BEFORE

THE ILLINOIS

POLLUTJON

CONTROL

BOARD

N

THE MATTER OF:

)

)

NO

TRADING

PROGRAM:

)

R06-22

AMENDMENTS

TO 35

ILL. ADM.

CODE

)

(Rulemaking

- Air)

PART2I7

)

NOTICE

TO:

John Therriault, Assistant

Clerk

Alec

M.

Davis

Timothy

Fox,

Hearing

Officer

illinois

Environmental Regulatory

Group

Illinois

Pollution Control Board

3150

Roland Ave.

State

of Illinois Center

Springfield,

IL

62705-5776

100

West

Randolph, Suite

11-500

Chicago,

illinois 60601

Mitchell

Cohen, Chief Legal

Counsel

Department

of Natural Resources

Kathleen

C.

Bassi

One

Natural Resources

Way

SchiffHardin,

LLP

Springfield,

Illinois

62702-1271

6600

Sears

Tower

233

5.

Waeker

Drive

Katherine Hodge

Chicago,

IL 60606-6473

N. LaDonna

Driver

Monica

T.

Rios

Hodge Dwyer

& Driver

3150 Roland Ave.,

P0 Box 5776

Springfield,

IL

62705-5776

PLEASE

TAKE NOTICE

that I

have today filed with

the

Office of

the Pollution Control

Board

the

attached RESPONSE

TO MOTION

FOR

EMERGENCY

RULE

and

MOTION

FOR

EXPEDITED

ACTION

ON

THE

ILLINOIS

ENVIRONMENTAL

REGULATORY

GROUP’S

ALTERNATIVE

PROPOSAL.

and

AFFIDAVIT

OF ROBERT KALEEL

a copy of

which

is

herewith

served

upon

you.

ILLINOI

ENVJR

ENTAL

PROTECTION AGENCY

By:

Annet

Godiksen

Assistant

Counsel

DATED:

August 13, 2009

Division

of Legal Counsel

P.O.

Box 19276

Springfield, Illinois

62794-9276

217.782.5544

217382.9143

(TDD)

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

BEFORE THE

ILLINOIS

POLLUTION

CONTROL

BOARD

IN THE

MATTER OF:

)

NO

TRADING

PROGRAM:

)

R06-22

AMENDMENTS

TO 35

ILL.

CODE

)

(Rulemaking - Air)

PART217

)

RESPONSE TO

MOTION

FOR

EMERGENCY

RULE

and MOTION

FOR

EXPEDITED

ACTION ON

THE

ILLINOIS ENVIRONMENTAL REGULATORY GROUP’S

ALTERNATIVE PROPOSAL

NOW

COMES

the Illinois

Environmental Protection

Agency (“Illinois EPA”), by and

through its attorneys, and

pursuant to 35 Ill. Adm. Code 101.500 and 102.2 12(a) and (d), hereby

files a Response to the

Motion

for Emergency Rule and Motion for Expedited Action on the

Illinois

Environmental

Regulatory

Group’s Alternative Proposal, and, respectfully requests that

the

Illinois Pollution Control

Board (“Board”)

deny these

Motions.

In support of its

Response,

the Illinois

EPA states

as follows:

I.

INTRODUCTION

1.

The

Clean

Air

Interstate

Rule

(“CAR”)

was promulgated

by the United States

Environmental

Protection

Agency

(“USEPA”) on May 12, 2005. 70 Fed. Peg. 25216. Note:

there have also been additional

amendments since 2005.

2.

The

CAR provides

that the

NOx State Implementation

Plan

(“SIP”) Call Trading

Program is

sunsetted after the

2008

control period and that

states have a continuing obligation

to

meet the NOx Budget for

Non-Electricity

Generating Units

(“EGUs”).

The

CAIR does not

mandate how states

must

comply

with

this requirement. Id.

3.

On January 19, 2006,

the Illinois EPA filed the present rulemaking with the

Board

regarding

the Nitrogen

Oxide (“NOx”)

Trading

Program:

Amendments to

35

Ill.

Adm.

Code 217

to

address minor clean-up issues.

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

4.

On

December

23, 2008,

the

United

States

Court

of Appeals

for the

District

of

Columbia,

in

an

appeal

challenging

different

aspects

of the

CAR,

remanded

CAR

without

vacatur.

North

Carolina

v. EPA,

550

t.3d 1176

(D.C.

Cir.

2008).

The appellate

court

left

intact

the states’

obligation

to

meet

the

NOx

SIP

Call

Budget.

5.

Jn

early 2009,

in

response

to the

North

Carolina

ruling,

the

Illinois

EPA began

the

regulatory

development

process.

During

this

time

period

the Illinois

EPA

had discussions

with

USEPA

regarding

its

concerns

with

the short

time-frames

available

for adoption

of

a

NOx

Budget

rule

for

Non-EGUs.

The

short time-frames

are

of

concern,

as prior

to the

adoption

of a

rule

the USEPA

must

approve

both

the

State’s

rule

and

the allocation

allowances

to

subject

units.

6.

On

August

3,

2009,

Illinois

Environmental Regulatory

Group (‘tERG”)

filed

a

Motion

for Emergency

Rule

and

a Motion

for

Expedited

Action

on IERG’s

Alternative Proposal

(“Motions,”

collectively).

7.

In

an

order

dated

August

6, 2009,

the

Board

directed

participants

to file

responses

to

the Motions

by no

later than

Thursday,

August

13,

2009.

II.

THE

MOTIONS

SHOULD

BE

DENIED

FOR

PROCEDURAL

DEFICIENCiES

8.

IERG’s

Motion

for Emergency

Rule

is unfounded,

in that

an

emergency

situation

does not

exist.

Further,

even

if the

Board

should

find that

an

emergency

situation

exists,

the

proposed

approach

does

not appropriately

address

the issue

and

is not

federally

approvable.

In

Attachment

A, the

Illinois

EPA

has

provided

regulatory

language

that

should address

any

concerns

appropriately.

9.

IERG’s

Motion

for

Expedited

Action

on

IERG’s

Alternative

Proposal

(“Motion

for

Expedited

Action”)

is also

unfounded

in

that

an

emergency

situation

does

not

exist

and,

as is

the

case with

the

Motion

for

Emergency

Rule, even

if

Board

finds

that

an

emergency

situation

2

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

exists and

thus

that there

is

reason

to expedite

action

on IERG’s proposal, that proposed

alternative

does

not

appropriately address

the issue and is not

federally approvable.

10.

Another

deficiency in the

Motions is that, even if the Board finds some merit in

ERG’s

arguments

for

the Alternative

Proposal, the means by which IERG is presenting the

Alternative Proposal

is itself

flawed.

Specifically,

the

Alternative

Proposal is more correctly

a

separate

proposal from

the subject

matter and scope of the present rulemaking. Accordingly, the

Motions

should

not

be considered

within

the context of this rulemaking

docket;

rather,

IERG

should

have

submitted

its proposal as

a separate stand-alone rulemaking. The Board should not

allow

IERG

to shoehorn

its Motions into the

current proceedings.

11.

Furthermore, the Motion for

Expedited Action contains

no

environmental,

technical, or

economic support

for a regulatory proposal addressing the federal CAIR

requirements for Non-EGUs.

The

Motion for Expedited Action

also

does not

include the

required petition

of 200 signatures

as required pursuant to Section 28 of the

Environmental

Protection

Act (“Act”) (415 ILCS

5/28)

and

35

Ill.

Adm.

Code 102.202(g) and 102.410(b)).

Another

omission

by ERG is an acknowledgment that an emergency rule, even if allowed, is

only effective for up

to

150

days as set

forth in Section

5-45(c) of

the Illinois

Administrative

Procedure

Act (415

ILCS

5-45(c)).

There is no provision for

any

regulatory

amendment that

would

be in place

following

the expiration

of 150 days.

12.

Should the Board

nonetheless

desire to proceed with a short term solution, the

Illinois EPA is hereby

submitting

proposed regulatory language which does not have the

aforementioned

problems associated with the Motion for

Expedited Action but addresses

IERG’s

concerns in an appropriate manner. (See Attachment A.)

13.

Regardless

of

whether

the Board treats the requests

by

IERG

as a new rulemaking

3

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

or

somehow

part

of

the

present

rulemaking, the

Motion for Emergency

Rule

fails

to

satis&

the

content

requirements

for

adoption

of

Board

emergency regulatory

proposals

under 35 111. Adm.

Code

102.612.

Section

102.612 requires that the

Board

must

find

that a situation exists

which

reasonably

constitutes

a threat to the public

interest,

safety,

or

welfare in order to

adopt

an

emergency

rulemaking.

In its Motion for

Emergency

Rule,

IERG

makes

the

wholly

unfounded

allegation

that the Illinois

EPA has violated Section

9.9

of the Act

by virtue of

failing

to

address

the

NOx

SIP

Call

Trading

Program for

Non-EGUs.

However,

IERG

fails

to

articulate,

beyond

speculation

(which

distinguishes

this

request from other more

firmly

grounded Board emergency

rulemakings

that were cited

to by

IERG),

that there is

in

fact

any

such

violation

or

that

there is

any

real

threat

as described.

14.

Similarly,

regardless

of the

classification

as

new

rulemaking

or

part

of

this

rulemaking

docket,

the Motion

for Expedited

Action fails to

satisfy

the

content

requirements

for

Board

regulatory

proposals

under

35 Ill. Adm.

Code 102.202.

Firstly,

IERG’s

proposal is not

accompanied

by a

statement

of

reasons

that includes all the

requirements

of 35 III.

Adm. Code

102.202(b).

Second,

the

proposal

is not accompanied by

a

petition

signed by at

least 200

persons,

as

required by

Section 28 of

the Act and 35

Ill. Adm. Code 102.202(g)

and 102.410(b).

Third,

the

proposal

is not

accompanied

by any

justification

for

the inapplicability

or

unavailability of

inapplicable

or

unavailable

information

pursuant

to 35 Ill.

Adm.

Code

102.202(k).

15.

The

Motion

for

Expedited Review

is not properly

inciuded

within the

current

rulemaking

docket

and thus

must

be seen and

treated as an attempt

to

establish a

new

regulatory

proposal.

The

Board

should

not allow this attempt

by

1ERG

to completely sidestep

all

requisite

requirements

for a

new

rulemaking

proposal,

which is

what

would

result

should

IERG’s

motions

4

Electronic Filing - Received, Clerk's Office, August 13, 2009

---

be

granted

in this instance.

The

scope of this

rulemaking

docket does not

include

the

scope

or

subject

matter

of the

Alternative

Proposal being

proffered

by

IERG.

The language

in

IERG’s

Motion

for Expedited

Action

is

not amendatory

to, or

modifying,

the

rulemaking

proposal

initiated

here by

the

Illinois EPA.

The

Alternative Proposal

instead

suggests language

of a

wholly

different

substance

and

thus

cannot be considered

in any

way

supported by the

Illinois

EPA’s

support

for its

own

rulemaking

proposal.

16.

The regulatory

proposal

submitted

by

the

Illinois EPA in support

of

R06-22

was

to

address minor clean-up

issues

not to establish

a new federal

program for this group

of

sources.

It

is true that the

present

proceedings

were

held in abeyance in recognition

of the

federal

court’s

review

of issues

that

concerned

CAIR.

However,

if the illinois EPA

were

to properly

address

CAIR for

the

group

of sources

identified

by

LERG

in

its Alternative Proposal,

a new

and

separate

regulatory

proposal that

complies

with the

Board’s

procedural rules for

regulatory

proposals

would

need

to

be

filed.

The

failure

of

IERG

to take

such appropriate action

should not

be

overlooked,

and

its

attempt

to

roll

its Alternative Proposal

into the present

rulemaking

should

not

be rewarded.

17.

A new

rulemaking

on

the topic

of the Alternative

Proposal, which the illinois

EPA

does

not believe is necessary,

should

seek to

amend Part 225. Such

an approach

would

be

consistently

situated

with

other

regulations

concerning

CAIR.

18.

Hence,

the

Illinois

EPA

would request

that

the

Motions

be denied

as

not

meeting

the

Board’s

procedural requirements

for

rulemakings.

19.

There

is no

emergency with

respect to

Non-EGIJs and

NOx SIP Call

requirements.

Section 27(c)

of

the Act

provides:

When

the

Board finds

that a situation

exists

which

reasonably

constitutes

a threat to

the

public

interest, safety

or

welfare,

the

Board

may adopt

regulations

pursuant

to

and in

5

---

accordance

with

Section

5.02

of the Illinois

Administrative

Procedure

Act.

Section

5-45

of the Illinois

Administrative

Procedure

Act provides

in

pertinent part:

(a)

“Emergency” means the

existence of any situation

that

any agency finds

reasonably

constitutes

a threat to

the

public interest,

safety,

or

welfare.

(b)

If any

agency finds that an

emergency exists that

requires

adoption

of a rule upon

fewer

days

than is required

by

Section 5-40 and

states in

writing its reasons

for that

finding, the agency may

adopt

an

emergency

rule

without

prior notice or hearing

upon

filing

a

notice of emergency rulemaking

with

the

Secretary of

State under Section

5-70.

The

notice shall

include

the

text of the emergency

rule

and shall

be

published

in the

Illinois Register.

Consent orders or

other court orders adopting

settlements

negotiated

by

an

agency

may be adopted under

this

Section.

Subject to

applicable constitutional

or

statutory

provisions,

an

emergency

rule becomes effective

immediately

upon

filing under

Section

5-65

or

at

a

stated date less than

10 days thereafter.

The agency’s

finding and

a

statement

of

the specific

reasons for the finding

shall be

filed

with the

rule. The agency

shall

take

reasonable

and

appropriate

measures to make emergency

rules

known

to the

persons

who may be

affected

by

them.

20.

When

USEPA

adopted

the

CAIR, it made

two amendments

to the requirements

for

the NOx SIP Call as

it pertained to

Non-EGUs, First, USEPA

stated

that it

would

no longer

carry

out

any

of the functions

set

forth for

USEPA under the NOx

SIP

Call. 40 CFR

51

.121(r)(l). Second, USEPA

required that states

satisfy

the

same

portion

of the

State’s

NOx

emission

reduction

requirements under the

NOx SIP Call

for

Non-EGUs.

40

CFR 51

.12l(r)(2).

The

CAR amendments

to the

NOx

SIP Call

did not,

however, require

that

Non-EGU5

be

included

in

the

CAIR NOx Ozone

Season

Trading Program.

21.

The

Illinois EPA

and the USEPA have

had

discussions concerning

how

the

outstanding

NOx SIP

Call

budget

requirement

for the 2009

ozone

control period can

be

met.

The USEPA

has

indicated

that

a demonstration

using reported

emissions

from

the

applicable

sources

demonstrating

that the budget

has been met

would suffice

in

lieu

of

having adopted

measures.

The

Illinois

EPA will

prepare and submit this

documentation

at the conclusion

of

the

ozone

season, once

the appropriate emissions

data is

available.

22.

The responsibility

of

determining

how federal

Clean

Air Act (“CAA”)

6

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

requirements

will

be

met

in

the

State

of Illinois

is the

responsibility

of the

Illinois EPA. Section

4

of

the

Act designates the

Illinois EPA as

the

agency

responsible

for

administering the

CAA

obligations

in

Illinois.

If

USEPA

finds

that a

state has failed

to

act

on

an obligation under

the

federal Clean Air

Act,

it sends

a

SIP Call or

notification

to

the

state identifying

the deficiency

and

starting

a

sanctions

clock

or

imposing a federal

implementation

plan (“FTP”).

USEPA

does

not prosecute individual

companies

when

a state has failed to adopt

an applicable

program.

23.

The Illinois EPA

has

not received

such a notification

concerning

the obligation

to

meet the

requirements in

Section

40 CFR

51.121 (r)(2);

to the

contrary,

the

Illinois

EPA has

received

from

USEPA

every indication

that a demonstration

using reported

emissions

from

the

applicable

sources

demonstrating

that

the budget

has

been

met

would

suffice.

Hence, on

the

federal

level

there

is no emergency either

to the State or to individual

companies for failure

to

address this requirement

through rulemalcing.

24.

1ERG

raises the specter

that Section

9.9 of the Act

requires that

the obligations of

40 CFR 51.121 (r)(2)

be met through

a

trading

program.

The Illinois

EPA does not

agree with

this interpretation

and

believes

that the

obligations

were

met when

the Board adopted

NOx

SIP

Call

rules for engines, kilns,

Non-EGUs,

and EGUs as set

forth in

35 III.

Adm.

Code 217,

Subparts

Q

(in part),

T,

U

and

W.

Furthermore,

there

is no indication

that

the General Assembly

could

have foreseen

the

sunset of the

NOx

SIP

Call

Trading

Program

and the adoption of

the

CAIR

program,

such that

Section

9.9 of the Act could or

should be

read or

interpreted

(as

IERG

attempts to

posit)

to require a

trading

program. In the

alternative,

if

Section

9.9

were

to be

interpreted

as requiring

that a

trading

program

be

adopted

to

address

the budget

obligation, the

burden

of

proposing

such a program

lies with

the

Illinois

EPA. Jndividual

sources cannot be

sued for lack of compliance

with

the

NOx

SIP Call Trading

Program

because

there is no

longer

a

7

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

NOx

SIP

Call

Trading

Program.

Thus,

there

is

no emergency

under

Section

9.9 of

the

Act.

25.

Furthermore,

1ERG has

provided

no evidence

that

any of

its members

have

been

subject

to

a

lawsuit

pursuant

to

the

provisions

of

Section

9.9

of

the

Act

or

provided

any

legal

support

for

the

hypothetical

proposition

that a

penalty

of

$10,000

per

day could

be

collected

based

on the

existence

of

a

program

that

is obsolete.

26.

IERG

also seeks

to

raise the

possibility

of enforcement

pursuant

to

the

Section

217.464

of the

Board’s

regulations

(35

Ul. Adm.

Code

217.464)

that requires

sources

to hold

allowances

equal

to

their emissions.

As

discussed

above,

USEPA

is no

longer

administering

the

NOx

SIP Call

program;

hence,

no

allowances

were

allotted

by

the Illinois

EPA

to sources

for the

2009

control

period

pursuant

to

this program.

Even if

such

allowances

were

allotted,

USEPA

has

stated that

the

Administrator

will no

longer carry

out any

of

the

functions

set

forth

under

the

NOx

SIP Call.

40

CFR

51.l21(r)(1). Under

the NOx

SIP

Call, USEPA

was

charged

with

the

responsibility

of

administering

all

aspects

of

the program,

including

populating

accounts

with

allowances,

checking

the

number

of

allowances

against

the

number

of tons

emitted,

and

deducting

the

applicable

number

of

allowances

from

the

accounts.

See,

R0l-17,

Adopted

Rule,

Final

Order,

Opinion

and

Order

of

the Board,

April

5,

2001.

Hence,

the

requirement

has

been

rendered

moot.

27.

IERG

also

states

that

the mere

existence

of the

requirement

in

a

regulation

is

a

problem

because

of

a Securities

and

Exchange

Commission

requirement

to report

any

potential

liabilities.

illinois

EPA does

not

agree that

17 C.F.R.

229.303

requires

the

reporting

of

minimally

impacting

and

arguably

immaterial

uncertainties

be they

deemed

off-balance

sheet

or

non-off-balance

sheet

arrangements

(liabilities

arising

out

of regulatory

actions)

that

are

as

of

yet

merely

speculative

in

nature

and

thus

not settled,

binding

or even

reasonably

likely

to

result.

8

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

While

the

Illinois

EPA

does

not

agree

with

IERG’s

interpretation

that the

existence

of an

obsolete

rule,

where

USEPA

has

clearly indicated

that

it

is no

longer

carrying

out

any of

the

functions

underlying the

requirement,

could

result

in

a liability,

IERG’s solution

would neither

solve

its hypothetical

problem

nor meet

the CAIR

approvability

criteria or the interests

of all

parties

affected

by

the

proposal (general

public, new businesses,

environment).

28.

As

indicated by the facts,

no

emergency

exists under

the

circumstances

present.

IERG

may argue in

terms of

hypothetical

possibilities and

speculative

fears,

but

such

unfounded

scenarios

do

not

meet the

statutory

requirements

of

an emergency

rulemaking, nor

has

IBRG

supported

its conclusions of

sanctions

and liability with

any facts.

29.

There is no

situation

that constitutes a

threat

to

the

public

interest,

safety, or

welfare. If

the

Board properly denies

the Motions, there will

be

no resulting

negative

environmental

effect.

30.

As

demonstrated

by

the

facts

that

the NOx SIP Call

Trading Program

is obsolete

and

thus the

affected

sources

are no

longer

subject

to sanctions or

potential

liability,

no

situation

exists

that reasonably

constitutes a threat

to the affected

sources, though

a threat

to a source

is

not provided

for under the Act’s

(5 ILCS 5/27(c)) or the

Illinois Administrative

Procedure

Act’s

(5 ILCS

100/5-45)

discussion

of emergency rulemakings.

Arguably

analogous

to

an

administrative

need, Citizens

for a Better Environment

v.

Illinois Pollution

Control

Board

(152

Ill.App.3d

105,

504 N.E.2d

166,

105

Ill.Dec.

297), the need to adopt

emergency

rules

in order

to

alleviate a

financial need, which

by

itselt

does

not threaten the

public

interest,

safety

or

welfare,

does not

constitute an “emergency.”

31.

While

the Board allowed that

a

financial

hardship

for a

particular industry

did

constitute an

emergency

in the adoption

of the

Emergency Rule

Amending 7.2

psi

Reid

Vapor

9

Electronic Filing - Received, Clerk's Office, August 13, 2009

---

Pressure

Requirement

in the

Metro-East

Area,

35

111.

Ada

Code

2

19.585(a),

the Illinois

EPA

agrees

with

Board

Member

Meyer’s

dissenting

opinion

in

that

“there

is a danger

created

when

classifying

a

rulemaking

as an

emergency

based

on

economic

hardship.

The

purpose

of

emergency

rule

makings

is not

to

offset

economic

hardship

to

business,

but

to protect

public

interest,

welfare,

and

safety.”

Furthermore,

financial

hardship

does

not

meet the

statutory

requirements

of an

emergency

rulemaking

as a financial

hardship

does not

equate

to

a threat

to

public

interest,

safety

or

welfare.

Be

that

as it

may,

IERG

presents

no

dollar

amount

in

support

of

a potential

financial

outlay

and

more

importantly

the

facts

demonstrate that

there

is

no

existing

situation

of financial

hardship

or threat

of possible

financial

hardship

as

the

program

is

obsolete

and thusly

the

potential

for sanctions

or liability

to

the affected

sources

is

obsolete

as

well.

32.

The CA

rule

in

pertinent

part

provides

that

States

may

include

Non-EGUs

in

the

CAIR

program

only

if the

program

is substantially

identically

to 40

CFR

Subparts

AAAA

through

JIlL 40

CFR 51.1

23(aa)(1).

The CAIR

rule

excludes

the

possibility

that the

State’s

allocation

methodology

may

allocate

allowances

in

excess

of the budget

provided.

1ERG’s

proposal

does that

by

revising

the

allowances

listed

in

Appendix

B. See,

JERG’s

Motion

for

Emergency

Rule, Exhibit

11. USEPA

has provided

a NOx

Non-EGU

budget

to

Illinois

of

4,856

allowances,

while

IERG’s

proposal

has provided

a NOx

budget

of

4,948

allowances.

While

IERG

points

to

later

events

that

might

increase

the

budget,

to date

USEPA

has

not provided

any

statements

or

direction

contrary

to

its past

indications

that

it will

not

increase

Illinois’

NOx

budget

for

Non

EGUs.

33.

Furthermore, due to

the

press

of

time,

the

Illinois

EPA

has not

had

an opportunity

in the

six days

provided

by

the

Board

to

submit

this

response

to

do a

lime by

line

analysis

of the

10

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

proposed rule,

or

provide a copy of

the draft rule to USEPA

for

review

to

ensure the

approvability of

the proposal.

That said,

the Illinois EPA notes

that there are at

least

three

areas

that

are

not

substantially

identical

to

USEPA’s

model

CAR

rule: inclusion of the low

emitter

exemption,

permitting

requirements and

definitions.

34.

Hence, if the

Board were to adopt an emergency amendment beyond

what

the

Illinois

EPA has proposed in

Attachment A, USEPA

would

not

approve it. There

can

be no

allocations

by

USEPA

until

it

approves any

amendments

as a SIP

revision. See,

72

Fed.

Reg.

58528 (October

16, 2007).

35.

In

addition, if

the rule being suggested by

IFRG

was not federally approved,

such

new

rule would

create a state rule

which

would be

inherently incompatible with the federal rule.

Instead of having

promulgated

a rule that

USEPA

has formally

declared obsolete,

see 70

Fed.

Reg. 25162, 25275

(May 12, 2005),

there

would be

a state

regulation

requiring

compliance with

a

federal

program where compliance

would

be impossible, due to the fact that federal

approval

would not be forthcoming

and thus the

requirements would

not

be moot.

36.

As the

proposed

rule does not meet

the statutory

requirements

of an emergency

rulemaking

and

is

not

approvable

by

USEPA, the Illinois EPA requests that

1ERO’s Motion for

Emergency

Rulemaking be denied.

37.

With respect to the Motion for Expedited Action, the Illinois

EPA incorporates all

earlier

arguments

concerning

the

lack

of

an

emergency and the lack of

support for an expedited

rulemaking. The Illinois

EPA

requests that

the motion be denied as

there is no emergency

situation

that

would

justify

shortchanging

the public participation process

on the major policy

issues contained

in

TERG’s proposal. There

is no emergency with respect

to liability nor is the

proposed rule federally approvable.

II

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

38.

The

Motion

for

Expedited

Action

states

that

it represents

a majority

of the

companies

affected

by

Subpart

U.

However,

TERG

does

not

represent

all

of the

affected

companies,

members

of

the general

public

or

environmental groups.

These

stakcholders

would

be consulted

if

a

CAIR

type

rulemaking

had

been

proposed

and

developed

by

the

Illinois

EPA,

as would

be

appropriate

for

a

regulatory

proposal

of this

scope

and

affect.

39.

1ERG proposes

to

continue

the

same

outdated

allocation

methodology contained

in

Subpart

U.

The

proposal

allocates

significantly

more

allowances

than

are

needed

by

existing

sources

for compliance,

allocates

allowances

to

some

sources

that

do

not

exist,

and

penalizes

new sources

(erects

a

barrier)

by requiring

them

to buy

allowances

from

existing

sources.

The

requested

budget

and

allocation

methodology is far in

excess

of

any

speculative

potential

liability

that

is

raised

by

IERG

and does

not

comport

with

public

policy

and

protection

of the

environment.

40.

Both

the

CAW

and

NOx

SIP

Call

rules

state

allowance

allocations

do

not

establish

a

property

right

for

the

source

receiving

the

allocations.

See,

40 CFR

§96.6(c)(7)

and

96.

106(c)(6).

41.

Hence,

the Illinois

EPA

would

request

that

the

Motions

be

denied

as not

meeting

the

criteria

for

an

emergency rulemaking.

III.

IN

THE

ALTERNATIVE, IF THE

BOARD

FINDS

AN

EMERGENCY

RULEMAKING

IS

APPROPRIATE,

THE

FOLLOWING

LAUNGUAGE IS PROPOSED

42.

in the

alternative,

if

the Board

finds

that

an emergency

exists

relative

to the

2009

control

season,

the

Illinois

EPA

has

proposed

language

in

Attachment

A

sunsetting

the

paper

requirement

to

hold

allowances

in

35

III. Adm.

Code

217.454(d).

The

Illinois

EPA’s

proposal

preserves

the requirements

to

have

appropriate

permitting,

recordkeeping

and

reporting

conditions

to

support

the

compliance

demonstration

that is

being

developed.

12

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

43.

Even

if

the Board

finds

that

exigent

circumstances

exist, in

order

to

proceed

on

a

rulemaking

adopting

CA1R for

Non-EGUs, the

Board

would

first have

to

find

in agreement

with

IERG

that Section

9.9

of

the

Act mandates

that

the

only way

the

NOx Budget

requirement

can

be

met

is

through

inclusion

in the

CAIR

trading

program.

As stated

above,

the

Illinois

EPA does

not believe

and

finds

no

support

that Section

9.9

of

the

Act mandates

this

result,

leaving

no

discretion

in

how

the

requirement

shall be met.

44.

Such

lack

of statutory

support notwithstanding,

if

the

Board

finds that there is

a

reason

to grant

IERG’s Motions

and amends

the CAR

rule to

include

Non-EGUs,

the Illinois

EPA

recommends

that the Board

open

a separate docket

and require

that

a regulatory

proposal

that comports

with

the requirements

of

Section 102.202 be submitted.

The

Board should

also

require that

amendments

to the

CAIR

program

take place in

35

Ill.

Adm.

Code

Part 225,

which

addresses

other

CAIR units.

45.

The

Illinois EPA does not support

a full repeal of

Subpart

U.

It

believes

that

Subpart

U

units

should be

treated the same as Subpart

W units

with respect

to prior

requirements.

The Board has

an opened docket

for

Subpart

W units at

R09-20 in which obsolete

requirements

have

been

sunsetted

but

maintained

in

case

prior

non-compliance

comes

to

light.

46.

In addition,

the

Illinois

EPA proposes

that any rulemaking

be limited

to

actual

existing

circumstances

and

for a

limited

time

period,

e.g., no budget greater

than

the

actual

emissions

and for

no longer

than

the 2011 control

period.

The Illinois

EPA would

highlight the

fact

that

the CAR

rule is

still in

flux in

light

of the

court’s

decisions in

North Carolina

v. EPA,

531 F.3d

896 (D.C. Cir.

2008)

vacating

Phase II

of

the rule,

and

that

there

are several new

National

Ambient

Air

Quality Standards

(“NA.AQS”)

that have been

promulgated

which

tighten

existing air quality

criteria for ozone,

PM2.5

and NOx.

13

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

IV.

CONCLUSION

The

basis

for

IERG’s

Motions is potential

legal/financial

liability which

the

Illinois

EPA

does

not

believe exists

and which has

not been

adequately

justified

or supported by

IERG

in

its

Motions.

It is

important for

the Board to

recognize that air quality

will

not

be

negatively

affected

if the

Motions

are

properly

denied

and the

Board

does

not proceed

with

an emergency

rulemaking,

since

Illinois sources

are easily meeting

the

NOx

Budgets provided

by

the NOx

SIP

Call.

14

Electronic Filing - Received, Clerk's Office, August 13, 2009

---

WHEREFORE,

for the

reasons

stated

above,

the Illinois

EPA

respectfully

requests

that

the

Board

deny

both the

Motion for

Emergency

Rule

and

the

Motion

for

Expedited

Action.

Respectfully

submitted,

ILLINOIS ENVIRONMENTAL

PROTECTION

AGENCY

By:___

Rachel

Doctors

Assistant

Counsel

Air

Regulatory

Unit

Division

of Legal

Counsel

Of

Counsel:

Annet Godiksen

Assistant

Counsel

Air

Regulatory

Unit

Division of

Legal

Counsel

1021 North

Grand Avenue,

East

P.O.

Box

19276

Springfield,

Illinois

62794-9276

217.782.5544

217.782.9143

(TDD)

217.782.9807

(Fax)

DATED:

August

13,

2009

15

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

BEFORE

THE

ILLINOIS

POLLUTION

CONTROL

BOARD

STATE

OF

ILLINOIS

COUNTY

OF

SANGAMON

)

SS

)

CERTIFICATE

OF

SERVICE

I, the undersigned,

an attorney,

state that I have served

electronically

the attached

RESPONSE

TO MOTION

FOR

EMERGENCY RULE

and MOTION FOR

EXPEDITED

ACTION

ON THE

ILL1NO1S

ENVIRONMENTAL

REGULATORY

GROUP’S

ALTERNATIVE

PROPOSAL

and

AFFIDAVIT

OF ROBERT

KALEEL

upon the

following persons:

John

Therriault, Assistant

Clerk

Timothy Fox,

Hearing Officer

Illinois

Pollution Control

Board

State

of Illinois

Center

100

West

Randolph, Suite

11-500

Chicago,

illinois

60601

Kathleen C.

Bassi

ScbiffHardin,

LLP

6600

Sears Tower

233

S.

Wacker Drive

Chicago,

IL

60606-6473

Dated:

August 13,

2009

1021 North

Grand

Avenue

East

Springfield, Illinois

62794-9276

(217) 782-5544

217.782.9143

(TDD)

Alec

M.

Davis

Illinois

Environmental

Regulatory

Group

3150 Roland

Ave.

Springfield, IL

62705-5776

Mitchell

Cohen,

Chief

Legal

Counsel

Department of

Natural

Resources

One Natural

Resources Way

Springfield,

Illinois

62702-1271

Katherine

Hodge

N.

Laflonna Driver

Monica

T.

Rios

Hodge

Dwyer &

Driver

3150 Roland Ave., P0

Box

5776

Springfield,

IL 62705-5776

ILLINOIS

ENVIRONMENTAL

PROTE

72

AGENa,

Annet Godiksen

Assistant

Counsel

Air Regulatory

Unit

Division

of

Legal

Counsel

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

ATTACHMENT “A”

Pursuant

to

35

III. Adm.

Code

102.202(1),

this proposed

amendment is

based

on the

most recent

version

of the rule

as published

on the Board’s

Web site or

as obtained

from

the

Clerk.

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

2 17.101

Measurement

Methods

217.102

Abbreviations

and

Units

217.103

Definitions

217.104

Incorp

orations

by

Reference

SUBPART

B:

NEW

FUEL

COMBUSTION EMISSION

SOURCES

Section

217.12

1

New

Emission Sources

SUBPART

C:

EXISTiNG FUEL

COMBUSTION

EMISSION SOURCES

Section

2

17.141

Existing

Emission

Sources

in Major Metropolitan

Areas

SUBPART

K:

PROCESS EMISSION

SOURCES

Section

217.301

Industrial

Processes

SUBPART 0:

CHEMICAL

MANUFACTURE

Section

217.38

1

Nitric

Acid

Manufacturing

Processes

SUBPART

Q: STATIONARY

RECIPROCATING

INTERNAL

COMBUSTION

ENGINES AND

TURBINES

Section

2 17.386

Applicability

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

2 17.388

Control

and

Maintenance

Requirements

217.390

Emissions

Averaging Plans

217.392

Compliance

2 17.394

Testing

and

Monitoring

2 17.396

Recordkeeping

and Reporting

SUBPART

T: CEMENT

KILNS

Section

217.400

Applicability

2

17.402

Control

Requirements

2 17.404

Testing

217.406

Monitoring

217.408

Reporting

217.410

Reeordkeeping

SUBPART U:

NO

CONTROL

AND TRADING

PROGRAM

FOR

SPECIFIED

NO

GENERATING

UNITS

Section

217.450

Purpose

217.451

Sunset

Provisions

217.452

Severability

217.454

Applicability

2

17.456

Compliance

Requirements

217.45

8

Permitting

Requirements

2 17.460

Subpart

U

NO

Trading

Budget

217.462

Methodology

for

Obtaining

NO

Allocations

2

17.464

Methodology

for

Determining

NO

Allowances

from

the

New

Source

Set-

Aside

2 17.466

NO

Allocations Procedure

for Subpart

U

Budget

Units

217.468

New

Source

Set-Asides for

“New”

Budget

Units

2

17.470

Early

Reduction

Credits (ERCs)

for Budget

Units

217.472

Low-Emitter

Requirements

2

17.474

Opt-In Units

2 17.476

Opt-In

Process

217.478

Opt-Tn

Budget

Units:

Withdrawal

from

NO

Trading

Program

2 17.480

Opt-In

Units:

Change

in

Regulatory

Status

217.482

Allowance

Allocations

to

Opt-Tn 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

Electronic Filing - Received, Clerk's Office, August 13, 2009

---

217.708

NO

Averaging

217.710

Monitoring

217.712

Reporting and

Recordkeeping

SUBPART W:

NO

TRADING PROGRAM FOR ELECTRICAL

GENERATiNG

UNITS

Section

217.750

Purpose

2 17.752

Severability

2 17.754

Applicability

217.756

Compliance

Requirements

217.758

Permitting Requirements

217.760

NO

Trading Budget

2

17.762

Methodology

for Calculating

NO

Allocations

for Budget

Electrical

Generating

Units

(EGUs)

2

17.764

NO

Allocations

for

Budget

EGUs

217.768

New

Source Set-Asides for “New” Budget EGUs

2 17.770

Early Reduction Credits for Budget EGUs

2 17.774

Opt-In

Units

2 17.776

Opt-In Process

217.778

Budget Opt-In

Units:

Withdrawal

from

NO

Trading Program

2 17.780

Opt-In

Units: Change in Regulatory

Status

2 17.782

Allowance

AJlocations

to

Budget

Opt-In Units

SUBPART

X: VOLUNTARY

NO

EMISSIONS REDUCTION PROGRAM

Section

217.800

Purpose

217.805

Emission Unit

Eligibility

217.8 10

Participation

Requirements

217.815

NO

Emission Reductions and the Subpart

X NQ Trading Budget

217.820

Baseline Emissions Determination

2

17.825

Calculation of

Creditable

NO

Emission Reductions

217.830

Limitations on

NO

Emission Reductions

217.835

NO

Emission

Reduction Proposal

217.840

Agency Action

2

17.845

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

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

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

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 2 111.

Reg. 17,

p.

101, effective

April

13, 1978; codified at

7

111.

Reg.

13609;

amended

in

R0l-9

at 25 III. Reg.

128, effective

December

26, 2000; amended

in

R0l-1 1

at

25 Ill. Reg.

4597,

effective

March 15,

2001;

amended in R01-16

and R01-17

at 25 flI. Reg.

5914, effective

April

17, 2001;

amended in R07-18

at 31111. Reg. 14254,

effective September

25,

2007;

amended in R09-_

at

Ill.

Reg.

effective

SUBPART

U:

NO

CONTROL

AND TRADING

PROGRAM

FOR

SPECIFIED

NO

GENERATING

UNITS

Section

217.45]

Sunset Provisions

The

provisions

of this Subpart

U,

except for requirements

of

Sections 2

17.454

(Applicability),

21

7.456(b),

(c),

and

(e)

(Permitting,

Monitoring, and

Recordkccping

and

Reporting),

and

Section

2 17.458

(Permitting’),

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

Ill.

Reg.

, effective

Electronic Filing - Received, Clerk's Office, August 13, 2009 (PC #14)

---

STATE

OF ILLINOIS

)

)

SS

SANGAMON

COUNTY

.)

AFFIDAVIT

I, Robert Kaleel,

upon my oath, do

hereby state

as follows:

1.

1 am employed

as the

Manager

of the Air Quality

Planning

Section for the Bureau

of Air of

the Illinois Environmental

Protection

Agency (Illinois

EPA).

2.

I

have

worked

at the Illinois

EPA for more

than

twenty-eight

years,

and have been

in

my

present

position since

2004, Prior

to

that,

I

was

the

Manager

of the

Air

Quality Modeling

Unit

in the Air Quality

Planning Section,

a position that

I held

for

more than fifteen years.

I

have also

worked

as a private

consultant

as

a specialist

in air quality

modeling.

As

Manager

of

the Air

Quality Planning

Section,

my responsibilities include

oversight

of

staff

that

provides

technical support for

regulatory

proposals needed

to address

air quality

issues

in Illinois.

I have been closely

involved

with the

development

of Illinois’ State

Implementation

Plans to

address the

5

PMi

and

ozone

nonattainment areas

in

Illinois.

3.

To the

best

of my

knowledge,

the

information

contained herein

is

factually

true

and

accurate.

FURTHER

AFFIANT SAYETH

NOT.

Subscribed

and sworn

to before me

this

of

/Iuq(aoo9.

Notary

Public

.

omcta

1

L

SEAL

BRENDA

SOEHNER

NmvPuBuc,smmopIwNals

t

MYQMMFSSIQNflpIq

1144039

[NAME]

Electronic Filing - Received, Clerk's Office, August 13, 2009