# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-1 Final Staff Report with Appendices for

Revised Proposed Amendments to Rule 4703 

# APPENDIX D

Socioeconomic Impact An alysis for Revised

Proposed Amendments to Rule 4703 (Sta tionary Gas Turbines)

September 20, 2007

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-2 Final Staff Report with Appendices for

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 • Sacram ento, 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

.....................................18 Definition Of A Small Business

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-5 Final Staff Report with Appendices for

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 pr oposed 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 amendmen ts 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 th at 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 soci oeconomic 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 propos ed amendments to Rule 4703, and

can assist staff in preparing a refine d 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

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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 wi th 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 (3 5 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

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-8 Final Staff Report with Appendices for

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 an d other economic indicators for each

industry.

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

variety of sources, such as the St ate 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 repor t 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 corpor ate 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 reduci ng business operations. To the extent

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

jobs losses are estimated using a regi onal IMPLAN input-output model.

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-9 Final Staff Report with Appendices for

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 M ethodology to Assess the Economic

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

Department of Agricultural an d 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 residentia l, 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, AD E 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.

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-10 Final Staff Report with Appendices for

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 busine ss operation altogether and, where

practical, shift from lower-value to hi gher-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,

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

Applied Development Economics 

# D-11 Final Staff Report with Appendices for

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.

1 

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

Equities, Incorporate: http://www.petroleumequities.com/cg i-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 Petroleu m 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 lo w gravity retards flow within

a reservoir. Crude oil is considered “heavy ” if its API gravity is lower than 20 degr ees 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.

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

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 pr ofits 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

(excludin g 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 examin es 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 NC PA 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

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Socioeconomic Analysis September 20, 2007

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, inst itutional 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 complianc e cost”). Residential customers of

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

compliance cost”) to 1.98 percent (“re tro 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.

[This space is intentionally blank]SAN JOAQUIN VALLEY UNIFIED AIRPOLLUTION CONTROL DISTRICTAppendix D: SocioeconomicAnalysisSeptember 20, 2007



# Applied Development EconomicsD-16Final Staff Report with Appendices forRevised Proposed Amendments to Rule 4703TABLE 4NCPA and Turlock Irrigation District Impacts As Share of Accumulated Fund BalanceAnn.CostasShare of 3-Year Average Fund BalanceNew LowAnnualComplianceCostNew HighAnnualComplianceCostRetro LowAnnualComplianceCostRetro HighAnnualComplianceCostAggregate 3-YearAverage FundBalanceNew LowAnnualComplianceCostNew HighAnnualComplianceCostRetro LowAnnualComplianceCostRetro HighAnnualComplianceCostNCPA (affected members only)$631,137$845,677$1,060,217$2,132,917$1,115,921,3740.06%0.08%0.10%0.19%Turlock Irrigation District$1,290,280$1,728,880$2,167,480$4,360,480$302,266,6670.43%0.57%0.72%1.44%$1,921,417$2,574,557$3,227,697$6,493,397$1,418,188,0410.14%0.18%0.23%0.46%Source: Applied Development Economics, based on SJVUAPCD and Comprehensive Annual Financial Reports (CAFRs) of various NCPA municipal electric companiesimpacted by proposed amendments to Rule 4703.TABLE 5NCPA and Turlock Irrigation District Impacts As Share of Monthly BillEquivalent Dwelling UnitsMonthly Cost Per Equivalent Dwelling UnitMonthly Cost Impact Per Avg. Mos. BillResidentialCommercialOtherIndustrialTotalEDUsResidentialCommercial-OtherIndustrialTotalEDUsResidentialCommercial-OtherIndustrialNCPANew Low Ann. Compliance Cost$631,137160,69915,2702,333178,302$0.33$3.49$22.86$0.300.40%0.83%0.66%New High Ann. Compliance Cost$845,677160,69915,2702,333178,302$0.44$4.68$30.64$0.400.54%1.11%0.89%Retro Low Ann. Compliance Cost$1,060,217160,69915,2702,333178,302$0.56$5.87$38.41$0.500.68%1.39%1.11%Retro High Ann. Compliance Cost$2,132,917160,69915,2702,333178,302$1.12$11.81$77.27$1.011.37%2.80%2.24%TurlockNew Low Ann. Compliance Cost$1,290,28070,71525,96276697,443$0.57$1.10$50.81$1.100.59%0.69%0.85%New High Ann. Compliance Cost$1,728,88070,71525,96276697,443$0.76$1.47$68.08$1.480.79%0.93%1.14%Retro Low Ann. Compliance Cost$2,167,48070,71525,96276697,443$0.95$1.85$85.35$1.850.98%1.16%1.43%Retro High Ann. ComplianceCost$4,360,48070,71525,96276697,443$1.91$3.72$171.70$3.731.98%2.34%2.87%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: Soci oeconomic 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.



# D EFINITION 

# O F 

# A S MALL 

# B USINESS



# 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 manner 2 

# . 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 fa cility-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 Sm all Business Certification” (http:

www.pd.dgs.ca.gov/sm bus/sbcert.htm)

# SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix D: Soci oeconomic 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 AIRPOLLUTION CONTROL DISTRICTAppendix D: SocioeconomicAnalysisSeptember 20, 2007APPENDIX A: NCPA ANNUAL COST IMPACTSApproach 1 : Annual Compliance As Percent of Agency ReservesDistribution of Cost Based On Share of CT 1Annual Cost as Share of 3-Year Average Fund BalanceShare of CTNo. 1: Lodibased 25-MegawattPlantNew LowAnnualComplianceCostNew HighAnnualComplianceCostRetro LowAnnualComplianceNew LowAnnualComplianceCostRetro HighNew HighAnnualComplianceCostRetro LowAnnualComplianceCostRetro HighAnnualComplianceCostAnnual3-Year AverageFund BalanceComplianceCostCostAlameda13.09%$82,628$110,716$138,804$279,241$84,466,9270.10%0.13%0.16%0.33%Healdsburg3.50%$22,090$29,599$37,108$74,652$20,229,8290.11%0.15%0.18%0.37%Lodi34.78%$219,509$294,126$368,743$741,829$10,536,0182.08%2.79%3.50%7.04%Lompoc3.50%$22,090$29,599$37,108$74,652$37,030,6890.06%0.08%0.10%0.20%Roseville13.25%$83,632$112,061$140,489$282,633$259,547,4370.03%0.04%0.05%0.11%Santa Clara25.00%$157,784$211,419$265,054$533,229$656,689,1100.02%0.03%0.04%0.08%Ukiah5.45%$34,422$46,123$57,824$116,329$27,597,0310.12%0.17%0.21%0.42%NCPA1.42%$8,981$12,034$15,087$30,351$19,824,3330.05%0.06%0.08%0.15%100.00%$631,137$845,677$1,060,217$2,132,917$1,115,921,3740.06%0.08%0.10%0.19%



# Applied Development EconomicsD-20Final Staff Report with Appendices forRevised Proposed Amendments to Rule 4703SAN JOAQUIN VALLEY UNIFIED AIRPOLLUTION CONTROL DISTRICTAppendix D: SocioeconomicAnalysisSeptember 20, 2007



# Applied Development EconomicsD-21Final Staff Report with Appendices forRevised Proposed Amendments to Rule 4703Approach 2: Annual Compliance Cost As Share of Monthly BillEquivalent Dwelling UnitsMonthly Cost Per Equivalent Dwelling UnitMonthly Cost Impact Per Avg. Mos. BillNew LowAnnualComplianceCostHouseholdsCommercialOtherIndustrialTotal EDUsHouseholdsCommercial-OtherIndustrialTotalEDUsHouseholdsCommercial-OtherIndustrialAlameda$82,62830,0001,5274831,575$0.23$4.51$143.45$0.220.25%0.91%1.03%Healdsburg$22,0904,3796451085,132$0.42$2.85$17.04$0.360.73%0.93%0.20%Lodi$219,50922,2621,56210123,925$0.82$11.71$181.11$0.760.89%2.37%1.30%Lompoc$22,09013,5007461814,264$0.14$2.47$102.27$0.130.24%0.81%1.19%Roseville$83,63241,8793,3977945,355$0.17$2.05$88.22$0.150.18%0.42%0.64%Santa Clara$157,78442,4686,4071,93150,806$0.31$2.05$6.81$0.260.07%0.08%0.21%Ukiah$34,4226,211986487,245$0.46$2.91$59.76$0.400.81%0.95%0.70%NCPA$8,981$0.005$0.05$0.32$0.0040.07%0.15%0.03%$631,137160,69915,2702,333178,302$0.33$3.49$22.86$0.300.40%0.83%0.66%Equivalent Dwelling UnitsMonthly Cost Per Equivalent Dwelling UnitsMonthly Cost Impact Per Avg. Mos. BillNew HighAnnualComplianceCostHouseholdsCommercialOtherIndustrialTotal EDUsHouseholdsCommercial-OtherIndustrialTotalEDUsHouseholdsCommercial-OtherIndustrialAlameda$110,71630,0001,5274831,575$0.31$6.04$192.22$0.290.33%1.22%1.38%Healdsburg$29,5994,3796451085,132$0.56$3.82$22.84$0.480.98%1.25%0.27%Lodi$294,12622,2621,56210123,925$1.10$15.69$242.68$1.021.19%3.18%1.75%Lompoc$29,59913,5007461814,264$0.18$3.31$137.03$0.170.32%1.08%1.59%Roseville$112,06141,8793,3977945,355$0.22$2.75$118.21$0.210.24%0.56%0.85%Santa Clara$211,41942,4686,4071,93150,806$0.41$2.75$9.12$0.350.10%0.11%0.28%Ukiah$46,1236,211986487,245$0.62$3.90$80.08$0.531.08%1.28%0.93%NCPA$12,034$0.006$0.07$0.43$0.0060.10%0.20%0.05%$845,677160,69915,2702,333178,302$0.44$4.68$30.64$0.400.54%1.11%0.89%SAN JOAQUIN VALLEY UNIFIED AIRPOLLUTION CONTROL DISTRICTAppendix D: SocioeconomicAnalysisSeptember 20, 2007



# Applied Development EconomicsD-22Final Staff Report with Appendices forRevised Proposed Amendments to Rule 4703Equivalent Dwelling UnitsMonthly Cost Per Equivalent Dwelling UnitsMonthly Cost Impact Per Avg. Mos. BillRetro LowAnnualComplianceCostHouseholdsCommercialOtherIndustrialTotal EDUsHouseholdsCommercial-OtherIndustrialTotalEDUsHouseholdsCommercial-OtherIndustrialAlameda$138,80430,0001,5274831,575$0.39$7.57$240.98$0.370.42%1.53%1.73%Healdsburg$37,1084,3796451085,132$0.71$4.79$28.63$0.601.23%1.57%0.33%Lodi$368,74322,2621,56210123,925$1.38$19.67$304.24$1.281.49%3.98%2.19%Lompoc$37,10813,5007461814,264$0.23$4.15$171.79$0.220.40%1.36%2.00%Roseville$140,48941,8793,3977945,355$0.28$3.45$148.20$0.260.30%0.70%1.07%Santa Clara$265,05442,4686,4071,93150,806$0.52$3.45$11.44$0.430.12%0.14%0.35%Ukiah$57,8246,211986487,245$0.78$4.89$100.39$0.671.35%1.60%1.17%NCPA$15,087$0.008$0.08$0.54$0.0070.12%0.25%0.06%$1,060,217160,69915,2702,333178,302$0.56$5.87$38.41$0.500.68%1.39%1.11%Equivalent Dwelling UnitsMonthly Cost Per Equivalent Dwelling UnitsMonthly Cost Impact Per Avg. Mos. BillRetro HighAnnualComplianceCostHouseholdsCommercialOtherIndustrialTotal EDUsHouseholdsCommercial-OtherIndustrialTotalEDUsHouseholdsCommercial-OtherIndustrialAlameda$279,24130,0001,5274831,575$0.78$15.24$484.79$0.740.84%3.08%3.49%Healdsburg$74,6524,3796451085,132$1.42$9.64$57.60$1.212.48%3.16%0.67%Lodi$741,82922,2621,56210123,925$2.78$39.58$612.07$2.583.00%8.01%4.41%Lompoc$74,65213,5007461814,264$0.46$8.34$345.61$0.440.80%2.73%4.02%Roseville$282,63341,8793,3977945,355$0.56$6.93$298.14$0.520.61%1.40%2.15%Santa Clara$533,22942,4686,4071,93150,806$1.05$6.94$23.01$0.870.24%0.27%0.70%Ukiah$116,3296,211986487,245$1.56$9.83$201.96$1.342.72%3.22%2.35%NCPA$30,351$0.016$0.17$1.08$0.0140.25%0.50%0.12%$2,132,917160,69915,2702,333178,302$1.12$11.81$77.27$1.011.37%2.80%2.24%