Electronic Filing, Received, Clerk's Office, August 21, 2007
Electronic Filing, Received, Clerk's Office, August 21, 2007
Electronic Filing, Received, Clerk's Office, August 21, 2007

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

PROPOSED EXTENSION OF ADJUSTED STANDARD )

APPLICABLE TO ILLINOIS-AMERICAN

)

WATER COMPANY'S ALTON PUBLIC WATER

)

SUPPLY FACILITY DISCHARGE

)

TO THE MISSISSIPPI

RNER

)

NOTICE OF FILING

AS 2007-2

(Adjusted Standard)

John Therriault, Assistant

Clerk

Illinois Pollution Control Board

James

Thompson Center

100 West Randolph Street, Suite 11-500

Chicago, Illinois 6060 I

William Richardson, ChiefLegal Counsel

Illinois Department

ofNatural

Resources

OneNatural Resource Way

Springfield, Illinois 62702

Matthew 1. Dunn

DivisionChief, Environmental Enforcement

Illinois Attorney General

100 West Randolph Street, 12'" Floor

Chicago, Illinois 6060 I

Sanjay Sofat

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

Carol Webb

Hearing Officer

Illinois Pollution Control Board

1021 North Grand Avenue East

P.O. Box 19274

Springfield, Illinois 62794-9274

PLEASE TAKE NOTICE that on August 21, 2007, the PETITIONER ILLINOIS-AMERICAN

WATER COMPANY'S WRITTEN ANSWERS TO THE BOARD'S QUESTIONS FOR IAWC

AND IEPA PERT AINING TO THE AMENDED PETITION AS 2007-2 was filed with the

Clerk

of the Pollution Control Board. A copy is herewith served upon you.

Respectfully submitted,

By:

TERCOMPANY

Bradley S. liles, #03128879

Blackwell

nders LLP

720 Olive St., 24th Floor

St. Louis, MO 63101

Telephone: (314) 345-6000

Facsimile: (314) 345-6060

An Attorney for Petitioner

STLDO ].1343903-4

Electronic Filing, Received, Clerk's Office, August 21, 2007

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

)

PROPOSED EXTENSION OF ADJUSTED STANDARD

)

APPLICABLE TO ILLINOIS-AMERICAN

)

WATER COMPANY'S ALTON PUBLIC WATER

)

SUPPLY FACILITY DISCHARGE

)

TO THE MISSISSIPPI

RNER

)

AS 2007-2

(Adjusted Standard)

PETITIONER ILLINOIS-AMERICAN WATER COMPANY'S

WRITTEN ANSWERS TO THE BOARD'S QUESTIONS FOR IAWC AND IEPA

PERTAINING TO THE AMENDED PETITION AS 2007-2

Petitioner, Illinois-American Water Company ("Illinois-American Water"), by its

attorneys, Bradley S. Hiles and Alison M. Nelson, hereby submits written answers to the Illinois

Pollution Control Board'sQuestions For IAWC And !EPA Pertaining To The Amended Petition

AS 2007-2 To Be Addressed In Pre-Filed Testimony And/Or At Hearing On August 28, 2007.

For the convenience

of the Illinois Pollution Control Board (the "Board") and the parties to this

matter, each

ofthe Board'squestions is set forth in full before Illinois-American Water's

corresponding response.

For each

ofthe following responses, Illinois-American Water has identified the

individual or individuals who assisted in preparing the response. Each such individual will be

present at the Board'shearing on August 28, 2007 and will be available for cross-examination or

additional inquiry at that time.

QUESTIONS POSED TO ILLINOIS-AMERICAN WATER

The Hearing Officer Order entered in this case on August 6, 2007 (the "Hearing Officer

Order") poses four sets

of questions to Illinois-American Water. These questions concern

Illinois-American Water'smethod

of quantifying and verifying sediment reductions; the

potential new agreement between Illinois-American Water and Great Rivers Land Trust

-2-

("GRLT"); Illinois-American Water's estimate of funding for the proposed sediment reductions

and maintenance; and a potential rulemaking update to 35 Illinois Administrative Code 304.206.

Illinois-American Water's response to each question is set forth below.

Quantifying and Verifying Sediment Reductions

The Board'sfirst set of questions concerns Illinois-American Water's method of

quantifying and verifying sediment reductions.

How does IA

WC account for sediment reductions in its reporting to

IEPA?

Paul Keele, the Water Quality Supervisor for 1Ilinois-American Water's Alton, 1Ilinois

facility (the "Alton facility" or the "facility") reports that Illinois-American Water accounts for

sediment reductions in its reporting to the Illinois Environmental Protection Agency (the

"Agency" or "Illinois EPA") through GRLT, as required by the facility's NPDES Permit.

See

NPDES Permit No. IL0000299, Special Condition 14 (requiring Illinois-American Water

"through the GRLPA [Great Rivers Land Preservation Association]" to submit to the Agency

quarterly reports detailing the progress

of the Piasa Creek Watershed Project (the "Project"), and

to submit to the Agency annual reports detailing "the reductions achieved by implementation

the sediment reduction measures, describing the sediment load reductions achieved for each

measure or practice implemented"). In other words, Illinois-American Water itself does not

account for the sediment reductions achieved by the Project, and instead relies on GRLT to

determine the amount

of reductions achieved.

Alley Ringhausen, the Executive Director

of GRLT, explains that the method of

quantifying sediment reductions into the Piasa Creek is the Sediment Input Reduction Analysis

Method (SIRAM). SIRAM measures erosion and sediment trapped through the construction

sediment basins, stream buffers, retention and detention basis, and other best management

-3-

practices. SIRAM is not an official method of calculating soil savings, but rather is a shorthand

way

of indicating that the sediment calculations from various erosion control practices are added

together to produce the total soil savings for a project. The four major forms

of erosion (sheet

and rill, ephemeral, gully, and streambank) each have different methods

ofmeasurement, so

slightly different formulas and factors are used for each method

of erosion control. All

calculations have been and will continue to be based on United States Department

of Agriculture

(USDA) standards, including USLE (Universal Soil Loss Equation) and RUSLE (Revised

Universal Soil Loss Equation).

See

GRLT, Piasa Creek Watershed Project Implementation Plan

at 19 (March 2004) (attached to the Petition for Extension as Attachment A) (hereafter, the

"Implementation Plan" or the "Plan").

The U.S. Environmental Protection Agency's ("USEPA's") Water Quality Trading

Policy shows that RUSLE is a USEPA-approved method

of determining nutrient and sediment

load reductions.

See

USEPA, Office of Water, Water Quality Trading Policy at 9 (Jan. 13,2003)

(hereafter, the "Water Quality Trading Policy") (stating that "[n]umerous methods and

procedures to determine nutrient and sediment load reductions associated with conservation

practices on agricultural and forest land have been developed or used by the USDA agencies";

stating that "[s]ome

ofthese methods may be applied to water quality trading"; and stating

specifically that "the Revised Universal Soil Loss Equation (RUSLE) may be used in some

locations to estimate the sediment yield at the end

of a slope in agricultural settings").

See also

USEPA, Water Quality Trading Assessment Handbook: Can Water Quality Trading Advance

Your Watershed's Goals at 40 (2004) (hereafter, "Water Quality Trading Assessment

Handbook") ("Reductions for these control options [for which measuring the control option's

-4-

impact on pollution loading is either impractical or very costly] may be estimated based on

models, scientific tools, or performance data.").

According to Paul Keck, Illinois-Amelican Water performs periodic internal reviews to

ensure that the Alton facility and the Project are satisfying the required 2 to I offset. To

determine whether the offset requirement is satisfied, Paul Keck compares the sediment

reduction amount received from GRLT to the amount

of solids in the facility's effluent. The

amount

of solids in the facility's effluent is calculated by assuming that 100% of the Total

Suspended Solids (TSS) in the facility's influent would be discharged in the facility's effluent.

The amount

ofTSS in the facility's influent is calculated by multiplying the TSS concentration

in the facility's influent (determined by correlating turbidity data from samples collected

approximately three times each day) by the predicted daily flow rate for the facility. (This

formula is described in detail in the Affidavit

of Paul Keck, attached to the Amended Petition for

Extension as Attachment D.) The results

of these internal reviews are not routinely reported to

the Agency. However, Illinois-American Water is required to notify the Agency

of any

problems in implementation

of the Project or compliance with the terms of the Project, and

would therefore report any results that indicated that the facility was not satisfying the 2 to I

offset.

See

NPDES Permit No. IL0000299, Special Condition 17.

Does IA

rely entirely on the GRLT quarterly reports to the

Agency to quantify and verify its sediment reductions for compliance?

As noted above, Paul Keck reports that Illinois-American Water itself does not account

for the sediment reductions achieved by the Project, and instead relies on GRLT to determine the

amount

of reductions achieved. Illinois-American Water does not, however, rely on the GRLT

quarterly reports alone to verify sediment reductions. Paul Keck attends annual meetings with

GRLT and the Agency to discuss the progress

of the Project; tours the Project'ssites to observe

-5-

progress of the implementation of best management practices; and confers with Alley

Ringhausen to discuss the progress of various projects. Alley Ringhausen confirms that Illinois-

American Water does more than simply receive GRLT's quarterly reports, and that Illinois-

American Water has made numerous inquiries to GRLT in an effort to understand, at a

conceptual level, the nature

of the projects being implemented and the way soil savings are

calculated.

When IA

states it will maintain a soil savings with a 2 to 1 offset

or above 6,600 tons per year (Am. Pet. at 32), does IA

consider the

2 to 1 ratio as the uncertainty discount?

is the 2 to 1 ratio intended

to produce a

greater environmental benefit than compliance with the

effluent regulations alone?

Terry Gloriod, the President of American Water's Central Region, was involved in the

proceedings on Adjusted Standard 99-6. He believes that the 2 to I offset ratio was intended to

produce a greater environmental benefit than compliance with the effluent regulations alone.

The record from Adjusted Standard 99-6 does not discuss the method used to select the 2

to 1 ratio, so the parties' intent at the time that adjusted standard was adopted is not entirely

clear.

See

Final Brief of Illinois Environmental Protection Agency, AS 99-6 at 9 (June 22, 2000)

("It

should also be noted that the proposed adjusted standard goes beyond the proposed Federal

policy, which contemplates offsets of 1:1.5 instead of the 1:2 mandated in the proposed adjusted

standard.");

see also

Testimony of Thomas G. McSwiggin (attached to the Final BriefofIllinois

Enviromnental Protection Agency, at 2-3) (noting that under USEPA's August 1999 proposed

TMDL-related regulations, "major new or significantly expanding dischargers must obtain

offsets of 1:1.5 from existing point or non point sources," then noting that "the Agency

determined that an offset ratio of 1:2, instead of the federal ratio of 1:1.5, would be appropriate

for the Alton replacement plant").

-6-

the 2 to 1 ratio is intended to produce a greater environmental

benefit, would lA

please propose an uncertainty discount based

on USEPA's Water Quality Trading Assessment Handbook

(November 2004).

As this Board has observed,

USEPA's Water Quality Trading Assessment Handbook

states that "the relatively variable and unpredictable performance

of nonpoint source BMPs has

been handled by discounting the estimated reductions available for trade."

See

Hearing Officer

Order at I. Several other USEPA publications make clear, however, that

use of an uncertainty

discount to reduce uncertainty is not necessary in all cases. For instance,

USEPA's Water

Quality Trading Policy states that "EPA supports a number

of approaches to compensate for

nonpoint source uncertainty."

See

Water Quality Trading Policy at 9. These approaches include:

.. monitoring to verify load reductions;

e the use of greater than I: I trading ratios between nonpoint and point sources;

e using demonstrated performance values or conservative assumptions in estimating

the effectiveness

of nonpoint source management practices;

e using site- or trade-specific discount factors; and

e retiring a percentage of nonpoint source reductions for each transaction or a

predetermined number

of credits.

See id.

Use of an uncertainty discount

(i.e.,

a "greater than 1:1 trading ratio between nonpoint

and point sources") therefore is simply one

of many ways to reduce uncertainty in calculating

soil savings. Here, Alley Ringhausen acknowledges that GRLT has employed several

of these

means

of reducing uncertainty.

Alley Ringhausen reports that he uses site-specific discount factors. Rather than using

one

of the fixed discount ratios described in USEPA's Water Quality Trading Toolkit (for

instance, a "delivery ratio" or a "location ratio"), GRLT discounts all soil savings that would be

calculated as savings to sheet/rill erosion.

See

Water Quality Trading Toolkit at 30 (discussing

several fixed trade- and site-specific discount ratios). Many landowners in the Piasa Creek

Watershed with land on which projects have been installed by GRLT are also required to

-7-

develop farm management plans as a result of their participation in USDA programs that

encourage no-till fanning practices. These practices are not, however 100% effective at

controlling sediment loading to streams. In other words, even with these practices in place, some

amount

of sediments would enter the Piasa Creek Watershed but for the sediment reduction

BMPs installed

by the Project. To reduce all uncertainty regarding whether the Project was

simply duplicating the efforts

of the USDA program

(i.e.,

to avoid counting one ton of soil

savings twice), GRLT simply discounts all modeled savings from sheet and rill erosion. Alley

Ringhausen estimates that this discounted amount is approximately 795 tons

per year, or

approximately 10%

of the Project's soil savings per USLE and RUSLE models. This

"uncertainty discount"

of approximately 10% discounts soil savings to the same extent as other

established water quality trading programs, albeit through different means. The Lower Boise

River Pollutant Trading Program, for example, uses an uncertainty discount ranging from 2% to

15%, depending on the type

ofBMP being implemented.

See

Water Quality Trading Toolkit at

Water Quality Trading Scenario: Point Source-Nonpoint Source Trading at 6.

Moreover,

USEPA's Water Quality Trading Assessment Handbook identifies "nonpoint

source screening criteria" as a method

of addressing uncertainty.

See

Water Quality Trading

Assessment Handbook at 79. Alley Ringhausen confirms that GRLT carefully screens the

sediment reduction project locations before determining which type

of sediment reduction

project to install. In fact, GRLT makes this determination with the assistance

oflocal Soil

Water Conservation Districts, which visit and inspect every potential project site with GRLT and

cooperatively select the appropriate type

of sediment reduction project for the site. This

nonpoint source screening, together with the periodic monitoring to confirm the modeled

sediment savings and the site-specific sheet/rill erosion discount also applied

by GRLT,

-8-

adequately reduces uncertainty in GRLT'smodeled sediment reduction calculations, so the

application

of a fixed uncertainty discount is unnecessary.

Since IA

is currently seeing a 4.2 to I offset ratio for sediment and

3.8 to 1 offset ratio for iron (Am. Pet. at 3), would IA

consider

proposing a ratio higher

than 2 to 1 to account for the uncertainty

discount

and to create an additional environmental benefit?

As noted above, Alley Ringhausen observes that the use of a fixed uncertainty discount is

not necessary in this case to address uncertainty because uncertainty is addressed using several

other EPA-approved methods.

In addition, Paul Keck states on behalf

of Illinois-American Water that even though

Illinois-American Water is currently seeing a 4.2 to I offset ratio for sediment, and a 3.8 to I

ratio for iron, these numbers are highly dependent on conditions

of the Mississippi River. Wet

weather patterns in the Upper Mississippi River Basin like those that occurred in 1993 could

produce higher runoffin the watershed and dramatically increase the sediment load in the

Mississippi River. Illinois-American Water hopes that these higher-than-anticipated offset ratios

will continue indefinitely. But, the River conditions are beyond Illinois-American Water's

control. Therefore, Illinois-American Water cannot predict with any certainty whether Illinois-

American Water will continue to achieve an offset that goes well beyond that required by

Adjusted Standard 99-6. Given the track record

of the "new" Alton plant for lower-than-

expected TSS loading over the past four years, it would not be unreasonable for the Board to

consider 6,600 tons saved as a meaningful margin

of safety. Interestingly, USEP A used the term

"margin

of safety" in its Draft Framework for Watershed-Based Trading, published several years

prior to the Board'sdecision in AS 99-6.

See

USEPA, Office of Water, Draft Framework for

Watershed-Based Trading, EPA 800-R-96-001 at 5 (May 1996) (hereafter, "Draft Framework")

("An

agency reviewing a trade should ensure that the pollution reductions required

of a source

-9-

reflect a margin of safety that is proportional to the uncertainty associated with load reductions

over large spatial scales and is adequate to ensure that the reductions will actually attain water

quality standards throughout the trading area."). Illinois-American Water urges caution with

such an approach, however. Although turbidity is measured at the Alton plant three times each

day (rendering TSS loading calculations reliable), turbidity itself is outside

of the Company's

control.

Since USEPA's Water Quality Trading Policy stresses the need for

clear and enforceable mechanisms to ensure compliance and

accountability for the generation

of pollutant reductions that are

traded, can IA

propose such mechanisms for inclusion in the

wording of its adjusted standard?

As the Board observes, USEPA'sWater Quality Trading Policy states that

"[m]echanisms for determining and ensuring compliance are essential for all trades and trading

programs."

See

Hearing Officer Order at I (citing Water Quality Trading Policy at 10). That

Policy also provides additional guidance regarding the types

of mechanisms that may be used,

including

"a combination of record keeping, monitoring, reporting and inspections."

See

Water

Quality Trading Policy at 10. The Policy also notes that "compliance audits should be conducted

frequently enough to ensure that a high level

of compliance is maintained across the program."

Jd.

The Natural Resources Conservation Service (NRCS) publishes Field Office Technical

Guides that contain technical information about soil conservation. Section IV

of the Field Office

Technical Guide for Madison County, Illinois, titled "Practice Standards and Specifications,"

contains documentation and certification standards that apply to all "conservation practices in

which NRCS, SWCD [Soil

Water Conservation District] employees working under NRCS

authority, or agreement with entities were or are involved with the planning, design, installation

10-

or application, or check out."

See

USDA, NRCS, Madison County, llIinois Electronic Field

Office Technical Guide, at Section IV (March 2007), available at http://efotg.m-cs.usda.gov/.

Alley Ringhausen confirms that the Project currently complies with these documentation and

certification standards, which require completed work to be checked for compliance with plans

and specifications and require certification that all identifiable units of the practice are completed

according to the plans and specifications. To address the Board's concern for having enforceable

mechanisms in place, Illinois-American Water recommends revising the proposed Board order to

require compliance with the

NRCS's documentation and certification standards. Additional

revisions to the proposed order could include requirements that the Agency conduct additional

inspections of the projects and conduct annual or bi-annual compliance audits to ensure that the

inspections conducted by GRLT meet with Agency approval.

Potential

New

Agreement between IA

and GRLT

The Board's second set of questions directed to Illinois-American Water asks Illinois-

American Water to describe its position regarding whether a soil savings project with "passive"

soil savings should be "retired," and whether Illinois-American Water should be required to

continue funding new sediment reduction projects. Illinois-American

Water's response to each

question is set forth below

For a stream bank that has been stabilized where sediment reductions

are not active but passive, is

there

a point at which that particular

project could be retired

terms of accounting for sediment

reductions?

Terry Gloriod oflllinois-American Water does not believe there is a point at which a

stabilized project that continues to effectively (but passively) result in sediment reductions could

be retired in terms of accounting for sediment reductions. The concept of "retirement" appears

in USEPA guidance in two contexts, and neither context contemplates requiring an entity which

-II -

has purchased a credit to simply stop counting that credit at some arbitrary point during the

project's effective life span.

First, as the Board observes, one context in which retiring credits is appropriate and

supported by USEP A is to "account for the greater uncertainty in estimates

of nonpoint source

loads and reductions."

See

Hearing Officer Order at 3 (citing Water Quality Trading Policy at

9). This method

of "retirement" involves "retiring a percentage of nonpoint source reductions

for each transaction or a predetermined number of credits".

See

Water Quality Trading Policy at

9. In contrast to the type

of retirement addressed by the Board'sinquiry, retirement of credits in

this context occurs immediately, before the trading begins, and is factored into the trading ratio

itself.

The other context in which retiring credits is appropriate and supported by USEP A is to

"secure]'] long-term improvements in water quality through the purchase and retirement

credits by any entity."

See id.

at 3. In the Passaic Valley Sewerage Commissioners Pretreatment

Trading Program in New Jersey, for instance, a buyer may use only 80 percent

of its purchased

quantity of credits, because the Passaic Valley Sewerage Commissioners requires the buyer to

retire or reserve 20 percent

of the reductions "for environmental benefit or future needs."

See

Water Quality Trading Toolkit at Appendix A: Water Quality Trading Program Fact Sheets, at

A-65.

The Water Quality Trading Toolkit explains that "[tjherefore, facilities purchasing credits

must take this retired/reserved percentage into account when calculating credits."

See id.

Stated

differently, because the buyer may use only 80 percent

of the purchased credits, the trading ratio

is 10:8 (credits purchased: credits needed to offset the purchasing facility's discharge).

If Illinois-American Water were purchasing GRLT's soil savings as "credits," the 2 to 1

offset ratio would be equivalent to "retirement" (at the outset, in the context used in USEPA

- 12-

guidance) of 50% of the credits it purchases. In other words, for every two tons of sediment

savings generated by GRLT and purchased by Illinois-American Water, Illinois-American Water

can only count one ton

of such savings against the amount in its effluent. This 50% retirement

achieves a greater envirorunental benefit than treatment alone.

When a sediment reduction project is mature and self-sustaining and

no longer benefits from continued maintenance and monitoring, is it

time to initiate an active sediment reduction project to generate a

tradable commodity?

Terry Gloriod states on behalf of Illinois-American Water that initiation of an active

sediment reduction project simply to generate a "tradable" commodity because existing projects

are "mature" and "self-sustaining" is not appropriate. Not only is the concept

of when a project

becomes "mature" and "self-sustaining" unclear, Alley Ringhausen states that no project is truly

"self-sustaining" (or, stated differently, "maintenance-free"); even farmland that is taken out

production must be inspected periodically to ensure that the landowner is in compliance with any

use restrictions on the property.

Also, requiring the generation

of new credits simply for the sake of generating credits (or

the corollary - requiring the purchase

of new credits simply for the sake of purchasing credits) is

inconsistent with the concept

of a water quality trading program. As noted above, IlIinois-

American

Water's2 to I offset ratio is equivalent to "retirement" of 50% of the credits it

purchases from GRLT. There is nothing in

USEPA's guidance to suggest that a retirement

percentage can be arbitrarily increased as the life

of the facility progresses.

addition, the

Project has successfully achieved an offset

of approximately 4.2 to 1 for TSS and 3.8 to 1 for

iron an offset which Illinois-American Water and GRLT hope will continue to be achieved into

the foreseeable future. Illinois-American Water's purchase from

GRLTofmore credits than it

needs to meet the required offset provides Illinois-American Water with greater assurances that it

- 13-

will be able to meet the adjusted standard even if the River conditions change. There is nothing

in USEPA'sguidance to suggest that retirement

of a greater percentage of credits is appropriate

simply because a facility has purchased more credits than it needs under current conditions.

Should IA

WC's adjusted standard contain provisions to maintain the

necessary offset by continuing to fund sediment reduction projects

beyond those

that have already reached maturity? Does IAWC

believe this approach would be consistent with funding long term

maintenance of a traditional effluent control facility, albeit more

financially and environmentally beneficial?

As noted above, Terry Gloriod states on behalf

of Illinois-American Water that "passive"

credits

(i.e.,

credits that, in the Board'swords, have "reached maturity") should not be taken off

the books. Illinois-American Water's adjusted standard therefore should not contain provisions

requiring Illinois-American Water to replace the retired, "mature" credits with new, "active"

projects.

Further, Paul Keck states on behalf

of Illinois-American Water that requiring Illinois-

American Water to continue funding new projects even though the existing projects are still

effectively reducing sediment loading is not consistent with funding long term maintenance

of a

traditional effluent control facility. Generally, a facility that installs conventional treatment

technology must purchase equipment to reduce sediment loading and must service and maintain

that equipment throughout the equipment'slife. That facility must only purchase new equipment

to replace existing equipment

if the existing equipment ceases to work properly or "wears out."

If that facility's maintenance involved what the Board is suggesting here, that facility would

instead have to continually replace its functioning equipment year after year to reduce the

facility's sediment loading by an additional increment each year. The facility's obligation would

be to spend a fixed amount

ofmoney each year, rather than to ensure that the equipment was

effectively reducing the facility's sediment loading. Essentially, the facility could not reap the

- 14-

benefits from its investment in effective and long-lasting equipment because it would instead be

required to continue spending money simply for the sake

of spending it.

Terry Gloriod also states on behalf

of Illinois-American Water that requiring Illinois-

American Water to continue funding new projects even though the existing projects are still

effectively reducing sediment loading would create perverse incentives.

If Illinois-American

Water would be required to stop counting a project as soon as it was "passively" (rather than

"actively") reducing sediment loading, Illinois-American Water would benefit by making sure

that it selected projects requiring extensive or frequent maintenance. Alley Ringhausen states

that smaller projects such as farm-through sediment basins have a shorter life span and thus

require more frequent maintenance than larger, more permanent sediment reduction projects like

large sedimentation basins, filter ponds, or lakes such as Boy Scout Lake. Illinois-American

Water'sincentive would therefore be to invest in the smaller, less

pennanent projects simply so

that it could continue maintaining them and thus generating "active" credits.

Finally, Terry Gloriod states that requiring Illinois-American Water to achieve a soil

savings greater than 2 to 1 (and at least 6,600 tons per year) transforms this fixed goal into a

moving target. He states that

if Illinois-American Water had known in 2000 that the adjusted

standard would terminate unless Illinois-American Water agreed to an ever-increasing soil

savings obligation, Illinois-American Water probably would not have pursued offset trading at

that time.

Did IA

consult with GRLT or the Illinois State Water Survey

(which works with the Agency on sediment control projects such as

the

Lake Pittsfield watershed project-s-Board 0&0, 9-7-00 at 16) to

provide insight into this?

Illinois-American Water consulted with GRLT to provide insight into its answers in this

Section 2. Alley Ringhausen confirmed that he was not aware

of any instances in which an

-15-

entity which has purchased a credit was required to simply stop counting that credit at some

arbitrary point during the project's effective life span. He noted that projects that are no longer

effectively reducing sediment loading should no longer be counted, but clarified that this is

because the projects are no longer working, not that the projects are too effective or are

generating only "passive" savings.

Funding for the Sediment Reductions and Maintenanee

The third set of questions addressed to Illinois-American Water by the Board addresses

the benefits of the Project aside from soil savings, the impact that a "maintenance-only" contract

would have on such benefits, the estimated cost for maintenance each year and the changes to

that annual cost over time, and any known sources

of funding other than "outside sources."

Illinois-American Water's responses to each question are set forth below.

Were there other aspects of the Piasa Creek Watershed Project that

benefited from IA WC's funding besides the direct soil savings, such as

educational outreach or habitat restoration?

Alley Ringhausen reports that there are numerous benefits to the Project other than direct

soil savings. These include "reduced erosion, improved water quality, stonnwater control,

reduction of flash flooding, enhanced fish and wildlife habitat, protection of sensitive

ecosystems, public education on watershed management, and financial incentives to farmers and

landowners to implement conservation practices."

See

Affidavit of Alley Ringhausen '\]14

(attached to the Amended Petition for Extension as Attachment A). Specifically, GRLT works

with the Piasa Creek Watershed Education Team (PC-WET), which develops cunicula for

schools; takes schoolchildren and other members of the public out into the field to complete

hands-on service learning projects such as tree plantings and stream cleanup; educates

landowners about the existence of the Project and the benefits of implementing sediment

reduction projects on private property by distributing brochures to courthouses, libraries, and

- 16-

other public locations; works in close relationship with local colleges such as Lewis

Clark

Community College, Principia College, and Southern Illinois University (Edwardsville) and

assists students at those schools to develop research issues and topics for student theses; and

works with local high schools and organizations to develop educational materials with

information about watersheds and watershed events. GRLT has also become involved in other

projects that, but for the Project, it would not have had the opportunity to do, such as cultural and

anthropological research regarding an underground railroad site located near

Boy Scout Lake.

In terms of other aspects besides soil savings, how would the Project

as a whole be impacted by committing solely to a performance goal of

2:1 or 6600 tpy rather than a dollar amount?

Alley Ringhausen states that some of the Project'sbenefits other than soil savings will

not be affected by a decrease in funding. These include reduced erosion, improved water quality,

stormwater control, reduction

of flash flooding, enhanced fish and wildlife habitat, and

protection

of sensitive ecosystems. Funding to implement new projects with these benefits will

not be available, but all

of the benefits achieved to date will be maintained. Certain educational

benefits

ofthe Project will also continue, including educating landowners about the existence of

the Project and the benefits of implementing sediment reduction projects on private property by

distributing brochures to courthouses, libraries, and other public locations; working in close

relationship with local colleges such as Lewis

Clark Community College, Principia College,

and Southern Illinois University (Edwardsville) and assisting students at those schools to develop

research issues and topics for student theses; and working with local high schools and

organizations to develop educational materials with information about watersheds and watershed

events.

- 17-

Alley Ringhausen also estimates that some of the Project's benefits other than soil

savings will not be achieved. For instance, the Project will not have the ability to offer financial

incentives to farmers and landowners to implement new conservation practices. Also, certain

educational benefits

of the Project will not be achieved, including GRLT's work with the Piasa

Creek Watershed Education Team (PC-WET), and its leadership in service learning programs

that take schoolchildren and other members

of the public out into the field to complete hands-on

projects such as tree plantings and stream cleanup. Alley Ringhausen estimates that GRLT

spends approximately $5,000 to $10,000 each year on these educational activities, and GRLT's

proposal for maintenance (discussed in section c, below) does not allocate funds from Illinois-

American Water's annual maintenance contribution to education.

Does Illinois-American have an estimate for yearly costs and time

associated with a maintenance contract?

GRLT has estimated that under a 10-year maintenance contract, llIinois-American Water

will need to contribute approximately $136,800 each year to maintain its soil savings. (GRLT's

estimate, titled "Great Rivers Land Trust: Piasa Creek Watershed Project Stewardship and

Monitoring Plan for Conservation Properties," is attached for the Board'sreference as Exhibit I.)

Alley Ringhausen and Terry Gloriod stress, however, that this funding proposal takes into

consideration only the annual expenditures necessary to maintain the erosion control measures

that are part

of the Project. The parties will negotiate the final contract amount during

negotiations over the maintenance contract itself, and the terms

of the maintenance contract

(including technical requirements, insurance and indemnity provisions, and other terms routinely

included in service contracts) may affect the dollar amount oflllinois-American Water'sannual

payment. GRLT and Illinois-American Water urge the Board to structure llIinois-American

- 18-

Water's maintenance obligations around the minimum savings the projects must achieve

(i.e.,

a 2

to I offset, but in all events at least 6,600 tons

of solids each year).

The proposal allocates the $136,800 annual contribution among five categories: site

visits, annual landowner relations, stewardship, legal defense, and endowment. Approximately

$10,800 is allocated to site visits, which accounts for 3 hours per site per year for 80 project

sites. Expenses paid out

of this amount include stafftime and travel, expense reimbursement,

photography, mapping, administration, meetings with land owners, associated follow-up reports

and correspondence, and maintaining up-to-date records. Approximately $18,000 is allocated to

annual landowner relations, which accounts for 5 hours per site per year for 80 project sites.

Third, approximately $78,000 is allocated to stewardship

oflands owned or leased by GRLT or

under cooperative agreement with GRLT, including maintenance

of groundcover, tree plantings,

grade control structures, basins, streambank stabilization, mowing, invasive species control,

controlled bums, seed collection, tile and drain structure maintenance, and any other activities

necessary to support the intended purpose

ofthe individual projects. Expenses paid out of this

amount include labor, equipment and material costs, which accounts for 60 hours per site per

year for 20 project sites. Fourth, approximately $5,000 is allocated to legal fees and courts costs,

which may be associated with defending a conservation easement or long-term maintenance

agreement or pursing remedial measures or legal action for violations

of agreements between

GRLT and private landowners for erosion control structures on their property. Finally,

approximately $25,000 is allocated to an endowment fund, which is discussed in IIlinois-

American Water's response in subsection e, below.

- 19-

How would those costs change over the years as the project reaches

the point of sustainability

without future funding from "outside

sources"?

Te1TY Gloriod and Alley Ringhausen agree that due to the changing conditions in the

Mississippi River, which directly effect the soil savings required for compliance with the offset

ratio as well as the cost

of maintenance, it is impossible to determine with any certainty what the

cost

of maintenance will be beyond the expiration of the proposed IO-year maintenance plan.

The Project is a front-runner in watershed-based trading in the state, so there are no similar

projects to which the parties can look for guidance. The amount that Illinois-American Water

contributes beyond expiration

of the proposed IO-yearmaintenance plan could increase,

decrease, or stay the same. In any case, Illinois-American Water assures the Board that Illinois-

American Water is committed to maintaining a 2 to I offset with a soil savings

of no less than

6,600 tons per year, and that commitment will not end in 2010.

referring to a future without funding by "outside sources", is

aware of funding that might come from other than outside

sources?

The annual contribution under GRL

T'sproposal for maintenance earmarks $25,000 each

year for a "stewardship endowment fund" that will grow over the ten-year term

of the plan.

GRLT estimates that at the time the IO-yearmaintenance plan expires, the endowment fund will

have a sufficient balance to perpetuate the project for years to come. In other words, GRLT and

Illinois-American Water hope that this endowment fund will allow the Project to achieve

sustainability without future funding from "outside sources." However,

if additional funding is

required, Illinois-American Water is committed to financially supporting any maintenance

necessary to maintain the 2 to I offset with a soil savings

of at least 6,600 tons per year or, as a

consequence, lose the adjusted standard

if the offset is not maintained.

20-

Rulemaking Update

The fourth question directed to Illinois-Amelican Water by the Board is whether Section

304.206

of the Illinois Administrative Code ("Alton Water Company Treatment Plan

Discharge") is still needed. That Section provides:

Section 304.206 Alton Water Companv Treatment Plant Discharges

This Section applies to the existing 18.3 million gallons per day potable drinking

water treatment plant owned by the Alton Water Company which is located at,

and discharges into, liver mile 204.4 on the Mississippi River. Such discharges

shall not be subject to the effluent standards for total suspended solids and total

iron

of35 III. Adm. Code 304.124.

(Source: Added at

8111. Reg. 3687, effective March 14, 1984)

In its order dated September 7, 2000, this Board noted that "since the existing facility will no

longer be in use and will be replaced by the new facility, the site specific rule at Section 304.206

of the Board's rules for the existing facility is no longer necessary."

See

Opinion

Order ofthe

Board, AS 99-6 at 10 (Sept. 7, 2000). Illinois-American Water does not believe this Section is

necessary and would not oppose an action by the Agency to repeal it.

II.

QUESTIONS POSED TO IEPA

The Healing Officer Order poses five sets of questions to the Agency. These questions

concern the applicability

of federal categorical effluent limitations; the Agency's water quality

trading policy; the Agency'sinterpretation

of USEPA's water quality trading policy; the

Agency's interactions with USEPA regarding Illinois-American Water's petition for an

extension

of its adjusted standard; and the Agency's determination of effectiveness for the

Project and its assessment

of Illinois-Amelican Water'scompliance with AS 99-6.

The Healing Officer Order invites both parties to address any

of the questions posed,

"whether specifically addressed to that party or not."

See

Healing Officer Order at 1. Illinois-

21 -

American Water therefore submits testimony regarding those issues known to Illinois-American

Water that may assist the Board in making its determination in this case.

Existing

Potential Federal Categorical Effluent Limitations

The first set of questions directed to the Agency asks whether 40

eFR

Subchapter N

applies to Illinois-American Water'sAlton facility, whether USEPA has indicated that it will be

developing federal categorical effluent limitations that would apply to the facility, and whether

the Agency expects those potential limitations to include TSS and iron. Illinois-American

Water's response to each question is set forth below.

Since IAWC is not discharging to a POTW, the 40 eFR Subchapter

Effluent Guidelines and Standards appear not to apply. Does the

Agency agree? Is the Agency Recommendation referring to other

federal categorical effluent limits?

Illinois-American Water agrees with the Board'sdetermination that 40

e.F.R.

Subchapter

N (Effluent Guidelines and Standards) does not currently impose any federal categorical effluent

limitations on Illinois-American Water's Alton facility. As the Board has observed, 40

C.F.R.

Section 401.10 makes it clear that Subchapter N "prescribe]s] effluent limitations guidelines for

existing sources, standards

ofperformance for new sources and pretreatment standards for new

and existing sources." Part 401 includes "general provisions" that apply to all sources subject to

C.F.R.

Subchapter N, but this Part does not impose any specific effluent limitation guidelines.

The next Part, Part

403,1 applies to: (I) "[certain] pollutants from non-domestic sources covered

by Pretreatment Standards"; (2) "POTWs which receive wastewater from sources subject to

National Pretreatment Standards"; (3) certain States; and (4) "any new or existing source subject

to Pretreatment Standards."

See

e.F.R.

§ 403.1(b)(1)-(4). Illinois-American Water's Alton

facility does not fall into any

of these categories. Illinois-American Water is not a POTW and

J Part 402 of Subchapter N is reserved for future regulations.

- 22-

does not discharge to a POTW and, as the Board observes, 40 C.F.R. Section 403.1(b)(4) makes

it clear that "National Pretreatment Standards do not apply to sources which Discharge to a

sewer which is not connected to a POTW Treatment Plant."

See

Hearing Officer Order at 5

(quoting 40 C.F.R.

§ 403.1(b)(4». The remainder of Subchapter N sets forth effluent limitations

for specific categories

of dischargers. Illinois-American Water's Alton facility would be

categorized as a "drinking water treatment point source," and there are no effluent limitations

applicable to this specific category

of discharger.

The Board quotes language from the Agency Recommendation that states, "[ijn making

its decision, the Board should also consider the USEPA's efforts to develop categorical effluent

limits for water supply treatment plan effluents in federal regulations."

See

Hearing Officer

Order at 4. Illinois-American Water reads this language to refer only to potential categorical

effluent limitations that may be developed in the future, and does not believe the Agency

intended to refer to any existing federal categorical effluent limitations.

The Agency Recommendation also states, "Up-to-date information on

[USEPA's efforts to develop categorical effluent limits for water'

supply

treatment plant effluents] was obtained from Mr. Tom Bone of

USEPA's Office of Science and Technology..." Ag. Rec. at 11.

the

Agency'scontact with MI'. Bone, did he indicate that USEPA would

be developing categorical effluent limits for sources which do not

discharge to a POTW?

USEPA's notice of its information collection activities and request for comments states

that USEPA has "identified the 'drinkingwater treatment point source category' as a candidate

for rulemaking," and that USEPA "is collecting information from drinking water treatment

facilities to determine

if effluent guidelines or pretreatment standards are required to control the

discharge

oftoxic and non-conventional pollutants into surface waters ofthe United States and to

publicly owned treatment works (POTWs)."

See

USEPA, Notice, Agency lnformation

-23 -

Collection Activities: Proposed Collection; Comment Request; Technical Survey: Drinking

Water Treatment Facilities, 127 Fed. Reg. 38,675, 38,675 (July 5, 2005). USEPA will decide

whether the promulgation

of effluent guidelines is necessary on the basis of that information.

See

USEPA, Industrial Water Pollution Controls, Effluent Guidelines: Potential Drinking Water

Treatment Guidelines, http://www.epa.gov/waterscience/guide/dw/ (last accessed Aug. 21,

2007).

Illinois-American Water does not believe that Mr. Tom Bone

has indicated to the

Agency that USEPA will be developing federal categorical effluent limits applicable to Illinois-

American Water's Alton facility. In a deposition on August 16,2007, Robert Mosher,

Supervisor, Water Quality Standards Unit, Illinois EPA, testified that he spoke to Mr. Bone.

According to Mr. Mosher's testimony, Mr. Bone did not provide a clear answer to this question,

but simply verified that the matter was being examined.

See

Deposition of Robert G. Mosher

(Aug. 16,2007) at 29:21-29:16 (stating first that USEPA would be developing categorical

effluent limits for sources which do not discharge to a POTW, but then stating that Mr. Bone

"made it plain to me that he couldn'tconfinn anything from a developing project, that until the

formalities were complete that there were no guarantees

of what the proposed limit, if any

proposed limit, would be put forward") (emphasis added). This is consistent with USEPA's

public statements about the status

of this rulemaking.

See

USEPA, Industrial Water Pollution

2 Illinois-American Water questions whether the Agency has correctly identified the individual at USEPA that the

Agency contacted. USEP

A's webpage summarizing USEP A's consideration of potential drinking water treatment

guidelines states that

"[i]f you are interested in learning more about this rulemaldng or are interested in helping us

with its data needs, please contact: "Tom Born [not Tom Bone] (bom.tom({i!epa.rrov), Project Lead: Drinking Water

Treatment Effluent Guidelines, 202-566-100

I."

See

USEP A, Industrial Water Pollution Controls, Effluent

Guidelines: Potential Drinking Water Treatment Guidelines, http://www.epa.gov/waterscience/guide/dw/ (last

accessed Aug. 16,2007);

see also

Deposition of Robert G. Mosher (Aug. 16,2007) at 28:23-28:24 (responding to a

question regarding his discussions with Mr. Bone that "I got Ius name and phone number, I believe,

off of the Web

site from USEPA").

(An

excerpt of the Deposition of Robert G. Mosher supporting this and other statements

throughout this response is attached hereto as Exhibit 2).

If the Agency contacted someone other than Mr. Tom

Born, Illinois-American Water asks that the Agency provide Illinois-American with contact information for such

other individual prior to the August 28, 2007 hearing on this matter.

- 24-

Controls, Effluent Guidelines: Potential Drinking Water Treatment Guidelines,

http://www.epa.gov/waterscience/guide/dw/(last accessed Aug. 21, 2007) (observing that

"we

have made no decisions about whether any discharge controls are necessary for residuals

produced by drinking water treatment facilities," and that "[m]ore detailed investigations are

warranted in order to support a final action").

Moreover,

USEPA's Water Quality Trading Policy states that "EPA will consider

including provisions for trading in the development

of new and revised technology-based

effluent guidelines and other regulations to achieve technology-based requirements, reduce

implementation costs and increase environmental benefits."

See

Water Quality Trading Policy at

6 (citing the existing federal categorical effluent limits applicable to the iron and steel industry as

an example

oflimits permitting trading to comply with federal categorical effluent limits in

certain circumstances). In other words, even

ifUSEPA decides to promulgate federal categorical

effluent limits that would apply to Illinois-American Water'sAlton facility, USEPA may also

include provisions for trading in those effluent guidelines that would permit an Adjusted

Standard granted by this Board to continue in effect.

Did Mr. Bone indicate for which pollutants USEPA would be setting

effluent limitations guidelines for water supply treatment plants? Did

they include

TSS

and iron?

USEPA'swebpage summarizing USEPA's consideration of potential drinking water

treatment guidelines states only that after considering all comments on USEP

A's proposed 2004

Effluent Guidelines Program Plan, USEP A concluded "that drinking water treatment facilities

may be discharging more than trivial amounts

of toxic and nonconventional pollutants." Illinois-

American Water is not aware

of any indication by USEPA that specifically identifies the

pollutants that would be subject

any newly-promulgated federal categorical effluent

-25-

limitations for drinking water treatment point sources. However, in a deposition on August 16,

2007, Robert Mosher, Supervisor, Water Quality Standards Unit, lllinois EPA, testified that he

spoke to Mr. Bone about

USEPA'sconsideration of effluent limits for water supply treatment

plants, and that Mr. Bone "talked about total suspended solids being one of those pollutants that

they were working on development."

See

Deposition of Robert G. Mosher at 30:3-30:5.

Notably, Mr. Mosher then noted that "[h]e did tell me that there was no way to predict what list

ofpollutants they would end up with," but that TSS was one of the pollutants they were

considering.

See id.

at 30:5-30:8. This leaves open the possibility that USEPA could propose

and even promulgate federal categorical effluent limitations applicable to the 'drinkingwater

treatment point source category' that would not impact the validity

of the Adjusted Standard

proposed here.

Illinois Water Quality Trading Policy

The Board'ssecond set of questions directed to the Agency asks whether the Agency is

considering water quality trading as an option for point source discharges in waterways with

TMDLs,

if the Agency is aware of any other dischargers in 1l1inois that use or plan to use water

quality trading, or whether the Agency consulted with the llIinois State Water Survey to provide

insight into the prospect

of trading and credit retirement. llIinois-American Water is not aware

ofthe Agency'sknowledge or actions with respect to these issues, and therefore does not wish to

submit any testimony regarding these questions.

USEPA Water Quality Trading Policy

The third question addressed to the Agency by the Board is simply, "are there federal

effluent guidelines or TBEL for TSS and iron discharges not to a POTW that would apply to

we?" The answer to this is clear: NO.

- 26-

The Agency clearly supported issuance of AS 99-6 in 1999-2000. Illinois-American

Water is not aware that any federal effluent guidelines applicable to 1l1inois-American Water's

facility have been promulgated since AS 99-6 was granted, so the applicable law has not

changed. The Agency's suggestion that this Board consider "USEPA's efforts to develop

categorical effluent limits for water supply treatment plant effluents in federal regulations,"

see

Agency Recommendation at II, implicitly acknowledges that the Agency also is not aware of

any federal effluent limitations applicable to 1l1inois-American Water's facility promulgated

since AS 99-6

was granted. If any federal effluent guidelines or technology-based effluent

limitations for TSS or iron discharges currently applied to Illinois-American Water, USEPA's

efforts to develop categorical effluents would be oflittle importance to the Agency's claim.

The Agency appears to base its opposition to an extension of the adjusted standard on its

belief that "[i]n the intervening years since relief was granted, concepts of pollutant trading and

the importance of providing reasonable treatment have been refined at the federal level."

See

Agency Recommendation at IS. Illinois-American Water disagrees. As the Board has observed,

USEPA does not approve of trading to meet applicable technology-based requirements, but this

is consistent with

USEPA's previous 1996 "Effluent Trading in Watersheds Policy Statement."

See

Hearing Officer Order at 6 (citing 61 Fed. Reg. 4995, February 9,1996). Significantly, this

policy did not preclude issuance of AS 99-6 in 2000.

Moreover, applying USEPA's policy to state standards would be inconsistent with the

stated purpose of the policy. As USEPA's Draft Framework for Watershed-Based Trading

observes, USEPA disfavors trading to meet technology-based requirements because

"establishing the principle that

all

trading partners meet applicable technology-based

requirements preserves minimum levels of water quality protection mandated by the CW A" and

-27 -

Electronic Filing, Received, Clerk's Office, August 21, 2007

"promotes fairness."

See

Draft Framework at 2-4 (emphasis in original). That policy also

provides that all facilities participating in water quality trading must first meet technology-based

requirements "since national minimum standards are expressed as limits on the amount

of a

pollutant that can be in the effluent a facility discharges, [and] it is not possible to arrange for

comparable pollution controls at another source."

See id.

These purposes are not served by extending the policy to state standards because the

applicable "minimum standard" varies from state to state. For instance, Illinois' generally-

applicable effluent limitation is 15.0 mg/L for TSS and 2.0 mg/L for iron.

See

35 Ill. Adm. Code

304.124.

contrast, there are no generally-applicable state effluent limitations for TSS and iron

in Missouri applicable to drinking water treatment facilities discharging to the Mississippi River.

See

10 CSR 20-7.015.

Extending USEPA policy to include state standards would permit a

facility with a discharge identical to that

of Illinois-American Water'sAlton facility to conduct

trading directly across the River from Illinois-American Water, even though Illinois-American

Water would be precluded from participating in such trading. This is clearly in conflict with the

policy's stated intent

of promoting fairness and consistency.

USEPA Oversight

The Board's fourth set of questions directed to the Agency asks whether the Agency

consulted with USEPA specifically regarding Illinois-American Water's adjusted standard

petition, and whether the Agency is aware

of any feedback from USEP A regarding lIlinois-

American

Water'sNPDES Permit and the provisions for AS 99-6.

June 15, 2007, lIlinois-

American Water's Cindy Hebenstreit participated in a teleconference with representatives

J Illinois-American Water acknowledges that its Meramec and South facilities, which discharge to the Meramec

River, have limits for Settleable Solids. However, these facilities do not discharge to the Mississippi River.

Moreover, even if effluent limits for TSS are included in permits for facilities that discharge to the Mississippi

River, tins would not indicate that the state has generalJy-applicable effluent limits. Such limits could simply be

included by the permitting authority folJowing a Best Professional Judgment analysis.

- 28-

Electronic Filing, Received, Clerk's Office, August 21, 2007

USEPA and the Agency. The teleconference was arranged by Marsha Willhite, Director of the

Division

of Water Pollution Control at the Agency. Participating for USEPA were Jim Hanlon

(Director, Office

ofWastewater Management, from Washington, DC), Marcus Zobrist (Team

Leader, Water Permitting Program, from Washington, DC), Nina Badgerfield (title unknown

from Washington, DC) and Peter Swenson (Branch Chief, Permits Section, Region V).

Ms. Willhite opened the discussion by stating that the Agency was "uncomfortable"

about extending the Adjusted Standard in light

of Illinois technology-based standard (35 Illinois

Administrative Code Section 304.124). Mr. Hanlon, the Director

of the Office of Wastewater

Management at EPA headquarters, had this to say in response:

Our national program continues to encourage trading where it will gain

improvements. We have seen many. Some are

big (and he provided the

example

of 90-plus municipal wastewater treatment plants involved in a

trading program in Connecticut). Others are single facility trading.

At the end

ofthe day, through engineering and water quality analysis, we

seek improvement which will be monitored over the term

of the permit. In

this case, American Water is the permit holder.

must establish and

continue a relationship with the land trust. IEPA and Region

need to

determine

if the offset should continue when your permit expires.

If categorical standards are set, that will change. EPA is working on one.

But,

that'sseveral years away. That office is looking at your situation

there in Alton.

After some comments from others about possibly applying best professional judgment,

Mr. Hanlon stated the following with regard to a possible federal effluent standard

applicable to water treatment plants:

"Our people are considering trading in developing

their guidelines." Peter Swenson had this to say:

4 Also participating were: Brad Hiles, counsel for the Petitioner, and the following Agency representatives: Ms.

Willhite, Alec Messina, Toby Frevert, Sanjay Sofat and Robert Mosher.

- 29-

What EPA has said is trading in order to meet a technology-based standard

isn't appropriate, but we are considering a technology-based standard that

may include trading as an option.

Marcus Zobrist added this:

EPA is in the process oflooking at standards for water plants and we are

considering trading as part

of that mix.

Counsel for Illinois-American Water, Brad Hiles, suggested that USEPA ought to

consider the Piasa Creek Watershed Project offset arrangement in developing a standard,

to which Mr. Zobrist replied: "We already are." Cindy Hebenstreit, Director of

Environmental Management

Compliance for American Water Company's Central

Region, advised that USEPA's Tom Born had already visited the Alton plant, which was

acknowledged by at least one of US EPA's representatives as being part of the federal

examination

of a possible effluent limit and trading as an option with respect to any such

limit.

No one from USEPA advised or implied during the teleconference that the

Adjusted Standard should not be extended, that the Adjusted Standard should be

terminated, or that the TSS limits in Section 304.124 should be imposed in Illinois-

American Water's NPDES Permit.

candor, those specific questions were not posed to

USEPA's representatives. Nevertheless, Illinois-American Water's participants in the

teleconference came away from the call strongly encouraged that USEPA officials had a

favorable view ofTSS offset trading and the GRLT - Illinois-American Water offset

program, in particular.

Also, Illinois-American Water agrees with the

Board's observation that "[s]o far

the record reveals no indication from USEPA that the approach under AS 99-6 that was

included in [Illinois-American Water]'sNPDES Penni! -IL0000299 is inconsistent with

30-

the CWA or its implementing regulations."

See

Hearing Officer Order at 7. In fact, in

the proceedings on AS 99-6, the Agency admitted that USEPA would not object to the

adjusted standard.

See

Agency Amended Response to Petition for Adjusted Standard, AS

99-6 (June 20, 2000) at 14 ("The Agency agrees that

USEPA would not object to an

NPDES permit for the replacement facility that contained no discharge effluent limits;

USEPA raised no objections [to] the Illinois-American East St. Louis or East Moline

NPDES permits issued by the Agency in the wake of the Section 28.3 adjusted standards.

Furthermore, the program that Illinois-American is proposing is consistent with

USEPA's

own total maximum daily load ('TMDL')-relatedguidance for obtaining offsets from

nonpoint sources.") (citing 64 Fed. Reg. 46,058, August

23,1999) (emphasis added);

see

also

Opinion

Order of the Board, AS 99-6 (Sept. 7,2000) (citing the Agency's

admission).

Finally,

Terry

Gloriod states that he has had conversations with representatives of

USEPA regarding the Project. He understands from these conversations that USEPA

views the Project favorably and has used the Project in presentations as an example of a

successful water quality trading program.

Report on performance

of Piasa

Creek Watershed Project:

The Board's fifth set of questions directed to the Agency inquires about the Agency's

determination of effectiveness of the Project, the Agency's involvement in the Project,

and the

Agency's method of assessing compliance with AS 99-6. Although the Agency is best situated

to provide the Board with comprehensive answers to these questions, Illinois-American

Water

and Alley Ringhausen have had several interactions with the Agency regarding these issues that

-31 -

may be of interest to the Board. Illinois-American Water's response to each question is set forth

below.

Please provide a copy of an Agency's determination of effectiveness

and a summary of the Agency's involvement in the GRLT for the

record here.

The Agency did not complete the determination of effectiveness at the five-year mark as

required

by the Board's September 7,2000 Order.

a deposition taken on August 16,2007,

Scott Tomkins, an Agency Environmental Protection Specialist, testified that the Agency did not

complete a determination

of effectiveness, to his knowledge.

See

Deposition of Scott A.

Tomkins at 38:23-39:1. (An excerpt

of the Deposition of Scott A. Tomkins supporting this and

other statements throughout this response is attached hereto as Exhibit 3.) Mr. Tomkins prepared

an internal Agency memorandum to Blaine Kinsley dated

November 21, 2005, the self-described

purpose

of which was to provide information "as an overview of the Piasa Creek Watershed

Project for the renewal

ofNPDES Permit IL0000299... and the Illinois Pollution Control Board

(IPCB) Adjusted Standard Provision AS 99-6," but this memorandum

was not a determination of

effectiveness.

See

Deposition of Scott A. Tomkins at 39:10-39:11 ("I provided a memo to [the

Permit Section] November 25th, 2005, overviewing the project.");

id.

at 40:13 (refening to the

memorandum as an "internal memo");

id.

at 42:9-42:15 (stating that he does not believe the

memorandum to be a determination

of effectiveness, but rather "an overview of the project's

compliance with the NPDES permit condition");

see

Memorandum from Scott Tomkins to Blain

Kinsley re: Piasa Creek Watershed Project Overview at I (Nov.

21,2005) (attached hereto as

Exhibit D).

In addition, the memorandum from Scott Tomkins to Blaine Kinsley inaccurately

reported the sediment reductions achieved

by the project as of November, 2005, reporting

32-

sediment reductions through January 2002 instead.

See

Memorandum at 2. The total sediment

reduction for gully erosion and streambank erosion in Scott Tomkins' November, 2005 memo

was 2,703 tons.

See id.

In his deposition, however, Mr. Tomkins acknowledged that the total

reductions should have been reported as being in excess

of 5,000 tons.

See

Deposition of Scott

A. Tomkins at 44:16-48:3 (calculating the soil savings through November 21, 2005, per a

spreadsheet dated October 18, 2006). Alley Ringhausen reports that he contacted Scott Tomkins

to inform him

of this inaccuracy, and that Mr. Tomkins acknowledged that the figures set forth in

his November 21, 2005 were outdated. Alley Ringhausen reported the accurate figure through

the five-year mark as 6,487 tons

of soil per year.

How has the Agency assessed compliance with AS 99-6

thus far in terms of

tracking the generation of sediment savings in Piasa Creek and comparing it

to the

load from the Alton Plant?

Regarding the Agency's methods of tracking the generation of sediment savings in Piasa

Creek, Alley Ringhausen reports that to his knowledge the Agency relies on GRLT's

calculations

of sediment savings. (This is supported by the Agency'scitation to GRLT status

reports in the November 21, 2005 memorandum described above.)

See

Deposition of Scott A.

Tomkins at 56:13-56:16 (stating that "I do not see any problem with [GRLT] generating or

tracking or documenting sediment savings within the watershed plan implementation");

id.

56:13-56:16 (affirming that GRLT "has accurately tracked the generation

of sediment savings in

the Piasa Creek watershed" to the best

of his knowledge);

see

Deposition of Robert G. Mosher at

51:14-51:17 (stating that he does not believe "that the tons

of soil saved in the Piasa Creek

Watershed Project as reported by Great Rivers Land Trust have been exaggerated"); 51:18-52:5

(stating his understanding that GRLT'sreported soil savings are "predictions

of soils savings"

rather than measured soil savings, but that "Amy [Walkenbach] assures me that everything

-33-

they'veinvestigated leads to an accurate prediction, using established methodologies to do the

predicting. So I don'thave any doubts really that they'reachieving what they say they

achieve"). Alley Ringhausen also confirms that the Agency had few,

if any, questions regarding

the way in which GRLT calculates soil savings, and that the Agency has never requested copies

of the underlying data to verify GRLT'sfigures. Alley Ringhausen confirms, however, that all

of GRLT'srecords have been and continue to be open for inspection by the Agency (or by any

interested member

of the public, for that matter).

Regarding the Agency'smethods

of determining the solids loading from the Alton

facility, Illinois-American Water believes that the Agency uses the formula described in the

Affidavit

of Paul Keck (attached to the Amended Petition for Extension as Attachment F). This

formula assumes that 100%

of the TSS in the facility's influent would be discharged in the

facility's effluent, and calculates the amount

ofTSS in the facility's influent by multiplying the

TSS concentration in the facility's influent (determined by correlating turbidity data from

samples collected approximately three times each day) by the predicted daily flow rate for the

facility. On several occasions in the months leading up to Illinois-American Water's filing

of its

Petition for Extension, counsel for 111inois-American Water, Paul Keck, and the various Agency

representatives including Bob Mosher and Tom Andryk discussed the proper method

calculating the loading from the Alton facility. Illinois-American Water discussed this formula

with Bob Mosher in some depth, and the parties agreed that this formula presented a more

reliable and conservative figure for solids loading than other proposed methods such as

calculating the amount

ofTSS in the facility's influent using the grab samples collected each

month by Illinois-American Water as required by the facility's NPDES permit.

- 34-

Respectfully submitted,

By:

Bradley S.

HIes, #03128879

Blackwell Sa ders LLP

720 Olive St., 24th Floor

St. Louis, MO 63101

Telephone: (314) 345-6000

Facsimile: (314) 345-6060

An Attorney for Petitioner

-35 -

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF:

PROPOSED EXTENSION OF ADJUSTED STANDARD

APPLICABLE TO ILLINOIS-AMERICAN

WATER COMPANY'S ALTON PUBLIC WATER

SUPPLY FACILITY DISCHARGE

TO THE MISSISSIPPI RIVER

)

) AS 2007-2

)

(Adjusted Standard)

)

CERTIFICATE OF SERVICE

I hereby certify that on August 21,2007, the attached PETITIONER ILLINOIS-

AMERICAN WATER COMPANY'S WRITTEN ANSWERS TO THE BOARD'S

QUESTIONS FOR IAWC AND IEPA PERTAINING TO THE AMENDED PETITION AS

2007-2 was filed by electronic transmission with the Office of the Clerk of the Illinois Pollution

Control Board, and was served by first class mail, postage prepaid, upon the following persons:

John Therriault, Assistant Clerk

IllinoisPollution Control Board

James

Thompson Center

100 West Randolph Street, Suite 11-500

Chicago, 1IIinois 60601

William Richardson, Chief Legal Counsel

IllinoisDepartment

of Natural

Resources

OneNatural Resource Way

Springfield, llIinois 62702

Matthew 1. Dunn

Division Chief, Environmental Enforcement

IllinoisAttorney General

100 West Randolph Street, 12

Floor

Chicago, 1IIinois 60601

Sanjay Sofat

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P,O,

Box 19276

Springfield, 1IIinois 62794-9276

Carol Wcbb

Hearing Officer

IllinoisPollution Control Board

1021 North Grand Avenue East

P,O,

Box 19274

Springfield, 1IIinois 62794-9274

Respectfully submitted,

ILLINOIS-

By:

Bradley S, Hile ,#03128879

Blackwell Sand rs LLP

720 Olive St., 24th Floor

St. Louis, MO 63101

Telephone: (314) 345-6000

Facsimile: (314) 345-6060

An Attorney for Petitioner

36-

EXHIBIT 1

Creat Rivers

Land Trust:

Piasa

Creek

Watershed

Project

Stewnrdship

and

Monitoring Plan for

Couservarion

Properties

Illl't.",,, of the plan is to develop a strategy of long-term funding of stewardship and

projects designed to control erosion and trap sediment in the Piasa Creek

Funds dedicated to this purpose may be used to coyer the cost

of several

.cuntucu 1111""'",,';,,,0-

of the Piasa Creek Watershed Project (PCWP) sites: expenses

include staff time and travel. expense reimbursement, photography, mapping,

administration, meetings

with land owners. associated follow-up reports and

correspondenc e.

and

maintaining

up to daterecords.

lands owned or leased by GRL T. Those activities may include.

not limited to. maintenance

of groundcover, tree plantings, grade control

ctr-nr-rru-s-c vu',,,,,o. streambank stabilization. mowing, invasive species controL

controlled burns. seed collection. tile and drain structure maintenance. and any

necessary to support the intended purpose

of the individual

expense. primarily legal fees and

COlUT cost in the unlikely event

remedial measures or legal actions are needed to correct a misunderstanding

VIolation

of agreements between GRLT and private landowners for

structures

on their property.

LU1IUIH:S proposal takes into consideratiou the annual expenditures necessary to

HhUU""H

",,,,,,,n,n control measures that are part of the Piasa Creek Watershed Project

~"U,lVlm:l

component of the proposal suggests that a portion of the annual funding be

stewardship endowment fund that

can grow over the ten years of the plan

at the end of ten years to perpemate the project for years to

STWO 1.1343903-4

Estlmnted

Annual

Srewardslup

and Monitoring Costs

for

Year

Proposal

Site Visits: 1 site visits per year by GRL T staff (includes preparation and follow-

hours

per visit at each project site

S45 /hour X SO sites

SlO.800

.->..llllllill Landowner Relations:

per site per year

545ihour X SO sites

518.000

costs will be limited to properties owned. leased or under

cooperative agreement

of GRLT. Labor. equipment and material costs per site

60 hours

per site for 20 sites

S78.000

funds to cover costs nssociared with defending a conservation

long-term maintenance agreement. (The recommended legal defense

An annual contribution ofS5.000iyear will achieve the

reconunended

li",UI.lll.'!;, level by the end of the 10 year proposal.)

S5.000

Endowment Fund: To achieve project sustainabiliry without future funding from

outside

~'l>'"~<:::>.

an annual contribution of

$25.000

COSTS

-L-

$136.800

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

Grand Avenue East, springfield, Illinois.

CSR, RPR, and Notary r u

l i c , on the 16th day of

instance of the petitioner, before Dorothy J. Hart,

AS 07-2

(Adjusted Standard)

Deposition of ROBERT G. MOSHER, taken at the

CAPITOL REPORTING SERVICE, INC.

2021 Timberbrook Drive

springfield, Illinois

62702

217-787-6167

August, 2007, at the hou r of 11: 40 a. m. , at 1021 North

IN THE MATTER OF:

PROPOSED EXTENSION OF ADJUSTED

STANDARD APPLICABLE TO

ILLINOIS-AMERICAN WATER COMPANY'S

ALTON PUBLIC WATER SUPPLY FACILITY

DISCHARGE TO THE MISSISSIPPI RIVER

UNDER 35 ILL. ADM. CODE 304.124

AND 304.106

EXHIBIT

---=---

b --

Just so we're clear on that, there is no

federal categorical effluent limits applicable to the

Illinois-American Water company's Alton plant, are

there?

AS I understand from our Permit Section staff

that I believe I heard them refer to just a narrative

statement about best degree of treatment or best

reasonable treatment being what should be applied, but

that was some sort of a narrative.

Bob, I'm talking about federal categorical

effl uent 1 i mi ts.

Right.

Are you aware of any federal?

well, there's no specific federal categorical

effluent limits for this category of discharger.

That's correct.

How about Ib? Maybe the best way to go at Ib

is to ask you if you've had discussions with Mr. Tom

Bone of USEPA'S office of science and Technology?

Yes, I have.

Tell us about your discussions with Mr. Bone.

He's ln washington.

I got his name and phone

number, I bel i eve, off of the web si te from USEPA.

called him and asked him if he could update me on

USEPA'S

efforts to develop federal categorical

effluent limits for the drinking water treatment

industry type discharger, and he filled me in on where

they were at and gave me some facts that I believe

show up in our Agency response to the petition.

And

that was about a ten-minute conversation and that was

the only time I've talked with him.

okay.

So is it your testimony that the

information that is in the Agency's recommendation

represents all of the information that Mr. Bone

provided to you that day?

It's not a word-for-word transcript of what

we talked -- or, our conversation, no.

And I'm not looking for that, either, Bob.

I'm just looking for the general subjects that were

addressed.

well, my i ntenti on was to s umma r

ze what he

told me and that summary is pretty much what's in our

our response.

Did he tell you that the Agency would -- that

USEPA would be developing categorical effluent limits

for sources which do not discharge to a POT-W?

Yeah.

Did he indicate which pollutants would be

included 1n the categorical effluent limits?

He definitely talked about total suspended

solids being one of those pollutants that they were

working on development.

He did tell me that there was

no way to predict what list of pollutants they would

end up with, but certainly total suspended solids was

one of those that they were looking at.

SO he couldn't confirm to you whether there

would, in fact, be a categorical effluent limit for

T55, 1S that correct?

Yes.

He confirmed -- or, he made it plain to

me that he couldn't confirm anything from a developing

project, that until the formalities were complete that

there were no guarantees of what the proposed limit,

if any proposed limit, would be put forward.

Did you discuss with Mr. Bone the federal

Agency's consideration, if any, of offset credits 1n

the compliance scheme in the event categorical

effluent limits were developed?

I didn't talk with him about that subject,

no.

Do you recall if anyone of you raised it

during the conversation?

the current petition came forward, was that survey.

And I call it a survey.

It was somebody wanting to

know about trading and offsets in our state. And I

sai d, well, the onl y thi ng I know of is thi s

Illinois-American thing and gave them a few facts

about it and said I think, you know, if you really

want to get some details, you need to talk to somebody

else.

very good.

Let's move on to question 5.

Have you prepared a response to question 5 or do you

intend to prepare a response?

No.

Not Sa.

And not 5b.

Not -- no, not 5b,

either.

DO you believe that the tons of soil saved in

the piasa creek watershed project as reported by Great

Rivers Land Trust have been exaggerated?

No.

Do you have any reason to believe that those

tons of soil saved reported by Great Rivers Land Trust

with respect to the Piasa creek Watershed project are

anything other than absolutely accurate?

well, I -- from my discussions with Amy

walkenbach and Scott Tomkins, I'm aware that they're

really predictions of soil savings. They're not

measured soil savings.

But Amy assures me that

everything they've investigated leads to an accurate

prediction, using established methodologies to do the

predicting. so I don't have any doubts really that

they're achieving what they say they achieve.

Is it your understanding that what they say

they are achieving at this point is already an offset

in excess of two to one?

Do you unde rstand that?

Yes.

Regardless of disagreements you and I may

have, Bob, about whether this TBEL issue even applies

to our case, let me ask you personally, why would you

want to end an offset project that's exceeded two to

one and go to technology-based treatment? My specific

question for you is, how's that better for the

environment?

personally, I don't want to see it ended

necessarily. It's probably good for the piasa

wate rshed.

How about the Mississippi River, which is

what the piasa watershed feeds?

Yeah, right. All soil conservation projects

are good and do good.

I take direction from Toby

Freve rt, and if he di rects me to take a stand and, you

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

Grand Avenue East, springfield, Illinois.

CSR, RPR, and Notary r ub l i c, on the 16th day of

Deposition of SCOTT A. TOMKINS, taken at the

AS 07 2

(Adjusted Standard)

CAPITOL REPORTING SERVICE, INC.

2021 Timberbrook Drive

springfield, Illinois

62702

217-787-6167

August, 2007, at the hour of 9: 00 a .111., at 1021 North

instance of the petitioner, before Dorothy J. Hart,

PROPOSED EXTENSION OF ADJUSTED

STANDARD APPLICABLE TO

ILLINOIS-AMERICAN WATER COMPANY'S

ALTON PUBLIC WATER SUPPLY FACILITY

DISCHARGE TO THE MISSISSIPPI RIVER

UNDER 35 ILL. ADM. CODE 304.124

AND 304.106

IN THE MATTER OF:

'~.

EXHIBIT

----==-----

retirement credits or retirement discounts ought to be

applied to TSS tonnage saved?

Not to my knowledge.

The same question with respect to

Illinois-American water company.

Let me just restate the question.

please do.

To your Icnowledge has anyone at the Agency

suggested to Illinois-American water company that

retirement credits or retirement discounts ought to be

applied to tons of TSS saved at the piasa creek

Watershed project?

Not to my knowledge.

Let's turn now to Exhibit 2 again, Scott, and

to that question 5, which is on the next to the last

page. I believe you testified earlier that this is

the one question that you were asked to provide

specific input on here at the Agency. Is that

correct?

Sa, correct.

But not Sb?

al so, too, correct.

Let's start with Sa.

Has the Agency made a

determination of effectiveness?

MR. HILES:

Just to take a break?

MR. SOFAT:

No, just to talk about this Sa

and b that you're talking about.

or do you want to be

the record? That's fine, too.

MR. HILES:

Let's stay on the record.

MR. SOFAT:

okay.

We are gOlng to submit our

responses on the 21st.

I can understand you want to

know the essence of discussion and stuff. I don't

have a problem.

But I still haven't, you know,

prepared the responses to these for the Board.

To my understanding, that is the Permit

section's responsibility.

Do you know why the permit Section did not

make a determination of effectiveness?

No, I don't.

Did you urge them to make a determination of

effectiveness?

I provided a memo to them November 25th,

2005, overviewing the project.

Do you have a copy of that memo with you

today?

Not to my knowledge.

why not?

MR. SOFAT:

Brad, can we stop here?

MR. SOFAT:

So I think anything less than

showing everything, I think I'm okay with that, but I

think if you're -- it's in the process of preparation

is what I'm saying.

MR. HILES:

well, 1 et me conti nue to explore

with this witness his inputs on these two questions.

MR. SOFAT:

okay.

Yeah.

I don't have a

problem with the essence of what happened.

Scott, let's turn again to the -- I believe

you said memo that you provided to the permitting

section.

Correct.

Internal memo.

And

that was Novembe r 5, di d you say, of

I'm sorry, November 21st.

MR. HILES:

while you look through your

2005?

MR. HILES:

understand.

documents, I'm going to ask the court reporter to mark

this, please, as Exhibit 3.

(Deposition Exhibit Number 3 marked for

identification.)

Yes, I have it in front of me.

I'm going to hand you a document marked

Deposition Exhibit 3. And I think what I'll have you

do is compare Deposition Exhibit 3 with the document

that you have just located in your files and tell me

if these are the same documents.

MR. HILES:

NOW, I would like to also have

the court reporter mark your document, please, as

Deposition Exhibit 4.

(Deposition Exhibit Number 4 marked for

identification.)

All right.

I'm handing your document now

marked Deposition Exhibit 4 back to you and I've put

it side by side with Deposition Exhibit 3. It does

appear to me that there's a notation on Deposition

Exhibit 4 that does not appear on Deposition Exhibit

3. It's in the upper right hand corner, not the

extreme upper right-hand corner, but it's in all

capitals and it's underscored, and it says: "Illinois

EPA 5-Year Review Memo."

Do you see that?

Yes, they are.

Correct.

Yes, it is.

Now, that doesn't appear on 3.

Is there

anything else in Exhibit 4 that does not appear on 3?

Take all the time you need to review it.

That's the only difference I can see, also.

Thank you.

when, if you know, was thi s added

designation put on the document that we see here as

Deposition Exhibit 4?

I do

not know that.

Did you put it on there?

NO, I didn't.

Do you know who put it on there?

No, I do not know the person that put that on

which is why you gave it to the Permit

there.

Exhibit 3 and Exhibit 4, do you consider

these to be a determination of effectiveness?

No.

why not?

I consider this document to be an overview of

the project's compliance with the NPDES permit

condition.

secti on?

Correct.

Did you consider the project to be in

compliance with the NPDES permit held by the Alton

plant of Illinois-American Water company?

Yes, I put that in my conclusions.

very good.

How did you come to prepare this?

What prompted you to do it?

I was contacted by Illinois-American Water

company about their provision and renewal of their

permit.

who contacted you from the water company?

Tim -- I

I can't pronounce his last

Genz or -- I have to review my notes to get the

correct spelling of his last name. Tim G-a-n z.

Tim Ganz.

Ganz, correct.

Ve ry good.

what di d Mr. Ganz tell you that

prompted you to prepare the memo?

He did not tell me to prepare the memo.

was inquiring information about the renewal process.

I understand.

And what was it about that

inquiry that prompted you then to prepare the memo?

Blaine Kinsley, I<-i-n-s-l-e-y--

Yes.

- from the Permit section requested me to

prepare this memo for him.

Did you supply any other information to

Mr. Kinsley in connection with Mr. Ganz's inquiry?

No other written.

Let's take a look, pl ease, at the second page

of the memo, Table 1.

Yes.

The conclusions on Table 1, were those

up-to-date when this memo was prepared in 2005?

It was a table that was available with the

Great Rivers Land Trust Web site that I used and just

took it off the web site.

All right.

I see in Table 1 that you

actually cite to that web site and cite specifically

to the report of January 2002.

Correct.

Did you search for more updated information

at that time?

On the web site.

only on the web site?

Correct.

Was there, in fact, more acres benefited as

of the time you prepared this memo, November 21 of

2005, than the acres that are reflected here in Table

What I have in front of me is a spreadsheet

that the Great Rivers Land Trust used to document in

years increment the landowners involved, what phase,

detention basins, talking about the different best

management practices, cost involved, cost per ton,

spreadsheet.

I'm familiar with that spreadsheet.

You're familiar with this spreadsheet?

I'm just not sure why you put it in front of

you and why you're looking at it right now.

Why don't

you tell us that?

Sure.

The date on this spreadsheet was

wednesday, october 18th, 2006.

very

good.

There is information on that up to 2006, but

I did not have this in my possession when I created

the memo.

I understand. will you agree with me that

the acres benefited as of November 21, 2005, was

greater than the acres benefited as reflected in Table

1 of your memo?

According to the spreadsheet, in 2005 --

well, as of 2004 it says 2,623 acres.

Let's go to tons of soil saved.

okay.

And what I'm looking for, scott, is just a

total figure of the tons of soil saved, if you can

find that, as of November 21, 2005, from all sources,

government cost.

It's basically just a basic

whether it's gully erosion or streambank erosion.

okay.

And if you need to give it to me ln pieces,

I'll write them down and we'll add them up.

okay.

I wi 11 gi ve you years, each year on

thi s sheet.

very good.

And you can add it up.

AS of completed projects 2001, soil saved 556

tons.

Was that 556?

556, correct.

All right.

completed projects as of 2002, soil savings

have that.

Year

2004

- -

Did

you

ski p over 2003?

Yes.

I'm sorry.

That's okay.

2003, 932

tons.

please continue.

AS of

2004,

2,164 tons.

MR.

SOFAT:

Can

you

repeat

that?

932 tons.

MR.

HILES:

sanjay, are you doing the same

2,164 tons.

And I do not know an aspect of 2005 when this was

exactly calculated.

Do you have numbers on that spreadsheet from

2005?

Do you want me to repeat it again?

MR.

SOFAT:

No, it's okay. Thank you.

I think we both wrote down the same numbers,

Scott. Now it's just a matter of whether we can

arrive at the same total.

2005, 478.

Tons of soi 1 saved?

Correct.

I'm going to add these up.

You'll have to

give me a minute, though.

Hold on.

Adding up the figures that you have given me from

2001 through 2005 the total I arrived at was 5,062

tons.

Am I off by -- is it 556, 932,

Those are the numbers?

Those are the numbers I have.

I do.

It just says summary of year completed

d ri 11?

MR.

SOFAT:

932, 2,164, and 478?

MR.

HILES:

MR. SOFAT: I'm getting 5,162.

okay.

I think we can agree that the number

is over 5,000 tons.

Scott, have you ever supplied a

figure to the permitting section that is an

all-inclusive figure through 2005 that is a figure in

excess of 5,000 tons?

No.

I apologize if I've asked this question

before, but to your knowledge has the permitting

section performed a determination of effectiveness?

Not to my knowledge.

Let's go back to the hearing officer's order

on the last page, please. And I'd like to direct your

attention, Scott, to the second full paragraph set

forth in quotation marks near the top of page 8.

you see that paragraph?

Yes, I do.

After the three-dot ellipsis, the wording is

as follows:

"In addition to the fifth year review,

the Agency will continue to be involved in the site

selection process for the various aspects of the

project

Has

the Agency continued to be involved in the

site selection process for the various aspects of the

watershed through the implementation of the best

management practices.

And specifically what have you discussed with

Agency staff?

The methods that they recorded and then the

sediment savings as I have in those documents.

Well, let me ask you for your answer to

question 5b right now.

As the person from the Agency

who has spent the most time with officials at Great

Rivers Land Trust and the most time reviewing

documents about the piasa creek Watershed project,

what 1S your answer to question 5b?

From my perspective, I do not see any problem

with them generating or tracking or documenting

sediment savings within the watershed plan

implementation.

Do you mean by that that Great Rivers Land

Trust has accurately tracked the generation of

sediment savings in the piasa creek watershed?

To the best of my knowledge.

Have you -- are there any other discussions

that you've had with Agency staff with respect to

question 5b other than what you've told us about?

The discussions that I can recall have been

EXHIBIT 4

ILLINOIS ENVIi,ONMENTAL PROTECTION

AGEi'JCY

1011

I<D~7h

Cl:M,-n..

\'.(.~NU;

EM'T. P.O. 8e:: 19276.

$1',,!NGm~f),

IWXti15

62?94.92i6

-.; 2171 782.j<197

!......cs

TII(1!'lrs(:~j

Crena. 1OD V{tST It.-.:,'IK11.PH, 5L"T£11,::'OO. Ctncecc, !l (lOGGl - !3121 61.1.5025

ROD R. IJt':'.GGlEV!Cl'l,

GOVERNOR

DOUGLAS P.

Sco'rr,

Dt~;[C::10R

Dete:

To:

111~

following information is provided £;:5 an overview of the Piasa Creek Watershed Project for the

renewal

of NPDES Pewit lLU000299 (Illinois American Water Company - Alton Public Wetcr

Treatment

Facility

and the Illinois Pollution Control Board

(TI'eB.) Adjusted

Standard Provision AS 99-6

issued on September 7. end October 19.2(00).

The Piasa Creek Watershed drains OV(:f 78,000 acres in Madison, jersey. and Macoupln counties and is a

tributary of the Mississippi, 'The lower reaches of the stream were channelized years ago and ere

comprised

of second growth bottomland deciduous forests. The upper reaches vacate water from the

residential landscapes

of Godfrey and the agricultural lands of Jersey and Mecoupin counties. The

watershed's point of discharge inro lIte Mis.l:;issippi is at rile Great River Road, about five miles north of

Alton.

Illinois American water Company (JAW) constructed a 16,0 million gallon pet day water treatment

facility in-Alton, Illinois in replace a

lOO~year

old facility that was susceptible to Hooding, illinois EPA

determined

that

the existing site-specific exemption and Permit did not apply to the new faoillty, and that

standard discharge

limits: would app:y unless new regulatory relief was granted,

lA W pursued an Adjusted Standard application with the IPCB for relief to the standard discharge limits

::nd to allow direct discharge to the Mississippi River eliminating the need for residual lagoons.

mechanical dewatering equipment and hauling

til; -dcwutcred solids 1..1) a landfill. Local residents,

government officials and errvironmernal groups were opposed to the siting of lagoons and the hauling of

dcwetcrcd solids along this roadway, which is a designated Nation"} Scenic Byway.

lAW developed a unique partnership with Great Rivers Land Trust (GRLT) to implement a watershed

project,

which

will provide a sustainable reduction

overall sediment loading of the Mississippi River.

IAW will contribute 54,15 million dollars over a ten-year period to fund ihe PC\VP. TIle goal of the

project is to meet a

2:1

reduction

in.

sediment load to the Mississippi River. As such, IA\V

amended

its

Adjusted Standard application to include this unique suspended solid trading proposal that war.

subsequently supported by the Illinois. EPA and

tile

iPCB issued the adjusted standard (AS 99-6).

R~'(U0U}

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ltd",

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nr~·(.bn

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f,',at'itJrl, iL 62159 - iGIl!) 993.72('O

STLDOI.1343903-4

The

Pi:~S3

Creek Wmershed Project goa! is to reduce sedimcntarinn in the wurershed

approximately

6,700

tons per year hy the end OftJ1C ten-year programin 2010.

The Piasa Creek WatershedProject benefits are

we.:

t:.eycnd the sediment reduction goal. The immediate

benefit is

that LAVl received an NPDES permit from the Illinois EPA that will provide iA\V millions of

dollars in

S2vings in prcuccred construction and operating expenditures. The lower construction and

operating costs could result in lower

water bills to mea residents. TIle, long-term benefits include reduced

erosion. improved "later quality, stonnwatcr control, enhanced fish and wildlife habitat. protection of

sensitive ecosystems, and financial incentives to farmers eud landowners to implement conservation

practices.

Effective measures to reduce sediment are those that reduce eroded sediment at jhe sonrc;

,~~;~~;:: ~!:z;

sediment hitransported off site and into creeks"rivers and lakes. Examples of this approach could include

vegetative cover: storm weter management controls; best management practices for urban: agricultural

lands, and construcrion sites; and

land-use changes that will result in a net reduction of erosion potential,

Accompllsbcd to Elate

'111e implementation of various sediment reduction tools and practices such as water and sc.roucnt control

basins, stormwater detention basins, grass

waierv..sys, filter strips, stream restoration practices) riparian

corridor protection and restoration, land acquisition

and. protection and wetlands restoration have been

completed.

ofJanuary

2005~

The Piasa Creek \Vatershed Project bas addressed the erosion reductions

outlined in the following table.

Fable

11 Plnsa Creek Vlater:vhed Project acres becnl;;(itea. ercslon rsdvcttcns and strearnbank

s$;2hiH.7.::ltiun.

GUl! ' Ereslon (rons sell saved)

Lj.ll2...-J

2,009

22.147

t~I!H:m'

F:~d Stubll~b~:,~'"~l

-,,--,,;:,;c:!-''--j

Source: GRLT Status Report:

nttp://www.grcatrh:el.slandtrust.com!pcwp_stams_rcpoiij.Illt.Jary_2002.lltrn.

Ccucluslon

With the information provided in the PC\VP overview, the GRLT has provided the required elements to

comply with the conditions S;;ll forth in the rnontioncd Permit.

Ifyou would need furrher information about the Nonpoint Source Unit's role in the PCV,rp development

and implementation, fuel free to contact me.

-2-