ALJDEC decisions subject to certification as final

08A-A025-DEQ-rhg · Department of Environmental Quality · 2010-10-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 14, 15, and 16, 2010; record held open until October 11, 2010 APPEARANCES: Attorneys Richard W. Tobin II and Albert H. Acken for California Portland Cement; Assistant Attorney General Joseph P. Mikitish for the Department of Environmental Quality ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT PROCEDURAL HISTORY On February 4, 2009, the Arizona Department of Environmental Quality (“ADEQ” or the “Department”) issued a Notice of Hearing setting Docket No. 09A-A010-DEQ for hearing on March 30, 2009. The Notice provided that the hearing was “to consider the issues concerning ADEQ’s permit revision dated January 27, 2009, regarding the final approved permit.” This permit is known as Significant Permit Revision (“SPR”) # 38592. SPR # 38592 is held by Appellant California Portland Cement, d.b.a. Arizona Portland Cement (referred to as “APCC”) and was issued in response to APCC’s application for a permit to construct and operate a new kiln. By agreement of the parties, the hearing was continued and the matter was reset for August 17 and 18, 2009. See Order dated May 15, 2009. On July 27, 2009, APCC filed a “Motion to Stay Pending Director’s Decision in Related Matter.” The related matter was Docket No. 08A-A025-DEQ, for which an Administrative Law Decision was issued on March 13, 2009. ADEQ did not object to APCC’s Motion to Stay, and the Motion was granted. On October 9, 2009, in Docket No. 08A-A025-DEQ, ADEQ’s Director issued an “Order In Re California Portland Cement’s Motion for Review.” ADEQ’s Director remanded Docket No. 08A-A025-DEQ “for the limited purpose of establishing a record of the parties’ respective positions on the cost of the Property Boundary Monitoring Plan [“PBMP”] contemplated by Significant Permit Revision Number 31767.” Docket No. 08A-A025-DEQ was re-designated as Docket No. 08A-A025-DEQ-rhg for purposes of the remand. The two matters were then consolidated and were heard on June 14, 15, and 16, 2010. BACKGROUND FACTS APCC operates a cement manufacturing plant in unincorporated Pima County. The plant was built in 1948 and opened in 1949. The plant borders on the community of Rillito. ADEQ has received complaints from residents of Rillito alleging that the plant is responsible for dust emissions that affect the community. The plant is in an area that is subject to a State Implementation Plan (“SIP”) based on requirements of the Clean Air Act. The SIP regulates emissions of particulate matter (“PM”). PM is regulated by the United States. PM is a significant issue because APCC’s plant is in a non-attainment area for PM, meaning that the area does not meet the EPA health-based guideline. APCC is classified as a major source for PM under the Clean Air Act. Fugitive dust is dust that cannot be captured in a control system. APCC has storage piles that are a source of fugitive dust (e.g., coal and other raw material). Coal storage is important because Rillito’s residents identified it as a concern: a number of people said black dust got in their homes and residents provided ADEQ with samples of grey dust that gets on their cars. ADEQ’s witness, Eric Massey, acknowledged that there were no instances in which APCC has committed a permit violation related to coal or coal dust. APCC’s plant operates under Air Quality Control Permit # M190310P-00 issued by ADEQ in October 2003 (the “2003 Title V permit”). The 2003 Title V permit required APCC to apply for an SPR that included using cameras to photographically monitor its property boundary for visible emissions (i.e., dust or PM). In December 2003, APCC applied for the required SPR. In March 2004, ADEQ determined that APCC’s proposed SPR was not adequate. The parties engaged in negotiations that resulted in APCC conducting a demonstration project to determine the effectiveness of photographic monitoring of its property boundary. On March 3, 2006, APCC reported the results to ADEQ. On August 24, 2007, ADEQ published a Draft SPR # 31767 that included the PBMP. APCC filed timely public comment objecting to the issuance of SPR # 31767. On February 15, 2008, ADEQ issued SPR # 31767, which includes the PBMP. SPR # 38592 includes the same PBMP. The issue for hearing in Docket No. 09A-A010-DEQ is APCC’s appeal of the terms of the PBMP found in SPR # 38592.[1] The PBMP requires: a. That within 90 days of issuance of SPR #31767, APCC must install two cameras at specified locations and begin monitoring for visible emissions at the property boundary with Rillito; b. The cameras must be Panasonic WV-NP1004 or cameras with better resolution; c. The cameras must be located high enough to be above any obstacles; d. APCC must implement a system to keep the lenses clean; e. Each camera must record a picture every six minutes during daylight hours, and must include the date and time on each image; f. APCC must review the data daily on business days and on weekends and holidays if coal unloading occurs; g. If the review of data shows visible emissions that are a result of APCC’s operations or activities crossing the property line, then APCC must report to ADEQ following the excess emissions reporting procedures in Section XII, Attachment A of SPR # 31767; h. APCC must take appropriate corrective action if visible emissions related to its activities cross the property line; i. APCC must submit the camera data to ADEQ on a monthly basis using a compact disc or other approved format; and j. During camera downtime, APCC must monitor the site using EPA Method 22. See Exhibit 51. THE HEARING APCC presented the testimony of Mr. David Bittel, its Plant Manager, and Mr. Dennis Peloquin, President of Amer-x-Security Inc., a consultant who worked on APCC’s demonstration project. ADEQ presented the testimony of Mr. Eric Massey, who, at the time of hearing, was its Acting Deputy Director of Air Quality, and Mr. Shawn Kendall, the Manager of its Hazardous Air Emergency Response Program. The witnesses were all credible, but, based on their levels of expertise and their specific knowledge of the issues addressed, not all testimony can be accorded the same weight. Mr. Bittel’s Testimony Mr. Bittel started working for APCC in 1972, and he has been the plant manager for 16 years. Exhibit U is a listing of the activities currently undertaken by APCC to limit dust emissions at the plant. APCC is not challenging the existing permit requirements, only the PBMP. In the last seven years, there have been only three complaints filed in which it was alleged that APCC had fugitive dust emissions. All three cases were closed. See Exhibits I and R. It took APCC between four hours and two days to fully investigate each of the three complaints, and each investigation involved about six people. APCC did not request the PBMP, and that plan was not in place in the 2003 Title V permit. The first time that APCC learned that ADEQ intended to require a property boundary monitoring plan was at a meeting at ADEQ on September 17, 2003. At that time, the specifics of the plan were not fully developed. On October 23, 2003, APCC received its permit that calls for APCC to work with ADEQ to develop a photographic property boundary monitoring plan and to apply for an SPR. See Exhibit 29. In response to the permit requirement, on December 19, 2003, APCC applied for an SPR that included property boundary monitoring. The boundary monitoring plan in APCC’s application was based on the information APCC received from ADEQ at the meeting of September 17, 2003. APCC’s proposed plan required only one camera, it did not require APCC to report excess emissions to ADEQ, and it required that the images were to be stored for only 90 days. In early March 2004, ADEQ found that APCC’s proposed SPR was unacceptable. In July 2004, APCC first learned that it would be required to review the photographs and report any excess emissions. Mr. Bittel’s opinion is that these requirements were not presented at the meeting of September 17, 2003.

APCC then proposed that it conduct the demonstration project, which was conducted from August 4 through September 2, 2005. The demonstration project used two cameras, one facing east and one facing west, that each took a picture every six minutes. During the demonstration project, APCC found that: it was not possible to identify the source of dust in the photographs; there was a need for a back- up power source; in the early morning and late evening it was difficult to distinguish dust from the sun; and that keeping the lenses clean was an issue. In August 2007, SPR # 31767 was issued. SPR # 31767 included changes in the camera locations such that both cameras must now face east and one is located at the plant’s wastewater treatment plant (“WWTP”) fence. Mr. Bittel acknowledged that in 2003, some residents of Rillito were asking for a camera monitoring plan. But now, seven years later, that is no longer the case. Instead, people want the dust problems solved, not a busywork solution. Exhibit H, which was prepared under Mr. Bittel’s direction, lists the costs that APCC has incurred to date and provides an estimate of the additional costs required to implement the PBMP. Exhibit H also provides the costs that APCC currently incurs to conduct daily visible emissions monitoring at the plant. Mr. Bittel acknowledged that the costs in Exhibit H are estimates, and he does not believe they were obtained in a bid process. APCC has spent about $46,300 for infrastructure and equipment, and it estimates that it will need to spend an additional $47,000 to fully complete the PBMP. The projected costs include costs for new cameras because the two cameras that were used for the demonstration project do not meet SPR # 31767’s specifications. APCC estimates that the operating costs will be $82,800 per year, consisting of $73,800 for one full-time employee, and $9,000 for electricity and vendor supplied maintenance. The total estimated cost for ten years is $921,300 ($82,800 per year plus fixed costs of $93,300.) The cost for a full-time employee was calculated at $20 per hour, with the remainder being the cost of benefits. This employee will need to be educated in the use of the cameras and computers. Because the employee will be dealing with environmental compliance issues, he or she will need to provide high-quality work. Mr. Bittel believes that a full-time employee is required because the photographs will be used for compliance purposes and there are a number of tasks that must be completed each day: a. Check the hardware and verify that it is still operational; b. Lower the cameras from the poles, which are 50 feet high, and clean the lenses; c. View the photographs; d. Conduct due diligence by following-up on any dust that is seen in the photographs, including checking meteorological data; and e. Transfer the photographs to discs to send to ADEQ. The due diligence required when dust is seen in a photograph is a concern because the requirements of that due diligence have not been well defined. If there is dust observed in any of the photographs, APCC’s environmental affairs manager and Mr. Bittel will also be involved in the follow-up work. Currently, APCC conducts visible emissions monitoring that is done by an outside consultant at a cost of $67,000 per year. That consultant conducts daily monitoring of the dust collectors and makes an observation of the property boundary. See Exhibit H. Mr. Bittel acknowledged that APCC can afford the estimated cost of the PBMP, and he testified that the cost will not “break the bank.” According to Mr. Bittel, APCC’s main concern is that this money will be wasted on what he sees as busywork reviewing pictures. As APCC understood the need, the goal was to control dust at the source, which is not what the PBMP does. APCC’s other concerns include: a. The PBMP is not the same plan that was discussed on September 17, 2003; b. Based on the demonstration project and Mr. Peloquin’s work, the photographs are not of sufficient quality to distinguish the source of any dust; and c. The photographs may not be conclusive because people may have different interpretations of a given photograph. Mr. Bittel’s opinion is that a better solution than the PBMP would be to build a big fence along the property line, which is a solution that APCC had proposed. APCC is still operating the cameras that were used for the demonstration project. One employee, Oren Hayes, spends about two to four hours a day on the equipment and storing photographs, but he does not review those photographs. Mr. Bittel thinks Mr. Kendall’s estimate of the time required to review the photographs will not be sufficient because when Mr. Kendall reviews photographs, he is not doing it to show compliance with a permit. Mr. Peloquin’s Testimony Mr. Peloquin’s role was to help APCC develop a video monitoring plan. APCC was a unique situation for Mr. Peloquin because the photographs were taken outside, not in a controlled environment with artificial light, and because there was no triggering event to cause a photograph to be taken. Mr. Peloquin’s opinion is that: a. The test images from the demonstration project were inconclusive because it could not be discerned whether the images show dust, a reflection, or cloud cover; b. There are field-of-vision limitations such that the photographs cannot provide the source of any dust that is seen; c. The PBMP does not show whether or not visible emissions have crossed the property line. Mr. Peloquin acknowledged that this was the first project that he has been involved with that was related to visible dust emissions. Mr. Peloquin did not discuss the project with the people from ADEQ, but he did review some of the references ADEQ provided that led him to conclude that it is difficult to get conclusive information through photographic images. Mr. Massey’s Testimony Mr. Massey started working on issues related to APCC in 2001 or 2002, and he was involved in the decision to issue APCC’s permit. The process for obtaining a permit is: an application is filed and a permit is written; public comment is taken and ADEQ prepares a responsiveness summary of the comments; ADEQ then issues a draft permit; and the draft permit is then reviewed by the EPA in what is known as a Title V review. During a Title V review, EPA will look for emissions-limits for which there is not sufficient monitoring, recordkeeping and reporting requirements. Rillito is an Environmental Justice Community, meaning that Rillito filed a civil rights lawsuit alleging that it was being subject to pollution in a discriminatory manner. As such, EPA takes a heightened interest in APCC’s activities and its permit application. In early 2003, EPA objected to a permit that had been proposed for APCC’s plant, based in part on EPA’s concerns about dust. At that time, EPA found that the monitoring, recordkeeping, and reporting requirements were not sufficient to create a “reasonable assurance of compliance.” Specifically, EPA found that the proposed permit did not meet the SIP’s requirement that there be no visible-emissions at the fence line. See SIP Rule 343. Pima County Department of Environmental Quality (“PCDEQ”) promulgated SIP Rule 343. SIP Rule 343 is not the rule currently used by PCDEQ, which now applies rule # 17.16.050. ADEQ and Pima County do not interpret SIP Rule 343 the same way. ADEQ, as does the EPA, interprets SIP Rule 343 to require that there be no visible emissions crossing the property line. According to APCC, in essence, Pima County’s position is that visible emissions may cross the property boundary provided that the permit holder has the appropriate controls in place. After ADEQ received EPA’s objection to APCC’s proposed permit, ADEQ had 90 days to resolve the matter or EPA would have taken control of the permitting process. In APCC’s case, at the end of the 90 days, ADEQ decided that there was a need for more frequent monitoring. Consequently, the 2003 Title V permit that was issued in October 2003, included the requirement that APCC was to apply for an SPR that used cameras to monitor the property boundary. The 2003 Title V permit did not specify the terms of that plan. See Exhibit 29. Mr. Massey was a member of ADEQ’s team that worked on APCC’s 2003 SPR application. Between October and December 2003, there were meetings between APCC and ADEQ, but Mr. Massey could not recall if the parties had discussions related to the boundary monitoring plan. ADEQ did not approve the monitoring plan that APCC proposed in its 2003 SPR application, but it did not ignore that plan. Mr. Massey’s recollection was that APCC proposed the camera type that was approved for use. ADEQ chose the WWTP location for one camera. Mr. Massey considered that to be a compromise because there were many other locations proposed. The camera locations were chosen to help determine if visible emissions are originating on APCC’s site. ADEQ believes that two cameras can achieve this purpose better than one camera. Cost was a factor that ADEQ considered in its analysis of the PBMP, but Mr. Massey did not recall to what extent. Mr. Massey did recall that ADEQ tried to structure the PBMP to use infrastructure and equipment that APCC used in the demonstration project. All Title V permits include monitoring and recordkeeping requirements, and require the permit holder to file with ADEQ certifications showing that it is in compliance with the permit. In APCC’s case, it must file such a certification every six months. ADEQ’s position is that the PBMP requires APCC to review the photographs and investigate further if the photographs show evidence of dust. The follow-up investigation would include looking at the dust-suppression logs, and looking for possible equipment malfunctions or other potential sources for the dust. APCC must file an excess emissions report only if any visible emissions crossing the property boundary line are as of a result of its activities or originate on its site. In cases where APCC’s investigation does not reveal the source of dust seen in photographs, APCC is not required to provide any report to ADEQ. In such cases, however, APCC needs to have a record of its work available if it is audited. ADEQ’s position, that no report is required if APCC cannot identify the source of the visible emissions, is not consistent with ADEQ’s Responsiveness Summary. The Responsiveness Summary shows that APCC must identify the source of any visible emissions in the photographs or determine that there was not actually any dust (because, for example, the lens was dirty.) Responsiveness summaries are considered guidance only, but Mr. Massey agreed that permit holders who do not follow that guidance are doing so at their own peril. In the past, ADEQ has regulated other major sources for particulates in Pima County, but Mr. Massey was not sure if there were any sources currently being regulated. ADEQ has issued other permits based on SIP Rule 343 that require the permit holder to file excess emissions reports, for example, Freeport-McMoran’s permit. Pima County now oversees Freeport-McMoran’s permit. ADEQ acknowledges that not every permit based on SIP Rule 343 requires excess emissions to be reported, but ADEQ’s position is that these other permits are in error, and ADEQ is working to correct the permits that do not include this reporting requirement. None of these other permits require photographic monitoring, and to Mr. Massey’s knowledge, the PBMP is the only one of its kind in the United States. Mr. Massey believes that Pima County also requires excess emissions reports because that is a Title V requirement. The PBMP was not intended to be a “be-all solution,” but was intended to be a quality assurance check on existing dust control measures. It is a proactive approach to prevent and limit the visible emissions crossing the property line and to help ensure that APCC had the proper controls in place at the time any visible emission cross the boundary line. Considering ADEQ’s experience with its own camera monitoring plans, Mr. Massey’s opinion is that the PBMP can be effective in helping to stop visible emissions from crossing the property boundary, as envisioned in the 2003 Title V permit. ADEQ does not use its own photographs for compliance purposes. Those photographs are used to look for exceptional events on a regional scale, not to show compliance at a facility. When ADEQ reviews photographs from its monitoring projects, the photographs are loaded into a computer slideshow program that allows the photographs to be viewed while in motion. The observer then looks for movement between photographs rather than at each individual photograph. The PBMP will result in about 87,600 photographs per year. Mr. Massey thinks it would take about 30 to 60 minutes a day for APCC to review the photographs with additional time needed to perform any required follow-up. It is difficult to estimate how long the follow-up would take, but Mr. Massey’s opinion is that a full-time employee is not required to comply with the PBMP. APCC’s estimated annual cost for the PBMP is about the same amount as APCC is now spending on visible-emissions monitoring, but the PBMP provides a greater number of observations. The current visible-emissions monitoring at the property boundary is just one observation per day, whereas the PBMP provides 240 photographic observations per day. The quality of the photographs could be affected by the time of day, the lighting, the camera position, the location of the sun, the cloud cover, or rain. Mr. Massey’s opinion is that the source of any dust will be discernable from the photographs, but he acknowledged that this would not be true if the source is from an area not covered in the photographs. Mr. Massey’s opinion is that the photographs are sufficient to identify dust because the intention is not to do so by looking at a single photograph, but rather to look at the photographs in series and observe any changes. APCC is required to operate the cameras when the wind is greater than 25 miles per hour (“mph”). ADEQ will consider the photographs to be credible evidence that visible emissions have crossed the property boundary. ADEQ has no written information on the cost of the PBMP or whether or not the PBMP is cost effective. Mr. Massey did not know what the plant’s total expenditures are, but he once heard it was $1 million per month just for electricity. Based on its own photographic monitoring programs, ADEQ believes that the PBMP is feasible. According to Mr. Massey, if ADEQ did not believe the PBMP was feasible, it would not be in the permit. Mr. Kendall’s Testimony Mr. Kendall started working at ADEQ on June 21, 2004, and he is its technical and policy lead for exceptional events. Prior to beginning work at ADEQ, Mr. Kendall did consulting, including working on SIPs for national parks, and he began working on regional haze issues stating in 1992. Mr. Kendall testified as to his experience using camera-monitoring for air quality purposes. Mr. Kendall worked on a project to monitor smoke from a 2005 wildfire. For that project, he used cameras with solar power and transmitted the photographs to Phoenix. The cost was about $20,000, and Mr. Kendall considered it to be a very successful program. Mr. Kendall is involved in a project to determine why PM is up in the area of West 43rd Avenue. The cost was about $4,000 to $5,000 for cameras, solar power, a battery, an engineer’s time for a week, and prototyping. Mr. Kendall participated in a camera study of the “brown cloud.” The cameras were in Mesa and took one picture per 15 minutes, but it will be increased to one picture every 5 minutes. These cameras have much better resolution and cost 2 to 3 times more than the cameras used at ADEQ’s other projects. Coyote Lakes Project at 117th Avenue and Bell For this project, ADEQ wanted to determine the source of PM. There were several possibilities, including sand and gravel operations, construction work, traffic on dirt roads, and dust from the Gila River. ADEQ bought six cameras for $12,000, and it also paid for cable and a weather station. Mission Hills Materials Company let ADEQ set up cameras on its property, and ADEQ transmitted the photographs over the internet to a computer server. ADEQ set up three cameras, each of which took one photograph per minute. The project ran for about two years and one month, for a total of about 2.5 million images. Mr. Kendall reviewed the photographs and then archived them. When there was a call about compliance issues, he would pull up the images from the archives and review them. It took Mr. Kendall about one to two hours per day to download, view, and archive the photographs when there were no events that required follow-up investigations. Follow-up investigations took about an hour or two to check the meteorological data. Mr. Kendall created a DVD with photographs from the Coyote Lakes site that he played during the hearing. See Exhibit 56. According to Mr. Kendall, looking at only one photograph is not helpful, and instead you must look at a series of photographs. Mr. Kendall’s approach is to advance through the images looking not at each photograph, but rather looking for discontinuities or things that jump out between photographs. Mr. Kendall looks for changes as the photographic slideshow plays on the computer. Instances of local dust emissions can be seen in the Coyote Lakes photographs as shown on the DVD. The DVD also showed a large regional dust storm. At Coyote Lakes, the two years of photographs were used to show that Mission Hills Materials was not the source of dust when citizens complained to ADEQ. Mr. Kendall expects the same would occur at APCC’s plant: after a citizen’s complaint, APCC’s photographs could be used to show that the dust was not from APCC. Mr. Kendall’s opinion is that the Coyote Lakes project was successful. APCC’s Photographs Mr. Kendall reviewed copies of photographs provided by APCC. Mr. Kendall agreed that these were fuzzy and that it was hard to make out the features.

Mr. Kendall did not know the resolution level of these photographs, but he has obtained better images than these. Mr. Kendall’s opinion is that APCC’s photographs were fuzzy because they contained “JPEG” artifacts related to how the photographs were stored. How the files are stored can affect quality because the images can be compressed for storage. When storing ADEQ’s photographs, Mr. Kendall stays at a high resolution which takes more space. Mr. Kendall stored the 2.5 million photographs from Coyote Lakes on a Network Attached Storage Device. A 4 TB storage unit that cost about $600 to $700 was enough space to store the 2.5 million photographs. Mr. Kendall’s opinion is that the PBMP can be successful in that the photographs can be used to determine when further investigation is required. Mr. Kendall’s opinion is that the PBMP is cost effective. Mr. Kendall acknowledged that the ADEQ projects did not have the cameras mounted on 50 foot poles as is the case at APCC’s plant. Mr. Kendall acknowledged that the Coyote Lakes project was not for compliance monitoring of a permit condition. CONCLUSIONS OF LAW The burden of proof at an administrative hearing falls to the party asserting a claim, right, entitlement, or affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. See A.A.C. R2-19-119. A preponderance of the evidence is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990). ADEQ’s interpretations of the applicable statutes and regulations are entitled to deference unless those statutes and regulations have clear guidance that is contrary to ADEQ’s interpretations. See Arizona Water Co. v. Arizona Dept. of Water Resources, 208 Ariz. 147, 91 P.3d 990 (2004). ADEQ had the authority to include the PBMP in APCC’s permits based on A.A.C. R18-2-306(A)(3)(c). APCC’S QUESTIONS OF LAW Can ADEQ include SIP RULE 343 in APCC’s permits given that Pima County does not regulate cement plants? Can ADEQ include SIP RULE 343 in APCC’s permits given that the Rule is not specifically applicable to cement plants?

APCC’s plant is a major source. SIP Rule 343 applies to all major sources, and consequently it applies to APCC. See SIP Rule 341. ADEQ’s asserts that because SIP Rule 343 is more restrictive than the standards adopted by ADEQ’s Director, ADEQ is required to include SIP Rule 343 in APCC’s permits. See A.R.S. § 49-402. ADEQ’s interpretation of the statute is reasonable and should be upheld. In Docket No. 08A-A025-DEQ, APCC stipulated that SIP Rule 343 applies to its plant. Although APCC filed a Motion with ADEQ’s Director to have this stipulation undone, there was no evidence adduced showing that ADEQ’s Director granted that Motion. ADEQ has the authority to include the requirements of SIP Rule 343 in APCC’s permits. Do the requirements of A.R.S. § 49-422(B) and (C) apply to APCC’s permits?

A.R.S. § 49-422(B) applies when ADEQ is developing rules, which is not the case here. ADEQ was not required to consider the requirements of A.R.S. § 49-422(B) when it issued APCC’s permits. A.R.S. § 49-422(C) does not apply to APCC’s permits because PM is listed in A.R.S. § 49-425(A). ADEQ’s Director has discretion to impose monitoring requirements on sources of pollutants that are not regulated under § 49-422(B), provided that the Director considers the costs of those requirements. See A.R.S. §49-422(C). Because PM is listed in A.R.S. § 49-425(A), PM is regulated under A.R.S. § 49-422(B). Consequently, A.R.S. § 49-422(C) does not apply to APCC’s permits that were promulgated based on the authority found in A.A.C. R18-2- 306(A)(3)(c).

Is ADEQ’s interpretation of SIP Rule 343 erroneous because it conflicts with Pima County’s interpretation of the Rule?

SIP Rule 343 provides that no person shall cause or permit the airborne diffusion of visible emissions, including fugitive dust, beyond the property boundary line within which the emissions become airborne. ADEQ’s position is consistent with a plain reading of SIP Rule 343 and is therefore not erroneous.

Does ADEQ’s interpretation of SIP Rule 343 render the rule unconstitutional?

Neither the Administrative Law Judge nor ADEQ’s Director has authority to make such a ruling, which is a question for the civil courts. If, however, ADEQ’s Director finds that making such a determination is within his authority, the Administrative Law Judge’s conclusion is that ADEQ’s interpretation of SIP Rule 343 is not unconstitutional because ADEQ’s interpretation is consistent with a plain reading of the Rule.

ADEQ can require APCC to operate the cameras when the wind speed is greater than 25 mph

Subject to limited waivers, SIP Rule 343 does not apply when the wind speed is greater than 25 mph. It is not a violation of APCC’s permit for visible emissions to cross the property boundary when SIP Rule 343 is not in effect because of winds greater than 25 mph. ADEQ is requiring the cameras to be operated when the wind is greater than mph because ADEQ believes that such monitoring is required to obtain reliable data to insure that APCC complies with the permit when the wind speed is less than 25 mph. See A.A.C. R18-2-306(A)(3)(c). ADEQ’s conclusion that the cameras must be operated when the wind speed is greater than 25 mph is a reasonable interpretation of A.A.C. R18-2- 306(A)(3)(c).

Who has the burden of persuasion given that APCC did not request the PBMP?

APCC is the party asserting a claim, right, or entitlement. Consequently it bears the burden of proof in this matter. A.A.C. R2-19-119; see also A.R.S. § 41-1092.07(G)(1) (the applicant bears the burden of persuasion on a request to modify a permit). EVIDENCE WITH RESPECT TO THE COST OF THE PBMP APCC has spent $46,300 on infrastructure and equipment, and it estimates that it will cost an additional $47,000 to implement the PBMP. APCC estimates that the annual operating cost will be $82,800. ADEQ believes APCC has overstated the cost to implement and operate the PBMP. APCC’s cost estimates are not unreasonable, considering: a. Unlike ADEQ’s projects, APCC is required to show that it is in compliance with its permits. Consequently, it is reasonable that APCC will spend more time reviewing its photographs than ADEQ does; b. It is not certain how much time it will take for APCC to follow- up when dust is seen in the photographs. Because APCC will be subject to penalties if it certifies substandard work, it will be reasonable for APCC to spend substantially more time investigating such incidents than ADEQ does; c. The cameras are located on 50 foot poles and will need to be cleaned each day, which was not required in ADEQ’s projects. Based on its own cost estimates, APCC acknowledges that the PBMP is not cost prohibitive. TECHNICAL FEASIBILITY During the hearing, Mr. Kendall demonstrated that similar cameras can be used to show local dust emissions and the source of those emissions. Mr. Kendall also provided testimony about several other similar projects that were successful. APCC’s demonstration project may not have been a success, but Mr. Peloquin had no experience using cameras to monitor for dust, and he did not consult people who do have such experience. Consequently, ADEQ’s evidence is more persuasive than APCC’s. The preponderance of the evidence shows that the PBMP is technically feasible and can be effective in determining whether visible emissions cross APCC’s property boundary line. COST EFFECTIVENESS The preponderance of the evidence shows that the PBMP is cost effective when compared to the current property boundary monitoring. The PBMP will yield 240 observations per day for about the same cost that APCC now obtains one observation. RECOMMENDED ORDER IT IS ORDERED affirming the Decision of ADEQ’s Director in Docket No. 08A-A025-DEQ; and IT IS ORDERED denying APCC’s appeal in Docket No. 09A-A010-DEQ. Done this day, November 1, 2010.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Benjamin Grumbles, Director Department of Environmental Quality ----------------------- [1] APCC also appealed other conditions in SPR # 38592, but those issues were resolved by the parties prior to the hearing. See “Joint Motion to Enter Partial Settlement Agreement,” dated March 19, 2009.

-----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826