U.S. EPA - South CoastAir Quality Management District Agreement for Partial Delegation ofAuthority to Issue and Modify Prevention of Significant Deterioration Permits Subject to 40 CFR52.21 The undersigned, onbehalfofthe South CoastAir Quality Management District (District) andthe United States Environmental Protection Agency (EPA), hereby agree to the partial delegation ofauthority to issue Prevention ofSignificant Deterioration (PSD) initial permits and to modify existing PSD permits, subject to the terms and conditions of this Agreement. This partial delegation is executedpursuant to 40 CFR 52.21(u), Delegation ofAuthority. I. Background Recitals 1. On January 15, 1997, EPA delegated authority to implementthe federal PSD regulations at 40 CFR 52.21 to the District. The delegation was based on EPA's determination that District Regulation XVII generally metthe requirements of40 CFR52.21; therefore, Districtpermits issued in accordance with the provisions ofRegulation XVII were deemedto meet federal PSD permitrequirements pursuantto the provisions ofthe delegation agreement. 2. OnDecember 31, 2002, EPA finalized revisions to the regulations at 40 CFR 52.21, which became effective onMarch 3, 2003. See 67 FR 80186. After discussions with the California Air Resources Board and the District, EPA informed the District that it would need to adopt revisions to Regulation XVII to address the recent PSD revisions and continue to implement the federal PSD program pursuant to 40 CFR 52.21. Accordingly, on March 3, 2003, EPA withdrew the delegation offederal PSD authority from the District. See 68 FR 19371 (Apri121, 2003). 3. OnJune 24,2005, the District ofColumbia Court ofAppeals vacated two provisions ofthe revised federal PSD regulations related to Clean Units and Pollution Control Projects. The provisions upheld bythe Courtprovide new

1additional calculation methodologies for determining ifa proposedproject will result ina major modification andthe application ofa Plantwide Applicability Limit (PAL). II. Scope ofPartial Delegation 1. The provisions upheld bythe court (additional calculation methodologies and PALs) are not specifically addressed by Regulation XVII. Therefore, this partial delegation ofauthority to issue and modify PSD permits does not delegate authority to the District to modify PSD permits whenthe applicant seeks to use the additional calculationmethodologies promulgated in 40 CFR 52.21 but not set forth in Regulation XVII and does not delegate authority to issue new or modified PSDpermits based on PALS. 2. For all applications for new ormodified PSD permits otherthan those set forth in paragraph 1 above, the existing Districtregulations continue to generally meet the requirements of40 CFR 52.21 for issuing PSD permits; therefore District permits issued in accordance with the provisions ofRegulation XVII shall be deemed to meet federal PSD permitrequirements pursuant to the provisions of this delegation agreement. III. Applicability 1. EPA and the Districthave agreedto this partial delegation ofPSD authority to allowthe Districtto issue initial and modified PSD permits, except for modifications seeking to determine PSD applicabilitybased on the additional calculation methodologies set forth in 40 CFR 52.21 and new ormodified PSD permits seeking PALs. (Modifications include Administrative Amendments, Major Modifications, and non-Major Modifications.) 2. Pursuant to this partial delegation agreement, the District shall have primary responsibility for issuing all new and modified PSD permit(s). 3. The authority to issue a PSD permit containing a PAL is not delegated to the District as part ofthis delegation agreement. Ifany facility subject to this 2agreementrequests a permit modification to incorporate conditions for a PAL, as provided in 40 CFR 52.2l(aa), EPA shall process the application and issue the final PALpermit for the modification. 4. Ifany source seeks a PSD permit modification based on determining applicability with the additional calculation methodologies set forth in 40 CFR 52.21 (as revised in 2002), EPA shall issue the PSD permit. 5. This partial delegation ofPSD authority becomes effective upon the date ofthe signatures ofboth parties to this Agreement. 

### IV. General Delegation Conditions 1. The District shall issue PSD permits under this partial delegation Agreement in accordance withthe PSD requirements ofthe District's Regulation XVII and 40 CFR 52.21, as amended on December 31, 2002; except as provided in subsection III. 2. This partial delegation may be amended at anytime bythe formal written agreement ofboth the District and the EPA, including amendments to add, change, orremove terms or conditions ofthis Agreement. 3. EPA mayreview the PSD permit(s) issued bythe District to ensure thatthe District's implementation ofthis delegation Agreement is consistent with federal PSD regulations for major sources and majormodifications (40 CFR 52.21). 4. Ifthe EPA determines that the District is not implementing or enforcing the PSD program in accordance with the terms and conditions ofthis partial delegation agreement, the requirements ofRegulationXVII, 40 CFR 52.21, 40 CFR 124 or the Clean AirAct, this partial delegation agreement may be revoked in whole or in part. Any such revocation shall be effective as ofthe date specified in a Notice ofRevocation to the District. 5. Ifthe District determines that issuing a PSDpermit in accordance with the terms and conditions ofthis agreement, the requirements ofRegulation XVII, 40 CFR



### 352.21, 40 CFR 124, any other applicable regulations or guidance memorandum, orthe CleanAirAct conflicts with State orlocal law, orexceeds the District's authority orresources to fully and satisfactorily carry out suchresponsibilities, the District after consultation with EPA, mayremand administration ofthese permits to EPA. Any suchremand shall be effective as ofthedate specified in a Notice ofRemandto EPA. 6. The permit appeal provisions of40 CFR 124, including subpart C thereof, pertaining to the Environmental Appeals Board (EAB), shall apply to all federal PSD permitting action appeals to the EAB for permits issued by the District underthis partial delegation agreement. Forpurposes ofimplementingthe federal permit appeal provisions underthis partial delegation, ifthereis a public commentrequesting a change 

### in a draft preliminary determination or draftpermit conditions, the final permit issued by the District shall contain a statement that for federal PSD purposes and in accordance with 40 CFR 124.15 and 124.19, (1) the effective date ofthe permit shall be 30 days after the date ofthe final decision by the District to issue, modify, or revoke and reissue the permit; and (2) ifan appeal is made to the EAB, the effective date ofthe permit shall be suspended until such time as the appeal is resolved. Failure by the District to comply with the terms ofthisparagraph shall render the subject permit invalid for PSD purposes. 

### V. Communication Between EPA and the District The District and EPA will use the following communicationprocedures: 1. The District will forward to EPA copies of(1) the findings related to the PSD application, (2) thejustification for the District's preliminary determination, (3) the draft permit and (4) all public notices required by40 CFR 124. Such copies shall be provided at or priorto the beginning ofthe public commentperiod for each PSD preliminarydetermination. EPA will provide comments to the District as soon as possible prior to the close ofthe public commentperiod.

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### 2. The District will forward to EPA copies ofthe final action for each PSD permit application at the time ofissuance, as well as copies ofsubstantive public comments. 3. The District will send to EPA a copy ofall PSD non-applicability determinations that utilize netting. All such determinations must be accompanied by a written justification. 

### VI. EPA Policies Applicable to PSD Review 1. EPA is responsible for the issuance ofPSD permits on Indian Lands, under Sections 110 and 301 ofthe Clean AirAct and for those situations set forth in Section III above. This agreement in no way grants or delegates any authority under the Clean Air Act on Indian Lands to the District. 2. All PSD BACT determinations are required to perform a "top-down" BACT analyses. EPA will consider as deficient any BACT determination that does not begin with the most stringent control options available for that source category. 3. The District must consult withthe appropriate Federal, State and local land use agencies prior to issuance ofa PSD permit preliminary determination. For the purposes ofthe Endangered Species Act (ESA), the District shall:

a. Notify the Fish and Wildlife Service (FWS) and EPA when a PSD permit application has been received, in orderto assist EPA in caring out its nondelegable responsibilities under Section 7 ofthe ESA (PL 97-304). b. Notify applicants ofthepotential need for consultation between EPA and FWS ifan endangered species may be affected by the project.

c. Refrain from issuing a final PSD permit unless FWS has determined that the proposed project will not adversely affect any endangered species.



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### VII. Permits 1. The District shall request and follow EPA guidance on any matter involving the interpretation ofSections 160-169 ofthe Clean AirAct or 40 CFR 52.21, relating to applicability determinations, PSD permit issuance and enforcement. 2. The District will at no time grant any waiverto the PSD permitrequirements. 3. Authorities to Construct must include appropriate provisions to ensure permit enforceability. Permit conditions shall, at a minimum, containreporting requirements on initiation ofconstruction, start-up, and source testing (where applicable). Upset/breakdown and malfunction conditions shall be included in all permits. 4. When any conditions ofa PSD permit are incorporated into a Title V permit, the District shall clearly identify PSD as the basis for those conditions. 

### VIII. Permit Enforcement

Ill Ill Ill 1. The primaryresponsibility for enforcement ofthe PSD regulations rests with the District. The District will enforce the provisions ofthe PSD program except in those cases where District rules orpolicy are more stringent. In that case, the Districtmay electto implement the more stringentrequirements. 2. Nothing in this partial delegation agreement shall prohibitEPA from enforcing the PSD provisions ofthe Clean AirAct, 40 CFR 52.21 orany PSDpermit issued bythe Districtpursuant to this agreement. 3. Inthe event that the District is unwilling orunable to enforce a provision ofthis partial delegation agreement with respectto a source subject to the PSD regulations, the District will immediately notify the Air Division Director.

6Date Failure to notify the Air Division Director does not preclude EPA from exercising its enforcement authority.

# 2)~ ?ck? Barry Wallerstein, Exec tive Officer South Coast Air Qu · Management District

APPROVED AS TO FORM

Kurt R. Wiese, District Counsel Barbara Baird, Principal Deputy

Director, Air Divisi n U.S. EPA, Region IX

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