BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN
THE MATTER OF:
PROPOSED NEW CLEAN AIR
INTERSTATE RULES (CAlR)
S02' NOxANNUAL AND NOx
OZONE SEASON TRADING
PROGRAMS, 35 ILL. ADM. CODE 225,
SUBPARTS A, C, D, E
and F
)
)
)
)
)
)
)
)
R06-26
(Rulemaking - Air)
NOTICE OF FILING
To:
Dorothy Gunn, Clerk
Illinois Pollution Control Board
James
R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
Persons included on the
ATTACHED SERVICE LIST
PLEASE TAKE NOTICE that we have today filed with the Office of the Clerk of the
Pollution Control Board the MOTION
FOR ADDITIONAL HEARING BY MIDWEST
GENERATION, LLC, a copy of which is herewith served upon you.
lsi
Karl A. Karg
Karl
A. Karg
Dated: July 30, 2007
Karg
A. Karg
Cary
R. Perlman
Andrea M. Hogan
LATHAM
&
WATKINS LLP
Sears Tower, Suite 5800
233 South Wacker Drive
Chicago, IL 60606
Telephone: (312) 876-7691
Fax: (312) 993-9767
karl.karg@lw.com
Electronic Filing, Received, Clerk's Office, July 30, 2007
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN
THE MATTER OF:
PROPOSED NEW CLEAN AIR
INTERSTATE RULES (CAIR)
S02' NOxANNUAL AND NOx
OZONE SEASON TRADING
PROGRAMS, 35 ILL. ADM. CODE 225,
SUBPARTS A, C, D, E
and F
)
)
)
)
)
)
)
)
R06-26
(Rulemaking - Air)
MOTION FOR ADDITIONAL HEARING
NOW COMES Participant MIDWEST GENERATION, LLC, ("MWGen") pursuant to
35 Ill. Adm. Code § 102.412(b) to request an additional hearing on Section 225.615(g)(4),
proposed in the above-captioned proposed rule
as
published for first notice in 31 Ill. Reg. 6769
(May 11, 2007).
In
support of its Motion, MWGen states
as
follows:
1.
MWGen moves for a single, additional hearing on the issue raised in MWGen's
Comment on First Notice, filed on June 25, 2007. Specifically, MWGen proposes an additional
hearing on the formula for sorbent injection
as set forth at Section 225.615(g)(4) of the proposed
rule.
2.
As discussed in MWGen'sComment, unless the text of Section 225.615(g)(4) is
amended
to allow for the reduction of sorbent injection in response to the percentage of air in-
leakage present in MWGen'sstack flow, MWGen - and potentially other sources with the same
issue - will needlessly apply large quantities
of additional sorbent in response to clean air
leaking into the stack flow.
3.
MWGen believes that an additional hearing on this issue may also benefit the application
of CAMR because other sources may also have the same issue when applying sorbent under the
MPS.
See
CAMR at 35 lAC 225.233(c)(2)(D).
1
Electronic Filing, Received, Clerk's Office, July 30, 2007
4.
MWGen calculates that its air in-leakage rate of 10 to 15 percent will result in increased
sorbent costs
of approximately $3 million per year.
In
other words, without relief on this issue,
MWGen will waste
$3 million per year to inject sorbent in response to air in-leakage of clean,
unpolluted air.
5.
MWGen'sevaluation of the sorbent market suggests that sorbent supplies are limited,
very expensive, and will become more costly and scarce as CAMR and the CPS rule take effect.
The issue
of sorbent scarcity and waste applies to all sources required to inject sorbent under
CAMR or CAIR. As such, all parties have an interest eliminating wasteful application
of sorbent
to help ensure an adequate, economical supply
of this substance.
6.
Even more important to the overall goals ofCAMR and the CPS rule, ifMWGen is
allowed
to account for the air in-leakage in the stack flow and thereby reduce sorbent injection
accordingly, MWGen will
still be able to comply
with the limits for Mercury emissions set forth
in the CPS.
7.
MWGen identified the air in-leakage issue in an internal company meeting on
April 2, 2007, then promptly contacted the Illinois Environmental Protection Agency ("Agency")
and arranged a conference call on this issue for April 6, 2007.
8.
At the April 6, 2007 conference, MWGen raised the issue of flow measurement under the
proposed rule with the Agency. The Agency advised MWGen
to submit a letter of determination
explaining how MWGen would propose calculating flow
at the injection point and the reasons
for doing so.
9.
First notice for the proposed rule was published on May 11, 2007, and the Order provided
a
45 day period for submissions of written comments.
See
31 Ill. Reg. 6789.
2
Electronic Filing, Received, Clerk's Office, July 30, 2007
10.
Pursuant to the Agency's guidance, MWGen developed a proposed calculation
methodology for measuring air in-leakage and sent a letter
to the Agency memorializing this
proposal on June 14,2007.
11.
On June 19,2007, counsel for the Agency advised that a determination letter was not the
appropriate method
of approving MWGen'sproposed alternate flow methodology.
12.
On
June 21, 2007, MWGen met with the Agency and received input for the changes
MWGen proposed to the formula in its comments. At the same time, MWGen circulated a
proposed Joint Comment
to the Agency which advocated the change to the formula discussed
between the Agency and MWGen.
13.
On June 25, 2007, the last day to submit written comments, the Agency indicated it could
not join in MWGen's comment, and MWGen was left to raise the issue alone, which it did in its
First Notice Comments
of June 25,2007.
14.
This motion is brought under 35 Ill. Adm. Code §102.412(b), which provides:
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 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 oftms Part, is necessary.
(Emphasis supplied).
15.
MWGen will be materially prejudiced if the Board fails to hold an additional hearing on
the issues raised in this Motion. As written, the current formula forces MWGen to increase the
amount
of sorbent it injects into its stacks to account for air-in leakage. Such leakage, however,
presents no threat to environmental quality since the air in question is clean, not polluted. The
proposed rule thus requires MWGen
to waste millions of dollars on unnecessary sorbent without
cognizable benefit to the environment. To the extent the rule as drafted mandates an inflated
3
Electronic Filing, Received, Clerk's Office, July 30, 2007
level of industry-wide demand for sorbent, it will lead to scarcity in the sorbent market, thereby
increasing sorbent prices and exacerbating this problem.
16.
The procedural history shows that MWGen exercised the due diligence required by 35 Ill.
Adm. Code §102.412(b). MWGen contacted the Agency and shared its concerns about the
proposed rule four days after identifying the issue and five weeks before the First Notice was
published. The timing
of MWGen's actions demonstrates a proactive approach to the issue.
17.
MWGen subsequently followed the guidance provided by Agency staff in developing an
alternative formula and in submitting a letter determination request to the Agency. MWGen
worked with the Agency in a collaborative fashion and adopted the Agency'srecommended
approach after reasonably relying upon the Agency's direction. MWGen was thus surprised
when later told by higher Agency authority that it could not address this issue through a letter
ruling. This sequence
of events is relevant when considering the Agency'sincorrect assertion
that MWGen'sproposed amendment to the Rule was a "last-minute modification."
See
Comments of the Illinois Environmental Protection Agency
On
First Notice (June 25, 2007) at 7.
The proposed modification was presented in MWGen'sComment because of the unexpected
change
in
the Agency'sdirection to MWGen after over 10 weeks
of work on the issue.
18.
Failing a letter ruling, MWGen hoped to have the Agency join it in its Comments to the
proposed Rule. The Agency, however, did not have adequate opportunity to review the
implications
of MWGen's proposed amendment partly because of the expedited schedule under
which this rulemaking proceeded.
See
Comments of the Illinois Environmental Protection
Agency
On
First Notice (June 25, 2007) at 7. This combination of events - MWGen being
unexpectedly told it could not pursue a letter ruling, combined with the expedited time frame
which hampered the Agency - meant that this issue became ripe concurrent with the end
of the
4
Electronic Filing, Received, Clerk's Office, July 30, 2007
comment period.
In
practical terms, the expiration of the comment period left MWGen without a
forum in which to raise its concerns about the sorbent injection issue.
19.
This issue cannot adequately be addressed through written comments. Indeed, the
Agency itself states that it has not had an adequate opportunity to fully review the implications
of
MWGen's proposed change.
See
Comments of the Illinois Environmental Protection Agency On
First Notice (June
25,2007) at 7. Thus, despite the cost and environmental impact issues
outlined above, the Agency, by its own admission, lacks a full understanding ofthe Rule's
impact on regulated parties and alternatives which could serve the needs of both industry and the
environment.
In
practical terms, the complexity of the issue is such that the parties need a live,
interactive dialogue through which to consider the matter. Neither
MWGen nor the affected
agencies can fully understand each other'sposition on this matter through paper comments
alone.
20.
A single, additional hearing is all that is necessary to address
MWGen's concerns. The
hearing can
be strictly limited to the issue of air-in leakage and its relationship to sorbent
injection rates. Such a hearing will allow
MWGen to inform the Agency, the Illinois Pollution
Control Board and other affected parties about this significant issue.
21.
MWGen believes that this issue is straightforward and that the proposed changes it has
suggested do not
in
any way compromise or diminish the effectiveness of CAMR or CAIR.
MWGen believes that it has acted in good faith in raising this issue early and repeatedly with the
Agency, only to be left standing alone at the end
of the comment period. MWGen understands
the
Board's desire to move this rulemaking forward, but without an additional hearing on this
issue, MWGen will be materially prejudiced despite its due diligence. Moreover, MWGen
submits that all parties - the Board, the Agency, and the other participants - need a better
5
Electronic Filing, Received, Clerk's Office, July 30, 2007
understanding of this issue. MWGen's $3 million annual projected costs for wasted sorbent are
significant. Other sources may also have to waste resources because of this issue. Sorbent
supplies are already tight and costs are projected to increase. To the extent "waste" can be
eliminated, sorbent prices can be minimized. To the extent a hearing on this issue will inform all
parties and result in a solution, a costly and wasteful situation can be avoided while preserving
the environmental effectiveness
of the underlying rules.
WHEREFORE, for the reasons stated above, MWGen moves that the Hearing Officer to
grant a single, additional hearing
on this matter.
Dated: July 30, 2007
Respectfully submitted,
MIDWEST GENERATION, LLC
By: /s/ Karl
A. Karg
One
of its Attorneys
Karl
A.
Karg
Cary
R.
Perlman
Andrea Hogan
Attorneys for Petitioners
Latham
&
Watkins, LLP
233 South Wacker Drive
5800 Sears Tower
Chicago, Illinois 60606
6
Electronic Filing, Received, Clerk's Office, July 30, 2007
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
PROPOSED NEW CLEAN AIR
INTERSTATE RULES (CAlR)
S02' NO
x
ANNUAL AND NO
x
OZONE SEASON TRADING
PROGRAMS, 35 ILL. ADM. CODE 225,
SUBPARTS A, C, D, E
and F
)
)
)
)
)
)
)
)
R06-26
(Rulemaking - Air)
AFFIDAVIT OF ANDREA CRAPISI
I, Andrea Crapisi, upon my oath, hereby state as follows:
1. I am employed by Midwest Generation LLC as an environmental engineer within
Midwest Generation
LLC's Environmental Services Division.
2. I have personal knowledge
of the facts averred in paragraphs 7-8 and 10-13 in the
attached Motion for Additional Hearing which detail the communications between
Midwest Generation LLC and the Illinois Environmental Protection Agency regarding air
in-leakage.
3. To the best of my knowledge, the factual information and representations contained in
paragraphs 7-8 and 10-13
of Midwest Generation's Motion for Additional Hearing are
true and correct.
FURTHER AFFIANT SAYETH NOT.
.
~
Andrea Crapisi
&apiM'
Subscribed and sworn to
befor~
this 30th day of July 2007.
\
Electronic Filing, Received, Clerk's Office, July 30, 2007
CERTIFICATE OF SERVICE
I, the undersigned, certify that on this 30th day of July, 2007, I have served electronically
the attached MOTION
FOR ADDITIONAL HEARING BY MIDWEST GENERATION, LLC
upon the following person:
Dorothy Gunn, Clerk
Illinois Pollution Control Board
James
R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
and
by first-class mail with postage thereon fully prepaid and affixed to the persons listed on the
ATTACHED SERVICE LIST.
lsi
Karl A. Karg
Karl A. Karg
KargA. Karg
LATHAM
&
WATKINS LLP
Sears Tower, Suite 5800
233 South Wacker Drive
Chicago, IL 60606
Telephone: (312) 876-7691
Fax: (312) 993-9767
karl.karg@lw.com
Electronic Filing, Received, Clerk's Office, July 30, 2007
Richard R. McGill Jr.
Hearing Office
Illinois Pollution Control Board
James
R. Thompson Center
100
W. Randolph
Suite 11-500
Chicago, Illinois 60601
Matthew
J. Dunn, Division Chief
Office of the Illinois Attorney General
Environmental Bureau
188 West Randolph, 20
th
Floor
Chicago, Illinois 60601
David Rieser
James T. Harrington
Jeremy
R. Hojnicki
McGuire Woods LLP
77 West Wacker, Suite 4100
Chicago, Illinois 60601
Katherine
D. Hodge
N. LaDonna Drive
HODGE DWYER ZEMAN
3150 Roland Avenue, P.O. Box 5776
Springfield, Illinois 62705-5776
Faith E. Bugel
Environmental Law and Policy Center
35 East Wacker Drive, Suite 1300
Chicago, Illinois 60601
SERVICE LIST
(R06-26)
Rachel Doctors, Assistant Counsel
John
J. Kim, Managing Attorney
Air Regulatory Unit
Division
of Legal Counsel
Illinois Environmental Protection Agency
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
Virginia Yang, Deputy Legal Counsel
Illinois Department
ofNatural Resources
One Natural Resources
Way
Springfield, Illinois 62702-1271
Sheldon
A.
Zabel
Kathleen
C. Bassi
Stephen J. Bonebrake
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
William
A.
Murray
City
of Springfield, Office of Public Utilities
800 East Momoe, 4
th
Floor, Municipal Building
Springfield, Illinois 62757-0001
Keith
1. Harley
Chicago Legal Clinic, Inc.
205 West Momoe Street, 4
th
Floor
Chicago, Illinois 60606
Electronic Filing, Received, Clerk's Office, July 30, 2007
SERVICE
LIST
(R06-26)
S.
David
Farris
Manager,
Environmental,
Health
and
Safety
City
Water
Light
&
Power
201
East
Lake
Shore
Drive
Springfield,Illinois
62757
BlUce
Nilles
Sierra
Club
122
West
Washington
Avenue,
Suite
830
Madison,
Wisconsin
53703
Bill
S.
Forcade
Katherine
M.
Rahill
Jenner
&
Block
LLP
One
IBM
Plaza
Chicago,
Illinois
60611
Sasha
M.
Reyes
Steven
K.
Murawski
Baker
&
McKenzie
One
PlUdential
Plaza,
Suite
3500
130
East
Randolph
Drive
Chicago,
IL
60601
Daniel
D.
McDevitt
General
Counsel
Midwest
Generation,
LLC
440
South
LaSalle
Street,
Suite
3500
Chicago,
Illinois
60605
James
H.
Russell
Winston
&
Strawn
LLP
35
W.
Wacker
Drive,
40
th
Floor
Chicago,
Illinois
60601
Electronic Filing, Received, Clerk's Office, July 30, 2007
