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Applied Development Economics D-1 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

APPENDIX D 

Socioeconomic Impact Analysis for Revised 

Proposed Amendments to Rule 4703 (Stationary Gas Turbines) 

September 20, 2007 
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 Revised Proposed Amendments to Rule 4703

SOCIOECONOMIC ANALYSIS 

DRAFT RULE 4703: 

STATIONARY GAS TURBINE (FINAL DRAFT) 

2 August 2007 

Revised 30 August 2007 

Prepared for 

San Joaquin Valley Unified Air Pollution Control District 

1990 E. Gettysburg Avenue 

Fresno, CA 93726 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis September 20, 2007 

Applied Development Economics D-3 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

Prepared by 

Applied Development Economics 

100 Pringle Avenue, Suite 560 • Walnut Creek, California • (925) 934-8712 

1029 J Street, Suite 310 • Sacramento, California • (916) 441-0323 

www.adeusa.com
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis September 20, 2007 

Applied Development Economics D-4 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

CONTENTS 

1. Executive Summary ........................................................................5

2. Introduction.....................................................................................6

3. Description of Proposed Amendments to Rule 4703 (Stationary Gas 

Turbines).........................................................................................6

4. Methodology....................................................................................8

5. Socioeconomic Impacts...............................................................10

5.1 Compliance cost estimates....................................................10

5.2 Business responses to compliance costs.............................10

5.3 Impacts on Affected Industries...........................................11

5.4 Impacts on Small Businesses................................................18

 Definition Of A Small Business.....................................18
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Appendix D: Socioeconomic Analysis September 20, 2007 

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 Revised Proposed Amendments to Rule 4703

1. EXECUTIVE SUMMARY 

The San Joaquin Valley Unified Air Pollution Control District 

(“District”) seeks to adopt proposed amendments to Rule 4703 to meet 

certain United States Environmental Protection Agency (US EPA) 

mandates and timelines with regards to improved air quality in the 

region. This section of the report summarizes the findings of the 

socioeconomic analysis of the proposed amendments to Rule 4703. 

This report is based on the version of Draft Rule 4703 that was 

published in June 2007. 

The analysis shows that amendments to Rule 4703 will affect 16 

corporations, public entities, and non-profits throughout the Central 

valley region. Excluding AT&T and PG&E, these entities generate over 

$7.5 billion and $524 million in net profits. The analysis concludes that 

the proposed amendments do not result in significant impacts. In 

addition, small businesses are not disproportionately impacted by 

proposed amendments to Rule 4703. 

In addition to the above entities, the analysis examines impacts to 

Turlock Irrigation District and the Northern California Power Agency 

(NCPA). The analysis concludes that the proposed amendments do not 

significantly impact these entities. 

Proposed amendments to Rule 4703 also affect a number of public 

utilities. The analysis shows that impacts to these entities are less than 

significant. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis September 20, 2007 

2. INTRODUCTION 

This report describes the socioeconomic impacts of proposed 

amendments to Rule 4703 (Stationary Gas Turbines). Following this 

introduction, the report summarizes the proposed amendments and 

describes the methodology for the socioeconomic analysis. In Section 5, 

the report describes the economic characteristics of sources affected by 

the proposed amendments to Rule 4703. The sixth section analyzes the 

socioeconomic impacts of compliance costs on the affected sources and 

the regional economy. This report is based on the version of Draft Rule 

4703 that was published on June 2007. 

The report is prepared pursuant to the provisions of AB2051 (Section 

40728.5 of the California Health and Safety Code), which requires an 

assessment of socioeconomic impacts of proposed air quality rules. The 

findings in this report can assist District staff in understanding the 

socioeconomic impacts of the proposed amendments to Rule 4703, and 

can assist staff in preparing a refined version of the rule. Figure 1 is a 

map of the eight-county region that comprises the San Joaquin Valley 

Air Basin. As indicated in the map, Kern County is not completely in 

the District. 

FIGURE 1 

San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) Air Basin 

Applied Development Economics D-6 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703
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Appendix D: Socioeconomic Analysis September 20, 2007 

Applied Development Economics D-7 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

3. DESCRIPTION OF PROPOSED AMENDMENTS TO RULE 

4703 (STATIONARY GAS TURBINES) 

The Governing Board of the San Joaquin Valley Unified Air Pollution 

Control District (“District”) initially adopted Rule 4703 on August 18, 

1994 and it has been amended five times. The provisions of Rule 4703 

apply to all stationary gas turbine systems, which are subject to District 

permitting requirements, and with ratings equal to or greater than 0.3 

megawatt (MW) or a maximum heat input rating of more than 3,000,000 

Btu per hour. 

The latest amendments to Rule 4703 were in April 2002 and in August 

2006. The amendments of April 2002 specified NOx emissions limits of 

3 ppmvd (enhanced) or 5 ppmvd (standard), at 15% O2, for combined 

cycle units greater than 10 MW and for simple cycle units greater than 

10 MW with permit condition for greater than 877 hrs/yr operation. 

NOx emissions limits of 5 ppmvd (enhanced) or 25 ppmvd (standard), 

at 15% O2, were specified for simple cycle units greater than 10 MW 

with permit condition for no greater than 877 hrs/yr operation. The 

NOx emissions limits were developed based on a review of the existing 

source tests of turbines equipped with Selective Catalytic Reduction 

(SCR) and/or other control devices. 

For the units rated no more than 10 MW, the amendments of April 

2002 specified NOx emissions limits which are comparable to those 

achievable by a Dry, Low-NOx (DLN) system (25 ppmv) or with a 

water or steam injection system (35 ppmv). At the time of rule 

development, District staff considered the use of SCR on these units but 

there appeared to be difficulty with retrofitting these exiting units with 

SCR due to the physical space needed for the control. Since SCR is not 

possible to install at all locations, the 25 ppmv limit was required for 

units for which a DLN system was available. The 35 ppmv limit would 

apply to the units rated no more than 10 MW for which a DLN system 

was not commercially available. 

The amendments of August 2006 were limited in scope and were to 

allow operators the option to apply for more than two hours for each 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

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 Revised Proposed Amendments to Rule 4703

start-up or each shutdown or more than one hour for each reduced load 

period of a stationary gas turbine system.4. Methodology 

The socioeconomic analysis involves the use of information provided 

directly by affected sources and the District, as well as secondary data 

used to describe the industries affected by the proposed provisions of 

Draft Rule 4703. The approach is briefly described below. 

Applied Development Economics (ADE) began the analysis by 

preparing a statistical description of the industry groups of which the 

affected sources are a part, analyzing data on the number of jobs, sales 

levels, the typical profit ratios and other economic indicators for each 

industry. 

This report relies heavily on the most current data available from a 

variety of sources, such as the State of California’s Employment 

Development Department (EDD) Labor Market Information Division, 

Minnesota IMPLAN Group, and 2002 Economic Census. For 

purposes of estimating revenues generated by oil producers in the 

region, we turned to the State of California Department of 

Conservation, whose monthly report called “Monthly Oil and Gas 

Production and Injection Report” includes data on amount of barrels of 

oil and per unit sales price. For purposes of estimating profits, ADE 

relied on a mixture of sources, such as Dun and Bradstreet, United 

States Internal Revenues Service, and CCH, Incorporated. In addition, 

we reviewed a select number of corporate annual reports of Californiabased oil producers. 

With the above information, ADE was able to estimate after- tax net 

profit ratios for sources affected by the draft rule. Since the initial net 

profit ratio was based on national sources, we adjusted this profit rate to 

account for higher costs involved in producing petroleum in California 

relative to producing on-shore oil in other states. ADE calculated ratios 

of profit per dollar of revenue for affected industries. The result of the 

socioeconomic analysis shows what proportion of profits the 

compliance costs represent. Based on assumed thresholds of 

significance, ADE discusses in the report whether the affected sources 

are likely to reduce jobs as a means of recouping the cost of rule 

compliance or as a result of reducing business operations. To the extent 

that such job losses appear likely, the indirect multiplier effects of the 

jobs losses are estimated using a regional IMPLAN input-output model. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

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 Revised Proposed Amendments to Rule 4703

When analyzing the socioeconomic impacts of proposed new rules and 

amendments, ADE works closely within the parameters of accepted 

methodologies discussed in a 1995 California Air Resources Board 

report called “Development of a Methodology to Assess the Economic 

Impact Required by SB513/AB969” (by Peter Berck, PhD, UC Berkeley 

Department of Agricultural and Resources Economics, Contract No. 

93-314, August, 1995). The author of this report reviewed a 

methodology to assess the impact that California Environmental 

Protection Agency proposed regulations would have on the ability of 

California businesses to compete. The California Air Resources Board 

(ARB) has incorporated the methodologies described in this report in its 

own assessment of socioeconomic impacts of rules generated by ARB. 

One methodology relates to determining a level above or below which a 

rule and its associated costs is deemed to have significant impacts. 

When analyzing the degree to which its rules are significant or 

insignificant, ARB employs a threshold of significance that ADE 

follows. Berck reviewed the threshold in his analysis and wrote, “The 

Air Resources Board’s (ARB) use of a 10 percent change in [Return on 

Equity] ROE (i.e. a change in ROE from 10 percent to a ROE of 9 

percent) as a threshold for a finding of no significant, adverse impact on 

either competitiveness or jobs seems reasonable or even conservative.” 

In analyzing impacts to public sector entities, including enterprise fund 

activities with ratepayers, ADE analyzes annual costs as a percent of 

annual fund balance reserve. In addition, we examine annual costs in 

relation to monthly typical residential, industrial and commercial utility 

bills, in the event costs are passed on to ratepayers. If impacts fall 

within typical changes from year to the next with respect to either fund 

balance reserves or utility rates, ADE concluded that impacts are less 

than significant. As necessary, ADE examine costs and impacts to fund 

balance reserves and or monthly utility bills in relation to policy 

decisions with respect to other enterprise funds operated by impacted 

public entities, particularly with respect to how costs in some 

circumstances could be spread between various enterprise funds. 
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Appendix D: Socioeconomic Analysis September 20, 2007 

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 Revised Proposed Amendments to Rule 4703

5. SOCIOECONOMIC IMPACTS 

This section of the report compares the economic characteristics of 

affected industries against the compliance costs. The first part of this 

section discusses annual compliance costs. Section 5.2 discusses general 

business responses to compliance costs. Section 5.3 analyzes the 

socioeconomic impacts of amendments to Rule 4703. 

5.1 COMPLIANCE COST ESTIMATES 

Table 1 below includes information on the estimated costs associated 

with Draft Rule 4703. The District issued a summary of costs associated 

with the rule in a separate report called “Draft Staff Report: 

Amendments to Rule 4703” (June 2007). In that report, the District 

pegs the annual cost of the rule amendments between $12.0 million and 

$29.7 million (rounded), depending on scenario. Table 1 illustrates costs 

per the different scenarios. 

TABLE 1 

Annual Compliance Cost: SJVUAPCD and Industry Scenarios

New Low Annual 

Compliance Cost 

New High Annual 

Compliance Cost 

Retro Low Annual 

Compliance Cost 

Retro High Annual 

Compliance Cost 

Annual Cost of Compliance $12,035,512 $14,568,134 $17,092,338 $29,763,862 

Source: San Joaquin Valley Unified Air Pollution Control District 

5.2 BUSINESS RESPONSES TO COMPLIANCE COSTS 

Industries impacted by the draft rule may respond in a variety of ways 

when faced with new regulatory costs. These responses may range from 

simply absorbing the costs and accepting a lower rate of return, to 

shutting down the affected business operation altogether and, where 

practical, shift from lower-value to higher-value product and or service. 

It is important to note that this rule affects a wide range of businesses in 

various industries, including some independent oil producers. Many 

independent oil producers do not own any refining or retail outlets and 

thus have little control over the price they receive for their crude oil. As 

a result, independent producers cannot necessarily pass on higher costs, 
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 Revised Proposed Amendments to Rule 4703

 

fees and taxes assessed at the producer level to their customers. Affected 

sources may also seek to renew efforts to increase productivity and 

reduce costs elsewhere in their operation in order to recoup the 

regulatory costs and maintain profit levels. 

5.3 IMPACTS ON AFFECTED INDUSTRIES 

This section of the report analyzes estimated after tax net profits of 

affected industries against anticipated costs associated with 

implementation of the draft rule. The estimated annual compliance 

costs used in this analysis were provided to ADE by District staff and 

stakeholders. 

In calculating impacts of the proposed rule on profits, ADE used net 

profit data analyzed from corporate annual reports for several publicly 

traded companies whose facilities in the Central valley are subject to the 

rule amendments. For calculating impacts to oil producers, the report 

employs both Dun and Bradstreet’s long-term weighted-average aftertax net profit rates, which are adjusted downward to account for higher 

costs involved in producing petroleum in California versus the nation as 

a whole.1 The after tax net profit rate for affected oil producers is 7.65 

percent, which, when adjusted, translates to 6.96 percent. 

Table 2 below identifies the businesses operating a number of facilities 

in the San Joaquin Valley region that will be subject to rule amendments 

to Rule 4703. Many are publicly traded companies, and two are public 

agencies. 

1E. Hunter Herron, PhD, “Heavy Oil: A Solution to Dwidnling Domestic Oil Supplies”(September 2000) [in Petroleum 

Equities, Incorporate: http://www.petroleumequities.com/cgi-bin/site.cgi?t=5&p=heavyoil.html] and E. Hunter Herron, 

PhD, “Heavy Oil as the Key to US Energy Security”(December 2004)[in Petroleum Equities, Incorporate: 

http://www.petroleumequities.com/cgi-bin/site.cgi?t=5&p=heavyoil.html] : Almost half of all oil produced in California is 

“heavy”, which, along with natural bitumens, is difficult to produce economically because its low gravity retards flow within 

a reservoir. Crude oil is considered “heavy” if its API gravity is lower than 20 degrees and its viscosity is higher than 1,000

centipoise. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis September 20, 2007 

Applied Development Economics D-12 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

TABLE 2 Businesses and Public 

Agencies Whose Facilities Are 

Subject to Rule 4703 

CALIF STATE PRISON - AVENAL 

CHEVRON USA INC 

AERA ENERGY LLC 

BERRY PETROLEUM COMPANY 

PLAINS EXPLORATION & PRODUCTION COMPANY 

INERGY PROPANE LLC 

KERN OIL & REFINING COMPANY 

NORTHERN CALIFORNIA POWER AGENCY 

MODESTO IRRIGATION DISTRICT 

TURLOCK IRRIGATION DISTRICT 

CORN PRODUCTS INTERNATIONAL 

FRESNO/CLOVIS REGIONAL WWTP 

FRITO-LAY NORTH AMERICA INC 

GENERAL MILLS OPERATIONS, INC 

HERSHEY CHOC. & CONFECTIONARY 

PACIFIC BELL DBA SBC 

PACIFIC GAS & ELECTRIC CO 

SAINT AGNES MEDICAL CENTER 

SHELL PIPELINE COMPANY LP 

Source: San Joaquin Valley Unified Air Pollution Control District 

Table 3 below includes estimates on revenues and profits generated by 

facilities impacted by Rule 4703. Table 3 does not include Turlock 

Irrigation District and Northern California Power Agency, Rule 4703 

rule amendment impacts of which are analyzed separately (see Table 4). 

Table 3 includes revenue and profit figures are for facilities impacted by 

rule amendments, for the most part. However, Table 3 includes overall 

corporate-wide revenue and profit figures for AT&T and PG&E, which 

amount to $63.0 billion and $12.5 billion respectively. These figures are 

included on the grounds that these corporations as a whole will absorb 

their respective rule amendment costs given that these entities operate in 

a quasi-public manner, albeit profitable. Corporate headquarters of 

other affected sources such as Frito-Lay (PepsiCo), General Mills, and 

Corn Products International will review impacts of regulatory costs on a 

facility-by-facility basis, and, along with existing market conditions and 

future opportunities, make determinations as to whether facilities should 

remain open, shut-down partially or altogether close. 
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Applied Development Economics D-13 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

When all 16 businesses are included in the analysis, aggregate revenues 

amount to $83.1 billion, with net profits at $8.9 billion. Excluding 

AT&T and PG&E, revenues and net profits of the remaining 14 

impacted facilities amount to $7.5 billion and $524.4 million. These are 

revenues and profits generated by the 14 facilities, and are not 

corporate-wide financials. AT&T and PG&E will bear combined 

annual costs that range from $628,200 to $1.6 million. Impacts to their 

net profits fall below one percent. No net profit amount is calculated 

for public entities such as Avenal State Prison and the Fresno-Clovis 

Wastewater Treatment Plant. For Avenal, annual compliance costs are 

compared against annual operating revenues, which amount to 

$136,000,000. For Fresno-Clovis Wastewater Treatment Plant, 

compliance costs are compared against operating reserves, which over 

the last four years has averaged $17.2 million. 

Table 3 indicates cost-to-net profit ratios that in all scenarios fall well 

below the threshold of significance. Thus, the analysis concludes that 

proposed amendments to Rule 4703 result in less than significant 

impacts. In addition, as the analysis was performed on a facility-byfacility basis and in each case cost-to-net profit impacts were below 

significant, the analysis also concludes that proposed amendments to 

Rule 4703 do not result in disproportionate impacts to small businesses. 

[This space is intentionally blank] 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis September 20, 2007 

Applied Development Economics D-14 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

TABLE 3 

Socioeconomic Impacts Analysis of Proposed Amendments to Rule 4703 

All Affected 

Facilities of 

Businesses 

All Affected 

Facilities of 

Businesses 

(excluding AT&T 

and PGE 

revenues) 

Number of Impacted Businesses 16 14

Revenues $83,125,938,655 $7,531,938,655

Net Profits $8,851,409,874 $524,409,874

New Low Annual Compliance Cost $10,114,095 $10,742,323

New High Annual Compliance Cost $11,993,577 $12,758,200

Retro Low Annual Compliance Cost $13,864,641 $14,765,659

Retro High Annual Compliance Cost $23,270,465 $24,853,458

New Low Annual Compliance Cost Percent of Net Profits 0.1% 1.8%

New High Annual Compliance Cost As Percent of Net Profits 0.1% 2.1%

Retro Low Annual Compliance Cost As Percent of Net Profits 0.2% 2.5%

Retro High Annual Compliance Cost As Percent of Net Profits 0.3% 4.1%

Source: Applied Development Economics 

The socioeconomic analysis examines impacts to Turlock Irrigation 

District and the Northern California Power Agency separate from the 

other facilities and businesses included in Table 3 above. Impacts to 

these municipal electric companies are evaluated in two ways, i.e. 

impacts to accumulated fund balances and impacts to average monthly 

residential, commercial, and industrial electric bills. 

Table 4 shows that NCPA and its respective members will bear annuals 

aggregate costs ranging from $631,137 (“new low annual compliance 

cost”) to $2.1 million (“retro high annual compliance cost”). As a share 

of aggregate fund balances accumulated by NCPA member agencies, 

annual compliance costs range from 0.06 percent to 0.19 percent. See 

Appendix A for details on how aggregate costs and aggregate fund 

balances are distributed among NCPA members. Similarly, Table 4 

shows that annual compliance costs are a small percent of Turlock 

Irrigation District’s accumulated fund balance, ranging from a low of 0.4 

percent to a high of 1.4 percent. 

In short, for both NCPA and the Turlock Irrigation District, annual 

costs associated with proposed amendments to Rule 4703 are a small 

percent of typical accumulated fund balances carried by the Turlock, 

NCPA and NCPA members. As important, annual costs are within 
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Applied Development Economics D-15 Final Staff Report with Appendices for 

 Revised Proposed Amendments to Rule 4703

typical annual shifts in the respective accumulated fund balances of 

these entities. 

The Turlock Irrigation District and NCPA members may pass annual 

costs onto residential, commercial, institutional and industrial ratepayers, 

rather than absorb costs via their respective accumulated fund balances. 

Table 5 shows potential impacts with respect to average monthly 

residential, commercial and industrial bills. Depending on the cost 

scenario, residential customers living in areas served by NCPA members 

who share the Lodi-based 25-megawatt plant can expect cost increases 

ranging from 0.40 percent (“new low annual compliance cost”) to 1.37 

percent (“retro high annual compliance cost”). Residential customers of 

TID can expect impacts ranging from 0.59 percent (“new low annual 

compliance cost”) to 1.98 percent (“retro high annual compliance cost”). 

In short, across the board, impacts to monthly residential, commercial 

and industrial electric bills are less than significant, if the Turlock 

Irrigation District, NCPA, and NCPA members pass all costs onto 

ratepayers. 

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 Revised Proposed Am

TABLE 4 

NCPA and Turlock Irrigation District Impacts As Share of Accumulated Fund Balance 

Ann. Cost as Share of 3-Year Av

New Low Annual Compliance Cost 

New High Annual Compliance Cost 

Retro Low Annual Compliance Cost 

Retro High Annual Compliance Cost 

Aggregate 3-Year Average Fund Balance 

New Low Annual Compliance Cost 

New High Annual Compliance Cost 

Retro AnnuComCost 

NCPA (affected members only) $631,137 $845,677 $1,060,217 $2,132,917 $1,115,921,374 0.06% 0.08% 0.

Turlock Irrigation District $1,290,280 $1,728,880 $2,167,480 $4,360,480 $302,266,667 0.43% 0.57% 0.

$1,921,417 $2,574,557 $3,227,697 $6,493,397 $1,418,188,041 0.14% 0.18% 0.

Source: Applied Development Economics, based on SJVUAPCD and Comprehensive Annual Financial Reports (CAFRs) of various NCPA municipal 

impacted by proposed amendments to Rule 4703. 

TABLE 5 

NCPA and Turlock Irrigation District Impacts As Share of Monthly Bill 

Equivalent Dwelling Units Monthly Cost Per Equivalent Dwelling Unit Mon

Residential

CommercialOther Industrial Total EDUs Residential Commercial- Other Industrial Total EDUs Res

NCPA New Low Ann. Compliance Cost $631,137 160,699 15,270 2,333 178,302 $0.33 $3.49 $22.86 $0.30 0

New High Ann. Compliance Cost $845,677 160,699 15,270 2,333 178,302 $0.44 $4.68 $30.64 $0.40 0Retro Low Ann. Compliance Cost $1,060,217 160,699 15,270 2,333 178,302 $0.56 $5.87 $38.41 $0.50 0

Retro High Ann. Compliance Cost $2,132,917 160,699 15,270 2,333 178,302 $1.12 $11.81 $77.27 $1.01 1

Turlock New Low Ann. Compliance Cost $1,290,280 70,715 25,962 766 97,443 $0.57 $1.10 $50.81 $1.10 0

New High Ann. Compliance Cost $1,728,880 70,715 25,962 766 97,443 $0.76 $1.47 $68.08 $1.48 0

Retro Low Ann. Compliance Cost $2,167,480 70,715 25,962 766 97,443 $0.95 $1.85 $85.35 $1.85 0

Retro High Ann. Compliance Cost $4,360,480 70,715 25,962 766 97,443 $1.91 $3.72 $171.70 $3.73 1

Source: Applied Development Economics, based on SJVUAPCD, US Bureau of Labor Statistics and Silicon Valley Power Agency and Turlock Irrigation District. 

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis

Applied Development Economics D-18 Final Staff Report with Appendices for 

Revised Proposed Amendments to Rule 4703

 

5.4 IMPACT ON SMALL BUSINESSES

In addition to analyzing the employment impacts of the proposed 

amendments to Rule 4703, state legislation requires that the 

socioeconomic analysis assess whether small businesses are 

disproportionately affected by air quality rules. This section begins by 

briefly summarizing how the state government defines small businesses 

for the purposes of qualifying certain businesses for various programs. 

This section concludes with a discussion as to whether the affected 

industries include small businesses and assesses whether those small 

businesses are disproportionately impacted by the new rule. 

DEFINITION OF A SMALL BUSINESS

For purposes of qualifying small businesses for bid preferences on state 

contracts and other benefits, the State of California defines small 

businesses in the following manner2. To be eligible for small business 

certification, a business: 

 Must be independently owned and operated; 

 Cannot be dominant in its field of operation; 

 Must have its principal office located in California 

 Must have its owners (or officers in the case of a corporation) 

domiciled in California; and 

 Together with its affiliates, be either: 

• A business with 100 or fewer employees, and an average 

gross receipts of $10 million or less over the previous tax 

years, or 

• A manufacturer with 100 or fewer employees 

As the analysis was performed on a facility-by-facility basis and in each 

case cost-to-net profit impacts were below significant, the analysis 

2 State of California. Department of General Services. “California Small Business Certification” (http: 

www.pd.dgs.ca.gov/smbus/sbcert.htm) 
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Appendix D: Socioeconomic Analysis

Applied Development Economics D-19 Final Staff Report with Appendices for 

Revised Proposed Amendments to Rule 4703

concludes that proposed amendments to Rule 4703 do not result in 

disproportionate impacts to small businesses. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis APPENDIX A: NCPA ANNUAL COST IMPACTS 

Approach 1 : Annual Compliance As Percent of Agency Reserves 

Distribution of Cost Based On Share of CT 1 Annual Cost as Share of 3-Ye

Share of CT 

No. 1: Lodibased 25-

Megawatt 

Plant 

New Low 

Annual 

Compliance 

Cost 

New High 

Annual 

Compliance 

Cost 

Retro Low 

Annual 

Compliance 

New Low 

Annual 

Compliance 

Cost 

Retro High New High 

Annual 

Compliance 

Cost 

C

Annual 

3-Year Average 

Fund Balance 

Compliance 

Cost Cost 

Alameda 13.09% $82,628 $110,716 $138,804 $279,241 $84,466,927 0.10% 0.13% Healdsburg 3.50% $22,090 $29,599 $37,108 $74,652 $20,229,829 0.11% 0.15% Lodi 34.78% $219,509 $294,126 $368,743 $741,829 $10,536,018 2.08% 2.79% Lompoc 3.50% $22,090 $29,599 $37,108 $74,652 $37,030,689 0.06% 0.08% Roseville 13.25% $83,632 $112,061 $140,489 $282,633 $259,547,437 0.03% 0.04% Santa Clara 25.00% $157,784 $211,419 $265,054 $533,229 $656,689,110 0.02% 0.03% Ukiah 5.45% $34,422 $46,123 $57,824 $116,329 $27,597,031 0.12% 0.17% NCPA 1.42% $8,981 $12,034 $15,087 $30,351 $19,824,333 0.05% 0.06% 

100.00% $631,137 $845,677 $1,060,217 $2,132,917 $1,115,921,374 0.06% 0.08% 

Applied Development Economics D-20 Final Staff Rep

 Revised Proposed Am
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis Applied Development Economics D-21 Final Staff Rep

 Revised Proposed Am

Approach 2: Annual Compliance Cost As Share of Monthly Bill 

Equivalent Dwelling Units Monthly Cost Per Equivalent Dwelling Unit M

New LowAnnual Compliance Cost Households 

CommercialOther Industrial Total EDUs Households Commercial- Other Industrial Total EDUs Househ

Alameda $82,628 30,000 1,527 48 31,575 $0.23 $4.51 $143.45 $0.22 0.25Healdsburg $22,090 4,379 645 108 5,132 $0.42 $2.85 $17.04 $0.36 0.73Lodi $219,509 22,262 1,562 101 23,925 $0.82 $11.71 $181.11 $0.76 0.89Lompoc $22,090 13,500 746 18 14,264 $0.14 $2.47 $102.27 $0.13 0.24Roseville $83,632 41,879 3,397 79 45,355 $0.17 $2.05 $88.22 $0.15 0.18Santa Clara $157,784 42,468 6,407 1,931 50,806 $0.31 $2.05 $6.81 $0.26 0.07Ukiah $34,422 6,211 986 48 7,245 $0.46 $2.91 $59.76 $0.40 0.81NCPA $8,981 $0.005 $0.05 $0.32 $0.004 0.07

$631,137 160,699 15,270 2,333 178,302 $0.33 $3.49 $22.86 $0.30 0.40

Equivalent Dwelling Units Monthly Cost Per Equivalent Dwelling Units M

New HighAnnual Compliance Cost Households 

CommercialOther Industrial Total EDUs Households Commercial- Other Industrial Total EDUs Househ

Alameda $110,716 30,000 1,527 48 31,575 $0.31 $6.04 $192.22 $0.29 0.33Healdsburg $29,599 4,379 645 108 5,132 $0.56 $3.82 $22.84 $0.48 0.98Lodi $294,126 22,262 1,562 101 23,925 $1.10 $15.69 $242.68 $1.02 1.19Lompoc $29,599 13,500 746 18 14,264 $0.18 $3.31 $137.03 $0.17 0.32Roseville $112,061 41,879 3,397 79 45,355 $0.22 $2.75 $118.21 $0.21 0.24Santa Clara $211,419 42,468 6,407 1,931 50,806 $0.41 $2.75 $9.12 $0.35 0.10Ukiah $46,123 6,211 986 48 7,245 $0.62 $3.90 $80.08 $0.53 1.08NCPA $12,034 $0.006 $0.07 $0.43 $0.006 0.10

$845,677 160,699 15,270 2,333 178,302 $0.44 $4.68 $30.64 $0.40 0.54
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix D: Socioeconomic Analysis Applied Development Economics D-22 Final Staff Rep

 Revised Proposed Am

Equivalent Dwelling Units Monthly Cost Per Equivalent Dwelling Units M

Retro LowAnnual Compliance Cost Households 

CommercialOther Industrial Total EDUs Households Commercial- Other Industrial Total EDUs Househ

Alameda $138,804 30,000 1,527 48 31,575 $0.39 $7.57 $240.98 $0.37 0.42Healdsburg $37,108 4,379 645 108 5,132 $0.71 $4.79 $28.63 $0.60 1.23Lodi $368,743 22,262 1,562 101 23,925 $1.38 $19.67 $304.24 $1.28 1.49Lompoc $37,108 13,500 746 18 14,264 $0.23 $4.15 $171.79 $0.22 0.40Roseville $140,489 41,879 3,397 79 45,355 $0.28 $3.45 $148.20 $0.26 0.30Santa Clara $265,054 42,468 6,407 1,931 50,806 $0.52 $3.45 $11.44 $0.43 0.12Ukiah $57,824 6,211 986 48 7,245 $0.78 $4.89 $100.39 $0.67 1.35NCPA $15,087 $0.008 $0.08 $0.54 $0.007 0.12

$1,060,217 160,699 15,270 2,333 178,302 $0.56 $5.87 $38.41 $0.50 0.68

Equivalent Dwelling Units Monthly Cost Per Equivalent Dwelling Units M

Retro HighAnnual Compliance Cost Households 

CommercialOther Industrial Total EDUs Households Commercial- Other Industrial Total EDUs Househ

Alameda $279,241 30,000 1,527 48 31,575 $0.78 $15.24 $484.79 $0.74 0.84Healdsburg $74,652 4,379 645 108 5,132 $1.42 $9.64 $57.60 $1.21 2.48Lodi $741,829 22,262 1,562 101 23,925 $2.78 $39.58 $612.07 $2.58 3.00Lompoc $74,652 13,500 746 18 14,264 $0.46 $8.34 $345.61 $0.44 0.80Roseville $282,633 41,879 3,397 79 45,355 $0.56 $6.93 $298.14 $0.52 0.61Santa Clara $533,229 42,468 6,407 1,931 50,806 $1.05 $6.94 $23.01 $0.87 0.24Ukiah $116,329 6,211 986 48 7,245 $1.56 $9.83 $201.96 $1.34 2.72NCPA $30,351 $0.016 $0.17 $1.08 $0.014 0.25

$2,132,917 160,699 15,270 2,333 178,302 $1.12 $11.81 $77.27 $1.01 1.37