## PLACER COUNTY

AIR POLLUTION CONTROL DISTRICT

STAFF REPORT

RULE 502

NEW SOURCE REVIEW

PROPOSED AMENDMENTS

AUGUST 8 , 2013PROPOSED AMENDMENT OF

RULE 5 02

, NEW SOURCE REVIEW

STAFF REPORT

Executive Summary

Placer County Air Pollution Control District’s (District) New Source Review (NSR) Rule

502 was amended on October 13 , 201 1

, in order to obtain full approval of the United States Environmental Protection Agency (EPA) and the California Air Resources Board (ARB) for incorporation into the State Implementation Plan (SIP)

. Prior to adoption, staff

had worked with these agencies and believed the pro posed rule would be approvable. Upon legal review of the rule by EPA , they approved most of the rule, but also cited

some new deficiencies that must be addressed before the rule can fully be approved into

the SIP

. EPA’s a ction was published in the Federal Register on February 22, 2013

, as FR

12267

. EPA prepared a Technical Support Document (T SD ) which gives the basis for the

limited approval, limited disapproval. The T SD is included as an attachment to this staff

report.

The limited disapproval resulted from two main deficiencies:

The definition of “NSR Regulated Pollutant” does not specify that gaseous

emissions which condense to form either PM10 or PM2.5 must be counted as PM10 or PM2.5, respectively.

EPA has revised i ts policy regarding PM2.5 interpollutant offset ratios. Any ratio involving PM2.5 precursors now must be submitted to EPA for approval for use in a district’s interpollutant offset program for PM2.5 nonattainment areas.

Section 303.6.4 of the rule states specific offset ratios. This section must be

deleted or the District must submit a technical demonstration that shows the net air quality benefits of such ratio for the relevant PM2.5 nonattainment area.

EPA also has suggested that a potential issue with the rule in the future is lack of a threshold for lead emissions where a pu blic notice would be required. This was a recent issue with Sacramento Metropolitan Air Quality Management District’s New Source

Review rule

.

The proposed amendments to Rule 502 t o remove these deficiencies are:

Add a sentence to the PM10 definition to address condensable emissions:

“Gaseous emissions which condense to form PM10 shall also be counted as PM10”, and

Add a sentence to the PM2.5 definition to address condensable emissions:

“Gaseous emissions which condense to form PM2.5 shall also be counted as PM2.5”, andStaff report: Rule 502, NEW SOURCE REVIEW

Board Date August 8 , 2013

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To address the interpollutant ratio issue, delete the wording in section 303.6.4 “The interpollutant offset ratios for PM2.5 shall be: NOx to PM2.5

-- 100:1 and

S Ox to PM2.5

-- 40:1, and add “Interpollutant emission offsets between PM2.5 and PM2.5 precursors are not allowed unless modeling demonstrates that PM2.5 interpollutant offset ratios are appropriate in an approved PM2.5 attainment plan”, and

The potential le ad public notice issue can be resolved by ad ding the following

sentence to S ection 103: “The publi c notification requirements of S ections 406 and 407 also apply to all new or modified stationary sources that are projected to

emit increased actual lead emis sions at a rate of 5 tons per year or greater”. A

similar statement is also added to Section 406.

Discussion of Proposed Amendments

Amended Rule 502

, New Source Review

, was adopted by the District Board on October

1 3 , 201 1 and submitted to EPA via the AR B by a letter dated November 18, 2011

, for a revision of the California State Implementation Plan. The current NSR version of Rule

502 in the SIP has a limited approval, limited disapproval

. In a Federal Register

announcement (72 FR 12267) on February 22, 2013 , EPA approved the bulk of Rule 502 for incorporation into the SIP with disa pproval of several minor items. The limited disapproval does not prevent the District from enforcing the rule as federally enforceable.

One of the issues is that EPA has clari fied definitions of PM10 and PM2.5 to include both solid and condensable gas components. Rule 5 02 needs to reflect this fact. While the District has always understood that the condensable component is part of the PM10 and PM2.5, it was not spelled out in the de finition. Test procedures specified in the permits issued by the District have consistently required measuring both the solid and condensable components.

The definitions in the rule (Section 238, PM2.5 and Section 239, PM10) are amended to

add the s entence:

Gaseous emissions which condense to form PM2.5 shall also be counted as

PM2.5

or

Gaseous emissions which condense to form PM10 shall also be counted as PM10.

The second deficiency in Rule 502 noted by EPA has to do with interpollutant offset

ratios for PM2.5. Section 303.6.4 of the rule states:

The interpollutant offset ratios for PM2.5 shall be: NOx to PM2.5

– 100 to 1 and

SOX to PM2.5

– 40 to 1.Staff report: Rule 502, NEW SOURCE REVIEW

Board Date August 8 , 2013

4 of 6

This means that if a source is required to provide offsets for PM2.5, they have the option of p roviding 100 pounds of NOx for each pound of PM2.5 needed. The rational for this is that NOx is a precursor for PM2.5 and 100 pounds of NOx can result in one pound of PM2.5. Likewise, SOx can produce PM2.5. These ratios were originally recommended by EP A.

Since the District last amended Rule 502, EPA has revised its policy regarding PM2.5 interpollutant offset ratios. EPA now says that in order to use these offset ratios, the District will need to provide a submittal making the necessary demonstration o f these ratios in our region.

The amended Rule 502 deletes the specific ratios in t his section (Section 303.6.4). A sentence is added to the section which states: “Interpollutant emission offsets between PM2.5 and PM2.5 precursors are not allowed unless m odeling demonstrates that PM2.5 interpollutant offset ratios are appropriate in an ap proved PM2.5 attainment plan”. This demonstration is a very involved analysis and the District does not plan to conduct it at

this time.

The final issue with the rule is the suggestion by EPA to add a statement dealing with when a public notice is r equired for new lead emissions. The trigger for when a public notice is required for most pollutants is when a new or modified source i s required to provide offsets. There is n ot an offset threshold for lead, so the notice would never be required by the current rule. The Federal Clean Air Act requires a public notice for lead when new emissions of lead are at five tons per year or more.

The amended rule adds a sentence to Secti on 103, Public Notification Requirements that

states:

The publi c notification requirements of S ections 406 and 407 also apply to all new or modified stationary sources that are projected to emit increased actual lead emissions at a rate of 5 tons per year or greater.

A similar statement is also added to Section 406.

Currently, there are no sources in the District that emit significant quantities of lead. The only permit issued in recent history that had lead emissions was for the repainting of the

Foresthill Bridge. In this project, the old paint that was removed by shot blasting

contained lead. While the paint stripping was contained in enclosures with the air exhausted through filters, som e lead was emitted to the air. The pe rmit limit for lead

emissions is 32 pounds per year.

Fiscal Impact

The proposed amendment of Rule 502 should have no fiscal impact on permit applicants as compared with business under the current version of the rule. The clarification of theStaff report: Rule 502, NEW SOURCE REVIEW

Board Date August 8 , 2013

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definitions of PM2.5 and PM10 to include condensable components does not change how

the District has been treating PM2.5 and PM10.

Eliminating the stated interpollutant offset ratios for PM2.5 precursors is not likely to cause a fiscal impact to permit ap plicants because the ratios are so extreme that they

would not be used.

Specifying that a public notice is required for increased lead emissions of five tons per year or more is not likely to cause increased costs to the applicant or the District because the type of industry in the District does not have lead emissions.

Analysis and Findings

The following Analysis and the subsequent Findings are intended to address the requirements set forth in the Health and Safety Code relating to adoption of a new or amended District Rule, as well as other State statutes referenced herein.

Cost

- Effectiveness of a Control Measure

California Health & Safety Code (H&S) Section 40703 requires a District to consider and make public “the cost

- effectiveness of a control mea sure”. Since the amendment of Rule 502 has no cost impact on the public or permit applicants, there is no cost

- effectiveness

related to this action.

Socioeconomic Impact

H&S Section 40728, in relevant part, requires the Board to consider the socioeconomi c impact of any new rule if air quality or emission limits are significantly affected. However, Districts with a population of less than 500,000 persons are exempted from the socioeconomic analysis. In 20 1 2 , the population of Placer County was approximatel y 3 5 5 ,000 persons.

California Environmental Quality Act (CEQA)

Proposed amended Rule 5 02 is not an activity that may cause a direct or reasonably foreseeable indirect physical effect in the environment therefore not considered a “project”, as defined by Section 21065 of the California Public Resource Code and Section 15378(b) (4)&(5) of the CEQA guidelines. A CEQA analysis is therefore not necessary.

The amendments to Rule 502 are changes to bring the current rule into compliance with the

federal Clean Air Act.

FindingsStaff report: Rule 502, NEW SOURCE REVIEW

Board Date August 8 , 2013

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A. Necessity

– The amendment of Rule 5 02 is necessary in order to obtain federal

and state recognition the District’s New Source Review rule in the SIP.

B. Authority

– California Health and Safety Code, Sections 40000, 40001, 40701,

4 0702, and 40716 are provisions of law that provide the District with the authority to adopt this amended Rule.

C. Clarity

– There is no indication, at this time, that the proposed Rule is written in such a manner that persons affected by the Rule cannot easi ly understand

them.

D. Consistency

– The regulation is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations.

E. Non

- duplication

– The regulation does not impose the same requirements as an existing state or federal regulation.

F. Reference

– All statutes, court decisions, and other provisions of law used by PCAPCD in interpreting this regulation is incorporated into this analysis and this finding by referen ce.