BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY,
AND ELECTRIC
ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
Respondent.
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PCB 09.21
(Variance - Air)
NOTICE
OF :FIlJNG
To: John Therriault, Assistant Clerk
Illinois Pollution Control Board
James
R.
Thompson Center
Suite II
~500
100 West Randolph
Chicago, Illinois 6060 I
Division
of Legal Counsel
lIIinois Environmental Protection Agency
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
PLEASE
TAKE NOTICE that I have today electronically filed with the Office of the
Clerk of the Pollution Control Board, RESPONSE TO RECOMMENDATION and
RESPONSE TO MOTION TO WAIVE NOTICE REQUIREMEl'c'TS,copies of which are
herewith served upon you.
Ameren Energy Generating Company
Dated: November 25, 2008
Amy Antoniolli
SCHIFF HARDIN, LLP
6600 Sears
Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Electronic Filing - Received, Clerk's Office, November 25, 2008
CERTIFICATE OF SERVICE
I, the undersigned, certify that on this 25th day of November, 2008, I have served
electronically the attached
RESPONSE TO RECOMMENDATION and RESPONSE TO
MOTION TO WAIVE NOTICE REQUIREMENTS, upon the following persons:
John Therriault, Assistant Clerk
Illinois Pollution Control Board
James R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 6060 I
John Kim
Illinois Environmental Protection Agency
Division
of Legal Counsel
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
and
by first class mail, postage affixed, upon:
Illinois Environmental Protection Agency
Division
of Legal Counsel
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
Renee Cipriano
Kathleen
C. Bassi
Amy Antoniolli
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago,
H1inois 60606
312-258-5500
Mr. Bradley
P. Halloran
Hearing Officer
Illinois Pollution Control Board
James
R. Thompson Center
100 West Randolph Street, Suite 11-500
Chicago, Illinois 60601
Kent Mohr
Illinois Environmental Protection Agency
Division
of Legal Counsel
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
Electronic Filing - Received, Clerk's Office, November 25, 2008
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY
RESOURCES GENERATING COMPANY,
AND
ELECTRIC ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Respondent.
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PCB 09-21
(Variance - Air)
RESPONSE
TO RECOMMENDATION
NOW COME AMEREN ENERGY GENERATING COMPANY, AMERENENERGY
RESOURCES GENERATING COMPANY, and ELECTRIC ENERGY, INC. (collectively,
"Ameren" or "Petitioners"), by and through their attorneys, SCHIFF HARDIN, LLP, and,
pursuant to Section 104.220
ofthe Illinois Pollution Control Board's ("Board") procedural rules
(35 Ill. Adm. Code 104.220), in response to the Illinois Environmental Protection Agency's
("Illinois EPA") recommendation to deny the petition as filed or, in the alternative, to grant the
petition subject to an additional condition as set forth in the recommendation. Ameren accepts
the stated condition and asks that the Board substitute paragraph F
of Ameren's compliance plan
(see
Petition, Section G, Par. 50(F» with the condition in its consideration of the petition for
variance. In support
of its response, Ameren provides the following:
Ameren filed a petition for variance from one requirement
of the Illinois Multi-Pollutant
Standard, 35 Ill. Adm. Code 225.233 ("MPS"), on October 1,2008 ("Petition"). The MPS
requires compliance with a declining sulfur dioxide ("S02") emission rate over time, including
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Electronic Filing - Received, Clerk's Office, November 25, 2008
an S02 limit of 0.33 pounds per million British thermal units ("lb/mmBtu") by 2013, declining to
a rate of 0.25 Ib/mmBtu in 2015. Ameren specifically seeks relief from Section
225.223(e)(2)(A), which requires compliance with the 0.33 Ib/mmBtu from January
1, 2013,
through December 31,2014, and instead requests the Board to allow Ameren
to meet a 0.50
Ib/mmBtu emission rate system-wide by January 1,2010, and then
to meet a 0.44Ib/mmBtu
emission rate, system-wide, by January
1, 2014. Ameren's request for relief would also require
compliance with an S02 emission rate
of 0.23 Ib/mmBtu by 2017 and several new nitrogen oxide
("NOx") rate requirements.
Section 104.216
of the Board'sprocedural rules requires the Illinois EPA to "make a
recommendation
to the Board as to the disposition of the petition" within 45 days after the
petition
is filed. 415 ILCS 5/37(a); 35 Ill. Adm. Code 104.216. Illinois EPA filed a
recommendation with the Board on November 17,2008, recommending that the Board deny the
petition
as requested, but stating that the Agency would not object to the requested relief if the
relief included a condition discussed by the parties subsequent to the filing
of the petition. After
the filing
of the petition, the parties discussed a system-wide annual average S02 emission rate of
0.43Ib/mmBtu (rather than 0.44Ib/mmBtu) for the period from January 1, 2014, through
December 31,2014.
Ameren acknowledges that the parties have engaged in discussions after the filing
of the
petition and accepts the condition presented
by Illinois EPA. There are, however, several
seemingly inconsistent statements in the lllinois EPA recommendation that Ameren addresses in
the following paragraphs.
First, there can be no doubt that we are in an economic crisis in this country and
globally. Further, the recent and impending changes in the environmental regulatory arena
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Electronic Filing - Received, Clerk's Office, November 25, 2008
regarding emission from coal-fired electric generating facilities are known and well reported,
with the
onlyuncertainty being the final resolution. Indeed, Ameren'sdecision to come to this
Board and seek relief was not made lightly especially as one
of the chief architects of the MPS
approach. In this variance proceeding, Ameren bears the burden under Section 35(a)
of the Act
to show that compliance with the MPS would impose an arbitrary and unreasonable hardship.
415 ILCS 5/35(a);
35 Ill. Adm. Code 104.238.
Ameren has, however, provided estimates, done prior to the vacatur
of the Clean Air
Interstate Rule ("CAIR"),
of their capital costs of compliance with the Illinois CAIR, the Illinois
mercury rule (including the MPS), and Illinois' requirements
to address visibility as well as the
attainment
of both the ozone and PM2.5 National Ambient Air Quality Standards ("NAAQS") for
comparison. Due
to the recent bankruptcy filing of Lehman Brothers, which is believed widely
as precipitating the current financial crisis gripping the economy, the size of Ameren
Corporation'scredit facilities were effectively reduced
by up to $121 million.
l
Compliance with
environmental obligations is dependent upon securing adequate capital funding. The relief
sought in this petition for variance would allow Ameren to defer approximately $500 million in
environmental capital expenditures scheduled for the 2009-2012 timeframeto subsequent years
when the regulatory landscape is better defined and stability in the credit market returns.
Further, the Illinois EPA admits that the long tenn viability and effect
of the CAIR and
Illinois CAIR rules are in question. Recommendation at
14, par.AO. Ameren maintains that
I
The current economic. andcrydit crisis has been felt more broadly by Ameren. On
October 20, 2008, issuance
of ten-year senior secured notes by one of Ameren's regulated
subsidiaries (AmerenIP)
was at an .effective interest rate of 10% andtookapproximatelythree
days to market. In comparison, prior to the onset ofthe economic crisis -in late summer 2008
Ameren debt with similarcredit quality
couldbe soldin hours and aian approximate rate of7%
to 7.5%. This issue is widespread. Recent utility long-term debt issuances (of equivalent credit
quality to Ameren subsidiaries) have been rare.
Electronic Filing - Received, Clerk's Office, November 25, 2008
given the combination of these factors, Ameren has clearly met its burden to show that
compliance with the MPS would amount to an arbitrary hardship - especially in light of the
reduced 2014 and 2017 S02 emission rates and additional emission rates for NOx. included in
the request for relief.
Second, the recommendation states that the requested relief would result in additional
S02 for the period
of2013
and beyond.
Ameren disagrees with this statement and has shared
with Illinois EPA its concerns regarding the implication this statement. As proposed, the
requested relief seeks to defer only the 2013 rate and not the 2015 rate which will remain
completely unchanged. In exchange for the deferral
of the 2013 rate, Ameren has agreed to
additional rate commitments both for S02 and NOx. These additional rate commitments coupled
with the 2015 rate, which remains unchanged, would actually achieve reductions greater than
provided under the MPS. Further, the even more stringent emission rate
of 0.43 Ib/mmBtu for
2014 that Ameren has agreed to meet will, in the Agency's own words, "result in a small net
environmental benefit, and given the vacatur of CAIR, will provide reductions in 2010 beyond
those currently required under federal and State law." Recommendation at 10, par. 28,
14, par.
40.
The Illinois EPA contends that Ameren has not identified any data or technical support
for the conclusion that the additional reductions in S02 emission rates would offset any
environmental impact resulting from the requested relief. This statement appears
to be
inconsistent with the Agency's statements found in other sections of the recommendation and
may be inadvertent or simply intended differently. This statement could also reflect the
Agency's position without considering Ameren's agreement to include the new system-wide
annual average S02 emission rate
of 0.43 Ib/mmBtu from January 1 through December 31, 2014.
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Electronic Filing - Received, Clerk's Office, November 25, 2008
Nonetheless, both parties' conclusions as to environmental impact are supported by the record of
the MPS rulemaking when considering Ameren's agreement to the more stringent system-wide
annual average S02 emission rate
of 0.43 Ib/mmBtu as requested by Illinois EPA.
Third, Illinois EPA states that permanent relief is generally provided
by an adjusted
standard proceeding under Section 28.1 of the Act. 415 ILCS 5/28.1. Ameren reiterates that
immediate relief, such that is available through a variance proceeding subject to a decision
deadline, rather than a rulemaking
or adjusted standard proceeding, is critical for Petitioners to
make compliance determinations and investment decisions in early 2009. Nonetheless, Ameren
will subsequently seek permanent reliefperhaps, as the Illinois EPA suggests, in the Illinois
mercury rule revisions currently pending before the Board. Amendments to 35 Ill. Adm. Code
225: Control
of Emissions from Large Combustion Sources (Mercury Monitoring), R09-10 (Oct.
3,2008).
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Electronic Filing - Received, Clerk's Office, November 25, 2008
Overall, Ameren agrees that the parties have engaged in discussions subsequent to the
filing
of the petition in which Petitioners agreed to a system-wide annual average S02 emission
rate
of 0.43 Ibs/mmBtu in 2014 which, coupled with the other new and existing rate
commitments, will result
in a small net environmental benefit through 2020. The Illinois EPA
states
it would not object to the requested relief so long as the compliance plan included this
SOz
rate for the period from January
1,2014
through December 31,2014, and Ameren accepts this
condition.
WHEREFORE, for the reasons set forth above, Petitioners AMEREN ENERGY
GENERATING COMPANY, AMERENENERGY RESOURCES GENERATING COMPANY,
and ELECTRIC ENERGY, INC., ask that the Board replace paragraph F
of Ameren's
compliance plan
(see
Petition, Section G, Par. 50(F) with a system-wide annual average S02
emission rate of 0.43 Ib/mmBtu from January 1,2014 through December 31,2014 in the Board's
consideration
of the petition for variance.
Respectfully submitted,
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY, and ELECTRIC
ENERGY, INC.,
By:
Dated: November 25, 2008
Kathleen C. Bassi
Renee Cipriano
Amy Antoniolli
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
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Electronic Filing - Received, Clerk's Office, November 25, 2008
AFFIDAVIT OF DARRELL E. HUGHES
I, DARRELL E. HUGHES, having first been duly sworn, state as follows:
1.
I am an employee of AMEREN SERVICES COMPANY which provides a
variety
of administrative and business services to Ameren Corporation and its subsidiaries
including petitioners AMEREN ENERGY GENERATING COMPANY, AmerenENERGY
RESOURCES GENERATING COMPANY, and ELECTRIC ENERGY, INC. I am a
Supervisor within the Treasury Department and in that capacity I am
familiar with the capital
budgets, credit ratings, and debt structures
of the Ameren Corporation and the petitioner
companIes.
2.
I have read the preceding Response to Recommendation.
3.
The statements of facts contained therein are true and correct to the best of my
knowledge and belief.
FURTHER, AFFIANT SAYETH NOT.
Subscribed and sworn to before me this
a<.
5
NOTARY PUBLIC
Carol A. Head. Notary Public
Notary Seal, State
of
Missouri. St. Charles County
Commission #06477170
My Commission Expires
11/20/2010
dayof
~~
,2008.
Electronic Filing - Received, Clerk's Office, November 25, 2008
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY,AMERENENERGY
RESOURCES GENERATING COMPANY,
AND ELECTRIC ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Respondent.
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)
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)
)
)
)
)
)
)
)
)
)
PCB 09-21
(Variance - Air)
RESPONSE TO MOTION TO WAIVE NOTICE REQUIREMENT
NOW COME AMEREN ENERGY GENERATING COMPANY, AMERENENERGY
RESOURCES GENERATING COMPANY, and ELECTRIC ENERGY, INC. (collectively,
"Ameren" or "Petitioners"), by and through their attorneys, SCHIFF HARDIN, LLP, and,
pursuant
to Section 101.500(d) of the Illinois Pollution Control Board's ("Board") procedural
rules (35
Ill.
Adm. Code 101.500(d)), to respond to the Illinois Environmental Protection
Agency's ("Illinois EPA") motion
to waive notice requirements. Ameren does not object to the
Agency'smotion, but respectfully requests that the Board find Ameren properly served the
Illinois EPA with the petition for variance in this matter. In response, Ameren provides the
following:
Ameren filed a petition for variance from certain requirements
of the Illinois Multi-
Pollutant Standard,
35 Ill. Adm. Code 225.233, on October 1, 2008 ("Petition"). Section
104.214(a)
of the Board'sprocedural rules requires the Illinois EPA to publish notice of the
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Electronic Filing - Received, Clerk's Office, November 25, 2008
petition for variance in a newspaper of general circulation in the county where the facility or
pollution source is located within
14 days after the Petition is filed. 35 Ill. Adm. Code
104.214(
a). The Illinois EPA published notification of the variance petition in seven
newspapers, appearing October
27 through October 30, 2008. On November 13, Illinois EPA
filed a certificate
of publication with the Board.
On November
17, 2008, the Illinois EPA moved the Board or hearing officer to waive the
14-day publication
of notice. 35 Ill. Adm. Code 104.214(a). The title, "Motion to Waive Notice
Requirement," mischaracterizes the nature
ofthe motion. The Illinois EPA'smotion does not
seek
to waive the notice requirement altogether, but rather seeks a retroactive extension of the
deadline within which
to publish notice. As such, the motion would more appropriately be
entitled a motion for extension
of the deadline to publish notice or a motion to waive the
deadline
to publish notice of the petition.
Although, Ameren does not object
to the Agency's late publication, since publication is a
statutory requirement and must be done, Ameren and the Board have potentially been prejudiced
by the late publication nor has the general public. The Board has a very tight timeframe in which
to render its decision regarding a request for variance. The lateness of the publication, though it
provided more time for members
of the public to request a hearing on the Petition, compressed
the time for any requested hearing
to be held, followed by the Board's deliberation process. A
request for hearing must be made within
21 days after publication. The two-week delay in
publishing notice reduced the Board'stime for deliberation by two weeks and exposed Ameren,
who specifically did not request a hearing, to a hearing and its associated costs in terms
of time
and preparation. Any requests in this matter were due
to be filed with the Board by November
20,2008.
35 Ill. Adm. Code 104.224(c).
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Electronic Filing - Received, Clerk's Office, November 25, 2008
The Illinois EPA clearly states that the delay in publication is "the fault of the
undersigned attorney." However, the Illinois EPA also lists as a contributing factor the fact that
Ameren served the petition on two attorneys who were out
of the office at the time. Though not
part
of the motion for waiver, the Illinois EPA notes in its recommendation that the Petition
should have been served on the Illinois EPA Chief Legal Counsel. Ameren objects to any
inference of improper service and asserts that service on the Illinois EPA Chief Legal Counsel is
not required
by the Board'sprocedural rules. Ameren properly served the Illinois EPA Division
of Legal Counsel with the petition for variance as required by Section lO1.304(g)(1). 35
Ill.
Adm. Code 1Ol.304(g)(1). Further, service by U.S. Mail is deemed complete four days after
mailing.
35 Ill. Adm. Code lO1.300(c). Ameren specifically listed two Illinois EPA attorneys
on the service list as a courtesy, but has no further way of confirming receipt of or intra-Agency
routing of the Petition.
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Electronic Filing - Received, Clerk's Office, November 25, 2008
WHEREFORE, for the reasons set forth above, Petitioners AMEREN ENERGY
GENERATING COMPANY, AMERENENERGY RESOURCES GENERATING COMPANY,
and ELECTRIC ENERGY,
INC, do not object to the Illinois EPA's motion for an extension of
time to file the notice and respectfully request that the Board find that the Petition was properly
served
on Illinois EPA.
Respectfully submitted,
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY, and
ELECfRIC
ENERGY, INC,
By:
Dated: November 25, 2008
Kathleen C Bassi
Renee Cipriano
Amy Antoniolli
SCHIFF HARDIN, LLP
6600
Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Fax: 312-258-2600
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Electronic Filing - Received, Clerk's Office, November 25, 2008
