3

these major violations, Panhandle failed to take even the most basic steps incumbent upon any

company doing business in Illinois to determine whether it is complying with its permit.

 

In this opinion, the Board first provides this case’s procedural history. The Board then

sets forth its findings of fact. Lastly, the Board discusses the alleged violations, the appropriate

remedy, and the People’s request for costs and attorney fees.

 

PROCEDURAL HISTORY

 

On June 29, 1999, the People filed a two-count complaint against Panhandle for alleged

violations at Glenarm Station. Specifically, count I of the complaint alleges that Panhandle

violated the PSD requirements of Section 165 of the federal Clean Air Act (42 U.S.C. § 7475)

and regulations thereunder (40 C.F.R. §§ 52.21(i) and (j)), thereby violating Sections 9.1(d)(1)

and 9.1(d)(2) of the Act (415 ILCS 5/9.1(d)(1), (2) (2000)). Count II of the complaint alleges

that Panhandle violated its permit limit on NOx emissions, thereby violating Section 9(b) of the

Act (415 ILCS 5/9(b) (2000)). Panhandle filed an answer on July 27, 1999, raising five

affirmative defenses.

1

   

 

The Board’s then Chief Hearing Officer John C. Knittle held a hearing for seven days

over September and November 2000, resulting in just under 1,500 pages of hearing transcript. In

addition, at the parties’ request, the hearing officer incorporated portions of the hearing transcript

from an earlier Board proceeding involving Panhandle’s appeal of an Agency permit decision.

See

Panhandle Eastern Pipe Line Co. v. IEPA, PCB 98-102 (Jan. 21, 1999),

aff’d sub nom

 

Panhandle Eastern Pipe Line Co. v. PCB and IEPA, 314 Ill. App. 3d 296, 734 N.E.2d 18 (4th

Dist. 2000).

2

   

 

The parties jointly offered 24 hearing exhibits, all of which were admitted. The People

presented seven witnesses. The People offered 42 exhibits, 41 of which were admitted. The

hearing officer excluded from evidence the People’s Exhibit 5, a letter from the United States

Environmental Protection Agency (USEPA) to the Agency. The Board affirmed the hearing

officer’s ruling (

see

People v. Panhandle Eastern Pipe Line Co., PCB 99-191, slip op. at 6 (Feb.

1, 2001)) and later denied the People’s March 12, 2001 motion to reconsider (

see

Panhandle,

PCB 99-191, slip op. at 3 (Oct. 18, 2001)). Panhandle presented nine witnesses. Panhandle

offered 43 exhibits, all of which were admitted. Consistent with its offer at

hearing, Panhandle, on December 12, 2000, filed its parent corporation’s annual reports from

1987 through 1996, all of which were marked as hearing officer exhibits and admitted.

3

   

 

1

The complaint is cited as “Comp. at _.” The answer is cited as “Ans. at _.”

 

2

The September and November 2000 hearing transcript is cited as “Tr. at _.” The incorporated

hearing transcript is cited as “Incorp. Tr. at _.”

3

The stipulated hearing exhibits are cited as “Stip. Exh. at _.” The People’s hearing exhibits are

cited as “People Exh. _.” Panhandle’s hearing exhibits are cited as “Pan. Exh. _.” The hearing

officer exhibits are cited as “H.O. Exh. at _.”

 

---

 

4

By order of December 22, 2000, the hearing officer granted the parties’ request to exceed

the 50-page limit on their initial post-hearing briefs. The People filed a 138-page brief on

January 19, 2001. Panhandle filed a 91-page response brief on February 15, 2001, a portion of

which the People moved to strike on February 28, 2001. The Board denied the People’s motion

to strike.

See

Panhandle, PCB 99-191, slip op. at 4 (Oct. 18, 2001). The People filed a 65-page

reply brief on March 5, 2001, along with a motion to waive the page-limit requirement for the

reply brief. The Board granted the People’s motion to waive.

4

  

See id.

  

 

FINDINGS OF FACT

 

Background

 

Panhandle was formed in 1929. Since 1987, Panhandle has been a wholly-owned

subsidiary of several different corporations. In 1987, Panhandle was owned by Panhandle

Eastern Corporation, a publicly owned holding company traded on the New York Stock

Exchange. Panhandle Eastern Corporation changed its name to PanEnergy Corp. in the mid-

90’s. At that point, PanEnergy Corp. was among the United States’ five largest transporters of

natural gas and producers of natural gas liquids. PanEnergy Corp. had 37,000 miles of natural

gas pipeline and provided 12% of the natural gas consumed in the United States. In 1997,

PanEnergy Corp. was merged into Duke Energy Corporation. In 1999, Duke Energy

Corporation sold Panhandle to CMS Energy Corporation, which is the current parent corporation

of Panhandle. Tr. at 668-69; H.O. Exh. 1-10.

 

Panhandle operates an interstate natural gas pipeline that transports natural gas to

customers in Illinois and other Midwestern states. Panhandle’s natural gas pipeline extends from

gas fields in Kansas, Texas, and Oklahoma to the Midwest. Tr. at 29, 605, 827; H.O. Exh. 10.

Due to the great distances that the natural gas is transported, the gas must be recompressed. Tr.

at 682-84. Panhandle uses compressor stations at locations along the pipeline system to ensure

that the gas continues to move through the system and is delivered to customers at serviceable

pressures.

Id.

Panhandle has five compressor stations in Illinois. Tr. at 744. One of those

compressor stations, Glenarm Station, is in Glenarm, Sangamon County. Glenarm Station is in a

rural, lightly populated area and has operated for over 60 years. Tr. at 28, 605-06. The

compressor engines at Glenarm Station emit NOx into the air when they burn fuel (natural gas).

Tr. at 627, 686; Ans. at 3.

 

Air Permitting

 

 

In 1987, Glenarm Station had 15 compressor engines (engines 1101-1115). Tr. at 32-33,

608-13. In September 1987, Panhandle filed with the Agency an application for a construction

permit to replace 12 engines (engines 1101-1112), which were 41 to 56 years old, with four new

engines (engines 1116-1119).

5

Panhandle sought to avoid PSD applicability by offsetting new

4

The People’s first brief is cited as “People Br. at _.” Panhandle’s response brief is cited as

“Pan. Br. at _.” The People’s reply brief is cited as “Reply Br. at _.”

5

The parties and the Board refer to these four engines as “new” because they were new to

Glenarm Station. Panhandle purchased engines 1116 and 1117, which had been used at a

---

 

5

NOx emissions from adding engines 1116-1119 with the decreased NOx emissions from retiring

engines 1101-1112. Tr. at 544, 553, 606-07, 612-13, 627, 660, 675-76, 803; Pan. Exh. 1, 2.

Engines 1116 and 1117 were not equipped with emission controls for NOx. Tr. at 620. Engines

1118 and 1119 had been equipped with an early version of “Clean Burn” emission control

technology before arriving at Glenarm Station. “Clean Burn” is the name for this pre-

combustion chamber technology made by Cooper-Bessemer Corporation. Tr. at 684-87.

Panhandle undertook the construction project to modernize its operations—add more efficient

engines and remove older engines that required more maintenance. Tr. at 613, 651-52; Pan. Exh.

2, 3. The construction project at Glenarm Station cost Panhandle approximately $15 to $20

million. Tr. at 639.

  

During the permit application process, Panhandle provided the Agency with data from

1987 on how much fuel engines 1101-1112 used and how many hours they operated. Based on

this data, the Agency calculated that the 12 engines emitted NOx at a rate of 421.4 TPY. Tr. at

100-01, 555-56, 565-66; Pan. Exh. 4; Stip. Exh. 6. To arrive at the 421.4 TPY figure, the

Agency relied on a fuel-based emission factor

6

(3,400 pounds/million cubic feet) in USEPA’s

September 1985 edition of AP-42, “Compilation of Air Pollutant Emission Factors for Stationary

Sources.” Tr. at 30-31, 51, 101, 564-66, 594-95, 1104-05; Pan. Exh. 29; Stip. Exh. 6.

 

In February 1988, the Agency issued Panhandle a minor source permit for the

construction project. Stip. Exh. 1. The permit included an emission limit of 461.3 TPY of NOx

applicable to the four new engines.

Id.

The permit stated that the 461.3 TPY limit was based on

(1) standard emission factors; (2) fuel use from the most recent one year period (

i.e.

, a credit for

decreased emissions of 421.4 TPY, calculated using the 1987 data for engines 1101-1112); and

(3) an allowed emissions increase from the modification of 39.9 TPY. The permit also stated

that the NOx emission limit was necessary to avoid the applicability of PSD. Stip. Exh. 1, 6

.

    

 

The Agency set the 461.3 TPY emission limit to ensure that the four replacement engines

would not result in a net increase in NOx emissions of 40 TPY or more over the 1987 emissions.

The limit was designed to prevent the construction project from being a “major modification”

under PSD rules, thus allowing Panhandle to avoid PSD requirements. Tr. at 48; Stip. Exh. 1, 6.

The construction permit also required Panhandle to keep records on the hours of operation and

the fuel use for each of the four new engines. Tr. at 86; Stip. Exh. 1.

 

The Agency set forth all of these requirements in the construction permit’s three special

conditions:

 

Tenneco Chemical Company facility in Texas, and brought engines 1118 and 1119 to Glenarm

Station from another Panhandle facility, Hugoton Station in Kansas. Tr. at 617, 619-20, 685-86.

 

6

An “emission factor” is the “relationship between the amount of pollution produced and the

amount of raw material processed. For example, an emission factor for a blast furnace making

iron would be the number of pounds of particulates per ton of raw materials.” USEPA, Terms of

Environment (last modified May 13, 1998) http://www.epa.gov/OCEPAterms/eterms.html.

---

 

6

1. This permit is issued based upon the replacement of ten Cooper

Compressors and two Clark Compressors with four new Cooper

Compressors. The overall increase in NOx emissions from the

replacement will not exceed 39.9 tons per year. This condition is

necessary to avoid applicability of 40 CFR 52.21, Rules for Prevention of

Significant Deterioration (PSD).

 

2. NOx emissions from the four new compressors shall not exceed 461.3 tons

per year. This limit is based upon [emission] rates calculated from

standard emission factors, the gas usage from the most recent one year

period and the allowed increase of 39.9 tons per year.

 

3. a. The permittee shall keep records of the hours of operation and the gas usage of

each of the new compressor engines.

 

b. These records shall be kept for two years and be available to Agency

inspectors upon request. Stip. Exh. 1.

 

Panhandle completed the construction project in 1988, leaving Glenarm Station with a

total of seven compressor engines (1113-1119), which are the same engines there today. Tr. at

683, 1094. Panhandle applied for an operating permit for the four new engines in July 1988.

Pan. Exh. 5. The Agency issued an operating permit to Panhandle in August 1988. The Agency

issued Panhandle renewed operating permits in September 1989, June 1990, and July 1991. The

most recent permit included an expiration date of June 26, 1996. Each of the operating permits

had the same three special conditions (above) as were in the construction permit. Tr. at 102-03,

580, 584-90; Stip. Exh. 2-5. Panhandle did not appeal the Agency’s 1988 construction permit

decision. Nor did Panhandle appeal any of the four subsequent Agency decisions to issue

operating permits for the four engines.

 

None of the permits specified a limit on hours of operation or fuel use. Tr. at 147, 575;

Stip. Exh. 1-5. Imposing an annual emissions limit in a permit, coupled with recordkeeping

requirements, was consistent with the Agency’s practice for restricting emissions below PSD

levels. Tr. at 102, 138-43; Incorp. Tr. at 361-62. Panhandle kept records of the hours of

operation and the fuel use for the four new engines. Pan. Exh. 7-13. The amount of NOx that a

compressor engine emits in a year can be calculated using a standard emission factor and data on

the engine’s hours of operation or the engine’s fuel use. Tr. at 29-30, 86-89, 140-41, 151-52,

485-87, 509-10, 560, 693, 746-47.

 

Annual Emission Reports and Inspections

 

Panhandle submitted to the Agency annual emission reports, which showed total NOx

emissions annually from Glenarm Station. Before the annual emission report filed in May 1995,

these reports did not provide information on emissions from each engine individually or

information on the total emissions from engines 1116-1119 collectively. To prepare the annual

reports, Panhandle staff calculated the emissions from each of the seven engines using a standard

---

 

7

emission factor and hours of operation data. Tr. at 58, 91-93, 145-46, 691-97, 784-85, 790-94;

Pan. Exh. 14; Stip. Exh. 9-16.

 

Panhandle employees in Houston, Texas responsible for calculating and reporting

emissions knew of the amounts of NOx being emitted from the Glenarm Station engines. The

evidence in the record, however, does not demonstrate that any of those persons knew of the

461.3 TPY permit limit before the Agency notified Panhandle in 1996 of excess emissions.

Panhandle employees who operated Glenarm Station knew of the permit limit. The evidence in

the record, however, does not demonstrate that any of those persons knew how much NOx was

being emitted before the Agency notified Panhandle in 1996 of excess emissions. The only

Panhandle corporate officer to testify about NOx emissions was Mr. John Alholm, a vice

president of engineering who retired in January 1993. Mr. Alholm oversaw the 1988 Glenarm

Station construction project. While he was with Panhandle, he apparently had no knowledge that

the NOx emissions exceeded a permit limit. Tr. at 602-04, 616-22, 635-36, 656, 659, 671, 691-

99, 702, 704, 707-11, 747-48, 768-70, 791, 798-99, 1215; Pan. Exh. 14, 21; Pan. Br. at 2-3.

 

The Agency inspected Glenarm Station annually. The Agency’s inspection reports found

no violations regarding the four new engines until 1996. During or after the inspections,

Panhandle provided its records of fuel use and hours of operations to the Agency. Beginning at

least with 1991 operations, the hours of operation data was provided for each of the seven

compressor engines individually, while total fuel use data was provided for all seven engines

collectively. Before its 1996 inspection, the Agency did not use this data or the data in the

annual emission reports to assess whether NOx emissions from engines 1116-1119 might be

exceeding the permit limit. Tr. at 31, 35-42, 49, 58, 64-66, 75-77, 84-91, 94-95, 482-84, 492-

520, 528-31; Pan. Exh. 7-12; Stip. Exh. 7.

 

On August 19, 1996, the Agency inspected Glenarm Station. Tr. at 42-43; Stip. Exh. 17.

Because Panhandle had filed a permit application under Title V of the federal Clean Air Act

Amendments of 1990, the Agency’s 1996 inspection of Glenarm Station was more

comprehensive than its prior inspections. The inspection included review of an annual emission

report and the Title V permit application.

7

Tr. at 43-44, 56-58, 90-92; Stip. Exh. 7, 17.

Panhandle’s data on 1995 operations provided both fuel use and hours of operation for each of

the seven engines individually. To calculate 1995 NOx emissions from engines 1116-1119, the

Agency used the data from Panhandle on fuel use for the four engines, and a standard fuel-based

emission factor from USEPA’s 1995 edition of AP-42. Tr. at 29-30, 49-51, 54-56; Pan. Exh. 13.

This calculation showed 1995 NOx emissions from the four engines exceeded the 461.3 TPY

limit. Tr. at 49-52, 54-58; Stip. Exh. 17 at 0020, 0034.

 

7

Title V of the federal Clean Air Act Amendments of 1990 (42 U.S.C. §§ 7661-7661f) ushered

in the Clean Air Act Permit Program (CAAPP). A CAAPP permit is designed to be a

comprehensive statement of all air pollution obligations that apply to a facility. In Illinois, the

General Assembly added the CAAPP to the Act at Section 39.5 (415 ILCS 5/39.5 (2000)). The

Agency has codified the CAAPP permit application process (35 Ill. Adm. Code 270) and the

Board has codified the procedures to appeal the Agency’s CAAPP permit determinations (35 Ill.

Adm. Code 105.300-105.304).

---

 

8

The Agency contacted Panhandle later in 1996 to express concern about NOx emissions

exceeding the permit limit. Tr. at 703-04, 706. After that, Panhandle in 1996 recognized that it

was exceeding the 461.3 TPY permit limit and expressed concern to the Agency over how the

Agency calculated the limit. Tr. at 712-14; Pan. Exh. 6.

 

Panhandle admits that NOx emissions from engines 1116-1119 at Glenarm Station

exceeded the 461.3 TPY limit from 1989 through 1998. Ans. at 14. Using a fuel-based emission

factor from USEPA’s 1985 edition of AP-42 (which the Agency used to set the permit limit of

461.3 TPY), Panhandle calculated the following NOx emissions from engines 1116-1119 in

TPY:

 

1989 686.26

1990 703.11

1991 747.70

1992 659.99

1993 706.55

1994 800.28

1995 1014.93

1996 1173.69

1997 911.57

1998 550.59

 

Pan. Exh. 28, App. B, PAN01706.

 

Violation Notice and Subsequent Events

 

On March 20, 1997, the Agency issued a violation notice to Panhandle based on its

determination that the four new engines at Glenarm Station had violated the permitted annual

NOx emission limit of 461.3 TPY. Tr. at 59; Stip. Exh. 20. In April 1997, representatives of the

Agency and Panhandle met to discuss the violation notice. Tr. at 125, 719-24. In May 1997,

Panhandle responded to the violation notice by submitting to the Agency a compliance

commitment agreement (CCA), along with a construction permit application. Tr. at 63; Incorp.

Tr. at 331; Stip. Exh. 22. Panhandle implemented an “environmental dispatch” program at

Glenarm Station, under which Panhandle reduced emissions from engines 1116-1119 by running

the older engines (1113-1115) first. Tr. at 727-29, 735; Stip. Exh. 22. The Agency rejected the

CCA in June 1997, and issued a notice of intent to pursue legal action in November 1997. Stip.

Exh. 23, 24.

 

In the May 1997 construction permit application, Panhandle sought to increase the PSD

avoidance limit of 461.3 TPY in its minor source permit, and to install “Clean Burn” emissions

controls on engines 1116 and 1117, the two engines out of the four new engines that had no

emission controls. Stip. Exh. 22. In June 1997, the Agency responded to the construction permit

application by issuing a notice that the application was incomplete. The Agency’s notice stated

that the application failed to demonstrate Panhandle’s compliance with PSD requirements. Tr. at

108-09, 729-730; Incorp. Tr. at 333; People Exh. 2. Panhandle submitted additional information,

---

 

9

and twice proposed revised PSD avoidance limits. Based on recalculating annual NOx

emissions from retired engines 1101-1112 using data from 1985 and 1986, Panhandle requested

to increase its PSD avoidance limit from 461.3 TPY to 560.94 TPY, then later sought to increase

the NOx limit to 729.08 TPY. Incorp. Tr

.

at 303, 305-16, 725; People Exh. 3. In December

1997, the Agency denied Panhandle’s permit application because Panhandle failed to

demonstrate that it would not violate PSD. Tr. at 732; Incorp. Tr

.

at 316.

 

In January 1998, Panhandle filed with the Board a petition to review the Agency’s

decision denying the permit application. The Board affirmed the Agency’s decision in January

1999, and Panhandle appealed the Board’s decision. Tr. at 732. The Fourth District Appellate

Court affirmed the Board’s decision in June 2000.

See

Panhandle, PCB 98-102,

aff’d sub nom

 

Panhandle, 314 Ill. App. 3d 296, 734 N.E.2d 18.

 

In August 1999, Panhandle submitted a PSD permit application to the Agency. In its

application, Panhandle proposed to add “Clean Burn” emission control to engines 1116 and 1117

and to enhance the emission controls already on engines 1118 and 1119. Tr. at 732-34. The

Agency has not taken final action on Panhandle’s PSD permit application. Tr. at 734.

 

DISCUSSION

 

Below the Board first discusses the violations that the People have alleged. The Board

then discusses each of the five alleged affirmative defenses that Panhandle has raised. After

ruling on whether Panhandle has violated the Act, the Board, if necessary, will turn to the

appropriate remedy and the People’s request for costs and attorney fees.

 

  

Alleged Violations

 

The People allege that Panhandle violated three sections of the Act—Sections 9.1(d)(1),

9.1(d)(2), and 9(b). Sections 9.1(d)(1) and 9.1(d)(2) prohibit persons from violating PSD

requirements under the federal Clean Air Act. Section 9(b) prohibits persons from operating in

violation of their air permit conditions.

 

Alleged PSD Violations—Sections 9.1(d)(1) and 9.1(d)(2) of the Act

 

Section 9.1(d)(1) of the Act provides that “[n]o person shall . . . violate any provisions of

Section[] . . . 165 . . . of the Clean Air Act, as now or hereafter amended, or federal regulations

adopted pursuant thereto;”

i.e.

, the federal PSD statutory and regulatory requirements.

8

415

ILCS 5/9.1(d)(1) (2000). Section 9.1(d)(2) of the Act provides:

8

Section 165 of the federal Clean Air Act provides that “[n]o major emitting facility on which

construction is commenced after August 7, 1977, may be constructed in any area to which this

part [42 U.S.C. § 7470

et seq

.] applies unless—(1) a permit has been issued for such proposed

facility in accordance with this part setting forth emission limitations for such facility which

conform to the requirements of this part; * * * (4) the proposed facility is subject to the best

available control technology for each pollutant subject to regulation under this chapter emitted

from, or which results from, such facility * * * .” 42 U.S.C. § 7475(a)(1), (4).

---

 

10

 

No person shall *** [c]onstruct, install, modify or operate any equipment,

building, facility, source or installation which is subject to regulation under

Section[] . . . 165 . . . of the Clean Air Act, as now or hereafter amended, except

in compliance with the requirements of such Section[] and federal regulations

adopted pursuant thereto, and no such action shall be undertaken without a

permit granted by the Agency or in violation of any conditions imposed by such

permit. *** 415 ILCS 5/9.1(d)(2) (2000).

 

Whether Panhandle is subject to PSD is therefore central to the alleged violations of

Sections 9.1(d)(1) and 9.1(d)(2) of the Act. The federal Clean Air Act established the PSD

program to prevent significant deterioration of air quality in areas with air quality that meets or

exceeds the National Ambient Air Quality Standards (

i.e.

, “attainment areas”).

See

42 U.S.C. §§

7470-7492. Under Section 165 of the Clean Air Act (42 U.S.C. § 7475), USEPA promulgated

regulations at 42 C.F.R. § 52.21 to implement the PSD program. The Agency administers the

federal PSD program under a delegation agreement with USEPA.

See

46 Fed. Reg. 9580, 9582,

9584 (Jan. 29, 1981).

 

The federal PSD program protects against the degradation of air quality in attainment

areas by imposing various requirements on new and modified major stationary sources of

regulated pollutants. Generally, PSD requirements are imposed upon projects that constitute the

construction of a new “major stationary source” or a “major modification” of an existing major

stationary source.

 

A “major modification” is:

 

any physical change in or change in the method of operation of a major stationary

source that would result in a

significant net emissions increase

of any pollutant

subject to regulation under the [federal Clean Air Act]. 40 C.F.R. § 52.21(b)(2)(i)

(emphasis added).

   

A “net emissions increase” is the sum of (1) any increase in actual emissions from the

physical change or change in the method of operation and (2) any other increases and decreases

in actual emissions that are contemporaneous with the increase from the change. 40 C.F.R. §

52.21(b)(3)(i). The pollutant at issue in this case is NOx. A net emissions increase for NOx is

“significant” if it equals or exceeds 40 TPY. 40 C.F.R. § 52.21(b)(23)(i). Therefore, a major

source that undertakes a major modification (

i.e.

, a change resulting in a net emissions increase

in NOx of 40 TPY or more) is subject to PSD.

 

If a modification is “major,” a PSD permit must be obtained before construction begins.

40 C.F.R. § 52.21(i).

9

Before a PSD permit can be issued, the PSD rules require, among other

9

Section 52.21(i) provides in part: “(i) Review of major stationary sources and major

modifications—Source applicability and exemptions. (1) No stationary source or modification

to which the requirements of paragraphs (j) through (r) of this section apply shall begin actual

---

 

11

things, an emissions source to demonstrate that it will use BACT to control its emissions. 40

C.F.R. § 52.21(j).

10

BACT means:

 

an emissions limitation . . . based on the maximum degree of reduction for each

pollutant . . . which would be emitted from any proposed major stationary source

or major modification which the Administrator, on a case-by-case basis, taking

into account energy, environmental, and economic impacts and other costs,

determines is achievable for such source or modification through application of

production processes or available methods, systems, and techniques, including

fuel cleaning or treatment or innovative fuel combustion techniques for control of

such pollutant. 40 C.F.R. § 52.21(b)(12).

 

The Agency issued a construction permit to Panhandle in 1988 to take out of operation

12 compressor engines (engines 1101-1112) of the 15 existing engines at Glenarm Station, and

to replace those 12 engines with four new compressor engines (engines 1116-1119). The

construction permit contained an emission limit for NOx that applied only to the four new

compressor engines being added. This NOx limit of 461.3 TPY was designed to ensure that

Panhandle’s construction project would not be a major modification—that is, the construction

project would not result in a net emissions increase of 40 TPY or more of NOx.

 

The Agency’s calculated PSD avoidance limit of 461.3 TPY had two components. First,

because Panhandle was taking 12 engines out of operation, those engines would no longer emit

NOx. Panhandle therefore received a credit for decreasing those emissions. Panhandle provided

data on the engines’ fuel use and hours of operation for 1987. With this data, the Agency

calculated that the 12 engines emitted 421.4 tons of NOx in 1987. Panhandle’s emissions

baseline credit (the amount of the decreased emissions) therefore was 421.4 TPY.

 

Second, the Agency took the 421.4 TPY figure and added a less than “significant”

increase in emissions of 39.9 TPY,

i.e.

, NOx emissions after the change could be no greater than

39.9 TPY more than emissions before the change. These two figures (421.4 TPY and 39.9 TPY)

added up to the NOx permit limit of 461.3 TPY. Accordingly, the permit limit, applicable only

to the four new engines, was designed to ensure that the “net emissions increase” from the 1988

construction without a permit which states that the stationary source or modification would meet

those requirements.” 40 C.F.R. § 52.21(i)(1).

  

10

Section 52.21(j) provides in part: “Control technology review. (1) A major stationary source

or major modification shall meet each applicable emissions limitation under the State

Implementation Plan and each applicable emissions standard and standard of performance under

40 CFR parts 60 and 61. *** (3) A major modification shall apply best available control

technology for each pollutant subject to regulation under the [federal Clean Air Act] for which it

would result in a significant net emissions increase at the source. This requirement applies to

each proposed emissions unit at which a net emissions increase in the pollutant would occur as a

result of a physical change or change in the method of operation in the unit.” 40 C.F.R. §

52.21(j)(1), (3).

 

---

 

12

construction changes would not be “significant” (

i.e.

, would be less than 40 TPY) and thus that

the project would not be a major modification subject to PSD. The Agency subsequently issued

four operating permits to Panhandle, each of which had the 461.3 TPY limit on NOx emissions.

 

In March 1997, Panhandle received a violation notice from the Agency based on NOx

emissions exceeding the 461.3 TPY limit, which ultimately led to this enforcement action. After

receiving the violation notice, Panhandle applied with the Agency to increase the PSD avoidance

limit,

i.e.

, retain a minor source permit but with a less stringent NOx emission limit. Panhandle

argued that the Agency erred in 1988 when it calculated the 421.4 TPY baseline for the

construction permit. The Agency denied Panhandle’s application. The Board affirmed the

Agency’s denial and, in turn, the Fourth District Appellate Court affirmed the Board’s decision.

See

Panhandle, PCB 98-102,

aff’d sub nom

Panhandle, 314 Ill. App. 3d 296, 734 N.E.2d 18.

 

The People allege that Panhandle emitted NOx from engines 1116-1119 in excess of the

461.3 TPY permit limit, which resulted in a major modification subject to PSD,

i.e.

, a net

emissions increase of 40 TPY or more of NOx. The People assert that, despite Panhandle’s NOx

emissions, Panhandle failed to demonstrate BACT, failed to obtain a PSD permit before

constructing or operating engines 1116-1119, and failed to install BACT. The People allege

that, by these failures, Panhandle violated PSD requirements at Section 165 of the federal Clean

Air Act (42 U.S.C. § 7475) and 40 C.F.R. §§ 52.21(i) and (j), and therefore violated Sections

9.1(d)(1) and 9.1(d)(2) of the Act. Comp. at 7-9.

 

As noted, under the federal Clean Air Act, major modifications cannot be built in

attainment areas without a PSD permit and BACT.

See

42 U.S.C. § 7475(a); 40 C.F.R. §§

52.21(i), (j). Panhandle concedes that its NOx emissions from the four new engines have

consistently exceeded the PSD avoidance limit of 461.3 TPY limit and, as of the start of this

enforcement action, had continued to do so. Panhandle also concedes that it has neither obtained

a PSD permit nor implemented emission controls on the four engines that constitute BACT. The

parties do not dispute that Glenarm Station is a major stationary source for NOx or that the

facility is in an attainment area. Ans. at 9-10 (engines 1101-1115 emitted more than 250 TPY of

NOx);

see

 

also

40 C.F.R. § 52.21(b)(1)(i) (definition of “major stationary source”). The parties,

however,

do

dispute whether Panhandle’s 1988 replacement of the 12 compressor engines with

the four new engines was a “major modification” subject to PSD. Panhandle argues that its

exceedences of the 461.3 TPY NOx limit did not trigger PSD requirements, and that the engines

are a minor source.

 

The “source obligation” regulation of PSD, at 40 C.F.R. § 52.21(r)(4), provides:

 

At such time that a particular source or modification becomes a major stationary

source or major modification solely by virtue of a relaxation in any enforceable

limitation which was established after August 7, 1980, on the capacity of the

source or modification otherwise to emit a pollutant, such as a restriction on hours

of operation, then the requirements [of] paragraphs (j) through (s) of this section

shall apply to the source or modification as though construction had not yet

commenced on the source or modification. 40 C.F.R. § 52.21(r)(4).

 

---

 

13

At the time it promulgated the PSD rules, USEPA discussed the enforcement options available to

the administering agency when a source exceeds the limit of its PSD avoidance permit, including

the applicability of 40 C.F.R. § 52.21(r)(4):

 

One option is simply to enforce . . . the limitations in the permit . . . with the

result that the source retains its minor status. This is appropriate where,

despite

the permit violations, it appears that the source intends to adhere to the emissions

limitations in the future

. However, [USEPA] retains the right to

enforce the PSD

. . . violation as well

.

 

The second option is to invoke the “source obligation” regulations, e.g., 40 CFR

52.21(r)(4), and treat the source as major by requiring it to obtain a PSD

. . . permit. This course is appropriate where the source, through a change in

business plans, or a

belated realization that its original plans cannot

accommodate the design or operational limitations in that permit, and so exceeds

them

. *** [USEPA] treats the source “as though construction had not yet

commenced” for PSD . . . permitting purposes. 54 Fed. Reg. 27274, 27280 (June

28, 1989) (emphasis added).

 

In Panhandle’s appeal of the Agency’s decision denying it a modified minor source

permit with an increased PSD avoidance limit, the Board found the facts of Panhandle’s case

analogous to the second option that USEPA describes and concluded that PSD had been

triggered.

See

Panhandle, PCB 98-102, slip op. at 15,

aff’d sub nom

Panhandle, 314 Ill. App. 3d

296, 734 N.E.2d 18.

11

However, as the Board stated in that proceeding, because its decision was

made in a permit appeal, it was not binding or

res judicata

in any subsequent enforcement

action.

See

Panhandle, PCB 98-102, slip op. at 7-8 (May 20, 1999).

 

Based on the record before it in this enforcement proceeding, the Board again finds that

the second scenario described in USEPA guidance better characterizes the facts of this case. The

condition in Panhandle’s minor source permit limiting NOx emissions to 461.3 TPY was

designed to ensure that Panhandle would avoid PSD by limiting the net emissions increase of

NOx from the 1988 construction project to 39.9 TPY. The permit stated that this was its

purpose. By meeting this PSD avoidance limit in the permit, Panhandle’s increase in NOx

emissions would not constitute a major modification under PSD because it would be less than the

40 TPY threshold.

 

The first enforcement option described by USEPA provides that an agency may enforce

against the exceedences of the minor source permit, without enforcing PSD, if the source intends

to adhere to the original permit limit. This option does not apply here. Panhandle did not exceed

the PSD avoidance limit in its minor source permit once or twice and then demonstrate a ready

ability to comply with the limit. On the contrary, Panhandle continuously exceeded the PSD

11

The Board also held that the Agency lacked the authority to reconsider its 1988 permit

decision. The Fourth District Appellate Court affirmed the Board’s decision on this ground and

others, making it unnecessary for the court to reach the issue of PSD applicability.

See

 

Panhandle, 314 Ill. App. 3d at 306, 734 N.E.2d at 25.

---

 

14

avoidance limit for many years and finally sought, not to comply with the limit, but to greatly

increase it. Even under the first enforcement option, however, the administering agency retains

the right to enforce the PSD violation as well. Of course, the Act prohibits both the violation of

PSD and the violation of a minor source permit, and the People allege both types of violations

here.

 

The court in United States v. Louisiana-Pacific Corp., 682 F. Supp. 1122 (D. Colo. 1987)

rejected an emission source’s similar arguments about whether PSD is triggered:

 

[Defendant] fails to account satisfactorily for a source which obtains permits

under another regulatory scheme limiting emissions to 250 TPY or less [the

trigger for being considered a “major stationary source” under PSD] and then

fails

to stay within those limitations

. Clearly if Congress intended that a new source

with the potential to emit 250 TPY should be subject to PSD new source review,

it most certainly intended that a new source which actually emits more than 250

TPY should be subject to the PSD program.

***

[Defendant] contends that [USEPA’s] recourse would be to enforce the “federally

enforceable” limitations in the [minor source] permits [without enforcing PSD].

Under such a scenario, however, [USEPA] would be deprived of the benefit of the

remedies Congress created for a violation of PSD. Additionally, [defendant’s]

contention ignores the obvious answer that if Congress had intended for such a

state of affairs to exist, it would never have enacted the PSD program. Louisiana-

Pacific, 682 F. Supp. at 1133 (emphasis added).

 

Panhandle also asserts that it did not know it was violating the 461.3 TPY NOx limit

until the Agency notified Panhandle after the 1996 inspection. It is well-settled, however, that

knowledge is irrelevant to whether a violation occurred. The Act is “

malum prohibitum

, no

proof of guilty knowledge or

mens rea

is necessary to a finding of guilt.” Meadowlark Farms,

Inc. v. PCB, 17 Ill. App. 3d 851, 861, 308 N.E.2d 829, 836 (5th Dist. 1974);

see also

Freeman

Coal Mining Co. v. PCB, 21 Ill. App. 3d 157, 163, 313 N.E.2d 616, 621 (5th Dist. 1974).

Accordingly, whether Panhandle knew it was violating the Act has no bearing on whether

Panhandle violated the Act.

 

The Board finds that Panhandle’s emissions exceeded its PSD avoidance limit for years.

These exceedences demonstrate that the changes Panhandle made in 1988 increased its

emissions by 40 tons or more per year, and therefore that Panhandle made a major modification

in 1988. As Panhandle concedes, it did not comply with PSD. Panhandle constructed and

operated a major modification without obtaining a PSD permit and without demonstrating or

implementing BACT, in violation of PSD requirements under the federal Clean Air Act. The

Board therefore finds that Panhandle, absent any affirmative defenses (discussed below),

violated Sections 9.1(d)(1) and 9.1(d)(2) of the Act.

 

Alleged Permit Condition Violation—Section 9(b) of the Act

 

---

 

15

The People allege that Panhandle violated Section 9(b) of the Act. Section 9(b) provides

that “[n]o person shall *** operate any equipment [or] facility . . . capable of causing or

contributing to air pollution . . . without a permit granted by the Agency, or in violation of any

conditions imposed by such permit.” 415 ILCS 5/9(b) (2000). The People allege that Panhandle

violated the minor source permit condition limiting NOx emissions to 461.3 TPY and therefore

violated Section 9(b). Comp. at 10-11. Panhandle admits that “the NOx emissions from

compressor engines 1116-1119 at its Glenarm Station exceeded the 461.3 [TPY] NOx limit

beginning with the first full year [1989] the engines operated and continuing every year since.”

Pan. Br. at 1.

 

NOx emissions from the four new engines at Glenarm Station consistently exceeded the

461.3 TPY NOx permit limit. Panhandle’s own calculations show exceedences each year from

1989 through 1998. These calculations reveal that the smallest amount of emissions, taking

place in 1998, exceeded the limit by 89.29 tons, while the largest amount of emissions, taking

place in 1996, exceeded the limit by 712.39 tons. The Board finds it appropriate that, for these

calculations, Panhandle used the same USEPA fuel-based emission factor that the Agency used

to calculate the permit limit of 461.3 TPY. However, using a variety of different emission

factors also revealed year after year of exceedences of the permitted NOx emission limit.

See

,

e.g.

, People Exh. 3 at 0090; Pan. Exh. 28, App. A, PAN01694, App. B, PAN01706; Stip. Exh. 22

at 0182. The Board finds that Panhandle violated the 461.3 TPY NOx permit limit and therefore,

absent any affirmative defenses (discussed below), violated Section 9(b) of the Act.

 

Alleged Affirmative Defenses

 

Panhandle raises five alleged affirmative defenses to the violations alleged by the People.

The first and second alleged affirmative defenses relate to the 461.3 TPY NOx limit itself. The

third, fourth, and fifth alleged affirmative defenses relate to the Agency inspecting Glenarm

Station, renewing Panhandle’s operating permit, and reviewing Panhandle’s annual emission

reports. In the alternative, Panhandle states that if the Board finds that the alleged affirmative

defenses do not preclude enforcement, then the evidence entered to support each defense should

mitigate against a civil penalty. Pan. Br. at 3.

 

First Alleged Affirmative Defense: Denial of Due Process

 

Panhandle claims that the Agency denied it due process by issuing the minor source

permit without first giving Panhandle, and the public, notice and an opportunity to comment on

the 461.3 TPY limit. Panhandle argues that the emissions baseline credit that the Agency

calculated in 1988 was too small. Again, based on 1987 fuel use data for the 12 retired engines,

the Agency calculated a credit of 421.4 TPY, reflecting the decrease in NOx emissions by taking

the 12 engines out of operation. Panhandle argues that 1985 and 1986 were more representative

of how the 12 engines normally operated. Panhandle claims that 1987 was not representative

because warmer weather in 1986 and 1987 limited natural gas use in 1987. Panhandle asserts

that if, in 1988, a draft permit had been issued and subject to notice and comment, “then the

problems with the 461.3 TPY NOx limit . . . would have been discovered.” Pan. Br. at 18-19.

Panhandle argues that the permit limit is therefore invalid and unenforceable.

 

---

 

16

Special condition No. 1 of Panhandle’s 1988 construction permit stated that the “overall

increase in NOx emissions from the replacement [of compressor engines] will not exceed 39.9

tons per year” and that this “condition is necessary to avoid applicability of 40 CFR 52.21, Rules

for Prevention of Significant Deterioration (PSD).” Stip. Exh. 1. Special condition No. 2 of the

construction permit states that the 461.3 TPY “limit is based upon [emission] rates calculated

from standard emission factors, the gas usage from the most recent one year period and the

allowed increase of 39.9 tons per year.”

Id

. Thus, the minor source permit itself clearly stated

(1) that the NOx limit was 461.3 TPY; (2) that the limit was designed to avoid PSD; and (3) that

the limit was based on 1987 fuel use data for the retired engines.

 

Panhandle intended to avoid PSD by offsetting the new NOx emissions (from adding

engines 1116-1119) with the simultaneous emissions decrease (from taking engines 1101-1112

out of operation). Panhandle knew that the Agency would have to determine the amount of the

emissions decrease to perform this netting calculation. During the permit application process,

Panhandle provided the Agency with fuel use data on the 12 engines being retired. However,

Panhandle provided data not from 1985 and 1986, but rather from 1987. Pan. Exh. 1-4. As the

permit applicant, Panhandle could have provided data from 1985 and 1986 for the Agency to

consider. Panhandle should not be surprised that the Agency used the only data that Panhandle

provided to calculate past emissions from the 12 engines.

 

Moreover, Panhandle’s past NOx emissions exceeded not only its actual permit limit of

461.3 TPY, but also the higher PSD avoidance limit that Panhandle sought in 1997. As noted,

after the Agency issued the violation notice in 1997, Panhandle applied to increase its minor

source permit limit by using a baseline credit based on 1985 and 1986 NOx emissions from the

12 retired engines. In 1997, Panhandle first asked for an increase of the NOx limit to 560.94

TPY, then changed its application and sought an increase to 729.08 TPY. Despite Panhandle’s

concerns over how the Agency arrived at the NOx limit in 1988, Panhandle’s actual NOx

emissions repeatedly exceeded even Panhandle’s later-proposed limits. Nor does Panhandle

explain why its review of a “draft” of the 1988 permit would have been any more strenuous than

its review of the issued construction permit, or the four subsequent operating permits.

 

More importantly, however, for over 30 years, the Act has given permit applicants like

Panhandle the right to appeal Agency permit decisions. Specifically, Section 40(a)(1) of the Act

(415 ILCS 5/40(a)(1) (2000)) affords a permit applicant the opportunity to appeal an Agency

permit decision to the Board within 35 days after the Agency’s decision. Panhandle failed to do

so. By failing to do so, the permit became final and binding. Panhandle cannot now, in an

enforcement proceeding over ten years later, raise challenges to the validity of the permit’s

emission limit based on alleged deficiencies in the permit application process. To hold

otherwise would render the 35-day appeal period of Section 40(a)(1) meaningless.

See

 

Panhandle, 314 Ill. App. 3d at 304, 734 N.E.2d at 24 (having an unlimited time to revise permit

decisions “would render meaningless the review provisions of the Act”).

 

Panhandle’s reliance on Village of Sauget v. PCB, 207 Ill. App. 3d 974, 566 N.E.2d 724

(5th Dist. 1990) for its due process claim is therefore misplaced. In that case, the permit

applicant that raised a due process challenge, unlike Panhandle, timely appealed the Agency’s

---

 

17

permit decision to the Board and, in turn, timely appealed the Board’s decision to the Appellate

Court. The Board denies Panhandle’s first alleged affirmative defense.

 

The Board’s decision is consistent with Hawaiian Electric Co. v. USEPA, 723 F.2d 1440

(9th Cir. 1984). The Fourth District Appellate Court relied upon Hawaiian Electric when it

affirmed the Board in the Panhandle case involving the Agency’s denial of Panhandle’s request

for a revised minor source permit. In Hawaiian Electric, Hawaiian Electric requested that

USEPA modify Hawaiian Electric’s PSD permit after the time period for Hawaiian Electric to

appeal the original PSD permit had expired. Hawaiian Electric, 723 F.2d at 1441-42, 1445. The

court noted that the legislative intent to “avoid excessive bureaucratic contention” by requiring

USEPA to make permit decisions within a prescribed time period would be frustrated if past

determinations could be routinely challenged

de novo

.

Id

. at 1446. The court stated:

 

[Hawaiian Electric] argues that it is challenging the premises under which the

permit was originally granted and that therefore the application of the major

modification definition in particular and PSD review in general is incorrect. The

policy of finality, which is critical to the administration of a complex technocratic

program, dictates that [Hawaiian Electric’s] argument must fail. Finality is a

particularly important value in air pollution control because of the simultaneous

existence of substantial risk and substantial technical uncertainty.

Id

. at 1445.

 

Second Alleged Affirmative Defense: Permitted Emission Limit is Practicably

Unenforceable

 

Panhandle asserts that the annual NOx limit of 461.3 TPY is “illegal and unenforceable

because the permit did not contain practicably enforceable conditions . . . such as restrictions on

hours of operation or fuel usage . . . .” Pan. Br. at 19. This collateral attack by Panhandle on a

final and valid permit fails as a bar to enforcement for the reasons, articulated above, that

Panhandle’s first alleged affirmative defense must fail. Moreover, contrary to Panhandle’s

assertions, nowhere did the Louisiana-Pacific court hold that minor source permit limits on

actual emissions are unenforceable. In fact, the court acknowledged that such limits

are

 

enforceable.

See

Louisiana-Pacific, 682 F. Supp. at 1133 (referring to minor source permit limits

on actual emissions as “federally enforceable”).

 

Even Panhandle concedes that compliance with an annual emission limit

can

be

verified—a “way to determine compliance with an annual emissions cap is to run calculations

using data on fuel use or hours of operation and an emission factor.” Pan. Br. at 20. This

information was readily available to Panhandle and this record is replete with such calculations.

The minor source permit required Panhandle to keep records of the hours of operation and the

fuel use for each of the four new compressor engines.

 

Not restricting the new engines’ operating hours or fuel use in Panhandle’s permit does

not render the annual emission limit unenforceable. Panhandle could have readily monitored its

compliance with the NOx limit by estimating annual emissions, based on fuel use, hours of

operation, and a standard emission factor. Even if, as Panhandle asserts, the “Glenarm Station

personnel were not familiar with the manner in which NOx emissions could be calculated” (Pan.

---

 

18

Br. at 20), this is no defense. Moreover, Panhandle concedes that its “employees in Houston

responsible for calculating and reporting emissions to the Agency knew what the NOx emissions

were . . . .” Pan. Br. at 2. To prepare the annual emission reports, Panhandle staff calculated the

emissions from each of the four engines. Panhandle admits that “[s]omeone who could calculate

emissions should have known of the emissions limit.”

Id

. at 3.

  

Finally, Panhandle argues that, because it was retiring 12 “older, dirtier” engines and

replacing them with four more efficient engines, it believed in “good faith” that its 1988

construction project would decrease NOx emissions, not result in a significant net emissions

increase in NOx emissions. Pan. Br. 2, 19. As discussed above, however, the Act is

malum

prohibitum

—whether Panhandle believed it would not violate its permit is irrelevant to whether

Panhandle violated its permit. The Board denies Panhandle’s second alleged affirmative

defense.

      

Third Alleged Affirmative Defense: Waiver or Estoppel

 

Panhandle claims that it reasonably and detrimentally relied on the Agency’s alleged

misrepresentations that Panhandle was in compliance with the NOx emission limit in the PSD

avoidance permit. Pan. Br. at 22. Panhandle argues that it relied on the following:

 

1. The Agency’s annual inspections before 1996 found either “no violation” or a

violation unrelated to the four new engines, even with records of fuel use and

hours of operation provided;

 

2. The Agency’s renewals of the minor source operating permit, the standard for

issuance of which being that the permit applicant had submitted proof to the

Agency that the emission units at issue would not cause a violation of the Act;

and

 

3. The Agency’s failure to take any enforcement action upon receiving annual

emission reports from Panhandle. Pan. Br. at 24.

 

Panhandle states that the Agency, in carrying out these functions, has waived its right to enforce

against Panhandle or should now be estopped from pursuing this enforcement action.

 

The doctrine of waiver applies when a party intentionally relinquishes a known right or

his conduct warrants an inference to relinquish the right.

See

Hartford Accident and Indemnity

Co. v. D.F. Bast, Inc., 56 Ill. App. 3d 960, 962, 372 N.E.2d 829, 831 (1st Dist. 1977); People v.

Douglas Furniture of California, Inc., PCB 97-133, slip op. at 5 (May 1, 1997). The doctrine of

equitable estoppel may be applied when a party reasonably and detrimentally relies on the words

or conduct of another.

See

Brown’s Furniture, Inc. v. Wagner, 171 Ill. 2d 410, 431, 665 N.E.2d

795, 806 (1996); People v. Chemetco, Inc., PCB 96-76, slip op. at 10 (Feb. 19, 1998); White &

Brewer Trucking, Inc. v. IEPA, PCB 96-250, slip op. at 10 (Mar. 20, 1997). However, the

doctrine “should not be invoked against a public body except under compelling circumstances,

where such invocation would not defeat the operation of public policy.” Gorgees v. Daley, 256

Ill. App. 3d 514, 518, 628 N.E.2d 721, 725 (1st Dist. 1993).

---

 

19

 

As the Illinois Supreme Court explained:

 

This court’s reluctance to apply the doctrine of estoppel against the State has been

motivated by the concern that doing so may impair the functioning of the State in

the discharge of its government functions, and that valuable public interests may

be jeopardized or lost by the negligence, mistakes or inattention of public

officials. Brown’s Furniture, 171 Ill. 2d at 431-32, 665 N.E.2d at 806,

citing

 

Hickey v. Illinois Central Railroad, 35 Ill. 2d 427, 447-48, 220 N.E.2d 415, 426

(1966);

see also

Chemetco, PCB 96-76, slip op. at 11; White & Brewer Trucking,

PCB 96-250, slip op. at 10.

 

Consistent with this reluctance, a party seeking to estop the government must show that the

government made a misrepresentation with knowledge that the misrepresentation was untrue.

See

Medical Disposal Services, Inc. v. IEPA, 286 Ill. App. 3d 562, 570, 677 N.E.2d 428, 433

(1st Dist. 1997); City of Mendota v. PCB, 161 Ill App. 3d 203, 209,514 N.E.2d 218, 222 (3d

Dist. 1987); Chemetco, PCB 96-76, slip op. at 11; White & Brewer Trucking, PCB 96-250, slip

op. at 10.

 

  

The Board finds that Panhandle has not demonstrated waiver by the State. None of the

Agency’s activities constitute the relinquishment of the People’s right to bring this enforcement

action. Nor do the facts of this case present the “compelling circumstances” necessary for

applying the equitable doctrine of estoppel to bar the government from bringing this enforcement

action. Hickey, 35 Ill. 2d at 448, 220 N.E.2d at 426.

 

“[T]he reluctance of courts to hold governmental bodies estopped to assert their claims is

particularly apparent when the governmental unit is the State.” Hickey, 35 Ill. 2d at 447, 220

N.E.2d at 425. The General Assembly has given the Agency a central role in Illinois’ system of

environmental law. Under the Act, the Agency’s responsibilities include administering the

various air pollution control programs. These programs are a vital part of Illinois’ effort to

“restore, maintain, and enhance the purity of the air of this State in order to protect health,

welfare, property, and the quality of life and to assure that no air contaminants are discharged

into the atmosphere without being given the degree of treatment or control necessary to prevent

pollution.” 415 ILCS 5/8 (2000).

 

Functioning in this critical governmental capacity, the Agency issues permits to, inspects

the facilities of, and receives emissions data from companies all over Illinois.

See

415 ILCS

5/4(d), (g), (l) (2000). However, permit applications are considered by the Agency based on the

information that the applying companies provide. Inspection reports finding “no violation”

mean only that those particular Agency inspectors did not uncover a problem at a facility on

those specific occasions. Thousands of annual emission reports are received by the Agency

every year. None of these Agency functions insulate companies from liability for emitting

excess pollutants into the air.

 

Companies cannot simply sit back and wait to see if they will be caught by the Agency.

For Illinois’ system of environmental programs to be effective, self-policing is required of

---

 

20

industry. Here, when Panhandle became subject to Title V of the federal Clean Air Act

Amendments of 1990, the Agency conducted a more comprehensive inspection and found the

NOx emission problem. To exonerate Panhandle of liability for the pollutants it has emitted for

years in violation of our air pollution control laws because the Agency, acting in good faith, did

not discover the company’s problems sooner would surely “impair the functioning of the State in

the discharge of its governmental functions” and jeopardize “valuable public interests.” Hickey,

35 Ill. 2d at 447, 220 N.E.2d at 426.

 

The Board finds that the Agency’s execution of these basic governmental functions do

not absolve Panhandle of its statutory obligation to determine, on its own, whether it is

complying with its permit. As discussed above, Panhandle could have readily made that

determination.

See

Hickey, 35 Ill. 2d at 447, 220 N.E.2d at 425 (1966) (party alleging estoppel

must have “no knowledge or convenient means of knowing the true facts”). It is the

responsibility of companies doing business in Illinois to determine whether they are complying

with Illinois’ environmental laws. Panhandle’s reliance on Agency permit renewals and

inspections as the

sole

means by which Panhandle determined its compliance was unreasonable.

See

Chemetco, Inc., PCB 96-76, slip op. at 10; White & Brewer, PCB 96-250, slip op. at 10.

Moreover, Panhandle has made no showing that any Agency personnel made misrepresentations

to Panhandle with the knowledge that they were untrue. The Board denies Panhandle’s third

alleged affirmative defense.

Fourth Alleged Affirmative Defense: Unreasonable Delay by the Agency

 

 

Laches

.

Panhandle claims that the Agency’s “inaction over the course of many years”

warrant applying the doctrine of

laches

to bar this enforcement action. Pan. Br. at 25.

Panhandle claims that the Agency failed to exercise due diligence in the same three contexts for

which Panhandle claims waiver and estoppel: (1) annually inspecting Glenarm Station; (2)

renewing Panhandle’s minor source operating permit; and (3) reviewing annual emission reports

from Panhandle. Panhandle asserts that the Agency, over an eight-year period, “failed to

discover that operation of engines 1116-1119 caused NOx emissions to exceed the annual NOx

limit” resulting in the “undue delay” of this enforcement action.

Id

. at 26. Panhandle argues that

the Agency should have discovered the exceedence of the 461.3 TPY limit years before 1996

because Panhandle had supplied the Agency with “all the information necessary to determine

whether Panhandle was in violation of its permit.”

Id.

 

“

Laches

is an equitable doctrine which precludes the assertion of a claim by a litigant

whose unreasonable delay in raising that claim has prejudiced the opposing party.” Tully v.

Illinois, 143 Ill. 2d 425, 432, 574 N.E.2d 659, 662 (1991);

see also

City of Rochelle v. Suski,

206 Ill. App. 3d 497, 501, 564 N.E.2d 933, 936 (2d Dist. 1990). There are two principal

elements of

laches

: (1) lack of due diligence by the party asserting the claim; and (2) prejudice

to the opposing party as a result of the delay.

See

Van Milligan v. Board of Fire & Police

Commissioners, 158 Ill. 2d 84, 89, 630 N.E.2d 830, 833 (1994); Tully, 143 Ill. 2d at 432, 574

N.E.2d at 662; People v. State Oil Co., PCB 97-103, slip op. at 2 (May 18, 2000). As with the

equitable doctrine of estoppel, applying

laches

against the government is disfavored and can

apply against the State functioning in its governmental capacity only in compelling

circumstances.

See

Hickey, 35 Ill. 2d at 447-48, 220 N.E.2d at 425-26.

---

 

21

  

Panhandle has not demonstrated that the Agency “knowingly slept on [its] rights to the

detriment of [Panhandle].” Tully, 143 Ill. 2d at 432, 574 N.E.2d at 662. In addition, as noted,

Panhandle admits that its Houston staff knew of the amounts of NOx being emitted from engines

1116-1119 while its Glenarm Station staff knew of the 461.3 TPY permit limit. Pan. Br. at 2.

This record does not show that any alleged delay in the Agency’s discovery of violations

prejudiced Panhandle so as to preclude the People’s enforcement action. Panhandle’s failure to

recognize that its emissions violated its permit was not caused by the time it took the Agency to

discover the violations, but rather by the deficient internal communications of Panhandle, which

showed a flagrant disregard of its permit obligation.

 

Had Panhandle diligently monitored its compliance, it could have addressed the

exceedences long before the Agency became aware of them. For that matter, if Panhandle had

merely reviewed its permit when it received it in 1988, Panhandle could have avoided these

violations. The person who oversaw the 1988 construction project for Panhandle, Mr. John

Alholm, testified about the importance of the 461.3 TPY limit in the 1988 permit:

 

Q. What does a 461.3 ton per year NOx emission limit mean to you?

* * *

A. *** [I]f that is not enough tonnage of NOx emissions from these units that

would allow them to operate at a level that they were intended to operate

at, that would have been, in effect, a show stopper.

 

Q. What do you mean by show stopper?

   

A. We would have gone back to find out how many hours of operation that

would have represented. If that was not close to 8,000 hours a year for

each one of these units, then that would have been in question as to why

not and should we go ahead with the project. Tr. at 632-33.

 

Accordingly, before it received its 1988 construction permit, Panhandle knew the number of

hours that it intended to operate engines 1116-1119. Yet Panhandle could not operate these four

engines for more than approximately half of that time and stay under the 461.3 TPY limit. Tr. at

707. With its intended hours of operation and a standard emission factor, Panhandle could have

calculated the tons of NOx emissions per year that it believed it needed, and, at a minimum,

compared that figure to the 461.3 TPY limit when it received the permit. Somehow Panhandle

failed to do that even though the limit was so critical to a $15 to $20 million construction project.

 

As with the alleged defense of estoppel, the Board finds that Panhandle failed to prove

the compelling circumstances required to apply the equitable doctrine of

laches

against the

government. The Board denies Panhandle’s alleged affirmative defense based on

laches

.

  

 

The 180-Day Time Period of Section 31(a)(1) of the Act.

Panhandle alleges that the

Agency failed to comply with the 180-day time period of Section 31(a) of the Act. Section

31(a)(1) states in part:

 

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22

Within 180 days of becoming aware of an alleged violation of the Act or any rule

adopted under the Act or of a permit granted by the Agency or condition of the

permit, the Agency shall issue and serve, by certified mail, upon the person

complained against a written notice informing that person that the Agency has

evidence of the alleged violation. 415 ILCS 5/31(a)(1) (2000).

 

Panhandle alleges that the Agency failed to issue a violation notice to Panhandle within 180 days

after becoming aware of Panhandle’s exceedence of the 461.3 TPY permit limit. The Agency

inspected Glenarm Station on August 19, 1996, and issued the violation notice to Panhandle on

March 20, 1997—213 days after the inspection.

 

Section 31 of the Act provides all respondents in State enforcement actions with notice

and opportunity to meet with the Agency before the Agency refers the matter to the Attorney

General for enforcement. The Board has held that the 180-day time period of Section 31(a)(1) is

not a statute of limitations.

See

People v. John Crane, Inc. PCB 01-76, slip op. at 5

(May 17, 2001). In Crane, the Board also held that “[w]hile the substance of the Section 31 pre-

referral process is mandatory, the 180-day time period of Section 31(a)(1) is directory.”

Id.

at 6.

 

Panhandle does not allege that the Agency failed to issue a violation notice or to meet

with Panhandle to discuss the violation notice before referring the matter to the Attorney

General. In fact, the Agency afforded Panhandle this process. Panhandle alleges only that the

Agency did not issue the violation notice within the 180-day time period of Section 31(a)(1).

However, even if the Agency did not issue the violation notice within the directory 180-day

period, the Board is not thereby divested of jurisdiction to hear this complaint.

See

Crane, PCB

01-76, slip op. at 6. The Board denies Panhandle’s alleged affirmative defense based on the 180-

day time period of Section 31(a)(1).

 

Fifth Alleged Affirmative Defense: Statute of Limitations

 

Panhandle asks the Board to apply the Code of Civil Procedure’s five-year limitation on

civil actions (735 ILCS 5/13-205 (2000)) to this enforcement action. Panhandle states that the

alleged violations “accrued over ten years before” the People filed the complaint. Pan. Br. at 29.

As with the third and fourth alleged affirmative defenses, Panhandle again asserts that the

Agency failed to diligently assess “the compliance status of the Glenarm Station from 1989 until

1996.”

Id.

Panhandle argues that the Agency’s “egregious lack of diligence” warrants a

departure from the “general rule that the statute of limitations does not apply where the State

brings an action involving public rights.”

Id.

   

 

  

Panhandle also argues that this enforcement action is not in pursuit of the “public’s right

to a clean environment” because it really seeks only civil penalties. Pan. Br. at 30. According to

Panhandle, the “installation of emission controls, and not the assessment of civil penalties, will

help to ensure a healthful environment.”

Id.

at 29. Panhandle filed a PSD permit with the

Agency in August 1999 to install emission controls on the two uncontrolled engines (1116 and

1117) and to augment controls on engines 1118 and 1119. Panhandle asserts that the only basis

for which the People seek an order from the Board that Panhandle cease and desist from further

violations is that the Agency has not yet taken final action on the PSD permit application.

---

 

23

 

The Board does not find any merit in Panhandle’s claims. It is well-settled that no statute

of limitations applies to enforcement actions brought by the People pursuant to Section 31 of the

Act (415 ILCS 5/31 (2000)), as is the case here.

See

,

e.g.

, Crane, PCB 01-76, slip op. at 5.

Moreover, the People are seeking “to protect the public’s right to a clean environment.” Pielet

Bros. Trading, Inc. v. PCB, 110 Ill. App. 3d 752, 758, 442 N.E.2d 1374, 1379 (5th Dist. 1982).

Besides the purposes of PSD under the federal Clean Air Act to ensure that air quality in

attainment areas does not suffer, the General Assemble found in Section 8 of the Act that:

 

pollution of the air of this State constitutes a menace to public health and welfare,

creates public nuisances, adds to cleaning costs, accelerates the deterioration of

materials, adversely affects agriculture, business, industry, recreation, climate,

and visibility, depresses property values, and offends the senses. 415 ILCS 5/8

(2000).

 

That Panhandle filed a PSD permit application to install emission controls is no

assurance of compliance with PSD. Panhandle’s proposed control technology and emission rate

may not be the best available control technology or BACT. In addition, Panhandle may not

make the requisite ambient air quality impact demonstration under PSD. Panhandle also could

simply withdraw its PSD application. The People seek a Board order requiring that Panhandle

cease and desist from further violating PSD requirements, as well as the 461.3 TPY limit in the

permit. Comp. at 9, 11. Moreover, Panhandle cites no authority for its proposition that civil

penalties do not further the public’s right to a clean environment. The People seek civil penalties

for the Environmental Protection Trust Fund.

See

415 ILCS 5/42(a) (2000). Civil penalties can

also serve to deter further violations and enhance voluntary compliance by a respondent and

those similarly situated.

See

415 ILCS 5/42(h)(4) (2000). The Board finds that this enforcement

action seeks to further the public’s right to a clean environment and is not subject to the Code of

Civil Procedure’s five-year limitation on actions.

  

  

Remedy

 

Having found that none of the alleged affirmative defenses bar enforcement and that

Panhandle violated Sections 9.1(d)(1), 9.1(d)(2), and 9(b) of the Act, the Board turns to the

appropriate remedy for these violations. The People request that the Board order Panhandle to

cease and desist from further violations and impose a $2,218,759 civil penalty on Panhandle.

People Br. at 138. Panhandle argues that the Board should assess no civil penalty.

Alternatively, Panhandle argues that because it has not benefited economically from the

violations, any civil penalty should be no greater than $160,000. Pan. Br. at 3, 89-90. The

maximum possible penalty authorized by the Act easily exceeds $60 million.

See

415 ILCS

5/42(a) (2000).

 

Panhandle’s minor source permit limit on NOx emissions of 461.3 TPY has special

significance. Like any air permit condition, the violation of the NOx limit is a violation of

Section 9(b) of the Act, which prohibits the violation of air permit conditions. However,

Panhandle’s permitted NOx limit was also designed so that Panhandle could avoid PSD and its

associated expenses. Compliance with the limit of 461.3 TPY would ensure that Panhandle’s

---

 

24

1988 construction project, adding the four new engines, was not a “major modification” under

PSD. Any “net emissions increase” in NOx resulting from the modification would not be

“significant” because the increase would be less than 40 TPY. By exceeding that limit as it has,

Panhandle not only violated a permit condition, it triggered the applicability of PSD. Its 1988

construction project was a “major modification,” which Panhandle built and operated without a

PSD permit or BACT, in violation of PSD and thus in violation of Sections 9.1(d)(1) and

9.1(d)(2) of the Act.

  

In determining an appropriate remedy for these violations, the Board must consider the

factors set forth in Section 33(c) of the Act (415 ILCS 5/33(c) (2000)). In determining an

appropriate civil penalty component of that remedy, the Board is authorized to consider the

factors set forth in Section 42(h) of the Act (415 ILCS 5/42(h) (2000)). Before making its

finding on the appropriate remedy, below the Board applies each of the factors of Sections 33(c)

and 42(h) to the record in this case, including evidence introduced on the alleged affirmative

defenses.

 

Section 33(c) of the Act

 

To determine an appropriate remedy, including civil penalty, the Board considers the

factors set forth in Section 33(c) of the Act. Section 33(c) provides in part:

 

(c) In making its orders and determinations, the Board shall take into

consideration all the facts and circumstances bearing upon the

reasonableness of the emissions, discharges or deposits involved

including, but not limited to:

 

(i) the character and degree of injury to, or interference with the

protection of the health, general welfare and physical property of

the people;

 

(ii) the social and economic value of the pollution source;

 

(iii) the suitability or unsuitability of the pollution source to the area in

which it is located, including the question of priority of location in

the area involved;

 

(iv) the technical practicability and economic reasonableness of

reducing or eliminating the emissions, discharges or deposits

resulting from such pollution source; and

 

(v) any subsequent compliance. 415 ILCS 5/33(c) (2000).

 

The Board considers each of these factors in turn.

 

 

Character and Degree of Injury or Interference.

The People state that:

 

---

 

25

Despite obtaining a PSD avoidance permit for a purported minor source

construction project, Panhandle operated the compressor engines at emission

levels that made the project a major modification. By doing so . . . Panhandle

prevented the [Agency] from fulfilling its role as the delegated PSD authority in

Illinois. People Br. at 53-54.

 

Panhandle states that the record contains no evidence that the excess NOx emissions

“were of a character and degree to interfere with the protection and heath, general welfare or

property of the people,” and that “Panhandle’s NOx emissions in excess of the 461.3 TPY permit

limit had minimal impact, if any, on the air quality of Sangamon County.” Pan. Br. at 34.

Panhandle then explains that the NOx emissions from engines 1116-1119 comprised only a small

fraction of the total NOx emissions from Illinois in general and Sangamon County in particular.

Panhandle also presented Mr. Bruce Dumdei with the environmental engineering firm of URS

Corporation, who testified that emissions from engines 1116-1119 “are not significant compared

to the overall emissions from Sangamon County and other sources that contribute to Sangamon

County’s annual air quality for [NOx].” Tr. at 1170-71.

 

Panhandle’s arguments miss the mark. Regardless of the fact that Panhandle’s excess

emissions have not resulted in Sangamon County losing its attainment status, Panhandle has built

and operated a major modification without providing any of the environmental protections that

Congress intended. NOx is a pollutant that can contribute to a violation of the National Ambient

Air Quality Standard for nitrogen dioxide, and can result in acid rain and ozone formation, all of

which threaten health. That is why NOx was designated a pollutant under the federal Clean Air

Act and why there is an extensive, federally-mandated permitting process for major NOx

emitters.

 

Complainants do not have to prove that an air quality standard has been violated or that

someone has experienced health problems for the Board to weigh this Section 33(c) factor

against a respondent that has unlawfully emitted pollutants into our air. The General Assembly

recognized that an effective environmental protection system must prohibit even threats of air

pollution.

See

415 ILCS 5/9(a) (2000) (“No person shall . . . [c]ause or

threaten

or allow the

discharge or emission of any contaminant into the environment in any State so as to cause

or

tend to cause

air pollution in Illinois . . . .”) (emphasis added). Panhandle’s NOx emissions

exceeded the 461.3 TPY limit each year for at least ten years by very large margins, typically by

several hundred tons of NOx each year. For example, NOx emissions from the four engines in

1995 and 1996 were, respectively, 1014.93 tons and 1173.69 tons, more than doubling the limit

in the minor source permit.

 

Nor do Panhandle’s violations occur in a vacuum. As Panhandle points out, it is not the

only source permitted to emit NOx in Sangamon County. The cumulative effect of multiple

violations by Panhandle and other sources could endanger the air quality of Sangamon County.

Further, excess NOx emissions from sources across Illinois also can negatively impact ozone

levels in the Chicago and East St.Louis ozone nonattainment areas. The General Assembly also

recognized that air pollution can result from many sources when it prohibited contaminant

emissions causing or tending to cause air pollution “either alone or in combination with

contaminants from other sources.”

See

415 ILCS 5/9(a) (2000).

---

 

26

 

Moreover, the Agency issued, and Panhandle accepted, a PSD avoidance permit, the

purpose of which was to allow Panhandle to increase its NOx emissions slightly, without having

to undertake the costly and time-consuming PSD review. Therefore, when it applied for a minor

source permit, Panhandle would have avoided performing an expensive analysis of the impact of

its NOx emissions on ambient air quality. The absence of such evidence in the record now is of

no aid to Panhandle. Panhandle’s failure to comply with its PSD avoidance permit over the

course of at least 10 years defeats the purpose of the PSD program—to protect against the

degradation of air quality in attainment areas. Panhandle’s noncompliance jeopardizes the

Agency’s ability to effectively administer the federally-delegated PSD program and thereby

seriously interferes with the “

protection

of the health . . . of the people.” 415 ILCS 5/33(c)(i)

(2000) (emphasis added). The Board weighs this Section 33(c) factor against Panhandle.

 

 

Social and Economic Value of Pollution Source.

The People do not dispute that

Glenarm Station has social and economic value. Panhandle maintains that engines 1116-1119

play an important role in supplying natural gas to users in Illinois and elsewhere. The Board

weighs this Section 33(c) factor in favor of Panhandle.

 

 

Suitability of Pollution Source.

Glenarm Station has operated for more than 60 years.

The area of Sangamon County in which Glenarm Station is located is rural and lightly populated.

The Board finds that Glenarm Station is suitably located and weighs this Section 33(c) in favor

of Panhandle.

  

 

Technical Practicability and Economic Reasonableness of Compliance.

Panhandle

concedes that it was technically practicable and economically reasonable to install emission

control technology on the engines when they were installed in 1988. However, Panhandle

emphasizes that it is more costly now to add control technology to engines that are fully

assembled and operational. Pan. Br. at 39.

 

The Board finds that, although more complex and expensive now than in 1988, installing

emission control technology now is both technically practicable and economically reasonable.

Panhandle does not argue otherwise. Additionally, it was technically practicable and

economically reasonable for Panhandle to evaluate its compliance with the permit, and determine

that it could not comply with the annual NOx emission limit long before the Agency discovered

the exceedences.

 

Finally, Panhandle has reduced NOx emissions from engines 1116-1119 through its

environmental dispatch program. Under this program, Panhandle operates other engines before

running engines 1116-1119. Panhandle’s NOx emissions from engines 1116-1119 decreased in

1998 to 550.59 TPY. Accordingly, in addition to adding emission control technology to the

engines, Panhandle can reduce NOx emissions from the four engines through operational

changes. The Board finds that this type of operational control is also technically practicable and

economically reasonable. The Board weighs this Section 33(c) factor against Panhandle.

 

---

 

27

 

Subsequent Compliance.

Panhandle has not come into compliance with either the NOx

limit of its minor source permit or the PSD program. The Board weighs this Section 33(c) factor

against Panhandle.

 

Civil Penalty and Section 42(h) of the Act

 

Maximum and Requested Civil Penalties.

The maximum civil penalties the Board can

assess are established in Section 42(a) of the Act, which provides in part:

[A]ny person that violates any provision of this Act or any regulation adopted by

the Board, or any permit or term or condition thereof . . . shall be liable to a civil

penalty of not to exceed $50,000 for the violation and an additional civil penalty

of not to exceed $10,000 for each day during which the violation continues . . . .

415 ILCS 5/42(a) (2000).

Panhandle violated Sections 9.1(d)(1) and 9.1(d)(2) by constructing and operating a

major modification without complying with PSD requirements, including BACT. Panhandle

installed engines 1116-1119, and began operating them, in 1988. Panhandle has yet to comply

with PSD, though it applied for a PSD permit in August 1999, after the People filed this

complaint.

 

Panhandle also violated Section 9(b) of the Act by emitting NOx in excess of its

permitted 461.3 TPY limit. The calculations in the record show that Panhandle violated this

limit each year from 1989 to 1998. Panhandle operated the engines for only part of 1988, and

there is no evidence of an exceedence in that year. Panhandle admits that it has emitted NOx

from the four engines in amounts greater than the permit limit beginning in 1989 (the first full

year that the four engines operated) and continuing through 1998 (the last full year of operation

before the People filed this complaint). Ans. at 14.

 

Panhandles’s most recent permit expired on June 26, 1998. However, Section 39.5(4)(b)

of the Act provides:

 

An owner or operator of a CAAPP [Clean Air Act Permit Program] source shall

continue to operate in accordance with the terms and conditions of its applicable

State operating permit notwithstanding the expiration of the State operating

permit until the source’s CAAPP permit has been issued. 415 ILCS 5/39.5(4)(b)

(2000).

 

Panhandle submitted a CAAPP application to the Agency before the August 1996 inspection of

Glenarm Station. Under Section 39.5(4)(b) of the Act, Panhandle must still comply with its

operating permit, including the 461.3 TPY NOx emission limit. Accordingly, Panhandle

remained subject to, and violated, its operating permit, even though it expired.

 

Pursuant to Section 42(a) of the Act, the Board could impose a $50,000 civil penalty for

each violation and a $10,000 civil penalty for each day the violation continues. Section 42(a)

was amended July 1, 1990, having previously authorized maximum civil penalties of $10,000

---

 

28

per violation and $1,000 per day of continuing violation. Even if the Board applied the lower

maximum penalties under the old law for the violations through the first half of 1990, and the

current maximum penalties thereafter, the total possible civil penalty for these violations easily

exceeds $60 million.

 

The People ask the Board to impose a total civil penalty of $2,218,759 on Panhandle for

the violations. People Br. at 138. Of this proposed amount, the People base $1,590,000 on the

gravity of the violations, and $628,759 on the economic benefit that Panhandle received from

delaying compliance.

Id.

at 52, 82, 84, 104.

   

Panhandle states that it received no economic benefit from delayed compliance.

Panhandle argues that, if the Board imposes any civil penalty, the amount should be much lower

than that suggested by the People. Panhandle asserts that the facts of this case warrant a much

lower penalty amount attributable to the gravity of the violations, such as $10,000-$20,000 per

year. Panhandle maintains that any penalty period should be no more than eight years, 1989

through 1996. According to Panhandle, the Board should not assess a gravity-based penalty for

any noncompliance after 1996 because “Panhandle reduced emissions from the four engines

through its environmental dispatch program and took other measures to achieve compliance”

after learning of the exceedences. Pan. Br. at 89-90. Panhandle therefore suggests that if the

Board imposes any civil penalty, it should be no more than $80,000-$160,000 for all violations.

 

 

Section 42(h).

Section 42(h) of the Act (415 ILCS 5/42(h) (2000)) authorizes the Board

to consider the impact of any matter of record in determining an appropriate civil penalty.

Section 42(h) provides:

 

(h) In determining the appropriate civil penalty to be imposed under

subdivision[] (a) . . . of this Section, the Board is authorized to consider

any matters of record in mitigation or aggravation of penalty, including

but not limited to the following factors:

 

(1) the duration and gravity of the violation;

 

 

(2) the presence or absence of due diligence on the part of the violator

in attempting to comply with requirements of this Act and

regulations thereunder or to secure relief therefrom as provided by

this Act;

 

(3) any economic benefits accrued by the violator because of delay in

compliance with requirements;

 

(4) the amount of monetary penalty which will serve to deter further

violations by the violator and to otherwise aid in enhancing

voluntary compliance with this Act by the violator and other

persons similarly subject to the Act; and

 

---

 

29

(5) the number, proximity in time, and gravity of previously

adjudicated violations of this Act by the violator. 415 ILCS

5/42(h) (2000).

 

The Board considers each of these factors in turn.

 

Duration and Gravity of Violations.

Panhandle has been violating PSD requirements

since 1988, and continues to operate a major modification without a PSD permit. The PSD

program is a very important part of the federal Clean Air Act and Illinois’ effort to preserve its

air quality. Panhandle has also violated the 461.3 TPY NOx permit condition for at least ten

years, emitting an unauthorized 3341.67 tons of the pollutant NOx into the air from 1989 through

1998. The Board finds that these violations have been going on for a very long time and are very

serious. The Board weighs this Section 42(h) factor in aggravation of penalty.

 

 

Diligence in Attempting to Comply.

The Board finds that it was unreasonable for

Panhandle to rely

solely

on Agency inspections and permit renewals to determine its compliance

with the permitted NOx limit. Panhandle concedes that it simply “assumed that emissions from

the four new engines would be less than from the twelve old engines.” Pan. Br. at 2. The Act

requires more. Companies cannot do business in Illinois and simply assume that they are not

violating Illinois’ environmental laws.

 

As discussed, Panhandle could have readily verified its compliance status. The permit

requires Panhandle to keep records of the hours of operation and the fuel use of the four new

compressor engines. Panhandle kept those records. This information, along with the readily

available standard emission factor, was all that Panhandle required to calculate the four engines’

NOx emissions and compare them to the permit limit. For the annual emission reports,

Panhandle’s Houston staff calculated emissions of NOx from each of the engines at Glenarm

Station. Panhandle’s failure to determine its compliance status before the Agency informed it of

the exceedences demonstrates a blatant lack of diligence by Panhandle.

 

It is true that since receiving the 1997 violation notice, Panhandle has changed its

operations to reduce NOx emissions from engines 1116-1119. Through its environmental

dispatch program, Panhandle decreased the four engines’ NOx emissions from an all-time high

of 1173.69 tons in 1996 to 550.59 tons in 1998, though the latter amount is still approximately

90 tons above the permit limit. Panhandle also sought to have the Agency issue a new minor

source permit with a higher NOx emission limit for the four engines, and to add emission

controls to engines 1116 and 1117. In addition, in August 1999, after the People filed this

complaint, Panhandle applied for a PSD permit. This permit application proposes to install

“Clean Burn” technology for engines 1116 and 1117, and to upgrade the emission control

technology on engines 1118 and 1119.

 

These operational and administrative efforts since receiving the Agency’s notice weigh

somewhat in Panhandle’s favor. However, they did take place only in the face of looming

enforcement and have not resulted in compliance. Panhandle’s alarming lack of diligence during

the many years before then requires the Board to weigh this Section 42(h) factor in aggravation

of penalty.

---

 

30

 

 

Economic Benefit Accrued.

To assess any economic benefit that Panhandle accrued

from delayed compliance, both parties measured (1) the initial capital costs that Panhandle

would have incurred to install “Clean Burn” emission control technology on engines 1116 and

1117 and (2) the associated annual operating costs that Panhandle would have incurred. Further,

both parties used the weighted average cost of capital (WACC) to calculate this economic

benefit. The WACC combines the cost of debt and capital and weighs these costs based on a

proportion of a company’s debt and equity to determine that company’s cost of capital,

i.e.

, its

cost of obtaining money. The WACC incorporates the time value of money. Tr. at 166, 178-80,

195, 229-30, 352-55, 357, 919, 926. The WACC has been accepted in federal court to determine

economic benefit from violating environmental requirements.

See

United States v. Smithfield

Foods, Inc., 191 F.3d 516, 529-31 (4th Cir. 1999). To calculate Panhandle’s WACC, both

parties used data on Panhandle’s former parent company, Panhandle Eastern Corporation, which

changed its name to PanEnergy Corp. in the mid-90’s. Panhandle, as a wholly-owned

subsidiary, was financially managed by its parent corporation. Tr. at 180, 295, 358-60; H.O.

Exh. 1-10

 

The People state that “[b]ecause of the high costs often associated with environmental

control expenditures under the PSD program, the incentives for delayed or avoided costs that

might be derived by one competitor over the other are more prevalent or likely to occur.” People

Br. at 83. The People’s financial expert, Dr. John Nosari,

12

calculated a WACC for Panhandle.

Tr. at 358, 362-88, 390-91; People Exh. 7, 25-27; H.O. Exh. 1, 4, 5, 7, 8. Using Dr. Nosari’s

WACC calculations, Mr. Gary Styzens of the Agency

13

assessed Panhandle’s economic benefit.

The People assert that Panhandle’s economic benefit from delayed compliance is $628,759. The

People derived this figure from an initial capital investment of $285,328 for the emission

controls and a total cost of $355,431 to operate and maintain the controls, reduced by $12,000 to

reflect partial years of noncompliance (1988 and 1999) for the calculation. These figures were

adjusted for inflation and exclude tax benefits. Tr. at 195, 198-216, 229-32, 235, 238, 240-41,

245-50, 293-95, 320, 368-69, 394-95, 1309-33; People Exh. 8-10, 18-20; People Br. at 106-13.

 

12

Dr. Nosari received his Ph.D. in Business Administration from St. Louis University, majoring

in accounting and minoring in finance. He is a licensed Certified Public Accountant and holds

the professional designation of a Certified Internal Auditor. He has taught for over 20 years in

courses that include accounting, finance, and auditing. Dr. Nosari is currently an Associate

Professor of Accountancy at the University of Illinois at Springfield. Tr. at 343-51; People Exh.

24.

 

13

Mr. Styzens is a Certified Internal Auditor with the Agency. He has approximately 15 years

of field experience in auditing, and received a Masters in Business Administration in 1983 from

Southern Illinois University. Mr. Styzens joined the Agency in 1991 as an audit supervisor,

which is his current position. For the last five years, Mr. Styzens has performed audits relating

to economic benefit from noncompliance. Tr. at 155-72; People Exh. 6.

 

---

 

31

Panhandle’s financial expert, Mr. Jasbinder Singh,

14

calculated a different WACC for

Panhandle. He assessed Panhandle’s economic benefit from delayed compliance to be $454,904

($150,785 for capital costs plus $304,119 for operating costs).

15

These calculations of Panhandle

and the People differ largely because components of the WACC were calculated differently,

such as the growth rate of the parent corporation’s stock. Panhandle used a growth rate of

2.07%, but the People used a growth rate of 8%. Mr. Singh used average stock prices over

various time periods to calculate the growth rate, while Dr. Nosari used certain daily or spot

stock prices. Both sides assert that the manner in which the other’s expert calculated a growth

rate is subject to manipulation. Tr. at 362-64, 375-80, 448-56, 463, 913, 923, 925-26, 932, 962-

66, 1037, 1429-31, 1433-35, 1437; People Exh. 7, 26; Pan. Exh. 23; H.O. Exh. 1; People Br. at

92-94; Pan. Br. at 63-64, 76-77.

 

Using the calculation of either party, the economic benefit that Panhandle accrued was

approximately half a million dollars. The Board finds that half a million dollars represents a

good approximation of Panhandle’s economic benefit from delayed compliance. That the

respective experts used different underlying assumptions and still ended up with calculations of

economic benefit in the same dollar range only fortifies the Board’s finding.

  

Panhandle maintains, however, that it has received no economic benefit from delayed

compliance. Panhandle offers two arguments for this position, each of which is based on the

opinions of Mr. Singh. First, Panhandle argues that even if it had incurred the expense of

installing the emission controls in 1988, the Federal Energy Regulatory Commission (FERC)

would have allowed Panhandle to set its rates to recover that expense plus a reasonable return.

Panhandle asserts that the FERC’s rate structure would have provided a reasonable rate of return

to Panhandle, regardless of whether Panhandle incurred the capital and operating costs of the

emission controls. Pan. Br. at 54-57. Therefore, according to Panhandle, “no economic benefit

component of a penalty would be necessary to put Panhandle in the same position it would have

been in had it installed Clean Burn on engines 1116-1117 in 1988.”

Id.

at 55.

 

The Board rejects this argument. Regardless of whether a company, FERC-regulated or

otherwise, can pass its compliance costs along to its customers, avoiding those compliance costs

(

i.e.

, having that money for other uses) is an economic benefit. Panhandle has enjoyed that

benefit for years. Moreover, with the FERC’s restructuring of the natural gas pipeline industry

14

Mr. Singh has a Bachelor of Technology degree in Civil Engineering from the Indian Institute

of Technology and a Masters of Science degree in Civil Engineering from Carnegie-Mellon

University. From 1970-1973, he was in the Ph.D program in regulatory economics at Carnegie-

Mellon University. Mr. Singh has provided economic analysis of federal regulations for

approximately 23 years and has provided litigation support related to economic benefit from

noncompliance for the last 10 years. He has also written five published papers on economic

benefit issues. Mr. Singh has a consulting business, Policy Planning & Evaluation, Inc. Tr. at

885-86, 901-03; Pan. Exh. 22.

 

15

Despite this calculation, Mr. Singh’s opinions about the Federal Energy Regulatory

Commission and “retrofitting” costs are the basis for Panhandle’s position that it has had no

economic benefit from delayed compliance.

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32

in the 80’s and 90’s, Panhandle faced increased levels of competition. Tr. at 827-38, 849, 854-

57, 875-76, 1329, 1342-44, 1387-88. For example, to maintain existing customers and attract

new ones, Panhandle charged at rates below what it was allowed to charge. Tr. at 828, 849, 855-

56, 875-76. In doing so, Panhandle was not encumbered by these emission control compliance

costs, as a compliant competitor so situated would have been. For its own economic benefit,

Panhandle had ample incentive to keep its costs down. Tr. at 1329, 1342-44.

 

Second, Panhandle argues that it has received no economic benefit from delayed

compliance because any calculated economic benefit to Panhandle is exceeded by the cost of

“retrofitting” the engines with emission controls now. Panhandle asserts that it is more

expensive to add the emission controls to these operating engines now than it would have been to

install the controls in 1988 during the construction project. Panhandle dismantled and

modernized the engines before installing them in 1988. Panhandle argues that the costs of

adding “Clean Burn” technology today include not only the costs for updated technology but

also the costs to take the engines apart again. Mr. Singh estimated that it would cost $943,948 to

install “Clean Burn” control technology on engines 1116 and 1117 today. Tr. at 727, 947, 956,

962-65; Pan. Exh. 23, Tab. 3; Pan. Br. at 62-63.

 

The Board notes that the Fourth District Appellate Court has affirmed the Board’s

decision to impose a civil penalty based in part on a violator’s economic benefit of delayed

compliance.

See

ESG Watts v. PCB, 282 Ill. App. 3d 43, 52-53, 668 N.E.2d 1015, 1021-22 (4th

Dist. 1996). In ESG Watts, the Board found that the economic benefit of paying landfill fees late

was the interest rate on money the violator could have borrowed to timely pay the fees.

See

ESG

Watts, 282 Ill. App. 3d at 49-50, 668 N.E.2d at 1020. The court upheld the Board’s finding on

economic benefit even though the violator had eventually paid its landfill fees.

See

ESG Watts,

282 Ill. App. 3d at 47, 51, 668 N.E.2d at 1018, 1021. That a violator will still incur costs to

come into compliance does not eliminate the economic benefit of delayed compliance,

i.e.

, funds

that should be spent on compliance were available for other pursuits.

 

Panhandle’s retrofit argument also conflicts with the purpose of Section 42(h)(4)—

deterring violations. Any extra compliance costs from retrofitting are self-imposed and exist

solely because the violator did not pay to comply on time. Applying the retrofit argument could

encourage companies to put off compliance or at least not be as diligent as they should be in

monitoring compliance—any penalty that a company might face if it gets caught in violation

could be diminished because the company did

not

spend money to comply when it should have.

The deterrent effect of civil penalties is compromised if the violator gets “credit” for ignoring its

legal obligations. Panhandle’s argument turns one of the primary purposes served by civil

penalties on its head and the Board rejects it.

   

Penalty Amount That Will Deter Further Violations and Aid in Enhancing Voluntary

Compliance.

The PSD violations have been going on for more than ten years, and the permit

exceedences for at least ten years. The violations have undermined the ability of the PSD

program to prevent degradation of air quality and resulted in thousands of unpermitted tons of

the pollutant NOx being emitted into the air. Until it received notice of the exceedences from the

Agency, Panhandle for years exhibited a troubling lack of diligence in determining its

compliance status. This lack of diligence stands out given the ease with which Panhandle could

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33

have determined its compliance status. This record does not demonstrate that Panhandle

knowingly committed these violations before 1996 when it learned of the excess emissions

problem from the Agency. However, even Panhandle suggests that up to $160,000 would be an

appropriate penalty amount based solely on the gravity of the violations.

 

Under this Section 42(h) factor, to arrive at a penalty amount that will have a deterrent

effect, the size of the violator is an appropriate consideration.

See

Charter Hall Homeowner’s

Assoc. v. Overland Transportation System, Inc., PCB 99-81, slip op. at 14 (May 6, 1999).

Panhandle is a large corporation. It has operations in many states, including five compressor

stations in Illinois. Panhandle spent approximately $15 to $20 million at Glenarm Station for the

1988 construction project alone. Panhandle has also had considerable parent corporations

behind it.

See

United States v. Municipal Authority of Union Twp., 150 F.3d 259, 267-69 (3d

Cir. 1998) (considering parent corporation’s financial information when assessing penalty

against subsidiary). For example, PanEnergy Corp.’s net income was $171.6 million in 1993

and $344.4 million in 1996. H.O. Exh. 9 at 37; H.O. Exh. 10 at 37. After PanEnergy Corp.,

Panhandle was owned by Duke Energy Corporation, a Fortune 500 company. Panhandle’s

current parent corporation, CMS Energy Corporation, is also a Fortune 500 company. Panhandle

has also enjoyed an economic benefit of upwards of a half million dollars from delayed

compliance.

 

Under these circumstances, the Board finds that a civil penalty of $850,000 is required to

deter further violations by Panhandle and enhance voluntary compliance by Panhandle and other

similarly situated entities. This dollar amount will help to ensure that Panhandle and companies

like it actually review the permits they accept, and take the steps necessary to monitor their

compliance, such as having basic communications between those employees familiar with

engine emissions and those familiar with permit limits.

 

 

Previously Adjudicated Violations.

The record contains no evidence that Panhandle has

previously been adjudicated to have violated the Act. The Board weighs this Section 42(h)

factor in mitigation of penalty.

 

Board Findings on Appropriate Remedy

 

The Board orders Panhandle to cease and desist from further violations of Sections

9.1(d)(1), 9.1(d)(2), and 9(b) of the Act. For these violations of PSD and permitting

requirements, Section 42(a) of the Act authorizes the Board to impose a civil penalty in the tens

of millions of dollars. The People seek approximately $2.2 million in civil penalties. Panhandle

argues that no civil penalty is warranted, but if the Board awards any civil penalty, it should not

exceed $160,000.

 

Panhandle argues that any penalty assessed against it should be mitigated because the

Agency should have discovered the violations sooner, and the Agency’s failure to find the

violations sooner allowed Panhandle to continue violating the Act. As discussed above,

however, the violations could have been avoided

entirely

if Panhandle had simply reviewed its

permit in 1988 to see if the annual NOx limit would accommodate Panhandle’s planned

operations. Instead, Panhandle accepted the 1988 permit and then effectively ignored its

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34

emission limit. Panhandle did not even become aware of its excess NOx emissions until eight

years after accepting the minor source permit, and then only because the Agency found the

problem.

 

Panhandle unlawfully emitted 3341.67 tons of NOx into the air over ten years. NOx is a

pollutant. When unlawfully emitted into the air, it can result in health problems. Panhandle’s

violations also interfere with the Agency’s ability to see that the PSD program prevents our air

quality from deteriorating. PSD is a cornerstone of the federal Clean Air Act. The General

Assembly found that PSD “regulate[s] the issuance of preconstruction permits to insure that

economic growth will occur in a manner consistent with the preservation of existing clean air

resources . . . .” 415 ILCS 5/9.1(a) (2000). Companies cannot be allowed to accept minor

source permits for the purpose of avoiding the expenses of PSD compliance, and then have little,

if any, regard for meeting their permitted emission limits.

 

While Glenarm Station has social and economic value and is suitably located, Panhandle

has had technically practicable and economically reasonable means to comply and is still out of

compliance. Panhandle’s delays have also given it considerable economic benefit over the years.

Though Panhandle has made efforts to comply, these came only with enforcement clouds

gathering. Panhandle is a large corporation with multi-state operations. Panhandle could have

readily prevented these lengthy and serious violations by exercising minimal due diligence, but it

failed to do so. Companies doing business in Illinois must at least take the basic steps necessary

to determine whether they are complying with the permits they hold. Neither Panhandle nor any

other company can foist that responsibility on the Agency. Panhandle ultimately has only itself

to blame for these major violations.

 

After considering the factors of Sections 33(c) and 42(h) of the Act, the Board orders

Panhandle to pay a civil penalty of $850,000. Consistent with Section 42(a) of the Act, the

Board orders Panhandle to pay this civil penalty to the Environmental Protection Trust Fund.

See

415 ILCS 5/42(a) (2000).

 

  

Costs and Attorney Fees

 

The People request $128,902.25 in costs and attorney fees pursuant to Section 42(f) of

the Act (415 ILCS 5/42(f)(2000)), which provides in part:

 

Without limiting any other authority which may exist for the awarding of

attorney’s fees and costs, the Board or a court of competent jurisdiction may

award costs and reasonable attorney’s fees, including the reasonable costs of

expert witnesses and consultants, to the State’s Attorney or the Attorney General

in a case where he has prevailed against a person who has committed a willful,

knowing or repeated violation of the Act. 415 ILCS 5/42(f)(2000).

 

It is undisputed that Panhandle, even after learning of its excess emissions problem from

the Agency, has continued to operate the four engines without a PSD permit or BACT and to

emit NOx above the 461.3 TPY limit. Panhandle has therefore knowingly violated the Act since

it became aware in 1996 that it was exceeding its permit limit.

See

People v. Kershaw, PCB 92-

---

 

35

164, slip. op. at 8 (Apr. 8, 1993) (violations were “knowing” when they continued after

respondent was notified of violations). In addition, Panhandle first violated its annual NOx limit

in 1989. By exceeding that annual permit limit each year thereafter, Panhandle repeatedly

violated Section 9(b) of the Act. Accordingly, under Section 42(f), Panhandle repeatedly and,

since 1996, knowingly violated the Act. The Board therefore may award reasonable costs and

attorney fees to the People.

 

Of the People’s requested $128,902.25 in fees and costs, $113,298 represents attorney

fees and $15,604.25 represents costs. The attorney fees consist of 944.15 hours at $120 per

hour. The costs reflect deposition transcript charges for 11 witnesses ($2,329.25) and the fees of

an expert witnesses, Dr. Nosari ($13,275). Dr. Nosari’s fees represent 189 hours of consulting at

$50 per hour and 45 hours of litigation support at $85 per hour. These costs and fees are

supported by affidavits. People Br. at 136-37, Att.1; People Reply Br. at 65, Add.

  

The Board notes that of the 944.15 attorney hours, 109.6 hours were spent on three of the

People’s motions: (1) the People’s December 26, 2000 motion to reverse the hearing officer’s

ruling to exclude from evidence People’s Exhibit 5, a letter from USEPA to the Agency; (2) the

People’s February 28, 2001 motion to strike portions of Panhandle’s response brief; and (3) the

People’s March 12, 2001 motion for the Board to reconsider its February 1, 2001 order affirming

the hearing officer’s ruling to exclude the People’s Exhibit 5. People Br., Att. 1; People Reply

Br., Add. Panhandle opposed and the Board denied each of these motions.

See

Panhandle, PCB

99-199, slip op. at 5 (Oct. 18, 2001).

  

Panhandle “committed . . . knowing [and] repeated violation[s] of the Act.” 415 ILCS

5/42(f) (2000). Panhandle’s efforts to comply have not resulted in compliance and have come

only when confronted with the prospect of enforcement. Given the rates charged and the

complexity of prosecuting this case, the Board finds that the People’s costs and attorney fees are

reasonable.

See

,

e.g.

, People v. Spirco Environmental, Inc., PCB 97-203, slip op. at 2 (finding

rate of $120 per attorney hour to be reasonable). However, the Board will not order Panhandle

to pay attorney fees for the People’s three unsuccessful motions described above. In so doing,

the Board is not finding that the People’s motions were frivolous. Rather, the Board is

exercising its discretion, under Section 42(f) of the Act, by not requiring Panhandle to pay

$13,152 in attorney fees that are attributable solely to motions on which the People did not

prevail. The Board therefore orders Panhandle to pay $115,750.25 of the People’s costs and

attorney fees. Under Section 42(f), Panhandle must pay these costs and fees to the Hazardous

Waste Fund.

See

415 ILCS 5/42(f) (2000).

 

  

CONCLUSION

 

The Board finds that Panhandle violated the requirements of the Act for at least ten years.

These requirements include PSD restrictions on pollutant emissions under the federal Clean Air

Act, which are designed to ensure that our air quality does not deteriorate. When Panhandle

undertook a construction project in 1988, it accepted a NOx emission limit in a minor source

permit to avoid the expenses of PSD. With the minor source permit, Panhandle proceeded to do

business in Illinois while repeatedly emitting far more NOx than its permit allowed. Panhandle’s

NOx emissions from the four new engines were dramatically higher than its emissions from the

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36

12 retired engines in the year before the construction project. In short, Panhandle accepted a

permit that it could not live with, which allowed it to avoid PSD compliance costs.

 

Before 1996 when the Agency discovered Panhandle’s excess emissions, Panhandle

made no effort to determine its compliance status. Doing so would have been easy for

Panhandle. Unfortunately, at Panhandle, the left hand did not know what the right hand was

doing, and

vice versa

. Panhandle staff who knew how much NOx was being emitted did not

know about the permit limit, while staff who knew about the permit limit did not know how

much NOx was being emitted. Responsibility for a company’s compliance with its air permit

must rest with that company.

 

The Board orders Panhandle to cease and desist from further violations and to pay a civil

penalty of $850,000. The Board also awards the People $115,750.25 in costs and attorney fees

because Panhandle repeatedly and, since 1996, knowingly violated the Act.

 

This opinion constitutes the Board’s findings of fact and conclusions of law.

 

ORDER

 

1. The Board finds that Panhandle Eastern Pipe Line Company (Panhandle) violated

Sections 9(b), 9.1(d)(1), and 9.1(d)(2) of the Environmental Protection Act (Act)

(415 ILCS 5/9(b), 9.1(d)(1), 9.1(d)(2) (2000)).

 

2. Panhandle must cease and desist from any further violations of Sections 9(b),

9.1(d)(1), and 9.1(d)(2) of the Act.

   

3. No later than January 15, 2002, which is the 60th day after the date of this order,

Panhandle must pay $850,000 in civil penalties and $115,750.25 in costs and

attorney fees of the People of the State of Illinois. Panhandle must pay the civil

penalty by certified check or money order, payable to the Environmental

Protection Trust Fund. Panhandle must pay the costs and attorney fees by

certified check or money order, payable to the Hazardous Waste Fund. The case

number, case name, and Panhandle’s social security number or federal employer

identification number must be included on each certified check or money order.

 

4. Panhandle must send each certified check or money order to:

 

Illinois Environmental Protection Agency

Fiscal Services Division

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

 

5. Penalties unpaid within the time prescribed will accrue interest under Section

42(g) of the Act (415 ILCS 5/42(g) (2000)) at the rate set forth in Section 1003(a)

of the Illinois Income Tax Act (35 ILCS 5/1003(a) (2000)).

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37

 

 

IT IS SO ORDERED.

 

 

Board Member R.C. Flemal concurred.

 

 

Board Member T.E. Johnson dissented.

 

Section 41(a) of the Environmental Protection Act provides that final Board orders may

be appealed directly to the Illinois Appellate Court within 35 days after the Board serves the

order. 415 ILCS 5/41(a) (2000);

see also

35 Ill. Adm. Code 101.300(d)(2), 101.906, 102.706.

Illinois Supreme Court Rule 335 establishes filing requirements that apply when the Illinois

Appellate Court, by statute, directly reviews administrative orders. 172 Ill. 2d R. 335. The

Board’s procedural rules provide that motions for the Board to reconsider or modify its final

orders may be filed with the Board within 35 days after the order is received. 35 Ill. Adm. Code

101.520;

see also

35 Ill. Adm. Code 101.902, 102.700, 102.702.

 

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board

adopted the above opinion and order on November 15, 2001, by a vote of 6-1.

 

 

 

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board