BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
DYNEGY
MIDWEST GENERATION, INC.,
)
)
Petitioner,
)
)
v.
)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
PCB 09-048
(Variance-Air)
NOTICE OF FILING
TO:
John Therriault, Assistant Clerk
Illinois Pollution Control Board
James
R.
Thompson Center
100 West Randolph, Suite 11-500
Chicago, Illinois 60601
Kathleen C. Bassi
Stephen
J. Bonebrake
Schiff Hardin,
LLP
6600 Sears
Tower
233
South Wacker Drive
Chicago, IL
60606
PLEASE
TAKE NOTICE that
I
have today filed with the Office of the Clerk of the
Pollution Control Board
an APPEARANCE and RECOMMENDATION of the illinois
Environmental Protection Agency, copies
of which are herewith served upon you.
Respectfully submitted,
ENVIRONMENTAL
PROTECTION AGENCY,
Managing Attorney
Illinois Envirorunental Protection Agency
Division
of Legal Counsel
1021 N. Grand Avenue East
P.O. Box 19276
Springfield, Illinois 62794-9276
(217) 782-5544
(217) 782-9143 (TDD)
Electronic Filing - Received, Clerk's Office, April 1, 2009
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
DYNEGY
MIDWEST GENERATION, INC.,
)
)
Petitioner,
)
)
~
)
PCB 09-048
(Variance-Air)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
APPEARANCE
The undersigned hereby enters his Appearance on behalf of the lllinois Environmental
Protection Agency.
DATED: April 1,
2009
1021
North Grand Avenue East
P.O. Box 19276
Springfield, Illinois 62794-9276
(217) 782-5544
(217) 782-9143 (TDD)
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:;/~d~
Kent E. Mohr Jr.
-\..I ..
Assistant Counsel
Division
of Legal Counsel
Electronic Filing - Received, Clerk's Office, April 1, 2009
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
DYNEGY
MIDWEST GENERATION, INC.,
)
)
Petitioner,
)
)
v.
)
)
PCB 09-048
(Variance-Air)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
RECOMMENDATION
NOW COMES the lllinois Environmental Protection Agency ("Illinois EPA" or
"Agency") by its attorneys, John J. Kim and Kent E. Mohr Jr., in response to the Petition for
Variance
ofDYNEGY MIDWEST GENERATION, INC. ("Dynegy" or "Petitioner"), from
certain requirements
of the Multi-Pollutant Standard ("MPS"), 35
Ill.
Adm. Code 225.233.
Pursuant to
Section 37(a) of the Illinois Environmental Protection Act ("Act") [415 !LCS 5/37(a)
(2008)] and 35
TIl.
Adm. Code 104.216, the Illinois EPA does not object to the Illinois Pollution
Control Board
("Board") granting the variance as presented and requested by Petitioner. In
support of its recommendation, the Illinois EPA states as follows.
I.
INTRODUCTION
1.
On January 9, 2009, Petitioner filed a Petition for Variance from a provision of
the MPS, 35
Ill.
Adm. Code 225.233, for a period beginning July 1, 2009, through March 31,
2010.
2.
On February 5,2009, the Board issued an Order identifying several infonnational
deficiencies in the Petition for Variance and directed Petitioner to file an amended petition to
provide the additional requested infonnation. Specifically, the Board found that Petitioner did
Electronic Filing - Received, Clerk's Office, April 1, 2009
not provide all of the information required by 35m. Adm. Code 104.204 and requested
Petitioner to provide the following: (1) More specific information regarding the location
of air
quality monitors relative to Petitioner's power stations; (2) Quantification
of the amount and type
of coal burned at Baldwin Power Station Unit 3, Havana Power Station Unit 6 and Havana
Power Station Unit 2, and whether this will change over the variance period; (3) Length of2010
outage and amount of mercury emissions in excess of 126.83 pounds at its Baldwin Power
Station Unit 3 ifit operated past March 6, 2010; and (4) Amount of money saved by not losing
revenue through an outage to install lances at Baldwin
Power Station Unit 3. Further, the Board
found that the
120-day statutory period for it to decide this matter would recommence upon the
filing
of the amended petition.
3.
On February 18, 2009, in response to the Board's Order, Petitioner filed an
Amended Petition for Variance
("Amended Petition"). Simultaneously, Petitioner filed a Motion
for Reconsideration
("Motion") requesting the Board to reconsider its Order.
In
its Amended
Petition, Petitioner incorporated by reference its Petition for Variance and responded to the
Board's requests.
In
its Motion, Petitioner argued that the informational deficiencies cited by the
Board did not establish an inadequate Petition for Variance and requested the Board to also
reconsider its determination that the
120-day statutory period for decision must recommence. On
March 5, 2009, the Board denied Petitioner's Motion, accepted the Amended Petition, and noted
that its decision deadline is June 18,
2009.
4.
Petitioner seeks a variance, beginning July 1, 2009, from the MPS requirement in
Sections 225.233(c)(1)(A) and 225.233(c)(2) to inject halogenated activated carbon at a
minimum injection rate
of 5.0 pounds per million actual cubic feet ("lbs/macf') exhaust gas
flow, and from related monitoring, recordkeeping, and reporting provisions at Section
2
Electronic Filing - Received, Clerk's Office, April 1, 2009
225.210(b) and (d) and 225.233(c)(5) as applied to Unit 3 at its Baldwin Energy Complex
("Baldwin"). As set forth
infra,
Petitioner proposes that instead of injecting sorbent beginning
July I,
2009, at Baldwin Unit 3, it will inject sorbent at Havana Power Station Unit 6 and
Hennepin Power
Station Unit 2 six months prior to the MPS deadline applicable to these units.
5.
Petitioner owns and operates five coal-fired power plants located in downstate
Illinois. These plants include Baldwin located in Randolph County, the Havana Power
Station
("Havana") located in Mason County, the Hennepin Power Station ("Hennepin") located in
Putnam County, the Vermilion
Power Station located in Vermilion County, and the Wood River
Power Station located in Madison County. Currently, Baldwin Township in Randolph County,
the location
of Baldwin, is designated nonattainment for PM2.5. Randolph County is designated
attainment for all other criteria pollutants. Mason, Putnam, and Vermilion Counties are
designated unclassifiable/attainment for all criteria pollutants. Madison County is designated
nonattainment for 8-hour ozone and unclassifiable/attainment for all other criteria pollutants.
Madison and Vermilion Counties are not affected
by this Petition.
6.
Pursuant to Section 104.214 of the Board's procedural rules, the Illinois EPA
must provide public notice of any petition for variance within 14 days after filing of the petition.
See,
35
Ill.
Adm. Code 104.214. Section 104.214(a) provides that "the Agency must publish a
single notice
of such petition in a newspaper of general circulation in the county where the
facility or pollution source is
located."
See also,
415 ILCS
5/37(a)
(2008). Section 104.214(b)
requires the Illinois EPA to serve written notice of a petition on the County State's Attorney, the
Chairman of the County Board, each member of the General Assembly from the legislative
district affected, and any person in the county who has in writing requested notice of variance
petitions. The Illinois EPA published the required notice in the Mason County Democrat and the
3
Electronic Filing - Received, Clerk's Office, April 1, 2009
Putnam County Record on January 21,2009, and the Belleville News Democrat, the Red Bud
North County News, and the LaSalle News Tribune on January 22,2009. Also, consistent with
Section 104.214(b), the Illinois EPA mailed notices
of the Petition for Variance on January 22,
2009.
7.
The Illinois EPA has not yet received any written comments, objections or
requests for hearing. Should any public comments be received before the end ofthe comment
period, the Illinois EPA will file an amendment to its Recommendation addressing any necessary
Issues.
8.
Pursuant to the Board's procedural rules, "[w]ithin 21 days after the publication
of notice, the Agency must file with the Board a certification of publication that states the date
on which the notice was published and must attach a copy
of the published notice."
See,
35 Ill.
Adm. Code 104.214(t). The Illinois EPA has filed a certification
of pUblication within this
timeframe.
9.
The Illinois EPA is required to make a recommendation to the Board on the
disposition
of a petition for variance within forty- five (45) days of filing of the petition or any
amendment thereto
or thirty (30) days before a scheduled hearing pursuant to 35
III.
Adm. Code
104.216.
II.
BACKGROUND
10.
As discussed, Petitioner owns and operates five coal-fired power plants for the
generation
of electricity in downstate Illinois with principal emissions consisting of sulfur
dioxide
("S02"), nitrogen oxides ("NO;'), and particulate matter ("PM"). In addition to these
emissions, Petitioner's coal-fired power plants also emit mercury.
II.
Petitioner's S02 emissions are controlled through the use oflow sulfur coal. (pet.
4
Electronic Filing - Received, Clerk's Office, April 1, 2009
at 3). Specifically, Petitioner utilizes Powder River Basin coal at Baldwin, Havana, and
Hennepin. (Amend. Pet. at 4-5). Currently, Petitioner is constructing spray dryer absorbers
(i.e.,
dry scrubbers) with fabric filter systems on all three of its Baldwin units as well as on Havana
Unit 6. (Pet. at 3). Also, Petitioner is installing a fabric filter system on Hennepin Unit 2. (pet.
at 3). Petitioner indicates that these
dry scrubbers will be in place by December 31,2012. (Pet.
at 3). Further, Petitioner notes that the Baldwin
Unit 3 dry scrubber and fabric filter will be
installed during its scheduled outage in March 2010. (pet. at 3). Petitioner asserts that the dry
scrubbers will significantly reduce its system-wide S02 emission rate. (pet. at 3). The Illinois
EPA has issued construction permits for these installations at Baldwin, Havana and Hennepin.
(pet. at 3). Petitioner has appealed certain aspects
ofthese construction permits (PCB 08-066,
07-115
and 07-123, respectively) and the Board has granted a partial stay of the contested
conditions contained in the respective petitions.
12.
Petitioner's NOx emissions are generally controlled by combinations oflow
sulfur coal, low NOx burners, over-fire air, and selective catalytic reduction systems ("SCRs").
(pet. at 3-4). Petitioner's PM emissions are controlled through flue gas conditioning,
electrostatic precipitators
("ESPs"), and fabric filter systems. (pet. at 4).
13.
Pursuant to the illinois mercury rule, Petitioner's mercury emissions will be
controlled through injection of halogenated activated carbon in conjunction with SCRs, dry
scrubbers, ESPs, and fabric filters. (Pet. at 4).
14.
The U.S. Environmental Protection Agency ("USEPA") promulgated regulations
requiring reductions in emissions of S02 and NOx in the Clean Air Interstate Rule ("CAIR") to
address ozone and
PM2.5 nonattainrnent areas
in
May 2005.
See,
70 Fed. Reg. 25162 (May 12,
2005). Also in May 2005, the USEPA promulgated the Clean Air Mercury Rule ("CAMR")
5
Electronic Filing - Received, Clerk's Office, April 1, 2009
which required facilities to reduce their mercury emissions.
See,
70 Fed. Reg. 28606 (May 18,
2005). Petitioner's coal-fired power plants were subject to the federal CAMR and are subject to
the federal CAIR.
15.
Also in May 2005, Petitioner entered into a Consent Decree requiring it to reduce
SOl, NOx, and PM emissions at its five coal-fired power plants as well as mercury emissions at
its Vermilion Power Station. (Pet. at 5).
In
accordance with the Consent Decree, Petitioner is
required to control these emissions through a combination
of enforceable emission limits,
installation
of mandatory pollution control and monitoring technology, and SOl and NOx
allowance restrictions. (Pet. at 5). Compliance with this Consent Decree is to be achieved by the
end
of2012. (pet. at 5).
16.
Following promulgation
of the CAMR and CAIR rules, the TIlinois EPA initiated
outreach with all Illinois electrical generating units
("EGUs") and other interested parties setting
forth its intended regulatory proposals to satisfy the federal requirements
of CAIR and CAMR.
After considering issues raised in outreach, the
TIlinois EPA filed two separate rulemaking
proposals with the Board addressing those two federal rules.
In
its CAMR rule, Illinois EPA
went well beyond the federal CAMR because
of the health risks associated with mercury and
other concerns regarding the implementation
of CAMR alone in Illinois.
17.
Subsequently, the Board adopted the Illinois mercury rule at R06-25 (December
21,2006) with the
MPS, and the Illinois CAIR at R06-26 (August 23, 2007) with a Combined
Pollutant Standard. As a result, Petitioners endeavored to coordinate the two regulatory
requirements along with its Consent Decree requirements and install pollution controls to address
all three requirements. (Pet. at 6).
In
order to meet the requirements of the Illinois CAIR,
Petitioner identified that SCRs would be necessary to reduce
NOx emissions and
dry
scrubbers
6
Electronic Filing - Received, Clerk's Office, April 1, 2009
would be necessary to reduce S02 emissions. (Pet. at 6). Also, Petitioner identified that fabric
filters would be necessary for
PM control pursuant to the Consent Decree. (Pet. at 6). Petitioner
indicates that these same pollution controls aid a source in its ability to reduce mercury
emissions and otherwise comply with the Illinois mercury rule.
(Pet. at 6). However, Petitioner
notes that these pollution control devices could not be installed by the earliest compliance date of
July 1, 2009; and therefore, it was necessary to coordinate these individual requirements. (pet. at
6).
18.
Petitioner, along with other electricity generators, approached the Illinois EPA
with a multi-pollutant proposal to address, in a coordinated fashion, S02, NOx, and mercury.
This proposal was eventually reflected in the Illinois
MPS, and adopted by the Board as part of
Illinois' mercury rule. As a result, Petitioner voluntarily opted in to the MPS on November 26,
2007, memorializing its commitment to abide
by and comply with those requirements. (Pet. at
7).
19.
In
February 2008, the U.S. Court of Appeals for the District of Columbia ("D.C.
Circuit")
vacated the federal CAMR indicating that the CAMR had not gone far enough in
addressing mercury reductions and that
USEPA had improperly promulgated CAMR under
Section
III ofthe Clean Air Act ("CAA") instead of a MACT standard under Section 112.
See,
State
of New Jersey v. Environmental Protection Agency,
517 F.3d 574 (D.C. Cir. 2008). The
D.C. Circuit's vacatur of CAMR will result in USEPA's promulgation of CAMR under Section
112.
20.
In
July 2008, the D.C. Circuit vacated the federal CAlR because of a multitude of
inadequacies in the rule, including Section 110(a)(2)(D) issues).
See, State of North Carolina v.
I
On December 23,2008, the D.C. Circuit, after considering petitions for rehearing and responses thereto, remanded
the CAIR without vacatur directing USEPA to revise the rule consistent with its opinion.
See, North Carolina
v.
7
Electronic Filing - Received, Clerk's Office, April 1, 2009
Environmental Protection Agency,
531 F.3d 896 (D.C. Cir. 2008). However, the vacatur did not
render invalid
USEPA's finding in CAIR that EGUs in llIinois significantly impact downwind
states and interfere with their ability to attain one or more
of the national ambient air quality
standards
("NAAQS"). Furthermore, Illinois must address attainment ofthe ozone and PM2.5
NAAQS and must address its impact on downwind states pursuant to Section 110(a)(2)(D).
21.
In
order to fulfill the requirements of the Illinois mercury rule and MPS,
Petitioner must install and operate halogenated activated carbon (also referred to as "sorbent")
injection systems, meeting sorbent injection requirements, and followed by a cold-side ESP or
fabric filter.
See,
35
III.
Adm. Code 225.233(c)(I)(A). The MPS extends the deadline for
Petitioner to demonstrate compliance with either a
90% mercury reduction requirement or
emission standard of 0.0080 Ib
mercury/GWh
gross electrical output until 2015.
See,
35
III.
Adm. Code 225.233( d). Also, the MPS establishes emission limitations for NOx and S02 and
precludes trading
of any excess NOx and S02 allowances that result from the installation and
operation
of the pollution control equipment necessary to meet applicable emissions limitations.
See,
35
III.
Adm. Code 225.233(e), (t). Since the MPS and Consent Decree both restrict
emissions trading, Petitioner must install and operate pollution control equipment.
22.
As discussed further
infra,
recently, Petitioner engaged in a dialogue with Illinois
EPA regarding the subject
of its Petition. As a result ofthose discussions, and prior to the filing
ofthe Petition, the parties came to an understanding regarding specifics of Petitioner's
compliance plan that would deviate from the
MPS requirements, yet would still be acceptable to
the Illinois EPA.
23.
Currently, there are no pending
State enforcement actions against the Petitioner.
EPA,
550 F.3d 1176
(D.c.
Cir. 2008). Therefore, the requirements of the CAIR are still in effect until USEPA
revises the rule in accordance with the D.C. Circuit's opinion and order.
8
Electronic Filing - Received, Clerk's Office, April 1, 2009
III.
RELIEF REQUESTED
24.
As explained
supra,
Petitioner is currently required to comply with the MPS,
which establishes control requirements and standards for emissions of NO x, S02, and mercury as
an alternative to compliance with emissions standards of Section 225.230(a). 35 Ill. Adm. Code
225.233(a)(1). Petitioner is required to comply with Sections 225.233(c)(1)(A) and
225.233(c)(2), which provide
as follows:
c)
Control Technology Requirements for Emissions
of Mercury.
1)
Requirements for EGUs in an MPS Group.
A)
For each
EGU in an MPS Group other than an EGU that is
addressed by subsection (c)(1 )(B) of this Section for the period
beginning July
1, 2009 (or December 31, 2009 for an EGU for
which an
S02 scrubber or fabric filter is being installed to be in
operation
by December 31,2009), and ending on December 31,
2014 (or such earlier date that the
EGU is subject to the mercury
emission standard in subsection (d)(l)
of this Section), the owner
or operator of the EGU must install, to the extent not already
installed, and properly operate and maintain one
of the following
emission control devices:
i)
A Halogenated Activated Carbon Injection
System,
complying with the sorbent injection requirements of
subsection (c)(2) of this Section, except as may be
otherwise provided
by subsection (c)( 4) of this Section, and
followed by a
Cold-Side Electrostatic Precipitator or Fabric
Filter; or
ii)
If
the boiler fires bituminous coal, a Selective Catalytic
Reduction (SCR) System and an S02 Scrubber.
* * *
2)
For each EGU for which injection of halogenated activated carbon is
required
by subsection (c)(l) of this Section, the owner or operator of the
EGU must inject halogenated activated carbon in an optimum manner,
which, except as provided in subsection (c)( 4)
of this Section, is defined as
all of the following:
A)
The use
of an injection system designed for effective absorption of
mercury, considering the configuration of the EGU and its
9
Electronic Filing - Received, Clerk's Office, April 1, 2009
ductwork;
B)
The injection
of halogenated activated carbon manufactured by
Alstom, Norit, or Sorbent Technologies, or the injection of any
other halogenated activated carbon or sorbent that the owner
or
operator of the EGU has demonstrated to have similar or better
effectiveness for control
of mercury emissions; and
C)
The injection
of sorbent at the following minimum rates, as
applicable:
i)
For an EGU firing subbituminous coal, 5.0 Ibs per million
actual cubic feet or, for any cyclone-fired
EGU that will
install a scrubber and baghouse by December 31,
2012, and
which already meets an emission rate
of 0.020 Ib
mercury/GWh
gross electrical output or at least 75 percent
reduction
of input mercury, 2.5 lbs per million actual cubic
feet;
ii)
For an
EGU firing bituminous coal, 10.0 Ibs per million
actual cubic feet or for any cyclone-fired
EGU that will
install a scrubber and baghouse
by December 31,2012, and
which already meets an emission rate
of 0.020 Ib
mercury/GWh
gross electrical output or at least 75 percent
reduction
of input mercury, 5.0 lbs per million actual cubic
feet;
iii)
For an EGU firing a blend of subbituminous and
bituminous coal, a rate that is the weighted average
of the
above rates, based on the blend
of coal being fired; or
iv)
A rate
or rates set lower by the Agency, in writing, than the
rate specified in any
of subsections (c )(2)(C)(i),
(c)(2)(C)(ii), or (c)(2)(C)(iii)
of this Section on a unit-
specific basis, provided that the owner or operator
of the
EGU has demonstrated that such rate or rates are needed so
that carbon injection will not increase particulate matter
emissions or opacity so as to threaten noncompliance with
applicable requirements for particulate matter or opacity.
D)
For the purposes
of subsection (c)(2)(C) of this Section, the flue
gas flow rate must be determined for the point
of sorbent injection;
provided that this flow rate may be assumed to be identical to the
stack flow rate
if the gas temperatures at the point of injection and
the stack are normally within
100° F, or the flue gas flow rate may
otherwise be calculated from the stack flow rate, corrected for the
10
Electronic Filing - Received, Clerk's Office, April 1, 2009
difference in gas temperatures.
35 Ill. Adm. Code 225.233(c)(I)(A), (c)(2).
25.
Specifically, Petitioner seeks relief from the requirements in Sections
225.233(c)(I)(A) and 225.233(c)(2) that require Petitioner to inject, beginning July 1,
2009,
halogenated activated carbon at a minimum injection rate of 5.0 Ibs/macf. Petitioner requests a
variance term
ofJuly 1, 2009, through March 31, 2010.
In
addition, Petitioner seeks relief from
the related monitoring, recordkeeping, and reporting requirements contained in Sections
225.210(b) and (d), which reference such requirements in Sections 225.240 through 225.290, and
Section 225.233(c)(5). Petitioner briefly mentions its beliefthat should the Board grant it the
requested relief, Baldwin
Unit 3 will not be subject to these monitoring, recordkeeping, and
reporting requirements.
(Pet. at 12). The Illinois EPA agrees with Petitioner, but notes that if
the Board grants the requested relief, Petitioner will be subject to maintaining records as outlined
in its compliance plan relating to Havana
Unit 6 and Hennepin Unit 2.
26.
As discussed
infra,
Petitioner has requested regulatory relief from the
aforementioned provisions
of the MPS based on economic, resource, and operational hardships.
IV.
FACTS PRESENTED IN THE PETITION
27.
As required by Section 104.216(a) [35
Ill.
Adm. Code 104.2l6(a»), the Illinois
EPA has investigated the facts alleged in the Petition for Variance. To date, the Illinois EPA has
not received any public comments regarding the
Petition. As stated
supra,
the Illinois EPA will
file an amendment
to its Recommendation should any additional comments be received before
the end ofthe public comment period.
28.
Petitioner represents that the actions it is required to take under the MPS as it
relates
to Baldwin Unit 3 would result in adverse environmental effects. (Pet. at 9). The Illinois
11
Electronic Filing - Received, Clerk's Office, April 1, 2009
EPA is aware of no adverse environmental effects stemming from compliance with the MPS
requirements.
29.
In addition,
Petitioner indicates that its Petition for Variance, if granted, will alter
the effective dates
of the MPS requirements identified in its construction permit (Application
Number
07110065; J.D. Number 125804AAB) issued for Baldwin Unit 3 on March 3, 2008,
which authorizes the construction and operation of a fabric filter, dry scrubber, and sorbent
injection system.
(Pet. at 21). Petitioner appealed various conditions contained in this
construction permit and the Board has granted
Petitioner's request for a partial stay of such
contested conditions until it takes final action
on the appeal (PCB 08-066). Should the Board
grant the
Petition for Variance, Petitioner must amend its construction permit to reflect the
proper effective dates. Similarly,
Petitioner has appealed its construction permits for Havana and
Hennepin (pCB
07-115 and PCB 06-072, respectively) and the Board has also granted a partial
stay
of the contested conditions until it takes final action on the appeal.
30.
Further, for informational purposes, the lllinois EPA notes Petitioner filed appeals
before the Board relating to Clean
Air Act Permit Program ("CAAPP") permits for Baldwin,
Havana, and Hennepin
in PCB 06-063, PCB 06-071, and PCB 06-072, respectively. These
permits set forth recordkeeping requirements relating to emissions
of mercury, among other
conditions. Currently, these appeals are pending, but the Board has granted a stay
ofthe entirety
of these CAAPP permits.
V.
ENVIRONMENTAL IMPACT
31.
Pursuant to Section 104.216(b)(2), the Illinois EPA is required to state the
location
of the nearest air monitoring station, where applicable. Exhibit 1 of the Petition for
Variance contains a copy
of the map included in the Illinois EPA's Illinois Annual Air Quality
12
Electronic Filing - Received, Clerk's Office, April 1, 2009
Report 2006. The locations ofthe air quality monitoring stations relative to Petitioner's facilities
are delineated on page 34
of this report and contained in Petitioner's Exhibit 1.
In
accordance
with the Board's
Order of February 5,2009, Petitioner has provided further information
regarding the specific locations
of its power plants relative to Illinois EPA air monitoring and
mercury monitoring stations.
See,
Amend. Pet., Exhibits I and 2.
32.
Petitioner states that a net environmental benefit will result from the requested
relief and compliance alternative.
(Pet. at 14). Specifically, Petitioner states that Havana Unit 6
and Hennepin
Unit 2 will be retrofitted with fabric filter and sorbent injection systems by July I,
2009, and that these two systems will remove at least as much mercury as sorbent injection
upstream
of the ESP at Baldwin Unit 3 and are likely to remove more mercury emissions and be
more cost effective than compliance with the MPS at Baldwin
Unit 3. (Pet. at 14-15). Further,
Petitioner asserts that because the combined generating capacity
of Havana Unit 6 and Hennepin
Unit 2 is greater than Baldwin (645 MW versus 600 MW), this alternative compliance measure
could generate even more mercury reductions than Baldwin
Unit 3. (pet. at IS). Specifically,
Petitioner estimates that from July
I, 2009, through December 31, 2009, mercury reductions
from Havana
Unit 6 and Hennepin Unit 2 would aggregate up to 19 pounds more than would be
experienced at Baldwin
Unit 3. (Pet. at 15). This alternative, Petitioner states, would also avoid
the need for an outage in early
2009 and the cost of subsequently relocating the sorbent injection
system on Baldwin
Unit 3. (pet. at 15). Also, Petitioner estimates that its compliance alternative
would result in injection
of 2.5 million fewer pounds of sorbent than at Baldwin Unit 3 from July
1,2009, through March 31,2010. (pet. at IS). However, Petitioner does note that it is unable to
determine exactly how much mercury will be controlled at Havana
Unit 6 and Hennepin Unit 2,
and how much mercury will be emitted by Baldwin
Unit 3. (pet. at 16).
13
Electronic Filing - Received, Clerk's Office, April 1, 2009
33.
While Petitioner admits it does not have data that addresses the qualitative and
quantitative impact
of its mercury remissions on human health and the environment, it states that
emissions from the coal-fired electric power generation sector as a whole tend to affect a large
region
of the country with relatively minimal impacts in the immediate vicinity of an individual
plant. (pet. at 18).
In addition, Petitioner states that because it will offset the effect of this
variance with reductions from Havana Unit 6 and Hennepin Unit 2, the difference in the
downwind impact may not even be measurable, but,
if any, should be lessened by the greater
aggregate mercury removal which will occur from these two units.
(Pet. at 18).
34.
Further, Petitioner asserts numerous other collateral environmental benefits to its
compliance alternative. First, Petitioner asserts that the requested compliance alternative would
avoid wasting fly ash from Baldwin Unit 3 likely to occur when contaminated with halogenated
activated carbon residue as a result
of the injection of sorbent upstream of the ESP. (pet at 18-
19). Petitioner states that when Baldwin Unit 3 is reconfigured with sorbent injection
downstream
of the ESP and upstream ofthe fabric filter system, Petitioner will be able to collect
and reuse this fly ash.
(Pet. at 19). Second, Petitioner argues that its compliance alternative will
result in a decrease in production
of CO
2
emissions. (Pet. at 19). Petitioner asserts that by
injecting sorbent into fabric filter systems at Havana Unit 6 and Hennepin Unit 2, it will be able
to remove as much
or more mercury while using substantially less sorbent, and a reduction in
sorbent results in a reduction in indirect
CO
2
emissions. (Pet. at 19).
35.
The Illinois
EPA does not disagree with Petitioner's assertions of the various
environmental benefits associated with its proposed compliance alternative. Moreover,
as
proposed, the Illinois EPA has reviewed the mercury emission calculations and related
information submitted by the Petitioner and agrees that Petitioner's compliance alternative will
14
Electronic Filing - Received, Clerk's Office, April 1, 2009
likely result in a net environmental benefit. Further, the Illinois EPA does not believe that any
environmental hann will result
if the Board were to grant the Petition for Variance as proposed.
VI.
ARBITRARY AND
UNREASONABLE
HARDSHIP
36.
In
considering whether to grant or deny a variance pursuant to Section 35(a) of
the Act, the Board is required to detennine whether Petitioner has shown that it would suffer an
arbitrary or unreasonable hardship if required to comply with the regulation or permit
requirement at issue. The Act provides that "The Board may grant individual variances beyond
the limitations prescribed in this Act, whenever it is found, upon presentation
of adequate proof,
that compliance with any rule or regulation, requirement or order of the Board would impose an
arbitrary or unreasonable
hardship." 415 ILCS 5/35(a)(2008).
37.
Also,
Section 104.2l6(b)(5) [35 Ill. Adm. Code 104.2l6(b)(5)] ofthe Board's
rules requires the Illinois
EPA to estimate the cost that compliance would impose on the
Petitioner and on others.
See,
35
Ill.
Adm. Code 104.2l6(b)(5).
38.
Petitioner provides no evidence
of its inability to comply with Sections
225.233(c)(1)(A) and 225.233(c)(2), and related monitoring, recordkeeping, and reporting
provisions. Rather, Petitioner states that it seeks this variance
"because making capital and
operating expenditures
to install and operate a halogenated activated carbon injection system on
Baldwin Unit 3 that will need to be removed and re-located nine months after July 1, 2009, upon
installation
of the dry scrubber and fabric filter systems on Baldwin Unit 3 is not financially
prudent, would divert capital and operating expenditures that could be otherwise better spent,
and will result in adverse environmental effects." (pet at 9). Further, Petitioner indicates that it
will face "arbitrary and unreasonable hardship if it is not granted the variance and allowed to
make responsible operating decisions regarding the best combination of actions to address the
15
Electronic Filing - Received, Clerk's Office, April 1, 2009
myriad compliance requirements of the MPS and Consent Decree." (pet. at 9).
In
addition,
Petitioner states that it "must proceed cautiously to maintain its financial resources and
operational flexibility, as well as the integrity
of the electricity generation system that supports
Illinois'
economy" and will continue to "identify the optimal locations for investments and
expenditures consistent with the goal
of maintaining operational flexibility within a competitive
energy
market." (Pet. at 8).
39.
Specifically,
Petitioner asserts it will experience significant expense because it
will
be required to inject approximately 20 million pounds of sorbent over its five different
facilities during each 12-month period, which would mean 115 million pounds system-wide.
(Pet. at 12). Petitioner indicates vendor bids for halogenated activated carbon plus delivery are
currently in excess
of $1 per pound
2
,
which Petitioner states will represent a significant operating
expense for its
MPS units. (Pet. at 12). Specifically, at Baldwin Unit 3, Petitioner indicates that
under the
MPS, it will be required to inject 4 million pounds of sorbent at an approximate cost of
$4 million. (Pet. at 12-13).
40.
In
addition, Petitioner states that under the MPS, it will be required to install a
sorbent injection system upstream
of the cold-side ESP in order for the halogenated activated
carbon residue to be removed from the flue gas prior to being emitted.
(Pet. at 13). Petitioner
argues that this is a waste
of resources because during a planned spring 2010 outage, Baldwin
Unit 3 will be retrofitted with a dry scrubber and a new fabric filter system to meet emission
reduction requirements under the Illinois CAIR and the Consent Decree, which will result in the
sorbent injection system being reconfigured to be located downstream
of the ESP and upstream
'Petitioner points to the Illinois EPA for estimate of the cost of halogenated activated carbon at only 80 cents per
pound during the pendency
of its mercury rule. The Illinois EPA notes that its estimate was just that, an estimate in
2006, and market conditions aTe constantly in a state of flux. Also, the Illinois EPA notes that Petitioner voluntarily
opted in to the
MPS.
16
Electronic Filing - Received, Clerk's Office, April 1, 2009
of the fabric filter system. (pet. at 13). Petitioner argues that this configuration will allow it to
collect fly ash in the ESP prior to the injection of activated carbon into the flue gas stream with
the activated carbon residue removed in the fabric filter system and subsequently disposed. (pet.
at 13).
In
its Amended Petition, Petitioner indicates that this spring 2010 outage will be a major
outage lasting approximately
12 weeks. (Amend. Pet. at 6). Further, Petitioner indicates that
Baldwin Unit 3 will not
be operating commencing March 6, 20 10; and, therefore, there would be
no additional amount of mercury emitted by this unit beyond March 6 through the end of the
proposed variance period, March 31,
2010. (Amend. Pet. at 6). Petitioner indicates that it
requested the variance period to extend through March 31, 201 0, so that it would not be required
to submit reports for the period between commencement
of the outage and the end of the
variance period as there would be no injection
of sorbent during this time. (Amend. Pet. at 6).
41.
Further, Petitioner indicates that the installation
of sorbent injection lances in the
ductwork upstream
of the ESP would require a multi-day unit outage and result in the loss of
operating revenue. (Pet. at 13). Petitioner states that it will cost approximately $100,000.00 to
install the injection equipment upstream of the ESP and relocating it after nine months to a
location downstream would increase these costs accordingly.
(Pet. at 13-14). Thus, Petitioner
argues that it is a waste
of resources and financially taxing to comply with the MPS required
installations at this time when they will be undone in 2010.
42.
Further, Petitioner indicates that it must plan for and finance the purchase of the
necessary pollution control equipment, and that since the MPS and Consent Decree require
compliance with specific emissions rates, Petitioner does not have the option of delaying
equipment planning and financing through purchases of allowances until the financial, labor, and
equipment markets are more advantageous.
(Pet. at 7). Also, Petitioner cites the lengthy
17
Electronic Filing - Received, Clerk's Office, April 1, 2009
procurement process for S02, PM, and mercury pollution control devices, and asserts that each
involves approximately three to five years to come online.
(Pet. at 7-8).
43.
Petitioner estimates that its capital costs
of compliance with the Illinois mercury
rule (including the
MPS) and its Consent Decree would be a total of $973 million by 2013. (pet.
at 8). Petitioner indicates that these estimates might change depending on additional federal
or
state requirements, the outcome of any appeals relating to the CAMR vacatur, new technology,
or variations in costs
of material or labor, among other reasons. (Pet. at 8). The Illinois EPA
notes that Petitioner's estimate of capital costs almost certainly includes all of its facilities as
opposed to just Baldwin; and further, the cost Petitioner is required to bear relating to its Consent
Decree is irrelevant to this proceeding.
44.
In
its Amended Petition, Petitioner indicates that it may save approximately
$3,035,000 if the Board grants the variance prior to May 8,2009. (Amend. Pet. at 8).
45.
Petitioner is requesting this variance to circumvent the financial outlay for
compliance with the
MPS requirements, and to be able to maintain flexibility by utilizing
fmancial resources for other investments, while still providing the same
or better mercury
reductions as agreed to in the
MPS.
VII.
CONSISTENCY WITH FEDERAL LAW
46.
Pursuant to Section 35 ofthe Act [415 ILCS 5/35 (2008)] and 35 ill. Adm. Code
104.208(a), all petitions for variances must be consistent with federal law. Petitioner states that
"there is no federal law that requires these DMG units to comply with any mercury emission rate
limit." (Pet. at 21).
47.
Petitioner is correct that there is currently no authority that would require or
address federal approval
of the MPS. However, Illinois must still develop plans to attain the
18
Electronic Filing - Received, Clerk's Office, April 1, 2009
ozone and PM2.5 NAAQS. More importantly, Illinois must address its impact on downwind
states pursuant
to Section 110(a)(2)(D) of the CAA. USEPA made a finding in CAIR that EGUs
in lllinois significantly impact downwind states and interfere with their ability to attain one or
more
of the NAAQS.
VIII. COMPLIANCE PLAN
48.
Pursuant to Section 104.204(f), the Petitioner is required to present a detailed
compliance plan in the
Petition for Variance. Petitioner provides the following compliance plan
in its
Petition for Variance.
49.
Petitioner requests that the term of the variance for Baldwin Unit 3 begin on
July I,
2009, and terminate March 31, 2010, and proposes the following conditions to apply
during the term
of the variance:
(Pet. at 20).
A.
Prior to and during the term of the variance, Baldwin Unit 3 shall not be
subject to the requirements
of Section 225.233(c)(I)(A),
Secti~n
225.233(c)(2), Sections 225.210(b) and (d), and Section
225.233(c)(5).
B.
Beginning December 31,2009, Havana Unit 6 and Hennepin Unit 2
shall comply with all applicable
MPS requirements, as otherwise
required.
C.
Likewise, upon restarting operations following its spring 2010 outage,
Baldwin Unit 3 shall comply with all applicable MPS requirements.
50.
Further, Petitioner proposes that the compliance plan include the following
provisions:
A.
From July I, 2009, through December 30,2009, Havana Unit 6 and
Hennepin Unit 2 shall inject sorbent
at a minimum rate of 5 lbs/macf
at each of those units until or unless DMG informs the Agency that
these two units, either individually or averaged together, will achieve
mercury reductions
of 90% or will meet the emission rate of 0.0080
Ib/GWhr. Unless expressly stated, such notification shall not commit
19
Electronic Filing - Received, Clerk's Office, April 1, 2009
(Pet. at 20-21).
the units to achieve a 90% reduction
or achieve a rate of 0.0080
Ib/GWhr
after December 30, 2009. IfDMG chooses to comply with
this variance
by achieving a 90% reduction in mercury emissions at
Havana Unit 6 or Hennepin Unit 2, the mercury removal rate shall
be
determined by performing a single stack test on the applicable unit or
units in accordance with proposed Section
22S.239(d)(4)
and (5), (e),
and (f)(I), assuming those sections as adopted in the Board's Docket
R09-10 are substantively the same
as proposed.
B.
Only sorbents listed in or manufactured by the companies listed in
Section 225.233(c)(2)(B) or demonstrated as effective
as the listed
sorbents
as allowed by Section 225.233(c)(4) may be injected unless
or until DMG informs the Agency that these two units, either
individually or averaged together, will achieve mercury reductions
of
90% or will meet the emission rate of 0.0080 Ib/GWhr.
C.
. IfDMG elects to comply with this variance pursuant to the 90%
removal or 0.0080
Ib/GWhr
option under Paragraph 36(A), above,
through December 30,
2009, Havana Unit 6 and Hennepin Unit 2
shall inject sorbent at a rate no less than the rate injected during
mercury removal performance tests to achieve an emission rate
of
0.0080 Ib/GWhr
or 90% removal. For example, if during stack
testing, DMG demonstrated a
90% removal injecting sorbent at a rate
of2 lb/macf, then DMG would continue, throughout the rest of the
variance period, to inject at the minimum two-pound rate rather than
at a five-pound rate.
D.
For Havana Unit 6 and Hennepin Unit 2,
DMG shall maintain records
of the sorbent injection rate and flue gas flow rate from July I, 2009,
through December 30, 2009.
51.
Essentially, Petitioner proposes that instead of injecting sorbent beginning July I,
2009, at Baldwin Unit 3, it will inject sorbent at Havana Unit 6 and Hennepin Unit 2 six months
prior to the
MPS deadline applicable to these units. Petitioner indicates that it does not seek for
Havana Unit 6 or Hennepin Unit 2 to
be subject to the MPS earlier than December 31, 2009, and
does not seek to make any
of its units subject to the
90%
mercury removal requirement ofthe
Illinois mercury rule. (pet. at 21).
52.
The Illinois EPA's mercury rule amendments pending before the
Board (PCB
09-
20
Electronic Filing - Received, Clerk's Office, April 1, 2009
010) propose various sorbent manufactilrers to be added to an approved list. Petitioner states that
it expects to
be able to use such manufacturers if the Board adopts these amendments. (Pet. at.
9). The Illinois EPA has no objection to the use
of the proposed sorbent manufactilres provided
this aspect
of the rule is adopted.
In
addition, Petitioner's compliance plan includes the ability to
determine mercury removal rates
by performing a single stack test on the applicable unit in
accordance with proposed Section 225.239(d)(4) and (5), (e), and (f)(1), assuming those sections
are adopted as substantively the same as proposed
in PCB 09-010. (Pet. at 20). The Illinois EPA
does not object; however, in the event these sections are not adopted as substantively the same as
proposed, Petitioner must comply with these sections as adopted.
53.
Prior to the filing
ofthe Petition for Variance, the Illinois EPA engaged in
dialogue with Petitioner on the subject
of its compliance plan and requested a modification.
Specifically, the Illinois EPA required that not only would Havana
Unit 6 and Hennepin Unit 2
need to meet the July
I, 2009, date for injection of sorbent, but would also have to inject sorbent
at a minimum rate
of 5lbs/macf or achieve mercury reductions of90%. Petitioner agreed to this
condition, and has included it in the proposed compliance plan. Therefore, the Illinois
EPA
believes that Petitioner's compliance plan is sufficient and does not object to the plan as set forth
in the Petition for Variance.
IX.
RECOMMENDATION AND CONCLUSION
54.
Under Section 37 of the Act and Section 104.216(b)(ll) of the Board rules, the
Illinois EPA is required to make a recommendation to the Board as to the disposition
of the
petition.
See,
415 ILCS 5/37(a) and 35m. Adm. Code 104.216(b)(II). The burden of proof in a
variance proceeding is
on the Petitioner to demonstrate that compliance with the rule or
regulation would impose an arbitrary or unreasonable hardship.
See,
415 ILCS 5/35(a) and 35
21
Electronic Filing - Received, Clerk's Office, April 1, 2009
Ill. Adm. Code 104.238.
55.
As a general proposition, the Illinois
EPA does not agree that an arbitrary and
unreasonable hardship results where a petitioner is not permitted to conserve its limited resources
and maintain operational flexibility. Moreover, in this case, the Illinois
EPA is unable to respond
to
Petitioner's contention that
it
must avoid wasting limited resources and must maintain
operational flexibility because the Illinois
EPA does not have any information in its possession to
either contradict or confirm
Petitioner's representations. However, the Illinois EPA does agree
that it is a sound business reason to avoid an improvement where it is to be undone in the near
future, especially when there will be an overall net environmental benefit.
56.
As stated
supra,
Petitioner engaged
in
dialogue with the Illinois EPA regarding its
requested relief and did improve the conditions
of its alternative compliance proposal to the
satisfaction
of the Illinois EPA.
57.
Furthermore, the Illinois EPA agrees with Petitioner that there will likely be a net
environmental benefit
if the Board were to grant the Petition for Variance, and does not believe
that any environmental harm would result therefrom. As such, it seems likely that any detriment
Petitioner might suffer as a result of compliance with the MPS will outweigh any environmental
impact or harm.
58.
Therefore, as presented, the Illinois
EPA does not object to the Board granting the
variance as presented and requested
by Petitioner.
22
Electronic Filing - Received, Clerk's Office, April 1, 2009
WHEREFORE, for the reasons set forth above, the Illinois EPA does not object to the
Board granting the variance as presented and requested
by Petitioner.
Dated: April
1, 2009
1021
North Grand Avenue East
P.O. Box 19276
Springfield, IL 62794-9276
217.782.5544
23
Respectfully submitted,
ILLINIOIS ENVIRONMENTAL
PROTECT
AGENCY
BY:-b~~~~~
.
1
Managing Attorney
Division of Legal Counsel
B~K~4~
Assistant Counsel
-~
.•
Division of Legal Counsel
Electronic Filing - Received, Clerk's Office, April 1, 2009
CERTIFICATE OF SERVICE
I, the undersigned, an attorney, hereby certify that on April 1,2009, I served true
and correct copies
of an APPEARANCE and RECOMMENDATION of the Illinois
Environmental Protection Agency
by electronically filing with the Illinois Pollution
Control Board and
by placing true and correct copies in properly sealed and addressed
envelopes and
by depositing said sealed envelopes in a U.S. mail drop box located within
Springfield, Illinois, with sufficient First Class postage affixed thereto, upon the
following named persons:
John Therriault, Assistant Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph, Suite 11-500
Chicago, Illinois 6060 I
Kathleen
C. Bassi
Stephen J. Bonebrake
Schiff Hardin, LLP
6600
Sears Tower
233 South Wacker Drive
Chicago, IL
60606
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,
Respondent
John J.
Kim
Managing Attorney
Illinois Environmental Protection Agency
Division
of Legal Counsel
1021 N. Grand Avenue East
P.O. Box 19276
Springfield, Illinois 62794-9276
217.782.5544
217.782.9143 (TDD)
Electronic Filing - Received, Clerk's Office, April 1, 2009
