ELECTRONIC

FILING,

RECEIVED~CLERKS

OFFICE

NOVEMBER 18, 2005

BEFORE TUE ILLINOIS POLLUTION CONTROL BOARD

OF THE STATE

OF ILLINOIS

KINCAID GENERATION, LLC,

)

)

)

Petitioner,

)

)

PCB No. 2006-062

v.

)

(CAMP Permit Appeal)

)

ILLINOIS

ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

NOTICE

To:

Dorothy Gunn, 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

Kavita M. Patel

SchiffHardin, LLP

Bradley P.

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, flhinois

60601

PLEASE TAKE NOTICE that I have today 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 ofthe

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,

RobbFL

Layman

c1

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

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ELECTRONIC FILING,

RECEIVED, CLERKS OFFICE

NOVEMBER 18, 2005

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

OF TILE STATE OF ILLINOIS

XNCAID

GENERATION, LLC,

)

)

)

Petitioner,

)

)

PCB No.

2006-062

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS

ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

APPEARANCE

NOW COMES Robb H. Layman and enters his appearanceon behalfofthe

Respondent, ILLINOIS ENVIRONMENTAL PROTECTIONAGENCY, as one ofits

attorneys in theabove-captioned matter.

RespecttWly submitted by,

t

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

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ELECTRONIC FILING,

RECEIVED,

CLERKS

OFFICE NOVEMBER

18, 2005

BEFORE THE ILLINOES POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

KINCAID GENERATION, LLC,

)

)

)

Petitioner,

)

)

PCB No. 2006-062

v.

)

(CAAPP Permit Appeal)

)

ILLINOIS

ENVIRONMENTAL

)

PROTECTION AGENCY,

)

Respondent.

)

APPEARANCE

NOW COMES Sally Carterand enters her appearance on behalfofthe

Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, as one ofits

attorneys in the above-captioned

matter.

Respectfully submitted by,

Sally (liter

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

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ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE

NOVEMBER 18, 2005

BEFORE THE

ILLINOIS

POLLUTION CONTROL BOARD

OF TUE STATE

OF ILLINOIS

KINCAID GENERATION,

LLC,

)

)

)

Petitioner,

)

)

PCB No. 2006-062

)

(CAAPP Permit Appeal)

)

ILLINOIS ENVIRONMENTAL

)

PROTECTION AGENCY,

)

)

Respondent.

)

MOTION IN OPPOSITION TO

PETITIONER’S REQUEST FOR STAY

NOW COMES the Respondent, ILLINOIS ENVIRONMENTAL PROTECTION

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

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

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

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

matter.

INTRODUCTION

Acting in accordance with its authority under the CAAPP provisions of the

Illinois Environmental Protection Act (hereinafter “Act”),

415

ILCS 5/39.5(2004),

the

illinois EPA issued a CAAPP permit to Kincaid Generation on September 29,

2005.

The

permit authorized the operation of an electhcalpower generation facility known as the

Kincaid Generating Station.

The facility is located at 4 miles west ofKincaid, illinois on

Route

104.

1

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ELECTRONIC FILING,

RECEIVED, CLERK’S OFFICE

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On November 3,

2005,

attorneys for

the

Petitioner filed this appeal (hereinafter

“Petition”) with

the

Board challenging certain permit conditions containedwithin the

CAAPP permit issued by the illinois EPA.

The illinois EPA received an electronic

version ofthe appeal on the same date.

Formal notice ofthe appeal was served upon the

illinois EPA on November 7,

2005.

As partofits Petition, Kincaid Generation seeks a stayof the effectiveness ofthe

entire CAAPP permit, citing two principal grounds forits requested relief.

First,

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

Illinois Administrative Procedure Act (“APA”),

5 ILCS

1 00/10-65(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 responseto

any motion within

14.days after service ofthe motion.

See.

Code 101.500(d).

ARGUMENT

The Illinois EPA urges the Board to deny Petitioner’s request for a stay ojthe

effectiveness ofthe entire CAAPP permit.

Forreasons that are explained in detail below,

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

provision as a matter oflaw.

Further, Petitioner has failed to demonstrate sufficient

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

discretionary stay authority.

Given the absence of an alternative requestby Petitioner

seeking either a stay of contested CA.APP 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,

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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 CAAPP permit in this

proceeding is subject to the automatic stay provision ofthe APA.

See, Petition at page

5.

The automatic stay provision under the APA governs administrative proceedings

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

continuing nature.”

See,

5

ILCS 100/10-65(b).

The CAAPP permit at issue in this

proceeding governs emissions-related activities at

an existing, majorstationary source in

Illinois.

Accordingly, theIllinois EPA does not dispute that the CAAPP permit is

synonymous with a license that

is of a continuing nature.

See

also,

5 ILCS 100/1-35

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

law”).

In its argument, Petitionerpostulates that the APA automatically stays the

effectiveness ofthe CAAPIP permit until after theBoard has rendered a final adjudication

on themerits of this appeal.

Citing to a Third District Appellate Court ruling from over

two decades ago, Petitioner reasons that the ARk’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

v.

Mauzy,

427 N.E.2d 415, 56

ill. Dec. 335 (3~

Dist.

1981).

The stay

provision would

also apparently ensure that the Petitioner continues to abideby the terms

of“the existing license which

shall continue in hill force and effect.”

See. S ILCS

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

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

3

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ELECTRONIC FILING,

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18, 2005

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

EPA’s original receiptof the permit application.

See,

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

The

Borg-Warner

decisionupheld the APA’s automatic stay provision in the

context ofa renewal fora

National

Pollutant Discharge Elimination System (“NPDES”)

permit sought before the Illinois EPA.

Notably, the court observed:

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

administrative process before the administrative agencies with decisionmaking

power, will not be forthéoming 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 the ruling is apparently in perfect harmonywith other subsequent decisions

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

permitting matters under theAct.

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

“administrative continuum” that exists with respectto

the Board in most permitting

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

intentions to change this administrative arrangement.

See, Illinois EPA v. illinois

Pollution

Control Board,

486 NE2d 293, 294

(3M

Dist.

1985),

affirmed, illinois EPA v.

Illinois Pollution Control Board,

503 NB2d 343,

345

(III.

1986);

ESG

Watts, Inc.,

v.

illinois Pollution Control Board,

676 N.E.2d 299,

304

(3’~’

Dist.

1997).

Thus, it is the

Board’s decision in. 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

ofthe CAAPP

pennit application

was also authorized

in

a State construction

permit.

4

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While the

Borg-Warner

opinion mayoffer some interesting reading, it does not

provide a proper precedent in thi~

case.

This conclusion can be

arrivedbecause the APA

simplydoes not apply to these CAAPPpermit 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

theAct arenot subject to the contested case provisions ofthe APA.

See,

415 ILCS

5/3J.1(e)(2004).

In thecase oftheAct’s CA.APP provisions, a similar basis for

exemption is provided by the permit severability requirements that govern the illinois

EPA’s issuance of

CAAPP

permits.

Section

39.5(7)

ofthe Illinois CAAPP sets forth requirements governing the

permit content (orevery CAAPP permit issued by the illinois EPA.

Seegenerally,

4/5

ILCSS/39.5(7)(2004).

Section

39.5(7)(i)

ofthe Act provides that:

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

severability clause to ensure the continued validity ofthe various permit

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

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

This provision represents something more than the trivial

or inconsequential dictates to an agencyin its administration ofa permit program.

Rather, it clearlycontemplates a legal effect upon a pennitting action that extends beyond

the scope ofthe permit’s terms.

In otherwords, the General Assembly was not simply

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

By observing that a

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

proscribed that the uncontested conditions ofa CAAPP permit must continue to survive

notwithstanding a challenge to thepermit’s other terms.

This language signifies an

5

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ELECTRONIC FILING,

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unambiguous intent

to exempt some. segment of the CAAPP permit from any kind of

protective stay during the permit appeal

process.

For this reason, the automatic stay

provision ofthe APA cannot be said to govern CAAPP permits issued pursuant to the

Act.

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

separate grounds.

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

virtue ofthe licensing that is being obtained through the CAAPP 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 case 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 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.

They were then, as they are today,

contested case

requirementsby virtue of theirvery nature.

The earliest version oftheBoard’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 such proceedings

6

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ELECTRONIC FILING,

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to be conducted according to the Board’s Part Ill rules pertaining to

enforcement.

See,

Rule 502.

In contrast to the Regulatory and Nonadjudicative Hearings and Proceedings,

the Enforcement Proceedings ofPart Ill contained a plethora of contested case

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

authorization for hearing (i.e., Rule 306), motion practice (i.e., Rule 308), discovery (i.e.,

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

examinationofwitnesses (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

permit appeals formed the basic

framework for thecurrent-day version ofthe Board’s

procedural regulations promulgated at 35111. Adin. Code

101-130.

Although the Board’s

procedural rules may have evolved and expanded overtime, the core features ofthe

adversarial

process governing these cases haveremained substantially the 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 CAAPP program

was enacted

some twenty years later.

After

all,

it is the

procedures applicable to contested cases

and

their point of

origin

that

is relevant to

this

analysis, not the advent ofthe permitting

program

itself.2

2

Petitioner

may

counter

that

the

Borg.Warner

decision is at odds

with

this

argument

and

that part

ofthe

appellate court’s

ruling

held that

the APA’s grandththering

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

nilesat issue were written in a way that conditioned

their

effectiveness upon a futureevent.

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H.

The CAAPP

permit issued by the Illinois EPA

should not be

stayed in

its

entirety by reason of Petitioner’s alleged

justifications.

Separate and apart from its APA-related argument, Petitioner offersthe Board an

alternative basis for granting a blanket stay of the CAAPP permit.

Specifically,

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

discretionary stay authority.

See, Petition at pages

6-7.

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 regard blanket stays ofCAAPP

permits as incongruous with the aims of the illinois CAAPP 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 ofa CAMP permit mayinclude a request for stay.

The Board has

frequently granted stays in permit proceedings, often citing to the various factors

considered by Illinois courts at common law.

The factors that are usually examined by

the Board include theexistence ofa clearly ascertainable right that warrants protection,

irreparable injury in the absence ofa 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 tohave erroneously placed too much

emphasis on the substantive

permitting procedures ofthe NPDES

program,

rather than those procedures applicable 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 cases or licensing.”

S

ILCS 100/I-S

(a)

(2004)

8

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probability ofsuccess on the merits ofthe controversy.

See, Bridgestone/Firestone

QYf-

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 (consolidated) at page

5 (October 19, 2000), citing

Junkuncv. Si. Advanced

Technology & Manufacturing,

498 N.E.2d 1179

(15t

fist,

1986).

However, the Board has

noted that its consideration is not confined exclusively to

those factors nor must each one

of those factorsbe consideredby the Board in every case.

See, Bridgestone/Firestone

at

page 3.

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

of the injury that might befall an applicant from having to comply with permit conditions,

such as the compelled expenditureof “significant resources,”

Abitec Corporation

v.

jilinois EPA,

PCB No. 03-95 at page

1

(February 20, 2003), orthe 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 oftraditional factors

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

this analysis.

See,

Petition

at pages

6-7.

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 rulingbefore being

9

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required to comply with those terms ofthepermit

that

are deemed objectionable.

The

Illinois EPA recognizes thesereasons as a legitimate basis for authorizing a stay of

permit conditions contested on

appeal. However, they are not atall 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 of the conditions contained in the overall CAAPP permit, thus leaving the

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

Much of the gistof

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

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

that are purportedly beyond thescope ofthe flhinois EPA’s statutory permit authority;

If

the vast majority of the pennit’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

ofappeal.

Similarly, it is difficult to discern why Petitioner’s compliance with

uncontested permit conditions would cause irreparable harm, especially if one

can

assume, as here, that the crux ofCAAPP permitting

requirements

were

carried

over

from

previously-existing State operating

permits?

The Illinois EPA does not dispute that the Clean Air Act’s (“CAA”) Title

V

program, which formed the

frameworkfor the Illinois

CAAPP,

requires only a marshalling ofpre-existing “applicable requirements”

into a single operating permit for a

major source and that it does not generally authorize new substantive

requirements.

See,

Appalachian

Power Company v. Illinois

EPA,

208 F.3d 1015,

1026-1027 (D.C. Circuit,

2000);

Ohio Public

Interest Research Group v.

Whitman,

386

FJd

792, 794

(6d~

Cit.

2004);

in re: Peabody

Western

Coal

Company,

CAA

Appeal No.

04-01,

slip

op. at 6 (EAB, Febnsa’y

IS, 2005).

Aside from

the

conditions lawthlly imposed by the

Illinois EPAfor periodic monitoring and other miscellaneous matters,

the remainder of the CAAP? permit should be comprised of the pre-existing requirements that were

previously permitted.

A casual comparison of the CAM’? 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.

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ii.

Other related factors

Petitioner argues

that the absence of a

blanket

stay would cause

“administrative

conThsion” 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 of

any

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

ofdiscussion may be a significant

source of Petitioner’s misunderstanding, thus explaining its confusion

with

the effects of

a limited stay.

Section 3..5(4)(b) states

that a

CAAPP source

must abide by the terms of

its

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

source’s

CAAPP

permit

has

been issued.”

See.

415 ILCS 5/39.5(44’) (‘2OO4).~

A few

subsections later, the statute provides that

the

CAAPP

permit “shall upon becoming

effective supercede the State

operatingpermit.”

See, 415 ILCS 5/39.5(4)(g)(2004).

Takentogether, these provisions indicate that pennit 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 fora 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 permit

continues in effect

until

the CAAP? permit is issued.

See,

Petition a: page S.

This

assertion

is erroneous.

Section 9.1(f) applies only to New Source Review pennitsissued 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

construed with

reference to

its

context-and

surrounding

provisions,

which

are confinedentirely 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(f).

II

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have

the

CAAPP

permit’s

superceding effect on the State operating permit delayed

until

permit

effectiveness.

Petitioner

apparently

reads

the above-referenced provisions as

though

they apply

to the Board’s final action in this appeal.

See, Petition at page

5.

However)

this

argument ignores other provisions ofthe Act that dearly 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,

415 JLCS 5/39.5(9)(2004)

.~

Other

provisions ofthe Act similarly

establish that permit issuance denotes the action ofthe Illinois EPA,

not the Board, in the

context ofCAAPP permitting.6

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

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

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,

~ihile

critical

in terms of

See,

4/5 !LC’55/39.5(9)(b)(noting

requirement that the

Illinois EPA shall not “issue” the proposed

permit

ifUSEPA provides a written objection within the

45

day

review period);

415

ILCS

5/39.S~)Q)(expIaining

that when the Illinois

EPA

is in receipt of a USEPA objection arising

from a

petition, the “Agency shall not issue the permit”);

415

ILCS

5/39.S(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 ILCS 5/39.5(9)(f).

6

The

requirements

in Section

39.5(10),

entitled

“Final Agency Action,”

recognize the

standards

for

permit issuance by

the

Illinois EPA.

415 1L~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

ofa

permit

with conditions as a

basis

for appeal to the Board.

See,

415

ILCS 5/40.2(’a)(2004).

The latter provisions evengo so Ihr 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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determining whether a permit

issued

by

the Illinois

EPA becomes final,

should

not color

the meaning of other

legal

terms.7

The

issuance

or effectiveness ofa CAAPP

permit

is

functionally distinct

from

the legalisms

associated

with when a

CAAPP

permit

becomes

final.

Even putting aside the legal semantics posed by this

issue,

the

thrust

of

Petitioner’s argument misses

its mark.

Any

confusion stemming

from the appeal phase

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 of a major source’s applicable state

and

CAA-related requirements would

be brought together into a single, comprehensive document.

In doing so,

the legislation

sought tominimize 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

ofthe very problems that the Title V permitting scheme

was

meant to remedy.

As a practical matter, Petitioner’s requested relief belies 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 fllinois EPA’s failure to

provide

a

sufficient

statement

of

basis for the CAAPP permit is anotherreason

for staying the entire

permit.

Petition at page

7.

Because Petitioner treats

this

issue separately in its Petition,

the Illinois EPA will not thuly address themerits ofthe argument in this Motion.

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

request forstay.

The statement ofbasis envisionedby 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,

4J5 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 itself does. The Illinois

EPA generally does not believe that

any

perceived inadequacies in the statement ofbasis

can

lawfullyrender the entire CAAPP permit defective.

In this instance,

the Petitioner identified itsgrievances 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 fllinois 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

of

the

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

ofthe

final CAAPP permit

nor as a

reason

for voiding the

Illinois

EPA’s final permit decision.

If such challenges were recognized

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by the

Board,

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

permit

and

result in perpetual litigation

over a

largely ministerial agency

function.

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

was

prepared

in conjunction with the CAAPP permit

was

sufficiently adequate as to

comply with the Act.

Alternatively, the Illinois EPA is prepared to contend that the

statement ofbasis

requirement is predominantly procedural in nature, is confined to the

preliminary stages ofthe permitting process and arguably lacks sufficiently intelligible

standards

as to

serve as a

basis

for enforcement.

In any evdnt, the Board should deny the

Petitioner’s request for stay on

any

grounds relatingto this issue.

On the whole, the

Petitioner’s charge that the statement ofbasis affects the entire

permit

is unsupported by

law and fails to 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 of the relief granted hasbeen a function ofthe

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 parties represented by the

same law firm.

In other

CA.APP

appeal cases, the

Board

granted

stays for the

contested

permit conditions,

again mirroring

the relief

sought

‘°

See,

Lone

Star Industries,

Inc.,

v.

Illinois EPA,

P0

No. 03-94, slip opinion at 2,

(January

9, 2003);

Nielsen

v.

Bainbridge.

L.L. C.,

i’.

illinois

EPA,

PCB No. 03-98, slip opinion at 1-2

(February

6,

2003);

SaMt-Gobain

Containers. Inc.,

v. Illinois EPA,

P0

No. 04-47, 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 ofTrusteesof

Eastern

Illinois

University v. illinois EPA,

PCBNo. 04-110, slip opinion at

1

(February 5, 2004).

15

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by the petitioning party.”

In a few cases,

the

Board

does

not appear to have

granted

any

stay protection whatsoever, as

the

petitioning

party apparently

opted not to pursue such

relief.

12

In

the majority ofthe afore-referenced cases, the Illinois EPA

did

not actively

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

press ofother

matters.’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 of a lack

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

as presently

argued,

with respect to the stay relief requested in earlier cases.

However,

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

stay request in a CAAPP permit

appeal,

Illinois EPA officials became

aware of

the

potential

implications posed by stays

on the existing Title V

program approval)4

In thewake 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 of

the

relevant considerations

~

See,

Bridgestone/FirestoneOff-road

Tire Company v. illinois EPA,

PCB 02-31

at page 3 (November

1,

2001);

PPG Industries, Inc.,

v, illinois EPA, ItS

No. 03-82, slip opinion at

1-2 (February 6,2003);

Abitec

Corporation v. Illinois EPA, ItS

No.

03-95,

slip

opinion

at

1-2 (February

20,

2003);

Noveon,

inc.,

it

illinois EPA,

PCBNo. 04-102, slip opinion at 1-2 (January 22, 2004);

Oasis Industries,

Inc.,

v. Illinois

EPA,

P0

No.04-116,

slip

opinion at 1-2

(May

6,2004).

12

See, XCTC Limited

Pannership,

v.

illinois EPA,

P0

No. 01-46,

consolidated will, Georgia-Pacific

Tissue,

L.L. C.,

v. Illinois EPA,

P0

No.

01-51;

General

Electric

Company v. Illinois EPA,

P0

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

of a

CAAPP permit.

See, Abitec Corporation

v. Illinois EPA,

P0

No. 03-95, slip opinion at

I-

2

(February

20,

2003).

~

Jun Ross,

a former

Unit Manager Ic; the CAAPP

Unit

of the Division ofAir Pollution Control’s

Pennits Section, received an inquiry from a

USEPA/Region V representative in March

of

2004 pertaining

to the broad natureofthe 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.F.R.

Part 70 and the

Illinois CAAPP.

(See,

Supporting Affidavit

ofJim Rossattached to this Motion).

16

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2005

necessary to the analysis.

Accordingly, the lilinois EPA

urges

theBoard to reflect upon

additional factors that have not previouslybeen addressed

to date.’5

iv.

Statutory objectives of CAA.PP and common aftributes of permit

appeals

As discussed

earlier

in this Motion, the Illinois 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)(j)(2004).

To

this end, every CAAPP permit

is required to contain a permit

condition severing those

conditions challenged in

a subsequent permit appeal from the other

permit

conditions in

the permit.

The severability provision is prominently displayed in the Standard Permit

Conditions ofthe Petitioner’s CAAPP permit.

See,

Standard Permit Condition 9.13.

It

should also be noted that the language from the Act’s CAAPP program mirrors the

provision pmmulgated by USEPA in its regulations implementing TitleV 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 “ensurethe continued validity” ofthe ostensibly larger body of

permitting requirements that are not being challenged on appeal.

The use ofthe word’

“various” in describing those conditions that

are severable is especially important when

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

~

It

is noted

that

theBoard’s prior nñings regarding

blanket

stays

of

CAMP

permits have been granted

contingent

upon the Board’s final action in the appeal or

“until

the Board orders otherwise,”

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conditions) from the otheranother (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;

ofseveral kinds”).

Given the clear absence of ambiguity with this statutory text, no other

reasonable meaning can be attributed to

itsianguage.

The Illinois EPA readily concedes that thepermit 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 CA.APP program doesnot,

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 if blanket stays are the convention.

Where

the obvious intention of

lawmakers could be thwarted, reviewingcourts must construe a statute in a mannerthat

effectuates its object and purpose.

See, F.D,I.C.

v. Nihiser,

799 F.Supp. 904 (C.D. Ill.

1992);

Castaneda

v.

illinois Human Rights Commission,

547 N.E.2d 437 (Ill.

1989).

In

this instance, the Board should recognizean inherent limitation ofits

stay authority by

virtue ofthe illinois CAAPP’s severabilityprovision.

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

pennit

content

requirement

does not necessarily

nile out the potential merits of a blanket stay where a

permit is challenged

in its

entirety.

As previous’y

mentioned, the Illinois EPA disputes the

merits of

Petitioner’s

argument relating to a

purported

deficiency

in the CAAPP permit’s statement of basis.

18

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

is to

promote public 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 enforcement in an

areathat

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 ofthese

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 could more aptly be described as “protective

appeals.” These types ofappeals are frequently filed because a particular permit

condition affects an issue relating to on-going orfuture 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 illinois EPA.

Only rarely does a permit appeal actually proceed to hearing.

Based

on the

Illinois EPA’s

estimation, nearly

all

ofthe CAAPP permit appeals

filed with

the

Board to date could be aptly described as “protective appeals,”

While

a

L~

See,

David

P.

Novello,

The

New

Clean Air Act OperatingPermit

Program: EPA

‘s Final Rules,

23

Environmental

Law Reporter

20080,

10081-10082 (February

1993).

19

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handful of cases have been voluntarily dismissed front the Board’s docket, several of

these cases

are, and will remain, pending with the Board formonths and/or years to

come, in part,

because there is no ability to resolve them independent oftheir related

enforcement or permitting developments.

As the Illinois EPA is often an obligatory

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

practice.

Rather, the relevant point is that

significant

portions

ofa CA.APP permit stayed

in its

entirety

will be delayed from

taking effect, in spite ofbearing no relationship to the

appeal or

its ultimate outcome.

To allow

this under circumstances where petitioning

parties

seldom appear to desire

their “day in court” strikes the Illinois EPA as

needlessly

over-protective.

CONCLUSION

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

Petitioner’s request for a stay ofthe effectiveness ofthe CAMP 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, Illinois 62794-9276

(217)

524-9137

20

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FILING, RECEIVED, CLERKS OFFICE NOVEMBER18, 2005

STATE

OF

ILLINOIS

COUNTY

OF

SANGAMON

AFFIDAVIT

I, Jim Ross, being first duly sworn, depose and state that the followini statements

set forth in this instrument are true and

correct,

except as to matters therein stated to on

information and belief and, as to

suchmatters, the undersigned certifies that he believes

the

sameto be true:

I.

I am currently employed by the Illinois Environmental Protection Agency

(“Illinois EPA”) as asenior Pithik

ServibóAdministrator professional engineer.

During

the early part of 2004, I was the Manager of the Clean Air Act Permit Program

(“CAMP”) Unit in the Division ofAir Pollution Control’s Permit Section, whose offices

are located at 1021 North Grand Avenue East, Springfield, Illinois.

I há~e

been

employed with the Illinois EPA since May 1988.

2.

As part of my job responsibilities, Iparticipated in frequent teleconference

calls with representatives

from the United States Environmental Protection Agency

(IJSEPA”) at RegionV in Chicago, Illinois, involving various bending CAMP permit

applications and issues pertaining to the administration of the CA.APP program.

By

virtue of my involvement in the CA.APP permit review process, I am familiarwith

communications between USEPAJRegion 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

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

severability requirements of40 C.F.R.

70 and the illinois CAAPP.

3.

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

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this matter and, further,

fmd that the facts set forth in said responses and answers are true,

responsive and complete to the best ofmy knowledge and belief

Subscribed and Sworn

To Before Me this J~Day ofNovember 2005

OFFICIAL

SEAL

+

~

BRENDA

BOEHNER

:

~ 10Ff

PuBlic,

STATE

Cc

IWNOIS

t

Lw

a

sayeth not.

OZ±

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16, 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

MOTION IN OPPOSITION TO

PETITIONER’S REQUEST FOR STAY

AFFIDAVIT to:

Dorothy Gunn, Clerk

illinois Pollution Control Board

100 WestRandolph Street

Suite

11-500

Chicago, illinois

60601

and a true

and correct copy of the same foregoing instrument, by First Class Mail with

postage thereon Ihily paidand deposited into the possession of the United States Postal

Service, to:

BradleyP. Halloran

Sheldon A. Zabel

Hearing Officer

Kathleen

C. Bassi

James R. Thompson Center

Stephen

I.

Bonebrake

Suite 11-500

Joshua R. 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

(I

Assistant Counsel