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Sierra Pacific Industries

- Anderson ( SAC 12

- 01) September 2012 Summary of the Proposed Permit

On September 12 , 2012

, the United States Environmental Protection Agency (EPA) Region IX provided notice of, and re quest ed public comment on, action relating to the proposed major modification of the Prevention of Significant Deterioration (PSD) permit for the Sierra Pacific Industries

- Anderson Division facility ( SPIA

). The proposed permit modification would grant con ditional approval, in accordance with PSD regulations (40 C ode of F ederal R egulations (CFR) 52.21), to Sierra Pacific Industries (SPI) to construct and operate a new 31megawatt (MW) cogeneration unit at its existing Anderson facility. The mailing address f

or SPI

- Anderson is P.O. Box 496028 Redding, CA 96049

- 6028. The proposed location for the modification is 19758 Riverside Ave., Anderson CA 96007. The city of Anderson is located within

the S hasta County Air Quality Management District (S CAQMD ) . On March 3, 2003 EPA revoked and rescinded SCAQMD’s authority to issue and modify federal PSD permits for new and modified major sources of attainment pollutants. Therefore, EPA is revising the PSD permit issued by SCAQMD to incorporate the proposed modification. All existing equipment at the SPI

- Anderson facility is still subject to comply with all existing permits issued by SCAQMD. The public comment period for this proposed permit modification , which is ongoing, will close on October 1 7 , 2012

.

SPI has applied for approval to construct and operate an additional new cogeneration unit capable of generating 31 MW of gross electrical output from the combustion of clean cellulosic biomass. SPI

Anderson is a sawmill and planer mill facility that currently contains a woo d

- fired boiler cogeneration unit with associated air pollution control equipment and conveyance systems that produces steam to dry lumber in existing kilns for its lumber operations

. The proposed cogeneration unit will be constructed at the existing SPI

- An derson facility

. The fuels to be burned in this new cogeneration unit shall conform to

the definition of clean cellulosic biomass as defined in 40 CFR 241.2. In particular, c lean cellulosic biomass means those residuals that are akin to traditional cellulo sic biomass such as forest

- derived biomass ( e.g., green wood, forest thinnings, clean and unadulterated bark, sawdust, trim, and tree harvesting residuals from logging and sawmill materials), corn stover and other biomass crops used specifically for energy production ( e.g., energy cane, other fast growing grasses), bagasse and other crop residues ( e.g., peanut shells), wood collected from forest fire clearance activities, trees and clean wood found in disaster debris, clean biomass from land clearing operat ions, and clean construction and demolition wood. Clean biomass is biomass that does not contain contaminants at concentrations not normally associated with virgin

biomass materials.

This document is intended to provide a brief , informal summary of infor mation to assist members of the public of EPA’s proposed PSD permit modification

. For official permit documents developed in

accordance with 40 CFR Part 124 and more details about the permit requirements, refer to EPA’s public notice, the proposed permit, and the Ambient Air Quality Impact Report (AAQIR) for this proposed permit action, which are linked to the EPA Region 9 permit website: http: // www.epa.gov/region0 9/air/permit/r9

- permits

- issued.html#pubcomment

.

What Laws and Regulations Apply to EPA’s Proposed PSD Permit?

W e have prepared this proposed permit based on our PSD regulations issued under the Clean Air Act at
40 CFR 52.21

. We believe that t he propose d modification will comply with PSD requirements for the pollutants regulated under the permit . We have made this determination based on the information PUBLIC INFORMATION S HEET

~ OVERVIEW

~ SPI

- ANDERSON

PROPOSED CLEAN AIR A CT

PSD PERMIT MODIFICATION2

Sierra Pacific Industries

- Anderson ( SAC 12

- 01) September 2012 supplied by the applicant, our review of the analyses contained in the permit application, and other

re levant information contained in the administrative record for this proposed action. EPA has provided the proposed permit and AAQIR to the public for review, and will make a final decision on t he PSD permit application after considering all public comments on our proposal submitted during the public comment period

.

Environmental requirements from other federal, state, or local laws are not included in this proposed permit unless they are also part of the Clean Air Act P SD program. The modification is requir ed to comply with all other environmental requirements. To this end, Sierra Pacific Industries has submitted applications for local construction approval to the SCAQMD

.

What Does EPA’s Proposed PSD Permit Regulate? The PSD program applies to “major” new sources of attainment pollutants. SPIA is an existing PSD major stationary source of PSD pollutants. The new cogeneration unit will be a major source for oxides of nitrogen (NO

x

)

, carbon monoxide (CO) and greenhouse gases (GHG)

. Once a source is considered major for a PSD pollutant, PSD applies to any other pollutant regulated under the PSD program that is emitted in a signif icant amount. This modification will result in a significant increase of total particulate matter (PM), particulate matter under 10 mi crometers (μm) in diameter (PM 10 ), particulate matter under 2.5 μm in diameter (PM 2.5 ) emissions.

In accordance with 40 CFR 52.21(j), a new major stationary source is required to apply best available control technology (BACT) for each PSD pollutant that it has the potential to emit (PTE) in signif icant amounts. With respect to this modification , NO

x , CO, PM, PM 10 , PM 2.5 , and GHG are emitted in significant amounts, and therefore the proposed permit requires th at SPIA apply BACT to all equipment that emits these pollutants, except GHG. Although the p roposed modification identifies significant increases in GHG emissions; EPA’s Deferral for CO 2 emissions from Bioenergy and Other Biogenic Sources under the Prevention of Significant Deterioration and Title V Programs (76 FR 43490 July 20, 2011) applies to this project. Therefore, the modification will not be subject to BACT requirements for GHG.

What Other Actions is EPA Taking in Connection with Its Decision making Process ?

EPA has been engaged in consultation with the U nited States Fish and Wildlife Service (USFWS) under section 7 of the federal Endangered Species Act to ensure that its proposed PSD permit decision fo r t he

modification is not likely to jeopardize the continued existence of any federally

- listed endangered or threatened species or result in the destruction or adverse modification of critical habitat for such species. EPA concludes that the project will have no likely adve rse effect on any endangered or threatened species or designated critical habitat. Discussions with the U SFWS support EPA’s conclusion.