texas emission

TEXAS EMISSION REDUCTION PROGRAMPrepared for Mustang Cat CustomersbyTod WickershamGood Company Associates, Inc.October 22, 2003: 

TEXAS EMISSION REDUCTION PROGRAM Prepared for Mustang Cat Customers by Tod Wickersham Good Company Associates, Inc. October 22, 2003

What’s the Problem?: 

What’s the Problem? Many areas of Texas have unhealthy air Ground level ozone exceeds federal health based standards which Negatively affects human health and drives up medical costs Negatively affects economic development Negatively impacts tourism Air Quality Program

What if we don’t clean up our air?: 

What if we don’t clean up our air? New road construction projects prevented from starting Federal highway funds withheld — stops existing road construction and maintenance projects… New business prevented from coming into the area Significant loss of jobs Reduction of local tax revenues which may lead to increase in taxes or further cuts in road maintenance and construction New requirements or restrictions for the construction and trucking industries Air Quality Program

Fixing the Air Quality Problem : 

Fixing the Air Quality Problem Take advantage of Texas Emissions Reduction Plan (TERP) grant program Replace older, higher emitting trucks and equipment Upgrade heavy duty engines in trucks and equipment Keep equipment in good working condition Utilize new technologies and cleaner fuels Texas Emissions Reduction Plan

TERP Program: 

TERP Program The TERP Grant Program is a voluntary incentive based program created to Subsidize the cost of reducing emissions from heavy duty engines in trucks and off-road machines Help avoid the negative federal economic penalties and restrictions Avoid new state regulations that could substantially restrict the operation of heavy duty trucks and equipment Prevent wasting time and money estimating and tracking project’s daily and total emissions Texas Emissions Reduction Plan

Counties Eligible for TERP Grant: 

Counties Eligible for TERP Grant Texas Emissions Reduction Plan

Counties Eligible for TERP Grant: 

Counties Eligible for TERP Grant Houston-Galveston Severe Nonattainment area: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller. Beaumont-Port Author Nonattainment area: Harden, Jefferson, and Orange Dallas-Fort Worth Severe Nonattainment area: Denton, Collin, Dallas, and Tarrant. Counties Surrounding the DFW area: area: Ellis, Henderson, Hood, Hunt, Johnson, Kaufman, Parker, and Rockwall. Tyler-Longview area: Smith, Upshur, Harrison, Gregg, and Rusk. Austin area: Travis, Williamson, Hays, Caldwell, and Bastrop. San Antonio area: Bexar, Comal, Guadalupe, and Wilson. Corpus Christi area: San Patricio and Nueces. Victoria county. El Paso County. Texas Emissions Reduction Plan

TERP Program Funding: 

TERP Program Funding Approximately $150 million per year for 4 years is roughly divided up as follows: $130 million to help reduce emissions from primarily heavy duty trucks and off-road equipment $100 million to be spent in the severe non-attainment areas, Houston-Galveston and Dallas-Fort Worth areas $30 million per year will go to the other areas with air quality problems, Austin, Beaumont-Port Arthur, Corpus Christi, El Paso, San Antonio, Tyler-Long View, and Victoria $12 million to the Texas Council on Environmental Technology (TCET) for research; new technology development and verification $5 million for administration of the program Texas Emissions Reduction Plan

TERP Funding Options: 

TERP Funding Options Mustang Cat can help you get TERP grants to: Repower: obtain a new or remanufactured engine for the cost of a basic overhaul Replacement: instead of rebuilding the engine, scrap your current machine/truck and get grant money towards the purchase of a new/newer machine/truck. New Purchase: receive funds for buying a machine/truck that is cleaner than current EPA requirements. Texas Emissions Reduction Plan

Repowers: 

Repowers Remove a machine’s existing engine and replace it with a new or newer cleaner engine. Benefit to you: Get new or remanufactured engine for the cost of a basic rebuild (or less). New engines should last longer New engines frequently have increased fuel efficiency or horsepower New engines comes with warrantee New engines more compatible with future retrofit technologies Note: Engine must be scrapped or sent back to Cat for core value New engine must be specified percent cleaner than old engine Texas Emissions Reduction Plan

Replacements: 

Replacements Replace old truck or machine with a new or newer cleaner truck or machine. Benefit to you: Subsidizes the modernization or your fleet Engines in newer trucks or equipment frequently have increased fuel efficiency or horsepower Note: New truck or machine must be specified percent cleaner than old truck or machine Most old trucks and machines must be scrapped or exported. Incentive amount based on cost-effectiveness not to exceed value of newer truck or machine minus core value… Texas Emissions Reduction Plan

New Purchases and Leases: 

New Purchases and Leases Purchase/lease a new machine that’s emissions levels are lower than EPA requirements. Benefit to you: Subsidizes the modernization or your fleet Engines in newer trucks or equipment frequently have increased fuel efficiency or horsepower Note: Limited window and availability: Tier II 50-100 horsepower machine must be in your possession by December 31, 2003 Early release Tier III machines will be eligible for TERP funding in 2005 or 2006 depending on horsepower ranges and availability Program only pays the incremental cost between Tier I and Tier II machine (or in the future between the Tier II and Tier III) Texas Emissions Reduction Plan

How to get TERP Funding: 

How to get TERP Funding Work with Mustang Cat Product Support Sales Rep and discuss your options Identify machines to be replaced or upgraded Review options that are pre-approved and those that require a conventional TERP application Note: Mustang Cat’s is seeking to pre-approve common repowers which is expected to eliminate most of the paperwork and the 3 month approval process for you. Some grants can be funded retroactively Texas Emissions Reduction Plan

How to get TERP Funding: 

How to get TERP Funding Provide Mustang Cat Product Support Rep with: Estimated hours per year of intended operation Number of years of intended ownership (3+ to 5+ year minimum requirement expected) Percent of time you expect operate in eligible counties Date you intend to begin operating the cleaner engine/equipment For replacement, provide evidence of ownership…for prior two years Complete company information sections of the pre-approved TERP contract form or the TERP application Texas Emissions Reduction Plan

How to get TERP Funding: 

How to get TERP Funding Mustang Cat Product Support Rep Calculates cost-effectiveness Estimates eligible grant amount Completes supplemental grant application activity forms with you, if necessary Discusses assignment of payment option with you, if applicable Upon award or final approval of the grant, you Sign the contract that states your commitments Complete request for reimbursement form or sign it for dealer to submit Report once a year the hours of operation within the designated eligible counties Texas Emissions Reduction Plan

Other Expected Opportunities: 

Other Expected Opportunities Preferential treatment by some state and local agencies Meet their new cleaner bid requirements or receive clean equipment bonuses. Other Incentives

Resources: 

Resources Your Mustang Cat Product Support and Sales Representatives www.mustangcat.com TCEQ TERP website www.tnrcc.state.tx.us/oprd/sips/terp.html Tod Wickersham or Monica Beard Good Company Associates, Inc. twickersham@goodcompanyassociates.com 512-480-2217