ILLINOIS POLLUTION CONTROL BOARD
April
6,
1989
FEDDERS
—
USA,
)
)
Petitioner,
v.
)
PCB
86—47
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
Respondent.
MR. DANIEL
F. O’CONNELL,
GARDNER, CARTON & DOUGLAS, APPEARED FOR
PETITIONER;
MR. WILLIAM D.
INGERSOLL,
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
APPEARED FOR RESPONDENT.
OPINION AND ORDER OF THE BOARD
(by J.D.
Dumelle):
This matter comes before
the Board upon
a petition
originally filed on April
1,
1986,
by Fedders—USA (“Fedders”)
“to
extend and modify the variance which the Board granted
in PCB 83—
47” on January
9,
1986.
(Third Amended
Pet.
p.
1.)
On May 13,
1987,
the Illinois Environmental Protection Agency (“Agency”)
filed
its final recommendation.
Public hearing was held on
January 20,
1989
in Effingham,
Illinois.
The Board today grants
Fedders variance from 35
Ill. Mm.
Code 215.204(h)
until
September
30,
1989,
subject
to certain conditions.
BACKGROUND
Fedders operates
a plant
in Effingham,
Illinois at which
it
paints the outside sheet metal parts
of air conditioning units
in
one of
two flowcoaters.
Both flowcoaters are regulated under
35
Ill. Mm.
Code 215.204(h) which limits the volatile organic
material
(VOM)
content of the paint mixture
to 2.8 lbs. per
gallon.
Fedders has been unable
to
find
a paint mixture which
can comply with this
limitation and at the same time produce an
acceptable product
in
the flowcoater.
On January
9,
1986
the Board granted
Fedders,
in PCB 83—47,
a variance from 35
Iii.
Adm.
Code 215.204(h)
from October
1,
1982
to April
1,
1986.
Therein,
the Board
found
that Fedders had been
diligent
in seeking
a compliance coating
and that immediate
compliance requiring
the
installation of
a
new
paint
system
would be
financially unattainable at that
time.
Further,
the
Board
found
that,
as the environmental impact of Fedders’
emissions would be minimal, denying the variance request would
98—15
—2—
impose an arbitrary and unreasonable hardship on Fedders.
See
Fedders—USA v.
Illinois Environmental Protection Agency,
PCB 83—
47, January
9,
1986.
On the expiration date of that variance, April
1,
1986,
Fedders filed
a petition
to extend
the variance from 35
Ill.
Adm.
Code 215.204(h).
In this variance request,
Fedders requests
variance
until September 30,
1989
to allow time to design,
fabricate,
and install
an Electrocoat
or
E—coat paint system
which will bring Fedders into compliance.
Fedders states that
once the E—coat system
is on line,
it will no longer use the
flowcoaters.
(Third Amend.
Pet.
p.
8.)
COMPLIANCE EFFORTS
During the prior variance proceeding
the Agency and Fedders
disagreed on the emission levels
at that time.
Fedders
maintained
that
its emission level was
5.2 lbs.
VOM per gallon,
based on the mixture
of
four
parts paint
to one part SC100
thinner
in
the paint mixture
as
it
is delivered
to the flowcoater
nozzles.
The Agency,
using
a mass balanced approach,
contended
that Fedders used 6.48
lbs. VOM per gallon,
based
on
the
total
amount of thinner and paint
that
Fedders purchased
for use
in the
flowcoater.
In its Prior Variance Order, the Board
found
that
it
would be
arbitrary and unreasonable for Fedders
to have
to
install
a new paint line at its plant and, therefore,
allowed
Fedders
to continue what the Board apparently believed were
Fedders’
then current emissions of 6.48
lbs. per gallon.
This
figure was taken
from the Agency’s variance recommendation.
Both
the Agency and Fedders’
calculations were based on data contained
in Fedders’ previous ACS permit applications.
These
applications,
in turn, took their
data
from thinner and paint
purchase
figures
for the
first six months of
1984.
Fedders states that,
unfortunately, reliance on these
purchase
figures has turned out
to be
an inaccurate method of
determining
Fedders’ actual paint and
thinner usage.
After
filing the First
Amended Variance Petition in this proceeding,
Fedders became aware
that the figures used by both the Agency and
Fedders were unreliable because Fedders’ thinner
and paint
purchase
records do not accurately reflect
the paint
and thinner
actually used
in the painting system.
Fedders discovered
substantial discrepancies between
the amounts
of materials which
Fedders’
figures show were ordered by Fedders,
the amounts that
the suppliers have told Fedders were shipped, and the amount
that
Fedders’
receiving records
show were actually received.
Rather
than relying
on these
records, Fedders has instead based
the
figures contained
in this
petition on Fedders’
production records
which
show
the
actual
amounts of
thinnet
and
paint
added
to
the
system.
.
8—16
—3—
In addition, after
filing its amended petition
in this
proceeding,
Fedders became concerned that the figures
used
in its
previous ACS permits were inconsistent with the actual paint and
thinner usage figures.
As a result, Fedders reviewed
its paint
and
thinner usage records for the entire period involved,
October, 1982 through the present.
These records indicate that
the painting process was fairly stable during
the period of time
used as a basis
for the ACS permit applications and,
thus,
for
the pleadings and testimony in the prior variance proceeding.
However, before and after
that period,
Fedders’ operational
personnel experienced
significant production difficulties with
the paint system.
In addition,
several different reformulations
of the paint itself were made
as
well as different formulations
of th paint with different thinners and other additives.
All of
these factors contributed
to
a greater variability
in
the amount
of VOM per gallon than was apparent from the data used
as the
basis
for the prior proceedings.
Before Fedders decided
to use the E—coat system,
Fedders
explored the use of other
new paint systems.
According
to
Fedders, however, none proved feasible.
(Third Amend.
Pet.
p.
20.)
Fedders also consulted with
a paint manufacturer
to reduce
the solvent ratio
in its paint mixture.
Fedders believed that by
using
the proper mixture
and by modifying
the delivery system to
the paint nozzles
it would
be able
to increase viscosity of the
paint mixture
up to
32 seconds and reduce the solvent ratio back
down
to
the levels used
in the
first six months of
1989.
Also,
Fedders began
a system
of weekly reports from its production
personnel
to management regarding the status
of the paint system
and the solvent usage
so that management could monitor
and
attempt
to maintain the lowest solvent ratio achievable.
Fedders
states that it will continue this system until
the E—coat system
comes on line and use of the flowcoater system
is discontinued.
(Third Amend.
Pet.
p.
22).
Although Fedders had, at one point, decided
to relocate
the
facility because of its inability
to achieve compliance,
in May
of 1988 Fedders entered
into
an arrangement with the Illinois
Department of Commerce and Community Affairs
(DCCA)
to obtain
financing
to continue
to operate
the facility in Illinois.
Id.
Fedders was given
a package
with approximately $9.6 million
including
funds
for building and equipment renovation and
the
establishment of an enterprise
zone.
Fedders plans
to start
up the E—coat system by June
2,
1989.
At that time,
Fedders will
shut down the main
flowcoater.
However, the flowcoater will
be available
for
standby
use.
Fedder’s hopes
it will not be needed.
(Third Amend.
Pet.
p.
24.)
From June
2,
1989
to August
1,
1989
production
will
be run on the E—coat system.
However, the assembly line
conveyors will not be connected.
Therefore,
the product will
be
hand transferred between
the E—coat conveyer and
the production
98—17
line conveyors until
the August plant
shut down.
At that time,
the conveyor systems will be connected.
The E—coat system will
run
at full production from startup on September
1,
1989.
On
September
30,
1989,
the E—coat system will be released for full
production
and
the main flowcoater will
no longer be needed.
Third Amend.
Pet.
p.
24
ENVIRONMENTAL IMPACT
Effingham County and
the surrounding counties are designated
attainment
for ozone.
Fedders states that there has never been
a
recorded excursion of the ambient air quality standard for ozone
at the Effingham monitor.
Fedders maintains that
its past
emissions under
the prior variance had
no adverse
impact on the
attainment
or maintenance of the ambient air quality standard
for
ozone.
Further, Fedders asserts that the estimated emissions
under
the
terms of the variance
it
is requesting
will
not have
an
adverse impact on the ambient
air quality standard
for ozone
in
Effingham County.
Finally, Fedders states that “no identifiable
environmental impact would
occur
if this variance were
granted.”
(Third Amend.
Pet.
p.
28.)
The Agency does not
contest any of
these statements.
Therefore,
the Board finds that
the environmental impact of granting Fedders variance would be
minimal.
VARIANCE EXTENSION
Although Fedders’ petition requests the Board to extend and
modify the prior variance,
the Board finds nothing
in
the record
specifically addressing
a showing of satisfactory progress, which
is required by Section
36(b)
of the Environmental Protection Act
(“Act”).
Before the
Board
can grant
an extension of variance,
satisfactory progress must be shown.
In
this
case,
however,
the
Board
is
able
to
determine
from
the evidence
in the
record that
satisfactory progress has been shown.
Although Fedders was
unable
to comply with the provisions of its prior variance,
as
discussed above, the Board
finds Fedders’ explanation
not
unreasonable.
Under
the circumstances presented herein,
the
Board believes that Fedders’
compliance efforts during its prior
variance, also described above,
resulted
in satisfactory
progress.
Thus,
the variance extension can be granted consistent
with Section
36(b)
of the Act.
HARDSHIP
Fedders argues that compliance with
35 Ill. Mm.
Code
215.204(h)
would
impose an arbitrary and unreasonable hardship on
its operation.
As Fedders was unable
to
find
a water—based
coating
for
uue
in
its
flowcoater
which
would
satisfy
the
I imit:s
of
Section 215.204(h), use
of compliance coatings is argued
to be
not technically
feasible.
Further, Fedders argues
in light of
the minimal
impact on the environment and of Fedders’
economic
98—18
—5—
situation, add—on pollution control devices were not economically
reasonable.
However, once Fedders was able
to obtain
financing,
Fedders committed itself to installing
a new paint system in
order
to comply.
The remainder of the variance period is
to
allow time in which to implement that system.
The Agency does
not dispute Fedders’
position.
In fact, because the Agency
recommends
a grant of the variance, the Board believes the Agency
concurs
in
a finding of arbitrary or unreasonable hardship
in
this case.
Regarding
the grant of variance retroactively, Fedders gave
no explanation
for its request.
The Board
is reluctantly
granting Fedder’s request solely because
of unusual
circumstances
in this case, particularly related
to the long time this
variance,
as well
as the prior variance was allowed
to remain
pending.
Leaving both variance petitions
in limbo
for the length
of time that occurred here
is unacceptable; the
Board emphasizes
that
it will not
in the future agree
to back—date variances
unless
the variance
is timely filed
(i.e.
120 days prior
to the
termination of the prior variance,
absent unusual circumstances
and absent good reasons
for subsequent delay
in the proceeding).
CONCLIJSION
The Board
finds that compliance with Section 215.204(h)
would impose
an arbitrary or
unreasonable hardship on Fedders.
Thus, variance will
be granted.
However, certain conditions are
imposed upon this grant of variance.
In its Third Amended
Petition, Fedders sets forth suggested
conditions.
With one
slight modification
suggested at hearing,
the Agency recommends
grant subject
to the conditions requested by Fedders.
The
Agency’s suggestion
is that
the first of the reports required by
Condition No.
3 in the Order be submitted
by June 15,
1989 rather
than
January
11,
1989.
The
Board
has
incorporated
this
suggestion
into
the Order.
The
Board
concurs
with
the
requested
Order
except
for
three
provisions.
First,
the suggested Order grants variance through
June
2,
1989.
The Board notes that
suggestion No.
3
in
the Third
Amended Petition
(No.
2
in the Order,
see below),
requires full
compliance by September
30,
1989.
Moreover,
the compliance
schedule sets out September
30,
1989 as the date
of
full
compliance.
Thus,
rather than granting variance until June
2,
the Board grants variance
to September
30,
1989,
which appears to
be the accurate date of compliance.
Second,
in
the recommended
Condition No.
1,
Fedders would be
limited
to emissions of
6.75 lbs VOM per gallon,
provided:
that
Fedders
may
exceed
this
limitation
during
periods of upset when the condition or make—up
of
the
paint
from
its
supplier
makes
it
98—19
—6—
infeasible
for
Fedders
to
produce
an
acceptable
product
and
still
limit
its
emissions to 6.75 lbs. per gallon.
Third
Amend.
Pet.
p.
28.
The Board
finds this exception to
the condition too vague;
it
fails
to explain when
a period of upset would
exist,
and
it fails
to explain how Fedders would determine the infeasibility of
producing
an acceptable product within the 6.75
lbs.
per gallon
emission range.
As
Fedders has been able to maintain VOM
emissions
at
a level below the proposed limit of
6.75 lbs.
VOM
per gallon
(See
Third Amend.
Pet.
p.
19),
the Board believes that
this exception
is unnecessary.
Further,
the Board
is not
inclined
to grant unlimited variance on so speculative
an
occurrence.
Thus,
the Board has omitted the exception provision
in Condition No.
1.
Third, the requested Order
includes as Condition No.
2 that
the “prior variance PCB 83—47
is modified
so that Fedders’ VOM
emissions
from
its flowcoaters are limited
as set forth
in this
Order.”
The Board
fails
to
see the necessity of this
provision.
The prior variance ended
on April
1,
1986;
the
conditions set forth therein
are no longer applicable.
The Board
has not included this condition
in
its Order.
Finally,
the Board must note
for the record that part of the
record
is
incomplete.
At hearing, Exhibits la,
lb, and
ic were
offered
and admitted.
Thereafter,
a trade
secret question arose
as
to those exhibits.
Fedders withdrew the exhibits and stated
that within two weeks
it would
file
an amended
trade secret claim
and submit new copies of the exhibits.
(R.
at 54.)
These
filings have not been submitted.
The Board does not have
Exhibits
la, lb,
or
ic.
However,
it
appears
that
these
exhibits
were offered
to evidence Fedders’
intent
to proceed
with
installation of
the E—coat system.
As this
is not
in dispute,
the Board does not believe
that these exhibits are a condition
precedent to
a decision on
the variance.
Moreover,
the Board
is
faced with the rapid approach of a decision deadline.
Thus,
despite
the Board’s preference
for complete records, the Board
will
in this case proceed
to decision.
This Opinion constitutes the Board’s findings of facts and
conclusions of law.
ORDER
The Board hereby grants Fedders—USA
a variance from 35 Ill.
Acim.
Code
215.204(h)
from
Apri.1
1,
198~to
and including
September
30,
1989,
subject
to the following conditions:
93—20
—7—
1.
Fedders will limit
its VOM emissions from flowcoating
operations during
the variance period to 6.75 lbs. VOM
per gallon exclusive of solvent used
to clean
the
flowcoaters;
2.
Fedders will
install
a new electrodeposition paint
system and achieve full compliance with
35
Ill.
Adm.
Code 215.204(h)
by September
30,
1989;
3.
Fedders will submit
to the Agency two compliance
reports:
one by June 15,
1989 and one within
30 days of
achieving
final compliance;
4.
Within 45 days after
the date of this Opinion and Order,
Fedders
shall execute and send
to:
Illinois Environmental Protection Agency
Attention:
Bill Ingersoll
Enforcement Programs
2200 Churchill Road
Springfield,
IL 62794—9276
a certificate of acceptance of this variance by which
it
agrees
to be bound
by the
terms and conditions contained
herein.
This variance will be void
if Fedders
fails
to
execute
and forward
the certificate within
the 45—day
period.
The 45—day period shall
be
in abeyance
for any
period during which the matter
is appealed.
The form
of
the certification shall
be as follows:
CERTIFICATION
I,
(We)
_____,
having
read
the
Opinion
and
Order
of
the
Illinois
Pollution
Control
Board
in
PCB
86—47,
dated
April
6,
1989,
understand
and
accept
the
said
Opinion
and
Order,
realizing
that
such
acceptance
renders all
terms and conditions
thereto binding
and enforceable.
Petitioner
Authorized Agent
Ti LI.
e
Date
98—21
—8—
Section
41
of
the
Environmental
Protection
Act,
Ill.
Rev.
Stat.
1985,
ch.
111—1/2, par.
1041,
provides
for appeal of
final
Orders
of
the
Board
within
35
days.
The
Rules
of
the
Supreme
Court of Illinois establish filing requirements.
IT
IS SO ORDERED.
Board Member
J. Anderson concurred.
I,
Dorothy
M.
Gunn,
Clerk of the Illinois Pollution Control
Board,
hereby
certify
that
the
above~ Opinion
and
Order
was
adopted on the
L.’~-
day of _______________________,
1989,
by a
vote of
7—~9
.
~
~Dorothy
M.
Gu)~’n, Clerk
Illinois Pol~AitionControl Board
98—22