The Illinois Environmental Protection Agency has taken a neutral stance on a request by Midwest Generation to allow for a one-year delay in the compliance deadline for the coal-fired Waukegan unit 7.
Midwest Generation, a unit of Edison International (NYSE: EIX), applied on April 10 with the Illinois Pollution Control Board for a waiver of the Combined Pollutant Standard (CPS) deadline for Waukegan 7. The current compliance deadline is Dec. 31, 2013, with Midwest Generation wanting to push that back to Dec. 31, 2014. In a May 25 filing, the Illinois EPA said it neither supports nor objects to this request.
The variance would give Midwest Generation an additional year to install flue gas desulfurization (FGD) equipment on 7 and convert the hot-side precipitator on that unit to a cold-side precipitator or shut down the unit. In return, Midwest Generation agrees to retire the coal-fired boilers at both the Fisk and Crawford plants in Chicago earlier than might otherwise be required.
Waukegan is a 689-MW plant located in Waukegan, Lake County, on Lake Michigan. The operating units are referred to as Units 7 and 8 and began operations in 1958 and 1962, respectively. Midwest Generation shut down permanently unit 6, with 100 MW of capacity, in December 2007.
In November 2010, the Illinois EPA issued Midwest Generation a construction permit 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. Midwest Generation has obtained a one-year extension for this permit.
The variance provisions of the Illinois Environmental Protection Act and the board’s procedural regulations have been approved as part of the Illinois State Implementation Plan (SIP) to achieve the National Ambient Air Quality Standards (NAAQS) for ozone in the greater Chicago ozone attainment area, the agency noted. However, in order for U.S. EPA to recognize the substance of this variance and to incorporate the provisions into federal law, any variance granted to Midwest Generation by the board in this proceeding must be submitted to U.S. EPA as a SIP revision, the agency added.
Midwest Generation asserted that at the time of filing, the variance request was consistent with federal law. “However, the Illinois EPA has submitted portions of the CPS as amendments to the Illinois SIP for purposes of satisfying the Best Available Retrofit Technology (‘BART’) program (regional haze),” the state agency pointed out. “Petitioner notes that because the USEPA has not yet approved this SIP revision, it is not currently part of the Illinois SIP and thus the variance is consistent with Federal law. Should the BART/Regional Haze SIP be approved by the USEPA, the Petitioner states that the variance would still cause no negative impacts on the Illinois EPA’s calculations regarding emission levels. In addition, the Petitioner is willing to request that the Illinois EPA submit the variance order along with updated emission calculations as another SIP amendment.”
Midwest Generation said in the April 10 application that the variance is needed “in order to avoid arbitrary and unreasonable hardship by permitting the company to adapt to unanticipated conditions that have evolved since the adoption of the CPS.” The company said it needs this variance for a couple of reasons.
“First, a significant, ongoing deterioration in energy market prices 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,” the company told the board. “Second, the CPS requires Waukegan Unit 8 to 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 concurrent time period.” None of the above conditions were foreseen when the standard was adopted; therefore, to enforce the standard as written would impose undue economic hardship on Midwest Generation, the company said.