### Hlectronzc Ftlmg - N.ecewed, Clerk's Ojji.ce, 04/10/2012 *****PCB 2012-121 * * * * *

BEFORETHE ILLINOIS POLLUTION CONTROL BOARD
MIDWEST GENERATION, LLC- \VAUKEGAN GENERATING STATION, 

### Petitioner, \', ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, 

### Respondent. ) ) ) ) ) ) PCB12·
__ 

### ) (Variance- Air) ) ) ) ) NOTICE OF FILING To: John T. Then·iault. Assistant Clerk lllinoisPollution Contml Board James R. Thompson Center Suite 11-500 100 West Randolph Chicago, Illinois 6060I Julie Annitage Acting General Counsel Illinois Environmental Protection Agency 1021 North Grand Avenue, East P.O. Box 19276 Springfield, Illinois 62794-9276
PLEASE TAKE NOTICEthat we have todayfiled with the Office ofthe Clerk ofthe Pollution Control Board PETITION FORVARIANCE and APPEARANCES OF KATHLEEN C. BASSI and STEPHEN

### J. BONEBRAKE, copies ofwhich are herewith served upon you.

Dated: AprillO, 2012

## ElectronicFiling -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 * * * * *

SCH!FF HARDIN LLP Attorneys for Midwest Generation, LLC Kathleen C. 

### Bassi Stephen J. Bonebrake 233 South Wacker Drive, Suite 6600 

### Chicago, lllinois 60606 Phone: 312-258-5567 Fax: J 12-258-5600 kbassi@§chiiTIJardin.com

### Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

CERTIFICATE OF SERVICE I, the undersigned, certifY that on this 1Oth day ofApril, 2012, Ihave served electronically the attached PETITION FOR VARIANCE and APPEARANCES OF KATHLEEN C. BASSI and STEPHEN 

### .J. BONEBRAKE, upon the following persons: Jolm 

### T. Therriault, Assistant Clerk Tllinois Pollution Control Board James R. Thompson Center Suite 11-500 100 West Randolph Chicago, Illinois 60601 

### and via the U.S. Postal Service, postage affixed and prepaid: Julie Armitage ActingGeneral Counsel Illinois Environmental Protection Agency 1021 North 

### Grand Avenue,

### East P.O. Box 19276 Springlield, Illinois 62794-9276



### SCHiffHARDIN

### 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 

### kbassiriuschifll1ardin.com

### Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

BEFORETHE ILLINOIS POLLUTION CONTROL BOARD
MIDWEST GENERATION, LLC, WAUKEGAN GENERATING STATION, 

### Petitioner, Y, 

### ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, 

### Respondent. ) ) ) ) ) ) ) ) ) ) )


### APPEARANCE PCB 12-----,-,-...,------ 

### (Variance- Air)

I hereby file my appearance in this proceeding, on behalfofMidwest Generation. 

### LLC, Waukegan Generating Station.

Dated: 

### April 9, 2012 Kathleen 

### C. Bassi 

### SCHIFF 

### HARDIN, LLP 233 SouthWackerDrive, Suite 

### 6600 Chicago, 111inois 

### 60606 312-258-5567 

### Fax: 312-258-5600 kbassi!ii)schiffuardin.com

## ElectronicFiling -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

BEFORETHEILLINOIS POLLUTION CONTROL BOARD
MIDWEST GENERATJON, LLC, WAUKEGAN GENERATING STATION, Petitioner,
y, 

### ILLINOISENVIRONMENTAL PROTECTION AGENCY, Respondent. ) 

### ) ) ) ) ) ) ) 

### ) ) )



### APP.EARA.NC.E 

### PCB 12-------,---- (Variancc- Air)

! hereby file my appearance in this proceeding, on behalfofMidwest Generation, LLC, Waukegan Generating Station.

Dated: April9, 2012 Stephen J. Bonebrake 

### SCHIFF HARDIN, LLP 233 South Wacker Drive, Suite 6600 Chicago, Illinois 60606 312-258-5646 

### Fax: 312-258-5600 sboncbrake:ll<schifOlardin.com

## Electronic Filing -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

BEFORETHE ILLINOIS POLLUTION CONTROLBOARD
MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

### Petitioner,


### v. ILLINOIS ENVIRONlY1ENTAL PROTECTIONAGENCY, Respondent. ) ) ) ) ) ) ) ) ) ) ) 

### PCB12-
__ 

### (Variance- Air)

PETITION FORVARIANCE NOW COMES Petitioner, MIDWEST GENERATION, LLC- WAUKEGAN GENERATING STATION, by and through its attomeys, SCHIFF HARDIN, LLP, and, pursuant to Sections 35 and 37 ofthe EnvironmentalProtection Act, 415 JLCS 5/35, 37 (2010) ("Act"), and 35 Ill. Adm. Code Part I04, Subpart B, requests that the Board grant Petitioner a variance from the provisions of35 Ill. Adm. Code§§ 225.296(a)(l) and (c)(l) 1

### for the 12-month period beginning December 31, 2013, and ending December 31, 2014. In 

### light ofsignificantly changed circumstances sincethis rule was adopted, Midwest Generation's current operational plans will provide northeastern Illinois with a substantial net benefit in air emission reductions compared io
a reasonably-expected business-as-usual case, while continuing to comply withthe emission limits ofthe rule, mostofwhich (unit-specific requirements for mercury and annual fleet-wide limits for nitrogen oxides (''NOx")) have already been achieved. As such, Midwest Generation and the Waukegan Generating Station will suffer arbitrary orumeasonable hardship ifthe Board ·does not grant this requested variance.

1Hereinafter, citations to the Board's regulations will be by section numberonly.

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### Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

Midwest Generation seeks a variance from only twu ofmany components ofthe Combined Pollutant Standard ("CPS") codified at 35 Ill. Adm. Code 

### §§ 225.291-225.299 and 225.Appendix A in order to 

### avoid arbitrary and urrreasonable hardship bypermitting the company to adaptto unanticipated conditions that have evolved since the adoption ofthe CPS. Specifically, Midwest Generation seeks a variance from the compliance dates applicable to 

### Waukegan Unit 7 for the installation offlue gas desulfurization ("FGD'") equipment (Section 225.296(a)(l)) and the conversion ofthe hot-side precipitator on that 

### Lmit (Section 225.296(c)(J )). Therequested variance is for aperiod ofone year only, t!·om December 31, 2013, until December 31, 2014, with no change in the existingemission rate 

### limits ofthe CPS. The unanticipated conditions that haveevolved since the adoption ofthe CPS have occurred because oftwo factors. First, a significant, ongoing deterioration in energy market ptices combined with the development ofsubstantial new federal environmental regulations layered on top 

### ofthe CPS have made long-term investment in the smallest generating units in the Midwest Generation fleet questionable and subjectto reconsideration atthis time-. Second, the CPS requires Waukegan Unit 8to be retrofitted with FGD equipment by December 31, 2014; in bidding construction work for pollution control installations since the CPS was adopted, Midwest Generation has determined that in this circumstance it cangain cost and other efficiencies by sequencing the Waukegan units' installation ofFGD equipment within a concunenttime period. None ofthe above conditions were foreseen when the CPS was adopted; therefore, to enforce the CPS as written would impose undue economic hardship on Midwest Generation. Further, this proposal complements Midwest Generation's mmouncement on February 29, 2012, that it will retire the coal-fired unit at the Fisk Generating Station in Chicago by no later

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## ElectronicFiling -Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * * *

than December 31, 2012, and the coal-fired units at the Crawford Generating Station, also in Chicago, by no laterthan December 31, 2014. Those retirements are the result ofeconomic conditions in the energy market and l'vlidwest Generation's desire to settle a longstanding debate in the City ofChicago over a Clean Power Ordinance which proposed to layer additional air emission regulations at the local!municipallevel. While not a comment on the use ofcoal to generate electricity, which Midwest Generation believes is essential to ensuring areliable and affordable supply ofenergy, the companyrecognized that there is an opportunity to address a unique circumstance in which densely-populated neighborhoods have grom1 up around the Chicagoplants over the decades since they began operation. In an agreement enteredinto with Midwest Generation on Febmary 28,2012, four major environmental organizations in the state who frequently intervene on air emission tulemakings before the Board- the Environmental Law and Policy Center, the SietTa Club, theNatural Resources Defense Council. and the Respiratory Health Association ofMetropolitan Chicago- stated that, t·ecognizing the net benefits to the CPS realized bythe early retirements ofthe Fisk and Crawford coal-fired units, they would not oppose tl1is request for.a vmiance for WaukeganUnit 7. In support ofits Petition. Petitioner stales as follows:
I. BACKGROUND (§§ 104.204(b)(l), (2), (3), (4),(5}. (6), (7), (8)) I. The Waukegan Generating Station ("Waukegan" or the "Station"), Agency J.D. No. 097190AAC, is an electric generating**.~tation** owned and operated by**Midwe~t** Generation, LLC. The Waukegan Generating Station is located at401 East Greenwood Avenue, Waukegan, Lake County, Illinois 60087-5197. Theelectrical generating units ("EGUs") at the Waukegan

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### Electronic Filing -Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * * *

Station went online between 1952 and 1962 and can generate approximately 781 net megawatts ofelectricity. Midwest Generation employs approximately 157 people at the Station. 2. The Station is located on approximately 200 acres in a partially-developed industrial area. To the west, the area is partially wooded andcontains a railroad line; residential development is located further in that direction. To the nm1h isthe former Johns-Manville transite manufacturingfacility, nowessentially vacant and fenced. Lake Michigan is to the east. South ofthe Station are theNorth Shore Sanitary District wastewatertreatment plant and a vacant piece ofproperty owned by Commonwealth Edison. 3. Midwest Generation operates two electric generatingunits at Waukegan2 with the capability to fire coal as theirprimary fuel. In additidn, the boilers ftre natural gas as auxiliaTy fuel during stnrntp and for flame stahilization.3 Waukegan also operates associated coal handling, coal processing, and ashhandling activities. In addition to the boilers, Waukegan operates four oil-iired turbines, used during peakdemand periods. Pursuant to the CPS, the companypem1anentlyretired the !DO-megawatt coal-fired Waukegan Unit 6 in 2007. 4. Relevant to this Petition for variance,particulatematter ("PM") emissions fi·om each boiler are controlled by an electrostaticprecipitator (';ESP"); the ESP for Unit 7 is a "hotside"precipitator, defined in the Board'spertinent rule as "anESP on a coal-tired boiler that is installed before the boiler's air-preheater 

### [SIC] where tl1e operating temperature is typically at least 550° F, as distinguished from a cold-sideESP that is installed after the air pre-heater where the operating temperature is typically no more than 350° F." Section 225.296(c). PM emissions

2 Waukegan UniL 6 \\'as shut down by December 31, 2007, pursuant to the requirements ofSec1ion 22D97(a)(I).
J The Title V permit issued to Waukegan Station identities fuel oil as an optional fuel, but Midwest Generation does not usc fuel oil at rhe station.

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## ElectronicFiling- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 * * * * *

at the Waukegan Stmion in 2011 were 768 tons.' Emissions ofmercury are controlled by the injection ofpowdered activated carbon ("ACI''). i'vlercury emissions in 2011 were 79 pounds at the Waukegan Station, compared with station mercury emissions of231 pounds in 2007, the year the CPS was adopted. S02 emissions are currently controlled through the use ofvery !ow-sulfur coal. S02 (!missions rrom the Waukegan Station in 2011 were 9,929 tons. Emissions ofother pollutants, includingNOx, are not an issue in this Petition for Variance, although, as discussed furtherbelow, the CPS also addresses NOx emissions, and Midwest Generation has already installed NOx controls, at considerable expense. to co111ply with the CPS. 5. Lake County is part ofthe Chicago ozone and PM2.55 nonattairunent areas. 6 The Illinois Environmental Protection Agency ("Agency" or "Illinois EPA") has proposed thatLake County be designated unclassifiable for the 1-hoursulfurdioxide (''S02") NAAQS.7 6. It appears !rom the Agency's

### 40JhAnnualAir Quality ReporT (201 0) ("201 0 AQ Rpt.") rhat there arc two monitoring stations**op~rated** 

### by the Agency located inLake County: No. 24 at the Waukegan North Fire Sration, AIRS Code 170971002. and No. 25 at Zion Camp Logan, AlRS Code 170971007. 201 0 AQ Rpt., p. 34. Ozone is monitored at the Wankegan

• 1 Data for 20 ll docs nor include fugitive emissions; data regarding. :fi1gitivc emissiom will not be available until mict-20 12. The 20 I0 Pl\·f emissions at Waukegan were 86 f rons: 725 t<lns from the stack and 136 tt111s fugitive.
5 Parliculare matter less than 2.5 microns in11erodynamic diameter.
GNote Llmt tbe U.S. Environmental Protection Agency (""USEPA,') has found that rhe area attains rhe 1997 ozone National Ambient Air Quality Standard ("NMQS") and the 1997 PM2.5 NAAQS, 74 Fed.Reg. 62243 (November 27, 2009); 75 Fed.Reg. 12088 (March 12, 201 0), but has not yet redesi&'Tlated the area. Additionally. USEPA l1as proposed to include Lake Counly in the 2008 ozonl! nonanaimuent area as ;:1 marginalnonanainment area. the lowest classification ofnonattainment. 77 Fed.Reg. 82li.(February 14, 20 12) (proposed designation oflhe Chicago area as nonattainmem); letrer and auachment from Susan Hedman, USEPA Reginn 5, tu Patrick Quinn, Governor ofthe State ofIllinois (January 31.2012), available at< hltp:lfwww.epa.!!ov/ozoncdesi!!nations/J008standards/rec;region5R.htm >; 77 Fed.Reg. 8197 (February 14. 20 12) (proposed nonattainment classifications. such as marginal. moderate, etc.) ; Lener 10 Cheryl Nel.\'ion, Director, Office orAir and Rcidiation. VSEPA Region 5, from Laurel Kroack. Chief, Bureau ofAir. Illinois EPA (June**2~2011).** Midwesr Generatio11 can provide the Board with acopy of&his Jener ifthe Board so requires.**-5~**

## Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * * *

North Fire Station: ozone and Pivl2.5 are monitored at the Zion Camp Logan monitor. 2010 AQ Rpt., p. 40. Copies ofthese pages are attached hereto 

### as**E~hibits** 1and 2, respectively. 

### The entire document is available on the Agency's website at<hnp://www.epa.state.il.us/air/airgualitv-repmY20 1 0/index.html >. 7. Waukegan is 

### a major source subject 

### to the Clean Air Act Permitting Program ("CAAPI'"). 415 !LCS 

### 5/39.5 (201 0). The lllinois Environmental Protection Agency (''Agency'') issued a CAAPP pennit to Midwest Generationfor Waukegan on February 7, 2006. Subsequently, on March 13,2006, Midwest Generation timely appealed the CAAPPpermit for Waukegan at PCB 06-146. The Board accepted the appeal forhearing on March 16, 2006. and the Board found that, pursuant to Section 10-65(b) oftheAdministrative Procedure Act (5 !LCS 

### 10011 0-65(b) (2010)) ("APA") and the holding in 

### Borg-Warner Corp. v. Mauzy, 

### 427 N.E. 2d 415 (lll.App.Ct. 198 I). the CAAPP pe1mit is ineffective. upon appeal, 

### as a matter

### of!aw. Order, 

### Midwest Generarion. LLC. Waukegan GeneratingStation v. !l/inois Environmental Protection Agency, PCB 06-146(March 16, 2006), p. 2. The CAAI'P pennitremains inetfcctive. The current decision deadline in that appeal is September 

### 6, 2012. Midwest Generation, however, anticipates entering into negotiations**"~th** the Agency regarding resolution ofthe CAAPP permit appeal.H 

### 8. On 

### July 19, 2007, 

### the Agency issued Midwest Generation 

### a constmction pennit authorizing the installation ofACT equipment atthe Waukegan Station,9 as required 

### by the CPS. MidwestGenerationtimely appealed this permit on August 27, 2007, at PCB 08-020. Pursuant**~** The CAAPP permit and appeal have no dil'eCt relevance to this petilion for variance and so no related documents are attached as exhibi1s hereto.**However~** ifthe Board is interested. in the CAAPP pennit or the appeal. Midwest Generation directs the Board to its own docket at- PCB 06·146 fbr any documems ofinterest. 'Application No. 07050007.

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## ElectronicFiling -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

to Midwest Generation's request. the Board issued apartial stay ofthis permit. Order, 

### Midwes/ Genercr£ion, LLC- Waukegan Ge11era!ingSlation ''· Illinois Environmental ProtectionAgency (September 20. 2007). Asrequired by Section I04.204(i), attached hereto as Exhibits 3 and 4, respectively, are copies ofthe permit issued by the Agency and Exhibit2 ofthe Petition for Review ofthe construction permit, which is a redlined version ofthe permit revealing the stayed and active pottions ofthis pem1it. Notwithstandingthis appeal ofcc11ain provisions ofthe permit, the air quality benefits ofthe CPS relative to mercury have been fully realized as ofthis date with the installation and operation ofthe ACI equipment beginning in July 2008. 9. On November 

### 19, 2010, the Agency issued Midwest Generation a construction pem1it authorizing the installation ofa dry sorbent injection system and the conversion ofthe hot-side ESP to a cold-side ESP for Waukegan Unit 7. 10 

### See Exhibit 5. As dlscussed more fully below, Midwest Generation soughtthis construction permit as pat1 ofits plan to comply with the CPS and has obtained a one-year extension ofthis permit from the IllinoisEnvironmental Protection Agency. 

### 10. Midwest Generation has sought no othervariances from the CPS for the Waukegan Station or any ofthe othergenerating stations comprising the Midwest Generation CPS Group as defined at Sections 225.292(a) and (d) and 225.Appendix A.


### ll. REGULATORYBACKGROUND (§ I04.204(a)) 11. On March 14, 2006, the Agency submitted a proposed rulemaking to the Board, "In the Matter Of: ProposedNew 35 Ill.Adm.Code 225 Control ofEmissions tl·om Large Combustion Sow-ces," docketed at R06-25 ("the Mercury Rule"). The Board adopted this rule

10 fl.pplicntion No. 10090034,

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## Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 * * * * *

on December 21, 2006. and it was effective as ofthat same date. The Mercury Rule includes
someprovisions in Subpart A ofPart 225 and all ofSubpm1 B ofPart 225. 12. On May 22. 2006, the Agency submitted a proposedrulemaking to the Board, "In the Matterof: Proposed NewCA!R 

### 802, 

### CA!RNOx Annual and CAIR NOx Ozone Season Trading Programs, 35 !ll.Adm.Code 225, Control ofEmissions ITom Large Combustion Somces, Subparts A, C. D. and E."' docketed at R06-26 ("CAJR" 11 ). 

### On January 5, 2007, the Agency and Midwest Generation filed ajointcomment in this rulemaking describing an agreementthey reached regarding mercury control and purporting to setforth the substance oftheir agreement to add Subpart F to Part 225 ("Subpart F"). 12 

### R06-26, PC# 9. Subsequently, onJ<muury 10, 2007, the Agency and Midwest Generation Jlled ajointcomment providing the regulatory language for Subpart F, including amendments to that language. R06-26, PC# 11. On April 19, 2007, the Board proceeded to First Notice on the CAIR, inclnding SubpartF. On June 25, 2.007, Midwest Generation submitted comments on the FirstNotice CAIR, including requested revisions to Subpart F. R06-26, PC# 14. On July 26. 2007, the Board ordered the rule to Second Notice, including Subpart F with minor amendments. R06-26, Board Order (July 26, 2007). These rules became effective August 31,2007. Subsequently, in Docket R09-10, effective June 26,2009, the Board moved the CPS from SubpartF ofPart 225 to Subpart B ofPart 225. 13. Pursuant to Section 225.292. Midwest Generation opted in to the CPS on December 

### '27, 2007, identifying Waukegan Unit 7 as one ofthe electric generatingunits ("EGUs") to be included as pat1 ofthe Midwest Generation CPS Group. Therefore, Waukegan

11 Clean Air lntcrsta(c Rule.
PC# 9. 12 Notethat the Board's website docket does not include substantive. regulatory longuage for Subpart Fat



### .s.

### Electronic Filing -Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * * *

Unit 7, the subject ofthis Petition for Variance, is subject to the provisions from which Midwest Generation seeks relief. 14. The provisions from which Midwest Generation seeks reliefare as follows: 

### Section 225.296 Combined Pollutant Standard: Control Technology Requirements for NO, SO,, and 

### PMEmissions a) General TechnologyRequirements for 

### NO, and S02. 1) On or before December 31, 2013, the owneror operator musteitherpermanently shut down or install and have operational FGD equipmem on Waukegan 7; 

## *** c) Control Technology Requirements for Pf'vL 'T'he owner or operator ofthe two specified EGUs listed inthis subsection that are equipped with a hot-sideESP mustreplace 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 boilerthat is installed before the boiler's airprehcater [SlC] where the operating temperature is typically at least 550° F, as distinguished ftom a cold-side ESP that is installed afterthe air pre-heater wherethe operating temperature is typically no more than 350° F. 1) Waukegan 7 on orbefore December 31, 2013
.. , .


### 111. RELIEF REQUESTED

(§§ 104.204(c), (d), (e), (I), (k)) 15, Midwest Generation seeks targeted, nan·ow relieffrom the CPS in orderto avoid arbitrary and unreasonable hardship. Specifically, Midwest Generation seeks relieffrom the CPS requirements thatit (l) install FGD equipmenton Waukegan Unit 7 by December 31, 2013, and (2) that it convert the hot-side ESl' on Waukegan Unit 7 by December 31,2013, or (3), failing either ofthese, that it shut the unit down by December 31, 2013. Midwest Generation
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### Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * * *

seeks one additional year to install the FGD equipment, convertthe hot-side ESPto a cold-side ESP, or shut down the uniL Midwest Genemtion does not seek any relieffrom the system-wide S02 emission rate. set forth at Section 225295(b), the CPS NOx requirements set fmth at Sections 225.295 through 225.298, the mercury emission limitation and control requirements applicable to Waukegan Unit 

### 7 set forth at Section 225.294, orthe CPS requirements applicable to the other EGUs in the Midwest Generation CPS Group. I6. Midwest Generation seeks the variance almost two years in advance ofthe compliance date because ofthe long lead time nec.essary for planning and conducting the construction necessruy to complywith the provisions ofSections 225.296(a)(l) and (c). ltis essential that Midwest Generation know now whether the Board will grant the reliefso that it does notembark on unnecessary and costly activities required in anticipation ofconstrucdon, as well as the actual construction ofthe FGD equipment and the conversion ofthe hot-side precipitator. Commencement ofsuch activities on the schedule cun·emly required would constitute arbitrary and unreasonable hardship to Midwest Generation and may be economically impractical and result in thepet1nanenrretirement ofthe unit and subsequent loss ofjobs. A. Section 275.296(a)(l)- FGD Eauipment 17. To comply with the requirement ofSection 225.296(a)(l) that Midwest Generation install FGD equipment atthe Waukegan Generating Station, Midwest Generation examined several alternatives. Midwest Generation initially evaluated retrofitting Waukegan 

### 7 with a spray dryer absorber dry scrubber ("dry scrubber") in orderto meet the FGD equipment requirement and a baghouse in order to complywith the additional requirement ofthe CPS to install a baghouse or convertfrom a hot- to cold-side ESP to achieve additional mercL1ry emissionreductions 

### (see Section B, below). In 2006, Midwest Generation estimated that the cost

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## Electronic Filing -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

for a dry scrubber and baghouse was approximately $240 million, based on an engineering study conducted for the compony 

### by Shaw. The lack ofavailable, adequate space at Waukegan 7 was part ofthe cost and scheduling issue. In orderto accommodate a dry scrubberandbaghouse, Midwest Generation would haveto 1111 in part ofthecirculating water inlet canal, which in itself would require various permits andlong lead times. Escalating costs and the onset ofthe recession caused Midwest Generation to reevaluate the S02 control strategy and FGD equipment for Waukegan 7 in 2009. At this time. Midwest Generation determined that the cost ofinstalling
a dry sorbent injection system using Trona as the reagent to meet the FGD equipment requirement would cost approximately $18 million, while ensnring compliance with the CPS. Discussion ofconvertingthe ESP from hot- to cold-side at a cost of$70 million, rather than installing a bagbouse, to complywith the CPS for mercury removal, is fimnd in paragraph 20, below. Therefore, total FGD equipment and mercury removal costs have beenreduced from an estimated $240 million in 2006 ro $88 million. 18. With the S02 reduction efficiencies generally equal, Midwest Generation determined that the best approach for Waukegan Unit 7 is the dry sorbent injection system. In orderto comply with the December 31. 2013, installation deadline set forth in Section 225.296(a)(l), Midwest Generation already sought and obtained a consiruction pem1it, 

### see Exhibit 5, for installation ofFGD equipment (a dry sorbent injection system). Midwest Generation began construction oftbe dry sorbent injection system in the fall of20I 

### 1buthas obtained an extension ofthe constructionpennit to allow it time to reevaluate in l-ight ofthe developments discussed in this petition. 

### See Exhibit 6. To install dry sorbcnt injection system, Midwest Generation will need to engineer.procure. and install equipment designed to injecta dry sorbent reagent (trona) into the flue gas strean1 exiting the boilerbefore itgoes outthe stack.

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### Electronic Filing- Received, Clerk's Office, 04/10/2012. *****PCB2012-121 *****

This equipment includes trona unloading equipment, on-sitetronastorage, millingequipment needed to grind 

### the trona, and blowers necessary to transport and distribute 

### it into the flue gas streamto react with the 

### SO,. Additionally, 

### the ESP will need to 

### be upgraded to remove the added particulate loading resulting 

### from the process. Planned upgrades 

### to the ESP for Waukegan 

### 7 include conversion from 

### the hot-side 

### ESP to 

### a cold-side ESP configuration. Upgrades to the ash removal system are also needed to handle the additional solidparticulates that will be collected in the ESP. 19. Unlike Unit 

### 7. Midwest Generationhasuntil December 31, 2014, to install FGD equipment on Unit 8. 35 Ill. Adm. Code§ 225.296(a)(2). Delayingthe requirementto install FGD equipmem onUnit7 

### for a year would allowMidwest Generation to petfonn the installation work forboth units at the same time. Underthe current andpresently unique circumstances regarding Waukegan Station,this single construction mobili7.ation is more efficient and provides sig.'lificant cost savings. 

### B. Section ?25.296(c)(l) Conversion ofthe Hot-Side ESP 20. Section 225.296(c)(J) provides Midwest Generationwith the choice ofconverting the hot-sideESP on Unit 7 to a cold-side ESP, installing a baghouse, or shuttingdow11the unit. As discussed above, there are space limitations at Waukegan 7 that make installation ofa baghouseparticularly expensive andtime-consuming. Midwest Generationdetermined that it would best to convet1 the unit's hot-side ESP. The cost ofconverting the hot-side ESP to 

### a coldside ESP is approximately $70 million. 21. To timely conve1t the hot-side ESP to 

### a cold-side ESP, MidwestGeneration 

### has already obtained 

### a construction permitfor this work. TheNovember 19,2010,constnJction pennit for the FGD equipment installatio11 described above also authorized the conversion of

### the

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## ElectronicFiling -Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * 

## * *

hot-side ESP to a cold-side ESP. To implement that conversionpursuantto the permit, Midwest Generation would have to complete detailed engineering ofthe conversionprocess and order and fabricate the necessary ductworkto accommodate the conversion. Additionally, the conversion ofthe ESP will entail a long outage ofWaukegan Unit 7. Titerefore, Midwest Generation must coordinate thatoutage with P.TM. 13 which could also atTect the timing ofthe project. C. Compliance Efforts and Hardship 22. Planningto comply with Sections 225.296(a)(l) and (c)(J)through the installation ofthe FGD equipment and ESP conversion at Waukegan 7 described above. tv!idwest Generation expended considerable resources to obtain a construction pennit, attached hereto as Exhibit 5. issued November 19, 

### 201 0. However, subsequent m the Agency's issuance ofthe construction permit, USEPA proposed and promulgatedtwo majormles: the Cross-StateAir Pollution Rule ("CSAPR'')" andthe l'v!ercury and Air Taxies Standards ("MATS"). 15 The CSA.PR was adopted to replace the Clean Air Interstate Rule ("CAIR") cunently applicable to fossil fuel-fired EGUs in the eastern United States, ini·esponseto the court order inNorth Carolinav. EPA
. 16 The CSAPR includes a lllllltber offeatures that are significantly more stringentthan the CAIR, namelythe addition ofassurance provisions or variability limits that establish hard mass emission caps on each subject state's emissions ofS02 \} P JM lnterconnection. LLC is the regional transmission system operatorthat must protect reliability ofthe grid and review the removal for any extended period oftime ofany generating units within the scope ofPJM's authority and responstbility. '' Proposed at 75 Fed.Reg. 45210 (August2, 201 0); tinalized at 76 Fed.Reg. 48208 (August 8, 20II), effective October 7, 2011. "Proposed at76 Fed.Reg. 24976 (May3. 20II); fmalized at 7i Fed.Reg. 9304 (February 16, 2012). effective April 16, 20 12.**l~>** The court found that the CAIR. was pervasively -flawed and initially vacated the rule. North Carolin(J v. EPA. 531 f.3d 896 (D.C. Cir. 2008). Subsequently, tile coun remanded the CA!R in ils entirety wiJhout vacatur, North Cm•o/ina v. £!',!, 550 F.Jd 1176 (D.C. Cir. 2008), ordering that the CA!Rremain efl'ec1ive unlil USEPA replaced it with anew rule, which is ihe CSAPR.

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## ElectronicFiling- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

and NOx. It presents an entirely different allowance allocation methodology, with pennanen! allowances issued 

### by USEPA and no involvement ofthe states unless they develop stale implementation plans ("SIPs") in the future. The CSAPR also presents an entirely new S01 allowance tradingprogram. 24. There are a number ofuncet·tainties with respectto the CSAPR. First, it is not clearwhether the IJiinois EPA will develop a SIPto address the CSAPRto replace USEPA

### ·s allowance allocation methodology and 

### ifir does. exactly what allowance allocation methodology it will adopt. Second, the CSAPRwas timely appealed by a number ofenrities at 

### EMEHomer City LLCv. EPA. No. 11-132 (D.C. Cir. filed August 23, 2011 ). On December 30, 2011, the com1 stayed the effectiveness ofthe CSAPR. In light ofthe nature ofthe program and the time needed for the courtto address the merits ofthe arguments on appeal, it seemslikely that the stay will defer implementation ofthe rule for at least a year. Oral argumetllS are scheduled lor April 13, 2012, suggesting that the court will issue an opinion before the end ofthe year. However, no
one c>m predicttheoutcomeofthe appeals. Assuming thatthe com1 does, indeed. issue its final orderthis year and that it will not require substantial changes to the CSAPR, which is a huge assumption, tlleoretically, the CSAPR compliance deadlines could be delayed by a year, making therule first effective in 2013 with the additional reduction in

## so2 allowances applicable in 2015. 25. The tv!ATS, which coditles the Utility Maximum Achievable Control Technology ("lvil\CT") requirement applicable to coal- and oil-fired EGUs pursuantto Section 112 ofthe Clean AirAct, was not evenproposed at the time that Midwest Generation obtained its construction pennit. Midwest Generation could not have had any idea ofthe scope ofthe rule. As with the CSAPR, USEPA made changesto the MATS in its final fonn. Atleast one partyto

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date has tiled an appeal ofthe !VIATS, and one can reasonably anticipate thatthere will be appeals filed by additional pmties before the April 16,2012, deadline. It would be impossible for one to speculate on the ilnal scope of issues that will be appealed and their outcome oreven whether the rule will smvivethe challenge. However, as fmally adopted, the MATS requires reductions ofemissions ofmercury, non-mei·cury hazardous ("HAP") metals, and hydrogen chloride ("HCl"). USEPAhas established in the MATS the option ofmonitoring tilterable Plv! emissions as a surrogate for the non-mercury HAP metals. Evenifa source does not choose to urilize the PM surrogate, the technology to control non-mercury HAP metals is the same as to control Plv!: ESPs or baghouses. Likewise, USEPA offers the optionto comply with an S02 emission limit as a sUJTOgate to complyingwith the HCilimit. As with PM and non-mercury HAP metals, USEPA has found that controlling 802 effecti\;ely controls HCI. Therefore, the company would notinstall different control equipmentto address HCI. In this sense, the
measures that Midwest Generation mustundertake to comply with the CPS overlap with its compliance ob!igatiotts tmder the MATS. The MATS requires compliance within three years, 

### i.e., by April 16, 2015, with the strong possibility that upon a certain showing, sources cm1 be granted a foutth year by their states. 26. This set ofcompliance deadlines converging on2015 creates overlapping, significant S01 , mercury, and PM emission reductionobligations that conflict with the CPS's 

### 2013 deadlines applicable to Waukegan Unit 7. The one-yearextension sought herein would help synchronize these various regulatory timing requirements and would also impose the same CPS compliance deadline for Waukegan Units 7 and 

### 8, improvingefticiency and providing cost savings. as mentioned above. In addition, the pending CSAPR appeal and stay and thepending MATS appeal create uncertainties aboutthetiming and scope ofthe requirements thatmay

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survive appeal. At least some ofthis uncertainty could be alleviated by deferring the deadlines at issue for Waukegan 7, thus potentially providing an opportunityfor greater clarity and better decision-making before action must be commenced to physically address PM and S02 compliance. 27. The ability to better coot·dinate compliance with these overlapping obligations coulclhelpMidwest Generation avoid additional and unnecessary significant costs and disruption ofunit operation. Under these circumstances, compliance with the current December 31,2013, CPS deadlines would create an unreasonable hardship for Midwest Generation, but one that can be alleviated bythe grant ofthe requested variance with respectto Waukegan Unit 7 to allow Midwest Generation to harmonize and consolidate its compliance efforts under theCPS with thoserequired by orthatmay be reqnired by the CSAPR and the MATS. Importantly, Midwest Generation does not claim that it cannot comply with the CPS, hut that doing so is arbitrary and unreasonable at thistime and poses an undue hardship, especially giventhat MidwestGeneration seeks no change in fleet-wide emissions limits w1der 

### Ule CPS. 28. Section 35(a) ofthe Act states that ''the Board is not required to find that an arbitrary or unreasonable hardship exists exclusively because the [state] regulatory standard 

### is under review aml ihe costs ofcompliance are substantial and certain." 415 ILCS 5/35(a) (2010). However, the Board ha<;, indeed, recently granted a varianceto a petitionerfaced with unique regulatory uncert·ainty where the costs ofcompliance were also detem1ined both substantial and certain. Exxoni,fobil Oil Corp. v. !EPA, ll-86, 12-46 (December 1, 2011). Midwest Generation is similarly facing regulatory tmcertainty through the convergence ofthe CPS and the new federal rules, and the costs ofcompliance are substantial and certain. Consideringthose factors together with the lack ofimpact to tl1e envir01m1ent from delaying compliance by oneyear shows

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that a variance is wanantcd. This slight adjustment ofthe compliance date for Midwest Generation for this one unit would help to avoid the unforeseen inefficiencies and uncertainties that have developed with the promulgation ofthe two new federal mles.

IV. ENVIRONMENTAL Il\1PACT (§ I04.204(g)) 

### 29. As Midwest Generation announced onFebruary 29, 2012, it plans to shut down the coal-tired unit at the Fisk Generating Station in2012 and its Crawford Generating Stationby
no later than the end of2014, subject to P.ll\1 review." Theremoval ofemissions from the coalfired unit at the Fisk Station during thetimeframe ofthis variance, ifthe Board grants it, and of the coai-Jired units atthe Crawford Station coincidental withthe termination ofthevariance would more than offsetthe one-year delay in achieving additional emission reductions from Waukegan Unit 7 sought in this Petition. 30. Under the CPS, Midwest Generation is required to achieve annually declining system-wide SO, emissionrates beginning with an average annual rate of0.44lb/mmBtu in calendaryear 2013. Based on actual generati011 for 2007. the year in which the CPS was finalized, Midwest Generation estimates that 2013 S02 

### emissions from Midwest Generation's system at the CPS S02 

### rate of0.44lb/mmBtuwould be 66,109 tons. Withthe coal-fired unit at the Fisk Station retired bythe end ofthis calendar year, the estimated system-wide 2013 S02 

### emissions would be 62,282 tons, a reduction of3,827 tons or 5.6 percent. The CPS does not require the installation ofFGD equipment orretirement at Fisk until December 31, 2015.

ti lfPJM were to determine that the shutdown ofeither Fisk or Crawford orbo'lh threatened reliabilicy or raised marker power issues. PJM could request that Midwest Generation continue to operate the plant or plants. Midwest Generation subrniticd its notice to PJM ofits intention to shut down Unit 19 at the Fisk Station. See Exhibit 7. IfMidwest Generation receives the final results ofPJM's review during this variance proceeding, it will provide acopy to the Board.

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Therefore, even ifone assumed that the coal-fired unit at Fisk would be re.tired atthe end of2015 rather than retrofitted withFGD equipment, there are cumulative annual reductions ofS02 in 2013, 2014, and 2015 accruing 

### fi'OJH the early retirement ofthe coal-fired unitat the Fisk Station totaling 

### II ,481 tons or 

### a 7.5 percent lleetwide reduction. 

### 3I. The net S01benetlt ofthe total package included with this request for variance increases with the retirement ofthe two coal-fired units at Crawford Station by no later than the end of2014. Under the CPS, there is no requirement to install FGD equipment at Crawford 

### until the end of2017 for Unit 8 and of2018 for Unit 7. Therefore, it would be logical to assume that Cra,,tord would have continued to generate in a business-as-usual case through at least the end of2017 for Unit 8 and through the end of2018 for Unit 7, With the early retirement ofboth units by the end of2014. the cumulative reduction in S02emitted !rom Crawford for yeurs 2015, 20

### I6, 2017, and 2018 is 23,592 tons, comparedto 

### a business-as-usual CPS compliance case. 

### 32. Using these same assumptions for PM emissions, 

### i.e. 2008-20

### ll average heat input, lvfidwest Generation estimates 

### that the PM emission reductions due to the early, planned shutdovms ofthe coal-tired tmit 

### atthe Fisk Station would 

### be 2,084 tonsfor 2013, 2014, and 2015. The estimated emission reductions from the early, plarmed shutdown ofthe two coal-fired units at Crawford would total 

### 3,536 tons for 2015, 2016, 2017, and 2018. The total tons of

### PM reduced from the early, planned shutdown.s ofthe coal-tired tu1its at Fisk and Crawtord Stations would be 5,620 tons. 18

18 The MATS provides aPM emission rate as asun·ogate for the non-mercury HAP meH.tl emissions. If MidwesrGeneration chose to rely on that sutTogate rate for compliance with the MATS, the PM emission reductions resulting lfom the plmmed early shutdowns ofthe coal-fired units CJtfiskand Crnwtbrd would be less: 264 tons for 2015 01 Fisk and I,664 tons for 2015, 2016, 2017, and 2018 at Crawford. The MATS prO\•ides that companies may comply with o0.21bfmmBtu S02emission rate as a**surrog;:~re** for compli11nce with the HCl emission nne. The only year in which the MATS 0.2 lb/mmBtu rate is more stringentthan rhc rate required bythe CPS is 2015. when the CPS rate is 0.28 lbimmBtu. Because these rates are so close, Midwest Generation has not. calculated the reductions that would result fi-om lhe early, planned shutdowns ofthe coal·fired units at Fisk and Crawford.

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33. Although the one-year compliance delay sought inthis variance 

### will not affect NOx emissions at Waukegan Unit 7, the shutdowns ofthe coal-fired units at Fisk and Crawford will yield reductions in NOx. The CPS requires Midwest Generation to achieve a system-wide emission rate ofO.ll lb NOx/mmBtu in2012. Based on 2008-2011 average heat input, in 2013 through 2015. Midwest Generation estimates the reduction in NOx emissions !rom the shutdown ofthe coal-tired unit at Fisk will be 3,456 tons. Based on this same average heat input. Midwest Generation estimates )hat the total reduction .in NOx emissions resulting from the planned early shutdown ofUnit 7 at Crawford Stationwill be 2,663 tons during 2015 through 2018 and 3,437 tons from Unit 8 in 2015through2018. The total anticipatedNOx reductions at Crawford Station would be 6.100 tons. 34. Pursuant to the CPS, both Waukegan units were among the first inthe nation to install mercury control equipment in July 2008. Since 2007, mercury emissions atWaukegan Stationhavebeen reduced from approximately 231 pounds peryear to less than 80 poundsper yeur. Since 2008, Waukegan Unit 8 has achieved significant mercury reductions, consistently measuring g1·eate1· than 90 percent, well in advance ofthe federal compliance deadline. Unit 7 is
now achieving significantmercury emission reductions, in the range of72% when the unit operates at lower loads. When operated at higher loads, the rate ofreduction decreases. The. CPS requirement to conve11 orreplace the hot-side ESP is to improve mercury removal efficiency onthat unit. Even with the extension ofa year to convert or replace the hot-side ESP, Unit 7 

### will havebegun significantly reducing mercury emissions prior to implementation ofthe MATS.**Mor~over,** Unit 7 will comply with the state's unit-by-unit limitations by the CPS'

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January I, 2015, compliance deadline. 19 

### Midwest Generation will continueto operate the ACl system on Waukegan Unit 7 during the variance period. 35. The Fisk and Crawford coal-fired units were also controlled for mercury beginning in July 2008. Si11ce then, Midwest Gweration has been able to optimize mercmy reduction at both stations such thatthe average mercury emissions, based on 2010 and 2011 actual emissions and which Midwest Generation would expect to continue into the future ifit continued to operate the coal-fired tmits at these two plants, are approximately 5 lbslyear at Crm,ford Unit 7, 3 lbslyearat Crawford Unit 8, and 8 lbslyear at FiskUnit 19. With the planned shutdown ofthe coal-fired unit at Fisk in 2012, approximately 23 pounds ofmercury that could have been emitted in 2013, 2014, and 2015, asswning a level ofgeneration similar to 2010 and 2011, would not be emitted. Likewise, Crawford Unit 7 wouldnot emit approximately 18 pounds ofmercury in2015, 2016,2017, and 2018, and Crav.ford Unit 8 would not emit approximately 12 pounds ofmercury in 2015, 2016, and 2017. The total reduction in mercury attributable to the shutdown ofthese three units between 2013 and 2018 is approximately 54 pounds. Because ofthepotential persistence ofmercury in the. environment, the Board can legitimately viewthe firturereductions from theFiskand Crawford coal-fired units as mitigation for the one·year delay in achieving additional mercmy emissions from Waukegan Unit 7. 

### 36. Table I20 

### belowsets forth current relevant emissions levels, estimated emissions in 2014 based on average 2008-201 I heat input, the levels that Midwest Generation estimates would be emitted from Waukegan Unit 7 ifthe variance were not granted, also based on average 2008-2011 heatinput, and the net benefit in terms ofoverall reductions in emissions resulting

19 Note that the MATS does not require unit·by-unit compliance and allmvs snurce.wideaveraging. 20 Exhibit 9 provides a table ofrhe calculations that serve as the basis for Table 1.

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from the total package comprising this request for vmiance. 

### i.e
.. including the early closures of the coal-fired units at Fisk and Crawford. Table I

Pollutant 2011 I 2014 2014 Difference NetBenefit Total Net 

### I Emissions* 

### I Estimated Estimated 

### in in Benefit in 

### at 

# I Emissions Emissions Emissions Emissions Emissions \Vaukegan at at at Reduced if Reduced if

unit 7 Waukegan Waukegan Waukegan the Variance Is Unit 7 Unit 7 if Unit 7 if Variance Is Granted Without the the Granted 2013-2018 Variance Variance Is Variance Is 2013-2015 (fisk Unit 

## ' Gnmted Grruited (Fisk Unit 19 Sl1lli 

# I 19 Shnt Down in. Down in 2012 and

2012) Crawford 

# I Units 7 and 8 Shut Down End 

# I of20!4) I

-··- 

### ' 

### ' I 

### I I 

# I I I I I I ! I 

# I ' 

## I SO: 

## I 3,801 tons 

## I 1,016 tons 3,974 tons 

# I 2,957 tons 8,385 tons**,~** ?'] 

# I .J-,-.J tons 1 

# I H£2T I 74lbs I 8lbs 83 lbs 75lbs <5llbs> <20lbs> ! 

# I ' I PM-- 

# I 140 tons 140 tons 157 tons i 18 tons 2,066 tons 5,602 tons I NOx 

## ' 1.073 tons 1,321 tons 1,321 tons 

### Owns 

# I 3,456

### tons 9,556 tons 

# I

- 

### . *20 11 emJssJons reflecta low capacityfactor ofJ9%; tlw pre\1ous five years· capac1ty factor was.69%. Jt is clear from Table I that the difTerences in estimated mass emissions of

### 802, mercury, and PM are relatively small and would occurfor only one yearlongerthan is currently requiredby

21 The. mercury emissions reported in Table 1ret1ect achml**~missions** based upon stack restingat various lo'!ds. Smck tes[S ofmercury emissions ntvarious operating loads re,•ealed thatUnit 7 achieves areduction in mercury**~missions** of**appro:dmar~Jy** 72% at a lower operating load. The unit was operated at that lower load slightly Jess lhan 25% ofthe operating hours in 20ll.

2.! Midwest Generation notes that although rhe CPS refers to PM emissions in the litle ofSection 225.296, nolhing in the CPS actually imposes any specific emissions limitations. However1 the purpose ofan ESP is to control I'M. Althougl> !he purpose ofthe conversion ofthe Waukegan 7 ESP from a hot-side to a cold-side ESP is to improve mercury ren10\'al efficiency and norspecifically PM removal efficiency, Midwest Genemtion has included the impEJcl ofthe variance, ifgnmted, on PM emissions for purposes ofproviding complete information to the Board.

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the CPS. The delay in additional emission reductions for one year is outweighed by the significant reductions in these same emissions due to the planned shutdowns ofthe Fisk and Crawford Stations in northeastem Illinois, which are discussed above. Therefore, Midwest Generation is actually providingthrough this proposal a benet!! to the environmentthat far exceeds any delay i11 additional emission reductions from Waukegan 7 that could result from the grant ofthis variance. Any suggestion ofenvironmental hannthat mightresult ifthe Board grants the requested variance is outweighed by the benelits to the environment and public by the emission reductions due to the planned shutdowns ofthe coai-J1red units at Fisk and Crawford and by the hardship to Midwest Generation 

### ifit were required to proceed with compliance at Waukegan Unit 7 and forego the efliciencics that can be anained byjust a year's delay. 37. Midwest Generation has already installed significantmercury (ACI) andNOx (SNCR) controls on other CPS Group units, thus significantlyreducing such emissions. Assuming thevariance requested in this petition is granted, following the one-year deferral, Midwest Generation 

### will proceed with one ofthe Waukegan 7compliance options under the CPS. Further, Midwest Generation will comply with tl1e requirements applicableto other CPS Group units on !he timeline provided bythe CPS, thus further reducing S02, PM, and mercury emissions, or, alternatively, additional units will be required to pennanently retire. 38. USEPA says thai the potential for huma·n exposure to mercury is through consumption offish containing mercury through bioaccumulation. Under certain conditions. mercury in watcrbodies can methylate, thus making the mercury available for uptake by organisms, according to USE!'A. Subsistence lishers are considered by USEPA to be the group most likely to be affected by mercury consumption in the United States. 76 Fed.Reg. 24976, 24984 (May 3, 

### 20ll). However, USEPA in the MATS Preamble indicated that the potential**~22-**

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impact offine particulate matter on human health may be far more significantthan the potemial impact ofmercury. 77 Fed.Reg. 

### 9304, 9426.f/ (Feb. 

### 16, 2012). Therefore, the reductions in fine particulate matter precttrsors 802 and NOx resulting from the early shutdowns ofthe coal-fired units at Fisk and Cra'Wford would have a far greater benefit, based on USEPA publications. The impact ofa year's delay in reducing mercuryemissions at Waukegan will be minimal ru1d will be significantly offset

### by tht: e±Tectively contemporaneous closures ofthe coal-fired units at Fisk and Crawford. Therefore, the impact oftherequest variance for Waukegan Unit 7 should be minimal, ifany, to both human health and the environment. 39. PM emissions are already controlledbythe existing ESP. Therefore, mercury emissions and PM emissionsfromthat unit are already significantly controlled. and the use ofa somewhat less efficientESP for a single year should have minimal impact. Moreover, the early closure ofUnit 19 atFisk more than offsets the PM emissions from Waukegan 7 during the year ofthevarianceperiod. 40. S02 emissions contribute to the formation ofAcid Rain and lineparticulate matter. Midwest Generation complies with the Acid Rain pennit issued for Waukegan 7. Emissions offine particulatematter are currentlyregulated by the CAIR. Acid Rain can contribute to eutrophication ofwater bodies located far dovmwind ofa source ofS02 . USEPA has documented various health effects, largely respiratory, associated with inhalation oftine particulate matter. Waukegan 7 is in compliance with these requirements and will remain so duting the pendency ofthe variance, ifgranted. 

### 41. Additionally, Waukegan 7 is subject to the state's PM lin1itations at Section 

### 212.203. Theserequirements 

### v-.1Il continueto apply. Waukegan Unit 7 is in compliance with these requirements and will remain so. Moreover, the PMreductions resulting from the

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shutdowns ofthe coal-fired units at Fisk and Crawford significantly exceed the additional year's PM emissions at Waukegan 7, again a net benetit to the cnvirorunent. 42. In a variance proceeding, a petitioner must demonstratethat the hardship resulting from denial would ''outweigh any injury to the public or the environment'" from granting the relief. Marathon Oil Co. v. EPA, 242 Ill. App. 3cl200, 206, 610 N.E.2d 789, 793 (5th Dist. 

### 1993). The proposed variance should causenegligible, ifany, quantitative orqualitative inj UIY in light ofthe associated emission changes, including the large expected reductions in S02 and PM emissions. DlU'ing the pendency ofthe variance., ifgrruncd, Midwest Generation will continue to inject powdered activated carbon to control mercury emissions at Waukegan Unit. 7. It will continueto operate its hot-side ESP to control pmiiculateemissions. And it will continue to bum very low sulfLLr coal to meet S02 limitations at Unit 7. Midwest Generation's entire Illinois coal-fired system will complywith the applicable S02 emission rate in the CPS. Additionally, subject to PJM review, Midwest Generation will shut down the Fisk and Crawford Generating Stations, thereby mitigating the one-year delay in achieving additional reductions of mercury emissions ti·om Waukegan Unit7 and more than fully offsel1ing the one-year delay in reducing emissions ofPM and S02 from Waukegan Unit 7 resulting from therequested one-year deferral and achieving a reduction in S02tons emitted in excess ofthe CPS schedule beginning in 2013. Given all ofthese factors, tl1e hardship to Midwest Generation clearly outweighs any potential.impactto human health orthe environment, and the hardship, therefore, rises to the level of"arbitraryor unreasonable," consistent with Section 35(a) ofthe Act and Board precedent in variance proceedings.

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V. CONSISTENCY WITHFEDERALLAW (§§ 104.204(1) and 104.208(a)) 43. TheBoard may grant this requested variance consistent with fedemllaw. Granting the variance has no impact on Section 11 

### O(a) ofthe Clean AirAct and

### 40 CFR Part 51 otherthan as discussed above. Further, Section ll0(a)(2)(D) ofthe Clean Air Act is addressed through the CAIR and eventually the CSAPRor its successor. Midwest Generation complies with the CAlRand will continue to do so as long as it is applicable. On June 24, 201 I.the Agency submittedpmiions ofthe CPS, including Sections 225.296(a)(l) and (c)(l), to USEPA fo1· inclusion in Illinois' SIP addressing Best Available Retrot!t Technology ("BART") and Regional.Haze. Illinois EPA, selected pages ofTechnical SupporrDocumemforBestAvailable Retrofit Technology Under the RegionalHaze Rule, AQPSTR 09-06 (April29, 2011), attached hereto as Exhibit 9;23 77 Fed.Reg. 3966 (Jan. 26, 2012), attached hereto as Exhibit 10. On Janumy 26,2012, USEPA proposed to approve the Illinois BART SIP as submitted. 77 Fed.Reg. 3966 (Jan. 26, 2012). Therefore, theprovisions !romwhich Midwest Gcneratiotl seeks reliefare not currentlypart ofthe Illinois SIP and are notfederally enforceable and are consistent with federal law. 

### 44. However, recognizinga potential concemofthe Board regarding consistency with federal law, Midwest Generationpoints out several factors. First, Waukegan Unit 7 is not
one ofthe BART-eligible units that lllinois EPA identified 

### in its BARTSIP submittal. 

### See 77 Fed.Reg. at 3971. Additionally, the BART/Regional Haze SU' is concemedwith the 

### S02 emissionrate. Illinois EPA demonstrated thatthe svstem-wide averacre 

## so, emission rates • 0 -**~~** Exhibit 9 consists ofthe cover**lener~** the Technical S11pporr Document ('<TSD,') cover pngc. TSD pp. 24- 25. 30-3 I. 33. nnd Appendix C. These are the pages pertinentto this request for variance; however, Midwest Generation will provide the Board with acopy ofthe enti1·e TSD or rhe entire collection ofdocuments included in the SIP submittal if[he Board requires.

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## *****

included in the CPS provide greaTer reductions than applying the presumptive BART rate tojusT BART-eligible units by applying therates to average heat input, and USEPA accepted this analysis. 

### See 77 Fed.Reg. at 

### 3973. Midwest Generation will continue to comply with the S02 emission rates in Section 225.295(b), thus satisfying presumptiveBART, as presented in Illinois' BART submittal. Additionally, the shutdowns 

### ofFisk and Crawford will reduce mass emissions ofS02 to levels below those included in Illinois' demonstration in the BART submittal that the system-"ide CPS rates produced greater reduction than applyingthe BARTpresumptive rates 10 only 

### the BART-eligible units. Therefore, even ifUSEPA were to adopt the CPS into the SIP before the concl\tsion ofthe requested variance period, there would be no negative impact on the Agency's calculations regarding emissions levels. 

### 45. The only issue could 

### be a discrepancy betweenthe compliancedates forthe 

### FGD equipmem installation and the ESP conversion that would be included in the SIP versus thedate that the Board would grant ina variance. lfthe BART/Regional Haze SIP, inchtding elements of the CPS, is in place before the tennination ofthe requested variance, Midwest Generation will request that the Agency submit the Board's order granting the variance along with updating the emissions infonnation and environmental benet!ts derived from theplanned shutdowns ofFisk and Crawford. It ispossible, perhaps likely, in that case that the variance period could expire before USEPA took action on revising the SIP to reflect the variance. 

### 46. The portions ofthe CPS addressing mercury, 

### i.e., the impetus 

### for requiring

### the ESP conversion, were not included in lllinois' BARTandRegional Haze 

### SIP submittaJ.24 Therefore. the reduction in efficiency in mercury control resulting from continued operation 

### of

24 See Appendix C included in Exhibit 9. lllinois EPA submitted the entirety ofPart 225, Subpart Bto USEPA with the BART SIP for purposes ofcompleteness but requestedthat only the bolded sections in Part 225, SubpartB be included in rhe SIP.

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## *****

the hot-side ESP has no import under the Clean Air Act. There are no federal provisions that directly impose 

### line particulate matter standards onWaukegan Unit 7. Arguably, Section 225.296(c)(l) should not even be part ofthe proposed SIP. However, we understand that Illinois EPA included it in the proposal because it submitted entire sections ofthe CPS rather than limitingthe submittal to appropriate subsections.


### VI. VARIANCE CONDITIONS AND COMI'LIAi'<CE PLAN (§§ I04.204([) and (j)) 47. Midwest Generation requests that the Board grant a valiance extending the compliance deadlines ofSections 225.296(a)(l) and (c)(1). On orbefore December 3I, 2014, Jvlidwest Generationshall (1) eitherpermanently shut down Waukegan Unit 7

### m· (2) shall (a) install and have operational FGD equipment on Waukegan 7 and (b) either replace the hot·side ESP with a cold·sideESP orinstall an appropriately designed fabric J:i!ter on Waukegan Unit 7. 48. Midwest Genemtion recommends a complianceplan as follows:

Date Activity

. Continuously during Comply with the system-wide SO" emissions rate set torth in Section

pendency ofthe 225.295(b). 

### variance Comply with the ACT rate set forth in Section 225.294(g). Comply with the CAIR or

### tl1e CSAPR, as applicable. Comply with the Acid Rain Program.

, Comply with all other applicablerequirements. On or before Apply for a new or extended constructionpermit, as needed, for September 15, 2014 installation ofthe FGD equipment and conversion ofthe hot·side precipitator orother control methodologies that Midwest Generation determines are more appropriate for Waukegan Unit 7. On or before Shut down Unit 7; OR December 31, 2014

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### ' 

# I I

## Electronic Filing -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

Date

On or before December 31, 2012 Onor beiore December 31, 2014 

# I Activit\' 

# IInstall and have operational FGD equipment, Ai'JD

Convert the hot-side ESP to a cold-side ESP or install an appropriately designed fabric filter. 

# IShut down the coal-fired unit.at Fisk Generating Station.-' 

## I 1 

### Shut down the coal-fired units at Crawford Generating Station.-'



### VIL HEARING (§ 104.204(n)) 

### 49. Midwest Generation does not request ahearing in this matter because no federal law is affected 

### by the requested variance. However, Midwest Generation reserves its right lo request ahearing should USEPA approve Illinois' BART and Regional 

### Haze SIP prior to issuance ofthe Board's order. In sttch an event, Midwest Generation will waive the decision deadlineto an appropriate date to accommodate a hearing.


### VIII. RCRA

(§ 104.206) 

### 50. Section 104.206 oflhe Board'sprocedural regulations is not applicable to this request for variance. Section 1 04.206 specifically addresses requests for variance from the**~Midwest** Cienerarion recognizes thatcompliance plans generally reflect aclivitles necessary to achieve the compliance that is being delayed. In this case, huwe\'Cr, Midwest Generation has included the shutdowns ofthe conl·fired units at the Fisk and Crawford Generating Stations because ofthe relevance ofthe emission reductions associated with those shutdowns ro a'isessment of:my environmental ham1 thatmight arise ifthe Board grams this variance. Mid\\.'est Generation, nonetheless, believes [hatthe requested variance may be granted even absent such shutdawns in Jighl ofthe substantial and arbitrary hardship created by lhe current ESP schedule for Waukegnn Unit 7 tmd tht! minimal, ifany, ndvc1·sc impact attributable to the**one~ycar** extension requested herein.

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Resource Conservation andRecovery Act (RCRA). Midwest Generation does not seek such relief.

WHEREFORE, for 

### the reasons set forth above, MIDWEST GENERATION, LLC- \VAUKEGAN GENERATING STATION requests that the Board grant it a variance that defers the requirements ofSections 225.296(a)(1) and (c)(!) for one year, 

### until December 31. 2014.

Dated: April 9, 2012 Kathleen C. Bassi Stephen 

### .1. Bonebral;e SCHIFF HARDIN, LLP 233 South Wacker Drive, Suite 6600 Chicago, Illinois 60606 312-258-5500 Fax: 312-258-5600 kbassi@schi111tardin.com by: Respectti!lly submined, MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION

# w~.L--;- One ofIts Attorneys

-29-

### Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB 2012-121 * * * * *

BEFORETHEILLINOIS POLLUTIONCONTROL BOARD
MIDWEST GENER..o\.TlON, LLCWAUKEGAN GENERATING STATJON, 

### Petitioner, \", ILLINOIS ENVIRONl\IENTAL PROTECTION AGENCY, Respondent. ) ) ) ) ) ) ) ) ) ) ) l'CB 12-
__ (Variance- Air)

AFFIDAVIT OFDOUGLAS McFARLAN
LDOUGLAS R. McFARLA.c'-1, having first been duly sworn upon oath, depose atlCI state as follows: · 1. [am President oftv!idwest Genermion, LLC. I am also Senior Vice President, Public Af13irs for Edison lv1ission**Group~** the indirect parent company 

### ofl'-·fidwest Generation. In that role, I am responsible for state and local goYernment relations, environmental policy and compliance. n1edia and con"J.munity**relations~ ex~c.utive**  and etnployee**conununica1ions~** and corporare contributions. I joined the company in 1999 and became President ofMidwest Generation in 2011. 1. lvfy duties andresponsibilities at Midwest Generation specincally include supetvision of 

### the Environmental Compliance group o.nd oversight ofsuch activities as the preparation ofthis Petition for Variance. 3. 1participmed in the de\"elopment ofthis Petition

### tor Variance.

## Electronic Filing- Received, Clerk's Office, 04/10/2012 *****PCB2012-121 *****

4. Ihave iead the foregoing Petition for**ariance,** and based upon my personal knowledge and**belie±~** the !nets stated therein nre true and correct. 

### FURTHERAFFIANT SAYETH NOT.

Subscribed and sworn to before me this

# -J~f_l.__,/_,d,a"-..v ofApril, 2012.

Cli!'.lii507QJ.t

## ElectronicFiling -Received, Clerk's Office, 04/10/2012 *****PCB2012-121 * * * * *

Exhibit 

### Exhibit List (I 04.204(h))



### Statewide Air Monitoring Site Locations, Illinois EPA, 40/hAnnualAir Qualily Reporl 20l0 

### (Dec. 2011), p. 34 

### <www.epa.state.il.usiair/air-qualitvreport/20 1 0/index.html 

### >. · 2 2010 Monitming Directory, lllinois EPA, 40thAnnualAir Quality Report 2010 

### (Dec. 2011). Table A4, p. 39, 

### < www.epa.stare.il.us/air/air-qualitvreportl20 1 0/index.html 

### >. 3 Construction Pem1it Issued to Midwest Generation for the Construction of Mercury Control Equipment (July 

### 19. 2007), Appealed in PCB Docket 08-020 (August 27, 2007) 4 Rcdlined Permit (Ex. 2 in PCB 08-020) Reflecting the 

### Partial Stay Granted in the 

### Appeal ofthe Mercury Control Equipment Construction Petmit. 

### 5 Construction PermitIssued to Midwest Generation for Construction ofFGD Equipment (Trona Injection System) (November 19, 

### 20!0). 6 Letterfrom Midwest Generation to IVlr. Ed Bakowski at Illinois EPA Requesting Extension ofTrona Construction Permit (February 28, 2012) and Revised Construction Permit Reflecting the Extension itl Condition !.!2a (March 28, 

### 2012). 7 Two Letters to Mr. Mike Kormos, Senior Vice President, System Operations & 

### Planning, PJM lnterconnection, Notifying PJM ofMidwest Generation's Intention to Shut Down the Coal-Fired Units at the

### Fisk and Crawford Generating Stations (March 

### 8, 2012). 8 Letter to Cheryl Newton, USEPA Region 

### 5, from Illinois EPA (June 24, 2011) Conveyingthe State's BART SIP Submittal and Selected Pages fi·om l!linois EPA's Technical Support Document.forBestAvailable Rerrofit Technology Under the RegionalHaze Rule, 

### AQPSTR 09-06 (April29, 2011). 9 Table ofCalculations Prepared by Midwest Generation in Support ofTable 1 

### in the Petition for Variance. 

### 10 Proposed Approval ofIllinois' BART SIP, 

### 77 Fed.Reg. 3966 (January 26, 2012).