BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
)
1
PROPOSED NEW 35 1LL.ADM.CODE PART 225
)
PCB R06-25
CONTROL OF EMISSIONS
FROM
)
Rulemaking
-
Air
LARGE COMBUSTION SOURCES
)
NOTICE OF FILING
Dorothy Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
Persons included on the
ATTACHED SERVICE LIST
PLEASE TAKE NOTICE that we have today filed with the Office of the Clerk of the
Pollution Control Board
MIDWEST GENERATION'S COMMENTS.
IS/
Daniel McDevitt
Daniel McDevitt
Dated: September 20,2006
Daniel McDevitt
General Counsel
MIDWEST GENERATION. LLC
440 South
LaSalle Street, Suite 3500
Chicago, Illinois 60605
3 12-583-6000
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER
OF:
)
1
PROPOSED NEW 35 1LL.ADM.CODE PART 225
)
PCB R06-25
CONTROL OF EMISSIONS FROM
1
LARGE COMBUSTION SOURCES
1
MIDWEST GENERATION'S POST-HEARING COMMENTS
NOW COMES Participant MIDWEST GENERATION, LLC, pursuant to the Hearing
Officer's Order (August 24,2006) and 35
111.Adm.Code 5 102.108, and offers the following
comments on the above-captioned proposed rule:
I.
INTRODUCTION
The Illinois Environmental Protection Agency ("Agency") has proposed that the Board
adopt regulations requiring that emissions of mercury
from coal-fired electric generating units
greater than 25 MW be reduced by 90%
fiom input coal or that emissions not exceed a rate of
0.0080
p/m3.' As the proponent of the rule, the Agency bears the burden of demonstrating that
the proposed rule is technically feasible and economically reasonable. 415 ILCS
5/27(a)
("Act"); Board Order (June 15, 2006). The Agency stated that its purposes for proposing a rule
so significantly more stringent
than the Clean Air Mercury Rule ("CAMR"), 70 Fed.Reg. 28605
(May
18,2005)), with which Illinois is required to comply pursuant to Section 11 l(d) of the
Clean Air Act, 42 U.S.C.
55
7401, et seq., 5 741 1(d), is to protect the health of Illinois' citizens;
'
Midwest Generation recognizes that the proposed rule includes alternative emission
reduction requirements: the 90% reduction from inlet coal or the 0.0080
pg/m3 emissions
limitation. However, for purposes of
sin~plicity, these comments will generally refer to the
requirement as a 90% reduction unless otherwise explicitly stated. That is, reference to only the
90% reduction is not intended to
imply that Midwest Generation does not realize that the
emissions limitation is also available as a means of demonstrating compliance with the rule and
is meant to include the
en~issions limitation where appropriate.
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to comply with the state's obligation to develop a total maximum daily load ("TMDL") plan for
mercury-impaired waterbodies in the state, as required by Section
303(d) of the Clean Water Act
(33 U.S.C.
$
13 13(d)); and to comply with the state's obligations under CAMR. Technical
Support Document ("TSD), pp. 26-28; S Tr., p. 23 (June 12,2006). The Agency has not
established that any of these goals would be achieved through implementation of the proposed
rule. It has not demonstrated that the proposal is technically feasible. It has not demonstrated
that
the proposal is economically reasonable. And it has not demonstrated that the rule
accomplishes its stated purposes. In fact, Midwest Generation and others in the coal-fired power
generation sector, including the Ameren family of companies, have demonstrated just the
opposite: the proposal is neither technically feasible nor economically reasonable. and it does
not accomplish its stated purposes. In short, the record in this matter shows that for costs far
greater than CAMR,
the proposed rule would provide no discemable benefit.
The Agency has not demonstrated that its assumed control technology, activated carbon
injection using halogenated activated carbon2 will reliably achieve required mercury emission
reductions or that the monitoring technology will adequately assess compliance. As described by
Ed Cichanowicz, HCI is still evolving, and the status of that technology is quite dynamic. While
results of mercury removal demonstration tests are promising, as William
DePriest of Sargent
&
Lundy observed, Sid Nelson's presentation of preliminary results from Midwest Generation's
Crawford Generating Stations' mercury testing (Ex. 88) and subsequent retraction (PC 6287)
Except when referring to the activated carbon injection system equipment only,
Midwest Generation assumes that halogenated or brominated activated carbon
("FICI") is the
sorbent necessary to effectively remove mercury at units burning subbituminous coal.
Hereinafter. these Comments use the term "HCI" to refer to the activated carbon injection
control system and the halogenated activated carbon as the control measure that is the basis of
the Agency's proposal. Where only the control equipment is intended, the Comments will use
the phrase "activated carbon injection system" or its synonym.
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illustrates how dynamic the technology is. Mercury control does not enjoy the history and
developed reliability of sulfur dioxide
('SOz") and nitrogen oxide ("NOx") control systems
Further, the so-called "flexibilities" in the rule, apparently added by the Agency because of its
own concerns about HCI. do not cure the problems with WCI and are
not truly flexibilities. To
achieve a 90% reduction. companies will have to target a level of reduction that is greater
than
90%. Further. as Richard McRanie testified, the monitoring technology is not sufficiently
developed to enable companies to even demonstrate that they are in compliance with the rule
-
or for the Agency to demonstrate that they are not. The rule as proposed, therefore. is not
enforceable as a practical matter, and a company's inability to assess whether it is in compliance
raises very serious fairness, planning, and legal concerns, including a lack of fair notice.
Therefore, the proposed rule is not technically feasible.
The mercury rule as proposed by the Agency is not economically reasonable. The
Agency claims that the rule will cost only
$66 million per year and only about $32 million per
year more than the CAMR. TSD, p. 159; Springfield
~ranscri~t?
pp. 212-213 (June 22,2006).
However, as Ameren testified, the rule is impossible financially because compliance with the
rule will require more than
the HCI the Agency assumed in its economic analysis in order to
avoid the risk of
nollcompliance and because the short timeframe until compliance places a huge,
front-end financial burden
on the companies, to the tune of at least $1.3 billion more than the
Clean Air Interstate Rule ("CAIR) (70
Fed.Reg. 25161 (May 12,2005))." and uith no
quantified benefits. Even in the limited instances that the Agency identified potential additional
baghouse costs, its cost estimates were greatly understated. For instance, the Agency never
Hereinafter "S Tr."
4
USEPA's program for requiring regional reductions of NOx and SOz; Illinois' proposal
to comply with the CAIR is pending before the Board in Docket R06-26.
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properly analyzed the real world costs of the proposal. For instance. it assumed a generic cost of
S18.8 million5 for Midwest Generation's hot-side electrostatic precipitators ("HS ESPs") at the
Will County and Waukegan Generating Stations (TSD, p. 163, Table 8.9; S Tr.,
pp. 102-108
(June 21, 2006, p.m.); in actuality, the HS ESP at Will County alone will cost at least $67
million6
(Ex. 115, p. 23). Moreover, the rule deprives companies of the possibility of CAIR co-
benefits. Further, the Illinois mercury rule requires compliance with a draconian level of
reduction with no flexibility, despite the Agency's protestations to the contrary, forcing the
generators into the situation of installing more equipment than the Agency argues is necessary in
order to ensure compliance.
See
the testimony of Michael Menne, C Tr., pp. 257-258 (August
15, 2006, a.m.); Ex. 77,
p. 11. The Agency has grossly understated the costs of compliance with
the rule. Additionally, the Agency seems immune to the fact that the rule places Illinois' power
generators at a competitive disadvantage with power producers in other states because the
implementation of the proposed rule will reduce generation for Illinois generators. Ex. 77, p.
10;
C Tr., pp. 430-432 (August 15,2006, p.m.)); Ex. 118, pp. 6-7. As James Marchetti pointed out, a
reason why costs of compliance are not worse is because of a reduction in generation, which
actually means there is a loss of revenues to Illinois power producers. Ex. 11 8, p. 6. The cost of
compliance for Illinois generators will be greater than the cost of compliance for generators in
other states. Ex. 11
8, p. 12. Thus, Illinois power producers will experience a loss in revenue as
Average of the costs assumed for Waukegan and Will County in Table 8.9 of the
TSD,
p. 163.
Based upon estimates recently performed by Shaw Stone
&
Webster, Inc. on September
15, 2006, for Midwest Generation's
Powerton Station, costs of installation of the baghouse have
increased 92% in the year since Sargent
&
Lundy provided estimates a year ago and to which
William
DePriest testified. A 92% increase for the Will County baghouse discussed here would
raise the cost to approximateiy $129 million. This illustrates
Mr. DePriest's point, also, that
costs are constantly increasing and are increasing
dranlatically.
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a result of their poorer competitive position. A loss of revenues translates into less profits and
less tax base. Ultimately, the higher costs land in the pocketbooks of the consumer. The proven
incentives of emissions trading, including over-compliance for the purpose of generating
allowances to bank or sell, are lost in this proposal, further reducing the benefit of the rule.
The
Agency's assumptions underlying its 90% reduction proposal are short-sighted and do not
realistically consider the actual economic and financial impacts to the power generation industry.
The Agency states that among the purposes of its proposal are to protect the health
specifically of Illinois' citizens by reducing the deposition of mercury from Illinois power plants
into Illinois waterbodies and. thereby, reduce the
methylation of mercury and subsequent uptake
of methylmercury through the food chain to predator fish and ultimately to Illinois citizens who
eat such fish caught in Illinois waterbodies. This, in turn, would satisfy the requirement that
Illinois develop and implement a TMDL addressing mercury for mercury-impaired watcrbodies.
TSD, pp. 26-27.63;
Ex. 8, pp. 3-5; S Tr., pp. 50-51 (June 14,2006). The Agency has not
demonstrated that these purposes of this rule, if adopted, will be fulfilled.
The Agency has not demonstrated that mercury emitted from Illinois power plants is
deposited in Illinois, which is a necessary showing for reductions of mercury emissions from
Illinois power plants to begin the chain of events leading to improvements in Illinois'
mercury-
impaired waterbodies
...
In fact, industry demonstrated that the Illinois mercury rule would result
in an additional deposition reduction benefit of only
4%. Ex. 127. Slide
14.
The Agency has provided no evidence that any reductions in the level of deposition that
may result from the rule would in turn be reflected in reduced fish tissue methylmercury levels in
Illinois, the basis for the Agency's assumptions that the proposal would eliminate or at least
substantially reduce mercury-impaired waters in Illinois and provide a significant,
discernable
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health benefit to Illinois residents. The Agency has not even identified any portion of the Illinois
population that eats a significant quantity of Illinois fish. In fact, the Agency identified only one
potential subsistence fisherman without identifying where this fisherman lives, in what
waterbodies he fishes, and whether this apparently adult male fisherman is even a member
oC the
population at risk from mercury.
S Tr., p. 74 (June 16,2006. p.m.) The record is unclear
whether this single subsistence fisherman
-
or expanded to include his family
-
fishes in an
impaired watcrbody or that the fish
that he consumes is subject to the state's restrictions, which
are more conservative than the U.S. Environmental Protection Agency' ("USEPA") reference
dosc ("RfD") for methylmercury. S Tr. pp. 75-76 (June 16 2006, p.m.)
Another asserted purpose of the proposed rule is to satisfy the state's obligations under
the CAMR.
The Agency has not satisfactorily demonstrated that the proposed rule will
accomplish this purpose. Jim Ross' description at the Chicago hearing regarding the margin of
pounds of mercury under the cap assumes that
IICI will reduce mcrcury emissions sufficiently to
ensure that the state has a margin of compliance with the cap. As
USEPA was not willing to
make this assumption about the technology in adopting the CAMR, his explanation of the state's
ability to demonstrate compliance with the emissions cap was not convincing.
The Agency has not met its statutory burden with respect to this proposed rule. It has not
demonstratcd that the rule is technically feasible or economically reasonable. Promulgation of
the rule where there is such a lack of support would be arbitrary and capricious. Moreover,
where the required
limitations cannot be measured with the level of accuracy necessary to
demonstrate compliance
-
or violation, affected companies' due process rights are violated under
the U.S. Constitution. Further, the proposal suffers procedural, statutory, and constitutional
infirmities in its inclusion of control measures for
SO1
and NOx. There is no foundation in the
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record supporting SO2 and NOx requirements, which violates procedural requirements under
Section 27 of the Act and the Board's rules. Additionally. the Act prohibits the Board from
regulating
SO2 beyond the level necessary to attain the n'ational Ambient Air Quality Standards
("NAAQS") for SO2 outside specified major metropolitan areas. Finally, the prescriptions on
emissions trading included in the proposal violate the Supremacy and Commerce Clauses of the
U.S. Constitution. Therefore, the Board should not adopt the rule.
If the Board declines to adopt the proposal,
mercury emissions, nonetheless, would be
adequately controlled in Illinois. As the Agency has stated
(see
Statement of Reasons, p. 18), the
federal CAMK will be imposed in Illinois pursuant to the provisions of Section 11
1 (d) of the
Clean Air Act. 70
Fcd.Reg. at 28607. The state is not subject to sanctions for failing to adopt a
rule meeting the requirements of the CAMR.
Dynegj hfidw~est Generation, Inc., et 01.
v.
Illinois
Pollution Control Board, et al.
Case No. 2006-CH-213 (Circuit Court, 7th Judicial Circuit,
Sangamon County, Illinois, May 1,2006). Arguably, implementation of the CAMR would fall
under the Agency's existing agreement with
USEPA regarding the New Source Performance
Standards. Midwest Generation
recomme~lds that the Board decline to adopt the proposal and
allow the CAMR to apply in Illinois by operation of federal law or adopt the CAMR by
reference.
In the alternative, if the Board believes it must adopt a mercury reduction rule because of
the factually unsupported concern in the Record with so-called "hot spots,"' the Board should
amend the proposal to provide for the installation of
HCI only, to be operated in an optimal
'
'.I-Iot spots," for purposes of these Comments, is defined as those areas within close
proximity to an emissions source where concentrations of the pollutant in question are
significantly elevated compared to concentrations further away from the source. The Record
does not demonstrate that there are mercury hot spots as defined here. While Midwest
Generation acknowledges the issue, it does not concede the issue with the suggestion above
regarding an alternative to the Agency's
proposal.
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manner but at a rate demonstrated not to interfere with compliance with particulate matter
("PM") and opacity standards. Further, Midwest Generation recommends that such a
technology-based rule8 be adopted as a state-only rule in order to ensure to
USEPA that the
CAMR cap will be met and to allow Illinois power generators to obtain whatever economic
benefits
they can through the federal cap and trade program, since CAMR would then apply in
Illinois.
The Agency has demonstrated. through the Joint Statements with both Ameren and
Dynegy, submitted into the record at the Chicago hearing as Exhibits 75 and 125, and Mr. Ross'
subsequent testimony that it continues to believe that the level of reduction achieved by HCI is
90%. If the Agency and Board are convinced that the implementation of HCI alone is sufficient
to achieve the purposes sought by the Agency, then requiring only the technology comprises a
sufficient rule. while the benefits of the CAMR will
accruc to the state and without the
significant risk to sources subject to the rule if
HCI alone is not sufficient.
11.
THE RULE IS NOT TECHNICALLY FEASIBLE
Section 27 of the Act requires that the proponent of a rule of general applicability
demonstrate that the rule is technically feasible. "Technically feasible" is defined as the
determination
that the rule is "reasonable and capable of compliance by a substantial number of
the individual units in the state
. . .
by the specified deadlines."
Commonwealth Eu'lson Co v
IPCB,
25 1I1.App.3d 271,281-282 (1" Disi. 1974). The Agency has not demonstrated that the
proposed mercury rule is technically feasible.
Units with HS
ESPs should be exempted from the rule in the same manner as 90 MW
units in Section
225.233(c)(l)(R).
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A.
The Agency Has Not Demonstrated That the Proposed Rule Is Technically
Feasible.
The Agency's technical basis for proposing a rule that requires a 90% reduction in
emissions of mercury from
cad-fired power plants is found in the TSD, James Staudt's written
testimony (Ex.
50), and his responses to questions at hearing
(see
generally
Staudt, S Tr. (June
21. 2006, p.m.). Dr. Staudt wrote or reviewed the technical feasibility portion of the TSD. S Tr..
p. 16,ll. 3-1 1 (June 21,2006, p.m.). In sum, the Agency has based its 90% reduction
requirement on its belief that installation of HCI will achieve that level of reduction, and if not,
the Agency claims that "flexibility" provisions added to the proposal over time by the Agency
provide adequate relief. In fact, these provisions do not adequately address concerns regarding
the problems with HCI. Moreover. proposal of these provisions suggests recognition that
changes to the proposal are needed to pass the applicable statutory requirements.
The Agency believes that it has incorporated flexibility into the rule to address the
variabilities among plants and operating conditions by establishing a 12-month rolling average as
the compliance requirement, by including systemwide averaging during the first phase of the
rule, and by including the Temporary Technology-Based Standard ("TTBS") and the
Multi-
Pollutant Standard ("MPS"). However, these provisions provide no meaningful relief. The
technical feasibility in question is whether the sorbents can consistently and reliably achieve
mercury reduction at the levels required by the rule over long
tenn operation. The Agency's
analysis is based upon the assumed use of only I-ICI with cold-side precipitators ("CS ESPs")
and
TOXECON~ for the HS ESPs and without relying on the en-benefits of NOx and SO:, control
equipment. Therefore, the Agency's burden is to demonstrate that the HCI technology alone is
TOXECON is a type of fabric filter or
baghouse following an electrostatic precipitator
("ESP") for the purpose
ol removing mercury.
-9-
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technically feasible and will achieve 90% mercury emissions reductions over the long term. The
Agency has not done this, and so the Agency has not demonstrated that the proposed rule is
technically
feasible.
1.
The Environmental Protection Act requires that rules be technically
feasible.
As stated
infra,
in promulgating rules and regulations under the Act, "the Board shall take
into account.
. .
the technical feasibility" of measuring or reducing the particular type of
pollution. Section
27(a) of the Act. The Appellate Court interpreted Section 27 in
Commonwealth Edison
to mean that rules limiting the emissions of SO2 and particulates into the
air would be valid only if they were shown to be technically feasible and economically
reasonable for a substantial
number of the individual emission sources in Illinois.
Corninonwealth Edison
at 281-282;
see also Peubody Coal Co.
v.
IPCB,
36 11l.App.3d 5, 10
(holding that the substantive regulations of the Board should be economically reasonable and
technically feasible for a substantial number of the individual emission sources in the state).
Conznzonwealth Edison
involved new primary and secondary ambient air quality
standards under the Clean Air Act Amendments of 1970.
Commonwealth Edison
at 275. The
Agency, acting pursuant to Section
46) of the Act, submitted proposals to the Board governing
the emission rates of various pollutants into the air which it deemed necessary to achieve
compliance with the federal standards under a mandated State Implementation Plan.
Commonwealth Edison
at 275. The plan included rules limiting the emission rates of sulfur and
particulates from stationary sources in Illinois.
Comnzonwealth Edison
at 275. At the hearing on
the matter, testimony shoued that while 60 to 70 approaches for controlling
SO2 emissions were
being explored, only five were considered to be processes sufficiently well-developed and
advanced within the cycle of development to
"be capable of providing or contributing to the
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control of SO2 emissions within the next five years."
Common>vealth Edison
at 287. Moreover,
the five processes either had specific limitations or required further development.
Commonwealth Edison
at 287. As a result, the court concluded that from its reading of the
record, it was "unable to state that the Board took into account the technical feasibility of the
rules."
Commonwealth Edison
at 287. Based on this premise, the court held that without any
evidence "that the needed systems are beyond the
co~lceptually workable stage of development,
it cannot be said that the Board's rules rest upon" statutory compliance under Section 27 of the
Act.
Commonwealth Edison
at 287-288.
By supporting ihe MPS, a substantial number of sources in the state, representing half the
generating capacity, have indicated they cannot comply with the rule by the deadline. Kincaid's
representatives explicitly stated that it cannot comply.
C Tr., p. 1818 (August 23, 2006, a.m.)
Moreover, the status of the development of HCI is so dynamic. or as Mr. Cichanowicz described
it, chaotic (Chicago
rans script." p. 533 (August 16, 2006, a.m.)). that I-ICI is not "beyond the
conceptually workable stage of development"
(Commonwealth Edison
at 287-288). Under the
Environmental Protection Act, the Board must adopt rules that are technically feasible for a
substantial number of sources within the state. Further. such rules are technically feasible only if
the involved technology is beyond the stages of development for a substantial number of sources.
That is not the case with this rule.
It is not technically feasible, and the Board may not adopt it
consistent with Section 27 of the Act and
Commonwealth Edison.
2.
The technolow has not demonstrated consistent and long-term
removal at a rate of
90%.
Dr. Staudt's conclusion that installation of activated carbon injection systems and use of
halogenated or brominated sorbents will achieve the required 90% reduction appears to be based
''
Hereinafter referred to as "C Tr."
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upon the results of tests at various electric generating units ("EGUs") lasting from a few days up
to a year. The year-long test, and apparently there has been only one, occurred at the
Gaston
Plant. TSD, pp. 125-126; S Tr., p. 24 (June 21,2006, p.m.); S Tr., p. 121 (June 22,2006). Lee
al~o
C Tr., pp. 493-500 (August 15.2006, p.m.) Most of the tests upon which justification for
this rule was based were only 30-day tests. However, 30-day tests do not provide sufficient
operational information regarding the truly long-term effects of injecting treated activated
carbon. Such testing does not address the longer-term impacts of the activity on equipment and
operations.
The circumstances of the
Gaston Plant test, which is the only test we are aware of that has
assessed mercury removal for at least 12 months, do not totally square with the Agency's
assertion that HCI is tested and commercially available and will result in a 90% removal. First,
the
Gaston Plant bums low-sulfur bituminous coal (C Tr., p. 496 (August 15,2006, p.m.)), while
most of Illinois' plants burn PRB coal, which is low-sulfur, &bituminous coal (Ex. 44).
Second, the
Gaston Plant was testing mercury removal through a TOXECON, or fabric filter.
arrangement. C Tr. p. 498 (August 15,2006, p.m.) The question was the air-to-cloth ratio
necessary to achieve 90% removal. The data accumulated over the 12-month period of the test
showed a removal rate of only 85.6%. C Tr., p. 497 (August 15, 2006,
p.m
)
To determine
whether the TOXECON arrangement could achieve a 90% removal rate.
Gaston Plant simulated
a greater air-to-cloth ratio by reducing load and did achieve 90% removal for periods
of time less
than 12 months. C Tr.,
p. 497 (August 15, 2006, p.m.) Mr. Cichanowicz stated in his oral
testimony that he believes that 90% removal is "highly likely" if a system were initially designed
to include TOXECON, but
Gaston Plant was not and did not achieve 90% removal on a
sustained 12-month basis. C
Tr.. p. 500 (August 15.2006, p.m.) Third, Gaston Plant had a
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baghouse in place following a mal-perfomling HS ESP. C Tr., p. 499 (August 15,2006, p.m.)
There are only three HS ESPs in Illinois, and none of them is followed by a baghouse. The rest
of the EGUs in Illinois have CS ESPs. Therefore, the test at
Gaston Plant is not, really,
applicable to any of the EGUs in Illinois with CS ESPs, leaving the Board with no long-term
information regarding the ability of
HCI to consistently. reliably remove mercury at a rate of
90% on a 12-month rolling basis.
Dr. Staudt acknowledges the co-benefits achieved from various combinations of control
equipment found on many coal-fired power plants, concluding that units firing bituminous coal
equipped with scrubbers. selective catalytic reduction
("SCRs"), and ESPs will remove "about"
90% of the mercury. Ex. 50, p. 4. "About," however, is not good enough for a command and
control rule,
and in any event, most of the EGUs in Illinois do not fire bituminous coal and some
that do are not equipped with the types of pollution control equipment that produce the
co-
benefits. According to Dr. Staudt, circulating fluidized bed boilers ("CFB") with fabric filters
will capture "over
90%." Ex. 50, p. 4. Currently, only one EGU in the state is a CFB. None of
the other types of fuels and control equipment configurations he describes remove anything near
90% of the mercury. Ex. 50, p. 4. The vast majority of Illinois' power generation relies on
subbituminous coal. not one of the fuels that figured in any combination of non-mercury-specific
control equipment to obtain co-benefit reductions. and most companies do not have the level of
NOx and SOz control equipment necessary to produce significant co-benefits relative to mercury
reduction Therefore, mercury-specific control equipment is required at most of the EGUs in
Illinois in order for them to achieve significant mercury reduction and is definitely required for
them to achieve the levels in the proposed rule.
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Even the Agency's primary technology witness recognized that mercury control
technologies are developing and in the midst of an ongoing evolution. Dr. Staudt claims that
there are "many mercury control methods
. . .
under development," but "sorbent injection is
clearly the most developed. It is the onlv
auproach that has been tested on several coal-fired
boilers firing a wide range of fuels." Ex. 50, p.
4. (Emphasis added.) Dr. Staudt describes three
mechanisms that have been developed over time for injecting sorbent into the gas stream at a
power plant:
(1) "normal" sorbent injection upstream of an existing ESP or fabric filter at a cost
of around
$2!KW; (2) TOXECON, which consists of a fabric filter downstream of the ESP with
the sorbent injected between the ESP and fabric filter, with a mercury removal rate of over 90%;
and
(3) TOXECON-11, which requires injecting the sorbent between fields in thc ESP. Ex. 50, p
5. Dr. Staudt says, "So, the technology has advanced rapidly over the last
few years and
experience from just a few years ago may be obsolete." Ex. 50, p. 5. He refers to the general
experience of using untreated powdered activated carbon in municipal waste incinerators and
points out that halogenated powdered activated carbon works better than untreated activated
carbon in coal-fired power plants and has been developed specifically for use in coal-fired
boilers. Ex. 50, p.
6. Dr. Staudt's statements are very telling. What Dr. Staudt has described is
an evolving control approach, not one for which a responsible regulatory authority or an affected
company can be assured will produce the required reductions. For this reason, as described
further below, it is not
at all surprising that Dr. Staudt agreed that the rule should have an
exception for when the technology does not work as well as the Agency' assumes it
will, and he
believed that the TTBS proposed by the Agency was not broad enough.
S Tr., pp. 88-89 (June
22.2006).
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Dr. Staudt further states, "It is my opinion that the coal-fired units in the state of Illinois
are capable of meeting the requirements of the proposed mercury control rule at a cost close to
that described in the TSD."
Ex. 50, p. 6. The cost described in the TSD is "in the range of
$2/KW (sonlewhat higher for small units and somewhat lower for very large units), or about $1
million for a 500 MW plant." TSD, p. 130. Dr. Staudt's cost estimates assumes that most units
will he able to comply using
only HCI. Dr. Staudt states:
For subbituminous coals, such as Powder River Basin (PRB)
coals that are used widely in Illinois, halogenated PAC
[powdered activated carbon] has been
shown to be effective at
several full-scale coal-fired boiler installations providing 90% or
more removal. At several sites injection of the halogenated PAC
has shown that it provides over 90% mercury removal at
treatment rates of about
3 pounds of sorbent per million actual
cubic feet of flue gas
(IblMMacf) when injected upstream of a
cold-side ESP. This testing includes at least two 30-day
continuous trials where 93% or more mercury removal was
achieved over the period.
Ex. 50, p. 7. In fact, Dr. Staudt states:
I'm assuming that they all can
con~ply.
. .
.[T]he only unit
-
the
units that I do have, I'm not sure if they will
[SIC] able to make 90
percent are the four small Meredosia units which are high sulfur
and
-
also assuming if I-Iutsonville continues to burn high sulfur
coal, they may not be able to achieve 90 percent in the manner
that's assumed in the TSD.
S Tr. pp. 208-209 (June 21,2006, p.m.) Therefore, the technology upon which this rule of
general applicability
is based is HCI
Mr. Nelson enthusiastically supports Dr. Staudt's position. We begins his written
testimony with a few questions and answers:
Is it technologically possible to reduce mercury emissions at each
Illinois power plant by 90% today?
Of course it is
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Are there inexpensive retrofit technologies available to get 90%+
at Illinois plants? For the vast bulk of Illinois plants, the answer
to this is also yes, even today.
Ex. 43, p. 2. Mr. Nelson's testimony summarizes a number of 30-day studies conducted by his
and other companies in conjunction with the Department of Energy where the mercury removals
were 90% or better. He claims that if one wants to achieve higher rates of mercury removal, one
would just increase the rate of
HCI. Ex. 43, p. 3. He claims that "[tlhe quantity of sorbent,
particularly a brominated sorbent, in a subbituminous plant that you inject is directly
proportional to the mercury removal that you will achieve."
Ex. 43, p. 2. Moreover, according
to Mr. Nelson, activated carbon injection systems and the sorbents
(i
e
,
IICI), though still
undergoing testing across the nation, are commercially available today. Ex. 43, pp. 3. 5,
8; S Tr.,
pp. 80-92 (June 21,2006, a.m.); S Tr. pp. 48-49 (June 22,2006);
see also
more detailed
discussion below on "commercially available."
Mr. Nelson, of course, is in the business of selling sorbents, and his rave reviews of
sorbent capacity and reliance on short term tests and unpublished data are, therefore, perhaps not
surprising. Those who must comply with regulatory requirements. as well as the Board which
imposes such requirements, however. should consider and rely on long term data that has been
fully assessed for quality, accuracy, and meaning. The danger of relying upon short-term test
results or unpublished results
from ongoing tests upon which Mr. Nelson and the Agency rely is
clear
For instance. Mr. Nelson offered the parametric results of the mercury removal
demonstration test that is currently ongoing at Midwest Generation's
Crawford Station as
reasonably legitimate proof that 90% reduction could be achieved.
See
C Tr., pp. 552-553
(August 16,2006, a.m.). and Ex.
88. Mr. Nelson was testifying, though somewhat couched as
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questions. that HCI is technically feasible on the basis of hourly preliminary test results. The
results he offered in Exhibit 88 showed, according to Mr. Nelson, 90% removal. However, on
August 25,2006, after the conclusion of the Chicago hearing, Mr. Nelson submitted PC 6287 to
the Board. PC 6287
is a correction of Exhibit 88. In fact, the HCI was
achieving a 90%
removal during the preliminary testing; according to PC 6287, the HCI was achieving 80-85%
removal and the testers were
not able to comply with USEPA's required 75% data recovery in
the "Method 324s," part of 40 CFR 75.Appendix K. that Mr. Nelson identified. C Tr., p. 552
(August 16,2006, a.m.) In other words, the testers were not able to accurately monitor the
mercury levels.
Mr. Nelson says, "Eighty percent Hg removal at
4 IbIMMacf with a concrete-friendly
sorbent is still quite an accomplishment, but it looks like a higher injection rate than 4 lbiMMacf
would be required at this point in time to achieve 90% removal." PC 6287, p. I. "Qu~te an
accomplishment" does not equate to compliance with the rule. Mr. Nelson goes on to state that
"the difference between 90% Hg removal and 80% may be particularly key in Illinois." PC
6287, p.
1. This is probably the most profound statement that Mr. Nelson or any Agency witness
made during these hearings, as it goes to the heart of the issue. He further suggests that an
injection rate of greater than
4 IbIMMacf is possible and apparently necessary to achieve the
desired level of reduction.
However, we note that opacity readings during the injection of the
HCl appear to be between 25 and 30%. See Ex. 88 and PC 6287, "Opacity at Midwest
Generation's
Crawford Unit 7 in Chicago." (Emphasis in original.) The Board's applicable
opacity
limitat~on is 30%. 35 Il1.Adm.Code
5
212.123. As discussed further below, there are
significant concerns about whether sorbent injection may impact compliance with PM and
opacit) limits.
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Dr. Staudt's and Mr. Nelson's assertions that HCI will achieve 90% mercury removal at
Illinois' EGUs are, really, all that the Agency offered in support of the technical feasibility of
HCI. Thcir testimony was based upon the results of a number of 30-day demonstrations of
untreated
activated carbon injection and HCI at EGUs across the country and, in some cases,
preliminary, unpublished data from tests that are still ongoing due to the continuing need to
assess the degree to which HCI removes mercury in various applications. While some of the
tests indicated
removal rates that aoproached 90% and even exceeded 90% for part of the time,
nonc of the 30-day demonstrations achieved a 90% removal as the average under circumstances
comparable to those of Illinois' EGUs. None of the demonstrations showed that a 90% removal
could be achieved on a 12-month rolling average. The Agency has not demonstrated that HCI is
technically feasible to achieve compliance with this proposed rule
3.
The purported flexibilities of the rule do not make it technicallv
feasible.
The Agency claims that the proposed rule includes several provisions for flexibility. S
Tr., pp. 138-139, 145-147, 187, and 225 (June 19,2006). These are (I) that compliance is based
upon a 12-month rolling average, (2) that companies may employ systemwide averaging to meet
90% until January 1,2014, (3) that companies may choose to utilize the TTBS until July 1,2015,
and
(4) that companies may opt in to the MPS." None of these provisions offers any real
flexibility, let alone enough to make the rule technically feasible.
1
I
A fifth "flexibility" is the provision to comply with either a 90% removal of mercury
from coal-in measurements or the emissions limitation of 0.0080
lb mercuryiGWh gross
electrical output, including the option of switching off between the two on a monthly basis at
will. These Comments do not examine this "flexibility," but if there are any flexibilities in this
provision, they neither overcome
the lack of flexibility in the other four provisions nor make the
rule technically feasible.
Additionally,please
see
Mr. McRanie's written testimony on the issues
inherent in measuring mercury in the coal. Ex. 132, pp.
6-7,22-26.
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a.
12-Month Rolline Averape
The Agency requires that compliance with the rule be demonstrated as a 12-month
rolling average or on a rolling 12-month basis. The proposed rule defines
rolling 12-month
basis
as:
a determination made on a monthly basis from the relevant data
for a particular calendar month and the preceding
1 1 calendar
months (total of 12 months of data). with two exceptions. For
determinations involving one EGU, calendar months in which the
EGU does not operate (zero EGU operating hours) shall not be
included in the determination, and shall be replaced
by a
preceding month or months in which the EGU does operate, so
that the determination is still based on 12 months of data. For
determinations involving two or more EGUs, calendar months in
which none of the EGUs covered by the determination operates
(zero EGU operating hours) shall not be included in the
determination, and shall he replaced by preceding months in
which at least one of the EGU covered by the determination does
operate, so that the determination is still based on 12 months of
data.
5
225.130. According to the Agency, the purpose of allowing the 12-month rolling average
standard as opposed to instantaneous compliance is to reflect the variabilities inherent in the
operation of coal-fired boilers.
S Tr., p. 47 (June 22,2006). While compliance with an average
may be easier than compliance with an instantaneous standard, there are reasons why use of
a
12-month rolling average does not eliminate concerns arising from the Agency's assumption that
HCI will reduce mercury emissions 90% across the board.
The first reason is that the target control level for the EGUs must actually be greater than
the required
average 90% reduction to maintain compliance. This is obvious mathematical logic.
If
an average is used to show compliance, then the concept assumes that there will be times when
the EGU is removing less than 90% of the inlet mercury. To counterbalance those times when
the
EGU is removing less than 90% of the mercury, it must remove more than 90% at other
times. That being the case, the actual target for mercury removal would be greater than 90%.
C
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Tr., pp. 1697-1698, 1732-1733 (August 22,2006, p.m.) The 30-day test demonstrations upon
which this rule is based. technologically, showed some
rcmovals at greater than 90% but
generally at an average less than at 90%. Most of the tests did not show removals at 90%
consistently enough to produce an average, on a 12-month rolling basis, of 90%.
The second reason is problems with measurement. Mr.
McRanie testified that measuring
a 90% removal of mercury is virtually impossible.
C Tr., pp. 1690, 1692 (August 22, 2006,
p.m.); see detailed discussion below. The measurement problem is even worse when attempting
to measure a reduction greater than 90% in order to demonstrate compliance with the rolling
12-
month average. C Tr., pp. 1766-1767 (August 22; 2006, p.m.)
Midwest Generation objects to the level of the emission reduction standard that the
12-
month rolling average is applied to, not that the compliance demonstration method is expressed
as a 12-month rolling average. The 90% level of reduction is not technically feasible. and the
rolling average compliance, even if it could he accurately measured,
offers no real flexibility.
b.
Svstenzwide Avera~inp Demonstrations
The second provision of flexibility in the proposed rule, according to the Agency, is the
Averaging Demonstration set forth at Section 225.232. However: the Averaging Demonstration
also does not provide any real flexibility, notwithstanding the Agency's assertions to the
contrary.
First, the Averaging Demonstration applies only to those companies that have multiple
sources.
5 225.232(d)(l). Recognizing that there arc a number of single-source companies in
the state, however, the
Agenc) provided for these "orphans" by allowing them to band together
in an Averaging Demonstration.
5 225.232(d)(2). The provisions of subsection (d)(2) are
largely specious, however. Electric Energy,
Inc. ("EEI"), one of the "orphan" companies
identified in subsection
(d)(2) is actually included in the Ameren family of generating
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companies. C Tr., p. 263 (August 15,2006, a.m.) 'l'herefore, it is not eligible to participate in an
Averaging Demonstration with the other "orphans," despite its specific identification in
subsection
(d)(2).
That leaves Springfield City Water Light
&
Power ("CWLP"), Kincaid Generation,
L.L.C., and Southern Illinois Power Cooperative ("SIPC"). CWLP is subject to a very stringent
agreement with Sierra Club, entered into to avoid litigation over its new source permit.
If the
agreement with Sierra Club is more stringent than the Board's mercury rule, CWLP may be able
to beneficially participate in an Averaging Demonstration. However, CWLP, at a current total of
458
MW; is very small, compared to Kincaid. Ex. 44. SIPC is a very small station of only a
total of 290 MW, while Kincaid is quite large at 1320 MW. Ex. 44. Twenty-five percent of the
combined total capacity of these three "orphans" is 5
17 MW, less than a single unit at Kincaid
(each unit is 660 MW).
See Ex. 44. SIPC is equipped with wet tlue gas desulfurization
equipment ("FGD" or "scrubber") on one unit, and its other unit is the only CFB EGU in Illinois,
with limestone injection for
SOz control followed by selective non-catalytic reduction ("SNCR")
for
NOx control and a baghouse for PM control: all of which provide co-benefits with respect to
mercury control. Ex. 44; Ex. 50, pp.
2-4. Kincaid is equipped with an SCR on each unit. Ex.
44. Its sulfur control approach is the use of low
sulk coal. Ex. 44. C.J. Saladino testified that
Kincaid believes it achieves approximately 40% mercury removal as a co-benefit of its
SCRs. C
Tr., p. 1830 (August 23,2006: a.m.) Given the difference in the sizes of these plants; how
Kincaid could benefit from an Averaging Demonstration is totally unclear. In that sense, this
rule of general applicability precludes one plant, with no justification other
than the
circumstances of its
ownership, from participating in a provision of the rule, which the Agency
reluctantly acknowledged. S Tr., pp. 158-1 59 (June 22,2006). The fact that the flexibility is not
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real, as discussed below, is of no moment with respect to the disparate impact of the rule to
Kincaid.
Third, as with the
1 .?-month rolling average, the Averaging Demonstration is based upon
the premise that there is an ability to average and that the reductions used in the Averaging
Demonstration can be measured. The Averaging Demonstration requires that each source
participating in
an Averaging Llemonstration achieve a mercury reduction of at least 75%.12
g:
225.232(b). This suggests that the averaging that will take place is to cover plants achieving a
reduction between 75% and 90%. In a simplistic example, if a system had four plants each with
one unit of 100 MW and one of those plants achieved a 75% removal, as allowed under the
Averaging Demonstration, the other three plants would have to average 95% reduction each. As
discussed above, because the 95% would be
an average reduction for each plant, the target
reduction for each plant would probably need to be at least 97%. In Midwest Generation's
system of 6512 MW (Ex. 44), if its largest plant, Powerton at 1788 MW (Ex. 44). averaged a
75% removal, the other five plants would have to average 96% removal each, with target
reductions of at least
98%. Not even a short-term demonstration has achieved that level of
control. To look at it from the opposite angle, if Midwest Generation's smallest plant, Fisk at
374 MW (Ex.
44), achieved only a 75% removal, the other plants would have to average
approximately 92% removal with targets of at least 94% removal. Particularly given the
problems with measuring mercury reductions discussed briefly above and in
more detail below.
this is totally unrealistic at this time, and the Agency provided no evidence that it could be done
now or by 2009. Therefore, this purported flexibility is, in actuality, completely illusory.
12
As with our use of the 90% reduction as encompassing the 0.0080 lb mercury1GWh
gross electrical output, our use of the 75% reduction to describe the level of control required
includes the alternative 0.020
ib mercury1GWh gross electrical output.
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c.
-
TTBS
The TTBS at Section 225.234 allows 25% of a system's total rated capacity to be
excluded from the compliance requirements of the rule through June 30,201 5, if the
ownerloperator of the system meets certain requirements. "Orphans" are provided for as in the
in the Averaging Demonstration of Section
225.232(d)(2). In order to be eligible for the TTBS,
the system must be equipped with HCI and either a CS ESP or a fabric filter and must inject
halogenated or other equivalent activated carbon at a rate of 5
lb/MMacf for subbituminous coal
and 10
lblMMacf for bituminous coal.
5
225.234(b). In other words, the system must be
equipped with the same emissions control hardware and operated in the manner that the Agency
claims will
achieve the 90% reduction.
The inclusion of the TTBS suggests that the Agency is not as confident of the ability of
the technology as it would otherwise lead the Board to
believe.I3 The lack of confidence in the
TTBS was emphasized by Dr.
Staudt's assertions at hearing that he encouraged the Agency to
include a TTBS, felt it was unwise when the rule was
initially proposed without it, and would
have preferred that the TTBS not be limited to only 25% of a system's capacity but rather that it
be available to 100% of a system's capacity.
S Tr., pp. 88-89 (June 22,2006).
The TTBS does not afford appreciable flexibility if any at all. Because the TTBS is
limited to only 25% of a system's capacity, Kincaid cannot use it because of the size of its
units(C Tr., pp. 1847-1848 (August 23, 2006), and CWLP. and SIPC are unlikely to make use of
l3 The Agency testified that it added the TTBS at the '.request of industry." S Tr., p. 210
(June 21, 2006, p.m.) Midwest Generation
has not been able to learn who in "industry" made
that request, though
Dianna Tickner's testimony suggests that perhaps Prairie State Generating
was the source of the request.
See Ex. 80. Prairie State Generating is a new company that has
not yet constrneted its power plant. Therefore, the provisions of Section 225.234 do not apply to
Prairie State Generating; rather, it is subject to the provisions of Section 225.238 if it wishes to
make use of the TTBS.
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it. Moreover, these companies could face the same "orphan" problems that they faced under the
Averaging Demonstration discussed above. Two Midwest Generation units that could benefit
from a TTBS-type of flexibility are those at Will County and Waukegan that have HS ESPs.
However, the eligibility requirements exclude applicability
ofthe TTBS to these units because
the units must be equipped with either a CS ESP or a fabric filter. Obviously, these units are not
equipped with CS ESPs; they have
HS ESPs, which is why they need some level of relief from
the
rule.I4 If Midwest Generation were to install fabric filters on these units, setting aside the
measurement concerns, at least in Dr.
Staudt's and the Agency's view, Midwest Generation
would not need the flexibility of a TTBS because these units would comply with the rule.
d.
MPS'5
The Agency, Ameren, and Dynegy argue that the MPS provides a different type of
flexibility to the rule. Under the MPS, a company may delay achieving or demonstrating
compliance with the 90% removal requirement until January 1,2015
(5
225.233(d)), if it takes
certain actions and meets certain
NOx and SO1 emissions limitations beginning in 2012 and
l4 Dr. Staudt conceded that units with HS ESPs will not achieve the requisite levels of
mercury reduction with HCI alone. S Tr., p. 107 (June 21, 2006, p.m.)
l5
Both the Agency and Ameren argued that Midwest Generation had ample time to
address the issues raised by the proposal of the MPS during the Chicago hearing, because
Ameren's proposed amendment was filed on July 28, approximately two weeks prior to the
commencement of the hearing and because there remained about two and a half days of the
scheduled hearing time when the hearing was adjourned. Ameren's Response to Midwest
Generation's Motion to Schedule Additional Hearings, PCB R06-25 (August 31, 2006);
IEPA's
Response to Midwest Generation's Motion to Schedule Additional Hearings, PCB R06-25
(August 3 1.2006). The Agency and Ameren conveniently overlook what is involved in such
an
analysis and the fact that the companies' expert witnesses were actively involved in developing
responses to the large number of written questions posed of these experts, mostly by the Agency.
Furthcr, testimony in this matter was to be filed with the Board by July 28, 2006, at the latest.
As Midwest Generation, along with everyone else, received Ameren's testimony on that date.
there was no provision for filing testimony addressing the MPS, even if there had been time, for
Midwest Generation to prepare and submit written
tcstimony addressing the MPS. To suggest
otherwise is both disingenuous and disappointing.
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2013, respectively (5 225.233(e)). Among the general prerequisites for opting in to the MPS are
the following:
w
Notify Agency of intent to opt in by December 3 1.2007 (5 225.233(b))
0
Commence commercial operation of each EGU by December 3 I, 2004
(5
225.233(a)(2)(A))
e
Identify all EGUs owned as of July 1,2006 (5 225.233(b)(1)); all must be included in the
MPS (C Tr., p. 166-167 (August 14,2006))
e
Identify current control devices and additional control devices necessary to comply with
MPS
(5
225.233(b)(4))
e
Install HCI ahead of a CS ESP or fabric filter by July 1,2009 or install an SCR and an
SO;: scrubber if the EGU bums bituminous coal
(5 225.233(c)(l)(A))
e
Inject HCI manufactured by Alstom, Norit, or Sorbent Technologies or other
manufacturer pursuant to a demonstration of equality with the other brands at a rate of 5.0
IbJMMacf if firing subbituminous coal or 10 lbiMMacf if firing bituminous coal or at a
rate demonstrated not to threaten compliance with
PM and opacity limitations, with
exceptions for certain site-specific configurations
(5 225.233(~)(2))
e
Meet a NOx emissions rate that is the more stringent of 0.1 1 IbimmBtu or 52% of the
Base Annual Rate or 80% of the Base Seasonal Rate
(5
225.233(e)(l))
e
Meet an SO;: emissions rate that is the lnore stringent of 0.33 IbimmBtu or 44% of the
Base Rate in 201 3 and 2014 and an emissions rate that is the more stringent of 0.25
lbhmBtu or 35% of the Base Rate beginning in 2015
(5
225.233(e)(2))
If a company meets these requirements and chooses to opt in to the MPS, the final provision is
that the company is prohibited from selling or trading any vintage 2012 and later
NOx or SO1
allowances necessary for compliance with Sections 225.310 (not yet adopted by the Board),
225.410 (not yet adopted by the Board), 225.510 (not yet adopted by the Board), 40 CFR Part 72
(federal Acid Rain Program, pursuant to Title IV of the Clean Air Act), 40 CFR 96.101
el
seq.
(federal NOx CAIR programs), and 40 CFR 96.301
el
seq. (federal SO2 CAIR program) that
might be generated as a result of complying with the
NOx and SO;: emissions limitations, unless
those allowances reflect over-compliance with the MPS.
5 225.233(1).
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The inclusion of the MPS in the rule raises a number of issues: (1) that the companies
that co-sponsored the MPS with the Agency believe that compliance with the underlying rule is
not technically feasible
andlor 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, which
will be discussed in the next section of these Comments;
(3) whether it is appropriate for the
Agency to require
NOx and SO1 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 PM2.5
NAAQS 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
SOz
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.
lncluding
Now 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.
Mr.
Mcnne testified in support of the MPS, providing Ameren's rationale that inclusion
of the MPS is necessary in order for Ameren to comply with the mercury limitations. Mr.
Menne stated that Ameren was not confident that HC1 alone would ensure that Ameren could
comply with the 90% removal requirement. C Tr., p. 169 (August 14,2006). He said that
Ameren had determined it would have to "put at least fabric filters or baghouses on each one of
our units in combination with [activated carbon injection] or a scrubber of some form" for those
units still burning bituminous coal in order to comply. C Tr., p. 159 (August 14,2006). For
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those units burning subbituminous coal, Ameren would have to install a fabric filter plus sorbent
injection.
Ex. 76, p. 5. As discussed in Section 111 of these Comments: installation of this level
of control equipment by July 1.2009, assuming it would be physically possible, is not financially
sound. Mr. Menne also stated that because Ameren insists upon being in compliance
with
applicable regulations, it will not risk the noncompliance that may arise from the unproven IICI.
C Tr., p. 100 (August 14,2006).
Of course, all companies in the state share
Amereu's view that compliance is important
and that the companies cannot share in the Agency's cavalier view that a technology that works
some of the time or that gets pretty close is adequate to support a rule that imposes compliance
obligations.
C.$,
C Tr., p. 1818 (August 23, 2006). Based on the test results to date, none of the
companies believes that it can
rely on HCI alone for compliance with the rule. All of the
companies arc confident that the co-benefits of
NOx and SO2 control equipment are necessary
for them to ensure compliance with Illinois' proposed mercury rule.
USEPA recognized the co-
benefits of NOx and SO2 controls when it proposed and adopted the CAMR and expected
companies to coordinate CAMR compliance with CAIR compliance. 70
Fed.Reg. 28605,
et seq.
The implications of the proposal of the MPS and then the amendment to the MPS by Dynegy and
the Agency are clear: companies comprising over half of the generating capacity in the state
have announced that they cannot comply with the rule in the
manner proposed within the
timeframes proposed. Their announcement is equally true of
the remaining capacity in the state.
As a result, the Agency's support of the MPS demonstrates that
it; too, finds that as a rule of
general applicability, the underlying rule is not technically feasible.
NOx and SO2 have nothing to do with the requirement to control mercury emissions, and
the concerns with including
NOx and SO2 in a mercury rulemaking were apparent at the Chicago
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hearing. Participants in the hearing found themselves repeatedly venturing into questions
regarding the implications of the inclusion
ofNOx and SO? in the MPS. The Agency has
provided no technical or economic support relative to
NOx and SO? control measures or any
requirements it believes are necessary for the state to comply with the ozone and PM NAAQS,
thus raising questions about the propriety of the promise in the Joint Statement, "that the level of
NOx and SOz reductions required in the proposed rule is expected to contribute significantly
towards the state's efforts to achieve the attainment of National Ambient Air Quality Standards,
and any further reductions needed would first come from other sources." Exs. 75 and 125,
p. 3.
The Agency offered no evidence that the reductions resulting from companies' opting in to the
MPS would "significantly" contribute towards attainment of the NAAQS. The Agency can offer
no guarantees that
anv
companies will ultimately opt in to the MPS, though Mr. Menne testified
that Ameren intends to (C
Tr. pp. 165-166 (August 14,2006)) and the implication is that Dynegy
intends to (see Ex. 125 and C Tr. p. 1342 (August 21,
2006)).16 Apparently, neither company is
obliged to opt
in.I7 C Tr.. p. 133 (August 14, 2006). Therefore, how the MPS "significantly"
contributes towards attainment of the NAAQS remains an outstanding question that the Agency
cannot answer until it has commitments from those choosing to opt in; these are not due before
December
3 1,2007, and even then, how binding they are remains a question, as only a
notification of intent to opt in is required.
5
225.233(b). Until the Agency issues a permit
lh Dynegy offered no testimony in the hearings.
"
These comments do not discuss the oxymoron of being obliged to opt in to a voluntary
program. However, Ameren's letter to the Agency clearly indicates that "opting in" to the MPS
is part of its bargain
with the Agency in order for Ameren and the Agency to propose, in effect
jointly, the MPS, despite the Agency's avowal that the MPS is not its proposal. See Attachment
1. Regardless, once a company opts in, the requirements are mandatory and permanent, not
voluntary.
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requiring compliance with the MPS, nothing is enforceable, a prerequisite for credit towards
demonstrating attainment with a NAAQS
Moreover, the Board is precluded from regulating
SO* emissions in the manner proposed
by the Agency. Section
10(B) of the Act provides:
The Board shall adopt
SO2 regulations and emission standards
for existing fuel combustion stationary emission sources located
in all areas of the State of Illinois, except the Chicago. St. Louis
(Illinois) and Peoria major metropolitan areas, in accordance
w-ith
the following requirements:
(1) Such regulations shall not be more restrictive than
necessary to attain and maintain the "Primary National
Ambient Air Quality Standards for Sulfur Dioxide" and
within a reasonable time attain and maintain the
"Secondary National Ambient Air Quality Standards for
Sulfur Dioxide."
Section
10(B) of the Act. (Emphasis added.) Under Illinois law and fundamentals of statutory
construction, if statutory language is clear, a court must give effect to its plain and ordinary
meaning without resorting to other construction aids.
US. Bank Nat'l Assoc.
v.
Clark,
216 111.2d
334, 346 (2005). As a result, courts may not construe a statute by altering its language in a way
that constitutes a change in the plain meaning of the words actually adopted by the legislature
US Bank "Vat'l. Assoc.
at 346. Thus, if the statutory language of Section 10(B) is clear, the
Board must give it its plain and ordinary meaning.
Indeed. the language of Section
10(B) is clear. The plain and ordinary language limits
the extent to which
SOz emissions from fuel combustion sources outside of the three major
metropolitan areas can be controlled by the Board. As a result, the Board, under Section
1 O(B),
cannot enact regulations that are more restrictive than necessary to attain and maintain the
primary and secondary NAAQS for
Sol. Section 10(B)(1) of the Act
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Because there are no SOz nonattainment areas in Illinois, there can be no new SO1
limitations adopted by the Board applicable to sources outside the specified major metropolitan
areas.'"he
proposal directly violates the plain and ordinary meaning of Section lO(B). Further,
although proponents of the MPS claim that it is voluntary, if Midwest Generation is forced to
follow the MPS as the only option for compliance with the rule, then the MPS is not voluntary,
but rather a mandate for compliance. However voluntarily an entity may elect to participate,
once subject to the MPS, the
SO1 controls are mandatory. As a result; under Illinois law, the
Board must find that the proposal would violate the Act by limiting
SO2 emissions beyond
legislative authorization.
If a company opts in to the MPS, it is prohibited from participating in the national
NOx
and SO2 emissions trading programs commencing with vintage year 2012 unless it over-complies
with the MPS. The Agency offered no rationale for this prohibition on trading. Regardless, even
if there were a rationale, such a prohibition would be unconstitutional. It violates the Supremacy
and Commerce Clauses with respect to both
NOx and SO2 trading, even though participation in
the MPS is claimed to be voluntary.
Midwest Generation questions whether participation in the MPS is truly voluntary. In
fact; the "voluntary" provision of the MPS is illusory. The Supreme Court addressed the
circumstances under which a rule allegedly voluntary is not in
US.
v.
Butler, 297 U.S. 1 (1936),
addressing "voluntary" regulations under the taxing power of the federal government. The
government, employing a
plan to regulate agriculture, argued that "whatever might be said
against the validity of the plan, if
con~pulsoly, it is constitutionally sound because the end is
See
USEPA, Green Book, ~http:llwww.eoa.gov/oar/oaqpslirreenbkle.ltml (no
nonattainment areas in Illinois), and
<htto://~ww.eoa.gov/oar/oaqps/greenbklsmcs.
html#ILLINOIS> (Groveland and Hollis Townships, Tazewell County, and Peoria, Peoria
County, are maintenance areas) (September
18, 2006).
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accomplished by voluntary cooperation." 297 U.S. 1, 70 (1936). The Court found that the
regulation was not in fact voluntary. It based its holding on the following:
The farmer, of course, may refuse to comply, but the price of
such refusal is the loss of benefits. The amount offered is
intended to be sufficient to exert pressure on him to agree to the
proposed regulation.
. . .
If the cotton grower elects not to accept
the benefits, he will receive less for his crops; those who receive
payments will be able to undersell him. The result may well be
financial ruin.
Butler
at 70-71. As a result, the Court held that the "asserted power of choice is illusory."
Butler
at 7 1
In the case of the MPS, as Mr. Menne's and Anne Smith's testimony attest, the
underlying rule is so stringent that companies believe they cannot comply without relief with
respect to demonstrating the level of removal and the timing of such compliance. The only
option for delaying the demonstration of compliance is through the MPS.
When the MPS is the
only safe harbor, it is no longer voluntary. The "voluntary" language in the MPS is illusory.
The companies face either enforcement because they are technologically unable to demonstrate
compliance and because they are unable to secure financing; permitting, or materials and labor
for installation by 2009 of the
NOx, SOz, and PM control equipment necessary for their co-
benefits, or they must opt in to the MPS. Mr. DePriest testified that the timeframes are too short
for a company such as Midwest Generation to secure the necessary financing, permits, and
materials and labor to install the
NOx, S02, and I'M control equipment that will be necessary in
addition to HCI to ensure compliance, assuming the Board adopts the rule as proposed. Ex.
1 15,
p. 20. Therefore, it will become exposed to possible civil and criminal enforcement
-
or it must
opt in to the MPS. Those are not viable options, particularly when the Agency has staked its
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support of the rule, its demonstration of the technological feasibility of the rule, on HCI alone,
with the exception of the units with
HS ESPs.
Regardless of the claimed voluntary participation in the MPS, the companies that do opt
in are then
compelled to comply with all of the provisions of the MPS, including the prohibition
on emissions trading through national programs.
A state does not have the authority under the
U.S. Constitution to change the applicability of a federal law where such authority has not been
granted by Congress. Congress did not grant states the authority to interfere with Title IV of the
Clean Air
~ct." While Title IV does not exclude additional SO2 emissions reductions under
Section 110 of the Clean Air Act, nothing in Title IV grants states the authority to interfere with
the Title IV trading program. For a state to do so, as Illinois proposes in Section
225.233(Q,
violates the Supremacy and Commerce Clauses of the Constitution.
The Supremacy Clause of the Constitution "invalidates state laws that 'interfere with, or
are contrary to,' federal law."
Clean Air Markets Group
v.
Pataki, 194 F. Supp. 2d 147, 157
(N.D.N.Y.
2002), ujjrnled 338 F.3d 82 (2d Cir. 2003).20 As such, federal law preempts state lam
to the extent state law actually conflicts with the federal law.
Clean Air Markets at 157. In
Clean Air Markets, New York passed a law that placed a trading restriction on SO2 allowances.
Cleun Air hfurkets at 154. The court found that "New York's restriction on transferring
allowances to units in the Upwind States is contrary to the federal provision that allowances be
tradable to
any other person." Clean Air Markets at 158. As a result, the court held that New
19
Whether USEPA even has that authority is debatable and the subject of an appeal of
the CAIR.
North Carolina, et ul.,
v.
USEPA, No. 05-1244 Cons. (D.C. Cir. July 11,2005).
20 The District Court found that the New York law violated both the Supremacy and
Commerce Clauses of the Constitution. although the Court of Appeals relied on only the
Supremacy Clause, finding that because the state law was unconstitutional under the Supremacy
Clause, it
did 1101 have to discuss the Commerce Clause.
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York's law was preempted by the Clean Air Act because it interfered with the Clean Air Act's
"method for achieving the goal of air pollution control: a cap and nationwide
SO2 allowance
trading system."
Clean Air Markets
at 158.
Like New York's law in
Clean Air Markets,
the MPS mandates that a party opting into
the MPS must surrender
SO2 allowances. As a result, the MPS effectively prohibits trading of
SO2 allowances and, as the Agency has indicated; it intends to retire the surrendered allowances
thus reducing the size of the market, a size expressly determined by Congress in Title IV of the
Clean Air Act. Under the Supremacy Clause and
Clean Air Markets,
state laws cannot impede
the Clean Air Act's nationwide
SO2 cap and allowance trading system. Thus, the Clean Air Act
preempts and invalidates the prohibition on trading of
SO2 allowances.
While the
NOx trading programs may have a slightly different status because they are not
established directly in the Clean Air Act, nevertheless, the state cannot participate in a federal
NOx trading program through the CAIR and then prohibit sources from participating without
violating the Supremacy Clause. Once the state has chosen to comply with the CAIR
NOx caps
through participating in the federal
NOx trading programs, as Illinois proposes to do through
Docket R06-26 currently pending before the Board and
wl~ich the Board w-ill presumably adopt
in some form (that proposal is also subject to potential objections that will not be discussed
further here), and
USEPA has approved the rule as part of the SIP, for the state to prohibit
participation in the manner proposed in the MPS violates the Supremacy Clause because the
CAIR trading program as applied to Illinois has become federal law.
Moreover, prohibiting trading
SO2 and NOx allowances would violate the Commerce
Clause of the U.S. Constitution. In
Clean Air rbfarkets,
New York attempted to halt altogether
"transfers of
SO2 allowances from New York units to units in Upwind States[,]
. . .
in spite of a
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federal system designed for free nationwide transferability of SO* allowances."
Clean Air
hfurkets
at 162. Thus, New York's law imposed a burden on interstate commerce.
Clean Air
Markets
at 162. Since New York failed to justify its law in terms of "local benefits flowing from
the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local
interests at stake," the court invalidated New York's law under the Commerce Clause.
Cleun Air
12ilurkels
at 162. Like
Clean Air Markets,
the MPS prohibits sources in Illinois from transferring
SO1 and NOx allowances in spite of the free-market federal system. Further, as noted above, by
taking allowances off the markets, the MPS would change the scope of those markets, scopes
that have been specifically defined by Congress in the case of the
SO2 trading program and by
USEPA in the case of the NOx trading programs. Even if there are local benefits from the MPS.
there
may be less discriminatory (as to interstate commerce) alternatives to achieve attainment of
the ozone and PM2.5 NAAQS, which the Agency must develop in the proper proceeding. The
Agency has not demonstrated or even tried to demonstrate that there are less discriminatory
approaches, nor, for that matter, that the MPS will even provide any such benefits.
Because of these violations of the Supremacy and Commerce Clauses, Midwest
Generation believes that the rule would be invalid and that
USEPA could not approve this rule
pursuant to Section
I 1 1 (d) of the Clean Air Act.
B.
Midwest Generation Has Demonstrated That the Rule Is Not Technically
Feasible.
Among other requirements, the Agency's burden in a rulemaking is to demonstrate that a
regulatory proposal is technically feasible. Section 27 of the Act. Participants in
a regulatory
proceeding do not have a burden to demonstrate that a proposal is not technically feasible. In
this matter. Midwest Generation has raised credible questions about whether
the rule is
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technically feasible and has affirmatively demonstrated that measurements to the level required
by the rule are not currently possible.
Mr. Cichanowicz's testimony raised serious questions about the implications of long-
term operations at the plants, when the demonstration tests have lasted only 30 days. Mr.
Cichanowicz also raised questions about the role of the size of the specific collecting area
("SCA") in the ESPs. William DePriest of Sargent
&
Lundy, a company that has been in the
business of designing power plants and their equipment for
11 5 years, questioned Illinois
companies' ability to comply with the rule using only
I-ICI or to comply timely if the companies
determined that additional equipment was necessary. Mr.
McRanie raised perhaps the most
consequential question of all: whether the companies can even measure if they are in
compliance Mr.
McRanie's testimony demonstrated that the rule is not technically feasible. If
removal of the pollutant cannot be measured to the level necessary to demonstrate compliance
with the rule, the rule is not only technically
infcasible but may also violate the due process
rights of those subject to the rule.
Mr.
Menne for Ameren, Andy Yaros and Mr. Saladino for Kincaid, and James W.
Ingram, Assistant Corporate Counsel for Dynegy, all expressed deep concerns over their
companies' ability to comply. Ameren and Dynegy, then. proposed, in conjunction with the
Agency, the MPS, while Kincaid proposed
yet another alternative to the rule. Finally, Mr.
Nelson provided an exclamation point to the issue of technical feasibility. Mr. Nelson,
apparently because of his commercial interests, is clearly enthusiastic about the ability of HCI to
achieve 90% removal, but he could point
on14 to 30-day demonstration tests. Mr. Nelson,
anxious to prove the ability of Illinois sources to comply, introduced preliminary results of
mercury
remotal testing at Midwest Generation's Crawford Generating Station (Ex.
88),
only to
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have to replace the information, revealing a lower removal rate, when he learned that there was
an
error in the measurement data (PC 6287). Too much of this rule is based upon short-term
testing, including preliminary data.
USEPA and the U.S. Department of Energy ("DOE") are aware that the technology is in
the process of being developed. The CAMR reflects a
thoughtf~~l
approach to mercury
reductions, and
USEPA has reiterated its position in the Reconsideration. 71 Fed.Reg. 33388
(June 9,2006). Illinois' ill-conceived approach places the cart before the horse. Illinois is
pushing for reductions where the technology is not proven or ready and for reductions that may
be obtained in due course through regulatory efforts aimed at other programs.
1.
The technolow is currentlv still evolving.
As asserted earlier in these comments, Midwest Generation questions the level of
mercury removal achievable by HCI, not the feasibility of the installation and operation of
activated carbon injection hardware or equipment. As the Agency claims, the hardware is
simple, relatively inexpensive, relatively easy to install and operate, and proven, at least at
incinerators. Midwest Generation does not expect there to be problems with the activated carbon
injection system hardware.
What the Agency has not demonstrated is that the HCI sorbents will reliably.
consistently, and over the long haul reduce mercury emissions
by 90% as required by the
Agency's proposal. Midwest Generation believes that HCI is an evolving technology that
requires more testing, and that is why DOE-funded tests are currently underway at the
Crawford
Generating Station and at other power plants across the country. Midwest Generation is not
alone in this belief:
USEPA has developed the CAMR around the fact that mercury removal
technology is evolving (70 Fed Reg. at 28614-28615); DOE does not believe the technology is
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"there" yet (see Ex. 55); the Electric Power Research Institute ("EPRI")~' does not believe the
technology is "commercially available"
(see Ex. 113). That the technology is not "commercially
available" is, itself, testament to the evolving nature of the technology.
Dr. Staudt and Mr. Nelson each offered definitions of "commercially available" at the
Springficld hearing. Dr. Staudt defined "commercially available" as "when there is a provider
willing to sell it." S Tr., p. 49 (June 22, 2006). Mr. Nelson's definition was similar. He said,
2' EPRI is a respected research institute, largely funded by the electric power industry
through membership dues, that often works in collaboration with
USEPA andlor DOE in
researching and developing solutions for the electric power industry. In EPRI's own words:
The Electric Power Research Institute (EPRI), with major
locations in
Palo Alto, California, and Charlotte, North Carolina,
was established in 1973 as an independent, nonprofit center for
public interest energy and environmental research. EPRI brings
together members, participants, the Institute's scientists and
engineers, and other leading experts to work collaboratively on
solutions to the challenges of electric power. These solutions span
nearly every area of electricity generation, delivery, and use,
including health. safety, and environment. EPRI's members
represent over 90% of the electricity generated in the United
States. International participation represents nearly 15% of
EPRI's total research, development, and demonstration program.
Public Interest Mission
As a tax-exempt. nonprofit scientific research organization, EPRI
has a strong public interest mission that helps shape the scope and
direction of our work, extending through our entire portfolio from
nuclear safety to environmental science. It requires that we
operate with great care, objectivity and scientific integrity.
Our researchers are independent scientists and engineers with
total freedom to assure unbiased, credible science is brought to
bear on challenging and often controversial issues. Research is
regularly submitted to outside scientific committees and to
peer-
reviewed journals to assure it meets every criterion of best
scientific practice.
http://mv.epri.com/~al/server,ut?
+
About EPRI
+
Corporate Overview (September 5.
2006); see
ulso
Ex. 113, last page.
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"To be commercially available, it simply has to be able to be purchased, doesn't have to supply a
demand that doesn't currently exist." S Tr., p. 89 (June 21,2006, a.m.)
EPRI distinguishes between "commercially available" and "offered for sale commercially," the
latter of which is more
'akin to Dr. Staudt's and Mr. Nelson's definitions of "commercially
available," in Exhibit
113, introduced at the very end of Mr. Cichanowicz's testimony, "Status of
Mercury Controls for Coal-Fired Power Plants: An EPRI Assessment (August
2006)." EPRI's
very recent 2006 definition of "commercially available" is more in tune with general use:
While several of these mercury control technologies may be
"ojjred for safe conzmercially,"
EPRI does not yet consider them
to be
"comnzercially available"
from the user's perspective for
the following reasons:
@
Their performance cannot always be predicted with
confidence.
0
Insufficient long-term tests have been conducted of the
mercury reduction capability of any technology or control
strategy. Few studies have lasted as long as one month
and none as long as 12- 18
months to ensure long-term
performance at high removal levels with no unmanageable
impacts on the power plant.
*
The performance of certain configurationslcoal types has
barely been investigated (especially at plants burning coal
blends).
0
Tests have not yet been conducted (or reported in the
public domain) on the
mercury oxidation performance of
the new SCR catalysts being developed to minimize
SO~Isulfuric acid and blue plume formation. Therefore.
we do not know if they can produce the same high
oxidized mercury levels (in plants firing eastern
bituminous coal) as current catalysts.'
The
U.S. Department of Energy (DOE) in collaboration with
power companies, EPRI in collaboration with its members, and
DOEWPR1lcompan~~
teams are conducting or are planning to
conduct tests over the next three years to address most of these
issues.
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'
Field measurements at full-scale boilers firing PRB and
equipped
with an SCR have shown very little, if any, effect of the
SCR on mercury speciation.
Ex.
113, p. 2. (Emphasis and footnote 5 in original.)
Mr. Cichanowicz raised numerous questions about the technical bases of the proposed
rule, including the effect of SCA size on the ability of
an ESP to remove mercury. Ile said,
"There is perhaps something about large SCA ESPs that make it amenable to high levels of
mercury removal." C Tr., p. 554 (August 16,2006, a.m.) Figure
5.2 in Section 5.6.2 of Exhibit
84 suggests there is a direct or indirect relationship between mercury removal and ESP SCA
size. Ex. 84,
p. 4. Mr. Cichanowicz noted that the mercur>I removal in the range of 90-95%
occurred at the large ESPs and not in the smaller ESPs that are more characteristic of those in
Illinois. C Tr., pp. 523-524 (August 16, 2006, a.m.) Mr. Cichanowicz illustrated with Exhibits
89 through 92 test demonstration sites where the ESPs had been replaced with larger ESPs.
EIis
point was that no one thoroughly understands the relationship between the SCA size and
mercury removal.
Dr. Staudt and Mr. Nelson claim it plays no role. S Tr., p. 11 1 (June 21,
2006, a.m.); S Tr., pp. 146-147 (June 21, 2006, p.m.) This has not been proven. These exhibits
also reveal the amount of
ductwork leading into the ESPs because of the retrofitting involved to
place the larger ESPs onto the plant sites. Exhibits 94 and 95 are satellite photos of Midwest
Generation's Waukegan and Will County Generating Stations. These are Midwest Generation's
two stations with HS ESPs. Mr. Cichanowicz's purpose in showing these two stations was to
illustrate the lack of space available for the installation of TOXECON
(i.e.,
baghouses) or larger
ESPs, which even Dr. Staudt conceded would be required to
achieve the necessary level of
mercury reduction at HS ESPs.
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Keith Harley tried to make the point in his cross-examination of Mr. Cichanowicz that
the photos do not show the entirety of the Waukegan and Will County plant sites. C Tr., pp.
571-572, 576, 577 (August 16, 2006, a.m.) The point is
irrele~ant.'~
While a part of the
question is whether there is room anywhere at the plant site for baghouses or larger
ESPs, which
is the point that Mr. Harley was alluding to, the major point that Mr. Cichanowicz made was that
there is no room for additional or replacement control equipment at the location at the plant that
makes the most control-efficiency sense. Regardless of what Midwest Generation does, it will
involve placing the new control
equipmcnt some distance away from the current location of the
ESPs, which will lead to costs around $67 million rather than the generic $18.8 million that the
Agency assumes for TOXECON. Ex. 115, pp. 23-24.
Mr. Cichanowicz raised questions about the long-term. The demonstration tests have
been very short.
See
Ex. 113, p. 2. The industry does not have the experience with mercury
control removal technology that it has with
NOx and SO2 removal technologies. C Tr.. pp. 664-
665. 667, 668 (August 16, 2006, p.m.) Neither the industry nor regulators can honestly predict
with any level of certainty whether there will be balance of plant impacts
from HCI. C Tr., p.
668 (August 16,2006. p.m.)
Mr. Nelson's submittal of a revision to Exhibit 88, PC 6287, demonstrates the evolving
nature of the technology. Mr.
Nclson testified at the Chicago hearings that results at Midwest
Generation's
mercury reduction test at the Crawford Generating Station during the first
fouI
days
of parametric testing the results were showing 90% reduction in mercury.
C Tr., pp. 999-1000
22
The availability of space is less an issue than uhere the space is located. The further
from the unit that the baghouses must be placed, the more duct work that will be required. The
more duct work, the more installation cost that would be incuned. The more duct work, the
more power
rcquired to operate the control equipment. The more power required. the more
operational costs that would be incurred.
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(August 17. 2006, p.m.) However, that was not the case. In fact, they were showing
considerably less reduction, more in the range of 70-80% reduction, requiring Mr. Nelson to
replace Exhibit 88 with PC 6287.
Exhibit 113 provides an overview of the status of mercury control technology. It
factually summarizes the technology that
can be applied to various coal types and
boilerlpollution control configurations. It also lists uncertainties that EPRI, USEPA, and DOE
have identified with these various mercury control technologies. Mercury control technology is
cvolving. There were new developments during the course of the Chicago hearing, in fact,
including release of Exhibit 113 and Mr. Nelson's Exhibit 88 (followed
by Public Comment
6287). It is premature for Illinois to require so stringent a level of mercury removal where the
technology continues to evolve at the rate it currently is. This is
not to say that there should not
be a requirement for mercury removal; it is to say that such a stringent level of removal at this
point in time is not technologically supportable. As Mr. Cichanowicz stated at the hearing, "The
world of mereury removal right now is chaotic." C Tr.,
p. 533 (August 16.2006, a.m.)
2.
Mercuw removal cannot be precisely, consistently, and continuouslv
measured.
Mr. McRanie demonstrated most vividly that the Agency's proposal is not
technologically feasible. In order for a rule to be technologically feasible and to not abrogate
companies' fair notice and due process rights, affected
sources must be able to know if they are
in compliance as well as be able to demonstrate compliance. This particular rule requires
removal of
mercury at a rate of 90%. This is very specific. It is not based upon emissions
factors developed through stack testing. It is based upon actual measurement of mereury in and
mercury out. According to Mr.
McRanie, the minute levels of mercury that must be measured
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for this rule simply cannot be accurately measured. They are less than the trace level of the
measurement devices.
Mr. McRanie very carefully distinguished between detecting mercury and measuring
mercury. C
Tr., pp. 1724-2715, 1728-1729 (August 22,2006, p.m.) Mr. McRanie pointed out
that the precision and accuracy of measuring mercury at the levels required by the proposed rule
are unknown because such data do not exist. C Tr., pp. 1724-1725 (August 22, 2006, p.m.); Ex.
133, slide 6. Part 75, the applicable federal monitoring rules, allow F1.O
@n3 error in
calibrating the measurement instruments. Ex. 133, slide
6. This allowable measurement
inaccuracy is greater than the emissions standard of 0.0080
lb/GWh or 0.80 pg/m3 (Ex. 133. slide
2) included in the rule. Moreover, Mr. McRanie says that based on field observations, the
precision of mercury measurement is actually more in the range of
F 0.5 pg/m3. In other words,
if the true value of mercury emissions were 0.80
pg/m3, tbe mercury continuous emissions
monitoring systems ("CEMS") might read anywhere between 0.3 and 1.3
@m3, and this
assumes that
there is no calibration error. If there is a calibration error as allowed by the Part 75
rules, then additional measurement error is introduced. Comparing test results of Mr.
McRanie's
mercury analyzers operated during their best month confirm that the measurement precision does
not support a rule of the stringency proposed by the Agency. C Tr., p. 1692 (August 22,2006.
p m.): Ex.
133. slide 16. Moreover, the Part 75 monitoring regulations incorporated into this
proposal by reference also allow a Relative Accuracy Test Audit ("RATA") test. conducted with
USEPA's Reference Method, to be passed if the CEMS results are within F1.O &m3 of the
Reference Method RATA test results. This means that the best estimate of mercury
measurement error using
USEPA's Reference Method is il.O &m3. It is not technically
feasible to expect the mercury CEMS to be any more accurate than the Reference Method.
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There are several problems inherent with utilizing monitoring provisions developed for a
cap and trade program, 40 CFR Part 75, for a command and control regulation. First, if the
monitoring is inaccurate, imprecise, or biased, the worst result in a cap and trade program is that
some sources have to buy more allowances than they actually needed, and some would have
more excess allowances, or have to buy fewer, than would have been necessary with accurate
measurement. In a command and control program, however, that inaccuracy can lead to civil
and criminal penalties, a problem the Agency presented no answer for.
A second problem arises from the missing data substitution provisions of Part
75. These
Sederal regulations target 100% data capture and impose increasingly draconian substitute data
requirement where actual data is not available. 40 CFR
5
75.33. This has been typical of cap
and trade programs, which, for instance, encourage sources to install redundant monitors for
SO*
controls. The missing data substitution provisions, intentionally, are designed to almost
invariably yield a result higher than
actually occurred. As Mr. McRanie pointed out, USEPA
long ago determined that missing data substitution is inappropriate for a hard cap, a command
and control regulation, and
specitically excluded it in USEPA's Kew Source Performance
Standards.
Ex. 132, pp. 3, 35-36. Again, in a cap and trade program missing data substitution
will create
a requirement to buy more allowances than the source in reality needed, but in a
command and control program that missing data substitution will create violations where none
exist, potentially imposing civil and criminal penalties where none were appropriate. The
Agency has done nothing to address this problem.
Finally, there is the problem of determining percent reduction which requires accurate
measurement of the mercury
in the coal and accurate measurement of the mercury leaving the
stack. As already demonstrated, the CEMS measuring the amount of mercury leaving the stack
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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arc not accurate. Mr. McRanie pointed out a number of problems with the proposed method for
determining the input mercury, the amount of mercury in the coal burned, and especially
problems with the coal sampling requirements in the proposal. Ex. 132,
pp. 36-37. He notes
particularly that Part 75 provides a formula for determining
the pounds of mercury in the
emissions, but the Agency's proposal, while providing for collecting various data from coal
samples, provides no methodology and no formula for calculating the amount of input mercury.
Ex. 132, p. 37.
The inaccuracies of the CEMS and the imprecision of the approach to coal sampling and
analysis will seriously compound themselves, yielding totally unreliable results. Even if both
input and output could be accurately measured, because one, coal content, is measured on a daily
basis from a single grab sample while output is determined from a CEMS, that could distort the
results. For instance, if the single daily two-pound grab sample
-
large plants can burn several
thousand
tons
of coal per day
-
yielded a lower than actual mercury content, proving 90%
removal might be difficult, even thought the source may be achieving that result in reality, and
the opposite, a high input result, might show compliance that was not actually being achieved.
And again, in a command and control approach, these problems can yield violations where none
in fact exist. And still again, the Agency has done nothing to address these problems.
As with the control technology. the mercury monitoring technology is also evolving.
Ex.
133. slide 9; C Tr., pp. 1696, 1709-171 1 (August 22. 2006. p.m.) Currently. mercury monitors
experience downtime of 50-70% (C Tr., p. 1695 (August 22,2006,
p m.)), leaving monitor
operating time far short
ofthe 100% data capture time targeted at 40 CFR 5 75.33, which
provides for increasingly
morc stringent missing data substitution as more monitoring downtime
occurs Mr.
McRanie believes that mercury monitors will improve, but he claims that thc
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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obvious problems have been addressed and addressing the remaining problems will be more
difficult absent a breakthrough in the technology. C Tr.,
pp. 1695-1696 (August 22,2006, p.m.)
Mr. McRanie described mercury as sticky, a characteristic new to monitoring emissions.
C Tr.,
pp. 1969. 171
1 (August 22, 2006, p.m.) Measuring mercury, as Mr. McRanie's testimony
demonstrates, is far more complex than measuring
NOx or SO2.
Mr. McRanie stated without hesitation that the long averaging time of the Illinois rule
(i
e
,
the 12-month rolling average) does not eliminate the problems currently inherent in
mercury control, not only because of the removal technology itself, but also because of the
limitations of the monitoring technology. C Tr.
p. 1697 (August 22, 2006, p.m.); Ex. 133, slide
10. Poor reliability of mercury CEMS could make compliance mathematically impossible. C
Tr., p. 1698 (August 22,2006, p.m.); Ex. 133. slides 10, 12.
Mr. McRanie's Slide 12 of Exhibit
133 illustrates that a
unit would have to operate at a level of 0.60 yg/m3 in order to comply with
a limitation of 0.80
yg/m3. C Tr.. p. 1698 (August 22, 2006, p.m.): Ex. 133, slide 12.
Mr. McRanie provided charts of mercury measurements at the Trimblc County Plant of
Louisville Gas
&
Electric, Trimble County. Kentucky, that demonstrate the unpredictable
variability of mercury measurements.
See
Ex. 133, pp. 13-14: C Tr., p. 1705 (August 22,2006,
p.m.) Mr. McRanie testified that the calibrated analyzers do not read the same, and there is
currently not enough information about calibrators to understand why they measure so
differently or show spikes at random. C Tr. pp. 1698-1700 (August 22,2006, p.m.)
Mr. McRanie's final points
rrom his presentation bear repeating:
e
To My Knowledge, A Successful, Complete, 9-run, Hg
Relative Accuracy Test Audit (RATA), as Specified In 40
CFR Part 75. Has
Never
Been Done
a
'The Hg RATA Reference Method Has A Precision Of
34% At 3
~icro&rains/m~
-
Or
i
1 ~icrogramlm~
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By Definition, It Is Impossible To Make Measurements More
Precise Than The Reference Method
Ex.
133. slide 17; C Tr., p. 1700 (August 22.2006, p.m.) (Emphasis in original.) If compliance
cannot be measured, as Mr.
McRanie has demonstrated, the rule is not technically feasible.
3.
The inabilitv to measure mercurv removal violates the Due Process
Clause of the Constitution.
Because mercury cannot be measured with sufficient accuracy to determine compliance
with or violation of the rule, the proposed rule fails to provide adequate or fair notice as required
by the Due Process Clause of the Constitution. A regulation imposing binding legal obligations
must provide fair notice of those obligations to the party being
regulated.23 An agency has fairly
notified a regulated entity of its obligations only if, by reviewing the regulations and other public
statements issued by the agency, the entity would be able to identify
with "ascertainable
certainty" the conduct to which it must conform.
General Electric Co:,
53 F.3d at 1329. In fact,
whether a regulated entity has fair notice is determined "with reference to what [a company]
familiar with the industry could reasonably be expected to know."
Ohio Cast Prods.
v.
OSHRC,
246 F.3d 791, 799 (6th Cir. 2001).
As discussed above, the monitoring technology required by the proposed rule is not
accurate enough for a company to know whether
a unit is in compliance or not. Therefore, a
regulated company cannot know, and therefore does not have notice, whether its
en~issions
comply with the proposed rule. Accordingly, the proposed rule is invalid because it fails to
provide adequate notice of what is compliant with the rule
23
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);
UnitedStaies.
v.
Chrysler Corp.,
158
F.3d 1350, 1355 (D.C. Cir. 1998);
UniledStates
v.
floechst Celanese Chrp.,
128 F.3d 216, 224
(4th Cir. 1997);
Diamond Roo$ng Co.
v.
OSHRC,
528 F.2d 645,649 (5th Cir. 1976);
Phelps
Dodge Corp.
v.
FMSHRC,
681 F.2d 1189, 1193 (9th Cir. 1982).
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4.
The Board should proceed cautiously.
Mr. DePriest and the company representatives (Mr. Menne, Mr. Ingram, Mr. Saladino,
Mr. Yaros, and Ms. Tickner) all recommended that the Board proceed with caution with a
mercury control requirement, though they did this in different ways.
Mr. DePriest, with many years' personal experience as well as Sargent
&
Lundy's
institutional knowledge: expressed concerns about the reliability of the mercury-specific control
technology and the availability of control equipment, in terms of materials and labor, where
companies are not confident that the mercury-specific control technology will yield reliable and
consistent compliance. Based upon Sargent
&
Lundy's experience, Mr. DePriest expressed
concern regarding the ability of current ESPs to accept additional loading of carbon and still
maintain compliance with PM and opacity limitations. C Tr.,
p. 1080 (August 17,2006, a.m.)
While Mr. Nelson continuously testified through his questions of Mr. DePriest and Mr.
Cichanowicz that there is considerable variability on an ongoing basis in the PM loading to ESPs
(C Tr., pp. 584-587 (August 16,2006, a.m.); C Tr., pp. 1184-1186 (August 18,2006, a.m.)), both
Mr. DePriest and Mr. Cichanowicz remained concerned regarding the impact of the additional
loading to the ESPs of carbon on PM and opacity compliance (C
Tr., pp. 587-589 (August 16,
2006, a.m.); C Tr.,
pp. 11 14-1 117, 1191 (August 18,2006, a.m.) Mr. Cichanowicz was
concerned with the characteristics of the activated carbon because it is significantly different
from the carbon in the ash loading typically handled by ESPs.
C
Tr., p. 593 (August 16,2006,
a.m.) Mr. DePriest is concerned with the fact that the ESPs were designed for use with
bituminous coal, but most of the. Illinois EGUs switched to low sulfur PPRB coal in order to
comply with
SO2 limitations for attainment purposes or with the Acid Rain Program. C Tr., pp.
1156-1 157 (August 18,2006, a.m.)
Mr. DePriest says there is not much margin left in the ESPs
to take on additional particulate loading.
C Tr., p. 1159 (August 18,2006, a.m.)
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Mr. Menne and Mr. Ingram expressed caution in a different way. They joined with the
Agency in proposing a significant amendment to the rule, the MPS. Mr.
Menne's testimony very
poignantly demonstrated the concern of all the companies regarding their ability to comply with
the rule. Given the ongoing mercury removal technology problems and uncertainties,
Ameren
and Dynegy were willing to expend additional sums of money and to forego emissions trading in
order to secure additional time to comply with the mercury rule.
Mr. Yaros and Mr. Saladino of
DominiodKincaid stated that Dominion had systemwide
plans for compliance with the CAIR, plans that did not rely upon emissions trading outside their
own multi-state system of power stations. C Tr. pp. 1819-1820, 1865-1866 (August 23,2006,
a.m.) However, the Illinois mercury proposal upsets those plans in a major way.
DominionIKincaid will not tolerate noncompliance and so will do whatever it must to comply
with the rule. C Tr., pp. 1818-1819, 1871-1872 (August 23,2006, a.m.) Compliance will
require the expenditure of
$8.6 million annually (C Tr., p. 1848 (August 23, 2006, a.m.)) just for
sorbent at the Kincaid Generating Station, taking up about half of Kincaid's net
income.24
Kincaid's need for caution
-
and its lack of other opportunities for flexibility
-
will place the
generating station
in a very precarious economic position.
Ms. Tickner presented a different side of the concerns with this rule. Prairie State
Generating Station is a greenfield plant. The appeal of its PSD permit by American Bottoms
Conservancy,
et ai.,
has just been denied by USEPA's Environmental Appeals Board. Order, in
re: Prairie Stute Generating Company, PSD Permit No. 189808AAB,
PSD Appeal No. 05-05
(Environmental Appeals Board, August 24,2006) (denying review). Without suggesting that
24
Mr. Saladino testified that the net income of the Kincaid Generating Station is $16.9
million. C Tr., p. 1848 (August
23.2006. a.m.) While this may seem likc a large amount of
money. in fact it is not.
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Peabody Energy, owner of Prairie State Generating Station, is not concerned about compliance.
those most expressing caution with respect to Prairie State are its financiers. C Tr.,
p.
445
(August
15.2006,
p.m.) Without guarantees from vendors that the Prairie State Station will be
able to comply with the Illinois mercury rule, financing becomes more difficult.
C Tr., pp.
468-
469
(August
15,2006,
p.m.) Financiers are very cautious about providing funding for a project
that may not be able to operate because it may not be able to comply with all applicable
requirements. The unwillingness of sorbent vendors to provide guarantees at the
90%
removal
level
for existing units as well is further evidence of the fact that a
90%
level of reduction is
simply not proven at this point in time.
C
Tr., pp. 11
16-1 117
(August
18, 2006,
a.m.)
C.
Midwest Generation Recommends That the Board Not Adopt the Rule as
Proposed.
Because the rule is not technically feasible, one of the statutory requirements for
a
rulemaking under Section
27
of the Act, the Board should not adopt the rule, at least as proposed.
The Agency has not demonstrated that a reduction level of
90%
is technically feasible. The
Agency's willingness to join in the proposed amendments to the rule,
i.e.,
the TTBS and the
MPS. signal the Agency's willingness to accept
a rule that is less stringent than the original
proposal. Midwest Generation recommends that the Board adopt nothing, allowing the CAMR
to apply by operation of law or adopt the CAMR by reference.
If the Board feels absolutely
compelled to adopt a technology-based rule. it should be one that is reflective of the MPS but
without any additional requirements for
HS ESPs, without any specific removal rate or emissions
limitation, and without inclusion of any provisions relating to
NOx and SO?.
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111.
THE RULE
1s
NOT ECONOMICALLY REASONABLE.
Section 27 of the Act requires that the Board, in adopting rules, determine the -'economic
reasonableness" of measuring or reducing any pollutant. The burden of proof is on the
proponent, here the Agency, to demonstrate economic reasonableness. The Act does not define
"economic reasonableness" and a review of Board and judicial decisions provides no succinct
definition, hut the Board has consistently recognized this requirement in its
rulemaking
decisions. Clearly the General Assembly, in imposing the requirement, concluded there must he
some test of'the economic efficacy of any environmental regulation, that a regulation for the sake
of regulation
-
that merely because a regulation may arguably address an environmental issue
-
is not, in itself. sufficient to meet this statutory test. The courts have concurred, finding that the
record in a rulemaking must support the conclusion that a rule is economically reasonable for a
"substantial number of the individual sources in this state to comply
by the specified deadline."
Commonwealth Edzson
at
282.
Thus, the General Assembly intended some kind of comparison between the
environmental and other benefits and the economic and other costs of a regulation. How
rigorous, how quantitative this kind of
costtbenefit comparison must be, the General Assembly
d~d
not explicate. Here, however, defining the rigorousness of that comparison is probably
unnecessary because the Agency has failed to show any real, quantified
-
or even quantifiable
-
benefits, and the meager and largely speculative qualitative benefits the Agency tried to establish
are so overwhelmed by the realistic costs of the proposed regulation" that the only plausible
25
The Agency, in the course of this proceeding, first added the TTBS, contending it
added flexibility to the rule. but it, in fact, has
limited applicability and, at most, only delays the
costs. In fact, the TTBS apparently was so insufficiently helpful to at least half the plants in the
state
-
Ameren's and Dynegy's -that, with the Agency's concurrence, those companies
supported the MPS. That provision also may only delay incursion of the costs and, in fact, may
increase them as discussed below.
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conclusion is that proposed rule, including the TTBS and MPS, fails any rational test of
"economic reasonableness."
A.
There Are No Quantifiable, or Even Reasonably Discernible Qualitative
Benefits from the Proposed Regulation to Support
Promul~ation.
The Agency has established no benefits accruing to the targeted population or the
environment in its support of this proposal. The lack of benefits resulting from the proposal can
lead to only one conclusion: the rule is not economically
reasonable.
1.
The Agencv failed to demonstrate anv measurable health benefits
from the proposed regulation.
As discussed in more detail in Section IV of these Comments, there will be no
measurable or even discernablc health benefits from the incremental emission reductions to be
obtained by the proposed regulation beyond the reductions to be obtained under the federal
CAMR. There is no dispute that mercury, consumed in fish or seafood in the form of
methylmercury at high enough levels can be a health risk for certain sensitive portions of the
population: women of child bearing age and children. For the incremental reduction in mercury
emissions to have any health benefit, each of the following steps must occur: the reduced
einission would have reached an Illinois waterbody; that waterway would have the right
chemistry to convert this small, incremental amount of mercury to an incremental amount of
methylmercury; that waterbody has the necessary biota for the incremental methylmercury to
move up the biological chain to predator, sport fish; that fish has to be caught by a fisherman;
that fish has to be consumed by a member of the sensitive population and has to contain alone, or
in combination with other fish consumed by that person, sufficient methylmercury to actually
pose a health risk. Had the Agency done any rigorous, probability analysis, even taking account
of the
earlier timing of the reduction under the proposed regulation, obviously, any benefit would
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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be so small, so improbable, as to be equivalent to zero compared to CAMR in the relatively short
time there is even any difference between CAMR and the proposal.
If we do not limit the consideration to Illinois waterbodies, the already immeasurably
small
becomes even more infinitesimal. As shown in the Record. of total atmospheric loading of
mercury worldwide. about 1% comes from U.S. power plants.
Ex. 126, p. 3; C Tr., p. 1488
(August 21, 2006.
p.m.) The amount from Illinois power plants is obviously significantly less
than 1%. Taking that less than 1% and the incremental reduction the proposed rule may produce
and applying the same probability analysis as outlined above (although at least here some of the
mercury in question
might reach the fish that people actually consume, ocean fish), the result
would again be too tiny to measure
-
effectively zero.
2.
The Agencv has failed to establish any non-health benefits from the
proposed regulation to support promulgation.
The Agency contended in the TSD (p. 189) that there are "recognized benefits" to the
state from mercury control, although the Agency never established -'recognized by whom or
what these recognized benefits are.
The TSD suggests the proposed regulation will support
"existing jobs," yet the Agency's
own evidence established that the proposal would increase costs for Illinois power generation
companies, making them less competitive in interstate sales and thereby
more likely to reduce
rather than support existing jobs. Ex.
51, pp. 7-8.
The Agency also argues in the TSD that the proposal has a "potential" for adding "new
jobs resulting from the installation and operating requirements" of the new control devices.
TSD, p. 189. Simply stated, the potential jobs are a cost, certainly to the companies, and not
benefits. Jobs from installation of the activated carbon injection systems are temporary at any
given site. The equipinent is allegedly so simple to operate, according to the Agency, that to
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suggest there would be additional plant jobs as a result of this rule is not only wrong but also
disingenuous. At most, the effect on costs and benefits is a wash, and to the extent this increases
the companies' costs and thereby reduces sales, the impact on the companies' income, tax
payments, jobs, and so forth will be adverse.
Finally, the Agency contends there is "potential" for an increase in tourism and
recreational fishing as mercury levels drop in fish. To call this
pure speculation would give
"speculation" a bad name. First, as demonstrated in Section
IV of these Comments, the Agency
has failed to establish that the proposal will actually result in a reduction in the mercury content
of fish in Illinois. Even
if we were to assume some reduction will occur, there is uttcriy no
evidence that even hints that any fisherman
-
or hunter or bird watcher
-
would consider this in
determining where to expend
hisher recreational dollars.
In fact, the record contradicts the Agency's speculative "potential." Thomas Homshaw
indicated he was about to leave on a fishing trip in Michigan.
S Tr., pp. 85-86 (June 16,2006,
p.m.) When asked if he considered the mercury content in the fish in Michigan before deciding
to go on the trip, he indicated that he did not.
S. Tr., p. 86 (June 16.2006. p.m.) Thus the only
avowed fisherman to testify, a witness for the Agency, indicated that mercury in fish is simply
not part of his calculus in determining where to expend his recreational dollars. There is no
evidence to support the Agency's speculative potential that any other
recreationalist would think
differently.
'I
hus, the Agency has failed to prove that the proposal will produce any non-health
benefits.
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3.
Regulation without benefit is merely regulation for the sake of
regulation and is not
economicallv reasonable.
Throughout the hearing, the concept was often posed, sometimes in questions of
witnesses and sometimes in statements by witnesses, to the effect that recognizing mercury, at
least under certain
circumstances, can pose a risk; therefore. isn't it better to regulate than not to.
Simply stated, under the Illinois Act, the answer is "No." If the regulations fail to yield any
benefit at least commensurate with the cost, then it is regulation for the sake of regulation and
fails the statutory test of "economic reasonableness."
Here the benefits, health and non-health, claimed by the Agency for the proposal are
either so minute as to be immeasurable or so speculative and unsupported by any relevant
evidence, as to be virtually non-existent. Thus. unless the costs are
de minimis,
and as is shown
below the costs are not, then the proposal is economically unreasonable.
B.
The Necessaw Costs of Compliance with the Proposed Re~ulation
Demonstrate That It Is Economically Unreasonable.
The primary costs that would be incurred if the proposal is adopted are the costs for the
control equipment and the costs of operating that equipment. There is only a limited dispute as
to the costs
of various mercury control equipment; the dispute is what control equipment will be
necessary to provide reasonable assurance of compliance. The Agency's position is
that HCI
alone is demonstrated to be effective to achieve compliance with the
reductionlemission rate
requirements of the proposals. The opponent's position is that. while HCI is promising
and will
control mercury emissions to some level, the technology has not been demonstrated to be
reliably able over the
long-term to consistently meet the very tight command requirements of the
proposal.
The technological feasibility of the proposal is discussed in Section
11. above; here it is
important to recognize that the risks to the Agency and to affected industry from reaching the
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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wrong technological conclusion are very different. If the Agency's assertion that I-ICI will be
sufficientz6 is wrong, it risks
-
nothing! If the companies were to accept the Agency's assertion
and install only
EIC1 and the Agency's assertion is wrong, the companies risk
-
criminal and civil
enforcement actions by the
Agencq- and USEPA, citizens' suits, possible penalties, and even
shut-down orders. This significant difference in risk is certainly one reason the companies
must
be inore cautious than the Agency in reaching a conclusion as to what technology will be
necessary to have reasonable confidence of achieving the limits.
Probably nothing is more illustrative of the cautionary approach the sources must take
than the testimony of Mr. Menne on behalf of Ameren and in support of the proposal with the
MPS. Mr. Menne stated:
to get the comfort level that we would achieve 90 percent on all
units, we would put on what we think is the maximum
amount of
controls that exist today to try and get to that level, which would
either be a combination of scrubbers and
SCRs in each unit or ACI
in combination with fabric filters or baghouses.
C Tr., pp.
257-258 (August 15,2006, a.m.). Mr. Marchetti testified similarly. See C Tr., p. 1298
(August 18,2006, p.m.).
Thus, a major difference in the economic analysis between the Agency and others is the
assumption as to what control equipment will need to be installed. Because of the command
nature of the proposal and its 2009 deadline; the analysis was somewhat complicated by trying to
deal with
urhat technology would have been installed for CAIR and that might be accelerated for
the 2009 deadline. Ultimately, however, the similarity between Dr. Smith's and Mr.
Marchetti's
analyses compared to the Agency's illustrates that the primary difference is in what technology
will be installed for compliance.
26 All the parties agree that HCI alone will not be sufficient for the three units with HS
ESPs.
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The economic analysis of the risk-free Agency seems, comparing the ICF Resources Inc.
analysis in
thc TSD (pp. 167 et seq.) and Ezra Hausman's testimony (S Tr., pp. 274-291 (June
22,2006), 292-447 (June 23.2006)) somewhat inconsistent but apparently concludes that the
proposal will cost $32
nlillion per year more than CAMR in 2010 through 2017. TSD, p. 159.
As discussed above, there is no specific definition of economic reasonableness, no "bright line"
where "x" costs versus "y" benefits determines
economic reasonableness. Even if such
definition or ratio existed, the total failure of the Agency to even attempt to develop any
quantification of the benefits demonstrates that any benefits are so miniscule as to fail to justify a
cost of even $32
nlillion annually more than CAMR, or $224 million over the identified time
period. Furthermore. because of trading under CAMR and the use of CAIR co-benefits, the costs
for CAMR are spread more evenly over the period, while the costs for
thc proposal are "front-
end loaded." As discussed below, most of the costs under the proposal would be incurred by
2009.
Of course, the Agency's cost estimate is a grotesque underestimate of the costs the
regulation will, in reality, impose. The record established, and as discussed above.
sources
facing criminal and civil violations, simply cannot
-
will not
-
take the risk that HCI will be
sufficient to meet the draconian "command and timetable of the regulation. Significantly, the
analyses of both Dr. Smith and Mr. Marchetti are far more similar to each other than to the
Agency's analysis;
both show the capital cost alone of the regulation will bc over $1 billion Enore
than CAIWCAMR
Mr Marchetti, based on the technology and timing of installation that would be necessary
to provide some reasonable assurance that the sources could achieve compliance, concluded that
the capital costs alone would be $1.77 billion. Ex. 118, p. 7; C Tr., p. 1298 (August 18,2006.
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p.m.) Adding non-capital costs. Mr. Marchetti found that the regulation would cost Illinois
generators about $2 billion or
about $200 million per year for ten years "over and above what
Illinois generators would pay for CAIR and CAMR." C Tr., p. 1301 (August
18, 2006, p.m.);
Ex. 11 8, p. 11. With the absence of quantified benefits, even giving some credit to the
spcculativc, qualitative benefits alleged by the Agency, there is no way this regulation can pass
any rational test of economic reasonableness.
Dr.
Smith, testifying on behalf of Ameren in support of the regulation with the inclusion
of the MPS, reaches a conclusion comparable to Mr. Marchetti's. In discussing her analysis of
costs, Dr. Smith indicated that under CAIWCAMR, Ameren would need to raise almost $200
million by 2010 and then stated, "I estimate that Ameren must raise over three times that amount
by 2009 under the
IL Rule -nearly $650 million in 2006 present value." Ex. 77, p. 11
."
In
other words, the proposal would impose on Ameren alone some $450 million more than
CAIWCAMR in capital costs and just by 2009.
Obviously, for all the Illinois
EGUs that amount would be even greater in total, and Dr.
Smith addressed this question in her testimony: "So
1 estimated the Illinois Rule w-ithout the
MPS provision would cost Illinois generators about $1.13 billion dollars more than
CAIRICAMR.
. . .
[Tlhis cost is the present value to all the costs of the generators between 2006
and
2020." C Tr., pp. 398-399 (August 15,2006, p.m.) And, as with Ameren, most of the
capital would have to be raised by 2009. Dr. Smith and Mr. Marchetti were using somewhat
different time periods and calculi, but clearly whether the proposal costs $2 billion or "only"
$1.13 billion and annually about $200 million or
about $81 million, there are no benefits
demonstrated in the record that make such costs economically reasonable.
27
The tinling of the need to raise the necessary capital was a major concern to Ameren
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Nor do the so-called flexibility provisions, the TTBS or the IMPS, alter this conclusion.
First, the Agency alone advanced the TTBS but presented no evidence as to its impact on costs
(or, for that matter, benefits). The TTBS by its terms can be utilized by essentially no
morc than
one-quarter of the Illinois
generators28 and, for any sources that can and do utilize it, the effect
would merely postpone some of the costs without significantly changing them.
As to the MPS, Dr. Smith did analyze the impact on costs if only Ameren were to elect to
utilize the
MPS. She concluded that the present value of the costs of the proposal under those
circumstances would actually increase to $1.35 billion, about $96 million per year. C
Tr., p. 400
(August 15, 2006,
p.m.);
andsee
Ex. 77, p. 12, Figure 4. Logically, if more sources than just
Ameren
were to elect to comply with the MPS, the costs of the regulation would increase further.
This raises an interesting question
-
why is Ameren supporting the MPS if it costs more?
For individual companies, economics is not only the amount but often the timing of the amount.
As Dr. Smith pointed out:
The investment requirements of the
CAIRICAMR rule alone
present financing challenges to electricity generating companies
nationwide, and the
IL Rule adds a yet larger burden, and in a
foreshortened period of time. There are substantial benefits to
companies if they can spread the capital costs over a longer period
of time.
Ex.
77, p. 10. This illustrates, in addition to the absolute costs, another aspect of the economic
unreasonableness of the proposal: the need for the regulated entities to raise and expend in an
incredibly foreshortened period
of time huge amounts of capital. Not only is there an extreme
difference between the costs of CAMR and the Illinois proposal, but the economic impact is
aggravated by
the forced timing of the expenditure.
The TTBS is limited to 25% of a company's generating capacity or 25% of
the
combined capacity of the "orphans." See discussion in Section II.A.3.c. above.
-58-
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C.
As the Proposed Rule Is Not Economically Reasonable, Adoption Would Be
Arbitrarv and Capricious.
Even on the assumptions made by the risk-free Agency, the cost of $32 million per year
is unjustified by any benefits established in this Record for the proposal. Clearly, on any of the
far more probable actual costs analyses of Dr. Smith and Mr. Marchetti
-
whether $8 1 million,
$96 million or $200 million per year -the costs of this proposal are so grossly disproportionate
to
even all of the speculative or poter~tial benefits alleged, the proposal cannot be found to meet
the statutory requirement of economic reasonableness and promulgation of the regulation. at
least as currently proposed to the Board, would be arbitrary and capricious.
1V.
THE RULE DOES NOT ACCOMPLISH THE AGENCY'S STATED PURPOSE
FOR PROPOSING THE RULE.
The Agency has stated that its purpose for proposing the mercury rule was to address
three issues:
(I) to comply with the emission cap imposed by the CAMR, (2) to protect the
health of Illinois citizens, and (3) to satisfy the requirement that lllinois develop and implement a
TMDL program addressing mercury for mercury-impaired waterbodies. TSD, pp. 26-27,97:
Statement of Reasons, p. 8; Ex. 8, pp. 3-5; S Tr., pp. 50-52 (June 14,2006). None of these goals
will be achieved by the proposed rule.
A.
The Rule Does Not Ensure That Illinois Will Comply with the Mercury
Emissions Cap Imposed bv the CAMR.
The initial impetus for a mercury rule was the CAMR. The CAMR requires that
emissions from Illinois' coal-fired pow-er plants greater than 25
MWe not exceed 1.594 tons per
year during 2010-2017 and 0.629 ton per year in 2018 and thereafter. 40 CFR
5 60.24(h)(3); 70
Fed.Reg. at 28649.
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Throughout this rulemaking, the Agency has stated that USEPA supports state efforts to
comply with the CAMR cap other than through the trading program established in the CAMR at
40 CFR
60.Subpart HI<IXI-I and further that USEPA supports states seeking reductions more
stringent than required by the CAMR. Statement of Reasons, p. 10; TSD, pp. 89-90. This is an
exaggeration of what
USEPA has said. USEPA devised an elaborate trading system to address
mercury reductions nationwide. USEPA would not have devised that system and subjected itself
to intense criticism
(see comments in USEPA's Docket OAR-2002-0056) if it had intended for
states to meet their mercury caps in a manner other than through the national trading program.
What
USEPA does say on this point in several places in the Preamble to the CAMR, includes the
following:
States have the flexibility to meet these State budgets by
participating in
a trading program or establishing another
methodology for Hg emissions reductions from coal-fired electric
generating units.
. . .
States have the ability to require reductions
beyond those required by the State budget.
For States that elect not to participate in an EPA-managed
cap-
and-trade program, their respective State Hg budgets will serve as
a firm cap.
70
Fed.Reg. at, 28624.
[Elach State must submit a den~onstration that it will meet its
assigned Statewide emission budget.
. . .
70 Fed. Reg. at 28632.
Moreover, States remain authorized to require emissions
reductions beyond those required by the State budget, and
nothing in the final rule will preclude the States from requiring
such stricter controls and still being eligible to participate in the
Hg Budget Trading Program.
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70 Fed. Reg. at 28632. "[R]emain[ing] authorized" to comply with the emissions cap in a
manner other than participation in the national trading program and not being
"preclude[d]
from requiring
. . .
stricter controls" is hardly the enthusiastic support for alternative approaches
that the Agency intimated.
Finally, the actual rule at 40 CFR
S
96.60.24(h), which sets forth the elements of the state
submissions clearly assumes
-
and therefore, prefers
-
compliance through participation in the
trading program:
(6)(i) Notwithstanding the provisions of paragraphs (h)(3)
[en~issions caps for EGUs] and (5)(i) [legal authority] of this
section, if a State adopts regulations substantively identical to
subpart
HHHH of this part (Hg Budget Trading Program),
incorporates such subpart by reference into its regulations, or
adopts regulations that differ substantively from such subpart
only as set forth in
paragraph (h)(6)(ii) of this section [flexibility
in the allowance allocation methodology], then such allowance
system in the State's State plan is automatically approved as
meeting the requirements of paragraph
(h)(3) of this section.
. . .
(ii)
If a State adoats an allowance system that differs
substantively from
sibpart HHHH of this part only as follows,
then the emissions trading program is approved.
. . .
(7)
If a State adopts an allowance system that
differs
substantivelv from subpart HHHH of this part, other tban as set
forth
in paragraph (h)(6)(i) or (ii) of this section and will be
reviewed by the Administrator for approvability in accordance
with other provisions of paragraphs
(h)(2) through (5) of this
section and the other applicable requirements for a State plan
under this subpart, provided that the Hg allowances issued under
such allowance system shall not, and the State plan under
paragraph
(h)(l) of this section shall state that such Hg
allowances shall not, qualify as Hg allowances under any
allowances system approved under paragraph
(h)(6)(i) or (ii) of
this section.
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40 CFR 58 60.24(h)(6) and (7): 70 Fed.Reg. at 28650. (Emphasis added.) The Agency's
i~nplications regarding USEPA's receptivity of the program that the Agency has proposed are
overstated.
USEPA clearly prefers that states comply with the CAMR through the federal
trading
progsdm. USEPA's standard for approvability of a mercury reduction program such as
proposed by the Agency is
much higher than for those states that choose to comply through the
trading program.
When asked about the approvability of the
program, the Agency's answers were less than
satisfactory. Mr. Ross stated that discussions are ongoing with regard to the approvability of thc
Illinois approach. S Tr., pp. 116-1 17 (June 12, 2006); C Tr. pp. 308-309 (August 15, 2006, a.m.)
Midwest Generation recommends that the Board adopt the provisions of 40 CFR
60.Subpart HHHH by reference, as provided by 40 CFR
5
60.24(h)(6)(i), to ensure that the state
co~nplies with the CAMR, or adopt nothing to allow the federal CAMR to apply by operation of
law,
B.
The Agencv Has Not Demonstrated That the Proposed Rule Will Protect the
Health of Illinois Citizens or Eliminate Mercury-Impaired Waters to a
Degree Greater Than the CAMR.
The second purpose for this proposed rule is the protection of the health of Illinois'
citizens. The third and related purpose is the elimination of mercury-impaired waters in Illinois
and, thereby, the need for mercury
TMDLs in Illinois. In both cases, the goals are to be
achieved. in the Ageney's view, by requiring reductions of mercury emissions from Illinois
power plants beyond the reductions required under the CAMR.
If such additional emission
reductions do not achieve these goals, then the justification for mercury emission reductions
beyond CAMR fails.
Waters in Illinois designated impaired for mercury are so designated due to the presence
of fish containing methylmercury above Illinois fish consumption advisory levels.
S Tr., pp. 24-
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25 (June 14,2006). In the Agency's view, the presence of methylmercury in fish above fish
consumption advisory levels also creates the potential health issue that the Agency seeks to
address. Accordingly, both of these Agency goals assume that the proposed rule will decrease
fish tissue methylmercury levels enough to eliminate or at least reduce significantly
mercury-
impaired waters in Illinois and to provide a meaningful health benefit to Illinois residents.
There is a very attenuated relationship between the emissions of mercury by emissions
sources and
fish tissue ~nethylmercury concentrations. Mercury emissions may impact fish
tlssue methylmercury levels in a given body of Illinois water only if a number of events occur:
emissions in Illinois
+
deposition in Illinois waterbodies
3
settle into sediment
+
methylation
+
uptake through the food chain to predator fish (largemouth bass is the species that Illinois
uses as its representative fish for this purpose). Potential health impacts to Illinois citizens from
mercury emissions require additional steps: methylmercury tissue levels rise
abote a level of
conecm in a fish population
+
anglers catch such fish and do not release them, as required for
some fish in some waterbodies
+
Illinois citizens who are in the sensitive population eat such
fish in sufficient quantities to risk health effects. Accordingly, a reduction in mercury emissions
will provide the benefits the Agency claims only if such emission reductions transfer through this
entire series of steps, ultimately reducing fish tissue methylmercury concentrations in fish to
levels that eliminate a health risk to those who eat such fish that otherwise would have been
present.
As discussed below, the Agency has assumed its way through this chain of events.
providing conjecture rather than evidence to support its claimed benefits. The Agency has not
demonstrated that its goals will be achieved through compliance with the proposed rule.
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1.
The Agencv has not demonstrated that reductions of mercury
emissions at Illinois power plants will result in reductions in
deposition of mercury in Illinois, either in the vicinity of the power
plants or in those areas of the state with mercury-impaired
waterbodies.
Because one claimed justification of the rule is to protect the health of lllinois citizens
and a second is the elimination of mercury-impaired waters; in both cases through the reduction
of fish tissue methylmercury levels in Illinois, whether there is a local impact on such
methylmercury levels from power plant emissions of mercury is an important issue. Chemical
transport modeling, as Krish Vijayaraghavan calls it (C Tr.,
p. 1355 (August 21,2006, p.m.), or
deterministic modeling, as Jerry Keeler calls it (TSD
App. B; p. 4); is the tool for demonstrating
whether
mercury emissions from Illinois' power plants affect Illinois' waterbodies, which is the
first step in the chain of proofs that is necessary to determine whether human health and
mercury-impaired waters would be affected by reduction of Illinois power plant emissions of
mercury. If there is no local deposition or if local deposition is not to impaired waterbodies,
reducing the emissions will not have the desired effect.
The 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. In fact, the Agency canceled its contract with
Environ, who was performing
CAMx chemistry transport modeling to determine if there is
mercury deposition from Illinois power plants contributing to the impairment.
S Tr., pp. 477-
478,483-484 (June 23,2006). The Agency received preliminary results from Environ (Ex. 65),
did not like those results, and canceled the contract. S Tr., pp. 484-485 (June 23, 2006). If one
of the Agency's goals through this rulemaking is to reduce mercury deposition to mercury-
impaired waterbodies in order to protect the health of Illinois' citizens and eliminate mercury-
impaired waters, then the Agency must demonstrate
(1) that the target of the rule is the source of
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the perceived problem and (2) that the proposed rule will have the desired effect of reducing
deposition from Illinois power plants to Illinois waters. The Agency did not do this.
USEPA, on
the other hand, expended great effort in analyzing the effects of mercury deposition and the best
way to reduce such deposition relative to
EGUs, and determined that the regional approach of the
CAMR was the best approach.
See generally
70 Fed.Reg. 28606
el
seq
What the Agency did present was testimony by Dr. Keeler essentially about two studies
he performed, the Lake Michigan Mass Balance Study in 1994-1995
(see
Ex. 26) and the
Steubenville study, with some discussion of the Detroit study of 2005
(~ee
Ex. 27) and the
Florida study of 2002
(see
Ex. 20). None of these studies states whether Illinois' coal-fired
power plants contribute towards the impairment in Illinois' mercury-impaired waterbodies, and
none of them predicts whether the Illinois mercury rule will have an effect on the level of
impairment in Illinois' mercury-impaired waterbodies. Therefore, the Agency cannot know and
so cannot assert that the mercury
rule it has proposed will result in protection of the health of
Illinois' citizens.
According to Dr. Keeler, the Lake Michigan Mass Balance Study showed typical urban
contributions to atmospheric mercury levels over the Lake Michigan basin. TSD,
App. B, p. 4.
Dr. Keeler estimates that "the
urbanfsource area contributed almost 20% of the total deposition
to
Lake Michigan, and 14% to the wet deposition." TSD, App. B. p. 9. Moreover, mercury
levels in the urban area were significantly higher than in rural areas. TSD. App.
B, p. 4. Dr.
Keeler observed in the Detroit study that mobile sources contributed to urban mercury levels.
S
Tr., p. 22 (June 15. 2006). Logically, mobile sources contribute to mercury levels in the Chicago
area, as well.
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The two studies that Dr. Keeler relied upon in his testimony and that the Agency
particularly relied upon to support this proposal were the Steubenville study and the
FloridafEverglades study (Ex. 20). The Agency also relied upon the Massachusetts study. Ex.
21. The Steubenville study, the subject of much controversy in this rulemaking because the
Agency, through Dr. Keeler, relied upon it prior to completion of peer review and
publication.29
was a study specifically of wet deposition of mercury at Steubenville, Ohio, at the eastern end of
the Ohio River Valley in an area that is the home of many coal-fired power plants as well as
other types of industry. The Steubenville study concluded that approximately 70% of the
mercury captured at the receptor site was from "local" coal-fired power plants. S Tr.. pp. 57-58
(June 15,2006);
Ex. 32, slide 24.30 This was based on an analysis of other elements and
compounds monitored at the same time. S Tr., pp. 183-1 85 (June 15,2006). The primary
elements and compounds measured at Steubenville were sulfur, selenium, and
NO;, all of which
are indicative of coal-fired power plants.
S Tr. pp. 60-61 (June 16, 2006); Ex. 32, slide 19.
There is general agreement among the experts that the
divalent or oxidized form of
mercury, also known as reactive gaseous mercury and expressed as
EI~~~,
I-~g", or RGM, is the
form that methylates and thus is taken up in the food chain and that is deposited during
precipitation events.
C
f Ex. 127, slide 3; S Tr., pp. 23-24 (June 15,2006). There is also general
agreement
among the experts that the elemental form of mercury, expressed as ~g', is not the
form that methylates and is not so readily deposited during precipitation events.
C
f Ex. 127,
slide
3; S Tr., pp. 34-35 (June 15,2006). Moreover, there is general agreement that the form of
29
The peer-reviewed report. PC 6292, was finally provided on September 8,2006, two
and a half weeks after the hearings were adjourned.
30
The slides in the Powerpoint presentation comprising Exhibit 32 are not numbered.
We numbered them for purposes of reference, calling the title slide Slide
1.
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mercury emitted through the burning of PRB coal is mostly ~g', while the species of mercurq
emitted as a result of the burning of bituminous coal is mostly 13~~~.
S Tr., pp. 115-1 17 (June 15.
2006). It was made clear at the hearings that the vast majority of coal burned in Illinois is
PRB.
Mr. Menne testified that only approximately 16% of the coal that Ameren bums is bituminous.
C Tr., p. 171 (August 14,2006). According to Exhibit 44,
Ameren's EGUs without SO2
control3' comprise approximately 9% of the state's total MW. CWLP and SIPC, representing
together only approximately 4% of the statewide MW, bum bituminous coal. Ex. 44. Exhibit 44
indicates that approximately 15% of Dynegy's units, comprising 3% of the total MW in the state,
currently burn bituminous
coal.32 And that's it. Only 16% of the total MW in the state bum
bituminous coal. The species of mercury predominantly emitted by Illinois' power plants, then.
is
~g'.
Dr. Keeler was asked at hearing what type of coal was burned within what he defined as
the
"local"33 area of Steubenville. S Tr. p, 116 (June 15, 2006). Dr. Keeler said he did not know
and that it did not matter.
S Tr. pp. 115-1 16 (June 15,2006). Midwest Generation disagrees
with Dr. Keeler's conclusion. It certainly does matter what type of coal is burned, because the
3
1
Exhibit 44 includes SO2 as a sulfur control measure
32
Exhibit 44 does not identify the fact that Hennepin has bumed subbituminous coal
since 1999 and Vermilion since 2005. For purposes
ofthis discussion, however, these
Comments reflect the information contained in Exhibit 44.
33
Note that Dr. Keeler's definition of "locai" is not static and is not consistent with the
more usual definition of the word. Dr.
Kceler defines -'local" as the distance that an air mass
travels in a day.
S Tr., p. 140 (June 15, 2006). Air masses do not travel static distances per day;
therefore, the definition is not static, and the distance that is "local" one day is not likely to be
the same distance that comprises "local" on any other day. In contrast. the
dictionary defines
"local" as
"3.
pertaining to a city, town, or small district rather than an entire state or country:
lncul transportation."
Webster's New Universal Unabridged Dictionary (1996). In the NOx SIP
call context. "local" was closer in to a point, such as a nonattainment area or perhaps a small
state but less
tl~an the whole of a larger state.
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type of coal burned will influence the amount of mercury that is available for local deposition
during precipitation events. The Agency relied upon the preliminary results of the Steubenville
study to support its theory that emissions from Illinois' power plants impact Illinois'
waterbodies. particularly those that are mercury-impaired. The Steubenville study does not
support this hypothesis. The form of mercury primarily emitted by Illinois' power plants is
~g',
while that emitted in the vicinity of Steubenville is 11g2+, the form that is more readily deposited.
Secondly, except for the very southern-most tip of Illinois, Illinois is not influenced by the Ohio
River Valley, which featured strongly in the Steubenville analysis. Steubenville lies in a unique
geographical setting: at the eastern end of the Ohio River Valley with a mountain range to the
east affecting weather patterns. There is nothing about the Steubenville study that is transferable
to Illinois' circumstances.
With respect to the preliminary Steubenville results, there are several additional points.
First, the determinative or chemical transport modeling performed by
USEPA in the course of
the CAMR and by 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. C Tr., p. 1404 (August 21,2006. p.m.); Ex. 32, slides 25 and 26.
Second, Dr. Kecler stated that there were hurricane events that triggered large amounts of
precipitation in the Ohio River Valley during the course of the Steubenville study. S
Tr., pp. 9-
10 (June 16, 2006. a.m.) This may be reflected in the back trajectories presented in Exhibit 32,
slide 23.
See also
Ex. 32, slide 24 ("In 2004,
>
8% of Hg wet deposition occurred during 1
event"). Similarly, Peter Chapman examined mercury levels in sediment and fish relative to the
location of Illinois power plants and found no consistent relationship.
Ex. 129. p. 7; S Tr., pp. 4-
5, 47-48 (August 22, 2006, a.m.) If there were to be an impact on health resulting from
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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emissions from Illinois power plants, one would expect to it to be apparent in those lakes next to
the bituminous coal-fired plants. This just is not what is true in Illinois.
See Ex. 23.
The Agency ignored the Illinois data in its possession and relied upon the
FloriddEverglades study to support its position that local reductions of mercury will produce
local reductions of deposition. However, the Agency selectively reported the results of the
Florida/Everglades study. Contrary to the report in the TSD, only some of the monitoring sites
in the Florida study measured reductions in deposition. TSD,
5
5.2.1, pp. 81-85; S Tr., pp. 28-29
(June 15,2006); C Tr.
pp. 16,65 (August 22,2006. p.m.)34
To the extent the Florida study supports the view that reduction of emissions has an
impact on local deposition, the study is, nonetheless, largely irrelevant because, given the types
of sources and the nature of the environment at issue in the Florida study, there is no reason to
expect similar results in Illinois. The Agency's naked assumption that the results are transferable
does not make it so.
The sources in the area identified as contributors to mercury deposition in the Everglades
included coal-fired power plants. However, the greatest number of sources and those whose
mercury emissions were significantly reduced were various types of incinerators (or waste
combu~tors).'~ Factors that affect deposition of any pollutant include the type of source. its fuel,
and the physical configurations of that source. There are several very significant differences in
the case of incinerators. as compared to power plants.
34 The FloridaIEverglades study is discussed in more detail in the section of these
Comments below regarding the water quality aspects of the mercury chain.
35
So far as we know, there were no specific mercury reductions achieved at Florida
power plants unless it resulted from compliance with Title IV of the Clean Air Act (the Acid
Rain Program) or was in conjunction with
an ozone attainment program. Note that Florida
power plants were not subject to the
NOx SIP call and so were not required to reduce NOx more
than required
by Title IV.
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The fuel or substance burned in incinerators is extremely variable, while power plants
bum a more consistent form of fuel, coal. The velocity of the emissions exiting the stack of an
incinerator tend to be much less than that of power plants.
C l'r., p. 1472 (August 21, 2006,
p.m.) Incinerator stack heights are significantly shorter than power plant stack heights.
Ex. 126,
p. 16;
C Tr., p. 1469 (August 21,2006, p.m.) Mr Vijayaraghavan testified that incinerator
heights are less than 100 meters; the average municipal waste incinerator stack height is about 60
meters, and medical waste incinerator stacks are even shorter at less than 25 meters.
C Tr., p.
1471 (August 21,2006, p.m.) The shortest stack at an affected power plant in Illinois is
60
meters at Ameren's Hutsonville Power
EX. 28. Velocity and stack height impact the
altitude into the atmosphere that emissions will attain
-
plume rise. C Tr., pp. 1464-1465, 1471
(August 21, 2006, p.m.) Because incinerators' plume rise is lower than power plants'
plume rise,
incinerators are likely to have a greater impact on local areas. That is, the emissions from
incinerators are not as likely to be transported great distances, which has been demonstrated to be
the case with power plants.
C
f, Ex. 127, Slides 3 and 5. Therefore, it is not surprising that
reductions in emissions
from incinerators may have a beneficial impact on local areas.
In addition, the emissions from incinerators tend to have more
H~~+
than the emissions
from coal-fired power plants. Ex. 126, pp. 15-16. As Dr. Keeler's several studies have
demonstrated.
H~~+
is more readily deposited during precipitation events. See
also
Ex. 127. slide
3. 1 herefore. it is not surprising that reductions in emissions of ~g*+
from incinerators, wlth
then low plume rise, would have a beneficial impact on local areas.
36 We note that Hutsonville is a plant that would not receive any mercury controls. at
least in the near term, under the MPS, and yet if any plant is going to affect the local area, it is
this one. Only six other units have stack heights
less than 100 meters. One belongs to CWLP:
the rest belong to Amcren and Dynegy, with whom the Agency entered into Joint Statements
supporting the MPS.
See Ex. 28.
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The results of the FloridaIEverglades study are not transferable to Illinois for still another
reason. Illinois does not experience near the rainfall amounts that the Everglades does. Illinois
does not directly experience hurricanes. Illinois' impaired
w-aters do not in any way resemble the
Everglades in terms of area,
characteristics; vegetation, and any number of factors. And, as
discussed below in more detail, reductions of mercury emissions from Illinois power plants will
not have the
same result as reductions of mercury emissions from the incinerators in Florida.
When these numerous and significant differences are considered, clearly the deposition
pattern in the Florida study cannot be assumed for Illinois and, in fact, a different deposition
pattern for Illinois should be expected. Consistently, as discussed above, the Illinois data simply
does not show a pattern of local deposition and resulting increased levels of fish tissue mercury
in the vicinity of Illinois power plants
The power generation companies presented the only chemistry transport modeling of
predicted mercury deposition in Illinois by Illinois power plants. Exs. 126 and 127. As Mr.
Vijayaraghavan testified.
AER's model. called TEAM, has been evaluated against measured
levels of mercury collected by the Mercury
1)eposition Network and against speciated ambient
mercury concentrations. C Tr.. p. 1403 (August 21,2006, p.m.);
Ex. 127, slide 6. Both the
TEAM and
USEPA's model CMAQ results are consistent with the monitored results of the
Steubenville study. C Tr.. pp. 1404, 15 13 (August 21, 2006); Ex. 127, slides 6 and
9. AER has
updated the TEAM to reflect state-of-the-science knowledge regarding
tl~c oxidation and
reduction of mercury in the atmosphere. Ex. 126.
p. 8. TEAM's performance has been peer.
reviewed and published.
C Tr, p. 1354 (August 21,2006, p.m.> Ex. 127, slide 6. 'TEAM's
results correspond with USEPA's deterministic modeling ~lsing the CMAQ model. C Tr., p.
1355 (August 21,2006, p.m.) Dr. Keeler made the point that predictive models such as the
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TEAM and CMAQ are not accurate because they rely upon understanding the chemical
processes that occur in the atmosphere, while receptor modeling reflects
what is actually in the
atmosphere and cannot predict the future.
S Tr., pp. 167-169, 194,204 (June 15,2006). He
asserted that his approach, receptor
modeling, presents a more accurate picture of mercury
deposition.
S Tr.. pp. 167-169 (June 15, 2006). Both modelers, though, stated, either at hearing
or in exhibits to this
n~lemakiug, that their respective approaches are independent of each other
dnd complement each other. C Tr., pp. 1512-1513 (August 21,2006, p.m.); Ex. 32, slide 7. In
any event, scientists and agencies routinely use models because they are the best tool available
for predicting the effect of various emissions reduction levels on ambient air quality
measurements. For these reasons. the Board should consider
AER's modeling results in this
matter.
The area that AER modeled is illustrated by all of the maps in Ex. 127. It includes all of
Texas and portions of the states
to the north and west of Texas and east to the Atlantic Ocean.
The region extends from Maine to the Florida Keys. AER used
20k, grid cells in the modeled
area.
C Tr. p. 1359 (August 21, 2006, p.m.) The Agency attempted to attack AER's modeling
on the basis of grid size. However. as Mr. Vijayaraghavan explained. AER "applied a grid
model with 20 kilometer grid spacing because our objective was to assess
I-Ig deposition both
close to and far from emission sources."
C Tr., p. 1359 (August 21,2006, p.m.) National and
international conditions surrounding the modeled region are considered as boundary conditions.
C Tr., p. 1379 (August 21,2006. p.m.) The areas outside the modeled area were reflected
through larger grid cells than
Inside the modeled region. Global conditions were boundary
conditions for the larger grid.
See
Ex. 127, slide 5.
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AER found through its modeling that 19% of the mercury deposition in Illinois is
attributable to
4
power plants in the U.S. C Tr., pp. 1370-1371 (August 21, 2006, p.m.); Ex.
127, slide 14. The balance of mercury deposition in Illinois,
i.e.,
81%, is attributable to other
source types and non-U.S. power plants,
i.e.,
global sources. C Tr., p. 1372 (August 21, 2006,
p.m.) In 2010,
CAIRICAMR will result in approximately a 5% reduction in mercury deposition
in Illinois.
C Tr., p. 141 0 (August 21,2006, p.m.); Ex. 127, slide 14. Assuming no change
resulting from the
MPS, the Illinois mercury rule would result in approximately an additional 4%
reduction of mercury deposition in Illinois. C Tr., p. 1410 (August 21,2006, p.m.); Ex. 127,
slide 14. This projected 4% additional level of reduction beyond
CAIRICAMR is critical for
assessing the claimed benefits of the proposed Illinois rule because the Agency supports its
proposal by claiming that it will provide health
and impaired-water benefits beyond
CAIRICAMR. In other words, if the Illinois proposal provides no meaningful human health and
impaired-water benefits beyond
CAIIUCAMR, the Agency's claimed benefits are illusory and
the justification for the proposal fails.
Both Dr. Chapman and Gail
Charnley, asked about the significance of the 49/0 level of
reduction, asserted that it would not have the result that is the intent of this rule;
i.e.,
it would not
result in a measurable reduction in fish tissue methylmercury levels in Illinois and, therefore, it
would not cause the
removal of waterbodies in Illinois from the mercury-impaired list,37 and it
would not have an impact on the health of citizens in Illinois. C Tr, p. 12-15 (August 22,2006,
a.m.); C
Tr., p. 1660 (August 22, 2006, p.m.) Dr. Charnley stated that she did not believe that
37 The waters in Illinois that are designated impaired for mercury are so designated based
upon the presence of fish containing
mercury above fish tissue consumption advisory levels. See
S Tr.. pp. 24-25 (June 14,2006). Accordingly, if fish tissue mercury leveis do not decrease to
levels below fish consumption advisory levels, then impaired use designations are not
eliminated.
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the impacts could even be traced, and Dr. Chapman testified that the additional 4% reduction
would not have a measurable impact on fish tissue mercury levels in Illinois.
C Tr., p. 1660
(August 22,2006,
p.m.); Ex. 129, p. 11. When asked whether she believed that the impacts of
CAIRJCAMR could be traced, she indicated that they could not. C Tr., pp. 1671-1672 (August
22, 2006, p.m.) AER found that the difference in deposition between the Illinois mercury rule
and the 2020
CAIRICAMR reductions is less than 10%. Ex. 127, slide 24. AER also found that
there are no hot
spots.38
Midwest Generation presented a study that the Agency should have -the chemistry
transfer modeling study -that shows that the Illinois mercury rule will have virtually no impact
on mercury deposition levels in Illinois. With no impact on levels of deposition. the rule's
impact on improving mercury-impaired waterbodies and ultimately protecting public health are
so far attenuated as to be nonexistent.
2.
The Agency has not demonstrated that reductions of mercun,
emissions at Illinois power plants will result in improvement of
mercurv-impaired waterbodies or provide health benefits to Illinois
residents.
The Agency contends that a 90% mercury emission reduction rule is justified because
such a reduction will reduce mercury fish tissue concentrations to levels that will eliminate
mercury-impaired waters from Illinois and that will provide a health benefit to Illinois residents
beyond that provided by CAMR. The proposed rule will not accomplish these goals. The
proposed rule, if adopted, would not measurably reduce the levels of
mercury in fish in Illinois
waterbodies. Accordingly, the proposed rule would not eliminate mercury-impaired waters in
38 "Hot spots" are those areas in the vicinity of a source with elevated levels of a
contaminant. In this matter, the contaminant of concern, of course, is mercury. So when AER
concludes that there are no hot spots, it means that there are no elevated concentrations of
mercury predicted within the vicinity of any of the power plants under any scenario.
See C Tr.,.
pp. 1459-1461 (August 21,2006, p.m.)
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Illinois, nor would it protect Illinois' citizens from exposure to mercury through consumption of
fish beyond thc level of protection afforded by CAMR.
The Agency failed to meaningfully support, let alone establish, any such claimed
benefits. Indeed, the position of the Agency and its witnesses on the extent and nature of any
benefits from the rule seemed to change over time as the Agency was cross-examined regarding
its failures to
adcquately support its benefit claims. The Agency did not present evidence or
even a rational explanation of the nexus between its claimed benefits and
the proposed rule.
In contrast to the vast amount of analysis that
USEPA conducted to support the CAMR,
none of which can be relied upon for the Agency's proposal, the Agency has conducted
nonc of
the studies that should serve as the basis of a rulemaking such as this one to demonstrate that the
rule will produce the outcomes intended by the Agency. The Agency has not determined the
amount of any mercury deposition or fish tissue concentration reduction that would result from
the proposed rule, if adopted.
S. Tr., pp. 124, 166,302-304 (June 14,2006). The Agency did not
assess the extent to which Illinois residents eat Illinois freshwater fish or even the extent to
which Illinois fishermen eat the fish they catch. S Tr., pp. 71-73 (June 16, 2006); Ex.
9. p. 4.
Agency witnesses admitted that the Agency has not assessed the level of mercury deposition
from out-of-state sources nor attempted to assess the impact of non-point mercury discharges in
Illinois. S Tr., pp. 127. 134,248,268 (June 14,2006). The Agency admitted that the process
that results in methylmercury in fish tissue is highly complex and depends on a number
of Sactors
and that understanding the methylation process is necessary to determine the extent to which any
deposition reduction in Illinois would reduce
mercuq fish tissue levels in Illinois water. S Tr.,
pp. 41-43, 45-46 (June 14,2006).Yet, the Agency has wholly failed to assess Illinois waters for
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these factors and does not know what level of methylation occurs or would occur in Illinois
waters. S Tr.. pp. 42-44,302 (June 14,2006).
The Agency also ignored data in its possession that is relevant to whether reductions in
mercury emissions in Illinois would in fact reduce Illinois
fish tissue mcrcury lekels and
eliminate impaired waters. For instance, Dr. Homshaw testified that mercury fish tissue
concentrations in Illinois have remained essentially flat since
1988, a view shared by the Illinois
Department of Health. S Tr..
pp. 183-187 (June 14,2006). At the very least, this information
should have caused
the Agency to consider why it had seen no fish tissue mercury decrease in
light of almost 30 years of environmental regulation, including National Emissions Standards for
Hazardous Air Pollutants
(NESHAPS) that have reduced mercury emissions from waste
combustors and medical incinerators such as those that reduced mercury emissions in the
Massachusetts and Florida studies. Similarly, the Rock River is west of any power plant that
would he regulated under the proposed rule, and thus upwind most of the time.
S Tr., p. 32 (June
15,2006);
Ex. 129, p. 10: TSD, Figures 4.1 and 4.3. Yet the Agency seems to assume that the
Illinois power plant emissions somehow impact that river. The Agency also ignored non-point
sources of
mercury to Illinois waters and other point sources of mercury, such as combined
sewer overflows.
See Ex. 129, pp. 6-7. The Agency has failed to establish that Illinois fish
tissue mercury levels will go down as a result of the proposed rule, let alone that reductions
would be sufficient to eliminate mercury-impaired water designations in Illinois or provide a
health benefit to Illinois residents The Agency seems to ignore data inconsistent with its
speculation regarding possible benefits while failing to conduct adequate analyses.
Instead of conducting necessary assessments or studies, the Agency cherry-picks certain
results from two studies performed in other states (one in Massachusetts and one in Florida) and
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concludes that such results will also accrue in Illinois. The Agency ignores inconsistent data in
those studies that demonstrates that even
when significant mercury deposition reductions occur,
consistent mercury fish
tissuc reductions should not be expected. Further, even if data in those
studies supported the notion that mercury deposition reductions consistently reduced fish tissue
mercury in some of the waters at issue in those studies. the Agency failed to establish that
conditions in Illinois waters are similar to those waters that experienced fish tissue mercury
decreases and, therefore, that similar fish tissue mercury results should be expected. Indeed,
Marcia Willhite conceded that it would be very difficult to extrapolate results from one water
body to another given the
very site-specific nature of the complex methylation process, but that
is exactly what the Agency asks the Board to do.
S Tr., p. 46 (June 14.2006).
The Agency conceded that it has not assessed or studied Illinois waters for key attributes
or constituents that control methylation rates. such as sulfur content, let alone compared such
factors to the waters at issue in the Massachusetts and Florida study areas.
S
Trans., pp. 41-43,
203-205 (June 14,2006). Further, the Agency totally ignored the data in those studies that
showed no reduction or even an increase in fish tissue mercury levels following reductions in
mercury emissions. In the Massachusetts study area, at least two of the
lakes showed increases
in fish tissue mercury levels, and in the Florida study area about an equal number of water bodies
showed no change as showed decreases.
S. Tr.. pp. 210-21 1 (June 14,2006);
S
Tr. pp. 220-222
(June 14,2006: Ex. 20. pp. 81-82; Ex. 130. pp.
3-4. Further, in Massachusetts, where mercury
emissions were reduced 90% from
waste combustors and medical incinerators
-
sources of the
type that would be expected to have far more impact on local deposition, as discussed above
-
the state is still required to address impaired waters because the mercury emission reductions
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have not had the desired impact on fish tissue methylmercury levels. S Tr., p. 21 1 (June 14,
2006).
In short, in these studies, mercury deposition decreased very significantly, hut there was
no consistent reduction in fish tissue mercury, and mercury-impaired waters were not eliminated.
In fact, in some cases, fish tissue mercury levels increased. Such results do not support the
Agency's contention that a consistent, significant reduction in fish tissue mercury levels should
be expected from its proposed rule. Indeed. given that inconsistent fish tissue results occurred
when mercury deposition in the study areas apparently declined
by about 9096, it is unreasonable
and arbitrary to assume any consistent, measurable decrease
in mercury fish tissue levels due to
the proposed rule's projected 4% Illinois mercury deposition reduction, which was discussed
above.
The Agency also relies on some limited Illinois water quality and fish flesh data, which
falls far short of what is necessary to support a rulemaking. The Agency has fish tissue mercury
information for only about 1,000 miles of the about 71,000 miles of streams in Illinois and for
only eight of the more than 3,000 lakes in Illinois larger than six acres.
S Tr., pp. 106-108 (June
14,2006). Much of the data collected, including more than one third of the bass samples, were
reported non-detect for mercury, but the Agency assumes that mercury is present at the detect
limit, which just happens to correspond with the unlimited fish consumption advisory level.
S
Tr., pp. 158-159 (June 14, 2006); TSD, p. 63. As discussed above, the Agency completely failed
to augment this meager data, choosing to rely on unsupported assumptions rather than assessing
the Illinois water conditions needed to predict
methylation rates and studying other variables that
would impact the accuracy of its benefit claims, such as the impact of other sources on mercury
loading in
Illinois waters, including out-of-state sources. Dr. Chapman described this half-
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hearted effort at data collection as sparse. noting that with such insufficient data, the Agency and
the Board cannot have a good understanding of what is happening across Illinois. C Tr., pp.
17-
18 (August 22,2006, a.m.) The Agency's response was that it could not afford to do more than
has been done.
C Tr.. pp. 18-19 (August 22,2006, a.m.) While budget constraints may create a
need to prioritize expenditures, the claimed lack of Agency resources does not relieve the
Agency of its statutory burden to adequately support its proposed rule, a burden it has failed to
carry. Yet the Agency expects the companies affected by the rule to expend millions of dollars
in the Agency's estimate. billions of dollars according to the companies, to comply
with this
proposed rule. Moreover,
USEPA did perform an analysis based upon sufficient data and
adopted the CAMR; on the basis of insufficient data. the Agency has proposed a rule that is
significantly more stringent than
CAMR, is not technically feasible, and is not economically
reasonable.
In light of the Agency's failure to adequately assess the potential impact of its proposed
rule, it is perhaps not surprising that the Agency and its witnesses have inconsistently described
that impact over time. Ms. Willhite has claimed that the
rule would result in a 90% reduction in
mercury deposition in Illinois and in fish tissue mercury concentrations. S Tr.. pp. 166-167.
194-
195 (June 14, 2006). Mr. Ross claimed that this was her position, not the Agency's, and then
said that the Agency expected from mercury emission reductions only "corresponding"
reductions in mercury deposition and in fish tissue mercury concentrations. S
Tr.. pp. 126-128
(June 19.2006). The expected level of such "corresponding" reductions has never been
articulated by the Agency but is apparently something less than the one-to-one reductions that
Ms. Willhite claims. Even Ms. Willhite eventually conceded that. given the complexities of
predicting methylation rates and the inconsistent Florida and Massachusetts data, a small, maybe
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10% or less, reduction in fish tissue mercury levels might occur as a result of the proposed rule.
S Tr., pp.
231-233 (June 14,2006).
Coupled with the lack of reduction in deposition that would result from implementation
of the Agency's mercury proposal, as discussed above, the Agency has not shown that
implcmcntation of a rule so much more stringent than the CAMR will cause Illinois waterbodies
to be less mercury-impaired, to reduce the level of mercury in fish tissue, or to reduce the
amount of mercury consumed by Illinois residents from eating fish. Indeed, Dr. Chapman, an
acknowledged expert on aquatic toxicology, testified that, in light of all of the complexities
associated with predicting the methylation and demethylation cycles, the absence of critical
information needed to assess such cycles in Illinois waters, the contribution of other sources of
mercury to Illinois waters, and other significant issues, he would not expect to see a measurable
reduction in fish tissue mercury concentrations based on the small predicted additional mercury
deposition reduction resulting from the proposed rule, as compared to CAMR. Ex.
129, p. I I.
In other words, the stated goals of the proposed rule will not bc realized.
Dr. Chapman's testimony is particularly compelling when considered with Dr.
Charnley's testimony. The Agency did not assess the extent to which Illinois residents,
including fishermen, eat Illinois fish. Data from states that have studied fish consumption
patterns suggest that a high percentage of fishermen do not eat what they catch, and data from
Wisconsin indicates no difference in hair mercury levels between women who do and do not eat
freshwater sport
Iish. Ex. 130, pp. 6-7. Most of the fish consumed in the United States,
Including likely by Illinois residents. is ocean fish rather than freshwater fish.
Ex. 130. pp. 6-7
Further, Dr. Charnley testified that at the mercury levels present in Illinois fish, any risk from
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consumption was likely heavily overstated by the Agency and its claimed expert Deborah Rice.
Generally
Jee
Ex. 130 and Dr. Charnlcy's oral testimony.
The point is that valid regulatory choices concerning methylmercury should consider and
be based upon an objective analyses of the relevant evidence, including the likely level of
methylmercury exposure and risk before and after a proposed rule. For instance, Illinois' fish
consumption advisories are based on
USEPA's methylmercury RfD. S Tr., pp. 66-67 (June 14,
2006): Ex.
9, p. 3. That RfD is more stringent than the mercury RfD developed by many other
agencies. including environmental agencies in
somc other countries. Ex. 130, pp. 13-1 8. In
addition,
USEPA has determined that, after implementation of CAMR and CAIR, fish tissue
mercury attributable to power plants would exceed the
RfD only for those in the 991h percentile
of fish consumption who consume fish containing the
99'h percentile of mercury fish tissue
concentration, a situation that is unlikely to occur very often. Ex. 31, p. 33392: Ex. 130, p.
8. In
other words, all but those who eat a very large amount of fish that contains a very high level of
methylmercury, such as subsistence fishermen that eat heavily impacted ocean fish, should not
excced USEPA's reference dose based on the mercury emissions from power plants. The
Agency, however, failed to establish that any Illinois fish contained this high level of
methylmercury and could identify only one subsistence
fisherman in Illinois. S Tr., p. 74 (June
16.2006). Consistently, even for fishermen consuming a very large amount of fish,
USEPA
found that it was unlikely that they would consume fish containing such a high level of
methylmercury, and if they did, that would mean only that they exceeded the reference dose Ex.
31,
p. 33393. Given the uncertainty margin and other conservative assumptions used in the
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calculation of USEPA's reference dose (upon which Illinois' fish advisories are based'"),
exceeding the
RfD does not imply that an individual is "at risk." See Ex. 130, pp. 13-18. Based
on a complete set of relevant data, the
USEPA determined that CAMR provided adequate
protection.
C.
There Is No Nexus Between the Rule and Its Purported Goals.
The Agency has failed to establish that the proposed rule will result in any measurable,
meaningful benefit. The lack of nexus between the rule and its purported goals reduces the rule
to control for the sake of control. Adoption of a rule that amounts to control for the sake of
control is arbitrary and capricious.
V.
MIDWEST GENERATION RECOMMENDS THAT THE BOARD DECLINE TO
ADOPT THE PROPOSAL OR ADOPT CAMR
BY REFERENCE AND, IF
NECESSARY, A STATE-ONLY MERCURY REDUCTION RULE THAT IS
TECHNICALLY FEASIBLE AND ECONOMICALLY REASONABLE.
There is a difference in the way in which "regional" or "global" pollutants should be
addressed versus the manner of addressing "local" pollutants. "Local" pollutants are those that
are not transported such long distances and where reductions have a direct local impact. Volatile
organic compounds
("VOC") is such a pollutant. Reducing VOCs in Peoria will not have an
effect on ozone in Chicago. By "regional" or "global" pollutants, we refer to those pollutants
that arc transported great distances by weather patterns or the jet streams. As a result, a specific
area, such as Illinois, is impacted by emissions from sources often hundreds, perhaps thousands,
of miles away. Reductions of such pollutants need to occur in a broad-based or regional manner
39 Dr. FIornshaw testified that Illinois' mercury fish advisories are based upon USEPA's
RfD. S Tr., p. 66-67 (June 14,2006). Accordingly, the same uncertainty factor and other
protective assumptions included in USEPA's reference dose are included in
Illinois' mercury
fish advisories.
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1x1 order for the reductions to have any positive effect. NOx and SOz are such pollutants. thus the
success of the
NOx SIP call and Acid Rain trading programs. Mercury is another such a
pollutant, particularly as emitted from coal-fired power plants.
The Agency
is attempting to treat mercury as a local pollutant in this proposed rule. The
Agency was not able to demonstrate that the proposed rule will fulfill the state's goals because
the goals are local in focus but the pollutant is regional or global in impact. Experience from
olher states confirms this disconnect. For instance, Massachusetts required significant mercury
emission reductions from mercury sources in the state, but that did not
eliminate its mercury-
impaired water issues, at least in part duc to the coiitribution of out-of-state sources. S Tr.. p.
21 1 (June 14,2006): Ex. 21, p. 14.
There is a better way to meet the Agency's stated goals for this mercury rulemaking:
adopt the CAMR
by refcrence in order to satisfy the federal requirement under Section 11 l(d) of
the Clean Air
~ct.~'
This course of action inherently ensures that Illinois will comply with the
if there are any lingering concerns that there may be mercury hot spots. though none
have been shown to exist in Illinois, the Board could adopt the HCI technology-based provisions
of the MPS, operated in a manner that most effectively removes mercury but does not interfere
with compliance with applicable particulate and opacity standards, and excluding the provisions
related to
NOx and SO2
i
e
,
accept, with appropriate wordsmithing, subsections (a)(3), (a)(3)(B).
(a)(4), (c)(l)(A)(i) without reference to the type of ESP, (c)(l)(B) including HS ESPs in this
group,
(c)(2)(A), (c)(4), (c)(S)(A)-(C), (g). This approach will significantly contribute to the
development of mercury control technology and also may accomplish the Agency's goal of a
statewide 90% reduction of mercury emissions if the technology actually performs as the Agency
has testified. This approach is technically feasible, as it requires merely the installation and
optimal operation of HCI without the significant risk of civil and criminal penalties for possible
violations of the emissions limitations which cannot
even be accurately monitored if the Agency
is wrong in its assessment of the effectiveness of HCI in achieving the 90% reduction. Further, it
is economically reasonable, largely because the economic efficiencies of the CAMR offset the
costs of the
technology-based rule. If the Agency continues to believe into the future that a 9094
absolute reduction of mercury is appropriate, then the Agency can revisit the rule in the future
after the technology has further developed.
A technology-based rule in Illinois will help that
technology development, as Illinois' power plants will effectively be testing the technology in
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federal mercury emissions cap and will satisfy the specific requirements of 40 CFR 60.24(h).
Such a rule will be automatically approved by USEPA. 40 CFR
5
60.24(h)(6)(i). USEPA has
thoroughly and publicly considered the technical feasibility and economic reasonableness of the
CAMR as well as the benefits that will accrue.
WHEREFORE. for the reasons set forth above and as developed at the Springfield and
Chicago hearings, Midwest Generation recommends that the Board decline to adopt the
Agency's proposal and allow the CAMR to apply by operation of law or. in the alternative, adopt
the CAMR by reference. If the Board feels compelled to adopt an Illinois-specific
technology-
based rule. the Board should merely require the installation and optimal operation of HCI,
considering injection rates that do not result in violations of the applicable opacity and PM
emissions limitations (effectively. the MPS without any reference to
NOx and SOz in the rule).
by:
Respectfully submitted,
MIDWEST GENERATION, LLC
Daniel McDevitt
General Counsel
real-time beginning in July 2009. The approach also avoids the legal issues inherent with
proposed Section
225.233(f).
ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, SEPTEMBER 20, 2006
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Dated: September 20; 2006
Daniel
McDevitt
General Counsel
MIDWEST
GENERATION, LLC
440 South
LaSalle Street, Suite 3500
Chicago, Illinois 60605
3 12-583-6000
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3
12-876-7423
ictpiiana@sonnensche~n earn
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Drive
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312.876.8000
312876,7934 fax
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Koilsas City
Los
Cnqeies
New
Ycrk
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s:. Louis
July 27,2006
Woshinq:an,
D.C.
Weir Palm Beoctr
VIA E-hl.AIL AhD FEDERAL. EXPRESS
The Honorable Doug Scott
Dlrector
Illinols En~lronmental Protectlon Agency
102
1 North Grand Avenue East
1' 0 Box 19276
Spr~ngfield. 11, 62794
Re:
Letter of
L'nderstanding,'CONFlL)EN?'Il\L SETTLEMENT NEGOTI.4TIONS
Dear Director Scott:
As you are keenly aware, the State of Illinois and other states regionally and nationally
are in the process of developing rules to implement
a variety of new regulatory programs
including, most
specilically, the Clean Air Mercury Rule (CAhlR) and the Clean Air Interstate
Rule
("CAIR"). The State of Illinois is also in the process of developing its plan to address non-
attainment issues in the Metro-EastlSt. Louis area and the Chicago area under the federal
National Ambient Air Quality Standards
(NAAQS). Collectively, these new programs present a
challenge
for both your Agency as well as for indusrry located and doing business in the State of
Illinois.
Indsed; the benefits of emission reductions for the citizens of the State of Illinois are
great but so too are the impacts to companies such as Ameren who are responsible for supplying
continuous and
low cost power and jobs for those same citizens.
Ameren has been a leader in power plant emission reduction
and technology development
nationally. Since the early
90s: Ameren has spent millions of dollars to reduce power plant
emissions by over 70% but
Amere11 recognizes that more must be done to address air quality
issues in the State
of Illinois. As such, Ameren stepped forward several months ago to
proactively
work with the State of Illinois through you and your .4gency on a comprehensive and
multi-pollutant approach to future emission reductions from Ameren's Illinois System. The
decision to try to work with the Agency proactively and in advance of mandated reductions:
instead of fighting those reduction mandates; has required Ameren to commit to a pollution
control installation plan
that based on today's dollars will cost the company over $1.8 billion
dollars. That investment would be over and above the approximately
S1 billion of equity the
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The Iioriorable Doug Scott
July
27,2006
Page 2
corporation and its investors spent to bring two struggling Illinois utilities (CILCORl', Inc., and
Illinois Power Company) to investment grade status. Add to that hundreds of millions of dollars
spent to improve reliability at those companies. In addition, Ameren is fulfilling its commitment
to invest in the communities served by both of these utility companies.
Yet, despite the need to commit to even higher capital costs, Ameren believes our
proactive working relationship has been a positive one and may serve as a model for the future.
This letter is intended to embody a portion of the understanding reached through our
negotiations. Ultimately, this understanding may be included in a more formal document but the
parties agree that setting forth the intentions of the parties through this letter will aide in
furthering the commitments made through our comprehensive approach. In exchange for
Ameren's commitments to comply with the Multi-Pollutant Strategy set forth in the Illinois
IvIercury Rule, Illinois EPS agrees that Ameren's commitments are significant, particularly as it
prepares its plans to demonstrate attainment of the fine particulate matter (Ph12.5) and the
8 hour
Ozone
Kational Ambient Air Quality Standard (NAAQS). Illinois EPA also agrees that it will
consider Ameren's accelerated emission reduction commitments as it develops its attainment
demonstration and will use its best efforts
to seek reduction commitments from sources other
than Ameren's Illinois System first, before seeking additional emission reduction
commilments
from Ameren to address the State's current atlainment obligations. The Illinois EPA and
Ameren further agree to work together to coordinate the program put
fonh by Ameren and the
CAIR Rule to be adopted by the Illinois Pollution Control Board in the near future. The parties
acknowledge that the Letter of
Cnderstanding is dependent upon the Illinois Pollution Control
Board adopting the Multi-Pollutant Standard in substantially the same form as proposed by the
parties.
As you are also aware, there are some additional outstanding issues requiring resolution
as an integral part of Ameren's overall comprehensive approach. Illinois EPA and Ameren agree
to pursue resolution of those issues in such a way as to minimize any impacr on Ameren's ability
to meet generation needs of its customers or impact on Ameren's competitiveness because of
its
willingness to act proactively.
\Ye ask for your signature below ackno\vledging the understanding set forth herein.
Ameren appreciates the hard work of the Bureau of Air staff at Illinois EPA and looks forward to
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The Honorable Doug Scott
July
27,2006
Page
3
continuing to work with the Illinois EP.4 and you on implementation of these important
commitments.
Sincerely,
SOhWENSCHEh-
SAT11
&
ROSEN'I'HAI, LLP
By:
llenee Cipriano
Partner
Director
Doug Scott
Illinois Environmental Protection Agency
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CERTIFICATE OF SERVICE
I, the undersigned. certify that on this 2oth day of September; 2006, I have served
electronically the attached
MIDWEST GENERATION'S COMMENTS
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
hlly prepaid and affixed to the
persons listed on the
ATTACHED SERVICE LIST.
1st
Daniel McDevitt
Daniel McDevitt
Daniel McDevitt
General Counsel
MIDWEST GENERATION,
LLC
440 South LaSalle Street, Suite 3500
Chicago, Illinois 60605
3 12-583-6000
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SERVICE LIST
(RO6-25)
Marie Tipsord
Hearing Office
Illinois
Pollutioil Control Board
James R. Thompson Center
100 W. Randolph
Suite 11-500
Chicago, Illinois 60601
tipsonn@iacb.state.il.us
ELECTRONIC SERVICE ONLY
Gina Roccaforte, Assistant Counsel
Charles Matoesian, Assistant Counsel
John J. Kim, Managing Attorney
Air Regulatory Unit
Division of Legal Counsel
Illinois Environmental Protection Agency
102
1 North Grand Avenue, East
P.O. Box 19276
Springfield. Illinois 62794-9276
john.kim@,epa.statc.il.us
charles.n~atoesian~epa.state.il.us
gina.roccaforte@,eua.state.il.us
/
ELECTRONIC SERVICE ONLY
ELECTRONIC SERVICE ONLY
1
ELECTRONIC SERVICE ONLY
William
A. Murray
Special Assistant Corporation Counsel
Office of Public Utilities
800 East Monroe
Springfield. Illinois 62757
bmurray@cwIp.con~
N. LaDonna Driver
Katherine
D. Hodge
Hodge
Dwyer Zeman
3
150 Roland Avenue, P.O. Box 5776
Springfield, Illinois 62705-5776
nldriveriiZhdzlaw.com
1 ELECTRONIC SERVICE ONLY
I
Christopher W. Newcomb
1
Bill S. Forcade
Karaganis, White
&
Mage., Ltd.
i
Katherine M. Rahill
4 14 North Orleans Street, Suite 8 10
1
Jenner
&
Block
Chicago, Illinois 60610
'
One IBM Plaza, 4oth Floor
c~~ewcomb@k-w.com
I
Chicago, Illinois 6061 1
ELECTRONIC SERVICE ONLY
bforcade@,ienner.com
krahiIl@,ienner.com
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I
SERVICE LIST
(R06-25)
Faith E. Bugel
I-Ioward A. Lemer
Meleah Geertsma
Environmental Law and Policy Center
35 East Wacker Drive, Suite 1300
Chicago, Illinois 60601
fourrel@eloc.org
Keith
I. Harley
Chicago Legal Clinic
205 West Monroe Street,
4th Floor
Chicago, Illinois 60606
kharlev@kentlaw.edu
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ON1,Y
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I
1
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David Rieser
James T. Harrington
Jeremy R. Hojnicki
McGuireWoods LLP
77 West Wacker, Suite 4100
Chicago, Illinois 60601
ELECTRONIC SERVICE ONLY
I
S. David Farris
Manager, Environmental,
Health and Safety
Office of Public Utilities, City of Springfield
201 East Lake Shore Drive
Springfield, Illinois 62757
dfarris@,cwla.con~
Bruce Nilles
Sierra Club
122 West Washington Avenue. Suite 830
Madison,
W-iseonsin 53703
bruce.nilles@sierraclub.org
ELECTRONIC SERVICE ONLY
James W.
Ingram
Senior Corporate Counsel
Dynegy Midwest Generation, Inc.
1000 Louisiana, Suite 5800
Houston, Texas 77002
Jim.lnrrraln@dvnerrv.com
ELECTRONIC SERVICE ONLY
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SERVICE LIST
1
(R06-25)
Mary Frontczak
Dianna Tickner
Prairie State Generating Company, LLC
701 Market Street, Suite 781
St. Louis, Missouri 63101
E1,ECTRONIC SERVICE ONLY
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
3 12-258-5500
Fax: 312-258-5600
szabel@,schiffhardin.com
kbassi@,schiffhardin.com
sbonebrake@schiffhardin.com
jmoreiiir,schiffhardin.com
ggilbcl-t@,schiffhardin.com
1
ELECTRONIC SERVICE ONLY
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