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In re Russell City Energy Center

Case Number:PSD Appeal No. 08-01
ELR Citation:38 ELR 41325


Petitioner Rob Simpson (“Mr. Simpson”) petitioned the Environmental Appeals Board (“Board”) to review a federal Prevention of Significant Deterioration (“PSD”)
permit (“Permit”) issued by the Bay Area Air Quality Management District (“the District”) to Russell City Energy Center (“RCEC”), on November 1, 2007, for operation
of a 600-megawatt natural gas-fired facility. The District processes PSD permit applications under the Clean Air Act (“CAA”) and issues permits under the federal PSD
program, pursuant to a delegation agreement with the U.S. Environmental Protection Agency.

The PSD proceedings that are the subject of this case are embedded in a larger California “certification” or licensing process for power plants conducted by the California Energy Commission (“CEC”), which is responsible for the siting of most power plants in the state. Pursuant to procedures for coordination of District and CEC proceedings, the District delegated to CEC the bulk of its 40 C.F.R. part 124 notice and outreach responsibilities with respect to the draft PSD permit for RCEC.

In his Petition, Mr. Simpson challenges issuance of the Permit as clearly erroneous on both procedural and substantive grounds. Among the procedural grounds for challenging the permit, Mr. Simpson contends that the District, in issuing the draft permit and Permit, failed to carry out certain forms of public notice, and to notify specific
entities entitled to notice as required by 40 C.F.R. § 124.10. On substantive grounds, Mr. Simpson challenges the Permit as not complying with Best Available Control
Technology (“BACT”) as well as numerous other federal and state law requirements.

In response, the District seeks summary dismissal of the Petition on the basis that Mr. Simpson failed to meet jurisdictional thresholds for Board review, including standing, preservation of issues for review, and timeliness. The District argues further that any alleged failure to comply strictly with the regulatory requirements was harmless since Mr. Simpson would not have participated in the PSD proceedings in any event.

Mr. Simpson counters that the District’s failure to comply with part 124 notice requirements thwarted his ability to participate in these proceedings and thus satisfy
jurisdictional thresholds.

Held: The Board remands the Permit so that the District can renotice the draft permit in accordance with the notice provisions of 40 C.F.R. § 124.10.

(1) Mr. Simpson may raise his notice claims for Board consideration despite Mr. Simpson’s “failure” to meet the ordinary threshold for standing under 40 C.F.R. § 124.19(a), which limits standing to those who participate in a permit proceeding by filing comments on the draft permit or participating in a public hearing on a draft permit. Denying Board consideration of fundamental notice claims would deny parties the opportunity to vindicate before the Board potentially meritorious claims of notice violations and preclude the Board from remedying the harm to participation rights resulting from lack of notice. Such denial would be contrary to the CAA statutory directive emphasizing the importance of public participation in PSD permitting and section 124.10’s expansive provision of notice and participation rights to the public.

(2) Mr. Simpson has not demonstrated that his affiliation with the Hayward Area Planning Association (“HAPA”) entitled him to particularized notice of the draft permit because HAPA, as a private organization, does not qualify as a “comprehensive regional land use planning agency” entitled to such notice during PSD permitting
pursuant to section 124.10(c)(1)(vii) and, even if it were, that does not mean Mr. Simpson was entitled to such notice.

(3) While the Board generally will not consider notice allegations in a petition where the sole deficiency alleged is failure to give notice to a particular person other than the petitioner, it nevertheless regards it as appropriate to consider claims of failure of notice to other persons within the scope of allegations of fundamental defects in the
integrity of the notice process as a whole that may be prejudicial to the notice rights of the petitioner and others.

(4) While a delegated state agency may redelegate notice and comment functions to another state agency to the extent the federal delegation so permits, in all cases it is incumbent upon the delegated state agency to ensure strict compliance with federal PSD requirements.

(5) Mr. Simpson has demonstrated that the District, in redelegating outreach to CEC, failed to ensure compliance with the notice and outreach obligations of the PSD regulations, thereby narrowing the scope of public notice to which Mr. Simpson and other members of the public were entitled. In particular, the District failed to ensure
compliance with the specific obligation at section 124.10(c)(1)(ix) to inform the public of the opportunity to be placed on a “mailing list” for notification of permitting actions through “periodic publication in the public press and in such publications as Regional and State funded newsletters, environmental bulletins, or State Law

(6) The District’s almost complete reliance upon CEC’s certification related outreach procedures to satisfy the District’s notice obligations regarding the draft permit resulted in a fundamentally flawed notice process. By “piggybacking” upon the CEC’s outreach, the District failed to exercise sufficient supervision over the CEC to ensure that the latter adapted its outreach activities to meet specific section 124.10 mandates. The inadequacy of the notice lists used by the CEC, the handling of public comments by the CEC, and the conduct of a public workshop by CEC with likely District participation during the PSD comment period at which air quality issues were
discussed but no record of public comments made all demonstrate that the CEC merely folded the PSD notice proceeding into its ongoing process without attempting to ensure that the part 124 requirements for public participation were met.

(7) Contrary to the District’s statements, the District’s notice omissions do not constitute “harmless error.” Such omissions affected more persons than Mr. Simpson, and even as to Mr. Simpson, the District’s assumption that, even with the proper notice, he would not have participated, is purely speculative.

(8) The District’s notice deficiencies require remand of the Permit to the District to ensure that the District fully complies with the public notice and comment provisions at section 124.10. Because the District’s renoticing of the draft permit will allow Mr. Simpson and other members of the public the opportunity to submit comments on
PSD-related issues during the comment period, the Board refrains at this time from opining on such issues raised by Mr. Simpson in his appeal.

(9) Several of the issues raised in Mr. Simpson’s Petition concern matters of California or federal law that are not governed by PSD regulations and, as such, are beyond the Board’s jurisdiction during the PSD review process. The Board will not consider these issues if raised following remand.