RECEIVED

CLERK’S

OFFICE

Jf\N

2001

COP

AT 10

STATEOFILLINOIS

flu flora

Contra

Board

January

8, 2001

Bobb Beauchamp

Hearing Officer.

Illinois Pollution Control Board

Re:

ROI-17, Proposal to Amend

111. Adm. Code

2.11 and 217 ofthe ilinois Air

Regulations, Subpart

to Part 217

Dear Mr. Beauchamp:

Clean Air Action

Corporation appreciates this opportunity to submit comments on the

proposed Nitrogen Oxides Control and Trading Program,

developed in response to the

US EPA’s NOx SIP

Call.

Clean Air Action

commends the State ofIllinois for the environmental leadership you

have demonstrated by including Subpart X in your NOx SIP Call rulemaking.

This

flexibility, ifimplemented correctly, has the potential to

achieve cleaner air for Illinois

citizens at lower cost to illinois regulated industries.

Our concern

is that, as written, it

will not achieve the maximum benefit possible to Illinois air quality,

because it is overly

restrictive regarding source eligibility.

Section 217,805 limits the eligibility ofallocation

applicantsto

stationary sources that

were permitted to operate prior to January,

1995.

There aretwo ways this eligibility

requirement limits flexibility, and therefore cost effectiveness and environmental benefit.

First,

by limiting eligibility for Subpart

to Stationary sources,

the state is missing out on

a substantial portion ofits inventory.

i.e. mobile source sectors and area source sectors.

There are feasible and relatively

inexpensive reductions that can be made

in these sectors,

and by expanding eligibility to these sectors illinois can be a national leader in getting

reductions from those sectors years before EPA would achieve them.

There is a misconception that the SIP Call Model Rule does not allow this type of

flexibility.

The Model Rule is

very strict asto

how a Source within the rule must comply,

but it

is the statethat allocates the allowances, and determines the available budget.

While the EPA may have set the original EGU budget, nothing prevents the state from

taking reductions from the other sectors, and increasing the allocations to EGU sources.

For example, that

is the basic mechanism for getting additional allowances for the opt-in

program.

It is also supported by the

fact

that the Model Rule does not require a 0.15

6506 So. LewisAve.. Suite 210

•

Tulsa.

Oklahoma 74136

•

Ph: 918-747-8770

•

Fax:918-747-8786

nyv

AffI

6 •6

R P0

AT 10

January 8, 2001

Bobb Beauchamp

Page 2

lb/mmBtu limit on the EGUs.

!fthe State chooses a higher limit,

must make up that

difference from the other sectors.

The second problem with Section 2.17.805 is the January 1995

restriction.

The

important criteria,

rather than when a source came online, is whether the reductions made

at the source are quantifiable and verifiable.

Intent of

NOx SLP Call

in the NOx SIP Call

is clear EPA intended for states to experiment with flexibility.

(See Federal Register, Vol.

63,

No. 207, Tuesday,

October 27,

1998).

In numerous

sections, SPA makes

broad statements that acknowledge the state’s

right to adopt their

own mechanisms for compliance with the SIP Call:

11. EPNs Analytical Approach

A. Interpretation ofthe CAA’s Transport Provisions

3. Requirements of Section

1 l0(a)(2)(D)

Determination ofHighly Cost-Effective Reductions and of Budgets.

FR 57378:

.The State has fidi discretion

in selecting the controls, so that

may choose any

set ofcontrols that would assure achievement ofthe budget.

As EPA stated in the NPR: States are not constrained to adopt measures that

mirror the measures EPA used in

calculating the budgets.

In fact, EPA believes

that many control measures not on the list relied upon to develop

EPA’s proposed

budgets are reasonable—especially those, like enhanced vehicle inspection and

maintenance programs, that yield both NOx and VOC emission reductions.

Thus,

one state may choose to primarily achieve emission reductions from stationary

sources, while another state may focus on emission

reductions from the mobile

source sector.

(62 FR 60328).

mia

R P0

RAT

I 0

January 8,

2001

Bobb

Beauchamp

Page

Ill. Determination ofBudgets

Other Budget Issues

Recalculation, ofBudgets

FR 57426:

.More specifically, to demonstrate compliance with the SiP

call, a state must

adopt and implement control measures that are projected to achieve the aggregate

emission reductions determined by EPA based on the application ofhighly cost-

effective controls to ~GUs, industrial

boilers, and other affected non-EGUs.

While a state may choose to achievethose reductions through application of

measures other than those used by EPA in calculating required reductions, any

measures it adopts must achieve the reductions assumed by EPA in the

development ofits budgets.

111. Determination ofBudgets

0. Final Statewide Budgets

4. Potential Alternatives to Meeting theBudget

57438:

The EPA believes that there are additional control measures and alternative mixes

of controls that a state could choose to implement by May

1, 2003,

Examples of

such measures are described below,

and illustrate that options are potentially

available in several source categories.

The EPA believes that, with respect to EGUs, there is a large potential for energy

efficiency and renewables in the NOx

SIP Call region that reduce demand, and

provide for more environmentally-friendly energy resources.

For example, if a

company replaces a turbine with a more efficient one, the unit supplying the

turbine would reduce the amount of fuel (heat input) the unit combusts, and would

reduce NOx emissions proportionately, while the associated generator would

producethe same amount ofelectricity.

Renewable energy source generation

includes hydroelectric, solar,

wind,

and geothermal

generation.

EPA recognizes

that promotion ofenergy efficiency and renewables can contribute to a cost-

AWIE

P 0

R A TI 0

lanuary 8, 2001

Bobb Beauchanip

Page 4

effective NO~c reduction strategy.

As such, EPA encourages states in the NOx

SIP

Call region to consider including energy efficiency and renewables

as a

strategy in

meeting their NOx budgets.

One way to achieve this goal

including a provision within a state’s NOx Budget Trading Rule that allocates a

portion ofa state’s trading program budget to ixnplementers ofenergy efficiency

and renewables projects that reduce energy-related NOx

emissions during the

ozone season.

Another is to include energy efficiency and renewables projects as

part ofa stat&s implementation plan....

• .

.With respect to non-EGUs, individual states could choose to require emission

decreases from sources,

or source categories, that EPA exempted from the budget

calculations.

For example, there are many large sources for which EPAlacked

enough information to determine potential controls and emission reductions;

states may have access to such information and could choose to apply cost-

effective controls.

in addition, states could choose to regulate one or more ofthe

non-EGU stationary sources,

or source categories, that EPA had exempted

because emissions were relatively low considering other source categories in the

jurisdictions,

individual states,

emissions from such sources could be a high

percentage of uncontrolled emissions and, thus, be subject to efficient, cost-

effective control for that particular state.

Further,

states may take other

approaches to developing their budgets,

such as cutoffs based on horsepower

rather than tons per day,

since they

might have access to data that EPA did not

have for

all 23 jurisdictions.

With respect to

mobile sources, states could implement otherNOx control

measures in lieu ofthe controls described earlier in this section.

For example,

vehicle inspection and maintenance programs can provide significant NOx

reductions from highway vehicles.

Additional NOx reductions can be obtained by

opting into the reformulated gasoline program,

by implementing measures to

reduce the growth in VMT,

and by implementing programs to accelerate

retirement ofolder, higher-emitting highway vehicles and non-road equipment.

COI~PORATION

January 8, 2001

Bobb Beauchamp

Page

VII. NOx Budget Trading Program

C. General Design ofNOx Budget Trading Program

2. Alternative Market Mechanisms

57457:

The EPAfirst reiterates that the model program is voluntary (63 FR 25918).

In providing a cap-and-trade program as a streamlined

means by which to

comply with the NOx SIP Call, EPA does not preclude implementation of