Southern

Illinois

Power Cooperative

11543

Lake

of Egypt

Road

Marion,

IL

62959

(618)

964-1448

Fax

(618)

964-1867

August

18,

2009

RECEVED

CLERKS

OFFICE

AUG

‘2o

2009

STATE

OF

ILUNOIS

Pollution

Control

Board

Dr.

Sundar

Lin

Presiding

Board

Member

Illinois

Pollution

Control

Board

James

R.

Thompson

Center

100

West

Randolph

Street,

Suite

11-500

Chicago,

Illinois

60601

Re:

R09-20,

In

the

Matter

of

NOx

Trading

Program

Sunset

Provisions

for

Electric

Generating

Units,

Amendments

to

35

Ill.Adm.Code

Part

217,

Subpart

W

Dear

Dr.

Lin:

Although

the Southern

Illinois

Power

Cooperative

(“SIPC”)

did

not

appear

in

person

at the

hearings

in

this

matter,

SIPC

did

participate

in

the

Illinois

Environmental

Protection

Agency’s

(“Agency”)

outreach

efforts

prior

to

its proposal

of

this

amendment.

See,

e.g.,

the

attached

email

between

SIPC

and

the

Agency

regarding

this

proposed

rule.

SIPC

is an

entity

affected

by

the

proposed

rulemaking.

SIPC

operates a coal-fired

power

plant

located

near

Marion,

Illinois,

and

is

subject

to

the

Nitrogen

Oxides

(“NOx”)

Budget

Trading

Program,

35

Ill.Adm.Code

Part

217,

Subpart

W

(“Subpart

W”)

as

well

as

the

Illinois

Clean

Air

Interstate

Rule

(“CAIR”),

35

I1I.Adm.Code

Part

225,

Subparts D

and

E, and

the

Illinois mercury

rule,

35

Ill.Adm.Code

Part

225,

Subpart

B.

SIPC

is

proud

of

its

efforts

to remain

in

compliance

with

all

of these

rules.

SIPC

generally

supports

the

Agency’s

proposal

to

sunset

the provisions

of

the NOx

Budget

Trading

Program

and

agrees

that

the

duplicative

recordkeeping

and

reporting

created

by

the

NOx

Seasonal

CAIR

are

unnecessary

and

burdensome.

However,

as SIPC

told

the

Agency

during

outreach,

SIPC

believes

that

if

the

Board

is

going

to sunset

Subpart

W,

it

should

do it

completely.

That

is,

the

Board

should,

in

this

rulemaking,

address

the

distribution

of

NOx

Budget

allowances

remaining

in

the

Agency’s

account.

Mr.

David

Bloomberg,

Touchstone

Energy’

The

power

of

human

connections

---

testifying

on behalf

of

the

Agency,

stated

that the

allowances

remaining

in

the Agency’s

NOx

Budget

account

cannot

be distributed

“because

the

current

regulations

do

not provide

for such

distribution.”

David

Blooinberg,

Testimony

(July

10,

2019),

p.

2. Since

the

authority

to

distribute

allowances

lies

in

the Board’s

rule,

then

the

Board

can

alter

that

authority

in

this

sunset

rulemaking

by

providing

that

the

Agency

distribute

all remaining

NOx

allowances.

To

accomplish

this,

SIPC

suggests

the

following

language:

The

provisions

of

this Subpart

W

shall

not

apply

for any

control

period

in

2009

or

thereafter.

All

allowances

remaining

in the

Agency’s

accounts

shall

be

distributed

pursuant

to

the provisions

of Section

217.764(b)(4)(A)

and

(B)

of

this Subpart.

Noncompliance

with

the

provisions

of this

Subpart

that

occurred

prior

to 2009

is

subject

to the

applicable

provisions

of

this

Subpart.

If

the Board

does

not

address

distribution

of

the

remaining

NOx

Budget

allowances

in this

rulemaking,

then

either

the

Board

will

have

to hold

a second

rulemaking

to address

this

deficiency

in

this proposed

rule

or the allowances

will,

effectively

through

neglect,

be

subject

to the

retirement

provisions

of

the

CAIR.

See

35 Il1.Adm.Code

§

225.545(i)

and 225.575(b)(4).

As

is

evident

by

the

structures

of

Subpart

W

and the

CAIR,

Subpart

W

generally

provided

for

distribution

of excess

allowances

to

existing

electric

generating

units,

while

the

CAIR

focuses

on the

retirement

of excess

allowances.

These

are

diametrically

opposed

means

of

addressing

excess

allowances.

The

Agency’s

direction

in

Subpart

W should

continue

to

apply

to the

remaining

NOx

Budget

allowances

rather than

allowing

the Agency

to

apply

the

direction

of the

CAIR

by

not

addressing

disposition

of

the

remaining

allowances

at this

time.

This

issue

is properly

before

the

Board

at

this

time,

as

the

question

of

the

unallocated

allowances

was

raised

at the first

hearing

and

addressed

in testimony

at

the

second

hearing.

See

Hearing

Transcripts,

June

18, 2009,

and

July

23,

2009,

and Pre-Filed

Testimony

of David

Bloomberg;

see also

Opinion,

R06-

26 (August

23, 2007)

(addition

of

Subpart

F and

renaming

of the

Agency’s

proposed

rulemaking

without

Subpart

F addressed

at any

hearing,

though

it

was

included

at

First

Notice).

There

are

a total

of

---

at least

1,212 New

Source

Set-Aside

(“NSSA”)

allowances

remaining

plus a

number

of

allowances

from

the

general pooi

not distributed

due

to rounding.

See Agency

Trading

website:

<

www.epa.state.il.us/air/nox/>

and

<www.

epa.state.il.us/air/nox/allowances.htrnl>.

In 2007

and 2008,

the

Agency

set aside

614 allowances

into the

NSSA.

35 Ill.Adm.Code

§

217.760(a)(2).

Only

16

allowances

were

distributed

from the

NSSA

in 2007,’

and none

were distributed

in

2008,

leaving

1,212

undistributed

allowances

in the

NSSA.

For

these

reasons,

it

is

timely and

appropriate

for

the Board

to address

the

issue

of the

undistributed

NOx Budget

allowances

remaining

in

the

Agency’s

account,

and

SIPC

requests that

the Board

amend

the proposed

rulemaking

with

the

addition of

direction

to

the Agency

to distribute

the remaining

NOx

Budget

allowances

as

set

forth

above.

Respectfully

Submitted,

Attachment

cc:

Clerk,

Illinois Pollution

Control

Board

Kathleen

Crowley, Hearing

Officer

Rachel

Doctors,

Illinois

EPA

This

information

was on the

Agency’s

website

shortly

after the June

1

8

th

hearing

but

has

since

apparently

been

removed.

Leonard

F.

Hopkins,

P.E.

---

rdHokns

From:

Leonard

Hopkins

Sent:

Tuesday,

March 17,

2009 3:31 PM

To:

‘Rob.Kaleel©lllinois.gov’

Cc:

‘iergstaff©ierg.org’

Subject:

FW: Rulemaking

Proposal

to

Sunset

the NOx SIP Call for

EGUs

Hi

Rob:

I think

this would

be a fine time

to

correct

that oversight, follow

the previous example,

and insert language

to return

those

allowances

to

the

EGUs!!

Leonard

Leonard F. Hopkins,

P.E.

Fuel Procurement

& Compliance

Manager

Southern

Illinois Power Cooperative

11543 Lake

of Egypt Road

Marion, IL

62959

(618) 964-1448

x

268

lhopkins@sipower.org

From: Kaleel,

Rob

[mailto:Rob.Kaleel©Illinois.gov]

Sent: Tuesday,

March 17, 2009

3:16 PM

To: Leonard

Hopkins

Subject: RE: Rulemaking

Proposal to Sunset

the

NOx SIP

Call for EGUs

Hi Leonard.

As

I understand it, there

is no provision in

our CAIR

rule that allows us

to

return leftover

set aside

allowance

to EGUs.

It’s

also my understanding

that our NOx

SIP Call

rules

only

allowed

us to do that

from 2004 -2006.

As of now,

we have no

plans for the leftover

set aside allowances.

From:

Leonard

Hopkins

[mailto:lhopkins@sipower.orgj

Sent: Tuesday,

March 17, 2009 1:25

PM

To: Kaleel, Rob

Subject: RE:

Rulemaking Proposal

to

Sunset the NOx

SIP Call for

EGU5

What

happens

to

the NOX

set aside allowances

that weren’t used by new

sources? In years prior

to

2008,

these

were

returned to

the

EGUs.

Has

or will

that

be

done?

Thanks!

Leonard F.

Hopkins, P.E.

Fuel Procurement

& Compliance

Manager

Southern

Illinois Power Cooperative

11543

Lake

of Egypt Road

Marion,

IL

62959

(618) 964-1448

x 268

lhopkins(sipower.org

1

---

From:

Kaleel,

Rob

[mailto:Rob.Kaleel@Illinois.gov]

Sent:

Monday,

March 16, 2009 4:59

PM

To:

abigail.

rector@exeloncorp.com;

arnold

.jenkinsjr©duke-energy.com;

bill.murray@cwlp.com;

bruceparker@electricenergyinc.com;

Bsteinhauser@ipr-us.com;

Ci

.Saladino©dom

.com;

cjacobsen@tenaska.com;

dale.davis@exeloncorp.com;

dave.farris@cwlp.com;

dfcole@ameren.com;

dfurstenwerth@reliant.com;

Dianeieopold@dom.com;

djmurphy@pplweb.com;

gkunkel@tenaska.com;

glenn.calloway@calpine.com;

Glenn.RJohnson@dom.com;

james.eiseman@dynegy.com;

james.r.kipp©dynegy.com;

jason.goodwin@calpine.com;

Jim idzorek@nrgenergy.com;

Jason McLaurin; Joseph

.C.Wood©dom

.com;

jrtaylor@cordovaenergy.com;

jshimshock@reliant.com;

kirk.millis@dynegy.com;

kjanderson@ameren.com;

laboyer@pplweb.com;

Larry.Waite@dynegy.com;

lcarlson@tenaska.com;

Leonard Hopkins;

Lonnie.A.Grote@dynegy.com;

mcgriggs©du

ke

energy.com;

mlmenne@ameren.com;

pcgrigsby@duke-energy.com;

pj.becker@cwlp.com;

randy.specht@exeloncorp.com;

rfisher@ppi.coop;

robeit_crowe@dynegy.com;

roger.stegeman@sweci.com;

russel.gilbert@sweci.com;

schy.willmore@cwlp.com;

smiller@mwgen.com;

sphart@cordovaenergy.com;

stansander@dynegy.com;

ted_Iindenbusch@dynegy.com;

terrylarbes@electricenergyinc.com;

timothy.

kelley@dynegy.com;

tjonas@tenaska.com;

vbrisini@reliant.com; wendell_watson@dynegy.com;

Asplund, Bob;

Bassi,

Kathleen; Kolaz, Dave

Subject:

Rulemaking Proposal

to Sunset the NOx

SIP Call for EGUs

Attention

CAIR Contacts:

The Agency

intends to submit

the attached

proposal to the Illinois

Pollution Control Board

in the next

few weeks

with a

request to

expedite

the rulemaking.

The intent

of

this

proposal is

to

sunset

the

provisions

of the NOx SIP

Call

(Subpart

W) affecting

electric generating

units, as these

provisions have

been superseded by

Illinois’ CAIR

rule. We

don’t believe

this proposal is

controversial so

we will not initiate a

formal outreach

process before we submit

this to the Board. Please

let me

know

if you

have any questions or

concerns.

Rob

Kaleel

Air

Quality

Planning

Bureau

of

Air

2