AUTHORITY TO CONSTRUCT / MODIFY

ISSUED PURSUANT TO

PREVENTION OF SIGNIFICANT DETERIORATION (PSD)

REQUIREMENTS AT 40 CFR § 52.21

PSD PERMIT NUMBER: SAC 87-01-A

U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION IX

PERMITTEE: Sierra Pacific Industries – Loyalton (SPI-Loyalton)

FACILITY LOCATION: Railroad Avenue, Loyalton, CA

This Permit is issued pursuant to the Prevention of Significant Deterioration (PSD) 

requirements of the Clean Air Act, as amended, 42 U.S.C. §§ 7401 - 7671, et seq. SPILoyalton is granted approval to construct/modify operation of their existing 20 MW 

Cogeneration Power Plant located near Loyalton, California, as described herein, in 

accordance with the permit application and permit amendment dated August 30, 2010 

(and plans submitted with the permit application), federal regulations governing the 

Prevention of Significant Deterioration of air quality (40 CFR § 52.21), and other terms 

and conditions set forth in this PSD Permit. 

Failure to comply with any condition or term set forth in this PSD Permit is subject to 

enforcement action pursuant to Section 113 of the Clean Air Act.

This PSD Permit does not relieve the Permittee from the responsibility to comply with 

any other applicable provisions of the Clean Air Act (including 40 CFR Parts 51, 52, 60, 

61, 63, and 72 through 75), other federal, or Northern Sierra Air Quality Management 

District (District) requirements.

This PSD Permit becomes effective at the date of issuance pursuant to 40 CFR § 

124.15(b)(3).

 original signed by Elizabeth Adams for August 30, 2010

Deborah Jordan Date

Director, Air Division
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AUTHORITY TO CONSTRUCT / MODIFY

ISSUED PURSUANT TO

PREVENTION OF SIGNIFICANT DETERIORATION (PSD)

REQUIREMENTS AT 40 CFR § 52.21

SIERRA PACIFIC INDUSTRIES, LOYALTON, CA

PSD PERMIT NUMBER: SAC 87-01-A

August 30, 2010

Permit Conditions

I. Applicant

Sierra Pacific Industries

Railroad Avenue

Post Office Box 208

Loyalton, California 96118

II. Project Location

The project is located on Railroad Avenue, in the town of Loyalton, Sierra 

County, California. This facility is located in the Northern Sierra Air Quality 

Management District and lies within the Mountain Counties Air Basin. 

The nearest Federal Class I area is the Desolation Valley Wilderness Area, 

located 43.7 miles to the south. 

III. Project Description

Sierra Pacific Industries (SPI) is seeking an amendment to the Prevention of 

Significant Deterioration (PSD) permit issued in 1987 by the U.S. Environmental 

Protection Agency (EPA). The proposed project is the amendment of permit 

conditions for the cogeneration facility contained in Prevention of Significant 

Deterioration permit number NSR 4-4-4, SAC 89-01. The Applicant proposes to 

increase emission limits and averaging times of nitrogen (NOx) and carbon 

monoxide (CO). No change in the construction of the boiler is proposed. 

The cogeneration facility includes a 20 MW, 335.7 MMBTU/hour Riley spreaderstoker boiler for the combustion of wood fuel and production of steam, a turbine 

generator for converting the energy of steam into electrical energy, a fuel 

handling and storage area, and an ash handling facility.

IV. Permit Expiration

This Approval to Modify shall become invalid if construction is not commenced 
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(as defined in 40 CFR 52.21(b)(8)) within 18 months after the approval takes 

effect, (2) if construction is discontinued for a period of 18 months or more, or (3) 

if construction is not completed within a reasonable time.

V. Notification of Commencement of Construction and Startup

The Regional Administrator shall be notified in writing of the anticipated date of 

initial startup (as defined in 40 CFR 60.2(o)) of each facility of the source not 

more than sixty (60) days nor less than thirty (30) days prior to such date and shall 

be notified in writing of the actual date of commencement of construction and 

startup within fifteen (15) days after such date.

VI. Facilities Operation

All equipment, facilities, and systems installed or used to achieve compliance 

with the terms and conditions of this Approval to Modify shall at all times be 

maintained in good working order and be operated in a manner consistent with 

safety and good air pollution control practices for minimizing emissions.

VII. Malfunction Reporting

A. The Regional Administrator shall be notified by telephone, fax or email within 

48 hours following any failure of air pollution control equipment, process 

equipment, or of a process to operate in a normal manner which results in an 

increase in emissions above any allowable emissions limit stated in Section 

XII of these conditions. 

B. In addition, the Regional Administrator shall be notified in writing within 

fifteen (15) days of any such failure. This notification shall include a 

description of the malfunctioning equipment or abnormal operation, the date 

of the initial failure, the period of time over which emissions were increased 

due to the failure, the cause of the failure, the estimated resultant emissions in 

excess of those allowed under Section XII.D of these conditions, and the 

methods utilized to restore normal operations. 

C. Compliance with this malfunction notification provision shall not excuse or 

otherwise constitute a defense to any violations of this permit or of any law or 

regulations which such malfunction may cause.

VIII. Right to Entry

The Regional Administrator, the head of the State Air Pollution Control Agency, 

the head of the responsible local air pollution control agency, and/or their 

authorized representatives, upon the presentation of credentials, shall be 

permitted:
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A. to enter the premises where the source is located or in which any records are 

required to be kept under the terms and conditions of this PSD permit; and 

B. at reasonable times to have access to and copy any records required to be 

kept under the terms and conditions of this PSD permit; and

C. to inspect any equipment, operation, or method required in this PSD permit; 

and

D. to sample emissions from the source.

IX. Transfer of Ownership

In the event of any changes in control or ownership of facilities to be constructed 

or modified, this Approval to Construct/Modify shall be binding on all subsequent 

owners and operators. The applicant shall notify the succeeding owner and 

operator of the existence of this Approval to Construct/Modify and its conditions 

by letter, a copy of which shall be forwarded to the Regional Administrator and 

the State and local Air Pollution Control Agency.

X. Severability

The provisions of this Approval to Construct/Modify are severable, and, if any 

provision of this Approval to Construct/Modify is held invalid, the remainder of 

this Approval to Construct/Modify shall not be affected thereby.

XI. Other Applicable Regulations

The owner and operator of the proposed project shall operate the proposed 

stationary source in compliance with all other applicable provisions of 40 CFR 

Parts 52, 60 and 61 and all other applicable federal, state and local air quality 

regulations.

XII. Special Conditions

A. Certification 

Sierra Pacific Industries (SPI) shall notify the EPA in writing of compliance 

at the Loyalton facility with Special Conditions XII.B and XII.C below, and 

shall make such notification within 15 days of such compliance. This letter 

must be signed by a responsible representative of SPI.

B. Air Pollution Control Equipment/Operations

SPI shall install, continuously operate, and maintain the following air 

pollution controls to minimize emissions. Controls listed shall be fully 
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operational upon startup of the proposed equipment.

1. The Riley spreader-stoker boiler shall be equipped with a set of 

multiclones and an ESP for the control of particulate emissions.

2. The Riley spreader-stoker boiler shall be operated with high pressure 

over fire air for the control of CO emissions. 

3. The Riley spreader-stoker boiler shall be equipped with a selective noncatalytic reduction system (SNCR) system for the control of NOx

emissions.

4. Good combustion practices.

C. Continuous Emission Monitoring

1. SPI shall install, and maintain and operate the following continuous 

monitoring systems in the boiler exhaust stack:

2. Continuous monitoring systems to measure stack gas, NOX, CO and CO2

concentrations. The system shall meet EPA monitoring performance 

specifications (40 CFR 60.13; 40 CFR 60, Appendix B, Performance 

Specifications 2, 3, and 4; and, 40 CFR 60, Appendix F).

3. Continuous monitoring systems to measure stack gas, volumetric flow 

rates. The system shall meet EPA performance specifications (40 CFR 

Part 60, Appendix B, Performance Specification 6).

4. Prior to the date of startup, SPI shall install, and after completion of the 

initial performance test, maintain and operate a transmissometer system 

for continuous measurement of the opacity of stack emissions. The 

system shall meet EPA monitoring performance specifications (40 CFR 

60.13 and 40 CFR 60, Appendix B, Performance Specification 1).

D. Emission Limits

1. Total Riley spreader-stoker boiler annual emissions shall not exceed the 

following limits:

a. 222.6 tons of NOx per rolling 12-month period.

b. 2420.1 tons of CO per rolling 12-month period.

2. Emissions from the Riley boiler shall be limited to the more stringent of 

the following hourly or concentration limits, averaged over rolling 

multi-hour periods, except as provided by Special Condition XII.D3.:
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a. 50.75 lbs/hr of NOx or 80 ppm of NOx at 12% CO2 averaged over a 

rolling eight-hour period,

b. 550 lbs/hr of CO or 1443 ppm of CO at 12% CO2 averaged over a 

rolling eight -hour period,

c. Maximum 20% Opacity for any 6-minute average.

3. Emissions during transient operation shall not exceed:

a. 65 lbs/hr of NOx or 102 ppm at 12% CO2, averaged over 8 hours, for 

periods aggregating to no more than 100 hours per year,

b. 772.42 lbs/hr of CO or 1998 ppm, at 12% CO2, averaged over 8 

hours, for periods aggregating no more than 100 hours per year,

c. The following are transient operating conditions for the Riley boiler:

(1) Excess emissions indicated by the CEM system shall be 

considered violations of the applicable emission limit for the 

Periods of startup or shutdown typically 8 hours in duration. 

The average is 6 times per year.

(2) Changing power load on the turbine/generator due to the

outside electrical demand. The average is 15 to 30 times per 

year depending on transmission line maintenance intervals.

(3) Changing power load on the turbine/generator due to changing 

weather and transmission line failures. The average is 15 times 

per year.

(4) Cleaning firebox grates. This averages 6 times per day for 

about 30 minutes each time.

(5) Changing fuel types. This can occur about three times a week 

and lasts about 2 hours when tuning on the boiler settings.

(6) Annual source testing when required to operate at loads above 

or below the existing daily demands.

E. Revised Emission Limits

EPA may set a new allowable emissions rate or a more appropriate 

averaging period for any of the above pollutants after reviewing the first 

four quarters of continuous emission monitoring data required under Special 

Condition XII.C.
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If any emission limit is revised, the difference between the emission limit set 

forth above and a revised lower emission limit shall not be allowed as an 

emission offset for future construction or modification.

F. Performance Tests

1. Within 60 days after achieving the maximum production rate of the 

proposed equipment, but no later than 180 days after initial startup of 

equipment as defined in 40 CFR 60.2, and at such other times as 

specified by the EPA, SPI shall conduct performance tests for NOx, CO, 

and opacity and furnish the Northern Sierra AQMD and the EPA a 

written report of the results of such tests. The tests for NOx, and CO 

shall be conducted on an annual basis and at the maximum operating 

capacity of the unit being tested. Upon written request from SPI, EPA 

may approve the conducting of performance tests at a lower specified 

production rate. Also, after initial performance tests and upon written 

request and adequate justification from SPI, EPA may waive a specified 

annual test for the Riley spreader-stoker boiler.

2. Performance tests for NOx, CO, and opacity shall be conducted and the 

results reported in accordance with the test methods set forth in 40 CFR 

60, Part 60.8 and Appendix A. The following test methods shall be 

used:

a. Performance tests for emissions of NOx shall be conducted using 

EPA Methods 1-4 and 7e.

b. Performance tests for emissions of CO shall be conducted using EPA 

Methods 1-4 and 10.

c. Performance tests for opacity shall be conducted using 

EPA Method 9. 

d. The EPA shall be notified in writing at least 30 days prior to such 

tests to allow time for the review and approval of the test plan and to 

arrange for an observer to be present at the test. Such prior notice 

shall minimize the possibility of EPA rejection of test results for 

procedural deficiencies. In lieu of the above mentioned test 

methods, equivalent methods may be used with prior written 

approval from the EPA.

3. For performance test purposes, sampling ports, platforms, and access 

shall be provided by SPI on the boiler exhaust system in accordance 

with 40 CFR 60.8(e).
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G. Recordkeeping and Reporting

1. SPI shall maintain a file of all measurements, including continuous 

monitoring systems evaluations; all continuous monitoring systems or 

monitoring device calibration checks; adjustments and maintenance 

performed on these systems or devices; performance and all other 

information required by 40 CFR 60 recorded in a permanent form 

suitable for inspection. The file shall be retained for at least two years 

following the date of such measurement, maintenance, reports and 

records.

2. After the first complete four quarters of operation following receipt of 

the PSD permit, SPI shall submit to EPA all continuous monitoring 

system measurements for the last four quarters required by Special 

Condition XII.C to EPA Region 9, AIR-3.

3. SPI shall notify EPA of the date on which demonstration of the 

continuous monitoring system performance commences (40 CFR 60.13 

(c)). This date should correspond to the scheduled source test date.

4. SPI shall submit a written report of all excess emissions to EPA for 

every calendar quarter in accordance with 40 CFR 60.7(c) and (d). The 

report shall include the following:

a. When no excess emissions have occurred or the continuous 

monitoring system has not been inoperative, repaired, or adjusted, 

such information shall be stated in the report.

b. Excess emissions shall be defined as any 8-hour period during which 

the average emissions of NOX, CO, or O2, as measured by the CEM, 

exceeds the maximum emission limits set forth in Special Conditions 

XII.C.2, XII.C.3 and XII.C.4, above.

. (1) Excess emissions indicated by the CEM system shall be 

considered violations of the applicable emission limit for the 

purposes of this permit.

. (2) Not less than 90 days prior to the date of startup of the facility, 

SPI shall submit to the EPA a quality assurance project plan for 

the certification and operation of the continuous emission 

monitors. Such a plan shall conform to the EPA document 

"Guidelines for Developing a Quality Assurance Project Plan" 

(QAMS 005/80). 
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H. New Source Performance Standards

The Riley spreader-stoker boiler is subject to the Standards of Performance 

for New Stationary Sources (NSPS) 40 CFR 60, Subparts A, and Db, 

including all emission limits and all notification, testing, monitoring, and 

reporting requirements.

I. Fuel Use

1. The biomass fuel consists of a mixture of agricultural residues, 

including but not limited to rice hulls, in-forest residues from logging 

and chipping operations, and urban wood wastes from private and 

municipal landfills. The wood residue should be non-chemically 

treated, free of plastic, non-wood construction materials and resin 

binders. Urban woodwaste must be less than 1 % by weight of plastic, 

rubber, and other non-wood combustibles.

2. The annual input of biomass fuel to the Riley boiler shall not exceed 

367,044 tons at 55% moisture content.

3. Treated wood, coal or coal byproducts shall not be used as fuel by this 

facility.

4. Sierra Pacific Industries shall record and maintain records of the 

amounts of natural gas and biomass fuel fired each calendar quarter, and 

the plant hours of operation. All information shall be recorded in a 

permanent form suitable for inspection. The file shall be retained for at 

least two years following the date of such measurements, calculation 

and record.
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XIII. Agency Notifications

All correspondence as required by this Authority to Construct shall be forwarded 

to:

Director, Air Division

U.S. Environmental Protection Agency

75 Hawthorne Street

San Francisco, CA 94105

Chief, Stationary Source Division

California Air Resources Board

P.O. Box 2815

Sacramento, CA 95814

Air Pollution Control Officer

Northern Sierra Air Quality Management District

Air Pollution Control Officer

200 Litton Drive

P.O. Box 2509

Grass Valley, CA 95945