T 805.781.5912 F 805.781.1002 W slocleanair.org 3433 Roberto Court, San Luis Obispo, CA 93401 TO : Board of Directors, Air Pollution Control District

FROM: Larry R. Allen, Air Pollution Control Officer

DATE : January 22, 2014

SUBJECT : Request for Approval to Amend Rule 220, Federal Prevention of Significant
Deterioration (PSD)

SUMMARY

The Board is being asked to consider adoption of proposed amendments to the San Luis Obispo County Air Pollution Control District Rules and Regulations. Rule 220, Federal Prevention of Significant De terioration (PSD), would be revised to address noticing requirements required by federal regulation and incorporate changes based on recent court decisions. The proposed revision does not a dd any additional requirements or regulations,

but instead will allow the District to admini ster the federal program, and provide local permitting and support to local re gulated industry in lieu of EPA.

Without the proposed ch anges, the District will not be granted delegated authority and regulated industry would be subject to EPA’s lengthy permit timelines and onerous appeals

process.

RECOMMENDATION

District staff recommends approval by resoluti on of the proposed amendments to the Rules and Regulations of the San Luis Obispo County Air Pollution Control District.

DISCUSSION

Under the federal Clean Air Act (CAA), new or modified major sources of emissions are subject to the Title I Prevention of Signification Deterioration (PSD) permit requirements for new construction in attainment areas, and the Title V permit requirements for new and existing sources in both attainment and nonattainment areas. Both programs require a stringent federal permitting process that includes extensive regulatory an alysis of the source, application of Best Available Control Technology, and detaile d tracking and reporting of emissions by the affected source. For our region , a major source is defined in the CAA as any source emitting between 100 to 250 tons or more per year of any regula ted criteria pollutant.APCD Board – Amendment to Rule 220 January 22, 2014 Page 2 of 2

T 805.781.5912 F 805.781.1002 W slocleanair.org 3433 Roberto Court, San Luis Obispo, CA 93401 The District adopted Rule 220, an EPA crafted model rule, in 2011 to seek fe deral delegation. After adoption of their recommended language, however, EPA subsequently determined that the public noticing provisions did not meet federal requirements. The prop osed changes will address those issues and to seek delegation of EPA’s permit au thority for the federal Prevention of Signification Deterioration (PSD) permit program. The propos ed amended rule is expected to streamline the permitting requirements and allow the District to use local timelines an d appeal processes for projects that are subject to federal PSD.

A notice was published and the hearing notice was sent to all interested parties. A public workshop was not held because currently no facility is affected by the regulation.

OTHER AGENCY INVOLVEMENT

The proposed findings and determin ations have been sent to the Ca lifornia Air Resources Board. To date, no public or agency co mments have been received.

FINANCIAL CONSIDERATIONS

The Rule 220 changes proposed are not expected to have any significant financial impacts.

ALTERNATIVES

Deny the Findings and Determinations

. The Board could choose not to approve the Resolution making necessary findings and determinations. In that case, the District will not be granted delegated authority and regulated industry would be subject to EPA’s lengthy permit timelines and onerous appeals process.AIR POLLUTION CONTROL DISTRICT

COUNTY OF SAN LUIS OBISPO

STAFF REPORT

AMENDED RULE 220

PREVENTION OF SIGNIF ICANT DETERIORATION

January 22, 2014 Hearing Date

BACKGROUND

The San Luis Obispo County Air Pollution Control Di strict (District) proposes to amend Rule 220, Prevention of Significant Deterioration to obtain approval from the United States Environmental Protection Agency (EPA) to manage the federal PSD program in lieu of EPA. PSD is a review process for very large new emission sources. In the last 20 years, the District has reviewed only one project that required a PSD permit: a proposed repower project at the Morro Bay Power Plant that was subsequently canceled by the project proponent.

The District adopted Rule 220, an EPA crafted model rule, in 2011 to seek fe deral delegation. After adopting their recommended langua ge, however, EPA subsequently de termined the public noticing did not meet federal requirements; the proposed changes will address those issues. The amended

rule is needed to allow the District to admini ster the federal program and thereby provide local permitting, support and processing to regulated indu stry and avoid lengthy delays that results when EPA implements the federal PSD program. Without the proposed ch anges, the District will not be delegated authority and regulated industry would be subject to EPA’s lengthy permit timelines and onerous appeals process. It took over 5 years fo r the MBPP project to obtain an EPA issued PSD permit; at that point the applicant had already abandoned the project.

The proposed amended rule is expected to stre amline the permitting requ irements and allow the District to use local timelines and appeal processe s for projects that are subject to federal PSD.

PROPOSED RULE

The amended rule is contained in Appendix A. The following summarizes the new/amended rule provisions.

Rule 220, Prevention of Sign ificant Deterioration (PSD)

Rule 220, will be amended to address noticing requirements required by federal regulation and incorporate changes based on recent court decisi ons. The proposed revision does not add any additional requirements or regula tions, but instead will allow the Di strict to administer the federal program in lieu of EPA.EMISSION REDUCTION / COST-EFFECTIVENESS

Emission Reductions

The proposed amended rule changes are administrative in nature relative to permitting actions; they are not control measures. Hence, there ar e no emission reductions expected from the proposed rule action.

Cost-Effectiveness and Incremental Cost-Effectiveness

There are no cost-effectiveness or incremental cost-e ffectiveness figures relati ve to this rulemaking task. The amended rule is not implementing a co ntrol measure or retrofit control requirements. Further, there are no emission reductions anticipa ted. Thus, the requiremen ts of California Health and Safety Code (H&SC) Section 40703 and Section 40920.6 do not apply.

ANALYSIS OF EXISTING FEDERA L AND DISTRICT REGULATIONS

H&SC Section 40727.2(a) requires districts to provid e a written analysis of existing regulations prior to adopting, amending or repealing a regulation. However, the proposed rule action is consistent with categories described in H&SC Section 40727.2( g). Hence, the requirements of H&SC Section 40727.2(a) are satisfied.

COMMENTS AND PUBLIC MEETINGS

A notice was published in the Tribune, the Draft Ru le was sent to the Air Resources Board for their

review and a notice was sent to the District’s Inte rested Parties List. At the time this report was finalized, no comments had been received.

COMPARISON OF ADJOINING AIR POLLUTION CONTROL DISTRICT RULES

The adjoining air districts have either adopted, or are in the process of adopting similar rule provisions to implement the PSD requirements.

FINDINGS As required in Section 40727 of the California Heal th and Safety Code (H&SC), the District Board must make findings of necessity, authority, clar ity, consistency, nondup lication, and reference.

A. Necessity: The rulemaking is necessary to implement new federal requirements and to ensure consistency with neighboring Air Districts.

B. Authority: Authority is given to the Distri ct to adopt rules pursua nt to H&SC Sections

40001 and 40702.

C. Clarity: The proposed rules have been found by the District to be written in clear English and to be as easily understood as possible.

D. Consistency: The District has found that th e proposed rules are consistent with existing District Rules and Regulations and with existing state and federal guidelines.

E. Non-duplication: Amended Rule 220 woul d implement a federal requirement through a local process and not duplicate it.F. Reference: By adoption of the proposed ru le, the District is implementing, and making specific by adoption, applicable provisions of H&SC Section 40001 et seq

.

CONCLUSION AND RECOMMENDATION

The proposed revisions will help re duce the procedural burden on our permit holders and align our thresholds with new federal requirements. Staf f recommends that the proposed rules be adopted

as written.

ATTACHMENTS

Attachment 1: includes the full text of Amende d Rule 220, with additions to the existing rule indicated by underline format, and de letions in strikethrough format.

REFERENCES

1. Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule , 40 CFR Parts 51, 52, 70, and 71, Federal Register, Volume 75, No. 1 06, U.S. Environmental Protection Agency, June
3, 2010.ATTACHMENT 1

UNDERLINE/STRIKEOUT REVISION FORMATSan Luis Obispo County APCD 220-1 {date of adoption}03/23/2011 

### RULE 220. FEDERAL PREVENTION OF SIGNIFICANT DETERIORATION (Adopted 3/23/11 , revised date of adoption )

A. Purpose

The federal Prevention of Significant Deteri oration (PSD) program is a construction permitting program for new major facilities and major modifications to existing major
facilities located in areas classified as attainment or in areas that are unclassifiable for any criteria air pollutant. The application, processing requirements and procedures are those contained in District Rules 202 through 214 unless otherwise superseded by federal regulation this rule . The intent of this Rule is to incorporate the federal PSD rule requirements into the District’s Rules and Regulations by incorporating the federal requirements by reference.

B. Applicability

The provisions of this rule shall apply to any source and the owner or operator of any source subject to any requirement under Title 40 of the Code of Federal Regulations (hereinafter, 40 CFR) Part 52.21 as incorporated into this rule.

C. Incorporation by Reference

Except as provided below, the provisions of Title 40 of the Code of Federal Regulations (CFR) Part 52.21 40 CFR Part 52.21 , in effect (insert date amended)August 2, 2010 are incorporated herein by reference and made part of the Rules and Regulations of the San Luis Obispo Air Pollution Control District.

1. The following subsections of 40 CFR Part 52.21 are excluded: (a)(1), (b)(55-58), (f), (g), (k)(2), (p)(6-8), (q), (s), (t), (u), (v), (w), (x), (y), (z) and (cc).

2. The following definitions found in incorporated provisions of 40 CFR Part 52.21(b) are revised as follows:

a. The definition of “potential to emit” contained in 40 CFR, Part 52.21(b)(4), is revised so that the phrase “is federally enforceable” shall read “is federally enforceable or enforceable as a practical matter.”

b. The definition of “allowable emissions” contained in 40 CFR, Part 52.21(b)(16), is revised so that:

1) the phrase “unless the source is subject to federally enforceable limits which restrict the operating rate, or hours of operation, or both” shall read, “unless the source is subject to enforceable limits which restrict the operating rate, or hours of operation, or both.”San Luis Obispo County APCD 220-2 {date of adoption}03/23/2011 

### 2) paragraph (iii) shall read as follows: “The emissions rate specified as an enforceable permit condition, including those with a future compliance date.”

3. The following terms found in 40 CFR Part 52.21(b) are revised as follows:

a. The term “administrator” means shall read as follows :

1) “ federal EPA administrator” in 40 C

. F

. R

. 52.21(b)(17), (b)(37)(i), (b)(43), (b)(48)(ii)(c), (b)(50)(i), (b)(51), (l)(2) and (p)(2); and

2) “ APCO or Control Officer” elsewhere, as defined in Rule 105,
Definitions.

b. The phrase “paragraph (q) of this section” in 40 CFR 52.21(p)(1) and (p)(7) (1)(2) shall read as follows: the public notice and comment provisions of Rule 220, Section E below

.

c. The definition of the term “Subject to regulation” as defined in 40 CFR 52.21(b)(49)(ii)(a) shall be read as: “Multiplying the mass amount of emissions (tpy), for each of the six greenhouse gases in the pollutant GHGs, by the gas’s associated global warming potential published at Table A-1 to subpart A of part 98 of this chapter--Global Warming
Potentials.”

d. The subparagraph in 40 CFR 52.21(i)(5)(i)(c) shall be revised to read as:

“PM 2.5 

### --no de minimis air quality level is provided;”.

D. Requirements:

1 . The Control Officer shall provide written notice of any permit application for a proposed major stationary source or major modification to the EPA administrator. Such notification shall include a copy of all information relevant to the permit application and shall be given within 30 days of receipt and at least 60 days prior to any public hearing on the application for a permit to construct.

2. The Control Officer shall determine whether an application is complete not later than 30 days after receipt of the application or after such longer time as both the applicant and the Control Officer may agree. If the Control Officer determines that the application is not complete, the applicant shall be notified in writing of the decision specifying the information that is required. Upon receipt of any resubmittal of the application, a new 30-day period to determine completeness shall begin. Upon determination that the application is complete, the Control Officer shall notify the applicant in writing. The date of receipt of the application shall be the date on which the reviewing authority received all required
information.San Luis Obispo County APCD 220-3 {date of adoption}03/23/2011 

### 3. An owner or operator must obtain a prevention of significant deterioration (PSD) permit pursuant to this Rule before beginning actual construction of a new major stationary source, a major modification, or a PAL major modification, as defined in 40 CFR 52.21(b).

42 . Not withstanding the provisions of any other District Rule or Regulation, the APCO/Control Officer shall require complian ce with this rule prior to issuing a federal Prevention of Significant Deterioration permit as required by Clean Air Act (CAA) Section 165.

53 . The applicant shall pay the applicable fees specified in District Rule 301 Fees and Rule 302, Schedule of Fees.

6. Greenhouse gas emissions shall not be subject to the requirements of subsections (k) or (m) of 40 CFR Part 52.21 in effect on {date of adoption}

E. Public Participation:

1. Prior to issuing a federal PSD permit pursuant to this rule and within one year after receipt of a complete appli cation, the APCO/Control Officer shall:

a. Make a preliminary determination whether construction should be approved with conditions or disapproved.

b. Make available in at least one location in San Luis Obispo County in which the proposed source would be constructed a copy of all materials the applicant submitted, a copy of the preliminary determination, a copy of the proposed permit and a copy or summary of other materials, if any, considered in making the preliminary determination.

c. Notify the public, by advertisement in a newspaper of general circulation in San Luis Obispo County, of the application, the preliminary determination, the degree of increment consumption that is expected from the source or modification, the opportunity for comment at a public hearing and of the opportunity for written public comment.

d. Send a copy of the notice of public comment to the applicant, EPA Region 9, any persons requesting such notice and any other interested parties such as: Any other State or local air pollution control agencies, the chief executives of the city and county where the source would be located; any comprehensive regional land use planning agency, and any State, Federal Land Manager, or Indian Governing body whose lands may be affected by
emissions from the source or modification.

e. Provide opportunity for a public hearing for persons to appear and submit written or oral comments on the air quality impact of the source, alternatives to it, the control technology required, and other appropriateSan Luis Obispo County APCD 220-4 {date of adoption}03/23/2011 

### considerations, if in the APCO’s/Control Officer’s judgment such a hearing is warranted.

f. Consider all written comments that were submitted within 30 days after the notice of public comment is published and all comments received at any public hearing(s) in making a final decision on the approvability of the application and make all comments available , including the District’s response to the comments, for public inspection in the same locations where the District made available preconstruction information relating to the proposed source or modification.

g. Make a final determination whether construction should be approved with conditions or disapproved.

h. Notify the applicant in writing of the final determination and make such notification available for public inspection at the same location where the District made available preconstruction information and public comments relating to the source.

# BOARD OF DIRECTORS

AIR POLLUTION CONTROL DISTRICT

COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA

22 day January , 2014

RESOLUTION NO._____________

RESOLUTION OF THE AIR POLLUTION CONTROL BOARD

AMENDING THE RULES AND REGULATIONS OF THE

SAN LUIS OBISPO COUNTY AIR POLLUTION CONTROL DISTRICT
TO ADOPT REVISIONS TO RULE 220, PREVENTION OF SIGNIFICANT DETERIORATION

The following resolution is hereby offered and read:

WHEREAS, a revision of the Air Pollution Control District's Rules and Regulations is needed to

align District Rules with new federal provisions and to allow delegation of federal permitting to the

District; and

WHEREAS, this Board finds that the Rule ha s been composed and amended to the extent

reasonably practicable, and are written in plain Eng lish wherever feasible, in order to assure that the

Rule can be easily understood by the pers ons directly affected by said Rule; and

WHEREAS, Section 40001 of the California Health and Safety code establishes authority for

the District to adopt the Rule; and

WHEREAS, the Rule, as written and amended, is consistent with existing statutes, court

decisions, and State and Federal Regulations; and

WHEREAS, the Rule, as written and amended, does not result in duplication of existing State

or Federal statutes or regulations in that the Ru le does not impose the same requirements as an

existing State or Federal Regulation, except to the extent that the Rule is necessary or proper to

execute the powers and duties granted to and imposed upon the District; and

WHEREAS, the Rule, as written and amended, is exempt from CEQA under section 15061(b)(3)

of the CEQA guidelines because it can be seen with certainty that there is no possibility that these

changes may have a significant effect on the envi ronment. The proposed changes do not establish

new requirements or require modifications to facilities; andWHEREAS, 

### the Board has on 

### this date held and conducted a 

### duly noticed Public Hearing on

said 

### amendments to 

### the Rules 

### and Regulations of 

### the San Luis Obispo County 

### Air Pollution Control



### District and has 

### determined 

### the necessity 

### for said 

### amendments.

WHEREAS, 

### the District has complied 

### with H&SC Sections 40725 

### through 40728 in 

### adopting

these regulatory changes; and

NOW, THEREFORE, BE lT RESOLVED AND ORDERED by 

### the Air Pollution Control Board of 

### the

San Luis Obispo County 

### Air Pollution Control District 

### that amendments to 

### the District Rules and

Regulations, specifically Rule 220, 

### attached hereto, and 

### incorporated by 

### reference herein as Exhibit

A, 

### are hereby 

### adopted 

### to be effective on Janua ry 22, 2014.

On 

### motion 

### of Director seconded by 

### Director

and passed and 

### adopted on 

### the following roll call vote:

Ayes:

Noes:

Absent:

Abstaining:

Chair, 

### Air Pollution Control District Board

San Luis Obispo County

Attest:

Acting Clerk, 

### Air Pollution Control District Board



### Approved as 

### to Form 

### and Legal Effect:



### Raymoff A. Biering



### District Counsel

Date:EXHIBIT A

RULE 220, PREVENTION OF SIGNIFICANT DETERIORATION

(Board Clerk has original rule text, copy not included here for brevity)