ELECTRONIC FILING,

RECEIVED,

CLERKS OFFICE,

NOVEMBER

18,

2005

BEFORE

THE ILLINOIS POLLUTION CONTROL BOARD

OF

THE

STATE OF ILLINOIS

MIDWEST GENERATION, LLC,

)

JOLIET GENERATING STATION

)

)

Petitioner,

)

•

)

PCB No. 2006-058

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

•

)

Respondent.

)

NOTICE

To:

Dorothy Gunn, Clerk

Sheldon A. Zabel

flhinoisPollution

Control Board

Kathleen C. Bassi

100 West Randolph Street

Stephen J. Bonebrake

Suite

11-500

Joshua R. More

Chicago, Jllinois

60601

Kavita M. Patel

SchiffHardin, LLP

BradleyP. Halloran

6600 Sears Tower

Hearing

Officer

233

South

Wacker

Drive

James R. Thompson Center,

Chicago, Illinois 60606

Suite

11-500

100 West Randolph Street

Chicago, Illinois

60601

PLEASE TAKE NOTICE that

I have today electronically filed with the Office of

theClerk ofthe 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 ofwhich is herewith

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

Respectthlly submitted by,

Robb IL 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,

CLERK’S OFFICE,

NOVEMBER 18,2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

MIDWEST GENERATION, LLC,

)

JOLIET GENERATiNG STATION

)

)

Petitioner,

)

)

PCB No. 2006-058

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.

RespectMly submitted by,

-p

~

Robb

H. Layman

(7

Assistant Counsel

Dated: November 18, 2005

Illinois Environmental Protection Agency

1021

North GrandAvenue East

P.O. Box

19276

Springfield,

Illinois 62794-9276

(217) 524-9137

---

ELECTRONIC FILING,

RECEIVED,

CLERKS OFFICE,

NOVEMBER

18,

2005

•

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF

THE

STATE OF ILLINOIS

MIDWEST GENERATION, LLC,

)

POWERTON GENERATING STATION

)

)

Petitioner,

)

)

PCB No. 2006-058

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW

COMES SallyCarter and enters her appearance on behalfofthe

Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, as one ofits

attorneys in the above-captioned matter.

Respectfully submitted by,

Sally ~afler

Assistant Counsel

Dated: November

18,

2005

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box

19276

Springfield, Illinois 62794-9276

(217) 782-5544

---

ELECTRONIC FILING,

RECEIVED,

CLERKS OFFICE,

NOVEMBER

18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF

THE

STATE OF ILLINOIS

MIDWEST GENERATION,

LLC,

)

JOLIET GENERATING STATION

)

)

Petitioner,

)

)

PCB No. 2006-058

v.

)

(CAMP 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

of the Clean Air Act Permit Program (“CAAPP”) permit issued in the above-captioned

matter,

INTRODUCTION

Acting in acco~lance

with its authority under

the

CA.APP provisions ofthe

illinois Environmental Protection Act (hereinafter “Act”),

415 JLCS 5/39.5(2004),

the

Illinois EPA issued a CAAPP permit to Midwest Generation on September 29, 2005.

The pemit authorized the operation ofan electrical power generation facility known as

the Joliet Generating

Station.

The facility is located at 1800

Channahon

Road in

Joliet,

Illinois.

1

---

ELECTRONIC FILING,

RECEIVED,

CLERK’S OFFICE,

NOVEMBER

18,

2005

On November 2, 2005, attorneys for the Petitioner filed this appeal (hereinafter

‘Petition”) with the Board challenging certain permit conditions contained within the

CAMP permit issued by the illinois EPA.

The illinois EPA received an electronic

version of the appeal on the same date.

Formal notice of the appeal was served upon the

Illinois EPA on November 4, 2005.

As part ofits Petition, Midwest Generation seeks a stay oftheeffectiveness ofthe

entire

CAAPPpermit, citing two principal grounds for its requested relief.

First,

Petitioner alleges that the CAAPP permit is subject to the automatic stay provision ofthe

Illinois Administrative Procedure Act (“APA”),

5 JLCS 100/l0-65(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 illinois EPA mayfile

a response to any motion within 14 days after service ofthe motion.

See,

35111

Adm.

Code 1 01.500(d).

ARGUMENT

The Illinois EPA urges theBoard to deny Petitioner’s request for a stay ofthe

effectiveness ofthe entire CAMP permit.

For reasons that are explained in detail below,

Petitioner cannot avail itselfof the~otetho~

afforded by the MA’s automatic stay

provision as a matter oflaw.

Further, Petitioner has failed to demonstrate sufficient

justification for the Board to

grant a blanket stay of the CAMP permit under its

discretionary stay authority.

Given the absence of an alternative request by Petitioner

seeking either a stay ofcontested CAMP permit conditions

or any other relief deemed

just and appropriate,

the Board should decline to grant any stay relief whatsoever.

2

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER 18,

2005

I.

The

CA.APP

permit

issued by the

Illinois EPA

should not be stayed

in

Its

entirety

by

reason

of

the

APA’s

automatic

stay provision.

The first argument raisedby Petitioner maintains that the CAMP permit in this

proceeding

is subject to the automatic stay provision ofthe MA.

See, Petition

at pages

5-6.

The automatic stay provision under the MA governs administrativeproceedings

involving licensing, including

a “new license with reference to any activity ofa

continuing nature.”

See,

5 JLCS 100/10-65(b).

The CAMP 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 CAMP permit is

synonymouswith a license that

is ofa continuing nature.

See also,

5 ILCS 100/1-35

(2004)(defining “license” as the“whole or partof any agency permit... required by

law”).

Inits

argument, Petitioner postulates that the MA automatically stays the

effectiveness ofthe CAMP 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 ofthe pending appeal because it is the Board, not the Illinois

EPA, that makes the “final agency decision”

on the permit.

See, Borg-Warner

Corporation

i’.

Mauzy,

427 N.E.2d 415, 56111. Dec.

335 (3~

fist.

1981).

The stay

provision would also

apparently ensure that thePetitioner continues to abide by the terms

of “the existing license (which) shall continue in full force and effect.”

See. 5 ILCS

100/1-65

(b)(2004).

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

3

---

ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER 18,

2005

permit& 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 MA’s automatic stay provision in the

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

permit sought before the illinois EPA.

Notably, the court observed:

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

administrative processbefore the administrative agencies with decision making

power, will not be forthcoming in the instant case until the PCB rules on the

permit application.”

Borg-Warner,

56 Ill. Dec.

at 341.

The illinois EPA concedes that the

Borg-Warner

decision may still reflect good law

and that it probablywarrants, in the

appropriate case,

application ofthe doctrine of

stare

decisis

by

Illinois

courts.

Moreover, the illinois EPA

observes that theruling is apparently in perfect harmony with other subsequent decisions

by

Illinois courts that addressed the respective rolesof the Illinois EPA and the Board in

permitting matters under the Act.

In this regard, the Illinois EPA is fully cognizant ofthe

“administrative continuum” that exists with respect to the Board in most permitting

matters, and the CAMP 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

(111.

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 reviewing whether a CAMP permit should issue that ultimately

determines when the permit becomes final.

In limited situations, it is possible that a ficility’s operation during the pending review of the CAAPP

permit application was also authorized ina State construction permit.

4

---

ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

16, 2005

While the

Borg-Warner

opinionmay offer some interesting reading, it does not

provide a proper precedent in this ease.

This conclusion can be arrivedbecause the APA

simply does not apply to these CAMP permit appeal proceedings.

For one reason, the

MA’s various provisions should not

applywhere 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 subject to the contested case provisions ofthe APA.

See, 415 ILCS

5/31. 1(e)(2004).

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

exemption is provided

by

the permit severability requirements that govern the illinois

EPA’s issuance ofCAMP permits.

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

permit content for every CAMP permit issued by the Illinois EPA.

Seegenerally.

415

ILCS 5/39.5(7X2004).

Section 39.5(7)(i) ofthe Act provides that:

“Each CAMP permit issued under subsection 10 ofthis

Section shall include a

severability clause to ensure the continued validity of thevarious permit

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

415 ILCS 5/39.5(7)(i) (2004).

This provision represents something more than thetrivial

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

Rather, it clearly contemplates a legal effect upon

a permitting action that extends beyond

the scope ofthe permit’s terms.

In other words, the General Assembly was not simply

speaking to the

Illinois EPA but, rather, to

a larger audience.

By observing that a

component of a CAAPP permit shall retain a “continued validity,” lawmakers clearly

proscribed that the uncontested conditions of a CAAPP permit must continue to survive

notwithstanding a challenge to the permit’s other terms.

This language signifies an

S

---

ELECTRONIC FILING,

RECEIVED, CLERKS OFFICE, NOVEMBER

16, 2005

unambiguous intent to exempt some segment ofthe

CAMP

permit from any kind of

protective stay during the permit appeal process.

Forthis reason,

the automatic stay

provision ofthe MA cannot be said to govern CAMP 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 MA’s automatic stay provision applies by

virtue of the licensing that is being obtained through the CAMP permitting process.

However, the APA contains a grandfathering clause that specifically

exempts an

administrative agency that previouslypossessed “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 after its 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 currentBoard procedures for permitting disputes, the earlier

rules referenced the Board’s enforcement procedures in providing specific requirements

for the permit appeal

process

Theywere 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

---

ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

16, 2005

to be conducted according to the Board’s Part

111 rules pertaining to enforcement.

See,

Rule 502.

In contrast

to the Regulatory and Nonadjudicative Hearings and Proceedings,

the Enforcement Proceedingsof Part III contained a plethora ofcontested case

requirements, including provisions for the filing of a petition (i4., 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 the Board

on August 29,

1974.

The ‘Procedural Rules”that originally guided the Board in enforcement cases and

pennit appeals formed the basic framework for the current-day version ofthe Board’s

procedural regulations promulgated at 35

111. 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 have remained substantially the same,

including those rules governing

CAMP

permit appeals.

Because the Board had such

procedures in place prior to July

1, 1977, those procedures

effectively secured the

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

And so long as those

underlyingprocedures historically satisfied the grandfathering clause, it should not matter

that the Act’s CAMP program was enacted some twenty years later.

After all, it is the

procedures applicable to contested cases and their pointof 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 grandiathering

clause

did not apply to the Board’s rules for the

NPDES permit program. The

court’s discussion on the issue of the grandfathering clause is inapposite here.

The NPDES rules at issue were written in a way that conditioned their effectiveness upon

a futureevent.

7

---

ELECTRONIC

FILING,

RECEIVED,

CLERK’S OFFICE,

NOVEMBER

18, 2005

IL

The CA.APP 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 permit as

part

of its

discretionary

stay authority.

See, Petition at pages 6-8.

While the reasons put forward

by Petitioner might have sufficed to justify 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 Petitioner could muster morepersuasive 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

other

CAAPP

appeals, the Illinois EPA has come to regardblanket stays ofCAMP

permits as incongruous with the aims ofthe Illinois CAAPP

and

needlessly over-

protective in light ofattributes common to these appeals.

Section

105304(b) of Title 35 of theBoard’s procedural regulations provides that

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

The Board has

frequently

granted

stays in permit proceedings, oftenciting to the various factors

considered by Illinois

courts

at common law.

The factors

that are

usually examined by

the Board

include the existence of a clearly ascertainable

right

that warrants protection,

irreparable

injury in the absence of a stay, the lack ofan adequate legal

remedy and a

Whenthe

event actually took place, the effectiveness

of the 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 haveerroneously placed too much emphasis on the substantive

permitting

procedures of the NPDES program, rather than those proceduresapplicable to the Board’s

contested case hearings.

A proper construction ofthe MA

demands that

the focus be placed on the

existing procedures “specifically for contested cascs or licensing.”

5 ILCS 100/1 -5

(a)

(2004).

S

---

ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE, NOVEMBER

18, 2005

probability ofsuccess on the merits ofthe controversy.

See, Bridgestone/Firestone

Q~

road Tire Company v. illinois EPA,

PCB 02-31 at page

3 (November

1, 2001);

Community

Landfill Company and City ofMorris

v.

illinois EPA,

PCB

No. 01-48 and 01-

49

(èonsolidated) at page 5

(October 19,

2000), citing

Junkunc v. S.f. 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 factorsnor must each,one

ofthose factors be considered by the Board 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 riglits prior to

a final legal determination.

Bridgestone/Firestone

at page 3.

The

Board has also afforded special attention to the “likelihood of environmental harm” for

any stay that maybe granted.

See,

Bridgestone/Firestone

at page 3;

Abitec Corporation

at

1;

Community Landfill Company and City ofMorris

v. illinois EPA,

at page 4.

L

Consideration of traditional factors

Petitioner’s Motion touches, albeit

sketchily, on some of the 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 ofthe 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

9

---

ELECTRONIC

FILING,

RECEIVED, CLERKS

OFFICE,

NOVEMBER

18, 2005

required to comply with those terms of the permit that are deemed objectionable.

The

Illinois EPA recognizes these reasons as a legitimate basis for authorizing a stayof

permit conditions contested

on appeal. However, they are not at all instructive to

Petitioner’s claim that a stay of the entire CAAPP pentiit is needed.

Judging by a fair reading ofthe Petition, Petitioner has challenged a relatively

small number of the conditions contained in the overall CAAPP permit, thus leaving the

lion’s share ofthe permit conditions unaffected by the appeal.

Muchofthe gist of

Petitioner’s appeal pertains to “periodic monitoring,” including a number of provisions

dealing with emissions testing, reporting, record-keeping and monitoring of emissions

that are purportedly beyond the scope ofthe Illinois EPA’s statutory permit authority.

If

the vast majorityof thepermit’s terms are uncontested, it cannot logically follow that the

absence of a stay for those conditions will prevent thePetitioner from exercising a right

of appeal.

Similarly, it is difficult to discern

why Petitioner’s compliance with

uncontested permit conditions would cause ireparable 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

formed the

framework for the Illinois

CAAPP, requires only a marshalling

of

pre-existing

“applicable

requirements”

into a single operating permit

for

a major source and

that

it

does

not

generally authorize new

subs~n6ve

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

Cu. 2004);

In re;

Peabody

Western Coal Company,

CASk Appeal No. 04-01, slip op. at 6 (BAn, Februaiy 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 ofthe CAAPP permit and the Petition suggests that the present

appeal only calls

into questiona relatively small fraction ofpermit conditions contained in the overall

CAAPP permit.

10

---

ELECTRONIC

FILING, RECEIVED, CLERK’S

OFFICE,

NOVEMBER

ii,

Other related factors

Petitioner argues that the absence of a 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 fllinois EPA takes exception to a key assumption in

the Petitioner’s argument.

In the

Illinois EPA’s

view,

thevestiges of any former State

operating permits forthis CAAPP source dissipated upon the Illinois EPA’s issuance of

the CAAPP permit on September 29,2005.

This area ofdiscussion maybe a significant

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

a limited stay.

Section 39.5(4)(b) states that a CAAPP source must abide by the terms ofits

previous State operating permit, even though the permit mayhave expired, “until

the

source’s

CAAPP

permit

has been issued.”

See,

415 ILCS

5/39.5(4) (b)(2OO4).~

A

few

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

effective supercede the State operating permit.”

See,

415 ILCS 5/39.5(4)

(g)(2004).

Taken together, these provisions indicate that permit issuance

and permit effectiveness

for a CAAPP permit are synonymous and that any underlying State operating permit

becomes a nullity upon the aforementioned occurrence.

The General Assembly could not

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

Petitioner also references Section 9.1 (I) ofthe Act as a source of authority for its proposition that the

State operating permit continues in

effect

until

the CAAPP

permit is issued. See,

Petition atpage 6.

This

assertion is erroneous.

Section

9.1(t)

applies only toNew Source Review

permits issued under the

authority of the CAA, not CAAPP permits

specifically governed by Section 39.5.

Although the text of the

subsection is silent with respect to this distinction, it should be constnied with reference to its context and

surrounding provisions, which

are confined entirely to specified CAA 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

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

have the CAA4J’P 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 the Board’s final action in this appeal.

See. Petition

at page

6.

However, this

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

permit-issuer.

No clearer evidence of this intent can

be found than the

numerous

provisions of Section

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

Protection

Agency’s

(hereinafter

“USEPA”) participation

and role

in reviewing

the

CAAPP

permits.

See,

415 ILCS 5/39.5(9)(2004)

.~

Other

provisions of the Act similarly

establish that permit issuance denotes the action of the Illinois

EPA, not the Board, in the

context of CAAPP permitting.6

As previously mentioned, the Illinois EPA

doesnot deny that the CAAPP

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

Illinois 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 ofa CAAPP permit.

The Board’s obligation

in adjudicating whether the permit

should issue, in contrast, is a

dejure-like

function that, while critical in terms of

See,

4/5

!LCS

5/39.S(9)(b)(noting

requirement that the Illinois

EPA shall not “issue” the

proposed

permit if USEPA provides a

written objection within the 45 day review period);

415

ILCS

5/39.5(9)Ø(explaining that when the Illinois

EPA is

in receipt of a USEPA objection arising from a

petition, the “Agency shallnot issue the

permit”);

415 ILCSS/39.5(9)(g)(observing

requirements

for

whenever a USEPA objection is received by the Illinois EPA following its issuance of a permit after 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

!LCS S/39.5(9,)Q).

6

The requirements

in Section 39.5(10), entitled “Final Agency Action,” recognize the standards for

permit issuance by the Illinois EPA.

415 ILCS 5/39.5 (10)(2004).

Similarly, the review

provisions for Title

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

!LCS 5/40.2 (a)(2004).

The latter provisions evengo so far as to

reference “final permit action”

in relation to

the

Illinois

EPA’s permit decision.

Id.

12

---

ELECTRONIC

FILING,

RECEIVED,

CLERK’S OFFICE, NOVEMBER

18, 2005

determining whether a permit issued by the Illinois EPA becomes final, should not color

the meaning ofother legal terms.7

The issuance or effectiveness of a CAAPP permit

is

functionally distinct

from the legalisms associated with when a CAAPP

permit becomes

final.

Evenputting aside the legal

semantics posed by this issue, the thrust of

Petitioner’s argument misses

its mark.

Any confusion

stemming from the appeal phase

of the Title V program should be fairly modest compared to the past.

Prior to

the,

enactment of the 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 of major emissions

and

they

frequently did not address the applicability ofall other CAA or state (i.e., State

Implementation

Program

(“SIP”)) requirements.8

The Title V operating permit program

ensured

that all

ofa 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

the confusion 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.

S

See,

David

P. Novello,

The New

Clean Air Ac: Operating

Permit

Program: EPA

‘s Final

Rules,

23

Environmental Law Repoxter 10080,

10081-10082

(February

1993).

~

Id.

13

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE, NOVEMBER

18, 2005

Petitioner also mentions in passing that the Illinois EPA’s

failure to provide a

sufilcient

statement

ofbasis for the CAAPP permit is another reason for staying the entire

permit.

Petition at page

7.

Because Petitioner treats this issue separately in its Petition,

theillinois EPA will not fully address the

merits

ofthe

argument

in this Motion.

However, the Illinois EPA willbriefly respond to the issue as it relates to the Petitioner’s

request forstay.

The statement ofbasis envisioned by the statute is an informational

requirement

that is meant to

facilitate both the public and USEPA’s understanding ofthe permit

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 the same manner that a permit itselfdoes. The Illinois

EPA generally does not believe that

any perceived

inadequacies in the statement of basis

can

lawfully renderthe entire CAAPP permit

defective.

In

this instance, the Petitioner identified its grievances with respect to the CAAPP

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 ofthe

inadequacies

ofthe statement when the

basis that gives rise to the appeal stems from

a permit’sconditions,

not the deliberative

thought-processes of the

permitting

agency.

As such, the illinois EPA does not construe

a statement ofbasis as affecting the validity of thefinal CAAPP permit nor as a reason

forvoiding the Illinois EPA’s final permit

decision.

If such challenges were recognized

14

---

ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE, NOVEMBER

18, 2005

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

permit and result in perpetual litigation over a largely ministerial

agencyfunction.

The illinois EPA is ultimately prepared to argue that the statement ofbasis that

wasprepared in conjunction with the CAMP permit was sufficiently adequate as to

comply with the Act.

Alternatively, the Illinois EPA is prepared to contend that the

statement ofbasis requirement is predominantlyprocedural

in

nature, is confined to

the

preliminary stages 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 relating to this issue.

On the whole, the

Petitioner’s chargethat the statement ofbasis affects the entire permit is unsupported by

law and fails to demonstrate a 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 oftherelief granted has been a function of the

relief sought by the petitioning party.

In several cases, the Board has granted stays

ofthe

entire CAAPP permit, usually doing so without much

substantive discussion.

‘°

Curiously, all excepting

one

oftheprior cases involving blanket stays

were

brought

by

petitioning partiesrepresented

by. the same law finn.

In otherCAAPP

appeal cases,

the

Board granted stays for the contested permit conditions,

againminoring the relief sought

‘°

See, Lone Star Industries, Inc.,

v.

Illinois EPA,

PCE

No. 03-94, slip

opinion at 2, (January

9,

2003);

Nielsen v.

Bainbridge, L.L.C.,

v.

illinois EPA,

ICR

No. 03-98,

slip

opinion

at

1-2 (February

6,

2003);

Saint-Gobain Containers.

Inc.,

v.

illinois EPA,

PCB No.

0447,

slip

opinion

at

1-2

(Novembe

6,

2003);Champion

Laboratories,

Inc.,

v.

Illinois EPA,

PCB No.

04-65,

slip

opinion

at

1

(January

8,

2004);;

Midwest Generation, L.L.C.,

v.

illinois EPA,

PCB No. 04-108, slip opinion

at

1

(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.

PCRNo. 04-110, slip

opinion at

1

(February 5, 2004).

15

---

ELECTRONIC FILING, RECEIVED, CLERK’S OFFICE, NOVEMBER

18, 2005

by the petitioning

art1

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 áuch

relief.

12

In the majorityofthe afore-referenced cases,

theIllinois EPA did not actively

participate in the stay motions

sought

before the Board due to the perennially-occurring

press ofother matters.’3

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

of resources, it is doubtfulthat the Illinois EPA would have articulated weighty concerns,

as presently argued, with respect to the stay reliefrequested in earlier cases.

However,

following the Board’s last occasion to act on a blanket stay request

in

a CAAPP permit

appeal, Illinois EPA officials

became aware

of the potential implications posed by stays

on the existing Title V program approval.’4

In the wake of

this

discovery,

the Illinois

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

stays to CAAPP permits arguably fell short ofexploring

all

ofthe relevant considerations

~

See,

BridgestonilFiressone 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 opinion

at

1-2 (February

20,

2003);

Noveon,

Inc.,

v.

illinois EPA,

PCB

No. 04-102, slip

opinion

at

t-2

(January

22, 2004);

Oasis

Industries, Inc.,

v.

illinois

EPA,

PCB No,

04-116,

slip

opinionat

1-2 (May 6,

2004).

12

See, XCFC 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 EPAdid file a joint motion

in support of a

stay request seeking

protection for contested

conditions of a CAMP permit.

See,

Abitec Corporation

v.

illinois EPA,

PCB No. 03-95,

slip

opinion at I-

2 (February 20, 2003).

“

Jim

Ross,

a

former Unit Manager for the CAAPP Unit

of

the Division

of

Air Pollution

ontrol’s

Permits

Section, received an

inquiry from a USEPA/Region

V

representative in March

of

2004 pertaining

to

the broad

nature

of

the

stays obtained

in CAAPP

permit

appeal

proceedings before the

Board.

This

initial

inquiry led

to further discussion

between USEPA/Region V

representatives and the Illinois

EPA

regarding

the

impact of

such

stays on the severability requirements

for CAAPP permits

set forth in 40

C.FJt.

Part 70 and the Illinois CAAPP.

(See,

Supporting Affidavit ofJim Ross attached to

this Motion).

16

---

ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

necessary to the analysis.

Accordingly, the Illinois EPA urges the Board to reflect upon

additional factors that have not previously been addressed to date.’5

iv.

Statutory objectives of CAAPP and

common attributes of permit

appeals

As discussed earlier in this Motion, thefllinois CAAPP commands the illinois

EPAto incorporate conditions into a CAAPP permit

that address requirements

concerning

the “severability” ofpermit conditions.

See,

415 JLCS 5/39.5(7)(1X2004).

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 of thePetitioner’s CAAPP permit.

See, Standard Permit Condition 9.13.

It

should also be noted that the language from the Act’s CAM’? program minors the

provision promulgated by USEPA in

its

regulations implementing Title V ofthe CAA.

See,

40 C.F.R. §70~6(a)(5)(JuIy

1, 2005 edition).

As is evident from the statutory language, theobvious 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 of the word

“various”

in describing those conditions that

are

severable is especially important when

compared with the later reference in the same sentence to “any portions” of the permit

that

are

contested.

Because the commonly understood meaning of the adjective

“various” i~

“of diverse kinds” or “unlike; different,” this wording demonstrates a

legislative intent to

contrast

one discemable group of

permit

conditions (i.e., uncontested

IS

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 appea~or “until the Board ordersotherwise.”

17

---

ELECTRONIC

FILING,

RECEIVED,

CLERK’S OFFICE,

NOVEMBER

18, 2005

conditions)

from the other another (i.e., contested conditions).

See,

The American

Heritage Dictionary, SecondCollege Edition; see also,

Webster ~ New

World Dictionary,

Third College Edition

(describing

primary

use ofthe

term

as

“differing one

from

another;

of

several

kinds”).

Given the clear absence of ambiguity with 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 the fllinois CAAPP are not directlybinding on the Board.

However, while the

Illinois EPA’s mandate

under Section

39.5(7)(i) of the Act’s CAAPP

program

does not,

on

its

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

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

Implicit

in the statutory

language is an unmistakable expression aimed at preserving the validity

and

effectiveness

ofsome segment ofthe CAAPP permit during the appeal process.

This legislative goal

cannot be achieved ifblanket stays

are

the convention.

Where the 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.I.C.

v. Nihiser,

799 F.Supp. 904 (C.liIl1.~

1992);

Castaneda v. illinois Human Rights Commission,

547 N.E.2d 437

(Ill.

1989).

In

this

instance,

the Board should

recognize an

inherent

limitation of its stay authority by

virtue ofthe Illinois CAAPP’s severabilityprovision.

At the very least, the existence of

the provision should give pause to theBoard’s

recent approach

in evaluating stays in

CAAPP

permit

appeals.

16

My

such

restriction may

not be absolute,

as the Act’s

permit

content requirement does not

necessarily

rule

out the

potential

merits

of a blanket

stay

where a permit is challenged

inits entirety.

As

previously

mentioned, the

Illinois

EPAdisputes the merits

of

Petitioner’s

argument relating to a

purported deficiency

in the CAAPP permit’s statement ofbasis.

18

---

ELECTRONIC FILING, RECEIVED, CLERK’S

OFFICE,

NOVEMBER

18, 2005

It is noteworthy that one ofthe chiefgoals ofthe CAA’s Title V program is to

promotepublic participation, including the use ofcitizen suits to facilitate compliance

through enforcement!7

The severability requirement ofthe Part 70 regulations, which

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

an extension ofthis endeavor.

Blanket stays ofCAAPP permits could arguably lessen

the

opportunities

for citizen enforcementin

an area that is

teeming

with broad public

interest.

Moreover, the cumulative effect of stays sought by Petitioner and other coal-

fired CAAPP permittees in other appeals would cast a wide net.

Blanket stays of these

recently-issued CAAPP permits

would

effectively shield an

entire

segment ofillinois’

utilities sector from potential enforcement based on Title V permitting, which

was meant

to provide a more convenient, efficient mechanism for the public to

seek CAA-related

enforcement.

One last consideration in this analysis is the deliberate, ifnot

time-consuming,

pace ofpermit appeals

in general.

From past experience, the illinois EPA has observed

that many permit appeals

are

ofa type that couldmore aptly be described as “protective

appeals.” These types ofappeals

arc

frequently filed because a particular permit

condition

affects

an issue relating to on-going or future enforcementproceedings.

Alternatively, these cases may

entail some other

kind ofcontingencynecessitating

additional permit review, a

new

permit application and/orobtaining a revised permit

from

the Illinois EPA.

Only rarely

does a permit appeal actuallyproceed to hearing.

Based on the illinois EPA’s estimation,

nearly

all of theCA.APP permit appeals

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

While a

‘~

See.

David P.

Novella,

The New Clean AirAct Operating Permit

Program: EPA

‘s Final Rules,

23

Environmental Law Reporter

10080,

10081-10082

(February

1993).

19

---

ELECTRONIC

FILING, RECEIVED, CLERK’S

OFFICE,

NOVEMBER

18, 2005

handfUl of cases have been

voluntarily

dismissed from theBoard’s

docket,

several of

thesecases are,

and will remain,

pending with the Board for months

and/or years to

come, in

part,

because there is no ability to resolve them independent of theft 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 ofa CAAPP permit stayed

in its entirety will be delayed from taking effect, in spite of bearing 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 theIllinois 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,

Robb H.

Layman

Assistant Counsel

Dated: November 18, 2005

Illinois

Environmental Protection

Agency

1021 North

Grand Avenue East

P.O. Box

19276

Springfield, fllinois 62794-9276

(217) 524-9137

20

---

ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE, NOVEMBER 18,2005

STATE

OF

ILLINOIS

COUNTY OF SANGAMON

•

AFFIDAVIT

I, Jim Ross,

being first duly sworn, depose and state that the following statements

set forth in this instrument are true and correct, except as

to mailers 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 an currently employed by the Illinois Environmental Protection Agency

(“illinois EPA0) as aSen

rPib11S~r~.Administrator

professional engineer.

During

the early part of2004,

1 was the Manager of the 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 have been

employed with the Illinois EPA since May 1988.

2.

As part of myjob responsibilities, I participated in frequent teleconference

calls with representatives from the United States Environmental Protection Agency

(“USEPA”) at•Re~ion

V in Chicago, Illinois, involving various pending CAAPP permit

-

applications and issues pertaining to the administration ofthe CAAPP program.

By

virtue ofmy involvement in the CAAPP permit review process, I am familiar with

communications betweenUSEPAJReg1on V and the Illinois EPA in March of2004

concerning an issue relating to stays obtained in CAAPP pennit appeals befote the

Illinois Pollution Control Board.

The issue was initially raised by a representative from

USEPA/Region V,who expressed concern about the impact of such stays upon the

severabilityrequirements of 40 C.F.R.

70 and the Illinois CAAPP.

3.

I have read the Motion prepared by the illinois EPA’s attorneys relating to

---

ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE, NOVEMBER

18, 2005

this

matter

and,

further, find 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 J~Day ofNovember 2005

-

k~-~r

n~i1~&nr4’1

BRENDA BOEHNER

:

~ NO1AR(PU$LJC.STA1EO?IW~C3S~

---

ELECTRONIC

FILING, RECEIVED,

CLERK’S OFFICE,

NOVEMBER 18,

2005

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 STAY and

AFFIDAVIT to:

Dorothy On,

Clerk

Illinois Pollution Control Board

100

West Randolph Street

Suite

11-500

Chicago,

fllinois

60601

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

postage thereon fully paid and deposited into the possession ofthe United States Postal

Service, to:

Bradley P. Halloran

Sheldon A. Zabel

Hearing Officer

Kathleen C. Bassi

James R. Thompson Center

StephenJ. Bonebrake

Suite

11-500

Joshua R. More

100 West Randolph Street

Kavita M. Patel

Chicago,

Illinois

60601

SchifiHardin, LLP

6600 Sears Tower

233 South Wacker Drive

Chicago, illinois 6060

Robb H. Layman

iJ

Assistant Counsel