TO: Planning and Operations Committee
FR: Executive Director
RE: TCM 2 Substitution
DATE: January 2, 2004

Transportation Control Measure 2 (TCM 2) is a control strategy first included in the Bay Area's 1982 federal air quality plan. TCM 2 proposed to reduce automobile emissions by supporting transit improvements in transit operator short range plans. The implementation status of TCM 2 has been a source of major disagreement for a number of years, culminating in a lawsuit in federal court and an Order for Injunctive Relief requiring MTC to increase regional transit ridership to a specified level by November of 2006 (a level 15% above 1982/83 baseline ridership). MTC has interpreted TCM 2 as a commitment to support transit improvements included in a specific set of operator short range plans, not to achieve a particular level of transit ridership. MTC appealed the federal district court's judgment and injunction. The matter has been fully briefed and argued in the Ninth Circuit Court of Appeals, and the parties are awaiting a decision. (See Attachment 1 for TCM 2 description).

Meanwhile, due to two years of declining transit ridership resulting primarily from ongoing regional economic problems, MTC can no longer estimate that the Court-imposed ridership target can be achieved by the end of fiscal year 2006-07, the year that includes the District Court's November 2006 deadline. MTC has notified the District Court of this situation and indicated that MTC would need to consider replacing TCM 2 with other control strategies. The replacement of TCM 2 will not weaken the federal air quality plan as MTC will be required to identify other measures that will achieve the same air quality objectives. Thus, while we remain hopeful that the Court of Appeals will reverse the District Court's judgment, MTC staff believe that it would nevertheless be prudent at this time to initiate the steps that would facilitate the removal of TCM 2 from the federal air quality plan.

Substitution of TCM 2 must also be considered in the larger context of the region's attainment record. The Bay Area recently attained the national 1-hour ozone standard and will be preparing a Maintenance Plan and request to be redesignated to attainment status. This steady air quality progress reflects an effective ongoing program of emission control strategies, and also demonstrates that the increased transit ridership levels envisioned in 1982 when TCM 2 were adopted are not needed to attain the federal ozone standard (The emission reductions predicted from TCM 2 were less than 1% of all mobile source emissions).

The substitution of new control measures to replace TCM 2 would be accomplished as part of this larger air quality planning process to prepare a Maintenance Plan and redesignation request, as discussed above. Under these circumstances, at least, substitution measures need not be TCMs themselves, so long as they achieve the air quality goals of the original TCM. MTC staff is currently conducting an appraisal of the emission reductions needed to replace TCM 2 based on the history of past air quality plans as well as how current planning assumptions affect the estimates of the emission reductions required.

To remove TCM 2 from the federal air quality plan, MTC is proposing a two part strategy: 1) substitution of new measures which meet the emission reduction requirements of TCM 2, and 2) adoption of a new Transportation Control Measure (Further Study Measure 5 in the 2001 Ozone Plan) to enhance access to selected transit stations in the region. The following section details the elements of this strategy.

Potential Substitution Measures
The following measures are proposed to achieve the requisite reductions in the ozone precursors Volatile Organic Compounds (VOC) and Nitrogen Oxides (NOx).

Proposal for NOx Retrofit urban buses with new lean NOx catalyst

CARB has recently verified a diesel bus retrofit device that will significantly reduce NOx and particulate matter (PM). MTC has allocated $13.8 million in funds to retrofit some 1,700 Bay Area transit buses with these devices. No emission reduction credits have heretofore been claimed or granted on account of this expenditure. The device reduces NOx by 25% and particulates by 85%. In addition to reducing NOx, the device also provides modest benefits in reducing VOCs.

Proposal for VOC: Replace certain gasoline nozzles at Bay Area service stations

There are certain types of service station gasoline dispensing nozzles that emit excess vapors (volatile organic compounds) and as such are not performing as effectively as planned. Replacing these nozzles with improved equipment would be a highly cost effective way to achieve VOC reductions quickly. The inventory for the 2001 Ozone Attainment Plan includes excess emissions in 2006 from fuel dispensing facilities (under the category of Filling Stations/Pressure Related Fugitives). The current Air District estimate of excess emissions is 1.0 ton per day from 125 service stations. Replacement of these nozzles will have indirect benefits in reducing MTBE leakage front underground storage tanks.

Further Study Measures in the 200 Ozone Plan

The second part of the substitution strategy would be to commit to implementing a new developmental TCM, which would expand on Further Study Measure S in the 2001 Ozone Plan. The new TCM would focus on enhanced access to transit stations (see attached detailed description). Because this TCM would be innovative and untested, no emission credits would be identified in the Ozone Plan. Rather, credits would be taken in the future based on the evaluation of actual program results.


MTC's current Transportation Improvement Program (TIP) sets aside $34 million for clean air programs. A portion of this amount, $13.8 million, has been used to fund acquisition of bus retrofit devices to lower NOx and particulate matter as mentioned above. This leaves $20 million available to fund additional substitution measures, such as the fuel dispensing nozzles, the new developmental TCM for transit station access and/or other measures that may be suggested through the public review process.

Additional Benefits of Substitution

Transit improvements of the kind contemplated by TCM 2 have resulted in emission reductions that are already reflected in the current baseline inventory. Thus, the proposed substitution measures offer additional emission reductions, reductions that are real and verifiable. These measures will be implemented prior to 2006, whereas the timing of emission reductions from future transit ridership growth th cannot be predicted given uncertainties associated with the economic recovery and other factors outside MTC's control. While the Bay Area has attained the national 1 hour ozone standard, these additional reductions will provide a incremental margin of safety to help maintain compliance with the standard.

Substitution does not represent a weakening of the Bay Area's commitment to transit, since the 2001 Regional Transportation Plan commits over 75% of available funding to transit, and MTC's recent actions associated with development of the Transportation 2030 Plan strengthen this commitment even further by: 1) increasing funding for transit rehabilitation, 2) identifying specific funding for Lifeline transit service, 3) reinforcing the commitment to TransLink® and the 511 traveler information service, and 4) maintaining TLC and HIP levels at the tripled amount included in the 2001 RTP.

Finally, the substitution will resolve uncertainty in the implementation status of TCM 2, which, if the District Court's decision is not reversed, could have unknown effects on future conformity analyses, and could stimulate requests for court involvement in future MTC funding decisions. To the extent that substitution creates better predictability in terms of delivering the region's transportation program, all of our transportation partner agencies will benefit.

Next Steps

This memo outlines our thinking and approach to resolving a long term issue with the Bay Area's transportation control measures. We will reevaluate the question of substitution after the Court of Appeals issues its decision. For the time being, however, it is staff's intension to work with the air agencies and public to review specific substitution measures. The substitution measures would then be included in the draft Maintenance Plan/redesignation request to he released in the Spring of 2004. This Plan will be submitted to CARB and EPA for their review and approval later in the year.

s/Steve Heminger