In The Matter of:
Proposed New 35111 . Adm. Code 225
Control of Emissions from
Large Combustion Sources
TO: See attached Service List
PLEASE TAKE NOTICE that on August 31, 2006,1 filed with the Office of the Clerk of
the Pollution Control Board, Participant KINCAID GENERATION, L .L.C.'s
RESPONSE TO
MOTION TO SCHEDULE ADDITIONAL HEARINGS, copies of which are herewith served
upon you
.
By:
Bill S . Forcade
Katherine M . Rahill
JENNER & BLOCK LLP
Attorneys for Kincaid Generation, LLC
One IBM Plaza
Chicago, IL 60611
(312) 222-9350
ILLINOIS POLLUTION CONTROL BOARD
NOTICE OF FILING
No. R06-25
(Rulemaking - Air)
THIS FILING IS SUBMITED ON RECYCLED PAPER
RER ,~o
VI
ED
AUG 3 1
2006
Pollution
STATE OF
Control
ILLINOIS
Board
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
In The Matter of:
)
Proposed New 35 Ill
. Adm. Code 225
)
No. R06-25
Control of Emissions from
)
(Rulemaking -Air)
Large Combustion Sources
)
CLERK'S OFpICIF
AUG 3 12pns
STgTE OF tLL11v
Pollution Control (3o~
gro
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~gro
KINCAID GENERATION, L
.L.C.'S RESPONSE TO MOTION
TO SCHEDULE ADDITIONAL HEARINGS
NOW COMES Participant KINCAID GENERATION, L
.L.C . ("Kincaid"), by and
through its attorneys, JENNER & BLOCK LLP, and hereby responds to Midwest Generation,
LLC's ("Midwest Generation") Motion to Schedule Additional Hearings to address the
amendments to proposed 35 111
. Adm
. Code 225, titled Multi-Pollutant Alternative, 35 Ill
. Adm .
Code § 225
.233, proposed by Ameren Energy, Inc
. (collectively "Ameren") and the Illinois
Environmental Protection Agency ("IEPA") on July 28, 2006 and by Dynegy Midwest
Generation, Inc
. ("Dynegy") and IEPA on August 21, 2006
. Kincaid adopts and supports the
arguments contained in the Midwest Generation Motion to Schedule Additional Hearings, but
believes the correct solution is to consider the Multi-Pollutant Alternative in a separate
regulatory docket
. In support of this response, Kincaid states as follows
:
INTRODUCTION
On March 14, 2006, the IEPA filed a rulemaking proposal with the Board proposing new
regulations to reduce mercury emissions from electric generating units ("EGUs")
.
The proposal
was accepted for hearing by the Board on March 16, 2006
. That proposal was later revised by
IEPA to include regulations that provided for a Temporary Technology Based Standard
("TTBS")
. The revised proposal (the "Proposal") was then the subject of hearings held June 12,
2006 through June 23, 2006
.
THIS FILING IS SUBMITED ON RECYCLED PAPER
Following those hearings, on July 28, 2006, Ameren submitted a proposed amendment to
the Proposal, titled Multi-Pollutant Standards, to the Board in a Joint Statement with IEPA
.
Then, on August 21, 2006 in the midst of further evidentiary hearings on the Proposal, Dynegy
and IEPA submitted a new Joint Statement to the Board requesting an amendment to the
previously proposed Multi-Pollutant Standards section submitted by Ameren (hereinafter the
Multi-Pollutant Standards as originally submitted by Ameren and later amended by Dynegy are
collectively referred to as the "MPS")
.
Under the MPS, covered EGUs would be required to meet certain emissions standards for
NO, and SO2 as well as comply with different mercury control requirements than set forth in the
Proposal
. Like Midwest Generation, Kincaid does not yet understand the effect of the proposed
MPS
. The MPS differs significantly from the Proposal and, as such, must be the subject of a
separate regulatory proposal and hearings in order for the rulemaking participants, the public,
and the Board to have an opportunity to fully analyze its effect
. Kincaid believes that, under
both Illinois and Federal law, the MPS proposal cannot be considered in this regulatory docket
.
II.
THE BOARD MUST OPEN A SEPARATE REGULATORY DOCKET TO
ANALYZE ISSUES FUNDAMENTAL TO THE PROPOSAL AND MPS
.
Kincaid, Midwest Generation and the other rulemaking participants have participated in
two evidentiary hearings on the Proposal
. During those hearings, witnesses presented testimony
and were cross-examined on the basis for and impact of the Proposal
. No evidence was
submitted on the basis for and/or impact of the MPS
. As a result, the participants have not and
will not have the opportunity to present or cross-examine witnesses regarding the MPS
.
However, because the MPS sets new requirements for NO, and SO2 as well as fundamentally
changes the proposed mercury control requirements applicable to covered EGUs, the MPS raises
issues and questions that need to be examined prior to approval of the proposed regulations
. As
-2-
a result, the Board must open a separate regulatory docket so that all interested persons can
analyze the MPS and its effects on covered EGUs as well as on the Proposal as a whole and on
the existing regulatory scheme .
As set forth in Midwest Generation's motion, the MPS raises questions as to
: the
technological feasibility and economic reasonableness of both the MPS and the Proposal,
including whether the MPS is a viable option for all of the coal-fired electric generating units
within the State of Illinois
; the impact of the MPS on the operations of EGUs not covered by the
MPS
; the impact of the MPS on other regulatory schemes including concurrent rulemakings such
as Illinois CAIR
; the impacts of implementing the MPS on the ability of the State to achieve the
caps set forth in CAMR
; and the environmental and/or health impacts of the MPS alternative . In
addition, the MPS raises questions as to the need for the controls currently contained in the
Proposal . The mercury controls contained within the MPS appear to be less stringent
.
Participants and the Board need an opportunity to determine if these controls are less stringent
and, if so, must analyze why these controls are sufficient for over half of the coal-fired
generating capacity in Illinois, but not all
. Kincaid has already made the point on the record,
repeatedly, that it is uniquely disadvantaged by IEPA's original proposal, and remains uniquely
disadvantaged even after the submission of the MPS
. These issues are fundamental to the MPS
and the Proposal and must be analyzed before either can be approved by the Board
.
Moreover, as already established in the record, Kincaid's facility differs from other coal-
fired electric generating stations within the state such as those operated by Dynegy and Ameren
.
As such, it is imperative that Kincaid understand (1) whether the MPS could be implemented at a
facility like that operated by Kincaid
; and (2) what impacts the MPS might have on Kincaid's
operations .
-3-
III . A SEPARATE REGULATORY DOCKET AND HEARINGS ARE NECESSARY
TO ENSURE COMPLIANCE WITH STATE LAW .
As stated in Midwest Generation's motion, Kincaid also believes the introduction of the
MPS may have serious state law implications . First, the Board has not considered the
"technological feasibility and economic reasonableness" of measuring or reducing NO, and SO2 .
See 415 ILCS 5/27 . Second, there is no evidence in the record that the
S02
limits contained in
the MPS are necessary to attain and maintain the Primary National Ambient Air Quality
Standards ("NAAQS") for sulfur dioxide as appears to be required by Section 10 of the Illinois
Environmental Protection Act . See 415 ILCS 5/10 . Third, the Board has not considered whether
the MPS is a rule of general applicability or an emission standard for Ameren and Dynegy only
and, depending on that analysis, whether the approach by which the Board is considering it is
appropriate . See Commonwealth Edison Co . v
. Pollution Control Board, 25 III . App. 3d 271,
281 (1st Dist
. 1974) (discussing rules of general applicability versus variances)
; and 415 ILCS
5/28 .1 . Fourth, and perhaps most importantly, the Board has not provided public notification,
via its First Notice, that it intends to regulate NO, and SO2 in this docket
. It would violate
Illinois law for the Board to adopt final regulations controlling these other pollutants where no
First Notice disclosure has been presented to the public
. This procedural defect simply cannot be
cured by holding additional hearings in this docket, without adopting an additional First Notice
proposal
. Prior to approving the MPS and/or the Proposal, the Board should engage in an
educated analysis of these issues which can only occur after public notification of the substantive
content of the proposed regulations and sufficient hearings providing an opportunity for
comment and questions
. This analysis is best considered in a separate regulatory docket .
IV.
A SEPARATE REGULATORY DOCKET AND HEARINGS ARE NECESSARY
TO ENSURE COMPLIANCE WITH FEDERAL LAW .
Kincaid concurs with Midwest Generation's analysis that the MPS also raises concerns as
to the validity of the MPS under both the Supremacy Clause and the Commerce Clause of the
United States Constitution
. Because the Board and other participants do not fully understand
how the MPS will work, the interested parties cannot accurately assess whether the required
surrender of SO2 allowances under the MPS is preempted by the Clean Air Act's SO2 cap and
trade program .
See Clean Air Markets Group v . Pataki, 194 F. Supp. 2d 147, 157 (N.D .N.Y.
2002), affirmed 338 F .3d 82 (2d Cir. 2003)
. Moreover, the interested parties are also unable to
evaluate whether the MPS violates the Commerce Clause prohibition against burdening interstate
commerce . Id.
As an additional issue under Federal law, adoption of the MPS in this regulatory docket
would not satisfy the federal requirements for public participation in adoption of state regulations
submitted for USEPA approval
. There has been no public notification that this docket will
regulate NO, and SO2 . Any state regulation submitted to USEPA for approval without adequate
public participation must be rejected.
Furthermore, the MPS's approach raises uncertainties as to whether Illinois can
demonstrate compliance with the federal CAMR state cap
. The participants and the Board need
to better understand the effect of various electric generating units within the State of Illinois
opting in to the MPS on the ability of Illinois to comply with the mercury cap applicable to
Illinois established by the U .S. EPA.
V.
CONCLUSION
WHEREFORE, for the reasons set forth above, KINCAID GENERATION, LLC
respectfully requests that the Board open a separate regulatory docket and schedule additional
-5-
hearings to address the amendment to proposed 35 III . Adm
. Code 225, titled Multi-Pollutant
Alternative, 35 Ill. Adm . Code § 225 .233, proposed by Ameren Energy Generating Company,
AmerenEnergy Resources Generating Company, and Electric Energy, Inc
. and the Illinois
Environmental Protection Agency on July 28, 2006 and as proposed to be revised by Dynegy
Midwest Generation, Inc
. and IEPA on August 21, 2006 .
Respectfully submitted,
Dated: August 31, 2006
Bill S . Forcade
Katherine M . Rahill
Jenner & Block LLP
One IBM Plaza
Chicago, IL 60611-7603
(312) 840-8618
CHICAGO- 1444764- 1
Kincaid Gen
L'L.C
by :
-6-
CERTIFICATE OF SERVICE
I, Katherine M
. Rahill, an attorney, hereby certify that I served a copy of the foregoing
KINCAID GENERATION, L .L .C .'s RESPONSE TO MOTION TO SCHEDULE
ADDITIONAL HEARINGS, via first-class mail, postage fu ly prepaid, upon the parties on the
attached Service List this 31st day of August, 2006 :
By:
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, IL 62794-9276
Dorothy Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 W . Randolph St ., Suite 11-500
Chicago, IL 60601-3218
Bruce Nilles
Sierra Club
122 W. Washington Ave ., Suite 830
Madison, WI 53703
Matthew Dunn, Chief
Division of Environmental Enforcement
Office of the Attorney General
188 West Randolph St ., 20th Floor
Chicago, IL 60601
William A . Murray
Special Assistant Corporation Counsel
Office of Public Utilities
800 East Monroe
Springfield, Illinois 62757
Christopher W . Newcomb
Karaganis, White & Mage ., Ltd.
414 North Orleans Street, Suite 810
Chicago, Illinois 60610
David Rieser
James T. Harrington
Jeremy R. Hojnicki
McGuire Woods LLP
77 West Wacker, Suite 4100
Chicago, Illinois 60601
SERVICE LIST
Faith E . Bugel
Howard A . Learner
Meleah Geertsma
Environmental Law and Policy Center
35 East Wacker Drive, Suite 1300
Chicago, Illinois 60601
James W. Ingram
Dynegy Midwest Generation, Inc .
1000 Louisiana, Suite 5800
Houston, TX 77002
N . LaDonna Driver
Katherine D. Hodge
Hodge Dwyer Zeman
3150 Roland Avenue, P .O. Box 5776
Springfield, Illinois 62705-5776
Keith I. Harley
Chicago Legal Clinic
205 West Monroe Street, 4th Floor
Chicago, Illinois 60606
S . David Farris
Manager, Environmental, Health and Safety
Office of Public Utilities, City of Springfield
201 East Lake Shore Drive
Springfield, Illinois 62757
Marie Tipsord
Hearing Officer
Illinois Pollution Control Board
James R. Thompson Center
100 W. Randolph, Suite 11-500
Chicago, Illinois 60601
Kathleen C . Bassi
Sheldon A. Zabel
Stephen J
. Bonebrake
Joshua R . More
Glenna L. Gilbert
SCHIFF HARDIN LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
Dianna Tickner
Mary Frontczak
Prairie State Generating Company, LLC
701 Market Street, Suite 781
St. Louis, MO 63101
Daniel McDevitt
Midwest Generation
440 S . LaSalle Street
Suite 3500
Chicago, IL 60605
SERVICE LIST cont.d
