PREVENTIONOFSIGNIFICANTDETERIORATIONPERMITISSUEDPURSUANTTOTHEREQuIREMENTSAT40CFR§52.21U.S.ENVIRONMENTALPROTECTIONAGENCY,REGIONIXPSDPERMITNUMBER:SJ85-06PERMITTEE:RioBravoPoso19100VonKarman,Suite570Irvine,CA92612FACILITYNAME:RioBravoPosoCogenerationFACILITYLOCATION:16608PortervilleHighwayBakersfield,California93308PursuanttotheprovisionsoftheCleanAirAct(CAA),SubchapterI,PartC(42U.S.C.Section7470,et.seq.),andtheCodeofFederalRegulations(CFR)Title40,Section52.21,theUnitedStatesEnvironmentalProtectionAgencyRegion9(EPA)isissuingaPreventionofSignfIcantDeterioration(PSD)airqualitypermittoRioBravoPoso(RBP).ThisPermitappliestothemodificationandoperationofa36megawatt(MW)solid-fuelpowerplantknownasRioBravoPosoCogenerationfacility(Poso)inBakersfield,California.RBPisauthorizedtoconstructandoperatethePosopowerplantasdescribedherein,inaccordancewiththepermitapplication(andplanssubmittedwiththepermitapplication),thefederalPSDregulationsat40CFR§52.21,andothertermsandconditionssetforthinthisPSDPermit.FailuretocomplywithanyconditionortermsetforthinthisPSDPermitmaybesubjecttoenforcementactionpursuanttoSection113oftheCleanAirAct.ThisPSDPermitdoesnotrelieveRBPfromtheobligationtocomplywithapplicablefederal,state,andShastaCountyAirQualityManagementDistrict(District)airpollutioncontrolrulesandregulations.ThisPSDPermitbecomeseffectiveonthedateofissuancepursuantto40CFR§124.15(a). Jv 4wDeborJordon//DateDirector,AirDivisionRioBravoPosoPSDPermitSJ85-06/May2012PSDPERMITRIOBRAVOPOSOCOGENERATIONFACILITY(NSRSJ85-06)TheOctober22,1986ApprovaltoConstructoriginallyissuedtoRioBravoRefiningCompany(RB)fortheconstructionofacoal-firedcogenerationfacilitynearBakersfield,California,wasrevisedonJuly23,1993,June9,1995,October6,1998andMay21,2004.ItwasamendedonDecember13,2010andAugust29,2011toallowforatrialtestburnofbiomassatthefacility.ThisproposedpermitrevisionpermanentlyincorporatescleancellulosicbiomassintotheallowablefueLmixtureforthefacility.PermitConditions1.PermitExpirationThisApprovaltoConstruct/Modifyshallbecomeinvalid(1)ifconstructionisnotcommenced(asdefinedin40CFR52.21(b)(8))within18monthsaftertheapprovaltakeseffect,(2)ifconstructionisdiscontinuedforaperiodof18monthsormore,or(3)ifconstructionisnotcompletedwithinareasonabletime.II.NotificationofCommencementofConstructionandStartupTheRegionalAdministratorshallbenotifiedinwritingoftheanticipateddateofinitialstart-up(asdefinedin40CFR60.2(o))ofeachfacilityofthesourcenotmorethansixty(60)daysnorlessthanthirty(30)dayspriortosuchdateandshallbenotifiedinwritingoftheactualdateofcommencementofconstructionandstart-upwithinfifteen(15)daysaftersuchdate.111.FacilitiesOperationAllequipment,facilities,andsystemsinstalledorusedtoachievecompliancewiththetermsandconditionsofthisApprovaltoConstruct/Modifyshallatalltimesbemaintainedingoodworkingorderandbeoperatedasefficientlyaspossiblesoastominimizeairpollutantemissions.JV.MalfunctionReportingTheRegionalAdministratorshallbenotifiedbytelephoneorelectronicmailwithin48hoursfollowinganyfailureofairpollutioncontrolequipment,processequipment,orofaprocesstooperateinanormalmannerwhichresultsinanincreaseinemissionsaboveanyallowableemissionslimitstatedinSectionIXoftheseconditions.Inaddition,theRegionalAdministratorshallbenotifiedinwritingorelectronicmailwithinfifteen(15)daysofanysuchfailure.ThisnotificationshallincludeadescriptionoftheRioBravoPosoPSDPermitSJ85-06/May20121of7malfunctioningequipmentorabnormaloperation,thedateoftheinitialfailure,theperiodoftimeoverwhichemissionswereincreasedduetothefailure,thecauseofthefailure,theestimatedresultantemissionsinexcessofthoseallowedunderSectionIXoftheseconditions,andthemethodsutilizedtorestorenormaloperatiohs.Compliancewiththismalfunctionnotificationprovisionshallnotexcuseorotherwiseconstituteadefensetoanyviolationsofthispermitorofanylaworregulationswhichsuchmalfunctionmaycause.V.RighttoEntryTheRegionalAdministrator,theheadoftheStateAirPollutionControlAgency,theheadoftheresponsiblelocalairpollutioncontrolagency,and/ortheirauthorizedrepresentatives,uponthepresentationofcredentials,shallbepermitted:A.toenteruponthepremiseswherethesourceislocatedorinwhichanyrecordsarerequiredtobekeptunderthetermsandconditionsofthisApprovaltoConstruct!Modify;andB.atreasonabletimestohaveaccesstoandcopyanyrecordsrequiredtobekeptunderthetermsandconditionsofthisApprovaltoConstruct/Modify;andC.toinspectanyequipment,operation,ormethodrequiredinthisApprovaltoConstruct/Modify,andD.tosampleemissionsfromthesource.VI.TransferofOwnershipIntheeventofanychangesincontrolorownershipoffacilitiestobeconstructedormodified,thisApprovaltoConstruct/Modifyshallbebindingonallsubsequentownersandoperators.TheapplicantshallnotifythesucceedingownerandoperatoroftheexistenceofthisApprovaltoConstruct/Modifyanditsconditionsbyletter,acopyofwhichshallbeforwardedtotheRegionalAdministratorandtheStateandlocalAirPollutionControlAgency.VII.SeverabilityTheprovisionsofthisApprovaltoConstruct/Modifyareseverable,and,ifanyprovisionofthisApprovaltoConstruct/Modifyisheldinvalid,theremainderofthisApprovaltoConstruct/Modifyshallnotbeaffectedthereby.VIII.OtherApplicableRegulationsTheownerandoperatoroftheproposedprojectshallconstructandoperatetheproposedstationarysàurceincompliancewithallotherapplicableprovisionsof40CFRParts52,60and61andallotherapplicableFederal,Stateandlocalairqualityregulations.RioBravoPosoPSDPermitSJ85-06/May20122of7IX.SpecialConditionsA.CertificationRBshallnotifytheEPA(Attn;Air-3)inwritingofcompliancewithConditionsIX.B.andTX.J.below,andshallmakesuchnotificationwithin15daysofsuchcompliance.ThislettermustbesignedbyaresponsiblerepresentativeofRB.B.PollutionControlEquipmentOnandafterthedateofstartup(asdefinedin40CFRPart60)ofthefacility,RBshallinstall,continuouslyoperate,andmaintainlimestoneinjectionforcontrolofSO2emissionsandselectivenon-catalyticreductionforcontrolofNOemissions.LimestoneataminimumCa/Smolarratioof1.6:1shallbeinjecteddirectlyintothecombustionchambers.Aselectivenon-catalyticreductionsystemutilizingammoniainjectionshallbeincorporatedwithintheboileratapointwhereatemperaturerangeof1500-1700°Fisachievedduringthenormaloperations.Theammoniauserateshallbebetween1.0and2.0NH3/NO(molalbasis).(RevisedJuly23,1993)C.PerformanceTests1.Within60daysafterachievingthemaximumproductionrateoftheproposedequipment,butnotlaterthan180daysafterinitialstartupasdefinedin40CFR60.2(o),andatsuchothertimesasspecifiedbytheEPA,RBshallconductorcausetobeconductedperformancetestsforsulfurdioxide(SO2)andnitrogenoxides(NO),andfurnishtheSanJoaquinValleyAPCD,theCaliforniaAirResourcesBoard,andtheEPA(Attn:Air-3)awrittenreportofsuchtests.ThetestsforSO2,NON,COandPM10shallbeconductedonanannualbasisandatthemaximumoperatingcapacityofthefacilitybeingtested.Uponwrittenrequest(Air-3)fromRB,EPAmayapprovetheconductingofperformancetestsatalowerspecifiedproductionrate.Also,aftertheinitialperformancetestsanduponwrittenrequestfromRB,EPAmayapprovethedeletionofaspecificannualtestforthecombustionunit.(RevisedMay15,2012)2.PerformancetestsfortheemissionsofSO2,CO,andNOandshallbeconductedandresultsreportedinaccordancewiththetestmethodssetforthin40CFR60AppendixA,and40CFR60.8.Thefollowingtestmethodsshallbeused:a.PerformancetestsfortheemissionsofNOshallbeconductedusingEPAmethod1-4and7.b.PerformancetestsfortheemissionsofCOshallbeconductedusingEPAmethods1-4and10.RioBravoPosoPSDPermitSJ85-06/May20123of7c. Performance

tests
for the emissions

of SO 2 shall

be conducted

using EPA methods

1-4 and

6. d. Performance

tests
for the emissions

for PM 10 shall

be conducted

using EPA Method 201A

in combination

with EPA Method

202. (Revised

May

15, 2012) The EPA (Attn:Air-3)

shall

be notified

in writing

at least

30 days prior

to such tests

to allow time

for the development

of an approvable performance

test plan and

to arrange

for an observer

to be present

at the test. Such prior approval

will minimize

the possibility

of EPA rejection

of test results

for procedural deficiencies.

In lieu

of the above mentioned

test methods, equivalent methods

may

be used with prior written approval

from
the EPA. 3. For performance

test purposes, sampling
ports, platforms, and access shall

be provided

by RB
on the combustion exhaust system

in accordance

with

40 CFR 60.8(e). D. Emission Limits

for SO 2 1. On and after
the date

of startup,

RB shall not discharge

or cause

the discharge

into the atmosphere

SO 2

in excess

of the more stringent

of 14.0 lbs/hr

or 20 ppm

at 3%
02 (3- hour average)

from
the stack venting
from
the fluidized

bed combustion

unit except during periods

of startup

and shutdown. (Revised

May

21, 2004) 2. During startups

and shutdowns,

RB shall not discharge

or cause

the discharge

into the atmosphere

SO 2

in excess

of 0.11 lbs/MMBtu averaged

over

a 24-hour period. (Revised

May

21, 2004) E. Emission Limits

for NOx 1. On and after
the date

of startup,

RB shall not discharge

or cause

the discharge

into the atmosphere

NO

(as NO 2 )

in excess

of the more stringent

of 38.9 lbs/hr

or 78 ppm

at 3% 02 (3-hour average)

from
the stack venting
from
the fluidized

bed combustion

unit except during periods

of startup

and shutdown. (Revised

May

21, 2004) 2. During startups

and shutdowns,

RB shall not discharge

or cause

the discharge

into the atmosphere

NO

(as NO 2 )

in excess

of 0.20 lbs/MMBtu averaged

over

a 24-hour period. F. Emission Limits

for CO On

or after
the date

of startup,

RB shall not discharge

or cause

the discharge

into the atmosphere

CO

in excess

of 105.1 lbs/hr (3-hour average)

from

the stack venting
from the combustion

unit. (Revised

June

9, 1995) G. Emission Limits

for PM Rio Bravo Poso PSD Permit

SJ 85-06/
May 2012

4 of

7

# On

or after
the date

of startup,

RB shall
not discharge

or cause

the discharge

into the atmosphere

PM excess

of either

0.1 41b/MWh

gross energy output,

or 0.01 51b/MMBtu heat input, based

on

a daily average

of each boiler operating

day. Boiler operating

day shall have

the meaning

as defined

in 40 CFR

61 Subpart

D-a. (Revised

May

15, 2012) H. Emission Limits

for PM On
or after
the date

of startup,

RB shall
not discharge

or cause

the discharge

into the atmosphere

PM 10

in excess

of 4.31 lb/hr, 0.0111 lb/MMbtu

and 0.007 grains/dscf,

based on

a daily average

of each boiler operating

day. Boiler operating

day shall have
the meaning

as defined

in 40 CFR

61 Subpart

D-a. (Revised

May

15, 2012) I. Startup

and Shutdown 1. Combustor
startup
shall

be defined

as any period,

not exceeding

96 hours, during which

the combustor

is set
in operation

and heated from

a lower temperature

to

a steady state operating temperature.

(Revised

May

21, 2004) 2. Combustor shutdown

shall

be defined

as any period,

not exceeding

6 hours, during which

the combustor

is cooled from

its steady
state operating temperature

to

a lower temperature followed

by cessation

of operation within

the

6 hour period. (Revised

May 21, 2004) J. Continuous Monitoring 1. Prior

to the date

of startup

and thereafter,

RB shall install, maintain

and operate

the following continuous monitoring systems

in the fluidized

bed combustion exhaust stack: a. Continuous monitoring systems

to measure

stack

gas NON,
and SO 2 concentrations.

The systems

shall meet EPA monitoring performance specifications

(40 CFR 60.13
and
40 CFR

60, Appendix

B, Performance Specifications

2 and

3). b.

A continuous monitoring
system

to measure

stack

gas volumetric

flow rates. The system
shall meet EA monitoring performance specifications

(40 CFR Part
52, Appendix

E). 2. RB shall notify EPA (Attn: Air-3)

of the date upon which demonstration

of the continuous monitoring
system performance commences

(40 CFR 60.13(c)). 3. RB shall maintain

a file
of all measurements,
including continuous monitoring
system performance evaluations;

all continuous monitoring
system

or monitoring

device calibration checks; adjustments

and maintenance performed

on these systems

or devices;

and

all other information required

by 40 CFR Part

60 recorded

in

a permanent

form suitable

for inspection.

The file shall

be retained

for

at least two years following

the date

of such measurement, maintenance,

reports

and records. Rio Braio Poso PSD Permit

SJ 85-06/
May 2012

5 of

74. RB shall submit

a written report

of all excess emissions

to EPA (Attn: Air-3)

for every calendar quaiter.

The report shall include

the following: a. The magnitude

of excess emissions computed

in accordance

with

40 CFR 60.13(h),

any conversion factor(s)
used,
and the date and time

of commencement and completion

of each time period

of excess emissions.V b. Specific identification

of each period

of excess emissions

that occurs during startups, shutdowns,

and malfunctions

of the fluidized

bed combustion

unit. The nature

and cause

of any malfunction

(if known)

and the corrective
action taken

or preventative measures adopted

shall also

be reported. c. The date and time identifying

each period during which

the continuous monitoring
system

was inoperative
except

for zero and span checks

and the nature of the system repairs

or adjustments. d. When

no excess emissions

have occurred

or the continuous monitoring
system has not been inoperative, repaired,

or adjusted,

such information

shall

be stated

in the report. e. Excess emissions

shall

be defined

as any consecutive

3-hour period during which the average emissions

of NO and/or
SO 2 ,

as measured

by the continuous monitoring
system, exceed
NO and SO 2 maximum emission
limits

set forth

for each

of the pollutants

in IX.D.

and IX.E. above. f. Excess emissions indicated

by the CEM system
shall

be considered violations

of the applicable emission

limit

for the purposes

of this permit. K. Fuel Use and Sulfur Content 1. RB shall not consume

more than 836,520 pounds

(on

a dry basis)

per day

of petroleum

coke andlor coal, based

on

a 30-day rolling average. (Revised

May

15, 2012) 2. Two pounds

of clean cellulosic biomass

may

be substituted

for one pound

of petroleum

coke and!

or coal. (Revised

May

15, 2012) 3. All fuels shall have

a maximum

sulfur content

of 4.0 percent

by weight

as measured by current ASTM methods.

The sulfur content

of the fuel shall

be measured monthly or certified

by the supplier

for each shipment. (Revised October

6, 1998) 4. RB shall maintain records

of the amount

and type

of fuel used

in the cogeneration unit, and the sulfur content

of that fuel,

in

a permanent

form suitable

for inspection

by EPA and the San Joaquin Valley APCD.

The record shall

be maintained

for

at least three years following

the date

of its making.RioBravoPosoPSDPermitSJ85-06/May2012

6of

7

# 5. Clean cellulosic biomass

shall have
the meaning

as defined

in 40 CFR 241.2.

In particular,

clean cellulosic means those residuals

that are akin

to traditional cellulosic bioinass

such

as forest-derived
biomass

( e.g., green wood, forest thinnings,

clean
and unadulterated

bark, sawdust,

trim, and tree harvesting residuals

from logging

and sawmill materials),

corn stover

and other biomass
crops used specifically

for energy production

( e.g., energy cane, other
fast growing grasses), bagasse

and other crop residues

( e.g., peanut shells), wood collected

from forest

fire clearance activities, trees and clean wood found

in disaster debris, clean biomass

from land clearing operations,

and clean construction

and demolition

wood. These fuels

are not secondary materials

or solid wastes unless discarded.

Clean biomass

is biomass

that does not contain contaminants

at concentrations

not normally associated

with virgin biomass materials. (Revised

May

15, 2012) L. New Source Performance Standards The proposed cogeneration

unit

is subject

to the Federal regulations entitled Standards

of Performance

for New Stationary Sources

(40 CFR Part 60). RB shall meet

all applicable requirements

of Subparts

A and D-a

of this regulation. X. Agency Notifications All correspondence

as required

by this Approval

to Construct/Modify

shall

be forwarded

to: A. Director,

Air Division
(Attn: Air3) EPA Region

9 75 Hawthorne

Street San Francisco

CA 94105 B. Chief, Stationary
Source Division California

Air Resources
Board P0 Box 2815 Sacramento,

CA 95812 C. San Joaquin Valley APCD Southern Office 34946 Flyover Court Bakersfield,

CA 93308RioBravoPosoPSDPermitSJ85-06/May2012



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