Deploying Clean Buses in Texas through Supplemental Environmental Projects (SEPs)

Texas' Houston-Galveston Clean Cities Coalition (HGCCC), housed and staffed by the Houston-Galveston Area Council's air quality group (H-GAC), is making dramatic improvements for public health and regional air quality by helping local school districts replace old diesel buses.

While school buses carry 25 million children each day, many are powered by older diesel engines that emit unhealthy pollutants. Thanks to funding from the state's Supplemental Environmental Projects (SEPs), H-GAC's Clean School Bus Project has resulted in nearly 550 new or retrofitted propane and diesel buses with lower emissions within the region. Throughout the state, the Texas Commission on Environmental Quality (TCEQ) has funded additional statewide programs to deploy new alternative fuel buses and retrofit existing school buses to meet Environmental Protection Agency (EPA)-approved emissions standards.

SEPs, which are used by the EPA and many states across the country, offer a means for environmental violation penalties to be mitigated by having violators pay penalty funds directly toward environmentally beneficial projects. These projects encourage environmental and public health protection measures that may not otherwise have been addressed in the settlement of an enforcement action. In Texas, small businesses and large companies in violation of the state's environmental regulations may offset up to 50% of a potential penalty or fine when that money is put toward an SEP. Municipalities may offset 100% of a potential penalty toward an SEP.

The Texas Clean Bus Program: A Legal Framework for Air Quality Non-Attainment Areas

The Coalition, along with H-GAC's air quality group, work with stakeholders throughout the region to connect school districts to SEP funding. There are also three other statewide SEP projects managed by TCEQ to deploy new or retrofitted buses and alternative fuels—through the Texas Railroad Commission, the Texas Association of Resource Conservation & Development Areas, and the Texas Congress of Parents and Teachers.

The Texas SEP began in the early 90s when the State of Texas enacted Senate Bill (SB) 513, providing a legal framework for air quality non-attainment areas—areas deemed to have air quality worse than the National Ambient Air Quality Standards—to establish independent Area Emission Reduction Credit Organizations (AERCOs). In 1994, TCEQ granted the H-GAC's request to establish an AERCO and promote better air quality, while mitigating the cost of compliance associated with air quality regulations.

TCEQ also pre-approved 49 local and regional projects to receive SEP funding, including the "2011-25 Clean Vehicle Partnership," which provides funding to the air quality group's AERCO to replace or retrofit old school buses with new buses or engines designed to use propane or natural gas, or new diesel engines with improved emissions controls. The Coalition helps local schools access SEP funding for buses, both through the statewide program and the regional H-GAC program.

Turning Environmental Crimes into Cleaner Rides

Roughly 25,000 school buses in Texas are more than six years old. Buses manufactured after 2010 are up to 50 times cleaner for oxides of nitrogen (NOx) and up to 60 times cleaner for particulate matter than these older buses.

To date, H-GAC has used the AERCO to help secure nearly $11.1 million in funding for clean vehicles through SEPs and Federal Congestion Mitigation and Air Quality Improvement (CMAQ) Program funding to retrofit 42 buses with emissions reduction technologies and replace nearly 500 more school buses with newer, cleaner buses. Half of the new buses are now propane, and the other half run on diesel. This has resulted in a reduction of NOx emissions in the area by 179 tons.

Additional support for the Clean School Bus Project includes funding from the EPA Diesel Emissions Reduction Act funds; state-collected Local Initiative funds; and local donations.

Success from Legal Experts, the Right People, and a High Demand for Air Quality

H-GAC Transportation Manager and Coalition Coordinator, Shelley Whitworth, attributes the success of the Houston Clean School Bus Program to several factors—including involving environmental attorneys in the process, having skilled and knowledgeable individuals on her board, and a high demand for regional air quality improvement. While working on the development of the air quality group's AERCO, Whitworth realized the significant value that environmental attorneys offer in gaining SEP funds.

"Whether they are in-house or belong to a law firm, environmental attorneys are instrumental in negotiating SEPs between respondents and the enforcement agencies," Whitworth said. "We periodically include information about our SEP program in our newsletters to keep the H-GAC Clean School Bus Program top of mind with environmental attorneys in our area."

Because clean school bus projects help the schools and reduce emissions, they are a win-win for the community. The region also covers a large pool of potential violators from many Houston Metro area oil refineries, creating a high demand for improved air quality and plenty of opportunity for SEP funds to improve bus fleets for regional public schools. Since 1998, 116 EPA enforcement actions involved SEPs in the state of Texas, resulting in about $68 million that went toward environmental projects to benefit the state and region. Additionally, Whitworth stressed that while it may not be necessary to have environmental attorneys or regulators on the board, it is necessary to have people on the board who interact with industry frequently, in order to effectively promote the program.

School bus programs are incredibly popular with respondents facing environmental enforcement actions, Whitworth said. "Almost everyone is sympathetic to the problem schools have with finding money for large expenditures—new school buses are a perfect example and offer the perfect opportunity to reallocate our region's economic resources and improve public health conditions for our children and residents."