BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
NOTICE OF FILING
ATTACHED SERVICE LIST
CERTIFICATE OF SERVICE
SERVICE LIST
Kathleen C. Bassi

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

PROPOSED NEW 35 ILL.ADM.CODE PART 225

CONTROL OF EMISSIONS FROM

LARGE COMBUSTION SOURCES

)

PCB R06-25

Rulemaking - Air

NOTICE OF FILING

To:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

James R. Thompson Center

Suite 11-500

100 West Randolph

Chicago, Illinois 60601

Marie Tipsord

Hearing Office

Illinois Pollution Control Board

James R. Thompson Center

100 W. Randolph

Suite 11-500

Chicago, Illinois 60601

Gina Roccaforte, Assistant Counsel

Charles Matoesian, Assistant Counsel

John J. Kim, Managing Attorney, Air

Regulatory Unit

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue, East

P.O. Box 19276

Springfield, Illinois 62794-9276

Persons included on the

ATTACHED SERVICE LIST

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

Pollution Control Board RESPONSE OF DYNEGY AND MIDWEST GENERATIONS TO

THE AGENCY’S MOTION TO AMEND RULEMAKING PROPOSAL, copies of which are

herewith served upon you.

/s/

Kathleen C. Bassi

Kathleen C. Bassi

Dated: June 6, 2006

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

Joshua R. More

Glenna Gilbert

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

CERTIFICATE OF SERVICE

I, the undersigned, certify that on this 6

day of June, 2006, I have served electronically

the attached RESPONSE OF DYNEGY AND MIDWEST GENERATIONS TO THE

AGENCY’S MOTION TO AMEND RULEMAKING PROPOSAL, upon the following persons:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

James R. Thompson Center

Suite 11-500

100 West Randolph

Chicago, Illinois 60601

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

following persons:

Marie Tipsord

Hearing Office

Illinois Pollution Control Board

James R. Thompson Center

100 W. Randolph

Suite 11-500

Chicago, Illinois 60601

tipsorm@ipcb.state.il.us

Gina Roccaforte, Assistant Counsel

Charles Matoesian, Assistant Counsel

John J. Kim, Managing Attorney

Air Regulatory Unit

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue, East

P.O. Box 19276

Springfield, Illinois 62794-9276

john.kim@epa.state.il.us

charles.matoesian@epa.state.il.us

gina.roccaforte@epa.state.il.us

the participants listed on the

ATTACHED SERVICE LIST

/s/

Kathleen C. Bassi

Kathleen C. Bassi

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

Joshua R. More

Glenna Gilbert

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

SERVICE LIST

William A. Murray

Special Assistant Corporation Counsel

Office of Public Utilities

800 East Monroe

Springfield, Illinois 62757

bmurray@cwlp.com

N. LaDonna Driver

Katherine D. Hodge

Hodge Dwyer Zeman

3150 Roland Avenue, P.O. Box 5776

Springfield, Illinois 62705-5776

nldriver@hdzlaw.com

Christopher W. Newcomb

Karaganis, White & Mage., Ltd.

414 North Orleans Street, Suite 810

Chicago, Illinois 60610

cnewcomb@k-w.com

Bill S. Forcade

Katherine M. Rahill

Jenner & Block

One IBM Plaza, 40

Floor

Chicago, Illinois 60611

bforcade@jenner.com

krahill@jenner.com

Faith E. Bugel

Howard A. Learner

Meleah Geertsma

Environmental Law and Policy Center

35 East Wacker Drive, Suite 1300

Chicago, Illinois 60601

fbugel@elpc.org

Keith I. Harley

Chicago Legal Clinic

205 West Monroe Street, 4

Floor

Chicago, Illinois 60606

kharley@kentlaw.edu

David Rieser

James T. Harrington

McGuireWoods LLP

77 West Wacker, Suite 4100

Chicago, Illinois 60601

drieser@mcguirewoods.com

jharrington@mcguirewoods.com

S. David Farris

Manager, Environmental, Health and Safety

Office of Public Utilities, City of Springfield

201 East Lake Shore Drive

Springfield, Illinois 62757

dfarris@cwlp.com

Bruce Nilles

Sierra Club

122 West Washington Avenue, Suite 830

Madison, Wisconsin 53703

bruce.nilles@sierraclub.org

James W. Ingram

Senior Corporate Counsel

Dynegy Midwest Generation, Inc.

1000 Louisiana, Suite 5800

Houston, Texas 77002

Jim.Ingram@dynegy.com

CH2\ 1401949.8

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

PROPOSED NEW 35 ILL.ADM.CODE PART 225

CONTROL OF EMISSIONS FROM

LARGE COMBUSTION SOURCES

)

PCB R06-25

RESPONSE OF DYNEGY AND MIDWEST GENERATIONS TO

THE AGENCY’S MOTION TO AMEND RULEMAKING PROPOSAL

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

LLC (collectively “Respondents”), by and through their attorneys Schiff Hardin LLP, and

respond to the Illinois Environmental Protection Agency’s (“Agency”) Motion to Amend

Rulemaking Proposal (“Motion to Amend”). Respondents do not object to the amendment to the

rulemaking proposal, provided that the Board recognizes that the amendment appears to

fundamentally change the initial proposal and likely necessitates reconsideration of the purpose

of the second scheduled hearing (in August 2006) and the scheduling of at least one additional

hearing. In support of their Response, Respondents state as follows:

On March 14, 2006, the Agency filed a proposal with the Board to add new Part

225 to 35 Ill.Adm.Code, entitled “Control of Emissions from Large Combustion Sources.”

On April 27 and 28, 2006, the Agency filed written testimony of its witnesses

relating to that initial proposal.

On May 4, 2006, the Hearing Officer ordered participants in the rulemaking to

file written questions for the Agency’s witnesses by May 19, 2006. The Hearing Officer also set

hearing dates for the rulemaking, as follows:

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

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•

First hearing, devoted to the Agency’s case and the Agency’s supporters’

cases: June 12-23, 2006;

•

Second hearing, concluding any presentations left over from the first hearing

and then devoted to opponents’ cases: August 14-25, 2006.

On May 18, 2006, the Agency informed Respondents’ attorneys by telephone that

it needed to revise Dr. James Staudt’s testimony (first amended testimony, second version). Dr.

Staudt is the Agency’s witness addressing the technology available and necessary for compliance

with the proposed rule and the cost of that technology.

On May 22, 2006, Respondents filed written questions, along with a Motion to

File Instanter, for all of the Agency’s witnesses except Dr. Staudt. The Hearing Officer granted

the Motion for Leave to File Instanter during a pre-hearing teleconference on May 24, 2006,

which is confirmed in the Hearing Officer’s May 24, 2006, written order.

On May 23, 2006, the Agency filed the Motion to Amend the rule. Additionally,

it filed the second revised (third version) testimony of Dr. Staudt.

Respondents and their experts have not yet been able to fully evaluate the impact

and implications of the proposed amendment to the rule. As the proposed amendment is

purported to provide compliance “flexibility” and to make the proposed rule more “palatable,”

the proposed amendment, depending on its interpretation, may have fundamentally changed the

technological feasibility and economic reasonableness of the proposed rule. However, the

impact of the proposed amendment, if the Motion to Amend is granted, cannot be fully assessed

until Respondents have an opportunity to question the Agency’s witnesses concerning the

meaning of the proposed amendment language and its implications.

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The Agency has provided no support or testimony for the proposed amendment

other than a very limited amount in Dr. Staudt’s second revised (third version) testimony. If the

proposed amendment does impact the technological feasibility and economic reasonableness of

the proposed rule, the extent to which this is true is not reflected in the Agency’s initial proposal

and the testimony of its witnesses, with the very limited exception noted. Because there is no

significant, detailed prepared testimony explaining the proposed amendment, assuming the

Motion to Amend is granted (and the earliest that can occur is June 15), Respondents will not be

able to fully understand the impact of the proposed amendment until they have the opportunity to

examine the Agency’s witnesses to obtain clarification of the meaning, intent, and ambiguities of

the amendment. This cannot even begin to occur until June 16, at the earliest.

Respondents request that the Board, if it grants the Motion to Amend,

acknowledge that an amendment of the sort that the Agency has proposed –

i.e.

, essentially a

variance procedure

– potentially has much further-reaching implications to the rulemaking than

appears to be addressed in the latest version of the testimony of Dr. Staudt and that these

implications need to be thoroughly explored and evaluated. Because

the Board will not rule on

the Motion to Amend before June 15, 2006, well after the start of the scheduled June hearings in

this matter, and because Respondents will not know what the Board’s ruling will be,

Respondents will not be able to fully develop and pursue their examination of the proposed

amendment and its implications until after the first hearing is well underway.

10.

Respondents do not believe that the Agency’s and supporters’ cases will be

completed during the first hearing, particularly if the Motion to Amend is granted, given the

We note that this variance procedure bypasses the Board’s authority to review and take

action on proposed variances.

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

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number of written questions already posed, the necessary follow-up to those questions, the

questions to be filed for or otherwise asked of Dr. Staudt, and the questions (not filed) regarding

the impacts of the proposed amendment. Respondents are cognizant that the Hearing Officer’s

May 4, 2006, Order recognized that the Agency’s case might carry over into the August hearing.

Respondents did not object because they would have the complete proposed rule, the Statement

of Reasons, the Technical Support Document, and the Agency’s prepared testimony all available

for their analysis and preparation. Now, however, if the Motion to Amend is allowed, the

Respondents face a 15-page amendment to the proposed rule, unsupported by any substantive

statement of reasons, any new or supplemental technical support document, and virtually no

prepared testimony. Thus, at least until Respondents have had an opportunity to explore the

meaning, intent, and ambiguities of the amendment by cross-examination, understanding the

impact of the amendment and preparing to respond to it are almost impossible.

11.

Therefore, Respondents request that the Board act now and redesignate the

scheduled August hearing for completion of the Agency’s and supporters’ cases and direct the

Hearing Officer, at the conclusion of the August hearing, to schedule a date at least 30 days after

the conclusion of the August hearing for the opponents to submit their prepared testimony and to

schedule such other dates as the Hearing Officer determines is appropriate. This would clarify

the flow of the proceeding and allow the Respondents some time after completing the

presentation and examination of the Agency’s and supporters’ cases to present their responses in

a coherent and clear manner. Otherwise, because of the very high probability the Agency’s and

supporters’ cases will continue into the August hearing dates, Respondents will be forced to

evaluate portions of those presentations and responses to questions “on the fly,” resulting in a

less concise, complete, and coherent reply and, ultimately, record in this case. Moreover,

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

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requiring Respondents to address portions of the Agency’s and supporters’ cases “on the fly”

unfairly disadvantages Respondents in the preparation of their case both because of the loss of

time to evaluate and properly respond to the Agency’s and supporters’ cases and because of the

likely splitting of the presentation of Respondents’ and other opponents’ cases if and when time

runs out at the end of the August hearing.

12.

Alternatively, Respondents request that the Board recognize the high probability

of the scheduling impact of the amendment and direct the Hearing Officer to be prepared, at the

end of the June 2006 hearing, to re-characterize the purpose and content of the scheduled August

hearing to be the continuation of the Agency’s and rule supporters’ cases and to set a new date

after the scheduled August hearing for a hearing dedicated to opponents’ cases.

WHEREFORE, for the reasons set forth above, Participants Dynegy Midwest

Generation, Inc., and Midwest Generation, LLC, do not object to the Agency’s proposal to

amend the rulemaking but do request that the Board recognize and acknowledge that the

proposed amendment, if the Motion to Amend is granted, may be fundamentally change the

technological feasibility and economic reasonableness of the proposed rule and that the Board

redesignate the August hearing to be for the conclusion of the proponents’ case and direct the

Hearing Officer to set a date at least 30 days after the end of the August hearing for the

opponents to submit their prepared testimony and such other dates as the Hearing Officer

determines are appropriate.

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006

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Respectfully submitted,

DYNEGY MIDWEST GENERATION, INC., and

MIDWEST GENERATION, LLC

by:

Kathleen C. Bassi

One of Their Attorneys

Dated: June 6, 2006

Sheldon A. Zabel

Kathleen C. Bassi

Stephen J. Bonebrake

Joshua R. More

Glenna L. Gilbert

SCHIFF HARDIN, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, Illinois 60606

312-258-5500

Fax: 312-258-5600

CH2\ 1438061.4

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, JUNE 6, 2006