ILLINOIS POLLUTION CONTROL BOARD
February 16, 2006
MIDWEST GENERATION, LLC, JOLIET
GENERATING STATION,
Petitioner,
v.
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Respondent.
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PCB 06-58
(CAAPP Permit Appeal - Air)
ORDER OF THE BOARD (by A.S. Moore):
This is one of 21 appeals filed by electrical power generating facilities challenging
various conditions of permits issued by the Illinois Environmental Protection Agency (Agency).
These permits were issued on September 29, 2005, under the provisions of the Clean Air Act
Permit Program (CAAPP), which is set forth in Section 39.5 of the Environmental Protection Act
(Act) (415 ILCS 5/39.5 (2004)). The CAAPP permits replace expiring State operating permits
for the same activities.
Today, the Board is not ruling on the merits of the CAAPP permit appeal brought by
Midwest Generation, LLC, Joliet Generating Station (Midwest). Instead, this order addresses
Midwest’s request for a stay of the CAAPP permit and the Agency’s request for relief from
certain record-filing requirements.
The CAAPP permit appeals raise similar issues regarding the relationship between the
CAAPP provisions of the Act and the stay provisions of the Illinois Administrative Procedure
Act (APA) (5 ILCS 100/10-65(b) (2004)). The question is whether the CAAPP permit is subject
to the APA’s “automatic stay” and, if not, whether the facts in the case justify the Board’s
exercise of its discretion to issue a stay of some or all of the CAAPP permit’s conditions.
Petitioners in these appeals have argued that the APA stays the new CAAPP permit in its
entirety, allowing that entity to operate under its old State operating permit. Alternatively,
petitioners have argued that the Board should exercise its discretion to stay either the entire
CAAPP permit or only the contested conditions of the permit. The Agency argues that the APA
does not apply, and urges in various cases either that the Board should grant no discretionary
stay, or that any stay should be limited to the contested conditions of the CAAPP permit.
Each case also raises issues about how the Agency can best file the voluminous
administrative records in these appeals, considering both the benefits and detriments of paper
(hard copy) and electronic filing. The Agency has requested additional time to file the records
2
and leave to file the records on sets of compact disks that, due to cost concerns, cannot be
electronically searched.
In this particular appeal, the Agency issued a CAAPP permit to Midwest for its facility at
1800 Channahon Road in Joliet, Will County. Midwest challenges CAAPP permit conditions
concerning, among other things, recordkeeping and reporting for hazardous air pollutant
emissions.
For the reasons below, the Board finds that the APA’s automatic stay applies to
Midwest’s CAAPP permit, consistent with long-standing case law under the Act: Borg-Warner
Corp. v. Mauzy, 100 Ill. App. 3d 862, 427 N.E.2d 415 (3rd Dist. 1981). Section 10-65(b) of the
APA (5 ILCS 100/10-65(b) (2004)) in effect issues a stay of the CAAPP permit by operation of
law. It is therefore unnecessary for the Board to reach the issue of whether to exercise its
discretion to enter a stay.
As to the filing of the Agency’s administrative record, after considering the arguments
concerning costs and ease of access to information in the record, the Board finds that the Agency
must still file the original paper or hard copy version of the record. The Agency may file the
additional required four copies of the record on compact disks; these need not be in a searchable
format. The Board grants the Agency’s motion for additional time to file the record and directs
the hearing officer to set the record-filing deadline after consulting with the parties.
PROCEDURAL BACKGROUND
On November 2, 2005, Midwest filed its petition for review in which Midwest not only
contests the Agency’s CAAPP permit determination, but also requests a stay of the issued
CAAPP permit. In a November 17, 2005 order, the Board accepted the petition for hearing but
reserved ruling on the stay issue.
On November 18, 2005, the Agency filed a response opposing Midwest’s request for
stay. On December 2, 2005, Midwest filed a reply supporting a stay and responding to the
Agency’s opposition to a stay, along with a motion for leave to file the reply. On
December 19, 2005, the Agency filed a surreply and a motion for leave to file the surreply. On
December 30, 2005, Midwest filed a response to Agency’s motion for leave to file a surreply.
1
The Board grants the parties’ respective motions for leave to file.
On December 1, 2005, the Agency filed a motion for an extension of time to file the
administrative record. Midwest filed a response on December 15, 2005. On January 30, 2006,
the Agency filed a motion for leave to file the administrative record on a set of compact disks, to
which Midwest filed a response on February 3, 2006.
2
1
The Board cites the Agency’s November 18, 2005 response opposing Midwest’s request for
stay as “Ag. Stay Resp. at _.”
2
The Board cites the Agency’s January 30, 2006 motion to file the administrative record on
compact disks as “Ag. Mot. to File at _.”
3
GENERAL STATUTORY FRAMEWORK
Chronology
The Act and General Procedural Rules: 1970-74
The Act became effective in July 1970. Three months later, the Board adopted its first
set of procedural rules, including rules for conducting contested cases and permit appeals.
Procedural Rules, R70-4 (Oct. 8, 1970). As of July 1, 1977, the version of the procedural rules
in effect was an updated version adopted in 1974. Revised Procedural Rules of the Pollution
Control Board, R73-4 (Oct. 10, 1974).
The APA: 1977
In 1977, the APA came into effect. The APA provides in pertinent part:
Sec. 1-5. Applicability.
(a) This Act applies to every agency as defined in this Act. Beginning
January 1, 1978, in case of conflict between the provisions of this Act and
the Act creating or conferring power on an agency, this Act shall control.
If, however, an agency (or its predecessor in the case of an agency that has
been consolidated or reorganized) has existing procedures on July 1, 1977,
specifically for contested cases or licensing, those existing provisions
control, except that this exception respecting contested cases and licensing
does not apply if the Act creating or conferring power on the agency
adopts by express reference the provisions of this Act. Where the Act
creating or conferring power on an agency establishes administrative
procedures not covered by this Act, those procedures shall remain in
effect.
Sec. 1-35. “License” includes the whole or part of any agency permit, certificate,
approval, registration, charter, or similar form of permission required by law, but
it does not include a license required solely for revenue purposes.
Sec. 1-40. “Licensing” includes the agency process respecting the grant, denial,
renewal, revocation, suspension, annulment, withdrawal, or amendment of a
license.
Sec. 10-65. Licenses.
(a) When any licensing is required by law to be preceded by notice and an
opportunity for a hearing, the provisions of this Act concerning contested
cases shall apply.
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(b) When a licensee has made timely and sufficient application for the renewal
of a license or a new license with reference to any activity of a continuing
nature, the existing license shall continue in full force and effect until the
final agency decision on the application has been made unless a later date
is fixed by order of a reviewing court.
***
(d) Except as provided in subsection (c), no agency shall revoke, suspend,
annul, withdraw, amend materially, or refuse to renew any valid license
without first giving written notice to the licensee of the facts or conduct
upon which the agency will rely to support its proposed action and an
opportunity for a hearing in accordance with the provisions of this Act
concerning contested cases. At the hearing, the licensee shall have the
right to show compliance with all lawful requirements for the retention,
continuation, or renewal of the license. If, however, the agency finds that
the public interest, safety, or welfare imperatively requires emergency
action, and if the agency incorporates a finding to that effect in its order,
summary suspension of a license may be ordered pending proceedings for
revocation or other action. Those proceedings shall be promptly instituted
and determined.
(e) Any application for renewal of a license that contains required and
relevant information, data, material, or circumstances that were not
contained in an application for the existing license shall be subject to the
provisions of subsection (a). 5 ILCS 100/1-5, 1-35, 1-40, 10-65 (2004).
The Borg-Warner Case: 1981
The relationship between the Act and the stay provisions of the APA has been examined
and construed in only one reported case: Borg-Warner, 427 N.E.2d 415. The Borg-Warner
Corporation (Borg-Warner) had timely filed an application for renewal of its National Pollutant
Discharge Elimination System (NPDES) permit. The Agency issued the permit May 21, 1989,
to become effective June 21, 1980. Borg-Warner sought relief simultaneously before the Board
and a circuit court.
Borg-Warner’s appeal to the Board challenged several permit conditions. Borg-Warner
sought, and was granted by the Board, a stay of enforcement of contested conditions pending
resolution of the circuit court action.
In the circuit court, Borg-Warner sought injunctive and declaratory relief and a
determination of “whether Borg-Warner was entitled to an adjudicatory hearing, under the
Illinois APA, prior to any EPA action on the permit application.” Borg-Warner, 427 N.E.2d at
417. The court granted the relief requested and ordered the Agency to grant Borg-Warner an
adjudicatory hearing on its application for renewal of its NPDES permit. The Agency appealed
the circuit court decision to the Appellate Court, arguing that no hearing was necessary.
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The Appellate Court first looked to the applicability section of the APA. The court found
that the Board’s 1974 NPDES procedural rules were not effective until NPDES authorization in
October 1977. The court further found that because there were no effective Illinois procedures
for handling NPDES permit decisions as of July 1, 1977, the provisions of the APA applied.
Borg-Warner, 427 N.E.2d at 417-18.
The court went on to find that the licensing section of the APA applied in the NPDES
permit context. The court held, however, that a pre-permit issuance hearing before the Agency
was discretionary under federal law and hence the APA; the only hearing required under federal
law is the hearing to contest permit denial or conditions. Borg-Warner, 427 N.E.2d at 419-20.
Among the issues Borg-Warner posed to the court was the issue of whether “due process
requires a stay of the effectiveness of the renewal permit until after the PCB’s decision following
the hearing.” Borg-Warner, 427 N.E.2d at 421. The court found that it need not reach the due
process issue:
Under applicable Illinois statutes, such a stay of the effectiveness of a renewal
permit is required. [quotation of the text of Section 16(b) (now Sec. 10-65(b)) of
the APA omitted] In this case, Borg-Warner made application for renewal of its
NPDES permit, that application was timely and sufficient on the record before us,
and therefore its original permit continues in effect until final action on the
application by the administrative bodies charged with making the determination.
A final decision, in the sense of a final and binding decision coming out of the
administrative process before the administrative agencies with decision making
power, will not be forthcoming in the instant case until the PCB rules on the
permit application, after Borg-Warner has been given its adjudicatory hearing
before the PCB. Thus, until that time, under Section 16(b), the effectiveness of
the renewed permit issued by the EPA is stayed.
Id
.
CAAPP Permit Program: 1990-1994
The CAAPP implements Title V of the federal Clean Air Act, 42 U.S.C. 7401
et seq
.
The federal Clean Air Act Amendments of 1990 led to enactment of Section 39.5 of the Act,
establishing the CAAPP in Public Act 92-24 and 93-32, respectively effective July 1, 2001 and
July 1, 2003.
Section 39.5 of the Act (415 ILCS 5/39.5 (2004)) is too lengthy to set out in detail here.
Among the Section’s purposes is establishment of procedures to authorize the Agency to issue
CAAPP permits to replace the State operating permits the Agency formerly issued under Section
39(a) of the Act (415 ILCS 5/39(a) (2004)). Section 39.5(4)(g) provides:
The CAAPP permit shall upon becoming effective supersede the State operating
permit. 415 ILCS 5/39.5(4)(g) (2004).
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The Section does not, by its terms, address the issue of a stay of a CAAPP permit during
the pendancy of any appeal of conditions. On this issue, in this proceeding, the Agency also
points only to Section 39.5(7)(i):
Each CAAPP permit issued under subsection 10 of this Section shall include a
severability clause to ensure the continued validity of the various permit
requirements in the event of a challenge to any portions of the permit. 415 ILCS
5/39.5(7)(i) (2004).
The Board’s procedural rules specifically for CAAPP permit appeals were not adopted
and effective until March 18, 1994, in response to the Agency’s Section 28.5 fast-track
rulemaking proposal. Amendments to the Rule for Clean Air Act Permit Appeals and Hearings
Pursuant to Specific Rules, 35 Ill. Adm. Code Parts 105 and 106, R93-24 (Mar. 3, 1994);
see
also
415 ILCS 5/28.5 (2004). The R93-24 rules themselves did not specifically address the issue
of stays during the pendancy of CAAPP permit appeals. The original Agency proposal
contained a section requiring an applicant to seek a stay of a CAAPP permit during the appeal.
The Agency position that a Board-entered stay was necessary in every case was vigorously
contested by a number of other rulemaking participants, including the Illinois Environmental
Regulatory Group (IERG) and the American Automobile Manufacturer’s Association, citing
Borg-Warner and Wells Manufacturing Co. v. IEPA, 195 Ill. App. 3d 593, 552 N.E.2d 1074 (1st
Dist. 1990).
Association cites to Borg—Warner Corporation v.
The Agency’s proposed stay provision was removed before the Board adopted final rules.
The Board’s final opinion made it clear that the participants had not reached agreement on the
stay issue. Rather, they suggested, and the Board agreed, that the rulemaking was not the
appropriate time or forum to resolve the issue. CAAPP Procedural Rules, R93-24, slip op. at 5
(Mar. 3, 1994).
The Board’s R93-24 CAAPP procedural rules were integrated into the existing set of
procedural rules during the Board’s omnibus procedural rule clean-up, effective January 1, 2001.
Revision of the Board’s Procedural Rules: 35 Ill. Adm. Code 101-130, R00-20 (Dec. 21, 2000).
The CAAPP procedural rules are set forth at 35 Ill. Adm. Code 105.300-105.304.
BOARD ANALYSIS
Stay Issue
The Agency does not dispute that air permitting constitutes “licensing” under Section 1-
40 of the APA. The Agency also agrees that “the Borg-Warner decision may still reflect good
law and that it probably warrants, in the appropriate case, application of the doctrine of
stare
decisis
by Illinois courts.” Ag. Stay Resp. at 4. The Agency contends, however, that the APA
does not apply to CAAPP permits for two reasons:
1. In enacting the CAAPP severability clause in Section 39.5(7)(i) of the Act, “the
General Assembly has effectively exempted [CAAPP permits] from” the APA, so
Borg-Warner is not “a proper precedent.”
Id
. at 5.
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2. The CAAPP permit appeal process is subject to the “grandfathering clause” of the
APA because the Board had air permit appeals on the books before the APA’s
July 1, 1977 applicability date.
Id
. at 6.
The Agency agrees that the Board has discretionary authority to issue stays in permit
appeals, including those under CAAPP. Further, the Agency notes that the Board has issued
orders staying either the contested conditions or the CAAPP permits in their entirety, depending
upon the parties’ arguments. The Agency now argues, however, that the Board should enter
discretionary stays only of contested permit conditions:
1. Because petitioners have failed to prove irreparable harm from having to comply
with uncontested permit conditions carried over from previously-existing State
operating permits. Ag. Stay Resp. at 10.
2. To effect the legislative policies behind the CAAPP program, noting that the
United States Environmental Protection Agency (USEPA) has questioned broad
stays of CAAPP permits, as attested to by affidavit.
Id.
at 16, 17-20.
First, the Board finds that Section 39.5 of the Act does not by its terms specifically
exempt CAAPP permits from the APA. The legislature has demonstrated that it knows how to
exempt particular programs from APA requirements. As the Agency has pointed out, the
legislature has done so for the administrative citation program under Section 31.1 of the Act (415
ILCS 5/31.1 (2004)). Section 31.1(e) specifically states in pertinent part that “Sections 10-25
through 10-60 of the [APA] shall not apply.” 415 ILCS 5/31.1(e) (2004). The legislature does
not do so in Section 39.5. Section 39.5 mentions the APA at various points, but only in the
context of Agency adoption of procedural rules under the APA to implement certain subsections.
See, e.g
., 415 ILCS 5/39.5(4)(h) (2004). The Board is persuaded that Section 39.5(7) refers only
to the validity of permit conditions, rather than to their effective date, as Midwest argues.
Next, the Board finds that the CAAPP program is not grandfathered out of the APA, and
that Borg-Warner is not distinguishable here. The Agency’s arguments for distinguishing or
disregarding the Borg-Warner holding simply are not persuasive. The Board did have general
permit appeal rules in 1974, prior to the APA’s applicability in 1977. These were the same
general rules, however, that the Borg-Warner court found did not prevent applying the APA to
NPDES permits. The Clean Air Act Amendments were not adopted by Congress until 1990; the
General Assembly did not create the CAAPP program until 1992, amending it in 1994; and the
Board’s specific procedural rules for CAAPP appeals were not adopted and effective until
March 18, 1994, in response to the Agency’s Section 28.5 fast-track rulemaking proposal in
CAAPP Procedural Rules, R93-24.
In summary, as did the Borg-Warner court in the NPDES permit context, the Board finds
that the APA’s automatic stay applies to this CAAPP permit. Section 10-65(b) of the APA
effectively issues a stay of the CAAPP permit by operation of law. Accordingly, the Board need
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not reach the issue of whether to exercise its discretion to enter a stay in this particular case.
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Midwest must continue to operate by the terms and conditions of its prior State operating permit
during the pendancy of this appeal.
Finally, even if USEPA has concerns with the APA stay applying to CAAPP permits, the
Board cannot find that a strained reading of both the Act and the APA is an acceptable solution.
If necessary, the Agency may certainly choose to bring legislative attention to the matter.
See
,
e.g.
, 415 ILCS 5/39(c) (2004) (in response to USEPA concerns with variances and permit
appeals being granted by operation of law in various federal programs, the Agency proposed and
the legislature enacted the
mandamus
action as an alternative approach).
Administrative Record Filing
Under Section 105.302(f) of the Board’s procedural rules, the Agency must file the entire
record of its determination within 30 days after it is served with the petition for review, unless
the Board or the hearing officer orders otherwise. 35 Ill. Adm. Code 105.302(f). Under Section
101.302(h)(2), the Agency is required to file a signed paper original and four duplicate copies
(five total) of the record. 35 Ill. Adm. Code 101.302(h)(2). Section 101.302(d) provides:
Filing by electronic transmission or facsimile will only be allowed with the prior
approval of the Clerk of the Board or hearing officer assigned to the proceeding.
35 Ill. Adm. Code 101.302(d).
In its January 30, 2006 motion in this and the other 20 CAAPP permit appeals, the
Agency observes that its motions for additional time to file the administrative records are
pending. The Agency states that these motions for extensions were filed due to the volume of
material involved, the likelihood that not all cases would go to hearing, and “due, in small part,
to the review time required for the remaining several hundred miscellaneous electronic mail
messages of Illinois EPA personnel that had not yet been reviewed.” Ag. Mot. to File at 2.
The Agency’s January 30, 2006 motion addresses the logistics of preparing and filing the
voluminous administrative records. The Agency seeks leave to file a scanned version of the
administrative record on compact disk. The Agency explains that, due to staff constraints, the
Agency has explored the possibility of hiring an outside contractor to perform required copying
or scanning of hard copies, and has in fact located a contractor who will scan the record onto a
3
In one of the 21 pending CAAPP permit appeals, the Board granted a stay of only
contested
permit conditions, as requested by that petitioner and supported by the Agency. Soyland Power
Cooperative, Inc. v. IEPA, PCB 06-55 (Jan. 5, 2006). Today’s holding here is not inconsistent
with that action. As remarked by the Agency regarding stays in permit appeals, the Board has
tended to grant parties the relief they request. The Board believes that, in some cases, a permitee
may find it advantageous to operate under most of the terms of a renewed permit, rather than
under the terms of the old one. The Board finds nothing in the Act or APA that prevents a
permitee from electing
not
to avail itself of the APA stay. In such situations, the permitee then
would be operating under the terms of the most-recently issued permit, as to all but the
conditions explicitly stayed by Board order.
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set of compact disks. The Agency believes, however, that to produce a searchable version of the
scanned compact disks would be cost prohibitive to the State of Illinois:
Under the State contract, it costs the Illinois EPA a little over three cents a page to
have a document scanned by the contractor. To provide a searchable scanned
document via optical character recognition, it would cost the Illinois EPA
approximately a dollar a page for a typical written document. While the
contractor does not provide a guarantee on the accuracy of this function, it
typically operates with 70% degree of accuracy. If the Illinois EPA requested the
same search function on all handwritten documents in the Administrative Record
as well, it would cost approximately $1.65 per page. Counsel for the Illinois EPA
estimates that there are approximately 150,000 pages including countless
handwritten documents in the Administrative Record and the related records
pertaining to the twenty CAAPP permit appeals involving the other electrical
power generating facilities in the State. The cost differential between the varying
degrees of searchable records and a non-searchable record is anywhere from
$150,000 to $247,500 versus $5,000. Ag. Mot. to File at 4, n.1.
The Agency points out that it “will be providing a type of search mechanism through the
bate stamping [
sic
] of the documents that will take place prior to shipment of the documents to
the scanning service.” Ag. Mot. to File at 4. The Agency therefore seeks leave to file its record
by providing five sets of compact disks containing the record specific to any particular appeal,
and five sets of compact disks containing “the additional three trial boxes more aptly
characterized as general reference material and documents relevant to the decisions underlying
the issuance of all twenty-one CAAPP permits to the State’s electrical generating facilities.”
Id.
at 5.
The Board has long been committed to streamlining its filing process, reducing the
number of paper copies filed, and accommodating electronic filing to the extent practicable given
its equipment and staffing constraints.
See, e.g
., Revision of the Board’s Procedural Rules: 35
Ill. Adm. Code 101-130, R00-20, slip op. at 5 (Dec.21, 2000). The Board has successfully
completed a pilot electronic filing program, and has continued to gather experience and
information with an eye to codifying the electronic filing process. But, the Board has not as yet
developed procedural rules outlining all details and requirements to electronically file
documents.
The filing of the 21 CAAPP permit appeals has both underscored the desirability of
electronic filing, and pointed out some of the practical problems inherent in transitioning from a
completely paper file maintenance process to a largely electronic file maintenance process. At
this juncture, the Board is not prepared to agree to the filing of this CAAPP record in non-
searchable electronic copy only. The Agency correctly notes that paper copy is not searchable in
the same way that is electronic text. Paper copies, however, can be physically manipulated to
allow for side-by-side comparison of various pages. Hard copies, even photocopies of original
documents, generally provide fewer legibility challenges than do documents that have been
scanned from hard copy into electronic text, and then printed from electronic text to hard copy.
10
The Board grants in part the Agency’s motion for leave to file the administrative record
on compact disks. The Board finds it essential that the Agency still be required to file the
original paper or hard copy version of the record. The Agency may file the additional required
four copies of the record on compact disks; these need not be in a searchable format. The Board
also grants the Agency’s motion for more time to file the record and directs the hearing officer to
set the filing deadline after consulting with the Agency and Midwest.
SUMMARY OF FINDINGS
1. The Board finds that the APA’s “automatic stay” applies to this case, consistent
with long-standing case law under the Act: Borg-Warner Corp. v. Mauzy, 100 Ill.
App. 3d 862, 427 N.E.2d 415 (3rd Dist. 1981). Accordingly, Section 10-65(b) of
the APA (5 ILCS 100/10-65(b) (2004)) effectively stays Midwest’s CAAPP
permit by operation of law. It is therefore unnecessary for the Board to reach the
issue of whether to exercise its discretion to stay Midwest’s CAAPP permit.
2. The Agency’s motion for leave to file the administrative record on compact disks
is granted in part. The Agency must file the original paper or hard copy version
of the record. The Agency may file the additional required four copies of the
record on compact disks; these need not be in a searchable format.
3. The Board grants the Agency’s motion for additional time to file the record and
directs the hearing officer to set the record-filing deadline after consulting with
the parties.
IT IS SO ORDERED.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board
adopted the above order on February 16, 2006, by a vote of 4-0.
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
