Theodore D. Schade Air Pollution Control Officer 

# @

__ .,.

# ____________
GREATBASINUNIFIEDAIRPOLLUTION CONTROLDISTRICT

November 13, 2014

Gerardo Rios Chief, Air Permits Office (Air-3) EPA Region 9 75 Hawthorne Street San Francisco, CA 94105 

### 157ShortStreet,Bishop,California93514-3537 760-872-8211 Fax: 760-872-6109

RE: Clarifications for Rule 221- Prevention ofSignificant Deterioration (PSD) Permit Requirements
Dear Mr. Rios:
On February 6, 2013, the California Air Resources Board (CARB) submitted forthe Environmental Protection Agency's (EPA) approval Great Basin Unified Air Pollution Control District (District) Rule 221- Prevention of Significant Deterioration (PSD) Permit Requirementsfor New Major Facilities or Major Modifications in Attainment or Unclassifiable Areas. This letter provides additional information and clarifications related to greenhouse gas permitting, transferring the PSD program from EPA tothe Districtand ensuring that certain PSD program requirements are met.
Clarification Regarding Greenhouse Gas Requirements: On June 23, 2014, the Supreme Court issued its opinion in UtilityAirRegulatoryGroup v. Environmental Protection Agency(No. 12-1146) ("UARG") that EPA may nottreat greenhouse gases {GHGs) as an air pollutant for purposes ofdetermining whetherasource is a majorsource (or modification thereof) required to obtain a PSD permit (referred to as 11Step 2 ofthe GHG Tailoring Rule"). The Supreme Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions ofconventional pollutants, contain limitationson GHG emissions based on the application of BACT. District Rule 221, Section Cincorporates by reference EPA's PSD regulations at40 CFR 52.21 as ofJuly 1, 2012. In light ofthe Supreme Court's UARG decision, on November 13, 2014, I requested thatARB notify EPAthatARB and the Districtwould like to withdrawfrom ARB's February 6, 2013 SIP submittal the portion of District Rule 10.10that incorporates by reference 40 CFR 52.21(b)(49)(v). This withdrawal is designed to ensure that EPA can act on the District's SIP submittal consistent with the Supreme Court's UARG decision concerning Step 2 ofthe GHG Tailoring Rule. The District understandsthat EPA will need to make revisions to40 CFR 52.21 as a result ofthe UARG decision and the associated remand process that is still ongoing. In the interim, the District intendsto apply 40CFR 52.21 as incorporated by reference into District Rule 221, Section Cin mannerthat is consistent with EPA's interpretation ofthe Supreme Court's decision and EPA guidance and policywith respect to application ofsection 52.21 while revisions tothe regulations are pending.Existing PSD Permits As part of, and concurrent with, EPA's approval of the District's PSD program into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to those sources located in the District that have existing PSD permits issued pursuant by EPA. This would include authority to conduct general administration ofthese existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits including, for example, modifications, amendments, or revisions of any nature, and authorityto enforce such permits.
Discussion of Section 110(a)(2)(E)(i) Pursuant to Section 110(a)(2}{E)(i) ofthe Clean Air Act, we discuss howthe information provided previously and State and District statutory and regulatory requirements demonstrate that the District has adequate personnel, funding, and authority underState and/or local lawto implementthe PSD program within the District.
The District has the primary responsibility for regulating air pollution from all stationary sources within the District (see California Health & Safety Code (H&SC) sections 39002 and 40000). The California Air Resources Board oversees the District's activities and regulates mobile sources ofair pollution. UnderState law, the District is required to adopt rules to achieve ambient air quality standards and to enforce the provisions of local, State and federal air quality laws (see H&SC section 40001(a)).
The District's permitting program (which is authorized by H&SC section 42300 and must meetthe requirements ofsection 42301), as approved by EPA, currently implements requirements from both the California and federal Clean AirActs. The District is authorized by state lawto enforce its rules, regulations and orders, including conditions contained in District-issuedTitle V and PSD permits (see H&SC §§40752(b); 41513; 42402-42403). Rule 221 providesthe District with specific authorityto issue PSD permits and otherwise implement and enforce the PSD program. As discussed in the District's February 6, 2013 SIP submittal, ifa proposed facility is subject to PSD regulations, the incorporation of PSD permitting requirements with District permit requirements may require additional resources to oversee the ambient monitoring program fora pre-application airqualityanalysis, ifit is needed. The District will applyfor EPA Section 105 funds to help coverthe additional cost ofthe PSD permitting program. For permitapplicants, combining the PSD permitting process with the District permitting process will streamline the permitting process. Sources will not be required to get permitsfrom both the District and the US EPA, which should reduce theircosts associated with dealingwith two agencies. Also, as discussed in the District's February 6, 2013 submittal, due to the lack of large industrial facilities in our District, there is only one facilitythat have been subject to PSD regulations in our District (a permit issued in 1979to facilitythat is not currently a majorsource), and staffis not aware ofany planned facilities that may be subject to PSD regulations in the future. Ifa planned facility becomes subject to this regulation the District will incorporatethe PSD permitting requirements into the District's existing permit procedures for newfacilities and modifications.
The above information shows thatthe District has adequate legal authority, personnel and fundingto implementand enforce the PSD program for sources within the District, including forexisting PSD permits.



### 2Additional PSD Program Requirements
Notice ofOpportunityforPublic Hearing 40 CFR 51.166(iii) states: 

### Notify the public, by advertisement in a newspaper ofgeneral circulation in each region in which the proposed source would be constructed, ofthe application, the preliminary determination, the degree of increment consumption that is expectedfrom the source or modification, and of the opportunityfor commentatapublichearingas wellas writtenpubliccomment.
40 CFR Sl.166(q)(iii) requires that the public notification for a preliminary determination include notice of the opportunity for comment at a public hearing. While Section D.6.v of Rule 221 includes the requirement in 40 CFR Sl.166(q)(2)(v) to provide an opportunity for a public hearing, Rule 221 does not specifically include the requirement to 

### notify the public ofthe opportunity to comment at a public hearing. Section D.6.iii of Rule 221 includes the requirements in 40 CFR Sl.166(q)(iii) related to public notifications except for a reference to the opportunity for comment at a public hearing. The District confirms that it interprets Section D.6 of Rule 221 as requiring the public notification to include reference to the opportunityto request a public hearing. The District will ensure that its public notifications mention the opportunityto request a public hearing, and will revise Rule 221, for clarity, to specifically include this requirement the next time it is open for revisions.
Please call Duane Ono at (760) 872-8211 ifyou have any questions regarding this matter.

Air Pollution Control Officer

cc: Carol Sutkus, CARS



### 3