ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER 18, 2005

BEFORE TilE ILLINOIS POLLUTION CONTROL BOARD

OF TUE STATE OF ILLINOIS

DYNEGY MIDWEST GENERATION, INC.)

(BALDWIN ENERGY COMPLEX),

)

)

Petitioner,

)

)

PCB No. 2006-063

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS

ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

NOTICE

To:

Dorothy Gunn, Clerk

Sheldon A. Zabel

Illinois Pollution Control Board

Kathleen

C. Bassi

100 WestRandolph Street

Stephen J. Bonebrake

Suite 11-500

Joshua R.

More

Chicago, Illinois

60601

Kavita M. Patel

SchiffHardin, LLP

Bradley P. Halloran

6600 Sears Tower

Hearing Officer

233 South Wacker Drive

James R. Thompson Center,

Chicago, Illinois 60606

Suite 11-500

100 Wóst Randolph Street

Chicago, Illinois

60601

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

the Clerk ofthe Illinois Pollution Control Board the APPEARANCES, MOTION IN

OPPOSITION TO PETITIONER’S REQUEST FOR STAY and

AFFIDAVIT

ofthe

Respondent, Illinois Environmental Protection

Agency, a copy ofwhich is herewith

served upon the assigned HearingOfficer and the attorneys

for the Petitioner.

Respectfully submitted by,

Robb H. Layman

Assistant Counsel

Dated: November 18, 2005

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box

19276

Springfield, Illinois 62794-9276

(217) 524-9137

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ELECTRONIC

FILING,

RECEIVED, CLERKS

OFFICE,

NOVEMBER 18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL

BOARD

OF THE STATE OF ILLINOIS

DYNEGY MIDWEST GENERATION, INC.)

(BALDWIN ENERGY COMPLEX),

)

)

Petitioner,

)

)

PCB No.

2006-063

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Robb H. Laymari and enters his appearance on behalfofthe

Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, as one ofits

attorneys in the above-captioned matter.

Respectfblly submitted by,

Robb H. Layman

Assistant Counsel

Dated: November

18,

2005

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box

19276

Springfield, illinois 62794-9276

(217) 524-9137

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ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER

18, 2005

BEFORE

TIlE ILLINOIS POLLUTION CONTROL

BOARD

OF TILE

STATE

OF

ILLINOiS

DYNEGY MIDWESTGENERATION, INC.)

(BALDWIN ENERGY COMPLEX),

)

)

Petitioner,

)

)

PCB No. 2006-063

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Sally Carter and enters her appearance on behalfofthe

Respondent, ILLINOIS ENViRONMENTAL PROTECTION AGENCY, as

one

ofits

attorneys in the above-captioned matter.

Respectfully submitted by,

Sally ø~irter

Assistant Counsel

Dated: November 18, 2005

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O.

Box

19276

Springfield, illinois 62794-9276

(217) 782-5544

---

ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

BEFORE

THE ILLINOIS POLLUTION

CONTROL

BOARD

OF

THE STATE

OF

ILLINOIS

DYNEGY MIDWEST GENERATION, INC.)

(BALDWIN ENERGY COMPLEX),

)

)

Petitioner,

)

)

PCB No. 2006-063

V.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

MOTION IN OPPOSITION TO

PETITIONER’S REQUEST FOR STAY

NOW COMES the Respondent, ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY (“illinois EPA”), by and through its attorneys, and moves the illinois Pollution

Control Board (“Board”) to deny the Petitioner’s, DYNEGY MIDWEST

GENERATION,

INC., (hereinafter “Dynegy Midwest Generation” or “Petitioner”),

request for a stay ofthe effectiveness ofthe Clean Air Act Permit Program (“CAAPP”)

permit issued in the above-captioned matter.

INTRODUCTION

Actingin

accordance with its authority under the CAAPP provisions ofthe

illinois Environmental Protection Act (hereinafter “Act”),

415 ILCS 5/39.5(2004),

the

illinois EPA issued

a CAAPP permit to Dynegy Midwest Generation on September 29,

2005.

The permit authorized the operation ofan electrical power generation facility

known as

the Baldwin Energy Complex.

The ficility is located at #1 Chessen Lane,

Alton, Illinois.

1

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ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18,

2005

On November 3,

2005,

attorneys for the Petitioner filed this appeal (hereinafter

‘Petition”) with the Board challenging certainpermit conditions contained within the

CAAPP permit issued

by the illinois EPA.

The Illinois EPA received an electronic

version ofthe appeal on the same date.

Formal notice ofthe appeal was served upon the

Illinois EPA on November?, 2005.

As partofits Petition, Dynegy Midwest Generation seeks a stay ofthe

effectiveness ofthe entire CAAPP permit, citing two principal grounds for

its requested

relief.

First, Petitioner alleges that the CAAPP pennit

is subject to the automatic stay

provisionof the illinois Administrative Procedure Act (“APA”),

5 ILCS 100/10-

65 (b)(2004).

As an alternative basis for a blanket stay ofthe CAAPP permit, Petitioner

alleges facts intended to support the Board’suse ofits discretionary stay authority.

In accordancewith the Board’s procedural requirements, the Illinois EPA may file

a response to any motion within

14 days after service ofthe motion.

See,

35111.

Adm.

Code 101.500(d).

ARGUMENT

The illinois EPA urges the Board to deny Petitioner’s request for a stayof the

effectiveness ofthe entire CAAPPpermit.

For reasonsthat are explainedin detail below,

Petitioner cannot avail itself ofthe protections afforded by the APA’sautomatic

stay

provision as a mailer oflaw.

Further, Petitioner has failed to demonstrate sufficient

justification for theBoard to grant a blanket stay ofthe CAAPP pennit under its

discretionary stay authority.

Given the absence of an alternative requestby Petitioner

seeking either a stay of contested CA.APP permit conditions or any other relief deemed

just and appropriate, the Board should decline to grant any stayrelief whatsoever.

2

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ELECTRONIC

FILING, RECEIVED,

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18, 2005

I.

The CAAPP

permit

issued

by

the Illinois

EPA

should not be

stayed in

its entirety by reason

of

the

APA’s automatic

stay provision.

The first argument raised by Petitioner maintains that the CAAPP permit in this

proceeding is subject to the automatic stay provision ofthe APA.

See, Petition at page 5.

The automatic stay provision under the APA governs administrative proceedings

involving licensing, including

a “new license with reference to any activity ofa

continuing nature.”

See,

5 ILCS 100/10-65(b).

The CAAPP permit at issue in this

proceeding governs emissions-relatedactivities at an existing, major stationary source in

Illinois.

Accordingly, the illinois EPA does not dispute that the CAAPP permit is

synonymous with

a license that

is ofa continuing nature.

See also,

5 ILCS 100/1 -35

(2004)(defining

“license” as the “whole or part of any agency permit... required by

law”).

In its argument, Petitioner pqstulates that the MA automatically stays the

effectiveness ofthe CAAPP permit until after the Board has rendered a final adjudication

on the merits of this appeal.

Citing

to

a Third District Appellate Court ruling from over

two decades ago, Petitioner reasons that the APA’s stay provision continues to apply

throug)iout the duration of the pending appeal because it is the Board, not the illinois

EPA, that makes the “final agency decision” on the permit.

See, Borg-Warner

Corporation

v. Mauzy,

427 N.E.2d 415,

56111. Dec. 335 (3~

Dist.

1981).

The stay

provision would also apparently ensure that the Petitioner continues to abide by the terms

of“the existing license which

shall continue in full

force and effect.”

See. 5 ILCS

100/1-65(b)(2004).

In this case, that “existing license” is the underlying State operating

3

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ELECTRONIC

RUNG, RECEiVED,

CLERK’S

OFFICE,

NOVEMBER

18, 2005

pennit& that have been separately governingthe facility’s operations since the illinois

EPA’s original receipt ofthe permit application.

See;

415 ILCS 5/39.5(4)(b)(2004).

The

Borg-Warner

decision upheld the MA’s automatic stay provision in the

context ofa renewal for a National Pollutant Discharge Elimination System (“NPDES”)

permit sought before the Illinois EPA.

Notably, the court observed:

“A final decision, in the senseof a final and binding decision coming out ofthe

administrative processbefore the administrative agencies with decision making

power, will not be forthcoming in the instant case until the PCB rules on the

permit application.”

Borg-Warner.

56111. Dec. at

341.

The Illinois EPA concedes that the

Borg-Warner

:

decision may still reflect good law and that it probably warrants, in the appropriate case,

application ofthe doctrine of

stare

decisis

by illinois courts.

Moreover, the illinois EPA

observes that the ruling is apparently in perfect harmony with other subsequent decisions

by Illinois courts that addressed the respectiveroles ofthe Illinois EPA and the

Board in

permitting matters under the Act.

In this regard, the illinois EPA is (lilly cognizantofthe

“administrative continuum” that exists with respect to the Board in most permitting

matters, and the CAAPP program itselfdoes not reveal the General Assembly’s

intentions to change this administrative

arrangement.

See, Illinois EPA

v. Illinois

Pollution Control Board.

486 NE2d

293,

294 (3~

Dist.

1985),

affirmed. illinois EPA

v.

illinois Pollution

Control Board, 503

NE2d 343,

345

(ill.

1986);

ESG Watts,

Inc.,

v.

Illinois Pollution Control Board,

676 N.E.2d 299,

304 (3~

1)1st. 1997).

Thus, it is the

Board’s decision

in reviewing whether a

CA.APP permit should issue that ultimately

determines when the permit becomes final.

In limited situations,

it

is

possible

that afacility’s operation

during the

pending

review

of

the CAAPP

permit application was

also authoñzed

in a State construction permit.

4

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ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE, NOVEMBER

18, 2005

While

the Borg-Warner

opinion mayoffer some interestingreading, it does not

provide a proper precedent in this ease.

This conclusion can be arrivedbecause the APA

simplydoes not apply to these CAAPP permit appeal proceedings.

For one reason, the

APA’s various provisions should not apply where the General Assembly has effectively

exempted them from a particular statutory scheme.

One example of this exercise of

legislative discretion is found with administrative citations, which under Section 31.1 of

the Act are not subject to the contested ease provisions ofthe MA.

See, 415 ILCS

5/31.1(e)(2004).

In the case of the Act’s CAAPP provisions, a similarbasis for

exemption is provided by thepermit severability requirements that govern the illinois

EPA’s issuance ofCAAPP permits.

Section 39.5(7) ofthe Illinois CAAPP sets forth requirements governing the

permit content for every CAMP permit issued by the Illinois EPA.

See generally. 4i5

ILCS 5/39.5(7)(2004).

Section

39.5(7)(i)

of

the Act provides that:

“Each CAAPP permit issued under subsection

10 ofthis Section shall include

a

severability clause to ensure the continued validity ofthe various permit

requirements in the event ofa challenge to any portions of the permit.”

415 ILCS 5/39.5(7)(i)(2004).

This provision represents something morethan the trivial

or inconsequential dictates to an agency in its administration ofa permit program.

Rather, it clearlycontemplates a legal effect upon a permitting action that extends beyond

the scope of thepermit’s terms.

In otherwords, the General Assembly was not simply

speaking to the Illinois EPA but, rather, to a larger audience.

By obèerving that

a

component of a CAAPP permit shall retain a “continued validity,” lawmakers clearly

proscribed that the uncontested conditions ofa CAAPP permit must continue to survive

notwithstanding a challenge to the permit’s other terms.

This

language signifies an

S

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ELECTRONIC

FILING, RECEIVED,

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18, 2005

unambiguous intent to exempt some segment ofthe CAMP permit from any kind of

protective stay during the permit appeal process.

For this reason, the automatic stay

provision ofthe.APA cannot be said to govern CAAPP permits

issued pursuant to the

Act.

The Board should also reject the Petitioner’s automatic stay argument on entirely

separate grounds.

Petitioner suggests that the MA’s automatic stay provision applies by

virtue ofthe

licensing that is being obtained through the CAAPP permitting process:

However, the MA contains a grandfathering clause that specifically exempts an

administrative agency that previously possessed “existing procedures on July

1,

1977” for

contested case or licensing matters.

See, 5 ILCS 100/1-5(a)(2004).

Where such

provisions were in existence prior to the July

1,

1977, date, those existing provisions

continue to apply.

Id.

Procedural rules have been in place with the Board since shortly afterits

formal

creation.

Because the permitting scheme established by the Act contemplated appeals to

the Board, procedural rules were created in those early years to guide the Board in its

deliberations.

Similar to the cunent Board procedures for permitting disputes, the earlier

rules referenced the Board’s enforcement procedures in providing specific requirements

for the permit appeal process: They were then, as they are today, contested case

requirements by virtue oftheir very nature.

The earliest version ofthe Board’s procedural regulations was adopted on

October 8, 1970 in the R70-4 rulemaking and was subsequently published by the Illinois

SecretaryofState’s office as “Procedural Rules.”

Those rules included requirements for

permit appeals, effective through February 14, 1974, and they required such proceedings

6

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ELECTRONIC

FILING, RECEIVED,

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OFFICE,

NOVEMBER

18, 2005

to be conducted according to the Board’s Part

m

rules pertaining to enforcement.

See,

Rule 502.

In contrast to the Regulatory and Nonadjudicative Hearings and Proceedings,

theEnforcement Proceedings ofPart Ill

contained a plethora ofcontested

case

requirements, includIng provisions for the filing of a petition (i.e., Rule 304),

authorization for hearing (i.e., Rule 306), motion practice (i.e., Rule 308), discovery (i.e.,

Rule 313), conduct ofthe hearing (Rule 318), presentation of evidence (i.e., Rule 321),

examination ofwitnesses (i.e., Rules

324, 325

and 327) and final disposition (i.e., Rule

322).

A later version of these rules, including amendments, was adopted by the Board

on August 29,

1974.

The ‘Procedural Rules” that originally guided the Board in enforcement cases and

permit appeals formed thebasic

framework for

the

current-day version ofthe Board’s

procedural regulations promulgated at 35112.

Adni.

Code 101-130.

Although

theBoard’s

procedural rules may have evolved and

expanded

over time, the core featuresofthe

adversarial process governing these cases have remained substantially the same,

including those rules governing CAMP permit appeals.

Because the Board had such

proceduresin place prior to July

1,

1977, those procedures effectively secured the

Board’s exemption from the APA’s contested case requirements.

And so long as those

underlying procedures historically satisfied the grandfathering clause, it should not matter

that the Act’s CAMP program was enacted some twenty years later.

After all, it is the

procedures applicable to contested cases and their point oforigin that

is relevant to this

analysis, not the advent of the permitting program itself.2

2

Petitioner may counter that the

Borg- Warner

decision

is at odds with this argument and

that part of

the

appellate

court’s

ruling

held that the APA’s

grandfathering clause did not apply

to the Board’s rules for the

NPDES permit program. The

court’s discussion on the

issue

of the grandfatheringclause

is

inapposite

here.

The

NPDES rules

at

issue were

written ina way that conditioned

their

effectiveness

upon a

future event.

7

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II.

The

CA.APP permit

issued

by

the Illinois EPA should

not

be stayed

in

its

entirety by

reason of Petitioner’s

alleged justifications.

Separate and apart from its APA-related argument, Petitioner offers the Board an

alternative basis for granting a blanket stay ofthe CAAPP permit.

Specifically,

Petitioner suggests that the Board stay the entire CAMP permit as part ofits

discretionary stay authority.

See, Petition atpages 5-7.

While the reasons put forward

by Petitioner might have sufficed to justif~’

a stay ofthe CAAPP permit’s contested

conditions had one been sought, Petitioner fails to demonstrate a clear and convincing

need for a broader stay.

Even if the Petitioner could muster more persuasive arguments

on this issue, the Illinois EPA questions whether such an all-encompassing remedy is

appropriate under any circumstances.

Notwithstanding the Board’s recent practice in

otherCAAPP appeals,the illinois EPA has come to regard blanket stays ofCAAPP

permits as incongruous with the aims ofthe Illinois

CAAPP

and needlessly over-

protective in light ofattributes common to these appeals.

Section

105.304(b) ofTitle 35 ofthe Board’s procedural regulations provides that

a petition for review ofa CAAPP permit mayinclude

a request for stay.

The Board has

frequently granted stays in permit proceedings, often citing to the various factors

considered by illinois courts at common law,

The factors that are usuallyexamined by

• the Board include the existence ofa clearly ascertainable right that warrants protection,

irreparable injury in the absence ofa stay,

the lack ofan adequate legal remedy and a

When the event

actually

took place,

the effectiveness ofthe rules occurred

after the July

1, 1977, date

established in the grandfatheringclause.

More importantly,

in addressing an issue that was not central to

the appeal,

the

appellate court appears to have

erroneously

placed too much

emphasis on the

substantive

permitting

procedures of the NPDES program,

rather than those

procedures applicable to the Board’s

contested case

hearings.

A proper construction of the APA demands thit the focus be placed on the

existing procedures “specifically for contested cases or licensing.”

S

!LCS

I

00/1-5

(a)

(2004).

8

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FILING, RECEIVED, CLERKS OFFICE,

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18, 2005

probability ofsuccess on the merits ofthe controversy.

See,

Bridgestone/Firestone Offi

road Tire Company v. Illinois EPA,

PCB 02-31

at page 3 (November I, 2001);

CommunityLandfill

Company and City of

Morris

v. illinois

EPA,

PCB No. 01-48 and 01-

49 (consolidated) atpage

5 (October 19, 2000), citing

Junlainc v. S.f. Advanced

Technology & Manufacturing.

498 N.E.2d 1179

(15t Dist.

1986).

However, the Board has

noted that its consideration is not confined exclusively to those factors

nor

must each one

ofthose factorsbe considered by the Board in every case.

See, Bridgestone/Firestone

at

page 3.

TheBoard has commonly evaluated stay requests with

an eye toward thenature

ofthe injury that might befall an applicant from having to comply with permit conditions,

such as the compelled expenditure of“significantresources,”

Abitec Corporation v.

Illinois EPA.

PCB No. 03-95 at page

1

(February 20, 2003), orthe effectual loss of

appeal rights

prior to

a final legal determination.

Bridgestone/Firestone

at page 3.

The

Board has also afforded special attention to the “likelihood ofenvironmental harm” for

any stay that maybe granted.

See,

Bridgestone/Firestone

at page 3;

Abitec Corporation

at

1;

Community Landfill Company and

City

of

Morris

v.

illinois

EPA,

at page 4.

i.

Consideration oftraditional factors

Petitioner’s Motion touches, albeit sketchily,

on some of the relevant factors in

this

analysis.

See, Petition at pages 5-7.

The Illinois EPA generally accepts that

Petitioner should not be

required to expend exorbitantcosts in complying with challenged

monitoring, reporting orrecord-keeping requirements of the CAAPP permit until

after it

is provided its proverbial “day in court.” Petitioner’s right of appeal likewiseshould not

be cut short orrendered mootbecause it was unable to obtain a legal ruling before being

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required to comply with those terms ofthe permit that are deemed objectionable.

The

Illinois EPArecognizes these reasons as

a legitimate basis for authorizing a stay of

permit

conditions contested on

appeal. However, they are not at all instructive to

Petitioner’s claim that a stay of the entire CAAPP permit is needed.

Judging by a fair reading ofthe Petition, Petitioner has challenged a relatively

small number ofthe conditions contained in the overall CAAPP permit, thus

leaving the

lion’s share

of the

permit conditions unaffected by the appeal.

Much ofthe gist of

Petitioner’s

appeal pertains to “periodic monitoring,” including a numberofprovisions

dealing

with

emissions testing, reporting, record-keeping and monitoring of emissions

that are purportedlybeyond the scope ofthe illinois EPA’s statutory permit authority.

If

the vast majority of the permit’s terms are uncontested, it cannot logically follow that the

absence ofa stay for those conditions willprevent the Petitioner from exercising a right

ofappeal.

Similarly, it is difficult to discern why Petitioner’s compliance with

uncontested

permit conditions would cause irreparable harm, especially if one can

assume, as here, that the crux of CAAPP permitting requirements were carried over from

previously-existing State operating permits?

The Illinois EPA does not dispute

that the

Clean Air Act’s (“CAA”) Title

v

program, which formed the

framework for the

Illinois

CAAPP,

requires only a

marshalling

ofpre-existing “applicable

requirements”

into

a single operating permit for a major source

and that

it does not generally authorize new substantive

requirements.

See,

Appalachian

Power

Company v.

Illinois EPA,

208 F.3d

1015,

1026-1027

(D.C.

Circuit,

2000);

Ohio

Public Interest Research

Group v.

Whitman,

386

F.3d

792,

794

(6°Cir.

2004);

In

re:

Peabody

Western

Coal

Company,

CAA Appeal

No. 04-01, slip

op. at 6

(EAR,

February

18,2005).

Aside

from

the

conditions lawfully imposedby the Illinois EPAfor

periodic

monitoring

and other miscellaneous

matters,

the remainder of the

CAAPP permit

should

be comprised of the pre-existing requirements that

were

previously permitted.

A casual

comparison

of

the CAAPP

permit and the Petition suggests that the present

appeal

only

calls

into question a

relatively

smafi fraction

of pennit

conditions contained

in the

overall

CAAPP

permit

10

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ii.

Other

related

factors

Petitioner argues

thatthe

absence

of a

blanket stay

would cause

“administrative

confhsion”

because

the uncontested conditions of the CAAPP permit would remain in

effect

while

the challenged conditions would be governed by the “old state operating

permits.”

Petition at pages 6-7,

The illinois EPA takes exception to

a key assumption in

the Petitioner’s argument.

In the illinois EPA’s view, the vestiges ofany former State

operating permits for this CAAPP source dissipated upon the Illinois EPA’s issuance of

the CAAPP permit on September 29, 2005.

This area ofdiscussion may be a significant

source ofPetitioner’s misunderstanding, thus explaining its confusion with the effects of

a limited stay.

Section 39.5(4)(b) states that a CAAPP source must abide by the terms ofits

previous State operating permit, even though the permit mayhave expired, “until the

source’s CAAPP permit has been issued.”

See,

4/5 ILCS 5/39.5(4)(’b)(2004).4

A few

subsections later, the statute provides that the CAAPP permit “shall upon becoming

effective supercede the State operating permit.”

See,

415 JLCS 5/39.5(4)(g)(2004)

Taken together, these provisions indicate that

permit issuance and permit

effectiveness

for a CAAPP permit are synonymous and that any underlying State operating permit

becomes a nullity upon the aforementioned occurrence.

The General Assembly could not

have reasonablyintended for a source’s obligation to end upon permit issuance, only to

Petitioner also references Section 9.1(1) of the Act as a source of

authority for its

proposition that the

State operating permit continues in effectuntil the

CAMP

permit is issued.

See,

Petition atpageS.

This

assertion

is

erroneous.

Section

9.1(1) applies

only toNew Source Review permits issued under

the

authority of the CAA,

not

CAAPP permits

specifically governed

by

Section 39.5.

Although the text of the

subsection is silent

with

respect to this

distinction,

it

should be construed with

reference

to its

context and

surrounding provisions, which are confinedentirely to specified CAA

programs.

Alternatively,

to

the

extent

that

the Act’s CAAPP

requirements are more specific to CAAI’P permits,

the provision found at

Section 39.5(4)(b)would

apply instead of the

more general provision under Section 9.1(0.

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have

the

CAAPP

pennit’s

superceding effect on the State operating permit delayed until

permit

effectiveness.

Petitioner apparently reads the above-referenced provisions as

though they

apply

to the Board’s final action in this appeal.

See,

Petition at page 5.

However, this

argument ignores other provisions ofthe Act that clearly depict the Illinois EPA as the

permit-issuer.

No clearer evidence ofthis intent can

be

found than the numerous

provisions of Section

39.5(9)

ofthe Act, which govern the United States Environmental

Protection Agency’s (hereinafter “USEPA”)participation and role in reviewing the

CAAPP

pennits.

See,

415 ILCS 5/39.5(9)(2004)

.~

Other provisions of the Act similarly

establish that permit issuance denotes the action ofthe Illinois EPA, not the Board, in the

context of CAAPP permitting.6

As previously mentioned, the Illinois EPA does not deny that the CAMP

permitting process is analogous to the typeof

“administrative

continuum”

recognized

by

Illinois

courts

in other permitting programs under theAct.

In this respect, the fllinois

EPA

performs a

role under the illinois CAAPP that requires,

in essence, a

defacto

issuance ofa CA.APP permit.

The Board’s obligation in adjudicating whether the permit

should issue, in contrast, is a

dejure-like

function that, while critical in terms of

See, 4/5

ILCS

S/39.5(’P)(b,)(noting

requirement

that

the Illinois

EPA shall

not “issue” the proposed

permit

if

USEPA

provides a written

objection within the

45

day review

period);

415

JLCS

5/39.5(9)Q)(explaining that when the illinois EPA is in receipt of a USEPA objection

arising from

a

petition,

the

“Agency shall not issue the

permit”);

415

JLCS

5/39.5(’9)(g)(observing requirements for

whenever a USEPA objection is received by the Illinois

EPA

following

its

issuance

of a permit after the

expiration of the 45-day

review

period and prior

to receipt ofan

objection

arising

from a petition). N-otably,

one such provision

states that

the “effectiveness of a

permit

or

its

requirements” is not

stayed

by virtue of

the filing ofa petition with USEPA.

See,

415 ILCS 5/39.5(9)0.

6

The requirements in Section

39.5(10),

entitled

“Final

Agency Action,” recognize the standards

for

permit

issuance by the Illinois EPA.

4/S ILCS 5/39.5(10)(2004).

Similarly, the review provisions

for

Title

V permits,

codified at Section 40.2,

focus on

a

permit

denial or a

grant

of a permit

with conditions

as a

basis

for

appeal to the Board.

See, 4/5

!LCS 5/40.2(a)~0O4).

The

latter provisionseven go

so far as to

reference “fmal permit action” in relation to the

Illinois EPA’s permit decision.

Id.

12

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FILING, RECEIVED, CLERK’S

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determining

whether a

permit

issued by

the

Illinois EPAbecomes final, should

not color

the meaning ofother legal terms.7

The

issuance

or

effectiveness of a CAAPP pennit

is

functionally distinct from the legalisms associated with when a CAAPP permit

becomes

final.

Even putting aside ihe legal semantics posed by this issue, the thrust of

Petitioner’s argument misses its mark.

Any confusion stemming from the appeal phase

of the Title V program should be fairly modestcompared to the past.

Prior

to the

enactment ofthe CAA Amendments of 1990, states issued permits under a patchwork of

various

programs.

In illinois and

elsewhere,

numerous permits

for separate or discrete

pollutant-emitting activities would ofted exist for an individual source ofmajor emissions

and they frequently did not address the applicability ofall other CAA or state (i.e., State

Implementation Program (“SIP”)) requirements.5

The Title V operating permit program

ensured that all of a major source’s applicable state and CAA-related requirements would

be brought together into a single, comprehensive document.

In doing so, the legislation

sought to minimize the confusion brought about from the absence ofa uniform federal

permitting system.9

By hying to breath life into the State operating permits beyond the

date ofthe Illinois EPA’s permit issuance, Petitioner’s argument would actually prolong

one ofthe veiyproblems that theTitle V permitting scheme was meant to remedy.

As a

practical

mailer,

Petitioner’s requested relief belies the notion that former State operating permits

continue to govern the

1~ci1ity’s

operations until

the

Board

issues its final ruling

in

this

cause.

After

all,

it

is the

CAAPP

permit issued by the

Illinois EPA from which the Petitioner is seeking a stay.

See,

David P. Novello,

The

New Clean

Air Act Operating Pennit

Program. EPA

‘s Final Rules,

23

Environmental Law Reporter

10080,

10081-10082 (February 1993).

~

Id.

13

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ELECTRONIC FILING,

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Petitioner also mentions

in passing that the Illinois EPA’s failure to provide a

sufficient statementofbasis for the CAAPP permit is another reason

for

staying the entire

permit.

Petition at page

7.

Because Petitioner treats this

issue separately in its Petition,

the illinois EPA will not fully address the merits of the argument in this Motion.

However, the Illinois EPA will briefly respond to the issue as it relates to the Petitioner’s

request for stay.

The statement ofbasis envisionedby the statute is

an informational

requirement

that is meant to facilitate both the public and USEPA’s understandingofthepermit

decision in the draft phase of permitting.

See,

415 ILCS 5/39.S(’8)(b)(’2004).

It is not a

part

of,

nor does

it

otherwise

affect, the content ofthe CA.APP

permit

and

it

does not bind

or impose legal consequences in the same manner that a pennit itself does. The flhinois

EPA generally does not believe that any perceived inadequaeies in the statement ofbasis

can lawfiully render the entire CAAPP permit defective.

In this instance, the Petitioner identified its grievances with respect to the CAAPP

permit’s conditions notwithstanding the alleged flaws in the underlying statement of

basis.

To the extent that

something contained in a statement of

basis is found

objectionable, or is left out altogether, the illinois EPA suggeststhat the mechanism

for

challenging it runs

to the underlying

permit

condition, not the statement itself.

The

Petitioner should not be heard to complain of the inadequacies ofthe statement when the

basis that gives rise to the appeal stems from

a permit’s conditions, not the deliberative

thought-processes ofthe permitting agency.

As such, the Illinois EPA does not construe

a statementofbasis as affecting the validity ofthe final CAAPP permit nor as a reason

for voidingthe illinois EPA’s final permit decision.

Ifsuch challenges were recognized

14

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ELECTRONIC

by

the Board,

they

could

serve as a pretext for

preventing

the final issuance ofa CAAPP

permit and result in perpetual litigation

over

a largely ministerial

agency

function.

The Illinois EPA is ultimatelyprepared to

argue that the statement ofbasis that

was prepared in conjunction with the

CAAPP

permit was sufficiently adequate as to

comply with the Act.

Alternatively, the Illinois EPA is prepared to contend that the

statement ofbasis requirement is predominantly procedural in nature, is confined to the

preliminary stages ofthe permitting process and arguably lacks sufficiently intelligible

standards

as to

serve as a basis for enforcement.

In any event, the Board should deny the

Petitioner’s request for stay on any grounds relating to this issue.

On the whole, the

Petitioner’s charge that the statement ofbasis affects the entire permit

is unsupported by

law and

fails to demonstrate a probability of success on themerits

of

the controversy.

iii.

Significance of priorBoard rulings

The Board has granted numerous stays in past and pending CAAPP permit

proceedings.

For the most part, the extent ofthe relief grantedhas been a function ofthe

relief sought by the petitioning

party.

In several cases, the Board has granted stays

of the

entire CAMP

permit,

usually doing so withoutmuch

substantive discussion.’0

Curiously,

all excepting one ofthe prior cases involving blanket stays were brought

by

petitioning

parties represented by the

same law firm.

In other CAAPP appeal cases, the

Board

granted stays

for the

contested permit conditions, again mirroring the relief sought

‘°

See, Lone Star

Industries,

Inc.,

v. illinois EPA,

PCB

No.

03-94, slip opinion at 2, (January 9

2003);

Nielsen

v.

Bainbridge.

L.L.C.,

v.

illinois

EPA,

PCB No. 03-98, slip

opinion

at 1-2

(February

6, 2003);

Saint-Gobain

Containers, Inc.,

i’.

illinois EPA,

I’CB

No.

0447,

slip opinion at 1-2 (Novembe

6,

2003);Champion Laboratories,

Inc.,

v. illinois

EPA,

ICR

No. 04-65, slip opinion at

I

(January 8, 2004);;

Midwest Generation,

L.L.C.,

v. Illinois EPA,

‘CR

No.

04-108, slip opinion

at

I

(January

22,

2004);

Ethyl

Petroleum Additives. Inc.,

v. Illinois EPA,

slip

opinion at

1

(February 5,

2004);

Boardof

Trustees

of

Eastern illinois University v.

Illinois

EPA,

PCB No.04-110,

slip

opinion

at

1

(February

5,2004).

15

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by the petitioning

party.”

In

a few

cases, the Board does not appear

to have granted any

stay protection whatsoever, asthe petitioning party apparently opted not

to

pursue such

relief.’2

In the majority oftheafore-referenced cases, the Illinois

EPA did

not actively

participate in the stay motions sought before the Board due to the perennially-occurring

press

of

othermatters.t3

In

doing so, the Illinois

EPA clearly waived any rights

to voice

objections to the stays sought and obtained in those cases.

Evenin the absence of a lack

ofresources, it is doubtful that the Illinois EPAwould have articulated weighty concerns,

as presently argued, with respect to the stay relief requested in earlier

cases.

However,

following the Board’s last occasion to

act on a blanket stay request in a CAAPP permit

appeal, Illinois EPA officials became aware ofthe potential implications posed by stays

on the existing Title Vprogram

approval.’4

In the wake of this discovery, the illinois

EPA is now compelled to observe that the Board’s earlier decisions affording blanket

stays to CAAPP permits arguably fell short of exploring all ofthe relevant considerations

°

See, Br!dgestone/Firestone 0ff-road Tire Company v.

Il/moLt

EPA,

PCB 02-31 at page 3 (November

1,

2001);

PPG

Industries,

Inc.,

v. illinois EPA,

PCB No. 03-82, slip

opinion

at

1-2

(February

6,

2003);

Abitec

Corporation

v.

Illinois EPA,

‘CR

No. 03-95, slip

opinion

at 1-2

(February

20,

2003);

Noveon, Inc.,

v.

Illinois

EPA,

‘CR

No. 04-102, slip

opinion

at 1-2

(January

22,

2004);

Oasis

Industries,

Inc.,

v. illinois

EPA,

PCB No. 04-116, slip opinion at

1-2

(May 6,

2004).

12

See,

XCTC

Limited Partnership,

v.

Illinois

EPA,

‘CR

No. 01-46,

consolidated with

Georgia-Pac(pIc

Tissue, ILL. C,

v.

illinois EPA,

‘CR

No.

01-5!;

General

Electric

Company v.

Illinois EPA,

‘CR

No. 04-

ItS

(January 22,2004).

‘~

The Illinois EPA did file a joint motion in support of a stay request seeking protection for contested

conditions of

a

CAAPP permit.

See,

Abitec Corporation

v.

illinois EPA.

PCBNo. 03-95, slip opinion at 1-

2

(February 20, 2003).

~

Jim Ross, a

former

Unit Manager for the CAAPP Unitof the Division of Mr Pollution Control’s

Permits Section, received an

inquiry

from a USEPA/Region V representative in March

of 2004 pertaining

to the broad nature of the stays

obtained in CAAPP permit appeal proceedings before the Board.

This

initial

inquiry

led to further discussion between USEPA/Region V representatives and the Illinois EPA

regarding the

impact ofsuch stays

on

the

severability requirements for CAAPP permits set forth in 40

C.F.R. Part 70 and the

Illinois CAAPP.

(See,

Supporting

Affidavit ofJim Ross attacliedto this Motion).

16

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necessary

to

the analysis.

Accordingly, the illinois EPA

urges the

Board to

reflect upon

additional factors

thathave

not previously

been

addressed to

date.’5

iv.

Statutory

objectives

of CAAPP and common attributes ofpermit

appeals

As

discussed earlier

in this Motion, theIllinois

CAAPP commands the Illinois

EPA to

incorporate

conditions into

a

CAAPP permit that address requirements

concerning

the “severability”

of

permit

conditions.

See,

415 ILCS5/39.5(7,1(0(2004).

To

this end,

every

CAAPP permit is

required

to contain

a permit condition severing those

conditions challenged in a subsequent permit appeal from

the

otherpermit conditions in

the pennit.

The

severability

provision is prominently displayed in the Standard Permit

Conditions ofthe Petitioner’s CAAPP

permit.

See, Standard Permit Condition 9.13.

It

should also be noted that the language from theAct’s CAAPP program mirrors the

provision promulgated by USEPA in its regulations implementing Title V ofthe CAA.

See,

40 C.F.R.

§70.6(a)(5)(July

1, 2005 edition).

As is evident

from

the statutory language, the obvious legislative intent for this

CAAPP provision is to “ensure the continued validity” ofthe ostensibly larger body of

permitting requirements that are not being challenged on appeal.

The useof the word

“various” in describing those conditions that are severable is especiallyimportant when

compared with the later reference in the same sentence to “anyportions” of thepermit

that are contested.

Because the commonly understood

meaningofthe adjective

“various” is “ofdiverse kinds”

or “unlike; different,”

this wordingdemonstrates

a

legislative intent to contrast

one

discemable group of permit conditions (i.e., uncontested

~

It is noted that the Board’s prior rulings regarding blanket stays

of CA.APP

permits

have been granted

contingent upon the Board’s

final

action

in

the appeal or

“until

the Board orders otherwise.”

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FILING, RECEIVED, CLERK’S OFFICE,

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conditions) from the other another

(i.e.,

contested conditions).

See,

The American

Heritage Dictionary, Second College Edition; see also,

Webster’s New WorldDictionary,

Third College Edition

(describing primary use ofthe term as “differing one from another;

ofseveral kinds”).

Given the clear absence of ambiguity with this statutory

text, no other

reasonable meaning can be attributed to its language.

The Illinois EPA readily concedes that the permit content requirements ofthe

CAA and the Illinois CAAPP are not directlybinding on the

Board.

However, while the

Illinois EPA’s mandate under Section 39.5(7)(i) ofthe Act’s

CAAPP program does not,

on

its

face, affect

the Board, the provision could arguably be read as a limited

restriction

on the Board’s discretionary stay authority in CAAPP

appeals.’6

Implicit in

the statutory

language is an unmistakable expression aimed at preserving the validity and effectiveness

ofsome segment ofthe CAAPP

permit

during

the

appeal process.

This legislative goal

cannot

be achieved if blanket stays are the convention.

Where the

obvious

intention of

lawmakers could

be thwarted, reviewingcourts must construe a statute in a manner that

effectuates its object and purpose.

See, F.D.LC.

v.

Nihiser,

799 F.Supp. 904

(C.D. Ill.

1992);

Castaneda

v. illinois Human Rights Commission,

547

N.E.2C1

437

(Ill.

1989).

In

this instance, the Board should recognize an inherent limitation ofits stay authority by

virtue of

the illinois

CAAPP’s severability provision.

At the

very least, the existence of

the provision should give pause to the Board’s recent approach in evaluating stays in

CAAPP permit appeals.

16

Any such restriction

may

notbe absolute, as the Act’s permit

content requirement does not necessarily

nile

out the potential

merits of a blanket

stay

where a

permit is

challenged in

its entirety.

As previously

mentioned, the

Illinois EPA

disputes

the

merits of Petitioner’s argument relating to a purported deficiency

in the CAAPP

permit’s

statement of basis.

18

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It is

noteworthy that one ofthe chief goals ofthe CAA’s Title V program is to

promote public participation, including the use ofcitizen suits to facilitate compliance

through enforcement.’7

The severability requirement ofthe Part 70 regulations, which

formed theregulatory basis for Section 39.5(7)(i) ofthe Illinois

CASk??,

can be seen as

an extension ofthis endeavor.

Blanket stays ofCAAPP permits could arguably lessen

the opportunities for citizen enforcement in an area that is teeming with broad public

interest.

Moreover,

the cumulative effect of stays sought by Petitioner and other coal-

fired

CAAPP

pennittees in other appeals would cast a wide net.

Blanket stays ofthese

recently-issued

CAAPP

permits

would effectively shield ~n entire segment ofIllinois’

utilities sector from potential

enforcementbased

on Title V

permitting,

which•was meant

to

provide

a more convenient, efficient mechanism for the public

to seek CAA-related

enforcement.

One last consideration in this analysis is the deliberate, if not time-consuming,

pace ofpermit appeals in general.

From past experience, the Illinois EPA has observed

that many permit appeals are of a type that could more aptly

be

described as “protective

appeals.” These types of appeals are frequently filed because a particular permit

condition affects an issue relating to

on-going or future enforcementproceedings.

Alternatively,

these cases may entail some other kind ofcontingency necessitating

additional permit review, a new permit application andlor

obtaining

a revised permit from

the illinois EPA.

Only rarely does a permit appeal actually proceed to hearing.

Based on the Illinois EPA’s estimation, nearly all ofthe CASk?? permit appeals

filed with theBoard to date could be aptly described as “protective appeals.”

While

a

‘~

See,

David P. Novello,

The New

Clean Air Act Operating Permit Program: EPA

‘s Final Rules,

23

Environmental

Law Reporter

10080,

10081-10082

(February 1993).

19

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FILING, RECEIVED, CLERK’S OFFICE,

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18, 2005

handful of cases have been voluntarily dismissed from theBoard’s docket, several of

these cases are, and will remain,

pending

with

theBoard for

months

and/or years

to

come, in part, because there is

no ability to resolve them independent oftheir related

enforcement or permitting developments.

A.s theillinois EPA is often an obligatory

participant in many ofthese types of cases, this argument is not meant

to condemn the

practice.

Rather, the relevant point is that

significant portions ofa CA.APP permit stayed

in its entirety willbe delayed from taking effect, in spite ofbearingno relationship to the

appeal or its ultimate outcome.

To allow this under circumstances where petitioning

parties seldom appear to

desire their “day in court” strikes the Illinois EPA as needlessly

over-protective.

CONCLUSION

For the reasons explained above, the Illinois EPA moves the Board to deny the

Petitioner’s request for a stay ofthe effectiveness of the CAAPP permit in its entirety.

Respectfully submitted by,

ILLINOIS ENVIRONMENTAL

•

PROTECTION AGENCY,

Robb

H. Layman

Assistant Counsel

Dated: November

18, 2005

Illinois Environmental Protection Agency

1021

North Grand Avenue East

P.O. Box

19276

Springfield, illinois 62794-9276

(217)524-9137

20

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STATE

OF

ILLINOIS

COUNTY OP SANGAMON

.

•.

•

•

AFFIDAVIT

I,

Jim Ross, being first duly sworn, depose and state that the following statements

set forth in this instrument are hue and correct, except as to matters therein stated to

on

information and belief and, as to such matters, the undersigned certifies that he believes

the same to be hue:

1.

•

I am

currently employed by the Illinois Environmental Protection Agency

(“illinois EPA”) as aSenior Public SeMèáAdminisfrator professional engineer.

During

the early part of2004,

1 was the Manager ofthe Clean Mr Act Permit Program

(“CAAPP”) Unit in the Division ofAirPoI1uti~n

Control’s Permit Section, whose offices

are located at

1021 North Grand Avenue East, Springfield, Illinois.

I have been

employed

with the Illinois EPA since May 1988.

2.

As part ofmy job responsibilities, I participated in

frequent teleconference

calls with representatives from the United States Environmental Protection Agency

(“USEPA”) at~

Region V in Chicago, Illinois, involving various ~,endingCAAPP permit

applications and issues pertaining to the administration ofthe CA.APP program.

By

virtue ofmy involvement

in the CAAPP permit reviewprocess, I am familiar with

communications between USEPAJRegi0n V and the flhinois EPA in March of2004

concerning an issue relating to

stays

obtained in CAAPP permit appeals befót~

the

illinois Pollution

Control Board.

The issue was initially raised

by

a

representative from

USEPA/Region V, who expressed concern about the impact ofsuch stays upon th~.

•

severabilityrequirements of

40

C.F.R.

Part

70

and the Illinois

CAAPP.

3.

1 have read the Motion prepared by the illinois EPA’s

attorneys

relating to

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18, 2005

this matter and, further,

find that the facts set forth in said responses and answers are true,

responsive and complete to thebest ofmy knowledge and belief.

~sayet~

Subscribed and Sworn

To Before Me this ~(Day

ofNovember 2005

oe~&nJ(

~

f

BRENDA BOEHNER

:

t

PCTARYPWUC.srAmocIuaOfl

MY

cosaus$tN

ta~Aaaa~4o444444

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CERTIFICATE OF_SERVICE

I hereby certify that on the

18th day ofNovember 2005, I did send, by electronic

mail with prior approval, the followinginstruments entitled APPEARANCES,

MOTION IN OPPOSITION TO PETITIONER’S REQUEST FOR STAY and

AFFIDAVIT to:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, illinois

60601

and a true and correct copy ofthe same foregoing instrument, by First Class Mail with

postage thereon fully paidand deposited into the possession ofthe United States Postal

Service, to:

Bradley P. Halloran

Sheldon A. Zabel

Hearing Officer

Kathleen

C. Bassi

James

R. Thompson Center

Stephen J. Bonebrake

Suite

11-500

Joshua R. More

100 West Randolph

Street

Kavita M. PatS

Chicago, Illinois

60601

SchiffHardin, LLP

6600

Sears

Tower

233

South Wacker Drive

Chicago, illinois 6060

Robb H. La~an

Assistant Counsel