1. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 1 Texas Emissions Reduction Plan (TERP) Air Quality Division May 2015

2. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 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 oxides (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. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 3 Primary Goal is to Reduce NO X TERP provides financial incentives for projects that reduce NO X emissions in eligible areas. NO X emissions combine with volatile organic compounds (VOC) in the presence of sunlight to form ground level ozone (smog). NO X + VOC + Ozone

4. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 4 Mobile Sources of NO x

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6. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 6 Diesel Emissions Reduction Incentive (DERI) Program

7. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 7

8. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 8 Emissions Reduction Incentive Grants (ERIG) Program A competitive grant program that provides incentives to upgrade or replace older heavy-duty vehicles, non-road equipment, locomotives, marine vessels, and stationary equipment Eligible replacement vehicles and equipment include: Diesel Engines; Alternative Fuel Vehicles and Equipment; Hybrid Vehicles and Equipment; Idle Reduction Infrastructure; and Refueling Infrastructure.

9. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 9 Eligible Applicants Persons (individuals, businesses, districts, non-profits, and governments) that own and operate eligible vehicles and equipment in the eligible counties are eligible. Eligible Vehicles and Equipment −On-road vehicles must have a gross vehicle weight rating (GVWR) of 8,501 pounds or higher. −Non-road equipment, marine vessels, locomotives, and stationary equipment engines must have a horsepower of 25 or higher. ERIG Program

10. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 10 Rebate Grants Program Limited to replacement or repower of heavy-duty on-road diesel vehicles and non-road equipment Faster, simpler process for projects consistent with the ERIG requirements First-come, first-served On-road diesel vehicles may be replaced with diesel, natural gas, propane, or electric powered vehicles

11. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 11 DERI Projects Awarded by Area 2001 Through August 2014 * Unknown/TBD includes grant funding to third parties that have not yet reported awards to a particular area.

12. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 12 DERI Grant Amounts by Area AUSAustin Area BPABeaumont- Port Arthur CCCorpus Christi DFWDallas-Fort Worth ELPEl Paso HGBHouston-Galveston- Brazoria SASan Antonio Area TBD*To Be Determined TYLTyler-Longview VICVictoria * Includes Third-Party for funding not yet reported as assigned to specific areas.

13. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 13 DERI Projects Awarded by Emission Source 2001 Through August 2014 *Unknown/TBD includes grant funding to third parties that have not yet reported awards to particular categories.

14. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 14 Projects Awarded by Emission Source

15. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 15 DERI Projects Awarded Summary Number of Projects – 9,580 Number of Activities – 15,623 Total NO X Tons – 160,836 Grant Amount - $905,143,138 Cost Per Ton - $5,628

16. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 16 Other Grant Programs

17. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 17 Texas Clean Fleet Program (TCFP) Provides incentives for the replacement of diesel vehicles with alternative fuel and hybrid vehicles Alternative fuels include compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), hydrogen, methanol (80% by volume), and electricity. This program allows for replacement of light-duty, medium-duty, and heavy-duty diesel vehicles. Applicants must own at least 75 vehicles and operate those vehicles in Texas. Applicants must apply to replace at least 20 vehicles. Grants may pay for up to 80% of the costs. Grant selections are competitive, based on cost-per-ton of NO X reduced.

19. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 19 TCFP Awards (through August 2014) FUEL NUMBER OF PROJECTS NUMBER OF ACTIVITIES GRANT AMOUNT CNG488$9,723,469 Diesel Hybrid155$3,181,967 LPG7162$10,689,679 Total12305$23,595,115

20. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 20 Texas Natural Gas Vehicle Grant Program (TNGVGP) Provides grants for the replacement and repower of heavy-duty and medium-duty vehicles and engines with heavy-duty and medium-duty CNG or LNG vehicles and engines Vehicles must operate in counties in the area defined by the Clean Transportation Triangle (CTT). Applications are submitted through Participating Dealers and awards are made on a first-come, first- served basis. Participating Dealer will verify eligibility, arrange for inspection of the original vehicle to confirm that it is in operating condition, and arrange for disposition.

21. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 21 TNGVGP The new vehicle/engine must receive at least 75% of its power from CNG or LNG. The project must result in a reduction in NO x emissions of at least 25% as compared to the original engine. The new engine must be certified to emit no more than 0.2 grams per brake horsepower-hour of NO X. Grants awarded to cover up to 90% of the incremental cost of the natural gas vehicle or engine.

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23. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 23 TNGVGP Awards (through August 2014) Number of Projects: 57 Number of Activities: 714 Grant Amount Awarded: $36,487,425

24. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 24 Drayage Truck Incentive Program (DTIP) Provides incentives for the replacement of older drayage trucks operating at seaports and Class I rail yards in areas of Texas designated as nonattainment. Eligible applicants must operate the grant-funded drayage trucks in the nonattainment or affected counties for at least 50% of the annual usage. Eligible applicants must operate a drayage truck in one or more of the designated seaports or Class I rail yards for an average of 200 visits per year. Eligible vehicles & equipment include: – on-road vehicles with a GVWR greater than 26,000 pounds; and – yard trucks (terminal tractors) with an engine rated at greater than 125 horsepower.

26. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 26 Clean Transportation Triangle (CTT) Provides grants for the construction or reconstruction of facilities to dispense natural gas Grant-funded fueling stations must be in the nonattainment areas, affected counties, or counties along and between the interstate highways connecting Dallas- Fort Worth, Houston, and San Antonio. Grant-funded fueling stations must be made available to the public and must operate for at least three years. Grants may not exceed: − $400,000 for stations providing CNG; − $400,000 for stations providing LNG; or − $600,000 for stations providing both CNG and LNG.

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28. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 28 CTT Awards (through August 2014) CNG: 10 − 5 in Dallas-Fort Worth − 1 in Houston-Galveston-Brazoria − 4 in other areas LNG: 2 − 1 in Houston-Galveston-Brazoria − 1 in other areas CNG + LNG: 6 − 3 in Dallas-Fort Worth − 3 in other areas Grant Amount: $3,900,000 Additional grant awards for FY 2015 are pending.

29. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 29 Alternative Fueling Facilities Program (AFFP) Provides grants for the construction or reconstruction to dispense alternative fuels Eligible Alternative Fuels; Biodiesel, Hydrogen, Methanol, Natural Gas, Propane, and Electricity Grant-funded facilities must be located in the nonattainment areas of Texas. Grant amounts will be for the lesser of 50% of the eligible costs or $600,000. Grant-funded fueling stations must be made available to the public and must operate for at least three years.

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31. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 31 AFFP Awards (through August 2014) CNG: 3 − 2 in Houston-Galveston-Brazoria − 1 in Dallas-Fort Worth CNG + LNG: 1 − Houston-Galveston-Brazoria Grant Amount: $1,786,602 Additional grant awards for FY 2015 are pending.

32. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 32 Texas Clean School Bus Program The Texas Clean School Bus Program is a comprehensive program designed to reduce emissions of diesel exhaust from school buses. Projects may include diesel oxidation catalysts, diesel particulate filters, and emissions-reducing add-on equipment. This program focuses on the reduction of emissions of diesel exhaust by retrofitting older school buses.

33. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 33 Texas Clean School Bus Program Through FY 2014 this program had funded the retrofit of 7,103 school buses, for a total funding amount of $25,946,067 ($21,614,775 in TERP funds and $4,331,292 in federal funds). So far in FY 2015, an additional 161 buses have been funded for a total funding amount of ($3,010,696 in TERP funds and $136,688 in federal funds).

34. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 34 Light-Duty Motor Vehicle Purchase or Lease Incentive Program (LDPLI) Provides rebate-type grants for certain light-duty vehicles Up to 2,000 CNG and LPG vehicles and 2,000 electric plug-in light-duty vehicles may be funded. Plug-in hybrid-electric vehicles are included. Rebates of up to $2,500 per vehicle are available (first-come, first-served). The TCEQ maintains a list of qualifying vehicles. The new vehicle must be registered and operated in Texas for a period of at least one year. Vehicles must be less than 10,000 pounds GVWR.

35. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 35 LDPLI Awards (through March 2015) Plug-In Electric Vehicles: 1,160 CNG Vehicles: 162 Grant Funds Awarded: $2,956,250.00 Funds Remaining: $4,800,866.00

36. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 36 LDPLI Plug-In Electric Vehicles Funded

37. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 37 LDPLI CNG/LPG Vehicles Funded

38. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 38 New Technology Implementation Grants (NTIG) Program The primary purpose of this grant program is to offset the incremental cost of emission reductions from facilities and other stationary sources in Texas. Eligible categories include: − Electricity Storage; − New Technology; and − Advanced Clean Energy.

39. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 39 TERP FUNDING

40. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 40 TERP Grant Funding FY 2014 – 2015 PROGRAM Approximate Funding Amounts per Fiscal Year (FY 2014 – 2015) Emissions Reduction Incentive Grants/ Rebate Grants/Third-Party Grants $33.7 M Texas Natural Gas Vehicle Grant Program$12.4 M Texas Clean Fleet Program$3.9 M Texas Clean School Bus Program$3.1 M Clean Transportation Triangle$3.9 M Alternative Fueling Facilities Program$3.9 M New Technology Implementation Grants$2.3 M Drayage Truck Incentive Program$1.5 M Light-Duty Motor Vehicle Purchase or Lease Incentives$3.9 M

41. TCEQ Environmental Trade Fair & Conference May 5, 2015 Page 41 Contact Information Web site: www.terpgrants.org E-mail: terp@tceq.texas.gov Toll Free: 800-919-TERP (8377)