1

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

2

3

IN THE MATTER OF:

4

AMENDMENTS TO

35

ILL.

ADM.

CODE

225:

CONTROL

OF

)

R09-l0

5

EMISSIONS FROM LARGE

)

(Rulemaking - Air)

COMBUSTION SOURCES

6

(MERCURY MONITORING)

7

8

Proceedings

held on December

17,

2008, at 9:05 a.m.,

at

9

the Illinois Pollution

Control Board, 1021 North Grand

Avenue

East, Springfield,

Illinois, before Timothy 3.

10

Fox, Hearing Officer.

11

12

13

14

15

16

17

Reported By:

Karen Waugh,

CSR, RPR

CSR

License No:

084—003688

18

KEEFE REPORTING COMPANY

19

11 North 44th Street

Belleville, IL

62226

20

(618)

277—0190

21

22

23

24

Keefe Reporting Company

---

1

APPEARANCES

2

3

Board Members present:

4

Chairman

G. Tanner Girard

Board Member Thomas E. Johnson

5

Board Member Shundar Lin

Board Member Andrea S. Moore

6

7

8

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

9

BY:

Mr. Charles E. Matoesian

BY: Ms. Dana Vetterhoffer

10

Assistant Counsel

Division of Legal Counsel

11

1021 North Grand Avenue East

Springfield, Illinois 62794-9276

12

On behalf of the Illinois EPA

13

BY:

Mr. John J. Kim

Managing

Attorney

14

Air Regulatory

Unit

1021 North

Grand

Avenue

East

15

Springfield, Illinois 62794—9276

On behalf of the Illinois

EPA

16

17

18

SCHIFF HARDIN LLP

BY:

Ms. Kathleen

C.

Bassi

19

BY:

Mr. Stephen J. Bonebrake

Attorneys at Law

20

6600 Sears Tower

Chicago, Illinois 60606

21

On behalf of Midwest Generation,

LLC

22

23

24

Keefe

Reporting Company

2

---

1

INDEX

2

WITNESS

PAGE NUMBER

3

IEPA

Panel

15

David

E. Bloomberg

4

Rory Davis

Kevin Mattison

5

James R. Ross

6

7

8

9

10

12

13

14

15

16

17

18

19

20

21

22

23

24

Keefe Reporting

Company

3

---

1

EXHIBITS

2

NUMBER

INTRODUCED

ENTERED

3

Hearing Exhibit No.

1

9

13

Hearing

Exhibit No. 2

9

13

4

Hearing

Exhibit No. 3

9

13

Hearing Exhibit No. 4

9

13

5

Hearing Exhibit No. 5

10

13

Hearing Exhibit No. 6

10

13

6

Hearing Exhibit No.

7

10

13

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Keefe Reporting Company

4

---

1

PROCEEDINGS

2

(December

17,

2008;

9:05

a.m.)

3

HEARING

OFFICER

FOX:

GODd

morning,

4

everyone,

and

thanks

for

your

cooperation

in

getting

5

started

on a

timely

basis

this morning.

The

court

6

reporter

indicates

that

she’s ready.

My

name is

Tim

Fox,

7

and I’m

the

hearing

officer

for

this rulemaking

8

proceeding

entitled

“In

the

Matter

of:

Amendments

to 35

9

Illinois

Administrative

Code

Part 225,

Control

of

10

Emissions

from Large

Combustion

Sources

(Mercury

11

Monitoring)

.“ Also

present

from

the

Board

today

on my

12

immediate

left is

Board Member

Andrea

Moore,

who is

the

13

lead

board member

for this

rulemaking;

to

my immediate

14

right,

the Board’s

acting

chairman,

Dr.

G. Tanner

Girard;

15

at

my left,

Board

Member

Thomas

E.

Johnson;

and

at my

far

16

right,

the

Board’s

new

member,

Dr.

Shundar

Lin,

who

we

17

make

an

extra

point

of welcoming

this

morning.

18

The

board

docket number

for

this rulemaking

is

19

No. R09—lO.

The

Illinois

Environmental

Protection

Agency

20

filed

this rulemaking

on

October

3,

2008,

and

in

an

order

21

dated

November

5 of 2008,

the

Board accepted

the

22

proposal

--

Agency’s

proposal

for hearing,

granted

the

23

Agency’s

request for

a waiver

of specified

copy

and

24

filing

requirements

and also

granted

the

Agency’s

motion

Keefe Reporting

Company

5

---

1

for expedited

review

of its

proposal.

In that

same

2

order,

the Board

directed

its

clerk

to cause

publication

3

of

the Agency’s

proposal

for

first

notice

without

4

commenting

on the

substantive

merits

of

that

proposal,

5

and

the first

notice

appeared

in

the

Illinois

Register

at

6

32

——

Volume

32,

pages

18507

to

18826, on

December

5 of

7

2008.

8

Today we

are

of course

holding

the first

hearing

9

in this

rulemaking,

and the

second

is

now scheduled

to

10

take

place on

Tuesday,

January

13,

in Chicago.

The

11

proceeding

is

governed

of course

by

the

Board’s

12

procedural

rules,

and

all information

that is relevant

13

and that

is

neither

repetitious

nor

privileged

will

be

14

admitted

into the

record.

Please

note

that any

questions

15

that are

posed

today

either

by the

board

members

or

by

16

the Board’s

staff

are intended

solely

to assist

in

17

developing

a

clear and

complete

record

for

the Board’s

18

decision

and

do

not reflect

any

prejudgment

of the

19

proposal.

20

For this

first

hearing,

the

Board on

December

2

21

of 2008

received

prefiled

testimony

from the

Illinois

22

Environmental

Protection

Agency

by

Kevin Mattison,

David

23

Bloomberg,

Rory

Davis and

Jim

Ross.

On

December

10

of

24

2008 the

Board also

received

amended

testimony

by

Keefe

Reporting

Company

6

---

1

Mr. Bloomberg

and

Mr.

Ross on this --

in

this proceeding.

2

No other

participant

has prefiled

testimony

for this

3

first hearing.

We will begin,

of course,

logically, with

4

the Agency’s

prefiled

testimony, and

we’ll hear first

5

from those

four witnesses

for the

IEPA and then we’ll

6

proceed

to

questions

on the part

of the other

7

participants, including

the

Board and Board’s

staff.

8

After those questions,

we

can turn to any

witness who

did

9

not prefile

testimony

but

who

would

like

to testify

10

today,

and

just

inside the

door on

the table with the

pen

11

is

a sheet at which

anyone who,

again, did not prefile

12

testimony but who

would like

to testify today

can

13

indicate that

intention.

14

For

the

court

reporter

transcribing

today’s

15

proceeding, of

course

please

speak as clearly

as you

can

16

and avoid

speaking at the same

time as

any other

17

participant

so that she

can have

the

easiest time

18

possible

in developing

a clear transcript

for us.

Do

you

19

have

any

questions

about procedures

at

all before

we

20

begin? Seeing

none, speaking briefly

about -— with

21

Mr.

Matoesian

about

the procedural

issue of proceeding

22

with his witnesses,

he had

indicated that

he may wish

to

23

start with

a brief introduction

or summary

and have

his

24

four

witnesses

sworn

in as a panel

to take

questions

on

Keefe

Reporting Company

7

---

1

that basis.

Mr.

Matoesian,

did I repeat

that

correctly?

2

MR.

MATOESIAN:

Yes.

That’s

fine.

3

HEARING OFFICER FOX:

Excellent.

Any

4

objection

at

all

to

proceeding on that

basis? Neither

5

seeing

or hearing

any, that sounds

like a good roadinap

6

for

us. Mr.

Matoesian, I’ll turn

it over

to you.

7

MR. MATOESIAN:

Thank you, Mr. Hearing

8

Officer.

My name’s Charles

Matoesian, M—A-T-O--E—S—I-A-N.

9

With

me here today is

Dana

Vetterhoffer

and John Kim,

10

representing the

Illinois Environmental

Protection

11

Agency.

We’re

here on the matter

of Proposed Amendments

12

to 35 Illinois

Administrative

Code Part 225:

Control

of

13

Emissions

from Large Combustion

Sources.

This rulemaking

14

results primarily

from the

vacatur

of

the federal CAIXIR

15

rule and

it involves changes

to

the

Illinois rule to

make

16

it

more workable and

compliant with

the absence

of Part

17

75

of the Federal

—— Code of Federal

Regulations.

18

Today

testifying will be

Kevin Mattison,

David

19

Bloomberg,

Rory Davis and Jim

Ross, who I can

-- who

20

would

like to be empaneled

as together, all

four sworn

21

in,

and I will be submitting

as exhibits

Exhibit

1, the

22

testimony of Kevin

Mattison, David

Bloomberg,

Rory Davis

23

and Jim Ross,

along with the Agency’s

first

errata sheet,

24

which was

filed on December

3, 2008,

and

the second

Keefe Reporting

Company

8

---

exhibit

will

be the amended

testimony

of David

Bloomberg

and

Jim

Ross filed on December

10,

2008,

which

we’ll ——

we

can bring up

at submittal,

and that’s

all I have

to

say,

so at

this point we can

proceed with

the ——

MS. BASSI:

Mr. Fox?

HEARING

OFFICER

FOX:

Yes, Ms. Bassi,

please.

MS. BASSI: Will

those each

be separate

exhibits?

Sorry.

HEARING OFFICER

FOX:

No, you are

-- you

read my mind

very

clearly

and effectively.

Mr. Matoesian,

Ms.

Bassi made a very

good suggestion

that

I would

echo. Is it

possible,

are those

—— the

testimony, the prefiled

testimony

of the four

witnesses,

separate documents

that can

be introduced

with

separate

exhibit

numbers?

MR. MATOESIAN:

Okay.

HEARING

OFFICER FOX:

That

will

make

citations

to the record,

I think,

ultimately

a little

clearer

and simpler.

MR.

MATOESIAN:

testimony of

Kevin Mattison

David

Bloomberg,

Exhibit 2;

Exhibit

3; testimony of

Jim

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

I suppose we

can do

as Exhibit 1;

testimony

of

testimony

of Rory Davis,

Ross,

Exhibit 4; the

errata

Keefe Reporting

Company

9

---

1

sheet can

be

Exhibit

5;

and then

I

suppose

the

amended

2

testimony

of David

Bloomberg

be

Exhibit

6;

and

the

3

amended testimony

of

Jim Ross

can

be

Exhibit

7,

if that’s

4

acceptable.

We’re

separating

them right

now.

5

HEARING

OFFICER

FOX:

Excellent.

It looks

6

like

you’ve

got

copies

to supply

to

the --

7

MR.

MATOESIAN:

Yes, yes.

8

HEARING

OFFICER

FOX:

We

can hold

just

a

9

moment

while those

get sorted

and

distributed.

10

(Off

the

record.)

11

HEARING

OFFICER

FOX:

Mr.

Matoesian

on

12

behalf

of the

Agency has

offered

the

following

13

exhibits

—— the

following

documents

as

exhibits

in

this

14

proceeding:

As

Exhibit

No.

1, the prefiled

testimony

of

15

Mr. Kevin

Mattison;

as Exhibit

No.

2, the prefiled

16

testimony

of

David

Bloomberg;

as

Exhibit

No.

3, the

17

prefiled

testimony

of Rory

Davis;

as

Exhibit

No.

4, the

18

prefiled

testimony

of

Jim Ross;

as

Exhibit

No.

5, the

19

Agency’s

first

errata

sheet

that was

filed

recently

with

20

the

Board;

and

as

Exhibit

No. 6, the

amended

testimony

of

21

David

Bloomberg;

and as

Exhibit No.

7,

the amended

22

testimony

of Jim

Ross,

those amended

testimonies

being

23

filed on

December

10

of this year.

The Agency

I know

has

24

supplied

copies

of

I

believe

proposed

Exhibits

No. 1,

3,

Keefe

Reporting

Company

10

---

1

6 and 7, and they’re

now obtaining

copies of Nos. 2,

4

2

and 5. Having heard

Mr. Matoesian move

the admission

of

3

those seven

documents as those seven

respective

exhibits

4

in this

proceeding, is there

any objection to

the motion

5

and

to granting -- to

granting that motion and

to

6

admitting those into the

record?

7

MR. BONEBRAKE:

Mr. Fox, if I may

first

ask

8

a question in that regard

of the Agency?

9

HEARING OFFICER

FOX:

Yes, Mr.

Bonebrake.

10

MR. BONEBRAKE:

With

respect

to

the

amended

11

testimony,

could IEPA explain why

it was necessary

to

12

submit amended

testimony after the

initial submission

of

13

the testimony

of Mr. Ross and Bloomberg?

14

MR. MATOESIAN:

Would

you like

to --

15

MR. ROSS:

I can.

Do I need sworn

in?

16

HEARING OFFICER FOX:

Why

don’t we

at this

17

point

go ahead and swear all four

of the witnesses

in,

as

18

we’ll have

to do that ultimately anyway.

19

(Witnesses

sworn.)

20

MR.

ROSS:

Good morning.

In regards to

your

21

question, I spoke with

Rey Forte of USEPA

on Wednesday,

22

December 10, 2008,

so a

week

earlier from

today, and

Rey

23

Forte’s name is

spelled R—E—Y,

F—O—R—T--E.

Rey Forte

is

24

the chief of the

emissions monitoring branch

of the

Clean

Keefe Reporting Company

11

---

1

Air Markets

Division

at USEPA

headquarters.

Rey

stated

2

that

he

was recently

informed

by

their

office

of

general

3

counsel that

there would

be legal

constraints

regarding

4

USEPA accepting

mercury

monitoring

data

from

sources

and

5

then

performing

the

necessary

quality

assurance

and

6

quality

control

on the

data.

He

stated that

they would

7

not

be able

to

provide

this

support

to the

states

as they

8

had originalli

hoped

and informed

us

that

they

would

be

9

able

to.

10

Rey further

stated

that

this

was the

only area

11

that

they would

not be

able to

offer

support.

He

stated

12

that

regarding

the

providing

of

the NIST—traceable

13

standards

that

USEPA

was

about

a

month

or so behind

14

schedule

and

hoped

that they

would be

able

to

provide

15

these

standards

in

February

2009.

He

further

stated

that

16

USEPA

could

provide

assistance

and

support

on

all other

17

aspects

of

the

rule that

they had

planned

under

CAMR,

18

including

review

of monitoring

plans,

review

of

19

alternative

monitoring

approaches,

review

of

20

certifications,

review

of

requests

for

extensions

and

21

other monitoring

issues.

This is

being

done

in

order

to

22

have a

level of

national

consistency

in the

mercury

23

monitoring

requirements.

24

And

as a

result

of my

conversation

with

Rey

Keefe

Reporting

Company

12

---

1

Forte, David Bloomberg

and I subsequently revised

our

2

testimony on that same

day, and we now envision

that

3

instead of submitting

the raw monitoring

data to USEPA,

4

companies will

submit to Illinois

EPA a summary sheet

of

5

mercury

monitoring data along with

a certification

of

6

truth

and accuracy of that

data, and we will work with

7

companies over

the coming

days on what these

submittals

8

need

to contain, and in essence we’ll

call this the

9

simplified

approach, and we believe

that some level

of

10

revision

to the rule may be necessary,

although our

11

mercury rule currently

allows for

an alternative approach

12

as specified

by

the

Illinois EPA. That’s

what the rule

13

currently reads.

14

MR. BONEBR7MKE:

Thank you, Mr. Ross,

for

15

that

clarification, and I would

anticipate we’ll have

a

16

number of follow—up

questions with

respect to the

17

statement Mr. Ross

just made, but with

that explanation,

18

we have no explanation

——

excuse me —— no

objection

to

19

the admission of the exhibits.

20

HEARING OFFICER

FOX:

Very

good.

Thank

you,

21

Mr. Bonebrake. Anyone

else with any objection

to the

22

admission of those seven exhibits?

Hearing none,

they

23

will

be admitted into the

record as Exhibits No.

1

24

through

7

according

to the numbering that

I had placed

Keefe Reporting

Company

13

---

1

into the record a short

time ago. And with

that,

2

Mr. Matoesian, your witnesses

are sworn in.

We can

3

certainly

return to you at this point.

4

MR. MATOESIAN:

Okay.

At this point we’re

5

ready to begin any questioning

that anyone would have

for

6

witnesses.

7

HEARING

OFFICER FOX:

Very

good.

If anyone

8

has any questions, the

first time you ask

to be

9

recognized, please indicate

your name and any

10

organization or company

you may be affiliated with

for

11

the benefit of the court

reporter, but the witnesses

are

12

sworn in and will intend

to take questions as

a

panel,

13

and we’re ready to go to them

at any time.

14

MR. BONEBRAKE:

My name is Steve

Bonebrake.

15

I’m with

the law firm of Schiff Hardin

in Chicago. I

16

represent Midwest

Generation and Dynegy Midwest

17

Generation,

and

with

me is Ms. Kathleen Bassi

with

Schiff

18

Hardin

as

well. Both Midwest

Generation and

-- Midwest

19

Generation has

opted in to the MPS and Dynegy

-- excuse

20

me. Midwest Generation

has opted in to the CPS

and

21

Dynegy Midwest Generation

has opted in to the

MPS. We

22

have a number of questions

for

the Agency today with

23

respect to the proposed

rule, then questions with

respect

24

to both the language

of the rule, the

testimony

and the

Keefe

Reporting Company

14

---

1

TSD.

We

also

have

a

number

of

concerns

with

respect

to

2

the

proposed

rule

as

written.

The

extent

of those

3

concerns

will

depend

at

least

in

part

on

the information

4

obtained

from

the

ISPA

during

the

course

of

this hearing.

5

As I

mentioned,

we

have

a

number

of

questions

6

with

respect

to rule

language

and

testimony

and

the

TSD,

7

and

I thought

what

would

make

most

sense

probably

is

just

8

to

start

with

the

earlier

sections

of the

rule

and

then

9

move

forward,

if

that’s

satisfactory

to

everyone

in

terms

10

of

our

questions,

and

we’ll

try

to

weave

in

questions

11

pertaining

to the

TSD

and

testimony as they

might

arise

12

in

connection

with

those

various

divisions.

But

as an

13

initial

matter,

I

just

had a

couple

of kind

of

threshold

14

questions,

and I

guess

I

would

direct

them

to

Mr.

Ross.

15

Mr.

Ross,

I

think

your

testimony

touches

on

the

16

purpose

and the

reason

for

the proposed

revisions

that

17

are

in

question

at

this

hearing

today.

Could

you

provide

18

just

a

brief

summary,

Mr.

Ross,

of

the

reason

why

the

19

rule

as

previously

adopted

is

proposed

for

revision

20

today?

21

MR.

ROSS:

Sure.

The

federal

Clean

Air

22

Mercury

Rule,

commonly

referred

to as

CAMR,

was

vacated

23

in

February

of

this

year,

and as

a result

of that

24

vacatur,

the

mercury

monitoring

requirements

that

were

Keefe

Reporting

Company

15

---

1

associated

with

CAMR were also

vacated.

Our previous

2

version

of

the Illinois mercury

rule

incorporated these

3

mercury

monitoring requirements,

primarily

by

reference,

4

so

as a result of

the

vacatur,

we found ourself

in a

5

position where

due to the fact

that we had

incorporated

6

these monitoring

requirements,

there was

some

uncertainty

7

as

to

their

ability

to be used in

our rule, and

hence,

to

8

remove

this uncertainty

and to ensure

sources

that we

had

9

a

valid

approach

to determining

compliance

with the

10

Illinois

mercury

rule, we made

a decision

that it was

11

appropriate

to

revise

our

rule.

12

MR.

BONEBRAKE:

Do you know,

Mr. Ross,

is --

13

the decision

of

the

D.C. Circuit Court

of

Appeals

that

14

vacated

CAMR, is there

a petition

for review of

that

15

decision pending

before the

United States Supreme

Court?

16

MR. ROSS:

There

is.

17

MR. BONEBRAKE:

What

are

the

Agency’s

plans

18

with

respect

to this rule

if the

Supreme

Court were

to

19

accept

that petition

for review and reverse

the

decision

20

of the D.C. Circuit

Court of Appeals?

21

MR.

ROSS:

I believe

we

would

maintain

our

22

rule as it’s

currently being

revised.

We may need

to

23

make some

further changes

in order

to have a plan

that

24

the

USEPA would find

acceptable,

because we’d find

Keefe

Reporting

Company

16

---

1

ourself

once again

in

a position

where

we have

to submit

2

a

an acceptable

mercury

monitoring

plan

to USEPA,

3

something

that

was

eliminated

with

the vacatur

of CAI4R,

4

SO I

believe

we’d

evaluate

at

that

time

if

-—

any

5

additional

revisions

that would

be

needed

to

the rule.

6

MR. BONEBRAKE:

Setting

aside

the question

7

of a potential

reversal

by

the

United States

Supreme

8

Court,

does TEPA

envision

future

mercury

emission

9

regulations

by

USEPA?

10

MR.

ROSS:

We do.

11

MR.

BONEBRAKE:

And

does

IEPA envision

that

12

there

will

be

monitoring

requirements

associated

with

13

such

mercury

regulations?

14

MR. ROSS:

We

do.

15

MR.

BONEBRAKE:

And

does

IEPA

anticipate

16

that there

could

be potential

conflicts

between

the

17

proposed

monitoring

rules

here

and what

the USEPA

might

18

adopt

in connection

with

such

future

mercury

regulations?

19

MR.

ROSS:

There

will

be

differences

between

20

our

rule

as

we’re proposing

it now

potentially

and

what

21

the USEPA

will promulgate,

but

our

rule

currently

allows

22

for companies

to

submit an

alternative

mercury

monitoring

23

plan,

something

that would

be

potentially

consistent

with

24

what

USEPA

will

come

out in

the future,

and

our intent

Keefe

Reporting

Company

17

---

1

would

be

to

allow that,

to

allow

the acceptance

of any

2

plan that

mimics

a

future USEPA

regulation,

so

we

3

anticipated

that

and

our

rule

addresses

that

prospect.

4

MR.

BONEBRAKE:

You

mentioned

that the

rule

5

allows

an alternative

submission.

You may

not have

used

6

those

exact

words,

but that

was my

understanding

of

what

7

you

had to say,

and I saw

some similar

references

in

the

8

testimony.

Could

you point

us

to

the

rule provision

that

9

so

allows,

Mr.

Ross?

I was looking

for

that and

I wasn’t

10

sure

what was

being

referred

to.

11

MR.

ROSS:

If

you’d give

me

a

moment.

12

MR.

BONEBRAKE:

Sure.

13

MR.

ROSS:

If it takes

longer than

a

minute,

14

I would

suggest

we --

15

MR.

BONEBRAKE:

That’s

fine.

16

MR.

ROSS:

--

get

back to

you.

17

MR.

BONEBRAKE:

We

can

get

back

to that

if

18

some time

is

needed

to find

that statute.

Just

a related

19

question

for

you,

Mr. Ross.

Is it

also correct

that

the

20

D.C.

Circuit’s

decision

with respect

to

CAIR has

had

some

21

implications

for

the

proposed

rule revisions?

22

MR.

ROSS:

Yes,

that’s correct.

23

MR.

BONEBRAKE:

Could

you explain

that

24

implication

to

us,

please?

Keefe Reporting

Company

18

---

1

MR.

ROSS:

Well,

in regards

to

the MPS,

some

2

degree

to CPS,

there

are

trading

restrictions

on S02

and

3

NOx

allowances

and requirements

for retirement

or

4

surrender

of

such allowances,

and

the

rule currently

5

references

the —— these

allowances

as

related

to CAIR,

6

and since

CAIR

is

also vacated,

much

like CAMR,

we

found

7

it necessary

to

make revisions

to the

rule

in

that

regard

8

to remove

specific

references

to CAIR

and

instead

to

9

reference

general

trading

programs

or

any

trading

10

programs

related

to

NOx and

S02 allowances.

11

MR.

BONEBRAKE:

And are

you referring

to the

12

specific

revisions

of

both

the CBS

and the

MPS?

13

MR.

ROSS:

Yes.

14

MR.

BONEBRAKE:

And

was it the

intent

of

15

those

revisions

to essentially

replace

the

references

to

16

CAIR

allowances,

Mr.

Ross?

17

MR.

ROSS:

It was

the intent

of

those

18

revisions

to maintain

the

original

intent of

the MPS

and

19

CBS that

any S02

and

NOx

allowances

as agreed

to by

the

20

parties

would

be

surrendered

or

retired

in

accordance

21

with

the agreements

we reached

with

the

individual

22

companies,

not to

go beyond

any

of the

agreements

that

23

were

reached

but

to simply

maintain

the

level

of

24

retirements

and

surrenders

of NOx

and S02

allowances

that

Keefe

Reporting

Company

19

---

1

were

agreed to, so certainly not to go beyond what

was

2

agreed to.

3

MR. BONEBRAKE:

And maybe we

can make the

4

questions here a little more concrete,

if we could

turn

5

to Section 233. Give me

just a minute here to find

the

6

subsection. 233(f)

(4).

7

MR. ROSS:

Okay.

8

MR. BONEBRAKE:

And

that subsection

9

addresses

NOx and S02

allowances;

is that correct,

10

Mr. Ross?

11

MR. ROSS:

That’s

correct.

12

MR. BONEBRAKE:

And

as originally adopted,

13

that provision had specific reference

to CAIR S02 and

NOx

14

allowances; is that right?

15

MR. ROSS:

It did.

16

MR. BONEBRAKE: And one of the

additions

to

17

the rule as proposed is to delete the references

to CAIR

18

S02 and NOx allowances and to replace that reference

with

19

the phrase “Any future federal NOx or S02 emissions

20

trading programs that include Illinois sources”; is

that

21

correct?

22

MR. ROSS:

That’s correct.

23

MR. BONEBRAKE:

The reference

to

any

future

24

federal NOx or S02 emissions trading, Mr. Ross,

if I

Keefe Reporting Company

20

---

1

understood

your

testimony

correctly,

was it

the intent

to

2

limit

that

to a

CAIR

replacement

S02 and NOx

program?

3

MR.

ROSS:

I would

say

either

CAIR

if it’s

4

not

vacated

or

a

CAIR

replacement

type

rule.

5

MR. BONEBRAKE:

Is there

-- There

have

been

6

some concerns

that

the phrase

“any

future”

could

7

potentially

cover

trading

programs

that

no one

here

today

8

might

even envision

and

couldn’t

have

been envisioned

by

9

the

parties.

Wouldn’t

you

agree, Mr.

Ross?

10

MR. ROSS:

I would

agree.

11

MR.

BONEBRAKE:

So

if

-- So the

language

in

12

substitution

for

the —— any

future

federal

along the

13

lines

of CAIR

or

replacement

CAIR,

would

that

be

14

satisfactory

at

least conceptually

to

the

Agency,

15

Mr. Ross?

16

MR. ROSS:

My initial

take

would

be yes,

we

17

could

go back

and

review

that

and

propose

some

18

alternative

language.

19

MR.

BONEBRAKE:

And

would the

Agency

be

20

willing

to work

with

Dynegy

Midwest

Generation

in

21

connection

with

such

language?

22

MR.

ROSS:

Yes.

23

MR.

BONEBRAKE:

And with

Midwest

Generation

24

in

connection

with

a similar

provision

in

the

CPS?

Keefe

Reporting

Company

21

---

1

MR.

ROSS:

Yes.

2

MR. BONEBRAKE:

With

respect

to CAIR,

is it

3

correct that

the mandate

has not yet issued

from

the D.C.

4

Circuit

Court

of

Appeals?

5

MR. ROSS: That’s

correct.

6

MR. BONEBRAKE:

And is

there

a petition

for

7

rehearing

that is pending

with that

court?

8

MR. ROSS:

Yes.

9

MR.

BONEBRAKE:

Does

that mean,

Mr. Ross,

10

that it’s possible

that the

-— a

mandate

would not

issue

11

by that court

that would invalidate

CAIR?

12

MR. ROSS:

That is possible.

13

MR. BONEBRAKE:

And if the

court were

to

14

decline

to

issue

the

mandate

based

upon its

current

15

decision,

based

upon

the

petitions

for rehearing,

does

16

IEPA envision that

there would

be further revisions

17

necessary to

the proposed rule?

18

MR. ROSS:

No,

I

don’t believe

so.

19

MR. BONEBRAKE:

Well,

for instance, if

the

20

D.C.

Circuit Court of

Appeals were

to determine

that

its

21

original decision

was in error and

that CAIR

therefore

22

need not be

vacated,

then I assume

that there

would

be no

23

need to strike

the references

to CAIR

allowances in

the

24

provisions

that we just

were

speaking

about? Would

that

Keefe Reporting

Company

22

---

1

be

correct,

Mr.

Ross?

2

MR.

ROSS:

That

would

be

correct,

but

if we

3

can

come

up with

some

alternative language

that

4

encompasses

what we

just

discussed,

then

I think

we

could

5

word

it

to

take care

of

both

cases,

if CAIR

is

vacated

or

6

if CAIR

is

reimplemented.

7

MR.

BONEBRAEE:

I’d

like

to turn

now

to

some

8

of

the

specific

proposed

language,

and

I

thought

I would

9

take these

kind

of

section

by

section,

so

I’m not

sure

10

who would

be

best

suited

to

respond

to my

various

11

questions

on the

panel.

I’ll

leave

that

to

the

witnesses

12

as

we

move

forward.

My

first

questions

pertain

to

13

Section

225.210;

that

would

be

subsection

(b)

(1)

.

To

14

Section (b) (1),

the

IEPA is

proposing

to

add

references

15

to

Section

——

new Section

2252.39;

is

that

correct?

16

MR. BLOOMBERG:

225.239,

yes.

17

MR.

BONEBRAKE:

And

225.239

is a

new

18

provision?

Is that

correct

as

well?

19

MR.

BLOOMBERG:

That’s

correct.

20

MR.

BONEBRAKE:

And

what is

the

scope

of

21

Section

225.239?

In

other

words,

what

does

that

22

provision

new provision

provide

for

or

allow

for?

23

MR. BLOOMBERG:

Periodic

testing

alternative

24

requirements.

Keefe

Reporting

Company

23

---

1

MR. BONEBRAKE:

And given

the language

in

2

proposed

(b)

(1), is it correct

that

under the proposed

3

revision,

electric generating

units

may comply with

4

either Sections 240

through

290 or

a

periodic

testing

5

approach under

Section 239?

6

MR. BLOOMBERG:

Yes.

7

MR.

BONEBRAKE:

And that

would

include

CPS

8

and

MPS

units?

Is that correct

as

well?

9

MR. BLOOMBERG:

There are

slightly different

10

requirements

both —— I mean,

for the

periodic testing

if

11

you’re

a CPS and MPS

compared to if you’re

complying

12

specifically

with

the limits. I also

want

to

note

that

13

there

is

a

sunset clause

for 239,

so when I answered

yes,

14

you could comply

with

either/or,

it’s up to the

point

of

15

that sunset clause.

16

MR. BONEBRAKE:

But

CPS and

MPS units

17

subject

to what’s in the

CPS and MPS

sections can opt

in

18

to

Section 239 in lieu

of complying with

240 through

290?

19

Is that correct,

Mr. Bloomberg?

20

MR.

BLOOMBERG:

Yes.

21

MR. BONEBRAKE:

Section

220,

subsection

(b),

22

subpart

(3)

of subsection

(b) now includes

a reference

to

23

Section

225.239, and

is it correct

that the IEPA

intends

24

in

(b) (3)

to require

that

——

EGUs

in their CAAPP

Keefe

Reporting

Company

24

---

1

applications

to

make

an election

between

compliance

with

2

225.239

on

the

one hand

or

Sections

240

through

290

on

3

the

other?

4

MR.

BLOOMBERG:

Yes.

5

MR.

BONEBRP&KE:

And

that

CAPP

permit

6

application

is

due

December

31,

2008?

Is

that correct

as

7

well?

8

MR.

BLOOMBERG:

Yes,

I

believe

that’s

9

correct.

10

MR.

BONEBRAKE:

This

rule

will

not be

11

completed

by

December

31,

2008?

Can we

all

agree

to

12

that?

13

MR. ROSS:

We

can.

14

MR. BLOOMBERG:

Yes.

15

MR.

BONEBRAKE:

Would

IEPA

be

willing

to

16

defer

the

date for

the

required

election

under

(b)

(3) in

17

light

of

the fact

that

the proposed

rulemaking

would

not

18

be

completed

by

December

31,

2008,

and

therefore

as

of

19

the

date

the EGOs

would

not

have

a

Section

239

in

the

20

rule

to

opt in

to?

21

MR. ROSS:

I believe

we

could

defer

that,

22

but I’d

also

think

that

it

wouldn’t

be unreasonable

for

23

sources

to

at least

identify

that

they

are considering

24

this

option.

That

is

a flexibility

mechanism,

so

without

Keefe

Reporting

Company

25

---

1

this option, sources

are bound to demonstrate compliance

2

using the continuous

emission monitors.

So

this

option

3

is being

put in there as a means

to

provide

flexibility

4

to sources, so I think in the interest

of working with

5

each other, I think we could

defer that they specifically

6

specify that they want

to use the alternative testing

7

approach, but I think it would

also be to their benefit

8

and would help us considerably

if they would at least

9

identify that they’re considering

using it.

10

MS. BASSI:

Mr. Ross, Mr. Bloomberg, I

have

11

a follow—up

to this answer

that you just gave. I’m

12

Kathleen Bassi, and Mr. Bonebrake

introduced me a minute

13

ago.

Isn’t ——

Does this section

mean, 210 ——

no.

This

14

is 210(b)

(3)?

15

MR. BONEBRAKE:

It’s 220 ——

16

MS. BASSI:

220(b) (3)?

Sorry.

Does

this

17

section mean that

the flexibility is you must

choose and

18

then you keep that, whatever

choice you make,

at the time

19

that the permit application

is submitted, or is it

truly

20

flexible and

a

source

can opt in to the 239 at

a

later

21

date?

22

MR. BLOOMBERG:

It is flexible, and all

this

23

section talks about

is the permit application, and

it

24

talks about the intended

approach. Within the

sections

Keefe Reporting Company

26

---

1

both

239

and

the

monitoring

sections,

there

is

2

flexibility

spelled

out

as

to how

you can

switch

from

one

3

to

the other.

4

MS. BASSI:

So

that

the

option

or

the

5

election

that’s

made

in

the

permit

application

is

not

6

binding

forever

to

the

sunset

of

239 as

to

what

the

7

source

may

do; is

that

correct?

8

MR.

BLOOMBERG:

That’s

correct.

9

MR. BONEBRFiKE:

Are

there

any

limitations

on

10

the

flexibility

to

move

between

240

through

290

on

the

11

one hand

and

239

on

the

other?

12

MR.

BLOOMBERG:

There

are

some limitations

13

that

are

spelled

out

in the

rule.

14

MR.

BONEBRAKE:

For

clarity,

Mr. Bloomberg,

15

could

you

refer

us

to

those

so

we

all

have

an

16

understanding

of

what

these

limitations

are?

17

MR. BLOOMBERG:

Probably

not

off

the

top

of

18

my head,

but

we

can

get

back

to

you

and

answer

that.

19

MS.

BASSI:

So

then

your advice

to

EGU5

who

20

may

choose

to do

239,

assuming

it’s

adopted

in this

form

21

by

the

Board,

is that

they

should

indicate

in this

22

December

31

permit

application

that

if 239

is adopted,

23

they may

wish

to

use

it;

is that

correct?

24

MR.

ROSS:

That’s

correct.

Keefe

Reporting

Company

27

---

1

MR. BONEBRAKE:

But

that statement of

2

intention

would not

be a

binding

determination that

they

3

would

be subject to 239;

is that also correct?

4

MR. ROSS:

That’s correct.

5

MS. BASSI:

Thank

you.

6

MR. BONEBRAKE:

Let’s

turn next to Section

7

225.230.

225.230.

In Section

——

subsection (a) (1),

8

there are

references to additional

sections of the

rule,

9

including

Section 225.239; is that

correct?

10

MR. BLOOMBERG:

Yes.

11

MR. BONEBRAKE:

And is

the intent of the

12

reference

to 239 to permit an EGO

to elect to subject

13

itself

to

the

emission standards of

Section 239 in lieu

14

of the emission

standards in Section 230?

15

MR. BLOOMBERG:

Yes, although the

emission

16

standards themselves, the levels

are the same. It’s

just

17

how those levels are measured.

18

MR. BONEBRAKE:

And

so I had a similar

19

observation,

so one of the follow—up

questions I had

was

20

what was

then the intent of permitting

an election

into

21

an

identical emission standard?

22

MR. BLOOMBERG:

The

standard as exists

in

23

the

current rule is measured over

a course of 12 months

24

of CEMS data, CEMS, continuous

emissions monitoring

Keefe

Reporting Company

28

---

1

systems.

The

new

239,

proposed

239,

that

same

standard

2

would

be

measured

by

periodic

emissions

testing,

or more

3

commonly known

as

stack

testing.

4

MR.

BONEBRAKE:

So

under

239

-—

excuse

me

--

5

under

Section

230,

a

12-month

rolling

period

of CEMS

data

6

can

be

utilized

in

connection

with

the

compliance

7

determination?

Is

that

correct,

Mr.

Bloomberg?

8

MR.

BLOOMBERG:

Yes.

9

MR.

BONEBRAKE:

And

the

corresponding

10

information

under

239

would

be

periodic

stack

testing?

11

Is

that

also

correct?

12

MR.

BLOOMBERG:

Yes.

13

MR.

BONEBRAKE:

We

talked

before

about

the

14

ability

to

elect

in

to

239

and

then

the

possibility

of

15

electing

back

out

of

239

in

to

240

through

290.

Can

you

16

explain

to

us how

if

a

source

--

how

if

an

EGU may

elect

17

in

and

out

of

Section

239

——

I

mean,

therefore

it

may

18

have

a

combination

of

both

CEMS

data

and

stack

test

19

data

--

how

the

Agency

will

determine

compliance

when

20

there’s

that

mix

of

that

data?

21

MR.

BLOOMBERG:

I

know

that

in

the

22

monitoring

section

—-

and

I

--

I’m

sorry,

off

the

top

of

23

my

head

I

can’t

point

to

the

exact

section

——

but

it

24

talks

about

how

to

switch

if

you’ve

been

doing

CEMS

and

Keefe

Reporting

Company

29

---

1

you

would

like to switch

to stack

testing. It

discusses

2

that

and vice versa.

The intent

is

to

allow

flexibility

3

in cases where

there may be

a problem with

the CEMS that

4

comes

up unexpectedly, but

on the

other hand, to not

have

5

an

ECU -- not that I’m

suggesting

any would do this,

but

6

just to make sure

——

look

at

11 months of data

and

say,

oops, we’re going

to

violate,

let’s not use

that,

let’s

8

switch to

stack testing

and ignore that.

That

11

months

9

of data

would still

be used -— 11

months being

an

10

example

-— up to that

point to

cover the previous

time

11

period so that they

wouldn’t

be able to, for

lack

of a

12

better term,

pull a fast one.

13

MR. BONEBRAKE:

Let’s

turn

to Section 239,

14

because

I think this is

an issue.

15

MR. BLOOMBERG:

Okay.

16

MR.

BONEBRAKE:

And I

guess I

would

direct

17

your

attention

to subsection

(a)

(4) of

Section

239 and

18

ask Mr. Bloomberg

if that’s

the provision

you

had

in

19

mind.

20

MR. BLOOMBERG:

Yes.

21

MR. BONEBBAKE:

And perhaps

we can

take a

22

kind

of a hypothetical

so you can

explain to

us

how

this

23

might work. Let’s

say in a

given

calendar

year there was

24

seven months

of

CEMS data

--

Keefe Reporting

Company

30

---

1

MR.

BLOOMBERG:

Okay.

2

MR.

BONEBRAKE:

-- and

then

an EGO

opted

in

3

to Section

239.

How

would

the compliance

determination

4

be

made in

that

scenario?

5

MR. BLOOMBERG:

That

seven

months

would

be

6

used

instead

of twelve

months,

and

that’s

what

the ——

7

that’s

what

239(a)

(4)

means

when

it

says

the

twelve

in

8

the

equations

will

be

replaced

by

a variable

equal

to

the

9

number

of

full

and partial

months,

so

the seven

would

be

10

that

variable

in that

case.

11

MR. BONEBRAKE:

So

the

CEMS

data would

be

12

relevant

for

compliance

only

during

that

seven—month

13

period

of

time?

14

MR.

BLOOMBERG:

Yes.

15

MR.

BONEBRAKE:

And

the stack

testing

would

16

be

relevant

for

compliance

for

the

remaining

five

months?

17

MR.

BLOOMBERG:

The

stack

testing

provisions

18

are

broken

down

into

quarters,

so

we

would

look

at

it

19

based

on, you

know,

one

test

-- the

five

months,

that

20

would

——

you

know,

there’d

have

to

be two

tests

covering

21

two

quarters

there.

22

MR.

BONEBRAKE:

Let

me ask

a

follow—up

23

question

about

that.

CBS

and

MPS

units

can

opt

in

to

24

Section

239

as well;

is

that

correct?

Keefe

Reporting

Company

31

---

1

MR. BLOOMBERG:

Parts

of

it, yes.

2

MR. BONEBRAKE:

And

the

stack testing

3

required

of such

units is

semiannual;

that is, two

times

4

per year

as

opposed to quarterly?

Is that also

correct?

5

MR. BLOOMBERG:

Yes.

6

MR. BONEBRAKE:

So

in that

circumstance

7

where

you had seven

months of CEMS

data in a

——

let’s say

8

a CPS unit and

then an opt in

to stack testing,

can you

9

explain, then,

how that would

work for

the remaining five

10

months?

11

MR. BLOOMBERG:

One moment,

please.

They

12

would need to stack

test at least

once covering

that

13

five—month

period

since

it’s semiannual,

potentially

14

twice

depending

on

exactly

how it falls and how

the

15

calendar

falls

and everything,

depending

on how that

-- I

16

guess

you

did

say

seven calendar

months,

so presuming

17

they were

the last five

months

of

the year, it would

be

18

one

test.

19

MR.

BONEBRAKE:

Okay.

And then

you were

20

saying potentially

—— what would

be the potential

where

21

you’d have

to test more than

once with

-— in a five-month

22

period

when there’s a semiannual

testing

requirement?

23

MR. BLOOMBERG:

If it’s

potentially

-- and

24

I’ll have

to

—— I’d

have

to

double—check exactly

the

Keefe

Reporting

Company

32

---

1

language

we

have

here,

but

potentially

what

I’m

thinking

2

of

is

if

it’s

split

between

calendar

years

so

that,

say,

3

the

first

two months

falls

in

one

calendar

year

and

the

4

next

three

months

falls

in

the

next

calendar

year.

I

5

don’t

recall

exactly

how

we

worded

the

semiannual

in

the

6

regulation.

7

MR.

BONEBRAKE:

Let

me

put

a

--

what

I

think

8

is

maybe

a

further

wrinkle

on

this

question.

If

we go

to

9

Section

294(1),

this

might

be

helpful.

At

least

on my

10

version

of

the

proposed

regulations,

it’s

page

80.

11

MR.

BLOOMBERG:

Yes.

12

MR.

BONEBRAKE:

And

subsection

(1)

is

the

13

provision

in

the

CPS

that

permits

CPS

units

to

opt

in

to

14

the

Section

239

stack

testing

provision;

is

that

correct,

15

Mr.

Bloomberg?

16

MR.

BLOOMBERG:

(1)

covers,

yes,

the

17

record-keeping,

reporting

and

testing.

18

MR.

BONEBRAKE:

And

the

--

if

the

CPS

unitS

19

were

to

opt

in

to

Section

239

under

Section

294(1),

the

20

only

subsections

of

239

that

would

be

——

could

be

21

applicable

under

Section

239

to

that

EGU

will

be

22

specified

in

(1);

is

that

correct?

That

is,

(c),

(d),

23

(e),

(f)

(1)

and

(2),

(h)

(2),

Ci)

(3)

and

(4)

and

(j)

(1)?

24

MR.

BLOOMBERG:

Yes.

Keefe

Reporting

Company

33

---

1

MR. BONEBRAKE:

There

is no reference

there

2

to 239(a),

Mr.

Bloomberg,

and we were

just referring

to

3

239(a)

(4)

in terms

of

the treatment

of monitoring

data

4

when

it was a

combination

of a CEMS and stack

testing,

so

5

my question

to

you

would

be, is there

a

provision

in the

6

proposed

rule that would

address the

combination

of CEMS

7

data

and stack

test data for a

CPS unit that

opts in

to

8

Section 239,

stack testing

requirements?

9

MR.

BLOOMBERG:

I’ll have

to

look

into

that.

10

The intent

of

(a) (4)

is really a

—— as

it

says in

the

11

first line,

for demonstrating

compliance,

and

CBS units

12

do

not actually

use their CEMS

or stack tests

to fully

13

demonstrate compliance,

but

rather it’s the other

14

portions of the

CBS, so

(a)

(4)

is meant specifically

for

15

those that

are not CBS and MPS.

16

MR. BONEBRAKE:

Let me

ask, then, a further

17

follow—up

question.

294(e) (1)

——

and it’s page

77 ——

18

permits

a

CBS

EGU

to opt early in

to

the

emission

19

standards

set

forth in

294(c);

that is, before

2015.

Is

20

that correct?

21

MR. BLOOMBERG:

Yes.

22

MR.

BONEBRAKE:

And so conceptually,

a

CBS

23

unit could

opt in

to the 90 percent

reduction

requirement

24

for

mercury

at

the time when the

stack testing

provision

Keefe Reporting

Company

34

---

1

would be

available;

is

that correct?

2

MR.

BLOOMBERG:

Yes.

3

MR.

BONEBRAKE:

And so

therefore,

there

is

a

4

potential

scenario,

Mr. Bloomberg,

isn’t there,

where

a

5

CPS unit

might

be subject

to

a 90

percent

requirement

if

6

it were

to

opt

in to

that 90 percent

requirement

and

it

7

also

may elect

to use

239 in

lieu

of

240 through

290?

Is

8

that correct?

9

MR.

BLOOMBERG:

Yes.

10

MR.

BONEBRAKE:

So

in that

scenario,

is

11

there

a provision

in

the rule

that

addresses

how

the

12

combination

of

CEMS

data and

stack test

data

would

be

13

reviewed

for

compliance?

14

MR. BLQOMBERG:

Of f

the

top of my

head,

I

15

don’t believe

so.

We will

review that.

16

MR.

BONEBRAKE:

And

I would ask

a similar

17

question

for the

MPS,

and

would

you

provide

a similar

18

answer,

Mr.

Bloomberg?

19

MR.

BLOOMBERG:

Since

they’re

practically

20

identical

in

those regards,

I

would agree

on that

also.

21

MS.

BASSI:

Mr.

Bloomberg,

I would

like

to

22

go back

to the

response

you

were giving

about

how

you

23

would view

compliance

or

how

you

would determine

24

compliance

when

you have

a

combination

of

stack

testing

Keefe

Reporting

Company

35

---

1

under 239

and CEMS data

or other

monitoring

data, and

you

2

said

—-- you were using

the example

of

seven

months

of

3

CEMS data and five

months

of

stack testing data,

so

4

there’s going

to be at least

some quarter

or some

5

half—year

period where

you are looking

at

the

combination

6

of the

two;

is that

correct?

7

MR.

BLQOMBERG:

I

—-

So

this

is a non-CPS

or

8

MPS unit,

correct?

9

MS. BASSI:

It could

be

either.

I mean,

it

10

could

be any unit.

It’s a more generic

question

than

11

that.

12

MR.

BLOOMBERG:

I

guess the way

you used the

13

word combination

has me a little

—— we wouldn’t

combine

14

them in terms

of averaging

them or anything

like that.

15

We would look

at both the

CEMS and the

stack test.

16

MS. BASSI:

Why would

you not average

them?

17

MR. BLOOMBERG:

Because

you can’t average

18

CEMS data with the

stack test.

19

MS.

BASSI:

Why not?

20

MR. BLOOMBERG:

Because the

CEMS data would

21

be taken

on a continuous

basis for

a

seven—month

period

22

and

stack testing is

more of

a

snapshot

of what

is going

23

on during that stack

test. There’s

—— There

is really

24

just no methodology

by which

you could

average

those

two

Keefe Reporting

Company

36

---

1

different

types

of

numbers.

2

[IS.

BASSI:

Mr.

Bloomberg,

I’m

certainly

not

3

a

mathematician,

as

you all

know.

However,

I suspect

4

there

would

be

some

formula

that

could

be

devised

where

5

the ——

where

stack

test

data

could

be considered

in

the

6

same

vein

as

CEMS

data.

Would

that

not

be

the

case?

7

MR.

ROSS:

Well,

CEMS

data

is

generally

more

8

reliable,

and

certainly

for

this

rule

it’s

our

preferred

9

method

of compliance.

We’re

offering

up

the stack

10

testing

as

an alternative

to

provide

flexibility

to

11

sources

due

to the

degree

of

uncertainty

for

the CEMS,

so

12

our

preferred

method

is CEMS,

and

as David

mentioned,

13

that

provides

data

on a continuous

basis,

so

certainly

14

it’s

preferred.

It

gives

you

a

greater

degree

of

15

certainty

that

the

source

is in

compliance

as opposed

to

16

stack

testing,

which,

as

he also

mentioned,

is

a

snapshot

17

in time

of

how a

control

device

is

operating

at

that

18

specific

time.

19

MS.

BASSI:

Is

——

Let

me

state

what

my

20

concern

is

here.

My

concern

is

that

when

you

have

a

21

denominator

less than

twelve

for

the CEMS

data

on

the

22

rolling

twelve—month

basis

that

it’s

—— that

if

there

is

23

a

violation

during

those

seven

months,

that

that

24

violation

then

——

or

exceedance

——

pardon

me

——

that

Keefe

Reporting Company

37

---

1

exceedance

carries

over

for

a

longer

period of

time,

2

whereas

with

the stack testing

data, the

Agency is

3

willing

to accept

the stack

test for a

period of three

4

months,

and

so it

is a question of

what happens to

the

5

rollingness,

I guess, of the original

CEMS

data.

You

6

have seven

months, and then

does it become six,

five,

7

four,

three, two, one as

you proceed

because your

8

twelve—month

rolling

period is getting

less?

9

MR.

ROSS: Well, I think

our desire

is to

10

use all the available

CEMS data

that the company

has

and

11

then to allow

stack testing

to fit into that

equation,

so

12

if

the

CEMS data goes down

during the eighth

month

and

13

they have

seven

months

of data, we want

to use that seven

14

months

of

data,

and then

until

they

get the CEMS back

up,

15

they

can

use

stack testing,

so

however

we can work

that

16

out in here, that

was our intent,

so

we

can work

with

17

companies to

adjust the rule

so

that

that

in fact plays

18

out in the

rule.

19

MS. BASSI:

So ——

20

MR. BLOOMBERG:

Just

to add to

what

Jim

21

said, it’s not our

intent to send

out, you know,

seven

22

violation

notices

saying seven

months and then

send one

23

the next month

saying six months

and

one

the next month

24

saying

five months. That’s

one

compliance

period, that

Keefe Reporting

Company

38

---

1

seven

months,

just

like

normally

twelve

months

is

a

2

compliance

period,

although

if

you

continue

to

use

CEMS,

3

that

twelve

months

continues

to

roll.

To

use

your

word,

4

the rollingness,

it

would

stop

at

that seven

months.

5

MS.

BASSI:

Okay.

6

MR.

ROSS:

And

absent

the

ability

to use

the

7

stack

testing

alternative,

if

the

CEMS

monitoring

went

8

down,

the company

would

be in

violation

from

that period

9

forward

until

they

got

the CEMS

monitor

back

up,

so we’ve

10

provided

a

means

where

the

company

can

continue

to

11

demonstrate

compliance

with

us if

their

monitor

goes

12

down,

so

it’s

a benefit

to

the

company

to

have this

in

13

here.

That’s

what

we’re

discussing.

We’re

just

14

discussing

——

I

just

want

to

make

this

clear

to

the

15

Board

——

how

we

can

make

this

work,

and we’re

willing

to

16

work with

companies

to

do that.

17

MS.

BASSI:

And

we appreciate

that.

The

18

companies

appreciate

that,

I’m sure.

We just

want

to

19

understand

how

it

works

and

what

potentials

we are

facing

20

out

there.

Is

it

possible

that

in a

given

order

a source

21

could

be

in violation

of

both

the

CEMS

data

and

emissions

22

testing?

23

MR.

ROSS:

It’s

not

our

intent.

24

MS.

BASSI:

Okay.

Keefe

Reporting Company

39

---

1

MR.

ROSS: But it’s

possible.

I mean, if

2

the

CEMS

data

shows that they’re

exceeding

the

3

requirement

and then they

do a subsequent

stack

test and

4

it also

shows that during

that quarter

they exceeded

5

their

requirement,

then potentially

you

have two

sets of

6

data showing noncompliance.

7

MS. BASSI:

And

just

to

clarify,

if I

8

understood

what

you

said correctly, Mr.

Bloomberg,

you

9

said

-- or maybe

it was Mr. Ross --

that

if a

CEMS

goes

10

down

in the

seventh

—- in the eighth

month,

in August,

11

then

the

rolling

—— then the

first seven months

of the

12

year are viewed

as a single

time block, is

that

correct,

13

and until

a

CEMS

comes

back up?

14

MR. BLOQMBERG:

Well,

that’s presuming

that

15

the

CEMS started in

January.

16

MS.

BASSI:

Right.

Well, assume

it did.

17

MR. BLOOMBERG:

Okay.

Then,

yes, that’s

our

18

intent.

19

MS. BASSI:

So then

from

January through

20

July,

the source would

be demonstrating

compliance

on

the

21

rolling 12-month

basis, and beginning

in August

it would

22

be a block of

January through July

and then

stack

23

testing, say,

for the rest

of the

year;

is that correct?

24

MR. BLOOMBERG:

They’d

have to stack

test

Keefe Reporting

Company

40

---

1

for

that

third

quarter

and

then

for

the

fourth

quarter.

2

MS.

BASSI:

Oh,

that

makes

sense.

Thank

3

you.

4

MR.

BONEBRKE:

I

wanted

to

move

on

with

5

some

questions

on

225.233,

which

is

the

multi—pollutant

6

standards.

And

by

the

way,

I’ve

been

using

the

term

——

7

acronym

MPS

on

the

record

today,

which

I’m

using

as

an

8

abbreviation

for

multi-pollutant

standard.

I’ve

also

9

been

using

the

acronym

CPS,

which

is

the

acronym

for

10

combined

pollutant

standard.

With

respect

to

225.233,

11

the

multi—pollutant

standard,

is

there

an

initial

12

compliance

certification

requirement

in

233?

13

MR.

ROSS:

Could

you

define

initial

14

compliance

certification?

15

MR.

BONEBRAKE:

Well,

the

first

—-

a

16

first

——

is

there

a

compliance

certification

requirement?

17

MR.

ROSS:

They

do

have

to

submit

compliance

18

certifications.

19

MR.

BONEBRAKE:

When

is

that

first

20

compliance

certification

due,

Mr.

Ross?

21

MR.

ROSS:

Off

the

top

of

my

head,

I

do

not

22

know.

I’m

almost

certain

it’s

stated

in

the

rule.

Do

23

you

know?

24

MR.

BONEBRAKE:

I

believe

it’s

May

1,

2010,

Keefe

Reporting

Company

41

---

1

but I’m not

providing

testimony.

Does

that

sound right

2

to you?

3

MR.

ROSS:

That sounds

accurate.

I

mean,

at

4

the

end of

the

period,

at

the end of

the

annual

period,

5

they

have

to

submit

a compliance

demonstration

for

the

6

previous

period.

I

do

know that,

so

that May

1 deadline

7

would

make sense.

8

MR.

BONEBRAKE:

And I

should

add

--

9

MR.

ROSS:

Oh,

here it

is.

It’s

in ——

10

MR.

BONEBRAKE:

Where

did

you find

it,

11

Mr. Ross?

12

MR.

ROSS:

It’s

in

(f) (5)

.

So

I think

it

13

says

before

March

1, 2010,

and continuing

each year

14

thereafter,

etc.,

etc.,

that they

have

to submit

a report

15

that

demonstrates

compliance..

16

MR.

BONEBRAKE:

Okay.

So

it’s

March 1

as

17

opposed

to May

1,

2010.

18

MR.

ROSS:

March 1,

2010,

that’s

correct.

19

MR. BONEBRAKE:

Is

it

correct

that

MPS units

20

that

are installing

fabric filters

or

S02

scrubbers

defer

21

the date

for sorbent

injection

under

the

MPS

to

22

December

31,

2009?

23

MR.

ROSS:

That’s correct.

24

MR. BONEBRAKE:

Would

it also

therefore,

Keefe

Reporting

Company

42

---

1

Mr.

Ross, make

sense

for such

units

to defer

the initial

2

compliance

certification

till

March

1 of 2011

in light

of

3

the fact

that there

would

be

sorbent

injection

for

only

4

one

day in 2009?

5

MR.

ROSS:

Well,

I

think

——

we discussed

6

this

with

some sources,

and

I

think

what we’re

looking

7

for

there

is just

a statement

that

the requirements

for

8

those

units that

you mentioned,

installing

a baghouse

by

9

such

date, that

the requirements

for mercury

control

are

10

deferred,

that

they would

simply

state

in this

initial

11

compliance

report

that

for

this first

period

they weren’t

12

required

to be in

compliance

with

the specific

13

requirements

to

reduce

mercury

control,

so

we

wouldn’t

be

14

expecting

a full

compliance

demonstration

from those

15

units.

16

MR.

BONEBRAKE:

I’d

like to

turn the

17

attention

of

the

IEPA witnesses

to subsection

(c) (6)

of

18

the

MPS.

It’s on

page

35.

The

page

number

may be a

19

little

bit

different,

so I will——

I’ll

omit

page

number

20

references

in the

future, but

it

would be

subsection

21

(c) (6)

of

225.233.

We earlier

were

looking

at

the

22

provision

of the

CPS that

permitted

CPS

units

to opt in

23

to Section

239,

and is

this the

provision

of the

MPS

that

24

would

permit

MPS units

to opt

in

to

elements

of

Keefe

Reporting

Company

43

---

1

Section —— new

Section 239 of the rule?

2

MR. BLOOMBERG: Yes.

It’s

the

equivalent

3

provision.

4

MR. BONEBRAKE:

And if an MPS unit opts

in

5

to Section 239 under

the subsection

(c)

(6), then it would

6

not

be

subject

to Sections 240 through 290,

but

it would

7

be subject to the subsections of 239 specified

in this

8

(c) (6);

is

that correct?

9

MR. BLOOMBERG:

Yes.

10

MR. BONEBRAKE:

And there is no time

limit

11

specified

in

(c) (6)?

Is that also correct,

12

Mr. Bloomberg?

13

MR. BLOOMBERG:

I’m sorry.

There’s no --

14

MR. BONEBRAKE:

No

time limit specified

in

15

the subsection

(c)

(6)?

16

MR. BLOOMBERG:

Time

limit for --

17

MR. BONEBRAKE:

To

opt in to Section 239.

18

MR. BLOOMBERG:

Not —- It’s

not in here,

but

19

the sunset provision, if that’s what you’re

referring

to,

20

is in 239.

21

MR. BONEBRAKE: And that sunset

date is

22

what,

Mr. Bloomberg?

23

MR. ROSS:

I think it’s June

30, 2012.

24

MR. BLOOMBERG:

Yes,

June 30, 2012.

Keefe Reporting

Company

44

---

1

MR.

ROSS:

So

my

take

would

be

if

you’re

2

suggesting

that

the

link

is

not

there

to

that

date,

then

3

I

guess

we

would

thank

you

for

pointing

that

out

and

we

4

would

revise

the

rule

so

that

the

link

is

there.

5

MR.

BONEBRAKE:

It

was

unclear

to

me

in

6

reading

the

rule

whether

you

intended

to

sunset

the

stack

7

testing

provision

for

all

units

or only

some.

8

MR.

BLOOMBERG:

All.

9

MR.

BONEBRAKE:

Thank

you.

Thank

you

for

10

the

clarification.

I’d

like

to

turn

next

to

subsection

11

Cd)

(1)

of

the

MPS,

and

I’m

just

going

to

use

the

12

introductory

language

in

Cd)

(1)

to

raise

some

questions

13

pertaining

to

Mr.

Bloomberg’s

testimony.

Subsection

14

(d)

Cl)

permits

an MPS

unit

to

opt

in

to

the

emission

15

standard

set

forth

in

(d)

(1)

(A)

and

(B)

prior

to

16

January

1,

2015;

is

that

correct?

17

MR.

BLOOMBERG:

Yes.

18

MR.

BONEBRAKE:

And

prior

to

such

opt-in,

19

the

MPS

EGU5

would

not

be

subject

to

those

emission

20

standards;

is

that

also

correct?

21

MR.

BLOOMBERG:

Yes.

22

MR.

BONEBRAKE:

Instead

they

would

be

23

subject

to

sorbent

injection

rate

requirements;

is

that

24

correct?

Keefe

Reporting

Company

45

---

1

MR.

BLOOMBERG:

Yes.

2

MR.

BONEBRAKE:

Mr. Bloomberg,

I

have

a

3

couple

questions

for

you pertaining

to your

amended

4

testimony,

which

is Exhibit

6,

and if

I could

refer

your

5

attention

to page

3

of your

amended

testimony.

And

let

6

me

first

thank

you

for putting

page

numbers

on

your

7

testimony.

This

is

very

helpful

in developing

my

8

questions.

9

MR. BLOOMBERG:

Anything

to

help

you

out.

10

MR. BONEBRAKE:

Appreciate

it.

11

MR. ROSS:

I

guess I

should

apologize.

12

MR.

BONEBRAKE:

Mr.

Bloomberg,

there’s

a

13

sentence

at

the

top of

page 3 that

starts with

the word

14

“however,”

and

that

sentence

partway

through

refers

to

a

15

need

for a

method

by which

the

source

and

the Illinois

16

EPA

can ensure

that mercury

controls

are

being

operating

17

in an optimum

manner

as required

by

the

rule and

18

consistent

with

the

expected

control

levels.

Do you

see

19

that,

Mr.

Bloomberg?

20

MR.

BLOOMBERG:

Not

off

the

top of my

head.

21

Hold

on a

second.

22

MS.

BASSI:

It’s

the second

full

sentence,

I

23

believe.

24

MR.

BLOOMBERO:

In the

--

Keefe Reporting

Company

46

---

1

MS.

BASSI:

At

the

top of

page

3.

2

MR.

BONEBRAKE:

Starts

with,

“However,

it

3

should

be noted.”

4

MR.

ROSS:

What’s

the

paragraph

start with?

5

MR. BONEBRAKE:

The

paragraph

starts with,

6

“One

such

addition

is that.”

7

MS.

BASSI:

I’m sorry.

We’re

looking

at

the

8

electronic

filing

version.

9

MR. BONEBRAKE:

So it

may be a

little

bit

10

off.

11

MS.

BASSI:

Despite

your

page numbers.

12

MR.

ROSS:

I

found it.

13

MR.

BLOOMBERG:

Okay.

Sorry

about that.

14

MR.

BONEBRAKE:

Okay.

Have

you found

that

15

sentence?

16

MR. BLOOMBERG:

Found

that

sentence.

17

MR. BONEBRAKE:

Okay.

In

that

sentence,

18

you

——

as

I

mentioned,

you

refer

to a

method

by

which

the

19

source

and

the

Illinois

EPA

can ensure

that

mercury

20

controls

are being

operating

in

an optimum

manner.

What

21

is the method,

Mr.

Bloomberg,

that

you

have in mind?

22

MR.

BLOOMBERG:

I’m going

to defer

to

Jim

23

Ross

to answer

that

question.

24

MR.

ROSS:

And

that’s

a

good

question.

I’ve

Keefe

Reporting

Company

47

---

1

been discussing

the issue of optimum manner with

2

companies over

the last few weeks

and internally, and

3

there’s some key points I want

to hit

on;

that first,

4

sources complying with

the mercury flexibility provisions

5

provided in the MPS

are required by the MPS to inject

6

halogenated activated

carbon in an optimum manner,

and

7

our consultant

and mercury control expert, Jim

Staudt,

8

testified

at length in the first rulemaking process

in

9

the hearing, in

his testimony and the technical

support

10

document

and

during

the hearings that Illinois units

11

should

be able to

achieve

around 90 percent control

12

efficiency, and his

determinations were based on his

13

review of each individual

boiler in Illinois and their

14

systems, and he also used performance

charts that plot

15

mercury control efficiency versus

sorbent injection

16

rates, and these charts also show

that sources should

be

17

able to get around 90 percent control

efficiency when

18

injecting

at the default sorbent injection rates

for

19

units firing

subbituminous coal, which is five

pounds

per

20

ACE’,

and the key,

we

believe, the key terms, key

words,

21

are

around 90 percent, and that’s been the

subject of

22

discussions with

companies and internally.

23

So

what

is around 90 percent? Well,

88 percent

24

is definitely around 90 percent.

85

percent

is more

Keefe Reporting Company

48

---

1

around

90 percent

than

80 percent

is,

but that

doesn’t

2

exclude

80

percent

from being

around

90

percent.

3

Anything

under 80

percent

could

raise some

concerns,

and

4

again,

it’s based

on our

expert

saying

that units

should

5

be able

to

achieve

90

percent,

but

it

could be

they

are

6

injecting

in an

optimum

manner

if

they

are only

able

to

7

achieve

80 percent.

So what’s

the

takeaway

there?

That

8

it’s

case by

case

and

a

determination

needs

to

be made.

9

And

so

what

will

the Agency

consider

and

what

10

should

companies

submit

in order

to

allow

us

to make

this

11

determination,

and the

main

answer

there is

we will

12

consider

all

information

submitted

by

the

companies

to

13

make their

case,

and

this

can include

but is

not

limited

14

to use

of an appropriate

sorbent,

and

the

approved

15

sorbent manufacturers

and

sorbents

that

we’ve reviewed

16

are listed

in

the

mercury

rule.

It also

could

include

17

appropriate

location

and

positioning

of

the injection

18

lances.

It

could

include

optimizing

sorbent

injection

19

spray

profiles

to

promote

better

mixing

of the

sorbent

20

and the carbon

so

that they’re

better

able

to

capture

the

21

mercury;

use of

multiple

injection

points;

use

of a

22

computational

fluid dynamics

modeling

to

identify

ways

to

23

improve

mixing;

and use

of mixing

devices

to improve

24

sorbent

contact

gas.

What are

some

other

considerations?

Keefe

Reporting

Company

49

---

1

We would include exorbitant

cost associated with

2

injecting in a certain manner,

damage to equipment that

3

could occur

as a result of companies injecting in

a

4

certain manner and safety concerns that the company

may

5

have.

6

So again, it’s a case—by—case

determination, and

7

these are just some guidelines

that

we want

to get on the

8

record that we would consider in making

our determination

9

of what constitutes optimum manner.

10

MR. BONEBRAKE:

Mr. Ross, I have

no

11

intention of going back into the record from

the prior

12

mercury rulemaking hearing. Mr. Staudt said whatever

13

Mr. Staudt said, and I would assume you’ve characterized

14

it accurately, but that record speaks for itself. With

15

respect

to your statements about optimum manner, I did

16

have some

specific follow—up

questions for you. Optimum

17

manner is referred

to in the MPS in subsection

(c)

(2);

is

18

that correct?

19

MR. ROSS:

That’s correct.

20

MR. BONEBRAKE:

And

on

(c)

(2),

the pertinent

21

part reads, “The owner or operator of the

EGO must inject

22

halogenated activated carbon in an optimum manner,

which,

23

except as provided in subsection

(c)

(4)

of this section,

24

is defined

as

all of the following.” Do

you see that,

Keefe

Reporting Company

50

---

1

Mr.

Ross?

2

MR.

ROSS:

I

•do.

3

MR.

BONEBRAKE:

So

the

rule

in

fact

defines

4

optimum

manner,

does

it

not?

5

MR.

ROSS:

It

does.

It’s

defined

as

all

of

6

the

following.

7

MR.

BONEBRAKE:

And

there

is

no

indication

8

in

any

of

those

following

subsections

of

a

requirement

to

9

achieve

90

percent,

80

percent

or

any

other

specified

10

level

of

emission

reduction;

is

that

also

correct,

11

Mr.

Ross?

12

MR.

ROSS:

That’s

correct.

However,

I

would

13

note

that

it

is

specified

the

use

of an

injection

system

14

designed

for

effective

absorption

of

mercury,

so

that

15

leads

you

to

what

constitutes

effective

absorption

of

16

mercury,

and

that

leads

us

back

to

the

testimony

and

the

17

information

provided

by

our

mercury

control

expert

that

18

systems

and

units

in

Illinois

should

be

able

to

achieve

19

around

90

percent,

so

that’s

the

link,

so

to

say,

to

the

20

around

90

percent.

21

MR.

BONEBRAKE:

The

effective

absorption

of

22

mercury

and

a mercury

removal

efficiency

could

be

two

23

very

different

methods,

can

they

not,

Mr.

Ross?

24

MR.

ROSS:

I

don’t

believe

so

in

the

context

Keefe

Reporting

Company

51

---

1

of our discussion

for Illinois

units.

Our mercury

2

control

expert has

in essence

looked

at each

and every

3

boiler

or unit

in

Illinois,

and he’s

made

a