Companies Blow Their Caps Over Pollution Rule

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Hundreds of local businesses are steaming mad over a court-imposed freeze on permits issued by the South Coast Air Quality Management District for new or expanded facilities that add emissions into the atmosphere.

The freeze, which could last through the end of this year, affects smaller businesses that need to buy credits in order to obtain permits for additional equipment or new facilities. Because the companies couldn’t afford the credits, with prices as high as $2 million for a single piece of equipment, the AQMD set up a bank that distributed the credits free or at deep discounts.

The freeze began in November after environmental groups prevailed in a lawsuit and Los Angeles Superior Court Judge Ann Jones ordered the district to stop issuing discounted pollution credits under the cap-and-trade program.

Environmental groups had contended that handing out discounted credits defeated the purpose of the cap-and-trade program, which was to force the cost of credits to rise to the point where making the emission reductions would be cheaper. Facilities that received free or discounted credits, they argued, were getting a free ride and being allowed to pollute without paying the full cost.

The lawsuit itself stemmed from a 2001 decision by the air district to include power plants in the discounted credits program; this step was taken at the height of the state’s power crisis when then-Gov. Gray Davis lifted environmental barriers to the construction of new power plants.

Jones’ ruling blocked permits for hundreds of facilities that were seeking to upgrade equipment or expand. Those facilities range from print shops seeking to install new presses to auto body shops looking to add spray paint booths. And because construction contractors were also denied new permits, some public sector projects have also faced delays.

“The result has been devastating, far beyond what we believe Judge Jones intended,” said Bill LaMarr, executive director of the California Small Business Alliance, which represents several trade organizations in their dealings with state and local elected officials and regulators. “I’ve got members who are telling me that they’ve had to place upgrades on hold; some have even laid people off because of this.”

One alliance member, William McKenna of G.M. Platinum Coachworks, an auto body shop in Covina, said Jones’ ruling wasn’t reasonable.

“This ruling appears to have not been carefully considered as to the ripple effect it will cause through not only my industry, but many similar industries, and the overall economy,” he wrote to the AQMD.


Companies Fined

The U.S. Environmental Protection Agency last week announced six-figure fines against two L.A.-area companies on charges of violating hazardous waste and toxic chemical notification laws.

A fine of $241,290 was levied against Angelus Sanitary Can Machinery Corp. of Los Angeles for allegedly failing to submit timely reports on the use of toxic chemicals as required under the Emergency Planning and Community Right-to-Know Act. According to the agency’s press statement, Angelus uses cobalt, chromium, copper, nickel and manganese to make machinery for can manufacturers.

Calls and e-mails to Angelus executives were not returned.

The other fine of $150,000 was given to Compton metal finishing company Alloy Processing for allegedly failing to comply with federal hazardous waste management regulations. Among the hazardous chemicals used by Alloy Processing is chromium.

The agency alleged that Alloy Processing failed to submit reports every two years as required, stored some hazardous waste without a permit and failed to implement a personnel training program to handle hazardous waste.

But John Allen, an attorney with the law firm Allen Matkins Leck Gamble & Mallory LLP who represents the owners of Alloy Processing, disputed the EPA’s version of events. Allen said the company was subject to a random inspection as part of an audit of chrome-plating facilities, and that some of the violations stemmed from differing interpretations of the regulations.

Allen said the company did not admit liability under the settlement agreement.


Rack ’em Up

In what is being called a cost-driven move, the city of L.A. Bureau of Street Services has proposed nearly doubling the newsrack permit fee from a current $21.69 per rack per year to $39.49 over the next three years.

In making its argument to raise the fee, the bureau said the city is currently subsidizing more than two-thirds of the cost of its inspection and compliance program, which includes making sure publishers bring outdated newsracks up to code. The fee increase covers all of the 23,000 newsracks in the city and would bring in an additional $410,000 per year to the bureau’s coffers when fully implemented over the next three years. That would fund an additional five positions for the bureau.

The first hike of $5.93 per newsrack will hit July 1.


Staff reporter Howard Fine can be reached at [email protected] or at (323) 549-5225, ext. 227.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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