SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

(January 27, 2011) 203-1

RULE 203 PREVENTION OF SIGNIFICANT DETERIORATION Adopted 2-26-91 (Amended 1-27-11)

100 GENERAL

101 PURPOSE

102 APPLICABILITY

103 INCORPORATION BY REFERENCE 104 EXCLUSION, GENERAL 105 EXEMPTION, GREENHOUSE GAS AIR QUALITY ANALYSES

200 DEFINITIONS

201 ACTUAL EMISSIONS

202 ADMINISTRATOR

202 ALLOWABLE EMISSIONS

204 BASELINE ACTUAL EMISSIONS

205 MAJOR MODIFICATION

206 NET EMISSIONS INCREASE 207 PARAGRAPH (q)

208 POTENTIAL TO EMIT

300 STANDARDS

301 REQUIREMENTS

400 ADMINISTRATIVE REQUIREMENTS

401 PUBLIC PARTICIPATION

500 RECORDKEEPING (NOT APPLICABLE)SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

203-2 (January 27, 2011) This Page Intentionally Left BlankSACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

(January 27, 2011) 203-3 100 GENERAL

101 PURPOSE: The Prevention of Significant Deterioration (PSD) program is a construction permitting program for new major facilities and maj or modifications to existing major

facilities located in areas classified as attainmen t or in areas that are unclassifiable for any regulated NSR pollutant including greenhouse ga ses. 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 refere nce.

102 APPLICABILITY: The provisions of this rule shall apply to any so urce and the owner or operator of any source subject to any requirement u nder Title 40 Code of Federal Regulations (hereinafter, CFR) Part 52.21 as incorp orated into this rule. Whenever any source is subject to more than one rule, regulation , provision, or requirement relating to the control of any regulated NSR pollutant, in case s of conflict or duplication, the most stringent rule, regulation, provision, or requireme nt shall apply. The applicability procedures contained in 40 CFR 52.21(a)(2) are repl aced with the following language: 102.1 No stationary source or modification to which the requirements of subsections (j) through (r) of 40 CFR Part 52.21 apply shall begin actual construction without a District permit stating that the stationary source or modification would meet those requirements. 102.2 The requirements of subsections (j) through ( r) of 40 CFR Part 52.21 shall apply to any major stationary source and any major modifi cation with respect to each pollutant subject to regulation under the Act that it would emit, except as this section otherwise provides. 102.3 The requirements of subsections (j) through ( r) of 40 CFR Part 52.21 apply only to any major stationary source or major modificatio n that would be constructed in an area designated as attainment or unclassifiable under U.S. Code section 7407(d) or (e). 102.4 In determining whether a stationary source or modification is major, fugitive emissions from an emissions unit are included only if the emissions unit is part of one of the source categories listed in 40 CFR 52.21 (b)(1)(iii) or if the emission unit is located at a stationary source that belongs to one of the source categories listed in 40 CFR 52.21(b)(1)(iii). Fugitive emissio ns are not included for those emissions units located at a facility whose primary activity is not represented by one of the source categories listed in 40 CFR 52.21 (b)(1)(iii) and that are not, by themselves, part of a listed source category.

103 INCORPORATION BY REFERENCE: Except as provided in Section 104, the provisions of Title 40 of the Code of Federal Regulations (CFR ) Part 52.21, in effect on (date of adoption), are incorporated herein by reference and made part of the Rules and Regulations of the Sacramento Metropolitan Air Qual ity Management District. All

references to 40 CFR 52.21 in this Rule refer to th e CFR in effect on (date of adoption).

104 EXCLUSION, GENERAL: The following subsections of 40 CFR Part 52.21, i n effect (date of adoption), as well as all references to th ese subsections or the terms defined in these subsections, are excluded in their entirety: (a)(1), (b)(55-58), (f), (g), (i)(1)((i-v) and (ix-xi)), (i)(6-8), (p)(6-8), (q), (s), (t), (u), ( v), (w), (x), (y), (z), (aa), and (cc).

105 EXEMPTION, GREENHOUSE GAS AIR QUALITY ANALYSES: 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).

200 DEFINITIONS: Unless otherwise defined below, the terms used in this rule are defined in 40 CFR Part 52.21(b) in effect on (date of adoption):SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

203-4 (January 27, 2011) 201 ACTUAL EMISSIONS: The definition of “actual emissions” contained in 40 CFR 52.21(b)(21) is revised to read as set forth below whenever reference is made to that term or 40 CFR 52.21(b)(21):

201.1 Actual emissions means the actual rate of emissions of a pollutant f rom an emissions unit, as determined in accordance with Se ctions 201.2 through 201.4

of this rule. 201.2 In general, actual emissions as of a particul ar date shall equal the average rate, in tons per year, at which the unit actually emitte d the pollutant during a two-year period which precedes the particular date and which is representative of normal source operation. The Administrator shall allow th e use of a different time period upon a determination that it is more representative of normal source operation. Actual emissions shall be calculated using the unit ’s actual operating hours, production rates, and types of materials processed, stored, or combusted during the selected time period. 201.3 The Administrator may presume that source-spe cific allowable emissions for the unit are equivalent to the actual emissions of the unit. 201.4 For any emissions unit which has not begun no rmal operations on the particular date, actual emissions shall equal the potential to emit of the unit on that date.

202 ADMINISTRATOR: The term “administrator” means: 202.1 “Federal administrator” in 40 CFR 52.21(b)(17 ), (b)(37)(i), (b)(43), (b)(48)(ii)(c), (b)(50)(i), (b)(51), (l)(2) and (p)(2); and

202.2 “Air Pollution Control Officer” elsewhere.

203 ALLOWABLE EMISSIONS: The definition of “allowable emissions” contained in 40 CFR 52.21(b)(16) is revised to read as set forth below whenever reference is made to that term or 40 CFR 52.21(b)(16): 203.1 The phrase “unless the source is subject to f ederally enforceable limits which restrict the operating rate, or hours of operation, or both” shall read, “unless the source is subject to enforceable limits that restri ct the operating rate, or hours of operation, or both.” 203.2 Paragraph (iii) shall read as follows: “The e missions rate specified as an enforceable permit condition, including those with a future compliance date.”

204 BASELINE ACTUAL EMISSIONS: The definition of “baseline actual emissions” contained in 40 CFR 52.21(b)(48) is revised to read as set forth below whenever reference is made to that term or 40 CFR 52.21(b)(4 8):

204.1 Baseline actual emissions means the actual rate of emissions of a pollutant f rom an emissions unit, as determined in accordance with Sections 204.2 through

204.4 of this rule. 204.2 In general, baseline actual emissions as of a particular date shall equal the average rate, in tons per year, at which the unit a ctually emitted the pollutant during a 24 month period which precedes the particu lar date and which is representative of normal source operation. The Adm inistrator shall allow the use of a different time period upon a determination tha t it is more representative of normal source operation. Baseline actual emissions shall be calculated using the unit’s actual operating hours, production rates, an d types of materials processed, stored, or combusted during the selected time perio d. 204.3 For any emissions unit which has not begun no rmal operations on the particular date, baseline actual emissions shall equal the pot ential to emit of the unit on that

date.

205 MAJOR MODIFICATION: The definition of “major modification” contained in 40 CFR 52.21(b)(2) is revised to read as set forth below w henever reference is made to that term or 40 CFR 52.21(b)(2):SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

(January 27, 2011) 203-5

205.1 Major modification means any physical change in or change in the metho d of operation of a major stationary source that would r esult in a significant net emissions increase of any pollutant subject to regu lation under the Act. 205.2 Any net emissions increase that is significan t for volatile organic compounds shall be considered significant for ozone. 205.3 A physical change or change in the method of operation shall not include: a. Routine maintenance, repair and replacement; b. Use of an alternative fuel or raw material by re ason of an order under sections 2 (a) and (b) of the Energy Supply and Env ironmental Coordination Act of 1974 (or any superseding legisl ation) or by reason of a natural gas curtailment plant pursuant to the Fed eral Power Act; c. Use of an alternative fuel by reason of an order or rule under section 125 of the Act; d. Use of an alternative fuel at a steam generating unit to the extent that the fuel is generated from municipal solid waste; e. Use of an alternative fuel or raw material by a stationary source which: 1. The source was capable of accommodating before J anuary 6, 1975, unless such change would be prohibited under any federally enforceable permit condition which was es tablished after January 6, 1975 pursuant to 40 CFR 52.21 or u nder regulations approved pursuant to 40 CFR subpart I o r 40 CFR
51.166; or 2. The source is approved to use under any permit i ssued under 40 CFR 52.21 or under regulations approved pursuant to 40 CFR
51.166; f. An increase in the hours of operation or in the production rate, unless such change would be prohibited under any federally enforceable permit condition which was established after January 6, 19 75, pursuant to 40 CFR 52.21 or under regulations approved pursuant to 40 CFR subpart I

or 40 CFR 51.166. g. Any change in ownership at a stationary source. h. Fugitive emissions shall not be included in dete rmining for any of the purposes of this section whether a physical change in or change in the method of operation of a major stationary source is a major modification, unless the source belongs to one of the source cate gories listed in paragraph 40 CFR Part 52.21(b)(1)(iii).

206 NET EMISSIONS INCREASE: The definition of “net emissions increase” contai ned in 40 CFR 52.21(b)(3) is revised to read as set forth bel ow whenever reference is made to that term or 40 CFR 52.21(b)(3):

206

. 1 Net emissions increase means the amount by which the sum of the following

exceeds zero: a. Any increase in actual emissions from a particul ar physical change or change in method of operation at a stationary sourc e; and b. Any other increases and decreases in actual emis sions at the source that are contemporaneous with the particular change and are otherwise

creditable.

206.2 An increase or decrease in actual emissions i s contemporaneous with the increase from the particular change only if it occu rs between: a. The date five years before construction on the p articular change commences; and b. The date that the increase from the particular c hange occurs.

206.3 An increase or decrease in actual emissions i s creditable only if the Administrator has not relied on it in issuing a permit for the so urce under this section, which permit is in effect when the increase in actual emi ssions from the particular change occurs.SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

203-6 (January 27, 2011)

206.4 An increase or decrease in actual emissions o f sulfur dioxide, particulate matter, or nitrogen oxide, which occurs before the applicab le minor source baseline date is creditable only if it is required to be consider ed in calculating the amount of maximum allowable increases remaining available. W ith respect to particulate matter, only PM–10 emissions can be used to evaluat e the net emissions

increase for PM–10.

206.5 An increase in actual emissions is creditable only to the extent that the new level

of actual emissions exceeds the old level.

206.6 A decrease in actual emissions is creditable only to the extent that:

a. The old level of actual emissions or the old level of allowable emissions, whichever is lower, exceeds the new level of actual emissions;

b. It is federally enforceable at and after the time t hat actual construction on the particular change begins; and

c. It has approximately the same qualitative significa nce for public health

and welfare as that attributed to the increase from the particular change. 206.7 [Reserved] 206.8 An increase that results from a physical chan ge at a source occurs when the

emissions unit on which construction occurred becom es operational and begins to emit a particular pollutant. Any replacement un it that requires shakedown becomes operational only after a reasonable shakedo wn period, not to exceed 180 days.

207 PARAGRAPH (q): The phrase “paragraph (q) of this section” in 40 CFR 52.21(p)(1) shall read as follows: within ten calendar days fo llowing a preliminary decision pursuant to Section 300, Standards, of this rule, the Air Po llution Control Officer shall publish in at least one newspaper of general circulation in the D istrict a notice stating the preliminary decision of the Air Pollution Control Officer, noti ng how pertinent information can be obtained, and inviting written public comment for a 30-day period following the date of publication. The notice shall include the time and place of any hearing that may be held, including a statement of procedure to request a hea ring (unless a hearing has already been scheduled). The Air Pollution Control Officer shall give notice of any public hearing at least 30 days in advance of the hearing.

208 POTENTIAL TO EMIT: The definition of “potential to emit” contained i n 40 CFR 52.21(b)(4), is revised so that the phrase “is fede rally enforceable” shall read “is federally enforceable or enforceable as a practical matter.”

300 STANDARDS

301 REQUIREMENTS 301.1 An owner or operator must obtain a Prevention of Significant Deterioration (PSD) permit pursuant to this Rule before beginning actua l construction of a new major stationary source or a major modification as define d in 40 CFR 52.21(b). 301.2 Notwithstanding the provisions of any other D istrict Rule or Regulation, the Air Pollution Control Officer shall require compliance with this rule prior to issuing a federal Prevention of Significant Deterioration per mit as required by Clean Air Act (CAA) Section 165. 301.3 The applicant shall pay the applicable fees s pecified in Rule 301 – PERMIT

FEES – STATIONARY SOURCE.

400 ADMINISTRATIVE REQUIREMENTS

401 PUBLIC PARTICIPATION: Prior to issuing a federal PSD permit pursuant to this rule and after receipt of a complete application, the Ai r Pollution Control Officer shall: 401.1 Make a preliminary determination whether cons truction should be approved with conditions or disapproved.SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

(January 27, 2011) 203-7

401.2 Make available for public inspection at the D istrict office 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 prelimi nary determination. 401.3 Notify the public, by notice in at least one newspaper of general circulation in the District, of the application, the preliminary deter mination, the degree of increment consumption that is expected from the source or mod ification, and of the opportunity for written public comment. 401.4 Send a copy of the notice of public comment t o the applicant, EPA Region 9, any persons requesting such notice and any other intere sted 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 c omprehensive regional land use planning agency, and any State, Federal Land Ma nager, or Indian Governing body whose lands may be affected by emissions from the source or modification. 401.5 Provide opportunity for a public hearing for persons to appear and submit written or oral comments on the air quality impact of the s ource, alternatives to it, the control technology required, and other appropriate considerations, if in the Air Pollution Control Officer’s judgment such a hearing is warranted.

401.6 Consider all written comments that were submi tted within 30 days after the notice of public comment is published and all comments rec eived at any public hearing(s) in making a final decision on the approv ability of the application and make all comments available for public inspection i n the same locations where the District made available preconstruction informa tion relating to the proposed

source or modification.

401.7 Make a final determination whether constructi on should be approved with conditions or disapproved. 401.8 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 publ ic comments relating to the

source.SACRAMENTO METROPOLITAN AQMD RULES AND REGULATIONS

203-8 (January 27, 2011) This Page Intentionally Left Blank