BEFORE THE ILLINOIS POLLUTION CONTROL
BOARD
IN THE MATTER OF:
SECTION
27 PROPOSED RULES
FOR
NITROGEN OXIDE (NOx)
EMISSIONS
FROM STATIONARY
RECIPROCATING
INTERNAL COMBUSTION
ENGINES AND
TURBINES:
AMENDMENTS TO 35 ILL.
ADM. CODE PARTS 211 AND 217
R07-19
(Rulemaking -
Air)
NOTICE OF
FILING
TO: Mr. John Therriault
Assistant Clerk of the Board
Illinois Pollution Control Board
100 West Randolph Street
Suite
11-500
C
hicago, Illinois 60601
(VIA
ELECTRONIC MAIL)
Mr. Tim Fox
Hearing
Officer
Illinois Pollution Control Board
100 West Randolph Street
Suite 11-500
Chicago,
Illinois 60601
(VIA
ELECTRONIC MAIL)
(SEE PERSONS ON ATTACHED
SERVICE LIST)
PLEASE
TAKE NOTICE that I have today filed
with the Office of the Clerk of
the Illinois Pollution Control Board the COMMENTS
OF THE ILLINOIS
MUNICIPAL ELECTRIC AGENCY,
copies of which are herewith served upon you.
Respectfully submitted,
ILLINOIS MUNICIPAL
ELECTRIC AGENCY,
By: /s/ N. LaDonna Driver
N. LaDonna Driver
Dated: June 9, 2008
N. LaDonna
Driver
HODGE DWYER ZEMAN
3150 Roland Avenue
Post Office Box 5776
Springfield, Illinois 62705-5776
(217) 523-4900
T HIS FILING SUBMITTED ON
RECYCLED PAPER
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
CERTIFICATE OF
SERVICE
I, N. LaDonna Driver, the undersigned,
hereby certify that I have served the
attached COMMENTS OF
THE ILLINOIS MUNICIPAL ELECTRIC AGENCY
upon:
Mr. John Therriault
Assistant Clerk of
the Board
Illinois Pollution Control Board
100 West Randolph Street
Suite 11-500
Chicago,
Illinois 60601
via electronic filing and by depositing said documents in the United States Mail, postage
prepaid, in Springfield, Illinois, on June 9,
2008; and upon:
Mr. Tim Fox
Hearing Officer
Illinois Pollution Control Board
100 West Randolph Street
Suite 11-500
C hicago,
Illinois 60601
Rachel L. Doctors, Esq.
Illinois Environmental
Protection
1021 North Grand Avenue East
Post Office Box 19276
Springfield, Illinois 62794-9276
Agency
Renee Cipriano, Esq.
Kathleen C. Bassi, Esq.
Joshua R. More, Esq.
Stephen J. Bonebrake, Esq.
Schiff
Hardin, LLP
6600
Sears
Tower
2
33 South Wacker Drive
Chicago, Illinois 60606-6473
v ia electronic mail on June 9, 2008.
/s/
N. LaDonna Driver
N. LaDonna Driver
I MEA/Fil/NOF-COS- Comments of IMEA
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
BEFORE
THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
SECTION
27 PROPOSED RULES FOR
NITROGEN OXIDE (NOx) EMISSIONS
FROM STATIONARY RECIPROCATING
INTERNAL COMBUSTION
ENGINES AND
TURBINES: AMENDMENTS TO 35 ILL.
ADM. CODE PARTS 211 AND 217
R07-19
(Rueemaking - Air)
COMMENTS OF
THE ILLINOIS MUNICIPAL ELECTRIC AGENCY
NOW COMES the Illinois Municipal Electric Agency ("IMEA"), by one of its
attorneys, N. LaDonna Driver of HODGE DWYER
ZEMAN, and submits the following
post-hearing comments
in
the
above-referenced matter:
On March 26, 2008, IMEA submitted the Pre-Filed Testimony of Kevin L.
Wagner, who is the
Director of Engineering at IMEA. Mr. Wagner testified at the April
9,
2008 Hearing in this rulemaking. IMEA submits these comments following the
hearings on April 9, 2008
and May 7, 2008.
As discussed in Mr. Wagner's pre-filed testimony, IMEA's primary purpose is to
provide for the wholesale electric power supply
needs
of
its members, all of which are
municipally-operated
electric distribution systems within the State of Illinois. These
systems are units of local government that own, operate and maintain the electric
distribution system that serves their citizens. See Pre-filed Testimony of
Kevin
L. Wagner
at p. 2.
Mr. Wagner pointed out in his pre-filed testimony
that five member municipalities
have generation that would be impacted by the Proposed Rule: Freeburg, Highland,
Mascoutah, Waterloo and Winnetka. See Pre-Filed Testimony of
Kevin L. Wagner
at
p.
12. Each of these communities
holds Title V permits for their generation. See Pre-Filed
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
Testimony of Kevin L. Wagner at p. S. IMEA
also
owns
and operates five diesel engine
generators, each with
nameplate rating of 1825 kilowatts, that are located in the IMEA
member communities of Highland and Waterloo and are currently permitted with the
respective member's local
generation. See Pre-Filed Testimony of Kevin L. Wagner at p.
4.
The member-owned
units, along with the IMEA-owned diesels, are used in two
ways. First, they are operated for economic reasons, which typically occurs
during
periods of peak summer demand. Since peak usage typically occurs less than
10% of the
year, NOx emissions are minimal
from operation of these units during periods of peak
demand. Even when the member-owned units are not running, having them simply
available to operate helps reduce the power supply
cost for the members who would
otherwise
be at the mercy of a capacity market that is expected to experience a 6-fold
price increase over the next five years. See Pre-Filed
Testimony of Kevin L. Wagner at
pp. S
and 6.
Secondly, the member units can be used
for
system
reliability and support in the
event of a critical transmission or
sub-transmission system outage. An example of
system support is when one of the transmission system owners asks members to operate
their units to help reduce the loading of transmission grid facilities or to keep system
voltage at acceptable
levels. Unacceptably low voltage can damage customer equipment
and lead to a collapse of the power delivery system. See
Pre-Filed Testimony
of
Kevin L.
Wagner at p. 6.
These units are also particularly vital
to members who are served radially by a
single transmission line or transformer. Such
members are subject to a total power
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
outage in their communities as
a result
of
weather-related or other types of damage
to the
radial facilities. In some circumstances,
a weather-related transmission outage can
stretch for days or weeks.
If a transmission equipment failure
involves a single
substation
transformer that supplies the member, the
outage can sometimes extend
several months. These lines and transformers
must also be taken out of service
periodically for routine maintenance.
Under such circumstances, the local generation
is
the only
means of providing power to the municipal system's
customers. See Pre-Filed
Testimony of Kevin L. Wagner at p. 6.
Similarly, members with limited capacity backup
transmission lines may be
required to run local generation
for extended periods to prevent equipment overloads or
low voltage during
outages that affect their primary transmission feed. See
Pre-Filed
Testimony of Kevin L. Wagner at p. 6. As discussed
by Mr. Wagner at the first hearing,
four of the five members that would be
impacted by the Proposed Rule have transmission
circumstances such that a single outage would create difficulty in meeting load demands
due to weak backup lines. In those
circumstances, running local generation is critical to
support voltage or
prevent overloading of the backup facilities. See Transcript ofApril 9,
2008 Hearing at pp. 45 and 46.
Both economics
and reliability are of critical importance to IMEA's members.
IMEA's general concerns as to the Proposed
Rule relate to the impact on available
operation of the affected
members' generating units, both because of their peaking use
and most particularly
because of the members' concerns over their ability to operate for
system support or during transmission outages.
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
One key provision of the Proposed
Rule that addresses these concerns is Section
217.388(c). This section allows
units that would otherwise be subject
to the
Proposed
Rule's emission
requirements to be in compliance with the Proposed
Rule if they are
operated as low usage units. Low usage units
are defined in one of two ways. First, low
usage units may
take a collective federally enforceable emission
limit of 100 tons per
year of NOx. Units that qualify for an
exemption from the Proposed Rule's requirements
and units that are
complying with the Proposed Rule's
emission requirements are not
counted under this emission limit. This was confirmed
by Robert Kaleel at the first
hearing. See Transcript of April 9,
2008 Hearing at p. 20. Second, reciprocating engines
may take a federally
enforceable limit of 8 million brake horsepower-hours
annually in
the aggregate and turbines may take a federally enforceable
limit of 20,000 Megawatt-
hours annually in the
aggregate. This second low usage option allows a site
with both
reciprocating engines and turbines to operate the
reciprocating engines up to the 8 million
brake horsepower-hours
limit and the turbines up to the 20,000 Megawatt-hours
annual
limit and still be considered low usage units.
This was confirmed by Robert Kaleel at the
first hearing. See Transcript of April
9, 2008 Hearing at pp. 20-22.
IMEA
must note that while the low usage provision is an
important compliance
option, it will, in some cases, impose severe restrictions upon
the members' units as
currently permitted. Many of the
IMEA members' units, particularly the older units, will
be
forced to operate as low usage units, because it is economically
not feasible to modify
these units to comply with the emission
requirements of the Proposed Rule, particularly
given that these units operate sporadically. See
Pre-Filed Testimony of Kevin L. Wagner
at pp. 8 and 9. Mr. Wagner explained,
at the first hearing, that each of the members that
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
would be
impacted by the Proposed
Rule has units that would likely exceed
the Proposed
Rule's emission standards.
See Transcript ofApril
9, 2008 Hearing at p. 47. As set
forth
in some detail in Mr. Wagner's pre-filed
testimony, even with the
low usage option,
certain members'
capacity may have to be reduced
to below 3%. See Pre-Filed
Testimony
of Kevin L. Wagner at
pp. 9 and 10.
IMEA has expressed concern
that this cut in capacity may have dire
consequences
in the rare circumstance
that a low usage limit would
need to be exceeded in response to
an emergency situation. Such an emergency
would include interruptions of wholesale
power deliveries from
the transmission grid due to natural disasters,
system maintenance
or other events beyond the control
of the member. See Pre-Filed Testimony of Kevin
L.
Wagner at p. 11.
This concern has been addressed by
Section 217.392(c), which provides that
any
affected unit may, under certain circumstances
specified in the Proposed Rule, use
NOx
allowances to meet
the compliance requirements in Section
217.388. This option is
available to IMEA's members in the event
such member is required to operate in
exceedance of its emission
limits or its annual low usage limits due to a system
emergency,
and the NOx allowance provision
has not been utilized for more than two
events in any rolling five-year period.
The NOx allowance provision may be utilized
for
low usage units
that are under the 100 ton/year
NOx emission limit, as well as those units
utilizing the low usage operating
hours limits. For those units using the operating
hours
low usage limits, the
hours exceedance would be converted to a
corresponding amount of
NOx emissions
that may then be compensated
for in NOx allowances.
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
The NOx allowance component
is crucial for IMEA's members to maintain
system
reliability. The low usage compliance option would simply not be workable
without the NOx allowance provision. IMEA's members would not be able
to limit their
units under the low usage designation
without the flexibility to operate as needed in an
emergency
situation. Further, the NOx allowance option inherently assures that any
impact caused by the limit exceedance is addressed
by retiring the corresponding amount
of emissions
from the NOx allowance market. See Pre-Filed Testimony of
Kevin L.
Wagner at pp. 11 and 12.
There
was some discussion at the first hearing regarding the use of NOx
allowances in this context, specifically as to local controls versus regional reductions.
See Transcript of April 9, 2008 Hearing at pp. 52-54. Note that the
Proposed
Rule does
not rely on
NOx allowances for required reductions. In other words, purchasing or
holding NOx allowances is not a compliance option under Subpart Q, as affected sources
must either meet emission
limits on a unit basis, average units together to meet collective
emission limits, or accept a low usage emission or operating
hour cap. Rather, Proposed
Section 217.293(c) simply
provides a mechanism to compensate for infrequent
difficulties with the Proposed Rule's emission or operating hour limits.
In addition, even where sources participate in NOx trading as a primary
compliance tool, USEPA
has stated that such an approach may satisfy NOx RACT
requirements. See Final Rule to Implement the 8-Hour Ozone National Ambient Air
Quality Standard; Final Rule, 70 Fed. Reg. 71656-71658 (November
29, 2005).
See also
Phase 2 of the Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality
Standard- Notice of Reconsideration,
72 Fed. Reg. 31730-31737 (June 8, 2007),
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
wherein
USEPA
stated that the
term "reasonable" in "RACT" "may be construed
to
allow consideration
of the air quality impact of
required emissions reductions from
region-wide cap-and-trade programs such as the
CAIR NOx trading program." 72 Fed.
Reg at 31730. Thus, merely utilizing
NOx allowances, even regionally, as compensation
for infrequent
exceedances of the Proposed Rule's control requirements, should
not run
afoul of the RACT concept.
Mr. Wagner's
pre-filed testimony documented the historically
low average NOx
emissions from IMEA's members. See Pre-Filed
Testimony of Kevin L. Wagner at p. 12.
Though IMEA's actual
peaking generator usage may be very low, the critical
reliability
concerns that directly affect the health and safety
of IMEA's member communities make
it essential that those communities nonetheless
maintain the ability to operate, and
subsequently emit
NOx, for much greater periods of time during critical outages.
Consequently, provisions for low usage designations, and the use of
NOx allowances if
unforeseen circumstances occasionally
require exceedances of limits, are considered to
be
absolutely essential to any Rule under which IMEA's
members could operate.
IMEA has not challenged the
Illinois Environmental Protection Agency's
("IEPA") approach for this Proposed Rule, either
in terms of applicability, control
requirements or projected compliance costs.
IMEA's position in this regard is based
solely on the ability of
its members to comply with the Proposed Rule via Sections
217.388(c) and 217.392(c). IMEA strongly urges the Illinois Pollution Control
Board to
retain these provisions, as proposed by IEPA, when
proceeding to First Notice.
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
We appreciate the
opportunity
to participate in this proceeding.
Respectfully submitted,
By: /s/ N. LaDonna Driver
N. LaDonna Driver
Dated: June 9, 2008
N. LaDonna Driver
HODGE DWYER ZEMAN
3150 Roland Avenue
Post Office Box 5776
Springfield,
Illinois 62705-5776
(217) 523-4900
I MEA:001/Fil/NOx Rule IPCB Comments - Post Hearing Comments
Electronic Filing - Received, Clerk's Office, June 9, 2008
* * * * * PC #2 * * * * *
