1 

### B E C K H A M

, L I SA

Fr o m: B E C KH AM

, LISA

S e nt: T hur s d ay
, O c t ob e r 23

, 2014 4 : 11 PM

To: g o ld m a n m @s b ca p c d. o rg; gwill e y@ c o

. s l o

. ca .u s; d o n o @ g b u a p c d. o rg; b mc l a ughlin @ b ca q m d. o rg; C hri s t op h e r D

. B r o wn A I CP

S u b j ec t: St a tu s o f Pe nding P S D R ul e s with E PA

A tt a chme nt s: S a m p l e D i s tri c t GHG St e p 2 W ithdr a w a l L e tt e r 10

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- 2014 .d o c x; C l a rifi ca ti o n L e tt e r f o r S a nt a B a r b a r a 10

- 23

- 2014 .d o c x; C l a rifi ca ti o n L e tt e r f o r SL O 10

- 23

- 2014 .d o c x; C l a rifi ca ti o n L e tt e r f o r B utt e 10

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- 2014 .d o c x; C l a rifi ca ti o n L e tt e r f o r F ea th e r R i v e r 10

- 23

- 2014 .d o c x; C l a rifi ca ti o n L e tt e r f o r Gr ea t B as in 10

- 23

- 2014 .d o cx

G oo d af te r n o o n M a n y o f y o u h a v e p r o b a b l y b ee n w ai t i ng f o r s o m e t i m e t o h e a r fr o m m e r e g ar d i n g y o u r P S D r u l e s s ub m i t te d t o E P A f o r

a pp r ov al

. W e n o w h a v e a p o te n t i al o p t i o n t h a t we t h i n k w o u l d all o w u s t o m o v e f o r w ar d w i t h a pp r ov i ng t h e s e r u l e s

.

A tt ac h e d i s a clarifi c a t i o n l ette r f o r e ac h D is t ric t a dd r e ssi ng c e r t ai n i t e m s w i t h i n e ac h D i s t ric t ’ s SI P s ub m i t t a l

. T h e r e i s als o a sa m p l e w i t hd ra w al l ette r ( n o t t ai l o r e d t o i nd i v i du al d is t ric t s) t h a t e ac h D i s t ric t c o u l d s e nd t o A RB r e qu e s t i ng t o

w i t hd ra w al t h e p o r t i o n o f y o u r s ub m i tt al r e la te d t o t h e Sup r e m e C o u r t ’ s D e cis i o n o n G H G s (aka S te p 2 o f t h e T ail o ri ng
R u l e )

.

P l e a s e t a k e a l o o k a t t h e a t t ac h e d d o c u m e n t s a nd s ee if y o u t h i n k t h i s o p t i o n w o u l d w o r k f o r y o u r d is t r i c t

. I w ill f o l l o w

up t h is e m ail w i t h a m e et i n g i n v i t a t i o n f o r n e x t w e e k t o h a v e a call t o d isc u s s a n y qu e s t i o n s o r c o n c e r n s y o u m a y h a v e

.

Y o u r p a t i e n c e i s g r e a t l y a p p r e cia te d a s w e h a v e t r i e d t o r e v i ew a nd a pp r o v e t h e s e r u l e s

.

T h a n ks,

L isa B e ck h a m
E n v ir o n m e n t al E ng i n ee r
A ir P e r m i t s Offi c e
E P A R e g i o n 9 ( 4 1 5 ) 9 7 2

- 3 8 1 1DATE

Gerardo Rios Chief, Air Permits Office (Air

- 3) EPA Region 9
75 Hawthorne Street San Francisco, CA 94105

RE : Clarifications for Rule 1107

– P reventi on of Significant Deteriorat ion (PSD) Permits

Dear Mr. Rios:

On February 6, 2013 , the California Air Resources Board (CARB) submitted for the Environmental Protection Agency ’s ( EPA ) approval Butte County Air Quality Management District (District) Rule 1107

– Prevention of Significant Deterioration (PSD) Permit s

. This letter provides additional information and clarifications related to greenhouse gas permitting requirements, transferring the PSD program from EPA to the District and ensuring
that certain PSD program requirements are met

.

Clarification Regarding Greenhouse Gas Requirements On June 23, 2014, the Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency (No. 12

- 1146) (“ UARG” ) that EPA may not treat greenhouse gases (GHGs) as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit (referred to as “Step 2 of the GHG Tailoring Rule”). The Supreme Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of conventional pollutants, contain limitations on GHG emissions based on the application of BACT. District Rule 10.10, Section C incorporates by
ref erence EPA’s PSD regulations at 40 CFR 52.21 as of August 1, 2011. In light of the Supreme Court’s UARG decision, on [DATE], I requested that ARB notify EPA that ARB and the District would like to withdraw from ARB’s April 22, 2013 SIP submittal the porti on of District Rule 10.10 that incorporates by reference 40 CFR 52.21(b)(49)(v). This withdrawal is designed to ensure that EPA can act on the District’s SIP submittal consistent with the Supreme Court’s UARG decision concerning Step 2 of the GHG Tailoring Rule. The District understands
that EPA will need to make revisions to 40 CFR 52.21 as a result of the UARG decision and the associated remand process that is still ongoing. In the interim, the District intends to apply 40 CFR 52.21 as incorporated by
ref erence into District Rule 10.10, Section C in manner that is consistent with EPA’s interpretation of the Supreme Court ’s decision and EPA guidance and policy with respect to application of section 52.21 while

revision s to the regulations are pending.

Exis ting PSD Permits As part of, and concurrent with, EPA’s approval of the District’s PSD program into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to those sources located in the District that have existing PSD permits issued pursuant by EPA . This would include authority to conduct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits including, for example, modific ations, amendments, or revisions of any nature, and authority to enforce such permits.Discussion of Section 110(a)(2)(E)(i) Pursuant to Section 110(a)(2)(E)(i) of the Clean Air Act, we discuss how the information provided previously and
State and Dis trict statutory and regulatory requirements demonstrate that the District has adequate personnel, funding, and authority under State and/or local law to implement the PSD program within the District.

The District has the primary responsibility for regula ting air pollution from all stationary sources within the District (see California Health & Safety Code (H&SC) sections 39002 and 40000). The California Air Resources Board oversees the District’s activities and regulates mobile sources of air pollution. U nder State law, the District is required to adopt rules to achieve ambient air quality standards and to enforce the provisions of local, State and federal air quality laws (see H&SC section 40001(a)).

The District’s permitting program (which is authorized by H&SC section 42300 and must meet the requirements of section 42301), as approved by EPA, currently implements requirements from both the California and federal Clean Air Acts. The District is authorized by state law to enforce its rules, regulations a nd orders, including
conditions contained i n District

- issued Title V and PSD permits (see H&SC §§ 40752(b); 41513; 42402

- 42403).
Rule 1107 provides the District with specific authority to issue PSD permits and otherwise implement and enforce the PSD progra m

.

As discussed in the District’s February 6, 2013 SIP submittal, Rule 1107 will have an additional impact on businesses that are proceeding with a new major source or a major modification of an existing major source within the District. The District will incur costs to process PSD permitting actions and will transfer those costs to the source. The District also adopted a PSD fees rule

– Rule 515

– which imposes an initial filing fee and then charges actu al expenditures in issuing a permit on a time and material basis. California districts have estimated
the actual labor hour s required to process a PSD permit to be approximately the same as for processing a title V permit . For title V permits

, the District advises that the time required is 70 hours. However, this could vary considerably depending on the level of public and EPA participation in the process. This would equate to a permit fee of about $5,500 at the District’s hourly rate of $79.95. The initial filing fee is set at $1,000 and is expected to cover the costs of pre

- permitting consulting.

The above information shows that the District has adequate legal authority, personnel and funding to implem ent and enforce the PSD program for sources within the District

, including those with existing PSD permits.

Additional PSD Program Requirements

Notice of Opportunity for Public Hearing

40 CFR 51.166 (iii) states:

Notify the public, by advertisement in a newspaper of general circulation in each region in which the proposed source would be constructed, of the application, the preliminary determination, the degree of increment consumption that is expected from the source or modification, and of the opportunity for comment at a public hearing as well as written public comment.

40 CFR 51.166(q)(iii) requires that the public notification for a preliminary determination i nclude notice of the opportunity for comment at a public hearing. While Section 5.5 of Rule 1107 includes the requirement in 40 CFR 51.166(q)(2)(v) to provide an opportunity for a public hearing, Rule 1107 does not specifically include the requirement to n otify the public of the opportunity to comment at a public hearing. Section 5.3 of Rule 1107 includes the requirements in 40 CFR 51.166(q)(iii) related to public notifications except for a reference to theopportunity for comment at a public hearing. While Section 5.5 of Rule 1107 requires the District to provide an opportunity for a public hearing it is not clear from Rule 1107 that the notice to the public must mention the opportunity to request a public hearing. T he District confirms that it interpr ets Section 5 of Rule 1107 as requiring the public notification to include reference to the opportunity to request a public hearing. The District will ensure that its public notifications mention the opportunity to request a public hearing, and revise Rule 1107

, for clarity, to specifically include this requirement the next time it is open for revisions.

[Conclusion]

Sincerely,

xxxxxx Air Pollution Control OfficerDATE

Gerardo Rios Chief, Air Permits Office (Air

- 3) EPA Region 9
75 Hawthorne Street San Francisco, CA 94105

RE : Clarifications for Rule 10 .10

– P reventi on of Significant Deteriorat ion

Dear Mr. Rios:

On April 22 , 2013 , the California Air Resources Board (CARB) submitted for the Environmental Protection Agency ’s ( EPA ) approval Feather River Air Quality Management District (District) Rule 10.10

– Prevention of Significant Deterioration

. This letter is in tended to clarify the District ’s position concerning the application of the

PM 2.5 Significant Impact Levels ( SILs ) and the PM 2.5 Significant Monitoring Concentration ( SMC ) in its PSD

program in light of the January 22, 2013 decision by the U.S. Court of Appeals for the District of Columbia (Court)

i n Sierra Club v. EPA

, 705 F.3d 458

. This letter also provides additional information and clarifications related to greenhouse gas permitting, transferring the PSD program from EPA to the District and ensuring that certain PSD program requirements are met

.

C larification R egarding PM 2.5 I ssues :
In Sierra Club v. EPA

, the Court granted a request from EPA to vacate and remand to EPA the portions of two
PSD rules (40 CFR 51.166 (k)(2) and 40 CFR 52.21 (k)(2) ) addressing the SILs for PM 2.5 so that EPA could voluntarily correct an error in these provisions. The Court also vacated the parts of these two PSD rules (40 CFR 51.166(i)(5)(i) ( c ) and 40 CFR 52.21(i)(5)(i) ( c ) ) establishing a PM 2.5 SMC, finding that EPA was precluded from using the PM 2.5 SMC to exempt permit applicants from the statutory requirement to compile and submit preconstruction monitoring data as part of a complete PSD application

. On December 9, 2013, r evisions to 40 CFR 51.166 and 52.21 were published in the Federal Register to remove the affected provisions from the PSD regulations, effective as of that date. 78 F ed. R eg. 73698.

To implement the PSD permitting program under the Clean Air Act, the District adopted Rule 10.10 , which incorporated 40 CFR 52.21 by reference (with certain exceptions and revisions), as in effect on August 1, 2011

, into the rule. As a result, District Rul e 10.10 includes the vacated provisions described above as part of the SIP revision submitted to EPA for approval. EPA therefore requested clarification from the District concerning its interpretation of Rule 10.10 to the extent that it incorporates by ref erence the provisions at 40 CFR 52.21(k)(2)
and 40 CFR 52.21(i)(5)(i)( c ) that were in effect on August 1, 2011

.

I am writing to clarify that the District interprets and intends to implement the PSD program in a manner that is
consistent with the Court’s decision in Sierra Club v. EPA

. EPA’s subsequent revisions to its PSD regulations consistent with that decision, and certain EPA statements included in the preamble of the 2010 final rule that
had added section 52.21(k)(2) to the federal regulations.

PM 2.5 SILs
District Rule 10.10 incorporates by reference the federal regulation at 40 CFR 52.21(k)(2) that was in effect on August 1, 2011 , which establishe d SILs for PM 2.5 and read as follows:(k)(2) Significant impact levels. For purposes of PM 2.5 , the demonstration required in paragraph (k)(1) of this section is deemed to have been made if the emissions increase from the new stationary source alone or from the modification alone would cause, in all areas, air quality impacts less than the followin g

amounts:

Pollutant Averaging time Class I area Class II area Class III area

PM 2.5 Annual 0.06 μ/m 3 0.3 μ/m 4 0.3 μ/m 5

24

- hour 0.07 μ/m 3 1.2 μ/m 5 1.2 μ/m 6

Paragraph (k)(1) requires that sources applying for a new PSD permit demonstrate that any allowable emission increases from the proposed source or modification, in conjunction with all other applicable emissions increases or reductions, will not cause or c ontribute to a violation of any NAAQS or any applicable increment. 40 CFR 52.21(k)(1).

In the preamble to the 2010 final rule adding the (k)(2) provision, EPA advised that, “notwithstanding the existence of a SIL, permitting authorities should determin e when it may be appropriate to conclude that even a de minimis impact will ‘cause or contribute’ to an air quality problem and to seek remedial action from the proposed new source or modification.” Prevention of Significant Deterioration (PSD) for Particu late Matter Less than 2.5 Micrometers (PM 2.5 )

– Increments, Significant Impact levels (SILs) and Significant Monitoring Concentration (SMC), 75 Fed. Reg. 64,864, 64,892 (Oct. 20, 2010). In another passage of the preamble, EPA also
observed that “the use of a SIL may not be appropriate when a substantial portion of any NAAQS or increment is
known to be consumed.” Id. at 64,894. The Court’s decision in Sierra Club v. EPA held that, contrary to these statements in the preamble, the text of the (k)(2) provisi on “does not give permitting authorities sufficient discretion to require a cumulative air quality analysis” under such circumstances. 705 F.3d at 464.

Consistent with the Court’s decision in Sierra Club v. EPA

, EPA’s subsequent revisions to its PSD reg ulations
consistent with th at decision, and the statements by EPA in the preamble to the 2010 final rule discussed above

, the District does not interpret section 52.21(k)(2), as incorporated by reference in District Rule 10.10 , to preclude the District from exercising discretion to determine when it may be appropriate to conclude that an impact below the PM 2.5 SIL values in section 52.21(k)(2) will cause or contribute to an air quality problem and to seek remedial action from the proposed new source or m odification. Such discretion is necessary to ensure
adherence to the requirement of the Clean Air Act that a PSD project not cause or contribute to a violation of any NAAQS or any applicable increment. Based on this interpretation, the District affirms tha t it will not read section 52.21(k)(2), as incorporated by reference in District Rule 20.3.1 , as an absolute “safe harbor,” but will exercise discretion to determine whether a particular application of the PM 2.5 SIL values is appropriate when a
substantial portion of the PM 2.5 NAAQS or increment is known to be consumed. The District retains the discretion to require additional information from a permit applicant as needed to assure that the source will not cause or contribute to a violation of any NAAQS or applicable increment pursuant to section 52.21(k)(1). The District will consider the approach outlined in EPA’s Guidance for PM 2.5 Permit Modeling released by EPA on May 20, 2014 for determining the appropriate application of the PM 2.5 SIL s going forward.

PM 2.5 SMC
District Rule 10.10 incorporates by reference the federal regulation at section 52.21(i)(5)(i) that was in effect on August 1, 2011 , which provides that the APCO “may exempt a proposed major stationary source or major modification from the requirements of paragraph (m) of this section, with respect to monitoring for a particular pollutant, if” the emissions increase or net emissi ons increase is below the applicable SMC . Thus, th is provision,
as in effect on August 1, 20 11

, specifically at section 52.21(i)(5)(i)( c ), as incorporated into Rule 10.10

, provide sthe District with the discretion to determine whether it is appropriate to apply the SMC for PM 2.5 to exempt a permit applicant from the requirement to compile and sub mit preconstruction ambient monitoring data for

PM 2.5 as part of a complete PSD application

. Consistent with the Court’s decision in Sierra Club v. EPA vacating
the PM 2.5 SMC and EPA’s subsequent revisions to its PSD regulations consistent with this decision

, the District
affirms that it will not exercise its discretionary authority to use the PM 2.5 SMC in order to exempt PSD permit applicants from the requirement in Clean Air Act section 165(e)(2) that ambient monitoring data for PM 2.5 be included in applications subject to the PSD program for PM 2.5

. Accordingly, the District will require all applicants requesting a PSD permit from the District , including those that hav e already applied for but which have not yet
received a permit, to submit ambient PM 2.5 monitoring data in accordance with Clean Air Act requirements
whenever proposed increases of direct PM 2.5 emissions or any emissions of a PM 2.5 precursor equal or exceed a significant amount.

In summary, the District intends to implement the PSD program consistent with the Court’s decision and EPA’s December 9, 2013 revisions to the affected provisions of the PSD regulations

, as well as EPA’s statements in the 2010 preamble to the PM 2.5 SILs rule regarding the appropriate use of PM 2.5 SIL values

.

Clarification Regarding Greenhouse Gas Requirements On June 23, 2014, the Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency (No. 12

- 1146) (“ UARG” ) that EPA may not treat greenhouse gases (GHGs) as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a

PSD permit (referred to as “Step 2 of the GHG Tailoring Rule”). The Supreme Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of conventional pollutants, contain
limitations on GHG emissions based on th e application of BACT. District Rule 10.10, Section C incorporates by reference EPA’s PSD regulations at 40 CFR 52.21 as of August 1, 2011. In light of the Supreme Court’s UARG decision, on [DATE], I requested that ARB notify EPA that ARB and the District would like to withdraw from ARB’s April 22, 2013 SIP submittal the portion of District Rule 10.10 that incorporates by reference 40 CFR 52.21(b)(49)(v). This withdrawal is designed to ensure that EPA can act on the District’s SIP submittal consistent
with the Supreme Court’s UARG decision concerning Step 2 of the GHG Tailoring Rule. The District understands
that EPA will need to make revisions to 40 CFR 52.21 as a result of the UARG decision and the associated remand process that is still ongoing. In the i nterim, the District intends to apply 40 CFR 52.21 as incorporated by reference into District Rule 10.10, Section C in manner that is consistent with EPA’s interpretation of the Supreme Court ’s decision and EPA guidance and policy with respect to application of section 52.21 while

revision s to the regulations are pending.

Other PSD Program Requirements :

Existing PSD Permits As part of, and concurrent with, EPA’s approval of the District’s PSD program into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to those sources located in the District that have existing PSD permits issued pursuant by EPA (including those issued by th e District through a delegation agreement with EPA) . This would include authority to conduct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits including, for example, modifications, amendments, or revisions of any nature, and authority to enforce such permits.Discussion of Section 110(a)(2)(E)(i) Pursuant to Section 110(a)(2)(E)(i) of the Clean Air Act, we discuss how the information provided previously and State and District statutory and regulatory requirements demonstrate that the District has adequate personnel, funding, and authority under State and/or local law to implement the PSD program within th e District.

The District has the primary responsibility for regulating air pollution from all stationary sources within the Feather River Air Quality Management District (see California Health & Safety Code (H&SC) sections 39002 and 40000).
The Californ ia Air Resources Board oversees the District’s activities and regulates mobile sources of air pollution. Under State law, the District is required to adopt rules to achieve ambient air quality standards and to enforce the provisions of local, State and fed eral air quality laws (see H&SC section 40001(a)).

The District’s permitting program (which is authorized by H&SC section 42300 and must meet the requirements of section 42301), as approved by EPA, currently implements requirements from both the Californi a and federal Clean Air Acts. The District is authorized by state law to enforce its rules, regulations and orders, including
conditions contained on District

- issued Title V and PSD permits (see H&SC §§ 40752(b); 41513; 42402

- 42403).
District Rules 10.10 and 10.1 provide the District with specific authority to issue PSD permits and otherwise implement and enforce the PSD program

.

As discussed in the District’s February 6, 2013 SIP submittal, Rule 10.10 will result in costs and revenue of $8,400

for the District in Fiscal Year 2012

- 2013 related to provid ing outreach and inform ing the regulated community of
the new requirements. The funding source is permit fee revenue in the Air Pollution Control District fund. There

w ill be no change in net General Fund cost and no additional staff years associated with implementing Rule 10.10

.

We also note that t here are currently 2 stationary sources within the District holding a PSD permit. The District
has some previous experienc e implementing t he federal PSD program through prior delegation agreement s with EPA. And currently, the District implements the PSD program through a partial delegation with EPA for the Otay Mesa Energy Center and Palomar Energy Center

.

The above information shows that the District has adequate legal authority, personnel and funding to implement and enforce the PSD program for sources within the District , including those with existing sources with PSD permits

.

Additional PSD Program Requ irements

Public Participation and Permit Processing Requirements Below are clarifications of the provisions in Rule 10.10 that assure that the public participation and permit processing requirements for PSD programs contained in 40 CFR 51.166(q) are adequately addressed. For each project subject to the PSD permit requirements in Rule 10.10

, SIP

- approved District Rule 10.10 also requires a
D istrict NSR permit

, and the provisions of these rules would apply to such projects

, as applicable, including permit processing procedures and public participation.

1. 40 CFR 51.166(q)(1) states:

The reviewing authority shall notify all applicants within a specified time period as to the completeness of the application or any deficiency in the application or information submitted. In the event of such a deficiency, the date of receipt of the application shall be the date on which the reviewing authority

rec eived all required information.While this requirement is not in Rule 10.10 , this requirement already exists in the District’s SIP

- approved NSR

program

– in Rule 10.1, Section H.1

.

2. 40 CFR 51.166(q)(2) requires that the reviewing authority make a final determination whether construction should be approved, approved with conditions, or disapproved within one year after receipt of a complete application.

While this requirement is not in Rule 10.10 , this requirement is already met in the District’s SIP

- approved NSR program in Rule 10.1, Section H.5.a and I.7.a . Rule 10.1 generally requires a final determination within 180 days of a complete application. Cer tain situations allow for additional time, up to 240 d ays.

Opportunity for Public Hearing 40 CFR 51.166(iii) states:

Notify the public, by advertisement in a newspaper of general circulation in each region in which the proposed
source would be constructed, of the application, the preliminary determination, the degree of increment consumption that is expected from the source or modification, and of the opportunity for comment at a public hearing as well as written public comment.

40 CFR 51.166(q)(iii) requires that the public notification for a preliminary determination include notice of the opportunity for comment at a public hearing. While Section G1.e of Rule 10.10 includes the requirement in 40 CFR 51.166(q)(2)(v) to provide an opportunity for a public hearing, Rule 10.10 does not include the requirement to notify the public of the opportunity to comment at a public hearing. Section G.1.c of Rule 10.10 includes the requirements in 40 CFR 51.166(q)(iii) related to public notific ations except for a reference to the opportunity for comment at a public hearing. While Section G.1.e of Rule 10.10 requires the District to provide an opportunity for a public hearing it is not clear from Rule 10.10 that the notice to the public must ment ion the opportunity to request a public hearing. T he District confirms that it interprets Section H.1 of Rule 10.10 as requiring the public notification to include reference to the opportunity to request a public hearing. The District will ensure that its public notifications mention the opportunity to request a public hearing, and revise Rule 10.10, for clarity, to specifically include this requirement the next time Rule 10.10 is open for revisions.

Notice to EPA 40 CFR 51.166(p)(1) requires the reviewing authority to provide to EPA a copy of each permit application relating to a major stationary source or major modification and notice of every action related to the consideration of a PSD permit:

40 CFR 51.166(p)(1)

– Notice to EPA. The plan shal l provide that the reviewing authority shall transmit to the Administrator a copy of each permit application relating to a major stationary source or major modification and provide notice to the Administrator of every action related to the consideration of such permit.

This requirement is met to a certain extent by Section H.1 of Rule 10.10, which requires the District to provide EPA notice of the preliminary determination and to make the application and final determination materials available for public review, which would include EPA. In addition, this requirement is addressed to a certain extent by the incorporation by reference of 40 CFR 52.21(p)(2), which requires:

(2) Federal Land Manager. The Federal Land Manager and the Federal official charged wi th direct responsibility for management of such lands have an affirmative responsibility to protect the air qualityrelated values (including visibility) of such lands and to consider, in consultation with the Administrator

, whether a proposed source or modification would have an adverse impact on such values. (emphasis added)

In order to ensure the Federal Land Manager (FLM) can work “in consultation with the Administrator”, the District will also provide notice to the EPA of the application and preliminary determination information that is already required to be provided to th e FLM by 40 CFR 52.21(p)(1). This letter is confirmation that the District commits to provide EPA a copy of each permit application relating to a PSD major stationary source or PSD major modification, and to provide EPA notice of every action related to th e consideration of such permit, as required by 51.166(p)(1). Additionally, the District commits to incorporate the provisions in 40 CFR 51.166(p)(1) the next time Rule 10.10 is open for revisions.

[Conclusion]

Sincerely,

xxxxxx Air Pollution Contro l OfficerDATE

Gerardo Rios Chief, Air Permits Office (Air

- 3) EPA Region 9
75 Hawthorne Street San Francisco, CA 94105

RE : Clarifications for Rule 221

– P reventi on of Significant Deteriorat ion (PSD) Permit Requirements

Dear Mr. Rios:

On February 6, 2013 , the California Air Resources Board (CARB) submitted for the Environmental Protection Agency ’s ( EPA ) approval Great Basin Unified Air Pollution Control District (District) Rule 221

– Prevention of Significant Deterioration (PSD) Permit Requirements for New Major Facilities or Major Modifications in
Attainment or Unclassifiable Areas

. This letter provides additional information and clarifications related to greenhouse gas permitting, tr ansferring the PSD program from EPA to the District and ensuring that certain PSD program requirements are met

.

Clarification Regarding Greenhouse Gas Requirements: On June 23, 2014, the Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency (No. 12

- 1146) (“ UARG” ) that EPA may not treat greenhouse gases (GHGs) as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit (referred to as “Step 2 of the GHG Tailoring Rule”). The Supreme Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of conventional pollutants, contain limitations on GHG emissions based on the application of BAC T. District Rule 10.10, Section C incorporates by reference EPA’s PSD regulations at 40 CFR 52.21 as of August 1, 2011. In light of the Supreme Court’s UARG decision, on [DATE], I requested that ARB notify EPA that ARB and the District would like to withd raw from ARB’s April 22, 2013 SIP submittal the portion of District Rule 10.10 that incorporates by reference 40 CFR 52.21(b)(49)(v). This withdrawal is designed to ensure that EPA can act on the District’s SIP submittal consistent with the Supreme Court’s UARG decision concerning Step 2 of the GHG Tailoring Rule. The District understands
that EPA will need to make revisions to 40 CFR 52.21 as a result of the UARG decision and the associated remand process that is still ongoing. In the interim, the District intends to apply 40 CFR 52.21 as incorporated by reference into District Rule 10.10, Section C in manner that is consistent with EPA’s interpretation of the Supreme Court ’s decision and EPA guidance and policy with respect to application of section 52.21 while

revision s to the regulations are pending.

Existing PSD Permits As part of, and concurrent with, EPA’s approval of the District’s PSD program into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to those sources located in the District that have existing PSD permits issued pursuant by EPA . This would include authority to conduct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits including, for example, modific ations, amendments, or revisions of any nature, and authority to enforce such permits.Discussion of Section 110(a)(2)(E)(i) Pursuant to Section 110(a)(2)(E)(i) of the Clean Air Act, we discuss how the information provided previously and
State and Dist rict statutory and regulatory requirements demonstrate that the District has adequate personnel, funding, and authority under State and/or local law to implement the PSD program within the District.

The District has the primary responsibility for regulat ing air pollution from all stationary sources within the District (see California Health & Safety Code (H&SC) sections 39002 and 40000). The California Air Resources Board oversees the District’s activities and regulates mobile sources of air pollution. Under State law, the District is required to adopt rules to achieve ambient air quality standards and to enforce the provisions of local, State and federal air quality laws (see H&SC section 40001(a)).

The District’s permitting program (which is authorize d by H&SC section 42300 and must meet the requirements of section 42301), as approved by EPA, currently implements requirements from both the California and federal Clean Air Acts. The District is authorized by state law to enforce its rules, regulations and orders, including
conditions contained i n District

- issued Title V and PSD permits (see H&SC §§ 40752(b); 41513; 42402

- 42403).
Rule 221 provides the District with specific authority to issue PSD permits and otherwise implement and enforce the PSD progra m

.

As discussed in the District’s February 6, 2013 SIP submittal, i f a proposed facility is subject to PSD regulations, the incorporation of PSD permitting requirements with District permit requirements may require additional resources to oversee the ambient monitoring program for a pre

- application air quality analysis, if it is need ed.
The District w ill apply for EPA Section 105 funds to help cover the additional cost of the PSD permitting program. For permit applicants, combining the PSD permitting process with the District permitting process will streamline the permitting process. Sources will not be required to get permits from both the District and the US EPA, which should reduce their costs associated with dealing with two agencies.

Also, as discussed in the District’s February 6, 2013 submittal, d ue to the lack of large indust rial facilities in our District, there is only one facility that have been subject to PSD regulations in our District (a permit issued in 1979 to facility that is not currently a major source) , and staff is not aware of any planned facilities that may be subject to PSD regulations in the future. If a planned facility becomes subject to this regulation the District will incorporate the PSD permitting requirements into the District’s existing permit procedures for new facilities and
modifications.

The above information shows that the District has adequate legal authority, personnel and funding to implement and enforce the PSD program for sources within the District , including for existing PSD permit s

.

Additional PSD Program Requirements

Notice of Opportunity for Public Hearing

40 CFR 51.166 (iii) states:

Notify the public, by advertisement in a newspaper of general circulation in each region in which the proposed source would be constructed, of the application, the preliminary determination, the d egree of increment consumption that is expected from the source or modification, and of the opportunity for comment at a public hearing as well as written public comment.

40 CFR 51.166(q)(iii) requires that the public notification for a preliminary determination include notice of the opportunity for comment at a public hearing. While Section D.6.v of Rule 221 includes the requirement in 40 CFR51.166(q)(2)(v) to provide an opportunity for a public hearing, Rule 221 does not specifically include the requirement to notify the public of the opportunity to comment at a public hearing. Section D.6.iii of Rule 221 includes the requirements in 40 CFR 51.166(q)(iii) related to publ ic notifications except for a reference to the opportunity for comment at a public hearing. T he District confirms that it interprets Section D.6 of Rule 221 as requiring the public notification to include reference to the opportunity to request a public hearing. The District
will ensure that its public notifications mention the opportunity to request a public hearing, and will revise Rule

221

, for clarity, to specifically include this requirement the next time it is open for revisions.

[Conclusion]

Sincerely,

xxxxxx Air Pollution Control OfficerDATE

Gerardo Rios Chief, Air Permits Office (Air

- 3) EPA Region 9
75 Hawthorne Street San Francisco, CA 94105

RE : Clarifications for Rule 810

– Federal P reventi on of Significant Deteriorat ion (PSD)

Dear Mr. Rios:

On February 10 , 2014 , the California Air Resources Board (CARB) submitted for the Environmental Protection Agency ’s ( EPA ) approval Santa Barbara County Air Pollution Control District (District) Rule 8 10

– Federal Prevention of Significant Deterioration (PSD)

. This letter provides additional information and clarifications
related to greenhouse gas permitting requirements, transferring the PSD p rogram from EPA to the District and ensuring that certain PSD program requirements are met.

Clarification Regarding Greenhouse Gas Requirements : On June 23, 2014, the Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency (No. 12

- 1146) (“ UARG” ) that EPA may not treat greenhouse gases (GHGs) as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit (referred to as “Step 2 of the GHG Tailoring Rule”). The Supreme Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of conventional pollutants, contain limitations on GHG emissions based on the application of BACT. District Rule 10.10, Section C incorporates by
ref erence EPA’s PSD regulations at 40 CFR 52.21 as of August 1, 2011. In light of the Supreme Court’s UARG decision, on [DATE], I requested that ARB notify EPA that ARB and the District would like to withdraw from ARB’s April 22, 2013 SIP submittal the porti on of District Rule 10.10 that incorporates by reference 40 CFR 52.21(b)(49)(v). This withdrawal is designed to ensure that EPA can act on the District’s SIP submittal consistent with the Supreme Court’s UARG decision concerning Step 2 of the GHG Tailoring Rule. The District understands
that EPA will need to make revisions to 40 CFR 52.21 as a result of the UARG decision and the associated remand process that is still ongoing. In the interim, the District intends to apply 40 CFR 52.21 as incorporated by reference into District Rule 10.10, Section C in manner that is consistent with EPA’s interpretation of the Sup reme Court ’s decision and EPA guidance and policy with respect to application of section 52.21 while

revision s to the regulations are pending.

Program Transfer

Existing PSD Permits As part of, and concurrent with, EPA’s approval of the District’s PSD pr ogram into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to those sources located in the District that have existing PSD permits issued pursuant by EPA. This would include authority to con duct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits including, for example, modifications, amendments, or revisions of any nature, and authority to enforce such permits.Discussion of Section 110(a)(2)(E)(i) In the February 10, 2014 submittal, the District provided a detailed discussion of Section 110(a)(2)(E)(i) of the
Clean Air Act that demonstrates the District has adequate personnel, funding, and authority under State and/or local law to implement the P SD program within the District. This previous demonstration also demonstrates the District has adequate personnel, funding, and authority under State and/or local law to implement the PSD program wit hin the District for existing PSD permits.

Additional PSD Program Requirements

Notice of Opportunity for Public Hearing 40 CFR 51.166(iii) states:

Notify the public, by advertisement in a newspaper of general circulation in each region in which the proposed source would be constructed, of the application, the preliminary determination, the degree of increment consumption that is expected from the source or modification, and of the opportunity for comment at a public hearing as well as written public comment.

40 CFR 51.166(q)(iii) requires that the public notification for a preliminary determination include notice of the opportunity for comment at a public hearing. While Section E.5 of Rule 810 includes the requirement in 40 CFR 51.166(q)(2)(v) to provide an opportunity for a public hearing, Rule 810 does not specifically include the requirement to notify the public of the opportunity to comment at a public hearing. Section E.3 of Rule 810
includ es the requirements in 40 CFR 51.166(q)(iii) related to public notifications except for a reference to the opportunity for comment at a public hearing. T he District confirms that it interprets Section E of Rule 810 as requiring the public notification to i nclude reference to the opportunity to request a public hearing. The District will ensure that its public notifications mention the opportunity to request a public hearing, and will revise Rule 810, for clarity, to specifically include this requirement the next time it is open for revisions.

[Conclusion]

Sincerely,

xxxxxx Air Pollution Control OfficerDATE

Gerardo Rios Chief, Air Permits Office (Air

- 3) EPA Region 9
75 Hawthorne Street San Francisco, CA 94105

RE : Clarifications for Rule 220

– Federal P reventi on of Significant Deteriorat ion

Dear Mr. Rios:

On May 13, 2014 , the California Air Resources Board (CARB) submitted for the Environmental Protection Agency ’s ( EPA ) approval San Luis Obispo Air Pollution Control District (District) Rule 220

– Federal Prevention of Significant Deterioration

. This letter provides additional information and clarifications related to greenhouse gas permitting requirements and transferring the PSD program from EPA to the District

.

Clarification Regarding Greenhouse Gas Requirements: On June 23, 2014, the Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency (No. 12

- 1146) (“ UARG” ) that EPA may not treat greenhouse gases (GHGs) as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit (referred to as “Step 2 of the GHG Tailoring Rule”). The Supreme Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of con ventional pollutants, contain limitations on GHG emissions based on the application of BACT. District Rule 10.10, Section C incorporates by reference EPA’s PSD regulations at 40 CFR 52.21 as of August 1, 2011. In light of the Supreme Court’s UARG
decision , on [DATE], I requested that ARB notify EPA that ARB and the District would like to withdraw from ARB’s April 22, 2013 SIP submittal the portion of District Rule 10.10 that incorporates by reference 40 CFR 52.21(b)(49)(v). This withdrawal is designed to e nsure that EPA can act on the District’s SIP submittal consistent with the Supreme Court’s UARG decision concerning Step 2 of the GHG Tailoring Rule. The District understands
that EPA will need to make revisions to 40 CFR 52.21 as a result of the UARG deci sion and the associated remand process that is still ongoing. In the interim, the District intends to apply 40 CFR 52.21 as incorporated by reference into District Rule 10.10, Section C in manner that is consistent with EPA’s interpretation of the Supreme Court ’s decision and EPA guidance and policy with respect to application of section 52.21 while

revision s to the regulations are pending.

Existing PSD Permits As part of, and concurrent with, EPA’s approval of the District’s PSD program into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to those sources located in the District that have existing PSD permits issued pursuant by EPA . This would include authority to conduct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits including, for example, modific ations, amendments, or revisions of any nature, and authority to enforce such permits.

Discussion of Section 110(a)(2)(E)(i) Pursuant to Section 110(a)(2)(E)(i) of the Clean Air Act, we discuss how the information provided previously and
State and Distri ct statutory and regulatory requirements demonstrate that the District has adequate personnel, funding, and authority under State and/or local law to implement the PSD program within the District. Commented [BL1]: Are there any sources in SLO with existing PSD permits? If not, delete.The District has the primary responsibility for regulatin g air pollution from all stationary sources within the District (see California Health & Safety Code (H&SC) sections 39002 and 40000). The California Air Resources Board oversees the District’s activities and regulates mobile sources of air pollution. Unde r State law, the District is required to adopt rules to achieve ambient air quality standards and to enforce the provisions of local, State and federal air quality laws (see H&SC section 40001(a)).

The District’s permitting program (which is authorized by H&SC section 42300 and must meet the requirements of section 42301), as approved by EPA, currently implements requirements from both the California and federal Clean Air Acts. The District is authorized by state law to enforce its rules, regulations and orders, including
conditions contained i n District

- issued Title V and PSD permits (see H&SC §§ 40752(b); 41513; 42402

- 42403).
Rule 220 provides the District with specific authority to issue PSD permits and otherwise implement and enforce the PSD program

.

As discussed in our May 13, 2014 submittal, the District does not expect Rule 220 to have any significant financial impacts (as funding and staffing for PSD permits will be provided through existing fee requirements in

District Rules 301 and 302)

. The last federal PSD permit issued within the District took over 5 years for EPA to process and the applicant has already abandoned the project by then. Rule 220 is expected to streamline the permitting requirements and allow the District to use local timelines and appeal processes for projects that are subject to federal PSD.

The above information shows that the District has adequate legal authority, personnel and funding to implem ent and enforce the PSD program, including for existing PSD permits

.

[Conclusion]

Sincerely,

xxxxxx Air Pollution Control Officer

### Mr. Patrick Au
Air Resources Board Stationary Source Division
P.O. Box 2815 Sacramento, CA 95815

Dear Mr. Au :

This letter is in reference to Rule 20.3 .1 , Prevention of Significant Deterioration

– Federal Requirements

, a dopted by the San Diego County Air Pollution Control District ( SDAPCD ) on April
4 , 2012 , and submitted by SDAPCD to the Air Resources Board (ARB) on September 21, 2012 . In SDAPCD’s September 21 , 2012 letter, I request ed that the package be forwarded to the U.S. Environmental Protection Agency (EPA) as a revision to the Clean Air Act State Implementation Plan (SIP) for SDAPCD . The package was s ubmitted to the EPA by ARB on February 6, 2013

. T he
EPA has not yet taken ac tion on this SIP submittal

.

T he recent U.S. Supreme Court decision in Utility Air Regulatory Group v. Environmental Protection Agency (No. 12

- 1146) (“ UARG ” ) has implications for a portion of this SIP submittal , which we believe will impact the EPA’s action on the submittal

. On June 23 , 2014, the Supreme Court issued its opinion in UARG that EPA may not treat greenhouse gases (GHGs) as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit (refer red to as “Step 2 of the GHG Tailoring Rule”)

. SDAPCD Rule 20.3.1 , Section (b)(1) incorporates by reference EPA’s PSD regulations at 40 CFR 52.21 as in effect on April 4, 2012

.

Th e incorporation by reference in SDAPCD Rule 20.3.1 , Section (b)(1) includ es 40 CFR 52.21(b) (49) (v), which includes Step 2 of the GHG Tailoring Rule

. In light of the Supreme Court’s
UARG decision , I req uest that you notify EPA that ARB and SDAPCD would like to withdraw from
the February 6 , 2013 SIP submittal the portion of SDAPCD Rule 20.3.1 that incorporates by reference 40 CFR 52.21(b) (49) (v)

. This withdrawal is designed to ensure that EPA can act on
SD APCD’s SIP submittal consistent with the Supreme Court’s UARG decision concerning Step 2 of the GHG Tailoring Rule

.

If yo u or your staff ha ve any questions, please do not hesitate to contact me.

Sincerely,

Rosa Maria S. Abreu, Assistant Director
Air Pollution Control District