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PART 71 FEDERAL OPERATING PERMIT

STATEMENT OF BASIS

Morongo Casino Cogeneration Facility 

Permit No. MO-ROP 10-01

1. Facility Information 

a. Permittee

Morongo Casino Cogeneration Facility 

11581 Potrero Rd. 

Banning, CA 92220 

b. Facility location

The Morongo Casino Cogeneration Facility (MCC) is located on the reservation 

of the Morongo Band of Mission Indians (“Morongo Reservation”) in the city of 

Banning in Riverside County, CA. 

c. Contact information

Facility Contact: Michael Milhiser, Chief Administrative Officer 

 (951) 755-5115 

Responsible Official: Robert Martin, Tribal Chairman 

(951) 755-5100 

 

d. Description of operations, products

The facility is a 8.4 megawatt cogeneration facility consisting of four 4-stroke, 

lean-burn CAT G3520 natural gas-fired engines, and three 4-stroke CAT 3516 

backup diesel-fired generators. 

e. Permitting and/or construction history

MCC was constructed in 2004. EPA issued the initial title V permit for the 

facility on August 2, 2005. The permit limits the facility’s potential to emit of 

NOx and VOC to less than 18.7 tons per year of each pollutant. 
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f. Emission-generating units and activities

Table 1. Emission-generating units and activities 

Emission 

Unit I.D. 

No. 

Unit Description Associated Control Equipment 

EG-1 Caterpillar G3520 natural 

gas-fired generator 

selective catalytic reduction 

(SCR) unit and oxidation catalyst 

EG-2 Caterpillar G3520 natural 

gas-fired generator 

selective catalytic reduction 

(SCR) unit and oxidation catalyst 

EG-3 Caterpillar G3520 natural 

gas-fired generator 

selective catalytic reduction 

(SCR) unit and oxidation catalyst 

EG-4 Caterpillar G3520 natural 

gas-fired generator 

selective catalytic reduction 

(SCR) unit and oxidation catalyst 

EG-5 Caterpillar 3516B dieselfired generator n/a 

EG-6 Caterpillar 3516B dieselfired generator n/a 

EG-7 Caterpillar 3516B dieselfired generator n/a 

Potential to Emit

The Morongo Reservation lies within Banning Pass, near the air quality planning 

boundary between Coachella Valley and the South Coast Air Basin (“South Coast”). 

Under the Clean Air Act, as amended in 1990 (CAA or “Act”), Coachella Valley was 

included as part of the “Southeast Desert Modified AQMA Area” and classified as 

“severe-17” nonattainment for the 1-hour ozone national ambient air quality standard 

(NAAQS). The South Coast Air Basin, the adjacent air planning area, was classified as 

“extreme” for the 1-hour ozone NAAQS. Under CAA §§ 182(d) and 182(e), the 

applicable New Source Review (NSR) “major source” threshold is 25 tons per year (tpy) 

of ozone precursors (i.e., VOC or NOx) in “severe-17” ozone nonattainment areas and 10 

tpy in “extreme” areas; thus, under the CAA, the applicable NSR major source threshold 

for ozone precursors is 25 tpy in Coachella Valley and 10 tpy in the South Coast. Until 

EPA approved the State of California’s boundary change request, as described below, the 

Morongo Reservation was included in the Southeast Desert Modified AQMA Area by 

virtue of being included in Coachella Valley, and thus was subject to the NSR major 

source threshold for ozone precursors of 25 tpy. 

On October 7, 2003, EPA approved the State of California’s request to move the 
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boundary between the Southeast Desert Modified AQMA Area and the South Coast Air 

Basin eastward to the east end of Banning Pass, with the effect that the entire Morongo 

Reservation became newly part of the South Coast Air Basin. 68 Fed. Reg. 57820. From 

the standpoint of air permitting, the effect of the boundary change was to lower the 

applicable NSR major source threshold for ozone precursors within the Morongo 

Reservation from 25 tpy to 10 tpy, effective November 6, 2003, due to the differences in 

the ozone classifications of the two air quality planning areas. 

 

Prior to the issuance of MCC’s Part 71 permit, the NSR threshold was increased back to 

25 tpy for the South Coast Air Basin through the planning process for the 8-hour ozone 

NAAQS. In an April 30, 2004 rulemaking, EPA designated the South Coast Air Basin as 

“severe-17,” which has a 25 tpy NSR threshold.1

 Moreover, the 1-hour ozone standard 

for the South Coast Air Basin, along with the 1-hour ozone standards for the rest of the 

nation, was revoked on June 15, 2005; therefore the 10 tpy threshold ceased to apply to 

sources on the Morongo Reservation. 40 C.F.R. § 50.9(b); see also 69 Fed. Reg. 23951 

(April 30, 2004). 

Thus, when EPA issued the initial Part 71 permit to the Facility in late 2005, the NOx and 

VOC major source threshold that applied in the ozone nonattainment area where the plant 

is located was 25 tpy under the 8-hour ozone NAAQS. At that time, MCC agreed to 

avoid major source status and nonattainment NSR permitting by taking federally 

enforceable limits on its potential to emit (PTE) of NOx and VOC to stay below the 25 

tpy threshold. 

However, the new 8-hour ozone standards were challenged, and on August 29, 2007, the 

U.S. Court of Appeals for the District of Columbia Circuit vacated the provisions of 

EPA’s Phase I implementation rule that waived obligations under the revoked 1-hour 

ozone standard for NSR, among other provisions. See South Coast Air Quality 

Management District, et al., v. EPA, 472 F.3d 882 (D.C. Cir. 2006), rehearing denied,

489 F.3d 1245 (clarifying that the vacature was limited to the issues on which the court 

granted the petitions for review). The effect of the court’s ruling was to restore NSR 

applicability thresholds and emission offsets to the classifications previously in effect for 

areas designated nonattainment for the 1-hour ozone standard. In the case of the 

Morongo Reservation, the effect was to restore the 10 tpy major source threshold for 

ozone precursors. 

In the wake of the court’s ruling, MCC became an existing major source because, at 18.7 

tpy, its PTE for ozone precursors exceeds the applicable major source threshold of 10 tpy. 

MCC is not immediately affected by the restoration of the 10 tpy major source threshold, 

but, because MCC is now considered an existing major source, any modification that 

results in an increase in emissions of ozone precursors from any “discrete operation, unit, 

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 Subsequently, effective June 4, 2010, with the exception of Indian country pertaining to the Morongo and 

Pechanga Tribes, EPA reclassified the South Coast Air Basin to “extreme” under the 8-hour ozone NAAQS 

standard, which would again lower the NSR threshold to 10 tpy. See 75 Fed. Reg. 24409 (May 5, 2010). 

EPA deferred reclassification of Indian country pertaining to the Morongo Tribe, as it had requested a 

boundary change to be included back in the Coachella Valley, which was reclassified as of May 5, 2010, to 

“severe-15,” with a regulatory threshold of 25 tpy. 
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or other pollutant emitting activity” would be considered a “major” modification and 

thereby subject to a “lowest achievable emission rate” (LAER) control technology 

requirement and offsets, among other NSR requirements, as required for all major 

sources in “extreme” ozone nonattainment areas. See CAA § 182(e)(2). EPA has 

retained the plant-wide federally enforceable limits of 18.7 tpy for each of the pollutants 

that were established in the initial title V permit as limits to the source’s PTE. Table 2 

shows MCC’s actual NOx and VOC emissions in 2009. 

Table 2. MCC’s 2009 Actual NOx and VOC Emissions (in tons/year) 

Unit NOx VOC 

EG-1 1.7 1.6 

EG-2 1.6 1.6 

EG-3 2.1 2.1 

EG-4 1.7 1.6 

EG-5 0.3 0 

EG-6 0.4 0 

EG-7 0.3 0 

TOTAL 8.1 6.9 

Table 3 shows MCC’s PTE for various pollutants, including the enforceable annual caps 

for NOx and VOC that were established in the initial title V permit. 

Table 3. MCC’s Facility-wide PTE (in tons/year) 

Pollutant 

NOx VOC SO2 PM10 CO HAP 

18.7 18.7 1.08 3.62 39.75 5.92 

2. Tribe Information 

a. General

The Morongo Reservation covers more than 32,000 acres in southern California, 

west of Palm Springs and east of Los Angeles. Total population on the 

Reservation is approximately 1,100, of which over 500 are tribal members. The 

Tribe runs a casino, and has significant wetlands on the upper acreage of the 

Reservation. 

b. Local air quality and attainment status
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The Morongo Reservation is part of the South Coast Air Basin, which is currently 

designated as attainment or unclassifiable for CO, NO2, SO2, and lead, and 

nonattainment for 8-hour and 1-hour ozone, PM10, and PM2.5. The area is 

classified as extreme for both 8-hour and 1-hour ozone, and serious for PM10 and 

CO. 

3. Applicable Requirements 

a. NESHAP 40 CFR Part 61, Subpart M - Demolition or Renovation Activity 

Based on MCC’s application, the facility is not currently engaged in the activities 

regulated under this provision. If MCC conducts any demolition or renovation 

activity, the permittee must assure that the project is in compliance with the 

federal rules governing asbestos including the requirement to conduct an 

inspection for the presence of asbestos. Including this term in the permit 

minimizes the need to reopen the permit if MCC ever conducts any demolition or 

renovation activity. 

b. Table 4. Incorporation of Applicable Requirements into Part 71 Permit

Requirement Condition/ 

Section 

Permit 

Condition Description/Notes 

Stratospheric 

Ozone Protection 

40 CFR 

Part 82 III.D Requirements for treatment of class I and II substances 

Asbestos 

NESHAP 

40 CFR 

Part 61, 

Subpart M 

III.E 

Requirements for 

demolition and renovation 

at facilities containing 

asbestos 

c. Inapplicable Requirements

i. Compliance Assurance Monitoring 

The CAM regulations, codified in 40 CFR Part 64, apply to title V sources 

with large emission units that rely on add-on control devices to comply 

with applicable requirements. The underlying principle, as stated in the 

preamble, is “to assure that the control measures, once installed or 

otherwise employed, are properly operated and maintained so that they do 

not deteriorate to the point where the owner or operator fails to remain in 

compliance with applicable requirements.” 62 Fed. Reg. 54902 (Oct. 22, 

1997) 

CAM applies to emission units at major sources that are subject to an 

emission limit or standard, use a control device to achieve compliance 

with the limit, and have potential pre-control emissions equal to or greater 
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than the major source threshold. 

MCC operates SCR on its four natural gas-fired engines. However, the 

only emission limitations these engines are subject to are the facility-wide 

caps on NOx and VOC emissions. The CAM regulations contain an 

exemption for “an emissions cap that meets the requirements specified in 

40 CFR § 70.4(b)(12) or 40 CFR § 71.6(a)(13)(iii) of this chapter.2

 40 

CFR § 64.2(b)(v). The CAM rule was not designed to ensure compliance 

with emission caps.3

 Since MCC’s natural gas-fired engines are not 

subject to any non-exempt emission limit, CAM does not apply to the 

engines and SCR system. Therefore, the permit does not contain any 

CAM requirements. 

ii. National Emissions Standards for Hazardous Air Pollutants (NESHAP) for 

Stationary Reciprocating Internal Combustion Engines (40 CFR Part 63, 

Subpart ZZZZ) 

 Subpart ZZZZ establishes emission and operating limitations for 

hazardous air pollutants (HAPs) emitted from stationary reciprocating 

internal combustion engines (RICE) located at major and area HAP 

sources. Even though MCC’s seven engines meet the definition of 

“existing stationary RICE” as defined in Subpart ZZZZ, the specific type 

of RICE used by MCC (spark ignition 4 stroke lean burn and compression 

ignition stationary RICE) are specifically listed as not being subject to 

Subpart ZZZZ. See 40 CFR § 63.6590(b)(3). Therefore, the permit does 

not contain any NESHAP Subpart ZZZZ requirements. 

iii. Standards of Performance for New Stationary Sources (NSPS) for 

Stationary Compression Ignition Internal Combustion Engines (40 CFR 

Part 60, Subpart IIII) 

Subpart IIII applies to operators of compression ignition (i.e., oil-fired) 

internal combustion engines that commence construction, modify, or 

reconstruct after July 11, 2005. MCC operates three diesel-fired backup 

engines. As noted above, MCC was constructed in 2004. The engines 

have not been modified or reconstructed since then. Therefore, NSPS 

Subpart IIII does not apply to MCC’s oil-fired engines. 

 

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 While the permit does contain short term limits NOx and VOC emissions in Conditions II.A.1 and II.A.2, these are 

contained in the permit merely to support the cap pursuant to CAA § 304(f) and 40 C.F.R. § 71.6(b). CAM only 

applies to an “emission limitation or standard” that is defined as an “applicable requirement” under Part 71, which 

does not include such limits, even though these limits are enforceable pursuant to CAA § 304(f) and 40 C.F.R. § 

71.6(b). 

3 An emission cap requires a source to quantify emissions in a repeatable and reproducible manner. The CAM 

regulations do not provide for quantifying emissions. Instead, the rule requires the source owner to monitor the 

operation of a control device to maintain a reasonable assurance of compliance and to respond to excursions with 

corrective action and reporting, not to quantify the amount of emissions during normal operations or of any excess 

emissions during excursions. 
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iv. Standards of Performance for New Stationary Sources (NSPS) for 

Stationary Spark Ignition Internal Combustion Engines (40 CFR Part 60, 

Subpart JJJJ) 

Subpart JJJJ applies to operators of spark ignition internal combustion 

engines (i.e., gasoline or natural gas-fired) that commence construction, 

modify, or reconstruct after June 12, 2006. MCC operates four natural 

gas-fired engines. As noted above, MCC was constructed in 2004. The 

engines have not been modified or reconstructed since then. Therefore, 

NSPS Subpart JJJJ does not apply to MCC’s natural gas-fired engines. 

v. Chemical Accident Prevention Program (40 CFR Part 68)

The Chemical Accident Prevention Program requires sources that use or 

store regulated substances above a certain threshold to develop plans to 

prevent accidental releases. Based on MCC’s application, and the fact that 

MCC uses urea (which is not a regulated substance under Part 68) in its 

SCR systems instead of ammonia, MCC currently has no regulated 

substances above the threshold quantities and is not subject to the 

requirement to develop and submit a risk management plan. Therefore, 

this requirement has not been included in the permit. However, MCC has 

an ongoing responsibility to submit a risk management plan if a substance 

is listed that is present at the facility in quantities over the threshold 

amount.

4. Monitoring

The permit includes monitoring provisions to assure compliance with the short term and 

annual emission limits that will limit MCC’s NOx and VOC PTE. EPA is not proposing 

any changes to the monitoring conditions that were included in the initial permit. 

Demonstrating compliance with the annual NOx limit through the use of the equation in 

Condition II.C.1. is expected to also demonstrate compliance with the annual VOC limit 

of 18.7 tons per year since VOC emission factors for the natural gas-fired engines and 

No. 2 fuel oil fired engines are equal to or less than the NOx emission factors listed in the 

equation. 

In order to determine compliance with the short-term NOx emission limit for the gas-fired 

engines, the permit requires annual performance testing. Regular use of a portable NOx

analyzer is also required to determine if the engines might be exceeding the emission 

limit. The analyzer monitoring requires MCC to take corrective action if the NOx

concentration exceeds 12.0 ppmv @15% O2, a conservative equivalent (assuming worst 

case operating scenario) of the NOx mass emission limit for the gas-fired engines (0.15 

grams per brake horsepower-hour) in condition II.A.1. 

This monitoring is important to assure that the facility complies with its annual emission 

caps in order for it to not trigger New Source Review permitting requirements. 
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Table 5. Monitoring in the title V permit 

Requirement Permit 

Condition # Monitoring Description Monitoring 

Condition # 

NOx and VOC 

facility-wide limits II.A.3. rolling 12-month emission calculation II.C.1. 

NOx and VOC 

short term limits 

II.A.1 and 

II.A.2 

portable NOx analyzer 

(quarterly) 

II.C.2. 

through 

II.C.4. 

annual performance testing II.C.5. 

5. Use of All Credible Evidence

Determinations of deviations, continuous or intermittent compliance status, or violations 

of the permit are not limited to the testing or monitoring methods required by the 

underlying regulations or this permit; other credible evidence (including any evidence 

admissible under the Federal Rules of Evidence) must be considered by the source and 

EPA in such determinations. 

6. EPA Authority

Title V of the Clean Air Act requires that EPA promulgate, administer, and enforce a 

Federal operating permits program when a State does not submit an approvable program 

within the time frame set by title V or does not adequately administer and enforce an 

EPA-approved program. On July 1, 1996, EPA adopted regulations codified at 40 CFR 

Part 71 setting forth the procedures and terms under which the Agency would administer 

a Federal operating permits program. 61 Fed. Reg. 34202. These regulations were 

updated on February 19, 1999, to incorporate EPA's approach for issuing Federal 

operating permits to covered stationary sources located in Indian country. 64 Fed. Reg. 

8247. 

As described in 40 CFR 71.4(a), EPA will implement a Part 71 program in areas where a 

State, local, or Tribal agency has not developed an approved Part 70 program. Unlike 

States, Indian Tribes are not required to develop operating permits programs, though EPA 

encourages Tribes to do so. See, e.g., Indian Tribes: Air Quality Planning and 

Management, 63 Fed. Reg. 7253 (Feb. 12, 1998) (also known as the Tribal Authority 

Rule). Therefore, within Indian country, EPA believes it is generally appropriate that 

EPA administers and enforces a Part 71 Federal operating permits program for stationary 

sources until Tribes receive approval to administer their own operating permits programs. 

MCC is located within the boundaries of the Morongo Reservation. Consequently, 

jurisdiction over the source lies with the Morongo Tribe and with EPA. Because the 

Tribe does not have an approved Part 70 program, EPA is issuing the permit under its 
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Part 71 authority. 

7. Endangered Species Act

Pursuant to Section 7 of the Endangered Species Act (ESA), 16 U.S.C. § 1536, and its 

implementing regulations at 50 C.F.R. Part 402, EPA is required to ensure that any action 

authorized, funded, or carried out by EPA is not likely to jeopardize the continued 

existence of any Federally-listed endangered species or threatened species or result in the 

destruction or adverse modification of such species’ designated critical habitat. The title 

V permit EPA is issuing to MCC does not authorize the construction of new emission 

units, or emission increases from existing units, nor does it otherwise authorize any other 

physical modifications to the facility or its operations. Therefore, EPA has concluded 

that the issuance of this permit will have no effect on listed species or their critical 

habitat. 

8. Public Participation

a. Public Notice. 

As described in 40 C.F.R. § 71.11(a)(5), all Part 71 draft operating permits shall 

be publicly noticed and made available for public comment. The public notice of 

permit actions and public comment period is described in 40 C.F.R. § 71(d). 

 There is a 30-day public comment period for actions pertaining to a draft permit. 

Public notice will be given for this draft permit by mailing a copy of the notice to 

the permit applicant, the Morongo Band of Mission Indians, the California Air 

Resources Board, and the South Coast Air Quality Management District. A copy 

of the notice will also be provided to all persons who have submitted a written 

request to be included on the mailing list. Public notice will also be published in 

the Desert Sun newspaper. 

b. Opportunity for Comment 

Members of the public may review a copy of the draft permit prepared by EPA, 

this statement of basis for the draft permit, the application, and all supporting 

materials submitted by the source at the address listed in Section 8.e, below. 

Copies of the draft permit and statement of basis can also be obtained from EPA’s 

website (http://www.epa.gov/region9/air/permit/r9-permits-issued.html), or by 

contacting Roger Kohn at the EPA address, phone number, or email address listed 

in Section 8.e, below. All documents will be available for review at the EPA 

Region 9 office indicated in Section 8.e. below, during regular business hours. 

If you believe that any condition of the draft permit is inappropriate, you must 

raise all reasonably ascertainable issues and submit all arguments supporting your 

position during the 30-day public comment period. Any supporting documents 

must be included in full and may not be incorporated by reference, unless they are 

already part of the administrative record for this permit or consist of tribal, state 
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or federal statutes or regulations, or other generally available referenced materials. 

All comments received during the public comment period and all comments made 

during any public hearing will be considered in arriving at a final decision on the 

permit. The final permit is a public record that can be obtained by request. A 

statement of reasons for changes made to the draft permits and responses to 

comments received will be sent to all persons who commented on the draft 

permit. 

c. Opportunity to Request a Hearing 

Any person may submit a written request for a public hearing to Roger Kohn, at 

the address listed in Section 8.e., below, by stating the nature of the issues to be 

raised at the public hearing. EPA shall hold a public hearing if EPA finds, on the 

basis of requests, a significant amount of public interest in the draft permit. If a 

public hearing is held, EPA will provide public notice of the hearing and any 

person may submit oral or written statements and data concerning the draft 

permit. 

d. Mailing List 

If you would like to be added to our mailing list to be informed of future actions 

on this or other CAA permits issued in Indian Country, please send your name 

and address to Roger Kohn at the address listed below. 

e. Contact Information

Roger Kohn (AIR-3) 

U.S. Environmental Protection Agency, Region IX 

75 Hawthorne St. 

San Francisco, CA 94105 

telephone: (415) 972-3973 

e-mail: kohn.roger@epa.gov