UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


AUG 1 8 2009 

CERTIFIED MAIL 

RETURN RECEIPT REQUESTED 

700621500001 4941 2239 

In Reply: AIR-5 

Refer To: Docket No. 's R9-09-12 

R9-09-13 

R9-09-14 

Irene Rosenfeld, CEO 

Kraft Foods, Inc. 

Three Lakes Drive 

Northfield,IL 60093 

Re: 	 Kraft / Post / Ralcorp Facility (Facility N-1933) 

Modesto, California 

Dear Ms. Rosenfeld: 

Enclosed is a Finding of Violation ("FOV") and two Notice ofViolations 

("NOV s") issued by the United States Environmental Protection Agency ("EP A") to 

Kraft Foods, Inc. ("Kraft"), concerning the operation of its formerly-owned cereal 

manufacturing facility in Modesto, California ("the Facility"). The Facility is currently 

owned by Ralcorp Holdings, Inc. ("Ralcorp"). EPA issued similar FOV / NOVs to 

Ralcorp on July 16,2009. 

The FOV has been issued because the Facility is a major source and has failed to 

obtain a Title V operating permit. The NOVs have been issued to address alleged 

violations of the San Joaquin Valley Air Pollution Control District ("District") Rule 2201 

("New and Modified Stationary Source Review Rule") and Rule 4693 ("Bakery Ovens"). 

Both of these rules are in the District's portion ofthe California State Implementation 

Plan. Specifically, the Facility is in violation of Rule 2201 because it failed to comply 

with Rule 2201 's Best Available Control Technology and offset requirements when it 

added new emission units to the Bran Flake production line in 2002. The other NOV 

identifies a violation of Rule 4693 because the Facility's bakery oven emissions are not 

vented to an approved emission control device. 

If you wish to discuss the FOV and NOVs, you may request a conference with 

EP A. The conference would afford Kraft an opportunity to present information bearing 

Printed on Recycled Paper 
on the finding of violation, the nature ofthe violation, any efforts you have taken to 

achieve compliance, and the steps you propose to take to achieve compliance. In 

response to the July 16,2009 FOV and NOVs, a meeting between EPA, Ralcorp, Kraft 

and the District was held on August 13,2009. 

Please contact Kara Christenson, Office ofRegional Counsel, at (415) 972-3881, 

to request a conference. Such request should be made as soon as possible, but in any 

event no later than 10 working days after receipt of this letter. 

Sincerely, 

D~9W Director, Air Division 

Enclosures 

cc: 	 Mr. Seyed Sadredin, APCO, San Joaquin Valley Air Pollution Control District 

Mr. James Ryden, Chief, Enforcement Division, California Air Resources Board 

Amy Lincoln, Esq., Beveridge & Diamond 
UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION 9 


In the Matter of: 	 ) Docket No. R9-09-12 

) 

Kraft Foods, Inc. ) Finding and Notice of Violation 

formerly ofModesto, California ) 

) 

Proceeding Under Section 113(a), ) 

~C~le~a~n~A~ir~A~ct~,~A~s~A~m~e~n~d~ed~______________) 

This Finding and Notice ofViolation ("NOV") is issued to Kraft Foods, Inc. ("Kraft") for 

violations of the Clean Air Act ("CAA" or "Act"), as amended, 42 U.S.C. §§ 7401-7671q, at its formerlyowned manufacturing facility located in Modesto (Stanislaus County), California (the "Facility"). The 

Facility is located within the jurisdiction ofthe San Joaquin Valley Air Pollution Control District 

("SJV APCD" or "District,,).1 This FOV is issued under the authority and at the discretion ofthe Director 

of the Air Division for EPA, Region IX? 

GENERAL STATUTORY AND REGULATORY BACKGROUND 

Title V Operating Permit Program Requirements 

1. 	 Title V of the Act requires major stationary sources of air pollution to obtain an operating permit that 

includes emissions limitations and such other conditions as necessary to assure compliance with 

applicable requirements ofthe Act. See 42 U.S.C. §§ 7661a-766lf. EPA's regulations implementing 

the Title V operating permit program are found at 40 C.F.R. Part 70. See 57 Fed. Reg. 32250 (July 

21, 1992). 

2. 	 The District adopted Rule 2520 to implement Title V on June 15, 1995. EPA granted interim 

1 Stanislaus County is classified as a "severe" non-attainment area under EPA's 8-hour ozone National Ambient Air 

Quality Standard ("NAAQS") and as an "extreme" non-attainment area under EPA's I-hour ozone NAAQS. 40 

C.F.R. §81.305. See also, 69 Fed. Reg. 20550 (April 16, 2004). 

2 Section 113(a)(1) requires the Administrator of the EPA to notify a person in violation of a state implementation 

plan. This FOV alleges violations of Title V; therefore, it is not a statutory prerequisite to enforcement. We are 
approval to the District's Title V program effective May 24, 1996 and granted full approval effective 

November 30,2001. 40 CFR Part 70, Appendix A; 66 Fed. Reg. 63503 (December 7,2001). 

3. 	 The District's Title V program defines a major stationary source as including a source with the 

potential to emit more than 50,000 pounds (25 tons) per year of volatile organic compounds 

("VOCS,,).,,3 SJVAPCD Rule 2520, §3.l9 and Rule 2201, §3.25. 

4. 	 The District's Title V program requires a major source to submit a Title V permit application within 

12 months after becoming subject to the permit program. SJVAPCD Rule 2520, §5.1. 

5. 	 EPA's regulations, at 40 CFR §70.5(a), provide that the owner or operator ofa title V source must 

submit a timely and complete permit application. Section 70.5(a)(1) further provides that a timely 

and complete application is one submitted within 12 months after the source becomes subject to the 

permit program or on or before such earlier date as the permitting authority may establish. 

6. 	 Section 502(a) of the Act provides that, after the effective date of a Title V permit program, operation 

of a major stationary source without a Title V operating permit is a violation ofthe Act. 42 U.S.c. 

§766la(a). 

FINDINGS OF FACT 

7. 	 In 1975, Kraft General Foods initiated construction of the manufacturing facility located at 901 E. 

Whitmore Avenue, Modesto, California. Kraft and/or its subsidiaries owned and operated the Facility 

until August 4, 2008, when ownership and operation of the Facility was transferred to Ralcorp 

Holdings, Inc. ("Ralcorp"). 

8. 	 The Facility is capable of operating 24 hours per day, 7 days per week, 52 weeks per year. 

9. 	 Certain equipment at the Facility emits VOCs as a result ofthe use of yeast and other ingredients, such 

as flavorings and vitamins. 

issuing this FOV to provide Ralcorp with notice of EPA's findings of non-compliance at the Facility. 

3 Ground-level ozone is fonned when VOCs react with nitrogen oxides (,'NOx") in the presence of sunlight. As 

precursors to ozone, VOCs are regulated pollutants. 

2 
10. Pursuant to its authority under Section 114 of the Act, EPA sent a letter dated April 20, 2009 to 

Ralcorp requesting information regarding the Facility's compliance with the Act. 

11. On or about May 18, 2009, Ralcorp submitted its response to EPA's section 114 information request 

("Response to EPA's Information Request"). 

12. 	Kraft participated in the preparation of Ralcorp' s Response to EPA's Information Request. 

13. Ralcorp' s Response to EPA's Information Request contained a document entitled, "Historical 

Emissions by Purchasing History." According to this document, the Facility emitted 26.2 tons of 

VOCs in 2001. 

14. 	Ralcorp's Response to EPA's Information Request also contained a document entitled, "Potential to 

Emit by Product." This document calculates the Facility's potential to emit based on emissions 

resulting from the production of three different cereal products. This document states that the 

Facility's potential to emit VOCs is 137.39 tons (274,780 pounds) per year. 

15. Ralcorp's Response to EPA's Information Request also contained a document entitled, "Post-Modesto 

Cereal Production Recap in Pounds." This document states that the Facility has manufactured the 

three cereal products used to calculate the Facility's potential to emit VOCs since at least 2003. 

FINDINGS OF VIOLATION 


Finding of Failure to Submit a Timely Title V Permit Application and Finding of Operation of a 


Major Source without a Valid Title V Permit 


16. The Facility is a major source of air pollution, as that term is defined in the District's Title V program. 

See, SJVAPCD Rule 2520, §3.19 and Rule 2201, §3.25. 

17. The Facility's actual emissions ofVOCs exceeded Title V major source thresholds in 2001. 

18. 	The Facility's potential to emit VOCs has exceeded Title V major source thresholds since at least 

2003. 

19. 	The Facility was required to have submitted a Title V permit application no later than 12 months after 

3 

becoming subject to the program. 

20. The Facility has not submitted a Title V permit application. 

21. The Facility has been operating as a major source of air pollution without a valid Title V permit. 

22. The Facility has been in violation of section S02 of the Act, 40 C.F.R. §70.S(a), and SNAPCD Rule 

2520, §5.1 since at least December 31,2002. EPA may determine that the period of violation is more 

extensive if it finds additional instances in which the Facility's actual emissions or potential to emit 

exceeded any major source threshold in addition to those alleged herein. 

23. The Facility remains and will continue to be in violation of section of 502 of the Act, 40 C.F.R. 

§70.5(a), and SNAPCD Rule 2201, §5.1 until it obtains a valid Title V permit or a valid limit on its 

potential to emit. 

NOTICE OF VIOLATION 

Notice is given to Kraft Foods, Inc. that the Administrator of the United States Environmental 

Protection Agency, by authority duly delegated to the undersigned, finds that Kraft Foods, Inc. has violated 

of section 502 of the Act and its implementing regulations, as set forth in the Findings of Violation. 

ENFORCEMENT 

Section 113(a)(3) of the Act provides that when any person has violated any requirement or 

prohibition of Title V of the Act, EPA may: 

issue an order requiring compliance with such requirement or prohibition, or 

issue an administrative penalty order pursuant to section 1l3(d) for civil administrative 

penalties of up to $37,500 per day of violation, or 

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

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

Furthermore, if a person knowingly violates requirements relating to Title V, section 113(c) 

provides for criminal penalties or imprisonment, or both. 

4 
Under section 306(a) of the Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and 

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

compliance with the Act and all regulations promulgated pursuant to it. Violations of the Act may result in 

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

PENALTY ASSESSMENT CRITERIA 

Section 113(e)(I) of the Act states that the Administrator or the court, as appropriate, shall, in 

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

factors as justice may require) the size ofthe business, the economic impact of the penalty on the business, 

the violator's full compliance history and good faith efforts to comply, the duration of the violation as 

established by any credible evidence (including evidence other than the applicable test method), payment 

by the violator of penalties previously assessed for the same violation, the economic benefit of 

noncompliance, and the seriousness of the violation. 

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

of violation. For the purposes ofdetermining the number ofdays of violation, where the EPA makes a 

prima facie showing that the conduct or events giving rise to this violation are likely to have continued or 

recurred past the date of this FOV, the days of violation shall be presumed to include the date of this FOV 

and each and every day thereafter until the violator establishes that continuous compliance has been 

achieved, except to the extent that the violator can prove by the preponderance ofthe evidence that there 

were intervening days during which no violation occurred or that the violation was not continuing in 

nature. 

OPPORTUNITY FOR CONFERENCE 

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

bearing on the finding of violation, the nature of the violation, and any efforts it may have taken or 

proposes to take to achieve compliance. Kraft has the right to be represented by counsel. A request for a 

5 

conference with EPA must be made within ten (10) working days of receipt of this FOV. The request for a 

conference or other inquiries concerning the FOV should be made in writing to: 

Date I 

Kara Christenson 


Office of Regional Counsel (ORC-2) 


U.S. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, California 94105 

(415) 972-3881 

DeboL4b~ Director, Air Division 

6 

UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION 9 


In the Matter of: 	 ) Docket No. R9-09-13 

) 

Kraft Foods, Inc. ) Finding and Notice ofViolation 

formerly of Modesto, California ) 

) 

Proceeding Under Section 113(a), ) 

~C~le~a~n~A~ir~A~c~t~,A~s;A~m~en~d~e~d~______________) 

This Finding and Notice ofViolation ("NOV") is issued to Kraft Foods, Inc. ("Kraft") for 

violations of the Clean Air Act ("CAA" or "Act"), as amended, 42 U.S.C. §§ 7401-767Iq, at its 

formerly-owned manufacturing facility located in Modesto (Stanislaus County), California (the 

"Facility"). The Facility is located within the jurisdiction ofthe San Joaquin Valley Air Pollution 

Control District ("SJV APCD" or "District"). Section 113(a)(1) of the Act requires the EPA 

Administrator to notify a person who has violated a state implementation plan. The authority to issue 

NOVs has been delegated to the Director of the Air Division for EPA, Region IX. 

GENERAL STATUTORY AND REGULATORY BACKGROUND 

I. 	 Section IIO(a) ofthe Act requires that all states adopt state implementation plans ("SIPs") that 

provide for the implementation, maintenance and enforcement of primary and secondary air quality 

standards. 42 U.S.c. §7410(a). 

2. 	 Pursuant to Section 107(d) of the Act, 42 U.S.c. §7407(d), the Administrator has promulgated lists 

of attainment status designations for each air quality control region ("AQCR") in every state. These 

lists identify the attainment status of each AQCR for each ofthe criteria pollutants. The attainment 

status designations for California AQCRs are listed at 40 C.F.R. §81.305. 

3. 	 The Facility is located in Stanislaus County, which is within the jurisdiction of the San Joaquin 
Valley Air Pollution Control District ("SNAPCD" or "District"). Stanislaus County is classified as 

a "severe" non-attainment area under EPA's 8-hour ozone National Ambient Air Quality Standard 

("NAAQS") and as "extreme" non-attainment area under EPA's I-hour ozone NAAQS. 40 C.F.R. 

§81.305. See also, 69 Fed. Reg. 20550 (April 16,2004). 

4. 	 Section 182(b)(2) of the Act requires states to have SIP rules that require all major sources ofVOCs 

located in ozone non-attainment areas classified as moderate and above to implement Reasonably 

Available Control Technology ("RACT").' 42 V.S.c. §7511a(b)(2). 

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

subject to enforcement under section 113 of the Act. 42 V.S.c. §7413(a)(1); 40 C.F.R. §52.23. 

SJVAPeD Rule 4693 Bakery Ovens 

6. 	 In accordance with Section 110 of the Act, EPA has approved Rule 4693 (Bakery Ovens) as adopted 

on May 16, 2002, into SNAPCD's portion of the California SIP. 69 Fed. Reg. 22441 (April 26, 

2004). 

7. 	 Section 2.0 of Rule 4693 provides: "The requirements of this rule shall apply to bakery ovens 

operated at major source facilities, which emit VOCs during the baking of yeast-leavened products." 

8. 	 Section 3.1 of Rule 4693 defines "bakery oven" as: "[A]n enclosed compartment supplied with heat, 

typically from the combustion of natural gas, used to bake bread, buns and rolls .... " 

9. 	 Section 3.4 of Rule 4693 defines "leaven" as: "[A] rise in the dough caused ... a fennentationproducing agent such as yeast." 

10. 	Section 3.5 of Rule 4693 defines a "major source" as defined in Rule 2201 (New and Modified 

Stationary Source Review Rule). Section 3.25 of Rule 2201 defines a major source as one having a 

potential to emit greater than 50,000 pounds ofVOCs annually. Section 3.36 of Rule 2201 defines a 

"stationary source" as "any building, structure, facility, or installation which emits or may emit any 

1 Ground-level ozone is fonned when volatile organic compounds ("VOCs") react with nitrogen oxides ("NOx") in 

2 

affected pollutant [defined as including VOCs, per Rule 2201, section 3.4] directly or as a fugitive 

emission. " 

11. Section 3.2 of Rule 4693 defines an "existing Oven" as: "[A]n oven that was constructed and 

commenced operation prior to July 1, 2002." 

12. Section 5.0 ofRule 4693 requires that "no person shall operate ... [an] existing bakery unless the 

following standards are met: 

a) The collected emissions are vented to an approved emission collection system. 

b) The collected emissions are vented to an approved emission control device, which has a control 

efficiency of at least 95 percent ...." 

FINDINGS OF FACT 

13. In 1975, Kraft General Foods constructed the manufacturing facility located at 901 E. Whitmore 

Avenue, Modesto, California. Kraft and/or its subsidiaries owned and operated the Facility until 

August 4,2008, when ownership and operation of the Facility was transferred to Ralcorp Holdings, 

Inc. ("Ralcorp"). 

14. The Facility operates a "bakery oven" as that term is defined in Rule 4693 and permitted in 

Condition 1 0 of District permit N-1933-4-1. 

15. Pursuant to its authority under section 114 ofthe Act, EPA sent a letter dated April 20, 2009 to 

Ralcorp Holdings, Inc. requesting information regarding the Facility's compliance with the Act. 

16. 	On or about May 18, 2009, Ralcorp submitted its response to EPA's section 114 information request 

("Response to EPA's Information Request"). 

17. Kraft participated in the preparation of Ralcorp' s Response to EPA's Information Request. 

18. Ralcorp's Response to EPA's Information Request contained a document entitled, "Potential to Emit 

by Product." This document calculates the Facility's potential to emit based on emissions resulting 

the presence of sunlight. As precursors to ozone, VOCs are regulated pollutants. 

3 
from the production ofthree different cereal products. This document states that the Facility's 

potential to emit VOCs is 137.39 tons per year. 

19. Ralcorp's Response to EPA's Infonnation Request also contained a document entitled, "PostModesto Cereal Production Recap in Pounds". This document states that the Facility has 

manufactured the three cereal products used to calculate the Facility's potential to emit VOCs since 

at least 2003. 

20. Ralcorp's Response to EPA's Infonnation Request also described and quantified emissions from the 

Facility, including emissions associated with the Facility's bakery oven. Specifically, Ralcorp's 

responses to Questions 12, 13 and 14 described Facility emissions, including those from the "bakery 

oven." According to these documents, emissions from the Facility's "bakery oven" are not vented to 

an approved emission control device. 

21. In addition, EPA inspected the Facility on March 3 and 4,2009. EPA's inspection included a 

comprehensive walk-through of the Facility, accompanied by Ralcorp employees, for the purpose of 

familiarizing EPA enforcement personnel with the Facility's processes and equipment. 

22. EPA's inspectors were shown and observed the Facility's bakery oven. In addition, EPA's 

inspectors were shown and observed exhaust stacks on the Facility's roof, including the exhaust 

stacks for the Facility's bakery oven. Based on their visual observations, EPA's inspectors were able 

to determine that emissions from the Facility's "bakery oven" are not vented to an approved emission 

control device. 

FINDING OF VIOLATION 

Finding of Failure to Comply with Rule 4693 

23. The Facility is a major source of air pollution, as that term is defined in SlVAPCD Rules 2201 and 

4693 because it has the potential to emit more than the 50,000 pounds per year ofVOCs. 

4 
24. The Facility is subject to the requirements of Rule 4693 because it is a major source operating a 

bakery oven. 

25. The Facility has been in violation of Rule 4693 since at least April 26, 2004, because it does not vent 

emissions from the bakery oven to an approved emission control device. 

26. The Facility remains and will continue to be in violation of Rule 4693 until it properly vents 

emissions from the bakery oven to an approved emission control device. 

NOTICE OF VIOLATION 

Notice is given to Kraft Foods, Inc. that the Administrator of the United States Environmental 

Protection Agency, by authority duly delegated to the undersigned, finds that Kraft Foods, Inc. has 

violated section 110 of the Act, the California SIP, and SJVAPCD Rule 4693, as set forth in the Finding 

of Violation. 

ENFORCEMENT 

Section 113(a)(I) of the Act provides that when any person has violated any requirement or 

prohib~tion of an applicable implementation plan or permit, EPA may: 

issue an order requiring compliance with the requirements or prohibition of such 

implementation plan or permit, or 

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

penalties of up to $37,500 per day of violation, or 

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

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

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

plan more than 30 days after notification of violation, section 113(c) provides for criminal penalties or 

imprisonment, or both. 

Under section 306(a) ofthe Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and 

5 

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

compliance with the Act and all regulations promulgated pursuant to it. Violations of the Act may result 

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

PENALTY ASSESSMENT CRITERIA 

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

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

factors as justice may require) the size of the business, the economic impact of the penalty on the 

business, the violator's full compliance history and good faith efforts to comply, the duration of the 

violation as established by any credible evidence (including evidence other than the applicable test 

method), payment by the violator ofpenalties previously assessed for the same violation, the economic 

benefit of noncompliance, and the seriousness of the violation. 

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

day of violation. For the purposes of determining the number of days of violation, where the EPA makes 

a prima facie showing that the conduct or events giving rise to this violation are likely to have continued 

or recurred past the date of this NOV, the days of violation shall be presumed to include the date of this 

NOV and each and every day thereafter until the violator establishes that continuous compliance has 

been achieved, except to the extent that the violator can prove by the preponderance of the evidence that 

there were intervening days during which no violation occurred or that the violation was not continuing 

in nature. 

OPPORTUNITY FOR CONFERENCE 

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

bearing on the finding of violation, the nature of the violation, and any efforts it may have taken or 

proposes to take to achieve compliance. Kraft has the right to be represented by counsel. A request 

6 

for a conference with EPA must be made within ten (10) working days of receipt of this NOV. The 

request for a conference or other inquiries concerning the NOV should be made in writing to: 

Kara Christenson 


Office of Regional Counsel (ORC-2) 


U.S. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, California 94105 

(415) 972-3881 

Date 7 Deblr"iofdaIl 

Director, Air Division 

7 

UNITED STATES 


ENVIRONMENTAL PROTECTION AGENCY 


REGION 9 


In the Matter of: 	 ) Docket No. R9-09-14 

) 

Kraft Foods, Inc. ) Finding and Notice ofViolation 

formerly of Modesto, California ) 

) 

Proceeding Under Section 113(a), ) 

-",C~le""a~n,-,A,-=ir-=A-",c,,-,t,,-,",-,A"",s-=.A~m~en~d~e~d~_______) 

This Finding and Notice ofViolation ("NOV") is issued to Kraft Foods, Inc. ("Ra1corp") for 

violations ofthe Clean Air Act ("CAA" or "Act") as amended, 42 U.S.C. §§ 7401-7671q, at its formerlyowned manufacturing facility located in Modesto (Stanislaus County), California (the "Facility"). The 

Facility is located within the jurisdiction ofthe San Joaquin Valley Air Pollution Control District 

("SJVAPCD" or "District"). Section 113(a)(I) of the Act requires the EPA Administrator to notify a c.,_ 

person who has violated a state implementation plan. The authority to issue NOVs has been delegated to 

the Director ofthe Air Division for EPA, Region IX. 

GENERAL STATUTORY AND REGULATORY BACKGROUND 

1. 	 Section 11 O(a) of the Act requires that all states adopt state implementation plans ("SIPs") that provide 

for the implementation, maintenance and enforcement ofprimary and secondary air quality standards. 

42 U.S.c. §7410(a). 

2. 	 The Facility is located within the jurisdiction ofthe San Joaquin Valley Air Pollution Control District 

("SNAPCD" or "District"). 

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

subject to enforcement under section 113 of the Act. 42 U.S.C. §7413(a)(I); 40 C.F.R. §52.23. 
SJVAPCD Rule 2201 New and Modified Stationary Source Review Rule 

4. 	 In accordance with section 110 of the Act, EPA has approved Rule 2201 ("New and Modified 

Stationary Source Review Rule"), as adopted on December 19, 2002, into SNAPCD's portion of the 

California SIP. 69 Fed. Reg. 27837 (May 17, 2004). 

5. 	 Section 4.0 of Rule 2201 requires "Best Available Control Technology" ("BACT"), on a pollutant-bypollutant and emissions unit-by-emissions unit ba>sis, for "a new. emissions unit with a potential to emit 

greater than 2.0 pounds per day." 

6. 	 Section 3.9 of Rule 2201 defines BACT as the most stringent emission limitation or control technique 

that has been achieved in practice or required by any SIP for the same class or category as the source. 

7. 	 Section 4.5.3 of Rule 2201 requires offsets, on a pollutant-by-pollutant and emissions unit-byemissions unit basis, for facility modifications that increase VOC emissions by more than 20,000 

pounds per year. 

FINDINGS OF FACT 

8. 	 In 1975, Kraft General Foods constructed the manufacturing facility located at 901 E. Whitmore 

Avenue, Modesto, California. Kraft and/or its subsidiaries owned and operated the Facility until 

August 4,2008, when ownership and operation of the Facility was transferred to Ralcorp Holdings, 

Inc. ("Ralcorp"). 

9. 	 The Facility is capable of operating 24 hours per day, 7 days per week, 52 weeks per year. 

10. Certain equipment at the Facility emits VOCs as a result of the use of yeast and other ingredients, such 

as flavorings and vitamins. 

11. The Facility has three different production lines, one of which is known as the "Bran Flake" line. 

Depending on the type of cereal produced, the Bran Flake line mayor may not involve the use a 

natural gas-fired dryer. 

2 
12. 	On or about September 13,2002, Kraft Foods, the Facility's owner at the time, submitted an 

application for an Authority to Construct ("A TC") permit to the SNAPCD to modify the Bran Flake 

line. In a letter accompanying the application, Kraft Foods stated: "Our plan is to install a new 

Aeroglide cereal dryer along with low Nox [sic] burners and cyclones to capture any particulate that is 

in the exhaust system prior to discharging into the atmosphere." The application did not mention or 

address potential increases ofVOC emissions in connection with the project. 

13. 	Following receipt ofthe application, the District prepared a document entitled, "Authority to Construct 

Application Review" ("ATC Application Review"), dated November 2, 2002. The ATC Application 

Review stated that the modifications to the Bran Flake line would allow the Facility to manufacture a 

new type of cereal with a new flavoring that would requIre the use of a dryer. See A TC Application 

Review, at 1. 

14. 	The District's ATC Application Review also stated that the new dryer would emit VOCs because of 

the combustion of natural gas in the dryer, but did not mention or address potential VOC emissions 

from the new dryer resulting from the use of flavorings or vitamins. See ATC Application Review, at 

10-12. 

15. 	On or about November 4,2002, the SNAPCD issued ATC permit N-1933-3-4. The permit 

authorized a modification to the Bran Flake line to install two additional coating reels and one 8.0 

mmBtu / hour cereal dryer. The permit required installation and operation of cyclones to control 

particulate emissions, but did not require installation or operation of equipment to control or reduce 

VOC emissions resulting from the use of flavorings or vitamins. 

16. Pursuant to its authority under section 114 ofthe Act, EPA conducted a site inspection on March 3 and 

4,2009. Information provided to and observations made by EPA inspectors confirmed that the 

modifications to the Bran Flake line authorized by ATC permit N-1933-3-4 are used for the production 

of a type of cereal, identified for the purposes ofthis NOVas "Cereal A". 

3 

17. 	On or about May 4 and 18,2009, Ralcorp submitted responses to EPA's section 114 information 

request ("Response to EPA's Information Request"). 

18. 	Kraft participated in the preparation of Ralcorp's Response to EPA's Information Request. 

19. 	Ralcorp's Response to EPA's Information Request contained a document entitled, "Post-Modesto 

Cereal Production Recap in Pounds." This document states that the Facility commenced production of 

"Cereal A" in 2003. 

20. Ralcorp's Response to EPA's Information Request calculated the Facility's maximum potential to emit 

VOCs, and estimated that "Cereal A" has the highest PTE on the Bran Flake line. Ralcorp's response 

also states that potential VOC emissions from the production of "Cereal A" are 6.3 pounds per hour or 

27.75 tons per year. 

FINDING OF VIOLATION 


Finding of Failure to Comply with Rule 2201 


21. The Facility is in violation of Section 4.0 of Rule 2201 because it failed to comply with Rule 2201' s 

BACT requirements when it modified the Bran Flake line by installing new emissions units with the 

potential to emit more than 2.0 pounds per day. Specifically, the Facility triggered Rule 2201's BACT 

requirement when it installed two new coating reels and one 8 mmBtu dryer in late 2002 or early 2003. 

22. The Facility is in violation of Section 4.5.3 of Rule 2201 because it failed to obtain offsets when it 

modified the Bran Flake production line by installing new emissions units with a post-project PTE 

above 20,000 pounds per year. Specifically, the Facility triggered Rule 2201's offset requirement 

when it installed two new coating reels and one 8 mmBtu dryer in late 2002 or early 2003. 

23. The Facility remains and will continue to be in violation of Rule 2201 until it installs and operates 

BACT and obtains valid offsets for the equipment authorized by ATC permit N-1933-3-4. 

NOTICE OF VIOLATION 

Notice is given to Kraft Foods, Inc. that the Administrator ofthe United States Environmental 

4 
Protection Agency, by authority duly delegated to the undersigned, finds that Kraft Foods, Inc. ~as violated 

section 110 of the Act, the California SIP, and SNAPCD Rule 2201, as set forth in the Finding of 

Violation. 

ENFORCEMENT 

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

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

issue an order requiring compliance with the requirements or prohibition of such 

implementation plan or permit, or 

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

penalties of up to $37,500 per day of violation, or 

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

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

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

plan more than 30 days after notification of violation, section 113(c) provides for criminal penalties or 

imprisonment, or both. 

Under section 306(a) of the Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and 

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

compliance with the Act and all regulations promulgated pursuant to it. Violations of the Act may result in 

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

PENALTV ASSESSMENT CRITERIA 

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

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

factors as justice may require) the size ofthe business, the economic impact of the penalty on the business, 

the violator's full compliance history and good faith efforts to comply, the duration of the violation as 

5 

established by any credible evidence (including evidence other than the applicable test method), payment 

by the violator of penalties previously assessed for the same violation, the economic benefit of 

noncompliance, and the seriousness of the violation. 

Section 1 13(e)(2) of the Act allows the Administrator or the court to assess a penalty for each day 

of violation. For the purposes of determining the number of days of violation, where the EPA makes a 

prima facie showing that the conduct or events giving rise to this violation are likely to have continued or 

recurred past the date of this NOV, the days of violation shall be presumed to include the date of this NOV 

and each and every day thereafter until the violator establishes that continuous compliance has been 

achieved, except to the extent that the violator can prove by the preponderance of the evidence that there 

were intervening days during which no violation occurred or that the violation was not continuing in 

nature. 

OPPORTUNITY FOR CONFERENCE 

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

bearing on the finding of violation, the nature of the violation, and any efforts it may have taken or 

proposes to take to achieve compliance. Kraft has the right to be represented by counsel. A request for a 

conference with EPA must be made within ten (10) working days ofreceipt ofthis NOV. The request for 

a conference or other inquiries concerning the NOV should be made in writing to: 

Kara Christenson 

Office ofRegional Counsel (ORC-2) 

U.S. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, California 94105 

(415) 972-3881 

I>ate I 

Director, Air Division 

6 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 


REGION IX 


75 Hawthorne Street 


San Francisco, CA 94105·3901 


AUG 1 8 2009 

In Reply: 

Refer To: 

AIR-5 

Docket No.'s R9-09-12 

R9-09-13 

R9-09-14 

Mr. Seyed Sadredin 

Air Pollution Control Officer 

San Joaquin Valley Air Pollution Control District 

1990 E. Gettysburg Avenue 

Fresno, CA 93726-0244 

Re: 	 Kraft / Post / Ralcorp Facility (Facility N-1933) 

Modesto, California 

I)ea~edin: Enclosed for your infonnation is a copy of a Finding of Violation ("FOV") and 

two Notice of Violations ("NOVs") issued by the United States Environmental Protection 

Agency ("EP A") to Kraft Foods, Inc. ("Kraft"), concerning the operation of its fonnerlyowned cereal manufacturing facility in Modesto, California ("the Facility"). The Facility 

is currently owned by Ralcorp Holdings, Inc. ("Ralcorp"). EPA issued similar FOV / 

NOVs to Ralcorp on July 16, 2009. 

The FOV has been issued because the Facility is a major source and it failed to 

obtain a Title V operating pennit. The NOVs have been issued to address alleged 

violations of the San Joaquin Valley Air Pollution Control District ("District") Rule 2201 

("New and Modified Stationary Source Review Rule") and Rule 4693 ("Bakery Ovens"). 

Both of these rules are in the District's portion of the California State Implementation 

Plan. Specifically, the Facility is in violation of Rule 2201 because it failed to comply 

with Rule 2201 's Best Available Control Technology and offset requirements when it 

added new emission units to the Bran Flake production line in 2002. The other NOV 

identifies a violation of Rule 4693 because the Facility's bakery oven emissions are not 

vented to an approved emission control device. 

Printed on Recycled Paper 
The FOV and NOVs inform Kraft that a conference on these matters may be 

arranged by making a request to this office within 10 working days after receipt. In 

response to the July 16,2009 FOV and NOVs, a meeting between EPA, Ralcorp, Kraft 

and the District was held on August 13,2009. 

If you have any questions concerning the FOV andlor NOVs, please contact 

Cyntia Steiner, Air Enforcement Office, at (415) 947-4112. 

Sincerely, 

Deborah Jordan 

Director, Air Division 

Enclosures 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION IX 

75 Hawthorne Street 

San Francisco, CA 94105·3901 

AUa 1 8 2009 

In Reply: AIR-5 

Refer To: Docket No.'s R9-09-12 

R9-09-13 

R9-09-14 

Mr. James Ryden 

Chief, Compliance Division 

California Air Resources Board 

P.O. Box 2815 

Sacramento, CA 95812 

Re: 	 Kraft / Post / Ra1corp (Facility N-1933) 

Modesto, California 

Dear Mr. Ryden: 

Enclosed for your information is a copy of a Finding ofViolation ("FOV") and 

two Notice ofVi01ations ("NOVs") issued by the United States Environmental Protection 

Agency ("EPA") to Kraft Foods, Inc. ("Kraft"), concerning the operation of its formerlyowned cereal manufacturing facility in Modesto, California ("the Facility"). The Facility 

is currently owned by Ralcorp Holdings, Inc. ("Ra1corp"). EPA issued similar FOV / 

NOVs to Ralcorp on July 16, 2009. 

The FOV has been issued because the Facility is a major source and it failed to 

obtain a Title V operating permit. The NOVs have been issued to address alleged 

violations of the San Joaquin Valley Air Pollution Control District ("District") Rule 2201 

("New and Modified Stationary Source Review Rule") and Rule 4693 ("Bakery Ovens"). 

Both of these rules are in the District's portion ofthe California State Implementation 

Plan. Specifically, the Facility is in violation of Rule 2201 because it failed to comply 

with Rule 2201 's Best Available Control Technology and offset requirements when it 

added new emission units to the Bran Flake production line in 2002. The other NOV 

identifies a violation of Rule 4693 because the Facility's bakery oven emissions are not 

vented to an approved emission control device. 

The FOV and NOVs inform Kraft that a conference on these matters may be 

arranged by making a request to this office within 10 working days after receipt. In 

response to the July 16, 2009 FOV and NOVs, a meeting between EPA, Ralcorp, Kraft 

and the District was held on August 13,2009. 

Printed on Recycled Paper 
If you have any questions concerning the FOV andlor NOVs, please contact 

Cyntia Steiner, Air Enforcement Office, at (415) 947-4112. 

Sincerely, 

Director, 

D~~ Air Division 

Enclosures