ILLINOIS POLLUTION CONTROL BOARD

August 6, 2009

IN THE MATTER OF:

NO

x

TRADING PROGRAM:

AMENDMENTS TO 35 ILL. ADM. CODE

PART 217

)

)

)

)

)

R06-22

(Rulemaking - Air)

ORDER OF THE BOARD (by A.S. Moore):

On August 3, 2009, the Illinois Environmental Regulatory Group (IERG) filed two

motions in this rulemaking docket, a “Motion for Emergency Rule” (Mot. Emer.) and a “Motion

for Expedited Action on the on the Illinois Environmental Regulatory Group’s Alternative

Proposal” (Mot. Exp.). The Board first provides a brief summary of each of the two motions

before issuing its order, which directs participants to file responses to the motions no later than

Thursday, August 13, 2009, and directs IERG to a file a reply, if it wishes to do so, no later than

Monday, August 17, 2009. The Board reserves ruling on the merits of the two motions.

ABBREVIATED PROCEDURAL HISTORY

On January 19, 2006, Illinois Environmental Protection Agency (Agency or Illinois EPA)

filed a rulemaking proposal. In an order dated February 2, 2006, the Board accepted the proposal

for hearing. No hearings have been held on the Agency’s proposal.

In status reports filed with the Board on November 20, 2007; June 25, 2008; October 30,

2008; and March 9, 2009, the Agency has indicated that it is in the process of evaluating its most

appropriate course of action in this docket.

MOTION FOR EMERGENCY RULE

In its motion for adoption of emergency rules, IERG states that the Environmental

Protection Act requires “adoption and implementation of a Nitrogen Oxide (NO

x

) State

Implementation Plan (SIP) Call Budget Trading Program for Non-Electric Generating Units

(“Non-EGUs”).” Mot. Emer. at 1, citing 415 ILCS 5/9.9 (2008). The Board has enacted such a

program as Subpart U of Part 217 of its air pollution regulations.

See

35 Ill. Adm. Code

217.450-217.482. IERG claims that, under the rule facilities subject to Subpart U “must hold

NO

x

SIP Call allowances for the 2009 season on November 30, 2009.” Mot. Emer. at 3, citing

35 Ill. Adm. Code 217.456(d).

IERG further claims that, in recently adopting the federal Clean Air Interstate Rule

(CAIR), the United States Environmental Protection Agency (USEPA) stated “that it would no

longer issue NO

x

SIP Call allowances after the 2008 ozone season.” Mot. Emer. at 3. IERG

argues that the Agency nonetheless “has failed to take any action to establish a new regulatory

mechanism for issuing NO

x

SIP Call allowances to sources subject to Subpart U for the 2009

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2

ozone season.”

Id

. at 4. IERG expresses some doubt that CAIR NO

x

allowances would be

sufficient to demonstrate compliance with Subpart U.

See id

. at 4-5.

IERG argues that, because no regulation now issues CAIR allowances to sources that are

subject to Subpart U, “an emergency rule is necessary in order to require that the Illinois EPA

distribute allowances to impacted facilities and prompt the USEPA to establish CAIR

compliance accounts for such facilities.” Mot. Emer. at 6. IERG requests that the Board

exercise its authority to adopt emergency rules by revising Subpart U to bring NO

x

SIP Call

budget units “into the CAIR NO

x

Ozone Season Trading Program, using a slightly revised Non-

EGU budget and the same applicability requirements, as found in the current Subpart U.”

Id

.,

see

id

., Exh. 1 (proposed emergency rule amending Part 217);

see

5 ILCS 100/5-45 (Illinois

Administrative Procedure Act), 415 ILCS 5/27(c) (2008); 35 Ill. Adm. Code 102.612 (Adoption

of Emergency Regulations). IERG expresses its understanding that “the rule must be final prior

to the end of the ozone season (September 30, 2009) in order for USEPA to consider allocating

the 2009 NO

x

allowances to the Illinois EPA, and thus, it is imperative that an emergency rule be

adopted for the 2009 control period.” Mot. Emer. at 16.

MOTION FOR EXPEDITED ACTION

IERG states that Subpart U of the Board’s air pollution regulations requires that affected

non-EGUs hold NO

x

allowances on November 30, 2009, but argues that the Agency has not

issued any of those allowances to non-EGUs for 2009. Mot. Exp. at 2, 8, 11. IERG further

argues that “a rule is necessary in order to incorporate NO

x

SIP Call budget units into the CAIR

NO

x

Ozone Season Trading Program and distribute allowances accordingly.”

Id

. IERG states

that, because of the Agency’s failure to act, “IERG is compelled to offer this alternative proposal

to address the problems that will be faced by owners/operators of affected Non-EGUs should

they not hold the requisite NO

x

allowances through no fault of their own.”

Id

. at 11.

IERG notes that the revised Subpart U attached to the motion for an emergency rule is

“identical” to the alternative proposal attached to the motion for expedited action. Mot. Exp. at

12, n.1. Nonetheless, IERG distinguishes the two motions from one another: the emergency rule

is intended to address the allocation of allowances only for the 2009 control period, while the

alternative proposal “is intended to be the rule requiring the allocation of allowances for the 2010

control period and beyond.”

Id

. at 12. IERG argues that the “alternative proposal will satisfy the

requirement for Illinois to have regulations in place to address the NO

x

SIP Call emissions

reduction from Non-EGU’s, absent the USEPA’s continued administration of the NO

x

SIP Call

trading program.”

Id

. at 13;

see id

., Exh. 1. IERG provides a summary of the rulemaking

proposal it has submitted to the Board and on which it seeks expedited action.

See id

. at 16-26.

ORDER

Section 101.500(d) of the Board’s procedural rules provides, in pertinent part, that,

[w]ithin 14 days after service of a motion, a party may file a response to the

motion. If no response is filed, the party will be deemed to have waived objection

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