01-010r092500

ILLINOIS POLLUTION CONTROL BOARD

September 25, 2000

IN THE MATTER OF:

NATURAL GAS-FIRED, PEAK-LOAD ELECTRICAL

POWER GENERATING FACILITIES (PEAKER PLANTS)

)

R01-10

HEARING OFFICER ORDER

During the hearing on August 23, 2000, the Board advised representatives of the Illinois Environmental

Protection Agency (Agency) that additional questions would be directed to the Agency. The purpose of this hearing

officer order is to provide those additional questions. The questions have arisen both from testimony provided by the

Agency and from comments and questions raised by members of the public.

The Agency is asked to file, to the extent practicable, answers to these questions so that the Board receives

the filing by October 3, 2000. Because of time constraints, the Agency may file its answers with the Board by fax at

(312) 814-3669 or e-mail at clerk@ipcb.state.il.us, to be followed by the hard copy filing. The Board will promptly

post on its Web site (www.ipcb.state.il.us) any answers that the Agency files.

The Agency is encouraged to file any answers it may have prepared by October 3, even if it has not by then

prepared written responses to all of the questions set forth below. The Agency should be prepared, however, to

address all of the questions during the October 5 and 6, 2000 hearing dates in Springfield. Others, of course, are free

to address these questions at hearing or in written public comment.

Please note that the term “peaker plant” in the questions below refers to a facility that uses one or more

simple cycle, natural gas-fired turbines to produce electricity. The term “combined cycle plant” refers to a facility

that uses hot exhaust gases discharged from a natural gas-fired turbine to generate steam which in turn is used to

drive a steam turbine generator to produce electricity.

Questions to the Agency

Please explain whether existing air pollution control laws and regulations, including Prevention of

Significant Deterioration (PSD), New Source Review (NSR), and New Source Performance Standards

(NSPS), address the following concerns raised at hearing with respect to air emissions from existing and

proposed peaker plants:

peaker plant sitings near residential areas or schools;

the clustering of peaker plants;

peaker plants emitting up to annual limits on pollutants during the ozone season; and

peaker plants emitting greater amounts of pollutants during frequent start-ups and shut-downs.

Please address whether any localized impacts (

e.g.

, potentially exposing local residents to greater amounts

of air pollutants) present a health concern with respect to air emissions from existing and proposed peaker

plants sited or to be sited near residential areas or schools.

In permits issued to peaker plants, please explain whether the Agency has limited, other than on an annual

basis, the amounts of pollutants that may be emitted, the number of hours during which the plants may

operate, and the amounts of fuel that the plants may consume (

e.g.

, daily, weekly, monthly, or seasonal

limits). Please explain how the Agency establishes permit limits on pollutant emission amounts, hours of

operation, and fuel consumption for peaker plants. In addition, please explain under what circumstances

the Agency would not impose a permit condition limiting the number of hours during which a peaker plant

may operate.

Please explain whether the Agency limits in air permits the types of fuel that a peaker plant may use. Please

explain whether the emission limits in an air permit for a peaker plant would vary depending upon the type

of fuel used.

Please explain what notification requirements apply to the Agency and the applicant when an air permit

application for a peaker plant is submitted. Likewise, please explain the notification requirements when the

Agency holds hearings on such permit applications. In the Agency’s response to these questions, please

address whether notice is provided to residents, schools, and any aeronautical authorities, such as the

Federal Aviation Administration, the Illinois Department of Transportation, and local airports. Also, please

describe the distance from the proposed site within which one must be located to be entitled to notice.

Please explain whether the Agency expects peaker plants to emit, during start-up and shut-down, greater

amounts of air pollutants than at other times of operation. Please address whether Illinois air permits for

peaker plants should include special provisions to control air emissions during start-up and shut-down. In

addition, please explain whether the Agency expects peaker plants to emit greater amounts of air pollutants

at lower load levels. Please address whether Illinois air permits for peaker plants should include special

provisions to control air emissions during lower load operations.

Please comment on whether the United States Environmental Protection Agency (USEPA) should revoke

the nitrogen oxides (NO

) waiver with respect to Illinois. In the Agency’s response, please address the

following:

the implications for NO

emitters, including existing and proposed peaker plants, if USEPA revokes

the NO

waiver;

the Ozone Transport Assessment Group (OTAG) findings on NO

and USEPA’s NO

State

Implementation Plan (SIP) call; and

any relationship between the NO

waiver and USEPA’s cap on NO

emissions for Illinois under the

SIP call, including any anticipated impact on the cap if USEPA revokes the NO

waiver.

In the rulemaking pending before the Board docketed as R01-9, Proposed New 35 Ill. Adm. Code 217.

Subpart W, The NO

Trading Program for Electrical Generating Units, and Amendments to 35 Ill. Adm.

Code 211 and 217, the Agency has proposed a NO

emissions budget of 30,701 tons per ozone season for

electrical generating units (EGUs), based on USEPA’s NO

emissions cap for Illinois under the SIP call.

Please describe how the NO

budget would impact existing and proposed peaker plants. In

addition, please explain what this impact would be if all of those peaker plants converted to

combined cycle plants operating all year.

Would the Agency deny a construction permit to a peaker plant applicant because the portion of

the NO

budget reserved for new sources has been purchased, or would the applicant simply be

left to purchase allowances on the market?

Please describe any anticipated impact on allowance allocations in Illinois if USEPA revokes

Illinois’ NO

waiver.

Please explain what would constitute the Lowest Achievable Emission Rate (LAER) for peaker plants and

for combined cycle plants. In the Agency’s response, please address the control technology in Standard

Power and Light’s draft permit application, including its technical feasibility and economic reasonableness.

See Standard Power and Light Exhibit 1.

10.

Please explain whether any peaker plants currently proposed in Illinois plan to use combustion modification

techniques, such as the dry-low NO

burner system, to reduce emissions. Please provide any information

that the Agency may have on the capital cost of adding such a modification, including the capital cost of

adding a dry-low NO

burner system. Also, please provide any information that the Agency may have on

how much it would cost a typical peaker plant to demonstrate Best Available Control Technology (BACT).

11.

Robert J. Kaleel of the Agency stated that results of photochemical modeling indicate that ozone increases in

the range of one to four parts per billion (ppb) can be expected when all peaker plants in Illinois operate

simultaneously on high ozone days. See Agency Group Exhibit 1. Please describe all of the parameters used

in the Agency’s modeling, including the ambient conditions, the inventory of emission sources, and the

characteristics of those emission sources. In addition, please explain how requiring BACT for all existing

and proposed peaker plants would affect the modeled ozone results.

12.

Please describe all of the parameters used in the dispersion modeling that has been conducted for peaker

plants and submitted to the Agency. In the Agency’s response, please address whether this modeling

accounts for the temperature and speed of the air emissions. Also, please explain whether the Agency has

or will have actual monitoring data to verify the results of the dispersion modeling.

13.

With respect to existing and proposed peaker plants and combined cycle plants in Illinois, please comment

on the discussion of BACT, health risk assessments, and “other permitting considerations” in the California

Environmental Protection Agency Air Resources Board “Guidance for Power Plant Siting and Best

Available Control Technology,” dated July 22, 1999. See McCarthy Exhibit 2.

14.

Please comment on the technical feasibility and economic reasonableness of using the XONON

emission

control technology to reduce NO

emissions from existing and proposed peaker plants and combined cycle

plants.

15.

The Agency stated that it is, as a matter of administrative discretion, requiring peaker plant applicants for

air permits to conduct certain air modeling. Please explain what actions the Agency has taken or might

take with respect to such an applicant based on these modeling results.

16.

Please clarify whether air emissions from all existing and proposed peaker plants would impair the State’s

ability to comply with applicable air quality standards.

17.

Please describe the air permitting requirements with which the Agency anticipates an operating peaker

plant would have to comply to convert to a combined cycle plant, both in attainment and nonattainment

areas for ozone.

Please comment on whether the Agency would expect a combined cycle plant to be used to meet

peak electricity demands.

Please describe how the Agency’s responses to questions 1 and 2 above would differ for existing

and proposed combined cycle plants.

Please describe how the Agency’s responses to question 17(b) above would differ if all existing and

proposed peaker plants converted to combined cycle plants operating all year.

18.

Please provide an updated list of all existing (built and under construction) and proposed (permitted and

permit applications under review) combined cycle plants in Illinois. Please include the following

information in the listing: permit number and expiration date; company name; street address, including

city/town and county; type of plant (

i.e.

, merchant plant; utility or private company); attainment or

nonattainment area for ozone; type of fuel; turbine manufacturer and model number; number of turbines;

type of turbines; total megawatts; NO

control technology; NO

emission rate (parts per million (ppm) and

pounds per million British Thermal Units (lb/mmbtu)); total permitted annual NO

(tons/year) and any

other time period-based emission limit; limits on hours of operation and fuel consumption; and applicable

air pollution control regulations.

19.

Please explain whether the Agency has received any air permit applications to add peaker units at any

existing sources.

20.

Please provide an updated list of all existing (built and under construction) and proposed (permitted and

permit applications under review) peaker plants in Illinois. Please include the following information in the

listing: permit number and expiration date; company name; street address, including city/town and

county; type of plant (

i.e.

, merchant plant; utility or private company); attainment or nonattainment area

for ozone; type of fuel; turbine manufacturer and model number; number of turbines; type of turbines; total

megawatts; NO

control technology; NO

emission rate (ppm and lb/mmbtu); total permitted annual NO

(tons/year) and any other time period-based emission limit; limits on hours of operation and fuel

consumption; applicable air pollution control regulations.

21.

Please comment on concerns raised at hearing regarding the adequacy of the Board’s existing numeric noise

standards to address peaker plants, including the issues of low frequency noise (

i.e.

, vibrations), numeric

noise standards based on area background levels of noise, and nighttime noise standards applying all

weekend.

22.

Other than staffing and resource issues, please describe any problems the Agency would anticipate if

demonstrating compliance with numeric noise standards was made a part of the air permitting process.

23.

For plants identified in response to questions 18 and 20 above, please identify those facilities which have

received or applied with the Agency for National Pollutant Discharge Elimination System (NPDES) or State

water permits. For these plants, please provide any information that the Agency may have on the

characteristics and volume of wastewater being or to be discharged and the type of permit issued or

requested.

24.

Please explain whether existing laws and regulations address the storage, handling, and potential release of

hazardous chemicals (such as hydrogen) and back-up fuel at existing and proposed peaker plants.

IT IS SO ORDERED.

____________________________

Amy L. Jackson

Hearing Officer

Illinois Pollution Control Board

600 South Second Street, Suite 402

Springfield, Illinois 62704

(217) 524-8507

jacksona@ipcb.state.il.us