Discover the intricacies of ISR 2305 compliance, earn WAIRE points strategically, and leverage renewable technologies

Southern California warehouse operators subject to Indirect Source Rule 2305 face costly regulations aimed at offsetting indirect emissions with renewable technologies.

Operators must earn points through the Warehouse Action and Investments to Reduce Emissions (WAIRE) program to avoid significant fees.

Navigating compliance requirements can be tricky, so let’s look at how warehouse owners/operators can earn WAIRE points.

Responsibilities for Warehouse Owners/Operators

Warehouse Owners

Warehouse owners in the South Coast AQMD jurisdiction had to submit a Warehouse Operations Notification (WON) before September 1, 2021.

The report includes details about the warehouse and its operators, such as the building size, area of use for warehouse activities, and contact information for the operator.

If the warehouse operator changes, the owner must submit a new WON within 14 days. Owners are also responsible for creating a new report within 30 days of a renovation that changes the facility's square footage.

Owners are not required to earn points unless they are the facility's operator. However, they can choose to earn WAIRE points and transfer them to their operators.

Warehouse Operators

A warehouse’s operator is responsible for earning WAIRE points and meeting compliance.

They must submit two reports for the program: an Initial Site Information Report (ISIR) and an Annual WAIRE Report (AWR).

Initial Site Information Report

The ISIR must be submitted during the first compliance period. This means warehouses part of Phase 3 have until July 1, 2024, to produce their ISIR.

In the report, operators detail the number of warehouse truck trips, actions to meet their compliance obligation, and details of onsite equipment.

Annual WAIRE Report

Following a phase’s compliance period, operators have 30 days from January 1 to submit their AWR. For example, Phase 3 participants must submit their report before January 31, 2025.

The report includes the number of truck trips from that year, the number of WAIRE points earned for each action, and any other metric used to earn points.

How do you calculate your compliance obligation?

To comply with ISR 2305, operators must earn enough points that match or exceed the Warehouse Points Compliance Obligation (WPCO) based on the total number of truck trips each year multiplied by the Stringency Factor and Annual Variable.

What are WATTs?

Warehouse operators must keep track of the Weighted Annual Truck Trips (WATTs) from Class 2b to Class 8 trucks.

Truck trips are defined as one-way trips which are counted whenever a truck enters or exits a facility.

Tractors and tractor-trailers are weighted 2.5 times higher than smaller, straight trucks because they have higher emissions.

What is the Stringency Factor and Annual Variable?

Stringency is a value based on a warehouse’s building size and compliance year used to determine how many points per WATT.

The annual variable determines the stringency value based on the compliance year. For example, a warehouse that is 200,000 square feet will have a stringency value of 0.001675 for compliance in 2024.

How do you determine the WPCO?

Operators can estimate their WPCO by multiplying the WATTs by the Stringency and the Annual Variable.

For example, Warehouse X has 100,000 square feet and gets 50 daily trips from Class 8 trucks, and 50 daily trips from Class 2b-7 trucks will have a WPCO of 52.7 in its first compliance year.

The South Coast AQMD provides a valuable calculator for operators to estimate their WPCO and the points accumulated throughout the year.

Meeting your compliance obligation

Now that you can estimate your WPCO in advance, operators can take various actions to earn WAIRE points.

There are three main ways to earn WAIRE points:

• Pay an Emissions Mitigation Fee
• Complete actions from the WAIRE menu
• Follow an approved Custom WAIRE plan

Pay the Mitigation Fee

The most straightforward action from the WAIRE menu would be to pay the mitigation fee. Which can be costly at $1,000 for each WPCO.

Since Warehouse X has a WPCO of 52.7, its mitigation fee would be $52,700.

Because the stringency factor rises every compliance year for the first three years, Warehouse X will see its WPCO score jump to 159.7 in 2026 and face a $159,700 fee.

Complete WAIRE Menu actions

Instead of paying the mitigation fee, operators can complete action items from the WAIRE menu to implement renewable technologies and earn enough points to meet the WPCO.

Warehouse X can install four 19.2 kW EV Chargers in its first compliance year to satisfy the WPCO with 60 points.

Combining sustainable solutions such as EV chargers, solar panels, and battery storage can rack up points for their purchase/installation and energy generation. This will allow warehouse operators to meet compliance for years and keep energy costs at a minimum.

Excess points can be banked for future years or transferred to another warehouse in which they operate.

Follow a Custom WAIRE plan

Warehouse operators can earn points not outlined in the WAIRE menu by submitting a Custom WAIRE Plan application.

All applications are required to have the following:

• how the proposed action will earn WAIRE points
• how the plan will reduce emissions in three years after plan approval
• A schedule of crucial milestones showing progress
• A location and map where the proposed actions will occur
• Any expected permits or approvals required to implement the custom plan

Operators should remember that actions taken before complete plan approval will not count.

The initial application must be submitted 270 days before the AWR is due. Phase 3 compliance period applications are due no later than May 6, 2024, through the WAIRE portal.

All Custom WAIRE Plan applications are posted for public review 30 days before approval.

Green Convergence can help implement WAIRE

ISR 2305 has proven to be a complex program for many Southern California warehouse owners and operators to comply with its guidelines.

Green Convergence is the go-to contractor with a proven track record and industry expertise to incorporate energy solutions into your warehouse operations.

Our financial experts utilize federal and state-backed incentives and rebates to keep installation costs low while navigating policy changes.

The in-house design team can craft optimized solutions for your needs, while the installation team’s quality workmanship ensures the system lasts.

Learn how your warehouse facility can utilize renewable energy solutions to reduce electricity costs and comply with ISR 2305 for years by contacting one of our experts.