Agreement for Partial Delegation of the

Federal Prevention of Significant Deterioration (PSD) Program

Set Forth in 40 CFR 52.21

by the United States Environmental Protection Agency, Region 9

to the North Coast Unified Air Quality Management District

The undersigned, on behalf of the North Coast Unified Air Quality Management District (District) and

the United States Environmental Protection Agency (EPA), hereby agree to partial delegation of authority

to implement the Prevention of Significant Deterioration (PSD) requirements of 40 CFR 52.21 for new

major stationary sources of nitrogen oxides (NOx), and major modifications of NOx. This partial

delegation is executed pursuant to 40 CFR 52.2 1(u), Delegation of Authority.

Background Recitals

1. In accordance with Sections 165 et seq. of the Clean Air Act, EPA has adopted regulations that

implement the Prevention of Significant Deterioration (PSD) program for areas where the State

implementation plan has been disapproved for not meeting the PSD program requirements of Sections

160 through 165 of the Clean Air Act. These regulations are set forth in 40 CFR 52.21. These

regulations have been incorporated as part of the applicable California State plan for implementation

of the New Source Review program under the Clean Air Act pursuant to 40 CFR 52.270(a)(3), and

they govern a portion the implementation of the PSD program requirements within the District.

2. EPA’s PSD regulations require that certain stationary sources oihir pollutant emissions must undergo

a PSD source review and obtain a PSD permit before they may be constructed and operated, as set

forth in 40 CFR 52.21.

3. Under Subsection (u) of EPA’s PSD Regulations, 40 CFR 52.2 1(u), EPA may delegate its authority

to conduct its PSD source review under 40 CFR 52.21 to the District for sources within the District’s

geographical jurisdiction. Pursuant to such delegation, the District “stands in the shoes” of EPA for

purposes of conducting the PSD source review and issuing the PSD permit, and in doing so must

follow and implement the same substantive and procedural requirements as EPA would if it were

conducting the PSD source review and issuing the PSD permit itself.

4. The District has the authority to issue PSD permits in accordance with regulations that have been

approved into the California State Implementation Plan (SIP), except as provided in 40 CFR

52.270(b)(2). Specifically, the District’s SIP-approved PSD program does not include NOx emissions

as an ozone precursor, a required element of the PSD program. As a result, EPA promulgated a limited

federal implementation plan (FIP) within the District under 40 CFR 52.21 (see 76 FR 152 on Aug. 8,

2011 and 40 CFR 52.270(b)(2)(iv)). As described in this limited FU~ EPA retains authority to

implement the applicable requirements of the PSD permitting program in the District for those projects

that are new major stationary sources of NOx or major modifications of NOx under 40 CFR 52.21.

5. The District and EPA previously agreed to a partial delegation of authority to implement PSD

requirements on January 8, 1993 (1993 agreement). The 1993 agreement (see 58 FR 43798 on August

18, 1993) delegated to the District the authority to implement PSD program requirements for sources
North Coast Unified AQMD — Partial Delegation Agreement

New Major Stationary-Sourc~es of NOx and Major Modifications of NOx

with stack heights greater than 65 meters. This partial delegation of authority supplements, and does

not subsume, the 1993 agreement.

Scope of Partial Delegation

6. This partial delegation of authority to the District applies to the implementation of the PSD

requirements of 40 CFR 52.21 for new major stationary sources of NOx and major modifications of

NOx. It does not delegate authority to the District to issue PSD permits based on plantwide

applicability limitations (PALs).

7. District-issued permits with federal PSD provisions related to new major stationary sources of NOx

and major modifications of NOx shall be deemed to meet federal PSD permit requirements pursuant

to the provisions of this delegation agreement provided that:

a. Such permits satisfy all of the substantive requirements of the PSI program in 40 CFR 52.21,

including (without limitation) the federal BACT requirement pursuant to 40 CFR 52.21(j) and

40 CFR 52.21(b)(12), and the impact analysis requirements pursuant to 40 CFR 52.21(k)-(o);

and

b. Such permits have been issued in compliance with all of the procedural requirements of the

PSD program in 40 CFR 52.21 and 40 CFR Part 124;

Applicability

8. EPA and the District have agreed to this partial delegation of PSD authority to allow the District to

implement the PSD requirements of 40 CFR 52.21 for new major stationary sources of NOx and major

modifications of NOx.

9. EPA is responsible for the issuance of PSD permits on Indian Lands under Sections 110 and 301 of

the Clean Air Act. This agreement does not grant or delegate any authority under the Clean Air Act

on Indian Lands to the District.

10. This partial delegation of PSD authority becomes effective upon the date of signature by both parties

to this agreement.

General Delegation Conditions

11. The District shall issue PSD permits under this partial delegation agreement in accordance with the

requirements of 40 CFR 52.21 in effect as of the date the District issues the final permit, except as

provided in Conditions 7 through 9; and, to the extent that the PSD requir~ents of the District’s Rules

are consistent with the requirements of 40 ~FR 52.21, in accordance with those requirements as well.

12. The District may (but shall not be required to) issue Federal PSD permits in an integrated permit

proceeding along with permits required under California law and District regulations, and may include

both Federal PSD requirements and California and/or District requirements in a single, integrated

permit document. All Federal PSD permit conditions shall be clearly identified in any integrated

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North Coast Unified AQIVID — Partial Delegation Agreement

New Major Stationary Sources of NOx and Major Modifications of NOx

permit document issued. However, nothing in this partial delegation agreement shall be construed to

direct or to authorize the District to issue PSD permits in an integrated permit proceeding that are

inconsistent with Federal PSD requirements. Any provisions that are included in an integrated permit

document under California law or District regulations that are not consistent with or authorized by the

Federal PSD requirements shall not be considered part of the Federal PSD permit.

13. This partial delegation agreement may be amended at any time by the formal written agreement of

both the District and the EPA, including amendments to add, change, or remove terms and conditions

of this agreement.

14. EPA may review the PSD permit(s) issued by the District to ensure that the District’s implementation

of this delegation agreement is consistent with federal PSD regulations as set forth in 40 CFR Section

52.21 and 40 CFR Part 124.

15. If EPA determines that the District is not implementing or enforcing the PSD program in accordance

with the terms and conditions of this partial delegation agreement, 40 CFR 52.21, 40 CFR Part 124,

or the Clean Air Act, EPA may after consultation with the District revoke this partial delegation

agreement in whole or in part. Any such revocation shall be effective as of the date specified in a

Notice of Revocation to the District.

16. Revocation of this partial delegation agreement as specified in Condition 14 above shall be the sole

remedy available for any failure by the District to implement or enforce the PSD program in

accordance with the terms and conditions of this partial delegation agreement, 40 CFR 52.21, 40 CFR

Part 124, or the Clean Air Act. The District’s agreement to implement the Federal PSD program on

s behalf, and EPA’s agreement to delegate its authority i~or the Federal PSD program to the

District under 40 CFR 52.21(u), is not intended and shall not be construed to alter or expand the

statutory limits on the imposition of sanctions against the District under the Clean Air Act for failure

to administer and enforce federal regulatory requirements as described in Brown v. EPA, 521 F.2d 827

(9th Cir. 1975), vacated as moot, 431 U.S. 99 (1977), and Brown v. EPA, 566 F.2d 665 (9th1 Cir. 1977).

17. If the District determines that issuing a PSD permit in accordance with the terms and conditions of

this partial delegation agreement, 40 CFR 52.21, 40 CFR Part 124, and the Clean Air Act conflicts

with State or local law, or exceeds the District’s authority or resources to fully and satisfactorily carry

out such responsibilities, the District after consultation with EPA may remand administration of such

permits, or of Federal PSD delegation in its entirety, to EPA. Any such remand shall be effective as

of the date specified in a Notice of Remand to EPA.

18. The permit appeal provisions of 40 CFR Part 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 PSD permits issued by the District under this partial delegation agreement. For purposes of

implementing the federal permit appeal provisions under this partial i~Jegation, the District shall

notify the applicant and each person who submitted written comments or requested notice of the final

permit decision in accordance with 40 CFR 124.15. The notice of final permit decision shall include

(i) reference to the procedures for appealing the final permit decision under 40 CFR 124.19; and (ii) a

statement of the effective date of the final permit decision established pursuant to 40 CFR 124.15(b)

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North Coast Unified AQMD — Partial Delegation Agreement

New Major Stationary Sources of NOx and Major Modifications of NOx

and that the effective date shall be suspended if the final permit decision is appealed pursuant to 40

CFR 124.19 until such appeal is resolved by the EAB.

Communication between EPA and the District

The District and EPA will use the following communication procedures:

19. The District will forward to EPA copies of (1) all draft PSD permits prepared by the District pursuant

to 40 CFR 124.6; (2) all “Statements of Basis” prepared by the District pursuant to 40 CFR 124.7

and/or “Fact Sheets” prepared by the District pursuant to 40 CFR 124.8; and (3) all public notices the

District issues pursuant to the requirements of 40 CFR 124.10. Such copies shall be provided to EPA

at or prior to the beginning of the public comment period for each PSD preliminary determination.

20. Upon any final PSD permit issuance, the District will forward to EPA copies of the notice of final

permit issuance required by 40 CFR 124.15(a) and the responses to public comments required by

124.17(a) (if any); and, if requested by EPA, copies of all substantive comments (if any).

EPA Policies Applicable to PSD Review

21. All PSD BACT determinations are required to perform a “top-down” BACT analysis. EPA will

consider as deficient any BACT determination that does not begin with the most stringent control

options available for the source under review.

22. The District shall notify and/or consult with the appropriate Federal, State and local agencies as

required by 40 CFR 52.21 and 40 CFR Part 124. The District shall (among other requirements as

applicable):

a. Notify the appropriate Class I area Federal Land Manager(s) within 30 days of receipt of a

PSD permit application and at least 60 days prior to any public hearing if the emissions from

a proposed facility may affect any Class I area(s), as required by 40 CFR 52.21(p);

b. Notify the Fish and Wildlife Service (FWS) and EPA when a submitted PSD permit application

has been deemed complete, in order to assist EPA in carrying out its non-delegable

responsibilities to consult with FWS under Section 7 of the Endangered Species Act;

c. Notify the applicant of the potential need for consultation between EPA and FWS if an

endangered species may be affected by the project; and

d. Refrain from issuing a final PSD permit unless FWS has determined that the proposed project

will not adversely affect any endangered species.

Permits

23. The District shall follow EPA guidance on any matter involving the interpretation of sections 160-169

of the Clean Air Act or 40 CFR 52.21 relating to applicability determinations, PSD permit issuance

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North Coast Unified AQMD — Partial Delegation Agreement

New Major Stationary Sources of NOx and Major Modifications of NOx

and enforcement. EPA shall provide guidance to the District as appropriate in response to any request

by the District for guidance on such federal PSD issues.

24. The District shall at no time grant any waiver of the PSD permit requirements.

25. Federal PSD permits issued by the District must include appropriate provisions to ensure permit

enforceability. PSD permit conditions shall, at a minimum, contain reporting requirements on

initiation of construction, initial commencement of operation, and source testing (where applicable).

26. When any conditions of a PSD permit are incorporated into a Title V permit, the District shall clearly

identify PSD as the basis for those conditions.

Permit Enforcement

27. The primary responsibility for enforcement of the PSD regulations related to the subject matter of this

agreement rests with the District. The District will enforce the provisions of the PSD program,

consistent with the enforcement provisions of the Clean Air Act and Condition 28 of this agreement,

except in those cases where District rules, policies, or permit conditions are as stringent or more

stringent than the PSD requirements. In that case, the District may elect to enforce the as stringent or

more stringent District requirements.

28. Nothing in this partial delegation agreement shall prohibit EPA from enforcing the PSD provisions of

the Clean Air Act, 40 CFR 52.21, or any PSD permit issued by the District pursuant to this agreement.

29. In the event that the District is unwilling or unable to enforce a provision of this partial delegation

agreement with respect to a source subject to the PSD regulations, the District will immediately notify

the Air Division Director. Failure to notify the Air Division Director does not preclude EPA from

exercising its enforcement authority.

iF\Soi~J ~Df~J~S~ ~EPUOJAJI~I~R

•CVC~)E~~~ Co ZOIS ________________________

Date Brian Wilson

Air Pollution Control Officer

North Coast Unified Air Quality Management District

I ~ ________________

Date Elizabeth ~qams

Acting Dir’~tor, Air Division

U.S. EPA, Region IX