### AMENDED PREVENTION OF SIGNIFICANT DETERIORATION PERMIT ISSUED PURSUANT TO THE REQUIREMENTS OF 40 CFR 

### § 52.21

U.s. ENVIRONMENTAL PROTECTION AGENCY, REGION 9

PSD PERMIT NUMBER: SAC 06-01

PERMITTEE: Pacific Gas & Electric Company 915 Highland Point Drive, Suite 130 Roseville, CA 95678

FACILITY NAME: Colusa Generating Station

FACILITY LOCATION: 4780 Dirks Road Maxwell, CA 95955

Pursuant to the provisions ofthe Clean Air Act (CAA), Subchapter I, Part C (42 U.S.C. Section 7470, et. seq.), and the Code of Federal Regulations (CFR) Title 40, Section 52.21, the United States Environmental Protection Agency Region 9 (EPA) is issuing an Amended Prevention of Significant Deterioration (PSD) air quality permit to the Pacific Gas & Electric Company (PG&E). This Amended PSD Permit revises the PSD permit issued to PG&E on September 29, 2008 and amended on March 19, 2010, for the construction and operation of a new 660 megawatt (MW) combined cycle power plant called Colusa Generating Station (CGS), in Colusa County, California.

PG&E is authorized to construct and operate the CGS power plant as described herein, in accordance with the permit application as revised (and plans submitted with the permit application), the federal PSD regulations at 40 CFR § 52.21, and other terms and conditions set forth in this Amended PSD Permit. Failure to comply with any condition or term set forth in this Amended PSD Permit will be grounds for enforcement action pursuant to Section 113 of the Clean Air Act. This permit does not relieve CGS from the obligation to comply with applicable federal, state, and Colusa County Air Pollution Control District air pollution control rules and regulations.

This Amended PSD Permit becomes effective immediately. 

# /!l;{**~L** {Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 2 of 13 

### COLUSA GENERATING STATION PREVENTION OF SIGNIFICANT DETERIORATION PERMIT AMENDED PERMIT CONDITIONS

PSD Permit No.: SAC 06-01

PROJECT DESCRIPTION

The Colusa Generating Station (CGS) will consist of two combustion turbine generators (CT), each vented to a heat recovery steam generator (H RSG). The facility will also consist of a single condensing reheat steam turbine generator (STG), dry cooling tower technology, and other associated equipment. Each HRSG will be equippe d with a duct burner. Each of the CTs will be equipped with dry low NOx (DLN) combustors. The facility will install selective catalytic reduction (SCR) and oxidation catalyst systems. Pacific Gas & Electric Company (Permittee) will construct and operate CGS. The project is subject to the PSD program for nitrogen oxides (NO x ), carbon monoxide (CO), volatile organic compounds (VOC), particulate matter (PM), and particulate matter less than 10 microns (PM 10 ).

EQUIPMENT DESCRIPTION

Emission Unit Id. Description EU-1 One (1) natural gas-fired CT generator rated at 172 MW, vented to a HRSG with a 688 MMBtu/hr duct burner EU-2 One (1) natural gas-fired CT generator rated at 172 MW, vented to a HRSG with a 688 MMBtu/hr duct burner EU-3 One (1) natural gas-fired 10 MMBtu/hr water bath heater EU-4 One (1) 8,000 gpm wet surface air cooler

PERMIT CONDITIONS

I. Permit Expiration
As provided in 40 CFR 52.21(r), this PSD Permit shall become invalid if construction:

A. is not commenced (as defined in 40 CFR 52.21(b)(9)) within 18 months after the approval takes effect; or

B. is discontinued for a period of 18 months or more; or

C. is not completed within a reasonable time.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 3 of 13 II. Permit Notification Requirements
Permittee shall notify EPA Region 9 in writing or by electronic mail of the:

A. date construction is commenced, postmarked within 30 days of such date.

B. actual date of initial startup, as defined in Condition X.E.7., postmarked within 15 days of such date.

C. date upon which initial performance tests will commence, in accordance with the provisions of Condition X.F.1., postmarked not less than 30 days prior to such date. Notification may be provided with the submittal of the performance test protocol required pursuant to Condition X.F.2.

D. date upon which initial performance evaluation of the CEMS will commence in accordance with 40 CFR 60.13(c), postmarked not less than 30 days prior to such date. Notification may be provided with the submittal of the CEMS performance test protocol required pursuant to Condition X.C.6.

III. Facility Operation At all times, including periods of startup, shutdown and malfunction, Permittee shall, to the extent practicable, maintain and operate the facility including associated air pollution control equipment in a manner consistent with good air pollution control practice for minimizing emissions. Determination of whether acceptable operating and maintenance procedures are being used will be based on information available to the EPA which may include, but is not limited to, monitoring results, opacity observations, review of operating maintenance procedures and inspection of the source.

IV. Malfunction Reporting

A. Permittee shall notify EPA by facsimile or electronic mail at R9.AEO@epa.gov within two (2) working days following the discovery of any failure of air pollution control equipment, process equipment, or of a process to operate in a normal manner, which results in an increase in emissions above the allowable emission limits stated in Section X.D. of this permit.

B. In addition, Permittee shall notify EPA in writing or electronic mail within fifteen (15) days of any such failure described under Condition IV.A. The notification shall include a description of the malfunctioning equipment or abnormal operation, the date of the initial malfunction, 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 in Section X.D., 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 of this permit or any law or regulation such malfunction may cause.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 4 of 13 V. Right of Entry
The EPA Regional Administrator, and/or an authorized representative, upon the presentation of credentials, shall be permitted:

A. to enter the premises where the source is located or where any records are required to be kept under the terms and conditions of this PSD Permit; and

B. during normal business hours, to have access to and to copy any records required to be kept under the terms and conditions of this PSD Permit; and

C. to inspect any equipment, operation, or method subject to requirements in this PSD Permit; and

D. to sample materials and emissions from the source(s).

VI. Transfer of Ownership
In the event of any changes in control or ownership of the facilities to be constructed, this PSD Permit shall be binding on all subsequent owners and operators. Permittee shall notify the succeeding owner and operator of th e existence of this PSD Permit and its conditions by letter, a copy of which shall be forwarded to EPA Region 9.

VII. Severability
The provisions of this PSD Permit are severable, and, if any provision of the PSD Permit is held invalid, the remainder of this PSD Permit shall not be affected.

VIII. Other Applicable Regulations
Permittee shall construct and operate this project in compliance with this PSD permit and all other applicable federal, state, and local air quality regulations. This PSD permit does not release the Permittee from any liability for compliance with other applicable federal, state and local environmental laws and regulations, including the Clean Air Act.

IX. Reserved

X. Special Conditions

A. Reserved

B. Air Pollution Control Equipment and Operation

1. Prior to initial startup, as defined in Condition X.E.7, Permittee shall install, and thereafter continuously operate and maintain:Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 5 of 13 a. Dry Low NO x Burners, Selective Catalytic Reduction (SCR) and Oxidation Catalyst units to control NO x and CO emissions from EU-1 and EU-2; and
b. A low NO x burner for EU-3.

2. The aforementioned “continuous periods of operation” do not include periods of shakedown, startup and shutdown, as defined in Condition X.E. except as required by Condition X.B.3.

3. During any turbine startup, ammonia injection shall be initiated as soon as the SCR catalyst temperature exceeds 500 degrees F.

4. The SCR units for EU-1 and EU-2 shall be designed to meet a NO x emission limit of no more than 2.0 ppmvd (1-hr average) corrected to 15 percent O 2 , for the life of the SCR catalyst.
5. Permittee shall ensure that the duct burners are not operated unless the associated turbine units are in operation.

C. Continuous Monitoring Systems

1. At the earliest feasible opportunity, in accordance with the recommendations of the equipment manufacturer and the construction contractor, Permittee shall install, and thereafter operate, maintain, certify, and quality-assure a continuous emission monitoring system (CEMS) for each CT which measures stack gas NO x , CO and O 2 concentrations in ppmv. The pollutant concentrations shall be corrected to 15 percent O 2 on a dry basis.

2. The NO x and O 2 CEMS shall meet the applicable requirements of 40 CFR Part 60 Appendix B, Performance Specifications 2 and 3, and 40 CFR Part 60 Appendix F, Procedure 1. The operator may use the procedures in the Linearity Check of 40 CFR Part 75, Appendix A, section 6.2 in lieu of the cylinder gas audit procedures in 40 CFR Part 60, Appendix F, Procedure 1.
3. The CO CEMS shall meet the applicable requirements of 40 CFR Part 60 Appendix B, Performance Specification 4, and 40 CFR Part 60 Appendix F, Procedure 1, except the relative accuracy specified in section 13.2 of 40 CFR Part 60 Appendix B, Performance Specification 4 shall not exceed 20 percent.
4. The performance evaluation of the CEMS may either be conducted separately, as specified in 40 CFR 60.4405(b)(5), or as part of the initial performance test of each emission unit.
5. The CEMS shall complete a minimum of one cycle of operations (sampling, analyzing and data recording) for each successive 15-minute period.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 6 of 13 6. Permittee shall submit a CEMS performance test protocol to the EPA no later than 30 days prior to the test date to allow review of the test plan and to arrange for an observer to be present at the test. The performance test shall be conducted in accordance with the submitted protocol, and any changes required by EPA.

7. Permittee shall furnish the EPA a written report of the results of performance tests within 60 days of completion.

8. The stack gas volumetric flow rates shall be calculated in accordance with the fuel flow meter requirements of 40 CFR Part 75 Appendix D in combination with the appropriate parts of EPA Method 19.

9. Prior to the date of initial startup (as defined in this PSD permit), Permittee shall install, and thereafter maintain and operate, in accordance with X.C.1., continuous monitoring and recording systems to measure and record the following operational parameters:

a. The ammonia injection rate of the ammonia injection system.
b. Exhaust gas temperature at the inlet to the SCR reactor.

D. Emission and Operational Limits
The following emission and operational limits shall apply at all times, except as provided below:

1. Total annual emissions from EU-1, EU-2, EU-3, and EU-4 shall not exceed the following:

a. 184.7 tons NO x per rolling 12-month period
b. 267.9 tons CO per rolling 12-month period

c. 47.5 tons VOC per rolling 12-month period
d. 103.4 tons PM per rolling 12-month period

e. 103.4 tons PM 10 per rolling 12-month period

2. Daily emissions from each CT (EU-1 and EU-2) shall not exceed the following:

a. 1,497.3 lbs NO x per day
b. 3,829.5 lbs CO per day

c. 315.3 lbs VOC per day
d. 324 lbs of PM per day

e. 324 lbs of PM 10 per day

3. Emissions from each CT (EU-1 and EU-2) shall not exceed the following, except as provided by the provisions of Condition X.E.:Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 7 of 13 a. 19.6 lbs of NO x per hour or 2.0 ppmvd NO x , corrected to 15 percent O 2 , averaged over any 1-hour period
b. 17.9 lbs of CO per hour or 3.0 ppmvd CO, corrected to 15 percent O 2 , averaged over any consecutive 3-hour period

c. 11.0 lbs of VOC per hour or 2.0 ppmvd VOC, corrected to 15 percent O 2 , averaged over any 1-hour period
d. 13.5 lbs of PM per hour

e. 13.5 lbs of PM 10 per hour

4. Emissions from EU-3 shall not exceed the following:

a. 0.39 lbs of NO x per hour or 30.0 ppmvd NO x , corrected to 3 percent O 2 , averaged over any consecutive 3-hour period
b. 0.79 lbs of CO per hour or 100.0 ppmvd CO, corrected to 3 percent O 2 , averaged over any consecutive 3-hour period

c. 0.027 lbs of VOC per hour or 7 ppmvd VOC, corrected to 3 percent O 2 , averaged over any consecutive 3-hour period
d. 0.029 lbs of PM per hour

e. 0.029 lbs of PM 10 per hour
5. Emissions from EU-4 shall not exceed the following:

a. 0.24 lbs PM 10 per hour from EU-4

E. Requirements during Shakedown, Startup and Shutdown Periods
The CT emission limits in Section X.D.3. shall not apply during CT shakedown, startup and shutdown periods. During sh akedown, startup and shutdown periods, the following requirements shall apply:

1. The CEMS shall be in operation during each startup and shutdown period.

2. No more than one CT shall be in startup mode at any time.

3. Duration of cold startups shall not exceed 270 minutes, warm startups shall not exceed 180 minutes, and hot startups shall not exceed 90 minutes per occurrence.
4. Duration of shutdowns shall not exceed 30 minutes per occurrence.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 8 of 13 5. While in a startup or shutdown period, exhaust emissions for each CT shall not exceed the limits in the following table:

Pollutan t Cold Startup Warm Startup Hot Startup Shutdown

lb/hour lb/even t lb/hour lb/even t lb/hour lb/even t lb/hour lb/even t

NO x 333.3 779.10 249.9 456.20 152.0 259.90 115.0 115.0

CO 429.6 1355.6 373.6 790.5 370.3 679.6 483.5 483.5

VOC 27.7 106.7 27.7 47.4 27.7 38.0 23.9 23.9

SO 2 0.40 1.01 0.40 0.58 0.40 0.33 0.20 0.20

PM/PM 10 12.0 48.8 12.0 30.8 12.0 12.8 6.0 6.0

6. The time, date and duration of each startup and shutdown event shall be recorded. The records shall include lbs/hour emission calculations based on the CEMS data. These records shall be kept for five years following the date of such events.

7. For CTs, “initial startup” shall be defined as the first fire of each unit.

8. Shakedown shall be defined as the period beginning with initial startup and ending no later than initial performance testing, during which the Permittee conducts operational and contractual testing and tuning to ensure the safe, efficient and reliable operation of the plant.

9. Startup shall be defined as the period beginning with ignition and lasting until the equipment has reached a continuous operating level and meets permit limits specified in Condition X.D.3. Cold startup means a startup when the combustion turbine has not been in operation during the preceding 72 hours. Hot startup means a startup when the combustion turbine has been in operation during the preceding 8 hours. Warm startup means a startup that is not a hot or cold startup.

10. Shutdown shall be defined as the period beginning with the lowering of equipment from base load and lasting until fuel flow is completely off and combustion has ceased.

11. Compliance with the PM/PM 10 and SO 2 emission limits that apply during startup and shutdown periods may be demonstrated by compliance with Condition X.I.1.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 9 of 13 12. Compliance with the VOC limits that apply during startup and shutdown periods shall be based on compliance with the CO limits during the startup and shutdown periods.

F. Performance Tests

1. Within 60 days after achieving the maximum production rate the facility will operate at, but not later than 180 days after the initial startup of equipment, and annually thereafter (within 30 days of the initial performance test anniversary), Permittee shall conduct performance tests (as described in 40 CFR 60.8) for NO x , CO, VOC, PM, and PM 10 emissions from each gas turbine. The annual test shall be performed in accordance with the requirements of 40 CFR Part 60, Appendix F, Procedure 1, Section 5.1.1.

2. Permittee shall submit a performance test protocol to EPA no later than 30 days prior to the test to allow review of the test plan and to arrange for an observer to be present at the test. The performance test shall be conducted in accordance with the submitted protocol, and any changes required by EPA.
3. Performance tests shall be conducted in accordance with the test methods set forth in 40 CFR 60.8 and 40 CFR Part 60, Appendix A, as modified below:

a. EPA Methods 1-4 and 7E if NO x emissions are measured in ppmv.
b. EPA Methods 1-4, 7E, and 19 if NO x emissions are measured on a heat input basis.

c. EPA Methods 1-4 and 10 for CO emissions.
d. EPA Methods 25A or 25B for VOC emissions.

e. EPA Methods 1-4 and 5 for PM emissions.
f. EPA Methods 1-4, 5 and 202 – as modified below, for PM 10 emissions:
i. EPA Method 202 test methodology must include the following: (A) A one-hour nitrogen purge, (B) The alternative procedure described in section 8.1 to neutralize the sulfuric acid, (C) Evaporation of the last 1 ml of the inorganic fraction by air drying following evaporation of the bulk of the impinger water in a 105 oC oven as described in the first sentence of section 5.3.2.3., andColusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 10 of 13 (D) Each test run period shall be 2 hours.
ii. In lieu of Method 202, the Permittee may use EPA Conditional Test Methods for particulate matter: CTM-039 or CTM-040.

g. In lieu of the specified test methods, alternative methods may be used with prior written approval from EPA.

4. In addition to the performance test for NO 2 required in condition X.F.1, the initial performance test conducted after ‘initial startup’ shall use the test procedures for a ‘high NO 2 emission site,’ as specified in San Diego Test Method 100, to measure NO 2 emissions. The source shall be classified as either a ‘low’ or ‘high’ NO 2 emission site based on these test results. If the emission source is classified as a:

a. ‘high NO 2 emission site,’ then each subsequent performance test shall use the test procedures for a ‘high NO 2 emission site,’ as specified in San Diego Test Method 100.
b. ‘low NO 2 emission site,’ then the test procedures for a ‘high NO 2 emission site,’ as specified in San Diego Test Method 100, shall be performed once every five years to verify the source’s classification as a ‘low NO 2 emission site.’
5. The performance test methods specified in Condition X.F.3., may be modified as follows:

a. Perform a minimum of 9 reference method runs, with a minimum time per run of 21 minutes, at a single load level, between 90 and 100 percent of peak (or the highest physically achievable) load.
b. Use the test data both to demonstrate compliance with the applicable NO x emission limit and to provide the required reference method data for the RATA of the CEMS.

6. For performance test purposes, sampling ports, platforms, and access shall be provided on the emission unit exhaust system in accordance with the requirements of 40 CFR 60.8(e).

7. Permittee shall furnish the EPA a written report of the results of performance tests within 60 days of completion.

8. Upon written request from the Permittee, and adequate justification, EPA may waive a specific annual test and/or allow for testing to be done at less than maximum operating capacity.

9. The CEMS shall be tested annually and quarterly in accordance with the requirements of 40 CFR 60 Appendix F, Procedure 1.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 11 of 13 G. Recordkeeping and Reporting

1. Permittee shall maintain records of the hours of operation for EU-3 and EU-4.

2. Permittee shall maintain records of the fuel used in EU-1, EU-2, and EU-3.
3. Permittee shall maintain all records on site of actual operating data and emissions calculations for lb/hr, lb/event, lb/day and tpy emissions limits required in section X.D. of this PSD Permit.

4. Permittee shall maintain CEMS records that contain the following: the occurrence and duration of any startup, shutdown or malfunction, performance testing, evaluations, calibrations, checks, adjustments, maintenance, duration of any periods during which a continuous monitoring system or monitoring device is inoperative, and emission
measurements.
5. Permittee shall maintain records and submit a written report of all excess emissions to EPA semi-annually. The report is due on the 30 th day following the end of the calendar quarter and shall include the following:

a. Time intervals, data and magnitude of the excess emissions, the nature and cause (if known), corrective actions taken and preventive measures adopted;
b. Applicable time and date of each period during which the CEMS was inoperative (monitor down time), except for zero and span checks, and the nature of system repairs or adjustments; and

c. A negative declaration when no excess emissions occurred or when the CEMS has not been inoperative, repaired, or adjusted.

6. Excess emissions shall be defined as any operating hour in which the 4- hour rolling average NO x concentration, or the 3-hour rolling average CO concentration, as measured by the CEMS, exceeds the maximum emission limits set forth in Condition X.D.3.

7. A period of monitor down time shall be any unit operating hour in which sufficient data are not obtained to validate the hour for NO x , CO or O 2 . 8. Excess emissions indicated by the CEM system shall be considered violations of the applicable emission limit for the purpose of this permit.

9. All records required by this PSD Permit shall be retained for five years following the date of such measurements, maintenance, and reports.Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 12 of 13 H. New Source Performance Standards
The proposed power plant is subject to the federal regulations entitled Standards of Performance for New Stationary Sour ces (40 CFR Part 60). The owner or operator shall meet all applicable requirements of 40 CFR Part 60 Subparts A, Dc, and KKKK.

I. Fuel Use

1. Permittee shall use only pipeline quality natural gas to fire EU-1, EU-2, and EU-3.

2. Permittee shall keep a monthly record of the quantity of natural gas used in EU-1, EU-2, and EU-3.

3. Permittee shall sample and record the sulfur content of the natural gas fuel on a monthly basis.

4. The monthly fuel sulfur content reading shall not exceed 0.75 grain per 100 dry standard cubic feet, and the rolling 12-month average fuel sulfur content shall not exceed 0.68 grains per 100 dry standard cubic feet.
5. The fuel sulfur content of the natural gas shall be determined using any of the following test methods: ASTM D1072, D3246, D4468, D5504 or D6667.

XI. 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 Division (Attn: AIR-5) U. S. Environmental Protection Agency Region 9 75 Hawthorne Street San Francisco, CA 94105-3901

Email: R9.AEO@epa.gov Fax: (415) 947-3579Colusa Generating Station (SAC 06-01) Amended PSD Permit 2 March 11, 2011 Page 13 of 13 B. The owner or operator shall submit permit applications, permit amendments, and other applicable permit information, which includes but not limited to installation of control equipment, replacement of an emissions unit, and changes that contravene permit terms, to:

Director, Air Division (Attn: AIR-3) U. S. Environmental Protection Agency Region 9 75 Hawthorne Street San Francisco, CA 94105-3901

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

Air Pollution Control Officer Colusa County APCD 100 Sunrise Blvd. #F Colusa, CA 95932-3246