BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

3 IN THE MATTER OF:

)

4 NITROGEN OXIDES EMISSIONS ) R08-19

FROM VARIOUS SOURCE

) (Rulemaking - Air)

5 CATEGORIES: AMENDMENTS TO )

35 ILL. ADM. CODE PARTS

)

6 211 AND 217

)

8 Proceedings held on October 14, 2008, at 10:04 a.m., at

the Illinois Pollution Control Board, 1021 North Grand

9 Avenue East, Springfield, Illinois, before Timothy J.

Fox, Hearing Officer.

Reported By: Karen Waugh, CSR, RPR

CSR License No: 084-003688

KEEFE REPORTING COMPANY

11 North 44th Street

Belleville, IL 62226

(618) 277-0190

Keefe Reporting Company

APPEARANCES

Board Members present:

Board Member Andrea S. Moore

4 Board Member Thomas E. Johnson

6 Board Staff Members present:

7 Anand Rao, Senior Environmental Scientist

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

10 BY: Ms. Gina Roccaforte

Assistant Counsel

Division of Legal Counsel

1021 North Grand Avenue East

Springfield, Illinois 62794-9276

On behalf of the Illinois EPA

BY: Ms. Dana Vetterhoffer

Assistant Counsel

Division of Legal Counsel

1021 North Grand Avenue East

Springfield, Illinois 62794-9276

On behalf of the Illinois EPA

17 BY: Mr. John J. Kim

Managing Attorney

Division of Legal Counsel

1021 North Grand Avenue East

Springfield, Illinois 62794-9276

On behalf of the Illinois EPA

21 HODGE DWYER ZEMAN

BY: Ms. Katherine D. Hodge

Attorney at Law

3150 Roland Avenue

PO Box 5776

Springfield, Illinois 62705-5776

On behalf of IERG

Keefe Reporting Company

APPEARANCES (cont'd)

ILLINOIS ENVIRONMENTAL REGULATORY GROUP

3 BY: Mr. Alec M. Davis

General Counsel

215 East Adams Street

Springfield, Illinois 62701

On behalf of IERG

SCHIFF HARDIN LLP

7 BY: Ms. Kathleen C. Bassi

Attorney at Law

6600 Sears Tower

Chicago, Illinois 60606

On behalf of Midwest Generation

Keefe Reporting Company

INDEX

2 WITNESS

PAGE NUMBER

3 IEPA Panel

Dr. James E. Staudt

4 Robert Kaleel

Vir Gupta

(Questions from IERG)

6 (Questions from Midwest Generation)

116

(Questions from ExxonMobil)

176

Keefe Reporting Company

EXHIBITS

2 NUMBER

INTRODUCED

ENTERED

3 Hearing Exhibit No. 1

Hearing Exhibit No. 2

4 Hearing Exhibit No. 3

Hearing Exhibit No. 4

206

Keefe Reporting Company

PROCEEDINGS

(October 14, 2008; 10:04 a.m.)

HEARING OFFICER FOX: Having indicated that

4 she is ready, the court reporter allows me license to

5 proceed. Good morning, and welcome to this Illinois

6 Pollution Control Board hearing. My name is Tim Fox, and

7 I'm the hearing officer for this rulemaking proceeding

8 entitled "In the Matter of: Nitrogen Oxide Emissions

9 from Various Source Categories: Amendments to 35

10 Illinois Administrative Code Parts 211 and 217." The

11 board docket number for this rulemaking is R08-19. The

12 Illinois Environmental Protection Agency filed this

13 rulemaking proposal on May 9 of this year, 2008, and the

14 Board accepted it for hearing in an order dated June 5 of

15 2008.

Also present today from the Board on my immediate

17 right is Board Member Andrea S. Moore, who is the lead

18 board member for this rulemaking. At my far left is

19 Board Member Thomas E. Johnson, and also present at my

20 immediate left is Anand Rao of the Board's technical

21 staff.

Today we are of course holding the first hearing

23 in this rulemaking. The second is now scheduled to take

24 place beginning Tuesday, December 9 in Chicago. This

Keefe Reporting Company

1 proceeding is governed by the Board's procedural rules so

2 that all information that is not relevant -- that --

3 forgive me -- is relevant but is not repetitious or

4 privileged will be admitted into the record. Please note

5 that any questions that are posed today by the Board and

6 its staff are intended solely to assist in developing a

7 clear and complete record and -- for the Board's decision

8 and those questions do not reflect any prejudgment of the

9 proposal filed by the Agency.

For this first hearing, the Board on August 29 of

11 2008 reviewed -- received prefiled testimony from the

12 Environmental Protection Agency by Mr. Robert Kaleel,

13 from Mr. Vir Gupta and Dr. James Staudt. The Board has

14 received prefiled written questions for those witnesses

15 from Midwest Generation, from ExxonMobil and the Illinois

16 Environmental Regulatory Group, and on September 30 of

17 2008, the Agency filed its written responses to each of

18 those questions that had been prefiled earlier.

We will begin this hearing with the testimony --

20 the prefiled testimony of the Agency as the proponent in

21 this proceeding. The written responses are -- The

22 questions for the Agency's witness and the responses to

23 those are in the Board's record in this proceeding, and

24 we will then proceed question by question with any

Keefe Reporting Company

1 clarification or follow-up questions that the

2 participants may have.

I recognize that virtually all of you are

4 veterans of proceedings of this nature, but for the

5 benefit of the court reporter and for a record that is as

6 clear as possible, if you would please avoid speaking at

7 the same time as any other person. I don't think we'll

8 have any amplification issues in terms of making one

9 another heard, but if you would speak loudly and clearly

10 for her benefit, we will have the clearest possible

11 transcript.

What I would like to do -- It appears that all of

13 the participants who have prefiled questions are present.

14 What I would like to do is very briefly just to go off

15 the record, iron out a couple of fairly simple -- what I

16 believe are fairly simple details about the orders of

17 proceeding, and then we can reconvene almost immediately

18 and get underway with the substantive testimony. Any

19 questions in the meantime before we go off the record

20 briefly? Excellent. If we may do that.

(Off the record.)

HEARING OFFICER FOX: We're all set. In

23 going off the record briefly to discuss procedural issues

24 relating to the course of the hearing -- and I'm sorry to

Keefe Reporting Company

1 repeat that for those who are present here -- it was

2 determined that it was most logical to begin with the

3 prefiled questions submitted by the Illinois

4 Environmental Regulatory Group; to proceed then to the

5 prefiled questions from Midwest Generation that were

6 directed specifically to Dr. Staudt; at the conclusion of

7 the follow-ups to those, to proceed with the prefiled

8 questions filed by ExxonMobil; and ultimately to return

9 to Midwest Gen for follow-ups to those questions it had

10 filed specifically for Mr. Kaleel on behalf of the

11 Agency.

At this point it's appropriate, I think, to turn

13 to the Agency. In the hearing officer order I had

14 indicated that if the Agency wished to offer a brief

15 summary that that certainly would be in order. If you

16 would prefer to proceed to follow-up questions and

17 clarifications, that certainly seems like a productive

18 way to proceed as well. Do you have a preference,

19 Ms. Roccaforte?

MS. ROCCAFORTE: I think we're going to go

21 straight to questions, but I just had a couple of

22 procedural issues.

HEARING OFFICER FOX: Absolutely. Go ahead.

MS. ROCCAFORTE: I'm Gina Roccaforte,

Keefe Reporting Company

1 assistant counsel on behalf of the Illinois EPA. With me

2 today is Dana Vetterhoffer, assistant counsel, and John

3 Kim, managing attorney of the Air Regulatory Group, and

4 we are here representing the Illinois EPA. This

5 rulemaking is intended to satisfy Illinois' obligation

6 under Sections 172 and 182 of the Clean Air Act

7 pertaining to reasonably available control technology for

8 major stationary sources of nitrogen oxides in areas

9 designated as non-attainment with respect to the

10 eight-hour ozone and the PM2.5 national ambient air

11 quality standards. On March 24 the USEPA made a finding

12 that Illinois, among other states, failed to make a RACT

13 submittal required under Part D of Title I of the Clean

14 Air Act. I have copies of this and would like to move to

15 enter it as an exhibit.

HEARING OFFICER FOX: Very well. If you can

17 distribute those to the participants, Ms. Roccaforte,

18 that would be great.

MS. ROCCAFORTE: This finding starts the

20 18-month emission offset clock, sanctions clock, and the

21 24-month highway funding sanctions clock and the 24-month

22 clock for the promulgation of a federal implementation

23 plan under the Clean Air Act. Therefore, Illinois is

24 required to submit a complete plan by September 24, 2009,

Keefe Reporting Company

1 so as to avoid the imposition of at least a two to one

2 offset requirement on new and modified sources for

3 emission units for which a permit is required under Part

4 D. As such, this rule proposed reasonable and cost

5 effective NOx controls on various source categories. The

6 proposed rule is expected to reduce NOx emissions by 46.3

7 percent or 20,666 tons per year beginning in 2010. I

8 would also like at this time to move to file as exhibits

9 the agency analysis of economic and budgetary effects of

10 the proposed rulemaking.

HEARING OFFICER FOX: Ms. Roccaforte, why

12 don't I address the first document that you had

13 circulated, and for the sake of the record, that is

14 Volume 73 of the Federal Register, pages 15416 to 15421,

15 entitled "Finding of Failure to Submit State

16 Implementation Plans Required for the 1997 Eight-Hour

17 Ozone NAAQS." Was there any objection on the part of any

18 of the participants to admitting that into the record as

19 Hearing Exhibit No. 1? Neither seeing nor hearing any

20 objection, it will be marked and admitted into the record

21 as Exhibit No. 1. Ms. Roccaforte, thank you for letting

22 me interrupt you.

MS. ROCCAFORTE: Thank you.

BOARD MEMBER JOHNSON: Speaking of volume --

Keefe Reporting Company

1 and I -- it's age compounded by allergies -- but if

2 you'll speak up a little for me, Gina.

MS. ROCCAFORTE: Sure. As I was saying, I

4 would like to move now at this time to submit the agency

5 analysis of economic and budgetary effects of the

6 proposed rulemaking for Part 211 and Part 217.

HEARING OFFICER FOX: Ms. Roccaforte, having

8 heard your motion, what I would like to do is divide it

9 into two parts since there are documents addressing

10 separate parts of the Board's regulations.

11 Ms. Roccaforte has moved to admit as Exhibit No. 2 the

12 analysis of economic and budgetary effects of the

13 proposed rulemaking with regard specifically to Part 211,

14 the definitions and general provisions. Is there any

15 objection on the part of any of the participants to

16 admitting that as Exhibit No. 2 in this proceeding?

17 Neither seeing nor hearing any, it will be so marked and

18 admitted into the record. And secondly, Ms. Roccaforte,

19 again dividing your motion, is there any objection to

20 marking and admitting as Hearing Exhibit No. 3 the

21 analysis of the proposed rulemaking with regard to Part

22 217 specifically addressing NOx emissions? Neither

23 seeing nor hearing any, it will be so marked as Exhibit

24 No. 3 and admitted into the record. Thank you,

Keefe Reporting Company

1 Ms. Roccaforte.

MS. ROCCAFORTE: Thank you. And with us

3 today from the Illinois EPA are Rob Kaleel, manager of

4 the Air Quality Planning Section, Division of Air

5 Pollution Control, Bureau of Air; Vir Gupta,

6 environmental protection engineer, Air Quality Planning

7 Section, Division of Air Pollution Control, Bureau of

8 Air; and also with us is Dr. James Staudt, president of

9 Andover Technology Partners. I'd ask that the witnesses

10 be sworn in at this time and we can begin answering

11 questions.

HEARING OFFICER FOX: Very good. If the

13 court reporter would swear the agency witnesses in as a

14 panel, please, we can proceed.

(Witnesses sworn.)

HEARING OFFICER FOX: Thank you very much.

17 Ms. Hodge, it's time to turn to you, as it appears. You

18 had mentioned that you had some general questions that

19 you wished to raise before seeking specific

20 clarifications and follow-ups to the written answers that

21 were filed by the Agency. If it's -- you're prepared to

22 begin with those, why don't we turn things over to you.

MS. HODGE: Yes. Thank you so much,

24 Mr. Fox.

Keefe Reporting Company

HEARING OFFICER FOX: Certainly.

MS. HODGE: My name is Katherine Hodge,

3 H-O-D-G-E, and I am with the law firm Hodge Dwyer Zeman,

4 and I'm here today representing the Illinois

5 Environmental Regulatory Group, and with me today to my

6 immediate right is Mr. David Kolaz, and Mr. Kolaz is a

7 consultant to IERG. Seated next to him, Ms. D.K. Hirner,

8 and she's the executive director of IERG, and then seated

9 to her right is Mr. Alec Davis, and he is general counsel

10 to IERG. Also in the audience today we have

11 representatives from several IERG member companies, and

12 as you said, Mr. Fox, I do have some general questions

13 for Dr. Staudt that I'd like to start with, and I'll just

14 get right to that, then.

Dr. Staudt, my first question is, does the cost

16 analysis that you conducted here include an estimate of

17 the amount of lead time necessary to plan, design,

18 finance, construct, implement and test the various types

19 of control technologies that you evaluated?

DR. STAUDT: Well, the analysis presented

21 here, the costs all incorporate -- are all based upon to

22 a large extent actual projects. The data that's been

23 collected are based upon real projects that have been

24 installed over a period of time. The TSD does not

Keefe Reporting Company

1 explicitly have a section that analyzes lead times for

2 specific projects, if that's what you -- that answers

3 your questions.

MS. HODGE: Okay. Thank you. Based upon

5 your experience, what is a typical time frame that would

6 be necessary from the initial concept to implementation

7 and testing for these types of projects?

DR. STAUDT: I -- For combustion

9 technologies like SNCR, it would typically be a --

10 perhaps about a year or less. For something like

11 selective catalytic reduction, which is a much larger

12 capital project, typically it would be longer than that,

13 but there may be differences from project to project or

14 from facility to facility that may change that.

MS. HODGE: Okay. Thank you. Have you

16 conducted any analysis to determine RACT for any of the

17 specific emission units that would be subject to this

18 rule?

DR. STAUDT: Well, to -- if you're looking

20 at any particular unit or looking at the units -- the

21 characteristics of the Illinois units in general, we have

22 not examined -- done a unit-by-unit, case-by-case type of

23 analysis. We don't think that that's necessary, and I

24 think frankly it would be practically -- you know,

Keefe Reporting Company

1 impractical to do. To -- A more practical approach was

2 to look at the source categories by types, whether they

3 be industrial boilers, and the fuel types and combustion

4 characteristics, and then to examine what has been

5 achieved and what's been published relative to those

6 types of source categories, so we did consider the types

7 of source categories but we did not do a case-by-case

8 RACT.

MS. HODGE: So in making --

(Off the record.)

MS. HODGE: In performing your analysis

12 based upon the various industrial categories, did you

13 factor in the age of a particular unit? For example, did

14 you say in your analysis, well, I'm looking at an

15 industrial boiler that's twenty years old or that's ten

16 years old or five years old? Did that factor into your

17 analysis at all?

DR. STAUDT: No, and I'll explain why. By

19 and large, many of these industrial boilers -- whether

20 it's ten years old, twenty years old or thirty years old,

21 many of them have been shown to live well beyond ten,

22 twenty, thirty years, so in terms of factoring that into

23 the analysis, it -- what I found is these boilers tend to

24 last a fairly long time, so, you know, what I think you

Keefe Reporting Company

1 might be getting at is saying, well, if a boiler has a

2 specific -- if you only expect a boiler to be around for

3 another five years, how does that affect the cost

4 analysis. Well, that -- in my experience, there -- these

5 boilers tend to last -- tend to -- even if they're twenty

6 years old, more often than not they can continue running

7 for another twenty years. Moreover, we don't have -- you

8 know, we did not look specifically unit by unit to do any

9 kind of analysis and ask the people, well, do you plan to

10 shut this down in five years. If someone plans to shut

11 it down in five years, that might be something to

12 consider.

MS. HODGE: So it's your testimony, though,

14 that the age of the particular unit, let's say an

15 industrial boiler, would not have any impact on the cost

16 for the controls or on the technical feasibility?

DR. STAUDT: Well, it would -- it depends

18 upon what aspect of the age you're talking about. If

19 it's a -- In terms of the technical feasibility, I don't

20 see where it would necessarily have a factor on the

21 technical feasibility. In terms of the economic

22 volubility of the project, it potentially could if the

23 owner intends to shut the plant -- shut the facility down

24 in the near future, so -- but it's not for me to make --

Keefe Reporting Company

1 to say that an owner plans to shut it down in the near

2 future.

MS. HODGE: All right. Thank you.

MS. BASSI: While you are conferring, can I

5 ask one quick follow-up?

HEARING OFFICER FOX: Ms. Bassi, please go

7 ahead.

MS. BASSI: One of the questions that

9 Miss Hodge asked you was how long it -- the -- how long

10 it takes to construct and install some of this control

11 equipment, and I believe you answered that an SCR,

12 selective catalytic reduction equipment, would take

13 longer than one year. Could it take as much as four

14 years?

DR. STAUDT: That -- I am not aware of any

16 facilities where it's taken four years to do. I've

17 done -- I've -- A more typical number might be around two

18 years, but actually, I've seen some facilities as short

19 as a year, but for an SCR, you know, that -- using that

20 year is kind of about as short as it gets, but more

21 typical numbers would be close to two years for an SCR.

22 Four years, I can't say that no one has ever taken four

23 years to do it, but my guess is that they probably could

24 have done it faster. It's just that maybe they had other

Keefe Reporting Company

1 things going on that --

MS. BASSI: Does your calculation of that

3 time period include obtaining financing?

DR. STAUDT: When I talk about the one year

5 or the two years, no, that does not include getting

6 financing.

HEARING OFFICER FOX: Yes, sir. If you

8 before going into your question would just provide your

9 name and --

MR. ELVERT: Yes.

HEARING OFFICER FOX: -- spell it for the

12 court reporter.

MR. ELVERT: Yes. Robert Elvert -- it's

14 spelled E-L-V as in Victor, E-R-T -- ExxonMobil.

15 Dr. Staudt, was any safety factors or requirements by

16 OSHA industry or other guidelines, requirements taken

17 into effect as to how long it may take to replace a unit?

DR. STAUDT: Well, in terms of -- I think

19 I've talked about how we treated the time, but the -- we

20 didn't explicitly look at time in the TSD, and so you can

21 tell from the TSD we didn't explicitly look at the time

22 frame. We were mainly looking at cost. From the context

23 of cost, all of the costs represented in the TSD are

24 based upon historical information, many of them actual

Keefe Reporting Company

1 facilities, and of course those cost numbers are based

2 upon actual facilities that were installed I presume

3 within OSHA requirements, or I hope they were all

4 installed within OSHA requirements and safety

5 requirements, so from the context of cost, that would

6 have been factored in. Unless you have -- If you have

7 something more, like, specific, unique requirements that

8 you want to explore, ask me about, I'm not sure what you

9 mean.

MR. ELVERT: Could they -- Could there be a

11 difference from industry sector to -- within the various

12 sectors within industry, is it a refinery, is it a

13 chemical plant, different than some other manufacturing

14 plant that you're aware of as far as safety type or

15 federal requirements, federal safety requirements?

DR. STAUDT: Well, yeah, there are some

17 different requirements at refineries, okay, but when

18 you -- what -- we did consider what -- you know, we

19 looked at the process -- we had a whole chapter on

20 process heaters, and from the perspective of process

21 heaters, the information on cost are based upon

22 information on process heaters which are used at

23 refineries. They're not used at power plants and they're

24 not used at other facilities. So in that perspective,

Keefe Reporting Company

1 assuming all of those process heaters that formed the

2 basis of the data that was relied on for the cost were

3 installed properly -- and I assume that they were --

4 they -- that would have addressed it from a cost

5 perspective. In terms of timing, as I said, I think I've

6 already addressed the timing question that you raised.

MR. ELVERT: Thank you.

MS. HODGE: Just a follow-up on the -- a

9 clarification on the timing. Again, you know, my

10 question related to planning, design and finance, and I

11 think you testified that you would not consider the

12 financing timing, construction and implementation. When

13 you talk about a year, is that from the time someone

14 starts construction? Is that from the time that they

15 would plan the project and then have to go seek a permit,

16 or could you just clarify a little bit what you mean by

17 the timing?

DR. STAUDT: Well, it could mean -- it

19 depends upon the technology, okay, but when I talk about

20 a year for -- for an SNCR system, it would typically be

21 under a year, I mean, on the outside for a selective

22 non-catalytic reduction system.

MS. HODGE: What would the start be?

DR. STAUDT: The start period would be -- it

Keefe Reporting Company

1 could very well be from the point of planning, even

2 before you file for the permit, and so -- but again, you

3 might -- you know, in many cases it might take longer

4 than that. In some cases it might take a year and a

5 half, but it's not going to be a three-year period for an

6 SNCR unless somebody's really working slowly or there's

7 some unusual situation, but --

MS. HODGE: Do you know what the lead time

9 is for some of these technologies?

DR. STAUDT: Yes.

MS. HODGE: Let's say I have a plant and I

12 would want to order one today.

DR. STAUDT: Okay. If you want to place an

14 order today, an SNCR -- I'll give you -- burners can

15 typically be done in less than a year, you know, from the

16 time you place the order, engineering, delivery,

17 installation. Of course one of the things you have to

18 factor in, one of the issues to some of these folks is

19 planning it within your normal outage cycle, okay? I

20 know that's a factor for many of the industries here. Of

21 course you want to factor that in to the extent you can.

22 For something like an SNCR system, same thing. It's

23 about -- It can be done within a year from the time you

24 place the order. That includes engineering, procurement,

Keefe Reporting Company

1 construction, mobilization, startup, testing,

2 commissioning, and turn over to the owner. An SCR

3 system, from the time you place the order, again,

4 typically within two years, okay, from -- you place the

5 order, that includes engineering, and you typically have

6 some -- you know, engineering, procurement, construction,

7 startup, you know, and, you know, the end -- you know,

8 commissioning and final acceptance testing. So that's

9 what you're looking at in terms of timing. Again, you

10 may want to plan it a little bit around your outage

11 schedule, which may cause you to accelerate things or may

12 cause you to move something back.

MS. HODGE: Okay. Did you factor in any

14 time for obtaining the construction permit, if such would

15 be necessary?

DR. STAUDT: Well, yes. I mean, in the

17 studies that I've done for EPA -- in fact, there's a

18 study that's referenced in the -- I did a study for EPA

19 we completed in 2002 on specifically all of this, and

20 that is timing for scrubbers, timing for SCRs, timing for

21 other control technology all relating to multi-pollutant

22 control, and we're focusing primarily on tail end

23 systems, and --

MS. BASSI: I'm sorry. What kind of

Keefe Reporting Company

1 systems?

DR. STAUDT: What I call tail end --

3 selective cat tail end system, not combustion controls.

4 Combustion control is typically faster, okay? For an

5 SCR, that's a bigger construction project so it takes a

6 little bit longer, but when I say two years for an SCR,

7 that includes, you know, the permit. It's -- What you --

8 Because what -- you can get the permit -- you can apply

9 for the permit and concurrently do engineering. You

10 don't buy equipment and you don't start doing

11 construction until you get the permit, but you can do

12 engineering while the permit is being processed.

MS. HODGE: And we're talking about the air

14 permit here.

DR. STAUDT: Talking about the air permit

16 and the construction permit, because you can't break

17 ground until you get a construction permit, but you can

18 do engineering.

MS. HODGE: Okay. And back -- a follow-up

20 on my prior question about would the age of a particular

21 boiler, you know, influence the types of controls. Would

22 there be any particular design characteristics of an

23 industrial boiler that could impact the economic

24 reasonableness and/or the technological feasibility?

Keefe Reporting Company

DR. STAUDT: Yeah. Well, in terms of the

2 economic reasonableness for sure, if there are some kind

3 of space constraint that makes it necessary to move a lot

4 of equipment around or do something that makes -- it

5 makes it very difficult -- obviously difficulty means

6 money, okay, so makes it much more expensive to install

7 the equipment, then it will affect -- impact the economic

8 reasonableness. Now, whether or not it affects technical

9 feasibility, the guides I've seen from EPA is that space

10 considerations by themselves are not -- do not make

11 something technically infeasible. It's really -- That

12 really tends to factor more into the economic

13 feasibility, because you can say, well, the process, yes,

14 can be treated with this technology, but it would be very

15 expensive to do it because they have to make these

16 modifications to the unit that costs a lot of money.

So space constraints have a tendency to factor

18 more into the area of economic -- what you call economic

19 reasonableness or the economics, as -- but potentially

20 could be -- affect the technical feasibility, but you'd

21 have to look at a specific -- if it has to do with the

22 process gas, that's really -- you know, the chemistry or

23 the process gas or something has more to do with the

24 technical feasibility.

Keefe Reporting Company

MS. HODGE: Okay. Thank you. I think -- I

2 believe you've testified that you did not do, you know,

3 specific analysis on the particular emission units to be

4 covered by this rule, but you are generally familiar with

5 the types of those -- types of units, aren't you?

DR. STAUDT: Oh, yes, yes.

MS. HODGE: Okay. Do you believe that there

8 could be a number of emission units subject to the

9 proposed rule that could not economically implement the

10 control technology you identify within the one-year or

11 less lead time?

DR. STAUDT: Well, you know, I -- nothing is

13 impossible, okay? I'll never say that nothing -- I'll

14 never say that it's impossible, but I would be

15 surprised -- I would have to look at what you're talking

16 about before I would say I agree or disagree, but just to

17 say a general statement, is it possible, perhaps, but

18 depending upon what it is, I might be -- you know, I

19 would be surprised.

MS. HODGE: So --

DR. STAUDT: If you're -- I don't believe

22 that anybody has to install an SCR to comply with this

23 rule, in my -- you know, I don't see -- I don't think

24 it's necessary, and so in most cases you're looking at

Keefe Reporting Company

1 boilers or SNCRs -- or rather -- excuse me -- combustion

2 controls or SNCR systems. I would be surprised if

3 someone needed to install an SCR to comply with this

4 rule.

MS. HODGE: Could you clarify on that and

6 just add a little bit of detail on why you believe that's

7 the case?

DR. STAUDT: Because the emission rates that

9 are in the rule are achievable and have been demonstrated

10 to be achievable with other control technologies that are

11 less expensive than SCR.

MS. HODGE: Do -- And do you mean combustion

13 controls?

DR. STAUDT: Well, combustion controls and

15 post-combustion controls like selective non-catalytic

16 reduction.

MS. HODGE: Okay. Thank you. The limits

18 proposed for industrial boilers in this proposal appear

19 to be among some of the most stringent in the nation.

20 What is the justification for such stringency, especially

21 for a coal state such as Illinois, and considering that

22 any additional controls will not be in place in time for

23 the effective compliance date of the ozone and fine

24 particulate standards?

Keefe Reporting Company

DR. STAUDT: That sounds like a question

2 that might be better directed to the Agency in terms of

3 the rationale for the rule, but I -- what I will say is

4 that there are other states that have far more stringent

5 rules than what's being proposed here, so --

MS. HODGE: Could you identify those

7 states --

DR. STAUDT: California.

MS. HODGE: -- let's just say for the

10 industrial boiler category?

DR. STAUDT: Certainly California. If you

12 look at Texas, down in the Houston-Galveston area, it's

13 far more stringent, so, you know, you're looking at other

14 cases where there's more stringent regulations, so -- for

15 industrial boilers.

MS. HODGE: Okay. Thank you. Are you aware

17 that within the state of Illinois that there are

18 circulating fluidized bed boilers that are as much as 24

19 years old and were not designed with SNCR in mind?

DR. STAUDT: I'm not aware of the age, but I

21 can tell you this much: I was in the business of selling

22 SNCR systems years ago, so I'm very, very familiar with

23 that technology, and so CFB boilers have unique

24 combustion characteristics that make them uniquely

Keefe Reporting Company

1 well-suited for selective non-catalytic reduction, and

2 whether they were built 24 years ago or not. They --

3 Essentially they were built with a time -- with a

4 residence time and a temperature and the gas and good

5 mixing characteristics, and that was before people

6 started putting SNCR systems on them. They're

7 basically -- The way they're built, they're well set up

8 for SNCR systems. I would be very surprised to see a CFB

9 boiler that did not perform very well with SNCR.

MS. HODGE: When you say that circulating

11 fluidized bed boilers can meet a 0.1 pound per million

12 BTU NOx limit, have you considered any potential

13 difficulties faced by retrofitting SNCR on the older

14 boilers where temperature and residence time are not

15 optimized?

DR. STAUDT: Well, again, as I stated

17 earlier, even before people were installing SNCR on CFBs,

18 CFBs were designed with specific combustion

19 characteristics, okay, even absent the existence of SNCR,

20 and those specific combustion characteristics, the

21 temperatures of the combustion, the exhaust gas and the

22 fact that you typically have a cyclone at the exit that

23 provides good mixing characteristics, but you also have a

24 fairly long residence time. That was before people were

Keefe Reporting Company

1 installing SNCR systems, and what we discovered is

2 that -- when we were selling -- when we were developing

3 the SNCR technology years ago is that CFB boilers that

4 weren't even built for SNCR technologies responded very

5 well to this technology because they had certain

6 combustion characteristics that lend themselves very,

7 very well to that technology, so even if you go back --

8 as I said, even if you go back 20 years ago -- and I was

9 in the SNCR business, I'm afraid, that long ago -- yeah,

10 CFB boilers were well-suited for SNCR.

MS. HODGE: Okay. Thank you. In Table 2-2

12 of the Agency's technical support document, this table

13 appears to for the most part include data from new

14 boilers. When you say that the emission limit can be met

15 without the use of flue gas recirculation, are you aware

16 that the boiler population in Illinois includes older

17 coal boilers that have been converted to gas-firing?

DR. STAUDT: Could you repeat the last part

19 of the question?

MS. HODGE: Sure. Are you aware that the

21 boiler population within Illinois includes some older

22 coal boilers that have been converted to gas-firing?

DR. STAUDT: Well, actually, an older coal

24 boiler that has been converted to gas-firing, generally

Keefe Reporting Company

1 that's probably even easier to retrofit, because a

2 furnace that's been designed for coal is going to be

3 bigger and is going to give you more time -- more -- it's

4 going to be bigger than one that's originally designed

5 for gas. That's just the way they're designed, because

6 with gas, you have to have lower gas velocities in a

7 coal-fired boiler because there's fly ash and things like

8 that and the combustion isn't quite as quick. Because of

9 that, it also gives you a lot more flexibility in terms

10 of what you can do with a boiler like that. An old

11 coal-fired boiler that is currently burning gas, it's

12 typically a field-erected unit. It's bigger, you

13 probably have the option for putting -- you have --

14 probably have room for overfire air, which you typically

15 would not have on a new gas-fired boiler because

16 they're -- generally a new gas-fired unit is more

17 compact.

But having said that, the data here is not all

19 for -- they're not all new units. It's a mixture of new

20 units as well as retrofits, and the attachment -- the

21 attached letter that has a more comprehensive list -- the

22 attachment to the TDS has a more comprehensive list and

23 actually identifies some of the retrofits, but you don't

24 find a big difference in the performance.

Keefe Reporting Company

MS. HODGE: Okay. Do you believe that such

2 boilers -- and by such boilers, I mean that -- coal

3 boilers that have been converted to gas-firing -- can

4 meet the 0.08 pounds per million BTU with or without flue

5 gas recirculation?

DR. STAUDT: Yeah. Without the flue gas

7 recirculation, they should be able to do it. 0.01, I

8 would say no. 0.01, you got to have flue gas

9 recirculation. 0.08, you can do it without flue gas

10 recirculation. Most of the current low NOx burners are

11 capable of achieving that level without flue gas

12 recirculation.

MS. HODGE: How would such an installation

14 use proper planning and boiler configuration as is stated

15 in the Agency's technical support document? Could you

16 just provide a few more details on that, please?

DR. STAUDT: Well, you know, essentially,

18 that's really boiler specific. You know, in terms of

19 planning -- in fact, if you could just direct me to the

20 page where that is, because I want to -- can you direct

21 me to the page where that's --

MS. HODGE: Sure. I'll try.

DR. STAUDT: I think it was a prefiled

24 question that referred to that, so I'm looking here.

Keefe Reporting Company

MS. BASSI: Mr. Fox?

HEARING OFFICER FOX: Yes, Ms. Bassi.

MS. BASSI: While they're looking, can I ask

4 a procedural question?

HEARING OFFICER FOX: Yes.

MS. BASSI: Was the Agency's testimony sworn

7 as written? I -- Did I miss that?

HEARING OFFICER FOX: They were -- All three

9 of them were sworn in as a panel and their testimony was

10 admitted as if read.

MS. BASSI: How about the responses to the

12 questions? Have those been accepted as testimony?

HEARING OFFICER FOX: Those have been filed

14 in effect, yes, as testimony before the Board.

MS. BASSI: So they have the weight of

16 testimony.

HEARING OFFICER FOX: Yes, they do.

MS. BASSI: Thank you.

HEARING OFFICER FOX: I'm sorry. I think I

20 may initially have misunderstood your question, but I

21 think we got to the answer.

MS. HODGE: Dr. Staudt, could you look at

23 page 13 of the TSD, please?

DR. STAUDT: Okay.

Keefe Reporting Company

MS. HODGE: It's down in the last paragraph.

DR. STAUDT: Yeah. Okay. Adequate -- yeah.

3 Planning -- okay. Well, part of that has to do with if

4 you're building a new boiler. Part of it had to do if

5 you were building a new boiler, you would actually plan

6 the boiler configuration. In the event of a retrofit,

7 you don't have the benefit of planning the boiler

8 configuration. You've got the boiler configuration that

9 you have to have. So in a retrofit, you do -- you've got

10 the boiler configuration you've got and you have to work

11 within the constraints of it. Most of these units that

12 they refer to in these Cleaver-Brooks studies, you can

13 see some of them are fairly small. It's much more

14 difficult with a small boiler, frankly, than it is with a

15 large boiler, because in the small package boilers, the

16 small ICI boilers, you don't have the space to do some of

17 the things you do on a large boiler. As I said, you

18 don't have the ability to put in overfire air.

If you're talking about an older -- you said a

20 26-year-old field-erected boiler that has now been

21 converted from coal to gas, you know, if someone were

22 building a gas-fired boiler today, to save money they'd

23 make it really tight and compact. For the purpose of NOx

24 control, they'd like to make it really big like that

Keefe Reporting Company

1 field-erected coal-fired boiler that's been converted to

2 gas, so what you really have when you have an older

3 boiler that has been converted to gas, you've got a

4 pretty good situation from the perspective of NOx

5 control, because you may be able to do other things like

6 adding overfire air and doing other things with staging

7 air that you would have a difficult time with a new

8 gas-fired unit, because a new gas-fired unit, the

9 constraints are actually more difficult because they try

10 to make them as small as possible to save space and cost.

MS. HODGE: Okay. Thank you. Does this TSD

12 include any information on such retrofitted boilers, and

13 if so, could you point us to --

DR. STAUDT: Sure. Go back to the -- We

15 talk about retrofitting boilers with -- retrofitted

16 industrial boilers with SNCR.

MS. HODGE: Is that coal-fired boilers?

DR. STAUDT: Coal-fired boilers. Here,

19 stoker -- Table 2-12b.

MS. HODGE: That have been converted to gas?

DR. STAUDT: Oh, converted to gas.

MS. HODGE: That have been converted to gas.

DR. STAUDT: No, I don't think it -- I don't

24 know that it does.

Keefe Reporting Company

MS. HODGE: Okay. Thank you. In response

2 to the prefiled question 18 of IERG -- and that question

3 was does the Agency believe that a larger than 250

4 million BTU per hour coal-fired boiler using Illinois

5 coal can meet a NOx limit of 0.18 pounds per million BTU

6 without SCR -- reference was made to Ameren's Sioux

7 unit 1. This unit is a utility boiler. Can you cite any

8 industrial coal boilers that are meeting a limit of 0.18

9 million -- 0.18 pounds per million BTU without SCR,

10 excluding CFBs?

DR. STAUDT: Okay. Let's go to -- if you go

12 back to near the -- it's on this cost effectiveness Table

13 2-17c on page 45, all right, and this is information, in

14 fact. You can look at -- If you look at coal-spreader

15 stoker, coal stoker, you can see units here, and

16 reference 1 is the 1994 ACT document, so it shows an SNCR

17 system on a coal stoker in the range of 0.15 to 0.18.

18 Now the reference 1, again, is the 1994 ACT. I would

19 venture to say that that document using data from close

20 to 15 years ago represents, you know -- we can do better

21 today than we could then, so, you know, there are -- you

22 know, the technology is there to provide the emissions

23 levels below 0.18, and particularly if you combine

24 combustion controls with SNCR, you can do better than

Keefe Reporting Company

1 that.

MS. HODGE: I'm having a hard time just

3 following. Can you point us to the exact lines on the

4 table --

DR. STAUDT: Okay. If you go to page 45, go

6 down along -- follow the -- you're talking about a stoker

7 boiler, right, as what kind of --

MS. HODGE: Yes.

DR. STAUDT: Okay. Go down to coal-spreader

10 stoker, okay, and coal stoker, all right? And you can

11 see the second one there shows with ammonia SNCR. It's

12 getting under 0.18 pound per million.

MS. HODGE: And what size was that boiler in

14 this example?

DR. STAUDT: It doesn't say. The

16 information wasn't available.

MS. HODGE: So we don't know that it's

18 greater than 250 million BTU, right?

DR. STAUDT: It's -- We don't know.

MS. HODGE: Okay. Is there one on this

21 table that is over 250 million BTU?

DR. STAUDT: Well, there's one that says 250

23 to 750, it says 0.22; however, with urea. Ammonia will

24 typically work -- may work better than urea, but, you

Keefe Reporting Company

1 know, 0.18 is certainly within the capabilities of --

2 without a doubt a combination of combustion controls and

3 SNCR.

MS. HODGE: So did you review any

5 information on boilers larger than 250 million BTU that

6 could in fact meet the 0.18? I mean, this says 0.22, and

7 my understanding is your testimony is that you think it

8 could meet the 0.18?

DR. STAUDT: Well, you just -- we just

10 talked earlier about anything over 250 million BTU.

11 Certainly there are utility units -- there are small

12 utility units as well that are able to achieve that.

MS. HODGE: What about for an industrial

14 boiler, though?

DR. STAUDT: Well, the data isn't as good --

16 to be honest, the data isn't published as much on

17 industrial boilers.

MS. HODGE: So --

DR. STAUDT: So -- But we do have this to

20 rely on, and we also have -- do we have -- I would like

21 to get back to you on that, because I've got some

22 references that I'm going to pull out for you.

MS. HODGE: And I think that would be

24 helpful for us, if you could do that, and just for the

Keefe Reporting Company

1 record, you know, my understanding of this table is that

2 the only unit that's greater than 250 million BTU, that

3 we're showing an actual limit of 0.22. Okay. In your

4 experience, have you found that a number of older

5 industrial PC boiler installations lack the space

6 necessary for advanced combustion controls?

DR. STAUDT: It depends upon the combustion

8 controls you're looking at. All of them can adopt

9 combustion controls. It depends upon which combustion

10 controls you're looking at. Many of them can't put in --

11 you know, they may not have the room for a separated

12 overfire air. Most can incorporate some form of overfire

13 air.

MS. HODGE: How would this affect your view

15 of RACT in such situations?

DR. STAUDT: Well, you know, I don't see

17 where it has a big effect except for the fact that as

18 we've incorporated into this, smaller boilers have a

19 tendency -- we've given smaller boilers higher emissions

20 levels than the large boilers, so that's why the utility

21 units have stricter limits than the industrial units over

22 250, which have a stricter limit than the industrial

23 units from 100 to 250.

MS. HODGE: Okay. Thank you. Could

Keefe Reporting Company

1 ammonium bisulfate also blind the bags in a baghouse and

2 corrode the baghouse internals?

DR. STAUDT: It potentially could, but the

4 way you -- but that's a matter of managing your baghouse

5 temperature. If you maintain your baghouse temperature

6 at the proper level, you won't have that problem. Where

7 that has been a problem is people who had leakages in

8 their baghouses and their baghouse temperatures dropped,

9 so if you maintain your baghouse temperature at the

10 proper temperature, it's -- you're not going to have that

11 problem. Potentially you could, but it's a matter of

12 managing your -- how you manage your facility and being

13 careful to keep your baghouse temperature adequately

14 high.

MS. HODGE: Thank you. If an SNCR system is

16 pushed beyond its capabilities by adding more and more

17 ammonia, would that exacerbate the formation of ammonium

18 bisulfate?

DR. STAUDT: It potentially could, but

20 these -- the limitations that we have here shouldn't make

21 that -- shouldn't cause that to happen, you know, if

22 you're -- unless you're operating the system improperly,

23 but these systems are designed to be capable of achieving

24 the emission rates that we're looking at here.

Keefe Reporting Company

MS. HODGE: Based on your experience, what

2 percent of the emission units identified as being subject

3 to this proposed rule will in fact be able to install the

4 necessary controls in the time frame currently dictated

5 by the rule and in the cost range that you've indicated?

DR. STAUDT: Well, as I stated earlier, I

7 think most of them are capable of doing it. We have not

8 looked -- In the TSD we did not explicitly have a section

9 examining time, but, you know, if you're looking at a

10 one-year time frame, potentially most of them could, but

11 again, you're looking at everybody installing it at once,

12 so, you know, that might -- that could present that

13 issue.

MS. HODGE: Okay. Did you consider the

15 impact of the use of SCR as MCR on wastewater discharges

16 and management of solid waste? For example, did you

17 consider cost and feasibility associated with additional

18 treatment of wastewater and/or disposal of pollution

19 control waste?

DR. STAUDT: Well, there isn't a wastewater

21 problem. I'm not sure what they're talking about. I've

22 been to lots of SCR systems and I -- lots of SNCR

23 systems, and I don't know what you're talking about.

MS. HODGE: So you're not aware of any

Keefe Reporting Company

1 wastewater problems.

DR. STAUDT: Well, what you're -- what you

3 may be getting at is the potential for ash -- ammonia

4 getting on fly ash. That's the only thing that I can

5 imagine that you might be getting -- looking at, for

6 people who wet process their fly ash, but an SNCR system

7 doesn't produce -- there isn't a wastewater stream as a

8 result of an SNCR system.

MS. HODGE: And I think you're correct. I

10 think with the management -- storage and management of

11 ash --

DR. STAUDT: Okay. So --

MS. HODGE: You know, I believe that most

14 people have permitted discharges associated with those

15 kinds of units.

DR. STAUDT: Yeah.

MS. HODGE: Did you evaluate, you know,

18 potential impacts there?

DR. STAUDT: Well, that's considered in the

20 cost analysis. You know, most of these facilities, you

21 know, these -- the cost estimates were not -- were based

22 upon the published information based upon real facilities

23 out there, hundreds of them that use these technologies,

24 and so in reality, there is a potential for ammonia to

Keefe Reporting Company

1 get on the fly ash, but there's a way of managing that.

2 The way you manage that is you design your system

3 properly, you operate it properly so that you don't have

4 high ammonia slip, and the degree to which you will have

5 a problem with ammonia on fly ash really depends upon a

6 number of things. One is how the fly ash is handled. If

7 it's handled in a dry manner, generally it's not a

8 problem. If you wet sluice it, there's a risk, depending

9 upon the actual chemistry of the fly ash. There may be a

10 slight ammonia odor, but again, it goes back to operating

11 your system properly and controlling that ammonia slip.

12 There are literally hundreds of these systems out there

13 and the businesses haven't gone out of business. They

14 still run these systems.

MS. HODGE: Are they all dry systems?

DR. STAUDT: Excuse me?

MS. HODGE: Are --

DR. STAUDT: I'm talking about SNCR --

MS. HODGE: Would their fly ash be managed,

20 then, as --

DR. STAUDT: No. I mean, there are systems

22 with wet systems that operate SNCR systems, and I work

23 with utilities who have SNCR systems and some of them

24 have wet sluicing systems.

Keefe Reporting Company

MS. HODGE: Okay. What about for industrial

2 boilers?

DR. STAUDT: Well, for industrial boilers,

4 it's exactly the same situation, okay? The chemistry

5 doesn't change. It's just that it's a smaller boiler.

MS. HODGE: Could you point us to where in

7 the TSD it discusses consideration of that kind of

8 information, you know, the cross-media impact?

DR. STAUDT: Excuse me?

MS. HODGE: Could you point to the location

11 within the Agency's TSD where there's information that

12 shows the consideration of, you know, the cross-media

13 impacts in your analysis?

DR. STAUDT: Well, we didn't explicitly

15 address what you call cross-media impacts. The fact is,

16 these are technologies that have been used at hundreds of

17 facilities. I mean, it's -- hundreds of facilities, if

18 not, you know, close to 1,000 facilities have SNCR; SCR,

19 again, close to 1,000 facilities to roughly 200 utility

20 coal-fired units as well as hundreds of other types of

21 facilities, and these what you're calling cross-media

22 impacts, this has been -- you know, this is something

23 people have been living with for years. They've -- It's

24 understood if people have -- know how to design these

Keefe Reporting Company

1 systems, they install them. It's not like we're talking

2 about, you know, the very first one, so the questions

3 that -- you know, the questions about these things are --

4 you know, it's as if this is some kind of newfangled

5 technology that's never been used. This has been

6 installed on hundreds of facilities worldwide.

MS. HODGE: No, my question is, is there any

8 information in this TSD that shows how that issue was

9 considered, or is this just for air pollution -- the cost

10 and the technology, is this just related to the air

11 pollution control aspects?

DR. STAUDT: We focus primarily -- We

13 focused on what the technology was capable of doing and

14 what the technology is shown to -- has shown to cost and

15 on facilities that have to think about this stuff, okay,

16 so while we did not explicitly have a chapter on

17 cross-media impacts, I guarantee you every one of these

18 facilities that has installed an SNCR system on a

19 coal-fired unit or an SCR system on a coal-fired unit has

20 thought about this, and that's captured in their costs,

21 their reporting costs.

MS. HODGE: Okay. You testified that you

23 guarantee that that's factored into the cost here.

DR. STAUDT: I'm telling you that it is --

Keefe Reporting Company

1 that the costs here are based upon reported costs for

2 the -- this equipment.

MS. HODGE: Okay.

DR. STAUDT: Okay. And these are real

5 people who use this stuff.

MS. HODGE: Thank you. Do you have any

7 follow-up? I have a couple more, but I don't know if you

8 had anything particular on this.

MS. BASSI: No, not yet.

MS. HODGE: Okay. Then I have just a couple

11 more questions. For EGUs, do you consider SCR or SNCR to

12 constitute RACT, or would it be beyond RACT?

DR. STAUDT: Are we getting to the prefiled

14 questions here? I think that was one of my prefiled

15 Midwest Gen questions.

MS. HODGE: Pardon me?

DR. STAUDT: This is identical to one of the

18 prefiled questions I got from Midwest Generating, so are

19 we going to go -- are we shifting over to prefiled

20 questions now?

MS. BASSI: You can answer it again. I

22 don't care.

MS. HODGE: Okay. We -- We'll -- I'll be

24 happy to wait.

Keefe Reporting Company

MS. BASSI: Okay. We'll wait.

MS. HODGE: Okay. Thank you. That's all

3 the questions that I have for Dr. Staudt.

HEARING OFFICER FOX: Of the general

5 questions you --

MS. HODGE: Of the general questions, yes.

HEARING OFFICER FOX: Very good. And,

8 Ms. Bassi, did I understand you to indicate that you had

9 some general questions as well following up on the

10 answers we've just heard, or did I misunderstand you?

MS. BASSI: No, I -- just one second. I

12 have one question in follow-up on one of Miss Hodge's.

13 You mentioned that there were more stringent rules for

14 NOx limits in California and the Houston area. Were

15 those adopted as RACT rules?

DR. STAUDT: I don't know if they were RACT

17 rules or not. They were -- They had to do with

18 attainment.

MS. BASSI: Okay.

DR. STAUDT: They had to do with attainment,

21 so from that perspective, there may be some similarity,

22 but they weren't -- they were attainment.

MS. BASSI: And this may not be a proper

24 question for you, Dr. Staudt, but for the Agency

Keefe Reporting Company

1 generally. Do you recognize that there is a difference

2 between a rule that is adopted for purposes of satisfying

3 a RACT, slash, RACM -- R-A-C-M -- requirement as opposed

4 to one that is adopted just for purposes of attainment?

DR. STAUDT: That might be better for the

6 Agency --

MS. BASSI: Yeah.

DR. STAUDT: -- because I've never heard

9 RACM before, so that's a new acronym for me.

HEARING OFFICER FOX: Ms. Hodge, should

11 we -- shall we turn to the prefiled answers to the

12 questions that were filed by IERG at this point?

MS. HODGE: Okay. But, now, these questions

14 go more generally to some of the agency witnesses and not

15 just Dr. Staudt.

HEARING OFFICER FOX: Yes, although they

17 appear to be to a large extent directed to Mr. Staudt --

18 or Dr. Staudt, or that Dr. Staudt would be the most

19 likely person to answer it. I'm sure the Agency's

20 witnesses will be available to supplement any answers. I

21 will just start, of course, with number 1. Recognizing

22 that there are four subparts to it, let me begin with

23 number 1 itself, which addresses the Agency's intent with

24 regard to switching fuel sources. Did IERG have any

Keefe Reporting Company

1 clarification or follow-up with regard to question 1 --

2 the answer to question 1 itself?

MS. HODGE: No, I do not.

HEARING OFFICER FOX: Does any other

5 participant have any follow-up to question 1 before we

6 turn to the subsections? Seeing none, Ms. Hodge, let me

7 turn to question number 1a regarding the Agency's

8 expectations with regard to fuel switching. Did IERG

9 have a follow-up or clarification in that regard?

MS. HODGE: No.

HEARING OFFICER FOX: None? Any other

12 participants? Seeing no response, sub b, 1b, regarding

13 the Agency's consideration of the availability of

14 alternative fuels, did IERG have follow-up or

15 clarification with regard to that?

MS. HODGE: No.

HEARING OFFICER FOX: Very well. Any other

18 participant? Seeing no indication that that is so, sub

19 c, number 1c, regarding the Agency's belief about the

20 feasibility of conversion, fuel conversion, any

21 follow-up, Ms. Hodge?

MS. HODGE: No.

HEARING OFFICER FOX: None? Any other

24 participants? Seeing no response, we'll turn, then, to

Keefe Reporting Company

1 the final subpart d regarding the conversion of boilers.

2 Ms. Hodge, any follow-up there?

MS. HODGE: No.

HEARING OFFICER FOX: Very well. Any other

5 participants? Seeing no indication that there is, we

6 will turn to question number 2, which regards agency

7 determinations regarding Illinois units that may be

8 affected by this proposal. A follow-up, Ms. Hodge?

MS. HODGE: No.

HEARING OFFICER FOX: None? Any other

11 participants? All right. Turning ahead, then, to number

12 3, the Agency's consideration of RACT emission limits

13 from other states, a follow-up, Ms. Hodge?

MS. HODGE: No.

HEARING OFFICER FOX: Any other participants

16 on question number 3 with clarification? None? Number

17 4 --

MS. HODGE: Excuse me.

HEARING OFFICER FOX: I'm sorry, Ms. Hodge.

MS. HODGE: Excuse me, Mr. Fox. I think I

21 would like to ask just a follow-up on question number 3.

HEARING OFFICER FOX: Please go ahead.

MS. HODGE: Could the Agency provide the

24 states -- the other states it did consider?

Keefe Reporting Company

MR. KALEEL: Yes, we can.

MS. HODGE: Could you do that today or would

3 that be something that you would do later?

MR. KALEEL: Yeah, we should be able to

5 provide that today.

HEARING OFFICER FOX: And --

MR. RAO: Could you just state for the

8 record what other states you considered?

MR. KALEEL: Yes. We've looked at -- and it

10 depends a little bit on which source category, but for

11 boilers, for example, we've looked at Wisconsin, Ohio,

12 Texas, south coast in California, Missouri, Indiana,

13 Pennsylvania and some of the northeast states.

MR. RAO: Thank you.

MS. HODGE: And do all of these other

16 states, do they have NOx RACT rules?

MR. KALEEL: I believe most of them have NOx

18 RACT rules. I think Dr. Staudt had already mentioned

19 that the limits in Texas and perhaps south coast were

20 adopted for other purposes, but I believe most of the

21 other states adopted them for the purpose of meeting NOx

22 RACT.

MS. HODGE: And are you aware, have they all

24 been approved as SIP revisions by USEPA, these RACT rules

Keefe Reporting Company

1 in these other states?

MR. KALEEL: It's my understanding that they

3 have been, or at least in most cases.

MS. HODGE: Thank you. Okay. That's all I

5 have. Thank you.

HEARING OFFICER FOX: Very good. Prepared

7 to turn to number 4, Ms. Hodge?

MS. HODGE: Uh-huh.

HEARING OFFICER FOX: Very good. Question

10 number 4 regardless -- regarding the Agency's awareness

11 of particular boiler sizes, Ms. Hodge, any follow-up on

12 your part for IERG?

MS. HODGE: No.

HEARING OFFICER FOX: Very well. Any other

15 participants? There is a subpart "a" also, Ms. Hodge, of

16 course, which I overlooked -- I apologize -- regarding

17 consideration of large boilers. Any follow-up to the

18 written answer?

MS. HODGE: No.

HEARING OFFICER FOX: Any other

21 participants? Seeing no indication, question number 5

22 does have five subparts. Let me turn to the base

23 question itself, Ms. Hodge, regarding the proposal as it

24 applies to gas-fired boilers of a particular size. The

Keefe Reporting Company

1 Agency has filed a written answer, "Yes." Is that

2 sufficient or do you have a follow-up?

MS. HODGE: That is, and quite frankly, I

4 don't have any follow-up on any of the subsets in

5 question 5.

HEARING OFFICER FOX: Thanks for helping us

7 move expeditiously. Of course is there -- I must check

8 if there's any other participant that would wish to

9 follow up with the answers provided by the Agency to

10 subparts "a" through "e" on question number 5. Seeing no

11 interest in that, Ms. Hodge, again, thank you for letting

12 us move to number 6 regarding uncontrolled emissions.

13 This question does have two subparts, but let us turn to

14 the base question, Ms. Hodge, if you have any

15 clarifications on that.

MS. HODGE: I do not, and again, not any on

17 the subparts.

HEARING OFFICER FOX: And of course,

19 Ms. Bassi, if you have a follow-up.

MS. BASSI: I do have some follow-ups on

21 this notion of the baseline, and perhaps they're not

22 direct follow-ups to question number 6 that IERG has

23 presented, but if we could get to the notion of baseline

24 and talk about that for a minute, I'd appreciate it.

Keefe Reporting Company

1 When the -- Is it the case that the baseline that the

2 Agency was using for this rulemaking is 2002?

MR. KALEEL: That's correct.

MS. BASSI: Okay. And -- Thank you. And so

5 as a baseline, what does that mean? What is the

6 baseline?

MR. KALEEL: For the purposes of planning

8 for ozone and PM2.5, I think of 2002 if not as a baseline,

9 at least as a base year, which is kind of an anchor point

10 both for developing emissions inventories, for planning,

11 and also an anchor for demonstrating reasonable further

12 progress, which is a separate requirement that the State

13 of Illinois needs to meet.

MS. BASSI: So as 2002 as the base year,

15 then if -- please correct me if I'm wrong -- as I

16 understand what you're saying is you look at the

17 inventory and determine what the emission levels are in

18 2002 and then that is the point from which reductions are

19 measured; is that correct?

MR. KALEEL: For the purposes of reasonable

21 further progress, that's correct, yes.

MS. BASSI: Okay. So does the baseline then

23 assume whatever control measures might already be

24 installed on a unit such as low NOx burners?

Keefe Reporting Company

MR. KALEEL: I guess I'm -- maybe we're

2 confusing uncontrolled emissions from baseline emissions.

3 Our inventory should reflect whatever controls were in

4 place at each and every unit in 2002. That -- We haven't

5 made a determination that those controls don't count from

6 a standpoint of meeting a RACT requirement. I mean, if a

7 company already has controls and that does figure into

8 the cost of complying with the RACT rule, that -- it's

9 really kind of mixing issues there from reasonable

10 further progress.

MS. BASSI: Thank you.

MR. KALEEL: In general, for reasonable

13 further progress, the non-attainment area as a whole, not

14 unit by unit, but as a whole must demonstrate reductions

15 to the level needed for attainment.

MS. BASSI: Thank you.

HEARING OFFICER FOX: Anything further,

18 Ms. Bassi?

MS. BASSI: No. Thank you.

HEARING OFFICER FOX: Surely. Were there

21 other participants that had follow-ups or clarifications

22 with regard to question 6 or any of its two subparts?

23 Very well. Ms. Hodge, we can move forward to question

24 number 7 regarding the Agency's evaluation of stoker

Keefe Reporting Company

1 boilers. Did IERG have a follow-up?

MS. HODGE: No.

HEARING OFFICER FOX: Any clarifications on

4 the part of other participants? Seeing none, we will

5 turn to question 8, which does have three subsequent

6 subparts. Question 8 addresses the Agency's belief with

7 regard to the feasibility of SCR. Follow-up on the part

8 of IERG, Ms. Hodge?

MS. HODGE: No, and again, not on any of the

10 subparts.

HEARING OFFICER FOX: And any other

12 participants? Seeing no follow-ups on question number

13 8 -- thank you again, Ms. Hodge -- we can turn to

14 question number 9 regarding the Agency's performance of

15 analyses. A follow-up, Ms. Hodge?

MS. HODGE: No.

HEARING OFFICER FOX: No? Any further

18 clarifications? Seeing none, question number 10

19 regarding the Agency's information gathering with regard

20 to retrofit controls. Ms. Hodge, follow-ups on that

21 issue?

MS. HODGE: No.

HEARING OFFICER FOX: Seeing none from IERG

24 or any other participant, let's proceed to question

Keefe Reporting Company

1 number 11 as filed by IERG. That addresses sources --

2 categories of emission units that do not now exist in the

3 area covered by the rule. Any follow-up, Ms. Hodge?

MS. HODGE: Yes.

HEARING OFFICER FOX: Please proceed.

MS. HODGE: Thank you. In response to

7 prefiled questions, the Agency responded to questions

8 concerning the inclusion of emission unit categories that

9 do not exist in the non-attainment areas or which are not

10 operational. Regarding emission units which do not

11 exist, your response alluded to the possible expansion of

12 the non-attainment area in the future. Based upon the

13 way the rule is written at this time, explicitly

14 specifying the geographical extent of the non-attainment

15 area, would the designation of a new non-attainment area

16 require a rule revision?

MR. KALEEL: Yes, it would, if -- in this

18 particular example we -- or question we referred to the

19 possibility of Massac County, Illinois, southern

20 Illinois, becoming non-attainment. Massac County is not

21 currently listed as one of the counties that this rule

22 would apply. If it does become non-attainment, we would

23 have to propose an amendment to the rule.

MS. HODGE: Thank you. In your response to

Keefe Reporting Company

1 the prefiled questions on this topic, you refer to Massac

2 County and Rock Island County as two examples of possible

3 areas that would be included in a rule, thereby

4 justifying inclusion of an emission source that exists in

5 Massac County but not in the areas currently covered by

6 the proposed rule. These areas that the USEPA is

7 proposing for non-attainment are in regard to the 24-hour

8 fine particulate standard, so my question is, how does

9 the averaging times and limits of the proposed rule

10 address the unique characteristics of this type of

11 violation?

MR. KALEEL: The -- I mean, it is a very

13 good point. The averaging times considered in this rule

14 are both annual and ozone season. They don't explicitly

15 address a daily standard. However, many of the controls

16 that are envisioned here, especially combustion controls,

17 they're either on or they're off, and we would expect

18 that these controls would help on a 24-hour daily basis

19 as much as seasonal or annual. There may be some

20 circumstances where that doesn't work, but --

MS. HODGE: Would the Agency have to do a

22 specific analysis there to determine whether these NOx

23 reductions would even be required?

MR. KALEEL: Well, there'd be a number of

Keefe Reporting Company

1 analyses that the State would be obligated to perform for

2 the 24-hour standard. As of now, there are no

3 non-attainments yet promulgated. The EPA hasn't

4 finalized those non-attainment designations yet. What

5 would be envisioned once an area or new areas become

6 non-attainment is that -- is to start a new planning

7 cycle, including evaluation of RACT, including reasonable

8 further progress and a demonstration of attainment, so

9 there would be a number of analyses that we would have to

10 look at. We would have to look again at this rule and

11 see whether or not it would exactly match the

12 requirements of the standard.

MS. HODGE: The Agency and the States of

14 Iowa and Kentucky have indicated that they disagree with

15 USEPA's proposal in this matter. Is there anything in

16 the Agency's analysis here of the emission sources in

17 these two areas -- and again, I'm referring to Massac

18 County and Rock Island County -- that indicate that the

19 imposition of the proposed NOx rule is necessary or

20 reasonable?

MR. KALEEL: I think it's our position today

22 that the exceedances or violations of the standards that

23 have occurred in Davenport, Iowa, and Paducah, Kentucky,

24 that Illinois sources did not contribute to that. That

Keefe Reporting Company

1 would speak to the conditions that have occurred for

2 present-day air quality from the standpoint that a future

3 analysis, a modeling analysis or future violations of the

4 standard that might occur before attainment is achieved,

5 it may change that conclusion, but our belief today is

6 that Illinois sources do not significantly contribute.

MS. HODGE: Thank you. Does the Agency

8 intend to purposefully include emission units that don't

9 exist in the non-attainment areas, and if so, what is the

10 basis for making this determination?

MR. KALEEL: I'm sorry. I'm not sure I'm

12 totally following your question.

MS. HODGE: In the NOx rule right now, what

14 is the basis for inclusion of these types of units; for

15 example, cement kilns?

MR. KALEEL: I think I attempted to answer

17 that. The -- At least to a certain extent, the inclusion

18 of those categories stem from two things. In the case of

19 aluminum melting furnaces, there was an aluminum melting

20 furnace in existence in Chicago in the initial inventory

21 year that we examined to identify units that may be

22 subject to RACT. That unit or that facility in Chicago

23 has since shut down. We don't know their intention as

24 far as potentially reopening, but as of now it is not

Keefe Reporting Company

1 open, and my understanding, it's surrendered its permit.

2 We have no indication they intend to open. We also have

3 no indication that they've torn the facility down or are

4 using it for some other purpose, so our preference is to

5 leave the limit where it is. In regards to cement kilns,

6 quite frankly, the existence of the emission limits stem

7 from the fact that when we initially drafted the rule,

8 the rule was going to be proposed as a state-wide

9 applicability, and there are other cement kilns in the

10 state of Illinois that are located in attainment areas of

11 the state. Subsequent modeling has shown that we don't

12 need to implement attainment area controls. The emission

13 limit for cement kilns was still there. We prefer to

14 leave it in the rule, again for the circumstance that

15 under the new ozone standard, under the revised PM2.5

16 standard, there may be some adjustments necessary to

17 non-attainment boundaries.

MS. HODGE: But didn't you just testify

19 that -- you said a rule revision would be necessary to

20 extend this out to areas other than the non-attainment

21 areas covered here?

MR. KALEEL: Yes.

MS. HODGE: Again, is there a basis to

24 include these kinds of units or cement kilns at this

Keefe Reporting Company

1 point in time if the rule revision would be necessary

2 anyway?

MR. KALEEL: Well, the -- I guess the

4 basis -- and maybe from your perspective it's not a valid

5 basis -- but the engineering work, the cost analysis has

6 been performed. The limits have been established. They

7 would send a clear message to units that potentially

8 become non-attainment in the future that they would know

9 what their target is, what it is they have to meet, but

10 there would be a rule revision needed. Your point is

11 well taken.

MS. HODGE: Did the Agency perform any

13 outreach related to its proposal here to owners/operators

14 of cement kilns located outside the non-attainment areas?

MR. KALEEL: Our initial outreach was really

16 geared towards state-wide application of the rule, so my

17 understanding is that at least some of the owners or

18 operators were aware of these requirements or at least of

19 our proposal.

MS. HODGE: Has the Agency received any

21 comments on its proposal here from owners/operators of

22 cement kilns?

MR. KALEEL: Not to my recollection.

MS. HODGE: Okay. That's all I have.

Keefe Reporting Company

HEARING OFFICER FOX: Ms. Bassi had a

2 follow-up.

MS. BASSI: Mr. Kaleel, I'm sorry. I didn't

4 hear what you said about the aluminum melter's permit.

5 Did you say that it has been surrendered?

MR. KALEEL: My understanding that it has

7 been surrendered, yes.

MS. BASSI: And so if permit has been

9 surrendered and particularly if some period of time has

10 passed since that point, would not the aluminum smelter

11 have to go through some sort of new source review in

12 order to reopen?

MR. KALEEL: In theory, yes.

MS. BASSI: Okay. Is it possible if that

15 were the case that the emission limitations on the

16 aluminum melter would be even more stringent than this

17 rule theoretically?

MR. KALEEL: Theoretically, yes.

MS. BASSI: Thank you. One other question.

HEARING OFFICER FOX: Go ahead.

MS. BASSI: When -- Were -- These sources

22 that have the potential of being located in future

23 non-attainment areas, when the rule -- when the Agency

24 pulled back the scope of the rule during its outreach

Keefe Reporting Company

1 process and -- to the non -- to the current

2 non-attainment areas, were these sources that are located

3 in potential future non-attainment areas notified of this

4 pullback so that they would believe that the rule was no

5 longer applicable to them?

MR. KALEEL: We did not make a specific

7 notification, like an e-mail or anything like that, to

8 all affected units, but we have done outreach. We've

9 made various presentations to various groups about what

10 our proposal includes. I'm quite certain we highlighted

11 quite plainly the change in the applicability from being

12 state-wide to just non-attainment area, and I feel

13 confident that we had sufficient outreach that people

14 were aware of that.

MS. BASSI: Thank you.

HEARING OFFICER FOX: Sure. Ms. Hodge, did

17 you have any further follow-up with regard to question

18 number 11?

MS. HODGE: No.

HEARING OFFICER FOX: Very well, and was --

21 I think we established that there were no other

22 participants that had follow-up with regard to 11. We

23 can turn, then, Ms. Hodge, to number 12 regarding IERG's

24 question regarding the definition of industrial boiler.

Keefe Reporting Company

1 There were two brief answers to the base question and the

2 single subpart. Did you have follow-up or --

MS. HODGE: I do.

HEARING OFFICER FOX: Please go ahead.

MS. HODGE: If a heat recovery steam

6 generator recovering heat from the exhaust of, A,

7 process, B, turban, or C, engine, is considered a boiler

8 for proposed -- for this proposed rule, then does the

9 Agency intend to define the boiler's rated heat input

10 capacity as a direct heat input to the heat recovery

11 steam generator from combustion of fuel in the heat

12 recovery steam generator -- for example, from a duct

13 burner -- or does it intend to also include the heat

14 input from the upstream process in the rated capacity?

MR. KALEEL: I'm not sure at this point I

16 have a specific answer. I think if it's okay, I'd prefer

17 to address that in writing. That sounds like a unique

18 circumstance.

MS. HODGE: That's fine. If the rated heat

20 input capacity of the boiler is intended to include

21 energy from the exhaust of an upstream unit, then how

22 does the Agency anticipate resolving the NOx emissions

23 and controls from the unit and from the heat recovery

24 steam generator?

Keefe Reporting Company

MR. KALEEL: I don't have a specific answer

2 to that right now. I think we'd prefer to respond to

3 that in writing.

MS. HODGE: Okay. Thank you. Is there any

5 language in the current proposal that the Agency

6 understands to resolve the regulatory status of upstream

7 units and heat recovery steam generators? If not, is the

8 Agency contemplating introducing language to clarify this

9 issue?

MR. KALEEL: It's possible that we need to

11 make some sort of a clarification.

MS. HODGE: If the Agency does intend to

13 regulate heat recovery steam generators as boilers, has

14 the Agency performed any analysis to determine either

15 technical feasibility or economic reasonableness?

MR. KALEEL: We have not performed any kind

17 of a unit-by-unit assessment. Again, if this is a unique

18 situation that you're describing, we've not done that.

MS. HODGE: Okay. Thank you. Thank you.

20 And then my final question, follow-up on this, is that

21 again, in this situation where you would have a heat

22 recovery steam generator, would that unit be regulated

23 under this proposal? And that's -- my understanding is

24 you're going to get back to us on that, but we're

Keefe Reporting Company

1 interested too in the interplay of regulation under the

2 proposed subpart Q for IC engine rules too. Would it

3 perhaps be regulated under subpart Q? Would it be

4 regulated here? Would it be regulated both places? I

5 think we just need clarification on that, please.

MR. KALEEL: Yes, we'd be happy to provide

7 that.

MS. HODGE: Okay. I do have a couple more,

9 please.

HEARING OFFICER FOX: With regard to 12?

MS. HODGE: Uh-huh.

HEARING OFFICER FOX: Please go ahead.

MS. HODGE: Okay. In response to prefiled

14 questions, the Agency mentions that it had not performed

15 an analysis of the technical feasibility or cost of

16 controlling heat recovery steam generators, cogen units,

17 chillers. Have these units been included in the estimate

18 of emission reductions included in Tables 10-1 and C-2 of

19 the technical support document?

MR. KALEEL: I'm sorry. We moved to

21 question 13? Is that just a follow-up --

MS. HODGE: No, we're still on 12.

MR. KALEEL: And I'm not aware that we've

24 done any specific analyses in regards to gas-fired

Keefe Reporting Company

1 chillers.

MS. HODGE: Okay. Thank you. Okay. That's

3 all I have. Thank you.

HEARING OFFICER FOX: Very good. Were there

5 any other follow-ups with regard to question 12? I know,

6 Mr. Kaleel, you've indicated a willingness to provide

7 some clarifications in writing, and I know -- I think

8 Ms. Hodge has indicated her appreciation. The Board

9 appreciates that willingness as well and looks forward to

10 that information. That would bring us, of course,

11 Ms. Hodge, to IERG's question number 13. Did you have

12 any follow-ups with regard either to the base question --

MS. HODGE: No.

HEARING OFFICER FOX: -- or the subparts?

MS. HODGE: I do not.

HEARING OFFICER FOX: You do not? Any other

17 participants? Sir, if you would before going to your

18 question please provide the court reporter with your name

19 and spelling and any organization you might represent.

MR. DENNIS: It's Pat Dennis, D-E-N-N-I-S.

21 I'm with ADM. And point of clarification, the answer to

22 13 says, "If refrigerant is heated directly by gas

23 firing, it's a process heater," and I'm wondering if the

24 Agency meant to say indirectly there, because a

Keefe Reporting Company

1 process -- to be a process heater, the unit should

2 incorporate indirect heat transfer rather than direct

3 heat transfer.

MR. KALEEL: I think you're right, that it

5 meant indirect heating.

MR. DENNIS: That's all I have.

HEARING OFFICER FOX: Very good. Thank you,

8 sir. Any further questions on IERG's question number 3?

9 Any clarifications?

BOARD MEMBER MOORE: 13. You said 3.

HEARING OFFICER FOX: I jumped back ten

12 questions. Questions number 13. My mistake. I

13 apologize. That brings us, Ms. Hodge, to question number

14 14, which does have five subparts. Why don't we begin

15 with 14a based on -- regarding implementation. Did you

16 have a follow-up or clarification?

MS. HODGE: I do have several follow-up

18 questions, and some of the questions cover, you know, one

19 or more of the subsets, so --

HEARING OFFICER FOX: It's difficult to

21 tease them apart. Why don't we go ahead with your

22 questions, and certainly any other questions we'll

23 entertain in due time.

MS. HODGE: Okay. In response to prefiled

Keefe Reporting Company

1 questions, the Agency has stated that the compliance date

2 for the proposed rule of May 1, 2010, is one year later

3 than USEPA requires in its final rule to implement the

4 eight-hour ozone national ambient air quality standard.

5 Since for all practical purposes the compliance date

6 occurs too late to impact compliance with the ozone

7 standard, what benefit will the proposed rule have in

8 achieving compliance with the current ozone standard?

MR. KALEEL: Hopefully the area will achieve

10 attainment at the time frame that is required -- which is

11 2009, slash, 2010 -- with control measures that are

12 already being implemented. The NOx RACT proposal is a

13 specific requirement of the Clean Air Act regardless of

14 how much it contributes to attainment. It is a specific

15 requirement that must be addressed, and this proposal is

16 intended to address it.

MS. HODGE: Okay. Thank you. If the Agency

18 needs an extension of time to attain the ozone standard,

19 what are the requirements it must meet to qualify for an

20 extension, and in your opinion, how will the May 1, 2010,

21 compliance date impact USEPA's decision to grant an

22 extension?

MR. KALEEL: I guess I'm not aware that

24 there's a specific mechanism to seek an extension of an

Keefe Reporting Company

1 attainment date for ozone. There is a provision for

2 achieving an extension of the attainment date for PM2.5.

3 If we fail to meet the attainment date for ozone, I

4 believe the Clean Air Act would provide for a bump-up to

5 a higher classification, and in so bumping up the area to

6 a higher classification, we would also have a later

7 attainment date, I believe three years later, if the area

8 goes from moderate to serious. The NOx controls in 2010

9 could still potentially help to keep the area in

10 attainment.

The -- And perhaps the extension that you were

12 referring to, the Clean Air Act does provide for one-year

13 extensions if the area is achieving clean air in the

14 first of the -- of three years. The -- Back up for a

15 second. To be able to determine whether or not the area

16 is attained, three years of clean monitoring data must be

17 observed or measured in the non-attainment area, so

18 presumably the first clean year would be 2009, and as you

19 pointed out, we would not have full implementation of NOx

20 RACT in 2009. If we make it -- If the meteorological

21 conditions are right, if other control measures are

22 helping to achieve clean air in 2009, we can request an

23 extension to 2010 and then again till 2011, so even

24 though NOx RACT might not help us in that first year,

Keefe Reporting Company

1 implementation by the ozone season of the second year of

2 at least most of those controls would help to keep the

3 area on track to attain the standard, and again in 2010

4 and in '11, so maybe those were the extensions that

5 you're referring to.

MS. HODGE: Yes. Yes, they were. Okay.

7 The fine particulate standard attainment date is April

8 14, 2010. According to the USEPA, what is the date by

9 which RACT control measures must be in place for fine

10 particulate control purposes?

MR. KALEEL: For fine particulate, the --

12 well, I guess it's similar to what it is for ozone. The

13 RACT is intended to be achieved by the year that

14 attainment is also to be reached, so in that specific

15 instance, April of 2010 would be the attainment -- or the

16 compliance date under the federal guidance.

MS. HODGE: Okay. What are the USEPA

18 requirements for qualifying for an extension of time to

19 attain the fine particulate standard, and in your

20 opinion, how will the May 1, 2010, compliance date impact

21 USEPA's decision to grant an extension? And again, this

22 is on the fine particulate.

MR. KALEEL: The requirement for achieving

24 an extension for PM2.5, the State needs to make a

Keefe Reporting Company

1 demonstration that control measures needed for attainment

2 could not be implemented in time, that there was some

3 reason why feasible control measures could not be

4 implemented in time by 2010.

MS. HODGE: Thank you. In your opinion, is

6 the rule's compliance date a factor to consider in the

7 overall determination of whether RACT is reasonably

8 available in a specific situation?

MR. KALEEL: Obviously the State intends to

10 have a compliance date that can be reasonably achieved,

11 and from our standpoint, again, it depends on the

12 duration of the rulemaking as to how much time would

13 still be available. I think we believe -- and I've

14 responded to some of the questions here in a like

15 fashion -- we believe that in most cases there is still

16 enough time for companies to comply. There are

17 undoubtedly and we are aware of some circumstances where

18 that might not be true, and we remain open to discussing

19 those unique circumstances. If the rulemaking process

20 becomes very protracted, then there's certainly an

21 obligation that we would have to work with the Board and

22 work with affected industries to derive or determine a

23 more reasonable compliance date.

MS. HODGE: Thank you. Do you believe that

Keefe Reporting Company

1 the rule's compliance date can potentially impact the

2 availability of a control technology and the cost of

3 implementing the technology?

MR. KALEEL: At least a portion of that,

5 perhaps it would best be addressed by Dr. Staudt. I

6 guess our opinion is we're not to that point yet. We

7 believe that the control measures that are needed to

8 attain are reasonably available at the present time,

9 so --

MS. HODGE: Thank you. And I know we hit on

11 this a little bit earlier in questions for Dr. Staudt.

12 Would you have anything to add --

DR. STAUDT: No.

MS. HODGE: -- at this time? No? Thank

15 you. Has the Agency considered the impact that current

16 economic conditions will have on financing procurement,

17 construction and timing for the kind of projects required

18 by this rule?

MR. KALEEL: We read the newspapers. We

20 know it's a difficult time right now. Hopefully that

21 will be resolved for all of us. I don't have a specific

22 reaction to availability of credit right now, but I

23 haven't tried to obtain a home mortgage or buy a car

24 recently, so I can't really directly respond to what --

Keefe Reporting Company

MS. HODGE: So the Agency has not considered

2 the current economic impact?

MR. KALEEL: We have not, no.

MS. HODGE: Okay. Thank you. Also, in

5 response to question 14c, the Agency made a statement

6 that the Illinois EPA believes that stakeholders have

7 already had ample time to plan and design the control

8 measures needed to comply with this proposal since

9 they've been aware of it for several years. Can you just

10 provide a little bit of an overview for the Board about

11 how this rule has changed over the last several years

12 from maybe some of your early initial outreach to the

13 proposal that you have before the Board right now?

MR. KALEEL: Sure, and the Agency has worked

15 with stakeholders for a number of years and we've made

16 presentations and had meetings to IERG and its members

17 and to other groups as well. The obvious -- The biggest

18 obvious change that has occurred with the proposal from

19 its inception was pulling back on the requirement for --

20 or at least our initial ideas or thoughts about making

21 this state-wide rulemaking. There may have been some

22 other specific changes, I believe, in certain

23 circumstances that a certain emission limitations have

24 been relaxed somewhat, although I think for the most part

Keefe Reporting Company

1 the emission limits that we originally stated a couple

2 years ago are still contained in this proposal. But

3 another change that I know has come about, and perhaps

4 not just strictly as a result of outreach but just the

5 evolution and the duration of the time to make this

6 proposal, is pushing back the compliance date. I believe

7 we originally proposed 2009 to match up with the federal

8 requirement. We have pushed it back a little bit, but --

MS. HODGE: All right. Thank you. So as

10 you just testified, one of the big changes was change of

11 the rule from state-wide applicability to applicability

12 just in the non-attainment areas. Does the Agency think

13 that it would have been a prudent business decision,

14 then, for a facility located in an attainment area to

15 move forward with controls let's say 18 months ago?

MR. KALEEL: Probably not a prudent decision

17 to go ahead with implementation of controls. I think

18 what we intended here is to, again, make the Board and

19 make -- state the obvious fact that companies have been

20 aware of these limits. There are a certain amount of

21 planning undoubtedly that goes on internally within each

22 of the companies as far as what control measures may be

23 needed, so there is some up-front work that could be done

24 short of applying for a specific construction application

Keefe Reporting Company

1 or initiating controls, you know, spending significant

2 capital down there for construction of equipment, so I

3 think there's a fair amount of up-front work that could

4 be done and probably has already been done by a number of

5 companies.

MS. HODGE: And how familiar are you with

7 business planning for capital expenditures?

MR. KALEEL: I don't have a great deal of

9 familiarity with that.

MS. HODGE: Would you think that it would be

11 routine to go forward with approval for capital for a

12 proposed rule?

MR. KALEEL: I don't think it would be

14 routine to actually obtain loans or to let contracts. In

15 fact, in terms of letting contracts, that may even

16 violate our permitting requirements.

MS. HODGE: So is it the Agency's position

18 that you think companies shouldn't move forward with

19 planning and design for a proposed rule?

MR. KALEEL: I think in many cases they

21 could have done that. I think we certainly know there's

22 been enough planning that has gone forward within the

23 companies to provide negative feedback to our proposals

24 as early as a couple of years ago, so we know that people

Keefe Reporting Company

1 have been looking at it. They've already been aware of

2 what we're asking for and at least were prepared enough

3 at the time to say that they didn't think it was

4 feasible, so just even making that statement would make

5 me think they've been doing some planning.

MS. HODGE: Okay. Thank you. I think

7 that's all that I have on 14.

HEARING OFFICER FOX: Very well. Were

9 there -- Ms. Bassi?

MS. BASSI: I won't ask my questions. Not

11 nice.

HEARING OFFICER FOX: Did you have another

13 nicer one that you wanted to pose?

MS. BASSI: No. Miss Hodge covered them.

HEARING OFFICER FOX: Very well. Yes,

16 Mr. Elvert.

MR. ELVERT: Yes. One of the questions that

18 Mrs. Hodge asked was do you believe that the rule's

19 compliance dates can potentially impact availability of

20 control technology. In the past we've only been talking

21 about boilers and process heaters. Is this -- Is your

22 answer the same in regards to part 75 and part 60, CEMS

23 equipment?

MR. KALEEL: I'm not aware of the current

Keefe Reporting Company

1 availability or lack of availability of monitoring

2 equipment.

MR. ELVERT: Okay. Thank you.

HEARING OFFICER FOX: Thank you, sir. Any

5 further questions with regard to question -- IERG's

6 question number 14? Ms. Hodge, why don't we proceed to

7 IERG's question number 15 with regard to emission

8 averaging plans. It does have three subparts. Would it

9 make sense once again perhaps to address those in effect

10 together?

MS. HODGE: Yes.

HEARING OFFICER FOX: I suspect that you

13 have some follow-ups.

MS. HODGE: Thank you.

HEARING OFFICER FOX: Please go ahead.

MS. HODGE: Mr. Kaleel, in response to the

17 prefiled questions, the Agency stated that new units

18 subject to the rule cannot be included in emission -- in

19 an averaging plan because of the need to track emission

20 reductions from the 2002 base year. Are there USEPA

21 guidance or policy documents that preclude the Agency

22 from allowing averaging of the newer units?

MR. KALEEL: I'm not aware of anything in

24 the federal guidance with regard to including or not

Keefe Reporting Company

1 including averaging. The concept of averaging was

2 something that was brought to us by stakeholders as a

3 means of providing flexibility towards compliance.

MS. HODGE: Thank you. Given the potential

5 for a facility to make important energy efficiency

6 decisions that could be adversely impacted by this

7 exclusionary limitation, has the Agency considered any

8 methodology that could be employed to address their

9 concern, allow such averaging -- that would be such

10 averaging of post-2002 units?

MR. KALEEL: The one circumstance that the

12 proposal does allow in terms of averaging is in the

13 context of a replacement unit. We certainly envision

14 that a new unit would be more efficient -- or certainly

15 conceivable to us it would be more efficient than the

16 existing one, and I don't -- at least in terms of

17 replacement, the rule allows for that.

MS. HODGE: Is the term replacement unit

19 defined anywhere in the proposed rule?

MR. KALEEL: I don't recall if we've

21 specifically defined it.

MS. HODGE: Okay. And in your answer to

23 15c, I think the Agency said for the purposes of emission

24 averaging under this proposal, a replacement unit must be

Keefe Reporting Company

1 essentially the same as the unit it replaces.

MR. KALEEL: Yes.

MS. HODGE: Are you aware of any industry

4 that would routinely do replacement in kind? Wouldn't

5 there be some kind of improvement or enhancements?

MR. KALEEL: Well, the averaging concept

7 originally was put forward by the natural gas pipeline

8 folks in the development of subpart Q, the engine rule.

9 What they envisioned was a replacement of a gas-fired

10 engine perhaps with an electric engine. Again, that

11 would be alleviating all emissions, and we did allow for

12 replacement of a unit that has emissions with one that

13 has no emissions at all, so that -- I mean, that

14 obviously makes sense, but the concept was that that

15 engine does the same job as the one it replaced, and what

16 it was providing was an air quality benefit.

MS. HODGE: So could you -- could we

18 consider a definition that replacement unit would be

19 doing the same job as the unit it replaces?

MR. KALEEL: I think that's consistent with

21 our intent. If -- Just throwing out an example, if a

22 company wanted to replace a 100 million BTU boiler with a

23 100 million BTU boiler, that certainly is consistent with

24 our intent of what is a replacement unit.

Keefe Reporting Company

MS. HODGE: Okay. Thank you.

MS. BASSI: Can I follow up on that, please?

MS. HODGE: Sure.

HEARING OFFICER FOX: Please go ahead,

5 Ms. Bassi.

MS. BASSI: I have two questions, I think,

7 in follow-up, in following up on that. The first one is,

8 you said if they could replace a 100 million BTU boiler

9 with a 100 million BTU boiler. Could they replace it

10 with a 150 million BTU boiler?

MR. KALEEL: I don't have a specific

12 threshold in mind. Again, I think what we are thinking

13 is it's essentially doing the same work as the unit that

14 it replaced, and if you could play that game back, what

15 about 149? What about 139?

MS. BASSI: Right.

MR. KALEEL: We don't have a specific

18 criteria in mind, but again, the --

MS. BASSI: So I have more than one

20 question, more than one question on that. Is this then

21 something that would be determined in the permitting

22 process, or exactly where?

MR. KALEEL: I think there's some discretion

24 involved. I think we would intend for companies to

Keefe Reporting Company

1 propose in an averaging plan what it is that they have in

2 mind, but --

MS. BASSI: Is the replacement unit -- or

4 could the replacement unit effectively be viewed as

5 the -- as one of the company's methods of complying with

6 the rule; in other words, by replacing an old unit with

7 one that's more efficient in terms of emissions, then

8 that that is its compliance methodology?

MR. KALEEL: I could conceive, again going

10 back to the engine rule example, that if a company wanted

11 to use an electric engine rather than a gas-fired engine,

12 it made sense for them to do that both from an efficiency

13 standpoint and from an emissions standpoint, that

14 certainly that that's what we envisioned, and a

15 replacement of a dirtier unit with a clean one is -- we

16 would encourage that.

MS. HODGE: Just a quick follow-up on that.

18 So would the Agency entertain a proposal from IERG in

19 that regard consistent with your testimony here today?

MR. KALEEL: We'd be happy to discuss it,

21 sure.

MS. HODGE: Okay. Thank you.

HEARING OFFICER FOX: With regard to

24 question number 15, Ms. Hodge, any further questions?

Keefe Reporting Company

MS. HODGE: No.

HEARING OFFICER FOX: No? And from any

3 other participant, Ms. Bassi or otherwise, on question

4 number 15? Noting the time, we have been at it for

5 nearly two hours, and I appreciate your stamina. It

6 certainly seems that there's time for lunch. Why don't

7 we take a break and resume here at 1 o'clock. We can

8 begin, Ms. Hodge, with question number 16 on IERG's part,

9 and that will turn to some questions that appear to

10 relate very specifically to Dr. Staudt's prefiled

11 testimony, and we can wrap up the questions and answers

12 from IERG. And with that, we can go off the record and

13 I'll see you -- we'll see you back here at 1 p.m.

MS. HODGE: Thank you.

(One-hour lunch recess taken.)

HEARING OFFICER FOX: We're at the end of

17 our lunch break at 1 a.m. -- 1 p.m., rather. We haven't

18 been here that long, of course. The court reporter

19 indicates that we are ready to go back on the record, and

20 in the interest of diving right in, Ms. Hodge, we left

21 with the answers to IERG question number 16 relating to

22 construction or modification. Why don't we dive right in

23 and see whether you have any follow-ups or clarifications

24 on that issue.

Keefe Reporting Company

MS. HODGE: Mr. Fox, I don't have any

2 follow-up to any of our additional prefiled questions and

3 the Agency answers. I have more questions in the general

4 category.

HEARING OFFICER FOX: Very good. Why don't

6 I -- You've indicated that neither 16 -- none of the

7 questions, your own questions, 16 through 21, require on

8 your part any further clarification or follow-up.

MS. HODGE: That's right.

HEARING OFFICER FOX: Why don't I just throw

11 that open to the other participants, if there are any

12 follow-ups or clarifications you would like to ask the

13 Agency based on IERG's last -- I believe that would be

14 six questions. I'm seeing no indication that there are

15 any follow-ups, so there's a reprieve for the Agency to

16 that extent, at least. Why don't we turn, Ms. Hodge, to

17 the follow-up questions of a general nature that you just

18 referred to a moment ago.

MS. HODGE: Will do. Will do. And I think

20 these are for the most part for Mr. Kaleel but may

21 involve some others as well. In the Agency's statement

22 of reasons and your prefiled testimony, one of the

23 purposes of the proposed rule is to achieve NOx emission

24 reduction for use in the ozone and fine particulate

Keefe Reporting Company

1 attainment demonstrations the Agency is preparing or has

2 prepared. What is the status of the Agency's stated

3 limitation plans for ozone?

MR. KALEEL: I think as I indicated at least

5 in response to some of the other questions -- I don't

6 recall if they were IERG questions or someone else -- the

7 Agency has not yet filed the ozone attainment

8 demonstration as was required by I believe June of 2007.

9 There have been a number of slow-downs or delays, the

10 most recent one being the vacatur of the CAIR rule. One

11 of the premises of our attainment demonstration was that

12 CAIR would be providing regional emission reductions

13 which were believed to be necessary for attainment, so we

14 had to do a demonstration since the time of that vacatur

15 to show or to determine whether or not CAIR was needed

16 for attainment. We've completed that modeling. We're

17 wrapping up the technical write-up right now. We hope to

18 be able to have public hearings on the attainment

19 demonstration before the end of the year with a submittal

20 to USEPA by early next year, and that would be the

21 attainment demonstration, reasonable further progress

22 demonstration, conformity demonstration. The NOx RACT of

23 course is -- and also BOC RACT would be elements that

24 wouldn't be included until rulemaking is completed.

Keefe Reporting Company

MS. HODGE: And that would be for both the

2 Chicago and the Metro East non-attainment areas?

MR. KALEEL: Good clarification. I'm sorry.

4 We did file the attainment demonstration for the

5 St. Louis metropolitan area on time in June of 2007.

6 We've not received any comments or any reaction or any

7 actions at all by USEPA, so the dates that I was

8 describing were for Chicago.

MS. HODGE: Chicago? Okay. Thank you.

10 Does the Agency intend to submit an implementation plan

11 for the Chicago area that will show attainment by the

12 June 2010 attainment deadline?

MR. KALEEL: The additional analysis that I

14 had described does demonstrate that the Chicago area will

15 attain by the attainment date 2010, even without full

16 implementation of CAIR. It shows southeast Wisconsin,

17 Indiana and Illinois all attaining by 2010. It does not

18 show attainment for the monitor in Holland, Michigan.

19 The modeling goes on to show that Holland, Michigan, will

20 attain by 2012.

MS. HODGE: Okay. Thank you. Does the

22 Agency's attainment demonstration for the Metro East

23 portion of the St. Louis non-attainment area show

24 attainment by the June 2010 deadline?

Keefe Reporting Company

MR. KALEEL: Yes, it does, with the proviso

2 that the modeling that we submitted in June of 2007

3 assumed implementation of CAIR. We have not looked at

4 the St. Louis area specifically to see whether the

5 vacatur of CAIR impacted that demonstration.

MS. HODGE: Does the Agency believe that it

7 has sufficient information to request the Chicago area be

8 redesignated as attainment for the eight-hour ozone

9 standard?

MR. KALEEL: Based on the three prior years

11 of air quality data, including data from 2008 which has

12 not yet been fully quality assured -- the ozone season

13 just ended a few days ago -- but based on the information

14 that we have, the Chicago area is -- Chicago area again

15 including southeast Wisconsin and northwest Indiana -- is

16 meeting the ozone standard.

MS. HODGE: Thank you. What is the status

18 of ozone air quality emissions in the St. Louis area in

19 terms of supporting a redesignation request at this time?

MR. KALEEL: Again, based on the most recent

21 information, I believe there's still one monitor on the

22 Missouri side of the river that is not attaining the

23 standard, so as of today, St. Louis does not qualify for

24 redesignation.

Keefe Reporting Company

MS. HODGE: Thank you. What is the status

2 of the fine particulate attainment demonstrations?

MR. KALEEL: The -- I'm going to try to

4 separate where we are with Chicago versus St. Louis,

5 because there's some differences. The modeling we've

6 performed so far for Chicago was demonstrating

7 attainment, assuming the reductions from the CAIR

8 program. The revised modeling doesn't show that anymore.

9 The revised modeling shows that Chicago will not attain

10 by 2010, that the CAIR reductions -- or not getting the

11 CAIR reductions is enough to undermine the previous model

12 or attainment demonstration. It does show that Chicago

13 would attain by 2012. There have been some discussions,

14 nothing concrete, about the possibility of requesting an

15 extension of the attainment date until 2012. Again,

16 nothing is solid on that yet. For St. Louis, we're not

17 too close yet. We have a local scale monitoring problem.

18 Most of the monitors in the St. Louis area, all of them

19 in Missouri and most of them in Illinois are showing

20 attainment. There's one hot spot, if you will, one area

21 that is not showing attainment, and as -- to date we've

22 not developed an attainment plan. We do not have

23 sufficient control measures identified to demonstrate

24 attainment.

Keefe Reporting Company

MS. HODGE: Okay. Thank you. The Agency

2 has proposed these NOx rules as part of its strategy for

3 attaining the eight-hour ozone standard; is that correct?

MR. KALEEL: That's a portion of the

5 strategy, yes.

MS. HODGE: And is it also correct that

7 these rules are intended to be part of the strategy

8 pertaining to fine particulate annual standard of 15

9 micrograms per cubic meter?

MR. KALEEL: Again, it's an element of the

11 strategy.

MS. HODGE: In the Agency's statement of

13 reasons, the 24-hour fine particulate standard is

14 mentioned, and there seems to be an inference that the

15 proposed NOx rule is designed to address emission

16 reductions as part of an attainment plan for both the

17 annual fine particulate standard and the 24-hour fine

18 particulate standard. Is this rule specifically intended

19 to address emission reductions related to the 24-hour

20 fine particulate standard or just the annual fine

21 particulate standard?

MR. KALEEL: As of right now, we don't

23 really know what will be required for the new standards.

24 Certainly we don't know what's going to be required in

Keefe Reporting Company

1 terms of demonstrating attainment. USEPA's not finalized

2 action towards establishing non-attainment boundaries in

3 Illinois for either of those standards, and our SIP

4 process kind of pivots off of the date that those

5 non-attainment boundaries are established, so we really

6 haven't started the planning process yet for those

7 standards. We offered in the statement of reasons and

8 again in my testimony that obviously NOx emissions are an

9 important element or constituent of any plan for ozone or

10 PM2.5, so the expectation is that the emission reductions

11 that we're proposing with the NOx RACT proposal will help

12 us to meet those standards, but I don't want to make any

13 claim at all that that would be all that might be

14 necessary to meet those standards.

MS. HODGE: Okay. Thank you. In your

16 testimony, you refer to reasonably available control

17 technology, or RACT. Is the proposed rule intended to

18 represent RACT for the source categories it addresses or

19 is it designed to achieve a level of emission control

20 that goes beyond RACT?

MR. KALEEL: What we intended with this

22 proposal was to satisfy the requirements to implement

23 RACT. We don't believe that these requirements go beyond

24 RACT.

Keefe Reporting Company

MS. HODGE: Have the emission reductions of

2 NOx from this proposed rule been included in attainment

3 demonstration modeling for both ozone and fine

4 particulates?

MR. KALEEL: Yes.

MS. HODGE: How have these emission

7 reductions been included in the model? That is, were the

8 reductions computed for each of the affected sources

9 specifically included in the model in each case or was

10 another technique used?

MR. KALEEL: No, we generally try to

12 implement the emission limits for specific units or

13 specific point sources in the modeling.

MS. HODGE: Does the Agency intend to use

15 the emission reductions from this rule for its rate of

16 progress demonstration for ozone and/or fine particulate?

MR. KALEEL: For ozone, no. The requirement

18 for ozone for rate of progress or reasonable further

19 progress was VOC, volatile organic compound

20 demonstration, and we were able to show -- or are able to

21 show for both non-attainment areas that we are achieving

22 sufficient progress, at least to 2009 or 2010 based on

23 VOCs alone. For PM2.5, the NOx reductions would be

24 included.

Keefe Reporting Company

MS. HODGE: Has a sensitivity analysis been

2 performed for ozone and/or fine particulate to determine

3 the impact that these emission reductions may have been

4 contributing to the attainment demonstration?

MR. KALEEL: Not a specific analysis. Just

6 isolating Illinois' NOx RACT proposal, the modeling that

7 has been performed to date has been done in cooperation

8 with the Lake Michigan Air Directors Consortium and

9 modeling runs look at strategies across multiple states,

10 not specific state-wide contribution. We do know that,

11 as I mentioned, the Holland monitor is not showing --

12 Holland, Michigan, monitor is not showing attainment --

13 either based on currently observed air quality or based

14 on air quality modeling is not showing attainment until

15 2012, and as I mentioned, the NOx RACT proposal for

16 Illinois is included and is -- at least my opinion, is at

17 least helpful to helping the Holland, Michigan, monitor

18 attain in 2012.

MS. HODGE: Thank you. In Tables 10-1 and

20 C-2 of the Agency's technical support document, the

21 Agency shows that this rule will result in a 46.3 percent

22 reduction of emissions from the 2005 base year, which the

23 tables show equals 20,666 tons per year. In your

24 opinion, would a reduction of just 10,000 tons per year

Keefe Reporting Company

1 make a perceptible change in the modeling results for

2 either ozone or fine particulate?

MR. KALEEL: I guess I can't really -- I

4 don't have a good feel for what the change in tonnages

5 would require, and we didn't approach the RACT proposal

6 with the idea that there was a certain emission target

7 that we needed to achieve, that kind of a top down

8 approach, you know, here's a certain budget that we have

9 to achieve, how do we achieve it. That's not the way we

10 did it. It's more bottom up, what are the control

11 measures for each source category that we consider to be

12 reasonable, and achieve the emission reduction estimates

13 that are included in the table that way.

MS. HODGE: Is it correct to conclude that

15 the primary purpose of this rule is to satisfy the NOx

16 RACT requirements mandated in the Clean Air Act and

17 contained in the ozone and fine particulate

18 implementation regulations the Agency referenced in the

19 statement of reasons?

MR. KALEEL: I mean, it's intended to both

21 contribute towards attainment demonstrations and to meet

22 the specific requirement in implementing RACT.

MS. HODGE: Thank you. In the Agency's

24 statement of reasons and in your testimony, Mr. Kaleel,

Keefe Reporting Company

1 you referred to the federal requirement to adopt RACT for

2 the eight-hour ozone attainment plan. Is it your

3 understanding that the particular Clean Air Act reference

4 for this requirement, Section 182(b)(2), as well as the

5 EPA's final rule to implement the eight-hour ozone

6 national ambient air quality standard final rule -- and

7 this is 70 Federal Register 71612 dated November 29,

8 2005 -- require the adoption of NOx RACT without regard

9 to the significance of the impact of the resulting

10 emission reduction in the ozone attainment plan?

MR. KALEEL: That's -- My understanding is

12 that RACT isn't specifically tied to the modeling, that

13 RACT is tied to the designation of an area as a moderate

14 ozone non-attainment area, moderate or higher.

MS. HODGE: Okay. Thank you. In your

16 opinion, are the RACT emission limits in your proposed

17 rule absolute limits that would be found in other similar

18 rules, or are these values a factor of the particular

19 characteristics of the emission sources and economics of

20 the region to which the rule applies?

MR. KALEEL: There's not a specific emission

22 limit published by USEPA that qualifies as RACT. The

23 determination of RACT is really incumbent on each state

24 to determine based on the mix of sources that they have

Keefe Reporting Company

1 and also to a certain extent the time period that they

2 are implementing the rule. Many states have implemented

3 NOx RACT back in -- prior to 1996 in response to the 1990

4 Clean Air Act amendments, and we're approaching NOx right

5 now with respect to the eight-hour ozone standards many

6 years later so that the -- I mean, the cost effectiveness

7 numbers, the control technology, how effective the

8 technology is, it's different now than it would have been

9 years ago, and that's something that again goes to the

10 state-specific estimate of what is RACT.

MS. HODGE: Thank you. As part of your

12 analysis for this rule and for the ozone attainment

13 demonstration, have you computed the emission reductions

14 derived from the NOx SIP call for the emission units that

15 are subject to this rule?

MR. KALEEL: In -- Perhaps not specific to

17 the NOx RACT proposal, but we've made estimates in many

18 different analyses that we've done with the emission

19 reductions both from the NOx SIP call and also from CAIR.

MS. HODGE: Do you know whether the USEPA

21 would accept compliance with the NOx SIP call trading

22 program as RACT for purposes of the ozone attainment

23 demonstration?

MR. KALEEL: I'm not aware of any specific

Keefe Reporting Company

1 guidance with respect to the NOx SIP call. There was in

2 the CAIR rule -- for electric generating units, there was

3 specific provision that at the State's option that

4 utilities meeting CAIR could be deemed as meeting RACT.

5 I don't know that there's similar language in the NOx SIP

6 call. Consistent with USEPA's rulemaking that CAIR

7 equals RACT, we felt that our multi-pollutant standards

8 contained in the mercury rulemaking and also in our CAIR

9 rulemaking exceeded the reductions that would have been

10 provided by CAIR, so we included the multi-pollutant

11 option as a compliance option for EGUs.

MS. BASSI: Is there --

MS. HODGE: Sure. Go ahead.

MS. BASSI: Mr. Kaleel, do you recall what

15 the emission rate basis was for industrial boilers in the

16 NOx SIP call rulemaking?

MR. KALEEL: My understanding was the NOx

18 SIP call reduction for industrial boilers was 60 percent

19 reduction.

MS. BASSI: Was there an emission rate?

MR. KALEEL: I don't believe there was an

22 emission rate.

HEARING OFFICER FOX: Anything further,

24 Ms. Bassi?

Keefe Reporting Company

MS. BASSI: Oh. No, I'm done. I'm sorry.

MS. HODGE: Mr. Kaleel, if USEPA has made

3 any statements about how they would accept compliance

4 with the NOx SIP call trading program as RACT for

5 purposes of ozone attainment demonstration, would that

6 change or affect the Agency's decision on this proceeding

7 in any way?

MR. KALEEL: I don't know that it would

9 affect it. I think the multi-pollutant standards for

10 utilities, that is an already established state rule, and

11 we've included that as an option for compliance for NOx

12 RACT. As I mentioned, a RACT proposal is intended not

13 just to address ozone but also PM2.5, and the standard is

14 an annual standard. The NOx SIP call is just an ozone

15 season trading program, so I don't believe it would be

16 equivalent to RACT unless there was a commitment on the

17 part of the utilities to operate their controls

18 year-round.

MS. HODGE: What about for industrial

20 boilers, though?

MR. KALEEL: Again, the industrial boiler

22 requirement in the NOx SIP call is a summer season

23 requirement only, not an annual requirement.

MS. HODGE: But for ozone purposes, wouldn't

Keefe Reporting Company

1 that be sufficient?

MR. KALEEL: Well, we've not made that

3 determination, and again, I'm not sure that the NOx SIP

4 call -- that there was any provision in the SIP call

5 language. I could double-check that, but I don't believe

6 there was ever a provision that it would constitute RACT

7 or be equivalent to RACT, and I think the -- what we

8 consider to be RACT for industrial boilers is -- would

9 provide greater reductions than a NOx SIP call would; not

10 just in the summer season, but any of them.

MS. HODGE: If the emission units that were

12 subject to the NOx SIP call complied with that program on

13 an annual basis, would that affect your decision-making

14 here?

MR. KALEEL: I guess I doubt it, again,

16 because I don't think the emission reductions are

17 equivalent to RACT based on our calculation or our

18 demonstration.

MS. HODGE: Have you or other agency staff

20 determined whether the collective emissions from all

21 emission units subject to the proposed rule already

22 achieve the emission reductions proposed by this rule?

MR. KALEEL: Could you repeat that? I'm --

24 I think I missed something there.

Keefe Reporting Company

MS. HODGE: Have you or other agency staff

2 determined whether the collective emissions from all

3 emission units subject to the proposed rule already

4 achieve the emission reductions proposed by this rule?

MR. KALEEL: I don't believe that they do.

6 I guess I haven't looked specifically at the most recent

7 reported emissions to see whether or not they're already

8 complying, and I'm not sure we would even have the data

9 in-house to do that. My expectation is that we're

10 looking at retrofits, additional controls, and that at

11 least my expectation is that companies are not currently

12 meeting the limits that are proposed in many cases.

MS. HODGE: Thank you. In the Agency's

14 statement of reasons and in your testimony, you refer to

15 the federal requirement for NOx RACT for the fine

16 particulate attainment plan. Is it your understanding

17 that the particular Clean Air Act reference for this

18 requirement, Section 172(c)(1), as well as EPA's clean

19 air fine particulate implementation rule -- it's final

20 rule, 72 Federal Register 20586 dated April 25, 2007 --

21 provides some degree of discretion to determine the scope

22 and extent of NOx RACT?

MR. KALEEL: Yes, I'm aware of that.

MS. HODGE: Thank you. Do you believe the

Keefe Reporting Company

100

1 EPA's clean air fine particle implementation rule gives

2 the Agency and USEPA the authority to conclude that no

3 fine particulate measures are required if such measures

4 could not advance the attainment date by one year if the

5 Agency would be attaining the standard by April 2010?

MR. KALEEL: That's my understanding, or

7 it's consistent with my understanding of the

8 implementation rule. As I indicated in response to one

9 of your previous questions, I don't believe either the

10 Chicago area or the Metro East area will be attaining the

11 PM2.5 standard by the deadline, so I don't think we have

12 that discretion.

MS. HODGE: Thank you. Do you believe that

14 the EPA's clean air fine particle implementation rule

15 gives the Agency and the USEPA the authority to exclude

16 RACT measures that can be shown not to advance the fine

17 particulate attainment date by at least one year?

MR. KALEEL: I think I answered that there

19 is some discretion in terms of how to define RACT.

MS. HODGE: Thank you. In response to

21 IERG's question 3 regarding whether the Agency considered

22 the federally approved NOx RACT emission limits from

23 other states when it formulated its proposal, you

24 answered yes. Actually, I think we've already answered

Keefe Reporting Company

101

1 this one. I'm asking for elaboration on the other

2 states. We've already done that. Okay. In response to

3 prefiled questions, the Agency stated that if a facility

4 switches fuels after the effective date of this rule, it

5 would be subject to an emission limit based upon the

6 original fuel. Does the Agency intend to amend the rule

7 to make that explicitly clear in the rule?

MR. KALEEL: We're open to doing that if

9 it's not clear enough in the language of the rule. That

10 is our intent.

MS. HODGE: It's your intent? Thank you.

12 And I have just a couple of questions for Mr. Kaleel and

13 then I think for Mr. Gupta, and we'll go ahead and wrap

14 up with Mr. Kaleel. In proposing subpart D for

15 industrial boilers, did the Agency consider whether a

16 boiler fueled with coke oven gas could meet the proposed

17 emission limitation in Section 217.164(a)?

MR. KALEEL: Indirectly, yes. I don't think

19 we specifically anticipated coke oven gas, but we are

20 aware that some boilers use what's called process gas in

21 their boilers, and in general we believe that the

22 emission limits can be met with the control technologies

23 that we provided in the TSD.

MS. HODGE: And in the Agency's TSD, were

Keefe Reporting Company

102

1 any of the units or any of the data or information

2 considered boilers that were fueled with coke oven gas?

MR. KALEEL: Certainly certain boilers that

4 burn coke oven gas are listed in our TSD as affected

5 units. We don't have specific information available to

6 us right now about the specific constituents of coke oven

7 gas or other process gases to the extent that it may make

8 it difficult to achieve compliance with reasonably

9 available control measures, and there's at least one

10 affected unit we're having discussions with right now in

11 that respect.

MS. HODGE: Thank you. Thank you. In

13 proposing subpart H here for iron and steel and aluminum

14 manufacturing, did the Agency consult with affected

15 sources in the state to ascertain whether emission units

16 of these affected sources could actually comply with the

17 proposed emissions limitations?

MR. KALEEL: Yes, we have consulted with

19 companies, at least many of them.

MS. HODGE: And do you anticipate submittal

21 of a revised proposal for some emission unit types

22 covered by subpart D?

MR. KALEEL: I guess I --

MS. HODGE: I'm sorry. For subpart H.

Keefe Reporting Company

103

1 Subpart H.

MR. KALEEL: We don't rule that out. There

3 are some ongoing discussions and we certainly are willing

4 to continue those discussions, and if as a result of any

5 information that's put before us it changes our mind,

6 we'd certainly entertain a revision of the proposal.

MS. HODGE: Okay. Thank you. And now I

8 have a few questions for Mr. Gupta, and this really goes

9 to the Table D-1 in the appendix to the Agency's TSD, and

10 first of all, I would ask whether the Agency could get us

11 a better copy of that table, and it's nearly impossible

12 for me to read, and I understand others as well, and even

13 when I look at, you know, the version that's online, I'm

14 having a very difficult time, and I was wondering if the

15 Agency could make the document available to us in its

16 original Excel file form so that we can --

MS. BASSI: Read it.

MS. HODGE: -- read it and allow us to, you

19 know, really determine what's there.

MR. GUPTA: Yeah, sure, no problem. We can

21 provide that.

MS. HODGE: Okay. Thank you very much.

23 Have -- And, Mr. Gupta, have you compared the affected

24 emission units on this Table D-1 with current permitted

Keefe Reporting Company

104

1 or actual emissions to the emission reductions you have

2 estimated as coming from this rule?

MR. GUPTA: No, we have not. We have looked

4 at it as a group, but not as individual sources.

5 Basically, what we looked into was what is the baseline

6 NOx emissions in the ACT document and looked at that

7 information to calculate how much of a reduction will be

8 needed to comply with the limitations, and that's what we

9 had done rather than going source by source, how much

10 emissions are currently in -- currently they have.

MS. HODGE: Okay. So even though the Table

12 D-1 is pretty much a listing source by source, you didn't

13 conduct your analysis on a unit-by-unit basis.

MR. GUPTA: Right. That's correct.

MS. HODGE: Okay. Could you tell us a

16 little bit more about how you did prepare this table in

17 the analysis? Could you walk us through the table and

18 maybe just pick a particular company or unit, just

19 explain to us what you did, please?

MR. GUPTA: My table is also as unclear as

21 yours. Okay.

MS. HODGE: Okay. Mr. Kolaz has indicated

23 that we could use Table 23 as just an example here today,

24 and that one's a little more legible for us.

Keefe Reporting Company

105

MS. BASSI: Miss Hodge, is that Table C-2?

MS. HODGE: It is C-2, "NOx Reductions from

3 the Application of NOx RACT (Reductions By Categories)."

4 Again, this is not on a unit-by-unit basis, but if you

5 could just walk us through the categories.

MR. GUPTA: Okay. Let's look into the

7 gas-fired boilers, which are the very first row under

8 Chicago non-attainment area. Based on our ACT document

9 for ICI boilers, we have certain baseline emissions, and

10 those baseline emissions were used to compare with the

11 NOx emission limit, which is 0.08, to get that -- on an

12 average we got 69.2 percent reduction, and same thing was

13 applied to other source category as you go down.

MS. HODGE: But -- I'm sorry. A

15 reduction -- What is the 69.2 percent? A reduction from

16 what to what?

MR. GUPTA: Okay. The ACT document is --

18 lists uncontrolled emissions from each of those source

19 categories. Take the example of natural gas-fired

20 boiler. They have hot water which are more than 100

21 million BTU per hour, so much uncontrolled emissions. I

22 don't have the number right in front of me, but let's say

23 the X are emissions which are uncontrolled, and then our

24 limit is 0.08, so X minus 0.08 and divided by X, that

Keefe Reporting Company

106

1 gives the reduction from this particular source.

MS. HODGE: Okay. So the uncontrolled

3 emissions, is that your estimate for the category --

MR. GUPTA: Right. That's what --

MS. HODGE: -- or -- you haven't looked at

6 individual units --

MR. GUPTA: No. It was not --

MS. HODGE: -- what their uncontrolled rates

9 might be.

MR. GUPTA: That's correct.

HEARING OFFICER FOX: Ms. Bassi?

MS. BASSI: Mr. Gupta, according to this

13 Table C-2, I believe it's saying that you were looking at

14 2005 NOx emissions?

MR. GUPTA: Right.

MS. BASSI: But isn't the base year 2002?

MR. GUPTA: We started with the year 2002,

18 but since that time there were several sources which have

19 been either shut down or reconstructed, modified, so the

20 year 2002 emissions were no longer granted as far as

21 looking at what is, you know, the more recent number,

22 which we used 2005, as, you know, that -- like, some of

23 the steel plant sources, several sources have been shut

24 down, done some modification to those sources, so we used

Keefe Reporting Company

107

1 2005 to get a little better data on what's the current

2 status of those sources.

MS. BASSI: Could I follow up with that a

4 minute?

HEARING OFFICER FOX: Yes. Please go ahead.

MS. BASSI: I'm not sure whose questions

7 these were. I think they might have been IERG's

8 questions about using averaging plans or including units

9 in averaging plans that were post-2002 new units. Did

10 you have that?

MS. HODGE: Right, we had a question like

12 that.

MS. BASSI: Okay. And what you're telling

14 me is or what we understood was is that 2002 was the base

15 year, and yet your analysis is based on 2005, and yet

16 units that were built after 2002 cannot be included in an

17 emissions averaging plan; is that correct?

MR. KALEEL: If I could maybe try to respond

19 to that. We're not intending that 2005 be a base year

20 for this analysis. We were just trying to represent at

21 the time we were doing this what is the most recent

22 information that we have available through our annual

23 emission reports to make this demonstration. We're not

24 computing reasonable further progress from these numbers.

Keefe Reporting Company

108

1 We're not using this particular calculation in our

2 attainment demonstration. It was really just geared

3 maybe more for the benefit of stakeholders to provide the

4 most recent information that we had at the time that we

5 were doing our outreach, so it doesn't tie in -- the fact

6 we used 2005 does not tie into averaging plans, does not

7 tie into reasonable further progress. That was just

8 trying to use the most recent information we had

9 available.

MS. HODGE: So the emission reductions that

11 you're estimating are from the '05 levels.

MR. KALEEL: For the purposes of this table

13 and this TSD, that's right.

MS. HODGE: And for the purposes of this

15 rule, support for the rule.

MR. KALEEL: For illustrating the amount of

17 reductions that we are expecting, we used 2005, but we're

18 using it to represent the population of sources as

19 currently as we know them, at least at the time that we

20 were putting this stuff together, but that's -- when we

21 did our modeling, we used the 2002 inventory. When we

22 are doing our reasonable further progress calculations,

23 we're using the 2002 inventory.

MS. HODGE: Okay.

Keefe Reporting Company

109

MR. KALEEL: Again, I think just to add to

2 the comment I made before, we're not trying to determine

3 that there's a certain tonnage reduction out there that

4 represents RACT and then trying to show how we meet that.

5 We started at the bottom, what sources would be affected

6 by the rule, how much reduction do we expect from those

7 sources, so -- from application of reasonable controls.

8 So there's nothing magic about the total amount of

9 emissions that we're showing in this table. That's --

MS. HODGE: So again -- I think we discussed

11 this before -- the total amount of emissions that you're

12 showing here is not necessary for -- to demonstrate

13 attainment.

MR. KALEEL: It's not a target that we are

15 trying to achieve. It's not a budget. It's, you know,

16 similar to, like, the SIP call or CAIR. It's not how we

17 arrived at it. If there was a different total that we

18 achieved as a result of application of RACT, we'd have

19 been comfortable with that different total, anything we

20 don't achieve through RACT that might ultimately lead to

21 more stringent measures somewhere else in terms of

22 demonstrating attainment, if the modeling had shown that

23 that was necessary, but again, it's not a budget.

24 It's -- That's not how we approached it.

Keefe Reporting Company

110

MS. HODGE: Okay. Thank you. Let's go back

2 and look at this Table C-2, Mr. Gupta.

MR. GUPTA: Uh-huh.

MS. HODGE: And the first emission category,

5 the gaseous fuel-fired boilers greater than 100 million

6 BTU, again, we're looking at total. Please go over to

7 the column, the heat input, million BTU per hour, and we

8 see a number of 6,911.9.

MR. GUPTA: That's the heat input capacity

10 of the units as we had in our inventory, so the total

11 heat input capacity of all the sources in that category.

MS. HODGE: Okay. And then if you go over a

13 few columns to the estimated controlled NOx, the tons per

14 year, and the number here is 368.2.

MR. GUPTA: Uh-huh.

MS. HODGE: How did you -- Was that a

17 calculated number, the 368.2? Did you apply the 0.08

18 or -- could you explain how you arrived at that number?

MR. GUPTA: That was based on the

20 application of 0.08 to the original numbers. If you see

21 the column below -- before that one is 69.2 percent

22 reduction, so if you apply 69.2 percent reduction to a

23 column before that one, 1196.5, you get 368.2.

MS. HODGE: If you divide the heat input

Keefe Reporting Company

111

1 number by the estimated controlled NOx number or vice

2 versa -- I mean, I -- we can't get these numbers to come

3 out the same.

MR. GUPTA: Okay. This is not how we did

5 it. The heat input is the heat input capacity of the

6 unit, which has nothing to do with how much NOx emissions

7 are generated, so the reduction was calculated based on

8 how much NOx emissions were there and then apply 69.2

9 percent reduction to get estimated reduction.

MS. HODGE: Okay. So then the 2005 NOx

11 emissions, tons per year, that column, the 1,196.5, is

12 that based on actual emissions for '05?

MR. GUPTA: These are based on actual

14 emissions, yes. Sorry. These are based on the actual

15 emissions in our inventory.

MS. HODGE: I'm sorry.

MR. GUPTA: Those -- That -- These emissions

18 are based on actual emissions in our inventory.

MS. HODGE: In your inventory.

MR. GUPTA: Yeah.

MS. HODGE: Okay. Thank you. And then

22 where did 69.2 percent -- where did that number come

23 from, the estimated NOx RACT reduction?

MR. GUPTA: As I pointed out here, we have

Keefe Reporting Company

112

1 these uncontrolled emissions in ACT document. Let's take

2 natural gas-fired boilers. The uncontrolled NOx

3 emissions is 0.26 pounds per one million BTU, and when

4 you bring it down to 0.08 pounds per million BTU, that

5 calls for 69.2 percent reduction.

MS. HODGE: May we request this Table C-2 as

7 well?

MR. GUPTA: This table is a part of our TSD.

9 Let me see which particular table it is.

MS. HODGE: Right. I understand that, but

11 may we request this in the Excel file form as well?

MR. GUPTA: Yes, yes.

MS. HODGE: It'll help us see the --

HEARING OFFICER FOX: Your specific request,

15 Ms. Hodge, is larger print, more readability? Is -- Am I

16 correct in understanding that?

MS. HODGE: And how the calculations are

18 made as well so we can see the formulas within the tables

19 in the Excel spreadsheets.

HEARING OFFICER FOX: Very good. Thank you

21 for clarifying that.

MR. GUPTA: That should be no problem. We

23 can provide that.

MS. HODGE: Okay. Thank you. And I have

Keefe Reporting Company

113

1 just a question to clarify. Before, when we had talked

2 about how have the emission reductions been included in

3 the model, what emission reductions did you include in

4 the model, Mr. Kaleel? Did you include the reductions

5 shown on these tables or --

MR. KALEEL: We actually had different staff

7 people working on that particular assignment. We'd use

8 the -- whatever the model base year emissions are and

9 then applied the specific emission limit to those

10 generally unit by unit. I don't know if this table was

11 in front of the person on the modeling staff that was

12 doing that at the time, so it's --

MS. HODGE: Could we get that information,

14 please? Could the Agency --

MR. KALEEL: Sure.

MS. HODGE: -- submit that information into

17 this record, please? Okay. I do have one more question.

18 This is kind of in follow-up to the questions that I had

19 before on the categories within this rule for which no

20 such units exist within the non-attainment areas, and I

21 think we talked about cement kilns and then we talked

22 about, you know, one of the aluminum furnaces too. Could

23 the Agency identify for us any other categories or

24 subcategories for which units do not currently exist in

Keefe Reporting Company

114

1 the non-attainment areas?

MR. KALEEL: We'd be happy to look at that.

3 I believe those are the only two categories where there

4 are no units in the non-attainment areas, but we'd be

5 happy to confirm that.

MS. HODGE: Okay. Thank you. Thank you

7 very much. Okay. That completes all of the questions of

8 IERG.

HEARING OFFICER FOX: Thank you, Ms. Hodge.

10 We had -- I think you had indicated that for questions 16

11 through 21 that you have filed, you had no follow-ups

12 whatsoever?

MS. HODGE: No follow-up.

HEARING OFFICER FOX: Were the IERG

15 questions 16 through 21, actually, I believe, the subject

16 of any clarification or any follow-up that any of the

17 other participants wish to pose? Seeing none, I believe

18 that would bring us to Midwest Gen, Ms. Bassi, if I

19 remember our order of proceeding correctly. You had

20 prefiled questions and the Agency had prefiled answers

21 both for Mr. Kaleel and for Mr. Staudt -- Dr. Staudt,

22 whose questions were 24 to 48, and if you are prepared to

23 begin with 24, I think we've reached that point in our

24 proceedings today.

Keefe Reporting Company

115

MS. BASSI: My name is Kathleen Bassi. I'm

2 with the law firm of Schiff Hardin LLP in Chicago. With

3 me today is Thomas Bell, an associate with our firm, and

4 Scott Miller of Midwest Generation, and we are here today

5 representing Midwest Generation. We're beginning with

6 our -- with the responses to the questions that we

7 prefiled for Dr. Staudt, and this begins, as Mr. Fox

8 said, with question number 24, and I did not have a

9 follow-up on 24, and in fact, I did not have a follow-up

10 until number 27.

HEARING OFFICER FOX: Ms. Bassi, why don't I

12 see whether any of the other participants on questions

13 number 24, 25 or 26 filed by Ms. -- Midwest Generation

14 had generated a request for any clarification or

15 follow-up. Are we clear on those and prepared to proceed

16 to question number 27? It appears that we are.

17 Ms. Bassi, that refers to the issue of whether SCR is or

18 is beyond RACT. Did you have a follow-up or

19 clarification? Apparently you do. Please go ahead.

MS. BASSI: Thank you. Yes, this question

21 does concern SCR, and it -- and you state here that you

22 believe, Dr. Staudt, that SCR is likely not to be

23 necessary under the proposed rule, correct? That's in

24 your statement?

Keefe Reporting Company

116

DR. STAUDT: Yes, that's --

MS. BASSI: You're sticking with it?

DR. STAUDT: Yes, I'm sticking with it.

MS. BASSI: Okay. Well, for -- in order

5 really for this question -- for my follow-up question

6 here to make sense, I need to go back to question 21, if

7 you don't mind.

HEARING OFFICER FOX: No. If that's what's

9 required to make sense, let's do that.

MS. BASSI: All right. In question 21,

11 question 21 was what is the basis for determining that

12 the 0.9 pounds per million BTU rate in Section 217.344(a)

13 is RACT, and there followed in the Agency's response

14 quite a long and detailed answer. Dr. Staudt, did you

15 prepare that answer for the Agency?

DR. STAUDT: Yes, I did.

MS. BASSI: Okay. So, Mr. Kaleel, do you

18 take no ownership of that answer?

MR. KALEEL: Mr. Staudt -- Dr. Staudt

20 prepared the answer.

MS. BASSI: Okay. Thank you. Some of

22 the -- And again, we've already established, then, that

23 2002 is the base year. I'm sorry. I'm going through my

24 rules -- my questions. Some of them have already been

Keefe Reporting Company

117

1 answered. In your response, Dr. Staudt, there is a

2 statement that you make that says uncontrolled units

3 would typically have an emissions rate of at least 0.5

4 pounds per million BTU, but even at uncontrolled NOx

5 levels of 0.4 pounds per million BTU, and you go on and

6 say the cost would be estimated to be about $2500 per

7 ton, and this is in the response shortly under the second

8 reference to 70 Fed Reg 25162. It's --

DR. STAUDT: Well, the document speaks for

10 itself. We can all read it and see that.

MS. BASSI: Okay. The issue that I want to

12 get at here is the notion of uncontrolled levels and what

13 actually exists at sources, and would -- is it your

14 understanding that some of the sources or even many of

15 the sources that would be subject to -- that are

16 coal-fired or fossil fuel-fired units already include a

17 number of the combustion controls that you describe in

18 the TSD?

DR. STAUDT: Yes, many of the -- if you're

20 looking at utility boilers -- I presume you're talking

21 about utility boilers -- that many of them do -- the

22 majority of them do incorporate some combustion controls.

MS. BASSI: Would the combustion controls of

24 low NOx burners and overfire air be necessarily likely to

Keefe Reporting Company

118

1 allow a utility boiler, a coal-fired boiler, to achieve

2 an emission rate of 0.9 -- 0.09 pounds per million BTU?

DR. STAUDT: Just combustion controls and

4 overfire air, that would -- that's not common, although

5 in the 2007 ozone season, Baldwin unit 3, which only has

6 combustion controls, had a season average of 0.088 pounds

7 per million BTU, so -- and that's not the only unit in

8 the entire country, but the -- that's -- but it's true

9 that most -- that's not common, that level. That

10 emissions level is not common.

MS. BASSI: Would achieving that emission

12 level perhaps depend upon the type of coal-fired boiler

13 it is? You describe several types of coal-fired boilers

14 in the TSD. Let me back up a minute. Did you write the

15 TSD?

DR. STAUDT: Yes. I mean, I -- there was

17 input from the Agency, but I had a major -- I was -- I

18 had a major role in writing the TSD.

MS. BASSI: Are there portions of the TSD

20 that you did not draft?

DR. STAUDT: The -- Some of the tables that

22 I think Mr. Gupta put together, but by and large, I wrote

23 virtually all of it.

MS. BASSI: And is it correct that you

Keefe Reporting Company

119

1 incorporated the TSD as part of your testimony?

DR. STAUDT: That is correct.

MS. BASSI: Okay. So then going back to the

4 TSD, in the TSD, I believe you describe several different

5 types of coal-fired boilers.

DR. STAUDT: Yes.

MS. BASSI: I think you said wall-fired

8 and --

DR. STAUDT: Tangentially-fired and cyclone

10 and --

MS. BASSI: Thank you. You can't put that

12 in the -- okay. Would the type of boiler have any impact

13 on whether the boiler was able to achieve a 0.09 rate

14 with just combustion controls?

DR. STAUDT: Yes, it would.

MS. BASSI: Would a rate of 0.13 or so be a

17 common rate with -- or a not unexpected rate with just

18 combustion controls?

DR. STAUDT: It depends. Depends upon the

20 unit. It's actually -- 0.13 is -- you have a lot of

21 boilers in Illinois that fire Powder River Basin coal,

22 and there are a number of units that are already

23 achieving that level or better with just combustion

24 controls.

Keefe Reporting Company

120

MS. BASSI: Okay.

DR. STAUDT: But it depends upon the unit

3 and time. Now, bear in mind that according to the rule,

4 utilities subject to the multi-pollutant rules and

5 whatnot, they are -- they have their own -- that applies

6 as RACT. That's my understanding according to the rule.

MS. BASSI: Right. If a unit were already

8 achieving a level of 0.13, would the conclusions that are

9 drawn in the TSD regarding the emission controls that

10 would be necessary to get to a 0.09 be the same? Would

11 you draw the same conclusions? As I understand your

12 responses to the questions and the TSD, this rule is

13 based on an assumption of uncontrolled emission levels

14 and that low NOx burners and overfire air are considered

15 combustion controls that are already achieving part of

16 the reduction that would be necessary to meet the rates

17 that are listed in the rule, and so the question is,

18 since these things preexist the proposal, these control

19 measures preexist the proposal, does that change the

20 analysis at all in terms of the equipment type and the

21 cost of control to get down to the 0.09?

DR. STAUDT: Well, first of all, for utility

23 boilers, the 0.09 only applies to those utility boilers

24 that are not part of a multi-pollutant.

Keefe Reporting Company

121

MS. BASSI: Well, there could be some, you

2 know.

DR. STAUDT: Well, I'm not aware of any.

MS. BASSI: And that --

DR. STAUDT: There are some, but there's

6 Kincaid. You've got Kincaid. I don't know if it's

7 covered by that rule.

MR. KALEEL: It's not.

DR. STAUDT: So, you know, we get to the

10 point where we have to look at the rule the way it is,

11 not the way we would like to interpret it down to -- on a

12 particular unit.

MS. BASSI: Well --

DR. STAUDT: The rule says that people who

15 are subject to these multi-pollutant system, which

16 Midwest Generating is, they need to -- that satisfies the

17 RACT requirement.

MS. BASSI: Well, I don't want to get into

19 mincing words that are in the rule with you over the

20 applicability, because that's covered in some earlier

21 questions that are posed to the -- to Mr. Kaleel or

22 whoever that he deems, but the way the applicability

23 section of subpart M reads right now, it appears to me

24 it's based on the applicability of the CAIR, which may

Keefe Reporting Company

122

1 not exist, and if it doesn't exist, then there's a

2 question of what actually -- whether you even get to the

3 CPS and the MPS exemptions, and so that's why we feel

4 it's important to address the 0.9 and the cost figures

5 and whether it is an SNCR or an SCR that might be

6 necessary to achieve those levels if the rule is not

7 amended in the way that has been proposed in these

8 questions.

MR. KALEEL: If I could address that point,

10 I believe there -- and it's in response to a subsequent

11 question from Midwest Generation that gets to the

12 question of applicability with respect to CAIR, and I

13 think there's some language that Midwest Gen proposed,

14 and there's an alternative set of language that the

15 Agency's in agreement with that should address that

16 issue, I believe, so --

MS. BASSI: We agree, but it still has to be

18 adopted.

MR. KALEEL: Understand.

MS. BASSI: So back to my question, what I'm

21 asking is is to achieve a 0.04 additional reduction or --

22 in emission rate, what you're saying, cost analyses and

23 conclusions about control technology apply.

DR. STAUDT: Potentially we have -- you

Keefe Reporting Company

123

1 could potentially do it through deeper stage, deeper air

2 staging in combination with SNCR, but having said that,

3 if it were not possible to do that, for example, if you

4 had a unit that was -- that could not even get the 0.13

5 or 0.11 --

BOARD MEMBER JOHNSON: I missed that.

DR. STAUDT: If that were not -- excuse me.

8 If that were not possible, that might change things, but

9 in terms of the way the rule is as I understand it to be,

10 that where -- the people with multi-pollutant facilities

11 with the multi-pollutant standards would -- that would be

12 their RACT. That -- You know, I stand by my --

MS. BASSI: And we're not disputing that.

DR. STAUDT: Good.

MS. BASSI: We -- We're not disputing that.

16 We're not asking that question.

DR. STAUDT: But let me just give you --

18 just to give you -- if you had a hypothetical situation

19 where to get from 0.13 pound per million BTU to under

20 0.09, now, I think it potentially could be done with SNCR

21 and a combination of air staging, but there's a chance

22 that it might not. If you had to put in SCR, that cost

23 would -- the cost would likely -- it would be a higher

24 number than using a -- on a dollar per ton basis than

Keefe Reporting Company

124

1 using a baseline of 0.4 or 0.5 million -- pounds per

2 million BTU, so I think -- I wanted to basically create

3 the -- describe that situation, because I think it gets

4 to what you're looking for, if you're looking at marginal

5 cost, the incremental cost of the controls.

MS. BASSI: Excuse me. I'm looking at my

7 numbers. Sorry. I forgot what my numbers meant. Okay.

8 What is the maximum amount of reduction that you would

9 expect to see from an SNCR on a coal-fired boiler?

DR. STAUDT: Well, it depends, you know.

11 It's -- I have seen as much as 60 percent. I would not

12 expect to see it at higher levels, but that's usually at

13 a higher NOx baseline. You could potentially see 20 --

14 you know, 20, perhaps 30 percent. So what I said is

15 potentially at 0.13, could you get under 0.09?

16 Potentially through a combination of SNCR and deeper air

17 staging, but that's -- but I'll be the first to say that

18 SNCR is the -- utility boiler applications, particularly

19 at low emission rates, are the more challenging type of

20 applications. That's why -- So -- But again, we get back

21 to I don't see -- the reason -- I don't see -- we -- the

22 way the rule as I understand it's supposed to be -- work,

23 we're discussing a moot point, because the utilities

24 would be exempted from this, at least the utilities

Keefe Reporting Company

125

1 subject to the multi-pollutant standard would be exempted

2 from this.

MS. BASSI: Just looking at straight math, a

4 30 percent reduction, if you -- I believe you said 60

5 percent when you have higher baseline -- or higher --

6 deeper NOx reductions that you would be making with the

7 SNCR, but were you starting with the lower baseline in

8 the first place? I don't -- The lower emission rate in

9 the first place, would -- 30 percent would be perhaps the

10 high end? Is that what I heard you say?

DR. STAUDT: Perhaps. It depends, yeah.

MS. BASSI: It depends? So would 30

13 percent, just looking at straight math, result in a rate

14 of 0.09, do you think?

DR. STAUDT: Well, I could pull out my

16 calculator, but my guess is it would be close, but

17 perhaps not.

MS. BASSI: Would 0.091 be compliant? And

19 maybe that's not a question for you.

DR. STAUDT: My answer before was that

21 through a combination of air staging and SNCR, deeper air

22 staging and SNCR, you could perhaps -- there are units in

23 Illinois that are running at 0.11 pound per million BTU,

24 you know, and it's through air staging, but again, we're

Keefe Reporting Company

126

1 getting back to the way I understand the rule is written,

2 this is kind of a moot point, and that's why --

MS. BASSI: We hope it is too.

DR. STAUDT: Yeah.

MS. BASSI: Okay. Do you know the cost

6 today of an SCR?

DR. STAUDT: What the cost -- I've seen

8 studies on what the costs have been.

MS. BASSI: Can you give us a range?

DR. STAUDT: Oh, in the range of about --

11 you know, it'll vary anywhere from 100 to as high as

12 maybe 200 dollars a kilowatt, but that's -- you know, the

13 mid range being about 150 dollars a kilowatt.

MS. BASSI: Would you be surprised at --

DR. STAUDT: For utility.

MS. BASSI: Would you be surprised at over

17 $300 a kilowatt?

DR. STAUDT: I would be. I can't rule it

19 out, but I would be -- that would certainly be an

20 outrider. There have been studies that looked at this,

21 and they've -- you know, basically the midpoint is

22 somewhere at, you know -- somewhere in the $150 a

23 kilowatt range.

MS. BASSI: And again, this might be a

Keefe Reporting Company

127

1 question for the Agency as opposed to you because they

2 have the implementation and enforcement decisions. If

3 the cost -- If a source demonstrated that the cost to

4 comply was significantly higher than what the Agency has

5 identified as the RACT range of this rule, would that --

6 would this rule not be RACT, at least as applied to that

7 source?

MR. KALEEL: I think an argument could be

9 made that if the costs for a particular unit greatly

10 exceed the range that we have in mind for RACT that the

11 unit would qualify or at least we could support an

12 adjusted standard type of a proceeding.

MS. BASSI: Okay. Thank you. All right.

14 Going back to my questions, then, we were on question 27,

15 and I think you've just answered it.

MS. HODGE: Miss Bassi, may we ask a

17 follow-up on your prior question?

MS. BASSI: Yes, absolutely.

MS. HODGE: And we're headed back to the

20 appendices here, and it's Table C-2, "NOx Reduction from

21 the Application of NOx RACT (Reductions By Categories),"

22 and on the -- down near the bottom of the table -- and

23 I'm talking on page 23 and 24 here, because it's a

24 two-pager -- we do have emission reductions from EGU

Keefe Reporting Company

128

1 coal-fired boilers, total, and I just understood that the

2 Agency said that these units are not really covered by

3 this rule, so why are we showing reductions here in the

4 TSD?

MR. KALEEL: I think what our intent is is

6 the multi-pollutant standard satisfies the requirement

7 for RACT. I don't recall if these specific emission

8 reductions are from a straight application of the 0.09

9 pound per million emission limit or if they reflect the

10 emissions from the multi-pollutant standard. I guess I'd

11 refer to Mr. Gupta for that, but there will be

12 substantial emission reductions from electric generating

13 units in the non-attainment area.

MS. HODGE: You know, could the Agency

15 provide, you know, some more information in this regard?

16 When we look at these tables, we see, you know, the major

17 part of the reductions coming from this rule, the Agency

18 is showing that the major part of the reductions are

19 coming from the units that the Agency says now are not

20 covered by this rule.

MR. KALEEL: What we're saying is that the

22 multi-pollutant standard is a way to comply with this

23 rule.

MS. HODGE: And would you be willing to

Keefe Reporting Company

129

1 provide us some more information on whether these

2 reductions are based upon the multi-pollutant strategy --

MR. KALEEL: Yes, of course.

MS. HODGE: -- or upon these just percentage

5 reductions in this table?

MR. KALEEL: Sure, we'd be happy to provide

7 more information.

MS. HODGE: Okay. I'm sorry --

MS. BASSI: That's okay.

MS. HODGE: -- Miss Bassi. Go ahead. Thank

11 you.

MS. BASSI: To add on to Miss Hodge's

13 question, when you were calculating the reductions from

14 the multi-pollutant standards that are applicable -- that

15 you assume will be applicable to the power plants that

16 are affected by this rule, does that -- is that the

17 state-wide application of that -- of those -- of the MPS

18 and CPS or is it just the non-attainment area

19 applications?

MR. KALEEL: I think what we intend there is

21 that the full system, which may include units within the

22 non-attainment area or not, it's full compliance. It's

23 not compliance just at the units within the boundaries,

24 and it's not just compliance for NOx, but the full

Keefe Reporting Company

130

1 multi-pollutant scenario that's -- that is already part

2 of the Board's rules.

MS. BASSI: So just as an example, I believe

4 Ameren has no units that are located within the

5 non-attainment areas.

MR. KALEEL: I think that's right, yeah.

MS. BASSI: And so Ameren's reductions are

8 included where?

MR. KALEEL: I don't believe that they are,

10 but I need to confirm that.

MS. BASSI: Okay. They're not included.

12 Not included?

MR. GUPTA: Mr. Kaleel, if I could answer

14 that question? Okay. In this table, which is C-2, only

15 the sources in non-attainment area is what is included,

16 EGU sources, not outside non-attainment areas.

MS. BASSI: Looking, then, at the Metro East

18 portion of C-2, for EGU coal-fired boilers, are those

19 tons then totally attributable to Dynegy?

MR. GUPTA: Yes.

MS. BASSI: And two -- only two of Dynegy's

22 plants?

MR. GUPTA: That's correct.

MS. BASSI: Okay.

Keefe Reporting Company

131

HEARING OFFICER FOX: I --

MS. BASSI: You ready?

MS. HODGE: Yes.

HEARING OFFICER FOX: Oh, very well.

5 Ms. Bassi, I think that would wrap up your follow-ups on

6 question number 27 specifically. Am I correct in

7 understanding that?

MS. BASSI: That's correct.

HEARING OFFICER FOX: Excellent. Why don't

10 we move on to question number 28. Do you have follow-up

11 on that?

MS. BASSI: No follow-up.

HEARING OFFICER FOX: Does any other

14 participant wish to follow up on the Agency's answer to

15 Midwest Gen question number 28? Seeing no indication

16 that there is, let's proceed, Ms. Bassi, to number 29.

MS. BASSI: No follow-up.

HEARING OFFICER FOX: Follow-ups on the part

19 of anyone else? Yes. It's Mr. Dennis. Did I recall

20 correctly?

MR. DENNIS: Correct.

HEARING OFFICER FOX: Please go ahead.

MR. DENNIS: Just one question with regards

24 to residual oil and particularly low-nitrogen residual

Keefe Reporting Company

132

1 oil. Does anyone from the Agency panel know whether

2 low-nitrogen residual oil is available in significant

3 quantities in Illinois?

DR. STAUDT: Well, I don't know, but we show

5 information that where -- with residual fuel oil, there's

6 information and data in the TSD that describes emissions

7 reductions using combustion controls and overfire air

8 that are able to get emissions down to the level in the

9 TSD, so it may not be low-nitrogen -- we don't know. We

10 don't know whether low-nitrogen residual oil is available

11 or not, but we do believe that combustion controls or

12 combustion controls in combination with SNCR will enable

13 people firing residual fuel oil to get below the level

14 that's in the TSD and the rule.

MR. DENNIS: Nothing more.

HEARING OFFICER FOX: Nothing further,

17 Mr. Dennis? With regard to question number 29, any other

18 follow-ups or clarifications? Ms. Bassi, it looks like

19 we're ready for question number 30, if you have follow-up

20 on that.

MS. BASSI: I do have some follow-ups on 30.

HEARING OFFICER FOX: Please go ahead.

MS. BASSI: Question 30 regards wood-fired

24 boilers, and this kind of is along the same lines as some

Keefe Reporting Company

133

1 questions that Miss Hodge was asking earlier, but if

2 there are no wood-fired boilers currently subject to this

3 rule, why would the rule address wood-fired boilers? And

4 I recognize that the language of the rule does not

5 address wood-fired boilers specifically, but you discuss

6 wood-fired boilers in the TSD.

DR. STAUDT: Yeah. The reason I described

8 wood-fired boilers for that, there's -- I gave it as

9 examples of -- primarily for SNCR, to show how SNCR has

10 been employed on wood-fired boilers and to achieve NOx

11 reductions. Now, again, I state in the TSD that I don't

12 believe that there are -- you know, to my knowledge,

13 there aren't any wood-fired boilers. And there was

14 another question, a prefiled question -- I'm not sure who

15 prefiled it --

MS. BASSI: It was me.

DR. STAUDT: -- what was the relevance of

18 the wood-fired boilers, would you expect the cost to be

19 similar, and it really had to do with relating that you

20 can get NOx reductions with SNCR, and the data on some of

21 these wood-fired boilers in terms of costs is really --

22 is relevant, okay, and I provide an answer regarding the

23 other question about how information on the cost of SNCR

24 for wood-fired boilers is relevant to other forms, other

Keefe Reporting Company

134

1 types of -- other boilers with different fuels.

MS. BASSI: And this may not, again, be a

3 question specifically for Dr. Staudt, but if there are

4 wood-fired EGU boilers in the non-attainment areas, what

5 subpart do you think they are subject to? M or D? M is

6 the subpart for fossil fuel-fired EGUs. D is the subpart

7 that's apparently applicable to everything else

8 boiler-related.

MR. KALEEL: We don't exclude wood-fired

10 boilers from either definition. I think the definition

11 is for most of the boilers, whether or not it's a solid

12 fuel, and wood would be included within our expectation

13 of what a solid fuel is. Whether it's an EGU I think has

14 to do with how much electricity they sell, and I think

15 it's -- specifically subpart M is greater than 250 -- 25

16 megawatts. I'm sorry.

MS. BASSI: But does not subpart M say it's

18 a fossil fuel-fired stationary boiler?

MR. KALEEL: Yes.

MS. BASSI: Without saying that it's a -- I

21 think the new language that we are proposing adds that

22 it's an electric generating unit; is that correct?

MR. KALEEL: I think that's right.

MS. BASSI: Okay. And -- But there is no

Keefe Reporting Company

135

1 new definition of fossil fuel-fired proposed, correct?

MR. KALEEL: That's right.

MS. BASSI: Okay. And the definition of

4 fossil fuel-fired I won't get into at the moment, but it

5 requires a certain amount of fossil fuel to be fired,

6 correct?

MR. KALEEL: That's right.

MS. BASSI: That just sounds so repetitious,

9 doesn't it? Is wood considered a fossil fuel?

MR. KALEEL: No.

MS. BASSI: So then back to my question.

12 Would a wood-fired EGU be subject to M or D? It seems to

13 me it would be subject to D, and I just wondered if you

14 concur.

MR. KALEEL: Just a moment. I think our

16 understanding is that it would be considered an

17 industrial boiler.

MS. BASSI: Okay. Thank you. That's all I

19 have on that one.

HEARING OFFICER FOX: Did anyone else have

21 follow-up or clarification with regard to question number

22 30? Seeing none, Ms. Bassi, that brings us of course to

23 31 regarding pulverized coal and wall-fired boilers.

MS. BASSI: No questions.

Keefe Reporting Company

136

HEARING OFFICER FOX: No questions? Any

2 other follow-up or clarifications? Seeing none,

3 Ms. Bassi, that brings us, of course, to 32.

MS. BASSI: No questions.

HEARING OFFICER FOX: Very well. On any

6 other part? Mr. Dennis, I see you have a question.

MR. DENNIS: Yes. With regard to Table 2-2,

8 I think the point is being made that the proper retrofit

9 performance is reflected by this table, but looking at

10 the table, I believe the first two entries on it -- and

11 I'm going by memory because I don't have it in front of

12 me -- but I believe the first two entries are labeled as

13 retrofit?

DR. STAUDT: Yes.

MR. DENNIS: And the remainder of the

16 entries in that table are not labeled as retrofits.

DR. STAUDT: Well, that's true. It says

18 that.

MR. DENNIS: So may we presume that those

20 are new installations, then?

DR. STAUDT: I can't state that they

22 necessarily are or not new installations. I'd have to

23 look back at the original document this came from. The

24 original document has more information on it.

Keefe Reporting Company

137

MR. DENNIS: Also the last category there, I

2 believe less than 20 ppm?

DR. STAUDT: Yes.

MR. DENNIS: And looking at that, are two of

5 those installations actually recording levels higher than

6 20 ppm?

DR. STAUDT: Yes, but again, our rule that

8 the rule has proposed is, like, 0.08 pound per million

9 BTU, which is well above that, so the point being that

10 the technology that can get you 0.08 is probably on the

11 order of about 60 ppm, and so the technology is there to

12 get you below 60 ppm.

MR. DENNIS: If those -- If the entries on

14 that table, the ones that are not labeled as retrofits,

15 if those are all in fact new installations, do they

16 demonstrate anything about retrofit performance

17 capability?

DR. STAUDT: Well, yes, in terms of -- you

19 know, they reaffirm that these emissions levels are

20 possible, the fact that you got -- the fact that you've

21 got, you know, retrofits there that are, you know, 4 to 7

22 ppm, and I don't know that the other ones are not

23 retrofits.

MR. DENNIS: But if they were new

Keefe Reporting Company

138

1 installations, would they not demonstrate the capability

2 of that level of performance on a new installation but

3 not necessarily for the retrofit?

DR. STAUDT: Just if you'll bear with us,

5 we're getting some more information. I think a question

6 came up as well I think in some of the prefiled questions

7 relating to this table, and I want to go back. There

8 are -- If you go to the original source document, there

9 are more than -- a lot more than two retrofits here. I'm

10 not sure why on that table I only show two, but this is

11 an attachment here that has, you know, on the first page

12 one, two --

MS. ROCCAFORTE: I'd like to clarify,

14 Dr. Staudt. It's attachment number 8 listed on

15 attachment A that was with the initial filing.

HEARING OFFICER FOX: It was specifically an

17 attachment to the TSD, Ms. Roccaforte?

MS. ROCCAFORTE: Correct.

HEARING OFFICER FOX: Thank you.

DR. STAUDT: I've already counted nine

21 retrofits, ten, eleven, twelve. I mean, there are quite

22 a number of retrofits here listed on this attachment to

23 the TSD, so, you know, as I pointed out, it's -- you

24 know, it's something that -- even though the other ones

Keefe Reporting Company

139

1 don't say retrofit, I have -- I don't have here -- I'm

2 not going to cross -- I don't know if you want me to

3 cross-check how many of these lists on Table 2-2 are

4 listed here as retrofits or not, but there are a lot of

5 other retrofits in this document.

MR. DENNIS: I think it's a significant

7 point that whether a new unit is achieving this level of

8 performance versus a retrofit, because I think the rule

9 that's -- the proposed rule is really aimed at requiring

10 retrofit control on sources and not -- it's -- I don't

11 think it's a question here what that new source is going

12 to achieve a very low level of NOx. I think the real

13 question is what can be achieved on a retrofit at

14 different sources throughout the state, some of which

15 might be 70 years old.

DR. STAUDT: Well, I think as we discussed

17 earlier, in fact some of the older boilers, frankly, in

18 general they would -- because of the size of the

19 furnaces, in general they would more likely be easier to

20 attain low emissions levels, because the newer furnace --

21 newer boilers tend to be made more compact to minimize

22 the cost, and one of the factors in designing a low NOx

23 burner, you have to consider basically the volumetric

24 heat release, so you've got -- putting in the same amount

Keefe Reporting Company

140

1 of heat in a smaller space, it makes it tougher to

2 control the NOx. If you're retrofitting an older unit,

3 you know, where there are challenges are you basically

4 have to remove the old burner, put in a new one, you may

5 have to change the refractory, but what these -- this

6 data shows is that these emissions levels are being

7 achieved on retrofit units. It's not --

MR. DENNIS: On at least two units.

DR. STAUDT: Well, I count, though, of the

10 ones here, one, two, three --

HEARING OFFICER FOX: Dr. Staudt, for the

12 record, again, you're referring to the attachment 8 to

13 the TSD.

DR. STAUDT: I'm referring to the TSD.

MS. HODGE: Could we -- May I clarify?

16 Attachment A?

MS. ROCCAFORTE: 8. Number 8.

MS. HODGE: Attachment 8.

DR. STAUDT: Attachment 8, yes.

HEARING OFFICER FOX: Ms. Roccaforte, do you

21 have copies of that that we could in effect readmit as a

22 hearing exhibit since there appear to be some questions

23 about it?

MS. ROCCAFORTE: We can make copies.

Keefe Reporting Company

141

HEARING OFFICER FOX: Very good. Would --

MS. HODGE: Is that in the copy of the TSD

3 that was filed with the Board?

MS. ROCCAFORTE: I don't believe all of the

5 attachments were electronically available.

MS. HODGE: Oh, okay.

HEARING OFFICER FOX: That would be as a

8 matter of volume, but what I will certainly pledge to do,

9 Ms. Hodge, during the break is speak with our clerk and

10 at least ask him to specifically scan to the Board's Web

11 page the attachment 8 -- I'm sorry. It's attachment 8 --

MS. HODGE: 8.

HEARING OFFICER FOX: -- appendix A to the

14 TSD.

MS. ROCCAFORTE: In the motion for waiver of

16 copy requirements, at the end of that motion is a list of

17 all of the attachments to the TSD. The first one is the

18 Clean Air Act and the second one's the Environmental

19 Protection Act, which we asked that we not have to submit

20 that, so --

HEARING OFFICER FOX: Correct.

MS. ROCCAFORTE: -- beginning with 3 through

23 68, those are all of the attachments to the TSD, and we

24 are specifically talking about number 8, which is the

Keefe Reporting Company

142

1 letter to Mr. Regulator, New Hampshire Division of

2 Environmental Services, and it's dated May 19, 2006.

HEARING OFFICER FOX: And the motion for

4 waiver of file requirements was the waiver of the

5 requirement to file nine original -- nine copies, and I

6 believe the Board granted your motion to the extent of

7 allowing filing of four, so they are certainly part of

8 the record, and because of the volume of the 64 exhibits,

9 I believe, that you referred to, they may not, Ms. Hodge,

10 candidly, all be posted at the Board's Web site, but I

11 can certainly make sure based on the questions about that

12 single document that we get that on sooner rather than

13 later.

MS. HODGE: Okay. I would appreciate that

15 very much. Thank you.

HEARING OFFICER FOX: Sure.

MS. HODGE: And also I would ask the Agency,

18 could you make all of those attachments available for us

19 to come review?

MS. ROCCAFORTE: Sure.

MS. HODGE: Okay. Thank you.

HEARING OFFICER FOX: Sure. Mr. Dennis, I

23 believe we were on you, if you had another -- it looks as

24 if you have another question.

Keefe Reporting Company

143

MR. DENNIS: One further question. This

2 response here also references Table 2-3 in the TSD, and

3 that table lists two boilers, two very small boilers, one

4 20.9 million BTU per hour and one 6 million BTU per hour,

5 and I was just wondering, the data that -- there's a

6 column for flow rate in dry standard cubic feet per

7 minute, and on the smaller unit, the numbers there look

8 quite a bit out of line. I just wonder if there's

9 some -- if these results have been somehow confused with

10 other test results from maybe another unit.

11 Particularly, I think the flow rates look to be about two

12 to three times what you would expect from a unit of that

13 size.

DR. STAUDT: Yeah, I noticed that. That's

15 something -- I'm not sure -- I'm looking here at the

16 Patton State Hospital. That's the one, Patton State

17 Hospital, boiler number 3?

MR. KALEEL: That's one of them, yeah.

DR. STAUDT: Yeah. See's Candies. Those

20 are the numbers that are in this document, so I can't

21 speak to, you know, why those numbers are what they are,

22 so those are the numbers that are in this -- that are

23 reported in this document. Whether or not they're a typo

24 from originally put in by Cleaver-Brooks, I can't say as

Keefe Reporting Company

144

1 far as those flow rates are concerned.

MR. DENNIS: Nothing further.

HEARING OFFICER FOX: Thank you, Mr. Dennis.

4 Ms. Bassi, I believe we were -- and forgive me if I'm

5 mistaken -- addressing follow-ups on question number 32;

6 is that correct?

MS. BASSI: That is correct.

HEARING OFFICER FOX: Did you have any

9 further follow-ups on your answers to your own questions?

MS. BASSI: No.

HEARING OFFICER FOX: Any other

12 participants? Why don't we proceed to number 33,

13 Ms. Bassi, if you're --

MS. BASSI: No questions.

HEARING OFFICER FOX: No questions at all?

16 Any other participants with questions on -- follow-ups on

17 that answer? Ms. Bassi, number 34. There's --

MS. BASSI: No questions.

HEARING OFFICER FOX: Any other

20 participants? Mr. Dennis on question number 34.

MR. DENNIS: I believe the answer's

22 incorrect on 34. The range of 100 to 600 boiler

23 horsepower should be somewhere in the -- should be

24 something close to a range of 4 to 20 million BTU per

Keefe Reporting Company

145

1 hour, I believe.

HEARING OFFICER FOX: Mr. Dennis, do you

3 have a question based on that observation for the Agency?

MR. DENNIS: Well, no, except that I think

5 that this -- it would deserve a correction, a corrected

6 response, I think.

HEARING OFFICER FOX: What -- You need to

8 pose a question to the Agency, Mr. Dennis.

MR. DENNIS: I'm sorry. With a range of 100

10 to 600 horsepower, would the Agency agree that that would

11 be roughly equivalent to a more than 20 million BTU per

12 hour heat input capacity?

DR. STAUDT: That's something I'll look at.

MR. DENNIS: Thank you.

HEARING OFFICER FOX: Thank you, Mr. Dennis.

16 Did you have further questions?

MR. DENNIS: Nothing further.

HEARING OFFICER FOX: Any other participant

19 with regard to Midwest Gen's question number 34,

20 follow-ups or clarifications? Ms. Bassi, that brings us

21 naturally to number 35, if you have a --

MS. BASSI: I do have some questions about

23 35, and again, I'm not sure Dr. Staudt -- I would imagine

24 that you provided some of this information to the Agency,

Keefe Reporting Company

146

1 but you may not be the appropriate person to answer, but

2 I guess you all can figure it out.

DR. STAUDT: I'll do my best.

MS. BASSI: What makes the trainers on a

5 combustion tuning training course certified or capable of

6 providing such training? In other words, is there some

7 certifier of the trainers, a national organization or

8 something that does this, or is it at a college? And I

9 went onto this Web site that you --

DR. STAUDT: ABMA?

MS. BASSI: Yeah.

DR. STAUDT: Yes.

MS. BASSI: But what makes -- why would they

14 be the ones?

DR. STAUDT: Well, the ABMA is the American

16 Boiler Manufacturers Association, and they're the guys

17 who build the boilers. They are an association of

18 companies, such as Cleaver-Brooks, but other boiler

19 manufacturers as well, and most of the people who supply

20 these burners and these boilers have their own courses

21 that they provide to a -- they provide to the -- to

22 people who operate these boilers, so in terms of

23 training, these are people who are typically employees

24 and experts from the actual boiler company who understand

Keefe Reporting Company

147

1 their equipment. Is there a larger certifying agency?

2 I'm not sure about that.

MS. BASSI: So then basically, the rule is

4 requiring that sources go back to an outfit like the ABMA

5 or go online to find out where they can get these

6 certified training courses; is that correct?

MR. KALEEL: That's my understanding.

MS. BASSI: Would --

DR. STAUDT: I think the intent of the rule

10 is really to make sure -- I'm just -- and this really

11 applies to combustion tuning. They want to make sure

12 that it's done by somebody who is knowledgeable and

13 competent, and it's -- and it would be up to the Agency

14 to determine if there's some other way to do that, to

15 verify that somebody is knowledgeable and competent, but

16 obviously I think you'd want the combustion tuning done

17 by somebody who knew what they were doing.

MS. BASSI: Would the Agency be -- Would the

19 Agency accept some form of on-the-job training or

20 on-the-job certification?

MR. KALEEL: I think we'd be open to

22 discussing that. Again, I guess I concur with

23 Dr. Staudt's observation about the intent, is that people

24 that are maintaining the boilers and performing the

Keefe Reporting Company

148

1 tuning have some qualification to do that.

MS. BASSI: How would this be implemented?

3 Is there a -- Would there be -- I see the question in

4 your face. Would there be a permit requirement and the

5 permit would provide some detail, or the permit just says

6 you have to have combustion tuning and then everybody

7 kind of guesses?

DR. STAUDT: Could I -- Every -- It's my

9 understanding that any place where you have boilers, you

10 actually have a licensed boiler operator. He's got to be

11 licensed either by the State or somebody, somebody who --

12 you know, you can't -- so that's my understanding, and I

13 know at least in Massachusetts, you know, the companies,

14 they have to have somebody who's got a license there, and

15 perhaps it has -- perhaps if there's such a thing -- such

16 a person in Illinois, at facilities in Illinois, that

17 might be the person under whose direction that might be

18 done.

MS. BASSI: Do you guys at the Agency know

20 if that's a requirement in Illinois?

MR. KALEEL: We don't know if that's a

22 requirement. I think the way the rule reads is that the

23 operator take a class and maintain a record that says

24 they have taken a class. It's not -- In my opinion, it's

Keefe Reporting Company

149

1 not an overly burdensome thing, and I guess maybe I'm

2 speculating here a little bit, but I would guess that

3 most companies would want to have the guy that's

4 operating their boiler know what he's doing, so -- and I

5 don't think it's asking much more than that.

MS. BASSI: I suspect the companies don't

7 disagree with what you're telling them, but the concern

8 seems to be with where one gets the class. If they have

9 to fly to Alaska to get the class, is that outrageous?

10 That's, I think, the issue. We'll go on. We're done.

HEARING OFFICER FOX: Any other questions on

12 number 35 regarding the training? Ms. Bassi, why don't

13 we go ahead to number 36, if you --

MS. BASSI: No questions.

HEARING OFFICER FOX: No questions

16 from Midwest Generation. Mr. Dennis on number 36.

MR. DENNIS: Just one quick one. How does

18 one make sure that the injection ports or nozzles are

19 placed in the proper zones?

DR. STAUDT: Normally what's done in

21 these -- in the design of these systems -- and I can, you

22 know, speak from experience because I used to be in the

23 business of designing and selling and starting these

24 things up -- what happens is initially you usually do

Keefe Reporting Company

150

1 some -- in designing these systems, you do some testing

2 to get -- to measure the temperatures in the furnace.

3 There is computer modeling typically done. They model

4 the furnace on a computer and then they simulate, you

5 know, putting injectors at different locations to get

6 good distribution, and they do that under different

7 conditions, and that's how these systems are typically

8 designed. That's how the injection points are

9 determined. Of course after you start the system up, you

10 then verify the performance of the system by measuring

11 the performance in terms of NOx levels and ammonia slip.

MR. DENNIS: Would that -- Is that what's

13 known as I believe a computational fluid dynamic study, a

14 CFD?

DR. STAUDT: Yes. Typically, yeah, that's

16 what you might call it.

MR. DENNIS: And for an industrial-sized

18 stoker boiler, how -- what would the -- a study, a CFD

19 study, cost for a boiler of that size?

DR. STAUDT: Well, typically it would be

21 part of your -- if you were going to put one of these

22 systems in, it would be part of the contract. It would

23 be a relatively small part of the total contract, so, you

24 know, might be -- the study might be 20, 30 thousand

Keefe Reporting Company

151

1 dollars, but, you know, if you're just going to spend

2 half a million dollars on a piece of equipment or more,

3 that's -- it's basically a portion of the engineering.

4 It's really a portion of the engineering of the system.

MR. DENNIS: Thank you. Nothing more.

HEARING OFFICER FOX: Nothing further?

7 We've been at it for quite a little while and I'm sure

8 people would appreciate a chance to take a break. Why

9 don't we do so and resume right at three o'clock where

10 we've left off with question number 37 of yours,

11 Ms. Bassi. Thanks, everyone.

(Brief recess taken.)

HEARING OFFICER FOX: Ms. Bassi, I had

14 marked that we had gotten to Midwest Generation's

15 question number 37. Why don't we dive right in and see

16 if whether you have a follow-up on that one.

MS. BASSI: 37, I have no questions.

HEARING OFFICER FOX: Very good. Any other

19 participants with a question about 37? Mr. Dennis,

20 please go ahead.

MR. DENNIS: One quick one. If -- In

22 designing SNCR for an industrial boiler, if there are

23 multiple fuels used in the boiler, does that complicate

24 the task and perhaps increase the cost and complexity of

Keefe Reporting Company

152

1 the project?

DR. STAUDT: You know, it would have a

3 slight increase to the cost. I mean, what you might have

4 to do is have some additional injectors or something like

5 that. You would have -- You might want to have some

6 control logic that if one day you're burning coal and the

7 other day you're burning wood, you might have a, you

8 know, different set of controls programmed in, you know,

9 so when you're firing coal versus firing wood, but

10 it's -- it can -- it's something that can be accommodated

11 in these systems.

MR. DENNIS: Okay. Thank you.

HEARING OFFICER FOX: Anything further,

14 Mr. Dennis?

MR. DENNIS: No.

HEARING OFFICER FOX: Any other participant

17 follow-up? Ms. Hodge?

MS. HODGE: May I just follow up on that?

19 What about if you're using a combination of these

20 different fuels? Would that affect your answer?

DR. STAUDT: Oh, it wouldn't affect my

22 answer. I mean, you could -- you know, in many cases

23 people coal fire -- make -- you know, for example, you

24 know, if we're talking about stoker-fired units, they can

Keefe Reporting Company

153

1 burn anything that can be burned pretty much, so they may

2 put in coal, they may mix in some wood, you know, wood

3 material, and that's -- it's not unusual to sometimes

4 change it, change what is being done, fired, and it's,

5 you know, something that's routinely done with these

6 systems. You can design for it, you can accommodate it.

7 You know, you just need to think it, you know, when you

8 design the system. You -- As I said, you may put it --

9 you know, you may locate the injectors in a sightly

10 different location depending upon, you know, your

11 expected temperature, where the temperature is in the

12 furnace, but it might slightly change the design, but

13 it's not going to make it dramatically more or less

14 expensive.

MS. HODGE: Okay. Even if that combination

16 is changing perhaps on a frequent basis?

DR. STAUDT: Oh, yeah.

MS. HODGE: Your answer would be the same?

DR. STAUDT: Yeah, because what happens

20 is -- you know, these systems have been designed for lots

21 of applications where -- I mean, this does come up. I

22 mean, there are literally hundreds of these systems in

23 use, so you have to believe that this has come up, and I

24 know it's come up in many applications, and there are

Keefe Reporting Company

154

1 ways to design for it, okay? It's not something that

2 means the technology can't be used. There are just ways

3 you design the system to accommodate them, you know.

MS. HODGE: Thank you.

HEARING OFFICER FOX: Anything further,

6 Ms. Hodge? Any other questions with regard to number 38?

MS. BASSI: No.

HEARING OFFICER FOX: Seeing none,

9 Ms. Bassi, let's move on to -- I'm sorry. That was 37.

10 We're now moving on to 38. I believe that was my

11 mistake.

MS. BASSI: None on 38.

HEARING OFFICER FOX: None on 38? On the

14 part of any other participant, follow-ups or

15 clarifications on 38? Ms. Bassi, number 39.

MS. BASSI: 39, I have just a couple of

17 quick ones. Does your response here mean -- and we were

18 talking about this a little bit earlier. Does your

19 response here mean that the cost for wood-fired EGUs is

20 about $15 per kilowatt? I think that's what it says.

DR. STAUDT: Well, it says --

MS. BASSI: This is your response to number

23 39.

DR. STAUDT: Well, I think the -- my

Keefe Reporting Company

155

1 question -- your question says, "Page 30 of the TSD

2 states, 'For EGUs SNCR capital cost is in the range of

3 about $15 per kilowatt, and in most cases NOx reductions

4 in the range of about 30 percent are possible.' How does

5 this translate to dollars per ton of NOx removed?" What

6 I did is I referred back to Figures -- my answer, Figures

7 2-14 and 2-14b, okay, of the TSD, if I can find where

8 that page is.

MS. BASSI: And I would also --

DR. STAUDT: Page 32.

MS. BASSI: -- note that my follow-up

12 question is following on a couple of questions that

13 previously were talking about wood-fired boilers, so it's

14 not, like, out of the blue in the transcript.

DR. STAUDT: Oh, no, that's all right. So,

16 I mean, if you're looking specifically -- I -- the answer

17 that's here is really -- you know, I -- what I understood

18 you to mean, how do you translate the capital -- the

19 estimated capital cost for an EGU would be $15 per

20 kilowatt, in that range, and what you can do is you can

21 see what cost effectiveness is. If you want to look at

22 calculated cost effectiveness, look at Figure 2-14a.

23 This is cost effectiveness for ICI boilers, and they took

24 50 of them and they plotted it, but for an EGU, since

Keefe Reporting Company

156

1 your question in question -- your question here dealt

2 with -- 39, dealt with EGUs, you go to the far right,

3 okay, because that's at the high end of it where these

4 lines kind of flatten out, and you can see for an EGU for

5 annual operations, you might expect -- you know, for a

6 large boiler, annual operations, you might see something

7 in the range of $1500 per ton of NOx removed.

MS. BASSI: Okay. So does -- So I think the

9 answer to my question was yes.

DR. STAUDT: I'm not sure what -- well, I'm

11 looking at the answer to question 39.

MS. BASSI: Right.

DR. STAUDT: The answer to 39 is --

MS. BASSI: And then my follow-up was, does

15 this statement mean that the cost for wood-fired EGUs is

16 $15 per kilowatt?

DR. STAUDT: Oh, no, no, because it depends

18 upon the size, as I talked about, for a specific -- for a

19 smaller -- as you -- if you look at that figure of 2-14a,

20 as you can notice, as the unit size gets smaller, it

21 starts to curve up, starts to get higher and higher, and

22 that's because the normalized -- what I will call

23 normalized cost say on a dollar per million BTU basis --

24 and that's shown in Figure 2-14b -- that tends to get

Keefe Reporting Company

157

1 higher as it gets smaller, so what it does on the cost

2 effectiveness, the dollars per ton of NOx removed, that

3 tends to make it get more expensive as you get to smaller

4 and smaller units, all right, so if you had a wood-fired

5 boiler that was, you know, 145, 200 million BTUs per

6 hour, you might expect a cost effectiveness of in the

7 range of maybe around $2,000 per ton of NOx versus the

8 1500 I discussed earlier.

MS. BASSI: Thank you.

DR. STAUDT: Sure.

HEARING OFFICER FOX: Anything further,

12 Ms. Bassi? Any other questions regarding Midwest

13 Generation's question number 39 and the answer to it?

14 Ms. Bassi, let's move on to number 40, if you have a

15 follow-up.

MS. BASSI: Yes, I do have. With respect to

17 your answer to number 40, is the argument or statement

18 that the higher baseline NOx -- that the higher the

19 baseline NOx and therefore the more NOx to be removed,

20 the lower the cost per ton in an SCR application, is that

21 what this is saying effectively?

DR. STAUDT: No. This is question 40,

23 right?

MS. BASSI: Yeah.

Keefe Reporting Company

158

DR. STAUDT: Okay. No, what I did there --

2 and let's just go to the TSD. I don't know if people

3 have it in front of them. I think you're talking about

4 these Figures 2-17 versus 2-18, and what I talk about is,

5 you know, the -- in Figure -- in question 40 you ask

6 about do I think dollar per million BTU is a better

7 measure than -- better measure for RACT than dollars per

8 ton, and I say no, because, you know, I'm not suggesting

9 that. The reason I put that information in there on the

10 dollars per million BTU, it's the same reason that why

11 for an electric utility might be -- from an electric

12 utility perspective, you might be interested in what's

13 the impact on your generating cost, right, and from an

14 industrial boiler who -- they may use steam to produce

15 power, they may produce the steam to -- for process. You

16 really -- The best way to normalize it is on a dollar per

17 million BTU basis, and it's really -- you know, that may

18 be relevant to an industrial boiler operator. That's

19 really why I put it in there. But it's not to argue that

20 it should be -- that that's a better measure for RACT.

MS. BASSI: No, I -- and that's --

DR. STAUDT: It's just --

MS. BASSI: I'm not quibbling with your

24 response at all.

Keefe Reporting Company

159

DR. STAUDT: Okay.

MS. BASSI: My question is is that if the --

3 if you have a higher baseline of NOx and therefore you

4 have more NOx to remove, would the cost per whatever

5 metric you're using be lower as a result if you're

6 applying an SCR? So if you apply an SCR, if you have a

7 lot of NOx to remove, your cost per metric to remove that

8 NOx is going to be lower; is that correct?

DR. STAUDT: Yeah.

MS. BASSI: That's your point.

DR. STAUDT: The lower initial NOx level,

12 you know, if you're starting at a lower initial NOx

13 level -- let's look at Figure 2-17, because that

14 basically gets to that point.

MS. BASSI: Okay.

DR. STAUDT: You've got three data points

17 here. One is 0.4, the other's 0.5, the other's 0.6. And

18 bear in mind, I mainly developed this with the interest

19 of industrial boilers that have, you know, maybe a 0.13

20 pound per million BTU already. As the NOx level gets

21 lower, you can see that -- compare the 0.4 line to the

22 0.6 line for baseline NOx level. You can see it's more

23 expensive for the 0.4 line, which is the -- I think the

24 point you're trying to make, is that as the starting

Keefe Reporting Company

160

1 point gets lower, the baseline level gets lower. As

2 you -- The way you do the calculations, the actual -- the

3 cost in dollars per ton of NOx removed gets bigger

4 because the dollar part on the top goes down but doesn't

5 go down very much because you're using less ammonia, but

6 the denominator gets much smaller, so the -- you know,

7 the result of the arithmetic of the numerator times

8 the -- over the denominator is that it gets higher.

MS. BASSI: Okay. Thank you.

HEARING OFFICER FOX: Anything else,

11 Ms. Bassi, on number 40?

MS. BASSI: Actually, I do have one other

13 thing. The rule provides for the use of averaging plans

14 within a source, and so if you're using an average of --

15 if you use an averaging plan, is it not the case that

16 you're looking at the total amount of NOx removed among

17 all the units that are part of the averaging plan, and

18 how would that impact your cost analysis? With an

19 averaging plan, you have more -- you're just lumping it

20 all together. Does that have an impact on your NOx -- on

21 your cost analysis, and what is that impact?

DR. STAUDT: Well, what would happen on an

23 averaging plan, an averaging plan is sort of like

24 operating -- almost like operating over a system-wide

Keefe Reporting Company

161

1 cap. If you're looking at -- If you know what your heat

2 input's going to be, it's really a -- like having a cap,

3 so what that enables you to do -- it actually is very

4 helpful, because what it enables you to do is put control

5 with -- if you have one big source, you can put -- invest

6 the money on, say, an SCR on the big source and then you

7 don't have to do as much on the small sources, so that

8 can affect -- if you look at how you get to the end

9 point, it would actually end up helping you.

MS. BASSI: So it could help to reduce

11 costs.

DR. STAUDT: It could help to --

MS. BASSI: At least in this type of metric,

14 or any type of metric, perhaps.

DR. STAUDT: Well, it would -- you know,

16 it's certainly helpful in terms of reducing your overall

17 costs versus if you impose the equivalent emission rate

18 for every unit. I mean, it would be more expensive to

19 have one emission rate on each and every unit and impose

20 that on every unit typically than if you have a -- the

21 equivalent of a system-wide cap.

MS. BASSI: Okay. That's all.

HEARING OFFICER FOX: Very well. Any other

24 questions on the basis of number 40, the other

Keefe Reporting Company

162

1 participants? Ms. Bassi, to number 41. There's a

2 one-word answer for you to respond to if you'd like.

MS. BASSI: Why would retrofit issues be

4 greater for EGUs than for industrial boilers? And again,

5 this refers to page 36 of the TSD.

DR. STAUDT: If you could help me and just

7 point me to where on that page.

MS. BASSI: Well, I would love to. I think

9 what I'm referring to is at the end, the last couple of

10 sentences of the first paragraph that begins with "as a

11 result."

DR. STAUDT: It's 36?

MS. BASSI: On page 36. I don't know why I

14 have 36 written down at the moment. Let me ask it a

15 different way. Are retrofit issues more problematic for

16 EGUs than they are for industrial boilers?

DR. STAUDT: Well, you know, each facility

18 is going to have its own unique, you know, issues, so --

MS. BASSI: So there's not a generalization?

DR. STAUDT: Well, it, you know, depends

21 upon the technology, it depends upon the facility you're

22 talking about, so, you know, frankly, it will depend.

MS. BASSI: Okay.

DR. STAUDT: Yeah.

Keefe Reporting Company

163

MS. BASSI: We'll let it go. No further on

2 41.

HEARING OFFICER FOX: Any other questions on

4 41? Mr. Dennis?

MR. DENNIS: Yes. In the -- Considering

6 a -- perhaps a worst-case example of an industrial boiler

7 retrofit for an SCR, in the -- this example, the boiler

8 room is very crowded. The boiler house is surrounded by

9 other process buildings. The overhead space is taken up

10 with pipe racks. There's no lay-down area immediately

11 adjacent to the plant and there are infrastructure

12 issues, meaning that any electrical system requirements

13 are going to prompt an upgrade. Would it be reasonable

14 in a situation like this to ratio -- to expect an

15 increased project cost of perhaps two to three times

16 the -- what a normal cost would be?

DR. STAUDT: Well, let's -- your question

18 had to do with SCR, and as I stated, based upon the

19 emission limits that are in the rule, I don't see why

20 someone -- I don't see why an industrial boiler owner

21 would install SCR. Be that as it may, if someone chose

22 to install SCR, even though I feel confident that there

23 are other technologies that can get you to below these

24 limits for less money, sure, if you have a very

Keefe Reporting Company

164

1 constrained boiler, it's going to cost more money to

2 install something like SCR where that takes up some

3 space. But as I say, I don't -- you know, the limits

4 here for the industrial boilers should not force people

5 to put -- install SCR, and that was -- you know, frankly,

6 that was something that I was hoping to -- you know, when

7 we developed the rule, I didn't think it was -- you know,

8 we'd be doing that. I didn't think we'd be pushing

9 people towards SCR.

MR. DENNIS: Thank you. Nothing.

HEARING OFFICER FOX: Nothing further?

MR. DENNIS: Nothing further.

HEARING OFFICER FOX: Any other questions

14 based on number 41? Seeing none, Ms. Bassi, that brings

15 us, of course, to number 42 if you have a follow-up.

MS. BASSI: Yeah. I believe the Agency's

17 response to question 7, if you can look back to my

18 question 7 quickly, is that the RACT range is 2500 to

19 3,000 dollars per ton as a cost effectiveness number; is

20 that correct?

MR. KALEEL: That's correct.

MS. BASSI: Could you tell us in what year

23 dollars that 2500 to 3,000 dollars per ton is, and

24 whoever was doing all that --

Keefe Reporting Company

165

MR. KALEEL: Yeah, it's current dollars.

MS. BASSI: 2008 dollars?

MR. KALEEL: Yes.

MS. BASSI: Oh, okay. Do 2008 dollar values

5 fluctuate from day to day? That's a rhetorical question.

DR. STAUDT: Last week they did.

MS. BASSI: Last week, not this week?

8 That's it.

HEARING OFFICER FOX: So noted on the

10 rhetorical nature of the question.

DR. STAUDT: Yeah, yesterday they went back

12 up.

HEARING OFFICER FOX: Any other --

14 Ms. Bassi, either you or any other participants with

15 additional follow-up on number 42? Seeing none, that, of

16 course, Ms. Bassi, brings us to number 43.

MS. BASSI: No questions.

HEARING OFFICER FOX: Any other participants

19 with a follow-up on 43? 44, Ms. Bassi, if you have a

20 follow-up.

MS. BASSI: No questions.

HEARING OFFICER FOX: None there. Any other

23 participants to follow up on 44? Moving ahead to number

24 45 with regard to point sources. Ms. Bassi, a follow-up?

Keefe Reporting Company

166

MS. BASSI: Actually, I don't have any more

2 questions for the rest of this.

HEARING OFFICER FOX: Very good.

MS. BASSI: I do have one on 19 that I would

5 like to go back with Dr. Staudt.

HEARING OFFICER FOX: Why don't -- Perhaps I

7 can put to rest numbers 45, 46, 47 and 48? Would any of

8 the other participants aside from Ms. Bassi have specific

9 follow-ups or clarifications with regard to those four

10 questions? Seeing none, Ms. Bassi, you mentioned number

11 19, I believe.

MS. BASSI: Number 19 I would like to go

13 back to. Again, I suspect this is a Dr. Staudt question.

14 The answer that you gave to our question here for

15 gas-fired boilers is to see the page -- the Table 2-17a

16 on page 43 of the TSD, and perhaps we were missing

17 something in this, but we don't -- we were unable to draw

18 conclusions on -- based on this table. The table sets

19 forth a bunch of data, but it doesn't tell us how you

20 established 0.08 pounds per million BTU as RACT for the

21 gas-fired boilers.

DR. STAUDT: I'm not sure that I answered

23 that. Did I?

MS. BASSI: I wondered if you could --

Keefe Reporting Company

167

MR. KALEEL: I think what we're pointing

2 back to on Table 2-17 is that there are a range of

3 control options to meet 0.08 at cost ranges that fit in

4 with our idea of what RACT is, so there isn't a specific

5 number there, 0.08, but I think rather what you're seeing

6 is for a range of different boiler sizes that there are a

7 number of control options that could get controlled

8 emissions in the range of 0.08 or less.

MS. BASSI: And among those, it appears that

10 SCR is an acceptable RACT technology. Is that so?

MR. KALEEL: SCR is an option.

DR. STAUDT: Let me add, first of all, you

13 want to look -- notice here that you see some of these

14 are reference 1, and you see low NOx burner partway down

15 there, unit capacity of 50 million BTUs per hour, low NOx

16 burners, 0.08, 0.09. This is reference 1. Reference 1

17 is a 1994 ACT document where this data was just kind of

18 incorporated from the ACT document just so to maybe

19 give -- to kind of put that in there, but recognize that

20 1994 ACT document does not reflect current capabilities

21 for low NOx burners, so there's -- you know, the

22 information in there is informative in some respect, but

23 keep in mind, whatever emission rate you see there, it

24 is -- current low NOx burner technology is capable of

Keefe Reporting Company

168

1 achieving 0.08, you know, pound per million BTU on gas.

2 In fact, if you put in flue gas or circulation, you'll be

3 well below that, so -- and combustion controls are widely

4 regarded as reasonable in cost, so for gas-fired

5 applications, 0.08 is well within the capabilities of

6 state-wide combustion controls, and we provided some more

7 information on what burners can do and -- as part of

8 this, so 0.08 is well within the capabilities of current

9 combustion control technology.

MS. BASSI: So then are you saying SCR is

11 not RACT?

DR. STAUDT: Well, RACT -- we're

13 establishing emissions limitations for the basis of RACT.

14 If someone chooses to install SCR to achieve that limit,

15 you know, that's up to them, okay? It -- I don't think

16 the Agency's going to tell you you can't install SCR to

17 do that. The Agency -- The proposed rule is to achieve

18 under 0.08 pound per million BTU, and if someone chooses

19 to install SCR, which is more costly, than to install low

20 NOx burners, that's up to them, but most people would

21 install the less expensive approach, I would assume,

22 which is combustion controls.

MS. BASSI: All right. Well, let me put

24 this a little -- let me ask a more specific question. If

Keefe Reporting Company

169

1 you look on Table 2-17a, and in the portion of the table

2 that says natural gas-fired watertube field-erected

3 multiple burner as opposed to single burner, and on the

4 fifth one down, it is a 500 million BTU unit. It says

5 SCR, 70 to 90 percent reduction, and the cost range is

6 24 -- effectively 2400 to 7100 or 7200 dollars per ton,

7 so if it got up into that upper ranges, past 3,000

8 dollars per ton, it kind of goes back to a question that

9 I had asked before, is that no longer RACT. So an SCR --

10 if SCR was the only technology available to reach 0.08

11 and it was going to push this source or unit up into

12 the over 3,000 dollar a ton cost effectiveness range,

13 which is within what you've provided here, then would

14 that no longer be RACT under this rule?

DR. STAUDT: Well, let's -- maybe there's a

16 misunderstanding here. Table 2-17a is not intended to

17 say that these are all RACT technologies. It's really

18 just there as background information to show what other

19 people have arrived at in terms of cost effectiveness.

20 It's not saying that these are specifically prescriptions

21 for RACT. What is proposed in this rule is an emissions

22 rate that is believed to be achievable at costs that are

23 within the boundaries for RACT. Now, as I stated

24 repeatedly, I would not expect anyone with a gas-fired

Keefe Reporting Company

170

1 boiler who needed to get under 0.08 pound per million BTU

2 to install SCR. I would be astounded if that were --

3 somebody determined that to be necessary. More than

4 likely they would use combustion controls.

MS. BASSI: Okay. That's it.

HEARING OFFICER FOX: Any --

MS. BASSI: On 19.

HEARING OFFICER FOX: On number 19? Any --

9 We've gotten to the end of the questions specifically

10 directed to Mr. -- Dr. Staudt. Ms. Hodge, did you have a

11 follow-up?

MS. HODGE: Perhaps. I would like to ask a

13 question in follow-up to Ms. Bassi's, and it's very close

14 to her question but I'm not sure we got an answer. What

15 if an industrial boiler must install SCR to meet the

16 0.08?

DR. STAUDT: Well, I don't --

MS. HODGE: Would it be your opinion that

19 SCR would be RACT in that circumstance?

DR. STAUDT: I would -- Well, what I would

21 like to do is see how -- why it's necessary. I would be

22 very surprised if that -- it would be a unique -- very,

23 very unique situation if that were necessary.

MS. HODGE: Let's assume that was the

Keefe Reporting Company

171

1 situation.

DR. STAUDT: You know, how the Agency or how

3 the Pollution Control Board chose to address that, that's

4 up to them. All I can say is that if somebody told me

5 that I have a gas-fired boiler and the only way I can get

6 to 0.08 pound per million BTU is by installing SCR, I

7 would -- I'd be very surprised. I would say this is an

8 extremely unusual situation and I would need to see some

9 information to persuade me that it was truly necessary,

10 but if that's the case, they -- there may be a way to

11 address it. I --

MS. HODGE: So is it possible that it could

13 be outside of the range of what would be determined to be

14 RACT, the cost would be outside of the range?

DR. STAUDT: It depends upon what the

16 baseline NOx levels are, okay? You know, we talked

17 earlier about if you're starting at one pound per million

18 BTU with a gas-fired boiler, which is pretty unusual, and

19 you need to put an SCR on to get down to that level,

20 since we're talking about things that I believe are kind

21 of, you know, really, really remote or unusual and kind

22 of at the tail of the normal distribution curve, let's

23 say that you had something that has a very high NOx level

24 and for some reason you have to put SCR in. In that

Keefe Reporting Company

172

1 case, what happens is the denominator, that dollar per

2 ton of NOx, those tons of NOx get to be very big, and so

3 the math actually may bring you well under $3,000 per

4 ton.

MS. HODGE: But if the cost were over 3,000,

6 do you think that --

DR. STAUDT: Well, that -- you know, it

8 depends upon -- I don't know if from the Agency's

9 perspective they've established a bright line in terms of

10 what RACT is, and they've -- my understanding is that

11 they have not, that there isn't going to be a

12 case-by-case RACT. It's not --

MS. HODGE: Thank you. Mr. Kaleel, has the

14 Agency established a bright line?

MR. KALEEL: We don't have a specific bright

16 line test. The concept of RACT has been around for a

17 long time, and there have been cases in the case of VOCs

18 where certain companies have argued that the costs are

19 very unreasonable and they have sought some site-specific

20 adjustment to a board proceeding, and I think the same

21 kind of a thing could happen here if costs are really,

22 really unique, really above and beyond -- greatly above

23 and beyond what we've indicated here what we think is

24 appropriate, and then some sort of site-specific action

Keefe Reporting Company

173

1 might be needed, but --

MS. HODGE: Okay. And then would the Agency

3 prefer to address that on a case-by-case basis in the

4 context of this rulemaking or would you prefer industries

5 that may find themself -- you know, sources in that

6 position to come to the Agency for assistance?

MR. KALEEL: I think we're willing to talk

8 while the rulemaking is going on to the extent that we

9 can, and if we need to adjust something later, we'd be

10 happy to look at that as well.

MS. HODGE: Okay. Thank you. That's all I

12 have. Thank you.

HEARING OFFICER FOX: Surely, surely,

14 Ms. Hodge. Ms. Bassi, that brings us to the extent of

15 questions directed specifically to Dr. Staudt to the end

16 of Midwest Generation's questions for now. I think we'd

17 established that we would return to those that are

18 directed to Mr. Kaleel, and that brings us to the point

19 in our proceedings, as we discussed this morning, to the

20 questions from ExxonMobil and the answers supplied by the

21 Agency to those, and while those were filed by --

22 Mr. Hinske was the original filer of those questions. I

23 believe, Mr. Elvert, you are here to request any

24 follow-ups or clarifications. I wonder if -- Is that

Keefe Reporting Company

174

1 correct, that you were going to --

MR. ELVERT: Yeah.

HEARING OFFICER FOX: I wonder if I could

4 impose on you for the benefit both of the Agency and the

5 Board and for the court reporter, would you be available

6 to move up a little closer --

MR. ELVERT: Sure.

HEARING OFFICER FOX: -- so that you could

9 be a little more audible?

MR. ELVERT: Yes.

HEARING OFFICER FOX: That would be great.

12 There's an entire table there and there's certainly room

13 for any notes or papers you might have. And I appreciate

14 it. I think that will help simplify things.

MR. ELVERT: This'll be real fast.

HEARING OFFICER FOX: Great. I will -- Why

17 don't we plan to proceed just as we have with the other

18 entities that have had questions. We'll just go one by

19 one through the total of 28 that you had posed, and if

20 you have no follow-ups or believe that it may have been

21 answered by some of the give and take earlier,

22 Mr. Elvert, we can certainly just move ahead.

MR. ELVERT: Yeah. In fact, really all I

24 have is one. All the other ones have been answered

Keefe Reporting Company

175

1 earlier.

HEARING OFFICER FOX: Very well. If you

3 would specify which question that is, we can have the

4 Agency provide the follow-up that you're seeking.

MR. ELVERT: All right. First, just off the

6 bat, again, my name is Robert Elvert. I'm the midwest

7 state regulatory issues advisor for ExxonMobil, and

8 again, I apologize -- or Mr. Hinske apologizes for not

9 being able to be here. Most of our questions have been

10 already answered either through the original responses or

11 today's hearings. Really the only question we have left

12 is number 16 that we'd like to seek further

13 clarification.

HEARING OFFICER FOX: And that question,

15 Mr. Elvert, deals with the Agency's consideration of

16 extending the compliance date; am I correct?

MR. ELVERT: Yes, it is.

HEARING OFFICER FOX: Very well. Please go

19 ahead.

MR. ELVERT: The Agency responded there are

21 considered proposals for a couple of the industrial

22 sectors, and really our question is basically what is the

23 status of those considerations.

MR. KALEEL: I mean, we have considered

Keefe Reporting Company

176

1 perhaps some unique circumstances with the two industries

2 that are represented in our response, petroleum

3 refineries and glass melting furnaces. They're -- We

4 don't want to treat them the same. Obviously the

5 industries are different, but in regards to petroleum

6 refineries, we understand that -- you know, the nature of

7 their industry and the impact on the local economy, the

8 need to plan shutdowns on a regular cycle, and we've

9 talked about that with not just ExxonMobil but also Citgo

10 and ConocoPhillips, and I think we need to have some more

11 discussions. We need to understand better what kind of

12 schedules that they're proposing and -- but we are

13 amenable to finding some sort of a relief that allows

14 much of the work that's needed to comply with the rule to

15 occur on normal planned shutdown cycles.

HEARING OFFICER FOX: Anything further,

17 Mr. Elvert?

MR. ELVERT: That is fine. Thank you very

19 much.

HEARING OFFICER FOX: Were any of the other

21 participants wishing to ask -- Ms. Bassi.

MS. BASSI: I have a couple of questions

23 about -- I have questions about a couple of them.

24 Number -- The first one is number 12.

Keefe Reporting Company

177

HEARING OFFICER FOX: I'm sorry. Number 12,

2 Ms. Bassi?

MS. BASSI: Yes.

HEARING OFFICER FOX: Sorry to interrupt.

MS. BASSI: That's all right. Number 12 is

6 talking about construction permitting, and in this -- in

7 the Agency's response to the question -- let's see. The

8 question was whether the Agency had planned for any

9 expedited preconstruction permitting efforts, and the

10 Agency replied that they have the statute that limits

11 them to 90 days and that things are taking 50 and 60 days

12 to get a permit and that -- and the Agency says that if

13 companies seeking such construction permits can help to

14 ensure quick turnaround by keeping their applications

15 focused only on the controls necessary to comply. My

16 question is, will the Agency keep the construction

17 permits similarly focused?

MR. KALEEL: I think that's our intent. I

19 don't know if there's specific examples in mind where it

20 got screwed up, but I think -- again, I think we're

21 averaging right now 50 to 60 days on minor source

22 permits.

MS. BASSI: Okay. And my other -- that was

24 all I had on that one, and my other question was on

Keefe Reporting Company

178

1 number 14, wherein the response -- we've talked about

2 this a little bit already today, but we didn't talk much

3 about bump-up. I just wondered, is there a likelihood of

4 a bump-up? There can be a bump-up in both ozone or the

5 PM classifications; is that correct?

MR. KALEEL: There certainly can be a

7 bump-up in the case of ozone. The ozone in the both

8 Chicago and Metro East areas are classified as moderate

9 and the Clean Air Act provides specific bump-up

10 provisions. I don't think there's a similar provision

11 for PM2.5. Within a non-attainment designation, USEPA

12 hasn't classified areas as moderate or serious or severe.

MS. BASSI: Okay. Never mind, then. That's

14 it.

HEARING OFFICER FOX: The Agency had

16 responded to a number of ExxonMobil's questions. Did any

17 of them generate any requests for clarification on the

18 part of any of the other participants? Mr. Elvert, you

19 were right. You were very quick, and of course we

20 appreciate that, and --

MR. ELVERT: You're welcome.

HEARING OFFICER FOX: -- Ms. Bassi, we're

23 back to you. We're at -- to the point in the proceedings

24 where we had agreed to turn to the responses to Midwest

Keefe Reporting Company

179

1 Generation's questions that were directed specifically to

2 Mr. Kaleel, and I think we had touched upon -- at least

3 touched upon a couple of those, but certainly as we

4 can -- as we proceed, we can see if some of those have

5 already been answered at least in part, but why don't we

6 begin, of course, with number 1 if you're ready to go.

MS. BASSI: No questions.

HEARING OFFICER FOX: No questions? Did

9 anyone else have any follow-up on the basis of the

10 Agency's response to question number 1? Seeing none,

11 Ms. Bassi, of course number 2.

MS. BASSI: No questions.

HEARING OFFICER FOX: None? Any other

14 participants with follow-up questions on number 2? That

15 brings us, of course, to number 3, Ms. Bassi.

MS. BASSI: No questions.

HEARING OFFICER FOX: On the part of any

18 other participants, number 3? Number 4, Ms. Bassi.

MS. BASSI: Number 4 is about averaging

20 plans, and we do have some questions about averaging

21 plans. Currently, as the rule is proposed, averaging

22 plans are allowed, but they are allowed only within a

23 source as opposed to within a system; is that correct?

MR. KALEEL: That's correct.

Keefe Reporting Company

180

MS. BASSI: And the rule provides that a

2 source or a unit can be included in only one averaging

3 plan. Does -- What does that mean? Does that mean that

4 a source that's subject to subpart D cannot be in -- or

5 subpart M is probably more like it -- cannot be in a

6 subpart V, as in Victor, averaging plan?

MR. KALEEL: I guess I'd like to distinguish

8 between your use of the word source and maybe the -- what

9 our intent is in terms of emission units.

MS. BASSI: Okay.

MR. KALEEL: Within a source, a company at

12 one location, they could have multiple averaging plans.

13 I think we envisioned that. But each individual emission

14 unit could only be included in one of those, one seasonal

15 and one annual.

MS. BASSI: So what I'm trying to get at,

17 though, is does participation of a unit in an averaging

18 plan under one of the subparts that's being created in

19 this rulemaking preclude its participation in an

20 averaging plan under another existing subpart, like

21 subpart V? I mean, yes, that's sources, but the units at

22 the sources or the CPS or -- which is essentially an

23 averaging plan that it goes outside the non-attainment

24 areas. Acid rain has averaging plans that are

Keefe Reporting Company

181

1 unit-specific.

MR. KALEEL: I think what we're talking

3 about in terms of averaging plans are in the concept of

4 this NOx RACT rulemaking.

MS. BASSI: Just within this?

MR. KALEEL: But within this rulemaking, a

7 boiler with a process heater, that would be allowed.

MS. BASSI: I think there's -- okay. There

9 is -- In Section 217.390(a)(1), which is not part of this

10 rulemaking, 217.390(a)(1) is the -- is part of the

11 Board's docket at R07-19, which is the rulemaking for

12 engines. Do you -- Did you participate in that

13 rulemaking?

MR. KALEEL: Yes, I did.

MS. BASSI: Do you recall the averaging

16 provisions in that rule?

MR. KALEEL: Somewhat, yes.

MS. BASSI: Is it the case that the

19 averaging provisions of that rule are system-wide within

20 the non-attainment area as opposed to source-wide within

21 the non-attainment area?

MR. KALEEL: The -- I think that is the

23 case. I think what was envisioned there was in the case

24 of a particular company who operates various compressor

Keefe Reporting Company

182

1 stations along a pipeline, and in some cases those

2 pipeline compressors would be located outside of the

3 non-attainment area, so that that was a concession, if

4 you will, on our part in the context of the compressor

5 stations given kind of the unique characteristics that

6 they have. Within a particular company, one operating

7 company, they might have various compressor stations

8 located in multiple counties along a pipeline.

MS. BASSI: I think you're confusing that

10 with the NOx SIP call one. There were two engine rules,

11 and I think the other one allowed that, but the second

12 one allowed only within the non-attainment area.

MR. KALEEL: Okay. I apologize. I prefaced

14 my remark that I only generally remembered the first --

MS. BASSI: Right. Is there a reason why

16 the Agency chose to limit the averaging plans in this

17 rule to just sources as opposed to systems within the

18 non-attainment area?

MR. KALEEL: I think in general it's

20 probably easier to conceive of an implementation of a

21 rulemaking as source-specific. I'm not aware of too many

22 circumstances beyond electric utilities, who already have

23 an averaging scheme under the multi-pollutant standard,

24 where that's even an issue.

Keefe Reporting Company

183

MS. BASSI: So no -- none of the other

2 sources or companies affected by this rule would have

3 multiple sites within a non-attainment area?

MR. KALEEL: I don't believe I said none,

5 but I think it would be pretty unusual. I think for the

6 most part they're individual operators.

MS. BASSI: Well, given our discussion

8 earlier about the exemption for sources that are subject

9 to the MPS or the CPS, the multi-pollutant standards, and

10 again assuming that the Board would adopt those -- but

11 who knows, maybe they wouldn't for some reason -- would

12 the Agency be open to considering a system-wide averaging

13 within the non-attainment area as opposed to just

14 limiting it to source-wide averaging?

MR. KALEEL: I guess we'd want to take a

16 look at the proposal. We're certainly open to discussing

17 any aspects of the rule, and if it makes sense to do

18 that, I think we're open to talk about it.

MS. BASSI: That's all I had on 4.

HEARING OFFICER FOX: And did any other

21 participant have a follow-up with regard to number 4?

22 Seeing none, Ms. Bassi, number 5, if you have a

23 follow-up.

MS. BASSI: Yes, I do. Oh, this is

Keefe Reporting Company

184

1 establishing that the annual emission reports serve as

2 the basis for determining the applicability of a unit as

3 an affected source, and in its response, the Agency used

4 the phrase "in general." This implies that there are

5 other means of determining whether a unit's emissions

6 exceed the thresholds of the rule, and I wondered if you

7 could give us some clues as to what those might be other

8 than annual emission reports.

MR. KALEEL: Well, I think the rule also

10 provides for a company to obtain a FESOP that would limit

11 their emissions to less than 15 tons, and that's

12 obviously the preferred way to do this, but to allow

13 maybe a little less paperwork, we intend to review the

14 annual emission reports. We have a review process to

15 receive annual emission reports and do some quality

16 assurance, and to the extent that we believe that

17 emissions are misreported, we might not solely rely on

18 those reported emissions. I think that's probably what

19 we had in mind there.

MS. BASSI: Okay. But you will -- will you

21 confirm, though, that the second tier of applicability --

22 in other words, the unit level of applicability of the

23 rule -- is based not on PTE or potential to emit, but it

24 is based on actual emissions?

Keefe Reporting Company

185

MR. KALEEL: Yes.

MS. BASSI: Okay. And if it's based on

3 actual emissions, is a FESOP -- which is a federally

4 enforceable state operating permit -- necessary at all?

5 I mean, you could have a source -- you could have a unit

6 that has a potential to emit a gazillion tons, but if it

7 emits only two, a FESOP isn't going to have any meaning.

MR. KALEEL: I don't think we require that

9 you get a FESOP to take advantage of this.

MS. BASSI: When would a new unit become

11 subject to the rule?

MR. KALEEL: I believe the first year

13 they're operating.

MS. BASSI: Would -- Okay. So if you have a

15 unit that's operating and it emits only 13 tons in --

16 annually, then it would not be subject to this rule; is

17 that correct?

MR. KALEEL: That's right.

MS. BASSI: Okay. That's it.

HEARING OFFICER FOX: Very well. Any other

21 follow-ups on question number 5? Seeing none, moving

22 on --

BOARD MEMBER JOHNSON: I'm seeing one.

HEARING OFFICER FOX: I'm sorry. I

Keefe Reporting Company

186

1 missed --

MS. HODGE: I have a quick follow-up.

HEARING OFFICER FOX: My apologies,

4 Ms. Hodge, to you.

MS. HODGE: And if you would -- this is in

6 follow-up to Miss Bassi's comments, and this has to do --

7 if we look in the Agency's notice of proposed amendment,

8 it shows the existing Section 217.121 for new fuel

9 combustion emission sources as being repealed here, and

10 so then we have just the new subpart B, which was the old

11 subpart C, existing fuel combustion emissions, so I'm not

12 sure, how does that interplay, you know, with the

13 existing new?

MR. KALEEL: Well, a new unit has other

15 requirements that they would be permitted under their new

16 source performance standards. There's other new source

17 review requirements, so, I mean, they would get picked

18 up, but --

MS. HODGE: Okay. But they would not be

20 subject to this rule, though, under the proposal right

21 here; is that --

MR. KALEEL: I think once they're operating,

23 they would be subject to this rule as well.

MS. HODGE: And where does it say that here

Keefe Reporting Company

187

1 in the proposed regulatory language?

MR. KALEEL: I think in a number of cases

3 we -- in our applicability we use words like "all" or

4 "any," and there are -- there's nothing in there that

5 distinguishes a specific date of construction with the

6 exception of the averaging plan provision. I don't see

7 anything in here that would exclude them.

MS. HODGE: Then what does the term

9 "existing" mean?

MS. BASSI: In -- You mean in 217.141?

MS. HODGE: Correct.

MR. RAO: Mr. Kaleel?

MR. KALEEL: Yes.

MR. RAO: While I was checking that, I just

15 wanted to point out that Section 217.154, performance

16 testing, there you have two subsections, ones that deal

17 with units constructed on or before December 1, 2009, and

18 for units constructed or modified after December 1, 2009.

19 Does that apply to new units, the subsection B, which

20 applies to units constructed or modified after 2009?

MR. KALEEL: This would include all units

22 constructed after 2009, including some that we don't even

23 know about, so that would include new units.

MR. RAO: But similar language is not

Keefe Reporting Company

188

1 proposed in the applicability section. Would it make the

2 rules clearer if you have some language which sets forth

3 that new units are subject to these rules?

MR. KALEEL: Perhaps -- I guess just given

5 the nature of the questions here, maybe it isn't clear,

6 so --

MS. BASSI: Let me follow up on this a bit.

8 Is Section 217-141 necessary anymore if this rule is

9 adopted?

MR. KALEEL: I think we'd want to respond to

11 that in writing. I --

MS. BASSI: Okay. Think about that?

MR. KALEEL: Yeah. I don't want to make a

14 blanket statement at this point.

MS. BASSI: And so then -- okay. Never

16 mind.

HEARING OFFICER FOX: Anything further,

18 Ms. Hodge, on that issue?

MS. HODGE: No. I'm done. Thank you.

HEARING OFFICER FOX: All done. For

21 Ms. Bassi?

MS. BASSI: Not on 5.

HEARING OFFICER FOX: Very well. Any other

24 participants with questions regarding number 5? I'm

Keefe Reporting Company

189

1 seeing none. On to number 6, Ms. Bassi.

MS. BASSI: Number 6, in what way does the

3 Agency not agree with the underlying premise of the

4 question? And this question -- just for the record, this

5 question goes to the applicability of subpart M being

6 based upon the efficacy of the CAIR, which is in doubt.

MR. KALEEL: Well, I think you hit upon the

8 issue there. There's a statement in there that CAIR has

9 been overturned, thus invalidating the Illinois CAIR

10 rule.

MS. BASSI: But qualified by the parens.

MR. KALEEL: Assuming there is a mandate,

13 I -- and I'd probably want to defer to the lawyers, but

14 my understanding is the Illinois CAIR rule is a state

15 rule that's been adopted by the Board, and unless there's

16 some subsequent action, it would still stand.

MS. BASSI: It would stand independent of

18 the federal CAIR?

MR. KALEEL: Again, I'd want to consult

20 lawyers, but it -- unless there was some other action

21 taken to invalidate the rule, and I think that's the

22 language that we had issue with.

MS. BASSI: Okay.

MR. KALEEL: Having said that, that really

Keefe Reporting Company

190

1 doesn't get to the point of the question, which we did

2 try to answer, so --

MS. BASSI: Well, no, that -- you've

4 answered the question that I had, my follow-up question,

5 and --

MR. KALEEL: Okay.

MS. BASSI: -- it raises other issues. If

8 the Illinois CAIR stands -- Assuming the total vacatur of

9 the federal CAIR, if the Illinois CAIR stands as an

10 independent rule, how would it be implemented when the

11 Illinois CAIR assumes the administration of USEPA of the

12 trading system?

MR. KALEEL: I think we appreciate the

14 problems when there isn't a national trading program. I

15 think, again, the -- I think the way we interpreted your

16 question is there's an automatic invalidation of the

17 state adopted rule, and I guess we don't see it as an

18 automatic invalidation. We know that USEPA is trying

19 very hard to reestablish CAIR, so right now this is kind

20 of hypothetical, but --

MS. BASSI: Thank you.

MR. KIM: Can I also add for the record that

23 I don't think this particular line of questioning in this

24 context is really where the Agency's going to make any

Keefe Reporting Company

191

1 official position as to what the current status is of the

2 Illinois CAIR rule, because I think that at this point,

3 until the dust settles, it's -- from a legal standpoint

4 we're not making any statement one way or the other, and

5 I think Mr. Kaleel's position, that that's not really

6 what the point of it was, and I -- in terms of our

7 concern, and then our answer, notwithstanding that,

8 should be sufficient for the purposes of this hearing.

MS. BASSI: I -- Thank you very much, and I

10 agree with that, but with the proposed changes in

11 language -- and I don't know where those come from, where

12 those are in here, but --

HEARING OFFICER FOX: I think that's your

14 question number 20.

MS. BASSI: In number 20, right. So --

16 okay. I'm done with 6.

HEARING OFFICER FOX: Very well. That --

18 And were there any other follow-up questions on number 6?

19 Ms. Bassi, that brings us to number 7. I think we had at

20 least touched upon that earlier, if not addressed it

21 fully.

MS. BASSI: Number 7?

HEARING OFFICER FOX: Number 7, yes.

MS. BASSI: Yes, we're done with that.

Keefe Reporting Company

192

HEARING OFFICER FOX: Very well. Anyone

2 else who wish -- requests any follow-up on number 7?

3 Seeing none, that of course brings us to number 8. Ms.

4 Bassi?

MS. BASSI: No questions.

HEARING OFFICER FOX: Any follow-ups with

7 regard to the load shaving unit issue with number 8?

8 Seeing none, that brings us to number 9, Ms. Bassi.

MS. BASSI: No questions.

HEARING OFFICER FOX: Any other follow-up or

11 clarification sought from the Agency here? None. Number

12 10?

MS. BASSI: No questions, I don't think. No

14 questions.

HEARING OFFICER FOX: On number 10?

BOARD MEMBER JOHNSON: Auctioneer.

MS. HODGE: Yeah.

MS. BASSI: Going --

HEARING OFFICER FOX: Any other participants

20 with follow-up questions on the Agency's answer to number

21 10? Seeing none, there's that one-word answer to your

22 question, Ms. Bassi, in number 11.

MS. BASSI: Yeah, and I have a bigger

24 question than the one word.

Keefe Reporting Company

193

HEARING OFFICER FOX: Please go ahead.

MS. BASSI: Does the Agency's answer to that

3 with respect to the Metro East non-attainment area, where

4 you do not have coterminous non-attainment areas for

5 ozone and PM2.5, amount to an expanded applicability of

6 this rule? It's expanding the applicability of the

7 entire rule beyond the non -- the respective

8 non-attainment areas for ozone and PM2.5?

MR. KALEEL: I guess I don't see how it's

10 expanding the applicability.

MS. BASSI: Well, is Baldwin Township in

12 Randolph County non-attainment for ozone?

MR. KALEEL: No, it's not, but it is for

14 PM2.5.

MS. BASSI: Do the ozone -- the seasonal

16 requirements of this rule apply in Randolph Township, or

17 Randolph -- or Baldwin Township in Randolph County?

MR. KALEEL: The way the rule is written, it

19 does, yes.

MS. BASSI: Okay. And likewise, is Jersey

21 County non-attainment for PM2.5?

MR. KALEEL: No, it's not.

MS. BASSI: And do the annual requirements

24 of this rule apply in Jersey County?

Keefe Reporting Company

194

MR. KALEEL: Yes.

MS. BASSI: So is that not an expansion

3 beyond the respective non-attainment areas of the rule?

MR. KALEEL: The way the rule is written,

5 those counties would have to comply with both, so I --

MS. BASSI: So you have --

MR. KALEEL: I don't know that it's an

8 expansion. Those boundaries have been established for

9 three or four years now.

MS. BASSI: But you have an area that is

11 attainment for ozone having to comply with the seasonal

12 limit; is that correct?

MR. KALEEL: I understand, yes.

MS. BASSI: Okay. That's it.

MR. KALEEL: I also don't believe there are

16 any sources to which the rule applies in Jersey County.

MS. BASSI: No cows, huh?

HEARING OFFICER FOX: Ms. Bassi, you said

19 that was it with regard to number 11?

MS. BASSI: That's it with number 11.

HEARING OFFICER FOX: Very good. Any other

22 questions following up on number 11? That brings us to

23 number 12, of course, Ms. Bassi.

MS. BASSI: No questions.

Keefe Reporting Company

195

HEARING OFFICER FOX: No questions there.

2 On the part of anyone else? To number 13, Ms. Bassi.

MS. BASSI: I do have a follow-up in number

4 13. This question goes to the fact that there is a

5 statement in the Section -- Section 217.152(b) is I

6 believe establishing the compliance date; is that

7 correct? I think it's establishing the compliance date,

8 and there's a statement in there that the owner/operator

9 of an emission unit that is subject to these subparts

10 must operate the unit consistent with good air

11 pollution -- is this a substantive requirement? This

12 statement, is that statement a substantive requirement

13 that is enforceable?

MR. KALEEL: I'm not sure what the context

15 of an enforcement action would constitute. I think we're

16 just asking for good operating practices to be used in

17 the operation of the units.

MS. BASSI: So then basically, you do not

19 anticipate that an inspector could go to a source, look

20 at this unit, say, you're not using good operating

21 practices, and then have this moved through the system to

22 be an enforcement case on the basis of this language.

MR. KALEEL: It'd be hard to conceive of a

24 situation like that, but I guess I couldn't rule it out.

Keefe Reporting Company

196

MS. BASSI: Oh, you could not rule it out?

MR. KALEEL: I don't think I would rule it

3 out.

MS. BASSI: Okay.

MS. ROCCAFORTE: Can I ask a follow-up

6 question on that?

HEARING OFFICER FOX: Please go ahead,

8 Ms. Roccaforte.

MS. ROCCAFORTE: Just to clarify?

10 Mr. Kaleel, to your best knowledge, do you know if

11 statements like this are incorporated in Title V permits?

MR. KALEEL: My understanding is there

13 are -- is language like that in many Title V permits.

MS. ROCCAFORTE: Thank you.

HEARING OFFICER FOX: Thank you,

16 Ms. Roccaforte. Any follow-ups, Ms. Bassi?

MS. BASSI: No.

HEARING OFFICER FOX: Very well. With

19 regard --

MR. RAO: May I?

HEARING OFFICER FOX: Yes, go ahead.

MR. RAO: Mr. Kaleel, with this --

MR. KALEEL: I'm sorry.

MR. RAO: Getting back to the same

Keefe Reporting Company

197

1 provision, that language, could you just explain why you

2 put that provision in the compliance dates? Would it be

3 more appropriate to move that provision under

4 applicability sections of different subparts?

MR. KALEEL: It might be appropriate in

6 another location, yes.

MR. RAO: Okay.

MR. KALEEL: It doesn't have a direct

9 relation to compliance dates.

MR. RAO: Thank you.

HEARING OFFICER FOX: Any further questions

12 with regard to the Agency's response to number 13?

13 Seeing none, that brings us to 14, regarding

14 record-keeping, Ms. Bassi.

MS. BASSI: Nope.

HEARING OFFICER FOX: No questions? Any

17 other questions on that issue or the response to number

18 14? Seeing none, to number 15, Ms. Bassi.

MS. BASSI: No further questions.

HEARING OFFICER FOX: On the part of any of

21 the other participants? I'm seeing no indication of a

22 question. That takes us to question 16, of course,

23 regarding Section 217.156(k), Ms. Bassi.

MS. BASSI: No questions.

Keefe Reporting Company

198

HEARING OFFICER FOX: Any other interest in

2 following up with those issues? Seeing none, again, a

3 one-word response to your question, Ms. Bassi. Any

4 follow-up?

MS. BASSI: No follow-up.

HEARING OFFICER FOX: No follow-up to that?

7 Any other clarifications sought by any of the other

8 participants? None apparently. Number 18, Ms. Bassi.

MS. BASSI: No questions.

HEARING OFFICER FOX: Did anyone else wish

11 to pose a follow-up? None? Ms. Bassi, I think we had

12 talked about number 19 already.

MS. BASSI: That's correct.

HEARING OFFICER FOX: Satisfactorily

15 answered for you?

MS. BASSI: Yes.

HEARING OFFICER FOX: Very good. Any other

18 follow-up questions on that one? That takes us, of

19 course, to number 20. I'm betting that you do have some

20 follow-ups on that proposed alternative language.

MS. BASSI: Actually, very short.

HEARING OFFICER FOX: Very good. Please go

23 ahead.

MS. BASSI: I -- Question 20 presents a

Keefe Reporting Company

199

1 proposal for amending language that we viewed as better

2 effectuating the perceived intent of the rule, and we

3 discussed this with the Agency and they provided a

4 response, and the follow-up here is that the Agency's

5 language is acceptable to Midwest Generation and Midwest

6 Generation will so state in either testimony or comments.

HEARING OFFICER FOX: Very good. That's

8 certainly on the record on the basis of your testimony

9 here, Ms. Bassi, and --

MS. BASSI: I can't testify.

HEARING OFFICER FOX: You cannot. That's

12 correct. Thank you for reminding me of that.

MS. BASSI: I've been reminded several

14 times.

HEARING OFFICER FOX: And once again today,

16 apparently, but if that's suitable for a post-hearing

17 comment or for prefiled testimony for the second hearing,

18 those certainly would be two avenues very suitable for

19 making that position known. But did you have any further

20 follow-up questions or anything further to say?

MS. BASSI: No.

HEARING OFFICER FOX: Did any of the other

23 participants with regard to that proposed alternative

24 language? I'm seeing no interest in follow-ups, so that

Keefe Reporting Company

200

1 brings us to question number 21, Ms. Bassi.

MS. BASSI: And we have already addressed

3 question 21.

HEARING OFFICER FOX: We did in fact.

5 You're right. Thank you for reminding me. Anyone else

6 have follow-ups of their own that they wish to pose?

7 Very well. Number 22, Ms. Bassi, regarding the --

MS. BASSI: No, I have no questions, and no

9 questions on 23.

HEARING OFFICER FOX: On either 22 or 23,

11 does anyone seek any clarification or follow-up? Seeing

12 none whatsoever, that brings us to the end of the

13 questions that Midwest Generation had posed for

14 Mr. Kaleel, and I'm to the end of all of the questions

15 prefiled -- I'm sorry -- responses filed by the Agency to

16 the questions that were prefiled by the three entities

17 who have been here today. I recall, checking the sign-in

18 sheet that was placed at the door seeking the names of

19 anyone who wished to testify, Mr. Gupta, I think you had

20 placed your name on that, but of course you have been

21 sworn in and testifying on behalf of the Agency, so we

22 have run through all of the prefiled testimony that the

23 Agency had filed and have no one else indicating in

24 writing that they had wished to provide any testimony.

Keefe Reporting Company

201

1 Is there anyone -- there are only a few of you left --

2 who did wish to provide any sworn testimony at this

3 hearing? I'm seeing no indication that that is the case,

4 and that would bring us to the point at which we can

5 discuss some procedural issues regarding the second

6 hearing, and it would be best probably to go off the

7 record briefly to talk about those.

MS. ROCCAFORTE: Mr. Fox?

HEARING OFFICER FOX: Yes.

MS. ROCCAFORTE: I have attachment 8 to the

11 TSD.

HEARING OFFICER FOX: Thank you for jogging

13 my memory, but if you wouldn't mind distributing it, once

14 we're back on the record, I could easily just entertain a

15 specific motion. I apologize that I overlooked that

16 after asking, but I appreciate you recalling that.

(Discussion held off the record.)

HEARING OFFICER FOX: The participants went

19 off the record for a moment or two to address some

20 procedural issues relating to filing of various documents

21 that were both referred to in the course of the hearing

22 today and the prefiling of documents -- various documents

23 for the second hearing that is now on the calendar to

24 take place on Tuesday, December 9.

Keefe Reporting Company

202

There are specific spreadsheets that were the

2 subject of a number of questions in the course of the

3 hearing today, and the Agency has committed to make those

4 available to the Board by Tuesday, October 21, 2008, so

5 that the Board through its clerk's office may make

6 available an Excel version of those spreadsheets to the

7 participants who had sought that version of those

8 documents.

The -- There were other questions raised in the

10 course of hearing for which the Agency would like to wait

11 for the availability of the transcript to assure that

12 they are responding to the specific questions that were

13 raised. Because we expect the transcript by Friday,

14 October 24, the Agency has committed to file a written

15 response to those specific questions reflected in the

16 transcript of this hearing by Wednesday, November 5,

17 2008, and the participants who wish to prefile testimony

18 for the second hearing, that as I mentioned is now

19 scheduled to take place on December 9, will have a

20 deadline of Tuesday, November 25, 2008. Because that's

21 two weeks before the hearing and there is an intervening

22 holiday weekend, a lengthy one, I would ask -- although I

23 did not address this in going off the record -- that the

24 mailbox rule not apply so that it's available with a full

Keefe Reporting Company

203

1 two weeks for the Agency to review and prepare its

2 questions and there won't be any delay with the mail

3 delivery. Ms. Bassi?

MS. BASSI: I have a question about that.

5 Is -- Electronic delivery to the Agency, does that

6 satisfy the mailbox rule?

HEARING OFFICER FOX: The Board does need to

8 receive it so it can be made part of its record and

9 posted to COOL, but as a practical matter, electric

10 delivery to the Agency and to the Board could happen

11 simultaneously, I think, with the typing of just one more

12 e-mail address, Ms. Bassi, if that's helpful.

MS. BASSI: And that's acceptable to the

14 Agency?

MS. ROCCAFORTE: Yes.

MS. BASSI: Thank you.

HEARING OFFICER FOX: Any further questions?

18 Very good. Any questions about the dates that I had just

19 recited tediously? Any other procedural issues at all

20 that people wanted to raise? Let me read my canned

21 remarks that of course anyone may file written public

22 comments in this rulemaking with the clerk of the board.

23 Those may be made electronically through the clerk's

24 office online, with which I think you are all quite

Keefe Reporting Company

204

1 familiar, but our clerk's office has generally proven to

2 be very helpful in walking people through that procedure.

3 Those filings with the Board, whether paper or

4 electronic, do need to be served on the Hearing Officer

5 and the persons on the service list, and I would strongly

6 recommend that you consult with the clerk to determine

7 that your own service list is the most current one.

As I mentioned, copies of today's transcript, the

9 transcript of today's hearing, should be available to the

10 Board by Friday, October 24, and very soon after that the

11 transcript should be posted at the Board's Web site, from

12 which of course it can be read, copied and downloaded.

The second hearing will proceed as scheduled on

14 Tuesday, December 9, beginning at 11 a.m. in Chicago with

15 that November 25 deadline for prefiling testimony. My

16 e-mail address and direct telephone number are posted on

17 the Board's Web site so that you may always reach me with

18 any procedural questions at least. Any further

19 questions, then, before we adjourn?

MS. ROCCAFORTE: Attachment 8.

HEARING OFFICER FOX: You've had to remind

22 me twice and I'm very embarrassed. We can take a moment

23 to distribute those and entertain a quick motion.

MS. ROCCAFORTE: I'd like to move that

Keefe Reporting Company

205

1 attachment 8 to the technical support document be

2 admitted as an exhibit.

HEARING OFFICER FOX: And this of course was

4 filed with part of the Agency's original filing back in

5 May, if I'm not mistaken.

MS. ROCCAFORTE: Correct.

HEARING OFFICER FOX: Very good. I'll rush

8 ahead since I suspect that there would not be any

9 objection to the admission, marking that as Exhibit No. 4

10 and admitting that into the record of this proceeding,

11 and having neither seen nor heard any objection to

12 marking or admitting that, it is marked and admitted into

13 the record as Exhibit No. 4 in this proceeding. And

14 thank you again for reminding me. It was the end of a

15 long day, I'm afraid, and I'm just forgetful.

If there is no other business to take place

17 today, I want to thank certainly the Agency for

18 submitting its written answers to the questions. I think

19 that certainly helped things move expeditiously today. I

20 thank all of the other participants as well for their

21 questions and their participation, and with that, I'm

22 sure I speak for the board members and board staff in

23 again expressing our thanks, and we're adjourned.

(Hearing adjourned at 4:28 p.m.)

Keefe Reporting Company

206

1 STATE OF ILLINOIS )

) SS

2 COUNTY OF BOND

)

I, KAREN WAUGH, a Notary Public and Certified

5 Shorthand Reporter in and for the County of Bond, State

6 of Illinois, DO HEREBY CERTIFY that I was present at

7 Illinois Pollution Control Board, Springfield, Illinois,

8 on October 14, 2008, and did record the aforesaid

9 Hearing; that same was taken down in shorthand by me and

10 afterwards transcribed, and that the above and foregoing

11 is a true and correct transcript of said Hearing.

IN WITNESS WHEREOF I have hereunto set my hand

13 and affixed my Notarial Seal this 24th day of October,

14 2008.

__________________________

Notary Public--CSR

#084-003688

Keefe Reporting Company

207