1

BECKHAM, LISA

From: BECKHAM, LISA

Sent: Thursday, October 23, 2014 4:11 PM

To: goldmanm@sbcapcd.org; gwilley@co.slo.ca.us; dono@gbuapcd.org;

bmclaughlin@bcaqmd.org; Christopher D. Brown AICP

Subject: Status of Pending PSD Rules with EPA

Attachments: Sample District GHG Step 2 Withdrawal Letter 10-8-2014.docx; Clarification Letter for 

Santa Barbara 10-23-2014.docx; Clarification Letter for SLO 10-23-2014.docx; 

Clarification Letter for Butte 10-23-2014.docx; Clarification Letter for Feather River 

10-23-2014.docx; Clarification Letter for Great Basin 10-23-2014.docx

Good afternoonMany of you have probably been waiting for some time to hear from me regarding your PSD rules submitted to EPA for 

approval. We now have a potential option that we think would allow us to move forward with approving these rules. 

Attached is a clarification letter for each District addressing certain items within each District’s SIP submittal. There is 

also a sample withdrawal letter (not tailored to individual districts) that each District could send to ARB requesting to 

withdrawal the portion of your submittal related to the Supreme Court’s Decision on GHGs (aka Step 2 of the Tailoring 

Rule). 

Please take a look at the attached documents and see if you think this option would work for your district. I will follow 

up this email with a meeting invitation for next week to have a call to discuss any questions or concerns you may have. 

Your patience is greatly appreciated as we have tried to review and approve these rules. 

Thanks, 

Lisa Beckham 

Environmental Engineer 

Air Permits Office 

EPA Region 9 

(415) 972-3811 
DATE

Gerardo Rios

Chief, Air Permits Office (Air-3)

EPA Region 9

75 Hawthorne Street

San Francisco, CA 94105

RE: Clarifications for Rule 1107 – Prevention of Significant Deterioration (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) Permits. 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 

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 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 

revisions 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, 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 the District. 

The District has the primary responsibility for regulating 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 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 in 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 program.

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 actual expenditures in issuing a permit on a time and material basis. California districts have estimated 

the actual labor hours 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 

implement 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 include 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 notify 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 the 
opportunity 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. The District confirms that it interprets 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 Officer
DATE

Gerardo Rios

Chief, Air Permits Office (Air-3)

EPA Region 9

75 Hawthorne Street

San Francisco, CA 94105

RE: Clarifications for Rule 10.10 – Prevention of Significant Deterioration

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 intended to clarify the District’s position concerning the application of the 

PM2.5 Significant Impact Levels (SILs) and the PM2.5 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)

in 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.

Clarification Regarding PM2.5 Issues:

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 PM2.5 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 PM2.5 SMC, finding that EPA was precluded from 

using the PM2.5 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, revisions 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 Fed. Reg. 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 Rule 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 reference 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. 

PM2.5 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 established SILs for PM2.5 and read as follows: 
(k)(2) Significant impact levels. For purposes of PM2.5, 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 following 

amounts: 

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

PM2.5

Annual 0.06 μ/m3 0.3 μ/m4 0.3 μ/m5

24-hour 0.07 μ/m3 1.2 μ/m5 1.2 μ/m6

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 contribute 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 determine 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 Particulate Matter Less 

than 2.5 Micrometers (PM2.5) – 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) provision “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 regulations 

consistent with that 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 PM2.5 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 modification. 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 that 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 PM2.5 SIL values is appropriate when a 

substantial portion of the PM2.5 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 PM2.5 Permit Modeling released by EPA on 

May 20, 2014 for determining the appropriate application of the PM2.5 SILs going forward.

PM2.5 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 emissions increase is below the applicable SMC. Thus, this provision,

as in effect on August 1, 2011, specifically at section 52.21(i)(5)(i)(c), as incorporated into Rule 10.10, provides
the District with the discretion to determine whether it is appropriate to apply the SMC for PM2.5 to exempt a 

permit applicant from the requirement to compile and submit preconstruction ambient monitoring data for 

PM2.5 as part of a complete PSD application. Consistent with the Court’s decision in Sierra Club v. EPA vacating 

the PM2.5 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 PM2.5 SMC in order to exempt PSD permit 

applicants from the requirement in Clean Air Act section 165(e)(2) that ambient monitoring data for PM2.5 be 

included in applications subject to the PSD program for PM2.5. Accordingly, the District will require all applicants 

requesting a PSD permit from the District, including those that have already applied for but which have not yet 

received a permit, to submit ambient PM2.5 monitoring data in accordance with Clean Air Act requirements 

whenever proposed increases of direct PM2.5 emissions or any emissions of a PM2.5 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 PM2.5 SILs rule regarding the appropriate use of PM2.5 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 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 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 

revisions 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 the 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 the 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 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 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 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 providing outreach and informing the regulated community of 

the new requirements. The funding source is permit fee revenue in the Air Pollution Control District fund. There 

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

We also note that there are currently 2 stationary sources within the District holding a PSD permit. The District 

has some previous experience implementing the federal PSD program through prior delegation agreements 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 Requirements

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 

District 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 

received 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. Certain situations allow for additional time, up to 240 days.

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 notifications 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 mention the opportunity to 

request a public hearing. The 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 shall 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 with direct 

responsibility for management of such lands have an affirmative responsibility to protect the air quality 
related 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 the 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 the 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 Control Officer
DATE

Gerardo Rios

Chief, Air Permits Office (Air-3)

EPA Region 9

75 Hawthorne Street

San Francisco, CA 94105

RE: Clarifications for Rule 221 – Prevention of Significant Deterioration (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, 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 

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 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 

revisions 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, 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 the District. 

The District has the primary responsibility for regulating 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 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 in 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 program.

As discussed in the District’s February 6, 2013 SIP submittal, if 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 needed. 

The District will 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, due to the lack of large industrial 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 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 D.6.v of Rule 221 includes the requirement in 40 CFR 
51.166(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 public notifications except for a reference to the 

opportunity for comment at a public hearing. The 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 Officer
DATE

Gerardo Rios

Chief, Air Permits Office (Air-3)

EPA Region 9

75 Hawthorne Street

San Francisco, CA 94105

RE: Clarifications for Rule 810 – Federal Prevention of Significant Deterioration (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 810 – Federal 

Prevention of Significant Deterioration (PSD). 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 

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 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 

revisions to the regulations are pending.

Program Transfer

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, 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 PSD 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 within 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 

includes 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. The District confirms that it interprets Section E of Rule 810 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 

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

[Conclusion]

Sincerely, 

xxxxxx

Air Pollution Control Officer
DATE

Gerardo Rios

Chief, Air Permits Office (Air-3)

EPA Region 9

75 Hawthorne Street

San Francisco, CA 94105

RE: Clarifications for Rule 220 – Federal Prevention of Significant Deterioration

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 conventional 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 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 

revisions 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, 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 the District. 

Commented [BL1]: Are there any sources in SLO with existing 

PSD permits? If not, delete.
The District has the primary responsibility for regulating 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 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 in 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 

implement 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, adopted 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 requested 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 submitted to the EPA by ARB on February 6, 2013. The 

EPA has not yet taken action on this SIP submittal. 

The 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 

(referred 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. 

The incorporation by reference in SDAPCD Rule 20.3.1, Section (b)(1) includes 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 request 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 

SDAPCD’s SIP submittal consistent with the Supreme Court’s UARG decision concerning Step 2 of 

the GHG Tailoring Rule.

If you or your staff have any questions, please do not hesitate to contact me.

Sincerely, 

Rosa Maria S. Abreu, Assistant Director

Air Pollution Control District