UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


AUG 1 3 2009 

CERTIFIED MAIL # 7006 2150 00001 4941 2215 

RETURN RECEIPT REQUESTED 

IN REPLY: AIR-5 

REFER TO: Docket No. R9-09-011 

Mr. Randy S. Livingston 

Vice President - Power Generation 

Pacific Gas and Electric Company 

P.O. Box 770000, Mail Code NIlE 

San Francisco, CA 94177 

Re: PG & E Gateway Generating Station. Finding and Notice of Violation 

Dear Mr. Livingston: 

Enclosed is a copy of a Finding and Notice of Violation ("NOV") issued pursuant 

to section 113(a)(l) of the Clean Air Act, 42 U.S.C. §§ 7401-7671q (the "Act"), notifying 

you that the United States Environmental Protection Agency ("EPA"), Region IX, finds 

that Pacific Gas and Electric Company's (PG&E) Gateway Combined Cycle Generating 

Station located in Contra Costa County, California (the "Facility") is in violation ofthe 

Clean Air Act ("Acf'). 

You should be aware that section 113(a)(l) of the Act authorizes EPA to issue an 

order requiring compliance with the requirements of the Act, issue an administrative 

penalty order, or commence a civil action seeking an injunction and/or a civil penalty. 

Furthermore, section 113( c) of the Act provides for criminal penalties in certain cases. 

In addition, section 306 of the Act, 42 u.s.c. § 7606, the regulations promulgated 

thereunder (2 C.F.R. Part 180), and Executive Order 11738 provide that facilities to be 

utilized in federal contracts, grants, and loans must be in full compliance with the Act and 

all regulations promulgated pursuant to it. A violation of the Act may result in the PG&E 

Facility being declared ineligible for participation in any federal contract, grant, or loan. 

If you wish to discuss the enclosed NOV, you may request a conference with EPA 

within ten (10) working days of receipt of this NOV. The conference will afford PG&E 

an opportunity to present information bearing on the finding of violation, the nature of 

the violations, and any efforts it may have taken or proposes to take to achieve 

compliance. 

Printed on Recycled Paper 
If you have any questions pertaining to this NOV, please contact Steve Frey of the 

Air Enforcement Office at (415) 972-3796, or have your attorney contact Allan Zabel, 

Office of Regional Counsel, at (415) 972-3902. 

Thank you for your cooperation in this matter. 

Sincerely, 

DM::~ Director, Air Division 

Enclosure 

cc: 	 Mr. Jack Broadbent (BAAQMD) 

Mr. Jim Ryden (CARB) 

Mr. Dave Farabee (e-mail) 

2 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 

Am 1 3 2009 

IN REPLY: AIR-5 

REFER TO: Docket No. R9-09-11 

~r. Jack Broadbent 

Executive Of1icerl Air Pollution Control Of1icer 

Bay Area Air Quality ~anagement District District 

939 Ellis Street 

Enclosed for your information is a copy of a Finding and Notice of Violation 

("NOV") that the United States Environmental Protection Agency ("EPA"), Region IX, 

issued to Pacific Gas and Electric (PG&E) for violations of the Clean Air Act ("Act") at 

its Gateway Combined Cycle Generating Station located in Contra Costa County, 

California. 

The purpose of the NOV is to notify PG&E that EPA finds that it has violated 

certain provisions of the California State Implementation Plan. The violations are set 

forth more specifically in the enclosed NOV. The NOV has been issued pursuant to 

section 113(a)(l) of the Act, 42 U.S.c. §§ 7401-7671q. 

The Act also provides that after 30 days from the issuance of an NOV, EPA may 

determine if any further action will be taken pursuant to section 113 of the Act. 

If you have any questions concerning this NOV, please contact Steve Frey, Air 

Enforcement Office, at (415) 972-3796, or i'n':\.slc\l' ({Cra.UO\. 

Sincerely, 

Director, Air Division 

Enclosure 

Printed on Recycled Paper 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


AUG 13 2009 

IN REPLY: AIR-5 

REFER TO: Docket No. R9-09-11 

Mr. Jim Ryden 

Chief, Enforcement Division 

California Air Resources Board 

P.O. Box 2815 

Sacramento, CA 95812 

Dear Mr. Ryden: 

Enclosed for your information is a copy of a Finding and Notice of Violation 

("NOV") that the United States Environmental Protection Agency ("EPA"), Region IX, 

issued to Pacific Gas and Electric (PG&E) for violations of the Clean Air Act ("Act") at 

its Gateway Combined Cycle Generating Station located in Contra Costa County, 

California. 

The purpose of the NOV is to notify PG&E that EPA finds that it has violated 

certain provisions of the California State Implementation Plan. The violations are set 

forth more specifically in the enclosed NOV. The NOV has been issued pursuant to 

section 113(a)(1) of the Act, 42 U.S.c. §§ 7401-7671q. 

The Act also provides that after 30 days from the issuance of an NOV, EPA may 

determine if any further action will be taken pursuant to section 113 of the Act. 

If you have any questions concerning this NOV, please contact Steve Frey, Air 

Enforcement Office, at (415) 972-3796, or I'rc\.stC\CClcpa.!l()\. 

Sincerely, 

De&MrfV 

Director, Air Division 

Enclosure 

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UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 

In the Matter of: 

PACIFIC GAS AND ELECTRIC 

Proceeding under Section 

of the Clean Air Act, 

42 U.S.C. § 9613(a) 

COMPANY 

113(a) 

Docket No. R9-09-11 

FINDING AND 

NOTICE OF VIOLATION 

STATUTORY AND REGULATORY AUTHORITY 

1. This Finding and Notice of Violation ("FNOV") is issued 

to the Pacific Gas and·Electric Company ("PG&E") for violations 

of the Clean Air Act at PG&E's Gateway Generating Station ("GGS") 

located in Contra Costa County near Antioch, California. This 

FNOV is issued pursuant to Section 113 (a) (1) of the Act, 42 

U.S.C. 	 § 7413 (a) (1). Section 113 (a) (1) of the Act requires the 

dministrator of the United States Environmental Protection 

gency ("EPA") to notify any person in violation of an applicable 

state 	implementation plan ("SIP") or a permit when the 

dministrator finds that person to be in such violation. The 

authority to issue this FNOV has been delegated to the Regional 

dministrator of EPA, Region IX, and re-delegated to the Director 

of the Air Division of EPA, Region IX. 

2. The Administrator of the Environmental Protection 

gency ("EPA"), pursuant to authority under Section 109 of the 

Clean Air Act (the "Act"), 42 U.S.C. § 7409, promulgated National 

mbient Air Quality Standards ("NAAQS") for certain criteria 

pollutants, including PM1o ' carbon monoxide, and nitrogen 

dioxide. 40 C.F.R. §§ 50.6, 50.8, and 50.11. 

3. Pursuant to Section 107(d) of the Act, 42 U.S.C. 

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§ 7407(d), the Administrator promulgated lists of attainment 

status designations for each air quality control region ("AQCR") 

in every State. These lists identify the attainment status of 

each AQCR for each of the criteria pollutants. The carbon 

dioxide, PM10 ' and nitrogen dioxide attainment status 

designations for the California AQCRs are listed at 40 C.F.R. 

§ 81.305. 

4. The Bay Area Air Quality Management District ("BAAQMD") 

has primary jurisdiction over major stationary sources of air 

pollution sources in the San Francisco Bay Area Intrastate AQCR. 

40 C.F.R. 81.21. This jurisdiction includes GGS. 

5. Section 161 of the Act, 42 U.S.C. § 7471, requires that 

each state implementation plan ("SIP") contain provisions to 

implement the Act's Prevention of Significant Deterioration 

("PSD") program for areas of that state which are designated as 

being in attainment with any NAAQS for a criteria pollutant. The 

PSD program applies to major new sources of air pollution. 

6. The PSD permitting program for the San Francisco Bay 

rea Intrastate AQCR is the federal PSD program, which is set 

forth at 40 C.F.R. § 52.21 ("PSD Program"). 

7. The PSD Program requires, among other things, that the 

owner or operator of a new major stationary source of air 

pollution obtain a PSD permit, which complies with the 

requirements of 40 C.F.R. § 52.21, prior to constructing a new 

major source of air pollution. The PSD permit must require, 

among other things, that the best available control technology 

("BACT") be installed at the source being constructed or 

modified. The definition of a major modification is set forth in 

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40 C.F.R. § 52.21. 

FINDINGS OF FACT AND LAW 

8. PG&E generates electricity at GGS, which is a nDminal 

530 megawatt, natural gas-fired, combined cycle, combustion 

turbine power plant. At all times relevant to this FNOV, GGS has 

been and continues to be a major source of air pollution. GGS is 

located in Contra Costa County near Antioch, California, which is 

under the jurisdiction of BAAQMD and EPA. 

9. On July 24, 2001, PG&E's predecessor in interest, 

Delta, LLC ("Mirant"), obtained a PSD permit from the BAAQMD as 

part of a single, comprehensive Authority to Construct. BAAQMD 

issued that PSD permit pursuant to the authority set forth in 40 

C.F.R. 52.21 and a delegation of authority from EPA dated April 

26, 1986. Such delegation of authority to issue PSD permits and 

implement the PSD Program is allowed under 40 C.F.R. 52.21{u). 

10. The delegation of authority to BAAQMD to implement the 

PSD Program was revoked on March 3, 2003. A partial redelegation of authority to BAAQMD to implement the PSD Program 

was issued on June 21, 2004. 

11. At some point during the time period between February 

2002 and September 2002, Mirant ceased construction of GGS. This 

cessation of construction lasted more than 18 months. 

12. Pursuant to the PSD Program, 40 C.F.R. 52.21{r), where 

construction of a major new source pursuant to a PSD permit is 

discontinued for 18 months or more, the PSD permit automatically 

expires unless an extension is granted by the Administrator of 

EPA or someone who currently possesses a valid delegation of 

authority from the Administrator to grant such an extension. 

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13. Between the time the PSD permit for GGS was issued to 

Mirant and the latest time that PSD permit would have 

automatically expired due to discontinued construction of GGS, no 

valid extension of the PSD permit was requested from or issued by 

the Administrator of EPA or someone who currently possessed a 

valid delegation of authority from the Administrator to grant 

such an extension. Therefore, the PSD permit automatically 

expired when construction of GGS had ceased for 18 months. 

14. PG&E took over ownership of GGS from Mirant on November 

30, 2006, and restarted construction of GGS in January 2007. At 

the time PG&E took over ownership of GGS and restarted 

construction of GGS, the PSD permit for the construction and 

operation of GGS had expired. PG&E has not applied for a new PSD 

permit. 

15. PG&E failed to obtain a valid PSD permit prior to 

restarting construction of and operating GGS. PG&E's failure to 

have a valid PSD permit continues to this time. 

FINDING OF VIOLATIONS 

16. PG&E violated the SIP and the Act by restarting 

construction of and operating GGS, a major new source of air 

pollution, without obtaining a valid PSD permit. 

ENFORCEMENT 

17. Section 113(a) (1) of the Act provides that at any time 

after the expiration of 30 days following the date of the 

issuance of this FNOV, EPA may, without regard to the period of 

violation: 

issue an order requiring compliance with the 

requirements of the SIP or permit, or 

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issue an administrative penalty order pursuant to 

Section 113(d) of the Act for civil administrative 

penalties of up to $32,500 per day of violation, or 

bring a civil action pursuant to Section 113(b) for 

injunctive relief and/or civil penalties of not more 

than $32,500 per day for each violation. 

42 U.S.C. § 7413(a) (1), as amended by the Federal Civil Penalties 

Inflation Adjustment Act of 1990, Pub. L. 101-410, as amended, & 

40 C.F.R. § 19. Furthermore, for any person who knowingly 

violates any SIP or permit requirement more than 30 days after 

the date of the issuance of a FNOV, Section 113(c) of the Act 

provides for criminal penalties, imprisonment, or both. 42 

U.S.C. § 7413 (c) (3) . 

In addition, under Section 306(a) of the Act, the 

regulations promulgated thereunder (40 C.F.R. Part 32), and 

Executive Order 11738, facilities to be used in federal 

contracts, grants, and loans must be in full compliance with the 

ct and all regulations promulgated pursuant to it. Violation of 

the Act may result in the GGS being declared ineligible for 

participation in any federal contract, grant, or loan. 

PENALTY ASSESSMENT CRITERIA 

18. Section 113 (e) (1) of the Act states that the 


dministrator or a court, as appropriate, shall, in determining 


the 	amount of any penalty to be assessed, take into consideration 

(in addition to such other factors as justice may require) the 

size of the business, the economic impact of the penalty of the 

business, the violator's full compliance history and good faith 

efforts to comply, the duration of the violation as established 

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by any credible evidence (including evidence other than the 

applicable test method), payment by the violator of penalties 

previously assessed for the same violation, the economic benefit 

of noncompliance, and the seriousness of the violation. 42 

U.S.C. § 7413 (e) (1) 

Section 113(e) (2) of the Act allows the Administrator or a 

court to assess a penalty for each day of violation. 42 U.S.C. 

§ 7413(e) (2). For the purpose of determining the number of days 

of violation, where EPA makes a prima facie showing that the 

conduct or events giving rise to a violation are likely to have 

continued or recurred past the date of the issuance of a FNOV, 

EPA shall presume the days of violation to include the date of 

issuance of the FNOV and each and every day thereafter until the 

violator establishes that continuous compliance has been 

achieved, except to the extent that the violator can prove by a 

preponderance of the evidence that there were intervening days 

during which no violation occurred or that the violation was not 

continuing in nature. 

OPPORTUNITY FOR CONFERENCE 

19. PG&E may, upon request, arrange to have a conference 

with EPA to discuss this matter. A conference would enable PG&E 

to present evidence bearing on the finding of violation, the 

nature of the violation, and any efforts that it may have taken 

or proposes to take to achieve compliance. If PG&E wishes to 

take advantage of this opportunity, it must make a request for a 

conference within ten (10) days of receipt of this FNOV. PG&E, 

if it chooses to request a conference, may choose to be 

represented by counsel at the conference. Any request for a 

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conference or other inquiries concerning this FNOV should be made 

in writing to: 

Allan Zabel 


Office of Regional Counsel 


u.s. Environmental Protection Agency, Region 9 

75 Hawthorne Street (ORC-2) 

San Francisco, CA 94105 

(415) 972-3902 

Date 

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