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Retrofit/Rebuild Requirements for 1993 and Earlier Model Year Urban Buses; Certification of Retrofit/Rebuild Equipment on the Basis of Life Cycle Cost Requirements
[Federal Register: July 19, 1996 (Volume 61, Number 140)] [Notices] [Page 37734-37738] From the Federal Register Online via GPO Access [wais.access.gpo.gov]
ENVIRONMENTAL PROTECTION AGENCY [FRL-5537-7] Retrofit/Rebuild Requirements for 1993 and Earlier Model Year Urban Buses; Certification of Retrofit/Rebuild Equipment on the Basis of Life Cycle Cost Requirements AGENCY: Environmental Protection Agency. ACTION: Notice of agency certification of equipment on the basis of compliance with life cycle cost ceiling of the urban bus retrofit/ rebuild program.
SUMMARY: This notice announces the decision of the Director of the Engine Programs and Compliance Division to expand the certification of certain equipment to include the basis of compliance with the life cycle cost requirements of the urban bus retrofit/rebuild program. The effective date of certification of Detroit Diesel Corporation's (DDC) equipment for upgrading its 1979 through 1989 model year urban bus engines of model 6V92TA equipped with mechanical unit injection (MUI) is October 2, 1995 (60 FR 51472). That certification was based on reduction in particulate matter (PM) of 25 per cent or more, but not on DDC's guarantee to make the equipment available to all operators for less than the applicable life cycle ceiling (hereinafter referred to as ``life cycle cost requirements''). Expanding the basis of certification of DDC's upgrade kit to include the basis of life cycle cost requirements will be beneficial to the urban bus program objective of reducing ambient levels of PM emissions. This notice affects only those bus operators choosing compliance program 2. As a result of today's notice, the certification level of the DDC kit may be considered by the Agency when ``post-rebuild'' PM levels are established in mid-1996. The post-rebuild levels to be established in mid-1996 must be used by operators complying with compliance program 2 when calculating average fleet emissions for 1998 and thereafter. Therefore, today's Federal Register notice will tend to lower ambient levels of PM emissions from fleets which comply with compliance program 2.
The Agency has reviewed DDC's notification of intent to certify, other information, as well as comments received, and determines that certification of the DDC equipment should be expanded to include the basis of life cycle cost requirements. Copies of both DDC's notification and other relevant information are available for review in the public docket located at the address indicated above. Category VII of Public Docket A-93-42, entitled ``Certification of Urban Bus Retrofit/Rebuild Equipment'' contains DDC's notification of intent to certify, the new cost information, and comments received, and other relevant materials. This docket is located at the address below. DATES: A letter dated June 24, 1996, from the Director of the Engine Programs and Compliance Division to DDC establishes the effective date of certification on the basis of complying with the applicable life cycle cost requirements. A copy of this letter can be found in the public docket at the address listed below. ADDRESSES: U.S. Environmental Protection Agency, Public Docket A-93-42 (Category VII), Room M-1500, 401 M Street SW., Washington, DC 20460. The DDC notification of intent to certify, as well as other materials specifically relevant to it, are contained in the public docket indicated above. Docket items may be inspected from 8 a.m. until 5:30 p.m., Monday through Friday. As provided in 40 CFR Part 2, a reasonable fee may be charged by the Agency for copying docket materials. FOR FURTHER INFORMATION CONTACT: William Rutledge, Engine Programs and Compliance Division (6403J), U.S. Environmental Protection Agency, 401 M Street SW., Washington, DC 20460. Telephone: (202) 233-9297. SUPPLEMENTARY INFORMATION: I. Background On April 21, 1993, the Agency published final Retrofit/Rebuild Requirements for 1993 and Earlier Model Year Urban Buses (58 FR 21359). The retrofit/rebuild program is intended to reduce the ambient levels of particulate matter (PM) in urban areas and is limited to 1993 and earlier model year urban buses operating in metropolitan areas with 1980 populations of 750,000 or more, whose engines are rebuilt or replaced after January 1, 1995. Operators of the affected buses are required to choose between two compliance options: Program 1 sets particulate matter emissions requirements for each urban bus engine in an operator's fleet which is rebuilt or replaced; Program 2 is a fleet averaging program that establishes specific annual target levels for average PM emissions from urban buses in an operator's fleet. In general, to meet either of the two compliance options, operators of the affected buses must use equipment which has been certified by the Agency.
A key aspect of the program is the certification of retrofit/ rebuild equipment. Emissions requirements under either of the two compliance options depend on the availability of retrofit/rebuild equipment certified for each engine model. To be used for Program 1, equipment must be certified as meeting a 0.10 g/bhp-hr PM standard or, if equipment is not certified as meeting the 0.10 PM standard, as achieving a 25 percent reduction in PM. Equipment used for Program 2 must be certified as providing some level of PM reduction that would in turn be claimed by urban bus operators when calculating their average fleet PM levels attained under the program. For Program 1, information on life cycle costs must be [[Page 37735]] submitted in the notification of intent to certify in order for certification of the equipment to initiate (or trigger) program requirements. To trigger program requirements, the certifier must guarantee that the equipment will be available to all affected operators for a life cycle cost of $7,940 or less at the 0.10 g/bhp-hr PM level, or for a life cycle cost of $2,000 or less for the 25 percent or greater reduction in PM emissions. Both of these values are based on 1992 dollars and are increments above costs associated with a standard rebuild. If the Agency determines that the life cycle cost requirements are met, then certification would be based on life cycle cost requirements in addition to reducing PM emissions. Under program 2, operators calculate their average fleet emissions using specified ``pre-rebuild'' and ``post-rebuild'' engine PM emission levels (as well as other factors). The final rulemaking of April 21, 1993, established the pre-rebuild emissions levels, and intended that post-rebuild levels be established at two subsequent points in time, based on the certification levels of equipment certified by those points. Post-rebuild levels were established for the first two years of the program in a Federal Register notice of September 2, 1994 (59 FR 45626).
Section 85.1403(c) requires that final post-rebuild levels be established based on equipment certified by July 1, 1996, to meet the PM standard and as being available to all operators for less than an appropriate life cycle cost ceiling. These ``post-rebuild'' levels are to be used in the calculations of fleet target levels for 1998 and thereafter, for engines scheduled for retrofit/rebuild in calendar years 1997 and thereafter. Section 85.1403(c)(1)(iii) requires that post-rebuild emission levels be the lowest emission level (greater than 0.1 g/bhp-hr) certified as meeting the emission and cost requirements of 85.1403(b)(2), for any engine model for which no equipment has been certified by July 1, 1996 as meeting the requirements of 85.1403(b)(1). The Agency announced certification of the DDC upgrade kit for the 1979-1989 6V92TA engines in the Federal Register on October 2, 1995 (60 FR 51472) based on compliance with the 25reduction standard, but without determination of compliance with the life cycle cost ceiling. That certification does not restrict use of the upgrade kit by operators under compliance program 1, until other equipment is certified which triggers the 0.10 g/bhp-hr standard, nor does it restrict its use under compliance program 2. II. Information Concerning Life Cycle Cost By a notification of intent to certify signed March 16, 1995, and with cover letter dated April 11, 1995, Detroit Diesel Corporation (DDC) applied for certification of equipment applicable to it's 6V92TA model engines having mechanical unit injectors (MUI) that were originally manufactured between January 1979 and December 1989. DDC, in its notification of intent to certify, requests certification on the basis of life cycle cost requirements and guarantees to make the equipment available to all operators for less than the applicable life cycle ceiling (hereinafter referred to as ``life cycle cost requirements''). Several public comments were received which discussed the life cycle cost requirements of the DDC kit. As stated in the Federal Register notice of October 2, 1995, however, the Agency saw no advantage to such certification at that time because the emission standard had been triggered earlier by certification of other equipment, and did not respond to those comments at that time. As explained in Federal Register notice of March 4, 1996 (61 FR 8275), the Agency upon reconsideration believes that it may be beneficial to the program to expand the basis of certification of DDC's upgrade kit to include the basis of life cycle cost requirements. In its notification of intent to certify, DDC states that the equipment will be offered to all affected urban bus operators for a maximum purchase price of $5,562, and has submitted life cycle cost information. DDC states that there is no incremental cost associated with the upgrade kit compared to a standard rebuild, and guarantees that it will offer the kit to all affected operators for less than the incremental life cycle cost ceiling of $2,000 (1992 dollars). Cost information provided by DDC indicates that the suggested transit list price of the upgrade kit is less than the sum of the suggested list prices of the individual components, if purchased separately. DDC indicates that all of the components of the upgrade kit, with exception of the blower by-pass valve assembly, are currently replaced or reworked during ``standard rebuild'' by the majority of operators. DDC states that there is no incremental additional installation cost, fuel cost, or maintenance cost compared to that related to a standard engine overhaul. Additionally, when an engine (before rebuild with the kit) is not identical to the certified configuration, certain components must be changed. DDC states that there are no ``conversion'' charges associated with such ``non-like'' core components of their certified upgrade kit.
In addition to its initial request in its notification of intent to certify, DDC reiterated its request that this equipment be certified on the basis of life cycle cost requirements in a letter to the Agency dated December 15, 1995, and provided additional information concerning transit pricing level. Other new information in the docket include a summary of a survey on engine rebuilding practices of 23 transit systems, entitled ``American Public Transit Association Transit Bus Diesel Engine Rebuilding Survey'', and dated January 1991. A Federal Register notice of March 4, 1996 (61 FR 8275) announced that the Agency was considering certification of the DDC equipment on the basis of life cycle cost requirements, receipt of new information available for public review, and the initiation of a 45-day public comment period during which the Agency would receive comments regarding certification on the basis of life cycle cost requirements. That comment period officially ended on April 18, 1996.
Comments were received from two parties during the comment period of the March 4, 1996, Federal Register notice, consisting of a bus operator and a manufacturer of exhaust catalysts applicable to diesel engines. Summaries of these comments are provided below, along with Agency responses.
During the comment period of the June 5, 1995, Federal Register notice, two parties commented about the DDC costs. The March 4, 1996, Federal Register notice provided summaries of these comments along with Agency responses. No further cost information, discussion of cost information, or discussion of Agency responses has been received from these two parties. III. Summary and Analyses of Comments Two parties provided comments in response to the March 4, 1996 Federal Register notice--an urban bus operator and the Johnson Matthey Corporation. The following is a summary of these comments, and the Agency's response.
Comments of the Tri-County Metropolitan District of Oregon (TRIMET) suggest that terminology (``cost/availability'') used in the March 4, 1996, Federal Register notice is confusing. While the term ``cost/ availability'' was intended to be a more concise expression, the Agency believes that other wording may be more appropriate. Today's Federal Register notice uses the [[Page 37736]] phrase ``life cycle cost requirements'' to be more consistent with language used in the program regulations. TRI-MET also asks whether the kit will be a trigger (of program requirements) if the Agency certifies the DDC kit on the basis of life cycle cost requirements.
Certification of the Engelhard Corporation's CMX catalyst on May 31, 1995 (60 FR 28402) triggered program requirements for the engines in question. The CMX catalyst is certified on the bases of reducing PM emissions by at least 25 percent and complying with life cycle cost requirements. That certification affects operators using compliance program one (1), until equipment is certified which triggers the 0.10 g/bhp-hr standard. When applicable engines are rebuilt or replaced six (6) months or more after the date of the CMX certification (that is, rebuilt or replaced on or after December 1, 1995), operators must use equipment certified to reduce PM by at least 25 percent. Johnson Matthey, Incorporated (JMI), provided three comments, the first two of which are relevant to the emission testing performed by DDC to determine PM reduction attributed to the upgrade kit. First, JMI comments that a review of DDC service manuals shows that no new urban bus engines were manufactured with the serial number of the test engine used by DDC. JMI questions the origins of the test engine, and indicates that data derived from the engine is not valid and should not be used for program certification for consistency reasons because the engine is not representative of a bus engine. Second, JMI notes that a complete list of parts for the rebuild and upgrade of the test engine were not provided by DDC. JMI believes that such a parts list is needed to determine whether the DDC rebuild is ``* * * typical of the current practice exercised by the transits * * *''. In its notification of intent to certify, DDC states that the core engine was a 1979 model year with an automotive model number, but that the original history of the core engine is not known. Prior to baseline testing, the engine was completely rebuilt to a typical high-volume coach rating (294 horsepower) of an original 1979 urban bus configuration. As discussed below, the Agency believes that the original configuration of the bus engine, prior to it being used in the DDC certification test program, is not relevant in this case. Generally speaking, the Agency's interest in review of test engine history is to reasonably assure that PM reductions predicted by testing candidate equipment can be attained on in-use urban bus engines. Testing of engines in urban bus configurations is preferred because the testing demonstration of the urban bus program is minimal, when compared with the new engine certification program. Testing of engines in non-urban bus configurations, or of engines equipped with inappropriate emission-related parts, may be of uncertain value toward meeting the assurance needed. Further, if engines are tested in a prerebuild condition, then engine origins and maintenance history may be important. The Agency believes that knowledge of the condition and configuration of test engines, both pre-rebuild and post-rebuild, and for baseline and candidate configurations, are valid concerns and the bases for our general expectation that test engines for certification testing be urban bus configurations.
The Agency believes that the concerns regarding test engine origins expressed by JMI should not prevent certification. DDC does not need to test the engine in its as-received, pre-rebuild configuration--the emission level of the as-received configuration is not relevant because DDC's upgrade kit is used only upon engine rebuild. DDC, in its notification of intent to certify, states that baseline emissions data were developed after rebuilding the test engine to an original 1979 urban bus configuration. Given that DDC did not test in the pre-rebuild configuration, but only after rebuild to the urban bus configuration, the serial number of the block is not important. The Agency received no comments requesting a parts lists or questioning DDC's rebuild before the upgrade kit was certified on October 2, 1995 (60 FR 51472) to reduce PM by at least 25 percent.
Notwithstanding the previous discussion, JMI's comment regarding the lack of a list of parts used by DDC in the rebuild and upgrade is valid, and the Agency believes such information should be available for public review. Lists of the emission-related parts used in test engine(s) will document the actual tested engine configurations and should be part of the public record. The Agency has requested DDC to provide these lists to be made part of its notification in the public docket. JMI's comment, however, suggesting that the list is needed to determine whether the DDC rebuild is ``* * * typical of the current practice exercised by the transits * * *'' should not prevent certification because the baseline rebuild does not have to be ``* * * typical * * *'' to be a valid baseline. Sections 85.1403(b) and 85.1406(a)(2)(v)(B) of the program regulations are clear--PM reduction is based on the emissions levels of the original engine configuration. DDC states that its baseline PM level was developed using its test engine rebuilt to a 1979 model year configuration. While some rebuilds, as of yet uncertified and not required under the urban bus program, may result in lower PM exhaust levels than the original engine configurations, this is not necessarily the case for all rebuilds. The urban bus program requires engine configurations having PM levels lower than the original engine configuration. Certification is available for other rebuild kits or equipment which reduce PM and meet other program requirements. JMI's final comment concerns life cycle costs of the DDC kit. JMI comments that operators and rebuilders typically rebuild engines using a combination of reworked components and either DDC/original equipment (OE) parts or non-OE parts. JMI says that OE parts are often purchased through a bid process at an average 18 percent less than list price, and non-OE parts are usually purchased at an average 40 percent less than OE price. JMI presents two analyses of costs, one for a scenario using discounted OE parts and another for a scenario using non-OE parts. Both analyses assume cylinder kits, blower, turbocharger, and heads are reworked by the transit's or rebuilder's labor force for 45 percent of the cost of a new OE part. The analysis including OE parts with reworked components indicates that this scenario is $2,243.22 less than the suggested price of the DDC kit. The scenario including non-OE parts with reworked components indicates a greater difference from the suggested price of the DDC kit. This analysis indicates a typical rebuild of $2,913, which JMI states is $2,649 less than the suggested price of the DDC kit. JMI states that it believes the DDC kit exceeds the $2,000 life cycle ceiling for a typical overhaul. The Agency appreciates the effort put forth by JMI in providing these cost analyses, and recognizes that a range of parts costs can exist due to factors such as discounts from suggested retail prices due to normal competitive practice, discounts incident to bid processes or large purchases, and non-OE parts pricing. As a result of such price differences, plus the extent to which components are reworked ``inhouse'', the cost of a rebuild might vary widely. It is therefore difficult to determine an accurate figure for the cost of a ``standard'' rebuild. The Agency believes that further modification can be applied to the JMI analyses to depict actual rebuild practice concerning cylinder kits, and to take into account [[Page 37737]] the relative usage of non-OE parts versus OE parts. The Agency modifies the JMI analysis, as discussed below, to construct a ``weighted'' cost for a rebuild, based on information provided by DDC, the APTA survey, and in comments of the Engelhard Corporation. This ``weighted'' cost approach is used to more closely characterize what typically occurs in the field, on the average, based on the information available. The first modification reflects replacing, not reworking, cylinder kits. The JMI scenarios include cylinder kits that JMI states are typically reworked for $830.03, which is 45 percent discount from DDC's suggested price (if purchased separately). DDC indicated, in a telephone conversation with the Agency, that most operators do not rework cylinder kits. This is supported by the previously-mentioned APTA survey and a study conducted by the Agency (see the report entitled ``Heavy-Duty Rebuild Practices'', dated March 21, 1995, by T. Stricker and K. Simon), both of which support that most operators replace, and not rework, cylinder kits. Copies of the report ``HeavyDuty Rebuild Practices'', and the APTA survey can be found in the public docket located at the address above. Engelhard, in its comments of July 19, 1995, indicates that aftermarket cylinder kits cost $1,139.94.
The second modification reflects weighting the reported costs for non-OE and OE parts, to reflect usage. The APTA survey indicates that 67.4 percent of operators parts business is with OE parts suppliers, and 32.6 percent is with non-OE suppliers. Use of this information is discussed below to determine a weighted cost for certain components. The construction of the ``weighted'' cost of a rebuild, based on available information, is summarized as follows. The APTA survey indicates that roughly 95 percent rebuild engines in-house. Therefore, for simplicity, the ``weighted'' rebuild assumes that the blower, turbocharger, and heads are reworked in-house as stated by JMI. Except for the cylinder kits, it is assumed that the costs associated with reworking these three components are the values presented by JMI (that is, reworked at 45 percent of OE price, purchased individually). For the other parts, including cylinder kits, a weighted cost is determined as the sum of the non-OE cost, weighted 32.6 percent, plus the DDC suggested cost of parts, weighted 67.4 percent. This weighting is based on the APTA survey showing the relative split in operators' parts business between OE and non-OE parts suppliers. The costs used for the non-OE parts (except for the cylinder kits) and OE parts are the values used in the JMI analyses. The non-OE cost for cylinder kits is taken as the aftermarket list price reported in Engelhard's comments. The cost of the blower bypass valve is not included in the ``weighted'' rebuild, because DDC indicates that it is not always replaced. The table below details the cost of a ``weighted'' rebuild, based on the available information, and permits comparison with the suggested price of the certified DDC upgrade kit. Program regulations do not define ``standard rebuild'', nor instruct that the lowest possible or highest possible cost of a rebuild is appropriate for determining compliance with life cycle cost requirements. The Agency recognizes that there are a number of uncertainties and assumptions involved with this ``weighted'' approach, but believes, based on the available information, that this approach is more likely to characterize what typically occurs in the field. COST \1\ OF A ``WEIGHTED'' REBUILD ``Weighted'' Blower Bypass Valve not always replaced: ................ 0.00 The individual parts costs within the DDC kit are not relevant to this comparison.