ILLINOIS POLLUTION CONTROL BOARD

March 5, 1987

SCHROCK/A TAPPAN DIVISION,

Petitioner,

v.

)

PCB 86—205

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

Respondent.

OPINION AND ORDER OF THE BOARD (by B. Forcade):

This matter comes to the Board on a November 20, 1986,

petition for variance filed by Schrock/A Tappan Division (here-

inafter “Schrock”). The petition requests a two—year variance

from the particulate emission limitations of 35 Ill. Adm. Code

212.204, as those regulations might apply to Schrock. Schrock

asserts that the correct resolution of this matter is to deny the

variance as unnecessary, after a determination that Section

212.204 does not, in fact, apply to Schrock’s boiler when using

wood fuel. The Illinois Environmental Protection Agency (herein-

after “Agency”) filed a variance recommendation on January 8,

1987, asserting that Section 212.204 does apply to Schrock’s

facility and that Schrock’s petition •for variance should be

denied for fai~ure to demonstrate an arbitrary or unreasonable

hardship as required by Section 35 of the Environmental Protec-

tion Act (hereinafter “Act”). Hearing was held on January 22,

1987. Final briefs were filed by Schrock on February 13, 1987,

and by the Agency on February 17, 1987. On February 17, 1987,

the parties filed a joint motion for expedited consideration.

That motion is granted to the extent that the Board has attempted

to expeditiously decide this matter.

Schrock owns and operates a manufacturing plant located in

Arthur, Illinois, in the County of Moultrie where it manufactures

wooden cabinets. Schrock employs approximately 600 employees,

making it the largest single employer in Moultrie County. An 8

million BTU per hour (“8 MBTU/hr or 8 mmbtu”) Kewanee water tube

boiler is used at the plant to provide building heat during the

heating season. This boiler is capable of burning oil, gas or

wood residue. Normal firing practices are to start the boiler

with either gas or oil, and after the boiler is brought up to

operating temperature, fire the boiler with wood residue.

Approximately one—half ton of wood residue is burned per hour.

The boiler was originally installed in 1978 and was modified to

burn wood residue pursuant to a construction permit issued on

October 22, 1979. An operating permit was issued on February 19,

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1981, which expired on February 11, 1986. Schrock experienced

severe firing upset problems when firing the boiler with wood

residue. As a result, Schrock determined that it was necessary

to rebuild the boiler. Schrock applied for a construction permit

which was issued on September 3, 1985. The construction permit

authorized the reconstruction of the boiler and the removal of

the original fabric filter. The permit required that Schrock

conduct a stack test prior to applying for an operating permit.

A new mechanical particulate collection system consisting of a

multicyclone was installed to replace the fabric filter. This

multicyclone was designed to meet a particulate level of 1.0

pound per MBTU (“lbs/mmbtu”). A stack test conducted on January

21 and 22, 1986, demonstrated a particulate emission rate of

0.2775 lbs/mmbtu. Schrock applied for an operating permit on

February 11, 1986, when it submitted these stack test results

(Pet.,W1~ 1—4).

On May 7, 1986, the Agency denied the requested operating

permit. Schrock requested that the Agency formally reconsider

this denial on September 10, 1986. The Agency issued Schrock a

permit on October 17, 1986, authorizing operating with No. 2 fuel

oil or natural gas and denied operation on wood or sawdust

fuel. The stated basis for both the May 7, 1986, and October 17,

1986, denials as to wood residue is that 35 Ill. Adm. Code

212.204 establishes an emission limitation of 0.10 lbs/mmbtu and

that the boiler stack tests show that the emission rate is 0.28

lbs. of particulate matter per million BTU. On November 20,

1986, Schrock filed this petition for variance and an appeal of

the operating permit denial (PCB 86—204; no hearings are

presently scheduled in the permit appeal; a decision is presently

required by May 30, 1986). Thus, the first issue the Board must

consider is whether variance is, in fact, necessary. The Board

must decide whether the particulate emission limitations of

Section 212.204 apply to the Schrock boiler when it is fired with

sawdust fuel.

The regulation at issue in this proceeding has a long and

complicated procedural history. On April 13, 1972, the Board

first adopted regulations controlling the emission of air pollu-

tants, including particulates (R71—23). Those regulations con-

tained Rule 203(g)(l)(D), which, with minor semantic changes, is

identical to the present 35 Ill. Adm. Code 212.204. Commonwealth

Edison filed a petition to review those rules in the First

District Appellate Court. Commonwealth Edison asserted that it

was not technically feasible and economically reasonable for a

coal—fired generating source to simultaneously comply with the

particulate regulations of Rule 203(g)(l) and the sulfur dioxide

emission limitations of Rule 204. The appellate court in Common-

wealth Edison Company v. Pollution Control Board, 25 Ill. App. 3d

271, 323 N.E.2d 84 (1975), reversed the adoption of those rules

and remanded them to the Board for further consideration with

instructions either to validate them in accordance with Section

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27 of the Environmental Protection Act (Act) or to prepare proper

rules as substitutes. In its opinion, the appellate court was

“unable to state that the Board took into account the technical

feasibility of these rules,” and that “there is no evidence that

the Board took into account the economic reasonableness of these

rules for a substantial number of the generating units in this

state.” The court concluded that the regulations were not pro-

mulgated in accordance with Section 27 of the Act and were,

therefore, arbitrary and unreasonable. The court also instructed

the Board to review any new evidence for the purpose of validat-

ing or modifying the rules.

The appellate court decision was appealed by the Board to

the Illinois Supreme Court. Commonwealth Edison Company v. Pol-

lution Control Board, 72 Ill. 2d 494, 343 N.E.2d 459 (1976). The

Supreme Court, rather than reviewing the record and Board Opinion

to determine whether the Board had complied with Section 27 of

the Act in promulgating the regulations, declined “to determine

the validity of Rules 203(g)(l).. .on the basis of evidence

adduced at hearings held in 1970, 1971 and 1972 and the Board

Opinion of April 13, 1972.” Instead, it affirmed the appellate

court’s reversal and remanded for further consideration, citing

the appellate court’s reference to the “wealth of new

information” that had been gathered in the Board’s inquiry hear-

ings (R74—2 and R75—5, respectively).

On April 8, 1976, the Board entered an Order in R7l—23,

reopening the record for the purpose of validating Rule 203(g)(l)

and ordering the record in the consolidated proceedings, R74—2

and R75—5, to be incorporated into the record in R7l—23. Two

subsequent hearings were held on R75—5 and R74—2, consolidated,

in May, 1976. The Board took the position that further hearings

were unnecessary in order to comply with the Supreme Court’s

mandate which invited the Board to validate the regulations in

question in light of information gathered at the hearings held

subsequent to the original proceedings. The Board reviewed the

testimony arid exhibits in the three proceedings and, based on the

information available in these records, and taking into consider-

ation the issues identified by the courts, validated Rule

203(g)(l) on July 7, 1977.

The validation of the rule was, however, unsuccessful. On

September 27, 1978, the rule was again struck down when the Third

District Appellate Court found that the Board had failed to

consider intermittent control systems, had failed to have an

economic impact study prepared and had improperly considered a

report (the “Marder Report”) which included references to

material not of record, without affording an opportunity for

opposing viewpoints to be presented. Ashland Chemical Company v.

Pollution Control Board, (1978) 64 Ill. App. 3d 69. The Board

did not appeal that decision. The Board did, however, attempt to

appeal a similar decision in the First District, but was

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precluded from doing so by the Supreme Court which held that the

Board was estopped from such appeal because it had failed to

appeal the Ashland decision which concerned the same issue. The

Illinois State Chamber of Commerce, et al. v. The Pollution

Control Board, 67 Ill. App. 3d 839, 384 N.E.2d 922 (1978).

Consequently, in 1982, the Board opened a new docket (R82—

1), conducted hearings, received an economic impact statement and

on July 2, 1986, finally adopted regulations governing particu-

late emissions. Those regulations were not appealed and have

been in full force and effect since filed on July 9, 1986.

From this review, several factors are apparent. First, at

all times pertinent to the September 10, 1986, request for

reconsideration of denial, through the October 17, 1986, denial,

the rules were in full force and effect. Second, the actual

language at issue has not changed since originally promulgated in

1972. And finally, no court has ruled upon (or been asked to

rule upon) the issue of the validity of that regulation as

applied to wood fueled sources. Thus, the Board can properly

evaluate this issue as a matter of first impression.

Schrock’s arguments against the applicability of Section

212.204 to wood—fired sources can be distilled into three

concepts. First, the regulation is “unclear” or “ambiguous” on

its face.. Second, where a rule is ambiguous, interpretation must

rely on the intrinsic and extrinsic aids (context, word usage and

administrative record) to disclose its meaning and those aids

demonstrate the Board did not intend to regulate non—coal—fired

sources. And third, if the regulation intends to regulate non—

coal—fired sources, it is invalid as not supported by the record.

The Board rejects Schrock’s argument that Section 212.204 is

unclear or ambiguous. That section provides:

Fuel Exclusively

No person shall cause or allow the emission of

particulate matter into the atmosphere in any

one hour period from any new fuel combustion

emission source using solid fuel exclusively

to exceed 0.15 kg of particulate matter per

MW—hr of actual heat input (0.1 lbs/mmbtu)..

This section uses the words “solid fuel” to mean a fuel which is

a solid; no other meaning is possible. In other portions of Part

212, the Board has regulated combustion emission sources using

liquid fuel (Section 212.206), meaning a fuel which is a

liquid. The terms solid, liquid and gaseous are used throughout

the Board’s regulations and the Environmental Protection Act

(e.g., Section 3(d)) without further definition. They are terms

76-109

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of common knowledge and a basic element of our language. Schrock

has completely failed to show why the term solid fuel is

ambiguous or unclear. Nor has Schrock argued that there is

ambiguity regarding whether wood is a solid, as opposed to a

liquid or gaseous material.

The Board notes that Schrock’s arguments on ambiguity are

somewhat circular, Schrock argues that the language in the

Board’s adopting Opinion provides the ambiguity for the

regulatory language which then justifies looking beyond the

regulatory language to the language of the Opinion. If the

language of the regulation is clear on its face, as it is in this

proceeding, there is no justification for looking beyond it.

While the Board does not concede that the regulatory

language is unclear and ambiguous, an examination of the Opinion

results in no ambiguity either. It is not surprising that the

language of the Opinion discusses coal—fired sources at great

length. The Board’s solid fuel regulations had been challenged

successfully twice by interests utilizing large coal—fired

boilers. In such circumstances, it was appropriate for the Board

to pay particular attention in the Opinion to the effect such

regulations would have on those coal—fired boilers. The Opinion

supporting large regulatory efforts seldom discuss all aspects of

the regulatory action. Instead, they focus on discussing the

issues which have been brought to the forefront by the testimony

and exhibits in the proceeding. When clear regulatory language

generates no controversy at hearings, it generally receives

little discussion in the Opinion.

Schrock’s last argument pertaining to the applicability of

the regulations to wood—fired boilers is that Section 212.204 is

invalid if interpreted to apply to wood—fired sources in that it

lacks an adequate record to support it. Specifically, Schrock

asserts the rule is invalid unless the record contains evidence

that a substantial number of sources can comply. Commonwealth

Edison

V.

PCB, 25 Ill. App. 3d 271, 287—288, 323 N.E.2d 84

(1974). Schrock asserts that the record in this proceeding

demonstrates that there are seven wood—burning sources subject to

the rule (as the Agency interprets the rule) and that only one is

in compliance.

The validity of a regulation, as adopted, should be

determined by the record that existed when the regulation was

adopted. At the time the Board adopted Section 212.204, the

record in that proceeding (R82—l) contained the Economic Impact

Statement (“EcIS”). The EcIS evaluated the impact of the

proposed regulations on a variety of solid fuel sources in

Illinois. In particular, the EcIS evaluated the impact of the

proposed regulations on two facilities using wood or sawdust as

fuel (Lenc Smith Manufacturing Company and Ello Furniture; EcIS,

pp. 70—74). In summarizing the impact of the regulations

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(including the impact on the wood—fired facilities), the EcIS

concluded:

Because so few sources remain out—of—compli-

ance, reprotnulgation of Rules 203(g)(l)

and

202(b) is not expected to impact very notice-

ably on the Illinois economy. Hence, Board

approval of R82—l should have little effect on

the overall availability

of goods and services

to the people of the state, nor should it have

much impact on agriculture,

local government,

commerce or industry. Of course, if the

avoidance of nearly $400 million in Clean Air

Act penalties is assumed to result from re—

validation, then it

follows that all of those

sectors will experience a significant benefit

in the form of averted funding losses and the

associated secondary effects (EcIS, p. vi).

The Board found that the particulate standard was

technically feasible and economically reasonable based on a

record that evaluated 30 sources which were not then in

compliance with the proposed regulation (which included the two

wood—fired sources) (R82—l, Opinion and Order, July 2, 1986).

Schrock has presented no information from the R82—l record to

show that the regulation is not supported by the record that

existed at that time. The Board notes that at the time of the

EcIS, Schrock seems to have been in full compliance with the

regulation and, hence, was not one of the 30 sources evaluated.

Since Schrock has not demonstrated that the record in R82—1 is

inadequate to support application of the rule to wood—fired

sources, that argument is rejected by the Board.

In a similar vein, it would be difficult for the Board to

determine that Schrock is not capable of compliance in a

technically feasible and economically reasonable manner. From

February, 1981, until September, 1985, Schrock utilized a

baghouse for pollution control of particulates and its opertions

met the 0.1 lbs/mmbtu standard (Rec. p. 6). In 1985, Schrock

changed its pollution control device to a multicyclone that was

designed to meet a 1.0 lbs/ntmbtu emission limit (R. 28). In

other words, Schrock went from compliance to non—compliance by an

intentional engineering change to its pollution control

equipment. Regardless of who is responsible for the result, it

is clear that the non—compliance is due to a planning error

rather than a technological or economic restraint on Schrock’s

capacity to comply.

One aspect of Schrock’s argument deserves particular

attention. There are five wood—fired sources which are

identified in this proceeding as being subject to a 0.1 lbs/mrnbtu

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limit; a sixth is still under construction*. One source (Bally

Lynx Smith) is presumed to be in compliance based upon evaluation

of the control equipment. One source (Caradco) has demonstrated

compliance. Two sources (John Boos and Coppers) are presently

out of compliance. And, one source (Schrock) was in compliance

but is not presently in compliance (R. 144—149). The Board

cannot make any determinations from these facts about whether

compliance with a 0.1 lbs/mmbtu standard is technically feasible

or economically reasonable for wood—fired sources. The Common-

wealth Edison court did not invalidate the Board’s regulations

because a large number of sources were not in compliance; it

invalidated the Board’s regulations because the record did not

demonstrate that the standard was “capable of compliance by a

substantial number of individual units in this state.” Id. at

323 N.E. 2d 95. The record here today demonstrates that three of

the six sources (Schrock, Bally and Caradco) are “capable” of

compliance and that two sources are not in compliance but may be

capable of compliance.

In summary, the Board finds that the 0.1 lbs/mmbtu limita-

tion of Section 212.204 was valid as applied to wood—fired

sources when it was adopted in July, 1986, is valid as it exists

today and is valid as applied to Schrock’s facility..

Schrock’s second attack on the applicability of Section

212.204 involves the definition of a new source, Schrock asserts

that the definition of new source at Section 201.102 should not

apply here because the regulations were only adopted in July,

1986, and the Schrock boiler was constructed before the effective

date. Section 201.102 provides:

“New Emission Source”: any emission source,

the construction or modification of which is

commenced on or after April 14, 1972.”

However, that is not the only provision of Illinois law having

relevance. Section 3(qq) of the Act controls the distinction

between new and existing fuel combustion emission sources:

qq. “EXISTING FUEL COMBUSTION STATIONARY

EMISSION SOURCE” means any stationary

furnace, boiler, oven, or similar

equipment used for the primary purpose of

producing heat or power, of a type

capable of emitting specified air

contaminants to the atmosphere, the

construction or modification of which

commenced prior to April 13, 1972.

*

Of the 7 sources asserted in Schrock’s argument, one (Hearsch)

is not subject to the 0.1 lbs/mmbtu limit (R. 146).

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Since none of Schrock’s construction or modification activities

were commenced prior to April 13, 1972, the Board cannot override

the statutory directive and determine that Schrock is an existing

source.

Having determined that Section 212.204 applies to Schrock’s

facility, the Board must now evaluate whether a variance is

appropriate.

It is axiomatic that a variance does not grant permanent

relief from compliance with a regulatory requirement. One neces-~

sary aspect of a variance petition is that it describe how and

when the facility will come into compliance. This concept is

articulated at 35 Ill. Adm. Code 104.121(f):

A detailed description of the existing and

proposed equipment or proposed method of

control to be undertaken to achieve full

compliance with the Act and regulations,

including a time schedule for the implemen-

tation of all phases of the control program

from initiation of design to program com-

pletion and the estimated costs involved for

each phase and the total cost to achieve

compliance.

Schrock’s petition for variance requests relief for a two—year

period (with a possible one—year extension) and the proposed

method of compliance is to file, at some unspecified date in the

future, a request for site—specific regulatory relief.

The Board has repeatedly held that in the context of a

variance proceeding, an “intention” to file for site—specific

relief does not represent a compliance plan justifying long—term

variance relief. Modine .?lanufacturing v. IEPA, PCB 79—112,

August 18, 1982; Modine Manufacturing v. IEPA, PCB 85—59, May 16,

1985; Borden Chemical v. IEPA, PCB 82—82, December 5, 1985. Con-

sequently, Schrock’s “intention” to file a site—specific

regulatory proposal does not represent a compliance plan to

support a multi—year variance.

At hearing, Schrock presented evidence on various methods

that could be employed to secure compliance. Those methods

included not burning its wood residue (landfilling it instead), a

scrubber and an electrostatic precipitator. While these options

are discussed generally, it is obvious that Schrock has not

selected one of the options for implementation and has not

provided a “detailed description of the equipment” and a “time

schedule for implementation of the.. .program,” that would

represent a true compliance plan. Consequently, the Board finds

that Schrock has not presented a “compliance plan” and that long-

term variance relief must be denied.

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While lack of a compliance plan precludes the Board from

granting long—term variance relief, it does not preclude the

Board from granting short—term relief, if exceptional

circumstances are present (Lake County PublicWorks v. IEPA, PCB

86—75, August 14, 1986; see also Mendota v. IEPA, PCB 85—182,

July 11, 1986). These short—term variances are specifically for

the purpose of allowing the facility to develop an adequate

compliance plan. The Board finds that exceptional circumstances

are present in this proceeding and will evaluate granting a

short—term variance.

Schrock operated for many years in compliance with the

applicable air regulations. In order to address some internal

firing problems, Schrock sought a redesign of its system. To

accomplish this purpose, Schrock signed a contract with an

engineering firm to design a system that would meet all

applicable state and federal rules and regulations regarding air

quality (R. 37). That system, when completed, did not meet those

standards. The Board finds that Schrock had a reasonable

expectation, based on the contract, that it would be in

compliance and that the non—compliance represents a surprise that

Schrock could not reasonably foresee. This situation justifies a

short—term variance to develop a compliance plan where

environmental consequences are minimal.

Schrock has provided some preliminary modeling studies based

on its maximum potential to emit at a rate of 0.2775 lbs/mmbtu

(R. 49). Those studies indicate that the environmental impact,

for the short—term contemplated, would be minimal. The Agency

agrees that there would be no serious environmental impact

(Agency Brief, p. 6). Consequently, the Board will grant Schrock

a short—term variance in order to develop a compliance plan. The

Board will condition this variance on compliance with the 0.2775

lbs/mmbtu emission rate that was used in the modeling and grant

variance until May 31, 1987, which should allow Schrock to

continue operations through the normal close of this season’s

firing schedule (Rec., p. 2; R. 24). Should Schrock need relief

beyond the term of this variance, they must file a new variance

petition which contains an adequate compliance plan.

This Opinion constitutes the Board’s findings of facts and

conclusion of law in this matter.

ORDER

Schrock/A Tappan Division is hereby granted a variance from

35 Ill. Adm. Code 212.204 for the use of wood fuel at its

manufacturing facility in Arthur, Illinois, subject to the

following conditions:

1. This variance shall commence on the date of this Order

and shall expire May 31, 1987;

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2. During the pendency of this variance, Schrock’s emis-

sions of particulate matter into the atmosphere shall

not exceed 0.2775 lbs/mmbtu; and

3. Within forty—five days of the date of this Order,

Schrock/A Tappan Division shall execute a Certification

of Acceptance and Agreement to be bound to all terms and

conditions of this variance. Said Certification shall

be submitted to the Agency at 2200 Churchill Road,

Springfield, Illinois, 62706. The form of said

Certification shall be as follows:

CERTIFICATION

I, (We)

,

hereby

accept and agree to be bound by all terms and conditions of the

Order of the Pollution Control Board in PCB 86—205, March 5,

1987.

Petitioner

Authorized Agent

Title

Date

IT IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control

Board, hereby certify that the above Opinion and Order was

adopted on the

~~5’~Z

day of

7~7/4-k.~/.1

,

1987, by a vote

of

~

Control Board

76.115