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1 BEFORE THE POLLUTION CONTROL BOARD
OF THE STATE OF ILLINOIS
2
3 IN THE MATTER OF: )
)
4 NATURAL GAS-FIRED, PEAK-LOAD ) R01-10
ELECTRICAL POWER GENERATING )
5 FACILITIES (PEAKER PLANTS). )
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9 The following is a transcript of proceedings
10 from the hearing held in the above-entitled matter,
11 taken stenographically by ROSEMARIE LAMANTIA, CSR, a
12 notary public within and for the County of Cook and
13 State of Illinois, before AMY JACKSON, Hearing Officer,
14 at 100 West Randolph Street, Assembly Hall Auditorium,
15 Chicago, Illinois, on the 23rd day of August, 2000,
16 A.D., scheduled to commence at the hour of 10:30 a.m.,
17 commencing at 10:45 a.m.
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1 A P P E A R A N C E S:
2 HEARING TAKEN BEFORE:
3 ILLINOIS POLLUTION CONTROL BOARD,
100 West Randolph Street
4 Assembly Hall Auditorium
Chicago, Illinois 60601
5 (312) 814-3629
BY: AMY JACKSON, HEARING OFFICER
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7 ILLINOIS POLLUTION CONTROL BOARD MEMBERS PRESENT:
8 Ms. Claire Manning, Chairman
Mr. G. Tanner Girard
9 Mr. Nicholas Melas
Ms. Elena Kezelis
10 Dr. Ronald Flemal
Ms. Marili McFawn
11 Mr. Samuel Lawton, Jr.
Mr. Anad Rao
12
13 MEMBERS OF THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
AS WELL AS OTHER INTERESTED ENTITIES AND AUDIENCE
14 MEMBERS WERE PRESENT AT THE HEARING, BUT NOT LISTED ON
THIS APPEARANCE PAGE.
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1 HEARING OFFICER JACKSON: Good morning again
2 everyone. We're ready to get started. I apologize for
3 the slight delay in our start time. Apparently, the
4 sign on the door directing people to the EPA hearing on
5 the second floor caused some confusion so we were giving
6 people enough time to get back down to this room. Sorry
7 about that. And I think we've probably got a sign on
8 the door now indicating that these -- this hearing is
9 the hearing to be held by the Illinois Pollution Control
10 Board regarding the peaker plants. So I appreciate your
11 understanding.
12 My name is Amy Jackson and I'm the
13 attorney assistant Board member to Elena Kezelis
14 and at the request of Board chairman, Claire Manning, I
15 am serving as the hearing officer for today's
16 proceeding.
17 We are very pleased to have the entire
18 Board present today. I would like to take a moment to
19 introduce you to the Board members.
20 Chairman Claire Manning is immediately
21 to my right.
22 CHAIRMAN MANNING: Good morning.
23 HEARING OFFICER JACKSON: Tanner Girard, G.
24 Tanner Girard.
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1 MR. GIRARD: Good morning.
2 HEARING OFFICER JACKSON: And Nicholas Melas is
3 next to Mr. Girard.
4 MR. MELAS: Good morning.
5 HEARING OFFICER JACKSON: To my immediate left
6 is Elena Kezelis.
7 MS. KEZELIS: Good morning.
8 HEARING OFFICER JACKSON: Dr. Ronald Flemal.
9 DR. FLEMAL: Good morning.
10 HEARING OFFICER JACKSON: And Marili McFawn.
11 MS. MCFAWN: Good morning.
12 HEARING OFFICER JACKSON: I do note that Samuel
13 Lawton, Jr., who is also a Board member, has been
14 unexpectedly delayed this morning and will be joining us
15 later this morning.
16 Also, at the head table down to my far
17 right is Anand Rao, who is the head of the Board's
18 technical unit. He will also be participating in the
19 questioning today.
20 MR. RAO: Good morning.
21 HEARING OFFICER JACKSON: As some of you may
22 know, this matter was brought to the Board in the July
23 6, 2000, request by Governor George Ryan. In that
24 request, Governor Ryan asked the Board to examine the
L.A. REPORTING (312) 419-9292
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1 following issues.
2 Do peaker plants need to be more
3 strictly regulated than currently provided under
4 Illinois air quality rules and regulations?
5 Second, do peaker plants pose a unique
6 threat or a greater threat than other types of state
7 regulated facilities with respect to air, noise or
8 water pollution?
9 Third, should new or expanding peaker
10 plants be subject to citing requirements beyond
11 applicable local zoning rules?
12 Fourth, if stricter regulations are
13 needed, should new regulations apply to currently
14 permitted facilities or only to new or expanding
15 facilities.
16 And finally, fifth, how do other states
17 regulate peaker plants.
18 Through the information presented at
19 these hearings, through questions and through public
20 comments, the Board will develop a complete and
21 well-rounded record that will enable it to provide an
22 informed and well-reasoned response to each of the
23 Governor's questions.
24 At this time, the Board anticipates
L.A. REPORTING (312) 419-9292
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1 being able to present an informational order to
2 the Governor that will include all of the Board's
3 findings and recommendations by the end of this calendar
4 year. The last Board meeting that is currently
5 scheduled for this year is scheduled for December 21,
6 2000.
7 As indicated in my hearing officer
8 order of July 15, 2000, today's hearing will focus
9 primarily on testimony and information from state
10 agencies. Present to provide testimony today are the
11 Illinois Environmental Protection Agency, the Illinois
12 Commerce Commission and the Illinois Department of
13 Natural Resources.
14 These agencies pre-filed their testimony
15 and that testimony is available on the Board's website
16 with a possible exception of the Illinois Commerce
17 Commission and we are working on getting that on our
18 website today.
19 We have also provided extra copies of
20 this testimony at the table at the top of the
21 auditorium and I understand that we are out of copies
22 right now, but we are in the process of making extra.
23 Also present today to observe today's
24 proceedings are representatives from the Illinois
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1 Department of Nuclear Safety and the Illinois Department
2 of Commerce and Community Affairs. While not planning
3 to testify today, they are here to observe the
4 proceedings and will offer their input if needed to the
5 Board later on down the road.
6 The structure of tomorrow's hearing is
7 very similar to today's except that tomorrow, we will
8 focus on presentations of testimony and information
9 from members of the peaker industry.
10 On the table by the entrance, there is
11 also an informational sheet prepared by the Board's
12 public information officer. This sheet contains
13 general information about these inquiry hearings, such
14 as the dates, times and locations of hearings and other
15 general information that you might need to know. If you
16 did not get one when you came in, please feel free to
17 pick one up.
18 As I stated earlier, the pre-filed
19 testimony for today and tomorrow is on the Board's
20 website. Also on our website are all Board orders and
21 hearing officer orders that have been issued in this
22 proceeding.
23 We do have a court reporter present who
24 will be transcribing everything that is said today. The
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1 written transcript from all of our peaker hearings will
2 be on the Board's website as soon as they're available.
3 We have requested expedited transcripts from these
4 proceedings so the transcripts should be available
5 within three to five days after the hearing. You may
6 download the transcript from the Board's website or if
7 you need a hard copy, you can request a hard copy from
8 the Board's clerk's office at 75 cents a page.
9 I also want to note that testifying
10 before the Board is not the only way to provide
11 information to the Board in this proceeding. The Board
12 will be accepting written public comments until November
13 6th of this year. Those comments may be filed with the
14 Board's clerk's office. The address is listed on the
15 public information sheet that I referred to earlier.
16 To the extent practicable, we will be
17 attempting to place all written public comments on our
18 website as well. The Board's website for those of you
19 who do not know it is www.ipcb.state.il.us.
20 One other thing I want to mention is we
21 do have a notice list for these proceedings. For those
22 persons wishing to be on the notice list, you will
23 receive copies of all Board opinions and orders and all
24 hearing officer orders. There is no obligation to those
L.A. REPORTING (312) 419-9292
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1 persons on the notice list that you serve other people
2 with your own filing. You will just be receiving more
3 documents if you're on the notice list.
4 If you are not on the notice list and
5 you wish to be put on the notice list, please contact
6 the following person. Her name is Kim Schroeder. She
7 is in our Springfield office. Her telephone number is
8 area code 217-782-2633, or you can e-mail your request
9 to Ms. Schroder at schroedk -- that's
10 s-c-h-r-o-e-d-k@ipcb.state.il.us.
11 A couple of other housekeeping matters
12 that I wanted to mention before I go on to tell you
13 about the other hearings that we have scheduled in this
14 case, we do have a videotape set up over to my left.
15 The proceedings will be videotaped today. If anyone --
16 any of the witnesses has an objection to testifying in
17 front of a videotape, please let me know and I'll make
18 sure the videotape is turned off during your
19 presentation.
20 Also, as you can see, we have some large
21 exhibits set up on the stage. If you need to move in
22 from the ends of the aisles, you might be able to see
23 the exhibits better. We will attempt to focus them so
24 everyone can see them, but you may need to scoot in.
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1 In addition to the hearings this week,
2 the Board has also scheduled three hearings during the
3 month of September. They will be held as follows:
4 September 7th in Naperville; September 14th in Joliet;
5 and September 21st in Grayslake.
6 These are the hearings where we really
7 want to focus on presentations from interested members
8 of the public, local government, citizen groups, et
9 cetera. Because of the overwhelming public interest, we
10 are expecting -- and the limited time we have for these
11 hearings -- the procedures for these hearings will need
12 to be very orderly.
13 If anyone knows in advance that they
14 will be attending one of these September hearings and
15 would like to make a comment on the record, I encourage
16 you to contact me in advance. My telephone number and
17 e-mail address are available on the public information
18 sheet that I referred to earlier and on the Board's
19 website. Those individuals that contact me in advance
20 will be allowed to speak before others who are present
21 wishing to give comment.
22 Speakers at the September hearings may
23 be limited in the amount of time they're allowed to
24 speak depending upon the number of people that are
L.A. REPORTING (312) 419-9292
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1 there wanting to speak on the record. Therefore,
2 it would be very beneficial to you to have a prepared
3 statement or set of questions that you would be easily
4 able to read into the record during the hearing.
5 Our final hearings in this proceeding
6 are currently scheduled for October 5th and 6th
7 in Springfield. These hearings will provide an
8 opportunity for those outside of the Chicago area
9 to provide their thoughts and information to the Board.
10 Additionally, we hope to use these final
11 days of hearings as sort of a wrap-up session to make
12 sure that all of the questions the Board might have
13 regarding the issues presented have been answered.
14 Before we begin receiving testimony
15 today, I want to emphasize for everyone present that
16 this is an informational proceeding. The purpose of
17 the Board's hearing in these matters is to gather as
18 much information as possible to make a well-informed
19 decision and recommendation for the governor's office.
20 This is not an adversarial proceeding. I ask everyone
21 to act appropriately as if you were in a court of law.
22 At this time I will invite our chairman,
23 Claire Manning, and any of the other Board members who
24 wish to make opening remarks to make them at this time.
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1 CHAIRMAN MANNING: Good morning and welcome
2 everyone. I'll be brief.
3 Welcome, particularly members of the
4 public, representatives of government, industry
5 and environmental associations to this -- the Pollution
6 Control Board's inquiry of matters concerning peaker
7 plants.
8 I see a lot of familiar faces out there,
9 but for those who are unfamiliar with the Board, permit
10 me just a moment to explain what we are a little bit and
11 what our function is.
12 We are an independent state body, a
13 bipartisan seven-member state body, with both
14 quasi-judicial and quasi-legislative function.
15 In many ways, we operate, as Hearing
16 Officer Jackson said, in specialized environmental
17 court bringing impartial and technical expertise to
18 bear on environmental issues and questions which are
19 posed to us.
20 In addition to citing cases pursuant to
21 the Environmental Protection Act, as most of you know,
22 we also promulgate rules and standards for the state
23 generally pursuant to environmental rulemaking
24 proposals brought to us by the Illinois EPA, followed by
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1 full sets of state-wide hearings with regard to
2 environmental reporting proposals.
3 For more general information about us,
4 for those of you who are in need of that information, we
5 have a very informational website found at
6 www.ipcb.state.il.us.
7 In this matter and under these very
8 special circumstances, Governor Ryan has asked us
9 to make an inquiry authority to hold a set of
10 state-wide hearings concerning commercial and
11 environmental impacts of peaker plants.
12 As the hearing officer already
13 indicated, we hope to have our informational order
14 ready by the last Board meeting of this calendar year.
15 This informational order will, in fact,
16 examine all of the information presented in the record
17 and that will include all of the testimony
18 we hear, all of the exhibits that are put into the
19 record, and all of the public comments we receive in
20 this matter.
21 Based on this record, the written order
22 will, in fact, address all of the questions posed to us
23 by the governor.
24 At this time I'd also like to
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1 specifically thank the participation and the welcomed
2 participation of all of the state agencies whose
3 expertise has been brought to bear on this question as
4 well.
5 Director Tom Skinner is here from the
6 Illinois EPA. He will be testifying shortly this
7 morning, later this morning, probably not short in
8 hindsight. But later this morning, Tom and his staff
9 will be testifying from the Illinois EPA.
10 Charles Skinner, the executive director
11 of the Illinois Power Commission, is here to testify as
12 well. And we have two people from the Illinois Office
13 of Science and Research, the Illinois Department of
14 Natural Resources, Drs. Brian Anderson and Derek
15 Winstanley, are here to talk as well.
16 So with those introductions, I would
17 ask if there is any elected officials or government
18 officials that would like to introduce themselves for
19 purposes of the records that have not yet been
20 acknowledged.
21 Seeing none, I think it is time we move
22 forward, unless any of the other Board members have
23 anything they would like to say to welcome the members.
24
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1 HEARING OFFICER JACKSON: Okay. The order of
2 presentation today will be as follows: The Illinois
3 Commerce Commission will present first, followed by the
4 Illinois Environmental Protection Agency and followed
5 then by the Illinois Department of Natural Resources.
6 The presenters will not necessarily be
7 reading their pre-filed testimony verbatim. However,
8 they will be providing detailed summaries of their
9 presentations.
10 At the conclusion of each presentation,
11 I will simply ask you to each submit a copy of your
12 pre-filed testimony and any exhibits to the court
13 reporter so that they can be marked as exhibits and
14 attached to the transcripts of these proceedings.
15 Do we have any questions before we get
16 started?
17 Okay. We'll begin with the Illinois
18 Commerce Commission, Mr. Fisher.
19 MR. FISHER: Thank you. Good morning. Thank
20 you for the opportunity to offer my comments today. My
21 name is Charlie Fisher. I'm the executive director of
22 the Illinois Commerce Commission. The Commission, as
23 you know, regulates public utilities in Illinois
24 including the electric industry.
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1 In recent years, federal and state
2 laws have required the Commission to oversee the
3 transition of electric, as well as natural gases, the
4 telecommunications industry from monopoly-based market
5 structures to much more competitive market structures.
6 The Commission consists of a chairman
7 and four commissioners appointed by the governor and
8 approved with the advice and consent of the Senate. By
9 law, the Commission jointly hires an executive
10 director, who is responsible for the supervision and
11 direction of the Commission staff.
12 I would note at the outset that the ICC
13 as a body has not yet taken a position on any of the
14 issues that Governor Ryan has asked you to address and
15 that the comments are stated on my own and they do not
16 necessarily represent the views of the Commission or of
17 any individual commissioner. With that caveat, I do
18 hope that they are helpful.
19 I have been asked to offer some
20 background for what will follow, as I understand in
21 these proceedings, by talking about how the industry
22 has come to this point and specifically why are so many
23 peaker plants being or ultimately being proposed to be
24 built in Illinois at this time.
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1 I would like to first offer some general
2 historical context. For most of the 20th century, the
3 electric industry in the United States was thought best
4 to consist of natural monopolies. Government agencies
5 designated stockholder-owned companies to provide
6 electric service to the public within specific service
7 territories.
8 There are three major components in
9 the provision of electricity to retail customers: The
10 generation of power; the transmission of power,
11 typically at high voltages from generating plants
12 to substations; and third, the distribution of power,
13 typically at lower voltages to homes and businesses.
14 For the most part, the industry has been
15 vertically integrated, that is, public utilities owned
16 the assets for all three components.
17 We have, in fact, the national electric
18 transmission grid. The large map on the left is a map
19 of that. Each and every day, excess power generated by
20 a company in one area may, in fact, be sold and
21 delivered over transmission lines to a company in
22 another area for resell to customers in that utility's
23 service territory.
24 For the most of that last century, these
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1 transactions were primarily made by regulated utilities
2 in the interest of security and reliability of the grid.
3 The wholesale sale and interstate transmission of power
4 was regulated by the Federal Energy Regulatory
5 Commission.
6 Distribution of power from the electric
7 utility to the end-user customer is regulated in each
8 individual state by a public utility commission, in
9 Illinois, by the Illinois Commerce Commission.
10 Electric utilities did not historically,
11 and do not today, have a total monopoly on ownership of
12 generation, but there, in fact, was little development
13 of large-scale independent generation in this country
14 because the utilities controlled access to and
15 availability of the transmission network. The price of
16 the necessary transmission services was not conducive to
17 the independent generation of electricity.
18 The model for traditional regulation
19 of electric utilities is seldom a regulatory bargain.
20 The essence of the bargain was that in exchange for
21 governmentally granted monopoly service territory, the
22 electric utility was obliged to serve all retail
23 customers without discrimination and without delay at a
24 price set by the regulatory commission during periodic
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1 cases which became known as rate cases.
2 Rates set in such proceedings were
3 statutorily required to be, quote, just and reasonable,
4 unquote, both for the utility and for its customers.
5 The basic theory was to allow the utility to recover its
6 reasonable expenses as well as to provide a fair return
7 on the investment.
8 Focusing more specifically on the
9 state of Illinois, today we have nine investor-owned
10 companies that are certified as electric utilities. A
11 map on the far right shows that service territories in
12 the state of Illinois early in the last century split up
13 the state.
14 Commonwealth Edison is the blue, serves
15 the -- serves the northern part of the state, and by
16 far, most of the customers in the state of Illinois.
17 Illinois Power is the green area, serves many of the
18 urban areas in central and downstate Illinois. The
19 yellow area is Central Illinois Public Service, its
20 historical name. It was merged with the company that
21 provides power in Missouri and in the East St. Louis
22 area of Illinois two years ago. It is now
23 referred -- now known as AMEREN. The Peoria area
24 is the pink area and other parts of central Illinois is
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1 Certified Central Illinois Light Company or CCILCO.
2 In addition, I should note that some
3 cities, including commonly the city of Springfield,
4 operates their own electric utility and some areas of
5 the state are served by electric co-ops, which are, in
6 fact, owned by their customers.
7 For the first two-thirds of the 20th
8 century, rate cases generally resulted in a gradual
9 lowering of prices as utilities enjoyed the
10 efficiencies of technological improvements and
11 economies of scale. Generating plants were built
12 by each utility in anticipation of growth in
13 demand for electric power to meet their obligation to
14 serve.
15 In some circumstances, utilities chose
16 not to build their own generating plants, but to import
17 excess power from other utilities when doing so was, in
18 fact, less expensive.
19 In the '70s and '80s, things changed.
20 Unexpectedly higher costs associated with building and
21 operating nuclear plants resulted in significant
22 increases in the price of electricity for customers of
23 those utilities which chose to invest in nuclear power.
24 Other utilities faced varying degrees
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1 of increasing costs to comply with air pollution
2 standards and to keep up with general price inflation.
3 As a result, while the retail price of electric power
4 varied among utilities across the country and here in
5 Illinois, there were significant price increases for
6 most customers.
7 The price increases of the 1980s set the
8 stage for significant change in government regulatory
9 policy at both the federal and the state levels.
10 At the federal level, Congress enacted the Energy
11 Policy Act of 1992 making a number of changes in
12 national energy policy.
13 Of greatest interest, for purposes of
14 our discussion today, the new law gave the Federal
15 Energy Regulatory Commission -- I'll refer to them as
16 FERC -- clearly -- clear authority to require public
17 utilities owning transmission lines to make those lines
18 available to wholesale market participants who wished to
19 move electricity from one part of the grid to another.
20 This is generally called wholesale wheeling.
21 Following these changes to FERC
22 policy -- federal policy, the FERC issued its landmark
23 order referred to as Order No. 888 in 1995. Order 888
24 required electric utilities to implement open access,
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1 which means that access to the transmission grid had to
2 be -- had to be provided to any generator that wanted to
3 provide power.
4 Maybe I can give an example. If
5 access -- if a generator in Ohio, for example, wanted
6 to, in fact, provide power to Illinois, to customers in
7 -- to a utility in Illinois, it probably would -- it
8 would in turn supply to those customers the generator
9 and would have to buy transmission authority from the
10 utilities in Ohio and utilities in Indiana and the --
11 they didn't have to provide that to them before.
12 As a result of this order, they, in
13 fact, had to provide it and have provided it at
14 a fair price. This economically attractive
15 possibility, in effect, spurred non-utility
16 entrepreneurs to build new generating plants to
17 meet growing electric demand.
18 At the retail level, industrial
19 customers, who were faced with increasing international
20 competition in the late '80s and early '90s, strove to
21 cut costs including energy costs. Some looked longingly
22 at the price of wholesale power compared to the retail
23 prices they were paying to their utility. They went to
24 their state capitols requesting the right to purchase
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1 power on the open wholesale market. Significant changes
2 in state regulation happened first in California, then
3 in Pennsylvania, and other states.
4 In late 1997, the Illinois Electricity
5 Choice Law was enacted. Among other objectives, this
6 law was intended to spur innovation and drive down
7 prices through competition among Illinois' traditional
8 utilities and to attract new competitive power suppliers
9 to the state.
10 While the FERC's opening of the
11 transmission grid to greater wholesale power
12 transactions through Order 888 was a major impetus to
13 the competitive generation of electricity, the Illinois
14 Deregulation Law added to the economic attractiveness of
15 non-utility generation.
16 But perhaps even more of a factor in the
17 growing economic interest in peaker plants is the
18 increased peak demand for power. The remarkable
19 economic expansion of the past several years, coupled
20 with the proliferation of electronic devices in our
21 homes and offices, has increased the overall demand for
22 electricity.
23 While baseload capacity remains
24 adequate to meet base demand, peaking capacity has not
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1 expanded to keep up with increasing peak demand. As an
2 example, one day last July, July 30th, I believe, ComEd
3 set a new peak demand of 21,243 megawatts. Now, the
4 previous -- the previous peak in the 19,000s was 2,000
5 megawatts more, 10 percent more than what had been set
6 in the previous preceding peak year.
7 Usually, when you see a change in peak,
8 it's at one percent, maybe a half of a percent. When
9 you see a 10 percent change in one year, it was quite
10 phenomenal. For your information, a megawatt of power
11 serves approximately 500 homes at times of peak demand.
12 The midwest also experienced two very
13 warm summers in 1998 and 1999. Utilities throughout the
14 region had to pay very high prices for wholesale power
15 on peak demand days during those summers. Those prices
16 attract new peaker plant development. Natural gas has
17 become the fuel of choice for peaker generators.
18 Peakers are typically powered by gas-fired turbines,
19 similar in design, as you've heard, to aircraft jet
20 turbine engines.
21 As a matter of comparative economics,
22 the last least cost energy plan filed by ComEd with the
23 Commission was in 1996. Before that, the requirement
24 was discontinued with the 1987 Choice Act, identified
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1 combustion turbines as the least cost alternative for
2 construction of peaking capacity.
3 Modern gas-fired combustion turbines
4 cost about $400 per kilowatt of generating capacity
5 whereas new coal-fired plants are estimated to cost
6 about $1,600 per kilowatt of generating capacity, and a
7 nuclear generating plant costs between $2,000 and $5,000
8 per kilowatt of generating capacity.
9 During the '70s and '80s, federally
10 imposed restrictions on building gas-fired generation
11 existed because of perceived tightness in natural gas
12 supply. These restrictions had been removed. However,
13 a number of factors have combined to enhance the
14 economic attractiveness of gas-fired generation
15 including lower natural gas prices in the '90s --
16 however, it's not the case as we speak this summer;
17 improved efficiency of gas-fired generation units; and
18 the ease and speed of construction of gas-fired
19 generation plants.
20 Although the cost of natural gas has
21 risen, as I mentioned, the push for gas-fired
22 generation does not appear to have dampened. The
23 apparent environmental consequences of gas-fired
24 generation as compared to coal-fired generation in the
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1 absence of stigma and high costs associated with
2 nuclear plants has also contributed to the increased
3 economic desirability of gas-fired generation.
4 Furthermore, peakers are very flexible
5 in terms of their operating schedules. They can easily
6 be turned on and off as demand rises and falls. I got
7 to personally see one operated by Municipal Utilities of
8 Springfield that can be turned off and on by the
9 internet without actually having someone there. Their
10 relatively low capital cost permits them to provide high
11 capacity to sell into the market for short periods of
12 time when the market prices reflect peak demand.
13 Just as Illinois is a rail and air hub,
14 many of the major natural gas pipelines terminate in or
15 otherwise may be available to provide service to the
16 state. The middle map shows the natural gas pipeline in
17 the state and many of those which go into the Chicago
18 area.
19 In addition to ready access to fuel
20 sources, electrical generating plants requires access to
21 significant transmission capacity to move its product
22 through the market. The closer a combustion turbine
23 peaker is to a natural gas supply and electric
24 transmission lines, the less expensive it is to bring it
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1 on-line.
2 Public resistance to new power plant
3 lines, transmission lines, has reduced the
4 attractiveness of construction of those lines as
5 a way to increase power availability.
6 While the FERC's order guaranteed open
7 wholesale access to utility transmission lines, open
8 access has a price. Under the current FERC-approved
9 transmission tariffs, longer transmission hauls cost
10 more. For the use and the power, the more it costs the
11 company that is selling the power.
12 I would like to briefly address two
13 other subjects, if I could. One, for decades, electric
14 utilities would come to the Commission, Illinois
15 Commerce Commission, requesting the authority to grant
16 new -- to construct new generating plants in specific
17 sites.
18 Utilities sought a certificate of public
19 convenience and necessity for a new plant when they
20 were required to demonstrate at that time an economic
21 need for the additional generating capacity. A lot of
22 economic models forecasting of the demand for power were
23 admitted into that record. If they did, and the ICC
24 granted the authority, including its required eminent
L.A. REPORTING (312) 419-9292
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1 domaine, non-utility generators did not have to request
2 such authority, either before or after the '97 law.
3 Provisions of the Illinois law
4 addressing -- siting of electric generating facilities
5 have not changed. What has changed obviously is that
6 utilities themselves are no longer primarily trying to
7 build these plants. They're now trying -- they are now
8 trying to be built by the -- by the private sector
9 outletting utility industry. The FERC's order opened
10 the interstate system to wider access and made
11 non-utility generation economically attractive over
12 short distance.
13 One final point I want to touch upon,
14 which is a concern, I think, in part brought on by what
15 is going on elsewhere in the country which has to do
16 with the price of retail power, retail price of power in
17 Illinois.
18 The 1997 restructuring law froze the
19 rates for -- for base rates for customers at the 1996
20 level. They are, in fact, frozen here in Illinois
21 through the year 2004 under that law. That is
22 associated with many other components of the law that
23 are referred to technically in the law as the transition
24 period.
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1 Some of those rates in 1996, had already
2 been in effect for a number of years. During the
3 period that the utility rates had been frozen to date,
4 wholesale electric power prices throughout the country
5 and the midwest have been rising and it is anticipated
6 that those prices will continue to rise if, in fact, the
7 power supply in the country and in the area does not
8 keep pace with the demands for electricity.
9 At the beginning of 2005, I
10 anticipate -- we anticipate Illinois utilities
11 that -- that are authorizing the law to be permitted to
12 adjust the rates and they will come into the Commission
13 to request to do that to reflect the wholesale price of
14 power that is in place at that time, and as a result,
15 given -- if this were to happen today, there would, in
16 fact, probably be great arguments made to increase the
17 cost of electrical -- of retail power here in the state
18 of Illinois.
19 Therefore, as policymakers address
20 numerous issues related to the current boom in peaker
21 plant construction, I -- they should be aware of, in
22 fact, the need for reliable portfolio of electric power
23 supply sources that are adequate to meet demand.
24 I'd be happy to answer any questions
L.A. REPORTING (312) 419-9292
30
1 and to admit my comments and attach them after to the
2 record if that would be appropriate.
3 HEARING OFFICER JACKSON: That would be fine.
4 Your comments are so admitted. If you would, just pass
5 them down to the court reporter so she can mark them.
6 MR. FISHER: Thank you.
7 HEARING OFFICER JACKSON: Thank you. Would the
8 Board members and the Board's technical unit like to ask
9 any questions of Mr. Fisher at this time?
10 MS. KEZELIS: I have a question.
11 Thank you, Mr. Fisher, for coming here
12 today. Can you generally describe for the record the
13 regulatory framework for natural gas as it exists today?
14 MR. FISHER: Natural gas -- the natural gas
15 industry is -- is in addition regulated at the federal
16 level by the Federal Energy Regulatory Commission and at
17 the state -- the individual state levels by a public
18 utility commission better known as the Illinois Commerce
19 Commission.
20 The natural gas industry was, in fact,
21 at the wholesale level de-regulated in the 1980s.
22 In fact, the -- the model for the actions by the
23 Federal Energy Regulatory Commission was based on
24 actions they had taken which proved to be very
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31
1 successful in the 1980s. They regulate the transfer of
2 gas through pipelines -- through interstate pipelines
3 throughout the country and, in fact, is a very
4 competitive market. The prices of gas have come down.
5 I think today roughly between 40 and 50
6 percent of the customers in the state of Illinois --
7 retail customers in the state of Illinois buy their gas
8 not from a utility, but from another provider. Excuse
9 me. Forty to 50 percent of the gas, not of the
10 customers itself.
11 At the state level, the gas industry
12 is -- has been regulated, as I said, traditionally in
13 the judicial process in the electric industry.
14 Currently, we have had some pilot projects that
15 have gone around the state where customers -- where
16 individual utilities are allowing certain numbers of
17 customers and types of customers to, in fact, try to
18 provide -- buy gas at the retail level through
19 competitive suppliers.
20 Just last week, NICOR filed a proposal
21 with the Commission to open up the market for all
22 of their customers in the state of Illinois, which is
23 about half the -- half of the gas companies in the
24 state of Illinois.
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1 MS. KEZELIS: Thank you.
2 CHAIRMAN MANNING: Mr. Fisher, can you explain
3 what, if any, role the Commerce Commission now plays in
4 keeping track of what Illinois' energy needs are,
5 specifically to the state?
6 MR. FISHER: The commission -- the commission
7 prior to the '97 restructuring law had a formal
8 responsibility to have filed by each individual utility
9 what was called a least cost of planning, and basically
10 it was a 20-year forecast of power demand.
11 The '97 law took away that requirement
12 from -- from the utilities and, therefore, there is not
13 a formal role for the Commission at this point in terms
14 of the overall -- looking at the overall generation.
15 I would say that in my tenure of the
16 Commission, in 1998 -- the '98/'99 summers were very
17 hot and there was extraordinary pressures on the system
18 and we have worked very closely to staff of the
19 Commission -- the Commission has held several hearings
20 -- with the utilities monitoring the generation of
21 power.
22 When nuclear plants were down in 1998,
23 in 1999, because of operating concerns from the Nuclear
24 Regulatory Commission, there was a lot of pressure
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33
1 there.
2 Right now, we are monitoring the
3 development of both the existing plants in terms of
4 their operating, looking at the existing life. One
5 issue that's -- that we're looking at right now is the
6 -- each of the nuclear power plants in the state have a
7 licensed life at the NRC.
8 The question is whether or not the NRC
9 would consider lengthening those lives. Nuclear power
10 had gone through -- gone through a very interesting
11 cycle. It was -- it was originally going to be
12 individually metered. It turned out to be more
13 expensive than was thought. The plants had, you know,
14 a lot of trouble with operating.
15 Right now, the plants in Illinois are
16 being operated at an efficient rate, better than they
17 even have in -- in at least 10 years, if not longer.
18 And so some of the nuclear plants on the east coast
19 have, in fact, already applied to -- applied to the NRC
20 to lengthen those -- the terms of that.
21 But in answer to your question
22 specifically, there is not a formal statutory role to
23 continue least cost planning, but we are, in fact,
24 continuing to look at the demand for power and supply of
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1 power.
2 CHAIRMAN MANNING: Thank you.
3 MS. KEZELIS: I have one question, if I may,
4 Mr. Fisher.
5 You testified generally about a
6 de-regulation of the electric unit and the base rates
7 were frozen until the end of 2004.
8 Can you briefly describe for the record
9 what happens in 2005 under the laws currently in place,
10 and what role, if any, peakers would play in that so we
11 can continue to build or not? Can you expand upon that?
12 MR. FISHER: Well, what will happen is that the
13 utilities, I would suspect, sometime in 2004, will file
14 with the Commission a proposal to adjust their rates to
15 reflect current costs and these are the rates that are
16 for delivery of power primarily. The -- and so what
17 that will -- will be reflective of what the cost of
18 power is at that time.
19 The cost of power is simply a function
20 of supply and demand. As we're seeing right now, we
21 had -- we have kind of an ironic situation, the last
22 two winters have been very mild, which as a result, the
23 natural gas industry has cut back on exploration and
24 discovery of new gas supplies. We're now going into a
L.A. REPORTING (312) 419-9292
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1 winter and looking at a very high priced -- looking at
2 probably very high prices for natural gas as a result of
3 that because -- just to meet normal demand.
4 The situation we have throughout the
5 country in the California area this summer, they're
6 having extreme heat and, therefore, facing some
7 difficulties with situation.
8 They, in fact, de-regulated their --
9 they have taken on a different approach to
10 de-regulation than we have and as a result, some of
11 that -- some of those costs of wholesale power, in
12 fact, is being passed on directly to the retail
13 customers and there has been some feedback from the
14 public about it.
15 MS. KEZELIS: Okay.
16 MR. FLEMAL: Okay.
17 You mentioned that there has been an increase in
18 the peak demands over the last several years that has
19 been a thousand megawatts. Has there been a similar
20 change in the base-load demand?
21 MR. FISHER: Base-load demand has also
22 increased, yes, over that period of time. It -- one of
23 the things that's interesting, and I don't have the
24 direct statistics, but there was a report done by the
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1 Federal Energy Regulatory Commission following the price
2 spikes in the summer of 1998.
3 One of the observations that they made
4 was that in the midwest, the -- the demand for
5 electricity over the '90s, had grown at a rate faster
6 than the rate in the nation as a whole and much faster
7 than the rate on the coast. I'm just reflecting again
8 the economy expansion that occurred during that time
9 decade.
10 MR. FLEMAL: Have the state utilities been able
11 to meet that increase in base-load demand?
12 MR. FISHER: In base-load demand to date, yes.
13 MR. FLEMAL: But not peak?
14 MR. FISHER: When the plants are operating,
15 which they are today.
16 We did have a situation in 1990 to 1998,
17 I think in 1999, when the major utilities in the state
18 because, as I mentioned, nuclear power plants were not
19 operating due to NRC concerns, that the utilities were
20 importing substantial amounts of power and -- but that
21 is not the case today.
22 In fact, in the summer of 2000, the
23 midwest and in general, Illinois specifically, when we
24 have had a few hot days, and they've been very limited
L.A. REPORTING (312) 419-9292
37
1 this summer, have -- have had plenty of excess in
2 reserves.
3 MR. FLEMAL: You used a phrase in your comments
4 that there is a need for a reliable portfolio of
5 electrical power supply sources. I take it you're
6 including in there as one of the portfolio elements the
7 peaker plant, the peaker power source?
8 MR. FISHER: I think -- yes. I think it's --
9 yes. I guess I don't have any particular -- the
10 Commission doesn't have any particular preference
11 of one power source over another, but I think it is
12 important that the demand for power be considered
13 as part of the equation when you are trying to decide
14 your -- you're trying to address your issues.
15 MR. FLEMAL: Does the Commission have any
16 information on the projected magnitude peak demand? Is
17 that -- is the peak demand going to grow and at what
18 magnitude?
19 MR. FISHER: We -- as I said, we no -- we're no
20 longer required to go through this process of least cost
21 planning. So there is -- there is no formal forecast of
22 that, but we, in fact, have been working with -- working
23 with utilities in trying to look at this issue in an
24 informal basis.
L.A. REPORTING (312) 419-9292
38
1 But so I guess the answer to your
2 question do we have a formal estimate of what peak
3 demand is going to be in Illinois two years, five years
4 from now, not at this time, we do not. But it is -- it
5 is something obviously of great interest to us.
6 MS. KEZELIS: Is that a role that is partially
7 played for the midwest area?
8 MR. FISHER: There is an organization -- again,
9 you can kind of see on the map here. There is an
10 organization that is, in fact, responsible for
11 reliability of the midwest. There are several of these
12 organizations throughout the United States.
13 One of the things that we're -- and, in
14 fact, that is their job on a full day, long-term basis
15 and on a daily basis is to manage the flow of power.
16 Power, you know, when -- there has been
17 a lot of heat in the south. There has been a lot of
18 power flowing from Minnesota and Illinois down to the
19 southern states and that is controlled through MAIN.
20 The -- one of the things that is going
21 on today is that there is a change, again part of the --
22 what is going on at the federal level, that the order --
23 the traditional organizations such as MAIN are kind of
24 being phased out in favor of these new independent
L.A. REPORTING (312) 419-9292
39
1 transmission organizations.
2 That is because MAIN has been primarily
3 operating by utilities. It gets into that issue I
4 mentioned before where the independent power producers
5 want to be able to have independent access to the
6 transmission network.
7 MR. MELAS: Mr. Fisher, I would presume that
8 particularly this northeastern Illinois area, a
9 significant portion of the baseload is satisfied
10 through the use of the nuclear generator.
11 What is the time frame when the NRC is
12 going to be asking these plants to cease operation?
13 MR. FISHER: The -- I don't have the -- the
14 exact date of the expiration. I think the first one is
15 within the next 10 years. There is already a couple of
16 units that have already been, in effect, shut down, the
17 Dresden unit and the Zion unit.
18 But I would be happy to provide the --
19 provide the Board with the specific dates of the
20 licenses of all of these plants.
21 MR. MELAS: Well, are there any specific plans
22 being promulgated now -- being made now to replace the
23 power that these plants are generating as they go
24 off-line?
L.A. REPORTING (312) 419-9292
40
1 MR. FISHER: There are -- there are no coal or
2 no nuclear power plants under construction or,
3 to my knowledge, contemplated at this point. That is an
4 issue that we'll be dealing with in the coming decade.
5 MR. MELAS: Thank you.
6 HEARING OFFICER JACKSON: Just for the record, I
7 do want to note MAIN that was referred to earlier
8 stands for Mid America Interconnected Network, for any
9 of you who might not know and for the court reporter.
10 MR. FISHER: Thank you.
11 MR. RAO: Mr. Fisher, do you have any
12 information about how much energy is imported into
13 Illinois and how much energy is sent from utilities in
14 Illinois to other states?
15 MR. FISHER: The -- I don't have -- we --
16 for purposes of summer planning and so forth, we have
17 information provided to us by the individual utilities.
18 I do not have the specific information in the aggregate.
19 It is possible that that information
20 is available through the Federal Energy Regulatory
21 Commission and I'd be happy to research that for you
22 and to provide that.
23 Increasingly, we're finding that the
24 information which generally used to be very publically
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41
1 available about transactions of power here and there is
2 the -- the industry itself doesn't want that to be
3 available, because that, in fact, gives a competitive
4 advantage to your competitors. But to the extent that
5 that information is available, I'd be happy to get it
6 and provide it to the Board.
7 MR. RAO: Thank you. And on Page 3 of your
8 pre-filed testimony, you referred to electricity choice
9 law. Would it be possible for you to provide a citation
10 to this law for the record?
11 MR. FISHER: I will be happy to do so.
12 MR. RAO: Thank you very much.
13 MS. MCFAWN: You were talking about
14 forecasting. How accurate is forecasting for demand
15 peak and base-load where before in 1997, that
16 requirement for the ICC was removed?
17 MR. FISHER: I guess the forecast that -- the
18 long answer to your question is that in a -- in the
19 early period of the '60s and the '70s, the forecast for
20 demand was forecasted to increase at about a six
21 percent rate on annual basis. That didn't happen.
22 That -- and -- and as a result for a
23 period of time in the 1980s, we had an excess capacity
24 of power here in the state of Illinois.
L.A. REPORTING (312) 419-9292
42
1 The forecasts that were made in the early '90s and the
2 last forecasts that were made in the mid '90s have
3 proven to be generally for base-load demand
4 are generally accurate.
5 MS. MCFAWN: Did they foresee the peak demand
6 that you referenced in your testimony?
7 MR. FISHER: No, they did not. That was
8 not -- that was not projected. The -- part of that is,
9 in fact, too, in 1998 -- I've learned a lot about the
10 weather in this position.
11 In 1998 and 1999, we had two of the
12 hottest summers certainly in the decade and -- and, in
13 fact, in our workings with Commonwealth Edison over the
14 last year, we have been debating the issue about how
15 they should design their overall system, not just the
16 generation, but also the distribution in terms of what
17 is, in fact, the appropriate temperature.
18 Traditionally, the temperature was set
19 at a 95-degree level. Now -- they are now redesigning
20 it for 99. A forecast I saw from the -- from a U.S.
21 government agency reading about the century -- about the
22 temperature changing over the coming century, it
23 suggests maybe we should sit down and talk some more,
24 so.
L.A. REPORTING (312) 419-9292
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1 MS. MCFAWN: You had mentioned also that
2 transmission tariffs makes longer transmissions more
3 costly. Could you elaborate on that?
4 For instance, what I'm wondering about
5 in connection with that statement is what are those
6 tariffs and will they -- how will they affect building
7 peaker plants?
8 MR. FISHER: The tariffs were filed with the
9 Federal Energy Regulatory Commission and basically the
10 tariff -- when you pass -- it's kind of like toll roads.
11 When you try and pass your power from a site that is in,
12 for example, from Ohio to Illinois, you're going through
13 several different utility companies, each of which owns
14 the individual transmission lines.
15 So you're required by the tariffs filed
16 by those utilities to pay -- to pay, in effect, a cost
17 to those. One of the things that is being looked at
18 today is the idea of establishing through these
19 independent transmission organizations a way of avoiding
20 that what is referred to as pancaking of rates to try
21 to figure out a way -- try to figure out a way of
22 reducing the overall costs for purposes of
23 transmission. And I'm not sure I answered your
24 question.
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1 MS. MCFAWN: But you explained how it works for
2 me. Right now, do the tariffs discourage long haul
3 transmission or encourage it?
4 MR. FISHER: I think they encourage it more
5 than they used to. I think that independent power
6 producers -- and I understand you will hear from some of
7 them -- would argue that the -- that there is a need for
8 more changes in the -- at the federal level.
9 MS. MCFAWN: Thank you.
10 HEARING OFFICER JACKSON: Any other questions?
11 MS. MCFAWN: I have one question.
12 MR. FISHER: Sure.
13 MS. MCFAWN: I don't know if you can answer it
14 or not. I've also heard there was some discussion about
15 a natural gas pipeline across Lake Michigan. Would the
16 ICC regulate that or be involved in that decision
17 making?
18 MR. FISHER: No. The pipeline that is being
19 proposed would be outside of the state of Illinois,
20 first of all. It goes, as I understand, from Indiana to
21 Wisconsin, and it would be -- it's a Federal Energy
22 Regulatory Commission, because it's an interstate
23 pipeline, they would be the ones that would have to --
24 that would have to sign off on that.
L.A. REPORTING (312) 419-9292
45
1 If the -- the Illinois Commerce
2 Commission citing responsibilities are -- do have -- we
3 had a situation a couple of years ago where there was a
4 proposal to build an oil pipeline from Canada to the
5 Joliet refinery by the Lake Head Company. They came to
6 the Commission requesting eminent domain authority
7 before the public -- for the Commission to find it was
8 in the public interest.
9 The Commission had hearings on that and
10 decided not to grant eminent domain authority for that
11 particular line, but I understand the line is in fact,
12 being built anyway, just not as straight as it was
13 originally proposed.
14 MS. MCFAWN: Interesting.
15 HEARING OFFICER JACKSON: Anything else?
16 Okay. I do want to note on the record
17 that the Commerce Commission did file their pre-filed
18 testimony yesterday along with the motion to file
19 instanter. Just for the record, the motion to file
20 instanter is granted.
21 Thank you, Mr. Fisher.
22 MR. FISHER: Thank you.
23 HEARING OFFICER JACKSON: Okay. At this point
24 we'll ask the representatives from the Illinois
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46
1 Environmental Protection Agency to step forward to the
2 witness table, the presenter's table.
3 We'll go off the record for a few
4 minutes and let them set up.
5 (Off the record.)
6 HEARING OFFICER JACKSON: What we're going to do
7 with the Environmental Protection Agency is ask that
8 each of the presenters today offer and make their
9 presentation to the Board and then when all the
10 presentations have been completed, then we will address
11 our questions to the panel.
12 Okay. Please proceed.
13 MR. PHILLIPS: Good morning. Madam Chairman
14 Manning, Madam Hearing Officer, my name is Scott
15 Phillips. I'm an attorney with the Illinois
16 Environmental Protection Agency.
17 This morning, the Agency will be
18 presenting testimony --
19 THE COURT REPORTER: I can't hear you. Please
20 speak into your microphone.
21 MR. PHILLIPS: This morning, the Agency will be
22 presenting testimony from seven witnesses. Our first
23 witness will be Director Thomas Skinner. Our second
24 witness will be Christopher Romaine from the Bureau of
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1 Air. The third witness will be Robert Kaleel from the
2 Bureau of Air. The fourth witness will be Greg Zak from
3 the Illinois EPA Noise Program. Our fifth witness will
4 be Stephen Nightingale from the Bureau of Water. The
5 sixth witness will be Tom Marvel from the Bureau of
6 Water presenting testimony on groundwater issues. And
7 our seventh witness will be Todd Marvel from the Bureau
8 of Land.
9 We have two group exhibits that I would
10 like to get identified, marked, and into the record so
11 we don't have to worry about those later on.
12 The first is Illinois Environmental
13 Protection Agency Group Exhibit 1, which consists
14 of the seven written pre-filed testimony that we
15 submitted to the Board and I'll hand those to the court
16 reporter at this time.
17 HEARING OFFICER JACKSON: They will be so
18 admitted.
19 MR. PHILLIPS: The second group exhibit will be
20 -- consists of the 20 exhibits that the Agency has
21 already pre-filed with the Board and I believe those
22 exhibits will be or are currently available on the
23 Board's website as well. So I will hand those to the
24 court reporter at this time.
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1 HEARING OFFICER JACKSON: Exhibit 2 is also
2 admitted.
3 MR. PHILLIPS: I would also like to note that
4 before we begin, there is just a correction on some
5 numbers that were in Director Skinner's testimony
6 regarding the number of permit applications. We have
7 some more current information and thought we would
8 provide those at this time.
9 There are permit applications submitted
10 to the Agency for 46 sites. Twenty-nine permits have
11 been issued. There have been two withdrawals. One
12 permit application has expired and there are currently
13 18 permit applications pending for peakers. Some of
14 these sites have more than one permit application that
15 is why the numbers don't add up to the 29.
16 Director Skinner?
17 MR. SKINNER: Good morning. I'd like to thank
18 all of you for the opportunity to appear before you, if
19 for no other reason than the Agency has certainly been
20 taking the brunt of the peaker heat, so to speak, over
21 the course of the last 18 months, and it's nice to have
22 someone to share the pure pleasure with, I guess.
23 To those members of the audience who
24 don't often visit this particular building and thought
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1 or made the statement that we were having this cool
2 summer here, I would always welcome you to the State of
3 Illinois Center.
4 Because the transcript does not always
5 reflect attempts at humor, I'm going to forego the
6 obligatory joke on behalf of the Environmental
7 Protection Agency for another peaker plant in the air
8 conditioning system in this building. Besides that's
9 implicating, I would hate to have the videotape be
10 played at a later date.
11 You have before you or in your offices
12 my full written testimony as well as the written
13 testimony of my colleagues up here with me. I don't
14 intend to read that testimony verbatim into the record
15 here today. You'll be even happier to know that my more
16 technically oriented colleagues do not intend to read
17 their testimony into the record either. Instead, we're
18 going to provide you with summaries.
19 One of the things you probably noticed
20 in the written testimony is that we have not really
21 made any recommendations with regard to peaker plants.
22 And to the extent that it was possible not to do so, we
23 really haven't offered opinions with regard to peaker
24 issues up to this point.
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1 We did that quite intentionally. We
2 wanted to provide you with some sort of background on
3 peakers and the facts of the situation to the extent
4 that we had them in our possession.
5 On the other hand, having said that,
6 we're more than happy to take questions and in
7 adherence to the policy set by the hearing officer,
8 we'll be glad to take those questions after we've all
9 said our peace, I guess. We'll be glad to offer you our
10 opinions if you want our opinions. Some of us are
11 probably more easier than others to offer those
12 opinions, but if you ask us a question, we'll be glad to
13 answer it.
14 What I'll also do this morning in
15 addition to giving you a brief overview of peakers, is
16 to provide some comments as well on what I'll call local
17 land use and citing issues related to peaker
18 facilities. And I'm going to offer that perspective
19 from my current position as director of the Illinois
20 Environmental Protection Agency, but I will admit to
21 you up front that those -- that that perspective will
22 probably be colored by my experiences both as an
23 elected local official and in my former life as an
24 attorney who represented, at various times, folks on
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1 both sides of citing issues. So you can filter it
2 yourselves, I guess, but I'll try to give you a --
3 really one prospective on local citing.
4 In the past year and a half, you guys
5 have seen a number, and it's an increasing number
6 of permits, for what we call peaker power plants or
7 natural gas-fired power facilities. We seem to get
8 more every day. The current total is, as Scott said,
9 46. Sometimes we say 50. Sometimes we say 42. It
10 really depends on how you interpret what a facility is
11 and facilities are often made up of specific units.
12 Scott gave you the numbers as to
13 issuance and withdrawal of the various permits. You
14 know, please note that my comments are going to be
15 directed specifically at natural gas-fired peaker power
16 plants, which is the subject of, as I understand it, of
17 these proceedings.
18 Peakers operate only during peak demand
19 situations such as on hot summer days when residential
20 and commercial usage of electricity creates more demands
21 than the baseload plants that exist in Illinois make
22 available.
23 I -- one of the things I found in the
24 time that I've been in my current position is that I
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1 have a series of regular correspondents, whether they be
2 from state government or from the citizens of the state
3 at large, and one of my somewhat regular correspondents
4 wrote to me a while back and said, in essence, in
5 talking about peaker plants, you know, the problem since
6 deregulation is that nobody is regulating these
7 facilities.
8 It really caused me to stop and think
9 about it. I found it kind of funny in a way, the way it
10 was put, juxtaposing the de-regulation with the
11 regulation. I understand what he was driving at, and I
12 have to say that to some extent, I disagree with that.
13 These facilities are regulated. They are regulated by
14 our Agency, but they are regulated only with our Agency
15 and with regard to certain issues, largely related to
16 air, and as we'll hear from Christopher Romaine in a
17 little while, the Bureau of Air does some extensive
18 reviews when we get a peaker application.
19 The various technical and policy issues
20 with regard to peaker plants can be complex and there is
21 a lot of opinion on this. It's a developing situation,
22 but I can tell you that from the Agency's perspective,
23 from a regulatory standpoint right now, based on our
24 given authority, it is fairly straightforward.
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1 In the broadest sense, we categorize it
2 as three basic principals that we implement at this
3 point. Number one is that no permit shall be issued
4 for the construction of a peaker plant unless the
5 permit applicant proves that the facility will not
6 violate existing environmental laws and regulations.
7 The second principal is peaker plants
8 must be constructed and operated in full compliance
9 with their permits and in full compliance with existing
10 environmental laws and regulations.
11 And third, that based on our growing
12 experience and knowledge regarding these facilities, we
13 as an agency are in the process of regularly
14 reevaluating the standards that exist out there right
15 now in order to make sure that we're adequately
16 protecting human health and the environment and
17 maintaining consistency with the national air quality
18 standards. Now, I want to touch on each of those
19 principals fairly briefly this morning.
20 With regard to the first principle,
21 compliance with existing laws and regulations with
22 regard to the environment, all peaker plants require air
23 emission permits in order to construct and operate from
24 our Agency. Peakers must pass air emissions and
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1 therefore they're required to come to the state and to
2 the Illinois EPA.
3 Depending on the characteristics of
4 the particular project, some peaker plants require
5 permits from our Bureau of Water as well if they have
6 discharge, water discharge. We would consider what is
7 commonly referred to as SPDS permit.
8 Groundwater withdrawal issues, which
9 can exist with regards to some types of peaker
10 facilities, are somewhat A different animal. Rick Cobb
11 from our Bureau of Water will talk about that
12 a little bit. We do not have authority right now over
13 the ground leak withdrawal of groundwater, groundwater
14 consumption of Illinois.
15 As you all are all too aware, I guess,
16 Section 39(a) of the Environmental Protection Agency
17 states that, quote, it shall be the duty of the Agency
18 to issue a permit upon proof by the applicant that the
19 facility will not cause violation of the act or of
20 regulations, unquote, promulgated thereunder.
21 When we receive an application for a
22 permit to construct a peaker or for any structure for
23 that matter, we review the application to determine
24 whether the proposal will comply with applicable state
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1 and federal laws and regulations.
2 Where the permit application does not
3 prove compliance and where the applicant cannot or
4 chooses not to correct the problem, we deny the permit.
5 Where the permit application indicates
6 compliance, on the other hand, by law, we have to issue
7 the permit. However, we may and we often do include in
8 the permit conditions that limit, to some extent,
9 certain aspects of the operation of the project such as
10 the number of hours that the equipment may operate or
11 the parts per million of the emission or discharge of a
12 pollutant into the ambient environment. All of this is
13 intended to ensure compliance with applicable state and
14 federal laws and regulations.
15 Public participation is an important
16 part of our permit process and that's particularly true
17 with regard to peakers. A number of residents of the
18 localities where it is independent power producers
19 sought to build new peakers have expressed their
20 opposition, have expressed it eloquently and may have
21 even expressed it loudly at times.
22 Concerns raised included emissions from
23 peaker plants, the impact of those emissions on local
24 air quality, impact on regional air quality, the impact
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1 of those emissions on their health, and our
2 interpretation and application of the regulations
3 providing for permitting of these. Our testimony
4 in these proceedings will address these concerns.
5 In addition, members of the public
6 have also raised other land use issues, what I
7 would term perhaps environmentally related, but
8 not environmental issues such as esthetics of the
9 proposed facilities, local zoning, citing, affect
10 on property values and issues of that sort. I will
11 touch on those issues briefly in a little while as
12 well.
13 The second principal you may recall is
14 that peaker plants must be constructed and operated in
15 full compliance with their permits and full compliance
16 with environmental laws and regulations. To further
17 this objective, we have inspectors and other compliance
18 personnel who investigate possible violations. If we
19 find violations at a facility, we can tell the facility
20 to correct them and if appropriate, we refer the matter
21 to the Office of the Attorney General for the state of
22 Illinois for prosecution and for a civil penalty.
23 Ordinarily, unless a particular
24 compliance problem is identified of a peaker, we would
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1 inspect facilities of this type and of this size every
2 three years. In the interim, we would analyze the
3 quarterly data which is required to be submitted on
4 facilities operations.
5 However, because of the present number
6 of peakers appearing in Illinois in a relatively short
7 period of time, their relative proximity to residences
8 in some instances, we have decided as a policy matter to
9 conduct annual inspections rather than every three years
10 of each natural gas-fired peaker plant. This, we hope,
11 will allow us to identify and quickly address any
12 violations of permitting conditions and environmental
13 laws and regs, and we will, of course, continue on a
14 quarterly basis to monitor very closely the data that we
15 receive with regard to the ongoing operations of
16 any and all of these facilities.
17 The third principal I referred to
18 earlier is continual eval -- continual re-evaluation. I
19 have to say over the past 18 months, we as an Agency,
20 and I as director have spent as much or more time
21 dealing with peaker issues as any other single subject.
22 We understand and we understand very
23 clearly that there is significant concern among the
24 residents of Illinois and among the folks who live near
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1 these proposed peakers about the air quality and health
2 effects that these facilities may have. Now, after a
3 thorough analysis of computer runs and continuing that
4 analysis and modeling, we do not believe the plants that
5 have been proposed to date and permitted represent
6 significant health or environmental threat.
7 However, as we gain additional
8 experience with peakers, we will regularly re-evaluate
9 whether the air requirements provide protection of
10 health and environment, and be -- are consistent with
11 national air quality standards. If and when we find the
12 existing requirements are lacking, we either
13 administratively address the problem, if we have the
14 legal authority to do so, or we will propose appropriate
15 regulatory changes to the Board or legislative changes
16 to the Illinois General Assembly.
17 As examples of the first of those, since
18 January of this year, we have made two administrative
19 changes in the way we review peaker permits.
20 First, we have decided to hold public
21 hearings on each construction permit. This is not a
22 measure that is required by law. These proceedings are
23 discretionary but as -- we really wanted to -- I've had
24 more important acts that I've undertaken, but I have
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1 undertaken to exercise that discretion across the Board
2 with regard to peaker plants.
3 We now, as a matter of course, have a
4 hearing before we take final action on a permit. That
5 helps us in two ways. Number one, it allow us to
6 receive additional information that might not otherwise
7 be obtained and that sometimes does happen. And it also
8 allows the peaker developers, proposed operators, if you
9 will, and the Agency, to some extent, to provide
10 additional information about the project and about our
11 process for permitting the project to the public and
12 specifically to residents in the area where the project
13 is proposed.
14 The second change that we have
15 undertaken is that we require applicants of peaker
16 permits to perform and submit for our review a
17 comprehensive analysis of the potential environmental
18 effects. In essence, it's modeling the effect of the
19 proposed facility on air quality.
20 We require that this modeling include
21 emissions from all major sources near the proposed
22 peaker source as well as all others proposed new
23 electrical generating plants in the area. Prior to
24 January of this year, this type of analysis was
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1 performed only on so called major projects, a category
2 that most of the peaker proposals do not fall.
3 Again, this change is not mandated
4 by law, but what we decided to do is institute that
5 requirement and to require the information as an
6 additional safeguard and as an additional tool for us to
7 use to consider these applications.
8 Finally, on a related issue, the
9 effect on air quality of peakers, but also of other
10 similar sources, in July of this year, as you all know,
11 we proposed a rule to the Board to reduce statewide
12 nitrogen oxides, or NOx, from electrical generator
13 facilities among which peaker plants are a subcategory.
14 This proposal was in response to US
15 EPA's call for state implementation plans requiring
16 significant reductions in emissions or the so called
17 NOx SIP call, an area in which Illinois, as a state,
18 has been the leader nationwide among the states and has
19 put in a significant amount of work over the course of
20 the past five to 10 years.
21 Now, NOx is the main air pollutant
22 produced by these peakers. There are other emissions,
23 but NOx is the predominant emissions. The portion of
24 the NOx SIP call applicable to peaker plants establishes
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1 caps on NOx emissions from electrical generating units
2 or EGUs.
3 The owners and operators of these units
4 must relinquish an allowance for each ton of NOx
5 emitted between May 1st and September 30th, usually
6 categorized as the ozone season beginning in the year
7 2003.
8 If adopted, this rule will result in a
9 reduction of NOx emissions during the ozone season from
10 over 200,000 tons statewide to less than 31,000 tons
11 statewide, which I think by any measure is a
12 significant improvement and you will certainly diminish
13 overall the effect that NOx has on air quality in
14 Illinois.
15 Switching gears somewhat, I promised to
16 talk about local land use proposals and sitings earlier
17 and I would like to take the opportunity to do that.
18 As I mentioned during our public comment
19 period, we frequently receive comments regarding the
20 potential effect of peakers on things like aesthetics,
21 appearance, traffic, property values, things that the
22 folks in the local community would be expected to be
23 concerned about.
24 I will state first that the Agency is
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1 not authorized by state law to consider these types of
2 issues in its review of permit applications. These
3 types of land use issues are left to local units of
4 government. And while we attach tradition occasionally
5 to these air permits, we don't have the latitude to
6 impose conditions that are unrelated to air quality.
7 Now, while important, these types of
8 issues that I refer to historically have been left by
9 the legislature to the local units of government on the
10 basis that local government better evaluates these
11 matters in determining its citizens preferences.
12 I'm particularly sensitive to the
13 separation of local and state functions because in my --
14 in addition to my role at the Agency, I sit on the
15 village board in a community north of Chicago, Lake
16 Bluff, and I know when I take my state bureaucratic hat
17 off and put on my village hat, the last thing I want and
18 the last thing my village wants is some bureaucrat in
19 Springfield telling us how we have to use our land, how
20 we have to spend our money, or anything else for that
21 matter.
22 As a result of that experience, I -- as
23 I travel around to the various parts of the state,
24 talking to groups and individuals with regard to peaker
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1 plants in other areas, I try to emphasize the power the
2 vote communities currently do possess through local
3 zoning and land use to control whether peakers can be
4 built.
5 I have tried to emphasize that the
6 Illinois EPA air permit to construct a peaker
7 plant does not supercede a local zoning land
8 restrictive barriers. There are two separate issues,
9 two separate areas of responsibility. The fact that the
10 applicant may have met the air quality requirement or
11 air emission requirements with regard to peaker plants,
12 and, therefore, we issue a permit does not mean we've
13 addressed the local issues. That's left to the locals.
14 In establishing this docket, the Board
15 would like to comment on the following issues and that
16 is a specific issue. Should new or expanding peaker
17 plants be subject to citing requirements beyond
18 applicable zoning requirements.
19 By this question, I assume that the
20 Board was referring to what is commonly called the
21 SP172 or local citing process with regard to pollution
22 control facilities.
23 Our Agency has no direct involvement in
24 the actual SP172 hearing process. Those hearings are
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1 conducted locally. However, our role is essentially
2 limited to making sure that the permit applicant
3 submits approval of local siting was obtained pursuant
4 to SP172.
5 We can, though, I think, provide the
6 Board with a summary of the circumstances that gave
7 rise to the existing state requirements for siting that
8 are contained in the Environmental Protection Act and we
9 have, in fact, done that in the written testimony that
10 we submitted.
11 This summary, I hope, will provide a
12 useful context from which you as Board members can
13 evaluate whether peaker presents similar issues to
14 pollution control facilities and whether they address
15 warrant sections from beyond local zoning.
16 What I'll do, I think, right now is
17 provide maybe a summary of the summaries as follows. In
18 1981, the Environmental Protection Act was amended to
19 create the requirement that permit applicants for a
20 pollution control facility must first obtain local
21 citing approval from the applicable unit of the local
22 government that is located within the municipality,
23 that is a special hearing panel of municipality, the
24 facility is located in an unincorporated area of the
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1 county, it would be a special hearing panel of
2 essentially the county board.
3 The concept of local siting I referred
4 to embodied originally in Senate Bill 172. It was
5 later enacted into law on November 12, 1981, but has
6 been in the industry, I think, commonly referred to as
7 SP172 since then.
8 Prior to 1981, the comments of local
9 authorities in Illinois were not binding on the state
10 and specifically were not binding under Illinois
11 Environmental Protection Agency in the siting and
12 permitting of sanitary landfills and other pollution
13 control facilities such as transfer stations and
14 incinerators.
15 SP172 dramatically changed that
16 scenario, or dramatically changed the permit process by
17 requiring the county or municipalities in which the
18 facility was located to conduct hearings, specifically
19 on the proposed project in order to determine whether
20 the facility met certain enumerated statutory criteria.
21 The Agency may not issue development or
22 construction permits until those criteria are met and
23 local siting is obtained. SP172 resulted in division of
24 decision making responsibility and authority between
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1 local government and the state.
2 The Agency itself acknowledged and
3 continues to acknowledge that it does not have the same
4 degree of local land use expertise that local units of
5 government do. By splitting this authority, local
6 governments and local citizens could then determine
7 whether a proposed facility is appropriate to their
8 specific area.
9 Section 397.2 of the act, which many of
10 you are familiar, provides that local authorities are to
11 consider nine criteria in reviewing applications for
12 siting approval.
13 Section 39.2(g) also provides siting
14 approval procedures, criteria and appeal procedures to
15 be followed. The local siting authority may develop its
16 own siting procedures, but only if those procedures are
17 consistent with the act and if they augment or
18 supplement rather than supplant the existing state
19 requirements.
20 The end result of placing 172 siting,
21 local siting's approval in their permitting issuing
22 process was to place local government in the role of
23 making all relevant decisions regarding location,
24 suitability for a proposed facility either to the local
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1 siting approval process or through tradition zoning
2 ordinances.
3 Now, peakers are currently not subject
4 to SP172 because the natural gas-fired peaker plant
5 does not meet the definition in the statutes of a
6 pollution control facility. Natural gas used in the
7 peaker fashion does not meet the definition of a waste.
8 Hence, the question of, as we sit here today, whether
9 they should be subject to SP172 or something similar.
10 Now, as I pointed out earlier, it's not
11 to say, though, that these facilities are exempt or
12 preempted from any kind of restriction as to land usage
13 because the mere fact that SP172 does not apply, does
14 not mean the local zoning doesn't apply and does not
15 relieve the peaker applicant from going to the local
16 community in order to assure that it is compliant with
17 all necessary zoning approvals as were necessary in
18 obtaining either a special use permit or some other sort
19 of zoning changes from the local government. The normal
20 zoning process still applies in these instances.
21 When I've made that local control pitch
22 in various places to various groups, I've heard
23 essentially two basic objections. The first is that
24 most local government are not sophisticated enough to
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1 undertake the necessary analysis with regard to these
2 peaker facilities.
3 The second is that if a peaker is
4 located on the edge of town, residents of the adjacent
5 community do not have a meaningful opportunity to impact
6 its neighboring community's land use decision.
7 To offer an opinion in the first
8 instance, as to the former, I disagree with all
9 due respect. Local governments address the aesthetic
10 issues, traffic issues, property value issues every day.
11 To a large extent, that is what local governments are
12 there for, to kind of keep a large part of their
13 function.
14 Now, while local communities can
15 undertake air analysis separate from the air analysis
16 that we undertake if they so desire and can impose, in
17 fact, through their local process, stricter
18 requirements, if they so desire, it is not necessary
19 that they do that. There is a logical splitter of
20 responsibility. The Agency is equipped to deal with
21 the statewide, regional and local air issues while
22 local government can deal with the traditional local
23 air issues.
24 On the other hand, there are instances
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1 where I think, in fact, communities have undertaken
2 these separate analysis. There's a current situation up
3 in Libertyville, Illinois. Within a facility up there,
4 there is an example where I think a great deal of time
5 and money has been expended by the local community in
6 attempting to determine whether or not the facility is
7 desirable for them as a community and some of what
8 they've undertaken is what I would describe as technical
9 analysis that sometimes is left to us, but obviously
10 sometimes it is undertaken by the local community as
11 well.
12 As to the second objection, perceived
13 lack of influence over existing government, I will
14 fully agree that this is a legitimate issue and is
15 something that the Board and perhaps the general
16 assembly ought to consider.
17 However, it's also an issue that goes
18 beyond peaker plants. It's an issue that existed
19 in the SP172 context as well. It's an issue that has
20 been -- there has been complaints about over the course
21 of time. Some communities variably deal with it better
22 than others.
23 Libertyville is an example where folks
24 that live outside of the actual municipality of
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1 Libertyville had a fair amount of success in getting
2 their viewpoints across to the local bodies that are
3 going to make those procedural -- those land use
4 decisions up there, but having said that, I think it is
5 an issue that deserves further consideration.
6 I think what I'll do is stop there. If
7 you have questions, I, of course, will be glad to take
8 them now, but Hearing Officer Jackson being in charge
9 has decided to hold them off and I'll take a breath and
10 turn it over to Chris Romaine who is going to talk about
11 air issues.
12 HEARING OFFICER JACKSON: Before you start,
13 I just wanted to say we're probably going to take a
14 lunch break around 12:30 today. We'll go ahead and get
15 started with the next witness now. Obviously, we won't
16 finish before lunch.
17 Okay. You may proceed.
18 MR. ROMAINE: Good morning. Thank you for
19 allowing me to speak today. My name is Christopher
20 Romaine. I have been manager of the utility unit
21 in the air permit section since 1998.
22 The purpose of my testimony is to assist
23 the Board in its inquiries by providing information on
24 the air pollution control aspects of peaker plants and
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1 emissions permitting.
2 As chairman of the utility unit, I
3 oversee a staff of engineers who review all air
4 pollution control permit applications for electric
5 power facilities. This includes the review of
6 construction permit applications submitted for proposed
7 new power plants.
8 My tenure in the utility unit has
9 coincided with the influx of proposals for new natural
10 gas-fired power plants in Illinois, which apparently has
11 accompanied economic deregulation of the generation of
12 electricity in the state.
13 I have assisted in the review of many
14 of these applications for these plants and have
15 participated in most of the public hearings held
16 by the Bureau of Air on these projects.
17 Through my work with applications for
18 new peaker plants, I also have acquired a general
19 familiarity with aspects of these plants unrelated to
20 air emissions.
21 The first point I want to make is that
22 peaker power plants are not a new phenomenon. There
23 are a small number of existing peaker power plants in
24 Illinois that have operated as needed to meet peak
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1 electric power demands or provide emergency power.
2 In this regard, electric power is
3 supplied by a mix of power plants. Economics dictates
4 this mix of generating capacity because the use of and
5 demand for electricity varies greatly depending upon the
6 time of year and the time of day, and the power system
7 must have the capability to respond to this variation.
8 This mix includes so-called baseload
9 power plants and peaker plants. In fact, we can get
10 more technical. People also refer to them in the
11 intermediate category referred to as cyclic power
12 plants.
13 In any event, baseload power plants
14 run around the clock, essentially day in, day out, at
15 relatively stable levels of operation. These
16 are the least expensive and most efficient plants
17 to operate and include fewer coal-fired boilers and
18 nuclear plants.
19 Cyclic power plants operate on a daily
20 cycle, tracking the daily cycle of power demand
21 as it rises and falls during the day. These plants
22 include some of the older plants and some of the plants
23 specifically designed to interpret the steam and boiler
24 plants.
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1 The peaker power plants have had a
2 critical place in the power supply system as they have
3 operated to meet the demand for electricity when the
4 demand is at its highest.
5 In Illinois, this peak demand occurs
6 on hot summer days due to the use of electricity
7 for air-conditioning.
8 The engines that are used in peaker
9 plants are the most expensive to operate because they
10 use high cost natural gas, light oil. However, peaker
11 plants can be turned on and off very quickly, compared
12 to steam power plants, which allows them to respond to
13 the demand in power.
14 As Director Skinner has already
15 indicated, what is new in Illinois is the large number
16 of peaker power plants proposed since mid-1998,
17 coincidental with the economic deregulation of power
18 generation in Illinois.
19 These plants are being proposed
20 throughout the state, not only in rural areas where new
21 power plants were historically sited, but also in
22 developed and developing areas in the greater Chicago
23 metropolitan area.
24 In the Chicago area, some plants are
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1 being sited for existing industrial locations, but many
2 have selected sites that are not in industrial areas and
3 might be best characterized as open, often close to
4 residential areas.
5 Moreover, unlike existing peaker plants,
6 which were developed by Illinois' historical electric
7 utilities like Illinois Power or Commonwealth Edison,
8 most of the new plants are being developed by companies
9 that are new to Illinois, who, as we understand it,
10 intend to sell power on the wholesale power market.
11 Thus, it is not clear whether all
12 this additional generating capacity is needed to meet
13 local needs or that proposed plants are being developed
14 at the most appropriate locations.
15 At the same time, it is important to
16 note that there are certainly new peaker projects that
17 are being proposed by our historic utilities. Like the
18 existing peaker plants, some of these projects are
19 occurring at or adjacent to existing coal-fired power
20 plants.
21 At the same time, there are certainly
22 some nuclear power plants that are being proposed by
23 our historical utilities. Like these peaker plants,
24 some of these projects are occurring at or adjacent to
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1 existing peaker power plants.
2 Some doctrines are appropriate on what
3 these units are when they already use gas turbines.
4 These units are more commonly known as jet engines.
5 They're also technically known as combustion turbines.
6 Simply speaking, a gas turbine is a
7 rotary internal combustion engine with three major
8 parts. I think somebody has an overhead for me
9 at this point.
10 The three parts are the air compressor,
11 burners, or combustion chamber and a power turbine. We
12 have diagram on the overhead. There is also a diagram
13 for you on the easel.
14 In the air compressor, a series of
15 electric bladed rotors compresses the incoming air from
16 the atmosphere. A portion of this compressed air is
17 then diverted through the combustors or burners where
18 fuel is burned raising the temperature of the compressed
19 air. This very hot gas is mixed with the rest of the
20 compressed air and passes through the power turbine.
21 In the diagram, that's the turbine fan.
22 Turbine fans are powered when the force of the hot
23 compressed gas quickly expands and pushes another
24 series of blades rotating the shaft. Some of the
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1 energy produced by the power turbine is consumed
2 to drive the air compressor. The remainder, however, is
3 available for useful work in the diagram below. In case
4 of a gas turbine power plant, the power turbine turns
5 the generator and makes electricity.
6 In this basic form, gas turbines are
7 compact, powerful machines. Unlike steam electric
8 power plants, where a boiler is used to make steam and
9 drive a steam turbine generator, in a gas turbine, the
10 combustion of fuel occurs in the gas turbine itself.
11 See, one piece of equipment fuels burning combustion
12 chambers.
13 In addition, a separate cooling system
14 is not required to condense steam for reuse. The waste
15 heat from the exhaust -- from the gas turbine is
16 directly discharged to the atmosphere with the exhaust
17 gases out a short stack, which is typically no more than
18 100 feet tall. You can see this is the exhaust gases on
19 the atmosphere.
20 However, the trade off for the
21 simplicity of the gas turbine is the required fuel. Gas
22 turbines rely on the availability of a supply of clean
23 fuel such as natural gas, kerosene, or light oil. In
24 this regard, gas turbines are called gas turbines
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1 because they work with a hot gas, not because they burn
2 natural gas.
3 Due to their characteristics, gas
4 turbines are useful in particular applications.
5 One of these applications is providing peak electricity.
6 It should be understood that as a point of background
7 that gas turbines are also used to generate electricity
8 in hybrid systems known as combined cycle turbines.
9 The diagram you have got in front of you
10 is the simple turbine, the basic model. It shows you
11 peak. In a combined cycle system, which aren't used at
12 peak, the combined cycle system is, in fact, designed
13 generally to operate year 'round to supply electricity.
14 The difference between the simple cycle
15 turbine used for peaking and the combined cycle turbine
16 is that in a combined cycle turbine, the hot exhaust
17 gases discharged from the turbine do not go directly to
18 the atmosphere. Instead, the hot exhaust gases from the
19 turbine which are typically about 1,000 degrees
20 Farenheit, are ducted to a waste heat boiler and used to
21 generate steam.
22 This steam is then used to drive the
23 steam turbine generator as in more traditional steam
24 power plants. If you look at this diagram, you'll be
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1 adding another boiler on top of the hot exhaust gases.
2 There would be steam. That steam would then also be
3 used to drive another steam turbine involving a power
4 load either the same generator or a separate electrical
5 generator.
6 The recovery of the heat energy in
7 the exhaust of a gas turbine in this combined cycle
8 fashion can increase the energy efficiency of a
9 combined cycle plant by about 50 percent as compared to
10 a simple cycle turbine which doesn't recover any heat
11 energy from its exhaust.
12 The additional electricity that can be
13 produced by a combined cycle turbine is accompanied, of
14 course, by additional capital expense, a waste heat
15 boiler, the steam turbine and a cooling system. But the
16 additional output of the plant makes the natural
17 gas-fired combined cycle plant more cost-competitive
18 with coal-fueled plants for electric power generation.
19 In addition, combined cycle plants
20 generally pose more issues than simple cycle plants.
21 For example, they do have the cooling towers associated
22 with the steam power plants. Combined cycle plants are
23 also subject to regulatory requirements more stringent
24 in certain respects than those for peaker plants.
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1 Along with the influx of new peaker
2 plants, Illinois has also experienced a much smaller
3 influx of combined cycle plants. We've received
4 applications for 10 new plants roughly. Six are
5 permitted. One of the reasons that it is difficult to
6 keep a standardized approach with the numbers of plants
7 is that there is some overlap between simple cycle
8 peaker plants and combined cycle plants.
9 In this regard two of new natural
10 gas-fired plants are permitted to operate initially as
11 peaker plants, but then they're also permitted
12 to act additionally -- combined cycle use.
13 In addition, we have one permitted --
14 cylinder permitted to involve both simple cycle and
15 combined cycle turbines even though at this point it's
16 only constructed as simple cycle turbines.
17 Looking at the actual pieces of
18 equipment, the actual turbine, there are two basic
19 types of turbines, so-called heavy duty or framed
20 turbines or an aeroderivative, that is an aircraft
21 derivative turbine. Frame turbines are specifically
22 designed for land based utility or industrial
23 applications.
24 Aeroderivative turbines, while adapted
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1 for land-based applications, are derived from aircraft
2 engines and generally have counterpart models of engines
3 that are used on jet aircraft.
4 There are a handful of manufacturers
5 of utilities with gas turbines. The gas turbines are
6 being proposed for plants being built in Illinois.
7 Actually, they include turbines from all of the major
8 manufacturers.
9 Each manufacturer makes a number of
10 different models of gas turbines in a range in sizes.
11 Gas turbines are rated by their power output, i.e., the
12 amount of electricity in megawatts that they can
13 nominally produce.
14 The new peaking plants being developed
15 in Illinois have turbines that range in size from
16 a nominal output of about 20 megawatts to 190
17 megawatts. Except for two small plants, the new peaker
18 power plants being developed in Illinois have two or
19 more turbines, which are usually the same model.
20 The largest number of identical units
21 proposed at a single site is 16 units. This allows the
22 plant to manage the amount of power produced by turning
23 off and on turbines. Gas turbines normally operate in
24 the upper load range, which is where they were.
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1 A key factor in the design of a peaker
2 plant is the capability to maximize the power output of
3 the plant to be able to meet peak electric power
4 demand. This leads to a number of variations on the
5 basic simple cycle turbine, which are all due to the
6 scientific facts that the power output of a gas turbine
7 varies based on the density of the air being used in the
8 turbine.
9 The denser the air, the more air that
10 can be pushed through the turbine, the higher the power
11 output. This means that in the absence of any
12 adjustments, the output of a given gas turbine will be
13 significantly less on a 95-degree Farenheit day in July,
14 when peak power is most likely to be needed, than on a
15 20-degree Farenheit day in January.
16 To compensate for this phenomenon, the
17 modern simple cycle turbines used in peaking plants are
18 routinely equipped with devices to cool the air going
19 into the turbine. While it may appear
20 counterproductive to cool the air in a turbine before
21 heating it, cooling the air allows more air to be
22 handled by the air compressor, thereby allowing more
23 fuel to be burned and increasing the power output of
24 the turbine.
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1 Gas turbines can be equipped with
2 several different types of air cooling systems that
3 vary in effectiveness with which they can cool the
4 inlet air to boost a gas turbine's power output. In
5 the simplest system, water is injected directly into
6 the incoming air to cool the air by evaporative cooling.
7 Clean demineralized water must be used to prevent excess
8 build up of scale on the rotor blades in the turbine.
9 In more complex systems, water may also
10 be injected at a point in the air compressor itself.
11 The inlet air may also be cooled by indirect systems in
12 which the air passes through cooling coils. In this
13 case, water may still be used in an open cooling tower
14 where evaporation of water is used to dissipate the heat
15 generated by a mechanical refrigeration unit.
16 Alternatively, a dry cooling system
17 may be used in which the heat generated by a
18 refrigeration unit is dissipated to the atmosphere by
19 dry cooling towers or radiators. Obviously, the more
20 complex the cooling system, the greater the amount of
21 energy that is consumed in its pumps and compressors,
22 which offsets some of the additional increase in power
23 output.
24 Another approach to boost power output
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1 of a gas turbine is to inject clean water or steam into
2 the burners or to inject steam after the burners. All
3 these measures increase the gas flow through the power
4 turbine and thus increases its power output. This can
5 increase the effects on efficiency, however, because you
6 do have to burn fuel to heat that water to evaporate.
7 In summary, while simple cyclic gas
8 turbines are similar in concept, the new peaker power
9 plants proposed in Illinois can vary greatly due to the
10 type and number of turbines and the associated systems
11 that have been selected by the developer.
12 Some comments on emissions and Director
13 Skinner has mentioned the -- related to the greatest
14 amount of gas turbines generally measured oxides. The
15 fact that gas turbines are no different than burning
16 natural gas for any purpose.
17 The NOx is formed. It's not a
18 cyclosporin, but is formed thermally by a combination of
19 oxygen and nitrogen in the air at the temperatures and
20 conditions experienced in the burners of the gas
21 turbine.
22 In addition, gas turbines can and do
23 also emit carbon monoxide or CO, which is formed
24 as a result of incomplete combustion fuel. CO is
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1 associated with most combustion processes and is found
2 in low, but measurable amounts in turbine exhaust.
3 Volatile organic material, or VOM,
4 which is also a product of incomplete combustion,
5 is also present in smaller amounts. Factors affecting
6 CO and VOM formation from a gas turbine again include
7 burner design and firing rate, which directly influence
8 the time, temperature and turbulence of the combustion
9 conditions experienced in the burners and the
10 efficiency of combustion.
11 In the absence of other measures,
12 emissions of NOx and carbon monoxide and volitile
13 organic material are generally considered to be related
14 inversely. That is, everything else being equal,
15 increasing flame temperatures and turbulence in a
16 burner, which improves combustion efficiency and lowers
17 emissions of CO/VOM, results in conditions that are more
18 conducive to formation of NOx.
19 Likewise, lowering peak flame
20 temperatures and turbulence, which reduces NOx
21 formation, tends to lower combustion efficiency and
22 increase emissions of CO/VOM. Thus, one objective in
23 combustion modifications to reduce NOx formation is to
24 also take other compensatory steps to also maintain or
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1 even improve combustion efficiency.
2 I've attached to my testimony a USEPA
3 reference on emissions from gas turbines, which is
4 a supplement of the chapter, USEPA's Compilation of Air
5 Pollutant Emission Factors, and it provides a lot more
6 information on emissions.
7 Due to the particular features of
8 different gas turbines and continuing developments in
9 burner design, however, the preferred source of
10 information the expected emissions of a particular
11 model of turbine is the manufacturer of the turbine.
12 Manufacturers prepare detailed data
13 sheets providing the maximum expected emissions of
14 a particular model of turbine, along with other
15 performance data, under different conditions of gas,
16 turbine load and operating conditions and ambient
17 temperature.
18 Once gas turbines are installed, actual
19 emission rates can be determined by measuring the
20 amount of pollutants in the exhaust of the turbine as it
21 passes through the stack. In addition to the gas
22 burners themselves, there are other emission units at
23 peaker power plants other than gas turbines.
24 The other type of unit most commonly
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1 found is fuel heaters. These heating systems are used
2 to warm natural gas prior to its use as fuel. The fuel
3 heaters are essential if the pressure of the natural gas
4 pipelines serving a plant is above the pressure required
5 for its gas turbines so that the natural gas cools when
6 it is decompressed for use.
7 Ancillary boilers or engines, which may
8 be used for start-up, power augmentation or emission
9 control, and emergency firewater engines, if present,
10 will also have emissions due to combustion of fuel in
11 these units. Again, these types of emissions are
12 similar to those of turbine -- turbine fuel.
13 Finally, cooling towers, if present,
14 will also be sources of emissions. This is due to the
15 presence of dissolved or suspended solids in water
16 droplets lost from the cooling tower and other
17 substances in the water that may be lost to the
18 atmosphere. Losses of particulate matter from cooling
19 towers can be minimized by using high-efficiency mist
20 eliminators which reduce the loss of water droplets and
21 managing the solids content of the water being
22 circulated in the cooling tower.
23 HEARING OFFICER JACKSON: Mr. Romaine, are you
24 finished with your emission information right now?
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1 MR. ROMAINE: Yes, ma'am.
2 HEARING OFFICER JACKSON: It looks like
3 the next thing in your testimony goes to the applicable
4 regulations. We will pick up with that when we return
5 in exactly one hour.
6 Before we break, though, I do want to
7 note for the record there was a NOx rule that is
8 currently pending before the Board that was referred to
9 in Director Skinner's testimony and just for those of
10 you who may not be familiar with the Board's docket,
11 that rule is currently docketed at R01-9. It is a fast
12 track rule under Section 28.5 of the Environmental
13 Protection Act. The Board anticipates completion of
14 this rulemaking, the NOx rulemaking, before the end of
15 the year.
16 The first hearing is currently scheduled
17 for next Monday in Springfield, that is Monday, August
18 28th, in Springfield. Cathy Glenn is the hearing
19 officer for that rulemaking. If you have any questions
20 today, I'm sure you can track Cathy down and ask her.
21 She is around. So that is it.
22 We'll be back in exactly one hour.
23 1:30.
24 (Lunch break taken.)
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1 HEARING OFFICER JACKSON: Good afternoon.
2 Welcome back. I think we'll go ahead and get started.
3 We're back on the record.
4 As indicated before we took a lunch break, we're
5 going to pick up where we left off with testimony from
6 the Illinois Environmental Protection Agency.
7 Mr. Romaine was just beginning to discuss the
8 applicable regulations, in his pre-filed testimony. So,
9 Mr. Romaine, I'll hand it over to you.
10 MR. ROMAINE: Thank you.
11 I'm now going to talk about the applicable air
12 control standards for gas turbines.
13 Modern gas turbines are able to readily comply
14 with the specific emissions standards that have been
15 adopted for them, which address emissions of NOx and
16 SO2.
17 Accordingly, my testimony focuses on the
18 applicability of the federal rules for Prevention of
19 Significant Deterioration of Air Quality or PSD.
20 The Illinois Environmental Protection Agency
21 administers the PSD permit program for sources in
22 Illinois under a delegation agreement with the U.S.
23 Environmental Protection Agency.
24 PSD can have an effect on a proposed peaker
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1 project because a proposed plant that qualifies as major
2 for a pollutant under PSD is subject to additional
3 requirements for that pollutant under the PSD rules. In
4 particular, a major plant must be operated to comply
5 with control requirements that represent best available
6 control technology, or BACT, for a pollutant, as
7 determined and approved on a case-by-case basis during
8 issuance of a construction permit for the project.
9 A construction permit that contains such
10 approval is commonly referred to as a PSD permit.
11 Otherwise, with respect to the PSD rules, a "non-major"
12 peaker project need only manage and control its future
13 emissions so as to comply with the terms of its permit
14 so that it does not constitute a major source. Most,
15 but certainly not all, of Illinois' new peakers are not
16 major sources and are not subject to BACT under the PSD
17 program.
18 Given this situation, interest has been
19 expressed by the public as to why such peaker plants are
20 not considered major so as to be subject to BACT or some
21 other stringent level of emission control set on a
22 case-by-case basis during permitting, especially since
23 peakers will likely operate on the hot summer days that
24 are most conducive to the formation of ozone.
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1 The need for a PSD approval or a PSD permit for
2 a proposed project is determined by its potential
3 emissions of pollutants. Because enforceable limits
4 must be considered in determining potential emissions,
5 the permitted emissions of a proposed new source
6 effectively become the source's potential emissions.
7 Permitted emissions generally reflect the hours of
8 operation or throughput requested by a source in its
9 application, with emissions in compliance with
10 applicable standards or at such lower rate as also
11 specified in the application. Accordingly, the need for
12 a PSD permit is triggered for a proposed new peaker
13 plant, if the permitted emissions of a pollutant, for
14 example, NOx or CO requested by the applicant equal or
15 exceed the major source threshold of the PSD rules.
16 For peaker plants this threshold is 250 tons per year.
17 One question about the applicability of PSD to
18 new peaker plants arise because of the seasonal nature
19 of peaker plants, where peaking plants will operate
20 primarily on a relatively small number of days during
21 the summer. In contrast, the applicability thresholds
22 of PSD are expressed in terms of annual emissions.
23 People wonder whether a program like PSD should be
24 applied to the new peaker plants as if the peaker plants
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1 would operate the rest of the year as they are allowed
2 to operate in the summer months. Certainly, the impacts
3 of a peaker plant on the days that it operates are
4 potentially much greater than a comparable manufacturing
5 plant permitted for the same amount of emissions but
6 operating over the course of an entire year. However,
7 the applicability provisions of the PSD rules do not
8 provide a basis to trigger applicability of PSD on a
9 basis other than annual emissions. Section 169 of the
10 Clean Air Act clearly provides that for purposes of PSD,
11 major sources are to be defined in terms of their annual
12 emissions.
13 Another question about the applicability of PSD
14 to peaker plants arises only for peaker projects in the
15 Chicago ozone nonattainment area. In particular, why is
16 only PSD being considered for NOx? If NOx were
17 considered to be an ozone precursor in this area, a
18 proposed new peaker plant would have to be addressed
19 under the nonattainment new source review rules as well
20 as under PSD. This is because the applicability
21 threshold for a major new source under the nonattainment
22 new source review rules in a severe ozone nonattainment
23 area like Chicago is annual emissions of only 25 tons of
24 an ozone precursor. Applicability of the nonattainment
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1 new source review rules would almost certainly require
2 any new peaker plant proposed in the Chicago
3 metropolitan area to comply with the lowest air emission
4 rate for NOx. The answer to this question is that the
5 U.S. Environmental Protection Agency has granted the
6 states bordering to Lake Michigan a -- called a NOx
7 waiver under Section 182(f) of the Clean Air Act. This
8 waiver is based on the scientific analyses that found
9 that controlling NOx emissions only in the nonattainment
10 area would actually increase ozone levels in the air,
11 instead, for NOx reductions to improve ozone air quality
12 must be provided on a statewide basis and preferably on
13 a multi-state regional basis.
14 Because of these questions concerning the
15 applicability of PSD to a new peaker plant, the Illinois
16 Environmental Protection Agency formerly sought guidance
17 from U.S. Environmental Protection Agency on these
18 points. U.S. Environmental Protection Agency confirmed
19 that the Illinois Environmental Protection Agency is
20 properly implementing the applicability provisions of
21 the PSD rules for these plants.
22 A review of the regulatory programs in other
23 states indicates that there are states that are similar
24 to Illinois that apply BACT to a proposed project only
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1 when triggered by the federal PSD rules. Wisconsin is
2 an example of such a state. There are other states like
3 Indiana and Ohio where there are state-based BACT
4 requirements that apply to proposed projects that would
5 not trigger BACT under the federal PSD rules. A brief
6 description of the requirements in other states is
7 provided in Attachment 2 to my testimony. This
8 attachment also includes some information on the state
9 process for approval of the sitings of new plants, if
10 such a process exists. It also includes what I would
11 characterize as anecdotal comments, opinions about
12 people that we talked to about the situation with regard
13 to peaker plants in their particular state.
14 The next topic of my testimony is emissions
15 control technology. Emissions from turbines can be
16 reduced by combustion modifications and by add-on
17 control devices. As emissions of pollutants like NOx
18 and CO from gas turbines are related to combustion
19 conditions, combustion modifications are the preferred
20 control technique as they can reduce the formation of
21 pollutants. Combustion modifications involve only the
22 burners of a turbine and other components of the turbine
23 may be unchanged. Over time a particular design of gas
24 turbine may be produced with several different models of
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1 burners, as the turbine manufacturer makes improvements
2 in the design of the burners, which then become
3 available for newer units.
4 One approach to modifying the burners of a gas
5 turbine to reduce NOx emissions is to inject water,
6 either as a liquid spray or as steam, into the burner in
7 the immediate vicinity of the flame. This reduces the
8 peak temperatures in the flame zone, "slowing down" the
9 combustion process to reduce the formation of NOx. This
10 technique can reduce NOx emissions by 60 percent or
11 more. Depending on the particular design, the amount of
12 water injected can range from about half a pound to 2
13 pounds of water per pound of fuel.
14 The other approach to combustion modifications
15 doesn't involve water, instead it focuses on the way
16 that air and fuel mix so as to minimize the "hot spots"
17 in the flame where NOx is actually formed. These types
18 of burners are commonly referred to as "dry low NOx"
19 burners. When they are available for a model of
20 turbine, dry low NOx burners can be very effective when
21 burning gaseous fuels, achieving 90 percent or more
22 reduction in NOx emissions when compared to the earlier
23 models of conventional burners.
24 Add-on control devices are not commonly used for
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1 NOx emissions from simple cycle gas turbines.
2 Nevertheless, some familiarity with these types of
3 systems is appropriate so as to be able to understand
4 some of the reasons why these systems are not used. The
5 traditional add-on device for NOx emissions from a gas
6 turbine selective catalytic reduction is also known as
7 SCR. SCR relies on a catalyst material, which
8 facilitates a reaction between ammonia and NOx that
9 reduces the NOx to nitrogen, forming water as a
10 by-product. Beds of catalyst are installed at an
11 appropriate location in the exhaust ductwork of the
12 turbine. Ammonia is injected into the hot exhaust gas
13 through a grid system located upstream of the catalyst.
14 The difficulty with SCR is that conventional selective
15 catalytic reduction of catalysts typically have an
16 operating temperature window ranging from 450 Farenheit
17 to 850 Farenheit, however the exhaust gas temperatures
18 of a simple cycle gas turbine are typically above 900
19 degrees Farenheit. So these systems are in the correct
20 temperature range for simple cycle turbine exhaust.
21 There are high-temperature SCR catalysts that
22 are being built and are available but they are not as
23 rugged as the conventional catalysts and there is
24 limited experience with their use. One of the concerns
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1 with the SCR system in making sure that it operates
2 properly is that some of the ammonia passes through the
3 SCR system unreactive. This ammonia slip becomes larger
4 as the amount of the ammonia injected into it is
5 increased either to get greater removal or to compensate
6 for deterioration of the catalyst. Although ammonia is
7 not a criteria pollutant, it is of environmental
8 concern. Like NOx itself, emissions of ammonia do
9 contribute to fine particulate matter levels in the
10 atmosphere. They also contribute to acid deposition.
11 Add-on control devices are also available for CO
12 and VOM emissions from gas turbines. These devices use
13 an oxidation catalyst to complete the combustion of CO
14 and VOM, which are products of incomplete combustion.
15 These devices are installed in an appropriate location
16 in the exhaust ductwork of the turbine and allow
17 combustion to be continued at the temperatures in
18 their -- present in the exhaust ductwork without the
19 need for supplemental heat. The new peaking plants in
20 Illinois, which rely on -- do rely on good combustion
21 practices to minimize emissions that are not routinely
22 used in oxidation catalyst systems. There is an
23 exception to that, that is the peaker plants approved
24 proposing to use Pratt & Whitney aero-derivative
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1 turbines. On a national basis, oxidation catalysts are
2 used more commonly in areas of the country where ambient
3 air quality problems with the CO have been experienced.
4 For detailed information on NOx control measures
5 for gas turbines, I recommend that you look at the
6 Alternative Control Techniques Document prepared by U.S.
7 Environmental Protection Agency in the early 1990s.
8 It's a little bit out of date but it does have a lot of
9 good information.
10 And onto my final comment, permitting of gas
11 turbines. I have to make a pitch for the Agency.
12 The volume of applications for new natural
13 gas-fired power plants, including peaker plants, has
14 strained our resources and is slowing down other
15 initiatives, notably the issuance of initial Title 5
16 permits to sources. These applications for new peaker
17 plants consume effort in review of applications, review
18 of modeling, responding to requests for information,
19 holding public comment periods and especially hearings
20 and other outreach activities.
21 Like other construction permit applications,
22 construction permit applications for peaker plants are
23 reviewed to determine whether the application shows
24 compliance with the applicable air pollution control
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1 requirements. If compliance is shown, permits are
2 prepared with detailed conditions that identify
3 applicable rules and requirements and, that is, set
4 forth appropriate testing, monitoring and record keeping
5 to verify compliance when and if the proposed facility
6 is built.
7 As previously stated, modern gas turbines
8 readily comply with the adopted emission standards that
9 apply to them. The principle technical task in
10 processing an application for a peaker plant is to
11 address the federal PSD rules, as it may establish
12 project-specific emission standards. As previously
13 explained, based on the data for maximum emissions and
14 operation provided in the application, a proposed plant
15 or project may constitute a major source subject to PSD
16 for one or more pollutants. Alternatively, it may
17 constitute a non-major source for many or all
18 pollutants, as is the case for most new peaker plants
19 proposed in Illinois.
20 For a proposed minor source, the task in
21 permitting is to develop a permit that contains
22 appropriate conditions to limit the emissions of the
23 relevant pollutant from the source to below major source
24 thresholds. This generally requires establishment of
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1 first short-term limits on emissions, usually expressed
2 in pounds per hour; second, long-term limitations on
3 hours of operation or fuel consumption; three, annual
4 limits on emissions expressed in tons per year and
5 provisions for testing, monitoring and record keeping.
6 For a proposed major source, conditions
7 delineating permitted emissions must also be developed
8 as described above for a minor source. However, the
9 limits for a major source provide for permitted
10 emissions in excess of major thresholds and are based on
11 the emissions described in the application, which are
12 addressed by the BACT determination, impact analyses and
13 other requirements for major projects.
14 Permit analysts rely on the information in the
15 application, including the emission data provided by the
16 manufacturer of the gas turbine.
17 Emission data -- or testing to date has shown
18 the turbine manufacturers are able to reliably predict
19 maximum emission levels of new turbines as needed for
20 the purposes of permitting. Actual emission testing
21 shows compliance with projected emission rates, often
22 with a substantial margin of compliance for pollutants
23 other than NOx where manufacturers are more conservative
24 in their predictions.
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1 Likewise, while many peaker projects request
2 permitted emission levels just below the PSD
3 applicability threshold of 250 tons per year, it is not
4 apparent that developers are unrealistically
5 constraining the operation of projects. It is quite
6 probable that the actual operation of some plants is
7 being overstated, so as to maximize their capability to
8 provide peak power. In this regard, independently owned
9 peaker plants do enter into advanced contracts to
10 provide the power on demand. Accordingly, the requested
11 level of operation may be related to the ability to
12 establish contractual obligations, even though the
13 plant's anticipated levels of actual operation are much
14 lower than that. In any event, the developers of peaker
15 projects have generally demonstrated an interest in
16 maximizing the permitted hours of operation of plants
17 and their ability to supply power. For certain plants,
18 this certainly makes it necessary for the developers to
19 select new models of gas turbines that have low NOx
20 emission rates, if the plant is to be permitted as a
21 non-major source.
22 For a major project requiring a PSD permit, the
23 additional technical tasks in permitting are to review
24 the air quality impact analysis and the BACT
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1 demonstration submitted as a part of the permit
2 application. The air quality impact analysis prepared
3 for peaker plants subject to PSD indicate that these
4 plants do not pose a threat to air quality.
5 Since January of this year, the Illinois
6 Environmental Protection Agency has also been requiring
7 applicants for non-major peaker plants to provide air
8 quality impact analyses to support their applications.
9 These analyses also show that the proposed peaker plants
10 that are non major do not threaten air quality. In most
11 cases, peak impacts are below the numerical significant
12 impact levels set in the PSD rules. This is a
13 consequence of low concentration of pollutants in the
14 exhaust of modern gas turbines accompanied by good
15 dispersion to the high temperature of the exhaust.
16 As already indicated, most peaker plants are
17 being developed as non-major sources. To date, there
18 have only been three BACT determinations for NOx that
19 have been made for simple cycle turbines in Illinois.
20 All involved, General Electric frame turbines burning
21 only gaseous fuel. Dry low-NOx burner systems were
22 determined to constitute best available control
23 technology. Add-on control devices have not been
24 required as best available control technology for either
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1 NOx or CO. The BACT demonstrations in these
2 applications have evaluated the use of add-on controls,
3 and the demonstrations have shown that add-on control
4 devices were not routinely being used on new simple
5 cycle turbines. The cost-effectiveness of the add-on
6 devices, if they were to be applied, was shown to be in
7 excess of a level considered reasonable. Lastly, air
8 quality impacts of the new peaker plants, as addressed
9 in the modeling analysis, have not necessitated further
10 control of emissions to protect the ambient air quality.
11 Applications are currently pending that require
12 determinations of BACT for additional General Electric
13 frame turbines burning only gaseous fuel and for frame
14 turbines with burners designed for both natural gas and
15 fuel oil as a backup fuel and also for aero-derivative
16 turbines.
17 The further tasks associated with the Illinois
18 EPA's processing of applications for peaker plants are
19 related to public involvement in the permitting process.
20 The Illinois EPA's administrative rules dealing with
21 public comment periods mandate a public comment period
22 on a draft permit before a construction permit is issued
23 for a major source of engine modification. This allows
24 for public input before a case-by-case BACT
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1 determination is made. These rules also provide for a
2 public comment period on any construction permit
3 application at the discretion of the director of the
4 Illinois Environmental Protection Agency. Under this
5 authority, the Illinois Environmental Protection Agency
6 routinely holds public comment periods, usually with a
7 public hearing, for proposed projects in which the
8 public has expressed a significant degree of interest or
9 opposition. Because of the interest in proposed peaker
10 plants generally expressed by the public, Director
11 Skinner has indicated he has decided that all
12 applications for proposed new peaker plants will be
13 subject to a public comment period before a permit would
14 be issued. As with the public comment period for a
15 major project, a public hearing is held as part of the
16 comment period, if one is requested, by the applicant or
17 in response to request from the public or local elected
18 officials or if the Illinois Environmental Protection
19 Agency expects a significant degree of public interest
20 in a particular project.
21 As a result of this, almost half of the peaker
22 permits that have been issued have been through public
23 hearings and certainly if there was any sort of request
24 for public hearing, it would be allowed.
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1 At hearings, the public expresses many concerns
2 about the proposed peaker plants. It's already been
3 indicated the public is certainly concerned with the
4 potential effects of the emissions from these plants,
5 and also with impacts on water quality and noise.
6 Members of the public also routinely express concerns
7 about the impacts of proposed plants on property values,
8 local water wells and the character of the area in which
9 the plant is proposed to be located. They are also
10 concerned that proposed plants are not needed to provide
11 local power, believing that the plants would be better
12 developed elsewhere.
13 In response to these latter types of concerns,
14 the Illinois Environmental Protection must explain that
15 its authority under state law is narrowly limited to
16 consideration of environmental issues and in the case of
17 construction permits for emission sources, matters
18 related to emissions and air quality.
19 In conclusion, peaker power plants are not a new
20 phenomenon in Illinois. What is new, however, is the
21 large number of new peaker plants that have been
22 proposed in the two-year span since mid-1998 in
23 conjunction with the economic deregulation of electric
24 power generation. These plants do pose a range of
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1 concerns for the public. The Bureau of Air has enhanced
2 its procedures for reviewing peaker plant applications
3 to attempt to address concerns expressed by the public
4 to the extent that such concerns are within the existing
5 scope and authority of the Illinois EPA.
6 When the panel concludes, we will be happy to
7 answer questions.
8 HEARING OFFICER JACKSON: Thank you, Mr.
9 Romaine.
10 We'll have the next agency witness, please.
11 MR. PHILLIPS: The next agency witness will be
12 Robert Kaleel. Mr. Kaleel will be providing testimony
13 on air modeling as it relates to peaker plants.
14 HEARING OFFICER JACKSON: Thank you.
15 MR. KALEEL: If it is okay, I was going to use
16 the overhead projector and perhaps be a little less
17 formal in my presentation than some of the prior ones.
18 I apologize for the lights here.
19 MS. KEZELIS: If you would move one of the
20 speakers. Thank you.
21 MR. KALEEL: Are you ready to proceed?
22 My name is Robert Kaleel of the Air Quality
23 Modeling Unit in the Illinois Environmental Protection
24 Agency, Bureau of Air, proposed planning section. My
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1 responsibilities include the supervision and oversight
2 of modeling that is performed both for permitting of
3 major new sources and also in air quality and planning
4 for non-attainment areas where we have requirements to
5 show the administrative attainment over a specified time
6 period.
7 As I was -- I guess my presentation is based on
8 the information that is in the presubmitted testimony.
9 This particular table computers in Exhibit 10 of my
10 presubmitted testimony, for those of who you have a
11 little difficulty reading that, hopefully, I'm not
12 blocking the view of too many people back in the
13 audience.
14 The Agency has been engaged in performing or
15 requiring performance of air quality modeling for all of
16 the peaker plants that have been the subject of this
17 hearing. As Chris Romaine had indicated earlier, most
18 of these sources are not large enough to trigger the
19 requirements for modeling as under the provision of
20 significant deterioration program or the PSD program.
21 The threshold for requiring modeling are emissions based
22 and many of these sources, at least on a tons-per-year
23 basis, are too small to require air quality modeling.
24 The Agency has been requiring this kind of detailed
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1 modeling of all of these sources whether they were big
2 enough to trigger PSD or not, so at least since January
3 of this year, as Director Skinner had indicated.
4 There are two different types of air quality
5 limits that we're looking for in the performance of air
6 quality modeling. The National Ambient Air Quality
7 Standards shown in this column on this table. The
8 National Air Quality Standards and National Ambient Air
9 Quality Standards or NAAQS are based on health studies
10 performed and reviewed by the United States
11 Environmental Protection Agency on an every five-year
12 basis. The health studies or other facts are human
13 health effects with some margin of safety and these
14 standards are revised from time to time. Even to think
15 of the NAAQS or these specific pollutants as being
16 limits that are generally not conceded anywhere in the
17 country including the state of Illinois, the form of the
18 standard does allow for occasional exceedances on
19 short-term basis. For example, the 24 hour standard for
20 sulfur dioxide, which is a value precursing 365
21 micrograms per cubic meter can be exceeded at a given
22 location on a once per year basis. The ozone standard,
23 which many people are familiar with, can be exceeded as
24 many as three times in a three-year period. It isn't
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1 until the fourth exceedance in a three-year period at a
2 given location that constitutes a violation. But at any
3 rate, you can think of each of the NAAQS limits as a
4 meet limits that are not to be exceeded. There are
5 specific averaging times for each of these limits based
6 on whether the health effects that have been identified
7 through health studies are acute or short term or
8 whether they're more chronic or long term. So they're
9 both annual and short-term standards.
10 Also, shown on the table are what are called PSD
11 increments or Class II readings. In both areas a Class
12 II reading. PSD or prevention of significant
13 deterioration increments are defined again by U.S.
14 Environmental Protection Agency on a pollutant by
15 pollutant basis and for specific averaging times. These
16 also are fixed limits but they apply to attainment
17 areas, to areas already meeting the air quality
18 standard. The idea is that PSD or prevention of
19 significant deterioration program is that air quality is
20 never allowed to get much worse than it was after a
21 specific baseline date. For most pollutants the
22 baselines were established shortly after the PSD
23 programs, I believe, implemented in 1978 but they -- the
24 idea is if an air -- a region has air quality that meets
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1 or much better than the air quality standard that for
2 all time it's never going to get significantly worse.
3 Air quality as predicted through modeling or measured
4 through monitoring that is worse than the baseline,
5 above the increments that are shown, that's called a
6 significant deterioration and that would violate the PSD
7 programs. So that is what we're looking for in terms of
8 air quality degradation, is it a significant
9 deterioration above the baseline as provided by the PSD
10 program or does it exceed the primary or secondary
11 National Air Quality Standards. And in the case of the
12 NAAQS, we're looking not just at the effects of the new
13 source but of all existing sources in the region.
14 There are a number of different types of air
15 quality models that the Agency uses for a range of
16 different applications. You will see the title. In
17 this particular figure, I should point out, which is
18 contained in Exhibit 11 of my testimony, the impact that
19 we're showing here was a result of a commonly used air
20 quality model. I need to, I guess, take a minute and
21 describe some of the kinds of models that we would use
22 for the different applications before us. In areas
23 where we're looking at concentrations on very low
24 scales, such as the impacts of individual emission
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1 sources like a peaker or any new industrial facility, we
2 would use what's called a house seating room or a steady
3 state or sometimes referred to as a dispersion model.
4 We would look at something that impacts very close to
5 the source, within a matter of kilometers or miles from
6 a particular source, varying neighborhood scale effects.
7 These models are very good for them. One thing that
8 these models don't do is account for chemical reaction
9 to the transformations in the atmosphere. So these
10 models are not appropriate for pollutants like ozone
11 where we obviously have a -- chemical reactions that
12 cause the ozone pollutant. In this particular case,
13 we're using the steady state models I described.
14 They're called the industrial source complex model or
15 ISC. We've modeled a large peaker, I wasn't going to
16 use the name of a peaker but it is one of the largest
17 ones that is before the Agency, is a 950 megawatt plant.
18 I'm using this one just as an example of the types of
19 air quality mix that we've seen submitted by the various
20 applications before us.
21 NOx standards as shown in previous slides is an
22 annual standard as to what the impact footprint, if you
23 will, that we're showing in this particular figure based
24 on the application of the ISC model is an annual
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1 concentration. Under the PSD program, there is a
2 definition of what kind of an impact is called
3 significant. And I try to -- it's an unfortunate choice
4 of words, a significant impact versus a significant
5 deterioration, I'll try to distinguish those. In terms
6 of what is a significant impact, of course, what's
7 significant, I guess, depends on who it is that is
8 looking at it but for the -- what the Agency uses as the
9 definition of significance as contained within the PSD
10 rules. Significant impact isn't one that is unlimited
11 like the increments are or like the NAAQS are. A
12 significant impact is really a trigger for the Agency to
13 require more detailed modeling. In the case of all of
14 these peakers, we not only require re-modeling, but
15 we're required to fund the modeling, so it isn't serving
16 a function as far as the Agency's requirements here but
17 I'm using it as a way of giving you an idea of how
18 important these impacts are, at least based on objective
19 determination of what is significant.
20 For NOx, the PSD definition of a significant
21 impact is any impact that is above 1 microgram per cubic
22 meter on an annual average. And this is -- this grey
23 shaded area represents the area where this hypothetical,
24 if you will, peaker plant has an impact that exceeds 1
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1 microgram per cubic meter. Of course, areas further
2 down where you got lesser impacts, but at least the
3 impact that is considered by the Agency to be
4 significant is shown in the shaded area on this map.
5 The highest concentration is 3.24 micrograms per cubic
6 meter. So in this case the impact of a peaker is
7 significant, at least for NOx for the very larger
8 peakers. One other thing to note on this particular
9 image is that the -- most of this impact is actually due
10 to fuel heaters and not due to the actual natural
11 gas-fired turbine itself. The turbine didn't act as
12 less than a tenth of a microgram, certainly would not be
13 significant, but for completeness we wanted to show you
14 the footprint of the entire facility, not just of the
15 peaker itself. In terms of spatial extent, the impact
16 is relatively small. I guess some of that depends on
17 whether or not your house is underneath that -- that
18 particular shaded area. But, in general, I guess,
19 looking at the scale of the distance that we're dealing
20 with here, the impacts are certainly less than a mile,
21 probably in the range of hundreds of feet, maybe a
22 thousand feet down wind from the facility's fence line.
23 With reference to the NOx PSD increment whether
24 or not this represents a significant deterioration of
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1 air quality for the NOx, the PSD increment is 25
2 micrograms per cubic meter, so even though the source
3 has a significant impact, it does not exceed or cause
4 what we would call a significant deterioration under the
5 PSD program. This is a similar type of a depiction of
6 the air quality footprint for the same large peaker
7 unit. I should point out there are some, I've certainly
8 seen, that have higher impacts. The vast majority of
9 them have much lower impacts but, again, this is a
10 fairly large one. I can give you an idea of what kinds
11 of things we're seeing. This figure, by the way,
12 appears in Exhibit 11, again, in my pre-submitted
13 testimony. This is an 8 hour concentration for the
14 print. The footprint is even somewhat smaller than it
15 is for NOx. And I should refer back to the significant
16 impact threshold that I described before, which is kind
17 of a trigger that we use to decide when a more detailed
18 modeling would normally be performed. For carbon
19 monoxide, that significant threshold is 500 micrograms
20 per cubic meter. The footprint I'm showing is for 50
21 micrograms per cubic meter or only 10 percent of what we
22 would be considered to be significant. So, I guess, the
23 message that I will leave you with on this particular
24 figure is for carbon monoxide, even the largest
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1 facilities, do not have a significant impact. There is
2 no PSD increment for carbon monoxide but certainly this
3 source would not exceed what we would consider to be
4 significant or call what we would consider to be
5 significant impact.
6 I should point out this 50 microgram can impact
7 the air quality standard for an 8 hour basis is 10,000
8 micrograms per cubic meter just as a reference.
9 This is a footprint for our 24 hour PM10
10 concentration particulate matter of 10 microns or less.
11 Again, the footprint that we're looking at is very
12 small. The significant impact threshold under PSD is 5
13 micrograms. The highest concentration from this
14 facility is actually less than 5. So this wouldn't be
15 considered a significant impact. Peak occurs right at
16 this little pencil line. The PSD increment is 30
17 micrograms for 24 hour averages, and, again, this
18 doesn't approach the PSD increment. The Ambient Air
19 Quality Standard for 24 hours is 150 micrograms per
20 cubic feet. Again, this figure appears in Exhibit 11 in
21 my testimony. This impact is for sulfur dioxide or SO2.
22 Again, this is a 24 hour ambient concentration. The
23 significant threshold under PSD is 5 micrograms per
24 cubic meter. There were no hurdling impacts from this
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1 particular source of 5 micrograms. The highest impact
2 is only .13 micrograms per cubic meter. And the area
3 I'm showing is .05 micrograms per cubic meter. This is,
4 what, about 1 percent of the significant impact
5 threshold. So this is a very insignificant source at
6 least as far as sulfur dioxide is concerned. The PSD
7 increment is 91, just as a point of reference, the NAAQS
8 for 24 hour impact is 365 micrograms per cubic meter.
9 So for each of the pollutants of concern, NOx,
10 sulfur dioxide, PM10 and carbon monoxide, the modeling
11 has indicated, modeling we reviewed today supplied by
12 the elements, has indicated that PSD increments will not
13 be exceeded as a result of any of these projects, even
14 the largest ones, so, therefore, we wouldn't consider
15 the deterioration of air quality to be significant.
16 Certainly don't exceed those increments. In terms of
17 whether or not we would exceed the actual health based
18 Ambient Air Quality Standards, I'll spare you the
19 details of going through all of these air quality
20 studies one at a time. What I've done on this
21 particular table, which, again, appears in -- I guess
22 this is in Exhibit 10 of my testimony, is compared with
23 the National Ambient Air Quality Standards with the sum
24 of the peaker impacts, a representative background
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1 concentration and a total concentration. And I'll walk
2 you through each of those columns. In terms of the
3 maximum peaker impact, we've looked at new ones,
4 different air quality studies from a whole range of
5 sizes. What I've done for this particular table is
6 select the highest impact for that -- that pollutant in
7 that averaging time. Highest impact from any of the
8 peakers, subject -- the 2 microgram PM10 impact, for
9 example, may not be from the same plant for the same
10 location causing the 12. What I'm representing here is
11 a 2 PM10 impact is the highest one we see from any one
12 of the peaker plants. The 12 also similarly is the
13 highest 24 hour from any of the plants anywhere.
14 To represent the background concentration, I've
15 selected from our ambient air monitoring data the
16 highest concentration recorded anywhere in the Chicago
17 area during 1999. So we're trying to be very
18 conservative in my representation of impacts from
19 background sources. All the sources other than the
20 peakers are subject to the modeling. Of course, when we
21 do the modeling on an individual basis, we provide
22 emissions inventories to the consultant, to the
23 application's consultant and they would incorporate all
24 major sources in the area of the modeling study. They
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1 would explicitly model those. In addition, we
2 explicitly model any of the peakers that happen to be
3 nearby along with what the applicant's looking at. So
4 we've done a much more thorough job in modeling than
5 what I'm trying to represent here, but here I think what
6 I'm trying to do is just show that even in the areas of
7 Chicago where you have the worst major air quality for
8 each of these pollutants and the highest impact from any
9 of the peakers, of course, these impacts wouldn't be
10 coincident, just bear with me assuming that they are,
11 compare the total of the sum of these two columns and
12 compare this total concentration to the values in the --
13 in this column, which represent the air quality
14 standards, in each and every case these sum or total
15 concentrations are less than the Ambient Air Quality
16 Standards. So we, I think, have shown here that these
17 peakers will not be a threat to attainment for any of
18 the groups that we've modeled for this -- for this type
19 of a model.
20 Now, I mentioned before that the dispersion
21 models that we've -- that we've required to be used for
22 each of these sources on a case-by-case basis are not
23 appropriate for use for ozone. In fact, the ozone
24 modeling techniques that are required are very complex,
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1 those ones that -- as a result of a complex series of
2 chemical reactions in the atmosphere. It's not a
3 pollutant that's emitted directly from a stack but it is
4 the sum or the end product of a series of reactions from
5 what are called precursor emissions. NOx, what I'll
6 call again compounds and carbon monoxide.
7 The different modeling approaches we require are
8 called the urban air shed models, it's a grid based
9 model, that's a much, much more complicated modeling
10 approach. We don't require that of individual
11 applicants for a couple of reasons. One, it's probably
12 cost prohibitive on a project-by-project basis, but more
13 importantly, you'd never see the impact from the
14 individual sources, even large ones under the PSD
15 program would not appear in the context of a poor
16 chemical grid modeling.
17 Before I get into the modeling results, I wanted
18 to, I guess, kind of set the stage by looking at where
19 we are today with ozone air quality in the Chicago or
20 Lake Michigan region and what the trends have been over
21 the last several years. What I'm preparing in this
22 slide is a side-by-side slide or image is the monitor of
23 this ambient value at each of the monitors in the Lake
24 Michigan area from 1987 to '89 period, and contrast that
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1 with the measurements in the most recent three-year
2 period we have data available, only those monitors that
3 have the measured violations of the standard. In other
4 words, design values above 125 as shown on them. Now,
5 I've -- I guess before I get too much further I should
6 define what a monitor design value is. The form of the
7 ozone standard, as I mentioned before, the standard
8 allows for three exceeds in a three-year period.
9 Three-year exceeds on a given monitor is okay. It's the
10 fourth one that triggers the violation. So what I'm
11 showing in this particular slide design represents the
12 fourth highest in a three-year period. Back in the '87
13 - '89 time frame the highest design values in the region
14 were occurring just at the Illinois, Wisconsin border.
15 The highest in that time frame was 190 parts per billion
16 or actually in the context of this slide, .19 parts per
17 billion. I'll just use parts per billion as my
18 convention here. Design value concentration above the
19 standard occurred throughout the Chicago area as well as
20 in Wisconsin and Michigan and Indiana. Design values of
21 this type occurred in 70 parts per billion occurred
22 right in downtown Chicago. 180 parts per billion over
23 in Michigan City. See that we had a pretty serious
24 problem 10 years ago, and, of course, the Agency
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1 proposed has many things and the Board has acted on many
2 things to reduce precursor emissions over the last 10
3 years and through the limitation of those programs and
4 programs required by the U.S. Environmental Protection
5 Agency made tremendous strides. In the last three-year
6 period we have data available, I guess we're happy to
7 report that we only have exceedances in Wisconsin and
8 even those are much lower than they were ten years ago.
9 There are no exceedances in northern Illinois, I
10 shouldn't say exceedances, no violation, no designed
11 values greater than the level of standard in northern
12 Illinois in the last three-year period. None in
13 Indiana. None in Michigan. So there has been
14 tremendous improvement. The highest one in the region
15 now is 134, maybe not marked here, just over in
16 Milwaukee, kind of contrasted in the 190 that we had 10
17 years ago.
18 So there have been major improvements on ozone.
19 We still have a little ways to go. We're still not
20 showing attainment. And the Agency, through the NOx SIP
21 call, what we were maybe talking about earlier, will be
22 presenting its case, I guess, for additional control
23 measures that should be in containment in the coming
24 years. I didn't present you with results for the metro
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1 east area, that's another remaining non-attainment area.
2 The results from trends are very similar. There is
3 still some monitor exceedances in the metro east and St.
4 Louis region, but the trend is very favorable, similar
5 to what we're seeing here.
6 I guess I apologize to the audience, you don't
7 necessarily have these figures available to you and the
8 colors are really kind of looking kind of bad here, but
9 try to bear with me.
10 This particular figure is -- I believe this is
11 Exhibit 13 of my testimony. I didn't have it written
12 down, but I think you have it available to you. Ozone
13 modeling is a completely different animal than modeling
14 that I described to you before. What we try to do with
15 that ozone model is try to account for the chemical
16 reactions that cause ozone concentrations. Typically we
17 use what is called the grid model or the region or
18 domain subdivided into series of grid squares, 4
19 kilometers on side is usually about the finest
20 resolution we use. With a 4 kilometer resolution, of
21 course, you can't look at very low scale effects.
22 You're looking at regional or urban scale effects. What
23 I've represented in each of the panels on this figure
24 are the results, a highest 1 hour concentration
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1 projected by the model for each of a series of days in
2 an episode. I'm going to try to explain that.
3 What we try to do with ozone modeling is to try
4 to show the photochemical model, in this case, the UAM,
5 urban air shadow model, can accurately reproduce a
6 historical event or a historical episode. Back in 1991,
7 which the dates you'll see across each of these figures,
8 both Illinois and Wisconsin, Indiana, Michigan, under
9 the direction of the Lake Michigan area looking for a
10 landfill sponsor in a major field study, $6 or 7 million
11 field study, were collected, are data, air quality data
12 and UR logical data, solely for the purpose of
13 validating this model, developing this model to try to
14 show that it works. We have been working on getting
15 this model over the Chicago region for over ten years
16 now. And what we've -- what we're trying to do here is
17 to use either logical conditions that occurred during
18 that episode to make a leap of faith that these same
19 meteorological conditions will occur in the attainment
20 area in Chicago in the year 2007, will overlay future
21 year emissions or control strategies for the year 2007
22 on these historical meteorological conditions and
23 project these kinds of concentrations. So it's, I
24 guess, kind of a different animal, trying to use the
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1 model in a predicted way. We can't predict what the
2 year modeling conditions will be in the year 2007, but
3 we know these kinds of conditions have happened in the
4 past and something like this will undoubtedly occur in
5 the future. So, each of these periods represent an
6 episode case and these would be the peak predicted 1
7 hour ozone concentrations in our modeling domain,
8 assuming all of the controls required by the Clean Air
9 Act. This includes our enhanced special maintenance
10 program, reformulated gasoline, the state's 15 percent
11 programs, all of the previous NOx, the COC limits
12 approved by the Board are in the ranking program.
13 Everything that is in the Clean Air Act except the SIP
14 call is represented in this particular figure. On each
15 of these episode cases, I guess what were looking for --
16 I apologize again to the audience, what our attention is
17 focused on are the red zones. These are areas where the
18 predicted concentrations exceed 120 parts per billion,
19 roughly the level of your air quality standard. There
20 are still some violations that are shown, our
21 exceedances that are shown, mostly along the Ohio River
22 Valley, southern Indiana and around Cincinnati. In
23 Illinois, the Clean Air Act Controls, for the most part,
24 yield great improvements. We're not showing exceedances
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1 of the standard. Of course, as I mentioned before, may
2 be hidden, we're showing -- we're not seeing the
3 exceedances of violation even today. But there is at
4 least one day of this ozone episode of a modeling where
5 violations are shown, exceedances are shown, levels
6 above 120 parts per billion both in the metro east and
7 in the Lake Michigan region, not in Chicago per se, but
8 in the Lake Michigan region. That corresponds pretty
9 well to -- are still observing high ozone along the
10 eastern Wisconsin shoreline.
11 This figure is, I believe, Exhibit 14. These
12 are the results that we're seeing from the model as a
13 result of not only the Clean Air Act Controls that I
14 described previously but also any limitation of the NOx
15 SIP call. It's a little hard to compare visually two
16 figures against, you know, one against the other when
17 you don't see them both in front of you, even harder
18 when the colors are blurry but throughout Illinois
19 concentrations have been reduced as a result of the SIP
20 call and many of the exceedances that were shown along
21 the Ohio River Valley are either gone or much, much less
22 prevalent than they were before. There is still one
23 small sliver of exceedances shown over Lake Michigan,
24 more or less parallel to the eastern shoreline of
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1 Wisconsin. Again, no exceedances shown in Chicago, only
2 very minor exceedances shown in the metro east area on
3 this particular item. I guess my purpose here is not to
4 try to show attainment, I'm not here making an
5 attainment demonstration here today. What I wanted to
6 show or convey to you was that the NOx SIP call is
7 providing very large benefits and when you overlay the
8 results, when we obtain -- when we overlay the emissions
9 of the peakers in the next results that I'll show you,
10 you kind of get an idea of whether or not emissions in
11 those peakers will affect our ability to attain in
12 Chicago in 2007. I won't spend too much time on this
13 one because you're not able to really see it too well
14 anyway.
15 I wanted to introduce a different way that we
16 process the modeling results. This is called a
17 difference plot. This doesn't depict the concentrations
18 that occur at any given red zone. What this is actually
19 showing is the difference between two different
20 scenarios. In this case, what we're looking at is the
21 difference between the Clean Air Act scenario in the
22 year 2007 to the SIP call scenario that I described
23 previously. The benefits of the SIP call, if you will,
24 are shown, I believe, in the blue colors, the benefits
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1 accrue or get more intense on each successive day of the
2 episode, which is expected, the lowest ozone
3 concentration occurring early and are largely locally
4 generated by the time we're well within the episode, we
5 have much more of an effect from transporting ozone and,
6 therefore, the effect of the transport or SIP call is
7 much greater. Benefits due to the SIP call and
8 throughout Illinois is as high as -- as -- based on this
9 color scale, 10 parts per billion, 14 parts per billion,
10 18 parts per billion in some areas. And in the Chicago
11 region, Lake Michigan, benefits of at least 2 to 6 parts
12 per billion are evident across Lake Michigan on its
13 hottest days and in some cases those benefits are even
14 greater, as high as 10 to 14 parts per billion just due
15 to the NOx SIP call.
16 In this modeling scenario, back to showing you,
17 peak ozone concentration, peak hourly, but in this case,
18 added to the previous scenario, a NOx SIP call scenario,
19 the emissions from all of the peakers. Actually, we
20 went overboard at adding Michigan in this particular
21 scenario. We added not just the peakers but all the
22 combustion sources that we have permits before us and
23 we've added not just those at -- where we received
24 permits or already been instructed but all of the ones
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1 that we know about to this date. So some of those that
2 are still pending before the Agency they're in here.
3 Now, the peakers, at least as -- as it rolls
4 before the Pollution Control Board in that that is
5 implemented, peakers would fall under the control
6 requirements of the NOx SIP call. In this modeling, I'm
7 adding them to the SIP call. So this is a worst case
8 scenario. We're looking at impacts above the SIP call,
9 and, in fact, they would have all of those caps.
10 And, I guess, I put this up there to try to
11 compare those to what we saw before just for the SIP
12 call. Maybe we won't do this very well. Let's just try
13 to look at this one hot day, which is July 20, 1991. At
14 least looking at these colors that are nice and bright
15 in front of you, I don't know if you folks can see here
16 or not, you can't notice any difference between these
17 two scenarios based on looking only at peak ozone. The
18 impacts or the response to the model to these additional
19 emissions is very small. Probably the better way to
20 look at the effect of the peakers is through that other
21 type of plot that I gave you just a minute ago, this
22 so-called difference plot where we look at the
23 incremental effect of the peakers on top of the impact
24 of the SIP call. Now, in terms of their impacts stated
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1 they are relatively small. The color scale I changed
2 here, instead of being a 2 ppb from an increase or an
3 increment on both scales a half of a ppb at a small
4 scale just so that you can see the effect. There are
5 effects that are occurring, generally very low, low
6 effects on the early days of the episode. The further
7 in the episode, the more important transport is
8 occurring now, by these later days or certainly July
9 19th, 1991, there is transport even from those peakers,
10 they're located downstate, all the way up into the Lake
11 Michigan area.
12 Are these effects significant, I don't know.
13 There is no real clear definition of what significance
14 is. In EPA's NOx SIP call, they didn't make an attempt
15 to define significance, but it is a very murky
16 definition, I think deliberately on the part of the
17 Environmental Protection Agency to -- people are really
18 saying particulate impact is significant. The -- the
19 basic idea of the NOx SIP call was that the entire
20 state's emissions is judged against some threshold of
21 significance, not just incremental emissions from one
22 particular category of emissions. So, I would -- I
23 guess I'm going to try to avoid saying whether or not
24 these effects are significant. What I will say is that
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1 in the Chicago area and on some days we have impacts
2 that we're seeing through the peakers of as much as 1 or
3 2, maybe in some cases 3 parts per billion in the
4 metropolitan area, Chicago, and in other areas of the
5 state. In the key areas where we need to be able to
6 demonstrate attainment, in those areas along the eastern
7 shore of Wisconsin, we have impacts on more like half a
8 part per billion to 1 and a half. So the effects are
9 not real admissable along any areas that we're still
10 showing a high ozone. They can certainly pose an air
11 quality issue in Chicago will be worse but as I
12 demonstrated both with modeling and with monitoring,
13 we're already maintaining the standard in Chicago. We
14 expect that we will continue to. Elsewhere in the Lake
15 Michigan region it doesn't appear that the effects are
16 occurring in the worst locations.
17 So does this result of a peaker complicate our
18 efforts to showing attainment? It certainly complicates
19 our efforts. It would be easier to demonstrate
20 attainment without having synergies.
21 The Agency is in the process of preparing its
22 attainment demonstration. It needs to be submitted to
23 U.S. EPA by December of this year. We will consider the
24 effects of these peakers in the demonstrating attainment
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1 for the Chicago state implementation plan or that
2 submittal. Whether or not we're able to show
3 attainment, I guess my expectation is that we probably
4 will, but that we think SIP call shows attainment and
5 that the effect of the peakers is not so great as to
6 really affect that judgment, that the improvements that
7 are seen from all of the programs that have been
8 implemented to date far exceed the negative consequences
9 of the peaker emissions. With that I'll conclude my
10 testimony.
11 HEARING OFFICER JACKSON: Thank you, Mr. Kaleel.
12 MR. PHILLIPS: The next Agency witness will be
13 Greg Zak. Greg will be providing testimony on the noise
14 pollution implications of peakers.
15 HEARING OFFICER JACKSON: You may begin whenever
16 you're ready. Mr. Zak.
17 MR. ZAK: Thank you. My name is -- ladies and
18 gentlemen of the Board, my name is Greg Zak. I'm the
19 noise advisor for the Illinois Environmental Protection
20 Agency. I've been asked to testify today to provide
21 information related to potential noise issues at natural
22 gas-fired peakers plants.
23 I'm going to skip over my background. I think a
24 lot of you are familiar with it and to save time, I'll
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1 go right to the issue here, which is the potential noise
2 impact of the proposed peaker plants.
3 I currently manage the noise program at the
4 Illinois Environmental Protection Agency. My annual
5 responsibilities include assisting approximately 2,000
6 citizens with noise complaints and approximately 1000
7 informational calls dealing with technical questions
8 about noise pollution measurement and control. I also
9 testify at many enforcement hearings. I take noise
10 measurements when necessary.
11 In addition to the noise advisor, there is an
12 additional person in the noise program. This person is
13 an assistant.
14 The current responsibilities of the noise
15 program consume all of our available work hours.
16 Since previous testimony has described peaker
17 plants in detail, I will confine my narrative to
18 potential noise issues related to today's topic.
19 Peaker plants propose a greater threat than
20 other types of noise -- I'm sorry -- than other types of
21 state regulated facilities with respect to noise
22 pollution because the gas turbine engine used in peakers
23 is one of the most powerful, loudest, noise sources in
24 the United States. The noise power that must be
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1 contained and neutralized in the peaker is tremendous.
2 The potential for releasing great amounts of sound power
3 poses a greater threat than most other types of state
4 regulated facilities. Its characteristic emissions can
5 be described as nuisance noise, broadband noise and
6 tonal noise.
7 Peaker noise emissions can greatly exceed the
8 limits required in the Board's noise regulations. This
9 can occur if the noise is not controlled in the peaker
10 housing and also utilizing whatever land buffer or
11 setback is needed when choosing a site.
12 Peaker noise control is accomplished through
13 four major noise control strategies.
14 The first three of these address noise reduction
15 at the peaker itself. Rough approximations are
16 presented in the form of percentages rather than in
17 detailed decibel limits found in the noise regulations.
18 I've included these percentages because I think they're
19 easier for the average person to understand who is not
20 acoustically inclined.
21 Accurate and adequate noise control of peakers
22 must be based on the decibel limits set in the Board
23 regulations. The first control strategy is comprised of
24 combustion air intake silencers, which when properly
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1 designed and installed in the average peaker reduce the
2 intake noise to a tiny percentage of uncontrolled level.
3 Second, a hard acoustic enclosure completely
4 contain the gas turbine you will trap approximately the
5 same amount of sound as the intake does, silencers will,
6 down to a very tiny percentage.
7 Third, a combustion gas exhaust silencer, which
8 when properly designed and installed, reducing the
9 exhaust noise even less -- to even lesser amount than
10 the intake silencer in the enclosure.
11 Finally, a buffer of land controlled by the
12 peaker plant sufficient to provide enough distance for
13 the noise escaping the plant to dissipate sufficiently
14 to meet all state noise pollution requirements. This
15 land buffer should be based on the amount of noise
16 reduction needed at the property lining the power
17 facility.
18 Another control strategy involves a new
19 technology called active noise cancellation. This
20 promises the potential of being able to cancel much of
21 the very low frequency, rumble type sound associated
22 with large gas turbines. This technology should be
23 viewed with caution, however, due to its unproven record
24 when used in low cost applications. However, it could
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1 be considered when the more traditional silencer
2 technology is not able to satisfactorily address the
3 rumble problem.
4 Setbacks are an important concept in addressing
5 peaker noise. A need exists for setbacks, land buffers,
6 consisting of land owned or controlled by the peaker
7 plant. The setback distance necessary would depend upon
8 what level of noise abatement was included in the
9 initial design of the peaker plant. The most frequently
10 encountered noise pollution problem seen in complaints
11 and noise pollution enforcement cases before the Board,
12 is at a residential development eventually coming to a
13 noise -- a nuisance noise emission source. A facility
14 may be in compliance even though noisy because it is not
15 near residential property. If the facility does not
16 control the use of the surrounding property, such a
17 scenario is likely to occur. There is nothing to stop
18 the farm owner, which is a typical situation, from
19 selling his air cultural land for residential
20 development and the facility then no longer has the
21 luxury of a large distance to the nearest home.
22 To avoid the problem of peaker noise impacting
23 noise sensitive areas, compliance reviews on paper of
24 the facility designs are essential to insure future
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1 compliance with the noise regulations. Then before full
2 operation is started, peakers should show that it can
3 operate at or below the nighttime limits of the Board.
4 If a peaker plant cannot show compliance through
5 demonstration, the problems then would be resolved at
6 the beginning. All this argues strongly the design and
7 noise compliance review of that design are the most
8 important project events. Designing and adding on noise
9 compliance after the plant is built may be next to
10 impossible.
11 Other state noise programs were reviewed to see
12 if new or unique regulatory methods are in use. My
13 review of report of noise regulation in the United
14 States, see our Exhibit No. 19, shows that noise
15 abatement is not regulated by 43 states. Six states
16 have very little noise regulations. Illinois is more
17 active than the others in regulating noise. Peaker
18 noise is not regulated by the other regional five
19 states, California, Texas or New York. However, please
20 remember that the noise may be regulated by local
21 ordinance in some of these states. It should also be
22 noted that in many of these states that have little
23 state regulations, the larger cities may conduct
24 regulation of noise through local ordinances. Finally,
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1 peaker noise is not regulated at the federal level.
2 Another concern over potential peaker problems
3 is the potential for impacting property values, as with
4 any other type of industrial noise source, if peakers
5 exceed the noise regulations, they could significantly
6 affect negatively on property values. Noise at such
7 levels would likely be noticeable by prospective
8 purchasers of property and any potential commercial
9 investors.
10 Local zoning has been a significant factor in
11 many of the noise complaints I've handled. In my
12 experience with the noise complaints filed with the
13 Board, it appears that local zoning has not been
14 considered -- is not considered the land buffer
15 component of noise control in making zoning decisions.
16 Of course, the reason may be that the local -- that the
17 noise level from the facility may not be appreciated or
18 even understood until the facility is built and
19 operated.
20 This issue also strongly argues for the
21 importance of preconstruction design review. The
22 Illinois Environmental Protection Agency has received no
23 noise complaints regarding existing peaker plants so it
24 would be difficult for me to comment on the more
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1 stringent regulation of existing plants. Stricter noise
2 emission controls could first be considered for new
3 facilities and expansions. Upgrading costs would be
4 extremely high, if not prohibitive, for added noise
5 control, in other words -- noise control is -- I tried
6 to -- is added after the plant is built. Silencing
7 equipment comprises the bulk of the peaker plant and is
8 carefully tuned to match the turbine. In some cases it
9 may be less expensive to install a whole new unit than
10 try to upgrade the old one.
11 Questions will arise regarding the economic
12 impact of potential additional requirements. The cost
13 could be anywhere in the spectrum depending on how
14 stringent the requirements are made. However, I can
15 confidently say that additional noise control in the
16 design stage is much less expensive than adding it on
17 after the installation is operational.
18 I cannot say that there are currently any gaps
19 in the regulations. It may be that there is inadequate
20 preconstruction design work and design review relevant
21 to noise compliance issues. I believe that considerable
22 information would be available from a turbine
23 manufacturer that could be evaluated by a competent
24 noise consultant to help design for the four components
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1 of noise control I mentioned earlier. Intake, turbine
2 enclosure, exhaust and the land buffer. Failure to
3 adequately plan for any of the four could lead to future
4 non-compliance. It may be too late and/or too expensive
5 to look at the problem only after numerous citizens are
6 impacted by the noise.
7 Thank you for listening.
8 HEARING OFFICER JACKSON: Thank you, Mr. Zak.
9 We'll go ahead and take the next Agency witness
10 then.
11 MR. PHILLIPS: The next agency witness would be
12 Steve Nightingale who will be testifying as to water
13 pollution implications of peakers.
14 MR. NIGHTINGALE: Good afternoon.
15 My name is Steve Nightingale and I am the
16 manager of the Industrial Unit in the Bureau of Water's
17 permit section at the Illinois Environmental Protection
18 Agency. I've been with the Agency for just over 14
19 years and I am a licensed professional engineer.
20 The testimony that I have submitted is response
21 to the governor's question with regard to the impact of
22 natural gas-fired peak load electrical power generated
23 facilities or peaker plants on water.
24 Initially, it must be stated that not all peaker
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1 plants produce wastewater. However, if wastewater is
2 generated from the peaker plant, the discharge from the
3 plant will be subject to existing local, state and
4 federal regulations.
5 The testimony is -- this testimony is intended
6 to address peaker plants that are used during peak power
7 demand to generate electricity. They are natural gas
8 powered turbines, peaker plants that may choose to
9 discharge directly to surface waters or to a publically
10 owned treatment works or POTW and discharge its surface
11 waters.
12 General speaking, wastewater generated from
13 peaker plants will either be subject to the Federal
14 National Pollutant Discharge Elimination System or NPDES
15 permit program or the state construction and/or
16 operating permitted program, depending on actual
17 wastewater disposal method. The Illinois Environmental
18 Protection Agency administers both permit programs.
19 Surface water discharges will be required in an
20 NPDES permit in accordance with Board CFR 122 and 35
21 Illinois Administrative Code 309. Permit limits that
22 will apply will be the water quality limitations from 35
23 Illinois Administrative Code 302, the effluent
24 limitations found in 35 Illinois Administrative Code 304
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1 or other technology based limitations using best
2 professional judgment in accordance with 40 CFR 125.3.
3 It has been determined that surface discharges from
4 these facilities are not subject to any federal
5 industrial categorical effluent guideline discharge
6 limitation. Discharges to a POTW will be required to
7 obtain a state construction and/or operating permit in
8 accordance with 35 Illinois Administrative Code 309.
9 Applicable limitations that will apply are those
10 established by the local POTW, 35 Illinois
11 Administrative Code 307 and the federal general
12 pretreatment regulations found in the 40 CFR 403.
13 During the NPDES permit review process, a draft
14 permit will be developed with the required applicable
15 limitations. In addition, the draft memo will also
16 include appropriate monitoring requirements and special
17 conditions to verify continued compliance.
18 Upon completion of the Illinois Environmental
19 Protection Agency review process, a public notice, fact
20 sheet and a draft permit will be sent out on a 15-day
21 notice, followed by a 30-day public notice period.
22 Changes can be made to the draft within following the
23 notice period and the general public has the opportunity
24 to participate in the process through hearing comments.
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1 Some peaker plants will require a construction
2 authorization from the Illinois Environmental Protection
3 Agency if they must treat the wastewater to a level
4 below NPDES permit limitation.
5 Final action on the construction authorization
6 will not be taken until the NPDES permit has completed
7 the public notice period and the permit is ready to be
8 issued.
9 The state permit review process is followed when
10 peaker plants propose to discharge to a POTW.
11 As previously stated, the state construction in
12 our operative permits are required in accordance with 35
13 Illinois Administrative Code 309. Prior to permit and
14 issuance, the applicant must be able to show the
15 discharge will be in compliance with the limitations
16 established by the local POTW, 35 Illinois
17 Administrative Code 307 and in compliance with the
18 federal general pretreatment regulations found in the 40
19 CFR 403.
20 The composition of the wastewater generated from
21 peaker plants will vary and is dependent on the type of
22 plant design. Waste streams that have been identified
23 in the permit applications submitted to the Illinois
24 Environmental Protection Agency include evaporative
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1 cooling water blowdown, cooling tower blowdown, reverse
2 osmosis waste discharge, demineralization blowdown,
3 filter backwash, chiller system water, various drains
4 and sanitary waste.
5 Pollutants that could be expected in the
6 wastewater includes such things as total suspended
7 solids, total residual chlorine, PH, temperature, total
8 dissolved solids, calcium, magnesium, iron, manganese,
9 sulfate, chloride, oil & grease, water conditioning
10 chemicals for bio-fouling and corrosion control as well
11 as radioactive isotopes in some areas.
12 There may be some peaker plants that generate
13 wastewater containing a thermal component, but the
14 quality of the wastewater would be small as compared to
15 other types of power plants. As a result, these plants
16 should be able to be operated in a way that is in
17 compliance with appropriate discharge regulations.
18 Illinois Environmental Protection Agency expects
19 that all sanitary wastewater should be discharged to a
20 sanitary sewer.
21 My testimony has not addressed radioactive
22 isotopes because they are to be under the jurisdiction
23 of the Illinois Department of Nuclear Safety.
24 I have included an Illinois Environmental
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1 Protection Agency Exhibit 18 as an overview of the
2 information received by the Illinois Environmental
3 Protection Agency's Bureau of Water as part of the
4 permit application process.
5 The Illinois Environmental Protection Agency's
6 Bureau of Water does not participate in the accuracy of
7 environmental impact on the waters of the state as a
8 result of the discharge from peaker power plants,
9 provided the appropriate permits are obtained and the
10 established permit limitations met.
11 This concludes the summary of my testimony. I
12 would be happy to address any questions.
13 HEARING OFFICER JACKSON: Thank you, Mr.
14 Nightingale.
15 Before we go on with the final two Agency
16 witnesses, just a procedural note, we have two
17 individuals from the Department of Natural Resources and
18 I know one of them is going to be needing to catch a
19 train later this afternoon, so what we're going to do
20 is -- I don't think we've got a whole lot more from the
21 two remaining Agency witnesses. We'll conclude with
22 them, take a very brief recess and then bring the
23 Department of Natural Resources on for their witnesses
24 to present their testimony to us, and then ask if the
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1 Agency would be kind enough to please come back after
2 that and answer any questions that the Board might have.
3 Okay. That's the plan.
4 Thank you. Go ahead.
5 CHAIRMAN MANNING: The Board may, in addition to
6 that, we have lots of prepared questions that we've done
7 because of the pre-filed testimony. Those that we're
8 not able to ask you orally today we will put in writing
9 and we will ask you to respond either in writing or in
10 one of our future hearings. So a lot of the detailed
11 questions that we have for you today we may follow up
12 with the written hearing officer order.
13 MR. PHILLIPS: Okay. Thank you.
14 Our next witness then will be Rick Cobb. Rick
15 has a few brief comments on the groundwater limitation
16 of peaker plants.
17 MR. COBB: As Mr. Phillips indicated, my name is
18 Rick Cobb and I manage the groundwater sections of the
19 Bureau of Water of the Illinois Environmental Protection
20 Agency.
21 My testimony is really just to respond to the
22 governor's executive order, he did ask us to address
23 particular groundwater related issues and as Director
24 Skinner indicated, testified earlier today, the Agency
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1 has no authority under the Environmental Protection Act
2 to regulate the quantity of groundwater, however, we do
3 have regulations for the Pollution Control Board and the
4 Environmental Protection Act that do relate to
5 groundwater quality protection provisions.
6 However, just to touch on what type of law does
7 apply to groundwater quantity, simply because we have
8 had numerous questions and that is a related topic and
9 one of the issues that the Governor indicated in his
10 executive order. Essentially, the law that does apply
11 is what is called the Water Use Act of 1983, and in
12 January of 1984, really brought Illinois
13 under identified I guess doctrine of common law, which
14 covers the development and use of both surface and
15 groundwaters.
16 That public act in Section 3F includes the
17 definition of reasonable use. And key thing there is
18 the -- primarily the groundwater is -- that for
19 groundwater is non-restricted except from malicious and
20 wasteful purposes of that water.
21 Concurrent with the executive order that require
22 these hearings, it also required the establishment of
23 the Water Resources Advisory Committee.
24 And that committee's task is to examine the
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1 various economic and social issues related to energy
2 producing facilities and water use in Illinois. That
3 committee has not convened yet. The first meeting is
4 actually August 31st. And as I understand, I will be
5 participating in that committee.
6 Secondly then in terms of groundwater quality,
7 and I'm sure the Board is aware of the authority through
8 the Board's groundwater quality standards regulations,
9 non-degregation provisions, the regulation in total are
10 applicable as well as force of water under Section 12A
11 of the Environmental Protection Agency Act.
12 That really concludes my testimony with respect
13 to potential groundwater issues from an agency
14 perspective.
15 HEARING OFFICER JACKSON: Okay. Thank you, Mr.
16 Cobb.
17 Looks like Todd Marvel is the last witness.
18 MR. PHILLIPS: The final Agency witness, last
19 but not least, is Todd Marvel, who will be providing
20 some brief comments on the land pollution implications
21 of peakers, limited as they are.
22 MR. MARVEL: Good afternoon.
23 As Mr. Phillips said, my name is Todd Marvel.
24 I'm employed with the Illinois Environmental Protection
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1 Agency's Bureau of Land as the assistant manager of the
2 field operations section and as the RCRA coordinator and
3 U.S. Environmental Protection Agency liaison for the
4 hazardous waste programs. And RCRA is an acronym. It's
5 spelled R-C-R-A, all caps. And, of course, as we
6 hopefully all know, it stands for the Resource
7 Conservation and Recovery Act, which was passed by
8 Congress in 1976. And it established standards for the
9 identification and management of hazardous waste,
10 federal standards.
11 The Illinois Environmental Protection Agency is
12 authorized by the U.S. Environmental Protection Agency
13 to implement the RCRA hazardous waste program in the
14 state of Illinois and my testimony will address land
15 pollution issues as they relate to natural gas-fired
16 peaker plants.
17 Peaker plants may generate various types of
18 waste that must be managed in accordance with waste
19 disposal regulations found in Subtitle G of Title 35 of
20 the Illinois Administrative Code.
21 By comparison, peaker plants are no different
22 than any other generator of the following types of
23 wastes in terms of how the waste is regulated.
24 Any municipal waste generated at the facility,
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1 such as general office waste, must be sent to a facility
2 permitted to treat, store or dispose of municipal waste.
3 Any special waste generated at the facility,
4 must be managed properly in accordance with the
5 regulations applicable to the specific type of waste
6 that is generated. Special waste is defined as
7 industrial process waste, pollution control waste or
8 hazardous waste.
9 And all special waste is subject to the
10 requirement to make a hazardous waste determination,
11 which is found in the RCRA Subtitle C hazardous waste
12 regulations.
13 If the waste is determined to be a non-hazardous
14 special waste, the waste cannot be accumulated on site
15 for any more than one year. Typically they are sent off
16 site on a regular basis. In general, such waste must
17 also be properly sent off site to a permitted treatment
18 storage or disposal facility and this waste may be
19 declassified as municipal waste if certain requirements
20 are met and certain documentation is maintained.
21 If any special waste generated at a facility is
22 determined to be a hazardous waste, such as waste
23 cleaners or solvents, then the facility must consider
24 the amount of hazardous waste generated on a monthly
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1 basis in order to determine their generator category and
2 subsequent regulatory requirements.
3 The Illinois Environmental Protection Agency
4 anticipates that most, if not all, peaker plants will
5 generate less than 100 kilograms per month of hazardous
6 waste. Such facilities would be classified as a
7 conditionally exempt small quantity generator.
8 A conditionally exempt small quantity generator
9 is subject to three primary regulatory requirements.
10 First, as I said before, a proper hazardous
11 waste determination must be made on all special wastes
12 generated at the facility.
13 Second, the hazardous waste generated must be
14 accumulated in tanks or containers.
15 And third, these wastes must eventually be sent
16 off site to a permitted hazardous waste treatment
17 storage or disposal facility.
18 The other two categories of generators are a
19 small quantity generator and a large quantity generator.
20 There is some more detail in my testimony, which I won't
21 go into, but I will just say that there are differing
22 levels of regulatory requirements and waste accumulation
23 time limits that apply to the three different categories
24 of hazardous waste generators.
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1 If these requirements are met, no hazardous
2 waste permit or typically any other permit would be
3 required from the Bureau of Land.
4 Finally, I'll briefly address some past -- I'll
5 briefly address past land use information that is
6 available from the Illinois Environmental Protection
7 Agency and specifically the Bureau of Land.
8 Peaker plants may be located on property that
9 was once used for commercial or industrial activities
10 such as gas stations, small manufacturing and assembly
11 operations. Information regarding whether or not there
12 have been any reported releases to the environment at
13 these sites can be obtained from Illinois Environmental
14 Protection Agency, as well as documentation of any
15 cleanup activities that have been completed in response
16 to these releases.
17 Thank you.
18 HEARING OFFICER JACKSON: Thank you, Mr. Marvel.
19 Mr. Phillips, do you have any concluding remarks that
20 you would like to make or would you like to reserve them
21 for questions the Board may --
22 MR. PHILLIPS: We'll reserve them for later.
23 HEARING OFFICER JACKSON: All right. Why don't
24 we take a very short break. Let's say five minutes.
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1 Try to be back here as quickly as possible. We need to
2 get in line because of the Department of Natural
3 Resources testimony.
4 (Off the record.)
5 HEARING OFFICER JACKSON: Okay. We're going to
6 go back on the record. We have some presentations from
7 the Department of Natural Resources now. Mr. Anderson,
8 if you want to begin.
9 MR. ANDERSON: Thank you.
10 First of all, I'd like to thank the Board for
11 the opportunity to appear today and also thank you for
12 indulging our schedule.
13 My pre-filed testimony is short. My summary of
14 that testimony will be shorter.
15 I am Brian Anderson. I am the Director of the
16 Office of Scientific Research and Analysis of the
17 Illinois Department of Natural Resources.
18 I have three purposes here today. The first of
19 those is to extend the expertise in Illinois Scientific
20 Survey to the Pollution Control Board and their staff in
21 these deliberations. Secondly, I'm here to represent
22 Director Brent Manning, Director of the Department of
23 Natural Resources. Director Manning and Director
24 Skinner are co-chairing the Governor's Water Resources
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1 Advisory Committee. And you've already heard something
2 about that committee today. You may ask, others may
3 ask, why do we need to be discussing peaker power plants
4 in two different forms, your deliberations and the
5 discussions that will take place in the Water Resource
6 Advisory Committee? That has somewhat been alluded to
7 by the Agency but let me be more explicit. In Illinois,
8 except for withdrawals of water from Lake Michigan,
9 there is extremely limited regulatory authorities
10 associated with water withdrawals from our other surface
11 waters and from groundwater. It's, therefore, more
12 appropriate to deal with water quantity issues in front
13 of -- in the context of Water Resources Advisory
14 Committee, however, we do acknowledge the relationship
15 between these issues and I have asked Dr. Derek
16 Winstanley, Chief of the Illinois Water Survey, to
17 provide a concise summary of some of the water quantity
18 issues relating to peaker power plants.
19 That ends my testimony and I ask that my
20 pre-filed testimony be entered into the record.
21 HEARING OFFICER JACKSON: It will be so entered.
22 Thank you.
23 DR. WINSTANLEY: Thank you. My name is Derek
24 Winstanley. I am Chief of the Illinois State Water
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1 Survey. We are a division of the Department of Natural
2 Resources. We're also an affiliated member of the
3 University of Illinois at Champaign, Urbana.
4 I will be speaking about groundwater resources
5 as they relate to peaker power plants. I will provide a
6 summary of some of the key points in my written
7 testimony that I've already submitted. I do also plan
8 to give testimony at the first meeting of the Water
9 Resources Advisory Committee at its first meeting on the
10 31st of August where I understand water resource issues
11 relating to power plants will be the subject of more
12 detailed discussion.
13 One focal point that I do wish to make is that
14 the discussion of peaker power plants and the impacts on
15 groundwater resources should be placed within the
16 context of all other water demands including those for
17 combined cycle plants as well as Illinois' growing water
18 needs for domestic, municipal, agricultural and other
19 industrial uses. We do need to look at total demands
20 from the groundwater resources as a basis for sound
21 water resource management. The water demands from the
22 peaker power plants vary widely depending upon plant
23 design, their intended use and the number of days of
24 operation.
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1 I would like to give you some examples of the
2 quantities of water that may be associated with
3 operations of peaker power plants by putting that in
4 context of some other water uses. First of all, peaker
5 power plants, and I am going to focus on just a simple
6 cycle power plant when I refer to the peaker power
7 plants, these are typically small producing a few tenths
8 to a few hundred, perhaps a thousand megawatts of
9 electricity. They do not operate everyday of the year.
10 The typical period of operation is from perhaps 20 to 90
11 days per year. The range of water use there is from
12 less than 100,000 gallons per day to about 2 million
13 gallons per day. Translating that into an annual use
14 that gives us a range of from about 1.4 to 180 million
15 gallons of water per year.
16 Turning to baseload power plants, which is
17 combined cycle, these are obviously much larger,
18 typically generate maybe 500 to several thousand
19 megawatts of electricity and are intended to operate
20 more or less continuously throughout the year. They
21 consume water within the range of about 5 to 20 million
22 gallons per day. Translating that to an annual water
23 use, that gives us a range from about 1,500 million
24 gallons per year to 6,000 million gallons per year.
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1 So in context, the peaker power plants consume
2 about a fraction of 1 percent to about 3 percent of the
3 water used by typical baseload combined cycle plants.
4 Another example of water use, municipal water
5 use, and I give you data from Champaign, Urbana, for
6 context. Champaign, Urbana, has a population of about
7 120,000 people, and they need that water supply
8 regularly 365 days per year. Champaign, Urbana,
9 currently consumes about 20 million gallons per day of
10 groundwater, which translates into an annual use of
11 about 7,300 million gallons per year.
12 So to put the water use by peaker plant in
13 context of a municipal use, a typical peaker plant would
14 use the same amount of water as between about 25 and
15 3,000 people, depending upon the nature of the peaker.
16 One concept that is important in examining not
17 only peaker power plants but all groundwater use is the
18 concept of sustainable yields. And in my written
19 testimony, I refer to that as potential yield.
20 Sustainable yield is a fairly diffuse concept but
21 generally, it tends to mean the yield of water that can
22 be sustained over the long term so that it can be used
23 not only by the current population but also by future
24 generations and a yield that will have no significant
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1 impacts.
2 The determining sustainable yield is a complex
3 scientific exercise that involves consideration of
4 variables such as rainfall, recharge rates, geology and
5 impacts. Impacts not only on existing wells, but on
6 peaker systems and on stream flows.
7 The point here is that for most aquifers in
8 Illinois, we do not have a very highly accurate estimate
9 of sustainable yield. We need much better scientific
10 data and modeling capabilities to be able to estimate
11 sustainable yields.
12 Another important point is that aquifers
13 themselves are not very sensitive to the end uses of
14 water. That is an aquifer doesn't really differentiate
15 whether a million gallons of water is going to be used
16 for drinking water or for peaking power plants or for
17 golf courses but the public often does differentiate
18 among those end uses and, I think, trying to incorporate
19 the public values and preferences into the equation on
20 water resource management is an important consideration
21 as well as the actual amount of water used.
22 Water quality has been mentioned by people from
23 Environmental Protection Agency giving previous
24 testimony. There are natural occurrences of various
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1 chemicals in the groundwaters throughout Illinois.
2 These lead to mineral concentrations that can effect not
3 only the operation of the peaker plants, but also the
4 discharges from the peaker plants. So the water quality
5 also needs to be considered.
6 In conclusion, I would like to make two points,
7 one focusing exclusively on groundwater, the other
8 combining groundwater with surface water.
9 Focusing on groundwater, it's important to
10 recognize that in the use of groundwater resources, all
11 uses of groundwater, not just peakers, that we need to
12 consider the scale of the natural resource, that is the
13 aquifer.
14 Groundwater typically is found in discrete
15 aquifers that transcends political jurisdictions. They
16 cut across municipalities, counties and even states.
17 Plumbing management by individual communities will not
18 solve problems in the long term, we need to take an
19 aquifer-wide perspective. Beyond just groundwater, I
20 think that we need much more consideration of the
21 conjunctive use of surface and groundwater. There can
22 be many efficiencies gained in water supplying usages by
23 considering conjunctive uses of surface and groundwater.
24 So my bottom line is that I think Illinois would
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1 benefit from moving towards much more comprehensive
2 regional water resource planning and management. This
3 will bring together communities and cut across
4 jurisdictions and we'd -- much more appropriate to the
5 scale of the natural resources, that is the aquifers in
6 the case of the groundwater supplies and river basins
7 and water sheds for surface waters.
8 With that I conclude my testimony and will be
9 pleased to take any questions.
10 HEARING OFFICER JACKSON: Thank you, Dr.
11 Winstanley.
12 Do the Board member have any questions for the
13 Department of Natural Resources?
14 MS. KEZELIS: Doctor, I do. With respect to
15 your testimony that comprehensive groundwater quantity
16 law in Illinois is needed, and you don't need to answer
17 this now, but I would like to see some factors that you
18 would propose such a law include or some other state
19 that you would propose that such a law would be modeled
20 after.
21 DR. WINSTANLEY: Could I clarify what I think I
22 said, may be the difference between your question and
23 what I was recommending?
24 I was recommending comprehensive regional water
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1 resource planning and management, not necessarily new
2 laws. It may require new laws.
3 Let me give you one example I think is an
4 excellent model of what is going on in one part of
5 Illinois and that is in central Illinois. We have a
6 major aquifer, the Muhammed aquifer, that extends from
7 the Illinois River across to Indiana, which embraces 15
8 counties. Now, in the past couple of years, the local
9 communities in that 15 county area have bonded together
10 to form what is called the Muhammed aquifer consortium
11 and they're collectively concerned about the future of
12 their own water resources, want to better characterize
13 those resources and opportunities as a basis for
14 self-management to the water resources.
15 So, I think, on the one hand we may need new
16 laws, regulations, but I think we also need to encourage
17 local communities to attempt to solve their own
18 problems.
19 MR. ANDERSON: I might also -- in my testimony,
20 I referenced the 1966 assessment of Illinois water law.
21 HEARING OFFICER JACKSON: Use the microphone
22 phone, please.
23 MR. ANDERSON: I'm sorry.
24 In my testimony, I referenced the 1966
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1 assessment of Illinois water law. It provides a very
2 good and detailed assessment of existing statutes in
3 Illinois, does some comparisons with other states in
4 terms of regulating water withdrawals and looking at
5 water quantity and it does reference several model
6 codes.
7 HEARING OFFICER JACKSON: Anything else?
8 MR. RAO: I have a question for Dr. Winstanley.
9 In your testimony you focused a whole lot on the use
10 of --
11 HEARING OFFICER JACKSON: Anad, use --
12 MR. RAO: Oh, I'm sorry.
13 In your testimony, you focused a lot on the use
14 of surface water and groundwater for the peaker plants.
15 Have you considered use of other sources -- other
16 sources like reclaimed exposed lake water, you know, to
17 be used in peaker plants or any such, you know, power
18 plants?
19 DR. WINSTANLEY: I think we should look at all
20 alternative sources of water. I focused on groundwater
21 because that was my requirement in presenting testimony
22 here today. But we equally need to look at alternative
23 sources from rivers and streams, lakes, reservoirs, Lake
24 Michigan and conservation and water reuse. That is why
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1 I'm advocating a comprehensive regional approach that
2 would incorporate all of those considerations.
3 MR. RAO: So the water resources that try to
4 be -- focus on other sources of water --
5 DR. WINSTANLEY: I cannot speak for the
6 committee. It is not made yet and I have had no input
7 into the agenda.
8 MR. RAO: Thank you.
9 HEARING OFFICER JACKSON: Anyone else?
10 Okay. Thank you. Mr. Winstanley, if you would
11 also provide a copy of your testimony to the court
12 reporter so she can mark that as an exhibit.
13 DR. WINSTANLEY: I'd be happy to record my
14 written testimony in the record.
15 HEARING OFFICER JACKSON: Yes. Thank you very
16 much.
17 At this point we'd be happy to invite the IEPA
18 to come forward again.
19 Express on the record my sincere appreciation
20 for the Agency's patience in dealing with these
21 scheduling problems.
22 We do have some questions that the Board members
23 and the technical unit would like to ask on the record.
24 However, as Chairman Manning indicated earlier, a
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1 majority of our questions will be submitted in written
2 form to the Illinois Environmental Protection Agency and
3 we would also ask them to respond in written form to the
4 Board then so that will become part of the record as
5 well.
6 CHAIRMAN MANNING: I have a question. I'll go
7 ahead and start.
8 Director Skinner, as one of the co-chairs of the
9 Water Resources Advisory Committee, I note pending their
10 first meeting on August 31st, is it your understanding
11 that the subject of those committee meetings is going to
12 be the whole idea of the use of water and those kinds of
13 things in terms of what the committee will be doing?
14 MR. SKINNER: Yes. The answer to that in short
15 is yes. It's kind of interesting. The -- the separate
16 committee came about in part because of the peaker plant
17 question in general. I mean, water consumptions, is one
18 of the issues that is often raised as something we ought
19 to be concerned about with regard to peaker plants.
20 When we sat down to actually start to hash that
21 out a little bit, it became clear in very short order
22 that this wasn't strictly a peaker plant issue, that it
23 really cuts across any number of types of facilities and
24 then when you attempt to even to start to put numbers to
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1 limits to groundwater withdrawal, you start to impact
2 operations across the boards; agricultural operations,
3 utilities, manufacturing operations. So, it has many
4 more components to it than strictly peaker plants.
5 For that reason, I think the Governor decided to
6 go ahead and appoint this separate panel to really
7 consider those broader issues with -- in order not to
8 distract the Board from considering the specific peaker
9 plant issues. But, yes, groundwater consumption and
10 water use in general is the main mission of that
11 separate board.
12 CHAIRMAN MANNING: I have a question, too, for
13 the panel directly. On the issue of noise regulations
14 and whether a particular facility that is going through
15 the permitting process as the Environmental Protection
16 Agency, does a facility have to make a demonstration at
17 all that they will meet the way -- they're construction
18 and design will meet any of the Board's noise
19 regulations in order to get any of the air permits or is
20 the noise process completely separate from the air
21 permitting process? Can you sort of explain that
22 connect?
23 MR. SKINNER: Sure. I'm trying to decide where
24 to start.
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1 You may have noticed from Greg's written
2 testimony that very few states across the country have
3 state noise programs.
4 In fact, we're one of the exceptions to the rule
5 to the extent that we have a noise expert that works
6 with communities and that keeps Greg busy year round.
7 Most noise regulation and enforcement is left to locals
8 across the country.
9 We do have -- there are noise standards in
10 Illinois. We do not, as a state -- and we don't, as an
11 agency, have a -- what I would consider to be a
12 substantial noise enforcement program because of
13 resource limitations.
14 The way that we chose to approach it is to make
15 Greg, our expert, available to local communities to the
16 extent that they have noise problems that arise. Greg
17 works with them to try and kind of walk through the
18 issues and in some cases ends up testifying in court, if
19 the cases end up going to court.
20 With regard to peaker plants specifically, we
21 don't do noise permitting. So, while companies may
22 submit documentation and, again, Greg, you can stop me
23 if I'm wrong, submit documentation with regard to what
24 their noise output is going to be, It's not something
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1 that we review in the course of issuing our air permit.
2 MR. ZAK: That's correct.
3 CHAIRMAN MANNING: That's correct. Is that
4 correct?
5 MR. SKINNER: Yes. That's correct.
6 MR. FLEMAL: Just as a follow-up. Mr. Zak, have
7 you actually looked at any of the applications that are
8 before the Agency to see whether or not the kind of
9 noise abatement devices you've mentioned are employed in
10 these?
11 MR. ZAK: No, I have not.
12 MR. FLEMAL: Is it your understanding generally
13 that it is a standard practice to include abatement
14 procedures --
15 MR. ZAK: As far as --
16 MR. FLEMAL: -- in designs?
17 MR. ZAK: Well, as far as noise is concerned, I
18 think that it's only rarely submitted with the -- with
19 the -- through the permit process. I think Chris
20 Romaine addressed that more -- in more detail as far as
21 what actually comes in on a permit, but --
22 MR. FLEMAL: I guess I am not really so
23 concerned whether it is in the permit application or
24 not. I am concerned whether or not noise abatement is a
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1 standard part of the design of peaker plants, whether or
2 not it is mentioned in the permit.
3 MR. ZAK: Yes. The -- all the peaker plants
4 I've seen to date have noise control built in to varying
5 degrees, but they are not uniform in the way they would
6 handle the noise question. Some have more noise control
7 built in and some less.
8 To date, we have had many that you might say are
9 on the noisier side that have been located in a
10 residential area. Fortunately, those have been placed
11 in rural areas where they don't create a problem, that
12 there is enough buffer there to prevent there from being
13 a problem.
14 CHAIRMAN MANNING: Mr. Zak, can you explain in
15 laymen's terms or scientific terms, whichever works best
16 for you, what kind of noise we're talking about as far
17 as levels as well as types?
18 You had mentioned a rumbling noise and also you
19 did put it in percentages as far as the reductions that
20 can be achieved, but I wonder how noisy are they, in
21 general?
22 MR. ZAK: The -- the noise emissions associated
23 with your peaker tend to be in the broadband area a low
24 frequency noise, more of a rumbling type noise. That's
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1 one noise characteristic of the peaker.
2 The other characteristics that can be there are
3 tones. Although they're not exactly the same, I would
4 kind of draw an analogy to the jet engine, you hear on
5 an aircraft. You'll notice that on your jet engine you
6 hear a rumbling sound that can be heard for really
7 several miles away from a large aircraft that is under
8 full power. You'll also tend to hear a bit of a whining
9 sound. That would be the tone.
10 So the areas you've got that generate noise
11 would be of a rumble sound, of a whining sound, and all
12 these different types of -- these two types of sounds
13 can be controlled in the design stage of the peaker. As
14 a matter of fact, I think that a large portion of the
15 cost of the entire system is -- consists of noise
16 control.
17 MR. MELAS: Staying on that same area of the
18 noise, Mr. Romaine, does the Agency have a policy as you
19 have it right now to require in the permit application
20 that they indicate whatever noise controls they are
21 planning before a peaker plant permit is granted?
22 MR. ROMAINE: I can't speak to our authority.
23 As a practical matter, following the Reglet decision,
24 our air permit section, as a matter of policy, or as a
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1 matter of law, does not go out beyond issue of air
2 pollution control issues. We have certainly allowed
3 people to include information on noise with their
4 applications as an attachment, but it is not something
5 that we review as part of our decision on the air
6 pollution control application.
7 MS. KEZELIS: Mr. Zak, can you explain for us in
8 a bit more detail what active noise cancellation is?
9 MR. ZAK: Yes. Active noise cancellation is a
10 relatively new technology and what it consists of is a
11 computerised system that -- I'll put this in very much
12 laymen's terms, and -- the system itself will listen to
13 the sound and analyze what the sound is like and it will
14 then, through a speaker, generate the same sound, but
15 what it does to it is it reverses it by 180 degrees.
16 When they -- this new -- the sound creates combined with
17 the existing noise, they cancel each other out. In
18 other words, you've got -- let's say the wave goes
19 positive by a factor of one, it will generate a wave
20 that is negative by a factor of one and that will then
21 cancel out the sounds.
22 The technology has been used by the Department
23 of Defense in a number of engine applications where cost
24 was of no consequence. They simply wanted to quiet
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1 something down and they didn't -- they wanted to do it
2 in a -- without putting in a -- very, very large
3 muffler. So, the big advantage factor of noise
4 cancellation is that it allows you to, with a relatively
5 small device, to cancel quite a bit of noise, but,
6 again, the cost factor has to be considered. It's much
7 more expensive than the conventional one.
8 MS. KEZELIS: Is there a difference in the noise
9 emitted by coal-fired peakers as opposed to the gas --
10 natural gas peakers that we're talking about today?
11 MR. ZAK: Well, if I can expand upon that a
12 little bit. I think perhaps what you mean, in
13 coal-fired powered plants, you wouldn't normally have
14 the peaker associated with that just because -- it's my
15 understanding the fuel isn't quite right, solid fuel as
16 opposed to say liquid or gas fuel. The -- but
17 historically with the coal-fired plants, we have had
18 some noise problems. Specifically, the induced
19 raffans(phonetic) used in some of the plants have
20 created tonal noise problems, specifically under Section
21 901.106.
22 Again, what we were talking about there is
23 usually -- I would describe it as something like the
24 sound you have for your home vacuum cleaner. The vacuum
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1 cleaner sound is an example of a medium to low frequency
2 pure tone. And we've had those type of sounds come from
3 coal-fired plants. And they have been corrected with
4 the use of silencers.
5 And in the peaker, again, we have the potential
6 for that to happen. So far, we've had no complaints on
7 peakers. However, with the new influx of permit
8 applications and peakers coming on-line, we're keeping
9 an eye on that to see if we do have a -- have a problem.
10 And I tend to think that the -- the proper way to
11 address that in my testimony was to examine the -- the
12 plans for the installation before it's actually built,
13 again, to the benefit of the peaker company whether --
14 whoever does the actual work, say it's a private
15 consultant, a local zoning authority, whoever, needs to
16 look at that to determine if there is going to be a
17 problem or not before the plant actually comes on-line.
18 MR. GIRARD: I have a question, Mr. Zak. Do you
19 know of any local governments in the state that have
20 more stringent noise standards than the state standards?
21 MR. ZAK: No, I do not.
22 MR. GIRARD: Do you know of any reason why a
23 local government could not pass a more stringent
24 standard in relation to peaker plants?
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1 MR. ZAK: They could. The -- I think the
2 reluctance on some of the local governments, though, is
3 the cost of the personnel and the instrumentation in
4 order to enforce that type of noise regulation. It
5 is -- the instrumentation is expensive and typically the
6 salaries are also expensive for the folks that can take
7 those kind of measurements and enforce those kinds of
8 regulations.
9 MR. GIRARD: Thank you.
10 CHAIRMAN MANNING: Some one of the Agency
11 witnesses, I think it was Mr. Romaine, testified that
12 peaker plants have been around for a long time. They're
13 just really increasing in numbers at this point in time.
14 Mr. Fisher asked actually as well and the
15 Commerce Commission gave an example of one we've have
16 had in Springfield that I was honestly unaware of.
17 I guess my question is are the peaker plants
18 that are being proposed now in up state -- in the
19 Northern part of Illinois, are they larger in terms of
20 days of output or days of usage and those types of
21 things compared to those that might have historically
22 been built over the course of the years in downstate
23 Illinois?
24 MR. ROMAINE: I'm not in a position to answer
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1 that question. The existing power -- peaker power
2 plants have been grandfathered sources. They have not
3 gone through the construction permitting process so they
4 have not been subject to limitations on their operating
5 hours.
6 Many of them are, in fact, permitted -- could
7 operate around the clock, if they wanted to. So they've
8 been constrained really by the demand for their
9 services. To the same extent that the proposed plants
10 are constrained by the demand for their services, they
11 may operate in similar period of time. And I've heard
12 statements that say the new power plants because they're
13 larger, more efficient, may, in fact, be operated
14 preferentially to the existing peaker power plants. So
15 because of that they may, in fact, operate more hours
16 than the peaker plants would operate. In fact, some
17 developers have suggested they will replace the existing
18 peaker power plant.
19 So I think it would be speculation on the
20 Agency's part to comment on what is going to happen in
21 terms of actual operations comparing the new peaker
22 power plants to existing peaker power plants. All we
23 can tell is what they have requested and what they're
24 being permitted for.
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1 MR. SKINNER: That's from a more technical
2 perspective. I think from the more day-to-day common
3 sense perspective what we're is seeing different now
4 compared to the peaker plants that exist currently is
5 that they're being proposed for different areas, in
6 closer proximity to where people live.
7 I mean, to the extent that the older facilities
8 are located adjacent to or near by the existing baseload
9 power plants, intuitively, I believe that it is not
10 going to be as big an issue as if you take a facility
11 and propose it for someplace where its surrounded by
12 residential homes or at least, you know, within a half a
13 mile. That's more what we're seeing. We're seeing it
14 more in northeastern Illinois than we have in the past.
15 CHAIRMAN MANNING: Right. I understand the
16 density issue. I was more concerned about whether we
17 knew anything about whether they were larger or more
18 noisy or more output than some of the ones that are
19 proposed.
20 MR. SKINNER: You know, again, just from my
21 perspective, I doubt very much whether there are any --
22 I think they're probably cleaner. The technology has
23 come much further than when these old facilities were
24 first proposed. So from an emission standpoint, you're
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1 getting more state-of-the-art engines at this point than
2 you did previously. State-of-the-art has advanced.
3 MS. KEZELIS: Director Skinner, you testified
4 that you would be -- that your agency would be
5 inspecting these peakers annually as opposed to
6 tri-annually as would have been the case but for their
7 number. Do you -- you do not inspect peakers today or
8 do you?
9 MR. SKINNER: No.
10 MS. KEZELIS: The old ones we're talking about,
11 you inspect those every three years?
12 MR. SKINNER: Yeah. No, we -- right.
13 MS. KEZELIS: Can you describe for us generally
14 the type of inspection that is undertaken?
15 MR. SKINNER: Sure. And I think I'll let Chris
16 do that, but before I do, when we say we generally
17 inspect every three years, it is a general statement. I
18 mean, there are facilities that we inspect with much
19 more frequently than every three years. We're kind of
20 averaging it out and we're taking a stab at a number.
21 If we believe that there is a problem, we get complaints
22 from the public, from local governments, if they think
23 something is wrong, we're out there right away. And
24 I'll let Chris talk about -- walk you through what an
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1 inspection or -- forgot what an inspection really looks
2 like.
3 MR. ROMAINE: Well, I want to stress what
4 Director Skinner said, that certainly the frequency of
5 inspection does depend on the performance of a facility
6 and if a facility triggers complaints or previous
7 inspections have indicated problems, we will inspect
8 them more frequently.
9 I -- inspecting a peaker plant may, in fact, be
10 a difficult activity given the nature of their
11 operations. By that, I mean it may be difficult to
12 actually get to a peaker plant when it is operating. So
13 that would require specific effort on our part to try to
14 track down a hot summer day when they're operating and
15 have an inspector present.
16 So, I think in a lot of cases, what the
17 investigators will really be looking at is operating
18 records for the facility, the logbooks, the records for
19 a facility, fuel usage and that sort of information to
20 make sure that we are getting accurate information from
21 a report that we are receiving from a facility.
22 If there were complaints, then there would be
23 specific effort made to get to the facility while it was
24 in operation, working it out with a company and having
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1 them notify us when they expect to be operating or,
2 alternatively, to make arrangements to visit the
3 facility when they're doing some of their test
4 operation. Facilities of this type, in addition to
5 actually working to supply power, they certainly have to
6 operate for some small period of time to make sure they
7 are available to operate. You don't want to have an
8 emergency engine, which these really are, that has not
9 been exercised. So that would be another option to
10 coordinate an on-site inspection during the exercising
11 of the engine.
12 MS. KEZELIS: Several of the Agency witnesses
13 had suggested that their department or bureaus resources
14 are being taxed by peakers.
15 Are your resources sufficient to handle the
16 additional load of inspections?
17 MR. SKINNER: I don't know whether you noticed,
18 but I specifically, in my comments, did not talk about
19 how our resources are being taxed.
20 MS. KEZELIS: I noticed that.
21 MR. SKINNER: Because it -- generally, it tends
22 to be counterproductive. It is our job to insure that
23 there is a safe environment and that the state's
24 citizens are being protected and nobody out there wants
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1 to hear that, you know, we can only get to a facility
2 every three years because we don't have enough money no
3 do that.
4 The answer to your question is we're still doing
5 what we need to be doing. It means that our people are
6 working harder to do it than they -- than they might
7 otherwise be and I know we all, as a state, appreciate
8 their efforts in doing that. We would love to have more
9 resources. I haven't run across a state government
10 entity yet that would say it wouldn't love to have more
11 resources.
12 You know, the Illinois' program is an example of
13 something where -- an area where if we had any kind of
14 funding to run those programs, the program would look
15 different than it does today, but I know it is not
16 within your authority to grant us those extra dollars.
17 So, you know, we do what we can with the resources that
18 we have. We think we have an effective noise program.
19 If the general assembly wants us to be expanded in some
20 way and more active with regard to peaker plants, for
21 example, then we'll have to have that discussion with
22 them.
23 MS. KEZELIS: Thank you.
24 MR. FLEMAL: Mr. Romaine, you observed that some
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1 gas turbines may be fueled by fuels other than natural
2 gases.
3 Are any of the peaker turbines that have come to
4 you in applications been non-natural gas proposals?
5 MR. ROMAINE: All the applications have proposed
6 use of natural gas as their primary fuel, but some
7 applications have also included provisions to have fuel
8 oil as a backup fuel.
9 MR. FLEMAL: I gather from statements that were
10 made earlier today that natural gas prices have been
11 quite mobile recently and would lead to the possibility
12 that some of these plants originally intended for
13 natural gas may ultimately use a different fuel should
14 the market allow that or promote it?
15 MR. ROMAINE: That certainly could occur. My
16 understanding is the plants that are going in with fuel
17 oil capacity are really looking at being able to supply
18 the winter peaking market. And certainly during winter
19 period of time, there can be both much higher natural
20 gas prices as well as possible shortage of natural gases
21 used at peaker plants. So I think that's their
22 principle reason for going to fuel oil, but I have to
23 agree that certainly gives the peaker plants more
24 flexibility to operate with oil, when oil becomes less
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1 expensive than natural gas at some point during the
2 summer.
3 MR. FLEMAL: So far, we've heard that all of the
4 peak demand, though, is summer. Is there, in fact, a
5 peak demand that occurs on occasions in winter?
6 MR. ROMAINE: I think I'd have to let the
7 sources answer that question tomorrow.
8 The point that has been made to us is that
9 peaker plants do serve emergency supplies of fuel. So
10 if there is an unexpected outage of a power plant during
11 the winter period of time, there is an event to be able
12 to turn on the peaker plant. So that would be a time
13 where we might call upon a peaker plant some other
14 period of the year than summer.
15 MR. FLEMAL: Assuming we had a non-natural gas
16 peaker plant operating during the summer season for
17 whatever reason, I mean, or other, would we expect any
18 difference in the character of the emissions, any of the
19 environmental problems or conditions associated with
20 peakers that have been addressed today?
21 MR. ROMAINE: The emissions would certainly be
22 higher because --
23 MR. FLEMAL: In all of the pollutants that have
24 been mentioned? Probably?
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1 MR. ROMAINE: In general, yes. Certainly it's
2 more difficult to control nitron ox as compared to oil
3 than it is burning natural gas. Oil has more ash than
4 natural gas. Oil has some fats as our sulfur engine
5 creates sulfur dioxide. It's a more difficult fuel to
6 burn than natural gas, higher emissions. When
7 facilities do have the ability to burn oil, our modeling
8 evaluation do address them as if they were burning that
9 type of fuel, the impacts may be higher but, again, they
10 do not pose a threat to the ambient air quality
11 standards.
12 MR. FLEMAL: Fair, but it's still small? Is
13 that a fair characterization?
14 MR. ROMAINE: Yes, it is.
15 CHAIRMAN MANNING: When the Agency analyzes an
16 air permit for a peaker plant, what consideration or
17 what information do you have regarding the expected
18 hours of operation and how does that fit into either the
19 modeling analysis or the permit analysis?
20 MR. ROMAINE: The information that we have on
21 expected hours of operation is the information given to
22 us by the applicant. So the applicant is basically
23 telling us we'd like to have a permit that allows us to
24 operate for these many hours or we'd like to be able to
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1 burn this much fuel per year. That information on
2 operating hours doesn't enter into short term modeling.
3 The short term modeling assumes that the
4 facility is operating during that particular hour or
5 eight hours a day. Where the operating hours may factor
6 in the modeling is when you're looking at annual air
7 quality standards. So for purposes of annual air
8 quality modeling -- standard modeling, you can factor in
9 the annual emission rates and you -- one approach to
10 that is simply assuming that the facility operates at an
11 average annual emission rate.
12 CHAIRMAN MANNING: Is that the approach that
13 agency generally uses when it deals with that question?
14 MR. ROMAINE: Some facilities have simply
15 assumed that the facility is operating day in, day out,
16 at the short term emission rates. Others have, in fact,
17 used the average emission rates. So both approaches
18 have been used.
19 MR. GIRARD: I have a follow-up question in
20 terms of that.
21 In terms of the annual air modeling, do you look
22 at the cumulative effect of potentially all 46 peaker
23 plants operating at the same time or do you do it
24 individually, you know, permit application by permit
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1 application?
2 MR. KALEEL: I guess in terms of the annual
3 modeling or even short term modeling that I was
4 describing in my testimony, we would actually look at a
5 couple of different levels of analysis. For PSD type
6 projects, where we're only looking at impacts of new
7 sources then the applicant would model their source in
8 addition to any other new sources including in new
9 peakers address the increments. If we're looking at the
10 ambient air quality standards, where it is more of a
11 cumulative impact of all sources, we would include the
12 emissions of the new source and I guess to reiterate one
13 that Chris made, we would do that at maximum operating
14 rates with the worst case fuels. And in conjunction to
15 that, we would add any nearby sources, including nearby
16 peakers, and add on top of that a background
17 concentration that would represent impacts from very
18 distant sources or low level sources, various sources,
19 other types of sources that are too numerous or too
20 small to include in modeling. So it is a cumulative
21 effect. We try to look at the effects of all emission
22 sources both close by and I guess through the background
23 sources that are more distant.
24 MR. GIRARD: But I guess are you looking at all
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1 of the past that can potentially be cited or is it just
2 the ones that have been -- are operating up to that
3 point in time while you're reviewing a particular
4 application for a peaker in one area?
5 MR. KALEEL: We would provide the inventories
6 for all of the plants that would be expected to impact
7 the impact area of the peakers we're aware of through
8 prior permit application, even if it hasn't been
9 permitted yet, we would include that information to the
10 modeling organization, consultant or who ever to include
11 in their modeling. So it is -- as we find out about it,
12 we are continually updating the inventory we provide to
13 the consultants so all of them are included in and at
14 least those that we know of at the time that were first
15 approached by a company.
16 MR. GIRARD: Thank you.
17 MR. RAO: May I follow up?
18 SPEAKER: Go ahead, Anad, and then I have a
19 follow up.
20 MR. RAO: Thank you.
21 Mr. Kaleel, in the -- this portion of modeling
22 that you do to evaluate for PSD increment, in that case,
23 do you just consider only the proposed -- emissions from
24 the proposed plant only?
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1 MR. KALEEL: We would typically include from the
2 proposed plant and any other proposed plants and any
3 other sources that have been permitted that trigger PSD
4 and that --
5 MR. RAO: But when you have modeling -- when you
6 are modeling the impact on the local area?
7 MR. KALEEL: Yes. When we're -- we're trying to
8 evaluate whether or not increments, PSD increments have
9 been consumed or that the increment thresholds have been
10 exceeded, we're required through the PSD program to
11 address all PSD sources, that is, all source, that have
12 been permitted since the baseline date has been
13 triggered. Baseline dates vary from area to area and
14 pollutant to pollutant, but we include all sources of
15 increment. We provide that to the consultants when they
16 do their modeling.
17 MR. RAO: So any impact of clustering of these
18 peaker plants in a particular area is considered in your
19 evaluation?
20 MR. KALEEL: Yes.
21 MR. RAO: Thank you.
22 MS. KEZELIS: Mr. Kaleel, the figures that you
23 discussed with us, Figures 1 through 4, the significant
24 area -- impact areas for NOx, carbon monoxide and so on,
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1 was the modeling performed by the peaker plant or was
2 this performed by the Agency?
3 MR. KALEEL: The modeling is performed by the
4 applicants and we wouldn't serve in advance of this
5 little -- or modeling to provide guidance as to what it
6 is we're looking for, what kind of models, what kind of
7 procedures they should use, what kind of inventories
8 they should apply to the modeling.
9 Once they've submitted the application, we do a
10 thorough review to make sure that they follow what we
11 told them to do and we would also perform an audit where
12 we would -- without letting them know exactly which one
13 we're going to do, we try to redo one of their runs and
14 make sure that we agree with the results that they have.
15 MS. KEZELIS: So for clarification, Figures 1
16 through 4 were peaker applicant prepared or Agency
17 prepared?
18 MR. KALEEL: Actually, my staff had prepared
19 those maps, but we used model results provided by an
20 applicant.
21 MS. KEZELIS: By the applicant. Okay.
22 The significant impact areas for NOx, for
23 example, that is reflected in Figure 1, is that at the
24 emission point of the smoke stack or is that at ground
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1 level? Where is that?
2 MR. KALEEL: The ambient concentrations that are
3 depicted in all of those figures represent ground level
4 impacts. The modeling, of course, takes into account
5 the height of release of each emission point. So if a
6 source has a 100-foot stack or a 30-meter stack, that is
7 the common form of modeling.
8 MS. KEZELIS: And modeling also takes into
9 account if, for example, the largest applicant at this
10 time is -- is it 16 turbines, is that correct? I think
11 that is what somebody testified to. So there is 16
12 smoke stacks. So it would be the cumulative of that or
13 16 operating simultaneously, if that were the source of
14 this particular modelling?
15 MR. KALEEL: I guess I would refer to Chris. My
16 -- guess I my understanding is that it would typically
17 involve their emissions to fuel stacks. But there could
18 be -- depending how many were operating, there could be
19 multiple units vented to one or more stacks. If there
20 are multiple stacks, we would model the stacks, but --
21 MS. KEZELIS: For clarification, is there -- is
22 there more than one turbine per stack?
23 MR. ROMAINE: The usual configuration is one
24 stack per turbine. The particular application with the
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1 16 units, though, is not a usual application. It is, in
2 fact, proposed to combine turbines to go to a control
3 device that go through -- I don't know, a limited -- a
4 fewer number of stacks.
5 This is one of the peaker applications that
6 would, in fact, be large enough to be subject to PSD.
7 When we started our BACT evaluation, the conclusion was
8 that they had not proposed that with technology. It
9 appears as those turbines may, in fact, be amenable to
10 their size on one hand and high emission rates that has
11 been proposed on the other to use of that on control.
12 Sources then proposed to put an add on control once
13 flexibility is either installed, simple cycle turbine or
14 combined cycle turbine, it hasn't made up its mind yet.
15 It's a very curious application that we're doing.
16 CHAIRMAN MANNING: Could you explain what type
17 of information you expect to get within the BACT
18 demonstration?
19 I mean, just typically, just for purposes of the
20 record, could you sort of go through what a typical BACT
21 demonstration might entail, what kind of information the
22 applicant is going to have to provide?
23 MR. ROMAINE: Well, one piece of information for
24 the record is that we do require people to follow the
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1 United States Environmental Protection Agency's
2 guidelines for PSD applications. That includes going
3 through the so-called top-down BACT methodology that
4 U.S. Environmental Protection Agency has developed.
5 The first step in that evaluation is to go
6 through an evaluation of the types of control techniques
7 that could theoretically apply to a particular unit.
8 This is sort of an across-the-board technology
9 evaluation.
10 The next step is to determine whether some of
11 those techniques are, in fact, technologically
12 infeasible. If they are, then they don't have to be
13 pursued.
14 The next step then is to evaluate the
15 effectiveness of the techniques that are feasible. And
16 If the applicant is proceeding with the most effective
17 technique, then the application doesn't to be pursued or
18 the demonstration doesn't have to be pursued. That's
19 the end of it.
20 If on the other hand, the applicant is proposing
21 something less effective than the most effective
22 technique, then they have to go through and do a cost
23 evaluation or design study to decide how costly that
24 technique would be, how effective it would be, if, in
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1 fact, it were applied to the facility. They also have
2 to go through an evaluation or a search of the US
3 Environmental Protection Agency's records of other
4 states, back through their clearing house, to determine
5 what has been complied at other facilities that are
6 subject to BACT requirements.
7 Based on that information, we have to make a
8 judgment as whether something less than the technology
9 that has been applied somewhere else would be acceptable
10 as BACT or not. Obviously, if we have gone to the top,
11 that is fine, we wouldn't pursue it, but given the fact
12 that there are what I would call special projects in
13 places like California where they have applied SCR to
14 simple cycle turbines, we have to go through the full
15 evaluation to evaluate whether or not, in fact, as
16 applied to the proposal in Illinois, whether that would
17 be appropriate or not.
18 So far, those detailed evaluations of SCR,
19 controlled technology that could applied to the turbine,
20 have been concluded that is not appropriate to apply
21 them on projects in Illinois. And part of the reason
22 for that, again, is going back to the list, what
23 determinations have been made for projects and in
24 examining them, you find out that places like Texas, the
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1 Midwest and other areas outside of California, control
2 devices are not routinely being used for simple cycle
3 turbines. In that circumstance, we don't think it is
4 appropriate to use what might be done in California
5 given their circumstances as an appropriate level of
6 control with Illinois.
7 MS. KEZELIS: Mr. Kaleel, Exhibits 13 through
8 17, which address ozone concentrations, can you
9 generally describe for me the metrological conditions
10 that existed during this July 16th through 20th, 1991,
11 period? Only for purpose of my own understanding
12 whether that was anomalistic set of meteorological
13 conditions creating a high ozone level in the Illinois
14 region or whether it was typical of summer months in the
15 Midwest?
16 MR. KALEEL: Sure. I'd be happy to.
17 What the various annals on each of those blocks
18 represent are peak ozone concentrations predicted by the
19 model for individual days. Obviously, for a multi-day
20 period or multi-day episode, meteorological conditions
21 changed slightly, but we got a lot of familiarity
22 through the years as to the types of meteorological
23 conditions that cause high ozone in the Lake Michigan
24 area.
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1 Typically, we're looking at the kinds of
2 conditions that will occur in the mid summertime period,
3 kind of on the back slide of a high pressure system,
4 basically high pressure systems centered over Ohio or
5 some point east of Chicago, under those kinds of
6 conditions, where we're looking at light wind speeds,
7 clear skies, hot, humid conditions. Typically, the wind
8 directions vary a little bit through the duration of the
9 episode as the high pressure system migrates to the
10 east. Typically, early in the episode, perhaps on July
11 16, July 17, winds would be in Chicago basically
12 southeasterly or easterly. As the high pressure system
13 migrates, winds turn and become more and more southerly.
14 By the end of the episode, July 19th and 20th, we're
15 looking at southerly and southwesterly winds in Chicago.
16 The July '91 period was -- I don't know whether I want
17 to characterize it as typical, but it was probably above
18 average as far as ozone severity or ozone conduciveness.
19 Certainly, it's not the most extreme measurement that
20 we've seen over the last ten years, but certainly above
21 average. It is a good episode for ozone planning.
22 MS. KEZELIS: Thank you.
23 MR. KALEEL: Again, I should mention when I say
24 hot, we're looking at conditions above 90 degrees, those
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1 kinds of things.
2 CHAIRMAN MANNING: Mr. Romaine, you discussed
3 California. In your prepared testimony, you have a list
4 of other states and controlled -- different kinds of
5 issues that they've been dealing with the peaker plants
6 in their states.
7 Do you care to comment on any of the states that
8 you have listed in your attachment to sort of compare
9 them to the strategies Illinois -- you may suggest
10 Illinois may or may not want to consider, what -- what
11 they're doing and why those states are doing what
12 they're doing?
13 MR. ROMAINE: Simply stated, there are other
14 states that do have BACT programs that apply at lower
15 thresholds. Simply, as part of the history of the
16 development of their state programs, they have decided
17 that it's an appropriate practice in their state to have
18 best available control technology at some lower
19 threshold. For example, I believe Indiana has a
20 threshold of 25 tons per year for new source. Beyond
21 that, I guess the information speaks for itself.
22 MR. SKINNER: Just to supplement that somewhat,
23 it's difficult to define, as we sit here in Illinois
24 today, the exact reasons that other states here adopted
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1 whatever measures they've adopted; some more strict,
2 some less strict than Illinois has.
3 There may be legislative policy reasons, things
4 as simple as, you know, a state wanted to encourage the
5 use of coal as opposed to the use of natural gas so they
6 imposed stricter standards than otherwise might be the
7 case in natural gas facilities. I say that only to
8 caution you that it's almost impossible to define
9 intention in what we do on a day-to-day basis.
10 And it will probably be somewhat difficult
11 without substantial research and one-on-one
12 conversations for the Board to determine the same thing.
13 That is not to say that the Board shouldn't look at what
14 other states have done and determine whether or not
15 something stricter is appropriate for Illinois.
16 CHAIRMAN MANNING: I understand that. And I was
17 just responding to one of the specific questions the
18 Governor asked us to consider as to what other states
19 are doing and to the extent to which the Agency wanted
20 to offer any information, we'd welcome that and we thank
21 you for the appendix that you've attached to the
22 testimony.
23 MR. ROMAINE: I guess just one point to follow
24 up, those are states that have statewide BACT
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1 departments for all projects. These are not statewide
2 BACT requirements. They're simply focusing on peakers.
3 CHAIRMAN MANNING: Okay.
4 MR. ROMAINE: And that ties in with the
5 director's statement that these reflect historical
6 development and policy in their states.
7 MS. MCFAWN: You mentioned that New York takes
8 about 18 months to get a permit. Well, actually get
9 settled. How long does it take to get through the
10 permit process -- the air permit process -- on average,
11 if you can tell us?
12 MR. SKINNER: Well, by law, it's 180 days. Now,
13 there are instances where we get a permit out more
14 quickly than that. There are instances where we go back
15 and request further information and get an extension.
16 And there are instances where the applicant will
17 withdraw the application and it's happened quite a bit
18 and in order to modify it as a result of some more
19 recent developments.
20 In terms of an average time that we process a
21 permit, they vary so much from permit to permit because
22 of the complexity or simplicity of the type of operation
23 they're proposing, but, you know, it's somewhere in the
24 neighborhood of 120 days probably, isn't it?
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1 MR. ROMAINE: Right.
2 MR. SKINNER: Probably more.
3 MR. ROMAINE: More.
4 MR. SKINNER: Yes.
5 MS. MCFAWN: That's what I would have expected.
6 MR. ROMAINE: I think, in fact, if that's
7 something you would like information on, we just provide
8 it project by project in written form.
9 MS. MCFAWN: If you wouldn't mind, it would just
10 give us a good sense of, you know, are we expeditious?
11 Are we frugal? Or, you know, how are we behaving?
12 MR. SKINNER: Well, I think one of the things
13 that we have made a decision to do internally is not to
14 rush through with regard to peaker permit applications
15 and to do a very careful analysis of each one that comes
16 in and oftentimes, if not usually, that means that we're
17 bumping up against the 180-day limit by the time we get
18 the permit out.
19 But given how rapidly changing this situation is
20 right now, we just felt that was appropriate. If -- we
21 often get requests from applicants to move more quickly
22 and they give us all sorts of compelling reasons to do
23 that.
24 If it's a project where it is very simple and
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1 very clear, and we have seen ten of them before, maybe
2 we can get it out for them in 180 days, but we're taking
3 a fair amount of time to do this.
4 MS. MCFAWN: Thank you.
5 MR. SKINNER: I might just supplement that
6 answer a little bit on an issue that is related, but not
7 exactly the same, and that is there have been calls from
8 various folks for the Agency and/or the Governor to
9 impose a moratorium on issuance of peaker permits.
10 We've looked at that issue extensively and concluded
11 that we don't have the authority to do that.
12 By operation of law, these permits issue after
13 180 days. So, we've had it suggested to us, well, just
14 don't act on it. That doesn't do any good. I mean, if
15 we don't act on it, the permit is granted. That
16 actually is counterproductive compared to what we want
17 to do. So we're forced to proceed. Similarly, the
18 Governor has concluded that he doesn't have the legal
19 authority to impose a moratorium by executive order. It
20 literally requires legislative action.
21 HEARING OFFICER JACKSON: Do we have any other
22 questions at this time for our Agency panel?
23 MS. MCFAWN: Well, I had some more questions
24 about the noise area, if we can return to that, Mr. Zak.
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1 MR. ZAK: Yes.
2 MS. MCFAWN: I'm curious as to how these peaker
3 plants fit into our existing noise regulation. You
4 stated in your testimony that we don't have any gaps in
5 our regulations. So are you saying there then that the
6 existing noise regulations would apply to peaker plants
7 could be used to enforce adequately noise control?
8 MR. SKINNER: Before I pass the microphone to
9 Mr. Zak and let him answer that question, obviously
10 noise is an issue that seems to be of great interest to
11 the Board. I would only reiterate something that Greg
12 said earlier, which is we have -- I don't know,
13 somewhere more than five of these facilities operating
14 currently. I don't have the exact number in front of
15 me. We have not received a single noise complaint from
16 any of these -- from any residents nearby the facilities
17 up to this point. So -- and I feel comfortable saying
18 that if noise were a big issue for any of those folks,
19 they'd be making their own noise about it because
20 they're very sensitive to it.
21 I think to some extent the applicants, when they
22 propose these projects, are well aware that noise is an
23 issue or going to be an issue for their operation. And
24 I think they are taking measures, if you want to call it
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1 on their own, I guess voluntarily, I guess you could,
2 but it's compulsory almost for an applicant, a
3 developer, at this point to do that. So, I don't want
4 to at all inhibit the line of questioning, but to me,
5 it's probably not the biggest issue that we face with
6 regard to peakers. That's something that a lot of times
7 is going to be worked out between the developer and the
8 local municipalities as opposed to us at the state
9 level. Having filibustered for awhile, I'll pass the
10 mic to Greg.
11 MR. ZAK: I'm sorry. But can you kind of repeat
12 the question? I lost my train of thought there.
13 MS. MCFAWN: Certainly.
14 I'm curious, you state in your testimony that
15 you reference our existing noise regulations, three
16 sections exactly, and then you say there is no gap in
17 the regulation. And I just want to make sure that those
18 regulations are adequate, that if there is a noise
19 problem, you feel that they would be applicable and
20 would be sufficient for enforcement purposes and health
21 purposes and that type of thing.
22 MR. ZAK: Yes, they would be. I can fairly
23 competently say that, the -- if we look at all of the
24 various types of noise emissions we can have associated
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1 with a peaker system, the current regulations that we
2 have will address all of those issues and in addition,
3 if we have something a little unusual happen, let's just
4 say that we had some infrasonic sound that is associated
5 with a peaker, and just throwing this out as a
6 possibility, not that we've ever had this problem yet,
7 but in infrasonics, what they will do is it will appear
8 as vibration to most people and people will think that
9 their house is vibrating, the ground is a vibrating and
10 in effect, what it is is an air wave that is being
11 generated by the -- let's say the Agency example, the
12 peaker, that can be addressed through the Board's
13 nuisance noise regulation even though the numeric
14 regulations only go down to, say, really 31 and a half
15 hertz, which is a low frequency end of a regulations,
16 infrasonics typically occur below 20 hertz. We can
17 still measure something, say, between 10 and 20 hertz,
18 and make a good nuisance case before the Board, if there
19 was a problem where we had significant a number of
20 residences that were experiencing this type of problem
21 from a peaker facility.
22 So, yes, I think to answer your question that
23 the current regulations that we have will address, I
24 think, virtually any noise issue that would happen to
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1 come forward from a peaker facility.
2 MS. MCFAWN: Thank you.
3 MS. MANNING: Director Skinner, you said that
4 noise wasn't one of our biggest issues. Do you care to
5 comment on what you feel are the biggest issues in terms
6 of what we're doing today with the peaker power plant?
7 MR. SKINNER: No.
8 CHAIRMAN MANNING: Well, I'll ask a follow-up.
9 MR. SKINNER: I sat here and jotting down notes
10 in terms of the very brief summary for conclusion,
11 conclusion notes, if I was going to make conclusionary
12 remarks, but maybe I'll give you that part of it now.
13 It strikes me that the General Assembly made a
14 decision a couple of years ago with regard to the
15 question of electric supply and whether or not we needed
16 more electric supply. I mean, they made the decision to
17 deregulate the electric industry in Illinois. Implicit
18 in that is taking off of the ICC's docket the question
19 of whether or not we ought to be building more electric
20 power plants and whether -- implicit in that question is
21 whether the power is going somewhere within the state or
22 outside of the state.
23 Now, that may be a question that the General
24 Assembly ought to readdress. I don't know whether there
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1 were unforeseen ramifications or consequences to
2 deregulation or not. There -- peaker plants may have
3 been an unforeseen development, if you will, of the
4 deregulation process, but it's certainly not within our
5 Agency's authority to consider that question. I'll
6 leave it to you to determine whether or not it is within
7 your authority to consider that question.
8 The Agency -- I mean, we're peaker neutral, if
9 you will. We're neither for nor against the development
10 of these facilities.
11 Our foremost concern is when presented with a
12 proposal to determine whether or not it's -- the proper
13 controls are being applied and whether they are
14 adequately protective of the environment and of human
15 health. We've devoted a lot of resources to trying to
16 make sure that that is the case.
17 My own opinion is that if gaps exists right now,
18 they largely exist on the sitings or local control side
19 of this issue. Property values, noise, esthetics, those
20 are to a large extent the complaints that were we're
21 hearing that ring truer, if you will, than some of the
22 complaints about emissions.
23 The fact of the matter is whether we like it or
24 not and whether the opponents of peaker plants like it
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1 or not, these facilities are cleaner in terms of their
2 power production than our coal-fired facilities.
3 So, I think when pressed, some of the
4 environmental groups would say that given a choice,
5 assuming the demand is going to be what it is, or
6 increase, and assuming that power to meet that demand is
7 going to come from some place, either a coal-fired plant
8 or a peaker plant, my guess is that even some of the
9 environmentalists would say, well, given that choice, we
10 prefer peakers over increased coal production.
11 But be that as it may, I guess I would -- in
12 answer -- in direct answer to your question finally, I
13 have would say that the siting aspects of this deserves
14 some scrutiny. I don't know whether I really believe
15 that the full blown SP172 requirements ought to be
16 applied in the peaker context, but I can see an
17 argument, I can make an argument that some sub set of
18 those ought to be applied, if only the subset that
19 prescribes certain procedures with regard to
20 consideration of these applications because those
21 procedures provide resources to the local hearing panel
22 that allow them to deal with some of these issues, to
23 hire the lawyers and the consultants that they might
24 find necessary to address the concerns that are being
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1 raised by the constituents.
2 The other question that I think you've been
3 asked to consider it and it's fully appropriate, is
4 whether BACT or some additional controls ought to be
5 imposed upon these peaker plants.
6 Now, I think we've answered the question to the
7 best of our ability as to whether these facilities are
8 being permitted in a way that meets the National Ambient
9 Air Quality Standards and protects human health and the
10 environment. In terms of those standards, we believe
11 that, in fact, we're permitting these facilities the
12 right way. We're imposing the right level of controls
13 on them to meet those standards.
14 You're really being asked to go beyond that and
15 say that is a given, should we impose controls beyond
16 that, for whatever reason, in order to be more
17 protective of health and the environment. Again, that
18 is a question that is really outside, I think, the
19 purview of the Agency. When you get to that level of
20 question, it becomes a cost benefit analysis as to are
21 you going to -- is the added cost so significant that
22 you're going to discourage these power plants from
23 coming in? Is that a good thing or a bad thing? That
24 is something that I have no desire to get into nor any
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1 real expertise. The whole power side and supply side
2 and demand side of the issue is frankly beyond me.
3 CHAIRMAN MANNING: Thank you.
4 I would just like to thank all of you from the
5 Environmental Protection Agency for all of the work you
6 did in the presentation, obviously straining your
7 resources, in terms of obviously you've spent a lot of
8 time and a lot of work advising us and, you know, for
9 purposes of the public that are present here today, the
10 Agency staff would continue to be present throughout the
11 rest of the hearings for us if questions come up that
12 need to be answered. Certainly, the last set of
13 hearings on October 5th and 6th, we will regroup and if
14 there are other questions that we need answered or
15 asked, we'll go ahead and do that.
16 MR. SKINNER: We'll have some subset of the
17 folks that are here today at the subsequent hearings.
18 To the extent that you can anticipate that you're going
19 to want certain areas of expertise represented, I guess,
20 you can let us know ahead of time. We're glad to
21 accommodate that. To the extent that you want me there
22 at these -- any of these particular hearings, I would
23 discourage you, but I would -- but I would be willing.
24 CHAIRMAN MANNING: I'll bet you'll work that
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1 out.
2 MR. SKINNER: Yeah. I would be willing to
3 accommodate you in any event.
4 HEARING OFFICER JACKSON: I get all the fun.
5 Okay. Before we conclude, I just want to make a
6 couple of final remarks on the record.
7 Right. We do still have some written questions
8 that we'll be submitting to the Agency and we'll get
9 those to you as soon as possible.
10 MR. SKINNER: Sure.
11 HEARING OFFICER JACKSON: I'm just told that
12 we'll also be posting those written questions on the
13 website, for anyone here who would like to take a look
14 at those additional questions that we will be posing to
15 the Agency. They will be on the website as soon as they
16 are available.
17 Okay. I also want to note Director Skinner
18 mentioned that we seem to be asking a lot of noise
19 questions. I just want to point out for everyone that
20 the Board members may ask a variety of questions at
21 these hearings, that they're not intending to focus the
22 scope of the hearings on any particular issue. They're
23 just simply trying to develop a complete and concise
24 record. So please don't assume anything other than the
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1 development of a complete record by any of the questions
2 that are asked by any of the Board members during
3 today's proceeding or any other proceedings of this
4 matter.
5 We still have a lot of information to gather
6 before we're completed with these proceedings and the
7 Board will not begin its deliberation until all the
8 information is submitted and the record is closed.
9 Okay. I would mention again that we have
10 requested expedited transcript. As soon as that is
11 available, we will be posting that on our website. If
12 you require hard copies of the transcript, please
13 contact the Board's clerk's office and hard copies can
14 be obtained at a cost of 75 cents a page.
15 The next hearing in this matter will begin
16 tomorrow, August 24th at 10:30 a.m. We'll be in the
17 same room and the procedures for tomorrow's hearing will
18 be very much like today's. Tomorrow, we'll be focusing
19 on presentations by members of the peaker industry and
20 we'll again be focusing on questions from the Board
21 members and the Board's technical unit. If any member
22 of the public here today has questions prepared by
23 today's presentation, please feel free to submit those
24 questions to the Board in the form of a written comment.
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1 That's all I have.
2 Thank you all for attending. We appreciate your
3 patience and your attention and we're adjourned for
4 today. See you tomorrow.
5 (Whereupon, the proceedings in the above-entitled cause
6 were adjourned scheduled to reconvene on August 24,
7 2000, at 10:30 a.m.)
8 (OFFICIAL copies of this transcript can also be ordered
9 directly from the reporter for 75 cents a copy by
10 calling (800)419-3376.)
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1 STATE OF ILLINOIS )
)SS:
2 COUNTY OF DU PAGE )
3 I, ROSEMARIE LA MANTIA, being first duly sworn,
4 on oath says that she is a court reporter doing business
5 in the City of Chicago; that she reported in shorthand
6 the proceedings given at the taking of said hearing, and
7 that the foregoing is a true and correct transcript of
8 her shorthand notes so taken as aforesaid, and contains
9 all the proceedings given at said hearing.
10
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12 ROSEMARIE LA MANTIA, CSR
License No. 84 - 2661
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14 Subscribed and sworn to before me
this day of , 2000.
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16 Notary Public
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