ELECTRONIC FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER

18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

DYNEGY MIDWEST GENERATION, INC.)

(VERMILION POWER STATION),

)

)

Petitioner,

)

)

PCB No. 2006-073

v.

)

(CAMP Permit Appeal)

)

ILLiNOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

NOTICE

To:

Dorothy Gunn,

Clerk

Sheldon A. Zabel

Illinois Pollution ControlBoard

Kathleen

C. Bassi

100 West Randolph Street

Stephen J. Bonebrake

Suite 11-500

JoshuaR. More

Chicago, Illinois

60601

Kavita M.

Patel

SchifiHardin, LLP

Bradley P. Halloran

6600 SearsTower

Hearing Officer

233 South Wacker Drive

James R. Thompson Center,

Chicago,

flhinois60606

Suite 11-500

100 West Randolph Street

Chicago, Illinois

60601

PLEASE TAKE NOTICE that I have today electronically filed with the

Office

of

the Clerk ofthe Illinois Pollution Control Board the APPEARANCES, MOTION IN

OPPOSITION TO PETITIONER’S REQUEST FOR STAY and

AFFIDAVIT ofthe

Respondent, Illinois

Environmental Protection Agency, a copy of which is herewith

served upon the assigned Hearing Officer and the attorneys for the Petitioner.

Respectfully submitted by,

•

______

Robb H. Layman

Assistant Counsel

Dated: November 18, 2005

fllinois Environmental Protection Agency

1021

North

Grand

Avenue East

P.O. Box

19276

Springfield,

Illinois 62794-9276

(217) 524-9137

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ELECTRONIC FILING,

RECEIVED,

CLERK’S OFFICE,

NOVEMBER

18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

DYNtGY MIDWEST GENERATION, NC.)

(VERMILION POWER STATION),

)

)

Petitioner,

)

)

PCB No. 2006-073

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Robb H. Layman and enters his appearance on behalf ofthe

Respondent, ILLINOIS ENVIRONMENTALPROTECTION AGENCY, as one of its

attorneys in the above-captioned matter.

Respectfully submitted by,

Robb H. Layman

Assistant Counsel

Dated: November 18, 2005

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box

19276

Springfield,

Illinois 62794-9276

(217) 524-9137

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE;

NOVEMBER 18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

DYNEGY

MIDWEST GENERATION, INC.)

(VERMILION POWER STATION),

)

)

Petitioner,

)

)

PCB No. 2006-073

v.

)

(CAMP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES

Sally Carter and enters

her

appearance

on behalf ofthe

Respondent, ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY, as one of its

attorneys in the above-captioned matter.

Respectfully submitted by,

Sally taner

Assistant Counsel

Dated: November 18, 2005

illinois Environmental Protection Agency

1021

North

Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

(217) 782-5544

---

ELECTRONIC FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER 18, 2005

BEFORE

THE ILLINOIS

POLLUTION CONTROL

BOARD

OFTHE STATE OF ILLINOIS

DYNEGY

MIDWEST GENERATION, INC.)

(VERMILION POWER STATION),

)

)

Petitioner,

)

)

PCB No. 2006-073

v.

)

(CAAPP

Permit Appeal)

)

ILLINOIS

ENVIRONMENTAL

)•

PROTECTION AGENCY,

)

)

Respondent.

)

MOTION IN OPPOSITION TO

PETITIONER’S REOUEST FOR STAY

NOW COMES the Respondent,

ILLINOIS ENVIRONMENTAL

PROTECTION

AGENCY

(“illinois EPA”), by

and through

its

attorneys,

and

moves

the Illinois Pollution

Control Board (“Board”)

to denythe Petitioner’s,

DYNEGY MIDWEST

GENERATION, NC., (hereinafter“Dynegy

Midwest

Generation”

or “Petitioner”),

request for a stay ofthe effectiveness ofthe Clean Air Act Permit Program

(“CAAPP”)

permit issued

in the above-captioned matter.

INTRODUCTION

Acting in

accordance with its authority under

the.CAAPP provisions ofthe

Illinois

Environmental Protection Act (hereinafter

“Act”),

415

IL

CS 5/39.5(2004),

the

Illinois EPA issued a

CA.APP permit to Dynegy Midwest Generation

on September 29,

2005.

The permit authorizedthe operation ofan electrical power

generation

facility

known as the Vermilion Power Station.

The facility is located at 2150 North County

Road in

Oalcwood, illinois.

I

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ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE, NOVEMBER 18,2005

On November 3, 2005, attorneys for the Petitioner filed this appeal

(hereinafter

‘Petition”) withthe Board

challenging certain permit conditions

contained

within the

CA.APP permit issued bythe Illinois

EPA.

The Illinois EPA received an

electronic

version ofthe appeal on the same date.

Formal notice ofthe appeal

was served

upon the

Illinois EPA on November 7,

2005.

As

part

ofits Petition, Dynegy Midwest

Generation

seeks a stay ofthe

effectiveness ofthe

entire

CAAPP permit, citing

two principal grounds

for its requested

relief.

First,

Petitioner alleges

that

the CA.APP permit is subject to the automatic stay

provision ofthe illinois

Administrative

Procedure

Act (“APA”),

5 ILCS 100/10-

65 (b)(2004).

As an alternative basis for a blanket

stay of the CAAPP

permit, Petitioner

alleges facts intended to support the Board’s use of its discretionary stay authority.

In

accordance

with

the Board’s procedural requirements, the illinois

EPA may file

a response to

any

motion

within

14 days after service ofthe motion.

See,

351/i.

Code 101.500(d).

ARGUMENT

The Illinois EPA

urges the Board

to denyPetitioner’s request for

a stay ofthe

effectiveness of

the

entire CAAPP permit.

For reasons that

are explained in detail below,

Petitioner

cannot avail itselfofthe protections affordedby the APA’s automatic stay

provision

as a matter oflaw.

Further, Petitioner

has failed to demonstrate sufficIent

justification for theBoard

to

grant a blanket

stay ofthe

CA.APP permit under its

discretionary stay authority.

Given the

absence of an alternative request by Petitioner

seeking either

a stay ofcontested

CA.APP

permit conditions or any other relief deemed

just and appropriate, the Board should decline to grant any stay relief whatsoever.

2

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ELECTRONIC

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RECEIVED, CLERKS OFFICE,

NOVEMBER

18,

2005

I.

The CAAPP permit issued by the Illinois EPA should

not

be stayed in

its entirety by reason of the APA’s automatic stay provision.

The first argument raised by Petitioner maintains that the CAAPPpermit in this

proceeding is subject to

theautomatic stay provision ofthe APA.

See,

Petition at page 5.

The automatic stay provision under the APA governs administrative proceedings

involving

licensing, including a “new license with reference to any activity ofa

continuing nature.”

See,

5 ILCS 100/10-65(b).

TheCAAPP permit at issue in this

proceeding governs emissions-related activities at an existing, major stationary source

in

Illinois.

Accordingly, the illinois EPA does not dispute that theCAAPP permit is

synonymous with a license that

is of a continuing nature.

See also,

5 ILCS 100/1-35

(2004)(defining “license” as the “whole or part ofany agency permit... required by

law”).

In its argument, Petitioner postulates that the APA automatically stays the

effectiveness ofthe CAAPP permit until after theBoard has rendered a final adjudication

on the merits ofthis appeal.

Citing to a Third District Appellate Court ruling from over

two decades ago, Petitioner reasons that the APA’s

stay provision continues to apply

throughout the durationof the pending appeal because it is the Board, not the Illinois

EPA, that makes the “final agency decision” on the pennit.

See,

Borg-Warner

Corporation

v.

Mauzy,

427 N.E.2d 415,

56111. Dec. 335

(31*1

Dist.

1981).

The stay

provision would also apparently ensure that the Petitioner continues to abide by the terms

of“the existing license which

shall continue in full force and

effect.”

See,

5 ILCS

100/1-65(b)(2004).

Inthis case, that “existing license” is the underlying State operating

3

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ELECTRONIC FILING,

RECEIVED,

CLERK’S OFFICE,

NOVEMBER

18, 2005

permits’ that have been separately governing

the

facility’s operations since the illinois

EPA’s original receipt ofthe permit application.

See,

415 ILCS 5/39.5(4)(b)(2004).

The

Borg-Warner

decisionupheld the APA’s automatic stay provision in the

context of a renewal for a National Pollutant Discharge Elimination System (“NPDES”)

permit sought before the illinois EPA.

Notably, the courtobserved:

“A final decision, in the sense of a final and binding decision coming out of the

administrative process before the administrative agencies with decision making

power, will not be forthcoming in the instant case until the PCB rules on the

permit application.”

Borg-Warner,

56 Ill. Dec. at 341.

The illinois EPA concedesthat the

Borg-Warner

decision may still reflect good law and that it probably warrants, in the appropriate case,

application ofthe doctrine of

stare decisis

by Illinois courts.

Moreover, the illinois EPA

observes that

theruling is apparently in perfect harmony with other subsequent decisions

by Illinois courts that addressed the respectiveroles ofthe illinois EPA and the Board in

permitting matters under the Act.

In this regard, the illinois EPA is fully cognizant ofthe

“administrative continuum” that exists with respect to the Board in most permitting

matters, and the CAAPP program itself does not reveal the General Assembly’s

intentions to change this administrative arrangement.

See, illinois EPA v. Illinois

Pollution Control Board,

486 NE2d 293,

294 (3~

Dist.

1985),

affirmed, Illinois EPA v.

Illinois Pollution

ControlBoard,

503 NE2d 343,

345

(111.

1986);

ESG

Watts, Inc.,

v.

Illinois Pollution

Control Board, 676

N.E.2d 299,

304 (3~

Dist.

1997).

Thus,

it is the

Board’s decision in reviewing whether a CAAPP pennit should issue that ultimately

determines when the permit becomes final.

In limited situations,

it is possible that a facility’s operation during the pending review of the CAMP

permit application was also authorized in a State construction permit.

4

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ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE,

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18, 2005

While the

Borg-Warner

opinion may offer some interesting reading, it does not

provide a proper precedent in

this case,

This conclusion can be arrived because the APA

simply does not

apply to these CAAPP permit appeal proceedings.

For one reason, the

APA’s various provisions should not apply where the General Assembly has effectively

exempted them from a particular statutory scheme.

One exampleofthis exercise of

legislative discretion is found with administrative citations, which under Section 31.1 of

the Act are not subject to the contested case provisiOns ofthe APA.

See,

415 ILCS

5/31. i(e)(2004).

In the case of the Act’s CA.APP provisions, a similar basis for

exemption is provided by the permit severability requirements that govern the Illinois

EPA’s issuanceof CAAPP permits.

Section 39.5(7) oftheIllinois

CA.APP sets forth requirements governing the

permit content for every CAAPP permit issued by the illinois EPA.

Seegenerally,

415

ILCS5/39.5(7)(2004)

.

Section

39.5(7)(i)

of the Act

provides that:

“Each CAAPP pennit issued under subsection

10 ofthis Section shall include

a

severability clause to ensure the continued validity ofthe various permit

requirements in the event ofa challenge to

any portions ofthe permit.”

415 ILCS 5/39.5(7)(i) (2004).

This provision represents something more than the trivial

or inconsequential dictates to an agency in its administration of a permit program.

Rather, it clearly contemplates a legal

effect upon a permitting action that extends beyond

the scope of thepermit’s terms.

In other words, the General Assembly was not simply

speaking to

the Illinois EPA but, rather, to

a largeraudience.

By observing that a

component ofa CAAPP permit

shall retain a “continued validity,” lawmakers clearly

proscribed that the uncontested conditions of a CAAPP permit must continue to survive

notwithstanding a challenge to the permit’s other terms.

This language signifies an

5

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ELECTRONIC FILING, RECEIVED,

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OFFICE,

NOVEMBER

18,

2005

unambiguous

intent

to exempt some segment ofthe

CAAPP permit from any kind

of

protective stay during the permit appeal process.

For this reason, the automatic stay

provision ofthe

APA cannot be

said to govern

CAAPP

pennits issued

pursuant to the

Act.

TheBoard should also reject the Petitioner’s automatic stay argument

on

entirely

separate grounds.

Petitioner suggests

that

the

APA’s

automatic stay provision applies by

virtue ofthelicensing that is being obtained through

the

CAAPP

permitting process.

However, the

APA contains

a grandfathering clause that specifically exempts an

administrative agency

that

previously possessed “existing procedures on July 1,

1977” for

contested

case or licensing matters.

See,

5 ILCS 100/1-5(a) (2004).

Where such

provisions were in existence prior to the July

1,

1977, date, those existing provisions

continue to apply.

Id.

Procedural rules have been in place with the Board since shortly

after its

formal

creation.

Because the permitting scheme established by the Act contemplated

appeals to

the Board, procedural rules were created in those early years to guide the Board in its

deliberations.

Similar to the current Board procedures for permitting

disputes,

the

earlier

rules referenced the Board’senforcement procedures in providing specific requirements

for the

permit appeal process.

They were then, as

they are

today, contested case

requirements by virtueoftheir very nature.

The earliest version ofthe Board’s procedural regulations was adopted on

October 8,

1970 in the R70-4 rulemaking and

was subsequently published by the illinois

Secretary of State’s office as “Procedural Rules.”

Those rules included requirements for

permit appeals, effective through February

14,

1974, and

they required such proceedings

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to be conducted according to the Board’s Part Ill rules pertaining to enforcement.

See,

Rule 502.

In contrast to the Regulatory and Nonadjudicative Hearings and Proceedings,

theEnforcement Proceedings ofPart

111 contained a plethora ofcontested

case

requirements, including provisions for the filing ofa petition (i.e., Rule 304),

authorization for hearing (i.e., Rule 306), motion practice (i.e., Rule 308), discovery (i.e.,

Rule 313), conduct ofthe hearing (Rule 318),presentation ofevidence (i.e.,

Rule 321),

examination ofwitnesses (i.e., Rules 324,

325 and 327) and final disposition (i.e., Rule

322).

A later version ofthese rules, including amendments, was adopted by the Board

on August 29,

1974.

The“Procedural Rules” that originally guided the Board in enforcementcases and

permit appeals formed thebasic framework forthe current-day version of the Board’s

procedural regulations promulgated at 35 Iii. Adm. Code

101-130.

Althoug)~

the Board’s

procedural rules may have evolved and expanded over time, the core featuresof the

adversarial process governing these cases have remained substantially the same,

including those rules governing CAAPP permit appeals.

Because the Board had such

procedures in place prior to July

1,

1977, those procedures effectively secured the

Board’s exemption from the APA’s contested case requirements.

And so long as those

underlying procedures historically satisfied the grandfathering clause, it should not matter

that the Act’s CA.APP program was enacted some twenty years later.

After all, it is the

procedures applicable to contested cases and their point oforigin that

is relevant to

this

analysis, not the advent ofthe permitting program itself.2

2

Petitioner may counter that the

Borg.Warner

decision is

at

odds with this argument and

that part

of

the

appellate court’s ruling held

that the

MA’s

grandfathering clause did not apply to the

Board’s

rules for the

NPDES permit program.

The

court’s

discussion

on the issue of the grandfathering clause is

inapposite

here.

The NPDES rules at

issue were

written

in a

way

that conditioned their effectiveness upon a

future event.

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ELECTRONIC

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18, 2005

IL

The

CAAPP

permit

issued by the

Illinois EPA

should

not

be

stayed in

its entirety by reason

of Petitioner’s alleged justifications.

Separate and apart from its APA-related argument, Petitioner offers the Board an

alternativebasis

for granting a blanket stay ofthe CAAPP permit.

Specifically,

Petitioner suggests that the~Boath

stay the entire CA.APP permit

as part of its

discretionary stay authority.

See, Petition at pages 5-7.

While the reasons kut

forward

by Petitioner might have sufficed to justify a stay ofthe CAAPP pennit’s contested

conditions

had

one been sought, Petitioner fails to demonstrate a clear and convincing

need for a broader stay.

Even if the Petitioner could muster more persuasive arguments

on this issue, the illinois EPA questions whether such an all-encompassingremedy is

appropriate under any circumstances.

Notwithstanding the Board’s recent practice in

other CAAPP appeals, the Illinois EPA has come to regard blanket stays ofCAAPP

pennits as incongruous with the aims ofthe illinois CAAPP and needlessly over-

protective in light of attributes common to these appea!s.

Section

105.304(b) ofTitle 35 ofthe Board’s procedural regulations provides that

a petition for review ofa CAAPP permit may include

a request for stay.

The Board has

frequently granted stays

in permit proceedings, often citing to the

various

factors

considered by illinois courts at common law.

The factors that are usually examined by

the Board include the existence ofa clearly ascertainable right that warrants protection,

irreparable injury in the absence ofa stay, the lackof an adequate legal remedy and a

When

the

event

actually took place,

the effectiveness ofthe

rules occurred

after the July 1.

1977,

date

established

in the grandfathering clause.

More importantly, in addressing an

issue

that was

not

central

to

the

appeal, the

appellate court appears to have erroneously placed

too much emphasis

on the substantive

permitting procedures

of the NPDES

program,

rather

than

those procedures applicable to the Board’s

contested case hearings.

A proper

construction

of the MA

demands that

the focus be

placed

on the

existing procedures “specifically for contested cases or licensing.”

5

FLCS

100/I -S

(a)

(2004).

S

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ELECTRONIC

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2005

probability ofsuccess on the merits of

the

controversy.

See, Bridgestone/Firestone Off-

road Tire Company v. illinois EPA,

PCB

02-3 1

at page 3 (November

1, 2001);

CommunityLandfill Company and

City ofMorris v. illinois EPA,

PCB No. 01-48 and

01-

49 (consolidated) at page

5 (October 19, 2000), citing

.Junkunc v.

S.f. Advanced

Technology & Manufacturing,

498N.E.2d 1179 (Vt Dist.

1986).

However, the Board has

noted that its consideration is not confined exclusively to those factors nor must each one

of those factors be considered by the Board in every case.

See.

Bridgestone/Firestone

at

page 3.

TheBoard has commonly evaluated stay requests with an eye toward thenature

ofthe

injury

that might befall

an applicant from havingto comply with permit conditions,

such as the compelled expenditure of”signifzcant resources,”

Abitec Corporation v.

illinois EPA,

PCB

No. 03-95 at page

1

(February 20, 2003), or the effectual loss of

appeal rights prior to

a final legal determination.

Bridgestone/Firestone

at page 3.

The

Board has also afforded special attention to the “likelihood of environmental harm” for

any stay that maybe

granted.

See, Bridgestone/Firestone

atpage 3;

Abitec Corporation

at

1;

CommunityLandfill Company and City ofMorris v. illinois EPA,

at page 4.

j.

Consideration of traditional factors

Petitioner’s Motion touches, albeit sketchily, on some ofthe relevant factors in

this analysis.

See, Petition

at pages 5-7.

The Illinois EPA generally accepts that

Petitioner should not be required to

expend exorbitant costs in complying with challenged

monitoring, reporting or record-keeping

requirements

of the CAAPPpermit until after it

is provided its proverbial “day in court.”

Petitioner’s right of appeal likewise should not

be cut short or rendered mootbecause it

was

unable to obtain

a legal ruling before being

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required to comply with those terms of the permit that are deemed objectionable.

The

illinois EPA recognizes these reasons as a legitimate basis

for authorizing a stay of

permit conditions contested on appeal. However, they are not at all instructiveto

Petitioner’s claim that

a stay ofthe entire CAAPP permit is needed.

Judging by a fair reading of the Petition, Petitioner has challenged a relatively

small number ofthe conditions contained in the overall CAAPP permit, thus leaving the

lion’s

share

ofthe permit conditions unaffected by the appeal.

Much ofthe gist of

Petitioner’s appeal pertains to “periodic monitoring,”including a numberof provisions

dealing with emissions testing,

reporting,

record-keeping and monitoring of emissions

that are purportedly beyond the scope ofthe illinois EPA’s statutory permit authority.

If

the vast majority ofthe permit’s terms

are

uncontested, it cannot logically follow that the

absence ofa stay for those conditions will prevent the Petitioner from exercising a

right

ofappeal.

Similarly, it is difficult to discern whyPetitioner’s compliance with

uncontested pennit conditions would cause irreparableharm, especially ifone can

assume, ashere,

that the crux of CAAPP permitting requirements were carried

over

from

previously-existing State operating

permits.3

The

Illinois

EPA

does

not dispute that

the

Clean Air

Act’s

(“CAN’) Title V

pTograxn,

which formed the

framework for

the

Illinois CAMP,

requires only

a

marshalling

of

pie-existing

“applicable

requirements”

into a single

operating permit

for a major source

and that

it

does

not generally authorize new

substantive

requirements.

See,

Appalachian Power

Company

v.

Illinois

EPA,

208

F.3d

1015,

1026-1027 (D.C. Circuit,

2000);

Ohio Public

Interest Research

Group

v.

Whitman,

386 F.3d 792, 794

(6th

Cir.

2004);

In re: Peabody

Western

Coal Company,

CAA

Appeal No.

04-01,

slip op. at 6

(EAR, February

18, 2005).

Aside from the

conditions lawfully imposed by the

Illinois

EPA

for periodic monitoring and other miscellaneous matters,

the

remainder of the CAAPP permit should be

comprised of

the

pre-existing Tequirements

that

were

previously permitted.

A casual

comparison of the CAAPP permit

and

the Petition

suggests

that

the present

appeal only calls into question

a relatively small fraction of

permit

conditions contained in the overall

CAAPP

permit.

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ii.

Other

related factors

Petitioner

argues

that the absence of a blanket stay would cause

“administrative

confusion” because the uncontested conditions ofthe CAAPP permit would remain in

effect while the challenged conditions would

be governed by the “old state operating

permits.”

Petition

as pages

6-7.

The Illinois EPA takes exception to a key assumption in

the Petitioner’s argument.

Inthe Illinois

s view, the vestiges of

any

former State

operating permits

for this CAAPP

source

dissipated upon the Illinois EPA’s issuance of

the CAAPP permit on September 29,2005.

This area of discussion may be a siguificant

source ofPetitioner’s misunderstanding,

thus explaining its confusion with the

effects

of

a limited stay.

Section 39.5(4)(b) states that a CAAPP source must abide by the

terms

ofits

previous State operating permit, even though the permit mayhave expired, “until

the

source’s CAAPP permit has been issued.”

See,

415 ILCS 5/39.5(4)(b)(2004).4

A few

subsections later, the statute provides that the CAAPP permit “shall upon becoming

effective supercede the State operating permit.”

See, 415 ILCS 5/39.5(4)(g)(2004).

Taken together, these provisions indicate that permit issuance and permit effectiveness

for a CAAPP permit

are

synonymous and that

any

underlying State operating permit

becomes a nullity upon the aforementioned occurrence.

The General Assembly could not

have reasonablyintended for a source’s obligation to

end

upon permit issuance, only to

Petitioner also references

Section 9.1(0of the Actas a sourceof authority for

its proposition

that

the

State

operating

permit

continues in effect until the

CAAPP permit

is

issued.

See,

Petition

at pageS.

This

assertion is

erroneous.

Section 9.1(0 applies

only to New Source Review

permits

issued under the

authority of the

CAA, not CAAPP

permits

specifically governed by Section 39.5.

Although the

text of the

subsection is silent with respect to this

distinction, it should be

construed with reference to its context and

surrounding

provisions,

which are

confined

entirely to specified

CAA

programs.

Alternatively, to the

extent

that

the Act’s CAAPP requirements

are

more specific to

CAAPP permits,

the

provision

found at

Section

39.5(4)(b) would apply instead of the

more general provision under

Section 9.1(f).

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have the CAAPP

permit’s

superceding effect on the State

operating

permit delayed until

permit effectiveness.

Petitionet apparently reads the above-referenced provisions as though

they apply

to the Board’s final

action in this

appeal.

See, Petition at page 5.

However, this

argument ignores other provisions of the Act that

clearlydepict the Illinois EPA as the

permit-issuer.

No clearer evidence of this intent can be found than the numerous

provisions ofSection

39.5(9) of the Act, which govern the United States Environmental

Protection

Agency’s (hereinafter “USEPA”) participation and role in reviewing the

CAAPP permits.

See,

415 ILCS 5/3 9.5(9)(2004)

.~

Other provisions

ofthe Act similarly

establish that permit issuance denotes the actionofthe

Illinois EPA,

not the Board,

in the

context ofCAAPP permitting.6

As previously mentioned, the Illinois EPA

does not deny that

the CAAPP

permitting process is analogous

to the type of

“administrative continuum” recognized by

Illinois courts in other permitting programs

under the Act.

In this respect, the illinois

EPA performs a role under the Illinois CAAPP that requires,

in essence, a

defacto

issuance of a CAAPP

permit.

The

Board’s obligation in adjudicating whether the permit

should issue, in contrast, is

a

dejure-like

function that, while critical in terms of

See,

4/5 /LCS

5/39.5(9)(b,)(noting requirement that

the Illinois EPA shall not ‘issue” the

proposed

permit if IJSEPA provides a written objection within the 45

day review period);

4/5

JLCS

5/39.5(9)Q)(explaining that when the

Illinois EPA is in receipt of a USEPA objection arising from a

petition,

the

“Agency shall not issue the permit”);

4)5

ILCS5/39.5(9)(g)(observing

requirements for

whenever a USEPA objection is received by the Illinois

EPA following its

issuance of a

permit after the

expiration of the 45-day review period and prior to receipt of an

objection arising from a petition). Notably,

one such provision states

that the “effectiveness of a pennit or

its requirements”

is not stayed by virtue of

the filing of a petition

with USEI’A.

See,

415 ILCS 5/39.5(9)(J).

6

The requirements in Section

39.5(10),

entitled “Final

Agency Action,”

recognizethe standards

for

permit issuance by the

Illinois EPA.

4/5

ILCS S/39.S(IO)(2004).

Similarly,

the

review provisions for Title

V permits, codifiedat Section 40.2,

focus on a permit denial

or a grant of a permit with conditions as a

basis

for appeal to the

Board.

See. 4/5 !LCS 5/40.2(a)(2004j

The

latter provisions evengo so far

as to

reference

“final permit action” in relation to the

Illinois EPA’s

permit decision.

Id.

12

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ELECTRONIC FILING,

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determining

whether a

permit

issued by the Illinois

EPA becomes

final,

should not color

the

meaning of other legal terms.7

The issuance or effectiveness of a CAAPP permit

is

functionally distinct from the legalisms associated

with when a CAAPP permit becomes

final.

Even putting aside the legal

semantics posed by this issue, the thrust of

Petitioner’s argument misses

its mark.

Any

confusion stemming

from the appeal phase

ofthe Title V program should be fairly modest compared to the past.

Prior to the

enactment of the CAA Amendments of 1990, states issued permits under a patchwork of

various programs.

In

Illinois

and

elsewhere, numerous permits

for separate or discrete

pollutant-emitting activities would often exist for an individual source of major emissions

and

they frequently did not address the applicability of all other

CAA

or state (i.e., State

Implementation Program (“SW”)) requirements.8

The Title V operating permit program

ensured that

all ofa major source’s applicable state and CAA-related requirements would

be brought together into a single, comprehensive document.

In doing so,

the legislation

sought to

minimize the confusion brought about from the absence ofa uniform federal

permitting system.9

By trying

to breath life into the State operating permits beyond the

date ofthe Illinois

EPA’s permit issuance, Petitioner’s argument would actually prolong

one of the very problems

that the Title V permitting scheme

was meant

to

remedy.

As

a practical matter, Petitioner’s

requested relief belies the notion that former State operating permits

continue to govern the facility’s operations until the Board issues its

final ruling in this cause.

After all, it

is the

CAAPP permit issued

by the Illinois

EPA from which the Petitioner is seeking a

stay.

See,

David P. Novello,

The

New C/ean

Air Act Operating

Permit Program:

EPA ‘s

Final

Rules,

23

Environmental

Law Reporter 10080,

10081-10082 (February

1993).

~

/d.

13

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ELECTRONIC FILING,

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Petitioner

also mentions

in passing that the Illinois EPA’s failure to

provide a

sufficient statement ofbasis for the CAAPP permit is

another

reason for

staying

the entire

permit.

Petition at page

7.

Because Petitioner

treats

this issue

separately

in

its Petition,

the flhinois EPAwill not fully address the

merits

ofthe

argument

in

this

Motion.

However,

the

Illinois EPA will briefly respond to the issue as it relates to thePetitioner’s

request for stay.

The statement ofbasis envisioned by the statute isan informational requirement

that

is

meant

to facilitate

both

the public

and

USEPA’s understanding of thepermit

decision in the draft phase of

permitting.

See,

415 ILCS 5/39.5(8)(b)(’2004).

It is not a

part

of, nor does it otherwise affect,

the content ofthe CAAPP permit

and

it does not bind

or impose legal consequences in the same manner that a permit itself does. The Illinois

EPA generally does not believe that any perceived inadequacies in the statement of basis

can

lawfully

render

the entire CAAPP permit defective.

In this instance, the Petitioner identified its grievances with respect to the CAAPP

permit’s conditions notwithstanding the alleged flaws in the underlying statement of

basis.

To the extent that something contained in a

statement

ofbasis is found

objectionable, or

is left out altogether, the Illinois EPA suggests that the mechanism

for

challenging it

runs

to the underlyingpermit condition, not the statement itself.

The

Petitioner should not be heard to complain ofthe inadequacies ofthe statement when the

basis that gives rise to the appeal stems

from

a permit’s conditions, not the deliberative

thought-processes ofthe permitting agency.

As such, the Illinois EPAdoes not

construe

a statement ofbasis as affecting the validity ofthe final CAAPP permit nor as a

reason

for voidingthe illinois EPA’s final permit decision. Ifsuch challenges were recognized

14

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by the

Board,

theycould

serve as a pretext for preventing the final issuance of a CAAPP

permit and result in perpetual litigation over

a largely ministerial agency function,

The Illinois EPA is ultimately prepared to

argue that the statement ofbasis that

wasprepared in conjunction with the CAAPP permit

was

sufficiently adequate as to

comply

with

the Act.

Alternatively, the fllinois

EPA is prepared to contend that the

statement ofbasis requirement is predominantly procedural

in nature, is confined to the

preliminary stages ofthe permitting process and arguably lacks sufficiently intelligible

standards as to serve as a basis for enforcement.

In any event, the Board should deny the

Petitioner’s request for stay on any grounds relating to this issue.

On the whole, the

Petitioner’s charge that the statement ofbasis affectsthe entire permit is unsupported by

law and fails to demonstrate a probability ofsuccess on the merits ofthe

controversy.

ilL

Significance of prior Board rulings

The Board has granted numerous stays in past and pending CAAPP pennit

proceedings.

For the mostp~the extent ofthe relief

granted

has been a function of the

relief sought by the petitioning party.

In several cases, the Board has granted stays of the

entire CAAPP permit, usually doing so without much

substantive

discussion)°

Curiously, all excepting one ofthe prior cases involving blanket stays were brought by

petitioning parties represented by the same law firm.

In other CAAPP appeal cases,

the

Board granted stays for the.contested permit conditions, again mirroring the relief sought

‘°

See.

Lone Star

industries,

Inc.,

v. Illinois EPA,

PCB

No.

03-94, slip opinion at 2,

(January 9, 2003);

Nielsen

v.

Rain bridge,

L.L.C..

v.

Illinois

EPA,

PCB No. 03-98, slip opinion at 1-2 (February 6, 2003);

Saini-Gobain

Containers, Inc.,

v.

Illinois

EPA,

PCB No.

04-47, slip opinion at

1-2 (Noven,be 6,

2003);Champion Laboratories, Inc.,

v.

illinois EPA,

PCB

No.

04-65, slip opinion at

1

(January

8,2004);;

Midwest Generation,

L.L.C.,

v. Illinois EPA,

PCB No. 04-108, slip opinion at

I

(January 22, 2004);

Ethyl

Petroleum Additives, Inc.,

“.

illinois EPA,

slip opinion at

1

(February 5, 2004);

Board of Trustees

of

Eastern Illinois

University v. illinois EPA,

ItS

No. 04-110, slip opinion at

1

(February

5, 2004).

15

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by the petitioning party.”

In a few cases,

the

Board does not appear to have granted arty

stay protection

whatsoever,

as thepetitioning party apparently opted not to pursue such

relief.

12

In the majority ofthe afore-referenced cases, the Illinois EPA did

not

actively

participate in the stay motions sought before the Board due to the perennially-occurring

press of

other matters.’3

ft

doing so, theIllinois EPA

clearlywaived

any

rights to voice

objections to the stays sought

and

obtained in those cases.

Even in the absence ofa lack

of

resources,

it is doubtful that the illinois EPA would have articulated weighty concerns,

as presently argued, with

respect

to the stay relief requested in

earlier cases.

However,

following the Board’s last occasionto

act

on a blanket stay request in a CAAPP permit

appeal, Illinois EPA officials became

aware

ofthe potential implications posed by

stays

on the existing Title V

program

approval.’4

In thewake ofthis discovery, the illinois

EPA is

now

compelled to observe that the Board’s

earlier

decisions affording blanket

stays

to CAAPP permits arguablyfell short of exploring all ofthe relevant considerations

“

See,

Bridgesione/Fire.stone 0ff-road Tire Company v. illinois EPA,

PCB 02-31

at page

3 (November I,

2001);

PPG industries,

Inc.,

v. Illinois EPA,

PCB No. 03-82, slip opinion at 1-2

(February 6, 2003);

Abitec

Corporation

v. Illinois EPA,

PCBNo. 03-95, slip opinion at

1-2 (February 20, 2003);

Noveon,

Inc.,

v,

Illinois EPA,

PCB No. 04-102, slip opinion at

1-2 (January 22, 2004);

Oasis Industries, Inc., v. Illinois

EPA.

PCBNo. 04-116, slip opinion

at

1-2 (May6,2004).

12

See,

XCTC Limited

Partnership,

v.

Illinois EPA,

PCB

No.

01-46,

consolidated with

Georgia-Pac4/lc

Tissue, L.L.C.,

v. Illinois EPA,

PCR

No.

01-51;

General

Electric

Company v. Illinois EPA,

PCB No. 04-

115 (January 22, 2004).

“

The

Illinois EPA did file a joint motion in support

of

a stay request seeking protection

for contested

conditions of a

CAAPP permit.

See,

Abitec Corporation

v, illinois EPA,

ItS

No, 03-95, slip opinion at

I

-

2 (February 20, 2003).

~

Jim Ross, a former Unit Manager

for the CAAPP Unit of the Division of Air Pollution Control’s

Permits Section, received an inquiry from a USEPA/Region V representative in March of 2004 pertaining

to the broad natwe ofthe stays obtained in CAAPP pennit appeal proceedings before the Board.

This

initial inquiry led to further discussion between USEPA/Itegion V representatives and the Illinois EPA

regarding the

impact ofsuch stays

on the severability requirements for CAAPP permits set forth in 40

C.F.R. Part 70 and the Illinois CAAPP.

(See,

Supporting Affidavii of

Jim Ross attached to thisMotion).

16

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necessary to

the analysis.

Accordingly, the Illinois EPA urges the Board to reflect upon

additional factors that have not previously been addressed to date.’5

iv.

Statutory objectives

of

CAAPP

and common

attributes ofpermit

appeals

As discussed earlier in this Motion, the Illinois CAAPP

commands

the illinois

EPA to incorporate conditions into a CAAPP

permit

that address requirements

concerning the “severability” of

permit

conditions.

See, 415 JLCS 5/39.5(7)(i) (2004).

To

this end,

every CAAPP permit

is

required to contain a permit condition severing those

conditions challenged

in a subsequent permit appeal

from the other permit conditions in

the permit.

The severabilityprovision is prominently displayed in the Standard Permit

Conditionsofthe Petitioner’s CAAPP permit.

See,

Standard Permit Condition 9.13.

It

should also be noted that the language from the Act’s CAAPP program mirrors the

provision promulgated by USEPA in its regulations implementing Title V ofthe CAA.

See,

40 C.F.R. §70.6(a)(5)(July

1, 2005 edition).

As is evident

from

the statutory

language,

the obvious

legislative intent

for this

CAAPP provision is to “ensure the continued validity” ofthe ostensibly

larger body

of

permitting

requirements that are

not being challenged on appeal.

The use ofthe word

“various” in describing those conditions that are severable is especially important when

compared

with the later reference in the same sentence to “any portions” of the permit

that

are

contested.

Because the commonly understood meaning of the adjective

“various” is “of diverse kinds” or “unlike; different,” this wording demonstrates

a

legislative intent to contrast one diseernable group of permit conditions (i.e., uncontested

~

It

is

noted that

the Board’s prior rulings regarding blanket stays ofCAAPP

permits

have been

granted

contingent upon

the

Board’s finalaction

in the

appeal

or

“until

the

Board orders

otherwise.”

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conditions)

from

the other

another

(i.e., contested

conditions).

See,

The American

Heritage Dictionary, Second College Edition; see also,

Webster’s New

World Dictionary,

Third College Edition

(describing

primary

use of the term as “differing one

from another,

ofseveral kinds”).

Given the clear absence of

ambiguity

with this statutory text, no other

reasonable meaning

can

be attributed to

its language.

The Illinois EPAreadily concedes that the permit content requirements ofthe

CAA and the Illinois CAAPP

are

not directlybinding on the Board.

However, while the

illinois EPA’s mandate under Section 39.5(7)(i) ofthe Act’s CAAPP

program does

not,

on its

face, affect the Board, the provision could arguably be read as a limited

restriction

on theBoard’s discretionary stay authority in CAAPP appeals.’6

Implicit in the statutory

language is an unmistakable expression

aimed at preserving the validity and effectiveness

of some segment ofthe CAAYP permit during the appeal process.

This

legislative

goal

cannot be achieved ifblanket

stays are the convention.

Where

the obvious intention of

lawmakers

could be thwarted, reviewing

courts must

construe a statute in a mannerthat

effectuates its

object

and purpose.

See, F.D.I.C.

v. Nihiser,

799 F.Supp.

904

(C.D.

ill.

1992);

Castaneda

v. illinois Human Rights Commission,

547 N.E.2d 437 (flI.

1989).

In

this

instance,

the Board should recognize an

inherent

limitation of

its

stay authority by

virtue

of the illinois CAAPP’s severability provision.

At the very least, the existenceof

theprovision should give pause to the Board’s recent approach in

evaluating stays in

CAAPP

permit

appeals.

Id

Any

such

restriction may

not be absolute, as the

Act’s

permit content

requirement

does

not necessarily

rule

out

the

potential merits

of a

blanket

stay where a permit is challenged in its

entirety.

As previously

mentioned,

the

Illinois

EPAdisputes the merits of

Petitioner’s argument relating

to a purported deficiency

in

the CAAPP permit’s

statement ofbasis.

18

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It is noteworthy that

one ofthe chiefgoals ofthe CAA’sTitle V

program

is to

promote public participation, including the

use

ofcitizen suits to facilitate compliance

through enforcement. ~ The severability requirement of the Part 70 regulations, which

formed the regulatory basis for Section 39.5(7)(i) ofthe illinois CA.APP,

can

be seen as

an extension of

this

endeavor.

Blanket stays ofCAMP permits could arguably lessen

theopportunities for citizen enforcement in

an

area

that is teeming with broad public

interest.

Moreover, the cumulative effect of stays

sought

by Petitioner

and

other coal-

fired CAAPP permittees in otherappeals would cast a wide net. 3lanket stays of these

recently-issued

CAAPP

permits would effectively shield an entire segment ofIllinois’

utilities sector from potential enforcement

based

on Title V permitting, which

was

meant

to provide a more convenient, efficient mechanism for the public to seek CAA-related

enforcement.

One

last consideration in this analysis is the deliberate, if not time-consuming,

pace ofpermit appeals in general.

From past experience, the Illinois EPA

has observed

that many permit appeals are of a type that

could more aptly be described as “protective

appeals.” These types of

appeals are

frequently filed because a particular permit

condition affects an issue relating to on-going orfuture

enforcement

proceedings.

Alternatively, these cases may entail

some other kind of contingencynecessitating

additional permit review, a new permit application

and/or

obtaining a revised permit from

the illinois EPA.

Only

rarely does a pennit appeal actually

proceed

to hearing.

Based on the Illinois EPA’s estimation, nearly all

ofthe

CAAPP

permit appeals

filed

with

the Board to date could be aptly described as “protective appeals.”

While a

“

See,

David

P. Novello,

The New

Clean

Air

Act Operating Penn

it

Program:

EPA ‘s

Final Rules,

23

Environmental Law

Reporter 10080,

10081-10082

(Februasy

1993).

19

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handful ofcases have beenvoluntarily dismissed from the Board’s docket, several of

these cases are,

and

will

remain,

pending with the

Board

for months

and/or

years to

come, in

part,

because there is no ability to resolve

them

independent oftheir related

enforcement or permitting developments.

As the Illinois EPA is often an obligatory

participant in many ofthese types ofcases, this argument is not meant to

condemn

the

practice.

Rather, the relevant pointis that significant portions of a CAAPP permit stayed

in

its entirety

will be delayed

from taking effect,

in spite ofbearingno relationship to the

appeal or its ultimate outcome.

To allow

this under circumstances where

petitioning

parties

seldom appear to desire their “day in

court” strikes

the Illinois EPA as needlessly

over-protective.

CONCLUSION

For the reasons explained above, the Illinois EPA moves the Board to deny the

Petitioner’s request for a stay ofthe effectiveness of the CAMP permit in

its

entirety.

Respectfully submitted by,

ILLINOIS ENVIRONMENTAL

PROTECTIONAGENCY,

Robb H. Layman

~J

Assistant Counsel

Dated: November

18, 2005

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

(217) 524-9137

20

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STATE OF U.SLIINOIS

COUNTY

OP SANGAMON

•

AFFIDAVIT

•

I, Jim Ross, being first duly sworn, depose

and

state that the following statements

set forth in

this instrument are true

and

correct, except as to matters

therein stated to on

information

and

beliefand, as to such matters, the undersigned certifies that he believes

the same to be true:

1.

I arv.currently employed by the Illinois Environmental Protection Agency

~‘lllinoisEPA”) as a Senior Public SeMb~.Adminisfrator

professional engineer.

During

the early

part

of 2004,1

was

the Manager of the

Clean Air Act Permit Program

(“CAAPP”)

Unit

in the Division ofAir Pollution Control’s Permit Section, whose offices

are located at

1021 North GrandAvenue East, Springfield, Illinois.

I have been

employed with the illinois EPA since May 1988.

2.

As

part

ofmy job responsibilities, I participated in frequent teleconference

calls with representatives from the United States Environmental Protection Agency

(“USEPA”) at Region V in Chicago, Illinois,

involving various ~ending CAMP permit

applications

and

issues

pertaining

to the administration ofthe CA.APP

program.

By

virtue

ofmy involvement in the

CA.APP permit

reviewprocess, I am familiar

with

communications between USEPA/Region V

and

the illinois EPA in March of2004

concerning an issue relating to stays obtained in CAAPP permit appeals befó~e

the

Illinois Pollution Control Board.

The issue was

initially raised

by a representative from

USEPAIRegion V, who expressed concern about theimpact ofsuch stays upon the

severability requirements of40 C.F.R. Par

70 and the Illinois CAAPP.

3.

I have read the Motion

prepared

by the Illinois EPA’s attorneys relating to

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this

matter and,

further, find

that the

facts set forth in

said responses and

answers

are true,

responsive

and

complete to the best of my knowledge

and

belief.

Furth~

Subscribed

and Sworn

To Before Me

this

Day ofNovember 2005

OFFICIAL

SEAL

~

BRENDA BOEIINER

:

~ICTwn~uc,sTAmoPIwNOlS

sayeth not.

R

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CERTIFICATE OF SERVICE

I hereby

certify

that on the

18th

day

ofNovember 2005, I did send, by electronic

mail with prior approval, the following instruments entitled APPEARANCES,

MOTION IN OPPOSITION TO PETITIONER’S

REQUEST FOR STAY and

AFFIDAVIT

to:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

100 West Randolph

Street

Suite 11-500

Chicago, Illinois

60601

and a true and correct

copy of the same foregoing instrument, by First Class Mail with

postage thereon fully paid

and

deposited into the possession ofthe United States Postal

Service, to:

BradleyP.

Halloran

Sheldon A. Zabel

Hearing Officer

Kathleen

C. Bassi

James R. Thompson Center

Stephen J. Bonebrake

Suite 11-500

JoshuaR. More

100 West Randolph

Street

Kavita M. Patel

Chicago, Illinois

60601

SchifiHardin,

LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 6060

Robb

H. Layman

Assistant Counsel