ATTACHMENT H

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

FINAL STAFF REPORT

PROPOSED AMENDED RULE 317 – CLEAN AIR ACT NON-ATTAINMENT FEES

June 2009

Deputy Executive Officer

Planning, Rule Development, and Area Sources

Elaine Chang, DrPH

Assistant Deputy Executive Officer

Planning, Rule Development, and Area Sources

Laki Tisopulos, Ph.D., P.E.

Author: Robert Pease, P.E. Program Supervisor

Henry Pourzand Air Quality Specialist

Reviewed by: Barbara Baird District Counsel

Contributors: Joe Cassmassi Planning and Rules Manager, AER

Danny Luong Senior Enforcement Manager

Kavita Lesser Deputy District Counsel

Ali Ghasemi Program Supervisor, AER

Sue Lieu Program Supervisor, Socioeconomic Analysis

Greg Hunter Air Quality Specialist, Socioeconomic Analysis

Barbara Radlein Air Quality Specialist, CEQA
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

GOVERNING BOARD

Chairman: WILLIAM A. BURKE, Ed.D.

Speaker of the Assembly Appointee

Vice Chairman: S. ROY WILSON, Ed.D.

Supervisor, Fourth District

County of Riverside

MEMBERS:

MICHAEL D. ANTONOVICH

Supervisor, Fifth District

County of Los Angeles

MICHAEL A. CACCIOTTI

Mayor, City of South Pasadena

Cities of Los Angeles County, Eastern Region

BILL CAMPBELL

Supervisor, Third District

County of Orange

JANE W. CARNEY

Senate Rules Committee Appointee

JOSIE GONZALES

Supervisor, Fifth District

County of San Bernardino

RONALD O. LOVERIDGE

Mayor, City of Riverside

Cities of Riverside County

JOSEPH K. LYOU, PH.D.

Governor‟s Appointee

JAN PERRY

Councilmember, 9th District

City of Los Angeles Representative

MIGUEL PULIDO

Mayor, City of Santa Ana

Cities of Orange County

TONIA REYES URANGA

Councilmember, City of Long Beach

Cities of Los Angeles County, Western Region

DENNIS YATES

Mayor, City of Chino

Cities of San Bernardino County

EXECUTIVE OFFICER:

BARRY R. WALLERSTEIN, D.Env.
TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................................................ 1

BACKGROUND ............................................................................................................................ 2

PAR 317 INVENTORY ................................................................................................................. 7

BASELINE ALTERNATIVES ...................................................................................................... 9

CALCULATING CAA NON-ATTAINMENT FEES ................................................................. 18

PROPOSED AMENDED RULES ............................................................................................... 24

CAA NON-ATTAINMENT FEES REVENUE........................................................................... 26

CALIFORNIA ENVIRONMENTAL QUALITY ACT............................................................... 26

DRAFT FINDINGS...................................................................................................................... 27

CONCLUSIONS AND RECOMMENDATIONS ....................................................................... 27

COMMENTS AND RESPONSE TO COMMENTS ................................................................... 29

APPENDICES

1 LIST OF MAJOR STATIONARY SOURCES IN THE AQMD (JULY 2008)

2 “t-Test” METHODOLOGY
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EXECUTIVE SUMMARY

Proposed Amended Rule 317 – Clean Air Act Non-attainment Fees promulgates the mandatory 

requirements for air basins in the South Coast Air Quality Management District (SCAQMD) 

that are not in attainment with the federal one-hour standard for ozone as contained in Sections 

182(d), 182(e), 182(f) and 185 of the 1990 amendments to the Clean Air Act (CAA). Major 

stationary sources of Volatile Organic Compounds (VOC) and Nitrogen Oxides (NOx), both 

pollutant precursors of ozone, must either reduce these emissions or otherwise pay a CAA nonattainment fee in lieu of reductions. The CAA non-attainment fee is assessed for both VOC as 

well as for NOx emissions from subject sources. CAA non-attainment fees are based on actual 

VOC and NOx emissions that exceed 80% of the baseline. 

The SCAQMD encompasses the South Coast Air Basin (SOCAB) along with portions of the 

Salton Sea Air Basin (SSAB) and the Mojave Desert Air Basin (MDAB). For air basins 

classified as “Severe 17” (SSAB) the attainment year is 2007; for those classified as “Extreme” 

(SOCAB) the attainment year is 2010. For the purposes of PAR 317 the MDAB is designated as 

unclassified attainment and there is no set attainment date.

CAA non-attainment fees would be assessed in an assessment year which would be each 

calendar year beginning with the year following the attainment year and due the year following 

the assessment year. Furthermore, a major stationary source that does not mitigate emissions of 

VOC and NOx below 80% of the source‟s baseline emissions will be required to pay the VOC 

and NOx CAA non-attainment fees annually for the amount of the source emissions that exceed 

80% of the baseline emissions. Such fees are required to be paid annually until the 

Administrator of the United States Environmental Protection Agency (U.S. EPA) designates the 

air basin as being in attainment with the federal one-hour ozone standard. CAA non-attainment 

fees shall be due to the AQMD in the year following the assessment year in accordance with the 

current provisions regarding payment of emissions fees as contained in Rule 301(e)(10). Late 

and non-payment of CAA non-attainment fees are also subject to the fee surcharge and permit 

revocation provisions of Rule 301(e)(10). 

Before any fees are assessed however, the Administrator of the U.S. EPA or the Executive 

Officer must make a finding that the basin is actually not in attainment of the federal one-hour 

standard for ozone. For the purposes of this rule a non-RECLAIM major stationary source is 

defined, as a source having a potential (or permitted) to emit (PTE) of greater than 25 tons per 

year in the SSAB and 10 tons per year in the SOCAB. RECLAIM sources are defined as major 

stationary sources, based on the source PTE, pursuant to paragraph (b)(2) of Rule 3001 –

Applicability. CAA non-attainment fees received by the AQMD in compliance with these rule 

requirements will be used for air quality improvement programs.

On December 5th, 2008 the Governing Board adopted Proposed Rule (PR) 317 with the 

provisions of the rule applicable only to the SSAB. At the same time the Governing Board 

directed staff to further review and report back to the Board on the issues of alternative baselines, 

emissions averaging, and fees. 

Staff has analyzed a wide range of possible scenarios focusing on alternative baselines that 

would likely be consistent with the CAA and an U.S. EPA guidance memo. Rules adopted by 
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two other California air districts were also reviewed. In addition, staff has reviewed substantial 

input by stakeholders including input from industry and environmental groups. Based on this 

review and analysis staff provided two modified rule options for the Board‟s consideration at the 

April 3, 2009 Public Hearing; Option A and Option B. Option A would adopt the same rule 

language for the SOCAB as adopted by the Governing Board on December 5, 2008 for major 

stationary sources in the SSAB by amending the definition of Basin currently in the rule to 

include the SOCAB. Option A would define baseline for an existing major stationary source as 

the actual source emissions of VOC/NOx (as applicable) in the attainment year. Option B is 

identical to Option A, with the exception that a source may petition the Executive Officer to be 

classified as a cyclical source by submitting a plan demonstrating it is cyclical. The plan must 

include a statistical “t-Test” method, as described in Appendix 2 of this staff report, 

demonstrating that a source has cyclical emissions after a downward adjustment of emissions to 

account for any/all adopted local, state and federal rules or regulations that would have restricted 

the sources ability to both operate or emit a particular pollutant that existed during the five (5) 

consecutive years immediately preceding the attainment year for which the demonstration of 

cyclical operations/emissions is being made. The same downward adjusted average emissions 

from the five (5) consecutive years immediately preceding the attainment year must also be used 

to calculate the alternative VOC/NOx emissions (as applicable) baseline. A source that is 

determined to be a major stationary source of either VOC or NOx emissions that are cyclical, is 

considered for the purposes of this rule to be a cyclical major stationary source. 

Based on direction received at the April 3, 2009 Public Hearing staff has developed a third 

option, Option C, for the Boards consideration. Option C would allow sources, in lieu of using 

the attainment year emissions as their baseline emissions, to use the average of two consecutive 

years out of the ten years prior to and including the attainment year. Sources requesting 

consideration of an alternative source baseline must use emissions that have been discounted for 

any mandated emissions reductions in calculating the alternative optional baseline. In addition, 

the rule option contains a “Clean Unit” or Best Available Control Technology (BACT) Permit 

Unit emissions exemption. Emissions from permitted units that meet BACT requirements as of 

the later of 2010 or the year the permit to construct was issued for the unit, may be excluded 

from the calculation of CAA non-attainment fees. A plan must be filed for consideration by the 

Executive Officer for both the alternative optional baseline and the Clean Unit exemption. 

However, no guarantee is provided that review of a plan filing shall constitute acceptance by the 

District until so approved by the Executive Officer. Furthermore, should the Administrator of 

the U.S. EPA find that the fee provisions of this rule option are deficient in terms of meeting the 

requirement of the CAA or U.S. EPA, unpaid fees plus accrued interest may be collected by the 

Administrator pursuant to CAA provisions. Should the U.S. EPA approve an equivalent 

program submitted by the District or Congress amends the Clean Air Act such that Section 185 

fees, or an equivalent program, are no longer required, this rule option would become 

inoperative.

BACKGROUND

PAR 317 promulgates mandatory requirements of the CAA regarding air basin attainment 

deadlines for ozone and required mitigation in the absence of such attainment. Figure 1 shows 

air basins in the AQMD‟s jurisdiction. Area 1 is the portion of the AQMD in the SOCAB, Area 
3

2 is the Riverside County portion of the SSAB in the AQMD and Area 3 is non-Palo Verde, 

Riverside County portion of the MDAB in the AQMD. The air basins are also overlaid onto 

county boundaries for reference. Geographically, for the areas in the AQMD‟s jurisdiction, air 

basins and counties generally correspond as follows:

SOCAB (Area 1) - generally corresponds to metropolitan Los Angeles, Orange, western 

Riverside and south-western San Bernardino counties.

SSAB (Area 2) - generally corresponds to the central portion of Riverside County.

MDAB (Area 3) - generally corresponds to the eastern portion of Riverside county up to 

the Palo-Verde area.

Figure 1 – Air Basins in the AQMD and County Boundaries

Based on the criteria in Section 181(a) of the CAA - Classification and Attainment Dates for 

1989 Non-attainment Areas and 1990 ozone readings the AQMD‟s basins are classified as 

shown in Table 1. For air basins classified as Extreme the CAA requires attainment with the 

federally established one-hour standard for ozone no later than 2010. For air basins classified as 

Severe 17 the CAA requires attainment with the federally established one-hour standard for 

ozone no later than 2007. [Note: The U.S. EPA has revoked the one-hour standard for ozone, so 

there is no longer a CAA requirement to attain the standard. However, the federal court of 

appeals has held that the mandatory fee requirements of this rule must still be imposed in severe 
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and extreme one-hour areas not meeting the one-hour standard.] If the air basin is not in 

attainment by the applicable attainment date then a major stationary source must either reduce 

emissions of VOC/NOx as applicable, or pay a CAA non-attainment fee. The MDAB (Area 3) 

has a status of unclassified attainment, and so PAR 317 does not apply to the sources in this 

basin.

Table 1 – CAA Classification and Attainment Dates for Air Basins in the AQMD

Air Basin Attainment Status

Mandatory CAA Attainment 

Year

(1-Hour Ozone Standard)

SOCAB (Area 1)

“Extreme”

non-attainment

2010

SSAB (Area 2)

“Severe 17”

non-attainment

2007

MDAB (Area 3) Unclassified Attainment Not Applicable

For the purposes of this rule a source qualifies as a major stationary source based on the PTE 

(permitted emissions level or “allowables”) of VOC/NOx for all permitted units at the source or 

RECLAIM credits held. For sources located in the SOCAB (Area 1) this is any stationary source 

with a PTE of 10 or more tons of either VOC or NOx (not combined), annually. For sources 

located in the SSAB (Area 2) this is any stationary source with a PTE of 25 or more tons of 

either VOC or NOx (not combined), annually. There is currently no threshold for sources 

located in the MDAB since this basin is classified as attainment/undesignated.

For the purposes of this rule a Non-RECLAIM major stationary source, based on the source 

PTE, is defined in Sections 181(b)(4)(B) and 182(d) of the CAA and as shown in Table 2. Also, 

where applicable a Non-RECLAIM major stationary source is also the same as a Major Polluting 

Facility as defined in Rule 1302(s) – Definition of Terms.

A unique feature of the AQMD is the Regional Clean Air Incentives Market or RECLAIM 

program. RECLAIM is a special cap and trade program established for medium to large sized 

emitters of NOx and SOx located in the SOCAB. This program allows sources in the program to 

trade credits with other sources in the program. Due to the fluid nature of RECLAIM trading 

emissions credits (RTCs), special provisions have been crafted for Title V applicability and PTE. 

To recognize and continue this unique program, specific language for RECLAIM sources subject 

to this rule has been crafted. These provisions deal with the issues of PAR 317 applicability to 

and baseline emissions for RECLAIM sources. For the purposes of this rule, a RECLAIM 

source is a major stationary source subject to PAR 317 if, the source PTE is greater than or equal 

to 10 tons prior to the attainment year or the year the PTE became greater than or equal to 10 
5

tons if this first occurs during or after the attainment year, based on the current Title V 

RECLAIM program definition of PTE as found in paragraph (b)(2) of Rule 3001 – Applicability. 

Paragraph (b)(2) of Rule 3001 defines PTE for a RECLAIM facility as either the higher of the 

starting allocation plus nontradeable credits or, RTCs that are held in the allocation account after 

trading.

Each RECLAIM facility is assigned a cycle – Cycle 1 or Cycle 2. Cycle 1 facilities have a 

compliance year of January 1 through December 31 of each year, and Cycle 2 facilities of July 1 

through June 30 of the following year. Accordingly, emissions from RECLAIM facilities are 

based on their compliance year for purposes of assessing RECLAIM compliance. However, to 

be consistent with the non-RECLAIM facilities, for the purpose of this rule, baseline emissions 

for RECLAIM facilities will be determined by calendar year. For example, the baseline 

emissions for the 2010 attainment year for a Cycle 1 facility would coincide with the 2010 

compliance year emissions. For Cycle 2 facilities, the baseline emissions would be the sum of 

the third and fourth quarters of compliance year 2009 (January 1 – June 30, 2010) and the first 

two quarters of compliance year 2010 (July 1 – December 31, 2010). 

Regardless of which cycle a RECLAIM facility belongs, the NOx baseline for a NOx RECLAIM 

facility is defined as the larger of either the NOx RTCs held on January 1 of the attainment year 

eligible for use during that year, or the actual NOx emissions during the attainment year (not to 

exceed eligible NOx RTC holdings at the end of the reconciliation period). By way of example, 

for the case of a 2010 attainment year (extreme non-attainment area), the NOx RTCs held on 

January 1 of the attainment year and eligible for use during that year are the sum of all RTCs 

held by the facility on January 1 which fall into any of the following categories:

A. Active Cycle 2 Compliance Year 2009 RTCs held in the facility‟s allocation account which 

were not needed for compliance purposes during July through December 2009;

B. Active Cycle 1 Compliance Year 2010 RTCs held in the facility‟s allocation account; and

C. Active Cycle 2 Compliance Year 2010 RTCs held in the facility‟s allocation account.
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Table 2 – Definition of Major Stationary Source Based on Permitted Source Emissions (PTE)

Table 3 below provides some examples of whether a source qualifies as a major stationary 

source or not. Note that a source located in the SOCAB must have the potential to emit at least 

10 tons of VOC or the potential to emit at least 10 tons of NOx per year in order to qualify as a 

major stationary source for the purposes of PAR 317. A source located in the SSAB must have 

the potential to emit at least 25 tons of VOC or the potential to emit at least 25 tons of NOx per 

year in order to qualify as a major stationary source for the purposes of PAR 317. 

Table 3 – Examples of Whether a Source Qualifies as a Major Stationary Source (TPY)

Air Basin Source 

VOC PTE

Source 

NOx PTE

Qualifying 

VOC PTE

Qualifying 

NOx PTE

Major Stationary 

Source

SOCAB 5 7 10 10 NO

SOCAB 59 1 10 10 YES for VOC

SOCAB 6 58 10 10 YES for NOx

SOCAB 25 11 10 10 YES for BOTH

SSAB 24 20 25 25 NO

SSAB 51 6 25 25 YES for VOC

SSAB 11 25 25 25 YES for NOx

SSAB 450 427 25 25 YES for BOTH

MDAB N/A N/A N/A N/A Not Applicable

Air Basin Attainment Status Potential to Emit/Permitted Source Emissions 

of Either VOC or NOx

SOCAB (Area 1)

“Extreme”

non-attainment

10 or more Tons Per Year

SSAB (Area 2)

“Severe 17”

non-attainment

25 or more Tons Per Year

MDAB (Area 3) Undesignated Not Applicable
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PAR 317 INVENTORY

An estimated projection of the PAR 317 Inventory was generated using a data set obtained by 

cross referencing the AQMD‟s Annual Emissions Reporting (AER) inventory data and Title V 

database and based on the following assumptions:

1. All sources with a potential (or permitted) to emit 25 or more tons per year of either VOC 

or NOx emissions annually and located in the portion of the SSAB that is in the 

jurisdiction of the AQMD, are major stationary sources and included in this estimate.

2. All other sources with a potential (or permitted) to emit 10 or more tons per year of either 

VOC or NOx emissions annually and located in the SOCAB (in the jurisdiction of the 

AQMD), are also major stationary sources and included in this estimate.

3. Sources are classified as major stationary sources based on their potential to emit or 

permitted level of emissions. However, fee amounts are based on actual emissions in the

applicable fee assessment year.

4. Actual, FY 06-07 and prior fiscal years VOC and NOx emissions data reported through 

the District‟s AER program are used as a proxy for and assumed equivalent to actual CY 

2006 and prior years source emissions of these same pollutants, respectively.

5. Actual emissions include permitted (RECLAIM and non-RECLAIM) and non-permitted 

(fugitive) source emissions, where applicable. 

6. The CPIF provides a CPI inflation based increase in the initial $5,000 per ton fee based 

on the CPI for the given assessment year for each ton of VOC and for each ton of NOx 

emitted in excess of 80% of the major stationary sources baselines for these air 

contaminants.

7. The set of major stationary sources remains static from 2006 through 2011. No new 

major stationary sources are permitted and no existing major stationary sources drop out 

of the current list (see Appendix 1) during this time period. This last assumption is 

highly unlikely so the figures presented should be regarded as one of a set of possible 

projections of CAA revenues.

[Note – this analysis was done for benchmarking and estimation purposes. The results obtained 

will likely not be representative of actual emissions or fees. It cannot be determined, a priori, 

what actual results will be in the 2007 to 2010 time frame.]

As of July 2008, there were 585 potential major stationary sources in the AQMD; 584 in the 

SOCAB and 1 in the SSAB (Imperial Irrigation District, ID#62862). It is currently projected 

that out of the 584 major stationary sources in the SOCAB, 85 major stationary sources will not 

pay a CAA non-attainment fee in 2012 because they do not currently have any air emissions of 

VOC or NOx. For the remaining 499 major stationary sources in the SOCAB the highest 

combined (VOC and NOx) major stationary source fee paid by a major stationary source in 2012 

is projected to be approximately $2.7 million while the lowest combined CAA non-attainment 

fee is projected to be approximately $472. The average combined major stationary source CAA 
8

non-attainment fee in 2012 is projected to be approximately $60,138. These figures assume no 

annual reduction in either VOC or NOx emissions from the reported FY 06-07 annual emissions 

inventory data for the major stationary sources which this analysis is based on.

Tables 4 and 5 below show the projected range of estimated revenues from CAA non-attainment 

fees based on assumed aggregate rates of annual emission reductions from major stationary 

sources after the attainment date. These percent reductions are simply an example of possible 

revenues if aggregate emissions from all major stationary sources are reduced as specified. They 

are not an attempt to predict actual reductions. It is unknown to what extent facilities will reduce 

their emissions rather than pay fees. Table 4 shows estimated projected revenues from the only 

major stationary source currently located in the SSAB (Imperial Irrigation District, ID#62862) 

for which the first assessment date is 2008 and the first fee due date is 2009. Major stationary 

source(s) in the SSAB would continue to pay fees annually beyond 2008 until the Administrator 

of the U.S. EPA determines the air basin is in compliance with the federal one-hour ozone 

standard. Table 5 shows the cumulative projected revenue for the major stationary source in the 

SSAB paying their 2012 annual CAA non-attainment fee as well as for major stationary sources 

in the SOCAB that will be paying their 2012 annual CAA non-attainment fee based on their 

2011 fee assessment and their 2010 baseline emissions. Facilities in the SOCAB would also 

continue to make annual CAA non-attainment fee payments beyond the initial 2012 CAA nonattainment fee payment until the Administrator of the U.S. EPA finds the SOCAB is in 

compliance with the federal one hour standard for ozone. 

PAR 317 annual CAA revenues are not projected for future years past 2012. While Appendix 1 

is a list of all currently identified and active major stationary sources potentially subject to PAR 

317 the list could, and likely will, change by 2010 and in the years beyond. An existing major 

stationary source may agree to take a permit condition prior to the attainment date to lower their 

allowable or permitted emissions of VOC and NOx below the major source threshold, in which 

case the source would not be considered a major stationary source, or an existing major 

stationary source may discontinue operations. In contrast, new facilities may begin operations in 

the AQMD or existing non-major stationary sources may expand to become a major stationary 

source. An example is a new electrical generating facility coming online in 2011. Any of these 

changes to the current list of major stationary sources and their associated emissions will affect 

the revenues estimated in this report.

Table 4 – CY 2009: A Range of Estimated Projected Revenues From PAR 317 CAA nonattainment fees (SSAB Only)

Annual Percentage 

Reduction in Overall 

Emissions

VOC Total

Revenue ($)

NOx Total

Revenue ($)

VOC and NOx Total

Revenue ($)

0.0% 0 11,864 11,864

2.0% 0 10,464 10,464

4.0% 0 9,112 9,112
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Table 5 – CY 2012: A Range of Estimated Projected Revenues From PAR 317 CAA nonattainment fees (SSAB and SOCAB)

Annual Percentage 

Reduction in Overall 

Emissions

VOC Total

Revenue ($)

NOx Total

Revenue ($)

VOC and NOx Total

Revenue ($)

0.0% 15,800,000 19,500,000 35,300,000

2.0% 13,100,000 16,200,000 29,300,000

4.0% 10,800,000 13,300,000 24,100,000

BASELINE ALTERNATIVES

Rule 317 currently defines the baseline emissions of either VOC or NOx for a major stationary 

source as the amount of these emissions in the attainment year (based on the Basin in which the 

source is located), for VOC and NOx respectively. At the December 5, 2008 Governing Board 

meeting staff was directed to analyze various possible alternative baselines for the Board‟s 

consideration when amending the rule to apply to the SOCAB.

Staff began by considering Section 185(b)(2) of the CAA where “...the Administrator [ of the 

U.S. EPA] may issue guidance authorizing the baseline amount to be determined in accordance 

with the lower of average actuals or average allowables, determined over a period of more than 

one calendar year”. Furthermore, that “Such guidance may provide that such average calculation 

for a specific source may be used if that source's emissions are irregular, cyclical, or otherwise 

vary significantly from year to year.” 

Further guidance was outlined in a U.S. EPA memo dated March 21, 2008 from William T. 

Harnett, Director, Air Quality Policy Division (C539-01), U.S. EPA which stated that “In some 

cases, however the amount calculated for a particular source in the attainment year may not be 

considered representative of the source‟s normal operating conditions. In these cases, the CAA 

allows for use of an alternative calculation method for sources whose annual emissions are 

„irregular, cyclical, or otherwise vary significantly form year to year.‟ We believe an acceptable 

alternative that could be used for calculating the “baseline amount” for such sources would be 

the method for calculating „baseline actual emissions‟ found in EPA‟s regulations for Prevention 

of Significant Deterioration of Air Quality (PSD) (40 CFR 52.21(b)(48)).” Under the PSD 

regulations, sources may generally use the relevant source records for any consecutive 24 months 

within the past ten years (“2-in-10” concept) and any consecutive 24 months within the past five 

years (2-in-5 concept) for electric generating facilities, to calculate an average actual annual 

emissions rate. In the context of PSD, U.S. EPA has determined that the 2-in-10 concept and 2-

in-5 concept provide a reasonable method of computing baseline actual emissions since they take 

into account variations in actual emissions over a full business cycle representing emissions due 

to the normal operation of the respective source categories during the time period. However, the 

memo also states that the study establishing these alternative baseline concepts resulted from an 

examination of the business fluctuations for certain source categories using industry output data 

for the years 1982 to 1994, inclusive, based on the Office of Management and Budget SIC codes 
10

for individual industries. Whether such data and analysis is currently valid and to what extent 

for the purposes of establishing a possible alternative baseline is questionable.

Another issue arises in that while the guidance memo suggests that a source might potentially 

calculate its baseline rate using emissions data from a period other than the attainment year it 

also further states that there must be adequate source information for the selected consecutive 24 

month period to substantiate the proposed alternative baseline. Furthermore, where such data is 

available adequacy should also be determined on a case by case basis, by performing a 

downward adjustment of the baseline emissions to account for any emissions currently noncompliant and also for the most currently enforceable emissions limitations that might restrict the 

sources ability to currently emit a particular pollutant or to operate at levels that existed during 

the consecutive 24 month period that is selected. Such an analysis would have to include, but 

not be limited to, an examination on a case by case basis of any District, State, or Federal 

requirements such as Reasonably Available Control Technology (RACT), Best Available 

Control Technology (BACT), Lowest Available Emissions Reduction (LAER), New Source 

Performance Standards (NSPS) and National Emissions Standards for Hazardous Air Pollutants 

(NESHAPS), processing limits, fuel limitations, or other limitations voluntarily accepted by the 

source for netting emissions offsets or the creation of emissions reduction credits. As stated 

earlier in this report, staff has estimated that over 500 major stationary sources will likely be 

subject to PAR 317 during the initial implementation year for the SOCAB. A case by case 

analysis of baseline, with each source potentially having a different baseline is simply not 

feasible given the resource burdens that would be placed on the agency. Neither the CAA or 

U.S. EPA guidance place an obligation on states or by extension individual air districts to adopt 

alternative baselines for the purpose of implementing Section 185 rules; rather they suggests that 

such alternative baselines may be more appropriate in certain circumstances. 

Staff also performed an extensive nationwide survey of other air Districts, including areas that 

were designated Severe 15 and Severe 17 non-attainment for the federal one-hour ozone 

standard. Only two air districts, the Sacramento Metropolitan Air Quality Management District 

(SMAQMD) and the San Joaquin Valley Air Pollution Control District (SJVAPCD), both 

designated Severe 15 non-attainment, have to date adopted such rules. Baseline in the 

SMAQMD, Rule 307 – Clean Air Act Fees, is defined as actual emissions in the attainment year. 

SJVAPCD Rule 3170 – Federally Mandated Ozone Non-Attainment Fee, provides that for each 

major source, the Baseline Period shall be one of the following periods: The two consecutive 

calendar years consisting of the attainment year and the year immediately prior to attainment 

year; or at least two consecutive calendar years within the five years immediately prior to the end 

of the attainment year, if those years are determined by the APCO as more representative of 

normal source operation. It should be noted that the SJVAPCD rule has not been federally 

approved. Staff‟s understanding is that there may be federal approvability issues with the rule. 

The SMAQMD has estimated that about 14 major stationary sources would be impacted by Rule 

307. While SJVAPCD Rule 3170 does contain a case by case review by the APCO, staff at this 

agency estimates that about 16 major stationary sources will be affected by the rule. The number 

of rule impacted major stationary sources in both cases is far less then the number projected to be 

impacted by PAR 317, again making a case by case review provision in PAR 317 very labor 

intensive.
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Based on information obtained and analyzed staff considered two core issues in assessing the 

viability of an alternative baseline as follows:

1) Since a case by case determination of baseline for a major stationary source is not very 

labor intensive, what statistical test should be used to determine if a “source's emissions 

are irregular, cyclical, or otherwise vary significantly from year to year”? After 

consideration of a number of approaches the “t-Test” methodology (Appendix 2) was 

chosen for determining if a source‟s emissions are cyclical. This method was chosen 

since it is a widely known established basic statistical test method and can easily be 

referenced in numerous publicly available sources. The method is fairly simple to use 

and well suited to working with smaller data sets. The chosen “t-Test” methodology 

compares both the VOC and NOx emissions in the 2006 proxy baseline year to the VOC 

and NOx emissions in a given n number of prior years (for n = 3, 4, and 5), respectively. 

The resulting value of this statistic can be used together with a table of the t-distribution 

to express a degree of confidence about the likelihood that baseline year emissions might 

be significantly different from prior years‟ emissions. A “t” value for this test that is 

outside the chosen confidence bounds is taken to indicate that baseline year emissions 

deviate significantly from the prior year emissions and the source is cyclical. Analysis 

was performed at the 90%, 95% and 99% confidence levels and the 95% level was 

chosen as the most representative based on the data set characteristics.

2) Over what time period should this data or test statistic be evaluated? Both U.S. EPA 

guidance and SJVAPCD Rule 3170 allow for averaging emissions for a representative 

time period during a certain number of prior years. Since, it is very resource intensive 

and therefore, less desirable to conduct a case by case review of all major stationary 

sources in the SOCAB, staff determined that on an aggregate basis for all major 

stationary sources, selecting an extended period of time for averaging (such as those 

suggested in U.S. EPA‟s March 2008 guidance) would not be appropriate due to the 

expected fluctuations in emissions resulting from the aggressive control programs in the 

AQMD. Therefore, in an effort to minimize potential interference with the control 

strategy, a five (5) year time period was chosen for this analysis. As a sensitivity 

analysis, however, staff did consider alternative baseline scenarios using both a three and 

four year averaging also. Various scenarios were then considered for a three, four and 

five year averaged alternative baseline. 

An estimated projection of the PAR 317 Inventory for various alternative baseline scenarios 

(shown below) was generated using a data set obtained by cross referencing the AQMD‟s 

Annual Emissions Reporting (AER) inventory data and Title V database and the following 

additional assumptions:

1. All sources with a potential (or permitted) to emit 25 or more tons per year of either VOC 

or NOx emissions annually and located in the portion of the SSAB that is in the 

jurisdiction of the AQMD, are major stationary sources and included in this estimate;

2. All other sources with a potential (or permitted) to emit 10 or more tons per year of either 

VOC or NOx emissions annually and located in the SOCAB (in the jurisdiction of the 

AQMD), are also major stationary sources and included in this estimate;
12

3. Sources are classified as major stationary sources based on their potential to emit or 

permitted level of emissions. However, fee amounts are based on actual emissions in the

applicable fee assessment year;

4. Actual, FY 02-03 through FY 06-07 VOC and NOx emissions data reported through the 

District‟s AER program are used as a proxy for and assumed equivalent to actual CY 

2002 through 2006 source emissions of these same pollutants, respectively;

5. Actual emissions include permitted (RECLAIM and non-RECLAIM) and non-permitted 

(fugitive) source emissions, where applicable;

6. The CPIF provides a CPI inflation based increase in the initial $5,000 per ton fee based 

on the CPI for the given assessment year for each ton of VOC and for each ton of NOx 

emitted in excess of 80% of the major stationary sources baselines for these air 

contaminants;

7. The set of major stationary sources remains static from 2006 through 2011. No new 

major stationary sources are permitted and no existing major stationary sources drop out 

of the current list (see Appendix 1) during this time period. This last assumption is 

highly unlikely so the figures presented should be regarded as one of a set of possible 

projections of CAA revenues;

8. A cyclical major stationary source is a major stationary source where the annual VOC (or 

NOx) emissions in the attainment year deviates [varies] significantly from the annual 

VOC (or NOx) emissions during the n (where n = 3, 4, or 5) consecutive years 

immediately preceding the attainment year such that, the outcome of the standard 

Students “t-Test” results in a rejection of the null hypothesis that the baseline year VOC 

(or NOx) emissions and the n (where n = 3, 4, or 5) consecutive years immediately 

preceding the attainment year VOC (or NOx) emissions values is equal to zero (0), within 

a 95% level of confidence. A major stationary source that has cyclical annual emissions 

of either VOC, or NOx, or both is, for the purposes of this rule, defined as a cyclical 

major stationary source. A further explanation of the “t-Test” methodology is given in 

Appendix 2 of this report; and

9. In order to make the analysis rigorous, only sources with complete emissions data for the 

chosen averaging period were used. For the proxy SOCAB baseline attainment year (FY 

06-07) there were 509 sources with complete data. For the three, four and five year 

average there were 450, 427, and 401 sources with complete emissions data, respectively.

[Note – this analysis was done for benchmarking and estimation purposes. The results obtained 

will likely not be representative of actual emissions or fees. It cannot be determined, a priori, 

what actual results will be in the 2007 to 2010 time frame.]

Table 6 shows five possible scenarios for determining the baseline for an existing major 

stationary source and the resultant estimated fee revenues for each scenario. Fee revenues are 

estimated for each scenario based on 3, 4 and 5 years worth of annual emissions data. Moving

down each year n column (n = 3, 4 or 5), the fee revenue for each scenario is also compared to 

the fee revenue in Scenario 1, the single attainment year baseline (either 2007 for sources in the 
13

SSAB or 2010 for sources in the SOCAB). The comparison is provided as the total percentage 

reduction in revenues for a scenario as compared to the single year baseline revenue for all major 

stationary sources. Fee revenues for Scenario 1 are constant since there is no averaging of 

emissions. Scenario 2 through 5 are ranked in order of the decreasing revenues except for 

Scenario 5, which was only recently added. Both Scenario 4 and 5 are likely not feasible since 

they also allow averaging by non-cyclical sources. 

Scenario 3, would allow a cyclical source the option of using either the single attainment year or 

alternatively the multi-year averaged emissions for either the 3, 4 or 5 years immediately 

preceding the attainment year as the baseline. Table 6 shows that regardless of the number of 

years used for averaging emissions Scenario 3, results in higher loss of the revenues, as 

compared to Scenario 2. This is due to the fact that under Scenario 3 the source may choose 

(subject to passing a “t”-Test analysis) whether to be a cyclical source or not, whereas under 

Scenario 2 a source is automatically designated as either cyclical or non-cyclical based on 

emissions data provided to the SCAQMD thorough the SCAMQD Annual Emissions Reporting 

(AER) program.

For comparative analysis, Scenario 1 and 3 largely mirror staff‟s rule proposals Option A and 

Option B, respectively. It must be noted for any scenario using an alternative baseline, prior year 

emissions would have to be adjusted for future effective regulatory programs. That adjustment 

has not been made in these analyses.

Option C is not represented in any of the Scenarios. Option C requires a case-by-case analysis 

that is not amenable to aggregate analysis. Staff anticipates that in all scenarios, Option C will 

significantly reduce the fee revenue.
14

Table 6: PAR 317 - Analysis of Various Baseline Scenarios and Resultant Estimated CAA Non-Attainment Fee Revenues for Major 

Stationary Sources (MSS)

3 Year Average 4 Year Average 5 Year Average

a) MSS with complete AER FY 06-07 data 509

$35.4M

509

$35.4M

509

$35.4M

b) Sources with complete AER emissions data for all years averaged: 450 100% 427 100% 401 100%

Cyclic Sources 160 36% 202 47% 223 56%

Non-Cyclic Sources 290 64% 225 53% 178 44%

Scenario 1: All sources use their 2006 single year emissions as baseline $31.1M 0% $30.6M 0% $29.6M 0%

Scenario 2: If cyclical must use averaged emissions baseline $28.9M -7% $27.7M -9% $26.6M -10%

Scenario 3: If cyclical use higher of 2006 single year or averaged emissions baseline $26.6M -14% $24.4M -20% $22.8M -23%

Scenario 4: All sources use higher of 2006 single year or averaged emissions baseline $22.3M -28% $20.7M -32% $20.0M -33%

Scenario 5: All sources must use averaged emissions baseline $26.4M -15% n/a n/a n/a n/a

Sources with (2006 Baseline > Averaged Baseline) 180 40% 156 37% 139 35%

c) Estimated projected revenue reductions for scenarios above:

Scenario 1: All sources use their 2006 single year emissions as baseline $0.0M $0.0M $0.0M

Scenario 2: If cyclical must use averaged emissions baseline $2.2M $2.9M $3.0M

Scenario 3: If cyclical use higher of 2006 single year or averaged emissions baseline $4.4M $6.2M $6.8M

Scenario 4: All sources use higher of 2006 single year or averaged emissions baseline $8.7M $9.9M $9.6M

Scenario 5: All sources must use averaged emissions baseline $4.7M n/a n/a
15

Table 7 and Table 8 show the top ten cyclical major stationary sources (by four digit SIC code) 

that would be impacted by an alternative mandatory five (5) year averaged baseline as compared 

to a single attainment year baseline (Scenario 2). Not that some cyclical sources will pay less in 

CAA non-attainment fees while others will pay more.

Table 7 – Top 10 Cyclic Major Stationary Sources That Will Pay Less CAA Non-Attainment 

Fees Under Scenario 2

SIC Major Stationary Source Facility

Id

Fees with 2006 

Baseline

Fees with 5

Year Averaged 

Baseline

Savings

2911 CHEVRON PRODUCTS CO. 800030 $2,705,858 $842,829 $1,863,029

3241 CALIFORNIA PORTLAND 

CEMENT CO (NSR USE) 800181 $1,458,272 $534,159 $924,113

2911 BP WEST COAST PROD.LLC BP 

CARSON REF. 131003 $2,118,987 $1,256,889 $862,098

2911 CONOCOPHILLIPS COMPANY 800362 $844,716 $542,547 $302,169

4226 KINDER MORGAN LIQUIDS 

TERMINALS, LLC 800057 $164,726 $0 $164,726

4953 COMMERCE REFUSE TO 

ENERGY FACILITY 37336 $154,770 $26,413 $128,357

3312 TAMCO 18931 $129,799 $5,193 $124,606

3221 OWENS-BROCKWAY GLASS 

CONTAINER INC 7427 $116,367 $19,068 $97,299

4952 ORANGE COUNTY SANITATION 

DISTRICT 29110 $193,106 $106,633 $86,473

3792 CUSTOM FIBERGLASS MFG 

CO/CUSTOM HARDTOP 7949 $108,915 $24,421 $84,493
16

Table 8 – Top 10 Cyclic Major Stationary Sources That Will Pay More CAA Non-Attainment 

Fees Under Scenario 2

SIC Major Stationary Source Facility 

Id

Fees with 2006 

Baseline

Fees with 5 

Year Averaged 

Baseline 

Loss

2911 ULTRAMAR INC (NSR USE 

ONLY) 800026 $854,544 $1,240,826 ($386,282)

4922 SO CAL GAS CO (EIS USE) 800128 $529,718 $796,542 ($266,824)

2911 CONOCOPHILLIPS COMPANY 800363 $1,659,268 $1,847,716 ($188,448)

2911 PARAMOUNT PETR CORP (EIS 

USE) 800183 $445,365 $623,024 ($177,659)

5171 EXXONMOBIL OIL 

CORPORATION 800171 $120,744 $279,173 ($158,429)

8071 QUEST DIAGNOSTICS INC 82657 $82,831 $225,893 ($143,062)

4911 LA CITY, DWP VALLEY 

GENERATING STATION 800193 $158,437 $287,857 ($129,420)

9199 LONG BEACH CITY, SERRF 

PROJECT 44577 $615,504 $741,282 ($125,778)

4953 O C WASTE & RECYCLING 50418 $101,870 $212,519 ($110,648)

2011 CLOUGHERTY PACKING 

LLC/HORMEL FOODS CORP 16978 $66,872 $173,619 ($106,746)

Further analysis also reveals that certain industry groups (by two digit SIC code) would in the 

aggregate pay less in CAA non-attainment fees under Scenario 2 where cyclical sources would 

use an averaged baseline, while others would pay more. This may occur in the baseline year and 

beyond because within an industry grouping some cyclical sources using an averaged baseline 

may pay higher CAA non-attainment fees, since emissions in their single baseline attainment 

year are higher then in the previous years being used in an averaged baseline. Averaging a single 

highest emissions year with lower emissions years will always result in an averaged emissions 

baseline that is lower than the highest single year emissions baseline. Table 9 shows the net 

aggregate savings/(loss), using five (5) year averaged data versus a single attainment year 

baseline, by industry grouping showing the effect of summing revenue increase and decreases for 

all the sources within an industry grouping.
17

Table 9: Cyclical Major Stationary Sources with Net Savings/(Loss) in CAA Non-Attainment 

Fees for Scenario 2 by SIC Code Grouping 

SIC Code Grouping

Combined Grouping 

Resultant Net 

Savings/( Loss)

29-- Petroleum Refining & Related Industries $2,268,691 

32-- Stone, Clay, Glass & Concrete Products $1,192,658 

27-- Printing, Publishing & Allied Industries $289,666 

42-- Motor Freight & Warehousing $203,984 

33-- Primary Metal Industries $186,716 

37-- Transportation Equipment $180,495 

25-- Furniture & Fixtures $99,702 

23-- Apparel & Other Finished Products of Fabrics & Similar Materials $34,055 

46-- Pipelines, Except Natural Gas $31,072 

24-- Lumber & Wood Products, Except Furniture $30,568 

79-- Amusement & Recreation Services $29,632 

39-- Miscellaneous Manufacturing Goods $27,499 

36-- Electronic & Other Electrical Equipment & Components $14,550 

26-- Paper & Allied Products $13,462 

47-- Transportation Services $6,259 

45-- Transportation by Air $4,951 

75-- Automotive Repair, Services & Parking $2,532 

50--Wholesale-Durable Goods ($3,472)

82-- Educational Services ($9,938)

30-- Rubber & Miscellaneous Plastics Products ($11,089)

20-- Food & Kindred Products ($12,034)

76-- & 78-- Miscellaneous Repair Services ($12,791)

28-- Chemicals & Allied Products ($16,814)

38-- Measuring, Analyzing & Controlling Instruments; Photographic Goods; Watches & Clocks ($53,505)

94--, 96-- & 97-- Public Administration ($115,308)

34-- Fabricated Metal Products, Except Machinery and Transportation Equipment ($116,234)

91-- Executive, Legislative & General Government, Except Finance ($125,778)

13-- Oil & Gas Extraction ($143,701)

80-- Health Services ($177,091)

51-- Wholesale Trade - Non-Durable Goods ($188,443)

49-- Electric, Gas & Sanitary Services (EGFs) ($602,335)

Staff has continued to research various scenarios for baseline determination. Two additional 

scenarios were analyzed that provided for the use of the two highest consecutive emission years 

within the last five years. Those scenarios are presented below. In scenario 6, only cyclic 

sources may use the two highest years while in scenario 7, all sources may use the two highest 

years.
18

Baseline Emissions Option

Projected 

CAA Fee

Revenue

(Millions $)

CAA Fee 

Revenue Loss 

Compared to 

Option A

Scenario 6 – ALL CYCLICAL sources MAY use the higher of either, 

the 2010 single attainment year, or the average of the 2 highest 

consecutive years in the 5 year period immediately preceding the 

attainment year (2006-2010); all non-cyclical sources will use the 2010 

single attainment year as baseline

23 -35%

Scenario 7 – ALL sources MAY use the higher or either, the 2010 

single attainment year, or the average of the 2 highest consecutive 

years in the past 5 year period immediately preceding the attainment 

year (2006-2010)

19.5 -55%

CALCULATING CAA NON-ATTAINMENT FEES

Air basins under the jurisdiction of the AQMD are defined in PAR 317 and must be in 

compliance with the both the federal one-hour (for the purposes of this rule) and current eighthour standard for ozone by a specific date, the attainment date, as shown in Table 1. For air 

basins that are not in attainment by the attainment date, section 185(a) of the CAA mandates that 

a fee be assessed to major stationary sources located in those air basins for each excess ton of 

both VOC and NOx emissions as further defined in Section 185(b) of the CAA. For the 

purposes of PAR 317 this is defined as a CAA non-attainment fee. However, in PAR 317, 

before the fee is actually assessed the Administrator of the U.S. EPA or the AQMD Executive 

Officer must find the basin (either the SOCAB or the SSAB) is not in attainment with the federal 

one-hour standard for ozone.

This CAA non-attainment fee is computed based on emissions of VOC and NOx that are in 

excess of eighty percent of the baseline VOC and NOx emissions, calculated separately for each 

air contaminant, as follows: 

For sources subject to this rule prior to the attainment year, the baseline emissions shall be the 

amount of the actual emissions during either the attainment year or the average of the five (5) 

consecutive years immediately preceding the attainment year that do not exceed the permitted 

allowables.

For sources subject to this rule during or after the attainment year:

(i) For a non-RECLAIM major stationary source the baseline emissions shall be the 

amount of emissions allowed under the applicable implementation plan (the permitted 

annual emissions levels). 

(ii) For an existing RECLAIM facility that subsequently qualifies as a major stationary 

source for the purposes of this rule the baseline emissions shall be the higher of the 
19

RTC holdings at the beginning of the year the source becomes a major stationary 

source that do not exceed the RTC holdings at the end of the reconciliation period.

(iii) For a new RECLAIM facility that qualifies as a major stationary source for the 

purposes of this rule the baseline emissions shall be the higher of the RTC credits 

purchased at the beginning of the attainment year or initial year of operation, as 

applicable, or actual emissions, not to exceed RTC holdings at the end of the 

reconciliation period.

Beginning with the year after the attainment year, and each year thereafter (fee assessment year) 

and until the Administrator of the U.S. EPA designates the air basin to be in attainment of the 

federal one-hour standard for ozone, both the VOC and NOx annual CAA non-attainment fees 

shall be assessed for all major stationary sources. It should be noted an extension of the 

assessment year could be granted in accordance with Section 185(c) of the CAA provided certain 

conditions are met including there is no more than 1 exceedance of the national ambient air 

quality standard level for ozone in the area in the year preceding the extension year. This 

condition was not achieved for the SSAB and undoubtedly will not be achieved in the SOCAB in 

2010. Therefore, staff has not included this option in PAR 317. 

CAA non-attainment fees will be billed and due in the year immediately following the 

assessment year in accordance with the annual emissions fee billing requirements as established 

in Rule 301(e)(10). A major stationary source that does not pay any or all of the required CAA 

non-attainment fees, by the specified due date, shall be subject to the late payment surcharge and 

permit revocation provisions of Rule 301(e)(10). For major stationary sources in the SSAB the 

calendar year for baseline emissions is 2007, the first assessment year is 2008 and the first year 

for remittance is 2009. For major stationary sources in the SOCAB the calendar year for 

baseline emissions is 2010, the first assessment year is 2011 and the first year for remittance is 

2012. 

A source qualifies as a major stationary source based on its PTE of VOC or NOx emissions (in 

tons per year) or for RECLAIM facilities as defined in paragraph (b)(2) of Rule 3001 -

Applicability. CAA non-attainment fees for a major stationary source however, are assessed 

based on actual annual emissions from the source. A fee for each ton of VOC and for each ton 

of NOx emissions over eighty percent of the baseline emissions of the major stationary source is 

assessed. This CAA non-attainment fee is assessed at a CPI adjusted rate of $5,000 per ton for 

each excess ton of VOC and for each excess ton of NOx in the assessment year(s). The CPI 

adjustment factor is based on the cumulative increase in the CPI from 1989 through to the 

assessment year in accordance with Section 185(b)(3) of the CAA and based on the index as 

specified in Section 502(b)(3)(B)(v).

Rule 317 fees will be collected concurrently with the Annual Emissions Reporting (AER) filings. 

AER is based on calendar year emissions and filings.

The PAR 317 VOC CAA non-attainment fee for each major stationary source is computed based 

on the following formula:

Annual VOC CAA non-attainment fee = $5,000 x CPIF x [ A – ( 0.8 x B ) ], and
20

The PAR 317 NOx CAA non-attainment fee for each major stationary source is computed based 

on the following formula:

Annual NOx CAA non-attainment fee = $5,000 x CPIF x [ D – ( 0.8 x E ) ]

Where, 

Variable Value

Applicable Fee Assessment Year =

CY 2008 for a major stationary source in the 

SSAB and CY 2011 for a major stationary source 

in the SOCAB.

Baseline Emissions =

Emissions in the attainment year; CY 2007 for a 

major stationary source in the SSAB and CY 2010 

for major stationary source in the SOCAB, or as 

otherwise defined for sources that are not major 

stationary sources prior to the attainment year but 

become major stationary sources after the 

attainment year.

A =

The total amount of VOC emissions actually 

emitted during the applicable fee assessment year, 

in tons per year. If A is less than or equal to 80% 

of B; then there shall be no Annual VOC CAA 

non-attainment fee assessed for the subject year.

B = The VOC baseline emissions as defined in this rule 

in tons per year.

D =

total amount of NOx emissions actually emitted 

during the applicable fee assessment year, in tons 

per year. If D is less than or equal to 80% of E; 

then there shall be no Annual NOx CAA nonattainment fee assessed for the subject year.

E = The NOx baseline emissions as defined in this rule 

in tons per year.

CPIF =

The annual Consumer Price Index adjustment 

factor, beginning with the 1989 change in the 

index up to and including the change in year prior 

to the year for which the fees are due, in 

accordance with Section 502(b)(3)(B)(v) and 

185(b)(3) of the federal Clean Air Act. The CAA 

requires this CAA non-attainment fee be an 

amount equivalent to $5,000 per ton of VOC and 

$5,000 per ton of NOx emissions adjusted by the 

cumulative increase in the Consumer Price Index 

(CPI) beginning in 1989 and up to and including 

the fee assessment year. For any calendar year the 
21

CPI is the average of the CPI for all-urban 

consumers published by the Department of Labor, 

as of the close of the 12-month period ending on 

August 31 of each calendar year or the revision of 

the CPI which is most consistent with the CPI for 

calendar year 1989 in accordance with Section 

502(b)(3)(B)(v) and 185(b)(3) of the federal Clean 

Air Act.

For CY 2009, the first year in which fees may be collected for sources in the SSAB and 

the CPI year reflecting the change in the 2008 fee assessment year, the adjustment 

factor is currently projected to be 1.664 (California Department of Finance), so that:

$5,000 (in 1990 dollars) x CPIF = $5,000 x 1.664 = $8,320 (in 2009 dollars)

Currently, the following CPIF estimates are projected for CY‟s 2010 – 2012:

Fees Due in CY CPIF Adjusted Value of $5,000

2010 1.713 $8,565

2011 1.763 $8,815

2012 1.816 $9,080

Note that CPIF is not a constant and changes annually based on the annual change in 

the CPI.

The following are examples of PAR 317 CAA non-attainment fee calculations (rounded to the 

nearest dollar):

Example 1 – Non-Major Stationary Source in the SSAB; Pays No CAA Non-Attainment Fees 

Source is located in the SSAB and has a permitted VOC emissions limit (PTE) of 24 TPY 

in attainment year 2007. Source is not assessed a PAR 317 VOC CAA non-attainment 

fee in 2008 because it is not a major stationary source of VOC emissions for the purposes 

of PAR 317 (VOC PTE of 25 or more tons per year).

Source has a permitted NOx emissions limit (PTE) of 20 TPY in attainment year 2007. 

Source is not assessed a PAR 317 NOx CAA non-attainment fee in 2008 because it is not 

a major stationary source of NOx emissions for the purposes of PAR 317 (NOx PTE of 

25 or more tons per year).

Total CAA Non-Attainment Fees = Source VOC CAA Non-Attainment Fee +

(SSAB due 2010) Source NOx CAA Non-Attainment Fee

= $0 + $0 = $0
22

Example 2 – Non-Major Stationary Source in the SOCAB; Pays No CAA Non-Attainment Fees 

Source is located in the SOCAB and has a permitted VOC emissions limit (PTE) of 5 

TPY in attainment year 2010. Source is not assessed a PAR 317 VOC CAA nonattainment fee in 2011 because it is not a major stationary source of VOC emissions for 

the purposes of PAR 317 (VOC PTE of 10 or more tons per year).

Source has a permitted NOx emissions limit (PTE) of 7 TPY in attainment year 2010. 

Source is not assessed a PAR 317 NOx CAA non-attainment fee in 2011 because it is not 

a major stationary source of NOx emissions for the purposes of PAR 317 (NOx PTE of 

10 or more tons per year).

Total CAA Non-Attainment Fees = Source VOC CAA Non-Attainment Fee +

(SOCAB due 2012) Source NOx CAA Non-Attainment Fee

= $0 + $0 = $0

Example 3 – Major Stationary Source for VOC; Pays a VOC CAA Non-Attainment Fee 

(SSAB/SOCAB)

Source has a permitted VOC emissions limit (PTE) of 75 TPY in attainment year 2007 

(or 2010 if located in the SOCAB), baseline (actual) VOC emissions of 60 tons in 

attainment year 2007 (or 2010 if located in the SOCAB) or for a cyclical source has a 3 

year averaged baseline (B) and actual VOC emissions of 59 tons in assessment year 2008 

(or 2011 if located in the SOCAB) (A). Source is a major stationary source of VOCs in 

the SSAB (PTE 25 TPY) for the purposes of this rule and pays a PAR 317 VOC CAA 

non-attainment fee for 2008, due in 2009 in the amount of:

VOC CAA Non-Attainment Fee = $5,000/ton x CPIF x [ A – ( 0.8 x B ) ]

(SSAB) = $5,000/ton x 1.664 x [ 59 tons – ( 0.8 x 60 tons ) ]

= $8,320/ton x 11 tons

= $91,520

or, if source is a major stationary source of VOCs in the SOCAB (PTE 10 TPY) for the 

purposes of this rule it pays a PAR 317 VOC CAA non-attainment fee for 2011, due in 

2012 in the amount of:

VOC CAA non-attainment fee = $5,000/ton x CPIF x [ A – ( 0.8 x B ) ]

(SOCAB) = $5,000/ton x 1.816 x [ 59 tons – ( 0.8 x 60 tons ) ]

= $9,080/ton x 11 tons

= $99,880

Source has a permitted NOx emissions limit (PTE) of 5 TPY in attainment year 2007 (or 

2010 if located in the SOCAB). This source is not assessed a NOx CAA non-attainment 

fee in 2008 (or 2011 if located in the SOCAB) because it is not a major stationary source 

of NOx emissions for the purposes of PAR 317, regardless of the source location.

Total CAA Non-Attainment Fees= Source VOC CAA Non-Attainment Fee +

Source NOx CAA Non-Attainment Fee

(SSAB due 2009) = $91,520 + $0 = $91,520

(SOCAB due 2012) = $99,880 + $0 = $99,880
23

Example 4 – Major Stationary Source for VOC and NOx; Pays a VOC CAA Non-Attainment 

Fee and NOx CAA Non-Attainment Fee (SSAB/SOCAB)

Source has a permitted VOC emissions limit (PTE) of 450 TPY in attainment year 2007 

(or 2010 if located in the SOCAB), baseline (actual) VOC emissions of 420 tons in 

attainment year 2007 (or 2010 if located in the SOCAB) or for a cyclical source has a 3 

year averaged baseline (B) and actual VOC emissions of 400 tons in assessment year 

2008 (or 2011 if located in the SOCAB) (A). Source is a major stationary source of 

VOCs in the SSAB (PTE 25 TPY) for the purposes of this rule and pays a PAR 317 

VOC CAA non-attainment fee for 2008, due in 2009 in the amount of:

VOC CAA Non-Attainment Fee = $5,000/ton x CPIF x [ A – ( 0.8 x B ) ]

(SSAB) = $5,000/ton x 1.664 x [ 400 tons – ( 0.8 x 420 tons ) ]

= $8,320/ton x 64 tons

= $532,480

or, source is a major stationary source of VOCs in the SOCAB ( 10 TPY) for the 

purposes of this rule and pays a PAR 317 VOC CAA non-attainment fee for 2011, due in 

2012 in the amount of:

VOC CAA Non-Attainment Fee = $5,000/ton x CPIF x [ A – ( 0.8 x B ) ]

(SOCAB) = $5,000/ton x 1.816 x [ 400 tons – ( 0.8 x 420 tons ) ]

= $9,080/ton x 64 tons

= $581,120

Source has a permitted NOx emissions limit (PTE) of 427 TPY in attainment year 2007 

(or 2010 if located in the SOCAB), baseline (actual) NOx emissions of 400 tons in 

attainment year 2007 (or 2010 if located in the SOCAB) or for a cyclical source has a 3 

year averaged baseline (E) and actual NOx emissions of 380 tons in assessment year 

2008 (or 2011 if located in the SOCAB) (D). Source is a major stationary source of NOx 

in the SSAB (PTE 25 TPY) for the purposes of this rule and pays a PAR 317 NOx 

CAA non-attainment fee for 2008, due in 2009 in the amount of:

NOx CAA Non-Attainment Fee = $5,000/ton x CPIF x [ A – ( 0.8 x B ) ]

(SSAB) = $5,000/ton x 1.664 x [ 380 tons – ( 0.8 x 400 tons ) ]

= $8,320/ton x 60 tons

= $499,200

or, source is a major stationary source of NOx in the SOCAB ( 10 TPY) for the purposes 

of this rule and pays a PAR 317 NOx CAA non-attainment fee for 2011, due in 2012 in 

the amount of:

NOx CAA Non-Attainment Fee = $5,000/ton x CPIF x [ A – ( 0.8 x B ) ]

(SOCAB) = $5,000/ton x 1.816 x [ 380 tons – ( 0.8 x 400 tons ) ]

= $9,080/ton x 60 tons

= $544,800

Total CAA Non-Attainment Fees= Source VOC CAA Non-Attainment Fee +

Source NOx CAA Non-Attainment Fee

(SSAB due 2012) = $532,480 + $499,200 = $1,031,680
24

(SOCAB due 2012) = $581,120+ $544,800 = $1,125,920

PROPOSED AMENDED RULES

Based on extensive analysis conducted by staff, three rule proposals, Option A, Option B and 

Option C are being presented for the Board‟s consideration. 

Option A would adopt the same rule language for the SOCAB as adopted by the Governing 

Board on December 5, 2008 for major stationary sources in the SSAB by amending the 

definition of Basin currently in the rule to include the SOCAB. Currently Rule 317 is only 

applicable to major stationary source in the SSAB. Under Option A, baseline for all existing 

major stationary sources is defined as the actual source emissions of VOC/NOx (as applicable) in 

the attainment year. A major stationary source‟s emissions baseline would be determined based 

on emissions in the attainment year (2007 for the SSAB and 2010 for the SOCAB). No 

averaging or alternative baseline calculation is considered. In an effort to address concerns 

expressed regarding facilities with significant year to year variability in emissions, and with 

guidance and input form the Board, staff developed alternative options B and C. 

Option B would allow a source, on an elective basis, to petition the Executive Officer to be 

classified as a cyclical source by submitting a plan demonstrating it is cyclical. The plan must 

include the application of the statistical “t-Test” method, as described in Appendix 2 of this staff 

report, demonstrating that a source has cyclical emissions after a downward adjustment of 

emissions to account for any/all adopted local, state and federal rules or regulations that would 

have restricted the sources ability to both operate or emit a particular pollutant that existed 

during the five (5) consecutive years immediately preceding the attainment year for which the 

demonstration of cyclical operations/emissions is being made. The same downward adjusted 

average emissions from the five (5) consecutive years immediately preceding the attainment year 

must also be used to calculate the alternative VOC/NOx emissions (as applicable) baseline. Staff 

has revised it‟s earlier proposal to expand the years for determining an alternative baseline from 

three years prior to the attainment year to five years prior to the attainment year. Staff believes 

that this time frame provides a better balance between normal and recessionary economic 

environments so as to not skew emissions toward recessionary years. A five year window also 

provides more of a complete picture of a source‟s emissions and the longer averaging time will 

also provide for a more robust data set for analysis.

A cyclical source is defined as major stationary source where the annual VOC (or NOx) 

emissions in the attainment year deviates [varies] significantly from the annual VOC (or NOx) 

emissions during the five (5) consecutive years immediately preceding the attainment year such 

that, the outcome of the standard Students “t-Test” results in a rejection of the null hypothesis 

that the baseline year VOC (or NOx) emissions and the five (5) consecutive years immediately 

preceding the attainment year VOC (or NOx) emissions values is equal to zero (0), within a 95% 

level of confidence. A major stationary source that has cyclical annual emissions of either VOC, 

or NOx, or both is, for the purposes of this rule, defined as a cyclical major stationary source. 

For sources that begin initial operation during or subsequent to the attainment year, the baseline 

emissions include unpermitted and fugitive emissions emitted during the time period the facility 
25

is operational extrapolated (prorated) over one full calendar year. An existing major stationary 

source that is determined to be non-cyclical, or that does not opt to submit a plan for 

consideration as a cyclical source, would use the single attainment year emissions as the 

baseline. Once established, the baseline is fixed.

Option C would allow a source to use the average of any two consecutive years within the last 

ten years prior to and including the applicable attainment year as baseline if, the source files a 

plan certifying that it has emissions which are “cyclical, irregular or otherwise vary significantly 

from year to year” within the 10 year period. This option was crafted to closely mirror U.S. EPA 

guidance as provided in the form of a memo by William T. Harnett, dated March 21, 2008 and 

specific language in section 185(b) of the CAA. While this option allows for a ten year look 

back it also requires that emissions be discounted to recognize mandated reductions as 

recommended by U.S. EPA guidance. Emissions must be adjusted downward to account for 

any/all adopted local, state and federal rules or regulations that would have restricted the sources 

ability to both operate or emit a particular pollutant had they been in effect during the two years 

being averaged must be used for calculating the optional baseline. Option C does not require a 

source to use this optional baseline but, a plan must be submitted for such consideration and at a 

minimum must include all the following:

1. Certification by a source representative that based on the plan submitted the source 

emissions for the ten year time frame are in fact cyclical, irregular or vary 

significantly from year to year. 

2. Sufficiently detailed analysis in the plan of adopted local, state, and federal rules or 

regulations that would have restricted the sources ability to either operate or emit a 

particular pollutant had they been in effect during the consecutive two (2) years 

selected;

3. Reporting of the calculated optional baseline, using downward adjusted/discounted

emissions corrected for any/all adopted local, state and federal rules or regulations 

that would have restricted the sources ability to both operate or emit a particular 

pollutant had they been in effect during the selected time frame.

Option C also includes a “Clean Unit” or Best Available Control Technology (BACT) Permit 

Unit emissions exemption. A BACT Permit Unit is defined as a permit unit that has an emission 

rate or limitation that meets or exceeds the requirements of Health and Safety Code 40405 as of 

December 31, 2010, or the date the permit to construct for the unit was issued, whichever is later. 

Emissions from permitted units with BACT may be excluded from the calculation of CAA nonattainment fees. A plan approval is also required for this relief and must include an analysis of 

the uncontrolled and controlled emissions from the permit unit for the year(s) under 

consideration. 

Plans must be filed in accordance with the fee provisions of Rule 306 including all of the 

required information on or before the later of March 31, 2011 or March 31 of the year following 

the initial attainment year for a BACT permit unit exemption or an alternative baseline period. 

Sources that are not deemed to have cyclical, irregular or otherwise vary significantly from year 

to year must use the emissions in the attainment year as baseline. No guarantee is provided that 
26

review of a plan filing shall constitute acceptance by the District of the source‟s petition to 

exempt a clean permit unit or alternative baseline unless and until such time that a plan submitted 

by the source is so approved by the Executive Officer. Furthermore, should the Administrator of 

the U.S. EPA find that the fee provisions of Option C, do not meet the fee requirements of 

Section 185, or the SCAQMD is not administering and enforcing the fee as required, unpaid fees 

required plus interest required under Section 185 as specified in 26 United States Code 

§6621(a)(2) may be collected by the Administrator. Option C, shall become inoperative at such 

time as the U.S. EPA approves an equivalent program submitted by the District or Congress 

amends the Clean Air Act such that Section 185 fees, or an equivalent program, are no longer 

required.

CAA NON-ATTAINMENT FEES REVENUE

CAA Non-Attainment fee revenues will be used for air quality improvement programs. While 

the CAA does not specify how CAA Non-Attainment fee revenues should be utilized the 

Governing Board has directed staff to include language in the adopting resolutions for this rule 

stipulating that fee revenue be used in a manner that promotes improvement in air quality above 

and beyond what is expected of the already adopted rules and regulations and/or specified short 

term AQMD control measures (i.e. emission reductions must be surplus). Such air quality 

improvement efforts may include but are not limited to, allowing facilities and industry remitting 

such fees to invest such fees in air pollution control efforts within their facility fence lines and/or 

their surrounding communities, and advancing the state of pollution control technology. The 

Governing Board has further directed staff to prioritize the use of the Clean Air Act nonattainment fees remitted to the District for each facility remitting fees in the following order: (1) 

use within the facility; (2) use in the community adjacent to the facility; (3) use within another 

facility under common ownership; and (4) other uses to reduce emissions. In addition, the 

Governing Board has also further directed staff to present an analysis when presenting prepared 

projects for the Board‟s approval demonstrating how the proposed expenditure complies with 

these provisions and to solicit input from affected stakeholders and other interested parties in 

developing the guidelines, and report back to the Governing Board in calendar year 2009.

CALIFORNIA ENVIRONMENTAL QUALITY ACT

SCAQMD staff has reviewed the proposed project pursuant to CEQA Guidelines §15002 (k)(1), 

the first step of a three-step process for deciding which document to prepare for a project subject 

to CEQA. The proposed project was determined to be exempt by statute because the project is 

mandatory pursuant to the federal Clean Air Act. The SCAQMD has also determined that the 

proposed project is exempt since it can be seen with certainty that there is no possibility that the 

proposed project in question has the potential to have a significant adverse effect on the 

environment. Therefore, the SCAQMD has determined that the proposed project is exempt from 

CEQA pursuant to CEQA Guidelines §15061 (b)(1) – Review for Exemption (Exemption by 

Statute), CEQA Guidelines §15061 (b)(3) - Review for Exemption (General Rule Exemption), 

and CEQA Guidelines §15268 (b)(1) – Ministerial Projects. If approved, a Notice of Exemption, 

prepared pursuant to CEQA Guidelines §15062 - Notice of Exemption, will be sent to the county 

clerks for each county in the district for filing.
27

DRAFT FINDINGS

Health and Safety Code Section 40727 requires that prior to adopting, amending or repealing a 

rule or regulation, the AQMD Governing Board shall make findings of necessity, authority, 

clarity, consistency, non-duplication, and reference based on relevant information presented at 

the hearing. The draft findings are as follows:

Necessity - The AQMD Governing Board has determined that a need exists to adopt Rule 317 –

Clean Air Act Non-Attainment Fees to comply with the requirements of the 1990 amendments to 

the Federal Clean Air Act.

Authority - The AQMD Governing Board obtains its authority to adopt, amend, or repeal rules 

and regulations from Health and Safety Code Sections 39002, 40000, 40001, 40440, 40702, and 

41508 and Section 182(d), 182(e), 182(f) and 185 of the 1990 amendments to the Federal Clean 

Air Act.

Clarity - The AQMD Governing Board has determined that Rule 317 – Clean Air Act NonAttainment Fees is written and displayed so that the meaning can be easily understood by 

persons directly affected.

Consistency - The AQMD Governing Board has determined that the adoption of Rule 317 –

Clean Air Act Non-Attainment Fees is in harmony with, and not in conflict with or contradictory 

to, existing statutes, court decisions, federal or state regulations.

Non-Duplication - The AQMD Governing Board has determined that the adoption of Rule 317 

– Clean Air Act Non-Attainment Fees does not impose the same requirement as any existing 

state or federal regulation, and the proposed amendments are necessary and proper to execute the 

powers and duties granted to, and imposed upon, the AQMD.

Reference - In adopting the Rule, the AQMD Governing Board references the following statutes 

which the AQMD hereby implements, interprets or makes specific: Health and Safety Code 

Sections 40001 (rules to achieve ambient air quality standards), 40440(a) (rules to carry out the 

Air Quality Management Plan), and Sections 181, 182 and 185 of the 1990 amendments to the 

Federal Clean Air Act.

CONCLUSIONS and RECOMMENDATIONS

PAR 317 should be amended to comply with requirements set forth in the 1990 amendments to 

the Clean Air Act and also to implement control measure MCS-08 of the 2007 Air Quality

Management Plan for major stationary sources sin the SOCAB. Staff has presented three options 

(Option A, Option B and Option C) for the Board‟s consideration.

Option A would extend the provisions of the current Rule 317 to major stationary sources in the

SOCAB. Option A does not provide any alternative method for determining baseline and all 

existing major stationary sources must use the single attainment year emissions as the baseline.
28

Option B was developed in an effort to address concerns expressed by facilities with significant 

year-to-year variability in emissions. Option B, provides a five (5) year averaged alternative 

baseline for sources that wish to submit a plan, petitioning the Executive Officer to make a 

demonstration that the source is cyclical. The plan must include a demonstration that the source 

has cyclical, irregular or otherwise widely varying annual emissions of VOC/NOx as applicable, 

based on the outcome of a “t-Test” (see Appendix 1). The source must use downward adjusted 

emissions taking into account any/all adopted local, state and federal rules or regulations that 

would have restricted the sources ability to both operate or emit a particular pollutant that existed 

during the five (5) consecutive years immediately preceding the attainment year, for which the 

demonstration of cyclical operations/emissions is being made. The same downward adjusted 

data used to demonstrate that a source is cyclical would have to be used to calculate the five (5) 

year averaged alternative baseline. Existing non-cyclical major stationary sources would have to 

use the single attainment year as the baseline. This alternative will provide a number of cyclical 

sources with reduced CAA non-attainment fees based on a recognition that their emission are 

better represented by an averaged baseline, while not allowing these same sources to double 

count emissions. 

Option C while the most resource intensive for both sources and District staff, provides for an 

alternative baseline based on language from the “Harnett Memo” referenced herein and Section 

185 of the CAA. It allows sources to submit a plan requesting a baseline derived from the 

average of two out of the ten years prior to and including the attainment year. The same 

emissions, discounted for any/all mandated emissions reductions which would have occurred 

from later-adopted rules, had they been in effect during the years selected for averaging, must be 

used in calculating the alternative averaged baseline. In addition, it allows sources a clean 

permit unit exemption, excluding emissions from permitted units with BACT from the 

calculation of CAA non-attainment fees due. A plan must be filed for consideration by the 

Executive Officer for both the alternative optional baseline and the Clean Unit exemption. 

While Option C provides the greatest flexibility in determining baseline emissions, certain 

flexibility provisions of the proposal, such as the “Clean Unit” exemption, are yet to be approved 

by U.S. EPA. Therefore, the proposal includes language that alerts the impacted facilities that in 

the event the Administrator of the U.S. EPA finds that the fee provisions of this rule option are 

deficient in terms of meeting the requirement of the CAA or U.S. EPA, unpaid fees plus accrued 

interest may be collected by the Administrator pursuant to CAA provisions. Should the U.S.

EPA approve an equivalent program submitted by the District or Congress amends the Clean Air 

Act such that Section 185 fees, or an equivalent program, are no longer required, this rule option 

would become inoperative.
29

COMMENTS and RESPONSE to COMMENTS

Up to and including the December 5, 2008 Public Hearing

Comment: Delay the current proposed December rule adoption hearing for a few months in 

order to allow for consideration of anticipated new guidance from U.S. EPA.

Response: There is currently a facility in the Riverside county portion of the Salton Sea Air 

Basin (SSAB) (in the District‟s jurisdiction) with a 2007 attainment year, a 2008 

assessment year and with CAA non-attainment fees due in 2009 and any new 

major stationary source that might currently be permitted in the SSAB area would 

also be subject to these CAA provisions. The CAA requires that provisions to 

implement the CAA non-attainment fees be adopted and submitted for inclusion

in the State Implementation Plan by December 31, 2000 (42 U.S.C. §175A(d)(3)). 

If the CAA non-attainment fee is considered a contingency measure to back up 

the “black box” for the one-hour ozone standard, it should have been submitted 

three years before it was to go into effect (42 U.S.C. §175A(e)(5)). It is 

imperative that at a minimum a rule be adopted prior to 2009 in order to satisfy 

the requirement of the CAA that, such a rule is actually in place. In addition, 

because of the rule making timeline it would not be an efficient use of resources 

to bifurcate the rule based on air basins. This would result in a duplication of rule 

development efforts with a significant drain on District resources. If significant 

U.S. EPA policy is forthcoming in the future the District will have the opportunity 

to revisit an amendment.

Comment: The AQMD should consider alternative methods for establishing the baseline for 

a major stationary source in PAR 317 that allows for averaging over multiple 

years or on a rolling average. The U.S. EPA has issued a guidance memo on this 

subject and the San Joaquin Valley Unified Air Pollution Control District 

(SJVUAPCD) has adopted a CAA non-attainment fee rule with an alternative 

method for establishing the baseline.

Response: Section 185(b)(2) does allow for U.S. EPA to issue guidance for an alternative 

baseline determination for a major stationary source “if that source‟s emissions 

are irregular, cyclical, or otherwise vary significantly form year to year”. 

However, under such a provision a major stationary source would have to clearly 

demonstrate that it meets these criteria. Furthermore, while the SJVAPCD has 

adopted a rule with such an averaging provision it has not been approved into the 

SIP by the U. S. EPA. The only SIP approved rule promulgating section 185 of 

the CAA is one adopted by an agency which does not contain an averaging 

provision. In addition, both the CAA and guidance issued by the U.S. EPA 

require that the baseline for a major stationary source be a set number based on 

the source‟s historical (pre-attainment year) emissions. The baseline for a major 

stationary source could therefore not be based on any rolling average of post 

attainment years or initial years of operation after the attainment year. However,

staff is proposing for the Board‟s consideration an option which would allow 
30

cyclical source to use the average three years preceding the attainment year as the 

baseline and an option allowing sources to use the average of two consecutive 

years out of ten.

Comment: How is the baseline for an existing major stationary source subject to the 

provisions of PAR 317 on or before the attainment year determined?

Response: Section 185(b)(2) of the CAA provides that the baseline shall “ be the lower of 

the amount of actual VOC [and NOx] emissions (“actuals”) or VOC [or NOx] 

emissions allowed under the permit applicable to the source.” A source may not 

have a baseline based on actual emissions if the actual emissions exceed the 

allowed emissions for the source.

Comment: How is the baseline for a new major stationary source that becomes subject to the 

provisions of PAR 317 after the attainment year determined?

Response: Section 185(b)(2) of the CAA provides that the baseline shall be “if no such 

permit has been issued for the attainment year, the amount of VOC [and NOx] 

emissions allowed under the applicable implementation plan (“allowable”) during 

the attainment year” which is the source‟s potential to emit.

Comment: My source has fugitive (or unpermitted) emissions that qualify it as a major 

stationary source and my permitted emissions are less than the fugitives (or 

unpermitted) emissions. The rule reads that actual emissions cannot exceed 

permitted emissions. Would that mean that my baseline would be based on just

my permitted emissions and not include my fugitive (or unpermitted) emissions?

Response: No. The phrase “actual emissions not to exceed permitted” only applies to 

permitted sources. Baseline emissions include unpermitted, fugitive, and 

permitted emissions. Only that latter category is limited to emissions not to 

exceed permitted allowables. Otherwise, sources could violate their emissions 

limitation to inflate their baseline.

Comment: My actual emissions have historically been below the PAR 317 PTE amount and I 

do not anticipate reaching this level in the future. Can I have my PTE lowered to 

below the PAR 317 attainment threshold to reflect this?

Response: A source may agree to an enforceable condition in their Permit to Operate to limit 

their emissions below the applicable threshold. However, any subsequent 

emission increase may involve a full NSR analysis of the source including BACT 

and offsets. At this time it is unclear if U.S. EPA would accept an emissions cap 

solely for the purposes of this rule without NSR implementation. 

Comment: RECLAIM major stationary sources should receive credit for the programmatic 

emissions reductions already achieved.

Response: There is no provision in the CAA for such a programmatic credit.

Comment [c1]: State here how R317 defines 

such baselines
31

Comment: Major stationary sources within the same industry and under common ownership 

should be allowed to “bubble” or average aggregate emissions for the purposes of 

establishing a baseline and CAA non-attainment fee assessments.

Response: There is no provision in the CAA for such an averaging provision. The CAA is 

specific in that the provisions apply to specific sources or facilities. Sources in 

the AQMD are distinguished by a unique AQMD facility identification number.

Comment: What will AQMD do with the fees generated by PAR 317?

Response: While the CAA is silent on the use of fees collected under PAR 317, the goal of 

the AQMD is to apply these funds to air quality improvement programs that will 

result in the greatest overall benefits and emissions reductions on a case by case

basis. Currently, it is anticipated that the most cost effective stationary source 

emissions reductions programs will receive priority funding. Language has been 

included in PAR 317 that stipulates the fees collected, less no more than five 

percent administrative costs shall be used for air quality improvement projects in 

the AQMD. Further, language has been added to require that a procedure 

approved by the Governing Board or its designee be developed for the selection 

of and distribution of funds for air quality improvement programs. Staff 

anticipates the draft procedures to be developed and presented to the Governing 

Board within the first half of 2009 and would welcome any suggestions from the 

impacted industries and other interested parties.

Comment: PAR 317 Fees should be directly re-invested in the facilities/sources that pay the 

fees.

Response: The District‟s intent, which we believe is consistent with Section 185 of the CAA 

for the fees imposed, is that such fees should be applied to emissions reductions 

that will bring the Basin(s) into compliance with air quality standards as 

expeditiously as possible. Currently, it is anticipated that any/all 

sources/programs would be eligible to receive CAA funds for emission reduction 

projects based on the air quality improvement program(s) cost effectiveness. If a 

major stationary source has the most cost effective proposal then it may very well 

receive funding for the project. Staff has incorporated, at Governing Board 

direction, a resolution that the use of fee revenue shall be prioritized in this order 

– for use at the source, for use in the community adjacent to the source, for use at 

another source under common ownership, and clean air projects. Sources that 

have air pollution control projects can apply for the use of the fee revenue that 

was remitted.

Comment: Exclude emissions from equipment with BACT when calculating the CAA nonattainment fee amount.

Response: Although there is no provision in the CAA for such an exemption or credit, staff 

is including this provision in Option C. The CAA is very specific in requiring 

emissions reductions beginning in the attainment (or initial year of operation if the 

source becomes subject to PAR 317 after the attainment year) in which the 

facility becomes subject to PAR 317. A clean unit provision was included in a 
32

rule from another California air district. That provision was cited by U.S. EPA as 

a cause for concern and the rule has not been SIP approved.

Comment: Exclude any emissions from electrical generating facilities/sources when 

calculating PAR 317 CAA non-attainment fees, if a system emergency has been 

declared.

Response: There is no provision in the CAA for such an exemption.

Comment: Allow for the surrender of RTCs or ERCs in order to defray a sources CAA nonattainment fees.

Response: The CAA mandates specific emission reductions in order to move towards 

attainment with air quality standards or payment of CAA non-attainment fees. 

There is currently no methodology for assessing the equivalency of 

RTCs/STERCs/ERCs to assessed CAA non-attainment fees.

Comment: Credit should be given for AER and other emissions fees already being paid by 

sources.

Response: We do not believe this would be consistent with the intent of the CAA which is 

that CAA non-attainment should be independent of and in addition to any other 

source fees to encourage emission reductions past the attainment date in order to 

more expeditiously attain stationary source standards.

Comment: PAR 317 may have unintended consequences by causing operators to flare 

digester gas or landfill gas rather than use it to generate power as flaring is a less 

polluting alternative. This would increase green house gas emissions.

Response: Staff does not anticipate a shift from utilizing landfill and digester gas from power 

generation to flaring. Such a shift would involve a write-off in current assets as 

well as forgoing the revenue stream from the sale of electrical power. Moreover, 

most sources are under contract to deliver the power generated from digester or 

landfill gas. Staff anticipates sources will seek the most cost effective approach to 

reduce emissions.

Comment: I am still confused about whether I am paying a NOx CAA non-attainment fee, a 

VOC CAA non-attainment fee, or both.

Response: The rule language has been modified to clarify that a facility may have to pay a 

NOx CAA non-attainment fee, a VOC CAA non-attainment fee, or both 

depending on whether the source is a major stationery source for NOx, a major 

stationary source for VOC, or a major stationary source for both NOx and VOC.

Subsequent to the December 5, 2009 Public Hearing and including the Public Consultation 

Meeting on January 22, 2009

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33

Comment: Staff should share with stakeholders the data and “T-test” methodology used to 

determine if a major stationary source is “cyclical”.

Response: Staff has provided a detailed description of the “t-Test” methodology in this staff 

report and has also emailed this description and a MS Excel spreadsheet to 

stakeholders requesting such. Source representatives may determine if their 

source is cyclical using source emissions data. Furthermore, the rule provides the 

equation which may be used to compute source CAA non-attainment fees. 

Comment: The order in which various scenarios are shown tends to indicate that staff has a 

bias towards certain scenarios.

Response: Staff has presented scenarios in terms of the projected estimated CAA nonattainment fee revenues for each alternative baseline scenario, in descending rank 

order, as compared to the current projected estimated single baseline year fee 

revenue scenario (Scenario 1). This has been done strictly for comparative

purposes and does not indicate a predisposed bias towards a particular scenario. 

However, Scenario 2, the 3 year averaged baseline for cyclical major stationary 

sources will result in a net overall reduction in CAA non-attainment fee revenues 

due to reduced CAA non-attainment fees for cyclical sources.

Subsequent to the January 22, 2009 Public Consultation Meeting and the February 27, 

2009 Public Consultation Meeting

Comment: Three (3) years of annual emissions data is insufficient for a statistical look back 

test to determine if a major stationary source is cyclical or not.

Response: Staff has endeavored to optimize the conflicting constraint of maximizing the 

number of data points to strengthen the validity of the “t-Test” procedure and the 

competing constraint of minimizing the number of data points to reduce any 

potential errors from using non-representative, non-discount annual emissions

data. While using more data points in any statistical test would tend to make the 

results more robust, the additional data used must also be valid. If additional data 

only serves to introduce more or significant errors of deviation from a correct 

outcome than the use of more data points is not justified. Staff is however 

recommending that the number of annual emissions data points be increased from 

the current three (3) to a revised number of five (5) annual emissions data points 

for the “t-Test” procedure. Staff believes that this can be done and still provide a 

valid optimization of the data being sampled, based on the constraints.

Comment: Economic business cycles should be the basis of any test to determine if a source 

is cyclical and not annual emissions data.

Response: The District has a solid historical record of source by source emissions and can 

assess the pattern of these emissions based on unbiased analytical testing (using 

the “t-Test or other established numerical approach). Business records by contrast 

are proprietary at best, and even where available would require certified 

professional review and auditing due to their complex nature in order to determine 

if a source is cyclical or not. Staff does not have the resources or experience 

necessary to audit financial records and also does not believe that this is a 

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34

function it is prepared to take on. Furthermore, the CAA and U.S. EPA guidance 

clearly state variations in emissions, not business cycles. 

Comment: The nation is in the midst of a recession which is projected to last beyond the 

2010 attainment year for the SOCAB. Sources are having some of the worst 

years in their recent history financially. A 2010 baseline would result in an 

artificially low baseline and artificially high CAA non-attainment fees. 

Response: Staff is proposing to extend the look back period for averaging from the current 

three years to a revised five years of annual emissions data in order to account for 

this. Also, staff has now offered Option C, which would allow sources to use the 

average of two consecutive years in the last ten.

Comment: Sources are experiencing severe financial strains in the currently depressed 

economy and any CAA non-attainment fees should be returned to source that will 

be paying such fees. 

Response: Staff has incorporated, at Governing Board direction, a resolution that the use of 

fee revenue shall be prioritized in this order – for use at the source, for use in the 

community adjacent to the source, for use at another source under common 

ownership, and clean air projects. Sources that have air pollution control projects 

can apply for the use of the fee revenue that was remitted.

Comment: Multi-source companies and industries should be allowed some form of aggregate 

emissions baseline averaging. 

Response: There is currently no provision in the CAA or in any official U.S. EPA guidance 

that allows for such an approach to determining baseline. Baseline is required to 

be determined on a source by source basis. However, U.S. EPA is working on 

alternative dollar or emissions reduction approaches for sources. When such 

official guidance has been provided staff will review such alternatives to see if 

another approach to determining baseline is optimal.

Comment: Will fees paid by sources result in equivalent dollar for dollar emissions 

reductions at the sources paying the fees? 

Response: It is unlikely that this will occur however the language of the CAA specifically 

establishes the CAA non-attainment fee amounts and the types of sources (major

stationary sources) that must remit these fees. There is also currently no official 

U.S. EPA guidance that would allow other alternatives. Staff has proposed that 

the fees be used to derive the maximum benefit for each dollar invested in 

emission reduction projects through a Carl-Moyer type program that would fund 

projects with the lowest cost per ton of pollutant reductions, with stakeholder 

input. In addition, staff has also committed to reviewing if returning a portion of 

the fee back to the source for emission reduction projects should be incorporated. 

Should other alternatives be allowed through either legislation or further official 

guidance staff will revisit CAA fee usage alternatives
35

Comment: Why does Option1* require mandatory emissions averaging for cyclical sources 

while Option 2* makes the application for classification as a cyclical source 

voluntary? 

Response: Analysis of the mandatory averaging provision for cyclical sources shows that 

while in the aggregate cyclical sources are projected to benefit form a baseline 

averaging provision, not every individual source will do so. Option 2* was 

crafted in order to address this issue by allowing a source to pick whether it 

wanted to average over an allowed number of years or use a single year as

baseline. However, to account for variability in emissions due to regulatory 

requirements, Option 2* includes mandatory downward correction of emissions 

used in such a voluntary averaging proposal for cyclical sources.

Comment: Certain sources listed in Appendix 1 of this report are no longer in business. The 

District‟s revenue estimates are likely overstated. 

Response: As specified in this report, staff has used the best available data in an attempt to 

estimate values several years into the future. The latest available data set at the 

time the analysis was performed was FY 02-03 through FY 06-07 data. As such it 

is highly likely that some sources that were active during this period may no 

longer be so. The results presented in this report are therefore only an attempt to 

project future outcomes based on a window of past historical data and will 

certainly not be an exact representation of the future. The results in this report are 

intended only as rough approximation of possible future outcomes, and the report 

has been so caveated in numerous sections. In addition, other unknown and 

variable factors such as the CPI, specific source emissions, unknown source 

emissions control/renovation projects and source caps will definitely alter the 

estimated projected numbers in this report. These variables are in constant flux 

and any new or more recent estimated projections will include the similar 

uncertainty. As such, any values in this report should be used only as a general 

guide to overall outcomes and patterns and not for any specific resultant values.

Comment: The District should make an effort to seek legislative clarification on the intent of 

the provisions of Section 185 of the CAA. 

Response: District staff has been in contact with Senator Waxman‟s office including a 

delegation that traveled to Washington DC to meet with the Senators staff. To 

date District staff has been advised that Senator Waxman‟s staff is studying the 

concerns and issues surrounding Section 185. District staff was requested to 

continue working with U.S. EPA. In addition, the District is a member of and 

participating actively in the Clean Air Act Advisory Committee (CAAAC) 

Section 185 Work Group process. The District is actively working towards 

obtaining further official guidance regarding Section 185 issues and acting 

accordingly when such guidance is officially issued. However the District must 

expeditiously adopt a SIP approval Section 185 rule pursuant to mandatory CAA 

requirements that required such a rule in place for the SOCAB in 2000.

Comment: The fee savings under Option 2* (now Option B) may be illusory because the 

staff fees under Rule 306 may be higher than the savings. 
36

Response: Staff anticipates a substantial savings for any source opting to apply for an 

alternative baseline. Each ton reduced (relative to the 2010 baseline) results in 

approximately $9,000 in savings for every year the fee is paid. The T&M rate 

under Rule 306 is $112.30 per hour. Assuming that a facility conducts a complete 

analysis of it‟s prior year emissions, staff anticipates that any review of such an 

analysis to the completed in a relatively short time frame, which will result in a 

reasonable one-time cost to the facility, and significant reduction in clean air act 

non-attainment fees that the facility will experience, starting the first year of the 

program and continuing every year thereafter.

Comment: Staff should do away with the “t-Test” and just allow sources to pick any two year 

period in the last 10 years as its baseline.

Response: Staff is analyzing baseline options for the proposed amended rule that are 

consistent with statutory language and U.S. EPA guidance. Staff is specifically 

reviewing the two highest year‟s scenario.

Comment: Rule 317 disproportionately impacts small businesses.

Response: PAR 317 only impacts the largest emitters in the District. Of the approximately 

20,000 facilities in the District, less than 600 are impacted by the Rule 317. 

Although some sources affected by Rule 317 may meet the definition of small 

business, they are still very large emitters.

Including and Subsequent to the May 6, 2009 Public Consultation Meeting 

Comment: Why was the December 31 date chosen for the BACT Permit Unit exemption 

assessment date?

Response: The attainment date for the SOCAB is calendar year 2010. All calculations, 

analyses and prorating are based on a full year of data. The December 31 

assessment date sis consistent with the approach taken in making all other PAR 

317 determinations.

Comment: Will a source have the opportunity to correct errors in previous AER reports that 

might have an impact on the determination of CAA fees under Option C for the 

source?

Response: Yes. CAA Non-attainment fees will be based on the latest approved AER reports, 

including those that have been amended and approved.

Comment: What guarantee is there that a specific permit unit and its associated control 

equipment will qualify for the BACT Permit Unit exemption?

Response: A BACT Permit Unit is a permit unit that has an emission rate or limitation that 

meets or exceeds the requirements of Health and Safety Code 40405 as of 

December 31, 2010, or the date the permit unit was placed in service, whichever 

is later. The most current BACT is listed on the AQMD website at: 

www.aqmd.gov/bact/.

Comment: How quickly will plans be processed?

Formatted: Indent: Left: 0", First line: 0"
37

Response: Rule Option C requires a source that wishes to file such a plan to do so by 

submitting a complete plan including all of the required information identified in 

the rule option on or before the later of March 31, 2011 or March 31 of the year 

following the initial attainment year for a BACT permit unit exemption or an

alternative baseline period. Staff anticipates that if Option C is adopted most if 

not all major stationary sources will file a plan requesting either the alternative 

baseline, BACT Permit Unit exemptions or both and potential applicants should 

file plans as soon as practical. Staffs goal is to process plan approvals within 180 

days after all required information is received.

Comment: Will sources receiving CAA Non-attainment fee revenues for emission reduction 

projects be able to invest in multi-year emission reduction projects?

Response: The Governing Board has directed staff to present an analysis when presenting 

prepared projects for the Board‟s approval demonstrating how the proposed 

expenditure complies with the provisions of the rule and to also solicit input from 

affected stakeholders and other interested parties in developing guidelines. The 

issue of investing in multi-year emission reduction projects at a source will be 

considered. 

Comment: Can a different 2 consecutive years out of the previous 10 years be chosen for 

emissions when determining the alternative baseline for VOC than for NOx under 

Option C?

Response: No. Under Option C as source is certifying that its emissions of VOC and NOx 

are cyclical, irregular or otherwise vary significantly from year to year and that 

the chosen two consecutive years our of the ten years previous to and including 

the attainment year are the most representative of a typical year for the source 

overall.
38

APPENDIX 1

LIST OF POTENTIAL MAJOR STATIONARY SOURCES IN THE AQMD - July 2008

(Alphabetically by Source Name)

SOURCE ID# NAME OF MAJOR STATIONARY SOURCE IN THE SSAB

62862 IMPERIAL IRRIGATION DISTRICT/ COACHELLA

SOURCE ID# NAME OF MAJOR STATIONARY SOURCE IN THE SOCAB

800088 3M COMPANY

13563 3M ESPE DENTAL PRODUCTS DIVISION

73635 ABLESTIK LABORATORIES

12362 ACCESS BUSINESS GROUP LLC, NUTRILITE

106358 ACCURATE METAL FABRICATORS INC

47084 ADVANCE PAPER BOX CO

57390 ADVANCE TRUCK PAINTING INC

45489 ADVANCED CARDIOVASCULAR SYSTEM

104017 AERA ENERGY LLC

104015 AERA ENERGY LLC

23752 AEROCRAFT HEAT TREATING CO INC

115394 AES ALAMITOS, LLC

115389 AES HUNTINGTON BEACH, LLC

42676 AES PLACERITA INC

115536 AES REDONDO BEACH, LLC

101667 AG-FUME SERVICE INC

106897 AG-FUME SERVICES INC

148236 AIR LIQUIDE LARGE INDUSTRIES U.S., LP

3417 AIR PROD & CHEM INC

101656 AIR PRODUCTS AND CHEMICALS, INC.

3704 ALL AMERICAN ASPHALT, UNIT NO.01

800289 ALLERGAN INC

140373 AMERESCO CHIQUITA ENERGY LLC

800196 AMERICAN AIRLINES INC (EIS USE)

152948 AMERICAN DOCK BOX

138285 AMERICAN REMEDIAL TECHNOLOGIES, INC.
39

59237 AMERICAN SECURITY PRODUCTS CO INC

59225 AMERICH CORP

149235 AMF ANAHEIM LLC

148615 ANDERSON PRINTING

11972 ANEMOSTAT-WEST, A MESTEK CO

16642 ANHEUSER-BUSCH INC., (LA BREWERY)

118314 ANTHONY, INC.

117140 AOC, LLC

222 ARCHITECTURAL WOODWORKING CO

800286 ARCO TERMINAL SERVICES CORP

800052 ARCO TERMINAL SERVICES CORP., TERMINAL 2

800051 ARCO TERMINAL SERVICES CORPORATION

11640 ARLON ADHESIVE SYSTEM/DECORATIVE FILMS

46646 ARLON, MATERIALS FOR ELECTRONICS DIV

110577 ARMORCAST PRODUCTS COMPANY

12155 ARMSTRONG WORLD INDUSTRIES INC

118379 ARROWHEAD REGIONAL MEDICAL CTR

100485 ATKINSON BRICK COMPANY

100500 ATLANTIC/PACIFIC SHUTTER CO INC

128819 AURORA MODULAR INDUSTRIES

117290 B BRAUN MEDICAL, INC

800016 BAKER COMMODITIES INC

147764 BALL AEROSOL AND SPECIALTY CONTAINER INC

117785 BALL METAL BEVERAGE CONTAINER CORP.

13618 BARRY AVE PLATING CO INC

14931 BAU FURNITURE MANUFACTURING, THOMAS BAU

40034 BENTLEY PRINCE STREET INC

119907 BERRY PETROLEUM COMPANY

118121 BERT-CO GRAPHICS, BERT-CO IND DBA

12129 BEVERLY HOSPITAL

113465 BFI WASTE SYS OF NA/AZUSA GAS SYS OPR

155474 BICENT (CALIFORNIA) MALBURG LLC

132068 BIMBO BAKERIES USA INC

20445 BIOLA UNIVERSITY

800209 BKK CORP (EIS USE)

113240 BLACK HILLS ONTARIO LLC

18814 BLACK OXIDE IND INC

62355 BLACKHAWK FURNITURE, INC

148535 BLUEGRASS FOLDING CARTON CO

140473 BOWNE OF LOS ANGELES INC
40

800395 BP WEST COAST PROD.,ARCO CARSON

800397 BP WEST COAST PROD.,ARCO COLTON

131003 BP WEST COAST PROD.LLC BP CARSON REF.

800396 BP WEST COAST PROD/ARCO VINVALE TERMINAL

131249 BP WEST COAST PRODUCTS LLC,BP WILMINGTON

132124 BP WEST COAST PRODUCTS, LLC/CARSON TERMI

98159 BREITBURN ENERGY CORP

111110 BRISTOL FIBERLITE INDUSTRIES, INC

52719 BROWNWOOD FURNITURE, INC.

1034 BUILDERS FENCE CO INC

119940 BUILDING MATERIALS MANUFACTURING CORP

25638 BURBANK CITY, BURBANK WATER & POWER

128243 BURBANK CITY,BURBANK WATER & POWER,SCPPA

72351 CAJOLEBEN, INC., GALASSO'S BAKERY, DBA

800387 CAL INST OF TECH

144590 CALIBER COLLISION CENTERS, CALIBER ACQUI

122410 CALIFORNIA NEWSPAPERS TNERSHIP/SB SUN

800181 CALIFORNIA PORTLAND CEMENT CO (NSR USE)

135729 CALIFORNIA SPECIALTY PAINTING

46268 CALIFORNIA STEEL INDUSTRIES INC

800022 CALNEV PIPE LINE, LLC

8309 CAMBRO MANUFACTURING CO

153992 CANYON POWER PLANT

22911 CARLTON FORGE WORKS

118406 CARSON COGENERATION COMPANY

141555 CASTAIC CLAY PRODUCTS, LLC

560 CATALINA YACHTS INC

16389 CEDARS-SINAI MEDICAL CTR

98492 CENTURY PLASTICS INC

37601 CENVEO ANDERSON LITHOGRAPH

800380 CERTIFIED ENAMELING INC

800272 CHEMOIL TERMINALS CORPORATION

800030 CHEVRON PRODUCTS CO.

800302 CHEVRON PRODUCTS COMPANY

2526 CHEVRON USA INC

800032 CHEVRON USA INC

135216 CHINO BASIN DESALTER AUTHORITY

56940 CITY OF ANAHEIM/COMB TURBINE GEN STATION

23194 CITY OF HOPE MEDICAL CENTER

139796 CITY OF RIVERSIDE PUBLIC UTILITIES DEPT
41

153420 CLOSETMAID

136155 CLOSETS BY DESIGN, INC

16978 CLOUGHERTY PACKING LLC/HORMEL FOODS CORP

141901 CMH MFG WEST INC, GOLDEN WEST HOMES DBA

80066 COATINGS RESOURCE CORP

123350 COLOR GRAPHICS INC

143597 COLORGRAPHICS

37336 COMMERCE REFUSE TO ENERGY FACILITY

800365 CONOCOPHILLIPS CO. L A TERMINAL

18503 CONOCOPHILLIPS COMPANY

800362 CONOCOPHILLIPS COMPANY

800363 CONOCOPHILLIPS COMPANY

800364 CONOCOPHILLIPS/COLTON TERMINAL-WEST CO

111814 CONOCOPHILLIPS/TORRANCE TANK FARM CO

126536 CONSOLIDATED FOUNDRIES - POMONA

10971 CONTAINER SUPPLY CO INC

2537 CORONA CITY, DEPT OF WATER & POWER

68042 CORONA ENERGY TNERS, LTD

19144 CORONET MFG CO INC

103864 COUNTRY AFFAIRE, INC

152707 CPV SENTINEL LLC

6961 CRAFTSMAN OFFICE FURNITURE

49327 CREATIVE PRESS HOLDINGS,LLC,DBA CREATIVE

118744 CREEL PRINTING COMPANY OF CALIFORNIA,INC

70220 CROWN CHROME PLATING INC

7949 CUSTOM FIBERGLASS MFG CO/CUSTOM HARDTOP

38911 CUSTOMCRAFT

104161 DANMER INC, DANMER CUSTOM SHUTTERS DBA

63180 DARLING INTERNATIONAL INC

3721 DART CONTAINER CORP OF CALIFORNIA

7411 DAVIS WIRE CORP

772 DEFT INC

69598 DELGADO BROTHERS CO

139304 DELTA PRINTING SOLUTIONS

9668 DELUXE LABORATORIES

7713 DELUXE PACKAGES

800037 DEMENNO/KERDOON

800189 DISNEYLAND RESORT

94529 DITTY CONTAINER INC

142220 DIVERSIFIED COATINGS, INC.
42

77641 DONAHUE PRINTING CO

98557 DOUBLE D ENTERPRISE INC

5723 DUCOMMUN AEROSTRUCTURES INC

140811 DUCOMMUN AEROSTRUCTURES INC

50869 DUNCAN BROS INC

13943 DUNN-EDWARDS CORP

45938 E.M.E. INC/ELECTRO MACHINE & ENGINEERING

136148 E/M COATING SERVICES

136173 E/M COATING SERVICES

13854 EAST LOS ANGELES COLLEGE

7417 EASTERN MUNICIPAL WATER DIST

19159 EASTERN MUNICIPAL WATER DIST

1703 EASTERN MUNICIPAL WATER DISTRICT

13088 EASTERN MUNICIPAL WATER DISTRICT

800264 EDGINGTON OIL COMPANY

133813 EI COLTON, LLC

115663 EL SEGUNDO POWER, LLC

8570 EMBEE INC

127568 ENGINEERED POLYMER SOLUTION, VALS

74060 ENGINEERED POLYMER SOLUTIONS INC

19194 EPPINK OF CALIFORNIA

136202 EPSILON PLASTICS INC

116931 EQUILON ENT LLC, SHELL OIL PROD. U S

117560 EQUILON ENTER, LLC-SHELL OIL PROD. US

117225 EQUILON ENTER. LLC, SHELL OIL PROD. U S

800372 EQUILON ENTER. LLC, SHELL OIL PROD. US

800370 EQUILON ENTER., LLC, SHELL OIL PROD. U S

800369 EQUILON ENTER.LLC , SHELL OIL PROD. U S

47643 EXECUTIVE OFFICE CONCEPTS

124838 EXIDE TECHNOLOGIES

152895 EXTREME CUSTOM TRAILERS, DIV LIPPERT COM

800092 EXXONMOBIL OIL CORP

800091 EXXONMOBIL OIL CORP (NSR USE ONLY)

800089 EXXONMOBIL OIL CORPORATION

800171 EXXONMOBIL OIL CORPORATION

25501 FABRI-COTE,DIV A & S GLASS FABRICS CO IN

135204 FACILITY SAMPLE

3496 FAIRVIEW DEVELOPMENTAL CENTER

112956 FENDER MUSICAL INSTRUMENTS CORP.

29011 FLEETWOOD HOMES OF CAL INC
43

8936 FLEETWOOD MOTOR HOMES OF CAL INC

12280 FLEETWOOD TRAVEL TRAILERS OF CAL INC #15

134590 FLEISCHMANN'S VINEGAR CO, INC

12630 FLINT INK NORTH AMERICA CORP

12876 FOAM FABRICATORS

11716 FONTANA PAPER MILLS INC

124725 FORTUNE FASHIONS IND

152947 FRANKLIN ACQUISITION, LLC/FIBERNETICS MO

43605 FREE FLOW PACKAGING INTERNATIONAL, INC.

145740 FREEDOM GRAPHIC SYSTEMS, INC.

19766 FREMARC DESIGNS

40915 FREUND BAKING CO

346 FRITO-LAY NORTH AMERICA, INC.

96013 FURNITURE TRADITIONS INC

2044 G B MFG INC/CALIF ACRYLIC, DBA CAL SPAS

155828 GARRETT AVIATION SVCS. LLC DBA STANDARD

45448 GAS RECOVERY SYST LLC (COYOTE CANYON)

61160 GE ENGINE SERVICES

12332 GEN AMERICAN TRANSPORTATION CORP/GATX

153033 GEORGIA-PACIFIC CORRUGATED LLC

152857 GEORGIA-PACIFIC GYPSUM LLC

139873 GIANT MERCHANDISING

800327 GLENDALE CITY, GLENDALE WATER & POWER

12660 GOLDSHIELD FIBERGLASS, INC, PLANT #58

139828 GRAPHIC PRESS LLC DBA INSYNC MKTG. SOL

10510 GREGG INDUSTRIES INC

142907 GREIF INDUSTRIAL PACKAGING & SERVS LLC

18378 GRUBER SYS INC

57094 GS ROOFING PRODUCTS CO, INC/CERTAINTEED

40196 GUARDIAN INDUSTRIES CORP.

19130 HALLMARK SW CORP

61785 HANDBILL PRINTERS DBA AMERICAN WEB

106325 HARBOR COGENERATION CO

100145 HARBOR FUMIGATION INC

123774 HERAEUS METAL PROCESSING, INC.

15164 HIGGINS BRICK CO

67757 HIGHLAND PLATING CO

11192 HI-SHEAR CORPORATION

800066 HITCO CARBON COMPOSITES INC

11245 HOAG MEM HOSP PRESBYTERIAN
44

800003 HONEYWELL INTERNATIONAL INC

68996 HONEYWELL TURBO TECHNOLOGIES

23401 HOOD MFG INC

14164 HOUSE OF PACKAGING, INC

117339 HYDROSEAL POLYMERS, INC

24081 I. M. GINSBURG FURNITURE CO INC

149974 IMPRESS COMMUNICATIONS INC

124619 IMPRESS USA INC

123087 INDALEX WEST INC

134018 INDUSTRIAL CONTAINER SERVICES-CA LLC

124808 INEOS POLYPROPYLENE LLC

129816 INLAND EMPIRE ENERGY CENTER, LLC

147371 INLAND EMPIRE UTILITIES AGENCY

9163 INLAND EMPIRE UTL AGEN, A MUN WATER DIS

71704 INLAND LITHO, INC

102216 INNOVATION FIBERGLASS PRODUCTS

151843 INSULFOAM LLC

37076 INSYNC MEDIA INC

151005 INTERNATIONAL MARKETING & MFG. INC.

8488 INTERNATIONAL PAPER CO

48522 INTERNATIONAL RECTIFIER HEXFET AMERICA

106810 INTERSTATE BRANDS CORP

98531 INVESTMENT ENTERPRISES INC,GREAT WESTERN

800367 IPS CORP

22364 ITT INDUSTRIES, CANNON

24647 J. B. I. INC

131370 JACUZZI WHIRLPOOL BATH

6144 JAGUAR FINISHING CO

16697 JBL, INC.

800197 JENSEN INDUSTRIES INC.

119741 JENSEN PRECAST

91259 JOHANSON DIELECTRICS INC

13397 JOHN BOYD DESIGNS

14492 JOHNSON LAMINATING & COATING INC

74529 K. F. FIBERGLASS, INC.

16338 KAISER ALUMINUM FABRICATED PRODUCTS, LLC

800429 KAISER FOUNDATION HOSPITAL

93702 KCA ELECTRONICS INC

152330 KIK AEROSOL SOCAL LLC

21887 KIMBERLY-CLARK WORLDWIDE INC.-FULT. MILL
45

800056 KINDER MORGAN LIQUIDS TERMINALS, LLC

800057 KINDER MORGAN LIQUIDS TERMINALS, LLC

56888 KINRO INC

87716 KION PRINTING INC

1744 KIRKHILL RUBBER CO

130654 KOMFORT & DESIGN INDUSTRIES INC

108620 KRYSTAL KOACH INC

143025 KUSHWOOD LLC

55000 KYOWA AMERICA CORP

54424 L&L CUSTOM SHUTTERS INC,ALLWOOD SHUTTERS

142686 L. A. SPAS, INC

45262 LA COUNTY SANITATION DIST SCHOLL CANYON

49805 LA CITY, BUREAU OF SANIT(LOPEZ CANYON)

36909 LA CITY, DETMENT OF AIRPORTS

800335 LA CITY, DEPT OF AIRPORT

800170 LA CITY, DWP HARBOR GENERATING STATION

800074 LA CITY, DWP HAYNES GENERATING STATION

800075 LA CITY, DWP SCATTERGOOD GENERATING STN

800193 LA CITY, DWP VALLEY GENERATING STATION

800214 LA CITY, SANITATION BUREAU (HTP)

10245 LA CITY, TERMINAL ISLAND TREATMENT PLANT

800312 LA CO HARBOR-UCLA MEDICAL CENTER

800236 LA CO. SANITATION DIST

550 LA CO., INTERNAL SERVICE DEPT

53610 LA CO., METROPOLITAN TRANS AUTHORITY

3093 LA CO., OLIVE VIEW/UCLA MEDICAL CENTER

6384 LA CO., RANCHO LOS AMIGOS NAT. REHAB CTR

800386 LA CO., SHERIFF DEPT

29411 LA CO., SHERIFF'S DEPT

42514 LA COUNTY SANITATION DIST (CALABASAS)

24520 LA COUNTY SANITATION DISTRICT

25070 LA COUNTY SANITATION DISTRICT

42633 LA COUNTY SANITATION DISTRICT (SPADRA)

75323 LA OPINION

18730 LA STEELCRAFT PROD.

20197 LAC/USC MEDICAL CENTER

800428 LAMPS PLUS INC/ PACIFIC COAST LIGHTING

24060 LASCO BATHWARE INC.

800313 LAXFUEL CORP

70915 LESTER LITHOGRAPH INC
46

144455 LIFOAM INDUSTRIES, LLC

83102 LIGHT METALS INC

151532 LINN WESTERN OPERATING INC

139799 LITHOGRAPHIX INC

800234 LOMA LINDA UNIV

44577 LONG BEACH CITY, SERRF PROJECT

115314 LONG BEACH GENERATION LLC

14213 LONG BEACH MEMORIAL MEDICAL CENTER

124904 LOS ANGELES TIMES COMMUNICATIONS LLC

124906 LOS ANGELES TIMES COMMUNICATIONS LLC

800080 LUNDAY-THAGARD COMPANY

13011 M.C. GILL CORP

14146 MAC GREGOR YACHT CORP

1379 MADISON-GRAHAM COLORGRAPHICS INC

114849 MAN-GROVE IND, INC/LITHOCRAFT CO. DBA

56547 MARCEL ELECTRONICS

2619 MARTIN LUTHER KING JR/MACC

800398 MASK-OFF COMPANY, INC

17841 MC DOWELL & CRAIG MFG. CO.

8918 MCCONNELL CABINETS INC

2825 MCP FOODS INC

91954 MENZIES AVIATION GROUP, INC.

58563 MERCURY PLASTICS INC

115563 METAL COATERS OF CALIFORNIA

94872 METAL CONTAINER CORP

102910 MICHELS & CO

104004 MICROMETALS, INC

155877 MILLERCOORS, LLC

39855 MIZKAN AMERICAS, INC

104806 MM LOPEZ ENERGY LLC

117297 MM PRIMA DESHECHA ENERGY, LLC

113873 MM WEST COVINA LLC

81752 MODTECH HOLDINGS, INC.

73367 MONARCH LITHO INC

115622 MONIERLIFETILE LLC

121737 MOUNTAINVIEW GENERATING STATION

11887 NASA JET PROPULSION LAB

15558 NELCO PRODUCTS INC

117882 NELSON NAMEPLATE COMPANY

40806 NEW BASIS
47

12428 NEW NGC, INC.

10656 NEWPORT LAMINATES

5887 NEXGEN PHARMA INC

129659 NM COLTON GENCO LLC.

129660 NM MID VALLEY GENCO LLC

129661 NM MILLIKEN GENCO, LLC

18294 NORTHROP GRUMMAN CORP, AIRCRAFT DIV

800408 NORTHROP GRUMMAN SPACE & MISSION SYSTEMS

800409 NORTHROP GRUMMAN SPACE & MISSION SYSTEMS

71207 NORTHWESTERN SHOWCASE & FIXTURE CO

112853 NP COGEN INC

134838 NUPLA CORPORATION

106711 NU-WAY LIVE OAK LANDFILL INC

50418 O C WASTE & RECYCLING

109505 OAKWOOD INTERIORS, INC

114312 OBERTHUR CARD SYSTEMS

52743 OC WASTE & RECYCLING

52753 OC WASTE & RECYCLING

69646 OC WASTE & RECYCLING

6163 OHLINE

89248 OLD COUNTRY MILLWORK INC

47781 OLS ENERGY-CHINO

17301 ORANGE COUNTY SANITATION DISTRICT

29110 ORANGE COUNTY SANITATION DISTRICT

35302 OWENS CORNING ROOFING AND ASPHALT, LLC

7427 OWENS-BROCKWAY GLASS CONTAINER INC

3525 P.B. FASTENERS

17953 PACIFIC CLAY PRODUCTS INC

151178 PACIFIC ENERGY RESOURCES, LTD.

146313 PACIFIC LA MARINE TERMINAL LLC

146810 PACIFIC LA MARINE TERMINAL LLC

150233 PACIFIC MFG MGMT, INC DBA GRENEKER SOLUT

121727 PACIFIC PIPELINE SYSTEM LLC

800417 PACIFIC TERMINALS LLC

800419 PACIFIC TERMINALS LLC - HUNTINGTON

800420 PACIFIC TERMINALS LLC - LONG BEACH

82608 PACIFIC WEST LITHO INC

21474 PACTIV CORP

22410 PALACE PLATING

130211 PAPER-PAK INDUSTRIES
48

58202 AGON LABS, NATURAL LIFE ECO VITE LABS

800183 AMOUNT PETR CORP (EIS USE)

12182 K LA BREA

103570 KINSON ENTERPRISES INC

18960 PASADENA CITY COLLEGE

800168 PASADENA CITY, DWP (EIS USE)

62851 PENN INDUSTRIES, INC.

142408 PENROSE LANDFILL GAS CONVERSION, LLC

101207 PERFORMANCE COMPOSITES INC, FIBERGLASS P

140552 PERFORMANCE COMPOSITES, INC

9978 PETER PEPPER PRODUCTS

800079 PETRO DIAMOND TERMINAL CO

17929 PINECRAFT CUSTOM SHUTTERS INC

15837 PLASTIC DRESS-UP CO

40991 PLASTICOLOR MOLDED PRODUCTS, INC

800212 POMONA VALLEY COMM HOSP (EIS USE)

7416 PRAXAIR INC

152501 PRECISION SPECIALTY METALS, INC.

102268 PREPRODUCTION PLASTICS, INC

136 PRESS FORGE CO

105903 PRIME WHEEL

59128 PRIME WOOD PRODUCTS INC

46 PROFESSIONAL REFINISHING ORGANIZATION

8220 PROVIDENCE ST JOSEPH MED CTR

132191 PURENERGY OPERATING SERVICES, LLC

132192 PURENERGY OPERATING SERVICES, LLC

132368 QUEBECOR WORLD GREAT WESTERN PUBLISHING

8547 QUEMETCO INC

82657 QUEST DIAGNOSTICS INC

3585 R. R. DONNELLEY & SONS CO, LA MFG DIV

78494 RAPID RACK INDUSTRIES INC

149241 REGAL CULTURED MARBLE

44655 REINHOLD INDUSTRIES INC

115315 RELIANT ENERGY ETIWANDA, INC.

119219 REPUBLIC SERV OF CALIF LLC(CHIQUITA CAN)

52517 REXAM PLC, REXAM BEVERAGE CAN COMPANY

94272 RGF ENTERPRISES INC

114801 RHODIA INC.

113518 RIDGEWOOD POWER MANAGEMENT,LLC

139010 RIPON COGENERATION LLC
49

15793 RIV CO, WASTE RESOURCES MGMT DIST, LAMB

6979 RIV CO., WASTE MGMT, BADLANDS LANDFILL

800182 RIVERSIDE CEMENT CO (EIS USE)

9961 RIVERSIDE CITY, WATER QUALITY CONTROL

100806 ROBINSON HELICOPTER CO INC

800113 ROHR,INC

89710 ROYAL CABINETS

23487 ROYAL PAPER BOX CO

32840 ROYAL TRUCK BODY INC

153095 SA RECYCLING LLC, ADAMS STEEL DBA

14833 SAINT JOHN'S HOSPITAL & HEALTH CENTER

13920 SAINT JOSEPH HOSPITAL

108701 SAINT-GOBAIN CONTAINERS, INC.

14437 SAN ANTONIO COMMUNITY HOSPITAL

58044 SAN BER CNTY SOLID WASTE MGMT - COLTON

7068 SAN BER CNTY SOLID WASTE MGMT

50299 SAN BER CNTY SOLID WASTE MGMT MID VALLEY

7371 SAN BER CNTY SOLID WASTE MGMT- MILLIKEN

11301 SAN BERNARDINO CITY MUN WATER DEPT (WRP)

4242 SAN DIEGO GAS & ELECTRIC

133323 SAN DIEGO SHUTTER CO INC

7450 SANDBERG FURNITURE MFG CO INC

77014 SARA LEE FRESH, INC

144385 SCHAWK, INC

15504 SCHLOSSER FORGE COMPANY

9898 SCIENTIFIC SPRAY FINISHES INC

141287 SCOTT BROS. DAIRY FARMS

122858 SEKISUI T.A. INDUSTRIES,INC

152811 SENSATION SPAS, INC

145464 SES TERMINAL LLC

800129 SFPP, L.P.

800278 SFPP, L.P. (NSR USE)

800279 SFPP, L.P. (NSR USE ONLY)

21089 SHERWOOD SHUTTER CORP

16639 SHULTZ STEEL CO

54402 SIERRA ALUMINUM COMPANY

85943 SIERRA ALUMINUM COMPANY

149814 SIERRACIN/SYLMAR CORP

121493 SIGNATURE FLEXIBLE PACKAGING, INC

147128 SILVER CREEK INDUSTRIES, INC
50

35482 SINCLAIR PRINTING CO

25513 SIX FLAGS THEMES PKS INC,SIX FLAGS MAGIC

105281 SKYLINE HOMES INC

109498 SNOW PLASTICS,HARRINGTON IND.PLSTCS,INC.

43201 SNOW SUMMIT INC

4477 SO CAL EDISON CO

17104 SO CAL EDISON CO

51003 SO CAL EDISON CO

51475 SO CAL EDISON CO

5973 SO CAL GAS CO

800128 SO CAL GAS CO (EIS USE)

8582 SO CAL GAS CO/PLAYA DEL REY STORAGE FACI

1334 SOC-CO PLASTIC COATING CO

114083 SOLUTIONS UNLIMITED, WILSON'S ART STUDIO

36738 SORENSON ENGINEERING INC, FRANK SORENSON

999999 SOUTH COAST SPECIAL FACILITY ID

149620 SOUTHERN CALIFORNIA EDISON

148568 SOUTHWEST MILL & LUMBER

108711 SOUTHWEST MILL & LUMBER INC

61536 SPECIALTY FINISHES CO

6324 ST. BERNARDINE MEDICAL CENTER

103609 ST. JUDE MEDICAL CRMD

126498 STEELSCAPE, INC

52742 STOROPACK INC

123970 SUNDANCE SPAS INC

115586 SUNDANCE SPAS, INC

49111 SUNSHINE CANYON LANDFILL

139938 SUNSHINE GAS PRODUCERS LLC

2083 SUPERIOR INDUSTRIES INTERNATIONAL INC

76969 SYNAGRO COMPOSTING CO. OF CALIFORNIA INC

115892 T/O PRINTING

3968 TABC, INC

18931 TAMCO

392 TAYLOR-DUNN MFG CO

6643 TECHNICOLOR INC

71797 TED LEVINE DRUM CO

152033 TESORO REF & MKTG CO., LONG BEACH

151984 TESORO REF & MKTG. CO., WILMINGTON

151798 TESORO REFINING AND MARKETING CO

800436 TESORO REFINING AND MARKETING CO
51

84273 TEVA ENTERAL MEDICINES, INC

96037 TEXTURE DESIGN FURNITURE INC

800038 THE BOEING COMPANY - C17 PROGRAM

40841 THE DOT PRINTER INC

6262 THE HON CO

11435 THE PQ CORP

24730 THE STRIP JOINT INC

83508 THE TERMO COMPANY

78376 THMX HOLDINGS, LLCTHERMAL DYNAMICS CORP

74830 THORO PACKAGING INC

800330 THUMS LONG BEACH

129497 THUMS LONG BEACH CO

800325 TIDELANDS OIL PRODUCTION CO

68122 TIDELANDS OIL PRODUCTION COMPANY ETAL

800240 TIN, INC. TEMPLE-INLAND, DBA

137508 TONOGA INC, TACONIC DBA

57560 TOPPER PLASTICS INC

142417 TOYON LANDFILL GAS CONVERSION LLC

8935 TRAIL RITE INC

24450 TREND MANOR FURNITURE MFG CO INC

53729 TREND OFFSET PRINTING SERVICES, INC

9053 TRIGEN- LA ENERGY CORP

11034 TRIGEN-LA ENERGY CORP

800267 TRIUMPH PROCESSING, INC.

43436 TST, INC.

113674 U S A WASTE OF CAL(EL SOBRANTE LANDFILL)

14966 U S GOV'T, V A MEDICAL CENTER, WEST L A

800263 U.S. GOVT, DEPT OF NAVY

119939 UBS PRINTING GROUP

800026 ULTRAMAR INC (NSR USE ONLY)

800198 ULTRAMAR INC (NSR USE ONLY)

127749 ULTRAMAR, INC

9755 UNITED AIRLINES INC

800288 UNIV CAL IRVINE (NSR USE ONLY)

800265 UNIV OF SO CAL (EIS & NSR USE ONLY)

800202 UNIVERSAL CITY STUDIOS, LLC.

18452 UNIVERSITY OF CALIFORNIA, LOS ANGELES

56 UNIVERSITY SO CALIFORNIA,HEALTH SCIENCES

5679 US GOVT, VETERANS ADMINISTRATION MED CTR

13990 US GOVT, VETERANS AFFAIRS MEDICAL CENTER
52

12185 US GYPSUM CO

18695 US GYPSUM CO

1073 US TILE CO

79691 VACUUM METALIZING CO

800393 VALERO WILMINGTON ASPHALT PLANT

146534 VALLE DEL SOL ENERGY, LLC

111415 VAN CAN COMPANY

148553 VERNON CITY, LIGHT & POWER DETMENT

14502 VERNON CITY, LIGHT & POWER DEPT

115130 VERTIS, INC

37881 VERTIS, INC.

151899 VINTAGE PRODUCTION CALIFORNIA LLC

80321 VISTA CONSOLIDATED INC

14495 VISTA METALS CORPORATION

2846 VISTA PAINT CORP

44276 VITATECH INTL INC

144197 WALKER WOOD PRODUCTS, INC.

146536 WALNUT CREEK ENERGY K

149027 WARREN E & P, INC.

50310 WASTE MGMT DISP &RECY SERVS INC (BRADLEY

10966 WEBER METALS INC

117460 WEDO GRAPHICS INC

152046 WELLHEAD POWER MARGARITA, LLC

42775 WEST NEWPORT OIL CO

74310 WESTERN HOMES CORP

17956 WESTERN METAL DECORATING CO

97019 WESTERN SUMMIT MANUFACTURING CORP

22092 WESTERN TUBE & CONDUIT CORP

110924 WESTWAY TERMINAL COMPANY

1962 WEYERHAEUSER COMPANY

132451 WEYERHAEUSER COMPANY

51620 WHEELABRATOR NORWALK ENERGY CO INC

127299 WILDFLOWER ENERGY LP/INDIGO ENERGY FAC

62617 WILLARD MARINE INC

19184 WINTERS INDUSTRIAL CLEANING INC

90326 WOODRIDGE PRESS INC

70021 XERXES CORP ( A DELAWARE CORP)

20504 ZIEMAN MFG CO
53

APPENDIX 2

“t-Test” METHODOLOGY

A “t-Test” method was used for determining if the most recent year‟s emissions are significantly 

different from prior years‟. 

The justification for this approach comes from the field of inferential statistics: Assume that the 

emissions for previous n years are drawn from a common distribution that is normal with 

unknown mean, , and unknown variance, 2. Let n = 3. Then, we can write the prior years‟ 

emissions data as a list {x1,x2,x3}. To estimate and 2, we use the sample average, 

x

, and 

sample variance, S

2

, for prior years‟ emissions. Both of these estimators have desirable 

statistical properties and are commonly used. The sample average is given by 

3

3

1 i 1

i

n

i

i x

n

x

x

and the sample variance is 

2

3

1

2

1

2

( )

2

1

( )

1

1

i

i

n

i

i x x x x

n

S

. With these 

two pieces of data, we can conduct a “t-Test”, which is used for hypothesis testing in small 

samples. The t-distribution is a well-known probability distribution that describes the behavior 

of a statistically standardized version of the sample mean:

~ 1

*( )

n

t

S

n x

t

.

Using this standardized test statistic, the hypothesis testing whether current year emissions, x

*

, 

are significantly different from past years‟ emissions can be conducted. Formally, we test the 

hypothesis H0: = x

*

against the alternative H1: x

*

. In this case, the test statistic is generated 

from

1

*

~

*( )

n

t

S

n x x

t

. 

The resulting value of this statistic can be used together with a table of the t-distribution to 

express a degree of confidence about the likelihood that the hypothesis is true. In the field of 

inferential statistics, standard levels of “confidence” are commonly used to determine whether 

hypotheses are likely. The most common confidence levels used are 90%, 95%, and 99%, which 

provides some flexibility in deciding what a “significant deviation in current year emissions” 

means. Of these levels, the one used most often is the 95% level, which is used as the basis for 

the remaining discussion. Formally, finding a “t” value for this test that is outside the chosen 

confidence bounds is a rejection of the “null” hypothesis, H0. The hypothesis being tested is the 

claim that the current year emissions, x

*

, is the true unknown mean of the common distribution 

for the prior years‟ emissions, or equivalently whether deviations from current year emissions, 

x

*

, are significantly different from zero. Rejection means that the current year emissions, x

*

, are 

too far away from the sample mean calculated, 

x

, for prior year‟s emissions to be considered a 

good candidate for the unknown mean of the common distribution. If current year emissions 

were close, in a statistical sense, to the average of past year emissions, the hypothesis would not 

be rejected by the data.
54

Using the data provided for analysis, the table below illustrates the described method assuming 

that 2006 is the current year:

fac_id 2006 2003 2004 2005 ave sd t-score

crit tn-1

@5% Significant? Cyclical?

##### 296.958 198.059 187.064 261.841 215.655 40.375 3.488 4.303 NO NO

##### 219.566 196.975 205.427 220.896 207.766 12.131 1.685 4.303 NO NO

##### 44.312 283.945 290.816 317.075 297.279 17.485 25.059 4.303 YES YES

##### 160.935 163.567 162.268 161.794 162.543 0.918 3.034 4.303 NO NO

##### 122.519 139.417 128.145 129.574 132.379 6.137 2.783 4.303 NO NO

##### 138.640 124.284 120.560 130.759 125.201 5.161 4.510 4.303 YES YES

##### 137.515 101.962 116.646 120.997 113.202 9.974 4.222 4.303 NO NO