HOUSTON-GALVESTON AREA EMISSION REDUCTION CREDIT ORGANIZATION
MINUTES FOR THE BOARD OF DIRECTORS MEETING
Wednesday, November 7, 2012 – 2:00 p.m.
Houston-Galveston Area Council of Governments
3555 Timmons Lane, 2nd Floor, Room C, Houston, Texas 77027
MEMBERS PRESENT:
MEMBERS ABSENT (No proxy vote):
Ed Fiesinger
Brandon Greulich, TCEQ (Ex oficio) (By phone)
John J. Hebert (By phone)
John Kush
Edward Lewis (By phone)
Patrick Passantino (By phone)
Malcolm Richards
Julie Woodward (By phone)
Brandon Buell
Jeanette Rash
PROXY VOTES (Sent prior to the meeting):
Patrick Bartosh
Mark Bosma
Mary Jane Naquin
Orval Rhoads
H-GAC STAFF PRESENT:
H-GAC STAFF ABSENT:
Annette Olsen
Christine Smith
Robert Veazie
Tunisia Hardy
Shelley Whitworth
Chairman Ed Fiesinger officially called the Houston-Galveston Area Emission Reduction Credit Organization
(AERCO) Board of Directors Meeting to order at 2:00 p.m. and introduced the meeting attendees.
The meeting minutes from August 8, 2012, were reviewed, and one typographical error was pointed out. The
minutes with that correction were unanimously approved.
Christine Smith briefly reviewed the Houston-Galveston AERCO Financial Report included in the public meeting
materials, which is an active projects report. The new City of Baytown project will put four (4) Nissan Leafs on
the road.
Brandon Greulich presented the Texas Commission on Environmental Quality (TCEQ) Report on recent pricing
in the Houston area as follows:
A. Average allowance price in the Mass Emissions Cap and Trade (MECT) Program for nitrogen oxides
(NOx):




2011 vintage allowances = $157 per ton (The price has gone down from last quarter’s $343 price.)
2012 current allowances = $389 per ton
Stream of allowances (i.e., perpetuity trade) 2-year average = $79,646 per ton per year (tpy)
Stream of allowances 1-year average = $92,191 per tpy
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Houston-Galveston AERCO
Minutes from the Board of Directors Meeting
Wednesday, November 7, 2012
TCEQ received quite a few new NOx stream trades in the Houston area this quarter.
B. Average allowance price in the Highly Reactive Volatile Organic Compound (HRVOC) Emissions Cap
and Trade (HECT) Program:


2012 vintage allowances = $5,000 per ton
Stream of allowances 2-year average = $128,513 per tpy
-
The average price from the two most recently approved HRVOC stream trades (both received in
October 2012 from Enterprise Products) was $173,904 per tpy. This represents a large price increase
over the quarterly average price. The allowances for these two new stream trades are currently being
held in Enterprise Product's Mont Belview account, but will later be transferred to accounts for sites
located in Harris County.
C. Average Emission Reduction Credit (ERC) price, from ERC trades received in 2011 and 2012:


NOx ERCs = $62,129 per tpy (up from $42,532 per tpy in August)
VOC ERCs = $133,440 per tpy (up from $123,000 per tpy in August)
Recent trades increased the average price for both NOx and VOC ERCs. The most recent NOx ERC
trade was $77,000 per tpy, while the most recent VOC ERC trade was $165,000 per tpy. TCEQ
completed four ERC generation projects during this quarter in the Houston area. TCEQ expects to
receive two new project requests next week, with five currently still under review by project managers.
D. Average Discrete Emission Reduction Credit (DERC) price, from DERC trades received in 2011 and
2012:


NOx DERCs = $4,771 per ton
VOC DERCs = $1,042 per ton
These are the same prices reported during the last two quarterly AERCO board meetings. However, in
the fourth quarter TCEQ expects to complete many of the DERC intents for 2013.
During the fourth quarter TCEQ will be working on any follow-up projects in preparation for the new calendar
year. January is when they get the majority of the annual trades to comply with the MECT and HRVOC
programs.
[As promised during the meeting, Mr. Greulich has provided the following links to the following 2011 Annual
Program Reports:
 For MECT:
http://www.tceq.state.tx.us/assets/public/implementation/air/banking/reports/2011mectsum.pdf
 For HECT:
http://www.tceq.state.tx.us/assets/public/implementation/air/banking/reports/2011hectsum.pdf
Each year TCEQ develops these reports, which include allocation totals, total emissions for the year, penalties,
and trade information.]
Next, Robert Veazie advised the Board that AERCO’s SEP renewal application submitted in January to the TCEQ
is still moving up the chain, but has not been reviewed yet.
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Houston-Galveston AERCO
Minutes from the Board of Directors Meeting
Wednesday, November 7, 2012
The Board’s first action, which was to accept the six-page Financial Report from October 23, 2012, was
unanimously approved with no amendment. Chairman Fiesinger requested that future reports be page numbered.
Regarding the second action, the Board unanimously approved the $62,250 SEP designation for the Crosby
Independent School District project.
The third action was the unanimous approval of the following 2013 meeting schedule for the AERCO Board of
Directors:
1.
2.
3.
4.
Wednesday, February 13, 2013, 2:00-3:30 p.m.
Wednesday, May 8, 2013, 2:00-3:30 p.m.
Wednesday, Aug. 14, 2013, 2:00-3:30 p.m.
Wednesday, Nov. 13, 2013, 2:00-3:30 p.m.
Ms. Smith announced the Clean Fleet Technology Conference will be held next week on Thursday, November 15,
at the George R. Brown Convention Center. She asked the board members to please spread the word to their
colleagues and ask their companies to consider a conference sponsorship. [For more information, please see the
H-GAC conference website at https://www.h-gac.com/taq/airquality/citiesvehicles/cftc_registration.aspx.]
There were no public comments.
The next AERCO Board Meeting is scheduled for Wednesday, February 13, 2013, at 2:00 p.m. in H-GAC’s
Conference Room C.
Chairman Fiesinger officially adjourned the AERCO Board Meeting at 2:22 p.m.
If you have an item you wish to be added to the agenda for a
future meeting, please email your request to Robert Veazie at
robert.veazie@h-gac.com.
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