Dear Mr. Rexroad:

LLC

Thank you for your letter to Gina McCarthy dated December 19, 2012, in which Avenal Power Center,

extension

(APC) requested that the U.S. Environmental Protection Agency (EPA) provide an 18-month

(PSD)

of the deadline for commencing construction under the Prevention of Significant Deterioration

February

permit for the Avenal Energy Project (AEP), pursuant to 40 CFR 52.2 1(r)(2). In

a letter dated 15, 2013, you provided more detailed information concerning the basis for your request,

believes

including

that

the

an

reasons why APC has been unable to commence construction on the AEP and why APC 18-month extension is necessary.

final

As you

on

mentioned

August

in your letters, the PSD permit that EPA issued for the AEP became effective and

construct

18, 2011, and the PSD regulations at 40 CFR 52.21(r)(2) provide that approval to

approval,

shall

if

become invalid if construction is not commenced within 18 months after receipt ofsuch

completed within

construction is discontinued for

a period of 18 months or more, or if construction is not

month period

a reasonable time. 40 CFR 52.21 (r)(2) further provides that EPA may extend the 18-

an extension of

upon a satisfactory showing that an extension is justified. APC submitted its request for

proposed

the final PSD permit’s deadline for commencing construction for the AEP with its

which APC

justification prior to February 18, 2013, i.e., 18 months after August 18, 2011, the date on received

a final PSD permit and approval to construct the AEP.

resulting

APC’s letters explained that it has been unable to commence construction ofthe AEP due to uncertainty

the Ninth

from

Circuit

the

Court

litigation challenging EPA’s PSD permit decision for the AEP that is pending before

involved with

of Appeals. You provided information concerning the procedural background

the AEP

this permit decision, including EPA’s decision to grandfather the permit application for

one year

from

after

demonstrating compliance with new PSD requirements that became applicable more than

the petitions

the PSD permit application was determined to be complete. You explained that although

case had been

for review were filed with the NinthCircuit Court ofAppeals by November 2011, and the

includes

fully briefed by May 2012, the Court has not yet issued

a decision in the case, which

before

a challenge to EPA’s decision to grandfather the PSD permit for the AEP, and oral argument the Court has not yet been scheduled. While APC is not precluded from commencing

continuous,

construction by the litigation per Se, your letters explained that APC cannot enter into either

a

financial, contractual,

physical onsite construction program or an irrevocable contract for such

a program due to

ongoing design, and other constraints associated with thç uncertainty resulting from the

upon

litigation. You also stated that APC would be unable to commence construction immediately

a favorable decision from the Court in the challenge to EPA’s PSD permit decision for the AEP

Printed on Recycled Paper
I. PERMIT EXPIRATION

As provided in 40 CFR § 52.2 1(r), this PSD Permit shall become invalid if

construction:

A. is not commenced (as defined in 40 CFR § 52.2 1(b)(9)) within 36 months after

the approval takes effect; or

Please note that all ofthe other conditions ofthe PSD permit, including Conditions I.B and I.C, are

unchanged, and remain in place and effective as written.

We have enclosed a copy of a document providing a more detailed discussion ofthe background and

analysis for EPA’s decision. Please do not hesitate to contact Gerardo Rios, Chief ofthe Region 9 AirPermits Office, at (415) 972-3974, if you have any questions concerning this response.

Sincerely,

Deborah Jord

Director, Air Division

Enclosure

cc (w/encl.): David Warner, SJVUAPCD

Michael Tolistrup, CARB