TO:
NOTICE OF FILING
R
02-21
STATE OF ILLINOIS
Pollution
Control
Board
(Site Specific Rulemaking)
Via Federal Express
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph, Suite 11-500
Chicago, IL
60601-3218
Via Federal Express
John Knittle, Hearing Officer
Illinois Pollution Control Board
1717 Philo Road,
Suite
25
Urbana,
IL 61802
Via Federal Express
Rachel L. Doctors
Assistant Counsel
Division ofLegal Counsel
Illinois Environmental Protection Agency
1021
North Grand Avenue East
P. 0.
Box
19276
Springfield, IL
62794-9276
PLEASE TAKE NOTICE that on this
10th
day ofOctober,
2002,
Petitioner, Central
Illinois
Light
Company, filed an
original
and
nine (9)
copies ofthe attached Testimony of
Sandy
Isbell
and
Testimony of Mark Davis,
a copy
of each of which
is
herewith served
upon you.
Jon S. Faletto
Diana M. Jagiella
Howard & Howard Attorneys, P.C.
211
Fulton Street, Suite 600
Peoria, IL
61602-1350
(309) 672-1483
sw;G:\C\CILCO\General\AirPerm\PCB\DOCS\not of fihing5.doc
~QA44/1A~I
A)
‘u~L~’
Diana M. Ja~iella(,)
BEFORE THE ILLINOIS POLLUTION CONTROL BOA~ECE~VED
CLERK’S
OFFICE
IN THE MATTER OF
THE PROPOSAL OF:
CENTRAL ILLINOIS LIGHT COMPANY
FOR A SITE SPECIFIC RULEMAKING
AMENDING
35
ILL. ADM. CODE
§
214.561.
)
)
)
)
ac-I
I 1200?
THIS FILING IS SUBMITTED ON RECYCLED PAPER
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
CLERK’S
OFFTCE
IN THE MATTER OF
THE PROPOSAL OF:
)
ULI
I I
2002
CENTRAL ILLINOIS LIGHT COMPANY
)
R 02-2 1
FOR A SITE SPECIFIC RULEMAKING
)
STATE OF ILLINOIS
AMENDING 35 ILL. ADM. CODE
§
214.561.
)
(Site Specific Ru~êA
W~g~0h1tf0I
Board
Testimony of Sandy Isbell
Central Illinois Light Company
October 11, 2002
WRITTEN TESTIMONY OF SANDY ISBELL
This
testimony
is
submitted
pursuant
to
35
Iii.
Adm.
Code
§
103.205
and
the
August 21,
2002 Hearing Officer Order entered in this matter.
I, Sandy Isbell, being duly
sworn upon oath, state as follows:
Professional Experience and Employment
My name
is
Sandy
Isbell and
my business address
is
300
Liberty
Street, Peoria,
Illinois
61602.
I have been employed by the Central Illinois
Light Company (“CILCO”)
for twenty-four (24) years.
I
began
my
employment
with
CILCO
in
the
Marketing
Department.
I
subsequently held positions as Traffic Administrator, Senior Fuel Administrator, and Fuel
Analyst.
I
am
currently
Fuel
Analyst/Safety
for
E.D.
Edwards
Station
(hereafter
“Edwards
Station”
or
“Edwards”).
I
report
to
Ron
Markel,
Material
Handling
Team
Leader.
My primary responsibilities
are to procure all
energy producing fuels (excluding
natural gas) and the transportation of these
fuels for Edwards Station.
I have worked in
the fuels
area for over seventeen (17) years.
CILCO’s
fuel costs have been significantly lower as a result ofthe variance relief
granted by the Pollution Control Board
in
1999.
CILCO’s fuel costs
will continue to be
significantly lower if the relief is granted on a permanent basis.
Cost Savings Associated with Variance Operational Flexibility
Prior
to
the
variance,
to
maintain
compliance
with
the
1.8
lb/mmBtu
limit
applicable
to
Boiler
No.
2,
CILCO
historically
purchased
expensive,
low-sulfur coal.
The variance relief provided
CILCO
the
flexibility
to
utilize
blended
coal and/or mid-
range
sulfur
coals
in
Boiler
No.
2.
This
flexibility
resulted in
fuel
cost
savings
and
2
promotes purchase and use of Illinois coal.
Based on
spot market prices, CILCO
saves a
minimum of $3
million annually through lower fuel costs.
Even using very conservative
estimates of fuel
cost
savings
based on
historical and
potential
contract prices,
CILCO
saves
a minimum of $1,298,111
annually.
CILCO
also
combusts
coal from
the Exxon
Mine
in
Illinois.
Absent the variance
relief,
CILCO
would
not
be
able to
purchase this
Illinois coal.
CILCO
also
saves
“administrative”
costs
as
a
result
of the
variance relief.
In
addition to
the actual fuel
cost penalty
in burning only
low-sulfur coal in
Boiler No.
2,
there
are
increased
ancillary
costs
associated
with
exclusive
use of low-sulfur
coal
in
Boiler No.
2.
These
ancillary
costs
include
higher operating
costs
due
to
the
need
to
maintain
separate
coal
stockpiles
for only
low-sulfur coal
(active
and reserve),
and
the
costs of separate coal handling
equipment for the low-sulfur coal.
In addition, there are
increased costs associated with negotiating and monitoring coal supply and transportation
contracts for the low-sulfur coal.
CILCO
also
saves money through
greater use of Boiler
No.
2
which
is
a more
efficientboiler.
The
1998 net heat rates forthe threeboilers are:
Boiler No.
1
=
10,643
Btu/kwh
Boiler No. 2=
9,806 Btulkwh
Boiler No. 3
=
9,862 Btu/kwh
The lower the heat rate, the more efficient the boiler.
This means it takes less coal
in
a more efficient boiler to
produce the
same kilowatt hours
in
a
less
efficient boiler.
While
the
difference
in
heat
rate
between
the
three
boilers
may
seem
small,
on
an
annualized basis,
Boiler
No.
2’s lower heat rate
translates
into
significant savings.
For
example, producing 1.25
x
1 ~
kilowatt hours in each boiler would require:
3
608,421
tons of coal in Boiler No.
1
560,573
tons of coal in Boiler No.
2
563,775 tons ofcoal in Boiler No. 3
Thus,
producing the same amount of energy requires 47,848
more tons of coal in
Boiler No.
1
than in
Boiler
No.
2,
and
3,202
more tons of coal in Boiler
No.
3
than in
Boiler No.
2.
Assuming the same type of coal was burned
in each boiler at $28.00
per
ton,
the
savings
from
using
Boiler
No.
2
over
Boiler
No.
3
would
be
$89,656.
The
savings
from using Boiler No. 2 over Boiler No.
1
would be $1,339,744.
The benefits of using
a more efficient boiler can
also
be
illustrated by
looking at
the kilowatt hours produced in each boiler from
the same
amount of coal. Boiler No.
2
will
produce more
kilowatt
hours
than Boiler
No.
1
or
3
from
the
same
amount
and
heating value of coal,
i.e.
10,900 Btu/lb.
On an annual basis,
Boiler No.
2
can produce
significantly more kilowatt hours from the same amount ofcoal.
For example, combusting
1
million
tons of the
same coal
in
each boiler would
produce the following kilowatt hours:
BoilerNo.
1
2.O5xlO9kwh
Boiler No.
2
2.23 x io~
kwh
Boiler No.
3
2.21 x iü~
kwh
Thus, the use ofthe more efficient Boiler No. 2 would produce 12.6
x i05 (i.e.
12.6
million kilowatt
hours)
more
kilowatt
hours
from
the
same
amount of coal
than
Boiler No. 3.
Prior to the variance, Boiler No.
2 had
the highest generating cost because ofthe
higher cost for low-sulfur coal needed to
meet the
1.8
lb/mmBtulhr SO2 emission limit.
4
Coal Cost Savings Associated with Operational Flexibility
References
in my testimony to the term “low-sulfur coal” means coal with a sulfur
content low enough to
ensure compliance with the
1.8 lb/mmBtu SO2
emission limit of
§
214.141
which
applied to Boiler No.
2 before issuance ofthe variance.
The cost
and availability oflow-sulfur coal is
critical to development ofFuel/SO2
Emission strategies.
The cost oflow-sulfur coal is traditionally quite high,
exceeding $26
per ton prior to
transportation.
CILCO
historically purchased low-sulfur coal for Boiler
No.
2 from the Rend Lake Coal Mine
in Southern Illinois to
ensure compliance with
the
1.8
lb/mmBtu
SO2
emission limit under
§
214.141.
Rend Lake low-sulfur coal
has
not
been
available
since the
year 2000.
Since
this
occurred,
CILCO
has
been unable
to
purchase low-sulfur Illinois
coal.
Due to
its higher sulfur content,
Illinois
coal currently
available in the marketplace cannot be combusted in Boiler No.
2 in compliance with the
1.8
lb/nimBtu
SO2
emission limit
imposed by
§
214.141.
As
a
result,
low-sulfur
coal
requirements would have to
be met from coal sources outside ofIllinois.
Although
low-sulfur coal
is
available
in
several
U.S.
locations,
due
to
freight
costs
and
combustion
characteristics,
it
is
currently
only
economically
feasible
for
CILCO to purchase low-sulfur coal from Southern Indiana.
Based on my research, if the
variance were not in place, CILCO would currently pay approximately $26.49 per ton for
this
coal
and
an
additional
$9.56
per ton
for transportation for a total
delivered
cost
of
$36.05 per ton.
Based on the variance, CILCO
has effectively pursued fuel strategy scenarios that
allow CILCO
to
achieve significant fuel
cost
savings
by
blending
various
coals
along
with
the
purchase
of
SO2
allowances
as
needed.
In
2001,
CILCO
implemented
the
following fuel strategy:
5
BOILER
2001
FUEL STRATEGY
Boiler No.
1
Blend
of:
80
Consol
Rend Lake coal (sulfur content of 2.4
lb/mmBtu)
and
20
Exxon Monterey coal (sulfur content of
1.77
lb/mrnBtu).
Boiler No. 2
Blend
of:
50
Consol
Rend
Lake
coal
and
50
Exxon
Monterey coal.
Boiler No.
3
Blend
of:
80
Consol
Rend
Lake
coal
and
20
Turns
Elkhart
coal (sulfur content of 5.6
lb/mmBtu).
In May 2001
this
fuel source was switched to
a blend of
75
Consol Rend
Lake coal and
25
Exxon Monterey coal.
In
2001,
the
spot
market
cost
for
low-sulfur
coal
ranged
from
approximately
$25.65/ton
to
$73.96/ton.
In
2002,
CILCO
has
obtained
coal
from
four
sources.
These
fuel
sources
guarantee by contract to
provide coal with sulfur content ranging from
1.2
lb/mnifBtu to
5.9
lb/mni/Btu.
The majority ofcoal purchased by CILCO in 2002 has contained a sulfur
content averaging
greater than
1.91
lb/mmBtu.
The average cost
for these coals ranges
from
$25.65/ton
to $43.07/ton.
In 2002, CILCO has implemented the following fuel strategy:
BOILER
2001 FUEL STRATEGY
Boiler No.
1
First
quarter tried 100
Colorado coal
(sulfur content of 1.2
lb/mniBtu).
Subsequently
tried
100
Wabash
coal
(sulfur
content of2.8
lb/mmBtu).
Effective 0/1/02 100
Turns coal
(sulfurcontent of
5.9
lb/mmBtu.)
Boiler No.
2
Blend of: 60
Colorado coal (1.2 lb/mmBtu) and 40
Exxon
Monterey coal 1(sulfur content of 1.77
lb/mmBtu)
Effective
9/02
Blend
of:
60
Wabash
coal
(sulfur
content
2.8
lb/mmBtu) and 40
Exxon Monterey coal (sulfur content of
1.77 lb/mniBtu.)
Boiler No.
3
Blend
of:
60
Colorado coal
(sulfur content
1.2
lb/mrnBtu)
and
40
Exxon
Monterey
coal
(sulfur
content
of
1.77
lb/mmBtu.)
‘It should be noted that Exxon cannot guarantee 1.77 lb/minBtu.
Thus, this coal supply is not considered
coal that would comply with the
1.8
lb/mmfltu
SO2 limit of
§
214.141.
6
During 2002,
the spot market
cost
for low-sulfur coal ranged from
$45.69/ton
to
$52.06/ton.
Without
the
variance,
CILCO
would
not
have
been able
to
burn
the Exxon
or
higher sulfur coal.
I
prepared
the
charts
below
which
illustrate
the
minimum
fuel
cost
savings
associated with the relief.
The figures in the chart are based on:
•
An assumed annual purchase of294,000
tons of coal; and
•
Per ton coal costs based on actual prices currently paid by CILCO
and per
ton estimated contractprices for the closest source oflow-sulfur coal in Southern Indiana.
Based
on
this
comparison,
it
costs
CILCO
a
minimum
of
$1,298,111
more
annually
to fuel Boiler No.
2
with low-sulfur coal than it does to
fuel Boiler No.
2
with
blended coal.
Coal Type
Cost Per Ton
(including
6’,4
tax and freight)
Total Annual
Fuel Costs
Excess
Fuel Costs
Illinois Mid
Sulfur
(Exxon)
$25.30
$7,455,328
N/A
Indiana Low Sulfur (1.2)
$36.05
$8,753,439
$1,298,111
These savings
are
even more dramatic when compared
to
other sources of low-
sulfur coal as illustrated in the chart below.
Coal Type
Cost Per Ton
(including
6’h
tax and freight)
Total Annual
Fuel Costs
Excess
Fuel Costs
Central Appalachian (1.2
lb/mniBtu)
$47.02
$11,417,107
$3,961,779
Colorado (1.2
lb/mniBtu)
$38.06
$10,501,699
$3,046,371
7
This
fuel cost illustration
is
based on published
spot
market price for the Central
Appalachian coal and my knowledge regarding contract pricing for the Colorado coal at
the time it was available.
The Illinois
Environmental
Protection
Agency
(IEPA) has historically
estimated
the potential
cost
savings
in
the range
of $1.5
million.
The cost
savings
estimates by
CILCO and IEPA which rely on various published prices are both reasonable approaches.
However, based
on the actual
coal prices CILCO
has been able to
negotiate
in
the past
and the contract fuel cost CILCO
expects to negotiate, the actual coal cost savings will be
between a minimum of $1,298,111 up to
$3 million.
I am responsible for providing fuel cost
information for development of an
Acid
Rain strategy for compliance with the Federal Clean Air Act.
CILCO’s Edwards Station
is currently
allotted 22,273
SO2
allowances
annually.
The cost for additional
allowances
has ranged from $116.00
to
$220.00 since January
1, 2000.
As
illustrated,
to
date
it
has been
cheaper to
buy
SO2
allowances
and
operate
under the terms ofthe variance relief than to purchase low-sulfur coal.
Low-sulfur coal is
currently
very
expensive
and
supplies
are
limited.
Unless
low-sulfur
coal
becomes
available in Illinois
in reliable quantities and
quality and
at a cost-effective price, which
is
unlikely,
it will continue
to
be
more cost
effective
to
purchase
SO2
allowances
and
operate
Edwards Station in
compliance
with the
SO2
emission limits
established by
the
variance.
sw;g:\c\cilco\general\airperm\pcb\docs\isbell test.doc
8
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF THE PROPOSAL OF:
CENTRAL ILLINOIS LIGHT COMPANY
)
FOR A SITE SPECIFIC RULEMAKING
)
AMENDING 35 ILL. ADM. CODE
§
214.561.
)
R 02-21
(Site Specific Rulemaking)
CERTIFICATE OF SERVICE
I,
the
undersigned,
hereby
certif~’that
I
have
served the attached
Testimony of
Sandy Isbell upon the following persons:
Via Federal Express
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph, Suite 11-500
Chicago, IL
60601-3218
Via Federal Express
John Knittle, Hearing Officer
Illinois Pollution Control Board
1717 Philo Road,
Suite 25
Urbana, IL 61802
Dated:
October 10, 2002
Jon S. Faletto
Diana M. Jagiella
Howard & Howard Attorneys, P.C.
211 Fulton Street, Suite 600
Peoria, IL
6 1602-1350
(309)
672-1483
~
Via Federal Express
Rachel L. Doctors
Assistant Counsel
Division ofLegal Counsel
Illinois Environmental Protection Agency
1021
North GrandAvenue East
P. 0. Box
19276
Springfield, IL
62794-9276
)
ilA
~
Diana M. Jagiella()
~
THIS FILING IS SUBMITTED ON RECYCLED PAPER
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
RECE~VED
CLERK’S
OFFT(’F
IN THE MATTER OF
THE PROPOSAL OF:
)
OCT
1
Ti
2002
CENTRAL ILLINOIS LIGHT COMPANY
)
R 02-2 1
FOR A SITE SPECIFIC RULEMAKING
)
STATE OF ILLINOIS
AMENDING
35
ILL. ADM. CODE
§
214.561.
)
(Site Specific Ru1en1a~w~n
Control
Board
Testimony ofMark Davis
Central Illinois Light Company
October 11,2002
WRITTEN
TESTIMONY OF MARK DAVIS
This
testimony
is
submitted
pursuant
to
35
Ill.
Adm.
Code
§
.103.205
and
the
August 21, 2002
Hearing Officer Order entered in this matter.
I, Mark Davis, being duly
sworn upon oath, state as follows:
Education and Employment
I
have been
employed
by the Central
Illinois
Light
Company (“CILCO”) since
August 14,
2000.
I am currently responsible for Environmental Services and Compliance
for CILCO’s
E.D. Edwards
Station.
I have held this
position since August 2000.
My
responsibilities
include
development
and
implementation
of
environmental
related
programs and ensuring compliance with environmental laws and regulations.
I have a B.S. degree in Geological
Sciences from Bradley University.
Background
CILCO
is
an electric
and natural
gas utility located in Central
Illinois.
CILCO’s
electric
production
facilities
consist
of two
generating
stations
--
the
Duck
Creek
Generating
Station
near Canton,
Illinois
and
the E.D.
Edwards
Station
in
Bartonville,
Illinois
(“Edwards or Edwards
Station”).
CILCO
provides
electric
and gas service
to
approximately 172,890
residential customers
and
to
170
industrial
customers.
CILCO’s
electric and gas service territory includes multiple counties in
Central Illinois.
Edwards Station
is
located on
the Illinois River in the Peoria major metropolitan
area.
One hundred
thirteen
(113) people
are
employed
at
Edwards
Station
which
is
staffed twenty-four (24) hours per
day,
seven
(7)
days per week.
The Edwards Station
consists
of
three
boilers
and
attendant
generating
units
(referred
to
as
“Boilers”
or
“Units”).
All three Units
are
coal
fired.
Units
1
and
2
discharge through
a
common
stack,
503
feet
in
height.
Unit
3
discharges
through
a
separate
stack,
also
503
feet in
height.
The
combustion
exhaust
gases
from
all
three
boilers
are
ducted
through
electrostatic
precipitators
which
are
designed
to
remove
particulate
matter
prior
to
releasing the exhaust gases through the stacks.
In recent years,
CILCO has installed state
of the art barriers on all
three boilers to
reduce the emissions of nitrogen oxides (NOx);
equipment
commonly
referred
to
as
“low
NOx
burners.”
In
addition,
CILCO
has
installed and
is operating continuous emission monitoring
systems (“CEMS”) on all three
Units
which
directly
measure
sulfur
dioxide
(SO2),
NOx,
carbon
dioxide
(CO2),
and
opacity
contained in
the
exhaust gases.
The CEMS
are required by
the
federal
“Acid
Deposition
Control”
program
developed
under
the
Clean Air
Act
(also
known
as the
“Acid Rain” regulatory program).
Applicable S02 Emission Regulatory Limits
Boiler
Nos.
1
and
3
have
historically
been
subject
to
a
sulfur dioxide
(SO2)
emission
limit of 6.6
lb/mmBtu
pursuant to
35
Ill.
Adm.
Code
§
2 14.561.
Boiler No.
2
has
been subject to
a
SO2
emission
limit of 1.8
lb/mniBtu pursuant to 35
Ill.
Adm.
Code
§
214.141.
Emissions
from
all three
boilers collectively
are
subject to
an overall plant-
wide SO2
emission
limit of 34,613 lbs/hr established to
ensure protection of the National
Ambient Air
Quality
Standards (“NAAQS”)
for SO2
under 35
Ill.
Adm.
Code
§
2 14.561.
These standards
are summarized in the chart below:
2
REGULATORY LIMITS ON
SO2
EMISSIONS
E.D. EDWARDS STATION
Emission
Unit
Applicable
SO2 Emission
Limitation
3/20/95
Operating
Permit Conditions
Applicable
Regulations
BoilerNo.1
6.6lb/mmBtu
l.a.
35IAC~2l4.561
BoilerNo.2
1.8lb/mmBtu
l.b.
35IAC~214.14l
Boiler No. 3
6.6 lb/mmBtu
l.a.
35
IAC
§
214.561
Plantwide
34,613
lbs/hr
24-hour average basis
None
.
35 IAC
§
2 14.561
On April
15,
1999,
the
Illinois
Pollution
Control
Board
(“Board”)
entered
an
Order granting CILCO a variance (“variance”) from the 1.8
lb/mmBtu SO2
emission limit
applicable
to
Boiler
No.
2
for five
years
beginning
January
1,
1999
through
July
31,
2003.
Under the conditions ofthe variance, CILCO was granted an average station-wide
SO2 emission limit of4.71
lb/mmBtu over all three boilers with a maximum
SO2 limit of
6.6
lb/mniBtu for each boiler.
The variance further provided that Boiler No.
2
was not
required to
meet the
1.8
lb/mmBtu
SO2 emission limit established by
35
Ill.
Adm.
Code
§
214.141.
CILCO’s
obligation
to
comply
with
all
other
applicable
SO2
emission
limitations
remained unchanged. CILCO
remained subject to
the
facility-wide
limit of
34,613 lbs/hr.
SO2 for all three boilers imposed under
35
Ill. Adm. Code
§
214.561.
The Board’s Order granting the variance
also
provided a mechanism for CILCO
to
obtain
this relief on
a permanent basis.
The
Order specified
that CILCO
notify the
Illinois
Environmental
Protection
Agency
(“IEPA”)
by
January
31,
2002
if
CILCO
decided
to pursue permanent site specific relief consistent with the variance.
The Order
further required
CILCO
file a
petition for such
relief with
the
Board by
February
28,
2002.
3
By correspondence
dated January
25,
2002,
CILCO notified IEPA ofits
intention
to
pursue permanent site specific
relief
from
the
1.8
lb/mmBtu
SO2
limit of
§
214.141.
On February
28,
2002,
CILCO
filed a
Petition
for Adjusted
Standard.
Pursuant
to
the
Board’s Order of March
21,
2002,
and
subsequent
status
conferences
with
the Hearing
Officer,
CILCO
filed a Petition for Site Specific Rulemaking to
obtain
permanent relief
consistent with the variance.
The Benefits of Operational Flexibility
CILCO initially elected to request relief from the 1.8 lb/mmBtu limit applicable to
Unit
2 through
a Petition for Variance
after recognizing that relief from
the limit would
reduce the economic hardship
caused by purchasing more expensive low-sulfur coal and
allow
increased
purchases
of Illinois
coal with
no
adverse
impact
to
the
environment.
Through its
variance petition, CILCO
obtained an average station-wide emission limit of
4.71
lb/mmBtu over
all
three boilers,
not
to
exceed
6.6
lb/mmBtu
in
any
one
boiler.
CILCO was therefore able to
increase the
SO2
emissions
from
Boiler No.
2 by reducing
the
SO2
emissions
from
Boiler
Nos.
1
and
3.
CILCO’s
obligation to
comply
with
all
other SO2 emission limitations remained unchanged.
CILCO has remained subject to and
in compliance
with the
34,613
lbs/hr
SO2
limit imposed on all
three Units under 35
Ill.
Adm.
Code
§
2
14.561.
In fact, as a result of the operational flexibility, CILCO has been
able to reduce SO2 emissions by approximately 20 percent.
In an increasingly competitive industry, the
1.8
lb/mmBtu limit on
SO2
emissions
from Unit 2 put CILCO at a competitive disadvantage.
Without permanent relief, CILCO
will once again be at a competitive disadvantage.
The unreasonableness of the economic
hardship
is underscored by CILCO’s
commitment to
full compliance with the short-term
hourly
emission
limit
applicable
to
all
three
boilers.
Under the
variance,
C1LCO
has
4
continued
to
meet
the
short-term
hourly
SO2
emission
limit
established
for
Edwards
Station
by
35
IAC
§214.561,
and
actually reduced
SO2 emissions
from
all
three boilers.
The
relief
afforded
CILCO
the
ability
to
achieve
this
in
the
most
cost-effective
and
efficient way possible.
The variance relief requested by CILCO
did not
result
in
any significant adverse
effects on air quality or increase in allowable SO2
emissions from the plant.
The purpose
of the variance was to
provide CILCO with operating
flexibility.
The ability to
increase
SO2
emissions
from
Boiler
No.
2
and
offset
those
increased
emissions
by
reducing
emissions
from
Boiler
Nos.
1
and
3
provided
CILCO
with
the
flexibility
to
utilize
blended
coal
and/or mid-range
sulfur
coals
in
Boiler
No.
2,
which
is
the
most
fuel
efficient unit.
As anticipated, this flexibility has resulted in significant fuel cost savings,
reduced operating
costs associated
with maintaining
a
separate
low-sulfur coal pile and
coal handling
equipment
for Boiler No.
2,
and it promotes purchase and
use of Illinois
coal.
These benefits did not come at an “environmental cost.” There was ~
increase in
allowable
SO2
emissions
from
Edwards Station.
As
previously stated,
SO2
emissions
actually decreased
by
approximately
20
percent.
Under
the
variance,
and
under
the
proposed site specific rulemaking, the 34,613 lbs/hr. plant-wide limit remains unchanged.
Modeling ofthe air quality effects resulting from the flexibility requested in
the variance
demonstrated there would
be no
significant adverse
air quality
impact
and
the NAAQS
would
be
fully protected
as
a result of the
relief.
Specifically, the
SO2
emission
rate
established by the variance and proposed to remain in place, would not, under predictable
worst case conditions, cause or contribute to
any exceedance of the primary or secondary
5
NAAQS
for
SO2.
This
fact remains
true
if CILCO
obtains
the
relief
granted
in
the
variance on a permanent basis.
Based
on
the
benefits
to
CILCO,
and
the
absence
of
adverse
environmental
impact,
the
Board
granted
the
variance.
For
the
same
reasons,
the
relief
should
be
granted on a site specific permanent basis.
Subsequent to the Board’s Order, the variance
was
approved
by
the United
States
Environmental Protection
Agency
as
a
request for
revision of the State
Implementation Plan
(“SIP”)
and
incorporated
into the
approved
Illinois SIP.
Basis for Permanent Site Specific Relief
CILCO
elected to initially pursue
operational flexibility through
a
variance under
Sections
35
through
38 of the Illinois
Environmental Protection
Act
(415 ILCS
5/35-38
and 35
Ill.
Adm.
Code Part
104) rather than
seek permanent site specific
relief because
the
variables
affecting
CILCO’s
fuel
strategy
in
the
year
2000
and
beyond
(after
implementation ofthe Acid Rain Program)
could not be determined with certainty at that
time.
CILCO’s
Acid
Rain
permit
was
issued
on
September
23,
1997
and
became
effective on January
1, 2000.
Under the Acid Rain Program,
CILCO must either limit its
SO2
emissions to
18,792 tons per year or purchase additional SO2 allowances
pursuant to
40 CFR
§
73.10.
While
maintaining
compliance
with
all
regulatory
requirements,
CILCO
must
control costs to produce electricity and become as cost-efficient as possible or face loss of
customers
and
a
declining
rate
base.
Becoming
“cost
competitive”
is
the
key
to
succeeding
in
the
market-based,
deregulated
electric
power
industry.
Electric
utility
deregulation in Illinois
has converged with nationwide implementation of the Acid Rain
6
Program.
This
convergence
subjects
CILCO
to
competing pressures.
At
the
same time
competitive pressures associated
with
utility
deregulation require
CILCO
to
keep
costs
low,
it
must
expend higher
costs
to
achieve
and
maintain
the
SO2
emission reductions
required under the Acid Rain Program.
Compliance with the Acid Rain Program can be accomplished through a number
ofalternatives
and combinations of alternatives.
Those alternatives include:
purchase of
Acid Rain Program
SO
2
allowances, purchase of low-sulfur coal to reduce
SO2
emission
during combustion, installation ofpost-combustion SO2
emission control technology or a
combination ofthese three.
The
strategy
selected
by
CILCO
has
been
largely
dependent
on
the
cost
and
availability oflow-sulfur coal vs. the cost and
availability ofallowances vs. the costicost
effectiveness ofcontrol technology.
To date, control technology
has not developed to
the
point where
it
is
a
cost-effective
means
of achieving
compliance
with
the Acid
Rain
Program.
Compliance solely through
the purchase of low
sulfur coal has
similarly not
been cost effective due to the absence of a local
supply of this coal and
the high cost to
purchase it from mines outside ofIllinois.
As
a result, CILCO
has found it
cost
effective to rely
on
the variance relief.
To
date, CILCO
purchases
Acid
Rain Allowances
and
blends
various
low
and
mid-range
sulfur
coals.
(See
attached
reports
submitted
to
IEPA.)
This
has been the most
cost-
effective means ofachieving compliance with the Acid Rain Program.
Determination of Compliance
Compliance with the applicable 34,613
lbs/hr limit
(35
Ill. Adm.
Code
§
214.561)
under the variance
is computed
on
a daily basis
from
the average
emission rate on that
date.
Compliance with
permanent site specific
relief would
be
calculated
in
the
same
7
way.
The
following
calculation will
be
used to
verify
compliance
with
the
three unit
average limit of4.71
lb/mmBtu:
(Hl
x
ER1)
+
(H2 x ER2)
+
(H3 x ER3)
4.71
lb/mmBtu
(Hi +H2+H3)
Where:
Hi
heat input to Unit
1
(mmBtulhr)
H2
heat input to Unit 2 (mmBtuThr)
H3
heat input to Unit
3
(mmBtu/hr)
ER1
=
Unit
1
SO2 emission rate (lb/mmBtu)
ER2
Unit 2
SO2 emission rate (lb/mmBtu)
ER3
=
Unit
3
SO2 emissionrate (lb/mmBtu)
CILCO will also monitor SO2
emissions to
ensure
compliance with
all
applicable
limits.
CEMS data will verify compliance with the station-wide average limit, as well as
all
other applicable SO2 emission limitations.
CILCO has installed and is
operating SO2
CEMS on all three units pursuant to the Acid Rain Program.
Consistency with Federal Law
I have reviewed
the potentially
applicable
federal
regulations
and
provisions of
the Clean Air Act and have determined that the requested relief,
i.e., use ofhigher sulfur
coal in Edwards Unit 2,
would not be inconsistent with any federal law or regulations.
The operational change in
utilizing
a different
quality coal
in Edwards Unit
2
is
expressly exempt from applicability ofthe New Source Performance
Standards (40
CFR
Part 60), even though there could be
an
increase in the hourly
SO2
emission rate.
The
federal
regulations
at
40
CFR
§
60.1 4(e)(4)
specifically
exclude
from
the
scope
of a
regulated
“modification”
uses
of an
alternative
fuel
or
raw
material if
the
facility was
designed to
accommodate
that
alternative
fuel or
raw material.
Edwards
Unit
2
was
designed to
combust higher sulfur coal and no physical changes will be required to do so,
upon the Board’s grant ofthe requested relief.
8
The operational
change in utilizing
a different
quality
coal in Edwards Unit
2
is
similarly
exempt
from
the
applicability
of
the
federal
Prevention
of
Significant
Deterioration
(“PSD”)
requirements
set
forth
at
40
CFR
§
52.21(b)
through
(w),
and
administered by
the IEPA pursuant to
40
CFR
§
52.735(c).
The federal
regulations
at
§
52.21(b)(2)(e)
specifically exclude from the scope ofa regulated “modification” uses of
an
alternative
fuel
that
the
facility was
designed
to
accommodate
and
which
was
not
prohibited under any PSD permit.
Edwards Unit 2 was designed to utilize a higher-sulfur
coal, was constructed prior to the PSD permitting program and has not otherwise become
subject to the PSD regulations.
The
operational change
in
utilizing
a
different
quality coal in
Edwards
Unit
2
would
not
be
subject to
the National Emission
Standards
for Hazardous
Air Pollutants
(40 CFR Part
61), or the National Emission Standards
for Hazardous Air Pollutants
for
Source Categories (40 CFR Part 63).
The operational change in utilizing
a different quality of coal in Edwards Unit
2
will
not
be
inconsistent
with
CILCO’s
obligations
under
the
Acid
Rain
Program,
implemented through 40 CFR Parts 72 through 78.
Granting the requested relief will not
conflict with
CILCO’s
obligation
to
have
an
operating
permit
which
includes
the
Acid
Rain
requirements,
hold
sufficient
SO2
allowances
for
actual
SO2
emissions,
operate
CEMS
to
accurately monitor and report
actual
SO2
emissions and prepare and submit all
required data and reports.
In the
1999 variance proceeding,
CILCO submitted a report entitled “Air Quality
Demonstration
in
Support
of a
Variance
to
Burn
Higher
Sulfur
Coal in
Unit
2
of the
Edwards Station” which documented the air quality effects of the proposed change in the
9
SO2
emission
limit
for
Boiler
No.
2.
The
ambient
air
quality
impact
analyses
of the
proposed increase
in Unit
2
flexibility
demonstrates
full protection
of the primary and
secondary NAAQS for SO2.
sw;\g:\c\cilco\general’airperm\pcb\docs\davis
test.doc
10
CILCO Variance Reports to IEPA
Report
Date
Semi-Annual Variance Report
06/06/02
Semi-Annual Variance Report
12/11/01
.
Semi-Annual Variance Report
08/20/01
Semi-Annual Variance
Report
04/27/01
Interim Variance Report
04/27/01
-I——
“The Global Power Company”
June
6,
2002
Mr.’Doá Sutton, Supervisor
permits Section, Bureau of Air
Illinois Environmental Protection Agency
•1021 N.
GrandAvenue East
Springfield, IL 62794-9276
RE:
.
ABS/CILCO Semi-Annual Variance Report
Dear Mr. Suttcn:
The
purpose
of
this
letter
is
to comply with the
semi-annual
reporting
requirement
specified
in
the
variance,
to
35
illinois
Administrative
Code
214.141,
ranted
to
AES/CILCO, by the
Illinois Pol1u~onControl Board.
Under the tenns
of
the
‘~‘ariance,
AES/CILCO
must
report on the
following:
(1) the current cost of Phase U Acid Rain
Program
allo*anccs; (2) the cui~rent
cost
oflow sulfur
coal; and
(3) a discussion of the
availability
of
allowances
and low suifar coal.
This
semi-annualreport cov~rs
the period
•D~ember
2001 through
May
2002.
~potMarket
Cost
of
Acid
Rain
AllowauQes
Month~
—
Cost ofAcid
Rain Allowances
January
2001
$153.57
February
2001
$167.86
March2001
$174.42
April2001
$194.96
May2001
$189.48
-
June2001
.
$198.95
J~y2001
$202.50
August2001
$208.00
September
2001
:
$202.00
October2001
S186.00
November
2001
$202.00
December2001
$168.50
January2002
$163.00
Febru,ary2002
$164.75
March2002
$172.50
April2002
$172.65
May2002
$170.00
00
S
CILCO
Lane
•
Bartonville,~IL61607
•
Phone
(309) 633-2410
•
FAX
(309) 633-2423
fr. ~
Mr~
Don Sutton
I~llnois
~nvirónmental
Protection Agency
Page 2
June6; 2002
Cost ófLow-Sulfur
Coal
The
current spot
market
cost
df low-sulfur
Central
Appalachian
coal
(1.2
lbs./mmBtu,
max.) is $47.28/ton (including tax and transportation).
Undek~
the
variance,
AEs/clLqo
has
the
flexibility to
burn coals
other than
low-sulfur
compliance coal.
Two
of
A~SICILCO’s
2002
fuel sources
provide
coal
with
sulfur.
contents greater than
1.2
lbs.Jm~Btu.
One
source
of
coal
is
projected to contain
a sulfur.
con.tentranging from
1.25
Ibs./nm~Bta
to
2.25 lbs,/mmBtu
and the
otiter source contains a
j~Jf~
content
maximum
of 2.20 lbs./mmBtu.
Year-to-date,
the
majority
of
the
coal
purchased by AES/CILCO
has
contained a sulfur content
averaging
greater
than
1.94
lbsimrnBtu.
The average cost çf
this
coal is $32.30/ton(including transportation).
Availability of Allowances and Low-Sulfur Coal
Acid~rain
allowances are availakie
so long
as the buyer is
willing
to pay the marketprice.
Though
the
market
for
low-sulfur,
Central
Appalachian
coal
has
declined
lxi
recent
•
months
may
impact
avai1abil~tyand
thereby fIrm up
pri~ing:
For
this
reason,
the
flexibility
afford~d
by the
variance continues
to
be ofgreat .benefit to AES/CILCO
both
operationally and economically,
If
you
have any questions
or
would
like additional information, please feel free
to contact
the~a~
(309) 633-2476
j
0
Sincerely,.
0
Mark’Davls
AES EdwardsStatiân
~cc: GregRussell
•
•
Sandy
Isbell
0
“The Global Power C~nnpany”
December
11, 2001
Mr. Don Sutton, Supervisor
Pe~mits
Section, Bureau
ofAir
:fl.linois Environmental Protection
Agency
1021
North Grand Avenue
East
Springfield,
IL
62794-9276
Re:
AES/CILCO
Semi-Annual Variance Rei,ort
3
Dear Mr. Sutton:
The purpose ofthis letter is to comply
with the semi-annual reporting rcq4irement
specified in the
variance
to 35
Iii.
Administrative
Code 214.141,
granted
to
AES4ILCO,
by
the
Illinois
Pollution Control Board.
Under the
terms
ofthe
variance, AES/CILCO
r4ust
report on
the following: (1) the current cost ofPhase II Acid Rain Program allowances; (2)khe
current
cost
oflow
sulfur coal; and
(3) a
discussion
of
the availability
of
allowances and
low ~u1fur
coal.
This semi-annual report covers the period
July 2001
through
November 2001.
~ot
MarketCost ofAcid
Rim
Allowances
Month
•
Cost ofAcid Rain
•
-
Allowances
January2001
$153.57
February200l
$167.86
•
March2001
~$174.42
.
•
April2001
$194.96
May2001
June2001
$189.48
319895
July 2001
—
$202.50
—•
~~ust2001
September
2001
öctober200l
$208.00
•
$202.00
$186.00
November2001
—
$202.00
•
7800 S. CILCO Lane
•
Bartonville,
IL
61607
•
Phone:
(309) 633-2410
•
FA~4:
(309)
633-2423
Illinois
Environmental Protection Agency
Page 2
Cost of Low
Sulfur
C
The current spot market cost
of
low sulfur compliance
coal
(1.2
lbs/mm4tu)
is
$55.47/ton (including
tax and transportation).
Under the
variance, AES/CILCO has the
flexibility to
bum c9als other thali
low
sulfur
compliance coal. In
2001,
AES/CILCO
has
relied upon
two types
oflower
sulfurjcoal
to
comply
with the variance.
Onesource of
coal contained a sulfur
content of1i.70
lbstinmB~u
aiid the
other sou.rce contained a sulfur content greater than 2.0 lbs/mrnBtu.
.To date, the 4iajority
ofthe
coal purchasedby AES/CILCO has contained asulfur
content greate
than 2.0 lb4mmBtu.
The
cost ofthis fuel has averaged $43.07/ton (including transportation).
Availability of Allowances and Low Sulfur Coal
Acid rain allowances are available so long
as the buyer is willing to pay tbj~
market
price.
However, the low sulfur coal market
remains
tight.
Low sulfur coal àupplies cor4nueto be
limited and in great demand resultingin inflated pricing.
For this reason, the flex~i1ity
afforded
by thevariance continues to be ofgreat benefit
to AESJCILCO both operationallyfand
economically.
•
Ifyou have questions or would like additional information, please feel frel to
contactme
at 309-633-2861.
Sincerely,
MarkiDavis
AES Edwards Station
Cc: Greg Russell
Sandy Isbell
August
20, 2001
Mr.
Don
Sutton,
Super~’isor
Permits Section, Bureau
ofAir
Illinois Environmental Protection Agency
1021
North Grand
Avenue
East
Springfield, IL
62794-9276
“The Global Power Càmpany
Re:
AESICILCO Semi-Annual
Variance
Report
DearMr~
Sutton:
The purpose of
this letter
is to comply
with
the
semi-annual reporting requ4rement
specified in the
variance
to
35
flI.
Administrative
Code 214.141,
granted to AES/qILCO, by the
Illinois Pollution Control Board.
Under
the
terms
ofthe
variance, AES/CILCO
must
report
on
the following: (1) the current cost ofPhase U Acid Rain Program allowances; (2) Ihe currentcost
oflow sulfur coal; and (3) a discussion ofthe availability ofallowances and low ~çifurcoal,
This semi-annual report covers theperiod January 2001 through June 2001.
Spot
Market Cost ofAcid Rain
Allowances
Cost of Acid Rain
Allowances
January2001
February
2001
$153.57
$167.86
March2001
$174.42
April2001
May 2001
$189.48
June2001
$198.95
7800
S.
CILCO
Lane
•
Bartonville, IL 61607
•
Phone:
(309)
633-2.410
•
FAX:~
(309)
633-2423
Month
Environmental
Protection
Agency
Page 2
•
cost of Low Sulfur Coal
•
The
current
spot market cost oflow
sulfur
compliance coal (1.2
lbsJmm1~tu)
is
$73.96/ton (including
tax and transportation).
Under
the variance, ABS/CILCO
has
the flexibility to
burn
coals other
th4n low sulfur
compliance coal.
In
2001,
AES/CLCO
relied upon
two types oflower stilfur
co~1
to
comply
with the
variance.
One source
of
coal
contained a sulfur content of 1.70
1bs/xnm~tu
and
the
other
~ourcecontained a sulfur content
greater than 2.0
lbs/mmBtu..
To date, the
t~iajority
ofthe
coal
purchased
by
AES/CILCO has
contained a sulfur content greater than
2.0
lb~/mmBtu.
The
cost of
this fuel
has averaged $34.14/ton (including transportatipn).
~y~iIabilit~r
of Allowances
and Low Sulfur
Coal
Acid rain
allowances are
available
so
long as
the buyer is
willing to pay
tl~e
market price.
However,
the low
sulfur coal
market remains
tight.
Low sulfurcoal supplies
are
limited
and ~
great demand resulting in inflated pricing.
For
this
reason, the
flexibility
afforde4by
the
variance
has been
of
great benefit to AES/CILCO
both
operationally and
econom~cal1y.
Ifyouhave questions orwould
like
additional information, please feel fre~
to contact me
at309-633-2861.
Sincerely,
Mark~)avis
AES Edwards Station
Cc:
GregRussell
Sandy label!
Jim
JC2n~n
“The Global Power Company”
Mr.
Don
Sutton, Supervisor
Permits Section, Bureau
of Air
Illinois
Envirànmental Protection Agency
~1O21
North Grand
Avenue
East
Springfield, IL
62794-9276
Re:
~1LCO
Semi-Annual Variance Report
Dear Mr.
Sutton:
On
April
15,
1999, the
Illinois Pollution Control Board granted a variance ~om
35
fli.
Adi,,irt~
Code 214.141
to the
Central Illinois
Light
Company (CILCO).
Under
ththerms ofthe
variari;
CILCO
must
submit to thefllinois
Environmental Proteâtion
Agency
(EPA)
a
~
report beginnifig
on
December
1,
2000.
The
report must contain
the
follo~ing
information:
(1) the
current cost
of
Phase
U Acid
RainRrogram allowances;
(2) th~e
cu~rrcnt
cost
oflowulfur
coal; and
(3) a discussi~nofthe
availability
of
allow~nées
orlow sulfur coal.
Thepurposeof
this letter is to
comply with
the semi-annualrcpor~ng
requirement.
The
required information is
set
forth
below.
CU.ØCO
reco~izesthis
information is submitted past
December31,
2000.
We
respectfully request
PA’s forbearance for
the reporting
delay.
C1LCO’s long
time
Director
of
Environmental Affairs accepted employment with another
company.
Additionally, CILCO
just completed its true
up of2000 acid
rain aflow~nces.As
you
~ow7
this
process cannotbegin until
January
of each
year.
CurrentCost ofAcidRainAllowances
~
EPA
is aware, the cost
of
acid rain allowances fluctuates.
Set ‘forth below is the spot
~market
price ofallowances for the
last quarter
of2000
and ~rst
quar er
of
2001.
Month
Cost ofAcid Rain
Allowances
October2000
$152.30
November2OQO
$143.69
December2000
$129.71
January2001
$153.57
•
Februaxy2001
$167.86
March2001
$174.42
~7~()S. CILCO
Lane
•
Bartonville, IL 61607
•
Phone: (309)
633-2410
•
FAX:
(309)
633-2423
April
27, 2001
Illinois
Environmental Protection Agency
Page 2
ç~rrent
Cost of
Low
Sulfur Coal
The cost oflow
sulfur coal also varies.
The
cost
oflow sulfur
complian4
coal (1.2
lbs/rnmBtu)
on
the spot market ranged from
$46.13 to
$53.26
(including transportation) during
the last quarter
of
2000.
As you know, under the variance CILCO has the flexibility to bum
coals ~ther than
low
suifur compliance coal.
In
2000,
CLCO
relied
on
two
types
of
lower sulfur
coa~
to comply
with
the variance.
CLCO
purchased
coal
with a sulfur
content of
1.77
and
2.3
1bWmi~Rtu
from
Consol’s Rend
Lake Mine and from
Exxon’s Monterey
Mine.
The cost of
this 1~wer
sulfur coal
ranged from
$25.65
to
$30.65
(including
transportation).
Availability
of
Allo*ances
and
Low
Sulfur
Coal
A~id
rain
allowances are avsiL~ble
so
long as
the buyer is willing topayte
market
price.
The
1ow~sulfur
coal market
is
currently a fight market
Supplies arelimited and i~i
great demaud.~
As aresult,
the
price
oflowsulfur coal
is
currently high.’ For this reason,
the
fle,~ibility
afforded
by
the variance has
been of
bcnefit
to
CILCO both
operationally
and econornicaijy.
This is
cxplain~d
further
in
the separate Inteiiñt Variance report regarding
i~iie1
strategy Inalysis also
requiredunder the variance.
If
you
have questions or would like additional information, please feel
fr4~
to contactme
at 309-633-2861.
Sincerely,
MarkDavis
AES/CILCO
Edwards Statioli
Cc:
Jerry
Cagle
Sandy Isbell
Diana Jagiella,Howard & Howard
4
“The Glcbczl F~wer
C~~mnrany”
April27, 2001
1~fr.Don Suttoz Supervisor
.
.
Permits Section, Buceau ofAir
Iilirói~
Environmental
Protection Agency
1021 ~
Grand Avenue East
~Spring~eld,~
62794-9276
Re:
C~1COXnterim
V~riu~R~ijor-~
De3rMr.
Sutton:
CzApril
15,
1999,
the Illinois Pollution Càntrcl Board granted avarianc~
from
35111.
Admin.
Code
214.141
for the E.P~
Edwards
Generating Sta~ion
cper~tedby
the ~r~~a1lIlin~is
Light Company (CILCO).
Under the
terms
ofthe
variance, CILCO
must
subznit~3othe
1flin~js
Environmental Protection
Agency
(EPA)
eu Intei-im report on
January 31, 2001
.jme Interim
Repo:t must evaluate the
feasibility
of
various
strategies for complying
with
the ~haseII
Acid
Rain
program, includi.rig
the use of
various types
ofcoal, the
purchase
ofaUowaz~es,
or
the
instalThiion
ofa scrubber or other
desulfuxization systems.
The purpose ofthis letter
is
to comply with theInterim reporting requi~
ent.
Th~
required information is se. forth
below. CILCO
recognizes
this
information is
su1~mitted
past
January 31, 2001.
We respectfullyrequestEPA’s forbearance for the reoorting &elay.
clLco’s
loirg time Director of
Environmental Affairs áccepted em~loyth~nt
with
another 4or.upan~
Additionally, C~COjust
completed its
true up of2000 aoid rain allowances
wbi~h
provided
accui~äte
inforthation
on the current
market price of
allowances
As you know, this process
cannot
begin until January ofeach year.
•Ph~a~II
Compliance Through Use ofVarföas Coal ~
and
Purchase
of Aeid
~r.
Allowar~ces
As ex~laincdin more detail below, the variance
has
allowed
C)LCO
to ac~iieve
operational
e~iciencies
and cost savmn~s
from
fuel
source
flexibility.’ Ithas
been ~iore
•ecqno~.ical
and
operationally ef~cient
for
c~co
to purchase the ae~d
rain
allo.w~ncos
necessary
to
combust
coal
other than
low sulfur compliance
coal (coal with
sulfur
content o~’
1.2
lbs/mrnbtu).
—.
7~OO
S.
.CILCC’
Lane
~ B~orviIle,IL ~5iGO7
C
Pji~
(30~)
633-2410
;)
F~
(~3~)
633242.3
XUin~iSEnv
~cn~a~Pro~cLi~n
Agcri~v
Page 2
‘r.
.i.
Under
Phase II ofthe Acid
Rainprog~e.rn,
CILCO
has been ailocatod 22,2
allowances for the
Edwards
Station.
Based on the5e allowances,
CU...CU c~in
ach
with
the Acid
RainProgram through
use of
low sulfur compliance c~a1
(also refe
compliance
cc.a1).
However,
the use of
low sulfur compliance
coal
sigmlificaritly
I
cost
of
comp ~ance. Supplies oflow sulfur ccmpliance coal
are limited and inhi~
Most.low suL.~ur
coal
at~poiies
arc committed
by contract
arid the. sour
es are l~ca
Illinois, resulting
~
~.ie1
costh.
Low sulfur coal
supplies
are currently avai
East~m
Kentucky end Wc~t
Virginia.
The
current spotmarket
cost of
low suL~
coal
is SE3.79
per ton, including ~ansportation.
Forthis ror~ou,CILCOIs rciyfrtg on the flexibility provided by
the v~rian
ether
th~n
low sulfur coin~Uance
coal.
While this has required the p~.irchase
of3~
FY 2000 vintage
and
19,000 FY 2001
vintage acid rain nUowances, this
;;~ategy
operationallyand economically prefcrabl:
tc rcliance on
low sulfur ccmn~1ia~ce
c
lower
cost a.ssociatcdwith
these a~ternativefuel types.
Set f~rth
below is a chort illustrating thc various coal t~,esCU..CO has e,~4~ted
to use for
compliance at Edwards Station.
~tj~~IT_
.
ulfur.
the
~on
eii.t is
•
iiier
1
.
.
Blend of
80
Conical Rend Lake coal with.
content of2.3
lbs/rnmBtu (effective 1/1/2001
sulibr content
is 2.4
lbs/mm~tu)~ami
20
Ex
Monterey coal with sulfur content of
1.77
1bs/rnrn~tu
(effective 1/1/200 1 the
sultur con
1.61
1bs/mmBtu~
Boiler 2
.
Blend of:
50
Consol Rend Lake
coal .and
5
Exxon Monterey coal
l3oilcr 3
.
~
.
Bl~idof:
80
Conso! Rend
Lake coal
and 2
Tunis Bikhart coal~it1j.sulfur content
of
5.6
lbs/mmBtt
In May 20C1
this fu.el
sc~urçe
wi
switched to a
blend
of
75
Coniol Rend Lal
and 25
Exxon
Monterey coal.
~.
be
ceai~
C~CO’s
use ofth~ecoal blends (which was made possible only
bec
use
fle~dbiiity
afforded
by
the
i~oard’syariance)has allowed
Edwards
Station
to co;~
Phase LI ofthe Acid Rain pro~am
while
achieving
significant costs sr~”ing~.
57 acid
rain
e compliance
~oa~
tcreases
the
~demand.
~d
outside of
able from
•omplisnce
e to use coal
000 additional
mained
both
al due to the
Ithe
ywith
I1l~nois.~nviroümenthI
Protection Agency
Page 3
Installation of Scrubber or otherDesulIurization Equipment
Installation ofa scrubber or other desulfurization equptnentx~mains
the
oatvxpensive
meaz~sofPhase
11
compliance.
Installation ofa scrubberat Edwards Station is no
operationally
fçasible
due to space lirnitation•s.
Evenifthere was not this practical Jimitation~
cost~ou1d
be prohibitive.
The cost ofscrubberinstallation could easily exceed S40 miliion.
t this
juncture,
Phase
fi compliance
throughinstallation ofa scrubberwouldnot be
ccc
omicaiiy
prudent in comparison to the otherstrategies available.
I hope that
you
find this report useful.
If
you have questions ,r
need addi
onal
information, please feel free to contact me at 309-633-2861.
.
Sincerely,
rJL~
Mark~Daviz
ABS/C1LCO
Ed~.vards
Static
Cc:
Jcny
Cagle
Sandy label
Diana Iagieila~
Howard & Howard
•
—..——
—
.
.—
—.—
——..
—
—
t—...
•~
..—.
•
V.
—
—
....
.
.
—
BEFORE THE
ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF
THE PROPOSAL OF:
CENTRAL ILLINOIS LIGHT
COMPANY
FOR A SITE SPECIFIC RULEMAKiNG
AMENDING
35
ILL. ADM. CODE
§
214.561.
)
)
R02-21
)
)
(Site Specific Rulemaking)
CERTIFICATE OF SERVICE
I, the undersigned, hereby
certi~’
Mark Davis upon the following persons:
that
I have
served
the
attached Testimony of
Via Federal Express
Dorothy M. Gunn,
Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph, Suite 11-500
Chicago,
IL
60601-3218
Via Federal Express
John Knittle, Hearing Officer
Illinois Pollution
Control Board
1717
Philo Road, Suite 25
Urbana, IL
61802
Via Federal Express
Rachel L.
Doctors
Assistant
Counsel
DivisionofLegal Counsel
Illinois Environmental Protection Agency
1021
North
Grand Avenue East
P. 0.
Box
19276
Springfield,
IL
62794-9276
Dated: October 10, 2002
Jon
S. Faletto
Diana M. Jagiella
Howard & Howard Attorneys, P.C.
211 Fulton
Street, Suite 600
Peoria, IL
61602-1350
(309) 672-1483
~Q4—ju
Diana M. Jagiella
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