First Draft GTG/ASM met/tjf

PROCEDURAL BACKGROUND

	On March 14, 2006, the Illinois Environmental Protection Agency (Agency) filed a proposal for rulemaking to limit mercury emissions from large coal-fired electrical generating units (EGU). The proposal was filed pursuant to Sections 9.10, 27, and 28.5 of the Act (415 ILCS 5/9.10, 27, and 28 (2004)). On March 16, 2006, the Board accepted the proposal for first notice under the “fast-track” rulemaking provisions of Section 28.5 of the Act (415 ILCS 5/28.5 (2004)), without commenting on the merits of the proposal.

	On April 20, 2006, the Board ruled, in response to various motions, that the Board has the authority under Section 28.5 of the Act (415 ILCS 5/28.5 (2004)) to reject a proposal filed by the Agency pursuant to Section 28.5, if the Board finds that the proposal does not meet the statutory requirements. The Board further found that the proposal met the statutory requirements of Section 28.5 of the Act because failure to adopt a mercury emissions standard could result in the USEPA enforcing the federal CAMR. The Board reasoned that the USEPA enforcing CAMR would constitute a “sanction” as that term is used in Section 28.5 of the Act (415 ILCS 5/28.5 (2004)).

	While the Board was considering the motions to remove the proposal from the fast-track procedures, Dynegy Midwest Generation, Inc. (Dynegy), Kincaid, and Midwest Generation, L.L.C. (Midwest Generation) (collectively plaintiffs) filed a complaint in the Sangamon County Circuit Court on April 3, 2006. That case is Dynegy Midwest Generation, Inc., Kincaid Generation, L.L.C., and Midwest Generation, L.L.C. v. PCB and IEPA, No 2006-CH-213. In that complaint, plaintiffs sought declaratory relief from the court that the use of the fast-track procedures was inappropriate for this rulemaking, that the schedule set by the Board and the hearing officer could not proceed, and that Section 28.5 was unconstitutional. The plaintiffs also asked for injunctive relief. On April 17, 2006, the plaintiffs filed a motion seeking a preliminary injunction against the Board and the Agency. The Sangamon County Circuit Court heard argument on the motion on April 27, 2006, and entered an order granting a preliminary injunction on May 1, 2006. On May 8, 2006, after Dynegy and Ameren filed joint statements with the Board in this rulemaking docket, the Board filed a motion to dismiss the circuit court case, which is still pending.

	On May 4, 2006, the Board decided to proceed with the Agency’s March 14, 2006 proposal pursuant to Section 27 of the Act (415 ILCS 5/27 (2004)). The Board acknowledged the order of the court, and stated the Board’s intent to abide by the court’s decision. The Board canceled the hearings scheduled to begin on May 8, 2006, and rescinded the schedules set forth by both the Board and the hearing officer in their respective March 16, 2006 orders. The Board also re-first noticed the proposed rule under the APA (5 ILCS 100/5 et seq. (2004)). At the same time, the Board filed a notice of withdrawal of the original first notice that appeared in the Illinois Register on March 31, 2006 (30 Ill. Reg. 5957). The Board cited only Section 27 of the Act (415 ILCS 5/27 (2004)) as authority for the proposed rule in the new first notice. The new first notice was published in the Illinois Register on May 19, 2006 (30 Ill. Reg. 9281).

	On May 23, 2006, the Agency filed a motion to amend the proposal. On June 15, 2006, the Board accepted the amendment, which was published in the Illinois Register on July 28, 2006 (30 Ill. Reg. 12706).

	The Board began hearings in this proceeding on June 12, 2006, in Springfield before Board Hearing Officer Marie Tipsord. The Springfield hearings continued day-to-day through and including June 23, 2006. After the close of the Springfield hearings, Dynegy and Midwest Generation filed a motion to strike Dr. Gerald Keeler’s testimony at the Springfield hearing. On July 20, 2006, the Board denied that motion finding that the rules of evidence in rulemakings before the Board differ from those in a contested case before the Board. In a rulemaking, “[a]ll information that is relevant and not repetitious or privileged will be admitted by the hearing officer.” 35 Ill. Adm. Code 102.426. Thus, the Board found that Dr. Keeler’s testimony was admissible in this rulemaking proceeding.

	The Board began a second set of hearings on August 14, 2006, in Chicago. The Chicago hearings continued day-to-day through and including August 23, 2006. ¹ During the hearing, a request for additional hearings was made on the record. The hearing officer directed that the request be filed with the Board and on August 24, 2006, Midwest Generation filed a motion to schedule additional hearings. By hearing officer order, response time was shortened to allow responses without undue delay in the proceeding. The Board received responses from Ameren Energy Generation Company, Amerenenergy Resources Generating Company, and Electric Energy, Inc. (Ameren), the Agency, and Environmental Law and Policy Center, in opposition to the motion. Kincaid responded in support of the motion. On September 7, 2006, the Board denied the request for additional hearings.

	In accordance with Section 27(b) of the Act, the Board requested, in letters dated
March 16, 2006 and May 10, 2006, that Department of Commerce and Economic Opportunity (DCEO) conduct an economic impact study for this rulemaking. On June 26, 2006, DCEO responded that DCEO does not have the resources to perform economic impact studies on this rulemaking. The Board received a second response letter on June 29, 2006, which also indicated that DCEO would not perform an economic impact study. During the Chicago hearings, the Board specifically sought comment on the decision of DCEO (see CTr. at 6-7).

	Pursuant to the hearing officer’s order, the deadline for filing comments to ensure that the comments were considered by the Board before proceeding was September 20, 2006. Between the close of hearing and September 20, 2006, the Board received 7286 comments that will be discussed below. Also on September 20, 2006, Midwest Generation filed a motion to correct transcript. The Board did not receive any responses to the motion. The Board grants that motion.

	On September 25, 2006, Ameren filed a motion for leave to file instanter supplemental post-hearing comments. The Board did not receive any responses to the motion. The Board grants that motion and accepts the comment.

PROPOSAL

	The following section of this opinion will summarize the Agency’s reasons for submitting this proposal. Next, the Board will summarize the proposed rule language and the justification provided in the proposal for the suggested language. The proposal filed by the Agency includes a statement of reasons (Reasons) that describes the Agency’s reasons for submitting the proposal. The proposal also includes a technical support document (TSD) which includes technical information supporting the rulemaking proposal. Both items will be referred to as necessary to summarize the Agency’s proposed rule language.

General Reasons for Proposal

	The Agency indicates that the rulemaking is intended to meet certain obligations of the State of Illinois under the federal Clean Air Act (CAA) (42 U.S.C. § 7401 et seq.). Reasons at 1. The Agency states that the proposal is brought to satisfy the State’s obligation to submit a state implementation plan (SIP) to address the requirements of USEPA’s CAMR (see 70 Fed. Reg. 28606 (May 18, 2005)) and Section 9.10 of the Act. Id., citing 415 ILCS 5/9/10 (2004). The Agency explains that while the proposed rule is consistent with CAMR, the proposal addresses serious deficiencies present in the CAMR including:

the unnecessary delay in achieving mercury emissions reductions, the inherent concerns associated with a cap and trade program to control a persistent, bioaccumulative toxin, the inadequate mercury reductions contained in the CAMR, and the legal basis upon which CAMR was adopted. Reasons at 1.

Concerns About Mercury

	Mercury is a naturally occurring trace element found in the environment as well as a pollutant released to the environment by human or anthropogenic activities. Reasons at 2. Mercury is a persistent environmental contaminant, which cannot be degraded or destroyed. TSD at 29. Mercury exists in two general forms in the environment: inorganic, which include elemental mercury, and organic forms. Id. Mercury combines with carbon to form compounds referred to as organic mercury. Inorganic mercury compounds are formed when mercury combines with other non-carbon elements such as chlorine, sulfur and oxygen. Id.

	Natural sources of mercury include outgassing from volcanoes and evaporation from natural bodies of water. Regarding the anthropogenic sources, mercury emissions from combustion of fossil fuel such as coal-fired EGU represent the largest source category of mercury emissions in the United States. Reasons at 2; TSD at 31. USEPA estimated that coal-fired EGUs contribute about 34% of the total man-made mercury emissions. Emissions of mercury occur in three forms: elemental (Hg⁰), gas phase divalent (Hg²⁺) (reactive gaseous mercury) and particulate-bound divalent mercury (Hg_p). Id. According to the Agency, reactive and particulate forms of mercury compounds have the greatest impact on near-field deposition of mercury. Reasons at 2. These forms of mercury are water-soluble and are generally more readily deposited to the earth’s surface through wet or dry deposition. TSD at 29.

	While the various forms of mercury are known to induce toxic responses in the human body, ingestion of methylmercury through fish consumption poses the greatest exposure risk to human beings. TSD at 37. The Agency states that the deposition of mercury on the land and into waters is the serious health concern. Reasons at 2. The Agency maintains that nearly 50% of the mercury entering many bodies of water comes from air deposition and once in the water some mercury transforms to methylmercury. Id. Methylmercury is formed by biological process and is a highly toxic form of mercury. Methylmercury is the form of mercury that is a concern for potential health effects from mercury. Reasons at 3.

	Methylmercury can be ingested by the lower trophic level organisms where the mercury can bioaccumulate in fish tissue. Reasons at 3. Concentrations of methylmercury in predatory fish then build up over the fish’s entire lifetime, accumulating in the fish tissues as the predatory fish consume other species in the food chain. Id. Therefore, fish and wildlife at the top of the food chain can have higher concentrations of mercury than the lower organisms. Id. Thus, the most common exposure of mercury for humans is through consumption of mercury contained in the food supply. Id.

	The Agency notes that when humans consume fish containing methylmercury, the methylmercury is absorbed into the blood and distributed throughout the tissues of the body. Reasons at 3. Methylmercury can be passed to a fetus in pregnant women and sufficient exposure may lead to neurological effects on the unborn child. Id. The effect of prenatal exposure can occur even if the exposure does not affect the mother. Id. As a result of exposure to methylmercury children may be at an increased risk of poor performance on neurobehavioral tests such as those measuring attention, fine motor function, language skills, visual-spatial abilities, and verbal memory. Id. Mercury contamination of Illinois waters has resulted in fish consumption advisories being issued for every body of water in the State, according to the Agency. Reasons at 3.

Clean Air Act and CAMR

	Under Section 112(b) (42 U.S.C. § 7412(b)) of the CAA, mercury is listed as a hazardous air pollutant (HAP). Reasons at 4. Section 112 of the CAA requires the establishment of maximum achievable control technology (MACT) standards applicable to new and existing sources. Id. The CAA required the USEPA to conduct a study of electric utility boilers to assess the hazards to public health from emissions of HAPs. Id. Pursuant to Section 112(n)(1)(A) of the CAA (42 U.S.C. § 7412(n)(1)(A)), USEPA found that regulation of coal and oil-fired utility boilers was necessary and appropriate. Reasons at 4.

	In January 2004, USEPA proposed federal rules governing the emissions of mercury from coal-fired electric generating units. Reasons at 6-7. In response to the federal proposal, the Agency submitted comments that took issue with the federal rules. Reasons at 7-8. The Agency challenged USEPA’s regulation under Section 111 of the CAA rather than Section 112(d) of the CAA. Reasons at 8. The Agency argued that the mercury limits must be more stringent than those proposed and that the rule should be fuel neutral without favoring one type of coal. Id. The Agency also opposed trading of mercury allowances and argued for reductions to occur by 2010. Reasons at 8-9. USEPA adopted CAMR on May 18, 2005, and did not make changes to address the Agency’s concerns. Reasons at 9.

	The Agency takes issue with CAMR for several reasons. Reasons at 10. The Agency does not believe that CAMR would result in sufficient reductions of mercury in a timely manner. Id. The Agency also is concerned that CAMR will impede efforts to encourage clean-coal technology that will allow use of Illinois coal. Id. The Agency, because of these concerns, asked the Illinois Attorney General’s Office to appeal CAMR and that appeal was filed on
May 27, 2006. Reasons at 11. Thirteen other states have also filed one or more appeals of CAMR. Illinois’ appeal was consolidated with other challenges. Reasons at 11, citing Illinois v. USEPA, Nos. 05-1174 and 05-1189 (D.C.Cir.).

	Under CAMR, the USEPA established a cap and trade program to reduce nationwide coal-fired power plant emissions of mercury in two phases. Reasons at 23, citing 70 Fed. Reg. 28619. The first phase is effective in 2010 and is set at 38 tons per year. Id., at 70 Fed. Reg. 28606. The second phase, effective in 2018, sets the emissions rate at 15 tons per year. Id. CAMR’s market based cap and trade program distributes mercury allowances that equate to emissions of one ounce of mercury. Id. CAMR also allows for banking of mercury allowances. Reasons at 23.

	CAMR established an annual mercury budget for each state beginning in 2010. Reasons at 23, citing 70 Fed. Reg. 28649-50. Each state’s plan under CAMR must include emissions control requirements and compliance procedures to demonstrate that the state’s annual budget will be met. Id. CAMR establishes Illinois’ annual budget as 1.594 tons per year for the period 2010 through 2017, and 0.629 tons per year for the period 2018 and thereafter. Reasons at 24, citing 70 Fed. Reg. 28649-50. CAMR’s 2018 national cap of 15 tons per year equates to approximately a 70% reduction in mercury emissions from the 1999 baseline year. Reasons at 24.

Section 9.10 of the Act

	The Illinois General Assembly also saw a need for examination of mercury emissions, and therefore, added Section 9.10 to the Act (415 ILCS 5/9.10 (2004)). Reasons at 5. Section 9.10 of the Act required the Agency to report to the General Assembly findings “that address the potential need for the control or reduction of emissions from fossil fuel-fired electric generating plants.” 415 ILCS 5/9.10(b) (2004); Reasons at 5. In Section 9.10 of the Act, the General Assembly specified several areas for the Agency to address including the “reduction of mercury as appropriate . . . that are sufficient to prevent unacceptable local impacts from individual facilities” with consideration of developments in federal law that may affect action by Illinois. Id.

	The Agency published a report entitled Fossil Fuel-Fired Power Plants: Report to the House and Senate Environment and Energy Committees in September 2004 (Section 9.10 Report). Reasons at 6. The Section 9.10 Report indicated that control of mercury emissions was necessary, but did not specify a level of control. Id. The Agency stated its belief that independent, full and complete economic assessments should be performed on a mercury reduction rule to examine the impact to Illinois jobs in the coal and power industry. Id.

Purpose and Effect of Agency’s Proposal

	The Agency proposed this rulemaking to satisfy Illinois’ obligation to submit a SIP addressing the requirements of CAMR and to address applicable requirements of Section 9.10 of the Act (415 ILCS 5/9.10(2004)). Reasons at 23. The Agency seeks to achieve maximum mercury reductions while providing flexibility. Reasons at 24. To do this, the Agency proposes to phase in compliance, include provisions to allow compliance to be demonstrated by averaging systemwide and plant wide, and to allow for relief for EGUs that will be shut down. Id.

	Specifically, the proposal requires EGUs that serve a generator greater than 25 megawatts producing electricity for sale to begin utilizing control technology by July 1, 2009. Reasons at 24. The proposal allows compliance to be demonstrated by either using a mercury emissions standard of 0.0080lb/GWh or a 90% reduction from input mercury. Id. The standards apply on a rolling 12-month average basis and compliance can be shown on a source-wide basis. Reasons at 24-25. Companies with several sources may meet these standards by averaging between the sources as long as each source attains at least a 75% reduction. Reasons at 25. The emissions standards do not apply if an existing EGU plans to permanently shut down by 2010. Id.

	CAMR requires monitoring of mercury emissions, so the proposal includes requirements for monitoring. Reasons at 26. The monitoring requirements specify that units must comply with the federal CAMR monitoring requirements of 40 C.F.R. 75.

Temporary Technology Based Standard

	On June 15, 2006, the Board granted a motion to amend the proposal to include a TTBS. A source may use the TTBS to demonstrate compliance with the proposed standards if the EGUs are equipped and operated with control systems which include HCI and either a cold side electrostatic precipitator (ESP) or a fabric filter. Proposed Section 225.234(b). The TTBS is limited to only 25% of the total rated MW capacity for the owner or operators of more than one EGU. Proposed Section 225.234(b)(3).

Multi-Pollutant Standards

	Although not a part of the Agency’s proposal, the Board will discuss the MPS here for organizational purposes. On July 28, 2006, Ameren and the Agency filed a joint statement asking that the Board include a multi-pollutant standard in the proposed rule. See Exh. 75. At hearing, Ameren testified concerning the proposed language and the Agency joined Ameren in answering questions about the MPS language. See CTr. 1-442. On August 21, 2006, Dynegy and the Agency also filed a joint statement with Dynegy joining in supporting the MPS and suggesting changes to the MPS. See PC 6283, CTr. at 1341-43. A corrected copy of the language was filed on August 23, 2006. PC 6284.

	The MPS is a voluntary provision that allows Illinois units to comply with mercury reductions using co-benefits from SO₂ and NO_x emissions reductions. PC 6301 at 4. A source must commit to reducing SO₂ and NO_x emissions and, in exchange, the source has additional time to achieve the mercury emissions standard of 0.0080 lb/GWh or 90% reduction of mercury. Exh. 75 at 1-2, PC 6301 at 4, PC 6284 at 2-3. The MPS requires that SO₂ and NO_x allowances necessary to meet the requirements of the MPS be surrendered to the Agency for retirement. Exh. 75 at 2, PC 6284 at App.A, 10. The MPS requires specific reductions of SO₂ and NO_x emissions rates and imposes deadlines for installation of HCI controls. Exh. 75 at 1, PC 6284 at 2-3.

	Ameren and the Agency anticipate that installing and operating pollution control equipment pursuant to the MPS will achieve significant reductions of SO₂ and NO_x emissions beyond those required by existing regulations and beyond the federal Clean Air Interstate Rule (CAIR). Exh. 75 at 2. Ameren and the Agency state that the MPS is both technically feasible and economically reasonable and that the level of SO₂ and NO_x emissions reductions will contribute to Illinois’ efforts to achieve attainment of National Ambient Air Quality Standards (NAAQS). Exh. 75 at 3. Ameren also testified to the technical feasibility and economic reasonableness of the MPS. See, e.g., CTr. at 248-50, 307.

	Dynegy’s joint statement with the Agency echoes the comments concerning the reduction of SO₂ and NO_x emissions made by the Ameren and the Agency in their joint statement. PC 6284 at 4. Dynegy and the Agency also indicate that the revised proposal is economically reasonable and technically feasible. PC 6284 at 5. Ameren supports the revised MPS amendments filed by Dynegy and the Agency. PC 6301 at 6.

Rule Language

	The following section summarizes the actual rule language of the proposal.

	Section 225.100. This is the standard severability clause in the rule. The Section provides that if any section, subsection or clause of Part 225 is found to be invalid, the validity of Part 225 as a whole will not be affected. Reasons at 29.

	Section 225.120 and 225.130. In these sections the Agency sets forth abbreviations, acronyms, and definitions used in Part 225. Reasons at 29. The Agency also incorporates definitions found in 35 Ill. Adm. Code 211. Id.

	Section 225.140. Part 225 incorporates several sections of the Code of Federal Regulations by reference. Reasons at 30. Specifically, this section incorporates 40 C.F.R. 60.17, 60.45a, 60.49a(k)(l) and (p), 60.4170 through 60.4176. Id. These sections of 40 C.F.R. Part 60 address Standards of Performance for New Stationary Sources. Id. Subsection (b) incorporates by reference 40 C.F.R. Part 75. Id. Under CAMR, state plans must require that EGUs comply with the monitoring, recordkeeping, and reporting provisions of 40 C.F.R. Part 75, which addresses continuous emission monitoring. Id. Subsection (c) incorporates by reference standard test methods that are to be utilized under Part 225. Id.

	Section 225.200. Subpart B of Part 225 is proposed to control mercury emissions from coal-fired electric generating units in Illinois. Reasons at 30.

	Section 225.202. This section sets forth the measurement methods for mercury under Part 225. Reasons at 30.

	Section 225.205. Subsection (a) provides that Subpart B applies to all stationary coal-fired boilers and stationary coal-fired combustion turbines serving a generator with nameplate capacity of more than 25 MWe and producing electricity for sale. Reasons at 31.

	Subsection (b) includes language that determines when Subpart B applies to a cogeneration unit. Specifically, Subpart B applies to a cogeneration unit serving at any time a generator with nameplate capacity of more than 25 MWe and supplying in any calendar year more than one-third of the unit’s potential electric output capacity or 219,000 MWh, whichever is greater, to any utility power distribution system for sale. Reasons at 31. The proposed language provides that “if a unit qualifies as a cogeneration unit during the 12-month period starting on the date the unit first produces electricity, but subsequently no longer qualifies as a cogeneration unit, the unit shall be subject to subsection (a) of this Section starting on the day which the unit first no longer qualifies as a cogeneration unit.” Id.

	Section 225.210. This section requires that to be in compliance with Subpart B an owner or operator of a source with one or more EGUs must apply for a Clean Air Act Permit Program (CAAPP) permit that addresses the applicable requirements of Subpart B. Reasons at 31. Subsection (b) specifically requires the owner or operator to comply with the monitoring requirements of Section 225.240 through 225.290 of Subpart B. Id. The Agency proposes that emissions measurements recorded and reported in accordance with Section 225.240 through 225.290 of Subpart B will determine compliance with mercury requirements under Section 225.230 or 225.237. Reasons at 31-32. Subsection (c) requires compliance with the mercury emissions reduction requirements set forth under Section 225.230 or 225.237. Reasons at 32. Subsection (d) sets forth the recordkeeping and reporting requirements for owners or operators of EGUs under Subpart B. Id. The owners or operators must keep the following records: emission monitoring information, copies of all reports, compliance certifications, all documents necessary to demonstrate compliance with Subpart B, copies of all documents from the permit application and any other submission under Subpart B. Id. The owner or operator must keep the records for five years, unless the Agency extends this period for cause in writing prior to the end of five years. Id.

	Subsection (e) governs liability and sets forth that the owner or operator of each source must meet the requirements of Subpart B and that any provision of Subpart B that applies to a source will also apply to the owner and operator of the source and to the owner and operator of each EGU at the source. Reasons at 32. Subsection (f) includes language that limits the effect of Subpart B on other authorities. Id. The Agency provides that no provision of Subpart B can be construed to exempt or exclude the owner and operator of a source or EGU from compliance with any provision of an approved State Implementation Plan, a permit, the Act or the CAA. Id.

	Section 225.220. This section addresses CAAPP permit requirements and provides in subsection (a) that each source submit a CAAPP permit application that addresses all applicable requirements of this Subpart. Reasons at 33. Subsection (a) also establishes a timeline for the submission of permit applications. Id. In subsections (b) and (c), the content and information required in the permit application and permit are set forth. Id. The proposed language in subsection (c) requires that each permit issued by the Agency and subject to Subpart B address all applicable requirements of this Subpart and contain federally enforceable conditions. Id.

	Section 225.230. This section sets forth emissions standards for EGUs at existing sources. Reasons at 33. Subsection (a) provides that beginning July 1, 2009, the EGU must comply with one of the following standards on a rolling 12-month basis: “(1) an emission standard of 0.0080 lb/GWh gross electrical output; or (2) a minimum 90% reduction of input mercury.” Id. Subsection (b) provides that as an alternative to compliance with subsection (a) an EGU may demonstrate that the actual emissions of mercury are less than the allowable emissions from the EGU on a rolling 12-month basis. Id. Subsection (b) also includes the equations necessary for compliance and provides that if an EGU does not comply with Section 225.265 of this Subpart to determine mercury input, the allowable emissions will be calculated based on the electrical output of the EGU. Proposed Section 225.230(b).

	Subsection (c) provides that for two EGUs that share a common stack, and where mercury monitors are in the common stack, compliance with applicable emission standards must be determined as if the two EGUs were a single EGU, as provided for by 40 C.F.R. Part 75, Subpart I. Reasons at 34. Subsection (d) requires that a source with multiple EGUs may alternatively comply with subsection (a) by demonstrating that the actual emissions of mercury are less than the allowable emissions of mercury from all EGUs at the source on a rolling 12-month basis. Proposed Section 225.230(c). Subsection (d) provides formulas for determining the maximum allowable emissions of mercury from all the EGUs at a source. Id. If a source that relies on subsection (d) fails to meet the requirements of subsection (d) in a given 12-month period, all EGUs at the source in such reliance will be considered out of compliance with the applicable standards of Subpart B for the entire last month of that period. Reasons at 33-34.

	Section 225.232. Subsection (a) provides that through December 31, 2014, as an alternative to compliance with Section 225.230(a), an EGU may comply with emissions standards through an averaging demonstration. Reasons at 34-35. The EGU must show that actual mercury emissions from the EGU and other EGUs covered by the demonstration are less than the allowable emissions from all such EGUs on a rolling 12-month basis. Id.

	Subsection (b) proposes that each EGU covered by the demonstration must “comply with one of the following emission standards on a source-wide basis for the period covered by the demonstration: (1) An emission standard of 0.020 lb/GWh gross electrical output; or (2) A minimum 75% reduction of input mercury.” Reasons at 35. Subsection (c) provides that the equations set forth in Section 225.230(a)(2), (a)(3), or (d) (2) determine compliance with emissions standards under this section. Reasons at 35. The owner or operator must apply the equations that address all EGUs at the sources covered by the demonstration, rather than the equations that address only EGUs at one source. Id.

	Subsection (d) provides that owners or operators of multiple existing sources with EGUs may only participate in averaging demonstrations with existing sources they own or operate. Reasons at 35. However, the owners or operators of specifically enumerated single sources with EGUs may participate in demonstrations with each other. Id. The proposed language requires that participants that are single existing sources with EGUs be authorized through federally enforceable permit conditions for each participating source. Id. Under subsection (e), “a source may be included in only one [d]emonstration during each rolling 12-month period.” Id. Subsection (f) requires that EGUs using the demonstration to comply with “Subpart B must complete the determination of compliance for each 12-month rolling period no later than 60 days following the end of the period.” Reasons at 36.

	Subsection (g) provides that if a source applies the demonstration to comply with Subpart B and fails, the compliance status of such source will be determined under Section 225.230, as if the demonstration did not apply. Reasons at 36. Subsection (h) includes that if one source of two participating in a demonstration does not maintain the required records, data, and reports for the EGUs at the source or does not submit copies of such documents to the Agency upon request, this will be deemed a failure to demonstrate compliance and both participating sources will be subject to Section 225.230 to determine compliance. Id.

	Section 225.235. Section 225.235(a) provides that the standards do not apply to an EGU that will be permanently shut down. Reasons at 36. To comply with this section, an owner or operator who will not be constructing a new EGU to replace the existing unit must notify the Agency no later than June 30, 2009, that it is planning to permanently shut down by December 31, 2010. Id. Otherwise, if the owner or operator plans to construct a new EGU to specifically replace the existing unit, the existing unit must shut down by December 31, 2011, for this section to apply. Id. The existing EGU must be permanently shut down by the specified dates, unless the owner or operator demonstrates to the Agency, prior to such date, that factors beyond the owner or operator’s reasonable control have interfered with the shut down plan, in which case an extension may be given. Proposed Section 225.235(a). In these circumstances, an operator or owner that will not replace the existing EGU may receive an extension requiring the permanent shut down of the unit by December 31, 2011. Id. If the owner or operator of an existing EGU is constructing a new EGU, the deadline for permanent shut down of the existing EGU may be extended to June 30, 2013, so long as after December 31, 2012, the existing EGU only operates as a “back-up unit to address periods when the new generating units are not in service.” Id.

Along with the notification, the EGU must submit a description of actions that have been taken to shut down the EGU and a description of actions that will be taken to complete the shut down. Prop. Section 225.235(a). To rely on this section, an owner or operator must have applied for a construction permit or be pursuing a federally enforceable agreement that requires the permanent shut down of the EGU, and by June 30, 2009, must have applied for revisions to the operating permit that terminate the authorization to operate the unit. Id. To rely on this section, an owner or operator must have obtained a construction permit or have entered into a federally enforceable agreement and obtained revised operating permits in accordance with this section, by June 30, 2010. Id.

	Subsection (b) provides that any EGU not required to comply with Section 225.230 pursuant to this section, “shall not be included when determining whether any other EGUs at the source or other sources are in compliance with Section 225.230 of this Subpart.” Prop. Section 225.235(b).

	Subsection (c) provides that if an owner or operator relies on this section in lieu of compliance with Section 225.230(a) and fails to permanently shut down by the required date, the EGU will be considered a new EGU and therefore subject to the emissions standards in Section 225.237(a) of Subpart B. Reasons at 38.

	Section 225.237. Subsection (a)(1) provides that a source that has not commenced commercial operations before January 1, 2009, is a new source and must “comply with one of the following emissions standards for each EGU on a rolling 12-month basis: (1) An emission standard of 0.0080 lbs/GWh gross electrical output; or (2) A minimum 90% reduction of input mercury.” Reasons at 38. Subsection (a)(2) allows that the equations in Section 225.230(a)(2), (a)(3), or (b)(2) of Subpart B may be used to demonstrate compliance. Id.

	Subsection (b) provides that the commencement date of the initial 12-month rolling period for which a new EGU must comply with subsection (a)(1) of this Section is the same date that the initial performance test for the mercury emissions standard under 40 C.F.R. 60.45 commences. Reasons at 38. The required continuous emissions monitoring system for mercury emissions must be certified prior to this date. Id. “Thereafter, compliance shall be demonstrated on a rolling-12-month basis in terms of calendar months.” Id.

	Section 225.240. This section requires that an EGU must comply with monitoring, recordkeeping and reporting requirements in this section and those of Sections 225.250 through 225.290 of Subpart B and Subpart I of 40 C.F.R. Part 75. Reasons at 39. If an EGU shares a common stack with units that are not EGUs and emissions are not monitored in the duct to the common stack from each EGU then emissions monitoring must comply with 40 C.F.R. 75.82(b)(2) and this Section, “including monitoring the duct to the common stack from each unit that is not an EGU.” Id. However, if the EGU counts the combined emissions measured at the common stack as the mass emissions of mercury, for the EGU’s recordkeeping and compliance purposes, then the aforementioned measures for EGUs that share a common stack with units that are not EGUs are not required. Id.

	In subsection (a), the Agency sets forth requirements for installation, certification and data accounting. This subsection requires the owner or operator to install all required monitoring systems and successfully complete all required certification tests, in accordance with this Section and Sections 225.250 through 225.290 of Subpart B and 40 C.F.R. 75.21 and 75.82, and record, report, and quality-assure the data from such monitoring systems. Reasons at 39.

	Subsection (a)(4) provides that to qualify to use the low mass emissions excepted monitoring methodology, the EGU must meet the requirements set forth in this subsection, and demonstrate eligibility through initial emissions testing, which must be conducted before the dates set forth in subsections 225.240(a)(4)(A) and (B). Proposed Section 225.240(a). For an EGU to be eligible to use the excepted emissions monitoring methodology, the EGU may not emit more than 464 ounces (29 pounds) of mercury per year pursuant to 40 C.F.R. 75.81(b), must demonstrate that the EGU is eligible to use the methodology by performing emissions testing in accordance with 40 C.F.R. 75.81(c), must comply with other applicable requirements of 40 C.F.R. 75.81(b) through (f), and must submit to the Agency a copy of any information that is required to be submitted to the USEPA under these provisions. Id.

	Subsection (a)(4) requires that if an EGU commenced commercial operations before
July 1, 2008, initial emissions testing, to demonstrate eligibility of an EGU for the low mass emissions excepted methodology, must be conducted before “January 1, 2009, or 45 days prior to relying on the low mass emissions excepted methodology, whichever date is later.” Proposed Section 225.240(a). If the EGU commenced commercial operation on or after July 1, 2008, initial emissions testing shall be conducted “at least 45 days prior to the applicable date specified under subsection (b)(2) of this Section or 45 days prior to relying on the low mass emissions methodology, whichever date is later.” Id.

	Subsection (b) requires EGU to meet the emissions monitoring system certification and other emissions monitoring requirements of subsections (a)(1) and (a)(2) of this Section on or before the dates specified in subsections (b)(1) (2) and (3). Proposed Section 225.240(b). The owner or operator must record, report, and quality-assure the emissions monitoring systems required under subsection (a)(1) of this Section on and after the specified dates. Id. Under subsection (b)(1) an EGU that commences commercial operation before July 1, 2008, is required to comply with emissions monitoring certification on or before January 1, 2009. Id. Subsection (b)(2) provides that an EGU that commences commercial operation after July 1, 2008, is required to comply with monitoring system certification by 90 unit operating days or 180 calendar days after commercial operations commence, whichever occurs first. Id.

	Subsection (b)(3) proposes that an EGU that completes construction of a “new stack or flue or installation of add-on mercury emissions controls, a flue gas desulfurization system (FGD), a selective catalytic reduction system, a fabric filter, or a compact hybrid particulate collector system is complete after the applicable” deadline is required to recertify the continuous emissions monitoring system within 90 unit operating days or 180 calendar days after the date on which emissions first exit the new system, stack, flue, device or filter, whichever is first. Reasons at 39.

	Subsection (c) requires that if an EGU does not meet the applicable deadline for certification of any required emissions monitoring system, the owner or operator is required to determine, record, and report maximum potential values and, where appropriate, minimum potential values for mercury concentration, stack gas flow rate, stack gas moisture content, and any other parameters required to determine mercury mass emissions in keeping with 40 C.F.R. 75.80(g) for each system. Proposed Section 225.240(c). Under subsection (c)(2) if an EGU that is required to be recertified pursuant to subsection (b)(3) of this Section fails to meet the deadline for recertification of any emissions monitoring system, the owner or operator is required to, “for each such system, determine, record, and report substitute data using the applicable missing data procedures in 40 C.F.R. 75.80(f), in lieu of the maximum potential (or, as appropriate, minimum potential) values, for a parameter if the owner or operator demonstrates that there is a continuity between the data streams for that parameter before and after the construction or installation under subsection (b)(3) of this Section.” Id.

	Subsection (d) provides that an EGU may not use “any alternative emissions monitoring system, alternative reference method for measuring emission, or any other alternative to the emissions monitoring and measurement requirements of this Section and Sections 225.250 through 225.290 of this Subpart,” unless the USEPA promulgates the alternative and the Agency approves it in writing or if such alternative is approved in writing by the Agency and the USEPA. Reasons at 41.

	Subsection (d)(3) provides that an owner or operator may not disrupt “the continuous emission monitoring system, any portion thereof, or any other approved emission monitoring method, and thereby avoid monitoring and recording mercury mass emissions discharged into the atmosphere, except for periods of recertification or periods when calibration, quality assurance testing, or maintenance is performed in accordance with the applicable provisions of this Section, Sections 225.250 through 225.290 of this Subpart, and Subpart I of 40 C.F.R. Part 75.” Proposed Section 225.240(d). Under subsection (d)(4), an EGU must not discharge mercury emissions without accounting for all such emissions pursuant to “applicable provisions of this Section, Section 225.250 through 225.290 and Subpart 1 of 40 C.F.R. Part 75.” Id. An EGU must not retire or permanently discontinue use of the continuous emissions monitoring system or a component thereof, other than in the limited circumstances enumerated in this subsection. Id.

	Subsection (e) provides that an EGU in long-term cold storage must comply with applicable provisions of 40 C.F.R. Part 75 for monitoring, recordkeeping, and reporting for such units. Reasons at 42.

	Section 225.250. Subsection (a) includes provisions for initial certification and recertification procedures for a continuous emissions monitoring system or excepted monitoring system (sorbent trap monitoring system) under 40 C.F.R. 75.15. Reasons at 42.

	Subsection (b) proposes that a monitoring system will be exempt from the initial certification requirements of this Section if the following provisions are met: the monitoring system has been previously certified pursuant to 40 C.F.R. Part 75, and “the applicable quality assurance and quality control requirements of 40 C.F.R. 75.21 and Appendix B to 40 C.F.R. Part 75 are fully met.” Reasons at 42. However, a monitoring system required by section 225.240 that is exempt from initial certification requirements must never-the-less comply with the recertification provisions of this section. Id.

	Subsection (c) sets forth that the applicable certification and recertification requirements in 40 C.F.R. 75.81(c) through (f) will apply to an EGU qualified to use the mercury low mass emissions excepted methodology under 40 C.F.R. 75.81(b). Reasons at 43.

	Under subsection (d), within 45 days of completing all initial certification and recertification tests required under this section, the owner or operator is required to submit an application to the Agency including the information required by 40 C.F.R. 75.63. Id.

	Section 225.260. Subsection (a) provides that the missing data procedures in Subparts D and I of 40 C.F.R. Part 75, where applicable, will be applied to substitute data whenever any emissions monitoring system fails to meet quality assurance and quality control requirements or data validation requirements of 40 C.F.R. Part 75. Reasons at 43.

	Subsection (b) sets forth that the Agency will issue a notice of disapproval of the certification status of a monitoring system if an audit and review of the initial certification or recertification reveal that such monitoring system should not have been certified or recertified because of the following reasons. Reasons at 43. The Agency will issue such notice of disapproval if both at the time of initial certification or recertification application and submission and at the time of the audit the monitoring system did not meet a particular performance specification or failed to meet other requirements under Section 225.250 of Subpart B or failed to meet applicable provisions of 40 C.F.R. Part 75. Id. Such notice of disapproval acts to revoke prospectively the certification status of the monitoring system. Id. The initial certification and recertification procedures in Section 225.250 apply to each disapproved monitoring system. Id.

	Section 225.261. This section provides that an EGU that uses a mercury concentration monitoring system and a flow monitoring system to monitor and report, will also monitor and report heat input rate at the EGU level using the procedures set forth in 40 C.F.R. Part 75. Reasons at 44.

	Section 225.263. Under this Section, if an EGU complies with this Subpart, by means of either Section 225.230(a)(1) or 225.230(b) or (d) or 225.232, the owner or operator “shall monitor gross electrical output of the associated generator(s) in MWh on an hourly basis.” Proposed Section 225.263.

	Section 225.265. If the EGU complies by means of Section 225.230(a)(2) or uses input mercury levels and complies by means of Section 225.230(b) or (d) or Section 225.232, the owner or operator must “[p]erform daily sampling of the coal combusted in the EGU for mercury content.” Proposed Section 225.265. The owner or operator “shall collect a minimum of one 2-lb. grab sample per day of operation from the belt feeders anywhere between the crusher house or breaker building and the boiler.” Id. The sample should be taken in a manner so that it will be representative of the mercury content of coal burned that day. Prop at 44. The owner or operator is required to analyze the grab sample using the following tests: to determine heat content, “ASTM D5865-04, Standard Test Method for Gross Calorific Value of Coal and Coke, or equivalent approved in writing by the Agency”; to determine moisture content, “ASTM D3173-03, Standard Test Method for Moisture in the Analysis Sample of Coal and Coke, or equivalent approved in writing by the Agency”; and to measure the mercury content, “ASTM D6414-01, Standard Test Method for Total Mercury in Coal and Coal Combustion Residues by Acid Extractor or Wet Oxidation/Cold Vapor Atomic Absorption, ASTM D3684-01, Standard Test Method for Total Mercury in Coal by the Oxygen Bomb Combustion/Atomic Absorption Method, or equivalent approved in writing by the Agency”. Reasons at 44-45.

	A source with multiple EGUs may take one sample per crusher house or breaker building, rather than one sample per EGU, if the EGUs share the crusher house or breaker building. Reasons at 45. For such a source the owner or operator must determine the mercury content in terms of lbs/trillion Btu using the data analyzed. Id.

	If an EGU is required to comply with this Section, the owner or operator must conduct sampling and analysis pursuant to this Section at least 30 days before the start of the month for which this requirement applies if the EGU is in daily service, and “if the EGU is not in daily service, on the day that the EGU resumes operation.” Reasons at 45.

	Section 225.270. For a source with one or more EGUs, the owner or operator must submit written notification to the Agency pursuant to 40 C.F.R. 75.61 for each EGU or group of EGUs monitored at a common stack and each non-EGU monitored under 40 C.F.R. 75.82(b)(2)(ii). Reasons at 45.

	Section 225.290. Under subsection (a)(1), the owner or operator of an EGU and its designated representative must comply with applicable recordkeeping and reporting requirements of 40 C.F.R. 75.84 and those of this section. Reasons at 45-46. In subsection (a)(2), if the EGU is subject to emissions standards, the owner or operator must keep records for each month identifying the emissions standard with which the EGU is complying or from which the owner or operator is calculating allowable emissions. Proposed Section 225.290. Such an EGU must also maintain records of the daily mercury content of coal used and the daily and monthly input mercury in the file required under 40 C.F.R. 75.84(a), if the EGU complies with this Subpart “by means of Section 225.230(a)(2) or 225.237(a)(1)(B) or us[es] input mercury levels to determine the allowable emissions of the EGU.” Id. An EGU must maintain records of the daily and monthly gross electrical output in the file required under 40 C.F.R. 75.84(a), if such EGU complies “with this Subpart by means of Section 225.230(a)(1) or 225.237(a)(1)(A) or using electrical output to determine the allowable emissions of the EGU.” Id.

	In subsection (a)(3), the owner or operator must maintain records of monthly emissions of mercury from each EGU. For an EGU that complies by means of section 225.230(b) or (d) of this Subpart, the owner or operator must additionally maintain records of the monthly allowable emissions of mercury from the EGU. Reasons at 46. In subsection (a)(4), an EGU that is participating in an averaging demonstration pursuant to Section 225.232 must keep records of the other sources and other EGUs covered by the demonstration and within 60 days of the end of each month, calculate and record the actual and allowable mercury emissions for the month and the 12-month rolling period. Id. Subsection (a)(5) specifies the quality assurance records that a source must maintain. Proposed Section 225.290 In subsection (a)(6), the Agency provides that an EGU must maintain an electronic copy of all electronic submittals to the USEPA pursuant to 40 C.F.R. 75.84(f). Id. In subsection (a)(7), the Agency provides that an EGU must retain all records required by this Section on site, unless otherwise provided for in the CAAPP permit, and that the EGU will provide copies of any record to the Agency upon request. Id.

	Subsection (b) proposes that the owner or operator will submit quarterly reports and sets forth the information that must be included in such reports. Reasons at 47. Under subsection (c) the owner or operator will be required to submit a compliance certification in support of each quarterly report and sets forth the contents of such certification. Id. Subsection (d) requires that the owner or operator submit an Annual Certification of Compliance to the Agency no later than May 1 of each year. Id. Subsection (d) also sets forth the contents of such Certification of Compliance and provides that the Certification of Compliance shall address compliance for the previous calendar year. Id. Subsection (e) requires that the owner or operator promptly notify the Agency of deviations of requirements of Subpart B, for each EGU. Id. Subsection (f) requires that within 45 days of completing a quality assurance relative accuracy test audit (RATA) the EGU shall submit the RATA report to the Agency for affected EGUs. Id.

	Section 225.295. In this Section, the mercury emissions allocation to the state under CAMR must not be allocated to any EGU or other source of mercury emissions. Reasons at 47. The Agency must hold all allowances allocated to the state by USEPA and the Agency shall instruct USEPA to permanently retire all such allowances at the end of each calendar year. Id.

PUBLIC COMMENTS

	The Board has received an unprecedented number of comments in this proceeding. As of today the Board has received 7,286comments. Those comments range from lengthy post-hearing comments from the participants to postcards and notes from citizens of the State. The overwhelming majority of the comments support the adoption of the Agency’s proposal. Due to the volume of comments received, the Board cannot individually summarize all of the comments, nor can the Board list all those by name who filed a comment. The Board’s decision not to individually summarize or identify an individual does not mean that the Board has not reviewed the comments or did not consider the comments in reaching today’s decision. The Board appreciates each and every comment and the time taken by the individuals to present their thoughts and opinions to the Board. All the comments received by the Board in this proceeding can be viewed on the Board’s web sites at www.ipcb.state.il.us ., through the Clerk’s Office On Line link.

	The Board will list the organizations and public officials who filed comments below. However, rather than summarize all the comments, the Board will include comments where appropriate when discussing the issues remaining in this proceeding. The Board has received comments from throughout the State and specifically from the following organizations or public officials in support of the proposed rule:

~~“Agency” means the Illinois Environmental Protection Agency~~ “Agency” means the Illinois Environmental Protection Agency. [415 ILCS 5/3.105]

“Averaging demonstration” means, with regard to Subpart B of this Part, a demonstration of compliance that is based on the combined performance of EGUs at two or more sources.

“Base Emission Rate” means, for a group of EGUs subject to emission standards for NOx and SO₂pursuant to Section 225.233, the average emission rate of NOx or SO₂ from the EGUs, in pounds per million Btu heat input, for calendar years 2003 through 2005 (or, for seasonal NOx, the 2003 through 2005 ozone seasons), as determined from the data collected and quality assured by the USEPA pursuant to the 40 CFR 72 and 96 federal Acid Rain and NOx Budget Trading Programs for the emissions and heat input of ~~the~~ that group of EGUs.

~~“Board” means the Illinois Pollution Control Board~~ “Board” means the Illinois Pollution Control Board. [415 ILCS 5/3.105]

“Boiler” means an enclosed fossil or other fuel-fired combustion device used to produce heat and to transfer heat to recirculating water, steam, or other medium.

	The Board received final comments from the following participants, which will be included in the discussion of the issues below:

Prairie State Generating Company. L.L.C. (Prairie State) PC 6294
City of Springfield, City Water Light & Power (CWLP) PC 6296
Environmental Law and Policy Center (Environmental Advocates) PC 6297 ²
Illinois Environmental Protection Agency (Agency) PC 6298
Kincaid Generation, L.L.C. (Kincaid) PC 6299
Midwest Generation, L.L.C. (Midwest Generation) PC 6300

The Board will address the legal issues raised in points three, four, and five later in this opinion (see supra at 78). The issues of the economic reasonableness will also be discussed below (see supra at 54). In this section, the Board will summarize the argument regarding technical feasibility.

	Midwest Generation points out that Mr. Menne testified in support of the MPS, stating that Ameren was not confident that HCI alone would ensure that Ameren could comply with the 90% reduction. PC 6300 at 26, citing CTr. at 169. Mr. Menne indicated that Ameren would need to add baghouses or fabric filters at each unit still burning bituminous coal in order to comply. PC 6300 at 26, citing CTr. at 159. Mr. Menne indicated that Ameren will not tolerate or risk noncompliance. PC 6300 at 27, citing CTr. at 100. Midwest Generation shares Ameren’s view that compliance is important and states that “companies cannot share in the Agency’s cavalier view that a technology that works some of the time” is adequate to support a rule that imposes compliance obligations. PC 6300 at 27.

	Midwest Generation argues that “none of the companies” believe that reliance on HCI alone will achieve compliance with the proposed rule. PC 6300 at 27. Further, Midwest Generation states that “all of the companies” have confidence that the co-benefits of NO_x and SO₂ control equipment are necessary to achieve compliance with the mercury reductions proposed in this rule. Id. Midwest Generation maintains that the USEPA also recognized the co-benefits and expected companies to coordinate CAIR and CAMR controls. Id. Midwest Generation asserts that the implication of the proposed MPS is that Dynegy and Ameren, companies representing over half the generating capacity in the State, cannot comply with the rule in the manner proposed within the timeframes proposed. Id. Midwest Generation argues that, as a result of the Agency’s support, the Agency too finds that “as a rule of general applicability, the underlying rule is not technically feasible.” Id.

Kincaid’s Comment

	Systemwide Averaging. Kincaid argues that the provisions for systemwide averaging creates an “unequal, unfair playing field” for Kincaid due to the smaller pool of units eligible for inclusion in an averaging demonstration with Kincaid. PC 6299 at 15. Further, Kincaid maintains that Kincaid will be forced into a “sellers market” in trying to strike a deal with another company that may have no incentive for participation. Id. Kincaid notes that for larger companies as many as 19 units could be included while Kincaid is allowed to average with far fewer units. Id.

	TTBS. Kincaid argues that the TTBS does not offer flexibility for Kincaid because of the design of Kincaid’s power plant. PC 6299 at 11. Kincaid’s two units are 625 megawatt units. PC 6299 at 15. Kincaid expects the emissions from both units to be identical and does not expect one unit to meet a more stringent requirement. PC 6299 at 11. Because the proposed TTBS limits availability to no more than 25% of the company’s capacity in the State, Kincaid is specifically excluded from the provisions of the TTBS. PC 6299 at 15. Kincaid notes that the Agency agrees with that assessment of the TTBS. PC 6299 at 16. Further, because Kincaid expects the emissions to be identical from the two units, expansion of the TTBS to include Kincaid would provide relief to Kincaid. PC 6299 at 11.

	MPS. Kincaid argues that the agreements struck by Ameren, Dynegy, and the Agency effectively allow more than 8000 megawatts of coal-fired generation in Illinois to avoid the 90% reduction requirement until 2015. PC 6299 at 3. Kincaid notes that this is more than 50% of the coal-fired generation in Illinois. Id. Kincaid states that the MPS has been designed to accommodate the exclusive needs of Ameren and Dynegy and makes no attempt at universal appeal or feasibility. PC 6299 at 12.

	Kincaid asserts that the MPS forces emissions reductions at the Ameren and Dynegy plants that are well underway at other plants. PC 6299 at 12. Kincaid points out as an example that Kincaid has had declining NO_x and SO₂ emissions since 1998. Id. Kincaid maintains that the NO_x emissions from Kincaid are the lowest rate for a coal-fired utility in Illinois. Id. Kincaid expects the NO_x emissions in 2009, after the SCRs are operated on a year round basis, to be comparable to or lower than the NO_x limit of the MPS effective in 2012. Id.

	Kincaid argues that the SO₂ emissions rate are even more impressive and are as low as any other coal-fired utility in Illinois for 2002-2004. PC 6299 at 13. Kincaid opines that the SO₂ emissions reductions achieved by the units in the MPS will need more than ten years to achieve the same reductions in SO₂ emissions that Kincaid has made since 1998. PC 6299 at 14. Kincaid argues that for facilities like Kincaid that have already reduced NO_x and SO₂ emissions, additional percentage deductions like those proposed in the MPS, are not technically feasible or economically reasonable. Id.

CWLP’s Comment

	CWLP limited the final comment to issues concerning the MPS. PC 6296 at 2. CWLP argues that the MPS is unclear as to whether EGUs scheduled for permanent shutdown are to be considered in the calculation of the base emissions rate. Id. CWLP asserts that a plain reading of Sections 225.233(a)(3)(B) and 223.235 suggest that the base emissions rate calculation does not include EGUs scheduled for shutdown. PC 6296 at 2-3. CWLP argues that EGUs scheduled for shutdown should be included otherwise the additional emissions reductions required by the MPS could not be achieved. PC 6296 at 3. CWLP offers language to amend the rule to allow for inclusion of EGUs scheduled for shutdown. Id.

	CWLP also is concerned that the MPS could negatively impact new EGUs because of the requirement to surrender allowances for retirement. PC 6296 at 4. CWLP argues that the Agency should allow the transfer of allowances to new EGUs at the same existing source that are prevented by definition from joining the MPS. Id.

Prairie State’s Comment

	TTBS. Prairie State argues that because of the lack of long-term data, a technology based standard must be included in the rule. PC 6294 at 10. Prairie State believes that such a standard is necessary to bridge the gap between what technologies are capable of in 2009 versus 2018. Id. Prairie State concedes that the short-term tests may be promising; however, the tests are insufficient to conclude that the standards proposed can be sustained on a daily basis. Id. Prairie State asserts that USEPA took into account timing in adopting CAMR, while the Agency did not. PC 6294 at 11. Prairie State argues that a rule requiring compliance in 2009 will have to be based on technology available today given permitting, procurement and installation issues. Id. Prairie State opines that if the Agency is correct and the technology will be capable of 90% reduction, a technology based standard may never need to be used. Id. However, Prairie State believes that without a technology based standard, facilities will be “required to shut down, greatly curtail operations, or face enforcement actions” because the facilities cannot comply with the standards. Id.

	Prairie State believes that the TTBS needs improvement and delineates five different areas of concern. PC 6294 at 11-15. First, Prairie State argues that eligibility should not be tied to the use of a particular sorbent as such language is too restrictive and ignores new technologies and reagents. PC 6294 at 12. Prairie State argues that the preliminary data on high sulfur coal indicated that halogenated activated carbon may be less effective than other activated carbons and the rule should not require an EGU to go through an alternative process to use other sorbents. Id. Prairie State opines that the rule should allow the Agency to approve sorbents and allow an EGU to use such approved sorbents. Id. Prairie State suggests language to reflect this idea. Id.

	Second, Prairie State asserts that the TTBS should allow an optimization study to determine the optimum injection such as the one Prairie State performed in its construction permit. PC 6294 at 11. An optimization study would allow for consideration of variables that affect mercury removal and Prairie State argues that it is unclear if variables were considered in the proposed TTBS. Id. Further, Prairie State asserts that the provisions of Prairie State’s construction permit should be an acceptable alternative to the default rates in the TTBS. Id. New facilities, whose construction permits already include a provision regarding mercury control and the use of sorbent, should not be required to repeat the permitting process under a TTBS. PC 6294 at 13.

	Third, Prairie State believes that the TTBS should allow for a lower injection rate if particulate matter emissions are adversely impacted. PC 6294 at 13. Prairie State acknowledges that new units should not have the same particulate control device size concerns as existing units; new units may still experience problems given the lack of long-term data. Id. Prairie State also recommends that “safety issues” be added as a basis for lowering injection rates, given the testimony concerning a fire at a TOXECON baghouse. PC 6294 at 13-14.

	Fourth, Prairie State has some confusion regarding the requirement to record the activated carbon feed on an hourly average basis. PC 6294 at 14. Prairie State asserts that there does not seem to be a rationale for requiring a facility to average the activated carbon feed on an hourly basis. Id. Further, Prairie State maintains that as the mercury content of coal cannot be feasibly monitored and recorded on an hourly basis, knowing the injection rate will provide no useful information. Id.

	Fifth, Prairie State is concerned about potential timing issues with the TTBS. PC 6294 at 14. Specifically, Prairie State notes that under Section 225.237 compliance with the proposed standard commences on the date of the initial performance test. Id. Prairie State further notes that application for the TTBS must be made at least three months prior to compliance with Section 225.237 has to be demonstrated and must be included in a Title V permit. Id. Prairie State maintains that theoretically a facility would need to submit the Title V application to comply with the TTBS three months after initial start-up and before the compliance period is complete. Id. Prairie State recommends that the rule be clarified. Id.

	MPS. Prairie State argues that the proposed MPS may have serious consequences for new facilities within Illinois. PC 6294 at 15. Primarily, Prairie State is concerned about the availability of SO₂ and NO_x allowances for new facilities. Id. Prairie State asserts that if a majority of existing units sign up for the MPS, the pool of available allowances will be substantially reduced. Id. Prairie State suggests that the Agency make those relinquished allowances available to new facilities for purchase. Id.

IERG’s Comment

	MPS. IERG filed a comment on behalf of IERG’s member companies, not participating in the negotiations regarding the MPS. PC 6302 at 1. IERG notes that the Agency at hearing testified that the protective language regarding further reductions of NO_x and SO₂ emissions was limited to coal-fired EGUs choosing the MPS compliance standards. PC 6302 at 2-3. IERG’s understanding of this language and testimony is that the Agency would look to EGUs not following the MPS and/or non-EGUs to achieve further reductions in NO_x and SO₂ emissions. PC 6302 at 3. IERG is seeking further clarification on this point. Id.

	IERG has supported the CAIR/CAMR mercury emissions reductions and views the MPS as a natural extension of the co-benefit model of CAIR/CAMR. PC 6302 at 3. IERG maintains that the rulemaking as originally proposed did not appear to contemplate such an approach and while IERG understands the inclusion of compliance alternatives and the co-benefits that NO_x and SO₂ emissions reductions provide, the Agency originated separate regulatory paths for the control of mercury. PC 6302 at 3-4. IERG is concerned that the proposed MPS could have implications for other sources and IERG is not certain that the other sources have been made fully aware of these implications. PC 6302 at 4. IERG asks that the Board seek clarification from the Agency as to the implications of the MPS to other sources of NO_x and SO₂ emissions. PC 6302 at 4-5.

Ameren’s Comment

	Ameren argues that compliance with the proposed rule with the addition of the MPS is technically feasible and economically reasonable and the extensive record fully supports the adoption of the rule as amended by the MPS. PC 6301 at 1, 7. Ameren asserts that the proposed rule as amended by the MPS balances the Agency’s environmental goal of establishing effective mercury controls while supporting industry’s goal of a more stable and certain regulatory framework. Id. Ameren maintains that only Midwest Generation and SIPC have indicated continued objection to the proposed mercury rule and unlike Ameren, Dynegy and Kincaid have failed to prove any alternative proposals or amendments. PC 6301 at 6. Ameren argues that Midwest Generation and SIPC did not present any witnesses from their own respective companies to testify regarding how the proposed rule will directly impact their companies. Id.

	Ameren asserts that a multi-pollutant approach for controlling emissions of mercury, NO_x and SO₂ is advantageous over the traditional, single pollutant scheme. PC 6301 at 7. Ameren states that since reduction of mercury emissions can be obtained as co-benefits from the control of NO_x and SO₂ emissions, allowing companies to synchronize the control of these emissions is important for environmental regulations directed at EGUs. Id. Ameren indicates that evaluations performed by Ameren and consultants for Ameren revealed that mercury emissions reductions that would approach 90% using current technologies would require either a FGD/SCR system for units burning bituminous coal, or a fabric filter plus sorbent injection for units burning subbituminous coal. Id. Ameren argues that the installation of fabric filters is more expensive than an ACI-halogenated sorbent system, and Ameren therefore decided that mercury control would need to be coordinated with the company’s overall NO_x and SO₂ emissions reduction strategy. PC 6301 at 7-8.

	Ameren developed the alternative MPS proposal of general applicability that would reduce mercury emissions to satisfy the Agency’s original proposal while making substantial reductions in NO_x and SO₂ emissions. PC 6301 at 8. Mr. Menne testified that the MPS provisions allow an additional level of flexibility for mercury control, if a source commits to making specified reductions in NO_x and SO₂ emissions within a set timeframe. Id. Mr. Menne indicated that the MPS will require 90% reduction on most units on a timeframe extended by only three years while requiring reductions in NO_x and SO₂ emissions beyond those required by CAIR. Id. Ameren asserts that Illinois EGUs electing to comply with the proposal using the MPS will provide an additional health benefit not initially anticipated by the proposed rule. Id.

	Ameren argues that the MPS is generally available to all EGUs in Illinois and even if all the EGUs chose to take advantage of the MPS, the mercury emissions will be under the state mercury caps imposed by CAMR. PC 6301 at 9. Ameren notes that both Dynegy and Ameren testified that the MPS is technically feasible and both plan to take advantage of the MPS. PC 6301 at 9-10. Further, Ameren argues that even if other EGUs determine that the MPS is not technically feasible for their systems, the proposed rule allows them to utilize either the TTBS, the output based standard or the percent reduction standard to attain compliance with the Agency’s proposed mercury rule. PC 6301 at 10.

	*Impact on CAIR Proceeding.* Ameren responded to questions posed at the close of the Chicago hearing and indicated that nothing in the MPS limits in any way the Board’s authority to adopt NO_x and SO₂ emissions limits in the up coming CAIR rulemaking or any future rulemaking. PC 6301 at 10. Ameren argues that if the Board adopts the MPS, nothing requires a determination by the Board that the control of NO_x and SO₂ emissions is sufficient to attain CAIR or future nonattainment limits. Id. Ameren asserts that there is no conflict between the MPS provisions and the pending CAIR rulemaking and the Board’s authority is in no way prejudiced by the MPS amendments. PC 6301 at 11. Ameren maintains that the MPS is one envisioned by both USEPA and supported by the Lake Michigan Air Director Consortium. Id. Ameren points out that even Mr. Cichanowicz’s testimony supports a multi-pollutant strategy. PC 6301 at 12.

Environmental Advocates’ Comment

	Environmental Advocates argue that the proposal contains at least nine features which offer flexibilities. PC 6297 at 9. Environmental Advocates note that very few of the opponent’s experts include any of these flexibility mechanisms in their testimony. PC 6297 at 11. Environmental Advocates list those nine features as:

	Environmental Advocates argue that the proposal provides practical flexibility to regulated entities to allow the entities to decide how to achieve the mercury reductions. PC 6297 at 11. Environmental Advocates maintains that the Board has a complete record on activated carbon injection systems which indicates that the units can be “relatively inexpensive,” quickly installed, installed while the plant operates, and easily integrated with existing pollution control equipment. Id.

	MPS and Impact on CAIR. Environmental Advocates also responded to questions posed at the close of the Chicago hearing. Environmental Advocates assert that the MPS is a voluntary program and one avenue of compliance with the mercury removal standards. PC 6297 at 13. Environmental Advocates maintain that the MPS contain no mandatory NO_x and SO₂ emissions reductions. Id. Further, Environmental Advocates point out that the MPS does not dictate that companies undertaking the MPS be viewed as in compliance with CAIR. Id. Environmental Advocates opine that once CAIR is adopted companies who have opted into the MPS may in fact be in compliance with CAIR. Id.

	Environmental Advocates concede that a goal of the MPS is to begin addressing CAIR requirements in addition to mercury reductions; however, the outcome of the CAIR proceeding is not predetermined. PC 6297 at 14. The anticipated result of the MPS is that the reduction of NO_x and SO₂ emissions will exceed CAIR reductions, but that is only an anticipated result, according to Environmental Advocates. Id. Environmental Advocates maintain that entities opting to comply using the MPS will still be required to comply with CAIR. Id. Companies will still need to comply with cap and trade requirements of CAIR and the numeric emissions limits of the MPS. Id.

Agency’s Comment

	MPS. The Agency believes that a multi-pollutant strategy can have numerous advantages over traditional, single-pollutant schemes. For example, a MPS can increase protection of public health and the environment, reduce pollution more cost-effectively, and offer greater certainty to industry and regulators. PC 6297 at 44. The Agency argues that because mercury reductions can be achieved as a co-benefit to controls installed for NO_x and SO₂ emissions reductions, allowing companies to synchronize control of these pollutants makes sense. Id.

	The Agency argues that as a general matter the MPS will have no impact on mercury control for companies that do not opt in to the MPS. PC 6297 at 57. The mercury control requirements for companies who do not choose the MPS are the same as the requirements before the addition of the MPS. Id. The Agency asserts that the MPS is simply an alternative compliance method. Id. As to NO_x and SO₂ emissions rates under the MPS, the Agency calculated the rates for Midwest Generation and found that Midwest Generation would be required to meet the same NO_x emissions rates as Ameren and the same SO₂ reduction rate as Dynegy. Id.

	The Agency does suggest several minor changes to the language proposed in the MPS. PC 6297 at 64-65.

	*MPS and Impact on CAIR.* The Agency notes that the mercury rule focuses on the control of mercury, but contains an optional MPS that allows companies to commit to voluntarily meet numerical standards for both NO_x and SO₂ and in return receive additional flexibility in complying with the mercury standards. PC 6297 at 43-44. The Agency points out that two companies comprising over half of the coal-fired electric generating capacity in Illinois have indicated they will use the MPS. PC 6297 at 44.

	The Agency notes that both the mercury rule with the MPS and the CAIR proposal target NO_x and SO₂ emissions and in that respect the goals are the same. PC 6297 at 44-45. CAIR is a cap and trade program and sources are not technically restricted in the amount of emissions they actually emit. PC 6298 at 45-46. However, a source must hold sufficient allowances to cover their emissions during a reconciliation period. Id. Allowances can come from out-of-state sources and Illinois sources; consequently, Illinois would not be the only direct beneficiary of emissions reductions. PC 6298 at 46. Under the MPS, sources within Illinois owned by one power company will be required to meet either specific NO_x and SO₂ numeric emissions limits or a percent reduction. PC 6298 at 46-47. In addition, a source is not allowed to sell, trade or bank outside of the confines of the Illinois companies any allocated allowances equal to the level of emissions reductions needed for compliance with the MPS. PC 6298 at 47. As a result, an amount of allowances equal to the extra reductions beyond CAIR that are a result of the MPS are removed from trading and cannot be used in Illinois or other states. Id. The Agency asserts that this ensures that the reductions provide benefits in Illinois and region wide. Id.

	The Agency maintains that a company that opts to utilize the MPS for mercury control must still comply with the requirements of CAIR. PC 6298 at 49. The Agency states that a company utilizing the MPS will need to maintain sufficient allowances to meet the requirements of CAIR and emit NO_x and SO₂ at a level that complies with the requirements of the MPS. Id. The Agency argues that compliance with both rules was contemplated and accounted for in the MPS language. Id.

	The Agency concedes that allowances needed to meet the MPS limits must be surrendered; however, allowances that are a result of over compliance with the MPS can be freely traded or banked. PC 6298 at 50. The Agency also points out that since the CAIR requirements will be effective (2009 and 2010) before the mercury removal requirements under the MPS, a company electing to comply with mercury removal via the MPS will need to comply with CAIR until 2012 and 2013. Id. The Agency believes that once the MPS limits and CAIR limits apply initial compliance with the MPS will result in inherent compliance with the emissions reduction requirements of the proposed CAIR with regard to SO₂. Id.

Board Discussion of Flexibility

	The following discussion will be grouped in three areas. First, the Board will discuss averaging, and then the Board will address the TTBS. Finally, the Board will discuss the issue surrounding the MPS, including the interaction between the MPS and the CAIR rulemaking. In this section of the opinion the Board will not address the legal issues concerning the proposal of the MPS, those are discussed later in this opinion. The Board notes that as a general proposition, Midwest Generation and Kincaid argue that the rule does not really offer flexibility.

	Averaging. Midwest Generation does not believe that averaging eliminates concerns about HCI achieving 90% reduction, because to average 90% reduction mathematically, at times, even higher than 90% reduction will be required. Midwest Generation also has concerns about measurements of mercury reductions. Midwest Generation and Kincaid maintain that systemwide averaging will not add real flexibility because of the over compliance which will be mathematically required and for Kincaid, they will be forced into a seller’s market. The Board appreciates the concerns of Kincaid and, as will be discussed in more detail below, the Board believes Kincaid is uniquely situated in Illinois.

	As to Midwest Generation’s concerns, while the Board recognizes that compliance based on an average would involve reductions higher than 90% at some EGUs, the Board notes that the standard also allows units with lower than 90% to come into compliance. As noted above, the record indicates that technology capable of achieving greater than 90% mercury reductions is available. Further, the Board has found that 90% mercury reductions, and monitoring requirements for measuring such reductions to determine compliance are technically feasible. Therefore, the averaging components of the proposal add flexibility for utilities and the Board finds that the record supports their inclusion.

	TTBS. Both Midwest Generation and Kincaid feel that the TTBS does not really offer flexibility. Kincaid notes that the Kincaid facility is not eligible for the TTBS, and as indicated above, the Board will discuss the unique nature of Kincaid later in this opinion. Midwest Generation maintains that to be eligible for a TTBS, a unit must install the same control equipment as necessary to achieve 90% reduction. Further, according to Midwest Generation the inclusion of the TTBS demonstrates the Agency does not believe that the rule is technically feasible.

	The Board disagrees with Midwest Generation. Simply because a rule offers flexibility and alternative ways to achieve compliance does not mean the rule is not technologically feasible. The Board has reviewed the record and as discussed above, the Board finds the evidence supports the proposed standard of 90% reduction or 0.0080 lb/GWh emissions standard. As pointed out by the Environmental Advocates, the inclusion of multiple avenues for compliance, including the TTBS, is additional evidence to support the Board’s determination that the rule is technically feasible.

	As discussed above, Prairie State lists five particular concerns with the TTBS and suggests language to address these concerns. The Board has reviewed the language changes suggested and examined the language proposed. The Board is convinced that the changes suggested by Prairie State will clarify the intent of the TTBS. Therefore, the Board will make the suggested changes.

	MPS. Midwest Generation believes that because Ameren and Dynegy proposed the MPS, Ameren and Dynegy do not believe the underlying rule is technically feasible. Further, Midwest Generation believes that Ameren and Dynegy are concerned with financing and timing of installation of equipment. Kincaid believes that the MPS is imposing emissions standards for NO_x and SO₂ that other companies have been adhering to and that the MPS is tailored for Ameren and Dynegy. The Board does not share these concerns. First, as indicated above, the record in this proceeding indicates that the Agency has always understood that mercury reduction can be achieved through co-benefits. The Board finds that the MPS is memorializing a type of co-benefit and that any company in Illinois may take advantage of the MPS. The MPS simply offers companies alternatives for compliance that may be more economically reasonable.

	The Agency’s final comment includes calculations for Midwest Generation and the calculations demonstrate that if Midwest Generation were to utilize the MPS, the NO_x and SO₂ emissions would be similar to those for Dynegy and Ameren. The decision to utilize the MPS is voluntary and the MPS, like the TTBS, is an alternative compliance option in the rule. As the Board stated above, the inclusion of alternative compliance options does not render the rule technically infeasible. Furthermore, Ameren and Dynegy have specifically stated that the MPS is technically feasible for their companies, and although Kincaid may not be in a position to utilize the MPS, other companies may. Therefore, the Board finds that the rule with or without the inclusion of the MPS is technologically feasible.

	Additional concerns including the MPS involve the relationship with CAIR and with other sources. The Agency, Environmental Advocates, and Ameren all addressed the relationship between CAIR and the inclusion of the MPS. All point out that the MPS is voluntary and nothing in the language of the MPS can be viewed as implying that compliance with the MPS equates with compliance with CAIR. Further, both Environmental Advocates and the Agency agree, that if a company utilizes the MPS for mercury control, the company must still comply with the requirements of CAIR. Based on these discussions and the Board’s review of the MPS language and the CAIR proposal (See Proposed New Clean Air Interstate Rules (CAIR) SO₂, NO_x Annual and NO_x Ozone Season Trading Programs, 35 Ill. Adm. Code 225.Subparts A, C, D and E R06-26), the Board agrees that the proposed MPS does not conflict or in any way abridge the Board’s authority in CAIR.

	The remaining issues raised have to do with the surrendering of allowances and the impact of the MPS on other sources. Both Prairie State and CWLP suggest that rather than surrendering and then retiring allowances, the Agency use those allowances for new facilities. IERG raises a concern about the language that any additional reductions will be sought from other sources.

	The Board is not convinced that requiring that allowances be surrendered and then retired will have a detrimental impact on new facilities. Allowances for SO₂ and NO_x will be available pursuant to CAIR and the record in this proceeding does not support the change requested by Prairie State and CWLP. As to the impact on other sources, any additional reductions will be accomplished through rulemaking proceedings and at that time other sources can challenge the changes. Nothing in the MPS automatically reduces emissions for sources that do not elect to utilize the MPS.

	The Board has reviewed the issues raised about the technical feasibility of the MPS and inclusion of the MPS in the proposed rule. Based on the record, the Board finds that the MPS is technically feasible and the Board will proceed to second notice with the rule including the MPS. The Board will include the changes to the MPS suggested by the Agency in PC 6298 and agreed to by Ameren.

	Board Conclusion. The Board finds that the rule offers flexibility allowing the regulated community to choose alternative methods for compliance with the rule. Including alternative compliance methods does not somehow render the underlying rule technically infeasible. Rather, the inclusion of such flexibility solidifies the technical feasibility of the rule proposal. Therefore, the Board finds that the proposed inclusion of alternative options for compliance is appropriate.

	The Board finds that the proposal the Board adopts today is technically feasible. The proposal sets forth requirements for the control of mercury emissions that are feasible and can be achieved by utilities in the State. The proposal calls for measuring mercury emissions in a manner, which is also technically feasible. Finally, the rule allows flexibility for compliance with the emissions standards that further support the technical feasibility of the rule.

ECONOMIC REASONABLENESS

	Because the opponents argue issues surrounding deposition and the modeling of deposition of mercury, the health benefits which may be achieved by controlling mercury, fish advisories and the economics of controlling emissions when challenging the economic reasonableness of the proposal, the Board will address those issues in this section of the opinion. The following will summarize the comments on each of those areas and then the Board will discuss the findings of the Board.

Deposition and Modeling

	In this section of the opinion, the Board will summarize the arguments of the participants concerning deposition and modeling deposition of mercury. After summarizing the arguments, the Board will discuss the issues and make findings on the issues.

Midwest Generation’s Comment

	Because the Agency has justified the proposal on the basis of protecting the public health in Illinois and eliminating mercury-impaired waters by reducing fish tissue methylmercury levels in the state, Midwest Generation suggests that a threshold issue is “whether there is a local impact on such methylmercury levels from power plant emissions of mercury.” PC 6300 at 64. Midwest Generation states that, “[i]f there is no local deposition or if local deposition is not to impaired waterbodies, reducing the emissions will not have the desired effect.” Id. Generally, Midwest Generation argues that the Agency has failed to demonstrate that coal-fired EGUs are the source of a mercury problem and that the proposal will actually reduce deposition of mercury to the state’s waters. Id. at 64-65.

	Specifically, Midwest Generation argues that “[t]he Agency presented no chemistry transport or deterministic modeling data or any dispersion modeling to support its claim that Illinois coal-fired power plants contribute to mercury deposition in Illinois waterbodies.” PC 6300 at 64. Midwest Generation notes that the Agency entered into a contract with Environ for the performance of CAMx chemistry transport modeling to determine whether mercury deposition from power plants contributes to impairment of Illinois waters. Id. Midwest Generation argues that the Agency saw Environ’s preliminary results and then canceled the contract because it “did not like those results.” Id.

	Midwest Generation states that the Agency relied on the expertise of Dr. Gerald Keeler, who testified with regard to two studies he performed: the Lake Michigan Mass Balance Study from 1994-95 (Exh. 26), and a Steubenville study (PC 6292). Dr. Keeler also commented on a Florida study from 2002 (Exh. 20) and a Detroit study from 2005 (Exh. 27). Midwest Generation argues that the Agency cannot claim that the proposal will actually protect public health in Illinois because none of the studies relied upon by Dr. Keeler show whether Illinois EGU’s impair Illinois waters or whether the proposal will have an effect on the level of any impairment. PC 6300 at 65.

	Midwest Generation makes a number of points in an effort to discount the findings of Dr. Keeler’s Steubenville study. First, Midwest Generation disputes Dr. Keeler’s view that the type of coal burned in the vicinity of Steubenville does not matter. PC 6300 at 67-68, citing 6/15Tr. at 115-16. Midwest Generation stresses that Illinois EGUs largely burn PRB coal, which emits mostly elemental mercury that is less readily deposited and less likely to undergo methylation than reactive gaseous mercury (RGM). PC 6300 at 66-67, citing Exh. 44, Exh. 127, 6/15Tr. at 34-35, 115-17. Second, Midwest Generation argues that the landscape near Steubenville influenced the results of the study there. PC 6300 at 68. Specifically, Midwest Generation notes that Steubenville is situated at the eastern end of Ohio River, which scarcely influences Illinois, “with a mountain range to the east affecting weather patterns.” Id. With respect to this issue of geography, Midwest Generation argues that “[t]here is nothing about the Steubenville study that is transferable to Illinois’ circumstances.” Id. Third, Midwest Generation notes that Dr. Keeler attributed a great deal of precipitation during his study to hurricane-related events, suggesting that his findings may have been influenced by events that are not likely to be repeated. Id., citing 6/16Tr. at 9-10, Exh. 32. Fourth, Midwest Generation cites Dr. Peter Chapman’s examination of mercury levels in sediment and fish relative to the location of Illinois power plants, which “found no consistent relationship.” PC 6300 at 68, citing Exh. 129 at 7, 8/22Tr. at 47-48. Finally, Midwest Generation notes that “the determinative or chemical transport modeling performed by USEPA in the course of the CAMR and by AER Incorporated (AER), both in the course of the development of comments on the CAMR and in the course of its modeling performed for this rulemaking, predicted deposition within the range of that measured by Dr. Keeler.” PC 6300 at 68, citing Exh. 32, CTr. at 1404.

	Midwest Generation also makes a number of arguments to discount the Florida study. Midwest Generation notes that, while the area near the Everglades includes coal-fired power plants, “the greatest number of sources and those whose mercury emissions were significantly reduced were various types of incinerators.” PC 6300 at 69. Generally, these incinerators have a number of features that distinguish them from power plants. Incinerators tend to burn fuel that is “extremely variable.” Id. at 70. Incinerators also generally have a shorter stack height and emit at a lower velocity, two factors influencing the height to which a plume will rise. Id., citing CTr. at 1472. Also, incinerators tend to emit more RGM than power plants. PC 6300 at 70, citing Exh. 126 at 15-16. Furthermore, Midwest Generation argues that, in terms of weather, vegetation, area, and other factors, impaired waters in Illinois bear no resemblance to the Everglades. PC 6300 at 71. Consequently, Midwest Generation argues that the Florida study is “largely irrelevant” and that “there is no reason to expect similar results in Illinois.” PC 6300 at 69. “The Agency’s naked assumption that the results are transferable does not make it so.” Id.

	Midwest Generation quickly dismisses the Lake Michigan Mass Balance Study, which “showed typical urban contributions to atmospheric mercury levels over the Lake Michigan basin.” PC 6300 at 65, citing TSD, App. B at 4. Midwest Generation emphasizes Dr. Keeler’s statement that the Chicago-Gary “urban/source area contributed almost 20% of the total deposition to Lake Michigan, and 14% to the wet deposition.” PC 6300 at 65, citing TSD, App. B at 9. Midwest Generation further emphasizes that that the study found higher mercury levels in urban areas than in rural areas. PC 6300 at 65, citing TSD, App. B at 4. Noting that Dr. Keeler himself attributed some mercury to mobile sources (PC 6300 at 65, citing 6/15Tr. at 22), and arguing that, as a matter of logic, Illinois mercury levels can in part also be attributed to mobile sources, Midwest Generation insinuates that the study does not provide an accurate basis for attributing mercury deposition to particular sources. See PC 6300 at 65.

	Midwest Generation argues that “[t]he power generation companies presented the only chemistry transport modeling of predicted mercury deposition in Illinois by Illinois power plants.” PC 6300 at 71, citing Exh. 126, Exh. 127. Midwest Generation recommends that the Board consider the results obtained by AER using a model called TEAM (Trace Element Analysis Model). PC 6300 at 71-72. Midwest Generation argues that TEAM has been peer-reviewed and published (PC 6300 at 71, citing CTr. at 1354, Exh. 127), has been improved regarding atmospheric mercury (PC 6300 at 71, citing Exh. 126), yields results similar to those obtained by USEPA using the Community Multi-Scale Air Quality (CMAQ) model (PC 6300 at 71, citing CTr. at 1355), and is consistent with the conclusion of the Steubenville study (PC 6300 at 71, citing CTr. at 1404, 1513, Exh. 127).

	Midwest Generation stresses AER’s conclusion “that 19% of the mercury deposition in Illinois is attributable to all power plants in the U.S.” PC 6300 at 73, citing CTr. at 1370-71, Exh. 127 (emphasis in original). More specifically, argues Midwest Generation, “AER found that the difference in deposition between the Illinois mercury rule and the 2020 CAIR/CAMR reductions is less than 10%.” PC 6300 at 74, citing Exh. 127. Midwest Generation further argues that AER located “no elevated concentrations of mercury predicted within the vicinity of any of the power plants under any scenario.” PC 6300 at 74 n.38 (defining “hot spot”).

	Midwest Generation argues that, in 2010, CAIR/CAMR will reduce mercury deposition in Illinois by approximately five percent. PC 6300 at 73, citing CTr. at 1410, Exh. 127. Midwest Generation further argues that, assuming no net change attributable to the MPS, the Agency’s proposal would generate an additional reduction in deposition of approximately four percent. PC 6300 at 73, citing CTr. at 1410, Exh. 127. Midwest Generation cites the testimony of both Dr. Chapman and Dr. Charnley, who believe that this additional four percent reduction would not measurably reduce methylmercury levels in Illinois fish tissues, would not cause any waterbody to be removed from the state’s list of mercury-impaired waters, and would not affect the health of Illinois citizens. PC 6300 at 73, citing 8/22Tr. at 12-15, 1660. Since Midwest Generation claims that the Agency’s rules will not produce any of these effects, Midwest Generation argues that “the Agency’s claimed benefits are illusory and the justification for the proposal fails.” PC 6300 at 73.

Environmental Advocates’ Comment

	The Environmental Advocates argue that both Dr. Keeler for the Agency and Mr. Vijayaraghavan for Midwest Generation have provided support for the proposition “that reducing mercury emissions from Illinois coal plants is likely to result in a reduction in mercury deposition in Illinois itself.” PC 6297 at 8-9. Stressing that the Board may and will adopt regulations that control only one source category, or emissions into a single medium, or emissions posing a potential threat, the Environmental Advocates argue that, “when measured next to the facts in the record, the Illinois EPA’s mercury pollution reduction proposal greatly exceeds the threshold for regulatory activity.” PC 6297 at 5.

	The Environmental Advocates argue that “Illinois’ coal-fired power plants are the largest unregulated source of mercury emissions in the state.” PC 6297 at 5. The Environmental Advocates cite a National Emissions Inventory showing that those power plants contribute as much as 71% of mercury emissions in the state, more than the national average of a 44% contribution. Id., citing 6/12Tr. at 47, TSD at 33-34. The Environmental Advocates further argue that “[t]his fact alone, largely uncontested in this rulemaking, provides a powerful justification for the development of an Illinois-specific rule mandating deeper, faster reductions from this source category than required under CAMR.” PC 6297 at 6.

	The Environmental Advocates rely in part on the testimony of Mr. Vijayaraghavan in support of their claim that the Agency’s proposal will reduce mercury deposition in Illinois more than CAMR. By 2010, argue the Environmental Advocates, Mr. Vijayaraghavan testified that the Agency’s proposal will generate an additional 4.2% reduction in deposition compared with CAMR and that that reduction will occur throughout the state. PC 6297 at 6, citing CTr. at 1422, 1433, 1462. In addition, the Environmental Advocates emphasize Mr. Vijayaraghavan’s estimate that in 2010 the Agency’s proposal will reduce mercury deposition by 321 pounds more than CAMR. PC 6297 at 7. The Environmental Advocates also rely on Dr. Keeler’s Steubenville study attributing mercury deposition there to local and regional coal combustion (see PC 6292) in support of their claim that “reducing mercury emissions from Illinois coal plants is likely to result in a reduction in mercury deposition in Illinois itself.” PC 6297 at 8-9.

Agency’s Comment

	The Agency’s TSD concedes that there remains some degree of uncertainty regarding the manner in which atmospheric processes deposit mercury on the ground, and the Agency further acknowledges that the issue requires additional research. TSD at 81. However, the Agency stresses that “recent monitoring, modeling, and other research in recent years has led to an increased understanding of the sources of mercury, the chemical transformations that affect it, and the processes in the atmosphere that cause it to be deposited to the ground.” PC 6298 at 15, citing TSD at 81 (§ 5.1). The Agency’s TSD concludes “that, by reducing mercury emissions from coal-fired generating units in Illinois, the proposed Illinois EPA rule would significantly reduce deposition of mercury in Illinois.” PC 6298 at 15, citing TSD at 81 (§ 5.1). The Agency notes studies conducted in Florida and Massachusetts, which “showed rapid and steep declines in measured concentrations of mercury in fish tissue when mercury emissions from nearby sources such as incinerators and fossil fuel combustion were curtailed by regulations.” PC 6298 at 15, citing TSD at 81-86 (§ 5.2). The Agency argues that the testimony of Dr. Gerald Keeler supports these conclusions. PC 6298 at 15-16.

	Specifically, Dr. Keeler testified regarding a multi-year source-receptor study of mercury deposition in the vicinity of Steubenville, Ohio. PC 6298 at 16. That study collected daily precipitation samples in 2003-2004 and then analyzed them to determine the presence of trace elements. Id. The study then employed modeling to identify those elements as “fingerprints” corresponding to various categories of emissions sources. Id. “To determine the direction and distance from which samples arrived, the researchers used back trajectory analysis of available weather systems.” Id. The Agency states that, on the basis of this study, Dr. Keeler concluded that coal combustion sources accounted for approximately 70 percent of the wet deposition of mercury. Id., see generally PC 6292. “Other large industrial sources located in the area of Steubenville were not significant contributors to mercury deposition.” PC 6298 at 16, citing Exh. 10 at 4. The Agency further states that Dr. Keeler’s analysis showed that “a substantial amount of the mercury deposition found at the Steubenville site was due to local and regional sources.” PC 6298 at 16, citing Exh. 10 at 3. Regarding the form of mercury emitted by coal combustion sources, the Agency notes Dr. Keeler’s statement that “the lifetime of elemental mercury in the atmosphere is likely much shorter than previously believed. Thus mercury may be deposited much closer to its source, even if emitted in elemental form, if oxidizing compounds are present in the atmosphere.” PC 6298 at 16, citing TSD at 78.

	The Agency stresses the scientific basis for Dr. Keeler’s conclusions. The Agency notes that Dr. Keeler’s source-receptor study is empirical in nature, relying on “observation made at sampling or receptor sites.” PC 6298 at 16-17, citing Exh. 10 at 4. The Agency further notes that Dr. Keeler compared his methods to the source-oriented Eulerian models such as that used by Midwest Generation’s witness, Mr. Vijayaraghavan. While acknowledging that those Eulerian models can be useful, Dr. Keeler stated that they

are limited by the large uncertainties in emission inventories including the lack of speciated mercury emission profiles, atmospheric mercury chemistry, and accurate wet and dry deposition parameterizations. Receptor models differ from source-oriented models in that they use statistical methods for which implementation only relies upon observations of deposition at a location or receptor. PC 6298, citing Exh. 10 at 4.

More specifically, the Agency emphasizes Dr. Keeler’s statement that CMAQ, a Eulerian model endorsed by USEPA, “underestimated mercury wet deposition by varying amounts up to a factor of two.” PC 6298 at 17.

	The Agency notes Dr. Keeler’s testimony that “reduction in emissions from coal combustion sources in the region would have a significant impact on the amount of mercury deposited via both wet and dry deposition.” PC 6298 at 17, citing Exh. 10 at 5. The Agency further notes that, because Illinois has 21 coal-fired EGUs emitting approximately four tons of mercury annually, Dr. Keeler argued that reduced emissions would particularly benefit impaired waters in Illinois. PC 6298 at 17, citing Exh. 10 at 5. Specifically, the Agency states Dr. Keeler’s view that “reductions in emissions of mercury in Illinois will yield significant reductions in mercury deposition in Illinois.” PC 6298 at 17, citing TSD at 81, 6/13Tr. at 98.

	The Agency argues that Mr. Vijayaraghavan actually “confirmed the accuracy of Dr. Keeler’s critique of the use of Eulerian models to predict deposition of mercury.” PC 6298 at 19. The Agency first claims that Mr. Vijayaraghavan “admitted that there were few actual measurements of the mercury species emitted by coal-fired power plants, even though the deposition and biological activity of different mercury species are very different.” Id., citing CTr. at 1383, 1386-87. Second, the Agency argues that Mr. Vijayaraghavan acknowledges that mercury emissions can be affected by factors such as the chlorine content of coal but that these factors have not been measured and generate some degree of uncertainty. PC 6298 at 19, citing CTr. at 1383-84. Third, the Agency claims that Mr. Vijayaraghavan stated that his model makes assumptions about the atmospheric chemistry of mercury because of uncertainties regarding the transformation of mercury species. PC 6298 at 19, citing CTr. at 1388. Finally, the Agency claims that Mr. Vijayaraghavan acknowledges that his model may not accurately predict local or regional contribution to mercury deposition because it does not take into account the effect of thunderstorms. PC 6298 at 19-20, citing CTr. at 1394-95, 1397-99, 1467, 1470, 1472.

	The Agency suggests that Mr. Vijayaraghavan’s testimony on behalf of Midwest Generation on the issue of deposition is not inconsistent with Dr. Keeler’s. See PC 6298 at 18-20. First, the Agency notes that “Mr. Vijayaraghavan agreed that the source-receptor method used by Dr. Keeler was a valid method of investigation of mercury deposition.” PC 6298 at 18. Second, the Agency noted Mr. Vijayaraghavan’s comment that his own modeling analysis yielded a result consistent with Dr. Keeler’s conclusion that coal-fired EGUs located within 1000 kilometers of Steubenville contribute approximately 70% of wet mercury deposition in the vicinity of Steubenville. Id., citing CTr. at 1512. Third, the Agency argues that Mr. Vijayaraghavan acknowledged that the Agency’s proposal would provide approximately twice the reduction in mercury deposition of CAMR in 2010 and that most of the benefits of that accelerated reduction would occur in Illinois. PC 6298, citing CTr. at 1422, 1425, 1428, 1434, 1436, 1462.

Board Discussion on Deposition and Modeling

	As noted above, Midwest Generation disagrees with the Agency’s conclusion that significant mercury emissions reduction in Illinois will yield significant reductions of mercury deposition in Illinois. Midwest Generation’s concerns about modeling and mercury deposition focuses on three main areas: (1) the Agency’s reliance on results of studies performed in other parts of the country such as Ohio, Florida, and Massachusetts that are not specific to Illinois; (2) appropriateness of using receptor models instead of chemical transport or deterministic model; (3) whether the predicted local deposition of mercury is significant enough to warrant mercury controls on Illinois coal combustion plants. The Board will address those concerns below.

	Reliance on Studies Not Specific to Illinois. Midwest Generation asserts that none of the studies relied upon by the Agency’s expert Dr. Keeler show whether Illinois EGUs impair Illinois waters or whether the proposal will have an effect on the level of any impairment. Midwest Generation argues that the results of the studies relied upon by the Agency are not applicable to Illinois because of differing weather systems, geographic settings, and coal types. The Board notes that the Agency relies on the results of the Florida and Massachusetts studies to support the Agency’s assertions. However, the Agency primarily relies upon Dr. Keeler’s Steubenville study and his hearing testimony to conclude that reduction of mercury emissions from EGUs will result in a reduction of local wet deposition of mercury.

	Although the studies relied upon by the Agency were not Illinois specific, the Board notes that it is not unusual for the Board to adopt regulations relying on such studies. The Board routinely adopts regulations based on regional or nationwide modeling performed by the USEPA that are not specific to Illinois. In light of this, the Board will consider the studies submitted by the Agency in evaluating the merits of the Agency’s proposal. Initially, the Board recognizes that while the sources of mercury emissions considered in the Florida and Massachusetts studies were primarily incinerators, the Steubenville study dealt with coal combustion sources. Although all the three studies support the Agency’s contention that reduction of mercury emissions from coal combustion plants would significantly reduce local mercury deposition, the Board will discuss the issues raised by Midwest Generation concerning the Steubenville Study, since Agency’s justification is largely based on that study.

	Regarding the Steubenville study, the Board considers whether the conditions in Steubenville, Ohio make the results so unique that the results are not applicable to any area other than Steubenville. The Board notes that Dr. Keeler provided testimony as to why the results of Steubenville study are applicable to Illinois. He testified that “conditions [in Steubenville] are not unique or anomalous to make them so they are not usable or transferable to conditions that we would have in Illinois.” 6/16amTr. at 84. Dr. Keeler explained that the Great Lakes are dominated by synoptic meteorological transport, which is the large-scale movement of the “highest and low pressure systems” across the Great Lakes. Id. Therefore, as long as specific meteorology that occurs in a location is taken into account, the controlling factors are not that much different for Illinois than Ohio. Id. at 84-85.

	With respect to coal type, and the form (elemental or reactive) of mercury emissions, Midwest Generation argues that Illinois EGUs primarily burn PRB coal, which results in the emissions of mostly elemental mercury in contrast to mostly reactive mercury emitted by sources in the Steubenville area. Elemental mercury is less readily deposited and less likely to undergo methylation. Dr. Keeler testified that while municipal and medical waste incinerators emit greater than 80% reactive mercury, coal-fired utilities emissions of reactive mercury range from approximately 52 to 82%. The lower end of the range represents emissions from sub-bituminous (PRB) coal-fired plants. 6/14Tr. at 244. Although the proportion of reactive mercury in emissions from PRB coal burning plants is less than bituminous coal-fired plants, the Board notes that the proportion of such emissions from PRB coal plants are still greater than 50%. Further, Dr. Keeler testified that recent studies pertaining to mercury chemistry suggests that in certain environments, such as downwind of urban areas, elemental mercury is rapidly transformed to reactive mercury. 6/15Tr. at 192. He noted that observational evidence at Steubenville indicates this phenomenon. 6/15Tr. at 193.

	In light of the above, the Board finds that reliance on the findings of the Steubenville study to evaluate the impact mercury emissions from Illinois utilities on Illinois waters is appropriate.

	Receptor Model v. Chemical Transport Model. Midwest Generation argues that the Board should consider AER’s modeling results presented by Midwest Generation’s expert, Mr. Vijayaraghavan. Midwest Generation asserts that the receptor modeling performed by Dr. Keeler reflects what is actually in the atmosphere and cannot predict future deposition. PC 6300 at 72. Midwest Generation maintains that the chemical transport or deterministic model called TEAM used by AER predicts the impact of mercury emissions from Illinois power plants on Illinois water bodies. PC 6300 at 64. Midwest Generation maintains that the Agency did not present any chemical transport or deterministic modeling to demonstrate that the target of the rule is the source of the perceived problem; or that the proposed rule will have the desired effect of reducing deposition from Illinois power plants to Illinois waters. PC 6300 at 64-65.

	The Board notes that regulating agencies routinely use models for evaluating impacts of various emissions reduction levels on air quality, or apportioning the sources of a specific contaminant. However, the type of model relied upon depends on the purpose of the evaluation. In this proceeding, as noted by Midwest Generation, the first question that needs to be answered is whether the Illinois coal-fired utilities (the target of the rules) are the significant source of mercury impairment of Illinois water bodies. In order to answer this question, the Board must determine that the mercury emissions from Illinois coal-fired plants are a significant source of mercury deposition in the state. The record indicates that while receptor models have been used successfully to apportion sources of mercury deposition, the chemical transport or deterministic models are limited by large uncertainties in emissions inventory, and lack of speciated mercury emissions profiles, atmospheric mercury chemistry and accurate deposition parameterization.

	Mr. Vijayaraghavan, who performed AER’s modeling exercise, recognized shortcomings in the deterministic models. He acknowledged that there are few actual measurements of mercury emissions from EGUs and that “there is some level of scientific estimation that goes into this emissions modeling.” CTr. at 1383. He further agreed that a number of factors influence mercury emissions from EGUs, leading to “some level of uncertainty in emissions.” Id. at 1384. Also, he states that the chemical transformation of mercury in the atmosphere is not understood with complete certainty and that the TEAM model must make some assumptions regarding that phenomenon. Id., at 1387-88. Mr. Vijayaraghavan also acknowledged that the TEAM model fails to account fully for thunderstorms, resulting in underestimation of mercury deposition. Id., at 1394-95.

	To the contrary, the record indicates a multivariate statistical receptor models have been used successfully in Ohio, and Florida to apportion sources of mercury deposition. These models use statistical methods that are implemented by relying on observations of deposition at a site or receptor. Further, receptor models are not dependent on source profiles or emissions inventories. In this regard, the Board notes that Dr. Keeler provided extensive testimony regarding the Steubenville Study, which involved the use of receptor models to determine sources contributing to mercury in wet deposition. This study found that coal-fired utilities contributed approximately 70% of the mercury wet deposition at the Steubenville site. Although this study was not Illinois specific, as noted above, the Board found that the study results are applicable to Illinois. Therefore, the Board finds that the Agency correctly relied on the receptor modeling to demonstrate that Illinois utilities are a significant source of mercury deposition within the state.

	Whether the Predicted Local Deposition of Mercury Warrant Mercury Controls. As noted above, the Steubenville study results indicate that coal combustion sources accounted for approximately 70 percent of the wet deposition of mercury at the Steubenville site. Further, Dr. Keeler’s analysis showed that “a substantial amount of the mercury deposition found at the Steubenville site was due to local and regional sources.” PC 6298 at 16, citing Exh. 10 at 3. Although the Steubenville study addressed wet deposition, Dr. Keeler noted that “[e]levated ambient mercury levels near large sources suggest that dry deposition would also be elevated and likely to be similar in magnitude to the wet deposition.” Exh. 10 at 5. Accordingly, he concludes that “reductions in emissions from coal combustion sources in the region would have a significant impact on the amount of mercury deposited via both wet and dry deposition.” Id.

	Testifying on the issue of deposition on behalf of Midwest Generation, Mr. Vijayaraghavan did not persuasively undermine Dr. Keeler’s conclusions on that issue. Although Mr. Vijayaraghavan performed deposition estimates based on a Eulerian model known as TEAM (CTr. at 1355-56), he did not dispute the validity of the source-receptor model used by Dr. Keeler. See CTr. at 1512-13. In fact, he agreed that Dr. Keeler’s source-receptor method produced results comparable to and within the range of his own estimate of mercury deposition contributed by coal-fired EGUs. Id.

	Addressing the effects of the proposed regulation in 2010, Mr. Vijayaraghavan agreed that the Agency’s proposal would result in an additional decrease in mercury deposition in comparison with the federal CAMR rule. CTr. at 1422-23, 1457. Stated another way, Mr. Vijayaraghavan agreed that, in 2010, the federal CAMR rule would result in higher levels of mercury deposition for virtually the entire State of Illinois. Id. at 1436-37. He also stated that the Agency’s proposal would by 2010 reduce mercury deposition by approximately the same amount that CAMR would reduce it by 2020. Id. at 1430. Mr. Vijayaraghavan also agreed that Illinois would receive most of the benefits of the rule. Id. at 1425. Applying the TEAM model to the single year of 2010, Mr. Vijayaraghavan acknowledged that the Agency’s proposal would reduce mercury deposition in Illinois by 321 pounds more than the federal CAMR proposal. Id. at 1496-97.

	In addition to the above modeling studies, the Board notes that mercury deposition study in the Florida Everglades showed that within a few years after state and federal requirements reduced mercury emissions, mercury measured in the tissues of largemouth bass “showed substantial declines.” TSD at 81-82. The Agency further states that the relation between atmospheric mercury load to the Everglades and the body burden of largemouth bass has been modeled to be nearly one-to-one. TSD at 84-85; 6/14Tr. at 205-08 (Keeler testimony); Exh. 20 at 68. Similarly, significant reductions in mercury emissions resulted in a steep decline in fish tissue levels from the waters of northeastern Massachusetts within five years. TSD at 86; Exh. 20 at 14; TSD at 86 (Figure 5.8: Representative Fish Tissue Mercury and Incinerator Emissions Changes Versus Time in NE MA). The Board recognizes that the Florida and Massachusetts study dealt with reduction of mercury emissions mostly from incinerators. However, both the studies lend support to the Agency’s contention that significant reduction in mercury deposition results in reduction of mercury levels in fish tissue.

	Based on the above evidence, the Board finds that the record strongly supports the Agency’s contention that mercury emissions from Illinois utilities contribute significantly to mercury deposition on Illinois waters. Further, the Board finds that a reduction of mercury emissions from Illinois utilities would have significant impact on the amount of mercury deposited on Illinois waters.

	Board Conclusions on Modeling and Deposition. The Board finds that the record in this proceeding, including the testimony of Dr. Gerald Keeler, demonstrates that a reduction in mercury emissions in Illinois will result in reduction of mercury deposition in the State. Although the Agency relies heavily upon Dr. Keeler’s Steubenville study (PC 6292), the Board believes that that study persuasively demonstrates that local and regional coal combustion sources contribute significantly to the wet deposition of mercury. The Board finds that the results of the Steubenville study are valid for evaluating the impact of mercury emissions from Illinois utilities on Illinois waters. Further, the use of receptor models is appropriate for apportioning the sources of mercury deposition. Finally, while the Florida and Massachusetts studies may be based upon factors such as geography and sources that are different from Illinois, the Board finds those studies support the Agency’s contention that a reduction of mercury deposition will result in a reduction of mercury levels in fish tissue.

	On the basis of the record, the Board concludes that that a reduction in mercury emissions in Illinois will result in reduction of mercury deposition in the state. The Board notes that, compared with CAMR, the Agency’s proposal reduces those mercury emissions more quickly and more deeply. Accordingly, the Board finds that the Agency’s proposal can be expected to result in reduced mercury deposition in the state and the expected result supports adoption of the proposal.

Health Effects

LEGAL ISSUES

	The participants have raised several legal issues concerning portions of the proposal. Both Kincaid and Midwest Generation challenge the Board’s authority to adopt the language of the MPS before proceeding to second notice. Specifically, Kincaid argues that the Board cannot adopt the NO_x and SO₂ provisions under Illinois and federal administrative law. PC 6299 at 19. Kincaid also argues that adoption of NO_x and SO₂ is prohibited by Section 27 of the Act (415 ILCS 5/27 (2004)) and SO₂ rules are prohibited by Section 10 of the Act (415 ILCS 5/10 (2004)). PC 6299 at 30. Midwest Generation joins Kincaid in challenging the inclusion of SO₂ limits as being a violation of Section 10 of the Act (415 ILCS 5/10 (2004)). PC 6300 at 29. Kincaid and Midwest Generation argue that the U.S. Constitution precludes adoption of the MPS. PC 6299 at 31; PC 6300 at 32.

	In addition to the legal challenges concerning the MPS, Midwest Generation also argues that the inability to measure mercury removal violates the Due Process Clause of the Constitution. PC 6300 at 46. The Board will address each of the challenges in turn.

Illinois and Federal Administrative Law

Kincaid’s Comment

	Kincaid argues that adoption of the MPS would violate both federal and State administrative law because of the inclusion of NO_x and SO₂ limits. PC 6299 at 19. Kincaid cites numerous federal cases which establish that if the amendment is not a “logical outgrowth” of the rulemaking, the amendment is improper. PC 6299 at 19-25. Kincaid argues that other states have also confronted this issue and referenced and followed the federal holdings. PC 6299 at 26. However, Kincaid has found no Illinois case law on point, but relies on Senn Park Nursing Center v. Miller, 104 Ill. 2d 169, 470 N.E.2d 1029 (Ill. 1984) for support. In Senn Park, the Illinois Supreme Court indicated that actual knowledge of a change by an appealing party was not sufficient to satisfy the agency’s legal requirements for notice and comment as to the change. PC 6299 at 27, citing Senn Park, 470 N.E.2d at 1035.

	Kincaid asserts that the Board’s adoption of the MPS would violate the “fundamental and long-established tenet of administrative law” that only amendments, which are a logical outgrowth of the original proposal, may be adopted. PC 6299 at 27. The proposed rule did not contain any reference to regulation of NO_x and SO₂ so no potentially interested party would have “any inkling” that NO_x and SO₂ might be addressed in the final rule, argues Kincaid. Id. Further, Kincaid asserts that the fact that the MPS is only one method of achieving compliance does not relieve the Board from the requirements of the APA. Id.

	Kincaid maintains that the failure to identify the MPS in the Board’s first notice has specifically prejudiced Kincaid. PC 6299 at 28. Kincaid notes that no formal notice for the concept of regulating SO₂ and NO_x was ever provided and that, given the brief time between the filing of the joint statement and the Board’s hearing, there was not adequate opportunity to respond to the MPS in any meaningful manner. PC 6299 at 28. Kincaid argues that these are not minor concerns as controls on SO₂ and NO_x are highly technical and can cost tens or hundreds of millions of dollars. PC 6299 at 28-29. Kincaid opines that for the Board to believe that Kincaid could intelligently respond to such a significant departure from the original proposal in only ten business days is arbitrary and capricious. PC 6299 at 29. Kincaid maintains that not only would the adoption of the MPS violate fundamental and long established tenants of administrative law, Kincaid would be directly harmed by any such adoption. PC 6299 at 29.

Midwest Generation’s Comment

	Midwest Generation also questions whether regulation of SO₂ and NO_x under mercury regulation is appropriate. PC 6300 at 26. Midwest Generation argues that NO_x and SO₂ have nothing to do with the requirements to control mercury emissions and the inherent problems with inclusion of NO_x and SO₂ were “apparent” at the Chicago hearing. PC 6300 at 27-28. Midwest Generation asserts that participants found themselves repeatedly asking questions concerning the implications of the inclusion of NO_x and SO₂. PC 6300 at 28.

Agency’s Comment

	The Agency comments that the proposed rule focuses on the control of mercury emissions, but contains the optional MPS provisions so that companies can comply using an alternative method. PC 6298 at 43. The Agency states that under the MPS, companies can commit to voluntarily meet numerical emissions standards for NO_x and SO₂ in return for flexibility in complying with the mercury emissions standards. PC 6298 at 43-44.

Board Discussion of Illinois and Federal Administrative Law

	The legal challenge to adopting the MPS presented here is simply that regulation of NO_x and SO₂ is not a logical outgrowth of the regulation of mercury. If the MPS required every EGU in the State to comply with NO_x and SO₂ emissions standards, the Board might agree with the arguments presented by Kincaid and Midwest Generation. However, the MPS does not require every EGU in the State to comply with emissions standards for NO_x and SO₂. Rather, the MPS establishes mercury emissions limits and to achieve those emissions limits, EGUs may elect to utilize co-benefits realized from emissions reductions of NO_x and SO₂. An EGU that does not choose to comply with the mercury rule using the MPS is not subject to NO_x and SO₂ reductions as a result of this rulemaking.

	Control of mercury emissions and limits on those emissions is the subject of this rulemaking. During the public rulemaking process, Ameren, Dynegy and the Agency put forth an alternative method for compliance with the mercury emissions limits proposed in this rulemaking. The proposal of this alternative, from the public and the proponent, is exactly the type of change the Board anticipates when developing a rulemaking through the Board’s public process. After reviewing a proposal, members of the regulated community may raise an alternative with which the proponent can agree. The alternative is then suggested to the Board. Ultimately, the Board’s acceptance of the MPS is a result of the public participating in this proceeding and suggesting an alternative that better serves the individual companies proposing the change, while meeting the goals of the proposal. Ameren, Dynegy, and the Agency have suggested an alternative mercury emissions control plan, which happens to include limits on other pollutants; but in the end, the alternative is a plan for the control of mercury emissions. This rulemaking was proposed to and includes limits on mercury emissions. Therefore, the Board finds that the suggested addition of the MPS from Ameren, Dynegy and the Agency is a logical outgrowth of the process.

	The record contains extensive comment from participants indicating that there are co-benefits from controlling SO₂ and NO_x emissions that reduce mercury emissions. See TSD at 199; 6/21pmTr. at 45-46, 51. Thus, the proposal of an alternative, designed to take advantage of those co-benefits, is logical and an appropriate amendment to the rule.

	The next challenge involves the timing of the proposed amendment. Kincaid argues that by proposing such a significant departure from the original proposal, Kincaid did not have sufficient time to prepare a response. PC 6299 at 29. Kincaid asserts that for the Board to believe that Kincaid could respond is arbitrary and capricious. Id. The Board believes that Kincaid has overstated the nature of the MPS proposal. The MPS is an alternative method for compliance with the underlying standard, not a replacement of that standard. The inclusion of the MPS will not change the underlying requirements that Kincaid must meet; the MPS is merely an alternative for companies to consider. Nothing in the MPS would require any company to utilize the MPS, each company must determine that on their own.

	Thus, the proposal of the MPS by Ameren and the Agency at the time that prefiled testimony was due for the second Board hearing was appropriate. The participants had time to examine the language change and prepare questions for Ameren before the prefiling deadline of August 7, 2006, for questions and hearing began on August 14, 2006. Many questions were prefiled and Ameren and the Agency answered several follow-up questions. See CTr. at 1-442. The participants then had until September 20, 2006, the deadline for public comment, to file written post-hearing comments and further address the issue of the MPS. Both Kincaid and Midwest Generation have filed extensive comments, which the Board today considers.

	For the reasons discussed, the Board finds that adding the MPS language to the proposed rule is consistent with federal and state administrative law. Further, the Board finds that the submission of the joint statement at the time that prefiled testimony was due for the second Board hearing did allow meaningful time for other participants to review the language and develop questions.

Section 27 of the Act

Kincaid’s Comment

	Kincaid notes that Section 27 of the Act (415 ILCS 5/27 (2004)) requires the Board to consider the technical feasibility and economic reasonableness of “reducing the particular type of pollution for which controls are sought.” PC 6299 at 30. Kincaid argues that there is no factual basis in the record that the MPS is technically feasible and economically reasonable for Ameren and Dynegy except for their acquiescence to the language. Id. Kincaid further asserts that there is no basis in the record that the controls of the MPS are technically feasible and economically reasonable for any facility other than Ameren and Dynegy. PC 6299 at 30-31. Kincaid presented testimony that the MPS would not be technically feasible and economically reasonable for Kincaid. PC 6299 at 31. Kincaid maintains that the Board cannot avoid Section 27 requirements for rulemaking simply by stating that the MPS requirement is only one option in a broad array of options. Id.

Midwest Generation’s Comment

	Midwest Generation argues that the Agency has a statutory burden in this rulemaking to provide support for the proposal. PC 6300 at 6. Midwest Generation asserts that promulgation of a rule where there is a lack of support would be arbitrary and capricious. Id. Further, Midwest Generation asserts that Section 27 of the Act (415 ILCS 5/27 (2004)) requires the Agency to demonstrate that the rule is technically feasible and economically reasonable. PC 6300 at 8, 50. Midwest Generation cites Commonwealth Edison Co. v. PCB, 25 Ill. App. 3d 271, 323 N.E.2d 84 (1st Dist. 1974) to support the argument. Midwest Generation points to language in Commonwealth Edison that defines “technically feasible” and “economically reasonable” as a determination that the rule “is reasonable and capable of compliance by a substantial number of individual units in the state” by a specified deadline. PC 6300 at 8, 50 citing Commonwealth Edison, 25 Ill. App. 3d at 281-82. Midwest Generation maintains that the Agency has not demonstrated that the rule is technically feasible and economically reasonable. PC 6300 at 8, 50.

Ameren’s Comment

	Ameren disagrees with Kincaid and argues that adoption of the MPS will not violate Section 27 of the Act (415 ILCS 5/27 (2004)); however, Ameren’s argument does not relate to the issue of technical feasibility and economical reasonableness. PC 6301 at 12-14. Rather, Ameren argues that Section 27 of the Act (415 ILCS 5/27 (2004)) allows the Board to include in a rule of general applicability provisions that set different requirements for different sources, areas, and companies. PC 6301 at 12-13.

	Ameren asserts that Midwest Generation’s argument made in Midwest Generation’s oral motion (see CTr. at 75-89) that the MPS cannot be included because this is a rule of general applicability is erroneous. PC 6301 at 12-14. Ameren argues that Midwest Generation’s reliance on Commonwealth Edison, in the oral motion (see CTr. at 77), was misplaced. PC 6301 at 13. Ameren maintains that the court in Commonwealth Edison held only that the Board could choose not to make exceptions in rules of general applicability for individual companies and not that the Board was prohibited from adopting different rules for different situations. Id. Further, Ameren notes that none of the proposed rule revisions are directed at specific Illinois EGUs, but rather allow flexibility for compliance with the mercury rule. PC 6301 at 13-14. Different EGUs can choose how the company will ultimately comply from the options available including the output based standard, a percent reduction standard, the TTBS, or the MPS. PC 6301 at 14. In Ameren’s opinion the fact that a company may not choose an option for compliance has no bearing on the Board’s authority to adopt the option. Id.

Board Discussion of Section 27 of the Act

	As to the issue of whether the record contains information sufficient to determine the technical feasibility and economic reasonableness of the MPS, the Board refers to the discussion infra at 22 and 54. In essence, the Board has reviewed the record and based on the information in the record found that the MPS is technically feasible and economically reasonable. As will be discussed below, the Board is aware of the issues facing Kincaid in complying with any part of this proposed rule. However, the individual problems faced by Kincaid can be addressed in other forums. Generally, the Board believes the MPS offers a viable alternative for compliance. Therefore, Kincaid’s argument that adoption of the MPS would violate Section 27 of the Act (415 ILCS 5/27 (2004)) is not persuasive. The Board finds that because the Board has taken into account the technical feasibility and the economic reasonableness of the MPS, the adoption of the MPS is allowed under Section 27 of the Act (415 ILCS 5/27 (2004)).

	The Board also rejects Midwest Generation’s argument that the rule violates Section 27 of the Act because the rule is not technically feasible and economically reasonable as defined by the court in Commonwealth Edison. As discussed infra at 53 and 78, the Board has found the proposed rule to be technically feasible and economically reasonable. The Board finds that the regulated community with one exception, Kincaid, can comply with the proposed rule as amended at second notice. As discussed below, the Board believes that Kincaid should seek relief from the rule requirements.

	As to Ameren’s position that the Act allows the Board to adopt “exceptions” in a rule of general applicability, the Board agrees with Ameren. The court in Commonwealth Edison stated:

Substantive rules of this nature are promulgated for general, not special, application. Consequently, investigators for the Board gather facts and solicit expert advice in regard to pollution problems affecting all types of companies in a particular trade. In a case like the present one, the Board would have been charged with investigating facts and operations of all types of generating units -- single-and multi-unit, commercial, industrial, and public utility -- and from these surveys extrapolate the appropriate principles and propose the necessary regulations. The Board cannot be expected to research, evaluate, and make allowance for every special, unusual, or unique problem involving every producer of electrical energy. Where one fails to challenge the rules generally and instead seeks to relax their enforcement against him exclusively due to arbitrary and unreasonable hardship, the legislature has determined that the appropriate remedy is for the aggrieved party to seek a variance in accordance with Title IX of the Act. If that is denied, the aggrieved can petition to this court for review based on the record at that proceeding. We hold, therefore, that Commonwealth's ‘as applied’ argument cannot be raised at this stage of review. Commonwealth Edison 25 Ill. App. 3d at 281, 323 N.E.2d at 90.

Plainly, the court’s finding is that an individual company cannot challenge the Board’s rules of general applicability based on hardships associated with that individual company. However, nothing in the court’s statements, nor the Act, limits the Board’s ability to develop compliance alternatives for companies in a rule of general applicability.

	The Board finds that the authority of the Board pursuant to the Act does allow the Board to amend a rule of general applicability to create exceptions. In this case, the MPS is available to all companies operating in the State. The Board is aware that Kincaid, due to its unique circumstances, may not be able to utilize the MPS; however, that fact does not limit the Board’s authority to adopt the MPS.

Section 10 of the Act

Kincaid’s Comment

	Kincaid argues that Section 10 of the Act (415 ILCS 5/10 (2004)) prohibits the adoption of SO₂ regulations and emissions standards for existing fuel combustion stationary emissions sources outside Chicago, St. Louis, and Peoria Metropolitan areas unless those regulation are necessary to meet the Primary National Ambient Air Quality Standards (NAAQS). PC 6299 at 30. Kincaid argues that there is no evidence in the record that the SO₂ portion of the MPS is necessary for attaining and maintaining the SO₂ NAAQS. Id. Further, Kincaid notes that many of Ameren’s and Dynegy’s facilities are located outside the three metropolitan areas. Id. Kincaid maintains that the fact that the MPS is one method of achieving overall compliance with the mercury proposal does not relieve the Board from the prescription of Section 10 of the Act (415 ILCS 5/10 (2004)). PC 6299 at 30.

Midwest Generation’s Comment

	Midwest Generation agrees with Kincaid that Section 10 of the Act (415 ILCS 5/10 (2004)) prohibits the adoption of SO₂ regulations. PC 6300 at 29. Midwest Generation argues that the plain language of Section 10 is clear and limits the extent to which SO₂ can be regulated. Id. Midwest Generation asserts that as a result the Board cannot enact regulations that are more restrictive than necessary to attain the primary or secondary NAAQS for SO₂. Id. Midwest Generation maintains that because there are no SO₂ nonattainment areas in the State, the Board cannot adopt SO₂ limitations outside the three metropolitan areas. PC 6300 at 20. Midwest Generation maintains that the record does not support inclusion of NO_x and SO₂ because the Agency can point to no requirements that are necessary for the State to comply with ozone or particulate matter NAAQS. PC 6300 at 28.

Board Discussion of Section 10 of the Act

	The Board is unpersuaded by the argument that Section 10(B) of the Act (415 ILCS 5/10(B) (2004)) prohibits adoption of the MPS. Section 10(B) of the Act (415 ILCS 5/10 (2004)) provides that the Board “shall adopt sulfur dioxide regulations and emissions
standards . . .” for the State, except for Chicago, St. Louis, and Peoria Metropolitan areas, that are “not more restrictive than necessary to attain and maintain” the primary NAAQS SO₂ and within a reasonable time the secondary NAAQS SO₂. 415 ILCS 5/10(B)(1) (2004)).

	Kincaid and Midwest Generation’s arguments must fail because the Board is not adopting sulfur dioxide regulations in this rulemaking. The Board is developing a rule which limits the emissions of mercury in the State. One compliance option for mercury emissions limitations is the use of the MPS. The MPS will allow a source to voluntarily reduce SO₂ emissions to allow for co-benefits that limits mercury emissions. If a source does not choose to use the MPS for mercury control, there are no new emissions limits for SO₂. Thus, the Board finds that Section 10 of the Act does not prohibit the adoption of the MPS language.

Supremacy Clause and Commerce Clause

Kincaid’s Comment

	Kincaid argues that adoption of the MPS would violate both the Commerce Clause and the Supremacy Clause of the U.S. Constitution. PC 6299 at 31-32. The Supremacy Clause invalidates state laws that interfere with or are contrary to federal law; while the Commerce Clause prohibits restrictions on interstate commerce. Id. Kincaid relies on Clean Air Markets v. Pataki, 194 F. Supp. 2d 147 (N.D.N.Y. 2002) to support the argument. Id. Specifically, Kincaid notes that in Clean Air Markets, New York passed a law restricting trading of SO₂ allowances and the court found federal law preempted the restriction. PC 6299 at 31. Further, in Clean Air Markets, the court found that New York’s law imposed a burden on interstate commerce. PC 6299 at 32.

	Kincaid notes that the MPS requires that SO₂ allowances be surrendered. Kincaid argues that this surrender effectively prohibits trading of SO₂ allowances. PC 6299 at 31. Kincaid maintains that surrendering of allowances, for the Agency to retire, reduces the size of allowances available pursuant to Title IV of the CAA. Kincaid asserts that under the Supremacy Clause and Clean Air Markets, Illinois cannot impede the CAA’s cap and nationwide SO₂ allowance trading systems. PC 6299 at 31-32. Therefore, Kincaid argues that the CAA may preempt the MPS.

	Further, Kincaid asserts that adoption of the MPS may violate the Commerce Clause. PC 6299 at 32. Kincaid states that like Clean Air Markets, the MPS may prohibit Illinois sources from transferring SO₂ allowances in spite of the federal free-market system. Id.

Midwest Generation’s Comment

	Midwest Generation too relies on Clean Air Markets in arguing that the adoption of the MPS would violate the Supremacy Clause and the Commerce Clause of the U.S. Constitution. PC 6300 at 30-34. Midwest Generation’s arguments regarding the Supremacy Clause and the Commerce Clause echo those presented by Kincaid and will not be repeated. However, Midwest Generation also questions whether the MPS is a truly “voluntary” option for companies in Illinois. PC 6300 at 30. Midwest Generation relies on U.S. v. Butler, 297 U.S. 1 (1936) for the proposition that “voluntary” is not always “voluntary” in fact. PC 6300 at 30. In Butler, the court determined that the price of refusing to comply was a loss of benefits and as a result the “asserted power of choice is illusory” in that case. PC 6300 at 31, citing Butler 297 U.S. at 70-71.

	Midwest Generation argues that the underlying mercury rule is so stringent that companies cannot comply with the requirements absent some relief. PC 6300 at 31. The only option for delaying compliance is the MPS and the MPS is the only “safe harbor” according to Midwest Generation. Id. Thus, Midwest Generation asserts that the “voluntary” language of the MPS is illusory. Id.

Ameren’s Comment

	Ameren disagrees with Kincaid and Midwest Generation and argues that Clean Air Markets does not apply to the MPS and federal law will not be violated by the adoption of the MPS. PC 6301 at 14. Ameren argues that the MPS is significantly different from the New York statute invalidated in Clean Air Markets because the MPS has no direct impact on either out-of-state or in-state EGUs that choose not to participate in the MPS. Id. Ameren points out that the New York statute took revenues from the sale of allowances by New York EGUs to upwind sources and required a restrictive covenant on all sales that prohibited sale to upwind sources. PC 6301 at 15. Ameren argues that, by contrast, participation in the MPS is voluntary and does not conflict with Title IV of the CAA. Id. According to Ameren, the voluntary nature of the MPS eliminates the concern of the Clean Air Markets court that the allowances be freely transferable to any other person. PC 6301 at 16. Ameren maintains that by making the election to participate in the MPS, the company is agreeing to freely transfer allowances to the Agency. Id. Ameren also asserts that Title IV of the CAA allows for transfer of allowances to the state for retirement and that USEPA has entered into agreements, which required the surrender of allowances. PC 6301 at 16-17.

	Ameren maintains that the MPS does not discriminate against interstate commerce and, therefore, does not violate the Commerce Clause. PC 6301 at 18. Ameren notes that the court in Clean Air Markets struck down the statute because the law did not restrict or penalize transfer of allowances between New York generators, the statute gave a preferred right of access to in-state units over units in upwind states. PC 6301 at 19. Ameren argues that no such preference exists with the MPS; both in-state and out-of-state utilities will be deprived of the surrendered allowances. Id.

Agency’s Comment

	The Agency agrees that the MPS does not allow trading of allowances that are generated as a result of measures taken to comply with the MPS numeric emissions limits for NO_x and SO₂. PC 6298 at 49. The allowances needed to meet the MPS limits are required to be retired or surrendered on an annual basis; however, over-complying with the MPS limits can result in allowances which may be sold or traded. PC 6298 at 50.

	The Agency notes that under CAIR, certain allowances for SO₂ and NO_x must be retired each year. PC 6298 at 53. The Agency maintains that only the incremental amount of any additional allowances retired as necessary to meet the MPS limits could have an impact on the trading program. Id. The Agency asserts that there should be no additional NO_x allowances retried due to participation in the MPS. Id. The Agency further asserts that the impact on SO₂ allowances would also be minimal due to the region-wide scope of the trading program. Id.

Board Discussion of Supremacy Clause and Commerce Clause

	The Board is not convinced that the adoption of the MPS will violate either the Commerce Clause or the Supremacy Clause. Midwest Generation and Kincaid’s reliance on Clean Air Markets is misplaced, as the facts of that case are obviously distinguishable from the facts surrounding the MPS. In Clean Air Markets, the New York statute clearly limited the ability to trade allowances by among other things requiring that a restrictive covenant be placed on an allowance when traded. The Clean Air Markets court found that the restrictions on trading violated both the Commerce Clause and the Supremacy Clause. However, that is not the case with the MPS. The MPS does not restrict trading; rather, an allowance is surrendered to the Agency, which in turn retires the allowance. Agreeing to participate in the MPS and thus placing the company in the position of surrendering an allowance is voluntary. If a company does not participate in the MPS, nothing in the rule limits the ability to trade, sell or purchase NO_x and SO₂ allowances. Therefore, the MPS is factually distinguishable from the New York statute and is not contrary to the Commerce Clause or the Supremacy Clause.

	As previously discussed, the Board finds that the MPS is voluntary. Nothing in the language of the MPS requires a company to utilize the MPS. And in fact, the proposed rule includes other options for compliance such as the TTBS and averaging. Therefore, the Board finds that adopting the MPS is not contrary to the court’s decision in Butler.

Due Process Clause

	Midwest Generation asserts that mercury emissions cannot be measured with sufficient accuracy to determine compliance with or violation of the proposed rule. PC 6300 at 46. Thus, according to Midwest Generation, the rule fails to provide adequate notice or fair notice as required by the Due Process Clause of the US Constitution. Id. Midwest Generation maintains that a regulation imposing a binding legal obligation must provide fair notice of those obligations to the parties being regulated. Id. Midwest Generation relies on several cases to support this proposition. Id. Those cases are General Electric Co. v. EPA, 53 F.3d 1324, 1328-29 (D.C. Cir. 1995); Trinity Broad. of Florida, Inc. v. FCC, 21 1 F.3d 618, 628 (D.C. Cir. 2000); United States. v. Chrysler Corp., 158 F.3d 1350, 1355 (D.C. Cir. 1998); United States v. Hoechst Celanese Corp., 128 F.3d 216, 224 (4th Cir. 1997); Diamond Roofing Co. v. OSHRC, 528 F.2d 645, 649 (5th Cir. 1976); Phelps Dodge Corp. v. FMSHRC, 681 F.2d 1189, 1193 (9th Cir. 1982). Id.

	Midwest Generation argues that the monitoring technology required by the rule is not accurate enough for a company to determine compliance with the rule; thus a company cannot know if the emissions are in compliance. PC 6300 at 46. Midwest Generation argues that this makes the proposed rule invalid because a company will not have proper notice of what is compliant with the rule. Id.

Board Discussion of Due Process Clause

	The Board finds that the rule does not violate the Due Process clause of the Constitution. As discussed above, the measurement methods included in the proposal are nearly identical to the measurement requirements of CAMR. Thus, even if the Board were to adopt CAMR, the regulated community would be subject to the same requirements for measurement. Further, the Board has found that the measurement methods proposed are technically feasible and will allow for the measurement of mercury emissions. Therefore, the rule does give proper notice as to what will be noncompliance and accordingly does not violate the Due Process Clause.

KINCAID

	As discussed above, Kincaid believes that due to the unique aspects of Kincaid’s operations, Kincaid is not eligible for the flexibilities in the proposed rule. PC 6299 at 14. Further, the MPS also provides no relief for Kincaid, because Kincaid argues that reductions in NO_x and SO₂ required by the MPS are reductions Kincaid has already achieved. PC 6299 at 14. Therefore, Kincaid asks the Board to include language that would be applicable to Kincaid that would require Kincaid to install mercury control equipment on both units in 2009, disallows trading of mercury allowances, and targets greater mercury reductions than CAMR, sooner. PC 6299 at 33.

	The Board agrees that compliance with the rule as proposed, even with the inclusion of the MPS and TTBS, is not feasible for Kincaid due to the unique circumstances of the facility in Illinois. The Board has reviewed the amendments offered by Kincaid, but the Board does not find the record adequately supports the changes suggested by Kincaid. Therefore, the Board recommends that Kincaid seek relief from this rule of general applicability using the variance, adjusted standard or site-specific rule provisions of the Act. See 415 ILCS 5/28, 28.1, 35 (2004). The Board notes that both Section 28.1(e) and Section 38(b) of the provide an automatic stay of the rule of general applicability if the petition for adjusted standard or variance is filed within 20 days of the adoption of the rule. 415 ILCS 5/28.1, 38(b) (2004). This avenue for relief for Kincaid, will allow Kincaid to work with the Agency to develop a complete record for the Board’s consideration.

FEDERAL REQUIREMENTS

Kincaid’s Comment

	Kincaid notes that under CAMR, each state must demonstrate that the emissions in the state will meet the mercury cap established under CAMR. PC 6299 at 32. Kincaid asserts that how demonstrating compliance with CAMR can be done if the Board adopts the MPS is unclear. Id. Kincaid maintains that if Ameren alone opts into the MPS, the emissions increase will be 500 pound. Id. Kincaid argues that if other sources opt into the MPS there is a question of whether or not compliance with mercury cap can be achieved. Id.

	Kincaid also asserts that the adoption of the MPS would not meet the federal requirements for public participation in adoption of state regulations. PC 6299 at 33. Kincaid argues that the public notice did not include any indication that SO₂ and NO_x would be regulated by the proposal. Id. Kincaid opines that any rule submitted to USEPA without proper public participation must be rejected. Id.

Prairie State’s Comment

	Prairie State is concerned that the proposed rule creates a future regulatory uncertainty and one way to eliminate that uncertainty is to adopt CAMR’s model trading rule and layer the Illinois requirement on top of the model trading rule. PC 6394 at 6-7. Prairie State believes that this is necessary because if Illinois opts out of CAMR, then the CAMR mercury budget for Illinois will be a hard cap on annual emissions in Illinois. PC 6294 at 7. Prairie State is troubled that in 2018, utilities could be in compliance with the Illinois rule, but the total emissions could exceed the CAMR budget. Id. If that were to happen, Prairie State argues that Illinois would need to require more reductions of mercury because utilities could not purchase allowances from other states. Id. Prairie State opines that one way for Illinois emissions to exceed the mercury budget is if mercury control technologies do not perform a advertised and this is of particular concern with high sulfur coals. PC 6294 at 8.

Environmental Advocates’ Comment

	The Environmental Advocates argue that the proposed rule is consistent with CAMR, while also being more advanced. PC 6297 at 2. The Environmental Advocates note that CAMR gives states the option to develop their own regulatory approaches for the control of mercury. Id. Environmental Advocates assert that the Agency’s proposal is more advanced and targeted than CAMR in protecting the health, safety and welfare if Illinois residents and preserving Illinois’ natural environment. Id. Environmental Advocates opine that the question is not whether mercury should be controlled, because CAMR does that, but rather whether the Agency’s proposal “will produce public health and environmental benefits through deeper, faster reductions than those mandated under CAMR in a manner that is reasonable for regulated entities to achieve.” Id.

Agency’s Comment

	The Agency asserts that the proposed rule is sufficiently stringent so as to not jeopardize any exceedances of the CAMR caps. PC 6298 at 66. The Agency states that the budgeted emissions for Illinois equate to a reduction in mercury emissions of approximately 47% by 2010 and 78% by 2018. PC 6298 at 65. Because the proposed rule targets 90% reductions beginning in July 2009, compliance with the CAMR budgeted emissions should occur in both phase 1 an 2 of CAMR. Id. The Agency notes that the proposed rule does not include the CAMR budgeted emissions because several factors could affect Illinois’ actual mercury emissions approaching the CAMR budgeted emissions. Id. Those factors included growth in the industry and additional emissions due to the TTBS and MPS. Id. However, the Agency does not believe that the introduction of the additional flexibility in the rule significantly increases the emissions of mercury so as to jeopardize the ability of Illinois to meet the CAMR budgeted emissions. PC 6298 at 66.

	Specifically, the Agency asserts that with the MPS, by 2009, companies opting into the MPS are required to install mercury controls that will achieve 90% reduction on all units except certain small units. PC 6298 at 66. The small units are allowed delayed compliance until the end of 2012. Id. The Agency argues that the additional emissions from these small units would be minimal compared to the overall reductions and even after 2012, units not required to achieve 90% reduction must still achieve a high level of reduction. PC 6298 at 66-67.

	The Agency also believes that the TTBS will not significantly impact Illinois meeting the CAMR budgeted emissions limits. PC 6298 at 67. The Agency notes that under the TTBS only 25% of a company’s capacity is allowed to avoid the 90% reduction; however control is still required. Id. The Agency asserts that the difference in emissions for a company utilizing the TTBS will be small. Id

Board Discussion

	The Board is convinced that even with the TTBS and the MPS in the rule, there is little potential for exceeding the CAMR cap. The Agency has indicated that the mercury emissions reductions that will occur for companies utilizing the TTBS and the MPS are significant enough to be within the CAMR cap. The Board agrees that with a target of 90% reduction, the amounts that will be over that 90% reduction due to companies utilizing the TTBS or the MPS, will not result in an exceedence of the CAMR cap. Because the Board does not find a potential for exceedence of the CAMR cap, the Board will not consider trading in the rule.

	The Board has previously addressed the issue of notice concerning the addition of the MPS. Kincaid’s arguments do not persuade the Board to alter that prior discussion. The subject of this rulemaking is mercury emissions control. The inclusion of an MPS that calls for co-benefits to achieve the emissions standards is a logical outgrowth of the rule and the regulation of SO₂ and NO_x emissions is the result of a voluntary program. The Board finds that this rulemaking has satisfied the public participation requirements of the USEPA.

Changes to the Rule

	In addition to the inclusion of the MPS as discussed above, the Board has made changes designed to make the rule more readable and to clarify the language. The Board will not discuss those changes in detail, but the changes are shown in the rule language using strike-through and underline.

CONCLUSION

	The Board finds that the proposal, as amended in this opinion and order, is technically feasible and economically reasonable. Further, the Board finds that the Board has the authority to include the MPS in the proposal at second notice and the Board does so. The Board finds that the rule allows flexibility to achieve compliance and will provide health benefits for the citizens of Illinois. Therefore, the Board adopts the proposal for second notice and the rule will be submitted to JCAR for second notice.

ORDER

	The Board directs the Clerk to cause the filing of the following rule with the Joint Committee on Administrative Rules for second-notice review.

PERSONS WHO PROVIDED TESTIMONY

	The following individuals prefiled testimony on behalf of the Agency:

1.	that the companies that co-sponsored the MPS with the Agency believe that compliance with the underlying rule is not technically feasible and/or economically reasonable;
2.	that the companies that co-sponsored the MPS with the Agency are very concerned with the financing and timing of installation of the equipment that would be necessary to comply with the underlying rule;
3.	whether it is appropriate for the Agency to require NO_x and SO₂ emissions limitations in this mercury rulemaking, which it claims in the Joint Statements will affect how the Agency approaches so-called “post-CAIR” emissions reductions necessary for the state to demonstrate attainment of the ozone and PM_2.5NAAQS when the Agency has presented no support or information in this regard in this rulemaking proceeding;
4.	whether the Board has the authority to regulate SO₂ in a rule of general applicability, given the prohibitions of Section 10 of the Act; and
5.	whether it is constitutional for the Agency to prohibit participation in national trading programs. Including NO_x and SO₂ provisions is inappropriate, even in a section represented to be voluntary, in a mercury rule, and it is unconstitutional for the Board to interfere with national emissions trading programs. PC 6300 at 26.

1.	allowing a regulated entity to choose to comply using an output-based standard or a percentage reduction;
2.	allowing a regulated entity to elect to comply using any combination of techniques and technologies to meet an output-based or reduction standard;
3.	providing regulated entities with almost three years before compliance is required;
4.	allowing compliance to be determined on a 12-month rolling average;
5.	allowing owners of multiple EGUs to choose to comply by averaging among units during the first phase of the regulatory phase (through 2013), and allowing owners of single EGUs to average with other similarly situated operators;
6.	allowing a complete op-out for units the regulated entity decides to shutdown;
7.	allowing a regulated entity to choose to use the TTBS to set aside 25% of its units from meeting a numeric standard until 2015, upon a showing that these units are optimizing ACI mercury control equipment and meeting other operational requirements;
8.	allowing a regulated entity to choose an integrated pollution control strategy which will control mercury and other pollutants through the MPS; and
9.	providing for the same alternative mercury monitoring requirements contained in the federal CAMR, including the use of sorbent trap monitoring devises as well as newer CEMS. PC 6297 at 9-10.

Fish Advisories

	This section of the opinion will summarize arguments concerning whether or not the reduction of mercury emissions will impact fish advisories in the State. The Board will conclude by analyzing the arguments and making the Board’s findings on this issue.

SUBCHAPTER c: EMISSION STANDARDS AND LIMITATIONS FOR STATIONARY SOURCES

225.100
Severability
225.120
Abbreviations and Acronyms
225.130
Definitions

SUBPART B: CONTROL OF MERCURY EMISSIONS FROM COAL-FIRED ELECTRIC GENERATING UNITS

225.200
Purpose
225.202
Measurement Methods
225.205
Applicability
225.210
Compliance Requirements
225.220
Clean Air Act Permit Program (CAAPP) Permit Requirements

225.232	Averaging Demonstrations for Existing Sources
225.233	Multi Pollutant Standard (MPS)

225.240
General Monitoring and Reporting Requirements
225.250
Initial Certification and Recertification Procedures for Emissions Monitoring
225.260
Out of Control Periods for Emission Monitors

ILLINOIS POLLUTION CONTROL BOARD
November 2, 2006

Economics of Compliance

SUBPART A: GENERAL PROVISIONS

Section

225.140				Incorporations by Reference

225.270
Notifications
225.290
Recordkeeping and Reporting
225.295
Treatment of Mercury Allowances

AUTHORITY: Implementing and authorized by Section 27 of the Environmental Protection Act [415 ILCS 5/27].

SOURCE: Adopted at 30 Ill. Reg. _____, effective _________________.

Unless otherwise specified within this Part, the abbreviations used in this Part must ~~shall~~ be the same as those found in 35 Ill. Adm. Code 211. The following abbreviations and acronyms are used in this Part:

Act
	Environmental Protection Act [415 ILCS 5]
Btu
	British thermal unit
CAA
	Clean Air Act [42 USC 7401 et seq.]
CAAPP
Clean Air Act Permit Program

CO₂
	carbon dioxide
EGU
	electric generating unit
GWh
	gigawatt hour
hr
	hour
lb
	pound

MW
	megawatt
MWe
	megawatt electrical
MWh
	megawatt hour
NO_x
	nitrogen oxides
O₂
	oxygen
RATA
	relative accuracy test audit
SO₂
	sulfur dioxide

c)
ASTM. The following methods from the American Society for Testing and Materials, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken PA 19428-2959, (610) 832-9585:

1)	ASTM D388-77 (approved February 25, 1977), D388-90 (approved March 30, 1990), D388-91a (approved April 15, 1991), D388-95 (approved January 15, 1995), D388-98a (approved September 10, 1998), or D388-99 (approved September 10, 1999, reapproved in 2004), Classification of Coals by Rank ~~(Reapproved 2004)~~.

2)	ASTM D3173-03, Standard Test Method for Moisture in the Analysis Sample of Coal and Coke (Approved April 10, 2003).

3)	ASTM D3684-01, Standard Test Method for Total Mercury in Coal by the Oxygen Bomb Combustion/Atomic Absorption Method (Approved October 10, 2001).

4)	ASTM D5865-04, Standard Test Method for Gross Calorific Value of Coal and Coke (Approved April 1, 2004).

5)	ASTM D6414-01, Standard Test Method for Total Mercury in Coal and Coal Combustion Residues by Acid Extraction or Wet Oxidation/Cold Vapor Atomic Absorption (Approved October 10, 2001).

6)	ASTM D6784-02, Standard Test Method for Elemental, Oxidized, Particle-Bound and Total Mercury in Flue Gas Generated from Coal-Fired Stationary Sources (Ontario Hydro Method) (Approved April 10, 2002).

The purpose of this Subpart B is to control the emissions of mercury from coal-fired electrical generating units operating in Illinois.

	f)	ASTM D6784-02, Standard Test Method for Elemental, Oxidized, Particle-Bound and Total Mercury in Flue Gas Generated from Coal-Fired Stationary Sources (Ontario Hydro Method) (Approved April 10, 2002), incorporated by reference in Section 225.140.

Section 225.205			Applicability

The following stationary coal-fired boilers and stationary coal-fired combustion turbines are EGUs and are subject to this Subpart B:

a)
Except as provided in subsection (b) of this Section, a unit serving, at any time since the start-up of the unit’s combustion chamber, a generator with nameplate capacity of more than 25 MWe producing electricity for sale.

The owner or operator of each source with one or more EGUs subject to this Subpart B at the source must apply for a CAAPP permit that addresses the applicable requirements of this Subpart B.

1)
The owner or operator of each source and each EGU at the source must comply with the monitoring requirements of Sections 225.240 through 225.290 of this Subpart B.

2)
The compliance of each EGU with the mercury requirements of ~~under~~ Sections 225.230 and 225.237 of this Subpart must ~~shall~~ be determined by the emissions measurements recorded and reported in accordance with Sections 225.240 through 225.290 of this Subpart B.

1)
All emissions monitoring information, gathered in accordance with Sections 225.240 through 225.290 ~~of this Subpart~~.

3)	Copies of all documents used to complete a permit application and any other submission under this Subpart B.

1)	The owner or operator of each source with one or more EGUs must ~~shall~~ meet the requirements of this Subpart B.

2)	Any provision of this Subpart B that applies to a source must ~~shall~~ also apply to the owner and operator of such source and to the owner and operator of each EGU at the source.

	3)	Any provision of this Subpart B that applies to an EGU must ~~shall~~ also apply to the owner and operator of such EGU.

f)		Effect on Other Authorities. No provision of this Subpart B must ~~shall~~ be construed as exempting or excluding the owner or ~~and~~ operator of a source or EGU from compliance with any other provision of an approved State Implementation Plan, a permit, the Act, or the CAA.

Section 225.220	Clean Air Act Permit Program (CAAPP) Permit Requirements

1)	Each source with one or more EGUs subject to the requirements of this Subpart B is required to submit a CAAPP permit application that addresses all applicable requirements of this Subpart B, applicable to each EGU at the source.

2)	For any EGU that commenced commercial operation: