ILLINOIS POLLUTION CONTROL BOARD
October 29, 1987
IN THE MATTER OF:
)
PETITION TO AMEND 35 ILL.
)
R86—31
ADM. CODE PART 214, SULFUR
LIMITATIONS (CIPS Coffeen
)
Generating Station)
)
PROPOSED RULE. FIRST NOTICE.
PROPOSED OPINION AND ORDER OF THE BOARD (by J. Marlin):
This matter comes before the Board on a regulatory proposal
filed by Central Illinois Public Service Company (CIPS) on July
21, 1986. Through its proposal, CIPS is seeking relief for its
Coffeen Generating Station (Coffeen) from the requirement of 35
Ill. Adm. Code 214.184, which establishes an emission limitation
for sulfur dioxide (SO2) in any one hour. Section 214.184
imposes an emission limit on Coffeen of 55,555 pounds (lbs.) of
SO2 in any one hour. CIPS is proposing that Coffeen be exempt
from that standard and instead be subject to emission standards
of 65,194 lbs. of SO2 in any one hour and 7.29 lbs. of SO2 per
million British Thermal Units (mmbtu) of heat input. The
Illinois Environmental Protection Agency (Agency) neither opposes
nor supports CIPS’s proposal. (R. 85).
Due to an illness of counsel for CIPS, a hearing in this
matter could not be held until February 23, 1987. On that date,
a hearing was held in Hillsboro; members of the public were
present. At hearing, the Board requested that CIPS submit
additional information, marked as Exhibits #4 and #5, within two
weeks of the hearing. By his Order of March 18, 1987, the
Hearing Officer held the record open until April 6, for comments,
since CIPS had informed the Hearing Officer that it could not
submit Exhibits #4 and #5 until March 20. However, the Board did
not receive those exhibits until April 2. As a result, the
Hearing Officer ordered that the record remain open until April
20, 1987 to give the public a chance to comment upon the late
CIPS filings. On June 12, 1987, the Department of Energy and
Natural Resources (DENR) filed its finding that an economic
impact study was not necessary in this matter. The Economic and
Technical Advisory Committee filed its concurrence with DENR’s
finding on June 26, 1987. On August 6, 1987, the Board issued an
Interim Order requesting that CIPS and the Agency further address
several issues concerning CIPSts proposal. Responses to the
Order were filed by CIPS and the Agency filed on August 25 and
September 15 respectively (hereafter cited as CIPS Response and
Agency Response).
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2
Coffeen utilizes two coal fired Babcock and Wilcox cyclone
boilers, Units 1 and 2. Unit 1, which came on line in 1965, has
a net generating capacity of 325 megawatts (MW). Unit 2 has a
net generating capacity of 550 MW and came on line in 1972. (R.
11). There is presently no SO2 control equipment used at
Coffeen. (R. 14). However, both boilers are fitted with
electrostatic precipitators to remove fly ash from the flue gas.
(R. 11). Although Coffeen’s total net generating capacity
equates to 875 MW, Coffeen is currently operating under a load
limit of 765 net MW in order to achieve compliance with the
55,555 lbs. standard. (R. 15).
Based on stack tests conducted in October of 1974, Coffeen
was expected to emit a maximum of 55,555 lb. of SO2 per hour. A
subsequent test conducted at the insistence of the USEPA in June,
1986, showed that the actual emissions were about 65,194 lb. per
hour (R. 14—16 p. 70). Since 1985, CIPS has been involved in a
dispute with USEPA over SO2 emissions. (R. 14). On December 19,
1986, the USEPA filed a complaint against CIPS in the United
States District Court, Central District of Illinois. The
complaint alleges that from at least October 11, 1985 CIPS has
emissionallowed
emissionslimitationfromof Units55,555 1
poundsand
2 atper Coffeenhour
in
toviolationexceed theof SOthe2
federally approved State Implementation Plan (SIP) for Illinois.
(CIPS’ Response,
p.
6; Exhibit 1 of CIPS’ Response). CIPS is
pursuing a site—specific rule change rather than an Alternative
Emission Rate under 35 Ill. Adm. Code 214.185 partially because
it may lead to a more timely resolution of this dispute. (R. 22—
23).
CIPS asserts that
the coal used
during the 1986 test was
actually lower in sulfur content than the coal used in the 1974
test. CIPS cannot
explain the discrepancy in the test results
other than stating that less sulfur in the 1974 coal was
converted to SO2 when compared with the 1986 coal. (CIPS
Response, p. 1). The Agency states that “the 1974 test results
were anomalous in that it appeared
to show much less of the
sulfur in the coal was converted to sulfur dioxide and emitted
than theoretical calculations would indicate.” It is the
Agency’s position that the 1986 results were “more in line with
rates expected based on the sulfur content of the coal used.”
(Agency Response, p. 1). The Agency concludes that although the
1974 and 1986 test results indicated an increase in emissions,
there has been no real increase in SO2 emissions over those
years. (Agency Response, p. 2).
In 1981, CIPS entered into a long term contract with
Monterey Coal Company (Monterey) for the purchase of coal. The
contract, which is effective until the year 2003, calls for CIPS
to purchase a minimum of 1,980,000 tons of coal per year from the
Monterey’s No. 1 Mine. (R. 12, 17). That mine produces
approximately 8,500 tons per day. (R. 17). According to a public
comment submitted by Monterey, over 99 percent of Monterey’s No.
82—614
3
1 Mine shipments for the years 1985 and 1986 went to Coffeen.
(P.C. #2).
In its Interim Order of August 6, 1987, the Board requested
that CIPS and the Agency address the issue of whether there has
been a change at Coffeen, resulting in the higher emission
levels, which could be considered “modification” or a “major
modification” under the Clean Air Act and federal regulations
promulgated thereunder. CIPS responded by stating that there has
been no physical or operational change at Coffeen. CIPS asserts
that its 1981 switch to a lower sulfur coal would not constitute
a modification. (CIPS’ Response, p. 2—4).
As stated above, the Agency believes that rio real increase
in emission has occurred. The Agency concurs with CIPS in its
conclusion that the switch to Monterey coal would not be
considered a modification under federal law. (Agency Response, p.
2).
The Board also inquired whether CIPS’s proposal would
trigger the prevention of significant deterioration (PSD)
provision of Part C of the Clean Air Act. CIPS contends that the
PSD provisions are not applicable in this instance even though
the proposed rule would result in an increase in the allowable
emissions which is a relaxation of the Illinois SIP. According
to CIPS, under 40 CFR 5l.24(a)(2), a SIP relaxation must be
evaluated against a concentration baseline in order to
demonstrate that no allowable increment of ambient air quality is
exceeded. CIPS states that no baseline has been established and
concludes that no PSD analysis is necessary. (CIPS Response, p.
5). The Agency also concludes that a PSD analysis in this
instance is not triggered due to the definitions and exemptions
of 40 CFR 51.24. The Agency claims that this would hold true for
CIPS even if there had been an actual increase in emissions.
(Agency Response, p. 2).
Economic Effect of Compliance Alternatives
At hearing, CIPS presented three alternatives that would
enable CIPS to comply with the existing 55,555 lbs. standard:
permanent load reduction; blending of coal; and use of
scrubbers. Essentially, CIPS asserts that these three
alternatives are economically unreasonable when considering the
extent of the environmental impact.
As stated above, CIPS is able to achieve compliance with the
existing regulation by limiting its load to 765 net MW, as it is
presently doing. However, CIPS claims that such a load limit, if
adopted on a permanent basis, would cost CIPS up to $10,000 per
day due to the purchase of energy during a capacity shortage or
due to lost sales opportunities. CIPS also asserts that since
energy costs are quite variable, the actual cost of such a load
limit could be much higher if emergency replacement energy had to
82—615
4
be purchased. CIPS also expresses concerns that the Illinois
Commerce Commission might remove Coffeen from the rate bas~e. (R.
15—16).
According to CIPS, in order to maintain the compliant load
limit on a permanent basis, CIPS would reduce its coal take from
Monterey by 12 percent. (R. 25). CIPS states that using
1,980,000 tons per year as the base take, a 12 percent permanent
reduction would result in the lay—off of thirty Monterey
employees and the scheduling of production operations on a five
day per week basis. CIPS claims that Monterey would likely not
find additional customers to offset the 12 percent reduction in
CIPS’s take. (R. 17—18). According to Monterey, a permanent load
limit, to ensure compliance, would reduce CIPS’s take by only six
percent. However, Monterey concurs with CIPS’s position that it
would not be able to find replacement customers due to the flat
demand for coal. Monterey concludes that a permanent load limit
would reduce the production which in turn would result in four—
day work weeks as well as unused capacity at Monterey’s No. 1
Mine (P.C. #2).
The second alternative to achieve compliance is for CIPS to
burn a blended mixture of low sulfur, non—Illinois coal with
Illinois coal, which has a higher sulfur content. CIPS states
that neither Coffeen nor Monterey currently have the facilities
to blend coal. In addition, CIPS claims that higher
transportation costs for the non—local, low sulfur coal would
increase the overall expense of this option. CIPS also takes the
position that blending would reduce Monterey’s production by 20
percent. According to CIPS, such a reduction in production would
“reduce employment at the mine and might even jeopardize its
continued viability.” (R. 18—19).
Based on information supplied by Exxon Corporation (a parent
corporation to Monterey), CIPS claims that additional annual
costs for Monterey to provide a Wyoming—Illinois coal blend would
amount to $10.5 million per year. This figure includes the costs
for the acquisition and transportation of Wyoming coal,
unloading, blending, as well as an annualized capital charge to
recover and provide a return on the amount invested in a new
blending facility and related equipment. The facility and
additional equipment would cost approximately $9 million. (Exh.
#4). CIPS further asserts that blending could have the impact of
reducing Monterey’s No. I Mine workforce by 30 people. (Exh.
#4). Monterey presents the same conclusions. (P.C. #2).
Utilizing figures from a 1977 Study that CIPS conducted on
blending coal, CIPS estimates that if the coal were blended at
Coffeen, capital costs would total approximately $10 million.
(Exh. #4).
The third compliance alternative discussed was the use of
flue gas desulfurization controls, commonly referred to as
82—6 16
5
scrubbers. At hearing, CIPS expressed its reservations
concerning the use of scrubbers. CIPS claims that based on its
experience with scrubbers at its Newton generating facility it
expects significant capital arid operating costs to be associated
with this control option. In particular, CIPS stresses that the
use of scrubbers would result in reduced unit availability due to
scrubber malfunctions and that derating of the plant would occur
because of auxillary electrical use by the scrubbers. CR. 19—
20). However when questioned about Newton, the CIPS witness
stated, “There were many problems during the first year or so of
operation. Basically most of the bugs have been worked out. It
has a high availability”. He went on to say that the Newton
scrubbers malfunction between 250 and 300 hours per year (R. 26).
CIPS estimates that a retrofit of a forced oxidation
scrubberfrom
20 percentat
Coffeen,of
thecapableplant’sof totalremovingemissions90
percentwouldof
entail
the SO
a
2
capital expenditure of $196 million dollars. (Exh. #4). The
Board notes that Attachment #2 of Exhibit #4 sets “total
investment” figure for such a scrubber at $110,492,951. The
Board is at a loss to determine how the $196 million estimate was
reached since it is supposedly taken from Attachment #2.
Each of the above alternatives, if implemented, would impose
significant economic costs upon either CIPS or Monterey. At
hearing, CIPS acknowledged that it believed the proposed
regulatory change was the most feasible alternative since it is a
no cost alternative. (R. 25).
Environmental Impact
CIPS has conducted modeling studies in order to assess the
proposed emission standard’s effect upon the ambient air quality
for SO2. An initial study was completed in January, 1986 (Exh.
#3). In response to concerns of the Agency and the U.S.
Environmental Protection Agency (USEPA) relating to the
methodology of the modeling study, a revised modeling analysis
was drafted in June, 1986. (Exh. #1). In an effort to address
further questions by the USEPA, a supplement to the June report
was issued in November, 1986 (Exh. #2). CR. 35—36).
The proposed standard of 65,194 lbs. of SO2 in any one hour
is approximately equivalent to the rate of emissions that was
determined by a stack test conducted at Coffeen in June 1986. CR.
70). There is no evidence in the record to suggest that this
emission rate was initially selected by CIPS on the basis of
environmental impact. However, CIPS asserts that if Coffeen was
subject to that standard, its emissions would not cause any
violations of the National Ambient Air Quality Standards (NAAQS)
for SO2. CIPS relies on its modeling studies as support for this
conclusion. (R. 14, 37).
82—617
6
The June study was a revised analysis of the January study
utilizing procedures suggested by the Agency and USEPA. The
study concludes that maximum ambient air SO2 concentrations,
resulting from Coffeen’s operation at the proposed emission
standard, would still be in compliance with the NAAQS. (R. 42—
43). The November supplemental report also confirms this
conclusion. (R. 48).
The Agency states that CIPS’s showing of compliance with the
NAAQS is consistent with USEPA modeling guidelines. In addition,
the Agency takes the position that the modeling performed by CIPS
“sufficiently demonstrates” that the proposed emission limits of
65,194 lbs. of 302 in any one hour and 7.29 lbs. per million
BTU’s “will not endanger the air quality.” (R. 74—75).
The Board notes that Coffeen operated above 764 MW an
average of 104 days per year between 1982 and 1986 (Exh. 5). If
this trend continues the plant will be in compliance with the
current regulation during a substantial portion of each year.
Conclusions
There are three paths by which a source may seek to be
subject to an SO2 emission limitation standard other than the one
provided in the general rule. A source may petition for short
term relief (five years or less) through a variance proceeding.
See Central Illinois Light Company v. Illinois Environmental
Protection Agency, 57 PCB 417 (1984). Secondly, a source may
choose to seek an alternative standard utilizing the Alternative
Emission procedures set forth in 35 Ill. Adm. Code 214.185. The
alternative emission rate determined by the Board under this
provision is imposed as an operating permit condition. In
addition, further monitoring and modeling of ambient air quality
is also required as a condition to the permit. See Illinois
Power Company v. Environmental Protection Agency, 32 PCB 563
(1979) (The Board designated this matter as a proceeding under
Rule 204(e)(3) which was in substance the same as the current
Section 214.185). Finally, a source may seek an actual rule
change in order to be relieved from the general requirement. See
In re. Sulfur Dioxide Emission Limitations~ Village of Winnetka,
R80—22(B) (April 19., 1984) and In re. Amendments to 35 Ill. Adm.
Code 214, Sulfur Limitations, R84—28, (April 24, 1986). (As a
part of a general rulemaking, Central Illinois Light Company’s
E.D. Edward’s Electric Generating Station was granted a site
specific rule).
The Board notes that the Illinois Environmental Protection
Act (Act) specifically addresses instances when the Board is
making a determination regarding an alternative ~°2 emission
standard. Section 9.2(b) of the Act states:
In granting any alternative emission standard
or variance relating to sulfur dioxide
82—618
7
emissions from a coal—burning stationary
source, the Board may require the use of
Illinois coal as a condition of such
alternative standard or variance, provided
that the Board determines that Illinois coal
of the proper quality is available and
competitive in price; such determination
shall include consideration of the cost of
pollution control equipment and the economic
impact on the Illinois coal mining industry.
Ill. Rev. Stat. 1985, ch. 111 1/2 ~
par. 1009.2(b)
Several different compliance methods available to CIPS have
been discussed in the record. A permanent load limitation,
blending of coal, and the exclusive use of low sulfur western
coal, although providing compliance, are all options which would
have a significant adverse impact on Illinois coal mining
operation at Monterey Coal Company’s No. 1 Mine. The only
compliance option that would preserve the present level of
Coffeen’s Illinois coal consumption is the implementation of
scrubbers.
CIPS has provided the Board with two different estimates as
to the capital cost for installing a scrubber which would control
20 percent of Coffeen’s total SO2 emissions. In Exhibit #4, CIPS
states that expenditure at $196 million. Attachment #2 to that
same exhibit, which is an item by item cost estimate, provides a
“total investment” figure of $110,492,951. Since Attachment #2
sets forth a detailed numerical breakdown of that figure, the
Board will rely on the Attachment #2 estimate as the actual
cost. The Board must view this cost in light of the expected
environmental impact that would result if CIPS’s proposed
standard was adopted. After considering the environmental and
economic information presented in the record, the Board finds
that it would be economically unreasonable to require CIPS to
comply with the general standard at this time. The Board finds
that granting relief will have a favorable economic impact on the
State due to the savings to CIPS and the retention of coal mining
jobs. The Board will grant CIPS relief as requested.
In the record CIPS made clear its intent to use Illinois
coal from the Monterey Mine. Indeed the support for the rule
change is largely based on the favorable economic impact of
continued use of coal from this specific mine. Accordingly, the
Board will condition the rule change on continued use of coal
from the Monterey mine. If for any reason CIPS stops using coal
from this mine, the rule will terminate.
The Board further notes that the relief it is proposing
today is based upon regulations and data which do not address the
long range transport problems associated with SO2 emissions. The
82—619
8
Board’s decision in this matter is based on the local impact of
SO2 emissions. The modeling studies presented by CIPS only
evaluated ambient air quality to a distance of 20 kilometers
(12.4 miles) from Coffeen. CR. 28,65—66). The Board is aware of
the controversy surrounding the impact of SO~ transported over
long distances and anticipates that this topic will be the
subject of future rules. The rule proposed today may be modified
or repealed in response to future state or federal regulations in
this area. The Board specifically does not intend that this rule
be used to allow Coffeen to circumvent any future regulation by
“grandfathering in” the 65,194 lb. per hour limitation.
The Board will require as part of this rule that a stack
test be performed each time the permit for Coffeen is due for
renewal. The disparity of the 1974 and 1986 stack tests
demonstrate the advisability of periodically testing to determine
whether the plant is operating as expected. This provision shall
in no way be interpreted as preventing the Agency from ordering
such additional monitoring or testing as it determines are
necessary to carry out its statutory functions.
Permanent relief from the requirements of the general
regulations limiting SO2 emissions may be achieved by way of a
site—specific rule change or an alternative standard set pursuant
to 35 Ill. Adm. Code 214.185. Section 214.185 requires ambient
air sulfur dioxide monitoring and modeling studies subsequent to
the imposition of an alternative standard. The additional
monitoring and modeling are required in order to verify that
emissions under the new standard will not cause or contribute to
violations of the NAAQS. The Board believes that such monitoring
and modeling requirements are extremely useful in ensuring that
areas currently attaining NAAQS remain in attainment even after
the allowable emissions for that area are increased.
The Board is in no position to require any person to seek an
alternative standard under Section 214.185 rather than a site—
specific rule change. In this instance, CIPS rejected the
Section 214.185 procedure due to perceived time advantages of a
site—specific rule change (R. 22—23). However, the Board
emissionsbelieves
itreliefshouldirrespectiveact consistentlyof
whetherin
itsreliefdeterminationis
soughtofviaSO2
Section 214.185 or a site—specific rulemaking. The additional
monitoring and modeling requirements as required by Section
214.185 do not lose their value or become unnecessary merely
because the person seeking relief chooses to pursue a site—
specific rulemaking. This is especially true in situations where
modeling studies predict ambient air quality values that approach
the NAAQS. At hearing, a witness for CIPS stated that one of
CIPS’s modeling studies predicted a 3—hour SO2 concentration of
1291 micrograms per cubic meter; the NAAQS standard is 1,300
micrograms per cubic meter. CR. 44). Given these considerations,
the Board will grant relief conditioned on additional monitoring
and modeling. These requirements are consistent with the
82—620
9
requirements that would have been imposed had CIPS pursued relief
pursuant to Section 214.185.
Additionally the Board notes that CIPS’ Newton facility is
equipped with scrubbers. This rule change is not intended to
enable CIPS to use Coffeen to reduce generation at Newton in
order to avoid the cost of scrubber operation at that facility.
The Board proposes granting this rule change based on the
combination of circumstances which exist in this instance. A
favorable monitoring study alone is not sufficient reason for
granting a rule change.
The Board will add the proposed rule to Subpart X which
concerns site—specific SO~ emissions limitations for utilities.
Such placement is logically consistent with the structure of the
existing Part 214.
Finally, the Board notes that since the date of the hearing
in this matter the Joint Committee on Administrative Rules (JCAR)
has changed its informational requirements for Second Notice.
The required information, though, is not of the type which would
necessitate another hearing or in any way be determinative in the
Board’s decision making process. However, a review of the
existing record indicates that if the Board were to adopt this
proposed rule for Second Notice, the Board would not be able to
fully respond to JCAR’s inquiries as contained in JCAR’s Second
Notice forms. Therefore, the Board will direct the Hearing
Officer to issue an Order requiring CIPS to provide the Board
with additional information which would assist the Board in the
filing of JCAR forms in the event that this proposal is
eventually adopted for Second Notice.
ORDER
1. The Board hereby orders the Hearing Officer to issue an
order directing Central Illinois Public Service Company
to provide the Board with information which would aid
the Board in complying with Second Notice requirements
of the Joint Committee on Administrative Rules in the
event that the Board adopts a proposal for Second
Notice. This requirement does not prejudge in any way
the eventual outcome of this proceeding.
2. The Board hereby proposes to adopt the following rule
and instructs the Clerk of the Board to cause its
publication for First Notice in the Illinois Register.
82—621
10
TITLE 35: ENVIRONMENTAL PROTECTION
SUBTITLE B: AIR POLLUTION
CHAPTER I: POLLUTION CONTROL BOARD
SUBCHAPTER c: EMISSION STANDARDS AND LIMITATIONS
FOR STATIONARY SOURCES
PART 214
SULFUR LIMITATIONS
SUBPART X: UTILITIES
Section 214.562 Coffeen Generating Station
a) The emission standards of this subsection shall apply
only if the requirements of subsections (b),(c), and (d)
are fulfilled. Notwithstanding any other limitation
contained in this Part and provided that the coal burned
is mined exclusively from the mine that is presently
known as Monterey Coal Company’s No. 1 Mine located
south of Carlinville, emission of sulfur dioxide from
Units 1 and 2 at the Central Illinois Public Service
Company’s (CIPS) Coffeen Generating Station (Coffeen),
located in Montgomery County, shall not exceed either of
the following emission standards:
1) 65,194 pounds of sulfur dioxide in any one hour;
and
2) 7.29 pounds of sulfur dioxide per mm btu of heat
input.
b) The Agency shall impose as a condition to the initial
permit, which first allows the operation of Coffeen’s
Units 1 and 2 in accordance with the emission standards
of subsection (a), an ambient sulfur dioxide monitoring
and dispersion modeling program designed to verify that
the emission standards of subsection (a) will not cause
or contribute to violations of any applicable primary or
secondary sulfur dioxide ambient air quality standard as
set forth in Section 243.122. Such ambient monitoring
and dispersion modeling program shall be operated for at
least one year commencing no later than 6 months after
the effective date of this Section.
C)
No more than 15 months after the commencement of the
ambient monitoring and dispersion modeling program of
subsection (b), CIPS shall apply for a new operating
permit. CIPS shall submit, at the time of the
application, a report containing the results of the
ambient monitoring and dispersion modeling program of
subsection (b).
d) Prior to the issuance of any operating permit in
accordance with the emission standards of subsection
82—622
11
(a), a stack test shall be performed in order to
determine compliance with emission standards set forth
in subsection (a). The requirements of this subsection
do not preclude the Agency from requiring additional
stack tests.
(Source: Added at 11 Ill. Reg.
effective
IT IS SO ORDERED.
J.D. Durnelle and J.T. Meyer concurred.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certify that the above Proposed Opinion and Order
was adopted on the
O?~~
day of
________________,
1987, by a
vote of _________________________
,~
Dorothy
.
Gunn, Clerk
Illinois Pollution Control Board
82—6 23
