BAY AREA AIRQ,!dALITY MANAGEMENT

ALAMEDA COUNTY Tom Bates (Secretary) Scott Haggerty Jennifer Hosterman Nate Miley
CONTRA COSTA COUNTY John Gioia Mark Ross Gayle B. Uilkema
MARIN COUNTY Harold C. Brown, Jr.

NAPA COUNTY Brad Wagenknecht (Vice-Chairperson)

SAN FRANCISCO COUNTY Chris Daly Eric Mar Gavin Newsom SAN MATEO COUNTY Carol Klatt Carole Groom SANTA CLARA COUNTY Susan Garner Yoriko Kishimoto Liz Kniss Ken Yeager

SOLANO COUNTY James Spering
SONOMA COUNTY

Shirlee Zane Pamela TorHatt (Chairperson) Jack P. Broadbent EXECUTIVE OFFICER/APCO October 28, 2009

Deborah Jordan, Ph.D. Director, Air Division United States Environmental Protection Agency, Region IX 75 Hawthorne Street San Francisco, CA 94105-3901 Re: Guidance on "Appendix S"Non-AttainmentNSR Permitting for PM2.5 Sources During PM2.5 Transition Period Dear Dr. Jordan: I would like to thank you and your staffformeeting with me and my staffon September I0, 2009, to discuss how EPA's new PMz.s regulatory requirements will be implemented overthe coming months and years. Obtaining EPA's input on PMz.s implementation issues is a very big help to me and my staffin addressing these important Clean Air Act requirements going forward, and we greatly appreciate it. I would also like to request EPA's written concurrence with theproposed approach we discussed for the Districtto issue PM2.5permits that would satisfy the federal PMz.s Non-Attainment NSR permitting requirements under 40 C.F.R. Part 51, Appendix S ("Appendix S"), once the Bay Area is designated Non-Attainment for PMz.s (24-hour average). This approach would apply during the transition period betweenthe time the Bay Area's Non-Attainment designation becomes effective and the time that the District adopts its own District-specific PM2.5permit requirements and has them approved by EPA into the California State Implementation Plan ("SIP"). The approach we discussed would involve the District including 

### PMz.s permit conditions in the District Authorities to Construct ("ATCs") and Permits to Operate ("PTOs") that it issues under District Regulations 2-1 and 2-2. Although the District does not have provisions in those regulations that specifically address 

### PMz. 5, the District does have general authority under Regulation 2-1-403, "Permit Conditions", to impose any permit conditions reasonably necessary to ensure compliance with applicable District, California or federal requirements. The District could use this general authority to impose permit conditions that would ensure compliance with the PMz 5provisions ofAppendix S in the District ATCs/PTOs for sources with PM2 5 emissions that trigger Appendix S requirements. Ifappropriate PM2

### .s conditions were included to ensure compliance with those PMz.s requirements, then the District ATCs/PTOs could serve to satisfy the federal Appendix S PM25 Non-Attaimnent NSRpermitrequirements for those

939 ELLIS STREET • SAN FRANCISCO CALIFORNIA 94109 • 415.771.6000 • www.baaqmdgovsources. Such sources could then usc their District ATCs/PTOs, with the appropriate PM2.s conditions included, to demonstrate compliance with the NonAttainment NSRrequirements ofAppendix S, and would not need to obtain a separate federal Non-Attainment NSR permit from EPA to satisfy their federal PM2.s obligations. The District believes that this approach is authorized and appropriate under Califomia law, given the provisions ofDistrict regulations cited above. Including appropriate PM2 .5permit requirements necessary to satisfy the federal Appendix S requirements for PM2

_ 5 is clearly authorized under the plain language ofDistrict Regulation2-1-403, and the District's NSR regulatory program ofwhich Regulation 2-1-403 is apart is clearly authorized under California Health & Safety Code sections 42300 

### et seq. The District can therefore see no reason under California lawwhy it would not be able to include such conditions in the District ATCs/PTOs ifit will allow subject sources to use their District ATCs/PTOs to satisfy their federal Clean Air Act requirements. The Districtrequests EPA's concurrence that, as a matter offederal law, this approach would be effective and appropriate as a means for subject sources to satisfy their federal requirements for PM2.5 . Although the District ATCs/PTOs are state-law permits issued under California law, not federal permits, the District believes that it was EPA's intention in its PM2.5Implementation Rule that state-law permits issued under states' existing SIP-approved Non-AttainmentNSR permitting programs that include appropriate PM25requirements would satisfy the federal Appendix S requirements. 

### (See 73 Fed. Reg. 28321,28342 (May 16, 2008) ("[W]e believe that the majority ofstates have the legal authority to issue permits consistent with these (Appendix S] requirements under an existing SIP-approved permitting program.").) Moreover, District Regulation 2-1-403 is included in the Bay Area's current SIP-approved Non-Attainment NSRregulations 

### (see 64 Fed. Reg. 3850 (January 26, 1999) (approving District NSRregulations, including 2-1- 403)), so the authority under which the District would impose these conditions is SIP-approved, even though the District has not yethad a chance to finalize specific PM2.5 requirements for SIP approval. The Districttherefore believes that the District's state-lawpermits issued under District Regulation 2-1 and 2-2 could be effective to satisfy a source's federal Appendix S requirements, as long as such permits include appropriate PM2 .5conditions to ensure compliance with Appendix S's PM2.5 provisions. The District would greatly appreciate EPA's concurrence with the effectiveness of this proposed approach to allow subject sources to use their District ATCs/PTOs to satisfy their federal Appendix S Non-Attainment NSRpermittingrequirements during the PM2.5transition period. In the alternative, should EPA disagree that this would be an appropriate and legally effective approach to handling NonAttainment NSRpermitting for PM2

_ 5during the transitionperiod, the District would appreciate hearing EPA's disagreement and concerns. The District would appreciate EPA's response at EPA's earliest convenience so that the District can begin planning for processing and issuing ATCs/PTOs with appropriate PM25 provisions once the Bay Area's PM2

_ 5 (24-hour) Non-Attainment designation becomes effective.
939 ELLIS STREET • SAN FRANCISCO CALIFORNIA 94109 • 415.771.6000 • www.baaqmd.govThank you for your consideration ofthese important PM2.5 permitting issues, and thank you again for meeting with us on September 1 

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Sincerely, 

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# r-·-·**1-1"-1>~\)** P. Broadbent cutive Officer/APCO

cc: Brian Bunger, Esq. Nancy Marvel, Esq.

939 ELLIS STREET • SAN FRANCISCO CALIFORNIA 94109 • 415.771.6000 • www.baaqmd.zav