Avenal Power Center, LLC

500 Dallas Street, Level 31

Houston, TX 77002

December 19, 2012

IEC1EVE

DEC 262012

Gina McCarthy

Assistant Administrator —

Office of Air and Radiation

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue

Washington, DC 20460

Subject: Application for Extension of the PSD Permit for the Avenal Energy Project

Dear Ms. McCarthy:

Avenal Power Center, LLC (APC) hereby requests the U.S. Environmental Protection

Agency (EPA) for an 18-month extension of the Prevention of Significant Deterioration

(PSD) permit for the Avenal Energy Project. This application is submitted in compliance

with PSD regulations.’

The key relevant dates for issuance of the culTent PSD permit follow. On May 27, 2011,

EPA issued the PSD permit for the Avenal Power Center, and amended the permit for

typographical eiors on June 21, 2011. Four petitions for review were filed. On

August 18, 2011, EPA’s Environmental Appeals Board denied review of these petitions;

on that date, the PSD permit became effective and final. 2

This application is being submitted at this time because the PSD approval to construct

becomes invalid if “construction is not commenced within 18 months after receipt of

such approval, if construction is discontinued for a period of 18 months or more, or if

construction is completed within a reasonable time.” 3 Avenal’s approval to construct will

become invalid on February 18, 2013 (18 months after it became effective), unless

construction commences or the Administrator extends the preconstruction period. Under

EPA regulations, “{t]he Administrator may extend the 1 8—month period upon a

satisfactory showing that an extension is justified.” 4Good reason exists for why

construction has not yet commenced, and will not commence by February 18, 2013, and

for the Administrator to extend the 1 8-month period because of the “satisfactory showing

that an extension is justified” in this letter.

40 CFR 52.2 1(r)(2)

276 FR 55799 (September 9. 2011).

40 C’FR 52.2 1(r)(2)

40 CFR 52.21 (r)(2)

40 CFR 52.21 (r)(2)

12ft445S
Ms. Gina McCarthy December 18, 2012

The current litigation before the U.S. Court of Appeals for the Ninth Circuit, Sierra Club,

et a!. vs. United States Environmental Protection Agency, et a!, and Avenal Poi’er

Center, LLC and El Pueblo Pam El ilire YAgiia Linipio v. United States Environmental

Protection Agency; et. a!, Nos. 1173342 and 11-73356 (On Petition for Review of a

Clean Air Act Permit Issued by the United States Environmental Protection Agency)

(collectively “Sierra Club v. EPA”) is expected to take at least several months to be

resolved, well beyond the February 18, 2013 expiration date of the current PSD permit.

APC asked the court to expedite hearing on the permit appeal in an effort to obtain a

decision prior to the expiration of the current PSD Permit. (Respondent-Intervenor’s

Motion to Expedite Hearing, Sierra Club v. EPA, filed May 30, 2012.) The court denied

APC’s request leaving the case to proceed through the court in accordance with the

standard court calendar. (June 12, 2012 Order, Sierra Club v. EPA.) APC cannot

provide a revised anticipated construction schedule for the project at this time because

that schedule will, of necessity, depend upon the outcome of the pending litigation.

However, APC anticipates that construction will commence within 18 months following

a court decision upholding the validity of the PSD permit.

APC does not believe that there have been any material changes to Best Available

Control Technology requirements for facilities of this type since the PSD permit became

effective in August 2011. Furthermore, APC does not believe any substantive, new PSD

regulatory requirements have become effective since the PSD pennit became effective in

August 2011.

APC looks forward to receiving your response to the requested permit extension as soon

as possible, but by January 18, 2013, at the latest, allowing APC to address any concerns

before the February 1 7, 2013 permit expiration date.

If you have any questions regarding this application, please don’t hesitate to call me at

713-275-6147 or email atjim.rexroaclmacquarie.com.

‘incerely, j\

Jim Rexroad

Vice President

cc: Gerardo Rios, Chiet Permits Office, USEPA, Region 9, 75 Hawthorne Street, San

Francisco, CA 94105

Dave Warner, Director, Permit Services, SJVAPCD, 1900 E. Gettysburg Avenue,

Fresno, CA 93 726-0244

I2’)4-4S I