Gary Chandler

PresidentPio Pico Energy Center, LLCP.O. Box 95592

2542 Singletree Lane

South Jordan, Utah 84095

Re: Final Biological Opinion for the PSD Permit Application for the Proposed Pio Pico Energy

Center (PSD Permit Application No. SD 11-0 1)

Dear Mr. Chandler:Thank you for the email transmittal dated October 1, 2012 from Melissa Foster, counsel for Pio Pico

Energy Center, LLC (“Applicant”), attaching a draft letter concerning the biological opinion (“BO”)

issued by the U.S. Fish and Wildlife Service (“FWS” or “Service”) on September 28, 2012 for the Pio

Pico Energy Center (“Project”). The September 28, 2012 BO was issued at the conclusion offormal

consultation between EPA and FWS in accordance with Section 7 ofthe federal Endangered Species Act

(“ESA”). This consultation was conducted in conjunction with EPA’s Clean Air Act (“CAA”) Preventionof Significant Deterioration (“PSD”) permit decision-making action for the proposed Project. This letter

will clarify the remaining few steps that we have determined are necessary and appropriate to ensure thatEPA’s PSD permitting decision for the proposed Project pursuant to 40 C.F.R. § 52.21 is consistent with

the requirements ofthe ESA and consistent with the BO.

The BO provides the FWS’ opinion on the Project’s effects on a number federally-listed endangered and

threatened species. The BO addresses the potential effects ofthe proposed Project on the federally

endangered Quino checkerspot butterfly (Euphydiyas editha quino; Quino), federally threatened coastal

California gnatcatcher (Polioptila calfornica calfornica; gnatcatcher) and Otay tarplant (Deinandra

[Hemizonia] conjugens) and their respective designated critical habitats, in accordance with section 7 of

the ESA. The federally endangered San Diego fairy shrimp (Branchinecta sandiegonensis) and its

designated critical habitat and Riverside fairy shrimp (Sireptocephalus woottoni) and its proposed critical

habitat occur within the action area ofthe Project. However, the Service has determined that impacts of

the proposed Project are not likely to adversely affect these species or their designated and proposed

critical habitat.

After reviewing the current status ofthe Quino, gnatcatcher, and Otay tarplant, the

environmental baseline for the action area, the effects ofthe proposed action, and the cumulative effects,

the Service’s BO concludes that the proposed Project is not likely to jeopardize the continued existence ofthe Quino, gnatcatcher, or Otay tarplant and is not likely to result in the destruction or adverse

modification of designated critical habitat for any ofthese species.

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agrees to implement the RPMs and terms and conditions included in the BO, and to clarify that EPA’s

permit decision is based in part on the Applicant’s representations that it will, in fact, implement theserequirements, we request that the Applicant update its PSD permit application to state that, as part of

the Project, it will implement all RPMs and terms and conditions contained in the BO. The draft letter

attached to your counsel’s October 1, 2012 email indicates that the letter is a permit application

addendum and states the Applicant’s intent to comply with the terms ofthe BO. We believe that thisdraft letter will suffice. The draft letter also suggests that EPA modify the Project’s PSD permit terms

to incorporate certain ofthe BO’s requirements; we believe that such a PSD permit requirement is notnecessary given that our permit and applicable regulations require the Applicant to construct and

operate the facility in accordance with the permit application, which would include this permitapplication addendum. Also, to avoid the potential for having your final application addendum letter

misdirected in our mail routing system, please address the letter to me as the Chief ofthe Region 9“Air Permits Office”.

Please note that neither EPA’s request for, nor the Applicant’s submittal of, this additional documentationconcerning the Applicant’s ESA commitments affects the completeness status ofthe PSD permitapplication for the Project, nor would it necessitate the need for additional public notice and comment.

We appreciate your cooperation and assistance in this matter. If you have any questions, please contact

Roger Kohn ofmy staff at (415) 972-3973, or have your counsel contact Julie Walters, with our Office ofRegional Counsel, at (415) 972-3892.

Sincerely,

//j’; A

Gerardo C. Rios

Chief, Air Permits Office

cc (via e-mail and U.S. mail):

Jim A. Bartel, FWSDavid Jenkins, PPEC

Melissa A. Foster, Esq., Stoel Rives LLP

Steve Hill, Sierra Research