(~t~:~’&~
~jH~
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
-~
Midwest Generation EMIE, LLC
)
~
~-~C:’~$
Petitioner
)
PCB 04—185 ~
)
Trade Secret Appeal
v.
)
)
Illinois Environmental Protection Agency,
)
Respondent
)
NOTICE OF FILING
TO: See attached service list.
PLEASE TAKE NOTICE that on the 30th day of November, 2004, I filed with the
Clerk of the Illinois Pollution Control Board the Midwest Generation EME, LLC
Clarification of Trade Secret Determination, as required pursuant to Board Order
dated November 4, 2004, copies ofwhich are attached hereto and hereby served
upon you.
PEOPLE OF THE STATE OF ILLINOIS
LISA MADIGAN
Attorney General of the State ofIllinois
By:
~
(‘O/L~~L~
Paula Becker Wheeler
Assistant Attorney General
Environmental Bureau
188 West Randolph Street, 20th Floor
Chicago, II. 60601
312/814-1511
Dated: November 30, 2004
THIS FILING IS SUBMITTED ON RECYCLED PAPER
SERVICE LIST
Sheldon A. Zabel
Mary A. Mullin
Andrew N. Sawula
SchiffHardin LLP
6600 Sears Tower
Chicago, Illinois 60606
Mr. Bradley Halloran
ChiefHearing Officer
Illinois Pollution Control Board
100 West Randolph, 11th Floor
Chicago, IL 60601
Dated: Chicago, Illinois
November 30, 2004
KeithHarley
Annie Pike
Chicago Legal Clinic, Inc.
205
West Monroe, 4th Floor
Chicago, Illinois 60606
~
~
‘3
OFFICE OF THE ATTORNEY GENERAL
~
GC~~~
STATE OF ILLINOIS
Lisa Madigan
A’TORNEY GENERAL
217/782-5544
217/782-91 43(TDD)
November 30, 2004
Mary Ann Mullen, esq.
Schiff Harden & Waite
6600 Sears Tower
Chicago, Illinois 60606-6360
Re:
Midwest Generation EME, L.L.C.
—
Clarification of Trade Secret Determination
Dear Ms. Mullen:
INTRODUCTION
On January 26, 2004, at its request, the Illinois EPA received a statement ofjustification for a
claim of trade secret from Midwest Generation EME, LLC (“Midwest”). On March 10, 2004,
the Illinois EPA issued its determination on the claim. By this document, the Illinois EPA is
issuing a clarification ofits trade secret determination pursuant to the Pollution Control Board
(“Board”) order issued earlier this month (PCB
04-185,
November 4, 2004). More specifically,
the illinois Environmental Protection Agency is clarifying the reasoning behind its denial of
certain information claimed trade secret by Midwest.
This matter involves the denial of trade secret protection to information provided to the Illinois
EPA in corijunction with Midwest’s response to the United States Environmental Protection
Agency’s (USEPA)
§
114 request for information (“USEPA information request”). The two
categories ofinformation at issue are the capital projects list for each ofMidwest’s coal-fired
500 South Second Street, Springfield, Illinois 62706
• (217)
782-1090
• TTY:
(217) 785-2771
•
Fax: (217) 782-7046
100 West Randolph Street, Chicago, Illinois 60601
•
(312)
814-3000
•
TTY: (312) 814-3374
•
Fax: (312) 814-3806
mm P~ Mgi,, ~rh~nr~l~ Jllinnic 62901 a (6181 529-640() • TTY: (618) 529-6403 •
Fax:
(618) 529-6416
electric generating units (“capital project list”)1 and information identifying the monthly net and
annual net generation, the monthly and annual coal heat content, and the monthly and annual net
heat rate for each ofMidwest’s coal-fired units (“generation data”). 2 Midwest submitted these
two categories ofinformation in response to Request Two and Request Three of the USEPA
information request.
GENERALDISCUSSION
The Illinois EPA’s denial is made on multiple bases, consistent with the applicable laws and
rules that govern protection ofinformation that is claimed to constitute a trade secret. First, for
certain ofthe information claimed trade secret by Midwest, information existed indicating that it
was a matter of public knowledge; or lacked competitive value orboth. Second, claimed
information constituted emission data. Third, for certain ofthe information, Midwest’s
statement ofjustification was deficient, failing to demonstrate that all ofthe information
submittedIn
making
wasits
determinationentitled
to tradethatsecretMidwestprotection.had
not3 met its burden ofdemonstrating that the
information is not publicly available, the Illinois EPA did not, nor is it required to, search
exhaustively for all information claimed trade secret by Midwest to confirm whether the material
is publicly available. Rather, Midwest was required
—
and failed
--
to demonstrate the lack of
public availability. The fact that the Illinois EPA was able locate at least some ofthe specific
information that Midwest claimed to be a trade secret not only required rejection ofthe claim
with respect to that particular information, but also cast sufficient doubt on the balance of
Midwest’s trade claim secret claim so as to warrant a blanket denial.
Indeed, prior to making its trade secret determination, the Illinois EPA informed Midwest of its
failure to account for the complete dissemination of all information claimed to be a trade secret.
Specifically, the Illinois EPA called to Midwest’s attention, in telephone conversations prior to
issuance of the Agency’s formal decision, Midwest’s apparent failure to follow its own
procedures for ensuring protection of trade secret information. At a minimum, it was pointed out
in these discussions, Midwest had failed to address the complete chain ofcustody for the
information in dispute. It was also pointed out, as noted above, that Midwest did not account for
all public entities to which it is required to submit the type of data forwhich it claims protection,
and the record keeping policies at such entities. Despite these pre-decisional discussions,
Midwest failed to address the Illinois EPA’s concerns in a supplemental statement of
justification prior to the Agency’s trade secret determination.
This information was submitted in response to information request number three. Information request number
three states “For all currently active coal-fired generating units provide a list of all capital projects, of an amount
greater than $100,000, approved or completed between January 1,
1975
and the date of this request. For each such
capital project identify the work performed, the date completed or projected to be completed, the project work order
number and the dollar amount approved and/or expended.”
2
This information was submitted in response to information request number two. Information request number two
states “For all currently active coal-fired generating units provide monthly and annual total gross and net generation
(MW-br), monthly and annual average heat rate (BTU/Kw-hr) and monthly and annual average coal heat content
(BTU/lb) and percent sulfur for all years from 1975 through 2002.
~35 Ill. Adm. Code 130.203
Finally, pursuant to state and federal law, emission data cannot be accorded trade secret status.
In its statement ofjustification, Midwest completely failed to address the nature ofsubmitted
information as it might be considered to constitute an article containing emission data. As
information was being submitted in response to a USEPA request for information under §114 of
the CAA, it was both reasonable and appropriate for Midwest to address the status ofthe
submitted information, as it would likely be considered to contain emission data.4 Under 35 Ill.
Adm. Code 130.203(e), Midwest was under a specific obligation to do so, as in a statement of
justification “any other information that will support the claim.” Midwest failed to satisfy its
obligation under 35 Ill. Adm. Code 130.230(e).
In this regard, emission data includes information on the amount ofemissions ofvarious
pollutantsIt
also includesthat
ananyemissionrelated unitinformationis authorizedthat
istonecessaryemit
underto applicabledetermine
emissionstandardsdata,and
limitations.including 5
establisheddata
relatedbyto authorizedthe
CAA andor incorporatedallowable
emissions.into
the6EnvironmentalThe
New SourceProtectionReviewAct(NSR)are programs7
appropriately considered standards and limitations for the purpose ofdefining emission data as
these programs establish legal restrictions on emissions. In particular, these programs establish
limitations on the emissions ofnew or modified emission units, as distinguished from existing
unmodified units, which are not subject to such limitations. The purpose ofthe information
solicited by the USEPA information request was to determine whether Midwest’s units have
been modified so as to be subject to limitations under one or more ofthe NSR programs. As
such, submitted information should generally be expected to constitute emission data.
The two categories of information that are in dispute are directly relevant to the applicability of
NSR. They relate to the two tests that must be met for a modification, or major modification to
have occurred. The first test is that a physical change or change in method of operation has been
accompanied by an actual or potential increase in emissions. The generation datathat is the
subject of dispute generally constitutes emission data as it relates to increases in emissions that
have occurred at units. The capital project list generally constitutes emission data as it identifies
activities that have been performed on units, some or all of which may entail physical changes to
or changes in the method ofoperation ofsuch units. Considered together, these two categories
~of information are needed to determine whetherunits have been modified, and thus should be
subjected to standards and limitations for modified units set by NSR.
~ Section 114(c) of the Clean. Air Act specifically provides that submitted data that constitutes emission data must be
available to the public.
535
~ Adm. Code 230.llO(b)(l)(C)
6
35111.
Adm.
Code 230.110(c)
‘
~These programs include New Source Performance Standards (NSPS), 40 C.F.R. Part 60, Prevention of Significant
Deterioration ofAir Quality (PSD), 40 C.F.R. 52.21, and non-attainment New Source Review (NA NSR), 35 Ill.
Adm. Code Part 203.
GENERATION DATA
The generation data is contained in pages MWGOO24 through MWG000056 ofMidwest’s
information response. The Illinois EPA determined that certain generation data (i.e. information
regarding gross generation (Mwhr) and gross heat rate (BTU/GKwhr)) constituted confidential
business 9r trade secret information. The Illinois EPA denied trade secret protection to the
information regardingnet generation rate (Mwhr), net heat rate (BTU/NKwhr), and average coal
heat content (BTU/lb). The following is a discussion ofthe general rationale for denial and the
specific rationale for each category ofdata.
Within the statement ofjustification, the claimant must provide a detailed statement identifying
the persons or class ofpersons to whom the article has been disclosed.8 Midwest’s “detailed”
statement for generation data consisting ofthe following two sentences: “Midwest Generation
only provides this information net generation, etc., as needed, to its senior management and to
personnel in the following departments: market and trade, finance, operations and risk
management. Midwest Generation also provides this information, to the extent required, to
lenders and rating agencies.”
These cursory statements fail to address,
inter alia,
Midwest’s submittal ofthe type of
information at issue to governmental authorities that regulate the generation ofelectricity. Thus,
Midwest’s certification within the statement ofjustification was, at minimum, misleading,
erroneous, and insufficient. Additionally, the certification specifically states that “upon
information and belief, the Confidential Information has not been published or disseminated, and
has not otherwise become a matter ofgeneral public knowledge.” Midwest’s certification fails
to acknowledge that information substantially identical to the information contained in the
subject documents had in fact been published or disseminated and become a matter ofpublic
knowledge. Once again, the certification was, at minimum, misleading, erroneous, and
insufficient.
Regarding the competitive value of generation data, under 35 Ill. Adm. Code 130.203(d),
Midwest must provide a detailed discussion concerning the competitive value ofinformation
claimed trade secret. For generation data, Midwest states “this information defines Midwest
AnGeneration’sarticleis consideredcompetitivetradepositionsecretinifthethemarketplacestatementofjustificationand,thus,possesses
demonstrates
competitive(italicsvalue.”added)9
that the article has competitive value.’0 A single sentence assertion of competitive value can
hardly be construed as a demonstration. Midwest does not explain the competitive value ofnet
generation rate, net heat rate, or average coal heat content individually, but rather makes a
blanket assertion. As discussed below, to the extetit the information is publicly available, it
cannot by definition have competitive value as confidential information.
~35
Ill. Adm. Code 130.203(b)
~Part ll.A ofMidwest’s statement ofjustification dated January 23, 2004
‘°
35
Ill. Adm. Code 130.208(a)(2)(B)
Net Generation Rate
The Illinois EPA denied trade secret protection to the net generation rate dataon the grounds that
the information is a matter ofpublic knowledge, and as such has no competitive value. The
Illinois EPA’s position is supported by the fact it was able to locate the net generation
information for each ofMidwest’s coal-fired generating units on a publicly accessible federal
government website.~~
Additionally, the Illinois EPA also considers the information emission data as it indirectly relates
to emissions from each unit. Inparticular, an increase in generation would reflect an increase in
operation ofa unit and its accompanying emissions. As such, generation data constitutes data
that is relevant to determining whether the second test for a modification has been satisfied, i.e.,
an increase in emissions. In this regard, as generation data is provided on an annual basis, it is
relevant to the occurrence of a major modification, pursuant to PSD or non-attainment NSR.
Net Heat Rate
Regarding net heat rate, the Illinois EPA denied trade secret protection as, the information is a
matter ofpublic knowledge. Net heat rate can be derived by information available to the public.
Information that is available to the public includes, but is not limited to, information reported to
the federal government, information reported to the Illinois EPA, and information contained in
Midwest’s various construction and operating permits. The Illinois EPA maintains that such
information cannot be ofcompetitive value if it is discernable through simple calculations.
Additionally, the information is considered emission data. In particular, an improvement in heat
rate of a unit indicates that change has occurred at the unit that has reduced the amount offuel
consumed per unit of electricity generated. This is indicative ofa possible physical change or
change in the manner of operation of a unit. It is also indicative ofa possible increase in
emissions as a unit that operates more efficiently may be utilized more, compared to other units
that are less efficient.
Average Coal Heat Content
“
In fact, contrary to Midwest’s assertion in its July 1, 2004 motion to partially reconsider the Board’s May 6, 2004
order, counsel for the petitioner was put on notice of the website. The Illinois EPA also discussed with counsel,
prior to issuing its trade secret determination, the sufficiency of its claim.
As with the net generation rate and net heat rate data, average coal heat content datais also
publicly available information. Through applicable federal and state reportingrequirements,
Midwest is required to submit information regarding the average coal heat content.
Furthermore, average coal heat content is considered emission data as it indirectly relates to the
rate ofpollutants emitted at each ofMidwest’s coal-fired generating units. In particular, this
information is needed to determine the amount of coal burned in a boiler from data heat input to
a unit or a unit’s heat rate.
CAPITAL PROJECT LIST
The Illinois EPA denied trade secret protection to all information contained in the capital project
list submitted by Midwest in response to USEPA’s information request, except for the work
order numbers.’2 The Illinois EPA denied trade secret protection to information contained in the
capital project list, as some ofthe information is publicly available, Midwest failed to
demonstrate that any ofthe information is ofcompetitive value, and much ofthe information is
emission data as it is necessary to determine compliance.
Specifically, as evidenced in the record filed in this matter by the Illinois EPA, a number ofthe
projects identified in the capital project list that are claimed trade secret are subject to permitting
requirements. For these projects, project details are found in the publicly available applications
for state construction permits or the construction permits or subsequently issued operating
permits themselves contained in the Illinois EPA’s files; and similar details are found in
submissions made to other government entities, including, for example, the Illinois Commerce
Commission. The competitive value ofthe information in the project list is cast in serious doubt
not only by the public availability of the particular information at issue in government filings, but
also by the ready availability ofsimilar information to the public in ongoing NSRIPSD
enforcement cases and like matters.
Midwest contends that information contained in the capital project list possesses competitive
value as, if disclosed, competitors could determine its environmental control strategies and assess
whether the projects would shift its cost position in the marketplace. Furthermore, Midwest
suggests that the information would allow competitors to predict future maintenance costs giving
them a competitive advantage. Lastly, Midwest suggests that competitors could use the
information regarding costs ofcertain equipment to negotiate more favorable prices with
vendors, resulting in harm to its competitive position. Midwest failed to articulate and expound
upon the aforementioned blanket statements thereby failing to make a sufficient demonstration of
competitive value. The discussion ofcompetitive value is not correlatedwith any particular
project or information rather the discussion applies generally to all ofthe information in the
capitalproject list.
12 Colunm 2 contains the work order number, which the Illinois EPA determined is confidential business
information. Specifically, the work order number does not constitute emissions data and is not necessaryto
determine the source’s compliance status (e.g., NSRJPSD applicability). Rather, the work order number assigned by
Midwest could be used solely for internal purposes.
Moreover, the capital project list generally contains emission data. Operational changes at a
facility constitute emission data as such activities may be physical or operational changes to
emission units, and meet the first test for determining whethermodifications under NSR have
occurred. The capital projects list also contains information describing projects that is relevant
(although not sufficiently presented) to determining whetherphysical changes or changes in the
method of operation.’3
.!~
L~4
‘
.~41t4L~-
Chris Pressnall
Assistant Counsel
Division ofLegal Counsel
Illinois EPA
Cc: Fred W. McCluskey, Vice-President, Midwest Generation EMB, LLC
~ Wisconsin Electric Power Co. v. Reilly, Nos. 88-3264 and 89-1339, United States Court ofAppeals for the
Seventh Circuit (1990).
CERTIFICATE OF SERVICE
I, TERRY COTTON, an employee ofthe Illinois Attorney General’s Office,
hereby certify that I caused to be served this
30th
day ofNovember 2004, the foregoing
Midwest Generation EME, LLC Clarification ofTrade Secret Determination upon the
persons listed on said Notice by personal service on or before
5:30
p.m.
—
.~--~2 //
TERRY COTTON
Subscribed and Sworn before me this
30th day ofNovember, 2004.
N4tary C~1~ALSEAL
3
~
~HYLL~SDU~!TON
~ NOTARY PUBLIC, STATE OF ILLNOIS
L~ISSfONEXPIRES 12-7-2004
