SACRAMENTO METROPOLITAN
AIR QUALITY MANAGEMENT DISTRICT

STAFF REPORT

Rule 202 – NEW SOURCE REVIEW
Rule 214 – FEDERAL NEW SOURCE REVIEW
Rule 215 – AGRICULTURAL PERMIT REQUIREMENTS AND

NEW AGRICULTURAL PERMIT REVIEW

August 18, 2010

Prepared by: Marc Cooley

Associate Air Quality Engineer

Reviewed by: Kevin J. Williams, Ph.D.

Program Coordinator

Aleta Kennard Program Supervisor

Approved by: Brigette Tollstrup

Division ManagerStaff Report

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EXECUTIVE SUMMARY

The District is currently designated as a nonattain ment area for both state and federal ozone, PM10 1

and PM2.5 2 standards. A strategy to control air pollution is to reduce emissions from new and modified stationary sources through a New Source Re view (NSR) program. The federal Clean Air Act and its associated regulations contain NSR requirem ents for major stationary sources and major modifications including the recent addition of PM2. 5 as a regulated pollutant. Similarly, the Califor nia Clean Air Act sets requirement to offset the impact of new sources. Under the California Health and Safety Code (HSC) and California Code of Regulation s, the District is required to establish a no net increase program for emissions of nonattainment pol lutants from all new or modified stationary sources which emit, or have the potential to emit, 10 tons or more per year.

Rule 202 was first adopted on September 20, 1976, a nd was last amended in 2005. The New Source Review (NSR) rule adopted into the State Implementa tion Plan (SIP) by the U.S. Environmental Protection Agency (EPA) is the NSR Rule 202 as adop ted November 20, 1984. Rule 215 was adopted on August 24, 2006 to govern agricultural s ources.

In addition to the changes needed to meet Clean Air Act (CAA) requirements for permitting new and
modified sources in severe ozone and PM2.5 nonattai nment areas, amendments to Rule 202 must conform to the requirements of SB288, the Protect C alifornia Air Act of 2003. This California law, discussed in more detail later in this paper, preve nts the District from adopting NSR requirements les s stringent than the “new source review rules that ex isted on December 30, 2002 3 ” and specifies that the rule for comparison as: “those new source review rules and regulations for both nonattainment and prevention of significant deterioration for new, modified, repair ed, or replaced sources that have been adopted by the district governing board on or prior to December 30, 2002, that have been submitted to the EPA by the state board for inclusi on into the SIP and are pending approval or have been approved by the EPA 4 .”

The proposed revisions to Rule 202 will contain the most stringent of state or federal laws and regulations, and apply to both major and minor sources. The revisions are intend ed to:
1. Meet severe ozone and PM2.5 nonattainment area r equirements – Meet federal CAA NSR requirements generally described in Appendix S to 40 CFR Part 51. 2. Meet the requirements of Clean Air Act Sections 110(l) and 193 5 – These sections prohibit changes to the State Implementation Plan that inter fere with attainment or progress goals or make other modifications that do not provide equ ivalent or greater emissions reductions. In general, these requirements can be m et by avoiding changes to the proposed NSR rule that are less stringent than the SIP approved NSR rule (adopted November 20, 1984.) The SIP approved Rule 202 is i ntended to be removed from the SIP and replaced with proposed Rule 214 and a later sub mittal of a new Rule 203 - Prevention of Significant Deterioration. Current Rule 202 has some provisions that are less stringent

1 Particulate matter with an aerodynamic diameter of 10 microns or less, Code of Federal Regulations, T itle 40, Part 50.6.

2 Particulate matter with an aerodynamic diameter of 2.5 microns or less, Code of Federal Regulations, Title 40, Part 50.7.

3 California Health and Safety Code § 42504(a)

4 California Health and Safety Code § 42505

5 42 USC 7410(l) and 42 USC 7515Staff Report

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than the 1984 SIP rule, therefore, the proposed rul e will include revisions that match or

are equivalent to the 1984 rule requirements. 3. Meet state regulations for transport mitigation – The transport mitigation requirements for Sacramento contained in the California Code of Regu lations. These requirements in the
current rule will be maintained. 4. Meet the requirements of SB288 – State law prohibits the NSR rule from containing certain requirements that are less stringent than t he NSR rule submitted as of December 30, 2002, that was the 1991 NSR rule. Some of the current rule provisions are less stringent than the 1991 rule, therefore, the propos ed rule will also include revisions that match or are equivalent to the 1991 rule.

As noted above, only those requirements noted in i tems 1 and 2 above are required by federal law to be submitted as a revision to the SIP. Therefore, a proposed new, separate rule, Rule 214 – FEDERAL NEW SOURCE REVIEW, will be submitted as a S IP revision that contains the requirements necessary to satisfy federal laws and regulations, and omit provisions required by more stringent state laws noted in items 3 and 4 above. Requirements necessary to meet items 3 and 4 above are proposed to be included in Rule 202. It i s our intention that Rule 214 is written such that the review of major stationary sources (including both non-major and major modifications) complying with proposed Rule 202 will also be in compliance with R ule 214. Major sources are cautioned that because they are subject to both state and federal laws, that both Rules 202 and 214 apply. However, Clean Air Act requirements related to EPA enforcement and citizen lawsuits only pertain to major source requirements in Rule 214.

Additionally as part of the rule package, Rule 213 – FEDERAL MAJOR MODIFICATIONS will be rescinded and Rule 215 will be amended. The requir ements of Rule 213 are added to the proposed language of Rule 202 and Rule 214. Rule 215 will b e amended to clarify Rule 214 applies in addition
to Rule 202.

BACKGROUND

The proposed rules provide for the review of new an d modified stationary air pollution sources and provide mechanisms, including emissions offsets and air pollution controls, by which Authorities to Construct for such sources may be granted without i nterfering with the attainment or maintenance of health-based ambient air quality standards. Rule 20 2 sets requirements for reviewing permit applications for new and modified sources for Best Available Control Technology (BACT), emission offsets, emission calculation procedures and other administrative requirements. Rule 214, Federal New Source Review, is proposed to incorporate those sections of Rule 202 that apply to major sources for inclusion into the State Implementation Plan (SIP.)

Rule 202 was first adopted on September 20, 1976 an d was amended in 1979, 1983, 1984, 1991, 1996, and last amended on February 24, 2005. The D istrict submitted Rule 202 as adopted February 26, 1991 to the EPA for approval into the SIP. The District was reclassified to severe nonattainment for ozone effective June 1, 1995. The 1991 version of Rule 202 did not meet Clean Air Act requirements for severe nonattainment areas. Conse quently EPA has not taken action on the
submitted 1991 version of Rule 202.Staff Report

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HEALTH IMPACTS

Ground level ozone is a secondary pollutant formed from photochemical reactions of NOx and volatile organic compounds (VOCs) in the presence of sunligh t. Ozone is a strong irritant that adversely affects human health and damages crops and other en vironmental resources. As documented by the U.S. Environmental Protection Agency (EPA) in the m ost recent Criteria Document for ozone (U.S. EPA 2006), both short-term and long-term exposure t o ozone can irritate and damage the human respiratory system, resulting in:

• decreased lung function;

• development and aggravation of asthma;

• increased risk of cardiovascular problems such as heart attacks and strokes;

• increased hospitalizations and emergency room visi ts; and

• premature deaths.

According to the U.S. EPA, health studies have link ed exposure to particulate matter, especially fine particles, to several significant health problems, including:

• increased respiratory symptoms, such as irritation of the airways, coughing, or difficulty breathing;

• decreased lung function;

• aggravated asthma;

• development of chronic bronchitis;

• irregular heartbeat;

• nonfatal heart attacks; and

• premature death in people with heart or lung disea se.

Exposure to PM pollution can cause coughing, wheezi ng, and decreased lung function even in otherwise healthy children and adults. EPA estimat es that thousands of elderly people die prematurely each year from exposure to fine particl es. In addition, a recent study (Dominici et. al, 2006) of the correlation between PM2.5 concentratio ns and hospital admission rates concluded that short-term exposure to PM2.5 increases the risk of hospitalization for cardiovascular and respiratory
diseases.

LEGAL MANDATES

Federal Clean Air Act requirements (general): The Clean Air Act 6 requires state implementation plans to include provisions to "...require permits for the construction and operation of new or modified major stationary sources anywhere in the nonattainment ar ea 7 ..." Sacramento County is nonattainment for federal ozone, PM10, and PM2.5 standards.

NSR Ozone Reclassification Requirements: The District’s reclassification request from “ser ious” to
“severe-15” for the 1997 8-hour ozone standard is e ffective June 4, 2010 8 . EPA established deadline

6 Including Sections 110(a)(2)C), 172(c)(5), 173, an d 182(d)(2), at 42 USC 7410(a)(2)(C), 7502(c)(5), 7 503, and 7511a(d)(2) respectively.

7 42 USC 7502(c)(5)

8 “Designations of Areas for Air Quality Planning Pur poses; California; San Joaquin Valley, South Coast AirStaff Report

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of June 4, 2011 for submittal of revisions to the S IP to meet the NSR requirements of a “severe-15” area. Proposed Rule 214 is intended to satisfy the NSR requirements for a severe-15 ozone area.

U.S. EPA Consent Decree to satisfy Clean Air Act: The District has also received notice of an EPA Consent Decree to address a lawsuit filed by WildEa rth Guardians in the United States District Court
for the Northern District of California 9 . The Consent Decree sets a timeline of May 10, 20 11, for the EPA to either approve a NSR rule that addresses bot h the 1997 NAAQS for 8-hour ozone and PM2.5, promulgate a Federal Implementation Plan (FIP) or s ome combination. The District must satisfy NSR requirements and submit to California Air Resources Board (ARB) and EPA well in advance of May 10, 2011 or EPA could either approve in part the 19 91 rule and/or promulgate NSR requirements for Sacramento County. If EPA promulgates a FIP, then EPA region 9 would become the federal NSR permitting authority for Sacramento County.

U.S. EPA Comments and Approvability Issues: The District received written U.S. EPA comments o n SIP approvability of earlier versions of Rule 202 i dentifying the following necessary changes 10 . These issues will also be addressed in the proposed rules :

• Eliminate exemptions for temporary and emergency e quipment at major sources

• Define replacement equipment

• Clarify Historic Potential Emissions In addition, the District has received verbal comme nts on the applicability of the emergency equipment exemption for multiple units at a source that otherwise would be a major stationary source.

Federal PM2.5 NSR Requirements: Sacramento was recently designated as a federal P M2.5
nonattainment area for the 2006 PM2.5 national ambi ent air quality standards 11 . EPA has issued a PM2.5 NSR Implementation Rule 12 to interpret CAA requirements as they pertain to t he 1997 and 2006 PM2.5 standards. Pursuant to CAA Section 110( a)(2)(C) 13 and EPA’s Implementation Rule 14

, PM2.5 NSR requirements apply to both major and mino r sources effective December 14, 2009. The Implementation Rule also included; offset trigger l evels, offset ratios, and defining the emissions levels that constitute "major source" and "major mo dification". The proposed rules match the offset
ratios for direct PM2.5 emissions to those of PM10. The proposed offset ratios meet EPA’s requirements of at least 1.0 to 1.0 15 . In addition, the proposed rule matches EPA requi rements that all PM2.5 and PM2.5 precursor offsets must be obtained within the Sacramento Federal Nonattainment

Basin, Coachella Valley, and Sacramento Metro 8-Hou r Ozone Nonattainment Areas; Reclassification”, Federal Register 75 (May 5, 2010) p. 24409

9 WildEarth Guardians v. Jackson No. 4:09-CV-02453-C W (N.D. CA) “Proposed Consent Decree, Clean Air Act Citizen Suit”, Federal Register 74 (Decembe r 7, 2009) p. 64076

10 U.S. EPA Comments for Rule 202 dated March 4, 1996 , October 28, 1996 and August 14, 2000.

11 “Air Quality Designations for the 2006 24-Hour Fin e Particle (PM2.5) National Ambient Air Quality Sta ndards, Final Rule”, Federal Register 74 (November 13, 2009 ) p. 58688

12 “Implementation of the New Source Review (NSR) Pro gram for Particulate Matter Less Than 2.5 Micromete rs (PM2.5), Final Rule”, Federal Register 73 (May 16, 2008) p. 28321

13 42 USC 7410(a)(2)(c)

14 Effective upon nonattainment designation, “Implemen tation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5 ), Final Rule”, Federal Register 73 (May 16, 2008) p. 28324

15 “Implementation of the New Source Review (NSR) Pro gram for Particulate Matter Less Than 2.5 Micromete rs (PM2.5), Final Rule”, Federal Register 73 (May 16, 2008) p. 28321Staff Report

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Area for PM2.5 16

.

Chapter 4.5 Protect California Air Act 2003 / SB288 Requirements: On December 21, 2002, the U.S. EPA promulgated regulations that substantially weak ened the basic federal new source review program (67 Fed. Reg. 80186-80289) (Dec. 31, 2002)) . In an effort to minimize the impact of this regulation, the state legislature passed Senate Bil l 288, the Protect California Air Act of 2003 (SB28 8), starting with HSC Section 42500. The Act is intend ed to minimize the impact of the relaxation of the federal new source review program on air quality in California.

SB288 requires that a district’s NSR program cannot be relaxed from the NSR rule that had been adopted by the district governing board on or prior to December 30, 2002, and that had been submitted to the EPA by the state board for inclusi on into the SIP 17 . ARB’s website 18 indicates that the February 26, 1991 version of Rule 202 is the Di strict’s NSR baseline rule for SB288. The requirements of SB288 19 prevent the District from amending Rule 202 to be less stringent than the
baseline rule. Amendments or revisions cannot exem pt, relax or reduce the obligations of a stationary source for any of the requirements listed below:

• Applicability determination for NSR

• Definition of modification, major modification, ro utine maintenance, or replacement

• Calculation methodology, thresholds or other proce dures of NSR

• Any definitions or requirements of the NSR regulat ions

• Any requirements to obtain NSR or other Permits to construct

• Any requirements for BACT, Air Quality Impact Anal ysis, recordkeeping or public participation

• Any requirements for regulating any air pollutant covered by the NSR rules and regulations

Of particular concern for the proposed amendments, BACT requirements cannot be changed from the requirements that existed prior but offsets can be changed so long as the overall offset requirements are not less stringent.

BACT: Proposed rule language requires BACT for any emis sion increase. The currently adopted rule requires BACT only if the emissions increase from an emissions unit meets or exceeds 10 lbs/day. In addition, Section 204.2 allows for a determination of the overall effect of a BACT determination. Thi s is used in circumstances such as control devices wh ere there is a restrictive control on one pollutant but may cause an small increase of another pollutan t. For example, a thermal oxidizer for controlling VOC may cause an increase in NOx emission. This re quires discussion in the Preliminary Decision as to the choice of BACT relating to the pollutant requiring the lowest emission rates.

The proposed rule is more stringent than the curren t rule. The proposed reduction in the thresholds i s required to comply with three separate provisions i n state law: HSC Sections 40919, 41010(b), and 42504, as discussed below.

In 1991, the District changed the BACT trigger leve ls from 150 pounds per day to 0 pounds per day due to California Clean Air Act (CCAA) requirements for stationary source permitting programs. The

16 42 USC 7503(c)

17 Section 42505 of the California Health and Safety C ode

18 California Air Resources Board, District NSR Rules as they existed on December 31, 2002, last accesse d May 10, 2010, <http://www.arb.ca.gov/nsr/sb288/rule s/rules.htm#24>

19 Section 42504 of the California Health and Safety CodeStaff Report

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1988 CCAA required district permitting programs to achieve no net increase in emissions of nonattainment pollutants or their precursors from a ll permitted new or modified stationary sources.
ARB Guidance 20 recommended requiring BACT for all new sources to minimize the likely increased demand for offsets caused by law.

In 1993, the California Clean Air Act was revised t o relax the no net increase requirement and allowed districts to set higher trigger levels for BACT (HS C Section 40919). HSC Section 40919 requires BACT when a stationary source (rather than an emission unit) has the potential t o emit 10 lbs/day or more of any nonattainment pollutant or its precurso rs excluding particulate matter.

HSC Section 41010(b) requires that the rules and re gulations adopted by the Sacramento district board pursuant to subdivision (a) shall require the use of best available control technology for new o r modified sources. Staff interprets this to mean fo r any emissions increase. This is consistent with South Coast Air Quality Management District which h as identical statutory language, HSC Section 40440(b)(1).

The 1991 version of the rule required BACT for any emissions increase therefore SB288 21 requires
BACT for all new and modified sources.

A BACT trigger for PM2.5 of 0 lbs/day is proposed t o match the proposed BACT trigger for PM10. The BACT trigger for PM2.5 matches the PM10 BACT tr igger because PM2.5 is a subset of PM10. Additionally, no further guidance has been provided to choose a different PM2.5 BACT trigger level.SB288 Analysis - Offset Changes : SB288 prohibits the District from amending or r evising NSR rules to be less stringent than the NSR rules that existed on December 30, 2002. A few very limited exemptions apply. A NSR rule may be amended or rev ised to be less stringent if several narrowly designed requirements are met, such as the rule bei ng unworkable due to engineering or other technical problems or otherwise will cause substant ial hardship to business, industry, or category of sources. In such cases, SB288 requires a narrowly tailored relief and requires the district provide equivalent reductions in emissions 22

.

Staff analyzed whether the proposed amendment to Ru le 202 was less stringent than the baseline rule as discussed below. Staff's findings are that the proposed changes to Rule 202 will not adversel y impact air quality in the District and will not res ult in the relaxation of the rule requirements that were in existence prior to December 2002.

The table below summarizes the requirements of Rule 202 that are contained in the SB288 baseline
rule 23 , current rule, and proposed rule.

20 ”Permitting Program Guidelines for New and Modifie d Sources in Nonattainment Areas”, Air Resources Bo ard Stationary Source Division, July 1990, p. 7

21 HSC Section 42504

22 Section 42504 of California Health and Safety Code

23 See discussion in Background section, Chapter 4.5 Protect California Air Act 2003 / SB288 Requirement s , for
discussion of the baseline rule for this SB 288 ana lysis.Staff Report

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Requirement SB288

Baseline Rule (1991) Current

Rule (2005) Proposed

Rule

Major Source Definition 50 tpy 25 tpy 25 tpy
25 tpy (for major) 25 tpy (for major) Offset Triggers
ROC & NOx 150 lbs/day (27.4 tpy) 15 tpy (non-major) 15 tpy (non-major)

Offset Trigger
PM10 80 lbs/day (14.6 tpy) 7,500 lbs/qtr

(15 tpy) 7,300 lbs/qtr (14.6 tpy)

1.3 (major VOC & NOx >25 tpy) 1.3 (major VOC & NOx >25 tpy) Offset ratios –
on-site reductions 1.0 24

1.0 (non-major - all other pollutants >15 tpy) 1.0 (non-major – all

other pollutants >15 tpy) 1.3 (major >25 tpy) 25 1.3 (major >25 tpy) 25 Offset ratios All
Nonattainment Pollutants –
Offsite <15 miles 1.2 1.2 (non-major > 15 tpy) 1.2 (non-major > 15 tpy)

Offset ratios ROC & NOx
– Offsite >15 miles 2.0 1.5 (major and non-major >15 tpy) 2.0 (major and non-major >15 tpy)

Offset ratio PM10 – Offsite
>15 miles 2.0 1.5 (major and non-major >15 tpy) 2.0 (major and non-major >15 tpy)

Offset ratios
ROC & NOx – Offsite > 50
miles or Outside Air Basin >2.0 26 >1.5 26 >2.0 26

Offset ratio PM10 – Offsite
> 50 miles or Outside Air
Basin >2.0 >1.5 (major and non-major >15 tpy) >2.0 (major and non-major >15 tpy)

The list below highlights key provisions, in the cu rrent rule, that are less stringent than the SB288 baseline rule. The proposed change is also discusse d below.

1. Difference – The SB288 baseline rule had daily o ffset trigger levels for all pollutants Change – The proposed rule will maintain quarterly offset trigger levels. The 1991 Rule 202 version calculated proposed emissions from an emiss ions unit for each calendar quarter and
actual emissions reductions calculated for each cal endar quarter, in pounds per day. This flexibility allows the proposed language to maintai n the offset trigger and calculation procedure in pounds per quarter.

2. Difference – Slightly lower offset trigger level of 14.6 tpy for PM10. Change – The proposed rule will slightly lower the offset trigger for PM10.

24 The offset ratios in the SB288 baseline rule were 0.1 higher than the numbers shown in this table. Th e extra 10% in the offset ratio was to accumulate funding f or the Community Bank pursuant to Rule 202, Section 413 (1991 version). This mechanism was moved to Rule 2 04 when the banking rule was adopted in 1992. Therefore, to make a direct comparison to current o ffset ratios, the Community Bank portion has been
removed.

25 42 USC 7511 a(d)(2)

26 The APCO shall analyze the impact on the air quali ty increments as such offsets in the category could be subject to higher offset ratio.Staff Report

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3. Difference – The SB288 baseline rule had higher offset ratios for ROC, NOx and PM10 where the offsets come from distances greater than 15 mil es from the source using the offsets. Change – The offset ratios are proposed to be incre ased to 2.0 to 1.0.

4. Difference – The SB288 baseline rule had higher offset ratios for offsets for ROC, NOx and PM10 where the offsets come from distances greater than 50 miles from the source (although it was slightly less stringent in that it allowed u sing the offsets from Outside the Air Basin.) Change – The offset ratios are proposed to be incre ased to 2.0 to 1.0 with the restriction and maintain the requirement that offsets come from wit hin the Sacramento Valley Air Basin
consistent with state law.

SUMMARY OF PROPOSED AMENDMENTS

Overview: The proposed amendments are:

• Rule 202 – NEW SOURCE REVIEW contains requirements to meet state and federal laws and regulations and applies to both major and minor sources.

• Proposed new Rule 214 – FEDERAL NEW SOURCE REVIEW contains the requirements needed to satisfy federal law. To assist the reader we show the language as compared to the language in proposed Rule 202 – New Source Review. Only Rule 214 will be submitted to EPA for inclusion in the State Implementation Plan 27 . Major sources are subject to both proposed Rules 202 and 214. Clean Air Act requirem ents related to EPA enforcement 28 and
citizen lawsuits 29 only pertain to the SIP approved version. Rule 20 2 will not be submitted for SIP approval.

• Rule 215 – AGRICULTURAL PERMIT REQUIREMENTS AND NE W AGRICULTURAL PERMIT REVIEW contains requirements for non-major a gricultural sources. Proposed amendments to Rule 215 specify that both Rule 214 a nd Rule 202 apply to major agricultural

sources.

• Limited the Emergency Equipment exemption to apply only if the equipment is not a major source or major modification in Rule 202 and 214. (110(l)/193 SIP issue, included in both Rule 202 and 214)

• Temporary Source exemption is limited to emissions units with daily emissions increases that do not exceed the specified levels in the ’91 Rule (SB288 issue, the emission increase provision is only included in Rule 202).

• Added new exemption for agricultural sources that are not major sources or major modifications. (HSC Section 42301.16, only included in Rule 202)

• Limited the Replacement Equipment exemption applic ability to an identical emissions unit(s) or functionally equivalent, if the functionally equ ivalent unit not a major source or major modification. (SB288 issue, included in both Rule 2 02 and 214)

• Added alternative siting requirements previously i n Rule 213. (Clarity issue, included in both Rule 202 and 214)

• BACT required for all emission increases. (state l aw and 110(l)/193 SIP issue included in both Rule 202 and 214)

27 Replacing the approved version of Rule 202 adopted Nov. 20, 1984 and approved by EPA into the SIP June 19, 1985 Federal Register, Volume 50, page 254 17.

28 42 USC 7413

29 42 USC 7604Staff Report

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• Lowered offset trigger level for PM10 to 14.6 tons per year consistent with ’91 Rule. (SB288 issue, only included in Rule 202, Rule 214 establis hes the offset trigger level at 15 tpy
because we area federal nonattainment area for PM2. 5)

• Increased emission offset ratios consistent with t he ’91 Rule. (SB288 issue and 110(l)/193 SIP issue, included in both Rule 202 and 214)

• Added PM2.5 stationary source NSR Clean Air Act re quirements. (CAA requirement designated nonattainment for 2006 PM2.5 NAAQS, incl uded in both Rule 202 and 214)

• Required emission offset for PM2.5 and PM2.5 precu rsors to be obtained within the Sacramento Federal Nonattainment Area for PM2.5. ( CAA requirement, included in both Rule 202 and 214)

• Added 40 CFR Part 51.165 requirements to the defin itions of Historic Actual Emissions and Historic Potential Emissions. (federal requirement , included in both Rule 202 and 214)

COST IMPACTS

Section 40703 of the California Health and Safety C ode requires that the District consider and make public its findings relating to the cost effectiven ess of implementing an emissions control measure.

Impact on Businesses in Sacramento: Proposed amendments to Rules 202 and 214 are requir ed to meet state and federal requirements respectively . The primary changes that potentially impact businesses include; increased offsets, and addition al BACT controls. Increase offsets arise from the following two changes: 1) Sources that are require d to provide offsets, must provide a larger amount
because the offset ratios are increased if the offs ets are obtained from sources located further than 15 miles from the new or expanding source, and 2) m ore sources may be required to provide offsets because the PM10 offset trigger is lowered from 15 tons per year (tpy or 7500 pounds/quarter) to 14.6 tpy (7,300 pounds/quarter). The most recent offset costs are noted in the Table below.

Pollutant Sacramento and

Surrounding Areas for

2007 30 ($/ton) Community Bank 31 ($/ton)

VOC $10,000 – $75,000 $16,440 – $27,906 NOx $10,000 – $16,000 $31,920 PM10 $20,000 $31,416 – $33,685 SOx $500 $5,000 CO $1 $2,500 – $20,000

Some sources that exceed the revised offset trigger s may instead choose to reduce their allowed emissions levels since most sources operate well be low permitted levels. The amount of offsets required also may be limited by the imposition of t he second modified requirement for BACT on all new sources and any emission increase. The BACT re quirement may increase the cost for new or

30 California Air Resources Board, “Emission Reductio n Offsets Transaction Cost Summary Report for 2007”, December 2008

31 SMAQMD, “ Annual Review of Emission Reduction Credit Loan Ren ewal Administrative Fee and Emission Reduction Credit Loan Rate”, March 24, 2005Staff Report

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modified equipment that would have been exempt from BACT under the current rule if that equipment does not meet BACT. The actual requirements for BAC T are determined on a case-by-case basis considering technical feasibility and control level s achieved-in-practice by similar sources. In so me cases, the BACT requirements are the same controls required by other District rules, resulting in no
additional costs. Even when BACT controls are not already required, the BACT requires emissions levels or controls that have been achieved in pract ice, therefore, the actual costs are limited by wha t has been economically feasible for other businesses . In addition, the cost of the BACT is explicitly capped for non-major sources. The current cost cap s are noted in the table below. Staff has a BACT manual that identifies what equipment is generally considered BACT for common sources such as boilers and internal combustion engines. Staff is expanding the manual to include additional sources and equipment.

Pollutant Maximum Cost ($/ton) VOC 17,500* NOx 24,500 PM10 11,400 SOx 18,300 CO TBD if BACT triggered * Coating operations that have reduced VOC emission s by:

• 35 to 80% through the use of low-VOC coatings (low er than specified by the applicable rule): $13,750/ton for VOC

• More than 80%: $10,000/ton for VOC

The actual impact on businesses will depend on 1) t he number of business that will modify their operations in the future, 2) the incremental costs of any additional controls, 3) the increases in permitted emissions levels associated with the modi fications, and 4) the location of the offsets. Therefore, staff cannot accurately predict the tota l costs.

Cost to District: Staff estimates an additional 0.36 FTE are needed to implement the revised BACT requirement. Staff does not anticipate a need for staff resources for changes to the offset requirements.

EMISSIONS IMPACT

Overall, the proposed revisions that require some s ources to use additional emission controls and/or find emission mitigation (offsets) will achieve emi ssion reductions of pollutants that exceed state an d federal health standards. However, as discussed in the Cost Impacts - Impacts on Business above, the actual impacts, and associated emissions reduct ions, depend on the four factors noted and, therefore, staff cannot estimate the quantity of em ission reduction benefits anticipated from the proposed rule amendments.Staff Report

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SOCIOECONOMIC IMPACT ANALYSIS

CHSC Section 40728.5 requires a district to perform an assessment of the socioeconomic impacts before adopting, amending, or repealing a rule that will significantly affect air quality or emission limitations. The District Board is required to act ively consider the socioeconomic impacts of the proposal and make a good faith effort to minimize a dverse socioeconomic impacts.

CHSC Section 40728.5 requires discussion of: 1. The type of industry or business, including smal l business, affected by the proposed rule or rule
amendments. 2. The impact of the proposed rule or rule amendmen ts on employment and the economy of the region. 3. The range of probable costs, including costs to industry or business, including small business. 4. The availability and cost-effectiveness of alter natives to the proposed rule or rule amendments. 5. The emission reduction potential of the rule or regulation. 6. The necessity of adopting, amending, or repealin g the rule or regulation to attain state and federa l
ambient air standards.

Type of industry or business, including small busin ess, affected by the proposed rule: Rule 202 applies to any stationary source that installs or m odifies emissions units. Rule 214 applies to any major stationary source that installs or modifies e missions units. The sources could include chemical production plants, food processors, manufacturing p lants, coating facilities, public schools using equipment such as large natural gas space or water heaters, hospitals, and office buildings.

Impact on employment and economy in the District of the proposed rule: The amendments to the proposed rules may impose additional offset costs f or sources with emissions greater than 14.6 tons per year of PM10 or greater than 15 tons per year o f PM2.5 that modify their operations or for sources
that obtain offsets from sources located further th an 15 miles from the new or expanding source. BACT is proposed for all new sources and any emissi on increase regardless of emissions of the device. The lower BACT trigger level reduces the n eed for sources to obtain offsets. Many of these
sources will choose to take emissions limitation ra ther than provide emissions offsets. Staff does no t know how many facilities will take a permit limit b elow the offset trigger levels and how many will require offset credits. Staff does not anticipate a significant impact on the employment and economy
in Sacramento.

Range of probable costs, including costs to industr y or business, including small business of the proposed rule: See Cost Impacts discussion above.

Availability and cost effectiveness of alternatives to the proposed rule: The primary purpose of these rule amendments are to retain local air quality per mitting authority by revising the SIP before the
consent decree deadline in WildEarth Guardians v. Jackson . The proposed amendments also satisfy Clean Air Act requirements associated with our recl assification to ‘severe’ ozone nonattainment area and redesignation to nonattainment for the federal PM2.5 air quality standards. In proposing the rules

, Staff is threading the needles of state and federal laws and has not identified any alternatives that meet these purposes. Staff does not propose to only make revisions necessary to satisfy only federal laws and requirements and not the more stringent state laws, because SB288 prohi bits an air quality management district from amending or revising their new source review rule to be less stringent than the rule that existed on December 30, 2002. If Cal ifornia Air Resources Board finds, after a publicStaff Report

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hearing, that a district’s NSR rules are not equiva lent to or more stringent than those that existed o n December 30, 2002, CARB shall promptly adopt for th at district the rules or regulations that may be necessary to establish equivalency.

That leaves the only alternative is to not amend th e rules. A likely result of not amending the rules is that, on or about May 11, 2011 EPA would impose a f ederal implementation plan (FIP) imposing the federal requirements and the EPA Region 9 office in San Francisco would issue permits to affected new and modified sources. In addition, this would trigger two sanction clocks that would be turned of f when the EPA approves a satisfactory new source rev iew rule. The first sanction occurs 18 months
after EPA's FIP and establishes an emission offset sanction. Under the emission offset sanction, each ton of emissions created by a new stationary s ource of pollution is offset by a two ton reduction in existing stationary sources. The second sanctio n applied 24 months after EPA's FIP and imposes a highway fund sanction. Under the highway fund sa nction

, Sacramento County would lose funding for transportation projects if the funds have not b een obligated by the Federal Highway Administration by the date the highway sanctions are imposed. (P rojects that have already received approval to proceed and had funds obligated may proceed.)

One alternative is for EPA to approve in part the 1 991 rule and promulgate a FIP for the remaining NSR requirements. That would reduce the number of sources for which we would no longer have permitting authority and the two sanction clocks wo uld be still be triggered. A FIP would be needed for the parts of the 1991 rule that do not meet fed eral requirements. Those parts pertain to; 1) the noticing exemption, 2) the rule compliance exemptio n, 3) same source offset ratio must be 1.3:1, and 4) lower certain offset trigger levels. EPA could strike the two exemptions. Without the noticing exemption, all permit applications subject to Rule 202 would require a public notice and the associated fees and delays for that notice. Strikin g the rule compliance exemption could require all
modifications that increase emissions above the off set trigger levels, not just major modifications, t o offset their increased emissions. In addition, if EPA approved the 1991 rule daily emission limits could be required on all permits, the daily offset trigger would apply to all sources (rather than jus t peaking power plants), and the exemption from offse ts for replacement equipment exemption would apply only to identical (except serial number) equi pment at non-major sources. In summary, if EPA was to approve in part the 1991 version of Rule 202 , not only would most of Rule 214 requirements apply, but several additional burdens that would no t be required by federal regulations, and not included in the proposed Rule 214 or Rule 202 amend ments, could be required .

Emission reduction potential of the proposed amendm ents: The proposed amendments will result in an overall benefit to air quality in the District. See the discussion of Emissions Impacts, above.

Necessity of adopting the amendments: Staff proposed amendments in order to comply with federal regulations, Clean Air Act requirements and state l aw.

ENVIRONMENTAL REVIEW AND COMPLIANCE

Staff finds that the proposed rules are exempt from the California Environmental Quality Act as an action by a regulatory agency for protection of the environment (Class 8 Categorical Exemption, Section 15308 State CEQA Guidelines) and because it can be seen with certainty that there is no possibility that the activity in question may have a significant adverse effect on the environment (Section 15061(b)(3), State CEQA Guidelines).Staff Report

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California Public Resources Code (Section 21159) re quires an environmental analysis of the reasonably foreseeable methods of compliance. Staf f compared the impact of the amendments of the rules with the existing rules. The proposed ru les require additional sources to implement BACT level controls, set lower offset trigger levels, an d increase offset ratios. The analysis concludes t he
amendments to Rule 202 and Rule 214 will result in an air quality emission benefits. Rule 215 requires compliance with Rule 214 for major agricul tural sources. As noted previously in this report, the actual offsets impacts from additional control requirements cannot be quantified or identified. Ne w and modified sources require local agency approvals , including District permits, and compliance with CEQA for any associated significant environmental i mpacts, therefore Staff has concluded that no environmental impacts will be caused by compliance with the proposed rules.

PUBLIC COMMENTS

Staff held a public workshop to discuss the propose d amendments on August 10, 2010. A public notice was mailed to interested parties, including the affected sources, and was posted on the Distric t website. The draft rules and staff report were ava ilable for public review at that time.

Staff received comments and questions at the worksh op. All comments and responses re included in Appendix C. In response to public comments, Staff has aligned the PM2.5 emission offset ratios (and ammonia if needed) to the PM10 emission offset rati os, adjusted the PM2.5 offset trigger to 15 tpy matching Placer County and made a few minor grammat ical changes. Although the increase in triggers will subject fewer sources to offset requi rements, for sources that trigger offsets there wil l be
an increase in the amount of direct PM2.5 offsets s urrendered depending on the distance of the generated emission offsets.

FINDINGS

The California Health and Safety Code (HSC), Divisi on 26, Air Resources, requires local districts to comply with a rule adoption protocol as set forth i n Section 40727 of the Code. This section has been revised through legislative mandate to contain six findings that the District must make when developing, amending, or repealing a rule. These fi ndings, effective January 1, 1992, and their
definitions are listed in the table below.

Rule 202 – Required Findings

Finding Finding Determination

Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal th e rule. The District is authorized to adopt and amend Rule 202 by California Health and Safety Code (HSC) Sections 40 001, 40702, 41010, and 42300. [HSC Section 40727(b)(2)]

.

Necessity: The District must find that the rulemaking demonstrates a need exists for the rule, or for its amendment or repeal. It is necessary to adopt the proposed amendments to Rule 202 to comply with the Federal Clean Air Act (42 US C 7410(a)(2)(C), 7410(l), 7515 7502(c)(5), 7503, and 7511a(d)(2)), 40 Code of Federal Regulations Part 5 1, the Consent Decree, and no net increase program requirements of Health and Safety Code 40919, 41010 (b),Staff Report

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Finding Finding Determination

and 42504. [HSC Section 40727(b)(1)]. Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. Staff has reviewed the proposed rule and determined that it can be understood by the affected parties. In a ddition, the record contains no evidence that people directl y affected by the rule cannot understand the rule. [ HSC Section 40727(b)(3)]. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statute s, court decisions, or state or federal regulations. The proposed rule does not conflict with, and is no t contradictory to, existing statutes, court decision s, or state or federal regulations. [HSC Section 40727(b)(4)].

Non-Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing state or federal regulation; or (2) that the duplicative requirements are necessary or prope r to execute the powers and duties granted to, and imposed upon the District. The proposed rule duplicates federal regulations fo r permitting programs (40 CFR Part 51.165). The duplicative requirements are necessary in order to execute the powers and duties imposed upon the District bec ause the Federal Clean Air Act (42 USC 7410(a)(2)(c)) re quires
New Source Review to be included in the State Implementation Plan. This rule contains those prov isions and other requirements necessary to comply with sta te law, specified in HSC Section 39610(b). [HSC Secti on 40727(b)(5)].

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopting, amending or repealing the rule. In adopting the proposed rule, the District is impl ementing the requirements of HSC Sections 40919, 41010(b) an d 42504, and Federal Clean Air Act (42 USC 7410(a)(2) (C), 7502(c)(5), 7503, and 7511a(d)(2)). [HSC Section 40727(b)(6)] Additional Informational Requirements: In complying with HSC Section 40727.2, the District must identify all federal requirements and District rules that apply to the same equipment or source type as the proposed rule or amendments. Appendix B includes a comparison with federal requirements. [HSC Section 40727.2].

Rule 214 – Required Findings

Finding Finding Determination

Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal th e rule. The District is authorized to adopt and amend Rule 214 by California Health and Safety Code (HSC) Sections 40 001, 40702, 41010, and 42300. [HSC Section 40727(b)(2)]

.

Necessity: The District must find that the rulemaking demonstrates a need exists for the rule, or for its amendment or repeal. It is necessary to adopt the proposed amendments to Rule 202 to comply with the Federal Clean Air Act (42 US C 7410(a)(2)(C), 7410(l), 7515 7502(c)(5), 7503, and 7511a(d)(2)), 40 Code of Federal Regulations Part 5 1, the Consent Decree. [HSC Section 40727(b)(1)]. Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. Staff has reviewed the proposed rule and determined that it can be understood by the affected parties. In a ddition, the record contains no evidence that people directl y affected by the rule cannot understand the rule. [ HSC Section 40727(b)(3)]. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statute s, court decisions, or state or federal regulations. The proposed rule does not conflict with, and is no t contradictory to, existing statutes, court decision s, or state or federal regulations. [HSC Section 40727(b)(4)].

Non-Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing state or federal regulation; or (2) that The proposed rule duplicates federal regulations fo r permitting programs (40 CFR Part 51.165). The duplicative requirements are necessary in order to executeStaff Report

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Finding Finding Determination

the duplicative requirements are necessary or prope r to execute the powers and duties granted to, and imposed upon the District. the powers and duties imposed upon the District bec ause the Federal Clean Air Act (42 USC 7410(a)(2)(c)) re quires
New Source Review to be included in the State Implementation Plan. This rule contains those prov isions and other requirements necessary to comply with sta te law, specified in HSC Section 39610(b). [HSC Secti on 40727(b)(5)].

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopting, amending or repealing the rule. In adopting the proposed rule, the District is impl ementing the requirements of Federal Clean Air Act (42 USC 7410(a)(2)(C), 7502(c)(5), 7503, and 7511a(d)(2)). [HSC Section 40727(b)(6)] Additional Informational Requirements: In complying with HSC Section 40727.2, the District must identify all federal requirements and District rules that apply to the same equipment or source type as the proposed rule or amendments. Appendix B includes a comparison with federal requirements. [HSC Section 40727.2].Staff Report

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Rule 215 – Required Findings

Finding Finding Determination

Authority: The District must find that a provision of law or of a state or federal regulation permits or requ ires the District to adopt, amend, or repeal the rule. The District is authorized to adopt rules and regul ations by Health & Safety Code Sections 40001, 40702, 41010, 40919, 42301.16, and 42300 et. seq. (Health & Safet y Code Section 40727(b)(2)) Necessity: The District must find that the rulemaking demonstrates a need exists for the rule, or for its amendment or repeal. It is necessary for the District to amend the exist ing rule to comply with Health and Safety Code Section 42301.16

. (Health & Safety Code Section 40727(b)(1)) Clarity: The District must find that the rule is written or displayed so that its meaning can be easily underst ood by the persons directly affected by it. The District has reviewed the rule and determined t hat it can be easily understood by the affected industry. In addition, the record contains no evidence that the persons directly affected by the rule cannot understand the rule. (Health & Safety Code Section 40727(b)(3)) Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statute s, court decisions, or state or federal regulations. The proposed rule amendments do not conflict with a nd are not contradictory to existing statutes, court d ecisions, or state or federal regulations. (Health & Safety Code Section 40727(b)(4)) Non-Duplication: The District must find that either: 1) The rule does not impose the same requirements as a n existing site or federal regulation; or 2) that the duplicative requirements are necessary or proper to execute the powers and duties granted to, and imposed upon the District. The proposed rule duplicates federal regulations fo r permitting programs (40 CFR Part 51.165). The duplicative requirements are necessary in order to execute the powers and duties imposed upon the District bec ause the Federal Clean Air Act (42 USC 7410(a)(2)(c)) re quires
New Source Review to be included in the State Implementation Plan. This rule contains those prov isions and other requirements necessary to comply with sta te law, specified in HSC Section 39610(b). [HSC Secti on 40727(b)(5)].

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopti ng, amending or repealing the rule. The adoption implements state law requirements purs uant to Health and Safety Code Section 42301.16. (Health & Safety Code Section 40727(b)(6))

Additional Informational Requirements (Health & Safety Code Section 40727): In complying with HSC Section 40727, the District must identify all feder al requirements and District rules that apply to the s ame equipment or source type as the proposed rule or
amendments. There are no federal requirements that apply to the se sources because this permitting program does not ap ply to new major stationary sources or major modifications

. (Health & Safety Code Section 40727.2)

REFERENCES

California Air Resources Board, “New Source Review Permitting Programs.” http://www.arb.ca.gov/nsr/nsr.htm

California Air Resources Board, New Source Review a nd Senate Bill 288 Guidance, April, 2006. (ARB, 2006).

California Air Resources Board, SB 288 Hearing Proc ess Guidance, January 26, 2007.

“Implementation of the New Source Review (NSR) Prog ram for Particulate Matter Less Than 2.5 Micrometers (PM2.5)”, Federal Register 73:96 (May 1 6, 2008) p. 28321.Staff Report

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Placer County Air Pollution Control District, “Rule 502 New Source Review”, February 11, 2010.

San Joaquin Valley Unified Air Pollution Control Di strict, “Rule 2201 New and Modified Stationary Source Review Rule”, December, 18, 2008.

San Joaquin Valley Unified Air Pollution Control Di strict, “2008 PM2.5 Plan”, April 30, 2008.

South Coast Air Quality Management District, “Rule XIII – New Source Review”, Various Dates

U.S. EPA Comments for Rule 202, March 4, 1996 & Sep tember 3, 1996.

U.S. EPA Comments for Rule 202, August 14, 2000.

U.S. EPA, 40 CFR 51.165, Permit Requirements.

U.S. EPA, 40 CFR 51, Appendix S to Part 51 – Emissi on Offset Interpretative Ruling.Staff Report

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APPENDIX A

LIST OF CHANGES TO RULES
Rule 202 – New Source Review

NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

101 Same Revised language to clarify rule provides for issuance of authorities to construct and permits to operate and changed the wo rd ”may” from
“would then”. 102 Same Revised Rule 202 applicability, removed re ference to agriculture and agricultural practices, and major source applicabil ity. See also new Section 112. Agricultural sources that are major s ources are subject to this rule due to changes in state law, HSC Section 42301.16. Added language from major modification section to clarify which emission units are subject in calculating potential to emit for determining major source applicability. Removed references to sectio ns within Rule 207 are extraneous and not recommended by EPA for SIP a pprovability. Revised the term “affected pollutants” to “regulate d air pollutants” for rule consistency and revised section reference.
110 Same Revised exemption to clarify and limit exemption ap plicability. Emergency Equipment exemption does not apply if the emissions unit is a major stationary source or is a major modifica tion. Change made due to EPA comments for SIP approvability and to be consistent with
the 1984 SIP rule. 110.1 Same Revised language to clarify emergency eq uipment shall not exceed 100 hours per year for maintenance purposes. 110.2 Same Revised language to clarify operation of emergency equipment shall not exceed a total of 200 hours per year. 111 Same Revised exemption to require the emissions unit emission increase not exceed the daily emissions levels specified in 1991 Rule. This exemption was added after the 1991 amendments. Howe ver, the 1991 rule would not have required offsets for sources th at emitted less than the levels specified here. Change made due to SB28 8 requirements. 112 N/A Added exemption to clarify what already is happening for non-major agricultural stationary source and agricultural non -major modifications. These agricultural sources are subject to the requ irements of Rule 215 – Agricultural Permit Requirements and New Agricult ural Permit
Review. HSC Section 42301.16 113 112 Revised exemption to include PM2.5. PM2.5 has been added to this
rule because the District is now a federal PM2.5 no nattainment area. Added PM2.5 exemption level for notification, on an nual basis, consistent with PM2.5 offset requirements (used off set trigger levels as the threshold). Revised the term “reactive” to “vo latile” to be consistent with other District rules and simplified by calcula ting PTE from “the project,” with “project” being defined in Section 2 35. Revised sectionStaff Report

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NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

reference. 114 113 Revised exemption to include the replacemen t equipment requirement that is removed. Revised “replacement equipment” e xemption to satisfy SB288 and retain the exemption. The existi ng adopted rule modified the 1991 rule by allowing "functionally id entical" instead of "identical" equipment to be considered replacement equipment. Under the 1991 rule, if equipment replacement was not "id entical", then it would be subject to offsets if the emissions exceed ed the 1991 offset thresholds except for VOC and NOx set at 136 lbs/da y (25 tpy) consistent with major source levels of 25 tpy in th e CAA for “severe” nonattainment. Therefore, "functionally" identical replacements can continue to be allowed, only if the daily emissions increase is less than
the 1991 offset thresholds. 115 114 Revised significant to major to match 40 CF R Part 51. 116 N/A Added exemption for modifications that are not federal major modifications from the requirements of Section 401 – Alternative Siting. Rule 213 is proposed to be rescinded and relevant requirements incorporated in Rule 202 for clarity. 200 Same Revised section to explicitly include term s defined in Rule 101 –
General Provisions and Definitions. Rule 101 conta ins the definition of Volatile Organic Compound (VOC).

N/A 202 Eliminated “actual emissions reductions” de finition. Term no longer
used in rule.
202 203 Section renumbered. N/A 204 Eliminated “affected pollutants” definition . Term replaced with “regulated air pollutant” as defined by 40 CFR Part 51, Appendix S.
203 205 Revised to include U.S. Code and California Health and Safety Code for ambient air quality standards. Removed languag e referring to rule
submittal to EPA for inclusion into the SIP. Rule 202 will not be
submitted to the SIP. 204 206 Revised the definition to change the term “ affected pollutants” to the new term “regulated air pollutants”. Revised langu age to clarify BACT determination is for each nonattainment pollutant.
205-206 207-208 Sections renumbered. 207 N/A Added “commencing operation” definition for the term used in the
definition of new emissions unit consistent with th e definition startup from 40 CFR 52.01 section (f).

208 N/A Added “construction commences” definition f or the term used in the
definition of creditable increases and decreases co nsistent with 40 CFR Part 51.165 section (a)(1)(xvi).
210 Same Revised “Cost Effectiveness Guidelines” to “BACT Policy” for determining cost-effective levels and added languag e that cost effectiveness does not apply to major stationary so urces or major
modifications consistent with the ’91 rule. Revise d the term “affectedStaff Report

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NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

pollutants” to “regulated air pollutants” for rule consistency. 211 Same Revised the period for creditable increase s and decreases consistent
with 40 CFR Part 51.165 and revised the term “feder ally enforceable” to “enforceable as a practical matter” consistent w ith “net emissions increase” definition in 40 CFR Part 51, Appendix S, Section II.A.6.i.
212 Same Revised term “cumulative emission increase ” to “emission increase” for rule clarity. Revised section reference. 213 Same Revised the definition to change the term “affected pollutants” to the new term “regulated air pollutants”. 214 Same Added PM2.5 offset requirements to Section 302 consistent with federally required annual offset trigger levels. To enforce this new requirement, where applicable, daily and annual enf orceable emissions
limitations have been added. Moved the reference t o NSPS and NESHAP provisions to Section 40X.
N/A 214.4 Section moved to Section 410.2d. 215 Same Revised the term “affected pollutants” to “regulated air pollutants” for rule consistency. 216 N/A Added “existing emissions unit” definition for the term used in the definition of historic potential emissions. 217 N/A Added “federal major modification” definiti on taken verbatim from Rule 213. This definition specifies the sources that ar e exempt from alternative siting analysis requirements in Section 401.
218-219 216-217 Sections renumbered. 220.1 218 Revised the definition adding historic ac tual emissions using actual operating days or if no records using permitted ope rating days or calendar days, whichever is less. Under the1991 ru le, actual daily emissions reductions were calculated by dividing th e actual quarterly emissions by actual operating days. Change made du e to SB288 requirements. 220.2 N/A Added operating days in calculation used to reduce historical actual emissions by non-compliance emissions. Under the 1 991 rule, daily emissions days were used for the calculation proced ure. Changed made due to SB288 requirements. 220.3 N/A Revised definition for clarity and consis tency with 40 CFR Part 51 Appendix S Section II.30.iii which defines actual e missions as excluding emissions from new emissions units (equip ment operated less than 2 years.) See also Section 225. 220.4 N/A Revised existing language for flexibility of non-major sources that are not subject to the most stringent requirements of A ppendix S.

221 218 Revised definition consistent with EPA comm ents (September 3, 1996)
and SB288. Added PM2.5 consistent with PM2.5 NSR I mplementation Rule. Grandfather date for latest Permit to Operat e for PM2.5 same as PM10 (January 1, 1977)}.
221.1 219.3 Section renumbered.Staff Report

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NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

221.2 219.1 For non-major sources, the historic pot ential emissions will remain equal to the potential to emit: a. for BACT only if the permit had an enforceable daily emissions limit on the Authority to Construct or Pe rmit to Operate. b. for offset trigger determinations and quantity o f offsets provided only if the permit had enforceable quarter ly limitations permit had an enforceable daily emissio ns limit on the Authority to Construct or Permit to Operate, and c. for determining daily offset triggers for peakin g power plants and for determining whether new requirements in Section 303.2 only if the permit had an enforceable daily emissions limit on the Authority to Construct or Pe rmit to Operate. 221.3 219.2 Revised language consistent with 1996 c omments (see section 221.3a) and maintained the procedure for emissions unit that are fully offset for any emission increase. 221.3a 219.4 Revised language to satisfy 1996 EPA c omment that if a unit has enforceable limits, and has been operating within 8 0% of those limits, the unit’s historic potential to emit shall equal t o the enforceable limit.
222 N/A Added “identical emissions unit” definition for clarification of Replacement Equipment. Change made due to SB288 re quirements. N/A 220 Moved definition to correct alphabetical or dering of definitions. 223 221 Revised definition to add PM2.5, PM2.5 prec ursors, and ammonia consistent with PM2.5 NSR Implementation Rule. Als o, revised the term “affected pollutants” to “regulated air pollut ants” and “reactive” to “volatile” for rule consistency. 223.1 N/A Added lead compounds consistent with Cali fornia Health and Safety
Code Section 41706. 223.2 N/A Added section to set significance levels for PM2.5 consistent with PM2.5 NSR Implementation Rule. Some PM2.5 precurso rs are also ozone precursors, but have higher major modificatio n thresholds than ozone. Therefore, if a project exceeds the major m odification threshold for PM2.5 then it requires any offsets of PM2.5 and PM2.5 precursors to be located within the Sacramento fede ral nonattainment area for PM2.5 pursuant to Section 302.12. The fed eral PM2.5
nonattainment area is smaller than the ozone nonatt ainment area, and excludes Sutter and Solano Counties, part of Yolo C ounty, and a larger portion of Placer and El Dorado Counties. 224 N/A Added “major stationary s ource” definition (moved from Section 220). Added PM2.5 and PM2.5 precursor consistent with NSR Implementation Rule. Revised section reference.

225 222 Revised section consistent with 1991 rule b y adding the language “including change in fuel” and “is not specifically limited by a permitStaff Report

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NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

condition”. Additionally, clarified replacement of air pollution control equipment with new control equipment is not a modif ication if the emissions are less than or equal as determined by S ection 413.3 Changes made due to SB288 requirements. Changed th e term “the replacement” to “replacing” to clarify this section is not part of the replacement equipment exemption and the term “signi ficant” to “major”.
226 N/A Added “new emissions unit” definition for c larification of Historic
Potential Emissions. This definition is consistent with 40 CFR 51, Appendix S, Section II.A.7.i. 227 223 Revised section to include specific referen ce to 40 CFR 81.305. This is the citation to attainment status designati ons of California.
228 224 Section renumbered. 229 N/A Added “plantwide applicability limit” defin ition taken verbatim from Rule

213.
230 225 Section renumbered.

231 N/A Added “PM2.5” definition consistent with PM 2.5 NSR Implementation
Rule.
232-233 226-227 Sections renumbered. 234 228 Revised “precursor” definition consistent w ith PM2.5 NSR Implementation Rule. PM2.5 and Ammonia included in definition.
235 229 Section renumbered and revised section refe rences. 236 N/A Added “Project” definition. This term is us ed where only the emissions units associated with the permit application are in cluded for determining whether offsets triggers are exceeded, the quantity of offsets required pursuant to Section 413.5.a or whe ther exemptions apply (Sections 111 & 113).
237 230 Section renumbered. N/A 231 Removed definition. Peaking Power Plants e mission increase calculated in the calculations procedures rather th an a separate
section.
238 232 Section renumbered. N/A 233 Removed definition. “Reactive Organic Comp ound” replaced with “Volatile Organic Compound” for rule consistency. “Volatile Organic Compound” defined in Rule 101 – General Provisions and Definitions.
239 234 Section renumbered. 240 N/A Added “regulated air pollutant” definition as a replacement to prior term "affected pollutants". This is also similar to 40 C FR 51, Appendix S,
Section II.A.31 but with included references to des ignations under the
Federal Clean Air Act or California Health and Safe ty Code. N/A 235 Removed definition. Requirements moved to replacement equipment exemption. See section 114.
241 236 Section renumbered.
242 N/A Added “Sacramento Federal Nonattainment Are a for PM2.5” consistent with PM2.5 NSR Implementation Rule.Staff Report

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243 237 Revised the term “affected pollutants” to “ regulated air pollutants” for rule consistency.
244 238 Section renumbered. 301 Same Revised the term “affected pollutant” to “ regulated air pollutants for rule consistency and section references revised to new c alculation procedures section. BACT is triggered when an emis sions change
would result in an emission increase of more than the levels specified. This is consistent with the ’91 languag e. 301.1 Same Changed requirements to 0 lb/day for VOC , NOx, SOx, and PM10 and to reinstate the requirements from the 1991 rule. ( SB288) A BACT trigger for PM2.5 of 0 lb/day is proposed to match the proposed BACT trigger for PM10. The BACT trigger f or PM2.5 matches the PM10 BACT trigger because PM2.5 is a su bset of PM10. 302.1 Same Added PM2.5 and ammonia offset requireme nt on an annual basis of 15 tons/year and 100 tons/year respectively cons istent with PM2.5 NSR Implementation Rule and Placer County APC D Rule 502. Added section references for exemptions from offsets (CO modeling, portable and rocket engine). Revised the term “affected pollutants” to “regulated air pollutants” for rule consistency and
section references revised. Revised PM10 offset re quirements to 7,300 lbs/quarter (based off 80 lbs/day) consistent with the 1991 rule. (SB288)

N/A 302.2 Moved section to 302.6. 302.2 302.3 Clarified applicability of peaking powe r plants daily emissions offset trigger. Also, revised the term “affected pollutan t” to “regulated air pollutants for rule consistency and section referen ce. 302.3.a &
302.3.b 303.3.a &

303.3.b Combined sections 302.4 and 302.5 for clarity since all relate to

seasonality of offset provisions for the various po llutants. Also, changed term “reactive” to “volatile” for rule cons istency, section
references revised.

302.3.c &
302.3.d 302.5 Revised to correct the quarters in which cred its can be utilized and combined with Section 302.3 for clarity.
302.4 N/A Moved from Section 303.2. Added addition al language that offsets from other Districts can be used but must meet requ irements of Section 302.8 (District, state and federal requirem ents). See section

302.8. 302.5 302.6 Revised section to clarify the intent t hat the emission reduction credits are from the same unit that was shutdown pr eviously. Added reference to daily offset triggers for peaking powe r plants an. 302.6 N/A Added language that emission offsets from other air districts must meet District rules and regulations, state and fede ral requirements. The offset ratio of the levels specified in Section 303 shall be applied to
these offsets.
302.9 N/A Moved from section 303.3.Staff Report

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302.10 N/A Added section to limit PM2.5 and precurs ors to PM2.5 offsets for major stationary sources or major modifications come from within the
boundaries of the Sacramento Nonattainment Area for PM2.5. 303 Same Added language referring to offsets requir ed calculation and to explain
the consolidated emission offset ratio table.
303.1 Same Revised offset ratios consistent with th e ’91 Rule due to SB288 requirements. Note that the proposed offset ratios are 0.1 lower than
the '91 Rule because the '91 Rule included a fundin g mechanism for the Community Bank, subsequently moved to Rule 204 - Emission
Reduction Credits. Consolidated emission offset ta bles, and added PM2.5 ratios (and ammonia placeholder if needed) co nsistent with proposed PM10 offset ratios. Offset ratios for nonattainment pollutants for grea ter than 15-mile but
within 50-mile radius and more than 50-mile radius are increased to 2.0
to 1.0 consistent with the 1991 rule and the 1984 S IP approved NSR rule. (SB288)
N/A 303.1.a Removed section. Consolidated informat ion into section 303.1.
303.2 303.1.b Consolidated Section 303.3 into this Section since the offset ratios for
both referenced rules are identical. Added PM2.5 an d ammonia to table consistent with PM2.5 NSR Implementation Rule . Revised table to clarify the ratios apply to offsets obtained fro m Rule 205, Community Bank and Priority Reserve Bank. Also, changed term “reactive” to “volatile” for rule consistency, section references revised and section
renumbered.
N/A 303.1.c Consolidated into Section 303.1.b. N/A 303.2 Moved to section 302.6.a for clarity. N/A 303.3 Moved to section 302.10 for clarity. 304 Same Clarified section does not apply to PM2.5 and changed term “reactive” to “volatile” for rule consistency. 305 N/A Added PM2.5 interpollutant emission offset ratios consistent with PM2.5 NSR Implementation Rule. Ratios are set for NOx and SOx
unless a different offset ratio is established and approved by EPA into the SIP. Other pollutants are not allowed but have option to be added
later if established in the attainment demonstratio n and approved into
the SIP.
306-308 305-307 Sections renumbered.
400 Same Section references revised. 401 Same Added language consistent to incorporate t he exemption previously provided in Rule 213 and made more specific the app ropriate Clean Air
Act section reference. 403 Same U.S. EPA “Guidelines on Air Quality Models ” section reference revised.
405-407 Same Revised section references. 408 Same Reinstated the public comment provisions f or BACT determination previously required by the 1991 rule. New BACT det erminations thatStaff Report

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are not in the BACT Policy shall be made available for public comment. (SB288)
409.2 Same Revised section reference. 410.2a,b Same Added daily, quarterly emissions limi tations for all regulated air pollutants. Annual emissions limitations are requi red for PM2.5 and any other air pollutants for which the source is ma jor. The daily emissions limitations are applicable to the tempora ry source exemption, replacement equipment exemption, peaking power plants offset trigger, and units not required to install B ACT pursuant to
Section 413.2. 410.2d N/A Added language removed from section 214. 4.
410.3c Same Removed term “new” that introduces ambi guity and clarified enforceable “as a practical matter” with 40 CFR Par t 51.165 section (a)(1)((vi)(E)(2).. 410.3d Same Revised to clarify reference is to the owner or operator of the permitted stationary source. 410.3f N/A Added requirement that offsets must be s urrendered prior to commencing operation and that offsets must be maint ained throughout operation consistent with 40 CFR Part 51.165.
412 Same Revised to include offset section as state d.
413 Same Revised section to include all calculation procedures used in exemptions, definitions and standards. 413.1 N/A Clarified the increase in potential to em it is “for the project” when determining notification.
413.2 N/A Added Emissions Increase section for BACT on a daily emissions basis and clarified BACT determination is performed separately for
each emissions unit. 413.3 N/A Added Emissions Increase section for Temp orary Sources and replacing of air pollution control equipment with n ew control equipment determinations. This calculation procedure differs from Section 413.4 in that it includes only emissions units associated with the project, not all of the emissions units at the stationary source

. 413.4 N/A Added offset trigger calculation section. Offsets are triggered if the calculation exceeds the offsets trigger levels in S ection 302. . 413.4a N/A Added offsets trigger calculation for SO x, PM10 and CO and PM2.5.
Emissions are excluded for emissions units where th e latest Authority to Construct/Permit to Operate was issued before Ja nuary 1, 1 977. For equipment installed after January 1, 1977, offs ets are calculated as the sum of the potential to emit for all units at t he stationary source. For equipment installed prior to January 1, 1977 an d modified after, offsets are calculated only the post ’77 increase f or those emissions units (potential to emit minus Historic Potential E missions). The trigger is calculated using daily emissions for peaking pow er plants, quarterly emissions for SOx, PM10, and CO, and yearly for PM2 .5.Staff Report

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413.4b N/A Added offset trigger calculation for VOC and NOx (except when calculating for Section 303.2). VOC and NOx offset s required to be calculated using daily or quarterly emissions. Th e daily calculation procedure is added consistent with the daily offset triggers in Section

302.2. 413.4c N/A Added offset trigger calculation for VOC and NOx for purposes of
Section 302.2. This section is similar to Section 413.4a where the calculation only sums the emissions for equipment i nstalled after ’77 and only post ’77 emission increases for equipment installed before ’77
that has been modified after. 413.5a,b N/A Added section to calculate emissions offsets requir ed by Section 302. Offsets are equal to sum of all increases of the po tential to emit –
Historic Potential Emissions for the emissions unit s associated with a project times the appropriate offset ratio. Calcul ations performed separately for each pollutant for each calendar qua rterly or where required on an annual basis. Annual basis added pr e PM2.5 NSR Implementation Rule. N/A 414-419 Removed sections. All calculation proc edures moved to Section 413. 414 420 Added requirements to allow sources to appl y for a Plantwide Applicability Limit. Language taken from Rule 213.
415 N/A Section renumbered.

Rule 214 – Federal New Source Review

NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

(This is a new rule. This table articulates the ra tionale for differences from the Proposed Rule 202 Language.)
101 Same Added language to clarify Rule 214 applies to all permitting actions at major sources which includes all modifications. Th is Rule 214 will be submitted as a revision to the California State Imp lementation Plan to replace the 1984 version of Rule 202 which will be removed from the SIP. This rule applies to major sources subject to federal New Source Review requirements. 102 Same Added language the Rule 214 only applies t o emissions units located at major stationary sources. Also, clarified rule applicability applies to major agricultural sources. N/A 111 Eliminated exemption which does not apply t o major sources or modifications at major sources.
111 N/A Section number reserved to maintain section references consistent
with Rule 202. 113 Same Removed CO from exemption. Because Sacram ento County has attained the CO NAAQS, they are now regulated by Ru le 203, Prevention of Significant Deterioration. 114 Same Revised exemption applicability to minor m odification at major source,Staff Report

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(This is a new rule. This table articulates the ra tionale for differences from the Proposed Rule 202 Language.)

see Section 237. Removed CO from definition becaus e Sacramento has attained the NAAQS for CO. CO regulated by Rul e 203, Prevention of Significant Deterioration. 117 N/A Added exemption from PM10 requirements whic h takes effect upon redesignation of Sacramento County as attainment for the federal PM10 National Ambient Air Quality Standard. 203 Same Revised section to refer only to national ambient air quality standards established pursuant to Clean Air Act Sections 108 or 109. 223 Same Removed references to attainment pollutant s: CO, and Pb. N/A 224.5 Removed CO from definition. CO regulated by Rule 203, Prevention of Significant Deterioration.
224.5 N/A Section number reserved to maintain secti on references consistent
with Rule 202.
227 Same Removed reference to California Health an d Safety Code.
230-231 Same Removed references to the California C ode of Regulations which are not federal requirements. N/A 232 Removed definition. Term no longer used du e to eliminated temporary source exemption.
232 N/A Section number reserved to maintain section references consistent
with Rule 202. 233 Same Added language excluding fugitive emission s from potential to emit unless the source belongs to one of the categories of stationary
sources included in Rule 207. This is consistent w ith 40 CFR 51.165 but different from Rule 202 that requires fugitive emissions in potential
to emit. N/A 244 Removed “temporary source” definition. Ter m no longer used due to eliminated of temporary source exemption.

244 N/A Section number reserved to maintain section references consistent
with Rule 202.
301 Same Removed last sentence because it is not ne cessary if BACT required
for all emission increases.
301.1 Same Removed Pb and CO because Sacramento has attained the NAAQS for these pollutants. BACT will still be required for these pollutants under PSD requirements.
302.1 Same Removed section references to CO modelin g and portable equipment offset provisions that have been removed from the r ule. See sections
302.7 and 302.8. 302.1a N/A Offset thresholds are expressed on a qua rterly basis because although the 1984 SIP rule required offsets to be provided o n a yearly basis, they required seasonality protection. Since the qu arterly offsets requirements for state purposes do not match calend ar quarters, the thresholds are specified on a quarterly basis. PM2 .5 is expressed on a yearly basis because it was not regulated by the 19 84 SIP rule. The offset thresholds are the major source trigger leve ls for VOC and NOx.Staff Report

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(This is a new rule. This table articulates the ra tionale for differences from the Proposed Rule 202 Language.)
The major source threshold for PM10 is 100 tpy, bu t because the offset threshold in the 1984 was 150 lbs/day as TSP , which equates to 80 lb/day PM10, or 7,300 lbs/quarter. The threshol d for SOx is based on the 1984 SIP rule threshold of 250 lbs/day, expr essed quarterly.
The PM2.5 offset threshold is from 40 CFR Part 51.1 65 section (a)(1)(iv).
302.1b N/A This section is to be used for all modif ications, both major and minor modifications at a major stationary source. Minor modifications at major stationary sources are included because these were subject to the 1984 rule.. Offset thresholds are expressed on a quarterly basis because although the 1984 SIP rule required offsets to be provided on a yearly basis, they required seasonality protectio n. Since the quarterly offsets requirements for state purposes do not matc h calendar quarters, the thresholds are specified on a quarter ly basis. PM2.5 is expressed on a yearly basis because it was not regu lated by the 1984 SIP rule. The offset thresholds are the major sour ce trigger levels for VOC and NOx because the significant levels would be higher than the thresholds currently required resulting in a relaxa tion. The other modification offset threshold match the significan t levels of 40 CFR Part 51.165 section (a)(1)(x)(A). The significant threshold for PM10 is 15 tpy, but because the offset threshold in the 198 4 was 150 lbs/day as TSP, which equates to 80 lb/day PM10, or 7,300 lbs/ quarter. The threshold for SOx is based on the significant level of 40 tpy (20,000 lbs/quarter) and PM2.5. The PM2.5 threshold is 10 tpy consistent with 40 CFR Part 51.165 section (a)(1)(x)(A).
302.2 Same Removed CO because Sacramento has attain ed the NAAQS for these pollutants. Revised daily offset thresholds to 250 lbs/day matching the threshold in the 1984 rule. This is less stringent than Rule 202 at 150 lbs/day matching the threshold in the 1991 rule..
302.3 Same Removed CO because Sacramento has attain ed the NAAQS for these pollutants of this pollutant. N/A 302.7 Removed section. CO modeling section not required because CO is removed from the rule. CO modeling may still be re quired by PSD.
302.7 N/A Section number reserved to maintain secti on references consistent
with Rule 202. N/A 302.8 Removed section. Section not federal req uirement.
302.8 N/A Section number reserved to maintain secti on references consistent
with Rule 202. 303 Same Revised language including only offset rat ios applicable for major stationary sources (which include all modifications ).
303.1 Same Removed references to minor sources and offset ratio applicable only
to minor sources. Deleted the reference to Sacrame nto Valley
because it is not defined in Rule 214 and is unnece ssary because
credits must come from within the federal nonattain ment areas.Staff Report

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(This is a new rule. This table articulates the ra tionale for differences from the Proposed Rule 202 Language.)
303.2 Same Removed offset ratios not applicable to major source or major modifications and removed language to clarify the a pplicability of the
PM2.5 ratio. N/A 308 Removed section. Section not applicable to major sources.
308 N/A Section number reserved to maintain section references consistent
with Rule 202.
402 Same Removed reference to the California Govern ment Code which is not a federal requirement. 405.1 Same Removed reference to submitting prelimin ary decision to California Air Resources Board that is not a federal requirement.
N/A 408 Removed BACT determinations submittal to AR B that is not federal requirement. 413.3 Same Removed reference to temporary source ex emption. Temporary source exemption is not applicable for major source s. 413.4 Same Removed reference to CO because Sacramen to has attained the NAAQS for these pollutants. Section renumbered a nd revised
section reference.

Rule 215 – Agricultural Permit Requirements and New Agricultural Permit Review

NEW
SECTION

NUMBER EXISTING

SECTION

NUMBER PROPOSED CHANGES

112 Same Added language to clarify requirements of agricultural emission unit that is a new major stationary source or major modi fication complies with Rule 214, in addition to Rule 201 – General Pe rmit Requirements
and Rule 202. 228 Same Added language to clarify requirement of o ffsets subject to Rule 214, in
addition to Rule 202 and Rule 215.Staff Report

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Appendix B

California HSC Section 40727.2 Matrix Proposed Rule 202 – New Source Review

Elements of Comparison Specific

Provisions Proposed Rule 202 40 CFR Part 51, Subpart

I
Exemptions Offset Requirements 1. Emergency Equipment

2. Temporary Equipment (limited by daily offset levels consistent with the ’91 rule) 3. Non-major source/mod agricultural

sources 4. Replacement Equipment 5. Rule Compliance 6. Alternative Siting not required for
sources that would not constitute a Federal Major Modification 1. Replacement equipment 2. Change of ownership 3. Routine repair and
maintenance 4. Requires Alternative Siting for Federal Major
Modifications.

5. PM attainment, upon
PM attainment PSD applies Averaging Provisions Not Applicable Not Applicable

Units Tons/year, lbs/day; lbs/quarter, ppm, grams/liter Tons/year

Emissions
Reduction BACT at 0 lb/day and Emissions

Offsets Lowest Achievable
Emissions Level and
Offsets. Emissions Limits

Compliance
alternatives Interpollutant Emission Offsets; Air

Quality Modeling for CO. Innovative Control Technology; Air Quality Modeling

Permit Conditions Emission Unit(s) operated in compliance with Rule
Emissions Limitations Offsets that satisfy EPA requirements (by meeting Rule 204) Federally enforceable permit conditions Offsets must be Real, Enforceable, Permanent, Quantifiable and Surplus. Operating Parameters Not Applicable – Required under other rules (Rule 201, General Permit Requirements) Monitor emissions; Recordkeeping for hours of operations, throughput,
and emissions.

Work Practice Requirements Not Applicable – Required under other rules (Rule 201, General Permit Requirements) Monitor emissions; Recordkeeping for hours of operations, throughput,
and emissions. Recordkeeping Not Applicable – Required under

other rules (Rule 201, General Permit Requirements) Monitor emissions; Recordkeeping for hours of operations, throughput,
and emissions. Monitoring/Records

Frequency Not Applicable Annual Test Methods Not Applicable Continuous emission monitoring (CEM); testing to verify compliance with
emission limits. Monitoring/Testing

Frequency Not Applicable Continuous for CEM; Annual or more frequent for source testing.Staff Report

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California HSC Section 40727.2 Matrix Proposed Rule 214 – Federal New Source Review

Elements of Comparison Specific

Provisions Proposed Rule 214 40 CFR Part 51, Subpart I Exemptions Offset Requirements 1. Emergency Equipment

2. Non-major source/mod agricultural sources 3. Replacement Equipment 4. Rule Compliance 5. Alternative Siting
6. PM Attainment 1. Replacement equipment 2. Change of ownership 3. Routine repair and
maintenance

4. 5. PM attainment, upon
PM attainment PSD applies Averaging Provisions Not Applicable Not Applicable

Units Tons/year, lbs/day; lbs/quarter, ppm, grams/liter Tons/year

Emissions
Reduction BACT at 0 lb/day and Emissions

Offsets Lowest Achievable
Emissions Level and
Offsets. Emissions Limits

Compliance
alternatives Interpollutant Emission Offsets; Innovative Control Technology; Air Quality Modeling

Permit Conditions Emission Unit(s) operated in compliance with Rule
Emissions Limitations Offsets that satisfy EPA requirements (by meeting Rule 204) Federally enforceable permit conditions Offsets must be Real, Enforceable, Permanent, Quantifiable and Surplus. Operating
Parameters Not Applicable – Required under other rules (Rule 201, General Permit Requirements) Monitor emissions; Recordkeeping for hours of operations, throughput,
and emissions.

Work Practice Requirements Not Applicable – Required under other rules (Rule 201, General Permit Requirements) Monitor emissions; Recordkeeping for hours of operations, throughput,
and emissions. Recordkeeping Not Applicable – Required under

other rules (Rule 201, General Permit Requirements) Monitor emissions; Recordkeeping for hours of operations, throughput,
and emissions. Monitoring/Records

Frequency Not Applicable Annual Test Methods Not Applicable Continuous emission monitoring (CEM); testing to verify compliance with
emission limits. Monitoring/Testing

Frequency Not Applicable Continuous for CEM; Annual or more frequent for source testing.Staff Report

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Appendix C

Public Comments

Public Workshop (August 10, 2010)

Attendees: Anitra Brosseau, Aerojet

Jake Oosterman, Western United Dairymen Tina Suarez-Murias, California Air Resources Board Becky Wood, ATS Argelia Leon, Breathe CA Bob Hitomi, Sacramento State University Dick Wheaton, McCellan Business Park June Livingston, BERC Stu Husband, SMUD Marcus McCarthy, Dome Printing Rafael Aguilera, Verde Consulting Group

Comment #1: Does the EPA consent decree focus on Sacramento or does it affect other

areas around the nation?

Response: The lawsuit, to which the consent decree applies, alleged that EPA failed to

perform a nondiscretionary duty to either approve a State Implementation Plan or promulgate a Federal Implementation Plan fo r California, Idaho, New Mexico, North Dakota, Oklahoma and Oregon to sa tisfy four separate requirements of the Clean Air Act with regard to th e 1997 NAAQS for 8- hour ozone and fine particulate matter. SMAQMD was recognized as having a SIP-approved NSR rule from 1984 that does not address those requirements.

Comment #2: What is the impact of the proposed amendments on t he community? Are

there public health benefits?

Response: The proposed amendments are as stringent, and in s ome instances more

stringent, than the most recent version of Rule 202 . The practical impact of the proposed amendments will be to require more emi ssion units to install the best available control and will, in some cases, require additional
emissions offsets to be surrendered.

Comment #3: How do offsets that are from 50 miles away benefit the community?

Response: Emission offsets are encouraged to come from close to the source needing

the credits however further distances are allowed w ith an increased ratio to
allow an area to move towards attainment while stil l allowing growth. For distances of 50 miles and more, the ratio is propos ed to be at least 2.0:1.0 with a case by case determination that may require a higher offset ratio.Staff Report

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However, in no case shall emissions from a new or m odified stationary

source prevent or interfere with the attainment or maintenance of any applicable ambient air quality standard (see Sectio n 306 of Rule 202). This ensures that near source impacts do not cause healt h problems regardless
of the location of the offsets.

Comment #4: How is a new emissions unit determined? If an emi ssions unit is issued a

permit before the rule is adopted, is it considered a new emissions unit?

Response: New emissions unit definition was added in Section 226 as an emissions

unit where less than two years has passed since the date of commencing operation under an issued Permit to Operate or an A uthority to Construct,
whichever is earlier. This is consistent with fede ral rules. However, new emissions units at major sources are treated differ ently under Section 220,
historic actual emissions.

Comment #5: When will the District complete an analysis to det ermine if ammonia will be

considered a precursor to PM2.5?

Response: The District is planning to complete the PM2.5 att ainment demonstration

plan in late 2012. The plan will specify whether a mmonia will be considered a limiting precursor. In other words, it will specify whether ammonia emissions reductions improve PM2.5 air qual ity. The San Joaquin Valley Air Pollution Control District’s 200 8 PM2.5 plan determined that ammonia was not a limiting precursor within th eir district 32 . Additional analyses are necessary and a public process will oc cur as part of Plan development.

Comment #6: Why did the offset ratios decrease from the 1996 a dopted version of Rule

202 as compared to the 1991 adopted version of Rule 202?

Response: The 1996 amendments of Rule 202 decreased emission location offset

ratios of greater than 15 miles and increased the e mission location offset ratios for same-source. However, the lower offset ratios do not meet federal SIP approvability and State law requirement s, therefore the offset ratios for distances greater than 15 miles are prop osed to match the 1984
and 1991 versions of Rule 202.

Comment #7: Will Greenhouse Gases (GHG) be regulated? If so, how will be GHG be

regulated?

Response: GHG will not be regulated under New Source Review. New Source

Review is applicable to any air pollutant for which there is a national or state ambient air quality standard, or precursor to such air pollutant. EPA

32 “2008 PM2.5 Plan”, San Joaquin Valley Unified Air Pollution Control District, April 30, 2008, p.

3-7Staff Report

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chose not to set a National Ambient Air Quality Sta ndard (NAAQS) for

GHG. EPA issued a tailored GHG rule that requires GHG to be regulated under Prevention of Significant Deterioration (PSD) . The District is planning on addressing GHG in the upcoming months w ith proposed
amendments to Rule 203 – PREVENTION OF SIGNIFICANT
DETERIORATION.

Comment #8: How will emissions offsets function for PM2.5 from current credit

certificates?

Response: The District has issued PM10 credit certificates i n the past. When those

old certificates surrendered as a PM2.5 offset, sta ff will determine the appropriate fraction of the PM10 that is PM2.5, dep ending on the type and function of the emissions unit that generated the e mission reduction credit.

Comment #9 : How will the District determine the ratios of PM2 .5 and PM10 out of total

particulate?

Response: These ratios have been determined by equipment typ e by the California Air

Resources Board. The District will use these ratio s for determining what percentage of particulate matter emissions are PM2. 5 and PM10.

Comment #10: Health studies have shown that PM2.5 has a greater health impact than

other pollutants. I would suggest a higher ratio f or emissions offsets than the proposed 1:1 ratio for PM2.5 at all distances.

Response: Thank you for your suggestion. Staff has reviewed the comments received

in response to the proposed amendments. After cons ideration of these comments, Staff is now recommending changing the PM 2.5 offset ratios to match the higher ratios establish for PM10.