BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

PLEASE TAKE NOTICE that I have today filed with the Office of the Clerk of the Illinois Pollution Control Board the PRE-FILED TESTIMONY OF DEIRDRE K. HIRNER ON BEHALF OF THE ILLINOIS ENVIRONMENTAL REGULATORY GROUP and PRE-FILED TESTIMONY OF DAVID J. KOLAZ ON BEHALF OF THE ILLINOIS ENVIRONMENTAL REGULATORY GROUP, copies of which are herewith served upon you.

THIS FILING SUBMITTED ON RECYCLED PAPER

IN THE MATTER OF:

)

) R08-19

NITROGEN OXIDES EMISSIONS FROM ) (Rulemaking - Air)

VARIOUS SOURCE CATEGORIES:

)

AMENDMENTS TO 35 ILL. ADM. CODE )

Mr. John T. Therriault

Timothy Fox, Esq.

Assistant Clerk of the Board

Hearing Officer

Illinois Pollution Control Board

100 W. Randolph Street

Suite 11-500

Chicago, Illinois 60601

(VIA ELECTRONIC MAIL)

(VIA U.S. MAIL)

(SEE PERSONS ON ATTACHED SERVICE LIST)

PLEASE TAKE NOTICE that I have today filed with the Office of the Clerk of

the Illinois Pollution Control Board the

PRE-FILED TESTIMONY OF DEIRDRE K.

HIRNER ON BEHALF OF THE ILLINOIS ENVIRONMENTAL REGULATORY

GROUP

and

PRE-FILED TESTIMONY OF DAVID J. KOLAZ ON BEHALF OF

THE ILLINOIS ENVIRONMENTAL REGULATORY GROUP,

copies of which are

herewith served upon you.

Respectfully submitted,

By:

/s/ Katherine D. Hodge

Katherine D. Hodge

Dated: November 25, 2008

Illinois Environmental Regulatory Group

3150 Roland Avenue

215 East Adams Street

Post Office Box 5776

Springfield, Illinois 62701

Springfield, Illinois 62705-5776

(217) 522-5512

(217) 523-4900

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

CERTIFICATE OF SERVICE

I, Katherine D. Hodge, the undersigned, hereby certify that I have served the

attached PRE-FILED TESTIMONY OF DEIRDRE K. HIRNER ON BEHALF OF THE

ILLINOIS ENVIRONMENTAL REGULATORY GROUP and PRE-FILED

TESTIMONY OF DAVID J. KOLAZ ON BEHALF OF THE ILLINOIS

ENVIRONMENTAL REGULATORY GROUP upon:

Mr. John T. Therriault

Assistant Clerk of the Board

Illinois Pollution Control Board

100 West Randolph Street, Suite 11-500

Chicago, Illinois 60601

via electronic mail on November 25, 2008; and upon:

Timothy Fox, Esq.

Hearing Officer

Illinois Pollution Control Board

100 West Randolph, Suite 11-500

Chicago, Illinois 60601

Matthew J. Dunn, Esq.

Chief, Environmental Bureau North

Office of the Attorney General

69 West Washington Street, Suite 1800

Chicago, Illinois 60602

Gina Roccaforte, Esq.

John J. Kim, Esq.

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

Post Office Box 19276

Springfield, Illinois 62794-9276

Sheldon A. Zabel, Esq.

Kathleen C. Bassi, Esq.

Stephen J. Bonebrake, Esq.

Schiff Hardin, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606-6473

Virginia Yang, Esq.

Deputy Legal Counsel

Illinois Department of Natural Resources

One Natural Resources Way

Springfield, Illinois 62701-1271

by depositing said documents in the United States Mail, postage prepaid, in

Springfield, Illinois on November 25, 2008.

/s/ Katherine D. Hodge

Katherine D. Hodge

IERG:001/R Dockets/Fil/R-08-19/NOF-COS – DKH and D. Kolaz Pre-Filed Testimony

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

BEFORE THE ILLINOIS 

POLLUTION CONTROL BOARD

IN THE 

MATTER OF:          

)

R08-19

NITROGEN 

OXIDES EMISSIONS FROM )  (Rulemaking - Air)

VARIOUS SOURCE CATEGORIES:  )

AMENDMENTS 

TO 35 ILL. ADM. CODE )

PARTS 211 

and 217           

)

PRE-FILED TESTIMONY 

OF

DEIRDRE 

K. HIRNER ON

BEHALF OF THE ILLINOIS ENVIRONMENTAL REGULATORY 

GROUP

NOW COMES the ILLINOIS ENVIRONMENTAL 

REGULATORY GROUP

("IERG"), 

by and through its attorneys, Alec M. Davis and HODGE DWYER 

ZEMAN,

and submits the following PRE-FILED TESTIMONY 

OF DEIRDRE K. HIRNER for

presentation 

at the December 9, 2008, hearing scheduled in the above-referenced 

matter.

Pre-Filed 

Testimony of Deirdre K. Hirner

I.

INTRODUCTION

My name is Deirdre K. Hirner, and I am the Executive 

Director of IERG. I am

here today 

to provide information on the proposed rule, with respect to IERG and its

member companies. IERG is a not-for-profit Illinois 

corporation affiliated with the

Illinois 

State Chamber of Commerce. IERG is composed of 55 member companies that

are regulated by governmental 

agencies that promulgate, administer or enforce

environmental 

laws, regulations, rules or other policies. On behalf of its member

companies, IERG has attended outreach meetings, reviewed 

drafts of the proposed rule,

provided 

comments to Illinois Environmental Protection Agency ("Illinois EPA" or

"Agency") on drafts of the Proposed Rule and participated in Illinois 

Pollution Control

Board ("Board") 

proceedings in this matter. IERG appreciates the opportunity to

participate in this rulemaking and offers these comments for consideration 

by the Board.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

The Illinois EPA stated that its proposal is intended to specifically satisfy the

State's obligation to submit a State Implementation Plan ("SIP") 

to

address requirements

for major stationary sources of NOx, referencing Sections 7502 and 7511 a of the Clean

Air Act ("CAA"), 42 U.S.C. §§ 7502 and 7511a. 

Section 7502(c)(1) states that the

nonattainment plan provisions provide for the implementation of all reasonably available

control measures ... and ... attainment of the national primary 

ambient air 

quality

standards. 42 

U.S.C. § 7502(c)(1). Section 7511a(b)(2) requires that state

implementation plans include provisions to require reasonably available control

technologies 

for

major 

stationary sources of VOCs located in the nonattainment areas. 42

U.S.C. § 7511a(b)(2).

The Illinois EPA's proposal, as submitted, presents a rule that is not designed to

achieve the requisite reasonably available control technologies ("RACT"). Rather, the

Agency proposes a plan for NOx "controls" that IERG maintains to be well beyond

RACT, and which NOx "controls" are not "reasonable and cost effective" as the Agency

contends. See Statement of Reasons, R08-19 at 1 (I11.Pol.Control.Bd. May 9, 2008)

("Statement of Reasons").

II.   COMMUNICATIONS WITH ILLINOIS EPA

IERG has been pleased to have the opportunity to engage in dialogue with the

Agency during the process of developing this proposed rule. IERG 

generally agrees with

the Agency's characterization of its outreach program and acknowledges that it proposed

the regulations after interested parties reviewed 

the proposal and discussed the issues

with the Illinois EPA. Id. at 13. IERG concurs that the Agency took many of IERG-

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

Members' concerns under consideration; however, 

several provisions identified by IERG

as problematic 

with regard to implementation have been, and continue to be, included in

the proposed rule.

IERG's input into the development of the proposed rule is best illustrated by the

following timeline detailing IERG's participation in this rulemaking process.

5/26/2005  At an ERG-41 Workgroup meeting, the Agency described

potential control programs 

under 

consideration, 

among them

"tighter RACT applicability for both VOC and 

NOx

with

expanded geographical areas."

9/23/2005  At an ERG-41 subgroup meeting, 

the Agency informed Members

that current LADCO modeling showed that 

additional reductions,

beyond CAIR, were needed to reach attainment (of ozone and

PM2.s) by 2009. The Agency stated it intended to develop

proposals 

to

achieve 

the additional reductions, including a state-

wide NOx RACT rule.

10/14/2005 IERG 

Staff 

identified 

limitations of the current LADCO modeling

on which the Agency's 

September 

23, 2005 

statement appears to

have been made, including:

1.

The model did not include revisions the Illinois EPA made

to the emissions inventory 

as a 

result 

of IERG's survey of

its Members as provided to the Illinois EPA;

2.

The model did not include emissions reductions from

consent orders 

that 

would 

occur between 2002 and 2015;

3.

The model did not include any voluntary emissions

reductions which were on the way, but not yet formalized

in permits; and,

4.

The model did not provide for additional reductions that

could result from early adoption of later CAIR rule

requirements.

10/17/2005 

At an Illinois EPA meeting, the Agency indicated it may target the

following source types for the 

NOx

RACT 

proposal:

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

"

Boilers <250 mmBtu/hr;

"   EGUs 

<25

MW;

"

Process Heaters;

"

Cement Kilns;

"

Internal 

Combustion 

Engines;

"

Lime Kilns;

"

Glass 

Melting Furnaces; 

and,

"

Steel Plants.

10/19/2005 IERG 

Staff 

identified concerns with 

the

Illinois EPA's 

approach,

including:

1.

The inability of the Illinois EPA to specify the reductions

needed in terms of tonnages;

2.

The inaccuracy of modeling; and,

3.

The lack of regional participation in control strategies.

12/2/2005  IERG continued to evaluate alternative modeling being done by an

industry 

consortium of which IERG is a member, intended to

address perceived shortcomings in 

the

LADCO modeling.

4/20/2006  IERG formalized the input it would provide to the Illinois EPA at

its first 

NOx

RACT 

workgroup meeting. Specifically:

1.

That while the CAA requires RACT for all non-attainment

areas, Illinois had, in the past, received a waiver from

developing a NOx RACT rule, because analysis had shown

that it would not be effective in reducing ozone;

2.

That the Illinois EPA believed that state-wide NOx RACT

would improve both ozone and PM2.5 air quality levels,

beyond that required by the CAA; and,

3.

That preliminary alternative modeling results showed that

"on-the-books" 

controls 

were nearly 

adequate to 

reach

attainment and that discussions had begun with the Illinois

EPA and LADCO to discuss the modeling approach.

4/27/2006  IERG participated in the first Illinois EPA stakeholder meeting 

for

the NOx RACT rule, at which time:

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

1.

The Illinois EPA 

stated that the CAA obligates NOx RACT

in non-attainment areas. It further stated that because NOx,

a precursor to both ozone and PM2.5, is a "transport

pollutant" the proposed rule would be applicable state-

wide.

2.

The Illinois EPA again described the units targeted by the

proposal:

Industrial boilers > 50 mmBtu/hr;

Process heaters > 50 mmBtu/hr;

All cement kilns;

Lime kilns > 50 mmBtu/hr;

Glass melting furnaces > 50 tons/day;

Iron and steel reheat, galvanizing, and annealing

furnaces > 40 mmBtu/hr; and,

Other sources > 100 ton/year NOx potential to emit.

3.

The Illinois EPA stated that it considered $2000/ton of

NOx

reduction to be "reasonable" though not necessarily a

breakpoint for what constitutes RACT.

4.

The Illinois EPA stated it was considering 

stack testing and

CEM

for all units.

5.

IERG stated that it appeared that the Agency did not

consider 

reductions 

of NOx 

from mobile 

sources.

6.

IERG presented continuing questions regarding:

a)

The

accuracy 

of modeling;

b)  The amount of NOx reductions needed to achieve

attainment; and,

c)

The proper choice and levels of controls needed for

required 

NOx

reductions.

6/13/2006  In anticipation of a meeting with the Illinois EPA, IERG Staff

distributed a spreadsheet of the Agency's proposed limits and

associated controls and costs and a spreadsheet of the emissions

inventory relied upon by the Illinois EPA. Staff requested

Members review the data for accuracy and be prepared to discuss it

at the meeting.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

6/23/2006  IERG circulated a report that described the Illinois Proposed NOx

RACT 

limits 

for ICI boilers and 

OTC and other state limits 

for

such boilers that had been approved by the 

USEPA as 

RACT. (A

copy of the report is attached as Exhibit A). Based on review of

the materials, IERG determined:

1.

The Illinois EPA's proposed limits are more stringent than

those implemented in nearly any other state in the country;

2.

The proposed limits appear to be beyond RACT, 

and

they

appear to be intended to reach the 8-hour ozone and PM2.5

attainment demonstration; and,

3.

That recent modeling indicates 

that the 

level 

of controls

proposed may well be beyond what is necessary to

demonstrate attainment.

7/27/2006  

Representatives of IERG, 

the

Illinois 

Chamber, the Chemical

Industry Council of Illinois, the Illinois Manufacturers

Association, the Illinois Petroleum Council, and the Illinois Energy

Association met 

with 

Director 

Doug 

Scott to discuss industry's

concerns with the Agency's development of 8-hour ozone and

PM2,5 SIPS, which included:

1.

The fact that the 

modeling relied 

upon did not reflect

monitored reality;

2.

That the controls the Illinois EPA considered necessary to

achieve attainment 

would 

place an undue 

burden 

on

industry, and could adversely impact Illinois' economy;

3.

That additional (refined) modeling could potentially show

that significantly lower control levels could achieve

attainment; and

4.

Industry committed to work with the Illinois EPA to

achieve attainment.

5.

IERG sent a follow-up letter to Director Scott reiterating

the concerns of 

industry, and requesting that he 

join 

Kevin

Kessler, the Acting Director of the Bureau of Air

Management at the Wisconsin Department of Natural

Resources, in requesting additional modeling efforts by

LADCO.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

8-9/2006 IERG prepared a draft of alternative language to submit to the

Illinois EPA as a NOx RACT rule.

11/13/2006 IERG sent its alternative to the Illinois EPA with an accompanying

letter, explaining:

1.

IERG believes the NOx RACT rule should only apply to

ozone non-attainment areas;

2.

That the limits proposed by IERG would fall within the

USEPA 

requirements for RACT;

3.

IERG felt the Agency's proposed limits were closer to

BACT, and if adopted, would result in the most stringent

NOx regulations in the country;

4.

IERG highlighted important points of its draft alternative

rule including:

a.

Exception for units subject to state or federal

enforcement orders requiring NOx reductions;

b.

Annual 

Combustion 

Tuning as RACT for industrial

boilers between 50 and 100 mmBtu/hr;

c.

Limit for 100-250mmBtu/hr boilers using natural

gas set at 0.151b/mmBtu;

d.

Limit for 100-250mmBtu/hr boilers using fuel oil or

coal set at 0.201b NOx/mmBtu or 30% reduction

from uncontrolled

e.

Limit for "coal-fired stoker boiler, a bubbling bed

fluidized bed boiler, or 

a pulverized 

coal-fired

boiler" of 0.401b/mmBtu;

f.

Limit for industrial boilers >250mmBtu/hr: All

fuels: 0.171b NOx/mrnBtu 

or

30%

reduction 

from

uncontrolled;

g.

Allowed alternative methods for calculating limits

and reductions to be approved by the Agency for all

categories and limits;

h.

Set

limits for all process heaters >100mmBtu/hr at

0.151b/mmBtu, except for those burning residual

fuel oil, >100mmBt/hr (MD) to be 0.201b/mmBtu;

i.

Specifying 

for cement kilns, RACT should 

be the

same as limits already in the NOx SIP Call rules,

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

except 

for

Short Dry Kilns, which were the same as

the Illinois EPA proposed limits;

j.

Specifying a rolling 30-day average for 

CEM

data;

k.

Including placeholders for the possibility of trading,

averaging, and variance provisions, detailing

testing, monitoring, and reporting requirements;

and,

1.

IERG did not specify limits for iron and steel

facilities, citing ongoing 

discussions.

2/21/2007  IERG attended a meeting with Director Scott and Air Bureau Chief

Laurel 

Kroack, to discuss various air regulatory rulemakings.

1.

With regard to ozone, IERG was informed that the Illinois

EPA intended to submit a request for re-designation (as in

attainment) for ozone.

2.

However, the administrators informed IERG that the

Agency remained steadfast in its insistence for the need for

a state-wide applicable RACT 

rule, stating that it was

necessary for PM.

4/10/2007  IERG 

provided a letter to the Agency explaining the basis for the

alternative rule, and attached 

documents evaluating the

effectiveness and costs of various control technologies, 

as well as

the NOx RACT rules in place in other states. IERG explained that

the alternative rule 

limits 

fall within the wide range of values in

other states, showing that 

they 

would 

be approved by the USEPA

as meeting the requirement for RACT.

6/28/2007  IERG 

Staff informed Members that the Illinois EPA would soon

post a draft rule; and further informed Members 

that, while the

Agency had expressed no desire to include a trading program for

non-EGUs, some sort of averaging provisions were envisioned by

the

Agency.

7/31/2007 The Illinois EPA informed IERG that the most recent version of its

draft rule included limits that were essentially the same as those

originally proposed, the Agency was willing to talk about the

possibility of trading, and the "RACT" rule would address 

both

ozone and PM2,5.

8-9/2007  IERG 

analyzed the draft to assess:

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

1.

Whether the limits were an issue for Member facilities;

2.

If statewide 

applicability was an 

issue for 

Member

facilities;

3.

Whether trading should be an option;

4.

Whether Member facilities have issues with compliance

deadlines; and,

5.

Whether the averaging plan provisions in the draft rule

would be of benefit.

10/4/2007  IERG met with 

the

Illinois EPA 

and

LADCO 

to discuss updated

modeling results. These showed, as IERG had long contended

based on alternative modeling, that with "on-the-books" controls

and NOx RACT limits, the ozone standard would be met on

schedule, and that PMz,5 would be met everywhere in Illinois

except Granite City. The Agency informed IERG that it would

update its proposal for the NOx RACT rule, most significantly,

limiting applicability to the ozone and PMz.5 non-attainment areas.

10/2007  

IERG prepared comments on the Agency's July draft rule, and

forwarded them to the Illinois EPA for its consideration. The

comments:

1.

Agreed with the Illinois EPA decision to limit the

applicability to ozone and PM2.5 nonattainment areas;

2.

Objected to any provisions extending the applicability to

units outside the nonattainment areas;

3.

Suggested 

provisions be included to allow 

compliance

determinations to be made by measuring emissions in the

common stack or flue for units that exhaust to a common

stack;

4.

Suggested that units less than 250mmBtu/hr not be subject

to 40 CFR Part 60 or Part 75 monitoring requirements,

unless otherwise required by federal or State regulation;

and also that such units not be required to employ 

a CEM;

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

5.

Suggested that the rule contain a provision allowing for

case-by-case determination of RACT through the

permitting process;

6.

Suggested that being subject to, and complying with CAIR

and

CAMR 

rules should be specified 

as RACT; and that

Subpart U should be retained, and units in compliance with

that rule also be deemed in compliance with ozone season

RACT;

7.

Stated that the compliance date, January 1, 2009, was not

achievable, given the RACT limits proposed;

8.

Made corrections to the language of the 

averaging 

plan

provisions;

9.

Suggested 

an exemption for natural 

gas-fired auxiliary

boilers less than or equal to 250mmBtu/hr, located 

at the

site of an EGU, and used for start-up and/or plant heating,

and

having 

a capacity factor less than or equal to 20%;

10.  A suggestion that the threshold for boilers be those

>100mmBtu/hr, to conform with the NSPS categorization

for such boilers;

11.  Provided a distinction for coal boilers converted to natural

gas combustion, and for coke oven gas; and,

12.

Clarified 

that the limit for fluidized bed 

combustion should

apply only to circulating fluidized bed boilers.

11/8/2007  IERG met with 

the

Illinois EPA 

to discuss the draft rule.

11/26/2007 IERG sent a memo to the Agency specifying additional concerns

raised at the November 8th meeting, which included the following

for

a

new

draft NOx 

RACT 

rule:

1.

That Part 75 monitoring not be required where it is not

already required, due to the operational complexity such

monitoring imposes 

and provided details of circumstances

where such would be the case;

2.

Suggestions 

regarding 

the testing and monitoring

provisions of proposed Sections 217.168 and 217.188:

10

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

"

That units > 250mmBtu/hr be subject to 40 CFR

Part 60, Subpart A, and Appendices B and F, unless

otherwise 

required 

to have a continuous monitoring

system by another regulation 

or enforceable order;

"

That units >100 but <250mmBtu/hr, that are already

required to have 

a continuous monitoring system,

also be subject to 40 

CFR

Part 

60, Subpart A, and

Appendices B and F; and,

"

That units >100 but <250mmBtu/hr, that are not

already required to have 

a continuous monitoring

system, may determine compliance by a

performance test.

3.

That the provision for averaging plans (Proposed Section

217.158(a)(2)(A)), clearly state that if the addition of a new

unit causes an older unit to be shutdown, the new unit can

be

used 

in

the averaging plan, even if its size and capacity

exceed that of the unit(s) it causes to be replaced;

4.

That the Illinois EPA reconsider the limits in light of the

proximity of the compliance date 

(January 

1, 2009); 

and,

5.

Questioned the need to include limits for categories of

sources that do not exist in the nonattainment area

(specifically wall- or tangentially-fired boilers).

12/3/2007  IERG informed Members regarding the status of the rule:

1.

That the Agency was convinced to not require Part 

75

monitoring for process heaters, but were still discussing it

with regard to boilers;

2.

That the Agency based its determination that SCR is 

an

economically viable control on a report by Jim Staudt.

12/19/2007 The Illinois EPA provided a new draft of the 

NOx

RACT 

rule to

IERG for preliminary review and comment.

1/02/2008 Based on its review, IERG 

provided comments to the Illinois EPA

that:

11

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

1.

Suggested that the definition of "combustion tuning"

(Section 211.1315) be expressed as "maintaining low 

NOx

emissions consistent with efficient operation of the boiler";

2.

Suggested that the definition of "industrial 

boiler" (Section

211.3 100) not include "cogeneration units and combined

cycle systems," and further, specify that it excludes duct-

fired 

HRSGs;

3.

Questioned terms in the definition of "process heater"

(Section 211.5195);

4.

Questioned why emissions limits from new sources were

being repealed (Section 217.121);

5.

Suggested that the applicability 

threshold (in Section

217.150(a)) be set at 21 tpy and 7 tps;

6.

Suggested that Section 

217.150(c) 

and (d) be removed to

preserve the applicability to nonattainment 

areas;

7.

Suggested that Section 217.150(e) include emergency oil or

gas fired electric generators;

8.

Stated that while the change of compliance date from

January 

1,

2009 to May 1, 2010 was an improvement, it

was still an inadequate 

amount of time to achieve

compliance;

9.

Suggested that the compliance demonstration test date of

April 1, 2010 be removed 

(Section 217.154(a));

10.

Suggested that the term "modified" in Section 217.154(b)

be

defined or clarified to avoid misinterpretation;

11.  Requested that the compliance test for new units 

(Section

217.154(b)) timeframe be changed from 120 days from

initial 

start-up to 180 days, and further requested a

mechanism to allow for an 

extension if necessary;

12.

Suggested that averaging be addressed as a compliance

certification 

option in Section 217.155, and further, that

more clarification be included as to what 

constitutes

"procedures";

12

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

13.  Contained various comments regarding the recordkeeping

and reporting provisions (Section 217.156) all aimed at

lessening 

the complexity and burden imposed on industry;

14.  Re-expressed reservations regarding the need for Part 75

monitoring (Section 217.157), and various other questions

aimed at clarification, and recommendations regarding

monitoring;

15.  Among 

other recommendations and requests for

clarification regarding 

the averaging provisions (Section

217.158), re-expressed the opinion that recently installed or

future boilers should be allowed to participate in averaging;

16.  Proposed that Section 217.160(b) state: "This 

subpart does

not apply to a boiler whose primary or major purpose is to

reduce carbon monoxide emissions from a fluidized

catalytic 

cracking unit (FCCU) located at a refinery";

17.  Re-emphasized that the limits proposed by the Agency go

beyond RACT, and proposed that units smaller than

50mmBtu/hr not be included in 

the

rule;

18.  Included charts comparing the limits from the July 2007

Illinois 

EPA draft, from the December 2007 Illinois EPA

draft, and the limits proposed by IERG;

19.  Suggested the provisions for combustion tuning for

industrial boilers 

(Section 217.166) clearly state what

procedures are acceptable, and further, 

that the requirement

be to tune once per calendar year;

20.

Stated that the emissions 

limitations for process heaters

(Section 217.184) needs 

to

include 

the statement

"Compliance shall be demonstrated with 

the applicable

emissions limitation 

on an ozone season and annual basis";

21.  Suggested that the previous exemptions 

for various boilers

at EGUs (Section 217.342) be reinstated; and,

22.  Suggested that the rule make 

clear that units included in an

MPS or CPS are never subject to this rule.

13

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

3/07/2008 IERG met with the Illinois EPA to discuss air issues, during which

meeting the following surfaced regarding the NOx RACT draft

rule:

1.

That the ozone season component is intended to meet

federal requirements for NOx RACT in ozone

nonattainment areas, and 

that 

the

annual component is

intended to meet the requirements for PMZ.5;

2.

That IERG 

continues 

to

view 

the proposed 

limits as being

beyond what constitutes RACT;

3.

That the Agency might be willing to further consider 

the

limits 

proposed 

by IERG, but emphasized that additional

future restrictions might be necessary.

5/09/2008 The Illinois EPA filed proposal 

with 

the

Board.

10/8/2008 An update to the June 2006 NOx RACT Report is attached as

Exhibit B.

6-11/2008 

IERG 

continued 

review and analysis of the proposed rule.

As should be apparent from the above, IERG has taken the Agency's 

request for

input in 

this 

rulemaking very seriously because Illinois' final rule has serious

implications for affected industries. As a result of the exchange of information during the

past three years, four primary issues remain of concern to IERG.

First, IERG is concerned regarding the limits for certain, 

specific emission 

units

as presently proposed in the Illinois EPA's draft rule and what constitutes RACT.

Second is the restriction, by date of commencement of operation, of units 

that may 

be

included in emissions averaging plans under proposed Section 217.158. These two issues

will be addressed in detail in the testimony presented 

by Mr. Dave Kolaz on behalf of

IERG. Third involves the difficulty to implement controls by the rule's proposed

compliance date. Finally is the very 

need for the rule as proposed. These will be

14

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

addressed generally in my testimony 

and more specifically in that presented by Mr.

Kolaz.

III.  IMPLEMENTATION BY THE PROPOSED 

COMPLIANCE DATE

Evident in 

the information presented above, the proposed compliance date for the

rule has changed from January 1, 2009 to May 1, 2010. Early 

in the process IERG

maintained, 

and continues to maintain, that this affords an inadequate amount 

of

time for

member companies to achieve compliance with a final adopted 

rule. In discussions

throughout 

the

process, 

in response to IERG's pre-filed questions, and at the Board's

October 14, 2008 hearing, the Illinois EPA has consistently stated 

that it believes

... stakeholders have already had 

ample time to plan and design the control

measures need to comply with this proposal 

since they have been aware of it for

several years. Depending on the duration of the rulemaking 

process, there may or

may not 

be sufficient time to obtain the necessary permits and construct the

control equipment....

Illinois 

EPA's Answers to Pre-filed Questions by IERG, R08-19 

at 7 (Il1.Pol.Control.Bd.

Sept. 30, 2008) ("Illinois EPA Answers"); 

see also Hearing Transcript, R08-19 at 75-78

(I11.Pol.Control.Bd. 

Oct. 14, 2008). In response to such statement, IERG believes it

necessary to question which control measures 

were facilities to have planned for and

designed. Would it 

be the control measures necessary under the concept envisioned 

in

May 2005; or under the rule as envisioned in April 

2006, which had statewide

applicability and afforded 

no opportunity for averaging? Would it have been the 

control

measures necessary to meet 

the

emission limits 

stated in the rule as proposed in July

2007? Or should facilities 

have prepared for the rule as proposed in December 2007?

15

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

How does a facility plan and design control measures 

when the targets they are to meet

are moving?

IERG must respectfully differ with the Agency 

on

its

assessment that the

compliance 

date 

will 

not impose a significant cost impact to most industries, and that

reasonable availability of technical options is not a factor influenced by the compliance

date. Illinois EPA Answers 

at 7-8. 

It is 

unreasonable to expect facilities to plan and

design 

control technologies until those facilities know precisely what emission units are

to be covered by this rule and what levels 

of control must be met.

IV.  NECESSITY OF THE PROPOSED RULE

The Illinois EPA contends 

that the purpose of the proposed rule is two-fold: 1) to

adopt RACT 

rules for major NOx sources ozone nonattainment areas under Section 182

of the CAA; and 2) to adopt regulations to reduce emissions sufficiently 

to demonstrate

attainment 

of the 8-hour ozone and PM2.5 NAAQS. See Statement of Reasons at 

5 -

7.

IERG acknowledges that the State of Illinois must propose and 

adopt "a" NOx PACT

rule for purposes 

of compliance with Section 182(f) of the CAA. However, IERG 

does

not believe that it is "this" proposed rule. The Illinois EPA's proposal 

currently before

the Board is 

a NOx control rule, beyond RACT.

A.  Imposing NOx RACT

The United States Environmental 

Protection Agency ("USEPA") has stated that

compliance with a USEPA approved Clean Air Interstate Rule ("CAIR") 

SIP is presumed

sufficient to satisfy NOx RACT for EGUs in 

the St. 

Louis, 

MO-IL and Chicago-Gary-

Lake 

County, IL-IN nonattainment areas. See Phase 2 of the Final Rule 

to

Implement 

the

16

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

8-Hour Ozone National Ambient 

Air Quality Standard-Notice of Reconsideration, 72

Fed. Reg. 

31727, 31730 (June 8, 2007). In addition, USEPA has 

stated that, for non-

EGUs, compliance with the 

NOx SIP Call Program satisfies the RACT requirement. 

See

Final Rule 

To Implement the 8-Hour Ozone National Ambient Air Quality 

Standard, 70

Fed. Reg. 71612, 71656-57 (Nov. 29, 2005).

Illinois' 

CAIR rule is more stringent than the vacated federal 

CAIR rule. The

Illinois NOx SIP Call rule for non-EGUs remains in 

place and is codified at 35111.

Admin. 

Code 

Part 217, 

Subpart U. Therefore, based on USEPA's 

statements, existing

Illinois 

rules are sufficient to be considered NOx RACT 

for both a number of EGUs and

non-EGUs subject 

to this proposed rule, although RACT rules may 

be necessary for

sources 

not subject to CAIR or the NOx SIP 

Call. 

IERG 

would contend there is no need

to adopt the additional 

control strategies under the proposed rule. Rather, a viable 

option

is available 

to rely on existing Illinois CAIR and NOx 

SIP Call rules for purposes of

compliance with Section 182 of the 

CAA.

B.  Demonstrating Attainment

As set forth above, in 

October 

2007, 

the Illinois EPA indicated that Illinois

appeared to 

be able to meet the ozone standard on schedule, 

and that the PM2.s standard

would be met everywhere in Illinois except 

Granite City. On November 14, 2008, 

via

website posting, 

the Illinois EPA announced that it intends to request 

USEPA to re-

designate the Chicago area to attainment 

of the 1997 8-hour ozone NAAQS. Illinois

EPA noted that a key 

element in its strategy to show attainment was 

USEPA's CAIR,

promulgated 

March 10, 2005. The Agency noted 

that, because the rule was vacated by

17

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

the U.S. 

Court 

of Appeals for the D.C. 

Circuit on July 11, 2008, emission reductions

expected from this program are uncertain. However, the Illinois EPA went on to note

that the modeling indicates that the 

State's emission 

reduction 

strategy is still sufficient 

to

demonstrate attainment for the 8-hour ozone standard by 2009.

The Agency's request for re-designation is excellent news. IERG would further

contend that the request supports the proposition that the proposed rule, currently before

the Board for its consideration, is unnecessary at this time.

V.  CONCLUSION

IERG 

appreciates the opportunity to work in partnership with the Illinois EPA to

achieve effective emissions reductions. IERG would offer that the success of past efforts

to benefit the quality of the Illinois environment is in great 

part attributable to 

rules

proposed in such manner as to give attention to the requisite time and cost of

implementation. It will very 

difficult, 

if not impossible, for many affected facilities to

implement the proposed rule in the established time frame. It will be extremely difficult

for many to obtain and install important control technologies at reasonable cost. IERG

would ask, at a time of economic uncertainty, does it make sense to expend resources to

attain that which the State of Illinois already has attained, and to impose new rules to

meet federal requirements that the State of Illinois already has met? IERG thanks the

Board in advance for any consideration it may give to our comments.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

I appreciate the opportunity to share IERG's comments 

on this proposed 

rule. I

would be happy to 

answer 

questions 

regarding my testimony.

IERG reserves the right to supplement 

this pre-filed testimony.

Respectfully submitted,

Dated: November 25, 2008       

By:

/s/

Katherine 

D. Hodge

Katherine D. Hodge

Katherine D. Hodge

Monica 

T. Rios

HODGE DWYER 

ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523-4900

Alec M. Davis

General Counsel

Illinois Environmental Regulatory Group

215 East Adams Street

Springfield, Illinois 62701

(217) 522-5512

I ERG:001/R Dockets/Fil/R08-19/Pre-Filed Testimony 

of

DK

Himer

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:          

)

R08-19

NITROGEN OXIDES EMISSIONS FROM )  (Rulemaking - Air)

VARIOUS SOURCE CATEGORIES:  )

AMENDMENTS TO 35 

ILL. ADM. 

CODE 

)

PARTS 211 and 217           

)

PRE-FILED TESTIMONY OF DAVID J. KOLAZ

ON BEHALF OF THE ILLINOIS ENVIRONMENTAL 

REGULATORY GROUP

NOW COMES the ILLINOIS ENVIRONMENTAL REGULATORY GROUP

("IERG"), 

by

and

through 

its attorneys, Alec M. Davis and HODGE DWYER ZEMAN,

and submits the following PRE-FILED TESTIMONY OF DAVID J. KOLAZ 

for

presentation at the December 9, 2008, hearing scheduled in the above-referenced matter.

Pre-Filed Testimony of David J. Kolaz

I.    INTRODUCTION

My name is David Kolaz, and I am here today to testify on behalf 

of the Illinois

Environmental Regulatory Group ("IERG") in the matter of the Illinois Environmental

Protection Agency's ("Illinois EPA" or "Agency") nitrogen oxides rulemaking 

(R08-19)

also referred to as the NOx RACT rulemaking.

The purpose of my testimony 

is to 

provide 

the Board with information that will

show that the Agency's stated purpose for this rulemaking, its timing, and the form and

substance of the rule combine to create a 

rule 

that 

is untenable. The content and

requirements of the rule will be shown to be inconsistent with the reasons the Agency

presents as the basis for the 

rule's formulation. Finally, on behalf of IERG, I will present

suggestions on how the rule can be modified to achieve its stated purpose in a manner

that 

resolves many 

of

its current deficiencies.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

I am currently an environmental consultant and a licensed Professional Engineer

in the State of Illinois. My professional experience encompasses over 37 years 

of

environmental work in various facets of air pollution control. Before leaving State

government in December 2004, I served as Chief of the Bureau 

of Air for 

the

Illinois

EPA. In this capacity, I was responsible for the planning, development, and

implementation of the statewide air pollution 

control program 

designed to 

meet State and

federal clean air laws. During my tenure at the Illinois EPA, I was involved with all

aspects of the air pollution control 

program including 

air

monitoring, 

the

permit program,

emission inventory system, air quality planning, and the compliance and enforcement

program. I am a consultant to IERG where I provide assistance in resolving complex

technical challenges which often have social, economic, and political dimensions. I am a

graduate of the 

University 

of Illinois-Champaign with a Bachelor of Science Degree in

Aeronautical and Astronautical Engineering. I also have a Master of Science 

Degree in

Engineering from 

Southern 

Illinois University-Carbondale.

II.   RATIONALE FOR RULEMAKING

IERG understands the stated purpose in this proposed rule to be summarized as

follows:

1.

Achieve Emission Reductions to meet Illinois' obligations under Section

110 of the Clean Air 

Act

("CAA"), 

42

U.S.C. § 

7401, et seq., requiring the

preparation and submission of a State Implementation Plan ("SIP")

describing actions to be taken 

to reduce emissions sufficiently so as to

attain the National Ambient Air Quality Standards ("NAAQS") for ozone

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

("03") and fine particulate matter ("PM2.5") in the Chicago and St. Louis

nonattainment areas. Statement of Reasons, R08-19 at 1-2

(I11.Pol.Control.Bd. 

May 9, 2008) ("Statement of Reasons").

2.

Meet RA CT Requirements under Sections 172 and 182 of the 

CAA

that

requires 

the adoption in the nonattainment areas of all reasonably available

control measures ("RACM"), including reasonably available control

technology 

("RACT"). Id. at 5-7.

IERG agrees that the CAA obligations cited by the Agency must be addressed in

its SIP. However, IERG maintains 

that 

the rule, as proposed, 

goes beyond these

underlying obligations. If adopted as proposed, the rule would place unreasonable

burdens on affected entities, having potentially severe economic and 

social consequences,

and will not provide commensurate environmental benefits. IERG believes the Agency

can meet its CAA obligations with modifications to the rule that will resolve several

significant difficulties.

The next portion of my testimony will provide more information about the CAA

requirements the Agency has cited and will show how these relate to the Agency's

proposal.

A.  Emission Reductions

According to the Agency, the emission reductions from the proposed NOx RACT

rule serve as a necessary component of the Illinois SIP showing how Illinois will achieve

the NAAQS for ozone and PM2,5 in the Chicago and St. Louis nonattainment areas.

However, the Agency has not 

quantitatively 

defined the specific emissions reductions

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

needed from this NOx RACT proposal 

to contribute to a successful attainment

demonstration. Instead, Mr. Kaleel testified that 

the emission reductions it presented in

regards to this rulemaking were for 

illustrative purposes only and did not represent 

the

values 

that 

were used in the attainment demonstrations 

for ozone or PM2.5. Hearing

Transcript, R8-19 

at 108-109, 114 (I11.Pol.Control.Bd. Oct. 14, 2008).

The Agency does offer numeric 

reductions under this proposal with the Statement

of Reasons (Section 

V, page 11) and Technical Support 

Document ("TSD") (Section 10-

1, page 133) indicating the proposal would 

reduce NOx emissions by 46.3% or 20,666

tons per year from 2005 emission levels. But 

in light of Mr. Kaleel's testimony that this

number was neither a target nor a budget 

the Agency was seeking to achieve, this 

number

has little significance in terms of understanding the 

relevance of the emission reductions

to the underlying CAA 

requirements pertaining to the SIP. See Transcript at 

110.

Emphasizing 

this point, Mr. Kaleel stated that, "If there 

was a different total that we

achieved as a result of application 

of RACT, we'd have been comfortable 

with that

different 

total...." Id. at 110. As further evidence 

of the fact that the specific amount of

NOx emission reductions 

expected from this rule was not the basis 

for the substance of

the rule, the Agency did not conduct a sensitivity 

analysis to determine whether emission

reductions less than the 

amount derived from this rule would 

have a perceptible change in

the attainment modeling results. Id. at 93-94. 

Such an analysis would have allowed the

Agency to determine 

the impact that various levels of NOx emission 

reductions would

have on the model results, and thereby 

allow the Agency to propose a rule that achieved

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

those reductions by either meeting or exceeding the requirements for RACT, as

necessary.

For these reasons, IERG believes that it is proper to conclude that the principal

motivation for the form 

and

substance of 

this 

rule is 

the

Agency's 

goal of addressing the

CAA requirements pertaining to RACT. The specific amount of emission reductions

derived from the proposed rule, while important and 

useful, are 

not

the driving force

behind the rule. Otherwise, the Agency would have determined the impact that various

levels of NOx emission reductions would have on the attainment model results 

to ensure

that any rule it would propose would achieve those reductions while meeting or

exceeding RACT requirements.

B.  RACT Requirements

The United States Environmental Protection Agency ("USEPA") defines RACT

as "...the lowest emission limitation that a particular source can meet by applying a

control technique that is reasonably available considering technological and economic

feasibility." 44 Fed. Reg. 53762 (Sept. 17, 1979). (Emphasis added.) With regard to this

rulemaking, Section 172 of the CAA establishes the requirement for PM2.s RACT, and

Section 182 establishes the requirement for ozone RACT. 42 U.S.C. §§ 7502 and 7511a.

While both of these provisions pertain to the topic of RACT, there is a distinct difference

in

their scope. 

The

purpose 

of the following portion of my testimony is to describe the

options that the USEPA gives the Agency in fulfilling this federal requirement and to

show how these 

could 

be exercised in a manner that offers viable opportunities to resolve

the implementation difficulties with the Agency's proposed rule.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

1.

RACT for Ozone

The requirements 

for

NOx

RACT for purposes of the 8-hour ozone standard are

found in the USEPA's Final Rule To Implement the 8-Hour Ozone National Ambient 

Air

Quality Standard; 

Final Rule, 70 Fed. Reg. 71612 (Nov. 29, 2005) ("Final Rule"), and in

its Phase 2 of the Final Rule to Implement the 8-Hour Ozone National 

Ambient Air

Quality Standard-Notice 

of Reconsideration; 72 Fed. Reg. 31727 (June 8, 2007) ("Phase 

2

Final Rule"). IERG believes its following conclusions 

are relevant to the 8-hour ozone

nonattainment areas in Illinois and to the proposed NOx RACT rule, and offers them for

the Board's consideration.

a.

The requirement for NOx RACT is not predicated on an assessment 

of the

effectiveness of resulting emission 

reductions in contributing to the attainment of the

NAAQS for ozone, unless a waiver from NOx RACT 

is

sought 

under 

Section 

182(f) of

the CAA. Because the Agency 

has not requested such a waiver, NOx RACT is required

for Illinois' 8-hour ozone nonattainment areas, without regard to 

air quality benefit.

b.   The NOx RACT SIP 

for ozone was required to be submitted by

September 15, 2006; NOx RACT is to be implemented by 

May

1,

2009. See 40 C.F.R. §

51.912. One deadline 

has passed. The other cannot practicably be met, as the deadline

for implementing a rule that that the Board has not yet passed 

is but a mere five months

away.

c.

For EGUs in the St. Louis, MO-IL nonattainment 

area, compliance with a

USEPA 

approved Clean Air Interstate Rule ("CAIR") SIP is sufficient to satisfy NOx

RACT. See Phase 2 Final Rule at 31730.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

d.

For EGUs in the Chicago-Gary-Lake County, IL-IN nonattainment area,

compliance with CAIR is presumed to satisfy NOx RACT. Id.

e.

For EGUs, the USEPA considers SCR and SNCR to be beyond RACT.

Id. at 31734.

f.

For non-EGUs, compliance with the NOx SIP Call Program (codified at

35 111. Admin. Code Part 217, Subpart U) satisfies the RACT requirement and is

considered beyond RACT. 

See

Final Rule at 71656-57, paragraph (i).

g.

The authority for determining whether the CAA requirement for RACT is

satisfied rests with the USEPA. Therefore, IERG suggests that the USEPA's statements

in this regard, summarized in items c through f above, are an important consideration 

in

determining whether a control strategy constitutes RACT. IERG contends that the

provisions of the Agency's proposal are beyond 

RACT, despite the Agency's testimony

that the purpose of its rule is to satisfy the CAA RACT requirements, and not to go

beyond. Transcript at 91.

Regarding EGUs, the 

USEPA 

indicates that compliance with CAIR is presumed

sufficient to satisfy NOx RACT. For reasons more particularly 

described below, IERG's

position is that compliance with the Illinois CAIR rule constitutes RACT for EGUs.

The Agency's proposed NOx 

rule includes EGUs under Subpart M, which

establishes an emission limit of 0.091bs/mmBtu that must be met by May 1, 2010. Under

the proposed rule, EGUs can be exempted 

from 

Subpart 

M, provided the subject boilers

comply with 35 Ill. Admin. Code § 225.233 (Multi-Pollutant Standards ("MPS")) or 35

Ill. 

Admin. Code 

Part 225, 

Subpart 

F (Combined Pollutant Standards("CPS")). The MPS

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

and

CPS NOx emission 

rate 

requirement is 0.11 

lbs/mmBtu 

with a compliance date of

January 1, 2012. These same boilers are subject to Illinois' CAIR rule, 35111. Admin.

Code § 225.300. Illinois' CAIR rule, with an initial 2009 compliance period, is more

stringent than the vacated federal CAIR rule, especially considering Illinois' 5% New

Source Set Aside and its 25% Clean Air Set Aside. Therefore, based on the 

USEPA's

statements as previously set forth in this document, existing Illinois rules are sufficient to

be considered NOx RACT for EGUs.

Further, review of the Lake Michigan Air Directors Consortium ("LADCO")

Technical Support Document, referenced on the Agency's website, states that the

USEPA's 

February 2007 Integrated Planning Model 

3.0 ("IPM3.0") served as the source

of the EGU emission estimates used in LADCO's SIP modeling conducted for Illinois

and other LADCO states. See Regional Air Quality Analyses for 

Ozone, 

PM2.5, and

Regional Haze: Final Technical Support Document at 59 (April 25, 2008) ("Regional Air

Quality Analysis").

For all of the foregoing reasons, it is IERG's position that compliance with

Illinois' 

CAIR 

rule constitutes RACT for EGUs. Therefore, Subpart M is unnecessary

for purposes of this rulemaking.

Regarding non-EGUs, the 

USEPA 

has clearly stated that it considers compliance

with the NOx SIP Call to satisfy the requirement for RACT. The USEPA stated:

The NOx SIP 

Call 

is estimated to achieve a beyond-RACT degree of

control regionally, and sources were required to install any controls

needed for compliance no later than May 2004. Under these

circumstances, 

EPA believes that the NOx SIP call constitutes RACT

for those sources covered by the NOx SIP Call, regardless of the

manner of compliance of individual sources (e.g., control equipment

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

installation or purchase of allowances from other sources). EPA is making

this finding now for 

all

areas in 

the NOx SIP call region, such that States

need not submit 

RACT analyses 

for

sources subject to the NOx SIP

call that are in compliance with 

a

SIP approved 

as meeting the NOx

SIP call.

Final Rule at 71657. (Emphasis added.)

The

NOx SIP Call requirement for non-EGUs is satisfied in Illinois through

compliance with 35 Ill. Admin. Code Part 217, Subpart U, which is an approved part of

Illinois' SIP. IERG maintains that 

the USEPA 

would 

clearly consider non-EGUs, subject

to the Agency's proposed NOx RACT rule, to be meeting NOx RACT under the current

Subpart U.

2.   RACT for Fine Particulate Matter (PM2.5)

The requirements for NOx RACT for purposes of the PM2,5 

annual standard are

found in 

the USEPA's Clean Air Fine Particle Implementation Rule; Final Rule, 72 Fed.

Reg. 20586 (April 25, 2007) ("PM Final Rule"). IERG believes its following 

conclusions

are relevant to the PM2,5 nonattainment areas in Illinois, and to the proposed NOx RACT

rule, and offers them for the Board's consideration.

a.

If the nonattainment area will achieve compliance within five years of the

area's designation (i.e., by April 5, 2010), RACT is not required if it cannot be

implemented 

in time to obtain significant emission reductions during 2008. That is,

RACT must be in place in time to advance the attainment date by one year or more,

otherwise it is 

not required. Since 2009 is the last calendar year in which to attain the

standard by April 5, 2010, then the attainment date could only be advanced by one year

by the application of RACT, if RACT were in place by the start of 2008. Id. 

at 20613.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

b.

If attainment will not be achieved by April 5, 2010, RACT 

is required

only to the extent that it advances the attainment date by one or more years. The USEPA

stated:

Because EPA is defining RACT and RACM as only those reasonable,

technically and economically feasible measures that are necessary for

attainment as expeditiously 

as practicable, the State need not adopt all

feasible, reasonable measures. The State may exclude those reasonable

measures that, considered collectively, would not advance the attainment

date.

Id. at 20614.

c.

For EGUs, 

compliance 

with a USEPA approved Clean Air Interstate Rule

("LAIR") SIP is sufficient to satisfy the requirement for NOx RACT. Id. at 20628,

paragraph 8(b)(2).

d.

NOx RACT controls are to be implemented by the start of 2009. Id. at

20623.

Based on the USEPA's statements, 

as outlined above, IERG maintains that the

USEPA 

would consider EGU boilers, subject to the Illinois CAIR rule, as achieving

RACT. These limits for Illinois EGUs become 

effective January 1, 2009.

Regarding non-EGUs, for reasons described below, IERG contends that the

USEPA would not require 

RACT be implemented for the April 5, 2010 compliance date.

Such emission limits could not be implemented in time to advance the compliance date

by one or more years, because 

in

order to 

do so, they would have to have been in place by

January 1, 2008.

The Agency has not yet submitted its PM2.5 SIP demonstration, which was due by

April 5, 2008. Nor does it appear that the 

Agency has made a final determination

10

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

regarding when it 

will submit the PM2.5 SIP. The Agency has opined that it does not

think that the Chicago or St. Louis nonattainment areas would be attaining the PM2.5

standard by the compliance date. Transcript at 89. However, it appears 

that the Agency

has not yet completed its PM2.5 attainment analysis in order to determine whether

attainment can be achieved by the April 5, 2010 date, or whether 

an extension will be

required. 

Until the Agency completes its PM2.5 attainment analysis, it is not possible to

determine if RACT controls on non-EGUs would advance the compliance 

date by one 

or

more 

years.

It, therefore, seems reasonable to conclude that the Illinois 

CAIR 

program is

sufficient to satisfy any 

NOx

RACT requirement for 

EGUs. Further, NOx RACT for

non-EGUs has not been demonstrated to be needed or required for attainment of the

PM2,5 standard.

C.  Summary and Conclusions Regarding the Agency's Rationale 

for the

NOx RACT Rulemaking

The emission reductions that would result from the Agency's 

NOx

RACT

rulemaking 

do not represent a specific numerical target that the Agency has identified as

an essential component of its ozone or PM2.5 SIPS. In fact, the values that have been 

used

in the modeling 

do not correspond with the emission reduction numbers that the Agency

cites in its Statement of Reasons for this rule. See Transcript at 114; Illinois EPA Post

Hearing 

Comments, 

R08-19 

at 3 (I11.Pol.Control.Bd. Nov. 5, 2008). Instead, the

proposed rule is driven by the Agency's obligation to address RACT requirements under

Sections 172 and 182 of 

the CAA. The USEPA is the arbiter in regards to whether or not

the

Agency has met its RACT requirements. Based on the USEPA's statements in this

11

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

regard, 

it is clear that RACT obligations are satisfied by EGUs for both ozone and PM2.5

by their compliance with Illinois' CAIR rule, 35 Ill. Admin. Code Part 225, 

Subpart 

D.

The requirement 

for ozone RACT for non-EGUs is met by compliance with the NOx SIP

Call program, 35 Ill. Admin. Code Part 217, Subpart U. And, absent completion of a

PM2,5 attainment analysis, it is impossible 

to

determine 

if RACT controls for the affected

non-EGU units would advance the compliance date by one or more years. Consequently,

this rule is unnecessary for these emissions units.

III.  NOx RULE COMPLIANCE DATE

The Agency's proposed rule establishes a compliance date of May 1, 2010, which

occurs 

after the required attainment dates for the ozone and PM2.5 nonattainment areas.

Therefore, IERG views the May 1, 2010 compliance date to be inconsistent with the

USEPA's requirements and questions how the Agency's proposed NOx RACT limits, if

adopted under this rule, would contribute to attainment of the ozone standard or

"advance" the PM2,5 attainment date. In addition, IERG questions the practicality of the

proposal with regard to the physical ability to actually achieve emission reductions in

time 

to

impact 

the attainment status, given the scope of the 

changes 

that will be required

to the physical plant of existing facilities in order to meet the proposed emission limits by

May

1, 2010.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

A.  Inconsistency with Federal Requirements

The USEPA required that the RACT SIP for ozone be submitted by

September 15, 2006, with the EGU RACT SIP deadline extended to July 9, 2007. The

Agency has not submitted the required RACT SIPS although, under federal rules, 

RACT

is to be implemented by both EGUs and non-EGUs by May 1, 2009. See 40 C.F.R. §

51.912. As previously stated, the USEPA views EGUs subject to CAIR, and non-EGUs

subject to the NOx SIP Call, as having achieved NOx RACT. IERG suggests that NOx

RACT already is being achieved for those emission units 

subject to both the Illinois

CAIR rule and the non-EGU NOx SIP Call rule, 35 11. Admin. Code Part 217, Subpart U,

and that Illinois EPA rely on those existing programs to affirmatively demonstrate

compliance with the CAA NOx RACT requirement.

Therefore, in accord with the information presented above, IERG believes the

proposed rule is unnecessary for the stated purpose of demonstrating compliance with the

CAA

RACT requirements of 

Section 

182 for EGUs and large non-EGUs. This rule may

be necessary to address NOx RACT for non-EGUs for ozone that are not subject to the

NOx SIP Call 

requirements of 35 Ill. Admin. Code Part 217, Subpart U. However, as

will become evident later in my testimony, alternative emission 

limits for the Agency's

proposed RACT limits can be considered RACT, can be implemented by May 1, 2010,

and will achieve emission reductions that will still support the 

Agency's attainment

demonstrations.

The PM2,5 NOx RACT SIP 

was required to be submitted by April 5, 2008 and

implemented by January 1, 2009. See 40 C.F.R. § 51.1010. The Agency has not yet

13

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

submitted its NOx RACT SIP. Similar to ozone, the USEPA 

considers EGUs'

compliance 

with 

CAIR 

to satisfy RACT requirements for PMZ.5. NOx 

RACT for non-

EGUs is required only if demonstrated that it 

is needed to advance the attainment date by

one year or 

more.

The Agency's proposed 

rule would have to have been in effect beginning

January 

1, 2008, if it were needed to advance the PM2.5 compliance 

date of April 5, 2010,

by one year. To impact 2009 sufficiently 

to qualify for a one-year extension of 

the PM2.5

attainment date based on a "clean" 2009 calendar year, the 

proposed rule would need to

be in effect by January 

1, 2009. Since the Agency has apparently not completed 

or

presented its PMz,5 SIP, the purpose of the expected 

reductions from the Agency's

proposed rule are unclear. 

As will be addressed subsequently, the 

largest portion of the

expected reductions will come from 

Illinois' CAIR rule, which already has been

promulgated, and is 

recognized by the USEPA as constituting RACT.

B.

Implementation Practicality

The interval between 

rule promulgation and a May 1, 2010 

compliance date is

likely to be short, and there is a great deal 

that must be accomplished to implement 

any

significant capital project. The Agency's testimony implied 

it believed the time frame to

be adequate for industrial facilities to 

make modifications. However, its statements

demonstrated that it did not explicitly consider the 

time frame necessary for such major

modifications and that the consideration 

given to this critical issue was little 

more 

than

superficial. Transcript at 14-15, 21-24.

14

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

Based on industry's experience, the process of preparing 

a permit application and

obtaining a permit requires six months, at a minimum. Contractual arrangements with

vendors cannot be completed until permits are received. Competition for 

equipment 

and

construction 

services can realistically be expected to cause additional delays. Recently,

for example, some IERG Members have sought estimates for the continuous emission

monitoring systems 

to

be required 

under the proposed rule and have found that delivery

could not be expected sooner than one year from the order date. The time required for

installation is in addition to the delivery date. Regarding installation 

of some of the types

of equipment needed to comply with the proposed rule, some IERG Member facilities

require plant outages that need significant advanced planning on the order 

of three to 

five

years. Finally, capital projects of the magnitude anticipated by the proposed rule require

financial arrangements that, under standard industry finance practices, cannot be arranged

prior to the promulgation of the rule. In better economic times, such arrangements

require one to three month minimums, depending upon the amount being financed.

In summary, the compliance date is 

unreasonable 

in

terms of both the USEPA's

regulatory requirements and the complexity of the task of complying with the rule in the

time frame specified. IERG believes, 

and

respectfully 

encourages the Board to concur,

that the Agency can comply with the USEPA's RACT requirements for EGUs and large

non-EGUs and can satisfy SIP requirements under existing rules 

and regulations.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

IV. PROPOSED NOx EMISSION LIMITS

The Agency has provided an analysis of 

NOx emission reduction strategies for a

variety of source categories in its TSD. IERG agrees with these analyses to the extent

they reflect technologies that are technically feasible as a general matter. 

However,

missing from 

the analyses is an explanation addressing the practical aspects that describe

how these technologies are "reasonably available," considering not 

only 

whether

technology 

exists but the economic reasonableness of employing the technology. IERG

believes that the Agency's TSD is deficient in the following regard:

1.

Economic reasonableness is 

affected by the period of time allowed for

compliance. The TSD failed to consider the time frame allowed under the Agency's

proposed rule when assessing economic implications. The TSD neither identified 

nor

evaluated the steps involved in, or the time required for, bringing a RACT project from

concept to full implementation, to assess the economic impact of the proposed 

compliance

period.

2.

Data provided in the TSD, and relied upon for purposes of this

rulemaking, were often times for installations inconsistent with the content of the rule.

These included emission rates for new installations rather than retrofits, emission rates for

units of a size that were smaller than those affected by the rule, and units that included

emission rates for SCR control technologies the Agency witness identified as unnecessary

for

achieving the proposed limits. Transcript at 26-27.

3.

The TSD included various emission limit ranges and other such

information the Agency apparently deemed relevant to its RACT determination. From

16

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

this information, the Agency derived its proposed emissions limits, 

though 

in

several

cases, the TSD would seem to support the selection of less stringent limits. The TSD does

not offer any analysis or rationale that describes the Agency's reasoning for selecting the

particular emission limits that it chose, though its testimony shows that it did not consider

the particular industrial facilities present in Illinois other than in a categorical sense. Id. at

15-16.

4.

The TSD did not provide any mention of or reference to the USEPA's

view of RACT for various source 

categories. 

For

example, the TSD discusses SNCR and

SCR as RACT options for EGUs, though the USEPA has clearly stated it considers these

technologies beyond RACT.

5.

The economic analysis in the TSD assumes that the affected units are

uncontrolled. Thus, the cost effectiveness of the control technology presented in the TSD

is computed as a function of a larger emission reduction than would be achieved with a

unit that already has adopted NOx reduction technologies. A number of units, potentially

affected by the proposed rule, are subject to existing rules that have required NOx control

technology. Id. at 118-121.

6.

The economic analysis used numerous cost projections and assumptions,

without adequate justification. The past two years have seen escalating costs for materials

and labor, as well significant changes in the financial sector. None of these appear 

to

have

been considered in the analysis of cost or availability. For example, the TSD provides

information on the cost of continuous emission monitors, but has failed to determine

current cost or availability of these systems.

17

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

Based on deficiencies as noted above, IERG believes 

the Agency's TSD should

only be viewed as describing 

potential technologies for controlling NOx emissions, 

with

hypothetical costs that may not be applicable 

to any particular installation. To be of use

to identify RACT 

limits in Illinois, the costs must be updated using the economic

conditions of the past year, consideration 

must be given to the time frame being allowed

for

the

rule, and some assessment must be made of retrofit installations 

for industrial

boilers and process heaters 

of a type potentially impacted by this rule. An example 

of the

type of problem not included in the TSD analysis is that faced 

by petroleum refineries.

These facilities must schedule 

significant projects in accordance with turnaround 

cycles,

which require three to five year lead times. 

The TSD does not acknowledge this as an

issue of the type pertinent to the 

determination of "technically feasible or economically

reasonableness."

The inconsistency 

of the Agency's logic in regard to RACT for 

EGUs is

illustrated by the fact that the proposed 

rule 

gives 

these affected units until May 1, 2010

to

meet 

a 0.091bs/mmBtu 

limit, provides an exemption that allows them 

to meet a 0.11

lb/mmBtu limit by January 1, 2012, but 

essentially uses the emission reductions from 

its

CAIR 

rule for EGUs in its modeling demonstration 

which is equivalent, for the ozone

season, to the NOx SIP Call level for EGUs of 

0.15 lbs/mmBtu. In the meantime, the

Agency has 

determined that the ozone standard has been achieved 

in the Chicago area

already and will be achieved in the St. 

Louis area by the required attainment date. The

TSD

also 

discusses both SNCR and SCR as potentially 

required for RACT when the

USEPA has stated that it considers 

these technologies to be beyond RACT.

18

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

For these reasons, IERG believes that the emission limits proposed in the

Agency's rule 

cannot be viewed as representing RACT, as a general matter. Should

IERG be unsuccessful in its attempt to convince the Board that Illinois meets the federal

RACT requiring under those rules 

currently 

in place 

for EGUs and non-EGUs, IERG is

prepared to offer alternative emission limits to those proposed by the Illinois EPA under

its rule.

V.  IERG'S SUGGESTED RULE CHANGES

IERG believes that modifications can and should be made 

to the 

Agency's

proposed rule to address the deficiencies already identified, and to resolve other problems

that create difficulties with rule implementation as identified below.

A.

Section 217.150 - Applicability

Cement kilns and aluminum reverberatory or crucible furnaces should not be

included in proposed 

Section 

217.150(a)(2) because no such 

units currently exist in the

applicable areas designated by Section 217.150(a)(1)(A) or (B), as substantiated by the

Agency's testimony. Transcript 

at 60-61. Any 

new facility 

with such a unit in the

applicable areas would be subject to controls stricter than RACT.

If new nonattainment 

areas are identified 

in

Illinois, this proposed rule would

need to be amended to incorporate those areas if NOx reductions are deemed necessary

and appropriate 

to

address 

the air 

quality 

conditions. 

For

example, if the USEPA

designates Massac County or Rock Island County as nonattainment for the 24-hour PM2.5

standard, a USEPA proposal which the Agency opposes, 

the

Agency 

will need to identify

appropriate 

strategies to meet those standards which may or may not affect cement kilns

19

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

and aluminum melting furnaces. 

It is important to note that the 

PM2,5 standard that 

forms

part of 

the basis for the Agency's proposed 

NOx rule is an annual standard 

which would

require a separate and additional 

analysis. Id. at 57-59. 

The Agency stated in its

testimony 

that it did not believe that sources 

in Massac County impacted 

the

nonattainment area. 

Id. at 59-60. On the basis of the existing 

PM2,5 RACT requirements,

if

implementation of RACT would 

not advance the attainment date, 

RACT is not

required. Note 

that it would not advance the attainment 

date in the Massac County 

area

if, as the Agency testified, sources 

in Massac County are not impacting 

the nonattainment

measurements. 

For these reasons, there is no 

compelling reason to include units 

that do

not exist in the applicable areas 

identified in the proposed NOx 

RACT rule.

B.

Section 

217.154 - Compliance Date

The compliance date 

is impractical for certain categories 

of facilities, such as

petroleum refineries, 

and for those facilities 

that require significant advanced 

planning to

implement major capital projects. 

The emission limits 

in the proposed rule are overly

stringent. 

They will require facilities to plan 

in advance to implement control 

measures

to minimize significant disruption 

in their operations, 

and call for major outages for

installation purposes. IERG submits 

that any emission reduction that 

cannot be

accomplished by May 

1, 2009, the date USEPA requires 

compliance with RACT, 

is not

reasonably available. Although 

the Agency proposes a compliance date 

in its rule one

year beyond the USEPA 

requirement for ozone (see 

40 C.F.R. § 51.912), IERG believes

this is still an inadequate period 

of time in which to accomplish 

the task. IERG suggests

three possible 

options that are not mutually exclusive 

and which could be 

implemented in

20

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

combination. The first option is to adjust several of the emission limits to values that

would be considered "reasonably available" given the time frame that exists for

implementation. The second option is to extend the compliance date to allow sufficient

time to implement the rule for source categories such as petroleum refineries that have

clearly 

identifiable issues with the schedule. The third option is to incorporate a

provision in the rule that would allow a site specific RACT determination. IERG is

willing to work with the Agency to develop a solution to this real and significant

problem.

C.  Section 157 

-

Testing 

and

Monitoring

The procurement of continuous emission monitoring systems ("CEMs"), and their

installation, can take two to three years in the current market environment. IERG

believes that the Agency understands this difficulty and has indicated a willingness to

work toward a reasonable accommodation. A provision needs to be made to allow

additional time for 

CEMs 

installation. Likewise, a provision 

should be included to allow

exceptions from the stack testing in the proposed rule, where it can be shown that such

exceptions are necessary to accommodate safety, economic or 

technical concerns.

D.  Section 217.158 - Emission Averaging Plans

The proposed rule restricts 

the use 

of units to be 

used 

in

averaging 

plans 

to those

that commence operation after January 1, 2002. The Agency's testimony supports this

provision as being necessary 

to

account for emission reductions beyond 

the base year of

2002. Transcript at 79-83. Emission reductions are impacted by the shutdown, startup,

and modification of units on an ongoing basis, and must be continuously tracked 

and

21

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

tabulated by the Agency. It is necessary to have an accounting 

system that

accommodates the dynamics of industrial development and economic growth and

downturns. It is important for both energy and economic efficiency that new units be

allowed 

to average with older units. IERG believes that the Agency can, and should,

accommodate these circumstances. Older units can then be retired or their operations

reduced in a more 

efficient 

manner, if 

the composite emission reductions of newer units

can be credited within an averaging plan. The resolution of this issue can be as simple as

removing 

the January 

1, 2002 restriction, 

and expanding the definition of "replacement

unit."

E.

Subpart D - Industrial Boilers

The emission limits for industrial boilers are unnecessarily restrictive given the

time frame allowed for compliance with the rule, the range of RACT limits that are used

elsewhere, 

and the relatively small difference between the emission reductions achievable

under the Agency's proposal and IERG's alternate proposal. Exhibit 1 to my testimony

shows the Agency's proposed emission limits and those proposed by IERG. IERG used

the information provided by the Agency in Tables C-2, F-1, and G-1 of its TSD to

determine the relative difference between these two limits. Exhibit 2 to my testimony

shows the results of applying those limits to the same units used by the Agency.

As can be seen from a comparison of Exhibit 2 and the Agency's Table 

C-2 from

its TSD, 2005 emissions from boilers represent about 12% (5,299 tons per year) of the

total emissions of 44,625 tons per year shown in the Agency's Table C-2 of its TSD. The

Agency's Table C-2 shows that it would expect an emission reduction of 61% (3,231 tons

22

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

per year) from its proposal. The data presented in Exhibit 2 shows a reduction of 42%

(2,245 tons per year) from IERG's proposed limits, which is 987 tons per year less than

the Agency's value. This 987 tons per year difference represents just 2% of the total of

44,625 tons per year. It is extremely unlikely that this small difference would have any

impact on the attainment demonstration. However, IERG's proposed limits are more

practically achievable in the time frame allowed though some affected units could 

still

have difficulty meeting the limits, hence the accommodations identified above for

proposed 

Section 

217.154.

F.  Subpart E - Process Heaters

Most 

of the process 

heaters affected by this rule are located at petroleum

refineries operated by CITGO, ConocoPhillips, and ExxonMobil, all members of IERG.

These refineries 

cannot 

make changes to their process heaters without planning the work

to occur during maintenance turnarounds. The emissions from the process heaters in this

category were estimated by the Agency 

to equal 3,710 tons per year in 2005, which is 8%

of the total 2005 NOx emissions (44,625 tons per year) shown by the 

Agency in Table C-

2

of

its TSD. The Agency's proposal shows an expected reduction of 1,060 tons per year

(28.6%) in 2005 from the total of 3,710 tons per year 

from process heaters. This

reduction represents 5% of the 

total emission reductions (20,666 tons per year) the

Agency shows in its Table C-2.

IERG understands that the Agency is aware of the difficulties that its proposed

rule poses in terms of the logistics associated 

with achieving compliance in a manner that

does not create significant refinery disruptions. Given the relatively small amount of

23

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

emissions involved, and the fact that it appears that the Agency used the emission

reductions from the 

USEPA 

refinery consent decrees for the attainment modeling

conducted by LADCO, IERG suggests the Agency consider the reductions from the

federally enforceable consent decrees to constitute RACT for these facilities. Section

217.182 (Exemptions) 

in the Agency's proposed 

rule 

could be modified to include this

exemption.

G.  Comments on Other Subparts

IERG has the following comments on Subparts G, H, and M of the proposed rule:

1.   Subpart G - Cement and Lime Kilns

There are no cement kilns in the area covered by this rule; therefore, they should

not be included in 

the

rule.

2.   Subpart H - Iron and Steel and Aluminum Manufacturing

There are no permitted or operating aluminum reverberatory or crucible furnaces

in the area covered by this rule; therefore these should not be included in the rule.

3.

Subpart M - Electrical Generating Units

The LADCO attainment modeling referenced by the Agency indicates that EGU

emissions were incorporated into the model using CAIR S02 and NOx estimates derived

from the USEPA's Integrated Planning Model 3.0. Regional Air Quality Analyses at 59.

EGUs in Illinois were listed as having a NOx emission rate for base year 2002 of 0.35

lbs/mmBtu. Id. at 53. The Illinois CAIR rule and the NOx SIP Call rule for EGUs use an

emission rate of 0.15 lbs/mmBtu as the basis for determining the amount of allowances

24

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

for the period 2009 through 2014, which represents a 57% reduction from base year

emissions.

Since, as previously described in my testimony, the USEPA has stated that CAIR

constitutes RACT, the CAIR rule should be considered RACT for EGUs. 

Subpart 

M is

unnecessary for purposes of achieving the Agency's stated goals of achieving RACT

level reductions. Furthermore, the Agency's proposed Subpart M emission limit of 0.09

lbs/mmBtu was not used in the LADCO modeling. Since it is clear that the USEPA will

accept the Illinois CAIR rule as NOx RACT, and since the attainment modeling

conducted by LADCO used the 

CAIR 

reductions, there is no programmatic reason to

retain Subpart M as part of the proposed rule.

VI.

SUMMARY AND CONCLUSION

My testimony has shown that the Agency's stated reasons for this rule, the timing

of the rule, and the emission limits proposed in the rule, have not been harmonized in a

manner that has produced a rule that effectively or efficiently achieves its purpose. IERG

has highlighted the inconsistencies within the rule, and identified some ways the rule can

be modified to meet regulatory requirements in a more reasonable manner. IERG stands

ready to work with the Agency, and others to make the changes necessary to resolve 

the

difficulties we have identified in a timely manner. On behalf of IERG, I thank you for

the opportunity to present this testimony for the Board's consideration and will be

pleased 

to answer any questions.

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

IERG reserves the right to supplement this pre-filed testimony.

Respectfully submitted,

Dated: November 25, 2008       

By:

/ s/ Katherine D. Hodge

Katherine D. Hodge

Katherine D. Hodge

Monica T. Rios

HODGE DWYER ZEMAN

3150 Roland Avenue

Post 

Office 

Box

5776

Springfield, Illinois 62705-5776

(217) 523-4900

Alec M. Davis

General Counsel

Illinois Environmental Regulatory Group

215 East Adams Street

Springfield, 

Illinois 62701

(217) 522-5512

I ERG:001/R Dockets/Fil/R08-19/Pre-Filed Testimony of D. Kolaz

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

EXHIBIT 

1

PROPOSED EMISSION LIMITS FOR INDUSTRIAL 

BOILERS

EMISSION LIMIT lbs/mmBtu)

FUEL      

TYPE

IEPA        

IERG

N l G

>100 mmBtu/hr            

.08

0.12

atura 

as

Oth

:5100 

mmBtu/hr         

Combustion tuning    

Combustion tuning

or

er

Gaseous

Auxiliary boiler at EGU, oil or

0.08

Fuels

natural gas, :_250 mmBtu/hr,

(unless 

_:100 

mmBtu/hr)

Exempt

:20% 

capacity 

factor

>100 mmBtu/hr            

0.10            

0.20

Distillate   

:_100 

mmBtu/hr         

Combustion 

tuning    

Combustion tuning

Fuel Oil

Auxiliary boiler at EGU, 

oil or

0

10

natural 

gas, 

_5250 

mmBtu/hr,

.

(unless:100 

mmBtu/hr)

-

Exempt

520% capacity factor

>100 mmBtu/hr            

0.15            

0.20

Oth Li id

5_100 

mmBtu/hr         

Combustion tuning    

Combustion 

tuning

er qu

Fuels

Auxiliary 

boiler at EGU, oil or

0

15

natural 

gas, <250 mmBtu/hr,

.

(unless:100 

mmBtu/hr)

-

Exempt

520% 

capacity 

factor

>100 mmBtu/hr

0.10            

0.12

(circulating fluidized 

bed)

>250 mmBtu/hr            

0.18            

0.38

Solid Fuel

>100 mmBtu/hr,

0.25            

0.38

:250 mmBtu/hr

:100 mmBtu/hr         

Combustion 

tuning    

Combustion tuning

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *

EXHIBIT 2

E MISSION PROFILE FOR SUBPART 

D - INDUSTRIAL BOILERS

2 005 NOx

ANNUAL  

ESTIMATED NOX RACT REDUCTION

EMISSIONS   

AGENCY     

IERG

EMISSION CATEGORY DESCRIPTION   

I

(tpy)    

(%)

(tpy)-    

(%)

{tpy)

Gaseous Fuel-fired Boilers >100 mmBtu/hr, 

Total        

1,926.5   

69.2%  1,333.8    

54% 1,037.4

Gaseous fuel-fired Boilers < =100 mmBtu/hr, Total        

521.5  

15.0%   

78.2    

15%

78.2

D ist. oil Boilers >100 mmBtu/hr, Total                

22.3   

52.4%   

11.7   

5.0%   

1.1

Solid 

Fuel Boilers 

>250 

mmbtu/hr, Total             

2,330.2  

73.9%  1,722.3   

44.9%  

1,046.9

Solid 

Fuel <=250, 

>100 

mmbtu/hr, Total               

21.6   

63.8%   

13.8   

44.9%   

9.7

Solid Fuel <=250, >100 mmbtu/hr, Total              

476.7  

15.0%   

71.5   

15.0%   

71.5

BOILER TOTAL>>   

5,298.9   

61.0% 3,231.3   

42.4%1 2,244.8

Electronic Filing - Received, Clerk's Office, November 25, 2008

* * * * * Exhibits A & B to Hirner are separate * * * *