R
CLERK'S
ECEIVED
OFFICE
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
MAY 3 0 2006
IN THE MATTER OF :
)
PolSTATElutionOFControl
I
Board
PROPOSED NEW CAIR SO2, CAIR NOx
)
TRADING
ANNUAL AND
PROGRAMS,
CAIR NOx
35 ILLOZONE
. ADMSEASON)
.
R06- ?
)
(Rulemaking- Air)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES,
)
SUBPARTS A, C, D and E
)
NOTICE
TO: Dorothy Gunn, Clerk
Matthew Dunn, Chief
Illinois Pollution Control Board
Division of Environmental Enforcement
James R
. Thompson Center
Office of the Attorney General
100 West Randolph, Suite 11-500
188 West Randolph St ., 20` h Floor
Chicago, Illinois 60601-3218
Chicago, IL 60601
Virginia Yang
Deputy Legal Counsel
Illinois Department of Natural Resources
One Natural Resources Way
Springfield, IL 62702
PLEASE TAKE NOTICE that I have today filed with the Office of the Pollution Control
Board the
REGULATORY PROPOSAL entitled "PROPOSED NEW CAIR SO,, CAIR NOx
ANNUAL AND CAIR NOx
OZONE SEASON TRADING PROGRAMS 35 ILL ADM
CODE 225, CONTROL OF EMISSIONS FROM LARGE COMBUSTION SOURCES,
SUBPARTS A, C, D AND E," MOTION TO EXPEDITE RULEMAKING, MOTION TO
HOLD REQUIRED HEARINGS IN SPRINGFIELD AND COLLINSVILLE, MOTION FOR
WAIVER OF REQUIREMENTS and APPEARANCES
of the Illinois Environmental Protection
Agency a copy of which is herewith served upon you
.
ILLINOIS ENVIRONMENTAL
PROTECTIO AG
C
By:
Rachel L Doctors
Assistant Counsel
Division of Legal Counsel
DATED:
µ~(~~ 22, 2000,
1021 North GranW Avenue East
P .O
. Box 19276
Springfield, Illinois 62794-9276
THIS FILING IS SUBMITTED
217 .782 .5544
ON RECYCLED PAPER
217 .782 .9143 (TDD)
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
RECEPVED
CLERK'S
OFFICE
MAY
3.0
2006
R06-
STATE OF
ILLINOIS
Pollution Control Board
(Rulemaking- Air)
IN THE MATTER OF :
)
PROPOSED NEW CAIR SO2, CAIR NOx )
ANNUAL AND CAIR NOx OZONE SEASON)
TRADING PROGRAMS, 35 ILL . ADM.
)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES, )
SUBPARTS A, C, D and E
)
TABLE OF CONTENTS OF REGULATORY SUBMITTAL
Notice of Filing Proposal
2 .
Appearances of Rachel L
. Doctors, Assistant Counsel and John J . Kim, Managing
Attorney, for the Illinois Environmental Protection Agency
3 .
Statement of Submittal by Director Douglas P . Scott
4.
Motion to Expedite Rulemaking
5 .
Motion to Hold Required Hearings in Springfield and Collinsville
6.
Motion for Waiver of Requirements
A
.
Letter to Matthew Dunn, Office of the Attorney General
B.
Letter to Virginia Yang, Department of Natural Resources
7.
Statement of Reasons
8 .
Exhibits to Statement of Reasons
A.
Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean
Air Interstate Rule) ; Revisions to Acid Rain Program ; Revisions to the NOx SIP
Call ; Final Rule, 70 Fed. Reg. 25162 (May 12, 2005) .
B .
Air Pollution Control- Transport of Emissions of Nitrogen Oxides (NOx) and
Sulfur Dioxide (SO2) ; Final Rule, 71 Fed. Reg. 25328 (April 28, 2006) .
C .
Nitrogen Oxides (NOx) Reduction under Phase II of the Acid Rain Program, U .S .
Environmental Protection Agency, Clean Air Markets .
See, www.epa.gov/ainnarkets/arp/nox/phase2 .html.
D.
Fossil
Fuel-Fired Power Plants : Report to the House and Senate Environment
and Energy Committees,
IEPA/BOA/04-020, Illinois Environmental Protection
Agency, September 2004 .
E.
Guidance on Establishing an Energy Efficiency and Renewable Energy (EE/RE)
Set-Aside in the NOx Budget Trading Program, U
.S . Environmental Protection
Agency, Office of Atmospheric Programs, March 1999 .
F.
Guidance on State Implementation Plan (SIP) Credits for Emission Reductions
From Electric-Sector Energy Efficiency and Renewable Energy Efficiency and
Renewable Energy Measures, U
.S . Environmental Protection Agency, Office of
Air and Radiation, August 2004 .
Illinois Sustainable Energy Plan,
Office of Governor Rod R . Blagojevich,
Submitted to the Illinois Commerce Commission, February 11, 2005
.
H .
Stakeholder Meetings, Sign-in Sheets dated January 24, 2006, January 31, 2006,
February 7, 2006, February 14, 2006, February 21, 2006, and February 28, 2006
.
9.
Synopsis of Testimony
10.
First Notice Form for New 35 Ill . Adm. Code 225, Subparts A, C, D and E
11 .
Proposed New 35 Ill . Adm. Code 225, Subparts A, C, D and E
12.
Technical Support Document for Control of Sulfur Dioxide and Nitrogen Oxide
Emissions from Electric Generating Units, AQPSTR 06-01, Illinois Environmental
Protection Agency, March 2006
.
13.
Documents Relied Upon (See, Attachment A)
Note
: An asterisk (*) indicates documents that the Illinois EPA has not provided for the
Board in this proposal packet .
14.
Incorporations by Reference (Note
: The Agency has not provided copies of the items
denoted with an asterisk (*) listed below for the Board in this proposal packet
. The
Agency has requested a waiver of the requirement to submit these items to the Board as
these items are voluminous and readily available to the Board .)
A.
* CAIR SO2 Trading Program, 40 CFR 96, subpart AAA (CAIR SO2 Trading
Program General Provisions, excluding 40 CFR §§ 96 .204, and 96.206); 40 CFR
96, subpart BBB (CAIR Designated Representative for CAIR S02 Sources) ; 40
CFR 96, subpart FFF (CAIR S02
Allowance Tracking System) ; 40 CFR 96,
subpart GGG (CAIR S0
2
Allowance Transfers)
; and 40 CFR 96, subpart HHH
(Monitoring and Reporting.
2
B .
* CAIR NOx Annual Trading Program, 40 CFR 96, subpart AA (NOx Annual
Trading Program General Provisions, excluding 40 CFR §§ 96
.104, 96 .105(b)(2),
and 96 .106)
; 40 CFR 96, subpart BB (CAIR Designated Representative for CAIR
NOx Sources)
; 40 CFR 96, subpart FF (CAIR NOx
Allowance Tracking System) ;
40 CFR 96, subpart GG (CAIR NOx Allowance Transfers) ; and 40 CFR 96,
subpart HH (Monitoring and Reporting) .
C.
* CAIR NOx Ozone Season Trading Program 40 CFR 96, subpart AAAA (CAIR
NOx Ozone Season Trading Program General Provisions) (excluding 40 CFR §§
96 .304, 96 .305(b)(2), and 96
.306) ; 40 CFR 96, subpart BBBB (CAIR Designated
Representative for CAIR NOx Ozone Season Sources)
; 40 CFR 96, subpart FFFF
(CAIR NOx Ozone Season Allowance Tracking System)
; 40 CFR 96, subpart
GGGG (CAIR NOx
Ozone Season Allowance Transfers) ; and 40 CFR 96, subpart
HHHH (Monitoring and Reporting) .
D.
* 40 CFR 75 (2005) .
E .
* 40 CFR 78 (2005)
.
F .
Federal Energy Management Program, M&V
Measurement and Verification for
Federal Energy Projects, U
.S . Department of Energy, Office of Energy
Efficiency and Renewable Energy, Version 2.2,
DOE/GO-102000-0960
(September 2000) .
15.
Certificate of Service
16.
Disk in Microsoft WORD containing First Notice Form for New Part 225
(FIRSTNOTICE-225
.doc) and Proposed New Part 225 (RULE-225
.doc) .
3
7 .
*Identification of Ozone Areas for Which the 1-Hour Standard Has Been
Revoked and Technical Correction to Phase 1 Rule ; Final Rule, 70 Fed. Reg.
44470 (August 3, 2005) .
8
. * Regional Haze Regulations and Guidelines for Best Available Retrofit
Technology (BART) Determinations
; Final Rule, 70 Fed. Reg. 39104 (July 6,
2005) .
9. * Finding of Failure to Submit Section 110 State Implementation Plans for
Interstate Transport for the National Ambient Air Quality Standards for 8-Hour
Ozone and PM2
.5 ; Final Rule, 70 Fed. Reg. 21147 (April 25, 2005) .
10. * Air Quality Designations and Classifications for the Fine Particles (PM2 .5)
National Ambient Air Quality Standards ; Final Rule, 70 Fed. Reg. 944 (January 5,
2005).
11 . * Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine
Particulate Matter and Ozone (Clean Air Interstate Rule) ; Proposed Rule, 69
Fed.
Reg.
32684 (June 10, 2004) .
1
ATTACHMENT A
Documents Relied Upon
A.
Documents Relied Upon - Statement of Reasons
1 . * The Clean Air Act, as amended, 42 U
.S.C. 7401 et seq .
2. * The Illinois Environmental Protection Act, 415 ILCS 5/1 et seq
.(2005) .
3 .
* National Ambient Air Quality Standards for Particulate Matter ; Proposed Rule,
70 Fed. Reg. 2620 (January 17, 2006) .
4.
* Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality
Standard ; Final Rule, 70 Fed. Reg. 71612 (November 29, 2005) .
5 . * Proposed Rule to Implement the Fine Particulate National Ambient Air Quality
Standards ; Proposed Rule, 70 Fed. Reg. 65984 (November 1, 2005)
.
6 .
* Rulemaking on Section 126 Petition from North Carolina To Reduce Interstate
Transport of Fine Particulate Matter and Ozone
; Federal Implementation Plans to
Reduce Interstate Transport of Fine Particulate Matter and Ozone ; Revisions to
the Clean Air Interstate Rule
; Revisions to the Acid Rain Program ; Proposed
Rule, 70 Fed. Reg. 49708 (August 24, 2005) .
12
. * Air Quality Designations and Classifications for the 8-Hour Ozone National
Ambient Air Quality Standards
; Early Action Compact Areas with Deferred
Effective Dates ; Final Rule, 69 Fed. Reg.
23858 (April 30, 2004) .
13
. * Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality
Standard-Phase 1 ; Final Rule, 69
Fed. Reg. 23951 (April 30, 2004) .
14
. * Interstate Ozone Transport : Response to Court Decisions on the NOx SIP Call,
NOx SIP Call Technical Amendments, and Section 126 Rules ; Final Rule, 69
Fed. Reg. 21604 (April 21, 2004) .
15
. * Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone
(Interstate Air Quality Rule)
; Proposed Rule, 69 Fed. Reg. 4566 (January 30,
2004)
.
16. * Regional Haze Regulations
; Final Rule, 64 Fed. Reg. 35714 (July 1, 1999) .
17
. * Finding of Significant Contribution and Rulemaking for Certain States in the
Ozone Transport Assessment Group Region for Purposes of Reducing Regional
Transport of Ozone : Final Rule, 63 Fed. Reg. 57356 (October 27, 1998)
18
. * National Ambient Air Quality Standards for Particulate Matter ; Final Rule, 62
Fed. Reg. 38652 (July 18, 1997) .
19
. * National Ambient Air Quality Standards for Ozone ; Final Rule, 62 Fed. Reg.
38856 (July 18, 1997) .
20. * Michigan v
. EPA, 213 F .3d 663 (D.C. Cir. 2000).
21 . * U.S. Bank National Association v. Clark, 217 I11
.2d 334, 837 N .E.2d 74 (2005) .
22. * Spina v. Toyota Motor Credit Corporation, 301 II1.App.3d
364, 703 N .E.2d 484
(1 51
Dist. 1998).
23 . * In re Marriage ofLasky, 176 I11.2d 75, 678 N .E.2d
1035 (1997)
.
24. * Hodel v. Virginia Surface Mining and Reclamation Association,
452 U.S . 264
(1981) .
25 . * Virginia v. Browner, 80 F.3d
869 (4th Cir. 1996).
26 . * New York v . United States, 505 U.S. 144 (1992) .
2
B.
Documents Relied Upon-Technical Support Document
1
. * National Ambient Air Quality Standards for Ozone ; Final Rule,
62 Fed. Reg.
38856 (July 18, 1997) .
2 . * National Ambient Air Quality Standards for Particulate Matter
; Final Rule, 62
Fed. Reg. 38652 (July 18, 1997) .
3
. * Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone
(Clean Air Interstate Rule)
; Revisions to Acid Rain Program ; Revisions to the
NOx SIP Call ; Final Rule,
70 Fed. Reg. 25162 (May 12, 2005)
. (Exhibit A to the
Statement of Reasons)
.
4
. * The Clean Air Act, as amended, 42 U.S.C . 7401 et seq.
5
. * Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone
(Interstate Air Quality Rule) ; Proposed Rule, 69 Fed. Reg.
4566 (January 30,
2004) .
6
. * Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine
Particulate Matter and Ozone (Clean Air Interstate Rule) ; Proposed Rule, 69
Fed.
Reg. 32684 (June 10, 2004) .
7
. * Regional Haze Regulations and Guidelines for Best Available Retrofit
Technology (BART) Determinations
; Final Rule, 70 Fed. Reg. 39104 (July 6,
2005) .
8 .
Control Techniques for Sulfur Oxide Emissions from Stationary Sources, EPA-
450/3-81-004, U.S
. Environmental Protection Agency-Office of Air and
Radiation, April 1981 .
9. Alternative Control Techniques Document--NOx Emissions from Utility Boilers,
EPA-453/R-94-023, U . S
. Environmental Protection Agency-Office of Air
Quality Planning and Standards, Research Triangle Park, N . C. 27711, March
1994.
10
. Alternative Control Techniques Document--NOx Emissions from Stationary Gas
Turbines,
EPA-453/R-93-007, U. S. Environmental Protection Agency-Office of
Air Quality Planning and Standards, Research Triangle Park, N . C. 27711,
January 1993 .
11
. Controlling Nitrogen Oxides Under the Clean Air Act :• A Menu of Options, State
and Territorial Air Pollution Program Administrators/ Association of Air
Pollution Control Officials, July 1994 .
3
12. The Mega Symposium SO
2
Control Technologies and Continuous Emission
Monitors, Electric Power Research Institute, EPRI-DOE-EPA Combined Utility
Air Pollutant Control Symposium, TR-108683-V2, August 1997 .
13
. Regulatory Impact Analysis for the Final Clean Air Interstate Rule, EPA-452/R-
05-002, U . S. Environmental Protection Agency-Office of Air and Radiation,
March 2005 .
14.
Annual Energy Outlook 2004 with Projections to 2025, DOE/EIA-0383, U
.S .
Department of Energy, Energy Information Administration, January 2004.
15 . Technical Support Document for the Clean Air Interstate Rule Notice of Final
Rulemaking
; Regional and State SO2 and NOx Emissions Budgets, U .S.
Environmental Protection Agency- Office of Air and Radiation, March 2005
.
16. Output Based Regulations
: A Handbook of Air Regulators, U .S. Environmental
Protection Agency, Office of Atmospheric Programs, August 2004
.
17. Illinois Sustainable Energy Plan,
Office of Governor Rod R . Blagojevich,
Submitted to the Illinois Commerce Commission, February 11, 2005
.
18. Federal Energy Management Program,
M&VMeasurement and Verification for
Federal Energy Projects, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Version 2 .2, DOE/GO-102000-0960,
September 2000 .
19. Incorporating Renewables Under CAIR, Presentation to American Wind Energy
Association Seminar, Massachusetts Department of Environmental Protection,
January 12, 2006.
20
. U.S . Department of Energy, Energy Efficiency and Renewable Energy, Illinois
Wind Maps. http ://www.awea.org/projects/illinois
.html
21 . Wind Project Data Base, American Wind Energy Association .
http ://www.awea
.org/projects/illinois .html
22. U.S. Hydropower Resources Assessment for Illinois, Prepared for the U
.S.
Department of Energy Assistant Secretary for Energy Efficiency and Renewable
Energy by Idaho National Engineering Laboratory Renewable Energy Products
Department, Lockheed Martin Idaho Technologies Company, January 1997
.
23. Landfill Methane Outreach Program, Landfill Project Database, U
.S.
Environmental Protection Agency .
http://www.epa.gov/lmop/proi/xls/candlfslmopdata.xls
24. State Electricity Profiles 2002, Department of Energy-Energy Information
4
Administration .
25. Guidance on State Implementation Plan (SIP) Credits for Emission Reductions
From Electric-Sector Energy Efficiency and Renewable Energy Efficiency and
Renewable Energy Measures, U .S . Environmental Protection Agency, Office of
Air and Radiation, August 2004
.
26 .
Job Jolt : The Economic Impacts of Repowering the Midwest, the Clean Energy
Development Plan for the Heartland, An Economic Study by the Regional
Economics Applications Laboratory for the Environmental Law and Policy
Center, February 2001
.
27. Wind Energy for Rural Economic Development, WINDPOWER 2005, National
Renewable Energy.
28. Landfill Methane Outreach Program (LMOP), U
.S . Environmental Protection
Agency. http ://www.epa.gov/lmop/proj/index .htm
and
http ://www.epa.gov/lmop/benefits .html
29
. "Coal Mining Poised to Make Comeback in Illinois," State Journal Register,
March 20, 2006 .
30. Email from Conrad Anderson, Madison Power Corporation to Roston Cooper,
Illinois EPA, Permit Section, dated March 20, 2006 .
31 . Growing Green Power in Illinois, Conscious Choice, August 2001 .
http://www.consciouschoice
.com/2001 /cc 1408/growinggreenpowerl408
.html
32. Developing and Updating Output Based NOx Budget Trading Program Under the
NOx
SIP Call, U.S
. Environmental Protection Agency, May 8, 2000 .
33. Analysis of Illinois NOx Budget Reductions, ICF Resources, LLC, March 25,
2006.
34. Average Daily Solar Radiation Per Month, National Renewable Energy
Laboratory Resource Assessment Program .
35. The Chicago Solar Partnership, table generated from the data contained at
http://www.chicagosolarpartnership .com
36. Illinois Coal Properties in Regard to Mercury, Abadi, Rostom, ICCI Mercury
Meeting, Chicago, IL, November 9, 2005 .
37. Technical Support Document for Final Clean Air Interstate Rule- Air Quality
Modeling, U.S. Environmental Protection Agency- Office of Air and Radiation,
March 2005 .
5
38
. Attainment Strategy Options-DRAFT, LADCO, October 28, 2005
.
39 . Annual Energy Outlook 2006 with Projections to 2030,
DOE/EIA-0383 (2006),
U.S
. Department of Energy, Energy Information Administration, February 2006
.
6
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
RECEIVED
CLERK'S OFFICE
)
PROPOSED NEW CAIR S02, CAIR NOx
)
ANNUAL
AND CAIR NOx
OZONE SEASON )
R06-
MAY 3.0
2006
TRADING
PROGRAMS, 35 ILL
. ADM .
STATE OF ILLINOIS
) (Rulemaking- Air)
CODE 225, CONTROL OF EMISSIONS
)
Pollution Control Board
FROM LARGE COMBUSTION SOURCES,
)
SUBPARTS A, C, D and E
)
APPEARANCE
The undersigned, as one of its attorneys, hereby enters an Appearance on behalf of the
Illinois Environmental Protection Agency
.
Respectfully submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:
DATED :
May 22, 2006
1021 North Grand Ave . East
P .O . Box 19276
Springfield, Illinois 62794-9276
217.782.5544
217 .782 .9143 (TDD)
Rachel L
. Doctors
Assistant Counsel
Division of Legal Counsel
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
)
PROPOSED NEW CAIR SO2, CAIR NOx
)
ANNUAL AND CAIR NOx OZONE SEASON) R06-
TRADING PROGRAMS, 35 ILL
. ADM.
) (Rulemaking- Air)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES, )
SUBPARTS A, C, D and E
)
APPEARANCE
The undersigned, as one of its attorneys, hereby enters an Appearance on behalf of the
Illinois Environmental Protection Agency .
DATED:
May 22, 2006
1021 North Grand Ave
. East
P.O. Box 19276
Springfield, Illinois 62794-9276
217 .782.5544
217 .782.9143 (TDD)
Respectfully Submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
o J. K'
Managing Attorney, Air Regulatory Unit
Division of Legal Counsel
RER
eIve
Pollution
STATE
MAY
Ocontrol
3
r0
ILLIN01
2006
Bo,
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
PROPOSED NEW CAIR S02, CAIR NOx
ANNUAL AND CAIR OZONE SEASON
TRADING PROGRAMS, 35 ILL
. ADM
.
CODE 225, CONTROL OF EMISSIONS
FROM LARGE COMBUSTION
SOURCES, SUBPARTS A, C, D and E
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY PROPOSAL OF
REGULATIONS
The Illinois Environmental Protection Agency moves that the Illinois Pollution Control
Board adopt the attached regulations .
Respectfully submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:
DATED :
May 22, 2006
1021 North Grand Ave . East
P.O
. Box 19276
Springfield, Illinois 62794-9276
217/782-3397
RECEIVED
CLERK'S OFFICE
MAY 3 0 2006
R06-
STATE OF
ILLINOIS
(Rulemaking- Air)
Pollution Control Board
Dougla
Scott
Director
3
d
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
)
PROPOSED NEW CAIR SO2, CAIR NOx )
ANNUAL AND CAIR NO x
OZONE SEASON)
TRADING PROGRAMS, 35 ILL. ADM.
)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES, )
SUBPARTS A, C, D and E
)
RECEIVED
R06-
MAY 3
0
2006
(Rulemaking- Air)
Pollution
STATE OF
Control
ILLINOIS
Board
MOTION FOR EXPEDITED REVIEW
NOW COMES Proponent, Illinois Environmental Protection Agency ("Illinois EPA"), by
one of its attorneys, Rachel L . Doctors, and pursuant to 35 111 . Adm . Code 101 .512, respectfully
submits this Motion for Expedited Review ("Motion") in the Matter of Proposed New CAIR
SO2, CAIR NO, Annual and CAIR NO x Ozone Season Trading Programs, 35 ILL
. ADM.
CODE 225, Control of Emissions from Large Combustion Sources, Subparts A, C, D and E . In
support of its Motion, the Illinois EPA states as follows :
On July 18, 1997, the United States Environmental Protection Agency
("USEPA") added a new 24-hour and a new annual National Ambient Air Quality Standard
("NAAQS") for fine particles, termed PM 2,5
.
The attainment demonstration is due April 5, 2008,
and the attainment date for most areas is April 5, 2010
. The proposed rules are a necessary part
of this attainment demonstration .
2.
On July 18, 1997, USEPA also promulgated revised primary and secondary ozone
NAAQS that increased the averaging period for the ozone standard from 1-hour to 8-hour and
lowered the concentration for violations from 0 .12 to 0.08 parts per million (ppm) . Most
nonattainment areas are required to submit attainment demonstrations by June 15, 2007,
addressing how the State will achieve the 8-hour ozone standard by the attainment date of June
15, 2009
. The Clean Air Interstate Rule ("CAIR") as proposed is a necessary part of that
attainment demonstration .
3 .
The Greater Chicago and Metro-East/St . Louis are in nonattainment of both the 8-
hour ozone NAAQS and PM2
.5 NAAQS.
4.
On May 12, 2005, USEPA promulgated the CAIR rule because it recognized that
notwithstanding the Clean Air Act requirements for achieving the NAAQS, the majority of
eastern states, including Illinois, will not be able to meet the 8-hour ozone and
PM2.5 NAAQS by
the statutory deadlines for attainment without a reduction in the interstate transport of pollution
from upwind areas . To address transport issues, USEPA promulgated the CAIR to require 28
eastern states, including Illinois and the District of Columbia, to revise their State
Implementation Plans ("SIPs") to include control measures to reduce emissions of S0
2
and NOR.
These SIPS are due on September 11, 2006 .
The CAIR
SO2,
CAIR NO, Annual and CAIR NO
x
Ozone Season Trading
Programs are cap and trade programs for affected utility units and as included in Illinois EPA's
proposal are designed to meet the CAIR requirement by reducing the amount of SO 2 and NO,
emitted from such units and to further other environmental goals of the State of Illinois .
6.
However, on April 28, 2006, USEPA promulgated the CAIR federal
implementation plan ("FIP") for all affected states that is effective June 27, 2006 . See, 71 Fed.
Reg. 25327 et seq. USEPA plans to replace the provisions of the CAIR FIP after it approves a
state's CAIR SIP . In the mean time, the provisions of the FIP stand in place of a state's
provisions . The first action of consequence that USEPA will take under the FIP will be making
NO, allocations on July 30, 2007, for the 2009 control period . Such allocations will be recorded
on September 30, 2007 . Similarly, USEPA will make NO, allocations for 2010 on July 30,
2008, that will be recorded on September 30, 2008 . On July 30, 2009, it will make allocations
for control periods 2011 through 2013 . If state-determined NO, allocations are approved earlier
than these recordation deadlines, USEPA will use the state-determined allocations . 1d. at 25352.
It is important to note that USEPA's allocation methodology is substantially different from the
one that is proposed by Illinois EPA .
7.
As discussed in the Illinois EPA's
Statement of Reasons, the most important
element of Illinois EPA's proposal is its allocation methodology that provides incentives for
energy efficiency, installation of air pollution controls, and development of renewable energy
resources. USEPA's allocation methodology does not necessarily promote these State goals .
8.
Accordingly, if this proposed rulemaking is not promulgated by April 2007,
Illinois will lose the ability to control the allocation for 2009 and to promote greater energy
efficiency and renewable energy goals, which will in turn create administrative confusion for
both the affected units and Illinois EPA .
9.
For the reasons stated above, and due to the impending date of April 2007 for
Illinois to submit NO, allocations and attainment demonstrations, the proposed regulations need
to be adopted in an expedited manner . Further, if Illinois does not submit attainment
demonstrations by the applicable deadlines, USEPA could start a FIP sanctions clock
.
10.
In light of the foregoing, it is necessary to expedite review in this matter .
11 .
Therefore, Illinois EPA requests that the Illinois Pollution Control Board
("Board") proceed to First Notice under the Illinois Administrative Procedure Act, 5 ILCS
100/1-1 et seq ., without reaching a decision on this merits, by accepting the regulatory language
proposed by the Illinois EPA in this rulemaking proposal for purposes of First Notice
.
12 .
Illinois EPA also requests that the requisite public hearings be scheduled as soon
as possible in accordance with Section 28(a) of the Environmental Protection Act, 415 ILCS
5/28(a).
13 .
Illinois EPA posits that the information necessary for the Board to proceed to
First Notice in this rulemaking and to schedule a public hearing is contained in the Statement of
Reasons. If more information is needed, Illinois EPA will fully cooperate to expeditiously
provide the same to the Board and its Hearing Officer .
14.
As required by 35 Ill . Adm
. Code 101 .512, this Motion is accompanied by an
Affirmation attesting that the facts cited herein are true .
WHEREFORE, for the reasons set forth above, Illinois EPA respectfully requests
that the Board grant its Motion and expedite review in this matter .
DATED : May 22, 2006
1021 N. Grand Ave ., East
P
.O
. Box 19276
Springfield, Illinois 62794-9276
217.782.5544
217.782.9143 (TDD)
Respectfully submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:
Rachel L . Doctors
Assistant Counsel
Division of Legal Counsel
IN THE MATTER OF :
)
PROPOSED NEW CAIR SO 2, CAIR NO,,
)
ANNUAL AND CAIR NOx OZONE SEASON) R06-
TRADING PROGRAMS, 35 ILL. ADM.
) (Rulemaking- Air)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES, )
SUBPARTS A, C, D and E
)
AFFIRMATION
I, Rachel L . Doctors, under other, hereby state and affirm that I am an Assistant Counsel
for Illinois EPA and the facts cited in the foregoing Motion for Expedited Review are true and
correct to the best of my information and belief .
Notary Public
OFFICIAL SEAL
oo.•:
ay
:
; NOTARYBRENDA
PUBLIC,
BOENNER
STATE OF IWNOIS
t
? MY
COMMISSION
EXPIRES Il3-2009
Rachel L
. Doctors
Assistant Counsel
Division of Legal Counsel
SUBSCRIBED AND SWORN TO BEFORE ME
This day of m6..))
'
2006
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
)
PROPOSED NEW CAIR 502, CAM NOx
)
ANNUAL AND CAIR NOx OZONE SEASON)
R06-
TRADING PROGRAMS, 35 ILL . ADM .
) (Rulemaking- Air)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES, )
SUBPARTS A, C, D and E
)
MOTION TO HOLD REQUIRED HEARINGS
IN SPRINGFIELD AND COLLINSVILLE
NOW COMES the Proponent, the ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY (Illinois EPA), by its attorney, Rachel L
. Doctors, and pursuant to 35 Ill . Adm. Code
101 .500 and 102 .402, moves that the Illinois Pollution Control Board (Board) hold the first
required hearing under this rulemaking proposal in Springfield, Illinois and the second required
hearing in Collinsville, Illinois
. In support of its Motion, Illinois EPA respectfully states as
follows
:
I .
Section 102
.412(a) of the Board's procedural rules states, in pertinent part, "in
case of state-wide regulations, hearings shall be held in at least two areas of the State
." 35 Ill .
Adm. Code 102 .412 (a) .
2 .
The proposed regulations are expected to affect existing and new electric
generating units all across the state, with affected sources in Chicago, central Illinois and
southern Illinois
. There are approximately 229 existing electric generating units that will be
subject to the CAIR NOx Annual trading, CAIR SO2 trading, and the CAIR NO, Ozone Season
trading programs
. As the City of Springfield is not only an affected area of the State, but is
centrally located for all the affected areas of the State, the City of Springfield is an appropriate
first hearing location pursuant to Section 102
.412 (a) of the Board's procedural rules .
RECEIVEDCLERK'S
OFFICE
MAY 3
0 2006
Pollution OCont
of Board
3 .
Section 102 .428 (c) of the Board's procedural rules describes the format of
hearings, stating in pertinent part, "Proponents must present testimony in support of the proposal
first."
35 Ill . Adm . Code 102 .428 (c). This being the case the Illinois EPA must present
testimony supporting the proposal at the first hearing
. In order to conserve scarce State
resources, the Illinois EPA moves that the first hearing be held in Springfield .
4.
In addition to the facts cited above, State administrative and financial constraints
favor a Springfield forum for the first hearing. While the Board and the Illinois EPA both
maintain offices in Springfield, a large number of Illinois EPA's technical staff located in
Springfield will be testifying and providing technical assistance in this rulemaking proposal . At
this juncture, Illinois EPA estimates that the attendance of approximately 10 to 12 employees
will be required at these hearings
. Given the number of Illinois EPA's technical staff, in addition
to the legal and administrative support staff, that will be attending the hearings, expenses to the
State of Illinois due to transportation, food, and lodging for a non-Springfield forum will be
considerable
. The potential expenses to the State will be even more onerous in any protracted
hearing. Thus, holding at least one of the required hearings in Springfield will allow for the
Board and Illinois EPA to conserve administrative resources
.
5 .
Further, many of the Illinois EPA staff that will be involved in the hearings for
this rulemaking proposal will also be involved in the Illinois EPA's recently filed rulemaking
proposal concerning mercury emissions . See, In the Matter of: Proposed New 35 Ill . Adm. Code
225, Control of Emissions from Large Combustion Sources, R06-25 . The potential for even
some of those personnel to be forced to choose between participating in one hearing at the
expense of missing another would impose a severe hardship upon the Illinois EPA in presenting
and defending the merits of its proposals . If at least one hearing in this rulemaking proposal
2
were held in Springfield, then those Illinois EPA personnel involved in both rulemakings would
at least be in a better position to participate to the fullest extent possible
.
6.
With respect to the second hearing, Illinois EPA requests that it be held in
Collinsville, Illinois
. As the City of Collinsville is located with respect to affected units in the
Southern portion of the State, it is an appropriate location for a second hearing location pursuant
to Section 102
.412 (a) of the Board's procedural rules .
7 .
In addition to the facts cited above, State administrative and financial constraints
favor a Collinsville forum for the second hearing
. As stated above, the Board and the Illinois
EPA both maintain offices in Springfield and a Collinsville location represents a reasonable
commute from the Board's and the Illinois EPA's Springfield offices . At this juncture, Illinois
EPA estimates that the attendance of approximately 10 to 12 employees will be required at these
hearings
. Given the number of Illinois EPA's technical staff, in addition to the legal and
administrative support staff, that will be attending the hearings, expenses to the State of Illinois
due to transportation, food, and lodging for a non-Springfield forum will be considerable
.
Holding the second hearing in Collinsville will allow for the Board and Illinois EPA to conserve
administrative resources.
8 .
Illinois EPA held public outreach meetings in Springfield for six consecutive
Tuesdays beginning in January 2006
. Numerous industry and environmental organization
representatives participated in these meetings and expressed significant interest in this
rulemaking proposal .
9 .
Illinois EPA recognizes and appreciates the Board's concern that members of the
affected sources and the public have every opportunity to participate in Board hearings
. Illinois
EPA agrees that all practicable efforts to allow for such input should be made
. The Cities of
3
Springfield and Collinsville would provide diversely located forums for input from the public
throughout the State .
WHEREFORE, for the reasons set forth above, the Illinois EPA respectfully requests that
the Board hold the first hearing under this rulemaking proposal in Springfield and the second in
Collinsville .
Respectfully submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENC
By:
DATED: May 22, 2006
1021 N. Grand Ave ., East
P .O. Box 19276
Springfield, Illinois 62794-9276
217.782.5544
217.782 .9143 (TDD)
4
Rachel L . Doctors
Assistant Counsel
Division of Legal Counsel
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
)
PROPOSED NEW CAIR S02, CAIR NOx
)
ANNUAL AND CAIR NOx OZONE SEASON)
R06-
TRADING PROGRAMS, 35 ILL . ADM .
) (Rulemaking- Air)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES, )
SUBPARTS A, C, D and E
)
RECEIVED
CLERK'S
MAY 3 0 2006
Pollution
STATE OF
Control
ILLINOIS
Board
MOTION FOR WAIVER OF REQUIREMENTS
NOW COMES Proponent, the ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY (Illinois EPA), by its attorney, Rachel L . Doctors, and pursuant to 35 Ill
. Adm. Code
and 101
.500, 102 .110, 102 .402, moves that the Illinois Pollution Control Board (Board) waive
certain requirements, namely that Illinois EPA submit an entire copy of the regulatory proposal
to the Attorney General, that Illinois EPA submit an entire copy of the regulatory proposal to the
Department of Natural Resources (DNR), and that Illinois EPA submit to the Board the original
and nine copies of the regulatory proposal including the incorporations by reference and all
documents relied upon
. In support of its Motion, Illinois EPA states as follows :
1 .
Section 102
.200 of the Board's procedural rules requires that the original and nine
copies of each regulatory proposal be filed with the Clerk
. This entire regulatory proposal will
likely consist of over 2,000 pages
. Given the length of the proposal and the resources required to
provide nine copies, Illinois EPA requests that it be allowed to file the original and four complete
copies of the proposal plus five partial copies, the partial copies consisting of Table of Contents,
Statement of Reasons, pleadings, and the proposed rules absent documents relied upon and
incorporations by reference .
2 .
Section 102 .200 of the Board's procedural rules also requires that a regulatory
proposal be served on the Attorney General
. On March 28, 2006, Mr . Matthew Dunn, Chief of
the Environmental Control Division of the Attorney General's Office (AGO) in Chicago,
informed Illinois EPA that Illinois EPA need not supply the AGO with a copy of the entire
proposal, and that a partial copy of the submittal would suffice .
3 .
Section 102
.200 requires that a regulatory proposal be served on the DNR
. On
March 20, 2006, Ms . Virginia Wang, Deputy Counsel of the DNR in Springfield, informed
Illinois EPA that Illinois EPA need not supply DNR with a copy of the entire proposal, and that a
partial copy of the submittal would suffice
.
4.
Section 5-75(a) of the Illinois Administrative Procedure Act (IAPA) provides in
relevant part that an agency may incorporate by reference the regulations, standards and
guidelines of an agency of the United States or a nationally recognized organization or
association without publishing the incorporated material in full
. 5 ILCS 100/5-75(a) . Further,
Section 5-75(b) of the IAPA provides in relevant part that the agency adopting a rule or
regulation under the IAPA shall maintain a copy of the referenced rule, regulation, standard or
guideline in at least one of its principal offices and shall make it available to the public upon
request. 5 ILCS 100/5-75(b) . In developing this proposed rulemaking, Illinois EPA has
incorporated by reference certain documents . The documents incorporated by reference are
readily accessible to, or are already within the possession of, the Board . Given this ease of
accessibility, and the lengthy nature of the documents, Illinois EPA requests that the Board
waive the normal copy requirements of Section 102
.200 of the Board's procedural rues and
allow Illinois EPA to not file any copies of the items listed below, except for document
(f).
Since, document (f) may not be readily accessible but is rather lengthy, Illinois EPA requests that
it be allowed to file an original and 4 copies of the said document . The documents incorporated
2
by reference are as follows :
a)
CAIR SO2
Trading Program, 40 CFR 96, subpart AAA (CAIR S0
2
96Trading
.206)
;
Program
40 CFR
General
96, subpart
Provisions,
BBB (CAIR
excluding
Designated
40 CFR
Representative
§§ 96
.204,
forand
CAIR SO2 Sources)
; 40 CFR 96, subpart FFF (CAIR SO2 Allowance
Tracking System)
; 40 CFR 96, subpart GGG (CAIR SO
2 Allowance
Transfers)
; and 40 CFR 96, subpart HHH (Monitoring and Reporting
.
b)
CAIR NOx Annual Trading Program, 40 CFR 96, subpart AA (NO
x
Annual Trading Program General Provisions, excluding 40 CFR §§
96.104, 96
.105(b)(2), and 96 .106)
; 40 CFR 96, subpart BB (CAIR
Designated Representative for CAIR NO x Sources)
; 40 CFR 96, subpart
FF (CAIR NOx Allowance Tracking System)
; 40 CFR 96, subpart GG
(CAIR NOx Allowance Transfers)
; and 40 CFR 96, subpart HH
(Monitoring and Reporting) .
c)
CAIR NOx
Ozone Season Trading Program 40 CFR 96, subpart AAAA
(CAIR NOx
Ozone Season Trading Program General Provisions)
(excluding 40 CFR §§ 96.304, 96
.305(b)(2), and 96 .306)
; 40 CFR 96,
subpart BBBB (CAIR Designated Representative for CAIR NOx Ozone
Season
Allowance
Sources)Tracking
; 40
System)CFR
96,
;
subpart
40 CFR 96,
FFFF
subpart
(CAIR NOGGGG
x
Ozone
(CAIR
SeasonNOx
Ozone Season Allowance Transfers)
; and 40 CFR 96, subpart HHHH
(Monitoring and Reporting) .
d)
40 CFR 75 (2005) .
e)
40 CFR 78 (2005) .
I)
Federal Energy Management Program,
M&V Measurement and
Verification for Federal Energy Projects, U
.S. Department of Energy,
Office of Energy Efficiency and Renewable Energy, Version 2
.2,
DOE/GO-102000-0960 (September 2000)
.
5 .
Section 27 (a) of the Environmental Protection Act (Act) requires Illinois EPA to
provide information supporting the proposal
. 415 ILCS 5/27 (a).
In doing so, the Illinois EPA
has provided documents in which were directly relied upon while drafting the regulatory
proposal
. The list of the documents that are the subject of this motion is found in Attachment A
.
Some of the items are denoted with an asterisk
. The items with an asterisk in Attachment A are
readily accessible to, or are already within the possession of, the Board
. Given the ease of
3
accessibility, and in most cases the lengthy nature of the documents, Illinois EPA requests that
the Board waive the normal copy requirements of Section 102
.200 of the Board's procedural
rules and allow Illinois EPA to not file any copies of the items denoted with an asterisk listed on
Attachment A .
6 .
The remainder of the documents listed in Attachment A are quite large in number
and length
. For that reason, Illinois EPA requests that the Board waive the normal copy
requirements and allow Illinois EPA to file an original and four copies of the remainder of the
documents listed in Attachment A .
WHEREFORE, for the reasons set forth above, Illinois EPA requests that the Board
waive the requirement that it file the entire proposal with the AGO and DNR, and waive the copy
requirement and allow Illinois EPA to provide the Board with an original and four complete
copies of the proposal, along with five partial copies as described
supra. Further, the Illinois
EPA requests that the Board allow Illinois EPA to file no copies of the documents incorporated
by reference, except for document (1) in which Illinois EPA requests the Board to allow an
original and four copies to be submitted
. Finally, Illinois EPA requests that the Board allow
Illinois EPA to file either no copies or an original and four copies of the documents relied upon
as listed in Attachment A .
4
DATED: May 22, 2006
1021 N. Grand Ave ., East
P.O . Box 19276
Springfield, Illinois 62794-9276
217.782.5544
217.782.9143 (TDD)
Respectfully submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:
5
Rachel L. Doctors
Assistant Counsel
Division of Legal Counsel
10. * Air Quality Designations and Classifications for the Fine Particles (PM2 .5)
National Ambient Air Quality Standards ; Final Rule, 70 Fed. Reg. 944 (January 5,
2005) .
11 . * Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine
Particulate Matter and Ozone (Clean Air Interstate Rule) ; Proposed Rule, 69 Fed.
Reg. 32684 (June 10, 2004) .
1
ATTACHMENT A
Documents Relied Upon
A. Documents Relied Upon -
Statement of Reasons
1 . * The Clean Air Act, as amended, 42 U
.S.C
. 7401 et seq.
2 . * The Illinois Environmental Protection Act, 415 ILCS 5/1 et seq .(2005).
3 . * National Ambient Air Quality Standards for Particulate Matter; Proposed Rule,
70 Fed. Reg. 2620 (January 17, 2006) .
4 . * Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality
Standard ; Final Rule, 70 Fed. Reg. 71612 (November 29, 2005) .
5 . * Proposed Rule to Implement the Fine Particulate National Ambient Air Quality
Standards ; Proposed Rule, 70 Fed. Reg. 65984 (November 1, 2005) .
6 . * Rulemaking on Section 126 Petition from North Carolina To Reduce Interstate
Transport of Fine Particulate Matter and Ozone ; Federal Implementation Plans to
Reduce Interstate Transport of Fine Particulate Matter and Ozone ; Revisions to
the Clean Air Interstate Rule ; Revisions to the Acid Rain Program
; Proposed
Rule, 70 Fed. Reg. 49708 (August 24, 2005) .
7 . *Identification of Ozone Areas for Which the 1-Hour Standard Has Been
Revoked and Technical Correction to Phase 1 Rule
; Final Rule, 70
Fed
. Reg.
44470 (August 3, 2005) .
8 . * Regional Haze Regulations and Guidelines for Best Available Retrofit
Technology (BART) Determinations ; Final Rule, 70 Fed. Reg. 39104 (July 6,
2005).
9 . * Finding of Failure to Submit Section 110 State Implementation Plans for
Interstate Transport for the National Ambient Air Quality Standards for 8-Hour
Ozone and PM2 .5 ; Final Rule, 70 Fed. Reg. 21147 (April 25, 2005) .
12. * Air Quality Designations and Classifications for the 8-Hour Ozone National
Ambient Air Quality Standards ; Early Action Compact Areas with Deferred
Effective Dates ; Final Rule, 69 Fed. Reg. 23858 (April 30, 2004)
.
13 . * Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality
Standard-Phase I; Final Rule, 69 Fed. Reg. 23951 (April 30, 2004) .
14 . * Interstate Ozone Transport : Response to Court Decisions on the NOx SIP Call,
NOx SIP Call Technical Amendments, and Section 126 Rules ; Final Rule, 69
Fed. Reg. 21604 (April 21, 2004).
15
. * Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone
(Interstate Air Quality Rule) ; Proposed Rule, 69 Fed. Reg. 4566 (January 30,
2004) .
16 . * Regional Haze Regulations ; Final Rule, 64 Fed. Reg. 35714 (July 1, 1999) .
17 . * Finding of Significant Contribution and Rulemaking for Certain States in the
Ozone Transport Assessment Group Region for Purposes of Reducing Regional
Transport of Ozone : Final Rule, 63 Fed. Reg. 57356 (October 27, 1998)
18 . * National Ambient Air Quality Standards for Particulate Matter ; Final Rule, 62
Fed. Reg. 38652 (July 18, 1997) .
19. * National Ambient Air Quality Standards for Ozone ; Final Rule, 62 Fed. Reg.
38856 (July 18, 1997) .
20. * Michigan v. EPA, 213 F.3d 663 (D .C . Cir. 2000) .
21 . * U.S. Bank National Association v . Clark, 217 I11.2d 334, 837 N .E.2d 74 (2005) .
22. * Spina v. Toyota Motor Credit Corporation, 301 I11.App.3d 364, 703 N .E.2d 484
(1 51 Dist. 1998).
23. * In re Marriage ofLasky,
176 I11.2d 75, 678 N .E.2d 1035 (1997) .
24. * Hodel v. Virginia Surface Mining and Reclamation Association,
452 U.S
. 264
(1981) .
25 . * Virginia v. Browner,
80 F
.3d 869 (4th
Cir. 1996).
26 .
* New York v. United States, 505 U.S. 144 (1992) .
2
B.
Documents Relied Upon-Technical Support Document
1 . * National Ambient Air Quality Standards for Ozone ; Final Rule, 62 Fed. Reg.
38856 (July 18, 1997) .
2 . * National Ambient Air Quality Standards for Particulate Matter ; Final Rule, 62
Fed. Reg. 38652 (July 18, 1997) .
3 . * Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone
(Clean Air Interstate Rule) ; Revisions to Acid Rain Program ; Revisions to the
NOx SIP Call ; Final Rule, 70 Fed. Reg. 25162 (May 12, 2005) . (Exhibit A to the
Statement of Reasons) .
4
. * The Clean Air Act, as amended, 42 U .S.C. 7401 et seq .
5 . * Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone
(Interstate Air Quality Rule) ; Proposed Rule, 69 Fed
. Reg. 4566 (January 30,
2004).
6 . * Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine
Particulate Matter and Ozone (Clean Air Interstate Rule) ; Proposed Rule, 69 Fed.
Reg. 32684 (June 10, 2004).
7
. * Regional Haze Regulations and Guidelines for Best Available Retrofit
Technology (BART) Determinations ; Final Rule,
70 Fed. Reg. 39104 (July 6,
2005).
8. Control Techniques for Stdfur Oxide Emissions from Stationary Sources, EPA-
450/3-81-004, U.S
. Environmental Protection Agency-Office of Air and
Radiation, April 1981 .
9. Alternative Control Techniques Document--NOx Emissions from Utility Boilers,
EPA-453/R-94-023, U. S . Environmental Protection Agency-Office of Air
Quality Planning and Standards, Research Triangle Park, N . C. 27711, March
1994.
10. Alternative Control Techniques Document--NOx Emissions from Stationary Gas
Turbines, EPA-453/R-93-007, U . S. Environmental Protection Agency-Office of
Air Quality Planning and Standards, Research Triangle Park, N . C . 27711,
January 1993 .
11 . Controlling Nitrogen Oxides Under the Clean Air Act : A Menu of Options, State
and Territorial Air Pollution Program Administrators/ Association of Air
Pollution Control Officials, July 1994 .
3
12 . The Mega Symposium SO
2
Control Technologies and Continuous Emission
Monitors,
Electric Power Research Institute, EPRI-DOE-EPA Combined Utility
Air Pollutant Control Symposium, TR-108683-V2, August 1997
.
13
. Regulatory Impact Analysis for the Final Clean Air Interstate Rule, EPA-452/R-
05-002, U. S
. Environmental Protection Agency-Office of Air and Radiation,
March 2005 .
14.
Annual Energy Outlook 2004 with Projections to 2025,
DOE/EIA-0383, U .S.
Department of Energy, Energy Information Administration, January 2004
.
15
. Technical Support Document for the Clean Air Interstate Rule Notice of Final
Rulemaking
; Regional and State S0
2
and NOx Emissions Budgets, U
.S.
Environmental Protection Agency- Office of Air and Radiation, March 2005 .
16. Output Based Regulations
: A Handbook of Air Regulators, U .S. Environmental
Protection Agency, Office of Atmospheric Programs, August 2004
.
17 .
Illinois Sustainable Energy Plan, Office of Governor Rod R
. Blagoj evich,
Submitted to the Illinois Commerce Commission, February 11, 2005 .
18.
Federal Energy Management Program, M&V Measurement and Verification for
Federal Energy Projects, U
.S . Department of Energy, Office of Energy
Efficiency and Renewable Energy, Version 2
.2, DOE/GO-102000-0960,
September 2000.
19
. Incorporating Renewables Under CAIR, Presentation to American Wind Energy
Association Seminar, Massachusetts Department of Environmental Protection,
January 12, 2006.
20 . U.S . Department of Energy, Energy Efficiency and Renewable Energy, Illinois
Wind Maps . http ://www.awea.org/projects/illinois
.html
21
. Wind Project Data Base, American Wind Energy Association .
http://www.awea.org/projects/illinois
.html
22 . U.S
. Hydropower Resources Assessment for Illinois, Prepared for the U .S .
Department of Energy Assistant Secretary for Energy Efficiency and Renewable
Energy by Idaho National Engineering Laboratory Renewable Energy Products
Department, Lockheed Martin Idaho Technologies Company, January 1997 .
23
. Landfill Methane Outreach Program, Landfill Project Database, U .S .
Environmental Protection Agency .
http://www .epa.gov/lmop/proj/xls/candlfslmopdata.xls
24
. State Electricity Profiles 2002, Department of Energy-Energy Information
4
Administration .
25 . Guidance on State Implementation Plan (SIP) Credits for Emission Reductions
From Electric-Sector Energy Efficiency and Renewable Energy Efficiency and
Renewable Energy Measures, U
.S . Environmental Protection Agency, Office of
Air and Radiation, August 2004 .
26 . Job Jolt
: The Economic Impacts ofRepowering the Midwest, the Clean Energy
Development Plan for the Heartland,
An Economic Study by the Regional
Economics Applications Laboratory for the Environmental Law and Policy
Center, February 2001 .
27
. Wind Energy for Rural Economic Development, WINDPOWER 2005, National
Renewable Energy .
28. Landfill Methane Outreach Program (LMOP), U
.S. Environmental Protection
Agency.
http://www.epa.gov/lniop/proj/index.htm
and
http://www.epa.gov/lmopfbenefits
.html
29. "Coal Mining Poised to Make Comeback in Illinois," State Journal Register,
March 20, 2006 .
30. Email from Conrad Anderson, Madison Power Corporation to Roston Cooper,
Illinois EPA, Permit Section, dated March 20, 2006 .
31 . Growing Green Power in Illinois, Conscious Choice, August 2001
.
http ://www.consciouschoice .com/2001 /cc
1408/growinggreenpowerl408 .html
32
. Developing and Updating Output Based NO x Budget Trading Program Under the
NOx SIP Call, U.S
. Environmental Protection Agency, May 8, 2000 .
33 . Analysis of Illinois NO
x Budget Reductions, ICF Resources, LLC, March 25,
2006.
34
. Average Daily Solar Radiation Per Month, National Renewable Energy
Laboratory Resource Assessment Program .
35 . The Chicago Solar Partnership, table generated from the data contained at
http://www.chicagosolarpartnership
.com
36. Illinois Coal Properties in Regard to Mercury, Abadi, Rostom, ICCI Mercury
Meeting, Chicago, IL, November 9, 2005 .
37. Technical Support Document for Final Clean Air Interstate Rule- Air Quality
Modeling, U.S. Environmental Protection Agency- Office of Air and Radiation,
March 2005 .
5
38 . Attainment Strategy Options-DRAFT, LADCO, October 28, 2005 .
39 . Annual Energy Outlook 2006 with Projections to 2030, DOE/EIA-0383 (2006),
U
.S
. Department of Energy, Energy Information Administration, February 2006
.
6
e
1021 NORTH GRAND AVENUE EAST, P .O . Box 19276, SPRINGFIELD, ILLINOIS 62794-9276 - (
217) 782-3397
JAMES R . THOMPSON CENTER, 100 WEST RANDOLPH, SUITE 11-300, CHICAGO, IL 60601
-
(312) 814-6026
ROD R . BLAGOJEVICH, GOVERNOR
DOUGLAS P . SCOTT, DIRECTOR
217/782-5544
March 28, 2006
Mr. Matthew Dunn
Office of Attorney General
188 W . Randolph St., 20t° Floor
Chicago, IL 60601
Dear Mr. Dunn :
This letter is to confirm our telephone conversation on March 28, 2006, in which we discussed the Clean
Air Interstate Rulemaking pertaining to Nitrogen Oxide and Sulfur Dioxide Trading Programs for Electric
Generating Units that the Illinois EPA will be filing with the Pollution Control Board .
In our conversation, you agreed that the Illinois EPA need not serve the Office of Attorney General as
required by the Act . The Agency will send you copies of the proposed new regulation and the Statement
of Reasons of the submittal at the time it is filed with the Board . The Agency currently anticipates filing
the regulatory proposal April 4, 2006
. Further, the Agency will provide the Office of Attorney General
with whatever other information or documents you feel you need after you have reviewed the proposed
amendments and Statement of Reasons .
We sincerely appreciate your cooperation in this matter
. If you have any questions, please do not hesitate
to call .
Sincerely,
KOM
hannon Bilbruck
Legal Investigator
Division of Legal Counsel
ROCKFORD-4302 North Main Street, Rockford, IL 61103-(815) 987-7760
DES PLAINES-9511 W . Harrison St, Des Plaines, IL 60016-(847) 294-4000
ELGIN -595 South State, Elgin, IL 60123 -(847) 608-3131
PEORIA - 5415 N . University St ., Peoria, IL 61614- (309) 693-5463
BUREAU or LAND -
PEORIA -
7620 N . University St ., Peoria, IL 61614- (309) 693-5462 • CHAMPAIGN-2125 South First Street, Champaign, IL 61820- (217) 278-5800
SPRINGFIELD-45005 . Sixth Street Rd ., Springfield, IL 62706 - (217) 786-6892
•
COLLINSVILLE- 2009 Mall Street, Collinsville, IL 62234 -(618) 346-5120
MARION-2309 W . Main St ., Suite 116, Marion, IL 62959 -(618) 993-7200
PRINTED ON RECYCLED PAPER
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
C
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
1021 NORTH GRAND AVENUE EAST, P .O . Box 19276, SPRINGFIELD, ILLINOIS 62794-9276-( 217) 782-3397
JAMES R . THOMPSON CENTER, 100 WEST RANDOLPH, SUITE 11-300, CHICAGO, IL 60601 - (312) 814-6026
ROD R . BLAGOJEVICH, GOVERNOR
DOUGLAS P . SCOTT, DIRECTOR
217/782-5544
March 20, 2006
Ms. Virginia Yang
Illinois Department of Natural Resources
One Resource Way
Springfield, Illinois 62702
Dear Ms. Yang :
This letter is to confirm our telephone conversation on March 20, 2006, in which we discussed the Clean
Air Interstate Rulemaking pertaining to Nitrogen Oxide and Sulfur Dioxide Trading Programs for Electric
Generating Units that the Illinois EPA will be filing with the Pollution Control Board
.
In our conversation, you agreed that the Illinois EPA need not serve the Department of Natural Resources
as required by the Act . The Agency will send you copies of the proposed new regulation and the
Statement of Reasons of the submittal at the time it is filed with the Board
. The Agency currently
anticipates filing the regulatory proposal April 4, 2006
. Further, the Agency will provide the Department
of Natural Resources with whatever other information or documents you feel you need after you have
reviewed the proposed amendments and Statement of Reasons .
We sincerely appreciate your cooperation in this matter
. If you have any questions, please do not hesitate
to call.
Sincerely,
annon Bilbruck
Legal Investigator
Division of Legal Counsel
ROCKFORD-4302 North Main Street, Rockford, IL 61103-(815) 987-7760
DES PLAINES-9511 W
. Harrison St ., Des Plaines, IL 60016-(847) 294-4000
ELGIN-595 South State, Elgin, IL 60123-(847) 608-3131
• PEORIA-5415 N . University St., Peoria, IL 61614-(309) 693-5463
BUREAU OF LAND-PEORIA-7620 N . University St ., Peoria, IL 61614-(309) 693-5462 • CHAMPAIGN-2125 South First Street, Champaign, IL 61820-(217) 278-5800
SPRINGFIELD-45005
. Sixth Street Rd
., Springfield, IL 62706-(217) 786-6892
• COLLINSVILLE-2009 Mall Street, Collinsville, IL 62234-(618) 346-5120
MARION-2309 W . Main St ., Suite 116, Marion, IL 62959 -(618) 993-7200
PRINTED ON RECYCLED PAPER
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
REp
e,
IN THE MATTER OF :
)
PROPOSED NEW CAIR S02 , CAIR NOx
MAY 3 0 2006
) R06-
STATE OF IL
TR
O'S
ANNUAL, CAIR NO, OZONE SEASON
ADING PROGRAMS, 35 LL
. ADM.
(Rulemaking- Air)
Pollution Control Board
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION,
)
SOURCES, SUBPARTS A, C, D and E
)
STATEMENT OF REASONS
I. INTRODUCTION
The Illinois Environmental Protection Agency (Illinois EPA or Agency) submits this
Statement of Reasons to the Illinois Pollution Control Board (Board) pursuant to Sections 10, 27,
and 28 of the Environmental Protection Act (415 ILCS 5/10, 27, and 28) (Act) and 35 Ill . Adm.
Code 102 .202(b) in support of the proposed new Part 225, Subparts A, C, D and E to the Board's
air pollution control regulations (35 111 . Adm . Code 225) (Part 225) . The purpose of this
proposal is to reduce intra- and interstate transport of sulfur dioxide (SO 2) and nitrogen oxides
(NO.)
emissions from fossil fuel-fired electric generating units (affected units), on an annual
basis (January 1 though December 31) and on an ozone season basis (May I through September
30) of each calendar year, through the adoption of the Clean Air Interstate Rule (CAIR) SO 2
trading program, the CAIR NO . Annual trading program and the CAIR NO, Ozone Season
trading program that establish specific allocations for NO, and retirement ratios for SO2
allowances established under the CAIR .
This proposal is intended to satisfy Illinois' obligations under USEPA's Rule to Reduce
Interstate Transport of Fine Particulate Matter and Ozone ; Revisions to Acid Rain Program ;
Revisions to the NO,, SIP Call, (CAIR), 70 Fed. Reg. 25162 (May 12, 2005) . See, Exhibit A .
The proposed new part also is intended to address, in part, Illinois EPA's obligation to meet
certain requirements under the federal Clean Air Act, 42 U
.S .C. § 7401 et seq .
(CAA) . These
requirements include Part D, Subpart I of the CAA, adoption of control strategies necessary to
demonstrate attainment of the fine particulate matter (PM
2 .5) and 8-hour ozone National Ambient
Air Quality Standards (NAAQS) in the greater Chicago moderate nonattainment area and the
Metro East/St
. Louis moderate nonattainment area
; Part D, Subpart 2 of the CAA, adoption of
control strategies necessary to demonstrate attainment of 8-hour ozone NAAQS for the greater
Chicago nonattainment area and Metro East/St
. Louis nonattainment area
; Section 169A, the
adoption an implementation plan addressing visibility
; and Section 110(a)(2)(D) of the CAA,
adoption of a State Implementation Plan (SIP) addressing interstate transport of air pollution
.
II. BACKGROUND
A. 8-Hour Ozone NAAQS
On July 18, 1997, USEPA promulgated revised primary and secondary ozone NAAQS
that increased the averaging period for the ozone standard from 1-hour to 8-hour and lowered the
concentration for violations from 0
.12 to 0
.08 parts per million (ppm).'
The revised 8-hour
ozone standards are more protective of public health and the environment and more stringent
than the pre-existing 1-hour ozone standards .
See, Exhibit A at 25169
. USEPA published the 8-
hour ozone attainment and nonattainment designations on April 30, 2004
.
See, 69 Fed
. Reg
.
23858 (April 30, 2004)
. All areas that were violating the 1-hour ozone NAAQS at the time of
the 8-hour designations were also designated as nonattainment areas for the 8-hour ozone
NAAQS
. Specifically, Illinois has two areas (greater Chicago and Metro East/St
. Louis)
concentration
'
The newly revised
may not
standard
exceed
is
0the
.08
3-year
ppm . See,average
62 Fedof
the
. Regfourth
.
38856
highest(July
18,
daily
1997)maximum
.
8-hour average ozone
2
consisting of 12 counties or partial counties that were designated as not attaining the 8-hour
ozone standard .' The designations were effective on June 15, 2004 . Id. at 23898 . USEPA's
final rule implementing the 8-hour ozone standard also revoked the I-hour standard on June 15,
2005 . See, 69 Fed. Reg. 23951 (April 30, 2004) .
Section 181 of the CAA sets forth a system that classifies ozone nonattainment areas as
"marginal," "moderate," "serious," or "extreme" areas .' See, 42 U.S .C. § 751 Ia
. For each
classification (e.g., a moderate ozone nonattainment area), the CAA specifies the attainment
deadline for ozone NAAQS and the control programs that the states must adopt to help attain the
NAAQS by reducing precursor emissions in the formation of ozone, that is NO R , and volatile
organic material (VOM). See, 42 U.S .C. §§ 7511 and 751 la
. The specified control measures
must be included in the state's SIP .
Illinois currently has two areas designated as moderate nonattainment areas for the 8-hour
ozone standard . The moderate nonattainment areas are required to submit attainment
demonstrations by June 15, 2007, addressing how the State will achieve the 8-hour ozone
standard by the attainment date, June 15, 2009 ; which is within six years of the effective date of
the nonattainment designations . The attainment demonstrations will revise the State's SIP for
ozone.
'
The two areas (greater Chicago and Metro East/St . Louis) were designated as moderate nonattainment
. The greater
Chicago nonattainment area, for purposes of the 8-hour ozone standard, consists of the following counties and
partial counties
: Cook County, DuPage County, Grundy County (partial- Aux Sable and Goose Lake townships),
Kane County, Kendall County (partial- Oswego Township), Lake County, McHenry County and Will County
. The
Metro East/St
. Louis nonattainment area for purposes of the 8-hour ozone standard, consists of the following
counties : Jersey County, Madison County, Monroe County, St
. Clair County, and Randolph Township in Randolph
County. See, 40 CFR § 81 .314 .
'The classifications are based on the "design value" for a nonattainment area
. The design value is a measure of the
severity of the ozone concentrations in an area based on the monitored values from all ozone monitors in the area
.
For each monitor in an area, the fourth highest value over a three-year period is determined . The values for all
monitors in the area are then compared and the highest of these values becomes the design value for the area .
3
B. PM2 .5 NAAQS
On July 18, 1997, USEPA also added a new 24-hour and a new annual NAAQS for fine
particles, using as the indicator particles with aerodynamic diameters smaller than a nominal 2
.5
micrometers,' termed PM2 5. See, 62 Fed. Reg. 38652. USEPA established health- and welfare-
based (primary and secondary) annual and 24-hour standards for PM 2 5 .5
USEPA published the
PM2 .5 attainment and nonattainment designations on January 5, 2005 . See, 70 Fed. Reg.
944
(January 5, 2005) . USEPA designated two areas (greater Chicago and Metro East/St . Louis)
consisting of 12 counties or partial counties within Illinois as not attaining the PM2
.5 standard.'
Id. at 968
. The designations became effective on April 5, 2005 . The attainment demonstration is
due April 5, 2008, and the attainment date for most areas is April 5, 2010, based on air quality
data from 2007 through 2009 . States may be granted up to a five-year extension of the
attainment date with a demonstration showing that it is impractical to attain within 5 years . See,
70 Fed. Reg. 65984, 66003 (November 1, 2005) .
C. Clean Air Act Requirements
The CAA establishes a comprehensive program for controlling and improving the
nation's air quality through both state and federal regulation . Under Sections 108 and 109 of the
CAA, USEPA is charged with identifying air pollutants that endanger the public health and
On January 17, 2006, USEPA proposed to amend the NAAQS for PM 25 . See, 71 Fed . Reg
. 2620
.
5
The annual standards are 15 micrograms per cubic meter, based on the 3-year average of annual mean PM2
.5
concentrations
. The 24-hour standard is a level of 65 micrograms per cubic meter, based on the 3-year average of
the annual 98" percentile of 24-hour concentrations
. The annual standard is the more restrictive standard .
6 USEPA listed the areas of greater Chicago and Metro East /St
. Louis as areas that did not attain the PM2 .5
standard . The Chicago nonattainment area, for purposes of the PM2
.5 standard, consists of the following
counties/partial counties : Cook County, DuPage County, Grundy County (partial- Aux Sable and Goose Lake
Townships), Kane County, Kendall County (partial- Oswego Township), Lake County, McHenry County and Will
County . The St . Louis/Metro East nonattainment area, for purposes of the PM2 .5 standard, consists of the following
counties/partial counties : Madison County, Monroe County, Randolph County (partial- Baldwin Township) and St .
Clair County . Se 40 CFR § 81 .314 .
4
welfare, and with formulating the NAAQS that specify the maximum permissible concentrations
of those pollutants in the ambient air . See, 42 U .S.C . §§ 7408-7409
. USEPA has promulgated
NAAQS for various pollutants, including 8-hour ozone and PM 2 .5. See, 40 CFR 50. Pursuant to
Section 107(a) of the CAA, states are given primary responsibility for ensuring that the ambient
air quality meets the NAAQS for the identified pollutants . See,
42 U.S
.C
. § 7407(a) .
Pursuant to Section 110(a) of the CAA, a state must submit a SIP for each pollutant that
specifies emission limitations applicable to sources of pollution and other measures necessary for
the attainment, maintenance and enforcement of the NAAQS, as well as address visibility and
interstate transport
. See, 42 U.S
.C
. § 7410(a). Regardless of an area's classification, within
three years after a NAAQS is promulgated all areas are required to submit a SIP meeting the
requirements of this Section . The requirements in Subpart D, Subpart 1 (Sections 171 through
179B of the CAA) contain more particular SIP requirements for nonattainment areas, including
:
1) reasonably available control measures (RACM), and reasonable available control technology
(RACT) measures
; 2) measures to assure reasonable further progress (RFP) towards attainment ;
3) emissions inventory of sources in the nonattainment area
; 4) enforceable emissions limits for
stationary sources ; 5) new source review (NSR) requirements
; and 6) contingency measures .
These requirements apply to Illinois' 8-hour ozone nonattainment areas and its
PM2,5
nonattainment areas
. In addition, Subpart 2 of Part D of the CAA, specifically Sections 182 and
183, provide specific provisions applicable to areas designated as nonattainment for ozone and
planning requirements that must be included in the relevant SIPS for Illinois . See,
42 U.S
.C. §§
751 la, and 751lb .
Procedurally SIPs submitted to meet the substantive requirements contained in Section
110(a) of the CAA must be adopted pursuant to public notice and opportunity for public
5
comment, and must be submitted to USEPA for approval
. This proposal, if adopted by the
Board, will comprise part of the State's attainment demonstrations for both the 8-hour ozone and
PM2.5
NAAQS for both the Metro-East/St . Louis nonattainment area and the greater Chicago
nonattainment area . Failure to submit a complete SIP or to submit a SIP that demonstrates
attainment can result in a "SIP call" pursuant to Section l 10(k)(5) of the CAA, which includes
sanctions pursuant to Section 179 of the CAA
.
D. Visibility and Regional Haze
The visibility protection program under Sections 169A, 169B and l 10(a)(2)(J)
of the
CAA is designed to protect federally designated Class I areas or "areas of great scenic
importance" from impairment due to manmade air pollution .
See, 42 U.S .C. §§ 7491, 7492, and
7410(a)(2)(J)
. The current federal program addresses visibility impairment that is attributable to
a specific source or group of sources
. USEPA, quoting the House Report, stated : "In 1977,
Congress also had a concern with visibility problems caused by pollutants that `emanate from a
variety of sources' and `regionally distributed sources
."' See, 64 Fed. Reg. 35714, 35715 (July
1, 1999)
.' Congress recognized that emissions of particulate matter, SO
2
and NO, from major
stationary sources reduce visibility .
In 1999, and as amended in 2005, USEPA promulgated regulations to establish a
comprehensive visibility protection program addressing visibility problems from regionally
distributed sources. See, 64 Fed. Reg.
35714 (July 1, 1999) and 70 Fed. Reg. 39105 (July 6,
2005)
. States are required to submit an implementation plan addressing the requirements of 40
CFR § 51
.308, including the requirement to address emissions from so-called best available
retrofit technology (BART)-eligible sources
. A BART-eligible source is a major stationary
USEPA quoting H .R. No . 294, 95" Cong
. 1" Session at 205 (1977) in 64 Fed . Reg . 35715 at ft
. No . 8 .
6
source, including a reconstructed source, from one of 26 identified major source categories
which have the potential to emit 250 tons per year or more of any air pollutant, and which were
placed into operation between August 1962 and August 1977 .
See, 64 Fed. Reg. 35714, 35737
(July 1, 1999)
. Such sources may be required to install BART . Electric generating sources are
one of the identified source categories
: "fossil fuel-fired steam electric plants of more than 250
mmBtu/hr of heat input ." See, 42 U.S.C . § 7491 .
For this source category, states may choose to require these electric generating units to
install BART or to adopt and to require units located in their state to participate in the CAIR
.
See, 70 Fed. Reg.
39104, 39106 (July 6, 2005) . In Illinois there are 21 electric generating units
located in 12 power plants that are potentially impacted by BART
. Illinois EPA has been in the
process of identifying its BART-eligible sources for several years, and adoption of the CAIR will
meet a part of Illinois' plan for addressing regional haze, as well as generally helping to meet
Illinois' visibility goals
.
E. Clean Air Interstate Rule
USEPA recognizes that notwithstanding the CAA requirements for achieving the
NAAQS as described above, the majority of eastern states will not be able to meet the 8-hour
ozone and PM2
.5 NAAQS by the statutory deadlines for attainment
. See, 69 Fed. Reg. 4566,
4579 (January 30, 2004)
. USEPA recognized that the major reason for this failure is that states
are not able to address interstate transport of pollution from upwind areas
. Interstate transport is
the process by which air pollutants move from upwind areas to downwind areas
.
To address transport issues, USEPA promulgated the CAIR to require 28 eastern states
and the District of Columbia, identified as significantly contributing or interfering with the
7
maintenance of one or more NAAQS in one or more identified downwind areas to revise their
SIPS to include control measures to reduce emissions of SO
2
and NO,. These SIPS are due on
September 11, 2006
. Reducing upwind precursor emissions will assist the downwind PM
2, 5 and
8-hour ozone nonattainment areas in achieving the NAAQS
. Moreover, attainment will be
achieved in a more equitable, cost-effective manner than if each nonattainment area attempted to
achieve attainment by implementing local controls alone
. See, Exhibit B at 25,333 .8 Based on
air quality modeling and cost analyses, USEPA concluded that SO
2
and NO, emissions in certain
states in the eastern part of the country, through the phenomenon of air pollution transport,'
contribute significantly to downwind nonattainment, or interfere with maintenance, of the PM
2 5
and/or 8-hour ozone NAAQS
.
USEPA also determined that 25 states along with the District of Columbia must reduce
annual SO
2
and NO, emissions for the purposes of the PM
2 5 NAAQS.'° USEPA also determined
that 25 states along with the District of Columbia must reduce NO, emissions for the purposes of
the 8-hour ozone NAAQS ." US EPA estimates that the required SO
2
and NO, reductions will
bring 52 of the 79 counties that are currently designated as PM
2.5
nonattainment into attainment
by 2010, and 57 of 74 counties into attainment by 2015
. Id at 25333 . For ozone, the benefits are
"Rulemaking on Section 126 Petition from North Carolina to Reduce Interstate Transport of Fine Particulate
Matter and Ozone
; Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and
March
Ozone;
15,
Revisions
2006
. (71to
the
FedClean
. Reg.
Air
25327,
Interstate
April 28,
Rule2006)
; Revisions
. Exhibit
to the
B
.
Acid Rain Program," (hereinafter "FIP"), signed
9
The term "transport" includes the transport of both fine particles (PM2
.5) and their precursor emissions and/or
transport of both ozone and its precursor emissions
. Id. at 25333 .
10 For PM, . 5,
the States are : Alabama, Florida, Georgia
(PM,,, only), Illinois, Indiana, Iowa, Kentucky, Louisiana,
Maryland, Michigan, Minnesota (PM,
5 only), Mississippi, Missouri, New York, North Carolina, Ohio,
Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin
. On March 15, 2006,
USEPA made the final determination to include the States of Delaware and New Jersey
. Id. at 25340 .
"For 8-hour ozone, the States are
: Alabama, Arkansas (Ozone only), Connecticut (Ozone only), Delaware, Florida,
Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts (Ozone only), Michigan, Mississippi (Ozone
only), Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia,
West Virginia, and Wisconsin . See Exhibit A at 25227 .
8
less, with only three out of 40 nonattainment counties coming into attainment by 2010 and six
out of 22 nonattainment counties by 2015 . See, Technical Support Document for Control of
Sulfur Dioxide and Nitrogen Oxide Emissions from Electric Generating Units,
Illinois EPA,
AQPSTR 06-01, March 2006 (hereinafter TSD), Document Relied Upon B-37 at 50 .
The emissions reductions requirements are based on controls that USEPA has determined
to be highly cost effective . The source category that USEPA determined to be most cost-
effective to control is electric generating units, although states have the flexibility to choose the
measures to adopt to achieve the specified emissions reductions
. As discussed above, additional
reductions to address transported pollution are necessary for eastern states to attain the new
NAAQS for 8-hour ozone and PM 2 5. Under the CAIR, USEPA is requiring that states found to
be contributing to PM 2.5
transport be subject to an annual NO, limitation and SO2 limitation
under the CAIR and that states found to be contributing to ozone transport be subject to an ozone
season limitation
.
See,
Exhibit A at 25289. In the CAIR, USEPA found that Illinois was a
significant contributor for both PM2.5
and ozone, therefore Illinois is subject to annual (the CAIR
SO2
and the CAIR NO R) and seasonal (the CAIR NO, ozone season) limitations
. Illinois is also
significantly impacted by contributions of pollution from other states . USEPA has established
three emissions budgets for Illinois
: the first would cap emissions of NO, on an annual basis; the
second would cap emissions of NO, during the ozone season ; and the third would cap the
emissions of SO2 on an annual basis
. These caps are based on emission reductions from electric
generating units
. The required emissions reduction will be implemented in two phases
. Phase I
for NO, reductions will start in 2009 (covering 2009-2014) and S0
2
reductions will start in 2010
(covering 2010-2014)
. Phase II for both NO, and SO 2
reductions will start in 2015 (covering
2015 and thereafter) .
9
In lieu of complying with emissions budgets, states have the option of adopting the
federal cap and trade programs covering its electric generating units
: CAIR NO, Annual trading
program; CAIR NO, Ozone Season trading program ; and CAIR SO2 trading program. See, 40
CFR §§ 51 .123(o)(1) and (aa) and 40 CFR § 51 .124(o)(1), respectively . With respect to the
CAIR NO, trading programs, each state is given a pool of allowances equal to their NO, budgets
to distribute as they choose . With respect to the CAIR SO2 trading program, USEPA allocates
the allowances to affected electric generating units based on the allocations that the unit receives
under the federal Acid Rain program . The trading programs do not require electric generating
units to install specific control technology or meet a particular emission limit, instead, each
affected unit is required at the end of each control period to hold allowances sufficient to cover
the tons of NO, and SO2 emitted
. These allowances can be obtained either through a direct
allocation from a state (NO, allowances) or USEPA (SO 2 allowances) or through trading . It is
anticipated that affected units that can install the least costly controls will do so, and will over
control, and thereby have extra allowances to sell to other electric generating units that cannot as
cost-effectively reduce emissions.
Regardless of which option a state chooses, complying with an emissions budget for
electric generating units or adopting the CAIR trading programs, a SIP meeting the requirements
of the CAIR is due no later than September 11, 2006 .
1 . CAIR FIP
However, on April 28, 2006,
USEPA promulgated a federal implementation plan for all
affected states that is effective June
27, 2006 . See, Exhibit B. USEPA plans to replace the
provisions of the CAIR FIP after it approves a state's CAIR SIP . In the mean time the
10
provisions of the FIP stand in place of a state's provisions
. The first action that USEPA will take
under the FIP will be making NO, allocations on July 30, 2007, for the 2009 control period
.
Such allocations will be recorded on September 30, 2007
. Similarly, USEPA will make NO,
allocations for 2010 on July 30, 2008, that will be recorded on September 30, 2008
. On July 30,
2009, NO, allocations will be made for control periods 2011 through 2013
. If state determined
NO, allocations are approved earlier than these recordation deadlines, USEPA will use the state
determined allocations . See, Exhibit B at 25352 .
As will be discussed supra,
the most important element of Illinois EPA's proposal is its
allocation methodology that provides incentives for energy efficiency, installation of air
pollution controls, and development of renewable energy resources
. USEPA's allocation
methodology does not necessarily promote these State goals
.
2. Clean
AirAct Support for the CAIR
USEPA promulgated the CAIR pursuant to the requirements of the CAA Section
I 10(a)(2)(D) . See, 42 U.S .C. § 7410(a)(2)(D)
. Section 110(a)(2)(D) of the CAA applies by its
terms to all SIPS for each pollutant covered by a NAAQS and for all areas regardless of their
attainment designation
. This Section is the central CAA provision concerning pollutant
transport
. It requires a SIP to contain adequate provisions that prohibit :
any source or other type of emissions activity within the State from emitting any air
pollutant in amounts which will . .
.contribute significantly to nonattainment in or,
interfere with maintenance by, any other State with respect to any
. . .
national primary or
secondary ambient air quality standard . . .
42 U.S.C. § 7410(a)(2)(D)
. In the CAIR, USEPA has interpreted Section 110(a)(2)(D) of the
CAA to require that certain states reduce emissions by specified amounts, and has determined
those amounts based on the availability of highly cost effective controls for identified source
it
categories . USEPA interpreted this same provision, and developed a detailed methodology for
applying it in the so-called NO, SIP Call rulemaking, which concerned interstate transport of
NO, as an ozone precursor. USEPA developed the CAIR relying heavily on the NO, SIP Call
approach ."
In the NO, SIP Call, USEPA interpreted Section 110(a)(2)(D) of the CAA to authorize
the Administrator of USEPA to determine the amount of emissions in upwind states that
"contribute significantly" to downwind nonattainment or "interfere with" downwind
maintenance, and require those states to eliminate that amount of emissions . USEPA has
adopted much the same interpretation and application of Section 110(a)(2)(D) of the CAA for
regulating downwind transport of precursors of PM 2 5 and 8-hour ozone as USEPA adopted for
the NO, SIP Call
. USEPA determined that upwind states' emissions "contribute significantly" to
downwind nonattainment or interfere with maintenance of 8-hour ozone and PM
2.5 NAAQS. See,
Exhibit A at 25162 .
3 . Interaction between theCAIR and the NO, SIP Call Program
A majority of the states affected by the CAIR were also subject to the NO, SIP Call
. The
NO, SIP Call capped emissions from large sources of NO, during the ozone season (May 1
through September 30) in the affected states
. It identified large cement kilns, large stationary
reciprocating internal combustion engines (hereinafter "IC engines"), and large boilers (both
industrial and commercial) as the highly cost-effective units to control
. For large cement kilns
12 The NOx SIP Call (entitled "Finding of Significant Contribution and Rulemaking for Certain States in the Ozone
Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone ; Rule") was
promulgated by action dated October 27, 1998, and was USEPA's principal effort to reduce interstate transport of
precursors for both the 1-hour ozone NAAQS and the 8-hour ozone NAAQS . See, 63 Fed. Reg.
57356 (October 27,
1998) . On appeal the portion concerning the 8-hour ozone was rejected, hence the need for the CAIR nile
. See,
Michi an v .EPA, 213 F.3d 663 (DC Cir . 2000).
12
and IC engines, states were required to adopt more traditional rate-based or control technology
type rules . Under the CAIR, the control measures for kilns and engines" must remain in place
.
Illinois implemented the requirements for cement kilns by adopting regulations in as set forth in
35 Ill . Adm
. Code 217, Subpart T . See, In the Matter of: Proposed New 35 Ill
. Adm. Code 217,
Subpart T, Cement Kilns, and Amendments to 35 Ill
. Adm . Code 211 and 217, RO1-11 March
15, 2001 . These regulations will remain effective.
For utility boilers, affected states were given the option to include them in the ozone
season trading program rather than adopting a rate-based or technology standard regulation for
control of NO, emissions from these units . Illinois implemented the NO, SIP Call trading
program for electric generating units through the adoption and implementation of Subpart W of
35 111. Adm
. Code Part 217 . The rule was implemented in the 2004 ozone season ." The CAIR
Ozone Season NO, trading program will replace the current NO, SIP Call trading program for
electric generating units . Illinois EPA will continue to operate the NO
x SIP Call trading
program until implementation of the CAIR begins in 2009
. USEPA and Illinois EPA will no
longer operate the NO, SIP Call trading program after the 2008 ozone season, as the CAIR NO,
Ozone Season trading program will replace the NO, SIP Call trading program
.
With respect to non-electric generating units (industrial boilers), Illinois also
implemented the NO x
SIP Call trading program for these units as set forth in Subpart U of 35 Ill
.
"
The portion of the NO, SIP call that concerned control of IC engines was appealed and remanded to USEPA
.
USEPA reduced the required control level to a reduction of 82 percent (from 90 percent) and promulgated a final
rule on April 21, 2004 (hereinafter "Phase II" rule)
. Affected States are required to submit SIPs for affected units
requiring compliance no later than May 1, 2007
. See, 69 Fed. Reg.
21604, 21621 (April 21, 2004) . Illinois EPA
expects to be submitting its proposal to the Board shortly .
14 In the Matter of: Proposed New 35 111. Adm
. Code 217, Subpart W, The NO, Trading Program for Electrical
Generating Units, and Amendments to 35 111 . Adm
. Code 211 and 217, R01-9, December 26, 2000 .
13
Adm. Code Part 217 . 15 Under the CAIR, states have the option of either including the industrial
boilers in only the CAIR NO, Ozone Season trading program or by adopting a more traditional
type of measure to cap emissions of these units during the ozone season . The CAIR specifically
excludes industrial boilers (non-electric generating units) from the CAIR NO, Annual trading
program, except as opt-in units
. As Illinois EPA is required under Sections 172 and 182 of the
CAA to propose RACT for this source category and to adopt regulations demonstrating
attainment of the two new NAAQS, and as Illinois EPA is planning on proposing a statewide
RACT-type rule for these units the Fall of 2006, Illinois EPA is not proposing to include these
units in the CAIR NO, Ozone Season trading program .
Although the NO,, SIP Call trading program will cease for non-electric generating units
after the 2008 control period, allowances allocated under the NO, SIP Call trading program for
control periods before 2009 can be banked and used in the CAIR NO, Ozone Season trading
program, either by the CAIR affected sources for compliance or others with general accounts .
See, Exhibit A at 25274 .
4. Interaction between the CAIR and the AcidRain Program
The Title IV Acid Rain Program was promulgated by Congress as part of the Clean Air
Act Amendments of 1990 (CAAA). See, 42 U.S
.C
. § 7651 et seq . The federal Acid Rain
program for SO
2
was the first cap and trade program and it is administered by USEPA, not the
states
. The provisions required the removal of 12 .5 million tons of SO2 from electric generating
units, reducing SO2 emissions by the year 2000 by roughly half
. The federal Acid Rain SO2
trading program does not mandate that a particular type of control be installed or that a particular
15
In the Matter of, Proposed New 35 111
. Adm
. Code 2I7 .Subpart U, NO, Control and Trading Program for
Specified NO, Generating Units, Subpart X, Voluntary NO, Emissions Reduction Program, and Amendments to 35
Ill. Adm. Code 211, R01-17, April 17, 2001 .
14
emission rate be met by electric generating units, but that all affected units must hold allowances
at the end of the control period equal to SO
2
emissions for the control period
. An allowance
represents a ton of SO
2
emissions and is commonly referred to as a marketable emission
reduction credit
. USEPA allocates allowances as set forth in Title IV of the CAA and 40 CFR
73
. The number of allowances that an affected unit will receive is allocated in perpetuity
. There
are, however, a small number of additional allowances available to units that repower or from the
special reserve .
The CAIR SO2
trading program builds on and coordinates with the federal Acid Rain SO2
trading program to ensure that the required reductions in the CAIR are achieved and the efficacy
of the federal Acid Rain SO
2
program is preserved . The CAIR S02
trading program is more
stringent than the federal Acid Rain SO2
program through the use of a more stringent compliance
retirement ratio of SO2
allowances
. Two allowances per ton of emissions are required for control
periods 2010 through 2014, and 2
.86 allowances per ton of emissions are required for control
period 2015 and thereafter . See, Exhibit A at 25291
. The program also allows the use of banked
SO2
allowances allocated for years before 2010 to be used at a ratio of one allowance per ton of
SO2
emissions
. This has the effect of cushioning the additional reductions needed to meet the
CAIR SO2 trading program in 2010
.
The federal Acid Rain NO x
program under Title IV of the CAA specified a two-part
strategy to reduce NOx
emissions from coal-fired electric power plants
. Phase I was
promulgated on April 13, 1995, and reduced NO, emissions in the United States by 400,000 tons
per year by 1999
. Phase II began in 2000, and is expected to reduce emissions by 2
.1 million
tons per year. See,
Exhibit C, Nitrogen Oxides (NO.)
Reduction under Phase II
ofthe Acid Rain
Program, U .S.
Environmental Protection Agency, Clean Air Markets
. The Acid Rain NO,
15
program sets emissions limits for coal-fired boilers by type of boiler. Owners and operators of
affected units may comply by either meeting the emission limit or through emissions averaging
among two or more affected units . The NO, emissions limits range from 0 .40 lb/mmBtu for
tangential boilers to 0 .84 lb/mmBtu for wet bottom boilers . See, 40 CFR 76 .
111. Sections9.10and10 oftheAct
A. Section 9.10 of the Act
In addition to requirements at the federal level that have identified emissions from fossil
fuel-fired electric generating units as a major source of pollution, the General Assembly has also
spoken to this issue . Section 9 .10 of the Act recognizes and declares that :
1) the fossil fuel-fired electric generating units are a significant source of air emissions
within the State . . ;
6) the Governor's formation of an Energy Cabinet and the development of a State energy
policy calls for actions by the Illinois EPA and the Board that are in harmony with the
energy needs and policy of the State, while protecting the public health and
environment; . . . .
8) renewable forms of energy should be promoted as an important element of the energy
and environmental policies of the State and that it is the goal of the State that at least 5
of the State's energy production and use be derived from renewable forms of energy by
2010 and at least 15% from renewable forms of energy by 2020 .
415 ILCS 5/9.10(a)
. The Act also called for a comprehensive review of the impact of these
facilities on the environment within Illinois . Pursuant to Section 9
.10(10)(b) of the Act, Illinois
EPA presented a report to the General Assembly, entitled "Fossil Fuel-Fired Power Plants
:
Report to the House and Senate Environment and Energy Committees," September 2004 . See,
Exhibit D . The report evaluated several aspects included in Section 9
.10 of the Act, and
recommended that Governor demand that the federal government act nationally to address
pollution from electric generating units and that States would have difficulty proceeding with
16
additional control of electric generating units until the national strategy was solidified and the
timing was known . Id.
Executive Summary at ix . The CAIR was promulgated on May 12,
2005, eight months after the report was published
. While the report did not specifically conclude
that a particular approach should be followed, the Act does states in pertinent part
:
The Illinois EPA shall consider the impact on the public health, considering also energy
supply, reliability and costs, the role of renewable forms of energy, and
developments in
federal law
and regulations that may affect any state action, prior to making final
decisions in Illinois . (emphasis added)
415 ILCS 5/9 .1 0(b)(5).
This proposal is an outgrowth of Section 9
.10 of the Act and USEPA's
CAIR .
B. Section 10 of the Act
Section 10(A) of the Act provides the Board's general authority for rulemaking
addressing air pollution :
The Board, pursuant to procedures prescribed in Title VII of this Act, may adopt
regulations to promote the purposes of this Title
. Without limiting the generality of this
authority, such regulations may among other things prescribe
. .
. ambient air quality
standards . . .
emissions standards . . . standards for issuance of permits
. . .
415 ILCS 5/10(A) . It is pursuant to this Section, and Sections 9
.10 and 28
.5 of the Act, that
Illinois EPA is submitting this regulatory proposal
. As discussed above, not only are the
proposed regulations necessary to meet the State's obligations under the CAIR, they are also
necessary to meet the State's obligations under the CAA to attain the two new NAAQS
: 8-hour
ozone and PM2 .5 .
With respect to PM2 .5,
and as noted supra,
USEPA has identified emissions of
both NO, and SO
2
as precursors to PM2
, 5 formation in the atmosphere
. As part of the steps
needed for Illinois to demonstrate attainment with the PM2
.5
NAAQS, to reduce interstate
transport, and to improve visibility, Illinois must adopt and implement certain regulations for
17
NO, and SO2 emissions that meet these federal requirements .
In reviewing the provisions of the Act, it is incumbent upon Illinois EPA to address the
applicability, or lack thereof, of Section 10(B) of the Act
. For reasons other than attainment of
the SO2 NAAQS, the proposed regulations would further address SO 2 emissions from electric
generating units, a type of fuel combustion source, located throughout the State, including the
three major metropolitan areas of Chicago, Peoria, and Metro-East/St
. Louis ." It may seem as
though Section 10(B) is applicable
. A closer reading, however, of that provision and subsequent
regulatory and legislative history proves otherwise
. Section 10(B) provides :
The Board shall adopt SO2 regulations and emission standards for existing fuel
combustion stationary emission sources located in all areas of the State of Illinois, except
the Chicago, St . Louis (Illinois) and Peoria major metropolitan areas, in accordance with
the following requirements
:
(1) Such regulations shall not be more restrictive than necessary to attain and
maintain the "Primary National Ambient Air Quality Standards for Sulfur
Dioxide" and within a reasonable time attain and maintain the "Secondary
National Ambient Air Quality Standards for Sulfur Dioxide
."
415 ILCS 5/10(B)
. Although Section 10(B) appears to apply to the SO 2 portion of the present
rulemaking, such is not the case for several different reasons."
1 . The Purposeof Section10(B)
Has Been Met
Section 10(B) of the Act is not applicable to this rulemaking, since the purpose behind
the statutory provision has been fulfilled . It is well-established that in construing a statute, the
most fundamental rule is to give effect to the legislature's intent, and the best evidence of that
intent is the statutory language
. That language must be given its plain and ordinary meaning, and
16 On April 4, 1995, USEPA approved the SIP revision necessary for the last remaining SO2
nonattainment area in
the Illinois to be redesignated to attainment of the NAAQS . 40 CFR § 52 .724(h) .
n Section 10(B) of the Act was adopted as part of Senate Bill 1967, later P .A
. 81-1370, effective August 8, 1980 .
18
courts may not properly construe a statute by altering its language in a way that constitutes a
change in the plain meaning of the words actually adopted by the legislature
. If the statutory
language is clear, a reviewing body must give effect to the plain and ordinary meaning without
resorting to other construction aids
. See, U.S. Bank National Association v
. Clark, 216 111.2d
334, 346, 837 NE.2d
74, 82 (2005) .
The language of Section 10(B) is clear
. The provisions were intended to limit the extent
to which SO2
emissions from fuel combustion sources outside of the three major metropolitan
areas could be controlled, as Illinois EPA was moving forward with its attainment and
maintenance strategies for the SO
2
NAAQS, following the adoption of the CAA Amendments of
1977
. Accordingly, the General Assembly clearly gave the Board the authority to adopt two
categories of regulations
. First, the General Assembly stated that the Board would have the
authority to adopt certain SO
2
regulations and emission standards for existing stationary fuel
combustion emission sources located in all areas of the State except for the Chicago, Peoria and
Metro-East/St . Louis major metropolitan areas
. As to those "statewide" SO2
regulations, the
General Assembly's language required in pertinent part that such regulations be no more
restrictive than necessary to attain and maintain primary and secondary NAAQS for
SO2
.
415
ILCS 5/10(B)(1) .
Regarding the second purpose, the regulation of such sources in the three major
metropolitan areas, the General Assembly clearly, by lack of any restriction or other conditions,
left the criteria for regulation of such sources in the major metropolitan areas to the authority and
discretion of the Board
. Id
. Again, this is consistent with the action of Illinois EPA to propose
regulations that would address the nonattainment status in the major metropolitan areas
.
Effectively then, there were two different regulatory approaches that were envisioned and
19
created by the General Assembly ; the first sought to impose SO2 emissions standards for areas of
the State other than the major metropolitan areas, and the second sought to allow for Illinois EPA
and the Board to work in tandem to impose SO2 emissions standards specifically tailored to the
major metropolitan areas, which included areas in which the SO2 NAAQS were not met or were
threatened .
Setting aside for now the first purpose of Section 10(B), the second part of the statutory
provision may be examined . To address that second purpose, i.e., nonattainment in the major
metropolitan areas, Illinois EPA proposed standard for SO 2 emissions from fuel combustion
emission sources located within the major metropolitan areas ." The proposal was received by
the Board on December 1, 1980, or several months after the effective date of Section 10(B) .
On February 24, 1983, the Board issued its final order for the adopted rule stemming
from Illinois EPA's December 1980 proposal . See, In the Matter Of.- Sulfur Dioxide Emission
Limitations: Rule 204 of Chapter 2,
R80-22, February 24, 1983 . In the final order, the Board
recognized that Illinois EPA's December 1980 proposal was in response to the legislative
mandate (of Section 10(B) of the Act) that it review the SO2 emission standards for existing fuel
combustion emission sources located within the three major metropolitan areas and thereafter
propose amendments, consistent with the CAA's NAAQS program, which would enhance the
use of Illinois coal
. Board Opinion, R80-22 at 1 . Those final rules are now found in Part 214 of
the Board's regulations . 35 111 . Adm. Code Part 214, originally adopted as Rule 204
.
By virtue of the completed rulemaking in R80-22, the Board and Illinois EPA fulfilled
the second purpose of Section 10(B) as set forth by the General Assembly ; namely, the Board
adopted regulations for the three major metropolitan areas that addressed NAAQS for SO 2 .
Thus, that aspect of Section 10(B) has been met and no longer has any purpose .
18See, In the Matter
Of
. Sulfur Dioxide Emission Limitations : Rule 204 of Chapter 2, R80-22, Febmary 24, 1983 .
20
With respect to the first portion of Section 10(B), the Board was left with certain
guidelines as to the nature of regulations affecting S0
2
emissions in the remainder of the State
other than the major metropolitan areas
. The Board was to adopt such regulations so long as
they were no more restrictive than need to attain the NAAQS for S0
2
.
Again, it bears repeating
that Section 10(B) of the Act was enacted in 1980
; in 1983, the second purpose of the provision
was met via the Board's adoption of the S02 emissions proposal in R80-22
.
Prospectively from 1983, then, the only remaining function of Section 10(B) was to
provide guidance in the adoption of S02-related regulations by the Board
. A newer statutory
provision has superseded Section 10(B) as to that limited purpose, and therefore all remaining
purpose and effect of Section 10(B) has essentially ended, as discussed below
.
2 . Resolution of Section 9 .10and
Section 10(B)
Moving forward over 20 years after the effective date of Section 10(B), the General
Assembly again adopted legislation concerning regulation of SO
2
emissions
. In 2001, the
General Assembly adopted Section 9
.10 of the Act pertaining to the regulation of electric
generating units. 415 ILCS 5/9 .10 . Section 9
.10(b)(2) directed Illinois EPA to propose
regulations controlling SO2 emissions from such sources
:
. .
. the Agency shall address the potential need for the control reduction of emissions
from fossil fuel-fired electric generating plants, including the following provisions
: (2)
reduction of sulfur dioxide emissions, as appropriate, with consideration of maximum
annual emissions rate limits or establishment of an emissions trading program and with
consideration of developments in federal law and regulations that may affect any State
action, prior to making final decisions in Illinois;
415 ILCS 5/9 .10(b)(2). Section 9 .10(c) also provides that
:
Nothing in this Section is intended to or should be interpreted in a manner to limit or
restrict the authority of the Illinois Environmental Protection Agency to propose, or the
Illinois Pollution Control Board to adopt, any regulations applicable or that may be come
21
applicable to the facilities covered by this Section that are required by federal law.
415 ILCS 5/9 .10(c) (emphasis added) .
Given the passage of time since the effective date of Section 10(B), it is not at all
surprising that the General Assembly imposed the report requirement upon Illinois EPA as set
forth in Section 9.10 of the Act, as it recognized that additional knowledge was available
concerning the chemistry of air pollution, and the availability of newer emissions control
technologies are now available for the control of emissions . In addition, it is clear that the
General Assembly fully intended that Illinois EPA should propose, and the Board should have
the authority to adopt, regulations for the control of SO2 emissions whose nature went far beyond
the minimum needed for attainment of the SO2 NAAQS, e.g., attainment of the PM2.5 NAAQS,
reduction in interstate transport, and improvement in visibility
. This is obvious because the State
of Illinois was in full attainment of the
SO2 NAAQS when Section 9 .10 was adopted. The
Section 9.10 report in fact recognizes that the emissions of SO 2 need to be reduced for purposes
other than compliance with the SO2 NAAQS
.
EGUs emit particulate matter directly into the air, and they release SO 2
and NO, that are
converted into sulfate and nitrate particulate matter in the atmosphere through complex
chemical reactions . These emissions can be transported for hundreds of miles from
Illinois and into Illinois . In Illinois, EGUs are responsible for 21 percent of particulate
matter emissions, 27 percent of NO, emissions, and 68 percent of SO 2 emissions .
Section 9 .10 Report at 3
. That being the case, while there may seem to be a conflict between
Sections 9.10 and 10(B), insofar as Section 9.10 contemplates regulation of SO 2 emissions
statewide for several different purposes based on Illinois EPA findings and Section 10(B)
envisions a more restricted regulation of SO
2
emissions, a review of relevant case law shows that
there is no such conflict .
It is presumed that the legislature, in enacting various statutes, acts rationally and with
22
full knowledge of all previous enactments
. It is further presumed that the legislature would not
enact a law that completely contradicts a prior statute without an express repeal of it and that
statutes that relate to the same subject are to be governed by one spirit and a single policy
. See,
Spina v
. Toyota Motor Credit Corporation, 301 I11
.App.3d 364, 376, 703 N.E.2d 484, 492 (V`
Dist. 1998).
Although one may attempt to argue that Section 10(B) would prevent regulation of
S02
emissions uniformly and throughout the State (including the three major metropolitan areas
described in Section 10(B)), Section 9.10
clearly gives the Board authority to regulate to the
contrary
. The question is how to reconcile both provisions .
In general, repeal of a previous enactment by implication through passage of a new law is
not favored
. Courts assume that the legislature will not draft a new law that contradicts an
existing one without expressly repealing it, and that the legislature intends a consistent body of
law when it amends or enacts new legislation
. Thus, courts construe statutory provisions in a
manner that avoids inconsistency and gives full effect to each provision wherever reasonably
possible .
See, In re Marriage ofLasky, 176111.2d 75, 79-80, 678 N.E.2d
1035, 1037 (1997) .
Applying those rules to the interplay of Sections
9 .10 and 10(B), the appropriate
conclusion to be drawn is that the General Assembly intended Section 10(B) to allow for the
adoption of SO2 regulations for the three major metropolitan areas, and also to provide a
framework for other SO2 emission-related regulations applicable to the remaining areas of the
State
. As a natural progression, over two decades later, the General Assembly revised its
previous stance, seeking to take into account the change in conditions throughout the State, an
the increase in knowledge concerning atmospheric chemistry, the health effects of pollution and
the availability of new emission control technology, it enacted Section
9 .10 which allowed for,
inter alia, broad-based regulation of S0
2 emissions throughout the State with no specific
23
exclusion of the three major metropolitan areas identified in Section 10(B) . This construction
and interpretation of the statute gives meaning and purpose to both statutory provisions, and
correctly places Section 9 .10 as the applicable law for the present situation . Section l0(B)'s
purpose in terms of directing regulation of SO
2
emissions was not without function in its
historical context
. However, it must be concluded that the General Assembly's intent for
regulating SO2 emissions has progressed to the broader instructions found in Section 9 .10.
3 . Section10(B) Limited to SO 2 NAAQS
Section 10(B) of the Act is not an impediment to this rulemaking proposal as Section
10(B) has a limited scope
. The only NAAQS that Section 10(B) addresses is the NAAQS for
SO2 , as is plainly evidenced in Section I0(B)(1). In the proposed rulemaking, however, SO
2
would be regulated not in the context of compliance with SO
2
NAAQS, but rather in its role as a
precursor to the formation of PM 2.5, a different pollutant, and to address the State's obligations
under the CAA to control contributions to inter- and intra-state pollution transport, and
improvement in visibility, all of which will improve the air quality for the citizens of Illinois
.
All of these purposes are consistent with the Board's authority pursuant to Section 10(A) of the
Act, hence, regulation of SO2
emissions as contemplated in this proposal is appropriate and not
precluded by Section 10(B) .
IV.
GEOGRAPHIC REGION AND SOURCES AFFECTED
The geographic region subject to the CAIR is the entire State of Illinois
. The proposed
regulations are expected to affect existing and new electric generating units as described below
.
There are approximately 229 existing electric generating units that will be subject to the CAIR
24
NO, Annual, the CAIR SO2, and the CAIR NO, Ozone Season trading programs
. For the CAIR
NO, Annual, and the CAIR SO2 trading programs existing units are those that commenced
operation before January 1, 2006
. For the CAIR NO x
Ozone Season trading program, existing
units are those that commenced operation before May 1, 2006
. Of these units, 170 are gas and
oil fired boilers, 59 are coal-fired boilers, and the remainder are gas and oil-fired combustion
turbines
. Some coal-fired boilers have the capability to bum natural gas, fuel oil or both
. Of the
59 coal-fired boilers, 34 are tangentially-fired, five are wall-fired, 18 are cyclone-fired boilers
and one is a circulating fluidized bed boiler .
Most of the gas turbines operate on a simple cycle and operated primarily during the peak
electricity demand periods
. Therefore, capacity factors of most of the gas turbines are very low
.
Because of higher costs of gas and fuel oil per unit of heat input (i
.e., btu) compared to coal, gas
and fuel oil-fired units are expensive to operate and therefore, typically operate only during peak
demand .
The proposed regulations are expected to affect existing electric generating units, and any
new electric generating units that serve a generator greater than 25 megawatts, or any unit with a
maximum design heat input that is greater than 250 mmBtu/hr and that has the potential to use
more than 50% of the "potential electrical output capacity" and that sell electricity to the grid
. If
the size of the generator is greater than this number, the unit is an electric generating unit subject
to this proposal
. While gas-fired turbines typically have low emissions of SO2, they are still
required to comply with the requirements of the CAIR SO
2
trading program
. In Illinois,
emissions from oil and gas boilers and turbines are approximately 2,000 tons per year (TPY) of
SO2
as compared to 361,000 TPY of SO2 from coal-fired boilers .
25
V.
PURPOSE AND EFFECT OF THE PROPOSAL
A. Purpose
As discussed in detail supra this proposal has been prepared to satisfy a portion of the
Illinois' obligations under the CAA to submit SIPs with control strategies necessary
: to
demonstrate attainment of the 8-hour ozone and PM2, 5 NAAQS for the Metro-East/St . Louis and
the greater Chicago nonattainment areas ; to satisfy the requirements for Regional Haze ; and to
satisfy the requirements of the CAIR by implementing the CAIR SO 2, the CAIR NO,, Annual,
and the CAIR NO, Ozone Season trading programs .
B. TheCAIRSO2Trading Program
Illinois is one of 25 States and the District of Columbia that have been found to
contribute significantly to nonattainment of the NAAQS for PM 2.5 in downwind states . See,
Exhibit A at 25617 . USEPA is requiring Illinois, as an upwind state, to revise its SIP to include
control measures to reduce emissions of SO2 because it is a precursor to PM2,5 formation.
Reducing upwind precursor emissions will assist the downwind PM2.5 nonattainment areas in
achieving the NAAQS. To meet the
S02 emission reduction requirements, states have the option
of either meeting an SO2 budget as provided in the CAIR, or adopting the CAIR SO 2 trading
program .
Regardless of which option a state chooses the emissions reductions are implemented in
two phases. The first phase of SO2 reductions begins with the 2010 control period (January 1,
2010 through December 31, 2010) and runs through the 2014 control period . The second phase
of SO2 reductions begins with the 2015 control period and each control period thereafter . Phase I
requires a 50 percent reduction of SO 2 emissions from Acid Rain emission levels and Phase II
26
requires a 65 percent reduction of S0
2
emissions from Acid Rain emission levels .
The CAIR S0
2
budget is applicable only if a state chooses not to participate in the federal
CAIR S02
trading program. The total annual CAIR S02
budget for Illinois is 192,671 tons of
S02 per year for control periods 2010 through 2014 . The total CAIR SO2
budget for Illinois is
134,869 tons of SO2
per year for control periods 2015 and thereafter .
Illinois EPA is proposing to participate in the CAIR SO 2
trading program ; hence, the
obligation to meet the SO2
budgets is moot . The CAIR SO2 trading program is an annual
program, where the control period extends from January 1 through December 31 of each year,
beginning January 1, 2010 . The CAIR SO2
trading program is coordinated with the federal Acid
Rain program. The CAIR SO2
trading program applies to large electrical generating units, those
serving a generator of 25 megawatts (MW) or more that produce electricity for sale
. It excludes
certain cogeneration units that meet a capacity requirement and provide less than one-third of
their power for sale to the grid
. Each affected source is required to hold sufficient allowances to
cover its S02 emissions for the applicable control period
. The allowance transfer deadline is
March 1 after the control period . Affected CAIR SO2 units will receive S02
allowances directly
from USEPA according to the allowance allocation set forth for the unit under the federal Acid
Rain Program. Under the federal Acid Rain program, new units do not receive allowances
.
Treatment of new units will be the same under the CAIR SO 2
trading program .
The emission reductions result from tightening the retirement ratios for Acid Rain SO
2
allowances. The CAIR SO2
trading program provides that instead of retiring one allowance per
one ton of SO2
emitted, a unit must retire allowances at a greater rate
. A CAIR SO2 allowance
allocated for a control period in 2010 through 2014 is an authorization to emit 0
.50 ton of SO2;
and a CAIR SO2
allowance allocated for a control period 2015 or later is a limited authorization
27
to emit 0 .35 ton of SO2
.
These ratios may be different if there is a violation and allowances are
deducted for compliance under 40 CFR § 96 .254(b). A violation occurs when a source fails to
hold sufficient allowances in its compliance account for a given control period by the allowance
transfer deadline . In addition to retiring allowances for compliance, the allowances may also be
traded, bought or sold on the open market . However, there is no inter-pollutant trading of
allowances; a CAIR SO
2
allowance may not be used instead of a CAIR NO, allowance or vice
versa. With respect to Acid Rain SO
2
allowances allocated for control periods before the onset of
the CAIR in 2010, they will retain their value as an authorization to emit one ton of SO 2 , and
may be banked for use in the CAIR program for control period 2010 and thereafter . This
provides an incentive for sources to make early reductions .
To implement this program, Illinois EPA is proposing to incorporate by reference all
provisions of the federal CAIR SO2 trading program, except for the compliance and permitting
provisions, whose provisions are set forth in Sections 225 .310 and 225
.320 . The permits for the
CAIR SO2 trading program will be issued by Illinois EPA to affected sources and will include
the compliance provisions, which mirror the federal requirements
. This is similar to how the
federal Acid Rain program is implemented in Illinois
. Illinois EPA did have the option to adopt
SO2 opt-in provisions, which are provisions that would allow units that are not affected electrical
generating units to participate in the CAIR SO2 trading program . Illinois EPA is not proposing
to adopt these provisions because administratively it is complex, to date no source has requested
such an option, and regulation of SO2 emissions from non-electric generating units will be
addressed in later a rulemaking . With regard to the provisions for retired units, Illinois EPA has
no flexibility as to the treatment of these units
. The federal Acid Rain Program provides that
such units receive allowances in perpetuity, and, as Illinois EPA has no discretion as to how
28
allowances are allocated under the federal Acid Rain Program
. These units will continue to
receive an Acid Rain SO2 allocation
.
C. The CAIR NO, Annual Trading Program
Illinois is one of 25 States and the District of Columbia that have been found to
contribute significantly to nonattainment of the NAAQS for PM
2.5 in downwind states . See,
Exhibit A at 25167
. USEPA is requiring Illinois, as an upwind state, to revise its SIP to include
control measures to reduce emissions of NO„ on annual basis, because it is a precursor to PM2.5
formation
. Reducing upwind precursor emissions will assist the downwind PM2.5
nonattainment
areas in achieving the NAAQS
. To meet the NO, emission reduction requirements, states have
the option of either meeting an annual NO, budget as provided in the CAIR, or adopting the
federal CAIR NO, Annual trading program which
also includes a NO, budget for electric
generating units .
Regardless of which
option a state chooses, the emissions reductions are implemented in
two phases
. The first phase of NO, reductions begins with the 2009 control period (January 1,
2009 through December 31, 2009) and runs
through
the 2014 control period. The second phase
of NO, reductions begins with the 2015 control period and each control period thereafter
. Phase
I requires a 48 percent reduction of NO, emissions from the 2010 base case
. Phase II requires a
66 percent reduction of NO, emissions from 2015 base case
. The total annual CAIR NO, budget
for Illinois is 76,230 tons of NO, per year for control periods 2009 through 2014
. The total
CAIR NO, budget for Illinois is 63,525 tons of NO, per year for control periods 2015 and
thereafter.
Illinois EPA is proposing to participate in the federal CAIR NO, Annual trading program
.
29
Under the CAIR, states choosing to participate in the CAIR NO, Annual trading program must
meet certain mandatory elements of the program, especially if the State requests automatic
approval of its SIP . See, 40 CFR § 51 .123 . Required elements of the trading program include
the following: requiring that large electrical generating units participate in the trading program ;
requiring these units to monitor emissions as specified under 40 CFR 75, subpart H (continuous
emissions monitoring); requiring these units to amend their Clean Air Act Permit Program
(CAAPP) operating permit or obtain a federally enforceable permit covering the elements of the
trading program ; requiring the source to have one designated representative that is responsible
for certifying compliance for all units participating in all applicable CAIR trading programs and
the federal Acid Rain program, if applicable ; and requiring the designated representative to take
responsibility for maintaining records and submitting reports required under the program . The
proposed rule includes all required elements of the trading program with respect to electrical
generating units and incorporates by reference 40 CFR 96, subpart AA (NO, Annual Trading
Program General Provisions) (excluding 40 CFR §§ 96 .104, 96.105(b)(2), and 96 .106), subpart
BB (CAIR Designated Representative for CAIR NO, Sources), subpart FF (CAIR NO,
Allowance Tracking System), subpart GG (CAIR NO, Allowance Transfers), and subpart HH
(Monitoring and Reporting) . To implement this program, Illinois EPA is proposing to
incorporate by reference all provisions of the federal CAIR NO, trading program, as noted
above, except for the allocation methodology, compliance and permitting provisions . The
permits for the CAIR NO, trading program will be issued by Illinois EPA to affected sources
and will include the compliance provisions, which mirror the federal requirements . The
proposal also incorporates by reference 40 CFR 75 (Continuous Emissions Monitoring) and 40
CFR 78 (Appeal Procedures) .
30
The CAIR NO, Annual trading program provides for flexibility in the areas of
applicability, the CAIR NO x allowance allocation methodology, and allocation of the
Compliance Supplement Pool
. For example, USEPA stated that SIPs may allow, but not require,
non-electric generating units to opt-in to the annual trading program to obtain some of the
reductions necessary to meet the state's budget if certain criteria were met . If non-electric
generating units were allowed to opt-in, it might or might not result in additional emissions
reductions
. States also have discretion in determining their CAIR NO, allowance allocation
methodology, as long as they demonstrate they will meet their budget
. Finally, USEPA created
the Compliance Supplement Pool that states may elect to distribute through early reduction
credits or through direct distribution if a hardship or a disruption in electricity supplied to the
grid is demonstrated
. The control period for the CAIR NO, Annual trading program extends from
January 1 through December 31 of each year, beginning with 2009
. The trading program
provides that one allowance is a limited authorization to emit one ton of NO.
. These ratios will
be different if there is a violation and allowances are deducted for compliance under 40 CFR §
96.154(b)
. There is a violation if a source fails to hold sufficient allowances in its compliance
account to cover its emissions for a given control period by the allowance transfer deadline
.
In addition to retiring allowances for compliance, the allowances may also be traded,
bought or sold on the open market. The allowance transfer deadline is March 1 after the control
period. Affected CAIR NO, units will receive CAIR NO, allowances from Illinois EPA
according to the allowance allocation methodology discussed below
. However, there is no inter-
pollutant trading of allowances, a CAIR NO, allowance may not be used instead of a CAIR SO2
allowance or vice versa
. As discussed below, the proposed rule takes the opportunity to use all
areas of discretion afforded by the CAIR NO, trading programs, while still allowing affected
31
units to participate in a regional trading program .
1 . Applicability
The CAIR NO, Annual trading program applies to large electrical generating units, those
serving a generator of 25 megawatts (MW) or more that produce electricity for sale
. It excludes
certain cogeneration units that meet a capacity requirement and provide less than one-third of
their power for sale to the grid
. Each affected source is required to hold sufficient allowances to
cover its emissions for the applicable control period . USEPA also stated that non-electric
generating units could not be included in the annual CAIR program, however states do have the
option to allow these sources to voluntarily opt-in to the NO, Annual trading program . Illinois
EPA is not proposing to adopt these provisions because administratively it is complex, to date
no source has requested such an option, and it will be necessary to obtain annual NO x
reductions from all large non-electric generating units in order to attain the PM25 NAAQS in
both nonattainment areas and the 8-hour ozone NAAQS in the greater Chicago nonattainment
area .
2 . Use of Allowances
The CAIR NO, Annual trading program provides states considerable flexibility on how
they may allocate allowances . The areas of flexibility include : cost (e .g., free distribution or
auction) ; frequency of distribution (e .g., permanent or periodically updating) ; basis for
distributing the allowances (e .g., heat input or power output) ; and use of allowance set-asides,
including the size of any set-asides (e
.g ., new-unit set-asides, energy efficiency and conservation
or renewable energy set-asides units, set-asides for development of Integrated Gasification
32
Combined-Cycle (TGCC) generation, or set-asides for smaller units)
. See, Exhibit A at
25279 .
USEPA states that it is leaving the decision on using set-asides up to the states, so that states may
craft their allocation approach to meet their state-specific policy goals
. Id. at 25279 .
Illinois EPA is proposing that 70
percent of Illinois' CAIR NOx
allowances for each
control period be directly allocated to existing electric generating units at no charge, that five
percent of the Illinois' allowances be used for a new unit set-aside (NUSA), and that the
remaining 25
percent of its allowances be used for a Clean Air Set-Aside (CASA) for certain
projects
. These projects include renewable energy, energy efficiency and conservation, and
clean technology projects
. In the case of both set-asides, if they are under-subscribed, Illinois
EPA is also proposing to elect to retire the allowances to help attain and maintain the PM
2.5 and
8-hour ozone NAAQS
. This is consistent with the CAIR and USEPA guidance for "Guidance on
Establishing an Energy Efficiency and Renewable Energy (EE/RE) Set-Aside in the NO, Budget
Trading Program (EE/RE Guidance)," and proposed guidance for the implementation of the
PM2 5 NAAQS .
See, Exhibit E.
According to the EE/RE Guidance, USEPA estimates that if all states in the NO, SIP call
region set-aside five percent of their allowances for energy efficiency (EE) or renewable energy
(RE) projects, the region could see annual savings of
$5 billion in consumers' energy bills and
$150
million in air quality compliance costs
. In addition, USEPA believes that such a set-aside
would create 40,000 jobs . See, TSD 7 .3 .2
.
USEPA recommends that a set-aside for EE/RE
range between five and
15 percent. See, TSD 8 .1 .5.2 .
Illinois EPA is proposing an EE/RE of
12
percent
. An additional 11 percent of the CASA is for clean technology projects, which is
consistent with USEPA's guidance for distributing allowances in that it gives the state the
flexibility to distribute allowances in a preferential manner
. In this case, Illinois EPA is giving
33
preferential treatment to sources that install pollution controls, upgrade facilities, or install IGCC
or other clean coal boiler technology
. The remaining two percent of the allowances are given to
either EE/RE or clean technology projects that commence operation "early"
- before 2012 .
Other States have proposed or implemented EE/RE set-asides, including Indiana,
Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, and Ohio . See,
Exhibit E. In addition to RE/EE projects, Illinois EPA sees great value in projects that reduce
SO2 and NO, emissions . Preliminary air quality modeling demonstrates that significant
additional SO2 and NOx
reductions beyond those provided under the CAIR will be needed to
achieve and maintain the PM 2.5 and 8-hour ozone NAAQS
.
See,
TSD 3 .2.
Illinois EPA believes that the size of the NUSA, five percent, will be necessary to
accommodate new power plants that have been permitted or for which permits are pending, but
have not yet commenced construction
. It currently has construction applications for at least four
power plant projects, any one of which could request two-thirds of the NUSA for a given control
period should the project be built
. In addition, the proposal provides that allowances from the
NUSA that are not allocated in for a given control period will accrue for future control periods,
up to five times the number designated for a control period
. If the number of allowances in the
NUSA, after allocations have been made to new units, exceeds five times the designated amount,
the Illinois EPA has the discretion to retire these allowances for air quality purposes
. Pursuant to
USEPA guidance
: "Guidance on State Implementation Plan (SIP) Credits for Emission
Reductions from Electric-Sector Energy Efficiency and Renewable Energy Measures," states
may take credit for retiring NO, allowances
. See, Exhibit F
. The guidance specifically discusses
credit retirement in the context of energy efficiency and conservation projects and renewable
energy measures, but the result is applicable in this context as well
.
34
Illinois EPA believes that the establishment and the project categories contained in the
CASA are consistent with Governor Blagojevich's "Illinois Sustainable Energy Plan" and
Department of Commerce and Economic Opportunity (DCEO) studies promoting cleaner,
renewable energy alternatives for the State of Illinois
. The Governor's envisions reducing
electricity consumption by 25 percent of projected load growth by
2015 . See, Exhibit G . In
addition, Illinois EPA believes that it is good environmental policy to provide more allowances
to sources that operate more efficiently, install air pollution control equipment, and upgrade their
equipment
.
Illinois EPA is proposing that allocations be based on gross electrical output for both new
and existing affected units
. A short look-back period is being used because it provides an
incentive for efficient operations, which will result in fewer emissions per unit of power
produced. See, TSD 8.1 .1
. We note that some sources do not currently have wattmeters
installed to measure gross electrical output
; for those sources the initial allocations for control
periods 2009
through 2011 will
be based on heat input and adjusted by a presumed 33 percent
efficiency factor
. In either case, the gross electrical output or the heat input average will be
adjusted by a fuel weighting factor
. Illinois EPA believes that it is appropriate to reduce the
allocations to units that are oil or gas fired, as USEPA determined the regional budget and the
state budgets based on heat input and type of fuel from existing electric generating units
. The
resulting adjustment factors are 1
.0 for coal, 0
.4 for gas, and 0.6 for oil
. These factors reflect the
inherently higher emission rate of coal-fired plants, and consequently the greater burden on coal
plants to control emissions . See, TSD 9.2.1
.
The proposal does provide
12 percent of the allowances for energy efficiency and
conservation and renewable energy projects
. This is consistent with both the General
35
Assembly's legislative intent under the Governor's Energy Policy and Section 9 .10 of the Act :
8) renewable forms of energy should be promoted as an important element of the energy
and environmental policies of the State and that it is the goal of the State that at least 5
of the State's energy production and use be derived from renewable forms of energy by
2010 and at least 15% from renewable forms of energy by 2020 .
415 ILCS 5/9 .10. An additional 11 percent of the allowances will go to existing units that install
or upgrade pollution control technology, or new sources of clean coal technology . It is
appropriate to provide incentives for those technologies that will increase the production of clean
power in Illinois or that will provide reductions in emissions of SO
2
and NO, within the State .
There is a further two percent set-aside provided to for projects that are implemented prior to
2012, and as discussed above, Illinois needs reductions sooner rather than later to meet the
statutory deadlines for attainment of the 8-hour and
PM2.5
NAAQS .
As part of working toward timely attainment of these NAAQS, Illinois EPA is also
proposing retirement of the Compliance Supplement Pool . Given the difficulty that the State
will face in attaining the PM2
.5 and 8-hour ozone NAAQS, to have an additional 11,299 tons
(for the annual NO, program) emitted during the critical years that are being used to determine
attainment is counter productive
. Further, the State may take SIP credit for retirement of these
allowances
.
D. The CAIR NO,Ozone
Season Trading Program
Illinois is one of 25 States and the District of Columbia to contribute significantly to
nonattainment of the NAAQS for ozone in downwind States
. See, Exhibit A at 25167
. USEPA
is requiring Illinois, as an upwind State, to revise its SIP to include control measures to reduce
emissions of NO, because it is a precursor to ozone formation . Reducing upwind precursor
emissions will assist the downwind 8-hour ozone nonattainment areas in achieving the NAAQS .
36
To meet the NO, emission reduction requirements, states have the option of either meeting an
ozone season NO, budget as provided in the CAIR, or opting into the federal CAIR NO, Ozone
Season trading program which also includes a NO, budget .
Regardless of which option a state chooses, the emissions reductions are implemented in
two phases. The first phase of NO, reductions begins with the 2009 control period (May 1, 2009
through September 30, 2009) and runs through the 2014 control period
. The second phase of
NO, reductions begins with the 2015 control period and each control period thereafter . Phase I
does not require a reduction of NO, emissions beyond the NO, SIP call emissions levels, as the
allowance budget is identical, and Phase 11 requires a small percent reduction of NO, emissions
from NO, SIP call emission levels .
Illinois EPA is proposing to participate in the federal CAIR NO, Ozone Season trading
program . Under the CAIR, states participating in the CAIR NO, Ozone Season trading program
must meet certain mandatory elements of the program, especially if the state requests automatic
approval of its SIP . SJe
40 CFR § 51 .123 . Required elements of the trading program include
the following: requiring that large electrical generating units participate in the trading program
;
requiring these units to monitor emissions as specified under 40 CFR 75, subpart H (continuous
emissions monitoring)
; requiring the units to amend their CAAPP or obtain a federally
enforceable permit covering the elements of the trading program
; requiring the source to have
one designated representative that is responsible for certifying compliance for all units
participating in all applicable CAIR trading programs and the federal Acid Rain program, if
applicable ; and requiring the designated representative to take responsibility for maintaining
records and submitting reports required under the program
.
The proposed rule includes all required elements of the trading program with respect to
37
electrical generating units and incorporates by reference 40 CFR 96, subpart AAAA (NO, Ozone
Season Trading Program General Provisions) (excluding 40 CFR §§ 96 .304, 96 .305(b)(2), and
96 .306); subpart BBBB (CAIR Designated Representative for CAIR NO, Ozone Season
Sources)
; subpart FFFF (CAIR NO, Ozone Season Allowance Tracking System) ; subpart GGGG
(CAIR NO, Ozone Season Allowance Transfers) ; and subpart HHHH (Monitoring and
Reporting)
. To implement this program, Illinois EPA is proposing to incorporate by reference
all provisions of the federal CAIR NO, Ozone Season trading program, as noted above, except
for the allocation methodology, compliance and permitting provisions
. The permits for the
CAIR NO, Ozone Season trading program will be issued by Illinois EPA to affected sources
and will include the compliance provisions .
The CAIR NO, Ozone Season trading program provides for flexibility in the areas of
applicability, CAIR NO, Ozone Season allowance allocation methodology, and the amount and
type of set-asides
. For example, USEPA stated that SIPs may include non-electric generating
units i f such units were included under the NO, SIP call trading program, and other non-covered
units may opt-in under certain circumstances . States also have discretion in determining their
CAIR NO, Ozone Season allowance allocation methodology, as long as they demonstrate they
will meet their budget .
With respect to inclusion of non-electric generating units, the CAIR provides that a state
had an ongoing obligation to continue meeting the NO, budget established for non-electric
generating units and could do so through inclusion in the CAIR NO, Ozone Season trading
program
. If such units are included, states are required to use the same NO, budget for
allocating allowances to these units that was established under the NO, SIP call
. States were not
given the option of using a more restrictive budget with respect to these units nor were states
38
allowed to include the units in the CAIR NO, Annual trading program
. Because of these criteria,
Illinois EPA has declined to include these units in the ozone season program
. Illinois needs
greater reductions on both a seasonal and annual basis from these units to attain the two new
NAAQS and meet the RACT requirements for the new NAAQS
. In the near future, Illinois EPA
is planning on proposing a rate-based rule that would result in greater NO, emissions reductions
from these units on both an annual and seasonal basis .
Both the CAIR NO, Annual and the CAIR NO, Ozone Season trading programs provide
states with the discretion of allowing "voluntary" opt-ins to these programs by sources other than
electric generating units . Units that may opt-in are limited to those that bum fossil fuel, vent all
emissions through a stack and meet the monitoring, recordkeeping and reporting requirements of
40 CFR 75 . A non-electric generating unit would have been eligible to opt into the CAIR trading
programs if they are included in a state's trading provisions
. However, the emissions rate that is
associated with the number of allowances that would be allocated to such a unit did not represent
reductions consistent with RACT or emissions reductions to meet other CAA requirements
.
Hence, Illinois EPA is not proposing to include these provisions to allow voluntary opt-ins
because they would not improve air quality
. In addition, there is an added administrative
complexity associated with implementing these provisions that did not justify their inclusion in
light of this lack of air quality benefit
.
The CAIR NO, Ozone Season trading program provides that one allowance is a limited
authorization to emit one ton of NO N
. However, these ratios will be different if there is a
violation and allowances are deducted for compliance under 40 CFR § 96
.354(b) . In addition to
retiring allowances for compliance, the allowances may also be traded, bought or sold on the
open market
. The allowance transfer deadline is November 30 after the control period .
39
Affected units will receive NO, Ozone Season allowances from Illinois EPA according to
the allowance allocation methodology discussed above . There is no inter-pollutant trading of
allowances, e.g., a CAIR NO, Ozone Season allowance may not be used instead of a CAIR S02
allowance or vice versa . As discussed below, the proposed rule takes the opportunity to use all
areas of flexibility afforded by the CAIR NO, Ozone Season trading program .
The CAIR NO, Ozone Season trading program mirrors the CAIR NO, Annual trading
program, except there are differences in control periods, transfer deadlines, and number of
allowances available for allocation, budgets, and there is no Compliance Supplement Pool under
the Ozone Season trading program . There is no difference in the budget for the CAIR NO,
ozone season and the NO x SIP call program during the first phase (2009 through 2014) ; hence,
tJSEPA did not include a Compliance Supplement Pool .
VI.
TECHNICAL FEASIBILITY AND ECONOMIC REASONABLENESS
A. SO 2 Technical FeasibilityandEconomic Reasonableness
S02 emissions from electric generating units in Illinois are regulated under the federal
Acid Rain Program Phase I and Phase II
. (Title IV of the CAA) The Acid Rain program set a
permanent cap on SO 2 that may be emitted by electric generating units nationwide at a level of
about one-half of the amount emitted in 1980 . The CAIR is expected to reduce SO 2 emissions
from these units an additional 3 .5 million tons in 2010 and by 3 .8 million tons in 2015 .
See,
Exhibit A at 25165 . In the CAIR and supporting documents, USEPA has determined that the
control techniques required for electric generating units to comply with the CAIR S02 trading
program are highly cost-effective, and are, thus, technically and economically reasonable . See,
Exhibit A at 25165 . Illinois EPA's technical staff has also analyzed the cost and impacts of the
40
interstate trading program on Illinois electric generating units .
See generally, TSD. Illinois
EPA's technical staff agrees with USEPA's assessment that large electric generating units can
meet the requirements of the CAIR S02 trading program through a combination of control
techniques such that compliance is both technically feasible and economically reasonable
.
Control techniques for reducing S0 2
emissions from new or existing fossil fuel-fired
electric generating units include physical coal cleaning to remove pyrites (inorganic sulfur
compounds)
; chemical coal cleaning to remove pyrites and organic sulfur present in coal ;
switching to either natural gas or to low sulfur western coal
; blending coal and limestone before
combustion
; dry scrubbing with limestone or lime slurry (also called spray dryer absorber)
; and
flue gas desulfurization (FGD)
.
See,
TSD 5
.1
. Coal cleaning can result in S0
2 emission
reductions ranging from 10 to 40 percent for physical coal cleaning and can result in S0
2
emission reductions ranging from 50 to 75 percent for chemical coal cleaning
. Emissions
reductions achieved through fuel substitution depend on the type of fuel, ranging from 50 to 80
percent from switching to low-sulfur coal to 98 to 100 percent from switching to natural gas
.
Emission reductions from dry S02
removal range from 60 to 85 percent for combustion of a
limestone mixture to 90 to 98 percent when spray drying is used in conjunction
. Other than fuel
switching to natural gas, the greatest emission reductions of S02 are achieved through the use of
a FGD,
ranging from 90 to 98 percent reduction, regardless of the type used
. See TSD 5.1 ..
Cost data by control techniques for S02 are summarized in the
TSD . See,
TSD 6.1 .
Costs of coal cleaning processes varies from $10
.1/ton of coal (at 35 to 70 percent pyretic sulfur
removal) to $58
.67/ton (at 99 percent pyretic sulfur and 24 to 72 percent organic sulfur removal)
.
Cost data by FGD
technology are summarized in Table 6-1 of the
TSD. Cost data for FGD
systems, expressed as electrical output, range from $7 .89 to $14
.36 mill/kWh for a lime FGD to
41
$9.72
to $63 .82 mill/kWh for magnesium oxide FGDs . See, TSD 6.1 .
In Illinois, electric utility units are currently using coal washing, blending low-sulfur
western coal with higher sulfur eastern coal, and FGDs . Blending coal with limestone is not
currently used in Illinois, but companies have submitted applications to Illinois EPA for its use at
two boilers . See, TSD 5 .1 .
The cost effectiveness of SO
2
controls for Illinois' electric generating units will be $500
to $800 (1999$) per ton of SO
2
reduced in the years 2010 through 2014, and $700 to $1200
(1999$) per ton of SO2 reduced in the year 2015 and the years thereafter . See, TSD Table 6-6 .
The 2015 costs are not based on the increment in reductions between 2010 and 2015 . Illinois
EPA relied upon the cost analyses performed by USEPA and believes that the cost effectiveness
of controls for Illinois electric generating units will be similar . See, TSD 6.3 .
B. NO,Technical Feasibilityand Economic Reasonableness
Currently NO, emissions from electric generating units are regulated in Illinois under the
federal Acid Rain Program (Title IV of the CAA), the NO, SIP Call trading program as set forth
in Subpart W of 35 Ill. Adm. Code Part 217, and a state rate-based rule set forth in Subpart V of
35 Ill . Adm. Code Part 217 . Under Phase I of the federal Acid Rain program, NO, emissions for
affected units lb/mmBtu are limited to 0 .45 lb/mmBtu and 0 .501b/mmBtu for certain existing
tangential and wall-fired boilers burning coal, respectively
. Under Phase II, NO, emissions are
limited to 0.40 and 0.46 for these boilers . The limit for cyclone-fired boilers greater than 155
MW is 0 .86 lb/mmBtu. However, in Illinois, any unit serving a generator that has a nameplate
capacity greater than 25 MWe and produces electricity for sale was required to meet a NO,
emissions limit during the ozone season of 0 .25 lb/mmBtu, beginning with the 2003 control
42
period. See, 35 Ill . Adm. Code 217, Subpart V. Under Subpart V, averaging among affected
units to demonstrate compliance with the emission limit is allowed
.
In 2000, Illinois adopted the federal NO, SIP Call trading program . An initial NO,
emission budget for electric generating units was established based on an emission rate of 0
.15
lb/mmBtu
. The program commenced with the 2004 ozone season . Sources complied with this
rule through either installation of add-on controls, or trading of NO, allowances .
For the CAIR NO,, Annual and Ozone Season programs, the allowance allocation budget
for 2009 was based on a NO, emission rate of 0 .15 lb/mmBtu and for 2015, 0 .125 lb/mmBtu .
For those sources that installed selective non-catalytic reduction (SNCR) with ammonia or urea
injection or selective catalytic reduction with ammonia (SCR) to comply with the requirements
of Subpart W (federal NO, SIP Call trading program), it is anticipated that they can meet the
requirements of the CAIR NO, Annual trading program by operating the add-on controls year
round
. Compliance with the CAR NO, Ozone Season trading program during Phase 1 (2009
through 2014 control periods) is not anticipated to require additional control measures as the
NO, allocation budget for the years 2009 through 2014 is the same in Illinois, 30,701 tons for
allocation .
However, for the annual program, sources that have not yet installed add-on controls are
anticipated to either need to install add-on control or purchase additional allowances
. USEPA
has discussed in detail the various control technologies available to reduce NO, emissions from
electric generating units . See, TSD 5 .2
. These technologies include Combustion Tuning (CT),
Burner-Out-of-Service (BOOS), Over Fire Air (OFA), Low NO, Burners (LNB), Fuel Switching
(low nitrogen coal or natural gas), Lean Flue Gas Reburn, , Selective Non-Catalytic Reduction
(SNCR) and Selective Catalytic Reduction (SCR)
. Operational modifications such as BOOS,
43
OFA, and LNB can achieve NO, reductions in a range of 10 to 25 percent for coal-fired boilers
and 30 to 50 percent for gas and oil-fired boilers . Reburning can achieve NO, reductions in a
range of 50 to 60 percent for coal-fired boilers and gas and oil-fired boilers . Fuel switching from
coal to natural gas or low nitrogen coal can achieve NO, reductions in a range of 40 to 75
percent for all types of boilers. SNCR can achieve NO, emission reductions in a range of 30 to
60 percent for all types of boilers . SCR can achieve NO,, reductions in a range of 75 to 90
percent for all types of boilers . See, TSD Table 5-2 .
Tables 6-3, 6-4, and 6-5 of the TSD summarize the range of cost effectives of the various
control options for each type and size of electric generating unit . See, TSD Tables 6-3, 6-4, and
6-5 . For the control periods 2009 through 2014, assuming the cost effectiveness values for
Illinois electric generating units are the same as that calculated by USEPA for the entire region
impacted by the CAIR, there will be no additional cost associated with complying with the CAIR
NO,, Ozone Season trading program because the Illinois' CAIR NO, Ozone Season budget
remains the same as the current NO, SIP Call budget
. For the CAIR NO, Annual trading
program, there will be an additional cost of $500 per ton to operate these controls in the non-
ozone season in 2009 through 2014 (October 1 through March 31)
. Finally, the cost
effectiveness of annual and seasonal NO, controls for Illinois electric generating units will be
$1,600 per ton of NO, reduced in 2015 and thereafter . See, TSD 6.3
.
Finally, Illinois EPA utilized the Integrated Planning Model (IPM) to evaluate the
economic impact of the CASA and NUSA provisions included in this proposal . While Illinois
EPA is proposing to reduce the number of NO, allowances available for direct allocation to
existing electric generating units, IPM modeling has shown that the reduction of allowances only
minimally increases the costs discussed above
. It is important to note that while 25 percent of
44
the allowances are being used for this set-asides, existing units are eligible to apply for these
allowances for free if they install air pollution controls, build clean units, or implement other
energy conserving or renewable energy projects
. The IPM modeling did not address the
potential use of any CASA allowances for the existing electric generating units and thus
represents the worst-case scenario
; it is, however, far more likely that future projects will be
eligible for CASA use and thus further reduce cost
. The CASA and NUSA will provide
important public benefits in terms of encouraging energy efficiency, renewable energy, cleaner
energy, and clean coal technology projects
.
C. Projected
Retail Electricity Prices
Retail electricity prices for the CAIR region are projected to increase minimally with the
implementation of the CAIR
. Trading allows electric generating units to meet the requirements
of the CAIR in the most cost-effective manner, thus minimizing the costs passed onto
consumers
. Regional retail electricity prices are projected to be two to three percent higher with
the CAIR. By 2020,
CAIR regional retail electricity prices are projected to be 1
.8 percent
higher
. In Illinois, the retail electricity prices are projected to increase
2 .6 percent in 2010 and
4 .3 percent in
2015 from implementation of the CAIR
. However, by 2020,
rates are expected to
decrease 2 .6 percent, to a net increase of
1 .7 percent. See, TSD 6.4 .
Illinois EPA also conducted additional modeling to determine the cost impact of the
25
percent CASA and five percent NUSA on electricity rates
. The modeling results project that
retail electricity rates will not change, and there was a slight change in average production costs
.
See,
TSD Table 7.6 .
Based on the federal documents on CAIR NO, and SO
2
control technology
costs and applications, and NO, and S02 removal effectiveness, as well as the results of the IPM
45
modeling runs, Illinois EPA believes that compliance with this proposal is both technically
feasible and economically reasonable
.
VII.
COMMUNICATION WITH INTERESTED PARTIES
These new Subparts are being proposed after representatives of regulated sources and
environmental groups have had an opportunity to review the proposal, discuss issues and provide
comments to Illinois EPA
. See, Exhibit H . Illinois EPA held weekly outreach meetings January
24, January 31, February 7, February 14, February 21, and February 28, 2006
. In addition, the
Illinois EPA offered to meet with smaller groups or individual power plants at their request
. No
requests were received
. Illinois EPA received numerous comments from regulated sources and
environmental groups
. There were few if any comments on the S0
2
portions of the proposal
; the
comments by and large concerned the NO, NUSA and CASA
. Although there is agreement on a
number of issues, some of the regulated sources do not agree with Illinois EPA's approach for
allocations based on gross electrical output or the amount of the set-asides, although the
environmental groups are generally supportive . Notably, the representatives of the power plants
do not necessarily agree among themselves as to whether allowances should be allocated on heat
input or gross electrical output or the amount of the set-asides . Points of agreement and
disagreement are discussed below .
Illinois EPA believes that the proposal represents a sound approach in those areas of
discretion provided in the CAIR NO, Annual trading program and the CAIR NO, Ozone Season
program
. As discussed above, Illinois EPA has little flexibility as to the implementation of the
CAIR S02 trading program, and has proposed to adopt the CAIR SO
2 trading program as
provided by USEPA
. Illinois EPA is not electing to propose inclusion of opt-in units, as the
46
Illinois EPA intends to separately propose regulations for the SO
2
and NO, emissions from
sources other than the electric generating units
. With respect to the CAIR NO, Annual trading
program and the CAIR NO, Ozone Season trading program, Illinois EPA notes that as long as
the state-wide emissions budgets are met, Illinois may, within the areas of flexibility made
available in the CAIR, approach these rules in the manner it believes will best serve the interests
of the State and its citizens .
A. Allocation Methodology
Illinois EPA received several comments with respect to using gross electrical output data,
the shortness of the look-back period for determining allocations, treatment of retired units, and
whether allowances should be sold .
Several commenters expressed a concern about whether
gross electrical output data would be available for determining allocations
. The proposal
requires that owners and operators of affected units install wattmeters and provide gross
electrical data to Illinois EPA on a quarterly basis
. However, Illinois EPA modified its initial
proposal to provide that where owners and operators do not have gross electrical output data for
the initial look-back period, heat input data will be used for the allocations for these first three
control periods
. For the allocations that Illinois EPA will make in October 2009 for control
period 2012, it is proposing to use gross electric output data from 2007 and 2008 as reported to
Illinois EPA no later than July 31, 2009
.
Another commenter expressed a concern that a two year look-back period was too short
to take into account outages for maintenance
. In response to this comment, Illinois EPA changed
the initial lookback period for the 2009, 2010, and 2011 control periods from using data only
from 2004 and 2005, to allowing the use of data from the three highest control periods of 2001
47
through 2005, as companies did not have an opportunity to plan for the first allocation when
scheduling outages . With respect to future allocations, the allocations will balance out . Because
allocations are made annually and with a shorter look-back period, if a company has a planned
outage in one control period, it will need and will receive fewer allowances for that control
period, and since the company should have received allowances for that future outage year based
on a higher rate of operation, it should have excess banked allowances from the outage year that
it can use for the allocation year that reflects the prior outage . This is the benefit of using a short
look back period as low and high usage years are more quickly accounted for .
A third commenter was concerned that sources that had installed pollution controls would
be penalized if their efficiency was reduced. While efficiency may be lower with certain types
of pollution controls, the reduction in emissions from the control equipment and the need for
fewer allowances more than compensates for the loss in efficiency . Further, additional
allowances are available from the CASA to sources that upgrade or install new pollution control
equipment.
A fourth commenter requested that retired units receive permanent allocations as
provided for in the federal Acid Rain program and USEPA's proposed allocation scheme for the
CAIR trading programs. Illinois EPA declined to adopt this request it in favor of having
additional allowances available to units that are operating and need the allowances for
compliance . The allocation does provide a glide path for retired units, as they will receive an
allocation for approximately four years after the last year of operation . For example, a unit that
ceases operation in 2010 would receive its last allocation in 2014 .
Finally, a commentor requested that the allowances be auctioned or sold rather than
distributed for no charge
. Illinois EPA considered this approach but rejected it as the allowances
48
would have gone to the sources with the "deepest pockets" rather than those that provided power
with lower emissions and higher efficiency . One of the purposes of this proposal is furthering
energy efficiency and conservation and renewable energy projects, encouraging a more diverse
universe of energy producers .
B. NewUnit Set-Aside (NUSA)
Illinois EPA has received several comments concerning NUSA
. One commenter
preferred a smaller set-aside of two percent (as opposed to the five percent proposed) and that
allocations be based on a permit limit, questioned the basis for 1 .0 lb/MWh, and objected to the
retirement of allowances if the NUSA is undersubscribed . Note, unlike the NO,, SIP Call, the
recommended set-aside for new units under the CAIR is three percent not two percent . Another
commenter raised a concern that the number of allowances in the NUSA prior to retirement was
too small.
Illinois EPA believes that a five percent NUSA is appropriate for Illinois . We currently
have a number of proposed projects that would, if any one of them were to proceed, need about
two-thirds of the NUSA . In addition, unlike the NO, SIP Call where the trading budget
remained unchanged, the CAIR NO,, Annual and Ozone Season budgets are reduced by a small
percent beginning in the 2015 control period . The 1 lb/MWh limit is based upon the average
efficiency for a boiler of 33 percent times 3 .413 mmBtu/MWh .
Initially, Illinois EPA proposed that the allowances that are not allocated from the NUSA
be allowed to accrue for two control periods . However, one commentor requested that the
accrual be five times the amount designated for a given control period, because of the number of
new projects projected for the coming years . Illinois EPA revised its proposal to raise the
49
accrual number from twice the designated number per control period to five times the designated
number of allowances .
Illinois EPA believes that retirement of unused allowances is appropriate after the NUSA
has accumulated five years worth of allowances
. Retirement of allowances, as discussed, above
will further air quality goals and assist Illinois in meeting CAA requirements for rate-of-
progress, attainment, and maintenance requirements .
C. Clean Air Set-Aside (CASA)
Illinois EPA has received a number of comments concerning the size of the CASA . One
commenter objected to the size of the CASA stating that no information has been provided that
justifies a CASA of this magnitude, it is an attainment measure that should be included in
another rulemaking, and that it equates to an emission rate during Phase I of 0 .1 lb/mmBtu and
lower during Phase 11 . Another commenter asked if any other state had proposed a set-aside of
25 percent for energy efficiency, renewable energy, and clean technology projects . Another
commenter questioned that as long as the allowances in the CASA are available for interstate
trading, how air quality in Illinois will be improved .
With respect to whether creating the CASA will improve air quality, extensive modeling
analysis has shown that Illinois will need to go significantly beyond the CAIR NO, and SO2
reductions to attain the PM 2.5 and 8-hour ozone NAAQS . See, TSD 3 .2 . This set-aside, if
unused, can be part of a larger plan to reach attainment . While it is true that the size of the set-
aside does not equate to an equal amount of reduction, it will lead to an improvement in air
quality as it will encourage more efficient and cleaner operating technologies to enter the market
place. The flexibility under the CAIR allows Illinois EPA to use set-asides as a tool to promote
50
energy demand reductions and greener energy generation, while helping to meet attainment
.
Illinois EPA believes that demand for energy will increase, hence to ensure that there is a
commensurate air quality improvement there must be a reduction in demand from energy from
fossil fuel-fired plants, and an increase in renewable energy sources .
With respect to the size of CASA, the proposal designates
12 percent of the CAIR NO,
Annual and the CAIR NO, Ozone Season budgets toward energy efficiency and renewable
projects
. Illinois EPA believes that the 12
percent set-aside is both consistent with USEPA's
guidance and with Section 9
.10 of the Act which provides that five percent of the State's energy
production by 2010
and 15 percent of the State's energy production by
2020 should come from
renewable energy,
e .g ., wind, biomass . The remaining
13 percent of the CASA is to encourage
the adoption by existing electric generating units to install air pollution control equipment, to use
cleaner technology, to operate more efficiently, and for the early adoption of any of the projects
listed in CASA (prior to calendar year 2013) .
D . Compliance Supplement Pool
Illinois EPA received comments from affected sources objecting to the retirement of the
CAR NO, Annual trading program Compliance Supplement Pool and comments from an
environmental group supporting the retirement of the Compliance Supplement Pool
. The
commenter for the affected sources indicated that allowances have a value to the sources of 28
million dollars
. Illinois EPA has presented modeling indicating that neither the greater Chicago
nor Metro-East nonattainment areas will attain the PM2,5 NAAQS by the attainment dates nor
will the greater Chicago area attain the 8-hour ozone NAAQS by the attainment date
. Moreover
these areas will not reach attainment in 2018, 3'/z
years after the implementation of Phase II of
51
the CAIR S02 and NO, trading programs . See, TSD 3 .2. Illinois will need between 30 and 35
percent reductions of NO, beyond the CAIR to achieve the current PM 2.5 NAAQS . As was
discussed above, controls for electric generating units and turbines are highly cost effective,
hence, this is where reductions are being sought .
One commenter suggested the set-asides only be used if modeling shows an air quality
benefit from these set-asides . A modeling demonstration would not be particularly instructive in
this instance. The effect of emissions reductions are incremental and no measure alone will
assure attainment
. In addition to controls on electric generating units, Illinois EPA is
considering, in addition to controlling NO, emissions of large internal combustion engines, also
controlling NO,, emissions from smaller engines and turbines, adopting NO, RACT type
emission requirements statewide for a number of source categories, adopting more stringent
volatile organic material (VOM) limits for several categories and adding new categories,
tightening the Emission Reduction Market System program, and adopting S0
2
RACT . At this
point in time, the Illinois EPA intends to pursue these rulemakings before it seeks additional
reductions in S0
2
or NO, from electric generating units and while the State participates in a
super-regional dialogue with LADCO and OTC states in a beyond
- the CAIR strategy for
electric generating units for the super-region
. However, we note that controlling NO, emissions
from electric generating units remains by far the most cost effective control measure .
VIII.
ILLINOIS EPA'S PROPOSAL
SubpartA: General Provisions:
Section 225 .100 SeverabilitV
This section states that finding a Section, subsection or clause of Part 225 invalid does
not affect the validity of the Part as a whole or any other Section, subsection or clause .
52
Section 225 .120
Abbreviations and Acronyms
Illinois EPA proposes adding a section listing the abbreviations and acronyms used in the
Part.
Section 225 .130 Definitions
Illinois EPA proposes adding a section listing the definitions used in the Part
. There are
additional definitions that apply in Part 211 and 40 CFR 96
. Illinois EPA believes that it is not
appropriate to include these definitions in Part 211 because they only apply to the provisions in
Part 225 .
Boiler This definition is identical to the definition of
boiler in the CAIR NO, Annual, the
CAIR SO2
, and the CAIR NO, Ozone Season trading programs, 40 CFR § § 96
.102, 96 .202, and
96.302, respectively.
Bottoming-cycle cogeneration unit :
This definition is identical to the definition of
bottoming-cycle unit in the CAIR NO, Annual, the CAIR SO
2, and the CAIR NO, Ozone Season
trading programs, 40 CFR §§ 96 .102, 96 .202, and 96.302,
respectively.
CAIR authorized account representative :
This definition is consistent with the definition
of CAIR authorized account representative
in the CAIR NO, Annual, the CAIR SO 2
, and the
CAIR NO, Ozone Season trading programs, 40 CFR §§ 96 .102, 96
.202, and 96 .302,
respectively
. This is the natural person authorized to transfer or dispose of allowances from a
general account .
CAIR designated representative :
This definition is consistent with the definition of CAIR
designated representative
in the CAIR NO, Annual, the CAIR SO 2,
and the CAIR NO, Ozone
53
Season trading programs, 40 CFR §§ 96
.102, 96.202, and 96.302, respectively. If the source is
required to comply with the requirements of all three programs, the same natural person must be
the designated representative
. In addition, if the unit is subject to the federal Acid Rain program,
then their representative for the federal Acid Rain program must be the same natural person as
for the CAIR trading programs .
CAIR NO coin liance account : This definition applies only to Subparts D and E of this
Part, and is consistent with the definition for CAIR NO compliance account in the CAIR NO,
Annual and the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96
.102 and 96.302,
respectively
.
CAIR Trading Programs : This definition is consistent with the definition of CAIR
Trading Programs
in the CAIR NO, Annual, the CAIR SO 2, the CAIR NO, Ozone Season
trading programs, 40 CFR §§ 96 .102, 96 .202, and 96 .302, respectively.
Coal-fired : This definition is consistent with the definition of coal-fired in the CAIR NO,
Annual, the CAIR
SO2,
the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96 .102,
96 .202, and 96 .302, respectively. For the purposes of Subparts D and E of this proposal, this
definition is used to determine which fuel weighting factor should be used for certain allocations
of CAIR NO, allowances .
Cogeneration unit : This definition is identical to the definition of cogeneration unit in
the CAIR NO, Annual, the CAIR SO2, the CAIR NO, Ozone Season trading programs, 40 CFR
§§ 96.102, 96.202, and 96 .302, respectively.
Combined-cycle system : This definition is identical to the definition for combined-cycle
system in 35 111. Adm . Code 211 .312, and describes a type of emission unit subject to the
proposal.
54
Combustion turbine : This definition is identical to the definition of
combustion turbine
in the CAIR NO, Annual, the CAIR SO2,
the CAIR NO, Ozone Season trading programs, 40
CFR §§ 96 .102, 96
.202, and 96.302, respectively.
Commence commercial operation:
This definition is the substantially identical to the
definition for
commence commercial operation in the CAIR NO, Annual, the CAIR SO
2, the
CAR NO, Ozone Season trading programs, 40 CFR §§ 96
.102, 96.202,
and 96 .302,
respectively . The only difference is that the provisions pertaining to opt-in units are not
included, because provisions for opt-in units are not included in Illinois' proposal
. This
definition, however, is different from the definition for
commence commercial operation that is
found in 35 Ill. Adm
. Code 211 for the NO, SIP Call trading Program
. Under the CAIR, the
treatment of replacement units has changed, instead of retaining the commencement date of the
old unit that it has replaced, the replacement unit's commencement date is the date that it begins
generating electricity for sale
.
Commence operation :
This definition is the substantially identical to the definition for
commence operation
in the CAIR NO, Annual, the CAIR SO2,
the CAIR NO, Ozone Season
trading programs, 40 CFR §§ 96
.102, 96 .202, and 96.302, respectively
. The only difference is
the provisions pertaining to opt-in units are not included, because such units are not included in
Illinois' proposal
. This definition, however, is different from the definition for
commence
operation
that is found in 35 Ill . Adm
. Code 211 for the NO, SIP Call trading Program . Under
the CAIR, the treatment of replacement units has changed, instead of retaining the
commencement date of the old unit that it has replaced, the replacement unit's commencement
date is the date when it begins any process .
Common stack :
This definition is identical to the definition of
common stack in the
55
CAIR NO, Annual, the CAIR SO2, the CAIR NO, Ozone Season trading programs, 40 CFR §§
96 .102, 96.202,
and 96.302, respectively.
Control period : This definition is consistent with the definition of control period
in the
CAR NO, Annual, the CAIR SO2, the CAIR NO, Ozone Season trading programs, 40 CFR §§
96.102, 96.202, and 96.302, respectively.
Electric generating unit : This definition has been included in the proposal for clarity and
defines which units may be affected by the provisions of Subparts C, D, and E .
Fossil fuel : This definition is identical to the definition of fossil fuel in the CAIR NO,
Annual, the CAIR
SO2,
the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96 .102,
96.202, and 96 .302, respectively . The term is used in distinguishing the type of electrical
generating units that are subject to the proposal .
Fossil fuel-fired: This definition is identical to the definition offossil fuel-fired
in the
CAIR NO, Annual, the CAIR SO
2, the CAIR NO, Ozone Season trading programs, 40 CFR §§
96.102, 96 .202, and 96
.302, respectively.
Generator: This definition is identical to the definition ofgenerator
in the CAIR NO,
Annual, the CAIR SO2
, the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96 .102,
96 .202, and 96 .302, respectively . This term is used to set the applicability thresholds for
electrical generating units that are subject to the proposal
.
Gross electrical output : This definition has been included to define the way in which
electrical output will be quantified for determining certain the CAIR NO, allocations .
Heat input:
This definition is identical to the definition of heat input in the CAIR NO,
Annual, the CAIR SO2, the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96 .102,
96.202, and 96 .302, respectively
. It is the gross heating value of the fuel combusted in a
56
combustion device
. However, this definition is different from the definition for
heat input in 35
Ill
. Adm
. Code 211 for the NO, SIP Call trading Program
. Under the CAIR, the definition was
amended to require that heat input data being used be determined by USEPA in accordance with
40 CFR 96, based on information provided to USEPA by the affected sources
.
Higher heating value (HHV)
:
This definition is used to specify the manner in which heat
content of a fuel is to be measured when determining the rated efficiency of a unit
.
Integrated gasification combined-cycle (IGCC) system
:
This definition describes a
particular type of clean coal electric utility steam-generating unit that may be subject to the
proposal and may be eligible for allowances from the CASA
.
Nameplate capacity :
This definition is identical to the definition for
nameplate capacity
in the CAIR NO, Annual, the CAIR SO 2,
the CAIR NO, Ozone Season trading programs, 40
CFR §§ 96 .102, 96 .202, and 96
.302, respectively
. However, this definition is different from the
definition for nameplate capacity in 35 Ill
. Adm. Code 211 for the NO x
SIP Call trading
Program, in that the definition provides that the manufacturer's original nameplate designation
may be adjusted for units that are derated or whose capacity is expanded
.
Oil-fired:
This definition is identical to the definition of
oil-fired in the CAIR NO,
Annual and the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96
.102 and 96 .302,
respectively
. This term is used to determine the fuel-weighting factor for the CAIR NO,
allocations.
Potential electrical output capacity
:
This definition is identical to the definition of
potential electrical output capacity
in the CAIR NO, Annual, the CAIR SO2,
the CAIR NO,
Ozone Season trading programs, 40 CFR §§ 96
.102, 96 .202, and 96
.302, respectively. It is used
in part to distinguish cogeneration units that are subject to the proposal from units that are not
57
subject to the proposal.
Project sponsor :
This definition is generally describes the persons who may apply for an
allocation from the CASA.
Rated-energy efficiency : This definition is used for determining whether certain units are
eligible to apply for an allocation from the CASA for highly efficient electrical generation
.
Repowering: This definition is identical to the definition of repowering
in the CAIR NO,
Annual, the CATR SO 2, the CAIR NO, Ozone Season trading programs, 40 CFR §§ 96 .102,
96.202, and 96 .302, respectively. This term is used for determining the date that certain units
commence operation or commence commercial operation.
Total energy output : This definition is identical to the definition of total energy output
in
the CAR NO, Annual, the CAIR SO
2
, the CAIR NO, Ozone Season trading programs, 40 CFR
§§ 96.102, 96 .202, and 96 .302, respectively
. This term is used for determining allocations for
cogeneration units under Subparts D and E .
Useful thermal output : This definition is identical to the definition of
useful thermal
output
in the CAIR NO, Annual, the CAIR
SO2,
the CAIR NO, Ozone Season trading programs,
40 CFR §§ 96
.102, 96 .202, and 96 .302, respectively. This term is used for determining a portion
of the allocations for cogeneration units
.
Section 225 .140 Incorporationsby Reference
Illinois EPA proposes to add Section 217
.140 to incorporate by reference portions of the
CAIR SO2, and the CAIR NO, Annual and the CAIR NO, Ozone Season trading programs, 40
CFR 96, subparts AAA (excluding §§ 96 . 204 and 96
.206), BBB, FFF, GGG and HHH (2005) ;
40 CFR 96, subpart AA (excluding 40 CFR §§ 96 .104, 96.105(b)(2),
and 96 .106), subpart BB,
58
subpart FF, subpart GG, and subpart HH
. (2005), and 40 CFR 96, subpart AAAA (excluding 40
CFR §§ 96 .304, 96
.305(b)(2), and 96
.306), subpart BBBB, subpart FFFF, subpart GGGG, and
subpart HHHH
. (2005), respectively
. In addition, Illinois EPA proposes to add 40 CFR 75 and
78 .
The general provisions for the CAIR NO, Annual trading program, the CAIR S02
trading program, and the CAIR NO, Ozone Season trading program, are set forth in Subparts
AA, AAA, and AAAA, respectively
. These Subparts cover the general provisions of the rule,
including the purpose, definitions, abbreviations, applicability, retired units, standard
requirements, computation of time, and appeal procedures
. 40 CFR §§ 96
.104, 96 .106,
96.105(b)(2), 96
.204, 96 .206, and 96
.305(b)(2), have been excluded . 40 CFR §§ 96
.104, 96.204,
and 96
.304, which address applicability, are excluded from this proposal as this is an area where
states had flexibility to expand to scope of sources to be included in the CAIR NOx
trading
programs
. At a minimum, however, states' programs must include electric generating units
serving a generator greater than 25 MWe
. Illinois EPA's proposal also excludes 40 CFR §§
96.105(b)
and 96
.305(b), as it has the discretion to determine allocations for the CAIR NO,
trading programs and this subsection would give a retired unit a permanent CAIR NO
x
allocation
. Illinois EPA's allocation scheme, as proposed, limits allocations to the CAIR NO
.,
units that have gross output data from the control period or periods four to five years prior to the
applicable year
. Illinois EPA's proposal also excludes 40 CFR §§ 96
.106, 96 .206, and 96.306
that address the standard requirements, as the proposal includes these requirements with the
corresponding Illinois references
.
Subparts BB, BBB, and BBBB of 40 CFR 96 cover the requirement to have a designated
representative to handle the transfer of allowances for the CAIR NO, Annual trading program,
59
the CAIR SO2 trading program, and the CAIR NO, Ozone Season trading program, respectively .
Subparts FF, FFF, and FFFF of 40 CFR 96 address the CAIR allowance tracking systems for the
CAIR NO, Annual trading program, the CAIR SO 2 trading program, and the CAIR NO, Ozone
Season trading program, respectively . Subparts GG, GGG, and GGGG of 40 CFR 96, address
the mechanism for transfers of allowances for the CAIR NO, Annual trading program, the CAIR
SO2 trading program, and the CAIR NO, Ozone Season trading program, respectively
. Subparts
HH, HHH, and HHHH of 40 CFR 96 set forth the monitoring and reporting requirements for the
CAIR NO. Annual trading program, the CAIR SO2 trading program, and the CAIR NO, Ozone
Season trading program, respectively .
Part 75 of Title 40 of the Code of Federal Regulations addresses continuous emissions
monitoring systems (CEMS), which is required of all the CAIR NO, and the CAIR
SO2 units
subject to these trading programs . Subpart A contains general provisions
. Subpart B contains
specific monitoring provisions and Subpart C sets forth operation and maintenance requirements
for CEMS. Subpart D contains missing data substitution procedures, and Subpart E sets forth
criteria for alternative monitoring systems . Subparts F and G cover recordkeeping and reporting,
and Subpart H contains the NO, mass emissions provisions .
Part 78 of Title 40 of the Code of Federal Regulations addresses the types of actions by
USEPA that sources may appeal, including the deduction of allowances, transfer of allowances
between accounts, correction of an error, finalization of control period emissions data, and
approval or disapproval of a monitoring petition
. These provisions apply to all three CAIR
trading programs .
Subpart C : CAIR SO2 Trading Program
60
Section
225.300 Purpose
Illinois EPA proposes to add new Subpart C that implements the CAIR SO
2
trading
program, 40 CFR 96, to control the emissions of SO2 from affected electrical generating units
annually beginning in 2010 (January 1 through December 31 of each year)
.
Section225.305 Applicability
This Section addresses the applicability of Subpart C
. Subsection (a) provides that the
Subpart applies to all fossil fuel-fired stationary boilers, combustion turbines or combined cycle
systems, serving a generator having a nameplate capacity exceeding 25 MWe if such electricity
is sold, excluding industrial boilers listed 35 Ill . Adm. Code 217 .Appendix C . Subsection (b)(1)
exempts cogeneration units if it meets the definition for a cogeneration unit and limits its
electrical output. Subsection (b)(1) further provides that the January 1 after which a unit no
longer qualifies a cogeneration unit it becomes subject to the requirements of this Subpart.
Subsection (b)(2) exempts solid waste incineration units (SWI) that began operation after
January 1, 1985, meet the definition of SWI in Section 129(g) of the CAA [42 U .S.C
. 7429(g)],
and have an average fuel consumption of non-fossil fuel exceeding 80 percent of its total fuel
.
Subsection (b)(2) further provides that the January 1 after a SWI unit no longer meets these
requirements and consumes more than 20 percent fossil fuel, it will be subject to the
requirements of this Subpart .
Section225.310 Compliance Requirements
This Section specifies the compliance requirements for affected units
. Subsection (a)
provides that affected units must comply with this Subpart as well as with certain provisions of
61
40 CFR 96 (previously described) . Subsection
(b), which addresses permit requirements, states
that the owner or operator of each source that has one or more affected units at the source must
submit a complete application meeting the requirements of Section 225 .320 for a "CAIR SO2
permit" from Illinois EPA
. The permit must have federally enforceable conditions covering the
CAIR SO2 trading program and must satisfy the permitting requirements elsewhere in this
Subpart. Subsection (b) also requires the owner or operator to operate the affected unit or units
in compliance with the CAIR SO 2 permit
.
Subsection (c) addresses monitoring requirements . It requires the owner or operator to
comply with the monitoring requirements of 40 CFR 75 (continuous emissions monitoring) and
requires the designated representative to comply with the monitoring compliance certification
and reporting requirements of 40 CFR 96, subpart HH, applicable to designated representatives.
Subsection (c) also provides that compliance of each affected unit with the CAIR S0 2 emissions
limitations will be determined pursuant to 40 CFR 96, subpart HHH .
Subsection (d) addresses emissions requirements . These include requiring the designated
representative to hold sufficient CAIR SO2
allowances for compliance deduction in the CAIR
Systems Tracking account by March 31 of each year ; determining when the affected unit is
subject to the monitoring and emissions requirements ; providing for automatic amendment of an
affected unit's CAIR SO2 permit when USEPA records the allocation, transfer, or deduction of
an allowance
; and prohibiting an allowance from being used for a control period before the year
for which the allowance is allocated .
Subsection (e) requires the owner or operator to retain certain documents, as follows : the
account certificate of designated representative, which is a certification made by the designated
representative, and supporting documentation which must be kept on site until superceded by a
62
new representation certificate that changes the designated representative
; all emission monitoring
information required to be maintained by 40 CFR 96, subpart HHH
; copies of all reports
compliance certifications, and other submissions and all records made or required under the
CAM SO2
trading program or necessary to demonstrate compliance with the program's
requirements
; and copies of documents used to complete a CAIR SO
2
permit application and any
other submission under the CAIR SO2 trading program
.
Subsection (f) contains the provisions governing liability
. These include providing that a
budget permit revision will not excuse a violation
; that any provision that applies to an affected
source also apply to the owner or operator of the affected source
; that the owner, operator, and
designated representative of one affected unit are not liable for any violation by any other
affected unit of which they are not an owner, operator or designated representative, except with
respect to requirements for affected units with a common stack
; and procedures to be followed
by the designated representative of an affected unit when the unit has excess emissions in a
control period .
Section 225 .315 Appeal
Procedures
This Section sets forth the procedures of decisions by USEPA under the CAIR SO2
trading program
. These decisions include errors posting allowances to accounts or
determinations of control period emissions data
. Such decisions may be appealed pursuant to the
procedures in 40 CFR 78
. The procedures are the same for all three CAIR trading programs
.
Section 225
.320 Permit Requirements
This Section sets forth permitting requirements for affected units
. Subsection (a) requires
63
each owner or operator of each source with an affected unit to submit a complete the CAIR S0
2
permit application, including all applicable CAIR
SO2 trading program requirements
. The CAIR
S02
permit must contain federally enforceable conditions that apply to each affected unit and
provide that the CAIR
S02
permit is a complete and segregable portion of the source's entire
permit. Subsection (a) also prohibits the issuance of a CAIR S0
2 permit and the establishment
of the CAIR SO2 compliance account, until Illinois EPA and USEPA have received a complete
"certificate of representation" for the designated representative
.
Subsection (b) covers the CAIR SO2
permit applications
. It requires the owner or
operator to submit to Illinois EPA a complete CAIR SO2
permit application within the applicable
time frames and to reapply for a CAIR
SO2 permit as required by this proposed Subpart and the
Act
. Subsection (b) also sets forth the following elements required for the CAIR SO
2
permit
applications
: identification of the source, identification of each affected unit at the source,
compliance requirements and monitoring requirements of this Subpart
.
Section 225
.325 Trading Program
Section 225
.325 sets forth USEPA's CAIR SO2
allowance allocations for each control
period pertaining to the CAIR SO2
trading program
. Subsection (a) provides that USEPA will
allocate allowances pursuant to the federal Acid Rain program
. Subsection (b) provides that a
CAIR SO2
allowance is a limited authorization to emit
SO2
during the calendar year that it is
allocated and future control periods
. It also provides the retirement ratios for SO2
allowances,
i .e.,
the number of allowances that must be retired for each ton of SO
2 emissions, in different
control periods .
64
Subpart D:
CAIR NO, AnnualTrading Program
Section225.400
Purpose
Illinois EPA proposes to add new Subpart D to control NO
. emissions from affected
electrical generating units during the annual control period (January 1 through December
31 of
each year) by implementing the CAIR NO, Annual trading program, 40 CFR
96,
and setting
forth provisions for allocation of the CAIR NO, allowances
.
Section225.405 Applicability
This Section is substantially identical to Section
225 .305 .
Section225.410
Compliance Requirements
This Section specifies the compliance requirements
. Subsection (a) provides that affected
units must comply with this Subpart as well as with certain provisions of 40 CFR
96 (previously
described)
. Subsection (b),
which addresses permit requirements, states that the owner or
operator of each source that has one or more affected units at the source must submit a complete
application meeting the requirements of Section
225.430
for a "CAIR NO, permit" from Illinois
EPA
. The permit must have federally enforceable conditions covering the CAIR NO, Annual
trading program and must satisfy the permitting requirements elsewhere in this Subpart
.
Subsection (b) also requires the owner or operator to operate the affected unit or units in
compliance with the CAIR NO, permit
.
Subsection (c) addresses monitoring requirements
. It requires the owner or operator to
comply with the monitoring requirements of 40 CFR
75
(continuous emissions monitoring) and
requires the designated representative to comply with the monitoring compliance certification
65
and reporting requirements of 40 CFR 96, subpart HH, applicable to designated representatives
.
In addition, designated representatives are required to comply with the requirements of Section
225 .450 for monitoring, reporting, and recordkeeping of gross electrical output and useful
thermal energy, where applicable . Subsection (c) also provides that compliance of each affected
unit with the emissions limitations will be determined pursuant to 40 CFR 96, subpart HH .
Subsection (d) addresses emissions requirements
. These include requiring the designated
representative to hold sufficient CAIR NO, Annual allowances for compliance deduction in the
CAIR NO, Annual compliance account by March 31 of each year ; determining when the
affected un is subject to the monitoring and emissions requirements ; providing for automatic
amendment of an affected unit's CAIR NO, Annual permit when USEPA records the allocation,
transfer, or deduction of an allowance
; and prohibiting an allowance from being used for a
control period before the year for which the allowance is allocated .
Subsection (e) requires the owner or operator to retain certain documents, as follows : the
account certificate of designated representative, which is a certification made by the designated
representative, and supporting documentation which must be kept on site until superceded by a
new representation certificate that changes the designated representative ; all emission monitor ng
information required to be maintained by 40 CFR 96, subpart HH
; copies of all reports
compliance certifications, and other submissions and all records made or required under the
CAIR NO, Annual trading program or necessary to demonstrate compliance with the program's
requirements ; copies of documents used to complete a CAIR NO, permit application and any
other submission under the CAIR NO, Annual trading program ; as well as all gross electrical
output and useful thermal energy, as applicable, that is required to be maintained by Section
217.450 .
66
Subsection (f) contains the provisions governing liability
. These include providing that a
revision to a CAIR NO, Permit will not excuse a violation ; that any provision that applies to an
affected source also applies to the owner or operator of the affected source
; that the owner,
operator, and designated representative of one affected unit are not liable for any violation by
any other affected unit of which they are not an owner, operator or designated representative,
except with respect to requirements for affected units with a common stack
; and procedures to be
followed by the designated representative of an affected unit when the unit has excess emissions
in a control period .
Section 225 .415 Appeal Procedures
This Section is identical to Section 225 .315 .
Section 225 .420 Permitting
Requirements
This Section sets forth the permitting requirements for affected units . Subsection (a)
requires each owner or operator of each source with an affected unit to submit a complete the
CAIR NO, permit application, including all applicable CAIR NO, Annual trading program
requirements
. The CAIR NO,, permit must contain federally enforceable conditions that apply to
each affected unit and provide that the CAIR NO, permit is a complete and segregable portion of
the source's entire permit
. Subsection (a) also prohibits the issuance of a CAR NO, permit and
the establishment of the CAIR NO, Annual Compliance account, until Illinois EPA and USEPA
have received a complete "certificate of representation" for the designated representative
.
Subsection (b) covers the CAIR NO, permit applications
. It requires the owner or
operator to submit to Illinois EPA a complete CAIR NO, permit application within the
67
applicable time frames and to reapply for a CAIR NO, permit as required by this proposed
Subpart and the Act
. Subsection (b) also sets forth the following elements required for the CAIR
NO, permit applications
: identification of the source, identification of each affected unit at the
source ; and compliance and monitoring requirements of this Subpart .
Section 225 .425 Annual Trading Budget
Subsection (a) of this Section provides that the total base CAIR NO, Annual trading
budget for control periods 2009 through 2014 is 76,230 tons of NO, emissions or 76,230 NO,
Annual allowances
. This subsection also provides that 30 percent of the budget will be allocated
to set-asides, making 53,361 allowances available for routine allocation to existing units for each
control period . Subsection (a) also provides that five percent of the CAIR NO, Annual trading
budget will be assigned to the new unit set-aside (NUSA) . Twenty-five percent of the CAIR
NOx Annual trading budget will be assigned to the CASA .
Subsection (b) of this Section provides that the total base CAIR NOx Annual trading
budget for control period 2015 and thereafter is 63,525 tons of NO, emissions . This subsection
also provides that 30 percent of the budget will be allocated to set-asides, making 44,468
allowances available for routine allocation to existing units for each control period . Subsection
(b) also provides that five percent of the CAIR NO x Annual trading budget will be assigned to
the NUSA. Twenty-five percent of the CAIR NO, Annual trading budget will be assigned to the
CASA .
Subsection (c) authorizes Illinois EPA to adjust the total base CAIR NO, Annual trading
budget appropriately, if USEPA subsequently makes adjustments to this budget .
68
Section 225 .430 Timingfor
Annual Allocations
This Section provides the dates that Illinois EPA will submit the CAIR NO, Annual
allocations to USEPA
. Subsection (a) provides that allocations for control periods 2009, 2010,
and 2011 to existing affected units will be submitted by Illinois EPA to USEPA by October 31,
2006. Subsection (b) provides that by October 31, 2009, and every October thereafter, Illinois
EPA will submit allocations for existing affected units for the control period three years after the
date of submission . For example, in 2009, Illinois EPA will make allocations for 2012, and in
2010, Illinois EPA will make allocations for 2013, and so on
. Subsection (c) provides that
allocations from the NUSA will be made by February 15 in the year after the applicable control
period
. Subsection (d) provides that the allocations from the CASA will be made by December 1
in the year after the applicable control period .
Section 225 .435 Methodology
for Calculating Annual Allocations
This Section provides the methodology for calculating the distribution of allowances
among affected units that are not entitled to allowances from the NUSA
. The methodology is
based on gross electrical output for a particular control period
. Subsection (a) provides that for
control periods 2009, 2010, and 2011, Illinois EPA will use the average of the three highest
control periods between 2001 and 2005, if available
. If fewer years are available, then the
average will use fewer years
. If gross electrical output data is not available for a unit, then
Illinois EPA will use heat input to determine the average gross electrical output
.
The average gross electrical output will then be weighted by fuel type to determine the
unit's converted gross electrical output
. For a unit that is coal-fired, the weighting is 1
.0. The
unit will be receive allocations based on 100 percent of its average gross electrical output
. For
69
units that are oil-fired, the weighting is 0
.6 . The unit will be apportioned allocations based on 60
percent of its average gross electrical output
. For units that are neither coal-fired nor oil-fired, the
weighting is 0 .4
. The unit will be apportioned allocations based on 40 percent of its average
gross electrical output
.
Subsection (b) provides that for control periods 2012 and thereafter, Illinois EPA will use
the average of the unit's gross electrical output from the two most recent control periods, if
available, otherwise it will use the most recent control period's data
. The average gross
electrical output will then be weighted by fuel type to determine the unit's converted gross
electrical output
. Subsection (c) provides that a unit that also produces useful thermal energy,
will be apportioned additional allowances
. Converted gross electrical output based on a
percentage of the unit's useful thermal energy weighted by the type of fuel will be added to the
converted gross electrical output determined for a unit
.
Subsection (d) provides that a unit's gross electrical output will be determined using the
best available data reported or available to Illinois EPA, based on the monitoring and reporting
requirements of Section 225
.450
. Subsection (e) provides that a unit's heat input will be based
on the information provided to USEPA for the applicable control period
.
Section 225 .440 CAIR
NO,Annual
Allocations
This Section sets forth for each control period the allowance allocations for affected units
.
Subsection (a) provides that Illinois EPA will allocate a total number of CAIR NO, allowances
equal to the CAIR NO, budget available for allocation to units that have converted gross
electrical output
. Subsection (b) provides that Illinois EPA will allocate these allowances pro-
rata based on the units' converted gross electrical
. In cases where, it is not possible to allocate a
70
whole allowance, unallocated allowances will be retained by Illinois EPA and be available for
allocation in for future control periods .
Section 225 .445 New UnitSet-Aside (NUSA)
This Section establishes a NUSA for new affected units . "New" units are units that have
commenced commercial operation on or after January 1, 2006, and have not yet operated so as to
be entitled to receive an allocation for the particular control period under Section 225
.440.
Subsection (a) requires Illinois EPA to establish a NUSA for each control period equal to five
percent of the base CAIR NO, Annual trading budget . Subsection (b) provides the procedures
by which the designated representative may request allowances from the NUSA
. The request
may only be submitted after the unit has commenced commercial operation and has operated one
control period . The request is due no later than January 15 after the applicable control period
and must include the gross electrical output for the applicable control period
.
Subsection (c) provides the methodology that Illinois EPA will use to determine
allowance allocations from NUSA . Illinois EPA will use the average of the gross electrical
output from the two most recent control periods, if available
. Otherwise, it will use the gross
electrical output from the most recent year . The average gross electrical output will then be
weighted by fuel type to determine the unit's converted gross electrical output, as discussed
above. A unit that also produces useful thermal energy will receive additional allowances
.
Illinois EPA will then allocate these allowances pro-rata based on the units' converted
gross electrical output . If the NUSA has allowances equal to or more than the sum of each new
units' unadjusted allocation, each unit will receive the number determined by its un-prorated
allocation
. If the NUSA has less than the sum of all such units' un-prorated allocation, than each
71
new unit will receive allowances pro-rata using its un-prorated allocation
. In cases where it is
not possible to allocate a whole allowance, unallocated allowances will be retained by Illinois
EPA
and be made available for allocation for future control periods . Subsection (c) also
provides that if it is later determined that a unit's gross electrical output or useful thermal energy
was over reported, that Illinois
EPA will reduce the unit's allocation from the NUSA for the
current control period to account for the excess allowances received
.
Subsection (d) provides that Illinois EPA
will only accept applications that meet the
requirements of
NUSA or are adjusted to meet the requirements of NUSA. Subsection (e)
provides that Illinois EPA will notify the designated representative no later than February 8 of
the number of allowances, i f any, that the unit will be allocated
. Subsection (f) provides that
Illinois EPA
will report these allocations to USEPA no later than February 15 .
Subsection (g)
provides that after a "new" unit has operated one control period, it becomes an existing unit for
purposes of Sections 225 .435 and 225 .440,
but will continue to receive allowances, if eligible
from NUSA
until it is eligible to use the allowances allocated under Section 225
.440 .
Subsection (h) provides that if allowances remain in the
NUSA after allocation requests have
been met, the allowances will accrue
. It further provides that Illinois EPA may retire allowances
in excess of 19,080 (five years worth) for attaining and maintaining air quality standards under
the CAA .
Section 225
.450 Monitoring,Record Keeping and Reporting
for Gross Electrical
Output andUseful Thermal Output
This Section sets forth the monitoring, recordkeeping and reporting requirements for
gross electrical output and useful thermal energy
. Subsection (a) provides that by January 1,
72
2007, or within the date that a unit commences commercial operation, the owner or operator of
an affected unit will install, calibrate, maintain, and operate a wattmeter. It also provides that
where heat input data is being used to determine an allocation, that the owner or operator comply
with the applicable requirements of 40 CFR 75 for monitoring heat input .
Subsection (b) provides that by January 1, 2007, or by the date that a unit begins
providing useful thermal energy operation, the owner or operator an affected unit with process
steam production shall install, calibrate, maintain, and operate measurement devices to determine
steam flow, temperature, and pressure in PSI to measure and record the useful thermal energy in
mmBtu/hr on a continuous basis ; measure thermal energy in mmBtu/hr on a continuous basis ;
and record the output of the monitor .
Subsection (c) requires the designated representative of an affected unit shall report
monthly data on a quarterly basis beginning with calendar year 2007
. It also provides that if the
data is available for control periods 2001 through 2005, that the data be provided to Illinois EPA
by September 30, 2006
. Subsection (d) provides that the owner or operator shall maintain a
monitoring plan for gross electrical output . Subsection (e) provides that the owner or operator
shall maintain the records and reports required by the Section for five years .
Section 225 .455 Clean Air Set-Aside(CASA)
This Section establishes the CASA
. Subsection (a) generally specifies the type of
projects for which allowances can be obtained from the CASA and the requirement to submit an
application to obtain any such allowances
. Subsection (b) specifies that if a source is out of
compliances with the requirements of this Subpart, i .e .,
the CAIR NO, Annual trading program,
it is not eligible for a CASA allocation for that control period
. Subsection (c) provides that if
73
Illinois EPA receives two or more applications for the same project, that it will reject all
applications . Subsection (d) provides that Illinois EPA will allocate allowances in accordance
with the procedures in Section 225
.475. Subsection (e) provides that two or more projects may
be aggregated, that individually result in less than one allowance, but equal at least one
allowance when aggregated . Further, it provides that Illinois EPA will not allocate allowances
for projects that total less than one whole allowances .
Section 225 .460 Energy Efficiency, Renewable Energy, and Clean Technology
This Section further describes the categories of projects that are eligible for allowances
from the CASA . Subsection (a) addresses end-use energy efficiency projects . Subsection (b)
addresses renewable energy projects . Subsection (c) addresses clean technology projects under
the CAIR NO, Annual trading program, NO, allowances are available for installation of flue gas
desulfurization devices and baghouses, which control SO
2 and PM emissions respectively, in
addition to control devices for control of NO, emissions
. Subsection (d) excludes from
eligibility nuclear power projects, or projects used to meet a State or federal statutory or
regulatory requirement or one that are used to meet a requirement in a consent decree . This
prohibition would not apply to measures taken to comply with this program and other trading
programs, which do not directly limit emissions on a unit-by-unit basis . Subsection (e) provides
for a circumstance where a sponsor submits an application for a projects that falls under the
general CASA category, but is not specifically described or listed
. Subsection (f) identifies types
of projects that are eligible for allowances from the early adopter category .
Section 225 .465
CASA Allowances
74
This Section establishes how CAIR NO, allowances in the CASA will be distributed
among projects types and the formula to use, based on project type, to determine the number of
possible allowances to request
. Subsection (a) provides the number of allowances available for
distribution by project type and control period
. Subsection (b) provides the equations for
determining the number of allowances that a project sponsor may request for a particular project
.
Section 225 .470 CASA Applications
This Section establishes the procedures for submitting an application for allowances from
the CASA
. Subsection (a) provides the eligibility date for each type of project . Subsection (b)
provides the application requirements . The application must be submitted by May 1 of the
applicable control period, but after the first calendar year that the project has operated
. The
application must describe the project, the number of allowances requested, the name of the CAIR
account representative, a certification by both the project sponsor and the account representative,
and documentation on emissions reductions
. Subsection (d) specifies the number of years that
project sponsors may apply for allowances from the CASA for different types of projects
. The
renewal application must include the number of allowances with supporting documentation and a
certification by the account representative
. Subsection (e) requires the project sponsor to retain
records of the CASA application and the supporting documentation for at least five years
.
Section 225 .475 Agency ActiononCASA
Applications
This Section establishes the procedures that Illinois EPA will use for allocation of
allowances from the CASA
. Subsection (a) provides that Illinois EPA will allocate allowances
75
pro-rata to eligible projects based on project category
. Subsection (b) provides that if after all
eligible requests have been met, allowances remain in the CASA, these allowances shall accrue
for future CASAs
. If a category reaches twice its designated amount, the excess shall be divided
among the categories that have not doubled in value
. The allowances will then be reallocated to
those project categories to meet unfilled requests
. If all categories have doubled, Illinois EPA
may retire the excess allowances to attain or maintain air quality
.
Section 225 .480 Compliance
Supplement Pool
This Section provides that Illinois EPA will retire 11,299 CAIR NO, annual allowances
that comprise Illinois' portion of the Compliance Supplement Pool for public health and air
quality improvements .
Sub art
E : CAIR NO Ozone Season Tradin Pro ram
Section 225.500
Purpose
Illinois EPA proposes to add new Subpart E to control NO, emissions from affected
electrical generating units during the ozone season control period (May I through September 30
of each year) by implementing the CAIR NO, Ozone Season trading program, 40 CFR 96, and
determining the CAIR NO, Ozone Season allocations
.
Section 225
.505 Applicability
This Section is substantially identical to Section 225
.305.
Section 225.510 Compliance
Requirements
76
This Section specifies the compliance procedures for affected units
. This Section is
substantially identical to Section 225
.410 except for the references . The following references are
changed "CAIR NO, permit," "CAIR NO, Annual trading program," and "CAIR NO, Annual
allowances" to "CAIR NO, Ozone Season permit," "CAIR NO
x
Ozone Season trading
program," and "CAIR NO, Ozone Season allowances," respectively, and the references to the 40
CFR 96, subparts AA through HH and corresponding sections, would be to 40 CFR 96 subparts
AAAA through HHHH, and corresponding sections
. A reference to Section 225 .450 would be to
Section 225 .550
. In subsection (d), the allowance transfer deadline is the November 30 after
each control period .
Section 225 .515 Appeal Procedures
This Section is identical to Section 225
.315 .
Section225.520 Permitting Requirements
This Section sets forth the permitting requirements for affected units
. The description of
this Section is substantially identical to that for Section 225
.420 above, except the references to
"CAIR NO, permit," "CAIR NO
x
permit application," "CAIR NO, Annual trading program,"
and "CAIR NO, Annual compliance account" are changed to "CAM NO, Ozone Season
permit," "CAIR NO, Ozone Season permit application," "CAIR NO
x
Ozone Season trading
program," and "CAIR NO, Ozone Season compliance account
."
Section 225 .525 OzoneSeason
Trading Budget
Subsection (a) of this Section provides that the total base CAIR NO, Ozone Season
77
trading budget for control periods 2009 through 2014 is 30,701 . This subsection also provides
that 30 percent of the budget will be allocated to set-asides, making 21,491 tons available for
allocation to existing units for each control period
. Subsection (a) also provides that five percent
of the CAIR NO, Ozone Season trading budget will be allocated to the NUSA
. Twenty-five
percent of the CAIR NO, Ozone Season trading budget will be allocated to the CASA .
Subsection (b) of this Section provides that the total base CAIR NO, Ozone Season
Trading Budget for control period 2015 and thereafter is 28,981 . This subsection also provides
that 30 percent of the budget will be allocated to set-asides, making 20,287 tons available for
allocation to existing units for each control period . Subsection (b) also provides that five percent
of the CAIR NO, Ozone Season trading budget will be allocated to the NUSA
. Twenty-five
percent of the CAIR NO, Ozone Season Trading Budget will be allocated to the CASA
.
Subsection (c) authorizes Illinois EPA to adjust the total base CAIR NO, Ozone Season
trading budget accordingly, if USEPA subsequently makes adjustments to this budget .
Section 225
.530 Timing for Ozone Season Allocations
This Section provides the dates that Illinois EPA will submit the CAIR NO, Ozone
Season allocations to USEPA
. Subsection (a) provides that allocations for control periods 2009,
2010, and 2011 to existing affected units, will be submitted by Illinois EPA, to USEPA by
October 31, 2006 . Subsection (b) provides that by July 31, 2009, and every July thereafter,
Illinois EPA will submit allocations for existing affected units for the control period in three
years after the date of submission
. For example, in 2009, Illinois EPA will allocate allowances
for the 2012 control period . Subsection (c) provides that allocations from the NUSA will be
made by the November 15 after the applicable control period . Subsection (d) provides that the
78
allocations from the CASA will be made by December 1 after the applicable control period
.
Section 225 .535 Methodology
for Calculating Ozone Season Allocations
This Section provides the methodology for calculating the allowances to be apportioned
to affected units. This Section is substantially identical to Section 225
.435, except that the
applicable control period is from May 1 through September 30 of each calendar year
.
Section 225
.540 CAIR NO, Ozone Season Allocations
This Section sets forth the allowance allocations for affected units for each control period
.
This Section is substantially identical to Section 225
.440.
Section 225 .545 New Unit Set-Aside (NUSA)
This Section establishes a NUSA for new affected units
. "New" units are units that have
commenced commercial operation on or after May 1, 2006, and have not yet received an
allocation for the particular control period under Section 225
.440
. Subsection (a) provides that
Illinois EPA will establish a NUSA for each control period with allowances equal to five percent
of the base CAIR NO, Ozone Season trading budget
. Subsection (b) provides the method that
the designated representative may request allowances from the NUSA
. The request may only be
submitted after the unit has commenced commercial operation and has operated one control
period
. The request is due no later than October 15 after the applicable control period and must
include gross electrical output for the applicable control period
.
Subsections
(c), (d), and (g) are substantially identical to their counterparts in Section
225 .445
. Subsection (e) provides that Illinois EPA will notify the designated representative no
79
later than November 8 of the number of allowances, if any, that the unit will be allocated .
Subsection (f) provides that Illinois EPA will report these allocations to USEPA no later than
November 15 . Subsection (h) provides that if allowances remain in the -USA after allocation
requests have been met, the allowances will accrue . It further provides that Illinois EPA may
retire allowances in excess of 19,080
(5 years worth) for attaining and maintaining air quality
standards under the CAA .
Section 225 .550 Monitoring,Record Keeping and Reporting for Gross Electrical
Outputand UsefulThermal Output
This Section sets forth the monitoring, recordkeeping and reporting requirements for
gross electrical output and useful thermal energy . This Section is substantially identical to
Section 225 .450 .
Section 225 .555 Clean Air Set-Aside (CASA)
This Section establishes the CASA for the CAIR NO, Ozone Season trading program.
This Section is substantially identical to Section 225 .455 .
Section 225 .560 Energy Efficiency, Renewable Energy, and Clean Technology
This Section defines the types of categories that are eligible for allowances from the
Ozone Season CASA
. This Section is substantially identical to Section 225
.460, except that
FGD and baghouse projects are not eligible for an allocation from the ozone season CASA
.
Section 225 .565
CASA Allowances
80
This Section establishes how CAIR NO, Ozone Season allowances will be distributed
among projects types and the formula to use, based on project type, to determine the number of
possible allowances to request
. This Section is substantially identical to Section 225 .465, except
the total number of allowances distributed reflects their proportional share of the Ozone Season
Budget.
Section 225.570 CASA Applications
This Section establishes the procedures for submitting an application for allowances from
the CASA. This Section is substantially identical to Section 225
.470 .
Section 225
.575 Agency ActiononCASA Applications
This Section establishes the procedures that Illinois EPA will use for allocation
allowances from the CASA
. This Section is substantially identical to Section 225 .475 .
Respectfully submitted,
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:
81
Rachel L . Doctors
Assistant Counsel
Division of Legal Counsel
Dated:
May 22, 2006
1021 N . Grand Ave . East
P.O. Box 19276
Springfield, IL 62794-9276
217 .782.5544
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
CLERK'S OFFICE
MAY 3 0 2006
PROPOSED NEW CAIR 50
2 , CAIR NOx
)
Pollution
STATE
OF
Control
ILLINOISBoard
ANNUAL AND CAIR NO,, OZONE SEASON )
TRADING PROGRAMS, 35 ILL . ADM .
)
CODE 225, CONTROL OF EMISSIONS
)
FROM LARGE COMBUSTION SOURCES,
)
SUBPARTS A, C, D and E
)
IN THE MATTER OF :
R06-
(Rulemaking- Air)
SYNOPSIS OF TESTIMONY
It is currently anticipated that Illinois EPA will provide at least nine witnesses in
support of the proposal
: Gary Beckstead, David Bloomberg, Roston Cooper, Rory Davis,
Rob Kaleel, Yoginder Mahajan, Jim Ross, and Jackie Sims . Jim Ross, Manager of the
Division of Air Pollution Control, Bureau of Air, will provide an overview of the
regulatory proposal and economic considerations
. Rob Kaleel, Manager of the Air
Quality Planning Section, Bureau of Air, will testify to the air quality modeling and the
environmental benefits . Gary Beckstead, Manager of the Regulatory Unit, Air Quality
Planning Section, Bureau of Air, will testify to other related regulatory programs
.
Yoginder Mahajan, Environmental Engineer, Regulatory Unit, Air Quality Planning
Section, Bureau of Air will testify to the affected sources and technical feasibility of NO x
and SO2 controls
. Jackie Sims, Environmental Engineer, Compliance Unit, Compliance
and Enforcement Section, Bureau of Air, will testify to the allocation methodology,
including new unit set-asides . Rory Davis, Environmental Engineer, Regulatory Unit,
Air Quality Planning Section, Bureau of Air, will provide additional testimony on the
allocation methodology, including gross electrical output
. Roston Cooper,
Environmental Engineer, Permit Section, Bureau of Air, will testify to Clean Air Set-
Asides. David Bloomberg, Manager of the Compliance Unit, Compliance and
Enforcement Section, Bureau of Air, will testify to the compliance, monitoring,
recordkeeping and reporting provisions .
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
TITLE 35: ENVIRONMENTAL PROTECTION
SUBTITLE B : AIR POLLUTION
CHAPTER I : POLLUTION CONTROL BOARD
SUBCHAPTER c
: EMISSION STANDARDS AND LIMITATIONS
FOR STATIONARY SOURCES
PART 225
CONTROL OF EMISSIONS FROM LARGE COMBUSTION SOURCES
SUBPART A: GENERAL PROVISIONS
Section
225 .100
Severability
225 .120
Abbreviations and Acronyms
225 .130
Definitions
225 .140
Incorporations by Reference
Section
225 .300
Purpose
225 .305
Applicability
225 .310
Compliance Requirements
225.315
Appeal Procedures
225.320
Permit Requirements
225 .325
Trading Program
SUBPART C: CAIR SO2
TRADING PROGRAM
SUBPART D
: CAIR NO, ANNUAL TRADING PROGRAM
Section
225 .400
Purpose
225 .405
Applicability
225.410
Compliance Requirements
225.415
Appeal Procedures
225.420
Permit Requirements
225.425
Annual Trading Budget
225.430
Timing for Annual Allocations
225.435
Methodology for Calculating Annual Allocations
225.440
Annual Allocations
225.445
New Unit Set-Aside (NUSA)
RE
CLERK'S
CCIVEDOFFICE
MAY 3 0 2006
Pollution
STATE OF
ControlILLINOISBoard
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
225.450
Monitoring, Recordkeeping and Reporting for Gross Electrical Output and Useful
Thermal Energy
225.455
Clean Air Set-Aside (CASA)
225.460
Energy Efficiency, Renewable Energy, and Clean Technology Projects
225.465
Clean Air Set-Aside (CASA) Allowances
225.470
Clean Air Set-Aside (CASA) Applications and Recordkeeping
225.475
Agency Action on Clean Air Set-Aside (CASA) Applications
225.480
Compliance Supplement Pool
SUBPART E : CAIR NO,, OZONE SEASON TRADING PROGRAM
Section
225 .500
Purpose
225 .505
Applicability
225
.510
Compliance Requirements
225 .515
Appeal Procedures
225 .520
Permit Requirements
225
.525
Trading Budget
225 .530
Timing for Ozone Season Allocations
225 .535
Methodology for Calculating Ozone Season Allocations
225.540
Ozone Season Allocations
225.545
New Unit Set-Aside (NUSA)
225.550
Monitoring, Recordkeeping and Reporting for Gross Electrical Output and Useful
Thermal Energy
225.555
Clean Air Set-Aside (CASA)
225 .560
Energy Efficiency, Renewable Energy, and Clean Technology Projects
225 .565
Clean Air Set-Aside (CASA) Allowances
225 .570
Clean Air Set-Aside (CASA) Applications and Recordkeeping
225 .575
Agency Action on Clean Air Set-Aside (CASA) Applications
AUTHORITY
: Implementing Section 10, and authorized by Sections 27 and 28 of the Illinois
Environmental Protection Act [415 ILCS 5/10, 27 and 28] .
SOURCE: Adopted in Docket R06-
at Ill . Reg. , effective
,
2006.
SUBPART A : GENERAL PROVISIONS
Section 225.120
Severability
If any Section, subsection or clause of this Part is found invalid, such finding shall not affect the
validity of this Part as a whole or any Section, sentence or clause not found invalid
.
ILLINOIS REGISTER
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Section 225 .103
Abbreviations
Unless otherwise specified within this Part, the abbreviations used in this Part shall be the same
as those found in 35 Ill
. Adm . Code 211
. The following abbreviations and acronyms are used in
this Part :
Act
Environmental Protection Act [415 ILCS
5 et seq.]
Btu
British thermal unit
CAA
Clean Air Act [42 U .S.C
. 7401 ]
CAAPP
Clean Air Act Permit Program [415 ILCS 5/39
.5]
CEMS
continuous emissions monitoring systems
EGU
electric generating unit
GO
Gross electrical output
HI
heat input
hr
hour
kg
kilogram
mmBtu
million Btu
MW
megawatt
MWe
megawatt electrical
MWh
megawatt hour
NOx
nitrogen oxides
ORIS
Office of Regulatory Information Systems
02
oxygen
SO2
sulfur dioxide
USEPA
United State Environmental Protection Agency
yr
year
Section 225
.130
Definitions
The definitions contained in this Section apply only to the provisions of this Part
. Unless
otherwise defined in this Section and unless a different meaning of a term is clear from its
context, the definitions of terms used in this Part shall have the meanings specified for those
terms in 35 Ill. Adm
. Code 211, and 40 CFR §§ 96
.102, 96 .202, and 96.302,
as incorporated by
reference in Section 225
.140 of this Subpart
.
"Boiler" means an enclosed fossil or other fuel-fired combustion device used to produce
heat and to transfer heat to recirculating water, steam, or other medium
.
"Bottoming-cycle cogeneration unit" means a cogeneration unit in which the energy input
to the unit is first used to produce useful thermal energy and at least some of the reject
ILLINOIS REGISTER
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heat from the useful thermal energy application or process is then used for electricity
production.
"CAIR authorized account representative" means, with regard to general accounts, a
responsible natural person who is authorized, in accordance with 40 CFR 96 subparts BB,
BBB, and BBBB, to transfer and otherwise dispose of CAIR NO, and SO2 allowances, as
applicable, held in the CAIR NO, general account, and with regard to a CAIR NO,
compliance account, the CAIR designated representative of the source
.
"CAIR designated representative" means for a CAIR NO, source and a CAIR SO2
source
and each CAIR NO, unit and CAIR SO2 unit at the source, the natural person who is
authorized by the owners and operators of the source and all such units at the source, in
accordance with 40 CFR 96 subparts BB, BBB, and BBBB, as applicable, to represent
and legally bind each owner and operator in matters pertaining to the CAIR NO, Annual
Trading Program, CAIR S02 Trading Program, and the CAIR NO, Ozone Season
Trading Program, as applicable
. For any unit that is subject to one or more of the
following programs
: CAIR NO, Annual Trading Program, the CAIR SO 2 Trading
Program, the CAIR NO
. Ozone Season Trading Program, or the federal Acid Rain
Program, the designated representative for such unit shall be the same natural person for
programs all applicable to the unit
.
"CAIR NO
. compliance account" means, for the purposes of Subparts D and E of this
Part, a CAIR NO, Allowance Tracking System account, established by USEPA for a
CAIR NO, source under 40 CFR 96 subparts FF and FFFF in which any CAIR NO,,
allowance allocations for the affected units at the source are initially recorded and in
which are held any CAIR NO, allowances available for use for a control period in order
to meet the source's CAIR NO, emissions limitations in accordance with Sections
225
.410 and 225 .510 of this Part, and 40 CFR §§ 96
.154 and 96.354, as incorporated by
reference in Section 225 .140 of this Subpart .
"CAIR Trading Programs" means the requirements of this Part, and those provisions of
the federal CAIR NO, Annual Season, CAIR SO2, or CAIR NO, Ozone Season Trading
Programs
Subpart.
set forth in 40 CFR 96, as incorporated by reference in Section 225.140
of this
"Coal-fired" means combusting any amount of coal or coal-derived fuel, alone or in
combination with any amount of any other fuel, during a specified year.
"Cogeneration unit" means a stationary, fossil fuel-fired boiler or stationary, fossil fuel-
fired combustion turbine
:
ILLINOIS REGISTER
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a)
Having equipment used to produce electricity and useful thermal energy
for industrial, commercial, heating, or cooling purposes through the
sequential use of energy ; and
b)
Producing during the 12-month period starting on the date the unit first
produces electricity and during any calendar year after the calendar year in
which the unit first produces electricity :
1)
For a topping-cycle cogeneration unit
:
i)
Useful thermal energy not less than 5 percent of total
energy output
; and
ii)
Useful power that, when added to one-half of useful
thermal energy produced, is not less than 42 .5 percent of
total energy input, if useful thermal energy produced is 15
percent or more of total energy output, or not less than 45
percent of total energy input, if useful thermal energy
produced is less than 15 percent of total energy output .
2)
For a bottoming-cycle cogeneration unit, useful power not less
than 45 percent of total energy input .
"Combined cycle system" means a system comprised of one or more combustion
turbines, heat recovery steam generators, and steam turbines configured to improve
overall efficiency of electricity generation or steam production
.
"Combustion turbine" means :
An enclosed device comprising a compressor, a combustor, and a turbine and in
which the flue gas resulting from the combustion of fuel in the combustor passes
through the turbine, rotating the turbine; and
If the enclosed device under paragraph above is combined cycle, any associated
heat recovery steam generator and steam turbine .
"Commence commercial operation" means, with respect to Subparts C, D and E of this
Part, with regard to a unit serving a generator
:
a)
To have begun to produce steam, gas, or other heated medium used to
generate electricity for sale or use, including test generation, except as
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provided in 40 CFR § 96 .105, 96 .205, or 96.305,
as incorporated by
reference in Section 225
.140 of this Subpart .
1)
For a unit that is an affected unit under 40 CFR § 96
.104, 96 .204
or 96.304
on the date the unit commences commercial operation on
the later of November 15, 1990 or the date the unit commence
commercial operation as defined in paragraph (a) of this definition
and that subsequently undergoes a physical change (other than
replacement of the unit by a unit at the same source), such date
shall remain the unit's date of commencement of commercial
operation, which shall continue to be treated as the same unit
.
2)
For a unit that is an affected unit under 40 CFR § 96
.104, 96 .204
or 96
.304 on the later of November 15, 1990 or the date the unit
commences commercial operation as defined in paragraph (a) of
this definition and that is subsequently replaced by a unit at the
same source (e.g.,
repowered), such date shall remain the replace
unit's date of commencement of commercial operation, and the
replacement unit shall be treated as a separate unit with a separate
date for commencement of commercial operation as defined in
paragraphs (a) or (b) of this definition as appropriate
.
b)
Notwithstanding paragraph (a) of this definition and except as provided in
40 CFR § 96 .105, 96
.205, or 96 .305 for a unit that is not an affected unit
under 40 CFR § 96 .104, 96
.204 or 96 .304 on the later of November 15,
1990 or the date the unit commences commercial operation as defined in
paragraph (a) of this definition, the unit's date for commencement of
commercial operation shall be the date on which the unit becomes an
affected unit under 40 CFR § 96
.104, 96 .204, or 96.304
.
1)
For a unit with a date for commencement of commercial operation
as defined in paragraph (b) of this definition and that subsequently
undergoes a physical change (other than replacement of the unit by
a unit at the same source), such date shall remain the unit's date of
commencement of commercial operation
.
2)
For a unit with a date for commencement of commercial operation
as defined in paragraph (b) of this definition and that is
subsequently replaced by a unit at the same source (e.g.,
repowered), such date shall remain the replacement unit's date of
commencement of commercial operation, and the replacement unit
ILLINOIS REGISTER
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shall be treated as a separate unit with a separate date for
commencement of commercial operation as defined in paragraph
(a) or (b) of this definition as appropriate .
c)
Notwithstanding paragraphs (a) and (b) of this definition, for a unit not
serving a generator producing electricity for sale, the unit's date of
commencement of operation shall also be the unit's date of
commencement of commercial operation .
"Commence operation," for purposes of Subparts of C, D and E of this Part, means :
a)
To have begun any mechanical, chemical, or electronic process, including,
with regard to a unit, start-up of a unit's combustion chamber, except as
provided in 40 CFR § 96 .105, 96.205, or 96.305, as incorporated by
reference in Section 225 .140 of this Subpart .
1)
For a unit that undergoes a physical change (other than
replacement of the unit by a unit as the same source) after the date
the unit commences operations as defined in paragraph (a) of this
definition, such date shall remain the date of commencement of
operation of the unit, which shall continue to be treated as the same
unit.
2)
For a unit that is replaced by a unit at the same source (e.g.,
repowered), after the date the unit commences operation as defined
in paragraph (a) of this definition, such date shall remain the
replaced unit's date of commencement of operation, and the
replacement unit shall be treated as a separate unit with a separate
date for commencement of operation as defined in paragraphs (a)
or (b) of this definition as appropriate .
b)
Notwithstanding paragraph (a) of this definition and solely for the
purposes of 40 CFR 96, subparts HH, HHH, and HHHH, for a unit that is
not an affected unit under 40 CFR § 96 .104, 96.204, or 96.304 on the later
of November 15, 1990 or the date the unit commences operation as
defined in paragraph (a) of this definition and subsequently becomes an
affected uni, the unit's date for commencement of operation shall be the
date on which the unit becomes an affected unit under 40 CFR § 96
.104,
96.204,
or 96.304.
1)
For a unit with a date for commencement of operation as defined in
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paragraph (b) of this definition and that subsequently undergoes a
physical change (other than replacement of the unit by a unit at the
same source), such date shall remain the unit's date of
commencement of operation .
2)
For a unit with a date for commencement of operation as defined in
paragraph (b) of this definition and that is subsequently replaced
by a unit at the same source (e.g., repowered), the replacement unit
shall be treated as a separate unit with a separate date for
commencement of operation as defined in paragraphs (a) or (b) of
this definition as appropriate .
"Common stack" means a single flue through which emissions from two or more units
are exhausted.
"Control period" means :
For the CAIR SO2 and NO, Annual Trading programs in Subparts C and D of this
Part, the period beginning January 1 of a calendar year, except as provided in
Sections 225
.310(d)(3) and 225
.410(d)(3) of this Subpart, and ending on
December 31 of the same year, inclusive
; or
For the CAIR NO, Ozone Season Trading Program in Subpart E of this Part, the
period beginning May 1 of a calendar year, except as provided in Section
225 .5 1 0(d)(3)
of this Subpart, and ending on September 30 of the same year,
inclusive .
"Electric generating unit (EGU)" means a fossil fuel-fired stationary boiler, combustion
turbine or combined cycle system that serves a generator that has a nameplate capacity
greater than 25 MWe and produces electricity for sale
.
"Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous
fuel derived from such material .
"Fossil fuel-fired" means the combusting any amount of fossil fuel, alone or in
combination with any other fuel in any calendar year
.
"Generator" means a device that produces electricity
.
"Gross electrical output" means the total electrical output from an electric generating unit
(EGU) before making any deductions for energy output used in any way related to the
ILLINOIS REGISTER
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production of energy
. For an electric generating unit generating only electricity, the
gross electrical output is the output from the turbine/generator set
.
"Heat input" means, with regard Subparts C, D, and E of this Part, with regard to a
specified period of time, the product (in mmBtu/hr) of the gross calorific value of the fuel
(in Btu/lb) divided by 1,000,000 Btu/mmBtu and multiplied by the fuel feed rate into a
combustion device (in lb of fuel/time), as measured, recorded and reported to USEPA by
the CAR designated representative and determined by USEPA in accordance with 40
CFR 96, subpart HH, HHH, or HHHH ,
if applicable, and excluding the heat derived
from preheated combustion air, recirculated flue gases, or exhaust from other sources
.
"Higher heating value (HHV)" means the total heat liberated per mass of fuel burned
(Btu per pound), when fuel and dry air at standard conditions undergo complete
combustion and all resultant products are brought to their standard states at standard
conditions.
"Integrated gasification combined cycle (IGCC)" means a coal-fired electric utility steam
generating unit that bums a synthetic gas derived from coal in a combined-cycle gas
turbine. No coal is directly burned in the unit during operation
.
"Nameplate Capacity" means, starting from the initial installation of a generator, the
maximum electrical generating output (in MWe) that the generator is capable of
producing on a steady state basis and during continuous operation (when not restricted by
seasonal or other deratings) as specified by the manufacturer of the generator or, starting
from the completion of any subsequent physical change in the generator resulting in an
increase in the maximum electrical generating output (in MWe) that the generator is
capable of producing on a steady state basis and during continuous operation (when not
restricted by seasonal or other deratings), such increased maximum amount as specified
by the person conducting the physical change
.
"Oil-fired unit" means a unit combusting fuel oil for more than
15 percent of the annual
heat input in a specified year and not qualifying as coal-fired
.
"Project sponsor' means a person, including the owner or operator of an electric
generating unit that implements or helps to implement an energy efficiency and
conservation, renewable energy, or clean technology project as listed in Sections
225 .460
and 225 .560
of this Part.
"Potential electrical output capacity" means 33 percent of a unit's maximum design heat
input, expressed in mmBtu/hr divided by 3
.413 mmBtu/MWh, and multiplied by
8,760
hr/yr.
ILLINOIS REGISTER
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"Rated-energy efficiency" means the percentage of thermal energy input that is recovered
as useable energy in the form of gross electrical output, useful thermal energy, or both
that is used for heating, cooling, industrial processes, or other beneficial uses as follows
:
For electric generators, rated energy efficiency is calculated as one kilowatt hour
(3,413 Btu) of electricity divided by the unit's design heat rate using the higher
heating value of the fuel, and expressed as a percentage
.
For combined heat and power projects, rated-energy efficiency is calculated using
the following formula :
REE =
((GO + UTE)/HI) x 100
Where:
REE =
Rated-energy efficiency, expressed as percentage .
GO
=
Gross electrical output of the system expressed in Btu/hr
.
UTE =
Useful thermal output from the system that is used for
heating, cooling, industrial processes or other beneficial
uses, expressed in Btu/hr.
HI
Heat input, based upon the higher heating value of fuel, in
Btu/hr.
"Repowered" means, with regard to an electric generating unit, replacement of a coal-
fired boiler with one of the following coal-fired technologies at the same source as the
coal-fired boiler :
Atmospheric or pressurized fluidized bed combustion ;
Integrated gasification combined cycle
;
Magnetohydrodyamics ;
Direct and indirect coal-fired turbines ;
Integrated gasification fuel cells; or
As determined by the USEPA, a derivative of one or more of the technologies
listed above, and any other coal-fired technology capable of controlling multiple
combustion emissions simultaneously with improved boiler generation efficiency
ILLINOIS REGISTER
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and with significantly greater waste reduction relative to the performance of
technology in widespread commercial use as of January 1, 2005
.
"Total energy output" means, with respect to a cogeneration unit, the sum of useful
power and useful thermal energy produced by the cogeneration unit
.
"Useful thermal energy" means, with regard to a cogeneration unit, the thermal energy
that is made available to an industrial or commercial process, excluding any heat
contained in condensate return or makeup water
:
Used in a heat application
(e.g.,
space heating or domestic hot water heating) ; or
Used in a space cooling application
(e.g.,
thermal energy used by an absorption
chiller).
Section 225 .140
Incorporations by Reference
The following materials are incorporated by reference
. These incorporations do not include any
later amendments or editions .
a)
CAIR SO2
Trading Program, 40 CFR 96, subpart AAA (CAIR SO2 Trading
Program General Provisions, excluding 40 CFR §§ 96
.204, and 96.206)
; 40 CFR
96, subpart BBB (CAIR Designated Representative for CAIR SO
2
Sources); 40
CFR 96, subpart FFF (CAIR SO2 Allowance Tracking System)
; 40 CFR 96,
subpart GGG (CAIR SO2 Allowance Transfers)
; and 40 CFR 96, subpart HHH
(Monitoring and Reporting
.
b)
CAIR NO, Annual Trading Program, 40 CFR 96, subpart AA (NO, Annual
Trading Program General Provisions, excluding 40 CFR §§ 96
.104, 96 .105(b)(2),
and 96.106)
; 40 CFR 96, subpart BB (CAIR Designated Representative for CAR
NO, Sources)
; 40 CFR 96, subpart FF (CAIR NO, Allowance Tracking System)
;
40 CFR 96, subpart GG (CAR NO, Allowance Transfers)
; and 40 CFR 96,
subpart HH (Monitoring and Reporting)
.
c)
CAIR NO, Ozone Season Trading Program 40 CFR 96, subpart AAAA (CAIR
NO, Ozone Season Trading Program General Provisions) (excluding 40 CFR §§
96
.304, 96.305(b)(2), and 96 .306)
; 40 CFR 96, subpart BBBB (CAIR Designated
Representative for CAIR NO, Ozone Season Sources)
; 40 CFR 96, subpart FFFF
(CAIR NO, Ozone Season Allowance Tracking System)
; 40 CFR 96, subpart
GGGG (CAIR NO, Ozone Season Allowance Transfers)
; and 40 CFR 96, subpart
HHHH (Monitoring and Reporting)
.
d)
40 CFR 75 (2005) .
e)
40 CFR 78 (2005) .
0
Federal Energy Management Program,
M& VMeasurement and Verification for
Federal Energy Projects, U .S . Department of Energy, Office of Energy
Efficiency and Renewable Energy, Version 2.2, DOE/GO-102000-0960
(September 2000) .
SUBPART C : CAIR SO2 TRADING PROGRAM
Section 225 .300
Purpose
The purpose of this Subpart is to control the emissions of sulfur dioxide (SO2) from electric
generating units (EGUs) annually by implementing the CAIR SO
2
Trading Program pursuant to
40 CFR 96, as incorporated by reference in Section 225 .140 of this Subpart .
Section 225 .305
Applicability
a)
A fossil fuel-fired stationary boiler, combustion turbine or combined cycle system
is an electric generating unit if it serves a generator that has a nameplate capacity
greater than 25 MWe and produces electricity for sale and is not included in
Appendix D of 35 111 . Adm . Code Part 217 . An electric generating unit is subject
to the SO2 Trading Program contained in this Subpart and is a CAIR SO2 unit or
an affected unit for the purposes of this Subpart
.
b)
Notwithstanding subsection (a) of this Section, an EGU shall not be an affected
unit and is not subject to the CAIR SO 2 Trading Program contained in this
Subpart if it meets the requirements of either subsection
(b)(I)(A) or (b)(2)(A) of
this Section, as follows :
1)
A unit that:
A)
Meets the definition of a cogeneration unit in Section 225
.130 of
this Part; and
i)
Qualifies as a cogeneration unit during the 12-month period
starting on the date the unit first produces electricity, and
continues to qualify as a cogeneration unit
; and
ILLINOIS REGISTER
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2)
A unit that:
ILLINOIS REGISTER
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ii)
Does not serve at any time, since the later of November 15,
1990, or the start-up of the unit's combustion chamber, a
generator with a nameplate capacity of more than 25 MWe,
and which supplies in any calendar year more than one-
third of the unit's potential electrical output capacity or
219,000 MWh, whichever is greater, to a utility power
distribution system for sale .
B)
If a unit qualifies as a cogeneration unit during the 12-month
period starting on the date the unit first produces electricity but
subsequently no longer qualifies as a cogeneration unit, the unit
shall be subject to subsection (a) of this Section starting on the
January I after which the unit first no longer qualifies as a
cogeneration unit .
A)
Qualifies as a solid waste incineration unit as defined by Section
129(g) of the CAA [42 U .S.C. § 7429(g)] ; and
i)
Commences operation on or after January 1, 1985 ; and
ii)
Has an average annual fuel consumption of non-fossil fuel
for the first three calendar years of operation exceeding 80
percent (on a Btu basis) and an average annual fuel
consumption of non-fossil fuel for any three consecutive
calendar years after 1990 exceeding 80 percent (on a Btu
basis) .
B)
If a unit qualifies as a solid waste incineration unit and meets the
requirements of subsection
(b)(2)(A) of this Section for at least
three consecutive calendar years, but subsequently no longer meets
all such requirements, the unit shall become an affected unit
starting on the January 1 after which the unit has an average annual
fuel consumption of fossil fuel of 20 percent or more .
Section 225 .310
Compliance Requirements
a)
The owner or operator of an affected unit shall comply with the requirements of
the CAIR SO
2
Trading Program for Illinois as set forth in this Subpart and 40
CFR 96, subpart AAA (CAIR SO2
Trading Program General Provisions,
b)
Permit requirements :
c)
Monitoring requirements :
d)
Emission requirements
:
ILLINOIS REGISTER
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NOTICE OF PROPOSED RULE
excluding 40 CFR §§ 96 .204, and 96 .206) ; 40 CFR 96, subpart BBB (CAIR
Designated Representative for CAIR S0
2
Sources); 40 CFR 96, subpart FFF
Allowance
(CAIR S0
2Transfers)Allowance
;
Tracking
and 40 CFR
System)96,
subpart
; 40 CFR
HHH
96,
(Monitoring
subpart GGG
and
(CAIR
Reporting)S0
2
;
as incorporated by reference in Section 225
.140 of this Part.
I)
The owner or operator of each source with one or more affected units at
the source must apply for a permit issued by the Agency with federally
enforceable conditions covering the CAIR S02
Trading Program ("CAIR
S02
permit") that complies with the requirements of Section 225 .320 of
this Subpart (Permit Requirements) .
2)
The owner or operator of each affected source and each affected unit at the
source
permit .
must operate the affected unit in compliance with such CAR S0
2
I)
The owner or operator of each affected source and each affected unit at the
source must comply with the monitoring requirements of 40 CFR 96,
subpart HHH
. The CAIR designated representative of each affected
source and each affected unit at the affected source must comply with
those sections of the monitoring requirements of 40 CFR 96, subpart
HHH, applicable to the CAIR designated representative
.
2)
The compliance of each affected unit with the emissions limitation under
subsection (d) of this Section shall be determined by the emissions
measurements recorded and reported in accordance with 40 CFR 96,
subpart HHH and 40 CFR 75
.
1)
By the allowance transfer deadline, March 1, 2011, and by March 1 of
each subsequent year, the CAIR designated representative of each affected
source
allowances
and each
available
affected
for
unit
compliance
at the source
deductions
shall
under
hold
40
CAIR
CFR
S0§§2
96.254(a)
and (b) in the affected source's CAIR S0
2
Allowance System
Tracking account
. The number of allowances held shall not be less than
the tons of S0
2
emissions for the control period from all affected units at
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NOTICE OF PROPOSED RULE
the affected source, rounded to the nearest whole ton, as determined in
accordance with 40 CFR 96, subpart HHH, plus any number of allowances
necessary to account for actual utilization (e.g., for testing, start-up,
malfunction, and shut down) .
2)
Each ton of SO
2
emitted by an affected unit in excess of the number of
CAIR SO2 allowances held by the owner or operator for each affected unit
in its CAIR SO2 Allowance System Tracking account for each control
period shall constitute a separate violation of this Subpart and the Act.
3)
Each affected unit shall be subject to the monitoring and compliance
requirements of subsections (c)(1) and (d)(1) of this Section starting on the
later of January 1, 2010, or the deadline for meeting the unit's monitoring
certification requirements under 40 CFR § 96
.270(b)(1) or (2).
4)
CAIR SO2 allowances shall be held in, deducted from, or transferred
among allowance accounts in accordance with this Subpart and 40 CFR
96, subparts FFF and GGG .
5)
In order to comply with the requirements of subsection (d)(1) of this
Section, a CAIR SO2 allowance may not be utilized for a control period in
a year prior to the year for which the allowance is allocated .
6)
A CAIR SO2 allowance allocated by USEPA under the CAIR SO2 Trading
Program is a limited authorization to emit SO
2
in accordance with the
CAIR SO2 Trading Program. No provision of the CAIR SO2 Trading
Program, the CAIR SO2 permit application, the CAIR SO2
permit, or a
retired unit exemption under 40 CFR § 96 .205, and no provision of law,
shall be construed to limit the authority of the United States or the State to
terminate or limit this authorization
.
7)
A CAIR SO2 allowance allocated by USEPA under the CAIR SO 2 Trading
Program does not constitute a property right .
8)
Upon recordation by USEPA under 40 CFR 96, subpart FFF or 40 CFR
96, subpart GGG, every allocation, transfer, or deduction of an allowance
to or from an affected source is deemed to amend automatically, and
become a part of, any CAIR SO2 permit of the affected source . This
automatic amendment of the CAR SO2 permit shall be deemed an
operation of law and will not require any further review .
0
Liability:
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
e)
Recordkeeping and reporting requirements
:
1)
Unless otherwise provided, the owner or operator of the affected source
and each affected unit at the source shall keep on site at the source each of
the documents listed in subsections
(e)(1)(A) through (e)(1)(D) of this
Section for a period of five (5) years from the date the document is
created
. This period may be extended for cause, at any time prior to the
end of five years, in writing by the Agency or USEPA
.
A)
The certificate of representation for the CAIR designated
representative for the source and each affected unit at the source,
all documents that demonstrate the truth of the statements in the
certificate of representation, provided that the certificate and
documents must be retained on site at the source beyond such five-
year period until such documents are superseded because of the
submission of a new certificate of representation under 40 CFR §
96.213, changing the CAIR designated representative
.
B)
All emissions monitoring information, in accordance with 40 CFR
96, subpart HHH
.
C)
Copies of all reports, compliance certifications, and other
submissions
Trading Program
and all
or documents
records made
necessary
or required
to demonstrateunder
the CAR S02
compliance with the requirements of the CAIR
SO2 Trading
Program or with the requirements of this Subpart
.
D)
Copies of all documents used to complete a CAIR SO2
permit
application and any other submission under the CAIR S0
2 Trading
Program .
2)
The CAIR designated representative of an affected source and each
affected unit at the source must submit to the Agency and USEPA the
reports and compliance certifications required under the CAIR S02
Trading Program, including those under 40 CFR 96, subpart HHH
.
1)
No revision of a permit for an affected unit shall excuse any violation of
the
Trading
requirements
Program.
of this Subpart or the requirements of the CAR S0
2
g)
Section 225 .315
Appeal Procedures
The appeal procedures for decisions of USEPA under the CAIR S0 2
Trading Program are set
forth in 40 CFR 78, as incorporated by reference in Section 225
.140 of this Part.
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
2)
Each affected source and each affected unit shall meet the requirements of
the CAIR SO2
Trading Program .
3)
Any provision of the CAIR S02
Trading Program that applies to an
affected source (including any provision applicable to the CAR
designated representative of an affected source) shall also apply to the
owner and operator of such affected source and to the owner and operator
of each affected unit at the source
.
4)
Any provision of the CAIR S0 2
Trading Program that applies to an
affected unit (including any provision applicable to the CAIR designated
representative of an affected unit) shall also apply to the owner and
operator of such affected unit
. Except with regard to the requirements
applicable to affected units with a common stack under 40 CFR 96,
subpart HHH, the owner, the operator, and the CAIR designated
representative of an affected unit shall not be liable for any violation by
any other affected unit of which they are not an owner or operator or the
CAIR designated representative
.
5)
The CAIR designated representative of an affected unit that has excess
S02
emissions in any control period shall surrender the allowances as
required for deduction under 40 CFR § 96
.254(d)(1)
.
6)
The owner or operator of an affected unit that has excess S02
emissions in
any control period shall pay any fine, penalty, or assessment or comply
with any other remedy imposed under the Act and 40 CFR § 96
.254(d)(2) .
Effect on other authorities
. No provision of the CAIR SO2
Trading Program, a
CAIR S02
permit application, a CAR S02
permit, or a retired unit exemption
under 40 CFR § 96
.205 shall be construed as exempting or excluding the owner
and operator and, to the extent applicable, the CAIR designated representative of
an affected source or affected unit, from compliance with any other regulation
promulgated under the CAA, the Act, any State regulation or permit, or a
federally enforceable permit
.
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
Section 225.320
Permit Requirements
a)
Permit requirements :
1)
The owner or operator of each source with an affected unit is required to
submit a complete permit application addressing all applicable CAIR S02
Trading Program requirements for a permit meeting the requirements of
this Section, applicable to each affected unit at the source . Each CAIR
S02 permit shall contain elements required for a complete CAIR SO2
permit application under subsection (b)(2)
of this Section .
2)
Each CAIR S02 permit shall contain federally enforceable conditions
addressing all applicable CAIR SO2 Trading Program and requirements
and shall be a complete and segregable portion of the source's entire
permit under subsection (a)(1) of this Section .
3)
No CAIR SO2 permit shall be issued and no CAIR SO2 Allowance System
Tracking account shall be established for an affected source, until the
Agency and USEPA have received a complete certificate of representation
for a CAIR designated representative or alternate designated
representative under 40 CFR 96, subpart BBB, for an source and the
affected unit at the source .
4)
For all affected units that commenced operation before July 1, 2008, the
owner or operator of such unit must submit a CAIR SO2 permit
application meeting the requirements of this Section on or before July 1,
2008 .
5)
For affected units and that commence operation on or after July 1, 2008,
and that are and are not subject to Section 39
.5 of the Act, the owner or
operator of such units must submit applications for construction and
operating permits pursuant to the requirements of Sections 39 and 39
.5 of
the Act, as applicable, and 35 Ill . Adm. Code 201 and such applications
must specify that they are applying for CAIR SO2 permits, and must
address the CAIR S02 permit application requirements of this Section .
b)
Permit applications:
1)
Duty to apply. The owner or operator of any source with one or more
affected units shall submit to the Agency a CAIR S02 permit application
for the source covering each affected unit under subsection (b)(2)
of this
Section 225 .325
Trading Program
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
Section by the applicable deadline in subsection (a)(4)
or (a)(5) of this
Section
. The owner or operator of any source with one or more affected
units shall reapply for a CAIR S02 permit for the source as required by
this Subpart, 35 Ill . Adm
. Code 201, and, as applicable, Sections 39 and
39.5 of the Act .
2)
Information requirements for CAIR S02 permit applications
. A complete
CAR S02
permit application shall include the following elements
concerning the source for which the application is submitted :
A)
Identification of the source, including plant name
. The ORIS
(Office of Regulatory Information Systems) or facility code
assigned to the source by the Energy Information Administration
shall also be included, if applicable
;
B)
Identification of each affected unit at the source
; and
C)
The compliance requirements applicable to each affected unit as set
forth in Section 225 .310 of this Subpart
.
3)
An application for a CAIR S02 permit shall be treated as a modification of
the affected source's existing federally enforceable permit, if such a
permit has been issued for that affected source, and shall be subject to the
same procedural requirements
. When the Agency issues a CAR S02
permit pursuant to the requirements of this Section, it shall be incorporated
into and become part of that affected source's existing federally
enforceable permit .
a)
The CAR S02 Trading Program is administered by USEPA . CAIR S02
allowances are determined by USEPA pursuant to the Acid Rain Program, Title
IV of the CAA, 42 U.S.C. § 7651
. The amount of such CAIR S02 allowances to
be credited to an affected source's CAIR S02 Allowance Tracking System
account for an affected unit shall be determined by USEPA .
b)
A CAIR S02 allowance is a limited authorization to emit S02 during the calendar
year for which the allowance is allocated or any calendar year thereafter under the
CAIR S02 Trading Program as follows :
Section 225 .400
Purpose
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
1)
For a control period in a year before 2010, the retirement ratio shall be one
ton of SO
2
to 1 .0 CAIR SO2
allowance, except as provided for in the
compliance deductions under 40 CFR § 96
.254(b);
2)
For a control period in 2010 through 2014, the retirement ratio shall be
one ton of SO2 to 2.0
CAIR SO2 allowances, except as provided for in the
compliance deductions under 40 CFR § 96
.254(b); and
3)
For a control period in 2015 or later, the retirement ration shall be one ton
of SO2 to 2 .86 CAIR SO 2
allowances, except as provided for in the
compliance deductions under 40 CFR § 96
.254(b) .
SUBPART D
: CAIR NO, ANNUAL TRADING PROGRAM
The
electric
purpose
generating
of this Subpart
units (EGU)
is to
by
control
determining
the annual
allocations
emissions
and
of nitrogen
implementing
oxidesthe
(NOCAIR
.)
fromNO,
Annual Trading Program.
Section 225
.405
Applicability
a)
A fossil fuel-fired stationary boiler, combustion turbine or combined cycle system
is an electric generating unit if it serves a generator that has a nameplate capacity
greater than 25 MWe and produces electricity for sale and is not included in
Appendix D of 35 Ill . Adm
. Code Part 217
. An electric generation unit is subject
to the NO, Trading Program contained in this Subpart and is a CAIR NO, unit or
affected unit for the purposes of this Subpart .
b)
Notwithstanding subsection (a) of this Section, an EGU shall not be an affected
unit and is not subject to the NO, Trading Program contained in this Subpart if it
meets
as followsthe
requirements
:
of either subsection (b)(1)(A)
or (b)(2)(A)
of this Section,
1)
A unit that:
A)
Meets
this Partthe ;
definition
and
of a cogeneration unit in Section 225
.130 of
i)
Qualifies as a cogeneration unit during the 12-month period
starting on the date the unit first produces electricity and
2)
A unit that :
ILLINOIS REGISTER
A)
Qualifies as a solid waste incineration unit as defined by Section
129(g) of the CAA [42 U .S.C
. § 7429(g)] ; and
i)
Commences operation on or after January 1, 1985
; and
ii)
Has an average annual fuel consumption of non-fossil fuel
for the first three calendar years of operation exceeding 80
percent (on a Btu basis) and an average annual fuel
consumption of non-fossil fuel for any three consecutive
calendar years after 1990 exceeding 80 percent (on a Btu
basis).
B)
If a unit qualifies as a solid waste incineration unit and meets the
requirements of subsection
(b)(2)(A) of this Section for at least
three consecutive calendar years, but subsequently no longer meets
all such requirements, the unit shall become an affected unit
starting on the January 1 after which the unit has an average annual
fuel consumption of fossil fuel of 20 percent or more
.
Section 225.410
Compliance Requirements
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
continues to qualify as a cogeneration unit ; and
ii)
Does not serve at any time, since the later of November 15,
1990, or the start-up of the unit's combustion chamber, a
generator with a nameplate capacity of more than 25 MWe,
and which supplies in any calendar year more than one-
third of the unit's potential electrical output capacity or
219,000 MWh, whichever is greater, to a utility power
distribution system for sale .
B)
If a unit qualifies as a cogeneration unit during the 12-month
period starting on the date the unit first produces electricity but
subsequently no longer qualifies as a cogeneration unit, the unit
shall be subject to subsection (a) of this Section starting on the
January 1 after which the unit first no longer qualifies as a
cogeneration unit
.
a)
The owner or operator of an affected unit shall comply with the requirements of
b)
Permit requirements :
c)
Monitoring requirements :
d)
Emission requirements:
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
the CAIR NO, Annual Trading Program for Illinois are set forth in this Subpart
and 40 CFR 96, subpart AA (NO, Annual Trading Program General Provisions,
(CAIR
excluding
Designated
40 CFR §§
Representative
96.104,
96.105(b)(2),
for CAIR
and
NOx96Sources).106)
; 40
; 40
CFR
CFR
96,
96,
subpart
subpartBB
NOFF
(CAIR
x
Allowance
NO, Allowance
Transfers)Tracking
; and 40 CFR
System)96,
subpart
; 40 CFR
HH
96,
(Monitoring
subpart GG
and(CAIR
Reporting)
; as incorporated by reference in Section 225
.140 of this Part
.
1)
The owner or operator of each source with one or more affected units at
the source must apply for a permit issued by the Agency with federally
enforceable conditions covering the CAIR NO, Annual Trading Program
("CAIR NO,, permit") that complies with the requirements of Section
225 .420 of this Subpart (Permit Requirements)
.
2)
The owner or operator of each affected source and each affected unit at the
source must operate the affected unit in compliance with such CAIR NO,
permit.
I)
The owner or operator of each affected source and each affected unit at the
source must comply with the monitoring requirements of 40 CFR 96,
subpart HH and Section 225
.450 of this Subpart
. The CAR designated
representative of each affected source and each affected unit at the
affected source must comply with those sections of the monitoring
requirements of 40 CFR 96, subpart HH, applicable to a CAR designated
representative .
2)
The compliance of each affected unit with the NO, emissions limitation
under subsection (d) of this Section shall be determined by the emissions
measurements recorded and reported in accordance with 40 CFR 96,
subpart HH .
1)
By the allowance transfer deadline, March 1, 2010, and by March 1 of
each subsequent year, the allowance transfer deadline, the CAIR
designated representative of each affected source and each affected unit at
the source shall hold allowances available for compliance deductions
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
under 40 CFR § 96
.154(a) in the affected source's CAIR NO, compliance
account
. The number of allowances held shall not be less than the tons of
NO, emissions for the control period from all affected units at the source,
rounded to the nearest whole ton, as determined in accordance with 40
CFR 96, subpart HH, plus any number of allowances necessary to account
for actual utilization, including, but not limited to testing, start-up,
malfunction, and shut down
.
2)
Each ton of NO, emitted in excess of the number of CAIR NO,
allowances held by the owner or operator for each affected unit in its
CAIR NO, compliance account for each control period shall constitute a
separate violation of this Subpart and the Act
.
3)
Each affected unit shall be subject to the monitoring and compliance
requirements of subsections (c)(1)
and (d)(1) of this Section starting on the
later of January 1, 2009, or the deadline for meeting the unit's monitoring
certification requirements under 40 CFR § 96
.170(b)(1) or (b)(2) .
4)
CAIR NO, allowances shall be held in, deducted from, or transferred
among allowance accounts in accordance with this Subpart and 40 CFR
96, subparts FF and GG .
5)
In order to comply with the requirements of subsection
(d)(1) of this
Section, a CAIR NO, allowance may not be utilized for a control period in
a year prior to the year for which the allowance is allocated
.
6)
A CAIR NO, allowance allocated by the Agency or USEPA under the
CAIR NO, Annual Trading Program is a limited authorization to emit one
ton of NO, in accordance with the CAIR NO, Trading Program
. No
provision of the CAIR NO, Trading Program, the CAIR NO, permit
application, the CAIR NO, permit, or a retired unit exemption under 40
CFR § 96
.105, and no provision of law, shall be construed to limit the
authority of the United States or the State to terminate or limit this
authorization.
7)
A CAR NO, allowance allocated by the Agency or USEPA under the
CAR NO, Annual Trading Program does not constitute a property right
.
8)
Upon recordation by USEPA under 40 CFR 96, subpart FF or 40 CFR 96,
subpart GG, every allocation, transfer, or deduction of an allowance to or
from a CAIR NO
. source compliance account is deemed to amend
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
automatically, and become a part of, any CAIR NO, permit of the affected
source
. This automatic amendment of the CAIR NO, permit shall be
deemed an operation of law and will not require any further review
.
e)
Recordkeeping and reporting requirements :
1)
Unless otherwise provided, the owner or operator of the affected source
and each affected unit at the source shall keep on site at the source each of
the documents listed in subsections (e)(1)(A) through (e)(1)(E)
of this
Section for a period of five years from the date the document is created .
This period may be extended for cause, at any time prior to the end of five
years, in writing by the Agency or USEPA .
A)
The certificate of representation for the CAIR designated
representative for the source and each affected unit at the source,
all documents that demonstrate the truth of the statements in the
certificate of representation, provided that the certificate and
documents must be retained on site at the source beyond such five-
year period until such documents are superseded because of the
submission of a new certificate of representation under 40 CFR §
96.113,
changing the CAIR designated representative .
B)
All emissions monitoring information, in accordance with 40 CFR
96, subpart HH .
C)
Copies of all reports, compliance certifications, and other
submissions and all records made or required under the CAIR NO,
Annual Trading Program or documents necessary to demonstrate
compliance with the requirements of the CAIR NO, Annual
Trading Program or with the requirements of this Subpart .
D)
Copies of all documents used to complete a CAIR NO, permit
application and any other submission under the CAIR NO, Annual
Trading Program.
E)
Copies of all records and logs for gross electrical output and useful
thermal energy required by Section 225 .450 of this Subpart
.
2)
The CAIR designated representative of an affected source and each
affected unit at the source must submit to the Agency and USEPA the
reports and compliance certifications required under the CAIR NO x
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
Annual Trading Program, including those under 40 CFR 96, subpart HH
.
f)
Liability :
1)
No revision of a permit for an affected unit shall excuse any violation of
the requirements of this Subpart or the requirements of the CAIR NO,
Annual Trading Program .
g)
ILLINOIS REGISTER
2)
Each affected source and each affected unit shall meet the requirements of
the CAIR NO, Annual Trading Program
.
3)
Any provision of the CAIR NO, Annual Trading Program that applies to
an affected source (including any provision applicable to the CAIR
designated representative of an affected source) shall also apply to the
owner and operator of such affected source and to the owner and operator
of each affected unit at the source.
4)
Any provision of the CAIR NO, Annual Trading Program that applies to
an affected unit (including any provision applicable to the CAIR
designated representative of an affected unit) shall also apply to the owner
and operator of such affected unit
. Except with regard to the requirements
applicable to affected units with a common stack under 40 CFR 96,
subpart HH, the owner, the operator, and the CAIR designated
representative or alternate designated representative of an affected unit
shall not be liable for any violation by any other affected unit of which
they are not an owner or operator or the CAIR designated representative
.
5)
The CAIR designated representative of an affected unit that has excess
emissions in any control period shall surrender the allowances as required
for deduction under 40 CFR § 96
.154(d)(1).
6)
The owner or operator of an affected unit that has excess NO, emissions in
any control period shall pay any fine, penalty, or assessment or comply
with any other remedy imposed under the Act and 40 CFR § 96
.154(d)(2) .
Effect on other authorities
. No provision of the CAIR NO, Annual Trading
Program, a CAIR NO, permit application, a CAIR NO, permit, or a retired unit
exemption under 40 CFR § 96
.105 shall be construed as exempting or excluding
the owner and operator and, to the extent applicable, the CAIR designated
representative of an affected source or an affected unit, from compliance with any
other regulation promulgated under the CAA, the Act, any State regulation or
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
permit, or a federally enforceable permit .
Section 225.415
Appeal Procedures
The appeal procedures for decisions of USEPA under the CAIR NO, Annual Trading Program
are set forth in 40 CFR 78, as incorporated by reference in Section 225 .140 of this Part
.
Section 225 .420
Permit Requirements
a)
Permit requirements :
1)
The owner or operator of each source with an affected unit is required to
submit a complete permit application addressing all applicable CAIR NO,
Annual Trading Program requirements for a permit meeting the
requirements of this Section, applicable to each affected unit at the source
.
Each CAIR NO,, permit shall contain elements required for a complete
CAIR NO, permit application under subsection (b)(2)
of this Section .
2)
Each CAIR NO, permit shall contain federally enforceable conditions
addressing all applicable CAIR NO, Annual Trading Program
requirements and shall be a complete and segregable portion of the
source's entire permit under subsection (a)(1)
of this Section .
3)
No CAIR NO, permit shall be issued, and no CAIR NO, compliance
account shall be established for an affected source, until the Agency and
USEPA have received a complete certificate of representation for a CAIR
designated representative under 40 CFR 96, subpart BB, for the affected
source and the affected unit at the source
.
4)
For all affected units that commenced operation before July 1, 2007, the
owner or operator of such unit must submit a CAIR NO, permit
application meeting the requirements of this Section on or before July 1,
2007.
5)
For all affected units and that commence operation on or after July 1,
2008, the owner or operator of such units must submit applications for
construction and operating permits pursuant to the requirements of
Sections 39 and 39 .5 of the Act, as applicable, and 35 Ill
. Adm . Code 201
and such applications must specify that they are applying for CAIR NO,
permits, and must address the CAIR NO, permit application requirements
of this Section
.
ILLINOIS REGISTER
b)
Permit applications:
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
1)
Duty to apply
. The owner or operator of any source with one or more
affected units shall submit to the Agency a CAIR NO, permit application
for the source covering each affected unit under subsection
(b)(2) of this
Section by the applicable deadline in subsection
(a)(4) or (a)(5) of this
Section
. The owner or operator of any source with one or more affected
units shall reapply for a CAIR NOx
permit for the source as required by
this Subpart, 35111 . Adm
. Code 201, and, as applicable, Sections 39 and
39.5 of the Act .
2)
Information requirements for CAIR NO, permit applications
. A complete
CAIR NO, permit application shall include the following elements
concerning the source for which the application is submitted
:
A)
Identification of the source, including plant name
. The ORIS
(Office of Regulatory Information Systems) or facility code
assigned to the source by the Energy Information Administration
shall also be included, if applicable
;
B)
Identification of each affected unit at the source
; and
C)
The compliance requirements applicable to each affected unit as
set forth in Section 225 .410 of this Subpart
.
3)
An application for a CAIR NO, permit shall be treated as a modification
of the affected source's existing federally enforceable permit, if such a
permit has been issued for that source, and shall be subject to the same
procedural requirements
. When the Agency issues a CAIR NO, permit
pursuant to the requirements of this Section, it shall be incorporated into
and become part of that source's existing federally enforceable permit .
Section 225 .425
Annual Trading Budget
The CAIR NO, Annual Trading budget available for allowance allocations for each control
period shall be determined as follows :
a)
The total base CAIR NO, Annual Trading budget is 76,230 tons per control
period for the years 2009 through 2014, subject to a reduction for two set-asides,
the New Unit Set-Aside (NUSA) and the Clean Air Set-Aside (CASA)
. Five
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
percent of the budget shall be allocated to the NUSA and 25 percent shall be
allocated to the CASA, resulting in a CAIR NO, Annual Trading budget of
53,361 tons available for allocation per control period pursuant to Section
225 .440 of this Subpart
. The requirements of the NUSA are set forth in Section
225.445 of this Subpart, and the requirements of the CASA are set forth in
Sections 225.455 through 225 .470 of this Subpart .
b)
The total base CAIR NO, Annual Trading budget is 63,525 tons per control
period for the year 2015 and thereafter, subject to a reduction for two set-asides,
the NUSA and the CASA . Five percent of the budget shall be allocated to the
NUSA and 25 percent shall be allocated to the CASA, resulting in a CAIR NO,
Annual Trading budget of 44,468 tons available for allocation per control period
pursuant to Section 225 .440 of this Subpart .
c)
If USEPA adjusts the total base CAIR NO, Annual Trading budget for any
reason, the Agency shall adjust the base CAIR NO, Annual Trading budget and
the CAIR NO, Annual Trading budget available for allocation, accordingly.
Section 225 .430
Timing for Annual Allocations
a)
By October 31, 2006, the Agency shall submit to USEPA the CAIR NO,
allowance allocations, in accordance with Sections 225 .435 and 225 .440 of this
Subpart, for the 2009, 2010, and 2011 control periods .
b)
By October 31, 2009, and October 31 of each year thereafter, the Agency shall
submit to USEPA the CAIR NO, allowance allocations in accordance with
Sections 225.435 and 225 .440 of this Subpart, for the control period three years
after the year of the applicable deadline for submission under this Section . For
example, on October 31, 2009, the Agency shall submit to USEPA the allocations
for the 2012 control period .
c)
The Agency shall allocate allowances from the NUSA to affected units that
commence commercial operation on or after January 1, 2006 . The Agency shall
report these allocations to USEPA by February 15 after the applicable control
period
. For example, on February 15, 2010, the Agency shall submit to USEPA
the allocations from the NUSA for the 2009 control period
.
d)
The Agency shall allocate allowances from the CASA to energy efficiency,
renewable energy, and clean technology projects pursuant to the criteria in
Sections 225 .455 through 225 .470 of this Subpart . The Agency shall report these
allocations to USEPA by December 1 of each year. For example, on December,
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
1, 2010, the Agency shall submit to USEPA the allocations from the CASA for
the 2010 control period, based on reductions made in the 2009 control period .
Section 225 .435
Methodology for Calculating Annual Allocations
The Agency shall calculate converted gross electrical output (CGO), in MWh, for each affected
unit that has operated during at least one calendar year prior to the calendar year in which the
Agency reports the allocations to USEPA as follows :
a)
For control periods 2009, 2010, and 2011, the unit's converted gross electrical
output (CGO) shall be :
1)
If the unit has four or five control periods of data, then the gross electrical
output (GO) shall be the average of the unit's three highest gross electrical
outputs from the 2001, 2002, 2003, 2004, or 2005 control periods
. If the
unit has three or fewer control periods of gross electrical output data, the
gross electrical output shall be the average of those control periods. If the
unit does not have gross electrical output for the 2004 and 2005 control
periods, the gross electrical output shall be the gross electrical output data
from the 2005 control period . If the unit does not have gross electrical
output, heat input shall be used pursuant to subsection (a)(2)
of this
Section
. If a generator is served by two or more units, the gross electrical
output of the generator shall be attributed to each unit in proportion to the
unit's share of the total control period heat input of such units for the
control period
. The unit's converted gross electrical output (CGO) shall
be calculated as follows :
A)
If the unit is coal-fired :
CGO (in MWh) = GO x MWh x 1.0;
B)
If the unit is oil-fired
:
CGO (in MWh) = GO x MWh x 0.6 ;
C)
If the unit is neither coal-fired nor oil-fired
:
CGO (in MWh) = GO x MWh x 0.4
.
2)
If gross electrical output data is not provided to the Agency, heat input
(HI) shall be used
. If the unit has four or five control periods of data, the
average of the unit's three highest heat input's from the 2001, 2002, 2003,
2004 or 2005 control period, shall be used
. If the unit has heat inputs from
the 2003, 2004, or 2005 control period, the heat input shall be the average
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of those years . If the unit does not have heat input from the 2004 and
2005 control periods, the heat input from the 2005 control period shall be
used. The unit's converted gross electrical output (CGO) shall be
calculated as follows :
A)
If the unit is coal-fired :
CGO (in MWh) = HI (in mmBtu) x 0.0967 ;
B)
If the unit is oil-fired
:
CGO (in MWh) = HI (in mmBtu) x 0.0580 ; or
C)
If the unit is neither coal-fired nor oil-fired
:
CGO (in MWh) = HI (in mmBtu)
x
0.0387.
b)
For control period 2012 and thereafter, the unit's gross electrical output shall be
the average of the unit's two most recent years of control period gross electrical
output, if available ; otherwise the unit's most recent control period's gross
electrical output . If a generator is served by two or more units, the gross electrical
output of the generator shall be attributed to each unit in proportion to the unit's
share of the total control period heat input of such units for the control period . The
unit's converted gross electrical output shall be calculated as follows
:
1)
If the unit is coal-fired :
CGO (in MWh)=GO x 1 .0;
2)
If the unit is oil-fired :
CGO (in MWh) = GO x0.6
; or
3)
If the unit is neither coal-fired nor oil-fired :
CGO (in MWh) = GO x 0.4 .
c)
For a unit that is a combustion turbine or boiler and has equipment used to
produce electricity and useful thermal energy for industrial, commercial, heating,
or cooling purposes through the sequential use of energy, the Agency shall add
the converted gross electrical output calculated for electricity pursuant to
subsections (a) or (b) of this Section to the converted useful thermal energy
(CUTE) to determine the total converted gross electrical output for the unit
(TCGO). The Agency shall determine the converted useful thermal energy by
using the average of the unit's control period useful thermal energy for the prior
two control periods, if available, otherwise the unit's control period useful
thermal output for the prior year shall be used . The converted useful thermal
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energy shall be determined using the following equations
:
1)
If the unit is coal-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.2930 ;
2)
If the unit is oil-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.1758; or
3)
If the unit is neither coal-fired nor oil-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.1172
.
d)
The affected unit's gross electrical output and converted useful thermal energy in
subsections (a)(1), (b),
and (c) of this Section for each control period shall be
based on the best available data reported or available to the Agency for the
affected unit pursuant to the provisions of Section 225
.450 of this Subpart .
e)
The affected unit's heat input in subsection (a)(2)
of this Section for each control
period shall be determined in accordance with 40 CFR 75, as incorporated by
reference in Section 225
.140 of this Part.
Section 225 .440
Annual Allocations
a)
For the 2009 control period, and each control period thereafter, the Agency shall
allocate CAIR NO, allowances to all affected units in Illinois for
which the
Agency has calculated the total converted gross electrical output pursuant to
Section 225.435
of this Subpart, a total amount of CAIR NO, allowances equal to
tons of NO, emissions in the CAIR NO, Annual Trading budget available for
allocation as determined in Section 225
.525 of this Subpart and allocated pursuant
to Section 225
.440 of this Subpart .
b)
The Agency shall allocate CAIR NO, allowances to each affected unit on a pro-
rata basis using the unit's total converted gross electrical output calculated
pursuant to Section 225 .435 of this Subpart
. If there are insufficient allowances
to allocate whole allowances, such unallocated allowances shall be retained by the
Agency and shall be available for allocation in later control periods
.
Section 225 .445
New Unit Set-Aside (NUSA)
For the 2009 control period and each control period thereafter, the Agency shall allocate CAIR
NO, allowances from the NUSA to affected units that commenced commercial operation on or
after January 1, 2006, and do not yet have an allocation for the particular control period pursuant
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to Section 225
.440 of this Subpart, in accordance with the following procedures :
a)
Beginning with the 2009 control period and each control period thereafter, the
Agency shall establish a separate NUSA for each control period
. Each NUSA
shall be allocated CAIR NO, allowances equal to 5 percent of the amount of tons
of NO, emissions in the base CAIR NO, Annual Trading budget in Section
225 .425 of this Subpart .
b)
The CAIR designated representative of such an affected unit may submit to the
Agency a request, in a format specified by the Agency, to be allocated CAIR NO,
allowances from the NUSA starting with the first control period in which the new
unit commences commercial operation and until the first control period for which
the unit may use CAIR NO, allowances allocated to the unit under Section
225.440 of this Subpart
. The NUSA allowance allocation request may only be
submitted after a new unit has operated during one control period, and no later
than January 15 after the control period for which allowances from the NUSA are
being requested .
c)
In a NUSA allowance allocation request under subsection (b) of this Section, the
CAIR designated representative must provide in its request information for gross
electrical output and useful thermal energy, if any, for the new affected unit for
that control period .
d)
The Agency shall allocate allowances from the NUSA to a new affected unit
using the following procedures
:
1)
For each new affected unit that has operated in at least one control period,
the unit's gross electrical output for the most recent control period shall be
used to calculate the unit's gross electrical output
. If a generator is served
by two or more units, the gross electrical output of the generator shall be
attributed to each unit in proportion to the unit's share of the total control
period heat input of such units for the control period
. The new unit's
converted gross electrical output shall be calculated as follows
:
A)
If the unit is coal-fired :
CGO (in MWh) = GO x 1 .0;
B)
If the unit is oil-fired
:
CGO (in MWh) = GO x 0.6
; or
C)
If the unit is neither coal-fired nor oil-fired
:
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CGO (in MWh) = GO x 0.4.
2)
If the unit is a combustion turbine or boiler and has equipment used to
produce electricity and useful thermal energy for industrial, commercial,
heating, or cooling purposes through the sequential use of energy, the
Agency shall add the converted gross electrical output calculated for
electricity pursuant to subsection (c)(1) of this Section to the converted
useful thermal energy to determine the total converted gross electrical
output for the unit . The Agency shall determine the converted useful
thermal energy using the unit's useful thermal energy for the most recent
control period . The converted useful thermal energy shall be determined
using the following equations :
A)
If the unit is coal-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.2930
;
B)
If the unit is oil-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.1758; or
C)
If the unit is neither coal-fired nor oil-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.1172
.
3)
The gross electrical output and useful thermal energy in subsections (d)(1)
and (d)(2) of this Section for each control period shall be based on the best
available data reported or available to the Agency for the affected unit
pursuant to the provisions of Section 225 .450 of this Subpart .
4)
The Agency shall determine a unit's un-prorated allocation (UAY,) using
the unit's converted gross electrical output (CGO) plus the unit's
converted useful thermal energy, if any, calculated in subsections
(d)(1)
and (d)(2) of this Section, converted to approximate NO, tons (the unit's
un-prorated allocation), as follows
:
UA
=
TCGO2000lbs/tonY *(L01bs/MWh)
Where:
UA Y
un-prorated allocation to a new affected
unit.
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TCGO Y
total converted gross electrical output for a
new affected unit
.
5)
The Agency shall allocate CAIR NO, allowances from the NUSA to new
affected units as follows :
A)
If the NUSA for the control period for which CAIR NO,
allowances are requested has a number of allowances greater than
or equal to the total un-prorated allocations for all new units
requesting allowances, the Agency shall allocate the number of
allowances using the un-prorated allocation determined for that
unit pursuant to subsection (d)(4)
of this Section . If there are
insufficient allowances to allocate whole allowances, such
unallocated allowances shall be retained by the Agency and shall
be available for allocation in a later control period .
B)
If the NUSA for the control period for which the allowances are
requested has a number of CAIR NO, allowances less than the
total un-prorated allocation to all new affected units requesting
allocations, the Agency shall allocate the available allowances for
new affected units on a pro-rata basis, using the un-prorated
allocation determined for that unit pursuant to subsection
(d)(4) of
this Section
. If there are insufficient allowances to allocate whole
allowances, such unallocated allowances shall be retained by the
Agency and shall be available for allocation in a later control
period.
C)
If the gross electrical output or useful thermal energy reported to
the Agency in subsection (d) of this Section is later determined to
be greater than the unit's actual gross electrical output or useful
thermal energy for the applicable control period, the Agency shall
reduce the unit's allocation from the NUSA for the current control
period to account for the excess allowances allocated in the prior
control period or periods .
e)
The Agency shall review each NUSA allowance allocation request under
subsection (b) of this Section . The Agency shall accept a NUSA allowance
allocation request only if the request meets, or is adjusted by the Agency as
necessary to meet, the requirements of this Section
.
0
By February 8 after the applicable control period, the Agency shall notify each
g)
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CAIR designated representative that submitted a NUSA allowance request of the
amount of CAIR NO, allowances from the NUSA, if any, allocated for the control
period to the new unit covered by the request
.
The Agency shall allocate CAIR NO, allowances to new units from the NUSA no
later than February 15 after the applicable control period .
h)
After a new affected unit has operated in one control period, it becomes an
existing unit for the purposes of Section 225 .440 of this Subpart only, and the
Agency shall allocate CAR NO x
allowances for that unit, for the control period
commencing four years in the future pursuant to Section 225 .440 of this Subpart .
For example, if a unit commences commercial operation in 2009, in 2010, the
Agency shall allocate to that unit allowances pursuant to Section 225
.440 for the
2013 control period . The new affected unit shall continue to receive CAIR NO,
allowances from the NUSA according to this Section until the unit is eligible to
use the CAIR NO, allowances allocated to the unit pursuant to Section 225 .440 of
this Subpart .
h)
If, after the completion of the procedures in subsection (c) of this Section for a
control period, any unallocated CAIR NO, allowances remain in the NUSA for
the control period, the Agency shall, at a minimum, accrue those CAIR NO,
allowances for future control period allocations to new affected units
. The
Agency may from time to time elect to retire CAIR NO, allowances in the NUSA
that are in excess of 15,881 for the purposes of continued progress toward
attainment and maintenance of National Ambient Air Quality Standards pursuant
to the CAA .
Section 225.450
Monitoring, Recordkeeping and Reporting Requirements for Gross
Electrical Output and Useful Thermal Energy
a)
By January 1, 2007, or by the date of commencing commercial operation,
whichever is later, the owner or operator of the affected unit shall install,
calibrate, maintain, and operate a wattmeter
; and shall measure gross electrical
output in megawatt-hours on a continuous basis ; and shall record the output of the
wattmeter. If a generator is served by two or more units, the information to
determine each unit's heat input for that control period shall also be recorded, so
as to allow each unit's share of the gross electrical output to be determined
. If
heat input data is used, the owner or operator shall comply with the applicable
provisions 40 CFR 75, as incorporated by reference in Section 225
.140 of this
Part.
1)
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b)
For a an affected unit that is a cogeneration unit by January 1, 2007, or by the date
the affected unit commences to produce useful thermal energy, whichever is later,
the owner or operator of an affected unit with cogeneration capabilities shall
install, calibrate, maintain, and operate meters for steam flow in lbs/hr,
temperature in degrees Fahrenheit, and pressure in PSI, to measure and record the
useful thermal energy that is produced, in mmBtu/hr, on a continuous basis
.
Owners and operators of an affected unit that produces useful thermal energy but
uses an energy transfer medium other than steam,
e.g., hot water, glycol, shall
install, calibrate, maintain, and operate the necessary meters to measure and
record the necessary data to express the useful thermal energy produced, in
mmBtu/hr, on a continuous basis . If the affected unit ceases to produce useful
thermal energy, the owner or operator may cease operation of the meters,
provided that operation of such meters shall be resumed if the affected unit
resumes production of useful thermal energy .
c)
By September 30, 2006, the owner or operator of an affected unit shall report to
the Agency the gross electrical output for control periods 2001, 2002, 2003, 2004
and 2005, if available, and, the unit's useful thermal energy data, if applicable
. If
gross electric output is not available, heat input shall be used for those control
periods 2001, 2002, 2003, 2004, and 2005 for which gross electrical output data is
not available
. If a generator is served by two or more units, the documentation
needed to determine each unit's share of the heat input of such units for that
control period shall also be submitted . If heat input data is used, the owner or
operator shall comply with the applicable provisions 40 CFR 75, as incorporated
by reference in Section 225
.140 of this Part.
d)
Beginning with year 2007, the designated representative of the affected unit shall
submit to the Agency quarterly, by no later than January 31, April 30, July 31,
and October 31 of each year, information for the affected unit's gross electrical
output, on a monthly basis, and, if applicable, the unit's useful thermal energy for
each month .
e)
The owner or operator of an affected unit shall maintain on-site the monitoring
plan detailing the monitoring system, maintenance of the monitoring system,
including quality assurance activities .
The owner or operator of an affected unit shall retain records for at least 5 years
from the date the record is created or the data collected in subsections (a) and (b)
of this Section, and the reports submitted to the Agency and USEPA in
accordance with subsections (c) and (d) of this Section
. The owner or operator of
an affected unit shall retain the monitoring plan required in subsection (e) of this
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Section for at least five years from the date that it is replaced by a new or revised
monitoring plan .
Section 225 .455
Clean Air Set-Aside (CASA)
a)
A project sponsor may apply for allowances from the CASA for sponsoring an
energy efficiency and conservation, renewable energy, or clean technology
project as set forth in Section 225
.460 of this Subpart by submitting the
application required by Section 225
.470 of this Subpart .
b)
Notwithstanding subsection (a) of this Section, a project sponsor with an affected
source that is out of compliance with this Subpart for a given control period may
not apply for allowances from the CASA for that control period
. If a source
receives CAIR NO, allowances from CASA and then is subsequently found to
have been out of compliance with this Subpart for the applicable control period or
periods, the project sponsor must restore the CAIR NO, allowances that it
received pursuant to its CASA request or an equivalent number of CAIR NO,
allowances to the CASA within six months of an Agency finding of
noncompliance
. These allowances shall be assigned to the fund from which they
were distributed .
c)
The Agency will not act as a mediator in situations where more than one project
sponsor requests CAIR NO, allowances for the same project
. If more than one
project sponsor submits an application for allowances for the same project for the
same control period, the Agency shall reject all such applications
.
d)
CAIR NO, allowances from CASA shall be allocated in accordance with the
procedures in Section 225 .475 of this Subpart
.
e)
The project sponsor may submit an application that aggregates two or more
projects under a CASA project category that would individually result in less than
one allowance, but that equal at a minimum one whole allowance when
aggregated
. The Agency shall not allocate allowances for projects totaling less
than one whole allowance after rounding
.
Section 225
.460
Energy Efficiency and Conservation, Renewable Energy, and Clean
Technology Projects
a)
Energy efficiency and conservation project means any of the following projects
implemented in Illinois
:
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1)
Demand side management projects that reduce overall power demand by
using less energy, include :
A)
Smart building management software that more efficiently
regulates power flows
.
B)
The use of or replacement to high
efficiency motors, pumps,
compressors, or steam systems
.
2)
Energy efficient new building construction projects include
:
A)
ENERGY STAR qualified new home projects
.
B)
Measures to reduce conserve energy consumption beyond the
requirements of the Illinois Energy Conservation Code for
Commercial Buildings (20 ILCS 687/6-3)
.
C)
New residential construction projects that qualify for Energy
Efficient Tax Incentives under the Energy Policy Act of 2005, 42
U
.S.C. §15801 (2005) .
3)
Supply-side energy efficiency projects include projects implemented to
improve the efficiency in electricity generation by coal-fired power plants,
and the efficiency of electrical transmission and distribution systems
.
4)
Highly efficient power generation projects, such as, but not limited to,
To
combined
be considered
cycle projects,
a highly efficient
combined
power
heat and
generation
power,
project
and microturbinesunder
this
.
subsection, a project must meet, the applicable
thresholds
listed below :
A)
For combined heat and power projects generating both electricity
and useful thermal energy for space, water, or industrial process
heat, a rated-energy efficiency of at least 60 percent
.
B)
For combined cycle projects rated at greater than 0
.50 MW, a
rated-energy efficiency of at least 50 percent
.
C)
For microturbine projects rated at or below 0
.50 MW and all other
projects, rated-energy efficiency of at least 40 percent
.
ILLINOIS REGISTER
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b)
Renewable energy project means any of the following projects implemented in
Illinois:
1)
Zero-emission electric generating projects, including wind, solar (thermal
or photovoltaic), and hydropower projects . Eligible hydropower plants are
restricted to new generators, that are not replacements of existing
generators, that commence operation on or after January 1, 2006, and do
not involve the significant expansion of an existing dam or the
construction of a new dam
.
2)
Renewable energy units are those units that generate electricity using more
than 50 percent of the heat input, on an annual basis, from dedicated crops
grown for energy production or the capture systems for methane gas from
landfills, water treatment plants or sewage treatment plants, and organic
waste biomass, and other similar sources of non-fossil fuel energy .
Renewable energy projects do not include energy from incineration by
burning or heating of waste wood, tires, garbage, general household,
institutional lunchroom or office waste, landscape waste, or construction
or demolition debris .
c)
Clean technology project for reducing emissions from producing electricity and
useful thermal energy means any of the following projects implemented in
Illinois:
1)
Air pollution control equipment upgrades at existing coal-fired electric
generating units, as follows : installation of flue gas desulfurization (FGD)
for control of SO2 emissions ; installation of a baghouse for control of
particulate matter emissions
; and installation of selective catalytic
reduction (SCR), selective non-catalytic reduction (SNCR), or other add-
on control devices for control of NO, emissions
. Air pollution control
upgrade projects do not include the addition of low NO, burners, overfired
air techniques or gas reburning techniques for control of NO, emissions ;
projects involving flue gas conditioning techniques or upgrades, or
replacement of electrostatic precipitators ; or addition of activated carbon
injection or other sorbent injection system for control of mercury
. For this
purpose, a unit shall be considered "existing" after it has been in
commercial operation for at least eight years .
2)
Clean coal technologies projects include :
A)
Integrated gasification combined cycle (IGCC) plants .
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B)
Fluidized bed coal combustion .
d)
Energy efficiency and conservation, renewable energy, or clean technology
projects listed in subsections (a) through (c) of this Section shall not include
nuclear power projects; projects required to meet emission standards or
technology requirements under State or federal law or regulation (except for the
installation of a baghouse) ; or projects used to meet the requirements of a court
order or consent decree; or a Supplemental Environmental Project (SEP) . CASA
allowances shall not be allocated to such projects .
e)
Applications for projects that that are not specifically listed in subsections (a)
through (c) of this Section, and that are not specifically excluded by subsection
(d) of this Section, may be submitted to the Agency . Such application shall
designate which category or categories from those listed in subsections (a)(1)
through (c)(2)(B)
of this Section best fits the proposed project and the applicable
formula under Section 225 .465(b) of this Section to calculate the number of
allowances that it is requesting . The Agency shall determine whether the
application is approvable based on a sufficient demonstration by the project
sponsor that the project is a new type of energy efficiency, renewable energy, or
clean technology project, similar in its effects as the projects specifically listed in
subsection (a) through (c) of this Section .
0
Early adopter projects include projects that meet the criteria for any energy
efficiency and conservation, renewable energy, or clean technology projects listed
in subsections (a) , (b), (c),
and (e) of this Section and commence construction
between July 1, 2006, and December 31, 2012.
Section 225.465
CASA Allowances
a)
The CAIR NO, allowances for the CASA for each control period shall be
assigned to the following categories of projects :
Phase I
(2009-2014)
Phase II
(2015 and
thereafter)
1)
Energy Efficiency and Conservation/
Renewable Energy
9149
7625
2)
Air Pollution Control Equipment
3811
3175
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b)
The following formulas shall be used to determine the number of CASA
allowances that may be allocated to a project per control period :
1)
For an energy efficiency and conservation project pursuant to Sections
225 .460(a)(1) through (a)(3) of this Subpart, the number of allowances
shall be calculated using the number of megawatt hours of electricity that
was not consumed during a control period and the following formula :
A
= (MWh,) x (1
.5 lb/MWh) / 2000 lb
Where :
A
-
The number of allowances for a particular project .
MWhc =
The number of megawatt hours of electricity
conserved during a control period by a project .
2)
For a zero emission electric generating projects pursuant to Section
225 .460(b)(1) of this Subpart, the number of allowances shall be
calculated using the number of megawatt hours of electricity generated
during a control period and the following formula :
A
= (MWhg) x (2.0 lb/MWh) / 2000 lb
Where:
A
The number of allowances for a particular project
MWhg =
The number of megawatt hours of electricity
generated during a control period by a project .
3)
For a renewable energy emission unit pursuant to Section 225 .460(b)(2) of
this Subpart, the number of allowances shall be calculated using the
number of megawatt hours of electricity generated during a control period
and the following formula :
A
= (MWhg) x (0.5 lb/MWh) / 2000 lb
3)
Upgrades
Clean Coal Technology
4573
3810
4)
Early Adopters
1525
1271
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Where
:
A
The number of allowances for a particular project .
MWhg =
The number of MW hours of electricity generated
during a control period by a project
.
4)
For an air pollution control equipment upgrade project pursuant to Section
225
.460(c)(1) of this Subpart, the number of allowances shall be
calculated as follows :
A)
For NO, or SO2
control projects, by determining the difference in
emitted NO, or SO2 per control period using the emission rate
before and after replacement or improvement, and the following
formula
:
A = (MWhg)
x K x (ER,,lb/MWh - ERA
Ib/MWh) / 2000 lb
Where
:
A
=
The number of allowances for a particular
project .
MWhg =
The number of megawatt hours of electricity
generated during a control period by a
project.
K
The pollutant factor : for
NO,,,
K= 0.1
; and
for SO2, K = 0.05
.
ER,
Average NO, or SO
2
emission rate based on
CEMS data from the most recent two
control periods prior to the replacement or
improvement of the control equipment in
lb/MWh.
ERA =
Annual NO, or SO2
average emission rate
for the applicable control period data based
on CEMS data in lb/MWh .
B)
For a baghouse project:
A = (MWhg) x (0.2lb/MWh)
/ 2000 lb
Where:
A
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A
=
The number of allowances for a
particular project.
MWhg =
The number of megawatt hours of electricity
generated during a control period or the
portion of a control period that the units
were controlled by the baghouse .
5)
For highly efficient power generation and IGCC projects pursuant to
Sections 225.460(a)(4) and (c)(2) of this Subpart, the number of
allowances shall be calculated using the number of megawatt hours of
electricity the project generates during a control period and the following
formula:
A
(MWhg) x (1 .0 lb/MWh - ER lb/MWh) / 2000 lb
Where:
A
The number of allowances for a particular project .
MWhg =
The number of megawatt hours of electricity
generated during a control period by a project .
ER
Annual average NO, emission rate based on CEMS
data in Ib/MWh .
6)
For a CASA project that commenced construction before December 31,
2012, in addition to the allowances allocated under subsections
(b)(1)
through (b)(5) of this Section, a project sponsor may also request
additional allowances under the early adopter project category pursuant to
Section 225 .460(e) of this Section based on the following formula
:
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= 1 .0+0.10xEA;
Where:
A
=
The number of allowances for a particular project as
determined in subsections (b)(1) through (b)(5) of
this Section .
A,
=
The number of allowances as determined in
subsection (b)(1), (b)(2), (b)(3), (b)(4) or (b)(5) of
this Section for a given project .
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Section 225 .470
CASA Applications
a)
A project sponsor may request allowances if the project commenced construction
on or after the dates listed below . The project sponsor may request and be
allocated allowances from more than one CASA category for a project, if
applicable .
1)
Demand side management, energy efficient new construction, and supply
side energy efficiency and conservation projects that commenced
construction on or after January 1, 2003 ;
2)
Fluidized bed coal combustion projects, highly efficient power generation
operations projects, or renewable energy emission units, which
commenced construction on or after January 1, 2001 ; and
3)
All other projects on or after July 1, 2006 .
b)
Beginning with the 2009 control period and each control period thereafter, a
project sponsor may request allowances from the CASA . The application must be
submitted to the Agency by May I of the control period for which the allowances
are being requested.
c)
The allocation shall be based on the electricity conserved or generated in the
control period preceding the calendar year in which the application is submitted
.
To apply for a CAR NO, allocation from the CASA, project sponsors must
provide the Agency with the following information
:
1)
Identification of the project sponsor, including name, address, type of
organization, and name(s) of the principals or corporate officials .
2)
The number of the CAIR NO, general or compliance account for the
project and the name of the associated CAIR account representative .
3)
A description of the project or projects, location, the role of the project
sponsor in the projects, and a general explanation of how the amount of
energy conserved or generated was measured, verified, and calculated, and
the number of allowances requested and the with supporting calculations
.
The number of allowances requested shall be calculated using the
applicable formula from Section 225
.470(b) of this Section .
ILLINOIS REGISTER
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4)
Detailed information to support the request for allowances, including the
following types of documentation for the measurement and verification of
the NO. emissions reductions, electricity generated, or electricity
conserved using established measurement verification procedures, as
applicable . The measurement and verification required shall depend on
the type of project proposed .
A)
As applicable, documentation of the project's base and control
period conditions and resultant base and control period energy
data, using the procedures and methods included in M& V
Guidelines : Measurement and Verification for Federal Energy
Projects, incorporated by reference in Section 225
.140 of this Part,
or other method approved by the Agency
. Examples include :
i)
Energy consumption and demand profiles ;
ii)
Occupancy type ;
iii)
Density and periods ;
iv)
Space conditions or plant throughput for each operating
period and season . (For example, in a building this would
include the light level and color, space temperature,
humidity and ventilation) ;
v)
Equipment inventory, nameplate data, location, condition ;
and
vi)
Equipment operating practices (schedules and set points,
actual temperatures/pressures) .
B)
Emissions data, including, if applicable, CEMS data
;
C)
Information for rated-energy efficiency including supporting
documentation and calculations ; and
D)
Electricity, in MWh generated or conserved for the applicable
control period .
ILLINOIS REGISTER
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5)
Notwithstanding the requirements of subsections
(c)(4)
of this Section,
applications for fewer than five allowances may propose other reliable and
applicable methods of quantification acceptable to the Agency .
6)
Any additional information requested by the Agency to determine the
correctness of the requested number of allowances, including site
information, project specifications, supporting calculations, operating
procedures, and maintenance procedures .
7)
The following certification by the responsible official for the project
sponsor and the applicable CAIR account representative for the project:
"I am authorized to make this submission on behalf of the project sponsor
and the holder of the CAIR NO, general account or compliance account
for which the submission is made. I certify under penalty of law that I
have personally examined, and am familiar with the statements and
information submitted in this application and all its attachments . Based on
my inquiry of those individuals with primary responsibility for obtaining
the information, I certify that the statements and information are to the
best of my knowledge and belief true, accurate, and complete . I am aware
that there are significant penalties for submitting false statements and
information or omitting required statements and information ."
d)
A project sponsor may request allowances from the CASA for each project a total
number of control periods not to exceed the number of control periods listed
below. After a project has been allocated allowances from CASA, subsequent
requests for the project from the project sponsor shall include the information
required by subsections
(c)(1), (c)(2), (c)(3) and (c)(7) of this Section, a
description of any changes, or further improvements made to the project, and
information specified in subsections (c)(5) and (c)(6) as specifically requested by
the Agency .
1)
For energy efficiency and conservation projects (except for efficient
operation and renewable energy projects), for a total of eight control
periods.
2)
For early adopter projects, for a total of ten control periods
.
3)
For air pollution control equipment upgrades for a total of 15 control
periods.
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3)
For renewable energy projects, clean coal technology, and highly efficient
power generation projects, for each year that the project is in operation
.
e)
A project sponsor must keep copies of all CASA applications and the
documentation used to support the application for at least five years
.
Section 225
.475
Agency Action on CASA Applications
a)
By October 1, 2009, and each October 1 thereafter, the Agency shall determine
the total number of allowances that are approvable for allocation to project
sponsors based upon the applications submitted pursuant to Section 225
.470 of
this Subpart .
1)
The Agency shall determine the number of CAIR NO, allowances that are
approvable based on the formulas and the criteria for such projects
. The
Agency shall notify a project sponsor within 90 days after receipt of an
application if the project is not approvable, the number of allowances
requested is not approvable, or additional information is needed by the
Agency to complete its review of the application
.
2)
If the total number of CAIR NO, allowances requested for approved
projects is less than or equal to the number of CAIR NO, allowances in
the CASA project category, the number of allowances that are approved
shall be allocated to each CAIR NO, compliance or general account
.
3)
If more CAIR NO, allowances are requested than the number of CAIR
NO, allowances in a given CASA project category, allowances shall be
allocated on a pro-rata basis based on the number of allowances available,
subject to further adjustment as provided for by subsection (b) of this
Section
. CAIR NO, allowances shall be allocated, transferred, or used as
whole allowances
. The number of whole allowances shall be determined
by rounding down for decimals less than 0
.5 and rounding up for decimals
of 0.5
or greater.
b)
If there are, after the completion of the procedures in subsection (a) of this
Section for a control period, any CAIR NO, allowances not allocated to a CASA
project for the control period
:
1)
The remaining allowances in each CASA project category will accrue up
to twice the number of allowances that are assigned to the project category
each control period as set forth in Section 225
.465 of this Subpart
.
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2)
For control period 2011 and thereafter, allowances in a project category
that are in excess of twice the number assign for the control period as set
forth in Section 225
.465 of this Subpart shall be redistributed to project
categories that have fewer than twice the number of allowances assigned
to that project category for the control period
.
3)
For control period 2011 and thereafter, the Agency shall then reallocate
allowances to projects that received fewer allowances than requested and
approved on a pro-rata basis, based on the total number of approved
allowances for the projects
.
4)
For control period 2011 and thereafter, if after the redistribution of
allowances pursuant to subsection (b)(2)
any allowances remain, these
allowances shall be reassigned to project categories that have fewer than
twice the number of allowances annually assigned to that project category
as set forth in Section 225
.465 of this Subpart, after the allocation in
subsection (b)(3) of this Section .
5)
The Agency shall repeat the process of allocating allowances to CASA
projects that received fewer allowances than requested and approved, and
reassigning allowances to project categories as set forth in subsections
(b)(2), (b)(3), and
(b)(4) of this Section, until no allowances remain to be
reassigned between project categories and the approved allowance
requests have been filled
. If allowances still remain unallocated, the
Agency may elect to retire any CAIR NO, allowances that remain after all
approved requests for allowances have been met and each project category
has accrued twice the number of allowances assigned for that project
category to continue progress toward attainment or maintenance of the
National Ambient Air Quality Standards pursuant to the CAA
.
Section 225
.480
Compliance Supplement Pool
In addition to the CAIR NO, allowances allocated under Section 225
.435 of this Subpart, the
USEPA has provided an additional 11,299 CAIR NO, allowances from the federal compliance
supplement pool to Illinois for the control period in 2009
. On January 1, 2009, the Agency shall
retire all 11,299 NO, allowances for public health and air quality improvements
.
SUBPART E
: CAIR NO, OZONE SEASON TRADING PROGRAM
Section 225.500
Purpose
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The purpose of this Subpart is to control the seasonal emissions of nitrogen oxides
(NO.) from
electric generating units by determining allocations and implementing the CAIR NO
x Ozone
Season Trading Program .
Section 225
.505
Applicability
a)
A fossil fuel-fired stationary boiler, combustion turbine or combined cycle system
is an electrical generating unit if it serves a generator that has a nameplate
capacity greater than 25 MWe and produces electricity for sale and is not included
in Appendix D of 35 111
. Adm. Code Part 217 . An electric generating unit is
subject to the CAIR NO, Ozone Season Trading Program contained in this
Subpart and is a CAIR NO, Ozone Season unit or affected unit for the purposes of
this Subpart .
b)
Notwithstanding subsection (a) of this Section, an EGU shall not be an affected
unit and is not subject to the CAIR NO,, Ozone Season Trading Program
contained in this Subpart if it meets the requirements of either subsection
(b)(1)(A) or (b)(2)(A) of this Section, as follows :
1)
A unit that:
A)
Meets the definition of a cogeneration unit in Section 225
.130 of
this Part; and
i)
Qualifies as a cogeneration unit during the 12-month period
starting on the date the unit first produces electricity and
continues to qualify as a cogeneration unit
; and
ii)
Does not serve at any time, since the later of November 15,
1990, or the start-up of the unit's combustion chamber, a
generator with a nameplate capacity of more than 25 MWe,
and which supplies in any calendar year more than one-
third of the unit's potential electrical output capacity or
219,000 MWh, whichever is greater, to a utility power
distribution system for sale
.
B)
If a unit qualifies as a cogeneration unit during the 12-month
period starting on the date the unit first produces electricity but
subsequently no longer qualifies as a cogeneration unit, the unit
shall be subject to subsection (a) of this Section starting on the
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January 1 after which the unit first no longer qualifies as a
cogeneration unit .
2)
A unit that :
A)
Qualifies as a solid waste incineration unit as defined by Section
129(g) of the CAA [42 U .S .C. 7429(g)] ; and
i)
Commences operation on or after January 1, 1985 ; and
ii)
Has an average annual fuel consumption of non-fossil fuel
for the first three calendar years of operation exceeding 80
percent (on a Btu basis) and an average annual fuel
consumption of non-fossil fuel for any three consecutive
calendar years after 1990 exceeding 80 percent (on a Btu
basis).
B)
If a unit qualifies as a solid waste incineration unit and meets the
requirements of subsection (b)(2)(A) of this Section for at least
three consecutive calendar years, but subsequently no longer meets
all such requirements, the unit shall become an affected unit
starting on the January 1 after which the unit has an average annual
fuel consumption of fossil fuel of 20 percent or more
.
Section 225
.510
Compliance Requirements
a)
The owner or operator of an affected unit shall comply with the requirements of
the CAIR NO,, Ozone Season Trading Program for Illinois as set forth in this
Subpart and 40 CFR 96, subpart AAAA (CAIR NO, Ozone Season Trading
Program General Provisions) (excluding 40 CFR §§ 96
.304, 96 .305(b)(2), and
96 .306)
; 40 CFR 96, subpart BBBB (CAIR Designated Representative for CAIR
NO, Ozone Season Sources)
; 40 CFR 96, subpart FFFF (CAIR NO, Ozone
Season Allowance Tracking System)
; 40 CFR 96, subpart GGGG (CAIR NO,
Ozone Season Allowance Transfers)
; and 40 CFR 96, subpart HHHH
(Monitoring and Reporting)
; as incorporated by reference in Section 225 .140 of
this Part .
b)
Permit requirements :
1)
The owner or operator of each source with one or more affected units at
the source must apply for a permit issued by the Agency with federally
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enforceable conditions covering the CAIR NO, Ozone Season Trading
Program ("CAIR NO, Ozone Season permit") that complies with the
requirements of Section 225
.520 of this Subpart (Permit Requirements) .
2)
The owner or operator of each affected source and each affected unit at the
source must operate the affected unit in compliance with such CAIR NO,
Ozone Season permit .
c)
Monitoring requirements :
1)
The owner or operator of each affected source and each affected unit at the
source must comply with the monitoring requirements of 40 CFR 96,
subpart HHHH
; 40 CFR 75 ; and Section 225
.550 of this Subpart . The
CAIR designated representative of each affected source and each affected
unit at the source must comply with those sections of the monitoring
requirements of 40 CFR 6, subpart HHHH, applicable to a CAIR
designated representative
.
2)
The compliance of each affected unit with the CAIR NO, Ozone Season
emissions limitation under subsection (d) of this Section shall be
determined by the emissions measurements recorded and reported in
accordance with 40 CFR 96, subpart HHHH .
d)
Emission requirements :
1)
By November 30, 2009, and by November 30, of each subsequent year,
the allowance transfer deadline, the CAIR designated representative of
each affected source and each affected unit at the source shall hold
allowances available for compliance deductions under 40 CFR § 96
.354(a)
in the CAIR NO, Ozone Season source's compliance account
. The
number of allowances held shall not be less than the tons of NO,
emissions for the control period from all affected units at the affected
source, rounded to the nearest whole ton, as determined in accordance
with 40 CFR 96, subpart HHHH, plus any number of allowances
necessary to account for actual utilization including, but not limited to,
testing, start-up, malfunction, and shut down
.
2)
Each ton of NO, emitted in excess of the number of CAIR NO, Ozone
Season allowances held by the owner or operator for each affected unit in
its CAIR NO, Ozone Season compliance account for each control period
shall constitute a separate violation of this Subpart and the Act
.
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3)
Each affected unit shall be subject to the monitoring and compliance
requirements of subsections (c)(1) and (d)(1)
of this Section starting on the
later of January 1, 2009, or the deadline for meeting the unit's monitoring
certification requirements under 40 CFR § 96 .370(b)(1),
(b)(2) or (b)(3) .
4)
CAIR NO, Ozone Season allowances shall be held in, deducted from, or
transferred among allowance accounts in accordance with this Subpart and
40 CFR 96, subparts FFFF and GGGG
.
5)
In order to comply with the requirements of subsection (d)(1) of this
Section, a CAIR NO, Ozone Season allowance may not be utilized for a
control period in a year prior to the year for which the allowance is
allocated.
6)
A CAIR NO, Ozone Season allowance allocated by the Agency or
USEPA under the CAIR NO, Ozone Season Trading Program is a limited
authorization to emit one ton of NO, in accordance with the CAIR NO,
Ozone Season Trading Program
. No provision of the CAIR NO, Ozone
Season Trading Program, the CAIR NO,, Ozone Season permit
application, the CAM NO, Ozone Season permit, or a retired unit
exemption under 40 CFR § 96
.305, and no provision of law, shall be
construed to limit the authority of the United States or the State to
terminate or limit this authorization.
7)
A CAIR NO, Ozone Season allowance allocated by the Agency or
USEPA under the CAIR NO, Ozone Season Trading Program does not
constitute a property right .
8)
Upon recordation by USEPA under 40 CFR 96, subpart FFFF or subpart
GGGG, every allocation, transfer, or deduction of an allowance to or from
a CAIR NO, Ozone Season source compliance account is deemed to
amend automatically, and become a part of, any CAIR NO, Ozone Season
permit of the affected source
. This automatic amendment of the CAIR
NO, Ozone Season permit shall be deemed an operation of law and will
not require any further review .
e)
Recordkeeping and reporting requirements
:
1)
Unless otherwise provided, the owner or operator of the affected source
and each affected unit at the source shall keep on site at the source each of
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the documents listed in subsections
(e)(1)(A)
through (e)(1)(E) of this
Section for a period of five years from the date the document is created
.
This period may be extended for cause, at any time prior to the end of five
years, in writing by the Agency or USEPA
.
A)
The certificate of representation for the CAJR designated
representative for the source and each affected unit at the source,
all documents that demonstrate the truth of the statements in the
certificate of representation, provided that the certificate and
documents must be retained on site at the source beyond such five-
year period until such documents are superseded because of the
submission of a new certificate of representation under 40 CFR §
96.313,
changing the CAIR designated representative
.
B)
All emissions monitoring information, in accordance with 40 CFR
96, subpart HHHH
.
C)
Copies of all reports, compliance certifications, and other
submissions and all records made or required under the CAIR NO,
Ozone Season Trading Program or documents necessary to
demonstrate compliance with the requirements of the CAIR NO,
Ozone Season Trading Program or with the requirements of this
Subpart.
D)
Copies of all documents used to complete a CAIR NO, Ozone
Season permit application and any other submission under the
CAIR NO, Ozone Season Trading Program
.
E)
Copies of all records and logs for gross electrical output and useful
thermal energy required by Section 225
.550 of this Subpart .
2)
The CAIR designated representative of an affected source and each
affected unit at the source must submit to the Agency and USEPA the
reports and compliance certifications required under the CAIR NO, Ozone
Season Trading Program, including those under 40 CFR 96, subpart
HHHH and Section 225
.550 of this Subpart
.
f)
Liability :
1)
No revision of a permit for an affected unit shall excuse any violation of
the requirements of this Subpart or the requirements of the CAIR NO,
g)
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Ozone Season Trading Program
.
2)
Each affected source and each affected unit shall meet the requirements of
the CAIR NO, Ozone Season Trading Program
.
3)
Any provision of the CAIR NO, Ozone Season Trading Program that
applies to an affected source (including any provision applicable to the
CAIR designated representative of an affected source) shall also apply to
the owner and operator of such affected source and to the owner and
operator of each affected unit at the source
.
4)
Any provision of the CAIR NO, Ozone Season Trading Program that
applies to an affected unit (including any provision applicable to the CAIR
designated representative of an affected unit) shall also apply to the owner
and operator of such affected unit
. Except with regard to the requirements
applicable to affected units with a common stack under 40 CFR 96,
subpart HHHH, the owner, the operator, and the CAIR designated
representative or alternate designated representative of an affected unit
shall not be liable for any violation by any other affected unit of which
they are not an owner or operator or the CAIR designated representative
.
5)
The CAIR designated representative of an affected unit that has excess
emissions in any control period shall surrender the allowances as required
for deduction under 40 CFR § 96 .354(d)(1).
The owner or operator of an affected unit that has excess NO, emissions in
any control period shall pay any fine, penalty, or assessment or comply
with any other remedy imposed under the Act and 40 CFR § 96
.354(d)(2) .
Effect on other authorities
. No provision of the CAIR NO, Ozone Season
Trading Program, a CAIR NO, Ozone Season permit application, a CAIR NO,
Ozone Season permit, or a retired unit exemption under 40 CFR § 96.305
shall be
construed as exempting or excluding the owner and operator and, to the extent
applicable, the CAIR designated representative of an affected source or an
affected unit, from compliance with any other regulation promulgated under the
CAA, the Act, any State regulation or permit, or a federally enforceable permit
.
Section 225
.515
Appeal Procedures
The appeal procedures for decisions of USEPA under the CAIR NO, Ozone Season Trading
Program are set forth in 40 CFR 78, as incorporated by reference in Section 225
.140 of this Part
.
Section 225 .520
Permit Requirements
a)
Permit requirements:
b)
Permit applications:
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1)
The owner or operator of each source with an affected unit is required to
submit a complete permit application addressing all applicable CAIR NO,
Ozone Season Trading Program requirements for a permit meeting the
requirements of this Section, applicable to each affected unit at the source .
Each CAIR NO, Ozone Season permit shall contain elements required for
a complete CAIR NO, Ozone Season permit application under subsection
(b)(2) of this Section .
2)
Each CAIR NO . Ozone Season pen-nit shall contain federally enforceable
conditions addressing all applicable CAIR NO, Ozone Season Trading
Program requirements and shall be a complete and segregable portion of
the source's entire permit under subsection
(a)(1)
of this Section
.
3)
No CAIR NO, Ozone Season permit shall be issued, and no CAIR NO,
Ozone Season compliance account shall be established for an affected
source, until the Agency and USEPA have received a complete certificate
of representation for a CAIR designated representative under 40 CFR 96,
subpart BBBB, for the affected source and the affected unit at the source
.
4)
For all affected units that commenced operation before July 1, 2007, the
owner or operator of such unit must submit a CAIR NO, Ozone Season
permit application meeting the requirements of this Section on or before
July 1, 2007.
5)
For all affected units and that commence operation on or after July 1,
2008, the owner or operator of such units must submit applications for
construction and operating permits pursuant to the requirements of
Sections 39 and 39 .5 of the Act, as applicable, and 35 Ill
. Adm . Code 201,
and such applications must specify that they are applying for CAIR NO,
Ozone Season permits, and must address the CAIR NO, Ozone Season
permit application requirements of this Section
.
1)
Duty to apply. The owner or operator of any source with one or more
affected units shall submit to the Agency a CAIR NO, Ozone Season
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permit application for the source covering each affected unit under
subsection (b)(2) of this Section by the applicable deadline in subsection
(a)(4) or (a)(5) of this Section . The owner or operator of any source with
one or more affected units shall reapply for a CAIR NO, Ozone Season
permit for the source as required by this Subpart, 35 Ill . Adm. Code 201,
and, as applicable, Sections 39 and 39 .5 of the Act.
2)
Information requirements for CAIR NO, Ozone Season permit
applications
. A complete CAIR NO Ozone Season permit application
shall include the following elements concerning the source for which the
application is submitted :
A)
Identification of the source, including plant name . The ORIS
(Office of Regulatory Information Systems) or facility code
assigned to the source by the Energy Information Administration
shall also be included, if applicable ;
B)
Identification of each affected unit at the source
; and
C)
The compliance requirements applicable to each affected unit as
set forth in Section 225 .5 10 of this Subpart .
3)
An application for a CAIR NO, Ozone Season permit shall be treated as a
modification of the affected source's existing federally enforceable permit,
if such a permit has been issued for that source, and shall be subject to the
same procedural requirements . When the Agency issues a CAIR NO,
Ozone Season permit pursuant to the requirements of this Section, it shall
be incorporated into and become part of that source's existing federally
enforceable permit .
Section 225 .525
Ozone Season Trading Budget
The CAIR NO, Ozone Season Trading budget available for allowance allocations for each
control period shall be determined as follows
:
a)
The total base CAIR NO, Ozone Season Trading budget is 30,701 tons per
control period for the years 2009 through 2014, subject to a reduction for two set-
asides, the NUSA and the CASA
. Five percent of the budget shall be allocated to
the NUSA and 25 percent shall be allocated to the CASA, resulting in a CAIR
NO, Ozone Season Trading budget available for allocation of 21,491 tons per
control period pursuant to Section 225 .540 of this Subpart . The requirements of
Section 225 .530
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the NUSA are set forth in Section 225 .545 of this Subpart, and the requirements
of the CASA are set forth in Sections 225.555 through 225 .570 of this Subpart .
b)
The total base CAIR NO, Ozone Season Trading budget is 28,981 tons per
control period for the year 2015 and thereafter, subject to a reduction for two set-
asides, the NUSA and the CASA . Five percent of the budget shall be allocated to
the NUSA and 25 percent shall be allocated to the CASA, resulting, in a CAIR
NO, Ozone Season Trading budget available for allocation of 20,287 tons per
control period pursuant to Section 225 .540 of this Subpart .
c)
If USEPA adjusts the total base CAIR NO, Ozone Season Trading budget for any
reason, the Agency shall adjust the base CAIR NO, Ozone Season Trading budget
CAIR NO, Ozone Season Trading budget available for allocation, accordingly .
Timing for Ozone Season Allocations
a)
By October 31, 2006, the Agency shall submit to USEPA the CAIR NO, Ozone
Season allowance allocations, in accordance with Sections 225 .535 and 225 .540
of this Subpart for the 2009, 2010, and 2011 control periods .
b)
By July 31, 2009, and July 31 of each year thereafter, the Agency shall submit to
USEPA the CAIR NO . Ozone Season allowance allocations in accordance with
Sections 225.535 and 225 .540 of this Subpart, for the control period three years
after the year of the applicable deadline for submission under this Section . For
example, on July 31, 2009, the Agency shall submit to USEPA the allocation for
the 2012 control period.
c)
The Agency shall allocate allowances from the NUSA to affected units that
commence commercial operation on or after May 1, 2006
. The Agency shall
report these allocations to USEPA by November 15 after the applicable control
period. For example, on November 15, 2009, the Agency shall submit to USEPA
the allocations for the 2009 control period .
d)
The Agency shall allocate allowances from the CASA to energy efficiency,
renewable energy, and clean technology projects pursuant to the criteria in
Sections 225.555 through 225
.570 of this Subpart . The Agency shall report these
allocations to USEPA by December 1 of each year
. For example, on December 1,
2010, the Agency shall submit to USEPA the allocations from the CASA for the
2010 control period, based on reductions made in the 2009 control period
.
Section 225.535
Methodology for Calculating Ozone Season Allocations
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The Agency shall calculate converted gross electrical output (CGO), in MWh, for each affected
unit that has operated during at least one control period prior to the calendar year in which the
Agency reports the allocations to USEPA as follows
:
a)
For control periods 2009, 2010, and 2011, the unit's converted gross electrical
output (CGO) shall be :
1)
If the unit has four or five control periods of data, then the gross electrical
output (GO) shall be the average of the unit's three highest gross electrical
outputs from the 2001, 2002, 2003, 2004, or 2005 control periods . If the
unit has three or fewer control periods of gross electrical outputs, the gross
electrical output shall be the average of those control periods . If the unit
does not have gross electrical output for the 2004 and 2005 control
periods, the gross electrical output shall be the gross electrical output from
the 2005 control period. If the unit does not have gross electrical output,
then heat input shall be used pursuant to subsection (a)(2)
of this Section .
If a generator is served by two or more units, then the gross electrical
output of the generator shall be attributed to each unit in proportion to the
unit's share of the total control period heat input of such units for the
control period
. The unit's converted gross electrical output shall be
calculated as follows :
A)
If the unit is coal-fired :
CGO (in MWh)=GO x MWh x 1.0;
B)
If the unit is oil-fired
:
CGO (in MWh) = GO x MWh x 0.6;
C)
If the unit is neither coal-fired nor oil-fired
:
CGO (in MWh) = GO x MWh x 0.4.
2)
If gross electrical output is not provided to the Agency, heat input (HI)
shall be used. If the unit has four or five control periods of data, the
average of the unit's three highest control period heat inputs from 2001,
2002, 2003, 2004 or 2005 shall be used . If the unit has heat input from the
2003, 2004, or 2005 control periods, the heat input shall be the average of
those control periods . If the unit does not have heat input from the 2004
and 2005 control periods, the heat input from the 2005 control period shall
be used. The unit's converted gross electrical output shall be calculated as
follows:
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
A)
If the unit is coal-fired
:
CGO (in MWh) = HI (in mmBtu) x 0.0967
;
B)
If the unit is oil-fired
:
CGO (in MWh) = HI (in mmBtu) x 0.0580
; or
C)
If the unit is neither coal-fired nor oil-fired :
CGO (in MWh) = HI (in mmBtu) x 0.0387 .
b)
For control period 2012 and thereafter, the unit's gross electrical output shall be
the average of the unit's two most recent control period's gross electrical output,
if available, otherwise the unit's most recent control period gross electrical output
.
If a generator is served by two or more units, the gross electrical output of the
generator shall be attributed to each unit in proportion to the unit's share of the
total control period heat input of such units for the control period
. The unit's
converted gross electrical output shall be calculated as follows
:
1)
If the unit is coal-fired :
CGO (in MWh) =GO x 1
.0 ;
2)
If the unit is oil-fired
:
CGO (in MWh) = GO x 0.6 ; or
3)
If the unit is neither coal-fired nor oil-fired
:
CGO (in MWh) = GO x 0.4
.
c)
For a unit that is a combustion turbine or boiler and has equipment used to
produce electricity and useful thermal energy for industrial, commercial, heating,
or cooling purposes through the sequential use of energy, the Agency shall add
the converted gross electrical output calculated for electricity pursuant to
subsections (a) or (b) of this Section to the converted useful thermal energy
(CUTE) to determine the total converted gross electrical output for the unit
(TCGO)
. The Agency shall determine the converted useful thermal energy by
using the average of the unit's control period useful thermal energy for the prior
two control periods, if available, otherwise the unit's control period useful
thermal output for the prior year shall be used
. The converted useful thermal
energy shall be determined using the following equations
:
1)
If the unit is coal-fired :
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
CUTE (in MWh) = UTE (in mmBtu) x 0.2930;
2)
If the unit is oil-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.1758
; or
3)
If the unit is neither coal-fired nor oil-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.1172.
d)
The affected unit's gross electrical output and converted useful thermal energy in
subsections (a)(1), (b), and (c) of this Section for each control period shall be
based on the best available data reported or available to the Agency for the
affected unit pursuant to the provisions of Section 225 .550 of this Subpart
.
C)
The affected unit's heat input in subsection
(a)(2)
of this Section for each control
period shall be determined in accordance with 40 CFR 75, as incorporated by
reference in Section 225 .140 of this Part.
Section 225
.540
Ozone Season Allocations
ILLINOIS REGISTER
a)
For the 2009 control period, and each control period thereafter, the Agency shall
allocate CAIR NO, Ozone Season allowances to all affected units in Illinois for
which the Agency has calculated the total converted gross electrical output,
including converted useful thermal energy, if any, as determined in Section
225
.535 of this Subpart, a total amount of CAIR NO, Ozone Season allowances
equal to tons of NO, emissions in the CAIR NO, Ozone Season Trading budget
available for allocation determined in Section 225 .525 of this Subpart and
allocated pursuant to Section 225
.540 of this Subpart .
b)
The Agency shall allocate CAIR NO, Ozone Season allowances to each affected
unit on a pro-rata basis using the unit's total converted gross electrical output
calculated pursuant to Section 225
.535 of this Subpart . If there are insufficient
allowances to allocate whole allowances, such unallocated allowances shall be
retained by the Agency and shall be available for allocation in later control
periods.
Section 225 .545
New Unit Set-Aside (NUSA)
For the 2009 control period and each control period thereafter, the Agency shall allocate CAIR
NO, Ozone Season allowances from the NUSA to affected units that commenced commercial
operation on or after May 1, 2006, and do not yet have an allocation for the particular control
period pursuant to Section 225
.540 of this Subpart, in accordance with the following procedures :
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
a)
Beginning with the 2009
control period and each control period thereafter, the
Agency shall establish a separate NUSA for each control period . Each new unit
set-aside shall be allocated CAIR NO, Ozone Season allowances equal to 5
percent of the amount of tons of NO, emissions in the base CAIR NO, Ozone
Season Trading budget in Section
225 .525 of this Subpart .
b)
The CAIR designated representative of such an affected unit may submit to the
Agency a request, in a format specified by the Agency, to be allocated CAIR NO,
Ozone Season allowances from the NUSA starting with the first control period in
which the new unit commences commercial operation and until the first control
period for which the unit may use CAIR NO, Ozone Season allowances allocated
to the unit under Section 225 .540 of this Subpart . The NUSA allowance
allocation request may only be submitted after a new unit has operated during one
control period, and no later than October 15
after the control period for which
allowances from the NUSA are being requested .
c)
In a NUSA allowance allocation request under subsection (b) of this Section, the
CAIR designated representative must include in its request must provide in its
request the information for the gross electrical output and useful thermal energy,
if any, for the new affected unit for that control period .
d)
The Agency shall allocate allowances from the NUSA to a new affected unit
using the following procedures:
1)
For each new affected unit that has operated during at least one control
period, the unit's gross electrical output for the most recent control period,
shall be used to calculate the unit's gross electrical output . If a generator
is served by two or more units, the gross electrical output of the generator
shall be attributed to each unit in proportion to the unit's share of the total
control period heat input of such units for the control period
. The new
unit's converted gross electrical output shall be calculated as follows :
A)
If the unit is coal-fired :
CGO (in MWh) = GO x 1.0
;
B)
If the unit is oil-fired :
CGO (in MWh) = GO x 0.6; or
C)
If the unit is neither coal-fired nor oil-fired :
CGO (in MWh) = GO x
0.4 .
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
2)
If the unit is a combustion turbine or boiler and has equipment used to
produce electricity and useful thermal energy for industrial, commercial,
heating, or cooling purposes through the sequential use of energy, the
Agency shall add the converted gross electrical output calculated for
electricity pursuant to subsection (c)(1) of this Section to the converted
useful thermal energy to determine the total converted gross electrical
output for the unit . The Agency shall determine the converted useful
thermal energy using the unit's useful thermal energy for the most recent
control period . The converted useful thermal energy shall be determined
using the following equations :
A)
If the unit is coal-fired :
CUTE (in MWh) = UTE (in mmBtu) x 0.2930;
B)
If the unit is oil-fired : CUTE (in MWh) _
UTE (in mmBtu) x 0.1758; or
C)
If the unit is neither coal-fired nor oil-fired
:
CUTE (in MWh) = UTE (in mmBtu) x 0.1172 .
3)
The gross electrical output and useful thermal energy in subsections (d)(1)
and (d)(2) of this Section for the control period in each year shall be based
on the best available data reported or available to the Agency for the
affected unit pursuant to the provisions of Section 225 .550 of this Subpart .
4)
The Agency shall determine a unit's un-prorated allocation (UAY ) using
the unit's converted gross electrical output plus the unit's converted useful
thermal energy, if any, calculated in subsections (d)(1) and (d)(2) of this
Section, converted to approximate NO, tons (the unit's un-prorated
allocation), as follows :
UA
=
TCGO2000lbs/tonY
x (1
.Olbs
/MWh)
Where:
UA
Y
un-prorated allocation to a new affected
unit.
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
TCGO Y
total converted gross electrical output for a
new affected unit .
5)
The Agency shall allocate CAIR NO, Ozone Season allowances from the
NUSA to new affected units as follows :
A)
If the NUSA for the control period for which CAIR NO, Ozone
Season allowances are requested has a number of allowances
greater than or equal to the total un-prorated allocations for all new
unit's requesting allowances, the Agency shall allocate the number
of allowances using the un-prorated allocation determined for that
unit in subsection
(d)(4) of this Section
. If there are insufficient
allowances to allocate whole allowances, such unallocated
allowances shall be retained by the Agency and shall be available
for allocation in a later control period
.
B)
If the NUSA for the control period for which the allowances are
requested has a number of CAIR NO, Ozone Season allowances
less than the total un-prorated allocation to all new affected units
requesting allocations, the Agency shall allocate the available
allowances for new affected units on a pro-rata basis, using the un-
prorated allocation determined for that unit pursuant to subsection
(d)(4) of this Section
. If there are insufficient allowances to
allocate whole allowances, such unallocated allowances shall be
retained by the Agency and shall be available for allocation in a
later control period .
C)
If the gross electrical output or useful thermal energy reported to
the Agency pursuant to subsection (d) of this Section is later
determined to be greater than the unit's actual gross electrical
output or useful thermal energy for the applicable control period,
the Agency shall reduce the unit's allocation from the NUSA for
the current control period to account for the excess allowances
allocated in the prior control period or periods
.
e)
The Agency shall review each NUSA allowance allocation request under
subsection (b) of this Section
. The Agency shall accept a NUSA allowance
allocation request only if the request meets, or is adjusted by the Agency as
necessary to meet, the requirements of this Section
.
0
By November 8 after the applicable control period, the Agency shall notify each
g)
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
CAIR designated representative that submitted a NUSA allowance request of the
amount of CAIR NO, Ozone Season allowances from the NUSA, if any, allocated
for the control period to the new unit covered by the request
.
The Agency shall allocate CAIR NO, Ozone Season allowances to new units
from the NUSA no later than November 15 after the applicable control period
.
h)
After a new affected unit has operated in one control period, it becomes an
existing unit for the purposes of Section 225 .540 of this Subpart only, and the
Agency shall allocate CAIR NOx
Ozone Season allowances for that unit, for the
control period commencing four years in the future pursuant to Section 225
.540
of this Subpart
. The new affected unit shall continue to receive CAIR NO x
Ozone
Season allowances from the NUSA according to this Section until the unit is
eligible to use the CAIR NO, Ozone Season allowances allocated to the unit
pursuant to Section 225
.540 of this Subpart .
i)
If, after the completion of the procedures in subsection (c) of this Section for a
control period any unallocated CAIR NO, Ozone Season allowances remain in
the NUSA for the control period, the Agency shall, at a minimum, accrue those
CAIR NOx
Ozone Season allowances for future control period allocations to new
affected units . The Agency may from time to time elect to retire CAIR NO,
Ozone Season allowances in the NUSA that are in excess of 7,245 for the
purposes of continued progress toward attainment and maintenance of National
Ambient Air Quality Standards pursuant to the CAA .
Section 225 .550
Monitoring, Recordkeeping and Reporting Requirements for Gross
Electrical Output and Useful Thermal Energy
a)
By January 1, 2007, or by the date of commencing commercial operation,
whichever is later, the owner or operator of an affected unit shall install,
calibrate, maintain, and operate a wattmeter
; and shall measure gross electrical
output in megawatt-hours on a continuous basis
; and shall record the output of the
wattmeter
. If a generator is served by two or more units, the information to
determine each unit's heat input for that control period shall also be recorded, so
as to allow each unit's share of gross electrical output to be determined
. If heat
input data is used, the owner or operator shall comply with the applicable
provisions 40 CFR 75, as incorporated by reference in Section 225
.140 of this
Part.
b)
For a an affected unit that is a cogeneration unit by January 1, 2007, or by the date
the affected unit commences to produce useful thermal energy, whichever is later,
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
the owner or operator of an affected unit with cogeneration capabilities shall
install, calibrate, maintain, and operate meters for steam flow in lbs/hr,
temperature in degrees Fahrenheit, and pressure in PSI, to measure and record the
useful thermal energy that is produced, in mmBtu/hr, on a continuous basis
.
Owners and operators of an affected unit that produces useful thermal energy but
uses an energy transfer medium other than steam, e.g., hot water, glycol, shall
install, calibrate, maintain, and operate the necessary meters to measure and
record the necessary data to express the useful thermal energy produced, in
mmBtu/hr, on a continuous basis . If the affected unit ceases to produce useful
thermal energy, the owner or operator may cease operation of the meters,
provided that operation of such meters shall be resumed if the affected unit
resumes production of useful thermal energy .
c)
By September 30, 2006, the owner or operator of an affected unit shall report to
the Agency the gross electrical output for control periods 2001, 2002, 2003, 2004
and 2005, if available, and, the unit's useful thermal energy data, if applicable . If
gross electric output is not available, heat input shall be used for control periods
2001, 2002, 2003, 2004, and 2005 that gross electrical output is not available
. If a
generator is served by two or more units, the documentation needed to determine
each unit's share of the heat input of such units for that control period shall also
be submitted . If heat input data is used, the owner or operator shall comply with
the applicable provisions 40 CFR 75, as incorporated by reference in Section
225.140 of this Part
.
d)
Beginning with calendar year 2007, the designated representative of the affected
unit shall submit to the Agency quarterly, by no later than January 31, April 30,
July 31, and October 31 of each year, information for the affected unit's gross
electrical output, on a monthly basis, and, if applicable, the unit's useful thermal
energy for each month.
e)
The owner or operator of an affected unit shall maintain on-site the monitoring
plan detailing the monitoring system, maintenance of the monitoring system,
including quality assurance activities .
The owner or operator of an affected unit shall retain records for at least 5 years
from the date the record is created or the data collected in subsections (a) and (b)
of this Section, the reports submitted to the Agency and USEPA in accordance
with subsections (c) and (d) of this Section . The owner or operator of an affected
unit shall retain the monitoring plan required in subsection (e) of this Section for
at least five years from the date that it is replaced by a new or revised monitoring
plan
.
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ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
Section 225 .555
Clean Air Set-Aside (CASA)
a)
A project sponsor may apply for allowances from the CASA for sponsoring an
energy efficiency and conservation, renewable energy, or clean technology
project as set forth Section 225
.560 of this Subpart by submitting the application
required by Section 225 .570 of this Subpart .
b)
Notwithstanding subsection (a) of this Section, a project sponsor with an affected
source that is out of compliance with this Subpart for a given control period may
not apply for allowances from the CASA for that control period . If a source
receives CAIR NO, allowances from CASA and then is subsequently found to
have been out of compliance with this Subpart for the applicable control period or
periods, the project sponsor must restore the CAIR NO, allowances that it
received pursuant to its CASA request or an equivalent number of CAIR NO,
allowances to the CASA within six months of an Agency finding of
noncompliance . These allowances shall be assigned to the fund from which they
were distributed .
c)
The Agency will not act as a mediator in situations where more than one project
sponser requests CAIR NO, allowances for the same project
. If more than one
project sponsor submits an application for allowances for the same project for the
same control period, the Agency shall reject all such applications.
d)
CAIR NO, allowances from CASA shall be allocated in accordance with the
procedures in Section 225 .575 of this Subpart .
e)
The project sponsor may submit an application that aggregates two or more
projects under a CASA project category that would individually result in less than
one allowance, but that equal at a minimum one whole allowance when
aggregated . The Agency shall not allocate allowances for projects totaling less
than one whole allowance after rounding.
Section 225 .560
Energy Efficiency and Conservation, Renewable Energy, and Clean
Technology Projects
a)
Energy efficiency and conservation project means any of the following projects
implemented in Illinois :
1)
Demand side management projects that reduce the overall power demand
by using less energy include :
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
A)
Smart building management software that more efficiently
regulates power flows
.
B)
The use of or replacement to high efficiency motors, pumps,
compressors, or steam systems .
2)
Energy efficient new building construction projects include
:
A)
ENERGY STAR qualified new home projects
.
B)
Measures to reduce conserve energy consumption beyond the
requirements of the Illinois Energy Conservation Code for
Commercial Buildings (20 ILCS 687/6-3) .
C)
New residential construction projects that qualify for Energy
Efficient Tax Incentives under the Energy Policy Act of 2005, 42
U.S .C
. §15801 (2005) .
3)
Supply-side energy efficiency projects include projects implemented to
improve the efficiency in electricity generation by coal-fired power plants,
and the efficiency of electrical transmission and distribution systems .
4)
Highly efficient power generation project, such as, but not limited to,
combined cycle projects, combined heat and power, and microturbines
.
To be considered a highly efficient power generation project under this
subsection, a project must meet the thresholds listed below
:
A)
For combined heat and power projects generating both electricity
and useful thermal energy for space, water, or industrial process
heat, a rated-energy efficiency of at least 60 percent
.
B)
For combined cycle projects rated at greater than 0
.50 MW, a
rated-energy efficiency of at least 50 percent
.
C)
For microturbine projects rated at or below 0
.50 MW and all other
projects rated-energy efficiency of at least 40 percent
.
b)
Renewable energy unit means any of the following projects implemented in
Illinois
:
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
1)
Zero-emission electric generating units, including wind, solar (thermal or
photovoltaic), and hydropower projects
. Eligible hydropower plants are
restricted to new generators, that are not replacements of existing
generators, that commence operation on or after January 1, 2006, and do
not involve the significant expansion of an existing dam or the
construction of a new dam
.
2)
Renewable energy units are those units that generate electricity using more
than 50 percent of the heat input, on an annual basis, from dedicated crops
grown for energy production or the capture systems for methane gas from
landfills, water treatment plants or sewage treatment plants, and organic
waste biomass, and other similar sources of non-fossil fuel energy
.
Renewable energy projects do not include energy from incineration by
burning or heating of waste wood, tires, garbage, general household,
institutional lunchroom or office waste, landscape waste, or construction
or demolition debris .
c)
Clean technology project for reducing emissions from producing electricity and
useful thermal energy means any of the following projects implemented in
Illinois :
1)
Air pollution control equipment upgrades for control of NO, emissions at
existing coal-fired electric generating units, as follows
: installation of a
selective catalytic reduction (SCR) or selective non-catalytic reduction
(SNCR) system, or other emission control technologies
. Air pollution
control upgrades do not include the addition of low NO
x
burners, overfired
air techniques, gas reburning techniques, flue gas conditioning techniques
for the control of NO, emissions, projects involving upgrades or
replacement of electrostatic precipitators, or control equipment, such as
activated carbon injection, specifically used for control of mercury
. For
this purpose, a unit shall be considered "existing" after it has been in
commercial operation for at least eight years
.
2)
Clean coal technologies projects include :
A)
Integrated gasification combined cycle (IGCC) plants
.
B)
Fluidized bed coal combustion .
d)
Energy efficiency and conservation, renewable energy, or clean technology
projects listed in subsections (a) through (c) of this Section shall not include
0
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
nuclear power projects
; projects required to meet emission standards or
technology requirements under State or federal law or regulation ; or projects used
to meet the requirements of a court order or consent decree ; or a Supplemental-
Environmental Project (SEP) . CASA allowances shall not be allocated to such
projects.
e)
Applications for projects that that are not specifically listed in subsections (a)
through (c) of this Section, and that are not specifically excluded by subsection
(d) of this Section, may be submitted to the Agency
. Such application shall
designate which category or categories from those listed in subsections (a)(1)
through (c)(2)(B) of this Section best fits the proposed project and the applicable
formula under Section 225
.565(b) of this Section to calculate the number of
allowances that it is requesting . The Agency shall determine whether the
application is approvable based on a sufficient demonstration by the project
sponsor that the project is a new type of energy efficiency, renewable energy, or
clean technology project, similar in its effects as the projects specifically listed in
subsection (a) through (c) of this Section .
Early adopter projects include projects that meet the criteria for any energy
efficiency and conservation, renewable energy, or clean technology projects listed
in subsections (a) , (b), (c), and (e) of this Section and commence construction
between July 1, 2006, and December 31, 2012.
Section 225 .565
CASA Allowances
a)
The CAIR NO, allowances for the CASA for each control period shall be
assigned to the following categories of projects :
Phase I
(2009-2014)
Phase II
(2015 and
thereafter)
1)
Energy Efficiency and Conservation/
Renewable Energy
3684
3479
2)
Air Pollution Control Equipment
Upgrades
1535
1448
3)
Clean Coal Technology Projects
1842
1738
4)
Early Adopters
614
580
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
b)
The following formulas shall be used to determine the number of CASA
allowances that may be allocated to a project per control period
:
1)
For an energy efficiency and conservation project pursuant to Sections
225
.560(a)(1) through (a)(3) of this Subpart, the number of allowances
shall be calculated using the number of megawatt hours of electricity that
was not consumed during a control period and the following formula
:
A
= (MWhc) x (1
.5 lb/MWh) / 2000 lb
Where:
A
-
MWhc =
The number of allowances for a particular project
.
The number of megawatt hours of electricity
conserved during a control period by a project
.
2)
For a zero emission electric generating projects pursuant to Section
225
.560(b)(1) of this Subpart, the number of allowances shall be
calculated using the number of megawatt hours of electricity generated
during a control period and the following formula
:
A
= (MWhg) x (2.0
lb/MWh) / 2000 lb
Where:
A
The number of allowances for a particular project
MWhg =
The number of megawatt hours of electricity
generated during a control period by a project
.
3)
For a renewable energy emission unit pursuant to Section 225
.560(b)(2) of
this Subpart, the number of allowances shall be calculated using the
number of megawatt hours of electricity generated during a control period
and the following formula :
A
= (MWhg) x (0.5 lb/MWh) / 2000 lb
Where :
A
The number of allowances for a particular project
.
MWhg =
The number of MW hours of electricity generated
ILLINOIS REGISTER
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
during a control period by a project .
4)
For an air pollution control equipment upgrade project pursuant to Section
225 .560(c)(1) of this Subpart, the number of allowances shall be
calculated using the emission rate before and after replacement or
improvement, and the following formula :
A = (MWhg) x 0.10 x (ERR lb/MWh - ERAlb/MWh) / 20001b
Where:
A
The number of allowances for a particular project
.
MWhg =
The number of megawatt hours of electricity
generated during a control period by a project
.
ERR
Average NO, emission rate based on CEMS data
from the most recent two control periods prior to
the replacement or improvement of the control
equipment in lb/MWh .
ERA =
Average NO, emission rate for the applicable
control period data based on CEMS data in
lb/MWh.
5)
For highly efficient power generation and IGCC projects pursuant to
Sections 225
.560(a)(4) and (c)(2) of this Subpart, the number of
allowances shall be calculated using the number of megawatt hours of
electricity the project generates during a control period and the following
formula:
A
=
(MWhg) x (1
.0 lb/MWh - ER lb/MWh) / 2000 lb
Where:
A
The number of allowances for a particular project
.
MWhg =
The number of megawatt hours of electricity
generated during a control period by a project.
ER
=
Average NO, emission rate for the control period
based on CEMS data in Ib/MWh .
6)
For a CASA project that commenced construction before December 31,
2012, in addition to the allowances allocated under subsections (b)(1)
through (b)(5) of this Section, a project sponsor may also request
Section 225.570
CASA Applications
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
additional allowances under the early adopter project category pursuant to
Section 225 .460(e) of this Section based on the following formula :
A
= 1 .0+0.10xEA;
Where:
A
The number of allowances for a particular project as
determined in subsections , (b)(1) through (b)(5) of
this Section .
A;
The number of allowances as determined in
subsection (b)(1), (b)(2), (b)(3), (b)(4) or (b)(5) of
this Section for a given project
.
a)
A project sponsor may request allowances if the project commenced construction
on or after the dates listed below
. The project sponsor may request and be
allocated allowances from more than one CASA category for a project, if
applicable .
1)
Demand side management, energy efficient new construction, and supply
side energy efficiency and conservation projects that commenced
construction on or after January 1, 2003 ;
2)
Fluidized bed coal combustion projects, efficient operations projects, or
renewable energy emission units, which commenced construction on or
after January 1, 2001 ; and
3)
All other projects on or after July 1, 2006 .
b)
Beginning with the 2009 control period and each control period thereafter, a
project sponsor may request allowances from the CASA
. The application must be
submitted to the Agency by May 1 of the control period for which the allowances
are being requested
.
c)
The allocation shall be based on the electricity conserved or generated in the
control period preceding the calendar year in which the application is submitted
.
To apply for a CAIR NO, allocation from the CASA, project sponsors must
provide the Agency with the following information :
ILLINOIS REGISTER
POLLUTION CONTROL BOARD
NOTICE OF PROPOSED RULE
1)
Identification of the project sponsor, including name, address, type of
organization, and name(s) of the principals or corporate officials
.
2)
The number of the CAIR NO, general or compliance account for the
project and the name of the associated CAIR account representative .
3)
A description of the project or projects, location, the role of the project
sponsor in the projects, and a general explanation of how the amount of
energy conserved or generated was measured, verified, and calculated, and
the number of allowances requested and the with supporting calculations
.
The number of allowances requested shall be calculated using the
applicable formula from Section 225
.570(b) of this Section .
4)
Detailed information to support the request for allowances, including the
following types of documentation for the measurement and verification of
the NO, emissions reductions, electricity generated, or electricity
conserved using established measurement verification procedures, as
applicable
. The measurement and verification required shall depend on
the type of project proposed .
A)
As applicable, documentation of the project's base and control
period conditions and resultant base and control period energy
data, using the procedures and methods included in M& V
Guidelines : Measurement and Verification for Federal Energy
Projects, incorporated by reference in Section 225 .140 of this Part,
or other method approved by the Agency . Examples include :
i)
Energy consumption and demand profiles ;
ii)
Occupancy type;
iii)
Density and periods ;
iv)
Space conditions or plant throughput for each operating
period and season. (For example, in a building this would
include the light level and color, space temperature,
humidity and ventilation) ;
v)
Equipment inventory, nameplate data, location, condition ;
and
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vi)
Equipment operating practices (schedules and set points,
actual temperatures/pressures) .
B)
Emissions data, including, if applicable, CEMS data;
C)
Information for rated-energy efficiency including supporting
documentation and calculations ; and
D)
Electricity, in MWh, generated or conserved for the applicable
control period .
5)
Notwithstanding the requirements of subsections (c)(4) of this Section,
applications for fewer than five allowances may propose other reliable and
applicable methods of quantification acceptable to the Agency .
6)
Any additional information requested by the Agency to determine the
correctness of the requested number of allowances, including site
information, project specifications, supporting calculations, operating
procedures, and maintenance procedures .
7)
The following certification by the responsible official for the project
sponsor and the applicable CAIR account representative for the project
:
"I am authorized to make this submission on behalf of the project sponsor
and the holder of the CAIR NO, general account or compliance account
for which the submission is made. I certify under penalty of law that I
have personally examined, and am familiar with the statements and
information submitted in this application and all its attachments . Based on
my inquiry of those individuals with primary responsibility for obtaining
the information, I certify that the statements and information are to the
best of my knowledge and belief true, accurate, and complete . I am aware
that there are significant penalties for submitting false statements and
information or omitting required statements and information ."
d)
A project sponsor may request allowances from the CASA for each project a total
number of control periods not to exceed the number of control periods listed
below. After a project has been allocated allowances from CASA, subsequent
requests for the project from the project sponsor shall include the information
required by subsections (c)(1), (c)(2), (c)(3) and (c)(7) of this Section, a
description of any changes, or further improvements made to the project, and
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information specified in subsections (c)(5) and (c)(6) as specifically requested by
the Agency .
1)
For energy efficiency and conservation projects (except for efficient
operation and renewable energy projects), for a total of eight control
periods
.
2)
For early adopter projects, for a total of ten control periods
.
3)
For air pollution control equipment upgrades for a total of 15 control
periods.
3)
For renewable energy projects, clean coal technology, and highly efficient
power generation projects, for each year that the project is in operation .
e)
A project sponsor must keep copies of all CASA applications and the
documentation used to support the application for at least five years.
Section 225 .575
Agency Action on CASA Applications
a)
By October 1, 2009, and each October 1 thereafter, the Agency shall determine
the total number of allowances that are approvable for allocation to project
sponsors based upon the applications submitted pursuant to Section
225 .570
of
this Subpart .
1)
The Agency shall determine the number of CAIR NO, allowances that are
approvable based on the formulas and the criteria for such projects . The
Agency shall notify a project sponsor within 90 days after receipt of an
application if the project is not approvable, the number of allowances
requested is not approvable, or additional information is needed by the
Agency to complete its review of the application .
2)
If the total number of CAIR NO, allowances requested for approved
projects is less than or equal to the number of CAIR NO, allowances in
the CASA project category, the number of allowances that are approved
shall be allocated to each CAIR NO, compliance or general account .
3)
If more CAIR NO, allowances are requested than the number of CAIR
NO, allowances in a given CASA project category, allowances shall be
allocated on a pro-rata basis based on the number of allowances available,
subject to further adjustment as provided for by subsection (b) of this
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Section. CAIR NO, allowances shall be allocated, transferred, or used as
whole allowances
. The number of whole allowances shall be determined
by rounding down for decimals less than 0 .5 and rounding up for decimals
of 0.5 or greater.
b)
If there are, after the completion of the procedures in subsection (a) of this
Section for a control period, any CAIR NO, allowances not allocated to a CASA
project for the control period :
1)
The remaining allowances in each CASA project category will accrue up
to twice the number of allowances that are assigned to the project category
each control period as set forth in Section 225 .565 of this Subpart .
2)
For control period 2011 and thereafter, allowances in a project category
that are in excess of twice the number assign for the control period as set
forth in Section 225 .565 of this Subpart shall be redistributed to project
categories that have fewer than twice the number of allowances assigned
to that project category for the control period .
3)
For control period 2011 and thereafter, the Agency shall then reallocate
allowances to projects that received fewer allowances than requested and
approved on a pro-rata basis, based on the total number of approved
allowances for the projects .
4)
For control period 2011 and thereafter, if after the redistribution of
allowances pursuant to subsection (b)(2) any allowances remain, these
allowances shall be reassigned to project categories that have fewer than
twice the number of allowances annually assigned to that project category
as set forth in Section 225 .565 of this Subpart, after the allocation in
subsection (b)(3) of this Section .
5)
The Agency shall repeat the process of allocating allowances to CASA
projects that received fewer allowances than requested and approved, and
to reassigning allowances to project categories as set forth in subsections
(b)(2), (b)(3), and (b)(4) of this Section, until no allowances remain to be
reassigned between project categories and the approved allowance
requests have been filled . If allowances still remain unallocated, the
Agency may elect to retire any CAR NO, allowances that remain after all
approved requests for allowances have been met and each project category
has accrued twice the number of allowances assigned for that project
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category to continue progress toward attainment or maintenance of the
National Ambient Air Quality Standards pursuant to the CAA .
