629EntlerAvenue, Suite15 Chico, C4 95928 (530) 332-9400 (530) 332-9417Fax

Gerardo Rios Chief, AirPermits Office (Air-3) EPA Region 9 75 Hawthorne Street San Francisco, CA 94105 April 8,

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# ----- W. JamesWagoner AirPollution Control Officer Robert McLaughlin Asst.AirPollution Control Officer

RE: Additional Clarifications for Rule 1107 -- Prevention ofSignificant Deterioration (PSD) Permits DearMr. Rios: On February 6, 2013, the California Air Resources Board (CARB) submitted for Environmental Protection Agency's (EPA) approval Butte County Air Quality Management District (District) Rule 1107

- Prevention of Significant Deterioration (PSD) Permits. The District provided clarification on the District's intent to implement the PSD program in correspondence to you dated November 13, 2014. This follow-up letter is intended to clarify the District's position concerning the application ofthe PM2.5 Significant Monitoring Concentration (SMC) in its PSD program in light ofthe January22, 2013 decisionbytheU.S. Court ofAppeals for the District of Columbia (Court) in Sierra Club v. EPA, 705 F.3d 458. In Sierra Club v. EPA, the Court granted a request from EPA to vacate and remand to EPA the portions oftwo PSD rules (40 CFR 51.166(k)(2) and 40 CFR 52.21(k)(2)) addressing the SILs 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 51.166(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 ofa 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 affectedprovisions from the PSD regulations, effective as ofthat date. 78 Fed. Reg. 73698. To implement the PSD permitting program under the Clean Air Act, the District adopted Rule 1107, which incorporated 40 CFR 52.21 by reference into the rule (with certain exceptions and revisions), as in effect on June 28, 2012. As advised by EPA Region 9, Rule 1107 excludes the vacated provisions for the PM2.5 SILs that were formerly at 40 CFR 52.21(k)(2). However, Rule 1107 includes the vacated provisions described above relating to the PM2.5 SMC as part ofthe SIP revision submitted to EPA for approval. Following the Court's decision in Sierra Club v. EPA, EPA requested clarification from the District concerning its interpretation ofRule 1107 to the extent that it incorporatesbyreference 40 CFR 52.21(i)(5)(i)(c). I am writing to clarify that the District interprets and intends to implement the PSD program in a manner that is consistent with the Court's decision in Sierra Club v. EPA and EPA's subsequent revisions to its PSD regulations consistent with that decision.Mr. Gerardo Rios April 8, 2015

PM2.s SMC District Rule 1107 incorporates by reference the federal regulation at section 52.21(i)(5)(i), which provides that the APCO may exempt a proposed major stationary source or major modification from the requirements ofparagraph (m) ofthis section, with respect to monitoring for a particular pollutant, if the emissions increase or net emissions increase is below the applicable SMC. Thus, this provision, specifically at section 52.21(i)(5)(i)(c), as incorporated by reference in Rule 1107, provides the District with the discretion to determine whether it is appropriate to apply the SMC for PM2 . 5 to exempt a permit applicant from the requirement to compile and submit preconstruction ambient monitoring data for PM2 .5 as part of a complete PSD application. Consistent with the Court's decision in Sierra Club v. EPA vacating the PM2.s SMC, the District affirms that it will not exercise its discretionary authority to use the PM2.s SMC in order to exempt PSD permit applicants from the requirement in Clean Air Act section 165(e)(2) that ambient monitoring data for PM2.s be included in applications subject to the PSD program for PM2 .5• Accordingly, the District will require all applicants requesting a PSD permit from the District, including those that have already applied for but which have not yet received the permit, to submit ambient PM2 . 5 monitoring data in accordance with Clean Air Act requirements when proposed increases ofdirect PM2 .5 emissions or any emissions of a PM2.s precursor equal or exceed a significant amount. In summary, the District intends to implement the PSD program consistentwiththe Court's decision. Ifyou have any questions orneed additional clarification regarding this correspondence, please contactmeat (530) 332-9400, extension 112. Sincerely,

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T:\Source Programs\PSD Pennitting\GHG SIP Revisions\Clarification letter for PM2.5 SMC 04-03-2015.docx