SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

FINAL STAFF REPORT 

Update to Rule 2201 Best Available Control Technology (BACT) 

Cost Effectiveness Thresholds

May 14, 2008 

Prepared by: Ben Ellenberger, Air Quality Engineer 

 Leonard Scandura, Supervising Air Quality Engineer 

Reviewed by: David Warner, Director of Permit Services 

 Carlos Garcia, Senior Air Quality Engineer 

I. Summary 

The current Rule 2201 Best Available Control Technology (BACT) cost effectiveness 

thresholds were incorporated into the San Joaquin Valley Air Pollution Control District’s 

(SJVAPCD) BACT policy upon formation of the SJVAPCD in 1991. The cost 

effectiveness thresholds used by the SJVAPCD have not been updated since that time. 

In a November 2005 report on their 2003 program review of the SJVAPCD, the 

California Air Resources Board (CARB) indicated that the SJVAPCD’s BACT cost 

effectiveness thresholds were substantially lower than other Districts with similar or 

better air quality status and suggested that the cost effectiveness thresholds be 

increased. 

Although SJVAPCD staff has not seen differences in the results of BACT analyses 

when compared to other air Districts, in our 2006 response to the CARB program review 

we made a commitment to CARB to form a workgroup of SJVAPCD staff, industry 

representatives, environmental and community group representatives to investigate 

CARB’s concerns and recommend SJVAPCD action, if appropriate, to the Air Pollution 

Control Officer. 

Members of the workgroup included District staff, industry representatives Daryl 

Gunderson of Aera Energy, Chris Savage of E & J Gallo, and Roger Isom of California 

Cotton Ginners and Growers Association; and environmental and community group 

representatives Sarah Jackson of Earthjustice, Carolina Simunovic of Fresno Metro 

Ministry, and Caroline Farrell of Center on Race, Poverty and the Environment. CARB 

and EPA staff were invited to participate in this process; each provided verbal or written 

comments. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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The proposed updates are the result of the workgroup’s collaborative effort, careful 

discussion, and detailed analysis over several months in 2007. The investigations of 

this group confirmed overall impressions that there are no significant differences in the 

results of SJVAPCD’s past BACT analyses when compared to other Districts. One 

conclusion was that the SJVAPCD’s cost effectiveness thresholds are not directly 

comparable to those of other Districts because the method in which the calculated 

emission reduction is determined is inherently different. 

By way of explanation, the SJVAPCD’s comparatively low cost effectiveness thresholds 

are offset by the method in which the SJVAPCD calculates the emission reduction due 

to installation of technologically feasible control equipment. The SJVAPCD’s current 

methodology calculates the emission reduction due to installing technologically feasible 

control equipment on equipment available on a nationwide basis. Equipment available 

on a nationwide basis typically has higher emissions than that allowed by SJVAPCD 

rules. 

As a result, the calculated emission reduction due to installing technologically feasible 

control equipment is relatively large, making the cost effectiveness of such control 

equipment relatively low, using the standard cost effectiveness equation: 

 cost effectiveness ($/ton) = annualized cost of tech feasible control ($/year)

 calculated emission reduction (ton/year) 

The SJVAPCD’s current relatively low cost effectiveness thresholds are appropriate 

given the typically large emission reductions determined using the SJVAPCD’s current 

emission reduction calculation methodology. 

Other Districts with higher cost effectiveness thresholds determine the calculated 

emission reduction due to installing technologically feasible control equipment on 

equipment that is in compliance with the District’s rules. Such equipment typically has 

lower emissions than that available on a nationwide basis. In those cases, the 

calculated emission reduction is low, making the cost effectiveness high. In such cases, 

higher cost effectiveness thresholds are appropriate. 

An examination of the BACT guidelines of the SJVAPCD and other Districts revealed 

that the SJVAPCD’s BACT requirements are as stringent or more stringent that those of 

other California Districts. As such, the SJVAPCD’s current thresholds and emission 

reduction calculation methodology do not result in less stringent BACT requirements. 

To address CARB’s concern and to eliminate the appearance of inconsistency when 

compared to other Districts, the workgroup has generally concluded that the cost 

effectiveness thresholds and emission reduction calculation methodology should be 

updated to make the SJVAPCD’s cost effectiveness thresholds and emission reduction 

calculation methodology consistent with that of other Districts. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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These two changes taken together should not have a significant effect on the outcome 

of the majority of cost effectiveness analyses performed by the SJVAPCD. 

II. Current Cost Effectiveness Thresholds And Emission Reduction 

Calculation Methodology 

Rule 2201 section 3.9 defines BACT as the most stringent emission limitation or control 

technology that is: 

• Achieved in practice for such category and class of source, 

• Required by an EPA approved State Implementation Plan, i.e. required by a Rule 

that has been approved by EPA, 

• Required by a Federal New Source Performance Standard (NSPS), or 

• Is found to be both technologically feasible and cost effective for such class or 

category of sources or for a specific source. 

The Rule 2201 definition of BACT is not proposed to be changed. 

Please note that if an emission limit or control technology is achieved in practice for a 

category and class of source, required by an EPA approved SIP, or is required by a 

Federal NSPS such control is required regardless of cost. As such, the cost 

effectiveness analysis process only includes those technologically feasible control 

technologies that are not achieved in practice for a category and class of source, 

required by an SIP, or required by an NSPS requirement. 

The cost effectiveness thresholds currently used by the SJVAPCD to determine if a 

technologically feasible control technology is cost effective are as follows: 

Pollutant Cost effectiveness ($/ton)

NOx 9,700

CO 300

VOC 5,000

SOx 3,900

PM10 5,700

In determining if a technologically feasible control technique is cost effective, the cost 

effectiveness of a particular control technology is compared to the cost effectiveness 

thresholds for a given pollutant. 

For example, if the cost effectiveness for NOx control technique A is $6,000/ton, such a 

control technique is determined to be cost effective because its cost effectiveness 

($6,000/ton) is less than the SJVAPCD’s cost effectiveness threshold ($9,700/ton). As a 

result, NOx control technique A would be required. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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Alternatively, if the cost effectiveness for NOx control technique B is $30,000/ton, such 

a control technique is determined not to be cost effective because its cost effectiveness 

($30,000/ton) is greater than the SJVAPCD’s cost effectiveness threshold ($9,700/ton). 

As a result, NOx control technique B would not be required. 

Currently, to determine the cost effectiveness of a particular control technique, the 

annual costs of the control (annualized capital costs plus annual operating costs) are 

divided by the calculated emission reduction due to that particular control technique. 

The emissions reduction is calculated as the difference between emissions from 

equipment available on a nationwide basis and emissions from such equipment 

equipped with technologically feasible control. 

Cost effectiveness ($/ton) = 

 Annual cost ($/year) 

 Emissions (available nationwide) – Emissions (w/ tech feas BACT) (ton/year) 

 

Emissions from equipment used nationwide can be higher than SJVAPCD prohibitory 

rules allow for existing equipment. As a result the calculated emission reduction can be 

overstated, i.e. the calculated emission reduction can be larger than the actual 

emissions reduced due to installing technologically feasible control on equipment that 

must otherwise meet SJVAPCD prohibitory rule requirements. 

III. Survey of other Districts, CARB, and EPA

The workgroup surveyed the South Coast Air Quality Management District (SCAQMD), 

Bay Area Air Quality Management District (BAAQMD), Sacramento Metropolitan Air 

Quality Management District (SMAQMD), Yolo-Solano Air Quality Management District 

(YSAQMD), San Diego County Air Pollution Control District (SDAPCD), California Air 

Resources Board (CARB), and the US Environmental Protection Agency (EPA) for the 

following: 

• BACT cost effectiveness thresholds 

• Methodology for calculating the “emission reduction” in cost effectiveness 

analyses 

Survey of cost effectiveness thresholds:

Summary of BACT Cost Effectiveness Thresholds ($/ton) 

 SCAQMD1 BAAQMD SMAQMD YSAQMD SDAPCD2 CARB2 EPA2

NOx 19,100 17,500 24,500 24,500 18,000 N/A N/A

CO 400 N/A N/A 300 N/A N/A N/A

VOC 20,200 17,500 17,500 17,500 10,200 N/A N/A

SOx 10,100 18,300 18,300 3,900 N/A N/A N/A

PM10 4,500 5,300 11,400 5,700 N/A N/A N/A
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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Notes: 

1

The SCAQMD’s method of amortizing control equipment costs is now inherently different from the 

methods used by the other Districts. The SCAQMD method tends to result in lower amortized control 

equipment costs (and therefore lower cost effectiveness thresholds). Because the SCAQMD 

amortization method is inherently different than that used by other Districts, it will not be considered 

further. 

2

SDPACD does not have thresholds for CO, SOx, and PM10. CARB and EPA do not have defined 

thresholds for any air contaminant. 

The results of the survey indicate that all other Districts have cost effectiveness 

thresholds much greater than the SJVAPCD for each affected pollutant, except CO. 

The average of other District’s cost effectiveness thresholds (except SCAQMD) and the 

% difference from the SJVAPCD’s existing levels are as follows: 

Average cost effectiveness thresholds ($/ton) 

NOx CO VOC SOx PM10 

21,100 300 15,700 13,500 7,500 

117% 0% 214% 246% 32% 

The highest cost effectiveness thresholds of other surveyed Districts and the % 

difference from the SJVAPCD’s existing levels are as follows: 

Highest cost effectiveness thresholds ($/ton) 

NOx CO VOC SOx PM10 

24,500 300 17,500 18,300 11,400 

150% 0% 250% 370% 100% 

Survey of emission reduction calculation methodology:

District Emission reduction calculation methodology 

SCAQMD No defined method for determining "emissions without 

controls" emissions in BACT cost analyses. However, usually 

use the Prohibitory Rule limits to determine industry standard 

emissions. 

BAAQMD No defined method for determining "emissions without 

controls" in BACT cost effectiveness analyses. However, 

usually use the Prohibitory Rule limits to determine industry 

standard emissions. 

SMAQMD No defined method for determining "emissions without 

controls" in BACT cost effectiveness analyses. Case-by-case 

determination is used. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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District Emission reduction calculation methodology 

YSAQMD No defined method for determining "emissions without 

controls" in BACT cost effectiveness analyses. Case-by-case 

determination is used. 

SDAPCD No defined method for determining "emissions without 

controls" in BACT cost effectiveness analyses. However, for 

new and modified equipment that has never triggered BACT, 

usually use AP-42 to determine “emissions without controls” 

unless something else makes more sense. For modified 

equipment that has previously been subjected to BACT, they 

calculate the emission reductions from the currently permitted 

emission rate. 

CARB No guidance available 

EPA General guidance is the “emissions without controls” is the 

realistic upper boundary of uncontrolled emissions, i.e. the 

highest emitting operation that the facility would use (in the 

absence of a rule requirement). 

When performing a cost effectiveness analysis, most other Districts calculate the 

emission reduction based on the allowable emissions in District Rules, and not on 

emissions from equipment available on a nationwide basis. 

IV. Options For Revising The SJVAPCD BACT Policy: 

Option #1: Do not change current cost thresholds and emission reduction calculation 

methodology 

An examination of the results of SJVAPCD cost effectiveness analyses performed 

using the SJVAPCD’s current thresholds and emission reduction calculation 

methodology and using other Districts’ cost effectiveness thresholds and emission 

reduction calculation methodology revealed that results are typically similar, i.e. the 

current method usually results in BACT requirements no more or less stringent than 

other Districts’ BACT requirements. However, continuing to use the current system 

can result in the impression by oversight agencies and others that the SJVAPCD’s 

BACT requirements are less stringent than those of other Districts. 

Additionally, using “nationwide emissions” in cost effectiveness calculations is 

problematic; the determination of such an emission level is somewhat subjective and 

such equipment can not typically be operated in the SJVAPCD. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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Option #2: Increase the cost thresholds to the average of the other surveyed Districts 

and change the methodology used in calculating the emission reduction to 

that used by most other Districts, i.e. calculate the emission reductions as 

the difference between emissions required by SJVAPCD rules and 

emissions with technologically feasible controls. 

Some of the Districts surveyed have a similar non-attainment status as the 

SJVAPCD (SCAQMD, SMAQMD, and YSAQMD) and others have a lesser nonattainment status (BAAQMD and SDAPCD). Districts with better air quality generally 

have lower cost effectiveness thresholds. As such their cost effectiveness 

thresholds tend to decrease the average cost effectiveness threshold. 

Because of the SJVAPCD’s extreme non-attainment status for ozone and nonattainment status for PM2.5, using the average of the other District’s cost 

effectiveness thresholds in the SJVAPCD may not be adequately protective of the 

SJVAPCD’s air quality. 

Option #3: Increase the cost thresholds to the highest of the other surveyed Districts 

and change the methodology used in calculating the emission reduction to 

that used by most other Districts, i.e. calculate emission reductions as the 

difference between industry standard emissions (i.e. emissions required 

by SJVAPCD rules) and emissions with technologically feasible controls. 

Option #3 is the recommended approach given the SJVAPCD’s extreme nonattainment status. In addition, using SJVAPCD rule limits (or permitted emission 

limits) as the starting point for calculating emission reductions from installing 

technologically feasible controls is less subjective and is a better estimate of the 

actual emission reduction achievable due to installing technologically feasible 

controls. 

V. Proposed Cost Effectiveness Thresholds And Emission Reduction 

Calculation Methodology 

The proposed cost effectiveness thresholds (option #3) to determine if a technologically 

feasible control technology is cost effective are as follows: 

Pollutant Cost effectiveness ($/ton)

NOx 24,500

CO 300

VOC 17,500

SOx 18,300

PM10 11,400
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Update to BACT Cost Effectiveness Thresholds May 14, 2008 

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Proposed emission reduction calculation methodology: 

Cost effectiveness ($/ton) = 

 Annual cost ($/year) 

District Standard Emissions – Emissions (w/ tech feas BACT) (ton/year) 

Annual costs are equal to annualized cost of utilizing technologically feasible BACT 

controls on an emission unit that already meets District standard emissions. Annual 

costs do not include costs necessary to meet District standard emissions. 

For new emission units, District standard emissions are equal to the emissions level 

allowed by applicable SJVAPCD rule requirements once the compliance date, i.e. the 

date at which the emission unit must meet a specific emission requirement, for the rule 

has passed. For rules with a phased compliance schedule, the earliest compliance date 

which applies to the equipment being analyzed shall be used. The emission limits in the 

applicable SJVUAPCD prohibitory rule shall be those that the particular emission unit is 

subject to. Please note that if the applicable rule has both a standard and enhanced 

compliance option, the emission level and earliest compliance date required by the 

standard compliance option shall be used. 

For existing emission units, District standard emissions are equal to the emissions level 

allowed by the current PTO. 

If there is no SJVAPCD prohibitory rule emission limit that applies to the particular new 

emission unit or if the existing emission unit does not have permitted emission limits, 

District standard emissions for the unit are equal to the emissions from similar 

equipment that is commonly available in the District. In no case shall the emissions 

used be higher than that allowed by State or Federal requirements. If insufficient 

information is available to make a determination regarding emissions from common 

available equipment in the District, District standard emissions will be estimated based 

on EPA’s Compilation of Air Pollutant Emission Factors (AP-42), or other references as 

determined by the SJVAPCD to be appropriate.