1. ILLINOIS POLLUTION CONTROL BOARD
    2. THE PROPOSAL
    3. MOTIONS
    4. DISCUSSION
      1. Lastly, the Board denies the motion for expedited consideration. Requests for expedited review are governed by Section 101.512 of the Board's rules, and must contain, inter alia, a complete statement of the facts and reasons for the request. See 35 ...
 
ILLINOIS POLLUTION CONTROL BOARD
May 7, 2009
IN THE MATTER OF:
NITROGEN OXIDE (NO
x
) TRADING
PROGRAM SUNSET PROVISIONS FOR
ELECTRIC GENERATING UNITS (EGUs):
NEW 35 ILL. ADM. CODE 217.751
)
)
)
)
)
)
R 09-20
(Rulemaking - Air)
Proposed Rule. First Notice.
OPINION AND ORDER OF THE BOARD (by S.D. Lin):
On April 21, 2009, the Illinois Environmental Protection Agency (Agency) filed a
proposal for rulemaking under Sections 10, 27 and 28 of the Environmental Protection Act (Act),
415 ILCS 5/10, 27, 28 (2006). The proposal would add a single new section, 35 Ill. Adm. Code
217.751 to 35 Ill. Adm. Code 217.Subpart W. Beginning with any control period in 2009, the
new section would “sunset”, or render inapplicable, the provisions of the Nitrogen Oxides (NO
x
)
Trading Program for electrical generating units (EGUs) found at 35 Ill. Adm. Code 217.Subpart
W. But, the Agency proposes that the provisions 35 Ill. Adm. Code 217.Subpart W will remain
in effect for violations that occurred in control periods prior to 2009.
The Agency also filed a motion (Mot.) requesting the Board to expedite consideration of
the proposal.
See
415 ILCS 5/28 (2006); 35 Ill. Adm. Code 102.202(g) and 101.512. The
motion to expedite requests that the Board cause immediate first notice publication of the
proposal under the Administrative Procedure Act (APA), 5 ILCS 100
et seq.
(2006), without
Board comment on the merits and schedule public hearings as soon as possible. Mot. at 2-3.
The Board has received no responses to the motions and pursuant to Section 101.500(d), any
objection to the granting of the motions is deemed waived. 35 Ill. Adm. Code 101.500(d).
In this order, the Board accepts the proposal for hearing. The Board denies the motion
for expedited consideration, but authorizes first-notice publication of the proposal without
comment on the proposal’s merits, and directs expeditious scheduling of hearing.
THE PROPOSAL
In the proposal’s six-page statement of reasons (SR), the Agency states that the Board
adopted the Part 217 NO
x
Trading Program rules in Proposed New 35 Ill. Adm. Code 217.
Subpart W, The NO
x
Trading Program for Electrical Generating Units, and Amendments to 35
Ill. Adm. Code 211 and 217, R 01-9 (Dec. 21, 2000). SR. at 1. Part 217.Subpart W regulates
NO
x
emissions from utility boilers or EGUs. Part 217.Subpart W received approval by the
United States Environmental Protection Agency (US EPA) as part of the Illinois State
Implementation Plan (SIP) for ozone on November 8, 2001.
See
66
Fed. Reg.
56449 (Nov. 8,
2001). Illinois was required to regulate these sources pursuant to USEPA's NO
x
SIP Call for
2
EGUs pursuant to Sections 110(a) (2) and 126 of the federal Clean Air Act (CAA) and 40 CFR
51.121.
See also
63
Fed. Reg.
57356 (Oct. 27, 1998). SR at 1-2. IEPA reports that the emissions
reductions helped the two Illinois ozone nonattainment areas in Illinois attain the 1997 8-hour
ozone National Ambient Air Quality Standard (NAAQS). In addition, the continued
implementation of the federal NO
x
, Trading Program was required under Phase I of the 8-hour
ozone implementation rule.
See
40 CFR 51.905(f).
Id.
at 2.
On May 12, 2005, USEPA adopted the federal Clean Air Interstate Rule (CAIR) to
replace the NO
x
SIP Call Trading Program beginning with the 2009 control period and to add
two new trading programs addressing annual emissions of NO
x
and sulfur dioxide.
See Rule to
Reduce Interstate Transport of Fine Particulate Matter and Ozone; Revisions to Acid Rain
Program; Revisions to the
NO
x
SIP Call,
70
Fed. Reg.
25162 (May 12, 2005). SR at 2. While
the IEPA states that the Board adopted the CAIR rules in the still-pending R06-22 proceeding, in
fact the CAIR rules were adopted by the Board in Proposed New Clean Air Interstate Rule
(CAIR) SO2, NO
x
Annual and NO
x
Ozone Season Trading Programs, 35 Ill. Adm. Code 225,
Subparts A, C, D, E and F, R 06-26 (Aug.23, 2007). The CAIR rules, by their terms, were to
replace the NO
x
Trading rules in 2009. The Illinois CAIR rules were approved by USEPA on
October 16, 2007.
See
72
Fed. Reg.
58528(Oct. 16, 2007).
Id.
The CAIR provisions as set forth in 35 Ill. Code Part 225.Subpart E include a trading
program for control of NO
x
emissions during the ozone season that replaces the provisions in
Part 217.Subpart W for EGUs beginning with the 2009 control period (May 1 through September
30) and thereafter. Part 225.Subpart E incorporated in large part applicable provisions from the
federal CAIR rule as required for federal approval. SR at 2.
After the adoption of Illinois CAIR, the United States Court of Appeals reached a
decision on a number of petitions for review it had received concerning the federal CAIR rule.
On July 11, 2008, the Court of Appeals vacated the federal CAIR rule in its entirety and
remanded the rule to USEPA for revision.
North Carolina
v.
USEPA,
531 F.3d 896 (C.A.D.C.
Cir. 2008). The court’s July 2008 opinion stated that pending the remand of the CAIR program
to USEPA, the provisions of the federal NO
x
SIP Call Trading Program would remain in place.
But, the parties petitioned the court for rehearing on the decision to vacate and requested that the
federal CAIR rule be reinstated during the remand. On December 23, 2008, the court granted the
rehearing and “unvacated” federal CAIR rule with implementation to begin with the original
control period in 2009.
North Carolina v. USEPA,
550 F.3d 1176 (C.A.D.C. Cir. 2008). SR at 2-
3.
1
1
There has been no final action by USEPA on its CAIR rules. The Board has never been asked
to construe what effect, if any, the status of the federal CAIR rules has on the Board's Part 225
CAIR NO
x
rules.
The Board's Part 217 NO
x
Trading Program rules have continued to be in full force and
effect. The Agency states that, with the reinstatement of the federal CAIR program, Illinois'
EGUs must now comply with two sets of duplicative administrative requirements (
e.g.
,
permitting, reporting) for the 2009 ozone season and beyond: namely, the Illinois CAIR rule
requirements at Part 225 and the Illinois NO
x
Trading Program at Part 217.
 
3
To address and remove this duplication, the Agency proposes to sunset the provisions of
the NO
x
Trading Program, by adding a new Part 217.751. The full text of the proposed rule is:
Section 217.751 Sunset Provisions
The provisions of this Subpart W shall not apply for any control period in 2009 or
thereafter. Noncompliance with the provisions of this Subpart that occurred prior
to 2009 is subject to the applicable provisions of this Subpart.
(Source: Added at 33 Ill. Reg. ___ effective ______ )
The Agency states that this proposal is consistent with the provisions of 40 CFR
51.123(bb)(1)(i), which provide that states with approved CAIR programs may revise their
applicable SIP so that the provisions of the NO
x
, SIP Call Trading Program do not apply to
affected EGUs. SR at 3.
As to the scope of the rule, the Agency states that the entire State of Illinois was subject
to the NO
x
, SIP Call and is now subject to CAIR. The proposed regulations will affect existing
EGUs. There are approximately 229 existing EGUs that are currently subject to the NO
x
SIP Call
Trading Program. For the NO
x
SIP Call Trading Program, existing units are those that
commenced operation before May 1, 2006. Of these units, 170 are gas and oil fired boilers, 59
are coal-fired boilers, and the remainder are gas and oil-fired combustion turbines. SR at 3.
The statement of reasons indicates that the Agency did an electronic e-mail outreach to
the 229 existing EGUs that are subject to the Part 217 NO
x
Trading Program rules, and has
identified no significant issues. SR. at 4-5.
The Agency accordingly concludes that
the rule is being proposed to prevent a burden and replaces a rule that is no longer
being implemented by USEPA. The adoption of the proposal will not result in
injury or substantial prejudice, nor an abrupt departure from a well established
practice. Hence, adoption of this proposal is appropriate to prevent a burden on
affected EGUs.
The amendments to Part 217.Subpart W are being proposed to ensure consistency with
the CAIR ozone season program and prevent EGUs from being subject to duplicative
monitoring, reporting, permitting and recordkeeping requirements. USEPA has stopped
allocating NO
x
allowances for the NO
x
SIP Call Trading Program. As this proposal
sunsets regulatory provisions, it would impose no new requirements or costs on affected
sources. Hence, the proposal is both technically and economically feasible. SR at 5.
MOTIONS
 
4
In its motion to expedite, the Agency requests the Board proceed to first notice under the
APA without reaching a decision on the merits, by publishing the regulatory language proposed
in this rulemaking proposal only for purposes of first notice. The Agency also requests that the
requisite hearings be scheduled as soon as possible. Mot. at 2-3.
In support of this request, the Agency lays out the sequence of events as described above
concerning the adoption of the state and federal CAIR and NO
x
Trading Program rules, and the
actions of the federal court of appeals. The Agency then states that
With the reinstatement of the CAIR program, Illinois' EGUs must now comply
with duplicative administrative requirements (e.g., permitting, reporting) for the
2009 ozone season and beyond until the provisions of the NO
x
Trading Program
are sunsetted; namely, the duplicative requirements that appear in Part
217.Subpart W.
For the reasons stated above, and due to the impending 2009 ozone season control
period (May 1,2009, through September 30, 2009), the regulations need to be
adopted in an expedited manner.
In light of the foregoing, it is necessary to expedite review in this matter. Mot. at. 2.
DISCUSSION
First, the Board finds that the petition meets the content requirements of 35 Ill. Adm.
Code 102.208 and 102.210 and is accepted for hearing.
Lastly, the Board denies the motion for expedited consideration. Requests for expedited
review are governed by Section 101.512 of the Board's rules, and must contain,
inter alia
, a
complete statement of the facts and reasons for the request.
See
35 Ill. Adm. Code 101.512. In
acting on a motion for expedited review, the Board considers, at a minimum, all statutory
requirements and whether or not material prejudice will result from the motion being granted or
denied. 35 Ill. Adm. Code 101.512(b). In addition, the Board will only grant a motion for
expedited review consistent with available resources.
See
35 Ill. Adm. Code 101.512(c).
The Board simply cannot expedite every rulemaking. In denying a recent motion for
expedited review filed by the City of Galva, the Board stated that its “limited resources in light
of its current and future decision deadlines render the granting of a motion for expedited review
unlikely in all but the most dire circumstances.” In the Matter of: City of Galva Site-Specific
Water Quality Standard for Boron Discharges to Edwards River and Mud Creek: 35 Ill. Adm.
Code 303.447 and 303.448, R9-11, slip op. at 3 (Feb. 5, 2009). The Board recently granted two
Agency motions to expedite NO
x
rulemakings, in which the Agency detailed the possibility of
USEPA sanctions for failure of the state to remedy deficiencies in the SIP for ozone attainment.
In each of these proceedings, the Board found that “USEPA’s implementation deadline and the
risk of federal NO
x
sanctions constitute ‘dire circumstances.’” Section 27 Proposed Rules for
Nitrogen Oxide (NOx) Emissions From Stationary Reciprocating Internal Combustion Engines
and Turbines: Amendments to 35 Ill. Adm Code Parts 211 and 217, R07-19, slip op. at 4 (Apr.
5
2, 2009) and In the Matter of: Nitrogen Oxides Emissions from Various Source Categories,
Amendments to 35 Ill. Adm. Code Parts 211 and 217, R08-19, slip op. at 4 (Apr. 2, 2009).
Here, the Board does not dispute the fact that the 229 regulated EGUs are subject to two
sets of rules, and that the problem must be addressed. As the Agency notes, the ozone season
runs from May 1 through September 30. It is clearly impossible for the Board to adopt rules
proposed on April 22, 2009 prior to the start of the ozone season, and it may well be problematic
as to whether rulemaking can be completed by that time. But, since both USEPA and the
Agency recognize the problems that the federal CAIR rules have generated on the federal and
state levels, the Board cannot find that the circumstances the Agency presents concerning the
sunset of the NO
x
Trading Program rules presents “dire circumstances” sufficient to warrant the
grant of expedited decision. Moreover, the Board reminds that, in addition to granting Agency
motions to expedite rulemakings in the R07-19 and R08-19 proceedings, the Board has also
expedited Amendments to 35 Ill. Adm. Code 225: Control of Emissions From Large Combustion
Sources (Mercury Monitoring), R09-10 (Nov. 5, 2008) at Agency request.
As a practical matter, the Board can authorize the first-notice publication of this proposal
without comment on its merits. This will alert the regulated community to the state’s intentions
in this area. The hearing officer is directed to coordinate Illinois Register publication in this
docket with publications in dockets R07-19 and R08-19 to avoid any delay in the tight schedules
for completion of those dockets. The Board also directs its hearing officer to expeditiously
schedule hearings in this docket consistent with the Board’s decision and regulatory hearing
calendars and other operational needs; it may prove impossible to hold hearings in this docket
before the close of the fiscal year. The Board encourages the hearing officer to dovetail hearings
in this docket with those in other air rulemaking dockets to the extent practicable.
ORDER
The Board directs the Clerk to cause the first notice publication of the following rule in
the
Illinois Register
:
TITLE 35: ENVIRONMENTAL PROTECTION
SUBTITLE B: AIR POLLUTION
CHAPTER I: POLLUTION CONTROL BOARD
SUBCHAPTER C: EMISSION STANDARDS AND LIMITATIONS
FOR STATIONARY SOURCES
PART 217
NITROGEN OXIDES EMISSIONS
SUBPART A: GENERAL PROVISIONS
Section
217.100
Scope and Organization
217.101
Measurement Methods
217.102
Abbreviations and Units
217.103
Definitions
6
217.104
Incorporations by Reference
SUBPART B: NEW FUEL COMBUSTION EMISSION SOURCES
Section
217.121
New Emission Sources
SUBPART C: EXISTING FUEL COMBUSTION EMISSION SOURCES
Section
217.141
Existing Emission Sources in Major Metropolitan Areas
SUBPART K: PROCESS EMISSION SOURCES
Section
217.301
Industrial Processes
SUBPART O: CHEMICAL MANUFACTURE
Section
217.381
Nitric Acid Manufacturing Processes
SUBPART Q: STATIONARY RECIPROCATING INTERNAL COMBUSTION
ENGINES AND TURBINES
Section
217.386
Applicability
217.388
Control and Maintenance Requirements
217.390
Emissions Averaging Plans
217.392
Compliance
217.394
Testing and Monitoring
217.396
Recordkeeping and Reporting
SUBPART T: CEMENT KILNS
Section
217.400
Applicability
217.402
Control Requirements
217.404
Testing
217.406
Monitoring
217.408
Reporting
217.410
Recordkeeping
SUBPART U: NO
x
CONTROL AND TRADING PROGRAM FOR
SPECIFIED NO
x
GENERATING UNITS
Section
217.450
Purpose
217.452
Severability
217.454
Applicability
217.456
Compliance Requirements
217.458
Permitting Requirements
7
217.460
Subpart U NO
x
Trading Budget
217.462
Methodology for Obtaining NO
x
Allocations
217.464
Methodology for Determining NO
x
Allowances from the New Source Set-Aside
217.466
NO
x
Allocations Procedure for Subpart U Budget Units
217.468
New Source Set-Asides for “New” Budget Units
217.470
Early Reduction Credits (ERCs) for Budget Units
217.472
Low-Emitter Requirements
217.474
Opt-In Units
217.476
Opt-In Process
217.478
Opt-In Budget Units: Withdrawal from NO
x
Trading Program
217.480
Opt-In Units: Change in Regulatory Status
217.482
Allowance Allocations to Opt-In Budget Units
SUBPART V: ELECTRIC POWER GENERATION
Section
217.521
Lake of Egypt Power Plant
217.700
Purpose
217.702
Severability
217.704
Applicability
217.706
Emission Limitations
217.708
NO
x
Averaging
217.710
Monitoring
217.712
Reporting and Recordkeeping
SUBPART W: NO
x
TRADING PROGRAM FOR ELECTRICAL
GENERATING UNITS
Section
217.750
Purpose
217.751
Sunset Provisions
217.752
Severability
217.754
Applicability
217.756
Compliance Requirements
217.758
Permitting Requirements
217.760
NO
x
Trading Budget
217.762
Methodology for Calculating NO
x
Allocations for Budget Electrical
Generating Units (EGUs)
217.764
NO
x
Allocations for Budget EGUs
217.768
New Source Set-Asides for “New” Budget EGUs
217.770
Early Reduction Credits for Budget EGUs
217.774
Opt-In Units
217.776
Opt-In Process
217.778
Budget Opt-In Units: Withdrawal from NO
x
Trading Program
217.780
Opt-In Units: Change in Regulatory Status
217.782
Allowance Allocations to Budget Opt-In Units
8
SUBPART X: VOLUNTARY NO
x
EMISSIONS REDUCTION PROGRAM
Section
217.800
Purpose
217.805
Emission Unit Eligibility
217.810
Participation Requirements
217.815
NO
x
Emission Reductions and the Subpart X NO
x
Trading Budget
217.820
Baseline Emissions Determination
217.825
Calculation of Creditable NO
x
Emission Reductions
217.830
Limitations on NO
x
Emission Reductions
217.835
NO
x
Emission Reduction Proposal
217.840
Agency Action
217.845
Emissions Determination Methods
217.850
Emissions Monitoring
217.855
Reporting
217.860
Recordkeeping
217.865
Enforcement
APPENDIX A
Rule into Section Table
APPENDIX B
Section into Rule Table
APPENDIX C
Compliance Dates
APPENDIX D
Non-Electrical Generating Units
APPENDIX E
Large Non-Electrical Generating Units
APPENDIX F
Allowances for Electrical Generating Units
APPENDIX G
Existing Reciprocating Internal Combustion Engines Affected by the NO
x
SIP Call
Authority: Implementing Sections 9.9 and 10 and authorized by Sections 27 and 28.5 of the
Environmental Protection Act [415 ILCS 5/9.9, 10, 27 and 28.5 (2004)].
Source: Adopted as Chapter 2: Air Pollution, Rule 207: Nitrogen Oxides Emissions, R71-23, 4
PCB 191, April 13, 1972, filed and effective April 14, 1972; amended at 2 Ill. Reg. 17, p. 101,
effective April 13, 1978; codified at 7 Ill. Reg. 13609; amended in R01-9 at 25 Ill. Reg. 128,
effective December 26, 2000; amended in R01-11 at 25 Ill. Reg. 4597, effective March 15, 2001;
amended in R01-16 and R01-17 at 25 Ill. Reg. 5914, effective April 17, 2001; amended in R07-
18 at 31 Ill. Reg. 14254, effective September 25, 2007; amended in R07-19, at 33 Ill. Reg. ____,
effective __________, amended in R08-19, at 33 Ill. Reg. ____, effective __________;amended
in R09-20 at 33 Ill. Reg. ___, effective ______________.
SUBPART W: NO
x
TRADING PROGRAM FOR ELECTRICAL
GENERATING UNITS
Section 217.751 Sunset Provisions
The provisions of this Subpart W shall not apply for any control period in 2009 or thereafter.
Noncompliance with the provisions of this Subpart that occurred prior to 2009 is subject to the
applicable provisions of this Subpart.
9
(Source: Added at 33 Ill. Reg. ___ effective ______ )
I, John T. Therriault, Assistant Clerk of the Illinois Pollution Control Board, certify that
the Board adopted the above opinion and order on May 7, 2009, by a vote of 5-0.
__________________________________
John T. Therriault, Assistant Clerk
Illinois Pollution Control Board

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