1
    1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
    2
    3 IN THE MATTER OF: )
    4 )
    5 PROPOSED AMENDMENTS TO 35 ILL. ) R-01-16
    6 ADM CODE 217, SUBPART V, )
    7 ELECTRIC POWER GENERATION. )
    8
    9
    10
    11
    12 The following is a transcript of the
    13 above-entitled cause taken before TERRY A. STRONER,
    14 CSR, a notary public within and for the County of
    15 Cook and State of Illinois before HEARING OFFICER
    16 BOBB BEAUCHAMP, at Room 9-040, 100 West Randolph
    17 Street, Chicago, Illinois, on the 28th day of
    18 November, A.D., 2000, commencing at 11:10 o'clock
    19 a.m.
    20
    21
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    24

    L.A. REPORTING (312) 419-9292
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    1 A P P E A R A N C E S:
    2 ILLINOIS POLLUTION CONTROL BOARD,
    100 West Randolph Street
    3 Suite 11-500
    Chicago, Illinois 60601
    4 (312) 814-6926
    BY: BOBB BEAUCHAMP, HEARING OFFICER
    5
    6 POLLUTION CONTROL BOARD MEMBERS:
    Marili McFawn, Dr. Ronald Flemal, Kathy Glenn,
    7 Alicia Liu, Joel Sternstein
    8 ILLINOIS ENVIRONMENTAL PROTECTION AGENCY:
    Vera Herst, Robert Sharpe, Robert Kaleel,
    9 Dennis Lawler, Yoginder Mahajan, Berkley Moore,
    10 Christopher Romaine, Laurel Kroack
    11
    12 OTHERS WERE PRESENT BUT NOT LISTED ON THIS
    13 APPEARANCE PAGE.
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    L.A. REPORTING (312) 419-9292
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    1 THE WITNESSES:
    2
    3 TESTIMONY OF DENNIS LAWLER............. 14-32
    4 TESTIMONY OF ROBERT KALEEL............. 32-53
    5 TESTIMONY OF BERKLEY MOORE............. 54-62
    6 TESTIMONY OF YOGINDER MAHAJAN.......... 63-79
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    L.A. REPORTING (312) 419-9292
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    1 HEARING OFFICER BEAUCHAMP: Good morning. My
    2 name is Bob Beauchamp and I'm the hearing officer in
    3 this proceeding. I'd like to welcome you to this
    4 hearing being held by the Illinois Pollution Control
    5 Board in the matter of Proposed Amendments to 35
    6 Illinois Administrative Code 217, Subpart V,
    7 Electric Power Generation.
    8 Today's hearing is the first day of the
    9 first of three scheduled hearings in this
    10 rulemaking. Present today on behalf of the Illinois
    11 Pollution Control Board and seated to my right is
    12 Board member Marili McFawn, the Board member
    13 coordinating this rulemaking and on my left is Board
    14 member Dr. Ronald Flemal. Also, present today are
    15 several members of the Board's staff starting with
    16 Dr. Flemal's left is Kathy Glenn, Dr. Flemal's
    17 assistant, starting from Board member McFawn's right
    18 we have Alicia Liu of the Board's technical staff
    19 and on her right Joel Sternstein, attorney assistant
    20 to Board member Nicholas Melas.
    21 We have placed copies of the notice and
    22 service list sign-up sheets in addition to current
    23 copies of the notice and service lists by the table

    24 by the entrance. Please note that if your name is
    L.A. REPORTING (312) 419-9292
    5
    1 on the notice list you will only receive copies of
    2 the Board's opinions and orders and all hearing
    3 officer orders. If your name is on the service list
    4 not only will you receive copies of the Board's
    5 opinions and orders and all hearing officer orders,
    6 but you will also receive copies of all documents
    7 filed by all persons in this proceeding. However,
    8 also keep in mind that if your name is on the
    9 service list, you are also required to serve all
    10 persons on the service list with all documents you
    11 file with the Board.
    12 Copies of the Board's October 19th, 2000,
    13 opinion and order containing the proposed rule and
    14 the October 27th, 2000, hearing officer order are
    15 also located by that table. In addition, you will
    16 also find copies of the Agency's prefiled testimony
    17 there.
    18 On October 16th of 2000, the Illinois
    19 Pollution -- excuse me, the Illinois Environmental
    20 Protection Agency filed this proposal for a
    21 rulemaking to amend 35 Illinois Administrative Code,
    22 Part 217, Subpart V, Electric Power Generation.

    23 On October 19th of 2000, the Board adopted
    24 the first notice of the Agency's proposal. This
    L.A. REPORTING (312) 419-9292
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    1 proposal was published in the Illinois Register on
    2 November 3rd, 2000, at page 16,200. This proposal
    3 was filed pursuant to Section 28.5 of the
    4 Environmental Protection Act entitled Clean Air Act
    5 Rules Fastrack. Pursuant to Subsection (g) of that
    6 section, the Board is required to proceed within set
    7 time frames for the adoption of this regulation. As
    8 stated in the Board's October 19th, 2000, opinion,
    9 the Board has no discretion to adjust these time
    10 frames under any circumstances.
    11 Pursuant to Section 28.5 of the act, the
    12 Board scheduled three hearings. As announced in the
    13 October 27th of 2000 hearing officer order today's
    14 hearing is confined to testimony by the Agency
    15 witnesses concerning the scope, applicability and
    16 basis of the rule. Pursuant to Section 28.5, this
    17 hearing will begin today and continue on the record
    18 from day-to-day if necessary until completed.
    19 The second hearing is currently scheduled
    20 for Tuesday, December 19th, 2000, at 11 a.m. in Room
    21 9-040 of the James R. Thompson Center in Chicago.

    22 That's this room that we're sitting in. It will be
    23 devoted to economic impact considerations and
    24 presentation of testimony, documents and comments by
    L.A. REPORTING (312) 419-9292
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    1 affected entities and all other interested parties.
    2 Prefiling deadlines for the second hearing may be
    3 found on the October 27th, 2000, hearing officer
    4 order.
    5 The third hearing currently is scheduled
    6 for Tuesday, January 2nd, 2001, at 11 a.m. in Room
    7 9-040 of the James R. Thompson Center, again, here
    8 in Chicago. It will be devoted solely to any Agency
    9 response to the material submitted at the second
    10 hearing. The third hearing will be canceled if the
    11 Agency indicates to the Board that it does not
    12 intend to introduce any additional material. If the
    13 third hearing is canceled, all persons listed on the
    14 notice list will be so advised through a hearing
    15 officer order.
    16 As stated in the October 19th, 2000,
    17 opinion, the Board is holding today's hearing
    18 consecutively with the hearings in Docket No. R01-17
    19 in the matter of Proposed New 35 Illinois
    20 Administrative Code 217, Subpart U, NOx Control and

    21 Trading Program for Specified NOx Generating Units,
    22 Subpart X, Voluntary NOx Emissions Reduction Program
    23 and Amendments to 35 Illinois Administrative Code
    24 211.
    L.A. REPORTING (312) 419-9292
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    1 The hearing in R01-17 is scheduled to
    2 begin at 9:30 tomorrow in this room. In the event
    3 that today's hearing carries over into tomorrow, the
    4 hearing for R01-17 will begin at the conclusion of
    5 this hearing. However, we do not anticipate that
    6 today's hearing will require more than this
    7 afternoon to complete.
    8 Today's hearing will be governed by the
    9 Board's procedural rules for regulatory proceedings.
    10 All information which is relevant and not repetition
    11 or privileged will be admitted. All witnesses will
    12 be sworn and subject to cross questioning.
    13 Again, the purpose of today's hearing is
    14 to allow the Agency to present testimony in support
    15 of this proposal and to allow questioning of the
    16 Agency. The Agency will present any testimony it
    17 may have regarding this proposal.
    18 At the conclusion of the Agency's
    19 testimony, we will allow for questioning of the

    20 Agency regarding its testimony. I would prefer that
    21 during the questioning period any person wishing to
    22 ask a question would raise their hand and wait for
    23 me to acknowledge you. Once I have recognized you,
    24 if you could please state your name and the
    L.A. REPORTING (312) 419-9292
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    1 organization you represent, if any, before
    2 proceeding with your question.
    3 Are there any questions regarding the
    4 procedure we will follow this afternoon? All right.
    5 Seeing none, I'd like to go off the record for a
    6 moment and discuss our break schedule and when we're
    7 going to break for lunch, if we may.
    8 (Whereupon, a discussion
    9 was had off the record.)
    10 HEARING OFFICER BEAUCHAMP: While off the
    11 record we just discussed our lunch plans. We're
    12 going to try to press through with the Agency
    13 testimony and complete that before we break for
    14 lunch and possibly reconvene this afternoon if we
    15 need to.
    16 At this time I'd like to ask Board member
    17 McFawn if she has anything else she would like to
    18 add to my comments?

    19 MS. McFAWN: Just a few comments. I would like
    20 to thank the Agency for bringing such a wonderful
    21 panel to this hearing. It's a great collection of
    22 their Bureau of Air and we have a pretty large task
    23 in front of us. We have two rulemakings, not one,
    24 and we are discussing three subparts, not one, and
    L.A. REPORTING (312) 419-9292
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    1 we hope to do so in the next three days and then
    2 another set of hearings of three days and a third
    3 hearing in January if need be. So we are doing
    4 things in sets of three, aren't we?
    5 With your help and through questions from
    6 the participants in this rulemaking here in the
    7 audience with us, I hope that we can make a clear
    8 record as to how these three subparts will work in
    9 the Board's air rule regulations as they stand alone
    10 and also in the context of the current -- the NOx
    11 rules that are currently at second notice, that
    12 would be R01-9, which was sent a second notice under
    13 the direction of Dr. Flemal just last Board meeting,
    14 and we also have pending before the Board another
    15 NOx rulemaking having to do with cement kilns and
    16 that is under direction of member Melas and that is
    17 currently only at first notice, but it is my hope

    18 that we can make clear on the record how all these
    19 NOx rules work individually and collectively. With
    20 your help, I'm sure we can do that. Thank you again
    21 for coming. In advance I want to thank you because
    22 I know it will be a hard set of hearings.
    23 HEARING OFFICER BEAUCHAMP: Thank you, Board
    24 member McFawn. At this time, Ms. Herst, do you have
    L.A. REPORTING (312) 419-9292
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    1 an opening statement?
    2 MS. HERST: Yes, I do. I'd like to say good
    3 morning to everyone --
    4 MS. McFAWN: Good morning.
    5 MS. HERST: -- hearing officer, the Board,
    6 regulating committee, we're pleased to see everyone
    7 here today. A slightly smaller group than for
    8 Subpart W, which is also fine. I'd like to
    9 introduce myself and the representatives of the
    10 Agency here today. I'm Vera Herst, assistant
    11 counsel in the division of legal counsel, to my left
    12 is Dennis Lawler, who is manager of the division of
    13 air pollution control, to his left is Robert Kaleel,
    14 who is manager of the air quality modeling unit, and
    15 to Mr. Kaleel's left is Yoginder Mahajan, who is in
    16 the air quality planning section and then to my

    17 right is Robert Sharpe, deputy counsel, Bureau of
    18 Air, to his right is Berkley Moore, who is in the
    19 air quality planning section, Christopher Romaine,
    20 who is manager of the utilities unit in the permit
    21 section who is sitting kind of behind me and the
    22 other person trying to hide in the back is
    23 Mr. Forbes, who is manager of the ozone regulatory
    24 unit.
    L.A. REPORTING (312) 419-9292
    12
    1 As Hearing Officer Beauchamp stated, the
    2 Agency is proposing amendments to Subpart V of 35
    3 Illinois Administrative Code, Part 217. These
    4 amendments are proposed to control the emissions of
    5 nitrogen oxides or NOx as we will refer throughout
    6 this proceeding and they will control -- proposed to
    7 control the emissions during the control period of
    8 May 1st through September 30th of each year
    9 beginning in 2003. The proposed amendments are
    10 intended to meet Illinois' obligation under the
    11 Clean Air Act to submit control strategies necessary
    12 to demonstrate attainment in the one-hour ozone
    13 standard ozone of National Ambient Air Quality
    14 Standards for the Metro-East/St. Louis moderate
    15 ozone nonattainment area. These proposed amendments

    16 are also intended to address concerns related to
    17 litigation that could result in a bump up of the
    18 Metro-East/St. Louis area from a moderate to a
    19 serious nonattainment area.
    20 And at this time I would like to submit
    21 the prefiled testimony of Mr. Lawler and Mr. Kaleel
    22 into the record as if read.
    23 HEARING OFFICER BEAUCHAMP: Thank you.
    24 MS. HERST: They will be presenting truncated
    L.A. REPORTING (312) 419-9292
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    1 versions of their testimony and will also be using
    2 overheads and at the end of their testimony I will
    3 submit copies of their overheads into the record.
    4 Mr. Moore and Mr. Mahajan will be reading
    5 their testimony into the record. I have provided
    6 copies of the overheads to Board members, Hearing
    7 Officer Beauchamp and the court reporter. There are
    8 additional copies of the testimony and overheads
    9 available on the table to the audience's left.
    10 Mr. Romaine and Mr. Forbes will not be
    11 testifying, but will be available to answer
    12 questions during the comment and question period as
    13 appropriate. With that, I turn the proceedings back
    14 to you, Mr. Beauchamp.

    15 HEARING OFFICER BEAUCHAMP: Thank you,
    16 Ms. Herst. You move to admit the prefiled testimony
    17 of Mr. Kaleel and Mr. Lawler into the record so we
    18 will mark the testimony of Mr. Kaleel as Exhibit 1
    19 and the testimony of Mr. Lawler as Exhibit 2. We'd
    20 also like to mark the copies of the overheads that
    21 you submitted as 1A and 2A so that when we refer to
    22 them during your presentations and admit them into
    23 the record.
    24 MS. McFAWN: So that would mean the one
    L.A. REPORTING (312) 419-9292
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    1 entitled One-Hour Ozone Attainment Demonstration
    2 St. Louis Nonattainment Area by Rob Kaleel dated
    3 November 28th, 2000, would be marked as Exhibit 1A
    4 and EGU Rulemaking Proposal by Dennis Lawler would
    5 be marked as Exhibit 2A?
    6 HEARING OFFICER BEAUCHAMP: 2A.
    7 MS. McFAWN: Thank you.
    8 HEARING OFFICER BEAUCHAMP: Very good. At this
    9 time I ask the Agency if you'd like to offer any
    10 testimony then?
    11 MS. HERST: Mr. Lawler will begin.
    12 HEARING OFFICER BEAUCHAMP: You may begin after
    13 you're all sworn in. We will have the court

    14 reporter swear the witnesses in as a panel.
    15 THE REPORTER: Do you all swear to tell the
    16 truth, the whole truth and nothing but the truth so
    17 help you God?
    18 THE WITNESSES: We do.
    19 HEARING OFFICER BEAUCHAMP: Very good.
    20 Mr. Lawler, proceed with your testimony, please.
    21 MR. LAWLER: Good morning. I've done a series
    22 of overheads that I'm going to use this morning and
    23 they're also available back on the table for
    24 everybody to get a copy of. A lot of these folks
    L.A. REPORTING (312) 419-9292
    15
    1 have already been at earlier hearings, there's
    2 familiar faces on the Board side and familiar faces
    3 in the crowd so a few things I'm not going to spend
    4 much detail on. There's a few things that are
    5 unique to this particular rulemaking that I'll spend
    6 a little bit more time, but I'll try to go through
    7 it all in a fairly succinct fashion.
    8 The purpose of my testimony this morning
    9 is to explain the purpose of the rulemaking itself
    10 and then to give you a little bit of detail on the
    11 development of the proposal. There is a lot of
    12 background in all this, but I'm going to try to

    13 summarize it just as much as possible in going
    14 through this.
    15 It also would be probably good to mention
    16 that EGU that -- for those of you that haven't been
    17 at earlier hearings or involved in any of the
    18 processes the last couple of years stands for
    19 electrical generating unit. Generally, it's
    20 associated with electric utilities. NOx that you
    21 already heard this morning, nitrogen oxides, you
    22 will hear the term used and as we go through the
    23 rest of it we'll try to define the terms that you
    24 may hear during the rulemaking. You'll also hear us
    L.A. REPORTING (312) 419-9292
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    1 refer to this as Subpart V and it might be worth
    2 just taking a second to mention, Subpart W is the
    3 rulemaking that -- you'll hear us refer to Subpart W
    4 and that's the rulemaking that had to do with the --
    5 the other rulemaking that had to do with utilities,
    6 that's at second notice now. Subpart T, that's the
    7 Subpart that deals with cement kilns and Subparts U
    8 and X and they're the ones that address the
    9 non-EGUs, nonutility components of the NOx SIP Call
    10 and again, I'll just mention those now and you'll
    11 probably hear us use those terms for the next hour

    12 or so as we talk about things.
    13 The purpose of this rulemaking is to
    14 satisfy the obligations of the state to submit the
    15 control strategies to demonstrate ozone attainment
    16 for the Metro-East area.
    17 The second purpose is to address concerns
    18 relating to a potential bump up of the Metro-East
    19 area because of a lawsuit that was filed in the U.S.
    20 District Court for the District of Columbia. The
    21 state's intent -- initially, we had intended --
    22 MR. RIESER: Excuse me, Mr. Lawler.
    23 MR. LAWLER: Yes.
    24 MR. RIESER: Mr. Lawler, Mr. Hearing Officer, I
    L.A. REPORTING (312) 419-9292
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    1 notice this issue come up in the Subpart W in the
    2 hearing. It will be useful if the witnesses -- I
    3 think for purpose of the record the witnesses could
    4 refer to the fact that they're changing slides --
    5 MR. LAWLER: Oh, good point.
    6 MR. RIESER: -- and either identify the heading
    7 of the slide or the number of the slide or something
    8 so that somebody following the transcript and
    9 looking at the exhibit will know which slide they're
    10 referring to as part of their presentation. I don't

    11 mean to burden the presentation, but it's easier
    12 when you're looking at the transcript.
    13 MR. LAWLER: No, that's no burden. That's a
    14 good point.
    15 MS. McFAWN: Mr. Rieser, could you identify
    16 yourself for the record?
    17 MR. RIESER: Mr. Rieser with the law firm of
    18 Ross & Hardies and I'm here on behalf of Ameren
    19 Corporation.
    20 MS. McFAWN: Thank you.
    21 MR. LAWLER: This particular chart is the third
    22 one in Exhibit 2A and it's entitled State Intent for
    23 Metro-East. Again, on this one -- at this point we
    24 have intended to address attainment for Metro-East
    L.A. REPORTING (312) 419-9292
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    1 through the NOx SIP Call portion rulemaking that
    2 dealt with EGUs and this is the rulemaking that we
    3 would call Subpart W. This was submitted to the
    4 Board last July and is going through the process
    5 right now.
    6 In late August -- on August 30th, the U.S.
    7 Court of Appeals, D.C. Circuit, changed the SIP Call
    8 date -- the effective date of the SIP Call or the
    9 compliance date from 2004 -- from 2003 to 2004 and

    10 because that was done, we now need Subpart W to
    11 address this change that was brought about by a
    12 Court decision.
    13 MS. McFAWN: Mr. Lawler, did you mean Subpart V
    14 or Subpart W?
    15 MR. LAWLER: Subpart V is the last one I
    16 referred to. Did I say subpart W?
    17 MS. McFAWN: That's fine. Thank you.
    18 Also, can I ask you a question, when you
    19 refer to the court case in the D.C. Circuit, are you
    20 referring to Michigan versus EPA as it's commonly
    21 referred to?
    22 MR. LAWLER: Yes.
    23 MS. McFAWN: Thank you.
    24 MR. LAWLER: The next overhead is entitled the
    L.A. REPORTING (312) 419-9292
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    1 Two EGUs Rulemakings and it's intended to help
    2 people to distinguish between Subpart W rulemaking
    3 and this Subpart V rulemaking.
    4 First of all, Subpart W is a NOx trading
    5 program for EGUs and is generally considered to be
    6 one that will be multi-state in nature. It has a
    7 state NOx budget in it and the budget is based on a
    8 limit of .15 pounds per million BTU applied to all

    9 the BTUs, but it is a state-wide budget. It's based
    10 on the NOx SIP Call -- the requirements of the NOx
    11 SIP Call and intended to meet the requirements of
    12 the NOx SIP Call and the compliance date for Subpart
    13 W is now May 31st, 2004.
    14 Subpart V, which is the subject of this
    15 particular rulemaking, is a rate-based rule for EGUs
    16 and that rate-based limit is .25 pounds per million
    17 BTU and it has state-wide applicability. It's also
    18 to address attainment, as I mentioned earlier, and
    19 address the bump up possibility in the Metro-East
    20 and the compliance date is May 1st, 2003.
    21 So that's kind of the overall purpose for
    22 this particular rulemaking. I think this will help.
    23 You have copies of these overheads. This particular
    24 one is entitled Ozone Formation Process and it's
    L.A. REPORTING (312) 419-9292
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    1 here to illustrate that ozone is formed through a
    2 chemical process that involves generally nitrogen
    3 oxide emissions and volatile organic materials.
    4 When those materials are heated like in the
    5 summertime on very hot days, you get ozone formation
    6 and the sources of emissions for those particular
    7 materials are industrial sources, mobile source, the

    8 common cars that everybody has, and normal products
    9 that we use around the house. A lot of those also
    10 emit VOCs. Also, it's worth mentioning that you'll
    11 hear us use the term VOCs and VOMs sort of
    12 interchangeably. VOCs are volatile organic
    13 compounds. VOM is volatile organic materials and
    14 again we end up using the terms pretty much
    15 interchangeably.
    16 I always have to put this chart here for
    17 anyone who isn't aware of this, the good ozone and
    18 the bad ozone. It's the same ozone that's in the
    19 stratosphere that protects us from the sun's
    20 radiation that also causes a problem for us -- us
    21 humans at ground level if we inhale it, but it's the
    22 same ozone.
    23 HEARING OFFICER BEAUCHAMP: Mr. Lawler, for the
    24 record your referring to which slide?
    L.A. REPORTING (312) 419-9292
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    1 MR. LAWLER: I'm referring to the slide called
    2 Ozone in the Atmosphere.
    3 HEARING OFFICER BEAUCHAMP: Thank you.
    4 MR. LAWLER: The next overhead is called Ozone
    5 Air Quality and again, this is some background
    6 information. The rulemaking that we're proposing is

    7 for the purpose of the one-hour ozone National
    8 Ambient Air Quality Standard. We need to meet that
    9 standard. The standard itself is -- the level is
    10 .12 parts per million or 125 parts per billion. The
    11 fourth high value at an individual monitor over a
    12 three-year period is the critical value. If that
    13 value exceeds the levels that I mentioned above, you
    14 have a violation of the standard.
    15 The Clean Air Act, Section 181, provides
    16 for classifications of nonattainment areas.
    17 Nonattainment areas are those areas that don't
    18 achieve the National Ambient Air Quality Standards.
    19 In Illinois we have the Metro-East/St.
    20 Louis area, that's a moderate area, the Chicago area
    21 and the rest -- and some other areas around Lake
    22 Michigan are a severe nonattainment area. The
    23 attainment dates for these areas, the Metro-East was
    24 initially 1996 and for the Lake Michigan area it's
    L.A. REPORTING (312) 419-9292
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    1 2007.
    2 Now, referring to a chart called Lake
    3 Michigan Region One-hour Nonattainment Areas. This
    4 indicates the areas that I mentioned earlier that
    5 are nonattainment around Lake Michigan and in the

    6 St. Louis area both on the Illinois side and
    7 Missouri side. We need to point out here that the
    8 state does have an obligation to provide for
    9 attainment in any areas that we affect.
    10 Specifically, in Illinois and I refer to
    11 the chart called Illinois Ozone Nonattainment Areas.
    12 The nonattainment areas as indicated here in the
    13 Chicago area is a six-county -- six complete
    14 counties and parts of two others and in the
    15 Metro-East there's three counties that are
    16 nonattainment.
    17 We have an extensive -- I'm referring to
    18 the chart called Illinois Ozone Monitoring Network.
    19 We have an extensive monitoring network in the state
    20 for measuring ozone, 40 monitors. The little dots
    21 shown on the chart indicate where the monitors are.
    22 You'll notice a lot of them are in the Chicago area,
    23 in the Metro-East area again because those are
    24 the -- our nonattainment areas in the state.
    L.A. REPORTING (312) 419-9292
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    1 In looking at -- let me give you the name
    2 of the chart, Metro-East Ozone Trends Average
    3 Maximum One-hour Concentrations. In looking at the
    4 monitoring data from the monitoring data from the

    5 network in the Metro-East area, you'll notice that
    6 from the late 1970s to the current time there's been
    7 a substantial decrease in the ozone levels and this
    8 particular chart averages all of the monitors that
    9 are in the St. Louis area and it shows a pretty
    10 drastic decline. So the control measures that have
    11 been in place in the Metro-East area and those
    12 generally reflect VOC controls, controls on VOC
    13 sources, have worked. We've got a substantial
    14 increase -- or decrease in ozone levels, but we're
    15 still not in attainment in those areas.
    16 This is a very busy chart called Tracking
    17 the Ozone and I don't believe there's a copy of that
    18 in the material that you have just because it's a
    19 very difficult chart to copy, but I will -- it's put
    20 up here for a couple of reasons. First of all, the
    21 state of Illinois working jointly with the states of
    22 Wisconsin, Indiana and Michigan and with USEPA
    23 formed an organization called LADOC, Lake Michigan
    24 Air Directors' Consortium in 1989. In the early
    L.A. REPORTING (312) 419-9292
    24
    1 1990s, there was some extensive studies that were
    2 done in order to look at the air quality that was in
    3 the area around Lake Michigan and as this chart

    4 shows there were aircraft, boats, balloons, a lot of
    5 measurements were taken. The point that I want to
    6 point out to you is along the southern edge of this
    7 little map that kind of shows the Lake Michigan
    8 area, if you look at the southern edge there were
    9 aircraft flights that took place between central
    10 Indiana and central Illinois during this study and
    11 the results of those were fairly significant to
    12 looking at the way that we needed to -- what we need
    13 to do to reduce ozone further.
    14 The next chart entitled Ozone
    15 Concentrations Measured Along the Southern LMOS
    16 Boundary gives an indication of what those aircraft
    17 measured along that southern boundary that I showed
    18 you on the other chart. If you consider this a
    19 slice of air, you're in southern Illinois looking
    20 northward and you can just take a slice of the air
    21 across these two states and you can get an
    22 indication of what the ozone values were at ground
    23 level and above the ground. The numbers showing up
    24 on this chart indicate ozone values as high as 90 to
    L.A. REPORTING (312) 419-9292
    25
    1 100 to 110 parts per billion being transported into
    2 the nonattainment area from the south on this

    3 particular day and many other days that look just
    4 like this. All this indicated to us that while we
    5 need to get reductions of VOCs in the nonattainment
    6 area itself there's also a substantial amount of
    7 ozone and ozone precursors that are being
    8 transported into the Chicago nonattainment area as
    9 well.
    10 Out of all that and similar work that was
    11 being done in other parts of the country, and this
    12 next chart is called OTAG Participating States, the
    13 Ozone Transport Assessment Group was formed
    14 involving states, the federal government, industrial
    15 groups and environmental groups and many others to
    16 study the ozone transport in the eastern part of the
    17 country.
    18 The next chart called OTAG Findings are
    19 the results of that particular study and a couple of
    20 these specifically indicate that regional NOx
    21 reductions are effective in reducing ozone values in
    22 the nonattainment areas. Also, that essentially the
    23 more NOx you can get reduced, the more of an effect
    24 you have on the ozone. Ozone benefits diminish with
    L.A. REPORTING (312) 419-9292
    26
    1 distance, that VOMs controls are still effective

    2 locally and that some indication of how far the NOx
    3 itself travels and that you can have some
    4 disbenefits in the local area.
    5 Again, the important thing that came out
    6 of all this was a recognition that we needed to
    7 control NOx emissions that was being transported
    8 into our nonattainment areas in the eastern part of
    9 the country.
    10 The next chart is called Metro-East/St.
    11 Louis NAA Attainment Demonstration moves us now into
    12 a requirement that we have to be able to demonstrate
    13 attainment. The state has to be able to show how
    14 we'll get attainment in the Metro-East of the
    15 National Ambient Air Quality Standards for ozone.
    16 We were not attaining the standards and as part of
    17 the requirements that we needed to do, the state
    18 provided an attainment demonstration to USEPA in
    19 October of 1999 and we supplemented that in February
    20 of 2000 and that was provided to USEPA as part of
    21 our demonstration for attainment in the Metro-East.
    22 In April of 2000, the USEPA proposed
    23 federal approval of our submittal, although it
    24 was -- the approval was based on us submitting
    L.A. REPORTING (312) 419-9292
    27

    1 regulations that achieved the reductions that we
    2 needed as part of the attainment demonstration and
    3 later I think Rob Kaleel will explain a little bit
    4 more about the particular attainment work that was
    5 done here.
    6 In July of 2000 we submitted Subpart W to
    7 the Pollution Control Board. Again, at that point
    8 the idea that that would be the rule that would take
    9 care of this particular need that we had to fulfill
    10 and as I mentioned earlier, a court action at the
    11 end of August required us -- or we ended up needing
    12 to submit Subpart V to the Board to supplement that
    13 earlier work that was done because the rule -- the
    14 court proceeding in the end of August changed the
    15 effective date for the NOx SIP Call leaving us
    16 vulnerable beginning in 2003 when our attainment
    17 demonstration showed attainment.
    18 The last point on here is the -- we had
    19 expected that the adoption by the Board of Subpart V
    20 in December -- or near the December time frame again
    21 would take care of the obligation, but it's not
    22 going to completely.
    23 I've got a couple overheads dealing with
    24 the NOx SIP Call. This first one is called NOx SIP
    L.A. REPORTING (312) 419-9292

    28
    1 Call Chronology and I'm not really going to go into
    2 any detail in that because we have done so in other
    3 proceedings. The important point here is that as
    4 we've gone through the SIP Call, there's an
    5 interaction between the attainment demonstration and
    6 the SIP Call requirements and some of the important
    7 dates that are relevant to the SIP Call are shown on
    8 this particular chart.
    9 The elements of the -- of the required NOx
    10 SIP Call, it affected 23 jurisdictions in the
    11 eastern part of the country. There are four
    12 different types of sources that need to be addressed
    13 in the NOx SIP Call. The one that's most relevant
    14 to this proceeding is the requirement on EGUs. It's
    15 indicated on this chart.
    16 HEARING OFFICER BEAUCHAMP: Mr. Lawler, could
    17 you identify the chart you're looking at, please?
    18 MR. LAWLER: Yes. It's NOx SIP Call Elements.
    19 HEARING OFFICER BEAUCHAMP: Thank you.
    20 MR. LAWLER: And the SIP Call itself encourages
    21 participation in a National Cap and Trade Program.
    22 This chart called the Road to the Illinois
    23 Regulatory Proposal, I'll take a couple of minutes
    24 and kind of go through this, but this is what led us
    L.A. REPORTING (312) 419-9292

    29
    1 up to kind of where we are today.
    2 In late 1998 the Agency began meetings
    3 with interested groups on the NOx SIP Call, which
    4 had just at that time been published in the Federal
    5 Register. We ended up meeting with various groups.
    6 We had a group of folks called the Policy Group. We
    7 had many meetings with affected sources and we had a
    8 technical group of folks that were more interested
    9 in the inventories and modeling that met essentially
    10 on a monthly basis for the next year after this
    11 point.
    12 The Court issued a stay for the NOx SIP
    13 Call on May 25th, 1999, based on requests by a
    14 number of different groups. At that point the
    15 Agency shifted most of our efforts away from the NOx
    16 SIP Call and this was based on discussions that we
    17 had with all the folks participating on the
    18 different groups and focused more on the attainment
    19 demonstrations both for the Metro-East and for the
    20 Lake Michigan area.
    21 The next chart is entitled Continued Road
    22 to Illinois Regulatory Proposal. As I mentioned on
    23 an earlier chart, based on the work that was done
    24 then, the state submitted for the
    L.A. REPORTING (312) 419-9292

    30
    1 Metro-East/St.Louis area the attainment
    2 demonstration, October 1999, and supplemented it in
    3 February of 2000. This attainment demonstration was
    4 based on a limit of .25 pounds per million BTU for
    5 EGUs in the state of Illinois. The Agency is
    6 working -- continuing to work with -- LADCO has
    7 worked on the attainment demonstration for the Lake
    8 Michigan area and in March of -- March 3rd of 2000,
    9 the SIP Call was upheld by the courts and at that
    10 point, the Agency again shifted direction back to
    11 addressing the SIP Call itself. We resumed meetings
    12 that we had earlier and we were notified by USEPA
    13 that we did, indeed, have to meet the requirements
    14 of the SIP Call and then that gets us into the
    15 various rulemakings that I talked about earlier
    16 including the ones for the EGUs.
    17 In this chart entitled Purpose of Proposed
    18 Rulemaking, again, this particular rulemaking,
    19 Subpart V, is intended to satisfy the obligations of
    20 the state to submit control strategies to
    21 demonstrate attainment for the one-hour ozone NAAQS
    22 and to address concerns regarding the potential bump
    23 up in the Metro-East area, and from the other
    24 testimony that will be given this morning, you'll be

    L.A. REPORTING (312) 419-9292
    31
    1 given more of an explanation of the rulemaking
    2 itself, of the modeling that went into this to
    3 develop it and the technical support information
    4 associated with those.
    5 HEARING OFFICER BEAUCHAMP: Thank you. Before
    6 we proceed with the Agency's next witness, I think
    7 it might be helpful to enter for the record the
    8 docket numbers of the other rulemakings that you
    9 referred to during your testimony. Subpart W is
    10 being -- is before the Board in Docket No. R01-09
    11 and Subpart T is before the Board in Docket No.
    12 R01-11.
    13 MS. McFAWN: And that has to do with cement
    14 kilns.
    15 HEARING OFFICER BEAUCHAMP: The Agency, you
    16 have another witness?
    17 MS. HERST: Do we need to submit a copy of the
    18 overheads into the record?
    19 HEARING OFFICER BEAUCHAMP: Yes. His
    20 overheads.
    21 MS. HERST: 2A.
    22 HEARING OFFICER BEAUCHAMP: Would you like to
    23 have those submitted as Exhibit 2A?
    24 MS. HERST: Yes, please.

    L.A. REPORTING (312) 419-9292
    32
    1 HEARING OFFICER BEAUCHAMP: Okay. Who is your
    2 next witness?
    3 MS. HERST: Our next witness is Robert Kaleel.
    4 HEARING OFFICER BEAUCHAMP: Mr. Kaleel, again,
    5 I'd ask to remind you to identify the title of each
    6 overhead as in going through it in your testimony.
    7 MR. KALEEL: I'll try to remember to do that.
    8 HEARING OFFICER BEAUCHAMP: Thank you. If I
    9 might interrupt just before we move on, Ms. Herst,
    10 will Mr. Lawler be presenting a copy of the slide
    11 that was not in the package, the Tracking the Ozone
    12 slide?
    13 MS. HERST: We can do that.
    14 HEARING OFFICER BEAUCHAMP: Thank you.
    15 MR. KALEEL: My name is Rob Kaleel. I'm with
    16 the air quality planning section modeling unit in
    17 the Bureau of Air. I have been involved with the
    18 performance or the preparation of the one-hour ozone
    19 attainment demonstration for the St. Louis area.
    20 I've also been involved with the one for Chicago.
    21 I'm going to present the results, hopefully,
    22 briefly -- the results for the St. Louis
    23 nonattainment area, which includes the area in
    24 Illinois referred to as the Metro-East area.

    L.A. REPORTING (312) 419-9292
    33
    1 This slide is referred to in the package
    2 that was submitted to the Board. Hopefully, there's
    3 extra copies still available for other interested
    4 people. I'd like to begin the discussion with a
    5 comparison of air quality levels observed in
    6 the St. Louis area between 1987 through 1989 and
    7 present conditions, 1997 to 1999.
    8 The chart shows -- first off, the shaded
    9 area on both sides of the Mississippi River, the
    10 Missouri side and the Illinois side. The area
    11 shaded in blue or I guess it looks more like gray is
    12 the extent of the nonattainment area referred to as
    13 the St. Louis nonattainment area.
    14 HEARING OFFICER BEAUCHAMP: Mr. Kaleel, just
    15 for the record, I'd like to identify that you're
    16 referring to Figure 1 in his submitted testimony.
    17 MR. KALEEL: Yes, sir.
    18 The area in the little darker shade is the
    19 area that encompasses the locations of ambient
    20 monitors in the St. Louis nonattainment area that
    21 exceeded the level of the one-hour standard in two
    22 different time periods, 1987 to 1989 on the left and
    23 more recently, the '97 to 1999 period on the right.

    24 Three years of data are used to be able to compare
    L.A. REPORTING (312) 419-9292
    34
    1 to the level of the ozone standard and in particular
    2 the fourth high value at any given site recorded in
    3 three years is the level that is compared to the
    4 standard. Net value is referred to as the design
    5 value or the design concentration. So the numbers
    6 that appear on the slides reflect areas where the
    7 design value exceeds the level of the air quality
    8 standard.
    9 In 1987 through 1989 there were 13
    10 monitoring stations throughout the nonattainment
    11 area that were exceeding the level of the ozone
    12 standard. The highest design value in the region
    13 occurred in northern Jefferson County, Missouri.
    14 The level of that violation, that level of air
    15 quality of the design value, was 156 parts per
    16 billion. In the more recent three-year period, the
    17 area that is still in violation of the air quality
    18 standard is greatly reduced showing a definite
    19 improvement in air quality levels in the region.
    20 There were only two monitors in the nonattainment
    21 area. Actually, this one in Jersey (sic) County is
    22 not in the nonattainment area, but is immediately

    23 downwind. These two monitors are the only ones that
    24 still record concentrations in excess of the
    L.A. REPORTING (312) 419-9292
    35
    1 standard. The highest design value in the region
    2 currently is 131.
    3 So over the ten-year period we've greatly
    4 reduced the spacial extent of the violation and the
    5 number of people that are exposed to levels of air
    6 quality in excess of the standard and we've reduced
    7 the magnitude of those concentrations from 156 down
    8 to 131. As Mr. Lawler had mentioned, the programs
    9 that we have in place are working, but violations in
    10 the region are still occurring so we still need to
    11 do more.
    12 This slide is referred to simply as
    13 Chronology. As Mr. Lawler mentioned, there's been a
    14 long history of involvement by the Agency and the
    15 Board and the state of Missouri in trying to deal
    16 with air quality issues in the St. Louis region. I
    17 won't take you all the way back to the beginning,
    18 but at least the events that have taken place since
    19 the 1990 Clean Air Act Amendments.
    20 The 1990 Amendments required that the
    21 St. Louis region, which is considered a moderate

    22 nonattainment area, be able to demonstrate
    23 attainment and, in fact, reach attainment by 1996.
    24 The 1990 Amendments also required the states to
    L.A. REPORTING (312) 419-9292
    36
    1 begin planning and to put together an attainment
    2 demonstration based on the use of air quality models
    3 by 1994. The use of models in the context of
    4 attainment demonstration are in a predicted sense.
    5 We try to track emission changes that are
    6 anticipated in the future years to be able to see
    7 whether or not those emission changes are going to
    8 be sufficient to attain the standard by the
    9 deadline. So in this case, November 1994, the
    10 states of Illinois and Missouri jointly prepared an
    11 attainment demonstration using models to look at
    12 1996, the attainment year, to look at all control
    13 measures that were expected by that time to see
    14 whether or not those measures would be sufficient to
    15 attain the standard. What we found at that time
    16 was, in fact, we could not achieve the air quality
    17 standards by 1996 with the local measures that --
    18 mostly VOC measures that were anticipated at that
    19 time. The model concluded that the transport of
    20 ozone and ozone precursor emissions, particularly

    21 NOx and some VOCs, would prevent the area from
    22 reaching attainment in 1996.
    23 Other areas of the country were making the
    24 same finding that ozone transport have not been
    L.A. REPORTING (312) 419-9292
    37
    1 properly dealt with, that many areas in the eastern
    2 United States could not attain without looking
    3 upwind into areas that were actually classified as
    4 attainment.
    5 The Ozone Transport Assessment Group was
    6 formed in 1995 by the environmental commissioners of
    7 the states east of the Mississippi River and a few
    8 western states to look at the phenomenon of ozone
    9 transport and try to recommend mitigative measures
    10 to USEPA. Their findings, as Dennis Lawler had
    11 mentioned the finding from the OTAG group, their
    12 findings were made public in 1997 to follow shortly
    13 thereafter by USEPAs proposal of the NOx SIP Call
    14 which we've tried to deal with ozone transport.
    15 I mentioned before that this St. Louis
    16 area was to be in attainment by 1996 and couldn't
    17 make it as a result of ozone transport. The EPA
    18 never bumped the area up in 1996, which was the
    19 prescribed sequence that was supposed to happen

    20 based on the Clean Air Act. They recognized that
    21 because of transport, the area could not attain and
    22 they basically were silent on the issue of
    23 attainment dates from 1996 until July of 1998. At
    24 that point they issued a new policy called the
    L.A. REPORTING (312) 419-9292
    38
    1 Extension Policy for areas whose attainment dates
    2 had already past. These were areas affected by
    3 transport and I'll talk a little bit more about the
    4 Extension Policy.
    5 Missouri and Illinois both agreed that
    6 St. Louis was such an area that should have an
    7 extension of the attainment date for some future
    8 time. We had both requested an extension under this
    9 policy in December of 1998. One of the requirements
    10 of the Extension Policy as we revised our attainment
    11 demonstration to look beyond the 1996 time frame out
    12 to the time frame when upward reductions were to
    13 occur, and we have submitted the revised attainment
    14 demonstration in October of 1999 as required by that
    15 policy.
    16 This slide is called the Policy on
    17 Extension of Attainment Dates. I mentioned the
    18 guidance was issued -- I believe I got that date

    19 wrong. There's a typo on that -- the policy was
    20 issued in July of 1998. This guidance was issued by
    21 USEPA to specifically deal with areas like
    22 St. Louis and there are a few others in the eastern
    23 United States where -- these were moderate areas
    24 that had earlier attainment dates, but were affected
    L.A. REPORTING (312) 419-9292
    39
    1 by ozone transport. The basic idea of the policy is
    2 to move the attainment date back to some point in
    3 time when upwind reductions in particular NOx
    4 reductions would have occurred to allow the region
    5 to come into attainment. In the case of the St.
    6 Louis area what we had projected or what we
    7 anticipated when we began this modeling process was
    8 that all these reductions would be in place by the
    9 year 2003.
    10 This slide is just called Assumptions and
    11 I'll try to walk you through the assumptions that we
    12 used to develop and implement the air quality model
    13 that is used to predict air quality concentrations
    14 for the future attainment year.
    15 The modeling is -- the model in particular
    16 that isn't shown on the slide is called the Urban
    17 Airshed Model, Version V or Version 5. It's the

    18 same model that was used for the Chicago attainment
    19 demonstration, the same model used by OTAG, the same
    20 model used by USEPA in their technical support
    21 efforts for the NOx SIP Call. So it's a very widely
    22 used photochemical model.
    23 We had implemented the model just for a
    24 Midwestern region to really focus in on the very
    L.A. REPORTING (312) 419-9292
    40
    1 high resolution, very high level of precision just
    2 on the Midwestern region most likely to affect
    3 Illinois, both St. Louis and Chicago. This area is
    4 referred to as Grid M and I'll show you a picture of
    5 that in a moment. We did model an area outside of
    6 the Midwest called the OTAG coarse-grid to try to
    7 look at the effects of future emission changes
    8 outside of the Midwest to see whether or not those
    9 areas would have a substantial affect on air quality
    10 levels in St. Louis.
    11 We originally began this effort using
    12 three episodes. I think in my testimony it refers
    13 to the use of two episodes. We dropped one episode
    14 because it just didn't work very well and I'll
    15 mention which one that is in a moment.
    16 We also applied, getting a little

    17 technical I guess, a correction to USEPA's biogenics
    18 emissions model. Biogenics being the amount of
    19 naturally occurring VOCs from things like trees and
    20 in particular in the Missouri Ozarks, there are a
    21 very high percentage of oak trees in the Missouri
    22 Ozarks and the predictions of EPA's Beis-2 model was
    23 found to be greatly overstating the amount of VOCs
    24 in the region. So we had worked with USEPA to
    L.A. REPORTING (312) 419-9292
    41
    1 perform a specific field measurement program in that
    2 region to try to fine tune those emission factors
    3 and we and USEPA agreed that some correction was
    4 needed.
    5 This figure is called Figure 2, Midwest
    6 Modeling Domain or Grid M. I've mentioned before
    7 that we had developed a modeling domain that covers
    8 most of the Midwest, the areas that we think are
    9 contributing the greatest amount to the ozone
    10 transport problem. This area is modeled with a
    11 resolution, a grid spacing if you will, of only four
    12 kilometers, which is a very high resolution way to
    13 implement the model, but we've also accounted for
    14 the effects of emission changes in areas surrounding
    15 Grid M. This larger domain is called the OTAG

    16 domain. The grid cell spacing or resolution, if you
    17 will, in this larger domain is a 36 kilometer
    18 spacing. That's the same way that OTAG developed
    19 this grid back in '95 through 1997. So we are
    20 looking at emission changes within Grid M with a
    21 very high resolution and then again emission changes
    22 outside of that region. The areas right along this
    23 edge here are referred to as boundary conditions I
    24 think on the previous slide.
    L.A. REPORTING (312) 419-9292
    42
    1 HEARING OFFICER BEAUCHAMP: Mr. Kaleel, could
    2 you specifically describe which edge on that chart
    3 you were referring to just now?
    4 MR. KALEEL: The edge that I intended to meet
    5 my boundary conditions are shown on this slide in
    6 red is the boundary or the edges of the Grid M
    7 domain.
    8 HEARING OFFICER BEAUCHAMP: Thank you.
    9 MR. KALEEL: This slide is called Modeling
    10 Episodes and you can't see the colors very well. We
    11 had originally started to look at three historical
    12 ozone episodes using the air quality model.
    13 Historical episodes are used to evaluate the
    14 performance of the model. You would try to

    15 reproduce with the model events that actually
    16 occurred in historical time periods during high
    17 ozone events. July 16th through 19th, 1991, and
    18 July 10th through 14th, 1995, these are both
    19 episodes very representative of the kinds of
    20 conditions that occur in St. Louis when ozone levels
    21 are elevated. This period in June of 1996 was also
    22 a very good episode as far as high concentrations
    23 observed in the St. Louis region. I'm showing this
    24 one in red, however, because this is the one that we
    L.A. REPORTING (312) 419-9292
    43
    1 weren't able to get to work very well when we did
    2 our Basecase evaluation of the model. We were not
    3 able to reproduce with the model the ozone levels
    4 that were actually observed in St. Louis. So we
    5 abandoned the use of that one and finished our
    6 attainment demonstration with the July '91 and July
    7 1995 episode.
    8 HEARING OFFICER BEAUCHAMP: Again, just to
    9 clarify the record, the red time period that you
    10 referred to is the third time period on this slide?
    11 MR. KALEEL: Yes. It's the one on the slide
    12 from June 27th to the 29th, 1996. That's the
    13 episode that we did not use for the final attainment

    14 modeling.
    15 This slide is called Modeling Scenarios.
    16 Once we're able to evaluate the performance of the
    17 model and have some level of comfort that the model
    18 was actually accurately reproducing the ozone and
    19 precursor concentration fields throughout the
    20 St. Louis region for the Basecase and in this case
    21 we're using the 1995 emissions inventory as the
    22 Basecase inventory, we used the model then in a
    23 predicted way for the year 2003, which is the year
    24 that we anticipated that the NOx SIP Call would be
    L.A. REPORTING (312) 419-9292
    44
    1 in place. We evaluated three different emission
    2 scenarios using the model for both of the episodes
    3 that I mentioned previously. One scenario, the
    4 first one, referred to here is just CAA 2003. CAA
    5 is the Clean Air Act scenario. It reflects all the
    6 emission changes that are required by the Clean Air
    7 Act, things like the state's 15 percent rate of
    8 progress plan are included in there. They're
    9 requirements for enhanced I/M in the nonattainment
    10 areas. Those are included in there. There was an
    11 initial phase of title four control measures that
    12 were implemented by that time. So those are

    13 examples of the types of control measures that are
    14 included in the Clean Air Act scenario.
    15 The next scenario assumes that all EGUs,
    16 electric generating units, are meeting a level of
    17 .25 pounds per million BTU. This is for NOx. This
    18 is an assumed NOx control scenario and when I say
    19 all EGUs what I'm referring to are all EGUs in the
    20 area identified by USEPA's NOx SIP Call. So it's 22
    21 states, most of which are east of the Mississippi
    22 River, but it also includes the state of Missouri.
    23 Finally, for the year 2003 as an
    24 additional scenario we model the actual NOx SIP Call
    L.A. REPORTING (312) 419-9292
    45
    1 scenario which include the EGUs controlled to a
    2 level of .15 pounds per million BTU. There are also
    3 other requirements of a NOx SIP Call affecting
    4 cement kilns, nonEGUs and other source categories.
    5 This slide is entitled Figure 3,
    6 Domain-wide Total Anthropogenic Emissions. What I'm
    7 comparing on this particular slide are emission
    8 levels evaluated using the model both for NOx
    9 emissions on the left and for VOC emissions on the
    10 right. Each of the four bars on this chart show
    11 emission levels for each of the scenarios. The

    12 Basecase, the Clean Air Act level of controls, the
    13 .25 pounds per million NOx control and the NOx SIP
    14 Call. So that each of the four scenarios I've just
    15 mentioned are shown on there.
    16 Looking at the part of the chart that's on
    17 the left which reflect NOx emission changes tested
    18 in the model, and again, these are emissions
    19 throughout the entire Grid M domain, not just in the
    20 St. Louis nonattainment area.
    21 From this chart each successive scenario
    22 results in successively lower levels of NOx
    23 emissions. The 1996 Basecase emissions for the
    24 entire Grid M area was in excess of 16,000 tons of
    L.A. REPORTING (312) 419-9292
    46
    1 NOx per day. The Clean Air Act Amendments and in
    2 particular the requirements of the title four Acid
    3 Rain Control Program would reduce those NOx
    4 emissions in the Grid M domain by over 2000 tons to
    5 a level almost 14,000 tons per day. The .25
    6 scenario reduces emissions by about another 2000
    7 tons to a level of about 11,000 tons per day and
    8 finally, the NOx SIP Call brings those levels of
    9 emissions down about another 1,600 tons to a level
    10 almost 10,000 tons per day in the Grid M domain.

    11 So each successive scenario looks at
    12 tighter and tighter levels of NOx control or lower
    13 levels of NOx emissions.
    14 On the VOC side, the predominant VOC
    15 strategy evaluated is the Clean Air Act strategy
    16 with fairly dramatic reduction of the VOC emissions
    17 shown between the Basecase and the 2003 Clean Air
    18 Act scenario. These are the reductions referred to
    19 before, things like the 15 percent control plans,
    20 efforts to reduce the amount of VOCs emitted from
    21 automobiles, the enhanced I/M program, low RVP
    22 fuels in the Metro-East area, reformulated gasoline
    23 on the Missouri side, those are all contained within
    24 the scenario called Clean Air Act scenario. Again,
    L.A. REPORTING (312) 419-9292
    47
    1 the .25 and the NOx SIP call scenarios are NOx
    2 strategies. VOC levels really are not changed in
    3 those subsequent scenarios.
    4 HEARING OFFICER BEAUCHAMP: Mr. Kaleel, on this
    5 current slide, Figure 3, you have one of your
    6 scenarios listed as '96 Basecase. On the previous
    7 slide, Modeling Scenarios, you have identified it as
    8 1995 Basecase?
    9 MR. KALEEL: Yes. I should explain that.

    10 When we refer to the scenarios that we call our
    11 Basecase it, in a way, is reflected of '95 slash
    12 '96. I apologize for the confusion. Most of the
    13 inventory reflects 1995, but through the process of
    14 developing this inventory we worked with utilities
    15 in the USEPA's Acid Rain Program to look at the
    16 results of their continuous emissions monitors for
    17 NOx and for utilities. We're really reflecting more
    18 of the 1996 case. So both terms are right. I
    19 should have been consistent on the way I referred to
    20 them.
    21 HEARING OFFICER BEAUCHAMP: Okay.
    22 MR. KALEEL: This slide is called Figure 4,
    23 Peak One-hour Ozone Concentrations. I apologize the
    24 colors are not showing up real well, but what this
    L.A. REPORTING (312) 419-9292
    48
    1 four-panel plot is trying to show is the results of
    2 each of the four emission control scenarios that I
    3 described previously for one example day. In this
    4 case the day that we're trying to reflect is July
    5 18th, 1991. We're not trying to reproduce 1991
    6 here, but rather we're using the meteorology that
    7 occurred on that day to look at emission scenarios
    8 for each of these subsequent periods. In this case,

    9 the base year period versus the three scenarios for
    10 2003. The color scales are a little difficult to
    11 see, but basically on this one particular day the
    12 model is showing predicted violations, levels of air
    13 quality, ozone air quality above the level of the
    14 one-hour standard, above .25 to exceed downwind of
    15 the St. Louis nonattainment area. Areas of other --
    16 of elevated concentrations of ozone, but below the
    17 standard are shown here in yellow. If you can kind
    18 of compare visually the red area, the most central
    19 contour area, to subsequent scenarios you can see
    20 that the area gets successively small -- areas of
    21 elevated ozone concentration gets successively
    22 smaller indicating that each of the successive
    23 strategies would yield air quality benefits.
    24 Actually, on this particular day, the Clean Air Act
    L.A. REPORTING (312) 419-9292
    49
    1 levels of control reduce concentrations to below the
    2 level of the standard. Again, this is just one day
    3 out of several that we looked at and unfortunately,
    4 the Clean Air Act scenario didn't solve all the
    5 days, but to illustrate the improvements I've used
    6 this day. Comparing the Clean Air Act contours to
    7 the .25 scenario, again, further reductions in the

    8 size of each contour again indicating successively
    9 better and better air quality predicted by the
    10 model. There isn't a lot of difference between the
    11 .25 and the NOx SIP Call scenario. In fact, in
    12 comparing those two charts you see very little
    13 difference at all. On other days and even on this
    14 day what we've seen is about a one to three part per
    15 billion improvement in predicted ozone near the
    16 St. Louis region when you look at the difference
    17 between NOx SIP Call scenario and the .25 scenario.
    18 HEARING OFFICER BEAUCHAMP: If I could just
    19 clarify for the record, the chart that we have is in
    20 black and white. The red area that you referred to
    21 appears to be showing up on your chart as the
    22 darkest color and the yellow appears to be showing
    23 up as the lightest color on the exhibit that you
    24 submitted?
    L.A. REPORTING (312) 419-9292
    50
    1 MR. KALEEL: I think that's right.
    2 MS. McFAWN: Also, for the record, note that
    3 this figure as well as the other ones designated as
    4 figures are attached to your testimony which I
    5 believe would be admitted into evidence and they are
    6 shown attached at least on our copies of your

    7 testimony in color.
    8 MR. KALEEL: In color.
    9 MS. McFAWN: This is for benefit of the reader
    10 more than the panel.
    11 MR. KALEEL: On the previous slide we indicated
    12 that really there wasn't a lot of difference in air
    13 quality predicted in St. Louis between the .25
    14 scenario and the NOx SIP Call. In fact, the
    15 difference was in the range of about one to three
    16 parts per billion. What we were able to find and I
    17 think this slide, which I forgot to mention is
    18 Figure 5, the Attainment Strategy Modeling Results.
    19 What we, in fact, found is that the .25 pounds per
    20 million BTU NOx scenario was, in fact, adequate to
    21 demonstrate attainment for the St. Louis region.
    22 The NOx SIP Call scenario maybe provides more
    23 reductions than are needed specifically to meet this
    24 test of demonstrating attainment. I think this
    L.A. REPORTING (312) 419-9292
    51
    1 slide shows it pretty well. What this slide is
    2 trying to show is not just the results on an
    3 individual day, but the results on all of the days
    4 in kind of a relative context. This particular
    5 analysis was included in the attainment

    6 demonstration as a quote, weight of evidence, type
    7 of demonstration, and again, the -- what this
    8 particular slide is trying to show is the difference
    9 in measured air quality, in this case the '95 to
    10 1997 ozone design value. This is the measured value
    11 not modeled. When we used the model in a relative
    12 way look at the percent change from the base year to
    13 each of the strategies, use that percentage change
    14 to apply it to the design value to predict what the
    15 future design value would look like or the 2003
    16 design value. What we see in looking at each of the
    17 successive bars on this chart is that the Clean Air
    18 Act measure is commensurate with the amount of
    19 emission reductions that we showed to provide ozone
    20 benefits. Concentrations should come down based on
    21 just implementation of the Clean Air Act control
    22 measures. However, we don't expect that the Clean
    23 Air Act measured by themselves will yield attainment
    24 for the region. Predicted concentrations will still
    L.A. REPORTING (312) 419-9292
    52
    1 exceed the level of the ozone standard of .125 or
    2 124.9. The .25 scenario does reduce predicted
    3 concentrations to below the level of the air quality
    4 standard. That is the level that we chose for the

    5 attainment demonstration that we submitted to USEPA,
    6 and again, the NOx SIP Call provides a little bit
    7 more air quality benefit giving air quality levels
    8 slightly lower than the .25 scenario.
    9 This slide is called the Attainment
    10 Strategy Control Measures and this is just kind of a
    11 final review of the measures that were contained in
    12 the attainment demonstration submitted by both
    13 Illinois and Missouri originally last October,
    14 October 1999, with some updates in February and June
    15 of this past year. The strategy includes both VOC
    16 measures and NOx measures. The VOC measures
    17 implemented locally include the 15 percent plans,
    18 the enhanced I/M program, Missouri's reformulated
    19 gasoline program. In addition to that not shown is
    20 Illinois' low RVP gasoline program and all other
    21 measures required by the Clean Air Act by the year
    22 2003.
    23 In terms of regional measures the
    24 attainment demonstration assumes that electric
    L.A. REPORTING (312) 419-9292
    53
    1 utilities or EGUs would be controlled -- NOx
    2 emissions would be controlled to a level of .25
    3 pounds per million BTU in Illinois and the eastern

    4 one-third of Missouri. In the western third of
    5 Missouri, the EGU control level is .35 pounds per
    6 million BTU and all other EGUs in the NOx SIP Call
    7 states east of the Mississippi River would be
    8 controlled to a level of .25 pounds of NOx per
    9 million BTU. That concludes my testimony.
    10 HEARING OFFICER BEAUCHAMP: Thank you. At this
    11 time would you like to move to admit the copies of
    12 your slides as an exhibit?
    13 MS. HERST: Yes.
    14 HEARING OFFICER BEAUCHAMP: We will admit those
    15 as Exhibit 1A. Let's take a few moments off the
    16 record.
    17 (Whereupon, a discussion
    18 was had off the record.)
    19 HEARING OFFICER BEAUCHAMP: Does the Agency have
    20 another witness they would like to present?
    21 MS. HERST: Yes. Mr. Moore is going to read
    22 his testimony.
    23 HEARING OFFICER BEAUCHAMP: Mr. Moore, please
    24 proceed with your testimony.
    L.A. REPORTING (312) 419-9292
    54
    1 MR. MOORE: Good afternoon. My name is Berkley
    2 L. Moore. I'm a licensed professional engineer in

    3 Illinois and since 1970 I have been employed as an
    4 Environmental Protection Engineer or as an
    5 Environmental Protection specialist in the Illinois
    6 Environmental Protection Agency's (the Agency)
    7 Bureau of Air.
    8 I have a bachelor of science degree
    9 majoring in chemical engineering which I received
    10 from Grove City College in Pennsylvania and have
    11 completed all the course work for a master's degree
    12 in environmental engineering from Southern Illinois
    13 University.
    14 The purpose of my testimony today is to
    15 discuss the technical aspects, section by section,
    16 of the Agency's Part 217, Subpart V, Electric Power
    17 Generation, proposal for regulating the emissions of
    18 nitrogen oxides, (NOx).
    19 Section 217.700 simply states that the
    20 purpose of Subpart V is to control NOx emissions
    21 during the May 1 through September 30 control
    22 period, beginning in the year 2003. Control of NOx
    23 during the control period will have the effect of
    24 reducing ambient concentrations of ozone because it
    L.A. REPORTING (312) 419-9292
    55
    1 is the chemical reaction of NOx, in the presence of

    2 heat and sunlight, with volatile organic compounds
    3 that are also emitted to the atmosphere, which is
    4 the primary mechanism leading to the formation of
    5 ozone in the lower atmosphere.
    6 The May 1 to September 30 dates
    7 denominating the control period are, of course,
    8 dates that encompass the period of most intense
    9 sunlight during the year. The year of applicability
    10 is 2003.
    11 Section 217.702. This section simply
    12 states that if any section, subsection or clause of
    13 Subpart V is found invalid, such finding shall not
    14 affect the validity of any of those portions of
    15 Subpart V not found invalid.
    16 Section 217.704, applicability. This
    17 section sets forth the type of emission unit to
    18 which Subpart V applies. It is written to apply to
    19 all fossil fuel-fired stationary boilers, combustion
    20 turbines or combined cycle systems that serve a
    21 generator with a nameplate capacity exceeding 25
    22 megawatts of electricity, if such electricity is
    23 sold. This section excludes the nonEGUs listed in
    24 Appendix D to Subpart W, which was filed with the
    L.A. REPORTING (312) 419-9292
    56

    1 Board on July 11th, 2000, and docketed as R01-9.
    2 Subpart V also applies to any fossil
    3 fuel-fired unit with a maximum design heat input of
    4 greater than 250 million BTU per hour if the unit
    5 has the potential to use more than 50 percent of its
    6 potential electrical output capacity of the unit.
    7 Subsection (a) provides that if the
    8 generator served by these emission units exceeds a
    9 capacity of 25 megawatts of electricity for sale,
    10 the unit is subject to Subpart V unless the unit is
    11 located at a source listed in Appendix D to Part 217
    12 of the Board's air pollution regulations. The
    13 sources listed in Appendix D are sources whose
    14 primary business is not the production of
    15 electricity, and that are not being modeled as part
    16 of the proposed Subpart V NOx emission rate in the
    17 Agency's attainment demonstration for the
    18 Metro-East/St. Louis ozone nonattainment area.
    19 Subsection (b) applies to emission units
    20 commencing operation after January 1, 1999, and
    21 provides the method to determine whether a large;
    22 that is, more than 250 million BTU per hour heat
    23 capacity unit is designed primarily for the
    24 production of electricity rather than to provide
    L.A. REPORTING (312) 419-9292

    57
    1 steam or heat for process emission units. The
    2 0.0488 factor by which a unit's heat input is to be
    3 multiplied to determine the primary purpose of the
    4 unit is based on standard conversion factors
    5 relating British thermal units per hour, the
    6 preprinted testimony inadvertently omits per hour,
    7 to watts. The fact that only one-third of a unit's
    8 heat input is ordinarily converted into electricity
    9 and that if a generator requires more than one-half
    10 of the unit's heat input to generate the electricity
    11 at full capacity, the emission unit's primary
    12 purpose must be for the production of electricity.
    13 Two sources indicated that there should be
    14 a low emitter exemption for units with low; that is,
    15 five percent or less capacity factors that burn
    16 natural gas or oil. The concern appears to be the
    17 higher cost of requiring controls and continuous
    18 emissions monitors for units that operate
    19 infrequently. Units with such low capacity factors
    20 are usually peaking units. As I noted earlier, the
    21 proposal already excludes smaller units those
    22 serving a generator with a nameplate capacity that
    23 is 25 megawatts of electricity or less.
    24 The Agency believes it is reasonable for
    L.A. REPORTING (312) 419-9292

    58
    1 the proposal to include large units with a low
    2 capacity factor.
    3 Section 217.206 (sic) emission
    4 limitations. This section would limit NOx emissions
    5 from affected units to 0.25 pounds per million BTU
    6 as well as to any more stringent limit that might
    7 also apply. The Subpart V limit of 0.25 pounds per
    8 million BTU must be achieved by each individual unit
    9 or alternatively by participating in an averaging
    10 demonstration via the provisions of Section 217.708.
    11 HEARING OFFICER BEAUCHAMP: Mr. Moore, I
    12 believe when you were speaking you said Section
    13 217.206 and in your prefiled testimony it says
    14 217.706.
    15 MR. MOORE: Okay. Yes. 706 is correct.
    16 Section 217.798, NOx averaging. This
    17 section applies only to those emission units listed
    18 in Appendix F to Subpart W, and to any unit at
    19 Soyland Power that commenced commercial operation
    20 before January 1st, 2000. Units listed in Appendix
    21 F are units that commenced commercial operation
    22 before 1996. Therefore, units that commenced
    23 commercial operation after this date and units at
    24 Soyland Power that commenced commercial operation

    L.A. REPORTING (312) 419-9292
    59
    1 after January 1st, 2000, will have to meet the 0.25
    2 pounds per million BTU limit on an individual basis.
    3 The units to which Section 217.708
    4 applies, however, will be able to meet the Subpart V
    5 limit in a more cost-effective manner averaging
    6 their emissions rates with other units under Section
    7 217.708. The mathematical representation of the
    8 averaging formula is given in Subsection (b).
    9 A simple illustration of the Subsection
    10 (b) formula is to consider two boilers each of 1,500
    11 million BTU per hour heat input capacity. If one of
    12 those boilers had an average control period NOx
    13 emissions rate of 0.15 pounds per million BTU and
    14 the other an average control period emissions rate
    15 of 0.35 pounds per million BTU, then taken together
    16 their average emissions rate would be 0.15 plus
    17 0.35, that quantity divided by two or 0.25 pounds
    18 per million BTU, just enough to meet compliance.
    19 Use of the 217.708 formula would give the
    20 same result and more importantly would give a
    21 correct result regardless of any varying heat inputs
    22 of the units or number of units in the averaging
    23 plan and regardless of operating for a different
    24 number of hours, the illustration assumes operating

    L.A. REPORTING (312) 419-9292
    60
    1 for the same number of hours during the control
    2 period.
    3 Subsection (c) provides that emission
    4 averaging must be conducted via federally
    5 enforceable permit conditions and Subsection (d)
    6 allows each unit to be included only once in a NOx
    7 averaging demonstration during a control period.
    8 This latter provision is designed so as to prevent
    9 double counting of over-complying emission units;
    10 that is, the difference in allowable and actual
    11 emissions from each averaging unit can be used only
    12 one time by other undercomplying units.
    13 Subsection (e) requires compliance by
    14 averaging to be demonstrated within two months of
    15 the end of the control period while Subsection (f)
    16 provides that should compliance not be demonstrated
    17 by averaging, each unit participating in the
    18 averaging demonstration shall be treated as though
    19 it were attempting to comply on an individual basis.
    20 Thus overcomplying units would be deemed to be in
    21 full compliance, while undercomplying units would be
    22 deemed to fall short by the actual magnitude of
    23 their undercompliance.
    24 Section 217.710, monitoring. This section

    L.A. REPORTING (312) 419-9292
    61
    1 requires affected units to demonstrate compliance
    2 with NOx emission limits by using continuous
    3 emissions monitors that meet the requirements of 40
    4 Code of Federal Regulations Part 75, Subpart B.
    5 There is an exemption in Subsection (b),however,
    6 allowing oil or gas-fired peaking units to use the
    7 emissions estimations protocol of 40 CFR Part 75,
    8 Subpart E. This emissions protocol provides that
    9 other kind of monitoring systems may be used so long
    10 as they can be shown to be of equivalent precision,
    11 reliability, accessibility and timeliness.
    12 Thus, this section imposes on affected
    13 units identical with monitoring requirements to
    14 those imposed by the proposed Part 217, Subpart W
    15 regulations that would apply to the same affected
    16 units that are currently before the Board -- the
    17 regulations are currently before the Board, but for
    18 the fact that Subpart V monitoring will be required
    19 approximately a year earlier, and that such
    20 monitoring will entail an additional calculation
    21 step; that is, the step of determining emissions in
    22 pounds per million BTU.
    23 Section 217.712. Reporting and

    24 recordkeeping. This section requires affected units
    L.A. REPORTING (312) 419-9292
    62
    1 to comply with the recordkeeping and reporting
    2 requirements of 40 CFR Part 75, but only insofar as
    3 these requirements are related to NOx emissions
    4 during the control period; to certify that the
    5 report is true and accurate; to show that the unit
    6 complies with the control season average NOx
    7 emissions rate not exceeding 0.25 pounds per million
    8 BTU, either individually or as part of an averaging
    9 demonstration; to keep and maintain for five years
    10 all records and data necessary to demonstrate such
    11 compliance and to have such records and data
    12 available for submittal to the Agency within 30 days
    13 of any written request by the Agency. These records
    14 and data must be available or submitted by November
    15 30 of each year beginning in 2003. This concludes
    16 my testimony.
    17 HEARING OFFICER BEAUCHAMP: Thank you,
    18 Mr. Moore. Any rebuttal for Mr. Moore?
    19 MS. HERST: No.
    20 HEARING OFFICER BEAUCHAMP: Do you have any
    21 other witnesses you'd like to present today?
    22 MS. HERST: Yes. We have one more,

    23 Mr. Mahajan. He will also read his testimony into
    24 the record.
    L.A. REPORTING (312) 419-9292
    63
    1 HEARING OFFICER BEAUCHAMP: Mr. Mahajan, please
    2 proceed with your testimony.
    3 MR. MAHAJAN: Good morning. My name is
    4 Yoginder Mahajan. I am employed as an environmental
    5 protection engineer in the air quality planning
    6 section in the Bureau of Air of the Illinois
    7 Environmental Protection Agency hereafter called
    8 Illinois EPA. I have been employed in this capacity
    9 since March 1992.
    10 HEARING OFFICER BEAUCHAMP: Mr. Mahajan, could
    11 I get you to slow down for the court reporter,
    12 please?
    13 MR. MAHAJAN: Prior to my employment with the
    14 Illinois EPA I worked for various metal fabrication
    15 industries for nine years. My educational
    16 background includes a bachelor of engineering degree
    17 in mechanical engineering from Bhopal University at
    18 Bhopal, India.
    19 As part of my regular duties in the air
    20 quality planning section, I have prepared emission
    21 estimates for various source categories used in the

    22 development of the 1990 ozone season weekday
    23 emissions inventories; evaluated control
    24 technologies applicable to volatile organic
    L.A. REPORTING (312) 419-9292
    64
    1 materials hereafter called VOM emissions sources
    2 utilized in the preparation of the Rate-of-Progress
    3 plans for the Chicago and St. Louis ozone
    4 nonattainment areas; and assisted in the development
    5 of regulations for the control of VOM emissions from
    6 source categories included in the Rate-of-Progress
    7 plans.
    8 Regarding the proposal before you today, I
    9 have been involved in the development of the NOx
    10 regulations for electrical generating units
    11 hereafter called EGU, and I have prepared the
    12 Technical Support Document hereafter called TSD for
    13 this proposal.
    14 As the TSD points out, the rotary motion
    15 of the turbines through a magnetic field generates
    16 the electricity that is produced by the utility
    17 industry. A large output of electricity, the amount
    18 that is required every day of the year is ordinarily
    19 generated by the turbines turned by a flow of steam
    20 produced in boilers. This more or less constant

    21 electrical load is termed base load. Base load
    22 units are supplemented, as needed, by cycling units
    23 which may be gas- or oil-fired. An extra amount of
    24 electricity, such as that required to run many air
    L.A. REPORTING (312) 419-9292
    65
    1 conditioners during very hot summer days, is
    2 generated in turbines turned by a flow of steam
    3 produced in gas- or oil-fired boilers that can be
    4 quickly brought on line, or in gas- or oil-fired gas
    5 turbines, wherein the same turbine that is making
    6 the electricity is turned by the flow of combustion
    7 gases produced from burning gas or fuel oil. Units
    8 producing electricity that are required only on high
    9 demand days are called peaking units or simply
    10 peakers. Smaller coal-fired units are also
    11 sometimes used as peakers, although they cannot come
    12 on line as quickly as gas- or oil-fired units.
    13 Combustion of fuel in the boilers and gas
    14 turbines produces nitrogen oxides hereafter called
    15 NOx. The ambient air consists of about 20 percent
    16 oxygen which when heated to elevated temperatures
    17 will combine with the elements of coal, fuel oil, or
    18 natural gas, carbon and hydrogen, to yield carbon
    19 dioxide and water vapor, and to generate still more

    20 heat which will sustain combustion. Ambient air,
    21 however, also contains almost 80 percent nitrogen,
    22 which does not react with its oxygen component to
    23 form NOx at ambient temperatures, but will do so at
    24 the elevated temperatures that occur during a fuel's
    L.A. REPORTING (312) 419-9292
    66
    1 combustion. This reaction takes place at an
    2 increased rate as the temperature of combustion
    3 rises, and also with increasing amounts of excess
    4 air. In addition, coal and fuel oil contain
    5 appreciable amounts of nitrogen that can also
    6 combine with oxygen to form still more NOx at
    7 combustion temperatures.
    8 Today's proposal is to control NOx
    9 emissions from the large fossil-fuel-fired EGUs that
    10 have nameplate capacities greater than 25 megawatts
    11 of electricity. As part of the evaluation of the
    12 control of NOx emissions from EGUs, the Illinois EPA
    13 identified several sources of guidance. The United
    14 States Environmental Protection Agency, hereafter
    15 called USEPA, published two Alternative Control
    16 Techniques, hereafter called ACT, documents
    17 regarding control of NOx emissions from utility
    18 boilers and gas turbines. These ACT documents

    19 contain detailed information which describe the
    20 sources of NOx emissions, various techniques for
    21 controlling NOx emissions, and the costs of these
    22 controls. The Illinois EPA used information
    23 contained in the ACT as background information, but
    24 relied on the information contained in the
    L.A. REPORTING (312) 419-9292
    67
    1 Regulatory Impact Analysis for the NOx SIP Call
    2 published as part of the regulatory docket for the
    3 NOx SIP Call, 63 Federal Register, 57356, October
    4 27, 1998, the proposed Federal Implementation Plan,
    5 hereafter called FIP, published at 63 Federal
    6 Register 56394, October 21, 1998, and USEPA's
    7 proposed findings on the various petitions filed
    8 under Section 126 of the CAA, Section 126 Petitions,
    9 published at 65 Federal Register, 2674, January
    10 18th, 2000, for the costs and economic impacts of
    11 today's proposal.
    12 To determine the NOx emissions for the
    13 existing large Illinois EGUs, the Illinois EPA used
    14 the actual 1996 heat input data reported by the
    15 existing emissions units to the Acid Rain Division
    16 of the USEPA. The heat input of the fuel burning
    17 equipment is the amount of heat energy, usually as

    18 measured in millions of British thermal units,
    19 hereafter called MMBTU, produced by the burning of
    20 the fuel for a given period of time, usually an
    21 hour. Base 2003 heat input values were calculated
    22 by multiplying actual 1996 heat input with a
    23 1996-2003 growth factor, which was calculated based
    24 on the 1996-2007 growth factor of 1.08 as predicted
    L.A. REPORTING (312) 419-9292
    68
    1 by the USEPA's Integrated Planning Model, hereafter
    2 called IPM. The 2003 base emissions were calculated
    3 by multiplying the unit's base 2003 heat input with
    4 an emission rate in pounds per million BTU and
    5 divided by 2,000 pounds per ton. The emissions
    6 rates used for calculations were the Acid Rain
    7 Control limits and when the unit was not subject to
    8 Acid Rain Control limit, an actual average 1996
    9 emission rate reported by the sources to the USEPA
    10 was used. The total 2003 base NOx emissions from
    11 the existing impacted 103 EGUs were calculated to be
    12 113,340 tons per control period.
    13 The 2003 controlled NOx emissions from the
    14 103 affected units by the proposal were calculated
    15 by applying a proposed emission rate of 0.25 pounds
    16 per million BTU to each unit's 203 -- sorry, 2003

    17 heat input. The total regulated 2003 control period
    18 NOx emissions were estimated to be 49,790 tons.
    19 This represents a reduction of 63,550 tons of NOx
    20 emissions or an average reduction of 56 percent from
    21 the base 2003 NOx emission levels. Attachment A to
    22 the TSD identifies each of the 103 impacted EGUs and
    23 each unit's associated NOx emissions data.
    24 The largest number of units affected by
    L.A. REPORTING (312) 419-9292
    69
    1 the proposal are coal-fired units which can be
    2 classified as either dry bottom pulverized
    3 coal-fired boilers or as cyclone boilers, with the
    4 pulverized coal-fired boilers further classified as
    5 to firing method either as tangentially-fired or as
    6 wall-fired. These classifications are important
    7 because each classification has different
    8 characteristics uncontrolled NOx emissions and
    9 control costs.
    10 The units having the highest total NOx
    11 emissions in Illinois are cyclone boilers. Cyclone
    12 boilers are those in which crushed coal is fed
    13 tangentially in a stream of primary air to a
    14 horizontal cylindrical furnace. In a cyclone
    15 boiler, much of the ash forms a liquid slag on the

    16 furnace walls and must be drained to the furnace
    17 bottom where it can be removed through a slag tap
    18 opening. There are 22 cyclone boilers affected by
    19 the proposed regulations, having projected base 2003
    20 NOx emissions of 56,579 tons during the May 1
    21 through September 30 control period.
    22 The units having the second highest total
    23 NOx emissions are tangentially-fired dry bottom
    24 pulverized coal boilers having uncontrolled NOx
    L.A. REPORTING (312) 419-9292
    70
    1 emissions. Tangentially-fired units fire fuel in
    2 burners mounted in a corner or in opposing corners
    3 of a furnace with a rectangular cross section. The
    4 fuel is called pulverized coal because the coal is
    5 pulverized to the consistency of talcum powder in
    6 mills designed for that purpose. The term dry
    7 bottom refers to the fact that the furnace is
    8 designed so that no ash collects in a liquid state
    9 on its walls. There are no wet bottom pulverized
    10 coal boilers in Illinois. Projected base 2003 NOx
    11 emissions from the 34 tangentially-fired dry bottom
    12 pulverized coal boilers affected by the regulatory
    13 proposal total 43,047 tons during the control
    14 period.

    15 Wall-fired dry bottom pulverized coal
    16 boilers are the third largest NOx emitting category
    17 of units affected by the regulatory proposal.
    18 Wall-fired units are similar to tangentially-fired
    19 units except that the burners are mounted in a wall,
    20 or in opposite walls, of the furnace rather than in
    21 the corners. There are only eight wall-fired dry
    22 bottom pulverized coal boilers affected by the
    23 proposal with projected base 2003 control period NOx
    24 emissions of 9,130 tons.
    L.A. REPORTING (312) 419-9292
    71
    1 The fourth NOx emitting category of EGUs
    2 affected by the regulatory proposal is gas- and
    3 oil-fired boilers. There are 25 gas- and oil-fired
    4 boilers impacted by the proposal and which account
    5 for 2,234 tons of 2003 base control period NOx
    6 emissions.
    7 The last category of EGUs affected by the
    8 regulatory proposal is gas turbines. There are 14
    9 existing gas turbines affected by the proposal and
    10 they are generally used to meet peak electricity
    11 demand. The total NOx emissions from this category
    12 are 2,351 tons per 2003 base control period.
    13 A number of NOx control technologies are

    14 available to reduce NOx emissions from EGUs. They
    15 can be either combustion controls or post combustion
    16 controls. Combustion controls consist of changing
    17 the circumstances of boiler or turbine combustion so
    18 as to minimize the amount of NOx generated during
    19 that combustion, while post combustion control
    20 treats already generated combustion gases so as to
    21 reduce those gases' NOx component to nitrogen and
    22 water vapor.
    23 Most combustion controls are designed to
    24 prolong combustion at lower temperatures rather than
    L.A. REPORTING (312) 419-9292
    72
    1 quickly completing it at higher temperatures (called
    2 stating the combustion), by creating combustion
    3 zones that are fuel rich and thus oxygen poor, and
    4 by creating lower overall temperatures. Combustion
    5 control techniques include taking burners out of
    6 service, hereafter called BOOS, to maintain a
    7 staging atmosphere within the furnace, using low
    8 excess air, hereafter called LEA, so as to limit the
    9 contact between oxygen and nitrogen, and staging
    10 combustion via biased firing, hereafter called BF,
    11 of air-fuel rations in some burners, flue gas
    12 recirculation, called FGR, which lower peak flame

    13 temperature by adding a large mass of cool, inert
    14 gas to the fuel air mixture, reducing air to the
    15 primary burners and adding ports for overfire air,
    16 and providing for reburning wherein a portion of the
    17 fuel is burned in a second combustion area above the
    18 main combustion area.
    19 The most common single combustion control
    20 technique, however, is the low NOx burner or LNB, a
    21 burner especially designed to stage combustion and
    22 to provide for lower combustion temperatures. LNBs
    23 can achieve a 35 to 45 percent NOx reduction when
    24 installed on tangentially-fired pulverized coal
    L.A. REPORTING (312) 419-9292
    73
    1 boilers, a 40 to 50 percent reduction when installed
    2 on wall-fired pulverized coal boilers, and a 30 to
    3 50 percent reduction when installed on gas- or
    4 oil-fired boilers. The burner's NOx reduction
    5 efficiency can be improved still further when used
    6 in conjunction with other control techniques such as
    7 OFA. LNBs, however, are not available for cyclone
    8 boilers.
    9 The only other single combustion control
    10 technique that can equal, or even exceed, the
    11 efficiency of Low NOx burner is reburn. Reburn with

    12 natural gas is usually a more suitable technique
    13 than reburn with coal or oil, even if those latter
    14 fuels are the boiler's primary fuel. Reburn alone
    15 is capable of achieving a 50 to 60 percent NOx
    16 reduction from gas- to oil- and coal-fired boilers,
    17 including cyclone boilers.
    18 The other combustion control technique
    19 besides reburn is low NOx burner, which can allow
    20 gas- and oil-fired boilers to meet the proposed
    21 regulatory requirements.
    22 Gas- or oil-fired gas turbines can be
    23 controlled by the injection of either water or steam
    24 into the intake of the turbine. This control
    L.A. REPORTING (312) 419-9292
    74
    1 technique retards NOx formation by lowering the
    2 operating temperature of the turbine and can provide
    3 a 70 to 90 percent reduction in NOx emissions, which
    4 may be sufficient to meet the requirements of the
    5 regulatory proposal. A special retrofit firing
    6 configuration, known as the low NOx combustor, is
    7 available for some gas turbines. This technique can
    8 provide a 60 to 90 percent reduction in NOx
    9 emissions.
    10 Two post-combustion control techniques

    11 that are available for fossil-fuel-fired boilers are
    12 selective non-catalytic reduction, hereafter called
    13 SNCR, and selective catalytic reduction, hereafter
    14 called SCR. Both these techniques are called
    15 reduction techniques because the NOx is reduced back
    16 to elemental nitrogen and oxygen with the oxygen
    17 combining with hydrogen to form water in the
    18 process.
    19 Both techniques are called selective
    20 because both specifically select NOx for reduction
    21 unlike the catalytic reduction that is applied to
    22 the exhaust of motor vehicles and which reduces a
    23 wide variety of pollutants. In both SNCR and SCR,
    24 ammonia, a compound of nitrogen and hydrogen, is
    L.A. REPORTING (312) 419-9292
    75
    1 made to react with NOx in order to liberate the
    2 nitrogen from each reactant and produce gaseous
    3 nitrogen and water. In SNCR, urea, another nitrogen
    4 and hydrogen compound, which also contains carbon,
    5 is often used instead of ammonia.
    6 The advantage of SNCR over SCR is cost,
    7 because the SNCR reactions take place without the
    8 use of a catalyst, the chief component of the cost
    9 of an SCR system. The disadvantages of SNCR are

    10 that it effectively operates over a rather narrow
    11 range of temperatures which may not be appropriate
    12 for some boilers, that it is difficult to control
    13 the loss of ammonia, an air pollutant in its own
    14 right, to the ambient air atmosphere, and that its
    15 NOx removal efficiencies, 30 to 60 percent, compare
    16 unfavorably with SCR's 75 to 85 percent NOx removal
    17 efficiencies for coal-fired boilers.
    18 In general, gas- and oil-fired boilers
    19 SNCR's reduction efficiencies are even poorer, 25 to
    20 40 percent, while SCR's efficiencies are even
    21 better, 80 to 90 percent. SNCR may not be suitable
    22 for gas turbine applications, while SCR is capable
    23 of providing 90 percent NOx reductions for such
    24 turbines.
    L.A. REPORTING (312) 419-9292
    76
    1 Th TSD for this proposal has a summary of
    2 the costs of various NOx control technologies and
    3 their combinations under various load conditions
    4 based on the information contained in the ACT
    5 documents. The costs of combustion controls for
    6 gas- and oil-fired boilers vary widely depending
    7 upon the size of the unit, the load conditions, and
    8 the type of control technology employed. Table 5-2

    9 in the TSD provides a summary of the large variety
    10 of cost effectiveness values for the NOx control
    11 options for these boilers. For gas turbines that
    12 continue to operate as peakers, the most likely
    13 control that would be utilized is water and steam
    14 injection. The cost effectiveness range for this
    15 control option is $1,210 to $2,350 per ton of NOx
    16 removed. If these units are used more often than as
    17 peaking units, the cost per ton would be less.
    18 Control costs for coal-fired boilers
    19 relying on SNCR technology also vary widely for base
    20 load units with an average range of cost
    21 effectiveness of $725 to $880 per ton of NOx
    22 reduced. Control costs relying on SCR technology
    23 have a similar average range of cost effectiveness
    24 of $1,035 to $2,035 per ton for base load units.
    L.A. REPORTING (312) 419-9292
    77
    1 In order to estimate the cost
    2 effectiveness of the proposal, Illinois EPA is
    3 relying on USEPA's cost data presented in the
    4 Regulatory Impact Analysis for the NOx SIP Call.
    5 USEPA analyzed the results of cost effectiveness
    6 based on the .15 uniform alternative without trading
    7 between sources within state boundaries. The cost

    8 difference between uniform alternative with
    9 interstate trading and without interstate trading is
    10 approximately two percent. If states adopt
    11 rate-based approaches, the cost could be expected to
    12 be higher. The RIA document indicated that costs
    13 could be as much as 30 percent higher if trading is
    14 restricted.
    15 Table 5-4 of the TSD shows the various NOx
    16 emissions reductions levels and the annual costs and
    17 cost effectiveness that the USEPA estimates for the
    18 potentially affected part of the electric power
    19 industry in the years 2003, 2005, 2007 and 2010. As
    20 shown in the table, the average costs per control
    21 season ton of NOx is removed under the 0.25 uniform
    22 alternative with trading for 2003 is $1,127 per ton
    23 of NOx removed. The Illinois EPA used this
    24 information and estimated the cost effectiveness to
    L.A. REPORTING (312) 419-9292
    78
    1 comply with its proposal of 0.25 pounds per million
    2 BTU rate-based NOx emission standard with no cap and
    3 trading program to be $1,465 (1990 dollars) per ton
    4 of NOx reduced in a 2003 control period, an increase
    5 of 30 percent in the average cost effectiveness
    6 under the 0.25 uniform alternative with trading.

    7 The Illinois EPA believes that the cost estimates
    8 are conservative. The proposal allows emission
    9 averaging among the Appendix F EGUs and certain
    10 units at Soyland Power. The Illinois EPA
    11 anticipates the cost effectiveness of this proposal
    12 to be much less than the estimated cost
    13 effectiveness of $1,465 per ton of NOx reduced when
    14 the affected sources participate in the mutually
    15 agreed upon NOx averaging plans.
    16 In summary, the results of Illinois EPA's
    17 modeling and analysis indicates that an emission
    18 rate of 0.25 pounds per million BTU for large EGUs
    19 is sufficient to demonstrate attainment of the
    20 one-hour ozone standard in the Metro-East/St. Louis
    21 area. All of these controls are assumed to be in
    22 place by May 1, 2003.
    23 The Illinois EPA has relied on the
    24 information contained in the NOx SIP Call and
    L.A. REPORTING (312) 419-9292
    79
    1 USEPA's guidance documents in developing the
    2 proposed Subpart V that requires the NOx emissions
    3 from large EGUs greater than 25 megawatts of
    4 electricity capacities to meet a rate-based NOx
    5 emission limit of 0.25 pounds per million BTU. The

    6 requirements of the proposed regulations will impact
    7 103 existing emission units in Illinois and will
    8 result in an overall 56 percent reduction in base
    9 2003 NOx emissions or a total of 63,550 tons of NOx
    10 reduced per ozone season. A number of control
    11 technologies are available to allow sources to meet
    12 the required level of control, although it is
    13 anticipated that the most likely control will be the
    14 use of combustion controls and some SCR or SNCR or
    15 some combination of such technologies. The cost
    16 effectiveness of NOx controls to meet the reduction
    17 requirements of the proposed rule has been
    18 determined to be, in 1990 dollars, $1,465 per ton of
    19 NOx reduced. Thank you, Mr. Mahajan.
    20 HEARING OFFICER BEAUCHAMP: All right. Ms.
    21 Herst, does the Agency have anything further they'd
    22 like to offer in support of this proposal?
    23 MS. HERST: No.
    24 HEARING OFFICER BEAUCHAMP: All right. We're
    L.A. REPORTING (312) 419-9292
    80
    1 going to break for lunch then. I have ten after one
    2 on my watch now. An hour and 15 minutes from now
    3 will be 2:25 and we'll break for lunch and reconvene
    4 at 2:25. I guess we'll break for lunch and we'll

    5 reconvene at 2:30 to make it even.
    6 (Whereupon, after a short
    7 break was had, the
    8 following proceedings
    9 were held accordingly.)
    10 HEARING OFFICER BEAUCHAMP: Before we enter the
    11 question period, Ms. Herst, does the Agency have any
    12 other matters they'd like to introduce before?
    13 MS. HERST: Yes. Mr. Lawler is going to speak
    14 a little bit on our economic and budgetary analysis.
    15 HEARING OFFICER BEAUCHAMP: Thank you,
    16 Mr. Lawler.
    17 MR. LAWLER: Yes. We had a few words we wanted
    18 to say about the document entitled "Agency Analysis
    19 of Economic and Budgetary Effects of Proposed
    20 Rulemaking" and the statement we wanted to make is
    21 contrary to the original submittal of this document,
    22 the Agency does anticipate that the rulemaking will
    23 result in an increase in costs to the Agency in the
    24 implementation of these regulations.
    L.A. REPORTING (312) 419-9292
    81
    1 The Agency did not originally indicate
    2 that there would be additional costs to the Agency
    3 because we did not believe that we'll be able to

    4 obtain additional monies to pay for the
    5 implementation efforts and because no specific
    6 technical support or equipment is needed. However,
    7 it is more accurate to indicate that these costs
    8 will occur and to make a general estimate of the
    9 cost.
    10 The Agency will submit a formal change to
    11 this document after completion of the first round of
    12 hearings. The preliminary estimate based on
    13 full-time equivalent work years and other materials
    14 is 300,000 to $400,000 the first fiscal year
    15 expected to be the state fiscal year FY03. This
    16 represents time spent in revising permits,
    17 monitoring compliance, reviewing reports and so
    18 forth. This should decline somewhat after the first
    19 year.
    20 As I indicated, a more refined estimate
    21 will be submitted later. The other aspects of the
    22 submittal will be unchanged and are based on cost
    23 estimates performed by the USEPA.
    24 HEARING OFFICER BEAUCHAMP: Very good. Thank
    L.A. REPORTING (312) 419-9292
    82
    1 you. Any other matters before we go to the question
    2 period?

    3 MS. HERST: No.
    4 HEARING OFFICER BEAUCHAMP: Thank you. As a
    5 preliminary matter, I note that you've got a few
    6 members up on your panel who have not yet been sworn
    7 in. If we can have the court reporter swear them in
    8 before we begin.
    9 MS. HERST: I think they were all sworn the
    10 first round. They didn't testify, but they --
    11 HEARING OFFICER BEAUCHAMP: Okay. Well, then
    12 that's taken care of.
    13 We will now proceed with questions for the
    14 Agency witnesses. As I previously mentioned, if you
    15 have a question for the Agency witnesses, please
    16 raise your hand and wait for me to acknowledge you.
    17 When I do acknowledge you, please state your name
    18 and the organization you represent, if any.
    19 Are there any questions for the Agency
    20 witnesses? And let me apologize at the outset, I'm
    21 a little bit newer to the whole process than maybe
    22 some of the other Board members are so I'm not so
    23 familiar with people. I'm sure after the three days
    24 here, I will be. Your name first?
    L.A. REPORTING (312) 419-9292
    83
    1 MR. MILLER: My name is Scott Miller, Midwest

    2 Generation, Chicago.
    3 When the rule was being drafted, we
    4 commented on combustion turbine peaking units and
    5 exemptions being provided in the rule. Part of the
    6 testimony mentions 14 existing gas turbines. I
    7 think we own 12 of those.
    8 THE REPORTER: Could we have them step up if
    9 they are going to speak?
    10 HEARING OFFICER BEAUCHAMP: Could we get you to
    11 step up or move your chair towards the center or
    12 speak up so the court reporter can hear you a little
    13 better?
    14 THE REPORTER: Thank you.
    15 MR. MILLER: My question concerns existing
    16 combustion turbines. The testimony stated there
    17 were 14 that are affected by the rule. I think we
    18 own 12 of those. I've looked at the records over
    19 the last few years. They've only operated about one
    20 to 200 hours per year each. That's why we asked for
    21 an exemption based on a capacity factor of less than
    22 five percent.
    23 If we put them in, we probably wouldn't
    24 put in control technologies. We have averaged those
    L.A. REPORTING (312) 419-9292
    84

    1 using the averaging rule. However, the monitoring
    2 is very strict, Part 75 monitoring, require fuel
    3 full filled monitors and a lot of electronics all
    4 hooked up to a data acquisition system. Since Part
    5 75 reporting is the protocol, it would add an
    6 additional burden of keeping all the records and
    7 doing all the recording on our Part 75.
    8 HEARING OFFICER BEAUCHAMP: I'm sorry,
    9 Mr. Miller. Could I ask that we pause for a moment
    10 so that the court reporter can swear you in?
    11 Please swear him.
    12 THE REPORTER: Do you swear to tell the truth,
    13 the whole truth and nothing but the truth so help
    14 you God?
    15 MR. MILLER: Yes.
    16 HEARING OFFICER BEAUCHAMP: Sorry. Thank you.
    17 Please continue.
    18 MR. MILLER: So I guess I thought it was
    19 reasonable to at least exempt these small peakers
    20 using an exemption similar to a 1992 draft rule for
    21 NOx RACT. That would exempt these small turbines.
    22 My calculations show that they only emit about 200
    23 tons per year. I think the testimony had a couple
    24 thousand tons per year for all four units. So I
    L.A. REPORTING (312) 419-9292

    85
    1 thought five percent was a reasonable cut off, but I
    2 know there's another rule that would require us to
    3 put it in the SIP Call, but I think you have to look
    4 at this rule. It's a .25 rule for a one-hour
    5 nonattainment. We don't know the future of the SIP
    6 Call. It would be a large burden to have these low
    7 capacity factor units into the coal combustion
    8 turbine peaking units, which we own 14. I'm sure
    9 it's most of these 12 out of the 14. The Agency
    10 mentions that it was reasonable to include these
    11 large units in the program, the low capacity factor.
    12 MR. LAWLER: The point you raised is one that
    13 we did consider seriously and we talked with you
    14 about it and others as we went ahead with this
    15 rulemaking, but I think you raised one of the points
    16 which is that it will be required by Subpart W also
    17 as part of the SIP Call and so we think it's
    18 reasonable from that standpoint.
    19 Also, these are -- they're large units and
    20 they certainly could operate more often than a few
    21 hundred hours a control period and so rather than
    22 take the chance that we don't -- that we aren't
    23 monitoring -- that we aren't sufficiently monitoring
    24 for these, we thought it was reasonable to go ahead
    L.A. REPORTING (312) 419-9292

    86
    1 and put them in. Again, they're big units and they
    2 have the potential to operate a lot more than they
    3 do.
    4 MR. ROMAINE: And I could supplement one other
    5 point, because these are peaking units, the rule in
    6 Section 217.710 does specifically allow that they
    7 determine their NOx emissions by fuel-filled
    8 monitors. They are not required to install the more
    9 expensive continuous emission monitoring. So they
    10 are subject to a less extensive methodology for
    11 determining emissions. So that factor is already in
    12 there as well.
    13 MR. MILLER: I agree with that. The
    14 recordkeeping and the reporting are also another
    15 factor for Part 75. You have to have the computer
    16 operating system, you have to do electronic
    17 reporting with certain record types and then all the
    18 data has to be checked before it's submitted if you
    19 are going to use a Part 75 protocol and for 12 units
    20 for measuring only a few hundred tons, it's a huge
    21 burden. I'd rather spend the money on my 20 large
    22 units. It would be a better bet on those. Probably
    23 the noise of the air of the 16 of my 20 units would
    24 be -- wouldn't be worth the time in general for a
    L.A. REPORTING (312) 419-9292

    87
    1 few hundred times on a smaller unit.
    2 I could recommend that maybe we add
    3 another protocol to the monitoring. If we submit a
    4 monitoring plan that's similar to Part 75, that
    5 would capture the information. Part 75 does give
    6 you a default emission rate for the NOx. I could
    7 take that times 100 hours and come up with a real
    8 accurate number instead of spending hundreds of
    9 thousands of dollars to follow Part 75 protocol.
    10 That's another option, something other than Part 75
    11 to monitor emissions for low emitting units.
    12 HEARING OFFICER BEAUCHAMP: Thank you,
    13 Mr. Miller.
    14 MS. McFAWN: Oh, Mr. Miller, before you leave,
    15 did you have any other questions for the Agency?
    16 MR. MILLER: No.
    17 MS. McFAWN: Could I just ask, I was listening
    18 and I might not have grasped everything you had to
    19 say. You mentioned the cost for the monitoring and
    20 that's seems to be one of your major if not -- is
    21 that your major concern?
    22 MR. MILLER: Yeah. That's the major point.
    23 MS. McFAWN: And then you said it would cost
    24 hundreds of thousands of dollars. Would that be per

    L.A. REPORTING (312) 419-9292
    88
    1 unit or collectively?
    2 MR. MILLER: That would probably -- for each
    3 site, I would say 100,000 per site.
    4 MS. McFAWN: Per site being per peaker unit
    5 or --
    6 MR. MILLER: One site has eight peakers. One
    7 site has four. The rule does allow to not measure
    8 fuel at our common site. So you wouldn't have to
    9 monitor eight separate fuel meters. The electronics
    10 to get all that into a computer based system that
    11 has to follow the EPA protocol for Part 75 is where
    12 the manpower dollars go.
    13 The capital cost would be about 100,000
    14 per site, but the O & M would be burdensome. You're
    15 adding maybe a half -- you're doubling the work of
    16 the -- of each site to track these emissions. When
    17 you're in Part 75, you have to record not only when
    18 the one unit is operating, but when it's not
    19 operating. Those hours -- you have to have -- send
    20 a signal to the computer to tell that the unit is
    21 off for every hour during the ozone season. All
    22 I'll ask is that it be quality assured before it's
    23 submitted to the Agency if you're going to use Part
    24 75 recordkeeping and reporting. There's a lot

    L.A. REPORTING (312) 419-9292
    89
    1 easier ways to do it for the amount of emissions
    2 since they're such low emitters. That's why I
    3 recommended five percent cut off for capacity
    4 factor.
    5 MS. McFAWN: All right. And you said there's
    6 an easier way to do it. You mean the exception or
    7 an exemption or do you mean that there's an easier
    8 way than Part 75?
    9 MR. MILLER: Yes. There's an easier way than
    10 Part 75.
    11 MS. McFAWN: To part 75?
    12 MR. MILLER: An easier way.
    13 MS. McFAWN: And you mentioned you could
    14 propose such an alternative to the Agency and to the
    15 Board?
    16 MR. MILLER: Yes.
    17 MS. McFAWN: Is that something the Agency could
    18 entertain?
    19 MR. LAWLER: Yes.
    20 MS. McFAWN: Yes. Perhaps through the course
    21 of these hearings, you could work together on that
    22 and maybe propose something to the Board or submit
    23 it to the Board independently or collectively and
    24 also, I think the Board would be very interested in

    L.A. REPORTING (312) 419-9292
    90
    1 the costs you estimated because even just in these
    2 few questions, I learned a lot more, but not the
    3 hard dollars.
    4 I also have another question. The Agency
    5 mentioned that you will be subject to the NOx rules,
    6 the NOx SIP Call rules. I think you mentioned the
    7 same thing. I assume that means to Subpart W. Is
    8 that what you were referring to?
    9 MR. MOORE: Yes.
    10 MS. McFAWN: The Agency is indicating yes.
    11 So does that mean the money you invest,
    12 should you equip these with monitors, fuel monitors,
    13 these sites, would that be money that you will have
    14 to invest in 2004 because of Subpart W?
    15 MR. MILLER: With Subpart W there's no option.
    16 So I guess I would have to invest the same amount of
    17 dollars.
    18 MS. McFAWN: Okay. So you're just really
    19 seeking to put that off a year?
    20 MR. MILLER: Yeah. And I mentioned that you
    21 have to look at this rule as a separate rulemaking.
    22 We don't know the future of Subpart W.
    23 MS. McFAWN: That's correct.

    24 MR. MILLER: One way you could look at it, yes,
    L.A. REPORTING (312) 419-9292
    91
    1 I'm putting the costs off for a year and another way
    2 I'm looking at it as it's burdensome to put this
    3 monitoring on a peaking unit, an existing peaking
    4 unit.
    5 MS. McFAWN: That's a valid point.
    6 MR. MILLER: Subpart W had some options. I'd
    7 probably pursue that --
    8 MS. McFAWN: Okay.
    9 MR. MILLER: -- Part 96 protocol so...
    10 MS. McFAWN: Versus the Part 75?
    11 MR. LAWLER: Yes. Part 96 and 75 work together
    12 with Subpart W, so there's really no options for
    13 more monitoring. However, this rule the Agency --
    14 Part 75 is a good rule. It's going to give you real
    15 accurate emissions. That's probably what the Agency
    16 was thinking with this rulemaking, but I think for
    17 units that run maybe one or 200 hours a year at low
    18 capacity factors there can be alternatives.
    19 MS. McFAWN: All right. And that would be what
    20 you would be investigating if you and the Agency
    21 were to talk about alternatives to Part 75?
    22 MR. MILLER: Yes.

    23 MS. McFAWN: Thank you for answering those
    24 questions.
    L.A. REPORTING (312) 419-9292
    92
    1 MR. MILLER: Sure.
    2 HEARING OFFICER BEAUCHAMP: Thank you,
    3 Mr. Miller.
    4 Other questions for the Agency?
    5 Mr. Rieser?
    6 MR. RIESER: David Rieser with the law firm of
    7 Ross & Hardies. I'm here on behalf of Amerem. Can
    8 you hear me okay?
    9 I have a couple of questions about the
    10 language in the proposal and some other issues.
    11 Turning to 217.706A the standard is based on a,
    12 quote, control period average, unquote, for that
    13 unit.
    14 What's the definition for a control period
    15 average? Is that defined in the rules? Are there
    16 rules adopted by the Board?
    17 MR. MOORE: Okay. Well, that is -- the control
    18 period average would be the average emissions in
    19 pounds per million BTU over the entire control
    20 period. So that it would be determined -- for an
    21 individual unit, it would be determined by dividing

    22 the number of pounds of NOx that were emitted during
    23 a control -- during the entire control period by the
    24 number of million BTU of heat input sustained
    L.A. REPORTING (312) 419-9292
    93
    1 throughout the entire control period.
    2 MR. RIESER: Thank you. With respect to the
    3 NOx averaging described in 708, how is that intended
    4 to work administratively?
    5 MR. ROMAINE: I guess, do you have specific
    6 areas that you're interested in or just very
    7 generally?
    8 MR. RIESER: Well, for example -- let's start
    9 with the general and let's go to the specific. I
    10 mean, you've got two -- is it two sources come to an
    11 agreement and then go to the Agency and have permits
    12 written for each of them that embody that agreement
    13 or how is that going to work in practice?
    14 MR. ROMAINE: I think I'm going to back up and
    15 say we believe that there's nothing in these rules
    16 that really requires us to review a particular
    17 averaging plan as such.
    18 Our concern is simply to make it clear
    19 that a particular unit qualifies for averaging, it's
    20 on the list and that there's an understanding of how

    21 relevant information has to be submitted. So the
    22 thought would be that they would apply to us in a
    23 federally enforceable permit, we review that they're
    24 on the list, we'd agree what the appropriate
    L.A. REPORTING (312) 419-9292
    94
    1 procedures would be for confirming data substitution
    2 and also the administrative details of the process
    3 and beyond that, the identification of particular
    4 averaging plans could be something that could be
    5 submitting for the actual compliance report.
    6 So it's really an authorization to perform
    7 averaging that would be made in the permit. It
    8 would not be a review of a particular averaging
    9 plan.
    10 MR. RIESER: So the permit itself would specify
    11 an emission rate that might be different than .25?
    12 MR. ROMAINE: No. There's no reason even for
    13 the permit to do that. It would simply say this
    14 unit is qualified to perform averaging. It's on the
    15 list. There are some fine, you know, clarifying
    16 conditions to make it as data substitution
    17 provisions and the Acid Rain Program apply and that
    18 averaging compliance reports have to be submitted by
    19 a responsible official. If there are several

    20 parties, you need responsible officials from all the
    21 parties, but there wouldn't be as elaborate
    22 averaging provisions as you might find in the Acid
    23 Rain Program.
    24 We're trying to keep this very simple and
    L.A. REPORTING (312) 419-9292
    95
    1 we have confidence that the Acid Rain Program gives
    2 excellent emission data. The data should be there,
    3 if we could just have the appropriate reports and
    4 signatures filed with us by November 30th of each
    5 year.
    6 MR. RIESER: So the averaging really isn't
    7 embodied in the permit other than the authorization
    8 to use it as a method for evaluating and determining
    9 compliance that the November 30th report date that
    10 you got set in this rule?
    11 MR. ROMAINE: That's correct.
    12 MR. RIESER: Subpart -- excuse me, Subsection
    13 (f) of 708 says if averaging is used to demonstrate
    14 compliance, the effect of the failure to demonstrate
    15 compliance shall be the compliance status of each
    16 EGU pursuant to Section 217.706A as if the NOx
    17 emission rates of such EGU were not averaged.
    18 What is that intended to do, that section?

    19 MR. MOORE: As I said in my testimony, it
    20 simply provides that overcomplying units are in
    21 compliance with the rule and undercomplying units
    22 are undercomplying by the magnitude of their
    23 undercompliance.
    24 For example, I talked about a unit that
    L.A. REPORTING (312) 419-9292
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    1 might average .35 pounds per million BTU and a unit
    2 that might average .15, but suppose it turned out
    3 that one of the units emitted a little more, say,
    4 the 0.15 pound unit emitted 0.16, that would throw
    5 the undercomplying unit out of compliance.
    6 Similarly, of course, the overcomplying
    7 unit could be emitting its authorized -- expected,
    8 let's say, 0.15, but the undercomplying unit would
    9 be emitting at a little more than .035 (sic). It
    10 could work either way, but if compliance is not
    11 shown by averaging, the overcomplying unit is home
    12 scott-free as long as it's not in itself above .25
    13 and the undercomplying unit is undercomplying by
    14 whatever its actual emission rate differs from 0.25.
    15 MR. RIESER: So would the undercomplying unit
    16 in that example, say the unit that's emitting a .25
    17 rate, be treated for enforcement purposes exactly

    18 the same as another unit that was emitting .25 that
    19 hadn't -- didn't include an averaging plan as part
    20 of its permit?
    21 MR. MOORE: Yes.
    22 MR. RIESER: So even though it had worked with
    23 another company to develop the averaging plan used
    24 as a compliance methodology, it would be treated the
    L.A. REPORTING (312) 419-9292
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    1 same as --
    2 MR. MOORE: Right. It's grievance would be
    3 against the company that failed to provide
    4 sufficient --
    5 MR. ROMAINE: I guess that's the answer in
    6 terms of how it would be treated under the rule.
    7 Obviously, we can't speak to how the actual
    8 enforcement action would be pursued in this
    9 particular case.
    10 MR. RIESER: Okay. Well, if you can't speak to
    11 that, what's the purpose of this particular section
    12 because it seems to identify a particular -- make a
    13 particular statement about units that use certain
    14 compliance methodologies and how they're to be
    15 treated as opposed to other units that are also out
    16 of compliance for entirely different reasons?

    17 So I guess the point is what's -- why are
    18 these companies singled out in this way and this
    19 particular statement made?
    20 MR. LAWLER: I guess, maybe to follow through
    21 on the other answers, the options you would have
    22 here would be to say that both entities that
    23 participated in this averaging could be considered
    24 out of compliance because the average itself was out
    L.A. REPORTING (312) 419-9292
    98
    1 of compliance and what we're trying to do here is
    2 say that obviously if there was one of the companies
    3 or one of the units that is overcomplying, there's
    4 no reason to think he would be enforced against or,
    5 you know, that would be the logical approach and so
    6 it would be the unit that really is not meeting the
    7 .25 limit that's at risk, if they do something like
    8 this.
    9 MR. RIESER: So there really is not an attempt
    10 by the Agency to include as one of the factors for
    11 evaluating, say, penalties that one company had an
    12 averaging plan that didn't work and another company
    13 didn't have an averaging plan at all?
    14 MR. LAWLER: We're not trying to get into --
    15 in -- by this particular statement what penalties

    16 would or wouldn't be -- you know, would or wouldn't
    17 be applied to the situation, but we want to try to
    18 differentiate between the two different units
    19 because one made it and one didn't.
    20 MR. RIESER: So what you're really saying is
    21 it's the -- just reminding people that the
    22 overcomplying unit that was subject to an averaging
    23 plan that failed, as long as they're meeting the .25
    24 limit, they're still in compliance?
    L.A. REPORTING (312) 419-9292
    99
    1 MR. LAWLER: That's right.
    2 MR. RIESER: Looking again at 708C, you say
    3 averaging under the subpart must be authorized
    4 through federally enforceable permit conditions for
    5 such EGU. Am I correct, Mr. Romaine, based on your
    6 statement that what those conditions will be is a
    7 section in the permit that will simply authorize the
    8 use of averaging not the establishment of the
    9 different emission level than .25?
    10 MR. ROMAINE: That's correct. That's my
    11 understanding and that's what the language
    12 specifically says, averaging must be authorized. It
    13 does not provide for review of a specific averaging
    14 plan. It certainly does not provide for an

    15 averaging plan that has to be reviewed and revised
    16 every time the plan changes.
    17 MR. RIESER: Thank you.
    18 MS. McFAWN: Do you have to identify who you'll
    19 be averaging with?
    20 MR. ROMAINE: No. Well, not in times of the
    21 permit. Obviously, when you submit your compliance
    22 demonstration we'll obviously have to know who the
    23 team is.
    24 MS. McFAWN: Thank you, Mr. Romaine.
    L.A. REPORTING (312) 419-9292
    100
    1 MR. RIESER: Well, let me clarify that, so when
    2 you submit your permit application or modification
    3 that says you intend to use averaging as a
    4 compliance methodology, you don't have to say in
    5 that modification who you're averaging with or
    6 whether or not you have an averaging agreement?
    7 You're simply saying that that will maybe be one of
    8 the mechanisms that you would use for achieving
    9 compliance, is that correct.
    10 MR. ROMAINE: That's my understanding, yes.
    11 MR. RIESER: And so the only time you really
    12 have to identify who you're averaging with is if at
    13 the November 30th report date, of course, that

    14 person can't average with somebody else or use the
    15 same credits for averaging.
    16 MR. ROMAINE: That's correct.
    17 MR. RIESER: I think you addressed the Agency
    18 about the statement of reasons, but I need to ask it
    19 here anyway, why is the averaging limited to
    20 Appendix F sources?
    21 MR. LAWLER: I think this was -- probably was
    22 addressed, but it's limited to Appendix F sources
    23 because these are the larger sources in the state
    24 from one standpoint. Secondly, the air quality
    L.A. REPORTING (312) 419-9292
    101
    1 analyses that were done assumed that it was these
    2 sources that met the .25 limit in the modeling that
    3 Rob explained a little bit earlier.
    4 MR. ROMAINE: And I can add to that, the
    5 purpose of this rule is to reduce emissions. If we
    6 allowed averaging from new units that are developed,
    7 they almost certainly will have emission rates that
    8 are well below .25 pounds per million BTU. So by
    9 adding a new unit that adds emission to the
    10 atmosphere would -- if it were allowed to average,
    11 perpetuate higher emissions and our goal is, in
    12 fact, to average across existing emission units to

    13 get reductions overall to .25 pounds per million BTU
    14 pursuant to this rule.
    15 MR. RIESER: What happens with this rule if and
    16 when Subpart W becomes effective? Is there any
    17 coordination between the two or how would things
    18 work?
    19 MR. LAWLER: The rule is written that it will
    20 stand. This rule, once adopted, would just become
    21 effective.
    22 MR. RIESER: When -- if and when Subpart W
    23 becomes effective, are there issues of coordination
    24 between the two rules?
    L.A. REPORTING (312) 419-9292
    102
    1 MR. LAWLER: I'm not sure I understand your
    2 question. Are there -- is there coordination
    3 between the two rules, but a company would have to
    4 meet both rules. Our general thought is that if
    5 they meet the .15 rule -- they meet -- I'm sorry,
    6 they meet the NOx SIP Call rule, which is Subpart W
    7 rule, in almost all instances they would be meeting
    8 this one, too, or we would assume that they'll be
    9 meeting this one also.
    10 MR. RIESER: Certain provisions are made in the
    11 rule for Soyland Power. I am interested in who they

    12 are and what the basis for this specific
    13 identification of them is.
    14 MR. ROMAINE: Soyland Power is a real
    15 cooperative entity. Recently it developed its own
    16 peaking station in Alsey, Illinois, which is a
    17 little bit southwest of Jacksonville. They, in
    18 fact, purchased used turbines from I think a utility
    19 in Arizona. Their turbines, given their age, cannot
    20 comply with the .25 pounds per million BTU per hour
    21 limit. They would otherwise qualify as new units
    22 for purposes of Illinois. The only realistic way
    23 for them to operate in compliance with this rule
    24 would be to undertake emission averaging. We would
    L.A. REPORTING (312) 419-9292
    103
    1 not expect it to be feasible for them to do the
    2 measures to actually reduce the emissions from their
    3 units given their age and again, they're in the
    4 operations of peaking facilities. So the purpose of
    5 this was to accommodate that very special
    6 circumstance of this real cooperative and purchased
    7 used equipment that for Illinois purposes counts as
    8 new, but will nevertheless have to average to
    9 demonstrate compliance.
    10 MR. RIESER: Did any of their units commence

    11 operation as of January 1st, 2000?
    12 MR. ROMAINE: I believe so.
    13 MR. RIESER: There was testimony from
    14 Mr. Kaleel this morning regarding part of the
    15 attainment demonstration for Metro-East was --
    16 included in that was in the necessity for Missouri
    17 to adopt its own standards applying both to the
    18 eastern west half or two-thirds of the state. Where
    19 is Missouri in that process?
    20 MR. KALEEL: Missouri has completed their
    21 rulemaking that would implement or require the
    22 limits that I had shown on my slide, the .25 pounds
    23 per million BTU in the eastern one-third, .35 pounds
    24 per million in the western two-thirds. They
    L.A. REPORTING (312) 419-9292
    104
    1 completed that rulemaking this past spring and it
    2 requires an implementation date of 2003, and
    3 effective date.
    4 MR. RIESER: In Mr. Lawler's last statement he
    5 talked about the potential for additional costs
    6 associated with the adoption of those -- of this
    7 rule. I, unfortunately, I don't recall from Subpart
    8 W proceedings whether these are more different in
    9 addition to the Subpart W anticipated costs or how

    10 they relate to what costs were anticipated with the
    11 implementation of Subpart W.
    12 MR. LAWLER: Well, the point that I was making
    13 was that the cost to the Agency to implement the
    14 regulations -- I don't remember what we had in there
    15 for Subpart W, but the concept would be the same
    16 that -- I mean, obviously there will take -- there
    17 will be some resources within the Agency that would
    18 have to be dedicated to implementing this particular
    19 set of rules, but we may not be given any additional
    20 resources from either the state or the federal
    21 government to do that. So it makes it a little hard
    22 to make these estimates when you're just going to
    23 have to absorb it. That was the point that I wanted
    24 to make in that.
    L.A. REPORTING (312) 419-9292
    105
    1 MR. RIESER: I don't have anything further.
    2 Thank you very much.
    3 HEARING OFFICER BEAUCHAMP: Thank you,
    4 Mr. Rieser. Are there any other questions for the
    5 Agency? Yes, sir?
    6 MR. MURRAY: My name is William Murray. I'm
    7 with the City of Springfield office of public
    8 utilities and we're affected sources.

    9 THE REPORTER: Could you please stand up here?
    10 Thank you. There's an echo.
    11 MR. MURRAY: I'd like to try to clarify a
    12 couple of the items in the prefiled testimony.
    13 Mr. Kaleel, in the last sentence of the first full
    14 paragraph of page five of your prefiled testimony
    15 you say implementation of the NOx SIP Call in 2004
    16 should help to maintain ozone levels in years after
    17 the area's 2003 attainment date. Are you inferring
    18 that this proposal would not be sufficient to
    19 maintain attainment after 2003?
    20 MR. KALEEL: I guess what I was saying there is
    21 that the NOx SIP Call will provide additional
    22 benefit to the area and it will help keep the area
    23 in attainment.
    24 MR. MURRAY: A cushion so to speak?
    L.A. REPORTING (312) 419-9292
    106
    1 MR. KALEEL: Kind of a cushion, yeah.
    2 MR. MURRAY: Okay. Mr. Lawler, I have a couple
    3 questions on your testimony that was prefiled. On
    4 pages two and three you discussed the possibility of
    5 USEPA extending the attainment deadline to May 2004.
    6 If this extension was instituted and how does that
    7 relate to the pending litigation regarding the bump

    8 up? I believe it's the Sierra Club case.
    9 MR. LAWLER: First of all, you're correct or at
    10 least our understanding of what USEPA is considering
    11 at this point is whether to change attainment dates
    12 for areas like St. Louis to the 2004 date instead of
    13 the 2003 date and it is something that they're
    14 working on and they're considering and their legal
    15 folks are trying to figure out whether it's the
    16 right thing to do or not the right thing to do, but
    17 even if they should end up doing that as far as the
    18 court case that you mentioned, the Sierra Club court
    19 case, we don't know if the Court would end up
    20 accepting that 2004 date as the new attainment date
    21 for Metro-East. So we feel that the state would
    22 still be at risk for getting a bump up in the
    23 Metro-East because the Court could do -- end up
    24 doing anything. The Court may not listen to EPA
    L.A. REPORTING (312) 419-9292
    107
    1 even if EPA ends up doing this. So we sort of think
    2 that we're taking maybe the responsible position or
    3 prudent position at this point to keep the area from
    4 being bumped up.
    5 MR. MURRAY: Okay. So in other words, even if
    6 the extension were to be granted, barring the Court

    7 making some rulings on that extension, you would
    8 think the Board would still need to proceed with
    9 Subpart V?
    10 MR. LAWLER: That's correct.
    11 MR. MURRAY: Okay. And continuing on a line
    12 that Mr. Rieser was asking you about the interplay
    13 between Subpart V and Subpart W assuming all the
    14 contingencies that would bring Subpart W in full
    15 effect for example 9.9 of the Equal Protection
    16 Act -- or the Environmental Protection Act, in
    17 Illinois if all of those contingencies played out I
    18 believe your testimony was that in all cases you
    19 thought that if you -- a utility was in compliance
    20 with Subpart W that they would be in compliance with
    21 Subpart V?
    22 MR. LAWLER: Well, you changed my words a
    23 little bit there, but --
    24 MR. MURRAY: Well, you said in most instances.
    L.A. REPORTING (312) 419-9292
    108
    1 MR. LAWLER: We probably never should say
    2 never, but we think certainly in almost all cases or
    3 maybe all case --
    4 MR. ROMAINE: I want to jump in. I'm sure you
    5 can come up with an exception where that wasn't the

    6 case.
    7 MR. MOORE: Right.
    8 MR. MURRAY: Then I understand the answer to be
    9 that in spite of the budget number that we have
    10 under Subpart W that's based on an 8 percent growth
    11 factor and I believe there was a lot of testimony in
    12 the Subpart W hearings to the effect that in
    13 Illinois the utilities would actually be in
    14 compliance with a level or emission rate much lower
    15 than .15, and your opinion would still be there
    16 might be a possibility that there will be somebody
    17 out there that still could not have to comply with
    18 Subpart V and still comply with Subpart W?
    19 MR. MOORE: Sure.
    20 MR. LAWLER: I guess it's possible.
    21 MR. MURRAY: So would it be your testimony that
    22 there would be no need to repeal Subpart V at any
    23 time or include sum sort of self-repealing provision
    24 within it should Subpart W become fully effective?
    L.A. REPORTING (312) 419-9292
    109
    1 MR. LAWLER: Well, we think that Subpart V
    2 should end up staying there and for a number of
    3 reasons that we've all been either talking to or
    4 talking around. There are a lot of -- there are

    5 legal challenges that are still out there for the
    6 NOx SIP Call and there's a lot of other reasons
    7 that -- it's probably good from the Metro-East
    8 standpoint to have a certain degree of certainty out
    9 there because we don't know.
    10 MR. MURRAY: I understand that. I was
    11 referring to if all those contingencies had come to
    12 pass and we have Subpart V, full proof, unchallenged
    13 with Subpart W, would there still be a need for
    14 Subpart V?
    15 MR. LAWLER: I guess we believe we'd be more
    16 comfortable with it staying, yes.
    17 MR. ROMAINE: Given the nature of things I
    18 think it would be appropriate to do it with a
    19 separate rulemaking if you did decide to repeal it.
    20 Just the nature of the legal system is such that who
    21 knows what the circumstance will be in the future.
    22 MR. MURRAY: And just so the record will kind
    23 of reflect what I'm getting to, would you agree
    24 there would be two sets of recordkeeping, reporting
    L.A. REPORTING (312) 419-9292
    110
    1 requirements under the rules that are different for
    2 the regulated community?
    3 MR. ROMAINE: Yes. Clearly one of the problems

    4 with saying you wouldn't have contradictions is the
    5 budget is based on a mass number of tons,
    6 allowances, where the rate-based rules is intact,
    7 the rate in terms of pounds per million BTU, you
    8 might meet the pounds per million BTU and not meet
    9 the times. You might meet the times and slightly go
    10 over the rate.
    11 MR. MURRAY: Yeah. But in the reports that the
    12 utilities would have to file would be actually
    13 different for each rule?
    14 MR. ROMAINE: Yes.
    15 HEARING OFFICER BEAUCHAMP: Do you have any
    16 further questions, Mr. Murray?
    17 MR. MURRAY: No. Are there any other questions
    18 for the Agency witnesses?
    19 THE REPORTER: Could he step up?
    20 HEARING OFFICER BEAUCHAMP: You might have to
    21 step up, sir.
    22 MR. RODRIQUEZ: I just have one question. For
    23 the record Gabe Rodriguez, I'm an attorney for
    24 Dynergy Midwest Generation. The only question I
    L.A. REPORTING (312) 419-9292
    111
    1 have really is a follow-up to Mr. Rieser's as well
    2 as about this interplay between Subpart V and

    3 Subpart W. The question is is whether the
    4 reductions that are achieved through compliance with
    5 this rule whether it's going to have any impact on
    6 your ability to -- the availability of early
    7 reduction credits under the other rule if the other
    8 rule does go final?
    9 MR. ROMAINE: I think the answer is obvious,
    10 but maybe we want to confer a little bit.
    11 MR. LAWLER: We should know the answer to that.
    12 HEARING OFFICER BEAUCHAMP: Let's go off the
    13 record.
    14 (Whereupon, a discussion
    15 was had off the record.)
    16 HEARING OFFICER BEAUCHAMP: We're back on the
    17 record.
    18 MR. LAWLER: I think Mr. Romaine's answer that
    19 it's obvious, but we just kind of wanted to make
    20 sure it was obvious, but there is -- they would be
    21 able to use early reduction credits.
    22 MR. RODRIGUEZ: They would be?
    23 MR. LAWLER: Yes.
    24 MR. RODRIGUEZ: It would not affect your -- the
    L.A. REPORTING (312) 419-9292
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    1 availability of claiming reductions achieved in 2002

    2 or 2003 to comply with this rule? This rule
    3 wouldn't have an impact on the ability to --
    4 MR. LAWLER: That' correct. It's a separate
    5 rulemaking.
    6 HEARING OFFICER BEAUCHAMP: Okay. Thank you.
    7 Thank you, Mr. Rodriguez. Mr. Rieser, again.
    8 MR. RIESER: Well, if I could briefly follow-up
    9 on that point. My recollection is that the Subpart
    10 W ERC provide only for reductions 30 percent below
    11 permitted levels. So as of 2003 the permitted level
    12 would at least be .25 -- .25 rate. So would they
    13 only provide -- would the rule only provide for
    14 early reduction credits in 2003 to the extent that
    15 they reduced 30 percent below that rate -- to the
    16 extent there are any ERCs available in 2003?
    17 MR. LAWLER: Let us just respond to that maybe
    18 in comments or at a later time.
    19 MR. RIESER: Perhaps at the next hearing.
    20 Maybe something we can discuss at the next hearing.
    21 MR. LAWLER: That would be fine.
    22 HEARING OFFICER BEAUCHAMP: Thank you, Mr.
    23 Rieser. Are there any further questions for the
    24 Agency witnesses? Any questions from the members of
    L.A. REPORTING (312) 419-9292
    113

    1 the Board present or staff?
    2 MS. McFAWN: I have some questions. I'm going
    3 to have to backtrack a little bit and maybe we've
    4 covered some of this ground, but my first question
    5 is -- I just want to verify that this rule is not
    6 filed under Section 9.9, is that correct?
    7 MR. LAWLER: That's correct.
    8 MS. McFAWN: Your statement of reason says that
    9 it is, but I couldn't see any nexus between the two.
    10 MR. LAWLER: The statement of reason says it is
    11 filed under 9.9 --
    12 MS. McFAWN: Yes.
    13 MR. LAWLER: Or 28.5?
    14 MS. McFAWN: Both.
    15 MS. HERST: It shouldn't be under --
    16 MR. LAWLER: If it says -- it's a misstatement
    17 that we'll check over that.
    18 MS. McFAWN: That's fine. I just want to
    19 verify that. Then this is a much broader question.
    20 I was curious as to why this rule is being imposed
    21 state-wide since a number of the sources are a
    22 downwind from East St. Louis? They don't seem to be
    23 contributing to the problem in East St. Louis and
    24 this rule, as I understand it, is intended to
    L.A. REPORTING (312) 419-9292

    114
    1 address the nonattainment of that area.
    2 MR. LAWLER: Actually, the -- I think we made
    3 in discussing the modeling this morning and in other
    4 statements that we've made, we tried to stress that
    5 the regionalness of the -- of getting the NOx
    6 reductions, that it isn't necessarily one particular
    7 plume from an individual plant, but the whole group
    8 of sources that are -- that contribute to the ozone
    9 problem and it, to some degree, there's an ozone
    10 soup out there and everybody is adding to the soup
    11 and so the analyses that have been done, we don't
    12 try to draw a distinction or magic line in the state
    13 that says this particular source contributes and
    14 that particular one doesn't because when you get
    15 into individual sources that's very difficult -- you
    16 know, a very difficult thing to do. So there's no
    17 magic line that we can draw and from that standpoint
    18 and from an equity standpoint this would apply to
    19 all the sources in the state and the modeling that
    20 was done essentially assumed all the sources in the
    21 state would be at that level.
    22 MS. McFAWN: So you didn't do any modeling that
    23 would just assume, like, the impact of the Missouri
    24 sources and maybe down state Illinois sources?
    L.A. REPORTING (312) 419-9292

    115
    1 MR. LAWLER: No. That's correct.
    2 MS. McFAWN: But when you studied Lake Michigan
    3 you had a boundary line, didn't you? The Lake
    4 Michigan ozone area.
    5 MR. LAWLER: When we studied, and Rob may want
    6 to add to this, but when we studied the Lake
    7 Michigan area we drew boundaries that were out away
    8 from the areas far enough that anything coming in
    9 from outside that area, while it still could come
    10 into the area, it still comes into from outside the
    11 square that Rob showed us as Grid M, it will come
    12 in, but the area that's inside contributes more and
    13 again, even in none of that modeling did we try to
    14 say that this group of sources does contribute and
    15 that group of sources doesn't contribute because in
    16 effect everybody is contributing to the problem and
    17 so when you go back and take that down to an
    18 Illinois level you really can't get into individual
    19 sources and try to say that this person is causing
    20 or not causing the problem because of the soup
    21 situation.
    22 MR. KALEEL: I would agree with the way Dennis
    23 characterized it and I guess I'm a little confused
    24 by the one question about dividing Illinois for the

    L.A. REPORTING (312) 419-9292
    116
    1 Lake Michigan region. We did not do that. The
    2 applicability of the NOx reductions for the Lake
    3 Michigan attainment plan rely on state-wide
    4 application of emission limits as well.
    5 MS. McFAWN: Maybe I misunderstood some of the
    6 overheads that Mr. Lawler relied on; namely, the one
    7 that you didn't have a copy of in your attachment.
    8 MR. LAWLER: Yes.
    9 MS. McFAWN: We just note that for the record.
    10 I have seen it before at other NOx hearings, but I
    11 thought for sure you told us there was a boundary
    12 there and it was drawn in blue and it was where
    13 they took the readings to distinguish between an
    14 area south of Lake Michigan and further down state
    15 of Illinois?
    16 MR. LAWLER: This was -- there was a particular
    17 focus that was part of the LADCO study back in the
    18 early 90s and for purposes of that study we put in a
    19 very dense monitoring network in the area right
    20 around Lake Michigan and that's probably what you're
    21 thinking of on the chart. That's where we ended up
    22 because that's where we really wanted to get the
    23 dense measurements of the ozone and the ozone
    24 precursors because, to some degree, we are also

    L.A. REPORTING (312) 419-9292
    117
    1 trying to figure out the impact of the lake at that
    2 point. So we put a very dense network of the
    3 monitors in the areas right around the lake and to
    4 kind of go with that we put these aircraft -- the
    5 aircraft ended up flying in the same area and to the
    6 south, the aircraft had to cut across someplace to
    7 take their measurements and that's where they took
    8 them and we were able to find out from those
    9 aircraft measurements that you did have this, I'm
    10 going to say soup, that was coming in from the -- in
    11 that case that was the southerly wind. It was
    12 coming in from the south into the area.
    13 So that particular chart didn't mean to
    14 say that -- there's two points, it didn't mean to
    15 necessarily say that that was a beginning point or
    16 an ending point or anything else, and then the
    17 second point is it was also done almost ten years
    18 ago now and the modeling -- we can model much bigger
    19 areas also right now, but the main point is there
    20 was no particular reason for that line.
    21 DR. FLEMAL: Do we ever encounter ozone
    22 exceedances on other than southerly wind conditions?
    23 MR. LAWLER: Yes.
    24 DR. FLEMAL: So it is not true that the

    L.A. REPORTING (312) 419-9292
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    1 exceedances always occur in a roughly northerly
    2 direction from the main source?
    3 MR. LAWLER: And maybe some of the confusion is
    4 because of that example that I used with what
    5 Ms. McFawn was talking about was a southerly wind
    6 and southerly wind is probably the most common, but
    7 we do get exceedances and violations with winds from
    8 other directions also, but that particular example
    9 was a southerly wind.
    10 DR. FLEMAL: Okay. And you also choose to show
    11 us when you were talking about Grid M the southern
    12 line and I think you were talking at that stage
    13 about this showed that there was movement from south
    14 to north into Grid M, that it was an outside source
    15 and having a southerly boundary and the implications
    16 were that things come from the south and go towards
    17 the north and are you telling us that that is maybe
    18 common, but it's not an exclusive situation?
    19 MR. LAWLER: That's correct. It's probably an
    20 oversimplification on our part for purposes of
    21 trying to explain the concept and we may have said
    22 it a little stronger than we should have, but it's
    23 the concept that we are trying to explain. So

    24 that's yes to answer your question.
    L.A. REPORTING (312) 419-9292
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    1 MS. McFAWN: Now, I have a series of very
    2 detailed questions so anybody jump in if they have a
    3 bigger question that's related to the one I'm going
    4 to pose. I was reading over the parts in the
    5 language of the rule and because when push comes to
    6 shove sometimes we want to modify language in the
    7 rule, but we are reluctant to do so from that
    8 proposed by the Agency unless we fully understand
    9 the ramifications of such changes. That's why my
    10 questions may be somewhat detailed.
    11 Beginning with the purpose statement, in
    12 other sections; namely, Subpart W and the subpart
    13 you will discuss tomorrow you talk about the control
    14 period in the purpose sections as being the ozone
    15 control period. Would that be proper to do so in
    16 this case? You modify control period with the word
    17 ozone is what I'm asking.
    18 MR. LAWLER: It's an ozone control period so...
    19 MS. McFAWN: Okay. So we could parallel the
    20 language of the other two parts with no problem?
    21 MR. LAWLER: Yes.
    22 MS. McFAWN: Subpart W also has a further

    23 explanation of the purpose which is -- explains that
    24 the purpose is more than just to control NOx and I
    L.A. REPORTING (312) 419-9292
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    1 wonder if the Agency could consider either a phrase
    2 or a second sentence that would summarize what this
    3 Subpart V is intended to do. I won't ask you to do
    4 that now, but maybe in the future for the next
    5 hearing. Then also as part of this, I find it
    6 curious that we have defined control period here as
    7 May 1 through the 30th beginning in 2003. That
    8 would seem to work, but we do have a definition of
    9 control period currently proposed in Subpart W at
    10 Part 211 which will cause a problem.
    11 MR. LAWLER: If we understand your question
    12 correctly, Subpart W now identifies a period for the
    13 first year of May 31st through September 30th to
    14 make it consistent with what the court decision was
    15 on the -- when the NOx SIP Call should begin and
    16 then after that we say that it's -- it would be
    17 applicable that the control period for purposes of
    18 that is May 1st through September 30th, and the
    19 reason we put this in here is for purposes of this
    20 subpart. We wanted to make sure it was clear that
    21 the control period is May 1st through September 30th

    22 for this subpart.
    23 MS. McFAWN: Well, what I guess I'm asking you
    24 to look to is the language proposed at Section
    L.A. REPORTING (312) 419-9292
    121
    1 211.1515 and make sure that it doesn't apply to this
    2 Subpart V because it does have that caveat about the
    3 year 2004.
    4 MR. LAWLER: Okay. We'll check that.
    5 MS. McFAWN: Okay. Another general question
    6 about definitions, as I can determine we have never
    7 defined the word EGU, electric generating unit, and
    8 I'm wondering if that would not be prudent to do. I
    9 couldn't find it as far as the definition goes.
    10 MR. LAWLER: We'll check that.
    11 MS. McFAWN: Would you like to answer that
    12 tomorrow?
    13 MS. KROACK: Certainly.
    14 MS. McFAWN: That was Laurel Kroack.
    15 THE REPORTER: Could you spell the last name?
    16 MS. KROACK: Could you spell your last name to
    17 make sure it's correct?
    18 MS. KROACK: K-r-o-a-c-k.
    19 MR. LAWLER: She's a little hoarse today.
    20 MS. McFAWN: That's fine. It will be relevant

    21 tomorrow. Sometimes in the rules you say person,
    22 sometimes you say owner/operator and sometimes you
    23 say responsible person. I assume that there are
    24 reasons for using each one of those terms as opposed
    L.A. REPORTING (312) 419-9292
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    1 to just using the owner/operator throughout. I
    2 shouldn't assume that, I'm asking. Is there a
    3 reason for each one of those terms being used? If
    4 you'd like, I can cite you to the sections.
    5 MR. LAWLER: Maybe we can get the cites from
    6 you and we'll check it.
    7 MS. McFAWN: Sure. Okay. The cite where
    8 person is used is Section 217.706 and the
    9 responsible person is the one about concerning
    10 certification which is -- actually, it's a
    11 responsible official, at Section 217.712.
    12 MR. ROMAINE: Responsible official certainly
    13 has a very specific usage. It identifies a
    14 particular person that has submitted Title 5
    15 application for a facility and provides an
    16 authoritative signature for the filing of the report
    17 from the Agency.
    18 MS. McFAWN: And that is a better person than
    19 the owner or operator of the source?

    20 MR. ROMAINE: Yes, it is. For that particular
    21 -- for purposes of reporting, it is certainly much
    22 more appropriate to use the term responsible
    23 official.
    24 MS. McFAWN: Thank you. That answers a large
    L.A. REPORTING (312) 419-9292
    123
    1 part of my question.
    2 At Section 217.708, the NOx averaging
    3 rule, Subparagraph (a) the last clause defines that
    4 the units must have commenced commercial operation
    5 on or before January 1st of 2000. Someone asked you
    6 if that's actually a fact at Soyland Power and you
    7 responded yes, that there were some that commenced
    8 prior to that date and so maybe my question is moot,
    9 but I was wondering when I read that, does that
    10 clause just modify units at Soyland Power or units
    11 at other EGUs?
    12 MR. ROMAINE: It simply modifies Soyland Power.
    13 MS. McFAWN: Thank you.
    14 MR. ROMAINE: Soyland Power actually has five
    15 peaking units there. Only two of them are above
    16 the about 25 megawatts. When I questioned when they
    17 started operation, they certainly have had trouble
    18 actually keeping them operating. So they've met the

    19 date, but I'm not sure if they're operating at the
    20 present time or they're back under repair again.
    21 MS. McFAWN: Can they average -- they can't
    22 average across those five then, can they?
    23 MR. ROMAINE: The smaller three units don't
    24 qualify as EGUs for the purpose of this rule --
    L.A. REPORTING (312) 419-9292
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    1 whatever this thing is.
    2 MS. McFAWN: Thank you.
    3 MS. LIU: Good afternoon. As I understand it,
    4 this is a rate-based rule versus a rule based on
    5 total emissions. I was wondering is there a
    6 mechanism in place that would limit the total BTUs
    7 and therefore limit the total pounds of NOx?
    8 MR. LAWLER: No, not in this rule.
    9 MS. LIU: Could you describe to me the
    10 rationale or the history behind why this was made a
    11 rate-based rule versus a rule based on total
    12 emissions?
    13 MR. LAWLER: Actually, most of our rules -- let
    14 me rephrase that. Typically, our rules are
    15 rate-based rules and most rules probably in other
    16 states are rate-based rules and unusual -- the NOx
    17 SIP Call is the one that's a little more unusual

    18 because it actually does limit -- provide a state
    19 limit, a state budget, on it and that was the way
    20 the federal government decided to do it and there is
    21 some -- certainly some rationale for doing that, but
    22 to make this one more consistent with the rules that
    23 we have in the state at this point and which we have
    24 found, you know, generally effective, we made this
    L.A. REPORTING (312) 419-9292
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    1 one a rate-based rule and it will be easier for --
    2 for people to read and I think it will have maybe
    3 more meaning to some of the industrial sources in
    4 that kind of an approach.
    5 MS. LIU: To follow-up on some of what
    6 Mr. Rieser said about companies cooperating to
    7 average their emissions, could you help me to
    8 picture how owners and operators would contact each
    9 other so that they could begin the averaging
    10 process? Will they need to register with the IEPA?
    11 Will they set up their own network?
    12 MR. LAWLER: We won't, ourselves, be in any
    13 kind of a position to suggest to any of these
    14 companies that they should be considering averaging
    15 with another company or not. It will be totally up
    16 to the companies themselves and the utilities in the

    17 state are very well aware of all these rulemakings
    18 and are very knowledgeable on this, and I think
    19 probably it's a situation where the companies will
    20 end up contacting each other. Conceivably, there
    21 could be middle men on this. I don't know if it
    22 would get to that point or not, but the companies do
    23 contact each other and have discussions on different
    24 things and they're aware of these rules. So I would
    L.A. REPORTING (312) 419-9292
    126
    1 suspect that they would just work it out between
    2 themselves.
    3 MR. ROMAINE: Obviously, we also expect that
    4 most averaging will simply kind of occur within a
    5 single company. Obviously, many of these facilities
    6 have multiple plants, multiple units and simply
    7 having the ability to average among your own units
    8 is a great benefit.
    9 MS. LIU: Mr. Mahajan had testified that the
    10 cost effectiveness of adding control options was
    11 around $1,465 per ton. If companies do trade
    12 amongst each other for the averaging, how much would
    13 the Agency estimate a ton of NOx would go for?
    14 MR. MAHAJAN: This rule is based on the
    15 emission rate. It is not a Cap and Trade Program.

    16 There's no -- the Agency don't expect any -- you
    17 know, cannot predict any costs for that trading.
    18 MR. LAWLER: What we've given you is the -- to
    19 some degree I guess from that standpoint more of a
    20 worse case scenario. If they do averaging within
    21 the plant or averaging with another plant, we assume
    22 the cost would be less, but because we don't know
    23 exactly what they'll do and what options are open to
    24 them, we've not made an estimate of that.
    L.A. REPORTING (312) 419-9292
    127
    1 MS. LIU: Again, to follow-up on what
    2 Mr. Rieser had said about singling out units that
    3 were participating in the averaging for applying
    4 penalties if they were undercomplying, could you
    5 describe what those penalties might be?
    6 MR. LAWLER: I don't think we've -- for
    7 purposes of this rulemaking, we really haven't got
    8 into exactly what penalties would be, you know,
    9 imposed on people. For this rulemaking they would
    10 be -- a company could end up being out of compliance
    11 and then it would kind of go through the state
    12 enforcement process where there's an Agency
    13 component and then if it goes on from there maybe an
    14 attorney general's component of an enforcement case.

    15 We just -- we couldn't address that because it
    16 generally -- you know, the particular instance that
    17 somebody is out of compliance is generally unique
    18 and it just has to be worked out.
    19 MS. LIU: Mr. Mahajan also referred to a growth
    20 factor of 1.08 for the years from 1996 to 2007 and
    21 that that same growth factor was applied for this
    22 rulemaking. Is that a linear growth factor?
    23 MR. MAHAJAN: Yeah.
    24 MS. LIU: There was also a description in the
    L.A. REPORTING (312) 419-9292
    128
    1 statement of reasons about a term called potential
    2 electrical output capacity and an equation used to
    3 derive that. I was wondering, in the equation
    4 itself they take the maximum design heat input and
    5 divide it by three and then apply a conversion
    6 factor. I was wondering where that divided by three
    7 part comes in?
    8 MR. MOORE: That comes from the fact that on
    9 the average only one-third of the heat output of a
    10 fuel combustion device is available to become
    11 electricity and two-thirds of that heat is lost in
    12 the process. So that's the typical efficiency of an
    13 electrical generating unit.

    14 MS. LIU: Mr. Miller was also talking about a
    15 five percent capacity factor. Could you explain
    16 what that is a little bit, please?
    17 MR. ROMAINE: A capacity factor is a way to
    18 evaluate how much a generating unit operates. One
    19 hundred percent capacity factor would assume that
    20 the unit operated at full load continuously 8,760
    21 hours per year. A five percent capacity factor
    22 indicates that compared to what maximum could do, in
    23 fact, it's been operating at a load in hours to be a
    24 five percent utilization.
    L.A. REPORTING (312) 419-9292
    129
    1 In terms of -- a simple example is if
    2 there's 8,760 hours in a year and if it operated at
    3 full load whenever it was operating that would
    4 result in operating at full load for 438 hours would
    5 be a five percent capacity factor.
    6 MS. LIU: Okay. Thank you. There's an
    7 existing section in Subpart V that's going to be
    8 left unchanged. It deals with the Lake of Egypt
    9 Power Plant. That provision actually gives relief
    10 to that plant from meeting certain requirements for
    11 new emissions sources, and I was just wondering if
    12 they would be giving special treatment under the

    13 proposed new sections of this Subpart V or if they'd
    14 be required to meet the .25 pounds per NOx -- or
    15 pounds of NOx per unit each year like all the other
    16 sources would?
    17 MR. MOORE: The special provision for Lake of
    18 Egypt Power Plant is merely a reflection of the new
    19 source performance standard emission limit for that
    20 plant. When it burns more than a certain percentage
    21 of coal waste, then there is no new source
    22 performance standard. So the exemption for them is
    23 an exemption from an existing new source performance
    24 standard and it's not an exemption from Subpart V.
    L.A. REPORTING (312) 419-9292
    130
    1 So our regulations proposed that that plant does
    2 comply with Subpart V.
    3 MS. LIU: Mr. Moore, you also spoke about
    4 reporting and recordkeeping requirements. A simple
    5 question, would they be required to keep their
    6 records in hard copies or would electronic form be
    7 acceptable?
    8 MR. MOORE: Well, I'm sure electronic
    9 recordkeeping will be very acceptable at which -- at
    10 the time that the Agency is on line and is able to
    11 receive it that way, which my understanding is right

    12 at the present moment we wouldn't be able to handle
    13 that way of reporting electronically, but we hope
    14 that will change in the near future such that they
    15 can submit it whatever way they wish to submit it as
    16 long as the data is accurate, et cetera, and we have
    17 the wherewithal to receive the report.
    18 MS. McFAWN: Could they keep it electronically
    19 on site so that when your inspectors are there they
    20 could make it available to them or do they have to
    21 keep hard copies on site?
    22 MR. ROMAINE: There's nothing in this rule that
    23 would require them to keep hard copies on site.
    24 Data that is generated electronically could be
    L.A. REPORTING (312) 419-9292
    131
    1 stored electronically. Our concern, as Berkley has
    2 said, is to make sure that we can have access to the
    3 data as we need, which could require that they print
    4 it out for specific areas, days, types of
    5 information.
    6 MS. McFAWN: Can they -- do they have to keep
    7 the records? If they are providing averaging from a
    8 different location, a unit at a different location
    9 or from a different owner/operator, do they have to
    10 keep those records for five years or just the

    11 company that -- or the site that is -- where the
    12 unit is located?
    13 MR. ROMAINE: I think we'll take that under
    14 advisement.
    15 MS. McFAWN: To follow-up on one of Ms. Liu's
    16 questions, she was talking about it being a
    17 rate-based rule and one question we had was if it's
    18 rate-based there's no mechanism in place, is there,
    19 to limit emissions?
    20 MR. MOORE: Well, yes. The capacity of the
    21 unit to generate heat input. I mean, they all
    22 have -- they cannot run at over 100 percent capacity
    23 for a very long time.
    24 MS. McFAWN: Correct, that is correct. That
    L.A. REPORTING (312) 419-9292
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    1 would be the maximum?
    2 MR. MOORE: Right.
    3 MS. McFAWN: Is that what you used in the
    4 modeling then?
    5 MR. KALEEL: Yes. We assumed full operation of
    6 all the sources in the state plus growth.
    7 MS. McFAWN: Okay. Thanks.
    8 Mr. Lawler, when you submitted our SIP
    9 demonstrations, did -- especially those that were

    10 submitted for the Metro-East area, did they include
    11 rules such as this rate-based rule or did those SIP
    12 attainment demonstrations just anticipate trading?
    13 MR. LAWLER: What we submitted as part of our
    14 attainment demonstration was an indication of --
    15 like in the case of the Metro-East that if we had a
    16 .25 limit on the sources, we would be able to
    17 demonstrate attainment.
    18 So either with a .25 rule or the NOx SIP
    19 Call we would be able to demonstrate attainment and
    20 that's -- that would be -- I believe that answers
    21 your question. The actual demonstration that we
    22 submitted showed that a .25 limit would also
    23 demonstrate attainment.
    24 MS. McFAWN: So it was an either or
    L.A. REPORTING (312) 419-9292
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    1 proposition?
    2 MR. LAWLER: We didn't submit it as an either
    3 or. We just said that at least a .25 limit would be
    4 needed to show attainment.
    5 HEARING OFFICER BEAUCHAMP: Why don't we take a
    6 brief five-minute break and we'll reconvene at five
    7 minutes to four.
    8 (Whereupon, after a short

    9 break was had, the
    10 following proceedings
    11 were held accordingly.)
    12 MS. McFAWN: I just -- thank you for that
    13 time-out. I needed to find some more questions for
    14 you, Mr. Lawler.
    15 I was listening very closely to your
    16 testimony and I have some questions about your
    17 slides.
    18 On slide 12, which is one that says OTAG
    19 Findings on page three of the attachment --
    20 MR. LAWLER: Yes.
    21 MS. McFAWN: -- you had the last sentence which
    22 says urban disbenefits from NOx controls is one of
    23 the findings. I was at a different hearing and I
    24 heard testimony that that has been discredited. Is
    L.A. REPORTING (312) 419-9292
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    1 that still a valid finding by OTAG?
    2 MR. LAWLER: Yes, it is.
    3 MS. McFAWN: I just wanted to verify that.
    4 MR. LAWLER: And there's -- at one time I think
    5 we didn't -- I guess a complete answer to your
    6 question is there are days where there's disbenefits
    7 and there are days when there's not disbenefits and

    8 that's probably why -- that may be what you heard
    9 and somebody only presented part of it to you. I'm
    10 not sure.
    11 MR. ROMAINE: I have been at hearings where
    12 members of the public has suggested that's been
    13 disproved by the OTAG process, but that is not our
    14 belief or our understanding of what OTAG decided.
    15 MR. LAWLER: Right.
    16 MS. McFAWN: Okay. And this phrase, just to
    17 make sure I understand it correctly, you are saying
    18 that there actually -- that controlling NOx cannot
    19 be beneficial because that ozone formation might
    20 occur at a greater rate if the NOx is not present?
    21 MR. KALEEL: What I think we're referring to
    22 is if you were to control NOx within the urbanized
    23 area not the areas further upwind of an urban area,
    24 but there is a phenomenon where ozone actually
    L.A. REPORTING (312) 419-9292
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    1 increases as a result of reductions of NOx.
    2 MS. McFAWN: It's very localized?
    3 MR. KALEEL: Those are very localized.
    4 MS. McFAWN: Thank you.
    5 DR. FLEMAL: And that's because NOx scavenges
    6 some of the ozone?

    7 MR. KALEEL: Right. NOx is actually two
    8 components of it; one component is nitrogen oxide or
    9 NO and it has a tendency to break down the ozone
    10 molecule fairly close to the source.
    11 MR. ROMAINE: Let me further clarify that when
    12 NOx is formed by emission units, the general rule of
    13 thumb is about 90 percent of it comes out as NO so
    14 it then further oxidizes the atmosphere. So that
    15 reaction has to cook in the soup before the NOx
    16 takes the chemical form where it then participates
    17 in the ozone reactive formation.
    18 MS. McFAWN: Thank you. This kind of
    19 backtracks to a question I asked you earlier, slide
    20 13, which is labeled Metro-East/St. Louis
    21 Nonattainment Area Demonstration there is a bullet
    22 point there that says in October of 1999 and
    23 February 2000, Illinois EPA submitted attainment
    24 demonstrations to USEPA, is that a correct
    L.A. REPORTING (312) 419-9292
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    1 paraphrasing of that bullet?
    2 MR. LAWLER: That's correct.
    3 MS. McFAWN: Okay. And that was -- in those
    4 submittals we did propose a rate-based rule of .25,
    5 is that correct, to demonstrate achievement for East

    6 St. Louis?
    7 MR. LAWLER: In those particular submittals,
    8 since we didn't have any rule that we could submit
    9 with them, we didn't specify exactly, but had we
    10 done it at that time, we could have submitted a .25
    11 rate-based submittal as part of that, that's
    12 correct.
    13 MS. McFAWN: The proposed federal approval,
    14 which was issued in April, said that we needed to
    15 submit rules and it was in response to that proposed
    16 approval that we went forward with the trading rule?
    17 MR. LAWLER: We went forward with the NOx SIP
    18 Call rule for several different reasons, but the NOx
    19 SIP Call rule itself would take care of this
    20 requirement.
    21 MS. McFAWN: Okay. I think I understand you.
    22 In other words, the Agency opted to submit to the
    23 Board the trading rule believing it would take care
    24 of the Metro-East area as well as our entire SIP
    L.A. REPORTING (312) 419-9292
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    1 approval process?
    2 MR. LAWLER: Correct, that's correct.
    3 MS. McFAWN: The last bullet in that slide says
    4 that our docket rules are due to the USEPA by the

    5 end of this year and we are on track, hopefully, to
    6 do that with our trading rule. It doesn't seem
    7 possible to do that with this set of rules and are
    8 we, in fact, obligated to propose -- or adopt it as
    9 final this set of rules to USEPA by the end of
    10 December?
    11 MR. LAWLER: Well, you're -- like you say, we
    12 couldn't have this done by the end of September to
    13 submit to EPA -- I'm sorry, the end of December to
    14 go to EPA and so what we have done is we're trying
    15 to do as much with EPA to kind of show our good
    16 faith at this point. They know we've got Subpart W
    17 and they know where that stands and that's being
    18 submitted to them and a final rule will be submitted
    19 to them. We have submitted -- this Subpart V when
    20 we submitted it to the Board, we also sent it to
    21 USEPA for parallel processing, again, to indicate
    22 good faith that it's going through the state
    23 process, and so I think what our hope is that come
    24 the end of December EPA will use some discretion to
    L.A. REPORTING (312) 419-9292
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    1 say look, the state is doing everything they can at
    2 this point. Something changed at the end of August
    3 that the state is now addressing, they're doing

    4 everything they can and so we'll cut the state a
    5 little slack on this.
    6 MS. McFAWN: Okay. And do you think the court
    7 case where you made the commitment to do this rule
    8 will have the same -- do you think the Court will
    9 have the same attitude?
    10 MR. LAWLER: It's harder to say what a Court
    11 will do. I think at this point what our -- at least
    12 a view of it is the state needs to make as much of a
    13 good faith effort as possible and hope to convince
    14 -- you know, hope that the Court is convinced of
    15 that also.
    16 MS. McFAWN: Is the state obligated to make
    17 status reports to the Court on this proceeding?
    18 MR. LAWLER: No. You're asking a little bit
    19 more of a legal question than maybe I can answer,
    20 but we -- I know we're -- USEPA is the one that
    21 makes -- that's obligated to make responses to the
    22 Court. We're an intervenor and we can make
    23 responses, but we've been comfortable with what EPA
    24 has been saying on our behalf at this point on this
    L.A. REPORTING (312) 419-9292
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    1 issue.
    2 MS. McFAWN: Okay. Thank you for that

    3 clarification.
    4 At slide 15, NOx SIP Call and the elements
    5 of it, it says the elements of control program and
    6 there are four things listed, and the last is large
    7 internal combustion engines at 90 percent control.
    8 Which part of our rulemaking does that refer to?
    9 MR. LAWLER: This particular element was one
    10 that was remanded back to USEPA in one of the court
    11 proceedings, in Michigan versus EPA, and so it will
    12 be a future requirement that the state will have to
    13 meet, but at this point it's back in EPA's court and
    14 so we have no real obligation to do anything right
    15 now as far as the SIP Call goes on that until EPA
    16 again moves that into the -- moves that into part of
    17 the SIP Call.
    18 MS. McFAWN: Is this the same term as -- in
    19 using our -- stationary internal combustion engine?
    20 MR. LAWLER: Yes, yes, it is.
    21 MS. McFAWN: And under Section 9.9 we are
    22 obligated to do that, but that can also be stayed
    23 for this time being, do you believe?
    24 MR. LAWLER: Yes.
    L.A. REPORTING (312) 419-9292
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    1 MS. McFAWN: In slide 14 it makes a reference

    2 at the last bullet point, which is -- that slide is
    3 NOx SIP Call Chronology, of a court stay being
    4 removed on June 22nd. That stay being removed, I
    5 assume, lifted the stay imposed by the Court on May
    6 25th, 1999, which is referred to in the next -- in
    7 slide 16?
    8 MR. LAWLER: That's correct.
    9 MS. McFAWN: Slide 16 being labeled Road to
    10 Illinois Regulatory Proposal.
    11 And then my question is for Mr. Kaleel, I
    12 was looking and listening to your testimony and at
    13 Figure 4, which is also slide 11 of your testimony
    14 -- attached to your testimony, it shows that there's
    15 not much difference between the reductions we'll
    16 achieve if we impose the rate-based rule and/or the
    17 NOx SIP Call rule, which I refer to as the trading
    18 rule. Why are they so comparable?
    19 MR. KALEEL: Well, on this particular day there
    20 isn't a lot of change and I think we've seen it
    21 fairly consistently in St. Louis that the NOx SIP
    22 Call does provide additional benefits, but not a lot
    23 of benefit. A limit of three parts per billion is
    24 fairly typical and depending upon what scale we use
    L.A. REPORTING (312) 419-9292
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    1 to show those results graphically it may or may not
    2 be enough to tip it into a different colored scale
    3 or different region.
    4 MS. McFAWN: Will we -- I'm not sure that I
    5 understand this, but will we actually -- will they
    6 overlap or will we by implementing the .25 rule as
    7 well as the NOx SIP call rules will we achieve both
    8 reductions?
    9 MR. KALEEL: Well, when we implement the NOx
    10 SIP Call the figure on the lowest right would be
    11 what we would expect air quality to look like under
    12 those meteorological conditions. So I think we
    13 typically think of the NOx SIP Call as being more
    14 stringent and providing greater benefit.
    15 MS. McFAWN: So the effect is cumulative? It's
    16 not --
    17 MR. KALEEL: It kind of supersedes it in a
    18 way -- I guess in my way of thinking since it's more
    19 stringent, we'll get slightly more benefit. We've
    20 kind of gone past the point too far.
    21 MS. McFAWN: Just to make sure -- I probably
    22 haven't phrased this correctly -- to make sure I
    23 understand this, if we weren't to adopt the .25
    24 rule, would we achieve the entire results predicted
    L.A. REPORTING (312) 419-9292

    142
    1 by this bar graph under the NOx SIP Call rule?
    2 MR. KALEEL: We're looking at the one called
    3 Figure 5 now?
    4 MS. McFAWN: Yes.
    5 MR. KALEEL: I guess the way I'm interpreting
    6 that is that the NOx SIP Call would provide greater
    7 benefit. We'd see lower ozone under the NOx SIP
    8 Call scenario than we would under just the .25
    9 pounds per million BTU rule and that's because it's
    10 more stringent on utilities and there are some
    11 additional source categories that it will address.
    12 Am I missing your question?
    13 MS. McFAWN: But if weren't -- maybe this is --
    14 maybe I'm missing the point of the graph actually,
    15 but if we were not to adopt the .25, would we still
    16 see all the reductions that's reflected in the bar
    17 for the NOx SIP Call rule?
    18 MR. KALEEL: Yes, we would.
    19 MS. McFAWN: Okay. That was -- that was all
    20 the questions I have. Thank you for your patience.
    21 HEARING OFFICER BEAUCHAMP: Dr. Flemal, do you
    22 have any questions?
    23 DR. FLEMAL: No.
    24 HEARING OFFICER BEAUCHAMP: Any others from
    L.A. REPORTING (312) 419-9292

    143
    1 members of the Board?
    2 MR. STERNSTEIN: I have a couple very short
    3 ones. Mr. Lawler, this is a follow-up to one of the
    4 questions that Board member McFawn was asking a
    5 couple minutes ago. On page three of the shrunken
    6 slides exhibit, Exhibit 2A, the elements of the
    7 control program, the large internal combustion
    8 engines, 90 percent control has been remanded back
    9 to USEPA. I recall this from an earlier hearing,
    10 are those internal combustion engines primarily used
    11 to push gas through gas pipelines?
    12 MR. LAWLER: That's correct.
    13 MR. STERNSTEIN: Okay. I just wanted to double
    14 check on that, and then a question for Mr. Kaleel.
    15 On the -- I think it's the fifth slide on the first
    16 page of Exhibit 1A under assumptions. I just wanted
    17 to make sure I heard you correctly. The last bullet
    18 point there that there was a correction applied to
    19 Biogenic emissions in the Missouri Ozarks and you
    20 had said something, and again I'm paraphrasing here,
    21 I just wanted to have you clarify it for me that
    22 you're subtracting ozone that comes from oak trees
    23 in the Ozarks?
    24 MR. KALEEL: Well, no, not exactly. To back up
    L.A. REPORTING (312) 419-9292

    144
    1 a step or two here, the model uses all categories of
    2 emissions in predicting ozone concentrations. The
    3 primary constituents of emissions inventory are
    4 three precursor compounds or family of compounds,
    5 VOCs or VOMs, NOx and carbon monoxide. Biogenic
    6 emissions are typically VOCs and in particular, one
    7 group of VOCs called isoprene. There are certainly
    8 other types of VOCs and even some nitrogen compounds
    9 that are emitted naturally from forest, from crops,
    10 from other types of naturally occurring vegetation,
    11 but the way we applied the correction was after
    12 performance of a measurement study where we measured
    13 VOCs and other meteorological parameters in the
    14 Ozarks in an area of very high density of oak
    15 forests, we found that the model emissions modeled
    16 that is prescribed by USEPA called Beis-2 overstates
    17 the amount of VOCs from oak trees. So we applied
    18 the correction to the VOC inventory before we ever
    19 put it into the air quality model.
    20 MR. STERNSTEIN: And there's no other large
    21 forested areas that contribute -- contribute those
    22 kind of VOCs around the St. Louis nonattainment
    23 area?
    24 MR. KALEEL: Not nearly to the extent that what

    L.A. REPORTING (312) 419-9292
    145
    1 we saw there and again, it seemed to be a factor
    2 that was unique to the high percentage of oak trees
    3 in the Ozarks. It seems unique in the entire
    4 eastern United States to just that region of the
    5 Ozarks.
    6 MR. STERNSTEIN: Okay. That's all I have.
    7 Thanks.
    8 HEARING OFFICER BEAUCHAMP: Thank you,
    9 Mr. Sternstein.
    10 HEARING OFFICER BEAUCHAMP: Any other questions
    11 from members of the Board or other staff? Are there
    12 any other questions from members of the public in
    13 attendance today? Seeing none, we move to wrap up
    14 the hearing today.
    15 Please note that the second hearing for
    16 this rulemaking is scheduled to begin Tuesday,
    17 December 19th, 2000, at 11 a.m. in Room 9-040 in the
    18 James R. Thompson Center, this building, this room
    19 located at 100 West Randolph Street in Chicago.
    20 The third hearing is scheduled to begin
    21 Tuesday, January 2nd, 2001, at 11 a.m. also in Room
    22 9-040 in the James R. Thompson Center.
    23 Once again, if the Agency does not request
    24 a third hearing, the Board will cancel that third

    L.A. REPORTING (312) 419-9292
    146
    1 hearing.
    2 We have requested an expedited transcript
    3 in this matter which should be available Friday.
    4 The Board will post the transcript to its website.
    5 The website is located at www.ipcb.state.il.us.
    6 The transcript should be posted to the
    7 Board's website next week, either Tuesday or
    8 Wednesday. You may also obtain a hard copy of the
    9 transcript from the court reporter or you may
    10 request a hard copy from the Board, although the
    11 Board charges .75 cents a page.
    12 I'd like to remind the Agency that any
    13 issues which the Agency has agreed to address at the
    14 request of any of the parties present today should
    15 be answered at the beginning of the second hearing
    16 on December 19th.
    17 We will see you all again on that date.
    18 We have a question from Laurel?
    19 MS. KROACK: Yes. Prefiled testimony that they
    20 have to file before, we'd like the Board to ask that
    21 that testimony be served on us the same manner it
    22 was served to the Board because we were receiving
    23 some of that rather late in the last set of W
    24 hearings, in fact, so it was difficult to prepare

    L.A. REPORTING (312) 419-9292
    147
    1 for that second set of hearings.
    2 MS. McFAWN: Let's go off the record for a
    3 moment if you don't mind.
    4 HEARING OFFICER BEAUCHAMP: Sure.
    5 (Whereupon, a discussion
    6 was had off the record.)
    7 HEARING OFFICER BEAUCHAMP: The Agency has
    8 requested that members of the public who are wishing
    9 to prefile testimony for the second hearing serve
    10 those copies on the Agency in the same manner as
    11 they do so for the Board and members of the public
    12 who are present have indicated that they'd be
    13 willing to do so.
    14 I'd like to state for the record that
    15 prefiled testimony is due on December 8th to be
    16 filed with the Board and the mailbox rule does not
    17 apply to that date. So it needs to be here within
    18 the date stamped by the clerk on the 8th.
    19 Are there any other matters that need to
    20 be addressed at this time? Hearing none, this
    21 matter is hereby adjourned. Thank you very much for
    22 your attendance and participation in this hearing.
    23 (Whereupon, no further

    24 proceedings were had.)
    L.A. REPORTING (312) 419-9292
    148
    1 STATE OF ILLINOIS )
    2 ) SS.
    3 COUNTY OF C O O K )
    4
    5
    6 I, TERRY A. STRONER, CSR, do
    7 hereby state that I am a court reporter doing
    8 business in the City of Chicago, County of Cook, and
    9 State of Illinois; that I reported by means of
    10 machine shorthand the proceedings held in the
    11 foregoing cause, and that the foregoing is a true
    12 and correct transcript of my shorthand notes so
    13 taken as aforesaid.
    14
    15
    16 _____________________
    17 Terry A. Stroner, CSR
    18 Notary Public, Cook County, Illinois
    19
    20 SUBSCRIBED AND SWORN TO
    before me this ___ day
    21 of ________, A.D., 2000.
    22

    _________________________
    23 Notary Public
    24
    L.A. REPORTING (312) 419-9292

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