Two New Links

I added a couple of links over to the side. One is for the H-GAC's regional TERP program and the other is for the HDVEGP round that the NCTCOG has been offering.

At last check the HDVEGP round in North Texas is down to about $2 million dollars remaining.

TERP Consultant Sentenced to 5 Years in Prison

From an email from the TCEQ:

The Texas Commission on Environmental Quality today announced the recent conviction of a Denton County man, as a result of a forgery investigation conducted by the TCEQ Environmental Crimes Unit.

On Nov. 24, 2009, Claude Dean (C. D.) Stang, owner of Texas Grant Writers, of Aubrey, Texas, was sentenced to five years in prison for his role in forging signatures on the condition and use forms on Texas Emissions Reduction Plan grant applications. Stang pleaded guilty to one count of engaging in organized criminal activity. The investigation found that Stang not only forged signatures but also had other employees forge signatures on the forms and generated fraudulent quotes on equipment that was to be replaced.

The email also said Stang charged $600 to file an application which is in no way illegal, but it caught my eye since folks paid that PER MACHINE whether the grant application was approved or not.

I really would not take this as a sign that the TCEQ is itching to prosecute people. This looks like a crackdown on somebody trying to cheat the system since both Stang and his employees forged documents and signatures.

Don't be nervous that if you transposed a couple of digits in a serial number or if you end up using a machine mostly in Tarrant County instead of Dallas County that police are going to kick your door in. (Note: they do request notice if your machines operating counties change)

In every instance I've seen when an applicant does everything he can to be up front and accurate the state works with them including adjusting when annual hours of use cannot be met because of the economic slowdown.

Still, this needs to be a message to everybody that they do monitor the system and that we should all make an honest effort to work within the rules.

Official Notice On Rebate Grants

As a follow-up to the previous post, I just got an email that included this:

The Texas Commission on Environmental Quality (TCEQ) has received a sufficient number of applications to award the money allocated this fiscal year to grants under the Texas Emissions Reduction Plan (TERP) Rebate Grants Program. Therefore, the rebate grant round is closed and applications will no longer be accepted for this application period.

Successful applicants will be provided a signed contract soon. Unsuccessful applicants will be notified in writing over the next several weeks.

And then this:

New funding opportunities will be available in early 2010, including a special rebate grant round funded through a federal grant. New grant information will be posted on our Web site at www.terpgrants.org as details become available.

For the most part that isn't anything new, but I wasn't sure if the ERIG round previously mentioned would be accompanied by a rebate round. It sounds like it will and the money will be supplied by the feds. Who knows, maybe those are stimulus dollars like the ones that helped fund the round we have going with the NCTCOG right now.

Rebate Funds Exhausted For This Round

I just got off the phone with the state. They had not updated their remaining funds graphic on their website since 11/25/09 and it said they still had $3.3 million or so left, but that figure is no longer accurate.

They should be updating it soon, but if you're planning to file on a rebate grant you've missed your chance for this round. As of now they've committed all the funds.

You next chance is to file an application on the ERIG round that is supposed to be coming up in February or March of 2010.

If you tend to use your equipment a significant amount each year then the ERIG is a better choice for you anyway. The main drawback is that you commit to that number of hours and are expected to run the machine that much over the life of the grant term.

Rebate Grant Money Remaining

$4,531,444 as of today so you can see the direction this is going.

Unless there's a change we're looking at 1-2 weeks left at the current rate unless they increase the funding available. That's not unheard of, but unlikely. I haven't heard any indication this will happen.

If you are wanting to apply for a grant then your next chance after this money runs out will be the ERIG round that is expected to open in February or March.

If you run your current piece of heavy equipment 2,000 hours or so a year it would be worth your while to wait for that round anyway. The rebate grants shine if you're replacing a unit that runs less.

Rebate Grant Funds Remaining - UPDATE

As of today: $8,638,579

That money is going at a pretty good clip when you look at the earlier post that still had around $16 million.

What Does Tier 3 Look Like?

Just a visual to help grasp what we're working to accomplish - in addition to getting our customers grant money.

We are a Donaldson filter dealer and while going through their website our Product Support Sales Manager saw this file and forwarded it to the in-house TERP geek, me.

It shows a comparison of particulates released by diesel engines at different tier levels. The top image is on-road and the bottom one applies to off-road like the equipment we sell.

When talking about minute particulates released into the air it is nice to have a visual aid.

Watching Those Rebate Grant Funds

The current TERP Rebate Grant round will end at the end of next March or when they run out of funds, whichever comes first. As of 11/2/09 they had a shade under $16 million left.

It will be interesting to watch the rate the funds are awarded. On the one hand it's free money, but I also wonder if most of the low-hanging fruit has already been picked. That's to say, have most of the people who best fit as applicants, who understand the program and who are willing to buy already filed for what they need? Very wait-and-see.

The Rebate Grants don't saddle heavy equipment owners with a requirement of annual hours of use which sounds pretty appealing given the current economic outlook. They also have a shorter turnaround time to funding.

They also do not match the dollar value if your machines run 2,000 hours each year.

The next ERIG round is supposed to be in February or March of 2010. They normally give applicants a 3-month window to submit then take 2-3 months reviewing. If you wait until signing a Notice to Proceed to take possession of a piece that could mean taking ownership in the last quarter of 2010.

Since the Rebate and ERIG rounds are not running concurrently this time I wonder if they plan to stagger them in the future to spread out the administrative workload and to have some kind of grant round open to applicants most months of the year.

Quick Note on Rebate Grants and Rollers

We filed TERP applications in the past for people wanting to replace dirt or asphalt rollers, but they make up a smaller percentage of what we submit.

One problem is that they often run fewer hours of annual operation which is a key variable in the ERIG grant formula. Sometimes the dollars are still worth it, but not as often as we'd like.

With the rebate grant round opening we've had some interest in trying that approach from roller customers, but there's a problem. The rebate grant round has a list of machine types that are accepted and rollers are not on the list.

I don't have any official statement to reference, but I'm pretty sure that's by design. Since rollers tend to operate fewer hours a year and rebate grants do not factor that in (they use set charts) I think the state would feel like they were overpaying on those grants.

The TCEQ has talked of an ERIG round opening early next Spring so potential roller applicants may want to run an estimate now to see if that would be a worthwhile effort. It's understandably not the news some would like to hear.

Rebate Grant Round Underway

As expected the TCEQ has announced the opening of another round of TERP that includes Rebate Grants, but not ERIG.

The round covers the following counties:

Austin Area: Williamson, Travis, Bastrop, Caldwell, and Hays
Beaumont-Port Arthur: Hardin, Orange, and Jefferson
Dallas-Fort Worth: Denton, Collin, Tarrant, Dallas, Rockwall, Kaufman, Ellis, Johnson, and Parker
Houston-Galveston-Brazoria: Brazoria, Fort Bend, Waller, Montgomery, Liberty, Chambers, Galveston, and Harris
San Antonio Area: Comal, Guadalupe, Wilson, and Bexar
Tyler-Longview: Upshur, Gregg, Rusk, Smith and Harrison

That is where the machine needs to work, not where your office needs to be located. We've had customers who office in non-TERP counties get grants. What matters is where a machine operates.

The official web page shows the funding available to be $25.5 million and that is for on-road applications as well.

Rebate Grant Meeting Notes - A 60% Rejection Rate???

The TCEQ hosted a seminar today in Arlington for dealers and consultants who help people file TERP grant applications. There was a special focus on rebate grants.

The next rebate round is supposed to open in October. They did not give a specific date. It sounded like they have to hammer out some application/contract language, but they are getting close. They did confirm that there will not be an ERIG round until next year - probably in February or March.

Today's meeting was largely explaining the forms which are mostly the same. They also took questions as per usual.

The most interesting factoid of the day was this: in the last rebate grant round the TCEQ rejected 60% of all applications because at least one important field was filled out incorrectly.

In other words, likely qualified applicants either had to re-apply for funds or didn't get any at all because the person doing the paperwork made costly errors.

Until now I've held back on buyer-beware warnings when it comes to TERP grant filing assistance. Since I file for our customers it would have come off the wrong way and sounded like I am saying nobody else is qualified so you should only use ROMCO.

I want to be clear that there are other folks out there who do a good job be they consultants or dealers. Unfortunately, I've also seen people who really don't get the system and they don't exactly warn you of their shortcomings.

We all make mistakes now and then, but 60% is awfully high. The state is trying to reduce that figure by doing these classes and pointing out the items that cause the most trouble.

For the most part it's basic stuff like showing the correct grant amount, putting the correct name in a blank or checking a box here and there.

If you are letting somebody assist you in filing don't be afraid to ask them about their qualifications. When it comes time to sign read over your forms take a few minutes to check for obvious mistakes.

Rebate grant rounds usually end when the money runs out and not when the deadline is reached. Depending on when you file and the level of interest state-wide you may not get a second chance. Consider that when you or somebody else files for your grant money.

Rebate Grants Soon, ERIG Next Year

The state sent out a notice that it is preparing for the next round of TERP rebate grants. They normally send out a 30-day (at least) notice giving everybody a heads-up of grant rounds on the horizon. That notice came last week for rebate grants.

The TCEQ expects the next ERIG TERP application round to be sometime in the Spring of 2010.

And By Soon I Meant Today, I Guess

About 30 seconds ago word came down that we have a customer approval on the Heavy-Duty Vehicle and Equipment Grant Program.

We can't be sure exactly when the calls started, how far down the list they are or even how long the list is. The important part is that folks are getting the good news.

Hopefully you'll get a similar call.

More Contingency Calls, HDVEG Should Be Soon

Another customer reports being bumped from the contingency list of the most recent TERP round to being a full approval. Congratulations to those who find themselves in the same boat.

I'd be curious to see how many of those upgrades come from 2009 TERP grants being turned down and how many are from expired opportunities of previous rounds. Unforutnately, there is probably some money returning to the system from those who couldn't meet the hour requirements they submitted on their orignial TERP application.

As a side note, if you find yourself facing that problem get in touch with the state ASAP. From all reports I've gotten they do their best to work with you. In at least one case they extended the contract beyond the 7 years. They want this program to work.

As for the Heavy-Duty Vehicle and Equipment Grant Program, they should be pretty close to starting notifications. The North Central Texas Council of Governments does their monthly review so all of the earliest applicants will learn their fate all at once.

Contingency Calls Starting

If you got approved on a contingency basis on the most recent TERP grant round you may be getting a call soon - at least if you're one of the ones bumped up to receiving a grant.

A customer of ours notified us they had been on what amounts to the stand-by list and are now moving forward with the grant process after notification from the state.

Of course, not everybody will get this call, but for those who will the process has started.

Good luck.

End of the Round Drawing Near

I don't think anybody following the Heavy-Duty Vehicle and Equipment Grant Program offered by the NCTCOG thought it would last through their final deadline of March 26, 2010. In fact, it appears to be close to wrapping up.

Their website can only update official numbers. Those pass final review once a month (last update 7-24-09) so don't put stock in the posted dollar amount representing the here and now.

I talked to their office Monday and while they didn't have an exact dollar amount on hand they did give me the ballpark figure of around $1 million left.

How long will that last?

It could extend the program another week. Or a single application could take every penny of that. We've helped customers get grants that large before. It's not impossible.

This Friday's 5pm deadline could likely be the last.

Important Link I Forgot To Include

In the last post I mentioned a new grant round very similar to TERP and didin't link to the NCTCOG's page for construction equipment filing.

Well, here you go.

We've already filed some and work is underway on a few more. I'm (obviously) looking forward to hearing back on those.

TERP-ish Grant Round Opens

The North Central Texas Council of Governments and TCEQ are funding a $5 million grant round for North Texas only. It is VERY similar to the TERP setup and is called the Heavy-Duty Vehicle and Equipment Grant Program.

Eligible counties include: Dallas, Tarrant, Denton, Collin, Rockwall, Parker, Kaufman, Johnson and Ellis.

Public and private entities can apply. They are using what they call a "modified first-come, first-serve" format. We've seen this one other time in North Texas and what it means is that instead of waiting for a single deadline months from now when everybody will submit their applications all at once the state will accept them each Friday.

In other words, get your act together and get in line.

The previous occurence I mentioned allowed people to sell their old machine out of the state, but that is not the case this time. You have to scrap it, but the maximum cost per ton has been raised to $10,000 like the ERIG program.

So, while this is not a TERP grant in the strictest of terms it is about as close as you can get. The main difference is that the funding does not come from the diesel tax, but from the ARRA stimulus money.

All purchases must be complete by April 30th of next year. Since the round is currently underway any machine purchased now is eligible assuming it meets the normal criteria.

Scrapping Your Old Machine

The whole point of the TERP grant system (from the state’s perspective) is scrapping the old, dirtier unit. There was a time you could sell your old piece of heavy equipment outside Texas if the new owner agreed it would never return, but those days are long gone. Scrapping is now your only option.

Your 5- or 7-year contracted term does not begin until the TCEQ receives, processes and approves your disposition paperwork and supporting photographs. For some that may not seem like a big deal, but if you put a lot of wear on your construction equipment this is worth knowing.

Let’s say you purchased a new wheel loader the day the TERP round opened in December of last year – the first eligible day to buy – and then received your approval call in June. You already have 6 months of wear. If you wait a month or two to file your request for reimbursement and then another to officially scrap the old piece you are in the ballpark of 9 months of wear on that new loader before the term of your contract starts.

If you keep machines 10+ years or they work light duty then this isn’t such a big deal. If you expect to replace your new TERP-funded equipment as soon as your commitment ends it’s something to be aware of.

This document gives an overview of how to scrap. Page 7 has the answers to some common questions and you’ll see some photo examples after that.

Here is the disposition form you (or a consultant) will fill out and submit. It’s more or less self-explanatory, but don’t be shy about asking questions since they have to approve your disposition before starting your term.

A few customers have told me they used companies experienced in TERP scrapping to handle that part which would let you take care of disposition and selling the old iron in one step. Other customers held on to their old unit and parted it out for similar machines still running.

There's something to be said for holding on to a machine until you get the TCEQ's approval of your scrapping efforts.

Just remember you have to drill a 3-inch hole in the engine block and it cannot be through a replaceable plate. You also have to cut at least 75% of the frame in a V-cut. The closer to the cab, the better.

Don’t forget before and after pictures that include the engine plate proving that you are destroying the correct machine.

Can Local Governments Apply For TERP Grants?

Cities and counties are eligible and it would be easy to speculate that the state would like to see them taking advantage of these funds. Grant money would help municipalities stretch their budgets further and get them on board with the emission reduction stance held both in Austin and in Washington.

That having been said most of the applications we’ve helped complete have been for businesses.

One reason is that government owners usually don’t run their units for as many annual hours which directly affects the size of an ERIG grant.

If you purchase equipment at the municipal level don’t rule out the Rebate Grant program. It doesn’t punish lower hour owners and has other benefits like a faster turnaround time on the approval process.

Volvo Product Placement In New Transformers Movie

Off topic, but if you see the new Transformers movie you'll get a quick glimpse of a Volvo EC700C on a cargo ship. He's one of the Decepticons that dives into the ocean to fish out their leader and bring him back to life.

He takes one for the team when the others use him for spare parts to repair Megatron.

My first thought was that maybe Megatron is Tier IV already and they were scrapping our guy for TERP money.

I need to start leaving work at work.

When Can I Buy?

When you sell things for a living (heavy equipment and otherwise) that's a question that never gets old. It's a crucial one when it comes to TERP grants.

Buying equipment at the wrong time disqualifies it from receiving TERP funding.

In the early days of the program buyers could apply on units they purchased up to a year prior. That changed a few rounds back, but for those who don't follow the system's developments it can still come as a surprise.

Once a round starts it's open season. Not one day before.

For instance, the most recent round opened on December 20th, 2008. In that round you could apply for a grant on any equipment purchased starting on that date. If you bought an excavator on December 19th, 2008 then it was not eligible for that round.

Most people applied and waited for the results before buying which is completely understandable given the current economic climate.

So who can buy right now and be TERP eligible?

• Those approved in the most recent round that ended February 20th, 2009.
• Those approved in previous years' rounds who either have time left on their original contract or an official extension from the state.

If you plan to apply for a TERP grant on a machine next time around you cannot complete the purchase right now or anytime before the state announces they're accepting applications.

Now What?

What should you be doing now?

If you've been approved for a TERP grant I'd suggest checking out this area of the TCEQ's TERP site.

You can get a look at how the process unfolds and have some kind of understanding even before the state's packet hits your doorstep. Their pdf files go beyond just the next step which is signing the contract accepting the grant.

If you're unsure of your status because no call has come as of yet you can be patient and continue to wait or - if you're ready to move forward on a purchase ASAP - you can call the help line the TCEQ set up. That number is 800-919-TERP (8377).

I only mention waiting because I know they have a long list of people to contact and if you're in a holding pattern as far as buying anyway you can save those folks some time and effort.

If you got approved on a contingency basis I honestly don't know what you can do other than wait.

In the previous post you saw the breakdown. You may still end up with a grant if those approved outright turn down their funding. The question is: how soon could that be?

We have seen customers in all three situations. If I hear of somebody on the contingency list being bumped up to grant recipient I'll post it here. If you or somebody you know gets moved please feel free to tell me what you can via comment or email.

Who Was Approved?

This is the breakdown according to the state:

• They received 1,054 TERP grant applications.
• 806 applications met the specified criteria to be considered for funding.
• 217 of those were offered TERP grants.
• 106 others were held as contingency options.

That means there are 106 applications essentially on hold and they will be funded as any of the 217 approvals decide to decline their grant.

Although I don't have the exact breakdown for the last few years I'm pretty confident the percentage of funded applications took a dive this time.

This round was not one of the larger ones in terms of dollars available and as interest has grown so has the level of competition. Having more requests than money will do that.

Congratulations to those who received approval.

The Calls Have Started

A customer has contacted us to report he's been approved.

I'm not sure what the cost/ton cutoff is since that company actually went in at one of the lower numbers we submitted. I have a call into the state and will know more later.

For now the main thing is that the calls have started.

I don't know what order, if any, they call people in, but if you don't hear from them today don't get too worried. They usually have a lot of folks to contact.

When we do get a cutoff on the cost/ton remember that you have to meet the other program guidelines. If you submitted a cost/ton lower than the cutoff on your TERP grant application you aren't 100% locked in for a grant. You have to meet all the guidelines they lay out.

Location, Location, Location

A customer called with a good question today. His office is not in one of the EPA’s non-attainment counties, but his job site is. Can he apply to replace his machines under the TERP grant rules?

Yes.

Pushing paperwork around the office doesn’t really produce emissions. Pushing tons of rock and dirt around the job site does. The state cares where the machine operates.

If you aren’t sure which counties are eligible you can take a look at our TERP overview page. The state’s TERP page also lists these.

Before you apply for a round it would be worth your while to verify that your county is on the list.

When Does The Clock Start?

Let’s say you applied for TERP funding and received an ERIG grant with a 7-year term. What exactly does that mean? When does that term officially begin?

Your 7 years (or 5 if you applied for the shorter contract length) start after you scrap your old machine and the state approves your disposition paperwork and photos.

In many cases the newly purchased piece of replacement equipment could have been on the job for months before you start the 7-year obligation. That means you’ll own and operate your equipment for the agreed-to number of hours for MORE than 7 years.

That is one reason we encourage folks to submit their request for reimbursement and disposition forms sooner rather than later, especially if they tend to put significant wear on a machine.

If nothing else be aware that your TERP grant term does not start the day the new machine arrives at your location unless you have already gone through the steps previously mentioned. That’s not the norm since people usually want their old units running up until the day the new one can take its place.

Do State TERP Inspectors Really Visit Job Sites?

Yes. I can't be any more clear about it.

The TCEQ administers hundreds of millions of dollars through the TERP program trying to attain federal air quality standards. Just handing out checks and hoping everybody adheres to the honor system is not an option for them.

That having been said, I've never heard of the inspectors arriving on a job site with malicious intentions. For the most part they want to verify the information in your application.

Did you scrap the machine you said? Is the new machine the kind you filed on your reimbursement? Is it working in the place and the number of hours listed? If you're behind on hours can you anticipate making them up?

They want to know if you relocate the unit. They track emission reductions in each county and want their math to be correct. They REALLY want to know if you take a TERP-funded machine to a county not included in the program.

I've heard stories of TERP administrators on a job site helping answer questions and assisting with paperwork.

The point here is that they have a job to do and expect grant recipients to follow the guidelines. You should take their visit seriously answer their questions, but I've never heard of them being "out to get" anybody, especially those doing their best to follow the rules.

The visits are random and the inspectors spread out across the state trying to visit as many people as possible, but the sheer volume of grant recipients keeps them from reaching every location. They normally call ahead before arriving.

How Big Will My Grant Be?

It’s the first question people ask when considering whether to file for a TERP grant be it the ERIG or Rebate Grant program – and with good reason. Filing is an involved process and it should be worth your while.

Here's a brief overview. The two programs take different approaches.

Rebate grants use charts the state updates each round to assign a value. You only need to know the model year and horsepower of the existing unit and its replacement to estimate your grant. Rebate grants are less complicated to file, but they also will usually bring less money. If your machine normally racks up significant operating hours each year the Emissions Reduction Incentive Grant is a better paying option.

Why is that?

The ERIG system takes more factors into consideration. When doing an estimate for this program we plug in the following for both machines: NOx emission factor (determined by EPA tier level rating and range of horsepower), gross horsepower, annual hours of usage and the dollar amount you want to be paid for every ton of emission you DON'T put in the air with your newer, cleaner engine.

As you probably noticed hours of annual use is one of the multipliers. All other factors being equal a machine that operates 2,000 hours a year will receive a grant twice as large as a machine that operates 1,000 hours a year in the ERIG program. Hours of annual use do not affect the size of Rebate Grants.

When estimating what your grant would pay (if approved) you may want to leave no stone unturned and run the numbers for both programs, especially if you are new to this.

I can tell you that normally people who run machines around 600 hours a year do better filing Rebate Grants. People who run machines 1,500 hours or more get more from ERIG. That having been said, it's doesn't hurt to run the numbers on both to be sure, especially if your hours fall somewhere in between.

Again, here is the info you needed to do a TERP estimate:

Rebate Grant
Old/existing unit's (engine) model year
Old/existing unit's gross horsepower
New/replacement unit's (engine) model year
New/replacement unit's gross horsepower

ERIG
Old/existing unit’s (engine) model year
Old/existing unit’s gross horsepower
Old/existing unit’s annual hours of usage averaged over the last two years
New/replacement unit’s (engine) model year
New/replacement unit’s gross horsepower
New/replacement unit’s projected annual hours of usage
NOx rating for both machines*

*This is determined using the model year and horsepower. If taking advantage of our free estimates this is not required - we'll use the other info and plug the rating in.

Finally, sometimes it is helpful to have serial numbers for the estimate. If you aren't sure of a model year or horsepower then a reference guide can help you see where one model year ended and the next began.

If you decide to file you'll need the serials for the unit and the engine anyway.

What Is This Place?

I probably should have started things off with a quick introduction. Yesterday’s post was an update on the most popular question I get as of late, “Has the state announced anything on this round yet?”, and I wanted to put something out there.

That’s pretty much the purpose of this website, answering some of the more common questions about the TCEQ’s TERP grant system and giving updates as new information becomes available. Since we sell heavy construction equipment expect the focus to be on off-road machinery. Some information in future posts may apply to things like on-road haul trucks as well, but if receiving grants for those products is your goal this site may not be your best resource. The state’s TERP page is linked over to the right and they staff a free help line you can call.

We first started helping customers file TERP grants in 2004-2005. The program has evolved quite a bit and seems to be more popular than ever. Those just learning about TERP and those who haven’t had the chance to follow the changes will hopefully benefit by checking this place out.

The comments section is available, but will be moderated. For now each comment will have to be approved before appearing. If you don’t immediately see your comment, don’t worry. It’s more of an effort to filter spam than anything else. Those of you with blogs of your own will understand.

If you want to ask a question or suggest a topic, but do not want to post on the blog you can email me at pparker@romco.com with whatever TERP issue you have. I have a few topics in mind, but you input is more than welcome.

Thanks for stopping by.

Waiting To Hear

As of today still no word on the results of the latest TERP round. The deadline for ERIG applications was February 20th and it usually takes around 3 months for word to come down.

I called yesterday for a progress report and learned it could be 2-3 more weeks, but considering how fluid a situation this can be I’d take any estimate from anybody with a grain of salt.

In the state’s defense they have an absolute mountain of paperwork to sift through and many applications require follow-up to verify information.

From what they say it’s in the last stages before they start making approval calls to applicants. When word comes down that those calls have started I’ll post it here.