[Federal Register Volume 61, Number 43 (Monday, March 4, 1996)]
[Notices]
[Pages 8275-8278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4954]



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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5433-6]


Retrofit/Rebuild Requirements for 1993 and Earlier Model Year 
Urban Buses; Public Review of Cost Information Related to the 
Certification of Retrofit/Rebuild Equipment

AGENCY: Environmental Protection Agency.

ACTION: Notice of agency receipt of cost information related to 
certification of equipment and initiation of 45-day public review and 
comment period.

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SUMMARY: This notice addresses a shortcoming in the current 
certification of certain equipment certified under 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 
percent 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 ``cost/availability''). Although 
DDC, in its notification of intent to certify, requested certification 
on the basis of cost/availability, as stated in the October 2, 1995 
Federal Register notice, the Agency at that time saw no advantage to 
certification on that basis. Upon reconsideration, the Agency 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 cost/
availability. Further, in addition to the request in its notification 
of intent to certify signed March 16, 1995, DDC reiterated its request 
in a letter to the Agency dated December 15, 1995, that this equipment 
be certified on the basis of cost/availability. Copies of both DDC's 
notification and the letter are available for review in the public 
docket located at the address indicated above.
    DDC has submitted to the Agency new information relevant to the 
certification of urban bus retrofit/rebuild equipment pursuant to 40 
CFR Part 85, Subpart O. Pursuant to section 85.1407(a)(7), today's 
Federal Register notice announces that the information is available for 
public review and comment, and initiates a 45-day period during which 
comments can be submitted. The Agency will review this information, as 
well as comments received, to determine whether certification of the 
DDC equipment should be expanded to include the basis of cost/
availability. If DDC's certification is expanded to include the cost/
availability basis, then the certification level of the equipment may 
be considered when ``post-rebuild'' PM levels are established in mid-
1996. The post-rebuild levels to be established in mid-1996 would be 
used by operators complying with compliance program 2 when calculating 
average fleet emissions for 1998 and thereafter. Therefore, to expand 
DDC's certification to include the basis of cost/availability may tend 
to lower ambient levels of PM emissions from fleets which comply with 
compliance program 2.
    Category VII of Public Docket A-93-42, entitled ``Certification of 
Urban Bus Retrofit/Rebuild Equipment'' contains the new cost 
information and DDC's notification of intent to certify, as well as 
other materials specifically relevant to it. This docket is located at 
the address below.
    Today's notice initiates a 45-day period during which the Agency 
will accept written comments relevant to whether the certification of 
DDC's equipment should be expanded to include the basis of cost/
availability. Comments should be provided in writing to Public Docket 
A-93-42, Category VII, at the address below. An identical copy should 
be submitted to William Rutledge, also at the address below.

DATES: Comments must be submitted on or before April 18, 1996.

ADDRESSES: Submit separate copies of comments to each of the two 
following addresses:

 
[[Page 8276]]

1. U.S. Environmental Protection Agency, Public Docket A-93-42 
(Category VII), Room M-1500, 401 M Street S.W., Washington, DC 20460.
2. William Rutledge, Engine Programs and Compliance Division (mail code 
6403J), 401 ``M'' Street S.W., 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 8:00 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 S.W., 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 (MY) 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 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 limit is met, then certification would be based on ``cost/
availability'' 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), which set 0.30 g/bhp-hr for 6V92TA engines of model years 1979 
through 1987. This level was established as required by the final rule, 
that is, as a ``default'' level for these engines in the event that no 
equipment was certified by July 1, 1994. As explained in the final 
rulemaking and the September 2, 1994, Federal Register, EPA determined 
that this ``default'' level could be attained by rebuilding the engines 
with the available DDC upgrade kit which, although not certified by 
July 1, 1994 under the urban bus program, has emissions performance 
supported by data from the Agency's new-engine certification program.
    The post-rebuild level established by the above-mentioned September 
2, 1994, Federal Register notice for the 1979-1987 6V92TA engines (0.30 
g/bhp-hr) is less than the pre-rebuild level (0.50 g/bhp-hr). That 
reduction in PM levels, and the assumed rebuild schedule of the 
regulation [Sec. 85.1403(c)(1)(iv)], means that operators choosing to 
comply with compliance program 2 and having 6V92TA MUI engines of 
certain model years must reduce average fleet PM emissions during 
calendar years 1995 and 1996 an amount equivalent to rebuilding those 
model year engines with DDC's upgrade kit.
    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 Sec. 85.1403(b)(2), for any engine model for which no equipment has 
been certified by July 1, 1996 as meeting the requirements of 
Sec. 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 25% reduction 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 either compliance program 1 or 2, until other equipment 
is certified which triggers the 0.10 g/bhp-hr standard.
    Section 85.1403 of the program regulations requires that the post-
rebuild emission levels established in mid-1996 be the lowest emission 
level (greater than 0.10 g/bhp-hr) certified as meeting the emission 
and life cycle cost requirements. The DDC upgrade kit is currently 
certified to 0.30 g/bhp-hr for the above-mentioned 1979 through 1987 
6V92TA engines, but unless certification includes the basis of cost/
availability, it would not be considered when we establish the final 
post-rebuild levels. Other equipment is certified to 0.38 g/bhp-hr for 
the 1979 through 1987 6V92TA engines and is also certified as available 
to all operators for no more than the applicable life cycle cost. If no 
other equipment is certified in the meantime, the ``post-rebuild'' 
level would probably be set to this 0.38 level.
    Additionally, as noted above, the post-rebuild level for the 1979 
through 1987 6V92TA engines has already been established at 0.30 g/bhp-
hr (the Federal Register notice of September 2, 1994), but only for the 
first two years of the program. Therefore, if no other equipment is 
certified prior to July 1, 1996 to a lower level, and lacking any 
compelling reason not to certify this equipment on the basis of cost/

[[Page 8277]]
availability, then it would not be consistent with the Federal Register 
notice of September 2, 1994 to establish the post-rebuild level higher 
than 0.30 g/bhp-hr.

II. Information Concerning Cost and Availability

    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 its 6V92TA 
model engines having mechanical unit injectors (MUI) that were 
originally manufactured between January 1979 and December 1989. The 
effective date of certification of that DDC equipment was established 
in the Federal Register on October 2, 1995 (60 FR 51472). That 
certification is currently based on reduction in particulate matter 
(PM) of 25 per cent or more. DDC, in its notification of intent to 
certify, requests certification on the basis of cost/availability and 
guarantees to make the equipment available to all operators for less 
than the applicable life cycle ceiling (hereinafter referred to as 
``cost/availability''). 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. As explained 
above, 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 cost/availability.
    In its notification, 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 claims that 
the life cycle cost is less than $2,000 (1992 dollars) incremental to 
the cost for a standard rebuild. DDC claims that the only incremental 
cost, compared to a standard rebuild, is the cost of a blower by-pass 
valve assembly, which DDC states has a suggested price of $97.36 if 
purchased separately. DDC indicates that there is no incremental 
installation cost, fuel cost, or maintenance cost compared to that 
related to a standard engine overhaul.
    In addition to its initial request in its notification of intent to 
certify, DDC re-iterated its request that this equipment be certified 
on the basis of cost/availability in a letter to the Agency dated 
December 15, 1995, and provided updated information concerning transit 
pricing level. DDC indicates that the suggested transit list price of 
the upgrade kit is less than the suggested list price of the individual 
components, if purchased separately, that are currently replaced or 
reworked during a standard rebuild. In other words, all of the 
components of their upgrade kit, with exception of the blower by-pass 
valve assembly, are non-incremental to a ``standard'' rebuild. Other 
new information in the docket include a summary of a survey conducted 
by the American Public Transit Association (APTA) on engine rebuilding 
practices.
    Several public comments concerning cost/availability were received 
in response to DDC's notification. The following is a summary of the 
comments, along with the Agency's response, as appropriate:
    The People Moving Company of the Greater Bridgeport Transit 
District states that thirteen of its engines have been rebuilt using 
DDC's low-emission rebuild kits, and their experience has been 
positive. They support DDC's claim that the kits provide better fuel 
economy.
    The Muncie Indiana Transit System comments that the DDC kit exceeds 
the life cycle cost ceiling and does not contain all parts to rebuild 
an engine, such as rod and main bearings. Muncie, however, does not 
provide any detailed information to support its claim concerning costs. 
The comment that the kit does not contain all of the parts necessary to 
rebuild an engine, may be correct. However, there is no requirement 
that every part necessary to rebuild an engine be included with 
equipment certified under the program. The life cycle cost ceiling is 
meant to reflect costs of certified equipment which are incremental to 
costs of a standard rebuild. In particular, section 85.1403(b)(2) 
states that the purchase price of retrofit/rebuild equipment excludes 
equipment costs incurred for a standard rebuild. Therefore, to the 
extent that a component (such as a bearing) is replaced in a standard 
rebuild, it is not necessary to include the component as part of the 
certified upgrade kit, or to include its cost in the purchase price of 
the kit.
    Muncie also questions whether tune-ups and related emissions-
affecting parts are considered warranty items. The emissions 
performance and defect warranties, required pursuant to section 
85.1409, apply to all parts of the certified equipment described in 
DDC's notification of intent to certify, for the mileage intervals 
specified in section 85.1409. In its notification, DDC states that the 
scheduled maintenance and parts necessary to perform the scheduled 
maintenance are identical before and after rebuild and, therefore, 
there are no incremental maintenance costs involved.
    The Engelhard Corporation provides in-depth comments concerning the 
life cycle costs. Engelhard states that the DDC upgrade kit will exceed 
the life cycle cost ceiling, and notes three areas that DDC has not 
addressed in its life cycle cost analysis. First, Engelhard indicates 
that an engine must be removed from a bus in order to install the 
components of the DDC upgrade kit, which would require additional labor 
hours over an in-frame overhaul. Second, Engelhard states that the DDC 
kit contains additional components which are not typically replaced 
during an in-frame overhaul, including camshafts, turbocharger, 
rollers, injectors, heads, and valves. Third, Engelhard notes that 
transit operators commonly use aftermarket components which are priced 
substantially less than DDC components.
    With regard to Engelhard's first concern, the preamble to the final 
rulemaking (April 21, 1993, 58 FR 21367) is clear--the certifier may 
assume that the engine is removed from the coach during a standard 
rebuild. It is therefore not necessary for DDC to include cost related 
to removing an engine for installation of the DDC upgrade kit. Second, 
the Agency believes that the parts, which Engelhard refers to as 
``additional'' and not typically replaced during an in-frame overhaul, 
are emission-related components. The Agency believes that it is not 
unreasonable to include emission-related components in a kit because it 
provides assurance that engines so rebuilt will result in a known 
condition and a known engine emissions configuration, both of which are 
important to in-use emissions performance. Further, DDC indicates that 
all of the parts in its kit, with exception of the blower bypass valve 
assembly, are normally replaced at engine overhaul.
    Third, the cost differential related to use of aftermarket parts is 
addressed by a cost analysis presented by Engelhard. Engelhard provides 
an analysis of the cost of a rebuild using aftermarket parts, and 
compares it to the purchase price of the DDC kit added to the cost of 
the labor required to remove and install an engine. This comparison 
indicates that the difference in costs is greater than the life cycle 
cost ceiling of $2,000. The Agency notes, however, that when the engine 
removal/installation costs are not included pursuant to the above 
discussion, the cost differential is less than $2,000. Therefore, this 
data does not substantiate Engelhard's claim that the life cycle cost 
ceiling is exceeded. 

[[Page 8278]]

    Copies of the DDC notification, DDC's letter to the Agency dated 
December 15, 1995, the summary of the APTA survey, and public comments 
are available for review in the public docket located at the address 
indicated above.
    Today's Federal Register notice announces that information is 
available for public review and comment, and initiates a 45-day period 
during which comments can be submitted. The Agency will review this 
information, as well as comments received, to determine whether 
certification of the DDC equipment should be expanded to include the 
basis of cost/availability. If the Agency expands the certification of 
this equipment to include the basis of cost/availability, then the 
certification emission levels of the equipment will be considered by 
the Agency when it establishes final post-rebuild levels as required 
pursuant to 85.1403(c)(1)(iii). DDC's upgrade kit is certified to 
emission levels of 0.30 g/bhp-hr for 1979 through 1987 model year 
6V92TA MUI engines, and 0.23 g/bhp-hr for 1988 and 1989 model year 
6V92TA MUI engines. If either or both of those certification levels are 
established as post-rebuild values, then operators complying with 
compliance program 2 would use such levels, as appropriate, in 
calculations for determining fleet target emissions for 1998 and 
thereafter.
    At a minimum, EPA expects to evaluate this notification of intent 
to certify, and other materials submitted as applicable, to determine 
whether there is adequate demonstration of compliance with the cost/
availability requirements of Sec. 85.1403(b)(2) and Sec. 85.1407(a)(2), 
including whether the data provided by DDC complies with the life cycle 
cost requirements.
    The Agency requests that those commenting also consider the 
regulatory requirements, plus provide comments on experience and/or 
knowledge related to rebuilding DDC 6V92TA MUI engines, including the 
specific parts, respective frequency of usage in rebuilds, and costs.
    The date of this notice initiates a 45-day period during which the 
Agency will accept written comments relevant to whether or not the 
equipment described in the DDC notification of intent to certify should 
be certified pursuant to the urban bus retrofit/rebuild regulations. 
Interested parties are encouraged to review the notification of intent 
to certify and provide comment during the 45-day period. Please send 
separate copies of your comments to each of the above two addresses.
    The Agency will review the cost information related to the 
notification of intent to certify, along with comments received from 
interested parties, and attempt to resolve or clarify issues as 
necessary. During the review process, the Agency may add additional 
documents to the docket as a result of the review process. These 
documents will also be available for public review and comment within 
the 45-day period.

    Dated: February 23, 1996.
Richard Wilson,
Acting Assistant Administrator for Air and Radiation.
[FR Doc. 96-4954 Filed 3-1-96; 8:45 am]
BILLING CODE 6560-50-P