APPENDIX H

NEW YORK SITING PROCESS

In the State of New York, applications to construct and operate an electric generating

facility with a capacity of 80 MW or more are ruled upon by the New York State Board on

Electric Generation Siting and the Environment (NYS Siting Board) after various filings and

hearings. The NYS Siting Board is comprised of chairmen and commissioners of various state

agencies. The NYS Siting Board also includes two members of the public, appointed by the

Governor of New York for each project, who reside near the proposed site.

The New York siting process requires the applicant to file a preliminary scoping

statement for the proposed project, describing the following: the proposed facility and its

environmental setting; potential environmental impacts from construction and operation;

proposed mitigation of potential environmental impacts; and reasonable alternatives to the

proposed facility. During this pre-application phase, a hearing examiner may mediate

disagreements on the scope and method of any environmental impact studies needed in the

application.

The application itself must contain the following: a description of the facility and the

site including all applicable environmental characteristics; studies of impacts on air, water,

visual resources, land use, noise levels, health, and other matters; proof that the proposed

facility will meet state and federal health, safety, and environmental regulations; applications

for air and water permits; and a complete report of the applicant’s public involvement program

activities and how it encouraged citizens to participate.

The applicant must publish notice that it filed the preliminary scoping statement and the

application, and serve copies of those documents on interested state agencies, members of the

legislature, municipalities, local libraries, and other interested persons and organizations.

During the siting process, the applicant must carry out a meaningful public involvement

program. The applicant is expected to hold public meetings, offer presentations to individual

groups and organizations, and establish a presence in the community (

e.g.

, establishing a local

office, toll-free telephone number, Web site, or a community advisory group).

To facilitate the ability of local government and the public to evaluate the proposed

project, New York requires that the applicant provide funds for intervenors to use in the siting

process. When the applicant submits the application, it must include a fee of $1,000 per MW

of capacity, not to exceed $300,000, to be used as an intervenor fund. The funds are awarded

to municipal and other local parties to help pay for the expenses of expert witnesses and

consultants. At least 50% of the fund is designated for the use of municipalities. The

applicant receives any intervenor funds remaining at the end of the case.

The New York State Department of Environmental Conservation reviews applications

for air and water permits submitted as part of the siting process application. That department

must provide the permits to the NYS Siting Board before that board decides whether to

---

2

approve siting by granting the applicant a Certificate of Environmental Compatability and

Public Need. To grant a Certificate, the NYS Siting Board must determine:

•

 

Either:

Constructing the facility is reasonably consistent with the most recent state energy plan

(the final 1994 plan assesses the state’s current energy supplies, infrastructure, and

policies, and forecasts energy needs and supplies through 2012), or

The electricity generated by the facility will be sold into the competitive market;

•

 

The nature of the probable environmental impacts, including evaluating cumulative air

quality impacts;

•

 

The facility minimizes adverse environmental impacts, given environmental and other

pertinent considerations;

•

 

The facility is compatible with public health and safety;

•

 

The facility will not discharge or emit any pollutants in violation of existing

requirements and standards;

•

 

The facility will control the disposal of solid and hazardous wastes;

•

 

The facility is designed to operate in compliance with state and local legal provisions,

other than those local legal provisions that the NYS Siting Board finds unreasonably

restrictive; and

•

 

The construction and operation of the facility is in the public interest.

Various state agencies involved in the environment, public health, or energy are

normally active parties in the New York siting process. Any municipality or resident within a

five-mile radius of a proposed facility can become a party to the proceeding. Any organization

or resident outside of the five-mile radius may request party status. Party status enables the

person or entity to submit testimony, cross-examine witnesses, and file legal briefs. The NYS

Siting Board’s goal is to decide whether to grant siting within 14 months after it receives the

application.

CALIFORNIA SITING PROCESS

California has empowered the California Energy Commission (CEC) to conduct a

consolidated approval process for siting all power plants that will have electric generating

capacities of 50 MW or larger. The CEC’s siting responsibilities include statewide planning

analysis. The siting process allows the project applicant to submit a single application for all

---

3

necessary state and local approvals and provides analysis of all aspects of a proposed project,

including need, environmental impact, safety, efficiency, and reliability.

The CEC has exclusive authority to approve constructing and operating these plants.

While the CEC’s authority supercedes the authority of other state and local agencies, the CEC

solicits their participation in the siting process to ensure compliance with all applicable

requirements, including local requirements. Under this approach, the applicant seeks a single

regulatory permit from the CEC.

The California siting process, which has public hearings and allows the public to

participate, has two main phases. The first phase is expected to take nine months to one year

to complete. It typically involves a conceptual review of the project, determining the need for

a proposed plant, site suitability and acceptability, and alternatives to the proposed project.

The second phase is expected to take 12 to 18 months to complete. It involves considering the

specific site, technology, and equipment. In the second phase, the design, construction,

operation, and closure of the power plant is reviewed against applicable laws, rules, and

ordinances. The second phase is used to identify negative environmental effects and ways to

mitigate them. The CEC also determines, or reconfirms, the need for the facility.

The California siting process includes a public adviser, nominated by the CEC and

appointed by the Governor of California to a three-year term. The public adviser is

responsible for ensuring that the public and other interested parties have full opportunities to

participate in the siting process. The public adviser does not act as the public’s legal counsel

before the CEC but instead advises the public on how to effectively participate in the

proceedings.

California has experienced delays with its siting process, resulting in changes to the

program. The CEC amended its procedures to allow any proponent of a natural gas-fired

merchant power plant to proceed to the second phase without applying for an exemption from

the first phase. Apparently the California legislature created a “fast track” siting process of six

months for new electric generating facilities presenting no significant adverse environmental

impacts. It also appears that, under that legislation, a simple cycle peaker plant can receive a

three-year operating permit in less than four months if it presents no significant adverse

environmental impacts and is equipped with certain stringent emission control technology. A

permit condition, however, requires the facility, within three years, to either convert to a

combined cycle operation or cease operating.

---

APPENDIX I

ILLINOIS SB 172 SITING CRITERIA

The Act’s pollution control facility siting criteria are as follows:

i.

 

the facility is necessary to accommodate the waste needs of the area it is

intended to serve;

ii.

 

the facility is so designed, located and proposed to be operated that the

public health, safety and welfare will be protected;

iii.

 

the facility is located so as to minimize incompatibility with the character

of the surrounding area and to minimize the effect on the value of the

surrounding property;

iv.

 

(A) for a facility other than a sanitary landfill or waste disposal site, the

facility is located outside the boundary of the 100 year floodplain or the

site is flood-proofed; (B) for a facility that is a sanitary landfill or waste

disposal site, the facility is located outside the 100-year floodplain, or if

the facility is a facility described in subsection (b)(3) of Section 22.19a,

the site is flood-proofed;

v.

 

the plan of operations for the facility is designed to minimize the danger

to the surrounding area from fire, spills, or other operational accidents;

vi.

 

the traffic patterns to or from the facility are so designed as to minimize

the impact on existing traffic flows;

vii.

 

if the facility will be treating, storing or disposing of hazardous waste,

an emergency response plan exists for the facility which includes

notification, containment and evacuation procedures to be used in case of

an accidental release;

viii.

 

if the facility is to be located in a county where the county board has

adopted a solid waste management plan consistent with the planning

requirements of the Local Solid Waste Disposal Act or the Solid Waste

Planning and Recycling Act, the facility is consistent with that plan; and

ix.

 

if the facility will be located within a regulated recharge area, any applicable

requirements specified by the Board for such areas have been met. 415 ILCS

5/39.2(a) (1998).

---

Area

LAWS and

REGULATIONS

Energy

Electric Utility Restructuring

Efforts

(5/00)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

The AZ Commerce Commission issued an order that requires electricity

providers to derive 1.1% of their total product from renewable energy

sources by 2007. Implementation will begin with 0.4% from renewables

by January 1, 2001. 50% of their renewable power must be derived

from solar-generating facilities.

Siting

“

Guidance for Power Plant

Siting and Best Available

Control Technology

,”

July 22, 1999

http://www.arb.ca.gov/

powerpl/powerpl.htm

In July 1999, the CA Air Resources Board approved guidelines for

major power plant permits. The guidelines are intended to ensure that

air districts require power plants to use the cleanest emissions control

technology currently available. Districts will also be expected to require

newer, cleaner control technology as it becomes available. This

document does not establish any new laws or rules but provides

guidance on applying existing state & federal rules and authority to

peaker/merchant power plants.

•

 

SITING:

CEC and local Air Districts have control over siting power

plants >50 MW. Electric generating facilities >50 MW are required

to receive certification from the Energy Facilities Siting and

Environmental Protection Division. Certifications are open to the

public.

In the siting phase, the design, construction, operation, and closure

of the power plant is closely examined in relation to applicable laws,

ordinances, rules, and standards. Adverse environmental effects

are identified and mitigation measures established. The need for

the facility is determined, or reconfirmed, if preceded by a Notice of

Intent. The siting process ensures that the proposed power plants

are safe, reliable, environmentally sound, and comply with all

applicable requirements. The Siting Division also oversees

construction and operation.

Air

•

 

AIR DISTRICTS:

Local Air Districts provide analysis and

recommendations to the CEC on proposed projects to determine

compliance with air pollution control regulations. The Local Air

Districts use a permitting process to control emissions from non-

vehicular sources (stationary sources) that is incorporated into the

CEC’s power plant siting process. The CEC’s power plant siting

regulations specifically provide for the district’s participation in the

process. Each district’s regulations may vary depending on the air

quality conditions in the district and the district’s policies and

strategies for attaining or maintaining compliance with the federal

and state ambient air quality standards. The district’s analysis and

recommendations are provided to the CEC in a document known as

a Determination of Compliance (DOC).

State Laws & Regulations

Peaker Plants

APPENDIX J

---

2

Air

•

 

BACT/LAER:

Major sources are required by permit to use

“California BACT,” which is equivalent to the more stringent federal

LAER in most CA air districts.

•

 

EMISSIONS OFFSETS:

Air pollution control and air quality

management district (district) NSR rules and regulations employ

both BACT and emission offset requirements to reduce the impact

on air quality from new or modified stationary sources. If emission

increases are above certain specified levels, district NSR rules

require applying BACT. If the emission increases after installing

BACT are still above specified levels, then emission offsets may be

required.

•

 

AIR IMPACT ANALYSIS:

CA Health & Safety Code requires Air

Districts to evaluate air quality impacts in addition to the federal

CAA requirements on PSD. This ensures new permits will not be

issued for emission units (sources) that will prevent or interfere with

the attaining or maintaining any applicable air quality standard.

•

 

HEALTH RISK ASSESSMENT:

Power plant applicants are asked

to submit a Health Risk Assessment under the CA Environmental

Quality Act and the Health & Safety Code. A health risk

assessment addresses three categories of health impacts from all

pathways of exposure, if appropriate: acute health effects from

inhalation only, chronic non-cancer health effects, and cancer risks

from multiple exposure paths.

•

 

ADDITIONAL PERMITTING CONSIDERATIONS:

Permits address

start-up/shut-down emissions, continuous air monitoring, sulfur

content of fuel, and ammonia slip from air pollution controls.

Water Recycling Act of 1991

http://leginfo.ca.gov

•

Established grants and loans for water reclamation projects and

encouraged water reuse among suppliers.

•

Applies only to public entities that produce or supply water and to

entities responsible for groundwater replenishment.

Energy

Portfolio

An Act Concerning Electric

Restructuring

 

(RB 5005)

(4/98)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/tab5rev.html#CT

•

The bill requires renewable energy funding, a 5.5% renewable

portfolio standard, and environmental protections.

State Policy Regarding

Noise

(CT General Statutes Ch. 442,

Sec. 22a-67 to 22a-76)

http://www.cslib.org//

//statutes/title22a/t2

2a-p5.htm

•

Noise regulations address impulse noises and a model ordinance.

---

3

FLORIDA

Electrical Power Plant Siting

Act, 1973

(FL Statute Section

403.501-.518)

http://www.dep.state.f

l.us/siting/Programs/p

rogER-pps.htm

•

FL has an

Siting Coordination Office

responsible for siting of:

!

Electrical Power Plants

!

Electrical Transmission Lines

!

Natural Gas Transmission Pipelines

!

High Speed Rails

!

Hazardous Waste Facilities

•

Electrical Power Plant Siting Act applies only to steam or solar

electric generation > 75 MW. This would include combined cycle

plants but not simple cycle combustion turbines.

•

Final approval body for the permits is not the Siting Board, but the

Department of Environmental Protection.

•

Fees are charged to the applicant.

•

BACT for NOx is 9 ppm based on dry low NOx combustion

technology.

Ten Year Site Plan

Requirements (TYSP)

(Part of the electrical power

plant siting process)

•

FL Public Service Commission (PSC) oversees the submission of

plans by the utilities that describe current generation capacity and

anticipated need for more capacity. The TYSPs also provide

information on future sites for power plants to accommodate the

anticipated need. This information includes land use data,

environmental factors, and similar topics. Other state and local

agencies can comment on the plans to the FL PSC. Based on this

information and its own conclusions, the FL PSC will determine the

suitability of the plan.

Need Determination

(Part of the electrical power

plant siting process, s.

403.519, F.S.)

•

Need Determination is a formal process and is conducted by the FL

PSC. The FL PSC reviews the need for the generation capacity that

would be produced by the proposed facility in relation to the needs

of the region, and to the state as a whole. The FL PSC also looks at

whether the facility would be the most cost-effective means of

obtaining the capacity.

EIS

(Statute section 62-1.211(1),

F.A.C.)

http://www.dep.state.f

l.us/siting/Law_Rule/a

pform-pps-a.htm

•

Site certification application forms for power plants resemble an

EIS. Site Certifications are issued by the Governor and Cabinet.

Before issuing a Site Certification, the Department of Environmental

Regulation (DER), Department of Community Affairs (DCA), FL

PSC, Water Management Districts (WMD), and other affected

agencies are required to assess the potential effects upon the

environment, ecology, and society by the proposed plant to ensure

that the construction and operation of the plant will be consistent

with applicable environmental standards.

Water Withdrawal Permits

http://www.ganet.org/dnr/

environ/aboutepd_files/br

anches_files/wrb.htm

•

GA has a Water Withdrawal Permit Program.

•

Develops short-term and long-term water management policies and

strategies to address environmental problems induced by

unsustainable use of GA's water resources.

Air

Air Permit Modeling

http://167.193.59.200/met

data/

•

GA maintains a Web site with geographical meteorological data for

air permit modeling based on 5 years of data.

Noise

Noise Pollution

(HI Revised

Statutes Chapter 342F)

http://www.capitol.haw

aii.gov/hrscurrent/Vol

06/hrs342f/HRS_342F.ht

m

•

HI’s noise regulations incorporate both a permit program and

enforcement provisions.

---

4

Air

Air Pollution

(35 Ill. Adm. Code, Subtitle B)

http://www.ipcb.state.

il.us/title35/35conten

.htm

•

State rules follow federal requirements.

Renewable Energy Initiatives

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

09/00 - Chicago Mayor Richard M. Daley announced that the City of

Chicago and 47 other local government bodies plan to buy electric

power as a group, requiring that 20% of the purchase (80 MW)

come from renewable energy. The City has issued a request for

proposals to the 13 licensed power providers in IL. This is the first

opportunity that government agencies have had to purchase power

competitively since IL passed its restructuring law.

•

10/99: ComEd plans to allocate $250 million to a special fund to

support environmental initiatives and energy-efficiency programs

throughout the State.

Noise

Noise

(35 Ill. Adm. Code 900

– 952)

http://www.ipcb.state.

il.us/title35/35conten

.htm

•

According to Greg Zak of IEPA, IL is more active than other states

in regulating noise. However, some states may have cities that

regulate noise through local ordinances.

INDIANA

Air

•

Requires BACT for all new projects emitting >25 TPY VOM.

Siting

•

Requires public utilities to obtain a

certificate of necessity

before

constructing electric generating facilities. (The IN Utility Regulatory

Commission considers IPPs to be public utilities.)

Water Rights & Resources

(IN Code, 14-25)

http://www.ai.org/dnr/

index.html

http://www.ai.org/legi

slative/ic/code/title1

4/ar25/ch4.html

•

Registration and annual reporting requirement for owners of

significant water withdrawal facilities (> 1,000,000 gallons/day of

surface water, groundwater, or combination).

•

IN Natural Resources Commission (NRC) has statutory authority to

require, by rule, a permit for most water withdrawals from navigable

waters, but authority has not yet been exercised.

•

IN NRC is required to develop and maintain inventories, gather and

assess all information needed to properly define water resource

availability.

•

IN NRC can establish, by rule, minimum stream flows.

•

Where groundwater is threatened, IN Department of Natural

Resources (DNR) may designate a “restricted use area.” Permit is

then required for withdrawal of >100,000 gal/day beyond use at time

of restricted use designation. In granting or refusing a permit, the

IN DNR considers the concept of beneficial use.

Energy

Electric Utility Restructuring

Legislation

(3/00)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/tab5rev.html#CT

•

The IA Department of Natural Resources has proposed including a

Renewable Portfolio Standard in restructuring legislation. The

proposal would require renewable energy sources, such as wind, to

be 4% in 2005 and increase to 10% by 2015.

•

Each peaker plant application is reviewed for acid rain potential

and, in some cases, new sources must purchase credits from

USEPA.

---

5

Water Allocation and Use;

Flood Plain Control

(Code of IA, 455B.261-290)

(1999)

http://www.state.ia.us

/dnr/organiza/epd/wtrs

uply/alloca.htm

http://www.legis.state

.ia.us/cgi-

bin/IACODE/Code1999SUP

PLEMENT.pl

•

Permit is required for any person who diverts, stores or withdraws

>25,000 gal of water/day (surface or groundwater). Permits are

generally issued for 10 years but, depending on geological

conditions, can be for lesser period of time.

•

Permit program ensures consistency in decisions on allocations.

Allocations are based upon concept of “beneficial use,” the key

points of which are:

1. water resources are to be put to beneficial use to the fullest

extent;

2. water and unreasonable uses are prevented;

3. water conservation is expected;

4. established average minimum instream flows are protected.

•

Administrative process resolves water use conflicts.

•

Provisions are in place for involving the public in issuing water

allocation permits and in generally establishing water use policies.

KENTUCKY

Air

•

State rules follow federal air requirements.

Noise

KY State Noise Control Act

(KY Revised Statutes: KRS

220.30-100 to 220.30-190)

http://162.114.4.13/KR

S/224-30/CHAPTER.HTM

•

Regulations address a model ordinance.

Energy

Electric Utility Restructuring

Legislation

(5/97)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

ME's restructuring legislation contains the nation's most aggressive

renewables portfolio, requiring 30% of generation to be from

renewable energy sources (including hydroelectric).

Energy

Electric Utility Restructuring

Legislation

Http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

MA’s restructuring legislation includes a renewable portfolio

requirement and established a renewable energy fund, funded via a

system benefits charge. Funds will also be used to create initiatives

to increase the supply of and demand for renewable energy.

Air

Prohibitions – New Sources

of VOC Emissions

(R336.1702)

Http://www.deq.state.m

i.us/pub/aqd/rules/par

t7.pdf

•

Requires BACT for all new sources of VOCs.

---

6

Siting

Power Plant Siting Act

(MN Adm. Code 116C.51-69.)

http://www.revisor.leg

.state.mn.us/stats/116

C/

•

Power Plant Siting Act applies to facilities greater than 50 MW.

•

The siting authority is the MN Environmental Quality Board (EQB).

Its purpose is to locate facilities compatible with environmental

preservation and efficient use of resources. The MN EQB is to

choose locations that minimize adverse human and environmental

impact while insuring continuing electric power system reliability and

that electric energy needs are met.

•

The MN EQB develops an inventory of study areas to guide the site

selection process. The inventory is developed in a public planning

process where all interested persons can participate in developing

the criteria and standards to be used by the MN EQB.

•

A utility (public or private) must apply to the MN EQB for designation

of a specific site for a specific size and type of facility. The

application must contain at least two proposed sites. The MN EQB

has 12-18 months to issue a decision. When the EQB designates a

site, it issues a

certificate of site compatibility

to the utility with any

appropriate conditions. No large electric power generating plant

can be constructed except on a site designated by the MN EQB.

•

In designating a site, the MN EQB considers:

!

effects on land, water and air resources;

!

effects of water and air discharges and electric fields resulting

from these facilities on public health and welfare, vegetation,

animals, materials and aesthetic values, including base line

studies, predictive modeling, and monitoring of the water and air

mass at proposed and operating sites and routes;

!

new or improved methods for minimizing adverse impacts of

water and air discharges and other matters pertaining to the

effects of power plants on the water and air environment;

!

sites proposed for future development and expansion and their

relationship to the land, water, air and human resources of the

state;

!

effects of new electric power generation and transmission

technologies and systems related to power plants designed to

minimize adverse environmental effects;

!

potential for beneficial uses of waste energy from proposed

large electric power generating plants;

!

direct and indirect economic impact of proposed sites and

routes including, but not limited to, productive agricultural land

lost or impaired;

!

adverse direct and indirect environmental effects that cannot be

avoided;

!

alternatives to the applicant's proposed site

!

irreversible and irretrievable commitments of resources should

the proposed site or route be approved; and

!

where appropriate, consideration of problems raised by other

state and federal agencies and local entities.

•

The MN EQB must hold a public hearing in the county where the

proposed facility is to be located.

---

7

Water

Water Supply Management

(MN Statutes:

 

Ch. 103G)

http://www.revisor.leg

.state.mn.us/stats/103

G

http://www.dnr.state.m

n.us/waters/programs/w

ater_mgt_section/appro

priations/permits.html

http://www.dnr.state.m

n.us/waters/programs/w

ater_mgt_section/appro

priations/progdesc.htm

l

•

Permit is required for all users withdrawing (surface and

groundwater) more than 10,000 gallons per day or 1 million gallons

per year. (Exceptions include: domestic uses serving less than 25

person, certain agricultural drainage systems, test pumping of a

groundwater source, and reuse of water already authorized by

permit,

e.g.

, water purchased from a municipal water system.)

•

Permits are granted for no longer than 5 years.

•

Policy is to manage water resources to ensure an adequate supply

to meet long-range seasonal requirements for domestic,

agricultural, fish and wildlife, recreational, power navigation, and

quality control purposes.

•

Water Appropriation Permit Program exists to balance competing

management objectives that include both developing and protecting

MN’s water resources.

•

Permitted users are required to submit annual reports of water use.

Reported information is used to evaluate impacts and to aid in

resolving conflicts.

Noise

Noise Pollution Control

(MN

 

Rules Chapter 7030)

http://www.revisor.leg

.state.mn.us/arule/703

0/

http://www.pca.state.m

n.us/programs/pubs/noi

se.pdf

•

The MN Pollution Control Agency is empowered to enforce the state

noise rules.

MISSOURI

Air

•

State air rules follow federal requirements.

•

Major source threshold is 100 TPY.

Geology, Water Resources

and Geodetic Survey

(

MO Revised Statutes,

Chapter 256)

http://www.dnr.state.m

o.us/dgls/wrp/wateruse

statutes.htm

http://www.moga.state.

mo.us/statutes/c200-

299/2560400.htm

•

Major water users must register with MO Department of Natural

Resources (DNR). A major water user is defined as an entity that is

capable of withdrawing or diverting 100,000 gal or more per day

from any water source.

•

Failure to register may result in MO DNR request that Attorney

General file action to stop all withdrawal or diversion. Purpose of

registration program is to ensure the development of information

required for the analysis of certain future water resource

management needs.

Energy

Electric Utility Restructuring,

AB 366

(6/99)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/tab5rev.html#CT

•

AB 366 provides that the NV Public Utilities Commission establish

portfolio standards for renewable energy. The standard will phase-in

a requirement (beginning with 0.2% by January 2001 and adding

0.2% of a percent biannually) that 1% of energy consumed be from

renewable energy resources.

Water Supply Management

Act

(NJAC 7:19-1)

•

Water resources management is required for >100,000 gallons per

day.

---

8

Noise

Noise Control Rules

(NJAC 7:29)

http://www.state.nj.us

/dep/enforcement/pcp/o

lem-noise.htm

•

The NJ Department of Environmental Protection (NJDEP) has

developed a Model Noise Ordinance that can be adopted by local

municipalities.

•

NJDEP does not have a noise control program and does not

investigate noise complaints. Noise control is handled locally.

Energy

Electric Utility Restructuring

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

The restructuring legislation in NJ requires spending $230 million

for home weatherization, renewable energy and other programs,

and increases spending on new energy conservation programs.

Also, electric generation companies must disclose a set of

environmental characteristics, including power plant fuels and

emissions.

Siting

Siting and Approval

(Article X of Public Service

Law)

http://www.dps.state.n

y.us/articlex.htm

•

The NYS Siting Board is in charge of siting and approval of all new

power plants.

•

Article X of the Public Service Law sets forth a unified and

expedited review process for applications for power plants > 80

MW.

•

Proceedings are open to the public

•

NYS Siting Board may preempt local zoning.

•

Siting may take up to 18 months.

•

NYS Siting Board must determine:

1.

either:

(a) constructing the facility is reasonably consistent with the most

recent

State Energy Plan

, or

(b) the electricity generated by the facility will be sold into the

competitive market;

2.

the nature of the probable environmental impacts (including

evaluating cumulative air quality impacts);

3.

the facility minimizes adverse environmental impacts, given

environmental and other pertinent considerations;

4.

the facility is compatible with public health and safety;

5.

the facility will not discharge or emit any pollutants in violation of

existing requirements and standards;

6.

the facility will control the disposal of solid and hazardous

wastes;

7.

the facility is designed to operate in compliance with state and

local legal provisions, other than those local legal provisions that

the Siting Board finds unreasonably restrictive; and

8.

the construction and operation of the facility is in the public

interest.

Intervenor Fund for Siting

Review

(Article X, Section 164)

"

Power plant applicants are required to pay $1,000 per MW of

capacity up to $300,000 to establish an Intervenor Fund.

"

Funds are used to defray expenses associated with the siting

review.

Proposed Amendment to

Article X

(NY State Bill A09039)

"

The bill would authorize the Commissioner of Environmental

Conservation to issue environmental permits necessary to the siting

of an electric generation facility if the NYS Siting Board is unable to

do so and would make some technical changes to the siting law.

"

The bill would also require the Energy Planning Board to do a

reliability study of the state’s transmission and distribution systems.

---

9

New York State Energy Plan

1994

(NY State Energy Office)

•

The Final 1994 State Energy Plan calls for significant reductions in

state energy taxes and endorses greater competition in utility

purchases of electricity to lower electric rates in the state. The plan

reaffirms the state's long-term energy, economic and environmental

goals and its commitment to energy efficiency, but places increased

emphasis on the use of energy policy as a means to promote

sustained economic development. The plan assesses NY's current

energy supplies, infrastructure and policies, and forecasts energy

needs and supplies through the year 2012. Based on those

findings, the plan sets policy goals and objectives and recommends

180 specific actions. The plan was prepared by the staffs of the

State Energy Office and the State Departments of Environmental

Conservation and Public Service in response to 1992 legislation that

formalized NY Governor Mario Cuomo's model for integrated

energy planning. The State Energy Planning Board, which approved

the plan on October 31,1994, is made up of the commissioners of

those three agencies. State energy law requires that any state

action related to energy be reasonably consistent with the plan's

findings and recommendations.

Water

Water Supply Permits

(Chapter 6, NY Codes, Rules

and Regulations. Part 601: 6

NYCRR 601)

•

Required for suppliers of potable water with 5 or more service

connections.

•

Applicants must demonstrate:

1. Plans are justified by public necessity.

2. Plans properly consider other sources of supply that are or may

become available.

3. Plans provide for proper and safe construction of all work

connected therewith.

4. Plans provide for proper sanitary control of the watershed and

proper protection of the supply.

5. Plans provide for an adequate water supply.

6. Plans are just and equitable to the other municipal corporations

and civil divisions of the state affected thereby and to the

inhabitants thereof, particular consideration being given to the

present and future necessities for sources of water supply.

7. Plans make fair and equitable provisions to determine and pay

any and all damages to persons and property, both direct and

indirect, that result from acquiring the lands or executing the

plans.

8. Plans, in accordance with local water resources needs and

conditions, include a description of an adequate near term and

long range water conservation program.

•

Entities holding Water Supply Permits must report average and

peak use to the NY Department of Environmental Conservation

annually. If customer demand grows (

i.e.

, new peaker plant begins

withdrawing from the water supply), supplier must re-demonstrate

the above to the state if the demand exceeds amount authorized in

the Water Supply Permit.

Water Well Program

(Environmental Conservation

Law 15-1525)

•

Pre-notification must be filed with the state before drilling specifying

desired yield.

•

No restrictions are specified on the amount of water withdrawal.

However, under NY Civil Law, property owners have water rights. If

a well causes drawdowns that impact an off-site property owner’s

water use, then they can sue.

---

10

Water Withdrawal

Registration

 

(6 NYCRR, Chapter X,

Subchapter A, Article 1)

•

Applies to withdrawals from Great Lakes:

•

Great Lakes (6 NYCRR 675):

"

withdrawals >100,000 gallons per day averaged over 30-

day period

-

OR -

"

lake water loss > 2,000,000 gallons per day averaged over

30-day period

•

No restrictions are specified on the amount of water withdrawal, just

that withdrawals must be registered. Registration fee is $100/year.

Long Island Water

Withdrawal Restrictions

•

Water withdrawals from wells are restricted by quantity on Long

Island because over pumpage of groundwater on Long Island can

cause infiltration of saltwater into the aquifer.

Electric Utility Restructuring

•

Funds to support energy conservation and renewable energy are

made available to energy suppliers from the NY State Energy

Research and Development Authority. Funds were created through

the NY Public Service Commission order establishing a system

benefits charge on electricity sales.

Siting

OH Adm. Code 4906:

Ohio

Power Siting Board

http://onlinedocs.ande

rsonpublishing.com/oac

/

•

The OH Power Siting Board (PSB) within the Public Utilities

Commission is the approval authority for all major utilities > 50 MW.

•

Meetings of the OH PSB where action is taken or deliberations

conducted are open to the public.

•

Applicants for new facilities must consider at least 1 alternate site.

•

Applications are required to address:

!

Justification of Need:

"

Description of generation and associated facility alternatives

"

Type, number of units, and estimated net demonstrated

capability, heat rate, annual capacity factor, and hours of

annual generation

"

Land area requirement

"

Fuel quantity and quality

"

Types of pollutant emissions

"

Water requirement, source of water, treatment, quantity of

any discharge and names of receiving streams

!

Siting issues:

"

location

"

major features

"

the topographic, geologic, and hydrologic suitability for each

alternate site

!

Water:

"

natural and man-affected water budgets

"

existing maps of aquifers that may be directly affected

!

Emissions control & safety equipment

!

Local ambient air quality of proposed sites

!

Locations of major and anticipated sources of air pollution

!

Plans for future additions and the maximum generating capacity

anticipated for the site.

!

Financial data

!

Environmental data

---

11

!

Social and ecological data:

"

Noise

"

Health & Safety

"

Impact of water use

"

Economics, land use, and community development

"

Cultural impact

"

Agricultural district impact

•

After the OH PSB certifies applications for new facilities, public

hearings are held in the local vicinity of the proposed facility.

•

The OH PSB collects application fees.

Air

NOx – Reasonably Available

Control Technology (RACT)

(OAC 3745-14)

http://onlinedocs.ande

rsonpublishing.com/oac

/

•

According to IEPA, certain minor sources must use BAT (Best

Available Technology), OAC 3745-14-3.

•

Major sources are required to use BACT per federal regulations: 15

ppm NOx for natural gas turbines, 42 ppm NOx for oil burning.

•

For NOx sources >100 TPY, Reasonably Available Control

Technology (RACT) is required in certain counties. RACT for

combustion turbines is 75 ppm for those firing gaseous fuels and

110 ppm for those firing distillate oil or diesel fuel.

Application for Permit for

major increase in withdrawal

of waters of the State

(OH Revised Code 1501.30 &

Registration of facilities

capable of withdrawing

>100,00 gal/day;

Groundwater Stress Areas

Determination of reasonable

use of water

(OH Revised Code 1521.17)

http://onlinedocs.ande

rsonpublishing.com/rev

isedcode/

http://www.dnr.state.o

h.us/odnr/water/wateri

nv/waterinv.html

•

Permits are required for those making a new or increased

consumptive use of water than an average of 2 millions gallons per

day over a 30-day period.

•

Registration is required for any facility or combination of facilities

with the capacity to withdraw more than 100,000 gallons of water

(surface or ground) daily. Annual reporting is required of those who

must register. The purpose of registration and reporting is to gather

data to assist in resolving future water use conflicts.

•

Chief of OH Department of Natural Resources Division of Water

has authority to designate “groundwater stress areas” and to require

water withdrawal registration in these areas for users of water less

than the normal 100,000 gallon threshold.

•

Chief also has responsibility to maintain water Resources Inventory

that must include information to assist in determining the

reasonableness of water use.

•

While “reasonable use” is used by courts to determine water

conflicts, legislature has set forth nine specific factors (applicable to

both surface and groundwater) to define reasonableness.

•

“Consumptive use” is defined as a use of water resources other

than a diversion that results in a loss of that water to the basin from

which it is withdrawn and includes, but is not limited to, evaporation,

evapotranspiration, and incorporation of water into a product or

agricultural crop.

Energy

Electric Utility Restructuring

Http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

Restructuring legislation includes a provision for a $110 million

revolving load fund for residential and small commercial energy

efficiency and renewable energy projects. Also, electricity

marketers must disclose environmental information to consumers.

Noise Control Classification

of Violations

(OR Adm. Rules 340-012-

0052)

http://arcweb.sos.stat

e.or.us/rules/OARS_300

/OAR_340/340_012.html

•

Regulations address a model ordinance.

---

12

Air

Stationary Sources of NOx &

VOCs

(PA Code Ch. 129.91)

http://pacode.com/secu

re/data/025/chapter129

/chap129toc.html

•

PA charges emissions fees: $42/ton (1999).

•

PA requires RACT for all major sources of VOC, NOx.

Energy Portfolio

Electric Utility Restructuring

(9/00)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

A $21 million Green Energy Fund was created by the PA Public

Utilities Commission (PUC) to be used for investment in green

energy projects, such as wind, solar, and biomass. The fund, which

currently has $5 million, is expected to grow to more than $20

million over the next six years. The fund was created as part of a

negotiated settlement between the PA PUC and PPL in the utility's

restructuring case two years ago. Businesses and nonprofit

organizations that wish to invest in green energy within PPL's

territory may apply for the funds.

Water

Use of Reclaimed Water

,

(TX Adm. Code Title 30 Part 1

Chapter 210)

(1997)

http://www.tnrcc.state

.tx.us/oprd/rules/inde

x.html

•

Establishes general requirements, quality criteria, design, and

operational requirements for the beneficial use of reclaimed water

that may be substituted for potable water or raw water.

•

Due to limited supply and high demand, reclaimed water can be

much less expensive than using municipal drinking water or treating

groundwater. The rule is intended to conserve surface and

groundwater and to help ensure an adequate supply of water

resources for present and future needs.

•

Use of reclaimed water is voluntary.

•

Locating reuse facilities near the municipal wastewater treatment

plant helps to minimize infrastructure costs in constructing a

distribution line.

•

Reclaimed water is provided to the user on a demand-only basis.

•

Approved uses include cooling tower make up water under §210.32

(2)(F).

Water Use Permits

(TX Water Code, §11.121)

http://www.capitol.sta

te.tx.us/statutes/wa/w

a001100toc.html

•

TX industries must obtain water rights to use surface water or

protected groundwater. The authorization may be with or without a

term, on an annual or seasonal basis, or on a temporary or

emergency basis.

Siting

Siting

•

Does not have a siting commission for power plant projects.

•

TX requires

certificates of convenience and necessity

for power

plant projects that utilities initiate, but not for projects that IPPs

initiate.

Energy

Portfolio

Electric Utility Restructuring

(9/00)

http://www.eia.doe.gov

/cneaf/electricity/chg

_str/pbp.html

•

TX’s renewables portfolio standard requires that the State's utilities

install or contract to buy power from 2,000 MW of renewable

generating capacity by January 1, 2009.

---

13

Siting

State Energy Policy

(WI Statute: 1.12)

http://folio.legis.sta

te.wi.us/cgi-

bin/om_isapi.dll?clien

tID=111571&infobase=st

ats.nfo&jump=ch.%20196

Power Plant Siting

(WI Adm. Code Ch. PSC 111,

112)

Environmental Analysis

(WI Adm. Code Ch. PSC 4)

http://folio.legis.sta

te.wi.us/cgi-

bin/om_isapi.dll?clien

tID=95483&infobase=cod

ex.nfo&jump=top

•

WI’s State Energy Policy includes policy on:

!

Considering the maximum conservation of energy resources as

an important factor when making any major decision that would

significantly affect energy use

!

reducing the ratio of energy consumption to economic activity in

the state

!

renewable energy resources

!

protecting natural areas, including wetlands, wildlife habitats,

lakes, woodlands, open spaces and groundwater resources.

•

Ch. PSC 111, 112 require the WI Public Service Commission (PSC)

to develop a Strategic Energy Assessment (SEA) for power plants.

The SEA involves an assessment of electric demand and supply,

and information from electricity suppliers on economic, pollutant,

and energy conservation data.

•

Ch. PSC 111,112 require

Certificates of Public Convenience and

Necessity

for electric generating facilities. According to the ICC,

this requirement applies to facilities > 100 MW. Applications for

certificates include:

!

at least 2 sites: preferred & alternate

!

number of units, type, size, fuel

!

hours of operation

!

generating capacity

!

pollutant emissions

!

need for facility in terms of demand

!

alternative sources of electric supply including energy

conservation & efficiency

!

Natural resources affected

!

Ecological resources affected

!

Community information

•

According to IEPA, siting is required for facilities >12,000 kW.

•

Ch. PSC 4 establishes procedures to provide the WI PSC with

adequate information on the short- and long-term environmental

effects of its actions as required by the WI Environmental Protection

Act, ch. 274, section 1, laws of 1971 and s. 1.11 of the WI Statutes.

PSC 4 requires the WI PSC to prepare an Environmental

Assessment (EA) to assist the WI PSC in determining

environmental impact of proposed facilities. Combustion turbines

are included as types of projects requiring an EA. The WI PSC can

approve or deny siting based on the EA or EIS. The EA is made

available to the public, and hearings are held.

---

14

Water

Water Resources

(WI Statutes, Chapter 28,

Water Quality and Quantity;

General Regulations

(WI Statutes, Chapter 28,

Subchapter III)

http://www.legis.state

.wi.us/rsb/Statutes.ht

ml

WI DNR Rules, Chapter NR

142

•

WI law provides for:

1. Developing statewide water quantity resources plan

2. Registration and annual reporting (with fees) of major

withdrawals (>100,000 gal/day in 30-day period)

3. Permit approval process (with administrative hearing process)

for constructing, developing, and operating wells where capacity

and rate of withdrawal of groundwater from all wells on one

property is in excess of 100,000 gal/day. Approval is withheld or

restricted if withdrawal will adversely effect or reduce availability

of public water supply or does not meet grounds for approval,

which are:

!

no adverse effect on public water rights in navigable waters

!

no conflict with any applicable plan for future uses of waters

of state or water quantity resources plan

!

reasonable conservation practices have been incorporated

!

no significant adverse impact on environment and

ecosystem of the Great Lakes basin or the upper

Mississippi River basin

!

plan for withdrawal consistent with protecting public health,

safety, and welfare, and not detrimental to public interest

!

no significant detrimental effect on the quantity and quality

of the waters of the state (even more factors apply if the

proposed withdrawal will result in an “interbasin diversion”)

4. Permit approval process for diverting water from any lake or

stream >2,000,000 gal/day in any 30-day period. If WI

Department of Natural Resources (DNR) receives application

for a withdrawal from the Great lakes basin that will result in a

new water loss averaging 5,000,000 gal/day in any 30-day

period, WI DNR notifies governors of other Great Lakes States,

requesting their input.

•

Regulations define “water loss” and “consumptive use.”

•

Rules incorporate methods for citizens to initiate WI DNR

investigations of alleged violations.

Note:

This list is not meant to be all-inclusive.

---

APPENDIX K

ADDITIONAL SUMMARIES OF PUBLIC COMMENTS—INDEX

Emissions Control Technology

Modeling

Ozone Nonattainment

Pollution

Quality

Alternatives/Efficiency

Capacity

Demand

Deregulation

Market

Policy

Power Distribution

Effects

Safety

AirApplicability

Enforcement

Permitting

NOx SIP Call

NOx Waiver

Other States

Zoning

Local Guidance & Public Involvement

Number of Plants

Use

Taxes

# PUBLIC COMMENT

Air

Energy

HealthMoratorium

Noise

Regulations

Siting

Water

Other

1

Cindy Conte,

Reliant

# # #

2

Debbie Halvorson,

State Senator, 40

th

District

#

3

Ron Molinaro,

Winthrop Harbor, IL

#

# # # #

4

Peter J. Cioni, Dir. of Community

Development, Zion

#

5

Bob Mosteller, Deputy Dir., Lake

Cty. Zoning Board of Appeals

#

11

Susan Zingle, Exec. Dir., LCCA

##

12

Gary Hougen,

Winthrop Harbor, IL

#

#

13

Robert Brooks,

Waukegan, IL

#

14-30, 32-90, 92-106, 113-160, 174-

185, 188, 193

Big Rock Form Letter

#

# # # #

31

Curt W. Peters,

Winthrop Harbor, IL

#

#

91

Jane Erdman,

New Holland, IL

#

#

107

Udo A. Heinze, Mgr., Strategic

Projects, Ameren

# # # # # # # #

108

Jeannine Kannegiesser, Center for

Neighborhood Technology

# # # # #

---

Emissions Control Technology

Modeling

Ozone Nonattainment

Pollution

Quality

Alternatives/Efficiency

Capacity

Demand

Deregulation

Market

Policy

Power Distribution

Effects

Safety

AirApplicability

Enforcement

Permitting

NOx SIP Call

NOx Waiver

Other States

Zoning

Local Guidance & Public Involvement

Number of Plants

Use

Taxes

# PUBLIC COMMENT

Air

Energy

HealthMoratorium

Noise

Regulations

Siting

Water

Other

109

Patricio Silva, Midwest Activities

Coordinator, NRDC

# # # # # # # # # # # #

110

Ronald D. Earl, General Manager &

CEO, IMEA

# # # #

111

Earl W. Struck, AIEC

#

# # #

112

Verena Owen,

Winthrop Harbor, IL

#

# #

161

Mary Thurow,

Big Rock, IL

#

#

162

Margaret A. Bock,

Libertyville, IL

#

# # # # #

163

Cynthia A. Faur, Sonnenschein,

Nath & Rosenthal on behalf of

Midwest Generation

# # # # # # # # #

164

Christopher Zibart of Hopkins &

Sutter; Sharon Neal on behalf of

ComEd

# # # # # # # # #

165

Brain Urbaszewski on behalf of

ALAMC & IEC

#

166

Carol Dorge, LCCA

# # # # # # # # # # # # # # # #

167

James R. Monk, President, IEA

#

# # # # #

169

Evan L. Craig, Group Chair, Sierra

Club Woods & Wetland Group,

Vernon Hills, IL

#

# # #

170

Stephen Brick, Director, External

Relations & Environmental Affairs,

PG&E

# # # # # # # # # # #

---

Emissions Control Technology

Modeling

Ozone Nonattainment

Pollution

Quality

Alternatives/Efficiency

Capacity

Demand

Deregulation

Market

Policy

Power Distribution

Effects

Safety

AirApplicability

Enforcement

Permitting

NOx SIP Call

NOx Waiver

Other States

Zoning

Local Guidance & Public Involvement

Number of Plants

Use

Taxes

# PUBLIC COMMENT

Air

Energy

HealthMoratorium

Noise

Regulations

Siting

Water

Other

171

Freddi Greenberg, Executive

Director and General Counsel,

MWIPS

# # # # # #

#

# # # # #

172

Sierra Club, Illinois Chapter

#

# #

173

Gerald Erjavec, Manager, Business

Development, Indeck

#

# # # # # #

186

Ersel C. Schuster,

McHenry County Board

#

187

Katherine Hodge & Karen

Bernoteit, Hodge & Dwyer/IERG

#

# # # # # # # #

189

CCLC and Liberty Prairie

Conservancy

#

# # #

190

Jim LaBelle, Sandy Cole, Bonnie

Thomson Carter—Lake County

Board Members

#

# # # #

191

Marsha B. Winter,

Zion, IL

#

# # #

192

Ken Bentsen,

Sugar Grove, IL

#

# # # # # #

194

Ralph N. Schleifer,

Kaneville, IL

#

# # #

195

Marci Rose,

Big Rock, IL

#

# #

---

ADDITIONAL SUMMARIES OF PUBLIC COMMENTS—SUMMARIES

PC 1—Ms. Cindy Conte, Reliant

Reliant has a 345 MW peaker plant in Shelby County. It currently has an 870 MW

peaker project under construction in DuPage County, scheduled to become operational in June

2001. Reliant stated that the industry standard is to have 15 to 20% extra capacity (

i.e.

,

reserve margin). Figures from MAIN, which includes Illinois and nearby states, show that the

reserve margin in 1998 was 9.6% and 7.6% in 1999. Reliant asserted that it will not be

possible to maintain a 15-20% reserve margin without peaker plants in Illinois.

Reliant believes that Illinois has a shortage of peaking capacity in the State, and Illinois

should construct additional power plants in the State. It noted that peaker plants are not new to

Illinois. For over 30 years, there has been a dual fuel (natural gas/fuel oil) peaking unit in

Aurora. Reliant noted that the technology for peaker plants has changed for today’s peaker

units. Namely, Reliant’s peaker project in DuPage County will use turbines with advanced

generation and clean emissions control technology fueled by natural gas only.

Reliant alleged that today’s peaker plants are among the cleanest power plants operating

and are significantly less harmful to the environment than existing fossil plants. Reliant’s

plants use state-of-the-art, dry-low NOx and water-injection to control emissions. Reliant

completed an air modeling study to determine where the greatest concentration of NOx

emissions would occur from the peaker project in DuPage County. The modeling showed,

among other things, that the plant’s maximum emissions are concentrated in a small area

radiating out a few hundred feet to the north of the property.

Reliant cautioned that in California, due to a booming economy and unseasonably hot

temperatures, the state’s electricity reserve has gone from 35% in the early 1990s down to

almost nothing. Reliant recommended that building peaker plants will help Illinois avoid a

similar shortage, brownouts, and high costs for consumers. Reliant supports the current

procedures in place for permitting and approval of peaker plants. It also cautioned that Illinois

needs more power supplies, and should not rely on neighboring states to fill the gap.

PC 2—State Senator Debbie Halvorson, 40th

District

State Senator Halvorson asked the Board to consider delaying the issuance of any air

permits until the Board’s inquiry proceedings are finished and the Board’s recommendations

are enacted. She joined State Senator Link in asking Governor Ryan for a moratorium on

peaker plants this summer, until they could better understand the plants’ effects on

communities and general air quality.

PC 3—Mr. Ron Molinaro of Winthrop Harbor

Mr. Molinaro is concerned that if two peaker plants are built in Zion, then the area

within a ten-mile radius of Zion would have two coal-burning plants and two peaker plants.

---

2

He fears that the cumulative effect of all four of these plants operating would be very

detrimental to air quality. He is also concerned that the noise from the proposed plants would

disrupt the homes located a few hundred yards away. Mr. Molinaro also wondered if there

would be enough water available to new homes and businesses in the area if the plants were

built. He mentioned that Zion exceeded its allocated amount of water in 1999 by 22 million

gallons. Lastly, he questioned whether the price of electricity will increase if the plants are

built.

PC 4—Mr. Peter J. Cioni, Director of Community Development, City of Zion

Mr. Cioni wanted to clarify that Zion is only considering one peaker plant project,

namely the Skygen project.

PC 5—Mr. Bob Mosteller, Deputy Director, Lake County Zoning Board of Appeals

Mr. Mosteller, in response to Board Member Flemal’s request, sent a copy of the Lake

County Zoning Ordinance addressing peaker plants. In his comment, he set forth the standards

under which conditional use permits may be approved. He also noted that separate conditions

apply to permits for electric generation plants.

 

PC 11—Ms. Susan Zingle, Executive Director, LCCA

Ms. Zingle stated that, on August 14, 2000, The Wall Street Journal published an

article entitled Volatile Electricity Market Forces Firms to Find Ways to Cut Energy

Expenses. According to the article, during the summer of 2000, several of the states that had

opened their electricity markets to deregulation were struck by extreme price volatility and, in

some cases, power shortages. The reasons were varied: higher-than-expected demand; fewer

new generating plants than necessary to keep up with demand; an interstate transmission

network that is not designed for deregulation; and complex regulations governing the switch

from fixed to free market pricing.

The article stated that consumers in San Diego have seen their electric bills double.

Legislators there have been trying to introduce bills to ease the expense, but none address the

question of who would pay for the difference between wholesale prices and the prices paid by

the newly-protected consumer. The shock is causing many to question the main assumption

about deregulation: “that competition among power providers would lead to cheaper prices

and greater efficiencies.”

Big energy users are spending more money on manpower and consultants to cope with

deregulation. Their goal is to keep down prices and limit power disruptions. Energy trading

company Enron signed contracts to supply $3.8 billion in energy and energy services to

customers during the spring of 2000. Enron offers packages that mix fixed and indexed rates

much as a mortgage does. It also provides incentives to those firms that allow it to replace

their energy infrastructure over time—which gives Enron a better sense of what the client will

be spending.

---

3

Companies for which electricity is a make-or-break operating cost have less flexibility.

They have been most affected by current market conditions. Phelps, a copper producer, has

boosted in-house generation to reduce reliance on outside suppliers and is “juggling its

production schedules” to avoid operating when power is expensive.

PC 12—Mr. Gary Hougen of Winthrop Harbor

Mr. Hougen is concerned about the proposed peaker plant for Zion. Specifically, he is

concerned about the “heightened nitrate ion content in groundwater during summer low-flow

water conditions. Heightened nitrate . . . content has been linked to various illnesses . . . .”

Mr. Hougen claimed that “[h]eightened nitrates would occur as the ambient level of this

ion is increased during cooling water usage by (water-cooled) peaker plants.” Mr. Hougen

attached a map showing “Commercial Nitrogen Fertilizer Leaching Vulnerability.”

Mr. Hougen requested that the Board “develop a protocol to assure that drinking water

of those households on well water in the vicinity of the proposed peaker plant would not incur

a significant deterioration from their operation.” Mr. Hougen hopes that “the protocol would

demonstrate through engineering studies that the EPA limit of 10 ppm would not be

exceeded.”

PC 13—Mr. Robert Brooks of Waukegan

Mr. Brooks claimed that “advanced distributed power generation technology is now in

the demonstration phase which has the following advantages vs. currently proposed turbine

peaker or base load systems”:

•

 

“Nearly twice the efficiency of simple cycle peakers”

•

 

“Less than 1 ppm NOx output”

•

 

“Requires no water input (produces a small amount of water) . . . .”

Mr. Brooks also enclosed two recent articles from Ward’s Engine and Vehicle

Technology Update that describe a distributed power system installed at a California electric

utility plant. The system was expected to achieve efficiencies of 60 to 65%. It could also be

modified so that its CO2 emissions could be injected into the ground. The system requires no

water, but instead produces a small amount of water.

PCs 14-30, 32-90, 92-106, 113-160, 174-185, 188, 193—Form Letter Filed By a Number

Citizens

According to these citizens, Illinois needs to develop a NOx SIP plan, and the

cumulative impact of these plants on the air quality of the Chicago metropolitan area needs to

---

4

be considered. They stated that this cannot be accomplished by “look[ing] at permits one at a

time.” In addition, the Chicago area is an ozone NAA, which also needs to be considered.

In Big Rock, a peaker plant is proposed that would use groundwater as its water source.

The citizens stated that all residents of Big Rock depend on groundwater. They asserted that

extraordinary care should be made in permitting this use.

The citizens stated that new or expanding peaker plants should be subject to siting

requirements beyond applicable zoning requirements. The peaker plant proposed for Big Rock

would be located in the middle of what is now agricultural land. The citizens argued that this

plant siting is inconsistent with the Kane County 2020 plan. According to the citizens, the

State should have a policy to encourage the siting of peaker plants in brownfields.

The citizens maintained that additional regulations or restrictions should apply to “all

facilities, old and new.” They also asserted that the Board should place a moratorium on air

permits for peaker plants at least until the cumulative effects of these plants “on the NOx SIP

call is completed.”

PC 31—Mr. Curt W. Peters of Winthrop Harbor

Regarding the proposed peaker plants for the Zion Benton Township area, Mr. Peters

stated: “It is my opinion the Zion City Council should explore alternative options to obtain tax

base revenue, as well as jobs for the community. I say NO to building power plants of any

kind in our township.”

PC 91—Ms. Jane Erdman of New Holland

Ms. Erdman is alarmed about having a peaker plant in her area “due to the high

possibility of air pollution, within an 8 mile radius of the plant.” Ms. Erdman claimed that the

emissions of the plant, along with other emissions will contribute to acid rain, “create

respiratory problems, affect crop production, erode solids like paint and rock and severely pit

metals; possibly creating disasters for this area in order to supply electricity for other states to

waste.”

PC 107—Mr. Udo A. Heinze, Manager, Strategic Projects, Ameren

Mr. Heinze commented on (1) emissions, (2) siting, (3) water, (4) hazardous materials

on plant sites, (5) property taxes, (6) new rule applicability, and (7) the five questions that

Governor Ryan posed for the Board’s inquiry proceedings.

Emissions

Mr. Heinze noted that NOx emissions from peaker plants will be kept under the

emissions “cap” that the NOx SIP call ordered. He argued that there is no need for additional

requirements to control SO2 emissions because those are already capped under the federal acid

---

5

rain program. Mr. Heinze further noted that most new peaker plants are simple cycle gas-fired

combustion turbines. He argued that requiring BACT or LAER controls on these types of

plants would be impractical or very expensive. The expense, he argued, would make the units

uneconomical to operate.

He acknowledged that mass emissions during start-up might be slightly higher than

normal operations. However, they are still very low and do not last long, according to Mr.

Heinze. He also noted that IEPA has a process in the permitting of the plants to account for

the slightly higher mass emissions that occur during start-up conditions. He added that the

permitting process requires IEPA to review any proposed facility, including the modeling of

air quality emissions.

Siting

Mr. Heinze argued that zoning should be a local issue, and not a decision that a State

agency imposes.

Water

Mr. Heinze noted that the testimony shows that for some high-density areas, water use

may be a broader issue. For those areas, he suggested that it would be prudent to consider

water use on a regional, rather that purely local basis.

Hazardous Materials on Plant Site

Mr. Heinze noted that not all peaker facilities have backup fuel capability. When they

do, however, it is part of the permitting process and would be presented to both IEPA as part

of its air construction permit application and the applicable zoning authority. He also argued

that storing fuel oil as backup fuel is not a new risk that requires further regulation or control.

Property Taxes

Mr. Heinze asserted that because combustion turbines are portable and can be

relocated, they generally are not considered real property for tax purposes. He argued that the

local taxing authority is the appropriate jurisdiction to address whether the peaker plants must

pay property taxes. He further argued that it is not a foregone conclusion that all proposed

peaker plants will obtain tax abatements, noting that many have not.

New Rule Applicability

Mr. Heinze advocated that as regulations governing facilities change, it is more

reasonable that those changes apply to facilities that have not committed to purchase orders for

equipment rather than to facilities already completed or in the process. He believes that

developing generation requires “regulatory certainty.” He believes that any new rules should

---

6

not apply retroactively.

---

7

Governor Ryan’s Questions

With respect to the questions that Governor Ryan posed for the inquiry proceedings,

Mr. Heinze submited that Ameren thinks (1) peaker plants do not need to be regulated more

strictly than Illinois’ current air quality statutes and regulations provide; (2) peaker plants do

not pose a unique threat, or greater threat than other types of facilities, with respect to air

pollution, noise pollution, or groundwater or surface pollution; (3) peaker plants should not be

subject to siting requirements beyond applicable local zoning requirements; (4) any new

regulations or restrictions should be applicable on a date-certain basis, prospectively applied;

and (5) other states’ approaches to peaker plants should not necessarily be applied in Illinois.

PC 108—Ms. Jeannine Kannegiesser, Center for Neighborhood Technology (CNT)

What is peak demand and why are peaker plants appearing in Illinois?

CNT commented:

Summer peak demand can cause trouble for utilities and their customers as

noticed in Chicago’s summer of 1999. When demand across the distribution

system exceeds the systems capacity to carry power, blackouts and brownouts

occur to protect the system. * * *

The 1997 electric restructuring law in Illinois created an attractive business

opportunity for merchant power generators. In a state where peak demand is

growing, it became legal for alternative suppliers to market their product

directly to customers.

[P]eak power producers expect to make a profit by running their plants for a

limited number of hours during the year. * * * However, the “annual” peaker

plant emissions might occur over only a matter of days or weeks, concentrated

during the hot summer months.

What are the alternatives to peaker plants?

CNT stated:

The motive for building a peak power plant might be reduced if electric

customers in Illinois worked to decrease their demand for peak power.

Customers can do this by improving end use energy efficiency or by generating

their own power at the site of use.

[I]mproving the efficiency of air conditioners is an attractive efficiency project.

Upgrades in lighting and other end uses can contribute to decreases in peak

load. Distributed generation, also called on-site generation, is the generation of

electricity by small, clean generators located on or near the site where the power

---

8

will be used. Distributed generation eliminates the need to transport power long

distances over wires and can be dispatched to serve peak demand or to back-up

a sensitive operation during power outages. Distributed generation might be a

natural gas turbine, fuel cell, or renewable power source like photovoltaic cells.

* * *

Technologies for generating power at the site of use can decrease the growth in

demand for utility power. Thermal storage can shift power usage to the time of

day when power is much less expensive.

Why are alternatives to peaker plants not being selected?

CNT stated:

Because customers do not face real prices, there is no incentive for reducing

usage during times when the cost of providing service is at its height.

Residential and commercial customers, in particular, pay the same rate per kWh

regardless of when they use it, despite the fact that the same kWh on a hot

summer afternoon could cost the utility many times what a spring evening kWh

costs.

What are the benefits of reducing peak demand?

CNT claimed that:

Reducing peak demand before the power market opens completely will give

small consumers a stronger position in that market, particularly if groups of

consumers can pool their more attractive demand and shop together for a lower

price.

In addition, CNT maintained that the “distribution system will experience less stress if peak

demand is maintained below capacity.”

 

What is CNT doing about the change to a deregulated electric system?

CNT explained:

[T]hrough its Community Energy Cooperative[,] . . . [CNT] is currently

contributing to an effort to improve state programs to promote energy efficiency

and distributed resources. * * * On October 17, CNT participated in a meeting

hosted by State Senator Steven Rauschenburger where we presented the case for

state action to prepare consumers for the competitive market by promoting

efficiency and distributed generation. State intervention is necessary during this

transition when customers do not face real prices.

---

9

What does CNT suggest?

CNT urged the Board:

[T]o promote energy efficiency and distributed generation as an alternative to

increased commodity production by including these options in its report to the

Governor. * * * The [Board] should also seek input on quantification of

pollution prevention possible from energy efficiency to strengthen the argument

for these measures becoming a focus of state policy.

PC 109—Mr. Patricio Silva, Midwest Activities Coordinator, NRDC

A “priority for NRDC is the enactment of state and federal electric utility restructuring

legislation that insures that more open and competitive electricity markets do not yield

unwanted dividends such as increased air and water pollution.” NRDC stated that it:

generally supports . . . new natural gas-fired combustion turbines as a

transitional generating technology, alongside development of new renewable

electric generating technologies and additional investment in energy efficiency

. . . . The siting and permitting of new electric generating facilities ideally,

should integrate evaluation of individual project and aggregate multiple project

potential environmental and public health impacts.

According to NRDC, “[s]ince enactment of the [Illinois Electricity Choice Law], . . .

Illinois has drawn considerable attention from merchant power plant developers.” The result

has been “the filing of numerous permit and zoning variance applications before state agencies

and municipalities for over 55 new electric generating facilities, with a potential generating

capacity of 22,000 MW . . . .” NRDC stated that “nearly all these new electric generating

facilities will be . . . single cycle combustion turbines” operating “during periods of peak

demand load.”

NRDC explained the increase in peaker plant permit applications:

Many developers of new electric generating facilities believe there are lucrative

short-term profits to be made by siting as many peak load serving single cycle

combustion turbines as they can within the next 18-24 months, anticipating peak

demand episodes similar to that experienced by Illinois in 1999.

However, NRDC disagreed that peaker plants will alleviate the problems that Illinois faced in

1999: “Rather, improvements and upgrades of the distribution system infrastructure were and

remain the principal problem and need.”

NRDC stated that “[e]lectricity demand in Illinois is forecast to continue increasing. *

* * The electric reliability council serving Illinois and portions of Wisconsin, MAIN, . . .

projected available generating capacity at 56,523 MW” for the summer of 2000. NRDC noted

---

10

that the “Energy Information Administration . . . forecasts ‘gas technologies are expected to

dominate new generating capacity additions.’” NRDC stated that “[m]uch of this new natural

gas-fired generating capacity is expected well before 2020.”

NRDC reported:

Illinois is experiencing the leading edge of an energy ‘Oklahoma land rush’

phenomenon that has already played itself out in New England . . . . Most

relevant is

that of the 36 combustion turbines being permitted at 19 electric generating

facilities across New England, all are combined cycle natural gas-fired

combustion turbines. * * *

In the neighboring state of New York, 20 new electric generating facilities are

undergoing siting review representing a total of 15,064 MW of generating

capacity . . . . [T]hey will be equipped with combined cycle combustion

turbines.

According to NRDC, it is not true that:

[E]lectricity consumption in California is surging out of control . . . . In fact,

the California system peak from 1990-1999 grew less than 2% per year . . . .

Total statewide consumption of electricity increased less than 1% per year from

1990-1998 . . . .

Electricity use spiked in June 2000, up almost 13% compared to the much

cooler June of a year earlier. * * * This clearly contributed to sharply higher

wholesale electricity prices for June 2000 . . . . It didn’t help, obviously, that

natural gas prices also were soaring above five dollars per [mmBtu] . . . . The

first three weeks of July saw more moderate weather in California, [and] . . .

average wholesale electricity prices dropped about 40%. However, . . . these

prices were still very high by recent historical standards.

NRDC added:

The short term reliability crises in California should be quickly and cost-

effectively resolved by additional investment and deployment of energy

efficiency and renewable energy on [a] sufficiently large scale, alongside entry

into service of single and combined cycle natural gas-fired combustion turbines

already in the siting and construction process.

NRDC claimed that the “deployment of energy efficiency and renewable energy

investments have already made significant contributions to California’s economy and electricity

grid.” Furthermore, the CEC wrote that “California continues to lead the nation in

maximizing the amount of Gross State Product produced per unit of energy.” NRDC

---

11

continued:

California still has numerous untapped and inexpensive opportunities to get

more work out of less electricity.

Renewable energy is also a critical part of California’s energy portfolio, with

about one-ninth of the state’s supply now generated from wind, solar,

geothermal or biomass resources.

NRDC stated:

Natural gas-fired combustion turbines represent the best available large-scale

fossil fuel generation in terms of minimal adverse air quality impacts.

Combustion turbines, particularly combined cycle applications are capable of

obtaining 55-60% efficiencies . . . . Single cycle natural gas-fired combustion

turbines are considerably less efficient, operating between 28-35% with

combustion controls limiting NOx emissions to 15-25 ppm.

However, “the aggregate impact of the proposed combustion turbine projects in Illinois would

amount to several hundred tons, likely to be emitted during the worst ozone episodes.”

NRDC recommended that USEPA “withdraw the section 182(f) NOx waiver granted to

the Chicago . . . ozone [NAA], which exempts proposed new single cycle combustion turbines

from obtaining emission offsets or utilizing [BACT].”

NRDC discussed aggregate impacts from multiple peaker plants:

In isolation single cycle natural-gas fired combustion turbines do not pose a

greater threat to public health and the environment than other types of state-

regulated facilities, particularly coal-fired steam turbine generating units.

However, the aggregate impact of siting several single cycle natural gas-fired

combustion turbines should be thoroughly evaluated since these units can emit

quantities of NOx . . . CO…PM 10…VOCs …SO2…and sulfuric acid mist . . . in

quantities sufficient to trigger permit review thresholds under the [CAA].

NRDC added that peaker plants can:

[A]lso emit toxic air pollutants, including formaldehyde, acetaldehyde, benzene,

lead, mercury and beryllium in quantities sufficient to trigger permit review

thresholds under the [CAA].

Toxic air pollutants emissions increase significantly at single cycle combustion

turbines equipped to burn distillate fuel oils as an alternative fuel source.

---

12

NRDC commented that “many of these proposed single cycle combustion turbine

projects maybe converted in the future to combined-cycle . . . . A single cycle generating unit

may not tax available water resources for example, but its conversion to combined-cycle

operation could create significant allocation quandaries for the host community.”

NRDC stated that “[s]ingle cycle combustion turbines are not particularly water

intensive, consuming less than 100,000 gallons per day.” However, “[w]hen firing distillate

fuel oil, water consumption rises to up to 1,000,000 gallons per day when steam injection is

employed to reduce NOx emissions. In comparison a 1,000 MW combined cycle natural gas-

fired combustion turbine relying upon wet cooling consumes approximately 7,000,000 gallons

per day.”

NRDC stated that peaker plants:

[S]hould avoid disproportionately burdening any community, but particularly

low income communities and communities of color. * * * [M]any potential

host communities are convinced from their experiences that existing local zoning

requirements are not adequate to address all the public interest concerns. * * *

That may be in part attributable to the lack of coordination between

municipalities and Illinois regulatory agencies involved in permitting new

electric generating facilities, particularly [IEPA] . . . .

NRDC advised that “[w]hen applications are pending for multiple facilities, siting

boards should select those that best meet these criteria rather than approve applications on a

first-come, first-served basis.”

NRDC reported that “California and New York require a coordinated and systematic

evaluation

 

[of] the potential environmental and public health impacts of new electric generating

facilities”:

The California energy facilities siting process is particularly rigorous, requiring

demonstration of need, balanced against the potential environmental and public

health impacts. An applicant seeking to site a new electric generating facility of

50 MW or greater is required to submit a pre-application. * * * The California

energy facilities siting process requires a single regulatory permit (insured by

simultaneous review of air, water quality permit requirements by relevant

municipal, state and federal regulatory agencies). * * *

The California Legislature amended the energy facilities siting process by

establishing a “fast track” process of 6 months for new electric generating

facilities presenting no significant adverse environmental impacts. * * *

Single cycle natural gas-fired combustion turbines operating under contract with

[the] California Independent System Operator which emit less than 5 ppm [of

---

13

NOx] . . . and displace[] more polluting existing generating capacity can obtain

expedited air permit approvals. * * *

The State of New York recently consolidated the permitting of new electric

generating capacity greater than 80 MW under the [NYS Siting Board], under

Article X of the New York Public Service Law. Prior to commencing

construction, a power plant developer must obtain a “Certificate of

Environmental Compatability and Public Need.” * * * [The NYS Siting Board]

“is authorized to issue both air and water permits. * * *

Under [New York’s] Article X, the project applicant is required to file a

preliminary scoping statement explaining in detail: the proposed facility and its

environmental setting; potential environmental impacts from the construction

and operation of the proposed facility; proposed mitigation; reasonable

alternatives to the proposed facility; and other information that may be relevant

or required by the [NYS] Siting Board.

The project applicant is responsible for ensuring the preliminary scoping

statement is adequately publicized.

Article X encourages public involvement by requiring the project applicant to

hold public meetings, offer presentations to interested parties and establish a

local presence in the community. * * * [T]he project applicant must submit

with its application a fee to be used as an “intervenor fund,” which the [NYS]

Siting Board examiner will disburse to municipal and local parties to defray the

cost of expert witnesses and other technical assistance. * * *

At present NRDC is participating as an intervenor in 8 of the projects under

Article X review.

NRDC believes that the Board should integrate “the currently disjointed local zoning

review process with consideration of draft state administered air and water permits.” NRDC

supports:

[S]iting laws that encourage new power plants to: (1) use renewable fuels[;] (2)

implement state-of-the-art air and water pollution systems; (3) locate on or near

existing power plant sites that do not require new fuel supply or transmission

infrastructure; and (4) avoid disproportionately burdening low-income

communities and communities of color. * * * [S]iting laws should ensure that

cumulative environmental and public health impacts decline over time as

capacity increases.

NRDC also stated that some entity should take over the ICC’s old role and develop “a

comprehensive energy strategy for Illinois.”

PC 110—Mr. Ronald D. Earl, General Manager & CEO, IMEA

---

14

IMEA described itself as a:

not-for-profit unit of municipal government made up of 39 of the State’s 42

municipally-operated electric systems. * * *

The IMEA’s primary function is to provide wholesale electricity to its members.

Not only does IMEA arrange for a sufficient quantity of electricity, it also

schedules the delivery of that power to each community over the State’s

transmission grid on a real time basis.

At this time, IMEA has contracts with 28 of the State’s 42 municipal systems to

provide all, or most, of their wholesale electricity.

IMEA claimed that “a reliable electric market requires generation sources in

comfortable excess of projected peak demand.” IMEA asserted that “generation sources

should be located in relatively close proximity to the load they serve. * * * [H]igh volume,

peak load days create transmission bottlenecks that have threatened parts of the State with

mandatory curtailments as recently as this summer.”

IMEA requested that “the State do nothing to create power shortages in Illinois through

new and restrictive regulation of natural gas-fired, gas turbine peaking plants. They are . . .

the cleanest source of power generation available today that can satisfy peak load needs.”

IMEA admitted that it would “be ideal if even greener sources of power, such as wind, solar,

or hydro, could satisfy the State’s growing needs. But such sources of power are not available

on demand.” IMEA stated that “[w]ithout sufficient power generation, higher costs and

diminished reliability . . . will result.”

PC 111—Mr. Earl W. Struck, President/CEO, AIEC

AIEC described itself as:

[T]he statewide service organization for Illinois’ 27 electric cooperatives. The

25 electric distribution cooperatives provide electric service[,] . . . primarily in

rural areas. * * * Two generation and transmission cooperatives supply

wholesale power to the majority of the state’s distribution cooperatives.

AIEC stated that “Article XVII of Illinois’ deregulation law grants co-ops and

municipal systems ‘local control’ over decisions relating to a deregulated marketplace. * * *

[A] number of cooperatives have taken steps to secure additional generation capacity.”

AIEC reported:

Two Illinois cooperatives have recently announced plans to increase coal-fired

generation, using advanced ‘clean coal’ technologies. Several other

---

15

cooperatives have decided to utilize natural gas-fired peaker plants. * * * In

each case, planned peaker plants have been located in sparsely-populated and

remote rural downstate areas, without objection from local residents, and with

the support of local government.

AIEC believes that Board inquiry hearing testimony “indicates that peaker plants are

among the ‘cleanest’ answers to the need for additional generation capacity.” AIEC

concluded: “The electric cooperatives of Illinois respectfully suggest that to impose new and

burdensome regulations regarding installation of new gas-fired peaker plants, especially in

light of California’s recent experiences, would be unwise.”

PC 112—Ms. Verena Owen of Winthrop Harbor

Ms. Owen stated:

Under the [CAA] 160 (5), the IEPA has to consider all the consequences of a

decision to increase air pollution. That includes the basic determination if a

facility is needed or not needed. The IEPA has repeatedly refused to look at

the need for the peaker proposals, however, the language in the permits tells

otherwise. The IEPA has apparently concluded that they are all needed. The

IEPA is operating in a [void], i.e. a missing energy policy . . . .

Ms. Owen quoted IEPA’s Mr. Romaine (from the transcript of IEPA’s Carlton hearing

at page 132): “Or if, in fact, there has been a catastrophic change in Illinois’ electric power

supply system for the particular summer . . . . We have to contemplate potential operation of

this facility as a major source.” Ms. Owen is concerned that “IEPA is contemplating the

possibility that the minors become majors? Again, the permitting section of the IEPA would

be making energy policy . . . .”

Ms. Owen “would like to see the . . . Board recommend relieving the IEPA from the

responsibility of making energy policy decisions and taking over the role the ICC used to have.

I would like to see you ask the legislators to develop a comprehensive energy policy that

benefits the citizens of Illinois and protects the environment.”

PC 161—Ms. Mary Thurow of Big Rock

Ms. Thurow stated that “[i]f a peaker plant is located in Big Rock, it will destroy a

major portion of our small agricultural landscape.” Ms. Thurow asked that the Board “study

the plans on the NOx SIP before further plans are acted upon.”

PC 162—Ms. Margaret A. Bock of Libertyville

Ms. Bock admitted that “[a]lthough peaker plants have benefits . . . such as generating

electricity without nearly the quantity of air pollution as old coal-fired power plants, they also

have some negatives such as producing a certain quantity of air pollution, as well as a certain

---

16

level of noise. [T]heir water requirements pose a problem.”

Ms. Bock stated that “[e]ach village and municipality must assess the proposal in terms

of its effect on the local area. And yet, many of the effects have a far wider effect than a local

one.” Ms. Bock commented:

I believe that we must consider their impact statewide. We need a statewide

discussion on how many peakers would be optimal, and how to decide which

sites are appropriate. We need to review our air quality statutes and

regulations, and probably make them more rigorous. And those additional

regulations or restrictions should apply to currently permitted facilities and to

new facilities and expansions. * * * I refer you to the California

Environmental Protection Agency Air Resources Board “Guidance for Power

Plant Siting and Best Available Control Technology” publication, as approved

by the Air Resources Board on July 22, 1999, as an example of what other

states are doing.

PC 163—Ms. Cynthia A. Faur, Sonnenschein, Nath & Rosenthal, on behalf of Midwest

Generation

Midwest Generation commented:

Midwest Generation is a subsidiary of Edison Mission Energy . . . . On

December 15, 1999, Midwest Generation purchased the fossil fuel-fired assets

of [ComEd]. Midwest Generation has an installed capacity of approximately

10,000 [MW] in Illinois—nearly 1,000 [MW] of which is existing peaking

capacity.

Midwest Generation has applied to [IEPA] for a permit to install an additional

300 MW of peaking capacity at its existing Waukegan Generating Station.

These peaking units will be subject to [NSPS], which in this case will be

equivalent to [BACT], and NOx emissions from these units will be limited to

less than 40 [TPY].

Since purchasing the Waukegan Station from ComEd in December of 1999,

Midwest Generation has commenced a project to significantly reduce NOx

emissions from that station. In permitting new peaking capacity at the

Waukegan station, Midwest Generation is not using any of these emission

reductions to offset emission increases from the new peaking units.

Midwest Generation claimed that additional peaking capacity will be required to meet

the 17-20% reserve minimums and keep pace with increasing demand. Midwest Generation

maintained that peaker plants do not “warrant more stringent regulation than currently

provided in existing and proposed Illinois requirements.” Midwest Generation continued:

“As both Chris Romaine and Kathleen Bassi of [IEPA] testified[,] . . . peaker plants do not

---

17

threaten air quality.” Midwest Generation stated that “it is important to note that these new

peaking units are required to meet the NSPS for Stationary Gas Turbines, 40 CFR § 60.330

et

seq

. This NSPS contains requirements which limit the amount of NOx and SO2 that can be

emitted from peaking units.”

Midwest Generation added:

[T]he construction permits issued for the peaking units contain both short and

long-term emission limitations. Where a peaking unit is located at an existing

facility, the requirements can be more stringent. In the case of Midwest

Generation’s proposed peaking units to be installed at its Waukegan station,

Midwest Generation accepted an annual NOx limitation of approximately 39 tons

on emissions from its two peaking units combined to ensure that the addition of

these units would be treated as a minor modification to the Waukegan station.

In addition to permitting limitations on peaker plants, many peaking plants will

be subject to the NOx reduction rules currently pending before the Board.

Under the NOx SIP call rule, peaker plants will be allocated NOx allowances

from an allowance “set-aside” available for new sources. Under the NOx SIP

call, NOx allowances can be purchased on the open market from other sources.

Midwest Generation believes that the existing permitting rules, the NSPS

standards, and the NOx SIP rule will effectively regulate emissions from peaker

plants.

Midwest Generation claimed that “[t]hese plants do not pose a unique or greater

“environmental threat” than other types of sources in Illinois.” Midwest Genration continued:

The primary emissions from these plants will be NOx, but peaker plants will

only be a small portion of the NOx emitted in the State. * * * With regard to

water use, not all peaking units use a great deal of water. In fact, Midwest

Generation’s existing peaking units, as well as those proposed to be installed at

the Waukegan station, use very little water. * * *

[P]eaking units constructed in Illinois are subject to stringent noise regulations

which require the operators of peaking units to address noise issues . . . .

Midwest Generation does not believe that noise from these peaking units will

constitute a unique threat.

Midwest Generation believes that “while [IEPA] can provide technical expertise on the

air quality impacts of peaker plants, local governments are the best suited to make land use

determinations for their jurisdictions . . . . [L]ocal governments have the authority to deny

siting approval for peaker plant even if [IEPA] grants a construction permit for the proposed

project.”

---

18

Midwest Generation does not believe “that [any new] requirements should apply

retroactively to existing peaking units”:

Midwest Generation currently operates 9 existing peaking sites—all of which are

located in sites that are zoned for that purpose or at existing power plants. If

additional requirements were made applicable to these peakers, it could

significantly impact the ability of these units to provide needed power during

peak periods.

Midwest Generation claimed that “[w]ithout additional peaking capacity in the State, it would

be difficult, if not impossible, to maintain reliable electric service.”

PC 164—Mr. Christopher Zibart of Hopkins & Sutter and Ms. Sharon Neal on behalf of

ComEd

ComEd claimed that the “record accumulated in this docket supports the current

regulatory scheme.” ComEd stated that it:

[S]upports the restructuring of the electric industry as crafted by the Illinois

Legislature and the [FERC]. ComEd believes that, as designed by the Illinois

Legislature, a free market for electric generation will lead to ample capacity at

reasonable prices. A critical feature of restructuring is the availability of new

privately developed electric generation to meet the State’s increasing demand for

power. No longer will the customers of a utility be at risk that too much

generation will be built, resulting in high rates based on the cost of building it.

 

ComEd stated that “local governments possess substantial control over the process of

siting non-utility generation.” ComEd claimed that “[n]ew or more stringent regulation is not

warranted.” ComEd stated that “[w]hereas California has maintained tight regulatory control

over wholesale prices and the approval of new generation, Illinois has allowed prices in a free

market to determine what generation needs to be built.”

ComEd asserted that additional peak generating capacity is good for Illinois. ComEd

stated that “peak load is increasing substantially from year to year. * * * Because electricity

cannot be stored, and must therefore be generated at the instant it is demanded, there must be

enough generating capacity available to meet the peak load.”

ComEd stated that “[i]t is important for Illinois citizens and consumers that many of

these new peaker plants be located in Illinois . . . [for] [t]hree key reasons”:

1.

 

Illinois peakers will benefit Illinois consumers. * * * As the price of

electricity in the future depends increasingly on market forces, keeping

prices down in the face of increased demand requires more generation,

and generation by a diverse group of electric producers. A large number

---

19

of sellers directly connected to an Illinois utility’s transmission grid, will

keep the price of electric power from jumping rapidly.

2.

 

Illinois peakers promote reliability. Local generation helps support

voltage on the system, especially near the generator. * * * The closer a

generation source is to the load, the fewer potential problems there are

with transmitting the power.

3. Distant peakers are not just as good. * * * Only so much power can be

transmitted through a given line; at some point, to keep the lines from

overloading, a transmission owner must turn down requests to transmit

more power or curtail other transactions. * * * There have already been

numerous instances on which transmission requests were denied. This is

especially true during peak load conditions. It is therefore incorrect that

either Illinois can depend heavily on generation in other states, or that

Illinois-based generation will be used to supply huge amounts of load in

other states. Unless or until massive new transmission line projects

redefine the transmission grid, this condition will remain for the

foreseeable future. And, regardless of interstate transmission

availability, distant generation cannot support voltage on the local system

to the same extent that local generation can. [citations omitted]”

ComEd asserted that environmental regulation should not unduly inhibit and frustrate

the power market developed by the legislature. ComEd claimed:

[T]he Legislature has entrusted the emerging free market for electric power to

cause the appropriate amount of new generation to be built. This scheme will

not function as the Legislature intended if Illinois’ environmental regulatory

scheme is changed unreasonably. The Board must realize that restrictions on

peaker plants will reduce the supply of electricity generated and available to

consumers.

ComEd stated that peaker plants are not different from other industrial facilities in

Illinois so as to require more stringent regulation. ComEd maintained that “a well-designed

peaker plant easily complies with all applicable federal and state environmental requirements

and poses no significant environmental threat to the surrounding community.”

“As to siting the new peaker plants,” ComEd claimed:

[T]he current system is clearly working . . . . [U]nlike a state-regulated public

utility, a private developer must fit its new plant into the zoning and siting

scheme of the neighborhood it chooses. Municipalities are well aware of how to

use their zoning power and have substantial discretion to grant or deny zoning

changes or variances. For this reason, some plants have obtained approval,

while numerous other plants have been turned down. (The latest example:

---

20

since the first hearings before the Board in this docket, the Board of Trustees of

the Village of Libertyville rejected a zoning request for a new peaking plant.)

So, the current situation does not demand an overhaul of the siting mechanism.

Certainly, a time-consuming, expensive, bureaucratic process would discourage

independent power from locating in Illinois.

ComEd stated that it is unnecessary to address applying new regulations retroactively

“because no new regulations are needed.” ComEd added, however, that “retro-fitting

equipment is terribly expensive, and would be unfair considering that the facilities met the

regulations pursuant to which they were permitted.”

ComEd concluded that “in California, a slow bureaucratic process has kept construction

of independent power plants to a minimum even though the electric industry has been

restructured.”

PC 165—Mr. Urbaszewski on behalf of ALAMC and IEC

Mr. Urbaszewski stated:

At the hearing on October 5, 2000[,] . . . there was a request from the Board to

provide more information on the estimated number of premature deaths in

Illinois due to the effects or airborne [PM] . . . . [A] report published by

[NRDC] in 1996 . . . [is] the source of the number of 60,000 premature deaths

nationwide due to [PM], as well as being the source of information on deaths in

the Chicago Metropolitan area . . . . The name of the report is

BREATHTAKING: Premature Mortality due to Particulate Air Pollution in 239

American Cities.

Mr. Urbaszewski reported that, “[f]or the Chicago Metropolitan Area[,] the estimated

number of premature deaths was a . . . range from 2075-4759, with a midpoint estimate of

3479. In our original testimony, I stated that the number of premature deaths due to

particulate levels was over 2000.”

Mr. Urbaszewski stated that the “report includes such estimates for eight metropolitan

areas in Illinois. It does not include any figures for rural Illinois counties . . . . Our testimony

indicated that there were over 3000 premature deaths statewide. The actual total from the eight

metropolitan areas in the report was a range of 3052-7020 with midpoint of 5124.”

ALAMC and IEC provided:

A new report released in mid-October, 2000 that documents the connection

between premature deaths and emissions from power plants nationwide. This

study, The Particulate-Related Health Benefits of Reducing Power Plant

Emissions by Abt Associates also breaks down the estimates of premature deaths

by state and metropolitan areas.” The summary of the Abt report is titled

---

21

“Death Disease & Dirty Power: Mortality and Health Damage Due to Air

Pollution from Power Plants. Power plant emissions alone are associated with

1,700 premature deaths annually in Illinois, as well as 1,110 hospitalizations and

33,100 asthma attacks. Numbers for the Chicago Metropolitan Area are 995

premature deaths, 648 hospitalizations and 21,400 asthma attacks.

ALAMC and IEC “urged the Board to begin an inquiry into the threat to public health

presented by existing coal-fired power plants. These plants are grand-fathered out of ever

meeting modern emission standards and now emit the vast majority of [SO2] emissions

statewide—emissions that form airborne fine [PM] less than 2.5 microns (PM 2.5).”

ALAMC and IEC claimed that “[i]t is important to note that while the PM 2.5 standard

is the subject of litigation before the Supreme Court, the health effects of PM 2.5 are not at

issue. Even the District of Columbia Circuit Court of Appeals, the body that sent the case to

the Supreme Court, agreed that the science shows there is a problem.”

ALAMC and IEC “would like to correct a statement [at Tr.2 at 105-106], which states

the number of people with lung disease in Cook County is ‘over 14,000 people.’ It should

read ‘over 400,000 people.’”

PC 166—Ms. Carol Dorge, LCCA

The Peaker Plant Industry

LCCA stated:

The peaker plants that have been the subject of these hearings are natural gas

fired [EGUs]. Some are also being permitted to use diesel fuel as an alternate

fuel. Since these hearings commenced, in August, the number of peaker plants

seeking air pollution permits from IEPA has grown from around 45 to over 60.

Each plant has multiple turbines-usually three or more. We estimate their

combined generating capacity to be 27,500 MW and their combined emissions

(NOx) to exceed 20,000 tons.

LCCA continued:

The Board . . . need[s] to look at the numbers and recognize the reality. First,

the fact that [it] is a big new industry and a real industry, and is not designed to

serve only peak demand as peakers have in the past. Second, the fact that

deregulation of the electric power industry, and relatively lax environmental

regulations and local siting have contributed to an explosion in the number of

plants choosing Illinois, over other states.

LCCA claimed:

---

22

Simple cycle turbines are not “energy efficient” energy producers and they will

contribute significantly to the ozone problem in Illinois and Wisconsin. These

plants generate fewer jobs and less tax revenue than other types of industry.

They take up large tracts of land. Most of the electricity they produce will be

sold to out-of-state customers, and we can expect higher electric prices, and

higher natural gas prices. There are few discernable benefits. Most of the

municipalities that are approving these facilities are being enticed by financial

incentives, through host agreements, or threatened by lawsuits.

LCCA stated that Illinois:

[I]s currently issuing permits which would allow these sources to emit roughly

20,000 tons of NOx (estimated), when the state’s air regulations and SIP

proposals project a NOx demand for new sources of 1500 tons. Noise is a

problem. The transportation and storage of millions of gallons of diesel fuel

through and adjacent to residential areas is a problem. We are already

observing clustering of facilities. Their combined impact needs to be

considered. The state should be proactive and adopt regulations addressing

these environmental impacts.

Air Permit Procedures Need to be Strengthened

LCCA commented:

Almost all of these plants approach or exceed major source thresholds for NOx,

CO, VOM and toxics. [W]e note that facilities are being permitted to emit a

wide range of emissions. Emissions of NOx range from 2.5 ppm to over 40-55

ppm-even plants that are major and subject to BACT. Some of these plants are

admittedly major, and subject to PSD and BACT. LCCA believes that even the

sources being permitted as major sources are being allowed to emit far more air

pollution than BACT should allow.

LCCA claimed that “[i]t is well known that pollutant emissions from combustion

processes are higher during periods of start-up (and possibly shut-down).” LCCA also claimed

that “IEPA has not been requiring applicants to obtain reliable emissions data from the

manufacturers and include the information in their application.”

LCCA stated that “[m]any of these plants are being permitted as synthetic minors with

emissions of NOx and CO approaching major sources thresholds. We believe these sources

would be major, if all emissions (including emissions during startup) were properly accounted

for. IEPA should establish standardized procedures for calculating emissions.”

LCCA claimed that “permits are not being issued based on good engineering data” and

that “[c]onstruction permits allow these plants to operate for a whole season (180 days) before

demonstrating an ability to comply with permit limitations.”

---

23

LCCA stated that the following items should be a part of every permit application:

•

 

“Identity of the real operator and a demonstration of ability to operate, maintain and

decommission the facility;”

•

 

“Information on the duration and expected frequency of startup and shutdown, and

emissions of all pollutants during startup;”

•

 

“Information regarding emissions of toxics during normal operation;”

•

 

“Good operating practices for their units;”

•

 

“Information regarding operating factors;”

•

 

“Standard procedures for calculating emissions during normal operation;”

•

 

“Identification of monitoring procedures available to monitor all conditions impacting

emissions;”

•

 

“Modeling, including a demonstration that the facility will not contribute to the ozone

non-attainment problem.;”

•

 

“Offsets;”

•

 

“[O]perator training;” and

•

 

“Contractual warranties.”

LCCA stated that “[t]hese facilities should install LAER, and every effort should be

taken to prevent backsliding, particularly in the case of NOx and VOM emissions. The NSPS

(at around 75 ppm NOx) is over 20 years old and grossly outdated. The Board should declare

all of these sources “major” for purposes of all air regulations.”

These Sources Will Cause Nonattainment of the Ozone Standard

LCCA reported:

IEPA showed us, through modeling, that the combined impact of the roughly 45

plants in the pipeline would cause exceedences of the ozone standard, at least at

Wisconsin locations. We also note that the Illinois attainment demonstration for

ozone appears to account for roughly half of the plants that are being permitted,

and does not account for additional plants that may be proposed. * * * These

new sources are not currently securing offsets. Only a few of the proposed

---

24

sources will utilize LAER. It will not be technically feasible for these sources

to reduce their emissions to 1500 Tons or to purchase the necessary allowances

from Illinois sources. They will be purchasing allowances from out-of-state

sources, while continuing to emit high levels of NOx, in Illinois. Any

regulatory initiative should include incentives designed to reduce levels of NOx

emitted within the state. There should be incentives which encourage the

purchase of offsets from Illinois sources.

NOx Waiver

LCCA stated that the “NOx waiver should be lifted.”

Noise

LCCA recommended that “[t]hese applicants should be required to hire noise experts

and demonstrate noise will be controlled, before these plants are built.”

Water Use

LCCA believes that “the state should adopt regulations governing water usage and that

this should also be subject to review in a permit proceeding.”

Water Discharge

LCCA acknowledged that the “NPDES program may adequately address concerns

associated with water discharges, including storm water discharges, however, this should also

be made part of the record in the permitting process.”

Spills and Releases

LCCA claimed that “[c]itizens are extremely concerned about the possibility of spills,

releases and possible explosions associated with peaker plant operations” and that “[n]o state

agency has responded to those concerns.”

Environmental/Engineering Review/Permitting

LCCA recommended “a state level environmental/engineering review and peaker plant

permitting process which takes into account all of the environmental impacts associated with

these plants, and imposes requirements to mitigate all environmental impacts. The permit

applicant should include a financial demonstration of some sort, and a decommissioning plan.”

Complete Application

---

25

LCCA also recommended that “[w]hen an application is truly complete, [IEPA] should

issue Notice of Receipt of a Complete Permit Application to all parties to the permit

proceeding.”

Siting

LCCA believes “that there is also a need for some state involvement in siting in some,

but not all cases.”

LCCA’s Siting and Permitting Proposal

LCCA’s proposal includes:

•

 

“Local siting and zoning approval;”

•

 

“State siting approval may also [be] required;”

•

 

“All property owners located within 2500 feet of the property line of a proposed facility

should be provided with notice of the air permit application and peaker permit

application;”

•

 

“Any person could ask[] to be placed on the notice list and request service of all

application materials;”

•

 

“Hearings will be held upon the request of any party;”

•

 

“Any party to a permit proceeding could appeal any permit that was issued;” and

•

 

“[W]e feel an ‘SB 172’ type proceeding is warranted.”

Questions That Governor Ryan Posed

Do peaker plants need to be regulated more strictly than Illinois’ current air quality

statutes and regulations provide? LCCA stated:

The answer is an unequivocal yes. They should be subject to LAER, MACT,

[and] the ERMS program. Existing emission standards—particularly the

NSPS—are terribly outdated. The regulations should also better define permit

application requirements. * * * There must be a way to account for the

combined contribution of these facilities, to the ozone problem. A noise

standard should be adopted. Siting regulations are needed. * * * Storm water

permits should also be required. The combined effect of these facilities needs to

be considered.

---

26

Do peaker plants pose a unique threat, or a greater threat than other types of State-

regulated facilities, with respect to air pollution, noise pollution, or groundwater or surface

water pollution? LCCA answered: “Yes, based on the . . . number of units that have been

proposed and their combined emissions.”

Should new or expanding peaker plants be subject to siting requirements beyond

applicable local zoning requirements? LCCA answered: “Absolutely. Local zoning is not

adequate, particularly where facilities are sited near a municipality’s boundary and near

residential areas.”

If the Board determines that peaker plants should be more strictly regulated or

restricted, should additional regulations or restrictions apply to currently permitted facilities or

only to new facilities and expansions? LCCA answered: “The regulations will only be

effective if they are retroactive, to cover sources whose applications are pending, who have not

commenced construction as of today.”

---

27

PC 167—Mr. James R. Monk, President, IEA

IEA “is a trade organization representing investor-owned electricity and combination

electricity and natural gas companies serving customers in the State of Illinois.”

Do peaker plants need to be regulated more strictly than Illinois’ current air quality statutes

and regulations provide?

IEA answered:

No. No credible evidence has been presented that would justify more restrictive

statutes or regulations for peaker plants than is already imposed on such plants.

Existing and newly proposed rules and regulations regarding nitrogen oxide

emissions provide stringent emission control requirements to safeguard the

health and welfare of Illinois citizens. The permitting process sufficiently

guarantees that these plants will not pose air quality problems for the localities

in which they are operated. * * * Illinois regulators have yet to receive even

the first noise-related complaint regarding those peaker plants that have already

been constructed and are operating under approved permits.

Do peaker plants pose a unique threat, or a greater threat than other types of State-regulated

facilities, with respect to air pollution, noise pollution, or groundwater or surface water

pollution?

IEA answered: “No. * * * [S]ingle-cycle peaker plants create little in the way of

[NOx] emissions or noise and use very small amounts of water. Larger combined-cycle plants

are already held to higher standards under existing rules and regulations.”

Should new or expanding peaker plants be subject to siting requirements beyond applicable

local zoning requirements?

IEA answered: “No. * * * [L]ocal zoning authorities are on top of this situation and

are exercising their extensive power. * * * [T]he State does not know and should not attempt

to tell local zoning authorities what is best for their respective communities in the form of new

state siting requirements.”

If the Board determines that peaker plants should be more strictly regulated or restricted,

should additional regulations or restrictions apply to currently permitted facilities or only to

new facilities and expansions?

IEA answered:

It would be patently unfair to apply any new, stricter rules or regulations to

those facilities that have already been approved through the existing permitting

process. To change those rules after the fact could have a tremendous chilling

---

28

effect on possible new investment to meet the state’s growing demand for

electricity. Such actions could also be perceived by potential investors in other

similar industries as a sign of uncertainty in Illinois public policy.

How do other states regulate or restrict peaker plants?

IEA responded that “[n]o patterns have emerged in other states in this regard . . . .

[W]hile we certainly should not ignore how other states deal with the peaker plant construction

issue, we should not place too much emphasis on those states because they are not similarly

situated in this regard.”

General Comments

IEA said that “peaker plants cannot and should not be viewed only in the context of the

environmental issues that are the crux of this inquiry,” but instead should be viewed in light of

“the broader public policy issue of how to supply safe, reliable, and affordable energy for the

citizens of our state.”

IEA continued: “Reliable electricity and affordable electricity are inextricably linked in

our new deregulated power supply industry.” Illinois must “make sure that the lights stay on

even at times of peak demand” and provide for “affordable electricity prices . . . . [T]he only

way to meet these twin goals in the near future is through the additional electricity capacity

supplied by peaker plants.”

Conclusion

IEA believes that “the record in this inquiry shows that there is no necessity for more

strict regulation of peaker plants in our state.”

PC 169—Mr. Evan L. Craig, Group Chair, Sierra Club Woods & Wetland Group

(SCW&WG), Vernon Hills

These comments supplement those that Mr. Jack Darin submitted on behalf of the

Sierra Club, Illinois Chapter. SCW&WG claimed that the “present reliance on local citizens

to be experts is extremely taxing. * * * We need more help protecting our environment, and

we expect more from our IEPA.”

SCW&WG is bothered by “[f]rivolous applications. They’re all the same. They are

usually incomplete. They are all recommended by IEPA for approval.” SCW&WG stated:

“We’ve suffered from Grandfathered Coal. And then the NOx Waiver. Those should stop.

They should not be replaced by a new loophole: synthetic minors.”

SCW&WG said that peaker plants “are compared to coal as cleaner, but we’re being

asked to accept peakers AND coal plants. Neither should be justified by comparison to the

other unless one truly replaces the other.” SCW&WG claimed that “[n]ew plants are not

---

29

needed until other measures have been exploited: Conserve, then Cogeneration on existing

plants, then Renewable Energy, then, last of all fossil plants.”

SCW&WG asserted that “[w]e need more comprehensive regulations of energy sources

that considers the aggregate and various environmental burdens of each.”

PC 170—Mr. Stephen Brick, Director, External Relations and Environmental Affairs, PG&E

PG&E stated that “the sheer number of plants being simultaneously permitted creates

an unprecedented situation. * * * It is critical that a balance be struck between the pressing

need for new sources of electricity and the desire to maintain and improve environmental

quality.”

Need for the Plants

PG&E commented:

The testimony in the record supports the need for additional sources of

generation to serve need in Illinois and elsewhere. * * * By the passage of the

state’s restructuring law, Illinois determined that the best way to encourage

additional plant development is through market mechanisms. * * * [A]

regulatory process would hamper the newly created competitive market.

Local Land Use Control

PG&E said that “[d]ecisions concerning the suitability of a proposed project should

ultimately be left to the affected jurisdiction. * * * [T]he local zoning boards can share

information and experiences, and we encourage the state to develop a process to facilitate this

sort of exchange.”

State Environmental Review

PG&E stated: “IEPA issues air permits for power projects. This is generally the most

significant state level regulatory approval needed for a power plant.” PG&E noted that

“[m]ost of the power projects permitted thus far in Illinois have been permitted as synthetic

minor sources. * * * [S]ynthetic minors are exempted from the air quality modeling

requirements of the . . . PSD program.”

PG&E stated:

Most of the proposed projects . . . have submitted applications that request

permits allowing them to emit just up to the major source threshold. * * *

[N]umerous developers have requested permits to emit NOx in the range of 245

to 249 [TPY]. * * * Because Illinois was granted a waiver under Section 182(f)

of the [CAA], the major source threshold for NOx emissions is 250 [TPY]. If

---

30

this waiver were revoked, the threshold would drop to 25 [TPY]. * * * The

182(f) waiver was granted on the presumption that NOx emission reductions

were counter-productive to attaining the ozone standard in certain regions. This

has since proven to be untrue, and states are in the process of implementing the

SIP call on the assumption that broad, regional reductions of NOx are needed to

attain the ozone standard.

PG&E suggested:

The state could revise its permitting policy, and lower the major source

threshold to 25 [TPY] for NOx. This would greatly increase the credibility of

air permits issued for peaking projects. This would provide more information to

local communities and regulators on the impacts of proposed projects on local

air quality. [IEPA] could also take care to insure that [USEPA] policies are

followed in estimating emissions from start-up and shut-down, and to make sure

that potential emissions estimates and worst case modeling includes these

emissions, when appropriate. Finally, [IEPA] could insure that particulate

emissions from proposed projects are being estimated using the required EPA

methods that include both front-half and back-half emissions.

Need for a State Administered Siting Process

PG&E stated that a siting process like SB 172 “could have benefits” but “could also

pose significant costs and delays that could threaten reliability.” PG&E stated that in most

states with “comprehensive power facility siting processes, the decisions of the state run

boards overrule local jurisdictional authority.” This is the situation in “Wisconsin, New York,

Massachusetts, Connecticut, California, and Florida, among others. This type of process has

cause[d] delays in facilities siting in a number of these states, with delays in California being

the most significant.”

PG&E stated that siting boards offer power plant developers a “venue in which local

concerns can be balanced against other issues. In some cases, siting boards decide to certify a

project over the objections of local citizens, deeming a proposed site the best alternative.”

PG&E added that, “[f]rom the perspective of home political authorities and citizens, . . . such

boards have the ability to run roughshod over local preferences.”

PG&E made a recommendation:

A process could be adopted to allow individuals or organizations with standing

in a local proceeding to appeal to a state run board for assistance. This could

occur if local authorities lack adequate resources to review project proposals, or

if citizens or developers feel that a local process has produced an inappropriate

result. The board could promulgate siting criteria in advance that would be

applied to cases brought before the board. We believe the [Board] would be the

appropriate agency in which to locate such authority.

---

31

---

32

PC 171—Ms. Freddi Greenberg, Executive Director and General Counsel, MWIPS

MWIPS is “an organization of leading competitive power suppliers with a common

interest in promoting full and fair competition in the electric industry in the Midwest.”

MWIPS claimed that the “record in this proceeding strongly supports the conclusion that the

present regulatory framework functions well and that peaker plants do not pose a unique threat

to the environment.”

Should peaker plants be more strictly regulated regarding air quality?

MWIPS stated that IEPA “testified that peaker plants comply with existing

requirements and do not threaten air quality.”

Are peaker plants unique with respect to pollution?

MWIPS claimed “[t]hey are not. Other industries emit NOx, use water, discharge

waste water and produce noise.” Peaker plants’ “impact on the environment is minimal.”

Should peaker plants be subject to siting requirements beyond local zoning?

According to MWIPS:

The answer to that question is “no.” * * * The local process allows

consideration of the issues that are unique to each situation. * * * [L]ocal

zoning boards have the ability to address the issues raised with respect to a

proposed plant. * * * To the extent that a community might desire assistance

with respect to the siting of peakers, mechanisms to provide that assistance can

be fashioned without creating mandatory statewide siting. An example would be

the establishment of a statewide clearinghouse for studies and data developed

through local siting processes.

Should any new regulations be applied retroactively to existing plants?

MWIPS maintained that “[t]he answer must be a resounding ‘no.’ A contrary result

would be inherently unfair, not only to owners of peakers, but to owners of other existing

industrial installations that also would be affected by a retroactive rule.”

How do other states regulate peaker plants?

MWIPS claimed that “various approaches are employed with no clear pattern. * * *

[D]elays in California’s process for permitting electric generation have held up the construction

of $10 billion worth of new generation.”

---

33

Air Quality

MWIPS stated:

The record in this proceeding overwhelmingly demonstrates that concerns over

the impact of peaker plants on air quality are adequately addressed through

existing regulation. [IEPA] requires each peaker applicant to conduct an air

quality analysis of ambient impacts associated with the construction and

operation of the peaker. * * * [T]hey assess whether emissions from a

proposed source in conjunction with existing sources will not contribute to a

violation of applicable NAAQS or PSD. * * * [IEPA] testified that modeling

demonstrated that the impact of permitted and proposed peaker plants will not

interfere with the ability to attain the ozone NAAQS.

MWIPS noted that IEPA also indicated that revoking the NOx waiver “would have broad

ramifications and that the waiver should not be revoked.”

Water

MWIPS said that peaker plants “have two possible impacts on water resources: water

usage and discharge of wastewater. The record has not demonstrated the need for further

regulation in either regard.”

MWIPS claimed that peaker plants “generally don’t place as much pressure on local

water supply as many other industries or activities” and that the WRAC “is in the process of

analyzing the need for new laws or regulations to govern water usage in Illinois.” MWIPS

referred to Chairman Manning’s October 25, 2000 letter to the WRAC (see Appendix G of the

Report).

Noise

According to MWIPS, IEPA’s Mr. Zak testified that “Illinois regulates noise more

strictly than other states” and that IEPA “has received no complaints regarding noise from

existing peaker plants.” MWIPS stated that “the reasonable conclusion is that no further

regulation is needed with respect to noise.”

Peaker Plants Are Needed to Protect Reserve Margins

MWIPS claimed that “[p]rojected reserve margins for the years 2001, 2002 and 2003,

taking into account capacity from existing peaker plants, but excluding capacity from proposed

peakers are estimated at 13%, 11% and 10%, respectively, [are] substantially below the

minimum industry standard.”

---

34

Peaker Plants Will Benefit the State and Local Communities

MWIPS stated that “utilities have not built new capacity for a number of years during

which there has been significant economic growth.” MWIPS continued:

[A] peaker plant is most profitable when its output is sold within the local

electric grid. * * * [T]he most reliable manner of assuring adequate electric

supply is to locate the plant within the utility transmission system where the

electricity will be consumed. There may be times, however, when the output of

a peaker plant is sold other than to meet local electric needs. * * * [A]

developer who desires to meet capacity needs in another state has every

incentive to build generation in the state where the plant’s output will be

consumed.

Conversion from Simple Cycle to Combined Cycle Involves an Additional Process

MWIPS stated that “such a conversion would increase the air emissions from the

facility to the extent of requiring a new permitting process. This process would provide an

opportunity for public participation.”

Conclusion

MWIPS concluded that the “[t]estimony before the Board establishes that the present

regulatory framework functions effectively.”

PC 172—Sierra Club, Illinois Chapter

Sierra Club is concerned about the effects the proposed plants will have on air and

water. Specifically, Sierra Club noted that the plants will consume large amounts of water,

and argued that Illinois needs to take an active role in managing water use. It proposed that

State approval should be required for any new withdrawal from surface or groundwater

sources exceeding 10,000 gallons per day.

Sierra Club is concerned that the discharges from the plants could significantly degrade

the habitat of a smaller stream by changing the flow regime. It argued that strong

antidegradation rules should be adopted to protect the streams against the discharges.

Sierra Club urged Illinois to reconsider the current exemption of new pollution sources

in the Chicago [NAA] from RACT requirements. It also recommended adopting more

protective emission standards for the plants.

Sierra Club supports a moratorium on permitting and constructing new plants, to allow

time to examine the policies that are drawing peaker plants to this State.

---

35

PC 173—Mr. Gerald Erjavec, Manager, Business Development, Indeck

Indeck argued that peaker plants do not need to be regulated more strictly than Illinois’

current air quality statutes and regulations provide. It noted that State and federal programs

tightly regulate air emissions from the plants. Indeck also argued that NOx emissions from the

plants are the lowest emitters of NOx per kWh produced, when compared to other means of

electrical production. Additionally, Indeck argued that the technologies mentioned at the

hearings, that have the potential to reduce the minimal amounts of NOx, have not been

adequately proven on a commercial-sized scale. Most developers will not risk committing to a

permit that relies on these technologies to comply.

Regarding water concerns, Indeck argued that the record shows that technology exists

to reduce the amount of fresh water the plants require. Indeck commended the Board for

referring deliberations on water use impacts to the WRAC.

Indeck argued that no further noise regulation is necessary. It relied on IEPA’s report

that it has not received a complaint regarding noise from the peaker plants that have existed

since 1965.

Indeck asserted that little to no testimony was offered that compares the impacts of

other State-regulated facilities to peaking facilities. It argued that peaker plants have impacts

that are equal to or less than many other facilities that have no additional regulatory

requirements. It believes that if additional regulation of peaker plants is considered, the State

should also increase its oversight of most other industries.

Indeck argued that peaker plants should not be subject to siting requirements beyond

applicable zoning requirements. It noted that most local zoning codes allow for uses that are

more intensive than a peaking plant in one or more zoning classifications. It asked that if any

alternate process is considered, it should be one that restricts the decision-making to facts in

the record.

Indeck argued that a period of regulatory certainty is necessary to allow the industry to

move forward. If there is any change in regulations and restrictions, those should be evenly

applied to all other industries in the State.

Indeck commented that the process of regulating peaker plants in other states varies. It

noted that other states have a process like Illinois’ process—one or two local agencies handle

the local issues and the State handles the state and federal issues.

In closing, Indeck asserted that the majority of the testimony did not address Governor

Ryan’s questions for the inquiry hearings, but instead addressed the “evils” of peaker plants.

PC 186—Mr. Ersel C. Schuster, McHenry County Board

Mr. Schuster stated that he supports the concepts and suggestions offered by Mr. Zak,

---

36

Mr. Urbaszewski, Dr. Winstanley, Ms. Turnball, Mr. Romaine, Ms. Zingle, Dr. Overbye,

and others. His comment focused on enforcement. He argued that his board does not have the

authority, technical expertise, or financial ability to ensure that the operator of a peaker plant is

complying with the regulations. He argued that local officials must have a means to effectively

enforce against these operations.

PC 187—Ms. Katherine Hodge and Ms. Karen Bernoteit, Hodge & Dwyer/IERG

IERG argued that the need for additional regulations, or lack thereof, depends on

whether the goals of air pollution control are, or are not, being achieved. To determine

whether the goals are being achieved, it contended one must look at the potential effect of

peaker plants on ambient air quality standards and PSD increments. Citing the testimony of

IEPA’s Mr. Kaleel, IERG argued that the results of IEPA modeling shows that the natural gas-

fired peaker plants permitted thus far will not threaten the NAAQS or PSD for NO2, PM 10,

SO2 and CO. Based on this testimony, and absent evidence to the contrary, IERG declared that

there is no need for additional controls.

IERG argued that the record shows that peaker plants do not pose a unique or greater

threat than other regulated facilities, regarding air pollution. It noted that Mr. Zak, noise

advisor for IEPA, testified that IEPA had not received any noise complaints regarding existing

peaker plants. IERG supports providing the WRAC with a summary of all water-related

issues; and believes that it would be inappropriate for the Board to make any recommendations

regarding water issues at this time. IERG referred to Chairman Manning’s October 25, 2000

letter to the WRAC (see Appendix G of the Report).

IERG believes that siting is the crux of the matter. It argued that local zoning should,

and can, do the job of siting peaker plants.

IERG argued that there is no need to regulate peaker plants more stringently, and the

plants do not pose a unique or greater threat than other regulated facilities.

IERG also stressed that the Board’s informational order should precisely define the

types of facilities that are the focus of any recommendations to the Governor. IERG noted that

during the course of testimony, the scope of the hearings became blurred with discussion

regarding combined cycle, co-generation, and base-load facilities. IERG argued that the focus

of the hearings was supposed to be natural gas-fired peaker plants, not all power generation

facilities. It wants the definition of peaker plants to be clear so that there are no potentially

severe and unnecessary impacts on the business community.

IERG further stated that there should not be a concern that there are too many facilities

being planned, or permitted, or constructed, relative to the demand for peak power. IERG

argued that if too many peaker plants are built, only those willing to produce the needed power

at the lowest possible cost will operate. The competitive marketplace will address the

situation.

---

37

PC 189—CCLC and Liberty Prairie Conservancy

This comment offered a list of suggestions for IEPA to follow when a peaker plant

seeks a permit, including:

•

 

IEPA should maintain, both on the Web and hard copy, data regarding existing

capacity, projected need, and detailed projected capacity throughout MAIN;

•

 

Create an additional information form to be completed by each applicant;

•

 

Post all permit applications on the Web; and

•

 

Develop new air modeling parameters based on the proposed months during which the

facilities will operate, not on annual averages.

PC 190—Mr. LaBelle, Ms. Cole, Ms. Carter, Lake County Board Members

This comment provided a number of recommendations for siting requirements,

including:

•

 

A moratorium on all pending peaker plant air quality permits until all outstanding

peaker plant permitting issues are resolved;

•

 

After current IEPA peaker permits expire, no “un-built” plants will be grandfathered;

•

 

Emissions generated during equipment start-up and shut-down must be regulated

differently to optimize emission control;

•

 

The Board or another appropriate agency should govern the regional siting process;

•

 

The impact analysis should not allow pollution outputs to be considered over a 12-

month period, but rather a three month period when plants are likely to operate;

•

 

More stringent permitting regulations if the power that the plants generate is sold

outside of Illinois;

•

 

The Board should recognize that water supply issues are a major concern and need to

be addressed in the permitting process; and

•

 

The Board should require the approved siting agency to work with the Midwest

Independent System Operator on locating generation.

---

38

PC 191—Ms. Marsha B. Winter of Zion

This comment is in the form of a letter that Ms. Winter sent to Zion Mayor Lane

Harrison and members of the Zion City Council. Ms. Winter was angry that neither the

Mayor nor members of the Zion City Council attended a peaker plant forum on November 4,

2000. Ms. Winter is also unhappy that citizens who attend Zion City Council Meetings are not

given the opportunity to address the peaker plant issue.

Ms. Winter claimed that Zion residents do not want the proposed peaker plants because

they pollute and generate noise. She also claimed that Zion does not have the capacity to

supply the proposed peaker plants with the water that they need (2 million gallons per day).

Ms. Winter stated that proposed peaker plants would violate Zion zoning codes as well.

Ms. Winter alleged that the proposed peaker plants are “hideous eyesores” that will

decrease property values. She also alleged that they will negatively impact public health.

PC 192—Mr. Ken Bentsen of Sugar Grove

Do peaker plants need to be more strictly regulated than Illinois’ current air quality statutes

and regulations provide?

Mr. Bentsen stated that peaker plants need to be more strictly regulated than current

Illinois air quality statutes and regulations provide. He said that the State must examine all of

the peaker plant applications together to determine the impact on air quality, especially air

quality in the Chicago NAA.

Mr. Bensten asserted that peaker plants pose a unique threat or a greater threat than

other State-regulated facilities with respect to groundwater. Mr. Bentsen is concerned that a

peaker plant proposed for Big Rock would use groundwater that citizens currently use. He

stated that the permitting process should be conducted with great caution and information on

the proposed peaker should be made publicly available.

Mr. Bentsen asserted that peaker plants should be subject to siting requirements beyond

local zoning: “The [p]eaker [p]lant proposed for Big Rock Township would be located right in

the middle of agricultural land and is inconsistent with the Kane County 2020 plan.” The State

should have a policy for siting peaker plants on brownfields as opposed to farmland, according

to Mr. Bentsen.

Mr. Bentsen also wants the State to impose a moratorium on granting air permits until

the NOx SIP call is completed.

PC 194—Mr. Ralph N. Schleifer of Kaneville

---

39

Mr. Schleifer maintained that peaker plants need to be more strictly regulated than

Illinois’ current air quality statutes and regulations provide. The cumulative effects of all of

the peaker plant proposals need to be considered on the Chicago ozone NAA.

Mr. Schleifer asserted that the proposed Big Rock peaker plant would compete with

residents there for use of groundwater. Mr. Schleifer asked the State to impose a moratorium

on granting air permits until the NOx SIP call is completed.

PC 195—Ms. Marci Rose of Big Rock

Ms. Rose recently moved to Big Rock from Wheaton, and did not find out about the

proposed peaker plant for Big Rock until after she and her family moved. Several of her

children have respiratory diseases (asthma, allergies, bronchitis) and they moved to Big Rock

for its clean air. Ms. Rose is “sure there is somewhere else this power plant can be put.” Ms.

Rose also attached a copy of a form letter that others filed in these proceedings.