RECEnfED
CLERK’S OFFICE
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
DL 0022005
STATE OF ILLINOIS
KINCAID GENERATION, L.L.C.,
)
Pollution Control Board
)
Petitioner,
)
)
v.
)
PCB No.2006-062
)
(Permit Appeal
—
Air)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
NOTICE
To:
Dorothy Gunn, Clerk
Robb Lyman, Assistant Counsel
Pollution Control Board
Sally Carter, Assistant Counsel
James R. Thompson Center
Division of Legal Counsel
100 W. Randolph Street
Illinois Environmental Protection Agency
Suite 11-500
1021 North Grand Avenue, East
Chicago, Illinois 60601
P.O. Box 19276
Chicago, Illinois 60601
Springfield, Illinois 62794-9276
Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph Street
Suite 11-500
Chicago, Illinois 60601
PLEASE TAKE NOTICE that I have today ~cr.tonica!iy filed with the Office ofthe
Clerk of the Pollution Control Board PETITIONER’S REPLY IN SUPPORT OF A PERMIT
STAY AND IN RESPONSE TO ILLINOIS EPA’S OPPOSITION TO PETITIONER’S
REQUEST FOR A STAY and MOTION FOR LEAVE TO FILE REPLY INSTANTER,
copies of which are herewith served upon you.
Dated: December 2, 2005
SCHIFF FIARDIN LLP
Sheldon A. Zabel
Kathleen C. Bassi
Stephen J. Bonebrake
Joshua R. More
Kavita M. Patel
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5567
FAX:
312-258-5600
-2-
RECE5~FrDCLERK’S OFFiCE
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
DEC
022605
PollutionSTATE OFConuojILL!~,t~
uJ1~..
KJNCAII) GENERATION, L.L.C.,
)
)
Petitioner,
)
)
v.
)
PCB No. 2006-062
)
(Permit Appeal
—
Air)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
MOTION FOR LEAVE TO FILE REPLY
INSTANTER
Pursuant to 35 Ill. Adm. Code 101.500(e), KINCAID GENERATION, L.L.C.
(“Petitioner”), respectftilly submits this Motion for Leave to File Reply
Instanter.
In support of
this Motion, Petitioner states as follows:
1.
Petitioner will be materially prejudiced unless it is allowed to file the attached
Reply. First, in its Motion in Opposition to Petitioner’s Request for Stay, Respondent Illinois
Environmental Protection Agency (“the Agency”) alleges that the Administrative Procedure
Act’s (“APA”) automatic stay provision, Section 10-65(b), does not apply. In the attached
Reply, Petitioner responds to the Agency’s arguments and demonstrates why Section 10-65(b) of
the APA does apply.
2.
Second, in its Motion in Opposition, the Agency argues that Petitioner’s asserted
justifications for an entire stay of the Clean Air Act Permit Program (CAAPP) permit pursuant to
the Board’s discretionary stay authority fail to demonstrate “a clear and convincing need for a
broader stay.” The Motion in Opposition reflects a significant change in the Agency’s position
-3-
concerning requests for permit stays, and Petitioner will be prejudiced unless it has an
opportunity to respond to these new arguments.
WHEREFORE, for the reasons set forth above, Petitioner Southern Illinois Power
Cooperative respectfully requests that the Board grant its Motion for Leave to File Reply
Instanter.
Respectfully submitted,
KINCAID GENERATION, L.L.C.
By:_____
One ofIts Attorneys
Dated: December 2, 2005
Sheldon A. Zabel
Kathleen C. Bassi
Stephen J. Bonebrake
Joshua R. More
Kavita M. Patel
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
Telephone: 312-258-5500
Fax: 312-258-5600
-4-
F1ECEnPr~D
CLERK’S OFFICE
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
D~C022095
KINCAID GENERATION, L.L.C.,
)
STATE OF ILLINOIs
)
Pollution Control Board
Petitioner,
)
)
v.
)
PCBNo.2006-62
)
(Permit Appeal
—
Air)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
PETITIONER’S REPLY IN SUPPORT OF A PERMIT STAY AND IN RESPONSE TO
THE AGENCY’S OPPOSITION TO PETITIONER’S REOUEST FOR A STAY
Petitioner, KINCAID GENERATION, L.L.C. (“Petitioner,” or “Kincaid”), by and
through its attorneys, submits this reply in support of (1) its position that the Clean Air Act
Permit Program (“CAAPP”) permit on appeal in this proceeding is not in effect, pursuant to the
Illinois Administrative Procedure Act (the “APA”), while this appeal is pending and until the
Illinois Environmental Protection Agency (the “Agency”) issues the permit after remand, and (2)
its request, in the alternative, that the Illinois Pollution Control Board (“Board”) grant
Petitioner’s request for a stay of the entire CAAPP permit pursuant to the Board’s discretionary
stay authority.’ This reply also responds to the Agency’s “Motion in Opposition to Petitioner’s
Request for Stay” (the “Opp.”).2 A motion for leave to file this reply is attached hereto and is
filed herewith.
The Agency notes that Petitioner did not expressly make an alternative request to stay
just the contested conditions, (Opp. at 2). That is correct. However, to the extent the Agency
implies that the Board does not have authority to grant relief that is not expressly requested, that
is inconsistent. The Board has the authority to grant appropriate relief including lesser relief than
that requested by Petitioner.
2
The Agency’s filing is captioned a “motion,” but the filing appears to be a response to
Petitioner’s positions and requests rather than a motion. For instance, the “motion” cites to the
INTRODUCTION
On November 2, 2005, KINCAID filed a Petition for Review (hereinafter “Petition”)
with the Board challenging certain permit conditions contained within the CAAPP permit issued
by the Agency. As part of its Petition, KINCAID asserted that, until the Board rules on the
contested conditions and the permit is issued by the Agency after remand with any changes
required by the Board, the entire CAAPP permit is not in effect (is automatically stayed3)
pursuant to Section 10-65(b) of the APA and the holding in
Borg-Warner Corp. v. Mauzy,
427
N.E. 2d
415,
56 Ill. Dec. 335 (3d Dist. 1981). In the alternative, Petitioner requested that the
Board, consistent with its grants of stay in response to stay requests in other CAAPP permit
appeals, exercise its discretionary stay authority and stay the entire CAAPP permit. On
November 18, 2005, the Agency filed a “Motion in Opposition” to Petitioner’s conclusion that
the entire CAAPP permit is stayed pursuant to Section 10-65(b) of the APA and to Petitioner’s
alternative request for a stay. The Agency incorrectly asserts that the APA’s automatic stay
provision, Section 10-65(b), does not apply, and that the Petitioner’s asserted justifications for an
entire stay of the CAAPP permit pursuant to the Board’s discretionary stay authority fail to
demonstrate “a clear and convincing need for a broader stay.”
ARGUMENT
The CAAPP permit is and should be stayed in its entirety, for the reasons discussed
below. First, pursuant to Section
10-65(b)
ofthe APA, the entire CAAPP permit issued by the
Agency does not become effective until after a ruling by the Board on the permit appeal and, in
time for responses to be filed and, in its conclusion, seeks no relief except that the Board “deny
the Petitioner’s request for a stay of the effectiveness of the CAAPP permit in its entirety.”
(Opp. at 2, 20).
For brevity, the effect of Section 10-65(b) of the APA is referred to herein as the
“automatic stay.”
2
the event of a remand, until the Agency has issued the permit consistent with the Board’s order.
In addition, to the extent necessary in light of the automatic stay under the APA, the Board
should exercise its discretionary authority and enter an order staying the entire CAAPP permit
because an ascertainable right warrants protection, irreparable injury will befall Petitioner in the
absence of an entire stay, Petitioner has no adequate remedy at law, Petitioner is likely to
succeed on the merits of its appeal, and the environment will not be harmed if the entire CAAPP
permit is stayed.
I.
THE
EFFECTIVENESS OF TIlE ENTIRE CAAPP PERMIT ISSUED BY
ILLINOIS EPA IS STAYED PURSUANT TO THE
APA
As the Agency recognizes, the automatic stay provision of the APA governs
administrative proceedings involving licensing and pursuant to
Borg-Warner,
under Section 10-
65(b) ofthe APA, the effectiveness of a license is stayed until a final administrative decision is
rendered by the Board.4 (Opp. at 3-4).
Indeed, the Agency concedes that the
Borg-Warner
decision is consistent with the involvement ofand the separate roles of the Board and the Agency
in permitting matters, that it is the “Board’s decision
. . .
that ultimately determines when the
permit becomes final,” and the “CAAPP program itself does not reveal the General Assembly’s
intentions to change this administrative arrangement.” (Opp. at 4).
Nonetheless, the Agency
asserts that the automatic stay provision of the APA, as applied by
Borg- Warner
to
environmental permits, does not apply because the General Assembly somehow exempted
CAAPP permit appeal proceedings in particular from the APA under 415 ILCS 39.5(7)(i)
without referring to either the APA or
Borg-Warner,
and that the APA’s grandfathering clause,
5
ILCS 100/10-1-5(a), excludes the applicability of the APA from this proceeding even though the
‘~
The APA also ensures that the Petitioner continues to abide by the terms of the
underlying state operating permits. 5 ILCS 100/10-65(b) and (Opp. 3-4).
3
CAAPP program, like the NPDES permitting program at issue in
Borg-Warner,
was not in effect
prior to July 1, 1977.
These assertions ignore controlling law, misinterpret the Illinois
Environmental Protection Act (the “Act”) and are incorrect.
A.
The General Assembly Did Not Exempt the CAAPP from the Automatic Stay
Provision of the APA.
The Agency’s first argument is that, even though the General Assembly included no
express exemption from the APA in Section 39.5 of the Act, the General Assembly nonetheless
signaled its intention to make CAAPP permits effective immediately upon issuance by the
Agency, in derogation of the APA’s automatic stay of effectiveness, by including a
“severability” provision in Section 39.5(7)(i) ofthe Act (“the severability clause”) that addresses
validity of permit provisions, not the effectiveness of a permit. (Opp. at 3-4). A close
examination of the Agency’s argument and the Act reveals that when the General Assembly
desires to exempt sections of the Act from the APA, it does so expressly, through references to
the APA, and it does not leave the divination of its intentions to inferences. Further, the
Agency’s argument misses the fundamental point that validity and effectiveness are two very
different legal concepts.
The Agency misplaces its reliance on the severability clause. That provision addresses
the validity of uncontested permit conditions. The issue before the Board, however, is not
whether uncontested conditions remain valid notwithstanding challenges to other provisions, but
whether the permit is in effect prior to the Board’s ruling on appeal. The Agency errs by
assuming, without support, that through a severability provision that does not even refer to
permit effectiveness, let alone the APA, the General Assembly intended to change Illinois law so
that the entire permit must remain in effect during the appeal. (Opp. at.
5-6,
18). The Agency’s
4
strained interpretation of the severability clause is premised upon a misunderstanding of the
applicability ofthe severability clause and the effect of a stay.
The first question before the Board is one of statutory construction. The cardinal rule of
statutory construction is that the Board must ascertain and give effect to the intent of the
legislature.
In re Marriage of King,
208 Ill.2d 332, 340, 280 III. Dec. 695, 699 (III. 2003). “The
legislature’s intent can be determined by looking at the language of the statute and construing
each section of the statute together as a whole.”
People v. Patterson,
308 Il1.App.3d 943, 947,
242 Ill. Dec. 518, 521 (2d Dist. 1999). Moreover, the language of the statute should be given its
plain and ordinary meaning.
Marriage ofKing,
208 Ill.2d at 340.
By construing Section 39.5(7)(i) of the Act along with each section of the Act together as
a whole, it is apparent that Section 39.5(7)0) is not intended to address when a permit is, or is
not, in effect, the question addressed by
Borg-Warner
and the APA. Section 39.5(7)0) of the
Act provides that “each CAAPP permit issued under subsection 10 of this Section shall include
a severability clause to ensure the continued validity of the various permit requirements in the
event of a challenge to any portions of the permit.” First, as conceded by the Agency, the
severability clause establishes CAAPP permit content and is, therefore, applicable to the Agency
but not binding on the Board. (Opp. at 18). Second, the choice of the term “validity” is
important and clearly demonstrates that the General Assembly was not addressing in this
provision when permits are effective but, instead, potential problems of legal enforceability of
the remainder of a permit when a portion of a permit is determined to be invalid (e.g.,
inconsistent with the governing law).
As the Agency concedes, Section 39.5(7)0) was included in the Act so that uncontested
conditions would “continue to survive notwithstanding a challenge to the permit’s other terms.”
5
(Opp. at
5). Survival of some permit terms when others are challenged has nothing to do with
when a permit is effective under Illinois’ administrative scheme. The plain and ordinary
meaning of “validity” in legal settings is “1egal
sufficiency, in contradistinction to mere
regularity.” Black’s Law Dictionary 1548
(7th
ed. 1999). Section
39.5(7)(i)
ofthe Act is nothing
more than a mechanism to ensure the legality of the remainder of a CAAPP permit when a
condition is judged illegal or void.
This concept is akin to typical severability provisions in
contracts that provide that the invalidity of one contract term shall not impact the validity of the
remainder of the contract. Such severability provisions do not affect the period during which a
contract is in effect, only the terms that may be enforced while the contract is in effect. This
view of Section 39.5(7)(i) is supported by the United States Environmental Protection Agency’s
(“USEPA”) interpretation of the model severability clause upon which Section 39.5(7)(i) is
based. On July 7, 1993, the USEPA in “Questions and Answers on the Requirements of
Operating Permits Program Regulations” explained that “the
severability clause (Section
39.5(7)0)
of the Act) is a provision that allows the rest of the permit to be enforceable when a
part oftheUndeterredpermit isbyjudgedthe
plainillegallanguageor
void.”of5
Section 39.5(7)(i), the Agency attempts to read into
the statutory language the key term the General Assembly chose not to include. According to the
Agency, “implicit in the statutory language is an unmistakable expression aimed at preserving
the validity and effectiveness of some segment of the CAAPP permit during the appeal process.”
(Opp. at 18, emphasis added). However, the General Assembly did not include the term
“effectiveness” in Section
39.5(7)0),
as discussed above, and the Agency’s assertion does not
A copy of the relevant pages of the July 7, 1993 “Questions and Answers on the
Requirements of Operating Permits Program Regulations” are attached hereto as Exhibit 1. The
remainder
of
the
document
can
be
found
at
http://www.epa. gov/Region7/programs/artdlair/title5/t5 indexbyauthor.htm.
6
make it so. Indeed, the Agency’s effort to import the term “effectiveness” into Section
39.5(7)(i)
merely shows that validity and effectiveness are two distinct terms. “Validity,” as previously
discussed connotes legality. The common and ordinary meaning of “effectiveness” has no such
coimotation. The applicable definition of the base word, “effect,” is “the quality or state ofbeing
operational.” Merriam Webster’s Collegiate Dictionary 367
(10th
ed. 1997).
Therefore,
“effectiveness” in the CAAPP permitting context means the time during which the obligations
set forth in the permit are put into operation. To read “effectiveness” into the statutory language
when the legislature chose to use “validity” results in an impermissible departure from the
unambiguous statutory language.
Patterson,
308 Ill.App.3d at 948 (“When the language of the
statute is unambiguous, the Board may not depart from the language and read into the statute
exceptions, limitations, or conditions.”).
The Agency also misconstrues the effect a stay will have on the legality of the
uncontested conditions. The Agency asserts that because
a component of a CAAPP permit shall retain a “continued
validity,”
...
uncontested conditions of a CAAPP permit must
continue to survive notwithstanding a challenge to the permit’s
other terms. This language “continued validity” signifies an
unambiguous intent to exempt some segment of the CAAPP permit
from any kind of protective stay during the permit appeal process.
(Opp. at 5-6).
The Agency seems to assume that a stay ofthe entire permit will somehow affect the “continued
validity” or “survival” of the uncontested conditions. This is a flawed assumption. The
automatic stay under the APA does not depend on or consider the merits of the CAAPP permit
requirements, but rather merely suspends the time required for performance of the CAAPP
permit requirements. A stay of the entire CAAPP permit, therefore, is not a challenge to any
7
portion of the CAAPP permit that will affect the “continued validity” or “survival” of the
uncontested conditions.
Finally, if the General Assembly intended to exempt the CAAPP from the automatic stay
provision of the APA, it would have expressly done so. One example of this exercise of
legislative discretion is found in Section 31.1 of the Act, the very section the Agency cites in
support of its proposition that the severability clause exempts the CAAPP from the APA.
Section 31.1 of the Act states that “Sections 10-25 through 10-60 of the Illinois Administrative
Procedure Act shall not apply to any administrative citation issued under subsection (b) of this
Section.” The General Assembly, therefore, knows how to explicitly exempt provisions of the
APA from the Act. In the present case it chose not to; there is no explicit exclusion of the APA
in Section
39.5(7)(i)
of the Act.
Since the language of Section 39.5(7)(i) is plain and
unambiguous, the Board can not expand its meaning to include an exemption from the automatic
stay provision of the APA. To do so would be an improper departure from the statutory
language.
B.
The APA’s Grandfatherin2 Clause Does Not Apply To the CAAPP.
The Agency’s second argument is that, pursuant to
5
ILCS 100/1-5(a) (“the APA’s
grandfathering clause”), the APA does not apply to this proceeding because the Board had issued
some procedural rules prior to July 1, 1977. More specifically, the Agency suggests that the
Board’s procedural rules adopted on October 8, 1970, in the R70-4 rulemaking (“general
procedural rules”) preclude APA applicability to CAAPP permit appeals because the general
procedural rules were adopted before July 1, 1977. (Opp. at 6-7). That argument, however, is at
odds with the appellate court’s ruling in
Borg-Warner
and the General Assembly’s intended
reach of the APA’s grandfathering clause.
8
The court
in
Borg-Warner
upheld the APA’s automatic stay provision in the context of a
renewal of a National Pollutant Discharge Elimination System (“NPDES”) permit sought from
the Agency.
Borg-Warner,
427 N.E. 2d 415, 421,
56
Ill. Dec. 335, 341 (3d Dist. 1981). The
court ruled that the APA’s grandfathering clause did not apply because there were no existing
procedures for NPDES licensing prior to July 1, 1977, the pertinent date for exceptions to the
applicability of the APA.
Id.
at 418. The NPDES rules at issue were written in a way that
conditioned their effectiveness upon a future event. The Agency argues that this fact makes
Borg-Warner
“inapposite here.” (Opp. at 7 n.2). The Agency misconstrues the significance of
the
Borg-Warner
decision. The APA applied in
Borg-Warner
because there were no NPDES
permitting procedures in effect as of July 1, 1977.
There were not CAAPP permitting
procedures in effect before July 1, 1977, either. The Agency apparently believes that
Borg-
Warner
was incorrectly decided but that is a question the Agency will have to take up with the
appellate court. Here, of course, that decision is controlling. Under
Borg-Warner,
the APA
applies in this permit appeal proceeding.
Consistently, the Board has cited and followed
Borg-Warner,
issuing opinions
recognizing the applicability ofthe automatic stay provision in the permitting context despite the
fact that the general procedural rules were promulgated prior to July 1, 1977.
See e.g., Arco
Products Company v. Illinois Environmental Protection Agency,
PCB
89-5 (February 2, 1989);
Village of Sauget v. Illinois Environmental Protection Agency,
PCB
86-57,
Monsanto Company
v. Illinois Environmental Protection Agency,
PCB 86-62 (Consolidated), (July 31, 1986);
Electric Energy v. Illinois Environmental Protection Agency,
PCB 85-14
(February 7, 1985).
The Agency has offered no contrary decision of this Board or any court. The Board should
therefore continue to follow
Borg-Warner
and determine that the APA’s grandfathering clause is
9
inapplicable because there were no existing procedures for CAAPP permitting as of July 1, 1977.
To hold otherwise would be contrary to
Borg-Warner
and the Board’s own precedent.
Furthermore, if the Agency’s argument is correct, there would have been no need for the
General Assembly to have expressly excluded the applicability of the contested case provisions
of the APA from Section 31.1 of the Act. The Agency argues
that “it is the procedures
applicable to contested cases and their point of origin that is relevant to this analysis, not the
advent of the permitting program itself.” (Opp. at 6-7). In other words, the Agency argues that
the contested case provisions of the APA do not apply in any contested case brought under the
Act because the general procedural rules “point oforigin” is before July 1, 1977. The legislature
was certainly aware of the “point of origin” of the general procedural rules and the APA’s
grandfathering clause when it drafted the explicit exclusion of the APA from Sectionil.Lofihe
Act. If the legislature intended for the APA’s grandfathering clause to exclude the contested
case provisions of the APA from the Act, there would have been no need for the legislature to
have expressly excluded the contested case provisions of the APA from Section 31.1 of the Act.
The legislature, therefore, did not intend for the APA’s grandfathering clause to limit the
applicability of the APA to the Act because the “point of origin” of the general procedural rules
is before July 1, 1977. Carried to its logical conclusion, the Agency’s argument would exempt
virtually every Board proceeding from the APA and, in fact, would exempt the proceeding of
any administrative body that existed before July 1, 1977, that had procedural rules in effect
before that date.
II.
THE BOARD SHOULD EXCERSISE ITS DISCRETIONARY AUTHORITY AND
STAY THE ENTIRE CAAPP PERMIT ISSUED BY THE ILLINOIS EPA.
In situations like this, where Section 10-65(b) of the APA applies, the entry of a stay
order is unnecessary as the stay provided by the APA is automatic.
See e.g., Arco Products
10
Company v. illinois Environmental Protection Agency,
PCB 89-5 (February 2, 1989);
Village of
Sauget v. illinois Environmental Protection Agency,
PCB 86-57,
Monsanto Company v. illinois
Environmental Protection Agency,
PCB 86-62 (Consolidated), (July 31, 1986);
Electric Energy
v. illinois Environmental Protection Agency,
PCB 85-14 (February 7, 1985). Nonetheless, and
without waiving its position that such a request is unnecessary in light of the APA, KINCAID
requests, in the alternative, that the Board exercise its discretionary authority pursuant to 35
Il1.Adm.Code
§
105.304(b) and enter an order staying the entire CAAPP permit.
The Board frequently grants requested stays of entire permits, often referring to various
factors considered under common law. The Board considers several factors including (1)
existence ofan ascertainable right that needs protection, (2) irreparable injury in the absence of a
stay, (3) the lack of an adequate remedy at law, (4) the probability of success on the merits, and
(5) the likelihood of environmental harm if a stay is granted.
See Bridgestone/Firestone Off-road
Tire Company v. illinois Environmental Protection Agency,
PCB 02-31 (November 1, 2001).
While the Board may look to these five factors in determining whether or not to grant a stay, it is
not confined exclusively to these factors nor must each one be satisfied.
Id.
The Board’s recent practice in other CAAPP permit appeals, which practice has not been
opposed by the Agency, has been to grant stays of the entire CAAPP permit when requested,
even when the entire permit was not contested.
See Lone Star Industries, Inc. v. IEPA,
PCB 03-
94 (January 9, 2003);
Nielsen & Brainbridge, L.L.C. v. IEPA,
PCB 03-98 (February 6, 2003);
Saint-Gobain Containers, Inc. v. JEPA,
PCB 04-47 (November 6, 2003);
Champion
Laboratories, Inc. v. IEPA,
PCB 04-65
(January 8, 2004);
Midwest Generation, LLC
—
Collins
Generating Station v. IEPA,
PCB 04-108 (January
22, 2004);
Ethyl Petroleum Additives, Inc., v.
IEPA,
PCB 04-113 (February 5,
2004);
Board of Trustees ofEastern illinois University v. IEPA,
11
PCB 04-110 (February 5, 2004). Notwithstanding the Board’s recent practice in the above-
referenced appeals and the Agency’s position in those appeals, the Agency now asserts that it
“has come to regard blanket stays of CAAPP permits as incongruous with the aims of the Illinois
CAAPP and needlessly over-protective in light ofattributes common to these appeals.” (Opp. at
8). The catalyst for the Agency’s sudden change of position appears to be a phone call from
USEPA. (Opp. at 16). Although the Agency argues that its “weighty concerns” are based on
state law, it is clear that it was not until the USEPA called the Agency that the Agency had the
epiphany that an entire stay of a CAAPP permit is improper. (Opp. at 16).
The Agency suggests that the reasons for an entire stay put forward by Petitioner justi~’
a stay of the contested conditions,6 but that certain reasons do not justify a stay of the entire
CAAPP permit. (Opp. at 8). To this end, the Agency challenges the first two of the five factors
the Board often looks to and the two additional reasons Petitioner put forth in its -Petition
--
a stay
of the entire CAAPP permit is necessary to avoid administrative confusion and appropriate
because IEPA failed to provide a statement of basis. Since the Agency is only challenging a
limited number of the reasons Petitioner set forth in its Petition for a stay of the entire CAAPP
permit, the Agency waives any objection to those reasons that it did not challenge and the Board
may grant a stay of the entire CAAPP permit based on the unchallenged reasons set forth in the
Petition.
Bridgestone/Firestone
at page 3.
A.
An Ascertainable
RiEbt
Exists That Needs Protection and Absent a Stay of
the Entire CAAPP Permit, Petitioner Will Incur Irreparable Injury.
The Agency’s first argument is that because Petitioner is not challenging the entire
CAAPP permit, an ascertainable right does not exist as to the uncontested conditions that needs
6
One of the conditions the Petitioner contests is the effective date. Therefore, a stay of
the contested conditions will result in a stay ofthe effective date, thus staying the effectiveness
of the entire CAAPP permit.
12
protection, and compliance with the uncontested conditions during the appeal process will not
result in irreparable harm. (Opp. at 10-1 1). The Agency seems to assume that the contested
conditions that pertain to such things as emissions testing, reporting, recordkeeping, and
monitoring are not interwoven in purpose or scheme with the remainder of the CAAPP permit.
This assumption is flawed. A close examination of the CAAPP permit reveals that a stay ofjust
the contested conditions would create confusion and leave at least some of the uncontested
conditions virtually meaningless. Further, such a limited stay would require Petitioner to comply
with provisions that are incorrect applications of legal requirements. For example, Conditions
7.l.3(b)(iii), 7.1.3(c)(iii), 7.1.7(a)(iv), 7.1.l0-2(a)(i)(D), 7.1.12(f), which were not contested, are
linked to contested conditions.
Therefore, if the Board were to only stay the contested
conditions, these uncontested conditions would become meaningless.
Petitioner’s right of appeal should not be cut short or even rendered moot by a limited
stay that would result in Petitioner having to comply with certain conditions before a legal ruling
that will or may affect the meaning of those conditions. Furthermore, as admitted by the
Agency, Petitioner should not be required to expend exorbitant costs in complying with
conditions whose meaning will be affected by the appeal process. (Opp. at 9). Since the
contested conditions are beyond the scope of the Agency’s statutory permit authority and are
interwoven with the remainder of the CAAPP permit, a stay of the entire permit is necessary to
protect an ascertainable right and avoid irreparable injury.
B.
The Absence of a Stay of the Entire CAAPP Permit Would Cause
Administratiye Confusion.
The Agency’s second argument is that, even though the permit appeal process is part of
the administrative continuum, no administrative confusion will result if a partial stay is granted
because the state operating permits become a “nullity” upon the issuance/effectiveness of the
13
CAAPP permit. (Opp. at 11). The Agency’s interpretation of the Act contravenes a basic canon
of statutory construction because it results in a superfluous interpretation of statutory language
--
if effectiveness and issuance are synonymous as the Agency alleges, Section 39.5(4)(b) or (g) of
the Act becomes superfluous.
Krafi Inc. v. Edgar,
561 N.E.2d 656, 661 (Ill. 1990)
Stern v.
Norwest Mortgage Inc.,
672 N.E.2d 296, 299 (III. App. Ct. 1996);
Roscoe Taylor v. illinois,
No.
93-CC-0083, 1995 WL 1051631, at ~3 (Ill. Ct. Cl. 1995).
The Agency takes issue with Petitioner’s reliance upon both Sections 39.5(4)(b) and
9.1(f) of the Act for the continuation of the state operating permit during the pendency of the
appeal. (Opp. at 11). However, in ascertaining the meaning of a statute, the statute should be
read as a whole with all relevant parts considered.
Patterson,
308 Ill.App.3d at 947, 242 III.
Dec. at 521. Petitioner’s reliance on both sections is necessary and, therefore, appropriate in
order to give effect to the language in the statute. Section 39.5(4) of the Act addresses the
transition from the state operating permit program to the CAAPP. A source’s state operating
permit is to remain in full force and effect until issuance of the CAAPP permit. See Section
39.5(4)(b) of the Act. Once the CAAPP permit has been issued, at least this portion of the
transition from the state operating permit program to the CAAPP has occurred. However,
Section 39.5(4)(g) says that the “CAAPP permit shall upon becoming effective supersede the
State operating permit.” (Emphasis added.) Under Illinois law, as discussed above, the CAAPP
permit is not effective if it has been appealed. Ifthe Agency is correct in its argument, there is
no permit in effect under which the source can operate if a stay is issued by the Board. The
General Assembly could not have reasonably intended for a source to operate without a permit.
Section 9.1(f) of the Act supports the distinction between Sections 39.5(4)(b) and
39.5(4)(g) of the Act in the context of appeals of CAAPP permits, and confirms that the state
14
operating permits remain in effect until “final administrative action” is taken on the CAAP
permit. Section 9.1(0 of the Act provides that “if a complete application for a permit renewal
is submitted to the Agency at least 90 days prior to expiration of the permit, all of the terms and
conditions ofthe permit shall remain in effect until final administrative action has been taken on
the application.” The Agency argues that this section applies only to New Source Review
construction permits because the context of Section 9.1 is the Clean Air Act. In actuality,
Section 9.1(0 of the Act is not limited to permits issued because of Clean Air Act requirements,
or even if it is, it would apply in the case of CAAPP permits because they are required by Title V
of the Clean Air Act.
First, New Source Review permits are not renewed.
They are
preconstruction permits that are followed by an operating permit. Therefore, Section 9.1(f) does
not apply to New Source Review at all, let alone only to New Source Review. Second, permits
issued because of Clean Air Act requirements generally require public notice, and the
applications must be submitted at least 180 days prior to expiration of the previous permit. See
Section 39(a) of the Act. Therefore, it is not limited only to permits required by the Clean Air
Act. A state operating permit, pursuant to Section 9.1(f) of the Act, continues in effect after its
expiration if the application for renewal is timely. In this ease, the application for renewal was
the application for the CAAPP permit. See Section 39.5(4)(a) of the Act. In order for Sections
39.5(4)(a), (b), and (g) of the Act to make sense in the context of general Illinois law, which has
not been superseded by the CAAPP as discussed above, the state operating permit continues in
effect during the pendency of the appeal of the CAAPP permit thus creating administrative
confusion if a stay ofthe entire permit is not granted.7
~Note that Section 39.5(5)(o) applies in appeals of renewal CAAPP permits.
15
C.
The Absence of a Statement of Basis Warrants a Stay of the Entire CAAPP
Permit.
The Agency’s third argument is that the lack of a statement ofbasis does not support the
need for a stay of the entire CAAPP permit because it does not render the entire permit defective.
(Opp. at 14). The current issue before the Board, however, is not whether the lack of a statement
of basis renders the permit defective, but whether the lack of a statement of basis justifies a stay
of the entire CAAPP permit. Petitioner, therefore, will not address the merits of why a statement
of basis renders the entire permit defective in this reply, but will set forth why the lack of a
statement ofbasis is a reason to stay the entire permit.
Section 39.5(8)(b) requires the Agency to explain the Agency’s rationale for the terms
and conditions of the CAAPP permit. A statement of basis is, therefore, necessary for the
permittee to fully understand the rationale behind each permit condition and ultimately affects
whether the permittee finds a condition to be objectionable. Since the Agency did not issue a
statement of basis, denying the permittee notice of the Agency’s decision-making rationale and
the opportunity to comment thereon, Petitioner effectively objects to each and every CAAPP
permit condition. The Agency concedes that the reasons put forward by Petitioner in its Petition
justify a stay of the contested conditions. Accordingly, the Agency’s failure to provide a
statement of basis justifies a stay of the entire CAAPP permit.
III.
THE STATUTORY OBJECTIVES OF THE CAAPP AND THE COMMON
ATTRIBUTES OF PERMIT APPEALS DO NOT WARRANT THE DENIAL OF A
STAY OF THE ENTIRE CAAPP PERMIT.
The Agency argues, without providing any support for its argument, that the Board
should not issue a stay of the entire CAAPP permit because it could lessen the opportunities for
citizen enforcement against Petitioner and the “cumulative effect” of stays sought by other coal-
fired CAAPP permittees would “effectively shield” the entire utility sector from potential
16
enforcement. (Opp. at 19) This argument is completely specious. The Act allows “any person”
to file a complaint with the Board against any person violating the “Act, any rule or regulation
adopted under the Act, any permit, or any term or condition ofa permit.”
See
Section 3l(d)(i) of
the Act. Therefore, a stay in this case or any of the other coal-fired CAAPP permit appeals will
not limit a citizen’s ability to bring an enforcement action.
The Agency also argues that Petitioner is not entitled to a stay of the entire CAAPP
permit because this appeal along with the other coal-fired CAAPP permit appeals are “protective
appeals.” Petitioner takes exception to the accusation that this appeal is protective. Petitioner
was active in the opportunities for public participation and issued written comments in response
to all of the iterations of the draft CAAPP permit. Petitioner filed this appeal because the
Agency failed to address serious issues raised by Petitioner during public participation, resulting
in a CAAPP permit that exceeds the Agency’s statutory authority. Petitioner and the Agency
anticipate that some of these issues will likely go to hearing.8
The Agency in its Motion For Extension of Time to File Record concedes that some of
this issues will likely go to hearing.
17
CONCLUSION
For the reasons set forth above, Petitioner contends that the CAAPP permit on appeal in
this proceeding is not in effect, pursuant to the APA, while this appeal is pending and until the
Agency issues the permit after remand, and requests, in the alternative, that the Board grant
Petitioner’s request for a stay of the entire CAAPP permit pursuant to the Board’s discretionary
stay authority.
Respectfully submitted,
KINCAID GENERATION, L.L.C.
by:
_________
One of Its Attorneys
Dated: December 2, 2005
Sheldon A. Zabel
Kathleen C. Bassi
Stephen J. Bonebrake
Joshua R. More
Kavita M. Patel
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Fax: 312-258-5600
CH2\ 1335181.1
18
EXHIBIT 1
QUESTIONS AND ANSWERS ON
THE REQUIREMENTS OF OPERATING PERMITS
PROGRAM REGULATIONS
Prepared By:
The U. S. Environmental Protection Agency
July 7, 1993
XNTRODUCTXON
This document summarizes questions and answers (Q’s & A’s)
on requirements and implementation of the Environmental
Protection Agency’s (EPA) final operating permits program
regulations. The operating permits regulations were published on
July 21, 1992, in Part 70 of Chapter I of Title 40 of the Code of
Federal Regulations (57 FR 32250)
.
These rules are mandated by
Title V of the Clean Air Act (Act) as amended in 1999.
The contents of this document reflect a wide range of
questions that have been asked of EPA concerning implementation
of the operating permits program. In part, the document reflects
audience questions and EPA’s responses at workshops and
conferences sponsored by EPA and by other groups at which EPA
personnel participated as speakers. Workshop attendees included
personnel from EPA Regional Offices, State and local permitting
agencies, industry representatives, and other individuals from
the interested public, including environmental groups.
Questions and answers are organized in chapters primarily
according to the sections of the Part 70 regulations with
additional topics covered in latter chapters.
This document is available in a WordPerfect 5.. file on
EPA’s electronic bulletin boards and will be periodically updated
by addition of more questions and answers. Each succeeding set
of additions to this document will be indicated so the user can
distinguish new material. As new material is added, it will be
designated in WordPerfect “redline” font. “Redline” font appears
differently (e.g., shading or dotted underline) according to the
printer being used. Example:
I
As each new addition of 0’s & A’s is made, the “redline”
font will be removed from the previous addition so that only the
latest material added will appear in “redline” font. Document
updates will be recorded as they are made.
This document responds to many requests for information
concerning implementation of Part 70. The contents are based on
the Part 70 requirements and the requirements of Title V.
Answers to questions are intended solely as guidance representing
the Agency’s current position on Part 70 implementation. The
information contained herein is neither rulemaking nor final
Agency action and cannot be relied upon to create any rights
enforceable by any party. In addition, due to litigation
underway, the Agency’s position on aspects of the
program
discussed in this document may change. If so, answers will be
1
revised accordingly. As with periodic updates to this document,
any change will be denoted with the Wordperfect “redline” font to
distinguish any revised answer from a previous version.
RECORD OF DOCUMENT UPDATES
Original document: July 7, 1993
First Update:
_____________
ii
TABLE OF CONTENTS
Page
4—1
4—1
4—2
4—2
4—3
.
4—3
4—3
4—4
4—4
4—5
4—5
4—6
4—7
5—1
5—1
5—1
5—2
5—2
5—3
5—3
5—4
1—1
.
2—1
2—1
2—1
2—1
2—1
2—2
2—3~
2—3
3—1
3—1
3—2
.
3—3
3—3
3—3
3—3
3—4
3—4
3—4
3—5
3—5
1.0 PROGRAM OVERVIEW
2.0 DEFINITIONS
2.1 Applicable Requirements
2.2 Affected States
2.3 Major Source
2.4 Potential to Emit
2.5 Regulated Air Pollutant
2.6 Regulated Pollutant for Fees
2.7 Responsible Official
3.0 APPLICABILITY
3.1 Sources Covered
—
General
3.2 Source Category Exemptions
3.3 “synthetic Minors”
3.4 Emissions Unit Coverage
3.5 Fugitive Emissions
3.6 Anolicability Duration
3.7 Section 112(rI Sources
3.8 Area HAP’s Sources
3.9 Acid Rain Source Obligations
3.10 Non-Act Requirements
3.11 Radionuclide Sources
4.0 PROGRAM SUBMITTALS
4.1 Program Submittal Content
4.2 EPA Review of Program Submittals
4.3 Interim Aporoval
4.4 Eauivalent Program Elements
4.5 Attorney General’s Opinion
4.6 Leaal Authority
4.7 Partial Programs
4.8 Operational Flexibility
4.9 “Off Permit”
4.10 Transition Plan
4.1. Judicial Review
4.12 Implementation Agreements
5.0 PERMIT APPLICATIONS
5.1 Apolication Content
5.2 Timely and Complete Submittal
5.3 Application Review
5.4 Insignificant Activities
5.5 Emissions Reporting
5.6 Confidential Information
.
5.7 Comoliance Plans
iii
5.8 Certification of Truth. etc.
5—4
5.9 Cross—Referencing
5—4
6.0 PERMIT
CONTENT
6.1 General Permit Content
6.2 Equivalency Determination
6.3 Federal Enforceability
6.4 Compliance Certification
6.5 Monitoring. Recordkeeping. Reporting
6.6 Inspection Provisions
6.7 General Permits
6.8 Permit Shield
6.9 Alternative Scenarios
6.10 Emeraency Defense/Updates
6.11 Noncomolving Sources
6.12 Model Permits
6.13 Emissions Trading
1.0
PERMIT PROCESSING
7.1 General Process
7.2 Administrative l½mendments
7.3 Minor Modifications
7.4 Significant Modifications
7.5 Aoplication Shield
7.6 Public Participation
7.7 Renewals
7.8 Reopeninas
7.9 Title I Modifications
7.10 Permit Denial
7.11 Temoorary Sources
8.0 PERMIT
REVIEW
8.1 EPA Review
8.2 Affected State Review
8.3 Public Participation
8.4 Data Management
9.0 PERMIT FEES
9.1 Presumptive Minimum Program Cost
9.2 Fee Demonstration
9.3 Funded Program Costs
9.4 Fee Schedule
9.5 small Business Program Funding
9.6 Phase I Source Fee Exemption
6—1
6—1
6—1
6—1
6—2
6—2
6—3
6—4
6—5
6—6
6—6
6—7
6—7
6—7
7—1
7—1
7—1
7—1
7—2
7—2
7—2
7—3
7—3
7—3
7—3
7—3
8—1
8—1
8—1
8—1
8—1
9—1
9—1
9—1
9—1
9—3
9—4
9—4
10.0 FEDERAL OVERSIGHT AND SANCTIONS
.
10—1
11.0 ENFORCEMENT AUTHORITY
11.1 Enforcement Authority
11.2 Criminal Authority
11—1
11—1
11—1
iv
12.0 PROGRAM INTERFACE
•
12-1
12.1 ~.fl
12—1
12.2 Section 112
12—2
12.3 New Source Review
12—2
12.4 Acid Rain
12—3
12.5 Enhanced Monitoring
12-9
12.6 Stratosoheric Ozone
12—9
13.0 MISCELLANEOUS
13-1
13.1 Indian Lands
13—1
13.2 Pollution Prevention
13—1
14.0
PART 71
14—1
v
6.0
PERMIT
CONTENT
6.1 General Permit Content
1. Must the SIP-approved emissions rate be included in the
permit, or is a Control Technology Guideline reasonably
available control technology limit sufficient?
The SIP—approved emissions rate is the applicable requirement
and must be included in the permit.
2. What is a severability clause?
The severability clause is a provision that allows the rest of
the permit to be enforceable when a part of the permit is
judged illegal or void.
6.2 Equivalency Determination
6.3 Federal Enforceability
1.
What are the limits on the additional requirements that a
permitting authority can impose on a source in the non-
federally-enforceable portion of the permit?
A permitting authority is free to add any “State-only”
requirements to the extent allowed by State or local law.
However, the permitting authority is also responsible for
enforcing the federally—enforceably portion of the permit and
EPA will exercise its enforcement oversight with regard to
those terms and conditions.
2. If a facility takes a tighter limit to create emission
credits, how is the new limit made federally enforceable?
The new limit is made federally enforceable by placing it in
the federally—enforceable part of the Title V permit, along
with appropriate compliance terms (e.g., monitoring,
reporting, and recordkeeping).
3. what is the mechanism to change or reverse “State-only”
conditions that became federally enforceable back to “State-
only” status?
The mechanism for changing the designation from federally
enforceable to “State—only” is the minor permit modification
process. These changes, if “State—only,” should not involve
applicable requirements and could be removed from the
federally-enforceable portion of the permit as long as none of
the restrictions on minor permit modifications in section
70.7(e) (2) (i) (A) are violated. If any of the restrictions in
6—1
CERTIFICATE OF SERVICE
I
hereby certify that on the 2’~day of December
2005,
I did serve, by electronic filing, by
electronic mail,
and by U.S. Mail postage prepaid, a true and correct copy of the attached
PETITIONER’S REPLY IN SUPPORT OF A PERMIT STAY AND IN RESPONSE TO
THE AGENCY’S OPPOSITION TO PETITIONER’S REQUEST FOR A STAY
and
MOTION FOR LEAVE TO FILE REPLY
INSTANTER,
upon the following persons:
Dorothy Gunn, Clerk
Pollution Control Board
James R. Thompson Center
100 W. Randolph Street
Suite 11-500
Chicago, Illinois 60601
Chicago, Illinois 60601
Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
James R.
Thompson Center
100 West Randolph Street
Suite 11-500
Chicago, Illinois 60601
Kathleen C. Bassi
Sheldon A. Zabel
Kathleen C. Bassi
Stephen J. Bonebrake
Joshua R. More
Kavita M. Patel
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Fax: 312-258-5600
CI12\ 1335699.1
Robb Lyman, Assistant Counsel
Sally Carter, Assistant Counsel
Division of Legal Counsel
Illinois Environmental Protection Agency
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
-5-
