ILLINOIS POLLUTION CONTROL BOARD
December 13,1973
MT. CARMEL PUBLIC UTILITY,
Petitioner,
vs.
)
PCB 73—300
ENVIRONMENTAL PROTECTION AGENCY,
Respondent.
ORDER OF THE BOARD (by Mr. Seaman):
On November 5, 1973, Petitioner, Mt. Carmel Public
Utility Company, filed its Petition seeking amendment
of our Opinion and Order of October 18, 1973 (PCB 73-300).
ThereiD, we granted Petitioner’s request for Variance
from Rule 3-3.112 of the Rules and Regulations Governing
the Control of Air Pollution for two if its boilers stating,
“The Board is satisfied that Petitioner has applied itself
with good faith and diligence to the compliance program
ordered on November 11, 1971... .The alternative plan
submitted by Petitioner and contained in the body of this
Opinion is hereby approved.”
The alternative plan approved is as follows:
a) Conversion of Boiler No. 1 to gas and oil
to be completed by May 1, 1974, with the
boiler going out of service January 1, 1974;
b) Boiler No. 4, Petitioner’s last coal-fired
boiler, will be retired on or before June 30,
1974, in compliance with the Board’s original
Order.
Petitioner now requests that the Board modify its Order
of October 18, 1973, to defer conversion of Boiler No. 1
and retirement of Boiler No. 4 until October 31, 1974.
Petitioner contends that its ability to assure reliability
of service to its customers appears to be seriously
jeopardized by the developing situation regarding fuel
oil shortages if Petitioner is required to comply with
the existing Order of the Board.
As stated in paragraph 7 of Petitioner’s Supplemental
Petition for a Continuance of Variance filed with the Board
on July 25, 1973, Petitioner entered into a contract with
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Marathon Oil Company on October 10, 1972, for the purchase
of No. 2 fuel oil to be delivered from its Robinson, Illinois,
refinery. Marathon agreed to deliver six million gallons
during the first year of the contract, plus or minus 10,
with the quantity, quality and price subject to renego-
tiation at the end of each year of the contract. Petitioner
has been receiving deliveries from Marathon under this
contract since the conversion of boiler No. 5 was completed
in
March of 1973.
On
October
12,
1973,
the
Energy Policy Office of the
Department of interior issued its EPO Reg. 1-Mandatory
Allocation Program for Middle Distillate Fuels (see
Federal Register, Volume 38, No. 199-Tuesday, October 16, 1973).
Number 2 fuel oil being purchased by Petitioner from
Marathon Oil Company is covered by this mandatory fuel
allocation program. The regulation provides that each
wholesale purchaser of such fuel oil (which includes
utilities) will be entitled to receive allocations under
the
program from its suppliers on the basis of purchases
during the corresponding month of 1972. Mandatory allocation
of fuel oils under this order began November 1, 1973,
Insofar as Petitioner made
no
purchases of fuel oil in
1972, it has no basis -for the allocation of oil from any
supplier beginning November 1, 1973. However, paragraph
4 (d) provides:
“Any
wholesale purchaser who did not have a supplier
during 1972 may
apply to
the Department of
the
Interior and be
assigned a supplier.
Any
customer
so
assigned must be accepted by the supplier for
the
duration
of
the program. The Department
of
the Interior will develop and
publish
a set of
criteria under which such applications will be
considered.
The
criteria will include consideration
of
unusual conditions or misfortunes in the base
period, new investments, sales experience of comparable
purchasers, etc.”
Paragraph 4
(f) of
the Regulation provides in part that
if a supplier has insufficient supplies to provide each
of
the
wholesale purchasers which he supplied in :L972 (including
those purchasers assigned by the Department of the Interior)
with
a quantity equal
to the
1972 base
or adjusted base
period supply level, the supplier will allocate based on
proportional allocations. This portion of the regulation
contemplates that suppliers may be unable to meet their
obligations to supply wholesale purchasers which
they
supplied
in
1972 and those purchasers assigned to the supplier
by
the
Department of
the Interior.
—3—
Petitioner has received a letter from Marathon
Oil Company, dated October 16, 1973, from its Findlay,
Ohio, offices (Exhibit “A”) informing the Petitioner
of the mandatory allocation program and stating that
the program would impair the ability of Marathon to
supply the Petitioner with its fuel oil requirements under
the contract previously mentioned.
After seeking information from the Department of
the Interior at Chicago, Illinois, the Petitioner, on
October 22, 1973, wrote a letter to the Department of
the Interior, in the absence of a prescribed form, re-
questing an allocation of oil under paragraph 4 (‘d) of
the Mandatory Allocation Regulation and the assignment
of a supplier (Exhibit “B”). Since that time the
Department of
the Interior has supplied Petitioner with
forms, and an allocation of oil and an assignment of a
supplier has been requested on the prescribed form (Exhibit
C”
In view of the world-wide shortage of crude oil and
refining capacity, as well as the uncertainties of obtaining
the necessary allocations and suppliers from the Department
of the Interior, Petitioner does not consider it advisable
to proceed with the conversion of its Boiler No.
1 on
January 1, 1974. Also, under the circumstances, Petitioner
does not consider it prudent to take Boiler No. 4 out of
service on June 30, 1974. Petitioner’s ability to assure
reliability of service to its customers appears to be
seriously jeopardized by the developing situation regarding
fuel oil if Petitioner complies with the existing orders of
the Board. If Boiler
No.
1 is converted to oil as originally
proposed, and Boiler No. 4 is taken out of service on
June 30, 1974, and thereafter Petitioner should be unable
to secure a sufficient allocation of fuel oil, or if it were
unable to secure any allocation, Petitioner might become
largely or entirely dependent upon energy purchased from
Central Illinois Public Service Company through its presently
existing single-pole 69 KV transmission line intertie with
CIPS at Lawrenceville, Illinois. If Petitioner became entirely
dependent upon purchased energy, this 69 KV transmission
line would be wholly inadequate to supply the needs of
customers within Petitioner’s service area. Also, Petitioner
contends that if it had only limited generating capacity
because of inability to obtain fuel oil, and if Boiler No. 4
were out of service, and if this transmission line were also
taken out of service by windstorms, ice storms, lightning
strikes or other calamities such as automobile collisions with
poles, Petitioner
would
be either wholly unable to supply its
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service
area
with
electric power or would be
able
to supply
only
a
limited amount of electric power,
depending upon the amount of fuel oil
available
to it
for generation of power, and this situation
might exist for an extended period of time. Petitioner
argues that it is in the same dilemma if it does not
convert Boiler No. 1 to fuel oil, but takes Boilers
No. 1 and 4 out of service on June 30, 1974, leaving only
Boiler No. 5 available for power generation, in order
to bring itself into compliance with the previous Order
of the Board.
An additional possible complication is the fact
that Petitioner supplies steam to the Mt. Carmel plant
of the Flintkote Company which produces felt paper used
in
the manufacturing
of roofing materials and which employs
approximately 85 men. If Petitioner cannot lawfully burn
coal in any of its boilers after June 30, 1974, and if the
supply of fuel oil available to Petitioner is greatly
restricted, or unavailable, then Petitioner might be unable
to fulfill its contractual obligations with the Flintkote
Company to supply steam to its Mt. Carmel plant, as a
consequence of which the Flintkote plant would be required
to curtail or cease operations, with serious adverse effect
upon the economy of
the City of Mt.
Carmel and surrounding
areas.
As we stated in our Opinion and Order of October 18, 1973,
this Board is satisfied that Petitioner has applied
itself with good faith and diliqence to the compliance
program ordered. Petitioner’s present plight is the result
of factors beyond its power to influence. We will, therefore,
grant the requested modification of our opinion and Order
of October 18, 1973 (PCB 73-300) subject to certain conditions.
Petitioner is currently attempting to construct a
138 KV line (to be operated initially at 69 Ky) from the
Village of Keensburg, Illinois, to an intertie with Central
Illinois Public Service Company.at Albion, Illinois.
Petitioner has encountered numerous difficulties in obtaining
right—of-way easements for this line, and it is now certain
that construction cannot be completed by June 30, 1973,
as originally ordered by the Board. The Agency is of the
opinion that Petitioner has shown good faith in developing
the 138 KV line and that the problems encountered in said
development are not self-imposed.
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—5—
IT IS THE ORDER of the Pollution Control Board that
the motion of Mt. Carmel Public Utility Company to
extend the compliance date (June 30, 1974) stated in
our Opinion and Order of October 18, 1973 (PCB 73-300)
to October 31, 1974, be granted subject to the following
conditions:
1. Petitioner shall pursue, with all diligence
and dispatch, the acquisition of right-of-way easements
for its 138 KV line and the acquisition of sufficient
fuel oil commitments to allow conversion of its Boiler
No. 1 at the earliest possible date.
2. Petitioner shall file with the Agency quarterly
reports regarding its progress toward achieving the
objectives specified in Condition 1, above.
IT IS SO ORDERED.
I, Christan L. Moffett, Clerk of the Illinois Pollution
Control Board, certify hat the above Order was adopted
on this
(.~“
day of
_____________
1973 by a vote of
________
to
p
10—329