regon Kate Brown, Governor

February 28, 2017

CERTIFIED MAIL: 7014 2870 0001 3378 4430

Baljit Dhillon Delco Petroleum Co., LLC 13 Lake Shore Drive West Windsor, NJ 08550-4905

Re: Notice of Civil Penalty Assessment and Order Case No. AQ/AC-NWR-2016-232

Department of Environmental Quality Office of Compliance and Enforcement

700 NE Mulh1.omah St Ste 600 Portland, OR 97232-4100

(503) 229-5696 FAX (503) 229-5100

TIY: 711

This letter is to inform you that the Oregon Department of Environmental Quality (DEQ) has issued you a civil penalty of $4,307 for failing to maintain your stage I and stage II pollution control equipment in proper working order and failing to keep the required records, including gasoline throughput records and maintenance records, in violation of the Air Contaminant Discharge Permit for your gasoline dispensing facility located at 17873 SE Mcloughlin Boulevard in Milwaukie, Oregon. In the attached Notice of Civil Penalty and Assessment Order, DEQ also cited two additional violations, without penalty. First, you failed to test the pollution control equipment in 2013 and failed to keep related records. Second, you violated the requirement to maintain spill containment that prevents a release to the environment by allowing standing liquid to accumulate in the spill containment bucket of one of your gasoline underground storage tanks.

DEQ issued this penalty because defective or worn stage I vapor balance equipment and stage II vapor recovery equipment may lead to gasoline vapor releases to the environment when gasoline is delivered to the storage tanks at your facility and when gasoline is dispensed to your customers. Gasoline vapors contain air toxics, such as benzene, a known carcinogen, and volatile organic compounds that produce smog. Maintaining stage I and stage II equipment in proper operating condition, and testing that equipment as required by your pe1mit, is critical to ensuring that gasoline vapors are captured and recycled and that they do not pose a significant threat of harm to the health of your employees, the public and the environment.

Included in Section IV is an order requiring you to take the following corrective actions: • Replace the defective stage I and stage II pollution control equipment within 15 days of the

order becoming final; • Establish a maintenance log and submit a copy of these records to DEQ within 30 days of the

order becoming final; • For years where data is available, establish a gasoline throughput records for the past five years

and submit a copy of these records to DEQ within 30 days of the order becoming final; • Establish and maintain on site at the facility all available annual test records for the past five

years and submit a copy of2013 test results, if available, to DEQ within 30 days of the order becoming final; and

Delco Petroleum Co., LLC Case No. AQ/AC-NWR-2016-232 Page2

• Within 15 days of the order becoming final, remove the standing liquid in the spill containment bucket fill tube to the west-most 87 grade underground storage tank and place the liquid in a closed container, such that any petroleum product does not evaporate into the atmosphere. The liquid must be hauled offsite and disposed of at a facility permitted to handle the disposal of petroleum products.

If you have any questions about how to comply with any of the items listed above, please contact Daniel DeFehr at 503-229-6155 or Defehr.Daniel@deg.state.or.us.

$707 of the civil penalty represents the economic benefit you gained by failing to replace worn or ineffective stage I vapor balance equipment and stage II vapor recovery equipment. If you complete these requirements, DEQ will consider recalculating the costs as delayed rather than avoided and will reduce the civil penalty accordingly.

If you wish to appeal this matter, DEQ must receive a request for a contested case hearing within 20 calendar days from your receipt of this letter. The hearing request must be in writing. Send your hearing request to DEQ Office of Compliance and Enforcement - Appeals:

Via mail - 700 NE Multnomah Street, Suite #600, P01tland, Oregon 97232 Via fax - 503-229-5100

Once DEQ receives your request, we will anange to meet with you to discuss this matter. If DEQ does not receive a timely written hearing request, the penalty will become due. Alternatively, you can pay the penalty by sending a check or money order to the above address.

The attached Notice further details DEQ's reasons for issuing the penalty and provides fu1ther instructions for appealing the penalty. Please review it and refer to it when discussing this case with DEQ.

DEQ may allow you to resolve part of your penalty through the completion of a Supplemental Environmental Project (SEP). SEPs are environmental improvement projects that you sponsor in lieu of paying your penalty. Enclosed is more detail on how to pursue a SEP. SEP documents are available on the internet at http://www.deq.state.or.us/programs/enforcement/SEP.htm, or by calling the number below to request a paper copy.

DEQ's rules are available on the internet at http://www.deq.state.or.us/regulations/rules.htm, or by calling the number below to request a paper copy.

If you have any questions, please contact DEQ Environmental Law Specialist Becka Puskas, at (503) 229-5058. You may call toll-free within Oregon at 1-800-452-4011, extension 5058.

Sincerely,

Sarah G. Wheeler, Acting Manager Office of Compliance and Enforcement

Enclosures

Delco Petroleum Co., LLC Case No. AQ/AC-NWR-2016-232 Page 3

cc: Dan DeFehr, Northwest Region Shaumae Hall, Accounting, DEQ Cindy Troupe, AQ, DEQ

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BEFORE THE ENVIRONMENTAL QUALITY COMMISSION

OF THE STATE OF OREGON

IN THE MATTER OF: ) DELCO PETROLEUM CO, LLC, )

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER

an Oregon limited liability company, ) Respondent. ) CASE NO. AQ/AC-NWR-2016-232

6 I. AUTHORITY

7 The Department of Environmental Quality (DEQ) issues this Notice of Civil Penalty Assessment

8 and Order (Notice) pursuant to Oregon Revised Statutes (ORS) 468.100, ORS 468.126 through 468.140,

9 ORS Chapters 183 and 466, 468, 468A and Oregon Administrative Rules (OAR) Chapter 340, Divisions

10 011,012, 150,242and244.

11 II. FINDINGS OF FACT

12 1. Respondent operates a gasoline dispensing facility (GDF) located at 17873 SE McLoughlin

13 Boulevard in Milwaukie, Oregon, doing business as "Delco" (the Facility).

14 2. The Facility has four nnderground gasoline storage tanks that are each equipped with stage I

15 vapor controls intended to capture vapors while transferring gasoline from tanker trucks into storage

16 tanks.

17 3. The Facility also has pumps used for dispensing gasoline to its customers. The pumps are

18 equipped with stage II vapor controls intended to capture vapors while transferring gasoline from the

19 pumps to an individual vehicle.

20 4. On May 23, 2011, Respondent obtained coverage under General Air Contaminant Discharge

21 Permit No. AQGP-023 for GDFs subject to stage II vapor collection requirements in OAR 340-242-

22 0520 and the emission standards in OR 340-244-0232 (the Permit).

23 5. The Pe1mit was in effect at all material times.

24 Violation 1

25 6. Condition 4.4 of the Permit requires Respondent to install and operate a stage I vapor

26 balance system that meets all of the following management practices, including a) all vapor connections

27 and lines on the storage tank must be equipped with closures that seal upon disconnect, b) the vapor

NOTICE OF CIVIL PENAL TY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-20I6-232 Page I of8

1 line from the gasoline storage tank to the cargo tank must be vapor-tight, and f) liquid fill connection

2 for all systems must be equipped with vapor-tight caps.

3 7. Condition 4.8 of the Permit requires Respondent to ensure the connection and proper

4 operation of the vapor balance system whenever gasoline is being transfetTed. Condition 4.8 further

5 requires Respondent to ensure that all equipment associated with the vapor balance system must be

6 maintained to be vapor tight and in good working order.

7 8. Condition 4.9 of the Permit requires Respondent to replace, repair or modify any worn or

8 ineffective component or design element to ensure the vapor-tight integrity and efficiency of the stage

9 II vapor collection systems.

10 9. Condition 5 .4 of the Pe1mit requires Respondent to replace, repair or modify any worn or

11 ineffective component or design element within 24 hours to ensure the vapor-tight integrity and

12 efficiency of the vapor balance system.

13 10. As of October 12, 2016, the Facility had equipment that was worn or ineffective with

14 regards to stage I vapor balance equipment as well as stage II vapor recovery equipment. Specifically,

15 the following components of Respondent's stage I vapor balance equipment and stage II vapor recovery

16 equipment were worn or ineffective:

17 a. Dispenser 1 main hose and whip hose,

18 b. Dispenser 2 main hose,

19 c. Dispenser 5 whip hose,

20 d. Dispenser 6 main hose,

21 e. Dispenser 11 whip hose,

22 f. West-most 87 grade tank vapor return line requires gasket seal,

23 g. West-most 87 grade tank fill line requires a new cap,

24 h. Middle 87 grade tank fill line requires a new cap, and

25 1. East-most 92 grade tank fill line requires a new cap.

26 11. In Warning Letter with Opp011unity to CotTect No. 2016-1990, dated October 21, 2016,

27 DEQ requested that Respondent replace the worn or ineffective stage I vapor balance equipment and

NOTICE OF CIVIL PENAL TY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-2016-232 Page 2 of8

1 stage II vapor recovery equipment described in Paragraph 10, above, and demonstrate compliance by

2 November 21, 2016.

3 12. In Pre-Enforcement Notice No. 2068-03-9628-23, dated November 28, 2016, DEQ again

4 requested that Respondent replace the worn or ineffective stage I vapor balance equipment and stage II

5 vapor recovery equipment described in Paragraph 10, above, and demonstrate compliance by December

6 28, 2016.

7 13. As of the date of this Notice, Respondent has not provided documentation to DEQ

8 demonstrating the worn or ineffective stage I vapor balance equipment and stage II vapor recovery

9 equipment described in Paragraph 10, above, has been replaced.

10 Violation 2

11 14. Condition 6.1 of the Permit requires Respondent to maintain records related to the

12 operation and maintenance of the Facility and vapor balance and collection systems and records of the

13 total throughput volume of gasoline, in gallons, for each calendar month.

14 15. Condition 6.3 of the Permit requires that the records described in Paragraph 14, above, be

15 maintained on site for a period of five years and made available to DEQ upon request.

16 16. During DEQ's inspection on October 12, 2016, maintenance records and monthly gasoline

17 throughput records for the past five years were not available at the Facility for DEQ to review.

18 17. In Warning Letter with Opportunity to Correct No. 2016-1990, dated October 21, 2016,

19 DEQ requested that Respondent establish a maintenance log and establish monthly gasoline throughput

20 records for the past five years, and demonstrate compliance by November 21, 2016.

21 18. In Pre-Enforcement Notice No. 2068-03-9628-23, dated November 28, 2016, DEQ again

22 requested that Respondent establish a maintenance log and establish monthly gasoline throughput

23 records for the past five years, and demonstrate compliance by December 28, 2016.

24 19. As of the date of this Notice, Respondent has not demonstrated to DEQ that it has

25 established a maintenance log and has not provided DEQ with any monthly gasoline throughput records

26 for the past five years.

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NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-2016-232 Page 3 of8

1 Violation 3

2 20. Condition 5.3 of the Permit requires Respondent to conduct vapor collection system testing

3 for stage II equipment at least once per year. Specifically, each vacuum assist or Enhanced Vapor

4 Recovery (EVR) system must, once a year, pass a Pressure Decay Leak test using California Air

5 Resources Board Vapor Recovery Test Procedure TP-201.3 (hereinafter "Pressure Decay Leak test")

6 and an Air to Liquid Ratio (AIL) test using California Air Resources Board Vapor Recovery Test

7 Procedure TP-201.5, or other approved method(s) (hereinafter "Air to Liquid Ratio test").

8 21. Condition 6.1 of the Permit requires Respondent to maintain records of the tests described in

9 Paragraph 20, above.

10 22. Condition 6.3 of the Pe1mit requires that records oftest results be maintained on site for a

11 period of five years and made available to DEQ upon request.

12 23. During DEQ's inspection on October 12, 2016, records of Pressure Decay Leak tests and

13 Airto Liquid Ratio tests for years 2013 and 2014 were not available at the Facility for DEQ to review.

14 24. As of the date of this Notice, Respondent has not provided DEQ with Pressure Decay Leak

15 test and Air to Liquid Ratio test records for 2013.

16 Violation 4

17 25. OAR 340-150-0310 requires Respondent to install, operate and maintain spill prevention

18 equipment for its undergrotmd storage tanks, such as a spill catchment basin or a spill bucket that will

19 prevent the release of a regulated substance to the environment when the transfer hose is detached from

20 the fill pipe.

21 26. During DEQ's inspection on October 12, 2016, the spill containment bucket for the west-

22 most 87 grade underground storage tank was filled with 7.25 inches of standing liquid, diminishing its

23 effectiveness for preventing a release of gasoline when the transfer hose is detached from the fill pipe.

24 Ill

25 Ill

26 Ill

27 Ill

NOTICE OF CIVIL PENAL TY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-20I6-232 Page 4 of8

1 III. CONCLUSIONS

2 1. Respondent has violated Conditions 4.4, 4.8, 4.9 and 5.4 of the Permit by failing to replace

3 worn or ineffective stage I vapor balance equipment and stage II vapor recovery equipment as described in

4 Section II, Paragraphs 6-13, above. This is a Class II violation, according to OAR 340-012-0054(2)(k).

5 DEQ hereby assesses a $2,507 civil penalty for this violation.

6 2. Respondent has violated Conditions 6.1 and 6.3 of its Pe1mit by failing to maintain

7 maintenance records and monthly gasoline throughput records as described in Section II, Paragraphs 14-

8 19, above. These are Class II violations, according to OAR 340-012-0054(2)(b). DEQ hereby assesses a

9 $1,800 civil penalty for these violations.

10 3. Respondent has violated Conditions 5.3, 6.1 and 6.3 of its Permit by failing to conduct vapor

11 collection system testing for 2013 and failing to maintain vapor collection system testing records for 2013

12 and 2014, as described in Section II, Paragraphs 20-24, above. These are Class II violations, according to

13 OAR 340-012-0054(2)(b ). DEQ has not assessed a civil penalty for these violations.

14 4. Respondent has violated OAR 340-150-0310(1) by allowing liquid to accumulate in the spill

15 containment bucket for the west-most 87 grade underground storage tank, in such a ma:rmer as to render

16 spill containment ineffective, as described in Section II, Paragraphs 25-26, above. This is a Class II

17 violation, according to OAR 340-012-0053(2). DEQ has not assessed a civil penalty for this violation.

18 IV. ORDER TO PAY CIVIL PENALTY AND TO COMPLY

19 Based upon the foregoing FINDINGS OF FACTS AND CONCLUSIONS, Respondent is

20 hereby ORDERED TO:

21 1. Pay a total civil penalty of $4,307. The determination of the civil penalties are attached as

22 Exhibits 1 and 2 and are incorporated as part ofthis Notice.

23 If you do not file a request for hearing as set forth in Section V below, your check or money

24 order must be made payable to "State Treasurer, State of Oregon" and sent to the DEQ, Business

25 Office, 700 NE Multnomah Street, Suite #600, Portland, Oregon 97232. Once you pay the penalty,

26 the Findings of Fact, Conclusions and Order become final.

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NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-2016-232 Page 5 of8

1 2. Within 15 days of this order becoming final, replace the defective pollution control

2 equipment as follows:

3 a. Dispenser 1 main hose and whip hose,

4 b. Dispenser 2 main hose,

5 c. Dispenser 5 whip hose,

6 d. Dispenser 6 main hose,

7 e. Dispenser 11 whip hose,

8 f. West-most 87 grade tank vapor return line requires gasket seal,

9 g. West-most 87 grade tank fill line requires a new cap,

10 h. Middle 87 grade tank fill line requires a new cap, and

11 1. East-most 92 grade tank fill line requires a new cap.

12 3. Within 30 days of this order becoming final, establish a maintenance log to track stage I and

13 stage II component defects and repairs and maintain it on site at the Facility. Submit a copy of the

14 maintenance log to DEQ, documenting the repairs required in Paragraph 2, above and demonstrating its

15 use.

16 4. Within 30 days of this order becoming final, either: a) establish monthly gasoline

17 throughput records for the past five years, where data is available to establish such records, and submit

18 a copy of such records to DEQ, orb) for any of the past five years where data is not available to

19 establish monthly throughput records, submit a statement to DEQ that the data required to establish

20 throughput records is not available.

21 5. Within 30 days of this order becoming final, collect, if available, and maintain on site at the

22 Facility all available annual test records for the past five years. Submit a copy of2013 test results, if

23 available, to DEQ.

24 6. Within 15 days of this order becoming final, remove the standing liquid in the spill

25 containment bucket fill tube to the west-most 87 grade underground storage tank and place the liquid in

26 a closed container, such that any petroleum product does not evaporate into the atmosphere. The liquid

27 must disposed of at a facility permitted dispose of petroleum products.

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-20I6-232 Page 6 of8

1 Within 30 days of this order becoming final, written documentation demonstrating

2 Respondent's compliance with the above requirements Section IV, Paragraphs 2-6, must be sent to

3 Daniel DeFehr, Oregon Department of Environmental Quality, N01ihwest Region Office, 700 NE

4 Multnomah Street, Suite 600, Portland, OR 97232 or Defehr.Daniel@deg.state.or.us.

5 V. NOTICE OF RIGHT TO REQUEST A CONTESTED CASE HEARING

6 You have a right to a contested case hearing on this Notice, if you request one in writing. You

7 must ensure that DEQ receives the request for hearing within 20 calendar days from the date you

8 receive this Notice. If you have any affirmative defenses or wish to dispute any allegations of fact in

9 this Notice or attached exhibit(s), you must include them in your request for hearing, as factual matters

10 not denied will be considered admitted, and failure to raise a defense will be a waiver of the defense.

11 (See OAR 340-011-0530 for fmiher infmmation about requests for hearing.) You must mail the request

12 for hearing to: DEQ, Office of Compliance and Enforcement - Appeals, 700 NE Multnomah

13 Street, Suite #600, Portland, Oregon 97232, or fax it to 503-229-5100. An administrative law judge

14 employed by the Office of Administrative Hearings will conduct the hearing, according to ORS

15 Chapter 183, OAR Chapter 340, Division 011 and OAR 137-003-0501 to 0700. You have a right to be

16 represented by an attorney at the hearing, or you may represent yourself unless you are a corporation,

1 7 agency or association.

18 Active duty service-members have a right to stay proceedings under the federal Service

19 members Civil Relief Act. For more info1mation, please call the Oregon State Bar at 1-800-

20 452-8260 or the Oregon Military Depaiiment at 1-800-452-7500. Additional information can be found

21 online at the United States Armed Forces Legal Assistance (AFLA) Legal Services Locator website

22 http://legalassistance.law.af.mil/content/locator.php.

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NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-2016-232 Page 7 of8

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If you fail to file a request for hearing in writing within 20 calendar days of receipt of the

Notice, the Notice will become a final order by default without further action by DEQ, as per OAR

340-011-0535(1). If you do request a hearing but later withdraw your request, fail to attend the hearing

or notify DEQ that you will not be attending the hearing, DEQ will issue a final order by default

pursuant to OAR 340-011-053 5(3). DEQ designates the relevant portions of its files, including

information submitted by you, as the record for purposes of proving a prima facie case.

Sarah G. Wheeler, Acting Manager Office of Compliance and Enforcement

NOTICE OF CIVIL PENALTY ASSESSMENT AND ORDER CASE NO. AQ/AC-NWR-2016-232 Page 8 of8

EXHIBIT 1

FINDINGS AND DETERMINATION OF RESPONDENT'S CIVIL PENALTY PURSUANT TO OREGON ADMINISTRATIVE RULE (OAR) 340-012-0045

VIOLATION No. 1:

CLASSIFICATION:

MAGNITUDE:

Failing to replace worn or ineffective stage I vapor balance equipment and stage II vapor recovery equipment, in violation of Conditions 4.4, 4.8, 4.9 and 5.4 of Respondent's AQGP-23 Permit.

This is a Class II violation pursuant to OAR 340-012-0054(2)(k).

The magnitude of the violation is moderate pursuant to OAR 340-012-0130(1), as there is no selected magnitude specified in OAR 340-012-0135 applicable to this violation, and the information reasonably available to DEQ does not indicate a minor or major magnitude.

CIVIL PENALTY FORMULA: The formula for detennining the amount of penalty of each violation is: BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB

"BP" is the base penalty, which is $750 for a Class II, moderate magnitude violation in the matrix listed in OAR 340-012-0140( 4)(b )(B)(ii) and applicable pursuant to OAR 340-012-0140( 4)(a)(C) because Respondent has a General Air Contaminant Discharge Pe1mit because Respondent is subject to the federal Area-Source NESHAP requirements.

"P" is whether Respondent has any prior significant actions, as defined in OAR 340-012-0030(19), in the same media as the violation at issue that occmTed at a facility owned or operated by the same Respondent, and receives a value ofO according to OAR 340-012-0145(2)(a)(A), because there are no prior significant actions.

"H" is Respondent's hist01y of c01Tecting prior significant actions and receives a value of 0 according to OAR 340-012-0145(3)(c), because there is no prior history.

"O" is whether the violation was repeated or ongoing and receives a value of 4 according to OAR 340-012-0145(4)(d), because there were more than 28 occun-ences of the violation. Each day of a violation is a separate occurrence. The violation began on or before October 12, 2016 and is ongoing as of the date of this Notice.

"M" is the mental state of the Respondent and receives a value of 8 according to OAR 340-012-0145(5)(d), because Respondent's conduct was reckless. Reckless means the Respondent consciously disregarded a substantial and unjustifiable risk the result would occur or that the circumstance existed. The risk must be of such a nature and degree that disregarding that risk constituted a gross deviation from the standard of care a reasonable person would observe in that situation. As of October 12, 2016, the Facility had equipment that was worn or ineffective with regards to stage I vapor balance equipment as well as stage II vapor recovery equipment, and Respondent was notified by telephone during the

Case No. AQ/AC-NWR-2016-232 Exhibit 1 Page I

inspection regarding the violation and need to replace the equipment. DEQ reiterated its request that Respondent replace the worn or ineffective equipment in Warning Letter with Opportunity to Con-ect No. 2016-1990, dated October 21, 2016, and again in Pre­Enforcement Notice No. 2068-03-9628-23, dated November 28, 2016. Despite these repeated notifications regarding the violation and requests for con-ective action from DEQ, as of the date of this Notice, Respondent has not provided documentation to DEQ demonstrating that the worn or ineffective stage I and stage II equipment has been replaced. By failing to replace the worn or ineffective equipment despite DEQ's repeated requests, Respondent consciously disregarded a substantial and unjustifiable risk that it would violate the AQGP-23 Permit. Disregarding that risk represents a gross deviation from the standard of care a reasonable person would observe in this situation.

"C" is Respondent's efforts to con-ect or mitigate the violation and receives a value of2 according to OAR 340-012-0145(6)(g), because Respondent did not address the violation as described in paragraphs (6)(a) through (6)(e) and the facts do not suppoti a finding under paragraph (6)(f). As of the date of this Notice, Respondent has not provided documentation to DEQ demonstrating that the worn or ineffective stage I and stage II equipment has been replaced.

"EB" is the approximate dollar value of the benefit gained and the costs avoided or delayed as a result of the Respondent's noncompliance. It is designed to "level the playing field" by taking away any economic advantage the entity gained and to deter potential violators from deciding it is cheaper to violate and pay the penalty than to pay the costs of compliance. In this case, "EB" receives a value of $707. This is the amount Respondent gained by avoiding spending $1,269 to replace worn or ineffective stage I and stage II equipment. This "EB" was calculated pursuant to OAR 340-012-0150(1) using the U.S. Environmental Protection Agency's BEN computer model.

PENALTY CALCULATION: Penalty= BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB = $750 + [(0.1 X $750) X (0 + 0 + 4 + 8 + 2)] + $707 = $750 + ($75 X 14) + $707 = $750 + $1,050 + $707 = $2,507

Case No. AQ/AC-NWR-2016-232 Exhibit 1 Page 2

EXHIBIT2

FINDINGS AND DETERMINATION OF RESPONDENT'S CIVIL PENALTY PURSUANT TO OREGON ADMINISTRATIVE RULE (OAR) 340-012-0045

VIOLATION No. 2:

CLASSIFICATION:

MAGNITUDE:

Failing to maintain maintenance recqrds and monthly gasoline throughput records, in violation of Conditions 6.1 and 6.3 of Respondent's AQGP-23 Pennit.

This is a Class II violation pursuant to OAR 340-012-0054(2)(b ).

The magnitude of the violation is moderate pursuant to OAR 340-012-0130(1), as there is no selected magnitude specified in OAR 340-012-0135 applicable to this violation, and the information reasonably available to DEQ does not indicate a minor or major magnitude.

CIVIL PENALTY FORMULA: The formula for detennining the amount of penalty of each violation is: BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB

"BP" is the base penalty, which is $750 for a Class II, moderate magnitude violation in the matrix listed in OAR 340-012-0140(4)(b)(B)(ii) and applicable pursuant to OAR 340-012-0140(4)(a)(C) because Respondent has a General Air Contaminant Discharge Pennit because Respondent is subject to the federal Area-Source NESHAP requirements.

"P" is whether Respondent has any prior significant actions, as defined in OAR 340-012-0030(19), in the same media as the violation at issue that occmTed at a facility owned or operated by the same Respondent, and receives a value ofO according to OAR 340-012-0145(2) (a) (A), because there are no prior significant actions.

"H" is Respondent's history of correcting prior significant actions and receives a value of 0 according to OAR 340-012-0145(3)(c), because there is no prior histo1y.

"O" is whether the violation was repeated or ongoing and receives a value of 4 according to OAR 340-012-0145(4)(d), because there were more than 28 occmTences of the violation. Each record is a separate occurrence. Respondent has not established a maintenance log, and has not prepared monthly gasoline throughput records for the past five years, for a total of 61 occurrences.

"M" is the mental state of the Respondent and receives a value of8 according to OAR 340-012-0145(5)(d), because Respondent's conduct was reckless. Reckless means the Respondent consciously disregarded a substantial and unjustifiable risk the result would occur or that the circumstance existed. The risk must be of such a nature and degree that disregarding that risk constituted a gross deviation from the standard of care a reasonable person would observe in that situation. As of October 12, 2016, the Facility had not established a maintenance record and did not have monthly gasoline tln·oughput records on-site for the

Case No. AQ/AC-NWR-2016-232 Exhibit 2 Page I

past five years. Respondent was notified of the violation by telephone on October 12, 2016 and asked to correct them. DEQ reiterated its request that Respondent establish a maintenance log and provide DEQ with monthly gasoline throughput records for the past five years in Warning Letter with Opportunity to Correct No. 2016-1990, dated October 21, 2016, and again in Pre-Enforcement Notice No. 2068-03-9628-23, dated November 28, 2016. Despite these repeated notifications regarding the violation and requests for c01Tective action from DEQ, as of the date of this Notice, Respondent has not provided documentation to DEQ demonstrating that a maintenance log has been established at the Facility nor has Respondent provided DEQ with monthly gasoline throughput records for the past five years. By failing to establish these records despite DEQ's repeated requests, Respondent consciously disregarded a substantial and unjustifiable risk that it would violate the AQGP-23 Permit. Disregarding that risk represents a gross deviation from the standard of care a reasonable person would observe in this situation.

"C" is Respondent's efforts to correct or mitigate the violation and receives a value of2 according to OAR 340-012-0145(6)(g), because Respondent did not address the violation as described in paragraphs (6)(a) through (6)(e) and the facts do not support a finding under paragraph (6)(f). As of the date of this Notice, Respondent has not provided documentation to DEQ demonstrating that a maintenance log has been established, nor has Respondent provided DEQ with any monthly gasoline throughput records for the past five years.

"EB" is the approximate dollar value of the benefit gained and the costs avoided or delayed as a result of the Respondent's noncompliance. It is designed to "level the playing field" by taking away any economic advantage the entity gained and to deter potential violators from deciding it is cheaper to violate and pay the penalty than to pay the costs of compliance. In this case, "EB" receives a value of $0 because DEQ has insufficient information to malce a finding regarding economic benefit.

PENALTY CALCULATION: Penalty= BP+ [(0.1 x BP) x (P + H + 0 + M + C)] + EB = $750 + [(0.1 X $750) X (0 + 0 + 4 + 8 + 2)] + $0 = $750 + ($75 X ]4) + $0 = $750 + $1,050 + $0 = $1,800

Case No. AQ/AC-NWR-2016-232 Exhibit 2 Page2