UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105·3901

September 1, 2010

VIA E-MAIL AND U.S. MAIL
Jin1 Rexroad Avenal Power Center, LLC One Allen Center 500 Dallas Street, Level 31 Houston, TX 77002


### Re: FinalBiological Opinion for the Proposed Avenal Energy Project (SJ 08-01)
DearMr. Rexroad:
Thank you for your letter ofAugust 16, 2010 concen1ing the biological opinion ("BO") issued by the U.S. Fish and Wildlife Service ("FWS" or "Service") onAugust 9, 2010 for Avenal Power Center, LLC's ("Avenal") proposed Avenal Energy Project.
The August 9,2010 BO was issued at the conclusion offonnal consultationbetween 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") Prevention ofSignificant Deterioration ("PSD") permit decision-making action for the proposed Avenal Energy Project. This letter will clarify the remaining few steps that we have determined are necessary and appropriate to ensure that EPA's PSD permitting decision for the proposed Avenal Energy Project pursuant to 40 C.F.R. § 52.21 is consistent withthe requirements ofthe ESA and consistent with the BO.
The BO provides the FWS' opinion onthe Avenal Energy Project's effects on a number federally-listed endangered species. The Service concurs inthe BO with EPA's determination that the project is not likely to adversely affect the federally-endangered SanJoaquin woollythreads 

### (Monolopia congdonii), blunt-nosed leopard lizard 

### (Gambelia sila), Tipton kangaroo rat 

### (Dipodomys nitratoides nitratoides), and the Califomiajewelflower 

### (Caulanthus californicus).
In addition, the BO cOl1cludes that the construction, operation and maintenance ofthe proposed project will result in incidental take ofthe federally-endangered SanJoaquin kit fox 

### (Vulpes macrotis mutica), in the form orharm and harassment, and provides an incidental take statementto authorize that incidental take provided certain specified conditions are met, as

Printed on Recycled Paperexplained in more detail below. The BO also concludes that the proposed project is not likely to jeopardize the continued existence ofthe San Joaquin kit fox.

I

I

II In order for the exemption for incidental take ofthe San Joaqllin kit fox to apply, the BO

### impo~es specified reasonable and prudent measures ("RPMs") to minimize incidental take, and a set o(tenns and conditions to implementthese measures. As outlined in the BO, the applicant is responsible for directly implementing these reasonable and prudent measures and tenns and conditions, while EPA is responsible for ensuring that the applicant comply withthem. The BO states that EPA must ensure that the applicant undertakes these measures ormakes them binding

I conditions ofany authorization provided to contractors for the exemption under 7(0)(2) to apply. The 

## 130 further states that ifthe applicant (1) fails to adhere to the tenns and conditions ofthe**incid~ntal** take statement (consistent withrevisions to its PSD permit application incorporating these temlS and conditions), and/or (2) EPA fails to retain oversight to ensure compliance with these terms and conditions, the protective coverage ofsection 7(0)(2) may lapse.
The RPMs inthe Avenal BO (p. 29) include the following:
2. Priorto PSD pennit issuance, the applicant will submit a revised PSD pennit application that includes the tenns and conditions contained within this biological opinion. Including the terms and conditions ofthe biological opinion within the applicant's PSD pennit application requires the applicant to adhere to those tenns and conditions to remain in compliance with the PSD pennitrequirements.
3. The EPA shall forward to the Service a copy ofthe applicants' revised application containing the provisions ofthe biological opinion for the Service to review.
Your August 16 letter indicated Avenal's intentto comply with the tenns ofthe BO, and suggestedthat EPAmodify the Avenal PSD pennitterms to incorporate the BO'srequirements. Consistent withthe requirements ofthe BO and with EPApractice, to documentthat Avenal agrees to implement the RPMs and terms and conditions included in the BO, and to clarify that EPA's permit decision is based inpart on the applicant's representations that it will, in fact, implement these requirements, we request that Avenal update its PSD permit application to state that, as part ofthis project, it will implement all RPMs, tenns and conditions and reporting requirements contained inthe BO (pp. 29-31). We believe that a letter from the applicant that states 'that it is an addendum to the permit application and that includes the informationrequested immediately above would suffice for this purpose. (The letter should specifically refer to the BO as part ofthe addendum; however, an additional copy ofthe BO need not be submitted.) Please note that neither EPA's request for, nor Avenal's submittal of, this additional documentation concerning Avenal's ESA commitments affects the completeness status ofAvenal's permit application, nor would it necessitate the need for additional public notice and comment.We appreciate your cooperation and assistance in this matter. Ifyouhave any questions, please contact Shirley Rivera ofmy staffat (415) 972-3966, orhave your counsel contactJulie Walters, with our Office ofRegional Counsel, at (415) 972-3892. Sincerely,

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# ~/4t~W1 Gerardo C. RIOS Chief, Air Permits Office

cc: (via e-mail and U.S. mail) Susan Moore, U.S. FWS Jeffrey R. Holmstead, Bracewell & Giuliani LLP Gary RubensteiIl, Sierra Researcll