ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2010-1078; FRL-____]

Revision to the South Coast Portion of the California State 

Implementation Plan, CPV Sentinel Energy Project AB 1318 

Tracking System

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Rule

SUMMARY: The Environmental Protection Agency (EPA) is taking 

final action to approve a source-specific State Implementation 

Plan (SIP) revision for the South Coast Air Quality Management 

District (District) portion of the California SIP. This sourcespecific SIP revision is known as the CPV Sentinel Energy 

Project AB 1318 Tracking System. The SIP revision consists of 

enabling language and the AB 1318 Tracking System to revise the 

District’s SIP approved New Source Review (NSR) program. The 

SIP revision allows the District to transfer offsetting emission 

reductions for particulate matter less than 10 microns in 

diameter (PM10) and one of its precursors, sulfur oxides (SOx), 

to the CPV Sentinel Energy Project, which will be a natural gas 

fired power plant.

DATES: This final rule is effective on [insert date 30 

days after publication].
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Docket: The index to the docket for this action is 

available electronically at www.regulations.gov and in hard copy 

at EPA Region IX, 75 Hawthorne Street, San Francisco, 

California. While all documents in the docket are listed in the 

index, some information may be publicly available only at the 

hard copy location (e.g., copyrighted material), and some may 

not be publicly available in either location (e.g., CBI). To 

inspect the hard copy materials, please schedule an appointment 

during normal business hours with the contact listed in the FOR 

FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA 

Region IX, (415) 972-3524, yannayon.laura@epa.gov. 

SUPPLEMENTARY INFORMATION: Throughout this document, “we”, 

“us”, and “our” refer to EPA.

Table of Contents

I. Background

II. Evaluation of Source-Specific SIP Revision

A. What action is EPA finalizing?

B. Public comments and responses to comments

III. EPA Action

IV. Statutory and Executive Order Reviews
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A. Executive Order 12866, Regulatory Planning and Review and 

Executive Order 13563: Improving Regulation and Regulatory 

Review 13563

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132, Federalism

F. Executive Order 13175, Coordination with Indian Tribal 

Governments

G. Executive Order 13045, Protection of Children from 

Environmental Health Risks and Safety Risks

H. Executive Order 13211, Actions that Significantly 

Affect Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Population

I. Background

The proposed Sentinel Energy Project is designed to be a 

nominally rated 850 megawatt electrical generating facility 

covering approximately 37 acres within Riverside County, 

adjacent to Palm Springs, California. EPA’s proposal for this

action contained a detailed description of the project and the 

Clean Air Act’s (CAA) requirements for offsets during New Source 
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Review permitting. 76 FR 2294 (January 13, 2011) With our 

proposal to approve this SIP revision, EPA attached the complete 

list of PM10 and SOx offsetting emission reductions that are 

being transferred in the AB 1318 Tracking System to our

Technical Support Document (TSD). Documentation for each of the

offsetting emission reductions listed in the attachment to the 

TSD was included in the docket for the proposal in hard copy at 

EPA’s offices as well as other locations. For additional 

background information please see the January 13, 2011 proposed 

notice for this action. (76 FR 2294)

II. Evaluation of Source-Specific SIP Revision

A. What is the rule that EPA is finalizing?

EPA is finalizing a SIP revision for the South Coast 

portion of the California SIP. The SIP revision will be 

codified in 40 CFR 52.220 by incorporating by reference the 

Offset Requirements for the Proposed CPV Sentinel Power Plant, 

including the CPV Sentinel Energy Project AB 1318 Tracking 

System, as adopted by the District. 

The SIP revision provides a federally approved and 

enforceable mechanism for the District to transfer PM10 and SOx

offsetting emissions reductions from the District’s internal 

bank to the Sentinel Energy Project and to track those emissions 

credits through the AB 1318 Tracking System. 

B. Public Comment and Final Action
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In response to our January 13, 2011 proposed rule, we 

received four comments, one each from the South Coast Air 

Quality Management District (District), Michael Carroll of 

Latham & Watkins LLP, the Natural Resources Defense Council 

(NRDC), and the Law Offices of Angela Johnson-Mezaros on behalf 

of California Communities Against Toxics and Communities for a 

Better Environment (jointly referred to herein as “CCAT”). 

Copies of each comment letter have been added to the docket and 

are accessible at regulations.gov. The comment from the 

District supported EPA’s analysis and proposed source-specific 

SIP revision and provided an errata sheet correcting minor typos 

and the amount of SOx offsets available in the AB1318 Tracking 

System (reduced the quantity by 92 lbs). The comment from 

Latham & Watkins was also supportive of our proposed action. 

The comment from NRDC generally opposed the SIP revision but did 

not provide any specific grounds for its opposition or raise any 

specific issues. To the extent that NRDC generally opposes the 

SIP revision, our response to its general opposition is included 

below with our response to CCAT’s more specific comments. We 

have summarized CCAT’s comments (based on the structure of their 

comment letter) and provide our response to each comment below.

Comment I: CCAT comments that EPA did not allow meaningful 

public participation on the SIP revision for several reasons and 
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that approval of the SIP revision based on the available 

information would be arbitrary and capricious. 

Comment I.A: CCAT contends the regulatory text of the SIP 

revision is too vague and incomplete to be federally 

enforceable. CCAT contends that the SIP revision consists of 

preambular or background language and that the list of emissions 

credits being transferred is not included in the SIP revision. 

Response I.A: CCAT is incorrect on both points. EPA’s proposed 

approval quoted the text of the proposed source-specific 

revision in the section of the proposal entitled “What is in the 

SIP Revision?” (76 FR at 2295) and also posted the text in the 

docket at Index No. I-B. Upon finalizing the approval, EPA will 

codify this revision at 40 CFR 52.220. The SIP revision, 

therefore, consists of the regulatory text that was quoted in 

EPA’s proposed rule. Before quoting the language in the 

proposed approval, we identified the language stating: “The text 

of the proposed source-specific SIP revision is . . ..” 76 FR 

at 2295. This is the language that will be incorporated by 

reference in 40 CFR 52.220. Therefore it is not preambular or 

background language as stated by CCAT. The SIP revision 

language was available to the public. This comment contains 

other conclusory statements such as characterizing the SIP 

revision as being too vague to be enforceable because it does 
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not provide an enforceable mechanism for generating emissions 

credits. These additional statements are generally repeated 

elsewhere in the comment letter with more specificity. We have 

responded to the more detailed comments rather than the very 

general and conclusory statements in this section of the comment 

letter. 

The full list of the credits that will be transferred is

incorporated by reference into the SIP revision. Incorporation 

by reference of materials such as the list of the emissions 

credits being transferred is permissible and there is no 

requirement for EPA to include the list of credits in the 

regulatory text that will be published in the Code of Federal 

Regulations. See Use of Incorporation by Reference as a 

Mechanism for Shortening Federal Register Notices, from Gerald 

H. Yamada, Principal Deputy General Counsel to Regulatory Policy 

Group, dated Jan. 12, 1995. See also 1 CFR Part 51. 

The comment also contends that the SIP revision is 

insufficient because it does not contain a “mechanism for 

generating and validating the credits”. The SIP revision does 

not purport to provide a mechanism for generating credits. This 

SIP revision provides an enforceable mechanism for the District 

to transfer previously generated emissions credits and 

incorporates the list of those emissions credits. The Sentinel 
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Energy Project is a source that is not authorized to receive 

emissions credits from the District’s internal accounts in the 

absence of this SIP revision because it is not a source category 

or type of project listed in Rule 1304 as exempt or in Rule 

1309.1 as a priority reserve source. Thus, the general 

assertions submitted by CCAT that the public did not have 

adequate notice for a variety of reasons does not provide any 

basis for EPA to alter its proposed approval of this SIP 

revision.

Comment I.B: CCAT contends the Federal Register Notice and TSD

are unclear and provide an inconsistent description of the 

proposed SIP revision.

Response I.B: EPA disagrees with the comment and notes that 

CCAT has not provided any specific examples in which the 

proposal and TSD are vague or inconsistent. CCAT also contends 

that AB 1318 is of minor relevance to this action. EPA agrees 

with this comment. EPA did not propose approval of this action 

based on the State legislation and has discussed that action 

only as background. EPA proposed to approve this SIP revision 

because it complies with the requirements of the CAA.

Within this comment, CCAT also asserts that EPA’s record 

for proposing approval of the District’s SIP revision provides 
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an inadequate justification. CCAT contends that EPA’s record is 

deficient because it does not acknowledge or explain that the 

proposed SIP revision purportedly does three separate things: 

first, codify in federal law an entirely new method for the 

SCAQMD to generate emission credits; second, apply that 

generation method to specific reductions dating back to 1999; 

and third, transfer the credits out of the SCAMQD’s internal 

bank. See CCAT Letter at 3.

CCAT’s first contention is that EPA does not explain or 

acknowledge that it is codifying into federal law a new method 

for the District to generate emissions credits. The problem 

with CCAT’s comment is that EPA is not codifying a new method 

for the District to generate emissions credits.1 The emissions 

credits the District is transferring pursuant to its AB 1318 

Tracking System are emission credits that existed in the 

District’s internal accounts. The AB 1318 Tracking System 

contains the District’s accounting of these specific credits and 

a mechanism for transferring these emissions credits from the 

District’s internal account to Sentinel. The SIP revision does 

 

1 On February 4, 2011, the District adopted Rule 1315 – Federal New Source 

Review Tracking System – which does provide a general rule for the District 

to credit and debit emissions credits in its internal accounts. The District 

has submitted Rule 1315 to EPA as a SIP revision. EPA will be acting on the 

Rule 1315 submittal in a separate Notice of Proposed Rulemaking and will 

provide a 30 day comment period with that action. Some of CCAT’s comments on 

this proposal may be more properly directed to any action that EPA proposes 

to take on District Rule 1315.
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not establish a new method for the District to generate emission 

credits. EPA reviewed the submitted documentation demonstrating 

that a sufficient number of these specific emissions credits 

being transferred meet the federal integrity criteria required 

by section 173 of the CAA.

CCAT’s second contention is that the District is now 

generating credits from emissions reductions that occurred up to 

two decades ago and also that the District’s internal bank 

accounts have negative balances. While some of the emissions 

credits that the District is transferring arose from events in 

1999, most occurred after 2003, therefore characterizing 1999 as 

being two decades ago may be technically correct but somewhat 

misleading. CCAT also states that no evidence of the actual 

dates of when the reductions occurred is contained in the public 

record. This is incorrect. The support documentation, which is 

voluminous and was available for review in hard copy, explicitly 

contains this information. In any event, we have reviewed the 

documentation for the emissions reductions, including those

associated with events that occurred in 1999 and consider those 

1999 emissions credits to meet the requirements of section 173 

of the CAA.

CCAT also contends the District has “negative balances” in 

its internal accounts. For the purposes of this SIP revision, 
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the balance of the District’s internal accounts is not relevant, 

since EPA examined each of the specific emission reduction 

actions that are the basis for the credits being transferred 

pursuant to this SIP revision and found a sufficient quantity –

compared to the amount needed for the CPV Sentinel Energy 

Project, to meet the CAA offset requirements. 

CCAT, NRDC and associated groups raised the same issue in a 

Petition to the Administrator in December 2010. In responding 

to the Petition, the Administrator examined the emission credits 

in the District’s internal accounts following passage of SB 827. 

SB 827 was a companion bill to AB 1318 which directed the 

District to transfer emissions credits from their internal 

accounts to exempt sources covered by Rule 1304 and priority 

reserve sources covered by Rule 1309.1 beginning in January 

2011. A copy of the Administrator’s petition response letter is 

attached to and incorporated into this Response to Comments

because the same general issues arise with respect to AB 1318 

and SB 827. The Administrator’s letter details the Agency’s 

determination that the District may use emissions reductions 

from previously shutdown sources, including minor source orphan 

shutdowns, to fund its internal accounts. The Administrator’s 

letter also disagrees with assertions that the District’s 

internal accounts have negative balances. Thus, for all of the 
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reasons set forth in the Administrator’s letter, EPA disagrees 

with CCAT that this SIP revision constitutes codifying a new 

system of generating emissions credits, that the District’s 

internal accounts have negative balances or that the emission 

credits are invalid because they were created more than two 

decades ago.

CCAT’s third contention is that this SIP revision allows 

the District to transfer ownership of emission credits out of 

the District’s internal bank. EPA agrees with this contention 

but CCAT has not raised any specific reason that such a transfer 

is contrary to the requirements of the CAA and this comment does 

not provide any basis for EPA to alter its proposal to approve 

the SIP revision providing a federal mechanism to enforce the 

transfer of ownership of these emission credits. The District’s 

decision to transfer valid emission credits is a policy 

decision. 

CCAT states that the project description of the SIP 

revision is confusing because it does not “admit” that EPA is 

approving a revision to SIP-approved Rules 1303 and 1309.1. 

CCAT’s assertion that this action constitutes a revision of 

either Rule 1303 or 1309.1 is incorrect. Instead, as stated in 

the actual SIP revision, the action is providing an additional 

federally enforceable mechanism for the District to transfer 
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emission credits from its internal bank to the Sentinel project. 

But the District has not revised and EPA is not approving a 

revision to Rules 1303 and 1309.1.

Comment I.C: CCAT asserts that EPA did not include critical 

documents in the docket for this proposed rulemaking.

Response I.C: CCAT appears to be criticizing the fact that 

scanned copies of voluminous records documenting the validity of 

each pound of emissions credits being transferred from the 

District bank to Sentinel were not provided in electronic form 

on the regulations.gov website. These documents consist of the 

“Offset Source Calculation/Verification Form” and supporting 

documentation for each form. The District’s submittal consisted 

of a CD, with 62 separate documents, comprising more than 1,000

pages. The forms show a facility’s name, the type of equipment 

that had been operated, the emission inventory data for the two 

years prior to shut down, the date when the facility’s permit 

was inactivated, verification of the shutdown and various 

emissions calculations using this data. EPA’s proposed approval 

of the SIP revision relied on these documents to demonstrate 

that a sufficient number of the emissions credits the District 

transferred met the integrity criteria in Section 173 of the 

CAA.
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Our proposed approval of this SIP revision stated that we 

had attached a “complete list of PM10 and SOx offsetting 

emissions reductions” to our Technical Support Document and that 

“[d]ocumentation for each of these offsetting emission 

reductions is included in the docket for this proposal.” EPA’s 

proposed approval also stated: “While all documents in the 

docket are listed in the index, some information may be publicly 

available only at the hard copy location (e.g., copyrighted 

material), and some may not be available in either location 

(e.g., CBI). To inspect the hard copy materials, please 

schedule an appointment during normal business hours with the 

contact listed in the FOR FURTHER INFORMATION CONTACT section.” 

(76 FR 2294) Therefore, the proposed approval provided notice 

to the public to contact EPA to inspect the documentation for 

each offsetting emission reduction listed in the attachment to 

our Technical Support Document. 

EPA is not required post all of the documents in its docket 

for a proposed rulemaking to the regulations.gov website,

otherwise known as the “EDOCKET”. The hard copy documents in 

the Region’s office are the official docket for the rulemaking. 

We post many documents from the official docket to the EDOCKET

for the convenience of the public but there is no requirement to 

post all of the documents. EPA did not post the voluminous 
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Offset Source Calculation/Verification Forms on the EDOCKET 

although a hard copy was readily available in our offices. A 

copy of the documents was also available at the District and 

CARB offices.

CCAT also contends that EPA was required to specifically 

list the Offset Source Calculation/Verification Forms in the 

index to the docket. There is no legal requirement for EPA to 

provide an index to the docket. We frequently provide an index 

as a courtesy to the public. If we provide an index, we are not 

required to identify every background or supporting document 

provided in a submitted SIP revision. 

Because EPA cannot anticipate every question the public may 

have on our proposed rulemakings, EPA’s Federal Register notice

proposing to approve this SIP revision contained contact 

information for EPA staff who would be knowledgeable about the 

proposal and could provide copies of the specific documents in 

our docket. CCAT did not try to contact any EPA staff to obtain 

a copy of the Offset Source Calculation/Verification Forms or 

request EPA to provide further specificity in the docket index. 

Finally, the same records were provided to CCAT by the District 

long before our proposed approval was published. (South Coast 

Public Records Response #61991 and #61991B)
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In summary, CCAT has not provided any authority indicating 

that the Offset Source Calculation/Verification Forms were 

required to be identified in the index we posted on the EDOCKET

or posted electronically in the EDOCKET. These documents were 

available in hard copy at the District’s office, at the offices 

of the California Air Resources Board as part of the SIP 

submission and EPA’s office in San Francisco.

CCAT suggests that EPA may be treating some of the 

information in the records as confidential. The suggestion is 

incorrect. None of the information in the record for this SIP 

revision approval is confidential and all of the information on 

which EPA based its proposed approval has been available to the 

public. EPA does acknowledge that some information, such as the 

individual evaluation record for each emission reduction, was 

only available in hard copy. However, if CCAT had requested 

copies of these records, EPA would have made them available in 

our office for review, as the Federal Register stated, or we 

could have mailed a CD with the documents, since they were too 

large to send by email. 

Comment II: CCAT asserts that EPA’s approval of the SIP 

revision would be arbitrary and capricious because EPA fails to 

explain the basis for its decision.
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Response II: CCAT in this comment points to a background 

paragraph in EPA’s TSD and argues that EPA’s proposal to approve 

this SIP revision constitutes approving a “new but equivalent” 

process for generating offsets. EPA disagrees. The “new but 

equivalent” method referred to in the federal register notice 

was not a new process for generating credits, but instead an 

additional way for a source to comply with the Rule 1303 

requirements that offsets be provided pursuant to Rule 1309 or 

by allocations from the Priority Reserve in accordance with the 

provisions of Rule 1309.1. That is the intent of a sourcespecific SIP revision: to revise the existing SIP to account for 

an action that only applies to a single source. See, e.g. 76 FR 

2263 (January 8, 2011) CCAT also cites a NRDC v. EPA, 571 F.3d 

1245 (D.C. Cir. 2009). However, nothing in the decision or in 

this SIP revision can provide a basis for CCAT to challenge 

EPA’s action in 1996 on Regulation XIII. The time for 

challenging EPA’s action in 1996 has past and our action in this 

SIP revision does not change or revise Regulation XIII.

Comment III: CCAT asserts that the SIP revision is a violation 

of CAA section 173(c) and 40 CFR 51.165(a)(3)(ii)(C)(1)(i) –

(ii).
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Comment III (1): CCAT contends the District’s emission credits 

are not real because the District’s internal accounts are 

“balanced in the aggregate” and there is a “negative balance”. 

Response III (1): EPA disagrees that the District’s internal 

accounts are balanced in the aggregate. Instead, a more 

accurate description is that the District demonstrates that 

their local NSR program provides at least as many offsets “in 

the aggregate” as would otherwise be required under a strictly 

federal NSR program, on a project by project basis. The 

emissions credits that are the subject of this action represent 

“real” emissions reductions that occurred from sources in the 

District. The District provided comprehensive documentation for 

each emission credit, including documentation of when the source 

was shutdown, verification that it was actually shutdown, actual 

emission inventory data for each source for the two years prior 

to shutdown, and other supporting information. The emission 

credits transferred to the AB 1318 Tracking System were 

individually subtracted from the District’s internal accounts 

and are not included in the District’s annual “in the aggregate” 

equivalency demonstration. CCAT also alleges that the 

District’s accounts have a negative balance. This allegation 

has been thoroughly addressed in EPA Administrator Jackson’s 

letter dated September 23, 2010, which we are incorporating by 
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reference into this response. Administrator Jackson’s letter 

sets forth the background during which EPA requested the 

District to remove pre-1990 emission credits for which the 

District did not have adequate documentation from its internal 

accounts. However, the District could replace those

subtractions with previously uncounted emissions reductions from 

minor source orphan shutdowns. See p. 7-8. Therefore, the 

District’s internal bank is adequately funded and does not have 

“negative balances.” The support cited by CCAT for the 

proposition that the District’s balances are insufficient is an 

opinion in CCAT’s State court litigation pertaining to the 

California Environmental Quality Act (CEQA), which is not 

relevant to EPA’s evaluation of this SIP revision. Finally, 

CCAT contends that there is insufficient documentation to 

demonstrate the emission reductions occurred. EPA disagrees. 

The District’s documentation provides the name and location of 

the source that made the reduction, when the source was 

shutdown, verification that it was actually shutdown, the amount 

of the reduction, including documentation of actual emission 

inventory data for each source for the two years prior to 

shutdown, and other supporting information. 

Comment III (2): CCAT contends that the emission reductions are 

not quantifiable. 
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Response III (2): EPA disagrees. The District provided 

documents with the SIP revision showing precisely how many 

pounds of pollutant had been reduced or eliminated to support 

each emission credit. These amounts were based on actual 

emission inventory data or production records for each source. 

This issue was also raised in conjunction with SB 827 and the 

Administrator’s letter dated September 23, 2011 contains our 

further response. 

Comment III (3): CCAT alleges that the emissions reductions are 

not surplus.

Response III (3): EPA disagrees. Emission credits would need 

to be adjusted to ensure they are surplus to any new or modified 

standards for PM10 and/or SOx emissions from power plants, 

aggregate operations, spray booths, etc. The District has not 

promulgated new rules or standards that would apply to these 

types of sources, and thus no adjustments to the credits were 

required.

Comment III (4): CCAT contends that the emission reductions are 

not enforceable, citing the Ninth Circuit’s decision in El 

Comite para el Bienestar de Earlimart v. Warmerdam, 539 F.3d 

1062 (9th Cir. 2008). 
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Response III (4): EPA disagrees. In this action the emission 

reductions will be enforceable because EPA’s SIP revision has 

incorporated by reference the transfer of a specific amount of

emission credits. In Warmerdam, EPA had not incorporated by 

reference certain letters between CARB and EPA into the SIP. 

Here, the language that EPA is placing into the SIP clearly 

incorporates by reference all the individual emission reductions 

being transferred to the Sentinel Energy Project. While 

ultimately the Director of the Federal Register Office must 

determine that incorporation by reference complies with the 

requirements of 1 CFR 51.7, this type of material is generally 

within the type accepted for such treatment. See Use of 

Incorporation by Reference as a Mechanism for Shortening Federal 

Register Notices, from Gerald H. Yamada, Principal Deputy 

General Counsel to Regulatory Policy Group, dated Jan. 12, 1995. 

CCAT can enforce the District’s transfer of the emission credits 

and can also confirm that the permit from which the emission 

credit was created has been inactivated or review the conditions 

of a permit revised to create the emission reductions. 

Comment III (5): CCAT asserts that some of the emissions 

reductions are not creditable. 

Response III (5): EPA disagrees. Emission reductions are 

considered creditable if they have not been relied upon to 
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demonstrate attainment, RFP or any other permit action. The 

District accounts for the use credits from their internal 

accounts by adding the average annual quantity of ERCs used over 

the last eight years to the projected inventory for years 2014 

and 2020, i.e., the AQMP assumes that these emissions are in the 

air. By including such emissions in the inventory, the 

attainment plan has not relied on these emission reductions, 

thus they remain creditable for other purposes, such as NSR 

offsets. In addition, these emission reductions are being 

transferred from the Districts internal offset account and are 

therefore not available for any other permit action. 

Comment IV: CCAT contends that EPA cannot approve the 

District’s transfer of the emission credits to the Sentinel 

Energy Project because the emission reductions have been relied 

upon in other permitting actions and for demonstrating 

attainment. 

Comment IV.A.1: CCAT asserts that the offsets being transferred 

do not meet the requirements of federal law because the 

District’s internal accounts have negative balances.

Response IV.A.1: This portion of CCAT’s comment letter is a 

repetition of prior comments. With respect to the purported 

negative balance, EPA has responded previously. We repeat that 
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the District does not have a negative balance. As fully set 

forth in the Administrator’s petition response letter dated

September 23, 2010, EPA requested the District to remove any 

pre–1990 emission credits for which the District did not have 

adequate documentation. The District did so and then added in 

credits from minor source orphan shutdowns that it had not 

previously counted. EPA has determined that funding the 

District’s bank with minor source orphan shutdowns complies with 

the CAA. The District’s balance of credits for each pollutant 

is positive when credits from minor orphan shutdowns are 

included.

Comment IV.A.2: CCAT also contends that the emissions credits 

being transferred that were based on shut-down equipment may not 

be used if they were shut down before the base year for the SIP 

planning process.

Response IV.A.2: CCAT contends that the District has relied on 

the emission reduction credits generated from shutdown sources 

which occurred before the 2002 baseline in the 2007 AQMP. EPA 

disagrees. As explained in Response III (5), the District adds 

in a portion of the pre-baseline banked emission credits into 

the inventory for each future year. The amount added for each 

pollutant is determined based on historical usage of offsets in

the basin. Since the baseline inventory is adjusted to account 
24

for an adequate number of pre-baseline emission reductions due 

to shutdowns, the District is complying with the requirements of 

40 CFR 51.165(a)(3)(ii)(C)(1)(ii) and may use such reductions as 

current offsets. 

Comment IV.A.3: CCAT contends that “crediting these purported 

emission reductions to the SCAQMD’s Offset Accounts Violates CCA 

[sic] section 110(l)”. 

Response IV.A.3: Under section 110(l) of the CAA, EPA may not 

approve any SIP revision that would interfere with attainment, 

reasonable further progress (RFP) or any other CAA requirement.

In our proposed approval, EPA stated that this revision 

will not interfere with attainment or RFP because the emission 

credits in the AB 1318 Tracking System are not relied on for 

attainment or RFP in the District’s most recent attainment 

demonstrations. We also indicated that this revision did not 

interfere with any other CAA requirement. In addition, we 

stated that the District supplied a copy of its air quality 

analysis for the CPV Sentinel Energy Project which shows that 

operation of the facility will not interfere with the ability of 

the District to reach attainment.2 CCAT has provided no specific 

information to refute this discussion regarding CAA 110(l) from 

our proposal. 

 

2 Air Quality Demonstration: SIP Revision for CPV Sentinel Energy Project
25

Comment IV.A.3.i: CCAT again contends that the emission 

reductions have been relied upon by the District in past 

permitting actions and in its 2007 AQMP, therefore not making 

them available for the Sentinel Energy Project.

Response IV.A.3.i: Please see earlier responses on these same 

points in responses III (5) and IV.A.2. 

Comment IV.A.3.ii: CCAT contends that it is inadequate for EPA 

to meet its burden for rational decision-making regarding 

compliance with section 110(l) by not being aware of 

interference the proposed action would have with other CAA 

requirements.

Response IV.A.3.ii: EPA disagrees. The TSD (pages 5-6) 

discusses how the project complies with the CAA requirements 

that this SIP action is subject to, and this statement is simply 

affirming that there are no other CAA requirements for which the 

action is subject. 

Comment IV.A.3.iii: CCAT contends that EPA fails to describe 

the “new but equivalent mechanism...for satisfying the offset 

requirements of CAA §173”, and that the record does not provide 

any proof, facts or analysis that EPA engaged in a rational 

consideration of all facts for its decision.

Response IV.A.3.iii: EPA disagrees. The TSD (pages 5-6) 

provides a discussion of all five of the CAA §173 offset 

integrity criteria, and explains the rationale for EPA’s 
26

conclusion that the proposed offsets meet these criteria. The 

“new but equivalent mechanism” EPA was referring to in the FR 

notice was not for generating credits, but instead refers to the 

ability of the source to provide emission reduction credits for 

their project which were not provided pursuant to Rule 1309 or 

allocations from Rule 1309.1. 

Comment IV.A.3.iii: CCAT contends that in an analysis 

undertaken by the California Energy Commission, staff concluded 

that the Sentinel facility would contribute to existing 

exceedences in the area, and supplied the text from the CEC 

analysis.

Response IV.A.3.iii: The submitted CEC modeling does not 

evaluate the impacts of the project on the District’s ability to 

attain the PM10 standard, which is the required evaluation 

criteria, but instead models a worst case scenario assuming the 

highest background concentrations, the highest PM10 emission rate 

from the plant and the worst meteorological conditions would all 

occur at the same time and at the same location. CEC staff 

acknowledges that all of these worst case conditions are “not 

likely to occur.” In addition, the modeling did not take into 

account the reductions expected from other District control 

measures or the offsets provided for this project. The air 

quality analysis prepared by the District is consistent with EPA 
27

guidance for determining the impacts of projects on an areas 

ability to attain a NAAQS. 

Comment IV.A.3.iv: CCAT contends that EPA must analyze this 

submission together with the District’s recently approved Rule 

1315. 

Response IV.A.3.iv: EPA disagrees. We note that the District 

has submitted and EPA will be taking action in the future on 

District Rule 1315. Rule 1315 provides in regulatory language 

the District methodology for debiting and crediting offsets for 

sources that qualify under Rules 1304 and 1309.1. Rule 1315 is 

not the subject of, nor is it related to this rulemaking in 

anyway. The merits of Rule 1315 will be considered in a 

separate action which will be subject to public notice and 

comment. 

CCAT has not provided any specific comments showing that 

the factual statements in our proposed approval were incorrect 

or insufficient. CCAT merely repeats general and conclusory 

allegations of violations of section 110(l). That provision is 

not a general bar to revising a SIP. Accordingly, section

110(l) does not prevent us from taking final action to approve 

this source-specific SIP revision independent of action on Rule 

1315.

Comment V.: CCAT contends that through this source-specific SIP 

revision EPA has re-opened its 1996 approval of the California 
28

SIP’s creation of a SCAQMD internal bank, and how the credits in 

the bank are generated, tracked and validated.

Response V: EPA approved Regulation XIII in 1996. Regulation 

XIII comprised the District’s comprehensive new source review 

program, including two provisions that allowed the District to 

provide offsets from its internal bank of emission credits to 

certain exempt and priority reserve sources which would 

otherwise be required to obtain offsets for meeting federal CAA

requirements. Our approval of Regulation XIII was not 

challenged following our rulemaking action in 1996.

CCAT’s contention that our approval of this source-specific 

SIP revision re-opens our 1996 approval of Regulation XIII is 

without merit. This source-specific SIP revision allows the 

District to transfer certain emissions credits to one stationary 

source, the Sentinel Energy Project. The action does not modify 

or revise any provision of Regulation XIII. CCAT notes that it 

has litigation in the Court of Appeals regarding its belief that 

District Rule 1309 applies to the District’s internal bank. 

This source-specific SIP revision is unrelated. In this action, 

we have found that the specific amount of emission credits the 

District is transferring to Sentinel meet the integrity criteria 

of federal law in the amounts calculated to offset Sentinel’s 

emissions increases.
29

CCAT’s comment also contends that this action is 

establishing “an alternate generation system.” We disagree, as 

noted previously. 

Comment V.1.: CCAT lastly alleges that the source-specific SIP 

revision violates CAA section 172(e).

Response V.1.: CCAT has not explained how this source-specific 

SIP revision triggers the requirements in section 172(e) that 

apply to the Administrator following promulgation of a national 

ambient air quality standard. CCAT states that any emission 

credits that are not “generated” according to Rule 1309 “must 

accrue to the benefit of air quality” apparently based on 

section 172(e). EPA does not agree that section 172(e) 

establishes such an obligation.

III. EPA Action

This source-specific SIP revision complies with all 

relevant CAA requirements and is consistent with EPA’s guidance 

for NSR. Therefore, as authorized in section 110(k)(3) of the 

Act, EPA is fully approving this source-specific SIP revision 

into the California SIP. 

III. Statutory and Executive Order Reviews
30

A. Executive Order 12866, Regulatory Planning and Review and 

Executive Order 13563: Improving Regulation and Regulatory 

Review 13563

This action will approve the source-specific SIP revision 

known as the CPV Sentinel Energy Project AB 1318 Tracking System 

into the California SIP. This type of action is exempt from 

review under Executive Orders 12866 (58 FR 51735, October 4, 

1993) and 13563 (76 FR 3821, January 21, 2011). 

B. Paperwork Reduction Act 

This action does not impose an information collection 

burden under the provisions of the Paperwork Reduction Act, 44 

U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). 

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an 

agency to conduct a regulatory flexibility analysis of any rule 

subject to notice and comment rulemaking requirements unless the 

agency certifies that the rule will not have a significant 

economic impact on a substantial number of small entities. 

Small entities include small businesses, small not-for-profit 

enterprises, and small governmental jurisdictions. 

This rule will not have a significant impact on a 

substantial number of small entities because SIP approvals under 

section 110 and subchapter I, part D of the CAA do not create 

any new requirements but simply approve requirements that the 
31

State is already imposing. Therefore, because the Federal SIP 

approval does not create any new requirements, I certify that 

this action will not have a significant economic impact on a 

substantial number of small entities. 

Moreover, due to the nature of the Federal-State 

relationship under the CAA, preparation of flexibility analysis 

would constitute Federal inquiry into the economic 

reasonableness of State action. The CAA forbids EPA to base its 

actions concerning SIPs on such grounds. Union Electric Co., v. 

U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a) (2).

D. Unfunded Mandates Reform Act

Under sections 202 of the Unfunded Mandates Reform Act of 

1995 (“Unfunded Mandates Act”), signed into law on March 22, 

1995, EPA must prepare a budgetary impact statement to accompany 

any proposed or final rule that includes a Federal mandate that 

may result in estimated costs to State, local, or tribal 

governments in the aggregate; or to the private sector, of $100 

million or more. Under section 205, EPA must select the most 

cost-effective and least burdensome alternative that achieves 

the objectives of the rule and is consistent with statutory 

requirements. Section 203 requires EPA to establish a plan for 

informing and advising any small governments that may be 

significantly or uniquely impacted by the rule.
32

EPA has determined that the approval action proposed does 

not include a Federal mandate that may result in estimated costs 

of $100 million or more to either State, local, or tribal 

governments in the aggregate, or to the private sector. This 

Federal action proposes to approve pre-existing requirements 

under State or local law, and imposes no new requirements. 

Accordingly, no additional costs to State, local, or tribal 

governments, or to the private sector, result from this action.

E. Executive Order 13132, Federalism

Federalism (64 FR 43255, August 10, 1999) revokes and 

replaces Executive Orders 12612 (Federalism) and 12875 

(Enhancing the Intergovernmental Partnership). Executive Order 

13132 requires EPA to develop an accountable process to ensure 

“meaningful and timely input by State and local officials in the 

development of regulatory policies that have federalism 

implications.” “Policies that have federalism implications” is 

defined in the Executive Order to include regulations that have 

“substantial direct effects on the States, on the relationship 

between the national government and the States, or on the 

distribution of power and responsibilities among the various 

levels of government.” Under Executive Order 13132, EPA may not 

issue a regulation that has federalism implications, that 

imposes substantial direct compliance costs, and that is not 

required by statute, unless the Federal government provides the 
33

funds necessary to pay the direct compliance costs incurred by 

State and local governments, or EPA consults with State and 

local officials early in the process of developing the proposed 

regulation. EPA also may not issue a regulation that has 

federalism implications and that preempts State law unless the 

Agency consults with State and local officials early in the 

process of developing the proposed regulation.

This rule will not have substantial direct effects on the 

States, on the relationship between the national government and 

the States, or on the distribution of power and responsibilities 

among the various levels of government, as specified in 

Executive Order 13132, because it merely approves a State rule 

implementing a Federal standard, and does not alter the 

relationship or the distribution of power and responsibilities 

established in the CAA. Thus, the requirements of section 6 of 

the Executive Order do not apply to this rule.

F. Executive Order 13175, Coordination with Indian Tribal 

Governments

Executive Order 13175, entitled “Consultation and 

Coordination with Indian Tribal Governments” (65 FR 67249, 

November 9, 2000), requires EPA to develop an accountable 

process to ensure “meaningful and timely input by tribal 

officials in the development of regulatory policies that have 

tribal implications.” This proposed rule does not have tribal 
34

implications, as specified in Executive Order 13175. It will 

not have substantial direct effects on tribal governments, on 

the relationship between the Federal government and Indian 

tribes, or on the distribution of power and responsibilities 

between the Federal government and Indian tribes. Thus, 

Executive Order 13175 does not apply to this rule.

G. Executive Order 13045, Protection of Children from 

Environmental Health Risks and Safety Risks

EPA interprets Executive Order 13045 (62 FR 19885, April 

23, 1997) as applying only to those regulatory actions that

concern health or safety risks, such that the analysis required 

under section 5-501 of the Executive Order has the potential to 

influence the regulation. This rule is not subject to Executive 

Order 13045, because it approves a State rule implementing a 

Federal standard. 

H. Executive Order 13211, Actions that Significantly Affect 

Energy Supply, Distribution, or Use

This rule is not subject to Executive Order 13211, “Actions 

Concerning Regulations That Significantly Affect Energy Supply, 

Distribution, or Use” (66 FR 28355, May 22, 2001) because it is 

not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

Section 12 of the National Technology Transfer and 

Advancement Act (NTTAA) of 1995 requires Federal agencies to 
35

evaluate existing technical standards when developing a new 

regulation. To comply with NTTAA, EPA must consider and use 

“voluntary consensus standards” (VCS) if available and 

applicable when developing programs and policies unless doing so 

would be inconsistent with applicable law or otherwise 

impractical.

The EPA believes that VCS are inapplicable to this action. 

Today’s action does not require the public to perform activities 

conducive to the use of VCS.

J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Population

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) 

establishes federal executive policy on environmental justice. 

Its main provision directs federal agencies, to the greatest 

extent practicable and permitted by law, to make environmental 

justice part of their mission by identifying and addressing, as 

appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies, and 

activities on minority populations and low-income populations in 

the United States. 

EPA lacks the discretionary authority to address 

environmental justice in this rulemaking.

List of Subjects in 40 CFR Part 52
eq.

/4/.Y1( 5

Dated: Jared Blurnenfeld,

Regional Administrator,

Region IX
37

Part 52, Chapter I, Title 40 of the Code of Federal 

Regulations is amended as follows:

PART 52 [AMENDED]

1. The authority citation for Part 52 continues to read as 

follows:

AUTHORITY: 42 U.S.C. 7401 et seq.

Subpart F - California

2. Section 52.220 is amended by adding paragraph (c)(384) to 

read as follows:

§52.220 Identification of plan.

* * * * *

(c) * * * 

(384) New and amended regulations for the following APCD’s were 

submitted on September 10, 2010 by the Governor’s designee. 

(i) Incorporation by Reference

(A) South Coast Air Quality Management District

(1) Offset Requirements for the Proposed CPV Sentinel Power 

Plant, including the CPV Sentinel Energy Project AB 1318 

Tracking System

* * * * *