Ports of Los Angeles and Long Beach

1. MagneRail Zero Emissions Demonstration Multi-Projects Overview October 2010 Inland Empire Cajon Pass Ports of Los Angeles and Long Beach Alameda Corridor CA High Speed Rail LA Metro LA Streetcar San Pedro Trolley

2. Background - Where We Are, How We Got Here 2006 – Port of LA commissioned MagLev Study to General Atomics. 2006 – Ports LA/LB hired URS to evaluate various MagLev technologies. GA received highest score. 2007 – Ports of LA/LB created Clean Air Action Plan (CAAP). 2009 – ITSC teams with GA. Ports issued RFCS for Zero Emissions Container Moving System (ZECMS). 2009 (Fall) – ITSC and team responded to Ports’ RFCS for a ZECMS with MagneRail Technology. 2010 (Spring) – ITSC enters discussion with San Pedro Red Line Trolley for extending existing line from waterfront into San Pedro downtown and nearby shopping center using MagneRail. 2010 (Summer) – Ports finish RFCS evaluation.• Even though mature, ZECMS technologies not yet proven in marine operations environment. • Evaluation team recommended for Ports to support demonstration from willing respondents. • Also, during RFCS process the Ports’ staff realize different approach for ZECMS. They now see electric trucks draying containers to and from terminals and intermodal rail yards.• Because of CARB’s Tier 4 in coming years, Port now looking at ZECMS for moving trains within port and through Los Angeles basin to Inland Empire.

3. Where We Are, How We Got Here (Continued) • 2010 (Fall) – ITSC in discussions with Port staff to identify demonstration site at POLA and assistance with demonstration funding (either as sponsor and/or other role including monetary). • 2010 (Fall) – ITSC enters into discussions with Los Angeles GO LA Streetcar organization about using MagneRail for their downtown LA street car system. • 2010 (Fall) – ITSC enters into discussions with Siemens to become member of ITSC team, to design and manufacture rail vehicles(freight or passenger) to work on the LSM MagneRail system. • October 21, 2010 (today) – Meeting to update CEC, show ITSC’s progress and commitment, and learn how CEC can support a funding plan for a MagneRail demonstration at POLA.

4. MagneRail Demonstration Objectives Long-Term Problem to be Solved Eliminate diesel train emissions from on and near port operations using existing rail network. Improve Ports’ rail efficiency resulting in reduction of truck drays to ICTF. Provide ability for future expansion to inland empire. Technical Approach Retrofit existing rails with linear electric propulsion motors (“MagneRail”). Implementation Approach Build and test full-scale system to demonstrate all-electric train movement under port and railroad operating conditions. Expected Results Validation of all-electric train movement and efficiency; significant improvement in Los Angeles basin air quality and noise reduction.

5. Technical Approach • Mount and connect LSM modules (~20 ft.) between existing rails. • Retrofit a “green goat” type locomotive (or railcar) with magnet arrays underneath creating a MagneRail mover car. Can operate automated or manual mode. • Provides all-electric propulsion to rolling stock.

6. Implementation Approach Demonstrate moving a railcar consisting of 5 double-stacked 40-ft. containers using all-electric LSM modules on existing rail. One standard articulated rail car = 5 permanently attached double stack container rail cars. Up to 2,000 ft. in length with one MagneRail car to provide propulsion Performance to match existing diesel locomotives Includes rail switch and curve

7. Phased MagneRail Demonstration

8. Energy recovery on downhill train operations into grid. Reuse of energy to assist in uphill train moves. Enough energy to provide power for over 15,000 households. The energy captured is approximately 20% of the total solar energy generated from all solar power sources in California A MagneRail Demonstration at POLA is also R&D Cajon Pass Cajon Pass

9. Energy Recovered from Cajon Pass • Energy recovery potential from Cajon pass is about 2.4 x 104 kW-hrs for one train consisting of 100 cars going from 4190 ft. down to sea level. • Assuming ~40% efficiency, one gets about 104 kW-hrs per train. • Assuming 45 trains go down the pass per day, the annual energy (365 days) recovered is then ~1.6 x 108 kW-hrs or 160 GWh. Total CA Solar = 845 GWh vs Cajon Pass = 160 GWh • The energy captured is approximately 20% of the total solar energy generated from all solar power sources in California annually. • Enough energy to provide power for over 15,000 households.

10. A MagneRail Demonstration at POLA is also R&D MagneTruck Currently in EIR study phase. Ports of LA/LB CAAP Update (2010) includes language identifying a possible MagneTruck dedicated freight lane as an alternative emissions reduction solution. Hwy. 710 Expansion

11. A MagneRail Demonstration at POLA is also R&D for Streetcars Proposed for downtown Los Angeles Streetcar Project

12. A MagneRail Demonstration at POLA is also R&D for Trolley LSM allows trolleys to ascend up to a 10% slope enabling them to connect with higher elevation nearby areas. SD Zoo Balboa Park San Diego Trolley Extension Connecting downtown San Diego with Balboa Park and San Diego Zoo San Pedro Red Line Trolley Extension Connecting waterfront trolley line with San Pedro Historical Downtown District

13. A MagneRail Demonstration at POLA is also R&D for: Future Light Rail Transit Systems

14. A MagneRail Demonstration at POLA is also R&D for: Future California High Speed Rail System Siemens made in Sacramento and GA LSM made in San Diego

15. Calculation of Linear Motor Fuel Savings As much as 66% reduction in energy costs • Operating assumptions • 10-mile route with 1 million cargo cars/year • 50 tons/car → 500 million ton-miles of traffic per year • Diesel fuel cost (conventional locomotives) • 400 ton-miles/gallon fuel over 500 million miles = 1.25m gal/yr • 1.25 million gal/year x $3.15/gal = $3.94M/year diesel fuel cost(Diesel cost as of 9/20/10 per U.S. Energy Information Administration www.eia.doe.gov) • Electricity cost (LIM/LSM) • 0.5 lb diesel/Hp-hr → 14 Hp-hr.gal → 10.6 kWhr/gal • 400 ton-miles/gal over 500 million miles = 13.3m kWhr • 13.3M kWhr x $0.10/kWhr = $1.33M/year electricity cost

16. Calculation of Linear Motor NOx Reduction Same operating assumptions (500 million ton-miles/year of traffic) NOx emissions (conventional locomotives) 202 g NOx/gallon fuel x 1.25 m gal/yr = 252.5m g NOx/yr 252.5M g NOx/year = 278 tons NOx/year NOx emissions (Linear Motor Rail) 0.15 lb NOx/MWhr (2000 SCE power plant rule) 0.15 lb NOx/MWhr x 13,300 MWhr/year = 1,995 lb NOx/year 1,995 lb NOx/year = 1 ton NOx/year That’s 278 Tons vs. 1 Ton over a single 10 mile stretch of rail

17. Summary of MagneRail Benefits All-electric propulsion will significantly improve air quality and reduce noise. As much as 66% reduction in energy costs. Readily retro-fitted to existing rail. Expandable to the Inland Empire and beyond. No unsightly overhead catenary wires or dangerous ‘hot’ third rails. MagneRail’s LSM technology can be adapted for passenger rail and streetcars (i.e. trolley systems) Significant regenerative braking energy captured on downhill train operations. Ready for demonstration.

18. Benefit of a POLA ZECMS MagneRail Demonstration A demonstration of LSM MagneRail at POLA also supports the Research and Development of multi-projects:• streetcars/trolley • light rail transit systems • Hwy. 710 expansion • CA High Speed Rail• Cajon Pass (new energy) By leveraging the R&D results of a POLA ZECMS demonstration, the CEC will get more “bang” out of its funding money.

19. Next Steps Port of Los Angeles staff to finalize identification of a demonstration site at the Port and make recommendation to Port Commission. Timeline – within one month. POLA and POLB ZECMS project staff to support ITSC when seeking demonstration funds (joint Ports as possible sponsor). Agencies targeted for demonstration funds:• CA Energy Commission • SCAQMD •CARB • Dept. of Energy • US DOT • CAAP TAP • ITSC and Ports’ staff to coordinate communication between aforementioned agencies for ZECMS demonstration funding.

20. Contact For additional information, contact:Innovative Transportation Systems Corporation (ITSC)402 W. Broadway, Suite 1220San Diego, CA 92101Tel: 619-239-4779Sandor Shapery, President. Sandy@itsco.usTel: 619-239-4700 orCharles Labitan, Analyst. Chuck@itsco.us Cell: 858-353-8103