### PREVENTION OF SIGNIFICANT DETERIORATION PERMIT PROPOSED PURSUANT TO THE REQUIREMENTS AT 40 CFR

## § 52.21 U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION IX

PSD PERMIT NUMBER: SAC 12-01 PERMITTEE: Sierra Pacific Industries P.O. Box 496028 Redding, CA 96049-6028 FACILITY NAME: Sierra Pacific Industries- Anderson FACILITY LOCATION: 19758 Riverside Avenue Anderson, California 96007 Pursuantto the provisions ofthe Clean AirAct (CAA), Subchapter 1, Part C (42 U.S.C. Section 7470, et. seq.), and the Code ofFederal Regulations (CFR) Title 40, Section 52.21, the United States Environmental Protection Agency Region 9 (EPA) is issuing aPrevention ofSignficant Deterioration (PSD) air quality permitto Sierra Pacific Industries (SPI). This Permit applies to the approval to construct and operate a new stokerboiler capable ofgenerating 31 MW ofgross electrical outputfrom the combustion ofclean cellulosic biomass, and related auxiliary equipment. SPI is authorizedto construct and operate the 31 MW cogeneration unit at SPI-Anderson as described herein, in accordance with the permit application (and plans submitted with the permit application), the federal PSD regulations at40 CFR 

### § 52.21, and otherterms and conditions set forth in this PSD Permit. Failure to comply with any condition orterm set forth in this PSD Permit may be subject to enforcement action pursuantto Section 113 ofthe Clean AirAct. This PSD Permitdoes notrelieve SPI from the obligation to comply with applicable federal, state, and Shasta County AirQuality Management District (District) airpollution control rules and regulations. Per40 CFR 

### § 124.15(b), this PSD Permitbecomes effective 30 days afterthe service ofnotice of this final permitdecision unless review is requested on the permitpursuantto 40 CFR 

### § 124.19.

1IJ/ 

### 1j / 1 I //

— /1 i / I/i/i/I/I Z 1 YWVVL/ L/ I!. ‘ Deborah Jordan Date Director, Air Division

### SIERRA PACIFIC INDUSTRIES

- 

### ANDERSON (SAC 12-01) PREVENTION OF SIGNIFICANT DETERIORATION PERMIT PERMIT CONDITIONS

PROJECT DESCRIPTION Sierra Pacific Industries, Inc. (SPI) applied forthe approval to constructand operate a new stoker boilercapable ofgenerating 31 MW ofgross electrical outputfrom the combustion ofbiomass and natural gas, and related auxiliary equipment. The original Prevention ofSignificant Deterioration (PSD) permitforthis lumbermanufacturing facility was issued in 1994 by the Shasta County AirQuality ManagementDistrict (District). The site currently contains a woodfired boiler cogeneration unit with associated airpollution control equipment and conveyance systems that produce steam to dry lumber in existing kilns. On March 3, 2003, USEPA revoked and rescinded the District’s authority to issue and modify federal PSD permits fornew and modified major sources ofattainmentpollutants in Shasta County. Therefore, EPA is issuing this PSD permitto authorize SPI to constructand operate the additional boiler and related auxiliary equipment described in this permit atthe SPI-Anderson facility. The PSD permitpreviously issuedby the Districtto SPI is still in effect and applies to existing equipment at the SNAnderson site. Fuel forthe new stokerboilerwill be generated on site and received from otherfuel sources, mainly other SPI facilities, to produce roughly 250,000 pounds per hourofsteam. This steam will be used to dry lumber in existing kilns forthe lumber operation, as well as feed aturbine that will drive a generatorto produce electricity foruse on site or for sale to the grid. A closedloop three-cell cooling tower will be used to dispose ofwaste heat from the steam turbine. This PSD permit forthe modification requires the use ofBestAvailable Control Technology (BACT) to limitemissions ofnitrogen oxides (NOw), carbon monoxide (CO), total particulate matter (PM), PM under 10 micrometers (jim) in diameter (PMio), PM under2.5jirn in diameter (PM2s), and greenhouse gases (GHG), to the greatest extentfeasible. Air pollution emissions from the modification will not cause or contribute to violations ofany National Ambient Air Quality Standards (NAAQS) or any applicable PSD increments forthe pollutants regulated under the permit. Additional equipment includes the construction ofan additional cooling towerand an emergency natural gas engine to powerthe emergency boiler recirculation pump.

Page 2 of2l SierraPacific Industries- Anderson (SAC 12-01) Final PSD Permit April 2014

### EQUIPMENT LAST Table 1 lists the ne equipment that \ill be regulated by the proposed PSD permit:
Table 1

- New Equipment List Regulated by the PSD Permit ID Unit Description

-I One Stoker Boiler s ith • Biomass—tred with natural gas burners for start-up Grate • Maximum heat input ofapproximately 468 MMBtuhr and steam generation rate of 250.000 il’s,hr

• Equipped vUth to natural gas burners, each with a maximum rated heat input of62.5 MMBtu/hr

• Equipped with selectie non-catalytic reduction (SNCR) system to reduce \O and multiclone ssith an electrostatic precipitator (ESP) to control PM emissions [2 cooling foser • composed ofthree cells with an expected water load ol 4.24 gallons per minute per square IboL 13 Emergency Engine • 256 lip at 1.800 rpm

• Spark-ignition internal combustion, natural gas-lired

• Possers emergency boiler recirculation pump

• 40 CER Part 60

- Subpart JJJJ Compliant Table 2 lists the existing equipment that is not included in this PSD permit. The equipment listed helo is permitted by the District and the Permittee must comply with all applicable requirements ofthe PSD permit (Permit No. 94-PU-I 8) issued by the District. Table 2 is provided for reference purposes only:
Table 2

- Existing Equipment List ID Unit Description I 4 One Wellons Stoker l3oiler • Biomass-tired

• Maximum annual acrage heat input ofapproximately 116.4 MMRtuihr

• Equipped with SNCR system to reduce NO. and multiclone with ESP to control PM emissions

• Equipped with one 30.400 fl hid storage bin. 2 hog fuel bins. 2 .ood chip fuel bins 15 One Conscyance System • (2) cyclones with combined hloss rate of51.004 schin

• (I) 7.118 ft 2 MAC Pulse Jet Baghouse ssith 300hp Blower

• (1) 35” x 35” Rotary Airlock

• (I) Buhler en-masse. 19”. 22tph Cons ey or

• (2) Each overhead storage bins with enclosed sides (6 One Spra% (nit • closed loop unit equipped with intLgrated. negative pressure. mist collection system and 65’ exhaust stack [7 One Wood Chip I oading • (I) Platform truck dumper Facility • (1) Wood chip convey inc system vith dust containment hood

• (I) 200hp. 59.000C FM Rader hloser [8 Sesen Dc-greasing tanks • Non-solvent based tanks 1 9 One Gas Storage lank • Abuse ground with 10.000 gallon capacity tank 1 10 One Painting Operation • Miscellaneous painting operation Ill Drying Kilns • (8) steam-heated. double-track. lumber drying kilns Page 3 of2l Sierra Pac’I/k Industries— InIerson (S. IC 12—()I. I ma! I’S!) Permit Ipril ‘014PERMIT CONDITIONS PERMIT EXPIRATION As provided in 40 CFR 

### § 52.21(r), this PSD permit shall become invalid ifconstruction: A. is not commenced (as defined in 40 CFR 

### § 52.2l(b)(9)) within 18 months afterthe approval takes effect; or B. is discontinued for aperiod of 18 months ormore; or C. is not completed within a reasonable time. IL PERMIT NOTIFICATION REQUIREMENTS Permittee shall notify EPA Region IX by letter orby electronic mail, to 9jj2agov, ofthe: A. date construction is commenced, postmarked within 30 days ofsuch date; B. actual date ofinitial startup, as defined in 40 CFR 

### § 60.2, postmarked within 15 days ofsuch date; C. date upon which initial performancetests will commence, in accordance with the provisions ofConditionsXHandI, postmarked not less than 30 days priorto such date. Notification may be provided with the submittal ofthe performancetest protocol required pursuantto ConditionsXHandI; and D. date upon which initial performance evaluation ofthe continuous emissions monitoring system (CEMS) will commence in accordance with 40 CFR 

### § 60.13(c), postmarkednot less than 30 days priorto such date. Notification may be provided withthe submittal ofthe CEMS performance testprotocol requiredpursuantto ConditionXI. III. FACILITY OPERATION A. At all times, including periods ofstartup, shutdown, shakedown, and malfunction, Permittee shall, to the extentpracticable, maintain and operate the Facility, including associated airpollution control equipment, in a manner consistentwith good air pollution control practice forminimizing emissions. Determination ofwhether acceptable operating and maintenance procedures are being used will be based on information available to EPA, which may include, but is not limited to, monitoring results, opacity observations, review ofoperating maintenance procedures and Page 4 of2l Sierra Pacjflc Industries- Anderson (SAC 12-01) Final PSD Permit April2014inspection ofthe Facility. B. The Permittee shall operate and maintain Ui, U2 and U3 in a manner consistentwith good engineering practices for its full utilization. C. As soon as practicable following initial startup ofthe facility (as defined in 40 CFR 

### § 60.2) butpriorto commencementofcommercial operation (as defined in 40 CFR

### § 72.2), and thereafter, the Permittee shall develop and implement an operation and maintenance plan for UI, U2 and U3. At aminimum, the plan shall identify measures for assessing the performance ofU!, U2, and U3, the acceptable range of performance measures for achieving the desired output, the methods formonitoring the performance measures, and the routine procedures formaintaining UI, U2 and U3 in goodoperating condition.
IV. MALFUNCTION REPORTING A. Permittee shall notify EPA at j9jea.gov within two (2) working days following the discovery ofany failure ofairpollution control equipment orprocess equipment, or failure ofa process to operate in a normal manner, which results in an increase in emissions above the allowable emission limits stated in SectionXofthis permit. B. In addition, Permittee shall provide an additional notificationto EPA in writing or electronic mail within fifteen (15) days ofany such failure describedunder Condition IV.A. This notification shall include a description ofthe malfunctioning equipment or abnormal operation, the date ofthe initial malfunction, the period oftime overwhich emissions were increased due to the failure, the cause ofthe failure, the estimated resultant emissions in excess ofthose allowed in SectionX, and the methods utilized to mitigate emissions and restore normal operations. C. Compliance with this malfunction notification provision shall not excuse or otherwise constitute a defense to any violation ofthis permit orany law orregulation such malfunction may cause. V. RIGHT OF ENTRY The EPA Regional Administrator, and/or an authorized representative, upon the presentation ofcredentials, shall be permitted: A. to enterthe premises where the Facility is located orwhere any records are required

Page 5 of2l Sierra PacjJIc Industries-Anderson (SAC 12-01) Final PSD Permit April 2014to be keptunderthe terms and conditions ofthis PSD Permit; B. during normal business hours, to have access to and to copy any records requiredto be keptunderthe terms and conditions ofthis PSD Permit; C. to inspectany equipment, operation, ormethod subjectto requirements in this PSD Permit; and D. to sample materials and emissions from the source(s).
VI. TRANSFER OF OWNERSHIP In the event ofany changes in control or ownership ofthe Facility, this PSD Permit shall be binding on all subsequent owners and operators. Within 14 days ofany such change in control or ownership, Permittee shall notify the succeeding owner and operator ofthe existence ofthis PSD Permit and its conditions by letter. Permittee shall send a copy of this letterto EPA Region IX within 30 days ofits issuance.
VII. SEVERABILITY The provisions ofthis PSD Permitare severable, and, ifany provision ofthe PSD Permit is held invalid, the remainderofthis PSD Permit shall notbe affected.
VIII. ADHERENCE TO APPLICATION AND COMPLIANCE WITH OTHER ENVIRONMENTAL LAWS Permittee shall constructthe Project in compliance with this PSD permit, the application on which this permit is based, and all other applicable federal, state, and local air quality regulations. This PSD permit does notrelease the Permittee from any liability for compliance with other applicable federal, state and local environmental laws and regulations, including the Clean AirAct.
IX. RESERVED X. SPECIAL CONDITIONS A. Boiler Annual Emission Limits I. Annual emissions from Ui, in tons peryear (tpy) (12-month rolling sum basis), shall not exceedthe following emission limits. These limits shall apply at all times, including during startup and shutdownperiods. Page 6 of2l SierraPacUIc Industries-Anderson (SAC 12-01,) Final PSD Permit April2014Table 3

- Ui Rolling 12-Month Emission Limits NO CO PM PMjo PM2 

### 267 472 41 41 41 2. C02e emissions from UI shall notexceed 0.36 lb C02e/lb steamproduced (12-month annual rolling average basis). This C02e limit shall apply at all times, including during startup and shutdown periods. B. AirPollution Control Equipment and Operation The Permittee shall construct and operate U1 and its associated equipmentwith an energy efficient design and use good combustion practices as described in the Permittee’s permit application and subsequent submissions to the EPA. This includes, but not limited to, (1) construction and operation ofan efficient, state-ofthe-art, air-cooled, reciprocating stepgrate stokerboilerthat ensures good combustion; (2) operation ofthe boileras a cogeneration unit atthe Facility; and (3) operation and maintenance ofthe boiler in accordance with the manufacturer’s recommendations. As soon as practicable following initial startup ofUi (startup as defined in 40 CFR 

### § 60.2) butpriorto commencement ofcommercial operation (as defined in 40 CFR 

### § 72.2), and thereafter, the Permittee shall continuously operate, and maintain the following during boiler operations: an SNCR system for control ofNOR, multiclone collectors and an ESP forthe control ofPM, PMioand PM2.5, and good combustion practices forthe control ofCO. The Permittee shall also perform any necessary operations to minimize emissions so that emissions are at orbelow the emission limits specified in this permit. The Permittee shall also, to the extentpracticable, maintain and operate equipment and associated monitoring equipment in a mannerconsistentwith good airpollution control practice for minimizing emissions. Determination ofwhether such operation and maintenance procedures are being used will be based on information available to the Administratorwhich may include, but is not limited to, fuel use records, monitoring results, review ofoperation and maintenance procedures, review of operation and maintenance records. review ofreports required by this Permit, and inspection ofthe Facility. C. Steam Production and Emission Limitations 1. Except as noted below under ConditionXD., on and afterthe date ofinitial startup, Permittee shall not discharge orcause the discharge from Ui into the atmosphere in excess ofthe following: Page 7 of2l SierraPacific Industries-Anderson (SAC 12-01) FinalPSD Permit April 2014Table 4

- Ui Short-Term Emission Limits Pollutant Ui

• 70,2 lbs/hr(3-hourblock average)

• 0.13 lbsfMMBtu (12-monthrollingbasis)

• 0.15 lbslMMBtu (3-hourblockaverage)

• EPAMethod 1-4 and 7E

• 107.7 lbs/hr(3-hourblockaverage) 

### CO • 023 

### lbJMMBtu (3-hourblockaverage)

• EPA Method 1-4 and 

### 10

• 0,02 lbIMMl3tu 

### (3-hourblockaverage) PM, PM 10 PM 2

. 5 • 9.4 lb/hr(hourly average), correctedto 12/C02 2. CO emissions at all times from Ul, including startup and shutdown events as defined ConditionsXD.3. andXD.4., shall not exceed432 lbs/hr (hourly average). 3. Steam production from Ui shall notexceed 275,000 lbs/hr(24 hourblock average). 4. Visible emissions from Ui, except for uncombined watervapor or during periods defined in ConditionXD., shall not exceed 20% opacity in any six minute period, as verifiedby the continuous opacity monitoring system (COMS). 5. Visible emissions from the Ui shall not exceed 40% opacity formore than three minutes out ofany one 60-minute period. 6. At all times, including equipment startup and shutdown, Permittee shall minimize the cause or discharge ofthe following emissions:
a. Dust from unpaved roads or any othernon-vegetation-covered area. b. Fugitive sawdust from fuel-handling devices and/or storage areas. c. Char and/or bottom ash which is processed by the charhandling systems or removed from UI by othermeans. d. Accumulation ofsawdustor ash on outside surfaces including, but not limited to, the main building, Ul, ESP, 

### support pads, road areas. Surfaces shall be cleaned on aregularbasis to preventthe build-up ofash and/orfugitive dust. e. Fuel dust or ash spilled due to an upset condition shall be cleaned up in atimely manner. In no event shall spilled dust or ash be allowed to existbeyond 24 hours ofthe upset. D. Requirements during Startup and Shutdown 1. Only biomass fuels, as defined in ConditionXG.1, and Public Utilities Commission (PUC)-quality pipeline natural gas shall be fired during periods ofstartup, shutdown, and flame stabilization. Page 8 of2l SierraPacUic Industries- Anderson (SAC 12-01) FinalPSD Permit April20142. For Ui, normal operating temperature shall be defined as the normal operating temperature specified by the unit manufacturer. 3. For U!, startup shall be defined as the period beginning with UI not in operation and concluding when Ui has reached a normal operating temperature. During startup. the generator shall be separated from the electrical grid. 4. For UI, shutdown shall be defined as the period beginning with curtailmentoffuel feed and concluding when the recorded superheateroutlettemperature reaches 150°F and remains so for at least one hour. During shutdown, the generator shall be separated from the electrical grid. 5. For UI, the duration ofstartup and shutdown periods and emissions ofNON, CO. PM, PMio and PM2.5 shall not exceed the following, as verified by the CEMS and fuel usage data: Table 5

- Ui Startup and Shutdown Limits NO CO PM, PM 10 PM 2 Duration (8 houraverage> (8 houraverage) (24 houraverage) Startup 702 

### lb/hr 108 lb/hr 8.93 lb/hr 24 hours Shutdown 70.2 lb/hr 108 lb/hr 8.93 lb/hr 24 hours

6. For UI, the Permittee must operate the CIEMS during startup and shutdown periods. 7. ForUI, the Permittee must record the time, date, and duration ofeach startup and shutdown event. 8. For UI, the Permittee must keep records that include calculations ofNON, CO. Pivi, PMio, PM25 and emissions in lb/hr and lb/MMBtu during each startup and shutdown eventbased on the CEMS and fuel usage data. E. Auxiliary EquipmentEmissions Limitations I. Permittee shall not discharge or cause the discharge from each unit into the atmosphere in excess ofthe following:

Page 9 of21 Sierra Pacific Industries- Anderson (SAC 12-01) Final PSD Permit April 2014Table 6

- U2 and U3 Emission Limits Pollutant U2 U3 NO N/A • 0.78 lb/hr N/A • 4.0 glhp-hr (3-hourblockaverage) 6.11 lb/hr PMIPMa • 0.272 lbs/hr(hourly average) • 0.0216 lb/hr

2. Exceptduring an emergency, U3 shall be limited to operation for maintenance and testing purposes. Annual hours ofoperation forU3, formaintenance and testing, shall notexceed 100 hours per 12-month rolling average. F. Operating Conditions and WorkPractices 1. Low SNCR activation temperature shall be defined as the lowest operating temperature forU! atwhich the SNCR system is recommended foroperation to reduce NO emissions as defined by the SNCR manufacturer. This temperature value shall be included in the operation and maintenance plan required by Condition III.C. 2. For UI, SNCR systems forthe control ofNO shall be in operation at all times that lJl exceeds the low SNCR activation temperature. 3. For Ul, the multiclones and ESP forthe control ofPM, PMio and PM25 shall be in operation at all times during the combustion process. 4. U3 shall not operate during startup ofUI, exceptwhen required foremergency operations. 5. Wood waste collection and storage bin leaks shall be minimized at all times. All identified wood waste collection and storage bin leaks, spills and upsets ofany kind shall be corrected or cleaned immediately, within4 hours, as practicable, to correct the leak, spill orupset. 6. Wood waste collection and storage bins shall be emptied on a schedule that ensures thatthe cyclone-separator system does notbecome plugged. 7. Wood waste collection and storage bins, not includingthe fuel shed, shall remain enclosed to mitigate the fugitive emissions from the unloading process. 8. All ash shall be transported in awetcondition in covered containers or stored in closed containers at all times. 9. Fugitive dust generated from access and on-site roads shall be minimized by application ofwater, dustpalliative, chip-sealing, orpaving. Page lOof2l Sierra Pac/ic Industries- Anderson (SAC 12-0!) Final FSD Permit April201410. Fugitive dust from storage piles, processing area, and disturbed areas shall be minimized by periodic cleanup and/or use ofsprinklers, tarps, or dustpalliative agents. 11. During periods ofhigh winds, Permittee shall take immediate action to correct fugitive dust emissions from the chip processing area. 12. All necessary surfaces shall be cleaned orwashed sufficiently to prevent wind-blown dustfrom leaving the property boundaries. 13. All truck loading and unloading conducted atthe facility shall be done in a manner that minimizes spillage, and fugitive emissions. 14. ForU2, the drift rate shall notexceed 0.0005%. 15. Each containerholding volatile organic waste shall be labeledwith the contents identified and information noting the date when waste material was added. 16. The Permittee shall inspect all containers holding VOCs orwaste, at least weekly, for leaks and for deterioration caused by corrosion or other factors. 17. Containers holding ignitable orreactive waste must be located within the property boundary at least 50 feetfromthe facility’s property line. 1 8. Incompatible wastes must not be placed inthe same container. The treatment, storage, and disposal ofignitable orreactive waste, and the commingling ofwastes, orwastes and materials, must be conducted so itdoes not:
a. Generate extreme heat, pressure, explosion, orviolent reaction; b. Produce uncontrolled toxic mists, fumes, dusts or gases in sufficientquantities to threaten human health; c. Produce flammable fumes or gases in sufficient quantities to pose a risk offire or explosions; d. Damage the structural integrity ofthe device or facility containing the waste; or e. Through other means threaten human health orthe environment. G. Fuel Restrictions 1. The following biomass fuels shall constitute the only fuel allowed for use as fuel in UI, except during periods defined in ConditionXD. and to counteract upset conditions:
a. Untreated woodpallets, crates, dunnage, untreated manufacturing and

Page II of2l Sierra Pacific Industries-Anderson (‘SAC 12-01) FinalPSD Permit April 2014construction wood debris from urban areas; b. All agricultural crops orresidues; c. Mill residues including hog fuel, shavings, sawdust, trimmings, and bark. d. Forestresidues including treetops, non-merchantable sections ofthe stem, branches, and bark, left on the ground after logging or accumulating as a result of a storm, fire, delimbing, orother similardisturbance. e. Non-merchantable forestbiomass consisting ofbyproducts and residuals offorest management activities identifiedto follow all ofthe following practices; (1) Harvestedpursuantto an approved timbermanagement plan prepared in accordance with the Zberg-Nejedly Forestpractice Act of 1973 or other locally or nationally approvedplan; and (2) Harvested forthe purpose offorestfire fuel reduction orforest stand improvement. 2. The heat input frompipeline natural gas shall not exceed 10% ofthe total heat input to Ui on a 12-month rolling basis. 3, The heat inputto U3 shall only be PUC—quality pipeline natural gas H. Monitoring Conditions 1. For Ui, the Permittee shall maintain the following continuous monitoring systems at all times when the combustion process is occurring:
a. The Permittee shall install, calibrate, operate and quality-assure a Continuous Emissions Monitoring System (CEMS) that measures CO. NOR, and C02. b. The CO andNO CEMS shall measure and record (i) CO andNO emissions in ppmv, and (ii) exhaust gas CO andNO concentrations corrected to 12 percent by volume stack gas CO2 dry basis. c. The Permittee shall conduct initial certification ofthe CEMS in accordance with ConditionXH,2. d. The Permittee shall operate and maintain a Continuous Opacity Monitoring System (COMS) capable ofmeasuring stack gas opacity. e. The Permittee shall install a stack gas volumetric flowrate monitor, and steam production rate monitor. 2. The CEMS and stack gas volumetric flowrate monitorfor Ui shall meetthe applicable requirements of40 CFR Part 60.13 and 40 CFR Part 60 Appendix B, and 40 CFR Part 60 Appendix F, Procedure 1. 3. Each CEMS shall complete aminimum ofone cycle ofoperation (sampling, analyzing, and datarecording) foreach successive 15-minute clock-hourperiod.

Page 12 of2l SierraPaejfic Industries- Anderson (SAC 12-01) Final PSD Permit April 20144. Data sampling, analyzing, and recording ofthe CEMS shall also be adequate to demonstrate compliance with emission limits during startup and shutdown. 5. The initial certification ofthe CEMS may eitherbe conducted separately or as part of the initial performancetest ofUI. The CEMS mustundergo andpass initial performance specificationtesting on orbefore the date ofthe initial performance test. 6. The CEMS shall be audited quarterly and tested annually to demonstrate that it meets the specifications in ConditionXH.2. The Permittee shall perform a full stack traverse during the initial run ofannual relative accuracy test auditing ofthe CEMS, with testing points selected according to 40 CFR Part 60 Appendix A, Method 1. 7. The Permittee shall submit a CEMS performance testprotocol to EPA in accordance with ConditionXI.2.d. 8. For Ui, opacity shall be monitored by a COMS thatmeets the applicable requirements of40 CFR Part 60 Appendix B, Performance Specification 1. 9. The COMS shall have a span value of 100% and utilize a computer or other facility which has the capability ofinterpreting sampling data andproducing outputto demonstrate compliance with applicable standards. The span value forthe continuous measuring system formeasuring opacity shall be between 60 and 80%. The span for the recording instrumentation forthe opacity meter shall be 0 to 100%. 10. The operator/owner shall monitorthe following combustion and control parameters for U1 on a continuous basis unless otherwise noted:
a. Combustion temperature (at the superheatertube area) b. Temperature at airheateroutlet c. Hourly steam production rate 11. The Permittee shall furnish the EPA with a written report ofthe results of performance tests as identified in this Permitwithin 60 days ofcompletion. 12. The Permittee shall continuously monitorthe ESP fortransformer/rectifier (T/R set) On/Offstatus and Rapper On/Offstatus. 13. The Permittee shall record hourly readings ofESP zone voltage (minimum 10 kilovolts, maximum 60 kilovolts) and amps on the operator log. 14. For U3, the Permittee shall install and maintain an operational non-resettable elapsed time meterto recordthe operating time ofthe emergency engine.

Page 13 of2l SierraPacific Industries- Anderson (SAC 12-01) Final PSD Permit April 2014I. Performance Tests 1. Performance tests shall be performed by an independent testing firm, and conducted in accordance with the test methods set forth in 40 CFR Part 60.8 and 40 CFR Part 60-Appendix A, as modified below:
a. EPA Methods 1-4, 18 and 25A for VOC emissions. Methods 18 and 25A may both be used simultaneously to quantify the annual emissions ofthe organic compounds listed in 40 CFR 51.100(s)(l) (using Method 18) and subtract this amount from the annual total VOC emissions (as determined from Method 25A). b. EPA Methods 1-4 and 6(c) for S02 emissions. c. EPA Methods 1-4 and 10 for CO emissions. d. EPA Methods 1-4 and 7E forNO emissions. e. EPA Methods 1-4 and 29 for Lead (Pb) emissions. f. EPA Methods 1-4 and 5 for PM emissions. (This performance test may be done concurrently with EPA Method 29 for Pb emissions.) g. EPA Methods 1-4, 5 and 202 with a two-hourtest run period for each test for PMioand PM2.s emissions. In lieu ofMethod 5, the Permittee may use Other Test Method 201A. h. EPA Method 3A for C02 emissions. i. The provisions of40 CFR Part 60.8(f). 

## j. In lieu ofthe specified test methods, alternative methods may be used with prior written approval from EPA. 2. ForUl,
a. Within 60 days after achieving normal operation, but not later than 120 days after the modification, the Permittee shall conduct initial performance tests (as described in 40 CFR Part 60.8) for CO, C02, NOX, Pb, PM, PMio, PM25, SO2 and VOC emissions. The performance test requirements for CO, NON, and C02 shall be demonstrated using the initial relative accuracy test auditing ofthe CEMS, for each applicable pollutant, required in ConditionXH.6. b. Forperformance testpurposes, sampling ports, platforms, and access shall be provided on the emission unit exhaust system in accordance with the requirements of40 CFR Part 60.8(e). c. Annual performance tests ofPMio, CO. CO2, and NO shall be conducted at no less than 90 percent ofthe facility’s maximum steam production rate of250,000 lb/hr. The performance test requirements forCO. NON, and C02 shall be demonstrated using the annual relative accuracy test auditing ofthe CEMS, for each applicable pollutant, required in ConditionXH.6. d. The Permittee shall submit a performance test protocol to EPA no later than 30 days priorto a performance testto allow review ofthe testplan and to arrange for an observerto be present atthe test. The performance test shall be conducted in Page 14 of2I SierraPacflc Industries- Anderson (SAC 12-01) FinalPSD Permit April2014accordance with the submitted protocol, and any changes requiredby EPA. 3. For U2, the Permittee shall do the following:
a. Perform weekly tests ofthe blow-down waterquality using an EPA-approved method. The operator shall maintain a log thatcontains the date and result ofeach blow-down waterquality test, the watercirculation rate atthetime ofthe test, and the resulting mass emission rate. This log shall be maintained onsite for a minimum offive years and shall be providedto EPA and District personnel upon request. b. Calculate PM, PMio, and PM2.5 emission rate using an EPA-approved calculation based onthe total dissolved solids (TDS) and watercirculation rate. c. Conduct all required cooling towerwaterquality tests in accordance with an EPAapproved test and emissions calculation protocol. Thirty (30) days priorto the first such test, the operator shall provide awritten test and emissions calculation protocol forEPA review and approval, with a copy to the District as specified in ConditionXII. d. Establish a maintenance procedure that states how often and whatprocedures will be used to ensure the integrity ofthe drift eliminators and to ensure compliance with recirculation rates. This procedure is to be kept onsite and made availableto EPA and District personnel upon request. The Permittee shall promptly report any deviations fromthis procedure. 4. For U3, the Permittee shall conduct an initial performance test (as described in 40 CFR 60.4244) forNO and CO and emissions and at least every five years beginning ten years afterthe initial performance test (within 30 days ofthe tenth anniversary ofthe initial performance testdate). 5. Upon written request from the Permittee, and adequatejustification, EPA may waive a specific annual test and/or allow for testing to be done at less than maximum operating capacity. J. Recordkeeping and Reporting I. The Permittee shall maintain afile ofall records, data, measurements, reports, and documents related to the operation ofthe Facility, including, but not limited to, the following: all records orreports pertaining to adjustments and/ormaintenance performed on any system or device atthe facility; initial performance test data for Ut, documents from the fuel supplierfor ConditionXD. 1.; and all other information requiredby this permit recorded in apermanent form suitable for inspection. 2. The Permittee shall calculate and record on a daily basis the average boiler heat input in MMbtu/hr (24-hr daily block average). The calculation shall be based on Page 15 of2l SierraPacific Industries- Anderson (SAC 12-01) Final PSD Permit April 2014manufacturerratio ofmaximum design heat rating to design steam (maximum design (MMbtu/hr) divided by design steam (lb/hr)) multiplied by the total steam generated each day. The heat input, as determined from this, shall not exceed 468 MMBtu/hr on a monthly basis. 3. By the last day ofeach month, the Permittee shall calculate and record the 12-month rolling sum ofCO, NON. PM, PMrn, and PM2.5 emissions in tpy for U! for the previous 12 months in accordance with ConditionXA.].
a. CO and NO emissions calculations shall be based on emissions data acquired by the CO and NO CEMS. b. PM, PMio, and PM25 shall be based on emission factors from the most recent performance test. 4. By the last day ofeach month, the Permittee shall calculate and record the 12-month rolling average ofC02e in lb C02e/lb steam produced for Ui for the previous 12 months in accordance with ConditionXA.2.
a. CO2 emissions calculations shall be based on emissions data acquired by the CO2 CEMS, and the applicable calculation methodology contained in 40 CFR 98.33(a)(4) in effect on January 1, 2014. b. CH4 and N20 emissions calculations shall be based on the following: (1) The heat input ofthe applicable emission unit. (2) The default Cl-14 and N20 emission factors in Table C-2 of40 CFR Part 98, Subpart C as published on November29, 2013 (78 FR 71952) and effective on January 1, 2014, and provided in the following table.

n Factor Fuel GI-IG Pollutant Wood and Wood CH 4

— u i2 Residuals N 2 0 0.0036 CH 4 0.001 Natural Gas N 2 0 0.0001 (3) The applicable calculation methodology contained in 40 CFR 98.33 in effect on January 1, 2014. c. The Permittee shall calculate the C02e emissions based on the procedures and Global Warming Potentials (GWP) contained in Greenhouse Gas Regulations, 40 CFR Part 98, SubpartA, Table A- 1, as published on November 29, 2013 (78 FR 71948) and effective on January 1, 2014, and provided in the following table.

Page 16 of2l Sierra Pacific Industries- Anderson (SAC 12-01) Final PSD Permit April 2014GHGPollutant GWP CO 2 1 CH 4 25 N 2 0 298 Sulfurhexafluoride (SF 6 ) 22,800 d. The total C02e shall be based on the sum ofthe C02e for CR4, N20 and C02. e. Steam production shall be based on daily records ofthe hourly steamproduction rate outputmonitoring device. 5. For Ui, the Permittee shall maintain the following records:
a. The total monthly hours ofoperation; b. 3-houraverages ofCO andNO emissions in units oflbs/MMBtu and lbs/hour dry basis. All time periods when the boiler is not in operation shall be excluded fromthe averages. The monthly average ofCO andNO emissions expressed in lbs/hour shall also be included; c. 3-houraverage calculations ofPMio emissions in units oflbs/MMBtu and lbs/hour dry basis using the mostrecent annual PMio source test; d. Notification ofall periods the continuous monitors were not functioning and the reasons forthe same; e. Steamproduction rate averaged over a daily (24-hour) period. 6. The Permittee shall maintain CEMS and COMS records that include the following:
a. The occurrence and duration ofany startup, shutdown, ormalfunction, performance testing, evaluations, calibrations, checks, adjustments maintenance, duration ofany periods during which a CEMS or COMS is inoperative, and corresponding emission measurements. b. Date, place, and time ofmeasurementor monitoring equipment maintenance activity; c. Operating conditions atthe time ofmeasurement ormonitoring equipment maintenance activity; d. Date, place, name ofcompany or entity that performedthe measurement or monitoring equipmentmaintenance activity and the methods used; and e. Results ofthe measurementormonitoring equipmentmaintenance. 7. The Permittee shall maintain records and submit a written report ofall excess emissions and opacity measurements to EPA and the District semi-annually, except when more frequentreporting is specifically requiredby an applicable subpart; orthe Administrator, on a case-by-case basis, determines thatmore frequent reporting is necessary to accurately assess the compliance status ofthe source. The report is due Page 17of21 SierraPacific Industries- Anderson (SAC 12-01) Final PSD Permit April2014on the 30 th day following the end ofeach semi-annual period and shall include the following:
a. Time intervals, dataand magnitude ofthe excess emissions, the nature and cause (ifknown), corrective actions taken and preventive measures adopted; b. Applicable time and date ofeach period during which the CEMS or COMS was inoperative (monitordown-time). except forzero and span checks, and the nature ofCEMS or COMS repairs or adjustments; c. A statement in the report ofa negative declaration; that is, a statementwhen no excess emissions occurred or when the CEMS or COMS has not been inoperative, repaired, or adjusted; d. Any failure to conduct any required source testing, monitoring, or other compliance activities; and e. Any violation oflimitations on operation, including but not limited to restrictions on hours ofoperation. 8. A period ofmonitordown-time shall be any unit operating clockhour in which sufficient data are not obtained by the CEMS to validate the hour forNOR, CO. or C02. 9. Excess emissions shall be defined as any period in which emissions exceedthe emission limits and standards set forth in ConditionsXC.], XC.2, XC.3 andXD.5. 10. Excess emissions indicated by the CEMS, COMS, source testing, or compliance monitoring shall be considered violations ofthe applicable emission limit or standard for the purpose ofthis permit. 11. For UI, daily records offuel received otherthan natural gas shall be maintained. These records shall include a detailed description ofthe fuel supplier, fuel type and tons received. 12. For U3, the Permittee shall maintain records ofthe following: hours ofoperation, purpose ofoperation, fuel usage on hourly basis and calculated PM/PMio emissions based on manufacturer emissions specifications and fuel usage data. 13. Unless otherwise specified herein, all records required by this PSD Permit shall be retained fornot less than five years following the date ofsuch measurements, maintenance, reports, and/orrecords.

Page 18 of2l Sierra Pacj/ic Industries- Anderson (SAC 12-01) FinalPSD Permit April 2014XI. ACROYNMS AND ABBREVIATIONS ASTM American Society for Testing and Materials BACT Best Available Control Technology BTU British Thermal Unit CAA Clean Air Act CEMS Continuous Emissions Monitoring System CFR Code ofFederal Regulations CR 4 Methane CHP Combined Heat and Power CO Carbon Monoxide CO 2 Carbon Dioxide C0 2 e Carbon Dioxide Equivalents CTG Combustion Turbine Generator CTM Conditional Test Method COMS Continuous Opacity Monitoring System CU Cogeneration Unit District Shasta County Air Quality Management District DLN Dry Low NOx (d)scf (dry) Standard Cubic Feet EPA Environmental Protection Agency ESP Electrostatic Precipitator Facility Sierra Pacific Industries

— Anderson Division FR Federal Register GHG Greenhouse Gases gpm Gallons Per Minute gr Grains HHV Higher Heating Value hr Hour lbs Pounds lb C0 2 e/lb steam Pounds ofCO 2 Equivalents per Pound ofSteam Produced MMBtu Million British Thermal Units MW Megawatt NAAQS National AmbientAir Quality Standards NO 2 Nitrogen Dioxide N 2 O Nitrous Oxide NOx Oxides ofNitrogen NSPS New Source Performance Standards Owner or Operator Sierra Pacific Industries Permittee Sierra Pacific Industries PM Total Particulate Matter PM 2

. 5 Particulate Matter with aerodynamic diameter less than 2.5 micrometers PM 10 Particulate Matter with aerodynamic diameter less than 10 micrometers ppm Parts Per Million ppmvd Parts Per Million by Volume, Dry basis ppmv Parts Per Million by Volume Page 19of21 SierraPacflc IndustriesAnderson (SAC 12-01) Final PSD Permit April 2014PSD Prevention ofSignificant Deterioration RATA Relative Accuracy Test Audit SCAQMD ShastaCounty Air Quality Management District SCR Selective Catalytic Reduction SNCR Selective Non-Catalytic Reduction SO 2 SulfurDioxide SOx Oxides ofSulfur TDS Total Dissolved Solids tpy Tons Per Year yr Year XII. AGENCY NOTIFICATIONS A. Unless otherwise directed by the EPA or this permit, the owner or operator shall submit all information required to be reported by this permit other than notification of change ofownership, including, but not limited to, testplans, reports, certifications, notifications and requests to approve alternative monitoring or reporting, to the following address: Director, Enforcement Division (Attn: ENF-2-1) U.S. Environmental Protection Agency, Region IX 75 Hawthorne Street San Francisco, CA 94105-3901 EMAIL: aco r9a epa.ov B. Unless otherwise directed by the EPA or this permit, the owner or operator shall submit all other information pertaining to this permit or facility, including but not limited to, applications to add, replace or modify an emission unit or control equipment, notification ofchange ofownership, and information concerning any other changes that may contravene existing permit terms, to: Director, Air Division (Attn: AIR-3) U. S. Environmental Protection Agency Region IX 75 Hawthorne Street San Francisco, CA 94105-3901

Page 20 of2l Sierra Pacjfic Industries- Anderson (SAC 12-01) Final PSD Permit April2014C. The owher oroperator shall submit a copy ofall documents required to be submitted pursuantto this permit, including but not limited to Sections X.A and X.B, to:
Air Pollution Control Officer Shasta County Air Quality ManagementDistrict 1855 Placer Street, Suite 101 Redding, CA 96001-1759

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