RECE~VED

CLERK’S OFFICE

ILLINOIS POLLUTION CONTROL BOARD

JAN 1 92005

)

STATE OF ILLINOIS

)

Pollution Control Board

MIDWEST GENERATION EME, LLC

)

•

Petitioner,

)

PCB 04-185

)

(Trade Secret Appeal)

v.

)

)

•)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

Respondent.

)

NOTICE OF FILING

To:

Bradley P. Halloran

Hearing Officer

Illinois Pollution Control Board

James R. Thompson Center, Suite 11-500

100 W. Randolph Street

Chicago, IL 60601

Lisa Madigan

Matthew Dunn

Ann Alexander~

Paula Becker Wheeler~

Office ofthe Attorney General

188 West Randolph Street, Suite 2000

Chicago, Illinois 60601

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

~2ontrolBoard and original (1) and nine (9) copies ofMidwest Generation’s Motion for Leave to

File the Attached Reply To Illinois Environmental Protection Agency’s Response To Midwest

Generation’s Motion To Strike, a copy of which is herewith served upon you.

( Mary Ann Mulhn

Dated: January 19, 2005

SchiffHardin LLP

6600 Sears Tower

Chicago, IL 60606

(312)

258-5687

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•

•

•

RECEIVED

•

CLERK’S OFFICE

BEFORE

THE ILLINOIS POLLUTION CONTROL

BOARD

JAN 192005

•

•

STATEOFILLINOIS.

Midwest Generation EME, LLC

•

)

Pollution Control Board

• Petitioner,

•

)

•

)

v.

)

)

Illinois Environmental Protection Agency,

Respondent.

•

•

•

ENVIRONMENTAL PROTECTION AGENCY’S RESPONSE TO MIDWEST

GENERATION’S MOTION TO

STRIKE

Pursuant to

35

Ill. Adm. Code 101.500(e), Midwest Generation EME, LLC (“Midwest

Generation”) respectfully submits this Motion for Leave to File the Attached Reply to the Illinois

Environmental Protection Agency’s (“JEPA’s”) Response to Midwest Generation’s Motion to

•

Strike. In support ofthis motion, Midwest Generation states as follows:

Midwest Generation will be materially prejudiced unless it is allowed to file the attached

Reply. First, in its Response to Midwest Generation’s Motion to Strike, IEPA acknowledges that

certain statements in the. November 30, 2004 Clarification ofJEPA’s Trade Secret Determination

(“Clarification”) are erroneous; IEPA nonetheless, seems to argue these statements should

remain in the record. In the attached Reply, Midwest Generation demonstrates. why these

erroneous statements need to be stricken from the record. Secondly, in its Response, EPA

makes several arguments in an attempt to

•

justify the inclusions of new grounds in its

• Clarification. •Midwest Generation will be prejudiced unless it has an opportunity to respond to

•

these new arguments.

•

WHEREFORE, Midwest Generation respectfully requests that the Board grant Midwest

Generation’s Motion for Leave to File the Attached Reply.

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Dated: January 19, 2005

•

Respectfully submitted,

MIDWEST GENERATION EME, LLC

By: ~

A

•

•

Sheldon A. Zabe

MaryAnn Mullin

AndrewN. Sawula

SCHIFF HARDIN LLP

•

•

6600 Sears Tower

•

Chicago, Illinois 60606

•

•

(312)258-5687

Attorneys for

• •

Midwest Generation EME, LLC

CH2\ 1190808.1

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Midwest Generatio•n EME, LLC

Petitioner,

)

)

v.

)

)

Illinois Environmental Protection Agency,

)

•

Respondent.

•

•)

•

REPLY TO ILLINOIS ENVIRONMENTAL PROTECTION AGENCY’S RESPONSE TO

MIDWEST GENERATION’S MOTION TO

STRIKE

Petitioner, Midwest Generation EME, LLC (“Midwest Generation”) respectfully submits

this Reply to the Illinois Environmental Protection Agency’s Response to Midwest Generation’s

Motion to Strike the Attorney General’s Clarification of EPA’s Trade Secret Determination

(“Motion to Strike”). In support ofthis Reply, Midwest Generation states as follows:

1.

Midwest Generation has moved to strike the November 30, 2004 Clarification of

Illinois Environmental Protection Agency’s (“IEPA’s”) Trade Secret Determination

(“Clarification”) in its entirety because the Attorney General, not the EPA, attempted to clarify

the trade secret determination. Alternatively, Midwest Generation moved to strike (1) the

portions of the Clarification that contain false statements about conversations between Midwest

Generation and JEPA and an inaccurate claim as to the timing ofthe conversations and (2) the

portions of the Clarification that exceed the scope of the Board’s November 4, 2004 Order

(“Order”).’ In response to Midwest Generation’s Motion to Strike the Clarification in its

JEPA accurately notes in its Response that Midwest Generation submitted a•

Supplemental Statement ofJustification to the JEPA on November 22,2004. In light ofthe Order

which seems to authorizes Supplemental Statements of Justification at any time, Midwest

Generation decided to Supplement its Statement ofJustification to respond to the positions EPA

had articulated to date. Midwest Generation did not intend for this submittal to be a filing in this

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Entirety, IEPA provided•an affidavit attesting that EPA drafted the Clarification. In light of this

information and despite the procedural irregularities, Midwest Generation withdraws its Motion

to Strike the Clarification in its Entirety, however, Midwest Generation does not withdraw its

alternative Motion to Strike Portions ofthe Clarification.

2.

First, Midwest Generation moved’ to strike the paragraph of the Clarification

relating to purported conversations between Midwest Generation and IEPA allegedly occurring

before IEPA issued its March 10, 2004 letter denying trade secret protection to certain

information Midwest Generation provided to JEPA (“March 10, 2004 Denial”).

In this

paragraph, JEPA states three times that JEPA informed Midwest •Generation of alleged

deficiencies in its Statement of Justification before the March 10, 2004 Denial. IEPA now

acknowledges these statements are erroneous, admitting that any such conversations between

IEPA and Midwest Generation took place after the March 10, 2004 Denial was issued. Response

at 2. For this reason, paragraph 3 on page 2 should be stricken from the Clarification.

• .3.

Further, the erroneous representations should be stricken because they create the

mis-impression with the Board, and in the record, that Midwest Generation had an opportunity to

know, discuss and respond to the reasoning for the JEPA decision in advance of it becoming

final. IEPA’s concluding sentence in the paragraph is: “Despite these pre-decisional discussions,

Midwest failed to address the Illinois EPA’s concerns in a supplemental statement of

justification prior to the Agency’s trade •secret determination”. Clarification at 2. Midwest

Generation could hardly supplement its justification based on these conversations when, as IEPA

now acknowledges, no such conversations took place before the’March 10, 2004 Denial. Rather

case and therefore did not serve the Attorney General. Thirty-five days have lapsed and EPA

has not responded to Midwest Generation’s Supplemental Statement of Justification.

-2-

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then agreeing to strike the paragraph, IEPA seems to be taking the posit•ion that these statements

should remain in the record. IEPA claims that “While the EPA agrees that the timing ofthese

statements is irrelevant, the statements are not.

. .“

Response at 2. Midwest Generation is not at

all sure with whom EPA is agreeing but it is not Midwest Generation. The timing, of these

discussions is particularly relevant to their inclusion in the record and for Midwest Generation’s

due process argument currently before the Appellate Court.

4.

EPA also seems to argue that the erroneous statements should remain in the

record because the conversations Midwest Generation and IEPA had after the March 10, 2004

Denial are somehow relevant irrespective of the timing. Response at 2. JEPA gives no reason

why these conversations are relevant for the purposes of the Clarification. While Midwest

Generation acknowledges it did contact EPA after the March 10, 2004 Denial, in a largely

unsuccessful attempt to glean IEPA’s reasoning supporting its March 10, 2004 Denial, Midwest

Generation cannot see how these conversations, even if accurately represented, have any

relevance to the bases for the denial and therefore are appropriate for inclusion in the

Clarification.

•

5.

Midwest Generation also disagrees with JEPA’ s representations as to the content

ofthese conversations. ~ç Affidavit ofMary A. Mullin at p. 2, attached to the Motion to Strike.

The Board ordered JEPA to supplement the March 10, 2004 Denial in order to explain the

reasoning supporting its decision. Order at 1-2.

Statements regarding conversations with

Midwest Generation .that occurred after the final denial was issued are not relevant to this task.2

2

Midwest Generation notes that the silence of the EPA’ s response and accompanying

affidavit on the question of the accuracy ofthe description ofthese conversations may be more

eloquent than anything Midwest Generation can argue.

-3-

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6.

Secondly, Midwest Generation has moved to strike the portion ofthe November

• 30, 2004 Clarification (“Clarification”) pertaining to the argument that the Generation Chart is

emissions data, arguing that this is a new grounds for denial not allowed by the Order.3 EPA

admits that that “EPA did not mention emissions data specifically with regard to the Generation

Chart in its original March 10, 2004 determination.” Response at 3. But, JEPA contends, this is

not a new grounds for the denial, but rather a clarification of the March 10, 2004 Denial. This

• position is untenable.

7.

•

IEPA clearly identified the grounds (but not the reasons supporting these grounds)

for its denial of trade. secret protection to the Generation Chart and the Project Chart in the

March 10, 2004 Denial. JEPA denied protectionto the Project Chart, in part, because JEPA

claimed the Project Chart constituted emissions data; EPA made no such claim as to the

Generation Chart. The March 10, 2004 Denial specified the following grounds for denying trade

secret protection to the Generatibn Chart:

Midwest failed to adequately demonstrate that the information has not been

published, disseminated, or otherwise become a matter of general public

knowledge (i.e., the Illinois EPA was able to locate the information in sources

available to the public) andlor failed to demonstrate that •the information has

competitive value.

March 10, 2004 Denial at 2. In the portion of the March 10, 2004 Denial pertaining to the

Project Chart, JEPA identified the following grounds forits denial:

Midwest failed to adequately demonstrate that the information has not been

published, disseminated, or otherwise become a matter of general public

knowledge (i.e., the Illinois EPA was able to locate th•e information in sources

available to the public) and/or failed to demonstrate that the information has

~Midwest Generation strenuously objects to the characterization of the Generation Chart

as emissions data. If this new argument is not stricken from the Clarification, Midwest

Generation will address this issue in its Response to the Clarification now due to be filed with

the Board on February 22, 2005.

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competitive value.

Further, Midwest has failed to demonstrate that the

information does not constitute emissions date.

March 10, 2004 Denial at 2 (emphasis added). The• IEPA identified the Project Chart as

•constituting emissions data, it could have just as easily identified this grounds as to the

Generation Chart but failed to do so.

8.

•There is no merit to IEPA’s position that the addition of the claim that the

Generation Chart is emissions data is somehow “implicit” in the March 10, 2004 Denial. As

IEPA admits in its Response,

.

the question of whether or not the Generation Chart is a trade

secret is “not germane” to the evaluation ofwhether ornot it is emissions data. Response at 3. If

it is emissions data, obtained pursuant to the Illinois Environmental Protection Act, even if it is

otherwise a trade secret, it is not protected. These are separate inquiries because emissions data

is an exception to the general rule that trade secrets are protected• from disclosure. ~ 415 ILCS

5/7(c).

Therefore, regardless of its status as a trade secret, if data constitutes emissions data

propeEly obtained it is to be released. Accordingly, the fact that EPA now considers the

Generation Chart to be emissions data could not be a “clarification” of one of the grounds

identified in the March 10, 2004 Denial, both of which have to do with whether or not the

Generation Chart is a trade secret. Which ground could it possibly support? Does the fact that

IEPA now considers the Generation Chart emissions data support the EPA determination that

the information is publicly available? Does it support the EPA determination that the data has

no competitive value? Neither position makes sense and the IEPA’s Response sheds no light on

this. IEPA’s attempts to inject into the case this new argument as to the Generation Chart should

be rejected.

3Thus, Midwest Generation can equally argue that its request for protection “implicitly”

informed JEPA that Midwest Generation did not believe the information was emissions data.

-5-

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9.

Apparently recognizing the speciousness of its “emissions data” argument, EPA

appears to argue that the Order gave them license to add grounds not identified in the March 10,

2004 Denial. The Order clearly does not. The Board sent the March 10, 2004 Denial back to

JEPA finding:

“. . .

EPA’ s denial letter states that Midwest failed to demonstrate that the claimed

information is not publicly available ‘and/or’ has competitive value. The denial is ambiguous as

to whether one or• both grounds apply.” Order at 31. Therefore, the Board required .IEPA to

specify which grounds apply and why. See Board Order at 31. The Board did not authorize

IEPA to revisit its decision and create new grounds not previously identified; the Board only

required JEPA to articulate the reasons that existed when it issued its March 10, 2004 Denial:

The Board is not, however, directing IEPA to reconsider•its decision. Instead, the

Board is remanding this matter to JEPA for the limited purpose of having EPA

articulate, in compliance with Section 130.210 (b)(1), the reasOning behind

JEPA’s March 10, 2004 denial oftrade secret protection.

Order at 31. To the extent the March 10, 2004 Denial was ambiguous, the Board ordered IEPA

• to specify whether one or both grounds applied, and why. The Board did not empower EPA to

•revisit its decision to identify additional grounds. Accordingly, as to the Generation Chart, JEPA

was authorized to choose whether one or both ofthe grounds identified applied; JEPA was not

authorized to revisit its decision to add a claim that the Generation Chart is emissions data. To

avoid giving IEPA a second bite at the apple, the Board should Strike all references to this

argument from the Clarification.

10.

In further defense of its failure to identify the Generation Chart as emissions data

in its March 10, 2004 Denial, EPA asserts that: “The Board does not require the JEPA to state

whether information constitutes emissions data when evaluating and responding to a statement of

justification, as, by definition, it must be made available to the public.” Response at 4. In its

Order, the Board has laid to rest any uncertainty as to what is required in EPA’ s denial letter.

-6-

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The Board directed “IEPA to specify which grounds apply (i.e., matter of general public

knowledge, lacks competitive value, emissions data) and why. Order at 30-31.

WHEREFORE, Midwest Generation respectfully requests that the Board enter an order

striking (1) the inaccurate and irrelevant paragraph on page 2 of the Clarification alleging that

Midwest Generation and IEPA had conversation about Midwest Generation’s Statement of

Justification before the March 10, 2004 Denial was issued and (2) the portions of the

Clarification on• pages 3, 4, and

5

relating to the newly created argument that the Generation

Chart constitutes emissions data.

Dated: January 19, 2005

Respectfully submitted,

MIDWEST GENERATION EME, LLC•

• • •

•

BY:7~$(~&~

•

•

•

•

Mary Ann Mullin

Andrew N. Sawula

•

•

‘SCHIFF HARD1N LLP

•

6600 Sears Tower

Chicago, Illinois 60606

•

(312)258-5687

•Attorneys for

Midwest Generation EME, LLC

CH2\

1191035.2

-7-

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CERTIFICATE OF SERVICE

I, the undersigned, certify that I have served the attached Midwest Generation EME, LLC’s

Motion for Leave to File the Attached Reply To Illinois Environmental Protection Agency’s

Response To Midwest Generation’s Motion To Strike, by U.S. Mail, upon the following persons:

Lisa Madigan

Matthew Dunn

Aim Alexander

Paula Becker Wheeler

• Office of the Attorney General

188 West Randolph Street, Suite 2000

Chicago, Illinois 60601

Dated:

/

Chicago, Illinois•

January 19, 2005

Bradley P. Halloran, Hearing Officer

Illinois Pollution Control Board

100 West Randolph, Suite 11-500

Chicago, IL 60601

Respectfully submitted,

MIDWEST GENERATION EME, LLC

By~7~/i4~7~Ma~’

A.

j~7~&~

Mulliii

S CHIEF HARDIN LLP

6600 Sears Tower

Chicago, Illinois 60606

(312) 258-5687

One ofthe Attorneys for

Midwest Generation EME, LLC

CH2\