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: DocketNo.'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 (FacilityN-1933) Modesto, California DearMs. Rosenfeld: Enclosed is a Finding ofViolation ("FOV") and two Notice ofViolations ("NOVs") issued bythe United States Environmental Protection Agency ("EPA") to Kraft Foods, Inc. ("Kraft"), concerning the operation ofits formerly-owned cereal manufacturing facility in Modesto, California ("the Facility"). The Facility is currently ownedbyRalcorp Holdings, Inc. ("Ralcorp"). EPA issued similar FOV/ NOVs to Ralcorp on July 16,2009. The FOV has been issuedbecause the Facilityis a major source and has failed to obtain a Title V operating permit. The NOVs have been issued to address alleged violations ofthe San Joaquin Valley Air Pollution Control District ("District") Rule 2201 ("New and Modified Stationary Source Review Rule") and Rule 4693 ("Bakery Ovens"). Both ofthese rules are in the District's portion ofthe California State Implementation Plan. Specifically, the Facilityis in violation ofRule 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 otherNOV identifies a violation ofRule 4693because the Facility's bakery oven emissions are not vented to an approved emission control device. Ifyou wish to discuss the FOV and NOVs, you mayrequest a conference with EPA. The conference would afford Kraft an opportunityto present information bearing

Printed on Recycled Paper

### on the finding ofviolation, 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 shouldbe made as soon as possible, but in any event no later than 10 working days after receipt ofthis letter. Sincerely,

# D~9W Director, Air Division Enclosures

cc: Mr. Seyed Sadredin, APCO, San Joaquin Valley AirPollution Control District Mr. James Ryden, Chief, Enforcement Division, California Air Resources Board Amy Lincoln, Esq., Beveridge & 

### DiamondUNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 9

In the Matter of: ) DocketNo. R9-09-12 ) Kraft Foods, Inc. ) Finding and Notice ofViolation 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 ofthe Clean AirAct ("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 Facilityis located within thejurisdiction ofthe San Joaquin ValleyAirPollution Control District ("SJV APCD" or "District,,).1 This FOV is issued under the authority and at the discretion ofthe Director ofthe AirDivision for EPA, Region IX? GENERAL STATUTORY AND REGULATORY BACKGROUND Title V Operating Permit Program Requirements 1. Title V ofthe Act requires major stationary sources ofairpollution to obtain an operating permit that includes emissions limitations and such other conditions as necessaryto assure compliance with applicable requirements ofthe Act. See 42 U.S.C. §§ 7661a-766lf. EPA's regulations implementing the Title V operating permitprogram 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 ozoneNational 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 ofthe EPAto notify a person in violation ofa state implementation plan. This FOV alleges violations ofTitle V; therefore, it is not a statutoryprerequisite to enforcement. We areapproval to the District's Title V program effective May 24, 1996 and granted full approval effective November 30,2001. 40 CFRPart 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) peryear ofvolatile 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 afterbecoming subject to the permitprogram. SJVAPCD Rule 2520, §5.1. 5. EPA's regulations, at40 CFR §70.5(a), provide that the owner oroperator ofatitle 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 orbefore such earlier date as the permitting authority mayestablish. 6. Section 502(a) ofthe Act provides that, after the effective date ofa Title V permitprogram, operation ofa 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 ofthe 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 ofthe Facility was transferred to Ralcorp Holdings, Inc. ("Ralcorp"). 8. The Facility is capable ofoperating 24 hours per day, 7 days per week, 52 weeks peryear. 9. Certain equipment at the Facility emits VOCs as a result ofthe use ofyeast and other ingredients, such

as flavorings and vitamins.

issuing this FOV to provide Ralcorp with notice ofEPA's findings ofnon-compliance at the Facility. 3 Ground-level ozone is fonned when VOCs react with nitrogen oxides (,'NOx") in the presence ofsunlight. As precursors to ozone, VOCs are regulated pollutants. 

### 210. Pursuant to its authority under Section 114 ofthe 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 ofRalcorp's Response to EPA's Information Request. 13. Ralcorp's Response to EPA's Information Request contained a document entitled, "Historical Emissions byPurchasing 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 EmitbyProduct." This document calculates the Facility's potential to emit based on emissions resulting from the production ofthree different cereal products. This document states that the Facility'spotential to emit VOCs is 137.39 tons (274,780 pounds) peryear. 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 Facilityhas manufactured the three cereal products used to calculate the Facility's potential to emit VOCs since at least 2003. FINDINGS OF VIOLATION Finding ofFailure to Submit a Timely Title V Permit Application and Finding ofOperation ofa Major Source without a Valid Title V Permit 16. The Facility is a major source ofair 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 Facilitywas required to have submitted a Title V permit application no later than 12 months after



### 3becoming subject to the program. 20. The Facilityhas not submitted a Title V permit application. 21. The Facility has been operating as a major source ofair pollution without a valid Title V permit. 22. The Facilityhas been in violation ofsection S02 ofthe Act, 40 C.F.R. §70.S(a), and SN APCD Rule 2520, §5.1 since at least December 31,2002. EPA may determine that the period ofviolation is more extensive ifit finds additional instances in which the Facility's actual emissions orpotential to emit exceeded anymajor source threshold in addition to those alleged herein. 23. The Facilityremains and will continue to be in violation ofsection of502 ofthe Act, 40 C.F.R. §70.5(a), and SN APCD 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 ofthe United States Environmental Protection Agency, byauthority duly delegated to the undersigned, finds that Kraft Foods, Inc. has violated ofsection 502 ofthe Act and its implementing regulations, as set forth in the Findings ofViolation. ENFORCEMENT Section 113(a)(3) ofthe Act provides that when anyperson has violated anyrequirement or prohibition ofTitle V ofthe Act, EPA may: issue an order requiring compliance with such requirement or prohibition, or issue an administrative penaltyorder pursuant to section 1l3(d) for civil administrative penalties ofup to $37,500 per day ofviolation, or bring a civil action pursuant to section 113(b) for injunctive reliefand/or civil penalties of notmore than $37,500 per day for each violation. Furthermore, ifa person knowingly violates requirements relating to Title V, section 113(c) provides for criminal penalties or imprisonment, orboth.



### 4Under section 306(a) ofthe Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and Executive Order 11738, facilities to be used in federal contracts, grants, and loans must be in full compliance with the Act and all regulations promulgated pursuant to it. Violations ofthe Act mayresult in the facility being declared ineligible for participation in anyfederal contract, grant, or loan. PENALTY ASSESSMENT CRITERIA Section 113(e)(I) ofthe Act states that the Administrator orthe court, as appropriate, shall, in determining the amount ofany penaltyto be assessed, take into consideration (in addition to such other factors asjustice may require) the size ofthe business, the economic impact ofthe penaltyon the business, the violator's full compliance history and good faith efforts to comply, the duration ofthe violation as established byany credible evidence (including evidence other than the applicable testmethod), payment bythe violator ofpenalties previously assessed for the same violation, the economic benefit of noncompliance, and the seriousness ofthe violation. Section 113(e)(2) ofthe Act allows the Administrator or the court to assess a penalty for each day ofviolation. Forthe purposes ofdetermining the number ofdays ofviolation, where the EPA makes a prima facie showing that the conduct or events giving rise to this violation are likely to have continued or recurred past the date ofthis FOV, the days ofviolation shall bepresumed to include the date ofthis FOV and each and everydaythereafter until the violator establishes that continuous compliance has been achieved, except to the extent that the violator can prove bythe 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 ofviolation, the nature ofthe violation, and any efforts itmayhave taken or proposes to take to achieve compliance. Kraft has the right to berepresentedbycounsel. A request for a



### 5conference with EPA mustbe made within ten (10) working days ofreceipt ofthis FOV. The request for a conference or other inquiries concerning the FOV should be made in writing to:

Date 

### I Kara Christenson Office ofRegional Counsel (ORC-2) U.S. Environmental Protection Agency 75 Hawthorne Street San Francisco, California 94105 (415) 972-3881

# DeboL4b~ Director, Air Division



### 6UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 9



### In the Matter of: ) DocketNo. R9-09-13 ) Kraft Foods, Inc. ) Finding andNotice ofViolation formerly ofModesto, 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 ofthe 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 thejurisdiction ofthe San Joaquin ValleyAir Pollution Control District ("SJV APCD" or "District"). Section 113(a)(1) ofthe Actrequires 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 ofthe AirDivision for EPA, Region IX. 

### GENERAL STATUTORY AND REGULATORY BACKGROUND I. Section II O(a) ofthe 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. Pursuant to Section 107(d) ofthe Act, 42 U.S.c. §7407(d), the Administrator has promulgated lists ofattainment status designations for each air quality control region ("AQCR") in every state. These lists identifythe attainment status ofeach AQCR for each ofthe criteriapollutants. 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 thejurisdiction ofthe San JoaquinValleyAir Pollution Control District ("SN APCD" 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) ofthe Actrequires 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 complywith any approved regulatoryprovision ofa SIP renders the person subject to enforcement under section 113 ofthe Act. 42 V.S.c. §7413(a)(1); 40 C.F.R. §52.23. SJVAPeD Rule4693 Bakery Ovens 6. In accordance with Section 110 ofthe Act, EPA has approved Rule 4693 (Bakery Ovens) as adopted

on May 16, 2002, into SN APCD's portion ofthe California SIP. 69 Fed. Reg. 22441 (April 26, 2004). 7. Section 2.0 ofRule 4693 provides: "The requirements ofthis rule shall apply to bakery ovens operated at major source facilities, which emit VOCs during the baking ofyeast-leavened products." 8. Section 3.1 ofRule 4693 defines "bakery oven" as: "[A]n enclosed compartment supplied with heat, typically from the combustion ofnatural gas, used to bake bread, buns and rolls

...." 9. Section 3.4 ofRule 4693 defines "leaven" as: "[A] rise in the dough caused

... a fennentationproducing agent such as yeast." 10. Section 3.5 ofRule 4693 defines a "major source" as defined in Rule 2201 (New and Modified Stationary Source Review Rule). Section 3.25 ofRule 2201 defines a major source as one having a potential to emit greater than 50,000 pounds ofVOCs annually. Section 3.36 ofRule 2201 defines a "stationary source" as "anybuilding, 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 

### 2affectedpollutant [defined as including VOCs, per Rule 2201, section 3.4] directly or as a fugitive emission." 11. Section 3.2 ofRule 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 bakeryunless 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 ofat 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 Facilityuntil August 4,2008, when ownership and operation ofthe Facilitywas 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 ofDistrict permitN-1933-4-1. 15. Pursuant to its authorityunder 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 ofRalcorp's Response to EPA's Information Request. 18. Ralcorp's Response to EPA's Information Request contained a document entitled, "Potential to Emit byProduct." This document calculates the Facility's potential to emitbased on emissions resulting

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

### 3from the production ofthree different cereal products. This document states that the Facility's potential to emit VOCs is 137.39 tons peryear. 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'spotential 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 ofthe Facility, accompanied byRalcorp employees, for the purpose of familiarizing EPA enforcementpersonnel 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 "bakeryoven" are not vented to an approved emission control device. FINDING OF VIOLATION Finding ofFailure to Comply with Rule 4693 23. The Facilityis a major source ofairpollution, 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.



### 424. The Facilityis subject to the requirements ofRule 4693 because it is a major source operating a bakeryoven. 25. The Facilityhas been in violation ofRule 4693 since at least April 26, 2004, because it does not vent emissions from the bakeryoven to an approved emission control device. 26. The Facilityremains and will continue to be in violation ofRule 4693 until itproperly vents emissions from the bakeryoven to an approved emission control device. NOTICE OF VIOLATION Notice is given to Kraft Foods, Inc. that the Administrator ofthe United States Environmental Protection Agency, by authority dulydelegated to the undersigned, finds that Kraft Foods, Inc. has violated section 110 ofthe Act, the California SIP, and SJVAPCD Rule 4693, as set forth in the Finding ofViolation. ENFORCEMENT Section 113(a)(I) ofthe Act provides that when anyperson has violated anyrequirement or**prohib~tion** ofan applicable implementation plan orpermit, EPA may: issue an orderrequiring compliance with the requirements orprohibition ofsuch implementation plan or permit, or issue an administrative penalty orderpursuant to section 113(d) for civil administrative penalties ofup to $37,500 per day ofviolation, or bring a civil action pursuant to section 113(b) for injunctive reliefand/or civil penalties ofnot more than $37,500 per dayfor each violation. Furthermore, ifa person knowingly violates anyrequirements ofan applicable implementation plan more than 30 days after notification ofviolation, section 113(c) provides for criminal penalties or imprisonment, orboth. Under section 306(a) ofthe Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and



### 5Executive 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 ofthe Act mayresult in the facility being declared ineligible for participation in any federal contract, grant, or loan. PENALTYASSESSMENT CRITERIA Section 113(e)(1) ofthe Act states that the Administrator or the court, as appropriate, shall, in determining the amount ofanypenaltyto be assessed, take into consideration (in addition to such other factors asjustice mayrequire) the size ofthebusiness, the economic impact ofthe penalty on the business, the violator's full compliance history and good faith efforts to comply, the duration ofthe violation as established byany credible evidence (including evidence other than the applicable test method), payment bythe violator ofpenalties previously assessed for the same violation, the economic benefit ofnoncompliance, and the seriousness ofthe violation. Section 113(e)(2) ofthe Act allows the Administrator or the court to assess a penalty for each day ofviolation. For the purposes ofdetermining the number ofdays ofviolation, where the EPA makes

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

orrecurred past the date ofthis NOV, the days ofviolation shall bepresumed to include the date ofthis NOV and each and every daythereafter until the violator establishes that continuous compliance has been achieved, except to the extent that the violator can prove bythe 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, conferwith EPA. The conference will enable Kraft to present evidence bearing on the finding ofviolation, the nature ofthe violation, and any efforts it mayhave taken or proposes to take to achieve compliance. Kraft has the right to berepresented bycounsel. A request



### 6for 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 shouldbemade 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

Date 

# 7 Deblr"iofdaIl Director, Air Division



### 7UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 9

In the Matter of: ) DocketNo. R9-09-14 ) Kraft Foods, Inc. ) Finding andNotice ofViolation formerly ofModesto, 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 AirAct ("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 thejurisdiction ofthe San Joaquin ValleyAir Pollution Control District ("SJVAPCD" or "District"). Section 113(a)(I) ofthe Act requires the EPA Administrator to notify a c.,_ person who has violated a state implementation plan. The authorityto issue NOVs has been delegated to the Director ofthe Air Division for EPA, Region IX. GENERAL STATUTORYAND REGULATORY BACKGROUND 1. Section 11O(a) ofthe Actrequires that all states adopt state implementationplans ("SIPs") that provide for the implementation, maintenance and enforcement ofprimaryand secondary air quality standards. 42 U.S.c. §7410(a). 2. The Facility is located within thejurisdiction ofthe San Joaquin ValleyAir Pollution Control District ("SN APCD" or "District"). 3. A person's failure to complywith any approved regulatoryprovision ofa SIP renders the person subject to enforcement under section 113 ofthe 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 ofthe Act, EPAhas approved Rule 2201 ("New and Modified Stationary Source Review Rule"), as adopted on December 19, 2002, into SN APCD's portion ofthe California SIP. 69 Fed. Reg. 27837 (May 17, 2004). 5. Section 4.0 ofRule 2201 requires "BestAvailable Control Technology" ("BACT"), on a pollutant-bypollutant and emissions unit-by-emissions unitba>sis, for "a new.emissions unit with a potential to emit greater than 2.0 pounds per day." 6. Section 3.9 ofRule 2201 defines BACT as the most stringent emission limitation or control technique that has been achieved in practice orrequired by any SIP for the same class or category as the source. 7. Section 4.5.3 ofRule 2201 requires offsets, on a pollutant-by-pollutant and emissions unit-byemissions unit basis, for facility modifications that increase VOC emissions bymore than 20,000 pounds peryear. 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 ofthe Facility was transferred to Ralcorp Holdings, Inc. ("Ralcorp"). 9. The Facilityis capable ofoperating 24 hours per day, 7 days per week, 52 weeks peryear. 10. Certain equipment atthe Facility emits VOCs as a result ofthe use ofyeast and other ingredients, such

as flavorings and vitamins. 11. The Facilityhas three different production lines, one ofwhich is known as the "Bran Flake" line. Depending on the type ofcereal produced, the Bran Flake line mayormaynot involve the use a natural gas-fired dryer.



### 212. 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: "Ourplan is to install a new Aeroglide cereal dryer along with low Nox [sic] burners and cyclones to capture anyparticulate 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, "Authorityto 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 Facilityto manufacture a

new type ofcereal with a new flavoring that would requIre the use ofa dryer. See ATC Application Review, at 1. 14. The District's ATC Application Review also stated that the new dryer would emit VOCsbecause of the combustion ofnatural gas in the dryer, but did not mention or address potential VOC emissions from the new dryer resulting from the use offlavorings orvitamins. See ATC Application Review, at 10-12. 15. On or aboutNovember 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. Thepermit required installation and operation ofcyclones to control particulate emissions, but did not require installation oroperation ofequipment to control orreduce VOC emissions resulting from the use offlavorings or vitamins. 16. Pursuant to its authority under section 114 oftheAct, EPA conducted a site inspection on March 3 and 4,2009. Information provided to and observations made byEPA inspectors confirmed that the modifications to the Bran Flake line authorized byATC permit N-1933-3-4 are used for the production ofa type ofcereal, identified for the purposes ofthis NOVas "Cereal A".



### 317. On or about May4 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 ofRalcorp'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 Facilitycommencedproduction 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 perhour or 27.75 tons peryear. FINDING OF VIOLATION Finding ofFailure to Comply with Rule 2201 21. The Facilityis in violation ofSection 4.0 ofRule 2201 because it failed to complywith Rule 2201's BACT requirements when it modified the Bran Flake line byinstalling 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 ofSection 4.5.3 ofRule 2201 because it failed to obtain offsets when it modified the Bran Flake production line byinstalling new emissions units with a post-project PTE above 20,000 pounds peryear. Specifically, the Facilitytriggered Rule 2201's offset requirement when it installed two new coating reels and one 8 mmBtu dryer in late 2002 orearly 2003. 23. The Facilityremains and will continue to be in violation ofRule 2201 until it installs and operates BACT and obtains valid offsets for the equipment authorized byATC permitN-1933-3-4. NOTICE OF VIOLATION Notice is given to Kraft Foods, Inc. that the Administrator ofthe United States Environmental



### 4Protection Agency, by authority duly delegated to the undersigned, finds that Kraft Foods, Inc.**~as** violated section 110 ofthe Act, the California SIP, and SNAPCD Rule 2201, as set forth in the Finding of Violation. ENFORCEMENT Section 113(a)(1) ofthe Actprovides that when anyperson has violated anyrequirement or prohibition ofan applicable implementation plan or permit, EPA may: issue an orderrequiring compliance with the requirements orprohibition ofsuch implementation plan orpermit, or issue an administrative penaltyorder pursuant to section 113(d) for civil administrative penalties ofup to $37,500 per day ofviolation, or bring a civil action pursuant to section 113(b) for injunctive reliefand/or civil penalties of not more than $37,500 per day for each violation. Furthermore, ifa person knowingly violates anyrequirements ofan applicable implementation plan more than 30 days after notification ofviolation, section 113(c) provides for criminal penalties or imprisonment, orboth. Under section 306(a) ofthe Act, the regulations promulgated thereunder (40 C.F.R. Part 15), and Executive Order 11738, facilities to be used in federal contracts, grants, and loans must be in full compliance with the Act and all regulations promulgated pursuant to it. Violations ofthe Act mayresult 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 orthe court, as appropriate, shall, in determining the amount ofanypenaltyto be assessed, take into consideration (in addition to such other factors asjustice mayrequire) the size ofthe business, the economic impact ofthe penalty on the business, the violator's full compliance history and good faith efforts to comply, the duration ofthe violation as



### 5established byany credible evidence (including evidence other than the applicable test method), payment bythe violator ofpenalties previously assessed for the same violation, the economic benefit of noncompliance, and the seriousness ofthe violation. Section 113(e)(2) ofthe Act allows the Administrator or the court to assess a penalty for each day ofviolation. Forthe purposes ofdetermining the number ofdays ofviolation, where the EPA makes a prima facie showing that the conduct or events giving rise to this violation are likely to have continued or recurred past the date ofthis NOV, the days ofviolation shall bepresumed to include the date ofthis NOV and each and everydaythereafter until the violator establishes that continuous compliance has been achieved, except to the extent that the violator can prove bythe 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 ofviolation, the nature ofthe violation, and any efforts it mayhave taken or proposes to take to achieve compliance. Kraft has the right to berepresented bycounsel. A request for a conference with EPAmustbe made within ten (10) working days ofreceipt ofthis NOV. The request for

a conference orother 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, AirDivision 

### 6UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105·3901 

### AUG 1 8 2009 In Reply: Refer To: AIR-5 DocketNo.'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 ofa Finding ofViolation ("FOV") and two Notice ofViolations ("NOVs") issuedbythe United States Environmental Protection Agency ("EPA") to Kraft Foods, Inc. ("Kraft"), concerning the operation ofits fonnerlyowned cereal manufacturing facility in Modesto, California ("the Facility"). The Facility is currently ownedbyRalcorp Holdings, Inc. ("Ralcorp"). EPA issued similar FOV/ NOVs to Ralcorp on July 16, 2009. The FOVhas been issuedbecause the Facility is a major source and it failed to obtain a Title V operatingpennit. The NOVs have been issuedto address alleged violations ofthe San Joaquin Valley Air Pollution Control District ("District") Rule 2201 ("New and Modified Stationary Source Review Rule") and Rule 4693 ("Bakery Ovens"). Both ofthese rules are in the District's portion ofthe California State Implementation Plan. Specifically, the Facility is in violation ofRule 2201 because it failed to comply with Rule 2201 's Best Available Control Technology and offsetrequirements when it added new emission units to the Bran Flake production line in 2002. The otherNOV identifies a violation ofRule 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 maybe arranged bymaking 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. Ifyou have any questions concerning the FOV andlorNOVs, please contact Cyntia Steiner, AirEnforcement Office, at (415) 947-4112. Sincerely,

Deborah Jordan Director, Air Division EnclosuresUNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105·3901 

## AUa 1 8 

## 2009 In Reply: AIR-5 Refer To: DocketNo.'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 (FacilityN-1933) Modesto, California Dear Mr. Ryden: Enclosed for your information is a copy ofa Finding ofViolation ("FOV") and two Notice ofVi01ations ("NOVs") issuedbythe United States Environmental Protection Agency ("EPA") to Kraft Foods, Inc. ("Kraft"), concerning the operation ofits formerlyowned cereal manufacturing facility in Modesto, California ("the Facility"). The Facility is currently ownedby Ralcorp Holdings, Inc. ("Ra1corp"). EPA issued similar FOV/ NOVs to Ralcorp on July 16, 2009. The FOVhas been issuedbecause the Facility is a major source and it failed to obtain a Title V operatingpermit. The NOVs have been issuedto address alleged violations ofthe San Joaquin Valley Air Pollution Control District ("District") Rule 2201 ("New and Modified Stationary Source Review Rule") and Rule 4693 ("Bakery Ovens"). Both ofthese rules are in the District's portion ofthe California State Implementation Plan. Specifically, the Facilityis in violation ofRule 2201 because it failed to comply with Rule 2201 's Best Available Control Technology and offsetrequirements when 

### it added new emission units to the Bran Flake production line in 2002. The otherNOV identifies a violation ofRule 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 maybe 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.

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### If

### you have any questions concerning the FOV andlor NOVs, please contact Cyntia Steiner, Air Enforcement Office, at (415) 947-4112. Sincerely,

# D~~ Director, Air Division Enclosures