IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

R06-26

NOTICE OF FILING

To:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

James R. Thompson Center

Suite 11-500

100 West Randolph

Chicago, Illinois 60601

Persons included on the

ATTACHED SERVICE LIST

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

Pollution Control Board the APPEARANCES OF KATHLEEN C. BASSI, STEPHEN J.

BONEBRAKE, and SHELDON A. ZABEL on behalf of DYNEGY MIDWEST

GENERATION, INC., and MIDWEST GENERATION, LLC; MOTION FOR LEAVE TO

FILE RESPONSES TO THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY’S

MOTION FOR EXPEDITED HEARINGS AND MOTION TO HOLD REQUIRED

HEARINGS IN SPRINGFIELD AND COLLINSVILLE, INSTANTER; RESPONSE TO THE

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY’S MOTION FOR EXPEDITED

HEARINGS; and RESPONSE TO THE ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY’S MOTION TO HOLD REQUIRED HEARINGS IN SPRINGFIELD AND

COLLINSVILLE, copies of which are herewith served upon you.

/s/

Kathleen C. Bassi

Kathleen C. Bassi

Dated: June 30, 2006

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

CERTIFICATE OF SERVICE

I, the undersigned, certify that on this 30

th

day of June, 2006, I have served electronically

the attached APPEARANCES OF KATHLEEN C. BASSI, STEPHEN J. BONEBRAKE, and

SHELDON A. ZABEL on behalf of DYNEGY MIDWEST GENERATION, INC., and

MIDWEST GENERATION, LLC; MOTION FOR LEAVE TO FILE RESPONSES TO THE

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY’S MOTION FOR EXPEDITED

HEARINGS AND MOTION TO HOLD REQUIRED HEARINGS IN SPRINGFIELD AND

COLLINSVILLE, INSTANTER; RESPONSE TO THE ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY’S MOTION FOR EXPEDITED HEARINGS; and RESPONSE TO

THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY’S MOTION TO HOLD

REQUIRED HEARINGS IN SPRINGFIELD AND COLLINSVILLE, upon the following

persons:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

James R. Thompson Center

Suite 11-500

100 West Randolph

Chicago, Illinois 60601

and electronically and by first-class mail with postage thereon fully prepaid and affixed to the

persons listed on the

ATTACHED SERVICE LIST

.

/s/

Kathleen C. Bassi

Kathleen C. Bassi

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

R06-26

APPEARANCE

I, KATHLEEN C. BASSI, hereby file my appearance in this matter on behalf of

DYNEGY MIDWEST GENERATION, INC., and MIDWEST GENERATION, LLC.

Respectfully submitted,

/s/

Kathleen C. Bassi

Kathleen C. Bassi

Dated: June 30, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

Joshua R. More

Glenna Gilbert

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

R06-26

APPEARANCE

I, STEPHEN J. BONEBRAKE, hereby file my appearance in this matter on behalf of

DYNEGY MIDWEST GENERATION, INC., and MIDWEST GENERATION, LLC.

Respectfully submitted,

/s/

Stephen J. Bonebrake

Stephen J. Bonebrake

Dated: June 30, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

R06-26

APPEARANCE

I, SHELDON A. ZABEL, hereby file my appearance in this matter on behalf of

DYNEGY MIDWEST GENERATION, INC., and MIDWEST GENERATION, LLC.

Respectfully submitted,

/s/

Sheldon A. Zabel

Sheldon A. Zabel

Dated: June 30, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

CH2\ 1448462.1

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

-1-

IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

)

COLLINSVILLE INSTANTER

NOW COME Dynegy Midwest Generation, Inc., and Midwest Generation, LLC.,

(“Petitioners”) by and through their attorneys, Schiff Hardin LLP, and move for leave to file

instanter the attached Responses to the Illinois Environmental Protection Agency’s Motion for

Expedited Hearings and Motion to Hold Required Hearings in Springfield and Collinsville. In

support of their Motion, Petitioners state as follows:

1.

The Illinois Environmental Protection Agency (“Agency”) submitted the

captioned proposed rulemaking to the Pollution Control Board (“Board”) on May 30, 2006. The

Board did not accept the proposed rulemaking for hearing until its meeting on June 15, 2006.

Included in the initial submittal were a Motion for Expedited Hearings and a Motion to Hold

Required Hearings in Springfield and Collinsville. The Board held in reserve its decisions on

these motions to reserve time for participants to file responses. Order, p. 2 (June 15, 2006).

2.

As the Board notes on page 2 of its June 15

th

Order, pursuant to 35 Ill.Adm.Code

§ 101.500(d), responses to motions must be filed with the Board within 14 days of service on the

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-2-

parties to a matter. However, whether these motions required response was not even clear until

such time as the Board had accepted the filing for hearing.

3.

The Agency is not prejudiced by the delay in receiving Petitioners’ Responses to

its Motions, and Petitioners would be unduly prejudiced and irreparably harmed if the Board

does not grant this Motion for Leave to File Instanter and subsequently consider Petitioners’

Responses.

WHEREFORE, for the reasons set forth above, Petitioners DYNEGY MIDWEST

GENERATION, INC., and MIDWEST GENERATION, LLC, request that the Hearing Officer

grant its Motion for Leave to File Responses to the Illinois Environmental Protection Agency’s

Motion for Expedited Hearings and Motion to Hold Required Hearings in Springfield and

Collinsville, Instanter.

Respectfully submitted,

DYNEGY MIDWEST GENERATION, INC. and

MIDWEST GENERATION, LLC,

by:

/s/

Kathleen C. Bassi

One of Their Attorneys

Dated: June 30, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

Fax: 312-258-5600

CH2\ 1466479.2

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

R06-26

MOTION FOR EXPEDITED REVIEW

NOW COME Participants, DYNEGY MIDWEST GENERATION, INC., and

MIDWEST GENERATION, LLC (collectively “Respondents”), by and through their attorneys,

SCHIFF HARDIN LLP, and, pursuant to 35 Ill.Adm.Code § 101.500(d), respond to the Illinois

Environmental Protection Agency’s (“Agency”) Motion for Expedited Review (“Motion”).

Respondents object to the Agency’s Motion because the deadline for submittal of a State

Implementation Plan (“SIP”) in this matter does not justify expedited review. Additionally,

Respondents object to the Agency’s request that the Board proceed to First Notice prior to

considering the merits of the proposal. In support of their Response, Respondents state as

follows:

1.

The Agency submitted the above-captioned regulatory proposal to the Board on

May 30, 2006, pursuant to Sections 10, 27, and 28 of the Environmental Protection Act (“Act”)

(415 ILCS 5/10, 27, and 28). Included in the submittal was the Motion.

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-2-

2.

As the Agency states in ¶ 8 of its separate Motion for Required Hearings in

Springfield and Collinsville,

1

it held six outreach meetings to discuss this proposed rule. These

meetings occurred weekly from January 24 through February 28, 2006. These outreach meetings

also addressed the pending mercury proposal, R06-25 (“the Mercury Proposal”).

3.

The Agency states that the U.S. Environmental Protection Agency (“USEPA”)

has already proposed Federal Implementation Plans (“FIPs”) for those states that fail to submit

SIPs providing for compliance with the emissions budgets set forth in the Clean Air Interstate

Rule (70 Fed.Reg. 25161 (May 12, 2005)) (“CAIR”) by September 11, 2006 (71 Fed.Reg. 25328

(April 28, 2006)). Motion, ¶6, citing CAIR. Even had the Agency submitted this proposal

pursuant to Section 28.5 of the Environmental Protection Act (415 ILCS 5/28.5) (“Act”) on May

30, 2006, the Board could not possibly have adopted any rule in time for the Agency to submit a

SIP by September 11, 2006. Therefore, given the eight-month delay between promulgation of

the federal CAIR and the Agency’s commencement of outreach and then the three-month delay

between the time the Agency ceased holding outreach meetings in this matter,

i.e.

, February 28,

2006, and the time the Agency submitted the proposal,

i.e.

, May 30, 2006, and given that the

Agency has suggested April 2007 to complete this rulemaking, Respondents conclude that the

Agency is accepting a FIP until such time as it submits a rule adopted by the Board as a

replacement for the FIP.

4.

The Agency states that it believes that this rulemaking must be promulgated by

April 2007 in order to avoid “administrative confusion for both the affected units and Illinois

EPA.” Motion, ¶ 8. The Agency, however, does not explain why April 2007 is a “magic” date.

The Agency does not explain why promulgating a rule later than April 2007 will create

1

Respondents are filing a separate response to the Agency’s Motion for Required

Hearings in Springfield and Collinsville concurrently with this Response.

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-3-

“administrative confusion.” The Agency has not explained why expedited review is necessary,

particularly considering that the Agency points out that USEPA will not allocate allowances until

July 1, 2007, and then will not record them into electric generating units’ (“EGUs”) allowance

accounts until September 1, 2007. Apparently, there was more than enough time for the Agency

to delay commencing outreach and then filing, and there is more than enough time for the Board

to promulgate a rule without expedited review. The Agency has not supported its Motion.

Moreover, the Agency’s unexplained delays in moving forward with its submittal should not

translate into a need for undue haste on the part of the Board.

5.

The Agency also requests that the Board proceed to First Notice without reaching

a decision on the merits. Motion, ¶ 11. Respondents believe that, because this rulemaking is

proceeding under Section 28 of the Act rather than Section 28.5, it is appropriate for the Board to

follow its usual practice and to consider the merits of the proposal prior to proceeding to First

Notice. The Board will gain neither time nor efficiency by proceeding to First Notice prior to

considering the merits of the proposal. Moreover, the Board is not required to proceed to First

Notice prior to considering the merits of the proposal under Section 28, in contrast to the

requirements of Section 28.5 of the Act. Because the Agency proposed this matter under Section

28, the Agency should not expect that the Board will proceed as if this proposal were submitted

pursuant to Section 28.5. Moreover, Respondents note that the Statement of Reasons contains

some information that is incorrect. As a minor example, Randolph Township, if there is one at

all, is not part of the 8-hour ozone nonattainment area. Motion, Fn. 2;

see

40 CFR § 81.314.

Therefore, the Statement of Reasons does not provide all of the information necessary for the

Board to proceed to First Notice, or, in the alternative, the information provided in the Statement

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-4-

of Reasons is not sufficiently accurate to support proceeding to First Notice where doing so is

not required by the statute.

6.

The Agency argued that it suffers staffing constraints as support for the Motion

for Required Hearings in Springfield and Collinsville, filed concurrently with its Motion for

Expedited Review as part of the initial submittal in this matter, noting that many of the same

Agency staff are necessary for both this matter and the Mercury Proposal. In their response to

the Motion for Required Hearings in Springfield and Collinsville, Respondents noted that they,

too, have staffing constraints and requested that the Board not schedule hearings in this matter

concurrently with or back-to-back to the hearings scheduled in R06-25. Respondents reiterate

that request here. Although the concept of “expedited review” is not defined by the Agency,

Respondents object to expediting the schedule of hearings in this matter where they would occur

concurrently with or back-to-back to the hearings currently scheduled in R06-25 or that may be

scheduled for the future. Respondents have limited environmental staff, only a few of whom are

available for assignment to these regulatory matters as well as the other matters currently under

development at the Agency that also affect EGUs. It is not possible for Respondents to properly

consider the Agency’s proposal and prepare for cross-examination of the Agency’s witnesses and

presentation of their own witnesses if these hearings conflict with the hearings in R06-25 as

described above. This would create undue hardship for Respondents. Therefore, Respondents

object to “expedited review,” particularly to the extent that it involves hearings that may conflict

with the hearings in R06-25.

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-5-

WHEREFORE, for the reasons set forth above, Respondents DYNEGY MIDWEST

GENERATION, INC., and MIDWEST GENERATION, LLC, object to the Agency’s Motion for

Expedited Review.

Respectfully submitted,

DYNEGY MIDWEST GENERATION, INC.,

and MIDWEST GENERATION, LLC

by

/s/

Kathleen C. Bassi

One of Their Attorneys

Dated: June 30, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

CH2\ 1448808.3

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

---

IN THE MATTER OF:

)

PROPOSED NEW CAIR SO

2

ANNUAL TRADING PROGRAMS,

CONTROL OF EMISSIONS FROM LARGE

SUBPARTS A, C, D, AND E

)

)

)

)

R06-26

IN SPRINGFIELD AND COLLINSVILLE

NOW COME Participants, DYNEGY MIDWEST GENERATION, INC., and

MIDWEST GENERATION, LLC (collectively “Respondents”), by and through their attorneys,

SCHIFF HARDIN LLP, and, pursuant to 35 Ill.Adm.Code § 101.500(d), respond to the Illinois

Environmental Protection Agency’s (“Agency”) Motion to Hold Required Hearings in

Springfield and Collinsville (“Motion”). Respondents do not object to the Agency’s Motion but

request that the Board also consider the staffing impacts to Respondents of multiple rulemakings

affecting Respondents as the Agency requests for itself. Additionally, Respondents request that

at least one hearing be held in Chicago. In support of their Response, Respondents state as

follows:

1.

The Agency submitted the above-captioned regulatory proposal to the Board on

May 30, 2006, pursuant to Sections 10, 27, and 28 of the Environmental Protection Act (“Act”)

(415 ILCS 5/10, 27, and 28). Included in the submittal was the Motion.

2.

In its Motion, the Agency states that “many of the Illinois EPA staff that will be

involved in the hearings for this rulemaking proposal will also be involved in the Illinois EPA’s

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-2-

recently filed rulemaking proposal concerning mercury emissions.” Motion, ¶ 5. The Agency

continues:

The potential for even some of those personnel to be forced to

choose between participating in one hearing at the expense of

missing another would impose a severe hardship upon the Illinois

EPA in presenting and defending the merits of its proposals.

Motion, ¶ 5.

3.

The staffing hardship that the Agency describes in its Motion applies as well and

likely to an even greater extent to Respondents, as development and implementation of

environmental regulations is not Respondents’ business. Respondents have a limited number of

staff persons who work in the environmental area and an even smaller number in their corporate

offices who are available for assignment to environmental issues and to these rulemakings. The

demands of two pending rulemakings in addition to the matters under development at the

Agency that will affect Respondents are quite taxing. Therefore, we also request that the Board

consider staffing constraints on Respondents as it schedules hearings in this matter.

4.

Concurrent with the filing of this Response, Respondents are filing a Response to

the Agency’s Motion for Expedited Hearings. Respondents note that the adoption deadlines

identified in the Motion for Expedited Hearings allow sufficient time for the Board to schedule

hearings in this matter that do not conflict with or occur back-to-back with hearings in the

proposed mercury rulemaking, R06-25, thereby reducing concerns with staffing and preparation

issues in both proceedings.

5.

While Respondents do not object to a hearing in Collinsville for the reasons set

forth in the Agency’s Motion, Respondents would prefer that the hearing more or less devoted to

presentation of any witnesses on behalf of Respondents occur in Chicago. Respondents’

counsel, as well as the counsel of other sources affected by this rulemaking and of environmental

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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-3-

groups that may participate in this rulemaking, are located in Chicago. Further, Chicago offers

greater ease of access to Respondents’ witnesses. Therefore, Respondents request that the Board

consider their preference for the hearing devoted to presentation of opponents’ case, assuming

such an organization of the hearings, to be held in Chicago.

WHEREFORE, for the reasons set forth above, Respondents DYNEGY MIDWEST

GENERATION, INC., and MIDWEST GENERATION, LLC, do not object to the Agency’s

Motion that the Board schedule hearings in Springfield and Collinsville but request that the

Board consider Respondents’ staffing and access issues as well as those of the Agency and (1)

not schedule the hearings in this matter concurrently with or back-to-back to the hearings in R06-

25 and (2) schedule a hearing in Chicago during which the Board anticipates that Respondents

would present witnesses.

Respectfully submitted,

DYNEGY MIDWEST GENERATION, INC.,

and MIDWEST GENERATION, LLC

by

/s/

Kathleen C. Bassi

One of Their Attorneys

Dated: June 30, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

CH2\ 1448565.3

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006

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SERVICE LIST

(R06-26)

John Knittle

Hearing Office

Illinois Pollution Control Board

James R. Thompson Center

100 W. Randolph

Suite 11-500

Chicago, Illinois 60601

knittlej@ipcb.state.il.us

Rachel Doctors, Assistant Counsel

John J. Kim, Managing Attorney

Air Regulatory Unit

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue, East

P.O. Box 19276

Springfield, Illinois 62794-9276

rachel.doctors@epa.state.il.us

john.kim@epa.state.il.us

Matthew J. Dunn, Division Chief

Office of the Illinois Attorney General

Environmental Bureau

188 West Randolph, 20

th

Floor

Chicago, Illinois 60601

Virginia Yang, Deputy Legal Counsel

Illinois Department of Natural Resources

One Natural Resources Way

Springfield, Illinois 62701-1271

David Rieser

James T. Harrington

McGuireWoods LLP

77 West Wacker, Suite 4100

Chicago, Illinois 60601

drieser@mcguirewoods.com

jharrington@mcguirewoods.com

Stephen J. Murawski

Sasha M. Reyes

BAKER & McKENZIE LLP

One Prudential Plaza, Suite 3500

130 East Randolph Drive

Chicago, Illinois 60601

Katherine D. Hodge

N. LaDonna Driver

HODGE DWYER ZEMAN

3150 Roland Avenue, P.O. Box 5776

Springfield, Illinois 62705-5776

nldriver@hdzlaw.com

CH2\ 1448451.1

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 30, 2006