IlL.INOIS POllUTION CONTROL BOARD 

April 30, 2012 

MIDWEST GENERATION, !LC, 

WAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

) 

) 

) 

) 

) 

) 

) 

IlL.INOIS ENVIRONMENTAL PROTECTON) 

AGENCY, ) 

Respondent. 

) 

) 

PCB 12-121 

(Variance- Air) 

HEARING OFFICER ORDER 

AECili!UVED 

ClERK'S OFFICE: 

APR 3 o 2012 

STATE OF IlliNOIS 

Pollution Control Boord 

The parties are hereby notified that the above-captioned matter has been assigned to the 

hearing officer identified below. From this date forward, any document filed with the Clerk of 

the Board must also be served individually on the hearing officer. 

The parties or their legal representatives are directed to participate in a telephonic status 

conference with the hearing officer on May 3, 2012, at 1:30 p.m. The telephonic status 

conference must be initiated by the petitioner, but each party is nonetheless responsible for its 

own appearance. At the status conference, the parties must be prepared to discuss the status of 

the above-captioned matter and their readiness for hearing. 

IT IS SO ORDERED. 

~ 

Bradley P. Halloran 

Hearing Officer 

Dlinois Pollution Control Board 

James R. Thompson Center, Suite 11-500 

100 W. Randolph Street 

Chicago, Illinois 60601 

312.814.8917 
CERTIFICATE OF SERVICE 

It is hereby certified that true copies of the foregoing order were mailed, first class, on 

April 30, 2012, to each ofthe persons on the service list below. 

It is hereby certified that a true copy of the foregoing order was hand delivered to the 

following on April 30, 2012: 

John T. Therriault 

Illinois Pollution Control Board 

James R. Thompson Center 

100 W. Randolph St., Ste. 11-500 

Chicago, Illinois 60601 

~~-\~<>-- \ 

Bradley P. Halloran 

Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center 

100 West Randolph Street, Suite 11-500 

Chicago, Illinois 60601 

312/814-8917 

SERVICE LIST 

PCB 2012-121 

Stephen J. Bonebrake 

Schiff Hardin, llP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, ll., 60606-6473 

PCB 2012-121 

Kathleen C. Bassie 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, rr.. 60606-64 73 

PCB 2012-121 

Julie A. Armitage 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, ll., 62794-9276 
ILLINOIS POLLUTION CONTROL BOARD 

May3, 2012 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

ORDER OF THE BOARD (by J.A. Burke): 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB 12-121 

(Variance - Air) 

On April 10, 2012, Midwest Generation, LLC - Waukegan Generating Station (Midwest 

Generation) filed a petition for a variance (Petition) for its electric generating station (Station), 

Agency I.D. No. 097190AAC, located at 401 East Greenwood Avenue, Waukegan, Lake 

County. The station is located on approximately 200 acres in a partially-developed industrial 

area. Midwest Generation seeks a variance from the provisions of 35 Ill. Adm. Code 

225.296(a)(l) and (c)(l) for the 12-month period beginning December 31, 2013 and ending 

December 31,2014. 

Midwest Generation states that, in light of significantly changed circumstances since 

adoption of the rule, Midwest Generation's current operation plans will provide northeastern 

Illinois with a "substantial net benefit" in air emission reductions, while continuing to comply 

with the emission limits of the rule, most of which have already been achieved. Pet. at 1. 

Midwest Generation seeks a variance from two of the components of the Combined Pollutant 

Standard (CPS) codified at 35 Ill. Adm. Code 225.291 - 225.299 and 225.Appendix A "in order 

to avoid arbitrary and unreasonable hardship by permitting the company to adapt to 

unanticipated conditions that have evolved since the adoption of the CPS." !d. at 2. Specifically, 

Midwest Generation seeks a variance from the compliance dates applicable to station unit 7 for 

the installation of flue gas desulfurization equipment (Section 225.296(a)(l)) and the conversion 

of the hot-side precipitator on that unit (Section 225.296(c)(l)). Midwest Generation requests 

the variance for a period of one year, from December 31, 2013, until December 31, 2014, with 

no change in the existing emission rate limits of the CPS. !d. Midwest Generation notes that, in 

an agreement dated February 28, 2012, the Environmental Law and Policy Center, the Sierra 

Club, the Natural Resources Defense Council, and the Respiratory Health Association of 

Metropolitan Chicago, have stated that, in "recognizing the net benefits to the CPS realized by 

the early retirements of [Midwest Generation's] Fisk and Crawford coal-fired units," they would 

not oppose this request for a variance for station nnit 7. !d. at 3. 

The Environmental Protection Act requires the Illinois Environmental Protection Agency 

(Agency) to provide public notice of a variance petition, including notice by publication in a 
2 

newspaper of general circulation in the county where the facility is located within 14 days after 

the petition is filed. 415 ILCS 5/37(a) (2010); 35 ill. Adm. Code 104.214. The Agency is also 

required to file its recommendation on the variance with the Board within 45 days after the filing 

of the petition, or at least 30 days prior to a scheduled hearing, whichever is earlier. 35 Ill. Adm. 

Code 104.216. Midwest Generation's petition was filed on Apri!IO, 2012. Therefore, 

newspaper notice was required by Tuesday, April24, 2012, and the Agency recommendation is 

cmrently due Friday, May 25,2012. Within 14 days after service of the Agency's 

recommendation, Midwest Generation may file a response to the Agency recommendation or an 

amended petition. 35 Ill. Adm. Code I 04.220. 

Midwest Generation does not request a hearing "because no federal law is affected" by 

the requested variance. Pet. at 28. However, Midwest Generation reserves its right to request a 

heming should the United States Environmental Protection Agency approve Illinois' Best 

Available Retrofit Technology and Regional Haze State Implementation Plan prior to issuance of 

the Board's order. Jd. Midwest notes that it would waive the decision deadline to a later date to 

accommodate such a hearing. I d. The Board will hold a heming on the variance petition (1) if 

the petitioner requests a hearing, (2) if the Agency or any other person files a written objection to 

the variance within 21 days after the newspaper notice publication, together with a written 

request for hearing, or (3) if the Board, in its discretion, concludes that a hearing would be 

advisable. 415 ILCS 5/37(a) (2010); 35 Ill. Adm. Code 104.224, 104.234. 

The assigned hearing officer is responsible for guiding the parties toward prompt 

resolution of this matter through whatever status calls and hearing officer orders he determines 

are necessary and appropriate. Hearings, if necessary, will be scheduled and completed in a 

timely manner, consistent with the decision deadline (see 415 ILCS 5/38(a)), which only 

Midwest Generation may extend by waiver (see 35 Ill. Adm. Code 101.308). If the Board fails 

to take final action by the decision deadline, Midwest Generation may deem the requested 

variance granted for a period not to exceed one year. See 415 ILCS 5/38(a) (2010). Currently, 

the decision deadline is August 8, 2012 (the !20th day after the Apiii10, 2012 filing). See 35 Ill. 

Adm. Code 104.232. The Board meeting inmiediately before the decision deadline is scheduled 

for July 26, 2012. 

IT IS SO ORDERED. 

Chairman Holbrook Abstained. 

I, John Therriault, Assistant Clerk of the Illinois Pollution Control Board, certify that the 

Board adopted the above order on May 3, 2012, by a vote of 4-0. 

r~. 

John Therriault, Assistant Clerk 

Illinois Pollution Control Board 
Electronic Filing -Received, Clerk's Office, 05/04/2012 

BEFORE THE ILLINOIS POLl.IJTION CONTROL BOARD 

MTD\VEST GENERATION, LLCWAUKEGAl"' GENERATING STATION. 

Petitioner, 

,, . 

ILLTNOIS ENVlRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) PCI.I 12-121 

) (Variance- Air) 

) 

) 

) 

) 

NOTICE OF FILING 

To: 

John T. Therriault. Assistam Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suire I 1-500 

l 00 Wesr Randolph 

Chicago, nliuois 60601 

Bradley Halloran. Hearing Offic;:r 

Illinois Pollution Control Board 

James R. ·n10mpson Center 

Suire 11-500 

1 00 West Randolph 

. Ch.icago, !llinois 60601 

Charles lv!aloesilUl 

l!linois E1wironmemal Protection Agency 

Division of Legal Cuunsel 

l 011 North Grm1d Avenue. East 

P.O. Box 19276 

Springfield. Ulinois 62794-9276 

PLEASE TAKE NOTICE that , . .,.e have today tiled with the Oflice of the Clerk of the 

Pollution Control Board ADDITIONAL EXHIBIT TO PETITION FOR V ARJANCEExhibit I I. copies of which are herewith served upon you. 

Dated: !I.-lay 4, 2012 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

SCHIFF HARDfN LLP 

Attorneys for Midwest Generation, LLC 

Kathleen C. Bassi 

Stephen J. Bonebrake 

233 South Wacker Drive. Suite 6600 

Chicago, Illinois 60606 

Phone: 312-258-5567 

Fax: 312-258-5600 

kbassi@schillhardin.com 
Electronic Filing -Received, Clerk's Office, 05/04/2012 

CERTI.FJCATE OF SERVICE 

I, the undersigned, certify that on this 4th day of May, 2012, I have served electronically 

the attached ADD1TJONAL EXHIBIT TO PETITION FOR VARIANCE- Exhibit ll. upon 

the fol!O\\~ng persons: 

John T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 1 1-500 

100 West Randolph 

Chicago, Tllinois 60601 

Bradley Halloran, Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

I 00 West Randolph 

Chicago, !Uinois 6060 I 

hallorab@ipcb.state.il.us 

. Kathleen C. Bassi 

SCHIFF HARDIN LLP 

Attorneys lor Midwest Generation, LLC 

Kathleen C. Bassi 

Stephen J. Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, Hlinois 60606 

Phone: 312-258-5567 

Fax: 312-258-5600 

kbassimlscbif!hardin.com 

Charles Matoesian 

Illinois Environmen.tal Protection Agency 

Division of Legal Counsel 

1021 North Grand Avenue, East 

P.O. Box 19276 

Springfield, lllinois 62194-9276 

charles.matoesian@illinois.gov 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

BEFORE THE lLLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERUION, LLCWAUKEGAN GENERA, TING STATION, 

Petitioner, 

v. 

lLLINOlS ENVIRONl\'lENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB 12-121 

(Variance- Air) 

ADDITIONAL EXHIBIT TO PETITION FOR VARIA.i\ICE 

Exhibit 11 

NOW COMES Petitioner, MIDWEST GENERATION, LLC- WAUKEGAN 

GENERATING STAT10N, and submits the additional exhibit to its Petition tor Variance as 

referenced in the Petition. More specifically: 

I. On April I 0, 20 12.!Vlidwest Generation, LLC- Waukegan Generating Station. 

Petitioner in rltis matter (hereafter "Midwest Generation" or"Petitioner"), submined a Petition 

for Vari~nce to the Pollution Control Board. 

2. M.idwest Generation understands from the Hearing Officer assigned 10 this matter 

that the Board accepted Midwest Generation's Petition at its May 3rd Board meeting. 

3. On March 8, 2012, M.idwest Generation sent no rices of its intent to decommission 

the coal-fired boilers at the Fisk and Crawford Generating Stations to P Jlvl Imerconllection, LLC. 

See Ex h. 7 to the Petition for Variance. 

-I-
Electronic Filing -Received, Clerk's Office, 05/04/2012 

4. In footnote 17 on page 17 of the Petition, Midwest Generation stated that it would 

provide copies of responses from PJM to these notices if they arrived dwing the pendency of the 

variance proceeding. 

5. On May 3, 2012, collnsel for Midwest Generation and for the Illinois 

Environmental Protection Agency ("Agency") met in a status conference call with the Hearing 

Offi~er. During that status call, counsel for Midwest Generation indicated that Midwest 

Generation has received such responses. Counsel for the Agency and the Hearing Officer agreed 

that Midwest Generation could submit this additional exhibit at this time. 

6. Therefore, consistent with footnote 17 of the Petition, Midwest Generation 

herewith submits two letters from PJM dated April 5, 2012, and a letter from Monitoring 

A.nalytics dated April 10, 2012, to the Board as Exhibit 11 to the Petition. P JM states in its 

letters that "after a detailed study of the PJM 2012 Transmission System," it "did not identify 

any reliability violations'' that would result from the shutdowns of the Fisk and Crawford 

generating un[ts. 

by: 

Dated: May 4, 20[2 

Respectfully submitted, 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION 

-2-
Electronic Filing- Received, Clerk's Office, 05/04/2012 

Kathleen C. Bassi 

Stephen J. Bonebrake 

SCHIFF HARDIN, LLP 

233 South Wacker Drive, Suite 6600 

Chicago, lllinois 60606 

312-25&-5500 

Fax: 312-258-5600 

k hassi@schi fthardi n. cern 

-3-
Electronic Filing- Received, Clerk's Office, 05/04/2012 

April 5, 2012 

John C. Kennedy 

Senior Vice President Genera.lion 

Midwest Generation, LLC 

235 Remington Blvd. 

Suite A 

Bolingbrook, IL 60440 

Re: Generator Deactivation Request for FISk 19 

Dear Mr. Kennedy, 

955 Jefferson Avenue 

Valley Forge Corporate Center 

Noms~l\, ?A \£Mf}~2497 

Paul McGlynn 

Director- System Planning 

This letter is submitted on behalf of PJM lnterc.onnection, L.L.C. ('PJM"), in response to the notice 

submilted on behalf of Midwest Generation, LLC, dated March 8, 2012, requesting lo deactivate the 

following generator located in the P JM region: Fisk Unit 19, effective no later than December 31, 2012. 

In acccrdance with Section 113.2 of the PJM Open Access Transmission Tactff (PJM Tariff), PJM 

Interconnection Analysis (and the affected Transmission Owner) perfom1ed a detailed study of the PJM 

Transmission System and did not identify any reliability violations resulting ftom the proposed deactivation 

of the Fisk 19 generating untt. 

Since there are no reliability violations associated with deactivation of this generating unit, consistent with 

Section 113.2 of the PJM Tariff, the FISk 19 generating unit may be deactivated at any time. Please 

confirm the date on which you will deactivate !his generating uniL ~o. Monitoring Analytics, LLC, lhe 

Independent Market Monitor for PJM, has indicated that they must also conclude a market power analysis 

prior to the generating unit deactivafion. Monitoring Analytics. LLC will be responding separately to you 

with their conclusions. 

Please be advised that PJM's determination does not supersede any outstanding contractual obligations 

between the Fisk 19 generating unit and any other parties that must be resolved before deactivating the 

generator. 

In accordance with the PJM Tactff, Part: VI, Subpart C, Section 230.3.3, the Capacity InterconnectiOn Rights 

associated with Generating Capacity Resource will terminafe one year ftom the Deactivation Date unless 

the holder of such rights submits a new Generation Interconnection Request within one year af'.er the 

Deactivation Date. Also, if a generating unit is receiving Schedule 2 payments fur Reactive Supply and 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

Voltage Control, the generating unit owner must inform PJM when the unit is deactivated so that the 

payments may be adjusted. 

Please contact Bill Patzin {610-666-4698) {patziw@pjm.com) in PJM's Interconnection Coordination 

Department to confirm the Deactivation Date or if you have any questions regarding PJM's analysis or the 

generator deactivation process. 

Very truly yours, 

Paul McGlynn 

Director, System Planning 

11594228 

Atlachrnent 

cc: Michael J. Kormos. Senior ViD!l President PJM {korrnosmj@pjrn.com} 

Reem Fahey, Vice President, EMMT (rfahey@edisonmission.coml 

Joseph Bowring {Joseph.Bowring@mo0itoringanalytics.corn} 
General 

Electronic Filing- Received, Clerk's Office, 05/04/2012 

Deactivation Study 

Eisk 19 Generating Unit 

PJM received a deactivation notice from Midwesl Generation LLC for the Fisk 19 generating unit which has 

a capacity of 326 MW. Midwest Generation LLC has requested a deactivation date of no later than 

December31, 20t2. 

Reliab!lity Analysis Re~;ults 

PJM Interconnection Analysis department performed the following studies for the 326 MW Fisk 19 

generator and found no re:liability violations: 

o N-1 Thermal and Voltage Study 

• None 

o Generator Oellverability Study 

• None 

o N-1·1 Thermal and Voltage Study 

• None 

o Load Dellverablllty 

• None 

System Reinforcements None ······· 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

April 5, 2012 

John C. Kennedy 

Senior Vice President, Generation 

Midwest Generauon, LLC 

2,3,5 Reminglon Blvd. 

Suite A 

Bolingbrook, IL 60440 

Re; Generator Deactivation Request for Crawford 7 and 8 

Dear Mr. Kennedy, 

855Je~ifS<:m 

Valley Forge CorpJrate Cemer 

Nomstown, P?, 19403-2497 

Paul McGiynn 

rnre-ttm - SVSIB"ll :Oi~rni1D 

This letler is submitted on behalf of PJM Interconnection, L.L.C. ["P~M'). in response to the notice 

submitted 011 behalf of Midwest Generauon, LLC, dated March 8, 2.012, requesting to deacliva!e lhe 

following generators located in !he PJM region; Crawford Nos. 7 and 8, effective 30 days from the date 

PJM received !he request to deactivate Crawford units 7 and 8, out no later !han December 31, 2014. 

In accordance with Section 113.2 of the P JM Open Access Transmission Tariff (PJM Tariff), PJM 

Interconnection Analysis (and the affected Transmission Owner) perfonned a detailed study of the PJM 

2012 Transmission System and did not identify any reliability 11iolations resulting from the proposed 

deaclivation of the Crawford 7 and 8 generating units. 

Since there are no reliability violations associated with deactivation of these generating units, consistent 

with Section 113.2 of the PJM Tariff, the Crav.iord 7 and 8 generating units may be deactivated at any lima 

Please confinn the date on which you will deactivate this generating unit If the Crawford 7 and 8 

generating units are not deactivated until after May 2013, PJM will need lo pe!fonn additional analysis. 

Also, Monitoring Analytics, LLC, the Independent Market Mon~odor PJM, has indiceted lhatthey must also 

conclude a market power aqa!ysis prior to the generating units deactivation. Monftoring Analytics, LLC will 

be responding separately to you with their condusioos. 

Please be advised that P JM's determination does not supersede any outstanding contractual obligations 

between the Crawford 7 and B generating units and any other parlit!s that must be resolved before de<~ctivating the generator. · 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

In accordance wtlh the PJM Tariff, Part VI, Subpart C, Section 230.3.3, the Capacity lnterconneclion Rights 

assoc"!ated 'hilh Generating Capacity Resource will terminate one year from the Deactivation Dale unless 

the holder of such rights submits a new Generation Interconnection Request within one year after the 

Deactivation Date. Also, if a generating unit is receiving Schedule 2 payments for Reactive Supply and 

Voltage Control, the generating unit owner must inform PJM when !he unit is deactivated so that the 

payments may be adjusted. 

Please contact Bill Patzin (610-66€-4698) (patziw@pjm.com) in PJM's Interconnection Coordination 

Department to confirm the Deactivation Date or if you have any questions regardrng PJM's analysis or the 

genera1or deactivation process. 

Very truly yours, 

Paul McGlynn 

Director, System PI ann ing 

Attachment 

cc: Michael J. Kormos, Sen)or Vice President, PJM {kormosmj@pjro.com} 

Reem Fahey: Vice President, EMMT {rfahey@edisonmission.com) 

Joseph Bownng {Joseph.Bowling@moniloringanalytics.com} 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

Deactivation Study 

Crawford Generating Units Nos. 7 and 8 

General 

P JM received a deactivation notice from Midwest Generation LLC for the Crawford 7 and 8 generating units 

which have a capacity of 213 MW (U7) and 319 MW (US). Midwest G!lneration LLC has requested a 

deactivation date of as soon as possible but no later than December 31, 2014. 

Reliability Analysis Results 

PJM Interconnection Analysis department performed the following stu(jies fpr tile 213 MW Crawford 7 and 

319 MW Crawford 8 generating uni1s and fOund no reliability violations: 

o N-1 Thermal and Voltage Study 

• None 

o Generator Deliverability Study 

• None 

o N-1-1 Thennal and Voltage Study 

• None 

o Load Dellverabillty 

• None 

SVs!em Reinforcements 

None 
Electronic Filing -Received, Clerk's Office, 05/04/2012 

Monitoring 

Analytics 

VIAEMAJL 

AprillO. 2012 

Reen' Fahey 

Vice President, Market Policy & Market Operations 

Edison Mission Marketing & Trading 

Mon!tonng Analyu::s. LLC 

1621 Van Buren Avcn~. Swtc 160 

vaney Forge Corpmaie Center 

EaglevJIIe, fA 19403 

Phone: 611}271-8050 

fax; 610-27~*8057 

Re: Proposed Deactivation of Midwest Generation Units: Crawford 7 & 8, Fisk 19 

Dear Ms. Fahey: 

On March 8, 2012, Midwe.stGeneration, LLCsubmitted to P)M Interconnection, L.L.C. notice of 

proposed permanent retirement of !he Crawford units 7 & 8, no later !han December 31, 2014 

(or as early as approved by PJM) and the Fisk 19 uni~ no later !han December 31,2012 (or as 

early as approved by P)M). Monitoring Analytics, acting in its capacity as the tndependent 

Market Monitor for P)M (IMM), must perform a market power analyru of the proposed 

deactivation. 

Section fV of Attaclunent M-Appendix to the P)M Open Access Transmission Tariff (OATf) 

provides:' 

[T]he Market Monitoring Unit shall analyze !he effects of the proposed 

deactivation with regard to potential market power issues and shall notify the 

Office of the Interconnection and !he generator owner (of [sic], if applicable, its 

designated agent) wilhin 30 days of the deactivation request if a market power 

issue has been identified. Such notice shall include the specific market power 

impact resulting from the proposed deadivation of the generating unit, as well 

as an initial assessment of any steps that could be taken to mitigate the market 

power impacl 

The IM},1 requested and received additio.nal information from .Midwest Generation. Based on 

om review, the IMM concludes that the decision to retire the above listed units does not appear 

to raise market po'Ner issues at this time. 

Sec also PjM Monual14D (Generator Operational Requirements)§ 9 at 67-68. 
Electronic Filing- Received, Clerk's Office, 05/04/2012 

The IMM analysis cUd not consider any market power issues that could arise in cormection with 

any P]M determination that reliable system operations may require this unH to continue 

operating after the retirement dates specified above.2 

Please contact me if you have any questions about the information provided. 

Sincerely, 

\ ~ .. 

. rrJ"""";:f,L-[ '{)J~-") 

'ioseph E. Bowring 

cc: Andy Ott, P]M Interconnection, L.L.C. 

Michael Kormos, P]M Interconnection, L.L.C. 

S..PJMOAIT§V. 
Electronic Filing- Received, Clerk's Office, 05/09/2012 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION ,LLC 

WAUKEGAN GENERATING STATION, 

Petitioner, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

TO: 

John T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 60601 

Kathleen C. Bassi 

SCHIFF HARDIN LLP 

Kathleen C. Bassi 

Stephen J. Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

kbassi@schiffhardin.com 

NOTICE 

PCB 12-121 

(Variance- Air) 

Bradley Halloran, .Hearing Officer 

Illinois Pollution Control Board 

James R Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 60601 

Please find attached the CERTIFICATE OF PUBLICATION OF NOTICE OF PETITION FOR 

VARIANCE and APPEARANCE ofthe Illinois Enviromnental Protection Agency that was 

electronically filed with the Illinois Pollution Control Board today. If you have any questions, 

please feel free to contact me. 

ILLINOIS ENVIRONMENTAL PROTECTION 

AGENCY 
Electronic Filing- Received, Clerk's Office, 05/09/2012 

DATED: May 9, 2012 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

217/782-5544 

By:~~ Charles E. Matoesian 

Assistant Connsel 

Division of Legal Connsel 
Electronic Filing- Received, Clerk's Office, 05/09/2012 

BEFORE THE JLLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION ,LLC 

WAUKEGAN GENERATING STATION, 

Petitioner, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

PCB 12-121 

(Variance- Air) 

CERTIFICATION OF PUBLICATION OF NOTICE OF THE PETITION FOR 

VARIANCE 

NOW COMES .Respondent, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY 

("Illinois EPA"), by its attorney, Charles E. Matoesian, and pursuant to Section 104.214(£) of the 

Illinois Pollution Control Board ("Board") rules, certifies to the Board that notice of the Petition 

for Variance was placed in the Waukegan News Sun on April24, 2012. A copy of this notice is 

included as attachment "A." 

DATED: May 9, 2012 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

217/7782-5544 

Respectfully submitted, 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY 

By:~~~ Charles E. Matoesian 

Assistant Counsel 

Division of Legal Counsel 
I 

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If the I.:!J,ri:>lalUI\.' nppi'0\1!S it, 

a bill spml.l;(trud by R!!p .• JoAnn 

Osmund, R·Antit)ch, wottld allow stat{• offici:Jls lo ch<\r.i,'<'! 

an nnnuul or dnily ftletu st:tk> parks. An au· 

mmludmi1:'.<;ion fcC' W(luld lx• no 

mon•llum $2-5 ancl a d:tilr pa,"S nrmmd $5lo $8. 

The House ;lppt'O\'L•d Osmond's nn:usure by 81·2!) in 

March, and it is now tno\•iug 

lhmugh lht! Setwt.c. Tlu.' odg.i· 

1\N"f!OCH 

Hlinois lawmakers are considering nllowing stnte cfficials 

ta charge visitors an annual or tlaUy fee to enter state parks 

such as Illinois Beach State Park in I'IKHO 

n;,\ hi!l \1'\)tt\d ch:.utc to 

:inyonc Wh() parks, 

hut thl.! Scnnle may ruu!!nd lhe bill lu alli:.•cl 

only 

11\inui::; is :lll\Oilg only Sl!Vl'Jl 

Shll('S that do nol- ch:u-gl! slale· 

park ndmis.'>iuns. The oUwrs 

an• Hawaii, Iowa, (>.f.issuuri, 

Ohio, Ptu.ul.o.;ylv:mia fUld 1\mUI)SSL't'. 

The permits would ll\ll Uil· 

ply to people merely driving 

tiU\)ttgh the P<U'k, altcmling M 

e\'entlikcn wedding.Ol'Custom· 

{'1'$ nl restnul';utts and lodges on 

p:u·k Jll1.lpcrly, Osmond s:.Ud. 

"'l\1·cnty-liw dnllars a y(.'ar is 

not a hugc auwuttt of money," 

(),;mond snid. ···Mhst undl•t-sland we huv(' to mnintuin 

(till' ptuk'>) or tlll'y m-e jtt'll nol 

safe." 

.M:u·c }>1illt•J; di.t't•d.m· of lhe 

slate Dcp:.ui.ment or Ntttlu·al 

Re:-;om·ceg, said Uw idea of 

dwrgiug fees isn'l 

mcrety to keep thl.' pa1:kS buildings looking uke. it's the 

h(.'nllh unU of the pat'ks 

and visitors. Hl' snit! the biggest 

costs \oomitlg over the parks 

m-e t•rods, roofs ofbuildingslikc 

bathrooms or picnic pul'ilions, 

ami lreutmunl to keep 

nnd rivi!rs dean. 

A11 45 million 

pt•l'Y<'::tr visilll!iunis' 

stal('·owut'<i m1.Luml pt•npmiit•s, 

iududing stale p:u·ks, nflll·inl" 

shy. DNH otflcials wcmld 

wl1ich ptopet·tiQo; wouhl n•quirc 

,,dmi:;sion:;, nMming they (\Jllld 

adupt a rlill't:onmt · [ll)licy for 

those hiking tlwdiffsat. popul:u· 

Stttrred l"Wck Slat(! Park dum 

flW otln!J':\ who jusl WMll to mli.' 

the Jlk:nic tnbkos ul ChtUtuuhon 

State-l':tt-k. 

Sl-alc funding fm· llw 

lwd I)Ct'!l cut from S2:J mUliot1in 

2006 tn $!) millilm iu 

lmdgd. Abottt u dot.<la pttdt-i 

wen• do.<;<.•d \.x>cntl$l' of !Judgct 

cuts w1dur funner Go\·. Hod 

Blagujevidt. 

Ollidr:Us estimate the pmIJOSL'<l t!llti1UlC(! Jt!L•S Wllllld 

bring in $7-8 million. The Jlt!J'· 

mit.<; would g:ive the parks d<•<licutcd fwtd:l, like hunting and 

fishing tbes do fm· wildlifi• l\1'\W;.. 

Millet· says Ult) 

wouldn't ilL">taU gate.-; or toll 

b()Oths. The wnukl al· 

luw the depru:tmcnt to set pricl!S fm· permits that could be dir--

pli\}'ml in cat wimluws, sln.tilal' 

to tl<;hing and !muting licenses. 

Purk pcrsound would umnitor 

lhe pen nits ;:ult! lines fut· lhuse wlm don't huw them. 

Village turns projected 2012 budget deficit into surplus 

BY DIANA KUYPER 

I !<lth.l 

fu'\JTlOCH - The l;w.lg't)t 

pktUI'l' liU:;. yeflr uL•:tdy :1s 

j:,"l'im us last y.:!ru· whNt vi!ltll;iC 

officials were hat'd-pn•sscd 

reduce a projected S\.1 million 

deficit. [Jt<;tead, the vitlngC' will 

finish up fiseaJ yeur 2012 with 

a stll'plus of SS5,000, thanks in 

plU't to unuxpL'Clcd sail'S tax 

!"C\'CUUC. 

"'\W nt'C in a simil:u· pu,;ition 

as last }"1'111' as prl.!plll'C the 

2013 budg(•l," s.aid \'ill:ti,'C Ad· 

miui.<>tratot· J:WJl\'> Keim. "Our 

situation has only lmpwvNI lx'-

cauSL' ur lhl.' hnt'tl choioos :md 

cuts \l'e have made OWl' tltl.' past 

feW\'()tlJ'$." 

lie a $<J:J,lOO shtwt· 

full in the li:>ettl year 2t)J3 hw.!· 

get that $1.1.8 million in 

expenditures. "But we stm1:etl 

2012 with n !lrqjected sho!'lfal! 

of JO liltll'S llmt aruouut. \V(• ju;;t 

lt:tve to stay tlw cout'St' on our 

lisenJ fitness pt'O),'TlUn." 

Siii(:C 2008 \'ill."lb't! statT has 

reduced li'Om mort• t!L'lu 

IOU to 78 

to t't.'ilttec lt"<plmdil\u-e;:; 

lhlm u high of $11 million to less 

limn $Hl million mmually. 

h;\d maiutainud lhc level uf staffing of fuur years ngo, we would 

looking at a $2 to $3 millilm 

dt•liciluext 1\i'im s:1itl. 

A utility 't:tx imp!Qltl('ltted in 

Jnnumy 2010 h<\S so far gt•uuratt.>d abcml $21 mlU"ton,. with 

portions l)f it allucnkrl annultliy 

toward building re-St!l'\'1! fund, 

d<•fidt I..-.>tluctlon and capita! im· 

Meanwhile the \'ill:tgu is 

!>till dl•aling with H 

$30(),000 deficit in U1e &'Wcr 

nnd w:ttt•r fund. A nttc iuere:,:->eimp!emcnh.>d last yc.u· is <tl least 

gencmUng l!llOUJ.:h c:r:tm l'i!\'· 

omue lu Ctil'i!l' puym(!nls 

011 tlJC klw-iuteresl !EPA loan 

U$<!d to btlild till' 

Ler ln•;.ttment pl:mL 

.Although Kcim 2 to 

3 p!!l"l'CJlt illt'I\1<\S('S next. YL'cu· 

in property ta ...... lax ami 

iucomc t.ux the village 

continues to on a "shOt!· 

stl"ing hud!IVt." 

"\Yt• at-e stt1.1ggliug tr. maitt· 

tnin G.'i mile:> of . ..;ttwt<> and 44 

villngt"! huilo.lh1!,rs, induding- l'\'· 

e1-ything from sht.'tls and well 

h\lu:;es to vitlagt> hall <llld pttblic 

work£ fadlit it·s,'' Kcim sui d. 

Polluti

local<'d il}l ake County 

.fulf.ilil!.!.J&!!!lty rwimt farm\ 

filed with the Jllinois Pollutio

lor variance under Title IX o

{"Act") {'115 tLCS SJScc. 3

pursu;mt to Sectiun :15 of 

Adm. Code 10·1 to grant a 

Stand:vd_c.llililied at .li.JJI 

antj 22UDJlt:rulix A as Ma! 401 East 

11!.\l: instaflillion of flue 

on that w1jt 

relief from the.PJ!l.'li.Sill.!!S..Q

Decembe

may De obtained through t

Board's office address is 

Thompson Ce111er, 100 We

Chicago, Illinois 60601 (tele

The Illinois Environmental 

solicits tile views ol 

varlanr.e. Adchess an'J com

fvbtoesian Assistant Attoro

Legal Counsel. Illinois Cnvi

North Grar!d Averwe East. 

Illinois 62i'9-l-9276, telepho

The Illinois EPA is preparin

ordered by the h

the recommendation by .M!l

open tor VJritten comments 

recommendation ami shoul

address specified above. T

office for inspection, excep

!rom disclosure under 35 I

available disclosur

A heating may be held afte

Anyone may rcqucs\ a hearin

the variance and a rr.ques1 f

olfice, no later I han lwe!lly-o

this Notice. tile !Joard must 
Electronic Filing- Received, Clerk's Office, 05/09/2012 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION ,LLC 

WAUKEGAN GENERATING STATION, 

Petitioner, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

v. 

ILLINOfS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

APPEARANCE 

PCB 12-121 

(Variance- Air) 

The undersigned, as one of its attorneys, hereby enters an Appearance on behalf of the 

Illinois Environmental Protection Agency. 

DATED: May 9, 2012 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

217/782-5544 

ILLINOIS ENVIRONMENTAL PRO' CTION 

AGENCY 

By~: ~~~--~~~ 

Charles E. Matoesian 

Assistant Counsel 

Division of Legal Counsel 
Electronic Filing- Received, Clerk's Office, 05/09/2012 

STATE OF ILLINOIS 

COUNTY OF SANGAMON 

) 

) 

) 

ss 

PROOF OF SERVICE 

I, the undersigned, an attorney, state that I have served electronically the attached 

the CERTIFICATE OF PUBLICATION OF NOTICE OF PETITION FOR VARIANCE 

and APPEARANCE of the Illinois Enviromnental Protection Agency upon the following 

persons: 

TO: 

Jolm T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 60601 

Kathleen C. Bassi 

SCHIFF HARDIN LLP 

Kathleen C. Bassi 

Stephen J. Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

kbassi@schiffhardin.com 

Dated: May 9, 2012 

l 021 North Grand Avenue East 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

217.782.5544 

217.782.9143 (TDD) 

Bradley Halloran, Hearing Officer 

Illinois Pollution Control Board 

James R Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 60601 

ILLINOIS ENVIRONMENTAL 

PROTECTION AG~ 

c-c;::/ 

Charles E. Matoesian 

Assistant Counsel 

Division of Legal Counsel 
IAECIEIVED 

ClERK'S OFFICE 

ILLINOIS POLLUTION CONTROL BOARD 

May23, 2012 

MAY 2·3 2012 

STATE OF ILLINOIS 

Pollution Control &lll!'d 

MIDWEST GENERATION, LLC, 

WAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

) 

) 

) 

) 

) 

) 

) 

ILLINOIS ENVIRONMENTAL PROTECTON) 

AGENCY, ) 

Respondent. 

) 

) 

HEARING OFFICER ORDER 

On May 3, 10, 14 and 22, 2012, all parties participated in telephonic status conferences 

with the hearing officer. Discussions centered on whether or not a hearing was needed and, if 

needed, the hearing date. 

The parties or their legal representatives are directed to participate in a telephonic status 

conference with the hearing officer on May 29, 2012, at 11 :00 a.m. The telephonic status 

conference must be initiated by the petitioner, but each party is nonetheless responsible for its 

own appearance. At the status conference, the parties must be prepared to discuss the status of 

the above-captioned matter and their readiness for hearing. 

IT IS SO ORDERED. 

\ 

Bradley P. Halloran 

Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center,'Suite 11-500 

100 W. Randolph Street 

Chicago, Illinois 60601 

312.814.8917 
2 

CERTIFICATE OF SERVICE 

It is hereby certified that true copies of the foregoing order were mailed, first class, on 

May 23, 2012, to each of the persons on the service list below. 

It is hereby certified that a true copy of the foregoing order was hand delivered to the 

following on May 23, 2012: 

John T. Therriault 

Illinois Pollution Control Board 

James R. Thompson Center 

100 W. Randolph St., Ste. 11-500 

Chicago, lllinois 60601 

~~-1.~,~- \ 

Bradley P. Halloran 

Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center 

100 West Randolph Street, Suite 11-500 

Chicago, lllinois 6060 I 

312/814-8917 

SERVICE LIST 

PCB 2012-121 

Stephen J. Bonebrake 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, IL 60606-6473 

PCB 2012-121 

Kathleen C. Bassi 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, IL 60606-6473 

PCB 2012-121 

Julie A. Armitage 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, IL 62794-9276 

PCB 2012-121 

Charles E. Matoesian 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, IL 62794-9276 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION ,LLC 

WAUKEGAN GENERATING STATION, 

Petitioner, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

TO: 

John T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, TI!inois 60601 

Kathleen C. Bassi 

SCHIFF HARD It"! LLP 

Kathleen C. Bassi 

Stephen l Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, illinois 60606 

kbassi@scfliffhardin.com 

NOTICE 

PCB 12-121 

(Variance- Air) 

Bradley Halloran, Hearing Officer 

illinois Pollution Control Board 

James R Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, lllinois 6060 I 

Please find attached the ILLINOIS ENVIRONMENTAL PROTECTION AGENCY 

RECOMMENDATION that was electronically filed with the Illinois Pollution Control Board 

today. If you have any questions, please feel free to contact me. 

ILLINOIS ENVIRONMENTAL PROTECTION 

AGENCY 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

DATED: May 25, 2012 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

217/782-5544 

B,~?dl Charles E. Matoewm 

Assistant Counsel 

Division of Legal Counsel 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

Petitioner, 

vs. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB 12-121 

(Air- Variance) 

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY RECOMMENDATION 

NOW COMES the Illinois Environmental Protection Agency ("Illinois EPA" or 

"Agency'') by its attorney, Charles E. Matoesian, in response to the Petition for Variance of 

Midwest Generation, LLC-Waukegan Generating Station ("Midwest Generation" or "Petitioner") 

from the provisions of35 TIL Adm. Code 225.296(a)(I) and (c)(1) for the 12-month peliod 

beginning December 31,2013, and ending December 31,2014. Pursuant to Section 37(a) of the 

Illinois Environmental Protection Act ("Act") [415 ILCS 5/37(a)(2010)] and 35 Ill. Adm. Code 

104.2 I 6, the illinois EPA neither supports nor objects to the Illinois Pollution Control Board 

("Board") granting Midwest Generation's petition as specified in this recommendation. In 

support of this recommendation, the Illinois EPA states as follows: 

I. INTRODUCTION 

I. On Aplil I 0, 2012, Petitioner, Midwest Generation, filed a petition seeking a variance 

from the provisions of35 Ill. Adm. Code 225.296(a)(1) and (c)(l) of the Combined 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

Pollutant Standard ("CPS") for the 12 month period beginning December 31, 2013, and 

ending December 31, 2014. 

2. The variance would be for Unit 7 at the Waukegan Generating Station ("Waukegan" or 

the ("Station"). The variance will give Midwest Generation an additional year to install 

Flue Gas Desulfurization ("FGD") equipment and convert the hot-side precipitator on 

that unit to a cold-side precipitator or shut down the unit. 

3. In return, Midwest Generation agrees to retire the coal-fired boilers at both the Fisk 

Generating station and the Crawford Generating station earlier than might otherwise be 

required under 35 Ill Admin. Code 225. Petition for Variance at 2-3. 

4. On April24, 2012, the lllinois EPA published notice of Midwest Generation's petition in 

the Waukegan News Sun pursuant to 415 ILCS 5/37(a)(2010) and 35 Ill. Adm. Code 

104.214(a). Letter notice of the Petition was also sent on April19, 2012, to numerous 

State Representatives and State Senators along with members of Congress, the Chairman 

of the Lake County Board and the Lake County State's Attorney. Many other interested 

parties were notified by letter, as well. Others were notified by e-mail. A few letters 

were returned as undeliverable and a second attempt to contact those people occuned 

where it was deemed necessary and prudent. All returned letters were added to the file. 

To date, no public comments have been received regarding tllis matter. 

5. Should any comments be received before the end of the conunent period, the Agency will 

file an amendment to its Recommendation addressing any necessary issues. 

6. Pursuant to 35 Ill. Adm. Code 104.234, the Board accepted the Midwest Generation's 

variance petition for hearing on April30, 2012. 

2 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

7. The Illinois EPA is required to make a recommendation to the Board on the disposition of 

a petition for variance within forty-five (45) days of filing of the petition or any 

amendment thereto or thirty (30) days before a scheduled hearing pursuant to 35 Ill. Adm. 

Code 104.216. 

II. BACKGROUND 

8. The Waukegan Generating Station, Agency I.D. No. 097190AAC, is an electric 

generating station owned and operated by Midwest Generation, LLC. The Waukegan 

Generating Station is located at 40 I East Greenwood Avenue, Waukegan, Lake County, 

Illinois 60087-5197. Petition for Variance at 3. 

9. Waukegan is a major source subject to the Clean Air Act Pennitting Program 

("CAAPP"). 415 ILCS 5/39.5 (2010). Petition at 6. The Illinois EPA issued a CAAPP 

penni! to Midwest Generation for Waukegan on Febmary 7, 2006 .. !Q. As Petitioner 

states, tbis petmit is under appeal at PCB 06-146. Id. 

10. On July 19,2007, tbe Illinois EPA issued Midwest Generation aconstmction permit 

authorizing the installation of activated carbon injection ("ACf') equipment at tbe 

Waukegan Station, as required by tbe CPS. Id. Midwest Generation appealed this 

permit at PB 08-020. !fl. This permit has been partially stayed. Id. at 7. 

11. On November 19, 2010, the Agency issued Midwest Generation a construction permit 

authorizing tbe installation of a dry sorbent injection system and the conversion of the 

hot-side ESP to a cold-side ESP for Waukegan Unit 7. Id. Midwest Generation has 

obtained a one-year extension for this pemtit. Id. 

12. The Fisk Generating station is tbe subject ofpennit appeals at PCB 08-018 and PCB 06-

3 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

057. The Crawford Generating station is the subject ofpennit appeals at PCB 08-019 

and PCB 06-056. 

13. The Agency accepts and incorporates by reference the description ofthe facility in Part I, 

paragraphs one through six of the Petitioner's Petition labeled "Background". See 

Petition p 3-6. 

14. To the best of the Agency's knowledge, there are no state air pollution enforcement 

actions currently pending before the Board. 

15. The Petitioner appears to be involved in one case in the United States Court of Appeals. 

for the 7th Circuit, United States v.Midwest Generation, 12-1026 (2012). 

III. RELffiF REQUESTED 

16. The variance would be for Unit 7 at the Waukegan plant. ld. at 9. 

17. The provisions from which :Midwest Generation seeks relief- are as follows: 

Section 225.296 Combined Pollutant Standard: Control Technology 

Requirements for NOx, S02, and PM Emissions 

a) General Technology Requirements for NOx and 802. 

I) On or before December 31, 2013, the owner or 

operator must either pennanenily shut down or 

install and have operational FGD equipment on 

Waukegan 7; 

*** 

c) Control Technology Requirements for PM. The owner or 

operator of the two specified EGUs listed in this subsection 

that are equipped with a hot-side ESP must replace the hotside 

ESP with a cold -side ESP, install an appropriately 

designed fabric filter, or permanently shut down the EGU 

by the dates specified. Hot-side ESP means an ESP on a 

coal-fired boiler that is installed before the boiler's air-preheater 

[SIC] where the operating temperature is typically 

4 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

at least 5500 F, as distinguished from a cold-side ESP that 

is installed after the air pre-heater where the operating 

temperature is typically no more than 3500 F. 

1) Waukegan 7 on or before December 31, 2013 .... 

35 Ill. Adm. Code 225.296 (a)(l) and (c)(1). 

18. The variance will give Midwest Generation an additional year to install FGD equipment 

and convert the hot-side precipitator on that unit to a cold-side precipitator or shut down 

the unit. Jd. at 9-10. 

19. Petitioner stresses that it is not that it cannot comply with the CPS. !d. at 16. Rather, it 

would be expensive and inefficient for it to do so. !d. Moreover, since its request results 

in a net environmental benefit, it would be arbitrary and umeasonable to make it comply 

with 35lll. Adm. Code 225.296(a)(l) and (c)(!) of the CPS. 

JV. FACTS PRESENTED IN THE PETITION 

20. As required by 35 Ill. Adm. Code 104.216(a), the Illinois EPA has investigated the facts 

alleged in Midwest Generations Variance Petition. To date, no public comments have been 

received. 

21. ln order to achieve compliance with the CPS, Midwest Generation requests a variance for 

one year from 35 Ill. Adm. Code 225.296(a)(1) and (c)(1) in order to allow the Petitioner 

to assess the economic situation for continued operation of Waukegan 7 and either install 

a. dry sorbent injection system and convert the hot-side ESP to a cold-side ESP or, shut 

down the unit. 

22. Midwest Generation examined several options to comply with the requirements of 

5 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

Section 225.296(a)(l) that FGD equipment be installed or the unit shuts down by 2013. 

Id. at 10. 

23. If allowed to delay the installation of the dry sorbent system by a year, Midwest 

Generation states that it can install both the Unit 7 dry sorbent system and the Unit 8 dry 

sorbent system at the same time. Id. This, Midwest Generation believes, will lead to 

significant cost savings. Id. 

24. Midwest Generation also points out that they will need to convert the ESP from hot-side 

to cold-side and they obtained a permit for this when they obtained the constmction 

permit for installing the dry sorbent injection system. Id. 

25. The conversion of the ESP will also require the shutdown of Unit 7 for an extended time 

which must be coordinated with PJM, the regional transmission system operatm. Id. at 

13. This will also affect the timing of the construction activities. Id. 

26. In the meantime, the USEPA developed a new regulatory framework. Concerning 

mercury, delaying the replacement of the hot-side ESP will further delay for control of 

mercury and other hazardous air pollutants fmm coal-fired boilers, but they will still be 

controlled and Waukegan will still reduce mercury emissions significantly prior to 

implementation of the federal Mercury Air Toxics Standard ("MATS"). Id. at 13. 

2 7. After the promulgation by the USEP A of the MATS, USEP A also promulgated the 

Cross-State Air Pollution Rule ("CSAPR"). Petitioner points out that the Clean Air 

Mercury Rule ("CAMR") and Clean Air Interstate Rule ("CAIR"), which formed the 

basis of the CPS, were both replaced by CSAPR and MATS. The new CSAPR is 

significantly more stringent than CAIR, but it has been appealed anrl it is uncertain if 

6 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

the deadlines in the CSAPR will also be delayed, or if the conditions ofthe CSAPR will 

change assuming it survives the appeal. Id. at 15-16. The one-year extension granted by 

the variance will help to synchronize all of these varions timing requirements. Id. at 15. 

28. The l1linois EPA has reviewed the information supplied by the Petitioner and found it to 

be accurate. The calculations concerning emission reductions are also accurate. 

29. Accordingly, the Petitioner's variance results in a net environmental benefit. 

V. ENVIRONMENTAL IMPACT 

30. Petitioner asse11s that there are hvo monitoring stations operated by the Agency located in 

Lake County: "No. 24 at the Waukegan Notih Fire Station, AIRS Code 170971002, and 

No. 25 at Zion Camp Logan, AIRS 170971007. 2010 AQ Rpt., p. 34. Ozone is monitored 

at the Waukegan North Fire Station: ozone and PM2.s are monitored at the Zion Camp 

Logan monitor." Id. at 5-6. The Waukegan station closed down in 2010. There is also a 

monitoring station in Northbrook, 170314201. 

31. There have been 19 exceedances ofthe National Ambient Air Quality Standard 

("NAA QS") for ozone measured at these monitoring stations for either the 1 hour 

standard or the 8 hour standard during the 2009,2010, and 2011 ozone season. Quality 

assured data is not yet available for 2012. 

32. The central argument of Midwest Generation is that the accelerated decision to close (or 

retrofit) the coal-fired boilers at Fisk and Crawford and the reductions that will occur as 

the result of the decision will more than compensate for the increased pollution from 

delaying the retrofit of Waukegan 7. The emission reductions presented by the Petitioner 

assume that the Fisk and Crawford units would remain operating and they would not 

7 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

upgrade their pollution control equipment until required to do so by the CPS. This 

analysis allows several years worth of avoided emissions to offset the single additional 

year of emissions from Waukegan 7. 

33. Based on the available information, Midwest Generation has shown that there will be an 

environmental benefit to the granting ofthe variance. The CPS requires the Petitioner to 

achieve a system-wide S02 emission rate of 0.44 lb/mmBtu in calendar year 2013. Id. at 

17. The early retirement of the coal-fired 1mits at Crawford and Fisk, based upon when 

the CPS would have required retrofitting them with pollution control equipment, gives 

the Petitioner cumulative estimated reductions (considering the increase in emissions 

from Waukegan 7 for one year) ofS02 of 32,231 tons for years 2013 through 2018, 

particulate matter reductions of 5,602 tons for years 2013 through 2018 and NOx 

emissions reductions of 9,556 tons for yem·s 2013 through 2018 should the variance be 

granted (obviously more emission reductions if Fisk and Crawford close in September, 

2012). See Table I, Petition p. 21. Mercury emissions will, however, increase by 20 

pounds. ld. 

34. Petitioner notes that the USEPA has stated that while mercury is a concern, there is a 

greater com:ern for fine particulate matter emissions. Midwest Generation stresses that 

the reduction in PM precursors, S02 and NOx, outweighs any deferral in the reduction of 

mercury that would be required under the CPS. Id. at 23. 

35. Fmthermore, the Petitioner states that because of the persistent and bioaccumulative 

nature of mercury, the reductions in mercury emissions from Fisk and Crawford because 

of the early closure, mitigate the extra year of mercury emissions from Waukegan 7. Id. 

8 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

at 20. The Illinois EPA agrees, especially considering the vast difference in emissions 

avoided compared to emissions produced. 

36. Petitioner stresses that it will operate and comply with all other provisions of the CPS 

during the term of the Variance. I d. at 23 - 24. 

VI. ARBITRARY AND UNREASONABLE HARDSHIP 

37. In considering whether to grant or deny a variance pursuant to Section 35(a) of the Act, 

the Board is required to determine whether the Petitioner has shown that it would suffer 

an arbitrary or unreasonable hardship if required to comply with the regulation or pem1it 

requirement at issue. The Act provides that "The Board may grant individual variances 

beyond the limitations prescribed in this Act, whenever it is found, upon presentation of 

adequate proof, that compliance with any rule or regulation, requirement or order of the 

Board would impose an arbitrary or unreasonable hardship." 415 ILCS 5/35(a)(2010). 

38. Petitioner states that the need for the variance results from two factors. First, the ongoing 

deterioration in energy market prices combined with substantial new federal 

environmental regulations have made continued investment in the Petitioner's fleet 

questionable and subject to reconsideration at this time. Id. at 2. Second, the CPS 

requires Waukegan Unit 8 to be retrofitted with FGD equipment by December 31, 2014, 

and Petitioner has determined that it can gain cost and other efficiencies by concurrent 

bidding of the two construction projects together for concurrent building. Id. Unit 7 will 

comply with the State's unit-by-unit limitations by the CPS's January 1, 2015 deadline. 

Id. at 19-20. 

9 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

39. Petitioner demonstrates that there is a net benefit to the environment from the early 

closure of Fisk and Crawford stations, in exchange for a delay of one year to control or 

close Waukegan Unit 7. Id. at 22. Thus, the hardship to the Petitioner should the 

variance not be granted outweighs any impact on human health and the environment. Id. 

Petitioner claims that none of these conditions were foreseen when the CPS was written, 

and therefore, to enforce the CPS as written would impose undue economic hardship on 

it. Id. at 2. Should the Board not grant the variance, Petitioner states that it will have to 

incur the added costs from not taking advantage of the efficiencies in bidding out the 

work on Units 7 and 8. Petitioner notes that if it is required to retrofit Unit 7 by the 

current time!ine in the CPS, the costs might be economically impractical and result in the 

permanent closure ofUnit 7 and the subsequent loss of jobs. Id. at I 0. Petitioner states 

that it does not seek a CPS fleet-wide increase in emissions, and that the shutdown of 

Fisk and Crawford will more than offset the one-year delay in achieving any emission 

reductions from Waukegan Unit 7 by the installation ofFGD. 

40. It is correct that the regulatory regime which formed the CPS has changed dramatically. 

USEP A has issued new, and quite different, rules to replace CAIR and CAMR. The 

Petitioner is also correct in stating that the closing of the coal-fired boilers at Fisk and 

Crawford will compensate for running the Waukegan 7 an extra year without FGD. 

VII. CONSISTENCY WITH FEDERAL LAW 

41. Pursuant to Section 35 oftheAct [415 ILCS 5/35 (2010)] and 35 ill. Adm. Code 

I 04.208(a), all petitions for variance must be demonstrated to be consistent with federal 

law. Midwest Generation states in its Petition that "[t]he provisions from which Midwest 

10 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

Generation seeks relief are not currently part of the lllinois SIP and are not federally 

enforceable and are consistent with federal laws." Id. at 25. 

42. The variance provisions ofthe Act and the Board's procedural regulations have been 

approved as part of the Illinois State Implementation Plan ("SIP") to achieve the NAAQS 

for ozone in the greater Chicago ozone attainment area. However, in order for U.S. EPA 

to recognize the substance of this variance and to incorporate tl1e provisions into federal 

law, any variance granted to Midwest Generation by the Board in this proceeding must be 

submitted to US EPA as a SIP revision. In order to meet the requirements of Section 

llO(a) of the Clean Air Act, a public hearing must be held on the proposed variance 

before it may be submitted as a SIP revision. 

43. Petitioner asserts that at the time of filing, it was consistent with Federal law. Id. at 25. 

However, the Illinois EPA has submitted portions of the CPS as amendments to the 

Illinois SIP for purposes of satisfying the Best Available Retrofit Technology ("BART") 

program (regional haze). Id. Petitioner notes that because the USEPA has not yet 

approved this SIP revision, it is not currently part of the Illinois SIP artd thus the variance 

is consistent with Federal law. Id. Should the BART/Regional Haze SIP be approved by 

the USEP A, the Petitioner states that the variance would still cause no negative impacts 

on the Illinois EPA's calculations regarding emission levels. Id. at 26. ln addition, the 

Petitioner is willing to request that the lllinois EPA submit the vm~ance order along with 

updated emission calculations as another SIP amendment. ld. 

44. Conceming mercury emissions, it was not a part of the Illinois BART/Regional. Haze SIP 

submittals. Id. at 26. Thus the one year reduction in mercury control efficiency, has no 

ll 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

import under the Clean Air Act. Id. at 27. 

45. It is probable that USEPA will concur with such a SIP revision as there will be a 

significant decrease in SOz and NOx emissions due to the early closure of the Fisk and 

Crawford stations. The Illinois EPA will submit a Board order granting the variance 

to USEP A as a SIP revision. 

VIII. COMPLIANCE PLAN 

46. As explained above, Midwest Generation has proposed an early closure of the coal-fired 

boilers at its Fisk and Crawford stations, provided that it is granted an additional year to 

install FGD equipment and convert the hot-side precipitator on Waukegan 7 to a coldside precipitator, or, alternatively, to shut down the unit. 

47. Although the relief requested would extend the compliance date for Waukegan 7 for up to 

a year, the compliance plan suggested by Midwest Generation under Part VI of the 

Petition is reasonable. 

IX. RECOMMENDATION AND CONCLUSION 

48. Pursuant to Section 35 of the Act [415 ILCS 5/37(a) (2010)] and 35 Ill. Adm. Code 

l 04.216(b), the Illinois EPA must prepare a recommendation for the Board. 

49. As explained above, Midwest Generation's proposal is expected to result in a net 

environmental benefit. 

WHEREFORE, for the reasons stated herein, the Illinois EPA neither supports nor 

objects to the Board granting Midwest Generation's Petition for Variance. 

12 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

DATED: May25,2012 

I 021 N. Grand Ave. East 

P.O. Box 19276 

Sp1ingfield, Illinois 62794-9276 

(217) 782-5544 

13 

Respectfully Submitted, 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY 

BY:~: Assistant Counsel 

Division of Legal Counsel 
Electronic Filing- Received, Clerk's Office, 05/25/2012 

STATE OF ILLINOIS 

COUNTY OF SANGAMON 

) 

) 

) 

ss 

PROOF OF SERVICE 

I, the undersigned, an attorney, state that I have served electronically the attached 

the ILLINOIS ENVIRONMENTAL PROTECTION AGENCY RECOMMENDATION 

upon the following persons: 

TO: 

John T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, lllinois 60601 

Kathleen C. Bassi 

SCHIFF HARDIN LLP 

Kathleen C. Bassi 

Stephen .T. Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

kbassi@schiffuardin.com 

Dated: May25, 2012 

1021 North Grand A venue East 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

217.782.5544 

217.782.9143 (TDD) 

Bradley Halloran, Hearing Officer 

Illinois Pollution Control Hoard 

James R Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, lllinois 60601 

ILLINOIS ENVIRONMEN;;{AL 

PROTECTION AGENCY, 

c~U 

Charles E. Matoesian 

Assistant Counsel 

Division of Legal Counsel 
ilLINOIS POLLUTION CONTROL BOARD 

May30, 2012 

MIDWEST GENERATION, LLC., 

WAUKEGAN GENERATING STATION, 

Petitioner, 

V. 

ilLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB 12-121 

(Variance- Air) 

NOTICE OF HEARING 

RECEIVED 

CLERK'S OFFICI\i 

MAY 3 0 2012 

STATE OF IlLINOiS 

Pollution Control Board 

A hearing in the above-captioned matter is scheduled and will continue as necessary on 

the following date, time and place: 

IT IS SO ORDERED. 

July 10, 2012 

!O:OOa.m. 

Waukegan City Hall 

City Council Chambers 

100 N. Martin Luther King Jr. Ave. 

znd Floor 

Waukegan, illinois 60085 

< 

\ 

Bradley P. Halloran 

Hearing Officer 

illinois Pollution Control Board 

James R. Thompson Center, Suite 11-500 

100 W. Randolph Street 

Chicago, lllinois 60601 

312.814.8917 

In compliance with the Americans with Disabilities Act and other applicable federal and State laws, rhe hearing will be accessible to individuals 

with disabilities. Person requiring auxiliary aids and services should contact John Therriault, Assistant Clerk of the Board, at 100 W. Randolph 

St., Suite I 1~500, Chicago, Illinois 60601, at telephone number 3121814-6931, fax number 3121314·3669, or1DD number 3121814-6032, five 

days prior to the hearing. 
2 

CERTIFICATE OF SERVICE 

It is hereby certified that true copies of the foregoing order were mailed, first class, on 

May 30, 2012, to each of the persons on the service list below. 

It is hereby certified that a true copy of the foregoing order was hand delivered to the 

following on May 30, 2012: 

John T. Therriault 

Illinois Pollution Control Board 

James R. Thompson Center 

100 W. Randolph St., Ste. 11-500 

Chicago, lllinois 60601 

~~.\.~<>~- \ 

Bradley P. Halloran 

Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center 

100 West Randolph Street, Suite 11-500 

Chicago, lllinois 60601 

312/814-8917 

SERVICE LIST 

PCB 2012-121 

Stephen J. Bonebrake 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, IL 60606-6473 

PCB 2012-121 

Kathleen C. Bassi 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, IL 60606-6473 

PCB 2012-121 

Julie A. Armitage 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, IL 62794-9276 

PCB 2012-121 

Charles E. Matoesian 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, IL 62794-9276 
IIU!!r C IE fV .e i:ll .. ~lili<'S OFFIC~ 

ilLINOIS POllUTION CONTROL BOARD 

August 9, 2012 

AUG-~ 2012 

tt!!..TATE OF' !UJNO!l!l r~o~~il.ltioll Control bm 

MIDWEST GENERATION, llC, 

WAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

) 

) 

) 

) 

) 

) 

) 

ll..LINOIS ENVIRONMENTAL PROTECTON) 

AGENCY, ) 

Respondent. 

) 

) 

PCB 12-121 

(Variance - Air) 

HEARING OFFICER ORDER ' •,! 

On August 9, 2012, all parties participated in a telephonic status conference with the 

hearing officer. There appears to be no remaining issues regarding the above-captioned matter 

and the parties await the Board order. 

IT IS SO ORDERED. 

\ 

Bradley P. Halloran 

Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center, Suite 11-500 . 

100 W. Randolph Street 

Chicago, lllinois 60601 

312.814.8917 
2 

CERTlFICATE OF SERVICE 

It is hereby certified that true copies of the foregoing order were mailed, first class, on 

August 9, 2012, to each of the persons on the service list below. 

It is hereby certified that a true copy of the foregoing order was hand delivered to the 

following on August 9, 2012: 

John T. Therriault 

Illinois Pollution Control Board 

James R. Thompson Center 

100 W. Randolph St., Ste. 11-500 

Chicago, Illinois 60601 

~~-\~<>~- \ 

Bradley P. Halloran 

Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center 

100 West Randolph Street, Suite 11-500 

Chicago, lllinois 60601 

312/814-8917 

SERVICE LIST 

PCB 2012-121 

Stephen J. Bonebrake 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, IL 60606-6473 

PCB 2012-121 

Kathleen C. Bassi 

Schiff Hardin, LLP 

6600 Willis Tower 

233 S. Wacker Drive 

Chicago, IL 60606-6473 

PCB 2012-121 

Julie A. Armitage 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, IL 62794-9276 

PCB 2012-121 

Charles E. Matoesian 

IEPA 

1021 North Grand Avenue East 

P.O. Box 19276 

Springfield, IL 62794-9276 
ILLINOIS POLLUTION CONTROL BOARD 

August 23, 2012 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB 12-121 

(Variance- Air) 

KATHLEEN C. BASSI AND STEPHEN J. BONEBRAKE; SCHIFF HARDIN, LLP, 

APPEARED ON BEHALF OF PETITIONER; AND 

CHARLES E. MATOESIAN; DIVISION OF LEGAL COUNSEL, ILLINOIS 

ENVIRONMENTAL PROTECTION AGENCY, APPEARED ON BEHALF OF 

RESPONDENT. 

OPINION AND ORDER OF THE BOARD (by J.A. Burke): 

Midwest Generation, LLC - Waukegan Generating Station (Midwest Generation) seeks a 

variance for twelve months from December 31, 2013 to December 31, 2014 for an electric 

generating unit (EGU) located at its station at 401 East Greenwood Avenue, Waukegan, Lake 

County, Agency No. 097190AAC. The requested valiance would extend the compliance dates in 

35 Ill. Adm. Code 225.296 entitled "Combined Pollutant Standard: Control Technology 

Requirements for NO., S02, and PM Emissions." 

As applicable to Midwest Generation's Waukegan Unit 7, the Combined Pollutant 

Standard (CPS) would require the installation of flue gas desulfurization (FGD) equipment (35 

Ill. Adm. Code 225.296(a)(l)) and the conversion of the hot-side electrostatic precipitator (ESP) 

on that unit (35 Ill. Adm. Code 225.296(c)(1)) by December 31,2013. Midwest Generation 

seeks no change in its existing numerical emission rate limits. 

In a filing responsive to the petition, the Illinois Environmental Protection Agency 

(Agency) found the facts and emission calculations in the petition to be accurate; determined that 

the requested variance "is expected to result in a net environmental benefit;" and stated that it 

"neither supports nor objects" to the petition. Agency Response (Agency Resp.) at 12. No 

hearing was requested or held concerning the petition. 

The Environmental Protection Act (Act) gives the Board authority to grant a variance 

from a Board regulation when it finds that immediate compliance with the regulation would 

impose an arbitrary or unreasonable hardship on the petitioner. 415 ILCS 5/35(a) (201 0). For 
2 

the reasons set forth below, the Board fmds that requiring Midwest Generation to timely comply 

with the December 31, 2013 deadline in Sections 225.296(a)(l) and 225.296(c)(l) for Waukegan 

Unit 7 would impose an arbitrary and unreasonable hardship. 

Additionally, the Board notes that the grant of this one-year variance will not result in an 

overall increase of emissions from Midwest Generation's facility. Due to the early shutdowns of 

the coal-fiTed unit at the Fisk Generating station in Chicago (Fisk station) and the coal-fiTed units 

at the CTawfoTd Generating station in Chicago (Crawford station), even with the compliance 

delay at Waukegan Unit 7, there will be an overall reduction of Midwest Generation's emissions. 

During the one-year term of the variance, the Board finds that the significant reductions in sulfur 

dioxide (S02) and particulate matter (PM) emissions, as well as nitrogen oxide (NOx) emissions, 

mitigate the estimated 20 pound increase in mercury emissions, noting that the mercury 

emissions Temain subject to controlTequirements. 

The Board fmds that grant of this variance will cause no significant negative impact on 

the public or the environment. The Board also fmds that the requested variance is consistent 

with federal law. The Board, therefore, grants the requested variance from December 31,2013 

to December 31, 2014, subject to certain conditions suggested by Midwest Generation and not 

objected to by the Agency. 

PROCEDURAL BACKGROUND 

On AprillO, 2012, Midwest Generation petitioned the Board for a variance from 35 ill. 

Adm. Code 225.296(a)(l) and 225.296(c)(l) requiring the installation of pollution control 

equipment or shutdown to control emissions ofNOx. S02, and PM. Midwest Generation 

requests the variance for a period of one year, from December 31, 2013 to December 31, 2014, 

with no change in the existing emission rate limits. 

The Act requires the Agency to provide public notice of a variance petition, including 

notice by publication in a newspaper of general circulation in the county where the facility is 

located within 14 days after the petition is filed. 415 ILCS 5/37(a); 35 ill. Adm. Code 104.214. 

Midwest Generation's petition was filed on AprillO, 2012. Therefore, newspaper notice was 

required by April24, 2012, and the Agency caused the notice to be published on that date. The 

Agency informed the Board that it also sent, on April 19, 2012, "letter notice" of the petition to 

"numerous State Representatives and State Senators along with members of Congress, the 

Chairman of the Lake County Board and the Lake County State's Attomey." Agency Resp. at 2. 

The Act requires the Agency to investigate each variance petition and "make a 

recommendation to the Board as to the disposition of the petition." 415 ILCS 5/37(a); 35 Ill. 

Adm. Code 104.216. On May 25, 2012, the Agency filed a document titled "Illinois 

Environmental Protection Agency Recommendation" stating that the Agency "neither supp011s 

nor objects to the [Board] granting Midwest Generation's petition." Agency Resp. at 1, 12. 

Within 14 days after service of an Agency recommendation, the petitioner may file a response to 

the Agency recommendation or an amended petition. 35 ill. Adm. Code 104.220. Midwest 

Generation made no such filing. 
3 

The Board will hold a hearing on a variance petition ( 1) if the petitioner requests a 

hearing; (2) if the Agency or any other person files a written objection to the variance within 21 

days after the newspaper notice, together with a written request for hearing; or (3) if the Board, 

in its discretion, concludes that a hearing is advisable. See 415 ILCS 5/37(a); 35 Ill. Adm. Code 

104.224, 104.234. No person filed any objection to the variance petition or requested a hearing. 

Midwest Generation noted that, in an agreement dated February 28, 2012, the Environmental 

Law and Policy Center, Sierra Club, Natural Resources Defense Council, and Respiratmy Health 

Association of Metropolitan Chicago "stated that, recognizing the net benefits to the [Combined 

Pollutant Standard] realized by the early retirements of [Midwest Generation's] Fisk and 

Crawford coal-fired units, they would not oppose this request for a variance for Waukegan 

Unit 7." Petition (Pet.) at 3. 

In the petition, Midwest Generation waived its right to request a hearing. Pet. at 28. 

Midwest Generation did not request a hearing "because no federal law is affected by the 

requested variance." !d. However, Midwest Generation reserved its right to request a hearing 

should the United States Environmental Protection Agency (USEPA) approve Illinois' Regional 

Haze State Implementation Plan (SIP) prior to issuance of the Board's order. !d. 

As background, on June 24, 2011, the Agency submitted a revision to the Illinois SIP 

addressing regional haze. See 77 Fed. Reg. 3966 (Jan. 26, 2012); Pet. at 25. The Illinois 

regional haze plan addresses Section 169A of the Clean Air Act (42 U.S.C. 7491) to remedy 

impairment of visibility in Class I areas such as national parks and wilderness areas. 77 Fed. 

Reg. 3966. The illinois submittal included adding Sections 225.296(a)(l) and 225.296(c)(l), the 

subject of this variance petition, to the Illinois SIP. Pet. at 25, Pet. Exh. 8. On January 26, 2012, 

USEPA proposed approval of Illinois' submittal. 77 Fed. Reg. 3966; Pet. at 25. As of the date 

of filing the petition, US EPA had not yet taken final action on this proposal. 

On July 6, 2012, during this variance proceeding, USEPA approved the Illinois submittal. 

77 Fed. Reg. 39943. USEPA granted fmal approval for Illinois' Regional Haze SIP as proposed 

by Illinois which means Sections 225.296(a)(1) and 225.296(c)(l) are part of the Illinois SIP 

effective August 6, 2012. !d. Any variance to Sections 225.296(a)(1) and 225.296(c)(1), 

therefore, needs to be submitted to USEPA to be incorporated into the Illinois SIP. 

One of the requirements when amending the Illinois SIP is to allow the opportunity for a 

public hearing. See 42 U.S.C. § 7410(a) and 40 C.F.R. § 51.102. Historically, when a Board 

action may affect a provision of the Illinois SIP, Board hearings on proposed rules, adjusted 

standard petitions, and variance petitions have been used to meet this federal hearing 

requirement. Accordingly, although no person requested a hearing on this variance within 21 

days of the initial newspaper notice, the Board set a hearing for July 10, 2012 in Waukegan. 

Consistent with the federal requirement that states provide an opportunity for public hearing, in 

the Board's publication of the hearing date, the Board noted that the hearing would be cancelled 

if the Board received no requests for the hearing by July 3. See 40 C.F.R. § 51.102. No person 

requested that the July 10 hearing be held and, on July 5, the hearing officer cancelled the 

hearing. 
4 

BASIS FOR ISSUING VARIANCE 

A "variance is a temporary exemption from any specified rule, regulation, requirement or 

order of the Board." See 35 Ill. Adm. Code 104.200(a)(1). Under Title IX of the Act (415 ILCS 

5/35-38), the Board is responsible for granting variances when a petitioner demonstrates that 

immediate compliance with a Board regulation would impose an "arbitrary or unreasonable 

hardship" on petitioner. 415 ILCS 5/35(a). Specifically, the Act provides: 

The Board may grant individual variances beyond the limitations prescribed in 

this Act, whenever it is found, upon presentation of adequate proof, that 

compliance with any rule or regulation, requirement or order of the Board would 

impose an arbitrary or unreasonable hardship. However, the Board is not required 

to find that an arbitrary or unreasonable hardship exists exclusively because the 

regulatory standard is under review and costs of compliance are substantial and 

certain. 415 ILCS 5/35(a); see also 35 Ill. Adm. Code 104.200, 104.208, 104.238. 

The Board may grant a variance, however, only to the extent consistent with applicable federal 

law. 415 ILCS 5/35(a). Further, the Board may issue a variance with or without conditions, and 

for only up to five years. See 415 ILCS 5/36(a). 

The burden of proof is on the petitioner. 415 ILCS 5/37(a); 35 ill. Adm. Code 

1 04.200(a)(l ), 1 04.238(a). The petitioner must prove that immediate compliance with Board 

regulations would cause an arbitra1y or unreasonable hardship that outweighs public interest in 

compliance with the regulations. See Willowbrook Motel v. PCB, 135 ill. App. 3d 343, 349-50, 

481 N.E.2d 1032, 1036-37 (1st Dist. 1985). 

BACKGROUND OF THE COMBINED POLLUTANT STANDARD 

Analysis of this variance request requires an understanding of the underlying regulation 

and the history of its adoption. In 2005, US EPA promulgated regulations requiring reduction of 

NOx, S02, and mercury. See 70 Fed. Reg. 25162 (May 12, 2005); 70 Fed. Reg. 28606 (May 18, 

2005). The Agency proposed rules to the Board to implement both federal rules. The first 

rulemaking was Proposed New 35 ill. Adm.Code 225 Control of Emissions from Large 

Combustion Sources (Mercury), R06-25 (Dec. 21, 2006). This rule amended 35 ill. Adm. Code 

Part 225 Subpart A and added Subpart B. The second rulemaking was Proposed New Clean Air 

Interstate Rule CCAIR) SO,, NOx Annual and NOx Ozone Season Trading Programs, 35 Ill. 

Adm. Code 225, Subparts A, C, D, E, and F, R06-26 (Aug. 23, 2007). 

As a result of these rulemakings, under Part 225, Control of Emissions from Large 

Combustion Sources, affected utilities are provided two compliance options for reducing 

emissions: one option imposes stringent limits on mercury emissions alone and the other option 

requires implementing mercury control technology in conjunction with emission limits for S02 

and NOx. Specifically, Sections 225.291 through 225.299, collectively referred to as the 

Combined Pollutant Standard (CPS), address the Midwest Generation facilities. 35 Ill. Adm. 

Code 225.291 - 225.299 and 225.Appendix A. On December 27, 2007, Midwest Generation 

opted in to the CPS and identified Waukegan Unit 7 as one of the EGUs to be included in the 
5 

Midwest Generation CPS Group. Pet. at 8. The specific rule provisions from which Midwest 

Generation seeks relief are: 

Section 225.296 Combined Pollutant Standard: Control Technology 

Requirements for NO., S02, and PM Emissions 

a) Control Technology Requirements for NOx and S02 

I) On or before December 31, 2013, the owner or operator must 

either permanently shut down or install and have operational FGD 

equipment on Waukegan 7 ... 

c) Control Technology Requirements for PM. The owner or 

operator of the two specified EGU s listed in this subsection 

that are equipped with a hot-side ESP must replace the hotside ESP with a cold-side ESP, install an appropriately 

designed fabric ftlter, or permanently shut down the EGU 

by the dates specified ... 

1) Waukegan 7 on or before December 31, 20 13 ... 

35 111. Adm. Code 225.296. 

MIDWEST GENERATION'S VARIANCE PETITION 

Midwest Generation petitioned the Board for a variance from two provisions of the CPS 

"to avoid arbitrary and unreasonable hardship by permitting the company to adapt to 

unanticipated conditions that have evolved since the adoption of the CPS." Pet. at 2. Midwest 

Generation points to two "unanticipated conditions." I d. First, Midwest Generation claims that 

"energy market prices" have been "significantly deteriorating" and new federal environmental 

regulations "have made long-term investment in the smallest generating units ... questionable." 

I d. 

Second, Midwest Generation determined through bidding future construction work that 

"it can gain cost and other efficiencies" by installing FGD equipment on Waukegan Unit 7 

concurrently with Waukegan Unit 8 which is due to be retrofitted by December 31, 2014. Pet. at 

2. Midwest Generation asserts that none of these conditions was foreseen when the CPS was 

adopted; and therefore these CPS provisions impose an undue economic hardship on Midwest 

Generation. ld. 
6 

Station Background 

The Waukegan Generating Station (Waukegan station) went online between 1952 and 

1962 and can generate approximately 781 net megawatts of elechicity. Pet. at 4. The station 

employs· approximately 157 people. !d. 

The CPS applies to three EGUs at the Waukegan station: Waukegan Unit 6, Waukegan 

_ Unit 7, and Waukegan Unit 8. Pet. at 4; 35lil. Adm.Code 225.Appendix A. Waukegan Unit 6 

was shut down by December 31,2001, as required by 35 Ill. Adm. Code 225.297(a)(l). Pet. at 4, 

fu. 2. The remaining two units fire coal as their primary fuel and natural gas as auxiliary fuel 

during startup and for flame stabilization. Pet. at 4. 

Particulate matter emissions from each unit are controlled by an ESP. Pet. at 4. The ESP 

for Waukegan Unit 7 is a hot-side ESP. !d. Mercury emissions are controlled by injection of 

powdered activated carbon (ACI). !d. at 5. S02 emissions are controlled by using very lowsulfur coal. !d. 

The Waukegan station is located in Lake County, which is part of the Chicago ozone and 

PM2.5 nonattainment areas. Pet. at 5, fu. 6 (includes detailed discussion of attainment status in 

Illinois). The Waukegan station is a major source of air pollution under the Clean Air Act and is 

subject to the Clean Air Act Pe1mitting Program (CAAPP). !d. at 6. 

Requested Relief 

Midwest Generation seeks relief from the requirement to perform the following activities 

by December 31, 2013 on Waukegan Unit 7: (i) permanently shut down or install and have 

operational FGD equipment (35lil. Adm. Code 225.296(a)(l)) and (ii) replace the hot-side ESP 

with a cold-side ESP, install an appropriately designed fabric filter, or permanently shut down 

the unit (35 lll. Adm. Code 225.296(c)(l)). Pet. at 9, 27. Midwest Generation requests a oneyear extension, to December 31,2014, to comply with these requirements. !d. at 10, 27. 

Midwest Generation notes that it does not seek any relief from the system-wide S02 

annual emission rates set forth at Section 225.295(b) or the NOx emission rate and control 

requirements set forth at Sections 225.295 through 225.298. Pet. at 10. Nor does Midwest 

Generation seek relief from the mercury control requirements set forth in Section 225.294. !d. 

Further, Midwest Generation does not seek relief from any CPS requirement applicable to other 

units in the Midwest Generation CPS Group. !d. 

Midwest Generation explains that it seeks this variance well in advance of the 

December 31, 2013 compliance date because long lead time is needed to plan and perform the 

construction required to comply with Sections 225.296(a)(l) and 225.296(c)(l). Pet. at 10. 

Midwest Generation states "it is essential that Midwest Generation know now whether the Board 

will grant the relief so that it does not embark on unnecessary and costly activities in anticipation 

of conshuction, as well as the actual conshuction." !d. 
7 

Examined Alternatives 

Midwest Generation examined altematives to comply with the CPS requirement in 

Section 225.296(a)(l) to install FGD equipment. Pet. at 10. First, it evaluated installing a dry 

scrubber. !d. Next, Midwest Generation evaluated installing a dry sorbent injection system at a 

cost of $18 million. !d. at II. Midwest Generation applied for and obtained a construction 

permit to install the chy sorbent injection system on Waukegan Unit 7. !d. Midwest Generation 

started constmction in 2011 but later obtained an extension of the permit. !d. 

Midwest Generation also examined altematives to comply with the CPS requirement in 

Section 225.296(c)(l) to replace the hot-side ESP with a cold-side ESP or install a fabric filter. 

Pet. at 12. First, it evaluated installing a fabric filter (baghouse). !d. at 10, 12. Midwest 

Generation faced challenges with this altemative including lack of adequate space, lengthy 

planning, and cost. !d. at 11, 12. Next, Midwest Generation evaluated converting the ESP from 

hot-side to cold-side at a cost of approximately $70 million. !d. The permit Midwest Generation 

obtained for the illy sorbent injection system also covered converting the ESP on Waukegan 

Unit 7. !d. 

Compliance Efforts and Hardship 

Construction Permit 

Midwest Generation obtained a construction permit from the Agency dated 

November 19,2010 to install the FGD equipment (a illy sorbent injection system) on Waukegan 

Unit 7 and convert the hot-side ESP on that unit. Pet. at 7, 13, Pet. Exh. 5. Midwest Generation 

also obtained a one-year extension ofthis permit from the Agency. Pet. at 7. 

Regulatory Uncertaintv 

Midwest Generation summarizes the status of two recent federal air pollution rules: the 

Cross-State Air Pollution Rule (CSAPR) (76 Fed. Reg. 48208 (Aug. 8, 2011)) and the Mercury 

and Air Toxics Standards (MATS) (77 Fed. Reg. 9304 (Feb. 16, 2012)). 

In August 20 II, USEP A adopted CSAPR to replace the Clean Air Interstate Rule 

(CAIR). Pet. at 13. Both rules were written to apply to fossil fuel-fired electric generators. !d. 

A federal court remanded CAIR to USEP A for additional action, but allowed CAIR to remain 

effective until USEP A replaced it with a new mle. !d. In response to this court order, USEP A 

promulgated CSAPR. !d. Midwest Generation characterizes CSAPR as 

significantly more stringent than the CAIR, namely the addition of assurance 

provisions or variability limits that establish hard mass emission caps on each 

subject state's emissions ofS02 and NOx. Id. at 13-14. 

Midwest Generation asserts two uncertainties with respect to implementing CSAPR. Pet. 

at 14. First, it is unclear how the Agency will implement CSAPR, including which allowance 

allocation method it will use. !d. Second, CSAPR has been challenged in federal court and the 
8 

court ordered that implementation of the mle be stayed. !d. Midwest Generation anticipates that 

even assuming the fastest case scenario where the court issues an opinion by the end of2012 

upholding CSAPR, CSAPR would become effective in 2013 and reduction in S02 allowances 

would apply in 2015. !d. 

In Febmary 2012, USEP A adopted MATS which "codifies the Utility Maximum 

Achievable Control Technology (MACT) requirement applicable to coal- and oil-fired EGUs 

pursuant to Section 112 of the Clean Air Act." Pet. at 14. Midwest Generation asserts that 

MATS "was not even proposed at the time that Midwest Generation obtained its construction 

permit" and "Midwest Generation could not have had any idea of the scope of the mle." !d. 

Midwest Generation states that MATS requires emission reductions for mercury, nonmercury hazardous metals, and hydrogen chloride. Pet. at 15. Midwest Generation explains that 

MATS allows monitoring patticulate matter emissions as a surrogate for non-mercury hazardous 

metals and the technology to control non-mercury hazardous metals is the same as for particulate 

matter, namely ESPs or baghouses. !d. For hydrogen chloride, MATS allows the option to 

comply with a S02 emission limit as a sun·ogate. !d. Midwest Generation concludes that "the 

measures that Midwest Generation must unde1take to comply with the CPS overlap with its 

compliance obligations under the MATS." !d. MATS requires compliance by April16, 2015 

with the possibility of a one-year extension. !d. 

Midwest Generation argues that CSAPR and MATS, both possibly requiring compliance 

in 2015, have "overlapping, significant S02, mercury, and PM emission reduction obligations 

that conflict with the CPS's 2013 deadlines applicable to Waukegan Unit 7." Pet. at 15. The 

one-year extension sought by the variance would "help [Midwest Generation] synchronize these 

various regulatory timing requirements." !d. Fmthe1more, Midwest Generation contends that 

"at least some of this unce1tainty" surrounding appeals of CSAPR and MATS "could be 

alleviated by deferring the deadlines at issue for Waukegan 7." !d. at 16. Coordinating 

compliance with these various obligations "could help Midwest Generation avoid additional and 

unnecessary significant costs and dismption of unit operation." !d. 

Midwest Generation, therefore, asserts compliance with the current December 31, 2013 

CPS deadlines would impose an unreasonable hardship. Midwest Generation notes that it "does 

not claim that it cannot comply with the CPS, but that doing so is arbitrary and unreasonable at 

this time and poses an undue hardship." Pet. at 16. 

Environmental Impact 

Sulfur Dioxide Emissions 

The CPS requires Midwest Generation to achieve system-wide annual average S02 

emission rates starting with 0.44 lb/mmBtu 1 in 2013 and declining in subsequent years. Pet. at 

17; 35 Ill. Adm. Code 225.295(b ). Using 2007 actual data, Midwest Generation estimates that 

1 "mmBtu" stands for million British thermal units or I ,000,000 Btu. 
9 

system-wide S02 emissions for 2013 would be 66, I 09 tons using the CPS rate of 0.44lb/nunBtu. 

Pet. at 17. 

If the Fisk station shuts down by the end of2012, Midwest Generation estimates that 

system-wide S02 emissions for 2013 would be 62,282 tons. ld. This results in a reduction of 

3,827 tons or 5.6 percent in 2013. Id. 

The CPS requires that the Fisk station be upgraded or shutdown by December 31, 2015. 

Pet. at 17. Midwest Generation calculates that the cumulative reduction of S02 emissions in 

2013,2014, and 2015 from shutting down the Fisk station by the end of2012 would tota111,481 

tons (3,827 tons per year over three years) or 7.5 percent. ld. at 18. 

The CPS requires that Crawford Urut 8 be upgraded or shutdown by December 31, 2017 

and Crawford Urut 7 by December 31, 2018. Pet. at 18. If both Crawford units are shutdown by 

the end of2014, Midwest Generation calculates that Crawford Urut 7 would not emit 

approximately 10,408 tons ofS02 in 2015, 2016, 2017, and 2018 and Crawford Urut 8 would not 

emit approximately 13,437 tons ofS02 in 2015,2016, and 2017. Pet. Exh. 9. The total 

reduction of S02 from shutting down the Crawford uruts by the end of 2014 would total23,592 

tons. !d., Pet. Exh. 9. 

In 2011, the Waukegan station emitted 9,929 tons ofS02; 3,801 tons were attributed to 

Waukegan Urut 7. Pet. at 5, 21 (Table 1). If the Waukegan station complied with the current 

regulatory deadlines, the estimated S02 emissions for Waukegan Urut 7 are 1,016 tons in 2014. 

Id. at 21 (Table 1). If the variance is granted and the retrofits required for Waukegan Urut 7 are 

delayed for one year, the estimated S02 emissions for Waukegan Urut 7 are 3,974 tons in 2014-

·an increase of 2,957 tons. !d. 

Accordingly, Midwest Generation argues that emission reductions from shutting down 

the Fisk and Crawford stations exceed the additional year of emissions from Waukegan Urut 7, 

resulting in a net benefit to the environment. Pet. at 21 (Table 1), 22, 24. In addition, Waukegan 

Unit 7 complies with an acid rain permit issued to it and will continue to do so during the term of 

the variance. Pet. at 23. 

Particulate Matter Emissions 

Midwest Generation calculates that the reduction of PM emissions in 2013,2014, and 

2015 from shutting down the Fisk station by the end of2012 would total2,084 tons. Id. at 18. If 

both Crawford uriits are shutdown by the end of 2014, Midwest Generation calculates that 

Crawford Unit 7 would not emit approximately 1,380 tons of PM in 2015,2016,2017, and 2018 

and Crawford Urut 8 would not emit approximately 2,156 tons of PM in 2015, 2016, 2017. Pet. 

Exh. 9. Midwest Generation calculates that the cumulative reduction of PM from shutting down 

both Crawford units would total3,536 tons. !d., Pet. Exh. 9. The total tons of PM reduced from 

early shutdown of the Fisk and Crawford stations would be 5,620 tons. Id. 

In 2011, the Waukegan station emitted 768 tons of PM; 140 tons were attributed to 

Waukegan Urut 7. Pet. at 5, 21 (Table 1). If the va1iance is granted and the retrofits required for 
10 

Waukegan Unit 7 are delayed for one year, the estimated PM emissions for Waukegan Unit 7 are 

157 tons in 2014. Id. If Waukegan complied with the cunent regulatory deadlines, the estimated 

PM emissions for Waukegan Unit 7 are 140 tons in2014. I d. 

Accordingly, Midwest Generation argues that emission reductions from shutting down 

the Fisk and Crawford stations exceed the additional year of emissions from Waukegan Unit 7, 

resulting in a net benefit to the environment. Pet. at 22, 24. Midwest Generation notes that 

Waukegan Unit 7 is subject to PM limitations in 35 Ill. Adm. Code 212.203 and will continue to 

comply during the tenn of the vmiance. Pet. at 23. 

Nitrogen Oxide Emissions 

The CPS requires Midwest Generation to achieve a system-wide emission rate of O.lllb 

NOJmmBtu in 2012. Pet. at 19; 35 Ill. Adm. Code 225.295(a). Midwest Generation asserts that 

the variance will not affect NOx emissions at Waukegan Unit 7. Id. 

However, Midwest Generation claims that the shutdown of the Fisk and Crawford 

stations will reduce system-wide NOx emissions. Midwest Generation calculates that the 

cumulative reduction ofNOx emissions in 2013, 2014, and 2015 from shutting down the Fisk 

station by the end of2012 would total3,456 tons. Pet. at 18. Midwest Generation calculates that 

Crawford Unit 7 would not emit approximately 2,663 tons in 2015,2016,2017, and 2018 and 

Crawford Unit 8 would not emit approximately 3,437 tons in 2015, 2016, 2017. Id. The total 

reduction ofNOx from shutting down the Crawford units would total6,100 tons. Id. 

Mercury Emissions 

Based on 2010 and 2011 actual emission data, Midwest Generation calculates that annual 

mercury emissions are 5 lbs/year at Crawford Unit 7, 3 lbs/year at Crawford Unit 8, and 8 

lbs/year at the Fisk station. Pet. at 20. Midwest Generation calculates that the cumulative 

reduction of mercury emissions in 2013, 2014, and 2015 from shutting down the Fisk station by 

the end of2012 would be approximately 23 pounds. Id. Crawford Unit 7 would not emit 

approximately 18 pounds of mercury in 2015, 2016, 2017, and 2018 and Crawford Unit 8 would 

not emit approximately 12 pounds in 2015, 2016, 2017. Id. The total reduction of mercury from 

shutting down the Fisk and Crawford units would total approximately 54 pounds. I d. 

In 2011, the Waukegan station emitted 79 pounds of mercury; 74 pounds were attributed 

to Waukegan Unit 7. Pet. at 5, 21 (Table 1). If Waukegan complied with the cunent regulatory 

deadlines, the estimated mercury emissions for Waukegan Unit 7 are 8 pounds in 2014. I d. at 21 

(Table 1). If the variance is granted and the retrofits required for Waukegan Unit 7 are delayed 

for one year, the estimated mercury emissions for Waukegan Unit 7 are 83 pounds in 2014- an 

increase of 75 pounds. I d. 

Midwest Generation argues that mercury emission reductions from shutting down the 

Fisk and Crawford stations mitigate the one-year delay in achieving emission reductions from 

Waukegan Unit 7. Pet. at 20. Specifically, Midwest Generation states 
II 

[t]he impact of a year's delay in reducing mercury emissions at Waukegan will be 

minimal and will be significantly offset by the effectively contemporaneous 

closures of the coal-fired units at Fisk and Crawford. !d. at 23. 

Based on "USEPA publications," Midwest Generation argues that "reductions in fme particulate 

matter precursors S02 and NOx resulting from early shutdowns of the coal-fired units at Fisk and 

Crawford would have a far greater benefit" than controlling mercury emissions. !d. at 23. 

Pursuant to the CPS, Midwest Generation installed mercmy control equipment on 

Waukegan Unit 7 and Unit 8 in July 2008. Pet. at 19. Since 2007, mercury emissions at the 

Waukegan station were reduced from approximately 231 pounds per year to less than 80 pounds 

per year. !d. Waukegan Unit 7 is achieving in the range of 72 percent removal efficiency when 

operating at lower loads, and Waukegan Unit 8 is consistently achieving greater than 90 percent. 

!d. at 5, 19. The CPS requirement to convert the hot-side ESP is intended to improve mercury 

removal efficiency. !d. Midwest Generation contends that using "a somewhat less efficient ESP · 

for a single year should have minimal impact." !d. at 23. Midwest Generation notes that 

Waukegan Unit 7 will comply with unit-by-unit limits in the CPS by the January I, 2015 

deadline and will continue to operate the activated carbon injection system on Waukegan Unit 7. 

!d. at 19-20; See 35lll. Adm. Code 225.294(c). Midwest Generation also asserts that "Unit 7 

will have begun significantly reducing mercury emissions prior to implementation of MATS." 

!d. at 19. 

Consistency with Federal Law 

Midwest Generation contends that the Board may grant the requested variance consistent 

with federal law. Pet. 25. On June 24, 2011, the Agency submitted a revision to the illinois SIP 

to satisfy Illinois' obligation under the Clean Air Act to develop a Regional Haze SIP. 77 Fed. 

Reg. 3966; Pet. at 25. This submittal included adding Sections 225.296(a)(l) and 225.296(c)(l), 

the subject of this variance petition, to the illinois SIP. Pet. at 25, Pet. Exh. 9. On January 26, 

2012, USEPA proposed approval of Illinois' submittal. 77 Fed. Reg. 3966; Pet. at 25. 

Accordingly, Midwest Generation concluded, at the time of its petition, that the variance seeks 

relief that is consistent with federal law, because the CPS currently is not part ofthe Illinofs SIP 

and is not federally enforceable. Pet. at 25. 

Additionally, Midwest Generation argues that the one-year delay in upgrading Waukegan 

Unit 7, as requested by the variance, would have "no negative impact on the Agency's 

calculations regarding emissions levels." Pet. at 25. In its Regional Haze SIP revision submittal, 

the Agency argued that the Midwest Generation system-wide average S02 emission rates in the 

CPS provide greater reductions than applying presumptive Best Available Retrofit Technology 

(BART) to BART-eligible units. !d. at 25-26. Midwest Generation will continue to comply with 

the S02 emission rates in Section 225 .295(b) thus not impacting the Agency's calculations. !d. 

at 26. Midwest Generation also notes that Waukegan Unit 7 is not one of the BART-eligible 

units identified in the Agency's Regional Haze SIP revision. !d. at 25. Rather, Waukegan Unit 7 

will continue to be subject to the CPS. 
12 

However, Midwest Generation acknowledges that if the SIP revision becomes fmal 

before the end of the variance te1m, the December 31, 2014 compliance date in the variance will 

conflict with the December 31,2013 compliance date in the SIP. Pet. at 26. In that event, 

Midwest Generation states that it will request that the Agency submit the variance to USEP A as 

a SIP revision. Id. Midwest Generation observes that "[i]t is possible, perhaps likely, in that 

case that the variance period could expire before USEP A took action on revising the SIP to 

reflect the variance." !d. 

Variance Conditions and Compliance Plan 

Midwest Generation proposes the following compliance plan: 

DATE ACTIVITY 

Continuously dming Comply with the system-wide S02 emissions rate set forth in 

pendency of the Section 225.295(b ). Comply with the ACI rate set forth in 

var1ance Section 225.294(g). Comply with CAIR or CSAPR, as 

applicable. Comply with the Acid Rain Program. Comply 

with all other applicable requirements. 

On or before Apply for a new or extended construction permit, as needed, 

September 15,2014 for the installation of the FGD equipment and conversion of 

the hot-side ESP or other control methodologies that Midwest 

Generation determines are more appropriate for Waukegan 

Unit 7. 

On or before Shut down Unit 7; or install and have operational FGD 

December 31,2014 equipment, and convert the hot-side ESP to a cold-side ESP or 

install an appropriately designed fabric filter. 

On or before Shut down the coal-frred unit at Fisk Generating Station. 

December 31, 2012 

On or before Shut down the coal-fired units at Crawford Generating Station. 

December 31, 2014 

Pet. at 27-28. 

AGENCY RESPONSE TO VARIANCE PETITION 

On May 25, 2012, the Agency filed a document titled "Illinois Environmental Protection 

Agency Recommendation" stating that the Agency "neither supports nor objects to the [Board] 

granting Midwest Generation's petition." Agency Resp. at 1. 
13 

Background 

The Agency recounts Midwest Generation's description of the Waukegan station and 

permit history and does not atticulate any disagreement with any ofthis portion of Midwest 

Generation's petition. Agency Resp. at 3-4. The Agency notes that there is a case pending in the 

United States Court of Appeals for the Seventh Circuit captioned United States v. Midwest 

Generatiog, Docket No. 12-1026, but does not give a reason for referencing the case. Agency 

Resp. at4. 

Requested Relief 

The Agency recognizes that Midwest Generation's petition requests a variance from 35 

Ill. Adm. Code 225.296(a)(l) and 225.296(c)(l) for twelve months beginning December 31, 

2013 and ending December 31, 2014. Agency Resp. at 1-2, 4-5. The requested variance would 

give Midwest Generation an additional year to install FGD equipment and convert the hot-side 

ESP or shut down Waukegan Unit 7. !d. at 2, 5. Citing to Midwest Generation's petition, the 

Agency points out that "Petitioner stresses that it is not that it cannot comply with the CPS" but 

"[r]ather, it would be expensive and inefficient for it to do so." !d. at 5, citing Pet. at 16. 

Further, because the variance request "results in a new environmental benefit, it would be 

arbitrary and unreasonable to make [Midwest Generation] comply." !d. 

Agency Investigation of Facts in the Petition 

The Agency informs the Board that it "has investigated the facts alleged" in the variance 

petition. Agency Resp. at 5. The Agency recounts that Midwest Generation examined several 

options to comply with the requirement of Section 225.296(a)(l) to install FGD equipment or 

shut down the unit. Id. at 6. The Agency notes Midwest Generation's assettion that installing 

the Waukegan Unit 7 equipment at the same time as the Waukegan Unit 8 equipment will lead to 

significant cost savings. !d. Furthermore, the conversion of the hot-side ESP must be 

coordinated with the regional transmission system operator. !d. 

The Agency sunmtarizes the status of various federal rules and the inipact on the 

Waukegan facility. As to mercury emissions, delaying the conversion of the hot-side ESP on 

Waukegan Unit 7 will delay control of mercury and other hazardous pollutants. Agency Resp. at 

6. However, the Agency concludes that mercury emissions will be controlled and the facility 

"will still reduce mercury emissions significantly prior to implementation of the federal 

[MATS]." !d. MATS replaced the Clean Air Mercury Rule (CAMR). !d. As to interstate air 

pollution, USEP A promulgated the CSAPR. !d. CSAPR replaced CAlR. !d. CSAPR is 

"significantly more stringent than CAlR." !d. CSAPR has been challenged in federal court and 

"it is uncertain if the deadlines in the CSAPR will also be delayed, or if the conditions of the 

CSAPR will change assuming it survives the appeal." !d. The Agency notes Midwest 

Generation's contention that a one-year extension granted by the variance will help to 

synchronize these timing requirements. !d. at 7, citing Pet. at 15. 

The Agency informs that it "has reviewed the information supplied by the Petitioner and 

found it to be accurate." Agency Resp. at 7. In addition, Midwest Generation's "calculations 
14 

conceming emission reductions are also accurate." Id. The Agency concludes "[a]ccordingly, 

the Petitioner's variance results in a net environmental benefit." Id. 

Environmental Impact 

The Agency supplements the infmmation provided by Midwest Generation as to nearby 

air emission monitoring stations. Midwest Generation stated that there are two monitoring 

stations in Lake County: Waukegan and Zion. Agency Resp. at 7, citing Pet. at 5-6. The 

Agency notes that the Waukegan station closed in 2010. In addition, there is a monitoring 

station in Northbrook. Agency Resp. at 7. The Agency reports that "[t]here have been 19 

exceedances of the National Ambient Air Quality Standard (NAAQS) for ozone measured at 

these monitming stations for either the 1 hour standard or the 8 hour standard during the 2009, 

2010, and 2011 ozone season." Id. 

The Agency concludes that "Midwest Generation has shown that there will be an 

environmental benefit to the granting of the variance." Agency Resp. at 8. The Agency 

describes Midwest Generation's "central argument" as being that the shutdown of the Fisk and 

Crawford stations will more than compensate for the increased pollution from delaying the 

retrofit of Waukegan Unit 7. Id. at 7. This argument assumes that the Fisk and Crawford units 

would otherwise remain operating and not upgrade until required to do so under the CPS. Id. at 

7-8. The early shutdown of the Fisk and Crawford stations "gives the Petitioner cumulative 

estimated reductions (considering the increase in emissions from Waukegan 7 for one year) of 

S02 of32,231 tons for years 2013 through 2018, particulate matter reductions of 5,602 tons for 

years 2013 through 2018 and NOx emissions reductions of 9,556 tons for years 2013 through 

2018 should the variance be granted." Id. at 8. 

The Agency notes that mercury emissions will increase by 20 pounds if the variance is 

granted. Agency Resp. at 8. The Agency acknowledges Midwest Generation's argument that 

"the reduction in PM precursors, S02 and NO., outweighs any deferral in the reduction of 

mercury that would be required under the CPS." Id. citing Pet. at 23. The Agency also notes 

Midwest Generation's argument that the reductions in mercury emissions from shutting down the 

Fisk and Crawford stations mitigate the extra year of mercury emissions from Waukegan Unit 7. 

Id. The Agency agrees with Midwest Generation, "especially considering the vast difference in 

emissions avoided compared to emissions produced." Id. at 9. 

Arbitrary and Unreasonable Hardship 

The Agency repeats Midwest Generation's arguments that the hardship to Midwest 

Generation from not granting the variance outweighs any impact on human health and the 

environment because there is a net benefit to the environment from the early closure of the Fisk 

and Crawford stations. Agency Resp. at 10. The Agency states that Midwest Generation is 

"correct in stating that the closing of the coal-fired boilers at Fisk and Crawford will compensate 

for running the Waukegan 7 an extra year without FGD." Id. The Agency also agrees that "the 

regulatory regime which fmmed the CPS has changed dramatically" and "USEP A has issued 

new, and quite different, rules to replace CAIR and CAMR." I d. 
15 

Consistency with Federal Law 

The Agency presents the situation created by the timing of this petition in relation to 

pending federal rules. Agency Resp. at 10-12. The Agency previously submitted portions of the 

CPS as amendments to the lllinois SIP for purposes of satisfying the federal BART program 

addressing regional haze. !d. at 11. USEPA had not yet approved this SIP revision at the time of 

the Agency's filing. !d. The Agency notes that Midwest Generation argues that the variance 

request is consistent with federal law because the CPS provisions relevant to this variance are not 

currently part of the Illinois SIP. !d. citing Pet. at 25. If the Regional Haze SIP amendments are 

approved, Midwest Generation argues that the variance would cause no negative impacts on the 

Agency's calculations regarding emission levels. !d. Midwest Generation "is willing to request 

that the lllinois EPA submit the variance order along with updated emission calculations as 

another SIP amendment." !d. citing Pet. at 26. 

The Agency asserts that any variance granted to Midwest Generation must be submitted 

to USEPA as a SIP revision. Agency Resp. at 11. Furthermore, to meet the requirements of the 

Clean Air Act, a public hearing must be held on the proposed variance before it may be 

submitted as a SIP revision. !d. The Agency states that it "will submit a Board order granting 

the variance to USEPA as a SIP revision." !d. at 12. The Agency anticipates "[i]t is probable 

that US EPA will concur with such a SIP revision as there will be a significant decrease in S02 

and NOx emissions due to the early closure of the Fisk and Crawford stations." !d. 

Compliance Plan 

The Agency notes that Midwest Generation's variance request proposes early closure of 

the coal-fired boilers at its Fisk and Crawford stations. Agency Resp. at 12. The requested 

variance would extend the compliance date for Waukegan Unit 7 by one year. !d. The Agency 

concludes that the compliance plan is reasonable. !d. 

Recommendation and Conclusion 

The Agency acknowledges that it "must prepare a recommendation for the Board" 

pursuant to 415 ILCS 5/37(a) and 35 Ill. Adm. Code 104.216(b). Agency Resp. at 12. While the 

Agency neither supports nor objects to the Board granting Midwest Generation's petition, the 

Agency concludes "Midwest Generation's proposal is expected to result in a net environmental 

benefit" !d. 

DISCUSSION 

The Act authorizes the Board to grant variances "beyond the limitations prescribed in this 

Act, whenever it is found, upon presentation of adequate proof, that compliance with any mle or 

regulation ... would impose an arbitrary or unreasonable hardship." 415 ILCS 5/35(a). 

Midwest Generation seeks relief from the requirement to perform the following activities by 

December 31,2013 on Waukegan Unit 7: (i) permanently shut down or install and have 

operational FGD equipment (35 Ill. Adm. Code 225.296(a)(l)) and (ii) replace the hot-side ESP 

with a cold-side ESP, install an appropriately designed fabric filter, or permanently shut down 
16 

the unit (35lll. Adm. Code 225.296(c)(l)). Pet. at 9, 27. Midwest Generation requests a oneyear extension, to December 31, 2014, to comply with these requirements. !d. at 10, 27. 

To obtain a variance, Midwest Generation must establish that the hardship from denying 

the variance from Sections 225.296(a)(l) and 225.296(c)(l) "outweighs any injury to the public 

or the environment" fi·om granting the variance. Marathon Oil Co. v. EPA, 242 Ill. App. 3d 200, 

206,610 N.E.2d 789,793 (5th Dist. 1993). If Midwest Generation only shows that compliance 

will be difficult, "that proof alone is an insufficient basis" for granting the variance. Id. Thus, 

"only if the hardship outweighs the injury does the evidence 1ise to the level of an arbitrary or 

unreasonable hardship." !d. 

Accordingly, the Board analyzes the injury to the public or the environment from 

granting the requested variance, and the hardship to Midwest Generation from compliance with 

the rule. The Board then weighs the hardship against the injury to detennine whether Midwest 

Generation demonstrated that the hardship is arbitrary and unreasonable to support granting a 

var1ance. 

Environmental Impact of Requested Variance 

Midwest Generation states that the variance will provide northeastern Illinois with a 

"substantial net benefit" in air emission reductions, while continuing to comply with the 

emission limits of the rule. Pet. at I. The Agency reviewed Midwest Generation's emission 

calculations and informs the Board that the estimates are accurate. Agency Resp. at 7. Further, 

the Agency agrees that the variance petition results in a net environmental benefit. !d. at 7, 8, I 0, 

12. As discussed below, the Board fmds that Midwest Generation demonstrated that the 

requested variance will reduce emissions during the term of the variance and result in a net 

benefit to the environment. 

The Board initially notes that Midwest Generation does not seek relief from any 

numerical emission limit, most notably the system-wide S02 emission rate set forth at Section 

225.295(b). Pet. at 10. Furthe1more, Midwest Generation does not seek relief from the mercury 

control requirements applicable to Waukegan Unit 7 set forth in Section 225.294 or the NOx 

emission and control requirements set forth at Sections 225.295 through 225.298. !d. Midwest 

Generation does not seek relief from any CPS requirement applicable to other units in the 

Midwest Generation CPS Group. !d. 

The Board finds that Midwest Generation demonstrated that the difference in S02 

emissions of2,957 tons resulting from the one-year delay in retrofitting Waukegan Unit 7 are 

offset by the reduced SOz emissions of 3,827 tons in 2014 from closing the Fisk station. In 

addition, the cumulative reduction of SOz emissions from shutting down the Fisk station three 

years early are 11,342 tons and the Crawford Units 7 and 8 three and four years early are I 0,408 

and 13,437 tons, respectively. Accounting for the difference in emissions at Waukegan Unit 7 if 

the variance is granted of2,957 tons, this results in a net benefit to air quality of reducing 

emissions by 32,231 tons ofS02 overall. Pet. Exh. 9. 
17 

The Board finds that Midwest Generation demonstrated that the difference in pm1iculate 

matter emissions of 18 tons resulting from the one-year delay in retrofitting Waukegan Unit 7 are 

offset by the reduced particulate matter emissions of694 tons 2 in 2014 from closing the Fisk 

station. In addition, the cumulative reduction of pm1iculate matter emissions from shutting down 

the Fisk station three years early and the Crawford units three and four years early are 2,084 tons 

and 3,536 tons, respectively. This results in a net benefit to air quality of reducing emissions by 

5,602 tons. Pet. at 21 (Table 1). 

The delay in retrofitting Waukegan Unit 7 is estimated to result in mercury emissions of 

7 5 pounds. Midwest Generation calculates that annual mercury emissions are 8 lbs/year at the 

Fisk station. Thus, the early closure of the Fisk station would only offset 8 pounds of mercury in 

2014 during the term of the variance. The cumulative reduction of mercury emissions from 

shutting down the Fisk station three years early and the Crawford units three and four years early 

total approximately 55 pounds. Thus, a negative net benefit in reduced emissions of20 pounds 

of mercury over the course of the years 2013 to 2018 would result if the variance were granted. 

Pet. at 12, Exh. 9. As the Agency noted, although the variance would result in lower emissions 

of PM, S02, and NOx than without the variance; mercury emissions would be 20 pounds greater 

with the variance. Agency Resp. at 8. However, the Board notes that Midwest Generation is not 

seeking relief from the mercury emission standards in Section 225.294 and has connnitted to 

operating Waukegan Unit 7 in compliance with the halogenated activated carbon injection rates 

as set forth in Section 225.294(g). 

Hardship to Midwest Generation from Compliance 

Midwest Generation asse11s that the following conditions were not foreseen when 

Sections 225.296(a)(l) and 225.296(c)(l) were adopted and therefore impose an undue economic 

hardship on Midwest Generation: (i) "energy market prices" have been significantly 

deteriorating; (ii) new federal environmental regulations "have made long-term investment in the 

smallest generating units ... questionable"; and (iii) "it can gain cost and other efficiencies" by 

installing FGD equipment on Waukegan Unit 7 concurrently with Waukegan Unit 8 which is due 

to be retrofitted by December 31, 2014. Pet. at 2. 

Energy Market Prices 

Midwest Generation makes the conclusory statement that "energy market prices" have 

been "significantly deteriorating." Pet. at 2. However, Midwest Generation makes no further 

mention of this basis for hardship in its petition. Midwest Generation submitted no exhibit or 

other evidence to suppm1 this contention. Midwest. Generation also did not explain how this 

condition inipacts its ability to tiniely comply with Sections 225.296(a)(l) and 225.296(c)(l). 

2 694 tons of particulate matter is based on the information in Petition Exhibit 9, dividing by 

three the avoided Fisk emissions of2,084 tons of PM over the three-year period of2013 to 2015. 
18 

New Federal Regulations 

Midwest Generation argues that uncertainty as to the scope and timing of implementing 

CSAPR and MATS causes hardship to Midwest Generation. Midwest Generation argues that 

CSAPR and MATS, both requiring compliance in approximately 2015, have "overlapping, 

significant S02, mercury, and PM emission reduction obligations that conflict with the CPS's 

2013 deadlines applicable to Waukegan Unit 7." Pet. at 15. The Agency agrees that CSAPR is 

"significantly more stringent than CAIR." Agency Resp. at 6. The Agency also agrees that "the 

regulatory regime which formed the CPS has changed dramatically" and "USEP A has issued 

new, and quite different, rules to replace CAIR and CAMR." !d. at 10. 

The one-year extension sought by the variance would allow comt challenges to CSAPR 

and MATS to run their course and Midwest Generation will be in a better position to determine 

how to proceed with required retrofits. Coordinating compliance with these regulations helps 

Midwest Generation avoid additional and unnecessary significant costs and disruption in 

operations. 

Coordinating Unit 7 Retrofit with Unit 8 

For Waukegan Unit 7 to comply with Sections 225.296(a)(l) and 225.296(c)(l), Midwest 

Generation must install FGD equipment and convert the hot-side ESP or shut down the unit. 

Midwest Generation examined alternatives to comply with these requirements and decided that 

the most cost effective option was to install a dry sorbent injection system to comply with 

Section 225.296(a)(l) and convert the hot-side ESP to a cold-side ESP to comply with Section 

225.296(c)(l). Pet. at 10-12. Midwest Generation estimates that this option will cost $88 

million as compared to installing a dry scrubber and baghouse costing $240 million. !d. at II. 

Midwest Generation already obtained a construction permit for this work but would need to incur 

the remaining costs that installation requires. !d. at 7. 

Midwest Generation is also required to perform upgrades on Waukegan Umt 8 but the 

deadline for this work is December 31,2014. Pet. at 2. Midwest Generation did not quantify the 

cost savings from performing the Waukegan Unit 7 and Unit 8 work concurrently but contends 

that they would "gain cost and other efficiencies" from performing the work concurrently on 

both units. !d. at 2. 

Weighing Environmental Impact against Hardship to Midwest Generation 

The Board finds that the environmental impact of the requested variance for the 

Waukegan station is a net benefit to air quality, considering the early shutdown of the Fisk and 

Crawford stations. Midwest Generation has shown that the variance will result in significant 

reductions in S02, NOx and PM emissions. Midwest Generation will achieve this net reduction 

in emissions by taking credit for the early shutdown of the Fisk and Crawford stations to offset 

one year of emissions due to delaying upgrades on Waukegan Unit 7. The Agency agrees with 

Midwest Generation's calculations and concludes that the shutdowns yield "cumulative 

estimated reductions (considering the increase in emissions from Waukegan 7 for one year) of 

S02 of32,231 tons for years 2013 through 2018, PM reductions of5,602 tons for years 2013 
19 

through 2018 and NOx emissions reductions of9,556 tons for years 2013 through 2018 should 

the variance be granted." Agency Resp. at 8. 

The Board recognizes that the shutdown of the Fisk and Crawford stations will not 

completely offset mercury emissions fi·om Waukegan Unit 7 during 2014. According to 

Midwest Generation's estimates, there will be approximately 75 pounds of mercury emissions in 

2014 attributable to the variance. If the cumulative emissions from the Fisk and Crawford 

station shutdowns are applied to offset mercury emissions from Waukegan Unit 7 in 2014, the 

variance would result in approximately 20 more pounds of mercury emissions than without the 

variance. The Agency notes that mercury emissions will be controlled during the variance and 

the facility "will still reduce mercury emissions significantly prior to implementation of the 

federal Mercury Air Toxics Standard." Agency Resp. at 6. The Agency also agrees with 

Midwest Generation's argument that "the reduction in PM precursors, S02 and NOx, outweighs 

any deferral in the reduction of mercury that would be required under the CPS." !d. at 8-9. The 

Board fmds that the significant reductions in S02 and PM emissions, as well as NOx emissions, 

mitigate the estimated mercury emissions, which remain subject to control requirements, during 

the variance pe1iod. See Agency Resp. at 9. 

Accordingly, the Board is persuaded that the overall reduction in pollutant emissions 

resulting from this variance strongly favors granting the variance. Against this net benefit to the 

environment from the requested variance, the Board weighed the 20 pounds of mercury 

emissions attributable to the variance and the alleged hardship to Midwest Generation from not 

granting the variance. Specifically, the Board considered the estimated $18 million in 

compliance costs from retrofitting Waukegan Unit 7. Currently, this retrofit is required to be 

completed by December 31, 2013 but Midwest Generation claims that it would be more cost 

effective and less disruptive to operations if the work could be coordinated with similar work on 

Waukegan Unit 8 due to be completed by December 31,2014. The Board previously granted 

variances, in part, to allow sources to coordinate required retrofits with other construction 

projects at a facility. See ExxonMobil Oil Com. v. illinois Environmental Protection Agency, 

PCB 11-86, 12-46 (consol.) (December 1, 2011); Dvnegy Midwest Generation, Inc. v. Illinois 

Environmental Protection Agency, PCB 09-48 (May 7, 2009). 

The CPS mandates certain deadlines for equipment upgrades or shutdowns. Through this 

variance, Midwest Generation is requesting a reordering of the compliance deadlines among 

units in the Midwest Generation CPS Group without any change in commitment toward 

complying withapplicable numerical emission standards. Midwest Generation committed to the 

early shutdown of the Fisk and Crawford stations and in return seeks to push forward the retrofit 

deadlines for Waukegan Unit 7. The purpose of a variance is to allow additional time for 

compliance by a source in appropriate cases, and granting this variance serves this pmpose. 

The Agency contends that "it would be arbitrary and Ullfeasonable to make [Midwest 

Generation] comply" with the current deadline, in part, because the variance request "results in a 

new environmental benefit." Agency Resp. at 16. Considering the overall reduction in pollutant 

emissions during the term of the requested variance, the Board fmds that requiring Midwest 

Generation to comply with the December 31,2013 deadline in Sections 225.296(a)(l) and 
20 

225.296(c)(l) is an arbitrary and unreasonable hardship. Accordingly, the Board grants the 

va1iance as requested by Midwest Generation, subject to the conditions set forth in the order. 

Consistency with Federal Law 

The Board has authmity under Section 110 of the Clean Air Act to adopt regulations that 

are part of the State's plan for implementation, maintenance, and enforcement of air quality 

standards. The variance procedure to grant relief from a Board regulation is consistent with the 

authority granted to the states under Section II 0 of the Clean Air Act. The Agency states that it 

"will submit a Board order granting the variance to USEP A as a SIP revision." Agency Resp. at 

12. The Agency anticipates "[i]t is probable that USEPA will concur with such a SIP revision as 

there will be a significant decrease in S02 and NOx emissions due to the early closure of the Fisk 

and Crawford stations." !d. The Board, therefore, finds that granting Midwest Generation a 

variance from the rule is consistent with federal law. 

Compliance Plan and Variance Conditions 

Midwest Generation's petition includes a compliance plan. Pet. at 27-28. The Agency 

did not suggest any other variance conditions beyond those proposed in the petition. The Board 

will include the proposed compliance plan as conditions to the variance. 

CONCLUSION 

The Board fmds that Midwest Generation established that requiring immediate 

compliance with the CPS upgrade deadlines for Waukegan Unit 7 by December 31, 2013 

imposes an arbitrary or umeasonable hardship. Midwest Generation seeks no change in its 

numerical emission rates but seeks to reschedule compliance with equipment upgrade deadlines. 

Also, Midwest Generation committed to reducing emissions earlier than required at two other 

facilities by permanently shutting down the facilities. 

The Board grants Midwest Generation a variance for Waukegan Unit 7 for a period 

beginning December 31,2013 until December 31, 2014 from the requirements of35 Ill. Adm. 

Code 225.296(a)(1) and 225.296(c)(1). This variance is granted subject to the conditions 

outlined in the order below. 

ORDER 

The Board grants Midwest Generation, LLC- Waukegan Generation Station (Midwest 

Generation) a variance for Waukegan Unit ?located at 401 East Greenwood Avenue, Waukegan 

in Lake County for a period beginning December 31, 2013 until December 31, 2014 from the 

requirements of Section 225.296(a)(1) and (c)(1) subject to the following conditions: 

1. During the period of the variance, Midwest Generation must: 

(a) comply with the system-wide S02 emissions rate set forth in Section 

225.295(b ), 
21 

(b) comply with the rates of injection of halogenated activated carbon as set 

forth in Section 225.294(g), 

(c) comply with the Clean Air Interstate Rule (CAIR) or Cross-State Air 

Pollution Rule (CSAPR), as applicable, 

(d) comply with the federal Acid Rain Program at 40 C.F.R. § 72, and 

(e) comply with all other applicable requirements. 

2. On or before September 15,2014, Midwest Generation must apply for a new or 

extended construction pennit, as needed, for the installation of the flue gas 

desulfurization (FGD) equipment and conversion of the hot-side electrostatic 

precipitator (ESP) or other control methodologies that Midwest Generation 

determines are more appropriate for Waukegan Unit 7. 

3. On or before December 31, 2014, Midwest Generation must either permanently 

shut down Unit 7; or install and have operational FGD equipment, and convert the 

hot-side ESP to a cold-side ESP or install an appropriately designed fabric filter. 

4. On or before December 31,2012, Midwest Generation must shut down the coalfired unit at Fisk Generating Station. 

5. On or before December 31, 2014, Midwest Generation must shut down the coalfired units at Crawford Generating Station. 

IT IS SO ORDERED. 

Chairman T. A. Holbrook abstains 

If Midwest Generation chooses to accept this variance, it must, within 45 days after the 

date of this opinion and order, file with the Board and serve on IEP A a certificate of acceptance 

and agreement to be bound by all the terms and conditions of the granted variance. "A variance 

and its conditions are not binding upon the petitioner until the executed certificate is filed with 

the Board and served on the Agency. Failure to timely file the executed certificate with the 

Board and serve the Agency renders the variance void." 35 Ill. Adm. Code 104.240. The form of 

the certificate follows: 

CERTIFICATE OF ACCEPTANCE 

I (We), , having read the opinion 

and order of the Illinois Pollution Control Board in docket PCB 12-121, dated August 23, 

2012, understand and accept the opinion and order, realizing that this acceptance renders all 

terms and conditions of the variance set forth in that order binding and enforceable. 
22 

Petitioner: MIDWEST GENERATION, LLC- WAUKEGAN GENERATING STATION 

By: 

Authorized Agent 

Title: 

Date: 

Section 4l(a) of the Environmental Protection Act provides that final Board orders may 

be appealed directly to the Illinois Appellate Court within 35 days after the Board serves the 

order. 415 ILCS 5/41(a) (2010); see also 35 ill. Adm. Code 101.300(d)(2), 101.906, 102.706. 

Illinois Supreme Court Rule 335 establishes filing requirements that apply when the Illinois 

Appellate Court, by statute, directly reviews administrative orders. 172 ill. 2d R. 335. The 

Board's procedural rules provide that motions for the Board to reconsider or modify its fmal 

orders may be flied with the Board within 35 days after the order is received. 35 Ill. Adm. Code 

101.520; see also 35 Ill. Adm. Code 101.902, 102.700, 102.702. 

I, John Therriault, Assistant Clerk of the Illinois Pollution Control Board, certify that the 

Board adopted the above order on August 23,2012, by a vote of 4-0. 

John Therriault, Assistant Clerk 

Illinois Pollution Control Board 
Electronic Filing- Received, Clerk's Office, 08/27/2012 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) PCB 12-121 

) (Varia nee- Air) 

) 

) 

) 

) 

NOTICE OF Fl.LING 

To: 

John T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 6060 I 

Bradley Halloran, Hearing Officer 

Illinois Pollution Control Board 

James R. Thompson Center 

Strite 11-500 

100 West Randolph 

Chicago, I!linois 60601 

Charles Matoesian 

Illinois Environmental Protection Agency 

Division of Legal Counsel 

1021 North Grand Avenue, East 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

PLEASE TAKE NOTICE that we have today filed with the Office of the Clerk of the 

Pollution Control Board CERTIFICATE OF ACCEPTANCE, copies of which are herewith 

served upon you. 

Kathleen C. Bass1 

Dated: August 27, 2012 
Electronic Filing- Received, Clerk's Office, 08/27/2012 

SCHIFF HARDIN LLP 

Attorneys for Midwest Generation, LLC 

Kathleen C. Bassi 

Stephen J. Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

Phone: 312-258-5567 

Fax: 312-258-5600 

kbassi!Wschiffhardin.com 
Electronic Filing- Received, Clerk's Office, 08/27/2012 

BEFORE THE ILLINOIS POLLUTION COl\'TROL BOARD 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) PCB 12-121 

) (Variance- Air) 

) 

) 

} 

) 

CERTIFICATE OF ACCEPTANCE 

I, DOUGLAS R. McFARLAN, on behalf of MlDWEST GENERATION, LLC, having 

read the opinion and order of the Illinois Pollution Control Board in docket PCB 12-121, dated 

August 23,2012, understand and accept the opinion and order, realizing that this acceptance 

renders all terms and ccnditions of the variance set forth in that order binding and enforceable. 

Dated: August~2012 

Cii2\l17363J9.l 

Petitioner: MID\VEST GEl\TERA TION, LLCWAUKEGAN GENERATING STATION 

by: 

AnlUriZed Agent 

Douglas R. McFarlan 

President 

Midwest Generation, LLC 
Electronic Filing- Received, Clerk's Office, 08/27/2012 

CERTIFICATE OF SERVICE 

I, the undersigned, certify that on this 27th day of August, 2012,1 have served 

electronically the attached ADDITIONAL EXHIBIT TO PETITION FOR VARIANCEExhibit 11, upon the following persons: 

John T. Therriault, Assistant Clerk 

Illinois Pollution Control Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 6060 I 

Bradley Halloran, Hearing Officer 

Illinois Pollution Control Board 

James R. TI1ompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 6060 I 

balloraMvipcb.state.il.us 

SCHIFF HARDIN LLP 

Attorneys for Midwest Generation, LLC 

Kathleen C. Bassi 

Stephen J. Bonebrake 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

Phone: 312-258-5567 

Fax: 312-258-5600 

khassi@schiffhardin.eom 

Charles Matoesian 

Illinois Envirorunenta:I Protection Agency 

Division of Legal Counsel 

1021 North Grand A venue, East 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

charles.matoesianiWillinois.!!ov