ILLINOIS POLLUTION CONTROL BOARD
December 1,
1994
IN THE MATTER OF:
)
)
IN THE MATTER OF:
PETITION OF
)
ILLINOIS WOOD ENERGY PARTNERS,
)
AS 94-1
L.P. FOR AN ADJUSTED STANDARD
)
(Adjusted Standard)
FROM 35 Iii.
Adm. Code 807 OR,
)
IN THE ALTERNATIVE, A FINDING
)
OF INAPPLICABILITY
OPINION
AND
ORDER OF THE BOARD
(by C.
A. Manning):
This matter
is before the Board on a Petition for Adjusted
Standard filed by Illinois Wood Energy Partners,
L.P.
(Wood
Energy) on February 8,
1994 pursuant to Section 28.1 of the
Environmental Protection Act
(Act) (415 ILCS 5/28.1) and Part 106
of the Board’s rules
(35 Ill.
Adm. Code 106).
Wood Energy seeks
an adjusted standard from 35 Ill. Adm. Code Part 807 or,
in the
alternative,
a Board finding of inapplicability of 807 to its
proposed wood-to-energy incineration facility that it intends to
build
in unincorporated Cook County
(Bloom Township) near Chicago
Heights, Illinois.
More specifically, Wood Energy seeks a Board
determination that the wood which would be incinerated to produce
energy at this facility is not a “solid waste” and therefore not
subject to the requirements of Part 807.
On November 2,
1994 filed a motion to clarify the Board’s
interim opinion and order of October 6,
1994.
Wood Energy
requests the Board to clarify that, upon dismissal of this
matter,
our Interim Opinion and Order of October
6,
1994 would
become final.
The Board clarified that “(absent
a timely filing
of a amended petition by Wood Energy, the Board will consider
that Wood Energy no longer desires to pursue this adjusted
standard.”
The Board granted Wood Energy until November 18,
1994
to file an amended petition in this matter and stated that absent
such filing the Board will,
at our next regularly scheduled
meeting, enter a final and appealable dismissal order for the
reasons stated in our Interim Opinion and Order of October
6,
1994.
LEGAL
CONTEXT OF PROCEEDING
This matter is brought before the Board in a rather unique
context.
Wood Energy petitions for an adjusted standard pursuant
to Section 28.1 of the Act or,
in the alternative,
a finding of
inapplicability of Part 807.1
Presumably,
if the Board finds
Part 807 contains regulations adopted pursuant to Section 22 of the
Act that monitor and regulate the operations of solid waste management facilities
through
Agency
permits.
Part
807
also contains
requirements
for
the proper
closure
of
facilities
to
insure
protection
of
the
environment
after
their
2
Part 807 inapplicable, an adjusted standard from any specific
requirements contained in that part would not be necessary.2
A
finding of inapplicability would result from a Board’s
determination that the wood which would be used to fuel the
facility is not a “solid waste” within the meaning of the Act and
the Board regulations.
It is this applicability which the Board
examines in this interim opinion and order.
Prior to bringing this matter to the Board,
Wood Energy
brought several related issues to our sister state adjudicatory
body, the Illinois Commerce Commission
(ICC), when it filed, on
May 7,
1993,
a petition for an ICC finding that Wood Energy
qualified as a Qualified Solid Waste Energy Facility (QSWEF)
as
defined by Section 8-403.1 of the Public Utilities Act.
(220
ILCS 5/8-403.1 (1992).)~ By order dated June 3,
1993 and
supplemental order dated February
8,
1994, the ICC determined
that Wood Energy
is a QSWEF.
(ICC 93-0160, June
3,
1993, ICC
930160, February 8,
1994.)
FACILITY DESCRIPTION
As set forth in its petition to this Board, Wood Energy is a
partnership organized in Delaware which has its principal offices
operations cease.
2
An adjusted standard is one form of relief the Board may grant,
upon
the appropriate demonstration by petitioner, which allows a new standard that has
been adjusted to replace
the regulation of general
applicability.
The Agency
argues
in
its
Post—Hearing
Brief
at pages
4—6
that
the
Board
does
not
have
jurisdiction
since
the
underlying
adjusted
standard
petition
is
lacking
information required by Section 28.1 of the Act and 35 Ill. Adm Code 106 and is
therefore deficient.
The Board’s jurisdiction in this matter
is the result of
Wood Energy petitioning the Board for relief from Part 807 regulations, or in the
alternative a determination that Part 807
is not applicable, whereby making the
requested adjusted standard to be unnecessary.
The Board in this order is making
the
limited
determination
of
whether
Part
807
applies
to Wood
Energy
thus
necessitating it to file an amended petition meeting the requirements of Section
28.1 of the Act and the Board’s regulations at
35 Ill.
Adm. Code 106.705.
The
Board
is
not premature
in making
the preliminary decision
as
to whether
the
regulations from which petitioner is requesting relief apply to its facility.
Section 8-403.1(b) defines
a QSWEF as
a facility determined by the
ICC to both qualify as such under the Local Solid Waste Disposal Act
(415
ILCS
10/1
et
seq.
(1992))
and to
possess characteristics
that would
enable
it to
qualify as a co—generation or small power production facility under federal law.
(220 ILCS 5/8—403.1(b)
(1992).)
3
in Northbrook,
Illinois.
(Pet.
at 2.)~ The general partners are
PEC Bloom I,
Inc.
(a subsidiary of Poisky Energy Corporation)
and
KES Bloom,
Inc.
(a subsidiary of Kenetech Energy Systems, Inc.).
Poisky Energy Corporation is in the business of developing, and
operating independent power projects in North America.
Kenetech
Energy Systems develops,
finances, and manages independent power
plants which principally utilize biomass and gas.
Wood Energy intends to construct a power facility located at
the northeast corner of the intersection of State Street and
Highway 30 in Bloom Township, Cook County, Illinois.
The power
facility would burn wood to produce energy which it will sell to
Commonwealth Edison
(Tr. at 22).
The waste wood will be
collected from various sources ranging from industry to
residential pollution control facilities and transfer stations.
More specifically, Wood Energy anticipates receiving wood from
all of the following waste streams:
industry, construction,
demolition,
forest land management, general land clearing
operations, sawmills, wood product manufacturers (including those
who manufacture pallets,
cable spools, railroad ties,
and
telephone poles)
and other “urban waste wood”.
(ICC Pet.
at 3.)
All of the waste wood collected would be put through a
process designed by Wood Energy to produce wood chips which
ultimately become what Wood Energy refers to as “produced wood
fuel.”5
The wood itself must comply with certain requirements
set forth by Wood Energy and the Agency and the process must meet
the requirements of Wood Energy’s “Wood Fuel Procedure”
(WFP).
(Pet. Exh.
C.)
At the time of hearing, this procedure consisted
of a nine page document, with ten attachments, which sets forth
the requirements for wood handling and quality control at the
off-site facilities.
(Tr. at 44.)
Petition Exhibit C is the
draft form of this document which must be complied with by Wood
Energy for it to meet the requirements of its NSPS
(air)
permit.
The transcript of the hearing held Nay 11,
1994 will be referenced
as “Tr. at
“,
the post—hearing briefs will be referenced as “Brief at
“
preceded
by the organization who filed, Wood Energy’s adjusted standard petition before
Board will be referenced as
“Pet.
at
“
and
its petition before the ICC will be
referenced as
“ICC Pet. at
“.
Wood fuel is defined by Wood Energy as all wood intended to be used
as
a
fuel including but not limited to vegetative wood
(e.g.,
trees,
forestry
slash, brush, slab wood, timber harvesting and/or landclearing operations), cord
wood,
logs,
lumber, sawdust and wood from:
manufacturing processes
(e.g., wood
pellets, buttoffs,
shavings,
turnings, sander dust), commercial and industrial
activities
(e.g.,
slabs,
bark,
chips,
waste pallets, boxes, railroad ties,
and
telephone poles),
and wood from construction and demolition activities
(e.g.,
structural timbers,
and joists).
This definition includes materials which are
chemically treated with creosote and pentachlorophenol.
4
All of the processing equipment utilized at the off-site units is
owned by Wood Energy.
Generally,
in order for the produced wood fuel to be
accepted at Wood Energy’s facility it must meet all of the
specifications contained in the WFP, and must be produced by the
methods and tested by the protocols contained therein.
(Tr. at
42,
44.)
The Bloom Township facility itself would consist of
tractor trailer discharge stations,
a conveyor system,
a
processing building, a wood chip storage building,
a power house,
a bag house, and a condenser unit housing and a stack.
(Pet.
at
4—5.)
Upon arrival at the tractor trailer discharge stations, the
wood would be inspected before being stored.
(Tr.
at 46.)
If it
fails to conform to the requirements,
it can be shipped back or
“made to conform.”
(Tr. at 47)
It would then be moved from the
discharge stations to the processing building.
(Pet.
at 4)
The
processing building will contain an electromagnetic separator,
a
disc scalping screen,
a hammer mill, and screening equipment.
The equipment is utilized, as necessary, to ensure that the wood
chips conform to the produced wood fuel standards established by
the Agency and Wood Energy.
(Pet. at 4-5, Tr. at 46-47.)
All
non—wood particles will be removed.
Usually scrap metal makes up
the non—wood material, and it is separated and later sold.
(Tr.
at 47.)
Mr. Sampson, Vice President of Development at Kenetech
Energy testified that in these types of facilities, roughly
1/100th of a percent scrap metal by weight is generally removed.
(Tr. at 48.)
Anytime the produced wood fuel fails to meet the
proper specifications, the shipment would be returned to the
contracted supplier.
(Tr. at 71-72.)
Alternatively, the
nonconforming wood chips would be made to conform and put back
into the produced wood fuel stream.
(Tr. at 47.)
The resulting produced wood fuel would then be transported
to the storage building.
(Pet.
at 5.)
From the storage
building, produced wood fuel would be conveyed to the power house
using a “first-in and first—out” system.
(Pet.
at 5.)
Once in
the power house the produced wood fuel would be conveyed to a
boiler system to generate electricity using a steam turbine.
(Pet.
at
5.)
There would be fly ash and bottom ash generated
from the combustion of the produced wood fuel that would be
disposed of in landfills.
(Tr. at 82,181—182.)
On September 15,
1993, the Agency, under signature of
Lawrence W. Eastep, manager of the Land Permit Section, issued
what is generally referred to as
a “Solid Waste Determination
Letter” to Wood Energy.
(Pet. Exh.
A.)
The Agency concluded
that,
so long as the stated conditions were met, the Agency did
not believe that the wood fuel would meet the definition of solid
waste as defined by the Act and the Board’s regulations.
Subject
to these conditions,
then,
the Agency letter concludes that Wood
5
Energy is not a solid waste management facility and therefore
does not require an operating permit for such.
(Pet.
Exh. B.)
ARGUMENTS
A. Wood Energy
Wood Energy argues that since the produced wood fuel is
derived from otherwise unusable waste woods,
it is not discarded
material and therefore, pursuant to Section 3.53 of the Act,
it
is not a waste.
Wood Energy cites several Board opinions which
stand for the proposition that if a material is not being
discarded it is not a waste.6
In addition, Wood Energy states
that since the produced wood fuel will be used,
it is not
discarded material and thus not a waste.
(Wood Energy’s Brief at
20.)
Wood Energy compares its on—site handling of the wood to
that which takes place on-site at other energy facilities that
utilize solid
fuels.
(Wood Energy’s Brief at 19.)
It argues,
therefore, that this final “processing” step is routine and is
not significant enough to bring it into the definition of waste
and the attendant requirements of Part 807.
As to oversized
produced wood fuel received from the suppliers, Wood Energy
admits that the process will further reduce the wood pieces and
also admits that any non-wood material (essentially metals) will
be separated and discarded during processing at the incineration
facility.
However, Wood Energy considers this final processing
minimal and argues that at any time after inspection,
if a load
of produced wood fuel
is rejected,
it will be returned to the
supplier.
(See Wood Energy’s Brief, generally at 19—20.)
Furthermore, Wood Energy sees
rio contradiction between the
argument it makes before us and the argument it made before the
ICC in search of its determination that Wood Energy is
a
Qualified Solid Waste Energy Facility
(QSWEF).
Wood Energy
argues that the ICC determination was made pursuant to a
different statute and was based upon the partnership as
a whole
(the incineration facility, plus all the off—site contracting
facilities which feed into it).
The Board’s focus,
it argues,
should be limited to a simple determination of whether the wood
fuel as it exists at the incineration facility is a “solid
waste.”
Indeed,
it appears that Wood Energy sought to clarify
this distinction before the ICC itself when it sought the
6
See R.R. Donnelley
Sons
Co.
v.
Illinois Environmental
Protection
Agency,
(Feb. 23, 1989), PCB 88-79, 96 PCB 161;
S.California Chemical Co., Inc.
v. Illinois Environmental Protection Agency,
(Sept.
20, 1984),
PCB 84—51, 60 PCB
103;
and Safety—Kleen Corp.
v.
Illinois Environmental Protection Agency,
(Feb.
7,
1980),
PCB 80—12,
37 PCB 363.
6
February ICC Supplemental Opinion which reads in relevant part:
Illinois Wood Energy Partner’s Supplemental Petition
and Request for Clarification is granted and the
electric generating facility described above which will
be owned by IWEP and fueled by wood chips processed
from waste wood will continue to meet the criteria for
Qualifying Solid Waste Energy Facilities pursuant to
Section 8-403.1 of the Act when the Facility consumes
wood chip fuel chipped from waste wood procured
directly from generators of waste wood and processes
the waste wood into wood chip fuel at the site where
the waste wood is generated.
(ICC 93-0160 June 3,
1993,
at 3.)
Therefore, Wood Energy would have us conclude that the location
of the produced wood fuel generation is not a factor in the ICC
ruling because the ICC may consider all facets of its operations
in finding that it is a QSWEF.
Such location is indeed relevant
in our determination of applicability of the definition of “solid
waste” at the energy/incinerator facility itself because we are
deciding whether the energy/incineration facility itself is a
solid waste management facility.
Therefore,
it argues that the
legal issues are distinct and the positions are not
contradictory.
(See, generally, Wood Energy’s Brief at 12.)
B.
The Environmental Action Coalition (Coalition) and the
Citizens for a Better Environment
(CBE)
The Coalition argues that the produced wood fuel is a solid
waste.
It cites United States v.
ILCO,
996 F.2d 1126
(11th Cir.
1993)
where the Eleventh District federal court found that spent
car and truck batteries once discarded by the original owner
remain a solid waste and do not change just because they are
purchased as raw materials for the purpose of recovering the lead
values of the batteries.
(Coalition Brief at 2.)
The Coalition
also cites American Mining Congress v.
U.S.
EPA, 824 F.2d 1177
(D.C.
Cir.
1987), American Mining Congress v. U.S.
EPA, 907 F.2d
1179
(D.C. dr.
1990), American Petroleum Institute v.
U.S.
EPA,
906 F.2d 729
(D.C. dir.
1990),
Shell Oil Company v. U.S.
EPA,
and 950 F.2d 741
(D.C.
Cir.
1991), United States
v.
ILCO.
Inc.,
996 F.2d 1126
(11th Cir.
1993)
to support the proposition that
the produced wood fuel is a solid waste even though it later may
be used as a fuel because it has been generated from discarded
material.
CEE argues that the hazardous waste operating requirements
of 35 Ill. Adm. Code 721 apply to the Wood Energy’s facility and
that Wood Energy has failed to meet the burden of proof for a
grant of an adjusted standard because the record is void of any
factual information for the Board to make a determination as to
the applicability of those regulations.
(CBE’s Brief at 3-4.)
7
CBE argues that since up to fifty
(50) percent by weight of the
volume of produced wood fuel may contain creosote and
pentachlorophenol, which is a hazardous waste, Section 721.102
applies.7
(CBE’s Brief at 3.)
Also, CBE argues that Wood Energy
is judicially estopped
from arguing before the Board that the facility is not a solid
waste management facility in accordance with the Illinois
Environmental Protection Act because it has represented to the
ICC that it was a solid waste management facility pursuant to the
Illinois Local Waste Disposal Act.
(CBE’s Brief at 6-13.)
C. Illinois Environmental Protection Agency
(Agency)
While the Agency does not repudiate its September 15,
1993
solid waste determination letter, the Agency now states that such
letter was based solely upon the definition of wood fuel as
stated in the solid waste determination request as a fuel to be
used in a wood—fired power plant.
(See Footnote Number
6 of this
Order.)
(Agency’s Brief
at 6.)
The Agency further states that
it did not contemplate Wood Energy’s designation as a QSWEF
pursuant to the Illinois Local Solid Waste Disposal Act,
as
determined by the ICC, when it issued the letter.
(415 ILCS
10/2.5
(1992).)
The Agency concludes that based upon Wood
Energy’s “designation as a qualified solid waste energy facility
and the requirements of those facilities the Agency
now
believes that a waste or solid waste must be burned at the
facility to maintain that designation pursuant to 415 ILCS 10/2.5
and 10/3.1(1) and
(2)
and that Petitioner has acknowledged this.”
(Agency’s Brief at 7.)
The Agency further states that Wood
Energy has “acknowledged that the combustion of the Wood Fuel at
the wood-fired power plant will generate solid waste in the form
of fly ash and bottom ash.”
(Agency’s Brief at 7.)
ANALYSIS
When Wood Energy sought to become a QSWEF pursuant to
Section 5/8—403.1 of the Utilities Act and Section 10/3.1 of the
Local Solid Waste Disposal Act (Disposal Act),
it obviously did
so to obtain the legislatively mandated purchasing agreement with
Commonwealth Edison pursuant to Section 5/8-403.1(c)
that would
as a result from such designation.
(220 ILCS 5/8—403.1 and 415
ILCS 10/1 et seq.)
In order to achieve such designation under
Although pentachlorophenol is listed as a hazardous waste in 35 Ill.
Adm. code 721 and has an EPA hazardous waste No. F027, Wood Energy is not seeking
relief
from
the
requirements
of
Part
721
which
regulates
hazardous
waste
facilities.
The present issue before the Board is whether Part 807 applies to
Wood Energy’s facility, therefore the Board will not address the issue of whether
Part
721 applies to its facility.
8
Section 10/3.1 of the Disposal Act, Wood Energy had to certify to
the ICC
(and must continue to certify on an annual basis) that
solid waste is the primary fuel and comprises 95
of the annual
fuel loading at the facility.
(415 ILCS 10/3.1(1)
(1992).)
In
addition, Wood Energy must guarantee that the solid waste
throughput volume is equal to at least 66
of the design capacity
of the facility pursuant to Section 10/3.1(2).
Therefore,
our
sister state agency has already determined that the facility
is a
QSWEF which is utilizing solid waste as a major part of its
energy source in producing electricity.
CBE argues that Wood
Energy is estopped from now arguing before us that the produced
wood fuel
(the wood chips incinerated by Wood Energy)
is not
“waste” pursuant to the definition of waste contained in the Act
at Section 3.53, which definition is identical to the one found
in the Disposal Act.
Wood Energy seeks to distinguish the issue before us from
the issue it raised and litigated before the ICC.
Wood Energy
argues that the ICC determination was made pursuant to a
different statute and was based upon the partnership as a whole
(the incineration facility, plus all the off-site contracting
facilities which feed into it).
The Board’s focus,
it argues,
should be limited to a more simple determination of whether the
wood fuel as it exists at the incineration facility is a “solid
waste.”
Therefore,
it argues it is not estopped because the
legal issues are distinct and the positions are not
contradictory.
The determination of the ICC under a different statutory
scheme, although utilizing the same definition of solid waste,
does not estop Wood Energy from making this argument before the
Board pursuant to the Act and the regulations of 35 Ill. Adm.
Code 807.
The ICC determination is neither binding on the Board,
nor dispositive of the issues before us.
Nonetheless,
in
reaching its determination the ICC used the definition of solid
waste which is contained in the Illinois Local Solid Waste
Disposal Act
(415 ILCS 10/2(5) (1992)) and which definition is
virtually identical to the one contained in the Illinois
Environmental Protection Act (415 ILCS 5/3.82 and 5/3.53
(1992))
which we examine today.
Therefore, while not binding, the ICC
determination and underlying analysis is nonetheless quite
related to the issues now before us.
The issue before the Board is whether or not the wood being
used to fuel the incinerator is a “solid waste” or “waste”,
as
defined under the Act or the Board regulations.
Section 3.82 of
the Act defines “solid waste” to mean “waste”
(415 ILCS 5/3.82
(1992)) and Section 3.53 of the Act,
in relevant part, defines
waste as:
any garbage, sludge from a waste treatment plant, water
supply treatment plant,
or air pollution control facility or
9
other discarded material,
including solid,
liquid, semi-
solid, or contained gaseous material resulting from
industrial,
commercial, mining and agricultural operations,
and from community activities...(415 ILCS 5/3.53
(1992))
(Emphasis added.)
The Board has interpreted the meaning of “other discarded
material”
in connection with material that has been recovered and
reused in decisions as to whether that material is governed by
special waste hauling regulations.
In those cases,
Safety—Kleen
Corp., Southern California Chemical Co.,
Inc..
and R.R. Donnelley
& Sons Co., we found that since the petitioners, the generators
of the material, maintained control over the material in
question,
and the material was to be reused and not discarded,
it
was not a waste that required special waste hauling manifests.
In R.R. Donnelley,
on a motion to reconsider, the Board further
concluded that even though R.R. Donnelley did not maintain
complete control over the material (used oil)
it was generating,
it did have knowledge to whom it was selling the used oil, and
the used oil was subsequently sent directly for reuse without
further treatment, processing or storage.
These cases are distinguishable because the wood material
being utilized here is not generated by Wood Energy as part of
its manufacturing process.
Here, the wood material is accepted
from off—site generators, but then is further refined to conform
to the specifications of produced wood fuel by Wood Energy and is
not immediately used or stored to be used.
In the above special
waste cases the Board’s decisions that the material was a waste
or solid waste centered around the fact that the material was
generated by the company using the material and was part of its
ongoing process.
Here, Wood Energy is planning to incinerate approximately
220,000 tons of waste wood generated from industry, construction,
demolition,
forest land management, general land clearing
operations, sawmills, wood product manufacturers (including those
who manufacture pallets, cable spools, railroad ties,
and
telephone poles)
and other “urban waste wood” at its facility.
Wood Energy’s produced wood fuel is nothing more than waste wood
conforming to size requirements and air permitting requirements
that would be necessary as part of any disposal system utilizing
incineration.
Incineration of the waste wood in this context is
a waste treatment process.
That energy
is a by—product of this
waste treatment process does not alter the character of the waste
wood.
Therefore, the produced wood fuel is and continues to be a
solid waste and Wood Energy is a solid waste management facility
which is governed by the Part 807 regulations.
Since Wood Energy is a solid waste management facility, the
requirement of Section 21(d)
of the Act would apply.
The issue
of adjusted standard relief from a requirement of the Act is
10
still relevant based on the original petition filed by Wood
Energy on February 8,
1994.
However, since Wood Energy did not
file an amended petition we will not address that issue.
This opinion constitutes the Board’s findings of fact and
conclusions of law as to the issue discussed.
ORDER
For the reasons stated above, the Board finds that Wood
Energy is a solid waste management facility as defined by the Act
and the Board regulations.
As a result of Wood Energy’s failure
to file an amended petition meeting the informational
requirements, the Board finds that Wood Energy no longer wishes
to pursue the adjusted standard relief.
Therefore, this docket
is closed and the matter
is hereby dismissed.
This order shall
constitute a final and appealable order of the Pollution Control
Board.
IT IS SO ORDERED.
Board Member G. Tanner Girard concurred.
Board Member Joseph Ii abstained.
I, Dorothy M. Gunn,
Clerk of the Illinois Pollution Control
Board, do hereby certify that the above opinion and order was
adopted on the /~‘I-Vday of
~
,
1994,
by a vote of
Control Board
