BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

)

PROPOSED NEW CAIR SO

2

, CAIR NO

X

)

ANNUAL AND CAIR NO

X

OZONE SEASON

)

R06-26

TRADING PROGRAMS, 35 ILL. ADM.

)

(Rulemaking- Air)

CODE 225, CONTROL OF EMISSIONS

)

FROM LARGE COMBUSTION SOURCES,

)

SUBPARTS A, C, D and E

)

NOTICE

TO: Dorothy Gunn, Clerk

Illinois Pollution Control Board

James R. Thompson Center

100 West Randolph, Suite 11-500

Chicago, Illinois 60601-3218

SEE ATTACHED SERVICE LIST

PLEASE TAKE NOTICE that I have today filed with the Office of the Pollution Control

Board a RESPONSE TO MOTION TO DISMISS, a copy of which is herewith served upon you.

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY

By: ______________________

John J. Kim

Managing Attorney

Air Regulatory Unit

Division of Legal Counsel

DATED: December 22, 2006

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

THIS FILING IS SUBMITTED

217.782.5544

ON RECYCLED PAPER

217.782.9143 (TDD)

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

)

PROPOSED NEW CLEAN AIR

)

INTERSTATE RULES (CAIR) SO

2

, NO

x

)

R06-26

ANNUAL AND NO

x

OZONE SEASON

)

(Rulemaking – Air)

TRADING PROGRAMS, 35 ILL. ADM.

)

CODE 225, SUBPARTS A, C, D and E

)

RESPONSE TO MOTION TO DISMISS

NOW COMES the Proponent, the ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY (“Illinois EPA”), by one of its attorneys, and, pursuant to the Illinois Pollution

Control Board (“Board”) Rules at 35 Ill. Adm. Code 101.500 and 101.504, hereby responds to

the Motion to Dismiss (“Motion”) filed by Dynegy Midwest Generation, Inc., Midwest

Generation, LLC, and Southern Illinois Power Cooperative (“Movants,” collectively). In support

of this response, the Illinois EPA states as follows:

FAILURE TO TIMELY FILE MOTION TO DISMISS

In their Response to Motion to Dismiss, Environment Illinois and the Environmental Law

and Policy Center (“Environmental Advocates,” collectively), the Environmental Advocates

present a cogent and compelling argument as to the untimely filing of the Motion by the

Movants. The Illinois EPA finds the presentation of relevant facts and legal arguments in the

Environmental Advocates’ response to be more than sufficient to warrant the Board’s denial of

the Motion on the grounds that it was not timely filed based on the Board’s own procedural rules

that such a motion be filed within 30 days of the initial filing. In this case more than 7 months

has passed and 5 days of hearing in two cities.

Further, the Environmental Advocates clearly distinguish and put into proper perspective

the Board’s past ruling in the case of

Brazas v. Village of Hampshire

, PCB 06-131. Based upon

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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the strong arguments presented by the Environmental Advocates, the Illinois EPA joins in their

request that the Board deny the Motion. A decision by the Board to allow consideration of the

merits of the Motion would reward the Movants for their untimely conduct and would in fact

materially prejudice the Illinois EPA and other interested participants given the extensive

administrative resources that have to date been expended through the participation and defense

of the underlying rulemaking proposal.

ARGUMENTS REGARDING LACK OF JURISDICTION

Assuming arguendo that the Board does consider the merits of the Motion, despite the

strong and clear cut arguments to the contrary, the Board should nonetheless deny the Motion

based on the lack of merit of the arguments presented by the Movants.

Statutory Authority Regarding NO

x

Trading Rules

The first argument raised by the Movants is that the presence of Sections 9.8 and 9.9 of

the Environmental Protection Act (“Act”) (415 ILCS 5/9.8, 5/9.9) as compared with the more

general provisions of Section 10 of the Act (415 ILCS 5/10) results in the Board lacking

jurisdiction to consider and promulgate the NO

x

trading provisions found in Subparts D and E of

Part 225. This conclusion is premised on the observation that Sections 9.8 and 9.9 address

specific trading systems (the Emissions Reductions Market System (“ERMS”) and NO

x

SIP Call,

respectively), while Section 10 of the Act confers general authority upon the Board to adopt

regulations to promote the purposes of the Act. Section 10 lists examples of such regulations.

This listing is provided without limiting the generality of the authority.

Essentially, the argument being proffered by the Movants is an application of the

statutory maxim of construction of

inclusio unius est exclusio alterius

, or the inclusion of one is

the exclusion of the other. Presumably, the Movants’ rationale is that the more specific nature of

2

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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Sections 9.8 and 9.9 – that evidence the General Assembly’s recognition and establishment of

certain trading programs – counteracts the more general authority conferred by Section 10. As a

result, the Movants would have the Board find that there is no authority pursuant to Section 10 of

the Act to allow the Board to adopt the NO

x

trading provisions of this proposed rulemaking.

This argument fails for several reasons. First, a clear reading of Section 10 of the Act

shows the General Assembly’s intent to provide general and broad rulemaking authority upon

the Board, as evidenced by the words that a list of examples of rulemakings that could be

promulgated by the Board was provided “[w]ithout limiting the generality of this authority.” 415

ILCS 5/10(A). This unequivocal statement of statutory intent by the General Assembly,

ascertained by a clear and plain reading of Section 10(A), cannot be questioned. How then

should the provisions of Sections 9.8 and 9.9 be reconciled with Section 10? Initially, by calling

into question the application of the above-cited statutory maxim (i.e., inclusion of one is to the

exclusion of all others) by the Movants.

If the Movants were to have an argument of substance, Section 10 could not contain the

language that expresses the general grant of authority to the Board.

Further, the

“inclusion/exclusion” maxim does not preclude expressions by the General Assembly that an

administrative agency could have broad rulemaking authority while also having specific

authority for particular rulemakings. Indeed, if the Movants’ argument were taken as true, then

only specific provisions similar to Sections 9.8 and 9.9 could be relied upon by the Board to

enact regulations, and Section 10 would be rendered superfluous.

Another reason the Movants’ argument is without merit can be found by an examination

of the language within Sections 9.8 and 9.9 of the Act. Along with a description of the particular

programs and contents of the programs is language that creates special funds to be used in

3

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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conjunction with the programs (the Alternative Compliance Market Account Fund for the ERMS

program and the NO Trading System Fund for the NO SIP Call). Any money belonging to or

for the use of the State must either be paid into the State’s general revenue fund or into a special

fund. 30 ILCS 105/4. As both the ERMS program and NO SIP Call involve the receipt of

funds, special funds had to be established by the General Assembly to allow for the receipt of

such funds. Hence, an argument could be made that Sections 9.8 and 9.9 were adopted because

of a need to create these special funds rather than because they are trading programs. In the case

of the pending rulemaking, there is no need to create a special fund for receipt of money and thus

arguably no need for the General Assembly to pass statutory provisions similar to Sections 9.8

and 9.9. The presence of such language in those sections creating special funds distinguish those

provisions from the present rulemaking, and thus comparison of Sections 9.8 and 9.9 to Section

10 as is being attempted by the Movants is improper.

xx

x

For these reasons, the Movants’ arguments that the NO trading provisions of the

proposed rulemaking should be stricken must be denied by the Board. The Board should instead

recognize the clear and intended general authority conferred by Section 10 of the Act that

authorizes the consideration and promulgation of the NO trading provisions of the proposed

rulemaking.

x

x

Statutory Authority Regarding Regulation Of SO

2

Emissions

The Movants argue that Section 10(B) of the Act (415 ILCS 10(B)) prohibits the Board

from adopting the SO

2

provisions of Subpart C of the proposed Part 225 rulemaking given the

language of Section 10(B)(1) that refers to regulations that may not be more restrictive than

necessary to attain and maintain the Primary National Ambient Air Quality Standards

4

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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(“NAAQS”) for Sulfur Dioxide. This argument also is without merit, as the Movants fail to pay

heed to the history and purpose of Section 10(B).

Again, a review of the authority pursuant to Section 10(A) of the Act is warranted.

Section 10(A) 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). Not only are the proposed regulations necessary to meet the State’s

obligations under the Clean Air Interstate Rule (“CAIR”), they are also necessary to meet the

State’s obligations under the Clean Air Act (“CAA”) to attain the two new NAAQS: 8-hour

ozone and PM

2.5

. With respect to PM

2.5

, the United States Environmental Protection Agency

(“USEPA”) has identified emissions of both NO

X

and SO

2

as precursors to PM

2.5

formation in

the atmosphere. As part of the steps needed for Illinois to demonstrate attainment with the PM

2.5

NAAQS, to reduce interstate transport, and to improve visibility, Illinois must adopt and

implement certain regulations for the control of NO

X

and SO

2

emissions that meet these federal

requirements.

For reasons other than attainment of the SO

2

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.

1

As the Movants attempt to argue, it may seem at first glance that

Section 10(B) is applicable. A closer reading, however, of that provision and subsequent

regulatory and legislative history prove otherwise. Section 10(B) provides:

1

On April 4, 1995, USEPA approved the State Implementation Plan (“SIP”) revision necessary for the last

remaining SO

2

nonattainment area in the Illinois to be redesignated to attainment of the NAAQS. 40 CFR 52.724(h).

5

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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The Board shall adopt SO

2

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.

2

The Purpose of Section 10(B) Has Been Met

Section 10(B) of the Act is not applicable to this rulemaking since the purpose behind that

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 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.

U.S. Bank National Association v. Clark

, 216

Ill.2d

334, 346, 837

N.E.2d

74, 82 (2005).

The language of Section 10(B) is clear. The provisions were intended to limit the extent

to which SO

2

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 Clean Air Act

Amendments of 1977. Accordingly, the General Assembly clearly gave the Board the authority

2

Section 10(B) of the Act was adopted as part of Senate Bill 1967, later P.A. 81-1370, effective August 8, 1980.

6

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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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 “state-wide” SO

2

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 SO

2

. 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

created by the General Assembly; the first sought to impose SO

2

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 SO

2

emissions standards specifically tailored to the

major metropolitan areas, which included areas in which the SO

2

NAAQS were not met or were

threatened.

Setting aside the first purpose of Section 10(B), the second part of the statutory provision

may be now examined. To address that second purpose, i.e., nonattainment in the major

metropolitan areas, Illinois EPA proposed standards for SO

2

emissions from fuel combustion

emission sources located within the major metropolitan areas.

3

The proposal was received by the

3

See

,

In the Matter Of: Sulfur Dioxide Emission Limitations: Rule 204 of Chapter 2

, R80-22, February 24, 1983.

7

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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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 SO

2

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.

R80-22, p. 1. Those final rules are now found in Part 214 of the Board’s regulations. 35 Ill.

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 the provisions of Section 10(B) related to

that purpose no longer have any purpose.

With respect to the first portion of Section 10(B), the Board was left with certain

guidelines as to the nature of regulations affecting SO

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 the need to attain the NAAQS for SO

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 SO

2

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 SO

2

-related regulations by the Board.

8

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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Section 10(B) Limited to SO

2

NAAQS

Another reason Section 10(B) of the Act is not an impediment to this rulemaking

proposal is the limited scope of that section. The only NAAQS that Section 10(B) addresses is

the NAAQS for SO

2

, as is plainly evidenced in Section 10(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. 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,

and all of which are consistent with the Board’s authority pursuant to Section 10(A) of the Act,

regulation of SO

2

emissions as contemplated in this proposal is appropriate and not precluded by

Section 10(B). For these reasons, the Movants’ arguments that Section 10(B) of the Act

precludes the Board from exercising its statutory authority and adopting the proposed regulations

must be taken as legally deficient. Accordingly, the Motion should be denied.

9

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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WHEREFORE, for the reasons set forth above, the Illinois EPA respectfully moves that

the Board deny the Motion filed by the Movants.

Respectfully submitted,

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY

By:

__________________

John J. Kim

Managing Attorney

Air Regulatory Unit

Division of Legal Counsel

DATED: December 22, 2006

1021 North Grand Avenue, East

P.O. Box 19276

Springfield, Illinois 62794-9276

217.782.5544

217.782.9807 (Fax)

10

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, DECEMBER 22, 2006

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