United States E nvironmental Protection Agency

Region IX Air Division

Technical Support Document

for

EPA's Notice of Proposed Rulemaking

for Revisions to t he

California State Implementation Plan

Ventura County Air Pollution Control District

Proposed Removal of Rule 2 6. 1 0

– New Source Review

– Prevention of Significant

Deterioration Proposed Approval of Rule 26.13

– New Source Review

– Prevention of Significant Deterioration (P SD)

Prepared by: Ya

- Ting (Sheila) Tsai

Reviewed by

Gerardo Rios

September , 201 6I. INTRODUCTION

This technical support document (TSD) addresses a proposed action by the Environmental

Protection Agency (EPA) on California’s Clean Air Act (CAA or Act) State Implementation Plan (SIP) for the Ventura County Air Pollution Control District (VCAPCD or District). This

action concern s certain preconstruction permitting requirements, also called “New Source Review” or “NSR”, in title I of the Act and the implementing regulations at title 40 of the Code of Federal Regulations (CFR) part 51, subpart I. Specifically, this TSD will address those NSR requirements found in part C of title I of the Act, and t he implementing regulations at 40 CFR 51.166, governing the requirement for SIPs to establish preconstruction permitting programs for the prevention of significant deterioration of air quality (PSD) in areas designated as

“attainment” or “unclassifiable” f or the national ambient air quality standards (NAAQS). The PSD program requirements under part C apply to “major stationary sources” and “major modifications”, as those terms are defined in 40 CFR part 51, subpart I, at sources that would be

located within areas designated as “attainment” or “unclassifiable”. The PSD requirements apply to all “regulated NSR pollutants,” except those pollutants for which an area has been designated

as “nonattainment.” 1

II. SIP REVISION SUBMITTAL

The VCAPCD currently do es not have a SIP

- approved PSD preconstruction review and permitting program ; the EPA currently implements the PSD program within the District pursuant

to 40 CFR 52.21

. T he California Air Resources Board ( C ARB) submitted two rule actions from

the VCAPCD to the EPA as a proposed revision to California’s SIP for the District . The C ARB is the California governor’s designee for submitting official proposed revisions to the California

SIP to the EPA for approval

. The C ARB and the District have requested to add VC APCD Rule

26.13 to the California SIP and to remove VCAPCD Rule 26.10 from the SIP. The EPA’s approval of District Rule 26.13 into the California SIP and its concurrent removal of Rule 26.10

from the SIP would transfer authority and responsibility for impl ementation of the PSD program

from the EPA to the VCAPCD for sources within the VCAPCD’s jurisdiction. Table 1 below provides relevant information concerning these two rule actions taken by the District.

Table 1

– Submitted Rule Action s

Rule # Rule Title A ction Action Date Submitted

Date

26.10 New Source Review

– Prevention of Significant Deterioration Repealed 6/28/2011 8/23/2011

1 This action does not address part D of title I of the Act, and the implementing regulations at 40 CFR 51.165, which contain the requirements for areas designated “nonattainment” for a NAAQS. The requirements under part D and its implementing regulations, commonly referred to as “nonattainment NSR,” apply to nonattainment pollutants at major stationary sources and major modifications at sources located in nonattainment areas. The EPA has previously approved VCAPCD Rule 26 to satisfy these requirements (75 FR 1284 ( January 11, 2010 )). This action also does not address the CAA requirements governing the construction and modification of minor stationary sources and minor modifications at major sources, to assure that the NAAQS are achieved and/or maintained. These preconstruction prog ram requirements are commonly referred to as “minor NSR” (see 40 CFR 51.160

- 51.164).1 Rule # Rule Title A ction Action Date Submitted

Date

26.13 New Source Review

– Prevention of Significant Deterioration (PSD) Revised 11/10/2015 3/11/2016

Completeness Determination

With respect to procedures, CAA sections 110(a) and 110(l) require that revisions to a SIP be adopted by the State after reasonable notice and public hearing. The EPA has promulgated specific procedural requirements for SIP revisions in 40 CFR part 51, s ubpart F. These requirements include publication of notices by prominent advertisement in the relevant geographic area, a public hearing on the proposed revisions, a public comment period of at least 30 days, and an opportunity for a public hearing. Based on our review of the public process

documentation included in the submittal s listed in Table 1, we find that the V CAPCD has provided sufficient evidence of public no tice and opportunity for comment and public hearings prior to adoption and submittal of these rule action s to the EPA. On the dates listed in Table 2,

the EPA determined that the SIP submittals for the rule action s listed in Table 1 conformed to the completeness criteria in 40 CFR p art 51, a ppendix V, and therefore were complete.

Table 2

– Completeness Date s for SIP Submittals

Rule # Rule Title Completeness

Date

26.10 New Source Review

– Prevention of Significant Deteriorati on 2 / 23 /2012

26.13 New Source Review

– Prevention of Significant Deterioration (PSD) 4/19/2016

Existing Rules

The EPA approved Rule 26.10, New Source Review

– Prevention of Significant Deterioration

into the V CAPCD portion of the California SIP on December 7, 2000 (65 FR 76567)

. However,

the EPA’s approval of this rule into the California SIP did not approve a PSD program for the

VCAPCD. Rather, Rule 26.10 simply confirm ed that the new major sources and major modifications as defined in 40 CFR 52.21(b) must comply with the applicable r equirements for federal PSD permitting i n 40 CFR 52.21, and provide d that any such source must obtain separate permits from the District and the EPA.

On June 28, 2011

, the VCAPCD adopted Rule 26.13, New Source Review

– Prevention of Significant Deterioration (PSD) with the intent to assume PSD permitti ng responsibility for

sources located in Ventura County upon the EPA’s SIP approval of the rule

. On the same date,

the VCAPCD repealed local PSD Rule 26.10 for purposes of State and local law . I n a letter dated August 4, 2011, the VCAPCD submitted a request to the C ARB that Rule 26.13 be added to the Ventura County portion of the SIP and that Rule 26. 10 be removed from the SIP . On August 23, 2011, the C ARB submitted a proposed SIP revision to the EPA requesting the approval of Rule

26.13 into the SIP and the r em oval of Rule 26.10 from the SIP

.2 However, EPA staff subsequently determined that the version of Rule 26.13 adopted by the

District on June 28, 2011 contained certain deficiencies and could benefit from clarifying changes , and notified the District about these deficiencies

. To address these deficiencies, the

VCAPCD adopted revisions to Rule 26.13 on November 10, 2015

, and the C ARB submitted the

revised version of this rule to the EPA for SIP approval on March 11, 2016

. Accordingly

, the

EPA’s proposed action addresses the current version of Rule 26.13

, as revised on N ovember 10,

2015 and submitted to the EPA on March 11, 2016

. If the EPA approves Rule 26.13, the EPA

will add revised Rule 26.13 to the SIP and Rule 26.10 will be removed from the SIP.

III. BACKGROUND

CAA sections 110(a)(2)(C) and 165 establish the general statutory requirements for the PSD program. As noted above, 40 CFR 51.166 sets forth the EPA’s regulatory requirements for SIP

approved PSD programs. The PSD program requirements appl y to any regulate d NSR pollutant (as defined in 40 CFR 51.166), except for pollutants designated nonattainment for a NAAQS. The CAA defines “nonattainment areas” as air quality planning areas that exceed the primary or secondary NAAQS for a given criteria pollutant (or tha t contribute to ambient air quality in a nearby area that does not meet the NAAQS). In some instances the emission increases of a particular pollutant may be subject to bot h the PSD program and the nonattainment NSR program. For example, nitrogen oxides (N O
x ) from a major stationary source in an area designated as attainment for the nitrogen dioxide (NO 2 ) NAAQS and nonattainment for the ozone NAAQS could be subject to both permitting programs because, in such cases, NO
x would be a PSD pollutant as well as a precursor to ozone, a nonattainment pollutant.

The applicability of PSD program requirements to a particular source must be determined in

advance of construction or modification of the source and is pollutant

- specific. The primary

criterion for PSD progr am applicability is whether the proposed project is sufficiently large (in terms of its emissions) to be a major stationary source or major modification, terms which are

defined as described below.

Section 169 of the CAA specifies the emissions threshold , depending on source category, that is used to determine whether a source is a “major emitting facility” and subject to PSD program review . For PSD purposes, a “major stationary source” is any source belonging to a specified list of 28 source categories 2 that emits or has the potential to emit (PTE) 100 tons per year (tpy) or more of any air pollutant subject to regulation under the CAA, or belonging to any other source category that emits or has the PTE for such pollutants in amounts equal to or greater t han 250 tpy. A new source with a PTE at or above the applicable “major stationary source threshold” is also subject to the PSD permitting program for any other regulated NSR pollutant emitted in “significant” amounts. When the EPA has not set a significance level for a pollutant, the PSD

program applies to an increase of the regulated pollutant in any amount (that is, in effect, the significance level is treated as zero).

The PSD permitting program review also applies to existi ng major stationary sources that undertake a “major modification,” which occurs when: (1) there is a physical change, or change

2 See 40 CFR 51.166(b)(1)(i) for the 28

- source category list.3 in the method of operation, at a “major stationary source;” (2) the change results in a “significant” emissions increase of a po llutant subject to PSD regulation (at or above the significance level that the EPA has set for the pollutant); and (3) there is a “significant net emissions increase” of a pollutant subject to PSD regulation that is at or above the significance level (as d efined in 40 CFR 51.166(b)(23)).

The PSD permitting program also applies to certain greenhouse gas (GHG) emissions sources when the emissions are “subject to regulation,” as defined in 40 CFR 51.166(b)(48).

Sources subject to PSD permit program review must demonstrate compliance with a number of approval criteria to qualify for a PSD pre

- construction permit. The most significant of these requirements are the application of the best available control technology (BACT) to the source and the requirement th at the source demonstrate that it will not cause or contribute to a violation of the NAAQS or applicable PSD increments.

IV. RULE REVISION SUMMARIES

Request for Removal of VCAPCD Rule 26.10

, New Source Review

– Prevention of Significant

Deterioration

As not ed above, the EPA’s prior approval of VCAPCD Rule 26.10 into the California SIP did not approve a PSD program for the VCAPCD into the SIP. Rule 26.10 simply confirms that new major sources and major modifications as defined in 40 CFR 52.21(b) must comply w ith the applicable requirements for federal PSD permitting program in 40 CFR 52.21, and provides that

any such source must obtain separate permits from the District and the EPA. Because the EPA would no longer be the permitting authority within Ventura County as referenced in Rule 26.10

once the EPA approves VCAPCD’s Rule 26.13 into the SIP, the District and the C ARB have requested the removal of Rule 26.10 , which has already been repealed fo r purposes of State and local law, from the SIP.

Request for Approval of VCAPCD Rule 26.13

, New Source Review

– Prevention of Significant Deterioration (PSD)

Rule 26.13

, as revised on November 10, 2015 and submitted to the EPA by the C ARB on March 11, 2016, applies to major sources and major modifications emitting pollutants designated as

attainment or unclassifiable with in the VCAPC D, as well as other regulated NSR pollutants. Consistent with the requirements for a PSD program, Rule 26.13 does not apply to nonattainment pollutants. Currently, the District is classified as either attainment or unclassifiable for the NAAQS for particulate matter 10 micrometers or less in diameter ( PM 10 )

, particulate matter 2

. 5

micrometers or less in diameter ( PM 2.5 ) , NO 2 , sulfur dioxide ( SO 2 )

, carbon monoxide ( CO ) , and

lead

, and nonattainment for the ozone NAAQS (including NOx and volatile organic compounds ( VOC ) as ozone precursors)

.

Rule 26.13 essentially incorporates by reference the federal PSD program as codified in 40 CFR 52.21, which is the Federal Implementation Plan (FIP) used by the EPA to implement the required PSD program in areas that do not have a SIP

- approved PSD program. VCAPCD Rule4 26.13 is composed of five sections:

A. Purpose

B. Applicability

C. Incorporation by Reference

D

. Requirements

E

. Public Participation

Section A indicates that the intent of th e rule is to adopt the PSD program by incorporating the federal PSD program by reference. Section B contains an applicability pro vision that establishes that the rule is applicable to any source (and source owner and operator) subject to any requirement in 40 CFR 52.21 as incorporated into Rule 26.13 . With some minor revisions and exceptions, Section C incorporates by reference the provisions of 40 CFR 52.21 as in effect on September 1, 2015

. Section D lists certain requirements necessary to administer the PSD program. And, Section E includes public notice and comment procedures for issuing PSD permits.

V. EPA EVALUATION OF DISTRICT RU LE 26.13

We reviewed Rule 26.13

, : New Source Review

– Prevention of Significant Deterioration (PSD)

, as revised on November 10, 2015 and submitted to the EPA by the C ARB on March 11, 2016, to ensure that it meets the requirements of title I of the Act, specifically part C (sections 160 through 169B), and current implementing regulations at 40 CFR 51.166. The EPA has condensed a discussion of the approval criteria contained in these regulati ons in this TSD, which describes the basis for our proposed action on the rule submittals. 3

The Act requires all states to submit a PSD permit program consistent with the requirements of

40 CFR 51.166. The EPA’s more detailed evaluation of VCAPCD Rule 26 .13 and how it meet s the requirements for the PSD program is included in the attached document, Evaluation of CA

PSD Rules and VCAPCD PSD Rule (see Atta chment 1). In general, VCAPCD Rule 26.1 3 meet s the requirements of 40 CFR 51.166 by incorporating by re ference the specific provisions of 40 CFR 52.21 that are necessary to implement a state PSD program. As mentioned above, 40 CFR

52.21 contains the requirements of the FIP used by the EPA to implement the required PSD program in areas that do not have a SIP

- approved PSD program. The EPA considers the provisions of 40 CFR 52.21 to generally be consistent with the requirements of 40 CFR 51.166. Therefore, only those provisions of these ru les that warrant additional review are discussed

below.

3 As discussed above, the VCAPCD has repealed District Rule 26.10 for purposes of State and local law, and t he

VCAPCD and the C ARB have requested that the EPA remove this rule from the SIP. As part of this action, the EPA is proposing to remove VCAPCD Rule 26.10 from the SIP upon our approval of VCAPCD Rule 26.13 into the SIP. Rule 26.10 merely reiterates the ap plicability of the requirements of 40 CFR 52.21 to major sources and major

modifications in attainment areas within the District in the absence of a SIP

- approved PSD program for the District.

With the EPA’s approval of the District’s Rule 26.13 into the SI P, the requirements of the PSD FIP at 40 CFR 52.21
would no longer be applicable. Thus, the removal of Rule 26.10 from the SIP would be appropriate at that time

.5 V.1 Exclusions

VCAPCD Rule 26.13 excludes the following paragraphs from its incorporation by reference of

40 CFR 52.21:

• (a)(1)

– Plan disapproval

• (b)(55

- 58) and (cc)

– equipment replacement program (ERP) provisions which were vacated by the United States Circuit Court of Appeals for the District of Columbia on March 17, 2006

• (g)

– Redesignation

• (i)(1)(i

- v, ix

- x) and (i)(6

- 8)

– Exemptions

• (p)(6

- 8)

– Class I variances by the Governor

• (q)

– Publ ic participation

• (s)

– Environmental impact statements

• (t)

– Disputed permits or redesignations

• (u)

– Delegation of authority

• (v)

– Innovative control technology

• (w)

– Permit rescission

• (f), (x), (y), and (z)

– “[Reserved]”

The EPA has reviewed these exc lusions and concurs that these excluded paragraphs are not necessary to implement a state PSD program

. We note, however, that 40 CFR 51.166(q) specifies public participation requirements for SIP

- approved PSD permitting program s that are similar to the p ublic participation requirements for the federal PSD program found at 40 CFR

52.21 (q)

. To address the requirements in 40 CFR 51.166(q)

, VCAPCD Rule 26.13 specifies

certain public participation requirements applicable to the District’s PSD permit program . T he public participation requirements for SIP

- approved PSD permitting programs are further

discussed in Section V .4 of this TSD.

V.2 Revised Terms and Definitions

1) Administrator

The VCAPCD revises the term “administrator” incorporated by reference from 40 CFR 52.21, as

follows:

• the term “administrator” is defined to mean “USEPA administrator” in 40 CFR 52.21(b)(17), (b)(37)(i), (b)(43), (b)(48)(ii)(c), (b)(50)(i), (b)(51), (l)(2), and (p)(2)

, and otherwise the term “administrator” is defined to mean “Air Pollution Control Officer”, as defined in other District rules.

Because 40 CFR 52.21 was written to provide a framework for the EPA to administer the PSD program in areas that do not have a SIP

- approved PSD program, the term “Administrator” as

used in sec tion 52.21 refers to the EPA Administrator. Upon the EPA’s approval of Rule 26.13

, the District will be administering the PSD program

, but certain authorities are retained for the EPA Administrator, per 40 CFR 51.166. Therefore, the District revisions desc ribed above are6 intended to differentiate between those provisions that will apply to the District as the entity that will administer the PSD program and those that will continue to refer to the EPA. We find these revisions acceptable.

2) References to 40 CF R 52.21(q)

As noted above, Rule 26.13 excludes from its incorporation by reference 40 CFR 52.21(q), the public participation provision that appl ies when the EPA is the PSD permitting a uthority . 40 CFR 52.21(q), in turn, directs the EPA to follow the appli cable procedures of 40 CFR part 124

when the EPA processes PSD permit applications. In place of the federal public participation procedures applicable to the EPA under 40 CR 52.21(q) and 40 CFR part 124

, R ule 26.13 specifies public participation procedures applicable to the District’s PSD program . However, the

VCAPCD’s rules incorporate by reference paragraphs (l)(2) and (p)(1) of 4 0 CFR 52.21 and

cross

- reference 40 CFR 52.21(q). Accordingly, the District PSD rule change s the cross

references in the incorporated 52.21 provisions from “paragraph (q) of this section” to “the public notice and comment provisions of Rule 26.13 Section E. ” We find these revisions acceptable.

V.3 Additional Requirements

Within the “Requirement s” section of Rule 26.13 Section D

, the District has included additional rule provisions

, beyond the language incorporated from 40 CFR 52.21

, that the District find s necessary and appropriate to include in its PSD program. These provisions include:

• PSD permits are required pursuant to Rule 26.13 prior to beginning actual construction of a new major stationary source, a major modification, or a plant wide applicability limitation (PAL) major modification, as defined in 40 CFR 52.21(b);

• The air pollu tion control officer (APCO) shall require compliance with Rule 26.13 prior to issuing a PSD permit;

• Applicants are required to pa y the applicable fees specified;

• The APCO is required to provide written notice of any permit application for a proposed major stationary source or major modification to the USEPA administrator under the required timeline;

• The APCO is required to determine whether an application is complete and provide notification under the required timeline;

• Greenhouse gas emissions are not subject to the requirements of subsections (k) or (m) of 40 CFR 52.21; and

• Except for power plants licensed by the California Energy Commission and upon the District’s discretion, the PSD requirements of Rule 26.13 shall be incorporated into7 and made enforceable through Authority to Construct permits and Permits to Operate according to the VCAPCD’s permitting requirements.

The EPA has reviewed these requirements and determined they are consistent with the requirements of 40 CFR 51.166.

In addition, the District has not excluded from its incorporation by reference of 40 CFR 52.21 certain provisions that are not required by or directly analogous to provisions in 40 CFR 51.166. These provisions include:

• A definition of Reasonably available control tech nology (RACT) as defined in 40 CFR 51.100( o) (language incorporated from 40 CFR 52.21(b)(54);

• Provisions concerning the expiration of approval to construct under certain circumstances, including where construction has not commenced within 18 months

after receipt of PSD approval, unless an extension of time is granted (language incorporated from 40 CFR 52.21( r )( 2 ) )

• Provisions concerning air quality monitoring data for an air quality analysis for any PSD permit application that became complete (except as to certain requirements) between June 8, 1981 and February 9,1982 or between December 1, 1988 and August 1, 1989 (l anguage incorporated from 40 CFR 52.21(m)(1)(v) and (vii); and

• A provision relating to air quality monitoring of PM 10 under paragraphs (i)(11)(i) and (ii) of 40 CFR 52.21 (language incorporated from 40 CFR 52.21(m)(1)(viii) )

.

We find the inclusion of these provisions in the District’s PSD program to be acceptable . We note that with respect to the final District rule p rovision discussed above, the federal rule at 40 CFR 52.21(m)(1)(v i ii) appears to be obsolete, so neither 40 CFR 52.21(m)(1)(v i ii) nor the District’s provision incorporating this provision by reference would have any legal effect at this

time.

V.4 Public Participation

The EPA’s Evaluation provides an analysis showing that Rule 26.13 meets the requirements of

40 CFR 51. 166(q) for public participation

. Rule 26.13 requires the District to meet certain public participation requirements prior to issuing a PSD permit. These requirements are generally consistent with the public participatio n requirements listed in 40 CFR 51.166(q). Only those requirements that warrant additional discussion are described below.

1) Notifying applicants of application completeness

40 CFR 51.166(q)(1) provides : The reviewing authority shall notify all applicants within a specified time period as to the completeness of the application or any deficiency in the application or information submitted. In the event of such a deficiency, the date of receipt of the application shall be the date on which the reviewing autho rity received all required information.8 The provisions of Section D.5 of Rule 26.13 meet this requirement.

2) Final action within one year of a complete application

40 CFR 51.166(q)(2) requires that the reviewing authority make a final determination whether construction should be approved, approved with conditions, or disapproved within one year after receipt of a complete application.

The provisions of Section E of Rule 26.13 meet this requirement.

3) Notifying the public of the opportunity for a public hearing

40 CFR 51.166(q)(2)(iii) requires that the public notification for a preliminary determination include notice of the opportunity for comment at a public hearing. 40 CFR 51.166(q)(2)(v) requires an opportunity for a public hearing.

The provisions of Sect ion s E.3 and E.5 of Rule 26.13 meet th ese requirement s

.

V.5 Notice to the EPA

– 40 CFR 51.166(p)(1)

40 CFR 51.166(p)(1) requires the reviewing authority to provide the EPA with a copy of each PSD permit application and to provide notice to the EPA of every action related to the consideration of a PSD permit.

The provisions of Section D.4 of Rule 26.13 meet this requirement.

V.6 Biomass Deferral Rule

On July 20, 2011, the EPA finalized a rulemaking entitled “Deferral for CO 2 Emissions From

Bi oenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs (Biomass Deferral Rule)”. See 76 FR 43490. This rule excluded biogenic

CO 2 emissions 4 until July 21, 2014 from the determination of CO 2 emissions for bioenergy and other biogenic stationary sources under the PSD and title V programs’ definition of “subject to regulation” in 40 CFR 52.21(b)(49) and 40 CFR 70.2, respectively. The rule also allowed States the option to adopt the Biomass Defe rral Rule into their SIPs and proceed accordingly. The Biomass Deferral Rule was effective on the same date that it was published, July 20, 2011.

VCAPCD Rule 26.13 adopted the Biomass Deferral Rule exclusion by incorporating by reference the language in 40 CFR 52.21(b)(49)(ii)(a).

4 Emissions of CO 2 from a stationary source directly resulting from the combustion or decomposition of biologically

- based materials other than fossil fuels and mineral sources of carbon ( e.g., calcium carbonate) and biologically

- based material (nonfossilized and biodegradab le organic material originating from plants, animals or

micro

- organisms [including products, by

- products, residues and waste from agriculture, forestry and related industries as well as the nonfossilized and biodegradable organic fractions of industrial an d municipal wastes, including gases and liquids recovered from the decomposition of non

- fossilized and biodegradable organic material]).9 On July 12, 2013, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) in Center for Biological Diversity v. EPA , 722 F.3d 401 (D.C. Cir. 2013), vacated the

EPA’s Biomass Deferral Rule. On November 13, 2013, however, the D.C. Circuit Court granted a motion to extend the deadline for rehearing petitions concerning its decision until 30 days after the United States Supreme Court’s (Supreme Court) decision in Utility Air Regulatory Group v.

EPA , No. 12

- 1146, et al. After the Supreme Court issued that decision in June 2014, the D.C. Circuit Court further extended the deadline for rehearing petitions on the Biomass Deferral Rule decision until after further proceedings in Coalition for Responsible Regulati on v. EPA , No. 09

- 1322, as the decision in the Coalition for Responsible Regulation case was partially reversed by the Supreme Court in its Utility Air Regulatory Group v. EPA decision. Those proceedings ended on April 10, 2015 when the D.C . Circuit Court issued an amended judgment. Coalition for Responsible Regulation, Inc. v. EPA, No. 09

- 1322, (D.C. Cir. April 10, 2015) (Amended Judgment). Subsequently, on May 11, 2015, intervenors in the Center for Biological Diversity v.

EPA case filed petitions for reh earing. The D.C. Circuit denied the intervenors’ petition for panel rehearing on July 24, 2015, and the Court’s mandate issued on August 10, 2015. Accordingly, it would be inconsistent with the decision of the Court for a permit

- issuing authority to rely o n the

Biomass Deferral Rule.

The fact that District Rule 26.13 incorporate s by reference the Biomass Deferral Rule that was vacated by the Court could potentially raise concerns about the EPA’s approval of th is rule.

H owever, the exclusion in the Biomass D eferral Rule expired by its own terms on July 21, 2014. As the District rule in question incorporate s the language in 40 CFR 52.21(b)(49)(ii)(a), the District rule likewise incorporate s the July 21, 2014 expiration date. Because the biomass

exclusion in District Rule 26.13 does not apply after this date, our proposed approval of th is rule into the SIP after the expiration of the Biomass Deferral Rule on July 21, 2014 is not inconsistent with the Court’s opinion concerning the Biomass Deferral Rule.

V I

. P ROGRAM TRANSFER AND IMPLEMENTATION ISSUES

The VCAPCD provided information regarding its authority, personnel, and funding to carry out the PSD program pursuant to CAA s ection 110(a)(2)(E)(i), and the District’s request to implement the PSD program with r espect to existing PSD permits issued by the EPA. 5

The VCAPCD has confirmed that, as part of, and concurrent with, the EPA’s approval of its PSD program into the SIP, the District is requesting approval to exercise its authority to administer the PSD program with respect to the existing sources located in the District that have an existing PSD permit issued by the EPA. Thi s would include authority to conduct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to these permits including, for example, modifications, amendments, or revisions of any nature, and authority to enforce such permits.

Consistent with section 110(a)(2)(E)(i) of the Act, the District ’s SIP submittal and clarification letter dated August 10, 2016 shows that the VCAPCD has the authority under State statute and

5 See letter dated August 10, 2016 from the VCAPCD.10 rule to admini ster the PSD permit program, including but not limited to the authority to administer, process and issue any and all permit decisions, and enforce PSD permit requirements within the District. This applies to PSD permits that the VCAPCD will issue and to ex isting PSD permits issued by the EPA that are to be transferred to the District upon the effective date of the EPA’s approval of Rule 26.13 into the SIP

.

The EPA intends to provide a copy of the existing permits to the VCAPCD prior to the effective

date of final SIP approval of Rule 26.13 . Upon approval of the VCAPCD ’s PSD SIP submittal,

the EPA w ould assume an oversight role of the District ’ s PSD permitting programs, as intended by the Act.

We have also determined that the District has adequate personnel and funding to implement the PSD program.

V II. S ECTIONS 110(a), 110(l), AND 193 OF THE ACT

CAA section 110(a) requires, among other things, that the requirements of SIP rules be

enforceable. So urces subject to Rule 26.13 are required to meet emission limits and other measures for the prevention of significant deterioration of air quality, which meets the enforceability requirement in section 110(a).

We have also evaluated Rule 26.13 to determine whether its approval into the SIP along with the

concurrent removal of Rule 26.10 from the SIP would interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of the Act (CAA section 110(l) ) or whether it would modify, in a nonattainment area, any SIP

approved control requirement in effect before November 15, 1990 (CAA section 193).

We find that our approval of this SIP submittal would comply with CAA section 110(l), because the SIP, as revised to inco rporate Rule 26.13 , would provide for RFP and attainment of the NAAQS, and the requirements of Rule 26.13 are essentially equivalent to, and at least as stringent as, those of the FIP codified in 40 CFR Part 52.21 and used to date by the EPA to implement t he required PSD program within the District . As described elsewhere in this document, approval of Rule 26.13 would merely result in the transfer of authority for the PSD program from the EPA to the VCAPCD , and therefore would not result in any substantive changes to the PSD program requirements, other CAA requirements, or air quality.

Further, section 193 of the CAA does not apply because incorporat ion of the PSD program requirements in Rule 26.13 into the SIP would not address nonattainment pollutants.

V II I. RECOMMENDATIONS

Pursuant to section 110(k)(3) of the Act , we recommend full approval into the SIP of VCAPCD

Rule 26.13: New Source Review

– Prevention of Significant Deterioration (PSD)

. We recommend approval based on our d etermination that the submi ttal complies with the applicable statutory and regulatory provisions requiring regulation of major stationary sources, in particular, the requirements of part C of title I of the Act and the implementing regulations for SIP

-11 approved PSD programs at 40 CFR 51.166

. We also recommend removal of VCAPCD Rule 26.10 from the SIP for the reasons explained above. If we finalize this action as proposed, our action would be codified through revisions to 40 CFR 52.220

– Identification of plan and 40

CFR 52.270

– Signi ficant deterioration of air quality.

I X

. ATTACHMENTS

Attachment 1

– Evaluation of CA PSD Rules and VCAPCD PSD Rule, EPA Region 9, August

2016

Attachment 2

– VCAPCD Rule 26.13 , revised Nov. 11, 2015 s ubmitted by the C ARB on March 11, 2016

Attachment 3

– VCAPCD Staff Report on Rule 26.13, Oct. 2015

Attachment 4

– VCAPCD C larification letter dated August 10

, 2016