PERMITTEE: Rio Bravo Poso

19100 Von Karman, Suite 570

Irvine, CA 92612

FACILITY NAME: Rio Bravo Poso Cogeneration

FACILITY LOCATION: 16608 Porterville Highway

Bakersfield, California 93308

Pursuant to the provisions ofthe Clean Air Act (CAA), Subchapter I, Part C (42 U.S.C. Section

7470, et. seq.), and the Code of Federal Regulations (CFR) Title 40, Section 52.21, the United

States Environmental Protection Agency Region 9 (EPA) is issuing a Prevention ofSignfIcant

Deterioration (PSD) air quality permit to Rio Bravo Poso (RBP). This Permit applies to the

modification and operation of a 36 megawatt (MW) solid-fuel power plant known as Rio BravoPoso Cogeneration facility (Poso) in Bakersfield, California.

RBP is authorized to construct and operate the Poso power plant as described herein, in

accordance with the permit application (and plans submitted with the permit application), thefederal PSD regulations at 40 CFR § 52.21, and other terms and conditions set forth in this PSD

Permit. Failure to comply with any condition or term set forth in this PSD Permit may be subjectto enforcement action pursuant to Section 113 ofthe Clean Air Act. This PSD Permit does not

relieve RBP from the obligation to comply with applicable federal, state, and Shasta County Air

Quality Management District (District) air pollution control rules and regulations.

This PSD Permit becomes effective on the date ofissuance pursuant to 40 CFR §124.15(a).

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Rio Bravo PosoPSD Permit SJ 85-06/ May 2012
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(RB) for the construction of a coal-fired cogeneration facility near Bakersfield, California, was

revised on July 23, 1993, June 9, 1995, October 6, 1998 and May 21, 2004. It was amended onDecember 13, 2010 and August 29, 2011 to allow for a trial test burn of biomass at the facility.

This proposed permit revision permanently incorporates clean cellulosic biomass into the

allowable fueL mixture for the facility.

Permit Conditions

1. Permit Expiration

This Approval to Construct/Modify shall become invalid (1) if construction is notcommenced (as defined in 40 CFR 52.2 1(b)(8)) within 18 months after the approval takes

effect, (2) if construction is discontinued for a period of 18 months or more, or (3) ifconstruction is not completed within a reasonable time.

II. Notification of Commencement of Construction and Startup

The Regional Administrator shall be notified in writing of the anticipated date of initial

start-up (as defined in 40 CFR 60.2(o)) of each facility ofthe source not more than sixty(60) days nor less than thirty (30) days prior to such date and shall be notified in writingof the actual date of commencement of construction and start-up within fifteen (15) days

after such date.

111. Facilities Operation

All equipment, facilities, and systems installed or used to achieve compliance with the

terms and conditions of this Approval to Construct/Modify shall at all times be

maintained in good working order and be operated as efficiently as possible so as tominimize air pollutant emissions.

JV. Malfunction Reporting

The Regional Administrator shall be notified by telephone or electronic mail within 48

hours following any failure of air pollution control equipment, process equipment, or of a

process to operate in a normal manner which results in an increase in emissions above

any allowable emissions limit stated in Section IX ofthese conditions. In addition, the

Regional Administrator shall be notified in writing or electronic mail within fifteen (15)

days of any such failure. This notification shall include a description of the

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V. Right to Entry

The Regional Administrator, the head of the State Air Pollution Control Agency, the head

ofthe responsible local air pollution control agency, and/or their authorized

representatives, upon the presentation of credentials, shall be permitted:

A. to enter upon the premises where the source is located or in which any records are

required to be kept under the terms and conditions ofthis Approval to Construct!

Modify; and

B. at reasonable times to have access to and copy any records required to be kept under

the terms and conditions ofthis Approval to Construct/Modify; and

C. to inspect any equipment, operation, or method required in this Approval to

Construct/Modify, and

D. to sample emissions from the source.

VI. Transfer of Ownership

In the event of any changes in control or ownership of facilities to be constructed or

modified, this Approval to Construct/Modify shall be binding on all subsequent owners

and operators. The applicant shall notify the succeeding owner and operator oftheexistence ofthis Approval to Construct/Modify and its conditions by letter, a copy of

which shall be forwarded to the Regional Administrator and the State and local Air

Pollution Control Agency.

VII. Severability

The provisions ofthis Approval to Construct/Modify are severable, and, if any provision

ofthis Approval to Construct/Modify is held invalid, the remainder ofthis Approval to

Construct/Modify shall not be affected thereby.

VIII. Other Applicable Regulations

The owner and operator ofthe proposed project shall construct and operate the proposedstationary sàurce in compliance with all other applicable provisions of 40 CFR Parts 52,

60 and 61 and all other applicable Federal, State and local air quality regulations.

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PSD Permit SJ 85-06/ May 2012 2 of 7
This letter must be signed by a responsible representative of RB.

B. Pollution Control Equipment

On and after the date of startup (as defined in 40 CFR Part 60) of the facility, RB shall

install, continuously operate, and maintain limestone injection for control of SO2

emissions and selective non-catalytic reduction for control ofNO emissions.

Limestone at a minimum Ca/S molar ratio of 1.6:1 shall be injected directly into the

combustion chambers.

A selective non-catalytic reduction system utilizing ammonia injection shall be

incorporated within the boiler at a point where a temperature range of 1500- 1700°F isachieved during the normal operations. The ammonia use rate shall be between 1.0 and

2.0 NH3/NO (molal basis). (Revised July 23, 1993)

C. Performance Tests

1. Within 60 days after achieving the maximum production rate of the proposed

equipment, but not later than 180 days after initial startup as defined in 40 CFR

60.2(o), and at such other times as specified by the EPA, RB shall conduct or cause to

be conducted performance tests for sulfur dioxide (SO 2)and nitrogen oxides (NO),

and furnish the San Joaquin Valley APCD, the California Air Resources Board, andthe EPA (Attn: Air-3) a written report of such tests. The tests for SO2,NON, CO and

PM10 shall be conducted on an annual basis and at the maximum operating capacity

of the facility being tested. Upon written request (Air-3) from RB, EPA may approve

the conducting of performance tests at a lower specified production rate. Also, after

the initial performance tests and upon written request from RB, EPA may approve the

deletion of a specific annual test for the combustion unit. (Revised May 15, 2012)

2. Performance tests for the emissions of SO2,CO , and NO and shall be conducted and

results reported in accordance with the test methods set forth in 40 CFR 60 Appendix

A, and 40 CFR 60.8. The following test methods shall be used:

a. Performance tests for the emissions of NO shall be conducted using EPA method

1-4 and 7.

b. Performance tests for the emissions of CO shall be conducted using EPA methods

1-4 and 10.

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PSD Permit SJ 85-06/ May 2012 3 of 7
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 toarrange for an observer to be present at the test. Such prior approval will minimize the

possibility of EPA rejection oftest results for procedural deficiencies. In lieu ofthe

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 SO2

1. On and after the date ofstartup, RB shall not discharge or cause the discharge into the

atmosphere SO2in 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 SO2in 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 NO2)in excess ofthe 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 ofstartup and shutdown. (Revised May 21, 2004)

2. During startups and shutdowns, RB shall not discharge or cause the discharge into

the atmosphere NO (as NO2)in excess of 0.20 lbs/MMBtu averaged over a 24-hour

period.

F. Emission Limits for CO

On or after the date ofstartup, 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

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PSD Permit SJ 85-06/ May 2012 4 of 7
atmosphere PM10in 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 SO2

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) ofthe 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.

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b. Specific identification of each period of excess emissions that occurs during

startups, shutdowns, and malfunctions ofthe 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

ofthe 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 ofNO and/or SO2,as measured by the continuous

monitoring system, exceed NO and SO2 maximum emission limits set forth for

each ofthe 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 ofthis 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 ofthe fuel shall be measured monthly

or certified by the supplier for each shipment. (Revised October 6, 1998)

4. RB shall maintain records ofthe amount and type of fuel used in the cogeneration

unit, and the sulfur content ofthat 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.

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PSD Permit SJ 85-06/ May 2012 6 of 7
trees and clean wood found in disaster debris, clean biomass from land clearing

operations, and clean construction and demolition wood. These fuels are notsecondary 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 93308

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