APPROVAL TO CONSTRUCTIMODIFY

A STATIONARY SOURCE

U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION 9

PSD PERMIT NUMBER: SAC 83-02

PERMITTEE: Pacific Oroville Power, Inc.

FACILITY LOCATION: 3050 South 5 th Avenue
Oroville, California 95965



### In compliance with provisions of the Clean Air Act, as amended (42 U.S.C. 7401 et seq.),

the Pacific Oroville Power, Inc. is granted approval to construct and operate a wood-fired

electrical generating facility in accordance with the plans submitted with the application

and with the Federal regulations governing the Prevention of Significant Air Quality

Deterioration (40 CFR 52.21) and other conditions attached to this document and made a

part of this approval.

Failure to comply with any condition or term set forth in this approval will be considered grounds for enforcement action pursuant to Section 113 of the Clean Air Act.

This Approval to Construct/Modify a stationary source grants no relief from the responsibility for compliance with any other applicable provision of 40 CFR Parts 52, 60 and 61 or any applicable federal, state, or local air**q~ality** regulations.

This approval shall become effective immediately.

# DebOrah~~~/ - Director, Air Division DatePacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 2 Pacific Oroville Power, Inc.

PSD Permit No.: SAC 83-02

Permit Conditions

The November 29, 1983 Approval to Construct issued to Pacifi c Oroville Power, Inc. for the construction and operation of a wood-fired electrical generating f acility in Oroville, California, was amended on May 24, 1988, July 24, 1996, December 23, 1996, March 15, 1999, April 1, 1999, July 20, 2004, April 2, 2009, and with a further administrative amendment on December 13, 2010.

I. Permit Expiration

This Approval to Construct/Modify shall b ecome invalid (1) if construction is not commenced (as defined in 40 CFR 52.21( b)(8)) within 18 m onths after the approval takes effect, (2) if construction is discontinued for a period of 18 months or more, or (3) if construction is not completed within a reasonable time.

II. Notification of Commencement of Construction and Startup

The Regional Administrator shall be notifie d in writing of the an ticipated date of initial startup (as defined in 40 CFR 60.2(o )) of each facility of the source not more than sixty (60) days nor less than thir ty (30) days prior to such date and shall be notified in writing of the actual da te of commencement of construction and startup within fifteen (15) days after such date.

III. Facilities Operation

All equipment, facilities, and systems in stalled or used to achieve compliance

with the terms and conditions of this Approval to Cons truct/Modify shall at all times be maintained in good working or der and be operated as efficiently as possible so as to minimi ze air pollutant emissions.

IV. Malfunction

The Regional Administrator shall be notified by telephone within 48 hours following any failure of air po llution control equipment, process equipment, or of a process to operate in a normal manner wh ich results in an increase in emissions above any allowable emissions limit stated in Section XI.D of these conditions. In addition, the Regional Administrator shal l be notified in writing within fifteen (15) days of discovery of any such fail ure. This notification shall include a description of the malfun ctioning equipment or abnormal operation, the date of the initial failure, the period of time over which emissions were increased due to the failure, the cause of the failure, the estimated resultant emissions in excess of

those allowed under Section XI .D of these conditions, a nd the methods utilized to restore normal operations. Compliance with this malfunction notificationPacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 3 provision shall not excuse or otherwise constitute a defe nse to any violations of this permit or of any law or regulatio ns which such malfunction may cause.

V. Right to Entry

The Regional Administrator, the head of the State Air Pollu tion Control Agency, the head of the responsible local air po llution control agency and/or authorized representatives, upon the presentation of credentials, sh all be permitted:

A. to enter upon the premises where the source is located or in which any records are required to be kept unde r the terms and conditions of this Approval to Construct/Modify; and

B. at reasonable times, to have access to and copy any records required to be kept under the terms and conditions of the Approval to Construct/Modify:

and

C. to inspect any equipment, operation, or method required in this Approval to Construct/Modify; and

D. to sample emissions from the source.

VI. Transfer of Ownership

In the event of any changes in control or ownership of facilities to be constructed or modified, this Approval to Construct/M odify shall be bindi ng on all subsequent owners and operators. The applican t shall notify the succeeding owner and operator of the existence of this Approva l to Construct/Modif y and its conditions by letter, a copy of which shall be forw arded to the Regiona l Administrator and the State and local Air Pollution Control Agency.

VII. Severability

The provisions of this Approval to Cons truct/Modify are severable, and, if any provision of this Approval to Construct/M odify is held invalid, the remainder of this Approval to Construct/Modif y shall not be affected thereby.

VIII. Other Applicable Regulations

The owner and operator of the proposed project shall construct and operate the proposed stationary source in compliance w ith all other applicable provisions of 40 CFR Parts 52, 60 and 61, and all other app licable Federal, St ate and local air quality regulations.Pacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 4 IX. Special Conditions

A. Air Pollution Control Equipment

1. Pacific Oroville Power, Inc. shall install, continuously operate, and maintain an electrostatic precipitator (ESP) servicing the two

wood-fired boilers. Prior to bei ng vented to the atmosphere, all exhaust gases from both boilers sh all be directed through a cyclone type dust collector and then vented through the ESP.

2. Particulate emissions resulting from the use of the fuel preparation equipment shall be collected a nd exhausted through a cyclone collector prior to discharge into the atmosphere.

B. Steam Production Limit

Steam production from the two combined boilers shall not exceed 220,000 pounds per hour on a daily average. P acific Oroville Power, Inc. shall maintain a permanent log of the temper ature, pressure and mass flow rate of the steam produced. These records shall be maintained by Pacific Oroville Power, Inc. in a convenient location for a period of not less than five years and shall be available for inspection as specified in Condition

V.

C. Fuel Usage

Pacific Oroville Power, Inc. shall at all times utilize biomass fuel to fire

each boiler.

D. Emission Limits

On and after the date of startup of the two wood-fired boilers, Pacific Oroville Power, Inc. shall not discharg e, or cause the discharge into the atmosphere from the ESP stack:

1. Gases which exhibit greater than 10 percent opacity, except during startup and shutdown of the boilers, at which time opacity shall not

exceed:

a. 20 percent during periods when one boiler is operating

under normal conditions and the second boiler is in either startup or shutdown. This ope rating mode is defined as

“Mode A.”Pacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 5 b. 40 percent during periods wh en one boiler is undergoing startup or shutdown and the ot her boiler is not operating (i.e., cold). This operating mode is defined as “Mode B.”

During periods of grate cleaning the opacity shall not exceed 20 percent. Startup and shutdow n are defined in 40 CFR §60.2 and the boilers can be presumed to be in startup or shutdown mode if

CO 2 concentration in the exhaust gas is less than 12 percent. The startup of one boiler must be co mpleted before the second boiler begins operation.

2. Pollutants in excess of the following limits:

Pollutant Maximum Emission Limit NOx (as NO 2 ) 95 ppm - corrected to 12% CO 2 and based on a 24-hour rolling average, calculated hourly. Limit does not apply during boiler startup or shutdown as defined in 40 CFR §60.2. The boilers can be presumed to be in startup or

shutdown mode if CO 2 concentration in the exhaust gas is less than 12%.

NOx (as NO 2 ) 43.3 lbs/hr - 24-hour rolling average, calculated hourly.

PM 14.5 lbs/hr based on a 3-hour averaging time.

Compliance with these limits shall be determined in accordance with

Permit Condition IX.F.1.

E. Performance Tests

1. Within 60 days after achieving th e maximum production rate of the power generating facility, but no la ter than 180 days after initial startup (as defined in 40 CFR 60.2(o )) of the boilers and at such times as may be specified by EPA, Pacific Oroville Power, Inc.

shall conduct or cause to be conducted performance tests (as defined in 40 CFR 60.8) for NOx and particulate matter (PM) on the exhaust stack gases from the ES P. Pacific Oroville Power, Inc. shall furnish the Butte County Ai r Pollution Control District and the EPA (Attn: AIR-5) a written report of the results of such tests.

Performance tests for NOx and PM shall be conducted on at least

an annual basis. In lieu of an annual performance test and to ensure compliance with the 24-hour NOx limit, Pacific Oroville Power, Inc. may perform an annual relative accuracy testing analysis in accordance with 40 CFR part 60 Appendix F on thePacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 6 NOx continuous monitoring equipment requirement in Permit Condition IX.F.1.b. Upon written request and supporting justification, EPA ma y waive a specific annua l test and/or allow for testing to be done at less than the maximum operating capacity. Such requests must be submitted (Attn: AIR-5) no later than 60 days prior to the annual test date.

The annual compliance test for particulate matter shall include at least one run during a grate cleaning event. The test run performed during the grate cleaning event shal l include as much of the grate cleaning event as possible. The average pounds per hour of particulate matter emissions shall be calculated by the following equation rather than the arithme tic average as outlined in 40 CFR 60.8(f).

E = E SGR ( )*

* *

* AB S

A R E R S

R B S

A R NOGR + + −

− ⎡ ⎣ ⎢ ⎤ ⎦ ⎥

where:

E = average pounds of par ticulate matter emissions per hour [lb/hr]

E SGR = average E of sample(s) containing grate cleaning [lb/hr]

E NOGR = average E of sample with no grate cleaning [lb/hr] A = hours of grate cleaning during sample [hr] B = hours not grate cleaning during samples containing grate cleaning [hr] R = average hours of operation per 24 hour period [hr] S = average hours of grate cl eaning per 24 hour period [hr]

2. With the exception of the particulate matter testing requirements described in Special Condition IX .E.1, performance tests for the

emissions of NOx and PM shall be conducted and the results reported in accordance with the test methods set forth in 40 CFR 60, Part 60.8 and Appendix A. The following test methods shall

be used:

a. Performance tests for the emissions of NOx shall be conducted using EPA Methods 1-4 and 7 procedures.

b. Performance tests for the emissions of PM shall be conducted using EPA Methods 1-4 and 5 procedures.

At least 30 days prior to actua l performance testing, Pacific Oroville Power, Inc. shall subm it to EPA (Attn: AIR-5): (1) aPacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 7 quality assurance project plan deta iling methods and procedures to be used; and (2) a written quality assurance plant. Such a plan shall conform to EPA guidelines for developing project plans (“Guidelines for Developing a Quality Assurance Project Plan,” QAMS 005/80). A test plan or QA plan that does not have EPA approval may be grounds to invalidate any test and require a retest.

In lieu of the above-mentioned te st methods, equivalent methods may be used with prior writt en approval from the EPA.

3. For performance test purposes, sampling ports, platforms and access shall be provided by Pacifi c Oroville Power, Inc. on the

ESP exhaust stack and the coal mill stack in accordance with 40 CFR 60.8(e).

4. Source Tests for Toxic Pollutants

Pacific Oroville Power, Inc. shall participate and c ooperate in any tests for toxic pollutants from thei r facility, conduct ed by the State Department of Health and/or the California Air Resource Board.

F. Continuous Monitoring

1. Prior to the date of startup and thereafter, Pacific Oroville Power, Inc. shall install, maintain and operate the following:

a. a transmissometer system for continuous measurement of the opacity of stack emissions. The system shall meet EPA monitoring performance speci fications (40 CFR 60.13 and 40 CFR Part 60, Appendix B, Performance Specification 1).

b. a continuous emissions monitor system for the continuous measurement of NOx stack emissions. The system shall meet EPA monitoring performa nce specifications (40 CFR 60.13, 40 CFR Part 60, Appendix B, Performance Specification 2, and the quality assurance procedures in 40 CFR Part 60, Appendix F).

2. Pacific Oroville Power, Inc. shal l notify EPA (Attn: AIR-5) of the date upon which demonstration of the continuous monitoring system performance commences (40 CFR 60.13(c)).

3. Pacific Oroville Power, Inc. shall submit a written report of all excess emissions to EPA (Attn: AIR- 5) for every calendar quarter. The report shall include the following:Pacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 8 a. The magnitude of the excess emissions computed in accordance with 40 CFR 60.13(h) , any conversion factors used, and the date and time of commencement and compilation of each time period of excess emissions.

b. Specific identification of each period of excess emissions that occurs during startups, shutdowns, or malfunctions of any of the boilers. The nature and cause of any malfunction (if known) and the corrective action taken or preventative measures adopted shall also be reported.

c. The date and time identifying each period during which the continuous monitoring system was inoperative except for zero and span checks, and the na ture of the system repairs or adjustments.

d. When no excess emissions have occurred or the continuous monitoring systems (including CO 2 measurement device) has not been operative, repaired, or adjusted, such information shall be stated in the report.

Excess emissions shall be define d as any 6-minute average, as measured by the continuous mon itoring system, which exceeds an opacity of 10 percent, except fo r one 6-minute period per hour of not more than 15 percent opacity. During grate events, excess emissions shall be defined as any 6-minute average, as measured by the continuous monitoring system, which exceeds an opacity of 20 percent, except for one 6-minut e period per hour of not more than 27 percent opacity.

For startup and shutdown periods, excess emissions shall be defined as any 6-minute average, as measured by the continuous monitoring system, which exceeds an opacity of 40 percent opacity if the boilers are in Mode B; and 20 percent if the boilers are operating in Mode A, as defined in condition IX.D.1.

4. Pacific Oroville Power, Inc. shall maintain a file of all measurements, including monitoring systems, monitoring device, and performance testing measurem ents: all continuous monitoring system performance evaluations; all continuous monitoring systems or monitoring device calib ration checks; adjustments and maintenance performed on these syst ems or devices; all periods of grate cleaning including the times the grate cleaning began and ended, the boiler number, and the zone within each boiler where grate cleaning occurred; and all other information required by 40 CFR 60 recorded in a permanent form suitable for inspection. ThePacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 9 file shall be retained for at least two (2) years following the date of such measurements, maintena nce, reports and records.

5. Not less than 90 days to the date of startup of either boiler, Pacific Oroville Power, Inc. shall submit to the EPA (Attn: AIR-5) a quality assurance project pal for th e certification and operation of

the continuous emission monitors. Such a plan shall conform to the EPA document “Guidelines for Developing a Quality Assurance Project Plan,” (QAMS 005/80). Continuous emission monitoring may not begin until the QA project plan has been approved by EPA Region 9.

G. Opacity Limit

Based on the actual opacity measured at the time of performance testing for PM (as required by Permit Condition E), the opacity emission limit contained in Permit Conditions D and F.3 may be revised by EPA to reflect a more stringe nt emission limit.

H. Additional Recordkeeping a nd Reporting Requirements

Record keeping and Reporting Requir ements as required under 40 CFR § 52.21(r)(6) for the project described in the Pacific Oroville Power PSD permit application submitted to the EPA and dated June 5, 2003.

1. The owner or operator shall documen t and maintain a record of the following information:

a. A description of the project;

b. Identification of the two w ood-fired boilers located at Pacific Oroville Power;

c. A description of the applicabilit y test used to determine that the project is not a major modification for any regulated NSR pollutant, including the baseline actual emissions, the projected actual emissions, the amount of emissions excluded under 40 CFR § 52.21(b)(41)(ii)(c) and an explanation for why such amount was excluded, and any netting calculations, if applicable.

2. The owner or operator shall s ubmit a report to EPA Region 9 (Attn: AIR-3) within 60 days af ter the end of each calendar year. The report shall include the following records which must be generated setting out the unit' s annual emissions during the calendar year that preceded submission of the report:Pacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 10 a. The owner or operator shall monitor the emissions of any regulated NSR pollutant that could increase as a result of the project and that is emitted by any of the emissions unit(s) whose emissions of a regulated NSR pollutant could be affected by the project; and

b. The owner or operator shall calc ulate and maintain a record of the annual emissions, in tons per year on a calendar year basis, for a period of 5 years following the issuance of the PSD permit modification for the project.

3. The owner or operator shall make the information required to be documented and maintained pursu ant to Special Condition IX.H. available for review upon a request for inspection by the EPA and the general public pursuant to the requirements contained in 40 CFR § 70.4(b)(3)(viii).

I. Temporary FGR Feasibility Study

Pacific Oroville Power, Inc. may tem porarily install, operate, and test a flue gas recirculation (FGR) system subject to the following conditions:

1. Installation, operation, and testing of the FGR system shall occur within 180 days after permit issuance.

2. Pacific Oroville Power, Inc. shall submit to EPA a test protocol prior to testing the FGR system . The protocol shall include procedures for air emissions test ing, and shall provide the time period for which Pacific Oroville Power, Inc. will be conducting any tests. Pacific Oroville Power, Inc. may request additional time to conducting any tests, which mu st be approved in writing by EPA. FGR testing shall be conducted in accordance with the submitted protocol, and any changes required by EPA.

3. Pacific Oroville Power, Inc. shall continue to operate all continuous emissions monitoring systems (CEMS) required by this PSD permit. Pacific Oroville Power, Inc. shall also monitor and record NOx, CO, O 2 , opacity, underfire air, boiler bed depth, and steam production, and other process parameters requested by EPA, during the testing the of the FGR system.

4. Pacific Oroville Power, Inc. shall submit a report of the results of testing the FGR system to EPA and the Butte County Air Quality Management District within 60 days of completing all tests. All periods of noncompliance with any existing permit emissionPacific Oroville Power, Inc.
PSD Permit No. SAC 83-02 Amended December 13, 2010 11 limitation shall be identified in th e report. In addition, the report shall verify any intent to proceed with necessary notifications or applications for permanent modifications to the existing facility.

X. Agency Notifications

A. Unless otherwise directed by the EPA or this permit, the owner or operator shall submit a copy of all test plans, reports, certifications, notifications, and other information pertaining to compliance with this permit to:

Director, Air Divi sion (Attn: Air-5) U. S. Environmental Protection Agency, Region 9

75 Hawthorne Street San Francisco, CA 94105

Email: R9.AEO@epa.gov Fax: (415) 947-3579

B. The owner or operator shall s ubmit permit applications, permit amendments, and other applicable pe rmit information, which includes but

not limited to installation of cont rol equipment, replacement of an emissions unit, and changes that contravene permit terms, to:

. Director, Air Divi sion (Attn: AIR-3) U. S. Environmental Protection Agency, Region 9

75 Hawthorne Street San Francisco, CA 94105

C. Copies of all correspondence required by this PSD Permit shall be

forwarded to:

Air Pollution Control Officer Butte County Air Quality Management District 2525 Dominic Drive, Suite J Chico, CA 95928