BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
)
)
NATURAL GAS-FIRED, PEAK-LOAD
)
R01-10
ELECTRICAL POWER GENERATING
)
FACILITIES (PEAKER PLANTS)
)
COMMENTS OF THE ILLINOIS ENERGY ASSOCIATION
The Illinois Energy Association appreciates the opportunity provided by the
Board to submit final comments in the above-described proceeding. The Energy
Association is a trade organization representing investor-owned electricity and
combination electricity and natural gas companies serving customers in the state of
Illinois. The Association was founded in 1994 and consists of the following member
companies: Alliant Energy, based in Dubuque, Iowa; AmerenCIPS of Springfield;
AmerenUE, headquartered in St. Louis; Central Illinois Light Company (CILCO) of
Peoria; Commonwealth Edison Company of Chicago; Illinois Power Company, based in
Decatur; MidAmerican Energy Company, headquartered in Des Moines, Iowa; and Mt.
Carmel Public Utility Company of Mt. Carmel. The Energy Association serves as a
vehicle to develop industry positions and policies on public policy issues.
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THE GOVERNOR’S CHARGE
In his letter to Chairman Manning dated July 6, 2000, Governor Ryan charged the
Board with holding public hearings and requesting public comment on five specific
issues. Below, IEA discusses each of those five inquiries and how testimony presented at
trial responded to each.
1. Do peaker plants need to be regulated more strictly than Illinois’ other current
air quality statutes and regulations provide?
The weight of the evidence of record in this inquiry clearly provides that the
answer to the Governor’s question is “No.” Both in terms of air quality and noise
regulations, 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. In fact, because the proposed rules would establish an ozone season cap on the
tons of NO
X
that can be emitted from all sources: existing and new combustion turbines,
the same total quantity of NO
X
will be emitted regardless of whether new peaker plants
must meet more stringent requirements. We gain nothing in terms of overall NO
X
reduction by imposing stricter standards on peakers. The permitting process, which
reviews each proposed project for compliance with all applicable federal and state air
pollution control requirements, sufficiently guarantees that these plants will not pose air
quality problems for the localities in which they are operated. Also, not only are the
State’s noise standards among the most protective in the nation but Illinois regulators
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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.
2. 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?
Again, the answer to Governor Ryan’s question is “No.” These plants are an
environmentally responsible method of meeting the state’s short-term energy needs.
They do not pose a “unique” or greater threat than other types of similar facilities. If
anything, they are “unique” in that they pose less of an environmental threat than other
such facilities. This is especially true of single-cycle peaker plants that create little in the
way of nitrogen oxide 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.
3. Should new or expanding peaker plants be subject to siting requirements
beyond applicable local zoning requirements?
If one examines the recent record regarding local zoning approvals for construction
and operation of peaker plants in suburban Chicago, it is evident that the answer to this
question is also “No.” The plain fact is that local zoning authorities are on top of this
situation and are exercising their extensive power, which includes being able to delay
and/or prevent the construction of a facility in their jurisdiction. They are taking their
responsibilities very seriously and making balanced public policy decisions based on the
individual circumstances inherent in their communities. In short, those who have
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consistently argued for local control over local issues should be pleased and proud of the
performance to date of local officials who maintain the ultimate power over whether
peaker plant facilities will be sited in their jurisdictions. The State of Illinois contributes
its expertise on air quality and noise reduction issues through operation of its permitting
process but the 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.
4. 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?
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.
Owners of these facilities made important and expensive economic decisions on behalf of
themselves and their investors based on existing rules. To change those rules after the
fact could have a tremendous chilling 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 that
could cause them to look elsewhere to locate projects that might otherwise be sited here
in our state. As a matter of fact, owners and applicants for current peaker plant projects
have gone out of their way to be a positive part of the existing process, to the point of
voluntarily complying with requests for information and data that they are not required to
provide.
5. How do other states regulate or restrict peaker plants?
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While there is some testimony in the record in response to this question, no
patterns have emerged in other states in this regard. What is clear, however, is that
Illinois does have a unique set of circumstances regarding peaker plants compared to
other Midwestern states. In order to be economic, peaker plants should be constructed in
the vicinity of both a natural gas supply source and a viable connection to the high-
voltage electricity transmission system. Illinois, and specifically the Chicago area,
provides some of the best opportunities in the Midwest for the confluence of these two
necessities. That is one of the reasons why so many companies are interested in investing
in our state. The second major reason for this phenomenon is that Illinois is the only state
in our area to begin to deregulate its electricity marketplace. We are leading the way in
creating a competitive electricity market that will result in more affordable electricity
prices for our citizens. Thus, while 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.
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GENERAL COMMENTS
As the Illinois Energy Association has indicated through previous testimony
provided by its president, peaker plants cannot and should not be viewed only in the
context of the environmental issues that are the crux of this inquiry. Whether or not to
adopt rules, regulations and restrictions that would negatively impact the construction of
peaker plants in the State of Illinois must be part of the broader public policy issue of
how to supply safe, reliable, and affordable energy for the citizens of our state. We need
to maintain the same public policy balance that led to passage of the state’s landmark
electricity industry deregulation and restructuring law in 1997. We need to avoid the
kind of unbalanced public policy on power supply issues that has arisen in other states,
most notably the State of California.
Reliable electricity and affordable electricity are inextricably linked in our new
deregulated power supply industry. If we have sufficient capacity to make sure that the
lights stay on even at times of peak demand, then we will also have sufficient supply to
meet the overriding goal of deregulation – affordable electricity prices. The plain truth
for the State of Illinois is that the only way to meet these twin goals in the near future is
through the additional electricity capacity supplied by peaker plants. If we act to impede
the development of this new capacity, we will be placing ourselves and our fellow
citizens at the mercy of forces that are beyond our control or influence. In our industry
such forces usually mean the weather or equipment difficulties and we have a long
history of dealing with such unknowns. However, to voluntarily disrupt our current
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balance between nature supply and imported power could be a recipe for the type of
economic chaos seen in Southern California only a few weeks ago.
CONCLUSION
The Illinois Energy Association believes that the record in this inquiry shows that
there is no necessity for more strict regulation of peaker plants in our state. Existing
federal and state laws, rules and regulations are working properly. Local government
authorities are properly exercising their zoning powers when deciding whether to approve
construction and operation of these plants. In short, the current system is working; it is
not broken; it does not need to be fixed.
Thank you again for the opportunity to comment in this regard.
Respectfully submitted,
____________________________
James R. Monk, President
Illinois Energy Association
509 Myers Building
Springfield, IL 62701
Tel. (217) 523-7348
jim\ipcb1
11/6/00
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