THIS MATTER INVOLVES AN ENFORCEMENT ACTION AGAINST KETCHIKAN PULP COMPANY'S (KPC) ANNETTE HEMLOCK SAWMILL (FACILITY) FOR THE CONSTRUCTION AND OPERATION OF AN OLIVINE UNIT TO BURN WOOD WASTE, IN VIOLATION OF THE PREVENTION OF SIGNIFICANT DETERIORATION (PSD) REQUIREMENTS OF THE CLEAN AIR ACT. THIS CASE HAS BEEN BROUGHT TO OUR ATTENTION THROUGH NUMEROUS CITIZEN COMPLAINTS REGARDING EXCESSIVE SMOKE COMING FROM THE UNCONTROLLED FACILITY. THE FACILITY IS A MAJOR EMMPLOYER FOR THE METLAKATLA INDIAN COMMUNITY. KPC CONSTRUCTED THE OLIVINE UNIT IN 1980, WITHOUT FIRST APPLYING FOR A PERMIT. SECTION 165 OF THE ACT AND EPA REGULATIONS AT 40 C.F.R. SECTION 52.21 REQUIRE KPC TO APPLY FOR A PERMIT BEFORE CONSTRUCTING, OPERATING, OR MODIFYING A SOURCE THAT EMITS POLLUTANTS AT LEVELS THAT QUALIFY IT AS A MAJOR STATIONARY SOURCE. IN AREAS WHERE THE NATIONAL AMBIENT AIR QUALITY STANDARDS (NAAQS) ARE IN ATTAINMENT, THE REQUIREMENTS OF SECTION 165 OF THE ACT ARE INTENDED TO PREVENT THE SIGNIFICANT DETERIORATION OF AIR QUALITY AND TO PROTECT PUBLIC HEALTH AND WELFARE. USING INFORMATION PROVIDED BY KPC, WE HAVE DETERMINED THAT THE FACILITY IS A MAJOR STATIONARY SOURCE, AND THAT CONSTRUCTION OF THE OLIVINE UNIT WAS A MAJOR MODIFICATION TO A MAJOR STATIONARY SOURCE. EFFORTS BY EPA IN 1980 TO REQUIRE KPC TO APPLY FOR A PERMIT AND TO INSTALL AIR EMISSION CONTRO