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

*****PCB 2012-121 * * * * * 

BEFORE THE 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 

lllinois Pollution Contml Board 

James R. Thompson Center 

Suite 11-500 

100 West Randolph 

Chicago, Illinois 6060 I 

Julie Annitage 

Acting General Counsel 

Illinois Environmental Protection Agency 

1 021 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 PETITION FOR VARIANCE and APPEARANCES OF 

KATHLEEN C. BASSI and STEPHEN J. BONEBRAKE, copies of which are herewith 

served upon you. 

Dated: AprillO, 2012 
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

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 of April, 2012, I have 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 

Acting General Counsel 

Illinois Environmental Protection Agency 

1021 North Grand Avenue, East 

P.O. Box 19276 

Springlield, Illinois 62794-9276 

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 

kbassiriusch i fll1ardin.com 
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

BEFORE THE 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 behalf of Midwest Generation. LLC, 

Waukegan Generating Station. 

Dated: April 9, 2012 

Kathleen C. Bassi 

SCHIFF HARDIN, LLP 

233 South Wacker Drive, Suite 6600 

Chicago, 111inois 60606 

312-258-5567 

Fax: 312-258-5600 

kbassi!ii)schiffuardin.com 
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERA TJON, LLC, 

WAUKEGAN GENERATING STATION, 

Petitioner, 

y, 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

APP.EARA.NC.E 

PCB 12-------,----

(Variancc- Air) 

! hereby file my appearance in this proceeding, on behalf of Midwest 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 ***** 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION, 

Petitioner, 

v. 

ILLINOIS ENVIRONlY1ENT AL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB12-__ 

(Variance- Air) 

PETITION FOR VARIANCE 

NOW COMES Petitioner, MIDWEST GENERATION, LLC- WAUKEGAN 

GENERATING STATION, by and through its attomeys, SCHIFF HARDIN, LLP, and, pursuant 

to Sections 35 and 37 of the Environmental Protection Act, 415 JLCS 5/35, 37 (201 0) ("Act"), 

and 35 Ill. Adm. Code Part I 04, 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 of significantly changed 

circumstances since this 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 with the emission 

limits of the rule, most of which (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 or umeasonable hardship if the Board 

·does not grant this requested variance. 

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

-I-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

Midwest Generation seeks a variance from only twu of many 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 urrreasonable hardship by permitting the 

company to adapt to unanticipated conditions that have evolved since the adoption oft he CPS. 

Specifically, Midwest Generation seeks a variance from the compliance dates applicable to 

Waukegan Unit 7 for the installation of flue gas desulfurization ("FGD'") equipment (Section 

225.296(a)(l)) and the conversion of the hot-side precipitator on that Lmit (Section 

225.296(c)(J )). The requested variance is for a period of one year only, t!·om December 31, 

2013, until December 31, 2014, with no change in the existing emission rate limits of the CPS. 

The unanticipated conditions that have evolved since the adoption of the CPS have 

occurred because of two factors. First, a significant, ongoing deterioration in energy market 

ptices combined with the development of substantial new federal environmental regulations 

layered on top of the CPS have made long-term investment in the smallest generating units in the 

Midwest Generation fleet questionable and subject to reconsideration at this 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 can gain cost and other 

efficiencies by sequencing the Waukegan units' installation of FGD equipment within a 

concunent time period. None of the 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 

-2-
Electronic Filing -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 later than December 31, 2014. Those retirements are the result of economic 

conditions in the energy market and l'vlidwest Generation's desire to settle a longstanding debate 

in the City of Chicago over a Clean Power Ordinance which proposed to layer additional air 

emission regulations at the local!municipallevel. While not a comment on the use of coal to 

generate electricity, which Midwest Generation believes is essential to ensuring a reliable and 

affordable supply of energy, the company recognized that there is an opportunity to address a 

unique circumstance in which densely-populated neighborhoods have grom1 up around the 

Chicago plants over the decades since they began operation. In an agreement entered into 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, the Natural Resources Defense Council. and the 

Respiratory Health Association of Metropolitan Chicago- stated that, t·ecognizing the net 

benefits to the CPS realized by the early retirements of the Fisk and Crawford coal-fired units, 

they would not oppose tl1is request for.a vmiance for Waukegan Unit 7. 

In support of its 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 at 401 East Greenwood Avenue, Waukegan, 

Lake County, Illinois 60087-5197. The electrical generating units ("EGUs") at the Waukegan 

-o-
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 

of electricity. 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 and contains a railroad line; residential 

development is located further in that direction. To the nm1h is the former Johns-Manville 

transite manufacturing facility, now essentially vacant and fenced. Lake Michigan is to the east. 

South of the Station are the North Shore Sanitary District wastewater treatment plant and a 

vacant piece of property owned by Commonwealth Edison. 

3. Midwest Generation operates two electric generating units at Waukegan2 with the 

capability to fire coal as their primary 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 ash handling activities. In addition to the boilers, Waukegan 

operates four oil-iired turbines, used during peak demand periods. Pursuant to the CPS, the 

company pem1anently retired the !DO-megawatt coal-fired Waukegan Unit 6 in 2007. 

4. Relevant to this Petition for variance, particulate matter ("PM") emissions fi·om 

each boiler are controlled by an electrostatic precipitator (';ESP"); the ESP for Unit 7 is a "hotside" precipitator, defined in the Board's pertinent rule as "an ESP 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-side ESP 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 of Sec1ion 

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. 

-4-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

at the Waukegan Stmion in 2011 were 768 tons.' Emissions of mercury are controlled by the 

injection of powdered activated carbon ("ACI''). i'vlercury emissions in 2011 were 79 pounds at 

the Waukegan Station, compared with station mercury emissions of 231 pounds in 2007, the year 

the CPS was adopted. S02 emissions are currently controlled through the use of very !ow-sulfur 

coal. S02 (!missions rrom the Waukegan Station in 2011 were 9,929 tons. Emissions of other 

pollutants, including NOx, are not an issue in this Petition for Variance, although, as discussed 

further below, 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 of the Chicago ozone and PM2.55 nonattairunent areas. 6 The 

Illinois Environmental Protection Agency ("Agency" or "Illinois EPA") has proposed that Lake 

County be designated unclassifiable for the 1-hour sulfur dioxide (''S02") NAAQS. 7 

6. It appears !rom the Agency's 40Jh Annual Air Quality ReporT (201 0) ("201 0 AQ 

Rpt.") rhat there arc two monitoring stations op~rated by the Agency located in Lake 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 I 0 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. 

G Note 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. 

US EPA l1as proposed to include Lake Counly in the 2008 ozonl! nonanaimuent area as ;:1 marginalnonanainment 

area. the lowest classification of non attainment. 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 of the State of Illinois (January 31.20 12), 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 or Air and Rcidiation. VSEPA Region 5, from Laurel Kroack. 

Chief, Bureau of Air. Illinois EPA (June 2~2011). Midwesr Generatio11 can provide the Board with a copy of&his 

Jener if the 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 of these pages are attached hereto as E~hibits 1 and 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 penn it to Midwest Generation for Waukegan on February 7, 2006. 

Subsequently, on March 13,2006, Midwest Generation timely appealed the CAAPP permit for 

Waukegan at PCB 06-146. The Board accepted the appeal for hearing on March 16, 2006. and 

the Board found that, pursuant to Section 1 0-65(b) of the Administrative 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 Generating Station v. !l/inois Environmental Protection 

Agency, PCB 06-146(March 16, 2006), p. 2. The CAAI'P pennit remains inetfcctive. The 

current decision dead line in that appeal is September 6, 2012. Midwest Generation, however, 

anticipates entering into negotiations "~th the Agency regarding resolution of the CAAPP permit 

appeal.H 

8. On July 19, 2007, the Agency issued Midwest Generation a constmction pennit 

authorizing the installation of ACT equipment at the Waukegan Station,9 as required by the CPS. 

Midwest Generation timely 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~ if the Board is interested. in the CAAPP penn it or the appeal. 

Midwest Generation directs the Board to its own docket at- PCB 06·146 fbr any documems of interest. 

'Application No. 07050007. 

·6-
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

to Midwest Generation's request. the Board issued a partial stay of this permit. Order, Midwes/ 

Genercr£ion, LLC- Waukegan Ge11era!ing Slation ''· Illinois Environmental Protection Agency 

(September 20. 2007). As required by Section I 04.204(i), attached hereto as Exhibits 3 and 4, 

respectively, are copies of the permit issued by the Agency and Exhibit2 of the Petition for 

Review of the construction permit, which is a redlined version of the permit revealing the stayed 

and active pottions of this pem1it. Notwithstanding this appeal of cc11ain provisions of the 

permit, the air quality benefits of the CPS relative to mercury have been fully realized as of this 

date with the installation and operation of the ACI equipment beginning in July 2008. 

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

pem1it authorizing the installation of a dry sorbent injection system and the conversion of the 

hot-side ESP to a cold-side ESP for Waukegan Unit 7. 10 See Exhibit 5. As dlscussed more fully 

below, Midwest Generation sought this construction permit as pat1 of its plan to comply with the 

CPS and has obtained a one-year extension of this permit from the Illinois Environmental 

Protection Agency. 

10. Midwest Generation has sought no other variances from the CPS for the 

Waukegan Station or any of the other generating stations comprising the Midwest Generation 

CPS Group as defined at Sections 225.292(a) and (d) and 225.Appendix A. 

ll. REGULATORYBACKGROUND 

(§ I 04.204(a)) 

11. On March 14, 2006, the Agency submitted a proposed rulemaking to the Board, 

"In the Matter Of: Proposed New 35 Ill.Adm.Code 225 Control of Emissions tl·om Large 

Combustion Sow-ces," docketed at R06-25 ("the Mercury Rule"). The Board adopted this rule 

10 fl.pplicntion No. 10090034, 

-7-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

on December 21, 2006. and it was effective as of that same date. The Mercury Rule includes 

some provisions in Subpart A of Part 225 and all ofSubpm1 B of Part 225. 

12. On May 22. 2006, the Agency submitted a proposed rulemaking to the Board, "In 

the Matter of: Proposed New CA!R 802, CA!R NOx Annual and CAIR NOx Ozone Season 

Trading Programs, 35 !ll.Adm.Code 225, Control of Emissions 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 a joint comment in this rulemaking describing an agreement they 

reached regarding mercury control and purporting to set forth the substance of their agreement to 

add Subpart F to Part 225 ("Subpart F"). 12 R06-26, PC# 9. Subsequently, on J<muury 10, 2007, 

the Agency and Midwest Generation Jlled a joint comment 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 Subpart F. On June 25, 2.007, Midwest 

Generation submitted comments on the First Notice 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 Subpart F of Part 225 to Subpart B of Part 225. 

13. Pursuant to Section 225.292. Midwest Generation opted in to the CPS on 

December '27, 2007, identifying Waukegan Unit 7 as one of the electric generating units 

("EGUs") to be included as pat1 of the Midwest Generation CPS Group. Therefore, Waukegan 

11 Clean Air lntcrsta(c Rule. 

PC# 9. 

12 Note that 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 of this Petition for Variance, is subject to the provisions from which Midwest 

Generation seeks relief. 

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

Section 225.296 Combined Pollutant Standard: Control 

Technology Requirements for NO, SO,, and 

PM Emissions 

a) General Technology Requirements for NO, and S02. 

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

operator must either permanently shut down or 

install and have operational FGD equipmem on 

Waukegan 7; 

*** 

c) Control Technology Requirements for Pf'vL 'T'he 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 airprehcater [SlC] where the operating temperature is typically 

at least 550° F, as distinguished ftom a cold-side ESP that 

is installed after the air pre-heater where the operating 

temperature is typically no more than 350° F. 

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

111. RELIEF REQUESTED 

(§§ 104.204(c), (d), (e), (I), (k)) 

15, Midwest Generation seeks targeted, nan·ow relief from the CPS in order to avoid 

arbitrary and unreasonable hardship. Specifically, Midwest Generation seeks relieffrom the 

CPS requirements that it ( l) install FGD equipment on 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 of these, that it shut the unit down by December 31, 2013. Midwest Generation 

-9-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

seeks one additional year to install the FGD equipment, convert the hot-side ESP to a cold-side 

ESP, or shut down the uniL Midwest Genemtion does not seek any relief from 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, or the CPS requirements applicable 

to the other EGUs in the Midwest Generation CPS Group. 

I 6. Midwest Generation seeks the variance almost two years in advance of the 

compliance date because of the long lead time nec.essary for planning and conducting the 

construction necessruy to comply with the provisions of Sections 225.296(a)(l) and (c). lt 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 required in anticipation ofconstrucdon, as 

well as the actual construction of the FGD equipment and the conversion of the hot-side 

precipitator. Commencement of such activities on the schedule cun·emly required would 

constitute arbitrary and unreasonable hardship to Midwest Generation and may be economically 

impractical and result in the pet1nanenr retirement of the unit and subsequent loss ofjobs. 

A. Section 275.296(a)(l)- FGD Eauipment 

17. To comply with the requirement of Section 225.296(a)(l) that Midwest 

Generation install FGD equipment at the 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 order to meet the FGD equipment 

requirement and a baghouse in order to comply with the additional requirement of the CPS to 

install a baghouse or convert from a hot- to cold-side ESP to achieve additional mercL1ry 

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

.[ 0-
Electronic Filing -Received, Clerk's Office, 04/1 0/2012 

*****PCB2012-121 ***** 

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

conducted for the com pony by Shaw. The lack of available, adequate space at Waukegan 7 was 

part of the cost and scheduling issue. In order to accommodate a dry scrubber and baghouse, 

Midwest Generation would have to 1111 in part ofthe circulating water inlet canal, which in itself 

would require various permits and long lead times. Escalating costs and the onset of the 

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 of installing 

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 of converting the ESP from hot- to cold-side at a cost of $70 million, rather than 

installing a bagbouse, to comply with the CPS for mercury removal, is fimnd in paragraph 20, 

below. Therefore, total FGD equipment and mercury removal costs have been reduced 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 

order to 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 of tbe dry sorbent injection system in the fall of20 I 1 but has 

obtained an extension of the construction pennit to allow it time to reevaluate in l-ight of the 

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 inject a 

dry sorbent reagent (trona) into the flue gas strean1 exiting the boiler before it goes out the stack. 

-11-
Electronic Filing- Received, Clerk's Office, 04/10/2012. 

*****PCB2012-121 ***** 

This equipment includes trona unloading equipment, on-site trona storage, milling equipment 

needed to grind the trona, and blowers necessary to transport and distribute it into the flue gas 

stream to 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 solid particulates 

that will be collected in the ESP. 

19. Unlike Unit 7. Midwest Generation has until December 31, 2014, to install FGD 

equipment on Unit 8. 35 Ill. Adm. Code§ 225.296(a)(2). Delaying the requirement to install 

FGD equipmem on Unit 7 for a year would allow Midwest Generation to petfonn the installation 

work for both units at the same time. Under the current and presently 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 of the Hot-Side ESP 

20. Section 225.296(c)(J) provides Midwest Generation with the choice of converting 

the hot-side ESP on Unit 7 to a cold-side ESP, installing a baghouse, or shutting dow11the unit. 

As discussed above, there are space limitations at Waukegan 7 that make installation of a 

baghouse particularly expensive and time-consuming. Midwest Generation determined that it 

would best to convet1 the unit's hot-side ESP. The cost of converting 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, Midwest Generation has 

already obtained a construction permit for this work. The November 19,2010, constnJction 

penn it for the FGD equipment installatio11 described above also authorized the conversion of the 

-t2-
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

hot-side ESP to a cold-side ESP. To implement that conversion pursuant to the permit, Midwest 

Generation would have to complete detailed engineering of the conversion process and order and 

fabricate the necessary duct work to accommodate the conversion. Additionally, the conversion 

of the ESP will entail a long outage of Waukegan Unit 7. Titerefore, Midwest Generation must 

coordinate that outage with P.TM. 13 which could also atTect the timing oft he project. 

C. Compliance Efforts and Hardship 

22. Planning to comply with Sections 225.296(a)(l) and (c)(J) through the 

installation of the FGD equipment and ESP conversion at Waukegan 7 described above. tv!idwest 

Generation expended considerable resources to obtain a construction penn it, attached hereto as 

Exhibit 5. issued November 19, 201 0. However, subsequent m the Agency's issuance of the 

construction permit, USEPA proposed and promulgated two major mles: the Cross-State Air 

Pollution Rule ("CSAPR'')" and the 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, in i·esponse to the 

court order in North Carolina v. EPA .

16 The CSAPR includes a lllllltber of features that are 

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 of S02 

\} P JM lnterconnection. LLC is the regional transmission system operator that must protect reliability of the 

grid and review the removal for any extended period of time of any generating units within the scope ofPJM's 

authority and responstbility. 

'' Proposed at 75 Fed. Reg. 45210 (August 2, 201 0); tinalized at 76 Fed.Reg. 48208 (August 8, 20 II), 

effective October 7, 2011. 

"Proposed at 76 Fed. Reg. 24976 (May 3. 20 II); 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!R remain efl'ec1ive unlil USEPA 

replaced it with a new rule, which is ihe CSAPR. 

·13-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

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

allowances issued by US EPA and no involvement of the states unless they develop stale 

implementation plans ("SIPs") in the future. The CSAPR also presents an entirely new S01 

allowance trading program. 

24. There are a number of uncet·tainties with respect to the CSAPR. First, it is not 

clear whether the IJiinois EPA will develop a SIP to address the CSAPR to replace US EPA ·s 

allowance allocation methodology and if ir does. exactly what allowance allocation methodology 

it will adopt. Second, the CSAPR was timely appealed by a number of enrities at EME Homer 

City LLC v. EPA. No. 11-132 (D.C. Cir. filed August 23, 2011 ). On December 30, 2011, the 

com1 stayed the effectiveness of the CSAPR. In light of the nature of the program and the time 

needed for the court to address the merits of the arguments on appeal, it seems likely that the stay 

will defer implementation of the 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 of the year. However, no 

one c>m predict the outcome of the appeals. Assuming that the com1 does, indeed. issue its final 

order this 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 

the rule first effective in 2013 with the additional reduction in so2 allowances applicable in 

2015. 

25. The tv! A TS, which coditles the Utility Maximum Achievable Control Technology 

("lvil\CT") requirement applicable to coal- and oil-fired EGUs pursuant to Section 112 of the 

Clean Air Act, was not even proposed at the time that Midwest Generation obtained its 

construction penn it. Midwest Generation could not have had any idea of the scope of the rule. 

As with the CSAPR, USEP A made changes to the MATS in its final fonn. At least one party to 

-14· 
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

date has tiled an appeal of the !VIA TS, and one can reasonably anticipate that there 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 or even 

whether the rule will smvive the challenge. However, as fmally adopted, the MATS requires 

reductions of emissions of mercury, non-mei·cury hazardous ("HAP") metals, and hydrogen 

chloride ("HCl"). US EPA has established in the MATS the option of monitoring tilterable Plv! 

emissions as a surrogate for the non-mercury HAP metals. Even if a 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 option to comply with an S02 

emission limit as a sUJTOgate to complying with the HCilimit. As with PM and non-mercury 

HAP metals, USEPA has found that controlling 802 effecti\;ely controls HCI. Therefore, the 

company would not install different control equipment to address HCI. In this sense, the 

measures that Midwest Generation must undertake 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 of compliance deadlines converging on 2015 creates overlapping, 

significant S01, mercury, and PM emission reduction obligations that conflict with the CPS's 

2013 deadlines applicable to Waukegan Unit 7. The one-year extension 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, improving efticiency and providing cost 

savings. as mentioned above. In addition, the pending CSAPR appeal and stay and the pending 

MATS appeal create uncertainties about the timing and scope of the requirements that may 

·15-
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

survive appeal. At least some of this uncertainty could be alleviated by deferring the deadlines at 

issue for Waukegan 7, thus potentially providing an opportunity for 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 

coulcl help Midwest Generation avoid additional and unnecessary significant costs and disruption 

of unit 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 by the grant of the requested variance with respect to Waukegan Unit 7 to allow 

Midwest Generation to harmonize and consolidate its compliance efforts under the CPS with 

those required by or that may 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 this time and poses an undue hardship, especially given that Midwest Generation 

seeks no change in fleet-wide emissions limits w1der Ule CPS. 

28. Section 35(a) of the 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 of compliance are substantial and certain." 415 ILCS 5/35(a) (2010). 

However, the Board ha<;, indeed, recently granted a variance to a petitioner faced with unique 

regulatory uncert·ainty where the costs of compliance 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 of the CPS and the new 

federal rules, and the costs of compliance are substantial and certain. Considering those factors 

together with the lack of impact to tl1e envir01m1ent from delaying compliance by one year shows 

-16-
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

that a variance is wanantcd. This slight adjustment of the compliance date for Midwest 

Generation for this one unit would help to avoid the unforeseen inefficiencies and uncertainties 

that have developed with the promulgation of the two new federal mles. 

IV. ENVIRONMENTAL Il\1PACT 

(§ I 04.204(g)) 

29. As Midwest Generation announced on February 29, 2012, it plans to shut down 

the coal-tired unit at the Fisk Generating Station in2012 and its Crawford Generating Station by 

no later than the end of20 14, subject to P.ll\1 review." The removal of emissions from the coalfired unit at the Fisk Station during the timeframe of this variance, if the Board grants it, and of 

the coai-Jired units at the Crawford Station coincidental with the termination of the variance 

would more than offset the 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, emission rates beginning with an average annual rate of 0.44lb/mmBtu in 

calendar year 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/mmBtu would be 66,109 tons. With the coal-fired unit at 

the Fisk Station retired by the end of this calendar year, the estimated system-wide 2013 S02 

emissions would be 62,282 tons, a reduction of 3,827 tons or 5.6 percent. The CPS does not 

require the installation of FGD equipment or retirement at Fisk until December 31, 2015. 

ti lfPJM were to determine that the shutdown of either Fisk or Crawford or bo'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 of its intention to shut down Unit 19 at the Fisk Station. See 

Exhibit 7. If Midwest Generation receives the final results ofPJM's review during this variance proceeding, it will 

provide a copy to the Board. 

-17-
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

Therefore, even if one assumed that the coal-fired unit at Fisk would be re.tired at the end of 2015 

rather than retrofitted with FGD equipment, there are cumulative annual reductions ofS02 in 

2013, 2014, and 2015 accruing fi'OJH the early retirement of the coal-fired unit at the Fisk Station 

totaling II ,481 tons or a 7.5 percent lleetwide reduction. 

3 I. The net S01 benetlt ofthe total package included with this request for variance 

increases with the retirement of the 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 of20 17 for Unit 8 and of20 18 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 

of 2017 for Unit 8 and through the end of2018 for Unit 7, With the early retirement of both 

units by the end of 2014. the cumulative reduction in S02 emitted !rom Crawford for yeurs 2015, 

20 I 6, 2017, and 2018 is 23,592 tons, compared to a business-as-usual CPS compliance case. 

32. Using these same assumptions for PM emissions, i.e. 2008-20 ll average heat 

input, lvfid west Generation estimates that the PM emission reductions due to the early, planned 

shutdovms of the coal-tired tmit at the Fisk Station would be 2,084 tons for 2013, 2014, and 

2015. The estimated emission reductions from the early, plarmed shutdown of the 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 of the coal-tired tu1its at Fisk and Crawtord Stations 

would be 5,620 tons. 18 

18 The MATS provides a PM emission rate as a sun·ogate for the non-mercury HAP meH.tl emissions. If 

Midwesr Generation chose to rely on that sutTogate rate for compliance with the MATS, the PM emission reductions 

resulting lfom the plmmed early shutdowns of the coal-fired units CJt fisk and 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 o 0.21bfmmBtu S02 emission 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 stringent than rhc rate required by the 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 of the coal· fired units at Fisk and Crawford. 

-18-
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

33. Although the one-year compliance delay sought in this variance will not affect 

NOx emissions at Waukegan Unit 7, the shutdowns of the 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 

of the 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 of Unit 7 at Crawford Station will be 2,663 tons during 2015 through 2018 and 3,437 

tons from Unit 8 in 2015through 2018. The total anticipated NOx reductions at Crawford 

Station would be 6.100 tons. 

34. Pursuant to the CPS, both Waukegan units were among the first in the nation to 

install mercury control equipment in July 2008. Since 2007, mercury emissions at Waukegan 

Station have been reduced from approximately 231 pounds per year to less than 80 pounds per 

yeur. Since 2008, Waukegan Unit 8 has achieved significant mercury reductions, consistently 

measuring g1·eate1· than 90 percent, well in advance of the federal compliance deadline. Unit 7 is 

now achieving significant mercury emission reductions, in the range of72% when the unit 

operates at lower loads. When operated at higher loads, the rate of reduction decreases. The. 

CPS requirement to conve11 or replace the hot-side ESP is to improve mercury removal 

efficiency on that unit. Even with the extension of a year to convert or replace the hot-side ESP, 

Unit 7 will have begun significantly reducing mercury emissions prior to implementation of the 

MATS. Mor~over, Unit 7 will comply with the state's unit-by-unit limitations by the CPS' 
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

January I, 2015, compliance deadline. 19 Midwest Generation will continue to 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 that the average mercury emissions, based on 201 0 and 2011 

actual emissions and which Midwest Generation would expect to continue into the future if it 

continued to operate the coal-fired tmits at these two plants, are approximately 5 lbslyear at 

Crm,ford Unit 7, 3 lbslyear at Crawford Unit 8, and 8 lbslyear at Fisk Unit 19. With the planned 

shutdown ofthe coal-fired unit at Fisk in 2012, approximately 23 pounds of mercury that could 

have been emitted in 2013, 2014, and 2015, asswning a level of generation similar to 2010 and 

2011, would not be emitted. Likewise, Crawford Unit 7 would not emit approximately 18 

pounds of mercury in2015, 2016,2017, and 2018, and Crav.ford Unit 8 would not emit 

approximately 12 pounds of mercury in 2015, 2016, and 2017. The total reduction in mercury 

attributable to the shutdown of these three units between 2013 and 2018 is approximately 54 

pounds. Because oft he potential persistence of mercury in the. environment, the Board can 

legitimately view the firture reductions from the Fisk and Crawford coal-fired units as mitigation 

for the one· year delay in achieving additional mercmy emissions from Waukegan Unit 7. 

36. Table I 20 below sets 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 if the variance were not granted, also based on average 

2008-2011 heat input, and the net benefit in terms of overall reductions in emissions resulting 

19 Note that the MATS does not require unit·by-unit compliance and allmvs snurce.wide averaging. 

20 Exhibit 9 provides a table ofrhe calculations that serve as the basis for Table 1. 
I 

Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

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 Net Benefit 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 .J-,-.J ,~ ?'] tons I 

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 reflect a low capacity factor of J9%; 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 occur for only one year longer than is currently required by 

21 The. mercury emissions reported in Table 1 ret1ect achml ~missions based upon stack resting at various 

lo'!ds. Smck tes[S of mercury emissions nt various operating loads re,•ealed that Unit 7 achieves a reduction 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% of the operating hours in 20 ll. 

2.! Midwest Generation notes that although rhe CPS refers to PM emissions in the litle of Section 225.296, 

nolhing in the CPS actually imposes any specific emissions limitations. However1 the purpose of an ESP is to 

control I'M. Althougl> !he purpose of the conversion of the Waukegan 7 ESP from a hot-side to a cold-side ESP is 

to improve mercury ren10\'al efficiency and nor specifically PM removal efficiency, Midwest Genemtion has 

included the impEJcl of the variance, if gnmted, on PM emissions for purposes of providing complete information to 

the Board. 

-21-

' i 
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

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 of the Fisk and 

Crawford Stations in northeastem Illinois, which are discussed above. Therefore, Midwest 

Generation is actually providing through this proposal a benet!! to the environment that far 

exceeds any delay i11 additional emission reductions from Waukegan 7 that could result from the 

grant of this variance. Any suggestion of environmental hann that might result if the Board 

grants the requested variance is outweighed by the benelits to the environment and public by the 

emission reductions due to the planned shutdowns of the coai-J1red units at Fisk and Crawford 

and by the hardship to Midwest Generation if it were required to proceed with compliance at 

Waukegan Unit 7 and forego the efliciencics that can be anained by just a year's delay. 

37. Midwest Generation has already installed significant mercury (ACI) and NOx 

(SNCR) controls on other CPS Group units, thus significantly reducing such emissions. 

Assuming the variance requested in this petition is granted, following the one-year deferral, 

Midwest Generation will proceed with one of the Waukegan 7 compliance options under the 

CPS. Further, Midwest Generation will comply with tl1e requirements applicable to other CPS 

Group units on !he timeline provided by the 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-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

impact of fine particulate matter on human health may be far more significant than the potemial 

impact of mercury. 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 of the coal-fired 

units at Fisk and Cra'Wford would have a far greater benefit, based on USEPA publications. The 

impact of a year's delay in reducing mercury emissions at Waukegan will be minimal ru1d will be 

significantly offset by tht: e±Tectively contemporaneous closures of the coal-fired units at Fisk 

and Crawford. Therefore, the impact of the request variance for Waukegan Unit 7 should be 

minimal, if any, to both human health and the environment. 

39. PM emissions are already controlled by the existing ESP. Therefore, mercury 

emissions and PM emissions from that unit are already significantly controlled. and the use of a 

somewhat less efficient ESP for a single year should have minimal impact. Moreover, the early 

closure ofUnit 19 at Fisk more than offsets the PM emissions from Waukegan 7 during the year 

of the variance period. 

40. S02 emissions contribute to the formation of Acid Rain and line particulate 

matter. Midwest Generation complies with the Acid Rain penn it issued for Waukegan 7. 

Emissions of fine particulate matter are currently regulated by the CAIR. Acid Rain can 

contribute to eutrophication of water bodies located far dovmwind of a source ofS02. US EPA 

has documented various health effects, largely respiratory, associated with inhalation of tine 

particulate matter. Waukegan 7 is in compliance with these requirements and will remain so 

duting the pendency of the variance, if granted. 

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

212.203. These requirements v-.1Il continue to apply. Waukegan Unit 7 is in compliance with 

these requirements and will remain so. Moreover, the PM reductions resulting from the 

-23-
Electronic Filing -Received, Clerk's Office, 04/1 0/2012 

*****PCB2012-121 ***** 

shutdowns of the 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 demonstrate that 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 cause negligible, if any, quantitative or qualitative inj UIY 

in light of the associated emission changes, including the large expected reductions in S02 and 

PM emissions. DlU'ing the pendency of the variance., if grruncd, Midwest Generation will 

continue to inject powdered activated carbon to control mercury emissions at Waukegan Unit. 7. 

It will continue to operate its hot-side ESP to control pmiiculate emissions. 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 comply with 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 Unit 7 and more than fully offsel1ing the one-year delay in 

reducing emissions of PM and S02 from Waukegan Unit 7 resulting from the requested one-year 

deferral and achieving a reduction in S02 tons emitted in excess of the CPS schedule beginning 

in 2013. Given all of these factors, tl1e hardship to Midwest Generation clearly outweighs any 

potential.impact to human health or the environment, and the hardship, therefore, rises to the 

level of"arbitrary or unreasonable," consistent with Section 35(a) of the Act and Board 

precedent in variance proceedings. 

-24-
Electronic Filing -Received, Clerk's Office, 04/1 0/2012 

*****PCB 2012-121 * * * * * 

V. CONSISTENCY WITH FEDERAL LAW 

(§§ 1 04.204(1) and 1 04.208(a)) 

43. The Board may grant this requested variance consistent with fedemllaw. 

Granting the variance has no impact on Section 11 O(a) of the Clean Air Act and 40 CFR Part 51 

other than as discussed above. Further, Section ll0(a)(2)(D) of the Clean Air Act is addressed 

through the CAIR and eventually the CSAPR or its successor. Midwest Generation complies 

with the CAlR and will continue to do so as long as it is applicable. On June 24, 201 I. the 

Agency submitted pmiions of the 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 of Technical Supporr Documemfor Best Available 

Retrofit Technology Under the Regional Haze 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, US EPA proposed to approve the Illinois BART SIP as submitted. 77 

Fed.Reg. 3966 (Jan. 26, 2012). Therefore, the provisions !rom which Midwest Gcneratiotl seeks 

relief are not currently part of the Illinois SIP and are not federally enforceable and are consistent 

with federal law. 

44. However, recognizing a potential concem of the Board regarding consistency 

with federal law, Midwest Generation points out several factors. First, Waukegan Unit 7 is not 

one of the BART-eligible units that lllinois EPA identified in its BART SIP submittal. See 77 

Fed.Reg. at 3971. Additionally, the BART/Regional Haze SU' is concemed with the S02 

emission rate. Illinois EPA demonstrated that the svstem-wide averacre so, emission rates • 0 -

~~ Exhibit 9 consists of the cover lener~ the Technical S11pporr Document ('<TSD,') cover pngc. TSD pp. 24-

25. 30-3 I. 33. nnd Appendix C. These are the pages pertinent to this request for variance; however, Midwest 

Generation will provide the Board with a copy of the enti1·e TSD or rhe entire collection of documents included in 

the SIP submittal if[he Board requires. 

-25-
Electronic Filing -Received, Clerk's Office, 04/1 0/2012 

*****-PCB2012-121 ***** 

included in the CPS provide greaTer reductions than applying the presumptive BART rate to jusT 

BART-eligible units by applying the rates to average heat input, and US EPA 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 presumptive BART, as presented in Illinois' 

BART submittal. Additionally, the shutdowns of Fisk 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 applying the BART presumptive rates 10 

only the BART-eligible units. Therefore, even ifUSEPA were to adopt the CPS into the SIP 

before the concl\tsion of the 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 between the compliance dates for the FGD 

equipmem installation and the ESP conversion that would be included in the SIP versus the date 

that the Board would grant in a variance. lfthe BART/Regional Haze SIP, inchtding elements of 

the CPS, is in place before the tennination of the 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 the planned shutdowns of Fisk 

and Crawford. It 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. 

46. The portions of the CPS addressing mercury, i.e., the impetus for requiring the 

ESP conversion, were not included in lllinois' BART and Regional 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 of Part 225, Subpart B to 

USEPA with the BART SIP for purposes of completeness but requested that only the bolded sections in Part 225, 

Subpart B be included in rhe SIP. 

-26-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

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

directly impose line particulate matter standards on Waukegan Unit 7. Arguably, Section 

225.296(c)(l) should not even be part of the proposed SIP. However, we understand that Illinois 

EPA included it in the proposal because it submitted entire sections of the CPS rather than 

limiting the submittal to appropriate subsections. 

VI. VARIANCE CONDITIONS AND COMI'LIAi'<CE PLAN 

(§§ I 04.204([) and (j)) 

47. Midwest Generation requests that the Board grant a valiance extending the 

compliance deadlines of Sections 225.296(a)(l) and (c)( 1). On or before December 3 I, 2014, 

Jvlidwest Generation shall (1) either permanently 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·side ESP or install an appropriately designed fabric J:i!ter on Waukegan Unit 7. 

48. Midwest Genemtion recommends a compliance plan as follows: 

Date Activity 

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

pendency of the 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 applicable requirements. 

On or before Apply for a new or extended construction permit, as needed, for 

September 15, 2014 installation of the FGD equipment and conversion of the hot·side 

precipitator or other control methodologies that Midwest Generation 

determines are more appropriate for Waukegan Unit 7. 

On or before Shut down Unit 7; OR 

December 31, 2014 

-27-

' I 

I 
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

Date 

On or before 

December 31, 2012 

On or beiore 

December 31, 2014 

I Activit\' 

I Install and have operational FGD equipment, Ai'JD 

Convert the hot-side ESP to a cold-side ESP or install an appropriately 

designed fabric filter. 

I Shut 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 a hearing in this matter because no federal 

law is affected by the requested variance. However, Midwest Generation reserves its right lo 

request a hearing should USEPA approve Illinois' BART and Regional Haze SIP prior to 

issuance of the Board's order. In sttch an event, Midwest Generation will waive the decision 

deadline to an appropriate date to accommodate a hearing. 

VIII. RCRA 

(§ 104.206) 

50. Section 104.206 oflhe Board's procedural regulations is not applicable to this 

request for variance. Section 1 04.206 specifically addresses requests for variance from the 

~Midwest Cienerarion recognizes that compliance plans generally reflect aclivitles necessary to achieve the 

compliance that is being delayed. In this case, huwe\'Cr, Midwest Generation has included the shutdowns of the 

conl·fired units at the Fisk and Crawford Generating Stations because of the relevance of the emission reductions 

associated with those shutdowns ro a'isessment of:my environmental ham1 that might arise if the Board grams this 

variance. Mid\\.'est Generation, nonetheless, believes [hat the requested variance may be granted even absent such 

shutdawns in Jighl of the substantial and arbitrary hardship created by lhe current ESP schedule for Waukegnn Unit 

7 tmd tht! minimal, if any, ndvc1·sc impact attributable to the one~ycar extension requested herein. 

-28-

l 

i 
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

Resource Conservation and Recovery Act (RCRA). Midwest Generation does not seek such 

relief. 

WHEREFORE, for the reasons set forth above, MIDWEST GENERATION, LLC-

\V AUKEGAN GENERATING STATION requests that the Board grant it a variance that defers 

the requirements of Sections 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@schi 111tardin. com 

by: 

Respectti!lly submined, 

MIDWEST GENERATION, LLCWAUKEGAN GENERATING STATION 

w~.L--;- One of Its Attorneys 

-29-
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

MIDWEST GENER..o\.TlON, LLCWAUKEGAN GENERATING STA TJON, 

Petitioner, 

\", 

ILLINOIS ENVIRONl\IENTAL 

PROTECTION AGENCY, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

l'CB 12-__ 

(Variance- Air) 

AFFIDAVIT OF DOUGLAS McFARLAN 

L DOUGLAS R. McFARLA.c'-1, having first been duly sworn upon oath, depose atlCI state 

as follows: · 

1. [am President of tv!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 of Midwest Generation in 2011. 

1. lvfy duties and responsibilities at Midwest Generation specincally include supetvision of 

the Environmental Compliance group o.nd oversight of such activities as the preparation 

of this Petition for Variance. 

3. 1 participmed in the de\"elopment of this Petition tor Variance. 
Electronic Filing- Received, Clerk's Office, 04/10/2012 

*****PCB2012-121 ***** 

4. I have iead the foregoing Petition for ariance, and based upon my personal knowledge 

and belie±~ the !nets stated therein nre true and correct. 

FURTHER AFFIANT SAYETH NOT. 

Subscribed and sworn to before me 

this -J~f_l.__,/_,d,a"-..v of April, 2012. 

Cli!'.lii507QJ.t 
Electronic Filing -Received, Clerk's Office, 04/10/2012 

*****PCB 2012-121 * * * * * 

Exhibit 

Exhibit List 

(I 04.204(h)) 

Statewide Air Monitoring Site Locations, Illinois EPA, 40/h Annual Air 

Qua lily Reporl 20 l 0 (Dec. 20 11), p. 34 < www.epa.state.il.usiair/air-qualitvreport/20 1 0/index.html >. · 

2 2010 Monitming Directory, lllinois EPA, 40th Annual Air 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 of the Mercury Control Equipment Construction Petmit. 

5 Construction Permit Issued to Midwest Generation for Construction of FGD 

Equipment (Trona Injection System) (November 19, 20!0). 

6 Letter from Midwest Generation to IVlr. Ed Bakowski at Illinois EPA 

Requesting Extension of Trona 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 of Midwest 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, USEP A Region 5, from Illinois EPA (June 24, 2011) 

Conveying the State's BART SIP Submittal and Selected Pages fi·om l!linois 

EPA's Technical Support Document.for Best Available Rerrofit Technology 

Under the Regional Haze Rule, AQPSTR 09-06 (April29, 2011). 

9 Table of Calculations Prepared by Midwest Generation in Support of Table 1 

in the Petition for Variance. 

10 Proposed Approval of Illinois' BART SIP, 77 Fed.Reg. 3966 (January 26, 

2012).