
18
the
ability
as
an
agency
administratively
under
the
19
current
statute
to
change
the
distribution
to
one
based
on
20
population.

21
Sorry
to
be
a
little
longer.

22
CHAIRPERSON
LLOYD:
So
your
legal
counsel's
23
agreeing
with
the
letter
we
got
from
the
Legislature
that
24
we
have
the
administrative
authority?

25
MR.
ADDISON:
Indeed.
We
would
argue
that
you've
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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76
1
got
the
authority
today
to
change
it
to
population.
We
2
also
think
that
it
makes
sense
as
well,
aside
from
the
3
legal
issue
of
whether
or
not
it's
feasible.

4
CHAIRPERSON
LLOYD:
Thank
you.

5
Any
questions?

6
Dr.
Burke.

7
BOARD
MEMBER
BURKE:
I'm
confused
on
how
much
8
money
we're
talking
about
here.
Can
you
give
me
a
9
ballpark
number?

10
MR.
ADDISON:
Sure.
Roughly
­­
I
mean
staff
is
11
probably
better
at
doing
this.
But
I'd
say
­­
we're
12
talking
about
$
19
million
here
at
Prop
40
funding.
You
13
know,
if
we
throw
some
numbers
for
different
districts,

14
the
Bay
Area's
got
roughly
20
percent
of
the
state's
15
population.
The
Bay
Area
is
currently
getting
about
nine
16
percent
of
the
funding.

17
Contrast
that
with
another
district,
Sac
Metro
18
has
got
­­

19
BOARD
MEMBER
BURKE:
I
was
just
looking
for
the
20
difference
between
what
you're
getting
and
what
you
would
21
get.

22
MR.
ADDISON:
Oh,
sure.
That's
about
1.8
23
million,
roughly.

24
CHAIRPERSON
LLOYD:
And
where
would
that
come
25
from?
Maybe
staff
can
answer
­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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77
1
MR.
ADDISON:
There
are
two
­­

2
CHAIRPERSON
LLOYD:
No
­­
obviously
it's
a
fixed
3
sum.
So
if
you
gain,
somebody
else
loses.

4
BOARD
MEMBER
DeSAULNIER:
That's
a
question
for
5
the
CARB
staff,
Tom,
not
for
­­

6
MR.
ADDISON:
Yes.
Although
I
would
be
happy
to
7
answer,
if
you'd
like.

8
EXECUTIVE
OFFICER
WITHERSPOON:
The
districts
9
which
receive
a
higher
proportion
of
funds
based
on
having
10
the
M4
measure
in
their
state
implementation
plans
are
11
Sacramento
Metropolitan,
San
Joaquin
Valley,
Southeast
12
Desert
Air
Basin,
South
Coast
Air
District,
and
Ventura.

13
So
if
we
moved
to
a
population­
only
driven
formula,
money
14
would
shift
from
these
areas
toward
the
Bay
Area
and
San
15
Diego.
It
would
shift
to,
more
or
less
­­
the
degree
­­

16
South
Coast
would
probably
lose
less
because
their
17
population
base
is
still
high.
The
Valley
perhaps
stands
18
to
lose
the
most
­­
San
Joaquin
valley,
because
of
their
19
lower
population
threshold.

20
And
so
it
is
an
issue
of
winners
and
losers,
but
21
also
one
of
policy
on
how
you
think
the
actual
allocation
22
should
be
performed.

23
And
I
do
want
to
clarify,
that
the
Board
has
the
24
authority
today,
should
you
choose,
to
amend
the
way
we've
25
been
doing
it
for
the
last
ten
years.
But
just
to
make
a
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
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1
correction
­­
the
letter
from
the
Legislature
talks
about
2
the
M4
measure
being
expired.
It
is
not.
It
is
part
of
3
our
legally
approved
State
Implementation
Plan.
And
we
4
are
under
active
court
orders
for
failure
to
implement
5
other
aspects
of
that
plan.
And
so
­­
M4
was
a
measure
6
that
said
we
would
develop
an
incentive
program
for
7
cleaning
up
diesels.
It
was
sort
of
an
early­
day,

8
black­
box
kind
of
a
measure,
but
it's
in
there
and
not
9
gone
away.

10
CHAIRPERSON
LLOYD:
Thank
you.

11
Supervisor
DeSaulnier.

12
BOARD
MEMBER
DeSAULNIER:
Catherine,
is
there
an
13
ability
for
staff
to
split
the
baby?
Do
we
have
to
go
all
14
population
based
or
is
­­
because
as
I
read
it,
we
have
15
some
discretion.

16
EXECUTIVE
OFFICER
WITHERSPOON:
We
do
have
17
discretion.
And
we
could
try
and
figure
out
various
18
versions
of
that.
We'd
need
a
little
time
to
work
on
19
that.

20
BOARD
MEMBER
DeSAULNIER:
Well,
it's
just
­­
and
21
I'm
not
speaking
­­
Tom,
this
is
just
from
my
perspective,

22
representing
the
Bay
Area.
It's
just
the
amount
of
23
difference.
It's
double
the
amount
of
money
that
would
be
24
used
by
population,
which
seems
fairly
extreme.
And
it's
25
very
hard
for
me
to
look
at
this
program
in
isolation,

PETERS
SHORTHAND
REPORTING
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362­
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1
because
we've
got
all
these
other
moving
parts
with
­­
our
2
relationship
with
our
downwind
neighbors.
And
I
don't
3
want
to
keep
bringing
up
smog
check,
but
I
was
reminded
4
constantly
by
certain
people
that
I
should
look
at
it
as
a
5
public
health
issue
and
not
specific
to
the
emissions
that
6
we
were
directed
at.
So
that's
the
problem
I'm
having
7
with
this.

8
CHAIRPERSON
LLOYD:
So
one
of
the
downwind
areas.

9
Ms.
D'Adamo.

10
BOARD
MEMBER
D'ADAMO:
Well,
I'm
obviously
11
uncomfortable
with
what
we
have
right
now,
but
­­
I
12
appreciate
what
Supervisor
DeSaulnier
has
done
in
the
past
13
to
open
up
the
dialogue
with
the
Bay
Area
so
that
we
can
14
talk
in
a
more
meaningful
way
about
transport
issues.

15
If
we
look
at
other
surrogates
though,
there
are
16
a
few
issues
­­
well,
first
of
all,
I
think
that
what
we
17
have
right
now
is
fine.
But
if
we
have
to
make
some
18
changes,
it's
crucial
that
we
consider
other
issues
and
19
not
just
population.
For
example,
transport
issues.
That
20
plays
in
quite
a
bit
to
the
equity
issue.
And
public
21
health.

22
We
have,
as
staff
has
repeatedly
reported,
some
23
of
the
highest
asthma
rates
in
the
valley
in
the
nation.

24
And
that's
due
in
no
small
part
to
the
emissions
that
are
25
generated
in
the
valley.
But
in
addition,
we
have
a
PETERS
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1
transported
air
pollution
problem.
And
we've
got
the
I­
5
2
and
I­
99
corridor
running
right
smack
dab
through
the
3
valley,
with
transportation
going
from
northern
to
4
southern
California.

5
So
there's
a
number
­­
it
seems
to
me
that
it
6
would
be
pretty
complex.
I'm
willing
to
engage
in
the
7
discussion.
But
I
would
be
very
uncomfortable
with
it
8
just
being
based
upon
population.

9
CHAIRPERSON
LLOYD:
Supervisor
Roberts.

10
BOARD
MEMBER
ROBERTS:
Yeah,
Mr.
Chairman.
Last
11
time
I
looked
we
weren't
transporting
anywhere.
And
the
12
only
thing
we're
transporting
is
dollars
elsewhere.
And
13
we
shouldn't
be
part
of
this.
And
we
should
be
treated
in
14
a
more
equitable
way
in
San
Diego.
And
I
think
we've
got
15
to
change
this
formula.
And
whatever
agreement
there
is,

16
you
know,
between
those
two
areas
is
interesting,
but
we
17
shouldn't
be
contributing
to
that.

18
You
know,
if
anything,
maybe
some
of
those
South
19
Coast
management
dollars
should
be
coming
because
that's
20
where
the
air's
ending
up.
So
­­
if
you're
talking
about
21
transport.
But
there
isn't
any
justification
for
us
being
22
at
the
level
that
we
are
in
this,
and
these
numbers
ought
23
to
be
changed.

24
CHAIRPERSON
LLOYD:
Dr.
Burke.

25
BOARD
MEMBER
BURKE:
I
am
not
opposed
to
money
PETERS
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CORPORATION
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362­
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1
going
to
any
district
which
needs
it,
you
know.
We
at
2
South
Coast,
you
know,
like
to
feel
that
we
are
all
in
3
this
together.
And
this
is
a
statewide
issue
and
­­

4
CHAIRPERSON
LLOYD:
Bill,
can
you
speak
into
the
5
microphone?

6
Thanks.

7
BOARD
MEMBER
BURKE:
What
I
was
saying
was
that
8
South
Coast,
we
believe
this
is
a
statewide
issue
and
is
9
transportation.
And
I
don't
claim
to
know
about
the
10
issues
in
northern
California
as
well
as
southern
11
California.
But
I
would
not
be
opposed
to
modifying
this
12
formula
even
if
it
costs
South
Coast
some
money.
I'm
not
13
opposed
to
that,
if
it
was
fair
and
equitable.

14
CHAIRPERSON
LLOYD:
Mrs.
Riordan.

15
BOARD
MEMBER
RIORDAN:
Just
a
thought.
Today
I
16
don't
know
that
we
want
to
make
this
division
in
terms
of
17
money.
And
I
would
caution
the
Board
members
to
perhaps,

18
if
it's
possible
and
if
staff
would
agree,
to
move
forward
19
with
the
other
parts
of
it.
And
always
the
division
of
20
money
is
a
difficult
one
and
one
that
I
don't
think
we
21
want
to
do
without
some
thought
process.

22
And
is
that
possible,
staff?
I
really
have
some
23
trouble
making
any
decision
on
money
today.

24
EXECUTIVE
OFFICER
WITHERSPOON:
Well,
there
are
25
two
options
here.
One
is
to
delay
and
evaluate
different
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
allocation
criteria.
We
can't
move
any
money
without
2
knowing
the
primary
allocation
criteria.

3
The
second
option
would
be,
since
this
is
a
4
two­
year
program,
to
apply
the
allocation
criteria
we
have
5
today
to
the
first
year
and
bring
you
a
recommendation
for
6
the
second
year
that
has
a
different
formula
with
lots
of
7
time
to
think
about
it
in
the
meanwhile.
And
that's
how
8
we
propose
to
handle
this
match
question
for
rural
areas.

9
I
don't
know
if
Board
members
are
comfortable
10
having
any
money
get
out
the
door
without
looking
at
the
11
criteria.

12
So
those
are
the
two
­­

13
CHAIRPERSON
LLOYD:
Well,
one
suggestion
might
be
14
that
you
look
at
again
the
Delta
and
some
of
these
areas,

15
and
then
sort
of
put
that
part
aside.
And
then
distribute
16
those
dollars
out
the
door,
that
people
will
­­
make
sure
17
that
everybody
gets
the
floor.

18
Is
that
possible,
so
that
­­
because
I
am
19
sensitive
to
the
point
that
staff
made
that
with
these
20
funds
here
people
want
to
be
able
to
get
the
dollars
out
21
the
door
so
we
can
begin
cleaning
up
the
air
as
soon
as
22
possible.

23
EXECUTIVE
OFFICER
WITHERSPOON:
We're
wrestling
24
with
whether
that's
possible
or
not.
We
certainly
could
25
do
the
floor
of
100,000.
But
that's
trivial.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
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362­
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1
CHAIRPERSON
LLOYD:
No,
no.
I
know
­­

2
EXECUTIVE
OFFICER
WITHERSPOON:
And
we
do
have
a
3
time
constraint
here
to
get
it
to
the
districts
in
time
4
for
them
to
run
their
own
contracting
processes
and
move
5
it
­­

6
CHAIRPERSON
LLOYD:
But
there
must
be
­­
the
7
point
is
­­
take
South
Coast
for
an
example.
The
weight
8
is
now
­­
or
if
you
went
into
population
weighted,
and
9
some
of
the
other
districts,
and
then
presumably
you
could
10
look
at
what
it
would
be
for
some
of
those
districts
that
11
may
be
affected,
and
get
those
dollars
out
for
door.
And
12
if
they
get
additional
dollars
or
if
they're
taken
away,

13
we'd
pick
a
number
there,
which
we
can
then
use
that
slot
14
if
you
like,
and
hold
on
to
those
dollars
and
allocate
15
them
depending
on
what
we
decide
in
the
end.

16
Yes,
Dr.
Friedman
or
Ms.
D'Adamo.

17
BOARD
MEMBER
WILLIAM
FRIEDMAN:
Well,
I
was
just
18
going
to
suggest
that
clearly
there
are
likely
to
be
a
19
number
of
options
here
that
require
some
more
20
thoughtfulness
and
study
and
to
be
brought
back
to
us
so
21
we
can
make
a
determination,
rather
than
at
this
22
particular
meeting
­­
I
agree
with
Barbara.
I'm
not
23
prepared
to
make
a
specific
decision
vis­
a­
vis
dollar
24
distribution
at
this
moment.

25
CHAIRPERSON
LLOYD:
My
only
question
there
­­
I'd
PETERS
SHORTHAND
REPORTING
CORPORATION
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362­
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84
1
like
to
hear
from
staff.
You
know,
if
we
lose
a
month
2
here,
is
that
critical
to
getting
these
dollars
out
the
3
door?
That
was
my
only
comment.

4
EXECUTIVE
OFFICER
WITHERSPOON:
I
think
we
can
5
manage
one
month.

6
ALTERNATIVE
STRATEGIES
SECTION
MANAGER
AYALA:
We
7
believe
that
it
is
critical
from
the
standpoint
that
these
8
are
current
fiscal­
year
funds
and
the
districts
are
9
essentially
on
a
standby
to
deploy
the
projects.
And
we
10
basically
committed
to
bringing
guidelines
before
you
at
11
this
time,
which
is
essentially
the
last
opportunity
­­

12
CHAIRPERSON
LLOYD:
Well,
let
me
make
a
13
suggestion.
Maybe
my
colleagues
as
well
­­
well,
Ms.

14
D'Adamo.

15
BOARD
MEMBER
D'ADAMO:
Well,
what
I
was
going
to
16
say
is
I
know
that
there
is
a
backlog
of
projects
that
are
17
needed
throughout
the
state.
I
know
in
particular
in
the
18
valley
­­
and
we
have
this
Title
5
issue
with
EPA
and
a
19
tremendous
need
and
desire
on
the
part
of
many
to
convert
20
their
engines
over.
This
is
a
program
that's
worked
just
21
fine
in
the
past.
And
I
would
just
suggest
that
perhaps
22
we
consider
adopting
it
as
is
and
coming
back
as
soon
as
23
possible,
whether
that's
a
month
or
two
or
six,
with
24
recommendations,
rather
than
holding
up
the
whole
program.

25
CHAIRPERSON
LLOYD:
Yeah,
but
I
can
understand
PETERS
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CORPORATION
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362­
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1
from
your
viewpoint
that
that
would
be
the
case.

2
Let
me
make
a
­­
just
let
me
make
one
suggestion
3
maybe,
that
we
take
the
last
witness
and
then
­­
we're
due
4
for
a
break
for
the
court
reporter.
Give
staff
a
chance,

5
maybe
ten
minutes
to
think
about
this.
We
can
come
back
6
and
discuss
the
issue
and
see
if
staff
has
some
additional
7
insights
of
how
this
may
be
handled.

8
BOARD
MEMBER
McKINNON:
I
have
question
before
9
staff
breaks.

10
CHAIRPERSON
LLOYD:
Mr.
McKinnon,
yes.

11
BOARD
MEMBER
McKINNON:
And
my
question
can
be
12
answered
after
the
staff's
break.
But
here's
my
question.

13
Is
it
possible
to
segment
some
of
the
money
for
14
population
based
and
some
of
the
money
for
air
districts
15
that
need
it
the
worst?

16
EXECUTIVE
OFFICER
WITHERSPOON:
Yes,
I
think
it
17
is.

18
And
in
response
to
the
Chairman's
prior
19
suggestion,
I
think
that's
possible
too.
We're
just
­­

20
you
know,
we're
sitting
here
trying
to
figure
out
quickly
21
whether
we
could
do
it
today
or
not.

22
Although
Mr.
Ayala
talked
about
the
desire
to
­­

23
what?

24
CHAIRPERSON
LLOYD:
Thank
goodness
Ms.

25
Witherspoon
is
starting
off
with
an
easy
one.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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86
1
(
Laughter.)

2
BOARD
MEMBER
DeSAULNIER:
Mr.
Chairman.
Or
3
should
I
call
you
referee
in
World
Wrestling
Federation?

4
(
Laughter.)

5
EXECUTIVE
OFFICER
WITHERSPOON:
No,
we
have
a
6
little
more
detail
about
the
timing
considerations
here.

7
The
state
only
needs
to
commit
dollars
by
the
end
8
of
this
fiscal
year.
However,
there
is
a
­­
we
have
to
9
actually
allocate
them,
which
takes
­­
there's
a
10
mechanical
process
inside
that
takes
some
time.
And
then
11
districts
have
to
hold
hearings
in
order
to
receive
them
12
and
commit
their
share
of
matching
funds.

13
And
so
I
believe
one
month
would
not
be
an
14
unreasonable
delay,
but
we
can't
go
any
later
than
that.

15
So
if
we
are
to
delay,
we'd
have
to
be
back
here
in
April
16
with
recommendations
for
you.

17
Is
there
another
question
or
­­

18
BOARD
MEMBER
RIORDAN:
I
think
one
month
sounds
19
reasonable,
Mr.
Chairman.

20
CHAIRPERSON
LLOYD:
Okay.
Supervisor
DeSaulnier
21
and
then
Professor
Friedman.

22
BOARD
MEMBER
DeSAULNIER:
Do
you
want
to
continue
23
with
WWF?
I
just
­­

24
BOARD
MEMBER
HUGH
FRIEDMAN:
Could
you
talk
just
25
a
little
louder,
Mark?
I'm
having
trouble
hearing
you.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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87
1
BOARD
MEMBER
DeSAULNIER:
Yeah.
I
would
just
­­

2
hopefully
we
can
go
with
the
one
month.
I
think
it
would
3
do
a
disservice
to
the
people
who've
signed
this
from
the
4
Bay
Area
legislative
delegation.
I
assume
Ron
would
have
5
sort
of
the
similar
problem
down
there.
And
at
least
in
6
regards
to
our
relationship
between
the
valley,
a
month
7
would
be
well
served
to
try
to
iron
something
out.

8
Representing
the
Bay
Area,
we're
not
looking
for
9
the
full
two
million
and
switch
it
to
population.
There's
10
good
arguments
for
what
staff's
doing
in
terms
of
11
direction,
but
it's
just
too
much.
So
if
we
can
get
that
12
at
a
month,
it
would
be
worth
it.

13
CHAIRPERSON
LLOYD:
So
what
I'm
hearing
from
14
staff
is
that
a
month
is
okay?

15
EXECUTIVE
OFFICER
WITHERSPOON:
It's
making
16
everyone
uncomfortable,
but
I
believe
yes.
You
know,

17
we'll
just
have
to
work
very
hard
after
that
to
get
the
18
money
out.

19
EXECUTIVE
OFFICER
WITHERSPOON:
I
would
like
to
20
go
back
­­
take
the
last
witness.
I
would
like
then
to
21
take
a
break.
And
then
I
would
like
a
definitive
answer
22
to
staff
whether
in
fact
we
can
accept
that
month.
I'm
23
sensing
my
colleagues
here,
that
they're
uncomfortable
24
coming
to
a
vote
today
without
some
additional
input.

25
So
Mr.
Hogo.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
MR.
HOGO:
Good
morning,
Chairman
Lloyd,
members
2
of
the
Board.
For
the
record,
my
name
is
Henry
Hogo.
I'm
3
the
Assistant
Deputy
Executive
Officer
at
the
South
Coast
4
Air
Quality
Management
District.

5
I
would
like
to
take
this
opportunity
to
say
a
6
few
words
about
both
the
Carl
Moyer
Program
and
the
School
7
Bus
Program.

8
The
AQMD
staff
is
in
support
of
the
staff
9
proposal
in
the
guidelines
in
general.
We
do
have
three
10
minor
concerns
relative
to
the
Carl
Moyer
Program.

11
The
first
is
­­
and
I
actually
didn't
want
to
12
talk
about
allocation
in
the
sense
that
the
Bay
Area
did.

13
But
the
allocation
of
the
funds
to
the
districts
­­
in
the
14
past
we
have
received
our
funds
up
front,
the
full
15
allocation.
And
the
staff
is
proposing
at
this
time
to
16
allocate
only
ten
percent
of
the
funds
up
front
and
then
17
do
the
additional
allocations
on
an
as­
needed
basis.

18
I
think
relative
to
the
discussion
that
you
have
19
been
going
through
on
overall
allocation,
we
need
to
look
20
at
the
timing
on
doing
this
ten­
percent
allocation
versus
21
an
up­
front
allocation,
because
our
process
would
be
to
do
22
a
solicitation
and
then
work
on
contracts.
That
usually
23
takes
maybe
three
to
four
months.
And
then
to
get
the
24
contracts
negotiated,
maybe
another
30
or
60
days.
So
25
we're
looking
at
a
fairly
lengthy
period
of
time
to
do
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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89
1
this.
And
we
would
like
to
see
at
least
the
allocation
of
2
funds
be
up
front.

3
We're
in
a
unique
position
because
we're
not
only
4
impacted
by
air
pollution
ourselves;
we
are
a
transporter,

5
and
we
have
40
percent
of
the
state
population.
So
I
6
think
we're
in
a
unique
position
that
perhaps
the
funding
7
should
stay
where
it
is
relative
to
the
South
Coast.

8
As
Dr.
Burke
has
indicated,
we're
looking
at
9
reducing
air
pollution
everywhere
throughout
California.

10
The
second
concern
that
we
have
is
relative
to
11
the
alternative
diesel
fuel
proposal.
CARB
staff
12
indicated
that
the
decision
on
projects
would
be
done
on
a
13
case­
by­
case
basis
by
the
ARB.
We
would
prefer
to
do
that
14
at
the
local
level.
If
we
can't
do
that
on
a
local
level,

15
at
a
minimum
we
would
prefer
to
work
with
CARB
staff
in
16
consultation
to
identify
those
projects
specific
to
our
17
area.

18
The
third
point
I
wanted
to
make
is
relative
to
19
the
marine
vessels.
CARB
staff
is
proposing
to
put
a
20
20
gram
per
brake­
horsepower
limit
on
the
maximum
emissions.

21
We
believe
that
for
those
engines
that
do
have
valid
22
emission
source
test
data,
that
we
should
be
able
to
use
23
that
data
in
lieu
of
the
20
gram
limit.
And
we
recognize
24
that
that
valid
emission
source
test
data
needs
to
be
for
25
engines
that
are
working
properly.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
90
1
I
just
want
to
make
one
comment
relative
to
the
2
School
Bus
Program.
And,
that
is,
we
support
the
staff
3
proposal
relative
to
the
guidelines
and
also
with
the
4
allocation
of
the
two­
thirds/
one­
third
formula.

5
We
know
that
when
we
compare
the
emissions
of
a
6
natural
gas
school
bus
relative
to
a
diesel
school
bus,
on
7
a
bus­
by­
bus
basis,
it's
actually
almost
at
2­
to­
1
benefit
8
relative
to
NOx.
So
we
see
that
as
a
big
point
to
make.

9
And
when
you
think
about
the
technologies
­­
in
10
the
South
Coast
there's
need
for
additional
NOx
reduction
11
as
early
as
possible.
When
you
go
towards
what
may
be
a
12
cleaner
diesel
engine
today,
that
engine
a
few
years
from
13
now
will
actually
be
considered
a
dirtier
engine.
And
so
14
we
want
to
get
the
cleanest
technologies
in
place
as
early
15
as
possible.

16
With
that,
we
will
continue
to
work
with
your
17
staff
on
the
guidelines.

18
And
I'll
be
happy
to
answer
any
questions
you
may
19
have.

20
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

21
BOARD
MEMBER
McKINNON:
I
think
you
just
pushed
22
your
luck.
But
let
me
go
about
this
carefully
here.

23
South
Coast
has
a
rule
that
tends
to
favor
CNG,

24
and
you
just
laid
out
the
basis
for
that.

25
I
am
concerned
that
recently
we
became
aware
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
there
are
some
toxics
problems
with
CNG
that
sort
of
2
mitigate
your
argument
somewhat.

3
Now,
I
think
an
earlier
speaker
raised
that
4
question
and
raised
sort
of
the
fuel
diversity
question.

5
And
I
am
sort
of
going
along
with
the
assumption
that
we
6
do
lots
of
things
to
give
diesel
time
to
clean
up,
and
we
7
probably
need
to
act
the
same
way
with
respect
to
CNG.

8
And
in
the
limited
period
of
time
of
two
years,
I'm
not
so
9
inclined
to
take
CNG
out
of
consideration,
because
what
10
that
essentially
will
do
is
take
school
buses
away
from
11
kids
in
the
South
Coast.
That's
how
that
will
work.

12
But
I
am
concerned
that
we
sort
of
are
continuing
13
on
with
a
set
of
assumptions
about
CNG
that
don't
include
14
the
toxics
question.
And
I
guess
what
I'm
interested
in
15
is
if
South
Coast
has
plans
or
is
under
way
or
is
in
the
16
near
future,
in
that
you're
out
sort
of
ahead
or
on
your
17
own
on
the
CNG
question,
do
you
have
plans
to
do
particle
18
trapping
and
deal
with
the
toxics
question
with
CNG?

19
MR.
HOGO:
The
answer
is
yes.
We
would
support
20
having
language
that
says
that
for
CNG
bus
awards,
that
if
21
oxidation
catalysts
were
deployed
with
those
buses,
that
22
is
where
you'll
get
the
reduction
in
the
toxics
from
the
23
natural
gas
engine.

24
We
are
in
discussions
with
John
Deere
about
25
retrofiting
existing
natural
gas
school
buses
that
do
not
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
92
1
have
oxidation
catalyst
technology.
And
they
indicated
2
that
that
can
be
done
fairly
easily.
They
have
certified
3
their
engines
with
oxidation
catalysts
­­
or
they're
4
planning
to
do
that.

5
It
turns
out
that
if
­­
in
a
specification
on
the
6
bus,
if
there's
no
specification
for
an
oxidation
7
catalyst,
the
OEM
actually
would
not
necessarily
go
8
through
the
process
of
putting
it
on.
But
if
we
specify
9
that
as
a
condition
of
the
award,
then
that
oxidation
10
catalyst
will
be
placed
on
that
natural
gas
bus.

11
Now,
relative
to
particulate
traps,
we
are
in
12
discussion
with
the
particulate
trap
manufacturers
as
to
13
whether
a
particulate
trap
can
be
developed
that
can
be
14
applied
to
a
natural
gas
engine.
So
we're
looking
at
both
15
technologies
at
this
time.

16
BOARD
MEMBER
McKINNON:
What
does
your
timetable
17
look
like?
We're
talking
about
two
years
here.
Are
we
18
going
to
be
there
in
two
years?

19
MR.
HOGO:
Yes,
I
believe
we
will.
The
oxidation
20
catalyst
is
actually
available
today.
And
it's
a
matter
21
of
determining
whether
­­
how
many
of
the
older
buses
can
22
be
retrofitted.
It
turns
out
that
most
of
the
buses
most
23
likely
will
be
readily
retrofitted
with
oxidation
24
catalysts.
And
we
need
to
look
at
how
best
to
do
that
25
over
this
time
period.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
93
1
But
the
requirements
for
new
buses,
we
will
have
2
oxidation
catalysts
already
available.

3
BOARD
MEMBER
McKINNON:
Thank
you
for
your
4
answer.
And
I
just
­­
I
sort
of
want
to
reinforce
­­
I
5
don't
know
if
I'll
be
on
this
Board
two
years
from
now.

6
But
I
know
that
if
we
go
through
this
again
and
we
don't
7
have
at
least
some
discussion
of
toxics
in
CNG
and
8
consideration
of
what's
being
done
about
that
­­
I
have
a
9
hard
time
having
such
a
large
allocation
go
to
CNG
when
we
10
know
there's
at
least
some
problems
that
need
to
be
11
discussed
there.
And
certainly
I'm
not
willing
to
sort
of
12
backlash
on
that
now
over
this
next
two
years.
I
think
it
13
would
take
away
school
buses
from
kids
in
the
South
Coast.

14
And
I
also
just
think
it's
patently
unfair.
We
15
give
diesel
time
to
clean
up.
We
do
step
by
step
over
16
years
and
years
and
years.
We
now
realize
there's
17
something
we
need
to
do
with
CNG.
I
don't
think
we
do
18
that
in
one
ruling
here.
I
think
it's
something
we
do
19
over
time.

20
CHAIRPERSON
LLOYD:
Thank
you.

21
Dr.
Burke.

22
BOARD
MEMBER
BURKE:
Mr.
McKinnon
and
I
have
23
discussed
this
matter
at
length,
and
we're
both
on
the
24
same
page
at
the
same
time
with
this
issue.

25
But,
Mr.
Hogo,
I
wanted
to
know
if
we
continued
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
94
1
this
item
for
a
month,
would
that
affect
our
ability
to
2
perform
at
South
Coast?

3
MR.
HOGO:
It
would
just
delay
the
­­
if
the
4
fiscal
restraints
are
not
there,
then
it
would
just
delay
5
the
process
by
a
month.
But
if
the
fiscal
restraints
are
6
there,
we
would
have
to
move
a
lot
faster.

7
BOARD
MEMBER
BURKE:
What
if
we
did
a
50
percent
8
of
all
the
money
to
all
the
districts
and
then
used
the
9
next
month
for
the
amelioration
of
the
other
50
percent?

10
Would
that
provide
you
with
the
ability
to
operate?

11
MR.
HOGO:
Yes,
it
would.

12
BOARD
MEMBER
BURKE:
Okay.

13
CHAIRPERSON
LLOYD:
Yes.
Professor
Friedman.

14
BOARD
MEMBER
HUGH
FRIEDMAN:
I
don't
think
this
15
is
any
way
­­
you
know,
in
all
due
respect,
any
way
for
us
16
to
be
adopting
important
policy.
This
was
just
handed
to
17
us.
This
has
been
on
our
agenda
for
a
long,
long
time.

18
All
due
respect,
Mark
­­
and
I
understand
your
19
point.
And
my
colleague
from
San
Diego,
we
are
sort
of
in
20
the
same
boat
as
the
Bay
Area.
But
unless
the
staff
can
21
readily
come
up
with
some
approach
or
formula
during
our
22
brief
break,
that
we
can
really
rally
around
and
develop
a
23
consensus,
it
seems
to
me
that
if
we
can
defer
a
month
or
24
whatever
without
any
undue
impact
or
harm
to
any
of
the
25
districts,
that's
one
thing.
And
I
don't
know
the
answer
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
95
1
to
that
apparently.
I
don't
know
the
effect
of
a
delay
of
2
30
days
at
this
point,
but
­­
or
one
month
to
our
next
3
meeting.

4
But
I
don't
think
we're
in
a
position
to
adopt
5
anything
today
that's
a
major
change
in
allocation
of
6
funding
when
its
just
been
raised,
unless
the
staff
has
7
some
magic
solution.

8
BOARD
MEMBER
DeSAULNIER:
Mr.
Chairman.
I
know
9
you
want
to
go
to
break
­­

10
BOARD
MEMBER
HUGH
FRIEDMAN:
So
take
a
break,
see
11
if
people
­­

12
CHAIRPERSON
LLOYD:
Supervisor
DeSaulnier.

13
BOARD
MEMBER
DeSAULNIER:
I
just
want
to
clarify.

14
For
my
position
I'm
not
asking
for
support
to
change
the
15
whole
allocation.
I'd
like
to
have
a
month
to
see
if
we
16
can
work
on
coming
up
with
a
couple
of
options,
and
then
17
we
come
back
and
talk
about
what's
fair
and
we
see
where
18
the
votes
are.

19
CHAIRPERSON
LLOYD:
What
I
would
suggest
is
20
following
what
Professor
Friedman
mentioned
earlier.
If
21
we
could
take
a
15­
minute
break
­­
not
for
staff
­­
so
22
that
you
could
take
a
look
at
what's
going
on
here.
And
23
see
if
you
can
come
back
to
reflect
­­
you
can
see
the
24
Board's
concerns
­­
I
think
to
address
the
issue
of
how
25
can
we
get
some
of
these
funds
out,
can
we
get
some
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
96
1
partially
out?
Maybe
as
Dr.
Burke
suggested,
what
do
we
2
gather
then?
Or
should
we
in
fact
hold
a
month
without
3
penalizing
and
jeopardizing
some
of
the
funds?
We
clearly
4
know
at
this
time
in
Sacramento
that
we
need
to
get
funds
5
so
that
we
can
be
cleaning
up
the
air
as
soon
as
possible.

6
So
with
that
we'll
take
a
15­
minute
break.
The
7
clock
at
the
back
­­
so
we'll
take
till
11:
20.

8
For
those
of
you
who
are
also
interested,
there
9
is
an
overflow
in
the
Coastal
hearing
room
right
next
door
10
where
there's
audio
and
visual.

11
So
thank
you.

12
(
Thereupon
a
recess
was
taken.)

13
CHAIRPERSON
LLOYD:
We
will
continue
with
this
14
item.

15
I
think
before
we
hear
from
staff,
Mr.
McKinnon
16
had
a
­­
well,
I
guess
wanted
to
put
staff
on
alert
to
an
17
issue
he
wants
to
see
covered.

18
Mr.
McKinnon.

19
BOARD
MEMBER
McKINNON:
Yeah,
I'm
going
back
to
20
our
original
debate
on
the
school
bus
issue
back
a
few
21
years
ago
where
we
ended
up
having
quite
a
complete
22
discussion
about
the
value
of
retrofits
in
cleaning
up
23
more
buses
that
affected
more
kids.

24
And
I
understand
that
there
may
be
some
25
legislative
sort
of
restrictions
on
how
we
deal
with
it.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
97
1
But
there
was
a
speaker
earlier
that
talked
about
using
2
the
administrative
­­
or
the
matching
amount
and
allowing
3
the
matching
funds
to
be
retrofit.

4
And
I
guess
if
we
end
up
taking
more
time
to
5
figure
this
out,
what
I
would
like
­­
and
I
don't
know
if
6
there
are
other
Board
members
that
agree
with
this
­­
is
7
I'd
like
some
approach
at
us
figuring
out
how
to
get
8
retrofit
back
into
this
equation.
I
think
we
get
more
9
done
per
dollar
with
retrofit.
And
I'm
worried
that
we're
10
doing
this
without
any
retrofit
in
the
picture.

11
Thanks.

12
CHAIRPERSON
LLOYD:
Thank
you.

13
Ms.
D'Adamo.

14
BOARD
MEMBER
D'ADAMO:
Do
we
have
the
discretion
15
to
do
that?

16
EXECUTIVE
OFFICER
WITHERSPOON:
The
Legislature
17
was
very
clear
that
they
expected
us
to
purchase
new
buses
18
with
the
20
percent
of
Prop
40
funds
and
not
to
engage
in
19
retrofits.
We
do
have
the
discretion
on
the
matching
20
amount,
I
believe.
However,
we've
cut
the
match
to
almost
21
nil
wherever
we
could
because
of
the
financial
constraints
22
of
school
districts.

23
So
where
there
is
some
residual
match
24
requirement,
we
can
look
at
it.
But
that's
probably
not
25
going
to
result
in
a
whole
lot
of
retrofit
activity.

PETERS
SHORTHAND
REPORTING
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1
And
I
would
say
that
staff
agrees
with
Mr.

2
McKinnon,
that
retrofits
are
an
extraordinarily
cost
3
effective
way
to
proceed.
It's
just
that
we're
following
4
the
direction
from
the
Legislature
on
how
they
would
wish
5
these
funds
be
appropriated.

6
CHAIRPERSON
LLOYD:
So
now
we're
coming
back
with
7
pearls
of
wisdom
from
the
staff
on
how
we
address
the
8
issue.

9
EXECUTIVE
OFFICER
WITHERSPOON:
What
we
would
10
like
to
propose
to
you
is
that
you
approve
the
school
bus
11
portion
of
the
item
today,
because
the
school
bus
12
allocations
are
already
based
on
population
only.
They
do
13
not
have
an
M4
multiplier.

14
And
then
we
would
return
to
you
in
April
with
15
Carl
Moyer
alone
and
with
various
options
for
the
funding
16
criteria,
including
what
you
have
today,
population
only,

17
and
versions
in
between.

18
During
the
break
we
consulted
with
our
own
19
administrative
services
staff
with
many
of
the
districts
20
who
receive
these
funds
to
find
out
if
we
were
creating
an
21
unmanageable
problem
at
the
receiving
end.
And
we
were
22
assured
that
a
one­
month
delay
will
not
damage
the
program
23
in
any
way,
that
they
can
deal
with
that
change
in
24
schedule.

25
CHAIRPERSON
LLOYD:
Yes.
Supervisor
DeSaulnier.

PETERS
SHORTHAND
REPORTING
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1
BOARD
MEMBER
DeSAULNIER:
I
think
that's
fine,

2
Mr.
Chairman.
I
would
move
the
staff
recommendations,

3
including
the
amendments
that
Catherine
Witherspoon
just
4
mentioned.
But
I
would
ask
that
­­
obviously
we'll
get
5
engaged
by
the
folks
from
the
Bay
Area
legislative
6
delegation
and
the
issues
that
have
been
brought
up
by
my
7
colleagues
up
here.

8
CHAIRPERSON
LLOYD:
I
would
also
like
­­
could
I
9
just
add
one
point?

10
BOARD
MEMBER
RIORDAN:
You
need
a
second
for
the
11
motion,
Mr.
Chair.
I
was
just
­­

12
CHAIRPERSON
LLOYD:
I
guess
we
do.

13
Well,
I
got
two
seconds
here.

14
BOARD
MEMBER
RIORDAN:
Okay.
That's
fine.

15
CHAIRPERSON
LLOYD:
I
had
just
one
comment
to
16
staff,
I
think,
that
I
would
like
to
take
advantage
of
Mr.

17
Hogo's
suggestion
that
we
make
sure
that
we
actually
get
18
the
cleanest
CNG
buses
possible
and
put
the
oxi­
cat
on
19
there
would
be
good.

20
BOARD
MEMBER
D'ADAMO:
Mr.
Chairman?

21
CHAIRPERSON
LLOYD:
Yes,
Ms.
D'Adamo.

22
BOARD
MEMBER
D'ADAMO:
Yeah,
and
if
I
could
just
23
add
to
the
suggestion
by
Supervisor
DeSaulnier.
I
know
we
24
were
all
kind
of
surprised
by
receiving
this
letter.
And
25
as
I
understand
it
­­
from
the
Bay
Area
delegation.
As
I
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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100
1
understand
it,
this
just
moved
within
the
last
couple
of
2
days.
I
suspect
that
there
are
a
number
of
individuals,

3
key
legislators
in
the
valley,
that
may
also
have
4
concerns.
So
I
would
just
suggest
to
staff
that
they
5
contact
some
of
those
individuals,
such
as
Senator
Flores.

6
And
also
would
like
to
suggest
that
staff
contact
7
Supervisor
Patrick
since
she
didn't
have
the
opportunity
8
to
be
here
today.

9
BOARD
MEMBER
DeSAULNIER:
That's
fine
with
me.

10
We
always
want
to
get
along
with
our
neighbors.

11
CHAIRPERSON
LLOYD:
Supervisor
Roberts
and
also
12
Mr.
McKinnon.

13
BOARD
MEMBER
ROBERTS:
No,
we
always
want
to
get
14
along
with
our
neighbors
too,
so
I
agree
with
that.

15
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

16
BOARD
MEMBER
McKINNON:
Yeah,
I'm
sure
17
unintentionally,
by
moving
it,
we
haven't
dealt
with
the
18
retrofit
issue.
And
what
I
would
like
is
to
have
it
19
considered
a
friendly
amendment
that
we
include
retrofit
20
as
one
of
the
things
that
qualifies
as
matching
funds.

21
BOARD
MEMBER
DeSAULNIER:
That's
fine.

22
CHAIRPERSON
LLOYD:
Okay.

23
BOARD
MEMBER
ROBERTS:
I'd
like
to
see
that,
I
24
think
­­
you
know,
I've
got
a
strong
interest
in
the
25
retrofit,
and
I
think
his
comments
are
well
made.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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101
1
CHAIRPERSON
LLOYD:
And
I
think
that
would
also
2
help
to
address
one
of
the
comments
made
earlier.

3
Well,
we've
got
a
motion,
we've
got
a
seconder.

4
All
in
favor
say
aye.

5
(
Ayes.)

6
CHAIRPERSON
LLOYD:
Anybody
against?

7
Seeing
none,
unanimously
passed.

8
And
thank
you,
staff.
And
we
look
forward
to
you
9
coming
back
next
month.

10
With
that
we'll
take
just
a
short
break
before
we
11
move
into
the
major
feature
of
the
day.

12
(
Thereupon
a
short
break
was
taken.)

13
CHAIRPERSON
LLOYD:
Okay.
If
my
colleagues
could
14
take
their
seats.
And
I'd
like
to
begin
this
item.

15
Agenda
item
03­
2­
4.
Public
hearing
to
consider
16
amendments
to
the
California
Zero
Emission
Vehicle
17
Regulation.
I
recognize
this
is
the
one
you've
been
­­

18
most
of
you
have
been
waiting
for.

19
I'd
just
like
to
say
at
the
beginning
also,
we're
20
expecting
a
large
number
of
witnesses.
If
in
fact
we
can
21
keep
those
comments
as
short
as
possible
for
the
bulk
of
22
witnesses.
They're
going
to
try
to
hold
most
people
to
23
three
minutes.

24
But
we
have
a
lot
of
witnesses
to
get
through.

25
It
sounds
like
close
to
100
witness.
So
we
have
a
really
PETERS
SHORTHAND
REPORTING
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102
1
long
day
ahead
of
us.

2
We
also
will
find
that
we
don't
intend
to
take
a
3
break
for
lunch.
And
so
you
will
see
Board
members
4
disappearing
at
various
times.
If
you
happen
to
be
5
testifying,
there's
no
slight
meant
to
you.
It's
a
matter
6
of
the
Board
members
getting
hungry.
But
we
can
see
and
7
hear
in
the
back.
So
we
will
be
rotating
on
that.

8
Again,
I
think
right
at
the
outset
I
want
to
9
dispel
any
concern
here
that
the
Board
is
backing
down.

10
We
are
committed
to
the
goal
of
zero­
emission
vehicles.

11
(
Applause.)

12
CHAIRPERSON
LLOYD:
And
it's
very
clear
that,
as
13
we
understand
the
issues,
for
example,
of
estimating
14
on­
road
vehicle
emissions,
particularly
in
the
South
Coast
15
and
other
areas,
it's
very
important
to
get
to
zero
as
16
fast
as
possible.

17
Of
course
we
also
recognize
that
substantial
18
progress
has
been
made
in
bringing
these
vehicles
to
as
19
close
to
zero
as
possible.
And
I'll
say
a
little
bit
more
20
about
that.

21
Again,
I
think
the
­­
I'd
also
like
to
thank
22
staff
for
their
outstanding
efforts
they've
made
to
craft
23
a
more
flexible
practical
path
ahead.

24
And
I
think
that
­­
also
it's
not
true,
that
we
25
read
in
the
L.
A.
Times
editorial,
the
staff
in
fact
is
not
PETERS
SHORTHAND
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362­
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103
1
worn
down
by
the
auto
industry.
How
could
they?
In
fact,

2
we
brought
up
reinforcements.
We
brought
a
new
3
battle­
hardened
executive
officer.
She
cannot
be
worn
out
4
after
two
months.

5
(
Laughter.)

6
CHAIRPERSON
LLOYD:
So,
in
fact,
I
say
we're
7
really
trying
to
do
our
best.
And
I
know,
I've
sat
for
8
hours
with
them
and
they've
sat
for
many
more
hours,
that
9
they've
really
tried
to
work
diligently.

10
And
I'd
also
like
to
thank
all
the
other
11
stakeholders,
particularly
also
the
auto
industry
who
is
12
going
to
also
have
a
major
impact
here.
They
have
also
13
tried
to
work
with
us
in
a
constructive
way,
clearly
14
looking
at
their
interests
as
well.
But
we've
come
a
long
15
way
I
think
in
a
mutual
understanding.

16
And
I
hope
that
we
can
move
ahead
in
a
manner
in
17
which
we
can
actually
work
together,
practically,
and
in
18
fact
continue
our
dialogue
and
continue
the
progress
to
19
meeting
our
air
quality
goals.
The
health
data,
some
of
20
which
you
heard
today,
indicates
that
we
have
an
21
obligation
to
protect
public
health.

22
I
am
encouraged
by
the
way
we
have
worked
23
together.
You'll
hear
today
some
more
about
the
fuel
24
cell.
I
can
attest
firsthand,
what
I've
learned
working
25
with
a
fuel
cell
partnership
over
the
last
number
of
PETERS
SHORTHAND
REPORTING
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916)
362­
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104
1
years,
both
technically
and
also
working
together
as
2
colleagues.
And
I
can't
overstress
that
piece
because
3
that's
going
to
come
up
here.

4
While
we
recognize
that
this
technology
is
not
5
there
today,
we
also
recognize
­­
there's
a
major
6
commitment
from
all
the
stakeholders
­­
this
is
a
7
technology
which
also
will
bring
us
to
zero
emission
8
technology.

9
This
is
a
technology
which
Governor
Davis
10
mentioned
when
the
California
Fuel
Cell
Partnership
was
11
initiated.
And
I
think
this
had
­­
also
rose
to
the
12
global
stage
when
President
Bush
mentioned
the
promise
and
13
reality
of
hydrogen
fuel
cells
not
too
long
ago.

14
And
so
I
am
really
excited
about
that
aspect.

15
And
I
say,
I'm
really
encouraged
about
the
way
in
which
16
we're
working
with
the
auto
companies.

17
However,
we
also
recognize
that
we
have
a
major
18
obligation
to
the
Board,
that
we
cannot
wait
for
the
19
promise,
which
I
think
will
be
real;
that
we
have
to
do
20
whatever
we
can
now
to
continue
that
effort.
I'm
21
delighted
to
see
the
progress
that
we've
made
through
all
22
the
electric­
drive
technologies,
and
encouraging
those
23
technologies,
and
in
some
cases
requiring
those
24
technologies.

25
I
think
it's
very
important
that
we
continue
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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362­
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105
1
that.
And
I
think
it's
­­
no
doubt
in
my
mind
that
since
2
the
inception
of
the
program,
that
we've
had
a
major
3
impact.

4
One
of
the
things
that
we've
found
­­
and
we've
5
been
asked,
"
What
has
changed
in
the
last
two
years?
Why
6
are
we
doing
certain
things?"
And
that
will
be
addressed
7
by
the
staff.
And
I'm
sure
my
colleagues
will
address
it
8
as
we
go
through.

9
What
I
would
say
there,
that
our
commitment
to
10
clean
air
and
to
zero
is
steadfast.
However,
based
on
11
data,
I
do
not
feel
that
I
will
be
serving
myself,
my
12
colleagues,
or
the
State
of
California
if
I
do
not
take
13
that
into
account
as
we
move
ahead.
And
to
me
that's
a
14
very
important
issue.

15
So
while
air
quality
and
public
health
are
our
16
major
goals,
we
also
have
to
recognize
the
best
way
of
17
getting
there.

18
I
think
the
last
13
years
we
have
seen
a
real
19
focused
effort
with
the
industry
and
with
all
stakeholders
20
to
try
to
get
us
to
our
goals
as
identified
in
1990.
That
21
is,
where
in
fact
gasoline
vehicles
now
we've
seen
that
22
progress,
now
only
just
in
zero,
but
the
near
zero.
So
we
23
have
through
the
PZEVs
virtually
lifetime
warranties,
and
24
we
have
both
from
the
tail
pipe
and
also
from
evaporative
25
emission.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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106
1
And
then
we've
got
the
advanced
technology
2
through
the
partial
zero­
emission
hybrid
vehicles
and
3
natural
gas
vehicles.

4
Again,
I
would
say
obviously
this
program
has
5
created
more
debate
and
discussion
than
probably
any
6
regulation
that
they
ARB
has
put
forward.
And
it's
7
commonly
known
as
the
ZEV
Program.
But
I
think,
as
we
8
will
hear
from
the
staff,
has
accomplished
many
things
9
apart
from
the
true
zero­
emission
vehicle.
So
now
the
10
delta
between
the
cars
on
the
road
and
also
the
true
zero
11
is
very
small,
but
it
is
significant.
Our
ability
to
12
characterize
on­
road
vehicle
emissions
­­
if
you've
got
13
aftertreatment
on
there,
you're
still
worried
about
that
14
potential
decay.
And
as
I
indicated
earlier,
and
I
think
15
we'll
here
from
people
testifying,
in
the
South
Coast
AQMD
16
our
ability
to
characterize
on­
road
vehicle
emissions
is
17
limited.
And
of
course
if
we
start
off
with
something
at
18
zero
at
zero
miles,
zero
to
a
hundred
thousand
miles,

19
we're
far
better
off.

20
Again
when
we
looked
in
2001,
I
was
hopeful
that
21
would
be
the
last
time
where
we
would
actually
address
22
this
issue.
Unfortunately
that
didn't
happen.
There
are
23
many
reasons
why
it
didn't
happen.
I
won't
go
into
that.

24
But
on
the
other
hand,
since
we
are
back
here
today,
then
25
we
are
talking
about
some
significant
changes.

PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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107
1
I
think
­­
it
would
be
tempting
I
think
to
not
2
ask
some
of
the
tough
questions,
to
just
move
ahead
and
3
try
to
just
address
some
of
the
legal
issues.
But
as
I
4
indicated
before,
that
flies
in
the
face
of
all
the
things
5
we've
known.
So
I
think
that
we
will
hear
I
think
today
6
from
staff
a
program
that's
committed
to
the
ultimate
7
goal,
a
real
and
robust
Zero
Emission
Vehicle
Program.

8
I
think
It's
important
we
have
the
debate.
I
9
will
be
looking
particularly
today,
and
I'm
sure
my
10
colleagues
will
also,
particularly
from
the
industry,
some
11
of
the
flexibility
that
we've
given
this
program
and
12
whether
they
intend
to
take
care
of
some
of
that
­­
take
13
advantage
of
some
of
that
flexibility,
and
also
whether
14
they're
committed
to
working
with
us
in
this
continued
15
goal.

16
I
was
reminded
just
this
week,
as
I
was
looking
17
at
this
program,
there's
somewhat
jeopardy
in
going
back
18
in
this
time
of
battle,
et
cetera,
to
John
Lennon's
19
comment,
Give
peace
a
chance."
I
would
hope
in
this
case
20
as
we
move
ahead,
give
the
engineers
a
chance.
We
need
to
21
work
together.
We
owe
this
to
the
people
of
California.

22
We
owe
it
to
ourselves.

23
So
I
hope
that
we
can
change
the
dialogue
here.

24
And
I
certainly
want
to
state
that
on
behalf
of
myself
and
25
my
colleagues
and
for
Secretary
Hickox
and
the
Governor,

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362­
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1
we
really
want
to
work
together
to
continue
the
progress
2
that
has
being
made
to
date.

3
I'm
sure
we'll
have
a
wide
range
of
comments
4
today
regarding
staff's
proposal.
We
don't
have
all
the
5
answers.
Staff
doesn't
have
all
the
answers.
But
what
6
you
cannot
criticize
is
their
effort,
their
desire
to
put
7
together
to
craft
a
program,
to
be
the
very
strongest
8
possible,
recognizing
our
lessons
to
date.

9
With
that,
I
would
like
to
turn
it
over
to
Ms.

10
Witherspoon
to
begin
the
staff's
presentation.

11
EXECUTIVE
OFFICER
WITHERSPOON:
Thank
you,

12
Chairman
Lloyd.

13
The
ZEV
Program
is
an
integral
part
of
ARB's
14
efforts
to
reduce
emissions
from
passenger
cars
and
15
light­
duty
trucks.
As
part
of
our
low­
emission
vehicle
16
program,
the
ZEV
component
seeks
to
commercialize
new
17
vehicle
technologies
that
eliminate
not
only
tailpipe
18
emissions,
but
also
emissions
from
evaporation
and
from
19
the
in­
use
deterioration
of
vehicle
emission­
control
20
systems.

21
The
current
regulatory
process
before
us
today
22
was
initiated
in
response
to
litigation
and
a
court
order
23
enjoining
ARB
from
enforcing
the
2001
ZEV
amendments.

24
However,
opening
the
regulation
to
cure
its
legal
25
deficiencies
led
to
a
broader
staff
evaluation
of
where
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1
things
stand
and
what
else
needs
the
Board's
input
and
2
potential
correction.
As
such,
this
rulemaking
became
an
3
opportunity
to
address
the
current
state
of
technology
4
development
and
ZEV
percentage
requirements
in
the
near,

5
mid,
and
longer
term.

6
The
proposal
before
you
today
would
eliminate
all
7
references
to
efficiency
and
fuel
economy
in
the
ZEV
rule,

8
substituting
alternate
credit
mechanisms
for
ZEV­
enabling
9
componentry.

10
The
proposal
would
also
create
an
alternative
11
compliance
path
to
give
auto
manufacturers
greater
12
flexibility;
would
establish
a
new
independent
review
13
panel,
like
our
prior
battery
panel,
to
advise
the
Board
14
on
the
status
of
development
of
all
ZEV
technology
types
15
as
we
move
ahead;
and
would
fix
the
number
of
smaller
16
implementation
issues
that
have
been
brought
to
staff's
17
attention
since
the
2001
hearing.

18
If
approved
by
the
Board,
the
proposed
amendments
19
would
resolve
the
current
legal
issues
in
the
federal
20
court
case
and
would
enable
us
to
resume
ZEV
21
implementation
by
2005.
The
proposal
also
reduces
ozone
22
precursor
emissions
to
a
greater
degree
than
the
2001
23
amendments
at
a
reduced
cost.

24
Based
on
the
outcomes
I
just
described,
staff
25
believes
it
has
brought
the
Board
a
solid,
balanced
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1
proposal
for
proceeding
with
the
ZEV
regulation.
In
our
2
view
the
proposed
changes
are
rational,
reasonable
and
3
defensible
from
a
technological
feasibility
standpoint.

4
However,
staff
readily
admits
there
is
still
a
5
great
deal
of
controversy
over
what
we
have
proposed
from
6
both
sides.
The
most
prominent
issue
is
whether
the
Board
7
should
mandate
a
growing
volume
of
pure
ZEV
technologies
8
in
2009
and
beyond.
There
is
also
the
perennial
issue
of
9
whether
California
should
have
a
ZEV
mandate
at
all.

10
The
proposed
changes
to
the
ZEV
regulation
11
reflect
a
series
of
very
difficult
discussions,
both
12
internally
and
with
interested
stakeholders.
Throughout,

13
staff's
objective
was
to
define
changes
that
would
14
maintain
pressure
on
the
industry
to
pursue
true
ZEVs,

15
while
acknowledging
the
challenges
associated
with
the
16
current
state
of
technology
and
its
cost.

17
Staff
believes
the
proposed
modifications
will
18
continue
to
advance
pure
ZEV
technology
research
and
19
development,
support
the
commercialization
of
ZEV­
enabling
20
advanced
technology
vehicles,
and
achieve
significant
21
criteria
pollutant
emission
reductions.

22
Chuck
Shulock
of
the
Mobile
Source
Control
23
Division
will
now
begin
the
staff's
presentation.

24
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Good
25
morning,
Mr.
Chairman
and
members.

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1
I
will
begin
our
staff
presentation
with
some
2
background
on
the
zero­
emission
vehicle
program
and
why
3
we're
here
today
recommending
changes.

4
Analisa
Bevan
and
Craig
Childers
of
our
staff
5
will
then
describe
the
various
proposed
changes.

6
Following
their
summary
I'll
conclude
our
presentation
7
with
a
discussion
of
the
major
open
issues
and
our
staff
8
recommendation.

9
To
set
the
stage
for
your
consideration
of
10
program
changes
I
will
first
give
you
a
brief
recap
of
the
11
structure
of
the
regulation
and
its
goals.
Next
I
will
12
summarize
some
of
the
achievements
of
the
program
to
date.

13
I
then
will
discuss
why
we
believe
that
changes
are
needed
14
and
the
objectives
that
we
had
in
mind
when
we
prepared
15
our
suggested
modifications.

16
­­
o0o­­

17
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
As
you
may
18
recall,
the
basic
requirement
is
that
10
percent
of
the
19
vehicles
sold
by
manufacturers
must
be
ZEVs.
Over
the
20
course
of
its
history
this
requirement
has
been
modified
21
several
times
to
provide
additional
flexibility
and
to
22
take
advantage
of
emerging
technologies.
There
are
now
23
three
categories
of
vehicles
in
the
program.

24
At
least
20
percent
of
the
requirement,
or
2
25
percent
of
sales,
must
be
pure
ZEVs,
vehicles
with
no
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1
tailpipe
emissions.
This
is
commonly
referred
to
as
the
2
gold
category,
and
it's
the
circle
on
the
left
on
the
3
slide
before
you.

4
Another
6
percent
may
be
met
by
vehicles
known
as
5
partial
zero­
emission
vehicles,
or
PZEVs.
These
are
6
extremely
clean
conventional
gasoline
vehicles.
We
refer
7
to
this
as
the
bronze
category,
in
the
upper
right.

8
The
third
category,
which
may
account
for
another
9
2
percent,
consists
of
vehicles
known
as
advanced
10
technology
PZEVs,
or
AT
PZEVs.
These
are
vehicles
that
11
meet
the
stringent
criteria
for
PZEV
status
and
also
uses
12
ZEV­
like
technology
such
as
electric
drive
or
gaseous
fuel
13
storage.
This
is
known
as
the
silver
category.

14
­­
o0o­­

15
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
This
next
16
slide
lists
some
of
the
vehicle
types
commonly
found
in
17
each
category.
The
gold
or
pure
ZEV
category
contains
18
vehicles
with
no
emissions,
such
as
battery
EVs
or
19
hydrogen­
fuel­
cell
vehicles.

20
The
silver
category
is
home
to
advanced
21
technology
PZEVs.
Examples
of
such
vehicle
types
include
22
CNG,
hybrid
electric,
hydrogen
internal
combustion,

23
grid­
connect
hybrid,
and
methanol­
fuel­
cell
vehicles.

24
The
bronze
category
consists
of
basic
PZEVs.

25
These
are
extremely
clean
gasoline
vehicles
and
are
also
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quite
advanced.

2
­­
o0o­­

3
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
As
a
4
starting
point
for
our
substantive
discussion
it's
helpful
5
to
take
a
step
back
and
review
the
overall
goals
of
the
6
ZEV
Program.

7
First
and
foremost
the
program
is
designed
to
8
achieve
significant
air
quality
benefits
through
9
deployment
of
zero
and
near­
zero
emission
vehicles.
This
10
is
achieved
through
the
production
and
placement
of
a
11
variety
of
extremely
clean
vehicles
in
all
three
of
the
12
program
categories
that
I
mentioned.

13
Second,
the
program
pushes
the
research
14
development
and
deployment
of
zero­
emission
vehicles.

15
This
is
the
focus
of
the
pure
ZEV,
or
gold
portion
of
the
16
program.

17
Finally,
the
program
seeks
to
encourage
ZEV
18
commercialization
through
the
introduction
of
ZEV­
enabling
19
technologies
such
as
hybrid
electric
and
alternative
fuel
20
vehicles.
Such
vehicles
will
develop
a
manufacturing
and
21
supplier
base
for
technologies
that
ultimately
will
be
22
used
by
pure
ZEVs.
This
is
the
purpose
of
the
silver
23
category.

24
­­
o0o­­

25
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Progress
has
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1
been
made
on
each
of
these
goals.
Since
its
enactment
in
2
1990
the
ZEV
Program
has
resulted
in
a
number
of
benefits,

3
including
significant
efforts
to
advance
battery
4
technology
­­
more
than
2,500
full­
sized
Battery
Electric
5
Vehicles
leased
or
sold
in
California,
plus
many
thousands
6
of
Neighborhood
Electric
Vehicles
­­
ten
near­
zero
7
emission
PZEV
models
currently
certified;
three
hybrid
8
electric
vehicles
on
sale
and
others
announced;
and
air
9
quality
benefits
from
the
deployment
of
all
of
these
10
extremely
clean
vehicles.

11
­­
o0o­­

12
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Meanwhile
13
there
have
been
other
developments
that
are
not
directly
14
related
to
this
regulation,
but
are
working
towards
the
15
same
end.
The
most
noteworthy
example
is
the
California
16
Fuel
Cell
Partnership,
which
is
a
path­
breaking
17
collaboration
of
auto
companies,
fuel
providers,
fuel
cell
18
technology
companies,
and
government
agencies,
that
is
19
placing
fuel
cell
electric
vehicles
on
the
road
in
20
California.
The
partners
include
20
companies
and
21
organizations
from
around
the
world.

22
­­
o0o­­

23
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Another
24
recent
event
that
is
worthy
of
note
is
the
announcement
of
25
the
Freedom
Car
and
Fuel
Initiative
by
the
federal
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1
government,
as
the
Chairman
mentioned.

2
This
program
will
invest
federal
funds
over
the
3
next
five
years
to
develop
hydrogen­
powered
fuel
cells,

4
hydrogen
infrastructure,
and
advanced
automotive
5
technologies.

6
There
have
also
been
other
national
and
7
international
commitments
to
ZEV
technology.
So
in
8
general
there
is
now
considerable
momentum
behind
the
push
9
towards
zero­
emission
vehicles.

10
So
if
all
is
proceeding
so
well,
why
are
we
here
11
before
you
recommending
changes?

12
­­
o0o­­

13
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
We
have
two
14
fundamental
reasons.
We
would
like
to
address
legal
15
challenges
that
have
been
raised
and
we
seek
to
better
16
align
the
regulatory
requirements
with
technology
and
17
market
status.

18
­­
o0o­­

19
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
First
of
20
all,
staff
believes
that
it
would
be
prudent
to
address
21
legal
challenges
that
have
been
raised
regarding
the
2001
22
amendments.
The
first
case
is
a
federal
preemption
23
lawsuit
filed
in
January
of
2002.
On
June
11,
2002,
a
24
federal
strict
judge
issued
a
preliminary
injunction
that
25
prohibits
the
ARB's
executive
officer
from
enforcing
the
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1
2001
ZEV
amendments
with
respect
to
the
sale
of
new
motor
2
vehicles
in
the
2003
or
2004
model
years.
This
is
pending
3
final
resolution
of
the
case.

4
Two
other
lawsuits
have
been
filed
in
state
5
court,
one
addressing
broader
aspects
of
the
regulation
6
and
one
challenging
the
date
by
which
vehicles
must
be
7
placed
in
service
in
order
to
qualify
for
early
8
introduction
multipliers.

9
Staff
also
believes
that
there
is
a
need
to
10
better
align
the
regulatory
requirements
with
technology
11
and
market
status.
The
next
few
slides
go
through
this
12
issue
in
more
detail.

13
With
respect
to
Battery
Electric
Vehicles,
during
14
the
2001
rulemaking
staff
estimated
an
incremental
cost
of
15
$
7,000
to
$
9,000
in
volume
production
for
battery
packs
16
sufficient
in
size
to
power
full
function
vehicles.
Since
17
that
time
there
have
been
advances
in
cycle
life
which
18
would
increase
the
life
of
the
battery
pack
and
thereby
19
reduce
or
eliminate
the
need
to
purchase
a
replacement
20
pack.
Even
so,
however,
cost
challenges
remain.

21
In
addition,
based
on
recent
experience
the
22
sustainable
demand
for
Battery
Electric
Vehicles
in
the
23
near
term
appears
to
be
small.

24
As
a
result
of
these
issues
and
their
own
25
judgment
as
to
the
long­
term
commercialization
prospects,

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major
manufacturers
have
now
ceased
production
of
Battery
2
Electric
Vehicles.

3
Later
on
today
you
will
hear
testimony
by
Dr.

4
Menahem
Anderman,
one
of
the
experts
who
served
on
our
5
2001
Battery
Technical
Advisory
Panel.
Staff
contracted
6
with
Dr.
Anderman
to
assess
whether
in
his
view
the
7
conclusions
reached
by
the
battery
panel
in
2001
still
8
hold.
And
he'll
provide
his
testimony
later.

9
­­
o0o­­

10
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
On
the
fuel
11
cell
side
there
is
considerably
more
optimism
and
12
activity.
The
technology
shows
great
promise
and
13
manufacturers
appear
to
see
a
business
case
that
they
will
14
eventually
be
able
build
the
vehicles
at
a
cost
the
market
15
will
bear.

16
Clearly,
however,
there
are
significant
costs,

17
manufacturing,
and
performance
challenges
that
stand
in
18
the
way.
The
bottom
line
is
that
fuel
cell
ZEVs
are
not
19
yet
ready
for
volume
production.

20
In
summary
then
it
is
staff's
view
that
21
additional
development
is
needed
before
any
ZEV
technology
22
will
be
ready
for
mass
deployment.
As
a
result,
the
2001
23
requirements
are
too
ambitious.
This
has
several
24
implications.
First
of
all,
because
it
is
not
feasible
to
25
produce
fuel
cell
vehicles
at
the
numbers
needed
to
fully
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1
satisfy
the
2001
requirement,
some
manufacturers
would
in
2
effect
be
forced
to
restart
battery
EV
production
3
regardless
of
their
views
as
to
the
long­
term
prospects
4
for
commercial
success.
This
is
difficult
to
sustain
and
5
could
also
have
the
undesirable
effect
of
diverting
6
engineering
resources
away
from
meeting
fuel
cell
7
challenges.

8
There's
one
other
point
that
I
would
like
to
9
emphasize
here,
one
that
is
central
to
the
staff's
view
of
10
how
to
proceed.
The
pace
of
future
technical
development
11
is
very
difficult
to
predict,
particularly
for
the
12
significant
development
steps
that
are
relevant
here.

13
Minor
near­
term
vehicle
improvements,
such
as
those
needed
14
to
meet
incrementally
more
stringent
tailpipe
standards,

15
follow
a
well
understood
path
and,
in
general,
have
been
16
achieved
more
quickly
and
at
less
cost
than
the
original
17
staff
estimates.

18
Going
to
zero
is
different.
Bringing
a
19
fundamentally
different
technology
such
as
battery
20
electric
or
fuel
cell
vehicles
to
market
requires
21
advancements
on
a
number
of
fronts.
And
experience
to
22
date
has
shown
that
these
developments
do
not
necessarily
23
proceed
at
the
peace
predicted
by
staff.

24
­­
o0o­­

25
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
In
contrast,

PETERS
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1
progress
in
the
silver
category
has
been
dramatic.
There
2
are
CNG
vehicles
in
commercial
production.
Three
hybrid
3
electric
vehicles
are
on
the
market
today
and
others
have
4
been
announced.
These
vehicles
are
not
all
PZEVs,
but
in
5
most
cases
there
are
no
significant
technical
barriers
to
6
achieving
PZEV
status
and
we
expect
that
future
versions
7
would
qualify.

8
Other
AT
PZEV
technologies
are
not
yet
9
commercialized
but
are
receiving
attention.
Hydrogen
10
internal
combustion
vehicles
have
been
demonstrated
by
11
several
automakers.
And
plug­
in
hybrid
vehicles
are
being
12
actively
studied
in
a
variety
of
settings.

13
­­
o0o­­

14
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
PZEVs
are
15
also
achieving
considerable
success.
Ten
models
have
been
16
certified.
And
our
best
information
is
that
some
140,000
17
PZEVs
are
expected
to
be
sold
in
model
year
2003.

18
In
our
meetings
with
automakers
we're
sometimes
19
told
that
PZEV
technology
does
not
get
the
respect
it
20
deserves.
So
let
me
emphasize
for
the
record
here
that
21
the
emission
performance
of
these
vehicles
is
remarkable
22
and
represents
a
significant
achievement
on
the
part
of
23
the
automakers.
Such
vehicles
likely
would
not
exist
if
24
we
had
not
had
the
technology
forcing
function
of
the
ZEV
25
mandate.
So
the
widespread
deployment
of
these
vehicles
PETERS
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916)
362­
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120
1
is
one
of
the
program's
early
achievements.

2
­­
o0o­­

3
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
With
all
of
4
that
as
a
back
drop
I
would
now
like
to
share
with
you
the
5
objectives
that
we
as
staff
are
hoping
to
achieve
with
6
these
modifications.

7
First
of
all,
we
want
to
restart
the
program.

8
Restarting
the
program
has
obviously
benefits.
It
will
9
allow
us
to
take
maximum
advantage
of
the
technologies
10
that
are
in
showrooms
today
and,
thereby,
capture
the
11
greatest
possible
air
quality
benefit.
It
will
also
help
12
build
the
manufacturing
and
supplier
base
for
future
pure
13
ZEV
technologies.

14
­­
o0o­­

15
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Our
next
16
major
objective
has
already
been
mentioned.
We
want
to
17
avoid
a
mismatch
both
now
and
in
the
long
term
between
the
18
program
requirements
and
the
technology
status.

19
­­
o0o­­

20
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Next
we
want
21
to
ensure
that
the
program
recognizes
successful
22
compliance
under
the
2001
rules.
Those
manufacturers
that
23
move
forward
under
the
2001
rules
should
not
be
forced
to
24
revise
their
plans.

25
Finally,
we
want
to
provide
a
pathway
that
PETERS
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362­
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121
1
recognizes
the
aggressive
pursuit
of
fuel
cell
2
commercialization
as
a
viable
compliance
options.
In
3
other
words
if
a
manufacturer
wants
to
pursue
fuel
cell
4
development
and
not
simultaneously
pursue
battery
EVs,
in
5
the
staff
view
that
should
be
adequate.

6
That
concludes
my
introduction.
I
will
now
turn
7
it
over
to
Analisa
Bevan,
who
will
begin
our
summary
of
8
the
proposed
amendments.

9
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Thank
you,

10
Chuck.

11
I'd
like
to
begin
by
reviewing
the
process
by
12
which
staff
has
developed
the
proposal
before
you
today.

13
As
Mr.
Shulock
described,
a
set
of
events
and
issues
14
combined
to
cause
the
staff
to
recommend
regulatory
15
amendments
to
the
ZEV
Program.

16
­­
o0o­­

17
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Starting
in
18
the
fall
of
2002
the
staff
issued
a
straw­
man
proposal
19
outlining
possible
changes
to
the
regulation
for
20
stakeholders'
consideration
prior
to
a
December
workshop.

21
The
well­
attended
workshop
provided
valuable
feedback
to
22
staff
going
into
the
development
of
an
initial
statement
23
of
reasons
and
proposed
regulatory
amendments
which
were
24
issued
on
January
10th,
2003,
for
a
45­
day
comment
period.

25
In
the
initial
statement
of
reasons
staff
PETERS
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362­
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122
1
identified
a
number
of
open
issues
for
which
comments
and
2
ideas
were
solicited.
During
the
45­
day
comment
period
3
sufficient
constructive
comments
were
received,
and
staff
4
research
and
thinking
evolved
to
a
point
that
suggested
5
modifications
to
the
initial
January
proposal
were
6
warranted.
To
provide
ample
time
to
develop
the
suggested
7
modifications
and
to
provide
our
stakeholders
with
time
to
8
consider
these
changes,
the
public
hearing
to
consider
9
amendments
to
the
ZEV
regulation
was
postponed
one
month
10
to
today's
hearing.

11
The
description
of
the
proposed
modifications
and
12
staff's
rationale
for
changes
to
the
proposal
were
13
published
on
March
5th,
2003.

14
I
will
now
turn
to
a
description
of
staff's
15
proposal.
My
description
will
be
a
composite
of
the
16
initial
January
proposal
and
the
March
modifications
to
17
staff's
proposal.

18
­­
o0o­­

19
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Broadly,
the
20
proposed
amendments
to
the
ZEV
regulation
cover
the
start
21
date
of
the
regulation,
the
category
percentages,
and
the
22
methods
for
calculating
credits
for
different
vehicle
23
types.

24
Additionally,
the
staff
is
proposing
a
number
of
25
amendments
that
clarify
the
intent
of
the
regulation
and
PETERS
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362­
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123
1
amendments
that,
when
looking
at
the
regulation
as
a
2
whole,
balance
the
program.

3
The
ZEV
regulation
requirements
were
set
to
begin
4
in
2003.
Subject
to
federal
and
state
preliminary
5
injunctions,
the
Board
is
prevented
from
implementing
or
6
enforcing
the
regulation
for
the
2003
and
2004
model
7
years.
Although
staff's
intent
in
proposing
amendments
to
8
the
regulation
is
to
address
the
legal
issues
that
brought
9
about
these
injunctions,
it
is
believed
that
the
earliest
10
practical
start
date
for
the
program
is
now
2005.
A
2005
11
program
start
allows
adequate
lead
time.

12
When
considering
a
modification
in
the
program
13
start,
staff
had
two
choices:
To
shift
the
program
out
14
two
years,
including
application
of
phase­
in
multipliers
15
and
early
introduction
credits;
or
to
start
in
2005
as
if
16
resuming
the
2001
amendments.
The
staff
proposes
the
17
later
approach,
as
it
resumes
the
pace
of
the
program
18
rather
than
delaying
completely
the
benefits
and
progress
19
of
the
program.

20
Linked
to
both
the
restart
date
of
the
regulation
21
and
to
the
current
status
of
manufacturer
actions
to
22
comply
with
the
regulation
is
the
expectation
of
how
many
23
of
what
kind
of
vehicles
California
can
expect
to
see
in
24
the
coming
years.

25
One
of
the
issues
identified
through
staff's
PETERS
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362­
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124
1
development
process
was
the
existence
of
substantial
2
banked
ZEV
credits
resulting
from
production
in
the
years
3
prior
to
the
regulation
start
up.
These
banked
credits
4
provide
manufacturers
with
the
ability
to
comply
solely
5
with
banked
credits
rather
than
with
new
vehicle
6
production
for
some
years
into
the
program.

7
It
was
suggested
that
the
Board
consider
a
8
requirement
for
new
vehicle
production
beginning
in
2005
9
to
ensure
continued
product
availability.
The
10
counter­
opinion
to
that
suggestion
was
that
for
those
11
manufacturers
who
have
expended
considerable
effort
to
12
build
up
credit
balances
to
ensure
compliance
strategy
for
13
their
company,
changing
the
rules
in
such
a
fundamental
14
way
was
not
fair.
The
Board
had,
after
all,
heavily
15
incentivized
early
production
in
the
hopes
that
16
manufacturers
would
provide
­­
would
begin
to
build
market
17
for
ZEVs
prior
to
the
implementation
date.

18
In
response
to
these
comments,
staff
devised
a
19
two­
path
system
referred
to
as
the
base
path
and
the
20
alternative
compliance
path.

21
­­
o0o­­

22
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
The
base
path
23
preserves
the
category
structure
of
the
2001
amendments.

24
Shown
in
this
slide
is
a
summary
of
the
make
up
of
the
25
credit
category
structure
for
the
ZEV
Regulation.
Of
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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125
1
10­
percent
compliance
obligation
manufacturers
must
meet
2
at
least
2
percent
with
gold
credit
vehicles.

3
Manufacturers
may
meet
up
to
2
percent
of
their
obligation
4
with
silver
vehicles.
And
up
to
6
percent
of
a
5
manufacturer's
obligation
maybe
met
with
bronze
vehicles.

6
The
structure
described
in
the
previous
slide
7
applies
to
model
years
2005
through
2008.

8
­­
o0o­­

9
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
As
amended
in
10
the
2001
Board
hearing,
the
overall
percentage
11
requirements
increase
over
time,
eventually
reaching
16
12
percent
in
2018.

13
The
bronze
category
percentage
stays
constant
at
14
6
percent,
and
the
remainder
of
the
obligation
is
split
15
between
gold
and
silver
categories.

16
­­
o0o­­

17
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
As
I
18
mentioned,
the
2001
amendment
category
structure
is
19
preserved
for
those
manufacturers
choosing
to
take
the
20
base
path.
The
base
path
also
preserves
a
manufacturer's
21
ability
to
use
banked
credits
to
meet
all
or
part
of
their
22
ZEV
compliance
obligation.

23
At
this
time
staff
are
aware
of
some
24
manufacturers
who
are
able
to
comply
with
the
base
path
25
with
banked
credits
through
2008.
Under
these
PETERS
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362­
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126
1
circumstances
it
may
be
attractive
for
these
manufacturers
2
to
use
the
base
path.

3
The
other
option
offered
to
manufacturers
under
4
staff's
proposal
is
called
the
alternative
compliance
5
path.
The
alternative
compliance
path
was
conceived
as
an
6
improved
approach
to
achieving
the
goals
of
the
ZEV
7
Program,
as
outlined
earlier
by
Mr.
Shulock.

8
­­
o0o­­

9
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
A
manufacturer
10
choosing
the
alternative
compliance
path
must
produce
11
their
market
share
of
250
Type
3
ZEVs
or
fuel
cell
12
vehicles
between
2001
and
2008.
In
exchange
for
this
13
floor
production
of
new
vehicles,
manufacturers
may
meet
14
their
remaining
gold
requirement
with
silver
vehicles.
If
15
a
manufacturer
chooses
to
change
paths
from
the
base
to
16
the
alternative
at
any
time
during
the
2005
through
2008
17
phase,
they
must
produce
the
entire
market
share
18
obligation
of
Type
3
ZEVs
by
2008.

19
The
alternative
compliance
path
supports
the
ZEV
20
Program
goals
through
challenging
manufacturers
to
commit
21
significant
quantities
of
pure
ZEVs
to
support
emerging
22
ZEV
technology
through
this
developmental
phase,
pressing
23
increased
silver
category
production
to
support
ZEV
24
technology
development
and
increasing
the
air
quality
25
benefits
of
the
program.

PETERS
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362­
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127
1
Staff's
proposal
does
not
lay
out
a
requirement
2
for
ZEVs
after
the
2008
demonstration
stage.
Instead
3
staff
recommends
a
process
through
which
the
Board
would
4
determine
the
appropriate
next
step
in
ZEV
5
commercialization.

6
­­
o0o­­

7
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
In
this
slide
8
I've
illustrated
the
market
share
obligation
of
250
9
vehicles
by
manufacturer.
Under
the
alternative
10
compliance
path
these
are
the
total
volumes
each
11
manufacturer
would
be
responsible
for
in
the
2001
through
12
2008
timeframe.

13
­­
o0o­­

14
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
As
I
15
mentioned,
the
proposed
requirement
for
pure
ZEVs
in
the
16
post­
2008
timeframe
is
yet
to
be
determined.
The
key
17
purpose
of
most
technology
development
and
demonstration
18
stages
is
to
learn
from
them
before
moving
on
to
the
next
19
stage
of
development
or
commercialization.

20
Staff
is
recommending
that
the
Board
take
this
21
approach
with
the
ZEVs.
To
accomplish
this
staff
22
recommends
that
the
Board
establish
an
independent
expert
23
review
panel
comprised
of
independent
automotive
experts
24
who
do
not
have
industry
ties
to
assess
ZEV
technologies
25
and
report
back
to
the
Board
prior
to
the
establishment
of
PETERS
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362­
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128
1
the
next
phase
of
ZEV
requirements.

2
­­
o0o­­

3
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Staff
proposes
4
that
the
independent
expert
review
panel
review
all
ZEV
5
technologies
and
enabling
technologies
to
assess
their
6
technological
readiness
and
their
commercialization
7
readiness.
Clearly
in
the
case
of
fuel
cell
technology,

8
the
California
Fuel
Cell
Partnership
will
be
a
key
9
resource
of
learning
and
information
for
the
Board
and
for
10
the
independent
expert
review
panel.

11
­­
o0o­­

12
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
The
13
independent
expert
review
panel
would
report
to
the
Board
14
sufficiently
before
the
Board
would
need
to
take
action
to
15
set
requirements
for
the
post­
2008
timeframe.
I
would
16
like
to
point
out
that
it
is
not
expected
that
the
17
independent
expert
review
panel
would
make
recommendations
18
to
the
Board
regarding
the
next
phase
of
requirements,
but
19
rather
the
panel
would
provide
the
Board
with
information
20
and
tools
necessary
for
the
Board
to
determine
the
21
appropriate
course
of
action.

22
­­
o0o­­

23
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
I
will
turn
24
now
to
a
discussion
of
the
methods
proposed
to
calculate
25
credit
for
various
types
of
vehicles
under
the
proposal.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
129
1
Staff
are
proposing
changes
to
both
the
gold
and
the
2
silver
credit
calculations
to
remove
efficiency
3
multipliers
and
generally
improve
comparison
of
technology
4
types.

5
­­
o0o­­

6
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
In
the
2001
7
amendments
the
credit
received
by
a
gold
category
vehicle
8
was
calculated
based
on
its
range
and
its
efficiency.
In
9
early
implementation,
the
more
range
a
vehicles
had,
the
10
higher
the
credit.
As
the
program
matured,
the
grange
11
multiplier
was
phased
out
and
replaced
by
an
efficiency
12
multiplier.

13
In
removing
the
efficiency
multiplier
staff
has
14
simplified
the
calculation
of
gold
vehicle
credit
by
15
establishing
ZEV
types,
described
in
detail
on
the
next
16
slide.
Each
ZEV
type
earns
a
specified
credit,
and
17
credits
for
all
ZEV
types
are
phased
down
over
time.

18
­­
o0o­­

19
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Five
new
ZEV
20
types
are
proposed.
Their
definitions
are
based
on
range
21
and
on
fast
refueling
capability.

22
NEVs
remain
a
part
of
the
gold
category.
NEVs
23
are
classified
as
low­
speed
vehicles
with
a
top
speed
of
24
25
miles
per
hour.
They
are
restricted
to
use
on
roadways
25
with
speed
limits
of
35
miles
per
hour
or
less.

PETERS
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1
Staff
is
not
proposing
to
change
the
credit
2
structure
established
in
the
2001
amendments.
To
date
a
3
number
of
NEV
models
have
been
marketed.

4
Type
Zero
NEVs
are
described
as
utility
ZEVs.
A
5
Type
Zero
ZEV
is
a
ZEV
with
a
range
of
less
than
50
miles.

6
At
this
time
there
are
no
examples
of
Type
Zero
ZEVs
and,

7
frankly,
staff
doesn't
expect
such
vehicles
to
be
8
developed
or
marketed.
The
definition
is
created
for
9
completeness.

10
­­
o0o­­

11
Type
1
ZEVs
are
ZEVs
with
range
between
50
and
12
100
miles.
They
are
not
capable
of
fast
refueling.

13
Typically
we
think
of
city
electric
vehicles
as
fitting
14
into
this
category.
Limited
demonstrations
of
this
type
15
of
EV
have
been
conducted
to
date,
and
we
are
not
aware
of
16
any
active
production
for
the
California
market.

17
Type
2
ZEVs
are
defined
as
having
driving
range
18
greater
than
100
miles
and
are
not
fast
refueling
capable.

19
Example
Type
2
ZEVs
are
what
we
call
full
function
20
electric
vehicles.
Significant
demonstration
and
21
marketing
has
been
conducted
with
these
vehicles
in
22
California
to
date,
thanks
to
the
memorandum
of
agreement
23
with
the
six
largest
manufacturers
and
to
pre­
regulation
24
ZEV
production.
At
this
time
there
is
no
current
25
marketing
of
Type
2
ZEVs
in
California.

PETERS
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1
Type
3
ZEVs
are
defined
as
having
greater
than
2
100
miles
driving
range
and
are
fast
refueling
capable.

3
Examples
of
such
vehicles
would
be
hydrogen
fuel
cell
4
vehicles.
Demonstration
of
prototype
and
pre­
commercial
5
models
has
been
conducted
to
date,
with
significant
6
development
work
underway
to
ultimately
reach
production
7
volumes.

8
­­
o0o­­

9
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
This
table
10
lays
out
the
credits
proposed
per
vehicle
for
each
ZEV
11
type.
The
credits
earned
by
each
ZEV
type
phase
down
over
12
time.
And
as
can
be
seen
in
the
2012
timeframe,
Type
3
13
fuel
cell
vehicles
are
earning
the
same
credit
as
Type
2
14
Battery
Electric
Vehicles.

15
I
will
now
turn
the
presentation
to
Craig
16
Childers
for
a
description
of
the
proposed
amendments
to
17
the
calculation
of
credits
for
silver
vehicles.

18
MR.
CHILDERS:
Thank
you,
Analisa.

19
The
next
set
of
slides
deals
with
proposed
20
changes
to
the
AT
PZEV
portion
of
the
regulation.

21
I
will
close
with
several
specific
examples
to
22
illustrate
the
effect
of
the
changes
we
are
proposing.

23
AT
PZEV
credit
is
intended
to
encourage
the
24
development,
deployment,
and
increased
production
25
efficiencies
of
technologies
that
contribute
to
the
PETERS
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1
commercialization
of
pure
ZEV
vehicles.

2
AT
PZEVs
earn
a
PZEV
base
credit
of
.2,
but
they
3
also
earn
an
additional
credit
in
three
attribute
4
categories.
These
are
zero
emission
range
credit,

5
advanced
ZEV
componentry
credit,
and
low
fuel
cycle
6
emissions
credit.

7
The
most
desirable
AT
PZEV
attribute
is
for
8
vehicles
that
demonstrate
zero
emission
range.
Vehicles
9
capable
of
traveling
10
or
more
miles
with
zero
emissions
10
or
those
with
zero
emissions
of
1
regulated
pollutant
are
11
eligible
for
this
credit.

12
The
next
AT
PZEV
attribute,
advanced
ZEV
13
componentry,
rewards
vehicles
with
components
that
are
14
either
shared
with
ZEVs
or
lead
to
the
development
of
15
components
that
are
needed
for
ZEVs.
These
include
hybrid
16
electric
drive
systems
and
gaseous
or
hydrogen
fuel
17
storage
systems.

18
­­
o0o­­

19
MR.
CHILDERS:
With
hybrids
the
electric
drive
20
systems
are
smaller
versions
of
the
same
systems
that
will
21
be
used
in
ZEVs.
In
several
soon­
to­
be­
introduced
hybrid
22
electric
vehicles
the
drive
components
will
be
large
23
enough
for
direct
application
in
city
EVs.

24
The
final
AT
PZEV
attribute,
low
fuel
cycle
25
emissions,
assigns
credit
to
vehicles
which
make
use
of
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1
fuels
with
low
production
and
fueling
infrastructure
2
emissions.
These
include
hydrogen,
methanol,
and
natural
3
gas.

4
­­
o0o­­

5
MR.
CHILDERS:
Staff
proposes
modifications
to
6
all
three
of
these
AT
PZEV
credit
components.

7
Staff
proposes
to
change
the
method
for
8
determining
advanced
componentry
credit
for
hybrid
9
electric
vehicles.
In
the
2001
amendments
hybrid
electric
10
vehicles
earned
credit
according
to
CO2
reduction,
percent
11
peak
power,
or
efficiency.

12
In
the
proposed
amendments
credit
is
based
only
13
on
the
attributes
of
the
electric
drive
system,
including
14
system
voltage,
peak
power
rating,
and
other
ZEV­
like
15
attributes.

16
Staff
believes
hybrid
vehicles
exhibiting
these
17
attributes
are
ZEV
enabling
because
they
lead
directly
to
18
performance
improvements
and
more
cost­
effective
electric
19
drive
systems
for
ZEVs.

20
Qualifying
hybrid
drive
systems
must
also
21
demonstrate
the
ability
to
provide
traction
drive
boost,

22
regenerative
braking,
an
idle
stop­
start
capability.

23
These
are
all
ZEV
features
which
staff
would
like
to
24
encourage
in
hybrids.

25
­­
o0o­­

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1
MR.
CHILDERS:
Staff
proposes
to
assign
2
hybrids
­­
qualifying
hybrids
to
three
categories.
These
3
are:
Low
voltage
/
low
power,
high
voltage,
and
high
4
voltage
/
high
power.

5
The
top
two
rows
of
this
table
describe
the
6
system
voltages
and
peak
power
levels
for
each
hybrid
7
type.
All
three
types
of
hybrids
must
exhibit
the
ZEV
8
attributes
shown
in
the
next
three
rows
of
the
table.

9
Low
voltage
systems
operate
at
60
volts
or
less
10
and
feature
an
electric
drive
system
with
at
least
four
11
kilowatt
maximum
output.
Forty­
two
volt
starter
generator
12
systems
are
expected
to
become
commonplace
in
the
next
ten
13
years.
And
many
of
these
hybrids
would
qualify
in
this
14
first
category.

15
Low
voltage
hybrids
will
not
earn
advanced
16
componentry
credit,
but
they
will
count
towards
AT
PZEV
17
obligations
through
model
year
2008.

18
The
second
hybrid
category,
or
high
voltage
19
hybrid,
must
have
drive
systems
with
at
least
10
kilowatt
20
rated
output.
An
example
of
this
class
of
hybrid
is
the
21
Honda
Civic
HEV.

22
The
third
category,
high
voltage
/
high
power,

23
are
those
with
high
voltage
drive
systems
and
at
least
50
24
kilowatt
rated
power
output.
An
example
of
this
hybrid
is
25
the
upcoming
Lexus
RX330
HEV.
Note,
that
these
high
power
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1
drive
systems
would
be
appropriate
for
use
as
stand­
alone
2
drive
systems
in
small
full­
function
ZEVs
and
would
be
3
more
than
adequate
in
city­
class
ZEVs.

4
The
total
AT
PZEV
credit
shown
on
the
bottom
row
5
of
this
table
also
includes
the
base
credit
of
.2
that
is
6
earned
by
all
PZEVs.

7
The
HEV
advanced
componentry
credit
values
shown
8
are
for
model
year
2005
through
2007.
These
values
9
decrease
in
two
steps
and
end
up
at
.25
and
.35
in
model
10
year
2012.

11
­­
o0o­­

12
MR.
CHILDERS:
Staff
also
proposes
several
other
13
modifications
to
AT
PZEV
credit
determination.

14
For
zero
emission
range
credit
the
formula
for
15
credit
determination
has
changed,
and
the
maximum
credit
16
has
been
capped
at
l.
5.

17
Advanced
componentry
credit
may
now
be
combined
18
with
the
zero
emission
range
credit,
where
formerly
these
19
were
alternate
options.

20
Hydrogen
storage
technology
credit
has
increased
21
from
.2
to
.3.
And
buy­
fuel
storage
systems
that
store
22
hydrogen
now
also
earn
.3
credit.

23
The
battery
warranty
requirements
for
hybrids
has
24
been
reduced
from
15
year
/
150,000
miles
to
10
year
/

25
150,000
miles.

PETERS
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362­
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1
­­
o0o­­

2
MR.
CHILDERS:
Finally,
staff
proposes
that
the
3
maximum
low
fuel
cycle
emissions
credit
be
increased
from
4
.2
to
.3.

5
The
next
several
slides
illustrate
the
combined
6
effect
of
these
proposed
changes
for
some
selected
AT
7
PZEVs.

8
­­
o0o­­

9
MR.
CHILDERS:
This
table
shows
how
the
proposed
10
modifications
would
affect
credit
determination
for
11
compressed
natural
gas
vehicles.
Again,
all
AT
PZEVs
earn
12
the
same
.2
base
credit
as
PZEVs,
but
with
additional
13
credit
for
zero
emission
range,
advanced
componentry,
and
14
low
fuel
cycle
emissions.

15
CNG
AT
PZEVs
would
benefit
from
increases
in
both
16
the
advanced
componentry
and
low
fuel
cycle
emissions
17
credits,
resulting
in
an
overall
credit
increase
from
.5
18
to
.7.
An
example
of
a
dedicated
CNG
production
vehicle
19
eligible
for
this
credit
is
the
Honda
Civic
GX
shown
on
20
this
slide.

21
­­
o0o­­

22
MR.
CHILDERS:
This
table
shows
how
the
proposed
23
modifications
would
affect
credit
determination
for
24
hydrogen
internal
combustion
engine
vehicles.
Hydrogen
25
ICEs
benefit
from
increases
in
each
of
the
AT
PZEV
PETERS
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1
attribute
credits.
And
from
the
proposed
change
that
2
would
allow
them
to
earn
credit
for
both
zero
emission
3
range
and
advanced
componentry.

4
The
bottom
row
of
this
table
also
shows
credit
5
that
would
be
earned
by
hybrid
electric
hydrogen
internal
6
combustion
vehicle.
Because
of
an
additional
.5
credit
7
for
advanced
componentry
for
its
electric
drive
system,

8
total
credit
would
increase
from
2.3
to
2.7,
which
is
more
9
than
4
1/
2
times
the
credit
for
a
gasoline
hybrid.

10
An
example
of
a
hydrogen
ICE
hybrid
electric
11
vehicle
that
could
be
eligible
for
this
credit
would
be
12
the
prototype
Ford
Model
U
shown
on
the
slide.

13
­­
o0o­­

14
MR.
CHILDERS:
Plug­
in
hybrid
electric
vehicles
15
also
benefit
from
proposed
modifications
in
each
AT
PZEV
16
category.
But
their
largest
increase
comes
from
the
17
opportunity
to
earn
both
zero
emission
range
and
advance
18
componentry
credit.

19
Credit
values
shown
in
this
table
are
for
a
P20,

20
or
plug­
in
hybrid,
capable
of
20
miles
of
all­
electric
21
range.
This
hybrid
would
earn
3
1/
2
times
more
credit
22
than
a
conventional
hybrid.
An
example
of
a
plug­
in
HEV
23
is
this
UC
Davis
prototype
built
on
a
Ford
Explorer
24
platform.

25
­­
o0o­­

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1
MR.
CHILDERS:
The
last
proposed
change
to
AT
2
PZEV
credit
is
to
extend
the
early
introduction
3
multipliers
for
emerging
technology
vehicles.
All
of
the
4
previous
slides
have
discussed
raw
AT
PZEV
credit
without
5
the
application
of
early
intro
multipliers.

6
This
chart
shows
the
overall
AT
PZEV
credits
7
earned
after
the
application
of
early
intro
multipliers
8
for
a
variety
of
AT
PZEV
types.

9
The
emerging
technology
vehicles
shown
in
the
10
upper
group
on
this
chart
all
earn
zero
emission
range
11
credit.
And
they
include
the
hydrogen
ICE,
plug­
in
12
hybrids,
and
indirect
methanol
fuel
cell
vehicles.
The
13
lower
set
of
lines
represents
CNG
and
non­
plug
hybrids,

14
which
have
already
been
commercialized
by
some
automakers.

15
Staff
proposes
to
extend
the
early
introduction
16
multiplier
for
the
emerging
technology
AT
PZEVs
so
that
a
17
multiplier
of
6
is
now
applied
through
2008.
This
results
18
in
approximately
20
times
more
credit
for
a
P20
plug­
in
19
hybrid
than
that
for
a
non­
plug
hybrid.

20
­­
o0o­­

21
MR.
CHILDERS:
The
early
introduction
multiplier
22
of
3
is
now
extended
through
2011
for
the
emerging
23
technology
group,
which
means
that
a
P20
plug­
in
hybrid
24
would
earn
about
10
times
more
credit
than
a
non­
plug
25
hybrid.

PETERS
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1
And,
finally,
eventually
all
AT
PZEVs
earn
less
2
than
3
credits,
with
the
hydrogen
ICE
and
grid
hybrids
3
earning
somewhere
between
2
and
3
credits.

4
Now,
Analisa
Bevan
will
continue
and
discuss
the
5
remaining
proposed
amendments.

6
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Thank
you,

7
Craig.

8
­­
o0o­­

9
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Another
issue
10
resulting
from
the
delay
in
program
start­
up
was
the
11
potential
loss
of
emission
benefits
that
could
be
gained
12
from
early
production
of
bronze
vehicles.
With
the
13
regulation
so
close
to
implementation
before
the
14
preliminary
junctions,
many
manufacturers
had
already
15
demonstrated
and
began
marketing
of
PZEVs.
With
the
16
program
start
delayed
until
2005
staff
was
interested
in
17
finding
a
way
to
incentivize
manufacturers
to
maximize
18
production
of
PZEVs
prior
to
the
regulations
start
date.

19
If
a
manufacturer
produces
2003
and/
or
2004
PZEV
20
credits
in
excess
of
6
percent
of
their
sales
volume,

21
staff
proposes
that
those
excess
credits
be
allowed
to
be
22
used
as
silver
credits
for
the
2005
and
2006
model
years.

23
It
is
hoped
that
this
incentive
will
encourage
24
manufacturers
to
maximize
their
PZEV
marketing
efforts
in
25
these
early
years.

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1
­­
o0o­­

2
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
As
described
3
in
my
overview,
staff
also
proposed
a
number
of
clarifying
4
and
balancing
amendments.
Several
amendments
are
proposed
5
to
clarify
the
Board's
intent
with
regard
to
specific
6
elements
of
the
regulation
as
demonstrated
by
issues
that
7
have
arisen
since
the
adoption
of
the
2001
amendments.
A
8
number
of
additional
amendments
are
proposed
that
balance
9
out
the
regulation,
given
the
more
major
amendments
10
already
described.

11
I
will
now
briefly
cover
the
more
significant
12
proposals.

13
­­
o0o­­

14
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
Under
Section
15
177
of
the
Clean
Air
Act
other
states
may
adopt
16
California's
motor
vehicle
standards.
Several
states,

17
including
New
York
and
Massachusetts,
have
chosen
to
adopt
18
the
low
emission
vehicle
NCEV
regulations.
This
has
the
19
effect
of
increasing
a
manufacturer's
compliance
20
obligation
with
respect
to
ZEV
production.
The
21
manufacturers
have
referred
to
this
issue
as
travel.

22
When
the
Board
considers
vehicle
regulations,

23
consideration
of
technological
feasibility
is
often
a
key
24
component
in
judging
a
proposal's
appropriateness.
When
25
considering
the
goals
of
the
ZEV
Program,
staff
have
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1
identified
a
target
vehicle
volume
for
Type
3
ZEVs
under
2
the
alternative
compliance
path
that
is
considered
3
feasible.

4
However,
if
that
volume
requirement
is
applied
to
5
all
states
with
a
ZEV
Program,
the
total
number
of
Type
3
6
ZEVs
increases
by
1.7
times,
to
425
fuel
cell
vehicles.

7
Under
a
demonstration
and
development
phase
such
8
as
the
alternative
compliance
path,
staff
questions
the
9
incremental
benefit
of
the
increased
volume
required
in
10
this
scenario.
Therefore,
staff
is
proposing
to
address
11
the
issue
of
travel
by
allowing
Type
3
ZEVs
placed
in
any
12
state
that
has
adopted
the
ZEV
regulation
to
count
towards
13
compliance
with
California's
obligation.
In
this
proposal
14
a
fuel
cell
vehicle
placed
in
New
York
would
count
towards
15
a
manufacturer's
requirement
to
place
their
market
share
16
of
250
fuel
cell
vehicles
under
the
alternative
compliance
17
path.

18
­­
o0o­­

19
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
In
2001
the
20
Board
directed
staff
to
include
the
Light­
Duty
Truck
2
21
category
in
manufacturers'
sales
base
for
calculation
of
22
ZEV
obligations.
Since
that
time
issues
have
been
raised
23
regarding
the
Board's
intent
with
regard
to
that
directive
24
and
with
noticing
requirements
for
that
rulemaking.

25
Therefore,
staff
is
asking
the
Board
to
reaffirm
inclusion
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of
the
Light­
Duty
Truck
2
category
in
the
sales
base
in
2
this
rulemaking.

3
­­
o0o­­

4
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
In
the
2001
5
amendments
the
Board
recognized
significant
value
in
6
establishment
of
intelligent
transportation
systems
7
utilizing
ZEV
Program
vehicles
by
awarding
additional
ZEV
8
credit
for
such
programs.
The
availability
of
such
9
credits
was
to
sunset
in
2008.
Staff
continues
to
support
10
development
of
transportation
systems
using
ZEV
Program
11
vehicles
an
proposes
to
extend
the
availability
of
extra
12
credits
for
transportation
systems
until
2011.

13
­­
o0o­­

14
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
The
ZEV
15
regulation
provides
an
incentive
to
manufacturers
to
16
produce
and
place
ZEVs
early
through
application
of
early
17
introduction
multipliers.
These
multipliers
are
applied
18
only
when
a
vehicle
is
placed
in
service.

19
In
the
past
year
there
have
been
discussions
20
regarding
the
date
by
which
a
vehicle
must
be
placed
in
21
service
in
order
to
earn
the
early
introduction
22
multipliers.

23
In
order
to
address
these
issues,
on
November
24
21st,
2002,
the
executive
officer
issued
a
letter
to
25
affected
vehicle
manufacturers,
informing
them
that
early
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1
introduction
credits
would
be
available
through
March
2
31st,
2003,
with
a
similar
sell­
through
period
for
the
3
remainder
of
the
early
introduction
credits.

4
On
December
24th,
2002,
a
lawsuit
was
filed
by
5
Daimler­
Chrysler
and
General
Motors,
and
a
Fresno
court
6
judge
issued
a
temporary
restraining
order
enjoining
ARB
7
from
implementing
the
provisions
of
the
November
advisory.

8
To
provide
regulatory
certainty
and
clarification
9
on
this
issue
the
staff
proposes
a
modification
providing
10
that
a
2001­
2002
model
year
ZEV
qualifies
for
early
11
introduction
multipliers
if
placed
in
service
by
September
12
30th,
2003.

13
Staff
proposes
that
for
2003
subsequent
model
14
year
ZEVs
a
vehicle
be
considered
placed
in
service
for
15
purposes
of
application
of
multipliers
if
placed
in
16
service
in
California
by
June
30th
following
the
17
applicable
model
year.
Staff
believes
this
is
appropriate
18
in
light
of
the
challenges
faced
in
placing
ZEVs
and
the
19
expectations
of
manufacturers
regarding
the
application
of
20
the
regulation.

21
­­
o0o­­

22
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
The
2001
23
amendments
established
a
cap
on
the
use
of
NEV
credits
24
banked
from
model
years
2001
through
2005.

25
Beginning
in
model
year
2006
manufacturers
could
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1
satisfy
no
more
than
75
percent
of
any
program
category,

2
gold,
silver,
or
bronze,
using
banked
NEV
credits.
The
3
maximum
allowable
use
of
banked
NEV
credits
decreased
to
4
50
percent
in
any
program
category
for
the
2007
and
later
5
model
years.

6
Staff
proposes
amendments
removing
the
caps
from
7
the
bronze
category
and
delaying
the
imposition
of
the
cap
8
until
2009
silver
category.
Thus
under
the
modifications
9
manufacturers
could
satisfy
no
more
than
75
percent
of
the
10
AT
PZEV
category
using
banked
NEV
credits
in
the
2009
11
model
year,
with
the
percentage
decreasing
to
50
percent
12
in
2010
and
subsequent
years.

13
Staff
proposes
this
change
in
order
to
ensure
14
some
minimum
level
of
AT
PZEV
production
in
2009
and
later
15
years
without
regard
to
the
availability
of
NEV
credits,

16
while
providing
lead
time
and
flexibility
in
the
years
17
prior
to
2009
for
manufacturers
that
may
not
have
18
sufficient
AT
PZEV
products
available
in
that
timeframe.

19
The
2001
amendments
did
not
include
severability
20
clauses.
A
severability
clause
expresses
the
intent
that
21
if
one
element
of
a
regulation
is
invalidated,
the
22
remainder
can
still
be
enforced.
The
key
question
before
23
a
court
considering
the
severability
of
a
portion
of
a
24
regulation
is
what
would
the
agency
have
done
if
precluded
25
from
adopting
the
invalid
provision.

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1
­­
o0o­­

2
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
The
federal
3
court
trial
held
that
the
AT
PZEV
provisions
for
hybrid
4
electric
vehicles
were
not
severable.
It
was
not
clear
to
5
the
Court
whether
the
Board
would
have
proceeded
with
the
6
regulation
if
the
regulation
did
not
result
in
improved
7
fuel
economy.

8
Additionally,
it
appeared
that
the
AT
PZEV
9
provisions
were
critical
to
intended
reductions
in
the
10
number
of
pure
ZEVs.

11
­­
o0o­­

12
ZEV
IMPLEMENTATION
MANAGER
BEVAN:
The
proposed
13
regulation
amendments
contain
both
a
general
severability
14
clause
and
an
additional
clause
specifically
addressing
AT
15
PZEV
provisions
on
hybrids.
The
proposed
resolution
16
contains
a
finding
that
if
AT
PZEV
provisions
are
found
17
preempted,
the
Board
chooses
to
enforce
the
remainder
of
18
the
2003
amendments
rather
than
falling
back
on
the
19
current
ZEV
regulation
if
enforcement
and
implementation
20
have
been
enjoined.

21
This
concludes
our
summary
of
proposed
changes.

22
I
will
now
turn
the
presentation
back
to
Mr.
Shulock
to
23
summarize
the
impacts
and
issues
surrounding
the
proposed
24
amendments.

25
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Thank
you,

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1
Analisa
and
Craig.

2
There'll
be
a
pop
quiz
on
all
of
this
in
3
mid­
afternoon,
so
study
up.

4
The
final
section
of
our
presentation
begins
with
5
a
summary
of
the
effects
of
the
proposed
changes
in
terms
6
of
the
number
of
vehicles
and
air
quality.
We
will
then
7
devote
a
fair
amount
of
attention
to
the
major
issues
that
8
are
facing
you
today.
We
will
conclude
with
our
staff
9
recommendation.

10
Regarding
the
number
of
vehicles,
the
most
11
important
point
to
bear
in
mind
is
that
it
is
not
possible
12
to
provide
firm
estimates.
The
program
provides
great
13
flexibility,
and
thus
the
outcome
will
vary
according
to
14
different
strategies
that
manufacturers
might
pursue.

15
In
addition,
in
our
staff
proposal
the
post­
2008
16
ZEV
requirement
under
the
alternative
compliance
option
is
17
yet
to
be
determined.

18
In
broad
terms,
however,
the
overall
effect
of
19
the
staff
proposal
is
to
reduce
the
number
of
ZEVs
and
20
increase
the
number
of
AT
PZEVs.
The
number
of
PZEVs
is
21
not
significantly
affected
by
our
proposal.

22
­­
o0o­­

23
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Bearing
in
24
mind
that
any
estimates
are
uncertain,
we
have
put
25
together
scenarios
that
allow
us
to
make
an
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1
apples­
to­
apples
comparison
of
the
effect
of
different
2
regulatory
approaches.
This
slide
presents
an
overview
of
3
the
total
number
of
extremely
clean
vehicles
­­
ZEVs,
plus
4
AT
PZEVs,
plus
PZEVs
­­
using
one
such
set
of
assumptions.

5
The
slide
compares
production
under
the
2001
regulation
6
and
the
2003
revised
staff
proposal.

7
As
you
can
see,
the
total
number
of
clean
8
vehicles
increases
under
the
2003
staff
proposal.
This
is
9
due
to
the
fact
that
silver
category
vehicles
can
be
used
10
in
place
of
gold.
And
this
is
not
a
one­
for­
one
11
substitution.
Rather,
several
AT
PZEVS
are
needed
to
12
replace
one
ZEV.

13
I'll
speak
to
some
of
the
underlying
assumptions
14
in
more
detail
in
a
minute.

15
­­
o0o­­

16
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Looking
17
specifically
at
ZEVs,
on
the
base
path
the
requirement
is
18
2
percent
in
the
gold
category,
increasing
over
time.

19
Banked
credits
may
be
used
to
fulfill
that
obligation.

20
This
is
the
same
approach
as
was
used
in
the
2001
21
regulation.

22
On
the
alternative
compliance
path
the
total
23
across
all
large
manufacturers
would
be
250
fuel
cell
24
vehicles
2001
and
2008
if
all
manufacturers
choose
this
25
option.

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1
The
production
level
for
2009
and
beyond
would
be
2
determined
by
the
Board
following
input
from
the
3
independent
expert
review
panel.

4
­­
o0o­­

5
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
For
AT
PZEVs
6
in
the
near
term
the
number
that
will
be
produced
will
7
depend
on
the
manufacturer's
capability
to
produce
such
8
vehicles
and
their
strategy
regarding
the
use
of
banked
9
credits.

10
In
the
long
term
the
AT
PZEV
total
will
change
in
11
response
to
the
gold
requirement
or
ZEV
requirement
that
12
is
in
effect
at
that
time.

13
This
slide
shows
more
specifically
the
number
of
14
AT­
PZEVs
that
would
be
produced
using
our
base
case
15
assumptions
under
the
staff
proposal
versus
under
the
2001
16
regulation.
Again,
the
increase
under
the
2003
proposal,

17
the
upper
line,
is
due
to
AT
PZEVs
being
substituted
for
18
ZEVs.
In
this
illustration
there
is
complete
19
substitution.
There
is
no
ZEV
requirement
in
the
20
out­
years.
This
assumes
that
the
Board
never
takes
an
21
action
to
impose
a
ZEV
requirement
under
the
alternative
22
compliance
strategy
for
2009
and
beyond.
We
recognize
23
that
this
is
not
likely
to
occur,
but
would
show
the
case
24
as
a
bounding
exercise.

25
­­
o0o­­

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1
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
This
slide
2
looks
in
more
detail
at
the
interaction
between
the
ZEV
3
requirements
and
the
number
of
AT
PZEVs.
The
top
line,

4
called
­­
and
it
might
not
be
visible
­­
but
called
"
full
5
use
of
silver
and
gold,"
corresponds
to
the
no­
ZEV
6
requirement
case
that
you
were
just
shown.
This
assumes
7
full
substitution
of
silver
for
gold
throughout
the
life
8
of
the
program.

9
The
bottom
line,
entitled
"
no
use
of
silver
and
10
gold
based
program,"
shows
the
AT
PZEV
totals
if
one
11
assumes
that
ZEV
technology
continues
to
advance,
and
as
a
12
result
there's
a
2
percent
gold
requirement
in
effect
in
13
all
years.
As
you
can
see,
having
a
larger
gold
14
requirement
dramatically
reduces
the
number
of
silver
15
vehicles.

16
In
summary,
under
the
staff
proposal
the
AT
PZEV
17
numbers
would
be
at
least
as
high
as
under
the
2001
18
regulation
and
even
higher
to
the
extent
that
silver
19
vehicles
continue
to
be
allowed
to
substitute
for
gold.

20
­­
o0o­­

21
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
From
an
air
22
quality
standpoint
the
2003
proposal
results
in
additional
23
emission
reductions
as
compared
to
the
2001
regulation.

24
This
difference
is
driven
by
the
assumed
increase
in
AT
25
PZEV
production
that
I
just
discussed.

PETERS
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1
For
ROG
the
proposal
results
in
an
additional
.03
2
tons
per
day
in
2010
and
.04
tons
per
day
in
2020.
For
3
NOx
the
results
are
.06
and
.17
tons
per
day,

4
respectively.

5
­­
o0o­­

6
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
A
7
different
­­
the
gold
and
silver
procedures
­­
would
lead
8
to
somewhat
different
results.

9
The
final
portion
of
our
staff
presentation
we'll
10
walk
through
some
of
the
major
issues
related
to
the
staff
11
proposal.
Ms.
Witherspoon
mentioned
some
of
these
at
the
12
beginning.
I
will
focus
on
four:

13
The
size
of
the
ZEV
requirement
under
the
14
alternative
compliance
option
in
model
years
2009
and
15
beyond,
the
role
of
battery
electric
vehicles,
the
16
long­
term
production
levels
for
silver
vehicles,
and
the
17
possibility
of
granting
ZEV
credit
for
infrastructure.

18
In
each
case
I
will
describe
the
issue,
summarize
19
stakeholder
views,
outline
the
options
available,
and
20
provide
our
staff
response.

21
In
the
staff
proposal
the
ZEV
requirement
for
the
22
alternative
compliance
option
for
model
years
2009
and
23
beyond
is
to
be
determined.
The
requirement
would
be
set
24
by
the
Board
at
a
future
meeting,
following
input
from
the
25
independent
expert
review
panel.
Staff
recommends
this
PETERS
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1
approach
because
the
timing
for
a
ramp
up
of
vehicle
2
production
is
difficult
to
predict.
We
can
say
with
3
confidence
that
production
will
need
to
go
through
several
4
stages
of
increasing
volume
on
the
way
to
5
commercialization.
What
is
less
clear
is
when
those
6
stages
will
occur.

7
For
each
of
the
issues
that
we
will
be
describing
8
we've
attempted
to
summarize
into
a
few
key
points
the
9
comments
we
have
received
from
various
stakeholders.
If
10
we
fail
to
accurately
characterize
anyone's
position,
let
11
me
apologize
in
advance.
In
any
event,
the
stakeholders
12
will
have
a
chance
later
on
to
speak
for
themselves,
and
13
you'll
hear
their
views
very
clearly.
Our
intent
here
is
14
to
give
you
a
preview
of
the
main
points.

15
Turning
to
the
ZEV
requirement
for
2009
and
16
beyond.
This
appears
to
be
the
most
controversial
of
all
17
the
issues
before
you
today.

18
From
the
environmental
side
we've
been
told
it
is
19
important
to
keep
the
pressure
on,
that
a
long­
term
20
technology­
forcing
goal
is
needed
to
promote
competition
21
to
achieve
the
next
generation
of
ZEV
technologies.

22
They've
also
noted
that
manufacturer
public
statements
23
have
predicted
rapid
fuel
cell
development.

24
­­
o0o­­

25
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
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1
automakers,
in
contrast,
have
stated
that
the
appropriate
2
goal
for
2009
will
vary,
depending
on
future
developments,

3
and
cannot
be
predicted
at
this
time.
In
their
view
an
4
overly
ambitious
goal
is
not
credible.
They
would
expect
5
it
to
be
relaxed
in
the
future.

6
If
such
a
goal
is
maintained
and
ultimately
is
7
enforced,
the
manufacturers
argue
that
it
would
waste
8
resources
by
requiring
vehicle
totals
beyond
what
is
9
needed
for
technology
development
purposes.

10
­­
o0o­­

11
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
options
12
before
you
are
controversial,
no
doubt,
but
relatively
13
straightforward.
You
could
retain
the
staff
proposal
14
under
which
the
2009
total
is
to
be
determined
at
a
later
15
date.

16
You
could
require
that
a
demonstration
level
17
quantity,
for
example,
another
250
vehicles,
be
continued
18
in
the
next
phase.
This
would
seem
to
be
the
minimum
19
number
that
would
be
necessary
on
any
path
towards
20
commercialization.

21
Or
you
could
establish
some
higher
target
level,

22
for
example,
a
10­
fold
increase
from
the
first
stage.

23
­­
o0o­­

24
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Our
staff
25
observations
on
this
point
are
as
follows:

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1
It
is
clear
and
not
disputed
that
in
order
to
2
achieve
commercialization
a
ramp
up
in
production
must
3
occur.
It
also
seems
to
be
generally
accepted
that
it
4
makes
sense
to
think
of
the
ramp
stages
in
multiples
of
5
ten,
moving
from
tens
of
vehicles,
to
hundreds,
to
6
thousands.

7
What
is
less
clear
is
when
such
increases
will
8
occur.
You
will
hear
considerable
testimony,
no
doubt,
on
9
this
point.

10
Staff
has
explained
the
rationale
for
our
11
approach,
under
which
the
requirement
for
2009
and
beyond
12
would
be
determined
at
a
future
Board
meeting.
We
13
recognize,
however,
that
the
Board
may
wish
for
a
variety
14
of
reasons
to
establish
a
firm
target
at
this
time.

15
The
next
issue
involves
how
battery
electric
16
vehicles
fit
into
our
alternative
compliance
option
and
17
into
the
staff
proposal
generally.

18
­­
o0o­­

19
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Under
the
20
staff
proposal
manufacturers
must
build
Type
3
ZEVs,
which
21
today
means
fuel
cells,
in
order
to
qualify
for
the
22
alternative
compliance
option.
The
question
that
has
been
23
raised
is
whether
other
types
of
ZEVs
should
also
count
24
towards
that
requirement.

25
­­
o0o­­

PETERS
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1
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
2
stakeholders
that
have
weighed
in
on
this
issue
feel
that
3
the
proposed
requirement
does
not
provide
an
incentive
for
4
ongoing
development
of
battery
EV
technology.

5
I
should
note
that
staff
actually
raised
this
6
issue
ourselves
in
our
March
staff
document.
At
that
time
7
we
were
aware
of
the
issue
and
were
generally
supportive
8
of
the
point
being
made.
But
we
wanted
to
get
stakeholder
9
input
before
working
through
all
of
the
implications.

10
­­
o0o­­

11
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
From
an
12
option
standpoint
one
way
to
address
this
issue
is
to
13
require
battery
EV
production
in
addition
to
fuel
cells.

14
This
has
been
suggested
by
the
EV
Drivers
Group.

15
Alternatively
you
could
allow
Battery
Electric
16
Vehicles
to
meet
some
portion
of
the
required
minimum
17
production
requirement
under
the
alternative
compliance
18
option.

19
­­
o0o­­

20
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
From
the
21
staff's
standpoint
this
issue
should
be
addressed.
We
22
would
recommend
that
battery
EV's
other
than
NEVs
be
23
allowed
to
satisfy
a
portion
of
the
minimum
production
24
requirement.
This
provides
additional
flexibility
and
25
also
provides
an
incentive
to
pursue
a
broader
range
of
PETERS
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1
technologies.

2
We
recommend,
however,
that
BEV
substitution
be
3
treated
as
an
option
rather
than
as
a
requirement,
for
all
4
of
the
reasons
that
we
discussed
earlier,
we
do
not
5
believe
it
is
appropriate
to
require
that
manufacturers
6
simultaneously
pursue
battery
EV
and
fuel
cell
production.

7
If
they
wish
to
do
so,
that's
fine.
But
we
would
not
8
propose
that
it
be
a
requirement.

9
We
would
further
recommend
that
the
proposal
10
require
some
minimum
number
of
fuel
cells,
for
example,

11
one
half
of
the
original
obligation.

12
Finally,
it
will
be
necessary
to
set
an
13
appropriate
credit
ratio
between
battery
EVs
and
fuel
14
cells
to
ensure
that
this
approach
if
pursued
by
15
manufacturers
would
result
in
a
meaningful
number
of
BEVs.

16
For
example,
the
credit
levels
could
be
set
such
17
that
if
followed
by
all
manufacturers,
this
option
would
18
result
in
production
of
several
thousand
battery
EVs
in
19
the
2005
through
2008
time
period.

20
­­
o0o­­

21
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
next
22
issue
involves
future
production
levels
for
silver
23
category
vehicles.
As
you
may
recall
from
the
discussion
24
of
vehicle
volumes,
long­
term
silver
production
levels
25
will
vary
with
the
ZEV
requirement.
If
the
future
gold
PETERS
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1
requirement
is
large,
the
need
to
use
silver
vehicles
to
2
backfill
would
be
small.
On
the
other
hand,
if
the
future
3
gold
requirement
remains
small,
it
would
result
in
4
significant
quantities
of
silver
vehicles
in
2012
and
5
beyond.

6
In
thinking
about
this
issue,
it
is
important
to
7
keep
in
mind
that
the
purpose
of
the
silver
category
is
to
8
push
design
improvement
and
cost
reduction
for
9
ZEV­
enabling
technologies
such
as
batteries,
motors,
and
10
electronic
controls.
That
is
what
should
ultimately
guide
11
the
appropriate
silver
volume.

12
­­
o0o­­

13
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
On
this
14
issue
automakers
have
commented
that
the
long­
term
silver
15
production
levels
referenced
in
the
staff
report
exceed
16
what
is
needed
to
achieve
design
improvements
and
17
economies
of
scale.
They
also
make
the
point
that
the
18
market
may
not
readily
absorb
the
required
number
of
19
vehicles.

20
­­
o0o­­

21
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Environmental
22
representatives
have
stated
that
a
high
volume
of
silver
23
production
will
be
needed
until
ZEV
costs
have
been
24
brought
down
to
affordable
levels.
They
also
have
argued
25
that
the
requirements
should
be
more
stringent
in
some
PETERS
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1
respects,
not
less.

2
­­
o0o­­

3
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
One
possible
4
approach
that
could
be
adopted
here
is
to
use
the
5
independent
expert
review
panel
to
assess
the
status
of
6
silver
technology
development.
Or
you
could
take
action
7
today
to
directly
amendment
the
future
silver
requirement.

8
­­
o0o­­

9
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Before
going
10
to
our
recommendation
I
would
first
like
to
point
out
that
11
the
silver
production
levels
shown
in
the
staff
report
12
assume
no
future
ZEV
production.
Thus
those
levels
would
13
decline
as
ZEV
production
expands.
In
addition
any
14
requirement
would
be
spread
across
a
number
of
15
manufacturers
and
platforms
such
that
the
actual
number
of
16
any
particular
vehicle
would
be
smaller
than
the
totals
17
shown
in
the
graphs
that
I
showed
previously.

18
Nevertheless
we
recognize
that
this
issue
merits
19
attention.
We,
therefore,
recommend
that
the
long­
term
20
status
of
silver
category
vehicles
be
included
in
the
21
review
conducted
by
the
independent
expert
review
panel.

22
This
is
consistent
with
our
approach
towards
the
ZEV
23
category.

24
Let's
take
another
look
in
the
future
when
more
25
information
is
available.
The
panel
could
address
PETERS
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1
questions
such
as:
Have
full
economics
of
scale
been
2
achieved?
Is
the
technology
optimized
from
a
design
3
standpoint?
And
most
fundamentally,
given
all
of
the
4
above,
would
additional
silver
production
continue
to
5
contribute
to
the
goal
of
ZEV
commercialization?

6
­­
o0o­­

7
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
final
8
issue
that
we
would
like
to
bring
to
your
attention
9
involves
infrastructure
and,
more
broadly
speaking,
the
10
relationship
between
the
ZEV
Program
and
efforts
to
11
promote
smart
mobility
concepts.
There's
considerable
12
emerging
interest
in
what
have
been
termed
smart
mobility
13
built
corridors.
Board
Member
DeSaulmier
has
been
playing
14
a
leadership
role
in
this
area.
In
brief,
the
notion
is
15
to
define
specific
corridors
to
serve
as
demonstrations
16
and
test
beds
for
what
could
be
achieved
with
innovative
17
approaches
to
transportation,
smart
growth,
clean
fuels
in
18
vehicles,
and
system
management
and
integration
tools.

19
For
example,
a
corridor
could
include
provisions
20
for
transit,
smart
parking
signage,
car
sharing,
and
clean
21
vehicles.
The
specific
features
employed
would
depend
on
22
the
needs
at
that
location.

23
The
existing
ZEV
regulation
already
supports
some
24
aspects
of
this
approach.
For
example,
the
regulation
25
provides
additional
ZEV
credit
for
vehicles
employed
in
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1
car
sharing
or
station
car
applications.
And
clearly
the
2
regulation
supports
the
development
of
clean
vehicles.

3
The
question
here
is
are
there
opportunities
for
further
4
synergy
between
the
ZEV
regulation
and
the
smart
mobility
5
corridor
concepts.
One
possible
area
of
such
overlap
is
6
the
provision
of
hydrogen
infrastructure.

7
­­
o0o­­

8
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
We
9
originally
posed
the
issue
of
hydrogen
infrastructure
in
10
our
November
2002
strawman
document.
We
have
received
11
very
little
comment
on
the
issue.
One
thing
we
were
told
12
by
several
automakers
is
that
the
regulatory
structure
13
should
not
imply
that
infrastructure
is
a
manufacturer
14
responsibility.
They
say
that
they
have
their
hands
full
15
building
the
vehicles
and
that
fuel
providers
should
be
16
active
on
the
infrastructure
front.

17
We
have,
however,
received
some
informal
18
indications
of
interest
­­
potential
interest
if
the
19
program
were
properly
defined
and
structured.

20
­­
o0o­­

21
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
We
have
22
likewise
gotten
just
limited
comment
from
environmental
23
supporters
along
the
lines
that
providing
such
an
option
24
would
increase
manufacturer
flexibility
and
help
enable
25
ZEV
commercialization.

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1
­­
o0o­­

2
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
If
you
3
choose
to
address
this
issue,
the
primary
option
that
4
we're
aware
of
today
would
be
to
allow
ZEV
credit
for
5
placement
of
hydrogen
infrastructure,
perhaps
in
6
conjunction
with
the
smart
corridor
concepts
mentioned
7
above.
In
addition,
it
would
be
possible
to
explore
other
8
incentives
and
non­
regulatory
approaches.

9
­­
o0o­­

10
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Staff
11
believes
that
this
is
a
fruitful
area
to
investigate.

12
There
are,
however,
many
complex
issues
involves.
We
13
propose
that
staff
be
directed
to
investigate
all
of
these
14
issues
and
report
back
to
the
Board
in
three­
months'
time
15
as
to
possibilities
for
further
action.

16
­­
o0o­­

17
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
In
18
conclusion,
staff
recommends
approval
of
the
proposed
19
amendments.
They
provide
an
increased
air
quality
20
benefit,
they
address
the
pending
litigation
issues,
and
21
they
maintain
progress
towards
transforming
California's
22
vehicle
fleet
to
zero
emissions.

23
Thank
you.
We're
available
to
respond
to
any
24
questions
that
you
may
have.

25
CHAIRPERSON
LLOYD:
Thank
you
very
much
for
that
PETERS
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1
extensive,
thorough,
and
very
explicit
staff
presentation.

2
What
I
would
like
to
do
­­
I
was
being
rather
3
selfish
by
saying
we
wouldn't
take
a
break,
not
realizing
4
our
court
reporter
has
to
take
a
break,
because
he
has
to
5
be
fed.

6
So
what
I
will
do,
I'll
ask
my
colleagues
if
we
7
can
hold
on
to
questions.
But
before
the
break,
I
would
8
like
to
invite
the
head
of
the
California
Power
Authority,

9
David
Freeman,
who's,
as
you
know,
long
committed
to
this
10
subject.

11
David,
I
know
you
have
to
leave
for
another
12
engagement.
But
we
appreciate
you
coming
and
we'd
like
to
13
afford
you
the
opportunity
to
kick
off
the
testimony.

14
MR.
FREEMAN:
Thank
you,
Mr.
Chairman.
I
15
especially
appreciate
your
courtesy
in
light
of
the
fact
16
that
you
know
that
everything
I
say
will
not
be
music
to
17
your
ears.
It
shows
your
impartiality
and
your
fairness,

18
and
I
really
appreciate
that.

19
I
appear
today
not
on
behalf
of
an
agency
of
the
20
state
government,
not
on
behalf
of
the
environmentalists,

21
not
on
behalf
of
the
automobile
companies,
but
as
a
22
concerned
citizen
of
77
years
old
that
has
spent
the
last
23
25
years
being
actively
involved
in
this
subject.
And
24
perhaps
my
views
might
have
some
added
weight
because
I
25
don't
represent
anyone
else.
I
hope
so.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
162
1
I
was
present
at
the
creation
when
this
Board
2
stood
tall
in
the
saddle
and
embarked
on
this
great
3
adventure,
of
which
of
you
should
be
very,
very
proud.

4
Perhaps
you
don't
realize
fully
what
you've
accomplished.

5
I
was
into
the
electric
car
game
in
a
sense
way
before
6
1990.
In
fact
when
I
was
the
Chairman
of
the
Board
of
the
7
Tennessee
Valley
Authority
under
President
Carter,
I
had
a
8
letter
from
the
president
of
General
Motors
in
1979
9
promising
me
an
electric
car
in
every
GM
showroom
by
1984.

10
(
Laughter.)

11
MR.
FREEMAN:
We
labored
in
these
vineyards
12
virtually
all
alone
until
California
took
the
stand
that
13
you
did
with
the
ZEV
mandate
and
with
the
Board's
decision
14
in
1990.
And
I
might
say
that
you
had
very
little
other
15
than
the
analysis
of
the
staff,
who
­­
there
were
no
cars,

16
there
was
no
technology.
There
was
a
need
in
the
public
17
interests
for
the
health
of
the
children
and
grownups
of
18
California
to
have
a
bunch
of
the
cars
having
zero
19
emission
with
them.
And
you
made
that
stand
and
you
stood
20
by
your
stand
through
all
these
years,
through
all
sorts
21
of
administrations.
And
you
alone
are
responsible
for
the
22
fact
that
we
have
these
hybrid
cars
with
the
electric
23
drive,
that
wouldn't
have
been
there
but
for
this
Board,

24
and
that
we
are
now
on
the
move
toward
cleaner
cars.

25
Now
is
the
time
to
catch
the
falling
flag.
I
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
163
1
don't
think
your
staff
is
tired.
I
think
your
staff
is
2
very
bright
and
very
caring.
But
the
history
of
3
agencies
­­
and
I've
watched
all
of
them
over
the
years
­­

4
is
that
the
people
that
you
regulate
tend
to
make
their
5
case
over
and
over
again,
you
get
so
sick
and
tired
of
6
having
to
listen
to
them
that
you
finally
pay
a
little
bit
7
of
attention
to
them.
It's
just
human
nature.

8
And,
you
know,
the
irony
of
it
all
is
that
you've
9
got
electric
cars
that
are
out
there
on
the
road
that
10
work.
The
technology
­­
you
know,
you're
right
at
the
11
doorsteps
of
success.
And
your
staff
rightfully
brags
12
about
all
this
and
then
reaches
the
wrong
conclusions.

13
(
Applause.)

14
MR.
FREEMAN:
It
kind
of
breaks
your
heart
to
see
15
people
that
have
been
so
successful
and
­­
and
every
one
16
of
the
little
points
in
this
­­
thank
God
we
don't
have
to
17
take
a
pop
quiz
­­
of
your
program
are
logical,
rational,

18
but
they
add
up
to
punting
when
we're
on
the
one­
yard
19
line.
There
is
no
reason
in
the
world
why
the
mandate
20
that
you
started
with,
now,
can't
just
be
implemented.

21
Now,
frankly,
I'm
going
to
surprise
you
because
I
22
think
that
you
have
a
situation
where
the
perfect
is
the
23
enemy
of
the
good.
A
ZEV
needs
to
be
further
defined
as
a
24
car
that
is
run
by
fuel
that
is
carbon
free
and
has
maybe
25
only
a
tiny
bit
of
oxides
of
nitrogen.
Of
course
you
get
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
164
1
that
when
it
rains
too.
Maybe
we
abolish
rain
in
this
2
state.
I
don't
know.

3
But
a
car
that
runs
on
hydrogen
is
­­
90­
some­
odd
4
percent
is
clean
as
an
electric
­­
it's
cleaner
than
an
5
electric
car.
And
I
hate
to
say
this,
but
an
electric
car
6
that
gets
its
electricity
from
coal
is
much
more
pollutant
7
than
a
hydrogen
vehicle
based
upon
renewable
energy.
So
I
8
think
it's
time
to
stick
by
your
guns,
but
recognize
that
9
electric
cars
will
be
and
can
be
a
major
part
of
the
10
family.

11
But
we
need
to
have
the
hydrogen
economy
now,
not
12
20
years
from
now.
I
hate
to
put
it
this
way,
but
I
will.

13
I
first
started
the
research
on
fuel
cells
when
I
was
in
14
the
White
House
under
Lyndon
Johnson
back
in
'
68.
And
I
15
had
the
old
Office
of
Coal
Research
start
putting
some
16
money
into
fuel
cells.
I
have
a
lifetime
achievement
17
award
from
the
fuel
cell
people.
But,
quite
frankly,
we
18
are
now
worshiping
at
the
alter
of
a
graven
called
the
19
fuel
cell.
We
don't
need
to
wait
for
the
fuel
cell
to
get
20
cars
that
are
virtually
clean.

21
The
internal
combustion
engine
runs
very
well
on
22
hydrogen.
It's
not
a
military
secret.
You're
entitled
to
23
know
that.
The
whole
world
is
entitled
to
know
that.
And
24
a
hydrogen
hybrid
car
that's
a
plug­
in
would
be
a
car
that
25
could
be
developed
in
this
decade.
And
perhaps
we
need
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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165
1
go
back
to
the
Legislature
and
redefine
a
ZEV
as
being
a
2
car
that
is
virtually,
virtually
free
of
pollution
in
the
3
whole
fuel
cycle,
except
for
maybe
a
tiny
bit
of
oxides
of
4
nitrogen.
We
have
to
take
a
look
at
how
­­
the
entire
5
fuel
cycle,
because
if
we're
going
to
really
have
clean
6
air
in
California,
we've
got
to
get
off
of
fossil
fuels
7
and
recognize
that
renewable
energy
can
now
be
put
in
the
8
gas
tank
in
the
form
of
solar
and
wind
being
converted
to
9
hydrogen
and
running
our
motor
vehicles.

10
This
Board
has
always
had
more
vision
than
11
everybody
else
put
together.
This
is
now
a
time
to
exert
12
that
vision.

13
And
let
me
just
say
one
more
thing.
Something
14
happened
since
the
last
time
we
met.
We
had
some
stupid
15
arguments
before
you
last
time.
Remember,
it
was
the
16
middle
of
the
energy
crisis
and
some
of
these
automobile
17
companies
were
trying
to
tell
you
we
shouldn't
have
18
electric
cars
or
else
there
won't
be
enough
electricity?

19
Well,
it's
two
years
later,
and
we
are
in
no
danger
of
20
being
blacked
out
by
electric
cars.

21
Also
they
raise
this
aggravating
issue
about
22
environmental
justice.
And
of
course
it's
­­
it
was
just
23
maddening
that
they
would
raise
a
serious
issue
like
that
24
with
respect
to
something
that
was
going
to
clean
up
the
25
air
for
everyone.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
166
1
But
I
think
it's
very,
very
important
to
2
recognize
that
since
9/
11
what
you're
talking
about
is
not
3
just
cleaner
air,
but
you're
talking
about
the
security
of
4
this
country.
Oil
is
very
much
a
part
of
our
problems
5
today
as
we
wage
war
in
the
middle
east.
And
this
country
6
needs
to
peak
out
on
how
much
oil
we
use.
And,
therefore,

7
cars
without
oil
are
consistent
with
your
mandate.

8
And
when
you
get
down
and
you
give
40
credits
for
9
the
car
of
the
future
20
years
from
now,
the
fuel
cell
10
car,
and
give
a
maximum
of
16
credits
for
a
car
that
would
11
run
on
hydrogen,
you're
going
down
the
right
path
but
you
12
all
haven't
gotten
there
yet.
I
mean
it
is
time
to
13
recognize
that
there
is
new
technology
that
could
be
put
14
into
the
family.
You
don't
need
to
abandon
your
vision.

15
You
need
to
enlarge
your
vision.
And
if
you
think
­­
your
16
lawyers
think
that
it
takes
a
slight
amendment
to
the
ZEV
17
statute
in
order
to
include
a
car
that's
run
on
renewable
18
hydrogen,
I
think
you
ought
to
seriously
consider
doing
19
that.

20
And
then
all
these
numbers
­­
and
it's
21
interesting
to
me
how
a
group
of
people
who
say
they
don't
22
know
enough
to
know
what
the
standards
ought
to
be
can
23
give
us
all
these
charts
to
tell
us
what's
going
to
24
happen.
It's
just
pretty
hard
for
me
to
reconcile
that.

25
You
all
are
smarter
and
better
than
you
think
you
are.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
167
1
You've
just
had
too
much
time
with
the
automobile
2
industry.
It's
just
plain
and
simple.

3
(
Applause.)

4
MR.
FREEMAN:
Thank
you
very
much.

5
CHAIRPERSON
LLOYD:
Thank
you,
David.
And
I'm
6
sure
on
some
of
those
points
you'll
get
agreement
with
the
7
auto
industry.

8
With
that,
any
comments
or
questions
from
my
9
colleagues?
Otherwise
we're
going
to
take
a
15­
minute
10
break
for
the
court
reporter.
So
come
back
at
1:
20.
And
11
then
we
will
take
any
comments
from
the
Board
at
this
time
12
or
questions
of
staff.
And
then
we
will
begin
testimony.

13
And
the
first
will
be
Dr.
Anderman,
Dr.
Frank,

14
and
Amanda
Miller.

15
(
Thereupon
a
lunch
break
was
taken.)

16
17
18
19
20
21
22
23
24
25
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
168
1
AFTERNOON
SESSION
2
CHAIRPERSON
LLOYD:
Would
staff
and
colleagues
on
3
the
Board
please
take
their
seats
so
we
can
resume.

4
First
off
I
would
like
to
ask
the
ombudsman,

5
would
you
please
describe
the
public
participation
process
6
that
occurred
while
this
item
was
being
developed,
and
7
share
any
concerns
or
comments
with
the
Board
at
this
8
time.

9
OMBUDSMAN
TSCHOGL:
Thank
you,
Chairman
Lloyd
and
10
members
of
the
Board.

11
The
proposed
amendments
to
the
zero
emission
12
vehicle
regulations
were
developed
through
interactions
of
13
ARB
staff
with
representatives
of
the
automotive
industry,

14
environmental
organizations,
utilities,
air
pollution
15
control
agencies
within
California
as
well
as
from
other
16
states,
electric
vehicle
advocates
and
drivers,
and
other
17
interested
parties.

18
Over
the
course
of
developing
this
proposal
staff
19
held
more
than
70
meetings
and
conference
calls
with
20
various
stakeholders,
along
with
literally
hundreds
of
21
informal
telephone
conversations
and
E­
mail
exchanges.

22
In
preparation
for
this
Board
hearing,
originally
23
planned
for
February,
staff
developed
an
initial
proposal
24
that
was
presented
and
discussed
at
a
workshop
on
December
25
5th,
2002.
This
proposal
addressed
issues
raised
as
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
169
1
result
of
industry,
litigation,
and
also
attempted
to
2
address
fundamental
concerns
regarding
the
state
of
pure
3
ZEV
technologies.

4
Subsequent
to
the
workshop
staff
conducted
5
numerous
meetings
with
affected
stakeholders
and
6
interested
parties,
and
received
considerable
written
7
comment,
all
of
which
was
used
in
developing
the
staff
8
report.
The
notice
for
today's
meeting
and
the
staff
9
report
were
mailed
and
posted
ARB's
website
January
10th,

10
2003.

11
As
noted
in
the
January
10
staff
report,
there
12
were
several
additional
issues
that
needed
further
13
consideration.
While
working
to
resolve
these
issues
it
14
became
apparent
to
staff
the
Board
meeting
should
be
15
postponed
by
one
month
to
ensure
stakeholders
had
adequate
16
time
for
review
and
comment.
Staff
used
this
additional
17
time
to
continue
discussions
with
stakeholders
to
resolve
18
key
issues.

19
Staff
released
a
set
of
additional
proposed
20
modifications
as
part
of
a
new
document
released
on
March
21
5th,
2003.

22
In
summary,
staff
has
worked
with
stakeholders
23
through
workshops,
conference
calls,
focused
meetings,
and
24
one­
on­
one
communications
to
develop
the
amendments
you
25
are
considering
today.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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170
1
Thank
you.

2
CHAIRPERSON
LLOYD:
Thank
you
very
much.

3
Do
any
of
my
colleagues
have
any
comments
at
this
4
time
of
staff
or
the
staff
presentation?

5
Mr.
Calhoun.

6
BOARD
MEMBER
CALHOUN:
One
of
the
statements
you
7
made,
Chuck,
during
your
presentation
was
that
it
made
8
sense
for
ramp
up
to
be
in
multiples
of
10
or
something
9
like
this.
It's
logical.
I'm
trying
to
understand
and
10
have
an
appreciation
for
the
logic.

11
So
can
you
explain
it
to
me?

12
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
thinking
13
there
is
that,
in
that
first
generation,
you're
testing
14
the
concept
and,
you
know,
a
lot
of
things
in
play.
Those
15
vehicles
are
hand
built,
extremely
expensive,
and
you're
16
learning
a
lot
as
you
go
along.
Then
once
you
figured
17
that
out
and
get
to
the
next
generation,
things
begin
to
18
get
more
optimized,
the
cost
comes
down.
Then
you're
19
starting
to
ask
different
questions,
maybe
durability,

20
performance­
type
questions.
And
so
a
larger
fleet
is
21
needed
to
really
deal
with
those
issues.
And
then
as
you
22
get
beyond
that
and
you're
really
starting
to
talk
about
23
real­
world
drivability
and
the
cost
has
come
down
further,

24
it's
appropriate
to
have
a
larger
number.

25
Now,
is
it
multiples
of
10
versus
multiples
of
9
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
171
1
versus
multiples
of
11.
There's
­­
I
don't
think
there's
2
any
magic
to
that.
But
in
our
dealings
with
manufacturers
3
and
the
fuel
cell
suppliers
in
conversations
that
we've
4
had,
in
general
terms
this
notion
of
10,
100,
1,000
seemed
5
to
be
something
that
people
thought
made
sense.

6
With
one
other
­­
let
me
throw
one
other
caveat.

7
It's
conceivable
that
you
might
build
10,
and
based
upon
8
that
you
need
to
start
over
again
and
build
10
more.
You
9
know,
the
stages
don't
necessarily
move
inexorably,
but
10
that
there
are
different
stages
at
which
you're
learning
11
different
things
and
you
have
different
cost
targets.

12
BOARD
MEMBER
CALHOUN:
I
won't
argue
with
you
13
about
it.
It's
just
amusing
to
­­
and
I
guess
it
makes
as
14
much
sense
as
going
up
in
10
or
15
or
20.
So
I
won't
15
question
that.

16
CHAIRPERSON
LLOYD:
Supervisor
Roberts.

17
BOARD
MEMBER
ROBERTS:
Yeah.
Mr.
Chairman,

18
yesterday
when
we
were
talking,
we
were
talking
about
a
19
Department
of
energy
timeline.
And
if
that
was
shared
20
with
us,
I
didn't
see
it.
But
I
was
wondering,
maybe
if
21
that's
available
­­

22
CHAIRPERSON
LLOYD:
I
think
staff
has
that.

23
EXECUTIVE
OFFICER
WITHERSPOON:
You
also
have
it
24
in
packets
at
your
desk,
or
you
should.
It
looks
like
25
this.
And
it's
in
a
yellow
folder
along
with
­­

PETERS
SHORTHAND
REPORTING
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1
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Catherine,

2
we're
told
that
they
do
not
have
it.

3
Excuse
me.

4
EXECUTIVE
OFFICER
WITHERSPOON:
Okay.
We'll
make
5
sure
that
you
get
it.

6
But
briefly
to
summarize,
the
DOE
has
also
7
characterized
different
demonstrations
at
5500,
5,000,

8
with
various
performance
parameters
to
have
been
met,
sort
9
of
gateways
before
you
move
to
the
next
phase.
And
in
our
10
conversations
with
automakers,
they
have
not
objected
to
11
that
scaling
logic.
Really
the
conversations
have
been
12
about
when.
And
not
a
lot
of
certainty
today,
but
13
logically
it
doesn't
seem
to
offend
them,
that
assumption.

14
BOARD
MEMBER
CALHOUN:
I
was
just
trying
to
15
understand
his
rationale
for
it.
It
just
didn't
make
16
sense.
And
so
I
suppose
it
does
make
sense,
or
it
doesn't
17
make
sense.

18
EXECUTIVE
OFFICER
WITHERSPOON:
It
seems
to
make
19
sense.
They're
far
more
focused
on
whether
or
not
we're
20
ready
at
a
particular
moment
in
time
to
move
to
the
next
21
phase.
And
then
we
can
discuss
what
the
actual
numbers
22
are.
But,
you
know,
just
moving
from
tens
of
vehicles,
to
23
hundreds,
to
thousands,
you
know
­­
that
things
have
to
24
have
changed
before
you
move
to
the
next
step
in
their
25
view.

PETERS
SHORTHAND
REPORTING
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1
BOARD
MEMBER
CALHOUN:
All
right.
Thanks.

2
CHAIRPERSON
LLOYD:
Think
I
can
get
a
copy
of
3
that
proposal?

4
Professor
Friedman.

5
BOARD
MEMBER
HUGH
FRIEDMAN:
I
just
have
a
couple
6
questions
for
clarification.

7
In
the
staff
presentation,
you
left
open
a
number
8
of
areas
for
further
consideration
or
at
least
for
options
9
for
us
working
with
you
to
determine.
And
on
slide,
I
10
guess
it's
68,
the
role
of
Battery
Electric
Vehicles,
the
11
options
set
out
are
to
consider
requiring
BEV
production
12
in
addition
to
fuel
cells,
or
to
allow
battery
electrics
13
to
meet
some
portion
of
the
required
minimum
fuel
cell
14
requirement,
which
I
understand
to
be
250
for
these
15
interim
years,
a
short
term
in
years.

16
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
That
is
17
correct.

18
BOARD
MEMBER
HUGH
FRIEDMAN:
Total,
250
aggregate.

19
I
assume
if
the
staff
is
­­
and
then
the
next
20
slide,
the
staff's
response
was
to
suggest
­­
recommend
21
that
battery
electrics
be
allowed
to
satisfy
a
portion
of
22
that
250
fuel
cell
requirement,
or
each
manufacturer's
23
allocated
portion
of
that
could
be
satisfied,
to
some
24
extent
to
be
determined,
by
alternative
battery
electric.

25
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
That
is
PETERS
SHORTHAND
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362­
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1
correct.

2
BOARD
MEMBER
HUGH
FRIEDMAN:
As
an
option,
not
a
3
requirement.
But
they
could
choose
to
do
that.

4
But
there
ought
to
at
least
be
half
their
quota
5
be
satisfied
with
fuel
cell
to
keep
some
minimum
fuel
cell
6
technology
development.

7
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Exactly.

8
BOARD
MEMBER
HUGH
FRIEDMAN:
So
I
guess
subsumed
9
in
that
thinking
must
be
the
idea
that
if
all
the
10
manufacturers
elected
that
option,
to
only
do
half
of
11
their
fuel
cell
quota,
and
the
rest
with
battery
electric,

12
that
125
fuel
cells
among
all
manufacturers
over
the
13
four­
year
period,
five­
year
period,
or
whatever
it
is,

14
would
be
adequate
to
serve
as
a
demonstration
and
to
15
advance
the
technology
to
test
it
out.

16
What
would
that
do
if,
for
example,
we
wanted
to
17
impose
a
fixed
number
in
2009
for
zero
emitting
vehicles?

18
And
assuming
they
would
all
­­
presumably
the
choice
would
19
be
fuel
cell.
Not
necessarily,
but
presumably.

20
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
I'm
not
sure
21
I
understand
the
question.

22
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
do
you
think
23
125
fuel
cells
over
these
years
until
2009
would
be
24
adequate
as
a
predicate,
let's
say,
a
scientific
predicate
25
to
support
some
order
of
magnitude
of
requirement
imposed
PETERS
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REPORTING
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362­
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175
1
in
2009
and
other
out­
years
increasingly
of
zero
emission
2
vehicles
production?

3
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Catherine,

4
were
you
going
to
­­

5
EXECUTIVE
OFFICER
WITHERSPOON:
Yeah,
Professor
6
Friedman,
let
me
try
­­

7
BOARD
MEMBER
HUGH
FRIEDMAN:
Am
I
making
any
8
sense?

9
EXECUTIVE
OFFICER
WITHERSPOON:
No,
I
understand
10
your
­­
you
are
making
sense.

11
Staff
believes
that
each
manufacturer
is
going
to
12
make
a
certain
number
of
fuel
cell
vehicles
anyway
for
13
competitive
reasons,
you
know,
on
the
order
of
10
to
20.

14
And
the
effect
of
the
alternative
compliance
pathway
is
to
15
push
them
all
the
way
to
the
stretch
goal,
a
higher
16
complement
at
the
market
share.
And
were
you
to
establish
17
a
target
in
the
next
interval
of
time,
'
09
through
'
11,
we
18
would
continue
whatever
decision
you
made
I
believe
for
19
this
first
set,
and
you
could
do
BEV
substitution
in
the
20
next
set
as
well.
Then
we'd
need
to
think
about
the
21
ratios
because
we're
rationing
in
large
part
based
on
the
22
cost
of
building
one
versus
the
other.
And
so
we
would
23
want
to
keep
those
cost
comparisons
accurate
and
current
24
as
we
moved
forward
in
time.

25
Did
I
answer
your
question?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
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176
1
BOARD
MEMBER
HUGH
FRIEDMAN:
Yeah,
I
think
so,

2
sort
of.

3
But
you
­­
another
recommendation
at
the
last
one
4
was
set
an
appropriate
credit
ratio,
and
you're
addressing
5
that.

6
Do
you
have
any
feel
­­
are
you
thinking
that
7
should
be
based
on
comparative
costs?

8
EXECUTIVE
OFFICER
WITHERSPOON:
We're
thinking
9
about
comparative
costs
in
2008
when
the
majority
of
the
10
fuel
cell
vehicles
would
actually
be
built.
And
we've
11
been
talking
about
20
to
1.
We're
still
refining
­­
20
to
12
1
with
a
city
car,
substituting
for
a
single
fuel
cell
13
vehicle.
But
we
haven't
settled
on
exactly
what
the
right
14
number
is.
And
we
would
ratio
fuel
­­
full
function
EVs
a
15
little
less
than
that
because
they
cost
more.
That
kind
16
of
thought.

17
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
if
we
wanted
18
to
pursue
that,
and
I'm
only
speaking
for
myself,
how
19
would
we
go
about
that?
I
mean
we
haven't
gotten
anything
20
definitive
to
adopt
now.

21
EXECUTIVE
OFFICER
WITHERSPOON:
If
you
decided
22
you
wanted
us
to
pursue
this
option,
we
would
develop
a
23
proposal
as
part
of
the
15­
day
changes
and
send
it
out
for
24
comment,
and
then
move
forward
on
a
final
regulation.

25
We've
given
you
in
rough
terms
what
we
think
it
ought
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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177
1
look
like,
that
there
should
be
a
ratio,
that
there
should
2
be
a
minimum
number
of
fuel
cells.
And
we
proposed
half.

3
And
any
advice
you
had
to
give
us
about
those
general
4
parameters
or
more
specific
ones,
we
would
­­

5
BOARD
MEMBER
HUGH
FRIEDMAN:
Two
to
one
­­
it
was
6
2
to
1
or
­­

7
EXECUTIVE
OFFICER
WITHERSPOON:
Well,
for
­­
no,

8
for
BEVs,
20
to
1.

9
BOARD
MEMBER
HUGH
FRIEDMAN:
Twenty
to
one.
I'm
10
sorry.
Yeah,
20
to
1.

11
Well,
I
just
raised
it
because
I
hope
I'll
hear
12
from
anyone
who's
interested
on
that.

13
And
the
other
question
I
had
was
on
credits
for
14
infrastructure.
Maybe
that's
not
where
it
belongs,
but
it
15
seems
to
sort
of
fit.
If
we
wanted
to
talk
about
and
have
16
the
staff
analyze
and
make
a
recommendation
on
credit
for
17
a
stationary
fuel
cell
distributed
generation
systems,

18
even
though
they're
not
mobile,
but
if
they're
the
19
equivalent
­­
functional
equivalent
of
the
mobile
fuel
20
cell
stack
and
some
basis
for
some
kinds
of
relative
21
credits,
but
not
only
for
a
portion
of
anyone's
quota
or
22
mandate,
and
with
some
kind
of
a
sunset,
we
could
ask
­­
I
23
guess
the
way
to
do
it
would
we
to
ask
the
staff
to
24
consider
that
if
that
were
the
desire.

25
EXECUTIVE
OFFICER
WITHERSPOON:
We
could
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
178
1
definitely
look
into
that.
You
know,
one
possibility
is
2
as
an
analog
to
BEV
substitution.
Though
we're
still
3
pondering
what
the
ratios
would
be,
and
if
there's
any
4
unintended
consequences
we
haven't
imagined.
The
one
5
possibility
or
one
reason
to
combine
it
with
the
6
infrastructure
analysis
is
that
people
have
talked
about
7
co­
location
of
hydrogen
power
generation
with
hydrogen
8
fueling.
And
so
that
would
give
us
a
chance
to
look
at
9
the
full
picture
here
and
make
sure
we
captured
every
10
conceivable
credit
scenario
before
we
reported
back
to
you
11
on
specific
numbers.
So
we'd
be
happy
to
do
that.

12
BOARD
MEMBER
HUGH
FRIEDMAN:
Thank
you.

13
CHAIRPERSON
LLOYD:
Ms.
D'Adamo
and
then
14
Supervisor
DeSaulnier.

15
BOARD
MEMBER
D'ADAMO:
I
know
we'll
be
talking
16
about
this
as
we
go
forward
today,
and
just
have
­­
I
17
would
like
to
follow
up
on
Professor
Friedman's
questions
18
regarding
BEVs.
I
for
one
am
not
ready
to
close
the
door
19
on
that
technology.
I
think
that
we've
­­

20
(
Applause.)

21
BOARD
MEMBER
D'ADAMO:
I
think
that
we've
come
a
22
long
way.
And
I
think
obviously
we've
got
a
lot
further
23
to
go.
But
I'm
real
nervous
about
abandoning
a
technology
24
that
has
continued
to
progress.
Maybe
I'd
feel
25
differently
if
it
just
stood
still
in
time.
But
every
PETERS
SHORTHAND
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362­
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179
1
hearing
that
I've
attended
since
being
involved
with
this
2
I
continue
to
see
improvements.
And
I
look
forward
to
­­

3
I
guess
there's
going
to
be
a
presentation
by
a
committee
4
that
did
some
work
on
batteries.
So
look
forward
to
5
hearing
about
that.

6
But
my
question
to
staff
and
of
any
witnesses
7
that
are
going
to
be
addressing
the
point
on
BEVs
is
this:

8
How
do
we
incentivize
a
BEV
component
enough
so
that
when
9
the
independent
review
board
or
­­
I
don't
recall
if
10
that's
the
name
or
not
­­
but
when
the
Board
or
the
11
committee
reviews
the
technology,
that
it
is
comparing
12
technology
of
fuel
cells
and
other
technologies
that
are
13
out
there
and
on
batteries,
that
it's
comparing
a
14
technology
that
is
not
frozen
in
time
as
of
this
date,
but
15
a
technology
that
is
really
given
the
chance
to
continue
16
to
progress,
whatever
that
progression
may
be,
that
we
17
somehow
incentivize
it
so
that
it
is
a
true
comparison?

18
And
I
guess
that's
like
looking
into
a
crystal
ball
to
try
19
and
figure
out
where
that
technology
would
be.
But
I
20
think
we
need
to
incentivize
it
enough,
what
that
ratio
21
is,
so
that
we
continue
to
see
progress.

22
I
see
here
on
slide
69
that
there's
a
suggestion
23
that
we
keep
a
minimum
number
of
fuel
cells.
I'd
just
24
like
to
throw
it
out
there,
can
we
do
the
same
for
BEVs,

25
so
that
it's
a
fair
comparison?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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180
1
(
Applause.)

2
EXECUTIVE
OFFICER
WITHERSPOON:
The
issue
of
3
keeping
a
minimum
requirement
for
BEVs,
you
have
that
on
4
your
base
regulation,
that
it
is
a
BEV
requirement
on
the
5
base.
If
you
have
a
minimum
requirement
in
the
6
alternative
compliance
path,
you've
turned
it
into
a
7
mandate
rather
than
an
option,
I
think.
And
you
have
to
8
ask
whether
that's
appropriate
for
an
auto
company
that
9
wishes
to
concentrate
on
fuel
cells
alone,
whether
they
10
should
be
obligated
to
have
both
BEVs
and
fuel
cells
11
rather
than
the
choice
to
do
a
mixture
if
that
works
with
12
their
own
compliance
plan.

13
BOARD
MEMBER
D'ADAMO:
I
don't
want
to
intrude
14
upon
the
efforts
by
many.
And
I
know
the
Chairman
really
15
deserves
to
be
complimented
for
his
push
on
fuel
cells.

16
But
if
there
would
be
a
requirement
for
a
minimum
17
number
­­
I'm
not
even
saying
a
50/
50
split
­­
but
just
a
18
minimum
level
to
keep
BEVs
in
the
mix.
Unless
that
19
incentive
on
the
ratio
can
be
enough
that
we
can
trust
20
that
we
are
going
to
continue
to
see
progress
on
BEVs.

21
EXECUTIVE
OFFICER
WITHERSPOON:
It
is
staff's
22
intent
to
have
the
ratio
be
favorable
to
BEVs
and
have
the
23
costs
work
out
such
that
it's
slightly
cheaper
to
go
the
24
BEV
route,
and
hope
that
that's
incentive
enough
that
25
someone
might
choose
it.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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181
1
BOARD
MEMBER
D'ADAMO:
Okay.
And
then
just
one
2
other
question
­­
clarification.
What
happens
to
the
3
electric
vehicles
that
were
placed
into
lease
and
now
at
4
this
time
or
at
some
point
in
the
future
the
lease
has
run
5
out?
Is
there
anything
that
we
can
do
to
incentivize
the
6
reissuance
of
those
vehicles,
either
by
future
leases
or,

7
better
yet,
somehow
incentivize
that
they
be
sold
or
they
8
be
placed
in
long­
term
leases
in
California?

9
(
Applause.)

10
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Under
the
11
2001
regulation
and
continued
on
in
our
staff
proposal
12
vehicles
that
are
placed
on
the
road
and
have
been
there
13
for
three
years
earn
additional
credit
if
they're
kept
on
14
the
road
in
year
four,
year
five,
year
six.
So
there's
15
already
a
mechanism
there
to
encourage
those
vehicles
to
16
be
kept
on
the
road.
That
is
available
for
vehicles
17
placed
through
2005.
So
there's
already
something
there
18
that
provides
that
credit.
The
credit
that
they
earn
is
19
one­
tenth
per
year
of
what
it
would
earn
new.
So
if
the
20
vehicle's
kept
on
the
road
for
three
more
years,
it
would
21
earn
three­
tenths
­­
it
would
be
worth
three­
tenths
of
a
22
new
vehicle.

23
BOARD
MEMBER
D'ADAMO:
Then
I
guess
my
question
24
would
be,
should
we
explore
extending
that
out
further?

25
Would
there
be
any
value?
Or
are
those
­­
extending
it
PETERS
SHORTHAND
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362­
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1
out
to
2005,
is
that
going
to
be
enough
encouragement
to
2
keep
those
vehicles
on
the
road
in
California?

3
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Well,
the
­­

4
BOARD
MEMBER
D'ADAMO:
Worried
about
a
car
crush
5
program.

6
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Let
me
7
clarify
how
we're
doing
­­
if
the
vehicle
is
originally
8
placed
prior
to
'
05,
that
vehicle
can
earn
credit
however
9
long.
If
it's
kept
on
the
road
for
20
years,
it
would
10
earn
credit
for
all
20
of
those
years.
So
once
the
11
vehicle
­­
if
the
vehicle
is
placed,
it
can
continue
to
12
earn
that
credit.
What
we
cut
off
is
we're
saying
if
the
13
vehicle
was
placed
in
2006,
it's
not
eligible
to
earn
that
14
extra
credit
in
the
fourth
year
of
its
useful
life.
And
15
reason
we
did
that
­­
actually
in
2001
we
didn't
have
this
16
cutoff.
The
reason
we
did
it
is
when
we
looked
at
what
it
17
means
to
keep
track
of
this
and,
you
know,
how
many
18
vehicles
are
still
on
the
road
and
how
do
you
know,
et
19
cetera,
it
looked
like
it
was
an
administrative
headache;

20
and
so
once
­­
it
seemed
like
it
made
sense
to
do
that
in
21
these
initial
years,
but
at
some
future
date
that
it
would
22
no
longer
be
necessary.
So
that's
what
drove
us
to
cut
it
23
off
in
2005.

24
CHAIRPERSON
LLOYD:
Can
I
just
add
to
that,

25
Chuck?
Since
we
don't
have
a
2001
regulation
that
we
can
PETERS
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1
enforce,
I
would
like
to
follow
up
on
DeDe's
point
a
2
little
bit
more
specifically;
and,
that
is,
is
there
any
3
way
in
which
we
can
compel
those
vehicles
to
be
continued
4
in
operation
without
crushing
them?
I
mean
maybe
we
5
can't.

6
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Is
that
a
7
question
for
our
attorneys?

8
You
know,
programmatically,
you
could
structure
9
very
generous
incentives
that
would
certainly
make
it
10
worth
their
while
to
keep
them
on
the
road.
Rather
than
11
one­
tenth
per
year
­­

12
CHAIRPERSON
LLOYD:
So
maybe
the
question
is,

13
rather
than
trying
to
get
you
to
answer
it,
for
the
OEM's.

14
When
then
OEM's
come
up,
what
incentive
would
be
necessary
15
for
them
to
keep
them
on
the
road?
And
I'm
giving
fair
16
warning
to
maybe
Dave
and
others
back
there
to
be
able
to
17
address
that
question.
Because,
again,
I
realize
that
we
18
really
should
be
asking
them.

19
Supervisor
DeSaulnier.

20
BOARD
MEMBER
DeSAULNIER:
Just
briefly,
Mr.

21
Chairman.
I
realize
we
have
a
lot
of
public
speakers.

22
But
I
have
one
question
and
then
a
comment
in
relation
to
23
Hugh's
questions.

24
As
someone
who
likes
to
worship
to
graven
images,

25
could
you
respond
to
Mr.
Freeman's
comment
about
why
are
PETERS
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1
16
credits
for
a
hydrogen
internal
combustion
engine
2
appropriate
versus
40
for
a
fuel
cell?
Where
did
we
come
3
up
with
those
numbers?

4
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
The
logic
5
that
we
followed
really
started
in,
let's
say,
2012,

6
saying
that
any
of
those
non­
ZEVs
should
not
be
worth
more
7
than
a
ZEV.
So
we
kind
of
started
by
saying
here's
what
a
8
ZEV
is
worth
in
2012,
and
then
these
other
alternatives
9
need
to
be
beneath
that.
And
then
we
tried
to
come
up
10
with
some
sort
of
ratio
amongst
the
different
options.

11
Hybrid
ICE
versus
a
regular
hybrid
versus
a
grid
connect.

12
What
sort
of
ratios
seemed
to
make
sense
given
their
13
relative
state
of
development
and
the
cost
that
seemed
to
14
be
involved.

15
And
then
we
went
backwards
from
there
saying
16
well,
earlier
in
time
it's
going
to
be
harder
to
do
those
17
sorts
of
things,
so
the
number
needed
to
be
inflated.
As
18
far
as
how
we
ended
up
at
exactly
16
again
versus
14
or
19
18,
I
don't
think
there's
any
powerful
math
involved
20
there.
It
seemed
like
that
a
large
incentive
was
needed.

21
And
in
the
context
of
everything
else
that's
happening
­­

22
if
you
recall
the
graph
that
had
one
group
way
up
high
and
23
then
the
other
things
way
down
low,
there's
a
very
24
significant
incentive
provided
in
those
early
years.
And
25
that's
what
we
were
­­
we
were
trying
to
make
sure
that
PETERS
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1
the
margin
between
the
two
was
very
large.
And
so
just
2
looking
at
the
numbers,
that
seemed
to
be
a
reasonable
3
level.

4
BOARD
MEMBER
DeSAULNIER:
Well,
we'll
have
this
5
discussion
later.
I'm
a
little
concerned
about
the
ratio
6
because
of
the
infrastructure
question
and
trying
to
get
7
hydrogen
moving
along
and
not
waiting
for
what
may
or
may
8
not
be
a
graven
image
in
regards
to
the
development
of
9
fuel
cells.

10
And
regards,
Hugh,
to
your
question.
The
smart
11
mobility
project
came
out
­­
and
I'll
do
this
in
a
cliff
12
notes
version
because
we've
had
multiple
dozen
meeting
on
13
this.
But
it
came
out
of
the
ZEV
hearing
in
2001
where
14
Allen
gave
me
some
instruction
to
go
spend
some
time.
And
15
it
resulted
in
an
indoor
agency
agreement
between
us,
the
16
Energy
Commission,
and
CalTrans.
And
it's
resulted
in
a
17
partnership
between
those
three
agencies
plus
the
four
UC
18
transportation
schools.

19
And
the
interesting
thing
about
what
you
brought
20
up
­­
would
be
interesting
in
terms
of
the
commentary
from
21
the
different
car
operators
is
in
the
staff
report
we
talk
22
about
the
reluctance
of
the
auto
manufacturers
being
23
interested
in
credits
for
infrastructure,
yet
we
have
GM
24
interested
in
this
particular.
And
in
conversation
with
25
air
products,
for
instance,
and
projects
they've
had
in
PETERS
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CORPORATION
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1
Las
Vegas
and
Chicago
where
they've
done
big
demonstration
2
projects
that
allow
for
the
kind
of
multiple
uses
that
Ms.

3
Witherspoon
was
talking
about.
Those
are
the
things,
at
4
least
for
me,
that
we
have
an
interest
in
pursuing.

5
And
there's
something
­­
ZEV
Net
is
interesting.

6
If
any
of
you've
seen
the
New
York
Times
magazine
the
last
7
month,
the
last
­­
two
weeks
ago
Toyota
had
a
wonderful
8
two­
page
­­
which
we
all
should
get
copies
of,
by
the
9
way
­­
advertisement
extolling
the
virtues
of
their
10
involvement
in
ZEV
Net.
And
it
was
a
series
of
pictures
11
from
overhead
with
a
Prius
hybrid
parked,
a
RAV4
parked
­­

12
an
EV
RAV4,
and
then
an
ECOM.
And
I
can't
tell
whether
13
the
ECOM's
coming
into
the
parking
space
or
leaving.
We
14
want
it
to
be
coming
in
rather
than
leaving,
but
there's
15
some
question
there.
But
it's
a
great
commercial
talking
16
about
these
kind
of
demonstration
projects,
with
a
17
potential
for
using
these
sort
of
multimedia
approaches.

18
So
I
just
wanted
to
bring
that
up.

19
Thank
you,
Mr.
Chairman.

20
CHAIRPERSON
LLOYD:
Mr.
Calhoun.

21
BOARD
MEMBER
CALHOUN:
Yes,
two
questions.
One
22
goes
back
to
Professor
Friedman's
statement
earlier
when
23
he
asked
the
staff
about
taking
a
look
at
stationary
fuel
24
cells.
And
I
believe,
Catherine,
you
said
we
could
come
25
back
some
time
with
the
report
on
that.

PETERS
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1
And
how
soon
would
you
expect
to
do
that?

2
EXECUTIVE
OFFICER
WITHERSPOON:
In
three
months.

3
BOARD
MEMBER
CALHOUN:
Three
months.
Okay.

4
Then
my
next
question
pertains
to
batteries.
I
5
met
with
one
of
the
local
representatives,
and
he
informed
6
me
that
we
had
not
gotten
all
of
the
facts
on
the
status
7
of
battery
technology.
And
I
notice
that
we
do
have
a
8
recent
report
by
EPRI.
And
if
battery
technology
is
9
worthwhile,
then
obviously
no
one
would
want
to
see
it
go
10
away.
But
I
think
the
option
of
choosing
batteries
or
11
fuel
cells
to
meet
some
of
our
regulatory
requirements
12
ought
to
be
left
up
to
the
manufacturer
as
opposed
to
us
13
dictating
to
him
what
he
has
to
use.

14
EXECUTIVE
OFFICER
WITHERSPOON:
With
respect
to
15
the
battery
report,
you
will
be
hearing
testimony
on
the
16
results,
both
from
our
own
contractor,
Menahem
Anderman,

17
and
from
EPRI,
which
is
here
to
testify.
And
we've
18
grouped
them
with
other
witnesses
who
will
speak
to
those
19
technologies
specifically.
And
that's
early
on
the
20
witness
list.

21
And
I
guess
we
agree
with
you
on
the
optional
22
versus
mandate
approach
on
combining
BEVs
and
fuel
cells.

23
BOARD
MEMBER
HUGH
FRIEDMAN:
Just
quickly
one
24
more
question.

25
I
just
sort
of
intuitively
thought
in
my
own
PETERS
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362­
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188
1
thinking
that
the
plug­
in
electric
hybrid
that
you
could
2
just
plug
into
your
garage
outlet
made
a
lot
of
sense.
I
3
get
the
impression
that
the
auto
manufacturers
are
not
4
terribly
interested
in
that
for
various
reasons.

5
And
I'm
wondering
how
you
arrived
­­
what
the
6
rationale
is
for
the
credit
system
that
you're
proposing
7
for
the
plug­
in
HEVs.
It's
on
slide
40.
I
just
wanted
to
8
know
how
you
arrived
at
that.

9
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Similar
to
10
the
answer
on
the
previous
question.

11
BOARD
MEMBER
HUGH
FRIEDMAN:
Apparently
it's
not
12
enough.

13
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Well,
you
14
gave
us
direction
in
2001.
There
was
a
question,
should
15
they
be
counted
in
the
gold
category
or
not?
And
the
16
direction
from
the
Board
was,
no,
they
should
not
be
17
involved,
but
they
should
receive
a
very
health
incentive
18
in
that
silver
category.
We
did
that
­­

19
BOARD
MEMBER
HUGH
FRIEDMAN:
So
this
is
a
20
carry­
over?

21
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Well,
we
did
22
that
in
2001.
And
we've
even
increased
it
further
this
23
time
around,
trying
to
make
it
attractive
to
the
24
manufacturers
vis­
a­
vis
their
other
options.
And
when
25
we
­­
you
know,
when
you
look
at
the
cost
side
of
it,
it
PETERS
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1
looks
like
it
could
be
attractive
vis­
a­
vis
the
other
2
options
given
the
credits
that
are
provided.
Now,
is
that
3
enough
to
make
someone
want
to
go
down
that
road,
again
4
maybe
that's
a
question
for
the
automakers.

5
BOARD
MEMBER
HUGH
FRIEDMAN:
Okay.
I
just
6
wondered
what
the
thinking
was.

7
Thank
you.

8
CHAIRPERSON
LLOYD:
Dr.
Burke,
Mr.
McKinnon.

9
BOARD
MEMBER
BURKE:
Two
quick
questions.
One
10
is,
for
those
of
us
who
are
facing
constituency
on
the
11
ground,
how
do
we
explain
giving
credit
for
a
vehicle
12
delivered
in
New
York
for
credit
in
California?

13
(
Applause.)

14
BOARD
MEMBER
BURKE:
And
I
appreciate
the
15
support.
But,
you
know,
I
don't
think
we
need
to
­­
we
16
all
know
where
we're
going
here.
So
thanks,
but
no
thanks
17
on
the
applause.

18
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
The
19
issue
­­
to
frame
the
issue,
the
law
­­
the
federal
law
20
works
such
that
other
states
can
adopt
California's
21
programs.
And
they
do
­­

22
BOARD
MEMBER
BURKE:
We
all
understand
that.

23
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
It's
24
got
to
be
Identical.

25
BOARD
MEMBER
BURKE:
We're
talking
to
someone
in
PETERS
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1
East
Los
Angeles
about
delivering
a
car
in
New
York
and
2
giving
him
credit
in
California.
They
don't
want
to
hear
3
from
federal
law.
How
do
I
explain
it
to
them?

4
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
The
5
programs
have
to
be
identical
in
the
two
states.
That
has
6
to
be
known
before
I
can
answer
the
question.

7
BOARD
MEMBER
BURKE:
Has
any
of
the
other
states
8
given
credit
for
any
vehicles
delivered
in
California?

9
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Under
10
this
provision,
that
would
happen
also.

11
BOARD
MEMBER
BURKE:
Have
they
done
it
already?

12
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Under
13
this
proposal?
Not
under
this
­­
not
yet,
no,
they
have
14
not,
because
it
doesn't
work
that
way.

15
BOARD
MEMBER
BURKE:
Yeah,
I
understand
that.

16
Second
question
is:
We
took
a
couple
months
to
17
work
this
out,
and
I
know
it
has
been
extremely
difficult.

18
But
of
the
five
hours
of
testimony
which
we're
about
to
be
19
blessed
with
­­

20
(
Laughter.)

21
BOARD
MEMBER
BURKE:
­­
we
have
four
people
out
22
of
78
who
are
supporting
this
proposal.
We
have
22
people
23
or
organizations,
including
the
car
manufacturers,
who
are
24
neutral
on
this
proposal.
We
have
52
people
testifying
25
who
are
against
it.

PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
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1
How
did
we
end
up
with
this?

2
EXECUTIVE
OFFICER
WITHERSPOON:
I
think
you'll
3
find
when
we
get
through
the
witness
list
that
a
majority
4
of
the
opponents
to
the
staff
proposal
are
the
early
5
adopters
of
battery
electric
technology
and
are
deeply
6
disappointed
that
it
has
not
come
to
fruition
as
quickly
7
as
we
are
ourselves
had
hoped
it
would.

8
And
so
we
don't
have
fuel
cell
advocates
in
the
9
room
in
as
large
of
numbers
as
we
have
battery
electric
10
advocates.
And
that's
probably
what
explains
the
11
percentage
you
just
described.

12
BOARD
MEMBER
BURKE:
You
know,
I'm
willing
to
13
take
that.
I
don't
want
to
belabor
this
point.
But
if
14
there's
only
four
people
out
of
almost
100,
you
know,
the
15
fuel
cell
people
are
­­
you
know,
I
would
think
they
would
16
be
here.
You
know,
it
should
give
the
Board
some
concern.

17
CHAIRPERSON
LLOYD:
Yeah,
I
don't
think
­­
I
18
think
it's
more
constructive
at
this
time
to
hear
what
the
19
people
say
on
that.
I
think
that's
an
interesting
20
observation.
We'll
here
the
comments.
It's
not
21
surprising
to
me
with
something
as
complex
as
this,
when
22
you're
only
given
a
limited
number
of
choices,
you've
got
23
to
check
one
box
or
another.
But
I
think
the
Board
­­

24
we'll
understand
which
parts
they
agree
with,
which
parts
25
they
don't,
et
cetera.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
Mr.
McKinnon.

2
BOARD
MEMBER
McKINNON:
I
have
a
short
question
3
and
then
a
comment.
And
the
short
question
goes
back
to
4
the
question
DeDe
asked
a
few
minutes
ago
about
giving
5
credits
for
keeping
existing
BEV
vehicles
in
the
state,

6
hopefully
long
­­
you
know,
fairly
lengthy
leases
or
7
allowing
­­
setting
up
a
situation
where
people
can
8
purchase
the
vehicles.

9
And
sort
of
my
understanding
of
the
dynamic
of
10
that
problem
is
that
those
cars
get
cleaned
up
and
taken
11
to
another
state
and
given
credit
in
another
state.

12
Is
that
a
fair
analysis
of
why
what
we
have
in
13
terms
of
credits
doesn't
work?

14
EXECUTIVE
OFFICER
WITHERSPOON:
That's
part
of
15
the
answer
why
it
doesn't
work.
The
other
part
of
the
16
answer
is
that
some
manufacturers
are
taking
the
cars
back
17
and
not
releasing
them
at
all,
not
reconditioning,
not
18
putting
new
batteries
in,
and
want
to
be
out
of
the
BEV
19
business.

20
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
Just
one
21
clarification.
If
a
car
is
placed
new
in
California
and
22
then
cleaned
up
and
moved
to
another
state,
it
would
not
23
receive
the
full
new
vehicle
credit
in
that
other
state.

24
BOARD
MEMBER
McKINNON:
Okay.
Well,
that
is
my
25
question.
And
what
kind
of
credit
does
it
get
in
another
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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193
1
state?

2
VEHICLE
PROGRAM
SPECIALIST
SHULOCK:
It
would
be
3
similar
to
what's
happening
here.
In
year
four
one­
tenth
4
of
the
credit
it
would
earn
as
a
new
vehicle.

5
Now,
there
could
be
­­
if
they
put
in
a
new
6
battery
pack
or
­­
you
know,
it
depends
on
what
you
mean
7
by
clean
up.
If
it's
rebuilt
in
some
fashion,
there
may
8
be
other
issues
involved.
But
if
the
vehicle
is
just
9
removed
from
California
and
then
put
in
another
state,
it
10
is
not
treated
as
a
new
vehicle.

11
BOARD
MEMBER
McKINNON:
Okay.
But
it
can
be
12
treated
as
a
new
vehicle
if
a
new
battery's
put
in
and
13
it's
upgraded
and
­­
okay.
That
answers
my
question.

14
Here's
my
comment.
And
the
comment
is,
being
15
fair
­­
I
want
to
be
fair
to
all
parties
involved,
staff,

16
the
automakers,
the
engineers,
the
people
that
bought
the
17
cars
­­
everybody,
we
have
come
a
long,
long
way.
A
lot
18
happened
over
this
last
decade
or
so.
And
I
think
19
everybody
involved
can
be
proud
of
that.

20
With
that
said,
I
am
very,
very
interested
in
the
21
numbers,
in
the
end­
game
here.
The
idea
of
it's
so
22
flexible
that
we
don't
have
numbers
in
the
out­
years
is
23
just
really
unappealing
to
me.
I
think
we're
setting
up
a
24
dynamic
that
is
far
worse
than
the
one
we
have
now
where
25
we
have
a
challenge
every
couple
of
years
and
we
have
to
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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194
1
have
hearings.
Then
we're
going
to
have
hearings
to
be
2
able
to
up
the
numbers.
It
will
be
portrayed
as
unfair
to
3
the
automakers
not
getting
a
timeline
that
tells
them
4
what's
expected.
It
will
cause
more
delays.
And
I
5
really,
really
have
a
problem
with
no
numbers
in
the
6
out­
years.
I
think
we're
asking
for
worse
than
sort
of
7
the
trouble
we've
had
along
the
way
here.

8
And
worse
is
not
placing
blame
on
anybody.

9
Technology
changed.
Nobody
thought
about
hybrids
back
in
10
1990.
You
know,
in
listening
to
Dr.
Freeman
­­
I
was
11
around
in
1990.
I
was
around
watching
CalStart
be
formed,

12
and
followed
this
very,
very
closely
in
1990.

13
And
so
while
I'm
proud
of
the
accomplishment,
I
14
too
worry
that
we're
giving
up
BEV
too
early.
And
I
guess
15
my
only
sort
of
difference
is
that
I
don't
have
a
problem
16
leaving
the
mix
between
BEVs
and
fuel
cells
on
the
17
alternative
path
to
a
mix
that's
determined
by
the
18
manufacturers,
so
long
as
we
do
a
credit
scheme
that
is
a
19
fair
credit
scheme.

20
And
so
with
that,
what
I'm
really
saying
­­
and
I
21
said
it
to
the
auto
manufacturers
last
week
­­
what
I
want
22
to
hear
about
is
numbers.
Because
if
anybody
thinks
I'm
23
going
to
vote
for
it
without
numbers,
I'm
not
voting
for
24
this
without
numbers.
As
far
as
I'm
concerned,
we
need
to
25
have
solid
numbers
at
the
end
of
these
hearings
that
we're
PETERS
SHORTHAND
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1
voting
on.
And
maybe
there's
some
amendment
in
the
45­
day
2
period.
But
to
walk
away
from
here
without
some
3
expectations
for
everybody
involved,
the
little
folks
that
4
produce
parts
to
the
cars,
the
people
that
are
developing
5
technology,
it
is
just
plain
unfair
and
unmanageable
to
6
come
out
without
having
some
numbers
that
set
a
course
of
7
where
we're
going.

8
CHAIRPERSON
LLOYD:
Yeah,
I
don't
think
you're
9
alone
in
that,
Mr.
McKinnon.
I
think
you'll
find
all
your
10
colleagues
feel
the
same
way.

11
Seeing
no
other
questions,
we'll
continue
with
12
Dr.
Anderman,
wherever
he
is.
Oh,
there
he
is,
back
13
there.

14
Dr.
Anderman,
Dr.
Frank,
Louis
Browning.

15
I
understand
Dr.
Anderman
has
got
a
PowerPoint
16
presentation.

17
Do
you
have
any
approximate
timeframe?

18
DR.
ANDERMAN:
Fifteen
minutes,
I
was
told.

19
CHAIRPERSON
LLOYD:
Well,
I'm
not
going
to
20
disagree
with
staff
if
they
told
you
15
minutes.

21
(
Thereupon
an
overhead
presentation
was
22
Presented
as
follows.)

23
DR.
ANDERMAN:
Good
Afternoon.

24
I
was
asked
by
­­
I
am
a
member
of
the
­­

25
BOARD
MEMBER
HUGH
FRIEDMAN:
Pull
it
closer.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
196
1
DR.
ANDERMAN:
I
was
a
member
of
the
BTAP
2000
2
panel.
And
I
was
asked
in
the
beginning
of
the
year
to
3
provide
a
very
brief
review
of
the
progress
in
EV
battery
4
technology
since
June
2000
publication
of
that
panel.

5
It's
a
report
of
that
panel.

6
The
views
here
are
my
own.
Even
though
it's
a
7
follow­
up
work,
it's
a
work
I've
done
on
my
own
and
it
8
does
not
represent
a
follow­
up
of
the
whole
group.

9
­­
o0o­­

10
CHAIRPERSON
LLOYD:
Done
on
your
own,
but
11
supported
by
ARB?

12
DR.
ANDERMAN:
Supported
by
ARB,
yes,
for
sure.

13
Contracted
and
supported
by
ARB.

14
Thank
you.

15
Source
of
information.
The
main
source
of
16
information
is
a
study
I've
done
between
April
2001
and
17
really
April
2002,
and
then
follow­
up
meetings
during
2002
18
and
early
this
year.
But
the
status
of
the
advanced
19
vehicle
and
the
parcels
that
are
going
to
power
those
20
advanced
vehicle,
an
advanced
vehicle
being
a
mostly
21
hybrid
and
much
lower
to
a
smaller
degree
as
far
as
the
22
study,
a
battery
EV
and
fuel
cell
EV.

23
That
study
was
a
multi­
plan
study
with,
by
now
60
24
subscribers.
But
more
importantly
I
interviewed
30
25
companies
in
50
some
visits
around
the
world.
And
when
I
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
197
1
say
interview,
it's
anywhere
from
a
two
hour
meeting
to
a
2
full
day
plus
dinner
meeting,
reviewing
where
they
are
as
3
far
as
batter
technology
and
advanced
vehicles.

4
Of
course
it's
full
participation
in
conference
5
with
the
active
industry
an
have
conference
myself
about
6
the
subject.
And
the
work
this
year
was
really
limited
to
7
a
couple
of
weeks
of
­­
the
type
sent
to
the
major
battery
8
development,
battery
development
for
EVs
and
got
answers
9
from
six
of
those
major
developers.

10
­­
o0o­­

11
DR.
ANDERMAN:
The
highlight
of
the
finding.

12
One,
direct
effort
to
develop
EV
batteries
have
13
generally
declined
over
the
last
three
years.

14
Two,
battery
development
for
hydro
electric
15
vehicle
application
continues
to
gain
momentum.

16
Three,
steady
and
predictable
progress,
but
no
17
breakthrough
in
battery
technology.

18
And
four,
and
probably
very
important
for
this
19
hearing,
improvement
made
through
the
hydro
electric
20
vehicle
battery
effort
will
have
a
significant
positive
21
effect
on
the
cost
to
implement
of
electric
vehicle
22
batteries.

23
­­
o0o­­

24
DR.
ANDERMAN:
Add
I
will
go
and
look
at
the
two
25
main
conclusions
of
the
BTAP
June
2000
report,
and
give
PETERS
SHORTHAND
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(
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198
1
you
a
comment
about
where
we
are
today
around
two
and
a
2
half
or
three
years
later.

3
The
first
conclusion
was
That
Nickel
Metal
4
Hydride
batteries
show
good
characteristics
and
5
reliability
in
EV
application
with
a
life
expectancy
6
exceeding
six
years.

7
The
second
one
the,
specific
energy
approaching
8
70
watt
hours
per
kilogram.
That
translated
to
real
life
9
branch
of
practical
midsize
car,
like
the
RAV4
or
EV
Plus
10
of
70
to
100
miles.

11
Price
for
a
typical
30
kilowatt­
hour
pack
was
12
projected
at
the
time
to
drop
to
about
$
15,000
per
pack.

13
That's
a
production
of
volume
of
7,000
per
year.
From
14
that
number
to
as
low
as
potential
$
9,000
at
volumes
of
15
hundred
of
thousands
per
year.
And
the
third
number
16
should
not
be
there.

17
­­
o0o­­

18
DR.
ANDERMAN:
Comments
where
we
are
today,
2003.

19
Nickel
metal
hydride
batteries
continue
to
show
good
20
performance
and
good
life.
Improvement
in
specific
energy
21
are
only
incremental
in
the
few
percent
­­
probably
below
22
10
percent,
which
means
no
significant
change
in
range
23
capability.

24
While
life
may
be
longer
than
six
years
there
is
25
still
no
data
to
support
a
battery
life
that
will
last
for
PETERS
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1
the
life
of
the
car,
which
mean
10
or
15
years.
Though
2
there
is
hope.

3
For
low
pricing
and
was
the
pricing
that
was
4
suggested
in
the
BTAP
report,
one
of
both
of
those
two
5
very
significant
events
have
to
happen.
One
is
6
significant
reduction
in
the
price
of
nickel
metal,
which
7
is
a
key
raw
material
into
several
of
the
material
that
is
8
going
into
nickel
metal
hydride
battery.
However,
that
9
price
is
independent
of
the
market,
so
we
cannot
predict
10
it
or
focus
based
on
changes
there.
The
price
today
is
11
relatively
low
in
comparison
to
the
last
10
or
15
years.

12
And
the
second
one
is
relocation
of
production
to
13
China
or
equivalent
low­
cost
labor
area
that
may
change
14
some
of
the
rules
of
the
economic.
And
still
probably
15
have
limitation
because
in
our
BTAP
estimate
we
assume
16
material
cost
responsible
for
70
percent
of
product
cost.

17
And
so
it
material
cost
don't
change,
you
have
relatively
18
limited
amount
of
additional
reduction
possible
by
19
reducing
labor
and
overhead.

20
­­
o0o­­

21
DR.
ANDERMAN:
Conclusion
2
of
the
BTAP
report:

22
Current
lithium
ion
electric
vehicle
battery
do
not
have
23
adequate
durability.
Safety
under
severe
abuse
is
not
yet
24
fully
proven.
Early
cost
of
this
battery
is
expected
to
25
be
considerably
higher
than
that
of
nickel
metal
hydride
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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200
1
EV
battery.
And
Even
in
true
mass
production
the
cost
of
2
lithium
ion
batteries
is
unlikely
to
drop
below
those
of
3
nickel
metal
hydride
without
major
advances
in
material
4
and
manufacturing
technology.

5
­­
o0o­­

6
DR.
ANDERMAN:
Where
we
are
today
2
1/
2
years
7
later:
Improvement
in
life
of
lithium
ion
are
occurring,

8
but
a
bit
too
early
to
quantify
if
we
want
to
project
8,

9
10,
or
12
years
life.
There
are
two
chemistry
involved
in
10
lithium
ion
battery
­­
two
common
chemistry:

11
One,
based
on
nickel
­­
lithium
nickel
cathode.

12
And
this
one
increase
your
potential
for
significant
13
improvement
of
life
over
what
we
have
seen
three
or
three
14
or
four
years
ago.
And
over
five
and
up
to
six,
eight,
or
15
possibly
ten
years
life
may
be
possible,
though
definitely
16
is
far
from
being
proven
today.

17
The
other
cathode
that's
been
used
by
many
of
the
18
manufacturers
is
based
on
manganese
chemistry.
And
this
19
one
still
suffer
from
short
life
at
moderately
elevated
20
temperature;
probably
less
than
five
years
still
today.

21
­­
o0o­­

22
DR.
ANDERMAN:
Abuse
tolerance
work
mostly
for
23
hybrid
electric
vehicle
implication
is
showing
steady
24
progress.
And
I
would
dare
to
say
that
we
are
fairly
25
comfortable
that
with
a
lithium
manganese
based
chemistry
PETERS
SHORTHAND
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1
the
safety
of
the
battery
will
be
manageable.
However,

2
unfortunately
this
is
the
same
cathode
where
we
did
not
3
get
the
life.
So
the
chemistry
is
not
helping
us
in
this
4
case.

5
For
the
nickel­
based
lithium
batteries,
there
is
6
no
satisfactory
safety
or
abuse
tolerance
data
as
of
yet.

7
And
there
is
a
lot
of
progress,
but
we
are
still
far
from
8
being
there,
with
being
able
to
manage
a
battery
under
9
abuse
conditions,
and
fires
is
a
main
concern.

10
Cost
is
dropping,
though
no
major
breakthrough
in
11
material
selection
or
processing.
In
other
words
are
we
12
are
seeing
fairly
rapid
reduction
in
cost
both
in
the
13
consumer
market
and
the
hybrid
electric
vehicle
market
for
14
the
batteries,
but
the
basic
material
that
have
been
used
15
five
years
ago
are
still
being
used
now
with
no
16
breakthrough,
which
mean
it's
unlikely
that
we
will
see
­­

17
with
existing
design
that
we
will
see
pricing
lower
than
18
nickel
metal
hydride.
Probably
relatively
similar.
But
19
lower
is
unlikely.

20
­­
o0o­­

21
DR.
ANDERMAN:
So
here
is
a
summary
of
the
key
22
characteristics
for
EV
battery.
And
I
only
include
here
23
three
chemistry.

24
The
lead
acid:
Was
limited
specific
energy.

25
Probably
two
to
five
year
life.
And
cost
today
in
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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202
1
$
4,000
to
$
6,000,
and
projected
to
be
closer
to
$
3,000
if
2
the
volume
goes
to
hundreds
of
thousands
per
year.

3
Nickel
metal
hydride:
Specific
energy
almost
4
double,
about
65
watt
hours
per
kilogram.
Operating
life
5
for
only
five
to
ten
years.
Cost
today,
$
15,000
to
6
$
25,000.
And
you're
shown
here
number
­­
it
is
actually
a
7
little
higher
than
what
we
saw
in
2001.
The
reason
is
8
that
there
hasn't
been
any
scale­
up
in
the
major
9
manufacturing
to
higher
volume.
And
basically
the
RAV4
10
battery
will
produce
on
the
same
line
it
produces
the
MOA
11
battery
of
'
98.
They
have
not
scaled
up
to
thousands
per
12
year.
This
line
can
make
maybe
1,000
per
year.
At
13
hundred
thousands
the
price
estimate
is
the
same
that
we
14
had
three
years
ago.
Safety
is
not
a
problem.
Technology
15
is
maturing.

16
For
lithium
ion
it
was
with
two
different
17
cathode:

18
With
manganese
about
90
watt­
hour
per
kilogram.

19
Two
to
five
years
life.
And
cost,
very
high
today,
but
20
could
go
down
to
about
the
same
range
as
nickel
metal
21
hydride.

22
With
the
nickel
chemistry
specific
energy's
23
higher,
130
watt­
hour
per
kilogram.
Operating
life,
I'm
24
saying
four
to
ten
years.
And
there
is
hope
that
ten
25
years
may
be
possible.
Much
higher
cost
today.
And
cost
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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362­
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203
1
in
the
future,
probably
slightly
higher
than
a
manganese
2
chemistry.
However,
safety
is
still
a
concern,
and
the
3
status
is
development.

4
­­
o0o­­

5
DR.
ANDERMAN:
I
would
like
to
move
now
and
talk
6
about
what
the
implication
of
the
battery
­­
of
the
hybrid
7
electric
battery
development
to
EV
batteries.
And
that's
8
an
area
that
we
just
touch
upon
in
the
report
in
2000.

9
And
we
basically
say
that
there
is
no
doubt
that
the
10
development
of
EV
battery
supported
the
development
of
AGV
11
battery.
And
we
expect
that
the
opposite
will
be
true
as
12
well.

13
­­
o0o­­

14
DR.
ANDERMAN:
And
I'm
basically
saying
that
it
15
is
clear
that
continued
research
and
development
work
on
16
hybrid
electric
vehicle
battery
by
auto
maker,
battery
17
producer,
material
developers,
and
research
organization
18
around
the
world,
along
with
the
increasing
hybrid
19
Electric
vehicle
filled
application
experience
will
20
improve
the
key
characteristics
of
this
battery,
which
in
21
turn
will
improve
the
future
viability
for
EV
application.

22
­­
o0o­­

23
DR.
ANDERMAN:
And
I
will
try
to
be
specific.

24
There
is
more
technical
detail
here
that
most
of
you
are
25
probably
interested
to
know.
But
I
will
just
give
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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204
1
highlight
to
you.
I'm
comparing
an
AGV
nickel
metal
2
hydride
battery
to
EV
nickel
metal
hydride
battery
as
far
3
as
key
development
area.

4
Start
is
material
cost
driver.
In
this
case
the
5
top
six
material
cost
driver
for
EV
battery
are
identical
6
and
of
the
same
order
as
the
top
six
material
cost
driver
7
for
hybrid
electric
vehicle
battery.
So
any
work
on
the
8
right
side
of
this
table
will
directly
benefit
the
left
9
side
of
this
table.

10
2)
Life
driver.
Nickel
metal
hydride
corrosion
11
being
the
main
fading
mechanism
for
both
EV
and
AGV
12
application.
Venting
of
hydrogen
being
the
second
fading
13
mechanism
for
both
EV
and
AGV
application.
Any
work
to
14
extend
the
life
of
hybrid
electric
vehicle
battery
would
15
directly
impact
the
life
of
EV
battery.

16
3)
Performance
driver.
Here
we
are
showing
17
improved
efficiency
is
important
for
both.
For
EV
battery
18
specific
energy
is
the
second
important.
For
AGV
battery,

19
low
temperature
power.

20
So
basically
out
of
ten
criteria,
the
areas
that
21
battery
developers
are
working
­­
battery
developer,

22
material
developer
are
working
on,
nine
of
the
ten
are
23
identical
for
EV
battery
an
AGV
battery.

24
­­
o0o­­

25
DR.
ANDERMAN:
Here
is
a
same
comparison
for
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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205
1
lithium
ion.
I
will
not
go
through
the
detail.
The
cell
2
design
are
basically
the
same,
except
of
course
for
high
3
power
we
are
using
much
thinner
electrodes.
The
same
4
chemistry's
involved.

5
Material
cost
driver,
basically
the
same,
maybe
6
slightly
different
order.
Life
driver,
similar,
maybe
7
different
order.
And,
again,
safety
being
a
significant
8
issue
for
both
EV
battery
and
AGV
battery.
And
the
amount
9
of
work
that
going
today
to
improve
the
safety
of
10
nickel­
based
lithium
ion
battery
for
hybrid
electric
11
vehicle
is
most
significant
at
any
work
I've
seen
in
12
battery
development
in
the
past.
And
I
have
several
13
client
working
on
different
aspect
of
improving
the
safety
14
of
this
chemistry.

15
­­
o0o­­

16
DR.
ANDERMAN:
I'd
last
like
to
point
here
that
17
there
are
several
approaches
to
vehicle
liberalization.

18
And
today
we
are
even
seeing
some
attempt
in
12
volt
that
19
will
be
very
low
power,
going
to
42
volt
with
different
20
design,
high
voltage
power
assist,
and
plug­
in
hybrid.

21
And
the
point
I
would
like
to
make
that
still
22
today
U.
S.
and
European
car
company
are
struggling
with
23
establishing
business
cases
for
all
or
any
of
the
above
24
hybrid
vehicles.

25
And
I
would
like
to
make
the
point
that
when
I
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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206
1
asked
developers,
car
­­
automakers,
what
are
the
main
2
challenges
for
hybrid
electric
vehicle,
regardless
any
of
3
those
six
or
seven
groups
that
I
put
there,
battery
life
4
and
battery
cost
always
come
at
the
top
­­
top
three
or
5
top
four.
System
cost
is
often
the
third
one.

6
So
this
is
not
an
easy
area.
And
even
a
$
500
or
7
a
$
1,000
battery,
if
it's
only
going
to
last
5
or
6
year
8
rather
than
10
or
15
years
is
a
significant
business
risk
9
for
the
auto
maker,
because
none
of
us
who
like
to
replace
10
a
$
600
component
that
may
cost
three
or
four
times
that
in
11
the
aftermarket
and
when
we
have
a
four
or
five
year
old
12
car.

13
­­
o0o­­

14
DR.
ANDERMAN:
Environmental
value
of
vehicle
15
retrofit,
and
that
follow
some
of
the
comments
were
made
16
by
Chuck
and
other
people
in
the
room
before
today,

17
including
Dr.
Lloyd
­­
electrical
power
and
drive
train,

18
electrical
assist
turbocharger
and
electrical
valve
19
actuation,
electrical
power
steering,
air
condition,
ABS,

20
four­
wheel
drive,
fans
and
pumps.
All
above
auxiliaries
21
contribute
to
reducing
emission.
And
the
mass
22
introduction
in
hybrid
electric
vehicle
will
increase
a
23
valuable
position
of
battery
or
fuel
cell
EV.

24
­­
o0o­­

25
DR.
ANDERMAN:
There
was
a
discussion
here
in
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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207
1
December
where
several
people
have
trivialized
the
fact
2
that
hybrid
electric
vehicles
are
here,
and
so
we
need
to
3
focus
on
full
electric
vehicle.
And
Of
course
we
need
to
4
focus
on
full
electric
vehicle
for
the
future.
But
I
made
5
the
point
that
hybrid
electric
vehicles
are
really
not
6
quite
here
as
far
as
the
U.
S.
and
European
market.

7
And
here
are
the
six
­­
seven
programs
that
were
8
active
program
in
January
2001.
Several
of
them
have
9
actually
been
announced
in
the
January
Los
Angeles
auto
10
show
as
a
way
that
automaker
and
Detroit
will
improve
the
11
fuel
efficiency
of
SUV.
We
have
here
Daimler­
Chrysler
12
from
Europe.
But
then
Daimler­
Chrysler
didn't
want
to
go
13
forward.
Volvo
­­
General
Motors
Silverado,
and
PSA,
that
14
was
a
leading
company
at
the
time.
January
2001
we
have
15
here
six
cars
that
were
supposed
to
be
on
the
market
by
16
the
end
of
this
year
basically.
And
here
we
are
where
we
17
were
18
months
or
2
years
later,
four
of
those
six
program
18
have
been
cancelled
by
auto
maker
because
they
could
not
19
provide
enough
business
case
to
go
to
production.

20
So
what's
Toyota
and
Honda
doing
has
not
been
21
totally
caught
up
in
the
eyes
of
the
auto
maker.
And
even
22
though
we
have
new
announcement
now
for
cars
for
2006
or
23
7,
those
are
still
­­
most
of
them
are
still
3,
4,
5
years
24
out.
And
based
on
history,
I
would
not
count
on
those
25
programs
to
go
into
volume
production.
And
incentive
of
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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208
1
any
kind
from
this
Board
could
help
make
that
happen.
And
2
I
believe
we
all
want
to
make
that
happen.

3
­­
o0o­­

4
DR.
ANDERMAN:
Just
to
summarize.
Those
are
the
5
companies
I
visited
over
the
last
two
years,
several
of
6
them
two,
three,
or
four
times,
particularly
the
car
7
company
and
the
major
battery
developer.

8
The
list
of
other
30
companies
are
all
involved
9
in
advanced
vehicle,
the
vehicles
themselves,
the
10
electrical
system,
or
the
power
source,
mainly
the
11
battery.

12
And
those
are
the
six
company
who
provides
13
specific
information
for
this
update.
I
think
the
14
majority
of
the
car
­­
of
the
MRA
cars
in
California
use
15
battery
made
by
one
of
those
companies.
And
they
16
represent
lead
acid,
nickel
metal
hybrid,
and
lithium
ion
17
EV
battery
producer.

18
Thank
you.

19
CHAIRPERSON
LLOYD:
Clarify
­­
I
wasn't
quite
20
sure
what
you
were
saying.
Did
you
say
that
no
incentive
21
from
this
Board
could
help
or
that
incentive
can
help?

22
DR.
ANDERMAN:
Incentive
will
help.
Whichever
23
way,
regulation,
incentive,
taxation.
That's
your
field,

24
not
mine.
But
this
is
right
on
the
edge
where
$
500,

25
$
1,000,
$
1500
for
making
business
case
for
some
of
those
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
209
1
vehicle.
And
this
is
a
case
where
government
­­
could
2
work
to
make
it
a
reality
and
have
California
lead
again
3
by
becoming
the
major
market
for
hybrid
electric
vehicles.

4
CHAIRPERSON
LLOYD:
So
credits
can
help,
you're
5
saying?

6
DR.
ANDERMAN:
Yes.

7
CHAIRPERSON
LLOYD:
The
other
one
you
make
the
­­

8
two
other
comments.
You
make
the
observation
on
the
9
implication
of
the
development
of
HEVs
for
EV
batteries
10
contrasting
the
2001
statement
with
the
2003.
And
the
way
11
you've
posed
the
conclusion
there,
you
know,
is
a
very
12
good
research
thing.
But
I'd
be
very
surprised
if
the
13
answer
to
that
wasn't
­­
it
has
to
be
yes.
If
it
14
doesn't
­­
in
other
words
the
way
you
phrase
it,
you
15
assume
that
continued
research
and
development
work
on
HEV
16
batteries
by
automakers,
battery
producers,
material
17
development,
research
organization
around
the
world,
along
18
with
the
increasing
HEV
application
experience
will
19
improve
the
key
characteristics
of
these
batteries,
which
20
in
turn
will
improve
their
future
viability
for
EV
21
applications.

22
Seems
to
me
that
that
­­
you
know,
I
can't
see
23
any
circumstance
it
would
not
help.

24
DR.
ANDERMAN:
It
definitely
will.
And
I
made
25
those
two
tables
to
show
you
how
close
development
work
is
PETERS
SHORTHAND
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362­
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210
1
relevant.
Even
though
the
optimization
of
the
battery
for
2
hybrid
has
to
do
with
power
and
for
electric
vehicle
with
3
range,
which
means
specific
energy,
the
actual
component
4
that
need
to
be
worked
on
and
are
being
worked
on,

5
including
material
cost,
life,
and
safety,
are
the
same.

6
And
it's
not
on
­­
of
course
it's
not
the
car
company.

7
It's
the
battery
developer.
And
even
more
important,
the
8
material
developer,
because
this
is
where
you
have
the
9
real
capital.
It's
a
major
chemical
company
and
material
10
company,
that
see
a
market,
that
are
willing
to
put
their
11
own
company
earn
the
money
to
advance
technology
because
12
they
see
competitive
market
that
they
can
in
the
future
13
participate
or
that
already
participate,
they
want
to
14
improve
their
position
and
make
money.
It
is
the
chemical
15
companies,
the
material
company,
of
course
the
battery
16
companies
as
well.

17
CHAIRPERSON
LLOYD:
And
your
slide
8
where
you
18
look
at
the
lifetime
­­
typical
lifetime
of
the
batteries.

19
What
I'd
like
to
relate
that
to
is
an
initial
staff
20
proposal
that
on
hybrid
electric
batteries
the
battery
21
also
have
I
think
a
15
year
warranty.

22
DR.
ANDERMAN:
Yes.

23
CHAIRPERSON
LLOYD:
We
have
now
reduced
that
I
24
think
to
10
years.

25
DR.
ANDERMAN:
Yes.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
211
1
CHAIRPERSON
LLOYD:
But
given
the
way
you
pose
2
that,
that's
also
a
significant
challenge
for
the
auto
3
companies.

4
DR.
ANDERMAN:
Yes,
I
believe
that
at
least
in
5
one
of
the
cases
the
refusal
of
the
battery
company
to
6
give
8
to
10
years
warranty
for
the
battery
was
a
7
significant
factor
in
canceling
one
of
the
programs
that
8
you
have
seen
out
there
on
the
slide
before.
The
battery
9
company
could
not
afford
to
take
the
risk
and
give
an
8
or
10
10
year
warranty.
The
car
company
did
not
feel
that
they
11
can
fill
the
vehicle
with
a
$
2,000
battery
with
the
risk
12
of
having
to
replace
that
7
or
8
years
later.
When
they
13
use
a
multiplication
factor
for
an
aftermarket
part
is
3
14
to
1,
which
mean
if
they
pay
$
2,000,
they
assume
the
15
customer
will
have
to
pay
6.
And
so
this
is
a
very
16
significant
business
risk
for
the
car
company.
And
the
17
battery
company
cannot
afford
to
and
they're
refusing
to
18
put
to
show
them
and
put
a
fuel
into
a
product
that
19
they've
only
been
under
development
for
three
or
four
and
20
five
years.

21
And
to
give
a
full
warranty
on
something
like
22
this,
they
will
have
to
assume
that
99
percent
of
the
23
product
will
meet
that
warranty.
And
there
is
no
data
24
whatsoever
to
suggest
that
today.
There
is
progress,
and
25
we
hope
that
we
can
get
to
10
years.
But
it's
­­
we're
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
very
far
from
it,
from
proving
that
at
least
today.

2
CHAIRPERSON
LLOYD:
Thank
you.

3
Questions
from
my
colleagues?

4
Thank
you
very
much
indeed.
Thank
you.

5
And
I
appreciate
the
way
you
presented
your
6
conclusions
compared
to
2001.
It
was
very
helpful.

7
Now
we
have
Councilman
Henry
Perea,
City
of
8
Fresno.

9
COUNCILMAN
PEREA:
Hi.
Good
­­
is
it
still
10
morning,
or
what
time
do
we
have
here?

11
CHAIRPERSON
LLOYD:
It's
morning
for
us.

12
COUNCILMAN
PEREA:
Good
morning,
Mr.
Chairman,

13
members
of
the
Board.
My
name
is
Henry
T.
Perea,
and
I'm
14
a
city
councilman
from
the
City
of
Fresno.

15
I
stand
before
you
today
on
behalf
of
the
sixth
16
largest
city
in
the
State
of
California,
with
a
population
17
of
half
a
million
people,
in
urging
you
to
oppose
any
18
changes
or
modifications
in
the
ZEV
program
that
would
19
weaken
the
program.
And
I'm
not
here
alone.
Our
city
20
council
passed
a
resolution
two
weeks
ago
urging
your
21
opposition
to
this.
I
have
given
that
to
you.
I
did
FAX
22
it
to
you
yesterday,
as
well
as
had
copies
made
for
you
23
today.

24
For
the
Central
Valley
we
see
this
issue
as
a
25
very
important
issue,
and
that's
why
the
Central
Valley
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
sent
me
here
today.
We
see
this
issue
in
several
2
different
ways.

3
First
and
foremost
is
air
quality.
It's
no
4
secret
in
this
nation
and
I'm
sure
in
this
room
that
the
5
Central
Valley
is
fast
becoming
on
its
way
to
one
of
the
6
worst
air
basins
in
the
nation.
Our
air
board
­­
our
7
local
air
board
is
currently
looking
at
changing
our
8
designation
to
becoming
the
worst
air
in
the
nation.
Of
9
course
the
only
other
city
that
has
this
dubious
honor
is
10
the
City
of
Los
Angeles.
So
from
our
perspective,
passing
11
any
changes
that
would
weaken
a
program
that
has
been
so
12
beneficial
and
it
has
the
potential
of
becoming
so
much
13
more
beneficial
is
ludicrous.
We
can't
­­
we
as
a
city
14
and
as
a
region
will
not
stand
for
any
board
or
any
15
elected
official
to
weaken
such
a
good
program.

16
From
another
standpoint
we
see
this
issue
as
17
through
economic
development.
As
you
may
know,
the
18
Central
Valley
struggles
every
year
to
attract
new
jobs.

19
Now
we're
struggling
to
even
retain
the
industries
that
we
20
do
have.

21
And
air
pollution
has
become
such
a
serious
22
problem,
that
we
have
been
featured
in
magazines
and
in
23
newspapers
throughout
the
country.
So,
please,
I
urge
you
24
to
cast
a
"
no"
vote
and
oppose
any
changes
that
would
25
affect
the
lives
and
the
people
in
the
Central
Valley.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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214
1
The
vote
you
cast
either
today
or
tomorrow
will
have
a
2
huge
impact
on
all
the
children
and
all
those
senior
3
citizens
that
have
asthma
and
that
have
respiratory
4
problems
in
our
community.

5
So
I'd
just
keep
my
comments
brief.
Thank
you.

6
I
appreciate
your
time.
And
thank
you
for
having
me
here
7
today.

8
CHAIRPERSON
LLOYD:
Thank
you
for
coming.

9
Dr.
Frank,
Louis
Browning,
Amanda
Miller.

10
DR.
FRANK:
Hello,
everybody.
You've
seen
me
11
here
before.
We
know
each
other
well.

12
I
have
just
a
couple
of
objectives
in
this
talk.

13
Fundamentally
I'd
like
to
see
the
Board
move
towards
­­

14
CHAIRPERSON
LLOYD:
Can
you
speak
a
little
bit
15
closer?

16
Thanks,
thanks.

17
DR.
FRANK:
Fundamentally
I'd
like
to
see
the
18
Board
move
towards
a
ZEV
in
a
progressive
way.
And
I'll
19
outline
some
suggestions.

20
Most
important
thing
is
we
have
come
a
long
ways.

21
And
everybody
has
said
this.
I
just
want
to
be
sure
that
22
we
continue.
So
where
the
original
mandate
has
23
succeeded
­­
we
developed
advanced
batteries.
We
just
24
heard
that.
We
developed
the
concept
of
hybrid
electric
25
vehicles.
That
didn't
come
from
nowhere
either.
That's
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
215
1
in
part
due
to
what
we've
done
here.
We've
introduced
the
2
plug­
in
concept,
at
least
I
have.
And
­­

3
(
Laughter.)

4
DR.
FRANK:
­­
we've
introduced
the
world
to
do
5
propulsion
concepts.
And
this
couldn't
have
happened
6
without
the
Board
initiation
way
back
in
1990.

7
­­
o0o­­

8
DR.
FRANK:
Now,
where
is
the
mandate
going
and
9
where
will
it
lead
us
next?
Let's
create
the
mandate
­­

10
by
the
way,
I
said
I
supported
the
Board
and
the
staff,

11
and
I
really
do.
I
just
want
to
be
sure
that
whatever
12
evolves
out
of
staff
and
the
Board
is
going
to
continue
13
this
leadership
to
industry
to
continue
the
advancement
of
14
automotive
technology
into
the
next
decade.
But
please
15
focus
on
the
near
term
and
not
the
long
term.

16
We
just
heard
from
Fresno.
I
think
that
17
Fresno
­­
the
valley
is
getting
polluted
much
quicker
than
18
our
mandate
is
providing
zero
emission
and
clean
vehicles.

19
And
I
think
this
is
a
key.
We
need
to
focus
on
the
near
20
term
more
importantly
than
the
distant
future.

21
The
mandate
should
provide
a
schedule
to
approach
22
pure
ZEV
in
the
future
with
an
annual
overall
emissions
23
decrease
including
the
full
fuel
cycle.
I
think
we
need
24
to
analyze
that
carefully,
and
I'm
suggesting
the
staff
do
25
that.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
216
1
Lets
do
it
right
this
time.
But
the
key
is
let's
2
take
our
time.
Let's
not
rush
into
this,
an
consider
all
3
options.

4
­­
o0o­­

5
DR.
FRANK:
Just
to
­­
I
just
want
to
reiterate
6
some
of
the
things
that
we
have
done
in
the
passed.
The
7
Hybrid
Electric
Vehicle
Working
Group,
which
EPRI
and
8
CARB
­­
yourselves
­­
South
Coast
Air
Quality,
USDOE,
GM,

9
Ford,
research
groups
from
the
National
Labs,
ARGON,

10
Handrail,
Southern
California
Edison,
SMUD,
New
York
­­

11
this
was
a
comprehensive
study
that
we
did.
And
I
just
12
want
to
reiterate
some
of
the
results
and
maybe
give
you
a
13
slight
different
slant
on
the
results.

14
Here's
the
greenhouse
gas
emissions,
one
of
15
CARB's
new
charges.
We're
comparing
here
both
the
16
conventional
gasoline
and
renewable
gasoline
or
renewable
17
fuels;
we're
comparing
the
conventional
vehicle;
the
zero
18
range
to
20­
mile­
range
plug­
in
hybrid;
60­
mile­
range
19
plug­
in
hybrid;
and
a
hybrid
electric
vehicle
special,

20
which
is
a
60­
mile
range
but
with
new
advanced
21
technologies
and
body
and
so
on;
and
the
battery
electric.

22
What
we
can
do
in
this
horizontal
axis,
we
could
23
simply
substitute
time
for
that
horizontal
axis.
HEV
Zero
24
is
today,
HEV
­­
that's
current
hybrids
of
the
25
conventional
kind;
20­
mile­
range
hybrid
is
maybe
two
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
217
1
years,
five
years
from
now
when
production
can
come
up;

2
60­
mile
range
another
two
or
three
years
out;
and
the
3
special
hybrid
by
2010,
something
like
that.

4
So
what
we
see
here
is
a
gradual
reduction
of
CO2
5
emissions.

6
When
we
look
at
the
criteria
emissions,
NOx
and
7
ROG,
same
sort
of
thing.
So,
once
again,
we
can
8
substitute
on
the
horizontal
axis
time.
And
this
is
9
something
that
staff
can
work
with.

10
­­
o0o­­

11
DR.
FRANK:
Societal
benefits
for
just
a
small
12
battery,
20­
mile­
range
plug­
in
hybrid,
for
150,000
total
13
vehicle
miles
you
will
have
achieved
33
to
66,000
zero
14
emission
miles.
Now,
isn't
that
better
than
a
pure
ZEV?

15
This
is
halfway
to
a
pure
ZEV.
And
100,000
or
more
AT
16
PZEVs.
So
this
technology
is
here
almost
today.

17
Thirty
to
forty
percent
less
NOx
and
ROG;
this
is
18
better
than
the
HEV
Zero.
Twenty
to
thirty
percent
CO2;

19
less
than
HEV
Zero
to
current
hybrids
that
don't
use
a
20
plug.
Forty­
two
percent
less
petroleum.
And,
don't
21
forget,
42
percent
less
petroleum
means
fewer
trips
to
the
22
gas
station.
Similar
market
potential
as
a
zero­
range
23
Hybrid.
And
retail
prices,
$
1600
more
than
a
zero­
range
24
hybrid.
And
that's
6
percent
more.
That's
a
mistake
on
25
the
slide.
I'm
sorry.
Six
percent
more
than
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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218
1
conventional
hybrid.
That
means
instead
of
buying
the
sun
2
roof,
you
could
have
a
20­
mile­
range
plug­
in
hybrid.

3
­­
o0o­­

4
DR.
FRANK:
Now,
here
are
some
of
the
cars
that
5
we
constructed.
I
had
them
downstairs.
But
due
to
the
6
speed
of
this
hearing,
I
asked
my
­­
my
students
had
to
go
7
back.
They
have
to
take
classes
unfortunately.

8
­­
o0o­­

9
DR.
FRANK:
Some
other
additional
­­

10
CHAIRPERSON
LLOYD:
Can
you
­­

11
Dr.
FRANK:
Yeah,
I
can
wind
it
up.
And
12
actually
­­
in
fact
I
can
wind
it
up
right
here.

13
In
the
printout
you've
got
some
additional
14
slides.
But
here
are
some
vehicles
that
we
have
15
constructed
at
the
UC
Davis.
And
our
objective
at
UC
16
Davis
is
to
demonstrate
to
both
the
Board,
staff,
and
the
17
public
that
these
kinds
of
cars
can
be
built
by
lowly
18
graduate
students
and
even
undergraduate
students
and
19
university.
If
we
can
do
it,
the
car
companies
can
do
it,

20
and
at
a
reasonable
cost.

21
Thank
you.

22
CHAIRPERSON
LLOYD:
Thank
you.

23
Mr.
McKinnon.

24
BOARD
MEMBER
McKINNON:
Yeah,
I
just
want
to
25
thank
you
for
your
presentation.
In
the
last
two
hearings
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
219
1
on
this
subject
I've
tried
to
move
amendments
to
make
a
2
plug­
in
hybrid
get
mere
credit.

3
I
just
really
believe
that
a
plug­
in
hybrid
is
4
equivalent
to
a
BEV.
And
the
reason
is
that
I
am
certain
5
that
people
that
drive
BEVs
in
many
cases
change
cars
and
6
get
into
a
gasoline
automobile
to
do
other
things,
like
go
7
on
longer
trips
or
go
to
the
mountains.
And
in
this
case
8
you're
flipping
a
switch.
And
I
think
for
middle
income
9
families
it's
a
lot
more
realistic
that
you're
going
to
10
have
a
car
that
you
flip
a
switch
instead
of
two
cars.

11
And
In
terms
of
acceptability,
I
think
they
just
12
really
have
a
lot
of
merit.
And
I
thank
you
for
your
13
presentation.

14
DR.
FRANK:
May
I
make
a
quick
comment?

15
The
way
we've
designed
these
cars
there's
no
16
switch.
And
ours
switches
automatically.
So
you
just
17
drive
it
like
a
regular
car.
And
the
only
thing
that's
18
required
is
to
plug
it
in
every
day.
And
if
you
do
that,

19
it's
like
being
able
to
buy
gasoline
at
50
cents
a
gallon.

20
(
Applause.)

21
CHAIRPERSON
LLOYD:
Dr.
Browning.
Then
Amanda
22
Miller,
Dave
Hermance.

23
(
Thereupon
an
overhead
presentation
was
24
Presented
as
follows.)

25
CHAIRPERSON
LLOYD:
Dr.
Browning,
again,
I've
PETERS
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1
read
your
conclusions.
I
would
appreciate
if
you
could
2
summarize
this
in
three
minutes.

3
DR.
BROWNING:
In
three?
Oh,
okay.

4
CHAIRPERSON
LLOYD:
Well,
because
the
way
I
read
5
the
conclusion
is
very
similar
to
Dr.
Frank's.

6
DR.
BROWNING:
I
thought
I
had
10.

7
But
basically
what
I'm
here
to
talk
about
is
the
8
EPRI
study
on
breakthroughs
on
battery
technology
and
a
9
life
cycle
cost
analysis.

10
­­
o0o­­

11
DR.
BROWNING:
How
do
I
do
this?

12
CHAIRPERSON
LLOYD:
Because
we
also
have
a
copy
13
of
your
slides.

14
DR.
BROWNING:
There
we
go.

15
Okay.
There
are
two
things
that
I
think
are
new
16
here
is
there's
exciting
new
news
on
increased
nickel
17
metal
hydride
battery
life
that's
emerged
in
the
last
18
three
years.
In
addition,
production
plans
for
engine
19
hybrid
electric
vehicles
by
major
vehicle
manufacturers
20
will
quickly
bring
down
costs
of
power
batteries,
electric
21
motors,
and
electric
controllers.

22
These
two
factors
have
big
implications,

23
especially
by
the
end
of
the
decade.

24
DR.
BROWNING:
Well,
I'll
go
by
that
one.

25
Basically
on
battery
life
­­
there's
­­
three
Toyota
RAV4
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1
EVs
have
accumulated
over
100,000
miles
on
the
original
2
nickel
metal
hydride
pack.
Two
more
have
reached
85,000
3
miles.
These
five
vehicles
are
projected
to
go
from
130
4
to
150,000
miles
on
the
original
battery
pack.

5
New
improved
positive
electrode
technology
will
6
increase
battery
life
and
will
reduce
the
need
for
costly
7
battery
cooling.
New
control
strategy
will
increase
8
battery
life.
And
basically
this
means
that
the
cycle
9
lives
that
were
originally
predicted
by
the
2000
battery
10
panel
of
experts,
6,000
to
12,000,
are
greatly
11
underestimated.

12
­­
o0o­­

13
DR.
BROWNING:
This
is
one
of
the
EV
RAV4'
s
­­

14
this
shows
a
lab
test
done
by
Ford
on
three
battery
types.

15
And
I
think
the
important
thing
here
is
that
nickel
metal
16
hydride
batteries,
as
you
lower
the
depth
of
discharge,
in
17
other
words
the
amount
you
discharge
them
on
a
cycle,
the
18
cycle
life
increases
significantly.
And
one
of
the
things
19
we
found
is
these
Ford
tests
shows
as
much
as
8,000
cycles
20
to
failure
when
discharged
from
80
percent
to
20
percent,

21
or
a
60
percent
depth
of
discharge.

22
We've
seen
data
from
Saft
and
Anderman
that
have
23
said
3,000
to
4,000
cycles
in
an
80
to
20
percent
state
of
24
charge.
Cal
Hammer
and
SAE
high
mileage
tests
have
shown
25
2,000
plus
on
an
80
percent
depth
of
discharge.

PETERS
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1
CHAIRPERSON
LLOYD:
You've
got
30
seconds.

2
DR.
BROWNING:
Oh,
okay.
Well,
then
I'll
move
on
3
here
quickly.

4
CHAIRPERSON
LLOYD:
Because
Dr.
Anderman
covered
5
a
lot
of
the
material
you
were
talking
about.

6
THE
AUDIENCE:
He's
still
got
a
presentation.

7
CHAIRPERSON
LLOYD:
Please,
I'm
listening
to
the
8
witness.

9
DR.
BROWNING:
Okay.
I
wanted
to
go
over
the
10
life
cycle
cost,
because
I
think
that's
pretty
important.

11
Could
I
have
a
minute
to
do
that?

12
CHAIRPERSON
LLOYD:
We've
got
the
copies
here,
if
13
you'd
read
it
quickly.

14
DR.
BROWNING:
Okay.
Basically
the
life
cycle
15
cost
analysis
using
basically
a
modified
CARB
methodology
16
shows
that
at
100,000
units
per
year
the
life
cycle
costs
17
for
an
engine­
dominant
hybrid
is
about
$
500
less
than
a
18
CV.
The
plug­
in
hybrid
is
about
$
1200
less.

19
­­
o0o­­

20
DR.
BROWNING:
And
basically
if
you
look
at
cost
21
parity,
we
reach
cost
parity
at
about
50,000
units
per
22
year
with
a
battery
electric
vehicle,
and
at
battery
23
module
costs
of
about
450,
470
a
kilowatt
hour,
which
is
24
considerably
higher
than
was
originally
determined.

25
­­
o0o­­

PETERS
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1
DR.
BROWNING:
So
­­

2
CHAIRPERSON
LLOYD:
Can
conclude
please?

3
DR.
BROWNING:
I'll
move
on
to
the
conclusions.

4
Basically
HEV
Zero's
engine­
dominant
hybrids,

5
plug­
in
hybrids,
and
battery
electric
vehicles
can
reach
6
cost
parity
with
conventional
vehicles
at
much
higher
7
battery
prices.

8
Plug­
in
hybrids
can
reduce
greenhouse
gas
and
9
criteria
emissions.
Because
life
cycle
parity
can
be
10
reached
with
PHEVs,
the
emission
benefits
come
at
no
cost
11
to
the
consumers.

12
­­
o0o­­

13
DR.
BROWNING:
Production
plans
for
14
engine­
dominant
hybrids
by
major
vehicle
manufacturers
15
will
quickly
bring
down
the
cost
of
power
batteries,

16
electric
motors,
and
electric
controllers.

17
Battery
technology
has
advanced
so
costly
battery
18
replacements
are
minimized
or
avoided.
And
battery
19
leasing
can
turn
up­
front
battery
costs
into
operating
20
expenses,
making
PHEVs
more
attractive
to
consumers.
And
21
I
think
there
is
a
business
case
for
hybrids
and
plug­
in
22
hybrids.

23
Thank
you.

24
CHAIRPERSON
LLOYD:
I
think
staff
recognizes
25
that,
at
least
they've
given
the
opportunity.
And
we'll
PETERS
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1
be
happy
to
ask
each
auto
manufacturer
their
plans
for
2
plug­
in
hybrids.

3
Next,
Dr.
Amanda
Miller.

4
Then
I
think
we
have
Toyota
­­
we
have
Dave
5
Hermance,
Mary
Nickerson,
and
Joe
Tomita.
I
understand
6
you're
going
to
come
together.

7
(
Thereupon
an
overhead
presentation
was
8
Presented
as
follows.)

9
CHAIRPERSON
LLOYD:
And
I'd
appreciate
if
you'd
10
respect
us
with
time.

11
DR.
MILLER:
Yes,
quite.

12
I'm
representing
the
same
EPRI
HEV
working
group,

13
which
was
the
consensus
study
on
the
adoption
of
both
14
plug­
in
and
non­
plug­
in
hybrids.
And
I
was
responsible
15
for
the
market
research
on
the
customer
acceptance
of
16
these
vehicles.

17
­­
o0o­­

18
DR.
MILLER:
And
the
focus
was
to
understand
if
19
there
would
be
mainstream
potential
for
these
vehicles,

20
that
­­
you
know,
would
people
who
aren't
early
adopters
21
actually
be
willing
to
plug
their
vehicles
in,
would
they
22
be
willing
to
use
them?

23
­­
o0o­­

24
DR.
MILLER:
What
we
found
is
that,
yes,
in
fact
25
customers
were
interested
in
plug­
in
hybrids,
that
they
PETERS
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1
appreciated
many
of
the
benefits,
in
particular
avoiding
2
going
to
gas
stations.

3
And
the
participants
were
asked
whether
they
4
preferred
plugging
in
over
going
to
a
gas
station,
on
a
5
1­
to­
9
scale,
given
these
two
statements
right
here:
"
I
6
would
prefer
to
fuel
my
vehicle
with
gas
at
this
gas
7
station"
versus
"
I
would
prefer
to
fuel
my
vehicle
by
8
plugging
it
in
at
home."
And
what
we
found
is
that
9
respondents
showed
a
strong
preference
for
plugging
in,

10
with
as
many
as
56percent
and
63
percent
among
midsize
11
consumers.

12
­­
o0o­­

13
DR.
MILLER:
The
other
thing
that
we
did
was
we
14
built
a
very
sophisticated
market
model
that
predicted
the
15
relative
market
shares
of
the
HEV
Zero,
which
is
the
16
non­
plug­
in
hybrid,
and
the
20­
mile­
electric­
range
hybrid
17
and
the
60­
mile­
electric­
range
hybrid
versus
the
18
conventional
vehicle.
Under
the
scenario
that
you
could
19
go
out
and
if
what
you
were
looking
for
was
a
Civic,
you
20
could
get
any
of
the
four
types.
So
you
got
the
same
21
vehicle,
same
behavior.
It's
just
that
engine
differed.

22
Respondents
were
told
that
in
order
to
get
the
23
benefits
for
the
HEV
20
and
60
they
had
to
plug
in.
And
24
in
fact
we
saw
that
the
market
preference
for
plug­
in
HEVs
25
was
around
40
percent.

PETERS
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1
If
gas
prices
go
up,
of
course
that's
higher.

2
­­
o0o­­

3
DR.
MILLER:
So
that
is
my
presentation.
I
4
appreciate
your
time.

5
Thank
you.

6
CHAIRPERSON
LLOYD:
Thank
you
very
much.

7
Appreciate
your
keeping
to
the
time.

8
Any
questions?

9
Of
course
gas
is
­­
have
you
actually
monitored
10
any
behavior
­­
I've
seen
in
the
papers
increased
behavior
11
for
just
hybrids
given
the
increased
price
of
gas.

12
DR.
MILLER:
Yeah,
I
think
we'd
find
if
we
did
13
the
research
over
that
some
of
the
benefits
about
14
independence
from
foreign
oil
would
come
out
stronger
than
15
we
saw
in
the
research
we
did.

16
CHAIRPERSON
LLOYD:
Thank
you.

17
We
have
Toyota.

18
MR.
TOMITA:
Good
afternoon,
Chairman
Lloyd
and
19
ladies
and
gentlemen
of
the
Board.
My
name
is
Joe
Tomita.

20
I'm
a
group
vice
president
for
the
technical
and
21
regulatory
at
Toyota
North
America.

22
(
Thereupon
an
overhead
presentation
was
23
Presented
as
follows.)

24
MR.
TOMITA:
I've
had
the
pleasure
of
meeting
25
many
of
you
in
my
role
as
head
of
Toyota's
communication
PETERS
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1
team
to
the
ARB,
along
with
my
colleague
Dave
Hermance,

2
and
I
thank
you
for
this
opportunity
to
speak
to
today.

3
­­
o0o­­

4
MR.
TOMITA:
As
you
know,
Toyota
has
responded
to
5
your
call
to
do
what
it
can
to
reduce
vehicle
emissions
by
6
providing
many
of
the
technologies
contemplated
under
the
7
ZEV
Program.
We
worked
for
five
years
to
lease
the
RAV4
8
EV
electric
vehicle
to
­­
and
sold
and
leased
this
vehicle
9
at
retail
last
year.

10
­­
o0o­­

11
MR.
TOMITA:
We
are
also
the
first
in
the
world
12
to
mass
produce
a
gas­
electric
hybrid
vehicle,
the
Toyota
13
Prius.
And
we
will
have
an
announcement
concerning
the
14
next
generation
of
the
Prius,
which
will
be
an
AT
PZEV,
at
15
the
New
York
auto
show
next
month.

16
­­
o0o­­

17
MR.
TOMITA:
We
will
also
have
20,000
PZEV
18
Camry's
on
California's
roads
in
the
'
03
model
year
and
19
40,000
in
'
04
model
year.

20
­­
o0o­­

21
MR.
TOMITA:
Finally,
you
also
may
have
heard
22
that
we
have
and
will
continue
to
place
fuel
cell
hybrid
23
vehicles
in
demonstration
programs
in
California.

24
­­
o0o­­

25
MR.
TOMITA:
Beyond
vehicles
there
is
also
an
PETERS
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1
active
member
of
the
California
­­
partnership
and
a
2
founding
partner
of
ZEV
Net,
the
innovative
station
car
3
program
underway
in
Irvine.
Through
these
projects
we
4
have
worked
closely
with
your
staff.
And
in
the
case
of
5
station
cars,
also
worked
directly
with
Board
member
6
DeSaulnier,
who
has
been
a
tremendous
catalyst
for
sharing
7
these
transportation
initiatives
in
California.

8
­­
o0o­­

9
MR.
TOMITA:
We
have
three
main
issues
to
share
10
with
you
today.
First,
our
experience
with
retail
sales
11
and
marketing
of
the
RAV
EV.
Second,
our
thoughts
on
fuel
12
cells
and
their
challenges.
And,
third,
the
value
of
13
hybrids,
both
as
a
bridge
to
and
essential
component
of
14
the
zero­
emission
future.

15
A
representative
from
Toyota
Motor
Sales,
Mary
16
Nickerson,
will
cover
the
first
topic
with
you,
and
Dave
17
Hermance
from
the
Toyota
Technical
Center
will
cover
fuel
18
cells
and
hybrids.

19
­­
o0o­­

20
MR.
TOMITA:
Before
I
turn
to
Mary,
however,
I
21
would
like
to
acknowledge
the
efforts
of
your
staff
in
22
working
to
inject
more
technical
and
commercial
23
feasibility
into
the
regulation.

24
As
you
will
hear
from
us,
some
issues
remain.

25
But
overall,
since
no
one
has
a
clear
crystal
ball
on
the
PETERS
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1
automobile
future,
we
think
to
continue
to
focus
on
the
2
quality
of
vehicles
and
vehicle
interactions
rather
than
3
shear
quantities
of
cars
in
any
particular
category
is
a
4
move
in
the
right
direction.

5
Mary
Nickerson
from
our
sales
department
will
now
6
speak
to
you
about
our
retail
program
for
the
RAV4
EV.

7
Thank
you
again.

8
CHAIRPERSON
LLOYD:
Thank
you
for
the
positive
9
comments,
Joe.
Appreciate
it.

10
MS.
NICKERSON:
Good
afternoon.
My
name
is
Mary
11
Nickerson,
and
I'm
the
National
Marketing
Manager
for
12
Advanced
Technology
Vehicles
at
Toyota
Motor
Sales
U.
S.
A.

13
I've
had
the
opportunity
to
meet
and
speak
with
14
many
of
you
in
the
past
year.
And
thank
you
for
the
15
opportunity
to
speak
today.

16
In
August
2001,
Toyota
decided
to
fully
engage
in
17
a
proactive
sales
effort
for
full­
function
electric
18
vehicles.
The
purpose
of
my
presentation
is
to
present
19
the
program's
elements
and
results.

20
First,
I'd
like
to
take
a
few
moments
to
review
21
these
program
elements,
including
the
vehicle,
our
22
distribution
model,
pricing
and
warranty,
and
specifics
23
about
the
marketing
efforts.

24
­­
o0o­­

25
MS.
NICKERSON:
Toyota
offered
the
RAV4
EV
based
PETERS
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1
on
its
popular
RAV4
IC
platform,
known
in
the
marketplace
2
for
its
utility.

3
We
utilized
a
proven
internet­
based
business
4
model
for
the
Prius
that
accomplished
two
key
objectives.

5
First,
the
system
streamlined
the
distribution
6
process;
and,
second,
the
on­
line
nature
allowed
these
7
customers
to
have
easy
access
to
all
information
on
the
8
web.

9
This
system
proved
its
mettle
with
Prius
by
10
successfully
introducing
new
technology
and
attaining
our
11
sales
goals
for
the
launch
and
the
18
months
that
12
followed.
U.
S.
sales
for
Prius
are
now
greater
than
13
45,000,
with
about
15,000
in
California.

14
Toyota
also
established
a
statewide
sales
network
15
of
25
self­
selected
dealers
who
were
already
successful
at
16
selling
Prius
and
a
comprehensive
EV
sales
and
service
17
training
for
the
dealers
and
their
associates,
with
18
participation
of
an
ARB
representative.
Toyota
provided
a
19
demonstration
unit
to
each
dealer
to
allow
customers
to
20
test
drive
the
vehicle.

21
­­
o0o­­

22
MS.
NICKERSON:
Toyota
established
a
third­
party
23
business
partnership
with
Clean
Fuel
Connection
to
24
streamline
the
distribution
and
installation
of
chargers.

25
Toyota
also
created
an
attractive
pricing
offer
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1
that
included
the
charger.
This
price
was
well
below
the
2
cost
per
unit,
but
provided
the
dealer
substantial
margins
3
to
provide
motivation.
We
offered
customers
the
option
to
4
purchase
or
lease.
And
our
lease
options
were
equivalent
5
to
the
Prius,
$
329
a
month
price
after
the
loan
fall
6
incentives
were
included.

7
Toyota
also
included
a
3­
year,
36,000
mile
8
warranty,
prepaid
maintenance,
and
a
complimentary
9
roadside
assistance
program.
In
addition,
a
5­
year,

10
60,000
mile
main
battery
and
powertrain
warranty
was
11
provided
to
each
customer.

12
Finally,
Toyota
focused
on
building
high
13
awareness
with
a
targeted
multimedia
marketing
campaign
14
based
on
the
successful
Prius,
which
I'll
now
describe
in
15
more
detail.

16
­­
o0o­­

17
MS.
NICKERSON:
Fifty
thousand
promotional
18
brochures
were
distributed
with
a
two­
percent
response
19
rate.
A
TV
spot
was
developed
which
aired
on
select
cable
20
channels.
Magazine
media
included
California
Editions
and
21
11
national
magazines.
In
addition,
full­
page
newspaper
22
ads
were
placed
in
major
metropolitan
areas.
Outdoor
23
media
was
also
used
in
San
Francisco,
L.
A.,
and
Berkeley.

24
Interactive
media
was
widespread
with
a
click
25
through
to
the
RAV4
EV
site.
RAV
EV
advertising
campaign
PETERS
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CORPORATION
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232
1
generated
almost
800
million
impressions
in
California,

2
which
was
double
the
Prius
impressions
nationally.

3
­­
o0o­­

4
MS.
NICKERSON:
Our
marketing
activities
paid
off
5
in
generating
a
very
high
awareness
level.
Almost
800,000
6
visits
to
TOYOTA.
COM
were
directed
at
the
RAV4
EV
web
7
page,
as
compared
to
about
500,000
visits
for
Prius.

8
­­
o0o­­

9
MS.
NICKERSON:
Despite
the
high
awareness
of
the
10
RAV
EV,
the
sales
pace
was
disappointingly
low.
These
11
results
shared
with
ARB
in
mid­
October
reflect
the
sales
12
pace
over
time.
You
can
see
that
after
the
initial
13
pent­
up
demand
of
47
units
in
the
first
two
weeks,
the
14
average
demand
was
about
six
units
per
week.
The
demand
15
for
RAV4
EV
remained
small
and
did
not
increase.

16
­­
o0o­­

17
MS.
NICKERSON:
Let's
now
look
at
another
metric,

18
the
ratio
of
consumer
purchase
interest
to
actual
19
purchases.
This
chart
shows
the
number
of
individuals
in
20
California
who
registered
their
interest
on
our
website.

21
You
can
see
that
the
number
of
interested
customers
was
22
over
2
1/
2
times
that
of
the
RAV4
EV
customers.
But
a
far
23
smaller
percentage
actually
went
through
with
the
purchase
24
of
the
RAV4
EV
than
the
Prius.
The
fallout
rate
was
87
25
percent
for
RAV4
EV
and
only
27
percent
for
Prius.
This
PETERS
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1
is
perhaps
more
dramatic
when
comparing
sales
volume
of
2
individual
dealers.

3
This
chart
shows
RAV4
EV
and
Prius
sales
by
4
dealer.
As
you
can
see,
despite
the
availability
of
a
5
two­
times
greater
financial
incentive
for
dealers
to
sell
6
RAV4
EV's,
every
dealer
in
the
program
sold
more
Prius
7
than
it
did
RAV4
EV.

8
Toyota
of
Berkeley,
one
of
our
top
Prius
dealers
9
in
the
nation,
sold
108
Prius
and
6
RAV4
EVs
during
that
10
period.

11
In
summary,
Toyota's
retail
market
program
was
12
based
on
a
proven
internet
business
model,
a
motivated
13
dealer
network,
an
attractive
pricing
and
warranty
14
program,
and
an
extensive
multimedia
marketing
plan.
On
a
15
per­
vehicle
basis
media
spending
during
the
program
was
16
more
than
15
times
that
of
Prius,
and
intelligently
17
targeted
at
customers
most
likely
to
be
interested
in
an
18
electric
vehicle.
These
marketing
efforts
were
successful
19
in
generating
high
awareness,
as
shown
in
our
website
20
traffic
data,
but
sales
remained
low
and
did
not
increase
21
over
time.

22
To
conclude,
with
the
only
full­
function
electric
23
vehicle
available
to
the
market,
Toyota
only
sold
at
an
24
annualized
pace
of
300
vehicles
per
year.

25
Thank
you
for
the
opportunity
to
share
our
PETERS
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1
perspective.
And
now
if
you
have
any
questions
related
to
2
the
EV
sales
effort,
I'd
be
happy
to
answer
them
at
this
3
time.

4
BOARD
MEMBER
HUGH
FRIEDMAN:
Are
there
any
5
questions?

6
BOARD
MEMBER
McKINNON:
My
first
question
is:

7
Was
this
presentation
made
at
the
workshops
or
other
8
places
for
the
public
for
the
public
to
kind
of
view
and
9
get
a
grip
on?

10
MS.
NICKERSON:
The
presentation
that
we
11
presented
to
ARB
was
presented
to
the
ARB
members.

12
BOARD
MEMBER
McKINNON:
I
understand.
I
was
in
13
one
of
the
meetings
where
it
was
presented.
What
I'm
14
wondering
is
whether
or
not
the
public
has
seen
it
before
15
today?

16
MS.
NICKERSON:
I
think
only
a
limited
number
may
17
have
seen
it.

18
BOARD
MEMBER
McKINNON:
Okay.
The
other
question
19
I
have
­­
and
I'm
willing
to
­­
you
know,
if
it's
more
20
appropriate
to
ask
the
next
speaker,
let
me
know
that.

21
The
issue
that
was
talked
about
a
little
while
ago
about
22
some
of
the
used
vehicles
being
sold
or
leased
or
23
re­
leased,
where
is
Toyota
on
that
issue?

24
MS.
NICKERSON:
Currently
our
fleet
of
vehicles
25
that
are
coming
off
lease,
many
of
those
are
being
PETERS
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362­
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1
re­
leased
by
those
fleet
customers,
of
which
the
majority
2
of
those
are
in
California.
And
for
leased
vehicles
in
3
the
retail
program,
customers
have
the
option
to
purchase
4
those
vehicles
at
the
end
of
the
lease.

5
BOARD
MEMBER
McKINNON:
Thank
you.

6
CHAIRPERSON
LLOYD:
Any
other
questions?

7
Thank
you
very
much.

8
MR.
HERMANCE:
Good
afternoon.
I'm
Dave
9
Hermance.
Afternoon
to
the
Board.
I
suspect
many
of
you
10
know
me.
I'm
with
Toyota's
Technical
Center.
And
my
11
purpose
in
this
threesome
is
to
review
Toyota's
take
on
12
the
regulatory
proposal.

13
We're
almost
about
to
get
a
slide.

14
­­
o0o­­

15
MR.
HERMANCE:
Toyota
supports
many
of
staff's
16
observations,
particularly
among
those
­­
and
reinforced
17
by
Dr.
Anderman's
observations
­­
battery
cost
and
18
performance
have
not
evolved
as
hoped.
There
have
been
19
small
incremental
improvements,
but
there
have
been
no
20
breakthroughs
in
the
battery
technology
as
we
had
all
21
hoped
in
the
early
stages
of
this
process.

22
Further,
there
is
no
significant
element
on
the
23
element
on
the
horizon
that
suggests
that
this
situation
24
will
soon
change.

25
Further,
as
reviewed
by
Mary
Nickerson,
the
EV
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1
market
as
tested
is
small;
and
at
the
price
point
­­
or
2
the
cost
of
manufacture
of
the
vehicle
is
not
a
3
sustainable
market.

4
Finally,
we
agree
that
the
fuel
cell
vehicle
is
5
not
yet
ready
for
commercialization.
And
I
have
a
little
6
more
information
with
regard
to
fuel
cell.

7
­­
o0o­­

8
MR.
HERMANCE:
As
an
independent
developer
of
9
fuel
cell
technology,
Toyota
supports
the
vision
of
a
10
future
in
fuel
cell
transportation.
Toyota
began
fuel
11
cell
development
in
1992,
evaluating
not
only
the
basic
12
system
components
but
fuels
and
fuel
storage
options
over
13
a
series
of
vehicles
that
were
both
for
demonstration
14
purposes
and
for
internal
use.

15
We
have
announced
a
program
of
approximately
20
16
vehicles
to
be
located
in
California
and
in
Japan
as
the
17
first
phase
of
a
test
outside
of
the
parent
organization.

18
Sometimes
it's
necessary
to
have
customers
other
than
the
19
engineers
developing
the
product,
give
us
some
feedback
20
with
regard
to
the
acceptability
of
the
product
to
the
21
future
mass
market.
We
just
began
this
phase
in
December
22
of
last
year,
and
the
rest
of
the
vehicles
will
be
placed
23
through
the
balance
of
this
year.

24
These
vehicles
are
being
placed
on
a
30­
month
25
lease.
At
the
end
of
that
period
of
time,
or
earlier
if
PETERS
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362­
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1
we
get
additional
information,
we'll
begin
to
feed
that
2
information
back
into
the
ongoing
development
process
and
3
make
decisions
then
about
what
is
the
next
appropriate
4
step.

5
The
bottom
line
though
is
that
additional
vehicle
6
placements
will
be
driven
by
the
needs
of
the
development
7
process
rather
than
by
the
need
to
satisfy
a
set
number
of
8
vehicles.
The
development
process
has
its
own
timing
and
9
pace,
which
may
not
always
agree
with
the
regulatory
10
desire.

11
­­
o0o­­

12
MR.
HERMANCE:
Let
me
talk
briefly
about
fuel
13
cell
­­
this
slide
actually
says
challenges.
Engineers
14
prefer
to
refer
to
these
as
opportunities.
There
are
15
literally
thousands
of
opportunities
associated
with
the
16
ongoing
development
of
fuel
cells.

17
The
first
grouping
of
these
opportunities
are
18
those
within
the
control
and
purview
of
the
manufacturers
19
and
their
supplier
community.
They
deal
with
the
basic
20
elements
of
the
system:
The
fuel
cell
stack,
which
is
the
21
core
of
the
technology;
the
hydrogen
storage,
which
is
a
22
major
challenge
because
hydrogen
is
significantly
less
23
dense
an
energy
carrier
than
are
liquid
fuels;
and
then
24
what
are
universally
referred
to
as
balance
of
plant,

25
those
auxiliary
systems
necessary
to
make
the
whole
system
PETERS
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1
work
as
a
fuel
cell
engine.
They
include
principally
air
2
management
systems,
fuel
management
systems,
and
water
3
management
systems.

4
As
you
have
heard,
the
only
byproduct
of
5
operation
of
a
fuel
cell
vehicle
is
water.
The
downside
6
of
having
water
as
the
only
byproduct
is
in
low
7
temperature
environments,
some
of
which
are
in
California
8
and
more
of
which
are
in
other
parts
of
this
country.

9
There
is
a
significant
engineering
challenge
to
manage
10
that
water
vapor
to
keep
it
from
freezing
in
a
point
in
11
the
system
that
you
don't
want
it
frozen
in.

12
The
next
group
of
challenges
are
those
in
which
13
the
auto
manufacturers
have
a
role,
but
also
they
need
14
support
from
other
organizations
outside
the
industry.

15
These
are
in
regard
to
codes
and
standards.
For
example,

16
there
are
codes
and
standards
necessary
for
the
17
development
of
the
core
technology,
the
vehicle
and
the
18
components
of
the
vehicle.
And
those
will
largely
be
19
worked
through
the
Society
of
Automotive
Engineers
and
20
other
international
standards
organizations.
But
to
the
21
broader
issues
of
the
interface
of
the
vehicle
to
the
22
refueling
infrastructure
and
of
the
building
safety
­­

23
building
codes
and
standards,
there
are
an
almost
infinite
24
number
of
standard­
setting
organizations
in
the
world.

25
Largely
this
work
is
being
pushed
forward
through
the
PETERS
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362­
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239
1
California
Fuel
Cell
Partnership,
which
has
been
very
2
valuable
in
pulling
together
the
diverse
interests.
But
3
this
is
work
that's
done
not
only
by
the
industry,
but
by
4
many
others
as
well.

5
The
other
item
within
the
­­
not
wholly
within
6
the
control
of
the
auto
industry
is
public
awareness
and
7
acceptance.
There
was
an
unfortunate
incident
many
years
8
ago
that
unfortunately
is
brought
to
mind
by
many
people
9
when
you
talk
about
hydrogen
­­
that,
by
the
way,
was
10
directly
related
to
a
static
discharge
igniting
the
paint
11
on
the
big
bag
that
held
all
that
hydrogen.
It
was
not
a
12
hydrogen
incident.
But
that
is
the
hurdle
that
has
to
be
13
jumped
with
the
public
for
the
perception
of
safety
for
14
the
vehicles.

15
Then
the
one
other
issue
that's
wholly
outside
16
the
purview
of
the
manufacturers,
other
than
we
have
to
17
buy
some
of
it
in
order
to
run
our
limited
number
of
18
vehicles,
is
infrastructure.
This
area
of
opportunity
19
falls
to
government
and
the
energy
industry
to
provide
the
20
ubiquitous
refueling
structure
customers
have
come
to
21
expect
in
their
impersonal
mobility.

22
­­
o0o­­

23
MR.
HERMANCE:
Let's
talk
for
a
second
about
fuel
24
cells
as
an
enabler
of
this
­­
or
hybrids
as
an
enabler
of
25
the
fuel
cell
future.
We
agree
with
staff's
position
that
PETERS
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240
1
hybrids
are
a
significant
enabler
of
the
fuel
cell
future.

2
Several
key
systems
developed
for
hybrid
vehicles
will
be
3
directly
applicable
to
the
future
fuel
cell
vehicles.

4
These
include
power
electronics,
secondary
batteries,
more
5
efficient
drive
motors,
and
overall
control.

6
­­
o0o­­

7
MR.
HERMANCE:
That's
perhaps
easier
seen
in
this
8
diagram,
which
­­
if
I
can
get
the
LASER
pointer
to
work.

9
No,
it
will
not
work.
Never
mind.

10
Okay.
The
system
in
­­
power
control
electronics
11
use
sophisticated
power
devices
called
insulated
gate
12
bipolar
transistors.
They
are
common
between
hybrid
13
vehicles
and
fuel
cell
vehicles.
The
battery
in
a
14
hybrid
­­
or
in
a
fuel
cell
vehicle,
at
least
in
the
case
15
of
our
fuel
cell
vehicle,
is
exactly
the
same
battery
16
taken
from
a
Prius.
The
drive
motors,
although
they
are
17
larger
in
the
fuel
cell,
are
of
the
same
design
character
18
with
the
objectives
of
high
efficiency
and
minimum
weight
19
and
space.
So
­­
and
the
overall
control
system,

20
including
regenerative
braking,
is
directly
comparable
21
from
vehicle
to
vehicle.

22
­­
o0o­­

23
MR.
HERMANCE:
One
small
quibble
with
the
staff's
24
evaluation,
not
based
on
Toyota's
data
but
based
on
25
third­
party
data.
A
contractor
to
the
California
Energy
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
Commission,
K.
G.
Duleep
of
E.
E.
A.,
did
a
cost
analysis
for
2
the
petroleum
dependent
study
ordered
by
CEC.
This
is
3
data
extracted
from
his
report
from
March
of
2002.

4
It
suggests
the
cost
at
today's
prices
and
the
5
cost
at
100,000
units
per
year
volumes
of
the
various
6
technologies.
These
are
the
tiers
of
advanced
technology
7
components
arrayed
in
the
staff
report
for
credit
as
8
advanced
components
in
the
AT
PZEV
category.

9
If
you
look
at
the
Tier
2
category,
the
mature
10
cost
at
100,000
units
is
$
1600,
and
the
Tier
3
is
$
2400.

11
That
suggests
to
me
that
the
staff's
evaluation
of
the
AT
12
PZEV
credit
for
Tier
3
needs
to
be
incremented
by
a
tenth
13
to
get
cost
equity
among
the
two
technologies.

14
­­
o0o­­

15
MR.
HERMANCE:
Toyota
is
committed
to
hybrid
16
vehicles,
both
as
a
great
technology
today
and
as
a
bridge
17
to
the
fuel
cell
future.

18
A
note
of
caution,
however.
This
technology
is
19
not
free.
Today
it
is
not
even
cheap.
Even
in
the
future
20
in
high
volumes
it
will
not
be
free.
The
cost,
translated
21
to
the
price
of
the
vehicle,
and
the
volume,
mandated
22
by
­­
or
required
by
the
regulation
as
proposed,
will
pose
23
a
significant
challenge
for
manufacturer
and
marketing
of
24
that
number
of
premium
cost
vehicles.
Some
manufacturers
25
will
be
better
positioned
to
respond
to
that
challenge
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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242
1
than
others.
But
state
or
federal
incentives
would
2
significantly
reduce
the
hurdle
to
be
jumped
to
get
to
3
that
point.

4
­­
o0o­­

5
MR.
HERMANCE:
And
then
the
conclusion
slide.

6
At
the
highest
levels
of
the
corporation,
Toyota
7
is
committed
to
reducing
the
footprint
of
our
products
on
8
the
environment.
We
look
forward
to
working
with
staff,

9
the
Board,
and
other
stakeholders
in
the
ongoing
10
regulatory
process
to
clean
California's
air.

11
I'd
be
glad
to
take
questions
if
you
have
them.

12
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

13
BOARD
MEMBER
McKINNON:
Whatever
disagreement
I
14
might
have
with
the
staff
proposal
and
whatever
15
disagreement
we
may
have
in
how
this
gets
resolved,
I
16
think
it's
really
necessary
to
say
to
you
and
Joe
and
17
Mary,
it's
very
clear
to
me
as
a
Board
member
that
Toyota
18
has
done
the
very
best
job
of
any
of
the
companies
working
19
on
this
zero
emission
problem.

20
MR.
HERMANCE:
Thanks.

21
CHAIRPERSON
LLOYD:
Can
I
ask
you,
Dave,
two
22
questions
which
are
relevant
to
previous
testimony.
And,

23
again,
I'd
like
to
ask
all
the
manufacturers
­­
although
I
24
won't
get
a
chance
to
talk
to
General
Motors
and
25
Daimler­
Chrysler.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
243
1
But
do
you
think
the
credits
for
plug­
in
hybrids
2
are
adequate?
Under
what
circumstances
would
you
see
a
3
benefit
in
plug­
in
­­
would
convince
you
to
get
into
4
plug­
in
hybrids?

5
MR.
HERMANCE:
The
credit
structure
appears
to
be
6
significantly
generous
and
should
inspire
someone
to
7
participate
in
that
arena.

8
The
reality,
however,
is
that
the
development
job
9
is
somewhat
more
difficult
than
characterized
by
studies
10
of
those
who
don't
have
to
develop
vehicles.
There
are
11
significant
test
procedure
issues
that
have
to
be
resolved
12
that
are
impossible
to
resolve
until
you
have
a
vehicle
to
13
review
with
regulatory
staff
to
get
concurrence
that
the
14
systems
aren't
defeat
devices,
that
they
are
getting
15
appropriate
test
methods
that
correctly
credit
their
16
emissions
performance.

17
So
I
believe
that
it
will
come.
It
will
not
come
18
soon.
The
near­
term
market
is
for
the
grid­
independent
19
vehicle.
Longer
term,
with
that
credit
structure,
I
would
20
be
surprised
if
a
manufacturer
didn't
go
there.

21
CHAIRPERSON
LLOYD:
Second
question.

22
What
about
hydrogen
IC
engine
that
Mr.
Freeman
23
spoke
so
eloquently
about?

24
MR.
HERMANCE:
I
don't
know
about
those
graven
25
images.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
244
1
In
any
event,
hydrogen
ICE
engines
could
indeed
2
provide
a
bridge
if
the
infrastructure
were
to
develop
3
ahead
of
the
fuel
cell.
I
think
the
task
to
develop
4
hydrogen
vehicles
­­
hydrogen
ICE
vehicles
­­
it's
5
complicated
when
you
add
hybridization
to
it.
But
pure
6
hydrogen
ICE
vehicles
is
somewhat
less
daunting
than
the
7
challenge
to
deploy
the
infrastructure.
If
there's
8
infrastructure
in
need
of
use
and
fuel
cells
aren't
ready,

9
then
I
think
hybrid
ICE
could
be
a
viable
candidate.

10
CHAIRPERSON
LLOYD:
Supervisor
DeSaulnier.

11
BOARD
MEMBER
DeSAULNIER:
Well,
first
off
I'd
12
like
to
echo
what
Matt
had
to
say.
And
I
appreciate
the
13
nice
comments
by
Joe.
It's
been
a
pleasure
working
with
14
Toyota
for
these
many
years.
And,
Dave,
I
enjoyed
our
15
train
trip
in
Japan.
It
was
a
good
philosophical
16
discussion.

17
But
follow­
up
to
the
Chairman's
comment,
it
does
18
get
into
a
chicken­
egg
problem
that
we've
talked
about
in
19
terms
of
infrastructure.
But
the
opportunity
for
internal
20
combustion
engine,
hydrogen,
would
beg
to
at
least
21
intuitively
encourage
infrastructure
in
hydrogen
22
refueling.

23
MR.
HERMANCE:
You're
right.
It
is
chicken
and
24
egg.
It's
which
do
you
want
first.
Who
makes
­­

25
BOARD
MEMBER
DeSAULNIER:
We
want
both.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
245
1
MR.
HERMANCE:
Then
if
the
infrastructure
appears
2
to
be
developing
a
pace
and
fuel
cells
are
not,
I'm
sure
3
that
industry
will
be
inspired
to
provide
hydrogen
ICE
4
vehicles.
There
are
manufacturers
who
are
already
5
pursuing
hydrogen
ICE
as
an
independent
technology.
More
6
of
them
would
become
interested
were
there
an
7
infrastructure
in
place.

8
BOARD
MEMBER
DeSAULNIER:
And
what
about
hydrogen
9
hybrids?

10
MR.
HERMANCE:
The
challenge
there
is
you
have
11
now
two
technologies
that
add
premium
costs
to
the
system.

12
You
have
a
hydrogen
storage
challenge
that
you
have
to
13
address.
And
you
have
to
make
space
for
the
hybrid
14
components,
the
batteries
and
whatnot.
You're
now
adding
15
complications.
But
certainly
it's
a
more
efficient
16
vehicle.
You'd
have
to
do
the
trade­
offs
of
the
specific
17
design
to
determine
whether
you
wanted
to
hybridize
or
18
not.

19
BOARD
MEMBER
DeSAULNIER:
How
long
would
it
take
20
to
take
something
like
a
Prius,
if
you
made
that
decision,

21
and
actually
make
hydrogen
hybrids?

22
MR.
HERMANCE:
I
understand
one
of
our
23
competitors
took
one
of
our
vehicles
and
did
that.

24
BOARD
MEMBER
DeSAULNIER:
How
long
did
it
take
25
them?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
246
1
MR.
HERMANCE:
I
don't
know
what
the
development
2
time
­­
I
haven't
even
seen
the
vehicle.
I
just
heard
3
about
it.

4
BOARD
MEMBER
DeSAULNIER:
Okay.
Thanks,
David.

5
Thank
you,
Mr.
Chairman.

6
CHAIRPERSON
LLOYD:
Supervisor
Roberts.

7
BOARD
MEMBER
ROBERTS:
Yeah,
the
comment
and
the
8
suggestion
the
Tiered
3
credit,
I
wondered,
is
the
staff
9
going
to
respond
to
that,
the
difference
in
the
.5
and
.6?

10
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Yes,
we
11
created
the
three
different
categories
with
different
12
credits.
It
was
not
precisely
derived
from
the
kind
of
13
cost
analysis
that
Dave
Hermance
presented.
We
were
14
looking
at
­­
more
at
what
is
the
relative
difference
in
15
technology
and
its
ability
to
force
or
move
ZEV­
like
16
technology
to
the
future.

17
And
the
two
vehicles
that
we
were
kind
of
18
comparing
between
the
Tier
3
that
me
mentioned
and
the
19
Tier
2
was
the
Honda
Civic
and
the
Prius.
And
while
some
20
of
their
characteristics
are
different,
motor
power,

21
things
like
that,
we
didn't
think
they
were
that
different
22
that
it
required
a
­­
that
it
would
justify
two­
tenths
23
difference
in
credit.
So
we
picked
one­
tenth
difference
24
in
credit.

25
BOARD
MEMBER
ROBERTS:
The
philosophy
is
I
guess
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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247
1
different
from
what
we
discussed
earlier
in
the
signing
of
2
the
credits.
We
were
looking
at
the
cost,
and
that's
what
3
was
driving
the
Toyota
one
or
whatever
it
was.

4
CHIEF
DEPUTY
EXECUTIVE
OFFICER
CACKETTE:
Yeah,

5
that
was
on
the
battery
vehicles
versus
the
hybrid
6
vehicles
­­
or
the
fuel
cell
vehicles.
And,
yeah,
there
7
was
a
different
philosophy
at
stake
there.
There
it
was
8
trying
to
see
that
­­
I
guess
it's
our
view
that
none
of
9
the
manufacturers
are
going
to
build
battery
electric
10
vehicles
in
these
early
years.
They're
going
to
go
with
11
fuel
cells.
But
there
are
secondary
manufacturers
out
12
there
who
are
anxious
to
build
battery
electric
vehicles.

13
And
so
to
get
them
into
the
marketplace
by
making
their
14
credits
worthwhile,
we
had
to
create
a
price
structure
15
that
would
say
if
you
didn't
want
to
make
one
extra
fuel
16
cell
vehicle
and
you
chose
to
make
20
­­
buy
20
credits
17
from
a
secondary
battery
electric
vehicle
manufacturer,

18
that
would
­­
there'd
be
an
economic
case
to
do
that.

19
So
in
that
case
it
was
an
economic
comparison
20
much
like
Dave
also
tried
to
apply
to
the
hybrids.
But
in
21
the
hybrid
case
that's
not
what
we're
looking
at.
We're
22
trying
to
figure
out
how
to
move
those
hybrid
components
23
into
the
marketplace
into
volumes
such
that
they
will
24
support
at
a
later
year
battery
electric
vehicles
or
fuel
25
cell
vehicle
production.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
248
1
And
so
it
was
a
different,
more
of
a
2
technological­
based
rationale
than
an
economic
based
3
rationale.

4
CHAIRPERSON
LLOYD:
Bob,
I'd
like
to
ask
you
a
5
question
­­
Bob
Cross.

6
If
my
memory
serves
me
correctly,
I
saw
an
E­
mail
7
from
you
yesterday
which
had
some
first
­­
some
emissions
8
data
on
hydrogen
IC
engines.
And
I
don't
know
again
what
9
the
aftertreatment
now
what
it
was.
But
the
numbers
­­

10
despite
what
David
Freeman
said,
the
numbers
were
11
non­
trivial.

12
MOBILE
SOURCE
CONTROL
DIVISION
CHIEF
CROSS:
The
13
staff
actually
had
a
very
hard
time
getting
hydrogen
data.

14
We
pursued
it
with
both
BMW
and
Ford,
which
are
the
ones
15
which
are
doing
development.

16
CHAIRPERSON
LLOYD:
Is
your
mike
on?

17
MOBILE
SOURCE
CONTROL
DIVISION
CHIEF
CROSS:
It
18
should
be.

19
I
have
the
wimpy
mic
of
the
day,
I
guess.

20
We
contacted
both
BMW
and
Ford,
which
have
21
development
programs
going
on
hydrogen
vehicles.
And
BMW
22
refused
to
provide
us
the
data,
saying
that
it
wasn't
23
representative
of
what
could
be
done
with
hydrogen.

24
And
Ford
provided
us
with
the
data,
and
it
was
25
not
impressive
when
you
look
at
the
LEV
brothers
emission
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
249
1
standards.
And
I
think
that
one
can
argue
that
they
can
2
do
better,
as
you
probably
hear.
But
I
think
the
issue
3
with
hydrogen
becomes
that
what
they
do
is
they
get
the
4
engines
­­
to
get
the
NOx
down
they
get
them
extremely
5
lean.
And
then
they
run
into
drivability
problems.

6
And
so
their
­­
they
have
a
different
combustion
7
regime
than
what
people
are
used
to
running
our
8
conventional
vehicles
in,
and
there's
more
development
9
work
that
may
need
to
be
done
there.
So
it's
not
a
slam
10
dunk
to
do
hydrogen,
because
if
you
want
­­
if
you
want
11
good
fuel
economy
and
good
emissions,
you
have
to
be
in
12
this
lean
regime.
And
you
have
fuel
storage
problems
13
because
hydrogen's
so
hard
to
store.
If
you
bring
it
down
14
to
the
technological
approach
we
all
know,
which
is
15
three­
way
catalysts,
then
you
consume
the
hydrogen
too
16
fast.
So
that
it's
not
going
to
be
just
ask­
for­
it
kind
17
of
technology,
we
don't
think.

18
And
there's
a
one­
pager
in
your
folder
discussing
19
the
numbers.

20
CHAIRPERSON
LLOYD:
Do
you
agree
with
that,
Dave?

21
MR.
HERMANCE:
I'd
have
to
suggest
that
I'd
have
22
to
find
somebody
else
in
the
company
to
respond.
I
23
haven't
done
any
hydrogen
development.
Sorry.

24
CHAIRPERSON
LLOYD:
Well,
Kelly's
coming
up.
So
25
I'm
sure
Kelly
will
have
the
answer
to
­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
250
1
BOARD
MEMBER
DeSAULNIER:
What's
he
driving?

2
CHAIRPERSON
LLOYD:
Ben
Knight,
Honda;
and
then
3
Kelly
Brown,
Ford.

4
And
then
we're
going
to
take
a
ten­
minute
break
5
for
the
court
report
before
we
get
into
additional
6
witnesses.

7
With
this
batch
we
will
finish
the
testimony
from
8
the
auto
manufacturers.

9
(
Thereupon
an
overhead
presentation
was
10
Presented
as
follows.)

11
MR.
KNIGHT:
I'm
Ben
Knight
with
Honda
R&
D
12
Americas.
On
behalf
of
Honda,
I
appreciate
this
13
opportunity
to
give
you
comments.
And
we've
also
14
submitted
written
comments.

15
Honda
has
demonstrated
a
longstanding
commitment
16
to
the
advancement
of
cleaner
technology
in
the
light­
duty
17
fleet.
This
includes
our
efforts
to
advance
battery
EV
18
technology,
near­
zero
emission
natural
gas
vehicles,

19
hybrid
electric
vehicles,
as
well
as
near­
zero
emission
20
gasoline
vehicles
like
the
Accord
PZEV.

21
In
addition,
we've
recently
certified
and
22
introduced
the
Honda
FCX
fuel
cell
vehicle
that's
now
23
seeing
daily
use
with
the
City
of
Los
Angeles.
So
when
we
24
talk
about
what
is
working
and
what
has
not
worked
and
25
what
pathways
can
be
effective
to
technology
advancement
PETERS
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1
goals
and
air
quality,
we
speak
from
real
experience
with
2
these
technologies.

3
We're
also
familiar
with
some
of
the
latest
4
ongoing
research
on
real­
world
emission
performance
of
5
near­
zero
emission
gasoline
vehicles.
Now,
these
vehicles
6
are
now
demonstrating
real­
world
emission
reductions
far
7
below
what
was
considered
possible
just
a
few
years
ago.

8
They
have
air
quality
impacts
that
are
similar
to
battery
9
electric
vehicles
when
you
take
into
account
upstream.

10
This
really
is
startling
news
and
very
positive
11
news.
And
clearly
this
is
the
fastest
and
most
effective
12
path
to
improve
air
quality.

13
We
also
actively
participate
in
the
California
14
Fuel
Cell
Partnership.
This
unique
partnership
promotes
15
technology
advancement,
cooperation
on
broad
issues
to
16
prepare
the
infrastructure
and
market,
and
facilitates
17
fleet
trials
of
vehicles
and
infrastructure
as
the
next
18
important
step.
Key
international
players,
OEMs,

19
component
suppliers,
and
energy
companies,
including
20
hydrogen
providers,
are
actively
participating
in
this
21
partnership
and
developing
the
pathway
towards
commercial
22
success.
It's
an
organization
that
is
one
of
champions.

23
It
has
been
working.
And
the
progress
is
worthy
of
your
24
respect.
In
my
career
I'm
seeing
better
results
from
this
25
partnership
in
success
than
most
any
other.

PETERS
SHORTHAND
REPORTING
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916)
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1
There's
not
been
a
lack
of
progress
on
technology
2
addressing
clean­
air
goals.
On
the
contrary,
the
options
3
in
past
cleaner
air
are
broader
and
more
successful
than
4
anticipated
in
the
original
ZEV
regulation.
This
has
been
5
reflected
in
changes
in
the
ZEV
Program.

6
Staff's
direction
as
developed
in
the
March
5th
7
regulatory
proposal
is
a
positive
direction.
More
8
effective
and
realistic
technologies
and
pathways
are
9
promoted.
Yet
further
ZEV
progress
through
the
10
demonstration
of
a
limited
number
of
zero
emission
fuel
11
cell
vehicles
and
advance
in
air
quality
goals
and
12
technology
pathways
through
the
promotion
of
near­
zero
13
emission
hybrid
EV's,
natural
gas
vehicles,
and
14
clean­
burning
gasoline
PZEVs.
These
are
technologies
and
15
directions
which
Honda
believes
are
worth
pursuing.

16
We
do
have
some
specific
comments
to
improve
the
17
regulation.
We
note
that
the
volume
of
AT
PZEVs
required
18
in
the
out­
years
grows
perhaps
unrealistically
large.

19
These
are
very
ambitious
numbers
for
products
whose
mass
20
market
consumer
acceptance
is
still
unclear.
Note
that
21
the
four­
percent
requirement
grows
rapidly
to
ten
percent,

22
and
the
credits
for
hybrids
decrease
over
time.

23
We
suggest
the
Board
ask
staff
to
reconsider
the
24
limited
and
declining
credit
values
or
add
a
review
25
perhaps
within
this
decade.

PETERS
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1
Second,
regarding
hydrogen
fuel
cell
vehicles.

2
There's
good
reason
why
staff's
plan
could
not
find
3
volumes
for
industry
for
2009.
It's
simply
premature
to
4
realistically
meaningfully
determine
these
volumes.
We
5
strongly
support
staff's
direction
to
leave
it
to
be
6
determined.
That's
not
zero.
It's
to
be
determined.
And
7
it's
not
clear
at
the
moment
exactly
how
fuel
cells
and
8
hydrogen
infrastructure
will
develop.
An
independent
9
panel
of
scientists
and
experts
can
help
determine
a
10
status
and
fairly
advise
the
Board
on
the
progress
and
11
effort
that
has
been
going
on.

12
A
third
positive
comment.
PZEVs
offer
truly
13
outstanding
emission
reductions.
Their
near­
zero
emission
14
performance
real­
world
use
is
being
confirmed
by
research
15
at
the
universities.
When
this
science­
based
assessment
16
is
taken
into
account,
PZEV
credit
values
may
be
at
least
17
0.5
credits.
This
may
be
justified
in
light
of
the
air
18
quality
impact
of
these
vehicles.
Board
should
encourage
19
staff
to
reconsider
these
credit
values
as
credible
data
20
as
provided
for
justification.
There's
a
full
spectrum
of
21
ZEV
technologies
now
that
can
be
studied.
We're
in
a
very
22
different
era
from
1990,
and
it's
very
exciting.

23
I
do
have
a
couple
slides
to
show
on
the
internal
24
combustion.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
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1
MR.
KNIGHT:
But
first
the
slide
shows
some
of
2
the
key
clean
air
technologies
Honda's
doing.
It
is
a
3
wide
spectrum.
All
of
these
vehicles
are
near­
zero
4
emission.
They're
PZEVs
or
SULEVs
pure
ZEVs.
And
there
5
has
been
a
synergy,
and
it's
helped
us
identify
pathways
6
that
work.

7
­­
o0o­­

8
In
the
next
couple
decades
if
we
want
to
make
9
rapid
improvements
in
air
quality
and,
frankly,
have
a
10
good
chance
to
be
further
validated
but
a
good
chance
of
11
meeting
air
quality
goals,
light­
duty
component
internal
12
combustion
engine
vehicles
need
to
play
a
role.

13
­­
o0o­­

14
MR.
KNIGHT:
We've
continued
our
investments
here
15
and
address
cold
start
emissions,
which
have
always
been
16
thought
to
be
the
most
difficult
of
the
problem.
But
now
17
there's
some
real
solutions
that
are
very
effective.

18
Catalyst
deficiencies
are
approaching
100
percent.
And
19
this
is
over
the
useful
life,
of
the
full
life
of
the
20
vehicle.

21
Robust
real­
world
control.
What's
the
real­
world
22
emissions
like?
What
if
the
air
conditioning's
on
or
you
23
go
on
an
upgrade,
you
go
uphill,
you
accelerate
rapidly?

24
These
are
real
issues,
but
again
we're
seeing
dramatic
25
excellent
results
and
very
durable
systems
that
are
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1
warranteed
for
150,000
miles.

2
­­
o0o­­

3
MR.
KNIGHT:
One
of
the
ways
we're
confirming
4
this
is
through
on­
board
instrumentation.
We've
done
this
5
both
at
Honda,
and
the
universities
our
in
a
third
6
generation
of
this,
where
they're
using
equipment
that
can
7
measure
less
than
a
part
per
million
at
a
part
per
billion
8
level.
They
can
measure
at
ambient
levels
even
if
you
9
drive
along
the
seashore
with
an
ocean
breeze
passing,
you
10
know,
from
the
ocean
into
the
city.
And
they
can
measure
11
that
ambient
level.

12
­­
o0o­­

13
MR.
KNIGHT:
There's
a
slide
showing
an
Accord
14
with
­­
driven
for
one
hour
on­
road,
real­
world,
air
15
conditioning
on,
hills,
on­
ramps,
freeway
on­
ramps,

16
high­
speed
cruising,
whatever
the
traffic
demanded.
And
17
what's
startling
is
the
ambient
level
of
hydrocarbons
is
18
in
red
and
the
car
is
shown
in
green.
And
this
is
one
19
hour
of
driving
and
measurement.

20
CHAIRPERSON
LLOYD:
Does
this
have
the
Premier
21
catalyst?

22
MR.
KNIGHT:
This
is
the
exhaust.
And
Premier
is
23
another
way
to
even
further
enhance
the
performance
of
24
these
vehicles
toward
air
quality.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
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916)
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1
MR.
KNIGHT:
Let
me
expand
a
portion
of
this
in
2
the
next
slide
just
to
show
you
how
the
car
is
performing
3
right
at
zero
even
on
transients.

4
­­
o0o­­

5
MR.
KNIGHT:
Dr.
Lloyd,
I
thought
I
would
stop
6
the
slides
there.
But
actually
I'd
love
to
give
equal
7
time
to
ZEVs
and
fuel
cell
vehicles,
if
you
indulge
me.

8
CHAIRPERSON
LLOYD:
I
will.

9
MR.
KNIGHT:
So
I'll
skip
rapidly
through
10
hybrids.
I'd
like
to
give
all
these
equal
time
because
we
11
have
equal
enthusiasm
within
Honda.

12
Hybrid
vehicles
really
are
advancing
the
electric
13
technologies,
motor,
transmission,
power
electronics,
and
14
electrical
energy
storage
on
a
right
battery
unit
in
order
15
control.
Very
high
tech
cars
that
we
try
to
make
16
transparent
to
the
user.

17
­­
o0o­­

18
MR.
KNIGHT:
Honda
has
two
of
these
now
in
19
service.
And
if
the
Insight
showed
the
public
that
these
20
can
be
exciting
vehicles
with
tremendous
performance
and
21
air
quality
value,
the
civic
five­
passenger
car
broadens
22
that
market.

23
­­
o0o­­

24
MR.
KNIGHT:
Motor
­­
is
the
highest
density
25
motor
in
the
world,
very
high
torque,
very
effective
for
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1
regen
and
propulsion.

2
­­
o0o­­

3
MR.
KNIGHT:
And
different
­­
on
the
second
point
4
here
I
do
want
to
say
that
different
than
generally
5
anticipated,
the
emission
performance
is
largely
6
independent
of
the
hybridization.
And
I
think
you
can
see
7
that
from
the
earlier
slide
on
an
Accord.

8
­­
o0o­­

9
MR.
KNIGHT:
Key
issue
with
the
hybrids
right
now
10
is
seeing
larger
market
penetration
of
value,
of
cost
11
pricing
to
the
customer.
That'll
be
the
key
to
advancing
12
the
market.
And
right
now
it
is
­­
they
are
expensive.

13
They
carry
a
premium
price.

14
­­
o0o­­

15
MR.
KNIGHT:
This
is
Honda's
fuel
cell
vehicle
16
that
is
now
with
the
City
of
Los
Angeles.
It's
the
first
17
car
in
the
world
that's
been
certified
and
put
into
18
commercial
use.
We've
had
to
go
through
all
the
hoops
at
19
EPA
and
Department
of
Energy,
and
were
tested
there
in
20
Michigan
by
EPA
where
they
gave
it
fuel
efficient
­­
well,

21
it
has
a
window
label
just
like
a
conventional
car
because
22
it
went
through
the
full
process.

23
­­
o0o­­

24
MR.
KNIGHT:
We
had
a
great
event
launching
it
25
with
L.
A.
City
on
December
2nd.
It
was
well
attended.

PETERS
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1
­­
o0o­­

2
MR.
KNIGHT:
Just
to
go
back
to
that.
The
mayor
3
and
his
staff
is
driving
the
car
on
a
daily
basis,
as
well
4
as
other
people
who
have
access.
We'll
have
five
cars
5
there
by
the
end
of
June.
Just
part
of
their
fleet.

6
­­
o0o­­

7
MR.
KNIGHT:
And
this
is
the
layout
of
the
car.

8
It's
an
electric
vehicle.
The
motor
about
the
size
of
a
9
basketball
now.
And
everything's
under
the
floor.
And
10
the
hydrogen
tanks
are
well
packaged.
And
we're
getting
11
good
mileage,
serviceable
range.
This
is
double
the
range
12
we
ever
had
with
the
electric
vehicle.
We
can
recharge
in
13
four
or
five
minutes.
So
it's
very
exciting
to
keep
14
pushing
this
technology
forward
and
make
it
practical
and
15
affordable,
which
is
going
to
take
a
lot
more
time.

16
­­
o0o­­

17
MR.
KNIGHT:
We're
also
using
an
ultracapacitor
18
on
board
to
extend
the
range,
increase
the
performance.

19
And
this
substitute
for
a
battery.
It
has
higher
20
efficiency
and
higher
output
than
the
battery,
so
it's
21
perfect
for
this
application.
I
just
want
to
point
out
22
that
there's
several
pathways
to
our
objectives.
And
we
23
think
this
technology's
a
very
interesting
one,
so
we'll
24
keep
working
with
it.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
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1
MR.
KNIGHT:
And,
finally,
the
approach
is
so
2
important.
And
the
fuel
cell
partnership
has
been
good
3
for
us
and
been
very
motivating
to
Honda.
And
it's
great
4
to
have
top
champions
of
the
world
at
one
place
and
have
5
thorough
discussions
for
moving
on
to
real­
world
6
applications.
Infrastructure
should
be
matched
to
these
7
fuel
cell
vehicles
carefully
as
we
progress
and
evolve
on
8
the
technology
and
issues.

9
­­
o0o­­

10
MR.
KNIGHT:
I
also
want
to
add
that
natural
gas
11
vehicles
are
even
cleaner
than
the
internal
combustion
12
gasoline
car
upstream.
It's
not
exotic.
It
doesn't
have
13
a
great
image
to
people.
But
from
an
air
quality
14
viewpoint,
it's
tremendous.
The
market's
very
limited.

15
It
relates
to
infrastructure.
Difficult
issues
even
for
16
natural
gas,
which
is
economically
well
priced.
Honda
is
17
working
on
that
with
other
parties
in
North
America.
In
18
fact,
some
ways,
depending
on
the
boundaries
of
the
19
analysis,
if
you
do
a
well­
to­
wheel
analysis,
the
natural
20
gas
vehicle
exceeds
or
maybe
farther
exceeds
the
battery
21
electric
unit's
air
quality
value.
So
ultimately
22
performance­
based
evolution
of
ZEV
policy
more
fairly
23
recognize
the
real
contributions
of
these
vehicles.

24
In
summary,
staff's
ZEV
Program
direction
25
emphasizing
or
creating
optional
pathways
based
on
fuel
PETERS
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1
cell
vehicle
technology
advancement
and
demonstration
and
2
near­
zero
emission
hybrid
EV's,
natural
gas
vehicles,
and
3
near­
zero
emission
gasoline
PZEVs
more
closely
matches
the
4
clean
technologies
and
pathways
that
are
more
effective
5
and
realistic
than
achieving
ZEV
Program
goals.

6
Staff's
left
a
placeholder
for
fuel
cell
volumes
7
in
2009
and
beyond,
and
that's
appropriate.
Insertion
of
8
an
arbitrary
vehicle
number
at
this
time
can
be
very
9
counterproductive
to
the
advancement
of
the
technology.

10
So
leave
this
to
be
determined.

11
Honda
has
concern
for
the
post­
2010
ramp­
ups.

12
And
we
want
to
nurture
these
markets
carefully,
and
so
13
reviews
I
think
make
a
lot
sense
and
we
forward
to
that
in
14
the
future.

15
Based
on
this,
we
expect
CARB's
ZEV
Program
to
16
move
toward
performance
matrix
for
credits
as
data
becomes
17
available.
And
Market
incentives
encourage
the
advanced
18
technology
vehicles.
They
can
be
very
effective.
We
all
19
want
to
see
those
succeed
in
the
marketplace.

20
Thank
you.

21
CHAIRPERSON
LLOYD:
Thank
you,
Ben,
for
you
and
22
your
team's
leadership
in
many
of
these
areas
in
the
full
23
spectrum
of
advanced
technology.
Again,
I
think
you
do
a
24
great
job
there.

25
And
with
that,
Mr.
McKinnon.

PETERS
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1
And
then
I
have
a
couple
of
questions
too.

2
BOARD
MEMBER
McKINNON:
I'm
going
to
ask
you
a
3
question
that's
redundant
to
each
auto
company.
That
is,

4
what
are
your
plans
with
respect
to
the
vehicles
when
you
5
bring
them
back
from
lease?
Are
you
willing
to
re­
lease
6
or
sell
them
to
the
lessees?

7
MR.
KNIGHT:
We
certainly
went
beyond
the
MOA
8
program.
We
intended
a
real­
world
test,
went
all
out
on
9
that
program.
And
when
it
was
concluded
we
continued
­­

10
we
set
up
a
re­
lease
program
even
before
there
were
11
credits.
So
we've
been
extending
the
lease
term
for
one
12
or
two
years
­­
actually
more
than
two
years.
And
so
we
13
still
have
over
100
vehicles
on
the
road.
There
are
14
technical
issues
that
limit
the
life
of
those
vehicles,

15
mainly
related
to
battery
performance.
But
we're
so
far
16
keeping
them
on
the
road.
And
of
course
there
are
some
17
credits
for
doing
that
now.

18
BOARD
MEMBER
McKINNON:
Thanks.

19
CHAIRPERSON
LLOYD:
Could
I
also
ask,
Ben,
two
of
20
the
questions
I
asked
Dave.

21
How
do
you
see
plug­
in
hybrids
and
also
how
do
22
you
see
hydrogen
IC
engines?

23
MR.
KNIGHT:
You
know,
plug­
in
hybrids
has
been
24
an
exciting
concept.
But
I
think
we've
learned
a
lot
by
25
developing
both
battery
EV
and
Hybrids
in
many
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
262
1
configurations.
And
the
plug­
in
hybrid
actually
if
you
2
wanted
to
run
all­
electric
range
you
need
about
a
full
3
electric
motor,
a
full
size
battery
like
a
battery
EV.

4
Even
on
our
EV
we
had
a
25­
percent
power­
down
switch.

5
Even
our
customers
mostly
did
not
want
to
use
that.
It
6
didn't
have
enough
acceleration
in
so
many
normal
traffic
7
situations
getting
on
freeways.
And
so
that
plug­
in
8
hybrid
even
with
a
large
electric
motor
is
going
to
kick
9
on
the
engine,
you're
going
to
have
a
cold­
start
emission.

10
So,
first,
I
don't
think
the
emission
performance
11
is
necessarily
better
or
different
because
that's
going
to
12
kick
on
on
every
on­
ramp,
you
know,
every
time
you
get
13
into
the
USO6
kind
of
modes.
A
little
bit
higher
speeds
14
on
the
freeway,
very
normal
speeds
or
accelerations.

15
Secondly,
to
get
battery
life
­­
we
can
do
it
on
16
a
hybrid
when
we
just
tap
the
sweet
spot
of
the
battery.

17
And
that's
what
we're
doing
on
our
hybrids,
and
Toyota's
18
doing.
Then
you
can
get
a
very
long
battery
life.
It
19
works
well.
But
you
get
high
chemical
stress
when
you
20
bring
it
up
to
full
charge
or
deeply
discharge
it.
And
21
that
you
need
to
do
everyday.
So
it's
really
an
issue
of
22
battery
technology
not
being
there
for
that
type
of
23
configuration.

24
CHAIRPERSON
LLOYD:
Hydrogen
IC?

25
MR.
KNIGHT:
Hydrogen
ICE.
You
know,
if
we
had
a
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
263
1
perfect
renewable
grid
it
would
be
very
exciting
to
work
2
on
that.
Right
now,
the
environmental
performance
of
3
those
vehicles
I
think
does
not
compare
to
our
natural
gas
4
vehicle.
So
we're
using
natural
gas
directly
in
the
5
vehicle.
And
near­
zero
emissions,
zero
toxics,
zero
6
particulate
matter.
Just
absolutely
starting
emissions
7
performance,
upstream
and
downstream.

8
And
with
a
hydrogen
vehicle
range
gets
much
9
shorter
because
the
density
is
a
third.
And
that's
why
10
hydrogen
is
a
great
pick
for
the
fuel
cell.
They
really
11
go
together.
We've
got
in
our
car
today
2
1/
2
times
the
12
efficiency
of
a
conventional
vehicle.
So
we're
getting
up
13
to
a
serviceable
range,
at
least
for
the
City
of
L.
A.

14
Maybe
not
for
consumers
yet.

15
And
so
I
think
that
you
­­
one
concept
is
to
16
promote
the
hydrogen
internal
combustion
vehicles
as
if
17
they'll
pull
through
the
infrastructure.
But
I
think
from
18
what
we
know
today,
it
makes
much
more
sense
to
work
on
19
the
infrastructure
technologies
options.
They're
so
20
exciting.
Work
on
that
in
tandem
with
the
fuel
cell
21
vehicles,
match
them
up,
and
step
by
step
decide
what
22
halfway
really
makes
sense.

23
So
I
would
just
urge
a
little
caution
there.

24
CHAIRPERSON
LLOYD:
What's
your
annual
sales
of
25
natural
gas
vehicles
in
California?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
264
1
MR.
KNIGHT:
In
California,
well,
we
work
hard
­­

2
it's
a
couple
hundred
vehicles
per
year.
And
we're
going
3
to
try
to
increase
that
with
the
home
refueling
option
in
4
the
future.
We
think
that
could
bring
alternative
fuel
5
like
natural
gas
to
a
consumer
market,
have
a
new
6
convenience.

7
CHAIRPERSON
LLOYD:
And
your
sales
of
EVs
when
8
you
had
them
there?

9
MR.
KNIGHT:
The
sales
of
EV'S,
to
the
consumer's
10
side
we're
less
than
100
a
year.
And
we
had
a
11
full­
fledged
program
for
two
full
years
with
newspaper
ads
12
in
all
the
major
California
cities,
magazines
for
two,

13
three
full
years
coming
out
every
week.
Direct
mail
14
campaigns.
And
we
saw
so
few
customers.

15
CHAIRPERSON
LLOYD:
Dr.
Burke.

16
BOARD
MEMBER
BURKE:
Everybody
knows
David
17
Freeman's
a
real
close
personal
friend
of
mine.
But
I
18
have
to
take
unabridged
with
his
statement
"
not
in
my
19
lifetime."
Well,
when
you're
77,
that's
a
pretty
safe
20
statement
to
make
about
anything.

21
(
Laughter.)

22
BOARD
MEMBER
BURKE:
I
had
the
good
fortune
23
wearing
my
South
Coast
Air
Quality
Management
hat
to
go
to
24
the
presentation
at
the
city
hall
for
the
FCX.
It
25
obviously
created
a
lot
of
interest
and
curiosity
of
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
265
1
first
commercially
used
fuel
cell
car
in
California.

2
But
my
concern
was
durability.
And
my
concern
3
was,
you
know,
did
it
really
have
a
place
in
real
life
4
market
today.

5
So
what
I
did
was
­­
last
Wednesday
I
had
one
of
6
my
staff
­­
because
I
didn't
think
that
if
I
called,
I'd
7
get
the
real
answer.
I
had
one
of
my
staff
call
the
8
maintenance
department
of
the
City
of
Los
Angeles
and
ask
9
the
maintenance
director
what
he
thought
of
the
FCX.
And
10
he
said,
"
There's
only
one
problem."
And
the
guy
said,

11
"
Well,
what
was
that?"
He
says,
"
I
don't
have
a
hundred
12
of
them."
He
said,
"
This
thing"
­­
he
said,
"
This
is
it."

13
He
said,
"
If
I
had
a
hundred
of
these"
­­
he
said,
"
My
14
problem
is
keeping
the
councilmen
off
me
because
they
want
15
them."
Well,
it
wasn't
five
minutes
later
that
my
phone
16
didn't
ring.
It
was
one
of
the
city
councilmen
calling,

17
he
says,
"
Look,
man,
I
want
to
get
one
of
those
fuel
cell
18
cars.
I
want
you
to
call
Ben
Knight
out
at
Honda."
So
19
thank
God,
Ben
wasn't
at
his
desk.

20
(
Laughter.)

21
BOARD
MEMBER
BURKE:
So
I
left
the
councilman's
22
name
and
phone
number
in
his
voice
mail
and
told
him
to
23
contact
him.

24
But
I
just
think
that
Honda's
work
on
this
fuel
25
cell
thing
has
been
phenomenal.
And
anybody
who
says
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
266
1
fuel
cells
can't
work
in
cars
needs
to
go
see
this
vehicle
2
and
ride
in
it.

3
CHAIRPERSON
LLOYD:
All
right.
I
think
also
last
4
night
a
couple
of
the
Board
members
had
a
chance
to
go
out
5
to
the
partnership.
And
we'll
probably
get
into
that.

6
After
you
drive
some
of
those
vehicles
­­
and
they're
all
7
excellent
vehicles.

8
So
we
appreciate
it.
And
thank
you
very
much.

9
Any
other
questions
from
the
Board?

10
Thanks,
Ben.

11
Kelly,
before
the
break.
And,
by
the
way,
you
12
really
didn't
need
the
armed
guard
to
come
today.

13
MR.
BROWN:
It
may
be
too
early
to
tell,
Mr.

14
Chairman.

15
(
Laughter.)

16
BOARD
MEMBER
DeSAULNIER:
Wait
until
we
make
our
17
decision.

18
MR.
BROWN:
I
asked
them
who
called
them
in
19
actually.

20
BOARD
MEMBER
McKINNON:
He
works
for
the
great
21
State
of
California,
so
we're
clear
that
he's
one
of
us.

22
I
play
ball
at
his
academy
every
Wednesday
night.

23
So
we
welcome
him
here.
And
I'm
sure
after
he's
heard
us
24
all
get
miserable
about,
you
know,
what
little
quantities
25
when
he's
out
doing
patrol
and
he
sees
a
car
smoking
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
267
1
spewing,
remember
us.

2
MR.
BROWN:
For
the
record,
my
name's
Kelly
3
Brown.
I'm
Director
of
Vehicle
Environmental
Engineering
4
for
Ford
Motor
Company.

5
I
left
the
products
lights
at
home
this
time.

6
The
last
time
I
remember,
Dr.
Lloyd,
you
told
me
not
to
7
turn
it
into
a
sales
pitch.

8
CHAIRPERSON
LLOYD:
Well,
if
you're
still
selling
9
the
city
car
and
whatnot,
we're
okay.

10
(
Laughter.)

11
MR.
BROWN:
Just
as
a
little
background.
I
have
12
a
couple
of
background
slides.
And
then
I'll
get
into
the
13
meat.

14
There
have
been
a
lot
of
air
quality
15
improvements.
We
all
know
this
but
tend
to
forget
it.

16
The
South
Coast,
for
example,
has
cleaned
up
dramatically
17
in
the
last
20
years
or
so.
Still
isn't
down
to
where
it
18
needs
to
be,
but
it's
a
dramatic
improvement.
And
the
19
reason
I
bring
that
up
is
we
also
sometimes
forget
that
20
our
industry
played
a
part
in
that.

21
­­
o0o­­

22
MR.
BROWN:
Occasionally,
we
hear
how
much
the
23
stationary
source
has
done.
And
I
don't
think
people
24
really
realize
how
much
our
product
as
an
industry,
not
25
just
my
company
but
my
competitor's
too,
have
done.
If
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
268
1
you
look
at
the
chart
on
the
left
to
see
where
we've
come
2
from
uncontrolled
just
on
hydrocarbons,
for
example,
and
3
then
moving
to
the
right.
I
stopped
it
at
1993,
because
4
if
you
try
and
put
it
in
there,
you
can't
find
it.
So
we
5
blew
that
up
on
the
right
as
to
what
happened
from
'
93
on.

6
And
as
you
move
out
to
the
right
­­
and
I
think
I
7
was
probably
the
guy
that
Chuck
Shulock
was
talking
about,

8
the
PZEV
guy.
In
fact,
I
thought
at
the
beginning,
Mr.

9
Chairman,
you
said
give
PZEVs
a
chance.
Was
that
what
you
10
said?

11
(
Laughter.)

12
CHAIRPERSON
LLOYD:
That's
good.

13
MR.
BROWN:
I'm
the
type
of
guy
that
thinks
that
14
PZEVs
are
kind
of
the
Rodney
Dangerfield
of
our
15
profession.

16
If
you
look
there
just
on
hydrocarbons
­­
and
17
this
isn't
the
best
example
for
a
PZEV,
if
you
look
at
the
18
hydrocarbons
on
the
PZEV
versus
a
ZEV
with
the
powerplant
19
emissions,
You
can
see
it's
pretty
darn
close.
So
PZEVs
20
aren't
something
to
wrap
the
fish
in.
They're
good
21
products.

22
­­
o0o­­

23
MR.
BROWN:
Mrs.
Ford
was
insistent
on
getting
an
24
electric
vehicle,
even
though
it
was
competitive
because
25
she
didn't
like
internal
combustion
engines.
But
she
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
269
1
bought
from
a
family
friend,
Thomas
Edison.
And
this
is
2
her
car
up
here.
And
this
is
a
truly
ZEV,
because
they
3
lived
on
the
Rouge
River
and
he
put
his
own
powerplant
in.

4
He
dammed
the
river,
and
you
didn't
need
permits
then.

5
And
so
this
is
truly
a
zero
emission
vehicle.

6
And
I
put
in
the
charging
station
on
the
right
just
to
7
show
that
it
doesn't
conform
to
the
CARB
standards.

8
(
Laughter.)

9
MR.
BROWN:
But
the
bottom
line
of
the
10
presentation
I
really
think
the
staff
as
much
as
I
like
to
11
get
my
licks
in,
just
like
everybody
else
who
piles
on
12
with
them,
did
a
good
job
of
trying
to
not
please
13
everybody,
and
sometimes
you
don't
please
anybody.

14
But
in
the
near
term
the
requirements
are
15
achievable,
at
least
out
through
2008.
We
have
plans
in
16
place
and
we
can
deliver
that.

17
The
longer
term
2009
and
beyond
there's
some
18
pieces
of
that
that
aren't
sustainable.
And
the
minimum
19
ZEV
requirement
needs
some
evaluation.
I'm
going
to
go
20
into
each
of
these
in
a
little
more
detail.

21
­­
o0o­­

22
MR.
BROWN:
The
longer
term
requirement
I
thin
a
23
lot
of
you
have
heard
me
say
this
before,
if
you
look
at
24
the
curve
on
the
right,
a
lot
of
this
happened
after
the
25
last
board
meeting,
in
the
11th
hour.
There
was
confusion
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
270
1
over
adding
more
trucks.

2
This
is
a
manufacturer
that
looks
an
awful
lot
3
like
my
company,
and
that's
just
the
AT
PZEV
and
PZEV
4
requirement
ramp
up
on
the
right.
And
the
reasons
for
the
5
ramp
up
are
shown
on
the
left.
First,
the
mandating
6
increases
from
10
percent
to
16
percent,
inclusion
of
7
light
trucks
which,
in
my
company's
case,
about
doubles
8
the
volume.
Collection
of
manufacturers.
We
just
9
happened
to
have
the
fortune
to
buy
up
a
bunch
companies
10
recently.

11
And
while
all
this
is
happening,
it's
almost
12
like
the
perfect
storm,
the
vehicle
credits
per
unit
are
13
dropping
down.
They
phase
out.
So
as
the
demand
for
14
credits
goes
up,
the
vehicle
credits
decrease.

15
And
the
last
point
as
some
in,
I
think,
the
16
public
sector
once
we
referred
to
as
the
credit
glut.
By
17
2008,
most
of
the
credit
glut,
if
there
is
one,
should
be
18
done.

19
­­
o0o­­

20
MR.
BROWN:
First
the
AT
PZEV
volumes.
The
long
21
term
AT
PZEV
volumes
don't
reflect
a
market
demand.
And
I
22
think
I
can
sea
how
this
happened.
If
you
keep
10
percent
23
mandate
you
cap
PZEVs
at
6
percent,
and
you
drop
the
pure
24
ZEV
to
zero
or
near
zero,
that
only
leaves
the
silver
to
25
grow.
I
mean
It's
a
zero
sum
game.

PETERS
SHORTHAND
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1
And
in
retrospect,
we
were
a
little
surprised
as
2
we
ran
the
out
years
and
saw
how
big
that
got.
So
I
don't
3
think
that
was
done
with
any
great
malice
in
mind.
I
4
think
it
was
just
an
artifact
of
changing
ga
lot
of
5
numbers.

6
But
one
way
we
can
handle
that
is
PZEVs
could
7
handle
greater
than
6
percent.
It's
something
that
we
8
haven't
solved
in
all
our
products,
but
it's
something,

9
again,
that's
very
close
to
ZEV,
it's
darn
near
a
ZEV.

10
It
is
from
an
emissions
standpoint,
it's
dead
on
11
equal
to
an
AT
PZEV.
So
there's
no
­­
if
you
let
more
12
PZEVs
satisfy
the
AT
PZEV
category,
you
don't
lose
13
anything
from
an
environmental
basis.
They're
dead
on
14
even.
They're
both
PZEVs.

15
The
PZEV
standards,
again,
were
set
to
16
approximate
the
powerplant
emissions
to
recharge
a
ZEV.

17
And
I'm
not
saying
here
to
give
up
on
the
­­
you
have
to
18
give
up
on
the
zero
program.
All,
I'm
saying
is
in
the
3
19
binning
you've
got
you
can
do
some
reshuffling
and
make
20
the
program
more
sustainable,
and
you
don't
have
to
give
21
up
on
your
principles.

22
The
long­
term
requirement,
this
is
where
it
gets
23
a
little
tougher.
We
think
it
makes
sense
to
allow
24
greater
flexibility
to
use
mixes
of
ZEVs,
AT
PZEVs'
and
25
PZEVs.
Part
of
the
reason
the
staff
had
such
a
hard
time
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
trying
to
figure
out
what
to
do,
we
in
industry
tried
to
2
see
if
we
could
come
to
one
mind
to
make
it
simpler
to
3
tell
you
what
we
want.

4
And
the
companies'
positions
are
so
different
5
that
there's
no
one
scheme
that
fits
all
companies.
And
I
6
guess
that's
good
news
that
we
are
competing.
And
when
7
you're
in
small
niche
markets,
when
everybody
piles
into
8
one
area,
we've
seen
what
that
does,
it
destroys
the
9
product.
Because
we
all
end
up
with
fire
sales,
giving
10
them
away
and
it
damages
the
credibility
of
the
product.

11
­­
o0o­­

12
MR
BROWN:
The
minimum
ZEV
requirement.
Here's
13
where
we
get
to
the
controversial
piece
and
you're
all
14
starting
to
smile
or
frown.
We
think
the
staff
has
taken
15
a
correct
approach.
And
I
tried
putting
your
hat
on
to
16
think
of
how
I'd
deal
with
this
too.

17
It's
too
difficult
to
determine
how
many
ZEVs
18
make
sense,
especially
they're
bound
to
be
fuel
cells
I
19
think,
in
the
2009
and
beyond
period.
We
support
the
20
expert
review
panel.
We
also
think
that
that
panel
and
21
the
staff
and
the
Board
can
make
use
of
the
fuel
cell
22
partnership
as
input
to
learn,
because
we're
going
to
be
23
making
this
up
as
we
go
along.
And
this
would
avoid
24
having
you
pull
a
number
out
of
the
air
and
running
the
25
risk
that
in
all
likelihood
unless
you
were
very
lucky,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
it's
going
to
be
wrong
and
we're
going
to
have
to
do
2
something
again
in
a
few
months.

3
The
requirements
in
2009
ought
to
be
based
on
the
4
conclusions
of
that
panel,
but
I'm
not
suggesting
you
5
abdicate
your
authority
either
to
the
panel,
the
process.

6
And
I
think
this
is
what
staff
envisioned,
is
to
include
a
7
to­
be­
determined
in
the
ZEV
revisions.

8
I
think
a
lot
of
people
read
the
2009
and
beyond
9
as
zero,
but
I
don't
think
that's
what
the
staff
10
envisioned.
I
read
it
as
to­
be­
determined,
it's
a
number
11
to
be
set
later.
The
expert
staff
would
do
the
study.

12
And
I
think
the
battery
panel
was
probably
one
of
the
13
better
examples
of
a
credible,
independent
review.
The
14
battery
panel,
I
think,
was
very
thoughtful
and
pretty
15
honest
on
both
sides.

16
The
staff
would
then
consider
the
input
from
the
17
review.
They'd
obviously
put
their
own
input
to
it,
take
18
the
­­
but
not
necessarily
be
bound
to
take
their
19
conclusions
and
recommendations.
And
then
again
the
staff
20
would
make
recommendations
to
the
Board,
and
you've
never
21
been
shy
if
you
disagree
to
say
so.

22
I
think
that's
a
good
process
and
it
sends
the
23
right
message
to
all
the
parties.
If
you
pick
a
number
24
out
of
the
air,
as
a
company,
the
senior
management
of
a
25
company
is
it's
not
their
money,
it's
stockholder's
money.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
And
if
they
know
it's
just
a
number
that's
picked
out
of
2
the
air,
and
it
looks
unreasonable
and
it's
probably
going
3
to
be
changed,
they
shouldn't
waste
a
lot
of
stockholder's
4
money
shooting
for
that
number,
they've
got
to
wait
and
5
see
what
the
real
number
is
going
to
be.

6
Not
because
they're
evil
pull,
but
because
they
7
have
no
other
choice.
If
there's
a
reasoned
number
that
8
comes
out
of
a
good
process,
and
it's
a
fair
number,

9
they're
going
to
shoot
for
it
and
they're
going
to
compete
10
hard
against
the
competitors.

11
It
also
sends
the
right
message,
I
think,
to
the
12
suppliers.
If
you
tell
somebody
in
this
business
that
13
even
if
you
don't
improve
your
product
and
the
14
improvements
we
need
in
fuel
cells
are
to
get
­­
mainly
to
15
get
the
cost
down.
It's
manufacturing
improvements
and
16
some
design
improvements
to
get
the
cost
down.
If
you
17
send
a
signal
to
the
supplier
community
that
no
matter
18
what
do
over
the
next
few
years,
these
guys
are
going
to
19
have
buy
them
and
they're
going
to
have
to
buy
them
on
20
your
price
and
terms,
it
doesn't
give
them
an
incentive
to
21
be
hungry.
And
right
now,
we
want
them
to
be
hungry
and
22
working
hard
and
to
see
their
future
is
linked
with
ours
23
in
trying
to
solve
the
open
issues.

24
So
sometimes
the
message
you
send
isn't
the
25
message
that's
received.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
With
that
I'll
take
some
questions,
including
2
hydrogen
questions.

3
CHAIRPERSON
LLOYD:
Thanks
very
much,
Kelly.

4
Those
are
very
constructive
comments
there.

5
Questions
from
my
colleagues?

6
Mr.
Calhoun.

7
BOARD
MEMBER
CALHOUN:
If
I
were
to
summarize
8
your
testimony,
Kelly,
I
would,
in
effect,
say
that
the
9
alternative
compliance
step
that's
currently
allowed
is
10
the
best
of
the
two
options
that
are
available
to
you;
is
11
that
correct?

12
MR
BROWN:
I'll
make
that
decision
when
we're
13
done,
and
to
see
what
all
the
requirements
are
including
14
the
out
years.
And
then
we'll
make
a
decision
as
to
which
15
path
we
can
go
down.

16
Actually,
if
it
went
as
currently
written,
we
17
could
go
either
way.

18
BOARD
MEMBER
CALHOUN:
Thank
you.

19
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

20
BOARD
MEMBER
McKINNON:
Yeah.
I
have
a
little
21
bit
of
trouble
understanding
the
logic
that
a
22
stockholder's
investment,
that
officers
of
a
company
won't
23
invest
stockholder's
money
in
development
if
we
put
a
24
number.
That
somehow
to­
be­
determined
would
work
better.

25
Because
frankly
to­
be­
determined
means
I
don't
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
invest
until
it's
determined.
You
understand
what
I'm
2
saying.

3
MR.
BROWN:
Yeah,
I'm
not
talking
about
the
4
investment.
The
investment
if
going
to
go
on
no
matter
5
what
you
do
here.
Even
if
you
wiped
it
out,
our
6
investment
is
going
to
go
on.

7
BOARD
MEMBER
McKINNON:
For
competitive.

8
MR.
BROWN:
Yeah.
I'm
talking
about
putting
9
programs
in
place
to
try
and
meet
a
number.
If
you
just
10
pick
a
number
out
of
the
air,
and
people
know
that
it's
a
11
number
that's
picked
out
of
the
air,
you
have
to
spend
a
12
lot
of
money
to
hit
that
number.
And
if
you
think,
after
13
you
spend
the
money,
there's
good
reason
to
believe
that
14
you
probably
did
the
wrong
program,
because
that
number
15
isn't
real
you
wouldn't
do
that.

16
BOARD
MEMBER
McKINNON:
Okay,
well,
I
guess,
you
17
know,
something
I
tossed
out
to
the
industry
the
other
18
day,
and
we've
seen
the
Department
of
Energy
steps,
the
19
sort
of
steps,
is
that
somewhere
along
the
line
here
we
20
need
to
come
up
with
a
rational
number
for
those
steps,

21
and
a
date
that
has
some
reasonable
rational
place,
and
22
then
think
about
someway,
if
it
doesn't
work,
that
­­
if
23
there's
some
failure
in
the
development
of
technology,

24
then,
of
course,
we
have
a
discussion.

25
So
I'm
really
clear
about
what
sort
of
my
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
fundamental
disagreement
is,
is
I
think
if
we
say
2
to­
be­
determined,
we
may
get
sort
of
the
U.
S.
fuel
cell
3
development
stuff
going
on
and
the
partnership
and
we
may
4
have
really
small
quantities.
And
I
that's
a
real
5
different
thing
than
getting
to
commercialize,
you
know,

6
people
buy
them
product.

7
And
I
think
until
we
push
numbers,
we
don't
head
8
there.
And
so
we
disagree
on
that.

9
But
All
I'm
asking
is
help
us
with
rational
10
numbers.
If
we're
out
of
line,
and
if
we're
way
out
of
11
line,
then
talk
to
us
about
that.
And
I
think
there's
12
going
to
be
numbers
coming
up
as
the
day
goes
on,
and
you
13
know
we
do
respect
your
opinion
about
it.

14
MR.
BROWN:
And
not
to
be
repetitive,
but
the
15
reason
we
suggested
the
independent
panel
approach
is,

16
one,
right
now,
I
don't
know
enough
to
give
you
numbers.

17
We
could,
you
know,
pick
a
number
out
of
the
air.
I
don't
18
think
anybody
does,
to
be
honest
with
you.
We
have
our
19
first
vehicles
that
are
just
now
being
used.

20
The
way
you
normally
do
a
development
program
and
21
I
think
if
you
heard
a
little
bit
of
this
in
the
Toyota
22
testimony
too,
you
put
the
first
sets
of
vehicles
out
and
23
you
learn
what
you've
got
to
learn.
And
then
you
figure
24
out
what
do
we
do
for
the
next
generation.
And
then
how
25
many
of
those
do
we
need
in
order
to
evaluate
that
group.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
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1
That
hasn't
been
done
yet.
That,
if
we
go
2
through
the
process
of
getting
the
feedback
back
from
the
3
early
vehicles,
go
through
the
independent
panels
so
that
4
people
don't
see
that
it's
just
the
auto
industry
putting
5
the
input
in
and
come
back
with
the
numbers,
I
agree
with
6
you.
I
think
the
only
place
we
really
disagree
is
should
7
we
try
and
do
it
today
on
a
knowledge
basis
zero
or
should
8
we
do
it
in,
like,
maybe
2
years
from
now
when
we
actually
9
have
some
reasonable
to
believe
that
what
we're
doing
10
makes
sense.

11
CHAIRPERSON
LLOYD:
Kelly,
you
just
to
follow
up
12
on
that,
you
say
we
don't
know
what's
going
to
be
post
13
2009.
And
yet
you
say
you
know
that
the
numbers
for
AT
14
PZEVs
post­
2009
is
too
high.
How
do
you
know
that?

15
(
Laughter.)

16
MR
BROWN:
How
do
I
know
­­
oh,
that's
real
17
simple.
And
if
it's
not
clear,
I'll
be
glad
to
clear
it
18
up.
The
uncertainty
I
mentioned
in
answering
Mr.

19
Calhoun's
question,
largely
had
to
do
with
the
number.

20
That
will
have
a
great
bearing
as
to
which
path
we
take.

21
The
HEV
piece
or
AT
PZEV
which
is
really
HEV,

22
that's
too
big
regardless
of
what
number
you
put
in
there.

23
There's
more
­­
as
you
get
in
the
out
years
of
the
HEV,

24
there's
more
numbers
in
there
than
think
any
of
us
ever
25
conceived
of
doing.
If
you
look
at
the
numbers
for
Ford
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
Motor
Company,
it's
about
five
times
our
wildest
dreams.

2
And
so
we
know
that's
too
big.
And
the
other
two
3
qualifying
pieces
are
CNG,
which
we
have
and
we
sell
on
4
the
hundreds
of
units
per
year.
Every
year
it's
a
few
5
hundred
units
a
year,
so
that's
not
going
to
help.

6
And
hydrogen,
which
without
a
refueling
7
infrastructure,
we're
not
going
to
sell
many
of
those.
So
8
it's
really
an
HEV
requirement.

9
CHAIRPERSON
LLOYD:
So
are
you
going
to
get
to
10
the
other
two
questions
I
had
­­

11
MR.
BROWN:
But
I
have
a
fix
though.
I
didn't
12
just
raise
a
problem.
I
have
a
fix
too.
The
fix
is
we
can
13
make
more
than
6
percent
of
PZEVs.
ANd
that
was
my
whole
14
reason
for
going
through
the
background
saying
that
15
they're
not
as
bad
as
one
of
the
Board
members,
the
one
16
who's
grinning
thinks.

17
CHAIRPERSON
LLOYD:
Well,
would
it
also
be
18
helpful
if
staff
proposed
the
review
panel
would
also
19
assess
the
appropriateness.

20
MR.
BROWN:
Oh,
absolutely.
Thank
you.
I
meant
21
to
bring
that
up
because
I
listened
very
carefully
to
the
22
staff
proposal
and
then
forgot
to
mention
it.
Thank
you.

23
Yes,
it
does
sound
like
the
right
thing,
because
24
it's
not
something
we
have
to
know
tomorrow.
It's
not
the
25
snake
that's
closest
to
our
door
right
now.
We've
got
a
PETERS
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1
lot
of
other
things
to
worry
about
and
there
is
time
to
do
2
that.

3
CHAIRPERSON
LLOYD:
So
you
come
and
are
you
going
4
to
build
hydrogen
IC
engine?

5
MR.
BROWN:
If
we
have
infrastructure
and
if
we
6
can
get
the
NOx
down.

7
CHAIRPERSON
LLOYD:
So
you
a
NOx
is
an
issue.

8
MR
BROWN:
Yeah.
But
I
wouldn't
say
stop
based
9
on
that.
Because
in
1990
if
you
asked
me
the
same
thing
10
about
CNG
I
would
have
said
I
don't
know
how
we're
going
11
to
get
the
NOx
down
and
we
did.
And
the
issue
is
very
12
similar,
you're
running
so
lean
that
typical
catalysis
13
doesn't
help
you.

14
The
numbers
that
we
sent
to
Bob,
there
is
no
15
add­
on
emission
controls
to
that
engine.
Because
when
16
you're
running
that
lean,
a
three­
way
catalyst,
it's
very
17
similar
to
the
problem
that
diesel
guys
have.
When
you're
18
running
that
lean,
a
conventional
three­
way
catalyst
19
doesn't
work.

20
CHAIRPERSON
LLOYD:
Then
what
about
plug­
in
21
hybrids?

22
MR
BROWN:
We've
wrestled
with
that
so
often.

23
And
the
biggest
reason
why
we
never
went
down
that
path
is
24
we
looked
­­
when
we
started
to
go
to
a
hybrid,
we
wanted
25
to
get
ride
of
all
the
things
that
customers
didn't
like.

PETERS
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1
And
the
things
that
customers
didn't
like
is
when
they
2
have
to
do
something
that
they
don't
normally
do.

3
If
they
to
stop
at
a
refueling
station
more
often
4
just
for
regular
gasoline,
they
don't
like.
If
they
have
5
to
hunt
around
to
find
like
CNG
or
methanol
or
something
6
like
that,
they
don't
like
that.
If
they
have
to
run
7
around
and
find
a
plug
to
plug
in,
they
don't
like
that.

8
The
benefit
of
the
type
of
hybrid
that
we're
9
going
to
do
is
the
customer
doesn't
have
to
do
anything
10
other
than
buy
one
and
drive
it
and
like
it
and
stop
for
11
gas
less
than
they
normally
do.

12
CHAIRPERSON
LLOYD:
Supervisor
Roberts,

13
Supervisor
DeSaulnier.

14
MR.
BROWN:
It's
not
a
technical
issue.

15
BOARD
MEMBER
ROBERTS:
Just
a
quick
question.

16
I'm
trying
to
figure
out
what
the
difference
might
be
in
17
setting
a
number
and
reviewing
it
in
a
couple
years
or
not
18
setting
a
number
and
review
it
in
a
couple
years.
And
19
what
I'm
hearing
from
you
in
a
couple
years
we're
going
to
20
have
some
perspective
that's
going
to
affect,
even
if
we
21
were
to
put
something
in
today,
that
it
seems
that
is
22
probably
going
to
force
us
to
review
anyway.

23
And
I'm
wondering
if
there's
a
down
side
to
24
setting
a
number
and
then
reviewing
that
every
two
years
25
as
opposed
to
not
setting
any
number
and
reviewing
­­
and
PETERS
SHORTHAND
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1
trying
to
set
it
in
two
years.

2
MR
BROWN:
The
only
thing
from
our
standpoint
3
there's
a
number
out
there,
and
then
we
have
to
decide
is
4
that
a
real
number
or
not.
Depending
on
the
size
of
the
5
number,
it
will
probably
make
a
difference
as
to
how
you
6
execute
the
program
or
programs.
And
if
the
number
is
too
7
big,
then
we
just
throw
our
arms
up
and
say
okay
now
what
8
do
we
do.
Do
we
hope
that
that
the
next
time
they're
in
a
9
better
mood
or
do
we
wait
a
little
while
and
there's
10
another
administration,
and
the
next
board,
I've
done
that
11
before,
and
it
didn't
work.

12
BOARD
MEMBER
DeSAULNIER:
It
didn't
work.

13
(
Laughter.)

14
BOARD
MEMBER
DeSAULNIER:
A
lot
of
us
have
been
15
through
that.

16
(
Laughter.)

17
MR.
BROWN:
In
fact
I
just
saw
your
predecessor
18
in
the
back
of
the
room
a
little
while
Alan,
I
thanked
him
19
for
being
here
again.

20
CHAIRPERSON
LLOYD:
I
saw
him
too.

21
BOARD
MEMBER
DeSAULNIER:
We're
fuel
neutral.

22
BOARD
MEMBER
ROBERTS:
You
know,
I
know
there
are
23
people
that
would
disagree
with
me,
but
I
think
if
there's
24
anything
that
we
learned,
if
just
setting
a
number
was
25
going
to
give
us
a
solution,
we'd
be
all
driving
electric
PETERS
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1
cars
today.
Setting
the
number
didn't
all
of
sudden
set
2
aside
the
laws
of
physics
and
everything
so
all
this
stuff
3
is
working.

4
But
I'm
just
wondering
in
terms
of
a
strategy,

5
and
part
of
the
reason
why
I
asked
for
the
Department
of
6
Energy
time
line,
I'm
trying
to
figure
our
where
our
we
7
between
now
and
then.
And
do
we
known
and
what
do
we
know
8
it.
And,
you
know,
how
clear
is
this
in
two
years,
how
9
clear
is
it
in
four
years.
It's
very
easy
to
set
a
10
number.

11
And,
in
fact,
if
the
research
is
done
and
we're
12
very
successful
and
it
happens
very
quickly,
any
number
we
13
set
is
probably
­­
maybe
we've
blow
right
through
that
and
14
we
sort
of
laugh,
because
we
set
a
number
so
low.
On
the
15
other
hand,
if
it
doesn't
come
out,
if
not
this
Board,

16
some
future
Board
is
going
to
be
having
this
same
hearing,

17
same
meeting,
saying
well
these
were
all
­­
this
was
the
18
promise.
This
is
where
we
had
hoped
to
be.
These
are
all
19
the
things
that
we
had
hoped
would
happen
that
didn't
20
happen.

21
I've
been
through
that
once.
And
I'm
trying
to
22
figure
out
what
I've
learned
from
that,
and
maybe
what
23
we've
learned
from
that
as
a
board.
But
I'm
almost
not
24
seeing
the
difference
between
saying
you
have
a
number.

25
You're
going
to
review
it
in
a
couple
of
years
or
you
PETERS
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1
don't
set
a
number
and
you're
going
to
set
in
a
couple
of
2
years.

3
CHAIRPERSON
LLOYD:
Well,
I
think
we're
going
to
4
hear
a
number
of
witnesses
who
would
provide
an
5
explanation
for
why
we
should
set
something.

6
BOARD
MEMBER
ROBERTS:
That's
what
I'm
trying
to
7
bring
into
this
discussion
and
get
a
response
back.
I
8
mean,
we
haven't
talked
about
a
number.
And
we're
going
9
to
get
to
the
end
of
a
very
long
hearing
and
we're
going
10
to
have
heard
from
the
industry.
And
then
all
of
a
sudden
11
somebody
is
going
to
put
a
number
out
and
put
it
on
the
12
table.
And,
you
know
what,
what
he's
saying
is
right,

13
it's
going
to
be
arbitrary.

14
CHAIRPERSON
LLOYD:
Well,
I
don't
think,
again,

15
we
haven't
got
a
number
yet,
so
I
don't
think
it's
16
arbitrary.
Also,
I
do
think
­­

17
BOARD
MEMBER
ROBERTS:
It
will
be
when
it
comes
18
later
today,
watch.

19
CHAIRPERSON
LLOYD:
Professor
Friedman.
Mr.

20
McKinnon.

21
BOARD
MEMBER
HUGH
FRIEDMAN:
I
was
going
to
wait
22
a
little
longer
on
this,
but
since
we're
on
the
point.
I
23
wasn't
around.
Were
you,
Ron,
when
this
mandate
was
first
24
adopted.

25
BOARD
MEMBER
ROBERTS:
Not
in
1990.

PETERS
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1
BOARD
MEMBER
HUGH
FRIEDMAN:
It
seems
to
me
that
2
nothing
could
have
been
more
arbitrary
than
to
say
that
in
3
12
years,
more
speculative,
more
aspirational,
but
without
4
any
real
fundamental
scientific
basis
than
to
say
that
ten
5
percent
or
what
some
percent
of
all
sales
in
California
of
6
motor
vehicles
were
going
to
be
zero.

7
And
so
from
the
get­
go
this
was
aspirational.

8
It's
like
in
10
years,
we're
going
to
have
a
man
on
the
9
moon
or
by
the
end
of
the
decade.
That's
identifying
a
10
specific
thing
in
space,
and
it's
a
specific
timeline.

11
And
it
seems
to
me
that
the
tradition
and
what
12
we're
continuing
is
an
aspiration.
And
we
have
a
lot
more
13
data
and
information
now.
We
read
that
CEOs
of
major
auto
14
companies
are
talking
about
specific
numbers.
They're
not
15
committing,
obviously,
but
they're
stating
this
is
their
16
goal.
By
the
year
2010
we're
going
to
have
10,000
fuel
17
cell
vehicles.
Now,
nobody
is
going
to
say
that
that's
a
18
contrary,
that's
legally
enforceable,
but
it's
19
aspirational.

20
So
what's
wrong
with
an
aspiration,
setting
a
21
goal,
whatever
it
is,
250
is
what
the
staff's
proposing
22
starting
in
2009.
That's
the
way
I
read
it
anyway.

23
Am
I
wrong?

24
And
whatever
the
number
is,
as
a
signal
that
this
25
is
what
California
wants,
and
expects
at
a
minimum,
and
PETERS
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1
then
have
an
expert
panel
advise
us
or
our
successors
and
2
have
a
review
and
listen
to
the
industry
as
we've
3
listened.
I've
been
through
two
of
these
now.
And
we've
4
paid
attention.

5
We've
questioned
whether
you
made
every
possible
6
college
effort
try
to
sell,
to
market
what
you
did
7
develop.
And
we've
heard
Toyota's
case
on
the
RAV4.
And
8
we
appreciate
what
is
being
done,
and
the
way
you're
9
developing
things.
But
what's
wrong
with
taking
a
number?

10
BOARD
MEMBER
ROBERTS:
That's
what
I
was
asking.

11
CHAIRPERSON
LLOYD:
I
think.
Well,
I
think
­­

12
MR.
BROWN:
It's
A
good
question
and
it
deserves
13
an
honest
answer.
And
I
hope
it
doesn't
offend
anybody.

14
It's
not
intended
to
be
offensive.
It's's
the
answer.
It
15
has
to
do
with
credibility.
This
isn't
the
first
time
16
we've
gone
back
to
the
well.
And
our
management
is
17
skeptical.
My
management
is.
And
I
suppose
the
18
management
of
the
other
companies
are.

19
If
we
come
back
and
they
say
I've
got
some
good
20
news
and
some
bad
news.
And,
you
know,
tonight
I've
got
21
to
­­
or
tomorrow
you
know
whenever
this
ends,
I've
got
to
22
write
something
up
and
try
and
explain
what
happened,

23
other
than
just
saying
it
was
3
to
97
and
we
got
killed.

24
If
I
say,
that
it's
2,500
or
6,000
or
9,000
or
25
some
of
the
other
numbers
I've
heard,
they'd
say
where
did
PETERS
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1
that
come
from?
And
I'd
say
well,
it
just
came
out
of
the
2
air.
And
they
put
it
in
there.

3
And
they'd
say
based
on
what?
And
I'd
based
on
4
nothing.
Didn't
you
tell
them?
Yeah,
I
told
them.
I
5
suggested
we
go
through
this
panel.
They
didn't
listen?

6
No,
they
didn't
listen.

7
And
they'll
say,
so
what
do
we
do?
And
I've
got
8
to
tell
you
what
I'd
tell
them
and
that
is
we've
got
to
9
wait
and
find
out
what
the
real
number
is.

10
CHAIRPERSON
LLOYD:
Not
so
many
years
ago
your
11
CEO
was
also
claiming
large
numbers
in
much
sooner
than
12
2010.
How
did
you
address
that
point?

13
MR
BROWN:
I
had
the
distinct
privilege
of
going
14
in
and
telling
the
guy
who's
name
is
bolded
to
the
15
building
that
that
wasn't
a
good
number.
I
don't
want
to
16
do
that
again,
either.

17
(
Laughter.)

18
MR.
BROWN:
I
think
you
get
to
do
it
once.

19
CHAIRPERSON
LLOYD:
Supervisor
DeSaulnier.

20
BOARD
MEMBER
DeSAULNIER:
Actually
thanks
for
21
asking
that
question,
because
Kelly
you
remember
in
2001
I
22
went
outside
during
a
break
and
mentioned
to
you
that
your
23
now
Chairman
had
made
a
public
pronouncement
that
by
2020
24
Ford
wouldn't
be
making
internal
combustion
engines
any
25
longer.

PETERS
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1
So
when
he
asks
where
they
come
up
with
the
2
number,
we
followed
his
lead
was
part
of
the
answer.

3
(
Laughter.)

4
(
Applause.)

5
MR.
BROWN:
I'll
quote
you
on
that.
I
won't
say
6
I
immediate
that
up
myself.

7
BOARD
MEMBER
DeSAULNIER:
Well,
you
probably
8
won't
be
able
to
spell
my
name,
so
that's
fine.

9
(
Laughter.)

10
BOARD
MEMBER
DeSAULNIER:
Are
you
the
one
who
has
11
got
Dave's
car?
Are
you
the
one
who's
interested
in
12
producing
a
hydrogen
Prius
or
is
that
another
auto
13
manufacturer,
Kelly?

14
MR.
BROWN:
I
don't
know
who
it
was.
I'll
find
15
it.

16
CHAIRPERSON
LLOYD:
The
Ucar.
Ucar.

17
MR
BROWN:
No,
we've
got
our
own.

18
BOARD
MEMBER
DeSAULNIER:
So
in
regards
to
what
19
Alan
was
asking
about
in
terms
of
infrastructure
and
the
20
chicken
and
egg,
are
you
interested
in
the
idea
of
21
pursuing
credit
for
infrastructure,
hydrogen
22
infrastructure?

23
MR
BROWN:
No,
and
for
two
reasons.
The
first
of
24
which
is
I've
learned
that
all
the
alternative
fuel
25
programs
that
we've
been
through,
we're
not
fuel
PETERS
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1
providers.
And
if
we
start
getting
into
that
business,

2
All
we
have
is
public
relations
sessions.
We
don't
3
actually
accomplish
something.

4
The
fuel
providers
in
this
country
are
pretty
big
5
organizations.
And
if
they're
not
involved
and
they're
6
not
doing
it,
it's
not
going
to
work.

7
BOARD
MEMBER
DeSAULNIER:
But
the
problem
dealing
8
with
fuel
providers
and
the
refinery
industry
that
I
deal
9
with
because
four
of
the
13
refineries
in
the
State
of
10
California
are
in
Contra
Costa
County,
is
they
tell
me
11
they
don't
think
there's
a
future
in
this.

12
So
we
get
in
this
position
where
the
fuel
13
providers
aren't
interested.
And
at
least
what
we're
14
talking
about
is
trying
to
do
some
clearly
defined
15
demonstration
projects,
where
you
would
get
credit
for
16
that.
Is
it
just
something
that
is
culturally
17
unacceptable
to
Ford?

18
MR.
BROWN:
If
we
can
get
the
NOx
down,
that's
19
probably
something
we
might
be
interested.
On
that
kind
20
of
basis,
but
it
would
have
be
to
small.
It's
not
going
21
to
be
something
big
that's
going
to,
you
know,
move
the
22
needle
a
lot.

23
BOARD
MEMBER
DeSAULNIER:
I
just
want
say
to
say
24
that
it's
hard
to
go
through
a
ZEV
hearing
without
you
and
25
Sam
Leonard
here
together
so
we
miss
Sam.

PETERS
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MR.
BROWN:
I
heard
from
him
last
night
by
Email
2
and
I'll
send
him
and
Email
back.

3
CHAIRPERSON
LLOYD:
Ms.
D'Adamo.

4
BOARD
MEMBER
D'ADAMO:
Yeah,
just
a
quick
5
question.
What
are
you
doing
with
the
your
EVs
once
the
6
leases
are
up.

7
MR
BROWN:
To
go
through
the
range,
the
Ranger
8
EVs
with
lead
acid
batteries,
most,
if
not
all
­­
I'm
not
9
positive
of
all
them,
there
may
have
been
some
that
we
10
took
out
of
service.
We
upgraded
a
lot
of
those
to
Nickel
11
Metal
Hydride
batteries
and
put
them
back
out.

12
Now,
some
of
these
are
just
starting
to
come
up.

13
In
fact,
two
days
ago,
I
got
asked
one
of
the
Parks
wants
14
us
to
donate
the
vehicle
to
them,
because
their
lease
is
15
up,
and
they
don't
want
to
give
it
up.
We're
trying
to
16
decide
what
to
do
with
that.
We
may
just
end
up
giving
it
17
to
them.

18
On
the
Think
neighborhood
vehicles,
those
were
19
all
sold
units.
So
those
people
own
them
for
­­
and
20
they'll
probably
be
out
there
for
a
long
time.
The
think
21
cities
we're
brought
into
this
country
under
bond
with
22
NHTSA,
because
they
meet
European
safety
requirements
and
23
not
U.
S.
And
we
have
to
get
them
out
of
the
country
after
24
three
years
or
they
come
looking
for
me.
They
take
the
25
bond
and
they
take
me
if
they
find
me.
So
we
have
to
get
PETERS
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1
those
out.
We
have
no
choice.

2
ANd
they
won't
extend
them
because,
you
know,

3
you're
a
very
positive
agency,
you
wouldn't
believe
how
4
many
other
government
agencies
are
anti­
ZEV.
We
ran
into
5
it
in
our
ZEV
program
in
the
State
of
California,
in
New
6
York,
in
Massachusetts.
And
they
head
of
NHTSA,
when
we
7
had
him
out
wouldn't
even
sit
in
any
of
our
ZEVs.
He
8
didn't
like
them.
So
for
every
proponent
we
have
in
9
government,
we've
got
a
couple
of
very
well
placed
10
antagonists.

11
BOARD
MEMBER
RIORDAN:
That's
something,
Mr.

12
Chairman
we
might
­­

13
CHAIRPERSON
LLOYD:
Mrs.
Riordan.

14
BOARD
MEMBER
RIORDAN:
Well
let's
follow
along
on
15
that.
That's
something
we
might
need
to
help
you
with.

16
MR.
BROWN:
Yeah,
the
staff
in
California,
by
the
17
way,
we
probably
wouldn't
have
gotten
through
the
18
bureaucracy
at
DMV,
if
it
wasn't
for
your
staff.
And
also
19
in
Massachusetts,
there
were
very
helpful.
We
had
less
20
than
stellar
success
in
New
York,
my
old
home
State
of
New
21
York.

22
BOARD
MEMBER
RIORDAN:
I
mean,
I
don't
know
if
23
there's
a,
you
know,
what
the
attitude
is
and
why.
But
if
24
there
is
something
that
meets
our
needs,
and
I
say
that
25
because
it's
­­
we'd
have
to
evaluate
it.
But
if
there
is
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something
that's
not
working
amongst
other
governmental
2
agencies
for
what
we
want
to
support,
I
think
we
ought
to
3
be
very
helpful.

4
MR
BROWN:
Well,
based
on
ZEVs
and
also
natural
5
gas
experience,
I
would
suspect
that
we
could
use
a
lot
of
6
help
from
this
Board
when
we
start
placing
hydrogen.
I
7
suspect
there's
going
to
be
no
shortage
of
government
8
agencies
that
are
going
to
try
and
put
up
road
blocks.

9
We
had
a
horrible
time
with
CNG.
And
we
even
had
10
a
horrible
time
with
electric
vehicles.
If
there's
11
anything
different,
there's
bureaucracies
that
are
against
12
them.
We
had
the
highest
levels
in
some
of
the
other
13
states,
even
governors
involved,
trying
to
help
us.

14
CHAIRPERSON
LLOYD:
Well
I
know
on
that
issue,

15
both
at
the
California
Fuel
Cell
Partnership
level
and
at
16
the
South
Coast
Air
Quality
management
level,
I
think
17
we're
trying
to
do
everything
we
can
to
facilitate
that,

18
because
we
recognize,
Kelly,
this
is
basically
going
to
be
19
a.
­­
teamwork
is
required,
because
if
we're
pushing
you
20
to
produce
the
vehicles,
in
turn
we've
got
to
help
you
21
with
the
infrastructure.

22
So
we
really
do
take
that
seriously
and
we're
23
actively
involved.
And,
of
course,
I
say
the
partnership
24
is
a
great
vehicle
for
doing
that
as
well
as
the
group
25
we're
talking
about
statewide.

PETERS
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1
Thank
you.

2
With
that,
we're
going
to
take
a,
this
time,
a
15
3
minute
break
till
20
of
5,
for
the
court
reporter,
who's
4
dying.

5
Thank
you.

6
(
Thereupon
a
recess
was
taken.)

7
CHAIRPERSON
LLOYD:
I'd
like
to
start.
And
we're
8
going
to
start
with
Mr.
Reagan
Wilson
from
Stanislaus
9
County.
He
has
a
meeting
later.

10
The
plan
here
is
to
go
till
7:
00
o'clock.
And
11
then
we'll
have
to
take
another
break
for
the
court
12
reporter,
and
probably
the
Board
will
take
a
break
for
13
some
refreshments,
maybe
for
a
half
an
hour,
and
then
14
reassemble
after
that
time
period.

15
Clearly,
we've
got
still
a
lot
of
witnesses.

16
We've
got
approximately
over
70
witnesses
to
go.
So
we
17
would
really
appreciate
if
you
can
keep
to
three
minutes.

18
And
for
those
of
you
who
are,
again,
majority
may
be
19
opposing,
if
you
can
be
as
specific
as
possible
in
terms
20
of
to
what
you
object
in
the
staff
proposal,
so
we
can
21
focus
the
comments.
And
as
I
said
earlier,
if
there's
a
22
duplication,
if
you
can
basically
come
up
and
just
stress
23
that
that's
what
you
object
to
or
you
support,
et
cetera,

24
so
that
we
can
really
move
this
along,
but
also
capture
25
very
explicitly,
and
provide
us
some
advice
of
how
we
PETERS
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1
might
move
ahead.

2
So
I
say
we'll
take,
Mr.
Reagan
Wilson.
Then
we
3
will
have
Scott
Briasco,
Bill
Warf,
John
Boesel.

4
MR.
WILSON:
Thank
you,
Mr.
Chairman
and
members
5
of
the
Board.
I
appreciate
your
indulgence.
My
name
is
6
Reagan
Wilson.
I'm
the
Chief
Executive
Officer
of
7
Stanislaus
County
in
the
central
valley
of
California.

8
(
Thereupon
an
overhead
presentation
was
9
Presented
as
follows.)

10
MR.
WILSON:
Modesto
is
the
County
seat.
I'm
11
here
today
because
the
central
valley
has
as
a
serious
air
12
pollution
control
problem.
And
for
those
of
you
from
the
13
bay
area,
you
know
how
serious
we
are
about
it,
when
we
14
pushed
the
issue
of
Smog
II
not
too
long
ago.

15
BOARD
MEMBER
DeSAULNIER:
Yes,
I'm
familiar.

16
MR.
WILSON:
But
that's
just
one
tool
that
we
17
need
in
the
valley
to
help
deal
with
a
problem
that's
very
18
serious
un
federal
law
right
now.
And
today
the
central
19
valley,
the
San
Joaquin
Valley
Air
Pollution
Control
20
District
considered
issues
that
relate
to
the
farming
21
industry
around
diesel
use
and
those
kinds
of
things.

22
So
the
air
pollution
issues
in
the
central
valley
23
are
affecting
all
of
us
and
they're
starting
to
affect
us
24
in
very
serious
ways.

25
This
program
that
you're
talking
about
today
is
PETERS
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important
to
us.
And
this
is
certainly
important
to
my
2
county,
because
we
think
it
is
an
important
tool,
both
as
3
a
matter
of
public
policy
and
as
matter
of
real
reductions
4
in
air
pollution
emissions
in
an
area
that
needs
it
5
desperately.

6
In
1990,
the
California
Air
Resources
Board
did
7
adopt
an
ambitious
program
to
dramatically
reduce
the
8
environmental
impact
of
light­
duty
vehicles
through
the
9
gradual
introduction
of
zero
emission
vehicles
into
the
10
California
fleet.

11
Your
staff
report
says
today
the
challenge
facing
12
the
Board
is
to
determine
how
to
achieve
a
sustainable
13
commercial
market
given
the
uncertainties
in
costs
and
the
14
pace
of
technological
development.
I'm
not
a
scientist,

15
but
as
I've
listened
to
the
debate
go
on
back
and
forth
16
today,
it
struck
me
the
complexity
of
the
issue
is
17
probably
perhaps
more
complex
than
a
land
use
issue
at
a
18
local
government
level.

19
Nevertheless,
I
put
on
chart
on
the
Board
behind
20
you.
And
it's
the
only
chart
I
have
available.
But
I
21
think
it
illustrates
a
very
important
point,
the
green
22
chart,
the
bars
at
the
back,
was
where
your
standards
were
23
for
zero
emission
vehicles
in
1990.

24
The
next
chart,
the
blue
one,
is
where
you
25
revised
those
standards
in
1996.
The
orange
chart
is
PETERS
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where
you
revised
them
again
in
1998.
The
yellow
bars
is
2
where
you
went
in
2001.
And
the
orange
and
white
bars,

3
which
don't
make
any
three­
dimensional
impact
on
the
4
chart,
is
where
the
staff
proposal
has
taken
you,
if
you
5
should
adopt
it
today.

6
I
think
the
message
is
real
clear
that
perhaps
7
this
Board
isn't
as
committed
to
zero
emission
vehicle
8
programs
as
they
started
out
to
be
in
1990.

9
We
know
in
the
central
valley,
and
in
Stanislaus
10
County,
I
actually
have
a
program
prepared
to
go,
which
11
would
purchase
200
zero
emission
vehicles
over
the
next
12
three
years
and
another
100
hybrid
vehicles.
We
already
13
have
in
our
fleet
about
100
CNG
gasoline
duel
use
14
vehicles.
Our
board's
going
there
for
several
reasons.

15
One,
it
makes
a
broad
public
policy
statement.

16
Two,
as
we
go
to
mandatory
car
pooling,
if
valley
17
goes
to
extreme
designation,
we
will
use
those
vehicles
to
18
have
employees
carpool
back
and
forth
to
home,
which
means
19
you
get
two
benefits
out
of
that.

20
Three,
we've
looked
zero
emission
vehicles,
and
21
found
out
that
most
of
our
transportation
in
and
around
22
our
valley,
which
covers
1,500
square
miles
by
an
employee
23
is
less
than
50
miles
a
day.
And
so
when
you
start
24
looking
at
the
operational
aspects
of
zero
emission
25
vehicles,
in
fact,
they
fit
very
nicely
into
that
kind
of
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environment.

2
The
next
thing
is
­­

3
CHAIRPERSON
LLOYD:
Can
you
bring
close
here.

4
MR.
WILSON:
I'm
working
on
that
sir.
The
next
5
thing
is
that
with
things
like
OnStar,
mobile
sources
can
6
now
be
tracked,
mobile
source
data
can
now
be
accurately
7
identified.
And
when
you
can
do
that,
you
can
start
8
really
crunching
down
the
amount
of
air
pollution
from
9
mobile
sources,
certainly
in
the
central
valley.

10
In
the
valley
65
percent
of
our
pollution
comes
11
from
mobile
sources,
stationary
sources
are
35
percent.

12
This
program
is
important.
This
program
is
one
of
many
13
tools
we're
going
to
need
to
become
in
compliance.

14
You
have
in
front
of
you
letters
signed
by
more
15
than
60
city
officials
from
all
over
the
state
of
16
California.

17
In
addition
to
that,
you
have
people
like
the
18
Building
Industry
Association
of
Central
California,
the
19
American
Lung
Association,
the
California
League
of
20
Conservation
Voters,
the
Farm
Bureau,
Natural
Resources
21
Defense
Council,
and
others
who
are
normally
at
odds
on
22
public
policy
issues
like
this,
who
are
all
very
much
in
23
favor
of
preserving
this
ZEV
Program
that
you
adopted
in
24
2001.

25
We
would
ask
that
you
sustain
the
ZEV
Program
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that
this
Board
set
in
2001,
it
was
not
going
to
back
off
2
of.
If
you
can't
go
there,
then
what
we
would
ask
is
that
3
you
seriously
consider
some
compromise
proposals
that
have
4
been
floated
around
that
are
in
front
of
your
staff,
that
5
have
been
shared
with
people,
because
we
truly
believe
6
that
the
elimination
of
this
program
sends
the
wrong
7
message
to
everybody
when
it
comes
to
fighting
air
8
pollution.

9
Thank
you.

10
CHAIRPERSON
LLOYD:
Thank
you.
One
comment
I
11
would
make
on
the
chart
behind,
you
talk
about
a
limited
12
number
of
vehicles.
Of
course,
what
we're
trying
to
do
is
13
eliminate
pollution.
And
I
don't
think
that's
a
14
reflection
of
elimination
of
pollution.
I
think
the
staff
15
showed
you
in
fact
with
one
of
the
alternatives
there
was
16
actually
greater
air
quality
benefits
than
was
proposed
17
the
1990.

18
MR.
WILSON:
Well,
I've
read
the
charts
and
I
19
read
the
numbers
and
I
don't
reach
the
same
conclusion.

20
So
I'll
respectfully
disagree.

21
CHAIRPERSON
LLOYD:
Well,
I
understand
that.

22
I've
been
at
this
a
long
time
so
I
know
what
I
believe
in.

23
Ms.
D'Adamo.

24
BOARD
MEMBER
D'ADAMO:
Yes.
A
question
and
then
25
a
comment.
Reagan,
it's
been
awhile
since
we've
talked,

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but
I
understand
your
enthusiasm
and
your
commitment
to
2
this
program
and
that
the
vision
is
that
it
be
much
3
greater
than
what
you
just
described,
and
that
perhaps
it
4
would
move
on
to
other
areas
of
the
valley.

5
Where
have
you
left
off
with
those
discussions,

6
for
example,
going
to
Fresno
Bakersfield,
et
cetera?

7
MR.
WILSON:
Well,
Fresno
is
seriously
8
considering
the
program
as
a
city.
In
discussions
in
9
local
governments,
just
in
Stanislaus
county,
we
have
nine
10
cities
and
22
school
districts.
All
of
them
recognize
11
that
this
is
a
good
cost
effective
way
to
go.

12
The
other
thing
we
figured
out
in
running
the
13
numbers
is
that
electric
vehicles
are
just
a
heck
of
a
lot
14
cheaper
to
operate
as
a
fleet.
Some
of
us
recognize
15
there's
a
budget
crisis
in
the
State
of
California,
so
16
this
is
a
way
to
help
address
some
of
that
issue
as
well.

17
The
last
thing
is
it
really
does
help
us
manage
18
our
fleets
better,
which
just
means
moving
people
to
where
19
they
need
to
go
and
a
more
cost
effective
way
works
as
20
well.
So
there
are
huge
benefits
from
this
program
beyond
21
just
the
reductions
in
air
pollution.

22
BOARD
MEMBER
D'ADAMO:
Okay.
And
then
just
for
23
the
benefit
of
my
colleagues.
I
can't
impress
upon
you
24
all
enough
this
is
the
third
hearing
that
I've
been
at
and
25
this
is
the
closest
that
I
have
ever
felt
that
this
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
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1
program
has
a
direct
impact
in
my
neighborhood.

2
And
it's
just
really
exciting
to
see
someone's
3
commitment
in
the
valley.
We're
just
now
starting
to
talk
4
much
more
seriously
than
we
ever
have
in
the
past
about
5
the
impact
of
air
quality.
And
to
see
someone
as
well
6
respected
as
this
individual
come
up
to
the
plate
and
say
7
he's
going
to
put
the
county's
money
there
because
it's
8
important
to
make
a
statement
for
other
residents
of
the
9
valley
and
for
other
communities.

10
And
I
would
just
like
to
impress
upon
you
all
and
11
to
staff
that
we've
got
to
find
a
good
ratio
so
that
12
there's
enough
of
an
incentive
for
these
battery
electric
13
vehicles,
so
that
we
can
actually
get
them
in
the
valley
14
and
hopefully
other
areas
of
the
state
as
well.

15
MR.
WILSON:
I'd
like
to
leave
the
Board
with
one
16
thought
and
it
goes
back
to
the
health
issues.
We
did
a
17
quick
survey
of
the
school
districts
in
Stanislaus
County.

18
And
there
are
more
than
2,800
children
K
through
12
that
19
suffer
from
asthma,
in
Stanislaus
County
alone.

20
And
that
is
in
part
because
we
have
the
Highway
21
99
and
I­
5
I
corridors.
And
so
there's
intense
22
concentrations
of
pollution
on
the
cities
around
those.

23
Again,
these
programs
help,
and
zero
emission,
not
partial
24
emissions
has
got
to
be
a
part
of
that
solution.

25
Thank
you.

PETERS
SHORTHAND
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1
CHAIRPERSON
LLOYD:
And,
as
you
know,
we
funded
2
the
Fresno
asthma
study,
so
we're
fully
aware
of
that
and
3
very
supportive
by
the
way
of
the
community
for
helping
us
4
on.

5
So
thank
you
very
much.

6
MR.
WILSON:
Thank
you
for
your
indulgence.

7
CHAIRPERSON
LLOYD:
Scott
Briasco,
Bill
Warf,

8
John
Boesel.

9
MR.
BRIASCO:
Good
evening.
My
name
is
Scott
10
Briasco.
I'm
manage
the
Electric
Transportation
Program
11
at
the
Los
Angeles
Department
of
Water
and
Power.
And
I
12
appreciate
the
opportunity
to
address
the
Board
at
this
13
very
important
hearing.

14
The
City
of
Los
Angeles
through
the
City
Council
15
opposes
the
latest
proposed
revisions
to
the
zero
emission
16
vehicle
program,
and
recommends
that
the
Air
Resources
17
Board
take
appropriate
action
to
resolve
serious
problems
18
with
the
staff's
proposal
related
to
battery
electric
19
vehicles.

20
In
1990,
the
Board
took
a
look
at
California's
21
air
quality
future
and
took
a
dramatic
step
towards
22
cleaning
air
by
establishing
the
ZEV
requirements.

23
Tremendous
progress
has
been
made
in
EV
technology
as
a
24
result
of
that
action.
The
Board
production
requirements
25
have
accelerated
development
of
ZEV
technologies.
Quality
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1
vehicles
have
been
produced
and
demonstrated.
EV
2
components
have
improved.
Battery
costs
have
been
reduced
3
and
will
continue
to
drop.

4
The
ZEV
program
has
revolutionized
the
car
market
5
by
encouraging
automakers
and
others
to
invest
in
the
6
research
and
development
of
zero
emission
technologies.

7
The
electric
and
hybrid
electric
vehicles
on
the
road
8
today
owe
their
existence
to
the
air
Resources
Board's
ZEV
9
program.

10
Does
anyone
really
believe
progress
will
continue
11
at
the
same
pace
if
the
BEV
requirements
are
essentially
12
eliminated,
as
proposed
today?

13
Electric
vehicles
are
essential
to
Los
Angeles
14
and
California
because
of
the
severe
air
quality
problem
15
that
we
have
here.
The
State
has
the
resources
and
the
16
ability
to
lead
the
rest
of
the
country
and
world
in
17
transportation
technology,
which
means
not
only
cleaner
18
air
but
also
a
stronger
economy
with
more
and
better
jobs
19
for
Californians.

20
A
tremendous
amount
of
planning
and
21
implementation
has
been
done
since
the
inception
of
the
22
ZEV
program
to
prepare
the
State
of
California
for
the
23
launch
of
the
electric
vehicle.
This
work
is
the
24
foundation
which
supports
the
commercialization
of
a
25
sustainable
electric
vehicle
market.

PETERS
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1
Government
agencies,
utilities
and
private
2
businesses
have
contributed
substantial
financial
3
resources
to
this
effort,
and
have
become
partners
with
4
the
California
Air
Resources
Board.

5
LADWP
was
the
first
utility
in
the
nation
to
6
offer
an
EV
charging
rate.

7
CHAIRPERSON
LLOYD:
But
Scott
how
would
you
8
specifically
change
the
staff
proposal?
Give
us
some
9
help.

10
MR.
BRIASCO:
Okay.
I
guess
what
I'm
proposing
11
is
not
a
whole­
sale
gutting
of
the
battery
electric
12
vehicle
requirements.
And
I
would
encourage
some
kind
of
13
a
compromise
to
achieve
that
result.
We
have
over
300
14
electric
vehicles
in
our
fleet
of
different
types.
The
15
vehicles
work
extremely
well.
It's
been
a
positive
16
experience.
It's
not
a
test.
We've
logged
over
2
million
17
miles
on
those
vehicles.

18
The
biggest
problem
we
have
is
product
19
availability.
We
can't
get
the
vehicles.
And
we
have
a
20
requirement
under
the
Energy
Policy
Act,
that
90
percent
21
of
our
vehicle
purchases
have
to
be
alternatively
fueled.

22
And
we'd
like
to
buy
electric
vehicles.
It's
our
fuel.

23
And
they're
just
not
available.

24
There's
been
a
substantial
effort
to
put
public
25
charging
throughout
California.
Seven
hundred
and
fifty
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1
public
charging
stations
have
been
installed
at
450
2
different
locations.

3
CHAIRPERSON
LLOYD:
So
I
think
your
part
of
the
4
compromise
proposal
put
forward
that
we
met
with
you
the
5
other
day,
so
you
would
support
that?

6
MR.
BRIASCO:
I
would
definitely
support
that.

7
CHAIRPERSON
LLOYD:
Thank
you.

8
MR.
BRIASCO:
Just
I'll
conclude.
And
the
City
9
of
Los
Angeles
appreciates
the
vision
and
record
of
10
support
for
the
ZEV
technologies
that
have
been
11
demonstrated
by
the
Board
over
the
past
decade.
We
12
understand
that
additional
work
needs
to
be
done
and
some
13
adjustments
may
need
to
be
made
to
the
current
regulation.

14
Unfortunately,
the
current
proposed
amendments
15
before
you
today
do
not
sustain
a
ZEV
program
for
the
16
future.
So
we
would
encourage
some
kind
of
a
compromise
17
that
would
prevent
a
ZEV
black
out
and
to
strengthen
or
18
maintain
the
State's
ZEV
production
requirements.

19
CHAIRPERSON
LLOYD:
Thank
you
very
much.

20
Questions?

21
Yes,
Dr.
Burke.

22
BOARD
MEMBER
BURKE:
Yeah,
I
really
appreciate
23
you
coming
today.
But
what
I
would
appreciate
is
as
a
24
community
member
in
Los
Angeles
is
you
not
dismantling
25
DWP's
green
power
program,
which
seems
like
what
you're
PETERS
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1
dealing.
And
as
a
citizen
who'd
involved
in
the
2
environment,
I
would
also
suggest
that
the
City
Council
3
take
a
look
at
buying
power
for
you
from
a
coal­
fired
4
plant
outside
the
State.

5
MR.
BRIASCO:
Okay.

6
CHAIRPERSON
LLOYD:
No
compromise.

7
(
Laughter.)

8
CHAIRPERSON
LLOYD:
Thank
you.

9
Any
other
questions?

10
Thanks.

11
Bill
Warf,
John
Boesel,
and
I'm
not
sure
whether
12
Ed
is
going
to
give
his
time
to
someone
else?

13
Ed
Kjaer
and
Dave
Modisette.

14
(
Thereupon
an
overhead
presentation
was
15
Presented
as
follows.)

16
MR.
WARF:
Mr.
Chairman
and
members
of
the
Board
17
I'm
Bill
Warf.
I
work
at
SMUD.
I'm
a
systems
engineer
18
and
a
project
manager
for
SMUD.

19
­­
o0o­­

20
MR.
WARF:
The
red
button.
Smud
supports
a
21
strong
ZEV
mandate.

22
BOARD
MEMBER
HUGH
FRIEDMAN:
Could
you
please
23
speak
more
closely
to
the
microphone.
So
some
of
us
who
24
have
a
little
hearing
impairment
can
hear
you.

25
MR.
WARF:
I
was
still
dancing
and
getting
used
PETERS
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1
to
the
spot.

2
SMUD
founded
its
electric
transportation
group
in
3
1990.
I'm
going
do
this
very
quickly
in
light
of
time.
I
4
have
eight
slides
in
three
minutes.

5
­­
o0o­­

6
MR.
WARF:
We've
invested
more
than
$
21
million
7
to
date
related
to
EVs
and
EV
research.
And
we've
managed
8
an
additional
$
20
million
in
research
related
to
power
9
electronics
batteries
in
vehicles
to
support
electric
10
vehicle
development
and
deployment.

11
We've
installed
over
1,000
EV
chargers
statewide
12
and
invested
about
$
10
million.

13
­­
o0o­­

14
MR.
WARF:
Our
research
has
included
a
number
of
15
different
battery
types
including
advanced
lead
acid
16
nickle
metal
hydride,
sodium
nickel
chloride.
We've
also
17
done
a
number
of
fuel
cell
projects.
The
integrated
fluid
18
management
technology
fuel
cell
project
was
the
forerunner
19
of
the
H­
Power
stack.
We
worked
and
funded
the
fast­
track
20
fuel
cell
bus
with
Sunline
and
IFC
Research
and
DOT.
That
21
bus
is
in
service
now
at
Sunline.

22
We've
done
a
fuel
cell
APU
project
in
a
23
heavy­
duty
truck
where
we
showed
performance
of
a
OEM
fuel
24
cell
at
minus
39
C
on
the
truck.

25
Our
experience
shows
that
battery
electrics
along
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1
with
infrastructure
are
available
now.
Fuel
cells
are
2
promising
but
development
and
cost
reduction
are
still
3
needed.
They're
still
very
expensive.

4
­­
o0o­­

5
MR.
WARF:
Nickel
Metal
hydride
­­
now
I
want
to
6
talk
a
little
bit
about
batteries.
Battery
advances
since
7
2000
improved
the
battery
electric
vehicle
business
case.

8
Nickel
Metal
Hydride
advances
are
still
being
9
made.
Previous
speakers
have
talked
about
that,
and
I
10
won't
go
into
it.

11
Lithium
Ion
batteries
are
now
reaching
market
12
viability.
Staff
in
the
last
reported
a
25
percent
13
improvement
in
energy
capacity.
They
also
now
have
14
batteries
with
150
watts
per
kilogram.
That's
double
the
15
energy
density
of
nickel
metal
hydride.

16
High
energy
versions
appear
very
cost
competitive
17
in
lap
tops.
Enough
work
hasn't
been
done
yet
to
make
18
cells
for
cars
out
in
the
marketplace,
but
they're
very
19
close.
A
couple
years
behind
nickel
metal
hydride.

20
Sodium
Nickel
chloride
batteries
are
produced
by
21
a
company
by
the
name
of
Mesdaya
in
Switzerland.
They're
22
cost
­­
we
bought
those
batters
for
$
655
a
kilowatt
hour
23
in
2002.
They're
available
today
for
$
400
a
kilowatt
hour
24
in
hundred
module
quantities,
that'
hundred
pack
25
quantities.

PETERS
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1
And
they're
available
for
$
220
a
kilowatt
hour
in
2
30,000
unit
per
year
quantities.

3
The
energy
storage
capacity
of
those
batteries
4
has
improved
18
percent
in
the
last
three
years
to
118
5
watt
hours
per
kilogram.

6
­­
o0o­­

7
MR.
WARF:
Battery
technology
continues
to
8
improve.
What
I
did
to
make
this
chart
was
I
took
the
9
mass
of
an
EV1
pack,
about
400
kilograms,
and
I
calculated
10
the
range
if
you
were
to
use
the
other
technologies.

11
CHAIRPERSON
LLOYD:
Bill,
can
you
summarize
12
quickly.

13
MR.
WARF:
I'm
going
as
fast
as
I
can.
Let's
14
see.
I
think
the
point
of
this
is
that
you
can
put
an
15
awful
lot
of
range
in
an
EV
if
you
use
the
advanced
16
technologies.

17
That
has
some
benefits.
One
of
the
benefits
of
18
that
is
you
have
less
mileage
between
charges
of
the
19
vehicle
or
at
least
you
could.

20
What
I
hear
the
battery
experts
telling
you
is
21
the
lithium
ion
batteries
have
say
1,200,
1,500
cycle
life
22
if
you
cycle
them
to
80
percent
depth
of
discharge.
But
23
people
don't
really
drive
that
way.
The
way
people
really
24
drive,
and
what
I've
learned
in
the
last
10
years,
is
they
25
drive
40
or
50
miles
a
day,
and
they
might
drive
20
miles
PETERS
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1
between
charging.

2
If
they
do
that,
the
data
on
this
battery
from
3
DOD
tests
an
OEM
information
given
to
me
showed
that
those
4
batteries
could
last,
if
you
charged
three
times
a
day,

5
which
would
be
1,000
cycles
a
year,
they'd
like
20
years.

6
­­
o0o­­

7
MR.
WARF:
Battery
costs
are
reduced
with
volume,

8
process
improvement
and
capital
investment.
It
takes
all
9
of
those
things
to
reduce
the
cost
of
batteries.
I
10
reported
on
an
earlier
slide
that
the
zebra
battery
had
11
seen
a
dramatic
reduction
in
price
in
the
last
two
years.

12
Well,
Mesdaya
invested
$
66
million
in
a
new
plant.

13
They've
diversified
in
to
other
markets
and
are
achieving
14
some
volume.

15
CHAIRPERSON
LLOYD:
Bill,
I've
given
you
over
a
16
minute.

17
MR.
WARF:
Conclusions,
SMUD
supports
a
strong
18
ZEV
mandate
with
significant
battery
EVs
and
grid
19
connected
hybrids,
beneficial
to
near­
term
air
quality.

20
Battery
technology
is
improving
somewhat
more
than
21
reported
in
the
staff
report.
The
staff
report
is
a
22
little
narrow.
It
only
talks
about
nickel
metal
hydride
23
in
any
depth.

24
The
cost
effectiveness
of
battery
EVs
improves
as
25
technology
gains
are
made,
fuel
cell
vehicles
show
promise
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
310
1
for
the
long­
term.

2
I'd
be
happy
to
entertain
questions.

3
CHAIRPERSON
LLOYD:
Thank
you.
Questions
from
4
board
members?

5
Again,
thank
you
very
much,
Bill.
But
I
stress
6
for
witnesses
again,
I'm
not
­­
from
the
faced
expression
7
I'm
getting
from
some
of
you,
it's
not
a
desire
here.
We
8
are
under
time
constraints.
We
have
a
long
way
to
go.

9
We're
trying
to
absorb
all
this
information.

10
So
if
you
flood
us
with
a
lot
of
stuff
we
have
to
11
sort
out,
it
makes
it
very
difficult
for
us.
So
that's
12
where
I'm
coming
from.
I
say
we
have
70
witnesses
to
go
13
and
if
it's
repetitive,
it
gets
very
difficult.

14
MR.
WARF:
It
would
be
easier
to
absorb
if
I
15
could
speak
a
little
more
slowly
and
explain
it.
I
think
16
that
we've
been
a
contributor
to
this
marketplace
too
17
and
­­

18
CHAIRPERSON
LLOYD:
I
agree.
But
remember
there
19
are
many
of
you
we
just
we're
giving
more
time
to
the
auto
20
manufacturers.
There
are
just
a
few
of
them
talking
21
today.

22
The
other
part,
Bill,
I
do
appreciate
you
23
providing
this
written
stuff
as
well,
so
we
do
have
this.

24
So,
again
let's
get
it
clear.
I'm
not
trying
to
show
any
25
bias
or
anything
here.
It's
a
matter
of
my
colleagues
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
311
1
we're
trying
to
go
through
­­
and
it's
very
difficult.
As
2
I
said
at
the
beginning,
we
don't
have
all
the
answers.

3
We
need
your
help
to
craft
this
through.

4
Staff
has
spent
hours
and
hours
and
hours
on
this
5
stuff.
So
please
understand
it
doesn't
­­
if
I
had
all
6
day
or
we
had
two
or
three
days,
that
would
be
optimum.

7
We
done
have
it
unfortunately.

8
Thanks,
John.

9
MR.
BOESEL:
Mr.
Chairman
and
members,
my
name
is
10
John
Boesel,
the
president
of
Calstart.
We
are
10
year
11
old
nonprofit
organization
that
works
with
companies
and
12
governments
to
try
to
help
develop
an
advanced
13
transportation
technology
industry,
and
in
the
process
14
trying
to
clean
up
the
air,
reduce
our
dependence
on
15
foreign
oil
and
slow
global
warming.

16
I
want
to
just
say
­­
and
all
my
comments
will
be
17
directly
related
to
the
staff
proposal,
is
that
going
18
through
this
review
again
is
very
difficult
for
a
number
19
of
our
member
companies
who
have
invested
in
the
20
regulations,
in
the
2001
regulations,
hope
that
they
would
21
be
coming
to
bear.
And
now
to
have
this
review
come
up
22
again
is
really
very
difficult
for
them.
It
creates
a
23
very
uncertain
marketplace.
And
one
in
which
it's
very
24
difficult
to
attract
investment.

25
We
see
the
staff
recommendation
as
effectively
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
312
1
eliminating
the
gold
standard.
Two
hundred
and
fifty
fuel
2
cell
vehicles
will
not
drive
fuel
cell
vehicle
technology.

3
Don't
get
me
wrong,
we
are
very
supportive
of
fuel
cell
4
technology.
We're
very
supportive
of
hybrid
technology.

5
We
believe
there
are
many
paths
to
the
future.

6
But
250
fuel
cell
vehicles
are
not
going
to
drive
7
that
industry
forward.
There
are
billions
of
dollars
8
being
invested
annually
in
fuel
cell
technology.
The
9
Japanese
plan
to
have
five
million
fuel
cell
vehicles
on
10
the
road
by
the
year
2020.
There
are
similar
large
scale
11
programs
planned
for
Hong
Kong
and
Singapore.

12
So
if
we
think
about
the
CARB
ZEV
Program,

13
driving
change,
this
­­
that's
to
that
­­
if
all
that's
14
left
is
250
fuel
cell
vehicles,
it
will
not
be
driving
15
change.

16
Hybrid
technology
is
very
impressive.
And
I
17
think
I
really
want
too
applaud
Toyota
and
Honda's
18
leadership
in
this
area.
And
I
think
they
have
shown
the
19
rest
of
the
market
that
there
is
a
demand
for
those
types
20
of
vehicles.
And
I
think
we
will
see
large
numbers
of
21
hybrid
electric
vehicles
sold,
whether
there
is
a
mandate
22
or
not.

23
And
I
question
whether
or
not
the
staff
proposal
24
simply
supports
what
will
be
occurring
in
the
marketplace.

25
In
terms
of
battery
electric
technology.
Have
we
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
313
1
really
seen
the
end
of
battery
technology
development?

2
Are
we
at
the
pinnacle?
Can
anybody
say
that
with
3
certainty?

4
We've
actually
seen
a
lot
of
progress
in
the
last
5
2
to
3
years.
Dr.
Anderman
had
has
view.
I
think
we
6
could
consult
other
people,
experts
who
have
opposing
7
views.

8
So
I
think
that
technology
is
evolving.
And
I
9
think
what
we
need
is
a
zero
emission
vehicle
standard.

10
We
do
need
to
be
driving
toward
that
gold
standard,
but
11
why
pick
a
winner.
Why
do
we
say
fuel
cells
over
ZEVs.
I
12
don't
know
that
it's
critical
that
we
make
that
13
distinction
at
this
point.

14
Now,
I
would
also
say
I
support
Board
Member
15
McKinnon
in
that
I
think
there's
a
very
important
role
for
16
plug­
in
hybrids.
And
perhaps
plug­
in
hybrids
could
also
17
be
part
of
that
gold
standard
going
forward.

18
I
think
the
original
2001
proposal
is
a
decent
19
proposal
as
it
stands.
It
could
be
refined.
There
could
20
be
some
additional
flexibility
in
there.
I
think
it
could
21
be
a
lot
less
complex.
And
I
think
creating
the
22
complexity
that
it
did
all
these
different
credits
allowed
23
for
a
gaming
of
the
system,
giving
away
of
advanced
golf
24
cars.
And
I
think
we
need
to
make
things
simpler
and
less
25
complex.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
314
1
That's
the
end
of
my
testimony.

2
CHAIRPERSON
LLOYD:
Thank
you.

3
(
Applause.)

4
CHAIRPERSON
LLOYD:
Any
comments
from
the
Board?

5
Okay.

6
Ed
Kjaer.

7
MR.
KJAER:
Thank
you,
Chairman
Lloyd,

8
distinguished
members
of
the
Board.
SCE
for
obvious
9
reasons,
I'm
sure
you
can
appreciate,
with
all
due
10
respect,
oppose
the
current
staff
proposal.
We've
been
a
11
long­
time
supporter
of
this
regulation.

12
For
over
10
years
our
shareholders
have
made
a
13
significant
investment
in
the
regulations
­­
because
of
14
the
regulations.
We
created
a
retail
company
called
15
Edison
EV.
At
the
time
that
the
regulations
were
16
retrenched
in
1998,
that
company
folded.
That
investment
17
was
lost.

18
Unlike
the
OEMs,
there
was
no
learning
or
patents
19
or
technology
related
to
EVs
that
we
could
then
pass
on
to
20
other
Edison
companies.
It
was
lost.

21
In
'
95
we
committed
to
meeting
our
energy
policy
22
act
E­
Pact
requirements
with
electric
drive
vehicles.
For
23
almost
ten
years
we're
been
acquiring
EVs
exclusively
to
24
meet
the
E­
Pact
requirement.
We're
were
one
of
the
first
25
to
buy
EV
prototypes,
which
I
might
add,
were
extremely
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
315
1
expensive.

2
Today
SCE
operates
the
largest
and
most
3
successful
fleet
of
EVs.
Working
with
the
State
we
4
developed
fire
and
safety
programs,
electric
vehicle,

5
implemented
off­
peak
rates
and
other
efforts
designed
to
6
help
CARB
and
the
State
achieve
the
goal
of
zero
emission
7
vehicles.

8
We
are
in
discussions
with
Toyota
at
the
moment,

9
the
only
OEM
prepared
to
provide
released
used
vehicles
to
10
you
us
in
the
next
2
or
3
years.
We
are
hoping
that
we'll
11
be
able
to
release
these
vehicles
in
enough
quantity
to
12
meet
our
E­
Pact
requirements,
at
least
bridging
through
13
the
ZEV
blackout
period,
which
we
see
2003
to
somewhere
14
between
2007
and
2009.

15
We
ask
you
to
encourage
the
OEMs
to
make
these
16
used
vehicles
available
to
the
users
in
the
State
and
17
certainly
to
help
utilities
meet
their
E­
Pact
requirement.

18
As
good
as
the
hybrids
are
and
I'm
referring
to
19
the
engine
hybrids
we
see
today,
they
are
not
the
best
20
they
could
be.
They
have
no
true
ZEV
mile
capability
and
21
they
still
rely
on
one
fuel
and
that's
petroleum.

22
With
the
EPRI
battery
report
that
we
wanted
to
23
present
this
morning,
I
believe
that
it
clearly
shows
that
24
the
next
logical
step
with
hybrids
is
adding
a
plug.

25
These
are
much
better
than
the
silver
category
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
316
1
hybrids
but
aren't
truly
gold
category
like
the
battery
EV
2
or
the
fuel
cell
EV.
From
SCE's
perspective,
plug­
in
3
products
such
as
City
EVs,
full­
size
EVs,
plug­
in
hybrids
4
and
fuel
cells
all
would
be
E­
Pact
compliant,
because
they
5
rely
on
an
alternative
fuel.

6
We
also
see
these
plug­
ins
as
a
bridging
7
technology.
They're
going
to
help
make
a
business
case
8
for
battery
EVs
stronger
and
they're
going
to
have
a
9
positive
impact
to
helping
to
lower
technology
costs
for
10
fuel
cells
in
the
future.

11
From
the
air
quality
perspective,
plug­
ins
emit
12
50
percent
less
NOx
and
ROG
than
an
engine
hybrid.
Up
to
13
50
percent
less
CO2,
and
mid­
size
SUV
plug­
in
hybrid
with
14
60
mile
ZEV
range
could
save
over
350
gallons
of
gasoline
15
annually
when
compared
to
engine
hybrid.
All
this
is
in
16
the
battery
report
and
I
do
encourage
the
Board,
if
they
17
haven't
had
a
chance
to
read
the
executive
summary.

18
You
are
going
to
see
a
presentation
following
me
19
that
is
a
compromise
proposal.
And
I
think
that
is
the
20
spirit
in
what
I
am
up
here
in
front
of
the
Board
today.

21
We
are
trying
to
work
with
staff
and
with
the
Board
to
22
reach
the
goals
of
clean
air
in
California.

23
CHAIRPERSON
LLOYD:
Is
it
chose
to
the
end?

24
MR.
KJAER:
Yes,
it
is.

25
I
do
encourage
the
Board
and
frankly
all
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
317
1
stakeholders
to
continue
the
march
toward
ZEVs.
We
ask
2
CARB
to
address
the
ZEV
blackout
2003/
2010.
We
ask
you
to
3
consider
how
to
incent
and
encourage
OEMs
to
continue
to
4
release
existing
ZEVs,
even
ZEVs
that
were
originally
5
registered
out
of
state,
encourage
them
to
come
back
into
6
the
State.

7
Help
us
bridge
this
'
03
to
'
07
blackout
period,

8
and
frankly
reaffirm
this
regulation
and
help
the
9
stakeholders
such
as
the
utilities
to
be
reassured
that
10
their
past
investments
are
secure
and
in
our
E­
Pact
11
compliance
is
viable
with
electric
drive.

12
Thank
you.

13
CHAIRPERSON
LLOYD:
Thanks,
Ed.

14
Any
questions?

15
Thank
you.

16
Dave
Modisette,
Bonnie
Holmes­
Gen,
Roland
Hwang.

17
(
Thereupon
an
overhead
presentation
was
18
Presented
as
follows.)

19
MR.
MODISETTE:
Thank
you,
Mr.
Chairman
and
20
Members
of
the
Board.
I'm
Dave
Modisette.
I'm
the
21
Director
of
the
California
Electric
Transportation
22
Coalition.
And
there's
actually
quite
a
few
things
I'd
23
like
to
say
to
the
Board
today,
but
because
of
the
time
24
constraints,
I'm
just
going
to
jump
right
into
a
25
compromise
proposal.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
318
1
We
did
get
the
message
last
week
loud
and
clear
2
that
we
needed
to
come
forward
with
a
very
specific
3
proposal
and
one
that
tried
to
build
off
of
the
staff
4
proposal.

5
­­
o0o­­

6
MR.
MODISETTE:
And
so
what
we
are
going
to
7
explain
to
you
today
is
a
compromise
proposal.
We
feel
8
like
it's
a
middle­
of­
the­
road
proposal.
It's
not
9
everything
that
we
want.
It's
not
everything
that
other
10
stakeholders
want.
But
we
do
think
it's
a
proposal
that
11
many
of
the
stakeholder
groups
we
believe
would
be
able
to
12
rally
around
and
support.
It
has
five
parts.

13
The
first
part
is
to
have
modest
but
known
ZEV
14
requirements
in
each
and
every
year
from
2005
through
15
2014.
Within
those
requirements,
we
think
that
there
16
should
be
technology
diversity
and
options,
flexibility
17
for
automakers
to
make
choices
within
those
options.
We
18
think
the
near­
term
ZEV
numbers
need
to
be
increased.
And
19
I'm
going
to
show
you
the
numbers
in
just
a
minute.

20
In
2015,
we
believe
we
should
actually
return
to
21
the
so­
called
red
line,
that's
the
number
of
vehicles
that
22
was
defined
in
the
2001
regulation.
This
proposal
also
23
allows
flexibility,
so
that
if
you
did
want
to
establish
a
24
minimum
requirement
for
fuel
cell
vehicles,
you
know,
that
25
is
a
part
­­
or
could
be
a
part
of
this
proposal.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
319
1
­­
o0o­­

2
MR.
MODISETTE:
Mr.
McKinnon
asked
for
the
3
numbers.
These
are
our
numbers.
You
can
see
we
actually
4
start
with
pretty
modest
numbers
from
2005
through
2008.

5
There
are
vehicles
there
expressed.
And
it
says
instead
6
requirement
or
fuel
cell
vehicle
equivalent
there
on
the
7
left­
hand
column.
So
that
if
an
auto
manufacturer
8
actually
wanted
to
make
all
of
their
vehicles
in
fuel
9
cells,
those
would
be
the
numbers
that
they
would
produce.

10
From
2005
through
2008,
there
are
500
fuel
cell
11
equivalent
vehicles
there.
So
we
have
doubled
the
number
12
of
fuel
cell
vehicles
in
the
staff
proposal.

13
However,
what
we
would
propose
to
do
is
to
allow
14
other
types
of
technologies
to
qualify.
And
so
on
the
15
right­
hand
side
there
you
see
we
have
a
scenario
where
an
16
auto
manufacturer
decides
that
they
want
to
do
50
percent
17
of
their
requirement
in
fuel
sell
vehicles.

18
So
you
can
see,
let's
just
take
the
first
year
19
2005
as
an
example.
All
of
the
automakers.
This
is
for
20
all
six
automakers
would
do
25
fuel
cell
vehicles.
Then
21
they
would
have
a
choice
of
either
doing
500
Type
2
EVs.

22
Now,
these
are
the
full
function
EVs
or
they
could
do
23
1,000
Type
1
EVs,
which
are
the
City
Cars.

24
Or
in
our
proposal,
we
believe
that
plug­
in
25
hybrids
should
be
another
option
available
to
automakers
PETERS
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1
under
this
pathway.
And
in
this
example,
they
could
do
2
750
HEV
20s,
that's
a
plug­
in
hybrid
with
a
20­
mile
range.

3
After
2008
we
do
have
ramp
up.
We
believe
it's
a
4
very
modest
ramp
up.
It's,
you
know,
much
fewer
number
of
5
vehicles,
you
know,
than
others
are
asking
for,
but
it
6
does
ramp
up
to
quite
significant
numbers
by
2014.
And
7
then,
as
I
said,
by
2015
we're
actually
back
on
the
red
8
line
requirements
in
the
2001
regulations.

9
­­
o0o­­

10
MR.
MODISETTE:
The
second
part
of
the
compromise
11
is
that
what's
referred
to
in
the
staff
report
as
the
2001
12
base
requirements
pathway,
should
reflect
the
actual
13
provisions
of
the
2001
adopted
ZEV
regulations,
after
14
correcting
for
legal
issues.
I
think
one
of
the
things
15
that's
difficult
to
understand
in
the
staff
proposal
is
16
that
the
staff
proposal
does
not
do
this.
They
make
it
17
sound
like
it
does
this.
But
there
are
5
or
6
18
concessions,
if
you
will,
weakenings
of
the
2001
19
regulation
in
what's
referred
to
as
the
base
requirements.

20
And
we
believe
that's
a
mistake.
I
mean,
one
of
21
the
things,
we're
tying
to
do
here
is
to
give
automakers
a
22
choice
where
they
can
choose
the
base
pathway
or
they
can
23
go
to
the
alternative
compliance
path.

24
And
we
want
them
to
go
to
the
alternative
25
compliance
path,
because
that's
the
way
we
get
rid
of
this
PETERS
SHORTHAND
REPORTING
CORPORATION
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362­
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1
ZEV
blackout
problem.
So
the
thing
to
do
is
to
allow
2
automakers
to
pursue
the
2001
base
requirement
pathway,

3
but
don't
make
it
so
attractive
to
them,
don't
put
so
many
4
concessions
in
that
that
they
will
decide
to
do
that
5
instead
of
doing
the
alternative
compliance
pathway.

6
­­
o0o­­

7
MR.
MODISETTE:
Number
three.
Eventually
we
want
8
to
get
back
to
a
full
2
percent
pure
ZEV
requirement,
a
9
gold
requirement.
Under
the
staff
proposal
there's
10
eligibility
of
so­
called
silver
vehicles
into
the
gold
11
system
for
ever.
So
we
believe
that
the
staff
proposal
12
does
not
get
back
to
or
provides
no
pathway
to
a
full
2
13
percent
gold
requirement.

14
So
the
third
part
of
our
compromise
is
that
there
15
should
be
some
phase
out
of
eligibility
of
silver
vehicles
16
in
the
alternative
compliance
pathway
to
meet
a
17
manufacturer's
gold
obligation.

18
And
the
way
we
would
actually
propose
to
do
it
is
19
to
phase
out
by
vehicle
types
so
that
you
start
in
the
20
early
years
through
2008
with
all
the
silver
vehicles
21
eligible,
even
mild
hybrid
vehicles,
which
would
normally
22
be
PZEVs
would
be
eligible
in
that
category.
That's
fine.

23
We
can
accept
that.

24
But
then
in
the
next
category,
we
think,
you
25
know,
you
should
make
that
more
strict
and
drop
out
some
PETERS
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1
of
the
weaker
silver
vehicles,
all
the
way
until
the
last
2
section,
which
would
be
2012
through
2014.
We
believe
3
only
the
best
of
the
best
silver
vehicles,
which
would
4
include
plug­
in
hybrid
vehicles
and
some
of
the
other
5
technologies,
you
know,
the
more
exotic
technologies.
The
6
technologies
that
are
actually
giving
you
much
better
air
7
quality
than
just
a
standard
AT
PZEV.
Those
should
be
in.

8
And
then
eventually
in
2015
all
the
silver
9
vehicles
would
be
phased
out,
as
I
said,
and
we'd
be
back
10
to
a
red
line
requirement.

11
CHAIRPERSON
LLOYD:
Dave,
are
you
coming
to
a
12
close?

13
­­
o0o­­

14
MR.
MODISETTE:
Yes.
Just
two
more
points.

15
Fourth
is
to
close
the
so­
called
16
placed­
in­
service
loophole,
which
contains
no
minimum
17
requirement
for
a
vehicle
to
be
in
California.
We
think
18
that
that
can
be
done
with
a
relatively
easy
incentive
19
multiplier.
And
it
goes
directly
to
this
issue
that
20
you're
talking
about
to
provide
incentives
for
21
manufacturers
to
re­
lease
vehicles
or
even
to
sell
the
22
vehicles
to
people.

23
Those
automakers
that
do
that
should
get
more
24
credit.
And
we
have
a
specific
proposal
to
give
them
more
25
credit
if
they
do
that.

PETERS
SHORTHAND
REPORTING
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916)
362­
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1
­­
o0o­­

2
MR.
MODISETTE:
Last
point.
Technology
Review
3
Panel.
Under
the
staff
proposal,
it's
proposed
for
2005
4
or
6.
We
just
don't
think
that
that
makes
very
much
sense
5
with
a
program
that's
only
going
to
begin
in
2005.
How
6
much
data
are
you
going
to
have
to
be
able
to
evaluate
the
7
technology.
So
we
think
it
would
be
make
sense
to
have
8
several
years
worth
of
experience
with
this
program,
these
9
are
requirements
in
place,
before
you
do
that
evaluation.

10
So
it's
our
recommendation
that
you
postpone
that
to
2009
11
or
later.

12
As
I
said,
this
builds
off
the
staff
proposal.
I
13
think
it
corrects
its
major
flaws.
It's
a
14
middle­
of­
the­
road
compromise
and
I
believe
that
many
of
15
the
stakeholders
could
support
this.

16
Thank
you.

17
CHAIRPERSON
LLOYD:
Thank
you
very
much,
David.

18
A
very
constructive
situation.

19
(
Applause.)

20
CHAIRPERSON
LLOYD:
Professor
Friedman.

21
BOARD
MEMBER
HUGH
FRIEDMAN:
Okay.
I
had
a
22
couple
quick
questions.
First
of
all,
you
mentioned
the
23
2001
base
requirements
pathway,
and
that
the
staff
report
24
and
recommendation
is
weakening
in
4
or
5
or
6
respects.

25
Could
you
identify
that
for
me?

PETERS
SHORTHAND
REPORTING
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916)
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1
MR.
MODISETTE:
Yeah.
And
they're
actually
­­
if
2
you
look
at
the
hard
copy
that
I
passed
out,
there's
a
3
more
detailed
explanation
of
the
proposal
and
that's
4
actually
­­

5
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
I've
got
a
6
whole
book
here.
And
I'm
sorry
I
just
­­

7
MR.
MODISETTE:
It's
not
in
the
book.
The
book
8
is
unrelated
to
that.

9
BOARD
MEMBER
HUGH
FRIEDMAN:
Okay.

10
MR.
MODISETTE:
This
is
what
I
tried
to
identify.

11
You
know,
I
think
that
this
is
accurate.
I
hope
this
is
12
accurate.
But
one
of
the
problems
is
that
the
regulations
13
are
so
complex
that
it's
difficult
even
for
a
person
14
that's
been
working
in
this
field
for
many
many
years
as
I
15
have.

16
Here's
what
they
are.

17
BOARD
MEMBER
HUGH
FRIEDMAN:
I
have
it
here
now.

18
Thank
you.

19
I
can
look
at
it
quickly.
I
would
like
to
ask,
I
20
think,
Dr.
Bill
as
well,
if
the
staff
would
respond,
if
21
they
have
any
comments
on
these
proposals.

22
EXECUTIVE
OFFICER
WITHERSPOON:
I'm
going
to
give
23
a
general
response
and
ask
to
help
me
with
the
rationale
24
for
each
individual
change.

25
In
general,
as
we
picked
up
the
regulation
from
PETERS
SHORTHAND
REPORTING
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1
2003
and
moved
it
to
2005,
we
had
to
address
what
happened
2
in
3
and
4.
And
so
some
of
the
changes
we're
trying
to
3
keep
momentum
going
and
reflect
that
when
the
reg
took
4
effect
again
in
'
05.

5
And
other
things
we
did,
for
example,
we
had
a
6
40­
vehicle
fuel
cell
­­
40
credits
for
fuel
cell
vehicles
7
that
was
to
have
expired
this
year.

8
And
when
we
picked
that
up
and
moved
it
into
'
05,

9
we
had
to
ratio
all
the
other
ZEV
type
credits
to
be,
you
10
know,
a
fair
ratio.
So
we
had
cascading
effects.

11
Dave's
proposal
also
talks
about
having
change
12
the
minimum
performance
requirements
for
hybrid
electrics.

13
Well,
in
point
of
fact,
we
threw
out
the
entire
mechanism
14
we
had
before
and
created
a
new
one.
This
was
part
of
the
15
legal
challenge.

16
And
as
we
did
that
a
three­
tier
concept
emerged,

17
which
includes
mild
hybrids,
stronger
hybrids,
the
high
18
voltage,
high
powered,
those
different
characteristics
19
staff
talked
to
you
about
before.
And
so
it
wasn't
so
20
much
a
weakening
as
a
diversification
of
hybrid
categories
21
as
we
learned
more
about
them
from
the
different
22
automakers.

23
Some
of
the
other
things
that
have
been
brought
24
to
our
attention
is
when
you
used
a
neighborhood
electric
25
vehicle
to
meet
a
gold
requirement,
it
counted
as
a
real
PETERS
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1
vehicle
in
the
baseline
of
what
you
sold,
but
it
only
2
counted
as
1.5
for
credit.
And
so
you
were
digging
3
yourself
a
hole
because
the
next
year
you
had
to
make
more
4
electric
vehicles
and
you
had
a
greater
obligation.

5
So
we
asked
by
auto
manufacturers
can
they
6
subtract
the
pure
electrics,
or
pure
ZEVs
they
built
in
7
any
given
year
before
we
calculated
their
obligation
for
8
the
next
year,
so
they
weren't
hurting
themselves
by
9
making
ZEVs.

10
And
then
we
also
changed
the
battery
warranty
11
requirements
for
hybrid
vehicles
that
had
been
15
years.

12
We
Went
to
10.
We
kept
the
same
mileage
of
150,000
miles.

13
And
this
was
necessary
given
the
technical
data
you
saw
14
about
battery
life
and
the
financial
liability
for
having
15
to
stand
behind
them
and
being
told
that
hybrids
simply
16
would
not
come
to
market
with
a
15­
year
warranty,
and
we
17
were
working
against
ourselves
in
wanting
to
see
more
18
silver
vehicles
on
the
road.

19
In
none
of
those
instances
were
we
trying
to
20
weaken
the
2001
amendments,
but
just
to
make
them
coherent
21
and
carry
them
forward
and
have
every
technology
weigh
22
appropriately
against
the
next.

23
MR.
MODISETTE:
And
maybe
just
to
clarify,
I'm
24
not
objecting
to
those
changes
in
the
alternative
25
compliance
pathway.
I
think
that
those
changes
are
PETERS
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1
additional
positive
things
that
are
going
to
draw
2
automakers
to
that
pathway,
which
is
what
you
want.

3
But
if
you
make
all
those
same
changes
in
the
4
alternative
compliance
pathway
in
the
base
path,
then
5
you're
just
encouraging
automakers
to
go
to
the
base
path
6
and
then
we're
going
to
have
tremendous
ZEV
blackout.

7
CHAIRPERSON
LLOYD:
Dr.
Friedman
and
Mr.

8
McKinnon.

9
BOARD
MEMBER
WILLIAM
FRIEDMAN:
I
just
wonder
if
10
staff
could
also
comment
about
the
suggestion
about
the
11
tech
review
panel
being
put
off.

12
EXECUTIVE
OFFICER
WITHERSPOON:
In
our
staff
13
report
we
had
suggested
a
date
by
which
the
independent
14
review
panel
would
convene
based
on
the
customary
three
15
model
year's
lead
time
that
are
given
to
automakers
before
16
we
impose
any
regulatory
requirements.

17
It
has
been
brought
to
our
attention
that
they
18
might
not
need
that
much
lead
time
depending
on
what
the
19
target
is.
If,
for
example,
in
the
next
period
of
time
20
each
manufacturer
needed
to
build,
let's
say,
500
fuel
21
cell
vehicles
a
piece,
they
could
potentially
do
that
in
a
22
single
year
toward
the
end
of
the
three­
year
window,
and
23
not
have
to
go
into
production
and
not
have
to
know
three
24
years
before
2009
what
the
requirement
is
going
to
be,

25
because
they
could
build
them
all
in
2011.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
But
as
you
choose
and
whatever
number
you
all
2
come
up
with,
if,
you
in
fact,
put
a
number
in
today,
the
3
higher
it
is,
the
sooner
the
panel
would
have
to
convene
4
and
give
them
some
guidance,
because
it
works
backwards
in
5
terms
of
production
line
changes,
versus
hand
built,

6
supply
commitments,
et
cetera
in
order
to
know
who
they're
7
going
to
accomplish
that
goal.

8
CHAIRPERSON
LLOYD:
Yes,
Mr.
McKinnon.

9
BOARD
MEMBER
McKINNON:
I,
for
one,
am
pleased
to
10
see
numbers.
And
I
think
there's
a
lot
of
logic
to
this.

11
Some
of
the
reluctance
to
move
very
far
is
that
there's
12
one
in
particular
and
marginally
some
other
auto
companies
13
that
really
went
and
did
what
­­
there's
actually
a
14
couple
­­
that
really
kind
Of
went
and
did
the
job.

15
And
so
there's
sort
of,
should
we
be
penalizing
16
them
or
should
we
be
making
them
do
something
early
if
17
they
did
what
they
were
supposed
to
do.

18
And
I
guess
what
I
think
the
beauty
of
this
19
proposal
is
is
that
it's
saying
we
had
a
2001
rule.
We
20
were
serious
as
a
heartache
about
the
2001
rule.

21
And
so
if
folks
were
going
down
the
line
of
22
following
that
rule,
understanding
there
was
a
lawsuit
and
23
there
are
some
things
we
had
to
correct
and
maybe
double
24
counting
of
cars
is
something
we
shouldn't
be
doing
in
25
terms
of
the
requirement
numbers.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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329
1
But
essentially,
you
know,
there's
the
2001
rule.

2
Somebody
is
going
down
that
path.
Great.
Perfect.

3
That's
what
we
said
we
waned.
Somebody
did
it.
We
should
4
be
happy.
You
know,
we
should
be
happy
about
that.

5
To
the
extent
a
lawsuit
caused
there
to
be
this
6
break
that
isn't
a
one­
year
break,
it
really
works
out
to
7
be
more
than
that,
because
of
how
­­
you've
laid
out
some
8
numbers
that
give
an
alternative
way
to
get
there.

9
And,
you
know,
everybody
I
met
with
in
the
last
10
week,
I've
said
put
some
numbers
on
the
table.
And
you
11
did.
Thank
you.
And
I
think
they're
worthy
of
serious
12
consideration.

13
CHAIRPERSON
LLOYD:
Thank
you.

14
Ms.
D'Adamo.

15
BOARD
MEMBER
D'ADAMO:
Ditto.
I
appreciate
you
16
doing
this.
I
know
I
asked
you
the
same
question,
and
I
17
am
hoping
that,
depending
on
if
it
looks
like
we
may
end
18
up
going
two
days,
would
like
to
really
encourage
staff
to
19
take
a
close
look
at
this.
Any
future
witnesses,
it
would
20
be
helpful
for
us
to
hear
what
you
have
to
say
about
this
21
proposal.
I
don't
know
if
the
future
witnesses
have
had
a
22
chance
to
digest
it
or
not.
And
I
would
encourage
the
23
automakers
that
are
here
to
sit
and
chew
on
these
numbers
24
as
well.

25
Thank
you.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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330
1
CHAIRPERSON
LLOYD:
Yes.

2
BOARD
MEMBER
HUGH
FRIEDMAN:
I
just
want
to
3
clarify.
You
are
both
referring
to
this
proposal
as
a
4
modification
of
the
alternate
pathway,
correct?

5
BOARD
MEMBER
McKINNON:
No,
it's
­­

6
BOARD
MEMBER
HUGH
FRIEDMAN:
You
talked
about
7
2001
­­

8
BOARD
MEMBER
McKINNON:
It's
saying
the
2001
rule
9
essentially
­­
if
you
chose
to
go
down
that
pathway,
you
10
really
ought
to
go
down
that
pathway
without
us
making
a
11
bunch
of
changes.

12
BOARD
MEMBER
HUGH
FRIEDMAN:
I
understand.
But
13
that
wasn't
this.

14
BOARD
MEMBER
McKINNON:
Yeah.
No,
it
says
that.

15
It
says
go
down
the
2001
pathway,
the
real
one.
The
one
16
that
we
originally
set
out
to
do,
or
do
this
alternative.

17
BOARD
MEMBER
HUGH
FRIEDMAN:
This
is
the
18
alternative.

19
BOARD
MEMBER
McKINNON:
Yes.

20
BOARD
MEMBER
HUGH
FRIEDMAN:
So
we're
saying
the
21
same
thing.
I
wanted
to
understand
that.
I
was
confused.

22
CHAIRPERSON
LLOYD:
This
is
a
variation
of
the
23
staff
today.

24
EXECUTIVE
OFFICER
WITHERSPOON:
Just
a
25
clarification
to
Mr.
McKinnon.
No
one
can
do
the
2001
reg
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
331
1
exactly
the
way
it
was
done,
so
there
do
have
to
be
some
2
changes
as
we
reinitialize
in
2005.

3
MR.
MODISETTE:
Just
to
explain,
the
binder
you
4
received
is
a
compilation
of
letters
of
resolutions
from
5
local
governments
of
letters
from
labor
and
business
and
6
environmental
organizations.
You
know,
these
are
the
ones
7
that
we
are
aware
of.
And
these
are
all
letters
of
8
opposition
to
the
existing
staff
report.

9
Obviously,
we
have
not,
you
know,
been
able
to
10
get
back
to
all
these
people
and
show
them
the
compromise.

11
But
I
believe
that
many
of
these
organizations
would
12
support
the
compromise
proposal.

13
CHAIRPERSON
LLOYD:
We
have
received
those
14
letters
too.
We're
aware
of
them,
not
in
such
a
neat
15
form,
but
we're
thank
you.

16
MR.
MODISETTE:
Thank
you.

17
CHAIRPERSON
LLOYD:
Thank
you
very
much.

18
Bonnie
Holmes­
Gen,
Roland
Hwang,
Jason
Mark.

19
MS.
HOLMES­
GEN:
Mr.
Chairman
and
board
members,

20
Bonnie
Holmes­
Gen
with
the
American
Lung
Association
of
21
California.
Get
that
name
correct
this
time.

22
I'm
here
also
on
behalf
of
the
California
23
Thoracic
Society.
I
first
of
course
want
to
thank
you
for
24
your
strong
record
of
support
for
the
ZEV
Program.
It's
25
gratifying
to
hear
that
you're
serious
as
a
heartache.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
332
1
I'll
tell
you,
it's
very
gratifying.

2
(
Laughter.)

3
BOARD
MEMBER
HUGH
FRIEDMAN:
Well,
as
a
past
4
president
of
the
American
Heart
Association,
you
could
5
have
thought
of
a
better
analog.

6
(
Laughter.)

7
MS.
HOLMES­
GEN:
I
am
here
to
oppose
the
staff
8
proposal.
As
I
believe
you're
aware
from
our
letter
from
9
the
Lung
Association
and
our
allied
groups
that
we
have
10
very
serious
concerns
about
the
staff
report.
We
feel
it
11
falls
very
short
of
achieving
the
objectives
that
we
would
12
like
to
see
it
achieve.

13
Specifically,
we're
most
concerned
that
it
does
14
not
continue
to
push
zero
emission
vehicle
advancement
15
with
clear,
enforceable
and
increasing
regulatory
goals
16
over
the
next
decade
and
beyond.
We
believe
this
is
17
critical.
And
that
basically
means
you
need
to
set
a
18
number,
I
guess,
in
the
parlance
you've
been
using
today.

19
We
believe
that
by
proposing
no
zero
emission
20
vehicle
requirement
in
2009
and
after,
the
staff
report
21
sends
a
very
bad
signal.
It
sends
a
signal
that
the
car
22
companies
may
be
let
off
the
hook.
I
think
that
it
23
fosters
a
wait­
and­
see­
what­
happens
mode
rather
than
24
purposeful
forward
movement
on
the
part
of
the
car
25
companies.
And
that's
our
great
concern,
and
why
we
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
333
1
believe
you
do
need
to
set
a
number
for
2009
and
after.

2
CHAIRPERSON
LLOYD:
Bonnie,
you've
got
some
very
3
nice
recommendations.
Could
you
get
to
them.

4
MS.
HOLMES­
GEN:
But
I
do
want
to
just
remind
you
5
that
establishing
technology
forcing
goals,
I
mean,
that's
6
been
the
key
aspect
of
the
Board's
legacy,
and
you
need
to
7
continue
that
legacy
in
air
pollution
control.
And
please
8
don't
be
afraid
of
setting
goals
in
the
future,
even
if
9
you
have
to
come
back
and
revisit
them
again,
that's
part
10
of
being
a
visionary
body,
and
we
expect
that
of
you.

11
So
together
with
my
colleagues
from
the
Union
of
12
Concerned
Scientists,
and
the
Natural
Sources
Defense
13
Council,
we
have
forwarded
some
specific
recommendations
14
to
you.

15
The
concepts
are
similar
in
many
ways
to
what
16
you've
heard
from
my
colleague
Dave
Modisette.
And
the
17
specific
action
items
that
we
are
asking
you
to
take
are
18
number
one
to
redesign
the
alternative
compliance
pathway
19
and
the
staff
proposal
to
allow
other
ZEV
technologies
to
20
compete,
but
we
want
to
meek
sure
that
there
is
a
fuel
21
cell
floor
in
that
number.

22
So
you
have
a
proposal
in
the
staff
report
of
250
23
fuel
cell
vehicles
by
2008.
We
think
that's
a
very
24
extremely
reasonable
goal
for
fuel
cell
vehicles,
but
if
25
we're
going
to
open
up
this
pathway
to
diversity,
we
want
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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334
1
to
see
you
add
some
additional
vehicles
to
that
number.

2
We're
recommending
a
fuel
cell
vehicle
equivalent
number
3
of
500
for
that
first
phase.

4
We
believe
that
that
number
is
very
reasonable.

5
And
my
colleague
Jason
Mark
will
by
explaining
in
more
6
detail
why
that
number
is
very
reasonable
for
that
7
timeframe.
And
it
would
also
allow
you
to
open
the
door
8
to
battery
technologies
right
away.

9
Second
of
all,
we're
asking
you
to
establish
a
10
minimum
requirement
for
car
companies
to
produce
at
least
11
5,000
new
zero
emission
vehicles
or
fresh
ZEVs,
fuel
cell
12
equivalent,
that
is
cumulatively
in
the
2009
to
2011
13
period,
and
then
restore
the
ramp
to
the
2001
program.

14
Again,
we
believe
these
are
reasonable
but
15
challenging
numbers
for
the
car
companies.
They're
very
16
much
in
line
with
other
projections
that
have
been
made
17
specifically
by
those
in
the
fuel
cell
industry.
And
the
18
Board
would
not
be
picking
a
number
out
of
the
air
if
you
19
established
this
number.
This
is
not
about
picking
20
numbers
out
of
the
air
and
just
going
on
no
rationale.

21
We're
talking
about
going
on
solid
rationale.

22
Car
companies,
as
you
know,
have
said
they
can
make
23
commercially
marketable
fuel
cell
vehicles
by
the
end
of
24
this
decade.
And
we
know
we
already
have
the
viable
25
alternative
of
batteries
of
various
kinds
also
to
fill
in
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
335
1
on
some
of
those
numbers.

2
Definitely
if
you
set
a
goal
of
5,000
over
that
3
people
or
higher,
you
would
be
setting
a
very
reasonable
4
goal,
but
a
technology
forcing
goal.
We're
asking
you
to
5
do
that.
Third,
we
ask
you
to
move
the
expert
review
6
panel
to
a
post­
2006
timeframe.
I
think
my
colleague
7
suggested
2009,
but
just
any
time
in
that
latter
half
of
8
the
decade
is
much
more
reasonable
than
the
earlier
time
9
period
that's
projected
in
the
staff
report.

10
We
believe
it's
critical
to
ensure
time
for
new
11
steps
in
technology
advancement
to
occur
to
allow
the
12
panel
to
get
a
better
picture
of
the
pace
of
technology
13
advancement.
And
we
also
want
to
make
sure
that
when
you
14
adopt
your
resolution
that
you
clarify
that
the
panel's
15
scope
should
be
narrowly
defined
to
focus
on
technology
16
review.

17
We
don't
want
their
to
be
any
confusion
that
this
18
is
a
policy
making
body
of
some
type
that's
going
to
19
actually
establish
specific
numbers
of
vehicles
that
the
20
Board
should
consider.

21
And
fourth,
we
do
strongly
support
the
staff
22
proposed
increased
requirements
for
silver
category
AT
23
PZEVs.
And
my
colleague
Roland
Hwang
is
going
to
go
into
24
more
detail
about
the
importance
of
that
piece
of
the
25
staff
recommendation.
And
again
we
believe
that
it
is
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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336
1
especially
important
to
have
these
high
numbers
in
the
2
silver
category
especially
when
the
Board
is
providing
3
more
flexibility,
and
really,
you
know,
giving
some
4
additional
flexibility
and
assistance
to
the
car
companies
5
in
meeting
the
gold
category
requirements.

6
And
you
know
we
believe
that
the
silver
category
7
AT
PZEVs
you
know,
are
proven
technology.
Hybrid
8
passenger
vehicles
are
here.
There's
a
commercial
case
to
9
be
made
for
them.
Car
companies
are
signing
up
to
put
new
10
models
of
hybrid
electric
vehicles
out.
So
we
think
it's
11
very
reasonable
to
stand
by
those
increasing
numbers
over
12
the
next
decade
that
are
in
the
staff
report.
We
13
appreciate
your
strong
record
of
support.

14
And
finally,
I
just
want
to
remind
you
that
this
15
decision
is
a
historic
decisions.
And
we'll
establish
a
16
legacy
for
the
future.
And
we
believe
that
it's
important
17
for
you
to
continue
your
historic
role
of
leading
the
18
country
and
the
world
in
pushing
vehicle
technologies
and
19
making
the
car
companies
meet
new
challenges,
setting
real
20
and
continuing
challenges
before
the
car
companies,

21
ignoring
the
nay
sayers
that
say
we
can't
do
it,
embracing
22
diverse
zero
emission
technologies
and
staying
at
the
23
forefront
of
public
health
protection.

24
So
we
want
to
encourage
you
and
challenge
you
to
25
move
forward
and
set
a
strong
number.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
337
1
Thank
you.

2
CHAIRPERSON
LLOYD:
Thank
you,
Bonnie.

3
Jason
and
Roland
switched.
So
Jason
Mark,
Roland
4
Hwang,
Tom
Gage.

5
(
Thereupon
an
overhead
presentation
was
6
Presented
as
follows.)

7
MR.
MARK:
Thank
you.
If
you're
amenable
to
8
switch,
it
will
make
things
a
little
bit
more
efficient.

9
CHAIRPERSON
LLOYD:
By
all
means.

10
MR.
MARK:
I
first
want
to
thank
you
for
your
11
endurance,
not
just
for
today,
and
I
think
this
evening
12
and
perhaps
tomorrow,
but
also
for
your
endurance
in
13
maintaining
the
path
to
zero.

14
I
want
to
talk
about
the
needs
to
really
maintain
15
that
path
to
zero
as
we
move
forward.
My
name
is
Jason
16
Mark
and
I'm
an
engineer.
So
thank
you
for
the
earlier
17
comments
about
giving
engineers
a
chance,
and
director
of
18
the
clean
vehicles
program
at
the
Union
of
Concerned
19
Scientists,
which
is
a
nonprofit
partnership
between
20
citizens
and
scientists.

21
We've,
I
think,
had
over
2000
of
our
members
22
throughout
California
write
to
you
directly
in
support
of
23
strengthening
this
regulation
in
the
proposal.
In
24
particular
UCS
is
concerned
about
the
staff's
proposal
25
that
it
could
stall
progress
in
the
technology
fuel
cells
PETERS
SHORTHAND
REPORTING
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362­
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1
that
the
industry
itself
claims
is
the
next
generation
of
2
vehicle
technology.

3
And
we
believe
that
there
is
ample
evidence
to
4
justify
much
more
concrete
determination
about
fuel
cell
5
vehicles
in
the
future,
and
far
more
aggressive
than
even
6
the
optional
numbers
that
staff
has
discussed
this
7
morning.

8
­­
o0o­­

9
MR.
MARK:
So
towards
that
end,
let
me
just
touch
10
first
on
automakers
statements
regarding
fuel
cells.

11
Nearly
everyone
in
the
automobile
industry
has
dubbed
fuel
12
cells
as
the
technology
of
the
future.
And
they
have
13
actually
been
quite
aggressive
about
how
quickly
they
14
think
that
technology
can
move
to
market.

15
I'm
particularly
taken
by
General
Motors'

16
assertion
that
they
think
they'll
have
a
compelling
and
17
affordable
car
by
2010,
which
is
in
stark
contrast
to
the
18
$
100,000
vehicle
premium
incremental
price
that
the
staff
19
suggests
in
the
initial
statement
of
reasons.

20
So
again,
I
think
we
have
to
at
some
point
take
21
the
automakers
at
their
word
and
the
tremendous
amount
of
22
press
that
they've
been
bringing
to
the
issue
of
fuel
cell
23
technology
and
really
suggest
that
they
can
deliver
on
the
24
promise
that
they're
articulating
to
us.

25
Second
of
all,
let
me
talk
very
briefly
about
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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339
1
targets
that
the
fuel
cell
industry
itself
has
2
articulated.
This
is
­­
you
can
see
all
of
the
groups
3
that
have
signed
onto
this
document
that
talk
about
very
4
realistic
targets
for
getting
to
zero.
The
path
forward
5
is
the
name
of
this
document.
And
this
is
both
fuel
cell
6
industry
as
well
as
potential
fuel
suppliers
to
the
fuel
7
cell
industry.

8
­­
o0o­­

9
MR.
MARK:
They
talk
about
500
passenger
vehicles
10
from
the
period
2004
through
2007
and
5,000
passenger
11
vehicles
annually
from
'
08
to
'
11.
So
in
other
words
12
there
will
be
20,000
vehicles
over
that
four­
year
period,

13
from
2008
to
2011.
That's
a
real
concrete
target
that
the
14
fuel
cell
industry
itself
has
set
out.

15
­­
o0o­­

16
MR.
MARK:
And
finally
this
is
the
chart
that
17
many
of
folks
have
already
talked
about
from
the
18
Department
of
Energy,
which
was
actually
created
in
19
collaboration
with
several
automakers
over
a
year
ago.

20
The
Department
of
Energy's
vision
is
to
start
building
on
21
the
50
fuel
cell
vehicles
that
will
be
demonstrated
in
22
California
through
the
fuel
cell
partnership
over
the
next
23
year
or
two,
go
to
that
next
stage
of
a
ten
fold
increase
24
to
500
and
then
finally
5,000
by
a
2012.

25
My
sincere
hope
is
that
the
State
of
California
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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340
1
will
be
at
least
as
aggressive
in
promoting
fuel
cell
2
vehicles
as
the
Bush
administration.
And
I
note
for
3
reference
that
in
fact
our
colleagues
across
the
seas
have
4
already
articulated
far
more
aggressive
goals.

5
The
Japanese
Ministry
of
Economy,
Trade
and
6
Industry
has,
for
example,
recently
articulated
a
goal
of
7
50,000
fuel
cell
vehicles
by
2010,
perhaps
a
bit
more
in
8
line
with
the
sorts
of
public
statements
that
we're
9
hearing
from
General
Motors.

10
­­
o0o­­

11
MR.
MARK:
To
help
put
the
staff's
perspective
in
12
perspective,
I
wanted
to
just
share
with
you
some
of
the
13
numbers
that
the
bar
on
the
left
for
each
of
the
times
14
period
either
by
2008
or
from
2009
through
2011
would
be
15
the
2001
rule.
So
you
could
see
that
if
automakers
were
16
to
meet
those
requirements
through
the
fuel
cell
17
technology,
it
would
have
required
6,500
by
2008
and
18
nearly
30,000
by
over
the
time
period
2009
through
2011
19
cumulatively.

20
Next,
just
two
months
ago
staff
was
proposing
21
numbers
more
on
the
order
of
1,000
by
2008
and
11,000
over
22
the
next
three
year
time
period.
The
latest
proposal
in
23
front
of
you
today
is
250
by
'
08
and
zero
thereafter.

24
Then
I
put
on
the
chart,
the
two
sets
of,
sort
of,

25
benchmarks
that
I
just
described,
the
Department
of
Energy
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
341
1
goals
500
by
2008
and
5,000,
in
this
case
their
goal
is
by
2
2012,
and
I
want
to
be
clear
about
that.
I've
shown
here
3
by
2011.

4
And
second
of
all,
the
fuel
cell
industry
which
5
was
500
by
2007
but
an
additional
5,000
per
year
6
thereafter.
So
that's
how
those
numbers
work
out.

7
And
what
really
what
I
think
we're
asking
you
to
8
do
today
is
not
pick
a
number
out
of
thin
air,
but
in
fact
9
pick
a
number
in
a
range
that
is
well
established
by
both
10
the
fuel
sell
industry
the
Department
of
Energy
and
their
11
research
targets
as
well
as
some
of
the
statements
that
12
we've
been
hearing
from
the
automakers
themselves.

13
And
we
think
that
quite
clearly,
and
I
want
to
14
crystal
clear
on
this
point,
we
believe
that
the
numbers
15
in
the
2009
time
period
are
absolutely
vital
for
three
16
reasons.

17
Number
one,
to
maintain
the
flow
of
investment
to
18
fuel
cell
technology.
Number
2,
to
focus
and
foster
19
complementary
policies
that
speed
the
fuel
cell
20
transition.

21
And
number
three
to
ensure
ultimately
steady
22
progress
to
zero.

23
­­
o0o­­

24
MR.
MARK:
And
so
here's
my
final
­­
sorry,

25
nearly
final
slide.
This
is
the
proposal.
This
is
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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342
1
path
to
zero
proposal
that
we're
recommending
to
the
Board
2
today,
which
would
require
by
2008
500
fuel
cell
vehicles.

3
Over
the
next
three
years,
5,000.
Over
the
next
three
4
years
30,000.

5
And
the
concept
there
is
to
build
on
going
from
6
the
50
vehicles
that
we'll
see
by
year's
end
in
the
fuel
7
cell
partnership
to
500,
then
to
5,000
and
then
ultimately
8
build
a
smooth
ramp
getting
back
to
what
was
originally
9
called
the
red
line
or
the
original
program
by
2015,
and
10
that's
how
we
derived
that
30,000
vehicle
estimate.

11
OUr
vision
is
to
build
on
the
same
mechanism
12
proposed
by
staff
in
the
alternative
compliance
path.
So
13
these
would
be
new
vehicles.
And
moreover,
though
we
14
think
that
diversity
is
absolutely
critical,
and
that
this
15
shouldn't
just
be
fuel
sell
vehicle
numbers,
but
in
fact
16
ZEV
technology.
We've
expressed
the
numbers
in
terms
of
17
fuel
cell
vehicle
equivalents,
if
you
will.

18
But
we
think
that
all
technologies
ought
to
play.

19
ANd
we,
in
fact,
support
the
option
that
staff
has
20
proposed
to
also
create
hydrogen
infrastructure
credits
21
over
the
next
three
perhaps
six
months
to
develop
a
22
concept
for
crediting
hydrogen
infrastructure.

23
­­
o0o­­

24
MR.
MARK:
The
last
slide.
To
put
this
all
in
25
perspective,
one
is
to
just
sort
of
give
you
a
sense
for
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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343
1
where
we've
been
and
how
this
path
to
zero
might
map
out.

2
The
red
line
on
the
top
is
our
estimate
of
the
fuel
cell
3
requirements
associated
with
the
January
2001
rule.
And
4
the
green
dash
line
is
the
number
that
we
propose.

5
To
be
clear,
we're
not
proposing
annual
6
requirements.
We're
proposing
the
flexibility
that
you
7
gain
by
offering
three
year
averages,
essentially,
or
8
cumulative
requirements,
to
allow
some
of
the
industry
9
laggards
to
catch
up
and
the
accelerated
folks
to
continue
10
to
move
forward.

11
We
also
think
that
the
technology
is,
even
though
12
we've
shown
just
fuel
cell
vehicles
should
be
ZEVs.

13
­­
o0o­­

14
MR.
MARK:
So
in
sum,
our
proposal
is
500
15
vehicles
over
the
time
period
by
2008,
5,000
fuel
cell
16
vehicles
over
the
next
three
years,
30,000
and
then
return
17
to
the
rule
by
2015.
We
urge
you
to
send
the
strong
18
signal
the
automakers
need
to
develop
fuel
cell
19
technologies
on
a
timeframe
that
we
believe
is
reasonable.

20
CHAIRPERSON
LLOYD:
Thank
you
Jason.
One
21
question
of
clarification.
I
know
the
answer,
but
the
22
5,000
vehicles
that
DOE,
of
course
that's
a
national
23
number
that's
not
a
California
number.

24
MR.
MARK:
It
is
a
national
number.
My
view
is
25
that
we're
not
going
to
be
seeing
a
lot
fuel
cell
vehicles
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
in
Louisiana,
number
1.
And
number
2,
more
importantly,

2
your
staff
had
proposed
allowing
these
vehicles
to
qualify
3
for
another
LEV/
ZEV
states.
And
under
that
schematic,
of
4
course,
I
think
you
get
the
extremes
of
let's
say
whether
5
and
temperature
environments
that
you
really
want
to
test
6
the
fuel
cell
technology.

7
So
I
think
you'd
capture
I
think
a
reasonable
8
timeframe.
And
remembering
also
the
fuel
cell
industry
is
9
talking
about
15,000
vehicles
in
that
same
time
frame.

10
CHAIRPERSON
LLOYD:
It's
the
fuel
cell
industry,

11
not
the
auto
industry.

12
MR.
MARK:
Right.

13
CHAIRPERSON
LLOYD:
Professor
Friedman.

14
BOARD
MEMBER
HUGH
FRIEDMAN:
Your
numbers,
have
15
you
had
a
chance
to
compare
your
numbers
with
Mr.

16
Modisette's.

17
MR.
MARK:
I
think
the
principle
is
very
much
the
18
right.

19
BOARD
MEMBER
HUGH
FRIEDMAN:
But
the
numbers
are
20
quite
different.
And
when
you
speak
of
equivalent
BEV
21
requirement
would
be
hire,
what
kind
of
ratio
were
you
22
thinking
of.

23
MR.
MARK:
We
have
not,
in
fact,
thought
through
24
the
types
of
credit
scheme
that
would
be
needed,
but
I
25
think
it
stands
to
reason
that
battery
electric
vehicles
PETERS
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1
would
garner
fewer
credits
than
fuel
cells
given
where
the
2
technology
is.

3
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

4
BOARD
MEMBER
McKINNON:
I
just
want
to
kind
of
5
compare
the
two
proposals
as
best
as
I
get
it
here.
In
6
the
Modisette
proposal,
it's
initially
about
300,
but
it's
7
segmented
annually.
You
know,
there's
like
a
50
and
100
8
and
150.

9
Yours,
you
have
three
years
that
you're
saying
10
five
years,
500.
So
if
you
looked
at
three
years
in
his,

11
it's
300.
That's
in
terms
of
­­
so
there's
three
years
12
sliding
sort
of
gives
companies
sort
of
a
running
start.

13
Okay.
And
then
the
next
period
it's
5,000
versus
14
3,000.
And
then
the
next
period
it's
the
same,
I
believe,

15
30,000,
30,000.
And
the
other
differences
is
three
year
16
sliding.

17
Great.
Thank
you
for
doing
numbers
and
a
basis
18
for
them.

19
This
is
good
stuff.

20
MR.
MARK:
Thank
you.

21
CHAIRPERSON
LLOYD:
Roland
Hwang,
Tom
Gage,
Dana
22
Muscato.

23
MR.
HWANG:
Thank
you,
Mr.
Chairman,
Members
of
24
the
Board.

25
(
Thereupon
an
overhead
presentation
was
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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346
1
Presented
as
follows.)

2
MR.
HWANG:
I
appreciate
the
opportunity
to
3
present
our
perspective
on
this
very
important
program.

4
My
name
is
Roland
Hwang.
I'm
a
senior
policy
analyst
with
5
the
Natural
Resources
Defense
Council.

6
And
what
I
want
to
speak
to
you
this
evening
7
about
is
the
role
of
the
advanced
technology
partial
ZEV
8
pathway,
particularly
the
hyper
electric
vehicles
in
9
getting
us
to
zero.
We
view
this
as
a
critical
pathway.

10
­­
o0o­­

11
MR.
HWANG:
The
role
of
the
AT
PZEV
pathway,
I
12
think,
there's
a
broad
consensus
and
you
heard
that
today.

13
Dr.
Anderman,
I
think
you
heard
from
Toyota.
But
there
is
14
broad
consensus.
There
should
be
no
debate
that
hyper
15
electric
vehicles
are
a
stepping
zone
to
fuel
cell
16
vehicles
and
other
pure
zero
emission
vehicle
17
technologies.

18
That
issue,
I
believe
there
is
very
little
or
19
absolutely
no
debate
about.

20
Second
of
all,
which
there
is
a
little
bit
more
21
discussion
here
today,
is
the
issue
of
volumes.
I
think
22
We've
seen
past
history
volumes
do
matter.
Higher
volumes
23
will
bring
down
the
cost
of
the
electric
drive
components,

24
as
well
as
AT
PZEVs,
also
natural
gas
vehicles,
for
25
example,
the
gaseous
storage
technologies,
that
will
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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347
1
enable
fuel
cell
vehicles
also.
So
volumes
do
through
2
matter.

3
­­
o0o­­

4
MR.
HWANG:
Finally
the
degree
of
hybridization.

5
A
hybrid
with
a
bigger
electric
motor
with
more
batteries
6
is
going
to
have
a
large
componentry
link
to
a
pure
zero
7
emission
vehicle.

8
­­
o0o­­

9
MR.
HWANG:
When
we're
looking
at
getting
to
say
10
fuel
cell
vehicle
commercialization
or
any
kind
of
pure
11
ZEV
commercialization,
essentially
we
need
­­
in
this
12
case,
my
example
will
be
on
fuel
cells,
but
the
same
13
principles
apply
for
battery
electrics.
We
need
to
have
14
three
pathways
converge,
three
technology
pathways
15
converge.

16
First,
in
terms
of
fuel
cells,
we
need
the
fuel
17
cells
stacks
performance
and
cost
to
come
down
to
a
point
18
where
we
can
have
a
competitive
product.

19
Second,
of
course,
we
need
hydrogen
20
infrastructure
to
be
in
place.
And
third,
we
need
21
electric
drive
components
to
come
down
in
cost
and
22
increase
in
performance
to
the
level
where,
as
a
package,

23
the
fuel
cell
infrastructure
electric
drive
componentry
24
all
can
come
together
to
deliver
a
commercializable
25
product,
again
where
it's
fuel
cells
or
battery
electric.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
In
this
case,
the
example
is
on
fuel
cells.

2
The
zero
emission
program
can
address
all
three
3
critical
paths.
And
I
think
it's
very
important
to
4
understand
that
the
zero
emission
vehicle
program
has
5
evolved
quite
a
bit
over
time,
and,
in
my
mind,
has
6
successfully
evolved
to
meet
some
of
the
new
challenges
7
that
we
have
faced
an
what
we
have
learned
over
time.
On
8
the
first
pathway
fuel
cell
stack
and
auxiliaries,
clearly
9
pure
gold
requirement,
we're
asking
the
Board
to
restore
10
some
level
of
pure
gold
requirement.

11
That
will
help
us
with
the
fuel
cell
stacks
and
12
the
auxiliaries
that
going
along
with
the
fuel
cells.

13
Hydrogen
infrastructure,
we've
heard
discussions
14
today
about
infrastructure
credits.
We
need
those
15
infrastructure
credits
and
more
in
order
To
get
that
16
critical
component
in
place.

17
And
of
course
the
electric
drive
components,
what
18
I'm
focusing
on
my
presentation
is
incentivized
through
19
the
you
AT
PZEV
pathway.
Again,
these
are
the
three
20
critical
pathways
the
program
addressed
in
a
coherent
21
manner.

22
­­
o0o­­

23
MR.
HWANG:
Volumes,
of
course,
do
matter.
And
24
this
is
the
cost
curve
from
one
of
my
colleagues
for
BPM,

25
Brushes
Permanent
Matter
electric
motors,
electric
motors
PETERS
SHORTHAND
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916)
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1
for
hybrid
electric
vehicles
the
same
as
for
fuel
cell
or
2
battery
electric.

3
As
you
can
see
in
this
cost
curve,
the
numbers
4
for
the
cost
keep
coming
down.
This
is
obviously
per
5
manufacturer
keep
coming
down
to
the
tune
of
1,000
volume
6
level.

7
­­
o0o­­

8
MR.
HWANG:
The
AT
PZEV
volume
I
think
we've
9
heard
some
discussion
about
whether
those
are
achievable
10
or
not.
Just
some
quick
numbers.
And
what
I'm
going
to
11
compare
them
are
to
announced
goals
for
production
global
12
production
numbers,
I
believe,
they
are.
So
you
have
to
13
divide
your
global
production
numbers
by
what's
required
14
in
California
and
the
northeast.
But
you
can
see
that
15
Toyota
in
2005
would
be
required
to
build
17,000
vehicles,

16
if
they
did
not
use
any
of
their
gold
credits.
And
that
17
would
include
California
and
the
northeast.

18
And
General
Motors
in
2007,
would
be
32,000.
The
19
reason
I
show
these
years
is
that
Toyota
has
announced
a
20
global
production
goal
of
300,000.

21
­­
o0o­­

22
(
Thereupon
the
power
for
the
overhead
23
presentation
went
out.)

24
MR.
HWANG:
And
General
Motors
has
announced
a
25
global
­­

PETERS
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1
CHAIRPERSON
LLOYD:
That's
the
new
mechanism
for
2
cutting
you
off.

3
(
Laughter.)

4
MR.
HWANG:
Yes.
That's
a
very
effective
way.

5
The
technology
definitely
works
there.

6
I'm
almost
done.
If
I
had
maybe
30
more
seconds
7
and
indulgence
I
can
complete
it.
I
don't
know
if
we
can
8
get
the
over
heads
back
up.

9
CHAIRPERSON
LLOYD:
We've
got
the
copies
here.

10
MR.
HWANG:
I
guess,
I'm
flying
a
little
blind
11
here.
Let
me
see
what
do
I
have
here.

12
The
other
point,
of
course,
on
the
volumes
that
13
being
achievable,
I've
listed
out
a
number
of
reasons
why,

14
by
the
volumes,
from
the
staff,
a
March
proposal,
are
15
likely
on
the
high
side.

16
But
primarily
I
want
to
one
focus
the
fact
that
17
we
are
all
absolutely
hoping
that
you
will
restore
the
18
zero
emission
vehicle
pure
gold
requirements,
and
that
19
will
also
drive
down
the
volumes
of
AT
PZEVs.
We
do
not
20
think
the
volumes
of
AT
PZEVs
are
a
problem
in
terms
of
21
market
achievability.

22
We
think
that
there
are
clearly
volume
benefits
23
to
the
technology
performance
cost
at
the
levels
even
in
24
the
staff
report.
But
I
wanted
to
reinforce
the
concept
25
that
the
numbers
are
likely
to
be
lower.

PETERS
SHORTHAND
REPORTING
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1
Level
of
hybridization
matters.
Let
me
point
out
2
that
staff
is
proposing
to
allow
some
allowances
for
3
what's
called
42
volt
stop
start
systems.

4
­­
o0o­­

5
MR.
HWANG:
Clearly,
there
is
a
difference
in
6
technology
between
a
vehicle
with
a
five
kilowatt
motor,

7
it
runs
on
42
volts,
versus
a
fuel
cell
vehicle
that
would
8
run,
say,
on
a
much
higher
voltage
say
600
volts
and
9
electric
motor
size
80
kilowatts.

10
­­
o0o­­

11
MR.
HWANG:
So
in
sum,
the
recommendations
that
12
we
have,
of
course,
is
to
restore
the
gold
ramp,
as
my
13
colleague
Jason
Mark
spoke
of.

14
Second
of
all,
is
to,
as
staff
proposed,
require
15
AT
PZEVs
to
backfill
any
differences
between
the
2001
16
amendments
and
whatever
transpires
at
the
end
of
this
17
board
meeting.

18
Finally,
we
recommend
you
adopt
credit
levels
19
future
AT
PZEV
vehicles,
because
we
do
think
the
volumes
20
are
achievable
and
we
think
that
there
are
significant
21
economies
of
scale
and
innovation
benefits
going
out
to
22
those
higher
numbers.

23
And
finally,
we
do
oppose,
from
a
technical
24
perspective,
oppose
the
inclusion
of
the
42
volt,
so
25
called,
Level
1
vehicles.
But
at
very
minimum,
we
would
PETERS
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362­
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1
ask
the
Board
to
make
sure
they
enforce
the
phase
out
of
2
that
to
be
used
on
silver
compliance
by
2008.

3
Thank
you
for
your
attention.

4
CHAIRPERSON
LLOYD:
Thank
you
very
much.

5
Any
questions,
comments?

6
Thank
you
very
much
Roland.

7
Tom
Gage,
Dana
Muscato,
Daniel
Rivers.

8
MR.
GAGE:
Good
evening,
Chairman
and
Members
of
9
the
Board.
I'm
Tom
Gage.
I'm
with
AC
Propulsion,
a
come
10
in
Los
Angeles
that
builds
EVs
one
at
a
time.
We
would
11
like
to
build
them
by
the
hundreds
or
the
thousands,
and
12
for
that
reason,
I
oppose
the
production
mandate.

13
I'd
like
to
run
through
my
presentation.
I
will
14
edit
for
brevity
as
I
go.
I
hope
I
remain
coherent.

15
Let
me
start.
California
needs
electric
vehicles
16
now
more
than
ever.
We
need
their
environmental
benefits,

17
and
more
important
we
need
their
fundamental
energy
18
benefit.
The
efficient
use
not
imported,
not
petroleum,

19
secure
and
renewable
energy
resources.

20
EV
should
be
a
major
element
of
California
21
environmental
policy.
Do
not
shirk
away
from
these
22
broader
objectives
using
the
excuse
that
it's
not
an
air
23
quality
issue.
Energy
consumption
affects
air
quality.

24
As
many
of
you
know,
energy
consumption,
green
25
house
gas
emissions
and
air
quality
are
closely
related.

PETERS
SHORTHAND
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362­
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1
They
cannot
always
be
neatly
partitioned
according
to
2
organizational
boundaries
of
the
State
bureaucracy.
You,

3
the
Air
Resources
Board,
have
the
EV
bit.
I
urge
you
to
4
run
with
it.

5
The
United
States
uses
too
much
petroleum.
We
6
use
45
percent
of
the
worlds
gasoline
for
five
percent
of
7
the
world's
people.
Our
per
capita
energy
consumption
of
8
petroleum
for
transportation
is
double
or
triple
of
9
developed
economies.
It's
order
of
magnitude
is
higher
10
than
countries
like
China,
Brazil
and
India,
all
of
whom
11
are
pursuing
their
legitimate
aspirations
to
high
levels
12
of
automobility.

13
We
need
to
reduce
gasoline
consumption
by
using
14
it
more
efficiently
and
substituting
other
energy
sources
15
for
it.
Starting
now,
we
need
to
substitute
new
sources
16
of
energy
from
secure
non­
petroleum
and
renewable
17
resources
for
gasoline.
And
we
need
to
use
that
energy
18
efficiently.

19
EVs
do
this
better
than
ULEVs,
SULEV,
PZEVs,
AT
20
PZEVs,
hybrids,
fuel
cell
vehicles
or
any
other
type
of
21
automobile.

22
This
is
why
now,
especially
we
must
not
turn
away
23
from
EV
commercialization.
The
original
ZEV
mandate
was
a
24
bold
and
commendable
to
achieve
EV
commercialization.

25
Thirteen
years
later,
it's
obvious
to
me
that
the
PETERS
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362­
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1
production
mandates
have
not
worked.
I
don't
think
they
2
ever
will.

3
Under
the
staff
proposal
of
March
5th,
the
4
expected
number
of
commercial
zero
emission
vehicles
is
5
zero.
You
can
and
should
avoid
this
outcome.

6
At
the
end
of
my
remarks,
I
will
briefly
describe
7
how
you
can
shift
the
momentum
you
have
created
in
a
new
8
direction.
You
can
work
around
the
adversarial
stale
mate
9
that
has
developed
between
staff
and
automakers,
and
you
10
can
foster
continuing
progress
toward
EV
11
commercialization.

12
The
automakers
say
EV
commercialization
is
doomed
13
to
failure.
I
disagree,
for
at
least
five
reasons.
EV's
14
do
have
enough
range
for
typical
driving,
because
most
15
trips
are
short.
Batteries
are
getting
better,
a
lot
16
better,
as
we
have
heard.
People
like
EVs.
EVs
have
17
virtues
that
offset
their
limitations.

18
A
small
electric
car
drives
like
a
bigger
more
19
luxurious
car.
Listen
to
EV
driver
testimonials.
They
20
have
a
product
they
really
like.
They're
not
odd
balls.

21
Do
not
underestimate
or
overlook
your
ability
to
22
affect
change
in
the
market.
And
be
certain
that
where
23
the
market
goes
the
automakers
will
follow.
Okay
could
24
you
go
to
slide
seven
please.

25
­­
o0o­­

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1
MR.
GAGE:
Fuel
cell
vehicles
use
more
energy
2
than
EVs.
A
hydrogen
cycle
has
too
many
steps
with
losses
3
at
each
step.
So
even
at
high
cell
efficiency,
the
4
overall
efficiency
Of
the
fuel
cell
vehicle
is
low.
This
5
chart
compares
a
RAV4
electric
to
a
Honda
FCX.
And
you
6
can
see
that
well
to
wheels
in
terms
is
mile
per
gallon,

7
EV,
is
better
oh
even
a
lot
better
than
a
fuel
cell
car.

8
This
is
an
example
of
how
air
quality
goals
9
cannot
be
separated
entirely
from
energy
considerations.

10
Next
slide,
please.

11
­­
o0o­­

12
MR.
GAGE:
Fuel
cell
stocks
are
down,
much
more
13
than
the
Market
as
a
whole.
This
may
just
mean
that
the
14
market
view
fuel
cell
commercialization
as
beyond
its
15
investment
horizon.
But
more
important
it
reduces
the
16
auto
maker
executives
appetite
for
R&
D
and
fuel
cell
17
related
acquisitions
because
it
will
no
longer
boost
their
18
stock
price.

19
Auto
makers
are
reevaluating
their
fuel
cell
20
programs.
Many
do
not
want
even
to
commit
to
building
a
21
few
dozen
fuel
cell
vehicles
over
the
next
five
years.

22
Next
slide.

23
­­
o0o­­

24
MR.
GAGE:
Why
not
EVs?

25
The
need
is
real
and
increasing.
The
technology
PETERS
SHORTHAND
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362­
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1
is
ready
and
getting
better.
Compared
to
1990
or
even
2
1996,
a
market
has
been
established.
There
are
no
3
near­
term
alternatives
to
the
EV
for
the
ZEV
vehicle.

4
I
decided
to
take
a
step
back
and
get
5
perspective,
and
this
is
what
I
saw.
In
the
big
picture
I
6
see
a
State
and
a
nation
that
need
the
benefit
EVs.
I
see
7
automakers
so
desperate
to
avoid
any
production
mandate
8
that
they
spend
millions
of
dollars
on
ZEV
R&
D
but
they
9
refuse
to
produce
any.

10
I
see
dozens
of
fleets
and
thousands
of
11
individuals
who
will
buy
EVs
if
they
can.
I
see
at
least
12
five
and
maybe
10
small
companies
like
mine
here
in
13
California,
and
many
others
throughout
the
world
that
want
14
to
build
and
sell
EVs
and
EV
components,
but
who
cannot
15
attract
sufficient
investment
due
to
market
uncertainty.

16
And
finally,
I
see
and
agency
of
the
state
that
17
has
regulatory
authority
over
automakers
and
established
18
outreach
programs
to
the
EV
market,
and
knowledge
staffers
19
some
whom
are
enthusiastic
about
EVs.

20
All
these
elements
are
in
a
log
jam
right
now.

21
No
one
can
move.
I
do
not
see
why
you,
the
Board,
cannot
22
break
up
the
log
jam
with
revised
regulations
that
incite
23
less
automaker
opposition
to
provide
more
certainty
for
24
planning
and
foster
a
market
environment
where
25
entrepreneurs
will
have
their
best
opportunity
to
sell,

PETERS
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1
and
consumers
their
best
opportunity
to
buy
electric
2
vehicles.

3
Here
is
what
I
propose.

4
Next
slide.

5
­­
o0o­­

6
CHAIRPERSON
LLOYD:
Can
you
bring
it
to
a
close,

7
Tom.

8
MR.
GAGE:
Yes,
these
are
my
five
9
recommendations.

10
Do
not
abandon
EV
commercialization.
Do
not
11
approve
the
March
5th
proposed
modifications.
It
is
not
12
in
California's
best
interests
to
abandon
EV
13
commercialization.

14
Second,
accept
the
fact
that
you
cannot
force
the
15
can
companies
to
build
EVs.
It
seems
that
you
have
lost
16
that
battle.
But
do
not
conceive
the
war
because
of
it.

17
Work
without
the
OEMs,
but
keep
pushing
for
EVs.

18
Third,
you
have
a
mandate.
Keep
it,
strengthen
19
it
and
enforce
it.
It
is
a
credit
mandate.
Car
companies
20
do
not
have
to
produce
EVs.
They
just
have
to
buy
credits
21
from
those
who
do.

22
Fourth,
join
forces
with
other
State
bodies
23
including
the
California
Energy
Commission,
the
PUC
and
24
the
Legislature.
This
is
about
energy
and
air
quality.

25
Restore,
strengthen
and
unify
California's
commitment
to
PETERS
SHORTHAND
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362­
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1
pioneer
the
transformation
to
electric
transportation.

2
And
fifth,
remember
the
car
buyers
are
the
real
3
agents
for
change
in
vehicle
technology.
What
people
buy
4
determines
what
automakers
build.

5
Last
slide,
please.

6
­­
o0o­­

7
MR.
GAGE:
Regulations
and
policies
that
provide
8
incentives
and
encouragement
to
both
supply
side
and
the
9
demand
side,
and
that
avoid
confrontation
with
the
10
automakers
will
give
EV
commercialization
the
best
chance
11
for
success.
If
it
fails,
it
will
have
failed
in
the
12
marketplace
not
in
back
rooms
and
court
rooms.

13
Next
slide.

14
­­
o0o­­

15
CHAIRPERSON
LLOYD:
Tom,
come
on.

16
MR.
GAGE:
If
it
succeeds,
you
can
be
sure
that
17
auto
companies
will
be
paying
attention
and
they
will
be
18
only
too
glad
to
join.
As
this
slide
shows,
they
can
do
19
this
so
well,
design,
invest,
manufacture
and
sell,
if
20
they
have
reason
to.
And
that's
really
what
you've
wanted
21
all
along.

22
Thank
you.

23
CHAIRPERSON
LLOYD:
Thank
you.

24
Dana
Muscato,
Daniel
Rivers,
Dan
Sturges.

25
MR.
MUSCATO:
Good
evening,
Dr.
Lloyd,
and
PETERS
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1
members
of
the
Board.
I'm
Dana
Muscato,
chief
Executive
2
Officer
of
Phoenix
Motorcars,
Ojai,
California.

3
We
build
full­
function
freeway
speed,
batter
4
electric
vehicles
for
purchase.
We
appear
today
in
5
opposition,
not
so
much
to
the
2003
proposed
changes
to
6
the
rule,
but
to
the
supplemental
changes
proposed
by
the
7
staff
early
this
month.

8
We
believe
that
for
the
Board
to
take
any
action
9
at
this
time
that
reduces
the
requirements
for
10
manufacturers
to
put
zero
emission
vehicles
on
the
road,

11
is
tantamount
to
snatching
defeat
from
the
jaws
of
12
victory.

13
It's
essential
to
maintain
a
pure
ZEV
gold
14
standard.
This,
after
all,
is
what
has
driven
the
15
development
of
the
various
power,
drive
train
and
battery
16
technologies
and
has
developed
the
infrastructure.

17
Phoenix
motorcars
currently
has
a
fleet
order
for
dozens
18
of
vehicles
and
request
for
quotes
on
fleets
equaling
19
hundreds
of
additional
vehicles.
You
all
know
how
much
20
demand
government
agencies
alone
have
put
out
there.

21
We
have
participated
in
various
CARB
workshops,

22
manufacturers
public
comment
forms,
advisory
committee
23
meetings
on
the
matter.
And
to
paraphrase
the
24
overwhelming
sentiment
of
all
the
participants
that
came
25
to
those
meetings,
ZEVs
on
the
road
in
California
now.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
360
1
Whatever
action
this
Board
takes
today,
that's
2
should
be
the
objective.
The
current
staff
proposal
3
eviscerates
the
zero
emission
vehicle
program,
and
4
guarantees
that
there
will
be
no
ZEVs
placed
in
service
in
5
California
in
this
decade.

6
I've
been
hearing
numbers
today,
dates
200
what,

7
2009,
2012,
2013.
I
think
someone
needs
to
say
this
is
8
2003.
What
are
we
doing
today?

9
The
technology
is
here
now.
The
public
10
acceptance
and
interest
are
here
now.
Put
ZEVs
on
11
California's
roads
now.

12
Thank
you.

13
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Thank
14
you
for
keeping
it
concise.
Daniel
Rivers,
Dan
Sturges
15
Michael
Coates.

16
DR.
RIVERS:
Mr.
Chairman
and
Members
of
the
17
Board,
thank
you
for
giving
me
the
opportunity
to
speak
18
here
today.
I'm
Dr.
Dan
Rivers,
president
of
Compact
19
Power,
a
small
company
making
battery
packs
for
hybrid
20
direct
electric
vehicles
and
related
application.

21
I've
labored
in
this
impossible
EV
supplier
22
industry
for
about
13
years
now,
starting
out
with
the
23
management
of
the
EV1
GM's
EV1
program.
And
now
going
on
24
to
battery
packs.

25
And
no
doubt
your
esteemed
Board
has
been
very
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
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1
important
inspiring
technological
improvement,
but
I'm
a
2
little
afraid
that
maybe
you
are
not
taking
due
cognizance
3
of
how
far
you
have
spurred
the
industry
and
how
far
the
4
battery
industry
in
particular
has
come.

5
I'm
here
to
speak
specifically
about
Lithium
Ion
6
batteries
and
the
promise
they
hold
for
the
hybrids,
for
7
the
fuel
cells
for
the
pure
electronics.
­­

8
My
company
took
the
hard
way,
doing
it
right.
We
9
make
manganese
based
lithium
ion.
We
can
make
cobalt
10
lithium
ion
you
go
down
a
blind
path
­­
a
blind
alley
11
because
you
can't,
in
the
end,
mass
produce
it.

12
By
taking
specific
energy
we
get
the
safety
and
13
the
cost
and
environmental
qualities
that
we
want
in
a
14
battery.
Belcorps
pioneered
this
kind
of
technology
in
15
1994
at
the
one
hundred
watt
hours
per
kilogram.

16
And
Dr.
Lloyd,
four
years
ago,
I
briefed
you
on
17
the
program
that
I
had.
And
I
proudly
told
you
that
I
had
18
achieved
123
watt
hours
per
kilogram.
Well,
I
guess,
I'm
19
about
the
only
one
holding
up
hardware
here,
but
here's
a
20
cell
we
made
more
recently
up,
164
watt
hours
per
21
kilogram.

22
Manganese.
And
we
expect
to
optimize
it
175.
If
23
you
put
this
in
a
EV1,
battery
pack
for
an
EV
1,
you
could
24
drive
it
300
miles
and
cut
the
weight
by
450
pounds.
And,

25
yes,
I
do
have
test
data
on
this
cell.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
362
1
We
have
made
similar
cells
from
hybrid
electric
2
vehicle
application,
just
the
same
size,
just
a
little
bit
3
thinner
achieving
2000
watts
per
kilogram
and
yet
getting
4
more
energy
per
kilogram
than
nickel
metal
hydride
5
technology.

6
The
cost
is
coming
down.
In
1994,
lithium
ion
7
technology
sold
for
$
3,000
per
kilowatt
hour.
Today
it's
8
$
275
per
kilowatt
hour
and
that
is
for
small
individually
9
wrapped
cells
using
lap
tops.

10
R&
D
is
continuing
to
improve.
As
we
all
know,

11
necessity
is
the
mother
of
invention.
And
it's
not
just
12
the
auto
industry
that's
pushing
this
technology,
but
also
13
the
military,
and
the
space
industries.
We
have
contracts
14
both
with
the
Air
Force
and
with
NASA.
And
so
all
of
15
those
are
combining
to
drive
the
technology
forward.

16
My
message
today
is
very
simple,
I
urge
the
Board
17
not
just
to
look
at
where
the
technology
has
been
or
where
18
we
think
it
may
have
been
one
or
two
years
ago
or
is
19
today,
but
to
try
to
project
a
little
bit.

20
The
fact
is
that
this
is
not
yet
mature
21
technology,
that
lithium
ion
is
advancing
rapidly,
and
the
22
few
problems
that
you
may
see
with
it
today,
will
no
doubt
23
be
done
away
with
in
future
years,
just
as
happened
with
24
nickel
metal
hydride.

25
So
my
point
is
simply
look
ahead
and
look
ahead
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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363
1
to
what
lithium
ion
will
be
and
not
only
what
it
is
today,

2
which
is
quite
remarkable
compared
to
just
a
few
years
3
ago.

4
Thank
you.

5
CHAIRPERSON
LLOYD:
Thank
you
very
much.

6
Just
a
question.
Did
you
speak
to
Dr.
Anderman
7
and
the
people
who
are
surveying
the
batteries.

8
DR.
RIVERS:
Pardon
me?

9
Yes,
I've
spoken
to
Dr.
Anderman.
And
I
respect
10
him
highly.
I
just
think
that
maybe
there's
a
difference
11
between
Him
and
your
board
and
me,
in
that
I'm
not
an
12
analyst
I'm
an
evaluator.
I
have
to
actually
produce
the
13
hardware.
And
I
think
I
kind
of
know
where
it
is
today
14
and
what
we're
achieving
today.
And
I
think
it's
quite
a
15
bit
ahead
of
where
it
was
two
or
three
years
ago.

16
And
so
I
think
that's
the
difference,
but
I
do
17
have
very
high
regard
for
Dr.
Anderman.
And
by
the
way,

18
the
cost
numbers
I
cited,
came
out
of
his
report
in
2001.

19
And
I
agree
with
those
numbers.
And
I
believe
they're
20
going
to
be
even
better
with
this
technology
here
because
21
the
materials
are
lower
cost.

22
CHAIRPERSON
LLOYD:
Thank
you
very
much.

23
Dan
Sturges,
Michael
Coates,
Tom
Fulks.

24
MR.
STURGES:
Hi.
My
name
is
Dan
Sturges.
I'm
25
Executive
Director
of
Mobility
Lab,
a
nonprofit
design
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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364
1
company
working
with
communities
and
cities
on
sustainable
2
transportation
systems.

3
I
quit
my
job
at
General
Motors
designing
cars
4
two
years
before
you
did
your
first
regulation
in
1990
to
5
pursue
designing
small
vehicles
and
that
work
led
to
the
6
first
NEV.
And
now
in
1997
I
started
working
with
ITS
7
Davis
on
transportation
systems
that
included
small
8
vehicles
with
car
sharing
and
with
transit.

9
And
most
recently,
I'm
a
subcontractor
to
10
CALTrans
me
on
the
new
car
sharing
statewide
initiative.

11
Essentially
I'm
hear
to
talk
about
the
NEV
12
essentially
the
way
it's
using
losing
credits
into
the
13
future
here
and
that
all
means
in
terms
of
solving
14
comprehensive
problems.
I've
been
here
all
day.
I've
15
heard
all
kinds
of
passionate
arguments
to
create
zero
16
emission
transportation
and
to
imagine
the
day
that
we
all
17
have
our
fuel
cell
cars.

18
And
so
sometimes
as
a
designer,
I
imagine
that.

19
So
if
it's
2020,
which
it
is
like
with
us
all
having
our
20
fuel
cell
cars.
And
if
we're
going
to
work
in
the
morning
21
in
San
Francisco
or
down
in
Los
Angeles
on
the
405,
we'll
22
probably
be
stuck
in
traffic,
in
our
$
40,000
fuel
cell
23
cars.

24
And
so
I'm
not
trying
to
solve
air
problems.
I'm
25
really
looking
at
air
problems,
but
also
congestion
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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365
1
problems,
and
also
how
to
make
transpiration
less
costly
2
for
people.
So
there's
a
lot
of
opportunities
now
to
look
3
at
systems
and
what
Mark
talked
about
with
the
Smart
4
Mobility
systems
is
really
something
that
needs
to
take
5
place
and
needs
to
develop.

6
I
see
a
real
interest
in
a
city
electric
vehicle
7
Board
here
today.
And
what
a
city
electric
vehicle
is
is
8
a
great
vehicle
that's
not
commercially
here
yet,
but
I'm
9
sure
not
too
far
down
the
street.
And
that's
a
nice
10
vehicle
to
could
be
used
to
drive
down
the
train
station
11
or
to
the
bus
station
as
sort
of
a
multi­
modal
solution.

12
But
that
vehicle
is
a
limited
range
vehicle
with
13
a
limited
top
speed.
It's
probably
not
for
the
freeway
14
like
the
Think
City
or
the
Ecom
or
the
Hyper
Mini.

15
They're
really
not
freeway
vehicles.
They're
local
16
vehicles.
And
that's
essentially
what
a
NEV
is.
A
NEV
is
17
also
a
local
vehicle
that
just
doesn't
go
as
fast
and
it
18
doesn't
go
as
far.

19
But
essentially
there's
a
price
point
to
this.

20
If
I'm
going
to
go
from
San
Francisco
one
day
on
BART
down
21
to
Fremont
or
out
to
Pleasant
Hill,
and
I
want
to
go
just
22
two
miles
from
the
BART
station,
if
there's
a
$
20,000
City
23
Car
there
to
be
rented
or
a
$
5,000
NEV,
which
is
going
to
24
cost
more
for
that
hour?

25
And
right
now
your
proposed
regulation
is
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
366
1
essentially
taking
NEV
off
the
table.
And
as
the
NEV
goes
2
off
the
table,
for
example,
the
credit
goes
down
to
.625,

3
then
it
goes
down
to
.15
in
2006.
A
City
vehicle
gets
4
like
seven
credits
and
the
NEV
gets
.15
and
if
you
put
the
5
City
Vehicle
into
the
transportation
system,
like
we're
6
talking
about
with
SanDEG
right
now
of
NEVs
driving
down
7
to
Vanpool.

8
Because
let
me
backup
for
one
second.
If
you're
9
in
New
York
City
and
you
take
transit,
you
can
get
off
the
10
train
and
get
to
where
you
need
to
go.
But
in
low­
density
11
American,
you
can't
and
you
need
a
vehicle
that
can
go
12
either
the
last
two
miles,
the
last
one
mile
or
the
last
13
five
miles.
And
we
need
a
toolbox
of
vehicles,
a
choice
14
of
vehicles.

15
And
right
now
as
you
take
the
NEV
off
the
line,

16
basically
what
you
get
is,
I
mean,
seven
or
eight
credits
17
for
the
City
Vehicle,
.15
for
the
NEV.
And
then
it
says
18
in
terms
of
the
shared
use
intelligence,
the
ZEV,
that
19
vehicle
gets
another
six
credits,
and
so
the
City
Vehicle
20
is
going
through
the
roof,
but
the
NEV,
you
say,
oh
the
21
NEV
is
not
eligible
to
earn
credit
for
a
transportation
22
system.

23
So
I
have
a
real
problem
with
that.
So
if
I'm
24
down
in
San
Diego
trying
to
get
somebody
to
get
a
NEV
and
25
get
down
to
Vanpooling,
which
takes
a
car
off
the
road
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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367
1
which
cuts
done
congestion
and
Does
exactly
what
you
want
2
to
do
with
reducing
VMT,
that's
not
getting
anything
­­

3
that's
actually
getting
less
credit
than
a
PZEV
that
might
4
be
a
new
General
Motors
Malibu
with
a
gasoline
car
that
5
would
go
right
onto
freeway.

6
So
I
guess
I
think
that's
really
your
policy
7
starts
conflicting
with
what
we're
trying
to
do
in
the
8
State
on
congestion.

9
Thank
you
for
that
time.

10
CHAIRPERSON
LLOYD:
Thank
you
very
much.
I'd
11
like
on
that
particular
one
since
Supervisor
DeSaulnier
12
has
been
intimately
involved
with
that,
how
do
you
13
respond?
I
think
you
make
a
good
point,
but
on
the
other
14
hand,
I
know
that
NEVs
have
also
got
a
bad
name.
But
15
you're
looking
at
­­

16
MR.
STURGES:
Well
people
attack
them
for
not
17
being
high
technology,
but
neither
is
bicycles
and
neither
18
is
walking.
And
we
need
to
start
finding
solutions
that
19
comprehensive
and
meaningful
and
make
living
in
California
20
better
and
get
past
these
terms
that
are
being
moved
back
21
and
forth.

22
CHAIRPERSON
LLOYD:
The
point
you
make
about
the
23
PZEV
getting
more
than
the
NEV,
in
that
particular
case
24
you
raise
and
issue
I
think.

25
Maybe
you're
not
ready?

PETERS
SHORTHAND
REPORTING
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1
BOARD
MEMBER
DeSAULNIER:
No,
I'm
ready.
I'm
2
wide
awake
down
here.
I'm
ready
to
go.
Are
you
going
to
3
cut
me
off
though,
if
I
go
on
to
long.

4
(
Laughter.)

5
BOARD
MEMBER
DeSAULNIER:
Please
do.
I
think
the
6
point
is
well
taken,
Dan.
I
think
what
Susan
has
learned
7
and
Dan
Spurling
and
you
and
your
work
together
is
a
tool
8
box
approach
is
a
right
approach
to
take.
And
I
think
9
that's
what
we're
going
to
try
to
do
with
looking
at
the
10
credits
and
the
three
months
after
we
pass
this.

11
MR.
STURGES:
Well
to
keep
it
at
.625,
even
12
though
that's
so
much
less
than
a
City
Vehicle,
but
just
13
to
keep
that,
that
would
be
enough
to,
you
know,
make
14
other
manufacturers
want
to
come
into
the
area,
just
keep
15
the
incentive
alive
for
this
vehicle,
rather
than
pushing
16
it
off
the
table
when
it
really
has
a
central
role
to
17
these
new
systems.

18
BOARD
MEMBER
DeSAULNIER:
I
think
the
question
is
19
a
toolbox
to
be
honest,
and
Alan
may
be
picking
on
me,

20
some
of
the
discussions
I've
had
with
him
and
with
Susan,

21
has
been
more
focused
on
the
City
Car
in
terms
of
22
something
viable
that
we
can
get,
the
auto
manufacturers
23
maybe
interested
in
placing.
And
since
you
mentioned
some
24
places
in
my
county
where
suburban
uses,
were
there
aren't
25
any
other
options
once
you
get
off
the
BART
station,
that
PETERS
SHORTHAND
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362­
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369
1
people
would
be
more
likely
to
use
the
NEVs.

2
MR.
STURGES:
The
parking
is
becoming
a
big
3
problem.
And
if
I'm
in
Pleasant
Hill
and
I'm
two
miles
4
from
the
station.
If
the
$
20,000
car
is,
you
know,
like
5
for
Flex
Car
who's
doing
rental
system,
it's
like
$
6
an
6
hour.
So
if
I
was
going
to
leave
BART
for
two
miles
and
7
pay
$
6
an
hour.
That's
$
20
for
that
trip
versus
a
NEV
8
might
be
$
2
an
hour.

9
BOARD
MEMBER
DeSAULNIER:
Well,
I
think
the
point
10
that
I
would
say,
and
I
appreciate
Alan
asking
me
this,
is
11
I
don't
think
I
disagree
with
you.
The
question
is
can
we
12
create
a
venue
within
the
credit
system,
and
we're
really
13
going
to
look
at
that
hard,
in
the
next
3
months
that
we
14
can
include
those
kind
of
incentives.
So
we're
flexible
15
enough,
but
we
can
also
bring
the
auto
manufacturers
to
16
the
table
to
use
in
Station
Car
projects
that
are
17
different.

18
MR.
STURGES:
Well,
sure
and
with
NEVs
we
can
get
19
started
now
showing
how
this
multi­
modalism
works
and
then
20
you
can
start
building
on
it
with
City
Vehicles
as
they
21
arrive.

22
BOARD
MEMBER
DeSAULNIER:
Well,
I
think
we
look
23
forward
to
working
with
you
particularly
in
the
next
three
24
months.

25
MR.
STURGES:
Thank
you.

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1
CHAIRPERSON
LLOYD:
Supervisor
Roberts,
and
Mr.

2
McKinnon.

3
Hold
on.

4
BOARD
MEMBER
ROBERTS:
Mr.
Chairman,
well,
I
5
don't
have
a
question,
but
I
want
to
comment,
is
we
went
6
through
this
discussion
in
San
Diego
just
a
couple
weeks
7
ago
and
we
decided
to
initiate
a
program.
But
unless
I'm
8
wrong,
it's
based
on
City
Vehicles
not
on
NEVs.

9
And
there
was
­­

10
MR.
STURGES:
Well,
the
SanDAG
people
we've
been
11
working
with
have
known
about
the
idea
of
NEVs
being
12
feeder
vehicles
to
transit
­­

13
BOARD
MEMBER
ROBERTS:
I'm
part
of
that.
I
was
14
part
of
that
vote,
part
Of
SanDAG.
I'm
not
talking
about
15
who
I
talked
to
I
was
there.
And
the
concern
was
to
have
16
vehicles
that
are
going
to
give
you
a
little
greater
17
range,
and
are
going
to
allow
you
to
get
out
on
the
road
18
systems
in
a
way
that
a
NEV
is.
I
don't
think
that
we
19
are
­­

20
MR.
STURGES:
No,
it
just
depends
on
the
21
environment.
Some
communities
and
some
­­

22
BOARD
MEMBER
ROBERTS:
Okay.
Since
you
mentioned
23
San
Diego,
I
want
to
say
that
it
doesn't
make
any
24
difference
what
credit
you
give
in
terms
of
what's
driving
25
our
program,
and
our
concern
is
congestion
although
not
PETERS
SHORTHAND
REPORTING
CORPORATION
(
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1
with
this
hat
on
here,
it
says
a
member
of
the
2
Transportation
Board,
SanDAG.

3
MR.
STURGES:
It's
just
if
you
have
one
solution
4
that's
a
getting
a
car
off
the
road
and
you're
not
giving
5
it
anymore
incentive
than
a
gasoline,
you
know,
efficient
6
gasoline
car
that's
going
to
go
on
the
freeway,
that's
my
7
issue,
I
guess.

8
CHAIRPERSON
LLOYD:
Mr.
McKinnon.

9
BOARD
MEMBER
McKINNON:
Yeah.
I
want
to
comment
10
that
that
consideration
is
how
NEVs
got
put
in
to
the
rule
11
last
time.

12
And
we
still
have
this
problem.
And
the
problem
13
is
is
that
there
were
very
affordable
ways
of
getting
14
credits
built
up.
And
so
at
least
one
automaker
gave
them
15
a
way
to
make
them.
And
what
this
ended
up
doing
was
16
forcing
out
the
City
Car
and
some
of
the
others.
So
I
17
think
we
have
to
be
really
careful.

18
It
isn't
that
we
don't
recognize
that
they
are
a
19
tool
that
fits
in
the
puzzle.
But
it
is,
unfortunately,

20
the
way
that
their
credit
scheme
was
abused
caused
just
21
about,
you
know,
in
my
mind,
sort
of
a
collapse
of
the
22
whole
BEV
piece
of
this.
And
so
I
think
we
have
to
be
23
really
careful
about
how
we
do
it.

24
MR.
STURGES:
Yeah.
I
just
don't
think
whatever
25
someone
did
with
putting
those
vehicles
in
a
dumping
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
environment.
I
mean
there's
work
to
be
done
in
the
places
2
we
talk
about,
in
terms
of
the
Pleasant
Hill
and
BART.

3
BART
right
now,
as
you
probably
know,
is
running
4
out
of
parking
space.
And
so
they're
charging
people
$
63
5
a
month
to
drive
down
there
and
park
now
which
is
actually
6
sending
people
away
from
transit.

7
And
so
we
need
some
solutions.
And
I
think
that
8
you're
right,
that
somehow
there
needs
to
be
some
safety
9
measures
that
it's
not
abused.
But
to
push
this
thing
off
10
the
table
and
say
we
want
to
do
transportation
systems,

11
but
every
car
in
it
has
to
be
over
$
20,000,
that's
not
12
going
to
happen.
I
mean,
it
really
needs
­­

13
BOARD
MEMBER
McKINNON:
I
guess
what
I'm
trying
14
to
get
to
you
is
the
risk
is
if
we
don't
did
it
right,
you
15
don't
get
the
$
20,000
cars,
You
don't
get
the
NEVs.
They
16
get
given
away,
and
you've
got
nothing.

17
And
that's
sort
of
the
way
this
has
worked
out
so
18
far.
So
we're
going
to
have
to
craft
it
a
lot
more
19
carefully
than
we
did
last
time.

20
MR.
STURGES:
But
like
I
said,
what
would
be
the
21
ECom,
the
City
Vehicle
could
get
7
credits,
and
the
NEV
22
gets
.625.
I
mean
that's
not
like
a
huge
give
away
there,

23
I
mean,
relative
to
all
things
considered.

24
I'm
not
asking
for
the
NEV
to
be
way
up
the
list
25
or
anything
like
that.
I'm
just
saying
once
it
gets
down
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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1
to
.15,
it's
just
off
the
table.

2
CHAIRPERSON
LLOYD:
Thank
you
very
much.

3
Michael
Coates
and
Tom
Fulks.
Are
you
going
to
4
change
the
way.

5
MR.
FULKS:
Yes.
Thank
you.
Mr.
Chairman,
and
6
Board
Members,
my
name
is
Tom
Fulks.
I'm
here
7
representing
an
organization
called
Green
Car
Institute
We
8
have
provided
testimony
to
you
in
the
past
on
the
electric
9
vehicle
market
in
California.
And
I'm
here
today
to
give
10
you
some
data
about
a
study
we
did
at
Otai
Ranch
down
in
11
San
Diego
county.

12
I
guess
the
conclusion
of
the
study
is
I'm
here
13
to
argue
in
favor
of
the
aluminum
foil
standard
in
14
electric
vehicles.
That
would
be
the
NEV.

15
It's
either
that
or
the
clay
standard.
I
can't
16
figure
out
exactly
which
one
it
would
be.
But
what
I
17
would
like
to
do
is
share
with
you
some
results
of
a
study
18
that
we
did
with
the
Mobility
Lab,
Dan
Sturges,
and
the
19
automaker
who
didn't
dump
the
NEV
product.

20
We
outfitted
28
families
in
the
Otai
Ranch,
which
21
is
a
master
planned
community,
what's
considered
by
the
22
Urban
Land
Institute
to
be
a
Smart
Growth
Community,
that
23
has
multi­
modal
nodes
that
has
a
road
system
designed
24
specifically
to
encourage
transit,
multi­
modalism,

25
bicycling,
walking,
it's
got
a
trail
system
designed
for
PETERS
SHORTHAND
REPORTING
CORPORATION
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1
all
sorts
of
various
mobility
purposes.

2
We
let
the
families
use
the
NEVs
for
60
days,
and
3
then
we
had
them
keep
a
log
of
the
use
this
vehicle
every
4
day.
And
so
what
we
found
at
the
end
of
the
study
and
5
once
we
collected
the
data,
was
that
nine
out
of
ten
trips
6
that
these
families
took
within
the
community
of
Otai
7
Ranch,
was
used
in
the
NEV.
When
they
had
the
choice
8
between
using
their
internal
combustion
engine
vehicle
or
9
a
NEV,
they
chose
the
NEV
nine
out
of
ten
times.

10
Of
those
trips
that
were
taken,
two­
thirds
of
11
them
were
considered
trips
of
necessity,
which
would
be
to
12
the
supermarket,
to
the
school,
to
work,
to
do
something
13
that
they
ordinarily
would
have
had
to
do
in
their
14
internal
combustion
engine
vehicle.
So
what
we
ended
up
15
with
was
a
dramatic
reduction
in
cold­
start
emissions
from
16
internal
combustion
engines
when
people
were
given
the
17
choice.

18
And
interestingly,
at
the
end
of
the
study
when
19
the
vehicles
were
retrieved,
we
asked
them
in
a
focus
20
group
setting,
would
you
consider
buying
a
NEV
now
that
21
you
have
been
able
to
test
one?
Fifty
percent
of
the
22
participants
said
yes,
they
would
buy
a
NEV
priced,
at
23
that
time
at
the
higher
price
points,
which
of
course
have
24
come
down
since
then.

25
I
guess
my
point
is
if
people
are
given
a
choice
PETERS
SHORTHAND
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CORPORATION
(
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1
of
vehicles
and
we
don't
talk
about
the
political
2
implications
and
we
don't
talk
about
the
numerical
3
implications,
what
we
talk
about
are
the
ultimate
users
4
who
actually
use
the
products,
they
do
use
the
products.

5
And
so
the
point
of
our
study
was
that
the
zero
6
emission
mandate,
even
though
it
may
not
have
ended
up
7
with
a
product
it
wanted,
it
did
create
an
electric
8
vehicle
market.
There
are
actually
more
than
10,000
of
9
these
vehicles
in
California
that
have
been
purchased,
not
10
necessarily
have
been
received
for
free.
And
those
10,000
11
electric
vehicles
users
actually
have
found
quite
a
bit
of
12
utility
in
these
vehicles.

13
And
the
most
important
part,
as
far
as
you
are
14
concerned,
this
Board
should
be
concerned,
is
that
the
15
number
of
cold
starts
eliminated
have
been
significant.

16
And
then
the
last
point,
the
concept
of
VMT,

17
vehicle
miles
traveled,
has
never
entered
the
calculus
of
18
the
decision
to
use
the
NEV
for
mobility
purposes.
It
19
wasn't
the
distance
of
the
trip
that
mattered,
it
was
the
20
purpose
of
the
trip.
And
the
NEV
was
used
specifically
to
21
replace
trips
taken
in
internal
combustion
engines.

22
Again,
it's
not
the
VMT
it's
the
trips
replaced.

23
So
the
staff
report
to
eliminate
the
multiplier
24
credits,
I
agree
with
Dan
Sturges,
I
think
we
ought
to
25
stick
to
.62.
It's
not
that
big
of
a
deal
and
it
keeps
PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
362­
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376
1
that
little
niche
market
alive
in
places
like
Otai
Ranch
2
and
other
master
planned
communities
throughout
3
California.

4
Last
point,
we
also
are
now
studying
master
5
planned
communities
at
Otai
at
D.
C.
Ranch
in
Arizona
and
6
at
Celebration
in
Florida
to
drill
down
and
find
out
7
specifically
why
are
you
so
attracted
to
these
vehicles,

8
people
who
live
in
these
types
of
communities.
And
we
9
will
be
sharing
that
data
with
you
when
we're
completed.

10
Thank
you.

11
CHAIRPERSON
LLOYD:
Thank
you.
Thanks,
Tom.

12
Michael
Coates,
Diego
Miralles,
Robert
Kittell.

13
Hi,
Mike.

14
MR.
COATES:
Hello
Chairman
and
board
members.
I
15
really
don't
have
a
whole
lot
to
add
to
Dan
and
Tom's
16
testimony,
because
­­

17
CHAIRPERSON
LLOYD:
Remember
from
two
years
ago
18
that's
good.
But
you
may
have
under­
estimated
your
time.

19
MR.
COATES:
Well,
also
they
stole
a
few
of
my
20
lines
there.
But
I
have
been
working
with
Global
Motor
21
cars
and
other
NEV
manufacturers
for
the
last
two
years
in
22
public
relations
and
marketing
work.

23
There
are
10,000
NEVs
in
use
in
California
right
24
now.
Every
day
they're
being
used
in
reducing
emissions.

25
They're
a
functional
zero
emission
vehicle
and
they
do
PETERS
SHORTHAND
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916)
362­
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1
deserve
a
place
at
the
table
and
in
the
toolbox
as
Dan
was
2
talking
about.

3
Thank
you.

4
CHAIRPERSON
LLOYD:
Thank
you
very
much.
I'm
5
impressed,
I
didn't
realize
there
were
10,000
out
there.

6
That's
excellent.

7
Thank
you.

8
Diego
Miralles,
Robert
Kittell,
and
Tom
Addison.

9
MR.
MIRALLES:
Good
evening.
I'm
a
bit
new
at
10
this
I
apologize.
My
name
is
Diego
Miralles.
I
am
head
11
of
a
company
called
EV
Works.
And
we
represent
the
Arava
12
electric
car
company,
and
they're
currently
based
in
13
India.

14
I
guess
I'll
tell
you
a
bit
of
a
success
story
15
about
a
ZEV.
Not
very
long
ago
a
group
of
people
decided
16
that
the
car
manufacturers
think
again
about
the
17
life­
changing
effects
of
what
they
sell
to
the
public.

18
And
thus
inspiring
them
to
think
of
a
few
new
ways
of
19
getting
people
from
here
to
there.
While
the
big
guys
20
were,
in
a
few
cases,
with
good
intentions
busy
thinking
21
of
new
ZEV
concepts
that
would
satisfy
new
requirements,
a
22
few
of
us
were
trying
it
our
own
way.

23
Over
the
last
decade,
we've
sent
a
lot
of
ZEVs
24
come
and
go,
some
of
which
seem
to
have
no
practical
place
25
in
mass
market,
be
it
cost
or
liability
issues.

PETERS
SHORTHAND
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916)
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1
Mean
while,
in
southern
California,
a
small
ZEV
2
is
created
About
nine
years
ago,
that
would
stand
the
test
3
of
time
and
is
now
being
produced
in
India
for
the
last
4
two
years
now.

5
I
speak
of
the
Arava
electric
car.
For
those
who
6
don't
know
what
Arava
is,
it
is
a
City
Class
EV,
but
with
7
a
bit
better
performance
envelope
and
will
cost
about
half
8
as
much
as
its
competitors,
that
is
if
any
City
Class
9
competitors
are
left
in
the
U.
S.

10
It
has
air­
conditioning
and
heating
and
just
11
about
any
other
feature
that
an
economy
car
has.
They're
12
currently
being
sold
all
over
India,
as
well
as
being
13
introduced
in
Japan,
China
Norway,
and
as
of
the
beginning
14
of
this
year,
it
is
now
being
distributed
in
the
UK.

15
One
of
which
is
being
driven
by
a
member
of
16
parliament.
It
meets
Emark
and
ISO
9000,
which
17
incidentally
is
a
bit
of
an
issue
here
in
the
U.
S.
because
18
we've
such
a
chasm
between
our
slow
speed
vehicles
and
our
19
high
speed
vehicles.
And
it
makes
it
very
difficult
for
20
City
Class
cars
to
really
exist
when
we
force
them
to
go
21
so
slow
to
the
point
where
we
just,
you
know,
sell
them
as
22
golf
carts.

23
EV
Works
has
been
getting
a
flood
of
interest
24
from
both
the
consumer
to
the
commercial
sector,

25
government
agencies.
We've
seen
interest
in
station
PETERS
SHORTHAND
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1
commuter
car
and
car
sharing
programs
in
southern
2
california
far
beyond
our
predictions.

3
CHAIRPERSON
LLOYD:
Diego,
can
you
focus
on
the
4
staff
proposal
and
what
you'd
like
to
see
there.

5
MR.
MIRALLES:
Well,
I
guess,
I
went
away
from
6
that
a
little
bit
while
I
was
sitting
back
there,
because
7
I
would
have
to
concur
with
Dan
Sturges'
approach
to
this
8
being
kind
of
in
the
same
boat,
except
the
real
­­
I
9
guess,
what
I'm
saying
here
is
that
we
have
a
product
now.

10
It's
been
in
production.
And
we're
trying
to
find
out
11
what,
you
know,
in
doing
market
studies
and
business
plans
12
how
are
we
going
to
approach
this
problem,
if
a
lot
of
bad
13
press
is
created,
possibly
by
sort
of
this,
you
know,

14
stepping
away
from
what
I
saw
as
a
pure
goal
at
least
over
15
the
last
ten
years.

16
And
it's
a
bit
of
a
problem
for
people
like
us
17
who
have
gone
the
distance.
And
I
would
encourage
the
18
Board,
I
guess,
just
to
wrap
it
up,
just
to
stay
the
19
course
and
allow
these
vehicles
that
have
proven
to
be
a
20
very
practical
mode
to
exist
on
the
streets
of
the
U.
S.

21
And
not
just
let
the
rest
of
the
world
reap
the
benefits.

22
CHAIRPERSON
LLOYD:
Thank
you
very
much.

23
Rob
Kittell,
Tom
Addison,
Henry
Hogo.

24
MR.
KITTELL:
Can
you
hear
me
now?

25
Okay.
My
name
is
Robert
Kittell.
I'm
a
licensed
PETERS
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1
professional
engineer
in
the
State
of
California.
I'm
am
2
the
Chairman
and
Chief
Executive
of
the
Electricab
3
Corporation,
whom
I
represent
today.

4
Electricab
is
an
emerging
leader
in
the
5
development
of
zero
emission
transportation
solutions,

6
range
extender
upgrade
products
and
aggregate
range
7
optimization
for
refueling
constrained
vehicle
fleets
8
including
battery
electric
vehicle
and
fuel
cell
vehicles.

9
I
am
here
today
to
discuss
the
commercialization
10
of
advanced
battery
technology
and
Battery
electric
11
vehicles.
Additionally,
I
will
provide
insight
on
staff's
12
economic
analysis,
comment
on
development
and
deployment
13
of
pure
ZEV
technologies,
and
close
with
a
series
of
14
responses
to
various
constituents
of
staff's
latest
15
recommendations.

16
In
its
rationale
for
further
modification
to
the
17
January
2003
regulatory
proposal,
staff
has
concluded
that
18
cost
and
performance
characteristics
of
advanced
batteries
19
have
not
meaningfully
changed
since
their
battery
20
technologies
advisory
panel's
findings
delivered
in
2000.

21
They
cite
severe
cost
challenges
and
base
their
22
economic
analysis
on
nickel
metal
hydride
technology.
The
23
implied
message
is
no
improvements
have
been
realized
in
24
nickel
zinc,
sodium
nickel
chloride
or
lithium
based
25
batteries
in
recent
years.

PETERS
SHORTHAND
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1
The
staff's
report
clearly
fails
to
acknowledge
2
nickel
zinc
battery
technology
and
the
break­
through
in
3
price
and
performance
that
it
offers.
Utilizing
Evercel's
4
prior
generation
of
nickel
zinc
batteries
and
PFC
50
5
charging
Electricab
has
upgraded
the
performance
of
a
17
6
to
20
mile
per
charge
Ford
Think
NEV
to
a
300
plus
mile
7
per
day
commercially
viable
service
vehicle.

8
Evercel's
current
generation,
nickel
foam
product
9
is
delivering,
in
excess,
of
32
usable
kilowatt
hours
in
a
10
single
28
module
string
to
power
Phoenix
Motor
Car's
first
11
production
full
function
five
passenger
100­
plus
electric
12
vehicle.

13
All
of
this
capability
is
available
today
at
a
14
price
point
of
$
300
per
usable
kilowatt
hour.
Again,
this
15
is
a
product
that
is
commercially
available
today.
For
16
about
$
9,000,
the
cost
of
a
nickel
zinc
battery
pack
is
17
far
less
than
that
of
the
AC
drive
system.
Evercel's
18
products
are
rated
at
500
cycles
at
100
percent
depth
of
19
discharge,
and
have
demonstrated
in
excess
of
10,000
20
cycles
at
10
percent
discharge
levels.

21
From
both
an
initial
­­
excuse
me.
I
lost
my
22
page
here.

23
CHAIRPERSON
LLOYD:
I
can
tell
you
you've
only
24
got
about
half
a
minute
left.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
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1
MR.
KITTELL:
From
both
an
initial
and
life­
cycle
2
cost
perspective,
this
clearly
represents
improvements
in
3
advanced
battery
price
and
performance.

4
Staff
also
represents
these
cost
challenges
5
strictly
from
the
manufacturer
perspective
and
fails
to
6
fully
acknowledge
the
reduced
cost
of
ownership
from
the
7
consumer
perspective.

8
Further
more,
staff's
proposal
is
inconsistent
9
with
our
goal
of
pure
ZEV
cost
reduction
through
volume
10
manufacturing.
Buy
focusing
on
generic
electric
drive
11
componentry
rather
than
pure
ZEV
drive
chain
subsystems,

12
the
business
world
realities
of
volume
discounts
and
13
economies
of
scale
will
never
apply
to
their
fullest
14
extent
under
the
current
proposal.

15
While
staff's
January
report
projects
a
99
16
percent
decrease
in
the
cost
deltas
for
fuel
cell
vehicles
17
versus
ICE's
over
the
same
time
frame
they
project
zero
18
cost
change
in
Battery
electric
vehicles.
This
is
an
19
unacceptably
poor
and
lazy
assumption
and
already
shown
to
20
be
in
an
error.

21
CHAIRPERSON
LLOYD:
Can
you
please
wrap
up.

22
MR.
KITTELL:
Sir,
I
will
wrap
up
with
my
23
specific
responses
to
selected
staff
rationale.

24
CHAIRPERSON
LLOYD:
Do
you
have
a
written
25
statement?

PETERS
SHORTHAND
REPORTING
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(
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1
MR.
KITTELL:
I
can
provide
a
written
copy
upon
2
completion
of
my
presentation.
In
order
for
credits
for
3
fuel
cell
vehicles
placed
in
service
in
other
Section
177
4
ZEV
states
to
be
allowed
to
count
toward
compliance
in
5
California,
they
should
be
de­
rated
by
a
factor
inversely
6
proportional
to
the
square
of
the
distance
between
any
7
such
State
in
our
children's
lungs.

8
The
point
is
ZEVs
operating
outside
the
state
of
9
California
do
nothing
to
improve
air
quality
here.

10
CHAIRPERSON
LLOYD:
I
think
we've
heard
enough.

11
I
don't
know
if
this
is
very
productive
at
all.

12
Do
you
have
some
significant
addition
to
the
13
staff
proposal,
comments?

14
MR.
KITTELL:
Yes,
sir,
I
do.
Two
hundred
and
15
fifty
fuel
cell
vehicles
distributed
throughout
the
United
16
States
in
the
next
five
years
will
contribute
essentially
17
zero
toward
cleaning
the
air
in
California,
and
will
do
18
nothing
toward
reducing
the
costs
of
pure
ZEV
electric
19
drive
train
subsystems
in
pure
ZEV
vehicles.

20
CHAIRPERSON
LLOYD:
I
think
I
must
cut
you
off.

21
It's
not
adding.
If
you
provide
a
written
statement,
we'd
22
be
happy
to
take
that
into
account.
I'd
like
to
move
on
23
to
the
next
speaker.

24
MR.
KITTELL:
One
final
comment,
please.

25
CHAIRPERSON
LLOYD:
Tom
Addison
­­
but
­­

PETERS
SHORTHAND
REPORTING
CORPORATION
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916)
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384
1
MR.
KITTELL:
I
think
in
total
agreement
with
Tom
2
Gage
from
AC
Propulsion.
I
believe
the
solution
to
3
delivering
near
term
zero
emission
battery
electric
4
vehicles
really
lies
with
the
small
manufacturers,
such
as
5
AC
Propulsion
and
Phoenix
Motor
Cars.
And
I
encourage
the
6
Board
­­

7
CHAIRPERSON
LLOYD:
I
think
we
heard
that
just
8
because
we
don't
hear
any
of
the
major
manufacturers
9
coming
forward.
So
I
think
we've
reached
that
conclusion.

10
We're
trying
to
craft
a
way
in
which
that
might
happen,

11
and
give
incentives
to
the
large
companies
so
that
might
12
be
supportive.

13
So
I
appreciate
your
sentiment
there.

14
Thank
you.

15
MR.
KITTELL:
And
any
means
to
make
a
liquid
16
tradable
market
for
ZEV
credits
assigned
to
those
17
manufacturers,
those
small
manufacturers,
will
go
a
long
18
way
toward
putting
zero
emission
vehicles
on
the
road
19
today.

20
CHAIRPERSON
LLOYD:
Thank
you.

21
MR.
KITTELL:
Thank
you
very
much.

22
CHAIRPERSON
LLOYD:
Tom
Addison,
Henry
Hogo,
Carl
23
Johnson.

24
MR.
ADDISON:
Good
evening,
Dr.
Lloyd
and
25
members.
First
of
all,
congratulations,
not
only
making
PETERS
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1
it
this
far
into
the
evening,
but
also
on
the
last
12
2
years.

3
CHAIRPERSON
LLOYD:
We
haven't
finished
yet.

4
MR.
ADDISON:
In
deed.
I'll
be
brief.
I
will
5
hope
you
in
that
respect,
Dr.
Lloyd.

6
But
seriously,
I
mean
the
last
12
years
really
7
have
been,
I
would
argue,
a
tremendous
success.
And
8
that's
a
result
of
the
leadership
of
this
board,
of
a
lot
9
of
hard
work,
a
lot
of
long
hours
by
staff
as
well
as
by
10
EV
drivers,
by
car
companies
and
others.

11
Having
said
that,
the
Bay
Area
Air
District
has
12
concerns
with
the
staff
proposal.
Three
primary
concerns
13
with
the
proposal.

14
Here
they
are.
You've
heard
these
from
other
15
people.
Post
2009,
by
essentially
From
our
perspective
16
what
you're
doing
is
you're
asking
the
car
companies
to
17
come
back
and
give
you
problems
then.

18
Plug­
in
hybrids.
Plug­
in
hybrids,
we
don't
think
19
in
the
silver
category
are
going
to
be
produced.
We
see
20
plug­
in
hybrids
as
the
short­
term,
hopefully
a
short­
term
21
solution
for
the
next
decade
for
the
next
maybe
two
22
decades,
cross
our
fingers,
knock
on
wood,
we'll
see
how
23
well
fuel
cells
do.

24
But
we
don't
think
you're
going
to
see
plug­
in
25
hybrids
being
produced
with
the
incentive
structure
that's
PETERS
SHORTHAND
REPORTING
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1
set
out
at
this
point.

2
Third
concern,
blackout,
short­
term
blackout,

3
bank
credits
essentially
halting
the
industry.

4
You've
heard
a
modest
proposal.
I
think
Jonathan
5
Smith
had
something
to
say
about
a
modest
proposal.
A
6
modest
proposal
from
Dave
Modisette,
we
thought
that
made
7
a
lot
of
sense.
There's
some
numbers
in
there
that
seem
8
certainly
reasonable,
achievable
modest.
You
know,
that
9
seems
from
our
perspective
to
be
at
least
something
that
10
you
could
move
towards,
hopefully
beyond.

11
I
would
just
emphasize
plug­
in
hybrids
are
12
covered
in
that
CalETC
proposal.
We'd
urge
you
to
look
at
13
that
and
incorporate
that.
And
we'd
see
that
as
being
a
14
key
part
of
that
proposal.

15
I'm
out
of
here.

16
Thanks.

17
CHAIRPERSON
LLOYD:
Thank
you,
Tom.

18
You
did
hear
the
statements
from
the
OEM
where
he
19
asked
them
about
the
plug­
in
hybrids?

20
MR.
ADDISON:
And
I've
had
conversations
with
21
your
staff
about
the
staff
proposal
and
what
effect
that
22
would
have
on
plug­
in
hybrids
and
some
concerns.

23
CHAIRPERSON
LLOYD:
Thank
you.

24
Henry
Hogo,
and
then
Carl
Johnson.
And
then
25
we'll
probably
be
­­
well
maybe
one
more
and
then
we'll
PETERS
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1
take
a
break.

2
MR.
HOGO:
Good
evening,
Dr.
Lloyd
and
members
of
3
the
Board.
Again,
Henry
Hogo
from
the
South
Coast
AQMD.

4
We
have
submitted
written
comments.
What
I
wanted
to
do
5
is
talk
about
the
table
that
we
provided
in
the
written
6
comments
that
shows
an
alternative
to
the
staff
proposal.

7
Again,
in
there,
we
believe
in
numbers
also.
And
8
as
your
board
knows,
the
latest
draft
air
quality
9
management
plan
for
the
South
Coast
indicates
that
there's
10
significant
shortfalls
in
needed
emission
reductions
in
11
order
to
attain
the
federal
air
quality
standards.

12
As
such
the
South
Coast
AQMD
staff
supports
a
13
strong
zero
emission
vehicle
regulation
that
provides
the
14
greatest
air
quality
benefits
as
well
as
accelerate
the
15
advancement
of
the
zero
and
near
zero
vehicle
16
technologies.

17
And
what
I
wanted
to
do
was
talk
about
the
table
18
that
we
have
provided
in
the
written
comment.
And
what
19
the
AQMD
staff
is
proposing
is
that
and
we
urge
your
board
20
to
retain
the
2001
ZEV
requirement
of
two
percent
adjusted
21
for
the
time
period
beginning
at
2008.

22
In
the
interim
the
next
five
years,
we're
23
proposing
that
you
keep
the
250
fuel
cell
or
Type
3
24
vehicle
production
requirement.
In
addition,
we
would
25
recommend
that
you
put
in
a
2000
Type
2
full
function
PETERS
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1
battery
EV
over
the
next
five
years.

2
You
heard
a
lot
of
testimony
today
about
the
3
satisfaction
and
performance
of
the
current
technology.

4
We
believe
that
technology
can
move
forward,
and
we
would
5
recommend
that
over
a
substitution
of
the
fuel
cell
6
vehicles,
because
we
really
need
the
fuel
cell
vehicles
7
out
there
visible
to
the
public
during
this
timeframe.

8
In
addition,
we
are
­­
to
strengthen
this
9
regulation,
the
staff
is
proposing
that
the
AT
PZEV
10
numbers
become
a
requirement.
And
what
you
do
here
is
11
then
you
would
reduce
the
PZEV
portion
of
the
regulation
12
as
time
goes
on.

13
So
this
will
promote
the
current
technologies
14
that
near­
term
technologies
such
as
plugs­
ins
and
hybrids.

15
And
relative
to
plug­
ins,
we
strongly
believe
that
16
plug­
ins
have
an
important
role
in
reaching
the
ZEV
17
mandates.

18
As
such,
the
AQMD
staff
is
proposing
that
for
19
plug­
ins
and
any
other
technologies
in
the
silver
standard
20
that
meet
the
minimum
zero
emission
range
credit,
for
all
21
pollutants
at
1.25
be
considered
as
part
of
the
gold
22
standard
for
a
short
period
of
time.

23
We're
talking
maybe
out
to
the
year
2010.
That
24
would
promote
that
technology.

25
I
wanted
to
conclude
with
just
two
points,
and
PETERS
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that
is
that
relative
to
your
deliberations
today,
and
2
most
likely
tomorrow,
that
any
consideration
of
mobile
to
3
stationary
crediting,
the
AQMD
staff
really
opposes
that
4
proposal.

5
We
believe
that
such
an
action
would
only
serve
6
to
impede
the
development
of
fuel
cell
vehicle
7
technologies.
And
lastly,
the
South
Coast
AQMD
staff
8
opposes
any
provision
for
ZEV
credits
of
zero
emission
9
vehicles,
sold
outside
of
California.

10
It
really
sends
a
wrong
message
relative
to
11
California's
interest
in
fuel
cell
technology
12
demonstration.
And
if
such
a
provision
is
allowed,
it
13
would
undermine
California's
effort
to
bring
federal
14
incentive
funding
to
California.

15
And
that
concludes
my
comments.

16
Thank
you.

17
CHAIRPERSON
LLOYD:
Thank
you,
Henry.

18
EXECUTIVE
OFFICER
WITHERSPOON:
May
staff
direct
19
a
question
to
South
Coast?

20
CHAIRPERSON
LLOYD:
Yes.

21
EXECUTIVE
OFFICER
WITHERSPOON:
We're
trying
to
22
calculate
the
cumulative
numbers
for
the
vehicles.
And
23
Henry
in
the
chart
in
your
letter
are
those
credits
or
24
cars,
and
are
they
fuel
cell
car
Equivalents
or
are
they
25
BEVs?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
390
1
MR.
HOGO:
We
took
the
table
that
was
in
the
2
staff
report,
page
25,
and
equated
it
across.
So
you
have
3
the
2000
regulation,
this
is
a
scenario
that
your
staff
4
proposed
with
the
2001
regulations,
and
the
March
2003
5
revised
staff
proposal.
And
we
took
those
numbers
and
put
6
them
across
to
the
South
Coast
proposal.
So
really
7
they're
based
on
vehicles
I
believe.

8
EXECUTIVE
OFFICER
WITHERSPOON:
Just
help
the
9
Board
with
the
math.
The
two
proposals
you
hear
10
previously
from
CalETC
and
Union
of
Concerned
Scientists
11
sum
up
to
roughly
30,000
by
the
end
of
2014.
The
South
12
Coast
proposal
sums
up
to
80,518
in
the
same
period.

13
And
the
three
tiers
are
4,583,
21,128,
and
14
54,807.
And
again
the
cumulative
total
80,518.

15
MR.
HOGO:
They
are
definitely
more
stringent
16
than
the
proposal,
but
we
believe
we
need
this
yard
stick
17
in
order
to
get
the
technology
moving.

18
EXECUTIVE
OFFICER
WITHERSPOON:
Dr.
Burke,
I
was
19
adding
them
in
the
intervals
of
time
that
the
other
20
proposals
were
recommended
'
05
through
'
08,
'
09
through
21
2011
and
2012
through
1214.
And
then
I
summed
it
for
the
22
cumulative
total.

23
BOARD
MEMBER
BURKE:
Got
it.

24
CHAIRPERSON
LLOYD:
Thanks,
Henry.

25
Carlo
Johnson.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
391
1
And
then
I
think
we
­­
Carl
and
then
we
­­

2
MR.
JOHNSON:
Thank
you,
Dr.
Lloyd.

3
CHAIRPERSON
LLOYD:
Welcome.

4
MR.
JOHNSON:
Good
to
see
you
once
again.
We
5
appreciate
the
opportunity.

6
I
am
Carl
Johnson.
I'm
Deputy
Commissioner
for
7
Air
and
Waste
Management
with
the
New
York
State
8
Department
of
Environmental
Conservation
here
today
again
9
to
build
on
our
very
successful
relationship
over
the
10
years
with
the
Board
and
the
staff.
And
we
wish
to
11
continue
that,
and
we
really
appreciate
this
opportunity
12
today.

13
I
will
be
belief.
You
have
our
written
comments.

14
I
really
will
just
speak
to
two
points
that
we
think
are
15
worthy
of
highlighting
this
evening.
One
is
the
traveling
16
provision.
And
we
very
much
support
the
traveling
17
provision
in
the
sense
that
the
number
gives
certainty
to
18
everyone
as
to
what
we're
talking
about
in
the
out
years.

19
If
250
is
the
number,
then
250
is
the
number.
And
we
20
think
that
that's
a
good
way
to
provide
that
certainty
to
21
the
industry.

22
However,
we
are
concerned
that
the
traveling
23
provision
that
credits
those
vehicles
as
currently
written
24
does
not
sum
sunset
­­
or
should
subset.
As
currently
25
written
this
provision
carries
forward
after
the
end
of
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
392
1
the
optional
program.

2
So
that
in
2009
and
the
subsequent
timeframe,
a
3
Type
3
ZEV
sold
in
New
York
would
be
creditable
against
4
the
California
requirements.
In
terms
of
the
northeastern
5
states
really
what
that
would
mean
is
that
the
credit
6
structure
would
seriously
negatively
impact
the
placement
7
of
AT
PZEVs
as
required
in
the
north
east,
that
you
would
8
get
so
much
credit
for
the
fuel
cell
vehicles
that
there
9
would
be
no
need,
desire
or
inclination
to
place
AT
PZEVs
10
and
we
would
be
out
of
that
market.
So
we
have
concerns
11
with
regard
to
that
and
think
that
a
sunset
or
a
phase
out
12
of
that
would
be
appropriate.

13
We
also
share
the
general
sentiment,
I
think,

14
with
regard
to
the
gold
standard,
that
there
should
be
a
15
standard
out
there.
We
don't
take
issue
with
the
present
16
expectation
that
Type
3
ZEVs
will
not
be
ready
for
17
commercialization
before
2009.
We
don't
object.
In
fact,

18
we
would
support
the
independent
expert
panel
review
19
process.

20
But
we
are
concerned
that
the
absence
of
21
regulatory
requirements
for
the
Type
3
ZEVs
could
have
a
22
negative
impact
on
the
development
of
the
technology.
As
23
the
Board
has
evaluated
ZEV
programs
in
the
past,
it
has
24
recognized
that
continued
regulatory
requirements
were
25
necessary
to
promote
the
continual
investment.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
393
1
The
same
is
true
here.
Clearly,
a
second
2
generation
of
fuel
cell
vehicle
demonstration
will
be
3
needed
before
the
technology
is
fully
commercially
viable.

4
But
we
are
concerned
that
being
silent,
at
this
point,

5
with
regard
to
the
standard
after'
09
sends
the
signal
that
6
the
program
ends
in
'
09.

7
I
cannot
tell
that
we
know
what
the
number
is.

8
And
I
think
it
would
take
more
work
for
us
to
come
to
a
9
consensus
as
to
what
that
might
be.
But
we
do
think
that
10
whatever
it
is,
it's
better
to
commit
to
that
number,
even
11
if
that
number
is
to
be
determined
later
as
was
suggested,

12
and
to
develop
that
number
with
the
recognition
that
other
13
states
are
following
your
lead.
That's
really
the
extent
14
of
what
I
have
to
tell
you
now.

15
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Thank
16
you
for
the
written
statement.

17
Thank
you
for
that.
Good
to
work
with
you
again.

18
Thank
you.

19
Now,
we're
due
to
have
a
break,
although
I
have
20
three
people
here
who
said
that
they
have
to
leave
and
if
21
they
take
one
minute
a
piece,
I'll
take
them.
And
that
22
would
be
Paul
Scott,
Mike
Kane
and
Zan
Dubin
Scott.

23
So
if
they
can
do
that
in
one
minute
rather
than
24
­­
if
they
have
to
leave.
I
know
it's
a
bit
of
an
25
imposition,
but
the
court
reporter
is
ready
to
drop.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
394
1
MR.
SCOTT:
Well,
one
minute
throws.
I'm
Paul
2
Scott.
Thank
you
very
much.

3
One
minute
throws
my
report
out,
but
I'll
take
it
4
anyway.

5
We
bought
our
RAV4.
We
showed
it
to
all
of
our
6
friends.
We
had
80
people
over
to
our
house.
And
we
7
drove
them
around.
We
had
15
EVs
over
there.
We
had
a
8
big
EV
test
drive
party.
Everybody
loved
this
car.

9
So
for
the
industry
to
tell
you
there
is
no
10
market,
just
doesn't
ring
true
to
us.
We
talk
to
people
11
every
day
when
we
drive
around
in
our
car.
They
all
love
12
it.
They
all
want
one.
So
I
just
want
to
make
the
point
13
that,
you
know,
we
really
don't
want
you
to
eliminate
BEVs
14
batter
electric
vehicles
from
the
program.

15
We
feel
like
these
cars
have
a
huge
market
16
nationwide,
certainly
up
and
down
the
west
coast.
The
17
people
that
I've
dealt
with
throughout
my
life
would
love
18
to
have
one
of
these
cars.
So
just
to
end
it
quickly,

19
please
maintain
some
sort
of
mandate
that
would
include
20
battery
electric
vehicles.
That's
all.

21
CHAIRPERSON
LLOYD:
Thank
you
very
much.

22
BOARD
MEMBER
RIORDAN:
Mr.
Chairman.

23
CHAIRPERSON
LLOYD:
Yes.
A
Question.

24
BOARD
MEMBER
RIORDAN:
Not
a
question.
I
just
25
was
interested
in
his
name,
I'm
sorry.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
395
1
MR.
SCOTT:
Paul
Scott.

2
MR.
KANE:
Chairman,
Lloyd,
I
could
use
a
little
3
bit
more
than
three
minutes.
If
you
can
accommodate
me
4
right
after
the
break,
I'll
let
Zan
go
and
then
speak
5
right
after
the
break.

6
CHAIRPERSON
LLOYD:
Yes,
okay.

7
MS.
SCOTT:
I'm
Zan
Dubin
Scott.
I'm
from
LA.

8
I'm
married
to
Paul
Scott.
And
we
have
the
EV.
And
9
first,
I'm
going
to
be
nervous
here,
but
I
want
to
thank
10
the
Board
and
the
staff
for
helping
bring
ZEVs
to
the
11
road.
I've
rewritten
my
statement
today
about
six
times.

12
This
is
much
more
complicated
than
I
thought.
I
13
walked
in
expecting
for
nothing
less
than
sustained
14
competitive
volume
production
of
BEVs
through
car
company
15
requirements.
Now,
I've
feared
that
my
­­
that
request
my
16
dismissed
out
of
hand
as
too
simplistic
and
just
too
much.

17
But
I
do
know
three
things.
I
have
never
seen
an
18
add
for
a
RAV4.
I
see
tons
of
adds
during
prime
time
TV
19
for
all
kinds
of
cars,
and
I
frankly
don't
think
that
the
20
car
companies
have
given
it
a
college
try.
We
tell
people
21
constantly
people
­­
they
stop
me
on
the
street.
They
say
22
what
is
that
car?
Their
faces
light
up.
I
tell
them
23
about
it.
I
say
you
can't
get
them.
And
their
faces
24
fall.
I
can
feel
it
out
there
that
people
want
these
25
cars.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
396
1
And
the
desire
and
the
needs,
I
know,
of
people
2
like
­­
consumers
like
me
must
be
given
equal
3
consideration
to
the
needs
and
the
desires
of
the
car
4
companies.
Auto
exhaust
kills
12,000
people
a
year.
Who
5
has
more
at
stake
here?
Who
has
more
to
lose.
I
walked
6
through
bladder
cancer
with
a
family
member
last
year.

7
And
I
think
people
like
me
and
other
consumers
have
a
lot
8
to
lose.
I
urge
the
Board
to
listen
to
us
too.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much,
Zan.

10
We
will
take
a
break
now
till
­­
well
for
half
an
11
hour.

12
Okay.
We're
not
going
to
break
for
half
an
hour.

13
We're
going
to
break
for
15
minutes.

14
So
we'll
go
15
minutes
till
7:
20,
and
then
we'll
15
reassemble.

16
(
Thereupon
a
dinner
break
was
taken.)

17
CHAIRPERSON
LLOYD:
If
we
can
just
get
the
EO
18
we're
on.
I
call
the
Executive
Officer.
Oh
there
she
is.

19
I
didn't
see
you
there.

20
EXECUTIVE
OFFICER
WITHERSPOON:
I
was
just
21
chatting
with
a
member
of
the
public.

22
CHAIRPERSON
LLOYD:
We'll
recommence.
And
I
23
promised
we
would
give
Mike
Kane
a
chance.
I
would
just
24
like
to
lay
out
the
landscape
of
where
we're
likely
to
go.

25
We're
expecting
to
go
another
one
and
a
half
to
two
hours
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
397
1
this
evening.
Then
adjourn
for
the
evening.
And
then
2
recommence
at
8:
30
in
the
morning.
So
we
will
not
be
3
taking
a
vote
tonight.

4
So
those
of
you
who
what
to
stay,
feel
free.

5
Those
of
you
who
you
who
don't,
who
would
like
to
6
coordinate,
but
we'll
be
back
at
8:
30
in
the
morning.

7
Well,
that's
true.

8
But
an
incentive
I
guess
­­
instead
of
your
­­
I
9
guess
I
could
if
we
have
another
45
people.
We
understand
10
there's
going
to
be
reinforcements
tomorrow.
So
we
don't
11
know
that
this
list
is
going
to
be
limited,
because
there
12
are
other
people
coming
into
town.
So
clearly
the
more
we
13
can
get
through
tonight,
the
better
off
we're
going
to
be
14
tomorrow.

15
But
clearly
that's
in
your
hands.
As
I
said
16
before,
if
there's
stuff
that
is
repetitive,
it
would
17
really
help
us
and
help
everyone,
if
you
just
could
keep
18
it
short.
With
that
let's
continue.

19
(
Thereupon
an
overhead
presentation
was
20
Presented
as
follows.)

21
MR.
KANE:
Chairman
Lloyd
and
Board
Members,
my
22
name
is
Mike
Kane.
I'm
a
resident
of
Newport
Beach,

23
California.
I'm
an
electric
vehicle
driver,
and
very
much
24
a
novice,
I
guess,
at
public
policy
and
advocacy
here,
so
25
bear
with
me.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
398
1
If
you're
working
off
of
hardcopies,
I'm
going
to
2
skip
over
a
bunch
of
the
charts
in
the
beginning,
so
I'll
3
do
that
right
now.

4
­­
o0o­­

5
MR.
KANE:
I
think
going
straight
for
the
jugular
6
here,
what
I'm
hearing
from
the
auto
companies
and
what
7
I've
been
hearing
in
the
staff
report
that
I
read
through
8
here
recently
is
that
really
we
need
to
effectively
9
sacrifice
investments
in
battery
electric
vehicles
so
that
10
we
can
fund
the
potential
promise
of
fuel
cells
in
the
11
future.

12
I
think
you've
heard
a
lot
of
reasons
today
why
13
that
may
not
be
the
best
course
of
action.
I
want
to
take
14
a
slightly
different
stab
at
it.
I
drive
emissions
free
15
today.
I
do
that
using
a
battery
electric
vehicle.
And
16
I'll
walk
you
through
very
briefly
how
I
do
that.

17
This
is
the
chart
that's
the
fist
one
has
a
lot
18
of
pictures
on
it.

19
If
I
had
a,
you
know,
theoretical
75­
mile
daily
20
round
trip
commute.
I
could
do
that
with
a
battery
21
electric
vehicle.
I
would
need
about
25
kilowatt
hours
of
22
energy
a
day
to
do
that.

23
Battery
electric
vehicles
are
out
there
they'll
24
do
that
today.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
399
1
MR.
KANE:
I
picked
the
Honda
EV
Plus.
I
need
2
the
car.
I
need
a
charger.
I
need
about
450
square
feet
3
of
solar
panels
on
my
home
roof
and
that's
roughly
the
4
system
that
I
have
on
my
own
home
today.

5
If
I
was
to
do
that
with
a
battery
electric
or
6
with
a
hydrogen
fuel
cell
electric
vehicle,
I'd
need
about
7
one
and
a
half
kilograms
of
hydrogen
to
do
that.

8
I've
done
the
research
on
how
much
energy
is
9
required
to
do
that.
It
looks
like
you
need
about
90
10
kilowatt
hours
to
produce
that
much
hydrogen.

11
­­
o0o­­

12
MR.
KANE:
So
if
I
look
at
that
as
a
system
and
I
13
say
I
need
a
hydrogen
fuel
cell
car,
I
need
a
hydrogen
14
generator.
This
is
the
one
from
Stewart
Energy,
I'm
sure
15
you've
seen
at
the
fuel
cell
partnership,
and
I
need
about
16
1,100
square
feet
of
roof
space
to
do
that.

17
Now,
assuming
I
could
get
1,100
square
feet
of
18
roof
space
worth
of
solar
panels,
that's
a
dubious
19
proposition
on
most
homes
in
California.
You
could
take
20
the
hydrogen
fuel
cell
car
out
of
the
equation
all
21
together
and
the
system
would
be
more
expensive
than
the
22
system
for
a
battery
electric
vehicle.

23
So
even
if
the
fuel
cell
car
was
free,
it
would
24
cost
know
me
more
to
put
this
system
together
than
it
25
would
with
a
battery
electric
vehicle.
I
think
you
can
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
400
1
use
that
as
an
example
of
how
could
scale
this
up
into
a
2
bigger
system
Where
the
hydrogen
is
produced
in
a
big
3
hydrogen
barn.

4
­­
o0o­­

5
MR.
KANE:
I
think
you've
all
seen
this
ad,
this
6
was
put
up
by
Toyota
on
a
number
of
billboards
around
the
7
State
and
bus
kiosks.
I
want
to
ask
the
question
I
guess
8
is
this
a
marketing
program?

9
I
can
speak
with
some
authority
here.
I've
been
10
a
marketer
in
the
hitech
field
for
over
20
years.
I've
11
been
personally
very
involved
in
bringing
a
number
of
new
12
technologies
from
R&
D
to
multi­
billion
dollar
markets.

13
The
way
you
do
that
isn't
by
advertising
it
and
expecting
14
people
to
come
buy
them.
You
have
to
build
those
markets.

15
You
don't
find
them.

16
You
go
out.
You
work
with
the
early
adopters.

17
You
find
out
why
people
are
interested.
You
build
case
18
studies
around
that.
And
you
sell
these
things
one
at
a
19
time.
And
the
market
builds
on
itself.
I'd
ask
you
to
20
think
about
the
first
time
you
bought
a
home
fax
machine
21
or
personal
computer.
You
didn't
do
it
because
you
saw
an
22
advertisement
for
a
technology
that
you
never
heard
about
23
before.
You
bought
one
because
your
neighbor
had
one.

24
You
saw
them
using
because
you
had
one
at
work
and
you
25
started
thinking,
you
know,
gee,
I
could
really
make
this
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
401
1
work
at
home.

2
These
vehicles
have
to
be
out
there.
People
have
3
to
see
them
on
the
streets
and
get
comfortable
with
the
4
fact
that
they
can
use
them
in
their
day­
to­
day
life
and
5
they're
going
to
provide
them
utility.

6
In
my
field
of
work
we
call
this
kind
of
7
marketing
field­
of­
dreams­
marketing.
And
if
you
remember
8
the
movie,
the
terms
was,
"
If
you
build
it,
they
will
9
come."

10
CHAIRPERSON
LLOYD:
And
we
gave
you
three
11
minutes.
That's
it.

12
MR.
KANE:
Quickly
what
happened,
you
know,
when
13
respondent's
came
in,
they
ended
up
at
a
Toyota
dealer
and
14
that
Toyota
dealer
couldn't
sell
them
the
car,
so
they
15
sold
them
what
they
could
sell
them,
which
was
a
gas
16
vehicle.
It
was
very
hard
to
get
to
someone
in
Toyota
who
17
could
actually
sell
you
a
car
and
then
you
had
a
long
wait
18
to
get
one.

19
­­
o0o­­

20
MR.
KANE:
What
I'm
asking
the
Board
to
do
is
to
21
create
strong
regulations
and
stick
with
them.
This
22
market
needs
consistency.
People
aren't
going
to
invest
23
in
the
technologies
necessary.
These
small
companies
24
aren't
going
to
be
there
if
there's
that
much
regulatory
25
uncertainty.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
402
1
What
I'm
asking
the
Board
to
do
specifically
is
2
reject
the
current
staff
proposal
and
reaffirm
the
2001
3
program
amendments
and
really
do
it
only
with
what's
4
necessary
to
make
the
program
enforceable.

5
­­
o0o­­

6
MR.
KANE:
Step
two
is
to
look
at
the
things
that
7
I
believe
are
important
a
look
at.
That's
the
credit
glut
8
issue
I
think
you're
heard
about.
Cars
going
off
of
lease
9
and
leaving
the
state.
We
need
to
get
cars
out
there
that
10
stay
on
the
road
for
the
balance
of
their
life.

11
And
we
need
to
look
at
incentivizing
Fuel
cells,

12
but
not
at
the
expense
of
battery
electric
vehicles
that
13
are
here
today,
and
incentivize
plug­
in
HEVs.

14
And
lastly
there's
a
lot
of
drivers
out
there
15
that
would
love
to
be
involved
and
demand
creation
16
programs.
We'd
love
to
volunteer
our
time
to
the
Board,

17
to
the
AQMDs.
We'd
be
interested
in
pursuing
that
if
the
18
cars
are
still
there.

19
CHAIRPERSON
LLOYD:
Thank
you.

20
We
have
Christine
Kirby,
Amanda
Flores
and
Tim
21
Hastrup.

22
Welcome
from
Massachusetts.

23
MS.
KIRBY:
Thank
you.
Good
evening,
Mr.

24
Chairman
and
Members
of
the
Board.
Thank
you
for
the
25
opportunity
to
testify
this
evening.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
403
1
My
name
is
Christine
Kirby
and
I
manage
the
2
Low­
Emission
Vehicle
Program
for
the
Commonwealth
of
3
Massachusetts.

4
We've
worked
with
the
Air
Resources
Board
for
5
many
years
as
well
as
the
staff
and
we
look
forward
to
6
working
with
you
in
the
future.
I
did
submit
written
7
comments
so
I
want
to
keep
my
comments
very
brief
and
8
focus
on
the
travel
issue.

9
Section
177
of
the
Clean
Air
Act
allows
states
10
outside
of
California
to
adopt
the
California
LEV
program.

11
The
march
5th
proposal
includes
a
provision
where
if
12
manufacturers
place
Type
3
ZEVs
in
any
LEV
State,
the
13
credits
could
be
used
to
count
towards
the
California
ZEV
14
requirement.

15
Massachusetts
recognizes
that
an
important
goal
16
of
the
program
is
to
focus
on
fuel
cell
research
and
the
17
need
to
target
this
research.
However,
we
believe
that
if
18
successful,
fuel
cells
will
be
deployed
not
only
in
19
California
but
in
other
states
as
well.

20
Ultimately,
the
goal
of
the
program
is
to
deliver
21
long­
term
air
quality
benefits.
And
clearly
it's
crucial
22
to
expand
the
market
for
zero
emission
vehicles
beyond
23
California
to
move
towards
true
commercialization.

24
Therefore,
we
suggest
that
the
regulations
25
include
a
specific
provision
to
sunset
the
pilot
program
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
404
1
phase
of
the
alternative
compliance
strategy
and
2
specifically
section
1960(
d)(
5)(
c).

3
We
also
suggest
that
the
ARB
include
a
provision
4
in
the
regulations
to
allow
for
some
number
of
fuel
cells
5
to
be
placed
in
states
outside
of
California.
And
we
6
don't
think
that
the
regulations
are
clear
on
that
point.

7
We've
included
some
suggested
language
that
8
will
­­
well
it's
in
my
written
comments
for
that
section.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much.

10
Staff
any
comment
on
that?

11
EXECUTIVE
OFFICER
WITHERSPOON:
Our
attorney,
Tom
12
Jennings,
is
looking
at
this
travel
issue
because
of
the
13
question
New
York
raised
and
then
also
how
it
my
apply
to
14
Massachusetts.
And
I
was
just
asking
Tom
­­
a
piece
of
15
the
language
I
don't
understand.
So
we'll
get
back
to
you
16
tomorrow.

17
CHAIRPERSON
LLOYD:
Maybe
tomorrow
morning.

18
That's
fine.
Yes.

19
MR.
FLORES:
Good
evening,
Chairman
and
Board.

20
It's
my
pleasure
to
be
here
and
I
thank
you
for
the
21
opportunity
to
come
and
present
a
diversity
of
22
perspective.

23
My
name
is
Armando
Flores
and
I'm
attorney
from
24
Modesto.
I'm
here
on
behalf
of
the
Stanislaus
County
25
Hispanic
Chamber
of
Commerce,
the
Latino
Political
Action
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
405
1
Committee
of
the
Central
valley,
and
the
Latino
Community
2
Roundtable
of
Modesto.

3
And
I'm
here
to
talk
a
little
bit
more
about
4
demographic
numbers
as
opposed
to
hitech
numbers.
And
5
there
are
several
points
I
want
to
make,
and
I'll
be
6
brief.

7
Point
number
1,
from
a
business
perspective,
I
8
would
like
to
inform
you
that
whereas
California's
9
business
economy
is
suffering
a
down
turn,
the
Hispanic
10
busy
economy
is
the
fastest
growing
segment
and
most
11
viable
element
of
California's
business.
And
we
want
to
12
continue
to
see
that
trend
increase
and
grown
in
13
pollution.
And
the
central
valley,
in
particular,
will
14
diminish
that.

15
Point
number
2,
from
a
Latino
health
perspective
16
we
would
like
this
Board
and
staff
to
think
about
the
17
outdoor
labor
workforce,
particularly
in
the
central
18
valley.
Think
about
agricultural
workers,
construction
19
workers,
outdoor
landscapers,
lawn
and
maintenance
20
workers,
landfill
workers.
That
workforce
is
21
predominantly
Hispanic.
And
what
we
are
concerned
about
22
is
that
air
pollution
can
and
will
have
a
disproportionate
23
impact
on
this
community.
And
we
ask
you
to
think
about
24
that
and
analyze
that
among
the
other
elements
of
your
25
discourse
and
analysis.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
406
1
So
our
conclusion,
our
position
is
that
we
hope
2
and
encourage
you
to
be
forceful
and
be
considerate
and
be
3
inclusive
in
your
analysis.
We
urge
you
to
implement
4
stronger
not
less
stringent
air
pollution
regulations
from
5
the
health
perspective
from
the
Latino
perspective.

6
Thank
you.

7
CHAIRPERSON
LLOYD:
Thank
you
very
much.

8
Robert
Gibney,
Daniel
McCarthy,
Tim
Hastrup.

9
MR.
HASTRUP:
Yes,
good
evening.
I'm
Tim
10
Hastrup.
I'm
up
next
I
think.

11
CHAIRPERSON
LLOYD:
That's
fine.
We'll
take
you
12
next.
I
had
some
others,
but
that's
fine.

13
No,
there
was
some
confusion.
Carry
on.

14
(
Thereupon
an
overhead
presentation
was
15
Presented
as
follows.)

16
MR.
HASTRUP:
Okay.
Well,
I
wanted
to
share,

17
we're
still
very
much
happy
to
be
a
ZEV
family.
I
think
18
Toyota
said
it
very
nicely
when
they
talked
about
a
19
successful
launch.
We
just
started
this
ZEV
program
and
20
we'd
like
to
see
it
continue
on.

21
­­
o0o­­

22
MR.
HASTRUP:
And
I'm
kind
of
a
simple
guy.
I
23
manage
a
bunch
of
R&
D
engineers,
and
we
like
to
set
the
24
goal
for
a
­­

25
BOARD
MEMBER
HUGH
FRIEDMAN:
Excuse
me,
Mr.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
407
1
Hastrup,
could
you
put
that
mic
up
higher.

2
MR.
HASTRUP:
I
thought
it
was
pretty
high.
Oh,

3
that's
better.

4
BOARD
MEMBER
HUGH
FRIEDMAN:
That's
better.

5
Thank
you.

6
MR.
HASTRUP:
­­
like
to
set
the
goal
for
them
of
7
what
to
do.
And
I
have
a
problem
when
I
read
the
ZEV
8
regulations.
They
were
pretty
good.
I
had
trouble
9
sleeping
the
other
night.
I
read
them.
I
fell
asleep
10
pretty
quickly
because
they
were
so
complex.
And
my
11
recommendation
would
be,
boy,
could
we
look
at
maybe
12
making
them
a
little
bit
simpler,
so
maybe
the
gaming
13
wouldn't
be
quite
as
prevalent.

14
For
example,
at
the
gold
level,
pure
ZEVs
say
50
15
mile
range,
greater
than
55
top
speed,
single
source
16
energy.
I'd
also
like
to
see
some
significant
ZEV
vehicle
17
in
the
gold
standard.
Perhaps
some
kind
of
plug­
in
18
hybrid,
maybe
some
dual
source.
I
just
wonder
if
we
maybe
19
should
step
back.
It
seems
to
become
more
and
more
20
complicated
with
each
review,
and
it's
becoming
very
very
21
difficult
to
get
a
feel
for
where
the
regulations
are.

22
I'm
unfortunately
not
an
expert
and
don't
have
23
that
much
expertise
here.
But
it
just
seems
coming
in
24
from
the
outside,
wow,
this
is
really
complex.
And
it's
25
difficult
to
get
a
feeling
for
what's
going
on.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
408
1
A
couple
of
other
suggestions.
The
MOA
vehicles,

2
they
work.
They're
great.
Please
do
everything
that
we
3
could
to
deep
those
on
the
road.
And
if
it
means
giving
4
folks
credit
for
updating
them
and
getting
new
credits.

5
Hey,
that's
okay.
It
gets
ZEVs,
keep
ZEVs
on
the
roads.

6
And
I'd
also
like
to
recommend
that
cars
when
they're
7
available
be
available
for
purchase
or
lease
no
more
of
8
these
leases
without
the
purchase
option.

9
Thank
you
very
much.
I
appreciate
the
time.

10
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Robert
11
Gibney,
Daniel
Mccarthy.

12
Seems
to
me,
Chuck,
given
our
budget
shortage
13
maybe
you
can
put
this
on
tape
and
use
for
people
who
have
14
insomnia,
so
there
would
be
­­

15
(
Laughter.)

16
CHAIRPERSON
LLOYD:
Robert
Gibney,
Daniel
17
McCarthy
and
Mike
Thompson.

18
MR.
GIBNEY:
Good
evening,
Mr.
Chairman,
Board
of
19
Directors.
Thank
you
for
taking
the
time
to
be
today.

20
This
is
a
terrific
forum.
And
hopefully
you'll
hear
21
something
today
that
shows
that
there
is
in
fact
a
battery
22
technology
that
is
revolutionary
and
is
something
that's
a
23
breakthrough
to
the
industry
and
it's
called
Lithium
Metal
24
Polymer
technology.

25
(
Thereupon
an
overhead
presentation
was
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
409
1
Presented
as
follows.)

2
MR.
GIBNEY:
My
name
is
Robert
Gibney
and
I'm
3
with
Avestor,
Chief
Marketing
Officer.

4
­­
o0o­­

5
MR.
GIBNEY:
Today
I'd
like
to
tell
you
a
little
6
bit
about
the
company.
It's
basically
a
joint
venture
7
between
Hydro
Quebec
and
Kermigie
Corporation
in
the
8
United
States.
Almost
$
50
billion
in
assets
behind
these
9
two
companies.
They've
joined
together
to
develop
this
10
new
batter
technology.
And
it's
here.
It's
now.
It
is
a
11
reality.

12
In
fact,
this
battery
that's
shown
on
the
screen
13
is
now
in
production
out
of
Quebec
starting
this
month.

14
­­
o0o­­

15
MR.
GIBNEY:
This
is
truly
a
revolutionary
16
battery
design,
in
that
it
is
a
thin
film
lithium
based
17
polymer
technology
that
is
absolutely
the
best
battery
on
18
the
market
today.

19
It
has
the
highest
energy
density
of
any
battery
20
on
the
market.
It
is
now
commercial.
And
we're
now
21
taking
it
out
to
both
the
telecommunications
industries
22
and
others.

23
­­
o0o­­

24
MR.
GIBNEY:
This
production
facility
on
the
25
screen
here
shows
that
we
are
actually
in
production.
So
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
410
1
instead
of
coming
up
here
and
making
promises
that
one
day
2
we'll
have
a
product
for
you,
it
is,
in
fact,
here.

3
­­
o0o­­

4
MR.
GIBNEY:
And
our
plans
moving
forward
are
to
5
produce
battery
packs
for
electric
utilities,
and
the
6
automotive
industry.
In
2005,
we
intend
to
produce
an
EV
7
pack
for
a
French
consortium
with
Hydro­
Quebec
as
a
8
partner.

9
­­
o0o­­

10
MR.
GIBNEY:
In
fact,
we
announced
last
month
11
that
this
battery
pack
will
be
available,
will
provide
the
12
first
prototype
battery
back
of
this
SVE
project
in
13
November
of
this
year.

14
­­
o0o­­

15
MR.
GIBNEY:
We
intend
to
continue
to
invest
in
16
this
part
of
the
business.
We
think
the
EV
market
is
17
prime.
And,
in
fact,
the
company
is
prepared
to
invest
18
well
over
$
100
million
in
the
production
of
batteries
for
19
the
automotive
Industry
in
the
next
few
years.

20
­­
o0o­­

21
MR.
GIBNEY:
In
fact,
we
already
have
engineering
22
work
under
way
to
build
a
production
facility
in
the
23
southwest
western
United
States.
As
you
can
see
here,

24
it's
not
a
small
facility.
We
have
grand
plans
to
produce
25
large
quantities
of
batteries
both
EV,
HEV
as
well
as
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
411
1
telecommunications
and
utility
industries.

2
This
is
a
reality.
Both
partners
are
fully
3
committed
to
this
project.

4
­­
o0o­­

5
MR.
GIBNEY:
The
conclusion
of
my
presentation,

6
I'm
trying
to
keep
this
as
short
as
possible,
basically
is
7
that
this
is
a
reality.
This
technology
is
here.
The
8
other
battery
manufacturers
as
well
as
Avestor
are
9
contemplating
investing
large
amounts
of
dollars
to
meet
10
the
requirements
set
out
by
CARB.

11
If
you
continue
to
weaken
the
regulations,
we
may
12
be
hesitant
to
invest
in
advanced
battery
technologies
in
13
the
future.
We
respectfully
request
that
CARB
reject
any
14
major
modifications
to
its
ZEV
mandates.

15
CHAIRPERSON
LLOYD:
Thank
you
very
much
for
16
coming.

17
Daniel
McCarthy.
After
that,
if
Mr.
Serge
Roy
is
18
he
here
too.
Are
you
going
to
­­
okay,
so
after
that
19
maybe
you
can
comment
on
the
same
thing.

20
MR.
McCARTHY:
Good
evening.
I'm
Dan
McCarthy
21
I'm
Chief
Operating
Officer
of
Evercel
Incorporated
from
22
Bingham
Mass.
And
we
are
manufacturers
of
advanced
nickel
23
zinc
batteries.
So
I'll
be
following
on
the
same
line
as
24
some
previous
battery
manufacturers.

25
But
I'm
here
to
speak
on
one
issue.
And
that's
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
412
1
the
claim
that
ZEV
vehicles
are
hindered
by
the
lack
of
2
advancement
in
battery
technologies.

3
Evercel
in
the
last
two
years
spending
$
50
4
million
on
development
of
the
battery,
has
cut
the
cost
5
per
kilowatt
hour
from
$
900
down
to
$
300.
And
these
6
nickel
zinc
batteries
are
currently
in
production
and
7
currently
commercially
available
for
sale
at
a
price
of
8
$
300
per
kilowatt
hour.

9
When
Dr.
Anderman
gave
his
evaluation,
of
nickel
10
zinc
battery
technology
­­
of
battery
technologies,
he
set
11
as
a
goal
in
the
future
for
nickel
metal
hydride
a
goal
of
12
$
9,000
for
a
30
kilowatt
hour
battery
pack.
We
currently
13
sell
a
32
kilowatt
hour
battery
pack
for
$
9,000.
It
is
14
currently
running
in
electric
vehicles.
It
is
currently
15
being
evaluated
at
your
CARB
facility
in
El
Monte,

16
California.
And
it
is
also
being
evaluated
by
Southern
17
California
Edison.

18
This
battery
has
been
available
since
late
2002.

19
And
previously
our
company
has
focused
on
the
marine
20
market.
But
this
battery
is
available
and
I
found
it
21
surprising
that
Dr.
Anderman
and
this
technology
review
22
did
not
even
address
the
subject
of
nickel
zinc
battery
23
technology.

24
Those
are
my
only
comments.

25
Thank
you.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
413
1
CHAIRPERSON
LLOYD:
Thank
you
very
much.

2
Serge
Roy
and
then
Mike
Thompson,
Marilyn
Bardet.

3
(
Thereupon
an
overhead
presentation
was
4
Presented
as
follows.)

5
MR.
ROY:
Good
evening,
Mr.
Chairman
and
Board
6
Members.
I
would
like
to
thank
you
for
your
patience
and
7
endurance
in
allowing
me
to
share
my
concerns
and
some
8
facts
about
EVs.

9
­­
o0o­­

10
MR.
ROY:
Hydro­
Quebec
is
one
of
the
largest
11
electric
utility.
But
what's
more
important
is
we're
12
supplying
about
six
percent
of
the
renewable
energy
in
the
13
world
right
now,
because
of
our
hydro
facilities.

14
But
Hydro­
Quebec
has
gone
farther
than
just
15
energy
supply.
We've
been
active
in
helping
the
16
development
of
clean
energy
technologies.
And
with
17
Hydro­
Quebec
Capitech
venture
capitals
subsidiary
of
18
Hydro­
Quebec,
we
have
invested
or
are
managing
an
19
investment
of
more
270
million
in
clean
energy
20
technologies,
of
which
174
million
are
enabling
21
technologies
for
all
types
of
EV,
battery,
hybrid
and
fuel
22
cell
EV.

23
Of
course,
the
Avestor
lithium
metal
polymer
24
battery
and
TM4
electric
drive
train
are
the
most
25
important
investment
that
we've
made.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
414
1
And
as
Robert
Gibney
just
mentioned
SV
is
a
2
group,
a
French
group
of
large
companies,
who
actually
3
manufacturer
half
of
the
battery
EVs
on
the
road
today
in
4
the
world,
7,000
battery
EVs
for
Citroen
have
chosen
our
5
components
Avestor
lithium
metal
polymer
battery
as
well
6
as
CM4
electric
drive
train
to
power
their
battery
EV
in
7
the
development
stage.

8
I
must
mention
that
according
to
the
9
classification
that
you
have,
this
is
a
Type
2
full
10
function
battery
EV,
four
door,
four
seats,
more
than
100
11
miles
range,
with
a
range
extender
that
can
have
the
car
12
go
for
200
miles.

13
The
plan
is
for
commercialization
of
that
vehicle
14
in
late
2005,
2006
for
Europe
and
North
America.

15
­­
o0o­­

16
MR.
ROY:
Hydro
Quebec
with
its
partner
has
been
17
committed
for
the
last
20
years
to
deliver
the
key
18
technologies
for
battery
EV,
the
battery.
As
seen
on
past
19
event
and
present
events
we
still
are
maintaining
our
­­

20
we
are
maintaining
our
course
that
we
set
in
1979.

21
We
have
to
commit
before
the
end
of
2003
large
22
sums
of
money
to
produce
battery
EVs
and
also
to
get
cars
23
on
the
market.

24
I
must
emphasize
that
a
further
deterioration
of
25
the
ZEV
goal
standard
as
proposed
in
the
staff
report,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
415
1
will
send
a
strong
signal
to
the
public
to
key
battery
EV
2
component
manufacturer
like
Avestor
and
TM4
as
well
as
key
3
investors
in
those
companies
that
battery
electric
4
vehicles
are
not
viable.

5
We
respectfully
disagree
and
are
ready
to
commit
6
the
large
resources
that
are
needed
to
bring
to
market
7
battery
EVs
that
meet
customer's
expectations.
But
to
8
maintain
our
course,
we
need
CARB
to
maintain
the
minimum
9
course
on
BEV
that
it
had
set
in
1999
and
maintain
in
10
2001.

11
Thank
you.

12
CHAIRPERSON
LLOYD:
Thank
you
very
much.

13
Thanks.

14
Mike
Thompson,
Marilyn
Bardet
Bev
Sanders.

15
MR.
THOMPSON:
Okay.
Let
me
start
with
a
visual
16
aid.

17
This
is
a
solar
panel.
I'm
Mike
Thompson.
I
18
have
two
Toyota
vehicles,
since
GM
yanked
my
EV1
at
42,700
19
miles.
My
RAV4
now
has
4,000
miles
in
its
first
four
20
months.
The
Prius
has
4,000
miles
in
a
year.
So
I
rack
21
up
14,000
miles
a
year
electric,
solar
powered
by
the
roof
22
with
the
panels
on
my
roof.
That's
only
possible
because
23
CARB
made
battery
electric
vehicles
possible.
I
can't
do
24
that
without
the
actions
of
this
board.
So
I've
got
25
14,000
miles
a
year
on
the
EV,
4,000
on
the
Prius.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
416
1
Referencing
Tim
Hastrup's
point
about
the
2
relative
energy
efficiency
of
fuel
sells,
versus
EVs.
I
3
could
not
afford
to
do
this
with
a
fuel
cell.
That's
why
4
the
battery
EV
path
is
so
important.

5
Every
RAV4
EV
offered
was
taken.
These
are
going
6
to
come
out
as
bullet
items
since
we've
got
a
short
time.

7
Fleets
did
not
significantly
participate
in
2002
8
demand.
Their
buying
cycles
are
along
in
probably
cycles
9
of
a
year
or
more
to
get
grant
money
and
line
up
and
10
approve
all
the
fleet
projects.
So
there
is
pent
up
11
demand
for
thousands
and
fleets.
So
this
five
a
month
12
figure
for
demand,
I
can't
imagine
how
that
can
be
a
13
realistic
figure.

14
There's
actually
a
Toyota
salesman
who
was
15
unaware
that
a
RAV4
EV
even
existed
at
the
dealership.
So
16
I
question
the
effectiveness
of
the
general
marketing
17
campaign.
The
Toyota.
com
RAV4
EV
site
was,
in
fact,

18
misprinted
the
URL
in
their
publication
materials.
I've
19
caught
the
site
down
on
numerous
occasions
and
Emailed
20
Toyota
about
it.

21
I
also
found
numerous
inaccuracies
in
charging
22
locations
and
other
items,
which
I
brought
to
the
23
attention
of
Toyota.
They
were
very
slow
in
correcting
24
those
issues.
The
site
currently
has
about
a
12
question
25
fact
which
basically
says
we're
not
doing
EVs
anymore
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
417
1
because
there
is
no
demand.
All
the
specifications
for
2
the
vehicles
are
gone.
All
the
relevant
information
to
3
support
current
drivers
is
gone.

4
I
wouldn't
make
a
big
deal
of,
but
they
brought
5
it
up
in
testimony,
I
think
we
need
the
full
picture
on
6
that.
When
it
was
up
actually
it
had
some
good
stuff
on
7
it,
so
I
have
to
commend
them
for
that.

8
In
terms
of
public
outreach
and
stimulating
9
demand
among
consumers,
battery
electric
vehicles
are
in
10
consumer
hands
today
except
for
those
not
allowed
to
11
release
by
the
manufacturer.
These
consumers
are
12
providing
some
of
the
most
wide
spread
and
effective
13
public
education
outreach
and
marketing.
EV
consumers
14
driver
sales.

15
Some
of
the
things,
I
get
­­
I'm
sorry,
I
16
paraphrased.
These
are
not
exact
quotes
from
people
I've
17
taken
for
test
drives
or
driven
my
EV.

18
I
didn't
know
EVs
were
available.
I
didn't
know
19
Toyota
made
a
RAV4
EV
version.
This
is
so
quiet.
I
don't
20
like
the
smell
of
maintenance
of
gas.
I
want
an
EV.

21
So
we
sell
them.
Some
other
drives
have
sold
22
electric
vehicles
at
lunches.
So
we
drive
the
demand.
We
23
need
the
vehicles
out
with
the
public
so
we
can
create
the
24
market
and
drive
the
demand.
If
we
don't
have
the
25
vehicles,
we
can't
do
that.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
418
1
Unique
advantages
of
EVs.
They're
quiet.
You
2
don't
mess
with
gas.
Things
like
120
volt
power
sources
3
for
construction
tools
and
stuff
like
that.
Those
are
4
unique
advantages
that
need
to
be
pushed
with
these
5
advanced
technologies,
so
that
we
actually
stimulate
a
6
market
by
the
unique
advantages.

7
We
must
mandate
some
BEV
production
to
continue
8
this
public
Education.
Two
hundred
and
fifty
fuel
cell
9
demo
vehicles
in
the
later
2005
timeframe,
whatever
it
10
works
out
to,
leaves
an
educational
gap.
Most
will
be
in
11
fleets
oh
even
in
consumer
hands.
It's
only
in
250
12
people's
hands.

13
So
if
they're
not
tied
up
in
demo
fleet
someplace
14
and
you
put
all
250
fuel
cell
vehicles
out
there,
it's
15
only
250
in
California
to
reach
out
to
the
rest
of
the
16
public
later.
If
you
want
to
stimulate
a
market,
it's
not
17
enough
outreach
to
the
public.
That
plan
will
not
change
18
the
mindset
of
the
buying
public
for
the
ramp
up.
So
we
19
need
to
ramp
up
the
public,
too.

20
CHAIRPERSON
LLOYD:
Can
you
bring
this
to
a
close
21
here.

22
MR.
THOMPSON:
Current
fuel
cell
electric
vehicle
23
leases
in
southern
California,
there's
about
6,000
a
24
month,
which
is
almost
20
times
the
lease
rate
for
an
25
electric
vehicle.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
419
1
Near
term
ZEV
is
about
public
education,
market
2
development,
and
technology
development.
Technology
3
notes,
we've
heard
about
battery
improvements
to
nickel
4
metal
hydride.
The
Type
3
EVs,
battery
electric
vehicles,

5
I'm
not
sure
about
the
total
ramifications
of
Type
3,
but
6
with
fast
charging
electric
vehicles
can
be
a
Type
3
7
vehicle
from
what
I
understand
of
it.
I
need
to
study
up
8
on
that.

9
But
fast
charging
­­
fast
refueling
does
not
10
necessarily
eliminate
EVs
when
we
have
fast
charging,

11
which
is
technically
possible
to
develop
and
GM
has
12
already
produced
the
50
kilowatt
charger.

13
CHAIRPERSON
LLOYD:
I
must
ask
you
to
finish,

14
please.

15
MR.
THOMPSON:
Okay.
If
I
had
a
plug­
in
Prius,

16
would
double
my
gas
economy.
We
need
diversity
in
17
solutions.
We
need
some
full
function
BEVs
produced.
It
18
has
to
be
mandated,
because
if
it's
not
mandated,
it's
not
19
going
to
get
produce.
Maybe
you
can
arrange
credit
20
swapping
between
the
manufacturers
so
some
can
pick
one
21
path
or
the
other,
but
there
have
to
be
full
function
22
battery
EVs
available,
or
we
cannot
get
to
the
public.

23
We
cannot
have
a
true
zero
emission
vehicle
path
24
like
many
of
us
have,
probably
five
percent
or
more
of
the
25
RAV4
drivers
are
at
true
zero
emissions,
because
we
are
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
420
1
using
renewable
energy
to
power
them.
And
that
is
none
2
trivial.
Don't
give
it
up.

3
CHAIRPERSON
LLOYD:
Thank
you.

4
Marylin
Bardet,
Bev
Sanders,
Clare
Bell.

5
MR.
THOMPSON:
Dave
Modisette's
plan
was
cool
6
too.

7
CHAIRPERSON
LLOYD:
Thank
you.

8
MS.
BARDET:
Good
evening,
board.
I'm
very
glad
9
to
be
here.
And
I
feel
that
it
has
been
an
endurance
10
record
to
sit
through
such
a
long
meeting.
But
thank
you
11
very
much
for
this
opportunity.

12
My
name
is
Marylin
Bardet
and
I'm
a
resident
of
13
Solano
county
along
the
Carquinez
Straight
from
the
City
14
of
Benicia,
the
first
American
city
in
California.

15
All
politics
is
local
the
former
Speaker
of
the
16
House
from
Massachusetts
Tip
O'Neal
used
to
say.
What
he
17
meant
was
listen
to
your
voters.

18
The
national
energy
policy
or
as
I
consider
it,

19
the
lack
of
one,
is
being
played
out
in
our
area,
and
the
20
debate
is
heating
up
about
whether
our
refinery
owned
by
21
Valero
Energy
Corporation
of
San
Antonio,
Texas
a
huge
oil
22
industry
conference
was
just
held
this
week,
will
be
23
allowed
to
expand
its
production
capacity
and
thus
be
24
allowed
to
produce
greater
percentages
of
dirtier
crude
25
oil
as
opposed
to
the
more
expensive
sweet
crudes
from
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
421
1
Alaska,
a
source
now
dwindling.

2
The
debate
is
whether
we
can
ever
achieve
a
3
sustainable
economy
as
our
local
general
plan
calls
for.

4
Five
years
ago
my
good
friends
Bev
and
Chris
Sanders
5
became
the
proud
leasees
and
drivers
of
an
electric
car,

6
the
sexy
little
EV1.
If
it
hadn't
been
for
my
friends
and
7
my
chance
to
be
a
driver
and
passenger
of
this
amazingly
8
quite,
comfortable
and
zippy
machine,
I'd
never
have
known
9
about
the
car's
existence
or
its
performance.

10
The
EV1
continues
to
attract
attention
in
our
11
town
and
on
the
road
wherever
Bev
cruises.
The
site
of
a
12
car
that
doesn't
make
more
than
a
high
hum
at
rev
up
and
13
is
virtually
silent
at
cruising
speeds,
produces
a
kind
of
14
shock
and
awe
for
bystanders
we
could
all
happily
want
to
15
sponsor.

16
They
proudly
tell
friends
and
anyone
who
cares
to
17
listen,
the
minimal
cost
of
keeping
the
EV
running.
Over
18
five
years
no
servicing
required,
averaging
$
8
per
month,

19
which
shows
up
on
their
PG&
E
bill.
No
visits
to
gas
20
stations.

21
The
EV
1
represents
one
of
the
best
hopes
for
our
22
future
to
help
reduce
national
energy
consumption
and
23
reliance
on
the
petroleum
industry.
Why
has
Detroit
or
24
Washington,
the
oil
industry,
decided
not
to
promote
25
production
of
the
EV1?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
422
1
I
learned
a
little
bit
more
about
where
the
2
energy
industry
is
headed.
I
helped
successfully
defeat
3
the
proposal
by
Bechtel
Corporation
and
Shell
U.
S.
A.
Power
4
and
Gas
to
build
a
dangers
liquefied
natural
gas
tanker
5
terminal
and
900
megawatt
powerplant
at
Mare
Island
6
Vallejo
at
the
mouth
of
the
Carquinez
Straight,
the
portal
7
to
the
bay
area,
along
one
of
the
worlds
most
powerful
8
waterways.

9
So
many
citizens
rose
up
to
defeat
the
Bechtel
10
project
that
Shell
and
Bechtel
had
to
withdraw
their
11
proposal
before
a
feasibility
study
would
have
locked
in
12
their
development
rights.

13
I
had
to
a
ask
why
the
project
was
vaunted
as
so
14
necessary
to
California's
energy
future.
If
the
oil
15
industry
intends
to
control
the
energy
future
for
all
of
16
us
with
hybrid
fuel
cell
vehicles
favored,
then
California
17
will
inevitably
prove
their
point
building
more
18
powerplants
and
LNG
terminals
to
bring
the
natural
gas
19
that
would
be
the
source
of
hydrogen.
But
producing
20
hydrogen
will
require
loads
more
energy,
electricity,
as
21
has
been
pointed
out
here.

22
This
means
more
gas­
fired
powerplants.
If
23
Bechtel
had
its
way
and
other
energy
czars,
we
were
going
24
to
get
a
900
megawatt
powerplant
at
Mare
Island
and
a
new
25
one
in
Antioch
to
complement
the
existing
new
CalPERS
plan
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
423
1
at
Pittsburgh.
Thus
in
10
years,
just
in
time
for
the
2
beginning
hydrogen
future.
We'd
have
a
tic,
tac,
toe
up
3
the
Carquinez
Straight,
three
powerplants
in
a
row,

4
belching
emissions
and
polluting
our
already
polluted
air.

5
This
besides
existing
contributions
from
cogen
6
plants
now
installed
at
Valero
refinery
and
C&
H
Sugar
in
7
Crockett.

8
Our
Solano
county
will
pay
dearly
for
such
an
9
energy
future.
The
fact
is
without
a
plan
for
energy
10
conservation
and
alternatives
fuel
such
as
solar,
we
will
11
be
stuck
with
an
expanding
energy
grid
and
increased
12
pollution
from
powerplants,
cars
and
refineries.

13
The
EV1
should
be
produced,
improved
and
14
promoted.
The
EV1
depends
on
­­
I'm
going
to
finish
15
because
I
feel
that
there
are
very
few
people
from
the
16
public
who
are
not
associated
to
a
company
and
who
are
17
women
here
to
talk
about
what
we
do
in
our
towns
and
the
18
trenches
to
protect
ourselves
and
our
families
health.

19
CHAIRPERSON
LLOYD:
I
just
thought
you
might
want
20
to
come
up
for
air.

21
That's
okay.

22
(
Laughter.)

23
MS.
BARDET:
Oh,
Thank
you
very
much.
And
I
do
24
have
bronchitis.

25
The
EV1
depends
on
a
battery
that
can
be
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
424
1
recharged.
The
EV1
can
be
plugged
into
solar
energy
2
panels
owned
by
a
homeowner.
Batteries
could
be
changed
3
out
at
solar
charging
service
stations.
Numbers
of
people
4
could
be
off
the
grid.
Is
this
what
the
State
of
5
California
and
the
oil
industry
is
afraid
of.

6
If
so,
perhaps
rather
than
killing
the
EV1
7
program,
we
could
devise
a
strategy
for
deriving
revenues
8
from
decentralized
and
democratic
Solar
energy
9
distribution
systems.

10
Hybrid
cars,
no
matter
how
efficient,
will
still
11
depend
on
oil
and
natural
gas
imports.
The
EV1
could
help
12
offset
increased
energy
consumption
by
offering
citizens
13
the
opportunity
to
drive
a
completely
sustainable
vehicle.

14
The
cost
of
the
EV1
would
go
down
if
all
of
its
15
benefits
were
well
advertised.
The
electric
car
would
16
finally
get
a
charge
from
the
public.
Demand
would
grow.

17
But
so
far,
the
EV1
has
been
treated
by
the
industry
like
18
a
stealth
vehicle,
a
bomber.

19
The
EV1s
disappearance
after
a
few
years
of
20
trials
is
a
case
of
industry
overkill,
an
instantly
21
manufactured
obsolescence,
as
though
it
were
an
EV
Edsel.

22
If
you
kill
the
program
that
encourages
the
production
of
23
the
EV
1
in
California,
you
will
only
be
handing
an
24
economic
bonanza
to
the
Chinese,
who
are
already
leading
a
25
lithium
battery
development
in
production
program.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
425
1
China
knows,
it
cannot
afford
to
have
one
billion
2
people
driving
gas
guzzlers
or
even
hydrogen
hybrids.
The
3
Chinese
will
be
anxious
just
like
the
Japanese
to
take
4
advantage
of
your
imagination.
They
could
beat
us
to
a
5
sustainable
energy
future
for
transfer.
I
say
protect
the
6
planet,
go
solar,
go
EV1
go
gold.

7
Thank
you.

8
CHAIRPERSON
LLOYD:
Thank
you.
Bev
Sanders,
is
9
Bev
your
real
name?

10
MS.
SANDERS:
Bev
Sanders.

11
CHAIRPERSON
LLOYD:
Okay.
That's
very
12
appropriate.

13
(
Laughter.)

14
CHAIRPERSON
LLOYD:
Clare
Bell,
Elaine
Lissner.

15
MS.
SANDERS:
Pardon
me?

16
CHAIRPERSON
LLOYD:
I
was
calling
the
people
17
behind
you,
so
they
get
ready.

18
MS.
SANDERS:
Yes.
My
name
is
Bev
Sanders.

19
That's
B­
e­
v
Sanders.

20
And
among
­­
besides
being
Marylin
Bardet's
Vanna
21
White
here.
I've
driven
a
GM
EV1
for
nearly
five
years.

22
It's
been
my
only
vehicle.
As
a
matter
of
fact
I
drove
it
23
here
today
from
Benicia,
a
tiny
refinery
town
on
the
24
Carquinez
Straights.
I'm
here
today,
tonight
all
day,

25
instead
of
at
work,
because
I
wanted
to
stress
to
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
426
1
members
of
CARB
a
simple,
yet
very
crucial
message,
that
2
is
that
California
can
save
the
world.

3
Never
underestimate
the
power
of
a
single
action
4
no
matter
how
small
it
appears.
History
is
loaded
with
5
tiny
actions
that
triggered
ripples
around
the
globe.
And
6
I've
seen
this
firsthand.

7
Twenty
years
ago
I
was
part
of
the
early
8
development
of
the
snowboard
industry
which
has
many
roots
9
in
the
state
of
California.
The
sport
at
once
was
10
outlawed
to
ski
resorts.
But
vision
and
innovation
have
11
made
it
an
essential
part
of
winter
sports.
And
now
the
12
U.
S.
is
proud
of
their
Olympic
Gold
Medal
snowboarders.

13
In
another
example,
I
continue
in
the
development
14
of
women
specific
products
in
California
Image
Sports
of
15
snowboarding
and
surfing,
both
male
dominated
markets
that
16
have
been
missing
the
boat,
ignoring
the
women's
needs.

17
Now,
their
female
segments
are
the
fastest
18
growing
portions
of
their
business.
I've
seen
a
little
19
spark.
I've
seen
how
fast
things
can
change
and
how
20
quickly
the
changes
become
standard.

21
But
these
changes
didn't
happen
on
their
own
22
Without
strong
resistance.
Even
the
computer
industry
has
23
had
resistance
from
people
holding
on
to
their
24
typewriters.

25
When
the
manufacturers
say
people
don't
want
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
427
1
electric
cars,
it
reminds
me
of
the
sports
business
saying
2
kids
don't
want
snowboards
and
women
don't
want
to
surf.

3
The
people
who
don't
want
electric
car
myth
has
4
been
perpetuated
by
little
advertising,
boring
advertising
5
against
a
barrage
of
prime
time
SUV
adds.
Drivers
didn't
6
want
electric
cars
because
they
never
knew
they
had
7
electric
cars.

8
In
fact,
when
I
would
tell
them,
they
couldn't
9
get
them
when
they
went
to
find
them.

10
So
how
can
California
save
the
world?
Over
10
11
years
ago
the
California
Air
Resources
Board
took
the
12
courageous
action
of
demanding
car
makers
produce
cars
13
that
did
not
continue
to
pollute
California's
air.

14
No
other
State
could
make
such
a
demand.

15
Actually,
very
few
countries
could
have
any
bargaining
16
power
against
a
company
like
General
Motors.
Their
goal
17
at
the
time
was
driven
by
their
premonition
that
if
they
18
would
continue
to
depend
on
internal
combustion
engines
to
19
drive
their
cars,
we
would
all
eventually
suffocate.

20
California
being
one
of
the
largest
car
markets
21
in
the
world
told
the
largest
car
makers
in
the
world
that
22
if
they
wanted
to
sell
their
cars
in
this
state,
they
23
better
get
on
the
trail
to
zero
emissions.
California
24
would
no
longer
suffer
as
the
automakers
continue
grow
25
vast
wealth
and
the
expense
of
our
health
and
environment.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
428
1
It's
hard
to
gauge
whether
the
CARB
board
had
a
2
vision
of
what
the
world
would
like
today.
Could
they
3
known
that
just
13
years
later,
we'd
be
straining
the
4
relationships
with
our
international
friends
attacking
oil
5
rich
nations
to
keep
the
pumps
pumping.
Could
they
have
6
known
that
the
petroleum
age
was
going
to
have
a
prolonged
7
and
bloody
ending.

8
It
doesn't
matter
now.
What
does
matter
is
that
9
those
rare
visionaries
at
CARB
knew
that
they
had
to
get
10
off
oil,
and
they
knew,
with
moderate
and
reasonable
11
prodding
of
the
engineers
and
suppliers
they
could
meet
12
the
challenge
despite
the
short­
sighted
goals
of
auto
13
executives.
And
they
were
right.
They
were
right
as
14
anyone
ever
has
been.

15
CHAIRPERSON
LLOYD:
Can
you
begin
to
wrap
up,

16
please.

17
MS.
SANDERS:
Yes.
A
couple
more
lines.
Thank
18
you.

19
Their
were
right
at
the
right
time.
If
our
world
20
could
ever
use
a
massive
shift
from
a
precarious
dirty
21
business
to
a
clean
and
efficient
future,
it's
now.
The
22
electric
car
was
an
experiment.
It's
not
anymore.
It's
23
proof.
It's
testimony
to
our
own
resolve
and
innovation.

24
It's
hope
for
our
future.
It's
the
little
spark.
I
thank
25
the
previous
members
of
CARB
who
championed
the
mandate
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
429
1
that
revolutionized
the
way
I
travel.

2
They
offered
me
freedom
from
as
far
beyond
3
rhetoric
of
politicians.
They
had
the
dream
and
the
dream
4
came
true.
The
small
action
truly
made
a
difference
and
5
changed
the
world.
Today's
CARB
members
need
only
6
maintain
the
momentum.
Please
the
world,
maintain
the
7
mandate.

8
Thank
you.

9
CHAIRPERSON
LLOYD:
Thank
you
very
much.

10
Clare
Bell,
Elaine
Lissner
and
Kimberly
Rogers.

11
MS.
BELL:
Well,
first
I'd
like
to
thank
the
CARB
12
board
for
making
my
profession
possible.
I
am
a
traveling
13
electric
vehicle
repair
person.
I
mostly
do
Sparrows.
I
14
can
do
other
electric
vehicles.

15
I'd
like
to
urge
you
to
keep
the
policy
­­
to
16
include
a
requirement
for
BEVs
in
the
alternative
17
compliance
plan.

18
BOARD
MEMBER
HUGH
FRIEDMAN:
Excuse
me,
can
I
19
interrupt.
I
wondered
what
EVET
meant,
that
you're
a
20
medic
for
electric
vehicles.

21
MS.
BELL:
I
am,
yes.
This
is
a
profession
I
22
kind
of
invented
myself
with
some
help
from
encouraging
EV
23
owners.

24
I'd
like
to
say
I've
been
in
the
trenches
with
25
the
EV
people.
The
people
who
drive
them
on
a
daily
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
430
1
basis.
Mostly
it's
been
Sparrows,
but
it's
also
been
2
other
conversion
vehicles.
My
experience
has
been
that
3
the
EV
owners,
despite
problems
with
the
EVs
despite
4
limitations
with
the
EV's,
even
despite
bad
publicity
and
5
other
things,
they
are
very
tenacious
about
wanting
to
6
keep
their
cars
on
the
road.

7
Not
only
that,
other
people
are
constantly
8
inquiring
about
various
cars,
including
this
­­
well
the
9
motorcycle
type
Sparrow.

10
I
disagree
entirely
with
the
car
companies
when
11
they
say
there's
no
demand.
I
see
demand
every
single
12
day,
not
only
in
the
people
who
are
interested
who
are
13
want­
to­
bes,
but
in
the
people
who
have
the
cars,
have
14
problems,
overcome
them
and
keep
them
on
the
road.

15
I'd
also
like
to
point
out
one
thing,
and
that
is
16
your
Board
is
very
favorable
toward
station
car
programs
17
and
transit
based
EV
programs.
Most
of
the
city
type
cars
18
that
would
be
in
those
programs
are
at
the
present
battery
19
EVs
made
by
third
parties.

20
I
would
like
to
encourage
the
Board
to
keep
the
21
BEV
provision
in
the
alternate
path
because
that
would
22
encourage
makers
of
such
EV's
as
the
Think
City,
for
23
instance,
which
is
now
being
handled
by
Cam
Corp,
not
24
Ford.
So
it's
no
longer
an
American
automaker.

25
And,
in
fact,
that
particular
manufacturer
has
no
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
431
1
incentive
to
bring
the
City
to
California,
other
than
if
2
the
larger
automakers
purchase
credits
from
that
company
3
or
give
them
credits
that
allow
them
to
bring
the
car
in,

4
and
make
it
economically
viable
for
them
to
bring
the
car
5
back
to
California,
because
the
Think
City
is
already
6
here,
but
it
may
be
pulled
out
as
we
know.
That
goes
for
7
some
other
small
third
party
manufacturers.

8
So
I
think
we
have
look
to
look
at
near
term
BEVs
9
especially,
the
ones
we
already
have.
We
have
the
Think
10
City.
We
have
the
EV1.
We
have
the
RAV4.
Why
should
the
11
EV1
be
taken
away
and
crushed?
Personally,
I
think
that's
12
criminal.

13
I
think
the
Think
City,
even
the
European
one
14
would
be
modified
so
they
can
stay
here.
I
think
Cam
Corp
15
should
be
encouraged
to
bring
the
new
Think
City's
back
16
into
California.
We've
already
proved
there's
demand.

17
We've
proved
there's
practicality.
I
wouldn't
be
doing
18
what
I'm
doing
if
there
wasn't.
I
wouldn't
have
a
job.

19
There
are
EVs
out
there.
They
need
more
services.

20
CHAIRPERSON
LLOYD:
Thank
you.

21
Elaine
Lissner,
Kimberly
Rogers
and
Patricia
22
Lakinsmith.

23
MS.
LISSNER:
My
name
is
Elaine
Lissner.
I've
24
come
from
San
Francisco.
I
drive
a
Think
City,
very
25
happily,
but
I
won't
go
into
that.
I
want
to
try
to
focus
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
432
1
on
the
numbers,
head
your
call
that
you're
looking
for
2
some
guidance
here.
I
really
didn't
realize
how
3
complicated
the
issue
is.

4
I'm
not
sure
whether
I'm
going
to
take
three
5
minutes
or
four,
but
I
hope
you'll
hear
me
out
if
I
focus
6
on
the
numbers.

7
Let's
see.
I
won't
go
into
demand,
how
I'm
not
a
8
Hollywood
actress,
or
a
­­
anyway.

9
I
want
to
talk
about
the
alternate
compliance
10
option.
I
have
some
concerns
about
it.
The
things
I
11
favor
first
of
all,
in
the
staff
proposal,
are
the
12
clarification
of
language
to
avoid
lawsuits.
It
seems
13
pretty
logical.
I
favor
the
start
date
delay.
It
seems
14
like
there's
kind
of
no
way
around
that.

15
My
main
concerns
are
the
alternative
compliance
16
path,
the
long­
term
changes,
the
credit
calculations,
both
17
gold
and
silver.
Basically,
I
want
to
take
off
my
18
electric
driver
hat
here
and
just
speak
as
a
Californian.

19
I'm
concerned
these
are
way
too
complicated.

20
And
what
I
heard
the
Ford
spokesman
saying,

21
basically,
is
they're
going
to
sue
us
left,
right
and
22
center
if
it's
this
complicated.
And
I
want
to
make
23
proposals
for
simplifying
it.

24
I'm
just
scared
that
the
California
Air
Resources
25
Board
is
supposed
to
regulate
air
and
emissions.
And
I
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
433
1
think
as
soon
as
it
regulates
technology,
that
it's
liable
2
to
a
lawsuit.
And
all
these
percentages
­­
I
mean
not
3
percentages,
but
numbers
and
so
forth.
Everyone
of
those
4
can
be
picked
at.
And
we,
as
a
State,
you
know,
my
nephew
5
with
asthma
can
be
stalled
for
everything
they
can
pick
6
at.

7
And,
although,
I
have
an
electric
vehicle
and
8
want
them
to
survive,
I
think
if
you
regulate
fuel
cell,

9
you
know,
require
250
fuel
cells
or
require
battery
10
electric
vehicles,
you're
leaving
yourselves,
us,
the
11
State,
open
to
lawsuits.
And
I'm
not,
you
know,
a
lawyer
12
here.
So
maybe
I'm
wrong.

13
But
my
proposal
is
categories
should
be
based
on
14
emissions,
and
credits
should
be
based
on
function
not
15
technology
used
to
get
there.

16
A
gold
category
should
be
zero
emissions.
And
it
17
seems
like
there
is
no
way
to
attack
that
in
a
law
suit.

18
And,
you
know,
I'm
pretty
negative
on
fuel
cells
after
19
reading
the
Wall
Street
Journal
article
on
the
7th.
It
20
was
something
like
hydrogen
maybe
clean
but
getting
it
21
here
looks
messy.
Anyway.

22
I
think
if
we
give
extra
credits
to
fuel
cells,

23
that's
discriminating
on
a
technology
and
again
open
to
a
24
lawsuit.
Just
as
it
would
with
electric
cars.

25
So
here's
my
proposal.
Let's
say
battery
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
434
1
technology
is
still
improving,
but
it's
about
75
percent
2
of
where
we'd
like
it
to
be.
So
I'm
just
going
to
be
weak
3
and
say
let's
go
1.5
percent
requirement.
This
is
an
4
alternative
compliance
path.
And
if
we
have
to
do
what
5
the
staff
proposed
right
now,
I'd
rather
just
leave
the
6
original
2001
stuff.
But
here's
an
idea
for
an
7
alternative
compliance.

8
One
1.5
percent
gold
requirement
starting
in
9
2005.
No
regulating
technology
or
fuel,
only
regulating
10
emissions.
And
credits
based
on
function
not
cost.
And
11
here's
just
what
I
came
up
with
today
from
listening.
I
12
came
up
with
1.5
credits
for
a
freeway
capable,
55­
mile
an
13
hour
capable,
100­
mile
range
vehicle
that
can
charge
or
14
fuel
in
25
minutes
or
less.

15
One
credit
for
a
freeway
capable
car
with
a
50
16
mile
range.
And,
okay,
again
this
is
just
guessing
on
17
what's
going
to
not
let
automakers
cheat
with
NEVs
18
basically,
but
not
kill
NEVs,
.1
credits
for
any
NEVs,
so
19
that
would
be
10
NEVs
to
one
City
Car.
And
that,
you
20
know,
that
could
be
modified.
I'm
just
guessing
what
21
would
be
a
medium
there.
So
that's
one
1.5
percent
gold
22
requirement.

23
Two,
all
current
EVs
­­
all
EVs
that
are
on
the
24
road,
made
available
for
sale
to
drivers
who
want,
I'm
25
almost
done
here.
So
that's
all
current
EVs
made
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
435
1
available
for
sale
to
drivers
who
want.

2
Three,
a
return
to
firm
2001
numbers
in
the
3
long­
term
so
that
the
battery
companies,
you
know,
don't
4
stand
here
and
say
we're
going
to
stop
investing.

5
And
4,
no
review
or
waffling
before
2009.

6
Thank
you.

7
CHAIRPERSON
LLOYD:
You
came
up
with
all
that
8
sitting
there.
I
don't
know
what
staff
has
been
doing
all
9
this
time.

10
(
Laughter.)

11
BOARD
MEMBER
DeSAULNIER:
Yes,
but
she
didn't
put
12
us
to
sleep.

13
(
Laughter.)

14
BOARD
MEMBER
HUGH
FRIEDMAN:
Don't
let
her
get
15
away.
Hire
her.

16
EXECUTIVE
OFFICER
WITHERSPOON:
I
was
thinking
we
17
should
hire
her.

18
BOARD
MEMBER
DeSAULNIER:
What
do
you
do
for
a
19
living?
We
have
a
question.

20
(
Thereupon
an
overhead
presentation
was
21
Presented
as
follows.)

22
MS.
ROGERS:
Good
morning,
afternoon
or
evening.

23
I
think
it's
still
Thursday.
And
I'll
try
to
keep
it
24
short.
Thank
you
for
giving
me
an
opportunity
to
speak.

25
My
name
is
Kimberly
Rogers.
I'm
from
Santa
Clara,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
436
1
California.
And
I
had
prepared
this
lovely
slide
set
that
2
I
promised
I
won't
use.
And
you
can
read
the
8
by
10
3
color
glossies
later
tonight.
It's
good
bed
time
reading.

4
Basically,
I
wanted
to
echo
a
few
comments
from
5
before
that
other
people,
particularly
the
EV
drivers
have
6
said.
And
one
of
the
things
that
I
learned
today
is
that
7
Toyota
actually
had
a
streamlined
process
for
obtaining
8
the
Toyota
RAV4.

9
Thank
you.

10
(
Laughter.)

11
MS.
ROGERS:
For
me,
the
streamlined
process
12
meant
a
about
three
months
from
putting
a
deposit
down
to
13
getting
keys
to
the
vehicle.
And
so
thank
God
it
was
14
streamlined.
And
I
also
want
to
also
echo
some
of
the
15
comments
about
marketing,
because
I
have
to
apologize
I
16
missed
all
the
marketing.
And
I
live
in
silicon
valley,

17
the
home
of
disposal
income
and
techno
geeks.

18
And
I
heard
that
there
was
posters
around
the
19
valley.
I
found
two
posters
advertising
the
RAV4
in
bus
20
shelters,
you
know,
bus
stops
for
the
VTA.
So
clearly,

21
the
target
audience
for
the
RAV4
Are
people
who
have
50
22
cents
to
ride
the
bus.

23
I
actually
found
out
about
the
car
just
by
24
searching
the
Internet
and
watching
you
for
many,
many
25
years
begging,
pleading
and
hoping
that
the
car
would
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
437
1
become
available.

2
And
finally,
12
years
after
the
mandate,
the
car
3
became
available.
And
I
do
have
to
thank
Toyota
for
4
letting
me
buy
it.
Nobody
is
going
to
rip
this
out
of
my
5
hands.

6
And
I
did
see
one
newspaper
add
on
earth
day
in
7
San
Jose
Mercury.
And
again,
I
kind
of
question
the
8
marketing,
because
I,
like
many
of
my
fellow
EV
drivers,

9
go
out
to
many
events
and
evangelize
the
technology.
And
10
I've
personally
spoken
to
hundreds
of
people
last
spring
11
and
summer.
Not
one
had
ever
heard
of
an
electric
12
vehicle.
Not
one
new
that
you
could
actually
purchase
13
them.

14
So
I
urge
the
Board
to
do
everything
in
your
15
power
to
keep
zero
emission
vehicles
on
the
road
and
16
return
zero
remission
vehicles
on
the
road
and
reject
the
17
current
amendments.

18
Thank
you.

19
CHAIRPERSON
LLOYD:
Thank
you
for
keeping
it
20
short
and
providing
this.
Thank
you.

21
BOARD
MEMBER
HUGH
FRIEDMAN:
Excuse
me.
I'm
22
reading
through
this
as
you
spoke
and
it's
well
worth
all
23
of
our
reading.
So
we'll
read
this
in
full.

24
MS.
ROGERS:
Test
on
Monday.

25
(
Laughter.)

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
438
1
BOARD
MEMBER
HUGH
FRIEDMAN:
Or
you
can
ask
us
2
questions
tomorrow
morning.

3
CHAIRPERSON
LLOYD:
Patricia
Lakinsmith,
Edward
4
Thorpe
and
we
have
Steve
Heckeroth.

5
(
Thereupon
an
overhead
presentation
was
6
presented
as
follows.)

7
MS.
LAKINSMITH:
Everybody
hear
me
okay?

8
CHAIRPERSON
LLOYD:
Yes.

9
MS.
LAKINSMITH:
Mr.
Chairman,
members
of
the
10
Board
and
staff
thank
you
for
this
opportunity.
I
don't
11
envy
your
jobs
one
bit.
You
have
a
very
difficult
job
to
12
do.

13
I'm
here
as
a
private
citizen
who
has
no
14
financial
stake
or
otherwise
other
stake
in
this.

15
However,
thanks
to
CARB's
good
work,
I
am
a
participant
in
16
the
ZEV
incentive
program
and
am
happily
driving
a
Toyota
17
RAV
EV
every
day
of
the
week.
I'm
a
regular
person
of
18
sorts,
not
an
engineer
or
tinkerer,
like
many
of
the
EV
19
drivers,
whose
familiarity
with
the
stuff
under
my
hood
is
20
limited.

21
But
whose
appearance
at
work
each
day
is
22
completely
dependent
on
this
wonderful
technology.
In
my
23
opinion
BEV
technology
has
come
to
fruition
fully
for
24
everyone
who
has
tried
it.
However,
I'm
also
a
research
25
scientist
who
evaluates
new
technologies
in
realistic
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
439
1
simulations,
where
they
compete
with
currently
technology.

2
So
in
that
sense,
I
often
have
to
make
similar
3
decisions
that
you
have
to
make.
My
comments
will
focus
4
on
the
types
and
costs
of
making
errors
in
these
kind
of
5
decision
regarding
future
technology
development,

6
specifically
to
what
degree
we
can
be
comfortable
that
7
battery
electric
vehicle
technology
has
been
given
a
fair
8
and
accurate
test,
and
to
what
degree
we
can
be
9
comfortable
with
an
ambitious
investment
in
immature
10
future
technologies
touch
such
as
fuel
cells.

11
There's
two
questions
I'd
like
to
focus
on
today
12
in
my
short
time.
First,
what
kinds
of
errors
could
be
13
made
in
deciding
which
kinds
technologies
are
deployed
as
14
to
killed
off,
and
how
can
one
be
confident
than
an
15
abandoned
product
in
deed
was
not
worthy
of
further
16
development?
How
do
you
really
know
when
a
test
of
a
new
17
product
is
adequate?
What
happens
if
we're
wrong?

18
Second,
what
do
the
available
data
that
we
have
19
so
far
tell
us
about
the
chances
that
battery
electric
20
vehicle
technology
has
been
adequately
tested.

21
­­
o0o­­

22
MS.
LAKINSMITH:
As
a
research
psychologist,
I'm
23
often
faced
with
difficult
decisions
in
my
own
work
to
24
develop
advanced
technologies.
Always,
you
have
to
ask
25
yourself
whether
the
new
thing
you've
got
is
sufficiently
PETERS
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1
better
than
the
old
thing
to
cast
the
old
thing
aside
and
2
develop
the
new
thing.

3
Sorry
if
I'm
simplifying
this.
There
are
two
4
kinds
Of
errors
you
can
make
in
this
work,
you
can
keep
5
something
that
doesn't
work
or
you
can
throw
something
6
away
that
does
work.
Do
we
have
so
many
ZEV
technologies
7
at
our
fingertips
on
the
bring
of
mass
deployment
to
our
8
roads
that
we
can
afford
to
turn
our
backs
on
one
that
has
9
already
in
small
numbers
proven
to
be
so
very
highly
10
effective.

11
Given
the
comparatively
greater
risk
in
fuel
cell
12
technology
At
this
date,
are
we
actually
endangering
13
ourselves
to
make
both
of
these
kinds
of
errors
at
once.

14
First,
by
throwing
away
a
technology
that
has
not
been
15
tested
adequately,
and
next
by
putting
to
much
faith
in
a
16
new
immature
technology
that
has
not
shown
it's
true
17
potential.

18
At
the
present
time
we
don't
know
how
fuel
cells
19
will
be
refueled,
who
will
pay
for
the
infrastructure
to
20
do
it,
and
how
much
fuel
will
cost
compare
to
other
fuels,

21
how
much
the
cars
themselves
will
perform
compared
to
22
gasoline
cars
or
battery
electric
vehicle
cars,
and
what
23
they'll
cost
to
the
consumer
to
buy
or
lease.

24
The
cost
of
rejecting
BEVs
as
a
failed
technology
25
that
few
people
want
is
that
we
will
sacrifice
potential
PETERS
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1
air
quality
benefits
afforded
by
pure
ZEVs
in
the
near
2
term
timeframe
and
that
people
who
could
benefit
from
this
3
technology
will
have
to
settle
for
something
less.

4
This
slide
here
is
for
the
automakers.

5
CHAIRPERSON
LLOYD:
We
have
had
about
three
6
minutes,
if
you
can
­­

7
MS.
LAKINSMITH:
Oh,
okay.
Well,
that's
in
the
8
record,
so
I'll
go
on.

9
­­
o0o­­

10
MS.
LAKINSMITH:
We
know
there's
market
potential
11
for
this
technology.
This
is
the
time
line
for
my
ZEV
12
acquisition
process.
I
went
through
the
normal
hurdles.

13
I
inquired
at
a
dealer
about
the
Honda
EV
Plus.
I
was
14
entertained
for
a
half
an
hour
by
the
entire
sales
staff
15
who
insisted
that
I
had
imagined
this
car.
They
had
never
16
heard
of
it.

17
(
Laughter.)

18
MS.
LAKINSMITH:
Then
I
had
a
big
accomplishment.

19
I
managed
to
qualify
for
the
car
at
the
Toyota
dealer
when
20
I
finally
figured
I
wanted
the
RAV4
EV.
Here's
a
point
21
for
us
to
ponder.
Do
SUV
owners
have
to
answer
a
22
questionnaire
about
their
competency
using
four
wheel
23
drive,
their
bolder
hopping
experience,
their
yearly
24
off­
road
miles?
Do
Hummer
drivers
have
to
swear
that
they
25
live
in
close
proximity
to
gas
station
given
the
vehicles
PETERS
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1
inherently
poor
gas
mileage.

2
This
addresses
the
point
of
the
accessibility.

3
These
cars
are
not
accessible.
There
are
literally
4
barriers
between
the
consumers
who
could
drive
them
and
5
the
cars
themselves.

6
How
can
we
say
that
EVs
were
available
and
7
accessible
if
even
many
dealers
lack
awareness
of
these
8
cars.
Dealers
read
car
magazines
where
this
car
was
9
presumably
advertised
and
I
never
saw
any
adds
anywhere,

10
and
they
did
not
know
about
the
car
either.
And
often
11
times
if
they
did
figure
out
which
of
the
very
few
dealers
12
that
had
the
car,
they
would
go
there
and
be
convinced
13
that
what
they
really
probably
wanted
was
a
Prius.

14
So
the
data
that
Toyota
provided
before
is
not
15
surprising,
when
all
the
dealers
are
in
there
diverting
16
traffic
to
the
other
cars.
All
of
this
underscores
that
17
it's
very
difficult
to
get
this
kind
of
car.

18
CHAIRPERSON
LLOYD:
What
would
you
recommend?

19
­­
o0o­­

20
MS.
LAKINSMITH:
This
is
another
streamline
21
process
here.
We
did
not
see
the
ads.
I
would
venture
to
22
say
that
virtually
none
of
the
people
in
this
room
saw
any
23
of
this
advertising.

24
So
we
can
be
confident
that
we
have
a
good
25
product
here.
This
is
my
final
slide
and
my
PETERS
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1
recommendations.

2
­­
o0o­­

3
MS.
LAKINSMITH:
I
think
we
know
the
product
is
4
good,
but
it
appears
that
perhaps
the
methodology
used
to
5
get
it
into
the
market
was
possibly
a
little
flawed.
So
6
my
recommendations,
keep
some
level
of
ZEV
requirement
for
7
the
near
term
in
the
revised
mandate,
as
a
fall
back
until
8
fuel
cell
technology
comes
around.

9
I
really
hate
telling
people
that
they
can't
have
10
a
car
like
mine.
Everyone
I.
­­
you've
heard
it
before,

11
everyone
we
talk
to
wants
a
car
like
we
have
because
12
they're
wonderful
cars.

13
So
no
new
technology
needs
to
be
developed
to
14
solve
this
problem
this
way.
The
cars
are
there.
All
15
that
we
have
to
do
is
relook
how
they're
put
out
into
the
16
marketplace.
The
current
situation
with
gas
prices
17
provides
a
golden
opportunity
to
capitalize
on
public
18
interests
in
this
kind
of
thing.

19
So
offer
incentives,
flashy
ads,
spend
a
little
20
money
on
some
TV
time.
And
the
drivers
as
a
group
and
the
21
Electric
Auto
Association
are
extremely
interested
and
22
already
out
there
doing
public
education
for
the
23
automakers
and
we
would
love
to
do
more
because
we
believe
24
in
this
stuff.

25
Thank
you.

PETERS
SHORTHAND
REPORTING
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(
916)
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1
CHAIRPERSON
LLOYD:
Thank
you
very
much.

2
Edward
Thorpe,
Steve
Heckeroth,
Raymond
Cernota.

3
MR.
THORPE:
Hello
Chairman
and
members
of
the
4
Board,
and
staff.
My
name
is
Ed
Thorpe.
I've
been
here
5
at
these
hearings
before.
I'm
an
EV
owner,
EV
supporter,

6
also
of
a
member
of
the
Production
EV
Drivers
Coalition.

7
I
just
want
to
be
brief,
because
one
of
the
8
problems
with
the
proposal
also
is,
I
agree
with
a
lot
of
9
what's
been
shared
today,
about
things
that
still
need
to
10
be
changed
in
the
revised
path,
the
alternative
path.

11
Battery
electrics
still
need
to
be
considered.

12
They
are
extremely
viable
at
meeting
the
requirements
of
13
the
ZEV
mandate
and
they
are
obtainable
and
manufacturable
14
today.

15
Prices
have
come
down
on
supplies.
They
really
16
do
need
to
be
encouraged.
One
of
the
difficulties
with
17
the
mandate
is
you're
only
focused
on
the
seven
major
18
automakers,
both
for
requiring
product
and
credits,
as
19
well
as
the
ability
to
trade
credits.

20
There
is
no
visibility
on
the
small
vehicle
21
manufacturers
who
have
actually
been
producing
and
selling
22
more
battery
electrics
to
the
general
public
than
any
of
23
the
manufacturers.

24
Most
of
the
manufacturers
have
not
sold
any
25
battery
electrics,
except
maybe
the
neighborhood
vehicles.

PETERS
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1
The
neighborhood
vehicles,
though
they
have
their
niche,

2
they
do
not
contribute
to
significant
reduction
in
3
pollution,
because
most
pollution
is
caused
by
people's
4
daily
commutes.
And
those
commutes
require
greater
than
5
25
mile
per
hour
performance.

6
For
four
Years
I
commuted
in
a
Honda
EV
Plus.
IN
7
a
little
over
four
years
we
logged
almost
90,000
miles
in
8
the
San
Francisco
bay
area.
We
no
longer
have
that,

9
because
that
was
a
lease
program.
So
starting
in
January,

10
after
some
modifications,
I
am
now
commuting
in
Corbin
11
Sparrow,
which
has
absolutely
no
visibility
to
CARB
group
12
because
it
is
manufactured
by
none
of
the
Big
7,
and
it
13
also
qualifies
as
­­
it's
registered
as
motorcycle,
which
14
has
no
niche
in
your
category,
but
it
does
freeway
speed.

15
I
commute
at
70/
75
miles
an
hour
in
the
diamond
16
lane.
It
has
a
limited
range,
because
of
current
battery
17
technology
of
only
25
miles.
But
I'm
still
able
to
make
18
my
commute
of
35
miles
by
stopping
off
and
getting
a
fast
19
charge.
It
takes
a
fast
charge.
I
can
recharge
the
20
complete
pack
in
20
minutes
off
of
Level
2
public
21
charging.

22
So
all
of
these
things
are
possible
with
today's
23
technology,
but
you
need
to
also
involve
these
third
party
24
or
these
small
manufacturers.
They're
able
to
get
credits
25
because
they're
producing
the
product.

PETERS
SHORTHAND
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1
Why
can't
they
get
credits
and
then
use
that
as
2
bargaining
chips
with
the
age
major
manufacturers
who
hold
3
the
key
to
these
supplies,
supplies
for
parts.
The
major
4
manufacturers
don't
want
these
little
players
to
survive.

5
And
the
way
they
do
it
is
buy
restricting
the
access
of
6
parts
at
affordable
prices.

7
The
little
players,
if
they
can
accrue
credits,

8
they
can
swap
the
credits
or
trade
the
credits
to
the
9
manufacturers
in
exchange
for
parts,
and
be
able
to
get
10
zero
emission
vehicles
to
the
public
today.

11
CHAIRPERSON
LLOYD:
Thank
you.

12
(
Thereupon
an
overhead
presentation
was
13
Presented
as
follows.)

14
CHAIRPERSON
LLOYD:
Steve
Heckeroth,
Raymond
15
Cernota,
and
Glynda
Lee
Hoffman.

16
MR.
HECKEROTH:
As
an
EV
driver
for
the
last
10
17
years,
I
echo
all
the
EV
comments
that
you've
heard
and
I
18
won't
repeat
them.

19
­­
o0o­­

20
MR.
HECKEROTH:
I
have
few
differrent
messages
21
for
you.
One,
fossil
fuel
use
is
a
double
edged
sword.

22
It
has
to
do
with
both
pollution
and
depletion.
And
I
23
think
we
are
ignoring
the
fact
in
all
this
that
we
are
24
running
out
of
oil.
It's
not
an
unlimited
resource.

25
And
to
use
reformed
fossil
fuel
to
create
PETERS
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1
hydrogen
for
vehicles
is
not
really
getting
us
where
we
2
need
to
go.
So
I
strongly
disagree
with
the
staff's
new
3
proposal
favoring
hydrogen
vehicles.
Besides
that,

4
battery
electric
is
3
­­
or
2
to
5
mile
times
more
5
efficient
than
hydrogen
vehicles.

6
­­
o0o­­

7
MR.
HECKEROTH:
I
purchased
this
book
when
I
8
first
saw
it.
And
this
gets
to
my
other
point.
And
I
9
bought
copies
for
each
of
you
and
I
hope
they
were
10
distributed
about
a
month
ago.
This
book
goes
overall
the
11
ways
the
auto
industry
was
able
to
use
the
regulations
12
that
were
created
to
find
the
loopholes
to
promote
13
passenger
trucks,
High
And
Mighty
is
the
book
I'm
talking
14
about.
There
are
several
other
that
I'd
recommend
15
reading.

16
SUVs
are
really
an
unnecessary
an
obscene
option
17
for
transportation.

18
­­
o0o­­

19
MR.
HECKEROTH:
They've
been
created
by
the
20
loopholes,
one
of
which
was
developed
by
this
Board
21
Unfortunately.
It
was
a
3,575
pound
weight
limit
that
was
22
put
into
being
as
the
top
weight
that
would
be
counted
on
23
the
zero
emission
mandate.
This
is
a
result,
you
see
here
24
in
front
of
you.
This
is
a
typical
parking
lot
25
unfortunately
now.

PETERS
SHORTHAND
REPORTING
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916)
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1
­­
o0o­­

2
MR.
HECKEROTH:
And
there
was
a
saying
going
3
around
on
the
web
what
would
Jesus
drive.
And
I
found
4
that
was
easy
to
answer.
Of
course,
he'd
walk.
But
I
5
wondered
what
Satan
might
drive,
and
I
found
it
and
took
a
6
picture
of
it
here.

7
­­
o0o­­

8
MR.
HECKEROTH:
This
was
another
interesting
one
9
I
found.
This
was
by,
I
guess,
somebody
who
was
promoting
10
some
diet
plan.
But
I
thought
it
way
appropriate
that
11
they
drove
this,
and
they
were
going
to
tell
people
how
to
12
lose
weight.

13
­­
o0o­­

14
MR.
HECKEROTH:
I've
been
a
driver
and
a
15
manufacturer
of
EVs
for
10
years
because
of
this
board.

16
They
were
very
inspirational
in
1990
when
they
created
17
mandate.
I've
continued
to
try
and
promote
EVs,
even
18
after
my
company
went
bankrupt.
And
I've
now
purchased
a
19
RAV4.
And
I'll
attest
to
the
testimony
you've
heard
about
20
how
difficult
it
is
to
actually
go
through
process.

21
There
was
a
couple
other
steps
to
get
the
charger
22
in,
as
well
as
what
they
already
mentioned.

23
­­
o0o­­

24
MR.
HECKEROTH:
My
Prius,
because
I
come
from
an
25
EV
side,
I
get
over
55
miles
per
gallon
usually,
up
to
60
PETERS
SHORTHAND
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916)
362­
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449
1
and
even
65
miles
per
gallon
in
my
Prius.
And
it
has
to
2
do
with
your
driving
habits
a
lot,
and
how
good
a
mileage
3
you
can
get.

4
I
charge
my
EV
of
a
solar
array.
I
have
7
5
kilowatts
of
photovoltaics
that
power
my
whole
place.
And
6
I
actually
need
the
EVs
to
use
the
excess
power
I
produce.

7
­­
o0o­­

8
MR.
HECKEROTH:
This
is
one
of
first
cars
I
9
built.
This
is
at
the
planning
commission
hearings
where
10
it
was
plugged
in
to
give
me
a
140
mile
round
trip
range.

11
­­
o0o­­

12
MR.
HECKEROTH:
This
was
another
car
I
built,
120
13
mile
range
in
1994
with
lead
acid
batteries.
Zero
to
14
sixty
in
eight
seconds
with
lead
acid
batteries.
Imagine
15
what
we
could
do
with
nickel
metal
hydride
or
some
of
the
16
other
batteries
that
are
coming
on.

17
­­
o0o­­

18
MR.
HECKEROTH:
This
is
a
solar
charging
station
19
for
neighborhood
vehicles.

20
­­
o0o­­

21
MR.
HECKEROTH:
This
was
a
car
that
was
really
22
just
incredible
to
me.
It
went
120
miles
in
one
hour
in
23
1993.
This
is
pure
battery
electric.
That
means
it's
24
averaging
120
miles
an
hour
for
one
hour.
And
that
was,

25
what,
10
years
ago
now.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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450
1
­­
o0o­­

2
MR.
HECKEROTH:
So
there's
no
lack
of
technology
3
and
that
got
me
thinking
about
other
options.

4
­­
o0o­­

5
MR.
HECKEROTH:
And
lately,
I've
heard
about
this
6
vehicle,
which
I
hope
the
Board
will
close
the
loopholes
7
in
their
mandate
that
allows
the
auto
companies
to
produce
8
these
obscene
SUVs
and
allow
cars
like
this
that
make
9
sense
that
are
sane
transportation
alternatives
to
exist
10
on
our
roads.
Right
now
it's
very
dangerous
for
these
11
vehicles.

12
Thank
you
very
much
four
your
attention.

13
CHAIRPERSON
LLOYD:
Thank
you.
Raymond
Cernota,

14
Glynda
Lee
Hoffman
and
Thomas
Bradley.

15
Raymond
Cernota?

16
Glynda
Lee
Hoffman?

17
Thomas
Bradley?

18
Are
you
Thomas
Bradley?

19
MR.
BRADLEY:
Yes.

20
(
Thereupon
an
overhead
presentation
was
21
Presented
as
follows.)

22
MR.
BRADLEY:
Thank
you,
Chairman
Lloyd
and
23
Members
of
the
Board.
My
name
is
Tom
Bradley
and
I'm
here
24
to
represent
the
Electric
Power
Research
Institute.

25
Unfortunately,
Mark
Duval
couldn't
be
here,
so
I'm
going
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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451
1
to
take
his
place.

2
So
I'm
just
going
to
keep
it
real
quick,
because
3
a
lot
of
this
stuff
has
been
talked
about
before.

4
In
general,
the
general
idea
is
that
there's
a
5
technological
road
map
between
EVs,
hybrids
plug­
in
6
hybrids,
towards
fuel
cell
and
full
function
battery
EVs
7
in
the
future.

8
And
we
believe
that
plug­
in
hybrid
electric
9
vehicles
can
provide
the
basis
for
those
technological
10
advancements.

11
­­
o0o­­

12
MR.
BRADLEY:
So
all
electric
drive
technologies
13
share
a
technological
platform
that
is
made
up
of
the
full
14
power
electric
drive
train
and
electric
battery
systems,

15
energy
battery
systems.
Hybrid
electric
technologies
that
16
are
emphasized
right
now
and
that
the
AT
PZEVs
emphasize
17
power
battery
hybrid
electric
vehicles
in
the
order
of
4
18
to
65
kilowatts
of
battery
power
or
of
motor
controlled
19
power.

20
Plug­
in
hybrid
electric
vehicles
and
fuel
cell
21
vehicles,
on
the
other
hand,
demand
energy
battery
systems
22
for
cold
start
conditions
and
also
in
order
to
get
plug­
in
23
hybrid
electric
vehicle
benefits
out
of
plug­
in
fuel
cell
24
vehicles.

25
­­
o0o­­

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
452
1
MR.
BRADLEY:
So
just
touch
on
some
of
this
2
stuff.
Lower
cost,
flexible
performance,
improved
3
reliability,
et
cetera.

4
So
just
kind
of
keep
it
quick.
Obviously
plug­
in
5
hybrid
vehicles
offer
a
great
advantage
for
reduction
of
6
criterion
emissions
and
an
increase
ZEV
miles
as
well
as
7
this
slide
shows.

8
­­
o0o­­

9
MR.
BRADLEY:
On
a
Full
fuel
cycle
analysis
of
10
California
mix
a
reduction
in
greenhouse
gas
emissions.

11
So
what
you
see
here
is
this
is
a
conventional
vehicle,

12
plug­
in
hybrid
electric
vehicles.
And
as
you
­­

13
obviously,
this
is
a
fuel
cell
hydrogen
powered
natural
14
gas
vehicle
and
electric
battery
electric
vehicles.

15
So
with
each
technological,
sort
of,
advancement
16
you
get
lower
greenhouse
gas
emissions
full
fuel
cycle.

17
­­
o0o­­

18
MR.
BRADLEY:
Conclusions,
are
plug­
in
hybrid
19
electric
vehicles
provide
the
most
valuable
ZEV
product
20
today
and
for
the
foreseeable
future.

21
Next
best
to
a
battery
EV
in
terms
of
energy
22
security
and
greenhouse
gas
reductions
and
criteria
23
pollutant
reductions.

24
And
one
of
the
most
important
­­
an
important
25
point
is
that
it
maintains
Bill
Warf
with
SMUD
was
talking
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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453
1
about
earlier
about
the
infrastructure
costs
that
they
had
2
put
into
battery
EV
infrastructure.
And
this
plug­
in
3
hybrid
electric
vehicle
maintain
and
award
the
expansion
4
and
maintenance
of
that
infrastructure,
et
cetera,
et
5
cetera.

6
And
obviously
one
of
the
most
important
points
is
7
that
battery
electric
vehicle
technology
is
a
bridge,

8
obviously,
between
the
EV
and
hydrogen
fuel
cell
9
technology.
So
that's
kind
of
the
idea.

10
Thank
you
very
much.

11
CHAIRPERSON
LLOYD:
Thank
you.
At
least
EPRI
has
12
got
a
consistent
message.

13
MR.
BRADLEY:
That's
exactly
right.
Obviously
14
the
conclusion
is
improvements
and/
or
whatever
incentives
15
for
battery
dominant
and
plug­
in
hybrid
electric
vehicles,

16
I
think,
would
encourage
automakers
to
go
along
that
17
route.
And
right
now
EPRI
is
working
with
a
couple
of
18
automakers
on
demonstration
fleets
for
both
fleet
and
mass
19
transportation
and
consumer
oriented
vehicles.

20
Thank
you
very
much.

21
CHAIRPERSON
LLOYD:
Thank
you
very
much.
Steven
22
Casner,
Dr.
Kerr,
David
Muerle.

23
MR.
CASNER:
Hi.
I'm
Steve
Casner.
I
drive
an
24
EV
1.
I
live
Sunnyvale.
I
only
have
the
EV1
for
another
25
month
and
a
half,
and
then
I'll
be
without
an
electric
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
454
1
vehicle
and
I'll
have
too
much
solar
power
in
my
roof
to
2
use.

3
The
Toyota
marketing
might
have
been
an
4
interesting
program,
but
it
just
didn't
last
long
enough
5
to
reach
the
set
of
people
who
would
really
like
to
take
6
advantage
of
these
vehicles.

7
The
message
that
began
this
testimony,
Mr.

8
Freeman,
was
really
important
not
to
give
up
on
the
9
program
as
we're
just
about
to
get
into
it.
He
did
say
10
that
­­
he
did
make
a
somewhat
unfair
comparison
for
11
emissions
from
battery
vehicles,
because
he
compared
12
battery
powered
by
coal
to
hydrogen
generated
from
13
renewable
sources.

14
The
benefit
that
I
see
from
my
electric
vehicle
15
is
I
really
can
use
solar
power
to
produce
the
fuel
for
my
16
vehicle,
so
that
I
don't
have
any
dependence
and
I
don't
17
produce
any
emissions.

18
Thank
you.

19
CHAIRPERSON
LLOYD:
Thank
you.
Dr.
Kerr,
David
20
Muerle
and
Hew
Hesterman.

21
DR.
KERR:
I'm
Dr.
Douglas
Kerr.
Thank
you
for
22
the
opportunity
to
talk
with
you
today.
You'll
be
pleased
23
to
know
that
so
many
things
have
been
said
that
pages
upon
24
pages
of
what
I
was
going
to
cover
are
eliminated.

25
CHAIRPERSON
LLOYD:
Thank
you
for
listening.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
455
1
DR.
KERR:
Isn't
that
wonderful.
I
have
three
or
2
four
points
I
would
like
to
make,
however.

3
The
first
is
to
encourage
you
to
ask,
to
require
4
that
big
car
makers
earn
fresh
credits
during
the
second
5
half
of
this
year
and
during
2004
by
leasing,
as
used
6
cars,
those
battery
electric
vehicles
that
have
been
7
repossessed
by
big
car
makers
after
canceling
their
leases
8
and
so
on.

9
As
a
related
matter,
I'm
asking
that
previous
10
gold
credits
be
rescinded
if
a
big
car
maker
cancels
a
11
lease
and
takes
the
car
back
from
a
willing
lessee
or
12
would­
be
buyer.

13
I
have
in
mind
here
addressing
the
near
term.

14
People
are
going
to
burdened
­­
going
to
burdened
by
and
15
some
will
be
killed
by
pulmonary
disease
tomorrow
and
next
16
week.
I
haven't
heard
today
a
lot
about
what's
possible
17
in
the
near
term.
Conceivably,
because
people
worry
about
18
asking
big
car
makers
to
respond
when
they
haven't
had
19
time
to
gear
up.

20
I
think
the
use
of
these
cars
that
they're
taking
21
back
and
requiring
fresh
credits
is
probably
a
good
way
to
22
do
something
constructive
in
the
very
immediate
term.

23
Secondly,
I
would
like
to
encourage
the
24
development
of
plug­
in
hybrids.
And
I
found
it
25
interesting
and
exciting
today
that
there
seems
to
be
a,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
456
1
sort
of,
emerging
consensus,
didn't
you
think,
among
a
2
variety
of
speakers
about
plug­
in
hybrids
and
the
role
3
that
they
ought
to
play.

4
The
consensus
and
excitement
there
is
exceeded
5
only
by
the
dull
thud
I
heard
from
major
car
6
manufacturers.
And
so
if
there's
something
to
be
added
7
here,
it
is
I
think
that
I
would
encourage
you
to
send
a
8
very
strong
signal
to
them
that
you
have
significant
9
rewards
in
disincentives
shaping
their
focus
on
that
10
technology.
And
what
would
be,
in
deed,
a
technology
11
where
the
gas
engine
just
rarely
comes
on.
This
car
is
12
really
capable
of
doing
most
things
it
needs
to
do
by
13
acting
like
an
electric
vehicle.

14
And
thirdly,
I
thought
the
Modisette
proposal
15
sounded
excellent.
I
liked,
even
better,
the
numbers
from
16
the
Union
of
Concerned
Scientists.
But
I
thought
that
was
17
an
excellent
framework
for
addressing
a
variety
of
things
18
I
think
are
faulty
in
the
changes
that
were
proposed.

19
Lastly,
two
related
points.
I'd
like
to
review
20
briefly
­­
it
took
me
six
months
to
get
delivery
of
my
21
RAV4
EV.
I'd
like
to
review
briefly
before
going
to
my
22
final
point
four
or
five
things
that
the
major
car
makers,

23
the
big
car
makers
did
to
sabotage
the
market
for
BEVs.

24
They
had
at
least
a
couple
good
reasons
to
want
25
BEVs
to
fail.
But
be
that
as
it
may,
they
cutoff
the
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
457
1
orderly
growth
of
this
market
As
fast
as
they
could
after
2
they
met
your
requirements.
They
stopped
making
the
cars.

3
Then
they
told
you
the
market
was
too
small.

4
And
do
you
believe
that?

5
With
regard
to
the
advertising
for
each
­­
for
6
each
of
these
three
major
BEVs
that
came
out
the
7
advertising
lacked
explanations
of
this
new
product's
8
features
and
benefits.
As
for
the
RAV4
for
example,
are
9
heavy
on
large
doses
of
blue
sky,
the
car
is
in
the
bottom
10
somewhere.
You
may
remember
the
adds
for
the
EV1,
large
11
desert
like
landscape.
EV1
is
racing
across.
The
EV1
is
12
not
even
in
focus.

13
And
the
text
is
just
too
foo
foo.
This
is
a
very
14
new,
fundamentally
new
product
that
would
have
required
15
being
sold
on
the
merits
of
its
features
and
benefits.
I
16
think
it
was
an
disingenuous
ad
campaign
entirely
apart
17
from
how
many
ads
there
were
for
each
of
these.

18
Taking
delivery
in
each
of
these
cases
was
19
laborious.
It
was
made
laborious.
Each
car
is
12
to
18
20
month
availability
was
too
short
to
develop
a
market,

21
particularly
for
a
fundamentally
new
product
such
as
this.

22
Each
manufacturer's
terms
often,
with
the
23
exception
of
Toyota,
violated
the
customer's
general
24
preference
to
buy
instead
of
lease.

25
And
lastly,
the
manufacturer's
executives
made
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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458
1
repeated
public
statements
that
problems
in
the
product
2
said
to
be
range
and
charging
time,
would
make
the
product
3
unsatisfactory.
When
was
the
last
time
that
a
big
car
4
maker
vice­
president
got
up
and
said
this
is
our
new
SUV.

5
You're
not
going
to
like
it.
It
rolls
over
a
lot,
burns
a
6
ton
of
gas.
No
one
is
going
to
buy
this.

7
So
I
think
they
have
at
least
a
couple
good
8
reasons
not
to
want
these
cars
to
succeed.
I
am
thinking
9
vastly
forward
beyond
the
pressurized
decision
you
now
10
face
on
honestly
believes
that
it
would
be
worth
your
11
working
with
the
Public
utilities
Commission
and
the
12
Legislature
to
find
and
to
promote,
to
explore
the
sale
of
13
battery
electric
vehicles
by
electric
generating
companies
14
and
electricity
transmission
companies.
The
deregulated
15
parts
of
the
electricity
who
unlike
big
car
makers
may
16
find
it
consistent
with
the
self
interest
to
sell
and
17
finance
the
manufacture
of
battery
electric
vehicles.

18
You
have
a
fierce
and
sophisticated
foe
in
these
19
companies.
I'm
wondering
if
we
couldn't
do
business
with
20
someone
else.

21
Thank
you.

22
CHAIRPERSON
LLOYD:
Thank
you.
David
Muerle,
Hew
23
Hesterman,
Dr.
Carter.

24
David
Muerle?

25
Hew
Hesterman?

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
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459
1
Dr.
Carter?

2
And
then
Mark
Geller,
Paulette
Jaeger.

3
DR.
CARTER:
Thank
you,
Dr.
Lloyd
for
this
later
4
opportunity
to
address
the
Board
and
staff
and
remaining
5
members
of
the
audience.
I
spent
a
lot
of
time
thinking
6
about
how
I
could
make
an
impression
on
and
what
I
could
7
say
that
you
would
actually
listen
to
and
take
in
that
8
might
have
an
effect
on
the
future
of
this
mandate.

9
So
I
was
given
two
pieces
of
advice,
tell
them
10
how
hard
it
was
to
obtain
your
EV
and
try
to
offer
11
something
which
is
unique
of
your
own
experience.

12
I'm
trying
to
do
that.

13
We
first
drove
an
EV,
actually
two
production
EVs
14
in
'
97
when
we
relocated
to
San
Diego,
Supervisor
Roberts
15
constituency,
from
England.
And
I
thought
we
were
in
on
16
the
beginning
of
a
clean
transportation
revolution,
and
I
17
was
proud
to
move
to
California
with
that
in
prospect.

18
Unfortunately,
we've
been
trying
to
buy
an
EV
19
ever
since.
First
we
were
told
out
credit
wasn't
good
20
enough.
I'd
just
moved
into
the
country,
so
I
didn't
have
21
good
credit.
My
wife
had
I
lived
here
over
20,
had
22
excellent
credit,
but
she
didn't
count.
I
had
the
paying
23
job,
so
we
didn't
qualify.

24
Then
we
were
in
relocation
housing,
because
I've
25
been
moved
as
part
of
the
relocation
package.
We
didn't
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
460
1
own
our
own
house.
Again,
we
didn't
qualify
for
an
EV.

2
We
waited
ill
my
credit
way
established.
We
bought
our
3
own
house.
We
got
on
a
awaiting
list,
which
seemed
kind
4
of
strange,
because
when
I
went
to
one
of
the
CARB
5
hearings
in
LA.
We
heard
the
manufacturer
of
that
vehicle
6
say
there
was
no
demand.
Strange.

7
Then
we
actually
got
into
discussions
about
being
8
on
the
lease
assumption
program.
And
I
thought
maybe
this
9
really
will
happen.
Unfortunately,
there
was
a
recall
10
shortly
before
another
CARB
hearing
and
we
never
heard
11
from
the
salesperson
ever
again.

12
The
next
thing
I
hear
that
the
Think
City
is
13
available.
So
I
call
the
Ford
rep.
And
I
say
we're
in
14
San
Diego.
We're
near
to
the
dealer.
How
can
I
get
one?

15
You
can
have
it
if
you're
within
35
miles
Of
the
dealer.

16
Okay,
that's
good
but
what
happens
when
we
relocate
to
17
Santa
Rosa
in
a
months
time
and
we're
60
miles
from
the
18
nearest
deal
in
San
Francisco?

19
Sorry,
you
can
have
it
for
a
month
but
then
we'll
20
take
it
back.
Okay,
so
we
relocate,
forget
having
a
car
21
for
a
month.
What's
the
point.

22
We
relocate
to
Santa
Rosa
and
I
happen
to
meet
23
Marc
Geller
outside
S&
C
Ford
in
San
Francisco
and
he
says
24
forget
the
60
mile
limit.
Okay,
they
won't
lease
it
to
25
you.
Go
around
the
corner
to
Hertz
and
they'll
rent
you
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
461
1
one.

2
Bingo.
I
go
around
to
Hertz
and
I
rent
the
same
3
car
60
miles
from
the
same
dealer
who
won't
lease
it
to
me
4
and
we've
had
one
since
December
2001.
We've
driven
this
5
two
seat
50­
mile
range
56
miles
an
hour
City
Car
over
6
10,000
miles.
And
I've
dealt
with
all
the
hassle
of
7
having
to
go
into
maintenance
dealing
with
Hertz,
swapping
8
out
cars.
You
name
it
I've
dealt
with
it,
but
we've
had
9
an
EV,
because
that
was
the
only
way
we
could
get
one.

10
And
we
still
haven't
been
able
to
buy
an
EV.

11
I
drove
it
up
here,
but
they
can
take
it
away
any
12
time
they
choose.
So
that's
the
part
of
my
brief
speech
13
about
how
difficult
it
was
to
get
an
EV.
That's
just
my
14
Joe
Public
impression.

15
The
unique
part
that
I
wanted
to
add.
I
came
up
16
with
a
few
things
that
I
figure
are
unique
about
me.
I've
17
never
owned
a
car
in
my
life
period.
I
still
haven't
even
18
with
the
EV
because
we
can't
buy
it.

19
I'm
not
American
as
you
can
tell.
I
have
a
funny
20
accident,
slightly
different
to
yours.
Okay,
I'm
not
an
21
American.
I
run
my
own
company,
so
I
know
something
about
22
and
being
an
entrepreneur.
And
also
I
have
a
Ph.
D,
so
I
23
figure
I
have
some
level
of
education,
which
qualifies
me
24
to
speak
here
today.

25
I
left
the
UK,
as
I
said
all
primed
to
be
part
of
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
462
1
this
clean
air
revolution.
And
it's
unraveled,
frankly.

2
I
left
the
UK
thinking
I
was
leaving
behind
a
class
3
system.
I
move
here
and
I
find
you
have
your
own
version.

4
All
the
power
is
in
the
hands
of
the
lawyers,
the
oil
men
5
and
the
auto
lobby.
That's
what
I've
learned
in
being
6
here
for
six
years.

7
I've
always
been
bugged
by
one
of
the
8
testimonials
at
a
previous
CARB
hearing
where
somebody
9
stood
up
and
said,
we're
all
defined
by
the
cars
that
we
10
drive.
And
I
wanted
to
stick
my
hand
up
and
say
so
I'm
11
undefined,
you
know.
I
don't
drive
a
car,
so
don't
exist.

12
I
don't
­­
you
know,
I
think
therefore
I
am.
Something
13
like
that.

14
So
where
does
that
lead
­­
well
­­

15
CHAIRPERSON
LLOYD:
I
hope
you're
wrapping
up.

16
DR.
CARTER:
I'll
just
wrap
up
with
this
last
17
point.
I
was
recently
told
while
I
was
on
vacation
by
18
well
educated,
well
traveled
­­
I
won't
say
his
19
nationality,
but
a
foreign
engineer
who
works
in
the
20
automotive
business.
He
said
look,
frankly,
I
consider
21
this
as
an
underdeveloped
country,
those
were
his
words
22
and
I
thought
it
was
interesting
that
you
opened
up
by
23
saying
there's
a
small
delta
between
current
cars
and
24
battery
zero
emission
vehicles.

25
And
I
think
the
problem
with
that
small
delta
is
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
463
1
it
involves
facts
like
war.
And
the
only
way
that
goes
2
away
is
if
you
take
oil
out
of
the
equation.
And
that's
3
what
we're
trying
to
do,
all
these
guys
with
solar
panels
4
generating
their
own
power
and
being
true
zero
emissions.

5
So,
you
know,
in
my
field
of
renewable
energy,
I
6
look
at
Japanese
taking
over
photovoltaics
Danish
and
7
Germans
take
over
wind
turbines,
Germans
taking
over
grid
8
inverters
and
blowing
away
the
established
American
9
product.

10
There's
any
number
of
examples
where
California
11
has
led
the
way
and
then
you've
dropped
the
ball.
And
I
12
pray
that
you're
not
going
to
do
the
same
with
this,

13
because
we
know
these
things
work.
I've
logged
10,000
14
miles,
every
single
charge
and
my
mile.
I
know,
you
know,

15
that's
a
fact.
It's
worked
for
me.

16
So
there
are
great
people
in
this
room
that
I
17
want
to
acknowlege,
EV
drivers
that's
it's
been
a
18
privilege
for
me
to
get
to
know.
And
I
think
they're
an
19
extraordinary
bunch
of
people.
And
why
you
don't
listen
20
to
them
and
you
less
to
people
who
can
lose
$
5
billion
in
21
one,
you
might
as
well
just
write
a
check
for
$
18
to
every
22
man,
woman
and
child
in
this
country,
and
they
would
have
23
the
same
effect
on
their
bottom
line.

24
You
know,
listen
to
these
­­
I'm
every
­­
I
hated
25
cars
before
I
got
involved
with
this
cause.
Now,
I'm
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
464
1
president
of
the
North
Bay
Chapter
of
the
Electric
Auto
2
Association.
You
know,
what's
the
reason
for
that.

3
And
I'll
shut
up.

4
Thank
you
for
listening.

5
CHAIRPERSON
LLOYD:
Thank
you.

6
CHAIRPERSON
LLOYD:
Marc
Geller,
Paulette
Jaeger,

7
Michael
Mora.

8
MR.
GELLER:
Hi.
I'm
Marc
Geller.
I'm
not
an
9
early
adopter
of
BEVs,
disappointed
by
CARB's
back
10
pedaling
on
BEVs.
I
got
interested
in
2000,
despite
the
11
industry
and
CARB
staff's
fueled
impressions
that
there
is
12
no
demand
for
battery
electric
vehicles,
repeated
ad
13
nauseam
in
news
reports.
Every
battery
electric
car
14
offers
was
successfully
leased
or
sold.
Although,
they've
15
remained
largely
invisible
to
the
general
car
buying
16
public.

17
Most
automakers
met
their
early
ZEV
obligations
18
through
fleet
leases,
denying
consumers
even
the
chance
to
19
test
drive
an
electric
car.
Paid
industry
spokesman
20
filled
newscopy
with
quotes
about
how
few
electric
cars
21
they
sold.

22
Well,
dah,
with
the
exception
of
Toyota
which
23
quickly
sold
out
of
a
few
hundred
RAV4
EVs
that
offered
24
only
last
year
to
the
public,
no
electric
cars
were
sold
25
in
California
by
the
automakers
to
meet
the
mandate.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
465
1
I'm
sick
and
tired
of
hearing
how
few
cars
they
2
sold.
They
never
really
offered
cars
for
sale.
The
3
battery
electric
cars
produced
however
we
all
know
have
4
performed
well.
The
actual
all
drivers
are
enthusiastic
5
and
waiting
lists
exist.
I
know,
because
I'm
on
them.

6
In
2000
I
test
drove
an
EV
1,
but
the
saleswoman
7
made
it
clear
GM
had
no
intention
of
making
any
more
8
available.
Honda
didn't
even
have
an
EV
Plus
available
9
for
a
test.
I
emailed,
telephoned
and
implored
and
I'm
10
still
on
their
waiting
lists.
In
May
of
2001,
word
11
reached
me
via
the
net
that
the
Think
City,
a
little
elect
12
car
made
in
Norway,
would
be
available
in
a
limited
number
13
of
Ford
dealerships.
And
Ford
made
a
big
play
about
how
14
its
new
green
leadership
had
bought
Think
Nordic
and
15
announced
it
would
cooperate
with
California
meet
the
16
mandate
and
become
the
first
automaker
to
actually
sell
an
17
electric
car.

18
As
soon
as
the
demo
arrived,
I
test
drove
it,
and
19
ordered
one.
And
it
seemed
less
car
thank
I
wanted,
but
20
I'd
come
to
realize
it
was
not
easy
to
obtain
an
electric
21
car.
So
I
pay
$
199
a
month
plus
tax,
plus
insurance,

22
based
on
the
none­
the­
less
unpurchaseable
sticker
price
of
23
$
26,000.
I
pay
more
for
my
little
car
than
people
who
by
24
a
gas
car,
because
of
the
insurance.

25
The
dealer
was
not
as
convinced
as
I
was
that
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
466
1
there
was
a
market
for
this
car.
And
he
placed
an
order
2
for
six
of
them.
What
he
thought
would
be
two
weeks
3
became
five
months
of
waiting.
During
which
time
I
rented
4
one
from
Hertz.

5
As
with
other
cars,
there
was
virtually
no
6
advertising.
People
ring
my
door
bell
after
seeing
my
car
7
charging
in
my
driveway
because
they've
never
seen
a
BEV.

8
Most
people
in
California
still
have
not
idea
electric
9
cars
exist
and
work.
In
fact
by
the
time
the
six
Thinks
10
arrived
at
the
dealer
they
were
long
since
leased.
And
11
there
were
waiting
lists.
And
there's
a
waiting
list
for
12
the
new
car,
that
Ford
has
decided
not
to
bring
in.

13
So
instead
of
bringing
in
these
cars,
even
while
14
producing
the
electric
cars,
championed
here
by
their
15
drivers,
if
not
their
makers,
the
automakers
have
fought
16
the
mandate
with
lobbyists
and
lawsuits,
seeking
17
postponements
and
revisions
to
subvert
the
intent
of
the
18
mandate.

19
Auto
industry
representatives
have
resorted
to
20
the
big
lie
often
repeated.
Their
mantra
has
been
21
incessant,
no
demand
and
the
cars
don't
work.
Last
week
a
22
National
Public
Radio
report
included
a
paid
industry
23
spokesperson
saying
the
car
companies
had
to
resort
to
24
giving
away
EVs
to
meet
the
mandate.
As
if,
in
fact,
as
25
we
know
as
Mr.
McKinnon
mentioned,
in
a
classic
bate
and
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
467
1
switch
maneuver,
the
industry
lobbied
aggressively
and
2
successfully
for
modifications
to
the
mandate
to
include
3
unsafe,
low­
speed
electric
vehicles
that
resembled
golf
4
carts.

5
And
then
in
order
to
accumulate
ZEV
credits,
so
6
as
not
to
have
to
produce
the
electric
cars
with
waiting
7
lists,
they
gave
these
cars
away.
The
Hutzpah
of
this
8
industry
never
ceases.
In
pursuit
of
the
profit
seemingly
9
guaranteed
by
gas
guzzling
unsafe
oversized
SUVs,

10
insisting
against
all
evidence
that
smaller
cars
are
less
11
safe,
they
actually
put
people
in
these
certifiably
unsafe
12
gussied
up
golf
carts
with
no
doors
and
dump
them
on
the
13
same
SUV
dominated
city
streets.

14
CARB's
mission
is
to
clean
the
air.
A
few
dozen
15
fuel
cell
vehicles
by
2008
of
range
no
greater
than
16
today's
battery
electrics
offers
little
when
compared
to
17
the
thousands
of
battery
electric
vehicles
that
could
be
18
on
the
road
if
the
mandate
is
enforced
and
strengthened.

19
The
confiscated
EV1s
and
EV
Pluses
should
be
put
back
into
20
service
and
leases
extended
or
cars
sold.

21
The
Board
should
reassert
the
zero
emissions
22
mandate,
set
ar
reasonable
percentage,
fine
those
23
automakers
that
don't
meet
it
and
use
that
money
to
ensure
24
the
availability
of
battery
electrics
and
cleaner
air
in
25
the
years
ahead.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
468
1
Thank
you.

2
CHAIRPERSON
LLOYD:
Paulette
Jaeger,
Michael
3
Mora,
Shauna
Wilson.

4
Bill
Smith?

5
Steven
Dibner?

6
MR.
DIBNER:
Hello.
And
thank
you
very
much
for
7
the
opportunity
to
speak
to
you.
I've
actually
been
to
8
these
hearings
before.
I
am
a
musician
with
the
San
9
Francisco
Symphony.
And
the
last
time
I
appeared
here,
I
10
was
a
very
proud
and
excited
driver
of
an
EV1.
But
it
has
11
since
been
taken
away
from
me.
I
promise
I
will
keep
my
12
comments
very
short.

13
I
just
want
to
add
my
voice
of
support
to
some
of
14
the
ideas
that
I
thought
were
the
most
interesting
and
15
effective
in
terms
of
changes
to
the
proposals.
I
thought
16
Dave
Modisette's
ideas
were
very
clearly
stated
and
17
represented
a
really
good
compromise.

18
I
do
not
think
the
numbers
were
pulled
out
of
the
19
air
in
any
way.
They
seemed
really
well
considered
and
20
should
be
considered
as
the
real
numbers.

21
Then,
by
far,
my
most
important
thing
to
say
is
I
22
want
to
add
my
voice
to
those
who
say
that
there
23
definitely
should
be
a
maintaining
of
the
battery
electric
24
vehicle
requirement
in
the
alternative
compliance
path.
I
25
think
that
is
the
most
important
thing.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
469
1
I
thought
it
was
a
very
good
idea
to
move
the
2
date
for
review
to
a
later
time
because
it
seems
to
me
3
that
often
the
review
process
leads
to
stalling
and
4
weakening
of
the
original
ideas.

5
I
happen
to
be
a
big
supporter
of
the
idea
of
6
plug­
in
hybrids.
I
think
it
is
very
good.
I
want
to
say
7
to
CARB,
in
general,
I
think
that
there's
been
so
much
­­

8
you
have
put
in
so
much
good
hard
work
to
implement
this
9
very
important
vision.
I
do
see
your
role
as
being
a
10
historic
one.
And
I
hope
you
will
not
allow
a
ZEV
11
blackout
in
any
way.

12
I
think
it's
very,
very
important
that
these
cars
13
of
all
kinds
be
available
for
sale
so
that
Americans
can
14
have
true
choice.

15
Thank
you.

16
CHAIRPERSON
LLOYD:
Thank
you.

17
Kurt
Rasmussen?

18
Oh,
yes.
Somebody
said
Bill
Smith
was
here.
I
19
called
you
once.
Were
you
sleeping?

20
MR.
SMITH:
No,
I
wasn't
sleeping.
You
called
me
21
after
somebody
else,
about
three
people
ago.
One
person
22
ago
and
you
said
three
people
later.

23
CHAIRPERSON
LLOYD:
Hold
on,
he's
got
to
change
24
his
paper.

25
MR.
SMITH:
That
will
give
me
a
chance
to
change
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
470
1
my
notes.

2
CHAIRPERSON
LLOYD:
And
then
we
have
Kurt
3
Rasmussen.
I
don't
see
Kurt
around.

4
And
then
Bernadette
Del
Chiaro?

5
No.
Tomorrow.

6
And
then
I
know
Charlie
Peters
is
here.

7
I
thought
you
­­
that's
fine.
I
was
told
that
8
you
would
be
here
tomorrow,
but
if
you're
here
tonight,

9
that's
great.

10
Jerry
Pohorsky.
We
haven't
got
to
you
yet.

11
MR.
SMITH:
Ready?

12
CHAIRPERSON
LLOYD:
Ready.
Please
start.

13
MR.
SMITH:
Thank
you
very
much.
It's
always
14
pleasure
to
public
speak.
I've
publically
spoken
about
15
700
times
in
the
last
12
years
at
the
military
base
16
conversion
we
have
happening
down
in
the
bay
area.

17
There's
ten
bases
on
the
bay
front.
There's
30
18
bases
in
California
converting.
I'm
trying
to
help
us
19
make
us
smooth
transition.

20
The
Calstart
had
come
to
our
military
base
as
the
21
first
business.
The
entire
country
is
watching
what's
22
happening
in
Alameda.

23
I've
been
able
to
follow
all
of
this
as
a
result
24
of
my
researching
and
researching
and
researching,
working
25
18
hour
days
a
lot
of
the
time
and
down
to
two
our
days,

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
471
1
because
what
I
do
is
basically
recreational.

2
Now,
I've
been
able
to
garner
the
top
3
technologists
available.
And
in
the
fields
of
the
4
materials
solutions
for
their
products,
you
have
systems
5
of
design.
The
big
three
car
companies
have
either
like
6
the
Hemi
Motors,
or
they
have
the
Ford
Bodies,
or
they
7
have
the
GM
interiors.

8
And
I've
had
family
and
extended
family
in
all
9
the
different
technologies
and
all
the
different
angles
of
10
different
transportation
vehicles.

11
Now,
my
objectives
are
to
be
able
to
help
12
everybody
in
every
way
I
can.
And
I
haven't
been
working
13
on
the
problems.
I've
been
working
with
the
solutions.

14
Now,
your
people
have
been
working
on
the
solutions,
but
15
they're
very
limited
by
their
breadth
and
depth
of
the
16
legislation
that's
allowed
you
to
make
the
progress
you've
17
made
here
in
the
last
12
years.

18
And
it's
amazing
that
people
can
make
any
kind
of
19
progress
at
all.
I've
been
in
touch
many,
many
times
with
20
the
staff.
And
the
staff
turns
over
a
little
bit,
but
21
still
you
have
quality
people
and
this
is
California,
and
22
I'm
down
in
Alameda.
You
can't
find
the
quality
of
people
23
that
you
can
find
in
our
region.

24
Now,
what
I'd
like
to
see
happen
is
a
RealTime
25
independent
expert
review
panel.
Now,
this
is
apparently
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
472
1
being
instituted
here.
And
in
order
for
us
to
be
able
to
2
make
the
appropriate
progress,
we're
in
a
position
to
3
capitalize
and
have
the
technologies
that
­­
of
the
4
technologists
that
I've
been
able
to
meet,
I've
had
people
5
approaching
me
from
other
countries
telling
me
they
want
6
me
to
Market
these
companies.

7
Now,
I'm
not
table
to
give
them
these
companies
8
to
deal
with
because
they
don't
now
how
to
deal
with
them.

9
Now,
I'm
dealing
with
the
companies
and
they
want
the
10
products
that
I
have.
And
there's
a
lot
of
different
11
things
you
do
when
you
do
a
new
class
of
vehicle.
I'm
in
12
a
position
to
do
a
new
class
of
vehicle.
It's
for
rescue,

13
instead
of
doing
war.

14
You
go
up
against
Mother
Nature
and
you
have
a
15
lot
of
solutions
you
can
deal
with.
Now,
if
you
can
do
16
the
neighborhood
electric
vehicle,
there's
a
lot
of
people
17
against
it,
because
it
doesn't
go
55
miles
an
hour
down
18
the
freeway.
Although,
the
Neighborhood
Electric
Vehicle
19
in
allowed
in
not
at
25
miles
an
hour,
but
21
miles
per
20
hour.

21
And
GM
put
them
out
to
the
dealers
for
free,

22
seven
per
dealer.
And
now
they're
taking
them
back.
And
23
they're
sending
them
off
to
the
company
that
produced
24
them,
they
had
a
very
short
contract
with.
The
people
25
have
a
million
vehicles
out
there.

PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
473
1
I'm
in
a
position
to
revamp
these
vehicles.

2
There's
a
million
vehicles.
There
are
a
lot
of
them
in
3
California
and
Florida,
because
that's
where
the
senior
4
facilities
are.
They
control
their
own
roads.
The
people
5
are
not
able
to
go
to
the
market.

6
Now,
what's
so
funny,
Dr.
Lloyd.
The
guy
is
7
leaving
on
me.

8
Do
we
have
a
quorum.

9
Maybe
Mrs.
Riordan,
can
inform
me
as
to
why
he
10
was
losing
it.

11
GENERAL
COUNSEL
WALSH:
Since
at
this
point
in
12
time,
we
do
not
have
a
quorum
of
the
Board
we
should
13
continue
the
hearing
until
tomorrow
morning
at
8:
30.

14
MR.
SMITH:
I
imagine
I'll
just
pick
up
my
time
15
then.

16
(
Thereupon
the
California
Air
Resources
Board
17
recessed
at
9:
15
p.
m.)

18
19
20
21
22
23
24
25
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345
474
1
CERTIFICATE
OF
REPORTER
2
I,
JAMES
F.
PETERS,
a
Certified
Shorthand
3
Reporter
of
the
State
of
California,
and
Registered
4
Professional
Reporter,
do
hereby
certify:

5
That
I
am
a
disinterested
person
herein;
that
the
6
foregoing
California
Air
Resources
Board
meeting
was
7
reported
in
shorthand
by
me,
James
F.
Peters,
a
Certified
8
Shorthand
Reporter
of
the
State
of
California,
and
9
thereafter
transcribed
into
typewriting.

10
I
further
certify
that
I
am
not
of
counsel
or
11
attorney
for
any
of
the
parties
to
said
meeting
nor
in
any
12
way
interested
in
the
outcome
of
said
meeting.

13
IN
WITNESS
WHEREOF,
I
have
hereunto
set
my
hand
14
this
16th
day
of
April,
2003.

15
16
17
18
19
20
21
22
23
JAMES
F.
PETERS,
CSR,
RPR
24
Certified
Shorthand
Reporter
25
License
No.
10063
PETERS
SHORTHAND
REPORTING
CORPORATION
(
916)
362­
2345

