ELECTRONIC

FILING,

RECEIVED, CLERKS OFFICE,

NOVEMBER 18, 2005

BEFORE THE ILLINOIS POLLUTION

CONTROL

BQARD

OF THE STATE OFILLINOIS

MIDflST

GENERATION,

LLC,

POWERTON

GENERATING STATION

)

)

Petitioner,

)

PCB

No. 2006-059

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

NOTICE

To:

Dorothy Gwm, Clerk

Sheldon A. Zabel

Illinois Pollution Control Board

Kathleen C. Bassi

100 West Randolph Street

Stephen J. Bonebrake

Suite 11-500

Joshua R. More

Chicago, Illinois

60601

KavitaM. Patel

SchiffHardin, LLP

Bradley P. Halloran

6600 Sears Tower

Healing 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 Ihavetoday electronically filed with the Office of

the Clerk ofthe Illinois Pollution Control Board the APPEARANCES, MOTION IN

OPPOSITION TO PETITIONER’S REQUEST FOR STAY and AFFIDAVIT-of the

Respondent, Illinois Environmental Protection Agency,

a copy ofwhich is herewith

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

Respectfully submitted by,

e7mw4

Robb H. La~ian

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,

)

POWERTON GENERATING STATION

)

)

Petitioner,

)

)

PCB No.

2006-059

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

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

Respondent, ILLINOIS ENVIRONMENTAL PROTECTIONAGENCY, as one ofits

attorneys in the above-captioncd mafia.

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, CLERK’S OFFICE,

NOVEMBER

18,

2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF

THE STATE OF ILLINOIS

MIDWEST GENERATION, LLC,

)

POWERTON GENERATING STATION

)

)

Petitioner,

)

)

PCB No. 2006-059

v.

)

(CAMP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Sally Carter and enters her appearance on behalfof the

Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, as one ofits

attorneys in the above-captioned matter.

Respectfully submitted by,

Sally Øárter

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, CLERK’S OFFICE,

NOVEMBER

18, 2005

BEFORE

TIlE ILLINOIS POLLUTION CONTROL BOAR))

OF

THE STATE

OF ILLINOIS

MIDWEST GENERATION, LLC,

)

POWERTON GENERATING STATION

)

)

Petitioner,

)

)

PCB No. 2006-059

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

MOTION IN OPPOSITION TO

PETITIONER’S REOUEST

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, MU)WEST GENERATION, LLC,

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

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

matter.

•

INTRODUCTION

Acting in

accordance with its authority under the CAAPP provisions ofthe

Illinois Environmental Protection Act (hereinafter “Act”),

415

IL CS 5/39.5(2004),

the

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

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

the Powerton Generating Station.

The facility is located at 13082 East Manito Road in

Pekin, illinois.

1

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ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

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

“Petition”) with theBoard challenging certainpermit conditions contained within the

CAMP permit issued by the illinois EPA.

The Illinois EPA received an electronic

version ofthe appeal on the same date;

Formal notice ofthe appeal was served upon the

illinois EPA on November 4, 2005.

As partoft

Petition, Midwest Generation seeks a stay ofthe effectiveness of the

entire CAMP permit, citing two principal grounds for its requested relief

First,

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

Illinois Administrative Procedure Act (“APA”),

5ILCS 100/10-65(b)(2004).

As an

alternative basis 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, 35 III. Adm.

Code

1 01.500(d).

ARGUMENT

TheIllinois EPA urges the Board to deny Petitioner’s request for a stay ofthe

effectiveness ofthe entire CAMP permit.

Forreasons that are explained in detail below,

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

provision as a matter of law.

Further, Petitioner has failed to demonstrate sufficient

justification forthe Board to grant a blanket stay ofthe CAAPP permit under its

discretionary stay authority.

Given the absence ofan alternative request by Petitioner

seeking either a stay ofcontested CAMP permit conditions or any otherrelief deemed

just and appropriate, the Board should decline to grant any stay relief whatsoever.

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

of

the

APA’s

automatic

stay

provision.

The first argument raised by Petitioner maintains that the CAMP permit in this

proceeding is subject to the automatic

stay provision ofthe APA.

See,

Petition at

pages

5-6.

The

automatic stay provision under the APA governs administrative proceedings

involving

licensing, including a “new license with reference to any activity ofa

continuing nature.”

See, S ILCS 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 CAAPP pennit is

synonymous with a license that

is ofa continuing nature.

See also,

5 ILCS 100/1-35

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

law”).

In its argument, Petitioner postulates that the APA automatically stays the

effectiveness ofthe CAAPP permit until after the Board has rendered a final adjudication

on the merits of this 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

throughoutthe duration ofthe pending appeal because it is the Board, not the illinois

EPA, that makes the “final agency decision” on thepermit.

See, Borg-Warner

Corporation

v. Mauzy,

427 N.E.2d 415,56111.

Dec. 335 (3~

Dist.

1981).

The stay

provision would also apparently ensure that the Petitioner continues to abide by the tenns

of“the existing license which

shall continue in full force and effect.”

See, 5 ILCS

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

permits1

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 court observed:

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

administrative process before 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 probably

warrants,

in the appropriate case,

application ofthe doctrine of

stare decisis

by illinois courts.

Moreover, the fllinois 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 theBoard in

permitting matters under the Act.

In this regard, the illinois EPA is fully cognizant of the

“administrativecontinuum” 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

(3M

Dist.

1985),

affirmed, illinois EPA v.

illinois Pollution GontrolBoar4

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

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

CAAPP

permit

application

was also authorized in a

State construction permit.

4

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FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

While the

Borg-Warner

opinionmay 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 subject to the contested case provisions ofthe APA.

See,

415 ILCS

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

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

exemption is providedby the permit severability requirementsthat govern the Illinois

EPA’s issuance ofCAAPP permits.

Section 39.5(7) oftheillinois CAMP sets forth requirements governing the

permit content for every CAMP permit

issued by the illinois EPA.

See generally, 415

ILCS 5/39.5(7) (2004).

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

“Each

CAAPP permit

issued under subsection 10 of this Section shall include

a

severability clause to ensure the continued 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 than the trivial

or inconsequential

dictates to an agency in its administrationof a permit program.

Rather, it clearly contemplates

a legal effect upon a permitting action that extends beyond

the scope ofthe permit’s tenns.

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 ofa CAMP 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

5

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ELECTRONIC FILING, RECEIVED, CLERKS OFFICE,

NOVEMBER

18, 2005

unambiguous intent to exempt some segment ofthe CAAPP permit from any kind of

protective stay during thepermit appeal process.

Forthis reason, theautomatic stay

provision of theAPA 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 ofthelicensing that is being obtained through the CAMP permitting process.

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

administrative agency that previously possessed “existing procedures on July

1, 1977” for

contested ease or licensing matters.

See, S JLCS 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 thepermitting 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 enforcement procedures in providing specific requirements

for the permit appeal process.

They were then, as they are today,

contested case

requirements by virtue of their 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 of State’s office as “Procedural Rules.”

Those rules included requirements for

permit appeals, effective through February 14, 1974, and they required such proceedings

6

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ELECTRONIC

FILING, RECEIVED, CLERK’S OFFICE,

NOVEMBER 18, 2005

to

be

conducted according to the Board’s Part Ill rules pertaining to enforcement.

See,

Rule 502.

In contrastto

the

Regulatory and Nonadjudicative Hearings

and

Proceedings,

the

Enforcement Proceedings ofPart HI 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), conductofthe 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 of these rules, including

amendments, was

adopted by the Board

on August 29,

1974.

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

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

procedural

regulations promulgated at 35

III. Adm. Code 101-130.

Although the Board’s

procedural rules

may have evolved and expanded over time, the core features ofthe

adversarial process governing

these

cases

have

remained

substantiallythe

same,

including those rules governing

CAAPP 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

underlying procedures 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 maycounter that

the

Borg-Warner

decision is at odds

with

this

argument

and that part of

the

appellate court’s ruling

held that

the

APA

‘s grandfatheringclause did

not

apply

to

the Board’s

rules

forthe

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 future

event.

.7

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ELECTRONIC

FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

II.

The

CALAP?

permit

issued by

the

Illinois

EPA

should not

be

stayed in

its entirety by reason ofPetitioner’s alleged justifications.

Separate

and

apart from its APA-related argument, Petitioner offers the Board an

alternative basis for granting a blanket stay ofthe CAMP permit.

Specifically,

Petitioner suggests that the Board

stay

the

entire

CAAPP permit as

part

ofits

discretionary stay authority.

See, Petition

atpages 6-8.

While

the reasons put

forward

by Petitioner might have sufficed to

justify aitay

ofthe CAMP permit’s contested

conditions had one

been

sought, Petitioner fails .to

demonstrate a clear

and

convincing

need for a broader

stay.

Even ifthe Petitioner could muster more persuasive arguments

on this issue, theillinois EPAquestions whether such an all-encompassing remedy is

appropriate under any circumstances.

Notwithstanding the Board’s recent practice in

other CAAPP appeals, theIllinois EPA has cometo regard blanket stays of

CAAPP

permits as

incongruous

with the aims of the illinois

CALAPP

and

needlessly over-

protective in

light of attributes common to these appeals.

Section

105.304(b) ofTitle 35 of the Board’s

procedural regulations

provides that

a

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

TheBoard has

frequently

granted

stays in

permit proceedings, often

citing to thevarious

factors

considered by Illinois courts atcommon

law.

The factors

that are

usually examined by

theBoard

include the existence of a 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 of the

miles

occurred

after

the

July 1,

1977, date

established in the grandfatheringclause.

More importantly,

inaddressing 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 procedures applicable to the Board’s

contested

case

hearings.

A proper construction of the

APA demands

that the focus be placed

on the

existing procedures

“specifically

for contested cases or licensing.”

.1

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

8

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ELECTRONIC

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probability

of success on the

merits

ofthe controversy.

See,

Bridgestone/Firestone

Q/f-

road Tire Company v. illinois EPA,

PCB 02-3 1

at page

3 (November 1,2001);

Community Landfill Company and City ofMorris

v. illinois EPA,

PCB

No. 01-48

and

01-

49

(consolidated) at page

5 (October 19, 2000), citing

Junkunc v.

5.1. Advanced

Technology & Manufacturing.

498 N.E.2d 1179 (1~~

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 the Board in every case.

See, Bridgestone/Firestone

at

page 3.

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

nature

oftheinjury that might befall an applicant

from

having to comply

with permit

conditions,

such as the compelled expenditure of“significant resources,”

Abitea Corporation v.

illinois EPA,

PCB

No. 03-95 at page

1

(February

20,

2003), or the effectual loss of

appeal

rights 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.

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-keepingrequirements ofthe CAAPP permit until after it

is provided its proverbial “thy in court.”

Petitioner’s

right

ofappeal likewise should not

be cut short or

rendered

mootbecause it

was unable

to obtain a legal

ruling

before being

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FILING, RECEIVED,

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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 stay of

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

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

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

small number ofthe conditions contained in the overall

CAAPP

permit, thus leaving the

lion’s

share ofthe permit conditions unaffected by the appeal.

Much

df

the gist of

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

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

that are purportedly beyond the scope of the 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 the Petitioner from exercising a right

of appeal.

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 font,ed the

framework for

the

IllInois CAAPP,

requires

only

a marshalling ofpie-existing “applicable

requirements”

into a single operating

permit for a major source and that

it

doesnot generally authorize new substantive

requirements.

See, Appalachian Power Company v. Illinois EPA,

208

K3d

1015,

1026-1027

(D.C. Circuit,

2000);

Ohio

Public interest Research Group v.

Whitinan

386 F.3d 792, 794

(61h

Cu. 2004);

In re:

Peabody

Western

Coal Company,

CAA

Appeal

No.

04-01,

slip

op.

at 6 (EAB, Febniary

18, 2005).

Aside

from

the

conditions lawfully imposed

by

the Illinois

EPA

for periodic monitoring

and other miscellaneous matters,

the remainderof the CA.APP

permit

should be

comprised of the pre-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

CAAPP

permit.

10

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ii.

Other related factors

Petitioner

argues

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, the vestiges ofany former 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 the effects of

a limited stay.

Section 39.S(4)(b) states that a

CAAPP

source must abide by the terms ofits

previous State

operating permit,

even though the

permit

may have expired, “until the

source’s

CAMP

permit

has

been issued.”

See,

4)5 JLCS 5/39.5(4)(b)(2004j4

Afew

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

effective supercede the State operating permit.”

See, 415 ILCS

S/39..5(4)q’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(f)

of

the Act as a

source

of

authority

for

its proposition that

the

State operating peTmit continues in effect

until

the CAAPP

permit is

issued.

See, Petition

at

page 6.

This

assertion is erroneous.

Section 9.1(0 applies only to New Source

Review permits

issued under the

authority of the CAA, not

CAAPP

permits specifically governed by Section 393.

Although

the

text of the

subsection is

silent

with respect to

this

distinction, it should be construed with reference to

its

context and

surrounding provisions, which are

confinedentirely to specified

CA.A

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(f).

1!

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18, 2005

have

the CAAPP permit’s superceding

effect

on the State operating permit delayed until

permit effectiveness.

Petitioner apparentlyreads 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 oftheAct 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)

of

the Act, which govern the United States Environmental

Protection

Agency’s (hereinafter

“USEPA”)

participation

and

role in reviewing

the

CAAPP

permits.

See, 4)5 ILCS 5/39.5(’9)(2OO4).~

Other

provisions of

the 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

Illinois courts

in otherpermitting 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.

41511125 5/39.5(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,)~)(explaining

that when the

Illinois EPA is in receipt of a USEPA objection aristhg from a

petition, the “Agency shall

not issue the permit”);

415 ILCS

S/39.5(9,)(g)(observingrequirements 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 ILCS 5/39.5

(9)

(J).

6

The requirements

in Section 39,5(10), entitled “Final Agency Action,” recognize the standards for

permit issuance by the Illinois

EPA.

4/S

ILCS

5/39.5(IO)Q004).

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 conditionsata

basis

for appeal to the Board.

See,

415

ILCS

5/40.2(a)

(2004).

The latter 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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ELECTRONIC

FILING,

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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 CAM’? permit becomes

final.

Even putting asidethe 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 majoremissions

and

they frequently

did

not address

the applicability

of

all 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 ofa uniform

federal

permitting system.9

By

trying

to breath life into the Stateoperating permits

beyond

the

date of the 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).

~

Id.

13

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Petitioner also mentions

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

sufficient statement ofbasis for the CAAPP

permit

is

another reason

for staying the entire

permit.

Petition at page

7.

BecausePetitioner treats this issue separately in its Petition,

the illinois EPAwill not fully address themerith of the

argument

in this Motion.

However, the Illinois EPA will

briefly

respond to the issue as it relates to the Petitioner’s

request for

stay.

The statementof basis envisioned by the statute is an informational requirement

that is meant to

facilitate both the public and IJSEPA’s

understanding

ofthe permit

decision in the draft phase ofpermitting.

See. 415

JLCS 5/39.5(8)(b)(2004)

.

It is not

a

part of,

nor does it otherwise affect, the content of the

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 render

the 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 whenthe

basis that

gives rise to the appeal stems from

a permit’s conditions, not the deliberative

thought-processes ofthe permitting agency.

As such, theIllinois EPAdoes not construe

a statement ofbasis as affecting the validity ofthe final CAAPP permit nor as a reason

for voiding the Illinois EPA’s final pennit decision.

Ifsuch challenges were recognized

14

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ELECTRONIC FILING,

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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 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

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 charge that the statement ofbasis affects theentire permit is unsupported by

law and fails to demonstrate a probability ofsuccess on the merits ofthe controversy.

iii.

Significance of prior 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 ofthe

entire CAAPP pennit, usually doing so without much substantive discussion.10

Curiously, all excepting one ofthe prior cases

involving blanket stays were brought by

petitioning parties represented by the same

law firm.

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. Bainbndge, L.L.C.,

v.

Illinois

EPA,

PCB

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);Chainpion Laboratories,

Inc.,

v. Illinois EPA,

PCB No. 04-65, sup

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

Pefroleum Additives, Inc., v. Illinois EPA,

slip opinion at

1

(February

5,

2004);

Board

of Trustees of

Eastern

filinois University v. Illinois EPA,

PCB No.

04-110,

slip

opinion

at

1

(February 5,

2004).

15

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ELECTRONIC

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2005

by the petitioning

party.”

In a few cases, the Board does not appearto have granted any

stay protection whatsoever, as

the petitioning party apparently opted not to pursue such

In themajority of the afore-referenced cases, the Illinois EPA did not actively

participate in the stay motions sought before the Board due to the perennially-occurring

press ofothermatters)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 ala lack

of resources, it is doubtful that the illinois EPAwould

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

acton 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, theillinois

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

stays to CAAPP permits arguably fell short of exploring all ofthe 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

opinion at

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.,

‘.‘.

Illinois

EPA,

PCB No. 04-116, slip

opinion

at 1-2

(May 6,

2004).

~

See, XCTC Limited

Partners hip,

v. Illinois EPA,

PCB

No.

01-46,

consolidated with Georgia-Pac~f

Ic

Tissue, L.L.C.,

v. Illinois EPA,

PCB

No.

UI-SI;

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. Illinois EPA,

PCB No. 03-95, slip opinion at I-

2 (February 20,

2003).

~

Jim Ross, a former Unit Manager for the CAAPP Unitof the

Division of Air Pollution Control’s

Permits Section, received an inquiry from a USEPA/Region

V representative ip 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 USEPAIRegion V representatives and the Illinois EPA

regarding the impact of such

stays on the severability requirements

for CAAPP 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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ELECTRONIC

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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

lv.

Statutory

objectives of CAAPP and common

attributes ofpermit

appeals

As discussed earlier in this Motion, the illinois

CAAPP

commands the illinois

EPA to incorporate conditions into a

CAAPP

permit that address requirements

concerning

the “severability”

ofpermit conditions.

See,

415 ILCS 5139.5(7)

4)

(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

Conditioni

ofthe Petitioner’s

CAAPP

permit.

See,

Standard Permit Condition 9.13.

It

should

also be noted that the language from the Act’s

CAAPP

program mirrors 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” of the ostensiblylarger 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 with the later reference in the same sentence to “anyportions” ofthe permit

that are contested.

Because the commonly understood meaning ofthe adjective

“various” is “ofdiverse kinds” or “unlike; different,” this wording demonstrates a

legislative intent to contrast one discernable group ofpermit conditions (i.e., uncontested

lS

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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ELECTRONIC

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18, 2005

conditions)

from

the

other

another (i.e.,

contested conditions).

See,

The American

Heritage Dictionary, Second College Edition; see also,

Webster’s New World Dictionary,

Third College Edition

(describingprimary use ofthe term as “differing one

from another;

of several kinds”).

Given the clear absence ofambiguity 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 Illinois

CAAPP

are not directly binding on the Board.

However, while the

illinois EPA’s mandate under Section

39.5(7)(i)

of the Act’s CAMP 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.16

Implicit in the

statutory

language is an

unmistakable

expression

aimed at

preserving

the

validity and

effectiveness

of some segment of

the

CAAPP

permit

during the

appeal process.

This

legislative

goal

cannot be achieved if

blanket

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.J.C.

v. Nihiser,

799

F.Supp. 904

(C.D.lll.~

1992);

Castaneda

v. illinois Human Rights Commission.

547 N.E.2d 437

(111.

1989).

In

this

instance,

the

Board should recognize

an

inherent limitation

of

its

stay authority

by

virtue

of the Illinois CAAPP’s

severability provision.

At the very

least,

the

existence

of

the

provision

should give

pause to

the

Board’s

recent approach in

evaluating stays in

CAAPP

permit appeals.

16

Any

such

restriction may not be absolute, as the

Act’s permit content requirement does not necessarily

nile

outthe potential merits of a blanket stay where a permit is challenged in its

entirety. As previously

mentioned,

the Illinois EPA disputes the merits of Petitioner’s argument

relating

to a purported deficienty

in

the CAAPP

permit’s statement of

basis.

18

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ELECTRONIC FILING,

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It is noteworthy

that one ofthe chief goals ofthe CAA’s Title V program is to

promote public

participation, including the

use

of

citizen 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

illinois

CAMP,

can

be

seen as

an extension of this endeavor.

Blanket stays of CAAPP permits could arguably lessen

theopportunities for

citizen enforcement

in an area

that is

teeming

with

broad public

interest.

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

fired

CAMP permittees in

other

appeals would cast a wide net.

Blanket

stays of

these

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

segment of Illinois’

utilities sector from potential

enforcement

based

on Title V

permitting, which was

meant

to

provide

a

more convenient, efficient mechanism fbr

the

public to

seek

CAA-related

enforcement.

One last consideration in this analysis is the deliberate, if not time-consuming,

pace of

permit appeals

in general.

From past experience, the

Illinois EPA has observed

that many

permit appeals

are

ofa type

that

could

more

aptly be

described

as

“protective

appeals.” These types of appeals are frequentlyfiled because

a particular permit

condition affects an issue relating to on-going or future enforcement proceedings.

Alternatively, these cases may

entail

some other kind of contingency necessitating

additional permit review, a new permit application and/or obtaining a revised permit from

the fllinois EPA.

Only rarely does a permit appeal

actually proceed to hearing.

Based

on the Illinois EPA’s estimation, nearly all

of the CAAPP 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 Pennit Program: EPA

‘s Final Rules.

23

Environmental

Law

Reporter 10080, 10081-10082

(February

1993).

19

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ELECTRONIC FILING,

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18, 2005

handful

of cases have been voluntarily dismissed from

theBoard’s docket, several of

these cases

are, and

will remain, pendingwith the Board for months

and/or

years to

come, in part, because

there

is no

ability to

resolve them independent of their related

enforcement or pennitting developments.

As the Illinois

EPA is often an obligatory

participant in

many ofthese 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 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 of the CAAPP permit in its entirety.

Respectfully submitted by,

ILLINOIS

ENVIRONMENTAL

PROTECTION

AGENCY,

Robb

H. La~an

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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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 followingstatements

set

forth in this instrument are true arid correct,

except as to matters

therein stated to on

information

and

beliefand,

as

to such matters, the undersigned certifies that he believes

the same to be true:

I.

I

am currently e

by the Illinois Environmental Protection Agency

(“illinois

EPA”) as

aSenior Public

ServIièó~Admithstrator

professional engineer.

During

the early part of

~oo4,

I was the Manager of the Clean Mr Act Permit Program

(“CAAPP”) Unit in theDivision of Air Pollution Control’s Permit Section, whose offices

are located at

1021 North

Grand

Avenue East, Springfield, Illinois.

I have been

employed with

theillinois

EPA since May 1988.

2.

As

part ofmy

job responsibilities, I participated

in frequent

teleconference

calls with representatives from theUnited

States Environmental Protection Agency

(“USEPA”) atRegion V in Chicago, Illinois,

involving various ‘pending CAAPP permit

applications and issues

pertaining

to

the

administration of

the

CAAPP

program.

By

virtue

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

communications

between

USEPA/Region

V and the

illinois EPA

in

March

of2004

concerning an

issue relating

to

stays

obtained

in CAAPP permit

appeals before

the

Illinois Pollution Control Board.

The issue was

initially

raised by a

representative

from

USEPA1Region V, who expressed concern about theimpact of such stays upon the:

severability

requirements

of 40 C.F.R. Part 70

and the illinois

CAAPP.

3.

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

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ELECTRONIC FILING,

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18, 2005

this matter and, further, find that the facts set forih in said

responses

and answers are true,

responsive

and complete to the best of my knowledge and belief.

•

.Furth

Subscribed and Sworn

To Before Me this,L~Dayof November 2005

.,

OFFICIA*.

SEAL

,

S:

BRENDA BOERNER

~ 13P1WP1J4JC,STAltOcKS*045

0

~~~~•.0+04’l44’4’t

sayet~3~

R

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ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE,

NOVEMBER

18, 2005

CERTIFICATE OF

SERVICE

I hereby

certify

that on the

18th day of November 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

Gunn, Clerk

Illinois Pollution Control Board

100 West Randolph

Street

Suite

11-500

Chicago, Illinois

60601

and a true and correct copy of the same foregoing instrument, byFirst Class Mail with

postage thereon fully paid and deposited into thepossession of the United States Postal

Service, to:

Bradley P.

Halloran

Sheldon A. Zabel

Hearing Officer

Kathleen

C.

Bassi

James R. Thompson Center

Stephen J. Bonebrake

Suite

11-500

JoshuaR. More

100 West Randolph Street

Kavita M. Patel

Chicago, illinois

60601

SchiffHardin, LLP

6600

Sears Tower

233 South Wacker Drive

Chicago, illinois 6060

Robb

H.

Layman

Assistant Counsel