SACRAMENTO METROPOLITAN 

October 1, 2015 

Gerardo Rios 

Chief, Permits Office 

U.S. EPA, Region IX, Mail Stop AIR-3 

75 Hawthorne Street 

San Francisco, CA 94105 

Subject: Clarifications for Rule 203- Prevention of Significant Deterioration 

Dear Mr. Rios, 

Larry Greene 

AIR POLLUTION CONTROL OFFICER 

On July 20, 2011 , the Environmental Protection Agency (EPA) finalized State Implementation 

Plan approval of Sacramento Metropolitan Air Quality Management District (District) Rule 203 -

Prevention of Significant Deterioration. This letter is intended to clarify the District's position 

concerning the application of the PM2.5 Significant Impact Levels (Sils) and the PM2.5 Significant 

Monitoring Concentration (SMC) in the District's PSD program in light of the January 22, 2013, 

decision by the U.S. Court Appeals for the District of Columbia (Court) in Sierra Club v. EPA, 

705 F.3d 458. 

Clarification Regarding PM2.5 Issues: 

In Sierra Club v. EPA, the Court granted a request from EPA to vacate and remand to EPA the 

portions of two PSD rules (40 CFR 51 .166(k)(2) and 40 CFR 52.21 (k)(2)) addressing the Slls 

for PM2.5 so that EPA could voluntarily correct an error in these provisions. The Court also 

vacated the parts of these two PSD rules (40 CFR 51.165(i)(5)(i)(c) and 40 CFR 

52.21 (i)(5)(i)(c)) establishing a PM2.5 SMC, finding that EPA was precluded from using the PM2.5 

SMC to exempt permit applicants from the statutory requirement to compile and submit 

preconstruction monitoring data as part of a complete PSD application. On December 9, 2013, 

revisions to 40 CFR 51 .166 and 52.21 were published in the Federal Register to remove the 

affected provisions from the PSD regulation, effective as of that date 1. 

To implement the PSD permitting program under the Clean Air Act, the District adopted Rule 

203, which incorporated 40 CFR 52.21 by reference (with certain exceptions and revisions), as 

in effect on January 27, 2011, into the rule. As a result, District Rule 203 includes the vacated 

provisions described above as part of the SIP revision submitted to EPA for approval. EPA 

therefore requested clarification from the District concerning its interpretation of Rule 203 to the 

extent that it incorporates by reference the provisions at 40 CFR 52.21 (k)(2) and 40 CFR 

52.21 (i)(5)(i)(c) that were in effect on January 27, 2011. 

I am writing to clarify that the District interprets and intends to implement the PSD program in a 

manner consistent with the Court's decision in Sierra Club v. EPA. EPA's subsequent revisions 

to its PSD regulations consistent with that decision, and certain EPA statements included in the 

preamble of the 2010 final rule that had added section 52.21 (k)(2) to the federal regulations. 

1 78 Fed. Reg. 73698 

777 12th Street, 3rd Floor I Sacramento, CA 95814-1908 

91 6/87 4-4800 I 91 6/87 4-4899 fax 

www.airquality.org 
Clarifications for Rule 203 - Prevention of Signification Deterioration 

October 1 , 2015 

Page 2 

PM2.s Slls 

District Rule 203 incorporates by reference the federal regulation at 40 CFR 52.21 (k)(2) that 

was in effect on January 27, 2011, which established Slls for PM2.5 and read as follows: 

(k)(2) Significant impact levels. For purposes of PM2.5, the demonstration required in 

paragraph (k)(1) of this section is deemed to have been made if the emissions increase 

from the new stationary source alone or from the modification alone would cause, in all 

areas, air quality impacts less than the following amounts: 

Pollutant Averaging Class I Class II Class Ill 

time area area area 

PM2.5 Annual 0.06 IJg/m;;s 0.03 IJg/m;;s 0.3 IJg/m;;s 

24-hour 0.07 IJQ/m3 1.2J.J_g/m3 1.21Jg/m3 

Paragraph (k)(1) requires that sources applying for a new PSD permit demonstrate that any 

allowable emission increases from the proposed source or modification, in conjunction with all 

other applicable emissions increases or reductions, will not cause or contribute to a violation of 

any NAAQS or any applicable increment (40 CFR 52.21(k)(1)). 

In the preamble to the 2010 final rule adding the (k)(2) provision, EPA advised that, 

"notwithstanding the existence of a SIL, permitting authorities should determine when it may be 

appropriate to conclude that even a de minimis impact will 'cause or contribute' to an air quality 

problem and to seek remedial action from the proposed new source or modification2." In another 

passage of the preamble, EPA also observed that "the use of a SIL may not be appropriate 

when a substantial portion of any NAAQS or increment is known to be consumed3." The Court's 

decision in Sierra Club v. EPA held that, contrary to these statements in the preamble, the text 

of the (k)(2) provision "does not give permitting authorities sufficient discretion to require a 

cumulative air quality analysis" under such circumstances4. 

Consistent with the Court's decision in Sierra Club v. EPA, EPA's subsequent revisions to its 

PSD regulations under that decision, and the statements by EPA in the preamble to the 2010 

final rule discussed above, the District does not interpret section 52.21 (k)(2), as incorporated by 

reference in District Rule 203. Consequently, section 52.21 (k)(2) does not preclude the District 

from exercising discretion to determine that an impact below the PM2.5 SIL values in section 

52.21 (k)(2) will nonetheless cause or contribute to an air quality problem and to seek remedial 

action from the proposed new source or modification. Such discretion is necessary to ensure 

adherence to the requirement of the Clean Air Act that a PSD project not cause or contribute to 

a violation of any NAAQS or any applicable increment. 

Based on this interpretation, the District affirms that it will not read section 52.21 (k)(2), as 

incorporated by reference in District Rule 203, as "safe harbor," but will exercise discretion to 

determine whether a particular application of the PM2.5 SIL values is appropriate when a 

substantial portion of the PM2.5 NAAQS or increment is known to be consumed. The District 

retains the discretion to require additional information from a permit applicant as needed to 

2 Prevention of Significant Deterioration (PSD) for Particulate Matter Less than 2.5 Micrometers (PM2.5)-

Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC), 75 Fed. 

Reg. 64,864, 64,892 (Oct. 20, 2010) 

3 ld. At 64,894 

4 703 F.3d at 464 
Clarifications for Rule 203 - Prevention of Signification Deterioration 

October 1, 2015 

Page 3 

assure that the source will not cause or contribute to a violation of any NAAQS or applicable 

increment pursuant to section 52.21 (k)(1 ). The District will consider the approach outlined in 

EPA's Guidance for PM2.5 Permit Modeling released by EPA on May 20, 2014 for determining 

the appropriate application of the PM2.5 Slls going forward. 

PM2.5 SMC 

Clean Air Act section 165(e)(2) requires PSD permit applicants to include PM2.5 monitoring 

data in their applications. Section 52.21 (i)(5)(i)(c) of the EPA regulations in effect in 2011 

authorized air districts to apply the SMC for PM2.5 and exempt applicants from the CAA section 

165(e)(2) monitoring requirements. District Rule 203 incorporated this requirement. However, 

consistent with the Court's decision in Sierra Club v. EPA vacating the PM2.5 SMC and EPA's 

subsequent revisions to its PSD regulations under that decision, the District affirms that it will 

not exercise this discretionary authority. Accordingly, the District will require all applicants 

requesting a PSD permit from the District, including those that have already applied for but have 

not yet received a permit, to submit ambient PM2.5 monitoring data in accordance with Clean 

Air Act requirements whenever proposed increases of direct PM2.5 emissions or any emissions 

of a PM2.5 precursor equal or exceed a significant amount under section 52.21 (b)(23). 

In summary, the District intends to implement the PSD program consistent with the Court's 

decision and EPA's December 9, 2013 revisions to the affected provisions of the PSD 

regulations, as well as EPA's statements in the 2010 preamble to the PM2.5 Slls rule regarding 

the appropriate use of PM2.5 SIL values. 

~ ~···--~~~~ Larry Greene 

Air Pollution Control Officer 

c. Carol Sutkus, CARB 

Kathrine Pittard, District Counsel 

Brigette Tollstrup 

Dave Grose