State of Nevada

Dept. of Conservation & Natural Resources

State Environmental ommission SEC.nv.gov

901 South Stewart Street, SuIte 4001, Carson City, Nevada 89701

Summary Minutes of the

STATE ENVIRONMENTAL COMMISSION (SEC)

Meeting of December 4, 2013 10:00 AM

Bryan Building Carson City

901 South Stewart Street

Carson City, NV

Members Present: Members Absent:

E. Jim Gans, Chairman Frances Barron

Pete Anderson Jim Barbee

Tom Porta Kathryn Landreth

Cary Richardson

Mark Turner

Tony Wastey SEC Staff Present:

Jason King Rose Marie ReynoLds, SEC/DAG

Rich Perry Valerie King, Executive Secretary

Misti Gower, Recording Secretary

BEGIN SUMMARY MINUTES

The meeting was caLLed to order at 10:15 am by Chairman Jim Gans who confirmed the hearing

was property noticed and that there was a quorum present. Chairman Gans aLso weLcomed Rich

Perry to the SEC. Commissioner Perry is the new Administrator for the Division of Minerals.

1) Public Comments (Discussion): Chairman Gans caLled for public comment. ALLen Biaggi,

representing the Nevada Mining Association, came forth to address the Commission. Mr. Biaggi

recognized that item 5 wouLd be puLLed from the agenda but wanted the Commission to know

that NMA believed the regulation was eLegantLy prepared by NDEP and extremeLy consistent with

statutory requirement AB346 of the 2013 Nevada Legislation. NMA would be working with NDEP

and hoped to bring this item in front of the Commission at the next SEC meeting.

2) Approval of Agenda (Action Item): Chairman Gans asked if there were any changes or

comments regarding the agenda. Executive Secretary, VaLerie King, informed the Commission that

item 5, a regulatory petition from the Bureau of Mining Regulation ft Reclamation and items 7 and

8, reguLatory petitions from the Bureau of Waste Management had been puLLed from the agenda.

Commissioner Turner moved to approve the agenda and Commissioner Porta seconded; the agenda

was approved with changes.

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Minutes of State EnvironmentaL commission ReguLatory Meeting - December 4, 2013
Chairman Gans asked Dr. CotLeen Cripps, Administrator of NDEP, if she wouLd Like to add anything

to Mr. Biaggi’s comments regarding Agenda Item 5. Dr. Cripps expLained NDEP has been working

with the LegisLative CounciL Bureau (LCB) on the Language. LCB recentLy expressed there was

question about the legisLative intent and how the drafted reguLation comported with that. NDEP’s

intent is to bring it back to the Commission.

3) Approval of the minutes for the October 9, 2013 SEC meetings (Action Item): Chairman

Gans requested comments from the Commission on the October meeting minutes. Commissioner

Porta feLt a statement he made regarding the waiver that was granted to CLark County was not

cLear. The state impLementation pLan was not affected by the waiver. ALso his Last name was

misspeLLed in severaL pLaces. Mr. Bamford, Bureau Chief for Air PoLLution ControL, presented a

handout (Attachment I) to the Commission with corrections he feLt shouLd be made to the

minutes.

Commissioner Anderson moved to approve the minutes as amended and Commissioner Turner

seconded; motion passed with Commissioner Perry abstaining.

4) Penalty Assessments for Air Quality Violations - (Action Item): Mr. Rob Bamford, Bureau Chief

for Air PoLLution, and Mr. Francisco Vega presented the vioLations to the Commission.

A. NV Energy, Reid Gardner Generating Station — NOAV No. 2452, alLeged failure to comply

with a permitted emission Limit during a compLiance source test. The Recommended penalty

amount is $11,255.00.

B. EL Sueno Resort and Casino - NOAV No. 2165, aLleged failure to apply for and obtain an Air

QuaLity Operating Permit. The Recommended penalty amount is $1,450.00.

C. GaLtar LLC - NOAV No. 2141, aLLeged failure to appLy for and obtain an Air Quality

Operating Permit. The Recommended penaLty amount is $10,500.00

NV Energy: Mr. Bamford informed the Commission that a representative from NV Energy, Starla

Lacy, had pLanned to attend the meeting but the weather prevented it. However she had sent a

Letter to the Commission. (Attachment II) Mr. Bamford explained that NV Energy had self-reported

the emission Limit during the test in accordance with the NAC. After a seLf-shutdown and

maintenance review, NV Energy retested the unit and demonstrated compLiance. Even though the

stack faiLed its test, it never exceeded the public health standard.

Motion: Commissioner King moved to accept NDEP’s recommended fine of $11,255.00 for Air

QuaLity Violation No. 2452. Commissioner Porta seconded the motion and it passed unanimousLy.

El Sueno Resort and Casino: NOAV No. 2454 was issued for failure to appLy for an Air QuaLity

Operating Permit. It was discovered by an enforcement office that over five acres of land had

been disturbed. The company did appLy for a permit but NDEP understands that the casino is no

Longer being buiLt. This is a Legacy appeaL the SEC dismissed during its Last meeting and NDEP is

required to pursue the penaLty to fuLfiLL the statutory and reguLatory requirements.

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Minutes of State EnvironmentaL Commission ReguLatory Meeting December 4, 2013
Motion: Commissioner Porta moved to approve the recommended fine of $1,450.00 for Air QuaLity

VioLation No. 2165. Commissioner Turner seconded the motion and it passed unanimously.

Galtar LLC: This is also a legacy appeal. GaLtar LLC was a mine and milL project. The company

disturbed over five acres of land without a permit. During the penaLty conference it was

discovered they had actualLy disturbed over 200 acres. NOAV No. 2141 was issued. To the best of

NDEP’s knowledge, Gattar LLC is dissolved but, again, NDEP is required to pursue the penalty.

Motion: Commissioner King made a motion to accept the penalty of $10,500.00 for Air QuaLity

Violation No. 2141, Commissioner Anderson seconded the motion and it passed unanimously.

6) R093-1 3 Standards for Water Quality: (Action Item) Kathy Sertic, Bureau Chief for Water

QuaLity PLanning, and John Heggeness presented the regulation change to the Commission. The

proposed changes to NAC 445A would remove the State’s water quaLity standards from water

bodies or portions of water bodies on Federal Indian Reservations. Mr. Heggeness gave a handout

to the Commissioners (Attachment III) and expLained that NDEP began removing the state water

quality standards from Reservation water bodies in 2008. NDEP has decided at this time to address

aLL remaining waters on reservation Lands.

Mr. Heggeness expLained that when Nevada water quality standards were established, they

incLuded waters within Federal Indian Reservations. In 1987, section 518e was added to the CLean

Water Act, which treats federally recognized Indian Tribes in a similar manner as states for

certain provisions of the Act. Nevada water quality standards are not applicable to Federal Indian

Reservations. This regulation change will bring the state regulation in alignment with the Federal

regulation.

After some discussion, Chairman Gans asked if there was any public comment on this matter.

Paul Bottari, from Wells, Nevada came forward. Mr. Bottari submitted comments to the

Commission (Attachment IV). Mr. Bottari expressed his concern for Nevada’s waters falling under

EPA’s control. EPA has authority over navigabLe waters but not all waters in Nevada are navigabLe.

Mr. Bottari requesting that the Commission never relinquish authority of the water that states

have been given authority and ownership of.

Commissioner Porta agreed with Mr. Bottari, asking the Division for cLarification. Ms. Sertic

assured the Commission that the waters in question have Federal jurisdiction, there is nexus to

navigabLe waters.

Motion: Commissioner Porta moved to adopt regulation R093-1 3. Commissioner King seconded the

motion and it passed with Commissioner Richardson voting-nay.

9) R041 -13 — Air Quality, Adoption by Reference of Certain Federal Regulations: (Action Item)

Jasmine Mehta presented both R041 -13 and R042-13 to the Commission, expLaining that these

were the same regulatory petitions presented at the October SEC Hearing. Because of some

confusion the regulations were not properLy posted in the newspaper. The regulations now meet

aLL posting requirements.

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Minutes of State EnvironmentaL Commission ReguLatory Meeting - December 4, 2013
Motion: Commissioner Richardson moved to adopt reguLation R041 -13. Commissioner Turner

seconded the motion and it passed unanimously.

10.) R042- 13 — Standards of Quality for Ambient Air, Prerequisites & Conditions for Operating

Permits; and Compliance with Applicable State Implementation Plan: (Action Item) Again, this

regulation now meets aLL posting requirements.

Motion: Commissioner Turner moved to adopt reguLation R042-1 3. Commissioner Porta seconded

the motion and it passed unanimousLy.

11) Motion to Dismiss Appeal of Air Quality Violations: (Action Item) Deputy Attorney General

BeLinda Suwe presented the appeal dismissaL to the Commission, expLaining that an appeal must

go to a hearing within one year or the SEC can dismiss the appeal. CLark & Nye County

DeveLopment Corporation filed the appeal on January 12, 2004 for NOAV 1819, which was never

brought to a hearing.

Motion: Commissioner Turner made a motion to dismiss the appeaL, Commissioner Porta seconded

the motion and it passed unanimousLy.

12) Hydraulic Fracturing Presentation: (Discussion) Commissioner Rich Perry, Nevada

Department of Minerals Administrator, provided an overview of the hydrauLic fracturing efforts in

Nevada. (Attachment V)

13) Election of Vice Chairman: (Action Item) Chairman Gans expLained that with the retiring of

ALan Coyner, the Commission needed a new vice-chairman and asked for nominations.

Commissioner Anderson nominated Commissioner Porta, Commission Perry seconded the

nomination. Commissioner Porta accepted and the nomination passed unanimously.

14) Administrator’s Briefing to the Commission: (Discussion) Dr. CoLleen Cripps, Administrator

of NDEP, started by weLcoming Commissioner Rich Perry. She thanked him for his hydrauLic

fracturing presentation and for putting it together so quickLy after starting his new position. Dr.

Cripps did not have anything to present to the Commission at this time but wanted to know if the

Commissioners had any feedback regarding the information NDEP is providing for the air

settlements. ALso if there was anything eLse they would like incLuded or changed in the hearing

packets. It is NDEP’s goaL to make the information they provide the Commission easier and more

useful. Chairman Gans said there are severaL things that the Commission is working on at this time

including the creation of an information packet. Chairman Gans encouraged the Commissioners to

Let VaLerie King know of any ideas or changes they might Like. Commissioner Perry asked if a

Location map couLd be incLude with the penaLty settLements to indicate the Location where each

vioLation happens.

Minutes of State EnvironmentaL Commission Regulatory Meeting - December 4, 2013
15) Public Comment: (Discussion) Chairman Gans asked for any pubLic comments; hearing none

he asked when the next SEC meeting wouLd be heLd. The next meeting wiLL be heLd February 12,

2014, in the Tahoe Conference Room on the 21K~ fLoor of the Bryan BuiLding.

16) Adjournment: (Discussion) Meeting was adjourned at 1pm.

Minutes of State Environmental Commission Regulatory Meeting - December 4, 2013
ATTACHMENTS

ATTACHMENT I: Corrections to minutes from Rob Bamford

ATTACHMENT II: Letter from NV Energy regarding Air Quality Violation

ATTACHMENT III: Handout for proposed revision to Nevada’s Surface Water Quality

Standards

ATTACHMENT IV: PauL Bottari, comments to the Commission

ATTACHMENT V: Hydraulic Fracturing Presentations
ATTACHMENT I:

Corrections to minutes from Rob Bamford
Minutes for October 9, 2013

NDEP Proposed Revisions

> Page 3, item 8, fourth paragraph reads: “Mr. Bamford explained that EPA views penalties as an

effective way to maintain compliance and Is not satisfied with Nevada’s penalties.”

Review of Meeting Recording:

(@57.O minutes) C&E are required components of a State Implementation Plan (SIP). C&E data is

reported to EPA. They evaluate number of inspections and penalty amounts. Posted online at SRF. Stack

test data and other criteria. EPA has oversight role regarding our Program implementation.

(@~59.O minutes) Penalty matrix developed by SEC and NDEP. Matrix was developed utilizing penalty

values typical of surrounding western states and EPA guidance. We use the penalty matrix to be

consistent and apply appropriate penalty (gravity) amount for various violations. Matrix yields values that

are (hopefully) not too low or too high and could bring challenge by EPA or others. EPA has oversight,

they do look at violations and penalty dollars.

(@“l.OtO hours) Tom Porta: Where does EPA set today in regards to our penalties? When I was in C&E,

they were always telling us that the penalties weren’t enough, they were too low, EPA would threaten to

over-file. In some cases they did over-file.

(@~1:O2:36 hours) Rob Bamford: l.ast year when Region 9 Administrator, Jared Blumenfeld met with

NDEP, he emphasized enforcement as penalty dollars and deterrence. They advised and encouraged

NDEP to do press releases for every penalty. Historically, as Tom Port referenced, EPA has challenged our

program as being ~good” because our penalty dollars are low. We argue with EPA that our emphasis Is

compliance and to be protective of health and the environment; their emphasis is dollars in the bank.

We’ve been at loggerheads with them historically. They post programs’ penalties online on the SRF

website for a bit of “public shaming.”

(@“1:04.OO hours) Tom Porta: So nothing has really changed with their emphasis on penalty dollars? Rob

Bamford: No, and we are additionally apprehensive now that Region has created its own, new C&E

branch and will be conducting its own C&E with additional oversight. That new group will be looking for

“wins” and penalties to “hang their hat on.” Dollars are considered success.

(@~1:O5:3O hours) Colleen Crlpps: Resources are tight, and EPA is looking for the biggest bang for Its

buck (for penalties), and ifIt’s a deterrent, and they can publicize big penalties, then that’s what they like

to do.

(@~‘1:O6:33 hours) Ganse: NDEP Is like a mediator between a permittee and EPA, trying to come to a

balance.
Minutes for October 9, 2013

NDEP Proposed Revisions

PROPOSE: “Mr. Bamford explained that when measuring the success of a Compliance and Enforcement

Program that EPA places a large emphasis on enforcement in the form of financial penalties used as

punishment and deterrent. In contrast, the NDEP emphasizes compliance by working with industry to

be protective of public health and the environment. As EPA chooses to measure Program success by

penalty dollars, the NDEP has had to historically, and currently, advocate that it’s Compliance and

Enforcement program is effective even though it does not impose the same high-dollar penalties that

EPA itself imposes.”

> Page 7, item 10: “PST.”

PROPOSE: “PSD”.

> Page 7, item 11: “Thefirst one Is the table.”

PROPOSE: “The first proposed regulation revision is to the Nevada Standards for ambient air located in

the table in NAC 4458.22097. The ozone and lead standards listed under the Nevada Standards need to

be alIgned with the listed current Federal Standards.”