UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 HAWTHORNE STREET SAN FRANCISCO, CALIFORNIA 94105

In the Matter of: ) ) DocketNo. 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 AirAct, 42 U.S.C. § § 7401-7671q ("CAA" or the "Act"). This NOV is issued to NAES Corporation ("NAES") for violations oftheAct 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 anyperson in violation ofa state implementation plan ("SIP") ofthe violations. The authority to issue NOVs has been delegated to the Regional Administrator ofEPA, Region 9, and redelegated to the Director ofthe Air Division for EPA, 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 ofattainment status designations for each air quality control region ("AQCR") in every state. These lists identify the attainment status ofeach AQCR for each ofthe criteriapollutants. 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 Areathat has been designated as a serious nonattainment area for the 8-hour ozoneNational 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 thejurisdiction ofthe San Joaquin Valley Air Pollution Control District ("SJVAPCD" or the "District"). 3. Section 11O(a) oftheAct requires that all states adopt SIPs that provide for the 1implementation, 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 regulatoryprovision ofa SIP renders the person in violation ofan applicable implementation plan and subject to enforcement under section 113(a)(1) ofthe Act. 42 U.S.C. 

### § 7413(a)(1). 5. Under 40 C.F.R. 

### § 52.23, "[f]ailure to comply with

... anypermit condition

... issued pursuant to approved orpromulgated regulations for the review of new ormodified stationaryor 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 complyin violation of a requirement ofan applicable implementationplan 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 ofSJV APCD Rule 1020 defines "air contaminants" as "anydischarge, release, or otherpropagation into the atmosphere directly orindirectly, caused byman and includes, but is not limited to, smoke, charredpaper, dust, soot, grime, carbon, noxious acids, fumes, gases, odors, orparticulate matter, or any combination thereof." 8. Section 3.30 ofSJV APCD Rule 1020 defines "operation" as "anyphysical action resulting in a change in the location, form, orphysical properties ofa material, or any chemical action resulting in a change inthe chemical composition or the chemical or physical properties ofa material." 9. Section 3.31 ofSJV APCD Rule 1020 defines "owner" as "anyperson who leases, supervises, oroperates 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 "anyowner or operator ofa source operation which emits ormayemit air contaminants."

169 Fed. Reg. 22441 (April 26, 2004). 2

### 12. Section 4.0 ofSJVAPCD Rule 1080 provides that "[u]pon the request oftheAPCO [Air Pollution Control Officer] and as directed byhim, 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 bythe 30th 

### day following the end ofthe calendar quarter and shall include

... [t]ime intervals, data and magnitude ofexcess 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 "anyperson constructing, altering, replacing oroperating any source operation which emits, may emit, ormayreduce emissions to obtain an Authority to Construct or a Permit to Operate." 16. Section 3.0 ofSJVAPCD Rule 2010 provides that "[a]nypersonbuilding, altering or replacing any operation, article, machine, equipment, or other contrivance, the use of which may cause the issuance ofair contaminants orthe use ofwhich may eliminate or reduce or control the issuance ofair 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 ormodified source operation described in Section 3.0, or any existing source operation so described maybe 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 orinstalled 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 ofairpollution; 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 "themost stringent emission limitation or control technique ofthe following: 3.9.1 Achieved inpractice for such category and class ofsource; 3.9.2 Contained in any State Implementation Plan approved by

... EPA

... for such category and class ofsource... ; 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 bythe.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 ofthefederally 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 ormay emit air contaminants." 24. Section 5.0 ofSJVAPCD Rule 4101 provides that "[a] person shall not discharge into the atmosphere from any single source ofemission whatsoever, any air contaminant, other than uncombined water vapor, for a period orperiods aggregating more than three (3) minutes in anyone (1) 

### hour which is: 5.1 As dark ordarker in shade as that designated as No.1 onthe Ringelmann Chart, as publishedbythe United States Bureau ofMines. 5.2 Ofsuch 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 ofthefederally 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 ofanyunitusing 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 emissionrate. 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 satisfythe 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 mustbe 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 certifythe operational status ofCEMS within 180 days ofinitial operation. 29. Section 6.1 ofSJVAPCD Rule 4352 provides that "[t]he owner/operator ofanyunit subject to the provisions ofthis rule shall submit to APCO an emissions control plan of all actions to betaken to satisfy the requirements ofSection 5.0. Suchplan will identify the type ofemission 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 Facilityunder a contract with Merced Power. 32. EI Nido is within thejurisdiction ofSJV APCD whichhas been designated as a serious nonattainment area for the 8-hour ozone NAAQS and as an extreme nonattainment area for the I-hour ozoneNAAQS under the Act. 33. The Facilityis a 12.5 megawatt powerplant 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 auxiliaryburner powering a steam turbine generator that is served by a selective non-catalytic reduction system, a limestone injection system, and a pulsejet 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 Boilerwith one propane-fired auxiliaryburner powering a steam turbine generator, servedbya selective non-catalytic reduction system, a limestone injection system, and a pulsejetbaghouse at the Facility. 37. Condition 8 ofthePermit requires the Facilityto "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 Facilityto "install, maintain, and operate a continuous emissions monitoring system (CEMS) to measure stack gas NOx, SOx, CO, and O2 

### concentration" and "meetthe 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 Facilityto 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 ofthePermitprovides 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-hourrolling average. 42. Condition 18 ofthe Permit provides that CO emissions from the Boiler, except during



### 6periods 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 ofstartup and shutdown, shall not exceed 7.40 lblhr or 0.041b/MMBtu over a 15­ minuterolling 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-hourrolling average. 45. Condition 22 ofthe Permitrequires 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 theNOx, 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 Facilityto assess its compliance status under the CAA. 50. During the Inspection, Rhonda Mansur ofSJV APCD measured the opacity ofemissions from the biomass receiving, storage, transfer, and sizing operations at the Facility and determined that such emissions exceeded the 20% opacity limit set forth inthe Permit and SJVAPCD Rule 4101. 51. According to the CEMS dataprovided inthe Merced Power Response and information obtained through the Inspection, the Boiler emittedNOx at levels exceeding 14.81blhr or 0.08Ib/MMBtu, based on 24-hourrolling average, on numerous occasions from or about September 1, 2008 to present. 52. According to the CEMS dataprovided inthe 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-hourrolling average, onnumerous 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 hourrolling average on or about March 17-18, 2009. 56. According to the Source Test, the Boiler emitted PM IO 

### at levels exceeding 7.40 lblhr or 0.041b/MMBtu over a 15-minuterolling 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 July2008 to January 2009. 58. According to the Merced Power Response, the Facilityhas failed to certifythe CEMS for the Boilerpursuant 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 betaken to satisfy the requirements SJV APCD Rule 4352 and that identifies the type ofemission controls to be applied to each unit and a construction schedule, or shall provide source tests

... sufficient to demonstrate that the unit is currentlyin compliance with the applicable emission limits. FINDINGS OF VIOLATION 61. The Facility failed to perform source testing to measure the NOx, SOx, PM IO, 

### CO, VOC, and NH3 emission rates from the Boilerwithin 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-hourrolling 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 of6.48

8Iblhr or 0.035 Ib/MMBtu over a I-hourrolling 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 inviolation ofCondition 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-hourrolling 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 PM lO in excess of7.40 Iblhr or 0.04 Ib/MMBtu over a 15-minuterolling average inviolation ofCondition 18 ofthe Permit and SJVAPCD Rules 2010 and 2201. 67. From or about July 2008 to January 2009, the Facilityfailed to install and maintain an operational ammonia volume flow-rate indicator for the SNCR ammonia injection system at the Facilityinviolation ofCondition 8 ofthe Permit and SJV APCD Rules 2010 and 2201. 68. From or about January 2,2009 to present, the Facility failed to certifythe CEMS for the Boilerinviolation ofCondition 9 ofthe Permit and SJV APCD Rules 2010 and 2021. 69. To date, the Facilityhas failed to submit a quarterly audit report ofCEMS and a quarterly compliancereport for the Facility for the fourth quarter of2008 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% opacitylimit for a period or periods aggregating more than three minutes in anyonehour inviolation ofSection 5.0 of ·SJVAPCD Rule 4101. 71. To date, the Facilityhas 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 ofemission controls to be applied to eachunit and a construction schedule, or shall provide source tests

... sufficient to demonstrate that the unit is currently in compliance with the applicable emission limits inviolation ofSection 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 Facilityinviolation ofsection 110 ofthe Act and the California State Implementation Plan, as set forth inthe Finding and Notice ofViolation.



### 9ENFORCEMENT Section 113(a)(1) ofthe Act provides that when anypersonhas violated anyrequirement or prohibition ofan applicable implementationplan orpermit, EPA may: issue an orderrequiring compliance with the requirements orprohibition ofsuch implementation plan orpermit, or issue an administrative penalty orderpursuant 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 reliefand/or civil penalties ofnot more than $37,500 per day for each violation. 42 U.S.C. 

### § 7413(a)(1); 40 C.F.R. Part 19. Furthermore, ifa person knowinglyviolates anyrequirements ofan applicable implementationplanmore than 30 days after the date ofissuance ofthisNOV, section 113(c) provides for criminal penalties orimprisonment, orboth. Under section 306(a) ofthe Act, theregulations promulgated thereunder (40 C.F.R. Part 15), and Executive Order 11738, facilities to beused 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 mayresult inthe facility being declared ineligible for participation in any federal contract, grant, orloan. PENALTY ASSESSMENT CRITERIA Section 113(e)(1) ofthe Act states that the Administrator orthe court, as appropriate, shall, in determining the amount ofanypenaltyto be assessed, take into consideration (in addition to such other factors asjusticemayrequire) the size ofthebusiness, the economic impact ofthe penalty on thebusiness, the violator's full compliance history and good faith efforts to comply, the duration ofthe violation as establishedby any credible evidence (including evidence other than the applicable test method), paymentbythe violator ofpenalties previously assessed for the same violation, the economicbenefit ofnoncompliance, and the seriousness ofthe violation. Section 113(e)(2) ofthe Act allows the Administrator orthe court to assess a penalty for each day ofviolation. Forthe purposes ofdetermining the number ofdays ofviolation, where the EPA makes a prima facie showing that the conduct or events giving rise to this violation are likelyto have continued orrecurred pastthe date ofthis NOV, the days ofviolation shall be presumed to include the date ofthis NOV and each and every daythereafter until the violator establishes that continuous compliance has been achieved, except to the extent that the violator canprovebythe preponderance ofthe evidence that there were intervening days during which no

10violation occurred orthat the violation was not continuing innature. OPPORTUNITY FOR CONFERENCE NAES may, upon request, confer with EPA. The conference will enable NAES to present evidence bearing onthe finding ofviolation, on the nature ofthe violations, and on any efforts it mayhave taken orproposes to take to achieve compliance. NAES has the right to berepresented bycounsel. A request for a conference with EPA must bemade within ten (10) working days of receipt ofthis NOV, and the request for a conference orother inquiries concerning theNOV should bemade 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 -

# A p

.... rtJ{ I Deborah Jordan Director, Air Division

11UNITED 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: DocketNo. 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 DearMr. Denova: Enclosed is a copy ofa Finding and Notice ofViolation (''NOV'') issued pursuant to section 113(a)(1) ofthe Clean AirAct, 42 U.S.C. §§ 740l-767lq (the "Act"), notifying you that the United States Environmental Protection Agency ("EPA"), Region IX, finds thatNAES Corporation ("NAES") has violated certain provisions ofthe California State Implementation Plan at thebiomass-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 orderrequiring 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 Actprovides 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 mayresult inNAES being declaredineligible for participation in any federal contract, grant, or loan. Ifyou wish to discuss the enclosed NOV, you mayrequest a conference with EPA within ten (10) working days ofreceipt ofthis NOV. The conference will afford NAES an opportunityto present informationbearing on the finding ofviolation, the nature of the violations, and any efforts itmayhave taken orproposes to take to achieve compliance.

Printed on Recycled PaperIfyou 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, 

# I1/tw

Deborah Jordan Director; Air Division Enclosure

cc: Mr. Seyed Sadredin (SJVAPCD) Mr. Jim Ryden (CARB)

2UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105·3901 

### AUG 2 0 2009 IN REPLY: AIR-5 REFER TO: DocketNo. R9-09-15 Mr. Jim Ryden Chief, Enforcement Division California AirResources Board P.O. Box 2815 Sacramento, CA 95812 DearMr. Ryden: Enclosed for your information is a copy ofa 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") atthe biomass-fired electric generating facility the company operates in EI Nido, California. Thepurpose oftheNOV is to notifyNAES 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 NOVhas 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 ofan NOV, EPA may determine ifany further action will betakenpursuant to section 113 ofthe Act. Ifyou have any questions concerning this NOV, please contact Mark Sims, Air Enforcement Office, at (415) 972-3965, or sims.mark@eps.gov

. Sincerely,

# ~CfwV Deborah Jordan Director, Air Division Enclosure

Printed on Recycled PaperUNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105·3901 

### rAl)G 

### 20 2009 IN REPLY: AIR-5 REFER TO: DocketNo. 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 ofa 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. Thepurpose ofthe NOV is to notifyNAES 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 NOVhas beenissued 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 ofan NOV, EPA may determine ifany further action will betaken pursuant to section 113 ofthe Act. Ifyou have any questions concerning this NOV, please contact Mark Sims, Air Enforcement Office, at (415) 972-3965, or sims.mark@eps.gov. Sincerely,

Director, AirDivision Enclosure

Printed on Recycled Paper