Locomotive_eval_methods.docx

www.pca.state.mn.us Minnesota Diesel Replacement Program Volkswagen NOX Mitigation Settlement Phase 3 Freight Switcher Locomotive Repower/Replacement Grant Evaluation methods

This document outlines the methods used to develop criteria for project selection for the Minnesota Pollution Control Agency’s (MPCA) Freight Switcher Locomotive Repower/Replacement Grant round in FY 2025. All of the available funding for this grant round comes from the Volkswagen (VW) settlement. As part of Minnesota's plan for its VW settlement funds, the MPCA established overarching goals for the program. Those goals are:

Achieve significant emissions reductions of nitrogen oxides (NOX), fine particles (PM2.5), and greenhouse gases (GHGs) Benefit all parts of the state Help people and places disproportionately affected by air pollution Reduce exposures to harmful air pollutants and maximize health benefits Balance cost effectiveness with other goals As part of the MPCA’s efforts to achieve these goals, we have developed methods to help select projects that advance these priorities. We have worked with the Minnesota Department of Health (MDH) and the MPCA’s Environmental Justice Advisory Group on these methods. We will review and improve these methods as necessary in future ground rounds. The methods that will be used to evaluate and score projects submitted to the Freight Switcher Locomotive Repower/Replacement Grant Request for Proposal (RFP) are outlined here. Only applications meeting the eligibility criteria outlined in the RFP will be considered for scoring.

Scoring Criteria A 100-point scale per project will be used to evaluate eligible applications. Scores will be used to develop final recommendations.

Applications will be evaluated and ranked according to the following criteria:

· Emissions reductions cost effectiveness (47 points max)

· Environmental justice benefits (30 points max in Greater Minnesota, 20 points max in the Twin Cities Metro area)

· Vulnerable population benefits (5 points max)

· Health benefits (10 points max)

· Air pollution benefits (5 points max)

· Other (3 points max) Emissions reductions For each freight switcher locomotive submitted to be replaced or repowered, MPCA estimates the potential reductions of three air pollutants: nitrogen oxides (NOX), fine particles (PM2.5), and greenhouse gases (GHGs). We consider emissions of NOX and PM2.5 because they are the primary pollutants associated with diesel pollution and are harmful to human health. We consider GHG emissions due to their contribution to climate change. We calculate operation emissions reductions of NOX and PM2.5 and GHG reductions on a well-to-wheel basis. This means that the upstream GHG emissions impacts from electricity generation and fossil fuel production are included in our calculations.

To calculate emissions, MPCA uses data from EPA’s Diesel Emissions Quantifier (DEQ). DEQ is a publicly available tool that uses EPA-approved data sources to estimate annual and lifetime baseline (pre-upgrade) emissions reductions, post-upgrade emissions reductions, and cost effectiveness of the upgrade. DEQ estimates diesel emissions and reductions for fine particulate matter (PM2.5), carbon dioxide (CO2), carbon monoxide (CO), and nitrogen oxides (NOx).

Estimated emissions reductions are largely based on the old locomotive’s age, usage, and performance, and the new locomotive’s fuel efficiency and fuel type. Applicants supply information about the usage of their old locomotive in the application (type, annual hours of operation and fuel usage, horsepower, etc.) that MPCA uses to model the locomotive’s annual emissions. For locomotive emissions evaluations, the model year of the old locomotive will be obtained from the engine’s serial number check. If an applicant submits a locomotive for replacement that is known to have an engine model year that is different than the model year returned by a serial number check as a result of an engine replacement (example: a 2008 engine in a 1991 locomotive), the applicant must submit verification that an engine replacement took place. The applicant should also supply the accurate engine model year that should be used for eligibility verification and emissions evaluations. All new locomotives and pieces of locomotives will be evaluated as 2023 models. If any inputs required for emissions evaluations are missing from an application, the project will automatically receive zero points for emissions reductions, as MPCA will be unable to evaluate it.

Emissions reductions are calculated over the estimated remaining lifetime of the old locomotive and consider the deterioration of both the old and new locomotive over time. MPCA will use the applicant’s provided remaining life figures to calculate emissions reductions.

Emissions reductions cost effectiveness Once the emissions reductions for nitrogen oxides (NOX), fine particles (PM2.5), and greenhouse gases (GHGs) are calculated for all locomotives in the project proposal, MPCA then calculates the cost effectiveness per pollutant. Cost effectiveness is calculated by dividing the emissions reductions amounts for each pollutant by the total dollar request for the application. For each pollutant, the project that achieves the greatest emissions reductions per dollar receives the maximum number of points possible (see below for points per pollutant). All other projects are scored based on the ratio of their cost effectiveness compared to the most cost-effective project. For example, if the project with the best cost effectiveness for NOX achieves a reduction of 1 pound per dollar, that project will receive 20 points for ranking as the most cost-effective project. If another project achieves a NOX reduction of 0.5 pounds per dollar, that project will receive 10 points. This is calculated by taking the ratio of cost effectiveness (0.5 ÷ 1 = 0.5) and multiplying by the maximum number of points (0.5 x 20 = 10).

Environmental justice benefits MPCA modeling shows that low-income people and people of color are at greater risk from air pollution. Environmental Justice means that pollution does not harm one group of people more than another, that all Minnesotans benefit from the same level of environmental protection, and that everyone has equal opportunity to participate in decisions that may affect their environmental health. The MPCA is committed to investing at least 20% of the Volkswagen Settlement funds in areas disproportionately affected by air pollution in the Twin Cities Metro region, and another 20% of funds in those areas in Greater Minnesota.

The MPCA considers areas disproportionately affected by air pollution to be areas of concern for environmental justice. These areas are:

Census tracts where more than 50% of residents are people of color or Native Americans Census tracts where more than 40% of the households have an income of less than 185% of the federal poverty level Tribal lands A map of areas of concern for environmental justice in Minnesota can be found online here. This map is subject to change. MPCA will use the most current map available at the time of evaluation.

The MPCA’s environmental justice mapping tool identifies areas of concern for environmental justice at the census tract-level. However, because locomotives move around, census tracts are too small a geography to reasonably identify as a primary place that the locomotive operates. Instead, MPCA uses ZIP codes. For each ZIP code in Minnesota, MPCA has calculated the percentage of its area that is made up of areas of concern for environmental justice and considers higher population in proportion to areas of concern for environmental justice in Greater Minnesota. Points are assigned to ZIP codes based on the percentage of their area that is made up of environmental justice areas. For 75 zip codes that fall in the 0-50% environmental justice areas in Greater Minnesota, zip codes that contain the 25% highest populations in Minnesota AND contain some areas of concern for environmental justice will also receive the maximum points.

In their application, applicants are asked to identify the primary and secondary ZIP codes (optional) in which their locomotive operates. The points associated with the primary and secondary ZIP codes are weighted at 75% and 25%, respectively, and are then summed. If only the primary ZIP is given, its score will be weighted at 100%. Only one primary and secondary ZIP code per project should be provided. If the ZIP code information is missing from an application, the project will automatically receive zero points for environmental justice benefits, as MPCA will be unable to evaluate it. If a project is estimated to increase rather than decrease NOX or PM2.5 emissions, the project will receive zero points for environmental justice benefits.

For each ZIP code in Minnesota, MPCA has also calculated the primary county in which it is located. MPCA will determine whether a project is in Greater Minnesota or the Twin Cities Metro area based on the primary county associated with the primary ZIP code.

Vulnerable population benefits Up to 5 points will be awarded to each replacement project based on responses to the two vulnerable population questions. Applicants should answer both questions for each requested locomotive replacement on the application.

Health benefits To consider the potential health benefits of reduced diesel pollution in a community from a project, an inter-disciplinary team at MDH worked to develop a science-based method for identifying areas of the state overburdened with air quality-related health concerns. MDH relied on multiple MDH data sources, covering representative health conditions that can either be worsened by air pollution exposure or make individuals more vulnerable to air pollution exposure.

MDH considered a variety of health indicator data and among these selected indicators that best and most uniquely represent health vulnerability to air pollution exposure. The four health indicators they selected – respiratory and cardiovascular diseases, adverse birth outcomes, and obesity – are summarized in Table 1. For data privacy reasons, health data is available at the ZIP code level for the Twin Cities Metropolitan Area, but only at the county level in Greater Minnesota.

Table 1. Indicators included in health burden index

*Note that data sources for the obese/overweight indicator are different for Metro zip codes versus Greater MN counties, due to data availability and resolution.

MDH staff determined that a health burden index was the best way to combine multiple important conditions in a single health metric for scoring project applications. They calculated the index using standard public health methods. They calculated quartiles for each indicator, and assigned a 1, 2, 3, or 4 depending on the quartile, with 4 being the highest health burden category.

For example, if the rate of asthma emergency department visits in a given county fell above the overall statewide 75th percentile, or in the top quartile, then that county would be assigned a score of 4 for the asthma indicator. The quartiles were calculated separately for Greater Minnesota counties and Twin Cities Metro ZIP codes. The scores assigned for each of the four indicators were then summed for each geographic area. The index range is 4 to 16, with higher scores indicating higher health vulnerability to air pollution. For simplicity, they created three score categories – 0, 5, and 10 – each containing the same number of counties or zip codes. Each Greater Minnesota ZIP code was analyzed to determine its primary county (the county making up the majority of its area) and was assigned the same score as its primary county.

Detailed information about each of the health data sources can be found on the MN Public Health Data Access Portal.

In their application, applicants are asked to identify the primary and secondary ZIP codes (optional) in which their locomotive operates. The points associated with the primary and secondary ZIP codes are weighted at 75% and 25%, respectively, and are then summed. If only the primary ZIP is given, its score will be weighted at 100%. Only one primary and secondary ZIP code per project should be provided. If the ZIP code information is missing from an application, the project will automatically receive zero points for health benefits, as MPCA will be unable to evaluate it. If a project is estimated to increase rather than decrease NOX or PM2.5 emissions, the project will receive zero points for health benefits.

Air pollution benefits Reducing emissions anywhere is beneficial for the environment and human health, but reducing emissions in areas that tend to have more air pollution than others has the additional benefit of decreasing the level of exposure to pollution in those areas. To consider the locational benefits of reduced NOX and PM2.5 emissions in different parts of the state, the MPCA developed a method to score projects based on modeled air pollution concentrations in areas where a new locomotive will operate and reduce emissions.

Because it is not feasible to monitor air quality on every block in the state, the MPCA uses its MNRISKS model to understand potential air pollution concentrations at a fine scale. The MNRISKS model uses reported and estimated air pollution emissions from all kinds of sources, including traffic, along with meteorological and topographic conditions and modeled understanding of chemical reactions in the atmosphere to estimate air pollution levels across the state.

Using MNRISKS, MPCA produced two modeled air pollution concentration maps for the state: one for NO2 and one for PM2.5. Each ZIP code in Minnesota was then analyzed to determine the maximum pollution concentration of each pollutant within its area. Using federal Air Quality Index (AQI) breakpoints, MPCA classified each ZIP code’s maximum concentration value into the six AQI categories: “good”, “moderate”, “unhealthy for sensitive groups”, “unhealthy”, “very unhealthy”, and “hazardous”. The AQI breakpoints are pollutant-specific, and are established by the US EPA through the National Ambient Air Quality Standards (NAAQS). ZIP codes were assigned 0 to 2.5 points (at half-point increments) for each pollutant depending on the AQI category of the maximum pollution level within the ZIP code’s area. AQI categories corresponding to higher modeled concentrations were assigned more points. The points each ZIP received for each pollutant was summed for a maximum possible total of 5 points for air pollution benefits.

Table 2: ZIP code points for modeled air pollution concentrations

In their application, applicants are asked to identify the primary and secondary ZIP codes (optional) in which their locomotive operates. The points associated with the primary and secondary ZIP codes are weighted at 75% and 25%, respectively, and are then summed. If only the primary ZIP is given, its score will be weighted at 100%. Only one primary and secondary ZIP code per project should be provided. If the ZIP code information is missing from an application, the project will automatically receive zero points for air pollution benefits, as MPCA will be unable to evaluate it. If a project is estimated to increase rather than decrease NOX or PM2.5 emissions, the project will receive zero points for air pollution benefits.

Other scoring criteria An additional 3 points will be awarded to projects whose applicants are registered with the Minnesota Department of Administration as a veteran-owned, economically disadvantaged, or targeted group business owned and operated by women, minorities, or persons with a substantial physical disability. A list of registered businesses can be found at https://mn.gov/admin/business/vendor-info/oep/sbcp/.

image1.png