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 the COMMENTS ON FIRST NOTICE, of the Illinois Environmental Protection Agency a

copy of which is herewith served upon you.

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY

By:

__/s/___Rachel L. Doctors

Rachel L. Doctors

Assistant Counsel

Division of Legal Counsel

DATED: June 25, 2007

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, June 25, 2007

---

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

)

R06-26

PROPOSED CLEAN AIR INTERSTATE

)

(Rulemaking – Air)

RULE (CAIR), SO

2

, NO

X

ANNUAL AND NO

X

)

OZONE SEASON TRADING PROGRAMS,

)

35 ILL.ADM.CODE 225, SUBPARTS A, C, D

)

AND E

)

COMMENTS OF ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY ON FIRST NOTICE

NOW COMES the ILLINOIS ENVIRONMENTAL PROTECTION AGENCY (“Illinois

EPA”), by its attorneys, and hereby submits its comments on the first notice published on May

11, 2007 (31 Ill. Reg. 6764) in the above rulemaking proceeding. The Illinois EPA also asks that

the Illinois Pollution Control Board (“Board”) incorporate by reference the Illinois EPA’s past

comments and representations as memorialized in joint comments or motions. The purpose of

proposed new Part 225, Subparts A, C, D and E to the Board’s air pollution control regulations

(35 Ill. Adm. Code 225) is to reduce intra- and interstate transport of sulfur dioxide (“SO

2

”) and

nitrogen oxides (“NO

x

”) 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 1

through September 30) of each calendar year, through the adoption of the Clean Air Interstate

Rule (“CAIR”) SO

2

trading program, the CAIR NO

x

Annual trading program and the CAIR NO

x

Ozone Season trading program that establish retirement ratios for SO

2

allowances established

under the CAIR and specific allocations for CAIR NO

x

Annual and Ozone Season allowances.

These comments address three areas: 1) the need for expedited adoption of the CAIR

proposal; 2) comments from Southern Illinois Power Cooperative (“SIPC”); and 3) anticipated

comments from Midwest Generation; and 4) proposed clarifications and corrections to the First

Electronic Filing, Received, Clerk's Office, June 25, 2007

---

notice.

I.

Expedited Adoption of the CAIR Proposal

The Illinois EPA references back to July 20, 2006, when the Board issued an order

granting in relevant part a motion by the Illinois EPA to expedite the proceedings. The Board

stated:

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.

Board’s July 2006 order, p. 3. As further provided by the Board in its July 2006 order, the

Illinois EPA’s basis for requesting the motion to expedite was to control the allocations for the

2009 control period. At the time of the motion, the United States Environmental Protection

Agency (“USEPA”) intended to make NO

x

allocations for the 2009 control period by July 30,

2007. Board’s July 2006 order, p. 2.

The Illinois EPA recognizes and appreciates the time and resources that the Board has

thus far expended in the handling and review of this rulemaking. However, the need for this

rulemaking to continue on as expedited a resolution as possible is all the more pressing. USEPA

has now made it known that it will not implement USEPA-determined NO

x

allocations that may

impact a state’s ability to regulate its sources in a different manner until September 2007 (i.e.,

one year after the September 2006 State Implementation Plan (“SIP”) submission deadline).

1

1

Source: CAIR Frequent Questions – CAIR FIP. http://www.epa.gov/airmarkets/progsregs/cair/faq-3.html.

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Promulgation of these CAIR federal implementation plans (“FIPs”) in no way precludes a

state from developing its SIP revision to either adopt the model trading rules (with modifications

to the extent allowed for certain program elements), or to meet the CAIR emission reduction

requirements through different measures of the state's choosing, as provided in CAIR. USEPA

will not take any steps to implement these FIPs (e.g., by recording USEPA-determined NO

x

allocations in source accounts) that may impact a state's ability to regulate its sources in a

different manner until September 2007, a year after the September 2006 SIP submission

deadline.

Initial allocations based on a fully adopted state rule are required to be submitted to

USEPA no later than September 30, 2007. If Illinois fails to either fully adopt its CAIR proposal

by September 25, 2007, or submit final NO

x

allocations for the Annual and Ozone trading

programs by September 30, 2007, USEPA will use the NO

x

allocations for Illinois sources as set

forth in the FIP. 71

Fed. Reg.

25328, April 28, 2006. These allocations would be for the 2009

control period. If USEPA uses the FIP allocations scheme, there will be allowances allocated

from the Clean Air Set-Aside (“CASA”) to EGUs rather than as described by the Illinois CASA

regulations. Allowances from the CASA represent 25 percent of the NO

x

budget for the 2009

control periods. As allowances from the CASA are intended to encourage installation of air

pollution control equipment, as well as investment in energy efficiency and conservation, and

renewable energy projects in the 2009 control period, these efforts would not receive this

incentive for a critical year. The 2009 control period is the year looked to for attainment of the

8-hour ozone and PM

2.5

National Ambient Air Quality Standards.

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Therefore, the Illinois EPA stresses the importance and urgency in the Board continuing

to handle this rulemaking in an expedited manner such that a final rule is effective before

September 2007 if at all possible.

II.

Comments from SIPC concerning initial allocations for 2009 through 2011.

Although the testimony elicited and evidence submitted to date in this proceeding reflect

agreement of all parties on a number of issues, one of the regulated sources, SIPC, that it does

not agree with Illinois EPA’s initial allocation approach for years used for determining its initial

allocation or with the option for using gross electrical output for the initial allocations for control

periods 2009 through 2011.

With respect to the issues raised by SIPC, the Illinois EPA must take issue with SIPC’s

argument that it is “significantly disadvantaged” by the initial allocation methodology. While it

may be true that there were not three years of “normal” operations at SIPC during the initial

look-back period, as SIPC argues, this does not imply that SIPC should be treated differently

from any other source. In any regulation of general applicability, there will always be affected

sources that say the rule affects them differently than somebody else. However, adding a special

provision for SIPC raises the question of what other sources might have issues whereby they did

not have “normal” operations during the look-back period – whatever “normal” might mean.

Beyond that issue, the question must be raised as to whether SIPC is truly disadvantaged

by the allocation. The Illinois EPA has estimated the approximate number of allowances SIPC

would need for its Unit 123, which is at issue here, based on SIPC’s description of 2005 being

the first “normal” year. The available information indicates that if SIPC runs its control device

throughout the year, it will easily have enough allowances, based on the draft allocations sent to

USEPA by the Illinois EPA and posted on its website, to cover Unit 123. In addition, SIPC will

4

Electronic Filing, Received, Clerk's Office, June 25, 2007

---

almost certainly receive

additional

allowances from the CASA. This means SIPC should not

only have enough allowances to cover emissions from Unit 123, but also have enough

allowances to bank or sell. Thus, altering the rule to provide SIPC with even more allowances is

unnecessary.

The Illinois EPA must also point out the fact that other sources would be harmed by

agreeing to SIPC’s requested change. Illinois has a fixed number of allowances. Any allowance

that is given to SIPC must be removed from the allocation for another source – a source that has

demonstrated a need for that allowance using the proper allocation calculation.

SIPC essentially argues that it is disadvantaged by the line being drawn where it was for

the purposes of calculating allocations. However, granting a special, essentially site-specific,

change in the regulation for SIPC opens the door to all other affected regulated entities to request

special treatment as well. But as it stands now, the calculation methodology is fair and equal to

all sources in the program. Making the modification requested by SIPC would cause the

allocation methodology to be slanted in favor of SIPC and would negatively impact other sources

that lose allowances. And, as already noted, the Illinois EPA believes that if SIPC uses its control

device throughout the year, the extra allowances are not needed for Unit 123 anyway.

With respect to SIPC’s comments regarding output-based regulation, the Illinois EPA

is aware that the timeline for submitting gross electrical output data needs to be modified, and

this is addressed below. That issue aside, the concerns raised by SIPC regarding efficiency have

been addressed in hearings and previous responses to SIPC’s comments.

The Illinois EPA acknowledges that one of SIPC’s boilers may not be as efficient as

others in Illinois. However, circulating fluidized bed (“CFB”) boilers were considered in the

design of the regulation and are eligible for allowances from the CASA. Any perceived shortfall

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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in allowances allocated to this unit due to differences in efficiency should be exceeded by

additional allowances allocated from the CASA. It should also be noted that virtually all

electrical generating utility (“EGU”) boilers in Illinois operate pollution control equipment that

reduce the overall efficiency of a given unit. This is addressed by the allocation methodology

being based on gross electrical output rather than net electrical output. The Illinois EPA

continues to support its previous position that an output-based regulation is more

environmentally beneficial than one based upon heat input. The Illinois EPA does not support

amending this aspect of the rule in consideration of a single unit, especially given that this type

of unit has been considered in the design of the rule as a whole.

It should be noted that on page 3 of SIPC’s comments, SIPC indicates it believes the

Illinois EPA opposes their suggested changes because the Illinois EPA would need to adjust

allocations submitted to USEPA. However, this is not the case. SIPC has apparently

misunderstood the Illinois EPA’s reasoning. In fact, the reasons for the Illinois EPA’s

opposition are described above, and none have anything to do with previous submittal of

allocations nor USEPA’s parallel processing.

III.

Anticipated comments from Midwest Generation

Midwest Generation has indicated it will be filing comments, asking for a modification to

Subpart F. This modification apparently deals with the sorbent flow for mercury controls under

the Combined Pollutant Standard (“CPS”).

The Illinois EPA opposes such a change to Subpart F for several reasons. First, the

sorbent flow language in the CPS matches the equivalent language in the Multi-Pollutant

Standard (“MPS”) found at Section 225.233(c)(2)(D). Changing the CPS without making the

same change to the MPS is inappropriate and unfair to those sources planning to make use of the

6

Electronic Filing, Received, Clerk's Office, June 25, 2007

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MPS. Furthermore, Midwest Generation has only brought this issue to the Illinois EPA’s

attention one week prior to the end of first notice comment period. As such, the Illinois EPA has

not had an adequate opportunity to fully review the implications of such a change. Overall,

while the language in the CPS subpart, was agreed to by the Illinois EPA and Midwest

Generation, this change was not, and is a last-minute modification with unforeseeable

consequences.

IV.

Proposed clarifications and corrections to the first notice.

As more time has elapsed than anticipated by the Illinois EPA’s initial proposal for

CAIR, a number of dates in the proposal, if left unchanged, would require retroactive

compliance. The Illinois EPA has also received a second set of comments from USEPA and has

noticed that a number of the amendments that it recommended in its January 5, 2007, comments

to the Board on the initial proposal were not included in the first notice. In addition, there are

some typos that need correction and that some clarifications that need to be made. Hence, the

following comments address the above areas. Attached to these comments are suggested

amendments to the first notice. Two different drafts have been attached. The first version

includes strikeouts and underlines and the second version shows the text as if all the proposed

changes are included in the second notice.

1.

USEPA had given the Illinois EPA preliminary comments in December 2006. These

comments were marked in blue highlighted underlining and strikeouts in the Illinois

EPA’s January 5, 2007, comments on the proposed rule. The first notice document does

not appear to have incorporated any of the blue highlighted changes. To complicate

matters, USEPA then gave the Illinois EPA a second set of comments in May 2007, some

of which were different or undid the December recommendations. Hence, not all the blue

changes are now appropriate or proposed by the Illinois EPA, only the ones noted below.

a.

Section 225.130 Definitions

7

Electronic Filing, Received, Clerk's Office, June 25, 2007

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i.

In the definition for “CAIR authorized account representative” a “CAIR

SO

2

Allowance System Tracking account” should be a CAIR SO

2

compliance account.”

ii.

The definition for “CAIR Trading Programs” should be deleted.

iii.

The limitation of a “specified year” in the definition for “coal-fired”

should be limited to the allocation provisions in Sections 225.435,

225.445, 225.535, and 225.545. The second part of the definition should

be used for all other purposes:

For purposes of allocating allowances under Sections 225.435, 225.445,

225.535, and 225.545 Subparts B, D, and E, combusting any amount of

coal or coal-derived fuel, alone or in combination with any amount of any

other fuel, during a specified year;. or

Except as provided aboveFor purposes of Subpart C, combusting any

amount of coal or coal-derived fuel, alone or in combination with any

amount of any other fuel.

iv.

In the definition for “compliance account” the following paragraph should

be added to define an SO

2

compliance account:

For the purposes of Subpart C, a “compliance account” means a CAIR

SO

2

compliance account, established by USEPA for a CAIR SO

2

source

pursuant to 40 CFR 96, subpart FFF in which any SO

2

allowance

allocations for the CAIR SO

2

units at the source are initially recorded and

in which are held any SO

2

allowances available for use for a control

period in order to meet the source’s CAIR SO

2

emissions limitations in

accordance with Section 225.310 and 40 CFR 96.254, as incorporated by

reference in Section 225.140.

v.

In the definition for “nameplate capacity” the following words should be

added:

… operation (when not restricted by seasonal or other deratings) as of

such installation 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 of such

completion as specified by the person conducting the physical change.

b.

In new Section 225.150 Commence Commercial Operation, USEPA had

requested that in the introductory phrase that the words “serving a generator” be

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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struck. They had also noted that references to the applicability sections in 40

CFR 96.104, 96.204, and 96.304 were inappropriate, in that the proposal did not

incorporate by reference these sections and that the proposal should cite the

applicability sections contained in the rule:

Commence commercial operation means, for the purposes of Subparts C, D and

E, with regard to a unit serving a generator:

a)1)

For a unit that is a CAIR SO

2

unit, CAIR NO

x

unit, or a CAIR NO

x

Ozone

Season unit pursuant to

Sections 225.305, 225.405, and 225.50540 CFR

96.104, 96.204 or 96.304,

a)2)

For a unit that is a CAIR SO

2

unit, CAIR NO

x

unit, or a CAIR NO

x

Ozone

Season unit pursuant to

Sections 225.305, 225.405, and 225.50540 CFR

96.104, 96.204 or 96.304,

c.

In Sections 225.305, 225.405, and 225.505 Applicability, USEPA had commented

that a verb rather than a conjunctions should preface subsections (b)(3)(B) and

(b)(4)(B):

(b)(3)(B) HasWith an average annual fuel consumption…

(b)(4)(B) HasWith an average annual fuel consumption…

d.

In Section 225.310 Compliance Requirements, USEPA made the following

comments:

i.

Subsection (c)(1) needs to include in addition to the monitoring

requirements of Subpart HHH, the reporting and recordkeeping

requirements:

… at the source must comply with the monitoring

, reporting, and

recordkeeping requirements of 40 CFR 96, subpart HHH….

ii.

Subsection (d)(1) needs to clarify the allowance transfer deadline means

by March 1 if it is a business day or by the first business day thereafter.

The language also needs to specify that for SO

2

emissions, allowances are

in tonnage equivalents:

By the allowance transfer deadline, March 1, 2011, and March 1 of each

subsequent year

if March 1 is a business day, the owner or operator of

each CAIR SO

2

source and each CAIR SO

2

unit at the source must hold a

tonnage equivalent in CAIR SO

2

allowances available for compliance

deductions pursuant to 40 CFR 96.254(a) and (b) in the CAIR SO

2

source's CAIR SO

2

compliance Allowance System Tracking account. If

March 1 is not a business day, theThe allowance transfer deadline is

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means by midnight of March 1 (if it is a business day) or midnight of the

first business day thereafter. The number of allowances held on the

allowance transfer deadline may not be less than the total tonnage

equivalent of the tons of SO

2

emissions for the control period from all

CAIR SO

2

units at the CAIR SO

2

source, as determined in accordance

with 40 CFR 96, subpart HHH.

iii.

Subsection (d)(3) needs to specify when the requirements for holding

allowances commences:

(d)(3) Each CAIR SO

2

unit will be subject to the monitoring

requirements of subsection (d) (c)(1) of this Section for the control period

starting on the later of January 1, 20102009 ….

iv.

Subsection (d)(7) needs to indicate that no CAIR SO

2

allowance

constitutes a property right, whether or not it has been allocated by

USEPA:

A CAIR SO

2

allowance allocated by USEPA pursuant to the CAIR SO

2

TradingProgram does not constitute a property right.

e.

In Section 225.320 Permit Requirements, USEPA made the following comments:

Subsection (c) contains an incorrect cross reference and needs to incorporate by

reference the definition in the federal CAIR:

Each CAIR permit is deemed to incorporate automatically the definitions

and terms specified in Section 225.130 and 40 CFR 96.202, as

incorporated by reference in Section 225.140225.120 and….

f.

In Section 225.410 Compliance Requirements, USEPA made the following

comments:

i.

Subsection (a) should require the designated representative to comply with

the CAIR trading program:

The designated representativeowner or operator of a CAIR NO

x

unit must

comply with the requirements of the CAIR NO

x

Annual Trading Program

for Illinois ….

ii.

Subsection (c)(1) needs to include in addition to the monitoring

requirements of Subpart HH, the reporting and recordkeeping

requirements:

… at the source must comply with the monitoring, reporting, and

recordkeeping requirements of 40 CFR 96, subpart HH….

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iii.

Subsection (d)(1) needs to clarify the allowance transfer deadline means

by March 1 if it is a business day or by the first business day thereafter.

The allowance transfer deadline, March 1, 2010, and by March 1 of each

subsequent year if March 1 is a business day, the owner or operator of

each CAIR NO

x

source and each CAIR NO

x

unit at the source must hold

CAIR NO

x

allowances available for compliance deductions pursuant to 40

CFR 96.154(a) in the CAIR NO

x

source's CAIR NO

x

compliance account.

If March 1 is not a business day, theThe allowance transfer deadline

means by midnight of March 1 (if it is a business day) or midnight of the

first business day thereafter. The number of allowances held on the

allowance transfer deadline may not be less than the tons of NO

x

emissions for the control period from all CAIR NO

x

units at the source, as

determined in accordance with 40 CFR 96, subpart HH.

iv.

Subsection (d)(3) needs to specify that it is for the control period that the

allowance holding requirement applies:

(d)(3) Each CAIR NO

x

unit will be subject to the monitoring

requirements of subsection (c)(1) of this Section for the control period

starting on the later of January 1, 2009 ….

v.

Subsection (d)(4) needs to be clarified:

CAIR NO

x

allowances must be held in, deducted from, or transferred into

or among allowance accounts in accordance with this Subpart and 40 CFR

96, subparts FF and GG.

vi.

Subsection (d)(6) needs to specify that a CAIR NO

x

allowance is a limited

authorization to emit one ton irrespective of how it has been allocated:

A CAIR NO

x

allowance allocated by the Agency or USEPA pursuant to

the CAIR NO

x

Annual Trading Program is a limited authorization to emit

one ton of NO

x

in accordance with the CAIR NO

x

Trading Program…

vii.

Subsection (d)(7) needs to indicate that no CAIR NO

x

allowance

constitutes a property right, whether or not it has been allocated by

USEPA:

A CAIR NO

x

allowance allocated by the Agency or USEPA pursuant to

the CAIR NO

x

Annual Trading Program does not constitute …

g.

In Section 225.420 Permit Requirements, USEPA commented that subsection (c)

contains an incorrect cross reference and needs to incorporate by reference the

definition in the federal CAIR:

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Each CAIR permit is deemed to incorporate automatically the definitions and

terms specified in Section 225.130 and 40 CFR 96.102, as incorporated by

reference in Section 225.140225.120 an …

h.

In Section 225.430(c) Timing for Annual Allocations, USEPA commented that

the language was unclear and proposed the following:

For The Agency will allocate allowances from the NUSA to CAIR NO

x

units that

commence commercial operation on or after January 1, 2006,

that have not been

allocated allowances under Section 225.440 for the applicable or any preceding

control period, the Agency will allocate allowances from the NUSA in

accordance with Section 225.445. The Agency will …

i.

In Section 225.435 Methodology for Calculating Annual Allocations, USEPA

commented on:

i.

The introductory phrase should contain the abbreviation for converted

gross electrical output:

The Agency will calculate converted gross electrical output (CGO)…

ii.

The equations in subsections (a)(1)(A), (a)(1)(B), (a)(1)(C), (b)(1)(A),

(b)(1)(B), and (b)(1)(C) contain a typographical error in which it appears

that the gross electrical output is being multiplied by the megawatt hours,

which is incorrect:

A)

If the unit is coal-fired:

CGO (in MWh) = GO(in MWH)

×

MWh

×

1.0;

B)

If the unit is oil-fired:

CGO (in MWh) = GO (in MWH)

×

MWh

×

0.6; or

C)

If the unit is neither coal-fired nor oil-fired:

CGO (in MWh) = GO

(in MWH)

×

MWh

×

0.4.

iii.

Subsection (c) the units for gross electrical output were omitted:

1)

If the unit is coal-fired:

CGO (in MWh) = GO(in

MWh)

×

1.0;

2)

If the unit is oil-fired:

CGO (in MWh) = GO(in MWh)

×

0.6; or

3)

If the unit is neither coal-fired nor oil-fired:

CGO (in MWh) = GO(in

MWh)

×

0.4.

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j.

In Section 225.440 Annual Allocations, USEPA requested the following

clarification about leftover allowances from the previous control period being

added to the number being allocated in the subsequent control period:

a)

…… Section 225.435, a total amount of CAIR NO

x

allowances equal to

tons of NO

x

emissions in the CAIR NO

x

Annual Trading budget available

for allocation as determined in Section 225.425 and as adjusted to add

allowances not allocated pursuant to this subsection (b) of this Section in

the previous year’s allocation.

b)

…… pursuant to Section 225.435, to the extent whole allowances may be

allocated. The Agency will retain any additional allowances beyond this

allocation of whole allowances for allocation pursuant to subsection (a) of

this Section in the next control period. If there are insufficient allowances

to allocate whole allowances pro rata, these unallocated allowances will be

retained by the Agency and will be available for allocation in later control

periods.

k.

In Section 225.445(d)(5) New Unit Set-Aside (NUSA), USEPA requested that the

wording concerning leftover allowances be clarified and that the take back

provisions be deleted:

5)A) …….. using the unprorated allocation determined for that unit pursuant to

subsection (d)(4) of this Section, to the extent that whole allowances may

be allocated. For any additional allowances beyond this allocation of

whole allowances, the Agency will retain the additional allowances in the

NUSA for allocation pursuant to Section 225.445 in later control periods.

B)

……..using the unprorated allocation determined for that unit pursuant to

subsection (d)(4) of this Section

, to the extent that whole allowances may

be allocated. For any additional allowances beyond this allocation of

whole allowances, the Agency will retain the additional allowances in the

NUSA for allocation pursuant to Section 225.445 in later control periods.

If there are insufficient allowances to allocate whole allowances, the

unallocated allowances will be retained by the Agency and will 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 will 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.

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l.

In Section 225.450 Monitoring, Recordkeeping and Reporting Requirements for

Gross Electrical Output and Useful Thermal Energy, USEPA had two comments:

i.

Subsection (a) should require accurate monitoring:

….. a system for accurately measuring gross electrical output that is

consistent with the requirements of either …

ii.

Subsection (e) contains typographical errors:

… pursuant to the requirements of 40 CFR 60 orand 75, as applicable,

including the appropriateapplicable….

m.

In Section 225.460 Energy Efficiency and Conservation, Renewable Energy, and

Clean Technology Projects, USEPA requested that the last sentence be move to

the middle of the paragraph and a cross reference be added as follows:

i.

In subsection (c)(1):

…… (SNCR), or other add-on control devices for control of NO

x

emissions. For

this purpose, a unit will be considered "existing" after it has been in commercial

operation for at least eight years. Air pollution control upgrade projects do not

include the addition of low NO

x

burners, overfired ….. For this purpose, a unit

will be considered "existing" after it has been in commercial operation for at least

eight years.

ii.

In subsection (d)(2)(B):

Projects undertaken pursuant to Section 225.233 or Subpart F.

n.

In Section 225.480 Compliance Supplement Pool, USEPA requested the

following phrasing:

In addition to the CAIR NO

x

allowances allocated pursuant to Section 225.425,

the USEPA has allowed allocation ofprovided an additional 11,299 CAIR NO

x

allowances in Illinois as afrom the federal compliance supplement pool to Illinois

for the control period in 2009.

However, On January 1, 2009, the Agency will

retire all 11,299 NO

x

allowances for the purposes of public health and air quality

improvements,

none of these allowances will be allocated.

o.

In Section 225.510 Compliance Requirements, USEPA made the following

comments:

i.

Subsection (a) should require the designated representative to comply with

the CAIR trading program:

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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The designated representativeowner or operator of a CAIR NO

x

Ozone

Season unit must comply with the requirements of the CAIR NO

x

Ozone

Season Trading Program for Illinois ….

ii.

Subsection (c)(1) needs to include in addition to the monitoring

requirements of Subpart HHHH, the reporting and recordkeeping

requirements:

… at the source must comply with the monitoring

, reporting, and

recordkeeping requirements of 40 CFR 96, subpart HHHH….

iii.

Subsection (d)(1) needs to clarify the allowance transfer deadline means

by March 1 if it is a business day or by the first business day thereafter.

By the allowance transfer deadline, November 30, 2009, and by

November 30 of each subsequent year if November 30 is a business day,

the owner or operator of each CAIR NO

x

Ozone Season source and each

CAIR NO

x

Ozone Season unit at the source must hold CAIR NO

x

Ozone

Season allowances available for compliance deductions pursuant to 40

CFR 96.154(a) in the CAIR NO

x

Ozone Season source's CAIR NO

x

Ozone Season compliance account. If November 30 is not a business day,

theThe allowance transfer deadline means by midnight of March 1 (if it is

a business day) or midnight of the first business day thereafter. The

number of allowances held on the allowance transfer deadline may not be

less than the tons of NO

x

emissions for the control period from all CAIR

NO

x

Ozone Season units at the CAIR NO

x

Ozone Season source, as

determined in accordance with 40 CFR 96, subpart HHHH.

iv.

Subsection (d)(3) needs to specify that it is for the control period that the

allowance holding requirement applies:

(d)(3) Each CAIR NO

x

Ozone Season unit will be subject to the

monitoring requirements of subsection (c)(1) of this Section

for the control

period starting on the later of May1, 2009 ….

v.

Subsection (d)(6) needs to specify that a CAIR NO

x

Ozone Season

allowance is a limited authorization to emit one ton irrespective of how it

has been allocated:

A CAIR NO

x

allowance allocated by the Agency or USEPA pursuant to

the CAIR NO

x

Ozone Season Annual Trading Program is a limited

authorization to emit one ton of NO

x

in accordance with the CAIR NO

x

Ozone Season Trading Program…

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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vi.

Subsection (d)(7) needs to indicate that no CAIR NO

x

allowance

constitutes a property right, whether or not it has been allocated by

USEPA:

A CAIR NO

x

Ozone Season allowance allocated by the Agency or

USEPA pursuant to the CAIR NO

x

Ozone SeasonAnnual Trading

Program does not constitute …

vii.

Subsection (d)(8) needs to be clarified as follows:

Upon recordation by USEPA pursuant to 40 CFR 96, subpart FFFF or

GGGG, every allocation, transfer, or deduction of an a CAIR NO

x

Ozone

Seasonan allowance to or from a CAIR NO

x

Ozone Season source

compliance account is deemed to amend automatically, and become a part

of, any CAIR NO

x

Ozone Season permit of the CAIR NO

x

Ozone Season

source. This automatic amendment of the CAIR permit will be deemed an

operation of law and will not require any further review.

p.

In Section 225.520 Permit Requirements, USEPA commented that subsection (c)

contains an incorrect cross reference and needs to incorporate by reference the

definition in the federal CAIR:

Each CAIR permit is deemed to incorporate automatically the definitions and

terms specified in Section 225.130 and 40 CFR 96.302, as incorporated by

reference in Section 225.140225.120 an …

q.

In Section 225.530(c) Timing for Annual Allocations, USEPA commented that

the language was unclear and proposed the following:

For The Agency will allocate allowances from the NUSA to CAIR NO

x

Ozone

Season units that commence commercial operation on or after May 1, 2006,

that

have not been allocated allowances under Section 225.440 for the applicable or

any preceding control period, the Agency will allocate allowances from the

NUSA in accordance with Section 225.545. The Agency …….

r.

In Section 225.535 Methodology for Calculating Annual Allocations, USEPA

commented on:

i.

The introductory phrase should contain the abbreviation for converted

gross electrical output:

The Agency will calculate converted gross electrical output

(CGO)…

ii.

The equations in subsections (a)(1)(A), (a)(1)(B), (a)(1)(C), (b)(1)(A),

(b)(1)(B), and (b)(1)(C) contain a typographical error in which it appears

16

Electronic Filing, Received, Clerk's Office, June 25, 2007

---

that the gross electrical output is being multiplied by the megawatt hours,

which is incorrect:

A)

If the unit is coal-fired:

CGO (in MWh) = GO(in MWH)

×

MWh

×

1.0;

B)

If the unit is oil-fired:

CGO (in MWh) = GO (in MWH)

×

MWh

×

0.6; or

C)

If the unit is neither coal-fired nor oil-fired:

CGO (in MWh) = GO (in MWH)

×

MWh

×

0.4.

iii.

Subsection (b) also contains a grammatical error:

(b) ….that either gross electrical output data or heat input data

is to be

used….

iv.

Subsection (c) the units for gross electrical output were omitted:

1)

If the unit is coal-fired:

CGO (in MWh) = GO(in

MWh)

×

1.0;

2)

If the unit is oil-fired:

CGO (in MWh) = GO(in MWh)

×

0.6; or

3)

If the unit is neither coal-fired nor oil-fired:

CGO (in MWh) = GO(in MWh)

×

0.4.

s.

In Section 225.540 Annual Allocations, USEPA requested the following

clarification about leftover allowances from the previous control period being

added to the number being allocated in the subsequent control period:

a)

…… Section 225.535, a total amount of CAIR NO

x

Ozone Season

allowances equal to tons of NO

x

emissions in the CAIR NO

x

Ozone

Season Trading budget available for allocation as determined in Section

225.525 and

as adjusted to add allowances not allocated pursuant to this

Section 225.540 subsection (b) of this Section in the previous year’s

allocation.

b)

…… pursuant to Section 225.535

, to the extent whole allowances may be

allocated. The Agency will retain any additional allowances beyond this

allocation of whole allowances for allocation pursuant to subsection (a) of

this Section in the next control period. If there are insufficient allowances

to allocate whole allowances pro rata, these unallocated allowances will be

retained by the Agency and will be available for allocation in later control

periods.

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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t.

In Section 225.545(d)(5) New Unit Set-Aside (NUSA), USEPA requested that the

wording concerning leftover allowances be clarified and that the take back

provisions be deleted:

5)A) …….. using the unprorated allocation determined for that unit pursuant to

subsection (d)(4) of this Section, to the extent that whole allowances may

be allocated. For any additional allowances beyond this allocation of

whole allowances, the Agency will retain the additional allowances in the

NUSA for allocation pursuant to Section 225.545 in later control periods.

B)

……..using the unprorated allocation determined for that unit pursuant to

subsection (d)(4) of this Section, to the extent that whole allowances may

be allocated. For any additional allowances beyond this allocation of

whole allowances, the Agency will retain the additional allowances in the

NUSA for allocation pursuant to Section 225.545 in later control periods.

If there are insufficient allowances to allocate whole allowances, the

unallocated allowances will be retained by the Agency and will 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 will 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.

u.

In Section 225.550 Monitoring, Recordkeeping and Reporting Requirements for

Gross Electrical Output and Useful Thermal Energy, USEPA had two comments:

i.

Subsection (a) should require accurate monitoring:

….. a system for accurately measuring gross electrical output that is

consistent with the requirements of either …

ii.

Subsection (e) contains typographical errors:

… pursuant to the requirements of 40 CFR 60 orand 75,as applicable,

including the

appropriateapplicable….

v.

In Section 225.560 Energy Efficiency and Conservation, Renewable Energy, and

Clean Technology Projects, USEPA requested that the last sentence be move to

the middle of the paragraph and a cross reference be added as follows:

i.

In subsection (c)(1):

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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…… (SNCR), or other add-on control devices for control of NO

x

emissions. For

this purpose, a unit will be considered "existing" after it has been in commercial

operation for at least eight years. Air pollution control upgrade projects do not

include the addition of low NO

x

burners, overfired ….. For this purpose, a unit

will be considered "existing" after it has been in commercial operation for at least

eight years.

ii.

In subsection (d)(2)(B):

Projects undertaken pursuant to Section 225.233 or Subpart F.

2.

The Illinois EPA is proposing the following changes based on USEPA’s second set of

comments:

a.

In Section 225.150 Commence Commercial Operation:

i.

In subsections (a)(2) and (b)(2), the second “replaced unit” should be

replacement unit, consistent with the definition in 40 CFR 96.102, 96.202,

and 96.302.

(a)(2) ……., and the replacementreplaced unit will be treated as a

separate unit with a separate date for commencement of ….

(b)(2) ….., and the replacementreplaced unit will be treated as a separate

unit with a separate date for commencement of ……

ii.

In subsection (b), USEPA requested that affected unit be referred to as a

CAIR SO

2

unit, CAIR NO

x

unit, or CAIR NO

x

Ozone unit:

(b)

………… November 15, 1990 or the date the unit commences

commercial operation as defined in subsection (a) of this Section,

the unit's date for commencement of commercial operation will be

the date on which the unit becomes a CAIR SO

2

unit, CAIR NO

x

unit, or CAIR NO

x

Ozone Season unit an affected unit pursuant to

Section 225.305, 225.405, or 225.505, respectively.

b.

In Section 225.310 Compliance Requirements:

i.

In subsection (d)(1), USEPA commented that the word “midnight” had

been left out of the transfer deadline phrase

By the allowance transfer deadline,

midnight of March 1, 2011, and by

midnight of March 1 of each subsequent year, ….

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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ii.

In subsection (d)(2), USEPA commented that it is only excess emissions

in whole tons not fractions for which an owner or operator can fail to meet

the allowance holding requirement for a given control period:

Each ton of excess emissions of a SO

2

of emitted by a CAIR SO

2

unit

source in excess of tonnage authorization of CAIR SO2 allowances held

by the owner or operator for each CAIR SO2 unit in its CAIR SO2

Allowance System Tracking account for each day of a control period

starting in 2010 the applicable control period, will constitute a separate

violation of the this Subpart C, the Clean Air Act, and the Act.”

iii.

In subsection (d)(3), USEPA commented that the section is not correctly

referenced and is not limited to monitoring. The word “monitoring” need

to be deleted in the first sentence and the cross reference corrected.

Each CAIR SO

2

unit will be subject to the monitoring requirements of

subsection (d)(1) (c)(1) of this Section …

iv.

In subsection (d)(8), USEPA commented that the language was different

from that contained in Section 225.410:

Upon recordation by USEPA pursuant to 40 CFR 96, subpart FFF or

GGG, every allocation, transfer, or deduction of a CAIR SO

2

allowance to

or from a CAIR SO

2

source's compliance account, as defined by 40 CFR

96.202, is deemed to amend automatically……

c.

In Section 225.410 Compliance Requirements:

i.

In subsection (d)(1), USEPA commented that the word “midnight” had

been left out of the transfer deadline phrase

By the allowance transfer deadline,

midnight of March 1, 2010, and by

midnight of

March 1 of each subsequent year, ….

ii.

In subsection (d)(2), USEPA commented that it is only excess emissions

in whole tons not fractions for which an owner or operator can fail to meet

the allowance holding requirement for a given control period:

Each ton of

excess emissions of a CAIR NO

x

source for each day in a

control period, starting in 2009, NO

x

emitted in excess of the number of

CAIR NO

x

allowances held by the owner or operator for each CAIR NO

x

unit in its CAIR NO

x

compliance account for each day of the applicable

control period will constitute a separate violation of this Subpart D, the

Act, and the CAA.

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Electronic Filing, Received, Clerk's Office, June 25, 2007

---

iii.

In subsection (d)(3), USEPA commented that the section is not correctly

referenced and is not limited to monitoring. The word “monitoring” need

to be deleted in the first sentence and the cross reference corrected.

Each CAIR NO

x

unit will be subject to the monitoring requirements of

subsection (d)(1) (c)(1) of this Section …

d.

In Sections 225.440 and 225.540 Annual Allocations, USEPA commented that

Sections 225.440 and 225.540 refers to units’ “total converted gross electrical

output” but the term is used in Sections 225.435 and 225.535 only for combustion

turbines that cogenerate. The Illinois EPA intends that allowances be allocated to

both electrical generating unit that do not cogenerate, as well as units that do

cogenerate, hence, it proposes the following clarifications:

i.

Section 225.440 Annual Allocations

a)

For the 2009 control period, and each control period thereafter, the

Agency will allocate, to all CAIR NO

x

units in Illinois for which

the Agency has calculated the converted gross electrical output

pursuant to Section 225.435(a), (b), or (c) or the total converted

gross electrical output pursuant to Section 225.435(d), as

applicable, a total amount …...

b)

The Agency will allocate CAIR NO

x

allowances to each CAIR

NO

x

unit on a pro-rata basis using the unit's converted gross

electrical output pursuant to Section 225.435(a), (b), or (c), or total

converted gross electrical output pursuant to Section 225.435(d), as

applicable……

ii.

Section 225.540 Ozone Season Allocations

a)

For the 2009 control period, and each control period thereafter, the

Agency will allocate, to all CAIR NO

x

Ozone Season units in

Illinois for which the Agency has calculated

the converted gross

electrical output pursuant to Section 225.535(a), (b), or (c), or the

total converted gross electrical output pursuant to Section

225.435(d),

as applicable, a total amount of CAIR NO

x

….

b)

The Agency will allocate CAIR NO

x

Ozone Season allowances to

each CAIR NO

x

Ozone Season unit on a pro-rata basis using the

unit's converted gross electrical output pursuant to Section

225.535(a), (b), or (c), or total converted gross electrical output

pursuant to Section 225.435(d), as applicable…..

e.

In Sections 225.445 New Unit Set-Aside (NUSA):

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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i.

The introductory paragraph is not consistent with Section 225.430(c):

…… do not yet have an allocation for the particular control period or any

preceding control period pursuant to Section 225.440…

ii.

Subsection (d)(4) refers to units’ “total converted gross electrical output”

but term as it is used in subsections (d)(1) and (d)(2) only for combustion

turbines that cogenerate. The Illinois EPA intends that both new

noncogenerating and cogenerating units receive allocations; hence, it

proposes the following clarifications:

NTCGO

y

* (1.0

UA

y

=

lbs/MWh)

2000 lbs/ton

Where:

UA

y

= unprorated allocation to a new CAIR NO

x

unit.

NCGO

y

TCGO

y

= converted gross electrical oupt or total converted gross

electrical output, as applicable, for a new CAIR NO

x

unit.

f.

In Section 225.510 Compliance Requirements:

i.

In subsection (d)(1), USEPA commented that the word “midnight” had

been left out of the transfer deadline phrase

By the allowance transfer deadline, midnight of November 30, 2009, and

by midnight of November 30 of each subsequent year, ….

ii.

In subsection (d)(2), USEPA commented that only it is only excess

emissions in whole tons not fractions for which an owner or operator can

fail to meet the allowance holding requirement for a given control period:

Each ton of

excess emissions of a CAIR NO

x

Ozone Season source for

each day in a control period, starting in 2009, NO

x

emitted in excess of the

number of CAIR NO

x

allowances held by the owner or operator for each

CAIR NO

x

unit in its CAIR NO

x

compliance account for each day of the

applicable control period will constitute a separate violation of this

Subpart D, the Act, and the CAA.

iii.

In subsection (d)(3), USEPA commented that the section is not correctly

referenced and is not limited to monitoring. The word “monitoring” need

to be deleted in the first sentence and the cross reference corrected.

Each CAIR NO

x

Ozone Season unit will be subject to the monitoring

requirements of subsection

(d)(1) (c)(1) of this Section …

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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iv.

In subsection (e)(1)(D), “CAIR NO

x

Ozone Season permit application”

should read “CAIR permit application”:

Copies of all documents used to complete a CAIR NO

x

Ozone Season

permit application …..

g.

In Section 225.545 New Unit Set-Aside (NUSA):

i.

The introductory paragraph is not consistent with Section 225.530(c):

…… do not yet have an allocation for the particular control period or any

preceding control period pursuant to Section 225.540…

ii.

Subsection (d)(4) refers to units’ “total converted gross electrical output”

but term as it is used in subsections (d)(1) and (d)(2) only for combustion

turbines that cogenerate. The Illinois EPA intends that both new

noncogenerating and cogenerating units receive allocations; hence, it

proposes the following clarifications:

NTCGO

y

* (1.0

UA

y

=

lbs/MWh)

2000 lbs/ton

Where:

UA

y

=

unprorated allocation to a new CAIR NO

x

Ozone Season

unit.

NCGO

y

TCGO

y

= converted gross electrical oupt or total converted gross

electrical output, as applicable, for a new CAIR NO

x

Oaone

Season unit.

h.

USEPA pointed out several places in the proposal where the dates are inconsistent

with the federal CAIR requirements:

i.

In Sections 225.420(a)(4) and (a)(5) Permit Requirements, the date for a

designated representative to submit a CAIR permit application for an

existing unit will be passed before the CAIR rule has been fully approved

by USEPA. The Illinois EPA expects that the CAIR rule will fully

adopted and approved by September 2007 and believes that it is

reasonable to require a permit application to be submitted within 90 days

of USEPA’s full approval.

(a)(4)For all CAIR NO

x

units that commenced operation before December

31, 2007July 1, 2007, the owner or operator of the unit must submit a

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Electronic Filing, Received, Clerk's Office, June 25, 2007

---

CAIR permit application meeting the requirements of this Section on or

before December 31, 2007July 1, 2007.

(a)(5) For all CAIR NO

x

units that commence operation on or after

December 31July 1, 2007, the

ii.

In Section 225.430(a) Timing for Annual Allocations, the date for

submitting the initial allocations was April 30, 2007, the rule states July

31, 2007, and it is likely that the rule will not be fully adopted before

September 2007. USEPA will be making allocations by September 30,

2007. Hence, the July 31, 2007, date should be changed to “on or before

September 25, 2007.”

On or before September 25, 2007,No later than July 31, 2007, the Agency

will submit to USEPA the CAIR NO

x

allowance allocations, in

accordance with Sections 225.435 and 225.440, for the 2009, 2010, and

2011 control periods.

iii.

In Section 225.435(a) Methodology for Calculating Annual Allocations,

the proposal requires that on or before June 1, 2007, owners or operators

to choose between gross electrical ouput data or heat input data for the

initial control periods 2009, 2010, and 2011. While many owners and

operators submitted data prior to this date, the rule still needs to contain an

enforceable date, e.g. September 15, 2007.

For control periods 2009, 2010, and 2011, the owner or operator of the

unit must submit in writing to the Agency, by September 15, 2007June 1,

2007, a statement that either ….

iv.

In Section 225.450(c)(1) Monitoring, Recordkeeping and Reporting

Requirements for Gross Electrical Output and Useful Energy requires

owner or operator electing to use gross electrical output data for the initial

allocations to submit data by June 1, 2007. While many owners and

operators submitted data prior to this date, rule still needs to contain an

enforceable date, e.g. September 15, 2007.

By September 15, 2007June 1, 2007, the gross electrical output for control

periods 2001, 2002, 2003, 2004 and 2005, if available, and the unit's

useful thermal energy data….

v.

In Section 225.520(a)(4) Permit Requirements, the date for a designated

representative to submit a CAIR permit application for an existing unit

will be passed before the CAIR rule has been fully approved by USEPA.

The Illinois EPA expects that the CAIR rule will fully adopted and

approved by September 2007 and believes that it is reasonable to require a

24

Electronic Filing, Received, Clerk's Office, June 25, 2007

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permit application to be submitted within 90 days of USEPA’s full

approval.

For all CAIR NO

x

Ozone Season units that commenced operation before

December 31, 2007July 1, 2007, the owner or operator of the unit must

submit a CAIR permit application meeting the requirements of this

Section on or before December 31, 2007July 1, 2007.

vi.

In Section 225.530(a) Timing for Annual Allocations, the date for

submitting the initial allocations was April 30, 2007, the rule states July

31, 2007, and it is likely that the rule will not be fully adopted before

September 2007. USEPA will be making allocations by September 30,

2007. Hence, the July 31, 2007 date should be changed to “on or before

September 25, 2007.”

On or before September 25, 2007,No later than July 31, 2007, the Agency

will submit to USEPA the CAIR NO

x

allowance allocations, in

accordance with Sections 225.535 and 225.440, for the 2009, 2010, and

2011 control periods.

vii.

In Section 225.535(a) Methodology for Calculating Annual Allocations,

the proposal requires that on or before June 1, 2007, owners or operators

to choose between gross electrical ouput data or heat input data for the

initial control periods 2009, 2010, and 2011. While many owners and

operators submitted data prior to this date, rule still needs to contain an

enforceable date, e.g. September 15, 2007.

For control periods 2009, 2010, and 2011, the owner or operator of the

unit must submit in writing to the Agency, by September 15, 2007June 1,

2007, a statement that either ….

viii.

In Section 225.550(c)(1) Monitoring, Recordkeeping and Reporting

Requirements for Gross Electrical Output and Useful Energy requires

owner or operator electing to use gross electrical output data for the initial

allocations to submit data by June 1, 2007. While many owners and

operators submitted data prior to this date, the rule still needs to contain an

enforceable date, e.g. September 15, 2007.

By

September 15, 2007June 1, 2007, the gross electrical output for control

periods 2001, 2002, 2003, 2004 and 2005, if available, and the unit's

useful thermal energy data….

i.

USEPA indicated that the designated representative is required under the federal

CAIR to submit the CAIR permit. The CAIR permit will still be issued to the

owner or operator of the CAIR source. This is similar to how the Illinois EPA

addresses the permit application requirements for the federal Acid Rain program.

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Electronic Filing, Received, Clerk's Office, June 25, 2007

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i.

Section 225.310(b) Compliance Requirements

b)1)

The

designated representative owner or operator of each source

with one or more CAIR SO

2

units at the source must apply for a

permit issued by the Agency with federally enforceable conditions

…..

ii.

Section 225.410(b) Compliance Requirements

b)1)

The designated representative owner or operator of each source

with one or more CAIR NO

x

units at the source must apply for a

permit issued by the Agency with federally enforceable conditions

…..

iii.

Section 225.510(b) Compliance Requirements

b)1)

The designated representative owner or operator of each source

with one or more CAIR NO

x

Ozone Season units at the source

must apply for a permit issued by the Agency with federally

enforceable conditions …..

h.

Section 225.320(a)(3), 225.420(a)(3), and 225.520(a)(3), the provisions conflict

with 40 CFR 96.151(a), 96.251(a), and 96.351(a); hence, the phrase “and no

CAIR xxx compliance account may be established for a CAIR xxx source…”

should be deleted:

Section 225.320(a)(3):

No CAIR permit may be issued and no CAIR SO

2

Allowance System

Tracking account may be established for the CAIR SO

2

source, until the

Agency and USEPA have received a complete certificate….

Section 225.420(a)(3):

No CAIR permit may be issued, and no CAIR NO

x

compliance account

may be established for a CAIR NO

x

source, until the Agency and USEPA

have received a complete certificate of representation…..

Section 225.520(a)(3):

No CAIR permit may be issued, and no CAIR NO

x

Ozone Season

compliance account may be established for a CAIR NO

x

Ozone Season,

until the Agency and USEPA have received a complete certificate …

26

Electronic Filing, Received, Clerk's Office, June 25, 2007

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3.

The Illinois EPA in reviewing the first notice as published in the

Illinois Register

and the

regulatory proposal, and the motions to amend that have been submitted noticed the

following discrepancies is proposing the following revisions:

a.

There is a typographical error in Section 225.325(b)(2), “0.5 ton of” should be

“0.50 ton of:”

For one CAIR SO

2

allowance allocated for a control period in 2010 through 2014,

0.50

ton of SO

2

, except……

b.

There is a typographical error in Section 225.465(b)(4)(B). In the last dotpoint,

the word “ratio” is used and it should be the word “rate:”

• If the ER

q

is less than the lower limit, the lower limit shall be used.

• If ER

q

is greater than the upper limit, the upper limit shall be used.

• If ER

q

is not expressed in lb/MWh, the number must be converted to lb/MWh

using a heat rate ratio of 10 mmBtu/1 MW.

c.

The following amendments from its January 5, 2007 comment to Sections

225.465(b)(5)(B) and 225.565.(b)(5)(B) CASA Allowances were not included:

i.

5)A) For highly efficient power generation and clean coal technology

projects:

A)

For projects other than fluidized coal combustion pursuant to

Sections 225.460(a)(4)(B), (a)(4)(C) and (c)(2), the number of

allowances mustshall be calculated using the number of megawatt

hours MWh of electricity the project generates during a control

period and the following formula:

A

=

(MWh

g

)

×

(1.0 lb/MWh – ER lb/MWh) / 2000 lb

B)

For fluidized bed coal combustion projects pursuant to Section

225.460(c)(2), the number of allowances shall be calculated using

the number of gross MWh of electricity the project generates

during a control period and the following formula:

A

=

(MWh

g

)

×

(1.4 lb/MWh – ER lb/MWh) / 2000 lb

Where:

A

=

The number of allowances for a particular project.

MWh

g

=

The number of gross MWh of

electricity generated during a control period by a

27

Electronic Filing, Received, Clerk's Office, June 25, 2007

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project.

ER

=

Average NO

x

emission rate for the control period

based on CEMS data in 1b/MWh.

ii.

5)A) For highly efficient power generation and clean coal technology

projects:

A)

For projects other than fluidized coal combustion pursuant to

Sections 225.560(a)(4)(B), (a)(4)(C)

and (c)(2), the number of

allowances must be calculated using the number of megawatt

hours MWh of electricity the project generates during a control

period and the following formula:

A

=

(MWh

g

)

×

(1.0 lb/MWh – ER lb/MWh) / 2000 lb

B)

For fluidized bed coal combustion projects pursuant to Section

225.560(c)(2), the number of allowances shall be calculated using

the number of gross MWh of electricity the project generates

during a control period and the following formula:

A

=

(MWh

g

)

×

(1.4 lb/MWh – ER lb/MWh) / 2000 lb

Where:

A

=

The number of allowances for a particular project.

MWh

g

=

The number of gross MWh of

electricity generated during a control period by a

project.

ER

=

Average NO

x

emission rate for the control period

based on CEMS data in 1b/MWh.

d.

In Section 225.325(a) Trading Program, there is a typographical error. 40 CFR

96.220 should be 40 CFR 96.202:

The CAIR SO

2

Trading Program is administered by USEPA. CAIR SO

2

allowances are issued as described by the definition for allocate in 40 CFR

96.20296.220, as incorporated by reference in ……

e.

In Sections 225.435(b)(2) and 225.535(b)(2) Methodology for Calculating Annual

Allocations, there is a typographical error:

Heat input: The average of the unit's two most recent years of control period heat

inputs

; otherwise the unit's most recent control period's heat input, e.g., for the

2012 …

28

Electronic Filing, Received, Clerk's Office, June 25, 2007

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f.

In Section 225.450(a) Monitoring, Recordkeeping and Reporting Requirements

for Gross Electrical Output and Useful Thermal Energy several words were

omitted from the Illinois EPA January 5, 2007, comment:

By January 1, 2008, or by the date of commencing commercial operation,

whichever is later, the owner or operator of the CAIR NO

x

unit must operate a

system for measuring gross electrical output that is consistent with the

requirements of either 40 CFR 60 or 75; must measure gross electrical output in

MWh using such a system

at all times;

g.

Section 225.460 Energy Efficiency and Conservation, Renewable Energy, and

Clean Technology Projects:

i.

In subsection (c)(2)(B) several words were omitted from the Illinois EPA

January 5, 2007, comment:

Fluidized bed coal combustion

that commenced operation prior to

December 31, 2006.

ii.

In subsection (e):

…… The application must designate which category or categories from

those listed in subsections (a)(1) through (c)(2)(B) (c)(2)(A) of this

Section best fit the proposed project and the applicable formula pursuant

to Section 225.465(b) to calculate the number of allowances that it is

requesting. The Agency will 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 subsections (a) through (c)(2)(B) (c)(2)(A) of this Section.

h.

In Section 225.475(b)(3) Agency Action on Clean Air Set-Aside (CASA)

Applications a hyphen needs to be added between “pro” and rata.”

If any allowances remain after the allocation of allowances pursuant to subsection

(b)(2) of this Section, the Agency will then distribute pro-rata

the remaining

allowances to project categories that have fewer than twice the number of

allowances assigned to that project category. The pro-rata

…

i.

In Section 225.520((a)(2) Permit Requirements there is an “or” where there

should be an “and”

Each CAIR permit will be issued pursuant to Section 39 and or 39.5 of the Act

and will contain federally enforceable conditions addressing all applicable CAIR

NO

x

Ozone Season Trading Program requirements and will be a complete and

segregable portion of the source's entire permit pursuant to subsection (a)(1) of

29

Electronic Filing, Received, Clerk's Office, June 25, 2007

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this Section.

j.

In Section 225.550 Monitoring, Recordkeeping and Reporting Requirements for

Gross Electrical Output and Useful Thermal Energy several words were omitted

from the Illinois EPA January 5, 2007, comment:

i.

In subsection (a):

By January 1, 2008, or by the date of commencing commercial operation,

whichever is later, the owner or operator of the CAIR NO

x

Ozone Season

unit must operate a system for measuring gross electrical output that is

consistent with the requirements of either 40 CFR 60 or 75; must measure

gross electrical output in MWh using such a system at all times;

ii.

In subsection (b) the date is retroactive:

For a CAIR NO

x

Ozone Season unit that is a cogeneration unit, by January

1, 20082007, or by the date the CAIR NO

x

Ozone Season unit commences

to produce useful thermal energy, whichever is later……

iii.

In subsection (e)(1) the cross-reference is incorrect:

(e)(1).. A description of the system to be used for the measurement of

gross electrical output pursuant to Section 225.550(a) 225.450(a),

including a list of any data logging devices, solid-state kW meters,

rotating kW meters, electromechanical kW meters

k.

Section 225.560 Energy Efficiency and Conservation, Renewable Energy, and

Clean Technology Projects::

In subsection (c)(2)(B) several words were omitted from the Illinois EPA January

5, 2007, comment:

Fluidized bed coal combustion

that commenced operation prior to December 31,

2006.

l.

In Section 225.575(b)(3) Agency Action on Clean Air Set-Aside (CASA)

Applications a hyphen needs to be added between “pro” and rata.”

If any allowances remain after the allocation of allowances pursuant to subsection

(b)(2) of this Section, the Agency will then distribute pro-rata

the remaining

allowances to project categories that have fewer than twice the number of

allowances assigned to that project category…

30

Electronic Filing, Received, Clerk's Office, June 25, 2007

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m.

In Sections 225.305(b)(1), (b)(3), & (b)(4), 225.405(b)(1), (b)(3), & (b)(4), and

225.505(b)(1), (b)(3), & (b)(4) the phrase “would otherwise be classified as” was

omitted from:

Any unit that would otherwise be classified as is a CAIR…..

n.

In Section 225.530(b) the dates were inconsistent:

By

JulyOctober31, 2008, and July 31 of each year thereafter, the Agency will

submit to USEPA the CAIR NO

x

Ozone Season allowance allocations in

accordance with Sections 225.535 and 225.540, for the control period four years

after the year of the applicable deadline for submission pursuant to this Section.

For example, on July 31, 2008,

4.

In reviewing the changes made to accommodate the Mercury rulemaking and adding new

Subpart F, the Illinois EPA would request the following changes:

a.

The following abbreviations are used in the CAIR proposal, Subparts C, D, E, and

F and should be added to Section 225.120 Abbreviations and Acronyms:

Act

Environmental Protection Act [415 ILCS 5]

ACI

activated carbon injection

Agency

Illinois Environmental Protection Agency

Btu

British thermal unit

CAA

Clean Air Act [42 USC 7401 et seq.]

CAIR

Clean Air Interstate Rule

CAAPP

Clean Air Act Permit Program

CASA

Clean Air Set-Aside

CEMS

continuous emission monitoring system

CO

2

carbon dioxide

CPS

Combined Pollutant Standards

CGO

converted gross electrical output

CUTE

converted useful thermal energy

EGU

electric generating unit

ESP

electrostatic precipitator

FGD

flue gas desulfurization

GO

gross electrical output

GWh

gigawatt hour

HI

heat input

hr

hour

kg

kilogram

lb

pound

MPS

Multi-Pollutant Standard

MW

megawatt

MWe

megawatt electrical

MWh

megawatt hour

31

Electronic Filing, Received, Clerk's Office, June 25, 2007

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