BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN
ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY, AND ELECTRIC
ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
Respondent.
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(Variance
PCB 09-
--
- Air)
NOTICE OF FILING
To:
John Therriault, Assistant Clerk
Illinois Pollution Control Board
James
R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
Illinois Environmental Protection Agency
Division
of Legal Counsel
1
021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
y Antonlolh
Dated: October
/
,2008
PLEASE TAKE NOTICE that we have today electronically filed with the Office ofthe
Clerk
of the Pollution Control Board PETITION FOR VARIANCE, AFFIDAVIT OF
MICHAEL L. MENNE, and APPEARANCES OF RENEE CIPRIANO, KATHLEEN C.
BASSI, AND AMY ANTONIOLLI,
copies of which are herewith served upon you.
~
Renee Cipriano
Kathleen C. Bassi
Amy Antoniolli
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
CERTIFICATE OF SERVICE
I, the undersigned, certify that on this
I~
day of October, 2008, I have served
electronically the attached
PETITION FOR VARIANCE, AFFIDAVIT OF MICHAEL L.
MENNE, and APPEARANCES
OF RENEE CIPRIANO, KATHLEEN C. BASSI, and
AMY ANTONIOLLI, upon the following persons:
John Therriault, Assistant Clerk
Illinois Pollution Control Board
James
R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
and
by first class mail, postage affixed, upon:
Illinois Environmental Protection Agency
Division
of Legal Counsel
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
~y
Antonlolh
Renee Cipriano
Kathleen C. Bassi
Amy Antoniolli
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
SERVICE LIST
(PCB~
Mr. Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
James
R. Thompson Center
100 West Randolph Street, Suite 11-500
Chicago, Illinois 60601
hallorab@ipcb.state.il.us
Sally Carter
Robb Layman
Division
of Legal Counsel
Illinois Environmental Protection Agency
1021 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
sally.carter@illinois.gov
robb.1ayman@illinois.gov
and
by first class mail, postage affixed, to the persons listed on the
ATTACHED SERVICE
LIST.
CH2\2736970.1
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY,
AMERENENERGY RESOURCES
GENERATING COMPANY, AND ELECTRIC
ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
Respondent.
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PCB 09-
--
(Variance - Air)
APPEARANCE
I, Renee Cipriano, hereby file my appearance in this proceeding on behalf of Petitioner,
Ameren Energy Generating Company, AmerenEnergy Resources Generating Company, and
Electric Energy, Inc.
enee Cipriano
Schiff Hardin LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
rcipirano@schiffhardin.com
Date<4: October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY, AND
ELECTRIC
ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
Respondent.
)
)
)
)
)
)
)
)
)
)
)
)
)
PCB 09-
--
(Variance - Air)
APPEARANCE
I, Kathleen C. Bassi, hereby file my appearance in this proceeding on behalf of Petitioner,
Ameren Energy Generating Company, AmerenEnergy Resources Generating Company, and
Electric Energy, Inc.
---+--Hf,~~~(k'
-
~c.Bassl
Schiff Hardin LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
kbassi@schiffhardin.com
Dated: October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY, AND ELECTRIC
ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
Respondent.
)
)
)
)
)
)
)
)
)
)
)
)
)
PCB 09-
--
(Variance - Air)
APPEARANCE
I, Amy Antoniolli, hereby file my appearance in this proceeding on behalf of Petitioner,
Ameren Energy Generating Company, AmerenEnergy Resources Generating Company, and
Electric Energy, Inc.
Antonlolh
ScnlffHardin LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
aantoniolli@schiffhardin.com
Dated: October /
, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY
RESOURCES GENERATING COMPANY,
AND ELECTRIC ENERGY, INC.,
Petitioners,
v.
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Respondent.
)
)
)
)
)
)
)
)
)
)
)
)
)
PCB 09-
--
(Variance - Air)
PETITION FOR VARIANCE
NOW COME AMEREN ENERGY GENERATING COMPANY, AMERENENERGY
RESOURCES GENERATING COMPANY, and ELECTRIC ENERGY, INC. (collectively,
"Ameren" or "Petitioners"),
by and through their attorneys, SCHIFF HARDIN, LLP, and,
pursuant to Sections 35 and 37
of the Environmental Protection Act, 415 ILCS 5/35, 37, ("Act")
and 35 Il1.Adm.Code Part 104, Subpart
B, request that the Board grant Petitioners a variance
from a provision
of the Illinois Multi-Pollutant Standard ("MPS"), 35 Il1.Adm.Code § 225.233,1
for the period beginning January 1,2013, through December 31,2014. Despite the Board's
usual practice, the provisions
of the regulations from which Petitioners here seek relief require
that Ameren seek this relief on a system-wide basis, rather than on a power station-by-power
station basis. Ameren will suffer arbitrary or unreasonable hardship
if the Board does not grant
this requested variance.
1
Hereinafter, citations to the Board'sregulations will be by section number only.
-1-
October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Specifically, Ameren seeks a variance from only one of many components of the MPS.
Section 225.233(e)(2)(A) establishes an emissions rate for sulfur dioxide ("S02") that is, in
reality, an interim or mid-point rate
of 0.33 Ib/mmBtu
2
in 2013 and 2014, with the ultimate or
final emission rate ofO.25Ib/mmBtu required for 2015 and thereafter.
Ameren has sought several variances in the last
10 years, but they all concerned water
pollution control issues.
3
Ameren has never sought a variance from Section 225.233(e)(2)(A).
In support
of its petition, Petitioners state as follows:
A.
AMEREN GENERATES ELECTRICITY IN ILLINOIS AT SEVEN COAL-
FIRED POWER STATIONS.
1.
Ameren owns and operates seven coal-fired power plants for the generation of
electricity in several locations in downstate Illinois. These plants are the Coffeen Power Station
located in Montgomery County, the Duck Creek Power Station located in Fulton County, the
E.D. Edwards Power Station located in Peoria County, Joppa Power Station located in Massac
County, the Hutsonville Power Station located in Crawford County, the Meredosia Power Station
located in Morgan County, and the Newton Power Station located in Jasper County.
See
Ex. 1, a
map depicting the power stations' locations. All
of these counties are designated attainment for
2 Section 225.233(e)(2)(A) provides that MPS sources must comply with an S02
emission rate
of 0.33 pounds per million British thermal units ("lb/mmBtu") or 44% of its
baseline, whichever is more stringent. In Ameren's case, the 0.33 Ib/mmBtu is the more
stringent requirement and that is the rate that is discussed in this Petition.
3 The Board granted Ameren variances under the following dockets: PCB 99-21
(December 17, 1998) (Duck Creek Power Station, from the water quality standards for boron at
Section 302.208), and PCB 01-16 (November 16,2000) (Grant Tower Power Station from the
total boron limits and water quality standards
of Sections 302.208 and 304.105). In 1999 and
2007, Ameren has also received two provisional variances from the Board, also related to water
pollution control issues.
-2-
October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
all pollutants.
See
USEPA's Green Book (list of national attainment and nonattainment
designations) at
<
http://www.epa.gov/oar/oagps/greenbkl >.
2.
The Agency maintains a comprehensive, state-wide network
of air quality
monitoring stations. Exhibit 1 is a copy
of the map included in the Agency's
Illinois Annual Air
Quality Report 2006
at page 34 providing the locations of the air quality monitoring stations.
Ameren has superimposed the locations
of its power stations on this map to illustrate their
positions relative to the monitoring stations.
3.
The principal emissions at
Ameren's coal-fired power plants are S02, nitrogen
oxides ("NOx"), and particulate matter ("PM").
S02 is currently generally controlled through
the use
of low sulfur coal or blending low sulfur coal with Illinois coal containing higher levels
of sulfur. There is an existing scrubber (flue gas desulfurization - "FGD") at Duck Creek that is
being upgraded and replaced with a
wet FGD. This retrofit will be in service no later than 2010.
Additionally, the Agency has issued construction permits for the Coffeen Power Station for the
installation
of two FGDs, also scheduled to go online by 2010. FGDs at other stations are
expected to
be online by 2015 to comply with the 0.25 Ib/mmBtu emission rate but will be
staggered in time. So these other FGDs will actually go online at various times between 2010
and 2015 and will significantly improve
Ameren's system-wide S02 emission rate prior to and
during the pendency
of the requested variance. NOx emissions are generally controlled by
various combinations of low sulfur coal, low NOx burners, over-fire air, and selective catalytic
reduction systems ("SCRs").
PM is generally controlled through the use of flue gas conditioning
and electrostatic precipitators.
The addresses of the seven power stations, their Agency
identification numbers, permit application numbers, and other pertinent information regarding
-3-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
their output, pollution control equipment, and S02 emissions are provided in Table 1, attached to
this Petition. Ameren employs approximately 985 persons at these seven power stations.
B.
AMEREN SOUGHT THE MPS IN 2006 SPECIFICALLY TO COORDINATE
EMISSION CONTROL DECISIONS IN ACCORDANCE WITH A
REASONABLE
VIEW OF FUTURE REGULATORY REQUIREMENTS.
4.
In May 2005, the U.S. Environmental Protection Agency ("USEPA")
promulgated regulations requiring reductions
of emissions of S02 and NOx in the Clean Air
Interstate Rule ("CAIR") to address ozone and fine particulate ("PM2.5") nonattainment areas,
70 Fed.Reg. 25162 (May 12,2005), and
of mercury emissions in the Clean Air Mercury Rule
("CAMR"), 70 Fed.Reg. 28606 (May 18, 2005). The CAIR included most
of the eastern United
States as well
as several states west of the Mississippi River, while the CAMR applied to the
lower 48 states. Both
of these rules applied to coal-fired electric generating units ("EOUs")
serving generators with nameplate capacities greater than 25 megawatts ("MW,,).4 Both
of these
programs established caps on emissions
of certain pollutants for each affected state and provided
that the states could choose to participate in USEPA-administered emissions trading programs
if
their state programs met certain minimum requirements. Ameren's coal-fired EOUs are the type
of units that were impacted by these federal programs.
5.
By January 2006, the Illinois Environmental Protection Agency ("Agency") had
commenced outreach regarding its intended regulatory proposals to satisfy these federal
requirements with the Illinois EOUs and other interested parties. The Board subsequently
adopted the Illinois mercury rule at R06-25 (December 21, 2006) and the Illinois CAIR at R06-
26 (August 23, 2007) in substantively the same form
as initially proposed, with one major
4 The CAIR applied more generally to fossil fuel-fired EOUs, while the CAMR was
limited in applicability to just coal-fired EOUs.
-4-
October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
exception in each rule: the addition of the MPS to the Illinois mercury rule and of the Combined
Pollutant Standard to the Illinois CAIR. The rules that the Board adopted differ significantly
from the federal rules in two very important ways. First, the Illinois mercury rule is a command-
and-control approach, requiring a 90% reduction from input mercury from affected coal-fired
power plants,
S
and eschews participation in the federal trading program. Second, although
Illinois remained in the NOx and S02 trading programs administered
by USEPA, the Illinois
CAIR includes a Clean Air Set-Aside ("CASA")
of25% of the statewide emissions cap. The
CASA allowances were not removed from the overall trading pool but were intended to
incentivize projects that would improve efficiency, result in early reductions, or have other
environmental benefits. The effect
of the CASA was to make the CAIR requirements in Illinois
more stringent than the federal rule and most other states' CAIRs, because the CASA allowances
were removed from the pool
of allowances for Illinois EGUs. Illinois EGUs were eligible under
only some
of the various CASA incentive programs, limiting the opportunity for the EGUs to
regain allowances from the CASA.
6.
In evaluating its environmental compliance strategy and the technology available
for mercury compliance and for monitoring that compliance in 2006 when the Agency was
conducting its outreach and the rules were pending before the Board, Ameren determined that it
made the most sense for it to attempt to partner with the Agency
on a more comprehensive
approach to the Illinois mercury rule that would address mercury in coordination with other
known air emission regulatory requirements, notably the CAIR, including use
of potential co-
benefit emission control technologies that reduce not only mercury but also
NOx and/or S02.
While recognizing and accepting that the injection
of halogenated powdered activated carbon can
5 That is, those with nameplate capacities greater than 25 MWe.
-5-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
reduce mercury emissions, even in light of the Agency's claims that injection of halogenated
sorbents would sufficiently reduce mercury, Ameren did not believe that considerably high
levels
of mercury removal at all units could be achieved in the short run or that the reductions
could be measured sufficiently accurately to assure compliance with the mercury emission
limitations. Noncompliance - or even the possibility
of noncompliance - was not an option.
7.
Even though the Illinois CAIR program opted in to the federal emissions trading
programs, Ameren determined that compliance with the Illinois CAIR would require the
installation
of various combinations of pollution control equipment. The pollution control
equipment necessary to reduce NOx emissions,
i.e.,
SCRs and selective non-catalytic reduction
equipment ("SNCRs"), and S02 emissions,
i.e.
FGDs, for the CAIR, as well as baghouses for
PM2.5 control, also enhance a source's ability to reduce mercury and, therefore, enhance
Ameren's ability to ensure compliance with Illinois' very strict mercury emissions limitations.
Since these technologies were necessary for Ameren to comply with both the CAIR and the
Illinois mercury rule, Ameren deemed it essential for it to be able
to coordinate the two
regulatory requirements. However, the equipment could not be installed
by July 1, 2009, the
compliance date for the mercury rule.
8.
For these reasons, then, Ameren approached the Agency with a proposal that was
reflected eventually in the MPS adopted
by the Board as part of the Illinois mercury rule at
Section 225.233.
6
Ameren, indeed, opted in to the MPS on December 27,2007,
see
Ex. 2, and
6 The MPS is a rule of general applicability, available to any of the Illinois coal-fired
generation companies who chose to take advantage
of its provisions. Nevertheless, it was the
result
of negotiations between Ameren and the Agency and was born from Ameren's analysis of
foreseeable regulatory requirements, the interrelationship and need for coordination between
mercury, NOx, and S02 control planning, and its resulting business plan.
-6-
October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
became subject to the NOx and S02 provisions of the MPS at that time.
7
9.
The MPS requires Ameren to install and operate sorbent injection systems or
SCR/FGD systems but extends the deadline for Ameren to demonstrate compliance with the
900/0 mercury reduction requirement until 2015. The MPS also establishes strict, declining
emissions limitations for NOx and S02 over a period
of time, including a system-wide S02 limit
of 0.33 Ib/mmBtu in 2013, declining to a rate of 0.25 Ib/mmBtu in 2015, and precludes trading of
any excess NOx and S02 allowances that result of the installation and operation of the pollution
control equipment necessary for it to meet the applicable emissions limitations. That is, because
the MPS restricts the emissions trading otherwise available under the CAIR, Ameren must install
and operate pollution control equipment, as discussed above, and cannot rely on allowance
purchases as a planning
or timing tool.
10.
In order to meet the emission reduction objectives of the MPS, Ameren must plan
for and finance the purchase the necessary pollution control equipment. Since the MPS requires
compliance with specified emissions rates, Ameren does not have the flexibility available to non-
MPS companies to delay this equipment planning and financing through purchases
of allowances
to satisfy its compliance obligations until the financial, labor, and equipment markets are more
advantageous or Ameren's own financial position is better. The procurement process for these
significant pollution control devices is approximately four years. Ex. 3,
p. 5. For example, in
order for Ameren to comply with a significantly reduced S02 emission limit in 2013, it must
7 Ameren'sMPS Group included units owned or operated by Ameren Energy Generating
Company, AmerenEnergy Resources Generating Company, and Electric Energy, Inc., all
subsidiaries
of Ameren Corporation. The units of all of these subsidiaries of Ameren
Corporation were required
to be included in a single MPS group by Section 225.233(a)(2). At
the seven power plants owned and operated
by Ameren are 21 individual EGUs that comprise
the MPS Group.
-7-
October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
commence its procurement process in mid-2008. The initial phases of Ameren'sprocurement
process involve internal development
of the project, including conceptual engineering, necessary
for obtaining management approval to proceed. Once management has approved the project,
Ameren'sprocurement process extends to agreements that involve securing funding and
contracting with consultants who will help with the pennitting process and will do the detailed
engineering. These steps can take more than two years.
The pennitting process must be
completed and a construction pennit issued before any actual construction can commence.
Ameren estimates six to nine months for the pennitting process alone. The estimated time for
construction, tie-in, and commissioning, startup, and testing
of an FGD is approximately three
years. From concept to online operation, the period is approximately four and one-half years.
C.
THE VACATURS OF THE CAMR AND PARTICULARLY THE CAIR HAVE
CREATED CONFUSION, UPHEAVAL, AND UNCERTAINTY SUCH THAT
WHAT APPEARED REASONABLE IN 2006 IS NO LONGER SO.
11.
In February 2008, the U.S. Court of Appeals for the District of Columbia ("D.C.
Circuit") vacated the CAMR.
See State ofNew Jersey
v.
Environmental Protection Agency, 517
F.3d 574 (D.C. Cir. 2008). The court determined that USEPA had erred in the methodology it
had used to remove EGUs from the list
of sources subject to the maximum available control
technology (MACT) requirements
of the Clean Air Act. Several parties filed for rehearing of
this decision; however, these petitions were denied in May 2008.
New Jersey,
Docket No. 05-
1097 (consolidated), Orders (May 20, 2008). The deadline for filing petitions for certiorari with
the U.S. Supreme Court is October 17, 2008.
See
http://origin.www.supremecourtus.gov/
docket/08aI17.httn.
12.
On July 11, 2008, the D.C. Circuit vacated the federal CAIR.
See State ofNorth
Carolina
v.
Environmental Protection Agency,
--- F.3d ---, 2008 WL 2698180 (C.A.D.C. 2008).
-8-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
The court found that the CAIR contained so many flaws that it was not possible for the court to
merely remand the rule.
North Carolina,
2008 WL 2698180, pp. *1, *58-*59. In its decision,
the court found that USEPA does not have the authority to terminate
or alter Title IV
8
allowances.
North Carolina,
2008 WL 2698180, p. *45. Under Title IV, USEPA issues
allowances pursuant to the Acid Rain Program. Acid Rain sources, such as all of Ameren's
EGUs, are required to surrender an allowance for each ton of S02 it emits. The CAIR S02
program was piggy-backed onto the Acid Rain Program, and sources were required to surrender
Acid Rain allowances at a rate greater than required
by the Acid Rain Program. The court
likewise found errors in USEPA's methodology for determining how states' emissions affected
downwind nonattainment and maintenance areas and the state emissions caps. The "relief'that
the court granted with respect to CAIR
NOx exceeded that requested by any party. The vacatur
of the entire CAIR has resulted in tremendous upheaval and uncertainty for both states and the
regulated community. Petitions for rehearing
of the CAIR vacatur were due August 25,2008,
but USEPA has petitioned for an extension of that deadline; the D.C. Circuit granted the motion
for extension on August 15, 2008. Ex. 4. USEPA and three intervenors filed petitions for
rehearing on September 24, 2008.
9
13.
The vacatur of the federal CAIR means that the Illinois CAIR at 35 Ill.Adm.Code
225.Subparts C, D, and E is invalid. The Illinois CAIR had as its purpose the control of S02 and
NOx emissions from EGUs through implementation of and participation in the federal CAIR
trading programs.
See
35 Ill.Adm.Code §§ 225.300, 225.400, and 225.500. The NOx Budget
8 Title IV of the Clean Air Act: 42 U.S.C. §§
7651-76510.
9 Ameren does not know, as of the date of filing, whether any other parties filed petitions
for rehearing.
-9-
October 1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Trading Program, codified in Illinois at 35 Ill.Adm.Code 217.Subpart W, remains intact,
North
Carolina,
2008 WL 2698180, pp. *59-*60, as neither the Board nor the Agency has taken any
action, to Ameren'sknowledge, to suspend or repeal the provisions
of Subpart W. However, the
loss
of the Illinois CAIR also means the loss of the CASA.
14.
Ameren expected to qualify under the CASA for a number
of allowances that
would have helped to offset the cost
of the control equipment that Ameren is installing. These
projects included FGDs sufficient to scrub nine or 10 units and SCRs and SNCRs on selected
units. All
of these projects would have been eligible for allowances from the CASA in the early
adopter category pursuant to Section 225.460(f) and would have been eligible for allowances for
a period
of 10 years pursuant to Section 225.470(d)(2). These allowances could have been used
to defray compliance costs or capital expenditures.
lO
15.
Ameren is currently evaluating the impact of these decisions on its environmental
compliance strategy, including its estimated environmental capital costs. The purpose
of this
evaluation
of multiple power plant locations and compliance strategies within Ameren's electric
generation fleet is to identify the optimal locations for capital investment consistent with the goal
of making smart capital investment decisions while maintaining operational flexibility within a
competitive energy market. Clearly, the climate has changed since 2006. At this point in time,
Ameren is unable to predict the outcome
of the legal proceedings following on the CAMR and
CAIR vacaturs. The vacaturs have also elevated the speculation that Congress may directly
address these trading programs,
see, e.g.,
Ex. 3, pp. 3-4; 5; 6, though the timing is not at all
10
Had Ameren received the maximum number of allowances available, it could have
realized as much as $3.8 million per year through 2014 and $3.2 million per year for the
remaining years in the 10-year period for which they would have been eligible, assuming a value
of $2,500/NOx allowance.
-10-
October
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Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
certain, particularly given the fact that this is an election year, Exs. 26, 27, 28. States are in
turmoil, and the National Association
of Clean Air Agencies is apparently drafting a model rule
for states to use to address the issue. Ex.
7. Finally, the State of North Carolina has asked the
D.C. Circuit for expedited briefing on its appeal
of USEPA's denial of its Clean Air Act Section
126 petition to address interstate pollution transport, 42 U.S.C. § 7426(b), since USEPA'sdenial
was based in large measure on the CAIR program. The prospect that USEPA could become
obligated to issue Section 126 rules for the reduction
of NOx and S02 in the near future looms.
16.
What is clear is that the Agency must evaluate the impact of the D.C. Circuit's
vacatur
of the CAIR on its ability to demonstrate attainment of the ozone and PM2.5 national
ambient air quality standards ("NAAQS") and its state implementation plan ("SIP") addressing
visibility or haze. Like most states in the CAIR region, the Agency relied or planned to rely on
the CAIR for a large part
of its attainment demonstration and visibility SIPs. Illinois has
submitted to USEPA its visibility SIP and its ozone attainment demonstration for the Metro-East
ozone nonattainment area, but their validity, particularly that
of the visibility SIP, is now in
question. The Agency has yet to submit its ozone attainment demonstration for the Chicago
nonattainment area or its PM2.5 attainment demonstrations for both nonattainment areas. The
Agency was relying on the CAIR particularly for the PM2.5 attainment demonstrations. Ameren
understands that the Agency, through the Lake Michigan Air Directors Consortium (LADCO) is
planning modeling that excludes CAIR reductions. However, it is not yet clear what the results
are or how the Agency will
be able to implement the results.
17.
Adding to the levels of uncertainty surrounding the ozone and PM2.5 NAAQS,
USEPA lowered the ozone NAAQS to 0.750 ppm (8-hour standard) in March 2008.
73 Fed.Reg.
16436 (March 27,2008). Illinois must submit attainment/nonattainment designations
by
-11-
October
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March 12, 2009. 42 U.S.C. § 7407(d)(1)(A); 73 Fed.Reg. at 16503. The attainment date for the
new ozone standard depends upon the classification
of nonattainment and must conform with the
schedules set forth in Section
181 of the Clean Air Act.
ATA
v.
Whitman,
531 U.S. 457 (2001).
This will require, at the least, federal guidance to
be published in the
Federal Register.
Illinois'
attainment demonstration is due by March 12,2011. 42 U.S.C. § 7410(a)(I); 73 Fed.Reg. at
16503. Ameren is not aware
of any timeframes for this guidance or federal rulemaking.
However, given the most recent ambient ozone levels in Illinois readily available to the public,
see
Ex. 8, Ameren can speculate that the current ozone nonattainment areas may again be
classified as marginal or moderate nonattainment, which makes the attainment date three or six
years after designation,
or 2013 or 2016, depending upon the classification. 42 U.S.C. §
7511(a)(I). Potentially, Illinois will require additional precursor reductions to meet this new
standard, but it is not at all clear what those additional requirements will be, when they will
be
required, and whom they will affect. Moreover, some states have formally requested that
USEPA enter into a dialogue with them regarding a new multi-state approach to address
transport
of criteria pollutants or precursors.
See
Ex. 9.
It
is unclear what that dialogue,
if
it
occurs, will require
of companies such as Ameren; given the pollutants identified in Ex. 9,
however, it is certain to include companies such as Ameren.
18.
USEPA also revised the 24-hour standard for PM2.5 as the Board was in the
process
of adopting of the Illinois mercury rule. 71 Fed.Reg. 61144 (October 17, 2006).
According to an August 18, 2008, letter to Governor Blagojevich, USEPA intends to promulgate
designations
by December 18,2008. Ex. 10. Attainment demonstrations are due by October 17,
2009. 42 U.S.C. § 7410(a)(I). The Agency has proposed that the PM2.5 nonattainment areas
remain the same as they are under the "old" PM2.5 NAAQS. Ex. 11, p.
1.
Ameren is unaware of
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the Agency'splans regarding measures that might be necessary for it to make that attainment
demonstration.
Of additional concern, however, USEPA has requested further information from
the Agency regarding operations at Ameren'sJoppa Power Station Power Station,
as the
Paducah-Mayfield Combined Statistical Area contains a monitor with a design value
of 36
Jlg/m
3
:
1
Ex. 11, pp. 11-16. This Combined Statistical Area includes Massac County where
Ameren'sJoppa Power Station Power Station is located.
IfUSEPA were to proceed with this
designation, this would
be an entirely new nonattainment area for Illinois. Ameren cannot begin
to predict how the Agency would address nonattainment in Massac County.
19.
Ameren believes that Illinois' mercury rule is generally not affected by the
vacatur
of the CAMR, because Illinois' rule did not rely on any of the provisions of the CAMR
for its authority. Rather, the Board adopted a mercury rule that forced the Agency to have to
take additional steps
to demonstrate to USEPA that it was sufficient to meet the state'smass
mercury emissions cap. The monitoring provisions are affected, and Ameren believes that there
are a couple elements
of the MPS that are affected, including the allowance surrender
requirements; otherwise, though, the Illinois mercury rule is intact.
20.
Prior
to the vacatur of the CAIR, Ameren had estimated that its capitals costs of
compliance with the Illinois CAIR, the Illinois mercury rule (including the MPS), Illinois'
requirements to address visibility, and Illinois' requirements to address attainment
of both the
ozone and PM2.5 NAAQS, based on current technology, would
be $500 million in 2008, $1.595-
2.060 billion in 2009-2012, $135-190 million in 2013-2017, for a total of$2.230-2.750 billion
by
2017. Ameren is reviewing the timing and ultimate amount of the capital costs, given the
11 The "new" 24-hour PM2.5 NAAQS is 35
Jlg/m
3
•
71 Fed.Reg. 61144 (October 17,
2006).
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vacaturs. These estimates could change depending upon additional federal or state requirements,
the ultimate outcome
of any appeals relative to the CAIR and CAMR vacatur, new technology,
or variations in costs
of material or labor, among other reasons.
21.
The financial ramifications
of the vacaturs of the CAIR and CAMR have been
exacerbated in recent weeks
by the tumultuous events on Wall Street. The implications of the
necessity
of the federal government to step in and provide unprecedented support to key financial
institutions and the economy, as the Board is aware, reverberate throughout all business sectors.
Although it was becoming clearly more difficult to obtain financing
of very large projects such
as those described above prior to the events of mid-September, uncertainty surrounding
financing has increased substantially. Ameren is convinced that it must proceed cautiously with
large capital projects in order to maintain financial flexibility and the integrity
of the generation
system essential to preserving Illinois' economy and, hence, Illinois jobs.
D.
SINCE ADOPTION OF THE MPS IN 2006, IT HAS BECOME INCREASINGLY
LIKELY THAT THERE WILL BE SOME FORM FEDERAL AND PERHAPS
REGIONAL REGULATION OF GREENHOUSE GASES, CREATING
ADDITIONAL UNCERTAINTY WITH HUGE COMPLIANCE AND
FINANCIAL
IMPLICATIONS.
22.
In April 2007, the U.S. Supreme Court determined that USEPA has the authority
to regulate carbon dioxide
("C0
2
") and other greenhouse gases ("GHGs") from automobiles as
"air pollutants" under the Clean Air Act.
Massachusetts
v. Environmental Protection Agency,
127 S.Ct. 1438 (2007). The Supreme Court remanded the case to USEPA, which must conduct a
rulemaking process to determine whether GHGs contribute
to climate change "which may
reasonably be anticipated to endanger public health or welfare."
Massachusetts,
127 S.Ct. at
1460, 1462. In July 2008, USEPA issued an advance notice
of proposed rulemaking ("ANPR")
in response to the Supreme Court'sdirective.
73 Fed.Reg. 44354 (July 30, 2008). The ANPR
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addresses GHG controls not only on mobile sources, the subject of
Massachusetts,
but also on
stationary sources. In the preface to the ANPR, USEPA expressed a concern that the Clean Air
Act is ill-suited for this purpose and would result in a convoluted and ineffective set
of
regulations. Nevertheless, there is great pressure on and by Congress to address GHGs and for
USEPA to do something to regulate GHGs. New regulations resulting from the rulemaking
process are not expected this year, but USEPA could begin to regulate GHGs at some point in
the future. Likewise, there is a general expectation that Congress will act in some fashion sooner
rather than later, and both Presidential candidates have pledged to enact a GHG regulatory
program.
If Congress fails to act, the Supreme Court in
Massachusetts
says that USEPA must
act.
23.
The greatest uncertainty that coal-fired power generators face today is how and
when they will
be regulated to address climate change. Most electric generation companies
today, Ameren included, do not doubt that shortly there will be some form
of climate change-
related regulation to which they will be subject. The questions for them as they diligently plan
for the future are how they will be regulated and when that will occur. The cost
of compliance
with a GHG regulatory program will likely dwarf every environmental control requirement to
date. Merchant plant companies like Ameren's Illinois plants face even greater uncertainty
because they cannot assume they will recover their GHG compliance costs through rates paid
by
users; rather, they must remain competitive in the market. Thus, GHG regulation will force
major decisions that were neither necessary nor anticipated even two years ago, and those
decisions could change the entire face
of the electric generation industry. Ameren has a
responsibility and a duty to its customers, employees and stockholders to address these changes
in the most efficient manner possible. This means that Ameren must, first
of all, comply with
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whatever requirements become applicable. That compliance, however, must reflect the most
cost-effective approach achievable while maintaining the levels
of generation necessary to
support the grid.
24.
Legislation regarding GHGs and climate change are subject to active
consideration in the
u.s. Congress. In January 2008, there were 12 pieces of climate change
legislation pending in Congress.
See
Ex. 12, second page;
see also
Exs. 13 and 14. The scope of
these bills run the gamut of limiting equivalents of metric tons of carbon dioxide ("C0
2e
")
emitted from approximately 6,000 million metric tons ("mmt") C0
2e
to approximately 2,000
mmt
C0
2e
in 2050. Exs. 12, 13. Most of them either provide or have merely as a goal some
recognition or credit for early GHG reductions or their equivalents that the anticipated regulated
community implement before 2012.
12
The Lieberman-Warner Bill
13
seems to have received the
greatest amount
of attention and analysis. A very briefoverview of the Lieberman-Warner Bill
is included on the third page
of Ex. 12, and a more complete review of the bill by the Energy
Information Association, a U.S. government agency, is included in Ex.
15. Another good
summary
of the Lieberman-Warner Bill is included in Ex. 16.
25.
The U.S. Senate is currently considering legislation proposed by Senators
Lieberman, Warner, and Boxer, described
as a combination of the Lieberman-Warner Bill,
Senator Boxer'sproposal, and several others, Ex. 17,
p. 2, that would set up a cap and trade
program for GHGs.
See
Ex. 18 for a schematic drawing of the provisions of the Lieberman-
Warner Bill amended
by the Boxer Bill. That legislation was withdrawn by the Senate
12 Obviously, there is a big difference between a definite provision for pre-2012 credit
and a mere goal
to provide credit.
13 Often referred to in publications as "L-W."
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leadership earlier this year after failure to achieve closure, and many speculate that further action
on climate change legislation in the Senate is not likely this calendar year. Ex. 17,
p. 1.
However, it is notable that in 2008 for the first time GHG legislation passed through
subcommittee and was voted out
of the relevant committee to become a "live" bill capable of
floor action. In the u.S. House of Representatives, the Energy and Commerce Committee is
working on a cap and trade form of climate change legislation, and individual Members of
Congress have proposed cap and trade legislation.
It
is uncertain whether any of those proposals
will be taken up this year. Exs. 17,
p. 3; 29.
26.
In addition, President Bush has supported climate initiatives that would focus on
technology development to eliminate growth in GHGs by 2025. In July 2008, the Group
of
Eight (G8) countries, which include the United States, issued a statement that they had agreed to
consider and adopt a GHG reduction target
of 50% by 2050. This agreement is a significant
departure from prior Bush Administration policy.
27.
The outcome
of any of these initiatives cannot be determined at this time.
However, both Presidential candidates McCain and Obama have expressed support for a GHG
emissions cap and trade program. Therefore, the likelihood that some form
of federal GHG
legislation will become law increases under the next Presidential administration.
See
Ex. 19, pp.
248-250.
28.
Additionally, various states, including Illinois, either alone or in conjunction with
other states in their
regions, have undertaken activities aimed at addressing GHGs.
14
Ex. 20
presents several maps depicting states that have adopted or are in the process
of developing state-
14
The Illinois GHG initiative was announced by the Governor well after Ameren
committed to and supported the MPS at Board hearings and mere days before the Board adopted
the final mercury rule, including the MPS.
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level or regional-level initiatives or programs. Ex. 20, pp. 2-3;
see also
Ex. 3 at pp. 6-7; Ex.
21.
15
The State of Illinois is working with surrounding states in the Midwestern GHG Reduction
Accord to establish within the next
18 months GHG reduction goals that will include the
electricity generation sector. There is no indication that any
of these state or local initiatives will
blend into whatever is eventually adopted at the federal level. Nevertheless, to the extent that
states adopt such approaches and they become enforceable, Ameren must comply.
29.
Further adding to the tumultuous atmosphere, apparently several USEPA
Regional offices are developing GHG plans. Ex. 22.
30.
The costs
of compliance with GHG legislation and regulations are likely to be
very great and will likely be the compliance program that dictates the economic viability
of
power companies.
See
Ex. 23. Ameren's financial position has already been affected by
projections of the cost of carbon constraint.
The downgrade
of AmerenGenco [which is comprised of Illinois power
stations] reflects higher capital expenditures at this predominantly coal
fired generating subsidiary, some
of which are likely to be financed with
additional long-term debt;
[SIC] and the likelihood that the company will
be negatively affected over the long-term
by the implementation [of]
additional environmental compliance requirements or controls on carbon
emissions.
Ex. 24. Ameren's current analyses show that under some policy scenarios being considered in
Congress, household costs and rates for electricity could rise significantly. The burden could fall
particularly hard on electricity consumers and the Midwest economy because
of the region's
reliance on electricity generated by coal-fired power plants. Natural gas emits about
half the
amount
of CO
2
that coal emits. As a result, economy-wide shifts favoring natural gas as a fuel
15 Climate Communities is apparently a lobbying group to ensure money from federal
legislation for local activities and requirements.
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source for electric generation also could affect nonelectric transportation, heating for Ameren's
customers, and many industrial processes. Under some policy scenarios being considered by
Congress, Ameren believes that wholesale natural gas costs could rise significantly as well.
31.
The Pew Center for Climate Change has compiled the results
of seven different
GHG economic models generated by different organizations that assess impacts from GHG
legislation similar to the Lieberman-Wamer Bill. These models predict in general, but to
differing degrees, (i) increases in power prices, (ii) reductions in energy consumption, (iii)
increases in natural gas usage, (iv) decreases in coal usage, and (v) increases in coal prices. Ex.
25. Significant changes in
anyone of these factors would severely impact the planning of any
power generation company, but expected changes in all of them make significant planning
uncertainties a certainty. Higher costs for energy could contribute to reduced demand for
electricity and natural gas. Future federal and state legislation
or regulations that mandate limits
on the emission
of GHGs would result in significant increases in capital expenditures and
operating costs.
32.
There is currently no technology which can
be applied to large coal-fired power
plants to reduce or capture CO2on
a large scale. There are a number
of promising technologies
under development, including "carbon capture and storage" technology, which would strip the
CO2 from the gas stream and seal it underground. However, it could
be 15-20 years before any
such technology becomes commercially viable. As a result, the options open to Ameren to meet
any near-term CO2reduction goals would be to curtail
or shut down coal-fired facilities or to
switch to natural gas. Most
of the federal and regional legislative proposals have initial CO2
reduction targets in the 2012-2015 timeframe. Should any of these proposals become law,
Ameren risks major stranded investments in S02 pollution control equipment associated with
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meeting what is essentially an interim emission rate of 0.33 Ib/mmBtu in 2013. Ameren believes
it will have a much clearer understanding
of the CO
2
controls facing its generating systems
within the next two years. At that time, a more reasoned approach to meet the 0.25 Ib/mmBtu
S02 limit in 2015 which might avoid such stranded costs could be developed.
33.
The Ameren Companies have already taken numerous actions to address global
climate change issues, including the following:
•
seeking partners to develop wind energy for its generation portfolio;
•
participating in Department
of Energy ("DOE")-sponsored research into the
feasibility
of sequestering CO
2
underground in the Illinois basin, the Plains
sequestration partnership, and a Missouri sequestration project to
be
conducted in southwest Missouri;
•
increasing the operating efficiency and capacity
of its nuclear and
hydroelectric plants to provide more energy to offset fossil generation;
•
participating in the PowerTree Carbon Company, LLC, whose purpose is to
reforest acreage in the lower Mississippi Valley to sequester carbon;
•
using coal combustion by-products as a direct replacement for cement,
thereby reducing carbon emissions at cement kilns;
•
participating in a DOE and Missouri Department
of Natural Resources project
evaluating Missouri wind resources for the next generation
of wind turbines;
•
funding a project investigating opportunities to reduce nitrous oxide (N20), a
potent GHG, from
agricultural usage and tracking those reductions;
•
participating in "Illinois Clean Energy Community Foundation," a program
that supports energy efficiency, promotes renewable energy, and provides
educational opportunities;
•
establishing Pure Power, a voluntary renewable energy
program in Missouri
that allows electric customers to support development
of wind farms and other
renewable energy facilities in the Midwest; and
•
purchasing Renewable Energy Credits; the Illinois utility arm
of Ameren
purchased 415,000 renewable energy credits in April 2008.
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However, these actions are likely not nearly enough to address the totality of the efforts needed
to comply with any future regulatory scheme to reduce GHG emissions.
34.
The costs to comply with future legislation or regulations could
be so expensive
that Ameren and other similarly situated electric power generators may be forced to close some
coal-fired facilities. Mandatory limits could have a material adverse impact on Ameren'sresults
of operations, financial position, or liquidity.
E.
AMEREN REQUIRES RELIEF FROM SECTION 225.233(e)(2)(A) TO
MITIGATE THE UNCERTAINTIES THAT HAVE DEVELOPED THIS
SUMMER AND TO AVOID STRANDED COSTS RESULTING FROM A
CHANGING REGULATORY ENVIRONMENT.
35.
The impact on Ameren of future initiatives related to GHGs and climate change is
unknown. Ameren's costs
of complying with any mandated federal or state GHG program could
have a material impact on its future operations, financial position, or liquidity. Ameren expects
at least some better level
of certainty to come about within the next two years that will enable it
to make the decisions necessary for it to remain economically viable in a carbon-constrained
world.
36.
The uncertainty surrounding potential GHG legislation and regulation and its
impacts on power generators have been significantly exacerbated
by the CAIR vacatur, finally
causing Ameren to seek regulatory relief through this requested variance. Making capital
expenditures now for environmental projects at facilities that may
be curtailed or shut down in
the near short term due to GHG regulation or additional regulation
of criteria pollutants is not
financially prudent and would divert capital expenditures that could be spent on future regulatory
requirements.
It
is for this reason that Ameren seeks this variance. Ameren must begin the
procurement process,
see
par.
10
above, for environmental capital projects necessary for
compliance with the MPS S02 limits shortly after the beginning
of calendar year 2009 in order to
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have the pollution control equipment necessary for Ameren to comply with a system-wide S02
emission rate
of 0.33 lb/mmBtu in 2013. The potential for stranded costs is extremely high and a
risk that Ameren needs to avoid. Ameren believes that its ability to determine whether it is
appropriate to add pollution controls to units, shut down units, or do both will become clearer
within the next two years consistent with the timeline for decisions at both the federal and
regional levels on GHG control requirements.
37.
Section 225.233(e)(2)(A), the specific regulation from which Ameren seeks relief,
provides as follows:
Beginning in calendar year 2013 and continuing in calendar year
2014, for the EGUs in each MPS Group, the owner and operator
of the EGUs must comply with an overall S02 annual emission
rate
of 0.33 lbs/million Btu or a rate equivalent to 44 percent of
the Base Rate of S02 emissions, whichever is more stringent.
35 Ill.Adm.Code § 225.233(e)(2)(A), effective December
21,2006. (Emphasis added.) "Overall
S02 annual emission rate" means that Ameren is to average its S02 emission rate over the entire
MPS Group. Under the regulations, Ameren'sMPS Group consists
of all EGUs it owned in
Illinois
as of July 1, 2006. 35 Ill.Adm.Code § 225.233(a)(3)(A). Therefore, it is appropriate and
necessary that Ameren seek this variance for its system as opposed to seeking individual
variances for each power station.
38.
Ameren seeks relief from the requirement in Section 225.233(e)(2)(A), quoted
above, that it achieve a system-wide S02 emission rate
of 0.33 lb/mmBtu or a rate that is 44% of
its baseline for the period from January 1, 2013, through December 31, 2014. Ameren has met
with the Agency to discuss Ameren's obligations under the MPS. As a result
of these
discussions, the parties have agreed to emission limits applicable to Ameren which result in
greater reductions in emissions than those contained in the MPS. Because the parties have
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agreed to emissions limits that will require a permanent change to the rule, Ameren understands
it must file a proposal for rulemaking to incorporate the new changes into the MPS. The
rulemaking process, however, requires more time than is available to Ameren to make Section
225.233(e)(2)(A) compliance decisions and serious investment decisions. Until the new limits
become effective, Ameren seeks an immediate decision on the relief requested in this petition.
39.
Ameren's current system-wide average S02 emission rate at its coal-fired units,
based upon 2007 data, is 0.60 Ib/mmBtu. This emission rate reflects operation
of the control
equipment listed on Table
1, attached hereto. When the FGD projects currently underway come
online between now and 2015, there will be a gradual reduction
of Ameren's system-wide S02
emission rate to 0.50 Ib/mmBtu in 2010, to 0.25lb/mmBtu
by January 1, 2015 and down to 0.23
Ib/mmBtu in 2017. There also will be a gradual reduction
of Ameren's system-wide annual NOx
emission rate to 0.14lb/mmBtu in 2010, down
to O.lllb/mmBtu in 2012, and ozone season NOx
emission rate
of 0.11 Ib/mmBtu beginning in 2010.
40.
As important as identifying the relief Ameren seeks is identifying what Ameren
does not seek. Ameren does not seek a change to the requirement that it install sorbent injection
on its coal-fired EGUs
by July 1,2009, for purposes of mercury removal or that it remove
mercury at its units that are smaller than 90 MW by January
1, 2013, or that it meet annual and
ozone season system-wide NOx emission rates
ofO.lllb/mmBtu by January 1,2012, or that it
meet a system-wide S02 emission rate ofO.25lb/mmBtu
by January 2,2015. The only relief
that Ameren seeks is from the requirement that it comply with a system-wide S02 emission rate
of 0.33 Ib/mmBtu by January 1, 2013.
41.
Ameren estimates it must scrub at least 70%
of its generation capacity to comply
with the 0.25 Ib/mmBtu emission rate by January 1,2015.
It
must scrub only marginally less to
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comply with the 0.33 Ib/mmBtu emission rate by January 1, 2013. Because Ameren is on a path
to reduce S02 emissions between now and 2017, the environmental benefit
of achieving a rate of
0.33 Ib/mmBtu by 2013, compared to a rate of 0.50 Ib/mmBtu in 2010, when the Coffeen and
Duck Creek FGDs come online, through 2013 and reducing to 0.44Ib/mmBtu in 2014 and
ultimately to 0.25 Ib/mmBtu
by 2015 and 0.23 Ib/mmBtu by 2017, is not insignificant. The
financial commitments that the 0.33 Ib/mmBtu rate would require today are substantial. The
associated uncertainty
as to the best approach to meet the 0.33 Ib/mmBtu rate is likewise
substantial. Because
of all of the uncertainties surrounding NOx and S02 reductions coupled
with anticipated but unknown climate change requirements and because the impact to the
environment,
if there is any at all, is not significant, Ameren faces arbitrary and unreasonable
hardship
if it is not granted the variance and allowed the next two years to make responsible
decisions regarding the best combinations
of actions to address the myriad compliance
requirements that will become applicable over the next decade and to minimize stranded costs
while doing so.
42.
Evaluation
of Ameren's fleet does not reveal any viable alternatives to installation
ofFGDs on units at both its Newton and E.D. Edwards plants for Ameren to comply with the
0.33 and 0.25 Ib/mmBtu emission rates other than shutting down units. Shutting down units at
this point in time
to achieve compliance with the 0.33 Ib/mmBtu S02 rate is unreasonable, given
the other system-wide reductions that will occur prior to and during the term
of the requested
variance and the insignificant difference in emission rates that Ameren will achieve during the
term
of the variance
(i.e.,
an annual average rate of 0.50 Ib/mmBtu from January 1,2010,
through December 31,2013, and an annual average rate of0.44Ib/mmBtu from January 1,2014,
through December 31, 2014) following installation
ofFGDs currently on schedule and at
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Newton. Curtailing generation to levels necessary to achieve compliance with the MPS is
another alternative. Either
of these alternatives could cause market disruptions, unreliable
service, and increased unemployment. Therefore, the alternatives that Ameren has been able to
identify are not viable.
43.
During the next two years, Ameren will continue to evaluate its financial position
and the best combination
of locations and capital equipment to comply with applicable
requirements. Then it will proceed with the appropriate procurement process, including
obtaining financing and permits,
see
par. 10, above, to construct and install the equipment
necessary for it to meet the system-wide 0.25 Ib/mmBtu
S02 rate required for 2015. The
procurement process itself will occur prior to the term
of the variance. During the term of the
variance, Ameren will be constructing the necessary equipment.
44.
The capital cost
of environmental projects at its Newton and E.D. Edwards plants
associated with compliance with the MPS is estimated to be $0.9-1.2 billion, with annual
estimated operating costs
of $30-40 million. These are the costs of immediate compliance. As
discussed above, the procurement process for these projects, in order for them to be operational
by 2013, must begin shortly after the beginning
of calendar year 2009. The procurement process
itself will result in some expenditure
of funds, but the major capital costs occur when Ameren
actually obtains the materials and equipment necessary for the construction
of the FGDs.
Ameren requests the variance for the period
of January 1, 2013, through December 31,2014, but
must request the variance over four years in advance because compliance activities begin now
with the long lead-time necessary for the construction ofFGDs.
F.
ANY MINIMAL ENVIRONMENTAL IMPACT RESULTING FROM THE
VARIANCE WILL BE OFFSET BY NEW EMISSION RATE COMMITMENTS
MADE BY AMEREN.
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45.
Any minimal environmental impact resulting from the requested relief will be
offset
by the new and additional emission rates for S02 and NOx Ameren has set forth in this
Petition. Ameren does not have data that addresses the qualitative and quantitative impact
of its
activity on human health and the environment. However, USEPA has found that emissions from
the coal-fired electric power generation sector as a whole tend to affect a large region
of the
country with relatively minimal impacts in the immediate vicinity
of an individual plant. 70
Fed.Reg. 25162, 25245-49 (May 12, 2005). That is, Ameren's emissions contribute to the mix
of regional pollutants that are transported on weather patterns and impact ozone and PM2.5
nonattainment areas hundreds
of miles downwind. In fact, the purpose of the vacated CAIR was
to address this regional impact
by capping regional emissions and requiring sources to surrender
an emission allowance, or, in the case
of S02, allowances, for each ton of S02 and NOx
emitted.
16
70 Fed.Reg. 25162 (May 12,2005). Such regional reductions of S02 and NOx would
aid states with nonattainment areas to determine the reduction plans necessary for their
nonattainment areas in order for them to attain the ozone and PM2.5 NAAQS.
46.
However, while reductions
of the contributions of many power plants to regional
levels
of ozone and PM2.5 would have a beneficial impact on nonattainment areas in general, the
reductions from a single plant or even a single company's system
of power plants in a single
state have little measurable effect on downwind areas. 64 Fed.Reg. 28250, 28279 (May 25,
1999);
63 Fed.Reg. 57356, 57375 (October 27,1998); 62 Fed.Reg. 60318,60326 (November 7,
1997); Air Pollution Control Dist. ofJefferson County, Ky.
v.
USEPA,
739 F.2d 1071, 1093-94
16 The fact that the CAIR was vacated does not eviscerate the relevance and efficacy of
its purpose or of the general concepts, analyses, and data underlying the rule. The transport
principles addressed
by the CAIR are the same as those addressed by the NOx SIP call, 63
Fed.Reg. 57356 (October 27, 1998), which has not been vacated.
See North Carolina,
2008 WL
2698180 at 28.
-26-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
(6
th
Cir. 1984). In other words, it takes regional reductions from the power plant sector, as
opposed to reductions from a single plant or even system, to produce a significant improvement
in air quality in the nonattainment areas. Moreover, the difference in the downwind impact
of
Ameren's S02 emissions at a rate of 0.50 Ib/mmBtu in 2013 and then 0.44Ib/mmBtu in 2014
compared to 0.33 Ib/mmBtu for the two-year period in question may not even
be measurable.
47.
Cross-media impacts are not an issue in this matter. The variance that Ameren
seeks here does not impact the requirement that it install and operate sorbent injection systems to
reduce mercury emissions. Likewise, Ameren'splanned NOx reductions will continue and have
been enhanced through Ameren's agreement to incorporate a new annual NOx emission rate
of
0.14Ib/mmBtu in 2010 and 2011, and a new ozone season NOx emission rate ofO.11Ib/mmBtu
beginning in 2010, thereby resulting in NOx emission reductions earlier than what is currently
required in the MPS. Although a purpose
of the Acid Rain Program is to improve water quality
through the reduction
of S02 emissions nationally, the emission rate that Ameren will achieve
during the pendency
of the requested variance is significantly lower than the emission rate
necessary for Ameren to comply with the Acid Rain Program. The slight increase in Ameren's
S02 emission rate during the pendency
of the variance should have no significant impact on
water quality. In fact, there are offsetting benefits associated with granting the requested
variance. Specifically, the requested variance would have the effect
of reducing Ameren's waste
production, in that sludges from the FOD necessary for it to comply with the 0.33 Ib/mmBtu
emission rate would not be generated because the FOD would not be operational.
48.
Prior to and during the pendency
of the requested variance period, as indicated
above, Ameren will have FODs come online at the Coffeen and Duck Creek Power Stations that
will enable the system to meet a 0.50 Ib/mmBtu S02 emission rate
by 2010. This rate will
-27-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
decline to a new emission rate of0.44Ib/mmBtu as additional FGDs are operated at Newton and
E.D. Edwards and, ultimately to a new emission rate
of 0.23 Ib/mmBtu beginning in 2017.
Additionally, Ameren is installing scrubbers at its Sioux Power Station in Missouri, upwind
of
Illinois. Operation of these scrubbers, scheduled to become operational in 2010 as well, will
benefit Illinois' air quality.
G.
AMEREN SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS FOR
THE VARIANCE AND COMPLIANCE PLAN.
49.
Ameren requests that the term of the variance begin on January 1, 2013. Ameren
requests that the variance terminate at midnight on December 31,2014, or upon the effective
date
of a rulemaking amending the MPS as that set of regulations applies to Ameren'sMPS
Group, whichever is sooner.
50.
Ameren suggests the following conditions to apply prior to and during the term of
the variance:
A.
Ameren's MPS Group is not subject to the provisions of Section
225.233(e)(2)(A).
B.
Ameren's MPS Group shall comply with a system-wide average ozone-
season NOx emission rate
ofO.IIlb/mmBtu commencing January 1,2010 and
continuing thereafter.
C.
Ameren's MPS Group shall comply with a system-wide average annual
NOx emission rate ofO.14Ib/mmBtu from January
1, 2010, through December 31,2011.
D.
Ameren's MPS Group shall comply with a system-wide average annual
NOx emission rate ofO.l1lb/mmBtu commencing January 1,2012, and continuing
thereafter.
E.
Ameren'sMPS Group shall comply with a system-wide annual average
S02 emission rate
of 0.50 Ib/mmBtu by January 1,2010.
F.
Ameren's MPS Group shall comply with a system-wide annual average
S02 emission rate
of 0.44 from January 1, 2014, through December 31,2014.
-28-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
G.
Ameren's MPS Group shall comply with a system-wide annual average
S02 emission rate ofO.25Ib/mmBtu commencing January 1, 2015, and continuing
thereafter.
H.
Ameren shall comply with a system-wide annual average
S02 emission
rate
of 0.23 Ib/mmBtu commencing January 1, 2017.
51.
Ameren proposes the following compliance plan:
A.
On or before June 1,2012, Ameren shall notify the Agency of its
anticipated compliance strategy.
B.
On or before June 1, 2012, Ameren shall submit applications for
construction permits for PGDs for the units to
be controlled to meet the 0.25 Ib/mmBtu
system-wide
S02 emission rate by January 1, 2015.
H.
AMEREN'S REQUESTED VARIANCE IS NOT CONTRARY TO ANY
FEDERAL LAW.
52.
The Board may grant the requested variance consistent with federal law and,
specifically, with the Clean
Air Act, 42 U.S.C. §§ 7401
et seq.
The MPS was submitted to
USEPA for approval as part
of Illinois' mercury rule. With the vacatur of the CAMR, there is no
longer any authority for
USEPA to approve or disapprove Illinois' mercury rule. Some of the
NOx and S02 reductions required by the MPS may eventually be included in Illinois' SIP that
demonstrates attainment with the ozone and PM2.5 NAAQS. However, Ameren understands
that the Agency has not relied upon the MPS
in the attainment demonstration for the Metro-East
ozone nonattainment area. There has
been no other submittal that Ameren is aware of that would
raise the MPS to the level
of federal approval. Therefore, the MPS is not federally enforceable.
Moreover, the reductions
in question here, those resulting from an S02 emissions limit of 0.33
Ib/mmBtu, would not occur until 2013, three years after the attainment dates for
both NAAQS.
Consequently, there is no federal law that requires Ameren to comply with an
S02 emission rate
of 0.33 Ib/mmBtu in 2013, there is no federal approval of the MPS which would have the effect
-29-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
of raising it to the level of a federal regulation, and the Board's grant of this variance request,
therefore, would not
be inconsistent with federal law.
I.
AMEREN DOES NOT REQUEST A HEARING.
53.
Ameren does not request that the Board hold a hearing in this matter. A hearing
is not necessary as there are no SIP or other federal law requirements to which the emission
standard is subject.
J.
CERTAIN PROVISIONS OF THE BOARD'S VARIANCE PROCEDURAL
RULES ARE NOT APPLICABLE TO THIS REQUEST.
54.
There is no permit that the Agency has issued that is affected
by this request for
variance. Section 104.206
of the Board'sprocedural regulations is not applicable to this request
for variance. Section 104.206 specifically addresses requests for variance from the Resource
Conservation and Recovery Act (RCRA). Ameren does not here seek such relief.
-30-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Dated: October 1, 2008
by:
WHEREFORE. for the reasons set forth above, Petitioners AMEREN ENERGY
GENERATING COMPANY, AMERENENERGY RESOURCES GENERATING COMPANY,
and ELECTRIC ENERGY, INC., respectfully request that the Board grant Ameren a variance
from the requirement that it comply with a system-wide S02 emission rate
of 0.33 Ib/mmBtu for
the period from January 1,2013, through December 31,2014.
Respectfully submitted,
AMEREN ENERGY GENERATING
COMPANY, AMERENENERGY RESOURCES
GENERATING COMPANY, and ELECTRIC
ENERGY, INC.,
Kathleen C. Bassi
Renee Cipriano
Amy Antoniolli
SCHIFF HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
312-258-5500
Fax: 312-258-2600
kbassi@schiffhardin.com
CH2\2732707.2
-31-
October
1, 2008
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b»
Address
Boilers
and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers,
and any other
Number
of
Equipment
l
relevant information
2
Employees
Coffeen Power Station (I.D. No. 135803AAA)
134 CIPS Lane
Unit 1
Unit 2
OFA
J
2007 S02
State Operating Permits:
Coffeen, Illinois
SCR
4
emission rate
=
Montgomery
nominal 3,282
nominal 5,544
ESP
5
with
0.75Ib/mmBtu
February 13,2004
County
mmBtu!hr
mmBtu!hr
FGC
6
App. No. 73020002
2007 S02 mass
Unit 1
184 employees
(1965)
(1972)
emISSIons
=
24,250 tons
February 13,2004
App. No. 73020001
Unit 2
1
all units unless otherwise indicated
2
Note that listed here are construction permit issued in or after 2005 through the present and that during this period, Ameren has been issued other
construction permits for projects not pertinent to this request for variance.
3 overfrre air
4
selective catalytic reduction
5 electrostatic precipitator
6 flue gas conditioning
Table 1- i
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b
»
Address
Boilers and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers, and any other
Number of
Equipment
l
relevant information
2
Employees
Coffeen Power Station (J.D. No. 135803AAA)
Construction Permits:
December 21, 2007
App. No. 07090069
New ESP for Unit 2
December 15,2006; revised October.
23,2007
App. No. 06090019
New FGD for Unit 1 and Unit 2
CAAPP Permit:
September 29,2005
App. No. 95090009
Appealed November 3, 2005
(PCB 06-064)
Stayed February 16, 2006
Table I -
ii
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b»
Address
Boilers
and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers,
and any other
Number
of
Equipment
l
relevant information
2
Employees
Duck Creek (LD. No. 057801AAA)
17751 North
Unit 1
LNB"I
2007 S02
State Operating Permit:
CILCO Road
SCR
emission rate
=
Canton, Illinois
Nominal 3,713 mmBtu/hr
ESP
0.20Ib/mmBtu
November 13, 1995
Fulton County
FGD
8
App. No. 78020006
(1976)
2007 S02 mass
72 employees
emissions
=
548
Construction Permits:
tons
November 22,2006; revised May 23,
Note that unit
2008
utilization was
App. No. 06070049
limited in 2007
WFGD
9
system
due to extended
unit outage.
February 16, 2007
App. No. 06070048
Boiler project; New ESP
7 low NOx burner
8 flue gas desulfurization (scrubber)
9 wet FGD
Table 1 - iii
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b
»
Address
Boilers
and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers, and any other
Number
of
Equipment
l
relevant information
2
Employees
Duck Creek (I.D. No. 057801AAA)
May 7, 2007; revised. January 31, 2008
App. No. 07030025
Pilot Air Quality Control System
CAAPP Permit:
September 29, 2005
App. No. 95070025
Appealed November 3, 2005
(PCB 06-066)
Stayed February 16,2006
Table 1- iv
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations and Units Comprising the MPS Group
(§ l04.204(b))
Address
Boilers and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate and TPY
application numbers, and any other
Number
of
Equipment
l
relevant information
2
Employees
E.D. Edwards Power Station (I.D. No. 143805AAG)
7800 South
Unit 1
Unit 2
Unit 3
LNB
2007 S02
State Operating Permit:
CILCO Lane
ESP with
emission rate
=
Bartonville,
nominal
nominal
nominal
FGC
0.50 Ib/mmBtu
July
1,2004
Illinois
1,523
3,321
4,594
App. No. 73010724
Peoria County
mmBtu!hr mmBtu!hr
mmBtu!hr
NewLNB
2007 S02 mass
andOFAon
emISSIons
=
Construction Permits:
134 employees
(1960)
(1968
(1972)
Unit 3
14,536 tons
March
9, 2007
App. No. 07030026
LNB and OFA for Unit 3
August 24, 2008
App. No. 08080029
LNB and OFA for Unit 3
CAAPP Permit:
September 29, 2005
App. No. 95070026
Appealed November
3,2005
(PCB 06-067)
Stayed February 16, 2006
Table 1- v
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b
»
Address
Boilers
and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers, and any other
Number of
Equipment
l
relevant information
2
Employees
Hutsonville Power Station (I.D. No. 033801AAA)
15142 East 1900
th
Unit 5
Unit 6
ESP
2007 S02
State Operating Permit:
Ave.
emission rate
=
Hutsonville,
nominal 695
nominal 695
0.54 Ib/mmBtu
February 17, 2005
Illinois
mmBtu/hr
mmBtu/hr
App.No.73020017
Crawford County
2007 S02 mass
Unit 5
(1952)
(1953)
emissions
=
2,953
57 employees
tons
February 17,2005
App. No. 73020018
Unit 6
Construction Permits:
May 14,2006
App. No. 06040014
Pilot Evaluation
of Fuel Additives for
S02 and mercury control
April 3, 2008
App. No. 08030017
Pilot Evaluation
of Water Injection for
PM Control on Unit 5
Table 1- vi
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b
»
Address
Boilers
and Sizes
Pollution
80
2
Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers,
and any other
Number
of
Equipment
l
relevant information
2
Employees
Hutsonville Power Station (I.D. No. 033801AAA)
August 18, 2008
App. No. 08080015
Pilot OFA Evaluation for Units 5 and 6
CAAPP Permit:
September 29,2005
App.No.95080105
Appealed November 3, 2005
(PCB 06-070)
Stayed February 16,2006
Table 1 - vii
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b
»
Address
Boilers and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers, and any other
Number of
Equipmene
relevant information
2
Employees
Joppa (LD. No. 127855AAC)
2100 Portland
Units 1-6
ESP
2007 S02
State Operating Permit:
Road
emission rate
=
Joppa, Illinois
nominal 1,800 mmBtu/hr each
OFAon
0.59 Ib/mmBtu
June
7, 2005
Massac County
Units
1, 3, 5
App. No. 73010757
(Units 1 and 2 1953)
and 6
2007 S02 mass
260 employees
emISSIons =
Construction Permits:
(Units 3 and 4 1954)
26,283 tons
March 3, 2005
(Units 5 and 6 1955)
App. No. 05020008
OFA system for Unit 6
December 5, 2005
App. No. 05020011
OFA system for Unit 5
November 30, 2006
App. No. 0600057
OFA system for Unit 3
October
24,2007
App. No. 07090035
OFA system for Unit 1
Table 1 - viii
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ l04.204(b))
Address
Boilers and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers, and any other
Number
of
Equipment
l
relevant information
2
Employees
Joppa (I.D. No. 127855AAC)
March 31, 2006
App. No. 06020085
Pilot for Mercury Control
July 18, 2008
App. No. 08020070
Sorbent Injection System
CAAPP Permit:
September 29, 2005
App. No. 95090120
Appealed November
3,2005
(PCB 06-065)
Stayed February 16, 2006
Table 1 - ix
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ l04.204(b»
Address
Boilers
and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers, and any other
Number
of
Equipment
l
relevant information
2
Employees
Meredosia Power Station (I.D. No. 137805AAA)
800 South
Units 1
Units 3
Unit 5
ESP
2007 S02
State Operating Permits:
Washington Street and 2
and 4
emission rate
=
Meredosia, Illinois
FGCon
1.09Ib/mmBtu
May
22,1996
Morgan County
nominal
nominal
nominal
Units 1 - 4
App. No. 73020005
505
505
2,784
2007 S02 mass
Unit 1
106 employees
mmBtu/hr mmBtu/hr mmBtu/hr
LNB and
emissions
=
FGCon
11,383 tons
May
22,1996
each
each
(1957)
Unit 5
App. No. 73020009
Unit 2
(1945)
(1946)
May
22,1996
App. No. 73020008
Unit 3
May
22,1996
App. No. 73020006
Unit 4
July 23, 2003
App. No. 73020007
Unit 5
Table 1- x
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b»
Address
Number
of
Employees
Boilers
and Sizes
Pollution
Control
Equipment!
S02 Emissions in
Rate
and TPY
Permits issued, issuance dates,
application numbers, and any other
relevant information
2
Meredosia Power Station (I.D. No. 137805AAA)
Construction Permits:
July 17, 2008
App. No. 08050025
Sorbent Activation Process
Demonstration Project
February 15,2007
App. No. 06120072
FGC System for Units
1,2,3 and 4
CAAPP Permit:
September 29, 2005
App. No. 95090010
Appealed November 3, 2005
(PCB 06-069)
Stayed February 16, 2006
Table 1 - xi
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Table 1
Power Stations
and Units Comprising the MPS Group
(§ 104.204(b))
Address
Boilers and Sizes
Pollution
S02 Emissions in
Permits issued, issuance dates,
Control
Rate
and TPY
application numbers,
and any other
Number
of
Equipment
l
relevant information
2
Employees
Newton Power Station (I.D. No. 079808AAA)
6725 North 500
th
Unit 1
Unit 2
LNB
2007 S02
State Operating Permits:
Street
OFA
emission rate
=
Newton, Illinois
nominal 5,500
nominal 5,500
ESP with
0.51 Ib/mmBtu
July 30, 1998
Jasper County
mmBtu/hr
mmBtu/hr
FOC
App. No. 78080036
2007 S02 mass
Unit 1
171 employees
(1972)
(1975)
Primary Air
emissions
=
Duct Burners 23,497 tons
June 29, 2001
on Unit 2
App. No. 83020010
Unit 2
Construction Permits:
July 11, 2008
App. No. 08010049
Sorbent Injection System
CAAPP Permit:
September
29,2005
App. No. 95090066
Appealed November
3,2005
(PCB 06-068)
Stayed February 16, 2006
Table 1 - xii
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
STATE OF MISSOURI
ST. LOUIS CITY
)
)
)
SS
AFFIDAVIT OF MICHAEL L. MENNE
I, MICHAEL L. MENNE, having first been duly sworn, state as follows:
1.
I am an employee of AMEREN ENERGY GENERATING COMPANY,
AmerenENERGY RESOURCES GENERATING COMPANY, and ELECTRIC ENERGY, INC.
(collectively "Ameren"), as Vice President
of Environmental Services, Ameren Services
Company, as authorized agent for Ameren, and as such have knowledge of the operations and
environmental matters connected with Ameren.
2.
I have read the preceding Petition for Variance.
3.
The statements of facts contained therein are true and correct to the best of my
knowledge and belief.
FURTHER, AFFIANT SAYETH NOT.
~~~
Michael~~
Subscribed and sworn to before me this /d- day of
~~'"
-Y-PUB-L-I-C-----
, 2008.
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
EXHIBIT LIST
Exhibit 1: Illinois Environmental Protection Agency,
Illinois Annual Air Quality Report 2006,
p.
34 with Ameren Power Stations and the names
of the counties in which the power
stations are located superimposed (December 2007)
<
www.epa.state.il.us/air/air-quality-
report/2006/index.html >.
Exhibit 2: Ameren, Letter to Jim Ross, Manager, Division of Air Pollution Control, Illinois
Environmental Protection Agency (December 27,2007).
Exhibit 3:
Black
&
Veatch Pathfinder
(August 2008).
Exhibit 4: Respondent
EPA's Motion to Extend Time to File Petitions for Rehearing or
Rehearing
En Banc, State ofNorth Carolina, et al.
v.
United States Environmental
Protection Agency,
No. 05-1244 (and consolidated cases) (August 8, 2008); Order,
State
ofNorth Carolina
v.
Environmental Protection Agency,
No. 05-1244 (August 15,2008).
Exhibit 5: Various Senators, Letter to Tom Kuhn, President, Edison Electric Institute (August
12,2008).
Exhibit
6: Dawn Reeves and Jenny Johnson, "White House Seeks Full CAIR Codification
Despite Focus on Narrow Fix,"
InsideEPA
(August 13,2008),
<
www.insideepa.
comlsecure/docnum.asp?docnum=8132008_narrow&f= epa_200 l.ask >.
Exhibit 7: Jenny Johnson, "Following CAIR Vacatur, States Eye Strict Model Rule for Air
Quality Plans,"
InsideEPA
(August 8, 2008).
Exhibit
8: Illinois Environmental Protection Agency,
Illinois Annual Air Quality Report 2006,
Table B2, pp. 47-48 (December 2007), < www.epa.state.il.us/air/air-quality-
report/2006/index.html
>.
Exhibit 9: Environmental Commissioners of Connecticut, Delaware, the District of Columbia,
Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New
York, Ohio, Pennsylvania, Rhode Island, Vermont, and Wisconsin, Letter to Robert
1.
Meyers, Principal Deputy Assistant Administrator, Office of Air and Radiation, USEPA
(June 11,2008).
Exhibit 10:
USEPA Region 5, Letter to Governor Rod Blagojevich (August 18, 2008).
Exhibit 11: USEPA, Attachment to Exhibit 10, Letter to Governor Blagojevich (August 18,
2008).
Exhibit 12: Lorraine Howerton, Baker Botts LLP, "Federal Legislation:
What's on the
Horizon?" PowerPoint Presentation at Carbon and Climate Change Seminar (April 24,
2008).
Exhibit List - xiii
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Exhibit 13: Pew Center on Global Climate Change, "Economy-wide Cap-and-Trade Proposals
in the
11
Oth Congress: Includes Legislation Introduced as of May 30, 2008,
<
www.pewclimate.org/docUploads/Cap-and-Trade-Chart. pdf >.
Exhibit
14: Pew Center on Global Climate Change, "110
th
Congress Index of Proposals,"
(January 3, 2008)
<
www.pewclimate.org/print/4028 >.
Exhibit
15: Howard Gruenspecht, Deputy Administrator, Energy Information Administration,
"EIA Analysis
of the L-W Climate Security Act of2007," PowerPoint Presentation to the
Edison Electric Institute (May 7, 2008).
Exhibit
16: Vicki Arroyo, Director of Policy Analysis, Pew Center on Global Climate Change,
"Primer on Lieberman-Warner Climate Security act (S. 2191) - as Reported out
of
Senate EPW Committee," PowerPoint Presentation (May 2008),
<
www.pewclimate.
org/docUploads/Arroyo-PPT.pdf >.
Exhibit
17: Darren Samuelsohn, "On Climate Legislation,
It
Looks Like 'WaitUntil Next
Year,'"
Yale Environment 360
(June 3, 2008)
< www.e360.yale.edu/content/
print.msp?id=2009 >.
Exhibit
18: "Lieberman-Warner Bill, Boxer Amendment (S. 3036),"
<
www.uschamber.com/
issues/index/environment/080603climatechange. htm
>.
Exhibit 19: Hari M. Osofsky, "Climate Change Legislation in Context,"
Northwestern
University Law Review Colloquy,
102 (2008): 245-252
<
www.law.northwestern.
edu/lawreview/colloquy/2008/9/
>.
Exhibit 20: Melinda E. Taylor, University of Texas School of Law, "Building Momentum for
National Legislation: Action by the States and Federal Agencies Since 2001,"
PowerPoint Presentation at Carbon and Climate Change Seminar (April 24, 2008).
Exhibit 21: Climate Communities, "Climate Action from the Ground Up: Agenda for Federal
Action,"
<
www.climatecommunities.us >.
Exhibit 22: Anthony Lacey, "EPA Regions Draft Internal GHG Plans to Prepare for Climate
Rules,"
InsideEPA
(August 19, 2008),
<
www.insideepa.com/secure/docnum.
asp?docnum=8192008_ghgplans&=epa_200 l.ask >.
Exhibit 23: Janet Peace, Director
of Markets and Business Strategies, Senior Economist, Pew
Center on Global Climate Change, "Insights from Modeling Analyses
of the Lieberman-
Warner Climate Security Act (S. 2191)," PowerPoint presentation (May 2008),
< www.pewclimate.org/docUploads/Peace-PPT.pdf>.
Exhibit 24: Moody'sInvestor Service, "Rating Action: Ameren Corporation" (August 13,
2008).
Exhibit List - xiv
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Exhibit 25: Pew Center on Global Climate Change, "Insights from Modeling Analyses of the
Lieberman-Warner Climate Security Act (S. 2191)" (May 2008).
Exhibit 26: "Seeking
CAIR Consensus,"
InsideEPA.com
(August 22,2008),
<
www.insideepa.
com/secure/docnum.asp?docnum=8222008_blogcair&f=epa_200
l.ask >.
Exhibit 27: Andrew Childers, "Air Pollution: White House, Congressmen Offer Alternatives to
Interstate Rule Vacated
by Appeals Court,"
Daily Environment Report
(August 25,
2008), BNA, Inc., < www.pubs.bna.com/ip/bnaiDEN.NSF/eh la06b6z2c861 >.
Exhibit 28: Christine Tezak and K. Whitney Stanco, "CAIR Update - Odd Bedfellows,"
editorial,
Washington Electricity/Environmental Bulletin
(August 25,2008), Stanford
Group Company,
<
www.standordinstitutional.com >.
Exhibit 29: Dean Scott, "Climate Change: With End
of Congressional Session in Sight, House
Unlikely to Act
on Capping Emissions,"
Daily Environment Report
(September 10,
2008), BNA, Inc., < www.pubs.bna.com/iplbnaiDEN.NSF/ehlaOb7bOplt3 >.
Exhibit List - xv
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Illinois
Environmental
Protection
Agency,
Illinois
Annual
Air
Quality
Report
2006,
p.
34
with
Ameren
Power
Stations
and
the
names
of
the
counties
in
which
the
power
stations
are
located
superimposed
(December
2007)
<
www.epa.state.i1.us/air/air-quality-reporl/2006/index.html>.
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Air
Quality
Report
2006
•
•
December
2007
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
34
LtCUl.d
•
Air
lICll\il.ormc
Situ
II:]
Cour.ty
BOUl\dlril~
+
10
20
30
40
50
llilu
•
•
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Ameren,
Letter
to
Jim
Ross,
Manager,
Division
of
Air
Pollution
Control,
Illinois
Environmental
Protection
Agency
(December
27,
2007).
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
~,~
~Ameren
Mr.
Jim
Ross)
Manager
Division
of
Air
Pollution
Control
Bureau
of
Air
Illinois
Envirorunental
Protection
Agency
1021
North
Grand
A
venue
East
P,
O.
Box
19726
Springfield,
IL
62794-9276
RE:
Illinois
Mercury
Rule
Multi-Pollutant
Standard
-
Notice
of
Intent
Dear
Mr.
Ross:
In
accordance
with
35
Illinois
Administrative
Code
Part
225
Subpart
B
Section
225,233
(b),
Ameren
Energy
Resources,
as
authorized
agent
for
ArneTen
Energy
Generating
Company,
AmerenEnergy
Resources
Generating
Company
and
Electric
Energy
Inc.,
submits
this
notice
of
intent
that
the
owners
of
the
following
eligible
electric
generating
units
elect
to
demonstrate
compliance
wlth
the
multi-
pollutant
emission
limitation
as
an
alternative
to
the
emission
standards
of
Section
225.230.
This
notice
of
intent
is
submitted
for
the
following
emission
units
that
are
eligible
electric
generating
units
(EGUs):
Ameren
Energy
Generating
Company
Facilitv
Facilitv
I.
D,
Emission
Unit
Coffeen
135803AAA
01
Coffeen
I
35803AAA
02
Hutsonville
03380lAAA
05
Hutsonville
03380lAAA
06
Meredosia
I
37805AAA
01
Meredosia
137805AAA
02
Meredosia
137805AAA
03
Meredosia
137805AAA
04
Meredosia
137805AAA
05
Newton
079808AAA
1
Newton
079808AAA
2
AmerenEnergy
Resources
Generating
Company
Facility
Facility
I.
D_
Emission
Unit
Duck
Creek
057801AAA
1
E,
D,
Edwards
143805AAG
I
E,
D,
Edwards
143805AAG
2
E,
D,
Edwards
143805AAG
3
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Joppa
I
27855AAC
4
Joppa
I
27855AAC
5
JoPPa
I27855AAC
6
The
electric
generating
units
(EGUs)
identified
above
are
eligible
to
participate
as
an
Multi-Pollutant
Standard
Group
for
the
purpose
of
demonstrating
compliance
with
the
requirements
of
35
Illinois
Administrative
Code
Part
225
Subpart
B
Section
225.233.
This
notice
ofintent
includes
the
following
components
as
attachments
to
this
submittal:
the
base
emission
rates
for
the
EGUs
and
supporting
data;
a
sununary
of
current
pollution
control
equipment
installed;
and
a
sunnnary
of
additional
pollution
control
equipment
that
will
likely
be
installed
to
comply
with
the
MPS.
The
EGUs
identified
in
this
notice
of
intent
have
commenced
commercial
operation
on
or
before
December
31,
2004
and
constitute
all
affected
EGUs
that
were
owned
by
the
listed
affiliates
as
of
July
I,
2006.
I
am
authorized
to
make
this
submission
on
behalf
of
the
owners
and
operators
of
the
affected
units
for
which
this
submission
is
made.
Please
contact
Steven
Whitworth
at
(314)
554
-
4908
if
you
have
any
questions
concerning
this
submittal
or
if
additional
information
is
required.
Sincerely,
,{1{P1
President,
ArneTen
Energy
Generating
Company
President,
AmerenEnergy
Resources
Generating
Company
Director
and
Chainnan,
Electric
Energy,
Inc.
SCW/AEGAERGEEI_MPSnotice
Attachments
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Arneren
Energy
Generating
Company
Facility
Facility
I.
D.
Emission
Unit
Particulate
Control
NOx
Control
S02
Control
Coffeen
135803AAA
01
ESP
OFAISCR
Coffeen
I
35803AAA
02
ESP
OFAISCR
Hutsonville
03380lAAA
05
ESP
Hutsonville
03380lAAA
06
ESP
Meredosia
I
37805AAA
01
ESP
Meredosia
137805AAA
02
ESP
Meredosia
I
37805AAA
03
ESP
Meredosia
I
37805AAA
04
ESP
Meredosia
I
37805AAA
05
ESP
LNB
Newton
079808AAA
I
ESP
OFAlLNB
Newton
079808AAA
2
ESP
OFAlLNB
AmerenEnergy
Resources
Generating
Company
Facility
Facility
I.
D.
Emission
Unit
Particulate
Control
NOx
Control
S02
Control
Duck
Creek
05780lAAA
I
ESP
LNB/SCR
FGD
E.
D.
Edwards
143805AAG
I
ESP
LNB
E.
D.
Edwards
143805AAG
2
ESP
LNB
E.
D.
Edwards
143805AAG
3
ESP
OFAlLNB/SCR
Electric
Energy,
Inc.
Facility
Facility
I.
D.
Emission
Unit
Particulate
Control
NOx
Control
802
Control
Joppa
127855AAC
1
ESP
LNB
Joppa
I
27855AAC
2
ESP
LNB
Joppa
127855AAC
3
ESP
LNB
Joppa
l27855AAC
4
ESP
LNB
Joppa
127855AAC
5
ESP
OFAlLNB
Joooa
127855AAC
6
ESP
OFAlLNB
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
EEl
89,504,514
0.129
5,771
0.54
24,026
AER
Illinois
311,568,309
0.244
37,988
1.15
179,583
2004
Heat
Input
NOx
Rate
NOx
502
Rate
502
Companv
ImmBtul
f#/mmBtu)
(tons)
l#/mmBtul
/tonsl
AEGC
171,427,867
0.249
20,710
1.06
90,532
AERGC
70,737,248
0.309
10,897
1.47
52,058
EEl
92,482,478
0.127
5,860
0.61
28,048
AER
Illinois
334,647,593
0.224
37,467
1.02
170,638
2005
Heat
Input
NOx
Rate
NOx
502
Rate
502
Company
ImmBtul
1#/mmBtul
/tonsl
l#/mmBtul
(tonsl
AEGC
160,864,003
0.253
18,494
1.04
83,905
AERGC
65,569,490
0.267
8,619
1.22
39,999
EEl
86,505,712
0.128
5,524
0.60
25,963
AER
Illinois
312,939,205
0.235
32,637
1.01
149,867
Annual
Average
Heat
Input
NOx
Rate
NOx
502
Rate
502
Company
ImmBtul
1#/mmBtul
/tonsl
l#/mmBtul
Itonsl
AEGC
163,581,523
0.243
19,910
1.08
88,185
AERGC
66,639,278
0.312
10,402
1.58
52,499
EEl
89,497,568
0.128
5,718
0.58
26,012
AER
lIiinois
319,718,369
0.225
36,031
1.04
166,696
MP5
Rates
NOx
at
0.11
or
52%
of
base
rate
in
2012
502
at
0.33
or
44%
of
base
rate
in
2013
502
at
0.25
or
35%
of
base
rate
in
2015
%
of
base
rate
0.117
%
of
base
rate
0.46
0.36
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
EEl
37,416,091
0.126
2,359
AER
Illinois
136,152,747
0.169
11,492
2004
Heat
Input
NOx
Rate
NOx
Company
ImmBtul
(#/mmBtul
Itonsl
AEGC
72,205,935
0.153
5,508
AERGC
30,512,335
0.180
2,750
EEl
30,951,063
0.126
1,956
AER
Illinois
133,669,333
0.153
10,214
2005
Heat
Input
NOx
Rate
NOx
Company
ImmBtul
1#/mmBtu)
/tons)
AEGC
77,068,042
0.146
5,614
AERGC
28,277,603
0.170
2,397
EEl
37,004,541
0.126
2,328
AER
Illinois
142,350,186
0.147
10,339
Seasonal
Average
Heat
Input
NOxRate
NOx
Company
(mmBtul
(#/mmBtul
(tons)
AEGC
73,697,735
0.152
5,609
AERGC
28,569,121
0.200
2,858
EEl
35,123,898
0.126
2,214
AER
Illinois
137,390,755
0.155
10,682
MPS
Rates
NOx
at
0.11
or
80%
of
base
rate
in
2012
%
of
base
rate
0.124
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
Facility
Facility
l.
D.
Emission
Unit
Mercury
Control
NOx
Control
S02
Control
Coffeen
I
35803AAA
01
SCRJFGD
OFNSCR
FGD
Coffeen
135803AAA
02
SCRJFGD
OFNSCR
FGD
Hutsonville
03380lAAA
05
ACI
2013
OFNLNB
Hutsonville
03380lAAA
06
ACI
2013
OFNLNB
Meredosia
1
37805AAA
01
ACI
2013
Meredosia
I
37805AAA
02
ACI
2013
Meredosia
137805AAA
03
ACI
2013
Meredosia
137805AAA
04
ACI
2013
Meredosia
137805AAA
05
ACI
2009
OFNLNB
Newton
079808AAA
I
ACI
2009
OFNLNBISCR
FGD
Newton
079808AAA
2
ACI
2009
OFNLNB/SCR
FGD
AmerenEnergy
Resources
Generating
Company
Facility
Facility
l.
D.
Emission
Unit
Mercury
Control
NOx
Control
S02
Control
Duck
Creek
05780lAAA
I
SCRJFGD
LNB/SCR
FGD
E.
D.
Edwards
I
43805AAG
I
ACI
2009
OFNLNB
E.
D.
Edwards
143805AAG
2
ACI
2009
OFNLNB
E.
D.
Edwards
I
43805AAG
3
ACI
2009
OFNLNB/SCR
FGD
Electric
Energy,
Inc.
Facility
Facilitv
l.
D.
Emission
Unit
Mercur
Control
NO.
Control
S02
Control
Joppa
I
27855AAC
I
ACI
2009
OFNLNB
FGD
Joppa
I
27855AAC
2
ACI
2009
OFNLNB
FGD
Jonna
J27855AAC
3
ACI
2009
OFNLNB
Joppa
I
27855AAC
4
ACI
2009
OFNLNB
JOnna
I
27855AAC
5
ACI
(2009)
OFNLNB
FGD
Joppa
127855AAC
6
ACI
(2009)
OFNLNB
FGD
Electronic Filing - Received, Clerk's Office, October 1, 2008
* * * * * PCB 2009-021 * * * * *
