UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 HAWTHORNE STREET 


SAN FRANCISCO, CALIFORNIA 94105 


In the Matter of: 	 ) 

) Docket No. R9-09-15 

NAES Corporation ) 

Issaquah, Washington ) FINDING AND 

) NOTICE OF VIOLATION 

Proceeding Under Section ) 

113(a), Clean Air Act, ) 

as Amended ) 

) 

This Finding and Notice ofViolation ("NOV") is issued pursuant to section 113(a)(I) of 

the Clean Air Act, 42 U.S.C. § § 7401-7671q ("CAA" or the "Act"). This NOV is issued to 

NAES Corporation ("NAES") for violations ofthe Act at the Merced Power, L.L.C. ("Merced 

Power") power generating facility in EI Nido, California (the "Facility"). Section 113(a)(1) 

requires the Administrator ofthe United States Environmental Protection Agency ("EPA") to 

notify any person in violation of a state implementation plan ("SIP") ofthe violations. The 

authority to issue NOV s has been delegated to the Regional Administrator ofEPA, Region 9, and 

redelegated to the Director ofthe Air Division for EP A, Region 9. 

STATUTORY AND REGULATORY AUTHORITY 

A. 	 Clean Air Act 

1. 	 Pursuant to section 107(d) ofthe Act, 42 U.S.C. § 7407(d), the Administrator 

promulgated lists of attainment status designations for each air quality control region 

("AQCR") in every state. These lists identify the attainment status of each AQCR for 

each ofthe criteria pollutants. The attainment status designations for California AQCRs 

are listed at 40 C.F.R. § 81.305. 

2. 	 The city ofEI Nido, California, is part ofthe San Joaquin Valley Area that has been 

designated as a serious nonattainment area for the 8-hour ozone National Ambient Air 

Quality Standards ("NAAQS") and an extreme nonattainment area for the I-hour ozone 

NAAQS (40 C.F.R. § 81.305) and is subject to the jurisdiction ofthe San Joaquin Valley 

Air Pollution Control District ("SJV APCD" or the "District"). 

3. 	 Section 11 O(a) ofthe Act requires that all states adopt SIPs that provide for the 

1 

implementation, maintenance and enforcement ofprimary and secondary air quality 

standards. 42 U.S.C. § 741O(a). 

4. 	 A person's failure to comply with any approved regulatory provision of a SIP renders the 

person in violation of an applicable implementation plan and subject to enforcement 

under section 1 13(a)(1) ofthe Act. 42 U.S.C. § 7413(a)(1). 

5. 	 Under 40 C.F.R. § 52.23, "[f]ailure to comply with ... any permit condition ... issued 

pursuant to approved or promulgated regulations for the review ofnew or modified 

stationary or indirect sources, or with any permit limitation or condition contained within 

an operating permit issued under an EPA-approved program that is incorporated into the 

State implementation plan, shall render the person ... so failing to comply in violation of 

a requirement of an applicable implementation plan and subject to enforcement action 

under section 113 ofthe Clean Air Act." 

B. 	 SJV APCD Rule 1020: Definitions 

6. 	 SJVAPCD Rule 1020 was approved into and made a part ofthe federally enforceable SIP 

pursuant to 42 U.S.C. § 7410 on April 3, 2000. 65 Fed. Reg. 5262 (February 3,2000). 

7. 	 Section 3.2 of SJV APCD Rule 1020 defines "air contaminants" as "any discharge, 

release, or other propagation into the atmosphere directly or indirectly, caused by man 

and includes, but is not limited to, smoke, charred paper, dust, soot, grime, carbon, 

noxious acids, fumes, gases, odors, or particulate matter, or any combination thereof." 

8. 	 Section 3.30 of SJV APCD Rule 1020 defines "operation" as "any physical action 

resulting in a change in the location, form, or physical properties of a material, or any 

chemical action resulting in a change in the chemical composition or the chemical or 

physical properties of a material." 

9. 	 Section 3 .31 of SJV APCD Rule 1020 defines "owner" as "any person who leases, 

supervises, or operates equipment, in addition to the normal meaning ofownership." 

C. 	 SJV APCD Rule 1080: Stack Monitoring 

10. 	 SJV APCD Rule 1080 was approved into and made a part ofthe federally enforceable SIP 

pursuant to 42 U.S.C. § 7410 on June 25,2004.1 

11. 	 SJV APCD Rule 1080 applies to "any owner or operator of a source operation which 

emits or may emit air contaminants." 

169 Fed. Reg. 22441 (April 26, 2004). 

2 

12. 	 Section 4.0 ofSJVAPCD Rule 1080 provides that "[u]pon the request ofthe APCO [Air 

Pollution Control Officer] and as directed by him, the owner shall provide, install, and 

operate continuous monitoring equipment on such operations as directed. The owner 

shall maintain, calibrate, and repair the equipment and shall keep the equipment operating 

at design capabilities." 

13. 	 Section 8.0 ofSJVAPCD Rule 1080 provides that "[o]wners or operators subject to 

Section 4.0 shall submit a written report for each calendar quarter to the APCO. The 

report is due by the 30th day following the end ofthe calendar quarter and shall include 

... [t]ime intervals, data and magnitude of excess emissions, nature and cause ofthe 

excess (ifknown), corrective actions taken and preventive measures adopted." 

D. 	 SJVAPCD Rules 2010 and 2201: Permits and New Source Review 

14. 	 SJVAPCD Rule 2010 was approved into and made a part ofthe federally enforceable SIP 

pursuant to 42 U.S.C. § 7410 on September 21, 1999.2 

15. 	 SJV APCD Rule 2010 requires "any person constructing, altering, replacing or operating 

any source operation which emits, may emit, or may reduce emissions to obtain an 

Authority to Construct or a Permit to Operate." 

16. 	 Section 3.0 of SJVAPCD Rule 2010 provides that "[a]ny person building, altering or 

replacing any operation, article, machine, equipment, or other contrivance, the use of 

which may cause the issuance of air contaminants or the use ofwhich may eliminate or 

reduce or control the issuance of air contaminants, shall first obtain authorization for such 

construction from APCO. An Authority to Construct shall remain in effect until the 

Permit to Operate the source operation for which the application was filed is granted or 

denied...." 

17. 	 Section 4.0 ofSJVAPCD Rule 2010 provides that "[b]efore any new or modified source 

operation described in Section 3.0, or any existing source operation so described may be 

operated, a written permit shall be obtained from the APCO. No Permit to Operate shall 

be granted ... for any source operation described in Section 3.0 constructed or installed 

without authorization as required by Section 3.0 until the information required is 

presented to the APCO and such source operation is altered, ifnecessary, and made to 

conform to the standards set forth in Rule 2070 ... and elsewhere in these rules and 

regulations. " 

18. 	 SJV APCD Rule 2201 was approved into and made a part ofthe federally enforceable SIP 

264 Fed. Reg. 39920 (July 23, 1999). 

3 

pursuant to 42 U.S.C. § 7410 on June 16,2004.3 

19. 	 SJV APCD Rule 2201 addresses the review and permitting ofnew and modified 

stationary sources of air pollution; including emission offsets. 

20. 	 Section 4.1 ofSJVAPCD Rule 2201 requires best available control technology ("BACT") 

for all new emissions unit with a potential to emit exceeding 2.0 pounds in anyone day. 

21. 	 Section 3.9 ofSJVAPCD Rule 2201 defines BACT as "the most stringent emission 

limitation or control technique ofthe following: 3.9.1 Achieved in practice for such 

category and class ofsource; 3.9.2 Contained in any State Implementation Plan approved 

by ... EPA ... for such category and class of source... ; or 3.9.3 Contained in an 

applicable federal New Source Performance Standard; or 3.9.4 Any other emission 

limitation or control technique, found by the.APCO to be cost effective and 

technologically feasible for such class or category ofsources or for a specific source." 

E. 	 SJV APCD Rule 4101: Visible Emissions 

22. 	 SJVAPCD Rule 4101 was approved into and made a part ofthe federally enforceable SIP 

pursuant to 42 U.S.C. § 7410 on October 11,2005.4 

23. 	 SJV APCD Rule 4101 applies to "any source operation which emits or may emit air 

contaminants." 

24. 	 Section 5.0 ofSJVAPCD Rule 4101 provides that "[a] person shall not discharge into the 

atmosphere from any single source of emission whatsoever, any air contaminant, other 

than uncombined water vapor, for a period or periods aggregating more than three (3) 

minutes in anyone (1) hour which is: 5.1 As dark or darker in shade as that designated as 

No.1 on the Ringelmann Chart, as published by the United States Bureau ofMines. 5.2 

Of such opacity as to obscure an observer's view to a degree equal to or greater than the 

smoke described in Section 5.1 ofthis rule." 

F. 	 SJVAPCD Rule 4352: Solid Fuel Fired Boilers. Steam Generators. and Process Heaters 

25. 	 SJVAPCD Rule 4352 was approved into and made a part ofthe federally enforceable SIP 

pursuant to 42 U.S.C. § 7410 on April 12, 1999.5 

369 Fed. Reg. 27837 (May 17,2004). 

470 Fed. Reg. 46770 (Aug. 11,2005). 

564 Fed. Reg. 6803 (Feb. 11, 1999). 

4 

26. 	 SJVACPD Rule 4352 is intended to limit emissions ofoxides ofnitrogen ("NOx") and 

carbon monoxide ("CO") from solid fuel fired boilers, steam generators, and process 

heaters. 

27. 	 Section 5.5 ofSJVAPCD Rule 4352 provides that "[t]he owner/operator of any unit using 

ammonia injection as a NOx control technique, shall operate a Continuous Emissions 

Monitoring system (CEM) to monitor and record NOx concentrations, CO2 or O2 

concentrations, as well as the NOx emission rate. Continuous Emission Monitoring 

system shall be operated, maintained, and calibrated pursuant to the requirements of40 

C.F.R. 60.7(c) and 60.13. CEMs must also satisfy the Performance Specifications of40 

C.F.R. 60 Appendix B and the Relative Accuracy Test Audit ofAppendix F." 

28. 	 Under 40 C.F.R. § 60.13(b), CEMS must be installed and operational prior to conducting 

performance tests under 40 C.F.R. § 60.8. Verification ofoperational status shall, as a 

minimum, include completion ofthe manufacturer's written requirements or 

recommendations for installation, operation, and calibration ofthe device. Under 40 

C.F.R. § 60.8, performance testing is due within 180 days ofthe initial operation ofa 

facility. Thus, any facility using ammonia injection as a NOx control technique in the 

District must certify the operational status ofCEMS within 180 days ofinitial operation. 

29. 	 Section 6.1 of SJVAPCD Rule 4352 provides that "[t]he owner/operator of any unit 

subject to the provisions ofthis rule shall submit to APCO an emissions control plan of 

all actions to be taken to satisfy the requirements of Section 5.0. Such plan will identify 

the type of emission controls to be applied to each unit and a construction schedule, or 

shall provide source tests ... sufficient to demonstrate that the unit is currently in 

compliance with the emission limits ofthis rule." 

FINDINGS OF FACT 

A. 	 The Facility 

30. 	 At all times relevant to this NOV, Merced Power owned the Facility located at 30 West 

Sandy Mush Road, EI Nido, California. 

31. 	 At all times relevant to this NOV, NAES operated the Facility under a contract with 

Merced Power. 

32. 	 EI Nido is within the jurisdiction of SJV APCD which has been designated as a serious 

nonattainment area for the 8-hour ozone NAAQS and as an extreme nonattainment area 

for the I-hour ozone NAAQS under the Act. 

33. 	 The Facility is a 12.5 megawatt power plant that bums wood to generate electricity. The 

wood is either from an urban waste source (i.e., construction or demolition projects) or 

5 

from agricultural waste (orchard removals). The wood is burned in a fluidized bubbling 

bed combustor (the "Boiler") to produce steam which then turns an electric generator to 

generate electricity. 

34. 	 In 2007-2008, Merced Power constructed the Facility, including the Boiler with one 

propane-fired auxiliary burner powering a steam turbine generator that is served by a 

selective non-catalytic reduction system, a limestone injection system, and a pulse jet 

baghouse. 

35. 	 The Facility started operations on or about July 5, 2008. 

B. 	 Permitting History 

36. 	 On or about November 28, 2005, SJV APCD issued its Authority to Construct permit No. 

N-4607-8-0 (the "Permit") for the Boiler with one propane-fired auxiliary burner 

powering a steam turbine generator, served by a selective non-catalytic reduction system, 

a limestone injection system, and a pulse jet baghouse at the Facility. 

37. 	 Condition 8 ofthe Permit requires the Facility to "install and maintain an operational 

ammonia volume flow-rate indicator for the selective non-catalytic reduction ("SNCR") 

ammonia injection system." 

38. 	 Condition 9 ofthe Permit requires the Facility to "install, maintain, and operate a 

continuous emissions monitoring system (CEMS) to measure stack gas NOx, SOx, CO, 

and O2 concentration" and "meet the performance specification requirements in 40 

C.F.R., Part 60, Appendix B. ..." Condition 9 ofthe Permit also requires the CEMS to 

. be "operated, maintained, and calibrated pursuant to the requirements of40 C.F.R. 

60.7(c) and 40 C.F.R. 60.13." 

39. 	 Condition 14 ofthe Permit requires the Facility to conduct quarterly audits ofCEMS, 

except during quarters in which relative accuracy and compliance source testing are both 

performed, in accordance with EPA guidelines and submit quarterly audit reports along 

with quarterly compliance reports to the District. 

40. 	 Condition 18 ofthe Permit provides that NOx emissions from the Boiler, except during 

periods ofstartup and shutdown, shall not exceed 14.8 lblhr or 0.08 Ib/MMBtu, based on 

a 24-hour rolling average. 

41. 	 Condition 18 ofthe Permit provides that sulfur oxides ("SOx") emissions from the 

Boiler, except during periods ofstartup and shutdown, shall not exceed 6.48 lblhr or 

0.035Ib/MMBtu, based on a I-hour rolling average. 

42. 	 Condition 18 ofthe Permit provides that CO emissions from the Boiler, except during 

6 

periods ofstartup and shutdown, shall not exceed 10.551blhr or 72 ppmv @ 3% O2 

(equivalent to 0.057 Ib/MMBtu), based on a 24-hour rolling average. 

43. 	 Condition 18 ofthe Permit provides that PMJO emissions from the Boiler, except during 

periods of startup and shutdown, shall not exceed 7.40 lblhr or 0.041b/MMBtu over a 15­

minute rolling average. 

44. 	 Condition 19 ofthe Permit provides that ammonia ("NH3") emissions from the Boiler, 

except during periods ofstartup and shutdown, shall not exceed 85 ppmv @ 3% O2 

(equivalent to 0.041 Ib/MMBtu), based on a 24-hour rolling average. 

45. 	 Condition 22 ofthe Permit requires source testing to measure the NOx, SOx, PMJO, CO, 

volatile organic compound ("VOC"), and NH3 emission rates within 120 days after initial 

operation ofthe Facility and at least once every twelve months thereafter. 

C. 	 Compliance Status 

46. 	 On or about March 25, 2009, EPA issued an information request to Merced Power 

pursuant to Section 114,42 U.S.C. § 7414, ofthe Act. 

47. 	 Merced Power submitted its response (the "Merced Power Response") to the March 25, 

2009 EPA information request on or about May 7, 2009. 

48. 	 On or about March 17-18, 2009, the Facility conducted source testing (the "Source Test") 

to measure the NOx, SOx, PMJO, CO, VOC, and NH3 emission rates from the Boiler. 

49. 	 On or about July 30,2009, EPA and SJVAPCD performed an inspection (the 

"Inspection") ofthe Facility to assess its compliance status under the CAA. 

50. 	 During the Inspection, Rhonda Mansur of SJV APCD measured the opacity of emissions 

from the biomass receiving, storage, transfer, and sizing operations at the Facility and 

determined that such emissions exceeded the 20% opacity limit set forth in the Permit and 

SJVAPCD Rule 4101. 

51. 	 According to the CEMS data provided in the Merced Power Response and information 

obtained through the Inspection, the Boiler emitted NOx at levels exceeding 14.81blhr or 

0.08Ib/MMBtu, based on 24-hour rolling average, on numerous occasions from or about 

September 1, 2008 to present. 

52. 	 According to the CEMS data provided in the Merced Power Response and information 

obtained through the Inspection, the Boiler emitted SOx at levels exceeding 6.48 lblhr or 

0.035 Ib/MMBtu, based on a I-hour rolling average, on numerous occasions from or 

about September 1, 2008 to present. 

7 

53. 	 According to the Source Test, the Boiler emitted SOx at levels exceeding 6.481blhr or 

0.035Ib/MMBtu over a I-hour rolling average on or about March 17-18,2009. 

54. 	 According to the CEMS data provided in the Merced Power Response and information 

obtained through the Inspection, the Boiler emitted CO at levels exceeding 10.55 lblhr or 

72 ppmv @ 3% O2 (equivalent to 0.057Ib/MMBtu), based on a 24-hour rolling average, 

on numerous occasions from or about September 5,2008 to present. 

55. 	 According to the Source Test, the Boiler emitted ammonia at levels exceeding 85 ppmv 

@ 3% O2 (equivalent to 0.041Ib/MMBtu) over a 24 hour rolling average on or about 

March 17-18, 2009. 

56. 	 According to the Source Test, the Boiler emitted PMIO at levels exceeding 7.40 lblhr or 

0.041b/MMBtu over a 15-minute rolling average on or about March 17-18,2009. 

57. 	 According to the Merced Power Response, the Facility did not install or operate the 

SNCR ammonia injection system from or about July 2008 to January 2009. 

58. 	 According to the Merced Power Response, the Facility has failed to certify the CEMS for 

the Boiler pursuant to the requirements of40 C.F.R. § 60.7(c) and 40 C.F.R. § 60.13. 

59. 	 According to the Merced Power Response, the Facility did not submit a quarterly audit 

report ofCEMS and a quarterly compliance report for the Facility for the fourth quarter of 

2008. 

60. 	 According to the Merced Power Response, the Facility did not submit an .emissions 

control plan to SJV APCD that specifies all actions to be taken to satisfy the requirements 

SJV APCD Rule 4352 and that identifies the type of emission controls to be applied to 

each unit and a construction schedule, or shall provide source tests ... sufficient to 

demonstrate that the unit is currently in compliance with the applicable emission limits. 

FINDINGS OF VIOLATION 

61. 	 The Facility failed to perform source testing to measure the NOx, SOx, PMIO, CO, VOC, 

and NH3 emission rates from the Boiler within applicable deadlines in violation of 

Condition 22 ofthe Permit and SJVAPCD Rules 2010 and 4352. 

62. 	 From or about September 1, 2008 to present, the Facility emitted NOx in excess of 14.8 

lblhr or 0.08 Ib/MMBtu over a 24-hour rolling average in violation ofCondition 18 ofthe 

Permit and SJV APCD Rules 2010 and 2201. 

63. 	 From or about September 1, 2008 to present, the Facility emitted SOx in excess of 6.48 

8 

Iblhr or 0.035 Ib/MMBtu over a I-hour rolling average in violation ofCondition 18 ofthe 

Permit and SJVAPCD Rules 2010 and 2201. 

64. 	 From or about September 5, 2008 to present, the Facility emitted CO in excess of 10.55 

Iblhr or 72 ppmv @ 3% 02 (equivalent to 0.0571b/MMBtu) over a 24-hour rolling 

average in violation of Condition 18 ofthe Permit and SJV APCD Rules 2010 and 2201. 

65. 	 On or about March 17-18,2009, the Facility emitted ammonia in excess of85 ppmv @ 

3% 02 (equivalent to 0.0411b/MMBtu) over a 24-hour rolling average at the Facility in 

violation ofCondition 19 ofthe Permit and SJVAPCD Rules 2010 and 2201. 

66. 	 On or about March 17-18,2009, the Facility emitted PMlO in excess of 7.40 Iblhr or 0.04 

Ib/MMBtu over a 15-minute rolling average in violation ofCondition 18 ofthe Permit 

and SJVAPCD Rules 2010 and 2201. 

67. 	 From or about July 2008 to January 2009, the Facility failed to install and maintain an 

operational ammonia volume flow-rate indicator for the SNCR ammonia injection system 

at the Facility in violation ofCondition 8 ofthe Permit and SJV APCD Rules 2010 and 

2201. 

68. 	 From or about January 2,2009 to present, the Facility failed to certify the CEMS for the 

Boiler in violation ofCondition 9 ofthe Permit and SJV APCD Rules 2010 and 2021. 

69. 	 To date, the Facility has failed to submit a quarterly audit report ofCEMS and a quarterly 

compliance report for the Facility for the fourth quarter of 2008 in violation ofCondition 

14 ofthe Permit and SJV APCD Rules 2010 and 2201. 

70: 	 On or about July 30, 2009, the Facility exceeded the 20% opacity limit for a period or 

periods aggregating more than three minutes in anyone hour in violation of Section 5.0 of 

·SJVAPCD Rule 4101. 

71. 	 To date, the Facility has failed to submit an emissions control plan to SJVAPCD that 

specifies all actions to be taken to satisfy the requirements SJV APCD Rule 4352 and that 

identifies the type of emission controls to be applied to each unit and a construction 

schedule, or shall provide source tests ... sufficient to demonstrate that the unit is 

currently in compliance with the applicable emission limits in violation of Section 6.1 of 

SJV APCD Rule 4352. 

NOTICE OF VIOLATION 

Notice is given to NAES that the Administrator ofthe EPA, by authority duly delegated to 

the undersigned, finds that NAES has operated the Facility in violation of section 110 ofthe Act 

and the California State Implementation Plan, as set forth in the Finding and Notice ofViolation. 

9 

ENFORCEMENT 


Section 113(a)(1) ofthe Act provides that when any person has violated any requirement or 

prohibition of an applicable implementation plan or permit, EPA may: 

issue an order requiring compliance with the requirements or prohibition ofsuch 

implementation plan or permit, or 

issue an administrative penalty order pursuant to section 113(d) for civil 

administrative penalties ofup to $37,500 per day ofviolation, or 

bring a civil action pursuant to section 113(b) for injunctive relief and/or civil 

penalties of not more than $37,500 per day for each violation. 

42 U.S.C. § 7413(a)(1); 40 C.F.R. Part 19. 

Furthermore, if a person knowingly violates any requirements of an applicable 

implementation plan more than 30 days after the date ofissuance ofthis NOV, section 113(c) 

provides for criminal penalties or imprisonment, or both. 

Under section 306(a) ofthe Act, the regulations promulgated thereunder (40 C.F.R. Part 

15), and Executive Order 11738, facilities to be used in federal contracts, grants, and loans must 

be in full compliance with the Act and all regulations promulgated pursuant to it. Violations of 

the Act may result in the facility being declared ineligible for participation in any federal 

contract, grant, or loan. 

PENALTY ASSESSMENT CRITERIA 

Section 113 ( e)( 1) ofthe Act states that the Administrator or the court, as appropriate, shall, 

in determining the amount of any penalty to be assessed, take into consideration (in addition to 

such other factors as justice may require) the size ofthe business, the economic impact ofthe 

penalty on the business, the violator's full compliance history and good faith efforts to comply, 

the duration ofthe violation as established by any credible evidence (including evidence other 

than the applicable test method), payment by the violator ofpenalties previously assessed for the 

same violation, the economic benefit ofnoncompliance, and the seriousness ofthe violation. 

Section 113(e)(2) ofthe Act allows the Administrator or the court to assess a penalty for 

each day ofviolation. For the purposes ofdetermining the number ofdays ofviolation, where the 

EP A makes a prima facie showing that the conduct or events giving rise to this violation are 

likely to have continued or recurred past the date ofthis NOV, the days of violation shall be 

presumed to include the date ofthis NOV and each and every day thereafter until the violator 

establishes that continuous compliance has been achieved, except to the extent that the violator 

can prove by the preponderance ofthe evidence that there were intervening days during which no 

10 

violation occurred or that the violation was not continuing in nature. 

OPPORTUNITY FOR CONFERENCE 

NAES may, upon request, confer with EPA. The conference will enable NAES to present 

evidence bearing on the finding ofviolation, on the nature ofthe violations, and on any efforts it 

may have taken or proposes to take to achieve compliance. NAES has the right to be represented 

by counsel. A request for a conference with EPA must be made within ten (10) working days of 

receipt ofthis NOV, and the request for a conference or other inquiries concerning the NOV 

should be made in writing to: 

David Kim 


Office ofRegional Counsel (ORC-3) 


U.S. Environmental Protection Agency 


75 Hawthorne Street 


San Francisco, California 94105 


(415) 972-3882 


Dated: g-Ap.... rtJ{ 

I 

Deborah Jordan 

Director, Air Division 

11 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


August 20, 2009 

CERTIFIED MAIL # 7006 2150 000149412246 

RETURN RECEIPT REQUESTED 

IN REPLY: AIR-5 

REFER TO: Docket No. R9-09-15 

Mr. Tom Denova 

President 

NAES Corporation 

1180 NW Maple Street, Suite 200 

Issaquah, W A 98027 

Re: . NAES Corporation Finding and Notice ofViolation 

Dear Mr. Denova: 

Enclosed is a copy of a Finding and Notice ofViolation (''NOV'') issued pursuant 

to section 1 13(a)(1) ofthe Clean Air Act, 42 U.S.C. §§ 740l-767lq (the "Act"), notifying 

you that the United States Environmental Protection Agency ("EPA"), Region IX, finds 

that NAES Corporation ("NAES") has violated certain provisions ofthe California State 

Implementation Plan at the biomass-fired electric generating facility the company 

operates in El Nido, California (the "Facility"). 

You should be aware that section 113(a)(1) ofthe Act authorizes EPA to issue an 

order requiring compliance with the requirements ofthe Act, issue an administrative 

penalty order, or commence a civil action seeking an injunction and/or a civil penalty. 

Furthermore, section 113(c) ofthe Act provides for criminal penalties in certain cases. 

In addition, section 306 ofthe Act, 42 U.S.C. § 7606, the regulations promulgated 

thereunder (2 C.F.R. Part 180), and Executive Order 11738 provide that facilities to be 

utilized in federal contracts, grants, and loans must be in full compliance with the Act and 

all regulations promulgated pursuant to it. A violation ofthe Act may result in NAES 

being declared ineligible for participation in any federal contract, grant, or loan. 

If you wish to discuss the enclosed NOV, you may request a conference with EPA 

within ten (10) working days ofreceipt ofthis NOV. The conference will afford NAES 

an opportunity to present information bearing on the finding ofviolation, the nature of 

the violations, and any efforts it may have taken or proposes to take to achieve 

compliance. 

Printed on Recycled Paper 
If you have any questions pertaining to this NOV, please contact Mark Sims of 

the Air Enforcement Office at (415) 972-3965, or have your attorney contact David Kim, 

Office ofRegional Counsel, at (415) 972-3882. 

Thank you for your cooperation in this matter. 

Sincerely, 

Deborah I1/twJordan 

Director; Air Division 

Enclosure 

cc: 	 Mr. Seyed Sadredin (SJV APCD) 

Mr. Jim Ryden (CARB) 

2 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


AUG 2 0 2009 

IN REPLY: AIR-5 

REFER TO: Docket No. R9-09-15 

Mr. Jim Ryden 

Chief, Enforcement Division 

California Air Resources Board 

P.O. Box 2815 

Sacramento, CA 95812 

Dear Mr. Ryden: 

Enclosed for your information is a copy of a Finding and Notice ofViolation 

("NOV") that the United States Environmental Protection Agency ("EPA"), Region IX, 

issued to NAES Corporation ("NAES") for violations ofthe Clean Air Act ("Act") at the 

biomass-fired electric generating facility the company operates in EI Nido, California. 

The purpose ofthe NOV is to notify NAES that EPA finds that it has violated 

certain provisions ofthe California State Implementation Plan. The violations are set 

forth more specifically in the enclosed NOV. The NOV has been issued pursuant to 

section 113(a)(1) ofthe Act, 42 U.S.C. §§ 7401-7671q. 

The Act also provides that after 30 days from the issuance of an NOV, EPA may 

determine if any further action will be taken pursuant to section 113 ofthe Act. 

If you have any questions concerning this NOV, please contact Mark Sims, Air 

Enforcement Office, at (415) 972-3965, or sims.mark@eps.gov. 

Sincerely, 

Deborah 

~CfwV Jordan 

Director, Air Division 

Enclosure 

Printed on Recycled Paper 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


rAl)G 20 2009 

IN REPLY: AIR-5 

REFER TO: Docket No. R9-09-15 

Mr. Seyed Sadredin 

Executive Officer/Air Pollution Control Officer 

San Joaquin Valley Air Pollution Control District 

1990 East Gettysburg Avenue 

Fresno, CA 3726-0244 

Dear 

Enclosed for your information is a copy of a Finding and Notice ofViolation 

("NOV") that the United States Environmental Protection Agency ("EPA"), Region IX, 

issued to NAES Corporation ("NAES") for violations ofthe Clean Air Act ("Act") at the 

biomass-fired electric generating facility the company operates in E1 Nido, California. 

The purpose ofthe NOV is to notify NAES that EPA finds that it has violated 

certain provisions ofthe California State Implementation Plan. The violations are set 

forth more specifically in the enclosed NOV. The NOV has been issued pursuant to 

section 113(a)(1) ofthe Act, 42 U.S.C. §§ 7401-7671q. 

The Act also provides that after 30 days from the issuance of an NOV, EPA may 

determine if any further action will be taken pursuant to section 113 ofthe Act. 

If you have any questions concerning this NOV, please contact Mark Sims, Air 

Enforcement Office, at (415) 972-3965, or sims.mark@eps.gov. 

Sincerely, 

Director, Air Division 

Enclosure 

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