ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
ORE TH
N
T
OF
:
PROPOSED NEW 35 ILL.ADM.CODE PART 225
CONTROL OF EMISSIONS FROM
LARGE COMBUSTION SOURCES
To
:
Dorothy Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
Gina Roccaforte, Assistant Counsel
Charles Matoesian, Assistant Counsel
John J. Kim, Managing Attorney, Air
Regulatory Unit
Division of Legal Counsel
Illinois Environmental Protection Agency
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
NOIS POLLUTION CON OL BOARD
NOTICE OF F
ING
Ma e Tipsord
ng 017 ice
Illinois Pollution Control Board
James R. Thompson Center
100 W. Randolph
Suite 11-500
Chicago, Illinois 60601
Office of Legal Services
Illinois Department of Natural Resources
524 South Second Street
Springfield, Illinois 62701-1787
PLEASE TAKE NOTICE that we have today filed with the Office of the Clerk of the
Pollution Control Board DYNEGY, MIDWEST GENERATION, and SIPC'S MOTION TO
REJECT REGULATORY FILING; and the APPEARANCES of SHELDON A. ZABEL,
KATHLEEN C. BASSI, STEPHEN J. BONEBRAKE, JOSHUA R. MORE and GLENNA L
.
GILBERT, copies of which are herewith served upon you
.
/s/
Kathleen C . Bassi
Kathleen C. Bassi
Dated: March 15, 2006
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
C F
DIN LLP
Attorneys for Dynegy Midwest Generation, Inc, Midwest Generation, LLC, and Southern
Illinois Power Cooperative
Sheldon A. Zabel
Kathleen C. Bass]
Stephen J. Bonebrake
Joshua R. More
Glenna L. Gilbert
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5567
FAX: 312-258-5600
C112v 1391614.1
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE
ARCH 15, 2006
C
TIFICATE
S
VICE
I, the undersigned, certify that on this 15' x' day of March, 2006, 1 have served
electr(nically the attached DYNEGY, MIDWEST GENERATION, and SIPC'S MOTION TO
REJECT REGULATORY FILING; NOTICE OF FILING; and APPEARANCES of SHELDON
A. ZABEL, KATHLEEN C. BASSI, STEPHEN J. BONEBRAKE, JOSHUA R. MORE, and
GLENNA L. GILBERT, upon the following persons :
Dorothy Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
and by first-class mail with postage thereon fully prepaid and affixed to the following persons
:
Gina Roccaforte, Assistant Counsel
Office of Legal Services
Charles Matoesian, Assistant Counsel
Illinois Department of Natural Resources
John J. Kim, Managing Attorney, Air
524 South Second Street
Regulatory Unit
Springfield, Illinois 62701-1787
Division of Legal Counsel
Illinois Environmental Protection Agency
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
Marie Tipsord
Hearing Office
Illinois Pollution Control Board
James R. Thompson Center
100 W. Randolph
Suite 11-500
Chicago, Illinois 60601
/s/
Kathleen C . Bassi
Kathleen C. Bassi
Dated: March 15, 2006
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
SCHIFF HARDIN LLP
Attorneys for Dynegy Midwest Generation, Inc, Mid est Generation, L C, and
Southern Illinois Power Cooperative
Sheldon A . Zabel
Kathleen C . Bassi
Stephen J. Bonebrake
Joshua R. More
Glenna L. Gilbert
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5567
FAX: 312-258-5600
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
FORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF
:
PROPOSED NEW 35 ILL.ADM.CODE PART 225
PCB R06-25
CONTROL OF EMISSIONS FROM
LARGE COMBUSTION SOURCES
APPEARANCE
I hereby file my appearance in this proceeding, on behalf of Dynegy Midwest
Generation, Inc ., Midwest Generation, LLC, and Southern Illinois Power Cooperative
.
Dated: March 15, 2006
Sheldon A. Zabel
Schiff Hardin LLP
6600 Sears Tower
Chicago, IL 60606
(312) 258-5540
/s/
Sheldon A. Zabel
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
0
T E ILLINOIS POLL
ON CONTROL BOARD
IN THE MATT R OF :
Dated: March 15, 2006
PROPOSED NEW 35 ILL.ADM.CODE PART 225
)
PCB R06-25
CONTROL OF EMISSIONS FROM
)
LARGE COMBUSTION SOURCES
)
A'
CE
I hereby file my appearance in this proceeding, on behalf of Dynegy Midwest
Generation, Inc., Midwest Generation, LLC, and Southern Illinois Power Cooperative
.
/s/
Kathleen C . Bassi
Kathleen C. Bassi
Schiff Hardin LLP
6600 Sears Tower
Chicago, IL 60606
(312) 258-5567
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
MATTER OF :
PART 225
PCB R06-25
PROPOSED NEW 35
ILL.ADM.CO
CONTROL OF EMISSIONS FROM
LARGE COMBUSTION SOURCES
APPEARANCE
I hereby file my appearance in this proceeding, on behalf of Dynegy Midwest
Generation, Inc., Midwest Generation, LLC, and Southern Illinois Power Cooperative
.
/s/
Stephen J .
Bonebrake
Stephen J. Bonebrake
Schiff Hardin LLP
6600 Sears Tower
Chicago, IL 60606
(312) 258-5646
Dated: March 15, 2006
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
RE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF
:
PROPOSED NEW 35 ILL.ADM.CODE PART 225
PCB R06-25
CONTROL OF EMISSIONS FROM
LARGE COMBUSTION SOURCES
APPEARANCE
I hereby file my appearance in this proceeding, on behalf of Dynegy Midwest
Generation, Inc ., Midwest Generation, LLC, and Southern Illinois Power Cooperative
.
Dated: March 15, 2006
/s/
Joshua R . More
Joshua R. More
Schiff Hardin LLP
6600 Sears Tower
Chicago, IL 60606
(312) 258-5769
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF
:
PROPOSED NEW 35 ILL.ADM.CODE PART 225
CONTROL OF EMISSIONS FROM
LARGE COMBUSTION SOURCES
Dated: March 15, 2006
APPEARANCE
I hereby file my appearance in this proceeding, on behalf of Dynegy Midwest
Generation, Midwest Generation, LLC, and Southern Illinois Power Cooperative
.
Glenna L. Gilbert
Schiff Hardin LLP
6600 Sears Tower
Chicago, IL 60606
(312) 258-5804
06-25
/s/
Glenna L. Gilbert
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15 . 2O08
TfIE ILLINOIS POLLUTION CONTROI
IN TIIE MATTER OF :
PROPOSED NEW 35 ILL.ADM.CODE PART 225
CONTROL OF EMISSIONS FROM
LARGE COMBUSTION SOURCES
MOTION TO RI -'JFCTREGULATORY FILING
NOW COME DYNEGY MIDWEST GENERATION, INC., MIDWEST
GENERATION. LLC, and SOUTHERITNILLINOIS POWER COOPERATIVE (tile "Group"),
by and through their attorneys, ScbiO[Bardin, LLP, and move the Illinois Pollution Control
Board ("Board") to / ject the Illinois Environniental Protection Agency's ("Agency") proposal
to add certain new rules to be included in 35 Oi ./\dmo.Code Part 225, Subpart B and pertinent
sections of Subpart A ("Mercury Proposal") purportedly to implement Section 9A
0
of the Illinois
Environmental Protection Act ("Act") and allegedly authorized by Sections 27 and 28 .5 of the
Act. The Mercury Proposal does not implement or qualify under Section 9 . 10, does not meet the
statutory prerequisites of Section 28 .5 necessary to allow fast-track rulemaking under Section
28.5. and should be rejected with leave to refile under Section 27, Alternatively, if the Board
oocopLytbcMorcuryPnopusuluudcrSeuduu27u1!biudmo,LhcBoazdubnuld/cgucst1ba1ibe
Department of Commerce and Community Affairs ("DCCA") perform a full and formal
economic impact study of the Mercury Proposal pursuant to Section 27(b)(1) of the Act
.
The
INTRODUCTION
f\~onoy`oefforts tofast-track Oheb~ercuryProposal noderScudmo28 .5uod
purportedly to "implement" Section 9 .10 are Rau}}y Hawed. The proposal fai Is to satisfy key
)
PCB R06-25
statutory prerequisites that wot
issued the C
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15 . 2O06
under those sections. The Board must therefore reject the Agency
Not only is that
federal in
a
died by the Act, but it makes good sense under the
adically from the recently
iry rule, i.e., the Clean Air Mercury
Mercury Rule ("CAMR") promulgated at
the Board to accept and proceed with a rulemaking
eqnes1to do so
.
70Fcd-Kcy 20605
(May
18, 2005) .
The CAMR does not justify nor compel the Agency's very
different proposal. Under these circumstances, the proposal should be subject to a
comprehensive and deliberate rulernaking proceeding under Section
27
of the Act .
0nMov 18, 2005,
the United States Environmental Protection Agency ("U.S . EPA")
ich establishes "standards of performance"
perfon-nance" limiting mercury emissions
from new and existing coal-fired electric steam generating units, usdefined
iu42(J.D.C./l. §
7411 ,mid creates a market-based cap-and-trade program that will reduce nationwide emissions
of mercury from such sources in two distinct phases
.
See
70Fed, Reg .
28605
(May
l8,2006) .
The first phase national cap is 38 tons, and the thS . EPA anticipates that most emissions
reductions during this first phase will result from "co-beriefits" of the Clean Air Interstate Rule
(^^C&!f[")(7OPcd.Dcg .
25161
(May
12, 2005)) -
that is, mercury reductions achieved by
reducing sulfur dioxide ("S02") and nitrogen oxides ("NOx") emissions under CAIR. 70
Fed.Reg. at
28606 .
The first phase becomes effective in
2010 .
Id.
In the second phase, due in
2018, coal-fired power plants will be subject to a second cap, which will further reduce mercury
emissions to
15
tons nation-wide uponfull implementation. Id.
In the CAMR, U .S. EPA has assigned each state and two tribes emissions"budgets" for
mercury based upon the criteria described in the Preamble to the rule . Each state must submit u
state plan to the U .S. EPA for approval deta
mercury from coal-fired power plants . 70Fed. Reg. u12862!
.
CAMR includes a model trading program which states may join by adopting the model
trading program in state regulations or by adopting adopting regulations that mirror the necessary
components of the model trading program. 70 Fel Reg at 2862? Ile model 1ralng program
is intended to reduce the overall amount of emissions by requiring sources of mercury
to hold allowances to cover their emissions on a one-for-one basis, by limiting overall
allowances so that totall embsions cannot exceed specified levels (the cap) and by reducing the
0
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15,2006
h
will meet its budget for reducing
ss than the amount of emissions actually emitted, or allowed to heem itted, at the
actually emitted,
start of
the program. Id. The model trading program gives regulated sources flexibility in attaining
Not only does the Mercury Proposal fail to adopt CAMR's model trading program,
however, but it also changes the emissions reduction percentages and the ti
eline of the
carefully conceived CAMR . On January 5, 2006, Illinois' Governor Blagojevich announced a
proposal that would mandate reductions in mercury emissions fi-om coal-fired power plants by
90 percent by ouid-year 2009 . an eighteen-month acceleration of the C/\M}Idmetub!e and a
dramatic increase in the reduction levels . Subsequently, the Agency commenced a brief two-
month outreach with affected companies and other interested persons, On March 14, 2006,
upproziooole!ytwoouuotbyaftezduuGovecoor`muunounccrnouLtbc/4gcncyfiledtbcMoroory
Proposal. The Mercury Proposal effectively imposes more stringent, less flexible, and more
costly requirements than the CAMR, primarily because it does not include the trading program
that is the centerpiece of the CAMR. In fact, the Mercury Proposal raises significant technical
achievability and cost concerns that were addressed but could not be solved in the federal
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15,2006
rulemnkiniz record for the CAMD.]hose differences and related concerns should be carefi
evaluated durng a
and deliberative
comprehensive
nd
process. The Agency attern
consideration of and
does not qua
ction could have the effect of reducing the tit
l
towever, citing Section 285 as authority for its proposal . Proceeding
aL
e upon Sections 9.10
10 and 2 8 .5 is erroneous .
.- Section 9. 10, nor does it meet the statutory requirements tit
orcouishento proceeding as uod emaking action under Section 28 .5. Although
The Board should reject the Agency's Mercury Proposal .
and opportunity for adequate
Proposal
Mercury
sto
Proposal could be processed under Section 27, because it is improperly premised upon and
contains references to Sections 9.10 and 215, it should be rejected with leave to refile
only under
incorrectly
Section 27. Alternatively, the Board could accept the filing but for proceedings only
under Section 27, striking all references to Sections 9 . 10 and 28.5 and requiring an economic
impact study
.
Io qualify under Section 9.10,
the Mercury Proposal must effectuate a finding of the report completed by the Agency pursuant
to that section. It does not
.
For uodeozukiog proposal to proceed pursuant to Section 28 .5 of the Act, the proposal
must be a regulation that is "required to be adopted" by the federal Clean Air Act (^C/\/\")`42
U.S .C. §§ 7401-7671q . Nothing in the Mercury Proposal meets that test as it is defined in the
Act. 'Thus, as explained in more detail below, the Mercury Proposal should be rejected, with
leave to refile under only Section 27 or, alternatively, treated as a proposal exclusively under
Section 27 . If the Board selects the alternative, all references to Sections 9.10 and 28 .5 should
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15,2006
be stricken and the Board should request DCCA to conduct a Study of the economic impact of
the proposed ru
pursuant to Section 27(b)(l) of the Act
.
THE AGENCY'S MERCURY PROPOSAL DOES NOT
FINDINGS IN ITS REPORT PREPARED PURSUANT TO
EFFECTUAI
SECTION
THE ACT .
The Agency erroneously relies upon Section 9,10 as i
its Mercury Proposal. See"AUTFIORITY" in proposed rule. Yet, in the Statement of Reasons
filed as part of the Mercury Proposal, the Agcncy does not state that it is implementing Section
9. 10 as set forth in the AUTHORITY for the rule . In fact, Section 9 . 10 does not apply to the
proposal, and there is no basis to conclude that any rulemaking proceeding with respect to the
proposal could proceed pursuant to Section 9 .1 t as stated in the Statement of Reasons at page 1 .
Addressing various concerns regarding impending requirements applicable to coal-fired
power plants, the General Assen-ibly adopted Section 9. 10 of the Act in 2001 in order to ensure
that the state proceeded with control requirements only after carefully considering the impacts of
the facilities on public health as well as the potential impact of the requirements on energy
supply, reliability, and costs
.
See415ILCS5/9.10(a)(10) .
Consistent with this policy, the
General Assembly ordered the Agency to study these impacts and to report back, to the House
and Senate Committees on Environment and Energy. 415 11,[S 5/9 . 10(b) .
With respect to
proceeding with controls in Illinois, Section 9 .10 of the Act states, "The Agency may file
proposed rules with the Board to effectuate its findings
Environment and Energy and the House Committee on Environment and Energy in accordance
with subsection (b) of this Section." 415 ILCS 5/9. l0(d). (Emphasis added,)
The Agency rnade no "findings" regarding mercury in its report to be implemented under
Section 9. 10 for its Mercury Proposal . In September of 2004 the Agency submitted its report,
Fossil Fuel-fi7redyovvor Plants: Report to the house and Senate Environment and Ezer~v
5
ion authorityfor
Cooonity eu /
(the "9 . 1
0 Report"),
to the House a
pursu
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15 . 2O00
oSection9.10. The
9.10
Report
discussed whether Illinois should address "further
potential restrictions" on certain specified emi
ower grid, the impact on consumer utility rates, and the impact on jobs and
economy .. the Agency made no finding that there should be further state
rcstricfions
on power
plant mercury emissions beyond federal requirements
.
be "'irresponsible" to "movie] forward with a state-specific regulatory or Ii
without fully understanding all of We critical impacts on jobs and Illinois' economy overall as
Furthermore, the Agency recommended that, in order to fully assess the appropriate timing and
'
scope of emission reductions from power plants in Illinois, it was necessary to
conduct
'
"independent, full and complete economic assessments
.
.
. on the full economic impacts in
Illinois .
.
. . The impact to Illinois' coal jobs and power industry jobs must be fully understood,"
Id.
o170
.
The Agency formulated no final recommendations or findings regarding potential new
restrictions on power plant emissions. More specifically, the Agency formulated no
recommendation or finding related to mercury emissions from coal-fired power plants that -would
make it necessary or appropriate for the state to impose state regulations for mercury emissions
from coal-fired power plants, let alone at a level requiring a 90 percent reduction in mercury
emissions, Nor was there aDnding to support the Agency's rejection of the CAMR cap and
/ Illinois
! Protection Agency,
Fossil Fuel-Fired P
o
w
er
Plants: Report to
the lioi4,yeciiid,~enateF-nviroii) ,iieiitat7dEtiergyCoti7mitlees
.
(September 2004)
.
6
r
I
Environment and Ener~,
v
Committees
power plants, including mercury
.
,
ed.tbc Agency stated that I
ion strategy
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15,2006
trade program. Thus. there was no "finding" in the 9
.
10 Report
concerning mercury emissions
that can be "effectuated" in the Mercury Proposal
.
For this reason, the Agency cannot rely on the Section 9 . 10 report as the authority for the
proposed rules to reduce mercury emissions from coal-fired power plants
.
the proposal to the extent the proposal relies on or is premised upon Section 9 . 10 as authority
.
IT .
THE AGENCY DOES NOT HAVE THE AQll!(}RITY To
OABD HAVE AUTHORITY TO ACCEPT THE PROP
TO SECTION 28.5 OF THE ACT .
In its proposal. the Agency incorrectly states the rule is authorized pursuant to Section
Agency
28.5 ofWe Put Statement
proposal of Reasons, pp
. 1, 17-23 . The
fails to satisfy the clear and
express statutory prerequisites to proceed under Section 28 .5, and the Agency's filing
reliance upon Section 28 .5 should be rejected by the Board
.
Section 28.5 of the Act governs
"fast-track" rulemaking proceedings . A "fast-
track" m\cmaking proceeding "is a proceeding to promulgate am!e that the CAAA requires to
be adopted ." 5 II.C8 § 4\5/2&5(o). The terni
requires to be adopted,
as defined by the Act,
"refers only to those regulations or parts of regulations for which the United States
Environmental Protection Agency is empowered to impose sanctions against for failure
to adopt such rules." Id'. (Emphasis added .) Failure to adopt the Mercury Proposal, which
purports to satisfy the state's mercury emission reduction requirements mandated by the CAMR,
would not be grounds for U .S. EPA sanctions. Accordingly .. the Mercury Proposal cannot
proceed under Section 28 .5 .
The CAMR was finalized by U.S. EPA pursuant to Section 111 of the CAA. U.S. EPA
can issue standards
regulations or parts of regulations R, mlkh do Urii a
otperformance iorexisting sources in a source category only if it has
established standards of yorfonnumcu for new sources in that same category under Section lll (b)
and only for certain pollutants
.
See
42D.B.C. § 7411 (d)(1) .
Section 111(d) authorizes U.S. EPA
7
"
d
S
to promulgate standard
plan-Like process, which r
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
0
q
e that states must adopt through a state implementation
;tate rulemaking action followed by review and approval of
state plans by U .S. EPA
.
Id.
If a state fails to submit a satisfactory plan, U.S. EPA has the
authority to prescribe a plan for the state .
See
42 U.S T . § 7411(d)(2)(A)
.
The prescription of a
plan by U.S. EPA is not a sanction under the
CAA
or under Section 28.5 of the Act, as discussed
in more detail below.
Use of the procedures in Section 28.5 of the
Act is
limited to regulations for which U .S
.
"is empowered to impose sanctions." Any power or authority of U .S. EPA to impose
sanctions against a state for failure to adopt an air quality rule is derived from the CAA
.
Therefore, to understand the limitation on the use of the Section 28 .5 rulemaking procedure, one
must refer to the sanction provisions of the CAA
.
Sanctions under the CAA may be imposed by U .S. EPA only as set forth in Section
179(b) or 110(m) of the CAA . 42 U.S.C. §§ 7509(b) and 7410(m). respectively. Neither of
those provisions authorizes U .S. EPA to impose sanctions if the Board does not promulgate as a
final rule the Mercury Proposal, or for that matter, any other mercury emission limits as required
by the CAMR
.
Pursuant to Section 179(b), sanctions may be imposed for a state's failure to implement a
"plan or plan revision under [subpart D of the CAA] (or required in response to a findin
substantial inadequacy as described in section 7410(k)(5) of [the CAA])." 42 U.S.C. § 7509(a)
.
Subpart D addresses issues regarding nonattainment and the criteria pollutants, not mercury
.
Under Section 110(k)(5) of the CAA (42 U .S.C. § 7410(k)(5)), if U.S. EPA finds that the
applicable implementation plan is inadequate to attain or maintain the relevant national ambient
air quality standard ("NAAQS"), then sanctions may be imposed under Section 179(b) of the
8
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15,2006
CAA. There is no N&A08~~~~. Moreover, U .S. EPA has made no findings of
substantial inadequacy as described in Section I I 0(k)(5) of the CAA,
0
mercury does not come
n
9
or does it have the
o do so with respect to mercury . Mercury is not a criteria pollutant, Controlling
rt Dofde
and, there
-fore, is not
subject to the provisions of Section I 10 . Accordingly, U.S. EPA does not have authority to
Section 179(b) should the Board not adopt the Mercury Proposal as a
impose sane
final rule
.
Nor could U.S. EPA impose sanctions under Section lI0(m) .5ectim!l0(m)authorizes
8.3, EPA to impose the sanctions listed in Section 179 for failing to implement a state
implementation plan ("SIP"). ~
e
x42[J.b.C.874!A(m). However, Section I 10(m) is irrelevant
here because, contrary to the Agency's assertions in the Statement of Reasons, the Mercury
Proposal is not a SIP or part of a SIP
.
Under Section 111, the Administrator may -prescribe regulations which shall establish a
procedure similar totbu1pnnvldcdbyscodoo[ll0uftbmC}\A}
.
.
.
." 42\J,S.C. 874ll
.
(Emphasis added) Section ll l is u"SlP-Uko"process but not a SIP as defined tinder Section
llO. Rather, Section lii is in subchapter 1, Part A of the CAA . Federal regulations adopted
pursuant to Section 111 are subject to neither Section 110 nor Section 179
. Section
l
like
Section 110, does not empower l} .8
. EPA to impose sanctions under Section 179 for a state's
failure to implement a plan . Pursuant to Section 111, the only remedy that U .S. EPA has against
a state that fails to i
aplun is to prescribe uplan for the state . Joe 42 U .S.C. §
7411(d)(2). That is not a sanction as defined by the
CAA,
or within the meaning of Section 28.5
o[ibcAct.
would be r
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15 . 20O6
The
asserts three arguments why, in
Agency
view, U.S. EPA has the authority to
impose sanctions if the Mercury Proposal is not adopted . Statement of Reasons, pp 2002,
'These arguments are without merit
.
the Agency makes a vague and general assertion that, if the Mercury Proposal is not
Q.8. EPA may reduce grants under Section 105 of the CAA and, according to the
Agency, that any such reduction is a sanction within the meaning o[8cdioa28 .5'o[1he Act
.
Statement of Reasons, p. 20. The Agency, however, fails to explain what portion of the grant
e
why any such reduction is considered a sanction under the CAA, or the
authority for any such reduction . The cases cited by the Agency do not address Section 105,
The Agency seems to imply that U .S. EPA would reduce grants under Section 105(a)(1) for
administering a mercury program if the Board does not adopt the Mercury Proposal . That
argument, however, is both speculative and flawed . The Agency already administers other
z programs under a delegation agreement with U.S. EPA, The Agency has failed to
ain why it could not implement the CAMR under the existing delegation agreement with
U.S. EPA or under an amendment to it. Finally, as discussed above, the availability of sanctions
for state failures to act are specifically addressed in Section 179(a) of the CAA, and applicable
sanctions, when triggered under Section 179(a), are set forth in §
179(b) . For
the reasons
discussed above, none of the sanctions under SeWon 179 can be imposed for failure to adopt
regulations implementing programs under Section ilI(d) .
The Agency argues next that the power of O.S. EPA to implement the CAMR, if the
Mercury Proposal is not
is the power to impose a sanction. State
c
of Reasons, p .
21. The
relies upon
Virginia v. Browner,
80 F.3d 869 (4t1
Agency
Cir. 1996), but that case
2
New Source Perforrriance Standards, 40 CFR Part 60
.
1 0
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15,2006
provides no support for the Agency's argument. The
Virginia court's
focus was on
constitutional questions related to a state's failure to implement a permitting program under Title
V of the CAA, a program separate and distinct from Sect :ion I 11 . In the context of cons6wtional
arguments concerning the ramifications of that fai
connection with its description
description o[ [LS . EPA's power to imple
Section 502(d) of the CAA
.
Virginia,
88E3du1881 Section 5B2(d) o[dze C/\/\
specifically addresses "sanctions'^ for a state*s failure to implement a Title V pern
-iitting prog
and it specifically refers to the sanction provisions of Section 179 . As discussed above, Section
111(d) does not use the term
sanctions
or rebr to Section 179 . Further, even if possible
U.S.EPA action under Title V, an entirely separate prograrn, were relevant to whether sanctions
could be imposed in connection with implementing the CAMR under Section 111(d), the
question before the court was not whether O .S. EPA action to implement oTdlc V program was
riction!`as defined by the CAA and Section 28 .5,The question before the Board . The court,
'
]l
u
0
termsonc
I
instead, addressed whether the effect of such action was constitutional. Whatever the court may
have labeled the impact of such action in assessing constitutional argurnents concerning that
action
ouudcr adjfferen1 CAA prograrn, that label is not relevant to, and is certainly not
controlling on, whether sanctions, as defined by the CAA ., may be imposed by U .S. EPA if the
s
Mercury Proposal is not adopted
.
Finally, the Agency cites to two rulemakings required by
[].8
. EPA pursuant to Section
\!l(d) uftbcCAA
:
In the Matter o/. Municipal Solid Waste Landfills --Non-Afethane Organic
Congrounus 35 DlAdm. Code 20/./OJ' 20//
46,
oadPart 220(B98-2Q) und8v/6e&/u//erof
/e Incinerators Ac/option of35 &[Adin. Code
229
U09-l0,
-1
Moreover, the Fourth Circuit's decision is not controlling in Illinois, which iswithin the
Seventh Circuit
.
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15, 2006
which were proposed by the Agenc
Je Board specifically address the issue of s
the question never arose
t
' 42 US.C. §§ 7501-7515 and 7411, respectively
.
rsuanLto 8oaoo28A Both rulema
by the Board and proceeded as Section 28 .5 rulemakings, 11o
12
R99-1 O,the Board should have found, as it must here, that rules
e
Te accepted
er, in neither rulemaking did
Board never found that the imposit
. Those rulemakings do not sene as precedent
here, as the questions raised here were never addressed . I-lad they been raised in R98-28 and
a federal program where Illinois failed to adopt regulations comprised oounodoo . Mnreovor,
ced under Section 111(d) of
the CAA are not properly before the Board pursuant to Section 28 .5 of the Act because they do
not satisfy the statutory prerequisites for orulemaking to proceed under Section 28
.5
.
Tbc/\gcooya]oolists ` ioIbotoo\c4o[thc8<atenzcotofKcuuoow,pcd)opeibccnto:
gamut of rules proposed and adopted under Section 28 .5 of the Act. Of the rulemak
-ings listed,
only one is not SIP-related and required pursuant either to Subchapter 1, Part 1) or to Section 110
of the C/\/\°
:
In the Matter ot? Categories of Insignificant Activities or Einission Levels at
L,4ApP Source (Axico/bnon/s /o35 HLA&n Code
201 and 21
1), R94-14 (October 17, 1994)
.
Morcnvcc,thuugbD94-l4vvuanutuS{P'rcLu1edrcqoirconcut,C/\/\Sechool79ouootiono
applied in that case pursuant to Section 50ndy which is discussed above . The fact that so many
rules were filed and adopted pursuant to Section 28.5 is irrelevant to the Mercury Proposal .
Clearly, it is not appropriate for the Board to accept the Mercury Proposal pursuant to Section
28.5. That the Board accepted the R9808 and R99-1 0 rulemakings pursuant to Section 28 .5,
where the was not raised, does not provide precedent or guidance for the Board's actions relative
to the Mercury 9nopoou\ where the issue has been raised .
ELECTRONIC FILING, RECEIVED, CLERKS OFFICE, MARCH 15,2006
For these reasons, no sanction may be
'
by U .S. EPA for a state's failure to adopt
a regulation to comply with CAMR or otherwise control mercury emissions . Therefore, the
Mercury Proposal is not "required to be adopted"' Linder Section 28 .5 of the Act. The Board has
no authority to accept that filing pursuant to Section 2&5 of the Act, because a non-discretionary
statutory prerequisite for u
28.5 - that U.S. EPA have authority to impose
sanctions for the state's failure to comply -does not exist pursuant to Section 111 of the CAA
.
In tl-le alternative, if the Board determines that the "sanction" requirement under Section
28.5 is satisfied, Section 28.50) of the Act provides that the Board "shall adopt rules in the ^
-
1rack rulemaking docket under the requirements of this Section that the CAAA requires to be
udoptcdoudruoycoosidoranon'zuquircdru!ciuusecouddnokeitbutubuIlpnocccdnudczTidc
VII of the Act." 415 ILCS 50850). The plain reading of this language means that only the
portion of a proposal that satisfies the federal requirement can proceed under Section 28 .5
.
Indeed, the Agency concedes that only rules that are in fact required by the CAA may be subject
to Section 28 .5. Statement of Reasons, pp . l7-l9. The Board is not required to consider
anydAng beyond the federal requirement pursuant to Section 28 .5 . and if it determines that the
oon-rcquircdporiiono[upropoau1ubouldpnocccd,bcancoosideri1uodcrSeotioo27
.
Tborelbre,tbcimcrcnoon{bctvvenonha1ietedcro!7yregolrcdundvvba1dbc/\geocybuypzopoaed
is what the Board should consider pursuant to Section 27 rather than Section 28 .5. However, in
this case, where the Agency's proposal is radically different from and beyond the federal
requirements, which the Agency readily admits in the Statement of Reasons,
5 it would be
virtually impossible for the Board to separate the increment beyond what is federally required
from the federal requirement . The Mercury Proposal in no way reflects what is federally
1 3
' For instance, the Agency concedes that its "regulatory proposal imposes standards
stricter than CAMR
.
.
.
."
Statement of Reasons, p. 18 .
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15,2006
required. Therefore, because the Mercury Proposal exceeds the federal requirement, any
federally required portion of the Mercury Proposal Mercury Proposal cannot be
from what
separated
is not required
by the CAMR, and there is no agreement on the part of the regulated community to this proposal,
the Board must consider the entirety of the proposal under Section 27
.
Proceeding Linder Section 27 of the Act, rather than under Section 28 .5's "fast-track"
ch, is not only compelled under the Act but also en
circumstances. The federal CAMR was promulgated in
by rulemaking proceedings
TJ.8. EPA
the
addressing
coqsand feasibility of mercury control strategies suid
which led US EPA to propose a model cap and trade program . The Agency in its Mercury
Proposal, however, rejects that cap and trade program and instead, after a mere two months of
outreach, seeks to impose a very different program that would place more rigorous and less
flexible requirements on Illinois' coal-fired power plants that raise significant cost and
uohievabiUtycooceruo. The Mercury Proposal should be subject to a comprehensive and
deliberative rulemaking process under Section 27 of the Act that provides an adequate
opportunity for industry to assess and comment on and for the Board to evaluate the Mercury
Proposal . lJ.S. EPA concluded that CAMR was technically and economically feasible, as well as
environmentally necessary, and only through the rigorous process under Section 27 can it be
determined if the more extensive, restrictive, arid costly nature of the Mercury Proposal is
statutorily and factually justifiable This result is compelled by the Act and makes good sense
under the chcurnstances .
WI I I'REFORE, for the foregoin(g, reasons, Dynegy Midwest Generation, Inc ., Midwest
Generation. LLC, and Southern Illinois Power Cooperative respectfully request that
:
1 4
c
'
opri ate under the
I
.
The Board reject the Agency's Mercury Proposal as be
on Sections 9.10 and 28.5 of the Act and dismiss
refile under Section 27 of the Act; or
2 .
In the alternative, if the Board decides to accept for hearing the Mercury Proposal
pursuant to Section 27 of the Act, the Board order the deletion of all references to Sections 9 .10
and 28.5 and request the Department of Commerce and Community Affairs to conduct a full and
formal economic impact study of the Agency's proposal pursuant to Section 27(b)(1) of the Act
.
Dated: March 15, 2006
Sheldon A . Zabel
Kathleen C . Bassi
Stephen J. Bonebrake
Joshua R. More
Glenna I- Gilbert
SCHIFF HARDIN. LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Fax: 312-258-5600
CIO
13
78307.6
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 15, 2006
Res
c
DYNEGY MIDWEST GENERATION, INC
.,
MIDWEST GENERATION, LLC, and
SOUTHERN ILLINOIS POWER COOPERATIVE
by :
1 5
Ily submitted,
osal proceeding, 'v
I
I
e
ised
