The Placer County Air Pollution Control District (PCAPCD) proposes to adopt the Federal Clean Air Act Section 185 Penalty Fees as District Rule 611. This proposed rule adoption would result in the enforcement of penalty fees associated with the 8-hour National Ambient Air Quality Standard (NAAQS) for ozone.
PCAPCD is responsible for air quality management and enforcement in a portion of the Sacramento Federal Ozone Nonattainment Area (SFNA), where the Sacramento Valley Air Basin and the Mountain Counties Air Basin currently face nonattainment for the 2008 and 2015 8-hour ozone NAAQS. Currently, SFNA is designated as severe nonattainment for the 2008 standard (0.075 ppm) and serious nonattainment for the 2015 standard (0.070 ppm). However, recent developments indicate that achieving the required standards by the deadlines may be challenging. The attainment years for the 2008 8-hour ozone standard and 2015 8-hour ozone standard are 2025 and 2032, respectively. The likelihood of missing the deadlines has led the relevant SFNA air districts to request a voluntary upgrade to severe nonattainment classification for the 2015 standard based on photochemical modeling results.
Clean Air Act Background
The Clean Air Act (CAA) Section 185 specifically requires severe or extreme nonattainment areas to impose fees on major stationary sources of ozone precursors, volatile organic compounds (VOCs), and nitrogen oxides (NOx), if the area fails to attain the standard by the applicable deadline.
On February 16, 2023, the United States Environmental Protection Agency (U.S. EPA) issued a Finding of Failure to portions of the SFNA, including Placer County. This finding was due to the non-submission of a CAA Section 185 penalty fee rule. Consequently, the District, along with other air districts in the Sacramento Metro area, is now under a regulatory clock for compliance. This clock requires the development of the penalty fees regulation and its submission to the SIP before the U.S. EPA applies sanctions such as emission offset and federal highway funding sanctions.
To address these challenges and halt the sanctions clock, the District proposes adopting Rule 611, the Federal Clean Air Act Section 185 Penalty Fees. This rule aims to implement the required CAA penalty fee not only for the 2008 and 2015 ozone standards but also for all future 8-hour ozone standards where the SFNA is classified as severe or extreme nonattainment by the U.S. EPA. The proposed rule outlines the assessment of annual penalty fees for major stationary sources of VOCs and NOx in the District if the SFNA fails to demonstrate attainment of specific ozone standards by the respective attainment year.
Notably, the proposed rule includes provisions for the cessation of penalty fees for an ozone standard if the SFNA is redesignated by the U.S. EPA to attainment for that standard. The required penalty fees would only be assessed following the issuance of a finding of failure to attain the ozone standard by the U.S. EPA.
Fines Based on Emissions
For each applicable ozone standard with a finding of failure to attain, major stationary sources would be obligated to pay a predetermined amount per ton emitted in excess of 80% of the source’s established baseline emissions. The baseline emissions are calculated for each ozone precursor pollutant (VOC and NOx) based on the source’s classification as a major stationary source. Three distinct categories govern the calculation of baseline emissions: major sources starting operation before the attainment year, during the attainment year, or after the attainment year. The choice of the attainment year is specific to the ozone standard for which the District is in severe or extreme nonattainment (2025 for the 2008 8-hour ozone standard and 2032 for the 2015 8-hour ozone standard).
If PCAPCD enforces penalty fees due to a failure to attain the EPA’s 8-hour ozone standard, the responsibility of each affected source is determined by their actual emissions in that year. If an affected source reduces annual actual emissions to 80% or less of their baseline emissions for the relevant ozone standard, they won’t be required to pay penalty fees. However, if their annual actual emissions exceed 80% of the baseline emissions, they must pay a consumer price index (CPI) adjusted fee. The proposed rule is expected to impact all Major sources within the District. This rule is scheduled for adoption effective February 8th, 2024.
If you would like to discuss the proposed adoption of this rule and how it may impact your facility, please contact Trinity’s Sacramento Office or call 916.444.6666.
