ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

‘18,

2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF TIlE STATE OF ILLINOIS

MIDWEST GENERATION, LLC,

FISK GENERATING STATION

Petitioner,

ILLINOIS

ENVIRONMENTAL

PROTECTION AGENCY,

Respondent.

To:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, illinois

60601

Bradley P. Halloran

Hearing Officer

James

R. Thompson Center,

Suite

11-500

100 West Randolph Street

Chicago, Illinois

60601

)

)

)

)

)

PCB No. 2006-057

)

(CAAPP Pennit Appeal)

)

)

)

)

)

Sheldon A. Zabel

Kathleen

C. Bassi

Stephen J. Bonebrake

Joshua R. More

Kavita M. Pate!

Schiffllardin, LLP

6600

Sears Tower

233

South Wacker Drive

Chicago, illinois 60606

PLEASE TAKE NOTICE that I have today electronically filed with the Office of

theClerk of the illinois Pollution Control

Board the APPEARANCES, MOTION IN

OPPOSITION TO PETITIONER’S REQUEST FOR STAY and AFFIDAVIT ofthe

Respondent, Illinois Environmental Protection Agency, a copy of which is herewith

served upon the assigned Hearing Officer and the attorneys for the Petitioner.

Dated: November 18, 2005

Illinois Environmental Protection Agency

1021

North Grand Avenue East

P.O. Box

19276

Springfield,

Illinois 62794-9276

(217) 524-9137

Respectflully submitted by,

Robb H. Layman

V

Assistant Counsel

v.

NOTICE

---

ELECTRONIC FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER 18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL

BOARD

OFTIlE STATE OF ILLINOIS

MIDWEST GENERATION,

LLC,

)

FISK

GENERATING

STATION

)

)

Petitioner,

)

)

PCB No.

2006-057

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Robb H. Layman and enters his appearance on behalfofthe

Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, as one of its

attorneys in the above-captioned matter.

Respectfully submitted by,

Robb H.

Layman

Assistant Counsel

Dated: November 18, 2005

Illinois Environmental Protection Agency

1021

North Grand

Avenue

East

P.O. Box

19276

Springfield, illinois 62794-9276

(217) 524-9137

---

ELECTRONIC FILING,

RECEIVED, CLERKS

OFFICE,

NOVEMBER 18, 2005

BEFORE

TilE ILLINOIS POLLUTION CONTROL

BOARD

OF THE STATE OF ILLINOIS

MIDWEST GENERATION, LLC,

)

FiSK GENERATING STATION

)

)

Petitioner,

)

)

PCB No.

2006-057

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Sally Carter and enters her appearance on behalfofthe

Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, as one ofits

attorneys in

the

above-captioned

matter.

Respectfully submitted by,

Sally C~rter

Assistant Counsel

Dated: November 18, 2005

Illinois Environmental Protection Agency

102! North Grand Avenue East

P.O. Box

19276

Springfield, Illinois 62794-9276

(217) 782-5544

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE, NOVEMBER 18,2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOAR)

OF

THE

STATE OF ILLINOIS

MIDWEST

GENERATION,

LLC,

)

FISK GENERATING

STATION

)

)

Petitioner,

)

)

PCB No. 2006-057

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

MOTION IN OPPOSITION TO

PETITIONER’S REQUEST FOR STAY

NOW COMES the Respondent, ILLINOIS ENVIRONMENTAL

PROTECTION

AGENCY (“illinois EPA”), by and through its attorneys, and moves the illinois Pollution

Control Board (“Board”) to deny the Petitioner’s, MIDWEST GENERATION, LLC,

(hereinafter “Midwest Generation” or “Petitioner”), request for a stay ofthe effectiveness

ofthe Clean Air

Act

Permit Program (“CAAPP”) permit issued in the above-captioned

matter.

INTRODUCTION

Acting in

accordance with its

Illinois Environmental Protection Act (hereinafter “Act”),

415 ILCS 5/39.5(2004),

the

illinois

EPA issued a CAAPP permit to Midwest

Generation

on September 29,

2005.

The

permit authorized

the operation ofan

electrical power generation facility known

as

the Fisk Generating Station.

The facility is located at 1111

West

Cermak

Chicago,

Illinois.

I

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ELECTRONIC

FILING, RECEIVED, CLERKS

OFFICE,

NOVEMBER

16, 2005

On November

2,

2005,

attorneys for

the

Petitioner

filed this appeal

(hereinafter

“Petition”) with the Board challenging certainpermit conditions containedwithin the

CAAPP permit

issued by the illinois EPA.

The Illinois EPA received an electronic

version ofthe appeal

on

the

same date.

Formal notice of the appeal was served upon the

illinois EPA on November 4, 2005.

As part

of

its Petition, Midwest Generation seeks a

stay

of

theeffectiveness ofthe

entire CAAPP permit, citing two principal grounds

for

its requested relief,

First,

Petitioner alleges that the CAAPP permit is subject to the automatic stay provisionofthe

illinois Administrative Procedure Act (“APA”),

5

ILCS

100/i0-65(b)

(2004,).

As

an

alternativebasis for a blanket stay ofthe CAAPP permit, Petitioner alleges facts intended

to support the Board’s use ofits discretionary stay authority.

In accordance with the Board’s procedural requirements, the fllinois EPA may file

a response to

any motion within 14 days after service ofthe motion.

See,

35

Code 101.500(d).

ARGUMENT

The illinois EPA urgesthe Board

to denyPetitioner’s request for a stay of the

effectiveness ofthe entire

CAAPP permit.

Forreasons that

are explained in

detail below,

Petitioner cannot avail itselfofthe protections afforded by the APA’s automatic stay

provision

as a matter of law.

Further, Petitioner

has

failed to demonstrate sufficient

justification for the Board to

grant

a blanket stay ofthe CAAPP permit under

its

discretionary

stay

authority.

Givqn

the absence of an alternative request by.Petitioner

seeking either a stay of

contested CAAPP permit conditions or any otherrelief deemed

just

and

appropriate, theBoard

should

decline

to

grant any

stay

reliefwhatsoever.

2

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ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER

18, 2005

I.

The CAAPP permit

issued

by

the Illinois EPA

should

not

be stayed in

its

entirety by reason ofthe

APA’s automatic stay provision.

The

first

argument raised by Petitioner maintains that the CAAPP permit in this

proceeding is subject to the automatic stay provision ofthe APA.

See, Petition at

pages

5-6.

The automatic stay provision underthe

APA

governs administrative proceedings

involving licensing,

including a “new license

with

reference to

any

activity ofa

continuing nature.”

See,

5 JLCS

100/10-65(b).

The CAAPP permit at issue in

this

proceeding governs emissions-related activities at an existing, major stationary source in

illinois.

Accordingly, the illinois EPA does not dispute

that the CAAPP permit is

synonymous

with

a license

that

is ofa continuing nature.

See also,

5 JLCS 100/1-35

(2004)(dcfining

“license”

as the “whole or

part

of

any

agency

permit...

required by

law”).

In its argument, Petitionerpostulates that the APA automatically stays

the

effectiveness of the CAAPP permit until after

the Board

has rendered a final adjudication

on the

merits

ofthis appeal.

Citing to a Third District Appellate

Court ruling from over

two decades ago, Petitioner reasons that the MA’s stay provision

continues to apply

throughout the duration ofthepending appeal because

it is the Board, not the illinois

EPA,

that

makes

the

“final

agency decision” on the permit.

See, Borg-Warner

Corporation

v. Moray,

427 N.E.2d 415,56111. Dec. 335 (3~

Dist.

1981).

The stay

provision would also apparently ensure that the Petitioner continues to abideby the terms

of

“the existing license which

shall continue in NIl force and effect.”

See,

5 JLCS

100/1 -65(b)(2004).

In this case, that “existing license” is the underlying State operating

3

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ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE,

NOVEMBER 18, 2005

permits’ that have been separately governing the facility’s operations since the Illinois

EPA’s original receipt ofthe permit application.

See,

415 ILCS 5/39.5(4)(b)(2004).

The

Borg-Warner

decision upheld the APA’s automatic stay provision in the

context of a renewal for a National Pollutant Discharge Elimination System (“NPDES”)

permit sought before the illinois EPA.

Notably, the courtobserved:

“A final decision, in the sense ofa final and binding decision coming out of the

administrative process before the administrative agencies with decision making

power, will not be

forthcoming in the instant case until the PCB rules on the

pennit application.”

Borg-Warner,

56

III. Dec. at 341.

The illinois EPA concedes that the

Borg-Warner

decision may still reflect good law and that it probably warrants, in the appropriate case,

application ofthe doctrine of

stare decisis

by Illinois courts.

Moreover, the illinois EPA

observes that the ruling is apparently in perfect harmony with other subsequent decisions

by illinois courts that addressed the respective roles ofthe illinois EPA and the Board in

permitting matters under the Act.

In this regard, the illinois EPA is frilly cognizant ofthe

“administrative continuum” that exists with respect to theBoard

in most permitting

matters, and the CAAPP program itself does not reveal the General Assembly’s

intentions to change this administrative arrangement.

See. illinois EPA

v. Illinois

Pollution

Control Board,

486 NE2d

293, 294 (3~

Dist.

1985),

affirmed, illinois EPA v.

illinois Pollution Control Board,

503 NE2d 343,

345

(III.

1986);

ESG Watts, Inc.,

v.

Illinois Pollution

Control Board,

676 N.E.2d 299,

304 (3” Dist. 1997).

Thus, it is the

Board’s decision in reviewingwhether a CAAPP permit should issue that ultimately

determines when the permit becomes final.

In limited situations,

it

is possible that a facility’s operation during the pending review of the CAMP

permit application was also authorized in a State construction permit.

4

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ELECTRONIC

FILING, RECEIVED, CLERK’S

OFFICE,

NOVEMBER

18, 2005

While

the

Borg-Warner

opinion may offer some interesting reading,

it does not

provide a proper precedent in this case.

This conclusion can be arrived because the APA

simply does not apply to these CAAPP permit appeal proceedings.

For one reason, the

APA’s various provisions should not apply where the General Assembly has effectively

exempted them from a particular statutory scheme.

One example ofthis exercise of

legislative discretion is found with administrative citations, which under Section

31.1 of

the Act are not subjectto the contested case provisions ofthe APA.

See. 415 ILCS

5/31.i(e)(2004).

In the case ofthe Act’s CAAPP provisions, a similar basis for

exemption is providedby the permit

severability requirements that govern the Illinois

EPA’s issuance ofCAAPP permits.

Section 39.5(7) ofthe Illinois CAMP sets forth requirements governing the

permit content for every CAAPPpermit issued by the illinois EPA.

See generally, 415

ILCS5/39.5(7,fl’2004).

Section 39.5(7)(i) oftheAct provides that:

“Each CAAPP permit issued under subsection 10 ofthis Section shall include a

severability clause to ensure thecontinued validity ofthe various permit

requirements in the event ofa challenge to any portions ofthe permit.”

415 ILCS 5/39. 5(7)(i) (2004).

This provision represents something more thanthe trivial

or inconsequential dictates to an agency in its administration of a permit program.

Rather, it clearly contemplates a legal effect upon

a permitting action that extends beyond

the scope ofthe permit’s terms.

In otherwords, the General Assembly was not simply

speaking to the illinois EPA but, rather, to a larger audience.

By observing that

a

component ofa CA.A1P permit shall retain a “continued validity,” lawmakers clearly

proscribed that the uncontested conditions of a CA.APP permit must continue to survive

notwithstanding a challenge to the permit’s other terms.

This language signifies an

5

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ELECTRONIC

FILING, RECEIVED,

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NOVEMBER

18, 2005

unambiguous intent to exempt some segment ofthe CAAPP permit

from .any kind of

protective stay during the permit appeal process.

For

this reason, the automatic stay

provision ofthe MA cannot be said to

govern CAAPP permits issued pursuant to the

Act.

The Board should also reject the Petitioner’s automatic stay argument on entirely

separate grounds.

Petitioner suggests that the APA’s automatic stay provision applies by

virtue ofthe licensing that

is being obtained through the CA.APP permitting process.

However, the APA contains a grandfathering clause that specifically exempts an

administrative agencythat previously possessed “existing procedures on July

1, 1977” for

contested case or licensing matters.

See. 5 ILCS 100/1-5(a)(2004).

Where such

provisions were in existence prior to the July

1,

1977, date, those existing provisions

continue to apply.

Id.

Procedural rules have been in place with the Board since shortly afterits formal

creation.

Because the permitting scheme established by the Act contemplated appeals to

the Board, procedural rules were created in those early years to guide the Board in its

deliberations.

Similar to the current Board procedures for permitting disputes, the earlier

rules referenced the Board’s enforcementprocedures in providing specific requirements

for the permit appeal process.

They were then, as they are today, contested case

requirements by virtue oftheir very nature.

The earliest version ofthe Board’s procedural regulations was adopted on

October 8,

1970 in the R70-4 rulemaking and was subsequently published by the Illinois

Secretary ofState’s office as “Procedural Rules.”

Those rules included requirements for

permit appeals, effective through February

14,

1974, and they required suchproceedings

6

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ELECTRONIC

FILING, RECEIVED,

CLERK’S OFFICE,

NOVEMBER 18, 2005

to

be

conducted according to the Board’sPart

ifi

rules

pertaining to enforcement.

See,

Rule 502.

In contrast to the Regulatory and Nonadjudicative Hearings and Proceedings,

the Enforcement Proceedings ofPart El

contained a plethora ofcontested case

requirements, including provisions for the filing ofa petition (i.e., Rule 304),

authorization for hearing (i.e., Rule

306),

motion practice (i.e., Rule 308), discovery (i.e.,

Rule 313), conduct ofthe hearing(Rule 318), presentation ofevidence (i.e., Rule 321),

examination ofwitnesses (i.e., Rules 324,

325 and 327) and final disposition (i.e., Rule

322).

A later version ofthese rules, including amendments, was adopted

by

theBoard

on August 29, 1974.

The “Procedural Rules” that originally guided the Board in enforcementcases and

permit appeals formed the basic framework for thecurrent-day version ofthe Board’s

procedural regulations promulgated at

35

Ill. Adm. Code 101-130.

Although the Board’s

procedural rules may have evolved and expanded over time, the core features of the

adversarial process governing these cases haveremained substantiallythe same,

including those rules governing CAAPP permit appeals.

Because the Board had such

proceduresin place prior to July

1, 1977, those procedures effectively secured the

Board’s exemption from the APA’s contested ease requirements.

And so long asthose

underlying procedures historically satisfied the grandfathering clause, it should not matter

that the Act’s

CAAPP

program was enacted some twenty years later.

After all, it is the

procedures applicable to contested cases and their point of origin that

is relevant to this

analysis, not the advent ofthe permitting program itself.2

2

Petitioner may counterthat the

Borg-Warner

decision is at

odds with this argument and that part

of

the

appellate court’s ruling held that

the APA’s grandfathering clause did not apply to the Board’s rules for the

NPDES permit program. The court’s discussion on the issue of the gnndfatbering clause is inapposite here.

The N1’DES

rules

at issue were written

in

a way that conditioned

their effectiveness upon a future event.

7

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ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE,

NOVEMBER

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II.

The CAAPP permit issued by the Illinois EPA should not be stayed

In

its

entirety by

reason of Petitioner’s alleged justifications.

Separate and apart from its APA-related argument, Petitioner offers

the Board an

alternative basis for granting a blanket stay ofthe CAAPP permit.

Specifically,

Petitioner suggests that the Board stay the entire CAAPP pemilt as part of its

discretionary stay authority.

See, Petition at pages

6-8.

While the reasons put forward

by Petitioner might have sufficed to justifS’

a stay ofthe CAAPP permit’s contested

conditions had one been sought, Petitioner fails to demonstrate a clear and convincing

need for a broader stay.

Even if the Petitionercould muster more persuasive arguments

on

this issue, the illinois EPA questions whether such an all-encompassing remedy is

appropriate under any circumstances.

Notwithstanding the Board’s recent practice in

otherCAAPP appeals, the illinois

EPA has come to regard

blanket stays of

CAAPP

permits as incongruous with the aims ofthe illinois CAAPP and needlesslyover-

protective in light ofattributes common to these appeals.

Section

105.304(b) of Title 35 ofthe Board’s procedural regulations provides that

a petition for review ofa CAAPP permit may include a requestfor stay.

TheBoard

has

frequently

granted

stays

in permit proceedings, often citing to the various factors

considered by illinois

courts

at common law.

The

factors that

are usually examined by

the Board include the existence ofa clearly ascertainable

right that warrants protection,

irreparable

injury

in

the absence ofa stay, the lack ofan

adequate

legal remedy

and a

When the event actually took place, the

effectiveness

ofthe rules

occurred

after the July

1,

1977, date

established in the

grandfathering

clause.

More

importantly,

in addressing an

issue

that was not

central to

the appeal, the appellate court appears to have erroneously placed too much

emphasis

on

the

substantive

permitting procedures of the NPDES

program,

rather than those procedures applicable to

the

Board’s

contested case hearings.

A proper construction of the

A.PA

demands that the

focus

be

placed

on the

existing

procedures “specifically for contested cases or licensing.”

5

ILCS

100/I -S(a)(2004).

8

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ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE,

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probability of success on the merits ofthe controversy.

See, Bridgestone/Firestone Offi

road Tire Company

v.

Illinois

EPA,

PCB 02-3 1

at page 3 (November

1,2001);

CommunityLandfill Company and City

ofMorris

v. illinois EPA,

PCB No. 01-48

and 01-

49 (consolidated)

at page

5

(October 19, 2000), citing

Junkunc v.

S.J. Advanced

Technology & Manufacturing,

498 N.E.2d

1179

(15t

Dist.

1986).

However, the Board has

noted that its consideration is not confined exclusively to those factors normust each one

ofthose factors be considered by theBoard in every case.

See, Bridgestone/Firestone

at

page

3.

The

Board has commonly evaluated stay requests with an eye toward the nature

ofthe

injury

that might

befall an applicant from having

to

comply with permit conditions,

such

as the compelled

expenditure of “significant resources,”

Abitec Corporation v.

Illinois EPA,

PCB

No; 03-95

at page

1

(February

20, 2003), or the effectual loss of

appeal

rights prior

to a

fmal legal

determination.

Bridgestone/Firestone

at

page

3.

The

Board has also afforded special attention

to

the “likelihood of

environmental

harm”

for

any

stay that may be

granted.

See, Bridgestone/Firestone

at page

3;

Abitec Corporation

at

I;

Community Landfill Company and City of

Morris

v. illinois EPA,

at page 4.

i.

Consideration of traditional factors

Petitioner’s Motion touches, albeit sketchily, on some ofthe relevant factors in

this analysis.

See,

Petition at

pages

6-8.

The illinois EPA generally accepts that

Petitioner should not be

required

to expend exorbitant costs in complying with challenged

monitoring,

reporting or record-keeping requirements of the CAAPP permit until after it

is provided its

proverbial “day

in court.”

Petitioner’s

right

ofappeal

likewise should not

be cut short or

rendered

moot because it

was

unable to obtain a legal

ruling

before being

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required to comply with those terms ofthe permit that

are deemed

objectionable.

The

Illinois EPA

recognizes

these reasons as

a

legitimate basis for authorizing a stay of

permit conditions contested

on appeal. However, they are not at

all

instructive to

Petitioner’s claim

that

a stay of theentire

CAAPP

permit is needed.

Judging by a fair reading ofthe Petition, Petitioner

has

challenged a relatively

small

number

oftheconditions containedin the overall CAAPP permit, thus leaving the

lion’s

share ofthe permit conditions

unaffected

by the appeal.

Much ofthe gist of

Petitioner’s appeal

pertains

to “periodic monitoring,” including a number ofprovisions

dealing with emissions testing, reporting,

record-keeping and monitoring ofemissions

that are purportedly beyond the scope ofthe

illinois

EPA’s

statutory

permit

authority.

If

the vast majority ofthepermit’s terms are uncontested, it cannot logically follow that the

absence ofa stay for those conditions will prevent thePetitioner

from exercising a

right

ofappeal.

Similarly, it is difficult to discern

why

Petitioner’s compliance with

uncontested permit conditions would

cause

irreparable harm,

especially if one

can

assume, as

here, that the

crux

of CAAPP permitting requirements were carried over from

previously-existing

State

operating permits.3

The Illinois EPA

does

not dispute

that the Clean Air

Act’s

(“CAA”)

Title V program,

which formS the

framework

for the Illinois

CAAPP,

requires

only

a marshalling ofpre-existing “applicablerequirements”

into a single operating permit for a major source and

that

it does not generally authorize flew substantive

requirements.

See,

Appalachian Power

Company v. illinois

EPA,

208 F.3d

1015, 1026-1027

(D.C.

Circuit,

2000);

Ohio Public

interest

Research

Group

v.

Whitman,

386 F.3d

792, 794

(6th

Cii.

2004);

in re: Peabody

Western

Coal

Company,

CAA

Appeal No. 04-01, slip op. at 6

(EAR,

Febniary

18, 2005).

Aside from the

conditions lawfully imposed by

the

Illinois

EPA

for

periodic

monitoring

and

other miscellaneous matters,

the

remainder

of the

CAAPP

permit should be comprised of the pie-existing

requirements that

were

previously permitted.

A

casual

comparison of the

CAAPP

permit and the

Petition

suggests that the present

appeal only

calls into question a relatively small fraction of

permit

conditions contained in

the

overall

CAMP

permit

10

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ii.

Other

related factors

Petitionerargues that the absence ofa blanket stay would cause “administrative

confusion”because the uncontested conditions ofthe CAAPP permit would

remain in

effect while the challenged conditions would be governed by the “old state operating

permits.”

Petition at page

7.

The Illinois EPA takes exception to a key assumption in

the Petitioner’s argument.

In the Illinois EPA’s view,

thevestiges ofany fonner State

operating permits

for this CAAPP source dissipated upon the illinois EPA’s

issuance of

the CAAPP permit on September 29, 2005.

This area

of

discussion maybe

a significant

source ofPetitioner’s misunderstanding, thus explaining its confusion with theeffects of

a limited stay.

Section

39.5(4)(b)

states that

a CAAPP source must abideby the terms ofits

previous State operating permit, even though the permit may have expired, “until the

source’s CAAPP permit

has

been issued.”

See,

415 ILCS5/39.5(4)(b)(2004).4

A

few

subsections later, the statute provides that the CAAPP permit “shall upon becoming

effective supercede the State operating permit.”

See, 415

ILCS5/39.5 (4)(g)

(2004)

Taken together, these provisions indicate that permit issuance

and

permit effectiveness

fora CAA?P permit are synonymous and that any underlying State operating permit

becomes a nullity upon the aforementiotied occurrence.

The General Assembly could not

have reasonably intended for a source’s obligationto end upon permit issuance, only to

Petitioner also references

Section 9.1(t) of the Act

as

a

source

of

authority

for its

proposition that the

State operating

permit continues in

effect

until the

CAMP

permit

is issued.

See, Petition atpage 6.

This

assertion

is erroneous.

Section 9.1(1) applies only to New Source Review

permits

issued under the

authority

of

the

CAA,

not CAMP permits specifically governed by

Section

39.5.

Although the text of the

subsection is silent

with

respect to

this

distinction, it should be construed

with

referenceto

its

context

and

surrounding

provisions, which

are confined

entirely to specified CAP. programs.

Alternatively, to the

extent that the Act’s CAAPP requirements are more specific to

CAAPP permits, the provision found

at

Section

39.5(4)(b) would apply instead of the

more general provision under Section 9.1 (1).

11

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have

the

CAAPP

permit’s superceding

effect on the State operating permit delayed until

permit

effectiveness.

Petitioner apparently reads the above-referenced provisions as though they apply

to

theBoard’s final action

in this appeal.

See.

Petition a: page 6.

However, this

argument ignores other provisions ofthe Act that clearly depict the Illinois EPA as the

permit-issuer.

No clearer evidence ofthis intent can be found than the numerous

provisions ofSection 39.5(9) ofthe Act, which govern the United States Environmental

Protection Agency’s (hereinafter “USEPA”) participation and role in reviewing the

CAMP

permits.

See,

415 JLCS

5139.5(9,H’2004).5

Other

provisions ofthe Act similarly

establish that permit issuance denotes the action ofthe Illinois

EPA,

not the Board, in the

context ofCAAPP permitting.6

As previously mentioned, the Illinois EPA does not deny that the CAAPP

permitting

process is analogous to the type of “administrative continuum” recognized by

Jilinois courts in other permitting programs under the Act.

In this respect, the Illinois

EPA performs a role under the Illinois CAAPP that requires,

in essence,

a

defacto

issuance of a CAAP? permit.

The Board’s obligation in adjudicating whether the permit

should issue, in contrast, is a

dejure-likc

thnction that, while critical in terms of

See,

415 ILCS 5/39.5(’9)(b,)(noting

requirement

that

the

Illinois EPA shall not “issue” the proposed

permit

ifUSEPA provides

a

written objection

within the 45 day review period);

415

JLCS

5/39.5(9,)Q)(explaining that when the Illinois

EPA

is in receipt of

a USEPA objection arising

from

a

petition, the “Agency shall not issue

the permit”);

415

ILCS

S/39.5(9,)(g)(observing requirements

for

whenever a

IJSEPA

objection is received by the Illinois EPA following

its

issuance ofa permit afler the

expiration

of the 45-day review period and prior to receipt of an objection arising

from a petition).

Notably,

one such provision states

that the “effectiveness of a permit or

its

requirements” is

not stayed by virtue of

the filing of

a petition with USEPA.

See,

415

ILCS 5/39.$(’9)(/).

6

The

requirements

in Section 39.3(10), entitled

“Final

Agency Action,”

recognize the standards

for

permit

issuance by the

Illinois

EPA.

4)5

ILCS 3/39.5(10)

(2004).

Similarly, the review provisions for Tide

V

permits,

codified

at

Section 40.2,

focus on

a permit denial or a

grant

of

a permit

with

conditions

as a

basis

for appeal to the Board,

See,

415 JLCS 5/40.2(a)(2004).

The after

provisions even go so

far as to

reference “final

permit

action” in relation

to

the

Illinois EPA’s

permit decision,

Id.

12

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determining

whether a

permit

issued

by

the

Illinois

EPA becomes

final,

should

not

color

the meaning of other legal tenns.7

The issuance or effectiveness ofa CAMP permit is

functionally distinct from th~

legalisms associated with when a CAAPP permit becomes

final.

Even putting aside the legal semantics posed by this

issue, the thrust of

Petitioner’s argument misses its mark.

Any confusion stemming from the appeal phase

oftheTitle V program should be fairly modest compared to

thepast.

Prior to the

enactment ofthe CAA Amendments of 1990, states

issued permits under a patchwork of

various programs.

In Illinois

and elsewhere, numerous permits

for separate or discrete

pollutant-emitting activities would often exist for an individual source ofmajor emissions

and they frequently did not address the applicability of all otherCAA or state (i.e.,

State

Implementation Program (“SW”)) requirements.8

The Title V operating permit program

ensured that all of

a

major source’s applicable state

and

CAA-related requirements would

be

brought together into

a single, comprehensive document.

In doing so,

the

legislation

sought to minimize theconfusion brought

about from the absence of a uniform federal

permitting

system.9

By trying to breath life into the State operating permits beyond the

date ofthe Illinois EPA’s permit issuance, Petitioner’s argument would actually prolong

one of the very problems that the Title V permitting scheme

was

meant to remedy.

As a

practical

matter,

Petitioner’s

requested

reliefbelies the notion

that former State operating permits

continue to govern

the facility’s operations

until the Board issues

its

final

ruling

in

this

cause.

After all,

it

is

the

CAAPP permit issued by

the

Illinois EPA from which

the Petitioner is

seeking a stay.

$

See.

David P. Novello.

The

New Clean Air

Act Operating

Permit Program:

EPA’s Final Rules,

23

Environmental

Law

Reporter 10080,

10081-10082 (February 1993).

9h/.

13

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Petitioner also mentions in passing that the Illinois EPA’s failure to provide a

sufficient statement ofbasis forthe CAAPP permit is another reason for staying the entire

permit.

Petition

a: page

7.

BecausePetitioner treats this issue separately in its Petition,

the Illinois EPA will not fully address themerits of the argument in this Motion.

However, the illinois EPAwill briefly respondto the issue as it relates to the Petitioner’s

request for stay.

The statement ofbasis envisioned by the statute is an informational requirement

that

is meant to facilitate both the public and

USEPA’s

understandingofthe pennit

decision in the draft phase ofpermitting.

See,

415 ILCS 5/39.5(8)(b)(2004).

It is not a

part of, nor does it otherwise

affect,

the content ofthe CAAPP permit and

it

does not bind

or impose legal consequences in thesame manner that a permit itself does. The Illinois

EPA generally does not believe that any perceived inadequacies in the statement ofbasis

can

lawfully render the entire CAAPP permit defective.

In this instance, the Petitioner identified its grievances with respect to the CA.APP

permit’s conditions notwithstanding the alleged flaws in the underlying statement of

basis.

To the extent that something contained in a statement ofbasis is found

objectionable, or is left out altogether, the Illinois EPA suggests that the mechanism for

challenging it

runs

to the underlying permit condition, not the statement itself.

The

Petitioner should not be heard to

complain

of theinadequacies ofthe statement when the

basis that gives rise to the appeal stems

from apermit’s

conditions, not the deliberative

thought-processes of thepermitting agency.

As such, the Illinois EPA does not

construe

a statement of basis as affecting thevalidity ofthe final

CAAPP

permit nor as a reason

for voiding the

Illinois EPA’s

fmal permit decision.

If

such challenges were recognized

14

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by the Board, they could serve as a pretext for preventing the final issuance of a CAAPP

permit and result in perpetual litigation over a largely

ministerial

agency function.

The Illinois EPA is ultimately

prepared

to

argue

that the statement ofbasis that

was

prepared

in conjunction with the CAAPP permit was sufficiently adequate as to

comply with the Act.

Alternatively, the Illinois EPA is

prepared

to contend that the

statement ofbasis requirement is predominantly procedural in nature, is confined to the

preliminarystages ofthe permitting process

and arguably lacks

sufficiently intelligible

standards

as to serve as a basis for enforcement.

In

any

event, the Board should deny the

Petitioner’s request for stay on

any

grounds relatingto

this

issue.

On the whole, the

Petitioner’s charge

that

the statement ofbasis affects the entire permit is unsupported by

law and fails to demonstratea probability of success on the

merits

ofthe controversy.

iii.

Significance ofprior Board rulings

The Board has granted numerous

stays

in past

and

pending

CAAPP permit

proceedings.

For the most part, the extent ofthe relief granted

has

been a function ofthe

relief sought by the

petitioning

party.

In several cases, the Board

has

granted

stays

of the

entire CAAPP permit, usually doing so without much substantive discussion.’°

Curiously,

all

excepting one oftheprior cases involving blanket stays were brought by

petitioning parties represented by the same law finn.

In other

CAAPP appeal cases,

the

Board

granted

stays for the contested permit conditions, again mirroring the relief sought

‘°

See, Lone Star

Industries,

Inc., v. Illinois

EPA,

PCB No. 03-94, slip

opinion

at

2,

(January

9,

2003);

Nielsen v. Bainbridge, L.L.C.,

v.

illinois

EPA,

PCB No. 03-98,

slip opinion

at 1-2

(Febnsaiy

6,

2003);

Saint-Gobain

Containers, Inc.,

v.

illinois EPA,

PCR

No.

04-47, slIp opinion

at 1-2

(Novembe

6,

2003);Champion Laboratories, Inc.,

v.

Illinois

EPA,

ICR

No.

04-65, slip

opinion

~t 1

(January

8, 2004);;

Midwest Generation,

L.L. C.,

v. Illinois EPA,

PCB

No. 04-lOS,

slip opinion

at

I

(January

22,

2004);

Ethyl

Petroleum Additives,

Inc.,

v. Illinois EPA,

slip opinion at

1

(February

5,

2004);

Board of

Trustees

of

Eastern Illinois

University v. Illinois EPA,

PCB No. 04-110, slip

opinion

at

1

(February

5, 2004).

15

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by thepetitioning party.”

In a few

cases,

the Board does not appear to have

granted any

stay protection whatsoever, as the petitioning

party

apparently opted not to pursue such

relief.’2

In the majority ofthe afore-referenced cases, the Illinois

EPA

did not actively

participate in the stay motions

sought

before the Board due to the perennially-occurring

press ofother

matters.13

In doing so, the Illinois

EPA

clearly waived any

rights

to voice

objections to the stays

sought

and obtained in those cases.

Even in the absence ofa lack

ofresources, it is doubtful that the Illinois EPA would have articulated weighty concerns,

as

presently argued, with respect to the stay relief requested in

earlier cases.

However,

following the Board’s last occasion to act on

a blanket stay request in a CAAPP pennit

appeal, Illinois EPA officials became aware ofthe potential implications posed by stays

on the existing Title Vprogram approval!4

In the wake of

this discovery,

the fllinois

EPA is now compelled to observe that the Board’s earlier decisions affording blanket

stays to CAAPP permits arguably fell short of exploring all of the relevant considerations

~

See, Bridgestone/Firestone

Off-road Tire Company v. Illinois EPA,

PCB

02-31

at page

3

(November

1,

2001);

PPG

Industries,

Inc.,

v. Illinois EPA,

PCB

No. 03-82, slip opinion

at 1-2 (February 6, 2003);

Abitec

Corporation

v. Illinois EPA,

PCB

No. 03-95,

slip

opinionat

1-2

(February

20,

2003);

Noveon,

Inc.,

v.

illinois EPA,

PCB

No. 04-102, slip

opinion

at

1-2

(January 22, 2004);

Oasis

Industries,

Inc., v. Illinois

EPA,

ICR

No.

04-116, slip opinionat

1-2 (May 6, 2004).

12

See, XCTC Limited

Partnership,

v.

Illinois

EPA,

PCB

No. 01-46,

consolidated

with Georgia-Pacjfic

Tissue,

L.L.C.,

v.

illinois

EPA,

PCB

No.

01-51;

General

Electric Company v. Illinois EPA,

PCB No. 04-

115

(January 22,2004).

‘~

The

Illinois EPA did

file a joint

motion in support of

a stay request seeking protection for contested

conditions ofa

CAAPP permit

See, Abitec

Corporation

v. lilinois

EPA,

PCB No.

03-95,

slip opinion

at

I

-

2

(February

20, 2003).

~

Jim

Ross, a former Unit

Manager

for the

CAAPP

Unit

ofthe Division of

Air

Pollution

Control’s

Permits Section,

received an

inquiry

from a

USEPA/Region V

representative

in March of

2004 pertaining

to the broad

nature

ofthe stays

obtained in CAAPP permit appeal

proceedings before

the Board. This

initialinquiry led to

further discussion between

USEPA/Region V

representativesand the lllinois-EP-A.

regarding

the impact ofsuch

stays

on

the

severability

requirements

for CAMP

permits

set forth in 40

C.F.R. Part 70

and the Illinois

CAAPP.

(See,

Supporting Affidavit ofJim Ross attached

to

this Motion).

16

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necessary to the analysis.

Accordingly, the Illinois EPA urges the Board to reflect upon

additional

factors that have not previouslybeen

addressed

to date.’5

iv.

Statutory

objectives of CAAPP and common attributes of permit

appeals

As discussed earlier in

this

Motion, the flhinois

CAAPP

commands the Illinois

EPA to incorporate conditions into

a

CAAPP

pennit that address requirements

concerning the “severability” of

permit

conditions.

See,

415 ILCS 5/39. 5(7)(i)(2004).

To

this

end, every

CAAPP permit

is required to contain

a permit condition severing those

conditions challenged in

a subsequent permit appeal from the other permit conditions in

the permit.

The severability provision

is prominently displayed in the

Standard Permit

Conditions ofthe Petitioner’s

CAAPP

permit.

See, Standard Permit Condition 9.13.

should

also be

noted that the language from the Act’s CAAPP program mirors the

provision promulgated by USEPA

in

its regulations implementing Title V ofthe

CAA.

See,

40

C.F.R. §70.6(a)(5)(July 1, 2005

edition).

As is evident from the

statutory

language, the obvious legislative

intent

for

this

CAAPP provision is to “ensure the continued validity” ofthe ostensibly larger body of

permitting requirements

that

are

not being challenged on appeal.

The use ofthe word

“various”

in describing those conditions that

are

severable is especially important when

compared withthe later reference in the same sentence to “any portions” ofthepermit

that

are

contested.

Because the commonly understood

meaning of the adjective

“various”

is “ofdiverse kinds”

or “unlike; different,” this wording demonstrates a

legislative intent to

contrast

one discemable group ofpermit conditions (i.e., uncontested

‘~

It is noted that the Board’s prior rulings regarding blanket stays

of CAAPP permits have

been

granted

contingent upon

the Board’s

final action in the

appeal or “until the Board orders otherwise,”

17

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conditions) from theother another (i.e., contested conditions).

See,

The American

HeritageDictionary, Second College Edition; see also,

Webster’s New World Dictionary,

Third

College Edition

(describingprimary use ofthe

term

as “differing one from another;

ofseveral kinds”).

Given the clear absence of ambiguitywith this statutory text, no other

reasonable meaning

can

be attributed to its language.

The illinois EPA readily concedes that

the permit content requirements ofthe

CAA and theIllinois CAAPP

are

not directly binding on the Board.

However, while the

illinois EPA’s mandate under Section

39.5(7)(i)

ofthe Act’s CAAPP program does not,

on its i~ce,

affect the Board, theprovision could arguably be read as a limited restriction

on the Board’s discretionary stay authority in CAAPP appeals.’6

Implicit in thestatutory

language is an unmistakable expression aimed atpreserving the validity and effectiveness

of some segment of the CAAPP permit during the appeal process.

This legislative goal

cannot be achieved if blanket stays

arc

the convention.

Wherethe obvious intention of

lawmakers could be thwarted, reviewing courts must construe a statute in a manner that

effectuates its object and purpose.

See, F.D.LC. v. Nihiser,

799 F.Supp. 904 (CD. Ill.

1992);

Castaneda

v. Illinois Human Rights Commission. 547

N.E.2d 437 (III.

1989).

In

this instance, the Board should recognize an inherent limitation of

its

stay authority by

virtue ofthe Illinois CAMP’s severabilityprovision.

At the very least, the existence of

the provision should give pause to the Board’s recent

approachin evaluating stays in

CAAPP permit appeals.

~6

Any such restriction may

not

be absolute, as the Act’s permit content requirement

does not necessarily

rule

out the potential

merits

ofa

blanket stay where a permit is challenged in its entirety.

As previously

mentioned, the Illinois EPAdisputes the merits of Petitioner’s argument relating to a purported deficiency

in the

CAAPP permit’s statement of basis.

18

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It

is noteworthy that one of the chiefgoals ofthe CAA’s Title V program is to~

promote public participation, including the use ofcitizen suits to facilitate compliance

through enforcement.17

The severability requirement of the Part 70 regulations, which

formed the regulatory basis for Section 39.5(7)(i) ofthe flhinois CAAPP, can be seen as

an extension ofthis endeavor.

Blanket stays of CAAPP permits could arguably lessen

the opportunities for citizen enforcement in an area that

is teeming with broad public

interest.

Moreover, the cumulative effect ofstays sought by Petitioner

and

other coal-

fired CAMP permittees in other appeals would casta wide net.

Blanket stays ofthese

recently-issued CA.APP permits would effectively shield an entire segment ofillinois’

utilities

sector from potential enforcement based on Title Vpermitting, which was meant

to provide a more convenient, efficient mechanism forthe public to seek CAA-related

enforcement.

One last consideration in this analysis is the deliberate, ifnot time-consuming,

pace of permit appeals in general.

From past experience, the Illinois EPA

has

observed

that many permit appeals are ofa typethat could more aptly be described as “protective

appeals.” These types of appeals

are

frequently filed because a particular permit

condition affects an issue relating to on~going

or

future

enforcement proceedings.

Alternatively, these

cases

may entail some otherkind ofcontingency necessitating

additional permit review, a new permit application

and/or

obtaining a revised permit

from

theIllinois EPA.

Only rarely does a permit appeal actuallyproceed to hearing.

Based on the illinois EPA’s estimation, nearly all ofthe CAMP permit appeals

filed with the Board to date could be aptly described as “protective appeals.”

While a

“

See,

David

P. Novello,

The New Clean Air Act Operating Permit Program: EPA s Final Rules.

23

Environmental Law Reporter

10080,

10081-10082 (February 1993).

19

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handful

of

cases havebeen voluntarily dismissed from the Board’s docket, several of

these

cases

are, and will

remain, pending with

the Board formonths and/or

years

to

come, in part, becausethere

is no

abilityto resolve them independent oftheir related

enforcement

or permitting developments.

As the Illinois EPA is often an obligatory

participant in many of these types of cases, this argument is not meant to condemn the

practice.

Rather, the relevant point is that significant portions of a CAMP permit stayed

in

its

entirety will be delayed from taking effect, in spite ofbeating no relationship to the

appeal or

its

ultimate outcome.

To allow

this under circumstances

where petitioning

parties seldom appear to

desire

their

“day

in court” strikes the Illinois EPA as needlessly

over-protective.

•

CONCLUSION

For the reasons explained above, the Illinois EPA moves the Board to deny the

Petitioner’s request for a stay ofthe effectiveness ofthe CAAPP permit in its entirety.

Respectfully submitted by,

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

4

Robb H.

Layman

Assistant Counsel

Dated: November 18, 2005

illinois

Environmental

Protection Agency

1021 North Grand Avenue East

P.O.

Box

19276

Springfield, Illinois 62794-9276

(217) 524-9137

20

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STATE

OF

ILLINOIS

COUNTY OF SANGAMON

•

AFFIDAVIT

I, Jim Ross, being first duly sworn, depose

and

state that the followirti statements

set

forth in

this jnstrument

are true and correct, except as to matters therein stated to on

information and belief and,

as to such matters,

the undersigned certifies that he believes

the same to be true:

1.

•

I am.currentiyemployed

by the Illinois Environmental Protection Agency

(“Illinois EPA”) as a Senior

Publié Sen’ke

4dministrator professional engineer.

During

the early part of2004,

I

was

the Managerofthe Clean Air Act Permit

Program

(“CAAPP”) Unit

in the Division ofAirPollution Control’s Permit Section, whose offices

are located at

1021

North

Grand

Avenue East, Springfield, Illinois.

I havebeen

employed with the Illinois EPAsince May 1988.

2.

As

part

ofmy job responsibilities,

Iparticipated in frequent teleconference

calls with representatives from the United States Environmental Protection Agency

•

(“USEPA”) at~Re~ion

V in Chicago, Illinois, involving various ~endthg CAAPP permit

applications and issues

pertaining to the administration ofthe CAAPP program.

By

virtue

ofmy involvement in the CA.APP permit review process, I am

familiarwith

communications between USEPA/Region V and the Illinois EPA in March of2004

concerning an issue relating to stays obtained in CAMP permit appeals befofe the

Illinois Pollutioh Control Board.

The issue

was initially raised

by a representative from

USEPA/Region V, who expressed concern about the impact ofsuch stays upon thC

severability

requirements

of40 C.F.R

Part

70

and

the flhinois CAMP.

3.

I have read the Motion

prepared

by the illinois EPA’s attorneys relating to

---

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18, 2005

this

matter and,

fUrther,

fmd that the facts set forth in said

responses and

answers

are true,

responsive

and

complete to the best of my knowledge

and

belief.

Subscribed and Sworn

To Before Me

this

~~Day

ofNovember 2005

~Oek3r9JC

.~

OFFICIAL

BEN.

t

t.

BRENDA

BOEHNER

*

tmmm puetic, smm ociuaCfl

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CERTIFICATE OF SERVICE

I hereby certify that on the

18th

day

ofNovember 2005,

I did

send,

by

electronic

mail with prior

approval, the following instruments entitled APPEARANCES,

MOTION IN OPPOSITION TO PETITIONER’S

REQUEST

FOR

AFFIDAVIT to:

Dorothy

Gunn,

Clerk

illinois Pollution

Control Board

100

West Randolph

Street

Chicago, Illinois

60601

and a true and

correct copy ofthe same foregoing instrument, by First Class Mail with

postage thereon fully paid

and

deposited into thepossession ofthe

United States

Service, to:

BradleyP. Halloran

Sheldon A. Zabel

Hearing Officer

Kathleen C. Bassi

James R.

Thompson Center

Stephen J. Bonebrake

Suite 11-500

Joshua R. More

100 West Randolph

Street

Kavita

M.

Patel

Chicago, illinois

60601

SchiffFlardin, LLP

6600 Sears Tower

233

South Wacker

Drive

Chicago, Illinois 6060

Robb H.

Layman

Assistant Counsel