United States Region H Office
Environmental Protection 2b Federal Plaza
Agency New York, N Y 10007
EP A-902/5-84-003
August 1984
Air
vvEPA
PQ05- 1U4303
Cost-Benefit Analysis:
Heavy Duty Gasoline Truck Inspection
And Maintenance Program
New York City Metropolitan Area
-------
COST-BENEFIT ANALYSIS:
HEAVY DUTY GASOLINE TRUCK INSPECTION AND MAINTENANCE PROGRAM
NEW YORK CITY METROPOLITAN AREA
AUGUST 1984
Prepared By
Peat, Marwick, Mitchell & Co.
For
Environmental Protection Agency - Rpgion II
Air & Waste Management Division
Air Programs Branch
Project Manager: John Filippelli
-------
TECHNICAL REPORT DATA
(Hsatt rtad Initmelioni on t)it rtvtru btfort eomp
Urtng)
1. REPORT NO. S
EPA-902/5-fl4-003
3. RECIPIENT-* ACCWION NO.
PB85-104305
4. TITLE AND SUBTITLE
Cnsr-R#»n*»fHt- Analysis: HpAvy r*ity Gasoline
Truck Inspection and Maintenance Program, New
York Citv Metropolitan At-pa
8. REPOfcT OAT« '
July 1984
6. PERFORMING ORGANIZATION CODE
7 AUTHOHISI
Roger S. Figura, John F. DiRenzo
8. PERFORMING ORGANIZATION REPORT NO.
B PERFORMING ORGANIZATtON NAME AND AOORIS3
Peat, Marwick, Mitchell & Co.
1990 K Street, N.W.-
Washington, D.C. 20006
10. PROGRAM ELEMENT NO
H. CdklhACT/GRANT NO
68-02-3506
12. SPONSORING AOENCY~NAME~ANO ADDRESS
United States Environmental Protection Agency
Region II, Air Programs Branch
26 Federal Plaza
New York. New York 10278
13. TYPE OF REPORT ANO P6RIOO COVERED
Final
14. SPONSORINO AGENCY CODE
IS. SUPPLEMENTARY NOTES
18 ABSTKACT
The New York City metropolitan area (New York City, Nassau, Suffolk, Westchester,
and Rockland Counties) must implement air quality improvement strategies which,
by 1987, will enable it to achieve national ambient air quality standards for
carbon monoxide and ozone. One of these strategies is a heavy duty gasolire
truck (HDGT) exhaust inspection and maintenance (I/M) program.
The primary object of this project is to quantify and assess the costs and
benefits associated with embarking on an I/M program for HDGTs. The oost-
benefit analysis considers the economic effects on the trucking industry,
inspection stations and the general public.
The data used for the cost-bei^fit analysis is extended to provide the basis
for cost-effectiveness ccrrpar isons. This enables policy makers to view and
HDGT I/M program in relation to other air quality irprovement strategies.
17 KEY WOROS AND DOCUMENT ANALYSIS
a DESCRIPTORS
b IDENTIFIERS/OPEN ENDED TERMS
c. COSATI Field/Croup
ambient air quality, air pollution,
automotive emissions, carbon monoxide,
cost analysis, environmental iitpact,
environmental policy, hydrocarbons,
ozone, transportation, trucks
air pollution control,
New York City,
transportation costs
fields 5,6,8,13
is distribution stateme~nt
Release Unlimited
lft SECURITY CLASS (Tha Rtport)
Unclassified
21 NO OF PAGES
69
20 SECURITY CLASS (Thiipcft)
Unclassified
22 PRICE
CP* Foim 1120-1 (H,». 4-77) pk*vioui ioition l oiioliti
-------
This report was prepared as an account of work
sponsored by the United States Government.
Neither the United States nor the United States
Environmental Protection Agency, nor any of
their employees, makes any warranty, express or
implied, or assumes any legal liability or
responsibility for the accuracy, completeness,
or usefulness o£ any information, apparatus,
product, or process disclosed, or represents
that its use would not infringe privately owned
rights. Reference herein to any specific
commercial product, process, or service by trade
name, mark, manufacturer, or otherwise, does not
necessarily constitute or imply its endorsement,
recommendation, or favoring by the United States
Government or any agency thereof. The views and
opinions of authors expressed herein do not
necessarily state or reflect those of the United
States Government or any agency thereof.
-------
TABLE OF CONTENTS
Sect ion Page
EXECUTIVE SUMMARY E.l
I INTRODUCTION I•1
Objectives I•1
Scope 1.1
Limitations 1. 3
Report Overview 1.4
II HEAVY DUTY GAS-POWERED TRUCK INSPECTION/
MAINTENANCE PROGRAM OPTIONS
Present Program
Programs in Other States
Options Selected by Task Force
III COST AND BENEFIT CLASSIFICATIONS
Resource Items
Pecuniary Items
Classifying costs and Benefits
IV COSTS AND BENEFITS TO MOTOR CARRIERS
Method of Approach
Interview Results
Economic Burden on Motor carriers
Costs
Benefits
Quantification of Costs and Benefits
Costs and Benefits: Current Service
Levels Maintained IV. 5
Costs and Benefits: Reduced Service Levels IV.9
Economic Impacts IV.9
V COSTS AND BENEFITS TO INSPECTION STATIONS V.1
Method of Approach V. 1
Interview Results V. 2
Amortizing Equipment Cost V.7
Estimates of Station Participation V.9
Quantification of Cost Benefit Estimates V.ll
II. 1
II. 1
II. 2
II. 5
III. 1
III. 1
III. 1
III. 1
IV. 1
IV. 1
IV.1
IV. 3
IV. 3
IV. 4
IV. 5
l
-------
TABLE OF CONTENTS (Continued)
Section page
VI COST-EFFECTIVENESS OF A PROPOSED HDGT
I/M PROGRAM VI. 1
Cost-Effectiveness Estimates for HDGT Program VI.1
Caveats, Limitations, and Further Discussion
of cost-Effectiveness Estimates VI. 3
Cost-Effectiveness Comparisons with Other
Control Measures VI.8
-------
LIST OF EXHIBITS
Exhibit Page
E-l Cost and Benefit Items E.3
E-2 Proposed HDGT I/M Program Options E.4
E-3 Economic Burden on Motor Carriers--Current
Service Levels Maintained E.6
E-4 Economic Burden on Motor Carriers—Reduced
Service Levels E.7
E-5 Costs and Benefits to Inspection stat^ns--
Current Service Levels Maintained E.ll
E-6 Costs and Benefits to Inspection Stations--
Reduced Service Levels E.12
E-7 Cost-Effectiveness of Other Pollution
Control Strategies E.14
II-l Cut-Points for Arizona and Oregon HDGT
I/M Programs II.3
II-2 Cut-Points for the proposed New Jersey HDGT
I/M Program II.4
I1-3 Proposed HDGT I/M Program Options II.6
III-l Cost and Benefit Items III.2
IV-1 Motor Carrier Contacts IV. 2
IV-2 Economic Burden on Motor Carriers--Current
Service Levels Maintained IV.7
IV-3 Failure Sequence of Events with Current
Service Levsls IV.8
IV-4 Economic Burden on Motor Carriers—Reu*.ced
Service Levels IV.10
IV-5 Failure Sequence of Events with Reduced
Service Levels IV.11
IV-6 Highway Mileage and costs Incurred by Motor
carriers Relocating to a Boundary Location
ICT) to Avoid Compliance with HDGT I/M
Program IV.13
i i i
-------
LIST OF EXHIBITS (Continued)
Exhibit Page
V-l Summary of Personal and Telephone Interviews
with Inspection Stations V.j
V-2 Participation Estimates of Existing Stations
in a Proposed HDGT I/M Program V.12
V-3 Costs and Benefits to Inspection Stations-
Current Service Levels Maintained V.14
V-4 Costs and Benefits to Inspection Stations-
Reduced Service Levels V.15
VI-1 Annual Reductions in HC and CO Load VI.2
VI-2 Cost-Effectiveness Estimates—Current Service
Levels Maintained VI. 4
VI-3 Cost-Effectiveness Estimates—Reduced
Service Levels VI.5
Vl-4 Cost-Effectiveness of Other Pollution
Control Strategies VI.9
-------
EXECUTIVE SUMMARY
INTRODUCTION
The New York City metropolitan area (New York City, Nassau,
Suffolk, Westchester, and Rockland Counties) must implement air
quality improvement strategies which, by 1987, will enable it to
achieve national ambient air quality standards for carbon
monoxide and ozone. Attainment of the national ambient air
quality standards for carbon monoxide and ozone has proved
difficult in the New York City metropolitan area. Attainment of
the standards by December 31, 1987, can only be demonstrated
through reliance upon air quality improvement strategies not
normally necessary in other metropolitan areas. One of these
strategies is a heavy duty gasoline truck (HDGT) exhaust I/M
program.
The New York City Taxi and Limousine Commission and the New
York City Department of Environmental Protection have been
conducting a thrice annual emissions inspection of medallion
taxis since October 1977. The State of New York implemented a
light duty vehicle (LDV) emissions inspection program on
January 1, 1981. The program became an emissions
inspection/maintenance program on January 1, 1982, when failed
vehicles were required to be repaired and successfully retake
the test. The present program officially extends to
December 31, 1986. It is likely, however, that the program will
be continued beyond 1986. The proposed HDGT I/M program also
extends to an official date of December 31, 1986. Therefore,
the evaluation period covers two years, i.e., 1985 and 1986.
A'll cost and benefit estimates apply to a program running to
December 31, 1986.
STUDY OBJECTIVES AMD SCOPE
The primary objective of this project is to quantify and
assess the costs and benefits associated with embarking on an
I/M program for HDGT. The cost-benefit analysis considers:
. effects on the trucking industry;
. effects on inspection stations; and
. effects on the general public.
The data U3ed for the cost-benefit analysis is extended to
provide the basis for cost-effectiveness comparisons. This
ehables policy makers to view an HDGT I/M program in relation to
other air quality improvement strategies.
E.l
-------
This study examines the likely costs imposed and benefits
derived from extending the light duty vehicle emissions
inspection/maintenance program to heavy duty gas-powered
trucks. Light duty vehicles are those up to 8/500 pounds gross
vehicle weight (GVW). Heavy duty gas-powered trucks are
considered as those vehicles exceeding 8,500 pounds GVW.
The likely costs and benefits that would surface upon
implementation of an HDGT I/M program are classified in
Exhibit E-l. The first column of the exhibit lists the cost and
benefit items which would most likely surface if an HDGT I/M
program were implemented. The entries in the exhibit depict the
incidence of the costs and benefits. Where two entries appear
for a row (e.g., inspection fees), the item is incurred as a
cost by one party and generated as a benefit to the second party.
The development of costs and benefits was based on four
program options. These options were selected by the Heavy Duty
Gas Truck Task Force and are outlined in Exhibit E-2.
COSTS AND BENEFITS TO MOTOR CARRIERS
The impacts of a proposed HDGT I/M on motor carriers were
assessed through direct contact with carriers, which enabled an
understanding of their operations. The contacts were made
during March 1984. Personal contacts were developed with 19
operators, and the remaining 10 operators were contacted by
telephone.
The 29 operators had fleets ranging in size from one to
1,991 trucks. These operators possessed a total of 4,899 heavy
duty gas-powered trucks. Successful contacts included operators
of the smallest order (one truck) to the largest fleet (1,991
trucks), with representatives from all sizes in between.
Motor carriers can be expected to incur costs in four areas
due to an HDGT I/M program. These are identified as:
. inspection fees;
. repairs necessary to pass reinspection;
. truck rental costs necessary to maintain operations;
and
j . lost revenues resulting from truck downtime.
Benefits should be generated in the form of fuel economy
improvements and downtime avoided because of repairs to pass the
Emissions test.
E.2
-------
EXHIBIT E-l
COST AND BENEFIT ITEMS
INCIDENCE
MOTOR INSPECTION GENERAL
¦BENEFITS AND COSTS CARRIERS STATIONS PUBLIC
GOVERNMENT COSTS X
CAPITAL COSTS OF EMISSIONS
ANALYZER X
MAINTENANCE FEE OF EMISSIONS
ANALYZER X
LABOR COSTS X
INSPECTION FEES X X
REPAIR COSTS X X
LOST VEHICLE PRODUCTIVITY X
!IMPROVEMENTS IN FUEL ECONOMY X
i'
REDUCED DOWNTIME X
IMPROVEMENTS IN HEALTH,
ESTHETICS, PRODUCTIVITY X
-------
EXHIBIT Er-2
HtOfOSED HDGT I/M HtOGRAM CH'ICNS
Characteristic
Cptlcn 1
Cotton 2
Catlap 3
Option A
Institutional structure
Ttestirg equipment
Timing of I/M lnepectlcD
Provisions far fleet
inspection
Applicable HDGT weight
categpries
Age of H3GT
Qit points
00
HC
Decentralized: use
existing LW I/M
statlcns
Existing Hamilton
Teat Systems
Sams time as safety
Inspection
Ublt loused at one
location
All MET exceeding
8,500 lbs. GW
All model years
tone specified
failure rates (anticipated in 40 percent
first year of program)
Same
Bel sting Hamilton
Tfest Systems
Same
Same
Same
Baanpt for pre-1970 HXTIk
Kane specified
40 percent
Seme
Single Source New
Bjilpapnt
Same
Samp
Waiver policy
tkiver based on completion Same
of reasonable repairs
All mo&»l yetu£
Hxie specified
40 percent
Same
Same
Existing Jbmlltoo
Tfest Systems
Same
Sane
All model yearo
hboe specified
20 percent
Sane
-------
Costs and benefits to motor carriers were estimated using
two scenarios. The first scenario refers to current service
levels whereby it is assumed that the number of inspection
stations currently doing HDGT safety inspections will enter the
HDGT I/M program. A second scenario estimates costs and
benefits to motor carriers under conditions of reduced service
levels. Specifically, it is assumed that a large number of
stations currently providing HDGT safety inspections will not
enter the HDGT I/M program.
The magnitude of costs and benefits is largely determined
by the failure rates imposed and the ease or difficulty in
getting an emissions inspection or the repairs required to pass
a reinspection. The failure rates for the analysis were
provided by the HDGT Task Force:
. Option 1—40 percent;
. Option 2—40 percent with pre-1970 vehicles exempt;
. Option 3—40 percent; and
. Option 4 — 20 percent.
Exhibit E-3 provides an estimate
carriers in a scenario where
maintained.
of costs and Denefits to motor
current service levels are
Net cost per truck for program options 1, 2, and 3 is $116
per year. For option 4 this cost is $60 per year. Net cost per
failed truck is $286 for all proposed program options.
Costs and benefits to motor carriers were also estimated in
a scenario that specified reduced service levels. In this
scenario stations which currently do HDGT safety inspections but
do not have an emissions analyzer do not participate in an I/M
program.
Exhibit E-4 provides the cost-benefit estimates to motor
carriers in a scenario with reduced service levels. The cost
and benefit dollar estimates in Exhibit E-4 apply to a single
year. The amounts are stated in current dollars as of the first
quarter of 1984.
Net cost per truck for program options 1, 2, and 3 is $208
per year. For option 4 this cost is $106 per year. Net cost
per failed truck is $518 for all proposed program options.
I Faced with net cost impacts from a proposed HDGT I/M
program, motor carriers can react in any of several ways.
First, they can attempt to escape the costs through relocating.
Second, they can internalize the costs. Third, they can attempt
to pass costs on to consumers.
E.5
-------
EXHIBIT E-3
ECONOMIC BURDEN ON MOTOR CARRIERS
CURRENT SERVICE LEVELS MAINTAINED*
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
INSPECTION FEES * 314,860 $ 261,196 * 314,860 * 314,860
R£INSPECTION FEES 125,944 104,478 125,944 62,972
REPAIRS 2,371,160 1,967,002 2,371,160 1,185,580
RENTALS/LOST REVENUES 6,471,872 5,368,758 6,471,872 3,235,936
TOTAL COSTS *9,283,836 *7,701,434 $9,283,836 £4,799,348
BENEFITS
'FUEL SAVINGS 1,227,424 1,018,212 1,227,424 613,712
NET COSTS OF FAILURES $8,056,412 *6,683,222 *8,056,412 *4,185,636
Current service level9 refers to the number of inspection stations currently
doing HDGT safety inspections.
E. 6
-------
EXHIBIT E-4
ECONOMIC BURDEN ON MOTOR CARRIERS
REDUCED SERVICE LEVELS*
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
INSPECTION FEES * 314,860 * 261,196 * 314,860 * 314,860
RJEINSPECTION FEES 125,944 104,478 125,944 62,972
REPAIRS 2,371,160 1,967,002 2,371,160 1,185,580
RENTALS/LOST REVENUES 12,943,744 10,737,516 12,943,744 6,471,872
TOTAL COSTS *15,755,708 *13,070,192 *15,755,708 *8,035,284
BENEFITS
FUEL SAVINGS 1,227,424 1,018,212 1,227,424 613,712
NET COSTS OF FAILURES *14,528,284 *12,051,980 *14,528,284 *7,421,572
* Reduced service levels refers to stations which currently have an HTS analyzer
and do 50 or more HDGT safety inspections yearly.
E. 7
-------
Costs to motor carriers incurred as a result of an HDGT I/M
program will likely be passed on to consumers. The demand for
intracity truck service is inelastic, i.e., over a range of
prices, changes in price will not have much effect on the
quantity of service demanded.
This situation occurs because there are no close
substitutes for intracity trucking services. Other modes such
as rail, air, and water do not compete with trucks for short
haul goods movement. Additionally, performance of specialty
services (e.g., plumbing, electrical work, telephone
installations) requires special purpose trucks for which there
are no substitutes.
COSTS AND BENEFITS TO INSPECTION STATIONS
New York State Department of Motor Vehicles' records
indicated that 530 public and fleet inspection stations are
certified to do emission tests on LDV and safety inspections on
HDGT. This list was used to develop personal and telephone
contacts with personnel at the inspection stations. An
interview guide was developed to discuss similar issues with
each contact.
Key issues developed in the contacts centered on:
. station capacity to perform inspections?
. current inspection volumes; and
. interest in participating in an HDGT I/M program.
The contacts were made during February 1984. Personal
contacts were made with 35 public inspection stations and 12
fleets which self-inspect. Telephone contacts resulted in 76
additional completed interviews. An additional 17 stations
certified to do HDGT sa».aty inspe^ ions but not LDV I/M emission
inspections were contacted by telephone.
Estimates of Station Participation
The most plausible estimate of fleet station participation
in a proposed HDGT I/M program is 100 percent of those stations
which currently have and use the HTS analyzer and do truck
safety inspections. These stations have no incentive to send
trucks out for an emissions inspection as they have the
equipment and Physical layout to perform HDGT emissions
inspections m-ho
1 There are three bases for estimating participation of
existing public inspection stations in a proposed HDGT I/M
program. Each estimate is accompanied by the average number of
E. 8
-------
truck safety and emissions inspections the stations reported
they could do to derive a capacity figure for the inspection
station network.
< Perhaps the most straightforward approach to estimating
participation by existing public inspection stations is based on
the proportion of those stations contacted that currently have
and use an HTS analyzer and do truck safety inspections. Of the
111 public inspection stations contacted, all had and used an
HTS analyzer, and 85 raported doing truck safety inspections.
This produces an estimate that 77 percent of the existing public
inspection stations could participate in an HDGT I/M program.
Based on the census of stations developed by NYSDMV, this
translates into participation by 327 stations.
A second basis for estimating participation considers only
those stations that currently perform a threshold number of
truck inspections. Using 50 per year as the threshold value
eliminates 35 of the 85 inspection stations surveyed that have
and use an HTS analyzer and- currently do truck safety
inspections. This produces an estimate of a 45 percent
participation rate among existing public inspection stations.
This translates into a participation estimate of 191 existing
public inspection stations in an HDGT I/M program.
The third basis for estimating participation relates to
that proportion of stations stating that the proposed $6.50
Emissions inspection fee was sufficient to perform emissions
inspections on HDGT. Of 98 stations responding to this issue,
36 percent stated they would be willing to participate in an
tiDGT I/M program with a fee of $6.50 for emissions inspections.
Applying the 36 percent participation rate to the existing
'¦inspection stations produces an estimate of 153 stations
participating in an HDGT I/M program.
f The estimates of participation imply reduced service
levels. Current service levels are estimated at 920 stations
performing HDGT safety inspections. This consists of 327 public
stations performing HDGT safety and LDV I/M inspections, 105
fleet stations certified to perform HDGT safety and LDV I/M
jinspections, and 488 public and fleet stations performing HDGT
•safety inspections.
i
The current and reduced service levels were used to
estimate costs to motor carriers of a proposed HDGT I/M
program. Reduced service levels affect truck downtime for
inspections and the attendant maintenance repairs necessary to
pass a reinspection.
~
Quantification of Cost Benefit
•Estimates
< The inspection stations incur major costs in participating
,in an emissions inspection program in terms of equipment cost
E. 9
-------
r
and a monthly maintenance fee. Participation in an HDGT I/M
program results in small incremental equipment and maintenance
fee coats, if any. Benefits derive from inspection fees and
added revenues from repairs.
Exhibit E-5 provides estimates of costs and benefits to
inspection stations in a scenario where current service levels
ar'e maintained. Equipment costs were estimated by multiplying
the number of machines necessary to maintain current service by
th'e annualized cost per machine. Net costs are:
. $2/038/120
. $1,669,374
. $5,236,032
. $2,224,614
for Option 1;
for Option 2;
for Option 3; and
for Option 4.
Exhibit E-6 provides the estimates of costs and benefits to
inspection stations in a scenario of reduced service levels.
Stations which currently do HDGT safety inspections but do not
have an analyzer are regarded as non-participants in an HDGT I/H
program. Net benefits (costs) are:
. $687,848 for Option 1;
. $570,612 for Option 2;
. ($542,001) for Option 3; and
. $501,354 for Option 4.
COST EFFECTIVENESS ESTIMATES
FOR HDGT PROGRAM
Cost-effectiveness analysis is performed in instances where
the prime benefit defies quantification in monetary terms. In
this instance, the prime benefits are health effects stemming
from reductions in the HC and CO loads in the nine-county
metropolitan area. The cost-effectiveness measure is formed by
dividing net costs by tonnage reductions in pollution. This
results in an estimate of the cost per ton to achieve the
reduction in specific pollutants (i.e., HC and CO).
E.10
-------
EXHIBIT E-5
COSTS AND BENEFITS TO INSPECTION STATIONS
CURRENT SERVICE LEVELS MAINTAINED
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
Equipment Coats (HTS) to $2,725,968 $2,239,986 $2,725,968
Maintain Current Service
Levels for Truck Inspections
Equipment Coats (New) to $5,923,880
Maintain Current Service Levels
for Truck Inspections
BENEFITS
Fees for: Inspections $314,860
Reinspections $125,944
$261,196
$104,478
$314,860
$125,944
$314,860
$62,972
Profit Margin (15 Percent) $247,044 $204,938 $247,044 $123,522
on Repairs
Net Cost $2,038,120 $1,669,374 $5,236,032 $2,224,614
F. . 1 1
-------
EXHIBIT E-6
COSTS AND BENEFITS TO INSPECTION STATIONS
REDUCED SERVICE LEVELS
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
Equipment Costa (New) $1,229,849
with Reduced Service
• Levels
BENEFITS
Inspection. Fees
Reiaspection Fees
Profit Margin (15 Percent)
, on Repairs
Net Benefits (Coata)
$314,860 $261,196
$125,944 $104,478
$247,044 $204,938
$687,848 $570,612
$314,860 $314,860
$125,944 $ 62,972
$247,044 $123,522
$(542,001) $501,354
-------
The following presents the estimated cost-effectiveness of
the four HDGT I/M options:
COST-EFFECTIVENESS
(6/ton)i
Opt ions Current Service Levels Reduced Service Levels
HC
CO
HC
CO
1
2
3
4
$1,835
1,835
2, 409
2,348
$12 4
124
162
158
$2,507
2,512
2,728
2,531
2,
2,
$169
169
184
170
Cost-effectiveness estimates for various pollution control
strategies are compared with the LDGT I/M option in
Exhibit E-7. comparisons among control strategies should be
made with caution. First, the cost-effectiveness v-lues do not
taddress the size of pollution reductions afforded by tht various
measures. Thus, a measure with a low dollar per ton ray ,.ot
realize significant, reductions in pollutants. Additionally,
fintned strategies are associated with unknown costs.
. Second, the cost-effectiveness values have been estimated
using varied methodologies. Some estimates are naturally more
rigorous than others.
The cost-effectiveness estimates for the proposed HDGT I/M
program were in the range of $1,800 to $2, 700 per ton of HC
reduced and $120 to $180 per ton of CO reduced. These ranges
cover both scenarios, i.e., current and reduced levels of
services from inspection stations, across the four program
options.
These cost-effectiveness estimates relate to a program
running to December 31, 1986. A program with a longer time
horizon would result in declining costs which would improve the
,cost-effectiveness values. These declining costs would be a
result of adjustments by motor carriers of operations and
scheduled maintenance to ease compliance with an HDGT I/M
.program and increased service through incremental additions to
the number of stations participating in an inspection program.
Total cost includes net costs (benefits) to motor carriers
and inspection stations and $130,000 in government costs ?s
estimated by New York State Department of Motor Vehicles and
supported by information from New York State Department of
Environmental Conservation.
E.13
-------
EXHIBIT E-7
COST-EFPECTIVENESS OF OTHER POLLUTION CONTROL STRATEGIES
Cost-Effectiveness
(dollars/ton)
Measure
HC
CO
HDGT Inspection/Maintenance in NY
LDV Inspection/Maintenance in NY^-
LDV Inspection/Maintenance2
1981 Pass. Car Emission Stds.3
1984 Gas Truck Stds.4
Traffic Controls^
Transit Improvements^
Auto Coanngs®
Fabric Coatings®
Bulk Plants®*'
Gas Stations®
1,835-2,7 28
372
1,286-1,508
124-184
34
470
253
617
41
8
51
inq
6,7
14,599
1,205
40
1,382
net savings
327
Notes:
^U.S. Environmental Protection Agency, "Update on the Cost-
Effectiveness of I/M," April 1981, p. 10.
L Cambridge Systematics, Inc., "The Cost-Effectiveness of Vehicle
,Emissions Inspection and Maintenance Programs," January 1982, p.7.
3 Cost of 1981 new passenger car emission standards compared to
1975 standards; Source: USEPA, "Regulatory Analysis and
Environmental Impact of Final Emission Regulations for 1984 and
Later Model Year Heavy Duty Engines." December 1979, p. 159.
4 Ibid., p. 6. Value shown is gasoline-powered heavy duty trucks
greater than 8,500 GVW.
5 Source: 1979 SIP for Pima County, Arizona.
® Source: "Phase I Air Quality and Economic Impacts for the
-New York Metro/Hartford Regional Study," Contract 13-AQ-7718, GCA
Corp., Bedford, MA, October 1980, prepared for the National
Commission on Air Quality. Of the 13 stationary source control
measures listed in the referenced document, only the four measures
shown in this paper account individually for more than 1 percent
of 1987 expected emission requirements.
7 Net savings means cost of recovering emissions is less than the
value of the recovered product.
E. 14
-------
I. INTRODUCTION
The New York City metropolitan area (New York City, Nassau,
Suffolk, Westchester, and Rockland Counties) must implement air
quality improvement strategies which, by 1987, will enable it to
achieve national ambient air quality standards for carbon
monoxide and ozone.
Exhaust emissions from light duty vehicles in the New York City
metropolitan area are being reduced steadily through the Federal
Motor Vehicle Control Program and the State's own exhaust
inspection and maintenance (I/M) program for light duty
vehicles. According to studies by the New York State Department
of Environmental Conservation (DEC), as emissions from light
duty vehicles are reduced, emissions from heavy duty gasoline-
powered trucks (HDGT) are becoming responsible for an increasing
percentage of carbon monoxide and, to a lesser extent,. hydro-
carbon emissions. This trend is expected to continue into the
foreseeable future.
Attainment of the national ambient air quality standards
for carbon monoxide and ozone has proved difficult in the New
York City metropolitan area. Attainment of the standards by
December 31, 1987, can only be demonstrated through reliance
upon air quality improvement strategies not normally necessary
in other metropolitan areas. One of these strategies is a heavy
duty gasoline truck (HDGT) exhaust I/M program.
OBJECTIVES
The primary objective of this project is to quantify and
assess the costs and benefits associated with embarking on an
jl/M program for HDGT. The cost-benefit analysis considers:
. effects on the trucking industry;
. effects on inspection stations; and
. effects on the general public.
The data used for the cost-benefit analysis is extendec to
•provide the basis for cost-effectiveness comparisons. This
Enables policy makers to view an HDGT I/M program in relation to
•other air quality improvement strategies.
SCOPE
This study examines the likely costs imposed and benefits
derived from extending the light duty vehicle emissions
inspection/maintenance program to heavy duty gas-powered
1.1
-------
tracks. Light duty vehicles are those up to 8,500 pounds gross
vehicle weight (GVW). Heavy duty gas-powered trucks are consid-
ered as those vehicles exceeding 8,500 pounds GVW.
The study was directed by the Heavy Duty Gasoline Truck
Task Force which has representation from the following:
. United States Environmental Protection Agency -
Region II;
. New York state Department of Environmental Conserva-
tion;
. New York State Department of Motor Vehicles;
. New York State Department of Transportation;
. New York City Department of Environmental Protection;
. Ne York Chamber of Commerce and Industry;
. B. Simon Inc.; and
. Natural Resources Defense Council, Inc.
Estimates of costs and benefits were developed and analyzed
for three principal groups: the trucking industry including
fleet operations, inspection stations, and the general public.
Direct contacts were used to develop an understanding of costs
imposed and benefits generated for the truck and inspection
station groups. In addition, the two states currently operating
an HDGT I/M program, Arizona and Oregon, were contacted to
collect data regarding the experiences of existing programs.
The development of costs and benefits was based on four
program options. These options considered the following program
characteristics:
. institutional structure;
. testing equipment;
. timing of proposed I/M inspection;
I
. provisions for fleet inspection;
. applicable HDGT weight categories;
. applicable HDGT model year categories;
. cut points for HC and CO emissions; '
. failure rates; and
1.2
-------
. waiver policy.
The study relies on data from the New York State Department
of Motor Vehicles regarding a census of existing inspection
stations and a count of HDGT(s) registered in the nine-county
study area. Additionally, the study analyses are driven to a
considerable extent by the estimated failure rates proposed by
the New York State Department of Environmental Conservation and
agreed to for analysis purposes by the Heavy Duty Gasoline Truck
Task Force.
Estimates of costs and benefits are based upon economic
conditions of the first quartet of 1984. The report expresses
costs and benefits in terms of two scenarios for capturing
likely values.
Data foe other air pollution control strategies and health
effects were developed from other sources. It was not the
intent of this study to analyze all available air pollution
control strategies but to place a proposed HDGT I/M program in a
context which allows a cost-effectiveness comparison to other
known and quantified alternative strategies.
LIMITATIONS
; The primary purpose of this report is to provide estimates
of the economic impacts which may arise from implementation of
an HDGT I/M program. These estimates were developed largely
from information provided by personnel at inspection stations
and trucking operations. Although Peat rtarwick personnel made
extensive numbers of contacts with both groups, the coverage was
not exhaustive. Parties who may have provided added information
Were not contacted owing to the time and budget constraints of
the study. Other parties were contacted who did not wish to
offer any information or insights they may have possessed.
Lastly, those individuals who did participate were requested to
-------
Estimates of the number of inspection stations that may
participate in an emissions inspection program are based
primarily on existing stations which currently have an emissions
'analyzer and perform safety inspections on trucks. Addition-
ally, stations which do safety inspections on trucks were
contacted regarding possible participation in an emissions
inspection program. These later stations unanimously stated
they would not purchase an analyzer in order to participate in
an HDGT I/M program. Faced with potential loss of business,
however, this firm refusal may change.
i
The benefits to the general public in terms of the reduc-
tion in HC load and abatement of CO hot spots is based entirely
upon estimates supplied by the New York State Department of
Environmental Conservation from a previous study.
REPORT OVERVIEW
The remainder of this report consists of five sections.
Section II describes the options•studied for the proposed HDGT
:J/M program. Section III details cost and benefit classifi-
cations differentiating resource costs (and benefits) from
'transfer items. Section IV provides an assessment of the costs
and benefi.s to the trucking industry as a result of a program.
Section V assesses the costs and benefits to inspection
stations. Section VI discusses the cost-effectiveness of a
proposed program and presents the cost-effectiveness comparisons
of the proposed HDGT I/M program to other air quality improve-
ment strategies.
1.4
-------
II. HEAVY DUTY GAS-POWERED TRUCK INSPECTION/
MAINTENANCE PROGRAM OPTIONS
This section describes the current emissions inspection/
naintenance program in New York State, and programs in other
states. The section concludes with a ai&^ussion of the proposed
program options selected for study.
PRESENT PROGRAM
The State of New York implemented an emissions inspection
program on January 1, 1981. The program became an emissions
inspection/maintenance program on January 1, 1982, when failed
vehicles were required to be repaired an
-------
City Department of Environmental protection, consists of thrice
yearly inspections of medallion taxis.
PROGRAMS IN OTHER STATES
A number of states have emissions inspection programs for
light duty vehicles, most notably the neighboring states of
New jersey and Connecticut. Only two states, however, have
exhaust emissions inspection programs covering all gas-powered
trucks. Arizona has a program in Maricopa county (Phoenix) and
Pima county (Tucson). The program started in 1977. Oregon has
a program in Multinomah, Clackamas, Washington, and Medford
counties.
The Arizona program is a centralized institutional type run
by a contractor. The test fee as of July 1983 was $5.75.
vehicles for the last 13 model years are included in the
program. The Oregon program is centralized, run by the state.
The test fee as of July 1982 was $7.00. Vehicles from the 1942
model year and later are included in the program. Exhibit Il-l
provides the cut-poir.ts for heavy duty gas-powered vehicles
established by Arizona and Oregon.
Oregon tests approximately 15,000 heavy duty gQs trucks per
year under its emissions inspection program. Historically,
65 percent of the heavy duty gas trucks pass the emissions
inspection. Data on average repair costs are reported for
combined LDV and HDGT. The average repair cost for those
vehicles which fail was $26.92.1-
Arizona does not report statistics for LDV and HDGT
separately. A recent survey covering 1,700 vehicles indicates
an average repair cost of $30.25 for vehicles which failed the
emissions test.2
The neighboring state of New Jersey is currently developing
the necessary amendments to include HDGT in its emissions
inspection program. All weights and all years of HDGT would be
covered. Trucks will be inspected at the inspection stations
run by the state. The effective date of implementation is
targeted at January 1, 1985. Exhibit II-2 provides the proposed
cut-points for HDGT for the New jersey program.
1 Environmental Quality comission, Report on Motor Vehicle
Emission Inspection Program 1981-1982, State of Oregon
February 1983.
2 Fred lacobelli, Arizona Department of Health, Bureau of
Vehicle Emissions Inspection. Telephone conversation o
January 19, 1984.
-------
EXHIBIT II-l
CUT-POINTS FOR ARIZONA AND OREGON HDGT I/M PROGRAMS
Arizona
Model Year
Reconstructed
1968-1971
1972-1974
1975-1978
1979 and later
Conditioning Mode
HC CO
PPM %
700 5.25
380 3.50
300 3.00
300 3.00
300 3.00
Idle Mode
HC CO
PPM %
1,20U 7.50
750 6.50
400 5.50
350 5.00
350 5.00
Pre-1970
1970-1973
1974-1978
1979 and later
Oregon
x 4.0
x 3.0
x 3.0
x 3.0
900
700
500
350
6.5
5.0
4.0
3.0
II. 3
-------
EXHIBIT II-2
CUT-POINTS FOR THE PROPOSED NEW JERSEY
HDGT I/M PROGRAM
Idle Mode
HC CO
Model Year PPM %
Pre-1970 1,200 8.5
1970-1973 700 6.0
1974-1978 500 4.0
1979 and later 300 3.0
II.4
-------
Connecticut currently requires emissions inspections on
vehicles up to 10,000 pounds GVW. There are no plans to extend
the program to include larger gas-powered trucks.
OPTIONS SELECTED BY TASK FORCE
In order to assess the impacts of a proposed HDGT I/M
program, operating characteristics of a program had to be postu-
lated. The following program characteristics were considered:
. institutional structure;
. type of testing equipment;
. timing of I/M inspection;
, provisions for fleet inspections;
. applicable HDGT weight categories;
. applicable HDGT model year categories;
. cut-points for CO and HC emissions;
. failure rates; and
. waiver policy,
Foar options were selected for the study. Cut-points for
CO and HC emissions were not specified by the Task Force. While
cut-points are a critical characteristic of any I/M program they
are not necessary to assess economic impacts of a proposed
program. The important factors regarding cut-points are the
failure rates which result. The Task Force was able to provide
those estimates. Exhibit II-3 summarizes the four proposed HDGT
I/M program options selected as the bases for the subsequent
economic impact anayses. The proposed HDGT I/M program extends
to December 31, 1986. Therefore, the evaluation period covers
two years, i.e., 1985 and 1986.
II.5
-------
EXHIBIT I1-3
EROPOSED HDGT I/M HtOCRJW OPTIONS
Characteristic
Option 1
Option 2
Option 3
Option 4
Institutional structure
Testing equipment
Timing of lM Inspection
Provisions for fleet
Inspection
Applicable HDGT weight
categories
Age of HDGT
Cut points
00
HC
Decentralised: use
existing LDV I At
stations
Existing Hamilton
Test Systems
Same time as safety
Inspection
Unit housed at one
location
All HDGT exceeding
8,500 lbs. GVW
All model years
None specified
Failure rates (anticipated In 40 percent
first year of program)
Same
Existing Hamilton
Test Systems
Same
Same
Saae
Saa
Single Source New
Equipment
Same
Sai
Sai
Exempt for pre-1970 HDCTs All model years
None specified None specified
40 percent
Waiver policy
Waiver based on completion Same
of reasonable repairs
40 percent
Saa
Sai
Existing Hamilton
Test Systems
Same
Same
Same
All model years
None specified
20 percent
Same
-------
III. COST AND BENEFIT CLASSIFICATIONS
This section discusses the cost and benefit impacts of the
implementation of an HDGT I/M program. Two cost and benefit
categories are discussed/ resource items and pecuniary items.
These categories then serve as a classifying device to describe
the types of costs and benefits which will likely surface if an
HDGT I/M program is implemented.
RESOURCE ITEMS
Generally, resource costs occur in instances when the
labor, capital, materials, and/or entrepreneurial skills used in
an activity could be used in a different manner. Stated another
way, these costs surface when a resource has an alternative use
with a positive value. This alternative use is referred to as
an opportunity cost. Vehicle out-of-service time is a prime
example of this cost category. When a vehicle is out-of-
service, delivery time is lost, translating into lost revenues
as a result of the lost opportunities.
Benefits are classified as a resource item when
capital, materials, or entrepreneurial skills are saved
more productive as a result of an activity. This adds
resource base of the economic entity. Fuel savings are
example of this benefit.
PECUNIARY ITEMS
Pecuniary items refer to transfers of money. Although one
party benefits and another incurs costs as a result of the
exchange, there is no net gain or loss to society. Government
programs, especially those primarily intended to redistribute
wealth, are the prime examples of pecuniary items.
CLASSIFYING COSTS AND BENEFITS
The likely costs and benefits that would surface upon
implementation of an HDGT I/M program are classified in
Exhibit III-l. The first column of the exhibit lists the cost
and benefit items which would most likely surface if an HDGT I/M
program were implemented. Real resource costs (and benefits)
and pecuniary costs (and benefits) are entered in the cells of
the exhibit. The entries in the exhibit depict the incidence of
the costs and benefits. Where two entries appear for a row
(e.g., inspection fees), the item is incurred as a cost by one
party and generated as a benefit to the second party.
labor,
or made
to the
a prime
III.l
-------
EXHIBIT III-l
COST AND BENEFIT ITEMS
INCIDENCE
MOTOR INSPECTION GENERAL
BENEFITS AND COSTS CARRIERS STATIONS PUBLIC
, GOVERNMENT COSTS X
, CAPITAL COSTS OF EMISSIONS
ANALYZER X
MAINTENANCE FEE OF EMISSIONS
ANALYZER X
LABOR COSTS X
' INSPECTION FEES X X
, REPAIR COSTS X X
LOST VEHICLE PRODUCTIVITY X
, IMPROVEMENTS IN FUEL ECONOMY X
, REDUCED DOWNTIME X
IMPROVEMENTS IN HEALTH,
ESTHETICS, PRODUCTIVITY X
-------
The costs and benefits entered in Exhibit III-l are
described as follows:
. Government costs are measured by resources used,
taken as the increment above the LDV I/M program,
and incurred by the general public.
. Pecuniary benefits and costs for testing equipment
cancel out as a wealth transfer. Real costs relate
to alternative uses of productive resources, approx-
imated by the price of equipment. Cost is incurred
by inspection stations in the form of a capital
expense.
. Pecuniary benefits and costs for testing equipment
cancel out as a wealth transfer. Real costs relate
to alternative uses of resources, approximated by a
monthly fee. Cost is incurred by inspection
stations.
. Labor costs are a real cost incurred by society and
directly borne by the inspection stations. This
cost relates to the labor time necessary to perform
inspections. It is stated as an opportunity cost.
. Inspection fees are a strict wealth transfer counted
as a benefit to inspection stations and a cost to
motor carriers, the magnitude of which is determined
by the number of yearly inspections times the
proposed fee.
. Repairs to comply with an HDGT I/M program create a
wealth transfer from motor carriers to stations. In
addition, real costs in terms of labor and materials
which could be put to other uses are incurred at the
station, real costs approximated by the extent and
number of repair bills. Costs incurred oy motor
carriers are the full extent of repair bills. The
benefit to inspection stations is the profit margin
on repairs.
. Vehicle out-of-service time is a real cost in terms
of lost truck productivity, approximated by the
number of rental days required times the rental
prices for truck replacements or lost revenues. The
cost is borne by the motor carrier.
. Improvements in gas mileage cause a wealth transfer
of lost revenues from stations to decreased expenses
for motor carriers. The real benefit to society
surfaces in terms of resources saved, approximated
by improved mileage factored by estimated gas
prices. The benefit is felt, however, by motor
carriers.
III.3
-------
. Reduced downtime is a real benefit captured by motor
carriers in the form of improved productivity, which
would be approximated by ton-miles gained times
revenue per ton-mile.
. Health, esthetics, life expectancy, productivity,
and well-being are the real benefits to society,
items which defy quantification.
While from a societal view a transfer of wealth from motor
carriers to inspection stations has no impact on the resource
base, it has an impact on the future operations and profita-
bility of motor carriers, and largely determines the extent to
which inspection stations will participate in any proposed HDGT
I/M program. Since transfers of wealth have potentially enor-
mous associated effects, as described in the example above, they
will be incorporated in subsequent analyses.
-------
IV. COSTS AND BENEFITS TO MOTOR CARRIERS
This section discusses the impacts of the proposed HDGT I/M
program on motor carriers. Three major issues are addressed in
this section: responses from contacts with motor carriers are
reported, estimates of cost3 and benefits to motor carriers are
developed, and likely economic impacts on the general public are
discussed.
METHOD OF APPROACH
Peat Marwick was unable to obtain a master list of
owner/operators of HDGT. A list was constructed from phone
directories, contacts with various associations, and referrals
to fleet inspection facilities provided by the New York State
Department of Motor Vehicles. A total of 191 contacts were
made, though several contacts did not result in compilation of
usaful data. Exhibit IV-1 summarizes contacts with motor
carriers.
i
The contacts were made during March 1984. Personal
contacts were developed with 19 operators,: and the remaining
10 operators were contacted by telephone. Details of the
results of the interviews are described below.
i,
i
INTERVIEW RESULTS
The 29 operators had fleets ranging in size from one to
1,991 trucks. In total, these operators had 4,899 heavy duty
gas-powered trucks. Successful contacts included operators of
the smallest order (one truck) to the largest fleet. (1,991
trucks), with representatives from all sizes in between.
The farthest any motor carrier travels for a safety
inspection is 15 miles. Most of the carriers stated they
traveled five miles or less to the inspection station. Safety
inspections took the truck out-of-service all day for nine of
the motor carriers. The remaining respondents gave this
distribution of responses regarding the length of time the
vehicle was out-of-service due to a safety inspection:
. six hours—one respondent;
. four hours--six respondents;
. two hours--four respondents; and
. one hour--six respondents.
IV.1
-------
EXHIBIT IV-1
MOTOR CARRIER CONTACTS
CATEGORY NUMBER
Personal and Telephone Interviews 29
Motor Carriers Who Refused to Participate 27
Motor Carriers Contacted Who Had Trucks Exempt
from Proposed Program 135
TOTAL CONTACTS 191
-------
Motor carriers were asked what they do to maintain
operations when vehicles are out-of-service for safety
inspections or for repairs required to pass inspection. Moat
respondents (11) said they attempted to schedule inspections
during slack time, nine said they maintained spares, seven
rented vehicles, and two said they cut back operations.
The motor carriers were asked what might be the major costs
they would incur due to an exhaust emissions
inspection/maintenance program. The responses were:
. more frequent service/repairs—14;
. truck downtime—10;
. inspection fee—nine;
, other costs such as purchase of analyzer—four; and
. no added cost—three.
Multiple costs were mentioned in some cases, which accounts for
the total of 40 responses. When asked if they would move
operations out of the nine-county metropolitan area to avoid
compliance with an HDGT I/M program, 26 respondents stated they
would not consider moving.
ECONOMIC BURDEN ON MOTOR CARRIERS
Motor earners can be expected to incur costs in four areas
due to an HDGT I/M program. These are identified as:
. inspection fees;
. repairs necessary to pass remspection;
. truck rental costs necessary to maintain operations;
and
. lost revenues resulting from truck downtime.
Benefits should be generated in the form of fuel economy
improvements and downtime avoided because of repairs to pass the
emissions test.
Costs
The initial emissions inspection fee of $6.50 is imposed on
all trucks. Those trucks failing the emissions test will be
assessed with a remspection fee, also $6.50.
IV.3
-------
A major cost faced by those who own trucks which fail the
inspection is the repairs necessary to pass reinspection. This
analysis uses a tune-up as the typical repair necessary to pas3
an emissions reinspection. A tune-up was selected to coincide
with the emissions reductions reported in a prior study. 1
This prior study based its estimates of emissions reductions and
the resulting decreases in HC and CO loads on work done by the
New York Department of Environmental Protection, which tested
and at the least tuned 181 HDGT.2 The cost, of the average
tune-up was set at $85. This estimate was derived from a poll
of inspection stations familiar with truck repairs.
As noted in the responses from motor carriers, many stated
they would use rental trucks to maintain operations while their
vehicles were being tested or repaired. An average rental rate
of $90 per day was given by the motor carriers contacted. This
rental rate applies to straight trucks used for goods delivery
and does not reflect rates for special purpose vehicles.
Lost revenues reflect the. lost opportunities of firms
having trucks out-of-service because of an emissions inspection
or a repair to pass reinspection. Typically, this direct impact
on operations falls most heavily on service firms in which the
truck is a special purpose vehicle (e.g., electrician, telephone
service, plumber) which causes direct loss of revenues when
out-of-service. Lost revenues were reported from $45 to $120
per hour. The lost revenues apply to cases in which the service
personnel as well as the special purpose vehicle are idled due
to the vehicle being out-of-service.
When lost revenues are combined with rentals, the weighted
average is $232 per day per truck out-of-service. This weighted
average was calculated from data supplied by 15 motor carriers.
These data covered 4,062 trucks. The fleet sizes of the
operators providing data ranged from one to 1,991.
Benefits
Trucks receiving a tune-up t, pass reinspection would be
expected to derive fuel economy benefits and possibly avoid
downtime occasioned by an I/M-related failure. The fuel economy
- Radian Corporation, "An Assessment of Emission Reduction
Strategies for Heavy Duty Gasoline Powered Trucks," June 9,
1981.
2 Pinto, John J., "Study of Control Strategies for In-Use Heavy
Duty Vehicles," New York City Department of Environmental
Protection, May 1981.
IV.4
-------
benefit is estimated at $44 pec year. This estimate is based on
fuel savings of 35 gallons per year at $1.25 per gallon.1
The amount of downtime avoided would be determined by
estimating that portion of the truck population that fails the
emissions test and is given a tune-up, and which/ without the
tune-up, would have incurred an I/M-related downtime failure on
or before December 31, 1986. A benefit estimate requires
specifying a joint probability statement. The first probability
concerns failing the emissions test. This is a given at
40 percent. The second probability concerns a vehicle not tuned
that suffers a breakdown before December 31, 1986. This second
probability could not be estimated given available data.
Downtime avoided is thus a meaningful benefit but one which
escapes quantification. In comparing alternative control
strategies this benefit could be entered in the form of a
sensitivity analysis. Various probabilities (e.g., 10 percent,
20 percent, 75 percent) could be applied to the breakdown
occurrence. If a relatively small probability (e.g, 10 percent)
determines HDGT I/M to be a prime candidate as a control
alternative based on cost-effective comparison measures, it
should be seriously considered. i
QUANTIFICATION OF COSTS AND BENEFITS
Costs and benefits to motor carriers were estimated using
two scenarios. The first scenario refers to current service
levels whereby it is assumed that the number of inspection
stations currently doing HDGT safety inspections will enter the
HDGT I/M program. A second scenario • estimates costs and
benefits to motor carriers under conditions of reduced service
levels. Specifically, it is assumed that a large number of
stations currently providing HDGT safety inspections will not
enter the HDGT I/M program.
Costs and Benefits: Current Service
Levels Maintained
The magnitude of costs and benefits is largely determined
by the failure rates imposed and the ease or difficulty in
1 Radian, p. 5-11.
IV.5
-------
getting an emissions inspection or the repairs required to pass
a reinspection. The failure rates for the analysis were
provided by the HDGT Task Force:
I
. Option 1—40 percent;
. Option 2—40 percent with pre-1970 vehicles exempt;
. Option 3—40 percent; and
. Option 4—20 percent.
The ease or difficulty in getting an emissions inspection
or the repairs required to pass a reinspection is determined by
the number of stations participating in a proposed HDGT I/M
program. The extent of service determines the amount of downtime
a truck is subject to for an inspection and associated repairs.
Exhibit IV-2 provides an estimate of costs and benefits to
motor carriers in a scenario where current service levels are
maintained.1 Inspection fees were estimated by multiplying
the number of commercial trucks by the proposed fee. 2
Reinspection fees were estimated by multiplying the number of
commercial trucks that fail the initial inspection by the
proposed fee. Repair costs were derived by multiplying the
number of commercial and fleet trucks that fail the initial
inspection by the price of a tune-up. Rentals/lost revenues
were estimated by multiplying the weighted average for truck
rental costs and operators' lost revenues by the number of
commercial and fleet trucks that fail the initial inspection.
The rental/lost revenue is assessed at one day per truck
failure. Exhibit IV-3 depicts the failure sequence with a
schematic demonstrating how the one-day downtime was estimated.
The cost and benefit dollar estimates in Exhibit IV-2 apply
to a single year. The amounts are stated in current dollars as
of the first quarter of 1984.
Net cost per truck for program options 1, 2, and 3 is $116
per year. For option 4 this cost is $60 per year. Net cost per
failed truck is $286 for all proposed program options.
1 The estimate of current and reduced service levels is fully
discussed in Section V of this report. Current service levels
translates into 920 inspection stations, public and fleet.
2 New York State Department of Motor Vehicles estimates that
there are 69,740 HDGT in the New York metropolitan area, and
21,300 of these trucks are owned/operated by fleets.
IV.6
-------
EXHIBIT IV-2
ECONOMIC BURDEN ON MOTOR CARRIERS
CURRENT SERVICE LEVELS MAINTAINED*
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
INSPECTION FEES * 314,860 * 261,196 * 314,860 $ 314,860
REINSPECTION FEES 125,944 104,478 125,944 62,972
REPAIRS 2,371,160 1,967,002 2,371,160 1,185,580
RENTALS/LOST REVENUES .5,471,872 5,368,758 6,471,872 3,235,936
TOTAL COSTS *9,283,836 $7,701,434 *9,283,836 *4,799,348
BENEFITS
FUEL SAVINGS 1,227,424 1,018,212 1,227,424 613,712
NET COSTS OF FAILURES $8,056,412 *6,683,222 *8,056,412 *4,185,636
* Current service levels refers to the number of inspection stations currently
doing HDGT safety inspections.
IV. 7,
-------
EXHIBIT IV-3
FAILURE SEQUENCE OF EVENTS WITH
CURRENT SERVICE LEVELS
HDGT at Station
for Safety and
Emissions Inspection
Fails
Emi ssions
Inspection
Tune-Up Completed
In Same Day^
Truck Left for
Tune-Up on Next Day
Truck Picked Up and
Returned for Tune-Up
at Later Date
Incremental Time Incremental Time Incremental Time
Cost: Cost: Cost:
4 Hours Day 1 4 Hours Day 1
Q Hours Day 2 8 Hours Day 2
Average of 8 Hours
Notes:
* Least Probable Unless All Inspections First Thing A.M.
2 Most Probable.
-------
Costs and Benefits: Reduced Service
Levels
Costs and benefits to motor carriers were also estimated in
a scenario that specified reduced service levels. In this
scenario stations that currently do HDGT safety inspections but
do not have an emissions analyzer do not participate in an I/M
progr am.
In a case of reduced service levels, costs relating to
inspection fees, reinspection fees, and repairs do not change.
The inspection fee is $6.50 regardless of the number of
participating stations, and the repair cost refers to an $85
tune-up. The rental/lost revenue cost doubles to two days
downtime. Fuel economy benefits do not change.
Exhibit IV-4 provides the cost-benefit estimates to motor
carriers in a scenario with reduced service levels.
Exhibit IV-5 depicts the failure sequence and resulting truck
downtime for the reduced service level scenario.
The cost and benefit dollar estimates in Exhibit IV-4 apply
to a single year. The amounts are stated in current dollars as
of the first quarter of 1984.
Net cost per truck for program options 1, 2, and 3 is $208
per year. For option 4 this cost is $106 per year. Net cost
per failed truck is $518 for all proposed program options.
The costs and benefits to motor carriers depicted in
Exhibits IV-2 and IV-4 represent conditions where 920 and 191
stations respectively are available to perform HDGT emission
inspections. The 920 stations represent a condition where
current service levels in regard to HDGT safety inspections are
maintained, resulting in a net cost per failed truck of $286.
The 191 stations represent a condition of reduced service as
compared to the present station availability to conduct HDGT
safety inspections. In this case, the net cost per failed truck
is $518.
The economic burden on motor carriers is inversely related
to the number of stations which participate in a proposed HDGT
I/M program. For example, if a station's participation in the
proposed program settled at a midpoint between the current and
reduced levels of service (i.e., 556 stations) the net cost per
failed truck would be $402.
ECONOMIC IMPACTS
Faced with net cost impacts from a proposed HDGT I/M
program, motor carriers can react in any of several ways.
First, they could attempt to escape the costs through
IV. 9
-------
EXHIBIT IV-4
ECONOMIC BURDEN ON MOTOR CARRIERS
REDUCED SERVICE LEVELS*
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
INSPECTION FEES $ 314,860 $ 261,196 $ 314,860 $ 314,860
REINSPECTION FEES 125,944 104,478 125,944 62,972
REPAIRS 2,371,160 1,967,002 2,371,160 1,185,580
RENTALS/LOST REVENUES 12,943,744 10,737,516 12,943,744 6,471,872
TOTAL COSTS $15,755,708 $13,070,192 $15,755,708 $8,035,284
BENEFITS
FUEL SAVINGS 1,227,424 1,018,212 1,227,424 613,712
NET COSTS OF FAILURES $14,528,284 $12,051,980 $14,528,284 $7,421,572
* Reduced service level9 refers to stations which currently have an HTS analyzer
and do 50 or more HDGT safety inspections yearly. '
IV. 10
-------
EXHIBIT IV-5
FAILURE SEQUENCE OF EVENTS WITH
REDUCED SERVICE LEVELS
HDGT Arrives at Station
for Safety and
Emissions Inspection
Fails
Emissions
Inspection
~
Truck Picked Up and
Taken to a Different
Station for Tune-Up
Incremental Time Cost:
8 Hours Day 1
I
Truck Taken Back
To Inspection Station
For Retest
Incremental Time Cost:
8 Hours Day 2
Total of 16 Hours
-------
relocating. Second, they could Internalize the costs. Third,
they could attempt to pass costs on to consumers.
If a motor carrier could serve the nine-county metropolitan
area from a location without an HDGT I/M program, the compliance
costs could be avoided. With New Jersey's proposed HDGT I/H
program scheduled to take effect January 1, 1985, the relocation
option is less feasible. A carrier could relocate in
Connecticut where an I/M program covers vehicles up to
10,000 pounds GVW. Connecticut has no plans to extend its I/M
program to include heavier trucks.
The daily transport costs from a Connecticut location are
extremely high. As Exhibit IV-6 shows, extra cost per one-way
trip can be as high as $82.89 to serve sections of the
nine-county metropolitan area. Hence, cost savings from
avoiding compliance with an HDGT I/M program are quickly eroded
by relocating outside the nine-county program jurisdiction.
The cost analysis clearly shows relocation is not a viable
option when the markets served are the nine-county metropolitan
area. This conclusion is bolstered by responses from motor
carriers; only three of 29 stated they would consider moving to
avoid compliance.
Motor carriers would turn to the option of internalizing
costs only as a last resort. Unless they are faced with lower
cost competition they will attempt to pass costs on to consumers.
Costs to motor carriers incurred as a result of an HDGT I/M
program will be passed on to consumers. The demand for
intracity truck service is inelastic, i.e., over a range of
prices, changes in price will not have i much effect on the
quantity of service demanded.
This situation occurs because there are no close
substitutes for intracity trucking services. Other modes such
as rail, air, and water do not compete with trucks for
short-haul goods movement. Additionally, to perform specialty
services (e.g., plumbing, electrical! work, telephone
installations) requires special purpose trucks for which there
are no substitutes.
The net costs estimated represent a situation in which
motor carriers do not have time to ad]ust operations to respond
to an I/M program. Ideally, motor carriers would schedule
t'une-ups and other I/M-related maintenance or repairs
immediately before the I/M inspection, thus improving the
pass/fail rate as well as reducing the HC and CO load. By
improving the pass/fail rate, the costs associated with truck
rental/lost revenues are lessened. Additionally, if the tune-up
a'nd other I/M-related maintenance or repairs performed prior to
IV.12
-------
EXHIBIT IV-6
HIGHWAY MILEAGE AND OOSTS INOERED Ei M7TCR CARRIERS
RHDCAXDG TO A BOUNDARY LOCAHCN (CT) TO
AVOID OCMTIANCE WITH HDCT I/M PROGRAM
EESIHttnCN ACTUAL CDST/ ODSI/
CEIGTN CTif/OXKIY QO-CRDINAEE Htff MILEAGE MILE1 TRIP
I
GLfNVILIE, CT. SCARSDAIJ3/ Wilts Plains—Post Road ID.8 ml. $1.1876 $12.83
WESTCHESTER. and Bopham Road
I
NANEII/ROCKIAND Middletom Road & Church 22.9 tni. 1.1B76 27.20
Street
BRttK Broar River Parkway/Bronx IS.7 ad. 1.1876 22.21
Pelham Parkway
QUEENa/NT 00. Jamlca—RT. 678/lnterborougJa 26.9 ml. 1.IB76 21.95
Parkway
BRQ3?LXH/'KBG 00. ELatbush Boulevard/Linden 36.8 ml. 1.1B76 43.70
Boulevard
NASSAU CO. Vfeatbury^-Merrick Aveue aai 38.0 mi. 1.1B76 45.13
CUd fnrtry Road
¦i
MMHAXIAN 96th aai Riverside 28.0 mi. 1.1876 33.25
I
STAIEN ISLAM) New Springville—Travis and 51.9 mi. 1.1876 a.64
Richmond Avenues
SUFFOLK Farmingville—Long Taiand 69.8 mi. 1.1876 82.89
Expressway and Patchoque Road
1 Hertz, Public Affaire Department, "Hertz Truck Cost Studies," May 31, 1982.
IV. 13
-------
the exhaust emissions test for purposes of passing the test were
performed on an annual basis (or at least more frequently)
without an HDGT i/m program, costs would diminish.
The cost estimates, however, refer to a program with a
short life--two years. Motor carriers will not be able to react
to the I/M program in the first year simply because they won't
have any reliable history on which to base their behavior. Most
will approach the exhaust emissions test as risk-takers.
Without prior knowledge of the stringency of the test and the
attendant failure rates, rational behavior dictates that the
typical motor carrier will have trucks tested that have not been
specifically maintained or repaired in anticipation of the
test. Those carriers on a strict maintenance schedule will be
the exception in their attempts to schedule tune-ups to conform
with the exhaust emissions test.
As the program acquires a history, motor carriers will
react differently. Prior knowledge of probable failure rates
will stimulate pre-test maintenance and repairs. To acquire
tliis knowledge of probable failure requires an initial period in
which the I/M program imposes substantial economic burdens on
motor carriers, burdens which the motor carriers should act to
avoid in the future,
t
c. A member of the HDGT I/M Task Force has suggested that the
cqsts to motor carriers resulting from the proposed emissions
inspection program may be overstated. Specifically, the comment
addresses the possibility of using spare trucks or scheduling
inspections during slack time instead of renting equipment or
losing operating revenue due to truck downtime for I/M-related
repairs. Based on points cited above and elaborated on below,
it' is doubtful that costs are overstated.
!
i Generally, a spares policy is employed by larger fleets
that also conduct periodic maintenance. Trucks from these fleet
operators are less likely to fail an HDGT emissions inspection
than vehicles belonging to small operators that do not conduct
periodic maintenance and cannot afford to maintain spares.
Thus, the higher incidence of failures is , likely to fall on
those operators who do not maintain spares and will be required
to rent a replacement vehicle to maintain operations or incur
operating revenue losses.
Further, a spares policy on the part of motor carriers
requites a significant amount of capital expenditure. These
capital outlays cannot be separated to reflect allocations for
sufch items as:
. inspection requirements;
. unanticipated downtime of the regular fleet; and
XV..14.
-------
unanticipated demands for trucking services.
The cost, in economic terms, is referred to as non-separable.
In order to allocate a cost of this sort, a sensible
allocation scheme must be devised. In this analysis, this cost
of jtruck downtime to complete the necessary repairs to pass an
emissions reinspection is approximated by the average daily
rental rate/lost revenue that applies to heavy duty ga3-powered
trucks in the metropolitan area.
A second issue arises in regard to the potential for
scheduling inspections during slack time. Since the emissions
inspection itself was assessed at zero cost, other than the
$6.50 fee, the analysis implicitly assumes all inspections are
scheduled for slack time.
The assumption that unanticipated repairs occasioned by
failure of the emissions inspection will also occur during slack
time is not reasonable. The fact that the failure is not
anticipated implies that the timely remedial action required may
not conveniently coincide with further slack time.
IV.15
-------
V. COSTS AND BENEFITS TO INSPECTION STATIONS
This section discusses the impacts of the proposed HDGT I/M
program on inspection stations. Three major issues are ad-
dressed in this section: responses from contacts with inspec-
tion stations are reported, estimates of station participation
in a proposed program are provided, and the estimated costs and
benefits are discussed in quantitative and qualitative terms.
METHOD OF APPROACH
The New York State Department of Motor Vehicles (NYSDMV)
certifies stations to perform emissions and/or safety inspec-
tions on a variety of vehicle groups. NYSDMV maintains informa-
tion on the number of stations that perform exhaust emissions
tests as well as safety inspections on various sizes of trucks.
These stations were considered prime candidates to participate
in any proposed HDGT I/M program because t'hey currently have a
Hamilton Test System Analyzer, and they currently do truck
safety inspections. As such, they were considered knowledgeable
regarding the economic impacts any program might have.
Since the stations currently had an analyzer, they would
not incur the costs of purchasing the analyzer and entering into
a monthly maintenance agreement with Hamilton Test Systems.
Later in this report there is a financial analysis quantifying
the number of inspections necessary to offset the cost of the
analyzer and the monthly maintenance fee.
By focusing on stations that are certified to do truck
inspections, it is highly probable that most of the stations
have a physical layout which can accommodate trucks of various
jsizes. Additionally, if the stations currently do truck safety
inspections, they should be knowledgeable regarding the poten-
tial economic impacts resulting from extending the LDV I/M
program to include HDGT.
NYSDMV was able to identify 530 public and fleet inspection
stations certified to do emission tests on LDV and safety in-
spections em HDGT. This list was used to develop personal and
teLeohop.v cifttjcts with personnel at the inspection stations.
An interv.cv 'uide was developed to discuss similar issues with
jeach coii'-flct.
The ^.r-.itacts were made during February 1984. Personal con-
tacts were made with 35 puolic inspection stations and 12 fleets
which self-inspect. Telephone contacts resulted in 76 addi-
tional completed interviews. Interviews were completed with
personnel at stations from all five New York City boroughs and
the four counties in the metropolitan areai. The results of the
interviews are described below.
V.l
-------
An additional 17 stations certified to do HDGT safety in-
spections bat not LDV I/M emission inspections were contacted by
telephone. While this group had no experience with an I/M
program they were contacted to determine their interest in
participating should an I/M program be initiated for HDGT.
INTERVIEW RESULTS
The results of the interviews are reported for public
inspection stations. Exhibit V-l provides a summary of inter-
view responses.
public Inspection Stations
A total of 35 personal interviews and 76 telephone inter-
views were conducted with public inspection stations. Results
of the personal contacts will be reported first, as these
personal contacts resulted in more comprehensive coverage of the
issue areas.
Personal Interviews
Of the 35 inspection stations where personnel were inter-
viewed/ all currently performed exhaust emissions inspections.
They ranged from 50 emissions inspections per year up to 3,500,
&ith an average of 826.
Safety inspections of trucks were performed by 31 of the
stations. Trucks of all sizes can be accommodated by 18 of the
stations. The stations did from four to 550 truck safety in-
spections per year with an average of 139. Almost all of the
stations schedule inspections whenever possible, rather than on
specific days or during specific hours or on demand.
The stations reported that truck safety inspections re-
quired from 15 minutes to 60 minutes. The average time was
calculated at 38 minutes. The exhaust emissions inspections
were reported to take from two to 30 minutes, with an average of
13 minutes.
Of those responding, 24 reported that no modifications
would be necessary to accommodate HDGT fox an emissions test.
rThe eight stations that stated a modification was necessary
'could get by with the non-structural procedure of moving the
^machine nearer the overhead door and brinqinq the nose of the
truck in to be tested.
V. 2
-------
exhibit V-l
SWMARJ OF PStSCNftL AND TELEPHWE JNTSWIBJS
WITH DEJECTION SIAIII»S
ISSUE AREA
Number of Exhaust ftrtwrimfl
Tfeets Done Ffer Year
) J
Mjmter of Truck Safety
Inspecdoca Ii»e Iter Year
Number of Truck Safety and
Brtiaust iMciHiTm Inspections
that Station Could Do Per Year
Are Station MsdlflcatLcns
Necessary to Perform Magjonn
Intpjectlacts on HDGT?
1b the UN iM ftogram
Profitable?
I,
HovMoch. Extra ftisltyflfi Dses the
LWI/M Program Generate?
Ia a Proposed S6.50 Fee Adequate
for' an HEGT BaLsslon inspection?
j
Vtoat Would fie an Adequate Fee far
an HEGT IMiwinna Inspection?
WLiat Would Be an Adequate Pee far
a Omhlned Safety and Baisstms
Inspection of an HDGT?
Would 'Yew Participate in a Program
IWiCh Required Rathaae of Jfew
Bnissions Test Equipment?
;a
What Pro hi pub Da You Foresee in
an,HDGT I/H Program Lbing HIS
Equipment?
EAN5E OF RESPONSES AVEEAGE OF RESPONSES (XMBINEL CEKBEJED
PERSONAL TELOTtNE PffiSCNAL TELEEHUE AVERAGE TOTAL
50-3,300 42-3,600 826 780
4-530 2-1,200 139 138
0-6,240 0-3,600 760 315
6-^8
24-Nd
14-lfes
17-Jb
0-7 St
12-Yea
20-N>
413-35
t20-40
O-Tfea
17-to
UHto
Problems
24-dted
Cbe or
Hare
ProhLana
34-lfea
42-No
38-fea
35-No
0-251
23-%b
43-No
6.0-20
ia.ft-75
CKfcs
69-fo
26-Na
ProhLeme
49-ated
Che or More
Problfnw
UX
$16
430
&3
$26
794
139
482
9X
42-Tfea
66-fb
51-^fea
52-*to
35-Tsh
63-Nd
tl5
$27
0-fts
86-ito
36->fo
ProhLems
73-d ted
One or
More
ProhLems
V. 3
-------
Under the current LDV I/M program, 19 stations reported
that a carburetor adjustment was necessary £or those LDVs which
failed an initial inspection. Other typical repairs reported
were:
. tune-up—three stations;
. replace PC valve—five stations;
. replace air filter—five stations.
The cost of repairs for an LDV failing the initial emissions
inspection fell into the following ranges:
. $1 to $10, reported by 12 stations;
. $11 to $25, reported by 10 stations;
. $26 to $50, reported by five stations;
. $51 to $100, reported by seven stations; and
i
. $100 plus, reported by two stations.
In addition, two of the stations stated that they did not gen-
erally charge for repairs which were minor in nature (e.g.,
turning an idle screw) performed on an LDV belonging to a
regular customer. A vast majority of the stations reported that
90 percent of the repairs required for an LDV to pass a rein-
spection were completed within the day.
The stations are almost evenly divided regarding the
profitability of the LDV I/M program, with 14 considering the
program as profitable and 17 regarding the program as not
profitable. Of those able to provide an estimate, 12 of 18
stations thought the LDV I/M generated extra business.
In terms of the fee structure, 20 stations reported the
proposed fee for an HDGT I/M was not adequate, and 12 said they
were satisfied with a $6.50 fee. The stations were also asked
what the fee should be. Those with an opinion offered the
following:
. $13, five stations;
. $15, three stations;
. $16, one station; and
. $35, one station.
A number of stations had an opinion relating to a fair fee for a
combined HDGT emissions and safety inspection:
V. 4
-------
. $20,
two
stations;
. $25,
two
stations;
. $28,
one
station;
. $30,
one
station;
. $35,
two
stations; and
. $40,
two
stations.
Based on the above, the average £ee for an emissions inspection
only was $16, and $30 was the average fee quoted for the com-
bined HDGT inspection.
Not many stations were able to provide an estimate of the
fee required if new analyzer equipment had to be purchased.
Eight stations offered a fee ranging from $20 to $60 for an
emissions inspection requiring new equipment, with an average of
$31. Five other stations set the fee for a combined inspection
at: a range of $30 to $100, with an average of $54. The stations
overwhelmingly rejected the idea of establishing a fee premium
for on-demand service.
The inspection stations were asked what problems they could
foresee in starting an HDGT I/M program (1) using existing HTS
equipment and (2) using new test equipment. Only one station
expressed any interest in participating in a program requiring
new equipment. That station stated it would need a guaranteed
minimum secured by a protected geographical franchise to even
consider participation. All of the other stations stated they
would not participate in an HDGT I/M program requiring new test
equipment due to the cost of the machine.
If the proposed HDGT I/M program was initiated using the
HiTS analyzer, 10 stations stated that they could foresee no
problems in the program. Many more stations, 24, had specific
comments regarding problems with an HDGT I/M program. The chief
concerns were:
. The time involved in doing inspections would mean
that the service would not be profitable.
. Trucks won't pass and the program will chase
truckers out of the city.
. We would be interested in serving only our existing
accounts.
. To do an adequate safety and emissions inspection
takes close to one hour, which necessitates a fee in
the $30 to $35 range.
V. 5
-------
Some stations were unhappy with HTS maintenance
services and the $123 monthly charge.
. The analyzer requires too lean a burn to pass. Thus
truck carburetors would have to be adjusted to pass
test, and then readjusted so the truck will run
right.
. Trucks take up too much room in the shop.
. They would have to do emissions inspections on large
trucks outside.
. The analyzer was not mobile.
Telephone Interviews
A total of 76 public inspection stations were contacted by
telephone. These stations did 42 to 3,600 LOV exhaust emissions
inspections per year, with an average of 780.
Safety inspections of trucks were performed at 54 of the
stations: 24 inspect trucks of all sizes, and 27 stations
report inspections of trucks up to 18,000 pounds GVW. These
stations report doing from two to 1,200 truck safety inspections
per year, with an average of 138.
The stations reported that it could be possible to do up to
3,600 combined truck safety and emissions inspections per year,
with an average of 315 per year per station. Over half the
stations, 42, reported that no modifications to the shop would
be required to accommodate trucks for emissions inspections.
The remaining 34 stations would require structural modifica-
tions, (e.g., higher overhead door(s), deeper bays) or
non-structural procedures (e.g., moving the HTS analyzer to the
front of the bay).
The LDV exhaust emissions inspection program was viewed as
profitable by 38 of the stations and unprofitable by 35. Most
of the stations thought the program generated extra ousiness, in
the ranges cited below:
. 1 to 5 percent, 11 stations;
. 6 to 10 percent, 16 stations;
. 11 to 20 percent, 17 stations; and
. 21 plus percent, three stations.
uf those responding, 11 reported no increase in ousiness volume
'due to the LDV I/M program.
V. 6
-------
A vast majority, 43 of the stations, felt the proposed
$6.50 fee foe an HDGT emissions inspection was not adequate.
.The remainder of those responding, 23, thought the proposed
'[$6.50 was adequate. Those who felt the fee was too low pegged
irthe fee for an HDGT emissions inspection at something between
$10 and $20, with an average of $13. Others responded in terms
'.of a fair fee for a combined safety and emissions inspection, a
fee ranging between $18 and $75, with an average of $26.
Those who responded stated a $10 to $30 fee for an emis-
sions inspection would be necessary if they had to purchase a
.new machine. The average was $17. Those who were able to
estimate a fee for a combined inspection using a new machine
were in a range of $16 to $50, with an average of $32.
When asked to comment on any problems of starting an HDGT
I/M program, all of the stations stated they would not partici-
pate in a program which required the purchase of new emissions
•testing equipment. When the question referred to program prob-
lems using existing UTS equipment, 26 stations stated they could
not see any problems with extending the emissions testing pro-
gram to HDGT, while 49 stations cited problems similar to those
cquoted from the personal interviews.
Exhibit V-l summarizes the responses of the personal and
telephone contacts with inspection stations. An additional
column has been entered to comDine the personal and telephone
results.
AMORTIZING EQUIPMENT COST
The personal and telephone contacts with inspection sta-
tions that currently possess an HTS analyzer provide a basis for
estimating the numoer of stations likely to participate in an
HDGT I/M program. A prime indication of willingness to partici-
pate is the potential profitability of an inspection program.
This subsection contains a financial analysis relating
revenues from inspections to equipment cost. This produces an
estimate of the number of inspections a station must do annually
to cover equipment expenses. The analysis is useful in con-
firming (or disputing) the mixed reports by inspection stations
regarding the profitability of the LDV I/M program. More
importantly, this financial analysis can help estimate the
number of stations without an HTS analyzer which currently do
truck inspections that may participate in an HDGT I/M program.
Financial Analysis
To develop the financial analysis determining the profita-
bility of the LDV I/M program, costs and revenues must be ex-
pressed in the same time frame. For purposes of this analysis,
the time frame is the most recent year.
V. 7
-------
The following data set of costs drives the analysis:
. cost of HTS analyzer - $6,900
. analyzer/program life » six years
. monthly maintenance fee » $123
. opportunity cost for labor = 0
. interest (discount) rate = 11 percent
The annualized costs are the sum of the analyzer cost
amortized over six years with a capital recovery factor applied
at 11 percent plus the yearly total of the monthly maintenance
fees.
The calculation is as follows:
(cost of analyzer x capital recovery factor) + sum
of monthly maintenance fee3 * total annualized cost
therefore:
($6,900 x .23638) + (12 months x $123) = $3,107
This $3^107 is an absolute minimum cost as a labor cost has
not been assigned. The assumption is that inspections are
worked in during slack time, implying that other business is not
turned away to do inspections.
Using this framework, a break-even point would be 497
emissions inspections per year. Of the stations we contacted,
54 reported doing more than 500 emissions inspections per year
with 50 doing fewer than 500 per year. This corroborates our
finding in which 52 stations reported that the LDV I/M program
was profitable while 52 stated it was not.
Turning to those stations that might enter the program,
their cost parameters would be identical except they would have
to recoup the cost of the HTS analyzer in two years. The yearly
cost to those entering the program to serve HDGT (and probably
siphon off LDV inspections from existing stations) would be
$5,586.
To cover the $5,586 yearly cost would require 894 inspec-
tions. Not supnsingly, the 17 stations Peat Marwick contacted
that currently do truck safety inspections out do not have an
HTS analyzer all stated that they would not consider purchasing
an HTS analyzer in order to participate in an HDGT I/M program.
V. 8
-------
ESTIMATES OF STATION PARTICIPATION
The NYSDMV developed a list of stations certified to do LDV
emissions inspections and track safety inspections. This list
contained 530 stations, 425 public inspection stations, and 105
fleet inspection stations. Peat Marwick personnel contacted 111
public and 12 fleet inspection stations. Personal contact was
ntede at 35 of the public and all 12 of the fleet inspection
stations; telephone interviews were conducted with the remaining
7.6 public inspection stations.
Estimates of station participation in an HDGT I/M program
may be developed in various ways. Separate estimates must be
developed for fleets and for public inspection stations.
Estimates of Fleet Participation
While a sample size of 12 fleet inspection stations may
appear small, it provides coverage of over 11 percent of the
known HDGT population. Further, there wa3 no variance in the
key responses from the fleet operators. All 12 had an HTS
analyzer and used it to do emissions inspections on LDV. All 12
currently do safety inspections on trucks.
The most plausible estimate of fleet station participation
in a proposed HDGT I/M program is 100 percent of those stations
which currently have and use the HTS analyzer and do truck
safety inspections. These stations have no incentive to send
trucks out for an emissions inspection as they have the equip-
ment and physical layout to perform HDGT emissions inspections
m-house.
Estimates of Participation of
.Public inspection Stations
There are three bases for estimating participation of
Existing public inspection stations in a proposed HDGT I/M
program. Each estimate is accompanied by the average number of
truck safety and emissions inspections the stations reported
,they could do to derive a capacity figure for the inspection
station network.
Perhaps the most straightforward approach to estimating
participation by existing public inspection stations is based on
¦the proportion of those stations contacted that currently have
j-and use an HTS analyzer and do truck safety inspections. Of the
ail public inspection stations contacted, all had and use an HTS
'analyzer, and 85 reported doing truck safety inspections. This
^produces an estimate that 77 percent of the existing public
'inspection stations could participate in an HDGT I/M program.
V. 9
-------
Based on the census of stations developed by NYSDMV, this
translates into participation by 327 stations. The average
number of truck emissions and safety inspections the stations
reported they could do was 482 per year. Multiplying those who
could participate by the average number of possible combined
inspections yields 157,614 per year. This is an upper estimate
of the capacity to perform inspections. This estimate impli-
citly assumes that all the stations that reported they do LDV
emissions inspections and truck safety inspections will do truck
emissions inspections for all types and sizes of trucks if an
HDGT I/M program is started.
A second basis for estimating participation considers only
those stations that currently perform a threshold number of
truck inspections. Using 50 per year as the threshold value
eliminates 35 of the 85 inspection stations surveyed that have
and use an HTS analyzer and currently do truck safety inspec-
tions. This produces an estimate of a 45 percent participation
rate among existing public inspection stations. This translates
into a participation estimate of 191 existing public inspection
stations in an HDGT I/M program. .
Those stations that did 50 or more truck safety inspections
p'ter year reported that they could do an average of 588 combined
truck emissions* and safety inspections per year. The capacity
of the existing station network using this basis for estimation
would be 112/308 combined HDGT inspections per year.
The third basis for estimating participation relates to
tlhat proportion of stations stating that the proposed $6.50
emissions inspection fee was sufficient to perform emissions
inspections on HDGT. Of 98 stations responding to this issue,
36 percent stated they would be willing to participate in an
HDGT I/M program with a fee of $6.50 for emissions inspections.
Applying the 36 percent participation rate ;to the exi:ting in-
spection stations produces an estimate of 153 stations partici-
pating in an HDGT I/M program.
This group of stations stated they could do an average of
564 combined HDGT emissions and safety inspections per year.
The estimate of capacity is 86,292 combined HDGT inspections per
y(ear.
NYSDMV has provided a count of 69,740 gas-powered trucks
over 8,499 pounds in the New York metropolitan area. Trucks
Registered to fleets constitute 21,300 of this total. Thus, the
minimum number of HDGTs requiring emissions inspection at a pub-
lic facility is 48,440. Exhibit V-2 summarizes the estimates of
participation by existing inspection stations in an HDGT I/M
program serving the New York metropolitan area truck population.
V.10
-------
The participation estimates shown in the exhibit would mean
reduced service levels. Current service levels are estimated at
920 stations that perform HDGT safety inspections. This con-
sists of 327 public stations performing HDGT safety and LDV I/M
'inspections, 105 fleet stations certified to perform HDGT safety
land LDV I/M inspections, and 488 public and fleet stations per-
forming HDGT safety inspections.
The current and reduced service levels were used to esti-
mate costs to motor carriers of a proposed HDGT I/M program.
Reduced service levels affect track downtime for inspections and
jthe attendant maintenance repairs necessary to pass a reinspec-
tion.
QUANTIFICATION OF COST BENEFIT ESTIMATES
The inspection stations incur major costs in participating
in an emissions inspection program in terms of equipment cost
and a monthly maintenance fee. To participate in an HDGT I/M
program results in a small incremental equipment and maintenance
fee cost, if any. Benefits arise in terms of inspection fees
and added revenues from repairs.
v.ost: Estimates
The HTS analyzer is a one-time sunk cost to tne inspection
stations. There is no added capital cost to do added inspec-
tions whether they are for an HDGT or LDV.
The monthly maintenance fee is set by Hamilton Test
Systems. Stations contract with Hamilton Test Systems to
perform scheduled monthly maintenance and provide a service
response on an as needed basis. The fee currently does not vary
acrc--3 stations according to the number of emissions inspections
performed. There is currently no reason to assume that Hamilton
Test Systems would impose a two-tiered maintenance fee. Thus,
for Options 1, 2, and 4, the inspection stations which currently
have an analyzer would not incur any equipment-related cost.
Under Option 3, the scenario calls for
-------
EXHIBIT V-2
pakhcipaiion esih-mes of exisidc siahdns
IN A PROPOSED HDGT I/M PROGRAM
BASIS FCR ESTIMATE
ESEMUE OF
EAKHCIPAnCN:
NUMBER OF STATIONS
ESIIMA3E OF CAPACITY:
NUMBER OP INSPHTIICNS
YEARLY
NUMBER OF TIMES
IBDCX POPULATION
IS OCVERED
Stations Vhich Have and
Use an HIS Analyzer
and Do HDGT Safety
Inspections
327
157,614
3.25
Statkns Vhich Have and
Use an HIS Analyzer and 191 112,306 2.32
Do 50 Or Mare HDGT Safety
Inspections Per Year
Stations Vhich Hove and Use
to KES Analyzer, Do HDCT Safety 153 86,292 1.78
Inspections, and Report a $6.50
Ffee Is arfHriprif Compensation
to, Conduct an HEGT ^ an-tnna
TnapprHra
Stations Would Be Required to
Purchase a New niri
-------
Costs and benefits to inspection stations were estimated
for the two scenarios developed to analyze impacts on motor
carriers—scenarios involving current and reduced service
levels. Cost estimates were derived using the following para-
meters :
. Equipment costs reflect maintenance of current
service levels. Currently, there are an estimated
920 inspection stations which do truck safety in-
spections, and 432 have an HIS analyzer. To main-
tain the existing service level would require
purchase of 488 machines.
. If new equipment is required, 920 analyzers would
have to be purchased.
. If service levels are reduced, no HTS equipment is
purchased. For Option 3, it is assumed 191 new
analyzers would be purchased. This represents
stations which have an HTS analyzer and do 50 or
more HDGT safety inspections per year.
Benefits
Benefits "to inspection stations occur in two forms. First,
they receive the inspection and reinspection fees paid by com-
mercial motor carriers. The proposed fee is set at $6.50.
Second, they derive economic benefits from repair work.
The benefits from repairs are the profit margin on repairs,
which is pegged at 15 percent. The remaining 85 percent of the
$85 tune-up goes toward parts, labor, and overhead.
Exhibit V-3 provides estimates of costs and benefits to
inspection stations in a scenario where current service levels
are maintained. Equipment costs were estimated by multiplying
the number of machines necessary to maintain current service by
the annualized cost per machine.
Benefits in the form of fees for inspections and reinspec-
tions are the costs incurred by motor carriers. Profit margin
on repairs are estimated as 15 percent of the repair costs
incurred by motor carriers.
Exhibit V-4 provides the estimates of costs and benefits to
inspection stations in a scenario of reduced service levels.
Stations which currently do HDGT safety inspections but do not
have an analyzer are regarded as non-participants in an HDGT I/M
program.
With reduced service levels, equipment costs ace nil except
for Option 3. Under this option, it is assumed that 191 sta-
tions will purchase new non-HTS equipment. Thi3 represents
V. 13
-------
EXHIBIT V-3
COSTS AND BENEFITS TO INSPECTION STATIONS
CURRENT SERVICE LEVELS MAINTAINED
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
Equipment Coata (HTS) to $2,725,968 $2,239,986 *2,725,968
Maintain Current Service
Levels for Truck Inspections
Equipment Cost9 (New) to $5,923,880
Maintain Current Service Levels
for Truck Inspections
BENEFITS
~
Fees for: Inspections $314,860 $261,196 $314,860 $314,860
Reinspectioos $125,944 $104,478 $125,944 $62,972
Profit Margin (15 Percent) $247,044 $204,938 $247,044 $123,522
on Repairs
Net Cost $2,038,120 $1,669,374 $5,236,032 • $2,224,614
V. 14
-------
EXHIBIT V-4
COSTS AND BENEFITS TO INSPECTION STATIONS
REDUCED SERVICE LEVELS '
OPTION 1 OPTION 2 OPTION 3 OPTION 4
COSTS
Equipment Costa (New) $1,229,849
with Reduced Service
Level9
BENEFITS
Inspection Fees
Reinspection Fees
Profit Margin (15 Percent)
on Repairs
$314,860
$125,944
$247,044
$261,196
$104,^78
$204,938
$314,860
$125,944
$247,044
$314,860
$ 62,972
$123,522
Net Benefits (Costs)
$687,848
$570,612 $(542,001) $501,354
V. 15
-------
stations which have an UTS analyzer and do 50 oc moce HDGT
safety inspections per year. The benefit measures are identical
to those shown in Exhibit V-3.
,V. 16,
-------
VI. COST-EFFECTIVENESS OF A PROPOSED
HDGT I/M PROGRAM
This section evaluates the cost-effectiveness of a proposed
HDGT I/m program. Quantified costs and benefits nre combined
with reductions in HC and CO emission loads to produce the
cost-effectiveness estimates. Non-quantified societal benefits
are discussed. The section concludes with a discussion of the
limitations of the cost-effectiveness estimates.
COST-EFFECTIVENSSS ESTIMATES
FGR HDGT PROGRAM
Cost-effectiveness analysis is performed in instances where
the prime benefit defies quantification in monetary terms. In
this instance, the prime benefits are health effects stemming
fr^s reductions in the HC and CO loads in the nine-county metro-
politan area.
* The cost-effectiveness measure is formed by dividing net
costs by tonnage reductions in pollution. This results in an
estimate of the cost per ton to achieve the reduction in
specific pollutants (i.e., HC and CO).
\
(, Exhibit VT.-1 provides estimates of annual reductions in HC
and CO loads stemming from an HDGT I/M program for the nine-
county metropolitan area. The estimates for Program Options 1
and 3 refer to an HDGT I/M program covering all HDGT vehicles in
the nine-county area. Program Options 1 and 3 have an implied
4.0 percent failure rate.
i
Program Option 2 exempts pre-1970 vehicles from the
proposed HDGT I/M program. The adjustment to reductions in HC
and CO was assumed to be linear. This estimation procedure may
be optimistic since the pre-1970 HDGTs may be the heaviest
polluters.
Program Option 4 is linked to a 20 percent failure rate.
The adjustment in HC and CO was again assumed to be linear.
This estimation procedure is probably conservative since a lower
failure rate, i.e., 20 percent versus 40 percent, probably would
have the greatest impact on those vehicles which were the
heaviest polluters. Unfortunately, without a history of test
trials, it is impossible to estimate with any precision the
impact of changing the failure rate to 20 percent on the reduc-
tion of HC and CO loads.
VI.1
-------
exhibit
ANNUAL REDUCTIONS IN
OPTION 1
Deduction in hc (tons} 2,786
(REDUCTION IN CO (TONS) 41,369
1-1
HC AND CO LOAD1
OPTION 2 OPTION 3 OPTION 4
2, 311 2,786 1, 393
34,318 41,369 20,685
1 Source: "An Assessment of Emission Reduction Strategics tor
Heavy-Duty Gasoline Powered Trucks," Radian Corporation,
June 9, 1981, Table 6-7.
yi,2
-------
Exhibits VI-2 and VI-3 provide cost-effectiveness estimates
for the four EOGT I/M program options. Exhibit VI-2 addresses
the scenario where current service levels are maintained.
Exhibit VI-3 relates to the reduced service level scenario.
' E
Total cost in all cases is the combined quantified net
costs to motor carriers and inspection stations, and the costs
to government of planning, implementing, administrating/ and
monitoring the program.^ Total cost is apportioned half to HC
and half to CO. It has been noted in some studies that total
costs should be attributed to HC emissions exclusively.2 This
is appropriate in certain situations. For the New York case,
however, significant CO hot-spot pollution problems exist which
are directly addressed via the proposed HDGT I/M program.
Hence, an equal portion of cost is attributed to CO abatement.
The cost per ton measures are derived by dividing half of
total costs by tonnage reductions in HC and CO loads, respec-
tively. This procedure was repeated for the four program
options.
If current inspection service levels could be maintained,
it would result in a lower cost per ton. Thus, a major cost
burden on motor carriers would be reduced--i-truck downtime for
testing and" repair. However, to maintain current service levels
assumes that inspection stations will invest in HTS equipment
for a program which may be in place for as brief a period as two
ye,ars.
CAVEATS. LIMITATIONS, AND FURTHER
DISCUSSION OF COST-EFFECTIVENESS
ESTIMATES
Developing cost-effectiveness estimates for a program with
no history requires certain judgments and assumptions which
influence results. This subsection discusses those elemencs of
the study which may be classed as judgmental or backed by
assumptions.
1 Exhibit VI-2 combines data from Exhibits IV-2, V-3, and VI-1.
Exhibit VI-3 combines data from Exhibits IV-4, V-4, and VI-1.
2 Faulkner, F. Barrett, "The Cost-Effectiveness of Vehicle
Inspection and Maintenance Programs," Camoridge Systematics,
January, 1982.
VI.3
-------
EXHIBIT VI-2
COST EFFECTIVENESS ESTIMATES
CURRENT SERVICE LEVELS MAINTAINED i
ir0TAL COST1
jiCOST/TON HC
COST/TON CO
OPTION 1
$10,224,532
$ 1,835
$ 124
OPTION 2
$8,482,596
i 1,835
$ 124
OPTION 3
$13,422,444
$ 2,409
$ 162
OPTION 4
$6,540,250
$ 2,348
$ 158
Total cost Is apportioned half to HC and half to CO to arrive at
cost/ton estimates. Total cost includes $130,000 in government costs
as estimated by New Yorlc State Department of Motor Vehicles and
supported by information from New York State Department of
Environmental Conservation.
yi,4
-------
EXHIBIT VI-3
COST EFFECTIVENESS ESTIMATES
REDUCED SERVICE LEVELS
TOTAL COST1
COST/TON HC
COST/TON CO
OPTION 1
$13,970,436
$ 2,507
$ 169
OPTION 2
iU,611,368
* 2,512
t 169
OPTION 3
$15,200,285
I
* 2,728
$ 184
OPTION 4
$7,050,218
* 2,531
* 170
Total cost la apportioned half to HC and half to CO to arrive at
cost/ton estimates. Total cost Includes $130,000 In government costs
as estimated by New York State Department of Motor Vehicles and
supported by information from New York State Department of
Environmental Conservation.
VI. 5
-------
Estimates of HC and CO Reduction
The reduction in HC and CO load used in this study were
,'taken as the recorded and reported reductions based on New York
.City Department of Environmental Protection work and later
'reworked and reported by Radian Corporation.1 The total
reductions from an HDGT I/M program are calculated by Radian and
shown as 2,786 tons per year for HC and 41,369 tons per year for
CO. Radian reduces these estimates by 44 percent to account for
repair and deterioration factors. The repair factor relates to
a judgment that repairs for the test vehicles were performed by
experts, that repairs were more extensive 1 than the typical I/M
.repair, and that the test fleet was dirtier. The deterioration
factor relates to the diminishing effectiveness of the repairs.
This study uses total reductions because a tune-up is used
as the typical repair. If reductions are overstated, costs are
also overstated, meaning that a balance is struck in producing
the cost-effectiveness estimates.
Unquantified Benefits
Section IV identified and discussed the benefit to motor
carriers of avoiding truck downtime. This benefit may arise
when I/M-related repairs or maintenance is undertaken and
results in avoidance of breakdowns. This benefit was not
quantified because of the lack of data for developing a
probability estimate of breakdowns avoided and the resultant
downtime avoided. Admittedly, by not quantifying this item,
benefits to motor carriers are understated, resulting in an
overstatement of the cost-effectiveness estimates.
Non-Market Benefits
The societal benefits relating to improvements in health,
job productivity, esthetic improvements, and reduced medical
expenditures form the basis for a program, but are not addressed
in any quantitative sense. These benefits are not traded in the
economy and thus dollar values cannot be conveniently attached
to them. There have been efforts to attach shadow prices to
certain of these benefits; however, these attempts are fre-
quently confounded by intervening variables. For example, a
neighborhood free of air, water, and noise pollution may command
^ Pinto, John T. , "Study of Control Strategies for In-Use Heavy
Duty Vehicles," New York City Department of Environmental
Protection, May 1981.
Radian Corporation, "An Assessment of Emission Reduction
Strategies for Heavy Duty Gasoline Powered Trucks," June 9,
1981.
VI.6
-------
higher residential rents and prices. Additionally, the neigh-
borhood may have excellent schools, ampl6 recreational oppor-
tunities, convenient transportation, varied shopping, etc.
These additional factors confound attempts to make comparisons
based solely on environmental considerations and to affix shadow
prices to the values derived.
Station Participation Rates
The economic burdens imposed on motor carriers by an HDGT
I/M program are related to the extent of service provided by
inspection stations. If a large number of stations participate
in a program it will be easier to schedule inspections, arrange
for timely repairs to pass a reinspection, and perform the rein-
spection test. Conversely, with fewer inspection stations in
the proposed program, it becomes difficult for motor carriers to
schedule inspections, arrange timely repairs, and get
reinspected.
The estimates of' this study rely heaviily on responses from
station personnel. The extent, of participation by stations
which currently perform HDGT safety inspections but do not have
an HTS analyzer is especially important in minimizing disrup-
tions of extensions to the present HDGT inspection program.
While representatives of these stations unanimously stated
that they would not purchase an analyzer in order to participate
in an HDGT I/M program, deeds may be different than words. The
extent of participation will ultimately depend upon the station
size, client base, and business volume. For instance, a station
which has 10 truck bays, six full-time mechanics, a number of
fleet accounts, and over $500,000 in volume is unlikely to risk
loss of business associated with non-participation in an HDGT
I/M program.
Our findings from the LDV I/M program indicate that
stations will participate to retain business. Customers require
one-stop shopping, and will switch garages if emissions inspec-
tions cannot be provided along with regular repairs and main-
tenance. Unfortunately, there is no evidence at this time to
infer the extent of participation in a proposed HDGT I/M program
by stations which currently do HDGT safety inspections and would
have to acquire an emissions analyzer.
vehicle Downtime Associated with
Inspection
A significant cost to motor carriers is the truck downtime
for inspection/repair/reinspection. Experience from the LDV
program indicates this downtime is minimal. It is a function of
the repairs needed to pass a reinspection. In the LDV case most
repairs are carburetor adjustments.
VI.7
-------
The proposed HDGT I/M program was evaluated using a tune-up
as the typical repair. A tune-up was used as the typical repair
because this procedure served as the basis for the estimation of
reductions in HC and CO. Since a tune-up?is much more compli-
cated and time consuming than a carburetor ladjustment it creates
truck downtime.
Should a program be implemented, a variety of repairs will
be required for failing vehicles. The average cost and time
required to do the repairs will probably be less than a tune-
up. Unfortunately, the reductions in HC and CO pollutants
probably will be less also.
Linear Assumptions
Program Option 4 features a 20 percent failure rate. it
was assumed that this option would affect a 50 percent reduction
in HC and CO loads as compared to a program with a 40 percent
failure rate. This assumption of linearity is admittedly
tenuous.
COST-EFFECTIVENESS COMPARISONS WITH
OTHER CONTROL MEASURES
This section presents summary cost-effectiveness com-
parisons among alternative pollution ; control stategies.
Cost-effectiveness estimates for various pollution control
strategies are provided in Exhibit VI-4.' Comparisons among
control strategies should be made with caution.
First, the cost-effectiveness values do not address the
size of pollution reductions afforded by the various measures.
Thus, a measure with a low dollar per ton may not realize
significant reductions in pollutants. Additionally, untried
strategies are associated with unknown costs.
Second, the cost-effectiveness values• have been estimated
using varied methodologies. Some estimates naturally employ
more rigor than others. For example, the cost-effectiveness
estimate of $372/ton of HC for the LDV I/M in New York is based
on an inspection cost, repair cost, and fuel saving benefit.
The LDV I/M cost-effectiveness estimate of $1,286 to $l,508/ton
of HC considers the above mentioned elements and factors in
driver (owner) time of taking the vehicle to the inspection
stations and waiting for necessary repairs, in the event of an
I/M failure.
The cost-effectiveness estimates for the proposed HDGT I/M
program were in the range of $1,800 to $2,700 per ton of HC
reduced and $120 to $180 per ton of CO reduced. These ranges
cover both scenarios, i.e., current and reduced levels of
services from inspection stations, across the four program
options.
VI.8
-------
EXHIBIT VI-4
COST-EFFECTIVENESS OF OTHER POLLUTION CONTROL STRATEGIES
Cost-Effectiveness
(dollars/ton)
Measure
HC
CO
HDGT Inspection/Maintenance in NY
LDV Inspection/Maintenance in NY*
LDV Inspection/Maintenance2
1931 Pass. Car Emission Stds.3
1984 Gas Truck Stds.4
Traffic Controls5
Transit Improvements5
Auto Coatings®
Fabric Coatings®
Bulk Plants6''
Gas Stations®
1,835-2,728
372
1,286-1,508
net savings
327
14,599
1,205
40
470
253
617
124-184
34
1,382
41
8
51
Notes:
1 'U.S. Environmental Protection Agency, "Update on the Cost-
Effectiveness of I/M,* April 1981, p. 10.
2 Cambridge Systematics, Inc., "The Cost-Effectiveness of Vehicle
Emissions Inspection and Maintenance Programs," January 1982, p.7.
3 Cost of 1981 new passenger car emission standards compared to
'1975 standards; Source: USEPA, "Regulatory Analysis and
Environmental Impact of Final Emission Regulations for 1984 and
Later Model Year Heavy Duty Engines." December 1979, p. 159.
4 Ibid., p. 6. Value shown is gasoline-powered heavy duty trucks
greater than 8,500 GVW.
5 Source: 1979 SIP for Pima County, Arizona.
K I
0 Source: "Phase I Air Quality and Economic Impacts for the
New York Metro/Hartford Regional Study," Contract 13-AQ-7718, GCA
Corp., Bedford, MA, October 1980, prepared for the National
Commission on Air Quality. Of the 13 stationary source control
measures listed in the referenced document, only the four measures
shown in this paper account individually for more than 1 percent
of 1987 expected emission requirements.
7 Net savings means cost of recovering emissions is less than the
value of the recovered product.
VI.9
-------
These cost-effectiveness estimates relate to a program
running to December 31 , 1986. A program with a longer timfe
horizon would result in declining costs which would improve the
cost-effectiveness values. These declining costs would be a
result of adjustments by motor carriers of operations and
scheduled maintenance to ease compliance with an HDGT I/M
program and increased service through incremental additions to
the number of stations which participate in an inspection
program.
EN VI ROW"-"
VI. 10
-------
------- |