BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
)
PROPOSED NEW 35 ILL
. ADM. CODE 225 )
CONTROL OF EMISSIONS FROM
)
LARGE COMBUSTION SOURCES
)
R06-25
(Rulemaking - Air)
NOTICE OF FILING
TO
: Those Individuals as Listed on attached Certificate of Service
Please take notice that on August 31, 2006, the undersigned caused to be filed with the
Clerk of the Illinois Pollution Control Board the attached Ameren's Response to Midwest
Generation's Motion for Additional Hearings, a copy of which is herewith served upon
you.
Dated this 31 51
day of August, 2006.
Respectfully submitted,
AMEREN ENERGY GENERATING COMPANY
James T
. Harrington
David L
. Rieser
Jeremy Hojnicki
Attorneys for Petitioners
McGuireWoods LLP
77 West Wacker, Suite 4100
Chicago, Illinois 60601
Telephone: 312/849-8100
GY RESOURCES GENERATING
RECEIVED
CLERK'S
OFFICE
AUG 3 1 2006
STATE OF
ILLINOIS
Pollution Control Board
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF :
)
PROPOSED NEW 35 ILL . ADM. CODE 225 )
CONTROL OF EMISSIONS FROM )
LARGE COMBUSTION SOURCES
)
RECEIVED
CLe'S OFFICE
AUG 3
1 2006
STATE OF
R06-25
Pollution
Control Board
(Rulemaking - Air)
AMEREN'S RESPONSE TO MIDWEST GENERATION'S MOTION FOR
ADDITIONAL HEARINGS
Ameren Energy Generating Company, AmerenEnergy Resource Generating
Company, and Electric Energy, Inc. (collectively "Ameren") submit this response to
Midwest Generation, LLC's ("MWG") Motion to Schedule Additional Hearings and
respectfully request the Board to deny MWG's Motion . MWG failed to meet the Board
requirements necessary to request additional hearings and did not demonstrate that such
additional hearings are necessary .
MWG claims that it needs additional hearings to review and respond to the Multi-
Pollutant Strategy ("MPS"), jointly offered as an amendment to the IEPA's original
proposal by the IEPA, Ameren, and Dynegy
. MWG argues that the Board must grant an
additional hearing to examine "issues and questions" (Motion, p . 2) arising from the MPS
which were not explored despite eight days of hearings, three of which were focused
almost solely on the MPS . MWG states that it needs additional time to study these issues
and speak to its experts although it is a sophisticated company which has been involved
in these proceedings from the start and, according to the IEPA, has been seeking to
negotiate its own approach to the mercury regulations . MWG moves for an additional
hearing to address the impact of the MPS on companies that have not opted in (most
prominently MWG) despite the fact that it chose not to present any evidence regarding
the impact of the IEPA's rule on its own facilities and what steps it was taking to address
mercury controls at its plants . In fact, MWG has had plenty of time to examine and
address these issues and questions and, through its questions to IEPA and Ameren
witnesses, appeared to comprehensively do so during the August hearings . As a result,
nothing in MWG's motion justifies the additional expenditure in time and resources of
having additional hearings.
In addition to its lack of practical justification, MWG fails to address the Board's
Procedural Rules which contain clear standards for requesting additional hearings .
Section 102 .412(b) of the Procedural Rules, (35 Ill . Adm. Code 102 .412) requires that
:
If the proponent or any participant wishes to request a hearing beyond the number of
hearings specified by the hearing officer, that person must demonstrate, in a motion to the
hearing officer, that failing to hold an additional hearing would result in material
prejudice to the movant. The motion may be oral, if made at hearing, or written
. The
movant must show that he exercised due diligence in his participation in the proceeding
and why an additional hearing, as opposed to the submission of written comments
pursuant to Section 102 .108 of this Part, is necessary .
MWG not only failed to reference these specific requirements, but also failed to address
any of these conditions for obtaining its claimed relief Nothing in MWG's motion
demonstrates that MWG will suffer "material prejudice," that it exercised "due diligence"
with respect to the issues raised in its motion, or that the issues it raises cannot be
addressed in written comments. As a result the Board should deny MWG's motion for an
additional hearing .
MATERIAL PREJUDICE
MWG does not and cannot demonstrate that it will suffer material prejudice
without an additional hearing . MWG argues that
. . . "participants are not aware of what
issues the MPS creates, on its own and its impact on issues involving the original
proposal . . ." (Motion, p . 3) but this statement is clearly disingenuous . In fact, MWG
cannot claim any impact from the MPS because it is a voluntary program, which on its
face imposes no additional obligations on companies which do not choose to be a part of
it. As a result, MWG makes no actual claim that it will be prejudiced by the MPS, in any
respect, only that an additional hearing is necessary to allow further time to analyze the
MPS. This argument ignores the Board rules which specify that persons seeking
additional hearings must claim some level of potential harm to their interests, not just that
further information would be useful . Even assuming for the sake of this argument that
MWG was somehow precluded from analyzing the MPS from the time it was filed on
July 28 to the scheduled end of the August hearings on August 25 (as discussed below),
MWG has had more than sufficient time to identify and present worst case scenarios that
present some level of potential harm to MWG as a result of the MPS, if there were any .
Having failed to do even this, MWG provides no basis to claim that it will suffer material
prejudice
. As a result, the Board must deny this motion .
DUE DILIGENCE
MWG also does not and cannot demonstrate that it exercised the level of due
diligence necessary to support its claim for an additional hearing
. While MWG's counsel
presented a number of expert witnesses addressing different aspects of the IEPA's
original proposal, it presented not one witness to testify as to the impact of that proposal
specifically on MWG or what steps MWG planned to take regarding mercury control at
its facilities
. Sid Nelson introduced evidence that MWG was evaluating its ability to use
HCI at its Crawford facility (Exhibit 43), but MWG chose not to share any of its plans or
evaluations regarding mercury . Certainly, MWG must have some plan for mercury
control to comply with CAMR, if not the proposed IEPA rule, and some idea of the
difference in control requirements between the two rules, but chose not to testify
regarding these issues . While MWG claims that "MWG and possibly others, do not know
what impact the MPS may have on its operations now and in the future," (Motion, p
. 3)
MWG presented no evidence as
to what impact the IEPA rule or the MPS might have
specifically on MWG and thus cannot claim that it exercised due diligence in identifying
the potential impact of the MPS on MWG, if any .
Further, MWG does not and cannot specifically claim to have been unaware of
the MPS such that it was unable to address these issues during the August hearings . As a
major operator of large coal fired power plants, MWG must be assumed to be aware of
the various federal and state discussions regarding control of mercury and the idea of a
multi-pollutant strategy is not new to this Board proceeding . LADCO identified a multi
pollutant strategy in its white paper on mercury control as was discussed in testimony by
Mr. Ayers during the June hearings . A multi-pollutant strategy is the basis for the co-
generation benefits expected to be achieved under the federal CAIR and CAMR
regulations, is being currently reviewed by Congress, and is the basis for other state
statutory and regulatory approaches . One of the witnesses presented by MWG, Ed
Chicanowicz, spoke to the value of a multi-pollutant strategy in his testimony
(Exhibit 84) during the August hearings and in response to questions
.
Despite statements to the contrary during the hearings, MWG does not claim in its
written motion to have been unaware of the MPS prior to the time it was filed with the
Board. In fact, the inference that MWG was aware of the MPS is supported by testimony
and common sense . Jim Ross, testified numerous times that all of the companies,
including MWG, had been negotiating with the IEPA regarding their proposal during the
rulemakings. It strains credulity to believe that MWG was not aware of the MPS prior to
its filing or that it was not negotiating for its own position with the IEPA
. Despite this
awareness, MWG did not see fit to present testimony regarding the potential impact of
the MPS or address the issues that they describe in their motion
.
Indeed, MWG, having made an almost identical oral motion for an additional
hearing prior to the presentation of the MPS by Ameren witnesses, was able to ask
extensive and informed questions of the IEPA and Ameren witnesses regarding the
operation and impact of the MPS . Almost all of the factual issues which MWG identifies
as
needing more information were, in fact directly addressed by the IEPA or Ameren in
response to MWG questions
. Anne Smith specifically addressed the impact of opting in
to the MPS for Ameren -
at the time the only company opting in . Jim Ross specifically
addressed the impacts on achieving state mercury caps under CAMR
. The comparative
impacts on mercury emissions of CAIR/CAMR and the Illinois proposal without the
MPS were extensively addressed by the witness presented by MWG including Krish
Vijayraghaven and Gail Charnley
. Since the MPS requires controls on a shorter time
frame than CAIR/CAMR, but on a longer time frame than the Illinois proposal, the issue
of the environmental impact has been completely addressed .
Finally, the August hearings were adjourned on Wednesday morning, August 23
.
This left two and a half days in which MWG could have presented testimony regarding
the MPS had it chosen to do so
. But, again, MWG chose to present no testimony relating
to the impact on MWG whatsoever
. Having chosen not to include in the record any
information regarding the impact of the Illinois proposal on MWG, it cannot now
complain that it had insufficient time to address the MPS .
WRITTEN COMMENTS
Finally, MWG has failed to show why the issues it raises cannot be addressed in
written comments, currently due on September 20 . As described above, many of the
factual issues it raises were in fact addressed during the August hearings . To the extent
that MWG believe that these issues were not sufficiently addressed, MWG can (and
certainly will) identify these as reasons for the Board not to adopt the rule .
The legal issues MWG raises can plainly be addressed during the post-hearing
comments . In general, legal issues are ill suited to being addressed during the hearing,
since they do not require factual testimony for their resolution
. Indeed MWG rejected an
opportunity to have the post-hearing comments handled more as briefs, despite their
statements here that yet another hearing needs to be held to address certain legal issues
.
Scheduling an additional hearing to address purely legal issues would be a substantial
waste of public and private resources .
As will be discussed in the post-hearing comments, many of these legal issues
would not withstand further scrutiny . MWG argues that the Board lacks authority to
adopt rules directed at specific companies or operations in the context of a general
rulemaking
. Yet this argument is completely contradicted by the sweeping language of
Section 27 of the Illinois Environmental Protection Act (415 ILCS 5/1,
et seq . ; "Act")
which authorizes the Board to adopt regulations that "may make different provisions as
required by circumstances for different contaminant sources and for different
geographical areas . . . and may include regulations specific to individual persons or sites
."
(415 ILCS 5/27(a)) . It would be hard to imagine more direct statutory authority for the
Board to adopt the MPS .
MWG's reliance on Commonwealth Edison Co . v . Pollution Control Board, 25
Ill. App. 3d 271 (1 51 Dist 1974) on this issue is similarly misplaced . That case involved a
challenge to a rule of general applicability by a company (ironically a predecessor of
MWG) which claimed that the Board's air rules were "arbitrary and capricious as applied
to it." (25
Ill. App. 3d 271, 280, emphasis added .) The court rejected this "as applied"
argument as a basis for challenging the rule pointing out that the Board could not be
expected to adopt rules which fit every company and that the Act provided specific
statutory relief for individual companies who could claim that the general rule imposed a
specific and different hardship
. Nothing in the opinion precludes the Board from doing
what the Act authorizes, that is establishing different standards for different
circumstances .
While the issues MWG raises with respect to the retirement of allowances are less
clear cut, they are similarly ill founded . The challenged New York regulations which
were the subject of the Clean Air Markets Group cases essentially precluded New York
generators from selling lawfully obtained emission allowances to generators in certain
other states, and these regulations were challenged by the New York generators
themselves . These cases would be inapplicable to the MPS which involves a voluntary
retirement of allowances obtained for reductions made in compliance with the rule itself .
In this light, these retirements are similar to the allowance retirements approved in Clean
Air Act consent decrees such as the one recently entered into by Dynegy in
U.S. v.
Illinois Power .
Since these consent decree retirements are approved as legal by a federal
judge, and since the MPS retirements do not affect only a segment of upwind states, it is
difficult to see how they burden commerce or would be illegal under the Clean Air Act .
Finally, MWG is simply wrong in identifying impacts on future NOx and SOx
regulations as a matter which cannot be addressed without further analysis and hearings .
This is another legal issues and the Hearing Officer herself directed that this be addressed
by participants in their written comments . While these issues will be discussed further at
that time, the Board should note that nothing in the MPS limits the Board in adopting
NOx and SOx limits in future rulemakings . The MPS requires the commitment to achieve
the specified NOx and SOx limits as a pre-condition to the extended schedule for
mercury controls . The adoption of the MPS requires no determination by the Board that
these preconditions are sufficient to attain CAIR or future non-attainment limits . The
Board will have complete opportunity to evaluate and adopt appropriate CAIR limits
during the upcoming CAIR hearings
. As a result there is no reason to have further
hearings in this proceeding regarding this issue .
CONCLUSION
The Board should deny MWG's motion for an additional hearing because MWG
has failed to meet the Board's standards for justifying this request and no further hearings
are necessary . MWG had ample time to prepare and present its case, and questioned
Agency and Ameren witnesses extensively on the impact of the MPS . MWG has not
shown that it would be prejudiced or that it exercised due diligence with respect to the
MPS issue. Finally, all of the issues which MWG believes require an additional hearing
have been discussed during the two hearings already held and can be easily discussed in
written comments .
WHEREFORE, for the reasons stated in this Response, MWG's motion for an
additional hearing should be denied .
Date : August 31, 2006
James T . Harrington
David L . Rieser
Jeremy Hojnicki
Attorneys for Petitioners
McGuire woods LLP
77 West Wacker, Suite 4100
Chicago, Illinois 60601
4137607 .v1
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY
RESOURCE GENERA ING
CO
d ELE
C ENERGY,
CERTIFICATE OF SERVICE
The undersigned, one of the attorneys for Petitioners, hereby certifies that I served a copy of the attached document,
Ameren's Response to Midwest Generation's Motion for Additional Hearings, upon those listed below on August 31, 2006 via
First Class United States Mail, postage prepaid .
To :
John J
. Kim, Managing Attorney
Charles E . Matoesian, Assistant Counsel
Gina Roccaforte, Assistant Counsel
Illinois Environmental Protection Agency
Division of Legal Counsel
1021 North Grand Avenue East
Post Office Box 19276
Springfield, IL 62794-9276
Marie E . Tipsord, Hearing Officer
Illinois Pollution Control Board
100 West Randolph, Suite 11-500
Chicago, IL 60601
Bill S . Forcade
Katherine Rahill
Jenner & Block LLP
One IBM Plaza
Chicago, IL 60611
Bruce Nilles
Sierra Club
214 N
. Henry Street, Suite 203
Madison, WI 53703
William A. Murray
Special Assistant Corporation Counsel
Office of Public Utilities
800 East Monroe
Springfield, IL 62757
Faith E . Bagel
Howard A . Learner
Meleah Geertsma
Environmental Law and Policy Center
35 East Wacker Drive, Suite 1300
Chicago, IL 60601
S . David Farris
Manager, Environmental, Health and Safety
Office of Public Utilities, City of Springfield
201 East Lake Shore Drive
Springfield, IL 62757
Dianna Tickner
Prairie State Generating Co ., LLC
701 Market Street, Suite 781
St. Louis, MO 63101
James T . Harrington
David L . Rieser
Jeremy R . Hojnicki
McGuireWoods LLP
77 West Wacker, Suite 4100
Chicago, Illinois 60601
Telephone : 312/849-8100
Ms. Dorothy Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph Street
Suite 11-500
Chicago, IL 60601
Mr. Keith Barley
Chicago Legal Clinic, Inc .
205 West Monroe, 4'^ Floor
Chicago, IL 60606
Kathleen C . Bassi
Sheldon A . Zabel
Stephen J . Bonebrake
Joshua R
. More
Glenna L . Gilbert
Schiff Hardin LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, IL 60606
Christopher W . Newcomb
Karaganis, White & Mage, Ltd .
414 North Orleans St
., Suite 810
Chicago, IL 60610
N
. LaDonna Driver
Katherine D . Hodge
Hodge Dwyer Zeman
3150 Roland Ave ., P
.O. Box 5776
Springfield, IL 62705-5776
James W, Ingrain
Senior Corporate Counsel
Dynegy Midwest Generation, Inc
.
1000 Louisiana, Suite 5800
Houston, TX 77002
Daniel McDevitt
Midwest Generation
440 South LaSalle Street, Suite 3500
o, IL
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