Texas Emissions Reduction Plan (TERP)

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1 Texas Emissions Reduction Plan (TERP) Air Quality Division April 2013

2 What does TERP do? The Texas Emissions Reduction Plan (TERP) program provides financial incentives to upgrade or replace older heavy-duty vehicles, non-road equipment, locomotives, marine vessels, and stationary equipment to reduce nitrogen oxide (NO x ) emissions in eligible areas. With recent legislation, the TERP also supports programs to encourage the use of alternative fuels for transportation in Texas.

3 Primary Goal is to Reduce NO X TERP provides financial incentives for projects that reduce NO X emissions in eligible areas. NO X + VOC + Ozone NO X emissions combine with volatile organic compounds (VOC emissions) in the presence of sunlight to form ground-level ozone (smog).

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5 TERP Grant Programs

6 TERP Grant Programs Emissions Reduction Incentive Grant (ERIG) Program Rebate Grants Program Texas Clean Fleet Program (TCFP) Texas Natural Gas Vehicle Grant Program (TNGVGP) Clean Transportation Triangle (CTT) Alternative Fueling Facilities Program (AFFP) New Technology Implementation Grants (NTIG) Program Texas Clean School Bus Program

7 Emissions Reduction Incentive Grants (ERIG) Program A competitive grant program that provides incentives to upgrade or replace older heavyduty vehicles, non-road equipment, locomotives, marine vessels, and stationary equipment

8 Emissions Reduction Incentive Grants (ERIG) Program Eligible replacement vehicles and equipment include: Diesel Engines; Alternative Fuel Vehicles and Equipment; Hybrid Vehicles and Equipment; Idle Reduction Infrastructure; and Refueling Infrastructure.

9 Rebate Grants Program Limited to replacement or repower of on-road diesel vehicles and non-road equipment Faster, simpler process for projects consistent with the ERIG requirements First-come-first-serve On-road diesel vehicles may be replaced with diesel, natural gas, propane, or electric powered vehicles

10 Texas Clean Fleet Program Provides incentives for replacement of diesel vehicles with alternative fuel and hybrid vehicles This program allows for replacement of Light- Duty, Medium-Duty, and Heavy-Duty vehicles. Applicants must own at least 75 vehicles and operate those vehicles in Texas. Applicants must apply to replace at least 20 vehicles.

11 Texas Natural Gas Vehicle Grant Program (TNGVGP) Grants for the replacement and repower of heavyduty and medium-duty vehicles and engines with CNG and LNG heavy-duty and medium-duty vehicles and engines Vehicles must operate in the nonattainment counties and counties in the area defined by the Clean Transportation Triangle Program (CTT). Grant awards will be on a first-come-first-serve basis. Applicants must go through a participating dealer to apply.

12 Participating Dealer Responsibilities & Duties 1. Satisfy training requirement 2. Assist applicants with the TNGVGP grant solicitation 3. Complete & submit applications 4. Receive & review project documents for eligibility 5. Inspect old vehicle to confirm operating condition 6. Arrange for the destruction of the old vehicle 7. Transfer of records to TCEQ as required in contract 8. Respond promptly to TCEQ inquiries and public information requests 9. Ensure that grant applications are for vehicles/engines on the Natural Gas Vehicle and Engine List

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14 Clean Transportation Triangle (CTT) Grants for the development of natural gas fueling stations along interstate highways between Houston, San Antonio, and Dallas/Fort Worth Grant-funded fueling stations must be within three miles of eligible interstate highways. Grant-funded fueling stations must be made available to the public and have at least a three-year operation phase. Grants may not exceed: o $100,000 for stations providing compressed natural gas (CNG); o $250,000 for stations providing liquefied natural gas (LNG); or o $400,000 for stations providing both CNG and LNG.

15 Alternative Fueling Facilities Program (AFFP) Providing grants for the construction, reconstruction, or acquisition of facilities to store, compress, or dispense alternative fuel Grant-funded facilities must be located in the nonattainment areas of Texas. Grant amounts will be for the lesser of 50% of the eligible cost or $500,000. Projects must have at least a three-year operation phase.

16 Alternative Fueling Facilities Program (AFFP) Eligible Alternative Fuels Biodiesel Hydrogen Methanol (a mixture of fuels containing at least 85% methanol by volume) Natural gas Propane Electricity

17 CTT and AFFP Award Map

18 Next Grant Rounds The CTT application period is currently closed. Fifteen projects were selected for funding in the FY12 solicitation and ten applications were received under the FY13 solicitation. The AFFP application period is currently closed. Six projects were selected for funding. The Clean Fleet application period recently closed. Four projects were selected for funding. The TNGVGP is still accepting applications, however we have received more requests than available funding. The solicitation will close on May 31, The ERIG application period recently closed. Applications received are currently being reviewed. The Rebate Grants application period may open later this year.

19 TERP FUNDING

20 TERP FY Funding PROGRAM Approximate Funding Amounts per Fiscal Year (FY ) Allocation Emissions Reduction Incentive Grants/ Rebate Grants/Third- Party Grants Texas Natural Gas Vehicle Grant Program $29 M 50% $9.15 M 16% Regional Air Monitoring Program $7 M 12% Texas Clean Fleet Program $2.85 M 5% Texas Clean School Bus Program $2.3 M 4% Clean Transportation Triangle $2.3 M 4% Alternative Fueling Facilities Program $1.14 M 2%

21 Contact Information Website: Toll Free: TERP (8377))