Los Angeles area air pollution regulators are closing in on a compromise with the power generating industry in setting fees for use of air pollution offsets for boiler unit replacement projects. \tIn a new version of the proposal released April 4, the South Coast Air Quality Management District plans to cut the initially proposed fees and allow generators to pay them on easier terms. \tThe Air District\u2019s further slowing the schedule for adopting the rules, according to executive officer Barry Wallerstein, in order to undertake environmental analysis. He noted that such analysis wasn\u2019t originally intended. The Air District also intends to reach out for broader public input. \tIn a report to the agency\u2019s board April 5, Wallerstein said the plan is to present the fees for adoption in September instead of next month. \tUnder the new proposal, generators would see fees discounted by 50 percent for the first 100 MW of capacity on boiler replacement projects, plus substantially discounted on additional capacity. \tOn average, for instance, the district plans to offer offsets for particulate emissions for $99,000\/pound\/day under its latest proposal, versus the originally planned $181,000\/pound\/day. That\u2019s a 45 percent discount. \tGenerators would be able to pay the fees on an annual basis, paying for just one year of offset usage when they apply for their air pollution control permits from the agency. The initial proposal sought payment for five years upfront. \tUnder the plan, generators would pay the fees to lease air pollution offset credits the district holds in its own account that they need under the federal Clean Air Act for their projects. Up until now, the air district has allowed generators to use the credits free of charge for boiler replacement projects, although few have availed themselves of the opportunity. \tThe air district would use the money to fund air quality improvement projects in the smoggy Los Angeles area, such as replacing diesel trucks with clean-fueled models. \tMany owners of emissions-heavy boiler units are moving to replace inefficient and inflexible equipment with fast-ramping gas-fired turbines. They are doing so to meet a variety of environmental mandates, from cutting greenhouse gases to helping integrate more intermittent renewable energy into the grid and phasing out use of ocean water for cooling at plants along the coast.