July 13,2010 

Memo to: 

From: 

Gerardo Rios, Chief 

Permits Office 

EPA Region 9 J _I.,.~L ~ c~ I-#'\-

Enc -Watfh~r and G~fRuben~tein 

sierra 

research 

1801 J Street 

Sacramento, CA 95811 

Tel: (916) 444-6666 

Fax: (916) 444-8373 

Ann Arbor, MI 

Tel: (734) 761-6666 

Fax: (734) 761-6755 

Subject: Compliance of Avenal Power Center, LLC I-Hour N02 NAAQS 

Supplemental Analysis with EPA's June 28 and 29,2010 Memoranda on 

Applicability of Appendix W Modeling Guidance and PSD 

Implementation Guidance 

The Avenal Energy Project's February 2008 application for a Prevention of Significant 

Deterioration (PSD) permit! was deemed complete2 on March 19,2008, and Region 9 

issued a draft PSD permie on June 16, 2009 but has not yet issued the final PSD permit. 

Meanwhile, during the 27 months since the application was deemed complete and more 

than 12 months since the draft permit was issued, EPA announced4 the new National 

Ambient Air Quality Standard (NAAQS or standard) for I-hour average nitrogen dioxide 

(N02) on January 22,2010, issued the final rule for the standardS on February 9,2010, 

and established April 12, 2010 as the effective date for the standard. Concerning 

guidance on the air dispersion modeling required to demonstrate compliance with the 

new standard, EPA's Air Quality Modeling Group issued an updated notice6 containing 

limited modeling guidance on February 25,2010. Avenal Power Center, LLC (APC) 

submitted an analysis7 to EPA on May 13,2010 that demonstrated compliance of the 

proposed Avenal Energy Project with the new I-hour N02 NAAQS. On June 15,2010, 

EPA responded with comments and questions on the May 13 analysis,8 and referred to 

J Sierra Research. Application to the us. EPA for a Prevention of Significant Deterioration Permit, Avenal 

Energy Project, Kings County, California, February 2008. 

2 EPA. Prevention of Significant Deterioration Application No. 08-SJ-0 I, Avenal Power Center, LLC, 

Avenal Energy Project, Avenal, California, letter from Gerardo Rios, Chief, Permits Office, Region 9, to 

Stuart Zisman, Avenal Power Center, LLC, March 19,2008. 

3 EPA. Statement of Basis and Ambient Air Quality Impact Report For a Clean Air Act Prevention of 

Significant Deterioration Permit, June 16,2009. 

4 EPA, http://www.epa.gov/air/nitrogenoxides/actions.html#janl0. 

5 Federal Register, Volume 75, Number 26, Part III, Environmental Protection Agency, 40 CFR Parts 50 

and 58, Primary National Ambient Air Quality Standardsfor Nitrogen Dioxide; Final Rule, Appendix S, 

pages 6532-6533, February 9,2010. 

6 EPA. Notice Regarding Modelingfor New Hourly N02 NAAQS, 

http://www.epa.gov/ttniscramln02_hourly_NAAQS_aermod_02-25-10.pdf. 

7 Sierra Research. Supplemental N02 Air Quality Impact AnalYSis, May 13, 2010. 

8 EPA. EPA Comments on the 0511312010 Supplemental N02 Air Quality Impact A nalysis for the Avenal 

Energy Project, letter from Gerardo Rios, Chief, Permits Office, Region 9, to Jim Rexroad of A venal 

Power Center, LLC, June 15,2010. 
Gerardo Rios - 2 - July 13, 2010

new guidance the agency had not yet issued on how to demonstrate compliance. APC 

responded to EPA’s June 15 comment in a submission dated June 28, 2010.9

EPA issued two new guidance memoranda in quick succession on June 28, 201010 and on 

June 29, 2010.

11 The June 29 memorandum includes the prior June 28 memorandum 

along with a second June 28 memorandum12 containing general guidance for 

implementation of the new standard and an interim 1-hour NO2 significant impact level 

(SIL).

This purpose of this memorandum is to describe how the Project’s May 13, 2010 

submittal complies with the Agency’s June 28 and 29, 2010 guidance memoranda.

Compliance with EPA’s June 28, 2010 Memorandum (Applicability of Appendix W 

Modeling Guidance for the 1-hour NO2 National Ambient Air Quality Standard)

The overall observation of the June 28, 2010 guidance memorandum is that it 

recommends justification of every aspect of analysis if a Tier 3 detailed screening method 

is used to demonstrate compliance of a proposed project’s NOx emissions with the new 

1-hour NO2 standard. The memorandum observes that Appendix W was written to 

provide modeling guidance related to the existing annual average NO2 NAAQS,

13 which 

has been in effect since October 8, 1996, and that increased caution is required when 

applying any of the same assumptions to modeling for compliance with the new 1-hour 

NO2 standard.

APC Response: The Avenal Energy Project’s May 13, 2010 Supplemental modeling 

submittal observed all the necessary cautions appropriate to modeling compliance with 

the short-term 1-hour NO2 NAAQS, which was further demonstrated in the 605-page 

June 28, 2010 response to EPA’s June 15, 2010 comment letter on the May 13, 2010 

submittal. Included in the June 24 submittal was the August 2007 submittal to Region 9, 

the California Energy Commission (CEC), and the San Joaquin Valley Air Pollution 

Control District (SJVAPCD or District) of the initial air dispersion modeling protocol14

 9 Letter dated June 28, 2010 from Jeffrey R. Holmstead, Bracewell & Giuliani, to Stephanie Talbert, U.S. 

Department of Justice and Julie Walters, U.S. Environmental Protection Agency, Region 9.

that had described the use of the AERMOD Plume Volume Molar Ratio Method 

(PVMRM) option. The proposed choice of model, meteorological data, and background 

ambient air quality data was accepted by all three regulatory agencies.

10 EPA. Applicability of Appendix W Modeling Guidance for the 1-hour NO2 National Ambient Air Quality 

Standard, memorandum from Tyler Fox, Leader, Air Quality Modeling Group, to Regional Air Division 

Directors, June 28, 2010.

11 EPA. Guidance Concerning the Implementation of the 1-hour NO2 NAAQS for the Prevention of 

Significant Deterioration Program, memorandum from Stephen D. Page, Director, Office of Air Quality 

Planning and Standards, to Regional Air Division Directors, June 29, 2010.

12 EPA. General Guidance for Implementing the 1-hour NO2 National Ambient Air Quality Standard in 

Prevention of Significant Deterioration Permits, Including an Interim 1-hour NO2 Significant Impact Level, 

memorandum from Anna Marie Wood, Acting Director, Air Quality Policy Division, to Regional Air 

Division Directors, June 28, 2010.

13 EPA. 40 CFR Part 50, National Ambient Air Quality Standards for Nitrogen Dioxide: Final Rule, 

Federal Register, Volume 61, Number 196, October 8, 1996.

14 Sierra Research. Air Dispersion Modeling and Health Risk Assessment Protocol, Avenal Energy Project, 

Kings County, California, August 2007.
Gerardo Rios - 3 - July 13, 2010

EPA Memorandum Observation:

The memorandum supports application of the Tier 1 approach because it is the most 

conservative methodology of producing the highest possible resulting 1-hour NO2

concentration to be compared to the NAAQS. The Tier 1 approach that may be applied 

without further justification is to add the overall highest hourly background NO2

concentration from a representative monitor to the modeled design value, based on the 

form of the standard, for comparison to the NAAQS. Additional refinements to this Tier 

1 approach based on some level of temporal pairing of modeled and monitored values 

may be considered on a case-by-case basis, with adequate justification and 

documentation.

APC Response: APC’s May 13, 2010 Supplemental Analysis utilized the more refined

Tier 3 methodology of adding the 1-hour average NO2 concentration measured at the 

District’s monitor in Hanford, CA to the same hour average concentration computed by 

AERMOD-PVMRM to obtain the total 1-hour concentration for each hour in the 5-year 

modeling period at each receptor. These total NO2 concentrations were then used to find 

the highest 1-hour concentration for each day at each receptor, which were used to 

calculate the 98th percentile concentration at each receptor over each rolling 3-year period 

in the 5 years of available monitoring data. This method was justified because of the 

existence of good quality and appropriate background monitoring data provided by the 

District for both NO2 and ozone, the latter of which is used in the PVMRM algorithm 

option of AERMOD. The use of these hourly background air quality data were approved 

by Region 9, the CEC, and the District in their acceptance of the August 2007 modeling 

protocol for the Project. Therefore, the summations, hour-by-hour and receptor by 

receptor, of the appropriate ambient NO2 concentration and the AERMOD modeled NO2

concentration, corrected by the “same hour” ozone concentration and the conservative 

NO2/NOx ratio (discussed below), are appropriate to demonstrate the compliance of this 

project with the new 1-hour NO2 standard.

EPA Memorandum Observation:

As noted in the March 23, 2010 memorandum regarding “Modeling Procedures for 

Demonstrating Compliance with PM2.5 NAAQS” (EPA, 2010b),

15 combining the 98th 

percentile monitored value with the 98th percentile modeled concentrations for a 

cumulative impact assessment could result in a value that is below the 98th percentile of 

the combined cumulative distribution and would, therefore, not be protective of the 

NAAQS. 

APC Response: APC concurs, which is why the May 13, 2010 analysis used the more 

meaningful methodology of adding the monitored background NO2 concentration at each 

hour to the modeled concentration for that hour at each receptor.

 15 EPA. Modeling Procedures for Demonstrating Compliance with PM2.5 NAAQS.

Stephen D. Page Memorandum, March 23, 2010.
Gerardo Rios - 4 - July 13, 2010

EPA Memorandum Observation:

One of the modeling assumptions for which the guidance indicates greater care should be 

taken is the in-stack NO2/NOx ratio, discussed on page 9 of the memorandum as follows:

“Assumptions regarding in-stack NO2/NOx ratios that may have been deemed 

appropriate in the context of the annual standard may not be appropriate to use for 

the new 1-hour standard. In particular, it is worth reiterating that the 0.1 in-stack 

ratio often cited as the ’default’ ratio for OLM should not be treated as a default 

value for hourly NO2 compliance demonstrations.”

APC Response: Emissions from the combined-cycle F-Class combustion gas 

turbines were assigned conservative NO2/NOx ratios of 0.25 for normal operation 

and 0.40 for startup and commissioning based on source test results from the same 

F-Class turbine (i.e., GE 7FA) proposed for use by APC; this turbine is operating 

at the Palomar Energy Center in Escondido, California, and the data were 

furnished by the San Diego Air Pollution Control District. These two operating 

modes (startup and commissioning) represent the highest NOx emitting modes for 

the project.

EPA Memorandum Observation:

The new guidance does not specify or recommend a method to be used for data 

substitution in the event of missing data (ozone, NO2, and meteorological data). The 

guidance states:

“In the case of hourly background ozone concentrations, methods used to 

substitute for periods of missing data may play a more significant role in 

determining the 1-hour NO2 modeled design value, and should therefore be given 

greater scrutiny, especially for data periods that are likely to be associated with 

peak hourly concentrations based on meteorological conditions and source 

characteristics. In other words, ozone data substitution methods that may have 

been deemed appropriate in prior applications for the annual standard may not be 

appropriate to use for the new 1-hour standard.”

APC Response: The method used, described as “Missing hourly ambient O3

concentrations from the Hanford monitoring station were given substituted 

concentrations with hour-appropriate values (e.g., from the previous day, or the next day, 

for the same hour) as stated in the August 14, 2007 modeling protocol,” sought to make 

the substituted concentrations as close to reality as possible. Artificially reducing the 

substituted concentrations to artificially increase the resulting 1-hour NO2 concentration 

does not enhance the analysis, but, instead, purposefully injects even more conservative 

bias than already exists. Moreover, the substitution procedure was submitted to EPA 

Region 9 in the August 14, 2007 modeling protocol, accepted without comment, used as 

described in the original 1-hour NO2 modeling included in the February 2008 application 

to Region 9, and referred to without comment in Section 8.2 (Modeling Methodology) on 

page 24 of EPA’s June 2009 Statement of Basis and Ambient Air Quality Impact Report 

For a Clean Air Act Prevention of Significant Deterioration Permit. The May 13, 2010 

Supplemental Analysis also described the data substitution used for missing data, and the
Gerardo Rios - 5 - July 13, 2010

June 24, 2010 response to EPA’s June 15, 2010 comments includes thorough justification 

for the selected methodology. With respect to missing NO2 data, and as described in both 

the May 13, 2010 Supplemental Analysis and the June 28, 2010 response to EPA 

comments, the method used to address missing data follows EPA guidance issued in 

conjunction with the 1-hour NO2 NAAQS Final Rule regarding assessments of 

attainment with the new standard – the only such guidance available at the time the May 

Supplemental Analysis was prepared, and the only such guidance available at the present 

date. 

EPA Memorandum Observation:

Because the OLM and PVMRM methods in AERMOD are currently considered 

non-regulatory-default options, application of these options requires justification 

and approval by the Regional Office on a case-by-case basis as alternative 

modeling techniques, in accordance with Section 3.2.2, paragraph (e), of 

Appendix W.

APC Response: The Project’s air dispersion modeling protocol16 was submitted to EPA 

Region 9 in August 2007, as well as to the District and the CEC. The protocol described 

in detail the proposed use of the PVMRM option in AERMOD, and the protocol was 

approved by all three agencies.

The five requirements in Appendix W Section 3.2.2, paragraph (e) are satisfied as 

follows:

“i. The model has received a scientific peer review;”

The June 28 guidance memorandum addresses this requirement as follows: “...items i 

and iv of the alternative model demonstration for these options can be fulfilled in part 

based on existing documentation (Cole and Summerhays, 1979; Hanrahan, 1999a; 

Hanrahan, 1999b; MACTEC, 2005)...”

“ii. The model can be demonstrated to be applicable to the problem on a

theoretical basis;”

The fundamental principle in the PVMRM option is to limit atmospheric reaction of 

nitric oxide (NO) to NO2 by the amount of ozone available in the dispersing plume. 

Because the San Joaquin Valley has relatively high ozone concentrations, as indicated by 

its severe ozone non-attainment classification and the background ozone data used in the 

modeling, application of the atmospheric chemistry within PVMRM will tend to drive 

more, not less, of the emitted NO to NO2, thereby not underestimating the resulting NO2

that, along with background NO2 concentrations, have been used to demonstrate 

compliance with the new 1-hour NO2 standard.

 16 Id.
Gerardo Rios - 6 - July 13, 2010

“iii. The data bases which are necessary to perform the analysis are available and 

adequate;”

The availability and adequacy of the necessary data bases, including background ozone, 

NO2, and meteorological data, has been demonstrated in the August 2007 modeling 

protocol, the May 13, 2010 Supplemental analysis, the June 28, 2010 response to EPA’s 

June 15, 2010 comments, and in other responses herein.

“iv. Appropriate performance evaluations of the model have shown that the model 

is not biased toward underestimates;” and

The June 28 guidance memorandum addresses this requirement as follows: “...items i 

and iv of the alternative model demonstration for these options can be fulfilled in part 

based on existing documentation (Cole and Summerhays, 1979; Hanrahan, 1999a; 

Hanrahan, 1999b; MACTEC, 2005)...”

“v. A protocol on methods and procedures to be followed has been established.”

The August 2007 modeling protocol established the methods and procedures followed in 

the modeling contained in both the original February 2008 application and in the May 13, 

2010 Supplemental analysis with respect to the application of PVMRM.

EPA Memorandum Observation (page 4)

“The 5-year average based on use of NWS data, or an average across one or more 

years of available site specific data, serves as an unbiased estimate of the 3-year 

average for purposes of modeling demonstrations of compliance with the 

NAAQS. Modeling of ‘rolling 3-year averages,’ using years 1 through 3, years 2 

through 4, and years 3 through 5, is not required.”

APC Response: Because the Supplemental Analysis submitted to EPA on May 

13, 2010 preceded the memorandum issuance on June 28, 2010, the methodology 

used in the analysis was more conservative than EPA now indicates is required. 

In the May 13, 2010 Supplemental Analysis, the 1-hour NO2 concentration 

computed from three rolling 3-year averages is necessarily higher than the 

allowed computation of a 5-year average, even though the NAAQS is defined in 

terms of a 3-year average. This is one more example of how the Project’s 

analysis methodology is more conservative than required by federal guidance.

Compliance with EPA’s June 28, 2010 Memorandum (General Guidance for 

Implementing the 1-hour NO2 National Ambient Air Quality Standard in 

Prevention of Significant Deterioration Permits, Including an Interim 1-hour NO2

Significant Impact Level)

This memorandum is designed to help permit applicants in at least three sets of 

circumstances:
Gerardo Rios - 7 - July 13, 2010

1. Facilities whose modeling for compliance indicates a potential for violations of 

the new 1-hour NO2 NAAQS;

2. Reduce the burden of modeling for the new 1-hour NO2 NAAQS; and

3. Identify approaches for proposed new sources to mitigate modeled potential 

violations of the new 1-hour NO2 NAAQS.

Because it was demonstrated in the Avenal Energy Project’s May 13, 2010 Supplemental 

Analysis that the Project would not result in a violation of the new 1-hour NO2 NAAQS, 

the “help” offered by this guidance memorandum is not needed in this case.