ILLINOIS POLLUTION CONTROL BOARD November 2I, 2013 ILLINOIS POWER HOLDINGS, LLC and ) AMERENENERGY MEDINA VALLEY ) COGEN, LLC; ) ) Petitioner, ) ) AMEREN ENERGY RESOURCES, LLC, ) ) Co-Petitioner, ) ) v. ) ) ILLINOIS ENVIRONMENTAL ) PROTECTION AGENCY, ) ) Respondent. ) DISSENTING OPINION (byD. Glosser): PCB 14-10 (Variance- Air)

I respectfully dissent from the majority opinion in this case. Iwould nothave granted the variance as I fmd that Illinois PowerHoldings, LLC (IPH), AmerenEnergy Medina Valley Cogen, LLC (Medina Valley), and Co-Petitioner Ameren Energy Resources, LLC (AER) (collectively, petitioners) have not established that an arbitrary or umeasonable hardship exists that warrants a variance. Section 35(a) oftheEnvironmental ProtectionAct (Act) provides inpertinent part: The Board maygrant individual variances beyond the limitationsprescribed in this Act, wheneverit is found, upon presentation ofadequate proof, that compliance with any rule orregulation, requirement or order ofthe Board would impose an arbitrary orumeasonable hardship. However, the Board is not required to find that an arbitrary orumeasonable hardship exists exclusivelybecausethe regulatory standard is underreview and the costs ofcompliance are substantial and certain. (415 ILCS 5/35(a) (2012)). Case law has evolved establishing that the Board must weigh anyhardship against injury to the public orthe environment. Marathon Oil Co. v. EPA, 242 Ill. App. 3d 200,206, 610 N.E.2d 789, 793 (5thDist. 1993). However, as the court stated in Marathon, We do not meanto indicatebyouropinion that the Board should, in effect, give advisory opinions topotential polluters orencourage potentialpolluters to request variances for the solepurpose oftesting the Board to see ifthe Board canbe persuaded to ease its rules. We see nothing wrong in the Board establishing a 

# 2-l ATTACHMENT---2 requirement that the petitionerat leastmake aprima facie casethat it would suffer an arbitrary and unreasonablehardship bycomplying with the Board'srule before the Board isrequired to examine the adverseimpact thevariance wouldhave on the environment (emphasis added). 

### Id. at 794. Substantial case law also exists indicating that where a hardship is the result ofdecisions by the petitioner, including business decisions, the hardship is "self-imposed" and a variance is not granted. See e.g. Ekco Glaco v. !EPA, PCB 87-41 (Dec. 17, 1987). As the parties and the majority opinion describe this history extensively, I will notrepeat it here. However, as discussedbelow, I fmd that no hardship exists, so there is no need to examine the issue of whetherornotthe hardship is "self-imposed". The threshold question, based on both the statute and the case law, is whetherornot the petitionerhas established that an "arbitrary orunreasonable" hardship exists. The next question, assumingthat some hardship exists, is whetherthehardship is a result ofthepetitioner's own actions, such that the hardship is "self-imposed" and not "arbitrary orunreasonable". The petitioners inthis case are IPH, Medina Valley, and AER. Themajority, appropriately, does not find that Medina Valley suffers a hardship. Medina Valleyis a part ofthe variancebecause it takes ownership ofclosed plants that are still a partoftheMulti Pollutant Standard (MPS) group. Because Medina Valley's facilities are closed, and will remain closed, there are no emissions subject to emission limits. Thus, I agree no hardship canbe found for Medina Valley. As to AER, I concede that under the priorvariance AER was found to be suffering a hardship. See AmerenEnergy Resources v. IEPA, PCB 12-126. But, as AER will no longerbe an ownerofthe facilities, subject to the rule ofgeneral applicability, AER will have no compliance obligations. At worst, ifthe variance is not granted and AER retains possession of thefacilities, AERwill continueundertheprior variance. Therefore, I cannot find a hardship for AER in this varianceproceeding_ This leaves onlythe petitioner, IPH, required to at least establish aprima facie casethat a hardship exists. Themajority fmds that, "upon acquiring the operating MPS plants, IPH would face a hardship. Even with Medina Valley'scontinued non-operation ofthe Meredosia and Hutsonville stations, IPH must completetheNewton Flue Gas Desulfurizationproject to bring about MPS Group compliance withthe MPS." The majority finds that The proposed variance would allow IPH to staythe course with that means [sic] ofultimateMPS compliance, locking inthebenefit ofthe AER's expenditures andprogress on the NewtonFGD projectpursuant to the variance granted inPCB 12-126. Without a variance, IPH wouldhave to accelerate completion ofthat project, which, according to petitioners, would still not bring the MPS Group into compliance with theMPS 2015 S02 emission rate, requiring plantclosures. Illinois PowerHoldings LLC eta/v. IEPA, PCB 14-10, slip op. at 92 (Nov. 21, 2013). IPH is a limited liability companyowned directlybyIllinois Power Holdings II, which is a directly and whollyowned subsidiary ofDynegy, Inc. Affidavit ofMario E. Alonso (Pet. Exh. 

# .. -3 2) at 2. IPH was formed to assume the equity interest in Ameren's operating merchant generating stations pursuant to a March 14, 2013 transaction agreementbetween Ameren and IPH. 

### !d. Following closing underthe transaction agreement, IPH will own all ofAmeren's interest in Ameren Energy Generating Company and Ameren EnergyResources Generating Company, and other AER subsidiaries. 

### !d. Dynegy's subsidiaries, including IPH, are independent legal entities with separate assets and liabilities. 

### !d. Underthe transaction agreement, AER'scorporate structure would change. Ameren would "initiate a reorganization ofAER," creating "New AER" to accept the active generating facilities in the MPS group, namely, the Coffeen, Duck Creek, E.D. Edwards, Joppa, and Newton plants. Pet. at 4, citing Pet. Exhs. I, 2. Inturn, IPH would acquire New AER and, with it, the five active generatingplants. 

### !d. MedinaValleywould acquire the generating stations that the PCB 12-126 order granting the AER variance requires to remain shuttered for the term ofthe variance, namely, the Meredosia and Hutsonville stations. 

### !d. Thus, the record is clearthat IPH was created for the solepurpose oftaking overthe AER facilities, and IPH has not provided any capital for those facilities. The majority attempts to explain why the facts ofthis case are legallydistinguishable from those cases where a hardship was found bythe Board or courts. See generally slip op. at 94-98. Ibelieve the majoritycompletelyfails to do so. I fmd the facts ofthis request are very like the facts in theWillowbrookMotel Partnership v. PCB, 135 Ill. App. 3d 343,481 N.E.2d I032 (Ist Dist. I985) and IEPA v. Lindgren Foundry, PCB 70-1 (Sept. 25, 1970). Therefore, consistent with thosepriordecisions, I would deny the variance. The majority distinguishes this requested variance from Willowbrook in three ways: I) no claimed fmancial losses ifthe variance is not granted; 2) a different "burdenofcompliance"; and3) the nature ofthe environmental impact. See slip op. at 96-97. These factual distinctions are without meaning. The facts ofWillowbrook are that thepetitionerwas a partnership established to develop land as well as owning and operating several hotels inthe Midwest. Willowbrook Motel Partnership v. IEPA, PCB 81-49, slip op. at I (July 14, 1983). The company sought a variance to hook-up to an overloaded sewage treatmentplant "onrestricted status" to prevent any additional sewage flows. Thepartnership claimed: That denial ofvariance [sic] wouldresult in an arbitrary orunreasonable hardship dueto tli.e loss of job opportunities and the concomitant income andtaxes to the State, the loss ofsales and enhanced propertytaxes. 

### !d. at 3 The Board found that these "hardships" were expected consequences ofthe restricted status of the sewer system, and the benefits outweighed the adverse environmental impact. 

### !d. The Board further found that thepartnership's claimsofeconomic loss were simply a delayin an investment opportunity andnot an arbitrary orunreasonablehardship. 

### !d. at 4. The court affirmed the Board'sdecision stating that the "hardship here consists ofa temporaryprohibition against intense development oftheproperty." Willowbrook, 135 Ill. App. 3d 349. InLindgren, petitioners were new owners ofa foundry that the prior ownerhad operated "inplain violation" ofparticulate emission standards, and thenclosed. Lindgren Foundry, PCB4 70-1, slip op. at I. The new owners sought to reopen the foundry immediately and operate it in violation ofemission standards for sevenmonths while they obtained and installed a scrubberto come into compliance. 

### Jd. at 4. The new owners' hardship claims were that they would not open the facility without the variance, and Joss ofprofits during a shutdown would make the whole venture financially impossible. 

### I d. The Board noted that ifa variance were granted every time it cost money to comply with the law, "nearly everybody would qualify" and "permission to violate the law while making corrections cannot begranted automatically." 

### I d. at 6. The Board went on to state that: it is therefore essential inpassingupon a variance petition to compare the good effects ofcompliancewith the bad. 

## * * *The words 'unreasonable' and 'arbitrary' plainly suggest that the Board is not to examine in every case whether ornot compliance would be a good thing. To do so would completelydestroy the force ofthe regulation and encourage excessive litigation." 

### I d. The new owners claimed that a seven-month delay in resuming operations would make it impossible fmancially to reopen the foundry, and that they would lose $70,000 in sunk costs. Lindgren Foundry, PCB 70-1, slip op. at 8. The Board was "not greatly impressed"bythat Joss, which it found was the full extent ofthe owners' losses, since theycould "cutand run if prospects dim." 

### I d. "By investing money withreasonto know it would be lost absent a favorable decision," the Board added, the owners had "createdtheir ownhardship." 

### I d. at 8. The Board emphasized that "[a] petitionermay notbootstrap himselfinto apreferred position by spending money frrst and then claiming hehas been injured." 

### I d. Lindgren and Willowbrook offerclear indications that entitiespurchasing facilities have no special status when seeking a variance from a regulation ofgeneral applicability and must establish a hardship exists. As Iindicated above, IPH is an entity created to take control of AER'sproperties, and IPH argues that not allowingitto operate with a variance is an arbitrary or unreasonable hardship. IPH has made abusiness decision to assume ownership ofAER's facilities, facilities that are not in compliance with the rule ofgeneral applicability. Failure of any entity to meet therequirements ofarule ofgeneral applicability might result in lostjob opportunities; however, such a consequence alone is not an arbitrary orunreasonable hardship underLindgren. IPH does not currently operate a facility subject to the MPS and thus its only hardship, ifthe variance were denied, is that it still would not operate a facility subject to an MPS. IPH could delay its business opportunity, while seeking otherregulatory relief; therefore, under Willowbrookthis is not an arbitrary orunreasonable hardship. As the variance statute states "theBoard isnotrequired to find that an arbitrary or unreasonable hardship exists exclusivelybecause the regulatory standard is underreview and the costs ofcompliance are substantial and certain." 415 ILCS 5/35(a) (2012). The facts in Willowbrook and Lindgren are strikingly similar to the facts here. This long-standing Board precedent establishes that there is no arbitrary and unreasonable hardship where apurchaser of an out-of-compliance company shows onlythat a variance is needed to make the facilities profitable. Therefore, Ibelievethat the case law and clear statutory language support my position that !PH hasnot established aprima facie case that an arbitrary orunreasonable hardship exists.5

The majority also found that grantingthe variance would result in an environmental

. benefit and weighed that fact against anyperceived hardship for IPH. I am not convinced that an environmental benefit exists and sharethe concernsraised bythe Citizens Groups (see e.g. Obj. at 9, PC 2337 at 9). I have reviewed theUSEPA's report concerning health effects ofincreased 

### S01 emissions and find that reporttelling. See IntegratedScienceAssessment for Sulfur OxidesHealth Criteria, EPA-600/R-08/047F (Sept. 2008). I have grave concerns about the impact of even a temporary increase in 

### S01 emissionnearthe AER facilities. EventhoughI am not convinced there is an environmental benefit, I find thatthe weighing ofany suchbenefit is inappropriate in this case. As made clearin Marathon Oil Co. v. EPA, 242 

### Ill. App. 3d 200, 206, 610N.E.2d 789, 793 (5th Dist. 1993), before the Boardreaches theconsideration of environmental benefit, aprima facie case that a hardship exists must be established. As discussed above, none ofthe petitioners in this proceedinghave established the existence ofa hardship, and therefore, anyperceived environmental benefit is irrelevant. For all these reasons, I respectfully dissent from themajority opinion.

Deanna Glosser I, John T. Therriault, Clerk ofthe Illinois Pollution Control-Board, certifythat the above dissenting opinion was submitted onNovember21, 2013.

JohnT. Therriault, Clerk Illinois Pollution Control Board**~-** 

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### BEFORE THE ILLINOIS POLLUTION CONTROL BOARD ILLINOIS POWER HOLDINGS, LLC and AMERENENERGY MEDINA VALLEY COGEN,LLC;

AMEREN ENERGY RESOURCES, LLC Petitioners,

Co-Petitioner,

v. ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, Respondent. ) ) 

### ) ) 

### ) ) ) ) 

### ) PCB No. 14-10 ) (Variance- Air) ) 

### ) ) ) ) ) ) 

### NOTICE OF FILING To: John Therriault, Clerk Carol Webb, Hearing Officer Illinois Pollution Control Board James R. 

### Thompson Center 100 WestRandolph Street, Suite 11-500 Chicago, illinois 6060I 

### John.Therriaultiallllinois.Gov Carol.Webb@.lllinois.Gov GinaRoccaforte Assistant Counsel Division ofLegal Counsel Illinois Environmental Protection.Agency 1021 N. Grand Ave., East P.O. Box 19276 Springfield, IL 62794-9276

PLEASE TAKE NOTICE that we have today electronically filed with the Office ofthe Clerk ofthe Illinois Pollution Control Board a CERTIFICATE OF ACCEPTANCE, copies of which are herewith servedupon you.

ForIllinois PowerHoldings: ForAmerenEnergy MedinaValley:

# ~4~ WilliamD.lngersOll

ATIACHMENT---

### Dated: December20, 2013 

### BROWN, HAY & 

### STEPHENS, LLP Claire A. 

### Manning 

### William D. Ingersoll 205 S. Fifth Street, Suite 700 P.O. Box 2459 Springfield, IL 62705-2459 (217) 544-8491 Fax: (217) 241-3111 

### SCIDFF HARDIN, LLP Renee Cipriano Amy

### Antoniolli 233 South WackerDrive, Suite 6600 Chicago, lllinois 60606 (312) 258-5550 Fax: (312) 258-5600CERTIFICATE OFACCEPTANCE On December2, 2013 Amcrcn Corporation andIllinois Power Holdings, 

### LLC closed the**trnns~ction rcfcr~.nccd**  in theopLllonIUldorderoft!Je Illinois Pollution Control Boardin docketPCB 14·10, datedNovember21, 2013. l (We),**D~niel** P. Thompson/Martin J. Lyons j boviog read the opinion and orderof

### thefllinois PoUutionControl Board

### in docket PCB 14-10, dated Novcmber21, 2013, 

### understand and accept the opinion and order, rcnJi7jngthat this

### accepta."lce reeders all tenns and conditions oflhovariance set forth in that order blading and epforceable.

!LUNO!SPO'WER

### HOLDINGS, LLC

Date: A.i',lDRENENF.RGY MEDINA V ALI.EY

### CUUEN,.LLC 

## ;, _,

Tltk



### Date:

### CERTIFICATE OF SERVICE I, the undersigned, certify that on this 20th day of December, 2013, I have served electronically the attached CERTIFICATE OF ACCEPTANCE, upon the following persons: 

### 1

ohn Therriault, Assistant Clerk Illinois Pollution Control Board James R. Thompson Center Suite 11-500 1

00 West Randolph Chicago, Illinois 60601 John.Therriault@lllinois.Gov Carol Webb, HearingOfficer Illinois Pollution Control Board 1021 North Grand Avenue, East Springfield, Illinois 62794-9276 Caroi.Webb@IIIinois.Gov and by first class mail, postage affixed upon: Gina Roccafot1e, Assistant Counsel Division ofLegal Counsel 111inois Environmental Protection Agency 1021 North Grand Avenue, East P.O. Box 19276 Springfield, Illinois 62794-9276 Faith E. Bugel Andrew Annstrong Environmental Law & 

### Policy Center 35 E. WackerDrive Chicago, Illinois 60601



### BROWN, HAY & 

### STEPHENS, LLP Claire A. Manning William D. Ingersoll 205 S. Fifth Street, Suite 700 P.O. Box 2459 Springfield, IL 62705-2459 (21 7) 544-8491 Fax: (217) 241-3111 

### SCHIFF HARDIN, LLP Renee Cipriano Amy Antonio

### IIi 233 South Wacker Drive, Suite 6600 Chicago, Illinois 60606 (312) 258-5550 Fax: (312) 258-5600 

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# PUBLISHED BY JESSE WHITE • SECRETARY OF STA}] ATTACHMENT-L"--"-ILLINOIS REGISTER 2464 14 ENVIRONMENTAL PROTECTION AGENCY NOTICE OF PUBLIC INFORMATION The Illinois Environmental Protection Agency (Illinois EPA) Bureau ofAir is accepting public comment on a variance granted by the Illinois Pollution Control Board (Board) to Illinois Power Holdings, LLC (!PH) and AmerenEnergy Medina Valley Cogen, LLC (Medina Valley) for the purpose ofsubmitting such variance to the United States Environmental Protection Agency (USEPA) as arevision to the Illinois State ImplementationPlan (SIP) under the Clean Air Act (CAA), 42 USC§ 7401 et seq. In order for a variance to be considered for approval as a revision to the SIP, the State must submit it in accordance with the requirements of40 Code ofFederal Regulations (CFR) § 5J.J 04. On July 22, 2013, !PH and Medina Valley, along with Ameren Energy Resources, LLC (AER), filed a Petition for Variance with the Board. Illinois Power Holdings, LLCandAmerenEnergy Medina Valley Cogen, LLC, andAmerenEnergyResources, LLCv. Illinois Environmental ProtectionAgency, PCB 14-10. !PH and MedinaValley requested a variance for the electrical generating units in AER's Multi-Pollutant Standards (MPS) Group from both the 2015 and 2017 sulfur dioxide (S02 ) emission rate provisions ofthe Illinois MPS, 35 Ill. Adm. Code 225.233, specificallythe S02 emission standards set forth in Section 225.233(e)(3)(C)(iii) and (iv). This variance replaces the variance from the MPS for the same plants that AERcurrently holds. AmerenEnergyResources v. Illinois EnvironmentalProtectionAgency, PCB 12-126. !PH, an indirect subsidiary ofDynegy, Inc., has acquired ownership ofthe Ameren operating merchant generating stations, namely the Coffeen Energy Center located in Montgomery County, the Duck Creek Energy Center located in Fulton County, the E.D. Edwards Energy Center located in Peoria County, the Joppa Energy Center located in Massac County, and the Newton Energy Center located in Jasper County, under a transaction agreementbetween Ameren and IPH. Medina Valley has acquired the shuttered generating stations,the MeredosiaEnergy Center in Morgan County and the Hutsonville Energy Center in Crawford County. On November 21,2013, the Board granted the variance to IPH and Medina Valley from the applicable requirements of35 Ill. Adm. Code 225.233(e)(3)(C)(iii) for a period beginning December 31,2015, until December 31,2019, and 35 Ill. Adm. Code 255.233(e)(3)(C)(iv) for a period beginning January I, 2017, until December 31, 2019, subjectto certain conditions. The MPS is a multi-pollutant comprehensive approach to reduce emissions ofnitrogen oxides, SOz, and mercury. Section 225.233(e) is an approved rule ofthe Illinois SIP. On July 6, 2012, the USEPA approved the Illinois plan submitted to address the visibility protection requirements ofSection !69A ofthe CAA, 42 U.S.C. § 7491, and the Regional Haze Rule, as codified in 40 CFR 

### § 51.308. See, 77 Federal Register 39943 (July 6, 2012). The Illinois plan includes Section 225.233(e). Accordingly, since thepetition for variance soughtrelieffrom provisions ofthe MPS and such reliefwas granted by the Board, the variance must be submitted to the USEPA for

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## ....ILLINOIS REGISTER ENVIRONMENTAL PROTECTIONAGENCY NOTICE OF PUBLIC INFORMATION approval as a SIP revision addressing the visibility requirements under·the CAA and the Regional Haze Rule. 2465 14

The Illinois EPAwill accept written comments from the public. The written comments mustbe postmarked by February 18. 2014. unless a public hearing is requested. Requests for public hearing must be mailed in sufficienttime to arrive at Illinois EPA no later than February 18. 2014. Comments and requests for hearing should be mailed to: Dean Studer, Hearing Officer lllinois EPA I021 North GrandAvenueEast P.O. Box 19276 Springfield, Illinois 62794-9276 Telephone: 217/558-8280 or TDD: 217/782-9143 Ifa timelv request for a public hearing is physically received by February 18. 2014. a public hearing will be scheduledthrough a separate notice and held to receive comments regarding the proposed SIP revision. Ifa public hearing is conducted. the written public commentperiod will be extended as provided for in the separate notice

. 

### • Ifno request for a public hearing is received by the Illinois EPA by U.S. Mail, carrier mail, orhand delivered 

### by February 18, 2014, no hearing will be scheduled. Verification ofa public hearing will be posted by February 28,2014, on the Illinois EPA's website at http://www.epa.state.il.us/public-notices/. Interested persons may also contactDean Studer, the Illinois EPA's Hearing Officer, at thephone number listed above to inquire as to the status ofa public hearing. Copies ofthe proposed SIP revision may be viewed by thepublic during regularbusiness hours (Monday through Friday 8:30a.m. until4:30p.m, except for State holidays) at the following Illinois EPA offices: 1021 North GrandAvenue East, Springfield, lllinois; 9511 W. Harrison St., Des Plaines, Illinois; and 2009 Mall Street, Collinsville, Illinois. No walk-in requests for copies ofthis material will be accommodated, unless advance notice is provided. Requests and public inquiries should be directed to Dean Studer, the Illinois EPA's Hearing Officer, at the address and phone number listed above. Ifa hearing request is received, the hearing will be held in accordance with the provisions ofthe Illinois EPA's "Procedures for Informational and Quasi-Legislative PublicHearings," set forth at 35 Ill. Adm. Code 164. This notice is intended to satisfythe requirements ofSection II0(1) of the CAA (42 USC§ 7410(1) (public notice for SIP revisions)).Earthjustice •EnvironmentalLaw & Policy Center • Sierra Club February 14,2014 

### ViaEmailandOvernightDelivery Dean Studer Hearing Officer Illinois Environmental ProtectionAgency 1021 Nortb Grand A venue East P.O. Box 19276 Springfield, Illinois 62794-9276 Re: Revision ofIllinois StateImplementation Plan: 

### COMfvlUI\l!TV FlELATIONS ILUNO!S EPA

Illinois PowerHoldings, LLC andAmerenEnergyMedinaValley Cogen, LLC, Variancefrom theMulti-Pollutant Standard DearMr. Studer, The undersigned herebyrequest a public hearing on the above-captioned matter. Sincerely,

Andrew Armstrong StaffAttorney Environmental Law & Policy Center 35 EastWackerDrive, Suite 1600 Chicago, IL6060I (312) 795-3738 Thomas Cmar Coal Program Attorney Earth justice 5042 Nortb Leavitt Street, Suite l Chicago, IL 60625 (312) 257-9338 EvaSchueller Associate Attorney Sierra Club 85 Second Street SanFrancisco, CA94105 (415) 977-5637 

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Index Department Administrative Code Division 111 E. Monroe St. Springfield, IL 62756 217-782-7017

Printed by authority ofthe State of Illinois. April - 90 

# PUBLISHED BY JESSE WHITE • SECRETARY OF STATE ATTACHMENT 

# 7,..{pILLINOIS REGISTER 7689 14 ENVIRONMENTAL PROTECTION AGENCY NOTICE OF HEARING On January 17,2014, the Illinois Environmental Protection Agency (Illinois EPA) provided notice thatthe Bureau ofAir was accepting public comment on a variance granted by the Illinois Pollution Control Board to Illinois PowerHoldings, LLC, and AmerenEnergy Medina Valley Cogen, LLC, under PCB 14-10, for thepurpose ofsubmitting such variance to the United States Environmental Protection Agency as a revision to the Illinois State Implementation Plan (SIP) under the Clean Air Act, 42 USC§ 7401 

### etseq. See, 38111. Reg. 2464. The notice also provided that ifa timely request for apublic hearing was received by February 18,2014, a public hearing would be scheduled through a separate notice and held to receive comments regarding the proposed SIP revision. By separate notice, a public hearing was previously scheduled by the Bureau ofAir on April 7, 2014, at 9:00am in the Sangamo Room at the Illinois Environmental Protection Agency, 1021 North Grand Avenue East, Springfield, Illinois. 

### See, 38111. Reg. 6493. The hearing has been rescheduled to May 20,2014, at 9:00am in the Sangamo Room at the Illinois Environmental Protection Agency, 1021 North Grand Avenue East, Springfield, Illinois. The hearingwill beheld in accordance with theprovisions ofthe IllinoisEPA's "Procedures for Informational and Quasi-Legislative Public Hearings," set forth at 35 Ill. Adm. Code 164. Requests to address special needs must be made to the Illinois EPA Hearing Officer by April29, 2014. Such requests or any questions about the hearing procedures are to be sent to: Dean Studer, Hearing Officer Illinois EPA I021 North Grand Avenue East P.O. Box 19276 Springfield, Illinois 62794-9276 Telephone: 217/558-8280 orTDD: 217/782-9143 Written comments must be sent to the Hearing Officer and be postmarked by midnight, June 20, 2014, unless otherwise specified by the Hearing Officer. Written comments need not be notarized. Comments should be mailed to Dean Studer, Hearing Officer, at the address listed above. Copies ofthe proposed SIP revision may be viewed by the public during regular business hours (Mondaythrough Friday 8:30a.m. until4:30 p.m, except for State holidays) atthe following Illinois EPA offices: 1021 North Grand Avenue East, Springfield, Illinois; 951 1W. Harrison St., Des Plaines, Illinois; and 2009 Mall Street, Collinsville, Illinois. No walk-in requests for copies ofthis material will be accommodated, unless advance notice is provided. Requests and public inquiries should be directed to Dean Studer, the Illinois EPA's Hearing Officer, atthe address and phone number listed above.PUBLIC HEARING 5/20/2014 Page I 1 ENVIRONMENTAL PROTECTION AGENCY 2 STATE OF ILLINOIS 3 4 IN RE: 5 Revised State Implementation Plan for a Variance Granted by the 6 Illinois Pollution Control Board to Illinois Power Holdings, LLC, and 7 AmerenEnergy Medina Valley Cogen, LLC 8 9 10 11 12 13 14 Public Hearing held, pursuant to 15 Notice, on the 20th day of May, 2014, between the 16 hours of 9:00a.m. and 9:22a.m., at 1021 North 17 Grand Avenue East, Springfield, Illinois, before 18 Mr. Dean Studer, duly appointed Hearing Officer. 19 20 21 22 23 24

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1 TRANSCRIPT OF PROCEEDINGS 2 HEARING OFFICER STUDER: I've got 9:00, 3 so we'll go ahead and go on the record. 4 Good morning, my name is Dean Studer 5 and I'm the hearing officer for Illinois EPA. I 6 would like to welcome you to this morning's 7 hearing. This hearing is being held for the 8 purpose of gathering public comment on the proposed 9 State Implementation Plan, otherwise referred to as 10 SIP, S-I-P, revision submittal related to a 11 variance granted by the Illinois Pollution Control 12 Board to Illinois Power Holdings, LLC, otherwise 13 referred to as IPH, and to AmerenEnergy Medina 14 Valley Cogen, LLC. That variance was granted in 15 PCB 2014-010 and that was granted on November 21st, 16 2013. The issues considered by the Illinois 17 Pollution Control Board, otherwise referred to 18 simply as the Board or IPCB, in the variance

. 19 proceeding, and again that's PCB 2014-010, are not

20 necessarily relevant in this proceeding. Illinois 21 EPA has no authority to reconsider the previously 22 granted variance by the Board, and as such, the 23 issues involved with the granting of a variance are 24 not relevant in this proceeding. What is relevant

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1 in this proceeding are the compliance requirements 2 for the SIP revision submittal to USEPA, the United 3 States Environmental Protection Agency. 4 The criteria for determining the 5 completeness of SIP submissions to USEPA are set 6 forth at Appendix V to Part 51 of the Code of 7 Federal Regulations, 40 CFR 51. In order for a 8 variance to be considered for approval as a 9 revision to the SIP, the State must submit it in 10 accordance with the requirements of 40 CFR Section 11 51.104. 12 The Illinois EPA plans to submit this 13 proposal to USEPA for review and approval as a 14 revision to the SIP to address the visibility 15 protection requirements of Section 169A of the 16 federal Clean Air Act, 42 USC Section 7491, and the 17 Regional Haze Rule, as codified in 40 CFR Section 18 51.308. Copies of the draft SIP proposal are and 19· have been available for review at Illinois EPA 20 locations in Des Plaines, Collinsville, and here in 21 Springfield. 22 IPH, an indirect subsidiary of Dynegy, 23 Incorporated, has acquired ownership of th.e Ameren 24 operating merchant generation stations, namely the

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 Coffeen Energy Center located in Montgomery County, 2 the Duck Creek Energy Center located in Fulton 3 County, the E.D. Edwards Energy Center located in 4 Peoria County, the Joppa Energy Center located in 5 Massac County, and the Newton Energy Center located 6 in Jasper County, under a transaction agreement 7 between Ameren and Illinois Power Holdings. Medina 8 Valley has acquired the shuttered generating 9 stations, the Meredosia Energy Center located in 10 Morgan County and the Hutsonville Energy Center in 11 Crawford County. On November 21st, 2013, the Board 12 granted the variance to IPH and Medina Valley from 13 the applicable requirements of the Illinois 14 Multi-Pollutant Standard, MPS, set forth at 35 15 Illinois Administrative Code 225.233(e) (C)

-- 16 excuse me, (e) (3) (C) (iii) for a period beginning 17 January 1st, 2015, through December 31st, 2019, 18 and 35 Illinois Administrative Code 19 255.233 (e) (3) (C) (iv) for a period beginning January 20 1st, 2017, through December 31st, 2019, and it's 21 subject to certain conditions in that variance. 22 The MPS is a multi-pollutant 23 comprehensive approach to reducing emissions of 24**n~trogen** dioxides, sulfur dioxide, and mercury.

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 Section 225.233(e) is an approved rule of the 2 Illinois SIP. On July 6th, 2012, the USEPA 3 approved the Illinois plan submitted to address the 4 visibility protection requirements of Section 169A 5 of the federal Clean Air Act and the Regional Haze 6 Rule, which is approved. It's-- you can check 7 that out at 77 Federal Register 39943, and that was 8 on July 6th, 2012. The Illinois plan includes 9 Section 225.233(e). Accordingly, since the 10 petition for variance sought relief from the 11 provisions of the MPS and such relief was granted 12 by the Board, the variance must be submitted to 13 USEPA for approval as a SIP revision addressing the 14 visibility requirements under the Clean Air Act and 15 the Regional Haze Rule. 16 This hearing is being held under the 17 provisions of 35 Illinois Administrative Code 164, 18 Procedures for Informational and Quasi-Legislative 19 Public Hearings. Copies of these procedures can be 20 accessed on the website for the Illinois Pollution 21 Control Board at www.ipcb.state.il.us, or if you do 22 not have ready access to the web, they can be 23 obtained from me. 24 Gina Roccaforte, sitting here on my

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 right, will introduce the Illinois EPA staff 2 members present today. Following this, I will 3 allow the public to ask relevant questions or 4 provide comments and ask relevant questions. You 5 are not required to verbalize your comments at this 6 hearing as written comments are given the same 7 consideration and weight and may be submitted to 8 the agency at any time within the public comment 9 period, which ends on June 20th, 2014. Any person 10 who wants to make oral comments may do so as long 11 as the statements are relevant to the issues that 12 are addressed at this hearing and such person has 13 indicated on their registration card that they 14 would like to speak. If you have lengthy comments 15 or questions, it would be helpful to submit them to 16 me in writing before the close of the comment 17 period, and I will ensure that they are included in 18 the hearing record as an exhibit. 19 Please keep your comments and questions 20 relevant to the issues at hand. If your comments 21 fall outside the scope of this hearing, I may ask 22 you to proceed to another issue. Remember, all 23 comments made at this hearing or submitted in 24 writing before the close of the comment period will

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 become part of the official hearing record and will 2 be considered. If you would like to comment at 3 this hearing, please complete a registration card 4 which can be found on the registration tables and 5 indicate on the card your desire to speak. Anyone 6 who completes a registration card or submits 7 written comments in this matter will be notified of 8 Illinois EPA's final decision in this matter. That 9 notification will also contain information as to 10 how you may access the agency responsiveness 11 summary. In this summary, Illinois EPA will answer 12 all relevant and significant issues raised at this 13 hearing or submitted to me in writing while the 14 record is open. 15 Again, the written record in this 16 matter will close on June 20th, 2014. And again, 17 all relevant documents, comments, and data will be 18 placed into the hearing record as exhibits. Please 19 send all written comments or data to me at the 20 following address and that is: Dean Studer, 21 Hearing Officer, Office of Community Relations, and 22 this is regarding IPH Variance SIP Revision, 23 Illinois Environmental Protection Agency, 1021 24 North Grand Avenue East, P.O. Box 19276,

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 Springfield, Illinois 62794-9276. And this address 2 is also listed on the public notice for the hearing 3 today. 4 A court reporter is here today taking a 5 verbatim record of this proceeding for the purpose 6 of us making our administrative record. For the 7 benefit of the court reporter, please keep general 8 background noise in the room to a minimum so he

-- 9 or, excuse me, so she can hear everything that is 10 said. And also, when you begin to speak, please 11 state your name and, if applicable, any 12 governmental body, organization, or. association you 13 represent. If you are representing yourself, you 14 may simply indicate that you are a concerned 15 citizen. Also, for the benefit of the court 16 reporter, please spell your last name. If there 17 are alternate spellings of your first name, you may 18 also want to spell your first name so that an 19 accurate record of your comments can be made. 20 People who have requested to speak will be called 21 forward to come to the podium. 22 When your name is called, please come 23 forward and state your name. And again, if you are 24 representing a governmental body or organization,

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Fax: 314.644.1334PUBLIC HEARING S/20/2014

1 you may so indicate or should so indicate. If you 2 are representing yourself, you may simply indicate 3 you are a member of the general public. 4 And before I introduce Illinois EPA 5 staff here this morning, I'd like to record a few 6 preliminary documents into the official record as 7 exhibits. And for the record, Exhibit 4 is a 8 comment letter received from Bob Jorgenson, in East 9 Peoria, and that was received on February 18th, 10 2014, and Exhibit 5 is a request for a hearing in 11 this matter ·from Earthjustice, Environmental Law & 12 Policy Center, and the Sierra Club, dated February 13 14th, 2014. 14 Are there questions on how I'll conduct 15 the hearing this morning? 16 (No response) 17 HEARING OFFICER STUDER: Okay. Gina. 18 MS. ROCCAFORTE: Good morning. I'm 19 Gina Roccaforte. I'm Assistant Counsel on behalf 20 of the Illinois Environmental Protection Agency. 21 And with me today is Mr. Rory Davis, Environmental 22 Protection Engineer with the Bureau of Air. 23 HEARING OFFICER STUDER: Thank you. 24 Okay. We have one person that has

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 registered to speak and that's Andrew Armstrong. 2 MR. ARMSTRONG: Yes. Thank you, 3 Mr. Studer. 4 HEARING OFFICER STUDER: I will allow 5 you to sit at your seat as long as it can be heard, 6 if people in the back can hear. You're going to 7 have to project your voice because you do have 8 people behind you a little bit, so 9 MR. ARMSTRONG: Will do. 10 My name is Andrew Armstrong. I'm a ll Staff Attorney at the Environmental Law & Policy 12 Center. I am here today on behalf of ELPC, 13 Earthjustice, and Sierra Club to offer comments on 14 the proposed modification to the Illinois Regional 15 Haze SIP. 16 Illinois EPA is currently proposing to 17 request that the Regional Haze SIP be modified to 18 continue to recognize the Multi-Pollutant Standard, 19 MPS, to be a best available retrofit technology, or 20 BART, alternative for the Illinois coal plants 21 formerly owned by Ameren and now owned by Illinois 22 Power Holdings, even though the Illinois Pollution 23 Control Board has granted a variance from the 24 sulfur dioxide requirements of the MPS for the

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 former Ameren fleet until 2020. 2 This variance will allow Illinois Power 3 Holdings to continue operating the former Ameren 4 fleet without installing any additional pollution 5 controls until well past the 2018 deadline by which 6 the Regional Haze Rule would have required that 7 BART controls be installed to address sulfur 8 dioxide contributing to regional haze in downwind 9 national parks and forests. 10 Illinois EPA has never done a source11 specific analysis of what BART would require at the 12 BART-subject units in the former Ameren fleet, but 13 instead only evaluated "presumptive BART on" limits 14 that do not reflect the reductions in sulfur 15 dioxide emissions that would result from installing 16 BART ·controls at BART-subject units. 17 The United States Environmental 18 Protection Agency did its own calculation based on 19 much more stringent assumptions about the level of 20 sulfur dioxide reductions that BART would require. 21 USEPA ultimately approved the Illinois Regional 22 Haze SIP based upon these calculations, which found 23 that the total emissions reductions that the MPS 24 would require at the former Ameren fleet would

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014 Page 12 1 exceed the emissions reductions that would result 2 from only requiring BART at the BART-subject units. 3 First, we think this is the wrong 4 standard because we continue to believe, as we 5 commented originally on the Illinois Regional Haze 6 SIP when it was first submitted, that BART is a 7 mandatory Clean Air Act requirement that may not be 8 replaced by fleetwide standards such as the MPS. 9 Even were this the right standard, though, USEPA 10 needs to reevaluate whether it can lawfully approve 11 the Illinois Regional Haze SIP modification for the 12 former Ameren fleet by doing a new calculation of 13 whether the MPS as implemented with variances for 14 the former Ameren fleet is still "better than 15 BART." 16 The Illinois plan contains separate 17 emissions limits for each fleet. The former Ameren 18 fleet has its own emissions limits specified in the 19 MPS and the variance applies to only the former 20 Ameren facilities. Since the Illinois plan 21 consists of fleet-specific emissions limits and 22 since the proposed SIP revision applies only to 23 Ameren, the BART alternative must be judged on the 24 same fleet-by-fleet basis. If the Illinois plan is

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1 not better than BART at the former Ameren 2 facilities, it cannot be approved by lJSEPA. 3 Now, if Illinois EPA were to attempt to 4 make a showing that the MPS with the variance is 5 better than BART, it should not be allowed to rely 6 on purported emissions reductions at the Meredosia 7 and Hutsonville units that have now been retired 8 for several years due to economic reasons, nor 9 emissions reductions from Edwards Unit 1 which is 10 now only being operated for grid reliability 11 purposes subject to a short-term System Support 12 Resource Agreement with MISO. These plants have 13 retired or are retiring before the MPS reductions 14 are implemented, such that the MPS is not driving 15 emissions reductions at those plants at all. 16. Moreover, the Meredosia and Hutsonville units were 17 not purchased by Illinois Power Holdings and should 18 not be included in any analysis of emissions 19 reductions at the former Ameren fleet. 20 If lJSEPA performs a new calculation of 21 the emissions reductions at the former Ameren fleet 22 from the MPS that excludes purported 502 emissions 23 reductions from the Meredosia and Hutsonville units 24 and from Edwards Unit 1, then it will find that

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Fax: 314.644.1334PUBLIC HEARJNG 5/20/2014

1 implementation of the MPS at the remaining Ameren 2 units is no longer better than BART, as will be 3 demonstrated in the environmental groups' written 4 comments. 5 We also would note that the Regional 6 Haze Rule further requires that the burden is on 7 the State to demonstrate that any BART alternative 8 will achieve greater reasonable progress towards 9 national visibility conditions in Class 1 areas 10 than requiring BART controls to be installed at 11 BART-eligible units. That demonstration has not 12 been made here yet. 13 Finally, we further contend that USEPA 14 cannot approve the requested SIP revision because 15 Illinois has not conducted required visibility 16 modeling to show that the Illinois plan will 17 achieve greater reasonable progress than would BART 18 towards reducing visibility impairment. In order 19 to demonstrate that an alternative program is 20 better than BART, a state is required by 40 CFR 21 51.308(el (3) to perform dispersion modeling unless 22 the distribution of emissions is not substantially 23 different under the alternative program relative to 24 BART. EPA conceded that the Part 225 rules reflect

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014

1 substantial averaging across units and across 2 facilities. So visibility modeling of the Illinois 3 plan and its relationship with BART must be 4 conducted. 5 So thank you very much for the 6 opportunity to offer these comments. We will 7 submit written comments by the deadline. 8 HEARING OFFICER STUDER: Thank you, 9 Mr. Armstrong. 10 Is there anyone else that has comments 11 or questions that they would like to ask on the 12 record this morning? 13 (No response) 14 HEARING OFFICER STUDER: Okay. Let the 15 record indicate no one raised their hand. 16 I remind everyone that the comment 17 period is open for 30 days and we will be accepting 18 written comments as indicated on the public notice 19 for this hearing. 20 This hearing is adjourned. 21 (The hearing adjourned at .9:22a.m.) 22 23 24

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Fax: 314.644.1334PUBLIC HEARING 5/20/2014 Page 16 1 2 CERTIFICATE OF REPORTER 3 STATE OF ILLINOIS

ss 4 COUNTY OF SANGAMON 5 I, DOROTHY J. HART, a Registered 6 Professional Reporter and Certified Shorthand 7 Reporter within and for the State of Illinois, do 8 hereby certify that the foregoing proceedings were 9 taken by me to the best of my ability and 10 thereafter reduced to typewriting under my 11 direction; that I am neither counsel for, related 12 to, nor employed by any of the parties involved in 13 this proceeding, and further that I am not a 14 relative or employee of any attorney or counsel 15 employed by the parties thereto, nor financially or 16 otherwise interested in the outcome of the action. 17 18 19 Registered Professional Reporter 20 Certified Shorthand Reporter Illinois CSR No. 084-001390 21 22 23 

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### ' 51.1043:11 51.308 3:18 51.308(e)(3) 14:21 ' 6 6th5:2,8 62794-9276 8: I 7 74913:16 77 5:7 9 9:001:16 2:2 9:221:16 15:21

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### INRE: BEFORE THE ENVIRONMENTAL PROTECTION AGENCY STATE OF ILLINOIS

Revised State Implementation Plan For a Variance Granted by the Illinois Pollution Control Board to Illinois Power Holdings, LLC, and AmerenEnergy Medina Valley Cogen, LLC



### JOINT PUBLIC COMMENT OF ILLINOIS POWERHOLDINGS, LLC, AND AMEREN EJ\'ERGYMEDINA VALLEY COGEN, LLC

Illinois Power Holdings, LLC ("IPH") and AmerenEnergy Medina Valley Cogen, LLC ("Medina Valley") the entities who, as petitioners, sought and obtained the variance that is the subject ofthe proposed State Implementation Plan ("SIP") revision, here provide ajoint public comment in support ofthe State ofIllinois proposed SIP revision submittal. 

### I. BACKGROUND Theproposed SIP revision is occasioned by a variance granted to IPH and Medina Valley by the Illinois Pollution Control Board ("Board") in docket R-14-10, pursuant to illinois law, specifically Title IX of the illinois Environmental Protection Act ("Act"), 415 ILCS 5/35-38. The documents relevant to the Board's determination to grant the variance arepartofthe State of Illinois proposed SIP submittal, presented by the Illinois Environmental Protection Agency ("IEPA"). The variance grants relieffrom the sulfur dioxide emission rate inthe multi-pollutant standard ("MPS'') rules applicable to the following seven coal-fired electric generating plants, known as the AER MPS Group: Coffeen Energy Center (Montgomery County), Duck Creek 

# 2!3 ATTACHMENT---

### Energy Center (Fulton County), E.D. Edwards Energy Center (Peoria County), Joppa Energy Center (Massac County), Hutsonville Energy Center (Crawford County), Meredosia Energy Center (Morgan County), and Newton Energy Center (Jasper County). Specifically, the variance grants the AERMPS Group relieffrom 35 Ill. Adm. Code 225.223(e)(3)(C)(iii) for five years beginning January I, 2015 and ending December 31, 2019, and relief from 35 Ill. Adm. Code 225.223(e)(3)(C)(iv) for three years, beginning January 1, 2017 and ending December 31,

·2019, subjectto certain conditions. The Board's variance proceeding, and its decision to grant the variance, is analyzed fully in its 107-page Opinion and Order, which has been presented by the IEPA as part of the proposed SIP revision. Seefllinois Power Holdings, LLC andAmeren Energy Medina Valley • 

### Cogen, LLC andAmeren Energy Resources, LLC v. Illinois Environmental Protection Agency, 

### Ill. Pollution Control Bd. Op., PCB 14-10 (Nov. 21, 2013). The variance replaced a variance that was previously granted to the AER MPS Group on September 20, 2012, Ameren Energy Resources v. Illinois Environmental ProtectionAgency, 

### Ill. Pollution Control Bd. Op., PCB 12- 126 (Sept. 20, 2012) ("PCB 12-126"), which was the subject ofa SIP revision submittal onMay 16, 2013. The variance that is subject 

### ofthe currentproposed SIP revision was necessitated due to the sale ofthe AER MPS Group to IPH and MedinaValley Cogen. The proposed SIP revision will be submitted for United States Environmental Protection Agency ("USEPA") review and approval as a revision to the illinois SIP to address the visibility protection requirements of Section 169A of the Clean Air Act, 42 U.S.C.**~7491,** 

### and the Regional Haze Rule, as codified in 40 C.F.R. § 

### 51.308. As the variance meets the criteria of both programs, the USEPA should approve this SIP. The comments made by the environmental

2

# ·-

groups in opposition to this SIP, discussed below, do not providejustification for USEPA to not approve

### tlli~ Illinois.SIP. 

### IT. IEPA PUBLIC HEARING -ENVIRONMENTAL GROUP COMMENTS The !EPA held a public hearing on May 20, 2014 to receive comments regarding this proposed SIP revision. Attorney Andrew Armstrong, representing the Environmental Law 

### &. Policy Center ("ELPC"), Earthjustice and the Sierra Club, was the only commenter 

### at the hearing. The comments made by Mr. Armstrong cover the same or very similarly worded points made and rejected in the lllinois Regional Haze rulemaking (77 Fed. Reg. 39943, July 6, 2012) and to some e:>..ient by the Board in the November 21, 2013 Order granting the variance at issue here. The comments raised at hearing are summarized below, with responses by IPH and Medina Valley following each. 

### Comment: IEPA has not done a "source-specific" analysis of BART requirements at BART units, but used a "presumptive BART' enlissionrate. These do notreflectreductions that would really result from BART controls at all BART units. USEPA's calculations used a similar approach and found emission reductions in the MPS exceeded reductions of BART at only BARTunits. 

### Response: The "source-specific" argument was previously made by ELPC on the USEPA Illinois Regional Haze SIP revision proposal of January 26, 2012, see 77 Fed. Reg. 3966. USEPA analyzed this argument and rejected it, determining that the Illinois plan was an acceptable BART alternative. 77 Fed. Reg. 39943, 39945 (July 6, 2012). 

### Comment: New calculations should be done usingthevariances to 

### evaluate whetherthe Arneren fleet is still "better than BART." BART alternative should be evaluated only as to the Arneren fleet because the MPS is set up that way and the variance only applies to the Ameren fleet. If that is not still "betterthanBART'theplan should notbe approved. 

### Response: This comment is actually related to the "source-specific" argument that was rejected by USEPA in its final rule approval of the Illinois Regional Haze SIP. 

### See 77 Fed. Reg. at 39945. The only difference is that this comment focuses notjust on BART-subject units, but wants to separate the Ameren plants for calculations apart from the entire fleet that was the subject ofthe Illinois Regional Haze SIP final rule. 

### Comment: The reductions from the retiring of Hutsonville, Meredosia and Edwards Unit should not be included in the analysis. Such a calculation would show that MPS is no longer

3"better than BART" for the remaining Arneren facilities. Cornmenters. promised to show calculations in their written comments. 

### Response; This very issue was raisedby opponents to the variance during the proceeding before the Board, but the Boarddetermined otherwise (Board Order, page 86), stating "the Board agrees with the Agency that "providing credit for actions 

### (e.g., unit shutdowns) that result in emission reductions is an acceptable part ofthe regulatory process" and that such "emission reduction offsets

... are creditable and allowable." Citing Arneren Energy Resources, PCB 

### 12-126, slip op. at 56 (Sept. 20, 2012). New calculations from the cornmenters using their desired inputs 

### (i.e., without crediting the shutdowns) may producethe cornmenters' desired answer, but will not change the Board's determination that shutdowns and emission reductions are an acceptable part ofthe regulatory process and creditable and allowable. 

### Comment: State has not made the required demonstration that the BART alternative will achieve greaterreasonableprogress. 

### Response: This comment is vague and conclusory. However, the Board clearly found that this variance produced a net environmental benefit over the MPS (as part of the Illinois plan). Further, since the instant variance has more reduction than the priorvariance, the conclusion that the prior variance achieved greater reasonable further progress must also be true for this variance. USEPA had already determined that the underlying MPS would achieve the required greaterreasonable progress. 

### See 77 Fed. Reg. at 39945. 

### Comment: Visibility modeling is required to show greater reasonable progress, citing 

### 40 C.F.R. §51.308(e)(3). 

### Response: This issue was addressed in the USEPA technical support document to the final rule approval ofthe lllinois Regional Haze SIP. 77 Fed. Reg. at 39945. 

### In its technical analysis, the USEPA compared the lllinois strategy with source-specific BART, concluding that modeling analysis was not necessary; Given the regional nature of visibility impairment, an alternative that results in lower emissions ofsulfur dioxide (SOz) and nitrogen oxides (NOx) will generally provide better visibility protection. Thus, in the absence ofdifferences in spatial distribution of emissions, a modeling analysis is generally not necessary to be able to conclude that an alternative strategy with lower S02 and NOx emissions provides better visibilityprotection. Memorandum, Subject; Comparison ofIllinoi Power Plant Emission Reductions to Reductions from Source-Specific Best Available Retrofit Technology, From; John Summerhays, Attainment Planning Maintenance Section, USEPA Region 5, To; Files (May 29, 2012), at 

### 1. It is also worthy to note that USEPA pointed out 

### in the final rule, 77 Fed. Reg. at 39946, that the closest distance ofany BART-subject lllinoispowerplantto any Class I area was 

### 140 kilometers.

4 

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ill. 

### APPROVAL OF SIP**~VISION** 

### WILL NOT JEOPARDIZE NATIONAL AMBIENT AIR QUALITY STA.l\!DARDS In its decision, the Board found that "the requested variance will result in an overall reduction in emissions and therefore has no significantnegative impact on the environment orhealth." IPCB 14-10 (Nov. 21, 2013) Slip Op., p. 2. TheBoard also found that the requested variance was "consistent withfederal law." On that laterpoint, consistency with federal law, the Board found: The Board has authority under Section 110 oftheCAA (42 U.S.C. 

### § 7410) to adoptregulations that are part ofthe State's plan for implementing, maintaining, and enforcing air quality standards. The variance procedure to grant relieffrom a Board regulation is consistentwith the authority granted to the siates under the CAA's Section 11(). Ifthe variance is granted, the Agency will submit the variance order to USEPA for approval as arevision to the lllinois SIP. Agency Rec. at 26-27. As noted earlier, USEPA did not identify any adverse issues with the prior variance granted in PCB 12-126. The Agency does not expect that USEPA will find any adverse issues with the current request, in which 802reductions are expected beyond those contained in the previous SIP revision submitted to USEPA for PCB 12-126. Agency First Resp. at 3; Agency Second Resp. at 1-2. The Agency concludes that granting this variance will notjeopardize the State's obligations to attain and maintain the 1-hour 802NAAQS, but cautions: This variance deals only with the requirements in question at the current time. 

### Any newrules mandating reductions in 802will be addressed in a separaterulemaking proceeding before the Board. Variances for existing requirements do not affect any future rules. 

## * 

# • 

# • [T]he [Agency] will propose newrules to the Board and such rules will require sufficient reductions to allow the attainment and maintenance ofthe NAAQS. Agency First Resp. at 2.

Based upon this record, the Board finds that granting petitioners' request for a variance, subject to the conditions in the order below, would be consistent with current Illinois SIP obligations to attain and maintain NAAQS compliance. The Board therefore finds that granting petitioners a variance from the rule is consistent with federal law. 5As indicated above, however, iffederal rules, such as a CAIR or CSAPR · replacement, go into effect, petitioners might need to implement additional controls. For example, USEPA's adoption ofa new primary NAAQS for S02 of0.75 ppb became effective August 23, 2010. 75 Fed. Reg. 35520 (Jllile 22, 2010). Effective October 4, 2013, USEPA made its initiall-hour S02 air quality designations for the State ofIllinois. Among the areas designated as "nonattainment" for the 1-hour S02 NAAQS is the area in which the E.D. Edwards station is located. 78 Fed. Reg. 47191 (Aug. 5, 2013). The schedule for state plans addressing areas designated as nonattainment is governed by CAA Sections 191(a) and 192(a) (42 U.S.C. §§ 7514(a), 7514a(a)). 

### In adopting the new primary S02 NAAQS, USEPA stated: [A]ny State containing an area designated as nonattainment with respect to the S02NAAQS would rieed to develop for submission to [US]EPA a SIP meeting the requirements ofpart D, Title I, ofthe CAA, providing for attainment bythe applicable statutory attainment date

.... [A]ll components ofthe S02 part D SIP must be submitted within 18 months ofthe effective date ofan area's designation as nonattainment. 75 Fed. Red. at 35577 (June 22, 2010). Eighteen months from the October 4, 2013 effective date will be April4, 2015. USEPA also stated that SIPs "would need to provide for attainment and maintenance ofthe new 1-hour S02NAAQS as expeditiously as practicable, which we expect to beno later 

### than five years afterinitial designation

... in all areas ofthe State

_.._" 75 Fed. Reg. at 35553 (June 22, 2010). Fiveyears from the October 4, 2013 effective date will be October 4, 2018. Although the conditions ofthe variance order below would extend through the end of2020, the variance from the two MPS provisions at 3 5 

### Ill. Adm. Code 225.233(e)(3)(C)(iii) and (iv) would end on December 31,2019, approximately 14 months after October 4, 2018. Accordingly, it is conceivable that during the term ofthe variance, the Agency may beginproposing newrules for S02 emissions. As petitioners state, the Agency will need to analyze air emissions modeling to determine culpable sources and appropriate emission limits or control measures as part ofits SIP. Pet. First Resp. at 7. Petitioners state that !PH "recognizes that therequested

. variance relief would not exempt E.D. Edwards from compliance with any federal CleanAir Actrequirements adopted in the future, including Illinois regulations, ifany, needed to implement SIP obligations conceming the onehour S02 NAAQS." Pet. at 67.

6

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### Ofcourse, as noted by the People, any changes to the Board's rules will go through the rulemaking process, and all parties and participants here will have an opportunity at the time to reassess petitioners' prospects and environmental and health impacts 

### inlight ofnew regulatory requirements. !PCB 14-10 (Nov. 21, 2013) Slip Op.,p. 99-100. Thus, while the proposed SIP revision concerns the Regional Haze SIP, it is clear that the Board carefully analyzed the variance with respect to attainment and maintenance of the NAAQS. The Board found thatthe variance was appropriate as to this issue, as well as the many others considered. WHEREFORE, Illinois Power Holdings, LLC and AmerenEnergy Medina Valley Cogen, LLC recommend that the proposed SIP revision for the variance granted them by the Illinois Pollution Control Board onNovember 21, 2013, be submittedto the USEPA for approval as part ofthe Illinois SIP. ILLINOIS POWERHOLDINGS, LLC

# By:41~. - 

### BRO"WN, HAY & 

### STEPHENS, LLP Claire A. Manning cmanning@bhslaw.com William D. Ingersoll wingersoll@bhslaw.com .205 S. Fifth Street, Suite 700 P.O. Box 2459 Springfield, IL 62705-2459 (217)544-8491

Dated: June 20,2014

7 

### .1\MERENENERGYMEDINA VALLEY COGEN,LLC

By: 

## JMU?.q · . ,fJ_O:C One ofits A omeys 

### SCHIFF HARDIN, LLP Amy Antoniolli Renee Cipriano 233 South Wacker Drive, Suite 6600 Chicago, lllinois 60606 (312)258-5550 Fax: 312-258-5600 aantoniolli@schiffuardin.com

.,

### Earthjustice • EnvironmentalLaw and Policy Center • Sierra Club

VIA E-MAIL AND REGULARMAIL Dean Studer, Hearing Officer Illinois EPA 1021 North Grand Avenue East P.O. Box 19276 Springfield, Illinois 62794-9276 Dean.Studer@lllinois.gov June 20,2014



### Re: Proposed Revision ofthe Illinois StateImplementation Plan for Regional Haze Dear 

### Mr. Studer, Please acceptthese comments submitted by Earthjustice, the Environmental Law and Policy Center ("ELPC''), and the Sierra Club on the proposal to revise the Illinois State Implementation Plan ("SIP") for regional haze to incorporate a variance granted by the Illinois Pollution Control Board ("PCB") to Illinois PowerHoldings, LLC ("IPH") and AmerenEnergy Medina Valley Cogen, LLC ("Medina Valley"). As explained below, the Illinois Environmental Protection Agency ("IEPA") should not fmalize the proposed SIP revision and should not submititto the U.S. Environmental Protection Agency ("EPA") because it does not meet the applicable requirements ofthe Clean Air Act ("CAA"). First, the proposed SIP revision, like the original SIP, does not contain the five-factor, unit-specific best availableretrofit technology ("BART") determinationsrequired by the CAA. Second, even ifit were permissible in theory to substitute an alternative program such as the Multi-Pollutant Standard ("MPS") for unit-specific BART limits, IEPA has not met its burden to show that the MPS is approvable as aBART alternativebecause the agency has not performed therequired modeling ofthe visibility impacts from the MPS compared to BART. Third, the Illinois Pollution Control Board granted variances to Arneren Energy Resources, and later to IPH and Medina Valley, from the Illinois Multi-Pollutant Standard, 35 Ill. Adm. Code 225.233, from 2015 through the year 2019, that significantlyweaken the MPS' requirements ofreductions in haze-forming sulfur dioxide ("S02'')relied uponby EPA in approving the Illinois regional haze SIP. TheMPS sets out annual fleet-wide sulfur dioxide limits applicable to the fleet of7 coal-fired powerplants that, at the time ofthe MPS' adoption, were operated by Arneren Corporation and its subsidiaries ("Ameren"). The 5 Arneren plants still in operation-Coffeen, Duck Creek, E.D. Edwards, Joppa, and Newton-arenow owned and operatedby IPH; the 2 former Ameren plants that retired in 2011-Hutsonville and Meredosia-areowned by MedinaValley. Thevariances make the MPS' fleet-wide S02limits significantly less stringent than those EPA approved in its final rule. This development completelyundermines the rationale for finding, pursuant to 40 C.F.R. 

### § 51.308(e)(2)(i), that Illinois' implementationofthe MPS to reduce S02 emissions from the former Ameren fleet's I 

### ATTACHMENT 

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# qIllinois coal-fired powerplants will "achieve greaterreasonable progress than would be achieved through the installation and operation of' BART at the fleet's BART-subjectplants. Rather, because ofthe variances, the MPS will no longerrequire S02 reductions from the former Ameren coal fleet during the period ofthe first long-term strategy for regional haze 

### (i.e., before 2018, see 40 C.F.R. 

### §51.308(f)) that are greaterthan the reductions that would result from requiring IPH to install and operate BART on its BART-subjectplants. As a result ofthese three legal deficiencies, EPA cannot approve theproposed SIP revision. Instead offinalizing a plan that EPA cannot lawfully approve, IEPA should conduct source-specific BART determinations for the !PH units subjectto BART. I. 

### BACKGROUND

Recognizing that manmade haze diminishes visibility and degrades the integrity ofmany ofthe nation's national parks and wilderness areas, Congress in 1977 amended the CleanAir Act, "declar[ing] as a national goal the prevention ofany future, and the remedying ofany existing, impairment ofvisibility in mandatory class I Federal areas which impairment results from manmade air pollution." See 42 U.S.C. § 7491(a)(l); see also40 C.F.R. pt. 81, subpt. D (listing the !56protected Class I areas, including certain national parks, wilderness areas, and national memorialparks, as well as certain international parks). Among otherthings, Congress mandated thatEPA adopt regulations that would require states to develop SIPs containing measures necessary to make reasonable progress toward the national goal ofimproving visibility, One ofthe cornerstones ofthe haze SIPs is the installation and operation ofBART at BARTeligible sources 1that could be reasonably anticipated to cause or contribute to visibility impairment in a Class I area (referred to as sources "subjectto BART"). 42 U.S.C. 

### § 749l(a)(4), (b)(2)(A). In 1999 -aftermany years ofdeferred action on widespread, regionally homogenous haze- EPA promulgatedthe Regional Haze Rule. Regional Haze Regulations, 64 Fed. Reg. 35,714 (July I, 1999). Under that Rule, states are directed to submit SIPs containing emissions limitations representing BART and schedules for compliance for each source subject to BART. See 40 C.F.R. 

### § 51.308(e). States must determine BART for each source based ona case-bycase analysis, id. 

### § 51.308(e)(l)(ii), and must require "each source subject to BART

... to install and operate BART as expeditiously as practicable, but in no event later than 5 years after approval" by EPA ofthe state's Regional Haze SIP, id. 

### §51.308(e)(l)(iv). On June 24,2011, Illinois submitted a proposed Regional Haze SIP to EPA. 77 Fed. Reg. 3966, 3970 (Jan. 26, 2012). Inits proposed SIP, Illinois stated that, based onmodeling completedby theMidwestRegional Planning Organization ("MRPO"), it determined that emissions sources in the state cause or contribute to visibility degradation in 19 national parks and wilderness areas (defined in the CAA as "Class I areas") 2 To comply with the BART provisions oftheRegional HazeRule, Illinois evaluated which BART-eligible emissions sources

1A source is BARTMeligible ifit is astationary source within one of26 enumerated categories, was not in operation before August 7, 1962 but was in existence on August 7, 1977, and has the potential to emit 250 tons per year or more ofany pollutant. 42 U.S.C. § 749l(b)(2)(A), (g)(7). 2Illinois SIP Submittal, Attachment I to Docket lD No. EPA-R05-0AR-2011-0598-0002. 2 •within the state cause or contribute to visibility impairmentin those Class I areas and are thus subject to BART. Illinois identified II such sources, including 9 coal-firedpowerplants.3 Instead ofevaluating and determining BARTfor all 9 coal-frredpowerplants subject to BART, Illinois proposed for 7 ofthe 9plants thattwo state emissions trading rules implemented in tandem- the MPS, 35 Ill. Adm. 225.233, and the Combined Pollutant Standard ("CPS"), 35 Ill. Adm. Code225.291-299- be relied on as an "alternative"to BART4 These 7 plants included 3 plants from the original Ameren fleet: Coffeen, Duck Creek, and E.D. Edwards5 Each ofthese 3 plants is currentlyregulated bythe MPS, as are the 4 additional plants in the original Ameren fleet6 The MPS requires that this fleet's emissions ofS02 and nitrogen oxides ("NOx") be reduced to meet certain fleet-wide average emission rates each year7 The MPS' fleet-wide average emission rates "areintended to allow the companies the flexibility to meet the fleet-wide emission limits in the most cost-effective manner" byreducing S02 andNOx emissions more at some plants than at otherplants.8 The S02 limits for the Ameren fleet vary by year; the fleet's average S02 emissions cannot exceed 0.25 lb/MMBtubetween 2015-2016 and cannot exceed 0.23 lb/MMBtu from 2017 onwards. At the same time, because the MPS requires reductions at all 7 ofthe original Ameren plants instead of justthe 3 plants with units subject to BART, Illinois proposed that EPA find that its "approach will yield much largerreductions ofNOx and S02 than will implementation of BART controls onjust subject to BART emissionunits."9 Thus, according to Illinois, the greater fleet-wide reductions that the MPS requires ofthe original Ameren fleet (together with similar reductions that the MPS and CPS require oftwo other fleets, owned by Midwest Generation and Dynegy at the time the MPS and CPS were adopted) constitute "greaterreasonableprogress than would haveresulted from the installation and operation ofBART" at the BART-subjectunits in those fleets. 10 After EPA proposed to approve the Illinois Regional Haze SIP, ELPC, Sierra Club and otherorganizations filed comments opposing EPA's approval. 11 The comrnenters first argued that underthe plain language ofSection 169A ofthe CleanAir Act, 42 U.S.C. § 7491, BART is a mandatory measure that mustbe implemented to achievereasonableprogress toward restoration ofnatural visibility conditions. 12 Second, the commenters noted severalreasons why Illinois' implementation ofthe MPS/CPS will notachieve greaterreasonable progress toward natural visibility conditionsthanBART and thuscould not constitute a lawful BART alternative

3Technical Support Document, Attachment 2 to Docket IDNo. EPA·R05-0AR·2011-0598-0002, at 12·22. 4 Illinois SIP Submittal at 19-20. Forthe remaining two BART-subject plants, Illinois proposed BART determinations. Technical Support Document at 31-38. 'Illinois SIP Submittal at 20; Technical Support Document at 22, 28. 'Technical Support Document at 28-30. 7/d. at 24-25. 8/d. at 25. 9/d. 10 Responsiveness Summary, Attachment 9 to Docket ID No. EPA-R05-0AR-2011-0598-0002, at 5 (citing 40 C.F.R. § 51.308(e)). 11 Comments ofELPC, eta/., Docket lDNo. EPA-R05-0AR-2011-0598-0004. 12 See id. at 6-7. 

### 3underthe Regional Haze Rule. 13 Among otherreasons, ELPC and SierraClub pointed outthat Illinois compared the MPS/CPS to "presumptive BART" limits for BART-subject units that were "atleast 2 to 3 times higherthan recent BARTrequirements" imposed after source-specific BART determinations, and that Illinois had failed to make similar source-specific BART determinations for any ofthe BART-subjectplants regulated by theMPS orthe CPS. 14 ELPC and Sierra Club's comments thus argued that, "ifIllinois hadconducted properBART analyses, it is virtually certainthat it would have determined that the MPS/CPS is not 'better' than BART for subject sources." 15 On July 6, 2012, EPA issued the fmal rule approving and promulgating the Illinois Regional Haze SIP. 77 Fed. Reg. 39,943, 39,943-48. In response to ELPC and Sierra Club's comments, EPA stated that it "continues to believe that Illinois' plan limits powerplant emissions as well as wouldbe achieved by directly requiring [BART]" and thus that the Illinois SIP "satisfactorily addresses CleanAirAct section 169A and Regional Haze Rule requirements." 

### !d. at 39,943. Although EPA acknowledged thatthe MPS/CPS allows BART-subject units to meetless stringent S02 and NOx emission limits than a BART requirement, EPA stated that "Illinois is requiring control across a universe ofsources that includes many sources that are not subject to BART, therebyproviding reductions that under EPA's rules and BART guidelines on alternativemeasures can compensate for any shortfall in control at BARTunits." !d. at 39,945. In addition, to address ELPC and Sierra Club's comment that the "presumptive BART'' limits analyzed by Illinois were 2 to 3 times higher than actual, source-specific BART limits would be, EPAprepared a "further analysis" using lower emission limits "ofwhetherIllinois' requirements, addressing a substantial number ofsources, canbe expected to provide greater reasonable progress toward visibility protection than application ofBARTto the more limited numberofunits subject to arequirement for BART." !d. at 39,945. This analysis was summarized in a memorandum dated May 29, 2012, by John Summerhays, EPA Region 5 Attainment and Maintenance Section, entitled "Comparison oflllinoisPowerPlant Emission Reductions to Reductions from Source-Specific Best Available RetrofitTechnology" (hereinafterthe "SummerhaysMemo"), Docket ID No. EPA-R05-0AR-2011-0598-0007. 16 For its further analysis in the Summerhays Memo, EPA assumed a S02 emissions limit of0.06 lb/MMBtu, which it defined as an average ofrecent Best Available Control Technology ("BACT") limits for S02 from EPA's national RACT /BACT ILAERClearinghousedatabase. 17 This limitis 2.5 times lowerthan the 0.15 lb!MMBtu "presumptive BART" limit that Illinois took from EPA's 2005 BART Guidelines, 40 C.F.R. pt. 51, App. Y.' 8 Using the same methodology, EPA developed a set ofsimilarly lowerNOx emissions limits as well. 19 Although its analysis did not yield source-specific BART determinations, EPA asserted that assuming an

13 See id. at 7-14. 14!d. at 7-12. 15 /d.atlO. 16 EPA placed the Summerhays Memo in the rulemaking docket at the time that it finalized the rule approving and promulgating the Illinois Regional Haze SIP. The analysis in the SummerhaysMemo was not made available to the public during the public commentperiod on EPA'sproposed approval ofthe lllinois Regional Haze SIP. 17 Summcrhays Memo at 1. 18 Technical Support Document at 23-24. 19 See Summerhays Memo at 1. 4average BACT limit as equivalentto BART would create a "conservative estimate ofthe emissions ofBARTon a source-specificbasis,"because "theemission limits representing BART, whichby definition apply to relatively old existing units, are unlikely to be lowerthan the limits that would apply to new units and would inmany cases be significantly higher."20 For all three fleets regulated by the MPS/CPS- Ameren, Dynegy, and Midwest Generation- EPA found thatthe fleet-wide S02 and NOx reductions under full implementation ofthose rules in the year 2017 would exceed the S02 andNOx reductions thatwouldbe achieved ifthose fleets' BART-subjectunits would be required to install and operate BART, even using EPA's "conservative estimate" oflowerBART limits thanIllinoispresumed. 21 With respect to S02 emissions from the Ameren fleet, EPA's analysis showed that full implementation ofthe MPS would compel S02 emission reductions ofIll,997 tons, as compared to emission reductions totaling 74,348 tons ofS02 ifBARTwere required?2 AfterEPA approvedthe Illinois regional haze SIP, the Illinois Pollution Control Board issued an opinion and orderon September 20, 2012 grantingAmeren "a variance requiring compliance with an overall annual S02 emissionrate of0.35 lb/mmBtu from 2013 through 2019" on average at each ofits powerplants23 Underthe terms ofthe variance, Ameren would notberequiredto meetthe MPS 2015 fleet-wide average emissionrate of0.25 lbs./mmBtu until January I, 2020, and it would not berequired to meetthe MPS 2017 fleet-wide average emission rate of0.23 lbs./mmBtu until January 15, 202024 Subsequent to the September 2012 Order, Ameren entered into a tentative deal to transfer ownership oftwo EGUs to MedinaValley, a subsidiary ofAmeren, and five EGUs to Illinois Power Holdings, LLC, which is ownedby a subsidiary ofDynegy. Ameren and !PH petitioned the PCB to grant to the new owners substantially the samevariance from the S021imitsthat had been granted in the September 2012 Order to theprior owners25 Overthe objection ofpublic interest groups, the PCB granted a varianceto !PH and Medina Valley26 !EPAnow proposes to revisethe regional haze SIP to includethis variance for the former Ameren fleet. II. ARGUMENT Theproposed SIP revision suffers from three separate legal flaws, each ofwhich would preventEPA from approvingthe revision. First, the revised SIP continues to ignore the statutory mandate to include source-specific BART determinations for allunits subject to BART. Second, even ifBART could be satisfied by alternativeprograms such as the MPS, a state must demonstrate that the alternative program will make greaterreasonable progressthan would BART; under these facts, the only permissible way to makethis showing is through visibility

20 Id. 21 Id. at 1-6. 22 Id. at 4. 23 Opinion and Order, Case No. PCB 12-126, at 1-2 (Ill. Pollution Control Bd. Sept. 20, 2012). 24I d. at 1-2. The Board further found (based on Ameren's own variance petition) that ofthe 7 Ameren powerplants that are regulated by the MPS, only 5 remain in operation, as Ameren retired its Meredosia and Hutsonville power plants at the end of2011. Id. 25 Opinion and Order, Case No. PCB 14-10, at I (Ill. Pollution Control Bd. Nov. 21, 2013). 26I d. at 102-04 5modeling, which TEPA failed to do. Third, as a result ofthe variances, the emissions reductions from the MPS will be lowerthan the reductions that would be achieved by BART at Ameren's fleet, demonstrating that the MPS will not make greaterreasonable progressthan would BART. A. The Proposed SIP Revision Unlawfully Substitutes Fleet-wide Emission Limits for the Unit-Specific, Five-FactorBARTAnalysis Required by the CAA. The proposed SIP revision continuesto violate the CAA mandate that each SIP contain emissionmeasures including BART. Instead ofconducting the unit-specific BART detenninations according to the five factors specified by the CAA, IEPA used the MPS to purportedly satisfy the BARTrequirements for the Ameren units subject to BART. The MPS requires reductions ofS02 and NOx across the former Ameren fleet of7 coal-fired powerplants to meet certain fleet-wide average emissionrates each year?7 The MPS' fleet-wide average emissionrates "areintended to allow the companies the flexibility to meet the fleet-wide emission limits in the most cost-effective manner" byreducing S02 andNOx emissions more at someplants than at otherplants28 The Clean Air Act does not permit a state to exemptunits from BART without going through the exemptionprocess outlined in the statute. The CAArequires that each haze SIP "contain such emission limits, schedules ofcompliance and othermeasures as may be necessary to make reasonable progress toward meeting the national goal [ofattaining natural visibility conditions]

... including" BART. 42 U.S.C. § 7491(b)(2)(A). The plain language ofthe statute provides that EPA's regulations "shall require" each SIP to contain various elements, and those elements must includeBART as a minimumrequirement ofevery haze SIP. Put simply, BART is a mandatory floor for each BART-subject unit, not anoptional requirement. The statute then specifies the only circumstances in which a source may be exempted from BART, none ofwhich apply here. 

### !d. 

### § 7491 (c). The CAA provisionthat allows some limited exemptions from BART makesplainthat any such exemption must be assessed and determined on a source-specific, not a state-wide, basis. 

### !d.§ 749l(c)(l). Furthennore, EPA may exempt a unit from the source-specific BARTrequirements ofthe CAA only where the Federal Land Managers concurwith the EPA detennination ofan exemption. We are not aware ofany statement from Federal LandManagers agreeing withthe substitution ofMPS limits for source-specific BART limits in Illinois. !EPA's interpretation ofthe statute, in which a State may substitute an alternative for BART on a state-wide or fleet-wide basis cannotbereconciled with Congress specifying very narrow standards for exempting a source from BART.29 As a result, IEPA's continued failure to

27!d. at 24-25. 28!d. at 25. 29 IfEPA relies on D.C. Circuit Court ofAppeals decisions upholding its interpretation ofthe statute, that application is incorrect as those cases (or at least that interpretation ofthose cases) fail to confonn to the plain language ofthe CAA. To the extent those cases can or must be read to allow EPA to substitute CSAPRfor BART in the manner proposed here, the cases are incorrect in that the D.C. Circuit Court ofAppeals has rewritten the statute by failing to give effect to the plain language requiring each SIP to include BARTand by disregarding the very specific parameters in the statute for exemptions from BART. See Ctr.forEnergy & Econ. Dev. v. EPA, 398 

### 6conduct unit-specific BART analyses violates theCAA. To remedy this legal deficiency, IEPA should conduct five-factor BART analyses for each unit in the former Ameren fleet subjectto BART and not finalize or submit to EPA its currentproposal. 

### B. IEPA CannotMeetits Burden to Prove that the MPS Makes GreaterReasonable Progressthan BART withoutConductingVisibility Modeling. IEPA has not conducted any modeling comparing the visibility impact from the former Ameren fleet underthe MPS andBART limits. !EPAcannotmeet its legal burdenunderEPA's regulations until it performsvisibilitymodeling showing that granting variances to !PH and MedinaValley will result in no degradation at any Class I area and, averaged across all affected Class I areas, the MPS will cause more visibility improvementthan BART would. EPA's regulations purport to allow a state to rely on an alternativeprogram in lieu of imposing source-specific BART limits ifthe state demonstrates that the alternative will make "greaterreasonable progress" than would BART. 40 C.F.R. 

### § 51.308(e)(2), (e)(3). There are two ways to make the showingthat an alternative program will achieve greaterreasonable progress. "Ifthe distribution ofemissions is not substantially different than under BART,"the alternative is deemed to make greater reasonableprogress if"the alternative measure results in greateremissionreductions." 

### !d. § 51.308(e)(3). However, "ifthe distribution ofemissions is significantly different, the State must conduct dispersion modeling to determine differences in visibility between BART and the trading program for each impacted Class I area, for the worst and best 20 percent ofdays." 

### !d. In orderto demonstrate "greaterreasonable progress," the visibility modeling must show that the alternativeprogram does not causevisibilityto decline in any Class I area and averaged across all affected Class I areas, the alternative program improves visibility relative to BART. 

### !d. 

### § 51.308(e)(3)(i), (ii). EPA conceded that the "Part 225 rules reflect substantial averaging across units and across facilities." 77 Fed. Reg. at 3971. EPA's statement reflects the fact that the MPS is designed to allow Ameren the "flexibility" to make emissions reductions at some facilities but not others, or to spread the reductions across all facilities, so long as the fleet-wide average emission limit is met. The variances do not alterthis basic element ofthe MPS; instead, the variance simply increases the overall emissions rate that the former Ameren fleet must meetby specific dates. By contrast, BART determinations mustbe made for eachunit, and the corresponding emissions limits are particularto thatunit and cannotbe traded or averaged with limits at otherunits. By design, the MPS allows the flexibility to implement emissionsreductions otherthan by imposing uniform reductions at specific units subjectto BART. !EPA thereforehas no basis for claiming that the "distribution ofemissions [underthe MPS] is not substantially different than underBART

... " 40 C.F.R. § 51.308(e)(3). Instead, !PH, the ownerofthe units in the former Ameren fleet still in operation, is authorized to meet the MPS limits in such a way that "the distribution ofemissions is significantly different," 

### id., than it would be ifits subject-toF.3d 653 (D.C. Cir. 2005); UtilityAirRegulatory Group v. EPA, 471 F.3d 1333, 1340 (D.C. Cir. 2006). Furthermore, these decisions arenot binding precedent in the 7th Circuit, which hasjurisdiction over EPA's approval ofthe Illinois regional haze SIP. 7BART units had to meet unit-specific BART limits. lfthe distribution ofemissions is significantly different under an alternative program compared to BART, a statemust conduct visibility modeling in order to meet its burden ofsecuring approval for the alternative program. To comply with EPA's governing regulations, IEPA should at a minimum conduct modeling ofthe visibility impacts from the MPS and BART. However, we urge IEPA to abandon its illegal reliance on the MPS to satisfY the BART requirements and insteadperform source-specific BART determinations for the units in the former Ameren fleet subjectto BART. C. As a Result ofthe Variance, the

### MPS Will Lead to Higher Emissions and Less Reasonable Progress than would BART. Thevariance from theMPS authorizes the former Arneren fleet to emit greater S02 emissions than would be emitted under BART, and thus IEPA cannotprove that the MPS will lead to greater reasonable progress than would BART. EPA'simplementing regulations permit a state to rely on an alternative program in lieu ofimposing source-specificBART limits only if the state demonstrates that the alternative will make "greaterreasonable progress" than would BART. 40 C.F.R. 

### § 51.308(e)(2), (e)(3). "Ifthe distribution ofemissions is not substantially different than under BART,"the alternative is deemed to make greaterreasonable progress if "the alternative measure results in greater emission reductions." Id. § 51.308(e)(3). A State must also require that "all necessary emissions reductions take placeduring the period ofthe first long-term strategy for regional haze," id. 

### § 51.308(e)(2)(iii), whichthe regulations define as ending in 2018, id. 

### § 51.308(f). The Illinois plan contains separate emissions limits for each fleet. The former Ameren fleet has its own emissions limits specified in the MPS, and the variance applies to only the former Arneren facilities. Since the Illinois planconsists offleet-specific emissions limits, and sincetheproposed SIP revision applies only to the former Arneren fleet, the BART alternative must bejudged on the same fleet-by-fleet basis. Ifthe Illinois plan is not better than BART at the former Arneren facilities, it cannot be approved by EPA. Both IEPA and EPA assumed that the distribution ofemissions would not be substantially different under the MPS as compared to BART, and compared only the emissions reductions under the MPS and BART at the former Ameren facilities. E.g., 77 Fed. Reg. at 39946. Even ifthis assumption were correct, a comparison ofthe emissions reductions demonstrates that BART would reduce emissionsmore than the MPS (as amendedbythe Arneren variance) would at the former Arneren facilities. Thetable below recreates the calculation for the remaining Ameren fleet's S02 emissions for the year 20I 7 found in Table Ib onpage 3 ofthe Summerhays Memo, but with two updates to reflect the new circumstances. First, the table substitutes the 0.35 lb/mmBtu average emissions rate now applicable under the IPH and Medina Valley variances.



### 8•. J ' •

Second, the table below excludes thepurported "emissions reductions" at the Meredosia and Hutsonvilleunits that havenow been retired for several years due to economicreasons, 30 along withemissionsreductions from Edwards Unit l, which is now being operated only for grid reliability purposes subject to a short-term System SupportResource ("SSR") agreement with MIS031 Theseplants have retired or are retiring before the MPS limits at issue here are implemented, so the MPS is not driving emissions reductions at thoseplants. Moreover, the Meredosia and Hutsonville units were not evenpurchased from Ameren by !PH and should not be includedin any analysis ofemissions reductions at the former Ameren fleet. 

### Table 1. 

### Emissions Reductions from BART vs. Variances from theMPS for Former Ameren Fleet Updated Summerhays Memo Calculation forAmeren

Table l indicates that BART would reduce S02 emissions by74,348 tons. This value is taken, unaltered, from EPA's calculations. See, e.g., 77 Fed. Reg. at 39946. Table I updates the reductions achievable undertheMPS to reflect that the variance authorizes Ameren to emit S02 at a higher fleet-wide averagerate of0.35 lb/MMBtu. As a result, the MPS wouldnow reduce S02 emissionsby 69,555 tons. Accordingly, BARTwould reduce S02 emissions from the former Ameren fleet by4,793 tons morethan wouldthe MPS (with the variances).

30 See Opinion and Order, Case No. PCB 14-10, at 7, 10 (Ill. Pollution Control Bd. Nov. 21, 2013) (noting that the September 2012 PCB Orderrequired that Meredosia and Hutsonville remain shut down through December 2020); see also Jeffrey Tomich, Ameren Corp. Prepares to Close Two OldPowerPlants in Illinois, ST. LOUIS POSTDISPATCH, Oct. 5, 2011, availableathttp://www.stltoday.com/businessllocal/ameren-com-prepares-to-close-twoold-power-planls-in/article Oa82d93f-52c8-5f43-a2d9-303e8ef438dc.html. 31 FERCDocket No. ER-13-1962-000, Order at 1-2,6 (Nov. 25, 2013), available at http://www.ferc.gov/CalcndarFiles/20131125200818-ER13-1962-000.pdf. 

### 9The new calculation in the table above demonstrates that !EPA cannot meet its burden to prove that the Illinois Regional Haze SIP will lead to greaterreasonable progress than BART with respect to the former Ameren fleet's S02 emissions. As noted above, EPA approved the Illinois haze SIP based on a comparison in the Summerhays Memobetween MPS fleet-wide average emissionrates and what it described as a conservative estimate ofsource-specific BART limits. Even assuming that the Summerhays Memo lawfully interprets the Clean Air Act and Regional Haze Rule requirements,32 the Illinois Pollution Control Board's grant ofvariances to IPH and Medina Valley will require EPA to reverse its finding in the Summerhays Memo that Illinois' implementation ofthe MPS will achieve greaterreasonable progress than wouldbe achieved through the installation and operation ofBART atthe former Ameren fleet's BART

### b. I 33 su Ject p ants. IEPA should not finalize and submit to EPA a SIP revision that EPA cannot approve because it violates EPA'sregulations requiring a BART alternative to make greater reasonable progress than BART. Instead, !EPA should conduct five-factor BART analyses for the former Amerenunits subject to BART and revise the haze SIP to include such BART limits. III. CONCLUSION Forthe reasons set forth above, Earth justice, ELPC, and Sierra Club respectfully request that !EPAwithdraw its proposal and not submit it to EPA for approval. In its place, the agency should develop unit-specific BARTdeterminations for the former Amerenunits subject to BART and propose a SIP revision that includes suchBART limits. Please do nothesitate to contact the undersigned ifyou have any questions about these comments. Thank you in advance for yourconsideration ofthese important issues. Sincerely,

### ~-=-·~,-== ThomasCmar Earthjustice 5042 N. Leavitt Street, Suite I Chicago, IL 60625 (312) 257-9338 tcmar@earthjustice.org Matthew Gerhart Earth justice 705 SecondAve, Suite 203 Seattle, WA 98104

32 As noted above and for the reasons set forth in their comments on the proposed Illinois Regional Haze SIP, ELPC and Sierra Club believe that, even before the variances were granted, EPA's approval ofthe Illinois Regional Haze SIP was inconsistent with Clean Air Act and Regional Haze Rule requirements. 33 See SummerhaysMemo at I (citing 40 C.F.R. § 51.308(e)(2)). 

### IO 

# .. ' ...l ' 1**~**

II (206) 343-7340 ext. I024 mgerhati@earthjustice.org

Andrew Armstrong Environmental Law and Policy Center 35 East WackerDrive, Suite 1600 Chicago, JL 60601 (312) 795-3738 AArmst:rong@elpc.org

# A·)~ Eva Schueller Sierra Club 85 Second Street SanFrancisco, CA 94105 (415) 977-5637 eva.schueller@sietTaclub.org

# J

lllinois Environmental Protection Agency Summary ofComments and Statement State Implementation Plan Revision Submittalfor Variance Granted to Illinois Power Holdings, LLC andAmerenEnergy MedinaValley Cogen, LLC

OnJuly22, 2013, Illinois PowerHoldings, LLC ("IPH") and AmerenEnergyMedinaValley Cogen, LLC ("MedinaValley''), along with Ameren EnergyResources, LLC ("AER"), filed a Petition for Variance with the Illinois Pollution Control Board (''Board"). Illinois Power Holdings, LLCandAmerenEnergyMedina Valley Cogen, LLC, andAmerenEnergyResources, LLCv. Illinois EnvironmentalProtectionAgency, PCB 14-10. IPH and Medina Valleyrequested a variance for the electrical generating units in AER'sMulti-Pollutant Standards ("MPS") Group from boththe 2015 and 2017 sulfur dioxide ("S02") emissionrate provisions ofthe Illinois MPS, 35 

### Ill. Adm. Code 225.233, specificallythe S02 emission standards set forth in Section 225.233(e)(3)(C)(iii) and (iv). OnNovember 21, 2013, the Board granted the variance, subject to certain conditions. This variance supersedes the previously-granted variance from the MPS for the same units that AERheld. AmerenEnergyResources v. Illinois Environmental ProtectionAgency, PCB 12-126 (Sept. 20, 2012). IPH acquired ownership ofthe Ameren operating merchant generating stations (Coffeen Energy Center, DuckCreek EnergyCenter, E.D. Edwards Energy Center, Joppa Energy Center, and Newton EnergyCenter) under a transaction agreement between Ameren Corporation and IPH, and Medina Valley acquired the shuttered generating stations (Meredosia Energy Center and Hutsonville EnergyCenter). OnMay20, 2014, the Illinois Environmental Protection Agency ("Illinois EPA") held a hearing and acceptedpublic comments on the variance for thepurpose ofsubmitting such variance to the United States-EnvironmentalProtectionAgency ("USEPA") as a revisionto the Illinois State Implementation Plan ("SIP") underthe Clean Air Act ("CAA''), 42 USC 

### § 7401 etseq. In order for a variance to be considered for approval as a revisionto the SIP, the State must submit it in accordance withthe requirements of40 Code ofFederal Regulations ("CFR") 

### § 51.104. The public commentperiod closed June20, 2014. Public Comments OnJune 20, 2014, the Illinois EPAreceived the Joint Public Comment ofIllinois Power Holdings, LLC, and AmerenEnergyMedina ValleyCogen, LLC, and written comments from Earthjustice, Environmental Law and Policy Center, and Sierra Club. The Joint Public Comment ofIllinois Power Holdings, LLC, and AmerenEnergyMedinaValley Cogen, LLC, ("Joint Public Comment") summarizes commentsraised at hearing, withresponses byIPH and Medina Valley. The Joint Public Comment also statesthat while the proposed SIP revision concerns the Regional Haze SIP, it is clear that the Board carefully analyzed the variancewithrespect to attainment and maintenance oftheNational Ambient Air Quality Standards. The Joint Public Comment indicates that theBoard found the variance was appropriate as to this issue, as well as the many others considered. The Joint Public Commentrecommends that theproposed SIP revisionbe submitted to USEPA for approval as partoftheIllinois SIP.

1 

# '30 ATIACHMENT---

### The comments ofEarthjustice, Environmental Law and Policy Center, and Sierra Club statethat the proposed SIP revision suffers from three separate legal flaws, each ofwhichwould prevent USEPA from approving the revision. The comments statethat first, the revised SIP continues to ignorethe statutorymandate to include source-specific Best Available Retrofit Technology ("BART") determinations for all units subject to BART. Second, evenifBART could be satisfiedbyalternative programs such as the MPS, a state must demonstratethatthe alternative programwill make greater reasonableprogress than would BART; under these facts, the only permissible wayto make this showing is through visibilitymodeling, whichIllinois EPA did not do. Third, as a result ofthe variances, the emissions reductions from the MPS will be lower than the reductions that would be achievedbyBART atArneren's fleet, demonstrating that the MPS will not make greaterreasonableprogress than would BART.**Re~onse** 

### and Statement OnJuly 6, 2012, USEPA approved Illinois' Regional Haze Plan and found that it satisfactorily addresses Section 169A ofthe CAA and the Regional Haze Rule requirements. 

### See, 77 Fed. Reg. 39943. In its approval, USEPA stated, in part: The primaryrequirement, as specified in CleanAir Act section 169A, is for sources to procure, install, and operate BART. In some cases this requirement is met with an analysis ofpotential controls considering five· factors set out in EPA'sregional haze rule (a "five-factoranalysis"). 40 CFR 51.308(e)(!)(ii)(A). As 

### noted above, EPAhas determined thatthis requireinent canbe met bya state establishing an alternative set of emission limits which mandate greaterreasonable progress toward visibilityimprovementthandirect application ofBART ona source-bysourcebasis. 77 Fed. Reg. 39945. USEPAhas concluded that Section !69Aofthe CAA mayreasonablybe interpreted to provide thatthe requirement for BART maybe satisfied byan alternativeprogram thatprovides greater visibilityprotection inlieu oflirnitations that directly mandate BART for individual sources determined to be subject to the BART requirement. 

### See, 40 CFR 51.308(e). 77 Fed. Reg. 39944. USEPA further stated in its approval oflllinois' Regional Haze plan as follows: Inpromulgating the 1999 Regional Haze regulations, EPA statedthat to demonstratethat emissionreductions ofan alternative programwould result in greater emissionreductions, ''the Statemust estimate the emission reductionsthat would result from theuse ofBART level controls. To do this, the State could undertake a source-specific review ofthe sources inthe State subject to BART, orit could use a modified approach that simplifies the analysis." 64 FR 35742 (July 1, 1999). In guidance published onOctober 13, 2006, USEPA offered further clarification for states for assessing alternative strategies, in particular regarding thebenchmark definition ofBART to use injudging whetherthe

2•'



### alternative is better. See 71 FR60612. In

### this rulemaking, EPA stated in thepreamble that thepresumptive BART levels given in the BART guidelines would be a suitable baseline against which to compare alternative strategies where the alternativehas been designed to meet a requirement otherthanBART. 71 FRat60619; 

### see also 40 CFR 51.308(e)(2)(i)(C). Illinois' analysis is fully consistent with EPA's conclusions in this rulemaking, Nevertheless, EPAundertook further analysis comparing Illinois' strategy against more stringent definitions ofBART. Inbriet; EPA found that the alternativerestrictions imposed byIllinois canbe demonstrated to provide greateremissionreductions and greater visibilityimprovement than even very conservative definitions ofBART, even without a full analysis ofthe emission levels that constitute BART. 77 Fed. Reg. 39945. USEPA's further analysis concluded that the reductions from Illinois' plan provide significantly greater emissionreductions, especially for S02but also for nitrogenoxides ("NO."), thaneven very conservative definitions ofBART for the BART-subject units. 1 

### USEPA asserts, inpart: Giventheregional nature ofvisibility impairment, an alternative that results in lower emissions ofsulfur dioxide (S02 ) and nitrogen oxides (NO.) will generallyprovide better visibilityprotection. Thus, inthe absence ofdifferences inthe spatial distribution ofemissions, a modeling analysis is generally not necessaryto be able to conclude that an

.alternative strategywith lower S02and NOx emissions providesbetter visibilityprotection.2 Such analysis by USEPA compared Illinois' plan against a veryconservative estimate ofthe emissions ofBART ona source-specific basis. Instead ofusing presumptive limits, USEPA used emission limits described in the RACT/BACT/LAER Clearinghouse as being applied to new sources. 

### 77 Fed. Reg. 39945. Such limits (0.06 pounds per millionBritishThermal Units for S02and NO.) are as stringent and are probably more stringent than would generallybe expected to bemet at existing powerplants, dueto the design constraints that are sometimes inherent in controlling emissions at an existing facility. 

### !d. It

### is important to point out that BACT, which applies to new and modified units, is not BART, which applies to relatively old existing units. Nevertheless, theresults demonstratethat the reductions from Illinois' plan, which includes the MPS, provide significantlygreater emissionreductions, than evenvery conservative definitions ofBART for the BART-subject units. 'Memorandumfrom John Summerhays, Attainment Planning and Maintenance Section, to Files, Regarding Comparison ofIllinois Power Plant Emission Reductions to Reductions from SourceSpecific Best Available Retrofit Technology, May 29, 2012. This technical support document 

### is found inthe docket for Illinois' SIP revision approval, Docket 

### ID No. EPA-R05-0AR-20ll0598. 

### '!d. at 1. 3

### In addition, in PCB 14-10, as in PCB 12-126,AmerenEnergyResources v. Illinois EnvironmentalProtectionAgency, the Board agreed with the Illinois EPAthat ''providing credit for actions (e.g., unit shutdowns) thatresult in emissionreductions is an acceptable part ofthe regulatoryprocess" and that such "emissionreduction offsets

...are creditable and allowable." Illinois PowerHoldings, LLCandAmerenEnergyMedina Valley Cogen, LLC, andAmeren EnergyResources, LLCv. Illinois EnvironmentalProtectionAgency, slip op. at 86 (Nov. 21, 2013). The Board tookinto account S02 emission reductions from not operating the Meredosia and Hutsonville stations through2020, as well as the retirement ofE.D. Edwards Unit 1 as early as 2017, and found that therequested variance wouldproduce a net benefit to air quality. 

### /d. Conclusion As stated above, inorderfor a variance to be considered for approval as a revisionto the SIP, the Statemust submit it in accordance with the requirements of40 CFR 

### § 51.104. On November 21, 2013, the Board grantedthe variance to IPH and MedinaValley, subject to certain conditions. Accordingly, since IPH and Medina Valley sought relieffrom provisions ofthe MPS and such reliefwas granted bythe Board, the variance must be submitted to USEPA for approval as a SIP revision addressing thevisibilityrequirements underthe CAA and the Regional Haze Rule.

4