BLUE DIAMOND GROWERS ( DEFENDANT ) IS THE CURRENT OWNER AND OPERATOR OF A BIOMASS FIRED COGENERATION FACILITY ( FACILITY ) LOCATED IN SACRAMENTO, CALIFORNIA. A PRIOR OWNER OF THE FACILITY, IMOTEK, INC. ( IMOTEK ), CONSTRUCTED THE FACILITY IN LATE 1980/EARLY 1981. THE ORIGINAL AUTHORITIES TO CONSTRUT ( ATC ) ISSUED BY THE SACRAMENTO COUNTY AIR POLLUTION CONTROL DISTRICT, REQUIRED A WET SCRUBBER TO CONTROL PARTICULATE EMISSIONS AND A THERMAL CONTROL SYSTEM FOR NITROGEN OXIDE EMISSIONS AT THE FACILITY. THE DISTRICT DID NOT REQUIRE AN EMISSION, SINCE IMOTEK HAD ESTIMATED IN THE PERMIT APPLICATION THAT CO EMISSIONS WOULD BE BELOW THE REGULATORY THRESHOLD. DURING START UP OF THE FACILITY IN 1981/1982, IMOTEK EXPERIENCED PROBLEMS WITH EXCESSIVE EMISSIONS OF PARTICU- LATES. SOURCE CONTROL TESTS CONDUCTED BY THE CALIFORNIA AIR RESOURCES BOARD IN APRIL, 1982, SHOWED EMISSION LEVELS OF NOX AND CO ABOVE THE REGULATORY THRESHOLDS. THE LEVELS MADE THE FACILITY SUBJECT TO THE FEDERAL PREVENTION OF SIGNIFICANT DETERIORATION REQUIREMENTS WHICH WERE INCORPORATED INTO THE STATE IMPLEMENTATION PLAN APPLICABLE TO SACRAMENTO COUNTY AT THAT TIME. TO REMEDY THE PARTICULATE PROBLEM, THE DISTRICT ISSUED A REVISED ATC WHICH REQUIRED SUBSTITUTION OF A BAGHOUSE FOR THE WET SCRUBBER AND PERMITTED REMOVAL OF THE THERMAL DE-NOX SYSTEM. THESE MODIFICATIONS RESULTED