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## AGENCYColusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

TABLE OF CONTENTS

I. INTRODUCTION................................................................................................................. 1

II. EPA RESPONSES TO PUBLIC COMMENTS ................................................................ 2

A. C OMMENTS ON PUBLIC PROCESS ................................................................................... 2

B. C OMMENTS ON B EST A VAILABLE C ONTROL T ECHNOLOGY D ETERMINATIONS ........ 6

C. C OMMENTS ON A NALYSIS OF S OURCE I MPACTS ON A IR Q UALITY ............................ 13

D. C OMMENTS ON E NDANGERED S PECIES A CT C ONSULTATION P ROCESS .................... 15

E. O THER C OMMENTS ...................................................................................................... 17

III. ADMINISTRATIVE CORRECTIONS ............................................................................ 20Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

1 I. Introduction

On September 9, 2009, the United States Enviro nmental Protection Agency Region 9 (“EPA”) proposed to issue an amended Prevention of Si gnificant Deterioration (“PSD”) permit to the Pacific Gas & Electric Company (“PG&E” or “a pplicant”) containing mi nor revisions to an existing PSD permit that authorized the constr uction and operation of a 660 mega-watt natural gas-fueled combined cycle power plant known as the Colusa Generating Station (“CGS”), in Colusa County, California. Although the proposed changes to the source do not trigger new PSD requirements because they will not result in a “s ignificant emissions increase” as defined in 40 CFR 52.21(b)(40) ( see 40 CFR 52.21(a)(2)(iv)), EPA evalua ted the application to determine whether the changes would trigger new requireme nts and whether the requested permit revisions would ensure that the PSD requirements ( e.g., BACT and protection of ambient air quality standards) continue to be met. The public comment period on the proposal (“Draft Amended Permit”) began on September 9, 2009, and cl osed on October 12, 2009. On October 21, 2009, EPA granted a request to extend the public comme nt period by providing an additional 30 days for public comment, beginning October 21, 2009 and ending November 23, 2009. The purpose of this document is to respond to every significan t issue raised in the pub lic comments received during the public comment period and to explain the changes that EPA has made in this final

Amended PSD Permit.

EPA announced the public comment period th rough public notices published in the Colusa SunHerald

, Willows Journal , and Orland Press Register and posted on our website. EPA mailed the public notices to the required entities under 40 CFR part 124.

The administrative record for the Draft Ame nded Permit, which includes the Draft Amended Permit, all data submitted by the applicant in support of the Draft Amended Permit and correspondence between EPA and the applicant, wa s made available at EPA’s Region 9 office. Additionally, the Draft Amended Permit, the Am bient Air Quality Impact Report (“AAQIR”) and other supporting documents were made available on the EPA Region 9 website.

On October 12, 2009, EPA received an e-mail from Rob Simpson (the “commenter”) attaching comments on the Draft Amended Permit and reques ting that EPA extend the comment period by an additional 45 days. As noted above, in res ponse to this request, EPA extended the public comment period to November 23, 2009. On No vember 23, 2009, EPA received a second e-mail from Rob Simpson attaching additional commen ts and repeating many of his October 12, 2009

comments on the Draft Amended Permit. EPA di d not receive any other comments on the Draft

Amended Permit.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

2 II. EPA Responses to Public Comments

This document summarizes or recites Mr. Simp son’s comments and provides EPA’s responses. Comments on a single topic have been grouped to gether into a single co mment summary and are addressed by one response from EPA. The full te xt of all the comments we received is available in the administrative record for the permit, which is available for inspectio n at our regional office at 75 Hawthorne Street, San Fr ancisco, CA, 94105. Documents rele vant to the permit and the

index for the entire administrative record are also available online at http://www.epa.gov/region09/air/permit/r9-permits-issued.html

.

A. COMMENTS ON PUBLIC PROCESS

Comment A.1: In the comments submitted on October 12, 2009, the commenter stated that he

had not received notice of the initial PSD permit or the revised permit EPA was proposing to issue (the Draft Amended Permit). The commenter stated that he had re peatedly asked to be added to the EPA Region 9 interested parties list but had only recently discovered the proposed

action and did not have sufficient time to effectively comment on this action. As such, the commenter requested that EPA extend the co mment period by 45 days so that he could participate.

Response A.1: EPA initially announced a public comme nt period on the Draft Amended Permit through a public notice publishe d on September 9, 2009 in three semi-weekly newspapers of general circulation in Colu sa and Glenn Counties: the Colusa Sun-Herald, Willows Journal, and Orland Press Register

. 1 The notice stated that EPA woul d accept public comments on the Draft Amended Permit until October 12, 2009. It appears the commenter received this general public notice, as demonstrated by the comments he submitted on October 12, 2009. EPA did not, however, provide the commenter with particularized notice of the Draft Amended Permit we announced on September 9, 2009. 2 See Mailing List, Colusa Generating Station PSD Permit Revision, Permit No. SAC 06-01, September 2009. In response to this comment, EPA extended the public comment period on the Draft Amended Pe rmit for an additional 30 days, to November 23, 2009, to provide commenters a reasonable opportuni ty to comply with the requirements of 40 CFR § 124.13. EPA’s public notice of the addi tional 30-day comment period was published on October 21, 2009, in the same three newspapers that had published the initial public notice. EPA provided particularized notice of the extende d public comment period on the Draft Amended Permit to the commenter by e-mail (which was the only address he had provided to EPA for notification purposes) on October 21, 2009, and to all other partie s on EPA’s mail/e-mail

distribution list for the Draft Amended Permit. See Mailing List, Colusa Generating Station PSD

1 The Colusa Sun-Herald publishes twice a week on Wednesdays and Saturdays and is the only newspaper of general circulat ion in Colusa County. The Willows Journal and Orland Press Register also publish twice a week on Wednesdays and Saturdays and are newspapers of general circulation in neighboring Glenn County.

2 As the commenter has not specifically argued th at he was entitled to receive particularized notice of the initial PSD permit, which we issued on September 29, 2008, nor identified any deficiency in EPA’s public process for that perm it, we are not addressing the commenter’s brief reference to the public noti ce for that prior action.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

3 Permit Revision, Permit No. SAC 06-01, October 2009. 3 EPA’s extension of the comment period to November 23, 2009 effectively provid ed commenters with an additional 42 days beyond the close of the initial comment period to submit comments, thereby addressing the commenter’s request.

Comment A.2: The commenter stated that a “recurring concern [he had] with PSD permits is failure to provide for public partic ipation.” Quoting language from In re: Russell City Energy

Center , PSD Appeal No. 08-01 (EAB Jul. 29, 2008) , 14 E.A.D.__, about the public notice and participation rights established in the CAA and 40 CFR part 124, the commenter stated that he had hoped this decision would provide “guida nce that would be followed in permitting polluters,” and that he had “found no evidence of a public Notice for this facility that includes the information needed for ‘informed public par ticipation’ which is a demonstration of the projects effects on air quality in relationship to the National Ambient Air Quality Standards.”

The commenter stated that the notices he had seen “include no indica tion of the volume of pollutants,” and that “Original Notices for the fa cility appear to include a gross weight of pollutants but no basis in re lationship to air quality.”

Response A.2: EPA provided adequate public notice of the Draft Amended Permit in accordance with the requirements of 40 CFR pa rt 124 and disagrees with the commenter. Specifically, 40 CFR 124.10(c) requ ires that EPA provide public notice of a draft PSD permit by: (1) mailing a copy of the notice to the indivi duals and entities listed in section 124.10(c)(1); (2) publishing a notice in a daily or weekly news paper within the area a ffected by the facility; and (3) implementing any other method reasonably cal culated to give actual notice of the action in question to the persons potentially affected by it. Section 124.10(d) specifies the information that all public notices must c ontain, including information about the permittee and its operations; the name, address and telephone number of a pers on from whom interested persons may obtain further information; a brief description of the comment procedures required under part 124; and

the location and times at which th e administrative record will be av ailable for public inspection.

EPA initially announced a public comment period on the Draft Amended Permit through a public notice published on September 9, 2009 in three semi -weekly newspapers of general circulation in

Colusa and Glenn Counties. See Response A.1 above. This public notice contained the information required by 40 CFR 124.10(d), incl uding information about the CGS and its operations; EPA’s proposed revisions to the fac ility’s existing PSD permit; the name, address and telephone number of an EPA staff person to whom questions could be directed; and a brief description of the comment proc edures required under part 124. The notice stated that EPA was providing 30 days for comment in accordance with section 124.10(b). The notice also stated that the Draft Amended Permit, the AAQIR, and othe r documents relevant to the Draft Amended Permit would be available at the EPA Region 9 Office and on the Region 9 website and provided

the location and times at which the administ rative record would be available for public

3 The mailing list for the extended public co mment period, which began on October 21, 2009,

included a number of individuals on EPA’s general distribution list for PSD permits, including the commenter, who had been inadvertently omitt ed from the mailing list for the initial public comment period. The particulari zed notice that EPA sent to th ese individuals of the extended comment period corrected th is procedural error.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

4 inspection. EPA mailed this notice to the appl icant, the Colusa County Air Pollution Control District (CCAPCD), vari ous other federal, state, county, municipal, and tribal government agencies, and to a number of citizens and non-gove rnmental organizations that had requested to be on EPA’s mail or e-mail distribution list for PSD permitting actions. See Mailing List

, Colusa Generating Station PSD Permit Revision, Permit No. SAC 06-01, September 2009. Subsequently, in response to the commenter’s request for additional time to comment, EPA provided notice that it was extending the co mment period for an additional 30 days. See Response A.1; see also Mailing List, Colusa Generating Station PSD Permit Revision, Permit No. SAC 06-01, October 2009. These methods pr ovided the notice called for in 40 CFR 124.10.

The commenter suggests that EPA’s public notice should have contained information about the volume of pollutants at issue and the air quality impacts of the proposed action in relation to the National Ambient Air Quality Standards (NAAQS), and that such information is necessary to allow for informed public participation. We disagr ee. Part 124 requires that a public notice of a draft PSD permit include information about the lo cation and times at which the administrative record will be open for public in spection, and requires that the administrative record include the application, the draft permit, the statement of basis or fact shee t containing EPA’s analyses, and other supporting documentation that may provide in formation about the air quality impacts of the proposed action. 40 CFR §§ 124.10(d)(1)(vi), 124.7, 124.8, 124.9(b). Part 124 does not, however, require that informati on about the volume of pollutants or air quality impacts be included in the public notice itself.

Comment A.3: The commenter stated that he had “found no evidence that Region 9 incorporated the interested parties lists from the [California Energy Commission’s] proceeding or the Air Districts proceeding,” “no evid ence the Notice was pr ovided to the County Supervisors or other required government officials,” and “no evidence of outreach or development of lists of potentially interest ed individuals, organizations or agencies.”

Response A.3: The commenter’s assertions appear to rest on incorrect legal and factual bases. First, to the extent the commenter intended to argue that part 124 require s EPA to provide notice to all parties included on ma iling lists developed by the Calif ornia Energy Commission (CEC) and/or the CCAPCD as part of their respective li censing or permitting processes, this is legally incorrect. Part 124 requires that EPA send public notices of draft PSD permits to specific federal, state, county, municipa l, and tribal government agenci es, in addition to persons on a mailing list developed by EPA. 40 CFR 124.10(c)(1). It does not require that EPA send public

notices to entities included on a list developed by another agency. 4 Second, the commenter’s assertion that EPA did not pr ovide public notice to county supervisors or other required government officials is factually incorrect. See Response A.2 above. Fina lly, to the extent the commenter intended to argue that EPA did not solicit public invol vement or develop a list of

4 We note that for this particular permitti ng action, EPA did obtain the CEC’s most recent mailing list for the CGS licensing action, and we included all persons and entities on the CEC’s list in our mailing list for the Draft Amended Permit. See E-mail dated August 26, 2009, from Chris Davis (CEC) to Shaheerah Kelly (EPA Re gion 9), “Re: Mailing list for the Colusa Generating Station”; see also Mailing List, Colusa Generatin g Station PSD Permit Revision, Permit No. SAC 06-01, September 2009.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

5 interested persons and entities fo r public notice purposes , this is also factually incorrect. EPA solicits public interest in PSD and other permitting actions through the EPA Region 9 website, which invites members of the public to join our e-mail distribution lists by entering their contact information and identifying the facilities or t ypes of permits about which they would like to

receive information. See http://www.epa.gov/region09/air/permit/psd-public-guidelines.html

. As noted above, EPA sent the October 21, 2009 public notice to all persons who had requested to be on EPA’s mail or e-mail distribution list for PSD permitting actions, in addition to all other required entities under part 124. See Responses A.1 and A.2 above. Therefore, we disagree with

the commenter’s assertions.

Moreover, the commenter cannot claim that he wa s harmed by any alleged deficiency in EPA’s public process, given that he received particul arized notice of the Draft Amended Permit through EPA’s mailing list. See Response A.1. The commenter has no standing to complain about third parties not being mailed notice of the Draft Amended Permit. See In re Russell City Energy
Center, PSD Appeal No. 08-01, slip op. at 32 (EAB, July 29, 2008) (citing J&L Specialty Prods., 5 E.A.D. at 79 (stating that “absent any alle ged harm to [petitioner], we fail to see how [petitioner] has standing to complain about some one else allegedly not being mailed notice of the draft permit”)).

Comment A.4: The commenter noted that it appeared EPA was accepting comments only regarding the “proposed permit revision” and aske d that we identify “the [a]uthority for this limitation it feels pi[e]cemeal or bifurcated.” The commenter stated that he would like to comment on the entire permit.

Response A.4: The commenter is correct that only those elements of the permit that EPA proposed to revise were open for public commen t. We are not addressing comments on other elements of the existing PSD permit 5 that remain unaltered, as they are not part of this permitting action. As explained in the AAQIR, the pr oposed revisions do not trigger new PSD requirements because they will not result in a significant emissions increase. 40 CFR 52.21(a)(2)(iv), (b)(2) (referencing definitions of “significant emissions increase” and “net

emissions increase” in sections 52.21 (b)(3), (23) and (40)). In ev aluating applications to revise PSD permits, however, EPA considers whether the change triggers new requirements and whether the requested changes to the permit ensure that the PSD requirements (e.g., BACT and protection of ambient air quality standards) continue to be met. This is necessary even if the permit limits are exceeded by less than a “significant” amount. See Memorandum from G. McCutchen, Chief, NSR Section, to J.D. Sulliv an, Chief, ALO Enforcement Section, Region VI (Nov. 19, 1987); cf. In re Chehalis , PSD Appeal No. 01-06, slip op. at 27-29 (EAB August 20, 2001) (noting absence of any controlling statut ory or regulatory provi sion regarding when a revised BACT analysis is mandated in the contex t of PSD amendments to a previously existing permit, and finding no clear error or abuse of discretion in permitting authority’s decision not to revise the BACT analysis in that case). A ccordingly, we evaluated the proposed changes to ensure compliance with BACT a nd other PSD requirements, and we provided an opportunity for public comment on the proposed permit revisions consistent with the requirements of 40 CFR

5 EPA issued the PSD permit for CGS on Se ptember 29, 2008, following a public process in accordance with the requirements of 40 CFR part 124.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

6 part 124. EPA does not currently have a basis for reopening other elements of the permit that are unaffected by the proposed changes.

B. COMMENTS ON BEST AVAILABLE CONTROL TECHNOLOGY (BACT)

DETERMINATIONS

Comment B.1: The commenter stated that the CGS’s wa ter bath heater is expected to emit carbon monoxide (CO) at 100 pa rts per million by volume on a dry basis (ppmvd) and that “[s]even sources have lower CO emission rates than the CGS’s fu el gas heater, ranging from 27 to 72 ppmvd.” In support of this assertion, th e commenter referenced an e-mail dated April 8, 2009, from Jerry Salamy (CH2M, consultant to PG&E) to Shaheerah Kelly (EPA Region 9). The commenter identified the following permit app lications and CO emissi on rates expressed in ppm at 3% oxygen: AES Puerto Rico Cogen application PR-007 (27 ppm, limestone dryer); BP Exploration, Inc., Milne Po int Production application AK- 047 (27 ppm); South Cal Gas application SCAQMD AN: 347641 (50 ppm); and No rton Energy Storage, LLC application OH0264 (53 ppm), which the commenter asserted “has been verified in practice.” The commenter asserted that “[t]he PSD permit must adopt a lower limit fo r CO emissions for the Water Bath

heater.”

Response B.1: EPA has concluded that the CO emissi on limitation of 100 ppmvd for the CGS

water bath heater is consistent with the BACT limits achieved to date by similar units at other facilities and, therefore, disagree s with the commenter. It appear s that the commenter based his assertions on information provided by the a pplicant in an e-mail to EPA dated May 1, 2009, which transmitted the applicant’s BACT analysis for the water bath heater and also attached an earlier e-mail dated April 8, 2009. See e-mail dated May 1, 2009, from Jerry Salamy (CH2M, consultant to PG&E) to Shaheerah Kelly (EPA Region 9). The attachment to that e-mail

identified the same facilities that the comment er referenced, together with CO emissions limitations ranging from 27 ppm to 112 ppm for various heating de vices. Other than simply reciting the lower figures among this range of emissions limitations, the commenter provided no information to support an argument that the CGS wa ter bath heater is capable of consistently achieving any CO emission limitation below 100 ppmvd.

We have nonetheless independently reviewed the permit limits re ferenced by the commenter and concluded that that none of them compels us to reevaluate the BACT emissions limitations for the CGS water bath heater. First, the CO em ission limitation of 27 ppm (0.02 lb/MMBtu) for BP Exploration (Alaska) Inc. is in correct. The referenced permit fo r BP Exploration (Alaska) Inc., for the operation of the Milne Po int Production Facility, actually contains a CO BACT emission limit of 0.2 lb/MMBtu for each heater, 6 which equates to a concen tration limit of about 266

6 See Alaska Department of Environmental Conservation, Permit No. 200TVP01, Milne Point Production Facility, Section 5, Condition 30 (“Heater CO and NOx BACT Limits”); see also “Format RBLC Report, Control Technology Dete rminations, Milne Point Production Facility, RBLC ID: AK-0047,” Heaters, H-5302A and H- 5302B (emission limits for carbon monoxide), at p. 3 of 15.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

7 ppm. 7 Second, the pre-heater units at the No rton Energy Storage facility, for which the

commenter identifies a CO emissions limita tion of 53 ppm, were never constructed. 8 Finally, several of the identified heating devices appear to operate differently from the CGS water bath heater. For example, the limestone dryer at the AES Puerto Rico facility, which is a coal-fired steam electric cogeneration facility, consists of a crusher in which a stream of heated air both separates (by size fraction) ground li mestone and dries the material. 9 The heater units at the Southern California Gas Company’s Aliso Canyon St ation, which is a natural gas storage field, are integrated into dehydration pl ants that use a liquid absorbent (Triethylene Glycol or TEG) to remove moisture from the gas and then regenera te the spent TEG by heating it to boil off the

absorbed water. 10 The CGS water bath heater serves a different function, i.e., maintaining the temperature of the natural gas combusted at CG S at approximately 75 de grees (Fahrenheit) to minimize operational issues caused by changes in gas temperature. 11 In any case, the permit

limits for AES Puerto Rico and the Aliso Ca nyon Station do not reveal a CO control method other than good combustion practices that coul d further reduce CO emissions from the CGS

water bath heater. In the abse nce of any supporting analyses, the commenter’s mere references to the emissions limitations in these other perm its do not compel us to change our analysis.

Best Available Control Technol ogy (“BACT”) is defined as

an emission limitation based on the maximum de gree of reduction of each pollutant subject to regulation under this Act emitted from or which results from any major emitting facility, which the permitting authority, on a case-by- case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such

7 For purposes of comparison, we have used the c onversion factor used by the applicant in the May 1, 2009 e-mail from Jerry Salamy to Shaheerah Kelly (CO ppm = lb/MMBtu X 1330) to estimate the ppm emissions rate based on the correct permit limit of 0.2 lb/MMBtu.

8 Norton Energy Storage, L.L.C. received a pe rmit in May 2002 authorizing construction of several pre-heater units each subject to a CO emissions limitation of 0.040 lb/MMBtu (roughly 53 ppm, using the conversion factor described in fn. 7, ibid. ), but according to Ohio EPA, these pre-heater units were never installed. See e-mail dated December 2, 2009, from Laura Miracle (Ohio EPA) to Shaheerah Kelly (EPA Region 9), “RE: Norton Energy”; see also Ohio EPA, Final Permit to Install Modification, Nort on Energy Storage, L.L.C., Facility ID: 1677100033 (effective May 23, 2002); Ohio EPA, Final Air Pollution Permit-to-Install and Operate for Norton Energy Storage, L.L.C., Permit No. 0103955, at pg. 2 (effective November 24, 2008) (identifying currently permitted emission units).

9 See Final Prevention of Significant Deterioratio n of Air Quality (PSD) Permit for the AES Puerto Rico Cogeneration Plant (AES-PRCP ), Attachment I: Project Description, available at http://www.epa.gov/Region2/air/permit/AES08102004.pdf

. 10 See South Coast Air Quality Management Dist rict, Permit No. 347641, Southern California Gas Company: Aliso Canyon Station, “Process Description”; see also CARB BACT Clearinghouse Report for Southern California Gas Company at http://www.arb.ca.gov/bact/bac tnew/determination.php?var=903

. 11 See letter dated November 18, 2008, from Jon Ma ring (PG&E) to Shaheerah Kelly (EPA Region 9), “Pacific Gas and Elect ric Company Colusa Generating Station, PSD Permit Number:

SAC 06-01.”Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

8 facility through application of production processes and available methods, systems, and techniques, including fuel clea ning, clean fuels, or treatmen t or innovative fuel combustion techniques for control of each such pollutant.

Clean Air Act § 169(3), 42 U.S.C. 7479(3) ; 40 CFR 52.21(b)(12); 40 CFR 51.166(b)(12).

EPA applies a five-step “top-down” review process in developing PSD permits. The first step is to identify all “available” control options for th e emissions unit in question—that is, those air pollution control technologies or techniques with a practical po tential for application to the emissions unit and the regulated pollutant under evaluation. The second step of the BACT topdown review process is to eliminate “technically infeasible” options based on source-specific (or emissions unit-specific) factors. A demonstration of technical infeasibility should show, based on physical, chemical, and engineer ing principles, that technical difficulties would preclude the successful use of the control option on the emissi ons unit under review. In the third step, all remaining control technologies are ranked by co ntrol effectiveness fo r the pollutant under review, with the most ef fective control alternativ e at the top. The list of control alternatives should include, for each alternative, informati on about control efficiencies, expected emission rate, expected emissions reduction, economic im pacts, environmental impacts, and energy impacts. In the fourth step, the permitting agency evaluates the energy, environmental, and economic impacts of each of the listed control options, beginning from the top. If collateral environmental impacts justify elimination of the fi rst option, the next most stringent alternative is considered. This process continues until the technology under consideration cannot be eliminated by any source-specific environmenta l, energy, or economic impacts that render the option inappropriate as BACT. See, e.g., In Re Prairie State Generating Company, LLC , PSD Appeal No. 05-05, slip op. at 17-18 (EAB, August 24, 2006), rev. denied, Sierra Club v. EPA

, 499 F.3d 653 (7 th Cir. 2007); In Re Newmont Nevada Energy Investment, LLC , 12 E.A.D. 429 at 435 (EAB 2005); In re Knauf Fiber Glass , 8 E.A.D. 121, 129-31 (EAB 1999); In Re Rockgen Energy Center , 8 E.A.D. 536 at 541-42 (EAB 1999).

As the EAB has noted, “[b]ecause BACT is a prec onstruction site-specific determination, BACT review inherently requires a judgment regarding wh at can reasonably be expected in the future,” but also must be “solidly grounded on what is presently known about the selected technology’s

effectiveness at controlli ng pollutant emissions.” In Re Newmont Nevada Energy Investment,
LLC, 12 E.A.D. 429 at 440 (EAB 2005). The Boar d has further acknowledged that available data on the past performance of a selected technology may show that “the control efficiency achievable through the use of the technology may fl uctuate so that it woul d not always achieve its optimal control efficiency,” and that appl ication of identical te chnology may not yield

identical emission limits at different facilities. Id. at 442.

EPA does not currently have sufficient data to support a conclusion that the water bath heater proposed for the CGS facility can consistently achieve a CO emission limit of less than 100 ppm, and the commenter has not provided any such information. A CO emission limitation of 100 ppm reflects good combustion practices and is w ithin the range of emission limitations for comparable heating devices that we ha ve identified in EPA’s RACT/BACT/LAER Clearinghouse and in the San Jo aquin Valley Air Pollution Contro l District (SJVAPCD) BACTColusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

9 Clearinghouse. 12 Accordingly, we conclude that th e proposed 100 ppm emission limit for CO represents BACT for the water bath heater.

Comment B.2: The commenter stated that the CGS’s wa ter bath heater is expected to emit nitrogen oxides (NOx) at 30 ppmvd and that “[b]ased on a review of the EPA’s RACT/BACT/LAER Clearinghouse, California Air Resources Board Statewide [BACT] Clearinghouse, and the San Joaquin Valley Air Pollution Control Districts [BACT] Clearinghouse there are 4 sources which report a lower NOx emission rate than the CGS WBH, ranging from 9 to 20 ppmv of NOx.” The comm enter identified the following sources and emission rates expressed in ppm at 3% oxyge n: NELCO Products, ap plication SCAQMD AN: 371784 (12 ppm, force circulation oil heater), and South Cal Gas, a pplication SCAQMD AN: 347641 (20 ppm, heater). The commenter also asserted that “[t] he SJVUAPCD BACT clearinghouse lists [two] BACT determinations of 9 ppm and 12 ppm as BACT for NOx emissions from a pre heater,” referencing as support an e-mail dated April 8, 2009, from Jerry Salamy (CH2M, consultant to PG&E) to Shaheerah Kelly (EPA Region 9).

Response B.2: EPA has concluded that the NOx emissi on limitation of 30 ppmvd for the CGS

water bath heater is consistent with the BACT limits achieved to date by similar units at other facilities and, therefore, disagree s with the commenter. It appear s that the commenter based his assertions on information provided by the a pplicant in an e-mail to EPA dated May 1, 2009, which transmitted the applicant’s BACT analysis for the water bath heater and also attached an earlier e-mail dated April 8, 2009. See e-mail dated May 1, 2009, from Jerry Salamy (CH2M, consultant to PG&E) to Shaheerah Kelly (EPA Region 9). The attachment to that e-mail

identified the same facilities that the comment er referenced, together with NOx emissions limitations ranging from 9 ppm to 81 ppm for va rious heating devices. Other than simply reciting the lower figures among this range of emissions limitations, the commenter provided no information to support an argument that the CGS wa ter bath heater is capable of consistently achieving any NOx emission limitation below 30 ppmvd.

We have nonetheless independently reviewed the permit limits re ferenced by the commenter and concluded that that none of them compels us to reevaluate the BACT emissions limitations for the CGS water bath heater. First, several of the identified heating devi ces appear to operate differently from the CGS water bath heater. For example, the heater at the NELCO Products facility, which manufactures plasti c panels used in the manufacturi ng of printed circuit boards, is

a thermal oil heater rated at 19 MMBtu/hour that is used to he at hot oil circulating inside

12 See, e.g., Format RBLC Report, Crescent City Powe r, LLC, Crescent City Power, RBLC ID: LA-0192 (CO emission limits for Fuel Gas Heat ers) and Format RBLC Report, AES Red Oak, LLC, AES Red Oak, RBLC ID: NJ-0036 (CO em ission limits for fuel gas heater), available at http://cfpub.epa.gov/RBLC/htm/bl02.cfm ; SJVAPCD BACT Clearinghouse at section 1.8.4A (CO emission limit for heater treater) and secti on 1.8.4C (CO emission limit for heater treater),

available at http://www.valleyair.org/busind/pto/bact/chapter1.pdf . The CARB BACT Clearinghouse does not identify CO emissions limits for heating devices that are comparable to

the CGS heater. See BACT Clearinghouse Search Results, All Districts, Category: Heater-Other Process, Pollutant: CO, available at http://www.arb.ca.gov/bact/bactnew/rptpara.htm

.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

10 lamination presses. 13 EPA does not currently have informa tion demonstrating that the ultra-low NOx burner technology used in this thermal oil heater 14 is an available control option for the CGS water bath heater, which is rated at 10 MMBtu/hour and is used to maintain the temperature of the natural gas combusted at CGS at approx imately 75 degrees (Fahrenheit) to minimize operational issues. 15 The heater units at the Southern California Gas Company’s Aliso Canyon Station, as discussed in Respons e B.1 above, are integrated into dehydration plants that use a liquid absorbent (TEG) to remove moisture from natural gas and then regenerate the spent TEG by heating it to boil off the absorbed water. 16 These heating devices also appear to operate differently from the CGS water bath heater, al though the NOx control method is similar to that proposed for CGS, i.e., low-NOx burners and flue gas recirculation. 17 In any case, neither of these permit limits demonstrates the availability of a NOx control method that could feasibly

reduce NOx emissions from the CGS wa ter bath heater below 30 ppm.

Second, the commenter references a NOx emi ssion limitation of 9 ppm in the SJVAPCD’s BACT Clearinghouse, but without id entifying any particular facility or control method. We have

reviewed the SJVAPCD’s BACT Clearinghouse and identified a source called Central Valley Meat Co. that had applied fo r a permit containing a NOx emission limit of 9 ppmvd at 3% oxygen (0.011 lb-NOx/MMBtu) for a dryer burner. 18 According to the SJVAPCD, however, this application was denied and the source has not re-applied. 19 Finally, the commenter references a NOx emission limitation of 12 ppm in the SJVAP CD’s BACT Clearinghouse, again without identifying any particular facili ty or control method. We have reviewed the SJVAPCD’s BACT Clearinghouse and identified a source called Occi dental of Elk Hills, Inc., that applied for a permit containing a NOx emission limit of 12 ppmvd for a non-refine ry process heater. 20
According to the SJVAPCD, this unit has not yet demonstrated compliance with the 12 ppm

NOx limit. 21 In the absence of any supporting analyses , the commenter’s mere references to the emissions limitations in these other permits do not compel us to change our analysis.

13 See South Coast Air Quality Management Dist rict, Permit to Construct, A/N 371784, NELCO Prod. Inc., “Process Description.”

14 See CARB BACT Clearinghouse Report fo r NELCO Products, Inc., at http://www.arb.ca.gov/bact/bac tnew/determination.php?var=685

. 15 See letter dated November 18, 2008, from Jon Ma ring (PG&E) to Shaheerah Kelly (EPA Region 9), “Pacific Gas and Elect ric Company Colusa Generating Station, PSD Permit Number:

SAC 06-01.”

16 See South Coast Air Quality Management Dist rict, Permit No. 347641, Southern California Gas Company: Aliso Canyon Station, “Process Description.”

17 See CARB BACT Clearinghouse Report for Sout hern California Gas Company at http://www.arb.ca.gov/bact/bac tnew/determination.php?var=903

. 18 See SJVAPCD BACT Clearinghouse, http://www.valleyair.org/ busind/pto/bact/chapter1.pdf

, at section 1.9.13

. 19 See e-mail dated December 2, 2009, from Jim Swan ey (SJVAPCD) to Shaheerah Kelly (EPA Region 9), “RE: Request for BACT/Permit information.”

20 See SJVAPCD BACT Clearinghouse, http://www.valleyair.org/ busind/pto/bact/chapter1.pdf

, at section 1.8.5.

21 See e-mail dated March 2, 2010, from Jim Swaney (SJVAPCD) to Shaheerah Kelly (EPA Region 9), “RE: Request for BACT/Permit information.”Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

11 In sum, EPA does not currently have sufficient da ta to support a conclusion that the water bath heater proposed for the CGS fac ility can consistently achieve a NOx emission limit of less than 30 ppm, or that pollution control technologies other than low-NOx burners are feasible for this heater, and the commenter has not provided any su ch information to supp ort his assertion. A NOx limit of 30 ppm based on low-NOx burner technology is within the range of emission limitations for comparable heating devices that we have identified in EPA’s RACT/BACT/LAER Clearinghouse and in SJVAPCD’s BACT Clearinghouse. 22 Accordingly, we conclude that the proposed 30 ppm emission limit for NOx represents BACT for the water

bath heater. See also Response B.1. above.

Comment B.3: The commenter stated that because the applicant is removing the auxiliary boiler, EPA’s statement of basis “needs to ev aluate the impact and BACT for startup and shutdowns times and emissions.” Specifically, th e commenter stated that according to the July 12, 2006 application, this natural ga s-fired auxiliary boiler rated at 44 million BTU/hr was to be “included to provide steam to shorten the time required for plant starts,” and that EPA “must require the project to meet lower startup and shut down times and emissions since they are allowing removal of the auxiliary Boiler....” The commenter also alleged that the permit’s current startup/shutdown limits do not meet BA CT requirements, and that combined cycle turbines currently being permitted can achieve col d, warm, and hot starts taking no longer than 1 hour to meet normal steady state emission limits. The commenter asserted that these “fast start machines are now being utilized in most new pow er plant applications su ch as the new proposed Contra Costa Generating Plant, the Willow Pass Generating Stati on and the Marsh Landing Project.” The commenter provided informati on about the technologies and emission rates

associated with each of these th ree facilities and asserted that “EPA in a recent consent decree with PG&E has required fast start technology on GE Frame 7 machines the same equipment used

at Colusa.” The commenter asserted that star tup and shutdown emission rates “are much greater than steady state emissions for NOx and CO th erefore, BACT for NOx emitted during startup and shutdown is not covered by the steady-stat e NOx Top-Down Analysis.” Finally, the commenter identified and described the GE “OpFle x” and “Rapid Response” technologies as two “possible control technologies [that] could be utilized.”

Response B.3: We are not revising the BACT emission lim its in the PSD permit for startup and shutdown periods as part of this permitting acti on, and we have no information indicating that the changes to the CGS facility design render the existing permit limits for startup and shutdown operations unachievable. To the extent the comme nter intended to argu e that removal of the auxiliary boiler from the facility design requires a reevaluation of the permit conditions for

22 See, e.g., Format RBLC Report, Crescent City Powe r, LLC, Crescent City Power, RBLC ID: LA-0192 (NOx emission limits for Fuel Gas He aters) and Format RBLC Report, Port Washington Generating Station, RBLC ID: WI- 0227 (NOx emission limits for Gas Heater),

available at http://cfpub.epa.gov/RBLC/htm/bl02.cfm ; SJVAPCD BACT Clearinghouse at section 1.6.16 (NOx emission limit for Drye r – Seed Processing), section 1.6.21A (NOx emission limit for natural-gas fired, conveyo r-fed, flake cereal dryer), section 1.6.21 (NOx emission limit for flake cereal dryer), and sectio n 1.9.9 (NOx emission limit for natural gas fired paper products dryer), available at http://www.valleyair.org/bus ind/pto/bact/chapter1.pdf

.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

12 startup and shutdown operations, these arguments are unsupported. 23 To the extent the commenter intended to challenge the startup a nd shutdown limits in th e initial PSD permit, which became final and effective on Septem ber 29, 2008, these arguments are late and are outside the scope of our current action. See Response A.4 above. The commenter has provided no justification for his late challe nge to this prior action. We note also that it is not unusual for a permit applicant to make minor changes in engi neering design during th e construction phase and to request corresponding permit revisions to accommodate such changes.

Comment B.4: The commenter asserted that the PSD an alysis must include an evaluation of

BACT to control PM2.5 emissions. The comme nter quoted from EPA’s discussion of PM2.5

emissions in the statement of basis for the initial PSD permit EPA proposed for comment in May 2008 (May 2008 AAQIR), which stated that the re view of PM10 emissions would serve as a surrogate for review of PM2.5 emissions consis tent with EPA policy at that time. The

commenter asserted that “EPA has decided to re peal its recently adopte d provision in 40 C.F.R. 52.21(i)(1)(xi) that directs permitting agencies to use the so called surrogate approach in addressing PM2.5 compliance issues.”

Response B.4: EPA disagrees with the commenter’s asser tion that EPA is required to evaluate BACT for PM2.5 emissions as part of this perm it action. First, to the extent the commenter intended to challenge the rationa le in EPA’s May 2008 AAQIR for treating the review of PM10 emissions as a surrogate for review of PM2.5 emi ssion, this challenge is late. EPA issued the final PSD permit for CGS on September 29, 2008 24 , and the 30-day period within which challenges to that action could be brought under 40 CFR part 124 expi red on October 30, 2008. The commenter has provided no justification for hi s late challenge to this prior action. Second, as to the current permitting action, we explained in the AAQIR that the proposed changes to the source do not trigger new PSD requirements because they will not result in a significant net emissions increase as defined in 40 CFR 52.21(b)(3 ) and (23). We also explained that the proposed changes would significantly reduce the source’s annual and ho urly emissions of both

PM and PM10. See AAQIR at pp. 3 and 6. As a technical ma tter, the substantial reductions in PM/PM10 emissions resulting from the proposed cha nges will include reductions in the facility’s

23 We note that the performa nce testing requirements in the permit remain unchanged. See Condition X.F of initial PSD permit and Amended PSD Permit. If EPA determines based on source testing data that the st artup and shutdown BACT emissi on limits in the permit are not achievable, EPA will reevaluate these permit conditions, as well as the air quality impact analyses based on these emission limits. See AAQIR for initial PSD permit (May 2008 AAQIR) at pg. 20.

24 As of this date, under a provi sion commonly referred to as th e PSD “grandfathering provision” for PM2.5, permit applicants who had submitted comp lete PSD permit applications prior to July 15, 2008 were specifically exempted from PS D requirements as applied to PM2.5. 40 CFR 52.21(i)(1)(xi) (2008). EPA determined that the CGS’s permit application was complete on March 14, 2007. See Administrative Completeness letter for PSD application from Gerardo Rios, Chief, Permits Office, EPA Region 9, to Andrew Welch, Project Manager, E&L Westcoast, LLC (March 14, 2007). As such, th e CGS’s initial PSD permit was exempt from PM2.5 PSD requirements under the regulations that were in effect at the time of permit issuance.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

13 PM2.5 emissions, which are a subset of PM/PM10. Absent a significant net emissions increase in PM2.5 emissions, PSD requirements for PM2.5 emissions do not apply.

The commenter references EPA’s recent statemen ts about the use of PM10 as a surrogate for PM2.5 in PSD permitting actions. It appears that the commenter is referring to EPA’s decision to stay the provision in 40 CF R 52.21(i)(1)(xi) (the “grandfathering” provision for PM2.5) that allows permit applicants who had submitted comple te PSD permit applications prior to July 15, 2008 to continue using PM10 analyses as surrogat es for PM2.5 analyses. EPA administratively stayed this provision effec tive June 1, 2009 (74 FR 26098; see also 74 FR 48153, extending stay to June 22, 2010) and has recently proposed to repeal the provision entirely. 75 FR 6827 (February 11, 2010). We note first that the Agency has not yet taken final action on this proposal. In any case, EPA is not interpreting its proposed repeal of the grandfathe ring provision to have any effect on permits that became final and effective before the June 1, 2009 stay of section 52.21(i)(1)(xi) by the Administrator. 75 FR at 6833. As stated above, EPA issued the final PSD permit for CGS on September 29, 2008, prior to th e Administrator’s June 1, 2009 stay of the PSD grandfathering provision for PM2.5. Accordi ngly, this proposed action has no effect on the CGS’s initial PSD permit.

In sum, to the extent the commenter intended to argue that EPA was required to evaluate PM2.5 emissions as part of the CGS’s initial PSD permit, which became final and effective on September 29, 2008, that argument is late and in any case has no merit for the reasons stated

above. To the extent the commenter intended to argue that EPA is required to evaluate PM2.5 emissions as part of the current permit revision, this argument also has no merit, because the changes do not result in any signi ficant emissions increase as defined in 40 CFR 52.21(b)(40) ( see 40 CFR 52.21(a)(2)(iv)). As such, EPA is not re quired to evaluate BA CT or any other PSD requirement as applied to PM2.5 emissions as part of this permitting action.

C. COMMENTS ON ANALYSIS OF SO URCE IMPACTS ON AIR QUALITY

Comment C.1: The commenter asserted that the PSD air quality impact analysis must contain a

demonstration that the CGS fac ility “will not contribute to an exceedance of the PM2.5 NAAQS for annual and 24 hour standards.” In support of this assertion, the commenter provided excerpts from the discussion in EPA’s AAQIR of the reas ons why this permit revi sion did not require a reevaluation of EPA’s prior air quality modeling analyses, an d asserted that “EPA never examined PM2.5 ambient air [quality] impacts in the 2008 [statement of basis].” The commenter also quoted from EPA’s discus sion of PM2.5 emissions in th e May 2008 AAQIR, which stated

that the review of PM10 emissions would serv e as a surrogate for review of PM2.5 emissions consistent with EPA policy at that time, and assert ed that “EPA has decided to repeal its recently adopted provision in 40 C.F.R. 52.21(i)(1)(xi) th at directs permitting agen cies to use the so called surrogate approach in addressing PM2.5 co mpliance issues.” Addi tionally, the commenter stated that “[w]hile the project has proposed a reduction in PM2.5 emissi ons the change in the physical configuration has led to higher ambient air concentrations for PM2.5,” and that “[t]he projects PM2.5 ambient air quality impact change from 2.73 ug/m3 in the original FDOC to 3.3 ug/m3 with the projects modifi cations triggering an assessmen t of the project PM2.5 impacts under the new EPA PM2.5 regulations.” In s upport of these assert ions, the commenterColusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

14 referenced the Final Determination of Complia nce issued by the CCAPCD to PG&E in June 2007 and the petition for license amendment submitted by PG&E to the CEC in August 2008.

Response C.1: We disagree with the commenter’s asser tion that EPA is required to evaluate PM2.5 ambient air quality impacts as part of this action. See Response B.4 above. The commenter’s assertion that the proposed changes will result in increased ambient concentrations of PM2.5 is unsupported, and his references to the CCAPCD’s Final Determination of Compliance (FDOC) and materials submitted by th e applicant to the CEC pursuant to CEC licensing requirements are outside the scope of our action. EP A is issuing this PSD permit pursuant to the federal requirements in Sec tion 165 of the CAA and EPA’s implementing regulations in 40 CFR 52.21 and part 124. 40 CFR 52.21(q). The CCAPCD and CEC implement state and local requirements, which do not govern EP A’s permit action.

Comment C.2: The commenter asserted that EPA’s nitr ogen deposition analysis is defective because it relies on the assessment provided in the applicant’s 2006 PSD permit application, which did not include nitrogen deposition impact s from the project’s ammonia emissions. The commenter asserted that the CGS facility will emit 159 tpy of ammonia and that these emissions will have a larger impact than the project’s NOx (including NO2) or SO2 emissions. The commenter also stated that “the original nitrog en deposition analysis” did not include the impacts from the Delevan Compressor Station.

Response C.2: It appears the commenter is challenging the adequacy of the soils and vegetation analyses that EPA provide d in the May 2008 AAQIR. See May 2008 AAQIR, section 10.2 (discussing applicant’s analysis of the potenti al effects of NO2 and SO2 emissions from the source as well as estimates of total nitrogen deposition). These challenges are late. As we have noted above, EPA issued the final PSD permit for CGS on September 29, 2008, and the period within which challenges to that action could be brought has long expired. The commenter has provided no justification fo r his late challenge to this prior action.

To the extent the commenter intended to argue that EPA is required to reevaluate the effects of nitrogen deposition as part of the AAQIR for the Draft Amended Permit, this argument has no merit. As we explained in the AAQIR, the pr oposed permit revisions do not alter any of the assumptions underlying our prior an alyses of air quality and addi tional impacts. AAQIR at 4. In fact, because the proposed revisions reduce the f acility-wide emission limits for all pollutants covered by the permit and significantly reduce the annual and short-term emission limitations for

PM and PM 10 , our prior analyses of air quality and additional impacts are even more conservative (i.e., overestimated) than they we re for the initial PSD permit. Finally, the comment about impacts from the Delevan Compresso r Station (DCS) is outsi de the scope of this permitting action as the DCS is not covered by this Draft Amended Permit. See Response C.3

below.

Comment C.3: The commenter stated that “the modifica tion of the CGS triggers the adjustment of baseline emissions to include the adjacent Delevan compressor Station.” The commenter asserted that the Delevan compressor station has NOx emissions of 356 tpy and that these emissions, added to the CGS fac ility’s emission, would amount to 540 tpy of NOx on “adjacent parcels owned and operated by PG&E connected by a common pipeline,” which “equates to 1.47Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

15 tons per day of NOx emissions from the same company PG&E.” The commenter asserted that the combined NOx emissions from the CGS and the Delevan compressor station “must be included in the soils and vegetation analysis to determine if there are any significant impacts to biological and agricultural resources.” Apparently in support of these assertions, the commenter pasted an excerpt from EPA’s description of the nearby Delevan compressor station in the May 2008 AAQIR.

Response C.3: First, to the extent the commenter inte nded to argue that emissions from the Delevan Compressor Station (DCS) should be treated as emissions of the source under this Draft Amended Permit, this is incorrect. The PSD pr ogram applies to any “n ew major stationary source” or “major modification” to an existing source as those terms are defined in 40 CFR 52.21(b). 40 CFR 52.21(a)(2)(ii). The existing DCS is neither part of the new major stationary source authorized by the initial PSD permit nor pa rt of any major modification to an existing source. As such, the DCS is not subject to PSD requirements.

Second, the commenter’s reference to EPA’s discussion of the DCS in the May 2008 AAQIR appears to rest on an incorrect understanding of that discussio n. EPA stated in the May 2008 AAQIR that the DCS and the CGS would be treate d as a single source for purposes of title V operating permit requirements. See May 2008 AAQIR at pg. 7. This has no bearing on the PSD analysis, as title V permits implement separate CAA authorities. EPA also stated in the May 2008 AAQIR that if the CGS facility were subsequently modified, the source’s “baseline actual emissions” under 40 CFR 52.21(b)(48) would compri se emissions from both the CGS and the

DCS. Id. This will be true after the source begins normal operations, at which point it will be required to calculate the emissions increase resu lting from any source mo dification in accordance

with the definitions of “basel ine actual emissions” (§ 52.21(b )(48)) and “projected actual emissions” (§52.21(b)(41)) or “potential to em it” (§ 52.21(b)(4)), as applicable. 40 CFR 52.21(a)(2)(iv). 25 Thus, the discussion in our May 2008 AAQIR addresses requirements that may apply to the DCS if the CGS facility seeks to modify after it begins normal operations. It does not affect our analysis for the current permit revision, which is designe d to ensure that the PSD requirements that applied to the initial constr uction authorization conti nue to be satisfied.

See Response A.4 above. As such, the commenter’s assertion that the DCS should be included in our current PSD analysis is incorrect.

Finally, to the extent the commenter intended to challenge the adequacy of the soils and vegetation analyses that EPA provided in the May 2008 AAQIR, this challenge is late. See Response C.2 above.

D. COMMENTS ON ENDANGERED SPECIES ACT (ESA) CONSULTATION

PROCESS

Comment D.1: The commenter asserted that consultation with the U.S. Fish & Wildlife Service (FWS) must be reinitiated to address the project’s impacts on the Swainson’s Hawk. The commenter stated that the applicant had recently requested an amendment to its CEC license “to

25 Currently, because the source has not yet be gun normal operations, emissions are calculated based on the source’s potential to emit. 40 CFR 52.21(b)(21)(iv).Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

16 allow slight modification of the size and layout of the switchyard and the electric transmission

interconnection route.” The commenter stated th at the “CEC final deci sion approved a total of 12 new towers, four on site (within the 100 acre pa rcel and eight offsite[)],” and that “[t]he applicant’s new proposal will add a total of 20 new towers with eight on site and 12 offsite.” The commenter stated that “[a]s stated on page 2-2 of the amendment, ‘Construction of the new towers has the potential to slightly increase permanent impacts to Swainson’s hawk foraging habitat,’” that “[t]he reconfigured switchyard/s ubstation will result in an additional 0.87 acre of disturbance of annual grassland,” and that “[t]he two project component changes will result in a

total of 1.15 acres of additiona l impacts to annual grassla nd beyond what was originally permitted in the CEC’s Final Decision for the CGS project.’” The commenter provided excerpts from the May 2008 AAQIR and asserted that “[t] he Biological opinion did not include impacts and mitigation for the Swainson hawk.” In sum, the commenter stated that “[n]either the original biological opinion nor the current [AAQIR] has an alyzed the impacts from the placement of six new transmission towers or the realignment of the original transmission towers.” The commenter referenced 50 CFR § 402.1(3) in support of these assertions.

Response D.1: These arguments have no merit. ESA section 7 consultation requirements do not currently apply to the Swainson’s hawk because it is not a listed species under the Federal ESA.

See U.S. Fish and Wildlife Service (FWS), Species Profile for Swainson’s hawk ( Buteo swainsoni) at http://ecos.fws.gov/speci esProfile/profile/speciesProfile.action?spcode=B070

. We

note that EPA contacted the FWS to discuss the potential need for additional consultation as a result of the proposed permit revisions. Specifi cally, we evaluated the proposed changes to the CGS design and determined that issuance of th is amended PSD permit wo uld have no effect on federally listed endangered species or critical habitats. We provi ded our analysis to the FWS and requested a response as to whether the FWS object ed to our conclusion. In response, the FWS

confirmed that it would not need to amend th e Biological Opinion issu ed on March 14, 2008 for

the CGS's initial construction authorizations. See e-mail dated August 13, 2009, from Michelle Tovar, FWS, to Shaheerah Kelly, EPA Region 9, “Re: ESA Consultation for Colusa Generating Station.” As such, EPA has satisfied its obliga tions under the ESA for this permit. Finally, the

commenter’s assertions about the CEC license a nd the applicant’s petition to amend the license are outside the scope of this permitting action. EPA is issuing this PSD permit pursuant to the federal requirements in Section 165 of the CAA and EPA’s implementing regulations in 40 CFR 52.21 and part 124. 40 CFR 52.21(q). The CEC impl ements State law, which does not govern EPA’s permit action.

Comment D.2: The commenter stated that the applicant’ s addition of the wet surface air cooler (WSAC) unit will increase operational water use by 21 acre feet per year (AFY), from 130 AFY to 151 AFY, and asserted that th e implications and environmental impact of this additional water usage should be discussed in EPA’s statement of ba sis. The commenter also asserted that “[t]he applicant’s agreement with the Glen-Colusa Wate r District guarantees 130 AFY for the project but any additional water is subject to the wate r shortage provisions in Article 9A of the agreement.”

Response D.2: These arguments have no merit. Ne ither the CAA nor EPA’s implementing regulations requires EPA to evaluate the impact s of water usage in the statement of basis (AAQIR) for this Draft Amended Permit, and the commenter identifies no such support for hisColusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

17 contention. EPA has, however, evaluated these pote ntial impacts as part of its ESA consultation process with the FWS. Based on the information EPA provided to the FWS about the project’s water usage, the FWS confirmed th at it would not need to amend the Biological Opinion issued on March 14, 2008 for the CGS's initial construction authorizations. See e-mail dated August 13, 2009, from Michelle Tovar, FWS, to Shaheerah Kelly, EPA Re gion 9, “Re: ESA Consultation for Colusa Generating Station.” The commente r’s assertion about the applicant’s agreement

with the Glen-Colusa Water District is outside the scope of this permitting action, as that agreement is not subject to PSD.

E. OTHER COMMENTS

Comment E.1: The commenter requested that EPA info rm him of whether this permit revision “includes an extension of the permit term” or wh en the permit expires. The commenter further asserted that “this modification (while not disclose d in the public notice) appears to constitute an

extension of the 18 month commencement of construction deadline f ound in 40 CFR 52.21 and so it should be disclosed as such in the public notice and be processed consistent with ‘EPA Region IX Policy on PSD Permit Extensions Dated September 8, 1988....”

Response E.1: These arguments have no merit. The comme nter appears to be referring to the provision in 40 CFR 52.21(r)(2) th at states that a PSD permit “shall become invalid if

construction is not commenced within 18 months afte r receipt of such approva l, if construction is discontinued for a period of 18 months or more, or if construction is not completed within a reasonable time.” The purpose of this provision is to ensure that sources constructed long after receipt of a PSD permit are reev aluated in accordance with current BACT requirements. EPA issued the PSD permit for CGS on September 29, 2008, and the permittee commenced

construction of the CGS f acility on October 1, 2008, 26 well within the 18-month commencement of construction deadline in section 52.21(r)(2). The permittee has no need for an extension of

the18-month commencement of construction de adline and, indeed, EPA did not propose any

such extension in the Draft Amended Permit. Accordingly, the EPA policy document on PSD permit extensions that the commenter refe rences is not releva nt to this action.

Comment E.2: The commenter stated that this pe rmit “appears to be based upon a PSD application which was received by Region 9 on December 22, 2006,” and that “[t]his data appears to be outdated.”

Response E.2: This generalized statement lacks suffici ent specificity for EPA to provide a meaningful response. Moreover, this permit revision is based upon an application for permit revision that EPA received on November 24, 2008, not December 22, 2006. The commenter’s assertion is unsupported.

26 See letter dated August 26, 2009, from Jon Maring (P G&E) to Director, Air Division (EPA Region 9), “RE: Pacific Gas a nd Electric Company Colusa Generating Station, PSD Permit Number SAC 06-01.” As of March 2010, constr uction on the CGS is 74% complete, according

to the CEC website. See http://www.energy.ca.gov/sitingcas es/all_projects.html#construction

.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

18 Comment E.3: The commenter stated that “[i]t appear s that comments were received from

CARE then withdrawn on the original permit after some settlement with CARE. I hereby submit those comments of CARE as my own at this time.”

Response E.3: This generalized statement lacks suffici ent specificity for EPA to provide a meaningful response. Moreover, part 124 states that materials submitted in support of comments “shall be included in full and may not be incor porated by reference, unle ss they are already part of the administrative record in the same proceed ing, or consist of State or Federal statutes and regulations, EPA documents of ge neral applicability, or other generally available reference

materials.” 40 CFR 124.13. Comme nts that EPA received during the public comment period on the initial PSD permit are neither part of the ad ministrative record for this action nor properly treated as generally available reference material s. As such, the commenter cannot incorporate by reference those public comments into this proceeding.

Comment E.4: The commenter stated that “[i]t a ppears that greenhouse gases were not adequately analyzed for the original permit or the modification,” and that he “would like to understand what greenhouse gases will be emitt ed, [and whether] the EPA considers them subject to regulation and comment.” In what ap pears to be a related argument, the commenter

asserted that he recalled no res ponse to his previous inquiries regarding this facility, which “would seem to discourage public pa rticipation,” and that “[w]hile the polluters appear to enjoy unbridled cooperation even the Remand from the EAB has not encouraged regulators to respond to the public.” The commenter further asserted that the public would “lik ely be interested” if they were informed of the e ffects of this plant through outreach, that he did not have the “expertise or resources to participate to a degr ee that other organizati ons have in other PSD permits,” and that “[i]f the other organizations that have participated in other PSD permits in the region received Notice of this pr oceeding they may participate.”

Response E.4: First, as to the comments about greenhous e gases, EPA interprets the definition of “regulated NSR pollutant” in 40 CFR § 52.21(b)(50) to ex clude pollutants for which EPA regulations only require monitoring or reporting, but to include each pollutant subject to either a provision in the CAA or a regula tion adopted by EPA under the CAA that requires actual control of emissions of that pollutant. See Memorandum from Stephen L. Johnson, Administrator, EPA, to Regional Administrators, “RE: EPA’s Interpretation of Regulations that Determine Pollutants Covered By Federal Prevention of Significant Deterioration (PSD) Permit Program” (December 18, 2008). Since there are presently no EPA regul ations limiting emissions of greenhouse gases, we are not currently establishing limitations on gr eenhouse gases in PSD permits for sources that emit these substances. Accordingly, we have not evaluated greenhouse gases either in CGS’s initial PSD permit or in this amended permit.

We note, however, that EPA is moving forward in a careful and deliberate manner to fashion a reasonable and common-sense approach to addr ess greenhouse gases emissions and climate change. See 74 FR 49454 (September 28, 2009) (Proposed Rulemaking To Establish Light-Duty

Vehicle Greenhouse Gas Emission Standard s and Corporate Average Fuel Economy Standards); 74 FR 55292 (October 27, 2009) (Prevention of Signifi cant Deterioration and Title V Greenhouse Gas Tailoring Rule, Proposed Rule); 74 FR 56260 (October 30, 2009) (Mandatory Reporting of Greenhouse Gases, Final Rule).Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

19 Second, as to the commenter’s apparently relate d arguments about inadequacy in EPA’s public process on the Draft Amended Permit, see Responses A.1, A.2, and A.3 above.

Comment E.5: The commenter stated that the revised pe rmit reduces the facility’s hourly PM2.5 emissions from 20 pounds per hour (lb/hr) to 13. 5 lb/hr and asserted that “[t]his is an administrative change as no new pollution cont rol equipment or operating changes are being proposed.” The commenter also as serted that the permit “fails to establish a basis for these reductions and they appear to lower the proj ects PM2.5 emission to address the project’s [exceedance] of the 5% FLAG level of concern for visibility at the Yolla Bolly-Middle Eel Wilderness Area.” Apparently in support of thes e assertions, the commenter quoted extensively from an EPA policy document on “sham pe rmits” under the New Source Review permit

program.

Response E.5: These arguments have no merit. First, we assume the commenter intended to reference the permit conditions and evaluations related to PM and PM10, rather than PM2.5, as the permit does not contain any requirements specific to PM2.5. See Response B.4 above. EPA believes the substantial reductions in the emission limitations for PM and PM10 in permit are environmentally beneficial and permissible und er the CAA and its implementing regulations. The AAQIR and Draft Amended Permit describe the proposed new equipment and provide our evaluation of the applicable requirements, in cluding BACT and ambient air quality impact analyses. As the commenter’s generalized re ferences to the EPA policy document on sham permits lack sufficient specificity for EPA to provide a meaningful response, we decline to address those references. We note, however, that all conditions of this PSD permit are enforceable by EPA and by citizens under section 304 of the CAA.

Comment E.6: The commenter referenced CCAPCD Rule 2.6(c)7 and asserted that this rule “requires that ‘The owner or operator of a proposed new or modified source shall to the satisfaction of the APCO that all major stationa ry sources owned or operated by such person (or by an controlling, controlled by, or under common control with such person) in California which are subject to emission limitations are in comp liance or on a schedule of compliance with all applicable emission limitations and standards. ’” The commenter stated that PG&E owns a facility in Contra Costa C ounty called the Gateway Generati ng Station, which is currently “undergoing compliance review at the [CEC]” and “is the subject of an FNOV and a proposed consent decree,” and that this facility “is not in compliance with State and Federal Air Quality Regulations and will not be in compliance until th e activities required by the consent decree are completed.” In conclusion, the commenter asse rted that this PSD permit cannot be approved until PG&E “completes the requirements of the c onsent decree and comes into compliance with these new air quality requirements.”

Response E.6: These arguments have no merit. EPA is issuing this PSD permit pursuant to the federal requirements in Section 165 of the CAA and EPA’s implementing regulations in 40 CFR 52.21 and part 124. The rule that the commenter references (CCA PCD Rule 2.6(c)7) is a local requirement that is not re levant to this action.Colusa Generating Station - Respon se to Comments March 19, 2010

Amended PSD Permit No. SAC 06-01

20 Comment E.7: The commenter requested that EPA “cons ider these comments and decline the permit or recirculate the draft perm it after addressing these comments.”

Response E.7: EPA disagrees for the reasons stated above.

III. Administrative Corrections

EPA has made the following administrative corrections to the Draft Amended Permit:

1. Project Description: EPA is eliminating the mi nor revisions to this paragraph that we had proposed to make in the Draft Amended Pe rmit, as the proposed revisions were not necessary. Thus, the project description remains unchanged from description in the initial PSD permit issued on September 29, 2008.

2. Permit condition X.D.1: EPA corrected the VOC limit from 47.4 tpy to 47.5, which is in accordance with PG&E’s permit application. The 47.4 tpy figure in the Draft Amended Permit was a typographical error.

3. Permit condition X.H: EPA removed the reference to Subpart IIII of the New Source Performance Standards (NSPS), which apply to compression ignition internal combustion engines. The provisions of Subpart IIII do not apply to CGS because the diesel emergency generator has been re moved from the facility design.