ILLINOIS POLLUTION CONTROL BOARD

BACKGROUND
MOTIONS
Motion for Expedited Review
Motion to Hold Hearings in Springfield and Collinsville
Motion for Waiver of Requirements
CONCLUSION

July 20, 2006

IN THE MATTER OF:

PROPOSED NEW CLEAN AIR

INTERSTATE RULES (CAIR) SO

, NO

ANNUAL AND NO

OZONE SEASON

TRADING PROGRAMS, 35 ILL. ADM.

CODE 225. SUBPARTS A, C, D and E

)

R06-26

(Rulemaking – Air)

ORDER OF THE BOARD (by T.E. Johnson):

On May 30, 2006, the Board received a rulemaking proposal submitted by the Illinois

Environmental Protection Agency (Agency) pursuant to Section 27 and 28 of the Illinois

Environmental Protection Act (Act) (415 ILCS 5/27 and 28 (2004)). Motions for expedited

review, to hold the required hearings in Springfield and Collinsville, and for waiver of certain

filing requirements accompanied the petition.

On June 15, 2006, the Board accepted the proposal for hearing, but reserved ruling on the

motions accompanying the petition. On June 30, 2006, Dynegy Midwest Generation, Inc. and

Midwest Generation, L.L.C. (participants) filed responses to the Agency’s motions, accompanied

by a motion to file the responses

instanter

For the reasons more fully explained in the body of the order, the Board partially grants

the Agency’s motion to expedite, but denies the motion to hold the hearings in Springfield and

Collinsville.

BACKGROUND

The Agency proposes a new Part 225 to reduce intrastate and interstate transport of sulfur

dioxide (SO

) and nitrogen oxides (NO

) emissions from fossil-fuel-fired electric generating

units (affected units), on an annual basis and on an ozone season basis of each calendar year. As

explained in the statement of reasons, the Agency proposes the adoption of the Clean Air

Interstate Rule (CAIR) SO

trading program, the CAIR NO

Annual trading program and the

CAIR NO

Ozone Season trading program to accomplish this objective. Stat. at 1.

The proposed rule contains five subparts. As proposed, Subpart A includes general

provisions, Subpart B is reserved, Subpart C contains the CAIR SO

trading program, Subpart D

details the CAIR NO

Annual trading program, and Subpart E addresses the CAIR NO

Ozone

Season trading program.

The Agency asserts that its proposal is intended to satisfy Illinois’ obligations under the

United States Environmental Protection Agency’s (USEPA) Rule to Reduce Interstate Transport

of Fine Particulate Matter and Ozone; Revisions to Acid Rain Program (CAIR); Revisions to the

State Implementation Plan (SIP) Call, (Federal CAIR), 70

Fed. Reg

. 25162 (May 12, 2005).

Stat. at 1. The proposal is also intended to address, in part, the Agency’s obligation to meet

Clean Air Act (CAA) requirements for the control of fine particulate matter (PM

2.5

) and ozone in

the Chicago and Metro East/St. Louis nonattainment areas. Stat. at 2.

MOTIONS

As previously stated, the Agency has filed three motions with the proposal – a motion for

expedited review, a motion to hold the required hearings in Springfield and Collinsville, and a

motion for waiver of certain filing requirements. The participants have filed a response to the

motions for expedited review and to hold the hearings in Springfield and Collinsville,

accompanied by a motion for leave to file

instanter

In the motion for leave to file

instanter

, the participants assert that the it was not clear

whether the motions required responses until the Board accepted the filing for hearing on

June15, 2006. Mot. for Leave at 1-2. The participants argue that the Agency is not prejudiced

by the delay in receiving the responses, but that the participants would be unduly prejudiced and

irreparably harmed if the Board does not grant the motion for leave to file. Mot. for Leave at 2.

To date, the Agency has not responded to the motion for leave to file. If a party files no

response to a motion within 14 days the party will be deemed to have waived objection to the

granting of the motion.

See

35 Ill. Adm. Code 101.500(d). The Board grants the participants’

motion for leave to file

instanter

. The Board will next address each of the Agency’s motions in

turn.

Motion for Expedited Review

The motion for expedited review requests that the rule be promulgated by April 2007,

and that the Board proceed to first notice without reaching a decision on the merits of the

proposal. Mot. to Exp. at 3. The Agency asserts that the USEPA has adopted a CAIR Federal

Implementation Plan (FIP) effective on June 27, 2006, and that the first “action of consequence”

will be USEPA’s making NOx allocations for the 2009 control period on July 30, 2007. Mot. to

Exp. at 2. The Agency asserts that the rule needs to be adopted by April 2007, to allow Illinois

to control the allocation for 2009, and to timely submit NOx allocations to avoid the USEPA

start of a “FIP sanctions clock.” Mot. to Exp. at 3.

In response, the participants assert that the Agency has stated that the USEPA has already

proposed FIPs for those states that fail to submit SIPs providing for compliance with the

emissions budgets set forth in the Federal CAIR by September 11, 2006. Resp. at 2. The

participants argue that even had the Agency submitted this proposal as a fast-track rulemaking on

May 30, 2006, the Board could not possibly have adopted any rule in time for the Agency to

submit a SIP by September 11, 2006.

Id.

Thus, posit the participants, the Agency will have to

accept a FIP until such a time as it submits a rule adopted by the Board as a replacement for the

FIP.

Id.

The participants contend that the Agency does not explain why promulgating a rule by

April 7, 2007, will result in administrative confusion. Resp. at 2-3. The participants note that

the USEPA will not allocate allowances until July 1, 2007, and will not record them into EGU

allowance accounts until September 1, 2007. Resp. at 3. The participants conclude that there is

more than enough time for the Board to promulgate a rule without expedited review.

Id.

The participants assert that the Board will gain neither time nor efficiency by proceeding

to first notice prior to considering the merits of the proposal. Resp. at 3. The participants argue

that because the Agency proposed this matter under Section 28, it should not expect the Board to

proceed as the proposal were submitted pursuant to Section 28.5.

Id.

Finally, the participants

object to expediting the scheduling of hearings in this matter where they would occur

concurrently or back-to-back with the hearings currently scheduled in R06-25, (s

Proposed

New 35 Ill. Adm. Code 225 Control of Emissions From Large Combustion Sources (Mercury),

because the participants have limited environmental staff, only a few of whom are available for

assignment to these regulatory matters. Resp. at 4.

Requests for expedited review are governed by Section 101.512 of the Board's rules, and

must contain,

inter alia

, a complete statement of the facts and reasons for the request.

See

35 Ill.

Adm. Code 101.512. In acting on a motion for expedited review, the Board considers, at a

minimum, all statutory requirements and whether or not material prejudice will result from the

motion being granted or denied. 35 Ill. Adm. Code 101.512(b). In addition, the Board will only

grant a motion for expedited review consistent with available resources.

See

35 Ill. Adm. Code

101.512(c).

The Board grants the Agency’s motion for expedited review in part. In light of the

federal deadlines referenced by the Agency, the Board will expedite review of this matter to the

extent feasible given the Board’s available resources and decision deadlines. The Board wishes

to make clear that it intends to move this proceeding along as early as it can practicably do so,

but it should be noted that the Board’s calendar during the upcoming months is extremely

crowded, and the Board’s meeting and deliberative session calendars have regulatory adoption

milestones that must be met by timely issuance of Board orders.

Nonetheless, the Board will not send this matter to first notice without commenting on

the merits of the proposal. Given the expedited review of this proposal, the Board should be able

to reach a final decision in a timely fashion.

Motion to Hold Hearings in Springfield and Collinsville

The motion to hold hearings in Springfield and Collinsville (Mot. to Hold) asserts that

there are 229 electric generating units (EGU) that will be subject to the proposed rule. Mot. to

Hold at 1. The Agency argues that the city of Springfield is not only an affected area, but is

centrally located for all the affected areas of the State and is an appropriate first hearing location

pursuant to Section 102.412 (a) of the Board’s procedural rules.

Id.

The Agency contends that

state administrative and financial constraints favor a Springfield forum for the first hearing in

that both the Board and the Agency maintain offices in Springfield, and a large number of the

Agency’s technical staff located in Springfield will be testifying and providing technical

assistance in the rulemaking. Mot. to Hold at 2. The Agency asserts that the expenses to the

State of Illinois due to transportation, food, and lodging for a non-Springfield venue will be

considerable, and that holding at least one hearing in Springfield will allow for the Board and the

Agency to conserve resources.

Id.

The Agency further asserts that the city of Collinsville is an appropriate location for the

second hearing as it is located with respect to affected units in the Southern portion of the state.

Mot. to Hold at 3. The Agency contends that Collinsville is a reasonable commute from

Springfield, and that the same factors favoring a hearing in Springfield favor the second hearing

be held in Collinsville.

Id.

The Agency concludes that holding the hearings in Springfield and

Collinsville would provide diversely located forums for input from the public throughout the

State. Mot. to Hold at 4.

In response, the participants request that at least one hearing be held in Chicago. Resp. at

1. The participants contend that the staffing hardship that the Agency describes in its motion

applies to an even greater extent to the participants as well since the development and

implementation of environmental regulations is not the participants’ business. Resp. at 2. The

participants request that the Board consider staffing constraints on the participants as it schedules

hearings in this matter.

Id.

The participants do not object to a hearing in Collinsville, but prefer that the hearing

devoted to presentation of non-Agency witnesses be held in Chicago. Resp. at 2. The

participants assert that its counsel, as well as the counsel for other affected sources, and of

environmental groups that may participate are located in Chicago, and that Chicago offers

greater ease of access to participants’ witnesses. Resp. at 3. For these reasons, the participants

request that the hearings not be scheduled concurrently or back-to-back with the hearings in R06-

25, and that at least one hearing be held in Chicago during which the Board anticipates that

participants could present witnesses.

Id.

The Board denies the Agency’s motion to hold hearings in Springfield and Collinsville.

The Act requires that hearings in state-wide regulations must be held in at least two concerned

areas of the state. 415 ILCS 5/28(a) (2004). Both Collinsville and Springfield meet this

requirement; however, they are not in demographically diverse areas of the state and would not

provide for a hearing in the northern part of the state or in the most populous area of the state.

While in some circumstances it might be appropriate to hold required hearings for a statewide

rulemaking in Collinsville and Springfield, in this case the Board finds that holding at least one

hearing in Chicago would be administratively acceptable and beneficial to the public.

Thus, the Board denies the Agency’s motion and directs the hearing officer to schedule

hearings in Chicago and either Springfield or Collinsville after consultation with the Agency and

other interested parties.

Motion for Waiver of Requirements

In the motion for waiver of requirements, the Agency asserts that the entire proposal

consists of over 2,000 pages, and requests leave to file an original and four copies of the proposal

plus five partial copies, instead of the original and nine copies generally required. Mot. to Waive

at 1. The Agency states that the partial copies will consist of the table of contents, the statement

of reasons, pleadings, and the proposed rules, but not the documents relied upon or the

incorporations by reference.

Id.

The Agency also requests leave to serve partial copies on the

Department of Natural Resources (DNR) and the Attorney General’s Office (AGO). Mot. to

Waive at 2. The Agency asserts that both the DNR and the AGO have informed the Agency that

partial copies of the proposal are sufficient.

Id.

Leave is also requested to file no copies of five

documents incorporated by reference, as well as no copies of various documents relied upon in

drafting. Mot. to Waive at 3.

No reply to this motion has been received by the Board. The Board, accordingly, grants

the Agency’s motion to waive certain filing requirements.

CONCLUSION

The Board grants, in part, the Agency’s motion to expedite, denies the motion to hold the

hearings in Springfield and Collinsville, and grants the motion to waive certain filing

requirements.

The assigned hearing officer is directed to proceed expeditiously consistent with this

order under the rulemaking provisions of the Act (415 ILCS 5/27, 28 (2004)) and the Board’s

procedural rules. 35 Ill. Adm. Code 102.

IT IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board

adopted the above order on July 20, 2006, by a vote of 4-0.

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board