Staff Report: page 1 of 20 November 12, 2010

Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

NORTHERN SONOMA COUNTY AIR POLLUTION CONTROL DISTRICT

Proposed Regulation 1, Rule 221: 

Federal Permitting for Sources of Greenhouse Gases

Staff Report

Executive Summary

The Northern Sonoma County Air Pollution Control District is proposing to adopt a new 

regulation and to modify an existing regulation, in response to federal requirements. Proposed 

new Regulation 1, Rule 221, Federal Permitting of Greenhouse Gas Emissions, will implement 

the requirements of the U.S. Environmental Protection Agency’s Tailoring Rule for greenhouse 

gases. Proposed changes to Regulation 1, Rule 130 will incorporate definitions and thresholds 

required to maintain federal approval of the District’s program. The proposals are expected to 

have a net positive environmental impact, and no significant adverse economic impacts. The 

proposals also comply with restrictions in California law that prohibit the District from adopting 

changes to certain rules that make them less stringent.

Background

The federal Clean Air Act (CAA, or “the Act”) establishes requirements for specified sources of 

air pollution to obtain preconstruction permits under a program called “Prevention of Significant 

Deterioration” or “PSD.” This program was created to ensure that, in areas that meet federal

standards for ambient air quality, new industrial activity does not significantly degrade air 

quality. The U.S. Environmental Protection Agency (EPA) has established regulations to 

implement the PSD program, and these regulations are codified under 40 CFR Part 52.21. The 

Northern Sonoma County Air Pollution Control District (District) implements these federal 

permitting requirements with its Regulation 1, Rule 220, which has been approved by EPA into 

the State Implementation Plan (SIP). Because the District’s rule is in the SIP, it is federally 

enforceable and operates in place of the otherwise applicable federal rule. The District’s 

Regulation 1, Rule 220 integrates federal requirements with state and local requirements for 

preconstruction review of new or modified industrial activities into one, seamless program. This 

includes, among other things, requirements needed to protect the Sonoma and Lake County 

region from degradation of air quality due to hydrogen sulfide emissions from geothermal power 

plants in the Geysers area. The District’s rule is therefore more restrictive than the federal 

requirements in certain respects.

The CAA also requires that certain large industrial sources (referred to as “Major Sources”) of 

air pollution obtain and maintain federally enforceable operating permits under Title V of the 

Act. EPA has specified the requirements for these permits under 40 CFR Part 70. The District 

implements an EPA-approved Title V permitting program through its Regulation 5. 

Federal PSD: Federal PSD requires that new sources with air pollution emissions above 

specified levels, and modifications to existing sources that result in air pollution emissions above 
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Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

specified levels, undergo analysis to determine their impacts on the surrounding airshed, and on 

any Class I, Class II, or Class III designated areas1. This analysis can include computer 

modeling of dispersion of the pollutants in the air, air quality monitoring, and assessment of the 

use of pollution growth increments, depending on the pollutant in question. The project must 

also use “Best Available Control Technology” (BACT) to minimize pollutant emissions.

The levels at which PSD applies, and the type of analysis required, depends on the pollutants 

emitted by the project. Emission thresholds are provided for “criteria” air pollutants, which are 

the pollutants for which EPA has established individual criteria for regulation. These include 

smog-forming pollutants, particulate matter, sulfur dioxide, other sulfur compounds, as well as

certain toxic pollutants, such as asbestos, beryllium, lead, and mercury. There is also a general 

threshold for “other regulated pollutants.”

Federal Title V Permits: Title V of the Act requires large industrial sources to hold federally 

enforceable operating permits. Under this program, federal permits are issued to affected 

sources for a term of five years. The permits are required to contain all applicable requirements 

under the Act. This includes any limitations, monitoring, testing, recordkeeping, and reporting, 

that apply to the source as a result of preconstruction reviews (e.g., PSD), or from other 

regulations adopted by EPA, or the state or local air agency with jurisdiction. In California, the 

permit must therefore include the rules and regulations of the state Air Resources Board (ARB) 

and the local air district that have been approved into the SIP. Unlike other local operating 

permits, these permits are enforceable by EPA and by independent, third parties through action 

in federal court.

One important element of Title V and the Part 70 program is that the applicability of permitting 

requirements is based on the source’s “Potential to Emit” rather than its actual emissions. For 

some sources, especially those that routinely operate at or near their maximum capacity nearly 

all of the time, actual and potential emissions may be very close. These kinds of sources 

typically include large manufacturing facilities, petroleum refineries, and power plants. But for 

other sources, actual and potential emissions can be widely disparate. For example, an autobody 

shop with a paint spray gun could potentially operate that spray gun at its maximum coating 

throughput, twenty-four hours per day, three-hundred and sixty five days per year. Without 

emissions control equipment, that single paint spray gun could release enough air pollution to 

exceed the federal thresholds to be considered a Major Source. However, in actual practice, the 

operator of the spray gun works a forty-hour week, and even then is not spraying paint the entire 

time, so the actual emissions are much smaller than the potential emissions. 

Federal Regulatory Changes: EPA has made several regulatory changes that necessitate 

changes to the District’s implementation of PSD and Title V. These include: (1) the inclusion of 

greenhouse gases (GHGs) as a “regulated pollutant” under the CAA; (2) the passage of an 

 1 EPA designates areas based on the degree to which the natural habitat requires protection. Class I areas are 

assigned the most stringent growth increments. These are areas of special national or regional natural, scenic, 

recreational, or historic value. In addition to the growth increments, when a project is predicted to impact a Class I 

area, the Federal Land Manager for that area determines whether the project will have an unacceptable impact on 

“air quality related values.”
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“Interstate Transport Regulation” that mandates the use of certain definitions; and (3) the 

establishment of thresholds and growth increments.

1. New Federal Requirements for GHGs – In 2009, following a decision of the U.S. 

Supreme Court2, EPA issued an “Endangerment Finding” for GHGs under the CAA. 

This was the first step towards regulating this group of pollutants under the Act. Then in

April of 2010, the Administrator of EPA signed new regulations under the CAA with 

emission standards for GHGs from motor vehicles. At the same time, EPA issued an 

Interpretive Ruling to clarify that GHGs would not become “regulated pollutants” under 

the Act until the first compliance date of the effective emission standard. 

In May of 2010, the Administrator signed another rule, commonly referred to as the 

“Tailoring Rule” which adjusted, or “tailored”, the applicability thresholds for federal 

permitting requirements for GHGs and provided an implementation schedule. The 

Tailoring Rule was needed because the primary GHG, carbon dioxide (CO2) is emitted at 

vastly higher rates from most operations and processes than the pollutants historically 

regulated under the CAA. Specifically, the emission threshold for “other regulated 

pollutants” is 100 tons per year for Title V, and is “any emission rate whatsoever” for

other sources under the District’s PSD program. Even a household water heater will emit 

CO2 at these levels, and household water heaters are clearly not large industrial sources. 

The Tailoring Rule specifically does three things: (1) it establishes the list of GHG 

pollutants, along with their global warming potential (GWP), regulated as CO2 

equivalents (CO2e); (2) it establishes thresholds for permitting requirements to apply; 

and (3) it establishes schedules for the requirements to apply.

The term “CO2e” means that all GHGs are expressed in CO2 equivalents based on their 

global warming potential, or GWP, relative to CO2. CO2 has a GWP of 1. Methane is 

twenty-one times more effective at warming the atmosphere when compared to CO2, so 

it has a GWP of 21. To determine the CO2e emissions from a source, the mass emissions 

of the individual GHG are multiplied by the GWP of that GHG; this is done for each 

GHG and then all are added together. To complete the example, a source with 1 ton of 

CO2 and 1 ton of methane emissions is said to emit 22 tons of CO2e.

Under the Tailoring Rule, GHG permitting happens in two phases, as follows:

I. Beginning on January 2, 2011, any source that is required to have a PSD permit 

for other reasons must address GHG emissions if those emissions have the 

potential to exceed 75,000 tons per year CO2e. Further, any source that is 

required to have a Title V permit for other reasons must include any GHG 

requirements in that permit.

II. Beginning on July 1, 2011, in addition to the thresholds above, a source must 

have a PSD permit based solely on its GHG emissions if it is a new source that 

has the potential to emit at least 100,000 tons per year of CO2e, or if it is an 

existing source with potential emissions of 100,000 tons per year of CO2e that

 2 Massachusetts v. EPA, 549 U.S. 497 (2007)
Staff Report: page 4 of 20 November 12, 2010

Proposed Regulation 1, Rule 221

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undertakes a modification with a potential emissions increase of 75,000 tons per 

year. Further, any existing source with potential emissions of 100,000 CO2e must 

also have a Title V permit.

Note: There is also a “mass-basis” requirement. This is a separate threshold for GHG 

emissions that does NOT consider GWP. In addition to meeting the CO2e 

thresholds above, the source must also have potential to emit at least 100 tons per 

year of total GHGs without considering GWP in order to need a PSD or Title V 

permit if the source is in a specifically listed category, and 250 tons per year if the 

source is not in one of those special categories3. 

2. New Federal Definitions- EPA has adopted several new definitions, and also refined 

required language that regulations must contain in order to be approvable in the SIP. 

These updates are required when the District makes changes to its regulations for other 

reasons, and must be made in order to retain federal approval of the District’s program. 

EPA has identified changes that are needed in three areas: the elimination of dates in 

certain definitions, the inclusion of specific language in existing definitions related smogforming pollutants, and the incorporation of specific definitions for separate size fractions 

of particulate matter. 

3. New Thresholds and Increments- EPA has also adopted new and revised significant 

emission levels and increments of allowable pollution growth for the PSD program. 

Allowable increments represent the amount of pollution an individual project can add to 

existing ambient pollution levels, depending on the classification of the area. Allowable 

increments are most restrictive in pristine environments, designated as Class I areas.

Existing Local Program

The District implements a comprehensive program to evaluate the expected air quality impacts 

of stationary, portable, and other non-mobile sources, and where appropriate, to ensure those 

sources are constructed and operated in a manner that reduces the expected impacts. This 

program includes, among other things, review of new or modified sources through 

preconstruction permits, ongoing regulation of sources through operating permits and applicable 

emission standards, and regular inspection of these sources to ensure that they comply with all 

applicable requirements. In addition to this program that applies to all sources, the District 

implements and enforces requirements of the ARB, and federal requirements from the CAA and 

its implementing regulations. These specifically include a SIP-approved program for PSD 

pursuant to 40 CFR Part 52.21, and a federally approved Title V program under 40 CFR Part 70. 

These two federal programs are described in greater detail below.

 3 Although it may seem unlikely that a source could emit less than 100 tons per year of GHGs on a mass basis and 

emit more than 100,000 tons of CO2e, it is in fact possible. Some of the GWP factors are significantly higher than 

1,000, especially the refrigerants. So a source could emit 5 tons per year of sulfur hexafluoride (SF6) on a massbasis, and have 119,500 tons per year of CO2e emissions, because the GWP of SF6 is 23,900.
Staff Report: page 5 of 20 November 12, 2010

Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

District’s PSD Program: The District’s Regulation 1 sets forth the principle permitting 

requirements for stationary sources, including certain prohibitions and performance standards. 

Within Regulation 1, Rule 130 provides definitions of terms that support and direct 

implementation of other rules within the Regulation. General permitting requirements are set 

forth in Rule 200. This rule requires that all stationary sources of air pollution obtain an 

Authority to Construct (ATC) prior to building, installing, or operating equipment or processes 

that may release, or change the release of any air pollutant, including air pollution control 

equipment, unless the equipment or activity has been exempted by the Air Pollution Control 

Officer (APCO). The ATC also serves as a temporary operating permit; upon startup of the 

equipment, the District verifies its compliance with the terms of the ATC, and then issues a 

Permit to Operate (PTO). The PTO is renewed on an annual basis and serves as the foundation 

for compliance and enforcement. 

Rule 200 also requires that any stationary source with emissions defined as “significant” in Rule 

130 must comply with the requirements of Rule 220. This rule includes provisions for state and 

local requirements for review of new and modified stationary sources, for review in compliance 

with the federal PSD program, and special provisions for the permitting of power plants that are

also subject to licensing by the California Energy Commission. Rule 220 requires the source to 

install and implement BACT, as determined by the APCO. It also requires the source to 

undertake a modeling analysis and to comply with the “Increment” limitations of the federal PSD 

program for pollutants for which such increments have been established. These increments serve 

as a measure of the expected degradation of air quality due to the increased emissions associated 

with the new or modified stationary source. Allowable increments for PSD are defined in Rule 

130(p7), and are summarized in Appendix A.

Air monitoring is also required of pre- and post- project conditions; however, for geothermal 

power plants, the Geysers Air Monitoring Program4 (GAMP) fulfills the air monitoring 

requirements of PSD.

Significant emission levels, i.e. the emission increases from new or modified sources at which 

these requirements apply, are defined in Rule 130(s2) and are summarized in Appendix A. 

These thresholds are more restrictive for new sources than the thresholds in the federal rule.

District’s Title V Program: The 1990 Amendments to the federal Clean Air Act 

(Amendments) established a national requirement for a federally enforceable operating permit 

program under Title V of the Amendments. As previously mentioned, these permits are intended 

to incorporate all applicable requirements, and they must meet standards specified by EPA in 

terms of form and content5

 4 GAMP is a public-private partnership between the District, the geothermal plant operators, the Lake County Air 

Quality Management District, the state Air Resources Board, the California Energy Commission, and 

representatives of the downwind community that operates air monitoring equipment throughout the geothermal 

generating region in Sonoma and Lake Counties.

. They are renewed on a five year cycle, and the renewal is subject to 

the review of EPA, as well as formal public comment. Because of the complexity and cost 

5 Reference 40 CFR Part 70
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Proposed Regulation 1, Rule 130 Revisions

associated with the federal standards and process, these permits are required only of sources that 

meet the federal definition of “Major Source” which is emissions-based and is intended to 

include large industrial operations. 

Federal permitting requirements are set forth in District Regulation 5. Regulation 5 applies to 

any stationary source with the potential to emit at least 100 tons per year of any regulated air 

pollutant, or at least 10 tons per year of any hazardous air pollutant (HAP)6, or 25 tons per year 

of any combination of HAPs. A source’s “potential to emit” or PTE is based on the maximum 

capacity of the source, operating 24 hours per day, 365 days per year, without consideration of 

any limitations or control equipment, unless the limits or controls are federally enforceable7

In order to make sure that federal permits are only required for the large sources that the Act 

envisioned as Major Sources, the District implements a General Prohibitory Rule to Limit 

Potential to Emit. This rule was developed as a model rule by the air districts, through the 

California Air Pollution Control Officers Association (CAPCOA), with ARB and EPA, in the 

mid 1990s. The District adopted the model rule under Regulation 1, Rule 494 in 1995. The rule 

establishes emission “limits” that shield smaller sources from federal permitting, provided the 

source keeps its actual emission less than half the threshold at which the source would be a 

Major Source based on potential emissions. So if the major source threshold is the potential to 

emit 100 tons per year of organic compounds, and the source keeps its actual emissions below 

50 tons per year, the source does not have to get a Title V permit. The District currently has 12

sources subject to permitting under Regulation 5.

.

Proposed Regulatory Changes

The District is proposing changes to adopt a separate regulation to implement the provisions of 

EPA’s Tailoring Rule, and to make revisions to definitions to Regulation 1, Rule 130, to address 

changes identified by EPA as necessary for approvability. The proposed changes include: (1) the 

adoption of a new rule, Regulation 1, Rule 221, Federal Permitting Requirements for Greenhouse 

Gases; (2) revisions to Rule 130 definitions to make them consistent with new and revised 

federal definitions; and (3) revisions to Rule 130 to include new thresholds under the definition 

of “significant” in 130(s2), and new allowable growth increments under the definition of “PSD 

Increment” in 130(p7).

Proposed New Regulation 1, Rule 221, Federal Permitting Requirements for Greenhouse 

Gases: The District is proposing to adopt a new regulation to implement federal permitting 

requirements for greenhouse gas emissions. The proposed rule is based on a model rule 

developed by District staff with the staff of other air districts, ARB, and EPA Region IX. 

 6 Hazardous air pollutants are listed pursuant to Section 112(b) of the CAA.

7 EPA was challenged on this definition of PTE and lost, with the courts finding that limits that are “legally and 

practically enforceable” must also be considered in determining PTE, however EPA has not yet changed all 

implementing regulations so the more restrictive definition is still in effect for certain programs.
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Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

Proposed Regulation 1, Rule 221 does three things: (1) it establishes thresholds for new and 

modified sources to be reviewed under the District’s PSD program in Rule 220; (2) it establishes

thresholds for existing sources to obtain federal operating permits under the District’s Title V 

program in Regulation 5; and (3) it establishes limits on PTE for GHGs (as was done for other 

regulated pollutants in Regulation 1, Rule 494) to ensure that sources whose actual emissions of 

GHGs are below thresholds do not have federal permitting requirements. 

1. Proposed GHG Requirements for New Sources- Proposed Regulation 1, Rule 221, has 

two implementation phases, consistent with EPA’s Tailoring Rule. Under Phase I, which 

begins on January 2, 2011, any new source that is otherwise subject to review under Rule 

220 must address its GHG emissions if those emissions are greater than or equal to 

75,000 tons per year of CO2e. In Phase II, which begins on July 1, 2011, the thresholds 

of Phase I continue, and in addition, any new or modified source that has the potential to 

emit at least 100,000 tons per year of CO2e must also comply with Rule 221 for its GHG 

emissions, even if it is not otherwise subject to the rule.

2. Proposed GHG Requirements for Existing Sources- During Phase I, the proposed Rule 

would require any source that is otherwise required to hold a Title V permit under 

District Regulation 5 to include in its permit any applicable requirements for GHGs. At 

this time, the only applicable requirements are reporting requirements and these may be 

incorporated at the time of permit renewal or other action, so the District does not 

anticipate opening existing Title V permits for the sole purpose of incorporating these 

requirements. The GHG requirements will be incorporated when a new Title V permit is 

issued, or when an existing permit is renewed or amended for other reasons. During 

Phase II, sources otherwise required to hold Title V permits must still incorporate GHG 

requirements; in addition, any source with the potential to emit at least 100,000 tons per 

year of CO2e must obtain a Title V permit regardless of whether emissions of other 

pollutants trigger the permitting requirement. The proposed Rule will also limit PTE for 

GHGs, in the same way that District Regulation 1, Rule 494 does for other pollutants. 

Under Proposed Rule 221, if a source maintains records that its actual emissions are 

below 50,000 tons per year of CO2e and submits an annual report to the District 

demonstrating this, the source does not have to obtain a Title V permit even if its PTE 

exceeds 100,000 tons per year.

3. Proposed GHG Requirements for Modified Sources- During Phase I, proposed Rule 

221 would require any source that is otherwise subject to review under Rule 220, that

undertakes a modification which will result in a net emissions increase greater than or 

equal to 75,000 tons per year of CO2e, will be required to comply with the requirements 

of District Regulation 1, Rule 220 for its GHG emissions. During Phase II, the proposed 

Rule would continue the requirements of Phase I for modified sources. In addition, the 

proposed Rule would require that if, before modification, a source has the potential to 

emit 100,000 tons per year of CO2e and undertakes a modification that will increase its 

emissions by 75,000 tons per year or more of CO2e, the source must comply with District 

Regulation 1, Rule 220. Further, the proposed Rule would also require a source to 

comply with District Regulation 1, Rule 220 if it undertakes a modification that would 
Staff Report: page 8 of 20 November 12, 2010

Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

increase its emissions by at least 100,000 tons per year of CO2e regardless of whether it 

was subject to Regulation 5 before the modification.

Note that thresholds for new and existing sources include the caveat that GHG emissions on 

a mass-basis (excluding global warming potential) must exceed 100 tons per year for source 

categories listed in Appendix B, or 250 tons per year for other sources. As explained above, 

the mass-basis provision ensures that sources with small emissions of GHGs with very high 

global warming potential are not subject to federal permitting requirements. In the case of 

modifications, the GHG emissions on a mass-basis must be greater than zero (that is, there 

must be some net emission increase).

The provisions of EPA’s Tailoring Rule will take effect regardless of whether the District 

implements them or not. The District would face EPA’s disapproval of its permitting programs 

for failure to incorporate these new requirements, and disapproval of the Title V program would 

result in federal sanctions.

It is important, however, to understand that the District’s PSD program is somewhat different 

from EPA’s regulation (40 CFR Part 52.21). The District’s program is a SIP-approved PSD 

program, which means that it replaces the federal rule within the jurisdiction of the District. That 

means that the interaction of the EPA’s Tailoring Rule with the District’s existing PSD program 

is also a different than the interaction between the Tailoring Rule with EPA’s PSD rule. The 

most important distinction here is that the emissions thresholds at which new sources are 

reviewed under the District’s program are lower than the thresholds in the federal rule. 

The effect of the different thresholds in the District’s program is in determining which new 

sources of air pollution would have to comply with PSD “anyway.” Under the District’s 

program, the thresholds defined as “significant” determine which new sources must comply with 

PSD requirements8

. If a new source that exceeds one of these thresholds also emits at least 

75,000 tons per year of CO2e, it will have to address its GHG emissions as well. In the past 10 

years, the District has received only two applications that meet this test, but would otherwise not 

be required to comply if the thresholds in the EPA’s PSD rule were in effect.

Proposed Changes to Regulation 1, Rule 130, Definitions: The District is proposing to make 

the following changes to Regulation 1, Rule 130: (1) eliminate certain references to dates; (2) 

change definitions for certain smog-forming pollutants and particulate matter; and (3) add 

significant emission rate thresholds and allowable growth increments for the PSD program. 

Each of the changes is described below.

1. Eliminating Certain References to Dates: The current language of Rule 130 references 

the “Federal Clean Air Act of 1977” in its preamble and in several of the individual 

definitions. The identification of the date of the Act may be argued to exclude 

subsequent revisions to the Act, and EPA has requested that this reference be struck. 

Further, Rule 130 also incorporates by reference the terms of the federal regulation in 40 

 8 Thresholds are listed in Appendix A in the table of Significant Emission Rates.
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Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

CFR Part 52.21 (which includes PSD), but identifies the rule as of the date August 7, 

1980. EPA has requested that this date also be struck from the rule.

The result of these changes is that as each subsequent revision of the Act, or of 40 CFR 

Part 52.21, either includes new definitions of terms, or revises prior definitions, those 

new or revised terms will automatically be included in the District’s rule, unless Rule 130 

specifically defines them in a different way. If the District’s rule has a specific 

definition, that definition will stand. Generally speaking, EPA requires that its 

definitions be used unless the District’s definition is more stringent. If the District has an 

existing definition that differs from a new or revised federal definition, and EPA 

determines the definition is not more stringent, EPA may then require the District to 

change it in order to retain approval of its program. 

Referencing federal definitions minimizes the number of changes the District must make 

to its rules. However, including specific definitions provides greater clarity and 

transparency for the regulated community and the public. The District endeavors to find 

an appropriate balance between the two by including specific definitions of terms that are 

most frequently used, or that are most important in determining requirements.

2. Changing Definitions: EPA is requiring changes to certain definitions in Rule 130. 

First, EPA is requiring that all PSD programs include definitions of two size fractions of 

particulate matter for which there are National Ambient Air Quality Standards: these 

include PM10, which is the size fraction of 10 microns or smaller, and PM2.5, which is the 

size fraction of 2.5 microns and smaller. The District is proposing to add these clarifying 

definitions into the existing definition of “particulate matter” in Rule 130(p1). Second, 

pursuant to rulemaking signed by the Administrator to address interstate transport of 

ozone and ozone-forming pollutants, EPA is requiring that all PSD programs include 

specific language defining air pollutants that react to form ozone. Specifically, EPA has 

requested that language be added to the definition of “precursor” under Rule 130(p6) to 

clarify that: volatile organic compounds (VOCs) are precursors to ozone; oxides of 

nitrogen (NOx) are precursors to both ozone and PM2.5; and oxides of sulfur (SOx) are 

precursors to PM2.5. EPA provided specific language for these new and revised 

definitions, and the District is proposing to use the exact language EPA provided.

The District does not anticipate that the changes to these definitions will result in any 

practical change in the implementation of the program, however the changes are 

necessary in order to maintain federal approval of the program.

3. Adding New Thresholds and Increments for PSD: Since the last changes were made to 

the District’s PSD program, EPA identified significant emission rates for several new 

pollutants, and is requiring the District to include them now. These include significance 

thresholds for PM2.5; the emissions of organic compounds, metals, and acid gases from 

municipal waste combustors; and emissions of non-methane gases from municipal solid 

waste landfills. The District is proposing to include these new thresholds in the existing 

definition of “significant” in Rule 130(s2). The proposed new thresholds are shown in 

Appendix A, in the table of Significant Emission Rates. 
Staff Report: page 10 of 20 November 12, 2010

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The District does not currently have any municipal waste incinerators, or any active 

municipal waste landfills; adding significant emission thresholds for their associated 

pollutants is only expected to affect any applications for new sources in these categories, 

and then only very large ones. The District does not expect such sources. It is important 

to note that these thresholds are technically in place already at the federal level, and 

failure to include them would result in loss of federal approval of the program.

The District is also proposing to add a threshold for GHGs in the definition of 

“significant” in 130(s2). This threshold references the thresholds in proposed Rule 221. 

This revision is being included because, as dicussed above, the District is removing a date 

from this definition as requested by EPA and without the added clarification for GHGs, 

there may be some unintended consequences. Specifically, the original definition of 

“significant” included a catch-all for “Other pollutants regulated under the Clean Air Act 

of 1977” and the District is proposing to strike the “1977” date. The Act of 1977 did not 

regulate GHGs; without that date, however, and as of 2010, GHGs are regulated 

pollutants under the Act. The emission rate associated with this significance threshold 

for “other pollutants” is “any emission rate whatsoever” which would mean virtually 

every combustion device no matter how small would then be subject to PSD permitting. 

By including a separate threshold for GHGs, the District will avoid that unintended 

outcome. The proposed threshold references the definitions in Rule 221 in part because 

they are so complicated, but also because EPA has indicated they will be reviewed and 

potentially revised. Having the thresholds in one place will limit the extent of 

rulemaking needed to respond to future changes by EPA.

As discussed previously, the PSD program includes allowable growth increments as a 

measure of the impact of a project on ambient air quality. EPA is requiring changes to 

the growth increments in the District’s program to reflect changes made in the federal 

program. These changes include the elimination of increments for “Total Suspended 

Particulate” and replacing them with increments for PM10 and PM2.5. EPA has also 

requested a clarification that for the increments for Nitrogen Dioxide, the phrase “annual 

average” means “annual arithmetic mean.”

The new increments for PM10 are very close to the previous increments for total 

particulate, and are not likely to have any practical impact on the District’s program. The 

PM2.5 increments are substantially lower, however, and may result in additional controls 

being required for certain large projects. The District receives, on average, less than one 

project per five years that might be affected by these new increments. Further, the 

increments are required by federal regulations, and failure to include them will result in 

the loss of federal approval of the District’s program.

Statutory Limitations and Statement of Compliance

In 2003, the California Legislature passed SB 288 (Sher) that restricts changes local air districts 

may make to their programs that implement federal New Source Review (NSR) and PSD. The 

bill was intended to prevent the weakening of these programs which would otherwise have 
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resulted from the implementation of certain federal regulatory reforms promulgated by EPA. 

The bill prohibits a district from adopting changes to its NSR or PSD program that have the 

effect of making the program less stringent than it was on December 31, 2002. The bill charges 

the ARB with reviewing program changes made by the districts to determine if the changes 

comply with SB 288.

The District’s PSD program on December 31, 2002, did not include any regulation of GHGs; 

including the regulation of GHGs has the effect of making the program more stringent, not less.

The District’s PSD program on December 31, 2002, did not include any significance thresholds 

for PM2.5, or for emissions from municipal waste combustors or municipal solid waste landfills. 

The addition of new thresholds for PM2.5, and for the various emissions from municipal waste 

combustors and landfills, make the program more stringent, not less stringent.

The District’s PSD program on December 31, 2002, had one set of PSD increments for total 

particulate. The proposed changes will include separate thresholds for PM10 and PM2.5. The 

PM2.5 thresholds are more stringent when compared on a size fraction basis to the previous 

threshold for total particulate that they replace.

The other changes and clarifications do not materially affect the interpretation of the rules that

make up the District’s PSD program.

Alternatives to Proposed Changes

The District is proposing to address two different requirements in a single rule-making; namely, 

the requirements for GHG permitting in the EPA’s Tailoring Rule, and revisions to the District’s 

SIP-approved PSD program required by EPA to retain federal approval of the program. 

Alternatives will be discussed separately for each requirement.

Alternatives to Proposed Regulation 1, Rule 221: Instead of proposing to implement the 

federal Tailoring Rule through proposed Regulation 1, Rule 221, the District could have 

proposed a different implementation approach, or could choose not to implement the 

requirements at all. There are clear consequences for each of these alternatives.

1. Alternative Approaches to Implementing the Tailoring Rule- The primary decision the 

District had to make in deciding how to implement the Tailoring Rule was whether to 

make individual changes to each of the rules in the programs that implement the 

District’s PSD and Title V programs, or to adopt a separate rule. The District chose to 

adopt a separate rule in part because staff believes it is simpler and clearer for the 

regulated community to have the new requirements in a single place. More importantly, 

the ARB has indicated that adopting a separate rule for the new requirements for GHGs is 

an important component of their determination that the action does not make the existing 

program less stringent, and thereby potentially violate the restrictions of SB 288. 

The next implementation choice is whether the District should rely on the Model Rule 

developed by CAPCOA and EPA or to develop its own rule format. District staff 
Staff Report: page 12 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

participated in the development of the Model Rule and is confident that the model would 

integrate properly with the District’s existing program. The Model Rule took three 

months to negotiate with EPA staff. This is a very short time frame for rule negotiations, 

and was possible because the Model Rule relies substantially on previously negotiated 

language that all parties found acceptable; only minor adjustments were needed to 

incorporate the specific requirements of the Tailoring Rule. Had the District chosen to 

develop its own, different rule, the negotiation would likely have taken much longer and 

the District would not have met the deadline to adopt the Tailoring Rule provisions. The 

actual requirements would still be the same even if the form of the regulation were 

different. However, failure to meet the deadline would mean that EPA would be 

implementing Tailoring Rule permitting requirements in lieu of the District which has 

certain consequences (see No Program Alternative discussion below).

2. No Program Alternative- The District could decide not to implement the requirements 

of the Tailoring Rule. The consequences of that decision are different for the PSD 

program and the Title V program. The District is not required by federal law to 

implement a PSD program, however if the District does implement a PSD program, it 

must meet minimum federal standards. The District currently implements an approved 

PSD program. If the District chose not to implement the Tailoring Rule, EPA would 

rescind its approval of the District’s PSD program, and would implement a PSD program 

in the District. This would mean that projects subject to PSD review would have to 

receive permits from EPA instead of the District. The District can typically issue a PSD 

permit within 2 to 3 months of receiving a complete application, including time for 

federal review of the draft permit, and public comment. EPA typically requires about 

two years because the Regional Office is not adequately staffed to provide quicker permit 

actions. In addition, appeals of EPA permit actions are to the federal Environmental 

Appeals Board in Washington D.C. and also take about 2 years, whereas appeals of 

District permits are to the District’s Hearing Board and can typically be completed in a 

matter of months. It is likely that some level of dual process for PSD permitting would 

continue after the effective date of the Tailoring Rule provisions, until EPA took final 

action to disapprove the District’s existing PSD program, which covers regulated 

pollutants other than GHGs; the District would issue the PSD permits for other pollutants, 

and EPA would issue the permits for GHGs. Once EPA took final action to disapprove 

the District’s program, because SB 288 prevents the District from weakening its program, 

the District would still be required by state law to implement Regulation 1, Rule 220, but 

parallel permits would also be required from EPA. It should be noted here that, because 

the District’s program is SIP-approved, it replaces the underlying federal rules. This 

means that while the District’s program is approved, the District’s more stringent 

thresholds remain in effect; if EPA disapproved the District’s PSD program, the District’s 

thresholds would be enforceable as a matter of state law, and the PSD thresholds in 

EPA’s rules would apply for the purposes of the federal permits.

The implications of not implementing the Tailoring Rule are different for Title V. The 

District is required by federal and state law to implement an approved Title V program. 

Failure to implement an approved program will result in sanctions. Sanctions can take 

two forms: mandatory permit offsets at 2:1, and/or the withholding of federal highway 
Staff Report: page 13 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

funds. If permit offsets were required at a ratio of 2:1, that would mean that any new or 

modified source would be required to provide two tons of emission reductions for every 

ton of proposed emissions increase, on a pollutant-by-pollutant basis. Depending on the 

pollutant, the cost can be anywhere from tens of thousands of dollars per ton to hundreds 

of thousands of dollars per pound. Typical projects in Northern Sonoma that would be 

subject to the offset penalty would need between ten and fifty tons of offsets for each of 

their particulate, NOx, and VOC emissions. The costs would likely be prohibitive for 

some projects. The loss of highway funds would affect road projects throughout the 

District. In addition to imposing federal sanctions on the District for failure to implement 

an approved Title V program, EPA would implement its own program under 40 CFR Part 

71, and would require facilities to comply with the same Title V requirements proposed 

in Regulation 1, Rule 221.

Alternatives to Proposed Revisions to Regulation 1, Rule 130: The District is proposing to 

make revisions to Regulation 1, Rule 130 that EPA has specified in order to update the District’s 

program to be consistent with changes EPA made in its PSD requirements since the last time it 

reviewed the District’s program. The proposed changes use the exact language provided by EPA 

and the language implements existing federal requirements. If the District did not incorporate 

this language, the District’s PSD program would be disapproved by EPA, and EPA would 

implement a federal program that does include the language. Because of the provisions of SB 

288 in state law, however, the District’s existing Rule 130 would also continue in effect. The net 

result would be that any project affected by the proposed revisions would be affected by 

equivalent rules of EPA and the District, even if the District did not adopt the changes. 

However, as stated previously, the length of time needed to obtain PSD permits from EPA, or for 

appeals of such permits to be processed, is substantially longer than it would be under the 

District’s program. 

Environmental Impacts of Proposal and Alternatives

Environmental Impacts of Proposed Regulation 1, Rule 221: Regulation 1, Rule 221, if 

adopted, will impose requirements for permitting and emissions control on emissions of GHGs 

from large facilities and projects where there are currently no requirements. The proposed rule 

will result in the application of Best Available Control Technology for GHG emissions on 

projects that have the potential to emit at least 100,000 tons per year of CO2e, or that are 

otherwise subject to review under PSD and have the potential to emit at least 75,000 tons per 

year of CO2e. These requirements will apply under federal regulations regardless of whether the 

District adopts Rule 221, except that the District’s PSD program includes specific significant 

emission rate thresholds that are more stringent for new sources than the thresholds in the 

underlying EPA regulations. As a result, certain new sources will be required to apply BACT for 

GHGs at lower emission levels than would be required if the District’s PSD program were 

disapproved and EPA implemented its own regulations instead. A review by District staff shows 

that in the last 10 years, there have been only two applications for new sources for which these 

thresholds, in combination with the Tailoring Rule thresholds for CO2e, result in BACT being 

required for GHGs where it would not be required under the EPA’s regulations. 
Staff Report: page 14 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

Identification of BACT is typically done by examination of the emission controls implemented at 

other similar sources to determine the best control that is available, considering costs and other 

impacts. Options are ranked in order of effectiveness, and then, beginning with the most effect, 

reviewed for technological and cost feasibility. This is referred to as a “top-down” BACT 

analysis. There is currently very little history of applying BACT for GHGs, and so there is not a 

large pool of comparable installations for comparison purposes. EPA recently released 

guidance on the determination of BACT for GHGs, and says it should include a review of 

available technology to reduce emissions, to increase efficiency (both process efficiency, and 

general energy use at the facility), or to use alternative fuels (although this is less likely if it 

results in a completely different facility, i.e. switching from coal to natural gas for electrical 

power generation).

In Northern Sonoma, the most likely sources to be subject to BACT for GHGs would be 

geothermal power plants, and possibly a large landfill, should one be sited in the District. 

Landfill emissions of methane would be controlled consistent with BACT using existing 

technology that is otherwise required to reduce landfill gas emissions, however technologies that 

recover of energy from the waste stream will likely be required over technologies that do not. 

Geothermal power plants emit both methane and CO2. The existing technology to remove noncondensable gases from the power plant emissions stream and abate those emissions by burning 

them will reduce the methane emissions consistent with BACT, but will result in a slight increase 

in CO2 emissions; there is a strong net benefit in reduction of CO2e, however, because methane 

has a much higher (21 times) GWP than CO2. There are currently no emissions control 

technology options for directly reducing CO2 from combustion processes. Therefore BACT for 

the power plant will likely include an efficiency analysis of the process, and of the facility 

operations. Examples include process heat/energy recovery, increased insulation, and highefficiency lighting, heating, etc. at the facility. It should also be noted that projects subject to 

BACT for GHG emissions would most likely be required to mitigate impacts of GHG emissions 

under the California Environmental Quality Act as well. The bottom line, however, is that 

BACT is required as a matter of federal law and regulations.

Regulation 1, Rule 221 also will require facilities to obtain Title V permits for GHG emissions, 

or address GHG-related requirements in their otherwise applicable Title V permits, pursuant to 

District Regulation 5. Title V permits do not impose any additional environmental requirements; 

they consolidate all applicable air pollution-related requirements in one permit. There are, 

therefore, no anticipated environmental impacts associated with the adoption of Regulation 1, 

Rule 221 as it relates to Title V permits. In any case, these permits would be required by EPA 

through its own permit program9 if the District did not adopt the proposed changes.

Overall, adoption of proposed Regulation 1, Rule 221, will result in the same or slightly more 

positive impacts on the environment (i.e., lower emissions of GHGs) compared to impacts that

would result if the rule were not adopted, and EPA implemented its own program instead.

Environmental Impacts of Proposed Revisions to Regulation 1, Rule 130: The District is 

proposing changes to Regulation 1, Rule 130 as required by EPA. These changes include new 

 9 If the District fails to implement an approved program under 40 CFR Part 70, EPA implements one under Part 71.
Staff Report: page 15 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

definitions, significant emission rate thresholds, and PSD increments. Although the new 

significant emission rate thresholds and PSD increments will result in certain projects needing 

improved emission controls, the proposed changes reflect federal requirements that are already in 

place, and which would otherwise apply. If the District did not adopt these changes, EPA would 

rescind approval of the District’s PSD program and implement the EPA regulations which 

include these thresholds and increments. As a result, the adoption of revisions to Regulation 1,

Rule 130 will ultimately have the same environmental impacts as would occur if the District did 

not adopt the changes and EPA implemented the federal regulations instead.

Economic Impacts of Proposal and Alternatives

The District is proposing two separate rulemaking actions. The economic impacts of each action 

are discussed separately.

Economic Impacts of Proposed Regulation 1, Rule 221: Economic impacts of the proposed 

new permitting requirements for GHGs will result in three areas. Affected sources will be 

subject to permit review and will be required to pay the costs of that initial review; there will be 

some additional costs for sources that are required to implement BACT for GHGs; and the 

District is required by EPA to recover the costs of implementing the Title V program. 

1. Permit Review Costs- In Phase I of the implementation, from January 2, 2011 until July 

1, 2011, only facilities that are otherwise subject to PSD and Title V permitting 

requirements will be required to address their GHG emissions. Under the District’s fee 

regulations, there is no additional cost for the added review. In Phase II of the program, 

facilities may become subject to PSD and Title V permitting requirements solely on the 

basis of their GHG emissions. The District does not have or anticipate any facilities that 

would be affected solely for GHG emissions. Therefore no additional permit review 

costs are expected as a result of the adoption of proposed Regulation 1, Rule 221.

2. BACT Implementation Costs- Because there is very little history of BACT 

implementation, and because BACT is determined on a case-by-case basis, data on 

specific costs are difficult to find at this time. Certain conclusions are possible, however. 

First, in its guidance on BACT for GHGs, EPA specifically addresses the procedures for 

reviewing costs of each control option, and for eliminating options on the basis of cost. 

There are very few technological options for reducing CO2 emissions at this time, so for 

the foreseeable future, BACT is will likely be focused on increased process efficiency 

(including the recovery of heat and energy from processes and wastes), and increased 

efficiency of facilities operations (such as enhanced building envelope performance and 

high efficiency heating, cooling, and lighting). Generally speaking, these kinds of 

efficiency projects result in up front capital costs that may be recovered in whole or in 

part over the life of the project because of associated energy savings. In most cases, these 

costs would be incurred even if the District did not adopt proposed Regulation 1, Rule 

221, because EPA would require that BACT be implemented.

3. Program Cost Recovery- EPA requires the District recover all costs of implementing 

and enforcing the Title V program. The District will propose for the Board’s 

consideration, before the next fiscal year, a reasonable fee to ensure these costs are 

recovered as required. EPA would recover its program costs implemented the program in 

place of the District. The District currently charges less than the Agency’s presumptive 
Staff Report: page 16 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

minimum for the program, because some of the District’s program costs are already 

recovered through existing permit fees. If the District did not implement the program, 

EPA would assess costs at the presumptive minimum, which would likely be higher.

Economic Impacts of Proposed Revisions to Regulation 1, Rule 130: The changes proposed 

to Regulation 1, Rule 130 reflect existing federal requirements. The District does not have any 

municipal waste incinerators or large municipal solid waste landfills that would be affected by 

the proposed changes. The new significant emission rate thresholds for PM2.5 could potentially

result in a small number of facilities requiring permits and emission controls under PSD 

compared to the current regulation. The only PSD permits required in the last ten years have 

been geothermal permits for drilling and for power plants. Based on a review of permitting 

history, the permits that would exceed the new PM2.5 thresholds were already subject to PSD for 

other reasons. The District therefore does not expect that these new thresholds will result in any 

economic impacts. In any case, these thresholds are required by EPA and if the District does not 

include them in its PSD program, EPA will rescind approval of the District’s program and 

impose the thresholds through the Agency’s own regulations. The same is true of the proposed 

new PSD increments. No economic impacts are therefore expected to result from the District’s 

adoption of the proposed revisions to Regulation 1, Rule 130.

Consultation with Affected Businesses

Based on a review of permits, permit actions, and emissions from existing facilities, District staff 

estimates that the only businesses affected by the proposed rulemaking are geothermal power 

companies, including the generating plants and the steamfield operations. Staff met with the 

committee of the Geysers Geothermal Association on August 19, 2010, to discuss the Tailoring 

Rule and upcoming changes to the Districts program. Staff met with representatives of affected 

companies on November 9, 2010 to review the proposal.

Conclusion and Recommendations

The proposed Regulation 1, Rule 221 implements the requirements of EPA’s Tailoring Rule for 

federal permitting of GHGs. Specifically, the rule establishes thresholds for permitting and 

emissions control of new and modified sources of GHG emissions, establishes thresholds for 

permitting of existing sources of GHG emissions, and limits PTE for existing sources of GHG 

emissions to ensure that sources with small actual emissions are not inappropriately required to 

obtain federal permits. This permitting is required for all affected sources, and would be 

implemented by EPA if the District did not undertake it. Further, costly sanctions would apply if 

the District failed to implement the requirements for its Title V permit program.

The proposed revisions to Regulation 1, Rule 130 are required by EPA. If the District fails to 

implement these changes, EPA will rescind approval of the District’s PSD program and 

implement the changes through the Agency’s own regulations.

The proposed rule and changes do not make the District’s existing PSD program less stringent, 

and therefore comply with the limitations of SB 288.
Staff Report: page 17 of 20 November 12, 2010

Proposed Regulation 1, Rule 221

Proposed Regulation 1, Rule 130 Revisions

No adverse environmental impacts are expected from the approval of the proposed rule and 

changes.

No significant economic impacts are expected from the approval of the proposed rule and 

changes.

District staff recommends the approval of proposed Regulation 1, Rule 221, and the proposed 

changes to Regulation 1, Rule 130.
Staff Report: page 18 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

Appendix A

Tables of Pollutants, Emission Rates, and Growth Increments

Existing PSD Increments

Class I Class II Class III

Sulfur Dioxide

 annual arithmetic mean 2 20 40

 24-hour maximum* 5 91 182

 3-hour maximum 25 512 700

Total Suspended Particulate

 annual geometric mean 5 19 37

 24-hour maximum* 10 37 75

Nitrogen Dioxide

 Annual average 2.5 25 50

*Not to be exceeded more than once a year. Expressed as ug/m3.

Proposed PSD Increments

Class I Class II Class III

Sulfur Dioxide

 annual arithmetic mean 2 20 40

 24-hour maximum* 5 91 182

 3-hour maximum 25 512 700

Particulate Matter (PM10)

 annual geometric mean 4 17 34

 24-hour maximum* 8 30 60

Particulate Matter (PM2.5)

 annual geometric mean 1 4 8

 24-hour maximum* 2 9 18

Nitrogen Dioxide

 Annual arithmetic mean 2.5 25 50

*Not to be exceeded more than once a year. Expressed as ug/m3.
Staff Report: page 19 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

Existing Significant Emission Rates

Air Contaminant: Significant Emission Rate

Carbon monoxide: 100 tons per year (tpy)

Nitrogen oxides: 40 tpy

Sulfur dioxide: 40 tpy

Particulate matter: 25 tpy

PM10: 15 tpy

Ozone: 40 tpy (of volatile organic compounds)

Lead: 0.6 tpy

Asbestos: 0.007 tpy

Beryllium: 0.0004 tpy

Mercury: 0.1 tpy

Vinyl chloride: 1 tpy

Fluorides: 3 tpy

Sulfuric acid mist: 7 tpy

Hydrogen sulfide (H2S): 10tpy

Total reduced sulfur (including H2S) : 10tpy

Reduced sulfur compounds (including H2S): 10tpy

Other pollutants regulated under the Clean Air Act of 1977: any emissions rate whatsoever

In addition to listed emission rates, the definition also includes “any net emission increase from any new or modified 

stationary source which would be constructed within 10 kilometers of a Class I area and have an air quality impact on 

such area equal to or greater than 1 microgram per cubic meter (24 hour average).”
Staff Report: page 20 of 20 November 12, 2010

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Proposed Regulation 1, Rule 130 Revisions

Proposed Significant Emission Rates

Air Contaminant: Significant Emission Rate

Carbon monoxide: 100 tons per year (tpy)

Nitrogen oxides: 40 tpy

Sulfur dioxide: 40 tpy

Particulate matter: 25 tpy

PM10: 15 tpy

PM2.5: 10 tpy of direct PM2.5 emissions;

40 tpy of sulfur dioxide emissions;

40 tpy of nitrogen oxide emissions

Ozone: 40 tpy of volatile organic compounds or 

nitrogen oxide emissions

Lead: 0.6 tpy

Asbestos: 0.007 tpy

Beryllium: 0.0004 tpy

Mercury: 0.1 tpy

Vinyl chloride: 1 tpy

Fluorides: 3 tpy

Sulfuric acid mist: 7 tpy

Hydrogen sulfide (H2S): 10 tpy

Total reduced sulfur (including H2S) : 10 tpy

Reduced sulfur compounds (including H2S): 10 tpy

Municipal waste combustors

 Organic emissions: 3.2 x 10-6 megagrams per year (3.5 x 10-6 tpy) 

 (measured as total tetra- through octa-chlorinated 

 dibenzo-p-dioxins and dibenzofurans)

 Metal emissions 14 megagrams per year (15 tons per year) 

 (measured as particulate matter)

 Acid gas emissions 36 megagrams per year (40 tpy)

 (measured as sulfur dioxide and hydrogen chloride)

Municipal solid waste landfills

 Nonmethane organic compounds 45 megagrams per year (50 tons per year)

Other pollutants regulated under the Clean Air Act: any emissions rate whatsoever

In addition to listed emission rates, the definition also includes “any net emission increase from any new or modified 

stationary source which would be constructed within 10 kilometers of a Class I area and have an air quality impact on 

such area equal to or greater than 1 microgram per cubic meter (24 hour average).”