Prepared by: Matthew Baldwin

Air Quality Engineer

Approved by: David A. Valler, Jr.

Air Pollution Control Officer

FEATHER RIVER AIR QUALITY MANAGEMENT DISTRICT

STAFF REPORT

PROPOSED RULE:

REGULATION X RULE 10.10 PREVENTION OF SIGNIFICANT DETERIORATION
i

TABLE OF CONTENTS

Table of Contents.........................................................................................................................i

1.0 Executive Summary ........................................................................................................... 1

2.0 Discussion.......................................................................................................................... 1

3.0 Impacts of the New Rule .................................................................................................... 4

4.0 Environmental Review and Compliance ............................................................................. 5

5.0 Required Findings .............................................................................................................. 5

6.0 Comparison with Other Applicable Regulations and Requirements .................................... 6

7.0 Public Notice ...................................................................................................................... 6

ATTACHEMENT A: Proposed Text of Regulation X: Rule 10.10: Prevention of Significant 

Deterioration .............................................................................................................................. 1
Staff Report Page 1 of 6

Regulation X; Rule 10.10 Prevention of Significant Deterioration

1.0 EXECUTIVE SUMMARY

Prevention of Significant Deterioration (PSD) is a federal permitting program for new major 

stationary facilities and significant modifications to existing major facilities located in areas 

classified as attainment or in areas that are unclassifiable for any criteria air pollutant. As a 

District, we are more familiar with the Title V Federal Operating Permit Program which is form 

major sources of pollutants regardless of attainment status. Title V permits ultimately 

incorporate PSD permit requirements. The PSD permitting program is a pre-construction permit 

that is currently administered by EPA Region IX for both Sutter and Yuba Counties.

When Greenhouse Gases (GHG) were recently added as a regulated pollutant, new and 

modified major sources of GHG became subject federal permitting requirements. EPA Region 

IX could possibly have a significant increase in PSD permit applications throughout the state. 

The EPA staff could be overwhelmed with these new permit applications and the delay in 

processing them could be two years or more. Consequently, EPA is encouraging local air 

districts to take on PSD permitting responsibility for projects that occur within their jurisdiction. 

For an air district to take on PSD permitting, the district needs to adopt a PSD permitting rule 

that mirrors the federal requirements and have that rule approved by the Air Resources Board 

(ARB) and EPA for incorporation into the State Implementation Plan (SIP).

The most straightforward way for an air district to take on PSD responsibility is to adopt a rule 

that incorporates the federal requirements by reference (IBR). CAPCOA has developed a model 

rule in conjunction with EPA and ARB staff.

The Feather River Air Quality Management District (District) staff is proposing that the Board 

adopt this CAPCOA model rule with various options in the model rule tailored to the District’s 

specifics.

2.0 DISCUSSION

The federal PSD program is detailed in 40 Code of Federal Regulations (CFR) Part 52.21. The 

details of the PSD program are quite involved. Below are some of the generalizations as they 

apply to the District.

Who is subject to permitting?

A pre-construction PSD permit is required for any new major source or significant modification

of an existing major source of any air pollutant regulated under the Federal Clean Air Act; that is 

not a non-attainment pollutant. Currently in the District, the PSD pollutants include PM, PM10, 

Carbon Monoxide, Nitrogen Dioxide, Sulfur Dioxide, Lead, Fluorides, Sulfuric Acid Mist, Total 

reduced sulfur, Reduced sulfur compounds, Greenhouse Gases, and other industry specific 

pollutants, such as those from Municipal Waste Combustors.

 A major source is a facility that emits 250 tons per year of an applicable pollutant, except 

for GHGs which the facility must emit 100,000 tons per year in terms of Carbon Dioxide 

equivalent units (CO2e). There are 28 types of industries where a major source is 

defined as 100 tons per year of an applicable pollutant, with the same exception for 

GHGs. Only two of these 28 source types are likely to be constructed within the District; 
Staff Report Page 2 of 6

Regulation X; Rule 10.10 Prevention of Significant Deterioration

a fossil-fuel fired steam electric plant or a boiler of over 250 million British Thermal Units 

per hour heat input.

 A significant modification of an existing major source is defined as a modification with an 

increase of as much or more than 100 tons per year (TPY) of Carbon Monoxide, 15 TPY 

of PM10, 40 TPY of Nitrogen Dioxide or Sulfur Dioxide, 0.6 TPY of Lead, or 75,000 TPY 

of GHGs.

With the recent addition of GHG as a regulated pollutant that is subject to PSD regulation, there 

are possibly five facilities in the District that are classified as major sources because of their 

GHG emissions; Sutter Energy Center, Feather River Energy Center, Greenleaf Unit 1, 

Greenleaf Unit 2 / Yuba City Energy Center, Yuba City Cogeneration, and Recology Ostrom 

Road. However, these facilities will only have to obtain a PSD permit for GHG emissions if they 

undertake a modification that will increase their GHG emissions by at least 75,000 tons per year 

CO2e.

What are the primary requirements of a PSD permit?

There are two main requirements to be met before a PSD permit is issued; Best Available 

Control Technology (BACT) is employed, and an air quality impact analysis is conducted 

showing that the emissions increase from a source will not cause or contribute to an 

exceedance of a National Ambient Air Quality Standard (NAAQS) or impact Class I areas, such 

as National Parks.

BACT must be employed on each emissions unit that emits an applicable air pollutant in excess 

of the significant modification threshold for that pollutant. Because GHGs are a newly regulated 

pollutant, BACT for GHG has not been thoroughly developed. An example of a PSD source of 

GHGs would be a fossil-fueled boiler of about 200 million Btu/hr or more operating full time. In 

this case, BACT would likely result in a fuel efficiency requirement in order to minimize carbon 

dioxide emissions.

An air quality impact analysis can be a very rigorous analysis which compares the background 

concentration of a pollutant plus the potential to emit of the new emission unit(s) to the NAAQS 

on an hour-by-hour basis over the course of a year. In order to determine the background 

concentration of the pollutant, either a public monitoring site nearby which has collected three to 

five years of ambient data, or one year of site-specific monitoring is required. For site-specific 

monitoring, the pollutant concentration and weather data must be collected on an hourly basis. If 

there are other facilities with issued Authorities to Construct that have not begun operation at 

the time of the site monitoring, the potential to emit of these other facilities must be added to the 

background concentration.

If the air quality impact analysis shows an exceedance of the NAAQS, additional emission 

controls or operational limitations must be imposed to prevent the exceedance. If there is still 

concern that the NAAQS may be exceeded, then post-project air quality monitoring may be 

imposed on the applicant.

The federal regulations impose a maximum amount of concentration that a single source can 

increase the ambient air concentration regardless of whether a NAAQS is exceeded or not. This 

is called an ambient air increment and is different for each pollutant and is measured in 

micrograms per cubic meter.
Staff Report Page 3 of 6

Regulation X; Rule 10.10 Prevention of Significant Deterioration

There is no National Ambient Air Quality Standard or ambient air increment established for 

GHGs, therefore the air quality impact analysis is not required for GHGs. Rule 10.10 exempts 

the applicant from some of the air quality analyses for GHGs.

What are the possible benefits of the District taking on PSD responsibility?

For a source within the District that is planning a new major facility, or an existing major facility 

planning significant modification, the time to obtain a PSD permit from EPA under the current 

situation could take several years. If the District were to have PSD authority, then the permit 

process time would likely be much shorter.

When EPA is the permitting authority for a PSD permit, then the federal Fish and Wildlife 

Service and the National Marine Fisheries Service must be consulted regarding the Endangered 

Species Act (ESA) requirements because the issuance of the PSD permit is conserved a federal 

action. If the air district is the permitting authority, then this consultation is not required, although 

the source is still required to comply with applicable ESA requirements. However, such impacts 

are likely to be addressed through the California Environmental Quality Act (CEQA) by the lead 

agency.

Any appeals of a PSD permit issued by EPA are heard by the federal Environmental Appeals 

Board (EAB) in Washington, D.C. Appeals concerning a PSD permit issued by the District are 

heard by the District Hearing Board. When an air district is the permitting authority, appeals are 

handled locally with more scheduling flexibility.

The downside of the District taking on PSD responsibility is additional cost to the applicant for 

costs incurred by the District. A downside to the District will be the need to acquire the 

knowledgebase to administer the PSD permitting program. The timing of gaining PSD 

knowledge is uncertain since there are currently no new PSD facilities on the horizon.

Chapter 4.5, Protect California Air Act of 2003 Requirements:

In an effort to minimize the potential impact of federal NSR reform, the state legislature passed 

the Protect California Air Act of 2003 (SB288). The Act (CH&S Code § 42500 through 42507) is 

intended to minimize the impact of the relaxation of the federal new source review program on 

air quality in California. The Act prohibits districts from making revisions to their SIP approved 

NSR rules in existence on December 30, 2002 that would result in weakening their rules. These 

revisions include but are not limited to, revisions to rule applicability, changing the definition of 

modification so that NSR is not triggered or triggered at a higher level of emission increases, or 

relaxing BACT, air quality analysis, and public participation requirements. The Act does permit 

districts to deviate from these requirements under specified conditions.

The proposed Rule 10.11 meets this mandate. Rule 10.11 does not relax existing requirements 

to obtain a permit and undergo NSR analysis; does not relax the requirement to apply BACT to 

a new or modified emission unit; does not relax the requirements or thresholds for performing 

an air quality impact analysis as required by Rule 10.1 G; does not relax the requirements for 

monitoring, recordkeeping, and reporting; does not relax the requirement for regulating any air 

pollutant; and does not relax any requirement for public participation.
Staff Report Page 4 of 6

Regulation X; Rule 10.10 Prevention of Significant Deterioration

3.0 IMPACTS OF THE NEW RULE

FISCAL IMPACT

Currently, EPA does not charge any fees for processing a PSD permit, therefore Adoption of 

Rule 10.10 will have an additional fiscal impact on businesses that are proceeding with a new 

major source or a significant modification of an existing major source of an attainment pollutant, 

however, the District is not proposing a change to the fee structure already established by 

current District rules. A source applying for a PSD permit, however, would already be required 

to submit an application for an Authority to Construct through the established District process, 

so the only additional fees would be the actual expenditures in issuing the PSD permit based on 

a time and material basis. 

The actual labor hours required to process the PSD permit are estimated to be approximately 

the same as for processing a Title V permit.

Proposition 26, Supermajority Vote to Pass New Taxes and Fees (2010)

Section 2 (d) of Article XIII C, California Constitution reads:

“No local government may impose, extend, or increase any special tax unless 

and until that tax is submitted to the electorate and approved by a two-thirds 

vote. A special tax shall not be deemed to have been increased if it is imposed at 

a rate not higher than the maximum rate so approved.”

This rule does not impose any new taxes nor increase any existing taxes, as implementation of 

the program would be conducted under the existing fee structure of the District.

SOCIOECONOMIC IMPACT

California Health and Safety Code § 40728.5 requires, in part, that:

“Whenever a district intends to propose the adoption, amendment or repeal of a 

rule or regulation that will significantly affect air quality or emissions limitations, 

that agency shall, to the extent that data are available, perform an assessment of 

the socioeconomic impacts of the adoption, amendment, or repeal of the rule or 

regulation.”

However, districts with a population of less than 500,000 persons are exempt from the 

provisions of CH&S § 40728.5 (a). The District’s population is estimated to be approximately 

166,892, below the 500,000 person threshold. Therefore, a socioeconomic analysis for this 

rulemaking is not required.

COST EFFECTIVENESS OF A CONTROL MEASURE

California Health and Safety Code Section 40703 requires that all air quality districts consider 

and make public findings relating to the cost effectiveness of implementing an emission control 

measure.

The proposed rule does not implement an emission control measure and therefore is not subject 

to the cost effectiveness mandate. Staff does not anticipate an additional need for staff 

resources upon adoption of the rule.
Staff Report Page 5 of 6

Regulation X; Rule 10.10 Prevention of Significant Deterioration

4.0 ENVIRONMENTAL REVIEW AND COMPLIANCE

The proposed adoption of Rule 10.10 consists of implementing existing federal requirements. 

As the District has not exercised discretion by modifying federal requirements, it is ministerial in 

nature and the proposed adoption of Rule 10.11 is statutorily exempt from CEQA pursuant to 

Section 15268 of the state CEQA Guidelines.

5.0 REQUIRED FINDINGS

California Health and Safety Code Section 40727 (a) requires that prior to adopting or amending 

a rule or regulation, an air district’s board must make findings of necessity, authority, clarity, 

consistency, non-duplication and reference. The findings must be based on the following:

1. Information presented in the District’s written analysis, prepared pursuant to CH&S §

40727.2;

2. Information contained in the rulemaking records pursuant to CH&S § 40728; and

3. Relevant information presented at the Board’s hearing for the rule.

The table below describes the finding and the basis for making the finding.

Table 5.1

FINDING FINDING DETERMINATION

Necessity: The District must find that the 

rulemaking demonstrates a need exists for 

the rule or for its amendment or repeal. 

(CH&S § 40727 (b)(1))

Rule 10.10

It is necessary for the District to adopt the proposed 

rule in order to obtain approval from the EPA to issue 

PSD permits, and reduce any expected delay in 

issuing new PSD permits.

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 the rule. (CH&S §

47027(b)(2))

Rule 10.10

The District is authorized to adopt rules and 

regulations by CH&S § 40001, 40702, and 42300.

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. (CH&S § 40727(b)(3))

Rule 10.10

The District has reviewed the proposed rule and 

determined that they 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.

Consistency: The rule is in harmony with, 

and not in conflict with or contradictory to, 

existing statutes, court decisions, or state or 

federal regulations. (CH&S § 40727(b)(4))

Rule 10.10

The proposed rule does not conflict with and are not 

contradictory to existing statutes, court decisions, or 

state or federal regulations.

Non-Duplication: The District must find that 

either: 1) The rule does not impose the same 

requirements as an 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. (CH&S §

40727(b)(5)

Rule 10.10

The proposed rule incorporates by reference federal 

rules or regulations for permitting programs. The 

duplicative requirements are necessary in order to 

execute the powers and duties imposed upon the 

District.
Staff Report Page 6 of 6

Regulation X; Rule 10.10 Prevention of Significant Deterioration

FINDING FINDING DETERMINATION

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. (CH&S § 40727(b)(6))

Rule 10.10

The proposed rule is intended to duplicate existing 

law. References to statutes are noted where 

applicable.

6.0 COMPARISON WITH OTHER APPLICABLE REGULATIONS AND REQUIREMENTS

California Health and Safety Code Section 40727.2 requires districts to prepare a written 

analysis (may be in the form of a matrix) that identifies all existing federal air pollution control 

requirements, including, but not limited to, emission control standards constituting BACT, that 

apply to the same equipment or source type as the rule or regulation proposed for adoption or

modification by the District. In addition, the analysis shall identify any other District rule or 

regulation that applies to the same equipment or source type. 

Rule 10.10 has been prepared by CAPCOA to incorporate the federal requirements of PSD by 

reference.

7.0 PUBLIC NOTICE

The notice for this rule adoption was mailed to all permitted sources and a notice of the hearing 

was published in the Appeal Democrat on June 30, 2011.

A public workshop was held on July 12, 2011. A notice of the workshop was mailed to all 

permitted sources and interested parties. No members of the public attended the workshop. No 

comments were received.

The proposed rule was sent to the Air Resources Board and the Environmental Protection 

Agency on June 15, 2011. No comments were received from EPA or ARB.
ATTACHEMENT A:

PROPOSED TEXT OF REGULATION X: RULE 10.10: PREVENTION OF SIGNIFICANT 

DETERIORATION