AQMD ANNUAL EMISSIONS REPORTS

The South Coast Air Quality Management District recently adopted amendments to Regulation III – Fees. The more salient changes are the switch from a fiscal year to a calendar year reporting program and the 4.1% fee increase for most fee categories.

During the transitional period, from July 1, 2007 through December 31, 2007, facilities will be required to only report the six-month transitional emissions (from 7/1 to 12/31/07), and to use either the existing AER software or the new web-based program. The emission fee rates are specified in Rule 301, Tables III and IV. Fees for Permit Processing, Annual Operating Permit Renewal and Annual Operating Emissions will not be subject to change. The deadline to submit the six-month transitional report is September 2, 2008.
The Greenhouse Gas (GHG) emissions and annual emissions combined reporting starts in calendar year 2008. The deadlines for facilities that are subject to the California Air Resources Board mandatory reporting of Greenhouse Gas emissions and choose to report their GHG emissions to the AQMD and CARB, are as follows:

1. April 1, 2009: Power generation & co-generation facilities, General Stationary Combustion Sources (> 25,000 metric tons CO2) excluding oil & gas production facilities with a NAICS code of 211111.
2. June 1, 2009: Cement plants, hydrogen plants, refineries and general stationary combustion facilities within the oil & gas sector with a NAICS code of 211111.

Who is required to report and pay fees?

• Facilities in the Annual Operating Permit Emission Fee Program; those are companies who pay annual emissions for permitted equipment. Such facilities are subject to AQMD Rule 301(e) and are required to file when exceeding the corresponding reporting thresholds;
• Facilities whose permitted plus all un-permitted emissions equal 4 tons or more per year (2 tons/year for this one half year reporting period) of criteria pollutants (VOCs, NOx, SOx, CO, PM, Specific Organics);
• Facilities which had emissions [thresholds specified in Rule 301(e)] of specific Toxic Air Contaminants or ozone depleting compounds, listed in form TAC;
• Facilities that receive a second half 2007 Annual Emissions Report Package.
• Facilities whose six-month transitional emissions exceed the thresholds in Table 1 shown below. The emission reporting thresholds are reduced to one half of the current annual values listed in the rule for criteria pollutants and in Rule 301, Table IV for toxics compounds.

Table 1. Emission Thresholds (half-year reporting)

What if I miss the deadline?

The SCAQMD second half of 2007 Emissions Report for the transitional period will be accepted through September 2, 2008 without penalty. If a facility misses the deadline and owes an emission fee, late payment penalties in the form of a percentage of the emission fees will apply. The penalties are set forth in AQMD Rule 301(e)(10)(B) and are as follows:

After submitting my report I found out I estimated emissions incorrectly

Companies who pay their emissions fees on time but underestimated their emissions, which resulted in underpayment to SCAQMD, can re-submit the report subject to underpayment penalties. If the underpayment is corrected within one year from the filing deadline and more than 90% of the amount due was paid, there are no penalties. However, if payment was less than 90% of the amount due, the penalty is 15% of the underpayment amount. When the underpayment is determined more than one year and sixty days from the official due date, fee rates and penalties will be assessed based on 301(e)(10)(D). Fees are determined based on rates in effect for the year when the emissions are actually reported and not the year wherein the emissions occurred.

A facility can file a refund request when overestimating of the emissions resulted in overpayment to AQMD. The refund request must be submitted in writing as set forth in Rule 301.

Special circumstances
The AQMD has a Fee Review Committee to handle issues regarding fees and penalties.

Other changes

• Amendment of the fees for the Portable Equipment Registration Program (PERP) for consistency with changes implemented by the California Air Resources Board (CARB),
• A waiver of plan fees for Rule 2449 – Control of Oxides of Nitrogen from Off-Road Diesel Vehicles.
• A special operating fee for petroleum refineries to fund a technology assessment to reduce SOx emissions from petroleum refineries
• A waiver of the public notice preparation fee for dry cleaners located within 1,000 feet of a school that install, modify or replace perchloroethylene dry cleaning equipment to comply with Rule 1421.
• Hearing board petitioners who are individuals or other entities with limited annual revenue, will be charged the lower Hearing Board fees applicable to small businesses (total annual gross receipts criterion, of $500,000 or less, as defined under “Small Business” in Rule 102.)

NEW FEE FOR ARCHITECTURAL COATINGS

Despite industry opposition, the South Coast Air Quality Management District’s board adopted a new layer of fees for the architectural coatings industry at its June monthly meeting. Staff justified the fee, citing that architectural coatings represent the largest emission source under SCAQMD and that there was no cost recovery for the agency to address the increasing regulatory and enforcement activities.

Under the new program (Rule 314—Fees for Architectural Coatings) the agency plans to allocate five additional inspectors to cover an estimated 15,000 sources made up of professional contractors, retail stores and painting sites. The agency has an ambitious goal of completing 3,000 inspections and collecting 800 samples per year.

The program will be phased in over a three year period, beginning in 2009. Manufacturers will have to pay a fee of $168.62 for a manufacturer identification application. Fees of 3.6 cents per gallon of paint and $246 per ton of VOC emissions will be imposed. Coatings with 5 percent or less of VOC per liter of material are exempt from the fees as are the recycled coatings. The annual cost to the industry (about 200 manufacturers) is estimated at $ 4.2 million.

CHANGES PROPOSED FOR BOILERS, STEAM GENERATORS AND HEATERS

The SCAQMD has proposed amendments to Rules 1146 —Emissions of Oxides of Nitrogen from Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters — and 1146.1 — Emissions of Oxides of Nitrogen from Small Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters. Rule 1146.1 applies to non-RECLAIM sources between 2 and 5 mmbtu/hr, whereas Rule 1146 pertains to sources greater than or equal to 5 mmbtu/hr. The district projects NOx emission reductions of approximately 0.29 tons per day by 2015.

The changes under Rule 1146 call for NOx limits of:

• 5 ppm (0.0062 lbs/million Btu) for natural gas fired units greater than or equal to 75 mmbtu/hr by January 1, 2013
• 9 ppm (0.011 lbs/million Btu) for natural gas fired units greater than 20 mmbtu/hr and less than 75 mmbtu/hr by January 1, 2012
• 9 ppm (0.011 lbs/million Btu) for natural gas fired units greater than 5 mmbtu/hr and less than 20 mmbtu/hr by January 1, 2013
• 9 ppm (0.011 lbs/million Btu) for equipment located at schools and universities (any size) by January 1, 2013
• 25 ppm for landfill gas fired units by January 1, 2015
• 15 ppm for digester gas fired units by January 1, 2015

The proposed NOx Limits and Compliance Dates under Rule 1146.1 are as follows:

• 25 ppm for any units fired on landfill gas by January 1, 2015
• 15 ppm for any units fired on digester gas by January 1, 2015
• 9 ppm for any units fired on natural gas (excludes equipment at schools and universities) by January 1, 2012
• 9 ppm for any units fired on natural gas located at schools and universities by January 1, 2014

The proposed rule amendment also introduces:

• A weighted average formula for duel fueled co-fired units
• Recognition of energy efficient units
• Compliance testing frequency compatible with RECLAIM sources in the same size range
• Monitoring NOx emissions with a portable analyzer
• Ending the derating of existing units
• Compliance with the 30 ppm NOx limit for low fuel usage units by January 1, 2015 or burner replacement, whichever occurs later
• Extending the compliance date for health facilities complying with seismic safety requirements

The rule is expected to cost from $8,400 to $20,600 per ton of NOx . The cost differential is attributed to unit size, types of burners, and the unit’s operation and load. The preliminary incremental cost effectiveness ranges from $110,900 to $231,000 per ton (ultra low-NOx burner compared to SCR).

OEHHA PROPOSES NO SIGNIFICANT RISK LEVELS

The Safe Drinking Water and Toxic Enforcement Act of 1986 (Health and Safety
Code, section 25249.5 et seq.), commonly known as Proposition 65, prohibits businesses from “knowingly and intentionally” exposing any individual to a chemical that has been listed as known to the State to cause cancer or reproductive toxicity, without first giving clear and reasonable warning to such individual. The Act contains exemptions whenever it can be demonstrated that the exposure does not pose a significant risk. One such method is through the application of a specific regulatory level established for the chemical in question. Exposure is calculated based on an exposed population of 100,000, assuming exposure over a 70-year lifetime. The Office of Environmental Health Hazard Assessment (OEHHA) is the enforcing agency in the state of California.

OEHHA has proposed No Significant Risk Levels (NSRLs) for C.I. direct blue 218 [(3,3′-((3,3′-Dihydroxy-1,1′-biphenyl-4,4′-diyl) bis(azo) bis(5-amino-2,7-naphthalenedisulfonato-(O4,O3)) ) dicopper, tetrasodium salt]. The chemical is used as a dye for paper and textile goods. It is estimated that 40% of the compound is used to color paper, 25% to color textiles, 15% for leather and the rest in diverse applications in petroleum, rubber, plastics, soap, fur and hair dye industries.

OEHHA has calculated a NSRL of 50 micrograms per day. Any levels below this threshold are considered exempt from Proposition 65 requirements and the discharge prohibition.

AIR DISTRICT MAY IMPOSE ADDITIONAL FEES FOR STATIONARY SOURCES

The Air Quality Management Plan for the South Coast district currently includes control measure FSS-04 – EMISSION CHARGES OF $5,000 PER TON OF VOC FOR STATIONARY SOURCE EMITTING OVER 10 TONS PER YEAR. The measure stems from Title I, Section 185 of the Clean Air Act which, requires that all stationary sources of VOC emissions (greater than 10 tons per year) in an extreme non-attainment area that has failed to attain the ambient air quality standard for ozone, pay a fee as a penalty for such failure. The district’s control measure proposes that if the federal ambient air quality standards for ozone are not met by the year 2010, an emissions fee of $5,000 for each ton of VOC emissions in excess of the ten tons per year shall be imposed on each facility. The fee shall be paid for each calendar year after the year 2010 until the area is re-designated as an ozone attainment area. This fee is in addition to the annual emissions fee required by SCAQMD Rule 301.