UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


SEP 1 1 2009 

CERTIFIED MAIL 

RETURN RECEIPT REQUESTED 

70062150000045488857 

m Reply: AIR-5 

Refer To: Docket No.'s R9-09-17 

R9-09-18 

R9-09-19 

Kevin J. Hunt, President 

Ralcorp Holdings, mc. 

800 Market Street, Suite 2600 

St. Louis, MO 6310 I 

Re: 	 Cottage Bakery, mc. 

Lodi, California 

Dear Mr. Hunt: 

Enclosed for your infonnation is a copy of a Finding of Violation ("FOV") and 

two Notice of Violations ("NOVs") issued by the United States Environmental Protection 

Agency ("EP A") to Cottage Bakery, Inc. ("Cottage Bakery"), concerning the operation of 

its bakery production facility in Lodi, California ("the Facility"). Cottage Bakery is a 

business segment ofRalcorp Frozen Bakery Products, mc., a division of Ralcorp 

Holdings, mc. ("Ralcorp"), and is located within the jurisdiction of the San Joaquin 

Valley Air Pollution Control District ("District"). 

The FOV has been issued because the Facility is a major source and it failed to 

apply for and obtain a Title V operating pennit. The NOV s have been issued to address 

alleged violations of Rules 2010 ("Pennits Required"); 2201 ("New and Modified 

Stationary Source Review Rule"); and 4693 ("Bakery Ovens"). Each of these rules is in 

the District's portion of the California State Implementation Plan. The NOVs allege that 

the Facility: (i) violated Rule 2010 by failing to obtain appropriate pennits prior to 

construction and operation of emissions units; (ii) violated Rule 2201 by failing to 

comply with Best Available Control Technology and offset requirements; (iii) violated 

Rule 4693 by failing to vent bakery oven emissions to an approved emission control 

device. 

Printed on Recycled Papl!f 
If you wish to discuss the FOV and NOVs, you may request a conference with 

EPA. The conference would afford Cottage Bakery and Ra1corp an opportunity to 

present information bearing on the finding of violation, the nature of the violation, any 

efforts you have taken to achieve compliance, and the steps you propose to take to 

achieve compliance. 

Please contact Kara Christenson, Office of Regional Counsel, at (415) 972-3881, 

to request a conference. Such request should be made as soon as possible, but in any 

event no later than 10 working days after receipt of this letter. 

Sincerely, 

IfJ)M 

Deborah Jordan 

Director, Air Division 

Enclosures 

cc: 	 Mr. Seyed Sadredin, APCO, San Joaquin Valley Air Pollution Control District 

Mr. James Ryden, Chief, Enforcement Division, California Air Resources Board 

Tim Wiese, Ralcorp Holdings, Inc. 

Russ Haswell, Ra1corp Holdings, Inc. 

Steven Poplawski, Bryan Cave LLP 

Susannah Mitchell, Bryan Cave LLP 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


SEP 1 1 2009 


In Reply: AIR-5 

Refer To: Docket No.'s R9-09-17 

R9-09-18 

R9-09-19 

Mr. Seyed Sadredin 

Air Pollution Control Officer 

San Joaquin Valley Air Pollution Control District 

1990 E. Gettysburg Avenue 

Fresno, CA 93726-0244 

Re: 	 Cottage Bakery, Inc. 

LOdi' California 

/. Dear adredm:


 Enclosed for your information are a copy of a Finding of Violation ("FOV") and 

two Notice of Violations ("NOV s") issued by the United States Environmental Protection 

Agency ("EPA") to Cottage Bakery, Inc. ("Cottage Bakery"), concerning the operation of 

its bakery production facility in Lodi, California ("the Facility"). Cottage Bakery is a 

business segment of Ra1corp Frozen Bakery Products, Inc., a division of Ra1corp 

Holdings, Inc. ("Ralcorp"), and is located within the jurisdiction of the San Joaquin 

Valley Air Pollution Control District ("District"). 

The FOV has been issued because the Facility is a major source and it failed to 

apply for and obtain a Title V operating permit. The NOVs have been issued to address 

alleged violations of Rules 2010 ("Permits Required"); 2201 ("New and Modified 

Stationary Source Review Rule"); and 4693 ("Bakery Ovens"). Each of these rules is in 

the District's portion of the California State Implementation Plan. The NOV s allege that 

the Facility: (i) violated Rule 2010 by failing to obtain appropriate permits prior to 

construction and operation of emissions units; (ii) violated Rule 2201 by failing to 

comply with Best Available Control Technology and offset requirements; and (iii) 

violated Rule 4693 by failing to vent bakery oven emissions to an approved emission 

control device. 

Printed on Recycled Paper 
The FOV and NOVs inform Cottage Bakery and Ralcorp that a conference on 

these matters may be arranged by making a request to this office within 10 working days 

after receipt. Ifsuch a conference is held, you will be advised and your participation 

would be welcome. 

If you have any questions concerning the FOV and/or NOVs, please contact 

Cyntia Steiner, Air Enforcement Office, at (415) 947-4112. 

Sincerely,

. 

Deborah Jordan 

Director, Air Division 

Enclosures 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


SEP 11 2009 

In Reply: AIR-5 

Refer To: Docket No.'s R9-09-17 

R9-09-18 

R9-09-19 

Mr. James Ryden 

Chief, Compliance Division 

California Air Resources Board 

P.O. Box 2815 

Sacramento, CA 95812 

Re: 	 Cottage Bakery, Inc. 

Lodi, California 

Dear Mr. Ryden: 

Enclosed for your information are a copy of a Finding of Violation ("FOV") and 

two Notice of Violations ("NOVs") issued by the United States Environmental Protection 

Agency ("EPA") to Cottage Bakery, Inc. ("Cottage Bakery"), concerning the operation of 

its bakery production facility in Lodi, California ("the Facility"). Cottage Bakery is a 

business segment of Ra1corp Frozen Bakery Products, Inc., a division of Ra1corp 

Holdings, Inc. ("Ra1corp"), and is located within the jurisdiction of the San Joaquin 

Valley Air Pollution Control District ("District"). 

The FOV has been issued because the Facility is a major source and it failed to 

apply for and obtain a Title V operating permit. The NOVs have been issued to address 

alleged violations of Rules 2010 ("Permits Required"); 2201 ("New and Modified 

Stationary Source Review Rule"); and 4693 ("Bakery Ovens"). Each of these rules is in 

the District's portion of the California State Implementation Plan. The NOVs allege that 

the Facility: (i) violated Rule 2010 by failing to obtain appropriate permits prior to 

construction and operation of emissions units; (ii) violated Rule 2201 by failing to 

comply with Best Available Control Technology and offset requirements; and (iii) 

violated Rule 4693 by failing to vent bakery oven emissions to an approved emission 

control device. 

The FOV and NOVs inform Cottage Bakery and Ra1corp that a conference on 

these matters may be arranged by making a request to this office within 10 working days 

Printed on Recycled Paper 
If you have any questions concerning the FOV and/or NOVs, please contact 

Cyntia Steiner, Air Enforcement Office, at (415) 947-4112. 

Sincerely, 

Director, Air Division 

Enclosures 
UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION 9 


In the Matter of: 	 ) Docket No. R9-09-17 

) 

Cottage Bakery, Inc. ) Finding and Notice of Violation 

Lodi, California ) 

) 

Proceeding Under Section 113(a), ) 

~C~le~a~n~A~ir~A~ct~,~A~s~A~m~e~n~d~ed~____________~) 

This Finding and Notice of Violation ("NOV") is issued to Cottage Bakery, Inc. ("Cottage 

Bakery") for violations of the Clean Air Act ("CAA" or "Act") as amended, 42 U.S.C. §§ 7401-7671q, at 

its manufacturing facility located in Lodi (San Joaquin County), California (the "Facility"). The Facility is 

located within the jurisdiction of the San Joaquin Valley Air Pollution Control District ("SJV APCD" or 

"District").! This FOV is issued under the authority and at the discretion of the Director of the Air 

Division for EPA, Region IX.2 

GENERAL STATUTORY AND REGULATORY BACKGROUND 

Title V Operating Permit Program Requirements 

1. 	 Title V of the Act requires major stationary sources of air pollution to obtain an operating permit that 

includes emissions limitations and such other conditions as necessary to assure compliance with 

applicable requirements of the Act. See 42 U.S.c. §§ 7661a-766lf. EPA's regulations implementing 

! San Joaquin County is classified as a "severe" non-attainment area under EPA's 1997 8-hour ozone National 

Ambient Air Quality Standard ("NAAQS") and as an "extreme" non-attainment area under EPA's I-hour ozone 

NAAQS. 40 C.F.R. §81.305. See also, 69 Fed. Reg. 20550 (April 16, 2004). In addition, on August 27,2009, EPA 

proposed to grant a request by the State of California to reclassify the San Joaquin Valley area (including San 

Joaquin County) from "serious" to "extreme" with regard to EPA's 1997 8-hour ozone NAAQS. 74 Fed. Reg. 

43654 (Aug. 27, 2009). 

2 Section 113(a)(1) requires the Administrator of the EPA to notify a person in violation of a state implementation 

plan. This FOV alleges violations of Title V; therefore, it is not a statutory prerequisite to enforcement. Weare 

issuing this FOV to provide Ra1corp with notice of EPA's findings of non-compliance at the Facility. 
the Title V operating pennit program are found at 40 C.F.R. Part 70. See 57 Fed. Reg. 32250 (July 

21, 1992). 

2. 	 The District adopted Rule 2520 to implement Title V on June 15, 1995. EPA granted interim 

approval to the District's Title V program effective May 24, 1996 and granted full approval effective 

November 30,2001. 40 CFR Part 70, Appendix A; 66 Fed. Reg. 63503 (December 7,2001). 

3. 	 The District's Title V program defines a major stationary sburce as including a source with the 

potential to emit more than 50,000 pounds (25 tons) per year of volatile organic compounds 

("VOCS,,).,,3 SJVAPCD Rule 2520, §3.19 and Rule 2201, §3.25. 

4. 	 The District's Title V program requires a major source to submit a Title V pennit application within 

12 months after becoming subject to the pennit program. SJVAPCD Rule 2520, §5.1. 

5. 	 EPA's regulations, at 40 CFR §70.5(a), provide that the owner or operator ofa title V source must 

submit a timely and complete pennit application. Section 70.5(a)(1) further provides that a timely 

and complete application is one submitted within 12 months after the source becomes subject to the 

pennit program or on or before such earlier date as the pennitting authority may establish. 

6. 	 Section 502(a) of the Act provides that, after the effective date of a Title V pennit program, operation 

of a major stationary source without a Title V operating pennit is a violation of the Act. 42 U.S.C. 

§7661a(a). 

FINDINGS OF FACT 

7. 	 The Facility is a commercial bakery facility located at 1831 S. Stockton Street, Lodi, California. The 

Facility has existed at this location since at least 1997. The Facility is capable of operating 24 hours 

per day, 7 days per week, 52 weeks per year. 

8. 	 Until November 2006, the Facility was owned by the Knutson Family Trust and several charitable 

organizations. In November 2006, ownership and operation of the Facility was transferred to Ralcorp 

3 Ground-level ozone is fonned when VOCs react with nitrogen oxides (,'NOx") in the presence of sunlight. As 

precursors to ozone, VOCs are regulated pollutants. 

2 
Holdings, Inc. Currently, the Facility is owned and operated by Ralcorp Frozen Bakery Products, Inc. 

("RFBP"), a division of Ra1corp Holdings, Inc. 

9. 	 On or about August 12,2009, RFBP submitted an application for a permit to operate to the District 

("Permit Application"). 

10. 	RFBP's Permit Application stated that the Facility operates natural gas fired bakery ovens and one 

cake oven. RFBP's Permit Application also states that the ovens were installed at various times 

between 1997 and 2006. 

11. 	RFBP's Permit Application also states that the Facility has one boiler, which is rated at 4.95 MMBtu. 

12. 	RFBP's Permit Application states that the Facility makes baked breads and cakes. The bread dough 

uses yeast for sandwich bread and levain for artisan breads. VOCs are emitted when the bread is 

baked. VOC-containing flavorings are added to the cake batter and VOCs are emitted when the cake 

is baked. 

13. 	RFBP's Permit Application states that the Facility's potential to emit VOCs is 124.4 tpy. RFBP's 

Permit Application also states that the Facility emitted 31.24 tons of VOCs in 2008 from the bread 

products. 

14. 	RFBP's Permit Application states that the Facility has no permitted emission units. 

FINDINGS OF VIOLATION 


Finding of Failure to Submit a Timely Title V Permit Application and Finding of Operation of a 


Major Source without a Valid Title V Permit 


15. 	The Facility is a major source of air pollution, as that term is defined in the District's Title V program. 

See, SNAPCD Rule 2520, §3.19 and Rule 2201, §3.25. 

16. The Facility was required to have submitted a Title V permit application no later than 12 months after 

becoming subj ect to the program. 

17. 	The Facility has not submitted a Title V permit application. 

3 

18. The Facility has been operating as a major source of air pollution without a valid Title V permit. 

19. 	The Facility is in violation of section S02 of the Act, 40 C.F.R. §70.S(a), and SNAPCD Rule 2S20, 

§S.1. 

20. The Facility will continue to be in violation of section of S02 of the Act, 40 C.F.R. §70.S(a), and 

SJVAPCD Rule 2201, §S.l until it obtains a valid Title V permit or a valid limit on its potential to 

emit. 

NOTICE OF VIOLATION 

Notice is given to Cottage Bakery, Inc. that the Administrator of the United States Environmental 

Protection Agency, by authority duly delegated to the undersigned, finds that Cottage Bakery, Inc. is in 

violation of section S02 of the Act and its implementing regulations, as set forth in the Findings of 

Violation. 

ENFORCEMENT 

Section 113(a)(3) of the Act provides that when any person has violated any requirement or 

prohibition of Title V of the Act, EPA may: 

issue an order requiring compliance with such requirement or prohibition, or 

issue an administrative penalty order pursuant to section 113(d) for civil administrative 

penalties of up to $37,SOO per day of violation, or 

bring a civil action pursuant to section 113(b) for injunctive relief andlor civil penalties of 

not more than $37,SOO per day for each violation. 

Furthermore, if a person knowingly violates requirements relating to Title V, section 113(c) 

provides for criminal penalties or imprisonment, or both. 

Under section 306(a) of the Act, the regulations promulgated thereunder (40 C.F.R. Part IS), and 

Executive Order 11738, facilities to be used in federal contracts, grants, and loans must be in full 

4 

compliance with the Act and all regulations promulgated pursuant to it. Violations of the Act may result in 

the facility being declared ineligible for participation in any federal contract, grant, or loan. 

PENALTY ASSESSMENT CRITERIA 

Section 113(e)(I) of the Act states that the Administrator or the court, as appropriate, shall, in 

determining the amount of any penalty to be assessed, take into consideration (in addition to such other 

factors as justice may require) the size of the business, the economic impact of the penalty on the business, 

the violator's full compliance history and good faith efforts to comply, the duration of the violation as 

established by any credible evidence (including evidence other than the applicable test method), payment 

by the violator of penalties previously assessed for the same violation, the economic benefit of 

noncompliance, and the seriousness of the violation. 

Section 113(e)(2) of the Act allows the Administrator or the court to assess a penalty for each day 

of violation. For the purposes of determining the number of days of violation, where the EPA makes a 

prima facie showing that the conduct or events giving rise to this violation are likely to have continued or 

recurred past the date of this FOV, the days of violation shall be presumed to include the date of this FOV 

and each and every day thereafter until the violator establishes that continuous compliance has been 

achieved, except to the extent that the violator can prove by the preponderance of the evidence that there 

were intervening days during which no violation occurred or that the violation was not continuing in 

nature. 

OPPORTUNITY FOR CONFERENCE 

Cottage Bakery may, upon request, confer with EPA. The conference will enable Cottage Bakery 

to present evidence bearing on the finding of violation, the nature of the violation, and any efforts it may 

have taken or proposes to take to achieve compliance. Cottage Bakery has the right to be represented by 

counsel. A request for a conference with EPA must be made within ten (10) working days ofreceipt of 

5 

this FOV. The request for a conference or other inquiries concerning the FOV should be made in writing 

to: 

Kara Christenson 


Office of Regional Counsel (ORC-2) 


u.s. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, California 94105 

(415) 972-3881 

Director, 

DeblMn~ Air Division 

6 

UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION 9 


In the Matter of: 	 ) Docket No. R9-09-I8 

) 

Cottage Bakery, Inc. ) Finding and Notice of Violation 

Lodi, California ) 

) 

Proceeding Under Section Il3(a), ) 

~C~le~a~n~A~ir~A~c~t~,~A~s~A~m~e~n~de~d~______________) 

This Finding and Notice of Violation (''NOV'') is issued to Cottage Bakery, Inc. ("Cottage 

Bakery") for violations of the Clean Air Act ("CAA" or "Act") as amended, 42 U.S.c. §§ 740l-767lq, at 

its manufacturing facility located in Lodi (San Joaquin County), California (the "Facility"). The Facility is 

located within the jurisdiction of the San Joaquin Valley Air Pollution Control District ("SNAPCD" or 

"District"). Section Il3(a)(1) of the Act requires the EPA Administrator to notify a person in violation of 

a state implementation plan. The authority to issue NOVs has been delegated to the Director of the Air 

Division for EPA, Region IX. 

GENERAL STATUTORY AND REGULATORY BACKGROUND 

1. 	 Section 11 O(a) of the Act requires that all states adopt state implementation plans ("SIPs") that provide 

for the implementation, maintenance and enforcement ofprimary and secondary air quality standards. 

42 U.S.c. §7410(a). 

2. 	 Pursuant to Section 107(d) of the Act, 42 U.S.c. §7407(d), the Administrator has promulgated lists of 

attainment status designations for each air quality control region ("AQCR") in every state. These lists 

identify the attainment status of each AQCR for each of the criteria pollutants. The attainment status 

designations for California AQCRs are listed at 40 C.F.R. §81.305. 

3. 	 The Facility is located in San Joaquin County, which is within the jurisdiction of the San Joaquin 
Valley Air Pollution Control District ("SNAPCD" or "District"). San Joaquin County is classified as 

a "severe" non-attainment area under EPA's' 1997 8-hour ozone National Ambient Air Quality 

Standard ("NAAQS") and as "extreme" non-attainment area under EPA's I-hour ozone NAAQS. 40 

C.F.R. §81.305. See also, 69 Fed. Reg. 20550 (April 16, 2004). In addition, on August 27,2009, 

EPA proposed to grant a request by the State of California to reclassify the San Joaquin Valley area 

(including San Joaquin County) from "serious" to "extreme" with regard to EPA's 1997 8-hour ozone 

NAAQS. 74 Fed. Reg. 43654 (Aug. 27, 2009). 

4. 	 Section 182(b)(2) of the Act requires states to have SIP rules that require all major sources ofVOCs 

located in ozone non-attainment areas classified as moderate and above to implement Reasonably 

Available Control Technology ("RACT,,).l 42 U.S.c. §7511a(b)(2). 

5. 	 A person's failure to comply with any approved regulatory provision ofa SIP renders the person 

subject to enforcement under section 113 of the Act. 42 U.S.c. §7413(a)(I); 40 C.F.R. §52.23. 

SJVAPeD Rule 4693 Bakery Ovens 

6. 	 In accordance with Section 110 of the Act, EPA has approved Rule 4693 (Bakery Ovens) as adopted 

on May 16, 2002, into SJVAPCD's portion of the California SIP. 69 Fed. Reg. 22441 (April 26, 

2004). 

7. 	 Section 2.0 of Rule 4693 provides: "The requirements of this rule shall apply to bakery ovens 

operated at major source facilities, which emit VOCs during the baking of yeast-leavened products." 

8. 	 Section 3.1 of Rule 4693 defines "bakery oven" as: "[A]n enclosed compartment supplied with heat, 

typically from the combustion of natural gas, used to bake bread, buns and rolls ...." 

9. 	 Section 3.4 of Rule 4693 defines "leaven" as: "[A] rise in the dough caused ... a fermentationproducing agent such as yeast." 

1 Ground-level ozone is formed when volatile organic compounds ("VOCs") react with nitrogen oxides ("NOx") in 

the presence of sunlight. As precursors to ozone, VOCs are regulated pollutants. 

2 
10. Section 3.5 of Rule 4693 defines a "major source" as defined in Rule 2201 (New and Modified 

Stationary Source Review Rule). Section 3.25 of Rule 2201 defines a major source as one having a 

potential to emit greater than 50,000 pounds ofVOCs annually. Section 3.36 of Rule 2201 defines a 

"stationary source" as "any building, structure, facility, or installation which emits or may emit any 

affected pollutant [defined as including VOCs, per Rule 2201, section 3.4] directly or as a fugitive 

emission. " 

11. 	Section 3.2 of Rule 4693 defines an "existing Oven" as: "[A]n oven that was constructed and 

commenced operation prior to July 1, 2002." 

12. 	Section 5.0 of Rule 4693 requires that "no person shall operate ... [an] existing bakery unless the 

following standards are met: 

a) The collected emissions are vented to an approved emission collection system. 

b) The collected emissions are vented to an approved emission control device, which has a control 

efficiency of at least 95 percent ...." 

FINDINGS OF FACT 

13. 	 The Facility is a commercial bakery facility located at 1831 S. Stockton Street, Lodi, California. The 

Facility has existed at this location since at least 1997. The Facility is capable of operating 24 hours 

per day, 7 days per week, 52 weeks per year. 

14. 	Until November 2006, the Facility was owned by the Knutson Family Trust and several charitable 

organizations. In November 2006, ownership and operation of the Facility was transferred to Ralcorp 

Holdings, Inc. Currently, the Facility is owned and operated by Ralcorp Frozen Bakery Products, Inc. 

("RFBP"), a division of Ralcorp Holdings, Inc. 

15. The Facility operates "bakery ovens" as that term is defined in Rule 4693 and permitted in Condition 

10 of District permit N-1933-4-1. 

3 

16. On or about August 12,2009, RFBP submitted an application for a permit to operate to the District 

("Permit Application"). 

17. 	RFBP's Permit Application stated that the Facility operates three natural gas fired bakery ovens, one 

cake oven, and a boiler rated at 4.95 MMBtu. 

18. 	RFBP's Permit Application states that the Facility makes baked breads. The bread dough uses yeast 

for sandwich bread and levain for artisan breads. VOCs are emitted when the bread is baked. 

19. 	RFBP's Permit Application states that the Facility's potential to emit VOCs is 124.4 tpy. RFBP's 

Permit Application also states that the Facility emitted 31.24 tons ofVOCs in 2008 from the bread 

products. 

20. RFBP's Permit Application states that the Facility has no air pollution controls. 

21. EPA inspected the Facility on July 27,2009. 	EPA's inspection included a comprehensive walkthrough of the Facility, accompanied by Facility employees, for the purpose of familiarizing EPA 

enforcement personnel with the Facility's processes and equipment. 

22. EPA's inspectors were shown and observed the Facility's bakery ovens. Based on their visual 

observations, EPA's inspectors were able to determine that emissions from the Facility's "bakery 

ovens" are not vented to an approved emission control device. 

FINDING OF VIOLATION 

Finding of Failure to Comply with Rule 4693 

23. The Facility is a major source of air pollution, as that term is defined in SNAPCD Rules 2201 and 

4693 because it has the potential to emit more than the 50,000 pounds per year ofVOCs. 

24. The Facility is subject to the requirements of Rule 4693 because it is a major source operating a bakery 

oven. 

25. The Facility has been in violation of Rule 4693 since at least April 26, 2004, because it does not vent 

emissions from the bakery ovens to approved emission control devices. 

4 

26. The Facility remains and will continue to be in violation of Rule 4693 until it properly vents emissions 

from the bakery ovens to approved emission control devices. 

NOTICE OF VIOLATION 

Notice is given to Cottage Bakery, Inc. that the Administrator ofthe United States Environmental 

Protection Agency, by authority duly delegated to the undersigned, finds that Cottage Bakery, Inc. is in 

violation of section 110 ofthe Act, the California SIP, and SNAPCD Rule 4693, as set forth in the 

Finding ofViolation. 

ENFORCEMENT 

Section 113 (a)( 1) ofthe Act provides that when any person has violated any requirenient or 

prohibition of an applicable implementation plan or permit, EPA may: 

issue an order requiring compliance with the requirements or prohibition of such 

implementation plan or permit, or 

I issue an administrative penalty order pursuant to section 113( d) for civil administrative 

penalties of up to $37,500 per day of violation, or 

bring a civil action pursuant to section 113 (b) for inj unctive relief and! or civil penalties of 

not more than $37,500 per day for each violation. 

Furthermore, if a person knowingly violates any requirements of an applicable implementation 

plan more than 30 days after notification of violation, section 113(c) provides for criminal penalties or 

imprisonment, or both. 

Under section 306(a) ofthe Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and 

Executive Order 11738, facilities to be used in federal contracts, grants, and loans must be in full 

compliance with the Act and all regulations promulgated pursuant to it. Violations ofthe Act may result in 

the facility being declared ineligible for participation in any federal contract, grant, or loan. 

5 

PENALTY ASSESSMENT CRITERIA 

Section 113(e)(1) of the Act states that the Administrator or the court, as appropriate, shall, in 

determining the amount of any penalty to be assessed, take into consideration (in addition to such other 

factors as justice may require) the size of the business, the economic impact of the penalty on the business, 

the violator's full compliance history and good faith efforts to comply, the duration of the violation as 

established by any credible evidence (including evidence other than the applicable test method), payment 

by the violator of penalties previously assessed for the same violation, the economic benefit of 

noncompliance, and the seriousness of the violation. 

Section 113(e)(2) of the Act allows the Administrator or the court to assess a penalty for each day 

of violation. For the purposes of determining the number of days of violation, where the EPA makes a 

prima facie showing that the conduct or events giving rise to this violation are likely to have continued or 

recurred past the date of this NOV, the days of violation shall be presumed to include the date of this NOV 

and each and every day thereafter until the violator establishes that continuous compliance has been 

achieved, except to the extent that the violator can prove by the preponderance of the evidence that there 

were intervening days during which no violation occurred or that the violation was not continuing in 

nature. 

OPPORTUNITY FOR CONFERENCE 

Cottage Bakery may, upon request, confer with EPA. The conference will enable Cottage Bakery 

to present evidence bearing on the finding of violation, the nature of the violation, and any efforts it may 

have taken or proposes to take to achieve compliance. Cottage Bakery has the right to be represented by 

counsel. A request for a conference with EPA must be made within ten (10) working days ofreceipt of 

6 

this NOV. The request for a conference or other inquiries concerning the NOV should be made in writing 

to: 

Kara Christenson 


Office of Regional Counsel (ORC-2) 


U.S. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, California 94105 

(415) 972-3881 

Deborah /{Uw~ Jordan 

Director, Air Division 

7 

UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION 9 


In the Matter of: ) Docket No. R9-09-19 

) 

) Finding and Notice of Violation 

Cottage Bakery, Inc. ) 

Lodi, California ) 

) 

Proceeding Under Section 113(a), ) 

~C~le=a=n~A~i~r~A~c=t,~A~s~A~m~e~nd~e~d~_____________) 

This Finding and Notice of Violation ("NOV") is issued to Cottage Bakery, Inc. ("Cottage 

Bakery") for violations of the Clean Air Act ("CAA" or "Act") as amended, 42 U.S.C. §§ 7401-7671q, at 

its manufacturing facility located in Lodi (San Joaquin County), California (the "Facility"). The Facility is 

located within the jurisdiction of the San Joaquin Valley Air Pollution Control District ("SJV APCD" or 

"District"). Section 113( a)(l) of the Act requires the EPA Administrator to notify a person in violation of 

a state implementation plan. The authority to issue NOV s has been delegated to the Director of the Air 

Division for EPA, Region IX. 

GENERAL STATUTORY AND REGULATORY BACKGROUND 

1. 	 Section llO(a) of the Act requires that all states adopt state implementation plans ("SIPs") that provide 

for the implementation, maintenance and enforcement of primary and secondary air quality standards. 

42 U.S.C. §741O(a). 

2. 	 The Facility is located within the jurisdiction of the San Joaquin Valley Air Pollution Control District 

("SJV APCD" or "District"). 
3. A person's failure to comply with any approved regulatory provision of a SIP renders the person 

subject to enforcement under section 113 of the Act. 42 U.S.c. §7413(a)(1); 40 C.F.R. §52.23. 

SJV APCD Rule 2010 Permits Required 

4. 	 In accordance with section 110 of the Act, EPA has approved Rule 20lO ("Permits Required"), as 

adopted on December 17, 1992, into SJVAPCD's portion of the California SIP. 64 Fed. Reg. 39920 

(July 23, 1999). 

5. 	 Section 3.0 of Rule 20lO requires any person installing equipment that emits air contaminants to first 

obtain an Authority to Construct ("ATC") permit from the District. 

6. 	 Section 4.0 of Rule 20lO requires any person operating equipment that emits air contaminants to first 

obtain a Permit to Operate ("PTO") from the District. 

SJV APCD Rule 2201 New and Modified Stationary Source Review Rule 

7. 	 In accordance with section 110 of the Act, EPA has approved Rule 220 1 ("New and Modified 

Stationary Source Review Rule"), as adopted on December 19, 2002, into SJVAPCD's portion of the 

California SIP. 69 Fed. Reg. 27837 (May 17, 2004). 

8. 	 Section 4.0 of Rule 2201 requires "Best Available Control Technology" ("BACT"), on a pollutant-bypollutant and emissions unit-by-emissions unit basis, for "a new emissions unit with a potential to emit 

greater than 2.0 pounds per day." 

9. 	 Section 3.9 of Rule 2201 defines BACT as the most stringent emission limitation or control technique 

that has been achieved in practice or required by any SIP for the same class or category as the source. 

lO. 	 Section 4.5.3 of Rule 2201 requires offsets, on a pollutant-by-pollutant and emissions unit-byemissions unit basis, for facility modifications that increase VOC emissions by more than 20,000 

pounds per year. 

2 

FINDINGS OF FACT 


11. The Facility is a commercial bakery facility located at 1831 S. Stockton Street, Lodi, California. The 

Facility has existed at this location since at least 1997. The Facility is capable of operating 24 hours 

per day, 7 days per week, 52 weeks per year. 

12. Until November 2006, the Facility was owned by the Knutson Family Trust and several charitable 

organizations. In November 2006, ownership and operation of the Facility was transferred to Ralcorp 

Holdings, Inc. Currently, the Facility is owned and operated by Ralcorp Frozen Bakery Products, Inc. 

("RFBP"), a division of Ralcorp Holdings, Inc. 

13. Pursuant to its authority under section 114 of the Act, EPA sent a letter dated April 20, 2009 to 

Ralcorp Holdings, Inc. requesting information regarding the Facility's compliance with the Act. 

14. On or about June 24,2009, Ralcorp submitted its response to EPA's section 114 information request 

("Response to EPA's Information Request"). Ralcorp's Response to EPA's Information Request 

included a document entitled, "Cottage Bakery, Lodi, California, List of Flavorings." 

15. On or about August 12, 2009, RFBP submitted an application for a permit to operate to the District 

("Permit Application").RFBP's Permit Application stated that the Facility operates three natural gasfired baking ovens ("Baking Ovens") and natural gas-fired cake oven ("Cake Oven"). 1 

16. 	RFBP's Permit Application states that the Facility makes baked breads and cakes. The Baking Ovens 

emit VOCs as a result of the use of yeast and / or levain as leavening agents. The Cake Oven emits 

VOCs as a result of the use of flavorings that contain ethanol, and propylene glycol. 2 

17. Ralcorp's Response to EPA's Information Request and RFBP's Permit Application contain 

information relevant to the year of installation and PTE for VOCs of the ovens: 

1 The Facility also has one boiler (rated at 4.95 MMBtu) for which RFBP submitted a form entitled, 

"Supplemental Application for Pe~t-Exempt Equipment Registration for Rule 4307 Units." 

2 The ovens also emit small amounts of VOCs as the result of the combustion of natural gas. 

3 
EMISSION UNIT YEAR INSTALLED PTEVOCs 

Baking Oven #1 1997 31.00 tons per year 

Baking Oven #2 2003 46.56 tons per year 

Baking Oven #3 2006 46.56 tons per year 

Cake Oven 1997 7.73 pounds per day 

18. RFBP's Permit Application states that the Facility's potential to emit VOCs is 124.4 tpy. RFBP's 

Permit Application also states that the Facility emitted 31.24 tons of VOCs in 2008. 

19. RFBP's Permit Application states that the Facility has no permitted emission units. 

20. RFBP's Permit Application states that the Facility has no air pollution controls. 

FINDING OF VIOLATION 

Finding of Failure to Comply with Rule 2010 

21. The Facility is in violation of Sections 3.0 and 4.0 of Rule 2010 because it failed to comply with Rule 

2010's requirements to obtain ATCs and PTOs when it installed and operated equipment that emits air 

contaminants. Specifically, the Facility violated Sections 3.0 and 4.0 of Rule 2010 when it installed 

and commenced operation of the Baking Ovens in 1997,2003, and 2006 and the Cake Oven in 1997. 

22. The Facility remains and will continue to be in violation of Rule 2010 until it obtains valid permits for 

the ovens. 

Finding of Failure to Comply with Rule 2201 

23. The Facility is in violation of Section 4.0 of Rule 2201 because it failed to comply with Rule 2201' s 

BACT requirements when it installed new emissions units with the potential to emit more than 2.0 

pounds per day. Specifically, the Facility triggered Rule 2201' s BACT requirement when it installed 

each oven in 1997,2003, and 2006. 

4 

24. The Facility is in violation of Section 4.5.3 of Rule 2201 because it failed to obtain offsets when it 

installed each oven in 1997,2003, and 2006 with a post-project PTE above 20,000 pounds per year. 

25. The Facility remains and will continue to be in violation of Rule 2201 until it installs and operates 

BACT and obtains offsets and valid permits for the ovens. 

NOTICE OF VIOLATION 

Notice is given to Cottage Bakery, Inc. that the Administrator of the United States Environmental 

Protection Agency, by authority duly delegated to the undersigned, finds that Cottage Bakery, Inc. is in 

violation of section 110 of the Act, the California SIP, and SJV APCD Rules 2010 and 2201, as set forth in 

the Finding of Violation. 

ENFORCEMENT 

Section 113(a)(I) of the Act provides that when any person has violated any requirement or 

prohibition of an applicable implementation plan or permit, EPA may: 

issue an order reqll:iring compliance with the requirements or prohibition of such 

implementation plan or permit, or 

issue an administrative penalty order pursuant to section 113(d) for civil administrative 

penalties of up to $37,500 per day of violation, or 

bring a civil action pursuant to section 113(b) for injunctive relief and/or civil penalties of 

not more than $37,500 per day for each violation. 

Furthermore, if a person knowingly violates any requirements of an applicable implementation 

plan more than 30 days after notification of violation, section 113( c) provides for criminal penalties or 

imprisonment, or both. 

Under section 306(a) of the Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and 

Executive Order 11738, facilities to be used in federal contracts, grants, and loans must be in full 

compliance with the Act and all regulations promulgated pursuant to it. Violations of the Act may result in 

5 

the facility being declared ineligible for participation in any federal contract, grant, or loan. 

PENALTY ASSESSMENT CRITERIA 

Section 113( e )(1) of the Act states that the Administrator or the court, as appropriate, shall, in 

determining the amount of any penalty to be assessed, take into consideration (in addition to such other 

factors as justice may require) the size of the business, the economic impact of the penalty on the business, 

the violator's full compliance history and good faith efforts to comply, the duration of the violation as 

established by any credible evidence (including evidence other than the applicable test method), payment 

by the violator of penalties previously assessed for the same violation, the economic benefit of 

noncompliance, and the seriousness of the violation. 

Section 113( e )(2) of the Act allows the Administrator or the court to assess a penalty for each day 

of violation. For the purposes of determining the number of days of violation, where the EPA makes a 

prima facie showing thatthe conduct or events giving rise to this violation are likely to have continued or 

recurred past the date of this NOV, the days of violation shall be presumed to include the date of this NOV 

and each and every day thereafter until the violator establishes that continuous compliance has been 

achieved, except to the extent that the violator can prove by the preponderance of the evidence that there 

were intervening days during which no violation occurred or that the violation was not continuing in 

nature. 

OPPORTUNITY FOR CONFERENCE 

Cottage Bakery may, upon request, confer with EPA. The conference will enable Cottage Bakery 

to present evidence bearing on the finding of violation, the nature of the violation, and any efforts it may 

have taken or proposes to take to achieve compliance. Cottage Bakery has the right to be represented by 

counsel. A request for a conference with EPA must be made within ten (10) working days of receipt of 

6 

this NOV. The request for a conference or other inquiries concerning the NOV should be made in writing 

to: 

Kara Christenson 


Office of Regional Counsel (ORC-2) 


U.S. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, California 94105 

(415) 972-3881 

7 "