ILLINOIS POLLUTION

CONTROL BOARD

December 29,

1983

IN THE MATTER OF:

R8i~20

ALTERNATIVE CONTROL STRATEGIES,

)

(Docket

B)

FINAL RULE (Docket

B)

PROPOSED RULE.

SECOND

NOTICE.

OPINION AND ORDER OF THE BOARD

(by

3.

Anderson):

I.

Procedural

Histo~

On June

2,

1983 the Final

Rule

in the proceeding

captioned

R8l—20,

Alternative

Control

Strategies

was

divided

into

two

dock—

ets.

Docket

A

was

adopted

on

that date and

filed with the

Secretary

of State.

Docket

B,

pertaining

to Section 202,401:

Duration

(formerly Section 202~:L45),

was published

in the

Illinois

Register on July

8,

1983 to

obtain additional

public comment

on

the “useful

life”

issue.

A hearing was held

on Docket

B

on

October

28,

1983.

Subsequent to that

hearing,

an additional

public comment period was allowed

to enable hearing participants

to summarize their views.

The

record which forms

the

basis for

this Second Notice proposal

is

the

following:

the public

comment, testimony,

exhibits,

Economic

Impact Study,

(EcIS)

and

Orders and Opinions of the Board

in P8120

(Interim

Ru:Le)

and R81-

20

(Final

Rule,

Docket

A), the public comment

received

following

the July

8,

1983 Register

publication of Docket

B,

the

transcript

of the October

28,

1983 hearing,

and

the

public comment received

following that hearing.

II.

Introduction

to

the Useful

Life_Issue

The Opinion accompanying

Docket A of this proceeding

explains

the evolution of the useful

life

limitation

in this

proceeding.

Briefly, the initial proposal

for the Interim Rule did

not

address

shutdown emission sources

at

all.

However, the adopted Interim

Rule did allow credit for

shutdowns and also stated that an

Alternative Control Strategy

(ACS)

permit “may not be issued

for

a period of time which is greater than

the useful

life of

an

emission

source

which

contributes

an emission reduction

to

the

ACS”

and

noted

that

the

burden

of

proof on this issue

is

on the

applicant.

Docket

A

of

the

Final

Rule adopted the

additional

limitation

that

“a

shutdown

emission source shall

he deemed to

have

a useful life of no more

than five years.”

The Board has maintained since

the adoption

of the Interim

Rule, that

the

crediting

55-483

---

wil I

not

threaten

the

“environmert.el

~ni

7.1

c

ic~

r

ACS

so

long

as

such

cred:Lts

~re

~irn~Lc~

~

I

I~on

I

)

ole

life

expectancy

of

the emission

sourcc~,

~er

the

~u-i~

~,

o)2

;~,

I’pinioe

arid

Order

of

the

Board,

R8l~2~ (A~

pp.

2i~-23,

,

H,o”-~”nr,

the

Board

has

also

recognized

the

need

to

7rovide

‘-tenth

~‘fs

for

the

determination

of

useful

life.

In

Pockon

A,

olin

dc.:

ad

ptnd

the

Five

year

maximum

limit

as

a

“

r

cn&ol

r~-~

‘~

noti.

on~

which

would

provide

a definit-~,

1

Loi

~

On.

n

L

flexible

and

realistic standand

c.

0

~

no

~eo

1~oo.I

~1ecoud

Notice

proposal

is

designed

to

prrv~

I ~ euco

a

ohini: eth

In

the

Docket

B

comment

neni

o.

dt

~it;ol

their

position

that

the

useful

lila

a

0

-

entirely,

(P,C~

48

and

50.)

teweve~

t-~tn

oc

:ton

riluil.

the

Board’s

Finding

in

Docket

A

that

eb~ent

ta

.-

~

‘~Ld~.lfe li~it

air

quality

degradation would

He

almond

t’.

o~nnc

‘h-.-~ ‘en~m

lPC~~

again

notes

the

Economia

impact

~‘~*

~

~:-‘-~‘

-

life

provisicn

will

avoi’l

il

between

$6.

/

dflO

I o

.1

1:

-~

86—126.)

ro

eliminate

tIe

c~c-o

~

:in~

the

use ol

‘lr.isnolor~ reol~ctior

~r

.,

.~

undermine

the

“

environrie~i -o-~I

-a

,

I

the

Envnronmentnl

Protection

A

I

..

-~

par.

1009.3)

because

extht~ng

pollat

ca

--~

ol-.

.o~

~-.

~.

toe

form

of

emission

reduction

credits

tth

n:

n~a~ La-

•t.Lra

of

the

emission

source.

Thus,

the.

Ace

n.

~nc

a

nil

a

provision

even

iF

we

accept

thc

1

ct.~:’~

..

damages,

as

suq~ested

by

one

-or~mca1:e

..

I’

1

Moreover,

.1 inking

the

dur~ taco

on

a

.:

credit to

nr~e

expected

useOi.

11

;~

~

~

ia’

credit

is

an

equ~tab1e

soiut:Lon to

‘o

thutck

en pro ila~

One

witness

stated that the

assigning

t

as

loll

lice

to

ann

emission

source would

require complex,

~uo1ec:ti~o

end

spe:’ulata

‘e

denasion

making.

(P.

1054—1060.)

thii~

Van

tecao-.

~L’c

a

~ilul

ilfe

does

involve

prediction,

the

p Va r~nn

-~a

an

n

a::

ccc

nuno~nesses

involve

making

similar

predictions.

.1

0

.5~

k~

tn1

5 7,

Furthermore,

the

mechanism

for

reevnV untic

-

an~raoii- ne

In

Lhis

requlation.

will

allow

the

Agenc’

~iaO

a

“

.La.

ont.

t

.

in.

t

Y-~i ahe~,r

original

estimates

of

useful

lit-I.

Va.

LV

-ILII

It

(ar-c

also

notes

that

a

clear

staterei-~t.

a

c’

.~

;-~

I

should

he

of

benefit

to

business

~a~n’~-~r

a

:

~Lce

:O~

“trading”

,

and

air

.~ua1ity

manaqenenri-

( P

-

1.,

III

ec~fic

?r~visicrin

ot

-

V

-~

~

As

stated

earlier,

thin-

prcp~-~

a

...

-V.

.

-

rL

~

maximum

useful

life

for

shutdown

caiat

a~ no ‘-n-

I.

:n-’r:r-n.

tin

testimony

and EcIS

all

indicate

anot

03’:

11.13(0 ‘.10.3

C

sources

vary

greatly,

and,

furthoroca

an

than

a

taqt,

n.o.~

coo inqe

of

the

emission

sources

involved

Woolf

I eve

‘n-crc

t-Lan

-~

-1\7572i0

useful

life

remaining

upon

enter:irrn

at-

ACE.

,See

Vt.

Ian

I

--

Economic

Hearings,

pp. 4—iV

---

Instead

of

specifying

a

mantinum

cnn-antic-i.

I

Va

--

p: cp ca1

provides

that

useful

life

shaU

he

Jet-ermincd

on

r

-cane

by

case

basis

after

the

consideration

of

“all

lolctors

V

a:

P

~the

Agency

reasonably

construes

as

bearing

upon

the

usefial

IVae~”

Minimally, the five factors

listed in

nuhsectii:n

Va

nest

he

considered.

Other

catagories of

ccrisiderati

one

-lu-Va

be

ustif

Led

by

the

Agency

as

hearing

upon

the

usefu.

liol:-

quentoion

Where

a

shutdown

emission

scurce

n.e

provaxlaq

nnrn

emassion

reduction

for

use

in

an

ACS,

the

ACS

nermil

much

~rit

a.

n

the

Agency’s

determination

of

the

-useful

:iife

:10

5

p~

a.

conditnon.

*

It

should

he

noted

that.

-the

use fin:

I a

ic~y

1-’-

ii

I.

~110 13

ni

17)

he

longer

than

the

period

for

which

a

pea

i-:

(31

La--

)(

~.t

1’.

i a

ancued

By

requiring

that

this

detain

Inn-i- ion

ho

con-

~t

-:

-

1’

(c

per-i

i P

condition,

-the

Boara

intends

that

at:

ninny

hr

app

anlce

tin

i-he

permit

applicant

either

upon

lena

inc

no-

Lc~ Va

I

-

a’r

cc

-n

any

renewal.

Upon

arm

i-ia

perTla

in

-a

n’c-’

--c

p

-

-~

~

t~ n-V

1ne

Lit

to

accept

a

-nhorn:i~r cecil

aaL

an

.-

0.

~

~i

i’m

50

be

correct,

cue

hope

Lo

,.ursua’-c

a-

-

an

-

-‘

-

to

isc

aul

life

when

it

comes

up

coo

rev

LLa

at.

cc

-a-;

--

in

C

LaCY

no

advantage

in

forcing

the

app

-

i.

-

-P

a

~

--

-

on

until

it.

actually

restricts

-Plan

opei

it

l.a

u-

a

a(

1.

-

an

I

in tone

there

may

he

an

advantage

in

al lc~oJap

in

17

-

a

-::a

~ea’e

lop

over

time,

an

opportunity

for

apreal

Va

the

anrocnaaL

c~onintnoa

will.

be available

at either

issuance

or

renawal

withoct

prialudice

to

the

petitioner.

While

the

mecrianism

ci:

re-~u1-r1a-nr al-c

usafun

life

determination

as

a

permit

condition

wac

not:

spec:Paica(11r

addressed,

the

testimony

at

hearing

nrc--nun-cf

ti-in

1:.

ineLV

life

would

he

treated

as

an

“opera

cong

COlIC

-

t

in

-

-

-

-

-

IL

-

LI’

--

Furthermore,

potentoal.

disaq

aeeaLen5s

a

-inc

-

--

a

-i

ha

in:

be

resolved

through

the

-esua.

C

cart

t

a.

p

1

;-

--

-

As

noted

above

this

revi

sc-i

r~ropoc~nl

a:—

~

i

.~

hat

-ice Va

1

life

he

considered

both

upon

an rtc--nl

-~

1~fl’

in

.

-:

fleinflit

and

upon

any

renewaL-

A

g~cea-tde~i

~

-‘

:

a.

x.

2

-.

‘‘~

1~nar-ing

focused

on

the

1’reevaluati

)n~

‘a-ax

a-

-

-

-

--

-

(lost

witnesses

at

that

hearing

agreed

LI.

Pa

a

:_

)‘1d~

~~tc--

C.

-

c-Y:u 1

life

upon

application

i-ax.

re

mw a1

~r~-

aap.

-4:

-

-

lOt.

implicit.

(H,

l049-~1050

~-

1081.

in

in

-

man

-

in

~-‘

:

anruatcon

or

a

change

in circumstances may

onin.

: a

a

~

..

-

-

-

-

~,.

ci tin

life of the

emission

source

cim~

-

~

tin

-

.

-

n

x

-nat ner

longet

or

shorter

LOan

pi-ed:Lctcf

-

Ph~ c

I

c--n-

—rin-xsa a.fl

source

is

involved,

-the

applaca-et

~miJ

Vie

natenin

0

1

-

to~~’.

at

~

(b)

state

3

inn.

L~.

‘V

~‘i’l

-

--.

I

at

13:

the

useful

life

of

at.

emission

souca-e-

in

a’

in.

Pa

-

...-

a..

—

i

emission

reduction

to

the

ACE,

This

fol

low-x

b-n

in

I he

~cPs

ain

-

n

(a.

limitation that

“an

ACS

permit

may

not

ic-u

Issued

O..)t

a

pernod

of

time

which

is

greater

than

the

useful

life

Va

an

ennilesiorn

ecu-rca

which

contributes

an

emission

reduction

to

-i--i-me

ACE,

however,

the

Agency

need

not

specify

the

useful

life

as

a.

permit.

acndlaion

unless

an

emission

reduction

from

a

shlltdow:n

:n

~.nvol--a-:i

---

comparable

a~rnsss1on sources

when-i

rena’

C-.

rati

rig

the-

predicted

useful

life

of

the

now

shutdc-wa

and

1one -ione

aquipnnent.

(R.

1115—1116)

Clarifying

-the

fact

tn--caL

‘in

opportuni-tay

for

reevaluation

is

available

shoulE

alleviate

some

of

-i-he

concern

about

under

or

over

predicting

useful

1. i4~e,

i:t

provides

an

ongoing

mechanism

for

linking

the

da.tat.lon

of

credits

to

what

is

actually

occurring

in

the

industry

a iv -Va’ed,

Five

factors

arc

listed

ii.

subacatior.

,b

-

which

the

Agency

must

consider

as

a

mininun.

General”

0C:c’tT~id, the

Agency’s

review

will

begin

by

looting

at:

the

a:~taciriated

useful

life

of

the

emo-e’-;iOTI

scarce

and

then

Pa

1

nat

suotr-u

I

front

in- at

original

prolecizacrI

banned

upon

the

phyni

;-

in-c

V-nJ.

-

a,

a:

achno

oqical

acceptabilIty,

and

eronomia

-ri -ic-il 15/

‘a:

he

cries:

on

source.

It

will

also

test

this

pro~octio-c

against

43C

d.:cmonatratod

useful

life

of

other

similar

emission

souroen1

partIcularly

where

the

emission

source

inscat

n-a

ah~tVa-an.

~‘

b:nc-c5i~n-a-

it

.c

(~L) and

(5)

were

proposed

in.

tinc

‘

iL’aLo

1

(Jcin—’

cnct’-n-c-anci

iL-

in-ave

been

retain

ad

as

t:I-

e~y

:

ccc

ccv--, coat

-

)C.

,in

C

a

--

n/nc

tn-ii

ew

process.

SubsectVarnc

~h

,

1?

-

-

--

-

na

-‘

-

-Il

-

-

‘

a.

--

win

a

developed

in

runpaincx.

i-C

nO

‘I,~in;

--

-

-

-

-

i-

‘epic-Per

pub

:1cc— ic:n~.

Schsc.an~~rn(hI

,~-

cc

cunux-

‘1

i-cia’’-’

v-r.IVaa.on

of

the

principal

components.

The

Tlll:cc:c,no

~c

oScar

cab Lacalon

specified

that

the

age,

beve’

~ai

‘a.

-;

a

I

-~

c-cia,

and

operating

efficiency

of

the

prlnc:Ioal

Oinfl~O3CF43

a

Ln-.

to

tic,

cc-os idered

by

the

Agency.

(Sec

former

.aubsect.

I

ccc:-

4:

2

,

(

t

,

ax-c

14

)

)

These

considerations

all

rratate

-::o

-t

La

,Itn’~.

--

.n-~

cnC~Lien.

~a.t the

emission

.$Unircci

,

(iv

in

401

H.

.(.

I

I

nOW

;\

ru aol-a.

thamm

list

these

xpncc:Lt.Lcn

or into

tan:

h~a

-“

.-~

ci

ci

-

She

more

general

i-err

‘phyci

n-a

c-a~~

.t

a

I-

n-at

-n~on

Cmi

44

LO

order

-to

provide

a

focus

on

the

act

a.Ci

llidC

i yinnc

concern

with

how

well

and

how

long

i-he

equipmenc

can

piyeaaai

it--

ne

naxpected

to

operate.

Suh~e~t.i.in

(b

I

I

aria

(‘I,

-

-

--

nc

ci

in

.)iO~/

an-nd

economics,

respectovely.

hitnesses

at

the

Cc.

--

Pa

--

in,

-L83

hearing,

pointed

out

-i-ha-i-

eons

~

eratom1s

c- ::her

hL~i~Var-

pPyVa cal

condition

of

an

emission

source

may

also

d

Lcn-t~atu

tilE

i.-m

r

:i

ito-

p~,

1068—1147.

)

For

exarp:ie,

the

use ful

vi. tie

ol

an

era

a-c :on

so-urce

InLaY

be

cut

short

when:

a-Jvane.aa

u

tecnnc-_

.a-;y

a

--

-

~ n-ala

anal-ax

11

obsolete

or

:echnmo l~qical

.Ly

LInnacccp tel

a

.c

‘viE-

indunta.y.

addi-b ion,

-toe

~h~-ea:a~.

use can

I

:Ve

aa,

bra

aI.in onnea

when

i-he

operation

of

an

emisth

:a

source

nat coin

:an’

mates

ic

economically

unviable.

These

c-n)nsnraeratnlons

cc

n.

mc,:

.

I P.

tiec-annse

Pci

duration

of

an

eran.a.eion

rurauctiorn

creel—

.Pao

~.

:

ca a.

c

an.

toe

npnnratinq

lifetime

t~cat an

er-atocioc

SOUa.’O-

--

--

~-L

a

crnp

a~ci

onO

:-a

not

been

usera

on

a

AOL.

Examples

were

presented

in

i-Lie

.n-ecorc

C:

cecrmnoiocjical

and

economic

condi

ti oris which

-nay

niffcn~I-

Lu--

a-TO

FnT

1

Vi

1)1

an

emission

source.

(H.

1068—1070,

1

E:~mpiv seated,

a.vbhough

an

---

emission source

may be

technologically current and viable

at

the

outset

of

an

ACS,

conditions

in

the

industry may he

anticipated

to

change

during

the

term

of

the

ACS~

Where

this

is

foreseeable

at

the

outset,

the

useful

life

may

be

geared

to

these

anticipated

changes~ Where these changes

were

not

forseen

at

the

outset, but

are foreseen or have actually

occured

by

the

time

of

renewal,

the

useful

life

may

appropriately

he

shortened

or

lengthened

to

reflect these

chanqes~

*

The

proposal

for

subsection

(h)

has

been

revised

to reflect

the

factors

discussed

in

the

preceding

paragraphs.

However,

the

Board

has

declined

to

include

some

of

the

detailed

language

on

these

points

which

was

proposed

in

comments

and

the

hearing

testimony~

(P~C,

46,49,

and

51;

R,

:L149~1i79J

Where

such

detail

merely

provides

examples,

(P.

Li37~1143j

the

Board

is

not

persuaded

that

it

is

helpful,

and,

in

fact,

believes

it

might

unduly

focus

the

review

on

what,

in

practice,

may

turn

out

to

be

inapplicah~e

nr

mel

~ectmc~e

pied~cl

~

~itc

(R

1043

)

It

may

also

imply

that

otner

predictors

are

less

valid

(R

~ L

b6

~ e

~s

riot

n~u

ii

ni

ca

i

a

is

r~cord

For

the

Board

to

determine

whethe.r

prof it

macpins.

product

qual

i~ty

•

“corpor3te

market. inc

ctrateq

ios~

or

other

suppested

“examples”

of

these

factors

are

valid

predictors

of

useful

life.

Until

more

information

is

developed

on

these

points,

the

Board

believes

it

would

he

unwise

to

require

the

Agency

to

consider

them

in

every

situation,

as

would

he

required

by the

proposed

amendments.

Rather,

those

factors

which

the

Agency

“reasonably

construes

as

hearing

on

the

useful

life”

will

provide

the

standard

for

review

of

appropriate

predictors.

As

one

witness

pointed

out

(P.

1139),

there

is

no

right

to

third

party

appeals

on

these

permit

decisions;

however,

this

is

not

unlike

other

permit

decisions,

Furthermore,

as

stated

above,

the

Board

does

not

believe

the

proposed

detail

would

provide

greater

protection

of

the

public

interest

than

a

comprehensive

review

of

all

relevant

predIctors.

*Qnapoirit

related

to

the

“economic

viability”

considera-

tion,

one

witness

raised

a

question

as

to

whether

the

useful

life

provision

should

he

clarified

to

insure

that

an

emission

source

which

is

planning

‘to

eventual

i.y

shutdown

for

solely

economic

reasons

could

not

obtain

an

emission

reduction

credit

for

that

period~~

(lh1i49—i151~)

This

should

not

be

necessary.

Both

the

Act

and

ACS

rules

require

the

impact

of

the

ACS

to

be

environmentally

equivalent

-to

that

which

would

otherwise

be

achieved

and

maintained

under

exi sting

requirements.

Therefore,

under

the

existing

language

no

credit

is

ava:Llable

in

such a

situation.

(See

June

2,

1983

Opinion

and

Order

of

the

Board,

P81—20,

Docket

A,

pp.

15—16,

21.)

The

Board

also

notes

that

the

shifting

of

production

to

another

emission

source

outside

the ACS

would

be

prohibited

by Section

202.3O6(b~

in

conlunction

with

202.

:L11(b)

;cA

Q7

---

Finally, the revised proposal contains a new subsection

(c)

which requires the Agency to make an appealable record of

what

it

has

considered

and

the

basis

of its useful life determination.

While

this

information

would

not appear

in the permit,

it

would

form a part of the permit file and provide a basis

for Board

review

on

appeal.

ORDER

Section

202.401:

Duration

a)

A permit containing an ACS

shall

be

issued for no

longer than five years,

or for such shorter

period

as

the Agency may specify as necessary for periodic

review of the ACS or

to accomplish the purposes

of

the Act or of

this Chapter,

However,

an ACS

permit

may not be issued for a period

of time

which

is greater

than the useful

life

of an emission

source

which

contributes an emission

reduction

to the ACS,

The

burden of proving the

useful

life of the

emission

source

is on

the applicant,

Pee—p~pese-e~

~

~

yea~

b)

~p

initial

issuance

or

renewal

of

an

ACS

permit,

~

all

factors

which

it

reason-

ue s as ~

emission source which

contributes

an

emission

reduc-

tion to the ACS.

Where a shutdown emission

source

contributes

an

emission

reduction

to an ACS,

the

~enc

z

sha

1~

the

useful

life of the

shut-

down ~

the

Aenc

considers

shall

include,

as

a

minimum:

U

~

~n~~2f

the

~

2)

~~y~ical~ondi

tion of

th~4~cialcomone~ts

of the emission source

3)

The

technoi~4

rn-ce

tabilit~~

ie

emission

source

4)

The

economic viability

of the emission

source

and

5)

The

demonstrated useful

life of

emission

sources

of

the

same

~

55-488

---

c)

~~2enc~lmakearecordofthe

factors

considered

and

the

basis

for

its

initial

or

modified

determination

~ful

life

mad~

lrsuarft

to

subsection

(b),

IT

IS

SO

ORDERED.

I, Christan

L.

Moffett,

Clerk

of

the

Illinois

Pollution

Control Board,

hereby

certify

that

the

above

Opinion

and

Order

was adopted

on

the~ffday

~

1983

by a vote

of

Christa.n

L~ Moff

,

Clerk

Illinois Pollution Control Board