Air Pollution Control Board

San Diego County Air Pollution Control District

AGENDA ITEM

GOVERNING BODY

GREG COX

First District

DIANNE JACOB

Second District

KRISTIN GASPAR

Third District

NATHAN FLETCHER

Fourth District

JIM DESMOND

Fifth District

SUBJECT

NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 – EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 – REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

OVERVIEW

This is a request for the Air Pollution Control Board (Board) to adopt proposed new Rule 69.2.2 (Medium Boilers, Process Heaters, and Steam Generators) and related proposed amendments to Rule 11 (Exemptions from Rule 10 Permit Requirements) and Rule 12 (Registration of Specified Equipment) of the Air Pollution Control District (District). Proposed new Rule 69.2.2 will regulate air pollutant emissions from medium boilers, process heaters, and steam generators (units). These units are commonly used to provide hot water or steam at different types of facilities such as hospitals, college campuses, and military installations. These units are not currently regulated by the District and their resulting emissions contribute to the formation of ozone in the air we breathe. When inhaled, ozone adversely impacts people's health. Symptoms can include chest pain, shortness of breath, worsening of bronchitis and asthma, and nausea.

The need for the proposed new rule arises because the San Diego region does not meet the California and National Ambient Air Quality Standards for ozone. Consequently, both federal and State laws require the District to adopt and implement rules to further control and reduce ozone- forming emissions. Additionally, as technologies to control air pollutant emissions advance and lower limits on the allowable emissions become feasible, the District is required by federal and State laws to update its rules accordingly. The proposed new rule is the result of these requirements.

The proposed new rule establishes emission limits for new units in order to control and reduce their emissions and protect public health. Additionally, owners of new and existing units will be required to apply for either a permit or registration from the District and perform annual tune-ups to ensure the units are properly functioning and not generating excess emissions. The proposed requirements are similar to existing requirements in other California air districts (such as the Bay Area and Sacramento air districts), consequently compliant units are currently available.

Legistar v1.0 1

SUBJECT: NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 - EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 - REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

The Board is also requested to adopt related proposed amendments to District Rule 11 (Exemptions from Rule 10 Permit Requirements) and Rule 12 (Registration of Specified Equipment). Rule 11 is an administrative rule that provides specified operations and processes with an exemption from the requirement to have a District permit. Rule 12 allows specified equipment owners with the option obtaining a registration, which is a streamlined, less costly alternative to the process of obtaining a permit. These proposed rule amendments are necessary for consistency with the permitting and registration provisions of proposed new Rule 69.2.2.

This proposal was developed with input from the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and District staff conducted substantial outreach to affected facilities including conducting a public workshop. Workshop participants requested clarifications and were not opposed to the proposed new rule requirements of Rule 69.2.2 or to the proposed amendments of Rules 11 and 12.

Today's request is to adopt proposed new Rule 69.2.2 and related amendments to Rules 11 and 12. If adopted, new Rule 69.2.2 will become effective on July 1, 2021, providing time for affected manufacturers and distributors to transition to the new requirements. The new rule will be submitted through CARB to the EPA for approval into the State Implementation Plan for attaining and maintaining the air quality standards.

RECOMMENDATION(S)

AIR POLLUTION CONTROL OFFICER

1. Find that the adoption of proposed new Rule 69.2.2 – Medium Boilers, Process Heaters, and Steam Generators, and proposed amendments to Rule 11 – Exemptions from Rule 10 Permit Requirements and Rule 12 – Registration of Specified Equipment is categorically exempt from the provisions of the California Environmental Quality Act pursuant to California Code of Regulations, Title 14, Section 15308, as an action taken to assure the protection of the environment, where the regulatory process involves procedures for protection of the environment, and pursuant to California Code of Regulations, Title 14, Section 15061(b)(3), since it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.

2. Adopt the Resolution entitled: RESOLUTION ADOPTING NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 – EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 – REGISTRATION OF SPECIFIED EQUIPMENT, OF REGULATIONS II AND IV OF THE RULES AND REGULATIONS OF THE SAN DIEGO COUNTY AIR POLLUTION CONTROL DISTRICT.

SUBJECT: NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 - EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 - REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

FISCAL IMPACT

Funds for this request are not included in the Fiscal Year 2019-20 Operational Plan in the Air Pollution Control District. If approved, this request is expected to result in additional costs and revenues of $633,000 for initial permit applications and annual registration renewals. The funding source is fees paid by customers with affected equipment. There will be no change in net General Fund cost and no additional staff years.

BUSINESS IMPACT STATEMENT

Adopting proposed new Rule 69.2.2 and the related proposed amendments to Rules 11 and 12 is not expected to pose significant impacts on affected industries in the San Diego region. The proposed emission limits are feasible and compliant units are currently available due to similar requirements already in place in several California air districts. The proposed emission limits apply to new units only and do not require early replacement or modification of existing units. While low-emitting units are more expensive than conventional ones, they are more energy efficient and are therefore cheaper to operate, with an estimated payback over the life of the equipment.

Equipment manufacturers will be required to certify their new units’ compliance with the emission limits. However, the manufacturers already comply with this requirement in several other California air districts. The proposal increases regulatory certainty for the manufacturers by enhancing consistency with standards across the state. Additionally, owners of new and existing units will be required to apply for either a District permit or registration and perform annual tune- ups.

ADVISORY BOARD STATEMENT

The Air Pollution Control District Advisory Committee (Advisory Committee) considered proposed new Rule 69.2.2 and the related proposed amendments to Rules 11 and 12 during its meeting on December 11, 2019. The Advisory Committee is comprised of a total of nine seats. Four of those seats are currently vacant. Of the five Advisory Committee members currently appointed, two attended the meeting and they both expressed support for the new rule and the proposed amendments. Meeting materials, including proposed new Rule 69.2.2, and the proposed amendments to Rules 11 and 12 were shared with all appointed Advisory Committee members in advance of the meeting. No concerns with the proposal were raised to the Air Pollution Control District by Advisory Committee members.

BACKGROUND

The San Diego region does not meet the California and National Ambient Air Quality Standards for ozone, and therefore is classified as an ozone nonattainment area. Both federal and State law require the San Diego County Air Pollution Control District (District) to adopt and implement rules to further control and reduce ozone-forming emissions, specifically volatile organic compounds and oxides of nitrogen (NOx), which is the key pollutant that currently drives ozone pollution levels in the San Diego region. Additionally, as technologies to control air pollutant emissions advance and lower limits on emissions become feasible, the District is required by

SUBJECT: NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 - EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 - REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

federal and State laws to update its rules accordingly, and the proposed new rule is the result of this requirement.

Proposed new Rule 69.2.2 will control NOx emissions from medium boilers, process heaters, and steam generators (units) with a heat input rating between 2 and 5 million British thermal units (Btu) per hour. Equipment manufacturers will be required to certify their new units’ compliance with all applicable rule provisions. Additionally, owners of new and existing units will be required to apply for either a District permit or registration and perform annual tune-ups. The proposed requirements are similar to existing regulatory requirements in other California air districts and compliant units are readily available. The resulting emission reductions will improve air quality and public health, and help the region attain federal and State clean air standards for ozone pollution in a timely manner. Additionally, the new lower-emitting units are more fuel-efficient and by consuming less fuel they emit less greenhouse gases (such as carbon dioxide) and therefore help support the region's climate goals.

An estimated 900 existing units are currently in place at facilities throughout the region. When these existing units are replaced at the end of their useful lives, the new replacement units will be subject to the proposed emission limits. The proposed rule will reduce NOx emissions from affected equipment by approximately 62% (194 tons per year) once all existing units are ultimately replaced with new low-emitting units. This reduction in ozone-forming emissions will have the same air quality benefit in the region as permanently removing 190,000 cars from our roads.

Additionally, corresponding amendments to District Rule 11 (Exemptions from Rule 10 Permit Requirements) are proposed to remove an existing permit exemption for boilers, process heaters, and steam generators with a heat input rating between 2 and 5 million Btu per hour. Related amendments to District Rule 12 (Registration of Specified Equipment) are also proposed so that these units may be registered in lieu of obtaining a permit. Registration provides equipment owners with a streamlined, less costly alternative to the process of obtaining a permit.

Lastly, additional minor revisions to Rule 12 are also proposed. These include allowing paper shredders and small brewery grain silos to be registered in lieu of obtaining a permit.

If adopted, proposed new Rule 69.2.2 and Rule 11 will be submitted through the California Air Resources Board (CARB) to the U.S. Environmental Protection Agency (EPA) for approval into the State Implementation Plan for attaining and maintaining the air quality standards. Rule 69.2.2 will become effective on July 1, 2021, providing time for affected manufacturers and distributors to transition to the new requirements. The proposed new rule will require any new unit installed on or after July 1, 2021 to comply with the rule requirements. Rule 11 will become effective on April 1, 2021, maintaining the exemption for the affected boilers until they are eligible to submit an application for a registration. Rule 12 will be effective upon adoption, allowing any proposed new paper shredders and small brewery grain silos to apply for a registration right away.

Customer/Stakeholder Notification

SUBJECT: NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 - EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 - REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

District staff conducted a public workshop to gather input on proposed new Rule 69.2.2 and related proposed amendments to Rules 11 and 12 from affected parties. A workshop notice was posted on the District's website and sent to approximately 5,000 recipients including each air quality permit holder and chamber of commerce in the region, members of the Air Pollution Control District Advisory Committee, subscribers to the County's email notification service, the EPA and CARB.

The workshop was attended by 34 people, including industry representatives. District staff prepared responses to all comments and questions received, which were provided to the workshop participants in a Workshop Report (Attachment D). If proposed new Rule 69.2.2 and proposed amendments to Rules 11 and 12 are adopted, staff will conduct additional outreach including the distribution of an advisory notice to further inform potentially affected parties.

SOCIOECONOMIC IMPACT ASSESSMENT

State law requires the Air Pollution Control District to perform an assessment of the socioeconomic impacts when adopting, amending or repealing a rule that will significantly affect air quality or emission limitations. A Socioeconomic Impact Assessment was prepared for proposed new Rule 69.2.2 (Attachment E). The proposed emission limits are feasible, and compliant units are currently available due to similar requirements already in place in several California air districts. The proposed requirements apply to new units only and do not require early replacement or modification of existing units. While low-emitting units are more expensive than conventional ones, they are more energy efficient and are therefore cheaper to operate, with an estimated payback over the life of the equipment. Equipment manufacturers will be required to certify their new units’ compliance with the emission limits. However, the manufacturers already comply with this requirement in several other California air districts, and the proposal increases regulatory certainty for the manufacturers by enhancing consistency with standards across the state Therefore, the adoption of proposed new Rule 69.2.2 and the proposed amendments to Rules 11 and 12 are not expected to pose significant impacts on the affected industry sectors in San Diego county.

ENVIRONMENTAL STATEMENT

The California Environmental Quality Act (CEQA) requires an environmental review for certain actions. The Air Pollution Control District (District) has conducted a review of whether CEQA applies to the adoption of proposed new Rule 69.2.2, and the proposed amendments to Rules 11 and 12. Proposed new Rule 69.2.2 is required by federal and State law, which calls for adoption of every feasible control measure to accelerate progress toward achieving the ambient air quality standard for ozone. The proposed new rule will protect the environment by promoting significant reductions in NOx emissions. Also, the proposed amendments to Rules 11 and 12 are necessary for the implementation of proposed new Rule 69.2.2. Additionally, the proposed amendments to Rule 12 only serve to clarify and provide a different mechanism (registration) for imposition of existing regulatory requirements. Therefore, District staff determined that the adoption of proposed new Rule 69.2.2, and proposed amendments to Rules 11 and 12, are categorically exempt from the provisions of CEQA pursuant to California Code of Regulations, Title 14, Section 15308,

SUBJECT: NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 - EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 - REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

as an action taken to assure the protection of the environment, and pursuant to Section 15061(b)(3), since it can be seen with certainty that there is no possibility that the activity in question may have a significant adverse effect on the environment.

LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN

Today’s proposed actions support the Sustainable Environments/Thriving Initiative in the County of San Diego’s 2020-2025 Strategic Plan with an objective to enhance the quality of the environment by focusing on sustainability, pollution prevention, and strategic planning. Proposed new Rule 69.2.2 will reduce air pollutant emissions and improve air quality in San Diego county.

Respectfully submitted,

SARAH E. AGHASSI ROBERT J. REIDER

Deputy Chief Administrative Officer Air Pollution Control Officer

ATTACHMENT(S)

Note: Due to the size of the attachments, the documents are available online through the Clerk of the Board's website at www.sandiegocounty.gov/content/sdc/cob/bosa.html.

Attachment A – Resolution Adopting New Rule 69.2.2 – Medium Boilers, Process Heaters, and Steam Generators, and Related Amendments to Rule 11 – Exemptions from Rule 10 Permit Requirements and Rule 12 – Registration of Specified Equipment, of Regulations II and IV of the Rules and Regulations of the San Diego County Air Pollution Control District

Attachment B – Comparative Analysis

Attachment C – Incremental Cost-Effectiveness Analysis Attachment D – Workshop Report

Attachment E – Socioeconomic Impact Assessment

Attachment F – Rule 11 – Exemptions from Rule 10 Permit Requirements Change Copy Attachment G – Rule 12 – Registration of Specified Equipment Change Copy

SUBJECT: NOTICED PUBLIC HEARING - ADOPTION OF NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS, AND RELATED AMENDMENTS TO RULE 11 - EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 - REGISTRATION OF SPECIFIED EQUIPMENT (DISTRICTS: ALL)

AGENDA ITEM INFORMATION SHEET REQUIRES FOUR VOTES: ☐ Yes ☒ No

WRITTEN DISCLOSURE PER COUNTY CHARTER SECTION 1000.1 REQUIRED

☐ Yes ☒ No

PREVIOUS RELEVANT BOARD ACTIONS:

October 30, 2019 (AP1), Adoption of Amendments to Rule 12 (Registration of Specified Equipment); October 30, 2019 (AP2), Adoption of Amendments to Rule 11 (Exempt from Rule 10 Permit Requirements.

BOARD POLICIES APPLICABLE:

N/A

BOARD POLICY STATEMENTS:

N/A

MANDATORY COMPLIANCE:

N/A

ORACLE AWARD NUMBER(S) AND CONTRACT AND/OR REQUISITION NUMBER(S):

N/A

ORIGINATING DEPARTMENT: Air Pollution Control District

CONTACT PERSON(S):

ATTACHMENT B

COMPARATIVE ANALYSIS

PROPOSED NEW RULE 69.2.2 –

MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS

Statutory Requirements

Prior to adopting, amending, or repealing a rule or regulation, California Health and Safety Code Section 40727 requires findings of necessity, authority, clarity, consistency, non-duplication, and reference. As part of the consistency finding to ensure proposed rule requirements do not conflict with or contradict other District or federal regulations, Health and Safety Code Section 40727.2(a) requires the District to perform a written analysis identifying and comparing the air pollution control standards and other provisions of proposed new Rule 69.2.2 with existing or proposed District rules and guidelines and existing federal rules, requirements, and guidelines applying to the same source category.

Comparison with existing District rules and regulations

There are no prohibitory District rules that apply to combustion units of this size. In addition, such units will be subject to either the District Permit to Operate requirements pursuant to Rule 11 – Exemption from Rule 10 Permit Requirements, or the alternative option of applying for a Certificate of Registration pursuant to Rule 12 – Registration of Specified Equipment in lieu of obtaining a Permit to Operate.

An owner or operator of a unit that elects to apply for a District Permit to Operate will be subject to the New Source Review (NSR) rules. However, based on the emission limits of proposed new Rule 69.2.2 and a worst case scenario of continuous 24-hour daily operation, the potential to emit for a unit with a heat input rating of 4.99 million British thermal units (Btu) per hour would be significantly less than the 10 pounds per day NSR applicability threshold for Best Available Control Technology (BACT).

Comparison with federal NSPS Subpart Dc

New Source Performance Standards (NSPS) Subpart Dc – Small Industrial-Commercial- Institutional Steam Generating Units is applicable to units with a heat input rating of 10 million Btu per hour or more. Thus, NSPS Subpart Dc does not apply to combustion equipment with a heat input rating between 2 and 5 million Btu per hour that are subject to proposed new Rule 69.2.2.

Conclusion

There are no conflicts or contradictions between proposed new Rule 69.2.2 and BACT requirements. In addition, there are no applicable federal regulations for combustion equipment subject to proposed new Rule 69.2.2.

B-1

ATTACHMENT C

INCREMENTAL COST-EFFECTIVENESS ANALYSIS

PROPOSED NEW RULE 69.2.2 –

MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS

Health and Safety Code Section 40920.6(a) requires air districts to identify one or more potential control options that achieve at least the same benefit as the proposed rule, assess the cost-effectiveness of those options, and calculate the incremental cost-effectiveness of each identified option. Incremental cost-effectiveness is defined as the difference in control costs divided by the difference in emission reductions between two potential control options achieving the same emission reduction goal.

Proposed new Rule 69.2.2 will reduce oxides of nitrogen (NOx) emissions from medium boilers, process heaters, and steam generators with a heat input rating between 2 and 5 million British thermal units (Btu) per hour. The most efficient and cheapest technology to achieve the emission standards required by the rule is the use of low-NOx burners.

Units equipped with ultra-low NOx burners will provide higher emission reductions than those required by the proposed new rule.

Table 1. SDAPCD Rule 69.2.2 – Proposed New Rule

Table 2. Ultra-Low NOx Burners

Table 3. Incremental Cost-Effectiveness

As shown in Table 3, the incremental cost-effectiveness of achieving higher emission reductions is

$25 per pound of NOx reduced. This means that each extra pound of NOx emissions that would be reduced by requiring units with ultra-low NOx burners would cost $25 in San Diego County. Therefore, this potential option is not feasible.

Two other technologies exist that will provide higher emission reductions than those required by the proposed new rule – flue gas recirculation and catalytic reduction. However, both technologies are significantly more expensive and not practicable for units that will be regulated by proposed new Rule 69.2.2. In addition, equipment subject to the proposed new rule and complying with its requirements by using low-NOx burners is already available in the marketplace.

ATTACHMENT D

AIR POLLUTION CONTROL DISTRICT COUNTY OF SAN DIEGO

DRAFT PROPOSED AMENDMENTS TO

RULE 69.2.1 – SMALL BOILERS, PROCESS HEATERS, STEAM GENERATORS,

AND LARGE WATER HEATERS,

DRAFT PROPOSED NEW RULE 69.2.2 – MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS,

AND RELATED DRAFT PROPOSED AMENDMENTS TO

RULE 11 – EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS AND RULE 12 – REGISTRATION OF SPECIFIED EQUIPMENT

WORKSHOP REPORT

The San Diego County Air Pollution Control District (District) held a public workshop on September 27, 2019, to discuss and receive input on the draft proposed amendments to Rule 69.2.1

– Small Boilers, Process Heaters, Steam Generators, and Large Water Heaters; draft proposed new Rule 69.2.2 – Medium Boilers, Process Heaters, and Steam Generators; and related draft proposed amendments to Rule 11 – Exemptions from Rule 10 Permit Requirements and Rule 12 – Registration of Specified Equipment. A meeting notice was mailed to each permit holder, applicant, registration holder, and chamber of commerce in the region, as well as the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB). Additionally, a meeting notice was posted on the District’s website and distributed to interested parties including through the County of San Diego’s electronic mail service.

The workshop was attended by 34 people. A summary of the comments and District responses are provided below:

RULE 69.2.1 COMMENTS

1. WORKSHOP COMMENT

While the rule is intended to apply to equipment manufacturers, the words “or installs” in proposed Section (a) – Applicability could unintentionally subject owners or operators of a boiler, process heater, steam generator, or water heater (unit) to the rule. The District should clarify the rule applicability to minimize potential confusion or compliance issues for the regulated community.

DISTRICT RESPONSE

The District disagrees. Pursuant to both existing Rule 69.2.1 and the proposed amendments, any person who installs a new unit, whether an owner, operator, or third party, must ensure that the equipment complies with the requirements of Rule 69.2.1.

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

2. WORKSHOP COMMENT

Does the proposed amended rule apply to the sale of a used boiler with heat input rating from 75,000 to 600,000 Btu/hour?

DISTRICT RESPONSE

Yes, a used boiler that is sold or offered for sale on or after January 1, 2021, would be considered a "new unit" as defined in proposed Subsection (c)(14) and therefore subject to the proposed amended rule.

3. WORKSHOP COMMENT

Is a boiler (with heat input rating from 75,000 to 600,000 Btu/hour) that is relocated from one stationary source to another considered an existing unit?

DISTRICT RESPONSE

The relocated unit would be considered an existing unit only if both stationary sources are under the same ownership. Proposed Subsection (c)(17) has been revised to clarify this.

4. WORKSHOP COMMENT

If ownership of an existing unit (with heat input rating from 75,000 to 600,000 Btu/hour) is transferred from one owner to another, would the equipment then be considered as a new unit?

DISTRICT RESPONSE

The unit would be considered as an existing unit only if the transfer of ownership occurs before January 1, 2021, otherwise it would be considered a new unit.

5. WORKSHOP COMMENT

Are existing units required to undergo emissions testing?

DISTRICT RESPONSE

No. Proposed Subsection (e)(1) has been revised to clarify that only a manufacturer of any new unit offered for sale in San Diego County is required to conduct emissions testing for each model unit to certify compliance with the requirements of the rule.

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

6. WORKSHOP COMMENT

What documentation must an owner or operator of an existing unit maintain to demonstrate that it is not subject to the rule?

DISTRICT RESPONSE

The proposed requirements for record keeping apply to manufacturers only. Proposed Section (g)

– Record Keeping has been revised to clarify this.

7. CARB COMMENT

CARB has no official comments at this time.

8. EPA COMMENT

Proposed Subsection (b)(1)(iv) exempts from the rule units with a heat input rating from 75,000 Btu per hour to 400,000 Btu per hour that operate exclusively to heat residential swimming pools and hot tubs. However, there are residential pool and hot tub heaters commercially available that can comply with a NOx limit of 55 parts per million by volume (ppmv). Therefore, proposed Subsection (b)(1)(iv) should be removed, and such equipment should be subject to a NOx limit of 55 ppmv similar to other analogous air district rules.

DISTRICT RESPONSE

The District agrees. Proposed Subsection (b)(1)(iv) has been removed, and proposed Section (d)

– Standards has been revised to include a NOx emission limit of 55 ppmv for residential pool and hot tub heaters as suggested.

9. EPA COMMENT

Proposed Subsection (b)(1)(vi) exempts from the rule dual-fueled units. This exemption is a rule approvability issue because there are commercially available natural gas and liquefied petroleum gas (LPG) dual-fueled units that can comply with a 20 ppmv NOx limit, and natural gas and heating oil dual-fueled units that can comply with a 40 ppmv NOx limit. Therefore, proposed Subsection (b)(1)(vi) should be removed.

DISTRICT RESPONSE

The District agrees. Proposed Subsection (b)(1)(vi) has been removed as suggested.

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

10. EPA COMMENT

Proposed Subsection (b)(1)(vii) exempts from the rule existing or relocated units. This exemption is redundant to the rule applicability and should be removed.

DISTRICT RESPONSE

The District agrees. Proposed Subsection (b)(1)(vii) has been removed as suggested.

11. EPA COMMENT

Proposed Subsection (b)(2) exempts, from proposed Sections (e) – Certification Statement and (f)

– Labeling, new units with a heat input rating from 75,000 Btu per hour to less than 1,000,000 Btu per hour that operate primarily on non-Public Utility Commission quality natural gas or liquid fuel. This exemption is a rule approvability issue because it impacts the enforcement of proposed Sections (g) – Record Keeping and (h) – Test Methods for new units with a heat input rating from 75,000 Btu per hour to less than 1,000,000 Btu per hour. In addition, there are commercially available oil-fired units that can meet the NOx emission limits specified in proposed Section (d) – Standards and appear to meet the certification and labeling requirements of the rule. Therefore, proposed Subsection (b)(2) should be removed.

DISTRICT RESPONSE

The District agrees. Proposed Subsection (b)(2) has been removed as suggested.

12. EPA COMMENT

In proposed Subsection (e)(1)(iii), the name and address of the manufacturer should be included in the list of items required in the certification statement, in addition to the description of the model being certified, including burner type (or fuel-type), for rule approvability and consistency with other analogous air district rules.

DISTRICT RESPONSE

The District agrees. Proposed Subsection (e)(1)(iii) has been revised as suggested.

RULE 69.2.2 COMMENTS

13. WORKSHOP COMMENT

For consistency with the National Emission Standards for Hazardous Air Pollutants (NESHAP) Subpart DDDDD for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters, the following categories of boilers should be added to proposed Section (b) – Exemptions:

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

temporary portable boilers; rental boilers for supplemental steam; training boilers; and boilers or process heaters used specifically for research and development, including test steam boilers used to provide steam for testing the propulsion systems on military vessels.

DISTRICT RESPONSE

The District disagrees. NESHAP Subpart DDDDD regulates major sources of hazardous air pollutants. By contrast, proposed Rule 69.2.2 regulates oxides of nitrogen as a criteria pollutant and precursor to ozone pollution. The analogous boiler rules in other air districts do not provide the suggested exemptions.

14. WORKSHOP COMMENT

Are temporary units required to be registered with the District?

DISTRICT RESPONSE

Yes. Temporary units are subject to the requirements of the proposed rule, including obtaining a Certificate of Registration or Permit to Operate.

15. WORKSHOP COMMENT

If a unit is purchased before January 1, 2021, but installed after that date, is the equipment considered a new unit upon installation?

DISTRICT RESPONSE

Yes. Per the definition of “new unit” in proposed Subsection (c)(16), a unit installed on or after January 1, 2021, will be considered a new unit subject to the applicable requirements.

16. WORKSHOP COMMENT

For consistency, proposed Section (d) – Standards should include the tuning procedure specified in NESHAP Subpart DDDDD as an acceptable option.

DISTRICT RESPONSE

The District agrees. Proposed Subsections (d)(2) and (3) have been revised to reference the tuning procedure specified in NESHAP Subpart DDDDD, which is found in 40 CFR Part 63, Sections 63.7540(a)(10)(i) through (vi).

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

17. WORKSHOP COMMENT

Does proposed Section (e) – Monitoring Requirements apply to units fueled exclusively by natural gas, or to units fueled exclusively by liquid fuel?

DISTRICT RESPONSE

No. The monitoring requirements of proposed Section (e) apply only to new dual-fueled units capable of burning gaseous and liquid fuel.

18. WORKSHOP COMMENT

Proposed Section (e) – Monitoring Requirements refers to new units, but does not address existing units. It would be an additional expense for the owner or operator to install a fuel meter for an existing unit. Proposed Section (e) should be revised to ensure that the requirement to install a fuel meter does not apply to existing units.

DISTRICT RESPONSE

The suggested revision is unnecessary because proposed Section (e) applies only to an owner or operator of a new unit. Owners or operators of an existing unit are not subject to this proposed requirement.

19. WORKSHOP COMMENT

Will registered or permitted units be included in a site’s annual inspection? If so, will a District inspector require access to physically inspect the unit?

DISTRICT RESPONSE

Yes, units with a Certificate of Registration or Permit to Operate will be included in a site’s annual inspection. The inspection will include a review of the site’s records to verify compliance with proposed Section (h) – Record Keeping Requirements. Typically, physical access to the unit will not be necessary.

20. WORKSHOP COMMENT

What will be the process and fees required to apply for a Certificate of Registration or a Permit to Operate for a boiler?

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

DISTRICT RESPONSE

Application forms will be available on the District’s website. Once a completed application and applicable fee are submitted to the District, the application will be evaluated for approval. Upon District approval, a Certificate of Registration or Permit to Operate, as applicable, will be issued.

Evaluating and processing a registration application will require less District labor and time than for a permit application, and thus will be less costly. The proposed fee to apply for a registration will be determined as part of the next proposed update of District Rule 40 – Permit and Other Fees, which is scheduled for spring 2020.

Based on preliminary information, the registration application fee is roughly estimated to be approximately $1,000, in addition to an annual renewal fee that is roughly estimated to be approximately $200. The actual proposed fee values will be included in future draft amendments to Rule 40, which will be distributed for public review and comment prior to consideration of adoption by the Board at a public hearing.

21. WORKSHOP COMMENT

What are the conditions that will be specified on a Certificate of Registration for a boiler?

DISTRICT RESPONSE

The conditions will include the requirements for annual tuning, record keeping, and may include other conditions referenced from other applicable District rules, such as Rule 51 – Nuisance.

22. WORKSHOP COMMENT

Is an owner or operator required to apply for a Certificate of Registration before the installation of a new boiler?

DISTRICT RESPONSE

Yes. Before a new unit is purchased or installed, an application for a Certificate of Registration or Permit to Operate shall be submitted and approved by the District.

23. WORKSHOP COMMENT

What is the timeframe for receiving a Certificate of Registration for a boiler after a complete application is submitted to the District?

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

DISTRICT RESPONSE

In most cases, the District anticipates issuing a Certificate of Registration on the same business day a completed application is submitted.

24. WORKSHOP COMMENT

Why would someone choose to apply for a Permit to Operate instead of a Certificate of Registration for a boiler?

DISTRICT RESPOSE

There may be a rare circumstance in which a unit that is not certified (by the manufacturer to meet the emissions standards) is needed to support a process or operation that requires a Permit to Operate. Proposed Subsection (b)(3) exempts from the certification requirement any unit that is used in conjunction with any equipment, product line, system, process line or process that is subject to permit requirements. In this case, an owner or operator of an uncertified unit is required to apply for a Permit to Operate because the unit is not eligible for a Certificate of Registration.

25. WORKSHOP COMMENT

Would an existing certified unit ever require a Permit to Operate instead of a Certificate of Registration?

DISTRICT RESPONSE

No, the District is not aware of any instance in which it would require a Permit to Operate in lieu of a Certificate of Registration for an existing certified unit.

26. WORKSHOP COMMENT

Will the District maintain a list of certified units on its website to help facilitate the registration process?

DISTRICT RESPONSE

Yes, a list of certified units will be maintained on the District website.

27. WORKSHOP COMMENT

What is the anticipated cost increase for a certified unit that meets the proposed requirements versus a conventional unit?

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

DISTRICT RESPONSE

The District estimates that the capital cost of a certified unit is 35% more than a conventional unit. Certified units tend to be more fuel efficient and the resulting savings in fuel costs will help to offset the increase in capital cost.

28. WORKSHOP COMMENT

Is the estimated emissions reduction based on the replacement of existing units?

DISTRICT RESPONSE

Yes. The District estimates an emissions reduction of 194 tons of NOx per year upon full implementation of the rule when, through attrition, all existing units are eventually replaced at the end of their useful lives by new compliant equipment.

29. WORKSHOP COMMENT

The District should compare the additional resources that stationary sources would need to expend on new rules such as Rule 69.2.2 versus the environmental benefits that may be realized through implementation of the rule. Continuing to restrict emissions from stationary sources will have little effect on air quality considering that most of the NOx and VOC emissions are currently emitted from mobile sources.

DISTRICT RESPONSE

San Diego County does not attain the current federal and State clean air standards for ozone pollution. Accordingly, the District is mandated by federal and State law to adopt all feasible measures to further control and reduce ozone-forming emissions from stationary sources in the region, including oxides of nitrogen (NOx) from boilers, process heaters, and steam generators subject to proposed new Rule 69.2.2. Similar boiler rules are already in place throughout much of California.

The District acknowledges that controlling and reducing emissions from sources under its authority, i.e., stationary sources, is only part of the solution. Mobile sources, which are under State and federal control, contribute the majority of air pollutant emissions in the region. Accordingly, the District continues to work with our State and federal partners to seek the maximum feasible reductions from mobile sources. Additionally, the District will continue to offer monetary incentives to increase the penetration of the cleanest technologies in the mobile source sector and achieve the emissions reductions needed.

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

30. CARB COMMENT

CARB has no official comments at this time.

31. EPA COMMENT

Proposed Subsections (d)(2) and (3) specify the tuning procedures for applicable units. However, the rule allows for District discretion in determining acceptable boiler tuning procedures, and is a rule approvability issue. Either remove this provision for District discretion, or provide within the rule the minimum criteria for what would constitute approvable tuning requirements.

DISTRICT RESPONSE

The District agrees. Proposed Subsections (d)(2) and (3) have been revised to remove “or other tuning procedure approved by the Air Pollution Control Officer.”

32. EPA COMMENT

Proposed Subsection (f)(3) references the Bay Area AQMD Regulation 9, Rule 7, certification program for boilers as an alternative option for certifying units offered for sale in San Diego County. However, the version of Bay Area’s rule including this certification program is not in the California State Implementation Plan (SIP), and would need to be submitted into the SIP or otherwise addressed since this is a rule approvability issue. Proposed Subsection (f)(3) should be removed, but the EPA is willing to work with the District to explore alternative methods of approvable certification for these units.

DISTRICT RESPONSE

The District agrees. Proposed Subsection (f)(3) has been removed as suggested. New proposed Subsection (f)(2) has been added to require the certification application to demonstrate that the unit model was tested in accordance with the test methods in proposed Section (i) – Test Methods. In addition, new proposed Subsection (f)(3) has been added to clarify that after completing the review of the application for certification and source test report, the Air Pollution Control Officer shall either approve the certification and include the subject model on the list of certified devices, or deny the certification.

33. EPA COMMENT

The records retention schedule specified in proposed Section (h) – Record Keeping Requirements should be extended to five years to improve enforceability.

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

DISTRICT RESPONSE

The District disagrees. The three-year records retention requirement is consistent with all other District prohibitory rules.

RULE 11 COMMENT

34. WORKSHOP COMMENT

There seems to be a conflict between Rule 11 – Exemptions from Rule 10 Permit Requirements, Rule 12 – Registration of Specified Equipment, and Rule 69.2.2 – Medium Boilers, Process Heaters, and Steam Generators. Rule 11 exempts from Permit to Operate requirements a unit with a heat input rating of 2 million Btu per hour or less fired exclusively with natural gas and/or liquefied petroleum gas. Rule 69.2.2 applies to units with a heat input rating greater than 2 million Btu per hour to less than 5 million Btu per hour.

Units rated at 2 million Btu per hour are unaddressed in Rule 11, which may lead to confusion and compliance issues. Proposed Subsection (d)(2)(iv)(B) in Rule 11 should be revised to “less than 2 million Btu per hour fired exclusively with natural gas and/or liquefied petroleum gas.”

DISTRICT RESPONSE

The District disagrees. Units with a heat input rating of 75,000 to 2 million (inclusive) Btu per hour are subject to Rule 69.2.1, which does not require a Certificate of Registration or a Permit to Operate for such units. This is consistent with proposed Subsection (d)(2)(iv)(B) in Rule 11 which exempts from Permit to Operate requirements units with a heat input rating of 2 million Btu per hour or less.

RULE 12 COMMENTS

35. WORKSHOP COMMENT

Proposed Subsection (e)(1)(i) requires a Certificate of Compliance to be submitted with a completed Registration application form. Is a Certificate of Compliance required for registering an existing unit subject to proposed Rule 69.2.2 – Medium Boilers, Process Heaters, and Steam Generators?

DISTRICT RESPONSE

No. A Certificate of Compliance would be required for new units only.

Workshop Report

Rules 69.2.1, 69.2.2, 11, & 12

36. WORKSHOP COMMENT

What are the fees required to apply for a Certificate of Registration for a grain silo?

DISTRICT RESPONSE

Based on preliminary information, the registration application fee for a grain silo is roughly estimated to be approximately $1,000, in addition to an annual renewal fee that is roughly estimated to be approximately $200. Also see District Response to Workshop Comment No. 20.

37. WORKSHOP COMMENT

What are the conditions that will be specified on a Certificate of Registration for a grain silo?

DISTRICT RESPONSE

The conditions that will be specified on a Certificate of Registration for a grain silo will include the requirements specified in proposed Subsection (d)(7), and other conditions that mirror conditions specified in a Permit to Operate for a grain silo.

AMO:RC:jlm 12/05/19

ATTACHMENT E

SOCIOECONOMIC IMPACT ASSESSMENT

PROPOSED NEW RULE 69.2.2 -

MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS

February 2020

Prepared by

San Diego County Air Pollution Control District 10124 Old Grove Road

San Diego, CA 92131 SOCIOECONOMIC IMPACT ASSESSMENT

PROPOSED NEW RULE 69.2.2 –

MEDIUM BOILERS, PROCESS HEATERS, AND STEAM GENERATORS TABLE OF CONTENTS

PAGE

EXECUTIVE SUMMARY 3

I. INTRODUCTION 5

II. NECESSITY OF PROPOSED NEW RULE 69.2.2 5

III. SUMMARY OF PROPOSED NEW RULE 69.2.2 5

IV. TYPE OF INDUSTRIES AFFECTED BY THE PROPOSED

NEW RULE 6

V. RANGE OF PROBABLE COSTS TO INDUSTRY

INCLUDING SMALL BUSINESS 6

VI. AVAILABILITY AND COST-EFFECTIVENESS OF ALTERNATIVES 7

VII. EMISSION REDUCTION POTENTIAL AND COST-EFFECTIVENESS

OF THE PROPOSED NEW RULE 8

VIII. IMPACT OF THE PROPOSED NEW RULE ON EMPLOYMENT

AND THE REGIONAL ECONOMY 8

IX. CONCLUSION 9

EXECUTIVE SUMMARY

The San Diego County Air Pollution Control District (District) is required by federal and State law to adopt and periodically update rules to control and reduce ozone-forming emissions from stationary sources in the San Diego region, which is an ozone nonattainment area. The District's proposed new Rule 69.2.2 (Medium Boilers, Process Heaters, and Steam Generators) is the result of these federal and State requirements.

Additionally, when adopting, amending or repealing a rule that will significantly affect air quality or emissions limitations, the District is required by State law to assess the socioeconomic impacts. Proposed new Rule 69.2.2 will affect emissions limitations by establishing emissions standards for new medium boilers, process heaters, and steam generators. Accordingly, this Socioeconomic Impact Assessment (SIA) has been prepared pursuant to State law.

Proposed new Rule 69.2.2 will reduce emissions of oxides of nitrogen (NOx, which is an ozone- forming pollutant) from medium boilers, process heaters, and steam generators (units) with a heat input rating between 2 and 5 million British thermal units (Btu) per hour. Equipment manufacturers will be required to certify their new units’ compliance with all applicable rule provisions. Additionally, owners or operators of new and existing units will be required to apply for either a District permit or registration, and perform annual tune-ups. The proposed requirements are similar to existing regulatory requirements in other California air districts, and compliant units are readily available.

The proposed requirements (if adopted) will become effective on January 1, 2021, providing time for affected manufacturers and distributors to deplete their existing inventories of conventional units and transition to the new requirements.

An estimated 900 existing units throughout the region will be affected by the proposed new rule. Upon full implementation, when all existing units are replaced through normal attrition, the proposed new rule will reduce NOx emissions from affected equipment by approximately 62% or 194 tons per year, with an average cost-effectiveness of about $6 per pound of NOx emissions reduced.

Proposed new Rule 69.2.2 is very similar to regulatory requirements already in place in other California air districts such as Bay Area and Sacramento Metropolitan. Consequently, the emissions control technology, low-NOx burners, is well established and compliant units are readily available. Those air districts prepared socioeconomic impact assessments when adopting their requirements and determined that industry and consumer impacts were minimal and socioeconomic impacts were not significant. District staff used those assessments as guidelines when preparing the SIA herein.

Proposed new Rule 69.2.2 is not anticipated to have a significant socioeconomic impact on affected industries. The proposed emissions limits are feasible, and compliant units are currently available due to similar requirements already in place in other California air districts. While low-emitting units are more expensive than conventional ones, they are more energy efficient

and are therefore cheaper to operate, with an estimated payback over the course of the equipment useful life. The cost of low-emitting units is expected to decrease over time due to advances in technology and increased production. The proposed sell-through period will minimize potential impacts for manufacturers and distributors that are already familiar with the proposed rule requirements due to other California air districts having similar rules already in effect.

I. INTRODUCTION

California law requires air pollution control districts (with populations of 500,000 people or higher) to perform an SIA when adopting, amending, or repealing rules and regulations that will significantly affect air quality and emissions limitations.

The Health and Safety Code Section 40728.5 specifies the following elements to be included in the SIA:

1. The type of industry or business, including small business, affected by the rule or regulation.

2. The impact of the rule or regulation on employment and the economy of the region affected by the adoption of the rule or regulation.

3. The range of probable costs to industry or business, including small business, of the rule or regulation.

4. The availability and cost-effectiveness of alternatives to the rule or regulation.

5. The emission reduction potential of the rule or regulation.

6. The necessity of adopting, amending, or repealing the rule or regulation in order to attain state and federal ambient air quality standards.

II. NECESSITY OF PROPOSED NEW RULE 69.2.2

The San Diego County Air Basin does not attain the National and State Ambient Air Quality Standards for ozone. Consequently, the federal Clean Air Act requires the District to adopt rules reflecting Reasonably Available Control Technology (RACT) for major stationary sources of ozone precursors – volatile organic compounds and oxides of nitrogen (NOx). Similarly, the California Clean Air Act requires the District to adopt all feasible measures to control and reduce ozone precursor emissions from stationary sources.

Many air districts in California have already adopted rules regulating medium boilers, process heaters, and steam generators. The 2016 San Diego Regional Air Quality Strategy includes a measure to further reduce NOx emissions from such equipment. Proposed new Rule 69.2.2 is designed to implement this measure.

III. SUMMARY OF PROPOSED NEW RULE 69.2.2

The proposed new Rule 69.2.2 will apply to both new and existing units as follows: New Units:

• Prohibit the manufacture, sale, offer for sale, or distribution for use within San Diego County, or the installation or operation with San Diego County, of any new boiler,

process heater, or steam generator with a heat input rating greater than 2 million Btu per hour to less than 5 million Btu per hour that is not certified by the District to comply with the emissions standard of the rule.

• Specify a NOx emissions limit of 30 ppmv for new units when operated on gaseous fuel, and 40 ppmv when operated on liquid fuel.

• Require an owner or operator to have a new unit initially tuned no later than one year after the date of installation, and tuned at least once every calendar year thereafter.

Existing Units:

• Require an owner or operator of an existing unit to have it initially tuned no later than July 1, 2021, and tuned at least once every calendar year thereafter.

All Units (New or Existing):

• Require an owner or operator of any unit to keep records of tune-ups and/or emissions testing onsite for a minimum of three calendar years.

• Require an owner or operator of any unit without a current District Permit to Operate to either submit an application for registration or for an Authority to Construct/Permit to Operate no later than January 1, 2021.

IV. TYPE OF INDUSTRIES AFFECTED BY THE PROPOSED NEW RULE

Proposed new Rule 69.2.2 will affect manufacturers (SIC 3433), distributors and wholesalers (SIC 5074), and installers (SIC 1711) of boilers, process heaters, and steam generators. These units are used by any small or large-sized facility in San Diego County that requires a supply of hot water or steam. Some examples of these establishments include medical facilities, educational institutions, office buildings, prisons, military facilities, hotels, and commercial or industrial facilities. Most boiler manufacturers currently manufacture low-NOx units that can comply with the emissions standards of the proposed new rule.

V. RANGE OF PROBABLE COSTS TO INDUSTRY INCLUDING SMALL BUSINESS

A variety of low-NOx units are commercially available as a result of rules adopted by other California air districts, such as the Bay Area and Sacramento. Therefore, compliance with proposed new Rule 69.2.2 is not expected to increase costs for manufacturers to develop new technology.

Owners or operators of new and existing units will be required to apply for either a District permit or registration, and perform annual tune-ups. The rule requirements, which are effective January 1, 2021, will apply to existing units, and when an existing unit is replaced or a new unit is installed.

Table 1 below shows the annualized costs of both low-NOx and standard units of different sizes for facilities that will need to replace an existing unit (through normal attrition) or install a new one. The costs of low-NOx and standard units are based on information provided to the District from various manufacturers and distributors, cost information in a California air district’s staff report, and include installation expenses.1 The annualized costs were calculated assuming 20 years of useful equipment life, 4% interest, and include operation and maintenance costs assumed at 5% of capital equipment cost.

The table shows that the difference in annualized costs is an average of about $800 per year. It should be noted that newer equipment has a higher efficiency than standard units, which will result in fuel cost savings and help offset the increase in cost of low-NOx units. Further, the cost differential is anticipated to reduce as demand for low-NOx units increases over time and per- unit manufacturing costs fall, while demand for non-complying standard units decreases and per- unit manufacturing costs rise. Therefore, proposed new Rule 69.2.2 will not have a negative economic impact on industry including small businesses in San Diego County.

TABLE 1 – Total Annualized Costs of Units Subject to Proposed New Rule 69.2.2

VI. AVAILABILITY AND COST-EFFECTIVENESS OF ALTERNATIVES

There are two alternatives to the proposed new Rule 69.2.2 – adopt a less stringent rule, or adopt a more stringent rule.

The first alternative of adopting a less stringent rule is not recommended. Other air districts in California currently have adopted rules that regulate units in the same size category and with the same emissions standards as proposed new Rule 69.2.2. Thus, the proposed requirements are feasible and adopting less stringent requirements would be inconsistent with State law that requires the District to adopt all feasible control measures to reduce NOx emissions.

The second alternative of adopting a more stringent rule could be achieved via two options, requiring either (1) the immediate replacement of existing standard units with low-NOx units, or

(2) the modification (retrofit) of existing units with low-NOx burners.

As listed in Table 2 below, the cost-effectiveness values for option #1, immediate replacement of existing units, would have poor cost-effectiveness, with costs as high as $19 for each pound of resulting emission reduction. For reference, existing District rules to control and reduce NOx emissions from stationary sources have a cost-effectiveness of up to $6 per pound of emission reduction.

Option #2, retrofit existing units with low-NOx burners, may not be technologically feasible for older units.1 Moreover, this option has poor cost-effectiveness at more than $10 per pound of emission reduction. Therefore, the District does not recommend adopting either of the two options.

TABLE 2 – Option #1 Cost-Effectiveness – Immediate Replacement w/Low-NOx Unit

VII. EMISSION REDUCTION POTENTIAL AND COST-EFFECTIVENESS OF THE PROPOSED NEW RULE

Existing units with a heat input rating between 2 and 5 million Btu per hour are currently exempt from District requirements for a permit to operate. Thus, the District does not have a comprehensive inventory of existing units operating in San Diego County within the applicable size rating. However, based on unit populations in California air districts’ staff reports, and information in a boiler database, the total NOx emissions from an estimated 900 existing units subject to the proposed new rule are approximately 314 tons per year.1-6 Upon full implementation, when all existing units are replaced through normal attrition, the proposed new rule will reduce NOx emissions from affected equipment by approximately 62% or 194 tons per year, with an average cost-effectiveness of about $6 per pound of NOx emissions reduced.

VIII. IMPACT OF THE PROPOSED NEW RULE ON EMPLOYMENT AND THE REGIONAL ECONOMY

The District is required by State law to incorporate every feasible measure to control ozone precursors and to attain the Ambient Air Quality Standard for ozone at the earliest practicable date. The California Air Resources Board interprets “every feasible measure” to mean that, at a minimum, a district follows similar regulations that have been successfully implemented

elsewhere. Various air districts in California have already demonstrated feasibility through the adoption of rules that are similar to the proposed new rule. For example, the Bay Area Air Quality Management District Regulation 9, Rule 7 emissions standards have applied to the type of equipment that would be subject to proposed new Rule 69.2.2 since 2015.

The proposed new rule will require retail establishments and contractors to distribute, sell or install units with low-NOx burners. It is a point-of-sale rule in which new, low-NOx units will replace existing higher emission units gradually over time through normal attrition. The proposed new rule will become effective on January 1, 2021, providing time for affected manufacturers and distributors to deplete their existing inventories of standard units and transition to the new requirements.

As noted previously, while low-NOx units are typically more expensive than standard units, it is anticipated that equipment costs will decrease over time due to advances in technology and increase in demand for lower emission units, and thus, combined with fuel cost savings relative to standard units, the economic impact on the equipment users will be minimal.

In its socioeconomic impact assessment of Regulation 9, Rule 7, the Bay Area Air Quality Management District concluded that the rule would not have a significant impact on employment and the regional economy, as new low-NOx units replaced obsolete standard units gradually over time.1 It is reasonable to assume that a similar conclusion can be made as a result of adoption of proposed new Rule 69.2.2, considering that complying equipment is widely available and the cost differential will not significantly affect businesses in San Diego County.

IX. CONCLUSION

Proposed new Rule 69.2.2 is not anticipated to have a significant socioeconomic impact on affected industries. The proposed emissions limits are feasible, and compliant units are currently available due to similar requirements already in place in other California air districts. While low-emitting units are more expensive than conventional ones, they are more energy efficient and are therefore cheaper to operate, with an estimated payback over the course of the equipment useful life. The cost of low-emitting units is expected to decrease over time due to advances in technology and increased production. The proposed sell-through period will minimize potential impacts for manufacturers and distributors that are already familiar with the proposed rule requirements due to other California air districts having similar rules already in effect.

References

1. Bay Area Air Quality Management District, Regulation 9, Rule 7 Staff Report, June 2008.

2. South Coast Air Quality Management District, Rule 1146.1 Staff Report, August 2008.

3. San Joaquin Valley Air Pollution Control District, Rules 4306, 4307, and 4320 Staff Report, August 2008.

4. Sacramento Metropolitan Air Quality Management District, Rule 411 Staff Report, October 2004.

5. Santa Barbara County Air Pollution Control District, Rules 361 and 342 Staff Report, June 2019.

6. SDG&E boiler and water heater database, 2005.

ATTACHMENT F

RULE 11. EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS

(Effective 1/1/69: Rev. Adopted & Effective 10/17/95

Rev. Adopted & Effective 7/30/96 Rev. Adopted & Effective 5/21/97 Rev. Adopted & Effective 11/15/00 Rev. Adopted & Effective 4/25/07

Rev. Adopted 11/09/11 & Effective 5/09/12 Rev. Adopted & Effective 5/11/16

Rev. Adopted & Effective 10/30/19

Rev. Adopted (date of adoption) & Effective 1/1/21 10/1/20 04/01/21

INDEX OF EXEMPTION CATEGORIES AS LISTED IN SECTION (d)

PAGE

(1) Mobile Sources 6

(2) Combustion and Heat Transfer Equipment 7

(3) Structures and Structural Modifications 8

(4) Laboratory Equipment and Related Operations 8

(5) Replacement of Equipment 9

(6) Plant Support Equipment 10

(7) Metallurgical Processing Equipment – General 11

(8) Metallurgical, Glass, and Ceramic Processing Equipment – Using Furnaces,

Kilns, and Ovens 12

(9) Abrasive Blasting Equipment 13

(10) Machining Equipment 13

(11) Printing and Reproduction Equipment 14

(12) Food Processing and Food Preparation Equipment 14

(13) Plastics, Foam, and Rubber Processing Equipment and Operations 15

(14) Mixing, Blending, and Packaging Equipment 16

(15) Coating and Adhesive Application Equipment and Operations 16

(16) Solvent Application Equipment and Operations 18

(17) Storage and Transfer Equipment 19

(18) Drycleaning, Laundry Equipment, and Fabric Related Operations 20

(19) Miscellaneous Equipment and Operations 21

(20) Registered Equipment 24

San Diego County Air Pollution Control District Rule 11

RULE 11. EXEMPTIONS FROM RULE 10 PERMIT REQUIREMENTS

(a) APPLICABILITY

(1) This rule is applicable to any article, machine, equipment, or other contrivance which would otherwise be subject to Rule 10 – Permits Required.

(2) This rule shall not exempt equipment, operations, or processes described in Section (d) from meeting all other applicable requirements of these Rules and Regulations, and State and federal regulations, including the National Emission Standards for Hazardous Air Pollutants (NESHAP) and the New Source Performance Standards (NSPS).

(3) This rule shall not apply to any equipment, operation, or process that violates Rule 50 – Visible Emissions or Rule 51 – Nuisance as determined by the Air Pollution Control Officer. When the Air Pollution Control Officer makes such a determination and written notification is given to the owner or operator, the equipment, operation, or process may thereafter be subject to Rule 10 – Permits Required for a specified time as determined by the Air Pollution Control Officer.

(4) This rule shall not apply to any equipment, operation, or process described in Subsections (d)(2) through (d)(19) that emits more than 100 pounds per day of any one of the following criteria air pollutants: particulate matter (PM10), oxides of nitrogen (NOx), volatile organic compound (VOC), oxides of sulfur (SOx), carbon monoxide (CO), or lead (Pb).

(5) Except for equipment specified in Subsection (d)(20)(iii), Section (d) of this rule shall not apply to any equipment, operation, or process that

(i) emits or may emit toxic air contaminants, as defined in Rule 1200 – Toxic Air Contaminants – New Source Review, and

(ii) has emissions of toxic air contaminants that, in the absence of any emission control device or limitation on material usage or production, may be expected to exceed any standard specified in Rule 1200 (d)(1)(i), (d)(2), or (d)(3) as determined by the Air Pollution Control Officer. This provision shall not apply to any equipment, operation, or process for which construction or modification, as applicable, commenced prior to November 15, 2000, unless such equipment, operation, or process is subsequently modified in such a manner that increases emissions of one or more toxic air contaminants.

In the event the Air Pollution Control Officer makes a preliminary determination that any standard specified in Rule 1200 (d)(1)(i), (d)(2), or (d)(3) may be exceeded, the Air Pollution Control Officer shall notify the owner or operator in writing and specify the information needed to make a final determination. If the Air Pollution Control Officer makes a final determination that emissions, in the absence of any emission control device or limitation on material usage or production, may be expected to exceed any standard

specified in Rule 1200 (d)(1)(i), (d)(2), or (d)(3), the Air Pollution Control Officer shall notify the owner or operator in writing and include a statement that, as a result, Rule 11(d) does not apply and an Authority to Construct and Permit to Operate are therefore required.

(b) RESERVED

(c) DEFINITIONS

For the purposes of this rule, unless otherwise noted, the following definitions shall apply:

(1) "Abrasive Blasting Cabinet" means the same as defined in Rule 2 – Definitions.

(2) "Abrasive Blasting Room or Booth" means a structure that includes abrasive blasting equipment, a dust collector and/or recycling system for recovering spent abrasive. The operator blasts from within this structure and the emissions from abrasive blasting operations are vented through a control device. The abrasive blasting room or booth definition does not apply to temporary enclosures including, but not limited to, those at shipyards or inside ships.

(3) “Additive Manufacturing (3-D Printing)” means a process of joining materials to create objects from 3-D model data, usually layer upon layer, as opposed to subtractive manufacturing methodologies. Additive manufacturing processes include, but are not limited to, Direct Metal Laser Sintering, Selective Laser Melting, Selective Laser Sintering, and Direct Laser Melting.

(4) "Agricultural Source" means any equipment, operation, or process, or aggregation thereof, used in the production of crops, or raising of fowl or animals and located on contiguous property under common ownership or control that meets any of the criteria identified in Section 39011.5 of California Health and Safety Code, as it exists on May 11, 2016.

(5) "Biotechnology" means the use of living organisms and/or biological processes often combined with chemical processes to develop products used in a variety of fields such as medicine, agriculture, and food production. Biotechnology industry includes, but is not limited to, medicinal drug manufacturing, peptide synthesis and DNA synthesis.

(6) "Brake Horsepower Rating" means the maximum continuous brake horsepower output rating of the internal reciprocating combustion engine as specified by the engine manufacturer and listed on the engine nameplate or in other documentation establishing the maximum continuous brake horsepower as approved by the Air Pollution Control Officer.

(7) "CFR" means Code of Federal Regulations.

(8) "Designated Workstation" means an assigned area within the stationary source where a specified operation is conducted.

(9) "Digital Printing Operation" means an operation that uses a printing device guided by a computer-driven machine to transfer an electronic image to a substrate through the use of inks, toners, or other graphic arts materials. Digital printing operation also includes associated surface preparation, solvent cleaning, and the cleaning of application equipment.

(10) "Exempt Compounds" means the same as defined in Rule 2 – Definitions.

(11) "First-Article Deliverable Product" means the first product that is produced using research and development equipment and that is delivered to a potential intra- company or external customer for approval. First-article deliverable product shall not exceed one unit of each product per customer unless necessary in order for the customer to obtain statistically significant data required to make a decision on the approval of a new product.

(12) “Green Material” means waste material that includes, but is not limited to, yard trimmings, untreated wood wastes, natural fiber products, and construction and demolition wood waste. Green material does not include food material, biosolids, mixed solid waste, material processed from commingled collection, wood containing lead-based paint or wood preservative, mixed construction or mixed demolition debris.

(13) "Hazardous Air Pollutant (HAP)" means an air contaminant identified in the Federal Clean Air Act, Title 1, Section 112 (b).

(14) "Hot Melt Adhesive" means a thermoplastic adhesive that melts at temperatures above 180ºF (82°C), does not contain organic solvents, and sets rapidly upon cooling.

(15) “Industrial Wastewater Treatment” means the treatment of spent process water prior to discharging into municipal wastewater system or disposal. Industrial wastewater treatment includes, but is not limited to, dewatering, pH adjustment, precipitation, sludge processing, and gravity separation and/or filtration of the wastewater.

(16) "Large Commercial Digital Printing Operation" means a commercial digital printing operation where the print capacity of any individual printer that uses solvent based inks is 1,000 ft2/hr or higher; or an operation where the print capacity of any individual printer that uses water-based or UV inks is 10,000 ft2/hr or higher.

(17) "Major Stationary Source" means the same as defined in Rule 20.1 – New Source Review – General Provisions.

(18) "Military Tactical Support Equipment" means any equipment owned by the

U.S. Department of Defense or the National Guard and used in combat, combat support, combat service support, tactical or relief operations, or training for such operations.

(19) "Operating Day" means any calendar day during which the specified equipment is operated, or specified operations occur.

(20) "Organic Solvent" means any substance that is liquid at standard conditions and contains an organic compound or combination of organic compounds, and that is used as a diluent, thinner, dissolver, viscosity reducer, or cleaning agent, or for other similar purposes. For the purpose of this definition, a reagent is not considered an organic solvent.

(21) "Pharmaceutical Products" means any substances resulting from preparing, preserving or compounding of medicinal drugs, vitamins or other materials used to enhance personal health. Cannabis products, including any cannabis products intended for external use, are not pharmaceutical products.

(22) "Pilot Plant Facility" means a trial assembly of small-scale reaction and processing equipment that is the intermediate stage between laboratory experiment and full- scale operation in the development of a new product and/or process.

(23) "Portable Emission Unit" means the same as defined in Rule 20.1 – New Source Review – General Provisions.

(24) "Preservative Oils and Compounds" means materials which do not contain solids, and are applied to prevent corrosion and/or to provide lubrication.

(25) "Process Heater" means any combustion equipment fired with liquid and/or gaseous fuel that transfers heat from the combustion gases to water or process streams. Heaters used for swimming pools, spas, and/or therapy pools shall be considered process heaters. This definition does not include any combustion equipment where the material being heated is in direct contact with the products of combustion, such as furnaces or kilns, or any unfired waste heat recovery heater that is used to recover sensible heat from the exhaust of any combustion equipment.

(26) “Research and Development (R&D) Equipment” means equipment that is used to conduct research and develop new or improved processes and/or products, where such equipment is operated by technically trained personnel under the supervision of a research director, and may not be used to manufacture products or byproducts for sale or exchange for commercial profit, other than the first-article deliverable product.

(27) "Reclaimed Water" means wastewater that has been treated to remove solids and certain impurities to meet the standards specified in California Code of Regulations Title 22, Division 4, Chapter 3.

(28) "Stationary Internal Combustion Engine" means a spark or compression ignited, reciprocating internal combustion engine that is not a portable emission unit.

(29) "Stationary Source" means the same as defined in Rule 2 – Definitions.

(30) "Thermal Spraying Operation" means one or more of several processes in which metallic or nonmetallic surfacing materials are deposited in a molten or semi-molten condition on a substrate to form a coating. The surfacing material may originate in the form of powder, rod, or wire before it is heated, prior to spraying and deposition. Thermal

spraying operations include: detonation gun spraying, flame spraying, high-velocity oxy- fuel spraying, plasma spraying, and twin-wire electric arc spraying.

(31) "Toxic Air Contaminant" means the same as defined in Rule 2 – Definitions.

(32) "Volatile Organic Compound (VOC)" means the same as defined in Rule 2 – Definitions.

(33) "Volatile Organic Liquid" means any organic liquid either having a Reid Vapor Pressure (RVP) greater than 3 pounds per square inch if the American Society for Testing Material International (ASTM) RVP test method is applicable, or having a true vapor pressure greater than 3 pounds per square inch absolute at 100ºF if the ASTM RVP test is not applicable.

(34) "Volatile Organic Solvent" means an organic solvent with an initial boiling point of less than 400°F (204°C).

(35) “Wet Screening Operation” means a screening operation at a nonmetallic mineral processing plant which removes unwanted material or which separates marketable fines from the product by a washing process which is designed and operated at all times such that the product is saturated with water.

(d) EQUIPMENT, OPERATIONS, OR PROCESSES NOT REQUIRING A PERMIT TO OPERATE

Except as otherwise specified in Subsections (a)(2) through (a)(5), any equipment, operation, or process that is listed below in Subsections (d)(1) through (d)(20), and that meets the stated exemption provision, parameter, requirement, or limitation, is exempt from the requirements of Rule 10 – Permits Required. Such equipment, operation, or process shall not be exempt from any otherwise applicable standards in these Rules and Regulation, or applicable State or federal regulations, unless specified as exempt by that rule or regulation.

Any person claiming such an exemption shall provide documentation sufficient to substantiate the applicability of the stated exemption provision, parameter, requirement, or limitation at the request of the Air Pollution Control Officer.

(1) MOBILE SOURCES

(i) Any engine mounted on, within, or incorporated into any vehicle, train, ship, boat, or barge, that is used primarily to provide propulsion, but which may also supply heat, mechanical, hydraulic, or electrical power to that same vehicle, train, ship, boat, or barge. This exemption does not apply to equipment located onboard floating dry docks or equipment used for dredging operations.

(ii) Railway, road, and runway sweepers used respectively for cleaning rail tracks, roadways, and runways, provided the maximum manufacturer’s output rating of any auxiliary sweeper engine is 200 brake horsepower or less.

(2) COMBUSTION AND HEAT TRANSFER EQUIPMENT

(i) Any reciprocating internal combustion engine with a brake horsepower rating of less than 50.

(ii) Any engine mounted on, within, or incorporated into any motor vehicle, train, ship, boat, or barge, that is used exclusively to load or unload cargo. For the purposes of this exemption, cargo shall not include the removal or relocation of sand, rock, silt, soil, or other materials from dredging operations.

(iii) Any gas turbine engine that has:

(A) an output power rating of less than 0.3 megawatt (MW), or

(B) a maximum gross heat input rating at International Standards Organization (ISO) Standard Day Conditions of less than 1 million British thermal units (BTU) per hour.

This exemption does not apply to any gas turbine operating on waste-derived gaseous fuel.

(iv) Any boiler, process heater, or steam generator, or water heater with a manufacturer’s maximum gross heat input rating of less than:

(A) less than 1 million BTU per hour fired with any fuel, or

(B) 5 2 million BTU per hour or less fired exclusively with natural gas and/or liquefied petroleum gas.

This exemption does not apply to reciprocating internal combustion or gas turbine engines.

(v) Air heaters with a manufacturer’s maximum gross heat input rating of less than 20 million BTU per hour fired exclusively with natural gas and/or liquefied petroleum gas and installed in conjunction with combustor testing in gas turbine test cells.

(vi) Portable aircraft engine test stands constructed before November 4, 1976.

(vii) Back-pack power blowers.

(viii) Orchard or citrus grove heaters.

(ix) Any oven having an internal volume of 27 cubic feet (0.765 cubic meter) or less.

(x) Curing or baking ovens in which no volatile organic solvents or materials containing volatile organic solvents are introduced.

(xi) Any oven used exclusively for the curing, softening, or annealing of plastics.

(xii) Any oven that is an integral part of a process for which a Permit to Operate is not required pursuant to this rule.

(xiii) Any portable internal combustion engine or gas turbine engine used exclu- sively in conjunction with military tactical support equipment. Such engines shall not be subject to the limitations of Subsections (a)(3) or (a)(4) of this rule. For the purposes of this subsection, portable means carried or moved from one location within a stationary source to another location within the same stationary source, or from one stationary source to another stationary source, in the normal course of operations. Indicia of portability shall include, but are not limited to, wheels, skids, carrying handles, or a dolly, trailer, or vessel.

(xiv) Internal combustion or gas turbine engines used exclusively for purposes of educating students in the operation, maintenance, repair, and rebuilding of such engines provided that each engine or turbine is operated less than 20 hours per calendar year.

(xv) Auxiliary internal combustion reciprocating engines mounted on any authorized emergency vehicle as specified in Section 27156.3 of the California Vehicle Code.

(3) STRUCTURES AND STRUCTURAL MODIFICATIONS

(i) Equipment used exclusively in support of any structure designed for and used exclusively as a dwelling for not more than four families.

(ii) Structural modifications that cannot change the quality, nature, or quantity of air contaminant emissions.

(4) LABORATORY EQUIPMENT AND RELATED OPERATIONS

(i) Laboratory testing equipment, and quality control testing equipment, including associated wipe cleaning, used exclusively for chemical and physical analysis, or quality control.

(ii) Laboratory equipment and laboratory operations conducted at secondary schools, colleges, or universities and used exclusively for instruction or research purposes.

(iii) Vacuum-producing devices used in laboratory or R&D operations.

(iv) Hoods, stacks, or ventilators used in laboratory or R&D operations.

(v) Research and development equipment, including associated wipe cleaning.

(vi) Equipment used to manufacture the following products, provided that the total uncontrolled VOC emissions from all operations specified below do not exceed 5 tons per calendar year:

(A) biotechnology pharmaceutical products for exclusive use in federal Food and Drug Administration (FDA) approved clinical trials, or

(B) biomedical devices and diagnostic kits for exclusive use in FDA approved clinical trials and laboratory failure analysis testing, or

(C) bioagricultural products for exclusive use in field testing required to obtain FDA, Environmental Protection Agency (EPA), United States Department of Agriculture (USDA) and/or California Environmental Protection Agency (Cal-EPA) approval.

All data and/or records necessary to demonstrate the applicability of this exemption shall be maintained on-site for three years and made available to the District upon request.

(vii) Any temporary equipment installed in a pilot plant facility, provided that the total emissions increase from all such temporary equipment does not exceed 10 pounds per day of VOCs. For the purposes of this exemption, temporary equipment means equipment located at a pilot plant facility for a period not exceeding 90 days in any consecutive 12-month period excluding construction and installation periods. It shall be the responsibility of a person claiming this exemption to maintain daily records necessary for the District to determine its applicability.

(5) REPLACEMENT OF EQUIPMENT

Subject to the limitations and requirements stated in this Subsection (d)(5), identical replacement equipment and like-kind replacement equipment as listed below are exempt from the requirements of Rule 10(a). The provisions of this Subsection (d)(5) shall not apply to replacement of equipment pursuant to other requirements of these Rules and Regulations; or replacement of equipment subject to air contaminant control standards specified for replacement equipment; or replacement of equipment in whole or part, that in sum would constitute reconstruction or modification under NSPS or District Regulation X - Standards of Performance for New Stationary Sources, or would constitute a major stationary source or replacement of any stationary or portable compression ignition reciprocating internal combustion engine; or rim seal replacements for bulk gasoline floating roof tanks subject to the Best Available Control Technology (BACT) requirements of Rule 61.1 – Receiving & Storing of Volatile Organic Compounds at Bulk Plants & Bulk Terminals.

(i) Identical replacement in whole or part of any article, machine, equipment or other contrivance for which a Permit to Operate has previously been granted for such equipment. Identical means the same manufacturer, model number, and type.

In order to claim the applicability of Subsection (d)(5)(i) for portable equipment (other than a diesel-fueled portable engine), written notification of the proposed equipment replacement and information identifying the manufacturer, model number, serial number, and type of the item used as a replacement, and information detailing the expected use of the equipment being replaced, must be submitted to the District prior to such replacement.

(ii) Like-kind replacement in whole or part of any article, machine, equipment, or other contrivance where a Permit to Operate has previously been granted for such equipment, and the Air Pollution Control Officer determines that the replacement equipment meets the following requirements:

(A) is identical in function, and

(B) is similar in design, and

(C) the actual air contaminant emissions are the same in nature, and

(D) has a capacity, production rate, and actual air contaminant emissions that are equal to or less than those of the currently permitted equipment.

In order to claim the applicability of Subsection (d)(5)(ii) and prior to replacing any equipment, written notification in the form of an application for permit revision, the information required to make the determinations listed above, and the fees specified in Rule 40 – Permit and Other Fees must be submitted to the District.

(6) PLANT SUPPORT EQUIPMENT

The exemptions listed in this Subsection (d)(6) shall not apply to any combustion equipment associated with plant support equipment unless the combustion equipment is also exempt pursuant to Subsection (d)(2) of this rule.

(i) Vacuum cleaning devices used exclusively for housekeeping purposes.

(ii) Equipment used exclusively for comfort air conditioning or comfort ventilation systems, and not designed or used to remove air contaminants generated by or released from specific equipment.

(iii) Refrigeration units except those used as, or in conjunction with, air pollution control equipment.

(iv) Equipment used exclusively to compress or hold dry natural gas.

(v) Vacuum-producing devices used in connection with other equipment not requiring a Permit to Operate pursuant to this rule.

(vi) Equipment used exclusively for space heating, other than boilers.

(vii) Water cooling towers and water cooling ponds used for evaporative cooling of water, including reclaimed water, utilized solely in heat transfer processes but not used for evaporative cooling of:

(A) process water (e.g., contaminated water or industrial wastewater), or

(B) water from barometric jets or barometric condensers.

(7) METALLURGICAL PROCESSING EQUIPMENT - GENERAL

(i) Non-automated soldering equipment, such as handheld soldering irons and guns.

(ii) Solder-screen processes and associated soldering ovens that use a process similar to silk-screening in order to apply the solder paste.

(iii) Each solder leveler, hydrosqueegee, wave solder machine or drag solder machine that emits less than an average of 5 pounds of VOCs per operating day for each calendar month. The number of operating days per calendar month, monthly purchase records, and daily or monthly records of material usage shall be maintained on-site for three years and be made available to the District upon request.

(iv) Brazing and welding equipment, including arc welding equipment and laser welding.

(v) Molds used for the casting of metals.

(vi) Foundry sand mold forming equipment. This exemption does not apply if heat, sulfur dioxide, or VOCs are used.

(vii) Forming equipment used exclusively for forging, rolling, or drawing of metals.

(viii) Thermal spraying operations where materials sprayed contain no cadmium, chromium, copper, lead, manganese or nickel, and provided the maximum amount of material sprayed is less than 20 pounds per day at the stationary source.

(ix) Tumblers used for the cleaning or deburring of metal products without abrasive blasting.

(x) Shell-core and shell-mold manufacturing machines.

(xi) Extrusion equipment used exclusively for extruding metals or minerals. This exemption does not apply to coking extrusion equipment or processes that manufacture products containing greater than 1% asbestos by weight.

(xii) Shot peening operations where only steel shot is employed and no surface material such as scale, rust, or old paint is removed.

(xiii) Chemical milling of titanium or niobium (columbium) and/or their alloys using nitric and/or hydrofluoric acid at milling bath temperatures below 110°F (43°C).

(xiv) Equipment used for anodizing, plating, polishing, stripping, or etching, if the VOC content of the aqueous material does not exceed 10% by weight. This exemption does not apply to acid chemical milling, chrome plating, chromic acid anodizing, chromate conversion coating processes, or the stripping of chromium. This exemption also does not apply to copper etching or copper plating operations which use formaldehyde, ammonium hydroxide, ammonium chloride, or solutions of nitric, hydrofluoric, and/or hydrochloric acids which contain more than 17% acid concentration by weight.

(xv) Oil quenching tanks that use less than 20 gallons per year of make-up oil. Monthly purchase records and daily or monthly usage records of all materials added must be maintained on-site to claim applicability of this exemption.

(xvi) Salt bath quenching tanks where no chromium containing compounds are added to the tank.

(8) METALLURGICAL, GLASS, AND CERAMIC PROCESSING EQUIPMENT - USING FURNACES, KILNS, AND OVENS

(i) Crucible furnaces, pot furnaces, or induction furnaces, each with a maximum rated capacity of less than 450 cubic inches of any molten metal.

(ii) Crucible furnaces, pot furnaces, or induction furnaces each with a maximum rated capacity of 2,500 cubic inches or less, or 950 pounds or less, and where:

(A) no sweating or distilling is conducted, and

(B) only non-ferrous metals, except lead and yellow brass, are poured or held in a molten state.

Records of the types of all metal poured from such furnaces shall be maintained on-site for three years and be made available to the District upon request. This exemption does not apply if alloying elements of arsenic, beryllium, cadmium, chromium, lead, and/or nickel are utilized in such furnaces.

(iii) Equipment used exclusively for the sintering of glass or metals (excluding lead), where no coke or limestone is used.

(iv) Equipment used exclusively for heating metals immediately prior to forging, pressing, rolling, or drawing.

(v) Any oven used exclusively for heat treating glass or metal if the materials are not heated to a molten state, and the oven is heated exclusively by natural gas, liquefied petroleum gas, and/or electricity.

(vi) Atmosphere generators and vacuum producing devices used in connection with metal heat treating processes.

(vii) Die casting machines.

(viii) Kilns used exclusively for firing ceramic ware, heated exclusively with natural gas, liquefied petroleum gas, and/or electricity.

(9) ABRASIVE BLASTING EQUIPMENT

The exemptions listed in this Subsection (d)(9) shall not apply to any combustion equipment associated with abrasive blasting equipment unless the associated combustion equipment is also exempt pursuant to Subsection (d)(2) of this rule.

(i) Abrasive blasting equipment using a suspension of abrasive in water.

(ii) Abrasive blasting cabinets that are vented through a control device into the building where such cabinets are located.

(iii) Robotically-operated enclosed abrasive blasting equipment that emits less than 5 pounds of particulate matter per day, operates at a negative pressure, and is vented through a control device into the building where it is located.

(iv) Abrasive blasting equipment or pots with a manufacturer's sand capacity rating of less than 100 pounds (45.4 kg), or 1 cubic foot or less. This exemption does not apply to pots used in an abrasive blasting room or booth, or to abrasive blasting cabinets.

(10) MACHINING EQUIPMENT

(i) Equipment used for buffing, polishing, carving, cutting, deburring, drill- ing, machining, routing, shearing, sanding, sawing, surface grinding, or turning of: ceramic artwork, ceramic precision parts, glass, leather, metal, rubber, fiberboard, masonry, or non-fiberglass reinforced plastic. This exemption does not apply to tire buffers.

(ii) Wet-jet devices used to cut fiberglass reinforced plastic.

(iii) Portable handheld equipment used for buffing, polishing, carving, cutting, drilling, machining, routing, sanding, sawing, surface grinding, or turning of fiberglass reinforced plastic, when not used at a designated workstation, booth, or room.

(iv) Equipment used for carving, cutting, drilling, surface grinding, planing, routing, sanding, sawing, shredding, or turning of wood.

(v) Tub grinders and trommel screens used for processing green material. This exemption does not apply to any associated combustion equipment unless such equipment is also exempt pursuant to Subsection (d)(2) of this rule.

(vi) Equipment used for the pressing or storing of sawdust, wood chips, or wood shavings.

(vii) Equipment used exclusively to mill or grind coatings or molding compounds where all materials introduced are in a paste form and no volatile organic solvents are used.

(viii) Equipment used for buffing, polishing, carving, cutting, deburring, drilling, machining, routing, shearing, sanding, sawing, or surface grinding of fiberglass or calcium silicate parts that are exclusively vented through a control device that exhausts inside an enclosed building where such equipment is located.

(11) PRINTING AND REPRODUCTION EQUIPMENT AND OPERATIONS

(i) Any graphic arts operation or group of graphic arts operations located at a stationary source, that emit less than an average of 15 pounds of VOCs per operating day for each calendar month from all such operations. All records necessary to calculate average daily VOC emissions, such as emission factors or mix ratios, VOC content of each material used, number of operating days per month, and daily or monthly records of material usage, shall be maintained on-site for three years and be made available to the District upon request.

(ii) Inkjet and laser printing equipment.

(iii) Digital printing operations where the print capacity of any individual printer which uses solvent based inks is less than 1,000 ft2/hr, or an operation where the print capacity of any individual printer which uses water-based or UV inks is less than 10,000 ft2/hr.

(iv) Large commercial digital printing operations, provided that the records specified in Rule 67.16(f) for these operations are maintained.

(v) Ink cartridge filling, refilling, and/or refurbishing operations.

(12) FOOD PROCESSING AND FOOD PREPARATION EQUIPMENT

(i) Equipment used exclusively to grind, blend, or package tea, cocoa, spices, dried flowers, or roasted coffee.

(ii) Equipment located at eating establishments that is used for preparing food for human consumption at the same establishment. This exemption does not apply to boilers or coffee roasting equipment.

(iii) Coffee roasting equipment with a maximum capacity of 11 pounds (5 kg) or less.

(iv) Any bakery oven that is located at a stationary source where the combined rated heat input capacity of all bakery ovens, excluding ovens subject to Subsection (d)(12)(v) below, is less than 2 million BTU per hour.

(v) Any bakery oven used exclusively to bake non-yeast-leavened products.

(vi) Equipment used to crush and/or ferment grapes to produce wine.

(vii) Equipment used to brew beer at breweries that produce less than 100,000 barrels (3.1 million gallons) of beer per calendar year and associated equipment cleaning. This exemption does not apply to boilers or silos.

(viii) Smokehouses used for preparing food.

(13) PLASTICS, FOAM, AND RUBBER PROCESSING EQUIPMENT OR OPERATIONS

(i) Extrusion equipment used exclusively for extruding rubber products or plastics where no organic additives are present.

(ii) Equipment used for compression molding and/or injection molding of plastics.

(iii) Mixers, roll mills, and calenders for rubber or plastics, where no material in powder form is added and no volatile organic solvents are used.

(iv) Equipment used exclusively for conveying and storing plastic materials.

(v) Foam manufacturing or foam application operations that emit less than an average of 5 pounds of VOCs per operating day for each calendar month. All records necessary to calculate average daily VOC emissions, such as emission factors, VOC content of each material used, number of operating days per calendar month, and daily or monthly records of material usage, shall be maintained on-site for three years and be made available to the District upon request.

(vi) Plastic manufacturing or fabrication operations, including reinforced plastic fabrication operations using epoxy that emit less than an average of 5 pounds of VOCs per operating day for each calendar month. All records necessary to calculate average daily VOC emissions, such as emission factors, VOC content of each material used, number of operating days per calendar month, and daily or monthly records of material usage, shall be maintained on-site for three years and be made available to the District upon request.

(vii) Polyester resin operations using less than 20 gallons of polyester resin materials per month. Daily or monthly records of material usage shall be maintained on-site for three years and be made available to the District upon request.

(viii) Any polyester resin operation (portable or stationary) where the VOC emissions from the application of polyester resin materials are 150 pounds or less per consecutive 12-month period. All records necessary to calculate VOC emissions, such as VOC content of each material applied, monomer content, and daily or monthly usage records of such materials must be maintained on-site for three years to claim applicability of this exemption.

(ix) Hot wire cutting of expanded polystyrene foam.

(14) MIXING, BLENDING, AND PACKAGING EQUIPMENT

(i) Dry batch mixers with a rated working capacity of 0.5 cubic yards or less, where material is added in a dry form prior to the introduction of a subsequent liquid fraction or where no liquid fraction is added.

(ii) Wet batch mixers with a rated working capacity of 1 cubic yard or less, where no volatile organic solvents are used.

(iii) Equipment used exclusively for the manufacture of water emulsions of asphalt, greases, oils, or waxes.

(iv) Equipment used exclusively for the packaging of lubricants or greases.

(v) Equipment used at ambient temperatures exclusively for mixing and blending materials to make water-based adhesives.

(vi) Any coating and/or ink manufacturing operations located at a stationary source that emit less than an average of 15 pounds of VOCs per operating day for each calendar month from all such operations. All records necessary to calculate average daily VOC emissions, such as emission factors, VOC content of each material used, number of operating days per calendar month, and daily or monthly records of material usage, shall be maintained on-site for three years and be made available to the District upon request.

(15) COATING AND ADHESIVE APPLICATION EQUIPMENT AND OPERATIONS

(i) Powder coating operations where less than 0.5 gallons per day of any surface preparation or cleaning material containing VOCs are used. Monthly purchase and daily or monthly usage records of surface preparation and cleaning materials shall be maintained on-site for three years and made available to the District upon request. This exemption does not apply to metallizing gun operations.

(ii) Application equipment and processes used exclusively to apply coatings and/or adhesive materials to stationary structures and/or their appurtenances at the site of installation, to portable buildings including mobile homes at the site of installation, to pavement, or to curbs. This exemption does not apply to application equipment and processes where coatings or adhesive materials are applied in off-site shops or to non-stationary structures such as airplanes, ships, boats, railcars, and automobiles.

(iii) Any coating or adhesive materials application operation (portable or stationary) where 20 gallons or less of liquid coatings or adhesive materials are applied per consecutive 12-month period. Monthly purchase records and daily or monthly usage records of all coatings or adhesive materials applied must be maintained on-site for three years to claim applicability of this exemption. The volume of materials applied using non-refillable handheld aerosol spray containers shall not be included when determining the applicability of this exemption.

(iv) Any coating or adhesive materials application operation (portable or stationary) where the VOC emissions from the application of liquid coatings or adhesive materials are 150 pounds or less per consecutive 12-month period. All records necessary to calculate VOC emissions, such as VOC content of each coating or adhesive material applied and daily or monthly usage records of such materials must be maintained on-site for three years to claim applicability of this exemption. The volume or VOC content of materials applied using non-refillable handheld aerosol spray containers shall not be included when determining the applicability of this exemption.

(v) Chromate conversion coating processes where coatings are applied exclusively by brush, roller, or marking pen.

(vi) Coating operations that exclusively use non-refillable handheld aerosol spray containers.

(vii) The application of coatings outside of a defined application station that are necessary to cover minor imperfections or repair minor mechanical damage incurred prior to intended use.

(viii) Coating operations located at primary or secondary schools and used exclusively for instruction.

(ix) Coating operations located at schools (i.e., primary, secondary, or schools of higher education) and used exclusively for student theatrical productions or art instruction.

(x) Liquid surface coating operations that exclusively use hand-held brushes to apply wet fastener primer coatings from containers that are 8 ounces or less in size.

(xi) Liquid surface coating operations that exclusively use air brushes with a coating capacity of 2 ounces or less.

(xii) Hot melt adhesive application equipment.

(xiii) The application of coatings outside of a designated workstation that is necessary for the maintenance of stationary equipment.

(16) SOLVENT APPLICATION EQUIPMENT AND OPERATIONS

(i) Cold solvent cleaning or stripping operations and/or vapor degreasing operations that exclusively utilize materials with a VOC content of 25 grams per liter (g/l) (0.21 lbs/gal) of material or less, as used.

(ii) Cold solvent cleaning dip tanks, vapor degreasers, and paint stripping tanks:

(A) with a liquid surface area of 1 square foot or less, or

(B) with a maximum capacity of 1 gallon or less.

(iii) Cold solvent cleaning remote reservoirs with a sink cross-sectional area of 1 square foot (0.09 square meters) or less.

(iv) Batch-type waste solvent recovery stills for on-site recovery of waste solvent with a maximum solvent usage of 350 gallons per day, provided the still is equipped with a device that shuts off the heating system if the solvent vapor condenser is not operating properly.

(v) Metal inspection tanks that:

(A) have a liquid surface area of less than 5 square feet, or

(B) do not use volatile organic solvents, or

(C) are not equipped with spray type flow devices or a means of solvent agitation.

(vi) Metal inspection spraying operations where no materials applied contain volatile organic compounds.

(vii) Cold solvent degreasers used exclusively for educational purposes.

(viii) Golf grip application stations that exclusively use liquid materials with an initial boiling point of 450°F (232°C), or greater.

(ix) Surface preparation or solvent cleaning, including wipe cleaning:

(A) for quality control or quality assurance purposes, or

(B) using non-refillable handheld aerosol spray containers, or

(C) for routine janitorial maintenance, including graffiti removal or

(D) performed in conjunction with welding of 5XXX series aluminum structures for Navy ships and in accordance with quality assurance standards for such structures, or

(E) not associated with any permitted operation, provided:

(1) the cleaning materials have a VOC content of 25 grams per liter (0.21 lbs/gal), or less, as used, or

(2) the uncontrolled VOC emissions from all such cleaning operations located at the stationary source do not exceed 3,650 pounds per consecutive 12-months, or the total purchase or usage of solvents for such cleaning operations does not exceed 550 gallons per consecutive 12-months. The volume of materials applied from operations specified in Subsections (d)(16)(ix)(A) through (E)(1) above shall not be included when determining the applicability of this exemption. All data and/or records necessary to demonstrate that this exemption is applicable shall be maintained on-site for three years and made available to the District upon request.

Subsection (d)(16)(ix)(E) does not apply to cold solvent cleaning or stripping operations and/or vapor degreasing operations as defined in Rules 67.6.1 – Cold Solvent Cleaning and Stripping Operations and Rule 67.6.2 – Vapor Degreasing Operations.

(x) Asbestos mastic removal operations using organic solvents provided the total VOC vapor pressure of the solvent is 0.2 mm Hg or less, at 20°C (68°F).

(17) STORAGE AND TRANSFER EQUIPMENT

(i) Stationary equipment used exclusively to store and/or transfer liquid organic compounds that are not volatile organic liquids.

(ii) Stationary storage tanks for volatile organic liquids with a capacity of less than 250 gallons and associated equipment used exclusively to transfer materials into such tanks.

(iii) Equipment used exclusively to store and/or transfer organic solvents that are not used as fuels.

(iv) Equipment used exclusively to store and/or transfer natural gas, butane, or propane when not mixed with other volatile organic liquids, other than odorants.

(v) Equipment used exclusively to store and/or transfer fuels that are used exclusively as a source of fuel for wind machines used for agricultural purposes.

(vi) Mobile transport, delivery, or cargo tanks on vehicles used for the delivery of volatile organic liquids. This exemption does not apply to asphalt tankers used to transport and transfer hot asphalt used for roofing applications. This exemption also does not apply to the transfer of volatile organic liquids into vehicle fuel tanks.

(vii) Equipment used to transfer fuel to and from amphibious ships for main- tenance purposes, provided total annual transfers do not exceed 60,000 gallons per year at a stationary source.

(viii) Equipment used exclusively to store and/or transfer liquid soaps, liquid detergents, vegetable oils, fatty acids, fatty esters, fatty alcohols, or waxes, and wax emulsions.

(ix) Pressurized tanks used to store inorganic or halogenated organic gases and associated equipment used exclusively to transfer materials into such tanks.

(18) DRYCLEANING, LAUNDRY EQUIPMENT, AND FABRIC RELATED OPERATIONS

The exemptions listed in this Subsection (d)(18) shall not apply to any operation that uses perchloroethylene (perc) as a dry cleaning solvent.

(i) Non-immersion dry cleaning equipment that uses water or exempt compounds as the cleaning solvent, provided that the VOC content of detergents and additives used does not exceed 50 grams per liter.

(ii) Lint traps used exclusively in conjunction with dry cleaning tumblers.

(iii) Wastewater processing units associated with dry cleaning operations using halogenated compounds, provided the concentration of halogenated compounds in the water being evaporated in the unit does not exceed 400 parts per million (by weight).

(iv) Laundry dryers, extractors, or tumblers used for fabrics cleaned only with solutions of bleach or detergents, provided that the VOC content of detergents and additives used does not exceed 50 grams per liter. This exemption does not apply to equipment used for previously VOC-laden materials such as rags, cloths, etc.

(v) Industrial wet cleaning equipment that uses water or exempt compounds as the cleaning solvent, provided that the VOC content of detergents and additives used does not exceed 50 grams per liter. This exemption does not apply to equipment cleaning VOC-laden materials such as rags, cloths, etc.

(vi) Equipment, including dryers, used exclusively for printing, dyeing, stripping, or bleaching of textiles, provided that the VOC content of detergents and additives used does not exceed 50 grams per liter.

(vii) Industrial laundering equipment that uses liquid carbon dioxide as the cleaning solvent, provided that the VOC content of detergents and additives used does not exceed 50 grams per liter.

(19) MISCELLANEOUS EQUIPMENT AND OPERATIONS

(i) Air pollution control equipment used exclusively to reduce

(A) emissions from any article, machine, equipment, process, or contrivance not required to have a Permit to Operate; or

(B) emissions generated during the draining and degassing of stationary floating roof gasoline storage tanks provided that a written authorization from the Air Pollution Control Officer to conduct the draining and degassing is obtained pursuant to Rule 61.1 – Receiving & Storing of Volatile Organic Compounds at Bulk Plants & Bulk Terminals.

(ii) Repairs or maintenance not involving structural changes to any equipment for which a Permit to Operate has been granted.

(iii) Roofing kettles (used to heat asphalt), each with a capacity of 85 gallons or less.

(iv) Paper shredders and disintegrators, each with a maximum throughput capacity not to exceed 600 pounds per hour, either as rated by the manufacturer or as stated in writing by the manufacturer for the current configuration, and the associated conveying systems and baling equipment.

(v) Alkaline chemical milling equipment:

(A) used exclusively for the cleaning of internal combustion engine parts, or

(B) for which construction or installation commenced prior to March 27, 1990.

(vi) Portable conveyors (belt or screw type) where there is no screening.

(vii) Fire extinguishing equipment using halons.

(viii) Equipment used exclusively for the purposes of:

(A) flash-over fire fighting training, or

(B) hand-held fire extinguisher training operations.

(ix) Equipment used exclusively for bonding lining to brake shoes, where no volatile organic solvents are used.

(x) Equipment used exclusively to liquefy or separate oxygen, nitrogen, or the inert gases from air.

(xi) Any operation producing or blending materials for use in cosmetic, pharmaceutical or biotechnology products and/or manufacturing cosmetic, pharmaceutical or biotechnology products by chemical processes, that emit less than an average of 15 pounds of uncontrolled VOC per operating day for each calendar month from all phases of all such operations located at a single stationary source. All records necessary to calculate average daily VOC emissions, such as emission factors, VOC content of each material used, number of operating days per calendar month, and daily or monthly records of material usage, shall be maintained on-site for three years and be made available to the District upon request.

(xii) Equipment used for hydraulic or hydrostatic testing.

(xiii) Ethylene oxide sterilizing processes that use less than 5 pounds of ethylene oxide per calendar year. Purchase records and records of monthly ethylene oxide usage shall be maintained on-site for three years and be made available to the District upon request.

(xiv) Sterilizers or autoclaves using only steam or hydrogen peroxide.

(xv) Nail salon operations.

(xvi) Equipment used exclusively for the melting or applying wax where no volatile organic solvents are used.

(xvii) Aerosol can puncturing or crushing operations that use:

(A) a closed loop recovery system that emits no air contaminants, or

(B) a recovery system that vents all emissions through a properly operated and maintained carbon canister, provided not more than 500 cans are processed through the equipment per day. Throughput records of the number of cans processed shall be maintained on-site for three years and be made available to the District upon request.

(xviii) Any article, machine, equipment, or contrivance that emits airborne radioactive materials in concentrations above the natural radioactive background concentration in air in the form of dusts, fumes, smoke, mists, liquids, vapors, or gases. This exemption does not apply to incinerators or boilers.

Atomic energy development and radiation protection are controlled by the State of California to the extent it has jurisdiction thereof, in accordance with the advice and recommendations made to the Governor by the Advisory Council on atomic energy development and radiation protection. Such development and protection are fully regulated by the Nuclear Regulatory Commission to the extent that such authority has not been delegated to the states.

(xix) Any other piece of equipment or operation not covered by other subsections that has an uncontrolled emission rate of each criteria pollutant of 2 pounds or less per day, or of 75 pounds or less per year. All data and/or records necessary to demonstrate that this exemption is applicable shall be maintained on-site for three years and made available to the District upon request.

(xx) Equipment approved for use by the EPA for recovering and/or recycling chlorofluorocarbons (CFCs) or alternative fluorocarbons.

(xxi) Municipal wastewater treatment facilities and municipal water reclamation facilities each with a design throughput capacity of less than one million gallons of wastewater per day. Municipal wastewater pump stations with an annual average actual throughput of less than one million gallons of wastewater per day. Records of daily throughput shall be maintained on-site for three years and be made available to the District upon request.

(xxii) Industrial wastewater treatment that:

(A) does not use processes designed to remove or destroy VOCs, or

(B) if such processes are used, the uncontrolled VOC emissions do not exceed an average of 5 pounds per day from all such treatment at the stationary source.

(xxiii) Sludge processing operations at municipal wastewater treatment facilities each with a design throughput capacity of less than one million gallons of wastewater per day.

(xxiv) Smoke generating equipment in training sessions conducted by government agencies for the purpose of certifying persons to evaluate visible emissions for compliance with State law or District Rules and Regulations.

(xxv) Smoke generating equipment used for training military personnel and smoke generating equipment used for the testing of military equipment by the Department of Defense.

(xxvi) Agricultural sources at a stationary source that, in aggregate, produce actual emissions less than one-half of any applicable emission threshold for a major source in the District. For the purposes of determining permitting applicability, fugitive emissions, except fugitive dust emissions, are included in determining aggregate emissions. This exemption shall not apply to an agricultural source required to obtain a Title V permit pursuant to Regulation XIV (Title V Operating Permits).

(xxvii) Fuel cells used in power and/or heat generating equipment that are certified under California Air Resources Board’s Distributed Generation Program or meet the emission standards of that program.