Response to Comment Document 

for

EPA's Supplemental Notice of Proposed Rulemaking 

EPA-R09-OAR-2010-1078

Revision to the South Coast Portion of the California State Implementation Plan, CPV 

Sentinel Energy Project AB 1318 Tracking System

Prepared by:

Ann Lyons and Laura Yannayon

Air Division, Permits Office

United States Environmental Protection Agency, Region IX

San Francisco, California

November 1, 2012
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EPA published a Notice of Supplemental Proposed Rule on August 23, 2012, at 77 FR 50973, 

providing for a 30-day public comment period. EPA received detailed substantive comments 

from three organizations: the South Coast Air Quality Management District, Sentinel Energy 

LLC and jointly California Communities Against Toxics and Communities for a Better 

Environment. We also received comments from 20 individuals and a copy of a petition 

containing signatures of people opposed to the construction and operation of the CPV Sentinel 

Energy Project (“Sentinel”).

 Letter from the South Coast Air Quality Management District (“SCAQMD” or 

“District”)

Comment 1: The District states that it agrees with EPA’s quantification and surplus adjustment 

of the offsets listed in EPA’s Attachment A to the Technical Support Document – specifically 

that the District transferred 124,797 pounds of PM10 and 25,178 pounds of SOx offsets to the AB 

1318 Tracking System. The District states that the amount of offsets it transferred significantly 

exceeds the amount that it needed to transfer to allow Sentinel to operate, which was 118,120 

pounds of PM10 and 13,928 pounds of SOx.

Response 1: EPA agrees with the District that the amount of offsets listed in Attachment A 

exceeds the amount of offsets that is needed by Sentinel to operate. EPA also agrees the offsets 

listed in Attachment A to the Technical Support Document (TSD) for our Supplemental 

proposal, specifically 124,797 pounds of PM10 and 25,178 pounds of SOx, are properly quantified 

and surplus adjusted. EPA agrees with the District that the offsets listed in Attachment A meet 

all the federal requirements. Indeed, these numbers probably understate that actual amount of 

offsets that the District is transferring because of the conservative quantification approach, as 

discussed below. As also explained below in response to CCAT’s comments on quantification, in 

order to provide the most conservative quantification of offsets, we are reducing the amount of 

PM10 offsets in Attachment A by 306 pounds and of SOx offsets by 2 pounds. This slight revision 

does not affect our conclusion that the offsets listed in Attachment A exceed the amount needed 

to allow operation of Sentinel.

Comment 2: The District states: “To the extent that there are excess offsets in the AB 1318 

Tracking System that are not needed for the Sentinel project, they will be retired for the benefit 

of the environment.” Comment Letter at pg. 2.

Response 2: EPA commends the District for committing to retire the offsets in the AB 1318 

Tracking System that go beyond the amount needed to allow Sentinel to operate (i.e. 118,120 

pounds of PM10 and 13,928 pounds of SOx) for the benefit of the environment. EPA interprets 

this statement to mean that the District will retire all remaining offsets it transferred into the AB 

1318 Tracking System including those offsets not listed in Attachment A. Because EPA is 

finding that the District transferred more than enough offsets and is retiring all of the remaining 

offsets, a minor difference in the exact quantification of offsets for a particular facility would not 

change our final decision to approve this SIP revision.

Comment 3: The District states that it agrees with EPA’s Supplemental proposal to find that the 

2003 Air Quality Management Plan (“AQMP”) is appropriate for determining the base-year 

requirement in 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). The District states: “PM10 and PM2.5 are 

different pollutants with separate National Ambient Air Quality Standards, requiring separate 
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inventories and attainment demonstrations. See 71 Fed. Reg. 61,144 (Oct. 17, 2006).” Comment 

Letter at pg 2.

Response 3: EPA agrees with the District that it is appropriate to use the 2003 AQMP to 

establish the base-year for purposes of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) because the 2003 

AQMP is the most recently approved plan and attainment demonstration for PM10. The 2003 

AQMP contains plans for the South Coast Air Basin and the Coachella Valley. We will refer to 

them jointly in this document as the 2003 AQMP.

Comment 4: The District states that its own rules treat PM10 and PM2.5 differently for purposes 

of new source review.

Response 4: EPA notes that because this rule is a source-specific State Implementation Plan 

(“SIP”) revision, the offsets are not subject to the other provisions in the District’s Regulation 

XIII. EPA, however, agrees that Rule 1315 applies to PM10 and not PM2.5. EPA also agrees that 

the District adopted Rule 1325 to apply specifically to PM2.5.

Comment 5: The District states that the 2003 AQMP for PM10 uses a 1997 base-year and that 

“[n]one of the offsets transferred into the AB1318 Tracking System for use by Sentinel have a 

shutdown date earlier than 1999.” Comment Letter at pg 3. The District concludes that all of the 

offsets listed in Attachment A to EPA’s Technical Support Document meet federal requirements.

Response 5: EPA agrees with the District that the 2003 AQMP has a 1997 base-year for both 

the South Coast and the Coachella Valley Air Basins. EPA also agrees that all of the offsets 

listed in Attachment A were shutdown after the base-year date of 1997.

Comment 6: The District states that the 2007 AQMP for PM2.5 has explicitly included pre-baseyear offsets in accounting for growth.

Response 6: EPA agrees with the SCAQMD that additional pre-base-year offsets have been 

added into the 2007 PM2.5 attainment demonstration. As discussed in more detail in the 

Respondent’s Answering Brief that the United States Department of Justice filed on behalf of 

EPA in the 9th Circuit on January 18, 2012, Table 2-8 in Appendix III, Chapter 2 of the 2007 

AQMP shows how many tons per day of additional PM2.5 emissions the District included in the 

future year emissions data in the 2007 PM2.5 AQMP. Respondent’s Answering Brief at 37-41. 

The briefs filed in the 9th Circuit litigation are included in the record supporting our final 

determination.

 Letter on behalf of CPV Sentinel, LLC

Comment 1: CPV Sentinel LLC (“Sentinel”) states that it supports the Supplemental proposal’s 

use of the SCAQMD’s 2003 AQMP to establish the base-year for the SIP planning process for 

purposes of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). Sentinel states that although the 2007 AQMP 

would also be appropriate, “the 2003 AQMP is a valid selection because it is the most recent 

attainment demonstration that specifically addresses PM10.” Comment Letter at pg 2.

Response 1: EPA agrees with Sentinel that the 2003 AQMP is appropriate to establish the baseyear for the SIP planning process for PM10. As EPA stated in its Supplemental proposal, “[t]he 

reason for relying on the 2003 AQMPs is that the offsets the District transferred to the AB 1318 
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Tracking System are for PM10, not PM2.5. The District has approved the PM10 AQMPs for both 

the South Coast Air Basin and the Coachella Valley that were adopted in 2003.” 77 FR at 50977.

Comment 2: After noting that California Communities Against Toxics and Communities for a 

Better Environment (jointly “CCAT”) argued in their brief filed with the 9th Circuit Court of 

Appeals that the 2003 AQMP would not be appropriate because it is not “valid,” Sentinel states 

that there is no requirement for the 2003 AQMP to be “valid.” Sentinel cites to EPA’s 

regulations, its 1989 promulgation of 40 CFR Part 51, Appendix S and the decision of the United 

States Court of Appeals for the District of Columbia in NRDC v. EPA, 571 F.3d 1245 (D.C. Cir 

2009).

Response 2: EPA agrees with Sentinel that the standard for determining whether the 2003 

AQMP is appropriate for purposes of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) is whether the attainment 

demonstration has been approved. EPA agrees with Sentinel that our regulations do not refer to a 

“valid” attainment demonstration and that our 1989 rulemaking states that “if the State lacks an 

approved attainment plan, the absence of an emissions inventory means that EPA has no 

assurance that use of prior shutdown offset credits for an indefinite period of time, without 

further review by EPA, would be consistent with further SIP planning for attainment.” 54 FR 

27286, 27294 (June 28, 1989). EPA also agrees with Sentinel that the DC Circuit Court held that 

EPA should ensure that there is an “approved” attainment demonstration for purposes of 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii). NRDC, 571 F.3d at 1267.

Comment 3: Sentinel disagrees with statements in the brief filed by CCAT in the 9th Circuit that 

the 2003 AQMP is invalid because it failed to attain the PM10 NAAQS and in CCAT’s opinion 

cannot serve the purpose of an approved attainment demonstration. Sentinel attached to its 

comment letter a copy of a letter from the California Air Resources Board dated March 23, 2010 

submitting a “Request for PM10 Redesignation and Maintenance Plan for the Coachella Valley.”

Response 3: EPA agrees with Sentinel that there have not been any regulatory actions that 

would have the effect of invalidating the 2003 AQMP and that the 2003 AQMP continues to be 

the approved attainment demonstration for PM10 in the Coachella Valley and South Coast Air 

Basins. EPA also agrees that the California Air Resources Board has submitted requests to EPA 

to re-designate both the Coachella Valley and the South Coast Air Basins to attainment for the 

24-hour PM10 NAAQS. EPA revoked the annual PM10 NAAQS in 2006. 71 FR 61144 (October 

17, 2006).

Comment 4: Sentinel states that arguments CCAT made in its 9th Circuit briefs that EPA could 

only rely on an attainment demonstration that led to re-designation would be nonsensical and 

make the EPA’s offsetting requirements meaningless. Sentinel states: “If only a ‘valid’ 

attainment demonstration plan (i.e., a plan that has led to successful attainment of the pertinent 

NAAQS) can be used to satisfy the base-year requirement, then emission offsets would not even 

be necessary because the area would be attainment.” Comment Letter at pg 4.

Response 4: EPA agrees with Sentinel regarding the practical implications of the argument. 

Comment 5: On October 26, 2012, Sentinel submitted a late comment letter in which it 

requested EPA to use the good cause exception set forth in section 553(d)(3) of the 

Administrative Procedures Act, 5 U.S.C. 553(d)(3) to make the final rule effective immediately 
4

upon publication in the Federal Register. Sentinel stated that the purpose of the usual 30-day 

delay for rule effectiveness is to allow the regulated entity an opportunity to make any changes 

necessary to be in compliance with the rule. Sentinel stated that it has been aware of what would 

be required of it as a result of this rule for 18 months. Sentinel anticipates beginning its 

commissioning period in November 2012. Sentinel added that if the power plant is on-line next 

summer, it will help the region avoid any potential electricity shortfalls.

Response 5: EPA has discretion to accept late comments and will accept the comment 

submitted by Sentinel. EPA agrees with Sentinel that it has demonstrated good cause for EPA to 

issue this final rule with an immediate effective date. Sentinel has been under construction for 

the past 12 to 18 months in anticipation of beginning its commissioning period in November 

2012. Sentinel and the District provided information regarding the potential effects of delaying 

commissioning and operations beyond this date in the briefs submitted in the 9th Circuit. Sentinel 

has indicated that it will not be harmed by the immediate effective date. Therefore, the final rule 

will become effective upon publication.

 Letter from California Communities Against Toxics and Communities for a Better 

Environment (collectively herein “CCAT”)

Comment 1: CCAT’s introductory paragraph states that CCAT is incorporating all of its prior 

comments as well as all of the arguments it presented to the 9th Circuit.

Response 1: In this RTC, EPA is responding to comments regarding our interpretation of the 

CAA, our regulations and guidance. EPA is including our prior responses to comments from our 

April 20, 2011 final rule, except to the extent we have made changes through this supplemental 

proposal. EPA is also including as responses to the proposal and supplemental proposal the 

arguments contained in the docket which were made by the United States in the briefs filed with 

the 9th Circuit in the litigation leading to the remand of the final rule. These documents, 

including the record for our final rule in April 2011 and the litigation, provide EPA’s 

justification for finalizing our approval of the source-specific SIP revision.

• CCAT Heading I. “EPA’s ‘Supplemental Proposed Rule’”

Comment 1: In this initial portion of the comment letter, CCAT contends that EPA committed a 

procedural error by publishing a Supplemental proposed rule rather than publishing a new 

proposed rule following the judicial remand of the rule to EPA. CCAT asserts that the rule EPA 

proposed on January 13, 2011 and finalized on April 20, 2011, no longer exists because the 9th

Circuit Court of Appeals stated the final rule was invalid and, therefore, EPA must adopt a new 

rule. CCAT also states that it is EPA’s “practice” to re-propose a new rule after a court has 

remanded a rulemaking without vacating it, citing as an example EPA’s national Clean Air 

Interstate Rule (CAIR).

Response 1: EPA disagrees with the comment. The 9th Circuit remanded the final rule to allow 

EPA to provide additional justification on two discrete issues (quantification and surplus 

adjustment) and to change our reasoning on a third issue (the appropriate AQMP to establish the 

base-year for PM10). EPA published our Supplemental proposal following the 9th Circuit’s

decision in California Communities Against Toxics v. United States Environmental Protection 

Agency, 688 F.3d 989 (9th Cir. 2012). Our Supplemental proposal referred back to our January 
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13, 2011 proposal, and then provided additional justification and changed our reasoning by 

indicating that the District’s 2003 PM10 AQMP was appropriate to establish the base-year for SIP 

planning purposes in 40 CFR 51.165(a)(3)(ii)(C)(1)(ii).1

Almost one year before the 9th Circuit issued its opinion, EPA had acknowledged that we had 

made limited substantive errors when we finalized the rule in April 2011, and we requested the 

Court to remand the final rule in September 2011. See EPA’s Motion for Voluntary Remand of 

the Record, To Vacate the Briefing Schedule, and to Stay the Proceedings During Remand, dated 

September 14, 2011 (stating: “EPA now believes the better interpretation of 40 CFR § 

51.165(a)(3)(ii)(C)(1)(ii) is that the base year should be evaluated by reference to the base year 

used in the most recently approved attainment demonstration. The most recently approved 

attainment demonstration for PM10 for this area was submitted in 2003 and approved by EPA in 

2005. [citation omitted]”). Based on CCAT’s opposition to our Motion, we later briefed the 

merits of the case. In our merits brief, EPA again acknowledged the same limited errors 

regarding quantification and surplus adjustment of some offsets. We also advised the Court 

(consistent with our Motion) that we had changed our reasoning regarding the appropriate 

AQMP for determining the correct base-year for purposes of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). 

Based on EPA’s acknowledged errors, the Court stated the final rule was invalid and remanded it 

on July 26, 2012. The Court did not vacate the rule. 

Our federal approval of a SIP revision is a rulemaking action under the Administrative 

Procedures Act (“APA”). The APA prescribes the requirements for federal agencies to follow 

during rulemaking in Section 553. 5 U.S.C. § 553. Section 553(b) provides that agencies must 

publish a notice of proposed rulemaking in the Federal Register and Section 553(c) requires a 

period for public comments and the agency’s consideration of those comments. EPA published 

its proposed approval of the AB 1318 Tracking System in the Federal Register on January 13, 

2011. 76 FR at 2294. EPA provided an adequate opportunity for public comment, during which 

CCAT submitted comments. EPA considered the comments on our proposal and finalized our 

proposed approval on April 20, 2011. 76 FR at 22038.

When CCAT petitioned for judicial review and presented its arguments for the first time to EPA 

and the 9th Circuit in its Opening Brief, EPA acknowledged making some errors in finalizing the 

proposed approval. As noted above, EPA filed a Motion with the 9th Circuit requesting it to 

remand the rule, which CCAT opposed. Because the Appellate Commissioner summarily denied

our Motion for Voluntary Remand, we repeated these statements in Respondent’s Answering 

Brief and continued to request a remand without vacatur. Our position was consistent at oral 

argument.

The 9th Circuit issued its decision on July 26, 2012, remanding but not vacating EPA’s final rule 

from April 2011. Nothing in the Court’s ruling states (or even suggests) that EPA is required to 

re-propose a new approval of the source-specific SIP revision. Nothing in the Court’s opinion 

indicates that it invalidated or took any action concerning EPA’s proposed approval in January 

2011. Although CCAT claims categorically that “[t]his rule does not supplement the prior rule-

 1 40 CFR Part 51, Appendix S contains an identical provision at IV.(C)(3)(i)(2). Although neither regulation 

directly applies to the offset package in this source-specific SIP revision, EPA is properly looking to these 

provisions to interpret what requirements in general govern offsets. In the remainder of this document, we refer 

only to 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) which includes a reference to Appendix S as well.
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the prior rule no longer exists[]” (Comment Letter at pg. 1), there is no language in the 9th Circuit 

opinion to support that conclusion. The 9th Circuit opinion discusses EPA’s final rule, not our 

proposal.

The APA does not contain any provisions regarding the agency’s actions after it has proposed 

and finalized a rule that is subsequently remanded, with or without vacatur. Agencies frequently 

supplement their proposed rules with additional information and explanation. See e.g., 

“Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine Particulate Matter 

and Ozone (Clean Air Interstate Rule); Proposed Rule,’’ (69 FR 32684). The fact that the Court 

found the final rule was invalid (based on EPA’s acknowledged substantive errors) in no way 

limits the procedure by which we can elect to correct our errors. In fact, agencies have broad 

discretion in how to fashion a rulemaking provided we observe the prescriptions in Section 553 

in the APA to allow the public an opportunity to comment and that we consider those comments.

For this particular rulemaking, EPA determined that it would promote administrative efficiency 

to supplement our January 2011 proposal with the additional information we added to our record 

regarding the quantification and surplus adjustment of the offsets. We also supplemented the 

January 2011 proposal by explaining our new reasoning regarding the appropriate AQMP for 

establishing the base-year. The fact that we intended to add additional justification on 

quantification and surplus adjustment, and change our reasoning on the appropriate AQMP was 

also known by the public in general, and CCAT in particular, beginning with our Motion for 

Voluntary Remand in September 2011.

Our Supplemental proposal on August 23, 2012 was fully consistent with the APA. EPA 

provided adequate and meaningful notice to the public that we would be relying on our January 

2011 proposal in conjunction with the additional information concerning quantification and 

surplus adjustment along with our changed reasoning regarding the appropriate base-year 

provided in the Supplemental proposal. CCAT does not provide any basis beyond its 

unsupported conclusory statements for asserting that EPA cannot supplement our January 2011 

proposal.2 In addition, CCAT has not provided any evidence that it or any member of the public 

was harmed by our decision to supplement our January 2011 proposal rather then re-propose a 

new rule.

CCAT contends that it is EPA’s “practice” to re-propose rules if the original rule was remanded 

but not vacated, citing EPA’s Clean Air Interstate Rule (CAIR), which was remanded to the 

agency without vacatur in 2008. EPA’s decision to propose a new rule to replace CAIR neither 

established a general agency “practice,” nor limits the procedural options available to EPA in 

this rulemaking. Moreover, CAIR and the Cross-State Air Pollution Rule (Cross-State Rule) that 

EPA promulgated to replace CAIR,3 not only are unrelated to this action, but also were actions 

of a very different nature. CAIR addressed complex issues relating to the transport of pollution 

across state lines and created a methodology to quantify the pollution from upwind states that 

must be eliminated to avoid impermissible downwind impacts. Unlike this rule, it was also 

 2

 CCAT states: “Since the rule is invalid, EPA must adopt a new rule – this time in full compliance the procedural 

and substantive provisions of federal law.” Comment Letter at pg 1. But the comment does not provide any support 

or reasoning for the proposition.

3

 The D.C. Circuit subsequently issued a decision to vacate the Cross-State Rule and leave CAIR in place pending 

promulgation of a valid replacement rule. See EME Homer City Generation v. EPA, No. 11-1302 (D.C. Cir. Aug. 

21, 2011).
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subject to the procedural requirements established in section 307(d) of the Clean Air Act. 42 

U.S.C. §7607(d). The U.S. Court of Appeals for the D.C. Circuit issued a decision finding CAIR 

“fundamentally flawed” and vacating the rule. North Carolina v. EPA, 531 F.3d 896, 929 (D.C. 

Cir. 2008). The court explained “[w]e must vacate CAIR because very little will ‘survive[ ] 

remand in anything approaching recognizable form.” Id. (citation omitted). Subsequently, on 

rehearing, the court modified its original order to remand the rule without vacatur in order to “at 

least temporarily preserve the environmental values covered by CAIR.” North Carolina v. EPA, 

550 F.3d 1176, 1178. EPA’s decision to propose a new rule to completely replace CAIR under 

these circumstances does not compel the Agency to follow the same procedure for this sourcespecific SIP revision affecting the offset package for a single stationary source when we 

supplemented the proposal less than one month after the Court remanded the final rule and we 

continue to rely in part on the original proposal. As noted above, the Agency has also, as here, 

exercised its discretion to supplement proposed rules when it was appropriate. Although CCAT’s 

comments appear to suggest that there may be a different procedure EPA is required to follow 

when a final rule is remanded without vacatur, CCAT had not provided and EPA is not aware of 

any support for that conclusion. 

In summary, CCAT’s comment does not provide any reasoning or citation to support its 

conclusory assertion that EPA was not allowed to supplement its January 2011 proposed 

rulemaking. It is within EPA’s discretion to determine that supplementing the proposal is 

administratively efficient provided we comply with the APA. This is a very limited rulemaking, 

applying only to the offset package for one power plant permit. The SIP revision itself is 

unchanged and EPA’s proposed action to approve the source-specific SIP revision is 

unchanged. EPA only added information on two discrete issues while changing our reasoning 

on one issue. EPA clearly explained in the Supplemental proposal what procedure we were 

following as well as what information we were adding and the reasoning we were changing. We 

provided an adequate and meaningful opportunity for public comment during which we 

received comments. CCAT’s comment has not changed EPA’s decision to proceed with a 

Supplemental proposal. 

• CCAT Heading II. “The Planning Year for the Failed 2003 AQMP Cannot be the Base 

Year for Valid Offsets: In the Absence of an Approved Attainment Demonstration for 

PM10, Only Replacement Capacity Can Offset New Emissions”

This section of CCAT’s comment letter contains several arguments to conclude that new source 

growth, such as Sentinel in the South Coast and Coachella Valley Air Basins is prohibited unless 

that growth is replacing existing capacity that is shutting down or being curtailed. This portion of 

EPA’s Response to Comments also responds to the arguments under CCAT’s Heading II.B 

“EPA Cannot Rely on the Failed Superseded 2003 AQMP for a Base Year.” Therefore, the 

following responses respond to the comments found on pages 2, 4 and 5. Both sections of the 

comment letter appear to relate to whether the 2003 PM10 AQMP is appropriate to establish the 

base-year for purposes of 40 CR 51.165(a)(3)(ii)(C)(1)(ii). We consolidate our response to that 

issue below.

Comment 1: CCAT argues that the 2003 AQMP cannot be used to establish the base-year of 

1997 because the 2003 AQMP is no longer “valid.” CCAT asserts the 2003 AQMP is invalid 

because the South Coast and Coachella Valley Air Basins failed to attain the PM10 NAAQS in 
8

the attainment year of 2006. From this premise, CCAT concludes that new emissions of PM10 are 

only allowed in the area if those emissions are replacing existing capacity that is shutting down, 

citing 40 CFR 51.165(a)(3)(C)(1)(ii).

Response 1: EPA disagrees with CCAT’s assertion that the 2003 PM10 AQMP is not “valid” 

because it failed to demonstrate attainment in 2006. (As discussed below, EPA also disagrees 

that a “valid” AQMP is required by the regulations).

The CAA sets out a process according to which the States undertake the primary work of 

determining what is included in its “applicable implementation plan” to attain the NAAQS by a 

given attainment year. CAA Section 110(a)(1) establishes the requirement for a State to submit 

an implementation plan (i.e. SIP) containing its choice of control measures and other strategies 

that will result in timely attainment. Section 110(a)(2) sets forth specific requirements for 

implementation plans. The CAA defines the term “applicable implementation plan” in relevant 

part as follows: “For purposes of this chapter, the term ‘applicable implementation plan’ means 

the portion (or portions) of the implementation plan, or most recent revision thereof, which has 

been approved under section 7410 of this title, . . .” CAA 302(q) (emphasis added). CAA Section 

172 establishes the general requirements for nonattainment area SIPs. CAA sections 188 - 190 

contain additional provisions for particulate matter non-attainment area SIPs.

In 2005, EPA approved the SCAQMD’s 2003 PM10 AQMP as meeting all of these requirements.

See 70 FR 43663 (July 28, 2005)(Proposed Rule) and 70 FR 69081 (Nov. 14, 2005)(Final Rule).

Specifically, EPA stated: “We are approving the 2003 plan amendments to the 2002 SIPs for the 

South Coast and Coachella Valley serious nonattainment areas, as the plan amendments pertain 

to CAA provisions applicable to attainment SIPs for the 24-hour and annual PM10 NAAQS.

Specifically, we are approving under section 110(k)(3) the PM10 portions of the 2003 South 

Coast AQMP and the 2003 Coachella Valley Plan with respect to the CAA requirements for 

emissions inventories under section 172(c)(3); control measures, as meeting the requirements of 

section 110(a), 188(e) and 189(b)(1)(B); reasonable further progress under section 189(c)(1); 

contingency measures under section 172(c)(9); demonstration of attainment under section 

189(b)(1)(A) and motor vehicle emissions budgets under section 176(c)(2)(A).” 70 FR at 69083. 

Consequently, the 2003 AQMP is the most recent approved “applicable implementation plan” 

for PM10 for the South Coast and Coachella Valley Air Basins.4

An area’s failure to attain a NAAQS by the attainment date does not result in the attainment 

demonstration no longer being valid, as asserted by CCAT. Section 189(b)(1)(A) requires “A 

demonstration (including modeling) – (i) that the plan provides for attainment of the PM10

national ambient air quality standard by the applicable attainment date, . . .”. The statute then 

contains a specific provision concerning the failure of a PM10 SIP to attain. Section 189(d) 

provides “[i]n the case of a Serious PM10 nonattainment area in which the PM10 standard is not 

attained by the applicable attainment date, the State in which such area is located shall, after 

notice and opportunity for public comment, submit within 12 months after the applicable 

attainment date, plan revisions which provide for attainment of the PM10 air quality standard and, 

from the date of such submission until attainment, for an annual reduction in PM10 or PM10

precursor emissions within the area of not less than 5 percent of the amount of such emissions as 

reported in the most recent inventory prepared for such area.” Before this provision applies, 

 4 As discussed in detail below, the District has not submitted any subsequent SIP revisions for PM10. 
9

however, CAA section 179(c) establishes that EPA shall make, through notice and comment 

rulemaking, a finding of failure to attain six months after the attainment date has passed.

Although the attainment date for PM10 has passed, EPA has not made any finding that the South 

Coast or Coachella Valley Air Basins failed to attain the PM10 NAAQS.5

If EPA had made such a finding of failure to attain (after notice and comment), the provisions of 

CAA sections 189(d) and179(d) would apply and would allow additional time for the SCAQMD 

to submit a SIP revision with additional control measures and new attainment dates. These very 

specific statutory remedies are the consequences for an area’s failure to attain. Nothing in the 

statute or regulations supports CCAT’s assertion that the SCAQMD’s failure to attain the PM10

NAAQS by the attainment date invalidated the 2003 approved attainment demonstration.

The 2003 PM10 AQMP remains in effect and the control measures and other strategies to reduce 

emissions that make up the 2003 AQMP remain enforceable. The attainment demonstration also 

remains in effect, including the determination of the base-year for purposes of 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii). The base year for the 2003 AQMP is 1997. Therefore, any offsets 

resulting from sources shutting down after 1997 may be used to offset new PM10 source growth.6

To reiterate, there is nothing in the CAA or EPA’s regulations leading to “invalidation” of the 

2003 AQMP. Pursuant to Section 179(c), the consequences of failing to attain are not 

automatically triggered; instead they are only triggered when EPA makes a finding of failure to 

attain.7 Pursuant to CAA sections 189(d) and 179(d), EPA’s finding of a failure to attain does not 

invalidate the AQMP but leads to further control measures and planning requirements. Congress 

set forth the process and the process does not result in limiting new source growth to replacement 

capacity.

In addition, CCAT’s characterization of EPA’s regulation at 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) is 

incorrect. The regulation states that offsets from a shutdown or curtailment “may be generally 

credited for offsets” if “(ii) [t]he shutdown or curtailment occurred after the last day of the base 

year for the SIP planning process.” The regulations do not further provide that the SIP planning 

process must result in a re-designation to attainment. CCAT’s mischaracterization of the holding 

in NRDC v. EPA is discussed below in Response to Comment 5 and in response to the comments 

submitted on behalf of the CPV Sentinel Energy Project.

Comment 2: CCAT’s comment letter asserts that SCAQMD’s 2003 AQMP is “expired and 

supplanted” because it failed to bring the Region into attainment and therefore using the 2003 

AQMP would violate the CAA and the regulations implementing it.

 5 As discussed later in this Response to Comments, the District included information in its 2007 AQMP for PM2.5

indicating that monitored levels of PM10 in the South Coast and Coachella Valley were below the federal PM10

NAAQS. The SCAQMD has also submitted requests for re-designation of the areas on which EPA had not taken 

any action.

6

 CCAT’s Comment Letter states: “The SIP must have a valid attainment demonstration if its post-base year 

emissions reductions are to serve as offsets. The reasoning behind this rule is that if emission reductions have not 

been relied upon in assessing a current attainment strategy, the re-release of those reductions as new pollution 

should not threaten progress toward attainment.” Comment Letter at pg. 2. EPA does not understand this statement. 

7 EPA has not provided any notification to the SCAQMD that its 2003 PM10 AQMP is inadequate and has not 

published a Federal Register notice with a finding of failure to attain. Therefore, the SCAQMD continues to

implement the 2003 AQMP as required and the attainment demonstration base-year of 1997 is applicable for 

purposes of allowing PM10 offsets from shutdown sources to be used. 
10

Response 2: The 2003 AQMP is neither expired nor supplanted. For the reasons discussed 

above in response to Comment 1, an AQMP does not “expire” if the area fails to attain but is not 

yet re-designated to attainment. Even when areas are re-designated to attainment, the local 

agency may retain its AQMPs as part of its maintenance planning obligations. CAA section 

175A. As discussed above, the CAA has a specific process that applies to an area that has failed 

to attain a NAAQS by the attainment date. CCAT’s conclusory statements that the 2003 AQMP 

is expired or supplanted or invalid are not supported by the CAA. An approved AQMP’s failure 

to attain has no effect on the base year provision in 40 CFR 51.165(a)(3)(ii)(C)(1)(ii).

Comment 3: In footnote number 4, CCAT contends that even if the 2003 AQMP was the 

appropriate plan and attainment demonstration to use, the base-year for the Coachella Valley is 

2000 rather than 1997 which would result in eliminating of 11,644 pounds of PM and 932 

pounds of SOx from the AB 1318 Tracking System. Specifically, CCAT quotes the following 

language: “Base year (1995 and 2000) and future baseline (years 2003, 2006) PM10 emissions 

inventories (c.f. Tables 2-2 through 2-5).” Comment Letter at pg. 2.The only citation provided 

for the quoted language is a hyper-link to the entire 40 page 2003 Final Coachella Valley 

AQMP.

Response 3: CCAT has not provided a specific citation to the quotation in its footnote and 

further fails to provide the context for the statement to explain how this supports its contention. 

CCAT is responsible for raising its comments with sufficient specificity for EPA to respond. As 

the Supreme Court stated: “[A]dministrative proceedings should not be a game or a forum to 

engage in unjustified obstructionism by making cryptic and obscure reference to matters that 

‘ought to be’ considered and then, after failing to do more to bring the matter to the agency’s 

attention, seeking to have that agency determination vacated on the ground that the agency failed 

to consider matters ‘forcefully presented.’” Vermont Yankee Nuclear Power Corp. v. NRDC, 435 

U.S. 519, 553-54 (1978).

In any event, the Coachella Valley AQMP relies on a 1997 base-year. In describing the 

stationary source inventory for the Coachella Valley, the District states: “The 2003 CVSIP

incorporates those updated emission factors and/or recent activity data for source categories such 

as entrained paved and unpaved road dust, construction, windblown dust, and farming 

operations. As in the 2003 AQMP, these emission estimates use 1997 as the base year. The 

greatest change was in the estimation of windblown agricultural dust; new emission factors 

dramatically reduced annual emission estimates. [Peak 24-hour windblown dust estimates have 

not changed and are the overwhelming contributor to peak 24-hour PM10 days.]” 2003 Final

Coachella Valley AQMP at pg. 2-1 to 2-2 (emphasis added). Accordingly, EPA continues to find 

that the appropriate base-year for purposes of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) is 1997.

Comment 4: CCAT asserts that because the 2003 AQMP failed to attain, it is no longer a 

roadmap for attainment and that there is no further progress to make towards the 2006 attainment 

deadline. CCAT then repeats that the demonstrably failed 2003 attainment demonstration is not 

the approved attainment demonstration required by law. CCAT also repeats that the 2003 AQMP 

has been superceded by the 2007 AQMP.

Response 4: EPA disagrees with these comments. EPA’s regulations, as interpreted by the 

Court in NRDC v. EPA, require an area to have an approved attainment demonstration to 

establish the base-year for purposes of allowing offsets from shutdown sources under 40 CFR 
11

51.165(a)(3)(ii)(C)(1)(ii). There is no additional requirement that the area has been re-designated 

to attainment or that the AQMP remains a road map for attainment. CCAT has not cited any 

authority and has not provided any reasoning why the fact that “there is no further progress to 

make towards the 2006 attainment deadline” should lead to only allowing replacement capacity 

for new source growth. There is no support under the CAA that Congress intended to limit new 

source growth in nonattainment areas at the moment that an area’s attainment date passed.

Indeed, such an interpretation would result in a de facto construction ban, which Congress 

intentionally changed in the 1990 CAA Amendments. General Preamble, 57 FR 13498, 13552 

(Apr. 16, 1992) 

Comment 5: CCAT makes numerous points about its interpretation of the NRDC v. EPA

decision by the D.C. Court of Appeals. CCAT contends the case holds that pre-base year offsets 

are only allowed when there is a valid attainment demonstration. CCAT repeats that if there is no 

valid attainment demonstration, new emissions must be offset with replacement capacity. CCAT 

repeats that based on the Court’s holding the threshold question “is whether there is a valid 

attainment demonstration that actually demonstrates attainment.” Comment Letter at pg. 4. In 

addition, CCAT states that the Court in NRDC v. EPA found the requirement to limit new source 

growth to the amount that is replacement capacity was “necessary both to assure RFP and to 

guarantee that a new source does not cause or contribute to a violation of the NAAQS.” Id. 

Finally CCAT contends that requiring the more stringent “replacement rule” for an area without 

a valid attainment demonstration is necessary “because a nonattainment area with no valid 

attainment demonstration is in a dire situation indeed: no plan exists to reduce the unhealthy air 

quality inhaled on a daily basis by its residents, with particular implications for sensitive 

populations such as children and the elderly.” Comment Letter at pg. 5.

Response 5: EPA disagrees. To begin, the “replacement rule” only applies to offsets from 

facilities or sources that shutdown prior to the base-year. For the District’s AB 1318 Tracking 

System, all of the offsets resulted from facilities or sources that shutdown after the 1997 baseyear in the District’s 2003 AQMP for the South Coast and the Coachella Valley Air Basins. 

Therefore, the “replacement rule” is not at issue here. Even if the “replacement rule” was at 

issue, the NRDC v. EPA case is properly read to allow pre-base-year offsets to be explicitly 

added back into an approved attainment demonstration to allow for offsetting new source 

growth. EPA also interprets its regulations to limit new source growth to replacement capacity if 

there is no approved attainment demonstration and offsets generated prior to the base-year date 

have not been explicitly added back into an approved attainment demonstration. EPA interprets 

40 CFR 51.165(a)(3)(ii)(C)(1)(ii) to require an approved attainment demonstration to establish 

the base-year. Finally, CCAT does not explain how EPA’s reasonable determination that the 

SCAQMD 2003 AQMP is the appropriate attainment demonstration to establish the base-year 

does not assure reasonable further progress or that a new source will not cause or contribute to a 

violation of the NAAQS. In fact, here the “Air Quality Demonstration: SIP Revision for CPV 

Sentinel Energy Project” modeling demonstration, which is part of EPA’s record on our 

proposed rulemaking, shows that the emissions from this source will not cause or contribute to a 

violation of the PM10 NAAQS. EPA also disagrees with CCAT’s statement that an area that has 

not been re-designated to attainment is a “dire situation.” With respect to the annual PM10

standard, EPA revoked it in 2006 “because available evidence generally does not suggest a link 

between long-term exposures to current levels of coarse particles and health problems.” Fact 

Sheet: Final Revisions to the National Ambient Air Quality Standards for Particle Pollution 
12

(Particulate Matter). With respect to the 24-hour standard, the District’s 2007 AQMP indicates 

that area monitors show that the air quality is better than the federal 24-hour PM10 standard 

requires. The District is continuing to require offsets for new source PM10 emissions because 

EPA has not re-designated that area to attainment.

Comment 6: CCAT states that there is no evidence in the record that Sentinel is replacement 

capacity for pre-2007 base-year offsets from shutdown power plants. CCAT also states that even 

if Sentinel was replacement capacity for all of the power plant offsets in the tracking system, 

Sentinel would need an additional 60,000 pounds.

Response 6: EPA agrees with CCAT’s first statement that Sentinel is not being evaluated as 

replacement capacity. EPA continues to respond that there is no requirement to demonstrate that 

Sentinel is replacement capacity because all of the offsets in the AB 1318 Tracking System are 

the result of facilities or sources that shutdown after the 1997 base-year. EPA neither agrees nor 

disagrees with CCAT’s second statement contending the AB 1318 Tracking System should 

include an additional 60,000 pounds of PM10 offsets. We find the statement irrelevant because 

Sentinel purchased adequate offsets from the District to offset its maximum expected emissions. 

The District calculated that Sentinel would need 118,120 pounds of PM10 and 13,928 pounds of 

SOx. Sentinel purchased and the District transferred at least 124,491 pounds of PM10 and 25,175

pounds of SOx that EPA has determined meet all of the federal creditability requirements based 

on the most conservative approach for quantification. See Revised Attachment A to EPA’s 

Technical Support Document for the Supplemental proposal. In addition, the District has 

committed to retire all of the remaining offsets it transferred into the AB 1318 Tracking System

for the benefit of the environment.

• CCAT Heading II.A. “The 2007 AQMP Applies to PM10 as well as PM2.5, and was an 

Approved Attainment Demonstration at all times Relevant to this Rulemaking”

Comment 1: CCAT’s comment letter concludes that the base-year should be determined by the 

SCAQMD’s 2007 AQMP because the 2007 AQMP applies to PM10 as well as PM2.5. CCAT 

draws this conclusion from a statement by the District that the there are “linkages” in the 2007 

AQMP to PM10 in the 2003 AQMP. CCAT’s comment letter quotes from Appendix V of the 

2007 AQMP, but cites only to Appendix V (which is hundreds of pages) without providing a 

specific page number.

Response 1: EPA disagrees with CCAT’s conclusion that the 2007 AQMP is applicable for 

purposes of establishing the PM10 base-year for 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). EPA’s 

regulations require that an area have an approved attainment demonstration in order to use 

offsets from pre-base-year shutdowns to allow new growth in the area. The 2007 AQMP was 

submitted and is approved under federal law only for purposes of attaining the NAAQS for PM2.5

and 8-hour ozone. The SCAQMD letter submitting the 2007 AQMP to CARB states: “The 2007 

AMQP, as approved, is submitted as a single integrated plan for PM2.5 and 8-hour ozone 

attainment.” Letter from Barry Wallerstein, PH.D. to Catherine Witherspoon dated June 6, 2007.

The Board Approval to adopt and submit the 2007 AQMP to EPA is also clear that the AQMP is 

only being submitted to EPA for demonstrating attainment of the federal PM2.5 (and 8-hour 

ozone) NAAQS. The approval document states: “Specifically, the 2007 AQMP revision is

designed to satisfy: SIP submittal requirements of the federal CAA to demonstrate attainment of 

the new 8-hour ozone and PM2.5 ambient air quality standards, the California CAA triennial 
13

update requirements, and fulfill the District’s obligation to update transportation emission 

budgets based on the latest approved motor vehicle emissions model and planning assumptions.

Unclassifiable regions for PM2.5, such as the Coachella Valley Planning Area do not require a 

planning demonstration for the federal standard and are not addressed in this document.” Board 

Meeting Date: June 1, 2007, Agenda No. 37 at 2.

The 2003 AQMP is the only approved attainment demonstration for PM10 for the South Coast 

and Coachella Valley Air Basins. Even though the 2007 AQMP includes some references to and 

provisions regarding PM10, it is not the appropriate AQMP for demonstrating attainment with the 

PM10 NAAQS. CCAT itself acknowledges that EPA’s Federal Register Notice approving the 

2007 PM2.5 AQMP only approved it for purposes of meeting requirements for attaining the PM2.5

NAAQS. See 76 FR 69928 (Nov. 9, 2011). In contrast, EPA’s approval of the 2003 AQMP 

states: “We are approving the 2003 plan amendments to the 2002 SIPs for the South Coast and 

Coachella Valley serious nonattainment areas, as the amendments pertain to CAA provisions 

applicable to attainment SIPs for the 24-hour and annual PM10 NAAQS.” 70 FR at 69083. 8

EPA is aware that there is some information concerning PM10 in the 2007 PM2.5 AQMP. The 

SCAQMD Board Approval indicates that the AQMP includes information to comply with 

California Clean Air Act triennial update requirements. See CH&SC 40925. The District’s 

AQMPs typically address multiple pollutants because there may be co-benefits. Further, as 

discussed in more detail below, the AQMP indicates the SCAQMD was trying to ensure that the 

area would continue to monitor PM10 levels below the federal PM10 24-hr average NAAQS to 

allow for maintenance and re-designation. But including this information does not convert an 

AQMP that is regulating a separate pollutant – PM2.5 – into an attainment demonstration for 

PM10.

EPA notes that CBE submitted comments on the 2007 AQMP, and the comments seem to 

indicate that CBE only viewed the 2007 AQMP to be relevant to attaining the PM2.5 standard.

See Comment Letter from Coalition for Clean Air, Communities for a Better Environment, 

Endangered Habitats League, Environmental Defense, Environment Now and Natural Resources 

Defense Council dated December 1, 2006.

With respect to the quotation from Appendix V concerning “linkages” between the 2007 PM2.5

AQMP and the 2003 PM10 AQMP, EPA notes that it is incumbent on the commenter to structure 

their participation in the rulemaking process in a way that is meaningful. See, e.g., Vermont 

Yankee v. EPA, 435 U.S. at 553-554. EPA has attempted to respond to this comment despite the 

vagueness and lack of citation for the quote to a specific page in Appendix V.

Comment 2: CCAT points out that the 2007 AQMP in Appendix V models PM10.

Response 2: Chapter 3 of Appendix V in the SCAQMD’s 2007 AQMP is entitled “Federal 24-

hour PM10 Attainment Plan and Visibility Assessment.” The title is misleading. The text of 

Chapter 3 makes it clear that SCAQMD was not supplanting or superceding the 2003 AQMP or 

its attainment demonstration for PM10. In 2006, EPA revoked the annual NAAQS for PM10

 8

 EPA’s approval also states: “The South Coast AQMP is the first South Coast Plan to address PM2.5. We have 

previously acted on numerous South Coast air quality plans for ozone, PM10, carbon monoxide, and NO2, such as the 

1997/1999 AQMP.” This language shows that EPA considered the previous 2003 AQMP to be the approved plan 

for PM10. 
14

because available data did not demonstrate a link between long term exposure to course 

particulate matter (PM10) and health problems. (Fact Sheet Final Revisions to the National 

Ambient Air Quality Standards for Particle Pollution (Particulate Matter)). EPA retained the 24-

hour NAAQS for PM10 of 150 micrograms per cubic meter to protect public health from short 

term exposure to course particulate matter.

Monitoring data that the District cites in Appendix V of the 2007 PM2.5 AQMP shows that the 

South Coast is not recording emissions levels in excess of the federal 24-hour PM10 standard of 

150 micrograms per cubic meter. 2007 AQMP at V-3-2. According to the SCAQMD, the area is 

modeled to exceed the State standard by 122 percent in 2015. Id. The 2007 AQMP indicates that 

the area was meeting the federal 24-hour standard, stating: “The Basin currently meets the 24-

hour average federal standard. (The only days that exceed the standard are associated with high 

winds natural events of exceptional events due to wildfires.)” Appendix V at V-3-1. The 2007 

AQMP notes that the highest concentrations of PM10 generally occur at the Riverside Rubidoux 

monitor but “[t]he 2005 design value at Rubidoux is 86% of the federal standard. The standard 

attainment demonstration is conducted to assure that the Basin will continue to be in compliance 

in future years.” Id. In regard to the annual PM10 standard, the 2007 AQMP states: “The Final 

AQMP does not provide an updated regional attainment demonstration to show compliance with 

the revoked annual PM10 standard.” Id. Appendix V’s discussion indicates that the SCAQMD 

will continue to reduce PM10 emissions to be lower than the revoked annual standard. Id. at V-3-

2. The 2007 AQMP then states: “As part of the 2003 AQMP, the District proposed a 

comprehensive program to examine the local emissions profile and potential for mitigation 

actions that could be taken to bring PM10 concentrations at Rubidoux within the annual 

standard.” Id. at V-3-2. The District included in the 2007 AQMP one control measure and a 

commitment to greater compliance efforts for two measures in the 2003 AQMP to maintain 

lower concentrations of PM10 at that one monitor. 9 These measures are discussed below.

EPA does not interpret the SCAQMD’s inclusion of this additional information on PM10 in the 

2007 AQMP to make it a replacement for or revision of the 2003 PM10 attainment demonstration 

and EPA never approved it as such. EPA considers the 2003 AQMP to be the only approved 

attainment demonstration for PM10. The 2007 AQMP is the approved attainment demonstration 

for PM2.5. 

Comment 3: CCAT states that Chapter 4 of the 2007 AQMP includes PM10 in its Control 

Strategies.

Response 3: CCAT’s observation that PM10 is included in Chapter 4 of the 2007 AQMP does 

not support its conclusion that the 2007 AQMP establishes the base-year for 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii). The introductory text for Chapter 4 of the 2003 AQMP compared to 

the same text for Chapter 4 of the 2007 AQMP leads to the opposite conclusion. The text makes 

it clear that the 2003 AQMP was submitted – and approved by EPA – to demonstrate attainment 

with the federal PM10 standards (before the annual PM10 standard was revoked in 2006) while 

 9

 The 2007 AQMP states that SCAQMD will be requesting re-designation to attainment for PM10 from EPA, and 

states: “Regardless, the Final 2007 AQMP will provide an updated attainment demonstration for 24-hour PM10 to 

serve as the basis for a future maintenance plan.” Providing updated information to serve as the basis for a future 

maintenance plan is different from submitting an attainment demonstration for approval of showing attainment.
15

the 2007 AQMP was submitted and approved to demonstrate attainment with the federal PM2.5

standard.

Chapter 4 includes 2 control measures, BCM-02 and MCS-04,10 which regulate PM10 emissions.

The SCAQMD’s inclusion of two control measures regulating PM10 in what is otherwise a 

complete AQMP, including an attainment demonstration, for PM2.5 is incidental or intended to 

comply with California Clean Air Act requirements. EPA does not interpret including this 

limited information to make the 2007 AQMP an approved attainment demonstration for PM10.

EPA continues to find that the 2003 AQMP is the most recent approved attainment 

demonstration for PM10.

Comment 4: CCAT states that Appendix III emission inventories treat PM2.5 and PM10

identically. CCAT points out that the 2007 AQMP states “PM10 in the NSR program is treated 

the same as PM2.5.”

Response 4: EPA does not agree or disagree with CCAT’s first statement that the SCAQMD in 

its Appendix III emissions inventories treats PM10 and PM2.5 emissions identically. CCAT has 

not provided sufficient information in this comment for EPA to understand its position on this 

matter. We do not consider the statement to be dispositive or persuasive regarding whether the 

2003 AQMP is the appropriate attainment demonstration for purposes of establishing the baseyear for 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). As to CCAT’s second statement, EPA does not 

consider this District’s statement regarding its NSR program to somehow make the 2007 

attainment demonstration for PM2.5 into the approved attainment demonstration for PM10. EPA 

continues to interpret the 2003 AQMP as the approved attainment demonstration for PM10. EPA 

notes that the District submitted a comment letter indicating its understanding that PM10 and 

PM2.5 are different pollutants which are treated separately under its own new source review rules 

through Rule 1315 (which has been approved by EPA) and Rule 1325 (which has not yet been 

approved by EPA). Again, CCAT has not provided enough information for EPA to understand 

how this statement in the 2007 PM2.5 AQMP transforms it into an approved attainment 

demonstration for PM10 through the statement quoted above concerning NSR.

Comment 5: The 2007 AQMP updates the emissions baseline from the 2003 AQMP.

Response 5: EPA disagrees with this statement. CCAT has also failed to provide sufficient 

explanation regarding this statement for EPA to understand what it means. The 2003 AQMP 

remains the approved attainment demonstration for PM10, and consequently establishes 1997 as 

the appropriate base-year for 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). The 2007 AQMP establishes the 

base-year for PM2.5.

 10 EPA notes that CCATs’ comment states only “[the 2007 AQMP] includes PM10 in its Control Strategies (Chapter 

4)” without identifying specific measures. The majority of the control strategies apply only to PM2.5 emissions. The 

Supreme Court has stated that “administrative proceedings should not be a game or a forum to engage in unjustified 

obstructionism by making cryptic and obscure references to matters that ‘ought to be’ considered and then after 

failing to do more to bring the matter to the agency’s attention, seeking to have that agency determination vacated 

on the ground the agency failed to consider matters ‘forcefully presented.’” Vermont Yankee v. EPA, 435 U.S. at 

553-54. CCAT’s cursory references to portions of the 2007 AQMP do not provide sufficient information to later 

argue these matters were adequately presented.
16

Comment 6: CCAT states: “A conclusion by EPA that the 2007 AQMP omits PM10, or that the 

2003 AQMP is the sole or most recent PM10 SIP would be arbitrary and capricious, and simply 

wrong.”

Response 6: EPA has not concluded that “the 2007 AQMP omits PM10”. However, the 

relatively incidental inclusion of PM10 measures and additional information in the 2007 AQMP 

does not make the 2007 AQMP into an approved attainment demonstration for PM10. The 

SCAQMD’s inclusion of limited PM10 information in the 2007 PM2.5 AQMP does not alter the 

fact that the 2003 AQMP is the approved PM10 plan and attainment demonstration. Therefore, 

the 2003 PM10 AQMP establishes the base-year for purposes of 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii). EPA is reasonably concluding that the 2003 AQMP is the appropriate 

PM10 attainment demonstration for establishing the base-year. The base-year in the 2003 AQMP 

is 1997.

In today’s rule EPA is finalizing our reasoning in the supplemental proposal to find that the 2003

PM10 AQMP is the appropriate implementation plan and attainment demonstration for PM10.

EPA disagrees with CCAT’s argument that including limited information concerning PM10 in a 

subsequent implementation plan for a separate pollutant makes that plan the “most recent SIP”.

The plain meaning of the word “approved” in the context of implementation plans signifies that 

EPA considered whether the plan was sufficient for its proposed purposes and found it to be 

satisfactory. The 2003 PM10 AQMP was proposed to demonstration attainment with PM10 and it 

was approved by EPA as such. The 2007 PM2.5 AQMP did not propose to demonstrate 

attainment for PM10 and was not approved as such. The 2007 PM2.5 AQMP cannot be an EPA 

approved attainment demonstration for PM10 when EPA did not approve it as such. Moreover, 

EPA believes that it would make air quality planning unworkable to interpret SIPs for separate 

pollutants to overlap in the manner suggested by CCAT. We note that the 2007 AQMP also 

includes some information about CO and SOx. This does not mean that it is the most recent CO 

or SOx attainment demonstration. Neither the public nor the regulated industry would know what 

rules control under such an interpretation. EPA interprets the 2003 PM10 AQMP to be the 

appropriate, approved AQMP for PM10, meeting the requirements of CAA Sections 110, 172, 

188 and 189, and establishing a base-year of 1997 for PM10 for purposes of 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii).

Comment 7: CCAT states that more than 50% of the offsets in the AB 1318 Tracking System

pre-date the 2007 AQMP base-year of 2002.

Response 7: EPA disagrees. Because EPA is finding in this final rule that the 2003 AQMP is 

the appropriate attainment demonstration, the base-year is 1997. However, EPA continues to 

agree with SCAQMD that the 2007 AQMP has explicitly added offsets as growth to the 2007

AQMP so that if the AB1318 Tracking System had transferred offsets for PM2.5 emissions, prebase year offsets might be available.

Comment 8. CCAT claims that the 2007 AQMP was final “at all relevant times” and that the 

date that the District transferred the offsets does not matter.

Response 8: EPA does not consider this comment relevant to our final action because we are 

finalizing our approval of this source-specific SIP revision based on determining that the 2003 
17

AQMP is appropriate for establishing the base-year for PM10 offsets. EPA approved the 2003 

AQMP in 2005, in advance of the transfer of PM10 offsets into the AB 1318 Tracking System. 

Comment 9: CCAT states in footnote 11 that SCAQMD still has not complied with all AB1318 

requirements. CCAT also states that SCAQMD made more submissions to EPA after the 

transfer. Finally, CCAT contends that if state law mattered, the relevant date would be when the 

2007 AQMP became state law (June 1, 2007 – before transferring the offsets).

Response 9: CCAT’s footnote 11 is confusing and does not demonstrate or explain how any of 

the purported facts are relevant to EPA’s Supplemental or January 2011 proposed approval of the 

AB 1318 Tracking System. For example, CCAT states: “Further, were state law actions the basis 

for evaluating applicable law, the question would be when the 2007 AQMP because state law.” 

Comment Letter at pg 3, N. 11. CCAT does not explain how the District is not complying with 

AB 1318 or how that fact would be relevant to EPA’s approval. To the extent this footnote is 

relevant to the timing of EPA SIP approval and the approval of the 2007 AQMP, it may be 

irrelevant because the appropriate AQMP for establishing the base-year for 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii) is the District’s 2003 AQMP for PM10. EPA acknowledges that 

SCAQMD made more information available to EPA, and that information is in EPA’s docket for 

our Supplemental proposal. The addition of this information has not harmed or impaired the 

public’s right to comment. EPA does not understand CCAT’s last statement. EPA interprets its 

regulations to establish the base-year according to the most recent approved attainment 

demonstration for the particular pollutant being offset.

• CCAT Heading II.B. “EPA Cannot Rely on the Failed, Superseded 2003 AQMP for a 

Base Year”

EPA’s responses to the arguments in this portion of the comment letter are contained above.

• CCAT Heading III. “The Offsets Transferred into the 1318 Tracking System are Not 

Quantifiable”

CCAT argues that EPA cannot approve the AB 1318 Tracking System because the offsets have 

not been properly quantified. CCAT makes several assertions concerning the purported improper 

quantification.

Comment 1: EPA finds the first paragraph of this portion of the comment letter confusing. EPA 

believes CCAT is contending that quantification of offsets must be strictly based on precisely 

two years of data under the CAA. This means that CCAT does not agree EPA has discretion to 

allow an alternative to having precisely two years of complete actual data. EPA is interpreting 

CCAT to argue that under the Clean Air Act if any source shuts down with only one year of 

available data then no offsets can be issued and used. CCAT states: “Further Appendix S does 

not apply here, but even if it did, it clearly calls for calculations based upon ‘actual annual 

operating hours for the previous [period]’. The EPA has not analyzed the ‘actual annual 

operating hours’ for any of the facilities included in these dockets nor can it since there is no 

such data in this docket.” Comment Letter at pg 6.

Response 1: EPA does not agree with CCAT’s interpretation of how we quantify offsets for 40 

CFR Part 51, Appendix S and 40 CFR 51.165(a)(3)(ii)(C)(1)(i). EPA also does not agree that we 
18

are required to determine whether Appendix S allows the use of a single year of data. Neither the 

CAA nor its implementing regulations requires the use of two years of data to quantify offsets. 

As EPA discussed in its Brief filed in California Communities Against Toxics v. EPA, 688 F.3d 

989 (9th Cir. 2012), CCAT’s reference to the definition of “actual emissions” in 40 CFR 

51.165(a)(1)(xii) is not determinative for quantifying offsets. See Answering Brief at 30-31.

It is also worth noting that the District is generally quantifying offsets that are resulting from 

“orphan” shutdowns in this source-specific SIP revision. An orphan shutdown occurs when a 

facility or source of emissions quits operating (and thus emitting) and ceases to pay its emissions 

fees to the SCAQMD. The SCAQMD becomes aware the facility or source has quit emitting 

when it fails to file its Annual Emission Report (AER). AERs contain the estimated emissions 

going into the air for the 12-month period between July and June of each year. When a facility or 

source does not file its AER, the District provides a few months to come into compliance or 

submit an application for Emission Reduction Credits that can be traded on the open market. The 

data on which the District relies to quantify the offsets is the last two years of AERs, however in 

some limited instances the AERs were missing data for some period of the year or an entire year.

Because the facility or source has shutdown, the District cannot obtain additional emissions 

information. We are finalizing our proposal to find that the SCAQMD’s method of quantifying 

offsets where one year or part of a year of data is missing is permissible because the SCAQMD 

has used a conservative approach by assuming there were zero emissions when data was missing; 

this makes the quantification conservative (i.e., results in a lower amount of offsets).

Offsets are generally required during the new source review permitting process in a 

nonattainment area rather than through a source-specific SIP revision. Therefore, EPA can 

reasonably look to the new source review permitting process for guidance on this question.

During the permitting process, the permitting authority is frequently called upon to exercise 

discretion to balance the need to promote new source growth and protect air quality. In 1979, 

EPA promulgated Appendix S to guide permit issuance where there was no approved new source 

review SIP for a nonattainment area. EPA can reasonably look to CAA Section 173, 40 CFR Part 

51, Appendix S, along with 40 CFR 51.165 to provide the agency’s views on offsets.

EPA considers it within the permitting authority’s discretion to require more offsets than are 

necessary to offset a new source’s emissions. If it is within a permitting authority’s discretion, 

we interpret this discretion to extend to allowing the SCAQMD to transfer more offsets into the 

source-specific SIP revision for the AB 1318 Tracking System.

It is also reasonable for SCAQMD to use (and EPA to approve use of) a conservative approach 

when data for one year – or part of one year – is missing, provided the conservative approach 

results in at least as many offsets being provided as are needed. The SCAQMD’s method of 

applying a zero emissions assumption to missing data meets that requirement for this sourcespecific SIP revision.

Notably, the largest group of facilities providing offsets in the AB 1318 Tracking System had 2 

years of data. In Section I.A. of Attachment A to the Technical Support Document for the 

Supplemental proposal, for PM10 there are 59,208 pounds of offsets with 2 years of data. Section 

I.B. lists 57,384 pounds of offsets also with 2 years of data. The total amount of offsets with 2 

years of data is 116,592 pounds, or 98.7% of the total PM10 offsets needed by Sentinel.
19

Section II.A. of Attachment A lists offsets that are missing Year 1 data. These offsets total 7,593 

pounds of PM10. Adding these to I.A and I.B. brings the total to 124,185 pounds of PM10 offsets 

– approximately 6,000 pounds more than is needed for Sentinel. When Year 1 data was missing, 

SCAQMD assumed that the emissions from the missing year were zero and then averaged the 

Year 2 data, which had the effect of reducing the reported emissions by half. For example, AES 

Highgrove LLC had 344 pounds of PM10 emissions in Year 2. Because the data for Year 1 was 

missing, SCAQMD treated Year 1 emissions as zero and calculated the offsets as 172 pounds for 

PM10.

EPA reasonably approved the SCAQMD’s exercise of discretion to assume that using zero 

emissions is a conservative approach for the missing Year 1 data. There is no way that a facility 

can emit less than zero pounds of PM10. Therefore, including zero pounds of PM10 as the Year 1 

data and averaging it with the Year 2 data can only result in the offsets providing “an equal or 

greater reduction” than is required. The District appropriately used a conservative method of 

using 2 years of actual emissions data to quantify the offsets.

CCAT’s comment that EPA must review “actual annual operating hours” to quantify offsets is 

based on a very selective quotation of the complete provision. The full relevant text of the 

provision in Appendix S termed “Baseline for determining credit for emission and air quality 

offsets” states: “Emission offsets generally should be made on a pounds per hour basis when all 

facilities involved in the emission offset calculations are operating at their maximum expected or 

allowed production rate. The reviewing agency should specify other averaging periods (e.g. tons 

per year) in addition to the pounds per hour basis if necessary to carry out the intent of this 

Ruling. When offsets are calculated on a tons per year basis, the baseline emissions for existing 

sources providing the offsets should be calculated using the actual annual operating hours for the 

previous one or two year period (or other appropriate period if warranted by cyclical business 

conditions).” Appendix S at IV.C. The language in Appendix S supports EPA’s interpretation 

that the permitting authority has discretion in quantifying emissions and can use a conservative 

approach for missing data.

As noted above, SCAQMD relies on its AERs to quantify offsets. The AERs report emissions in 

pounds per year, which for PM10 are generally calculated by multiplying throughput information 

by a specified emission factor. Multiplying throughput by an emission factor will calculate the 

emissions in either tons per year or pounds per day, and the District has chosen to express the 

amount in pounds per day. This unit is consistent with other provisions in SCAQMD’s 

permitting rules and Appendix S. 

Although CCAT makes numerous assertions about the SCAQMD’s AERs, CCAT has not 

provided any information suggesting that the AERs are inaccurate or result in fewer offsets than 

are required. Therefore, SCAQMD properly relied on the AERs, and also used the most 

conservative approach (zero emissions) when Year 1 data was missing. EPA reasonably 

approved the SCAQMD quantification of these offsets.

Comment 2: CCAT also challenges EPA’s explanation for approving SCAQMD’s 

quantification methodology for the facilities in Section II.B of Attachment A (i.e. missing Year 2 

data).
20

Response 2: EPA is finalizing our approval of the very limited number of offsets in Section II.B 

of Attachment A to the TSD, which is only 612 pounds of PM10 offsets, on the same rationale 

that we applied above to the facilities missing Year 1 data. That means that were are finalizing 

our approval of the rule by filling in the missing Year 2 data with a zero. We are averaging the 

emissions from Year 1 with zero emissions for Year 2, resulting in half of the emissions from 

Year 1. As discussed above, this method is a reasonable way for SCAQMD and EPA to comply 

with quantifying the offset amount based on two years of data. Because the missing year of data 

could never be less than zero, this method of quantification will always result in providing equal 

or greater offsets than the amount needed to allow the new source emissions growth from 

Sentinel.

Based on the altered quantification for the offsets listed in Section II.B (i.e. missing the Year 2 

data) the total balance of offsets in the Revised Attachment A from the subset of facilities and 

sources listed in the AB 1318 Tracking System is lowered by 306 pounds of PM10. This brings

the sum of offsets in Revised Attachment A that EPA is approving as meeting all federal 

integrity criteria to 124,491 pounds of PM10 offsets rather than the 124,797 pounds proposed.

The amount of offsets needed to offset the new PM10 emissions being added by the Sentinel 

Energy Project is 118,120 pounds per year, showing that there is still an excess of 6,371 pounds.

For SOx emissions, this adjustment lowers the total quantity EPA proposed to approve by 2 

pounds. This means that the District is retiring almost twice as many SOx offsets as are needed 

for Sentinel. 

In summary, the conservative quantification method that we are approving is a reasonable 

approach for missing data. The SCAQMD’s method of quantifying the amount of offsets when 

data was missing, and our approval of that method, used zero emissions. This method results in a 

conservative quantification. The source could not have emitted less than zero and the 

quantification will result in equal or greater offsets.

Comment 3: CCAT contends that EPA must explain why any facility failed to provide two 

years of data.

Response 3: EPA disagrees with this comment. If we quantify the missing year of data as zero, 

the reason that data is missing is immaterial to quantifying the offsets. CCAT has not explained 

how knowing the reason would matter.

Comment 4: CCAT states that 33 facilities listed as PM10 offset facilities reported emissions in 

Years 1 & 2 that vary by more than 50%. Specifically, CCAT observed that Mountainview 

Generation Station’s utility boilers reported emissions changed by 1,192% and 1,634%; AAA 

Glass Corps furnaces reported emissions changed by 633%; and RRI Energy Etiwanda’s utility 

boilers reported emissions changed by 221%, 356% and 347%. CCAT then asserts that “It is not 

possible to assert reasonably that when there is such a large difference between the two years, tan 

[sic] average of the two years—absent any other information—represents a true picture of these 

facilities emissions over time.” Comment Letter at pg 7. Based on this, CCAT calls upon “EPA 

to explain how emissions can vary so dramatically from one year to the next” and to review more 

data “to ensure that the 2 year average truly is a fair representation of actual emissions from 

these facilities and [not] why another period of accounting is not ‘warranted by cyclical business 

conditions.’” Comment Letter at pg. 7.
21

Response 4: EPA agrees with CCAT’s observation that some of the shutdown sources evaluated 

had significant differences in their reported year-to-year annual emissions. A change in emission 

rates often occurs prior to a facility shutting down because the facility may taper off production 

prior to shutting down. If this happens before the end of the AER annual reporting period (i.e. 

June 30th), the emissions during that last year of operation (i.e. Year 1 data) will be less because 

the source did not operate all 12 months of the reporting period. EPA’s acid rain monitoring data 

shows fuel usage by quarter. For the Mountainview facility, the data shows that the units burned 

significantly less fuel during the 01/02 reporting period compared to the 00/01 reporting period 

(Unit 1 shows 83,843 to 1,100,099 cubic feet). In this case, we can view fuel usage data by 

calendar quarter, and can see that no fuel was burned during the first and second quarter of 2002. 

A shutdown of the emission units during the reporting period is the most common cause of 

significant changes in emission rates from one year to another. In calculating the average annual 

emissions for these shutdown facilities, the District used the most recent reporting period for 

which emission data was available, even if that period did not represent a complete 12 month 

period (i.e., for some months zero emissions were reported). CCAT does not explain why a 

variation in emissions between the two years is significant or materially affects the accuracy of 

the quantifications.

Comment 5: CCAT asks how it is possible for a source with two boilers (CBS) to have the exact 

amount of emission reductions from both units for two years in a row.

Response 5: In this case, the AER reflects fuel usage rates and emissions for two boilers at the 

facility. Since both boilers were shutdown at the same time, it is not necessary to determine the 

exact amount of emissions attributable to each individual boiler. The emissions from the boilers 

are directly proportional to fuel usage. Therefore, the important value is the total fuel usage, not 

how much one or the other used. Based on this fact, the fuel usage (and consequently the amount 

of offsets) from both boilers were allocated equally between each boiler. The offsets from 

shutting down both boilers at CBS, Inc. are accurately quantified. 

Comment 6: CCAT identifies several issues related to the quantification of the offsets for KMC 

Wheel Company. CCAT asserts that “the CAA requires two years of documentation” and EPA 

has provided no explanation for why two years of documentation does not exist. CCAT views 

the absence of two years of emissions data even more problematic when EPA asserts that at a 

single given facility some equipment has multiple years of data, but other pieces of equipment do 

not. This comment continues by detailing the emission data for the two Aluminum Furnace 

Reverb units (App. Nos. 400235 & 400236) as presented in Attachment A of the TSD. They note 

that unit #400236 only obtained its permit on June 14, 2002, which means it could have only 

operated for a few weeks in Year 2 (the 01/02 reporting period), but that EPA verified 3,644 

pounds of PM10 offsets for this period and 4,597 pounds for Year 1 (the 02/03 reporting period). 

CCAT asks what the operations profile is for this equipment that would allow for such emission 

levels. 

Response 6: Based on CCATs comments and concerns, EPA reviewed the documentation for 

KMC Wheel Co. and requested SCAQMD to provide additional documentation which we are 

adding to our record in response to this comment. The additional documents demonstrate that 

while App. Nos. 400235 & 400236 were the most recent application numbers for the units that 

were shutdown, these application numbers were issued for modifications to existing units and not 

for new equipment with no operating history. (Both modifications were to replace the existing 
22

furnace burners.) These two furnaces were first permitted on July 10, 1995, as App. Nos. 302346 

and 302347. (See Facility Equipment List Report included in existing support documentation.) 

Thus while the furnaces identified as App. Nos. 400236 and 400235 only received modified 

permits on June 14, 2002 and October 11, 2002, respectively, the furnaces had been operating 

during the 01/02 reporting period as App. Nos. 302346 and 302347 respectively. The furnaces, 

therefore, had operated during the year prior to the modification. In EPA’s experience, a 

modification to replace a burner could occur in a reasonably short period of time and would not 

require the unit to be out of service for an extended time. For KMC Wheel, the District had two 

years of operating data prior to shutdown for App No. 400236, but only one year was available 

for App. No. 400235. Therefore the District conservatively assumed the emissions for Year 1

were zero when calculating a two year average for App. No. 400235.

In regards to the use of different two year reporting periods for each furnace, EPA notes that 

KMC Wheel Co informed the District in a letter dated October 23, 2003 that Permits for App.

Nos. 400236 (Aluminum reverb furnace) and 302844 (heat treating furnace) were no longer in 

service. Thus, the last two years of operation for these units were 02/03 (Year 1) and 01/02 (Year 

2). The last two years of operation for the other three units (App. Nos. 400235, 302846 and 

348664) were 03/04 (Year 1) and 02/03 (Year 2). KMC Wheel Co did not submit an AER for the 

03/04 reporting period, however, and the District conservatively assumed the emissions for this 

period for these three units were zero when calculating a two year average for these units. CCAT 

does not explain why it is problematic for the company to shut equipment down over a two-year 

period rather than simultaneously. In EPA’s experience, shutting down equipment over time is 

not unusual or suspicious.

If the District had used the AER data for reporting years 02/03 and 01/02 for all five units of

shutdown equipment which was permitted and operating during 01/02, (rather than assuming 

zero emissions for partial operation during reporting period 03/04), the net result of this change 

would be an increase in PM10 offsets of 7,006 pounds/yr. (See EPA spreadsheet entitled “KMC 

Wheel – Offset Calculations” added to docket.) Instead, as noted above, the District used a 

conservative estimation method by assuming emissions for the reporting year 03/04 were zero 

for the equipment that still had a valid permit to operate. 

Comment 7: CCAT states that the other Aluminum reverb furnace operated by KMC Wheel 

(App. No. 400235) may have only operated for 9 months during the 03/04 reporting period, but 

that this fact is uncertain since the facility was not inspected until 2009. CCAT then states that 

“EPA purports to have ‘verified’ 7,719 pounds of PM from FRA #400235 for that period—

meaning for that year, the total PM emissions for these two pieces of equipment would have 

been 12,316 pounds of PM, while emitting only 34 pounds of SOx (and FRA #400235 emitted 

the same amount of SOx regardless of whether its PM emissions were 4,597 pounds one year and 

3,644 pounds).” Finally CCAT asks “What is the operations profile that allows the EPA’s 

emissions assertions to conform with the data provided in the docket?” Comment Letter at pg 8.

Response 7: EPA finds this comment confusing. EPA notes that Appendix A—Section II.A 

shows that no PM10 emissions were reported for the 03/04 reporting period for KMC Wheel, 

contrary to CCAT’s statement in their comment. Therefore how many months the furnace 

operated during this period is irrelevant. We note that the 7,719 pounds of PM referenced in the 

comment were actually the amount of PM10 reported for FY 02/03 for the process and natural gas 

emissions combined. 
23

CCAT’s comment suggests that assuming zero emissions for a period with no emission records 

does not “represent[] a true picture of these facilities’ emissions over time.”11 To the extent that 

KMC Wheel actually emitted PM10 or SOx during a reporting period, for which no reductions are 

counted, CCAT is correct that this is not a true picture—instead it is a conservative picture. 

When zero emissions are counted for equipment that operated at least a portion of a reporting 

period, then fewer emissions are included in the balance of available offsets. It is essentially an 

underestimation of the actual emission reductions that have occurred. If additional operating data 

had been available and used to determine actual average emissions over two years, the amount of 

offsets transferred into the AB 1318 Tracking System would be greater than the amount that the 

District transferred because there would be fewer periods of zero emissions reported.12

CCAT makes many statements suggesting the quantity of offsets credited is not representative of 

the actual emissions from these facilities. Because many of these facilities were shutting down, 

the last year of operation is often not representative of normal operations, but instead represents a 

conservative quantification of the actual emissions emitted by the source prior to shutdown.

CCAT does not explain how EPA’s approval of SCAQMD’s conservative approach harms 

CCAT or the environment. EPA has determined that it is reasonable to approve SCAQMD’s 

conservative quantification of the offsets because it will ensure greater environmental protection. 

In addition, the District has committed to retiring for the benefit of the environment any 

remaining offsets in the AB 1318 Tracking System in excess of those needed to offset the new 

emissions (i.e. 118,120 pounds of PM10 and 13,928 pounds of SOx) from the operation of 

Sentinel.

CCAT’s comment adds the 02/03 PM10 emissions from both aluminum furnaces (i.e. 7,719 

pounds for App. No. 400235 and 4,597 for App. No. 400236) for a total of 12,316 pounds of 

PM10 offsets.13 During 02/03 the SOx offsets from the two furnaces totaled 34 pounds. There is 

nothing unusual or suspicious about this result. The supporting documentation in the record 

 11 Although CCAT’s comment quotes “warranted by cyclical business conditions”, it does not provide a citation 

and EPA cannot ascertain the context for this comment. CCAT also fails to provide any support for its apparent 

contention that the legal standard for offsets is that they represent “a fair representation” of the way the business 

operated.. CAA Section 173, 40 CFR Part 51, Appendix S and 40 CFR 51.165(a)(3)(ii)(C)(1)(i) requires offsets to 

be “surplus, permanent, quantifiable and federally enforceable.” Id. 12 The District may have used a “more representative” approach earlier in this process that resulted in quantification 

of a greater quantity of offsets for more representative periods. SCAQMD filed a brief in the challenge to the offsets 

from CCAT at the California Energy Commission in 2010. In that brief, SCAQMD states: “The District initially 

filed with the Commission a list of offsets to be provided under AB 1318 on March 2, 2010. Appendix N to the 

Addendum, Tables A & B. On May 12, 2010, it filed a revised list that replaced the initial list. The primary 

difference between Tables A and B in the March 2nd version and the May 12th revised Addendum is that the revised 

list makes more conservative assumptions about the offsets associated with emissions reduction from equipment 

which have ceased operation. In particular, in the May 12th Revised Addendum the District used the average from 

the last two years of operation of the equipment rather than the highest two out of the last five years of operation 

which was used in the March 2nd Addendum, to calculate offsets. Because this more conservative assumption used 

in the May 12th Revised Addendum resulted in a smaller amount of emission offsets from the shutdown sources, it 

was necessary to include additional offsets in the AB 1318 Tracking System to ensure there would be adequate 

offsets available to meet Sentinel’s offset needs.” SCAQMD Brief filed in CEC proceedings, dated June 31, 2010.

13 EPA does not understand why CCAT concludes this discussion by stating that the 2 furnaces “emitted that same 

amount of SOx regardless of whether its PM emissions were 4,597 pounds in one year and 3,644 pounds).” The first 

part of the sentence refers to having the same amount of SOx offsets when comparing the same-year emissions from 

the two different furnaces while the second part of the sentence refers to two different years of emissions from one 

furnace.
24

shows that the total amount of natural gas used for all five of the emission units at KMC Wheel 

for reporting periods 02/03 and 01/02 was 60.35 and 59.83 mmcf respectively, and the amount of 

material processed was 2,794 and 4,983 tons for the same periods. (See AER’s for reporting 

periods 02/03 and 01/02) The SOx emissions for this facility were due to the amount of natural 

gas combusted and not the amount of material processed in the aluminum furnaces. Typically a 

reverberatory furnace operates on a continuous basis at some minimum temperature to keep the 

aluminum in the charging well in a molten state. Since the furnace burners are operated at all 

times, there is not a direct correlation between fuel usage and the amount of material processed. 

This explains why there may be significant differences in the amount of PM10 reported from year 

to year (due to quantity of material processed), but little difference in the amount of SOx

emissions (due to natural gas combustion). Finally, because some of the equipment was 

shutdown in 2003 and some in 2004, different 2 year reporting periods were used to calculate 

average annual emissions, which explain why the emission profiles are not similar. Moreover, 

CCAT fails to explain how the difference matters.

Comment 8: CCAT states that their examples regarding quantification issues points to a 

broader issue that they believe EPA failed to consider, namely “EPA’s apparent failure to 

address the inherent difficultly of this emissions reconstruction effort.” CCAT states that “[T]his 

is important because the CAA does not allow for guessing and close-enough, but requires 

emission reductions to be actual, and quantifiable.” Finally CCAT asserts that “[T]he 

documentation in this docket does not meet the requirements of the CAA and therefore, EPA 

adoption of this proposed rule would be arbitrary and capricious.” Comment Letter at pg 8. 

CCAT completes this comment by calling on EPA to revisit each of the entrees in the AB1318 

tracking system to ensure that each reduction is truly verifiable and to provide clear explanations 

of these particular irregularities. 

Response 8: EPA agrees that a great deal of the work that SCAQMD and EPA are required to 

do to implement the CAA is difficult. EPA considers it preferable for the District to have a 

systematic approach to crediting and debiting its bank of offsets, such as the approach adopted in 

Rule 1315. However, EPA had not approved Rule 1315 at the time California AB 1318 

legislation instructed the SCAQMD to provide offsets to the AB 1318 Tracking System. In 

addition, Sentinel is not one of the types of facilities allowed to obtain offsets from the 

SCAQMD under Rule 1315. Accordingly, SCAQMD proceeded with a source-specific SIP 

revision. EPA agrees that the CAA requires emission reductions to be surplus, permanent, 

quantifiable and federally enforceable. See Appendix S and 40 CFR 51.165(a)(3)(ii)(C)(1)(i). In 

the case of quantifying offsets, we must ensure that the amount of offsets credited does not 

exceed the amount of emissions that were previously being emitted into the atmosphere by the 

facility or source that has shut down (i.e. actual emissions). 

There is nothing in the CAA or EPA’s regulations prohibiting us from allowing the SCAQMD to 

utilize a conservative approach to account for missing data when quantifying offsets. EPA uses 

this approach for missing data in some of our programs, such as the Acid Rain program. When 

data is not recorded by a facility’s continuous emissions monitoring system because the system is 

not operating properly, EPA uses a default figure representing what EPA considers is likely to be 

the worst-case scenario. The SCAQMD has also used a reasonable approach in quantifying the 

offsets here. Because these offsets are the result of orphan shutdowns, missing data may occur. 

Thus, where AER data is missing, SCAQMD either substituted a zero or used data from the 
25

RECLAIM program or the Acid Rain program. See Attachment A, Sections I.B and II.A & B. 

EPA is finalizing our proposed and supplemental approval of this SIP revision because the subset 

of facilities listed in Attachment A from the AB 1318 Tracking System were properly quantified 

based on finding SCAQMD’s reasonable exercise of discretion to use zero emissions, Acid Rain 

or RECLAIM data to provide a conservative approach to account for missing data.14

• CCAT Heading IV. “The Offsets Are Not Surplus”

Comment 1: CCAT notes that South Coast Rule 1315 – Federal New Source Review Tracking 

System governs the District’s internal accounts and since the Sentinel offsets were transferred 

from the District’s internal accounts into the AB 1318 Tracking System, these offsets must 

comply with the approach to surplus requirements outlined in Rule 1315.

Response 1: EPA disagrees. If Rule 1315 applied to these offsets, then the District would have 

simply transferred the necessary amount of offsets out of the District accounts with no additional

review of whether the offsets met the federal offset criteria, since Rule 1315 establishes a system 

to ensure these criteria have been met. Rule 1315 requires a surplus adjustment be made in the 

aggregate for the annual balance of credits remaining in the District offset accounts. See 77 FR 

31200 (May 25, 2012) The Sentinel offsets were not transferred out of the District offset 

accounts in the aggregate; rather each individual shutdown action was removed and evaluated to 

verify that the reductions meet the offset integrity criteria of being surplus, permanent, 

quantifiable, and federally enforceable. 40 CFR 51.165 (a)(3)(ii)(C)(1)(i) EPA also notes that if 

Rule 1315 were applicable to the offsets contained in the AB1318 tracking system, then 

reductions from the shutdown of the Seagull Sanitation pit burner would not have needed to be 

BACT-adjusted prior to deposit, thus significantly increasing the amount of offsets. 

Comment 2: CCAT states that EPA must analyze each piece of equipment from the time of 

permit issuance to the time of quantifying the offset to ensure proper surplus adjustment of the 

offsets. CCAT states that rather than properly analyzing the many rules that have been adopted 

since the different units were installed; the proposed rule analyzes only two rules, Rules 1156 

and 1157.

Response 2: EPA disagrees on two counts. First, CCAT is incorrect that in order to surplus 

adjust an offset in the AB 1318 Tracking System SCAQMD and EPA must review of all rules 

adopted since the time the permit was issued. During the time a facility is operating, it is required 

to operate in compliance with all applicable District rules. Accordingly, at the time a facility 

ceases operating its allowable emissions have already been reduced to be in compliance with all 

rules adopted by SCAQMD during its operation. Instead, the SCAQMD must ensure that at the 

time the offset is used (in this case when the construction permit was issued), that no portion of 

the offset should be further reduced because of new rules adopted since the facility shutdown. As 

part of our review of the offsets transferred to the AB 1318 tracking system, EPA reviewed both 

South Coast rules and federal regulations to determine if any new applicable requirements 

applied to the operations being evaluated. We found that only two new rules, Rules 1156 and 

 14 EPA notes that in almost every context other than offset quantification, it would not be reasonable to assume there 

are zero emissions when data is missing. But offset quantification is the inverse of the usual cases of emissions 

quantification under the CAA where we are determining how much credit to give for the amount of emissions that 

were going into the atmosphere. In offset quantification, assuming zero emissions were emitted is the worst case.
26

1157 required any surplus adjustment for the shutdown units and facilities. As CCAT notes, EPA 

analyzed what surplus adjustment was required by those rules. From that analysis, EPA surplus 

adjusted 4 pieces of equipment and reduced the creditable emissions by 5,960 pounds. Therefore, 

the surplus adjustments discussed in our proposal and supplemental proposal are correct.

• CCAT Heading IV.A. “Rule 1315, Which EPA Did Not Apply, Dictates How the 

Surplus Adjustment after Deposit Occurs”

Comment 1: CCAT’s comment describes the Rule 1315 requirements for annually surplus 

adjusting the offset account balance contained in the District Offset Accounts. CCAT asserts that 

while Rule 1315 is subject to a legal challenge, EPA is bound to apply the Rule 1315 method for 

discounting to surplus in the approval of the AB 1318 Tracking System. CCAT asserts that 

EPA’s reliance on a different approach renders the current rulemaking unlawful.

Response 1: EPA disagrees. There are no provisions in Rule 1315 that require the surplus 

adjustment methodology required by the rule to be used on offsets that are transferred from 

District’s Rule 1315 Offset Account to a separate Offset Account such as the AB1318 Tracking 

System. The surplus adjustment methodology in Rule 1315 only applies to the remaining balance 

of credits after the District has reconciled its use of debits and credits. The methodology in Rule 

1315—surplus adjusting in the aggregate—was developed to reduce the administrative burden 

required to surplus adjust each individual offset – as the District has done here. For credits 

deposited into the Rule 1315 Offset Accounts, we approved a systematic approach. For the 

AB1318 Tracking System, instead of transferring a specific amount of offsets in the aggregate 

from Rule 1315, which was not SIP approved at the time of the transfer, the District transferred 

the specific facility offsets as listed in Table A and B of the SIP submittal (a subset of which are 

listed in EPA’s TSD Attachment A) for 137,799 pounds/yr of PM10 and 25,346 pounds/yr of SOx

and evaluated each shutdown or emission reduction project to ensure the offsets met the federal 

offset criteria of being surplus, quantifiable, permanent and federally enforceable. (See TSD 

dated Dec. 29, 2010, regarding these criteria.) It is not necessary or required that both methods 

be used. 

• CCAT Heading IV.B. “If Rule 1315 Were Not Applicable, EPA’s Analysis Is Entirely 

Incomplete”

Comment 1: CCAT states that EPA did not ensure that the emission reductions are surplus and 

not required under the CAA. CCAT asserts that an emission reduction must be surplus adjusted 

both at the time of banking and at the time of use. 

Response 1: EPA regulations require all offsets to be surplus to any other emission reduction 

requirement at the time offsets are used. EPA’s terminology for this is “surplus adjusted at the 

time of use.” Many air agencies choose to surplus adjust emission reductions at the time of 

creation (e.g. when a facility shuts down) because it is easier to quantify the offsets at that time. 

But the only federal CAA requirement is to ensure offsets are surplus adjusted at the time of use, 

which means the offsets must be evaluated again at the time the offsets are used. EPA has 

reasonably determined that the SCAQMD properly surplus adjusted all of the offsets listed in 

Attachment A to EPA’s Technical Support Document for this Supplemental proposal.
27

Comment 2: CCAT provides a brief summary of the Emission Reduction Credits (ERCs) as 

generated from the shutdown of the Seagull Sanitation facility. CCAT notes that the facility 

operated a continuous -feed incinerator until it shutdown in 2001 and that the District awarded 

the source private-market ERCs as provided in SCAQMD Rule 1309 – Emission Reduction 

Credits in 2002. CCAT states that “the District applied a novel notion of BACT to an 

incinerator,” and that the Seagull Sanitation example “highlights the across-the-board 

misapplication of the surplus requirement in this rulemaking.” CCAT claims that since 

incinerators like the one used by Seagull Sanitation are prohibited in California under a state 

program, the 8,030 pounds/yr of PM10 and 13,870 pounds/yr of SOx credits that were approved 

under this rulemaking should have been discounted to zero at the time of banking. Alternatively, 

CCAT states that if these emission reductions were bankable, they would still need to undergo an 

annual subsequent discount to ensure they are surplus at “time of use,” and reduce the offsets as 

required by the adoption of new federal new performance standards for these facilities, otherwise 

this rulemaking is again unlawful. 

Response 2: Seagull Sanitation is the only source of offsets in the AB1318 Tracking System 

where the owner submitted an application for ERCs pursuant to Rule 1309. Rule 1309 is the 

District’s SIP approved rule for evaluating the granting of ERCs when the owner of a source 

applies to obtain offsets which it can trade on the private market. The rule requires adjustments 

to the amount of creditable ERCs that go beyond what is required by the federal CAA. For 

example, the rule requires ERCs to be adjusted to levels considered to be Best Available Control 

Technology (BACT) at time of creation in lieu of being surplus adjusted at time of use. This 

means that the amount of creditable ERC’s is reduced to reflect the level of control that would be 

achieved if the shutdown unit had been utilizing current day BACT. The rule also requires the 

source to payback any offsets (“payback amount”) to the District that had been loaned to the 

source under the older pre-October 1990 District offset tracking system. This payback amount is 

what was deposited into the District’s Rule 1315 Offset Accounts and transferred to the AB 1318 

Tracking System. These particular offsets, because they went through the Rule 1309 ERC review 

process, were BACT adjusted before any deposit to ensure they meet the federal offset criteria of 

being surplus, therefore no additional adjustments of these credits is required prior to use by 

Sentinel. 

CCAT’s comment does not provide any support for its statement that “incinerators like the one 

used by Seagull Sanitation are prohibited in California under a state program designed to 

improve air quality.” EPA is not aware of any such prohibition. EPA does note from the 

District’s evaluation that they considered whether California Health &Safety Code section 41810 

applied for the purposes of BACT discounting. The District determined section 41810 only 

applied to open burning and that as a pit burner, the Seagull Sanitation operation was not subject 

to those requirements. 

In regards to what CCAT characterized as a “novel notion of BACT to an incinerator,” EPA 

notes that while the applicant proposed that the existing operation constituted current BACT 

because they could find no other BACT determinations for a pit burner, the District’s evaluation 

determined that “current BACT” would require a multi-chamber incinerator. Thus the emission 

factor for a multi-chamber incinerator was used to BACT-adjust the amount of offsets available 

for banking as private market ERCs. Only after all the adjustments required to ensure that the 

emission reductions met the offset criterion for surplus adjustment did the District then reduce 
28

this amount by the payback amount (i.e. the amount of credits that were owed back to the 

District). The offsets that were deposited into the District’s Rule 1315 Offset Accounts and then 

transferred into the AB 1318 tracking system had already met all of the requirements to be 

considered federal offsets.

Comment 3: CCAT states that EPA only analyzed two District rules; Rules 1156 and 1157 in 

regards to the need to surplus adjust the credits in the AB1318 Tracking System. CCAT 

disagrees with EPA’s analysis and asserts that “...the cement rule [1156], by its plain language, 

applies to more than the two facilities. It would not have identified already-shut facilities, such as 

Elsinore Ready-Mix, but would still establish a new standard to which emission from relevant 

facilities would be reduced.” 

Response 3: EPA disagrees. Rule 1156, applies to facilities that manufacture cement (SIC 

3241), not to facilities that use cement to manufacture concrete, such as Elsinore Ready-Mix. 

The North American Industry Classification System classifies Cement Manufacturing under 

NAICS 327310, with the following definition: This industry comprises establishments primarily 

engaged in manufacturing portland, natural, masonry, pozzolanic, and other hydraulic cements. 

Cement manufacturing establishments may calcine earths or mine, quarry, manufacture, or 

purchase lime. The NAICS code for Ready-mix Concrete Manufacturing is 327320, with the 

following definition: This industry comprises establishments, such as batch plants or mix plants, 

primarily engaged in manufacturing concrete delivered to a purchaser in a plastic and 

unhardened state. Ready-mix concrete manufacturing establishments may mine, quarry, or 

purchase sand and gravel. Rule 1156, Section (b) Applicability states that the “rule applies to all 

operations, materials handling, and transport at a cement manufacturing facility. The rule also 

defines a cement manufacturing facility as “any facility that engages in, or has been engaged in 

prior to November 4, 2005, producing portland cement or associated products, as defined in the 

Standard Industrial Classification Manual as Industry No. 3241, Portland Cement 

Manufacturing.” Therefore, EPA and the SCAQMD properly determined that Rule 1156 does 

not apply to Elsinore Ready-Mix.

Comment 4: CCAT states that they believe the following rules also apply to sources that are 

included in the AB1318 Tracking System, and therefore require surplus adjustment: 1137 – PM10

Emission Reductions from Woodworking Operations, 1155 – Particular Matter Control Devices, 

481 – Spray Coating Operations, Reg IX Subpart CC – Standard of Performance for Glass 

Manufacturing Plants, SCAQMD BACT guidelines, 433 Natural Gas Fuel Specifications and 

403 Fugitive Dust. CCAT also states that the “record is not sufficient to determine when the 

permit to construct or the permit to operate was issued for each piece of equipment; therefore it 

is possible that older District rules apply as well.” Finally CCAT asserts that “EPA has the duty, 

when assessing whether the emissions were in fact reduced to be surplus, to answer the question: 

what rules have been adopted since each piece of equipment was originally permitted? Having 

identified the rules, it must then apply a discount reflecting each rule to each piece of 

equipment.” 

Response 4: EPA disagrees. First, while it is not necessary to determine when a permit was 

issued in order to ensure an offset has been properly surplus adjusted, that information is in the 

record for each source. (See the Facility Equipment List Report included in the supporting 

documentation for each action.) 40 CFR 51.165(a)(3)(ii)(G) states that “Credit for an emissions 
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reduction can be claimed to the extent that ...the State has not relied on it in demonstration 

attainment or reasonable further progress.” This generally means that amount of offset credit 

granted can be no higher than what would be allowed if the source was subject to a rule or 

requirement of the attainment plan that exists at the time the offset is used. This is done by 

comparing the emission rate or emission factor for each emission unit with any new lower 

emission limits that may apply to the equipment due to new rules that were adopted between the 

time the source shutdown and the time the offsets are used. 

Although CCAT’s comments list a number of rules, it has not provided any information showing 

that these rules apply to any of the facilities or sources listed in Attachment A. As we have noted 

before, the Supreme Court has stated that “administrative proceedings should not be a game or a 

forum to engage in unjustified obstructionism by making cryptic and obscure reference to 

matters that ‘ought to be’ considered and then, after failing to do more to bring the matter to the 

agency’s attention, seeking to have that agency determination vacated on the ground that the 

agency failed to consider matters ‘forcefully presented.’” Vermont Yankee, 435 U.S. at 553-54. 

With respect to the list of rules CCAT presents, the commenter must at least try to explain why 

those rules would apply to any of the facilities or sources listed in Attachment A. For example, 

the purpose of Rule 481 is to control VOC emissions from spray coating operations, not PM10 or 

SOx. While these VOC control requirements may also reduce PM10 emissions, no emission 

reduction credit is taken in the PM10 attainment plan. Therefore the PM10 emission reductions 

due to the shutdown of the source are surplus. 

• CCAT Heading V. “What is the status of the offsets not addressed here?”

Comment 1: CCAT notes that our supplemental proposal stated that EPA was not taking any 

action on the offsets in the AB 1318 Tracking System that were not listed in EPA’s Attachment 

A. CCAT then poses a series of interrogative statements to illustrate that it would be problematic 

for EPA not to take any action on the offsets contained in the AB 1318 Tracking System but not 

included in Attachment A.

Response 1: In the Comment Letter the District submitted regarding our supplemental proposal, 

the Executive Officer stated: “To the extent that there are excess offsets in the AB 1318 Tracking 

System that are not needed for the Sentinel project, they will be retired for the benefit of the 

environment.” Based on the District’s commitment to retire all of the offsets listed in the AB 

1318 Tracking System, i.e., those offsets not listed in Attachment A and any amount listed in 

Attachment A that exceed the 118,120 pounds of PM10 and 13,928 pounds of SOx required for 

the Sentinel project, EPA is satisfied that none of the hypothetical scenarios posited in CCAT’s 

interrogative statements will occur. The offsets will not be distributed to another facility, they 

will not be placed into the District Rule 1315 Offset Accounts, and they will not be “relied upon 

to offset emission reductions [sic] in the South Coast Air Basin.” Comment Letter at pg 11. EPA 

views the District’s commitment to retire excess offsets as a benefit to air quality.

In addition, EPA notes that the District has recently released a list of its recommendations for 

funding projects exceeding $50 million to reduce emissions in the Coachella Valley. The funds 

for these projects come from $53.3 million that Sentinel paid to the District for the offsets. These 

projects will also result in air quality improvements. The District’s announcement of its 

recommendations is placed in the docket for this final rule.
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• CCAT Heading VI. “Coachella Valley Truly a Downwind Basin?”

Comment 1: Citing an incident that occurred when the wind direction blew odors from the 

Salton Sea towards the South Coast Air Basin, CCAT questions whether Coachella Valley is 

truly downwind from the South Coast Air Basin. CCAT cites District Rule 1309 as the basis for 

this requirement. 

Response 1: Rule 1309 does not apply to this source-specific SIP revision. But there is also no 

basis for one incident of the wind blowing from the non-prevailing direction to conclude that 

the long-standing determination of air quality experts is incorrect. CCAT must provide more 

than a single incident to throw into question the basis for air quality planning in the region for 

the past 40 years. See Final Coachella Valley 2003 AQMP at pg. 3-2, Table 3-1.

 Letters from Citizens living in Coachella Valley 

EPA received 20 comment letters from citizens living in or near the Coachella Valley. Many of 

these comment letters voiced opposition to the construction and operation of the CPV Sentinel 

Energy Plant, but did not contain substantive comments regarding EPA’s proposed action to 

approve the AB1318 Tracking System as source-specific SIP revision. 

Comment 1: Several of these commentors expressed concerns about Sentinels impacts on local 

public health, global warming, suggested that renewable energy should be used to produce the 

needed electricity, and questioned why pristine Mission Springs water will be used for cooling.

Response 1: The scope of EPA’s proposed approval of the District’s submittal of the AB1318 

Tracking System is limited to determining whether a sufficient number of offsets met the CAA 

requirements for offsets. None of these comment relate to whether the emission reduction 

credits in the AB1318 Tracking System comply with federal CAA requirements for offsets. 

Therefore, although EPA appreciates the comments and concerns, the issues raised are beyond

the scope of this rulemaking. EPA also notes that the District has recently recommended a 

number of projects for the Coachella Valley that will be funded through the money the District 

received from transferring the offsets to CPV Sentinel.