SACRAMENTO METROPOLITAN AIR QUALITY MANAGEMENT DISTRICT

STAFF REPORT

SUMMARY OF THE PROPOSAL TO

Rule 203 – PREVENTION OF SIGNIFICANT DETERIORATION

AND REQUIRED FINDINGS

December 22, 2010

And Appendices

Prepared by: Marc Cooley

Associate Air Quality Engineer

Reviewed by: Kevin J. Williams, Ph.D.

Program Coordinator

Aleta Kennard Program Supervisor

Approved by: Brigette Tollstrup

Division ManagerStaff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 2

Overview

The District currently meets the federal health-bas ed air quality standards for NO 2 , lead (Pb), SO 2 and CO, and is referred to as an attainment or uncl assified area for those pollutants. Sacramento County is also expected to be designated as an atta inment area for federal PM10 standards. The federal Clean Air Act requires districts to adopt a program called Prevention of Significant Deterioration (PSD) to control air pollution from m ajor large sources.

Rule 203 was adopted on February 26, 1991. The Dis trict submitted Rule 203 as adopted February 26, 1991 to the EPA for approval into the SIP. EPA has not taken action on the submitted 1991 version of Rule 203. Rule 203, Prev ention of Significant Deterioration, adopts the federal requirements of 40 CFR Part 52.21, Chapter 1 by reference.

In June, 2010, EPA promulgated the so-called Tailor ing Rule 1 which defined the PSD requirements for greenhouse gases (GHG) which becam e subject to regulation when EPA adopted GHG requirements for motor vehicles in May, 2010. GHG are subject to PSD requirements starting January 2, 2011 with addition al requirements beginning July 1, 2011.

U.S. EPA Action to Ensure Authority to Issue Permit s under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call 2 : In December 2010, the EPA Administrator signed a finding that the EPA-approved State Implementation Plans (SIP) of 13 states are substantially inadequate to meet CAA requirements because they do not apply Pre vention of Significant Deterioration requirements to GHG-emitting sources. Since EPA ne ver approved the 1991 PSD rule, their determination was based on the last SIP approved PS D rule, adopted in 1984. The District is the only air district in California with the inadequacy . The Administrator issued a SIP call setting a deadline of January 31, 2011 for the District to su bmit a corrective SIP revision to assure the PSD program will apply to GHG-emitting sources. If the District is unable to submit a SIP revision before the January deadline, EPA intends to immedia tely issue a finding of failure to submit a required SIP submission under CAA section 110(c)(1) (A) and will promulgate a Federal Implementation Plan (FIP).

In addition to the changes needed to meet Clean Air Act (CAA) requirements for PSD regulated pollutants, including greenhouse gases (GHG), amend ments to Rule 203 must conform to the requirements of SB288, the Protect California Air A ct of 2003. This California law prevents the District from adopting PSD requirements less string ent than the “new source review rules (including prevention of significant deterioration) or regulations that existed on December 30, 2002 3 ” and specifies that the rule for comparison as:

“those new source review rules and regulations for both nonattainment and prevention of significant deterioration for new, modified, repair ed, or replaced sources that have been adopted by the district governing board on or prior to December 30, 2002, that have been

1 “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, Final Rule”, Fede ral Register 75 (June 3, 2010) p. 31514

2 “Action to Ensure Authority to Issue Permits under the Prevention of Significant Deterioration Progra m to Sources of Greenhouse Gas Emissions: Finding of Su bstantial Inadequacy and SIP Call, Final Rule”, Federal Register 75 (December 13, 2010) p. 77698
3 California Health and Safety Code § 42504(a)Staff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 3

submitted to the EPA by the state board for inclusi on into the SIP and are pending approval or have been approved by the EPA 4 .”

Therefore, the proposed amendments to Rule 203 cann ot be less stringent than the 1991 version of Rule 203.

Summary of the effect of the proposal

The proposed amendments will do several things:

• Update the adoption by reference to incorporate EP A’s most recent PSD rule, to the extent permitted by state law,

• Limit certain provisions in the 1991 rule that imp roperly established that the District could act as the EPA Administrator, had that rule been ap proved by EPA,

• Incorporate the new federal GHG requirements, and

• Replace the outdated SIP approved PSD rule, adopte d in 1984.

COST IMPACTS

Section 40703 of the California Health and Safety C ode requires that the District consider and make public its findings relating to the cost effec tiveness of implementing an emissions control

measure.

Impact on Businesses in Sacramento: Proposed amendments to Rule 203 are required to meet federal Clean Air Act EPA PSD rule requirement s, and to respond to EPA’s SIP call. Starting January 2, 2011, PSD GHG requirements are applicable to major sources and major modifications that are subject to PSD for another r egulated pollutant and increase GHG emissions above specified thresholds. Starting Jul y 1, 2011, sources can trigger PSD requirements based solely on GHG emissions. Existi ng major sources are not subject to PSD permitting unless making a major modification.

The cost impacts from this rule change depend on th e following factors:

• Whether a new major source or a significant modifi cation(s) at an existing major source is proposed.

• Whether the source plans include controls or other strategies that are considered the best available control technologies (BACT) for GHGs.

• The actual cost of BACT controls or strategies. T he definition of BACT includes consideration of the cost of the controls. In othe r words, controls that are overly costly would not be required to meet BACT requirements.

BACT is determined based on a case-by-case analysis of the specific project proposal. Because the costs are based on the specific details of futu re project proposals, we cannot project the potential costs. EPA recently published a GHG guid ance document 5 with information on potential

4 California Health and Safety Code § 42505

5 U.S. EPA. PSD and Title V Permitting Guidance For Greenhouse Gases . November 2010Staff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 4

GHG BACT however the guidance does not provide any final BACT determinations. There is uncertainty concerning the costs of GHG BACT due to limited data and guidance.

There is no change in costs for PSD requirements fo r the other regulated pollutants because they were already required by existing District rules, a nd state and federal laws and regulations.

Cost to District: Historically, there have been very few sources th at trigger PSD requirements. At a December 15, 2010 meeting with potentially imp acted sources (major sources and those with high GHG emissions), staff asked whether any s ource anticipated making modifications that might trigger a PSD review. No source indicated an y plans for such a change. Therefore, at the current time, staff does not anticipate a need for additional staff resources due to the proposed amendments.

EMISSIONS IMPACT

The proposed revisions require BACT for GHG new maj or sources and significant modifications at major sources with emissions over the GHG applic ability thresholds. However, as discussed in the Cost Impacts - Impacts on Business above, the a ctual impacts, and associated emissions reductions from any additional controls or strategi es required to meet BACT requirements, depend on the factors noted above and, therefore, s taff cannot estimate the quantity of emission reduction benefits anticipated from the proposed ru le amendments.

There is no emission reduction benefit associated w ith other regulated pollutants, because BACT is already required under existing Rule 203, and ot her District rules, and state and federal laws. The amendments meet existing federal requirements a nd make more enforceable the requirements of prevention of significant deteriora tion minimize any new emissions into the attainment area.

SOCIOECONOMIC IMPACT ANALYSIS

CHSC Section 40728.5 requires a district to perform an assessment of the socioeconomic impacts before adopting, amending, or repealing a r ule that will significantly affect air quality or emission limitations. The District Board is requir ed to actively consider the socioeconomic impacts of the proposal and make a good faith effor t to minimize adverse socioeconomic impacts.

CHSC Section 40728.5 requires discussion of: 1. The type of industry or business, including smal l business, affected by the proposed rule or rule amendments. 2. The impact of the proposed rule or rule amendmen ts on employment and the economy of the region. 3. The range of probable costs, including costs to industry or business, including small business. 4. The availability and cost-effectiveness of alter natives to the proposed rule or rule amendments. 5. The emission reduction potential of the rule or regulation. 6. The necessity of adopting, amending, or repealin g the rule or regulation to attain state and federal ambient air standards.Staff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 5

Type of industry or business, including small busin ess, affected by the proposed rule: Rule 203 applies to any stationary source that installs or m odifies emissions units that exceed specified trigger levels for major source, as listed in 40 CF R Part 52.21(b)(1)(i), and major modification, as defined in 40 CFR Part 52.21(b)(2)(i) and the level s listed in 40 CFR Part 52.21(b)(23)(i). In general this PSD rule applies to sources in the 21 source categories, as listed in 40 CFR Part 52.21(b)(1)(i)( a ), that emits more than 100 tpy o r any source that emits more than 250 tpy of any regulated NSR pollutant (as defined in 40 CFR 52.21 (b)(50)). The sources subject to the proposed rule could include chemical production pla nts, food processors, manufacturing plants, large boilers used at hospitals or universities, po wer plants, and waste management and remediation such as landfills.

Impact on employment and economy in the District of the proposed rule: The addition of BACT for GHG may require additional controls, however as discussed in the cost impact sections above, the specific costs, and consequent impact on employment or the economy cannot be estimated at this time. Given the historic infrequ ent triggering of PSD, it is unlikely to be significant at this time.

Range of probable costs, including costs to industr y or business, including small business of the proposed rule: As discussed above, the amendments to Rule 203 do not impose additional costs any existing permitted stationary source. New or m odified major stationary sources that trigger a PSD permit review for GHG emissions may be required to install BACT for GHG. The cost to install may vary depending on the BACT cost effecti veness determination for the type of equipment installed.

Availability and cost effectiveness of alternatives to the proposed rule: Staff is amending the rule in order to address EPA requirements for the Distri ct to submit a SIP approvable rule. The only alternative is to not amend Rule 203 and choose not to comply with federal regulations and the Clean Air Act requirements. This will result in EP A imposing a Federal Implementation Plan (FIP) rule imposing similar GHG BACT requirements with id entical costs.

Emission reduction potential of the proposed amendm ents: Staff cannot estimate additional emissions reductions because staff cannot predict h ow many sources will be required to comply or the specific control strategy requirements. Bas ed on past permitting actions, PSD has been triggered infrequently and the current major source s have not identified any anticipated major modifications. Since the proposed amendments may r equire BACT for GHG at new major sources and significant modifications for GHG-emitt ing sources, the amendments may result in an overall benefit to air quality in the District.

Necessity of adopting the amendments: Staff propos ed amendments in order to comply with federal regulations and Clean Air Act requirements.



### FINDINGS

The California Health and Safety Code (HSC), Divisi on 26, Air Resources, requires local districts to comply with a rule adoption protocol as set fort h in Section 40727 of the Code. This section has been revised through legislative mandate to con tain six findings that the District must make when developing, amending, or repealing a rule. Th ese findings, effective January 1, 1992, and their definitions are listed in the table below.Staff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 6

Rule 203 – Required Findings

Finding Finding Determination Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal the rule. The District is authorized to adopt and amend Rule 203 by California Health and Safety Code (HSC) Sections 40001, 40702, 41010 and 42300. [HSC Section 40727(b)(2)]. Necessity: The District must find that the rulemaking demonstrates a need exists for the rule, or for its amendment or repeal. It is necessary to adopt the proposed amendments to Rule 203 to comply with the Federal Clean Air Act (42 USC 7410(a)(2)(C), 7410(l), 7471, 7475, 7479, and 7515), and 40 Code of Federal Regulations Part 52.21. [HSC Section 40727(b)(1)]. Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. Staff has reviewed the proposed rule and determined that it can be understood by the affected parties. In addition, the record contains no evidence that people directly affected by the rule cannot understand the rule. HSC Section 40727(b)(3)]. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations. The proposed rule does not conflict with, and is no t contradictory to, existing statutes, court decision s, or state or federal regulations. [HSC Section 40727(b)(4)]. Non

- Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing state or federal regulation; or (2) that the duplicative requirements are necessary or proper to execute the powers and duties granted to, and imposed upon the District. The proposed rule duplicates state or federal regulations for permitting programs. The duplicative requirements are necessary in order to execute the powers and duties imposed upon the District. [HSC Section 40727(b)(5)].

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopting, amending or repealing the rule. In adopting the proposed rule, the District is implementing the requirements of HSC Sections 41010, and Sections of the Federal Clean Air Act (42 USC 7410(a)(2)(C), 7471, and 7475) [HSC Section 40727(b)(6)] Additional Informational Requirements: In complying with HSC Section 40727.2, the District must identify all federal requirements and District rules that apply to the same equipment or source type as the proposed rule or amendments. A comparison with federal requirements is located below. [HSC Section 40727.2].Staff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 7

California HSC Section 40727.2 Matrix

Proposed Rule 203 – Prevention of Significant Deter ioration

Elements of Comparison Specific Provisions Proposed Rule 203 40 CFR Part 52
, Subpart I Exemptions Same as federal requirements except pre-1978 sources (no longer applicable) Increment consumption; Nonattainment pollutants; Nonprofit health or nonprofit educational; Pre-1978 sources; PSD monitoring; Significant Impact Levels (SIL); Temporary sources, air quality monitoring Averaging Provisions Not Applicable Not Applicable Units Same as federal requirements Tons/year, CO 2 e, μg/m 3
Emissions Limits Emissions Reduction Same as federal requirements Ambient air increments ; BACT; Compliance alternatives Same as federal requirements Air Quality Modeling

Permit Conditions Same as federal requirements Federally enforceable permit conditions Operating Parameters Same as federal requirements Stack heights; Monitor emissions; Recordkeeping for hours of operations, throughput, and emissions. Work Practice Requirements Same as federal requirements Monitor emissions; Recordkeeping for hours of operations, throughput, and emissions. Monitoring/Records Recordkeeping Same as federal re quirements Air Quality Analysis (source impact analysis, source information, visibility, soil and vegetation impact analysis), . Frequency Same as federal requirements Pre-application analysis Monitoring/Testing Test Methods Same as federal req uirements Pre- and postconstruction monitoring

Frequency Same as federal requirements Pre-construc tion monitoring for a period of at least one year preceding application (may be allowed to be period as short as 4months); Postconstruction monitoring
as necessaryStaff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 8

APPENDIX A

LIST OF CHANGES TO RULES

Rule 203 – Prevention of Significant Operations

NEW SECTION NUMBER EXISTING

SECTION NUMBER PROPOSED CHANGES

N/A N/A Removed adopt by reference language. The p roposed amendments to Rule 203 incorporate by reference the latest version of 40 CFR 52.21 (see Section 103). Several section s are excluded from the incorporation by reference language to sat isfy EPA and SB288 requirements. Those sections are related to the NSR reforms EPA promulgated on December 31, 2002. 101 N/A Added “purpose” section to clarify rule pro vides for preconstruction review requirements for new and modified major stat ionary air pollution sources that emit attainment pollutants. Rule 203 is intended to incorporate federal prevention of signi ficant deterioration requirements into the District’s rules and regulati ons. 102 N/A Added “applicability” section to clarify ru le applies to sources subject to any requirement under federal PSD regulations (4 0 CFR 52.21). Also clarified that the most stringent requirement applies in cases of conflict or duplication. The applicability procedu res contained in 40 CFR 52.21(a)(2) are revised as set forth by the pro cedures contained in Sections 102.1-102.3. 102.1- 102.3 N/A Added applicability procedures consistent with SB288 requirements of not adopting federal NSR reform. These applicab ility procedures are consistent with the sections of 40 CFR 52.21(i) (1-3) that were in effect on December 30, 2002. 103 N/A Added “Incorporation by Reference” section incorporating all the provisions of 40 CFR 52.21, in effect at the date o f adoption, as part of the Rules and Regulations of the District. 104 N/A Excluded sections of 40 CFR 52.21 for all r egulated NSR pollutants including GHG, consistent with the CAPCOA model rul e. These excluded sections contain reserved sections, public participation (replaced with explicit language in rule), sections struck down by court decisions, and other sections not applicable when adopting by reference (environmental impact statements, dispute d permits, delegation of authority, and permit recision). 105 N0/A Excluded two sections of 40 CFR 52.21 only for the purposes of GHG. Sections (k), source impact analysis, and (m) , air quality analysis, are excluded due to the absence of a Nati onal Ambient Air Quality Standard (NAAQS) for GHG. 201 N/A Added “actual emissions” definition to revi se the definition as set forth in Sections 201.1-201.4 whenever reference is made to the term “actual emissions” or any reference to 40 CFR 52.21(b)(21). 201.1- 201.4 N/A Added “actual emissions” procedures consistent with SB288 requirements of not adopting federal NSR reform. T heseStaff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 9

NEW SECTION NUMBER EXISTING

SECTION NUMBER PROPOSED CHANGES

calculation procedures are consistent with 40 CFR 5 2.21(b)(21) in effect July 1, 1990. 202 N/A Added “administrator” definition consistent with CAPCOA model rule. Sections where the Administrator of EPA is a ppropriate are noted and all other uses of the term “administrator ” shall mean “Air Pollution Control Officer.” 203 N/A Added “allowable emissions” definition as s et forth in Sections 203.1-203.2, consistent with the CAPCOA model rule, whenever reference is made to the term “allowable emissions” or any reference to 40 CFR 52.21(b)(16). 204 N/A Added “baseline actual emissions” definitio n as set forth in Sections 204.1-204.4 whenever reference is made to the term “baseline actual emissions” or any reference to 40 CFR 52.21( b)(48). 204.1- 204.4 N/A Added “baseline actual emissions” procedures co nsistent with SB288 requirements of not adopting federal NSR refo rm. These calculation procedures are consistent with 40 CFR 5 2.21(b)(21) in effect July 1, 1990. 205 N/A Added “major modification” definition as se t forth in Sections 205.1- 205.3 whenever reference is made to the term “major modification” or any reference to 40 CFR 52.21(b)(2). 205.1- 205.3 N/A Added “major modification” procedures consisten t with SB288 requirements of not adopting federal NSR reform. T hese calculation procedures are consistent with 40 CFR 5 2.21(b)(2) in effect July 1, 1990. 206 N/A Added “net emissions increase” definition a s set forth in Sections 206.1-206.8 whenever reference is made to the term “net emissions increase” or any reference to 40 CFR 52.21(b)(3). 206.1- 206.8 N/A Added “net emissions increase” procedures consi stent with SB288 requirements of not adopting federal NSR reform. T hese calculation procedures are consistent with 40 CFR 5 2.21(b)(3) in effect July 1, 2002. 207 N/A Added “paragraph (q)” definition consistent with the CAPCOA model rule. This definition is included due to paragraph (q) being excluded from the incorporation by reference in Section 103. Specific procedures are provided related to sources impactin g Federal Class I areas [40 CFR 52.21(p)(1)]. 208 N/A Added “potential to emit” definition to con sistent with the CAPCOA model rule. 301 N/A Added “requirements” heading consistent wit h District rules and regulations. 301.1 N/A Added section to require a PSD permit pur suant to Rule 203 is required before construction begins, consistent wit h the Clean Air Act. 301.2 N/A Added section to require compliance with Rule 203 before issuing a PSD permit consistent with the Clean Air Act.Staff Report

Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION January 13, 2011 Page 10

NEW SECTION NUMBER EXISTING

SECTION NUMBER PROPOSED CHANGES

301.3 N/A Added section consistent with CAPCOA mode l rule clarifying fees are required for obtaining a PSD permit. 401 N/A Added “public participation requirements” c onsistent with the CAPCOA model rule, 40 CFR 52.21, and District requi rements. Public participation for PSD permits includes addit ional notification compared to other District rules, such that notific ation shall be provided to: EPA, any state or local air districts, cities and counties, any regional land use planning agencies, any state, federal land manager, or Indian governing body whose lands may b e affected by emissions from the source or modification.Appendix B

Presentation to Sources December 16, 2010

### 1



## Rule 203 – Prevention of Significant Deterioration and Rule 207 – Title V Federal Operating Permit Program Greenhouse Gas (GHG) Status Meeting

Public Meeting December 16, 2010 Marc Cooley



# Discussion Overview

• Prevention of Significant Deterioration (PSD) – Minimize air quality impacts in attainment areas – New and expanding emission sources that are significant use Best Available Control Technology 

## • Background on Greenhouse Gases (GHG) • PSD GHG Requirements • GHG Applicability • Title V Permitting • GHG Applicability Charts • Upcoming Rule Changes & Next Steps

### 2



# Rule 203 – Prevention of Significant Deterioration(PSD)

• Affects “major sources” that require a permit for new or modified equipment

– 100 tpy of any pollutant subject to regulation for the 21 source categories (fugitive emissions included in determin ation) – 250 tpy of any pollutant subject to regulation for all other sources (fugitive emissions not used in determination) 

### • Reduce impact of new or modified sources on air quality problems by requiring:
– Best Available Control Technology (BACT) – Air quality analysis – Additional impacts analysis – Public involvement / noticing



## Background on Greenhouse Gases (GHG)

• GHG: Six well-mixed GHG often calculated as CO 2 e
– CO 2 , CH 4 , N 2 O, HFCs, PFCs, and SF 6 • 2007 – Supreme Court found GHGs covered by Clean Air Act • 2009 - EPA found GHG air pollution threatens public h ealth • May 2010 – EPA adopted vehicle emissions standards
– Requires GHG PSD and Title V reqmts. beginning Jan . 2, 2011 • June 2010 - EPA adopts PSD and Title V GHG Tailoring Rule
– Limits PSD/Title V applicability to largest emitte rs • Dec. 1, 2010 - EPA signed rule requiring revisions to o ur approved PSD rule (& rules in 12 other states)

– EPA also established a federal PSD rule that will be in effect if EPA doesn’t receive our revised rule by 1/31/11

### 3



# PSD GHG Requirements

• GHG Tailoring Rule • PSD Rule changes are needed because:
– EPA’s rule (referred to as SIP Call) requires revisio ns to our approved PSD rule to include GHG by Jan 31, 2011

– EPA federal PSD rule takes effect if our revised rule is not approved by the deadline noted above
– ensures that new major sources or major modificati ons will be able to obtain PSD permits
– EPA Region 9 is the permitting authority for the f ederal PSD rule – Replace 1984 Approved PSD Rule combined with NSR – Proposed amendment to Rule 203 expected shortly and Rule 207 in early 2011



# GHG Applicability

• Step 1 - Starting January 2, 2011 – PSD permit required if: • Already subject for another regulated NSR pollutan t • Source increases GHG emissions ≥ 75,000 tpy CO 2 e and ≥ 0 tpy GHG (mass basis) 

### – Title V permit required if: • Sources address GHGs only when applying for a new Title V permit, or renewing or revising existing Title V permits 

### • Step 2 - Starting July 1, 2011 – PSD permit required if source has:

• PTE ≥ 100,000 tpy CO 2 e and 100/250 tpy GHG (mass basis)
• Increase ≥ 75,000 tpy CO 2 e and ≥ 0 tpy GHG 

### – New Title V permit must be obtained if:

• PTE ≥ 100,000 tpy CO 2 e and 100 tpy GHG (based solely on GHGs)

### 4



# GHG Applicability

• Step 3 – EPA must – Set requirements no later than July 1, 2012 – Give 1 year notice before requirements take effect



## • Step 4 – Before April 2016 EPA cannot set requirements for: – New sources emitting < 50,000 tpy CO 2 

### e and – Modification increasing < 50,000 tpy CO 2 

### e continued



### Deadline PSD Action Required

(Apply Best Available Control Technology (BACT) for GHG)
January 2, 2011 and after Step 1 - Sources required to obtain PSD permits for another

regulated pollutant must obtain a GHG PSD permit if sum of 6 GHG pollutant increased and collective GHG emissions in creased 75,000 tons per year (tpy) CO 2 e or more July 1, 2011 Step 2 – If a source is not required to get a PSD pe rmit for another

regulated pollutant, but emits ≥ 100,000 CO 2 e, they must obtain a GHG PSD permit if it is:

 new major source for GHG - must have both: a) sum of 6 GH G pollutants 100/250 tpy or more and b) collective GHG emissions 100,00 0 TPY CO 2 e or
more, or

 modifications to existing major sources, sum of 6 GHG poll utants increased and collective GHG emissions increased 75,000 tpy CO 2 e or more July 1, 2013 EPA may require PSD permitting at more sources, eff ective

not later than 2013, in rules issued not later than July 1, 2012 April 30, 2016 No source that emits, or increases their emissions, less than 50,000

tpy CO 2 e will be required to obtain permits before April 3 0, 2016

### 5



# Rule 207 – Title V Permitting

• Proposed amendments to Rule 207 expected Spring 2011 • Existing Title V Sources: – Not anticipating reopening of Title V permits to add GHG, however GHG will be added to permits upon renewal • New Title V sources (Step 2, July 2011): Sources are required to obtain Title V permit based solely GHG emissions if PTE ≥ 100,000 tpy CO 2 e – Existing or new source emits or has PTE to emit GH G ≥ 100 tpy on a mass basis and ≥ 100,00 tpy CO 2 e – Rule 207, Section 301.9 requires sources that beco mes subject to Rule 207 must complete a Title V permit applicat ion within 12 months of the date of becoming subject to Rule
– New Title V sources must meet:
• SIP-approved rules as federally enforceable requir ements • Reporting, compliance certification, non-GHGs requ irements (SIP-approved rules, MACT standards, PSD) & monitor ing (if applicable)

Application
Deadline Title V Action Required District Deadline for Title V Issuance

12 months after commencing operation All sources that trigger a GHG PSD permit

(Step 1 or Step 2) – must submit Title V application within 12 months after commencing operation under their new/modified PSD permit 18 months

July 1, 2012 Sources that emit sum of 6 GHG pollutants

≥ 100 tpy and sum of 6 GHG pollutants ≥ 100,000 tpy CO 2 e or more must obtain a Title V permit if they do not already have one. 18 months

12 months prior to renewal Existing Title V sources (for another regulated

pollutant) that do not modify must include information about their GHG emissions in their Title V permit renewal application (even those ≥ 100,000 tpy CO 2 e) 12 months

Note: This chart assumes the only “applicable requirement ” for a Title V permit is PSD

Title V permits may also be required if a new NSPS or other GHG applicable requirement is promulgated.
EPA may require add’l sources to have Title V permit in rulemaking expected 7/1/12.

### 6 Subject to PSD for another regulated NSR pollutant? Not subject to PSD/Title V for GHGs under Step 1 of Tailoring Rule

Potential CO 2 e increase ≥ 75,000 tpy?

Must include GHG requirements (BACT) in PSD permit Title V permit must include GHG requirements (BACT) No

No Yes

Yes Step 1 – New Sources Beginning January 2, 2011 

# Step 1 – New Sources

Modification subject to PSD for another regulated pollutant? Not subject to PSD/Title V for GHGs under Step 1 of Tailoring Rule

Net GHG increase > 0 (mass) & Sum CO 2 e increase ≥ 75,000 tpy?

Must include GHG requirements (BACT) in PSD permit Title V permit must include GHG requirements (BACT) No

No Yes

Yes Step 1 – Existing Sources Beginning January 2, 2011 

# Step 1 – Existing Sources

Net CO 2 e increase ≥ 75,000 tpy No

Yes

### 7 GHG emissions ≥ 100/250 tpy Not subject to PSD/Title V for GHGs under Tailoring

Rule Subject to PSD for another regulated NSR pollutant? Check Step 1

Another regulated NSR pollutant

≥ 100/250 tpy?

Must include GHG requirements (BACT) in PSD permit Title V permit must include GHG requirements (BACT) Step 1 & 2 - New Sources Beginning 7/1/11 

# Step 1 & 2 - New Sources

Yes Yes Yes

Yes No No No

No CO 2 e emission ≥ 100,000 tpy

Sum GHG emissions > 0 tpy? Not subject to PSD/Title V for GHGs under Tailoring

Rule

Sum CO 2 e increase
≥ 75,000 tpy? Potential GHG emissions ≥ 100,000 tpy CO 2 e & 100/250 tpy Modification subject to PSD for another regulated pollutant?

Net CO 2 e ≥ 75,000 tpy

Must include GHG requirements (BACT) in PSD permit Title V permit must include GHG requirements (BACT) Step 1 & 2 – Existing Sources Beginning 7/1/11 

# Step 1 & 2 – Existing Sources

Yes Yes

No

No

No GHG emissions ≥ 100,000 tpy CO 2 e & 100/250 tpy No No

Yes

Not subject to PSD/Title V for GHGs under Tailoring

Rule No Yes

Yes Yes

### 8



# Upcoming Rule Changes & Next Steps • Public Hearing for Rule 203 – January 27, 2011 at 9:30 am 

## • Rule 207 – expected Spring 2011 

# • Direct comments/questions to:

Marc Cooley SMAQMD
777 12 th Street, 3 rd Floor Sacramento, CA 95816 email: mcooley@airquality.org Phone: (916) 874-4846