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Panhandle Eastern Pipe Line Co. v. Illinois Environmental Protection Agency

July 18, 2000

PANHANDLE EASTERN PIPE LINE COMPANY, PETITIONER,
v.
THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY AND THE ILLINOIS POLLUTION CONTROL BOARD, RESPONDENTS.



Administrative Review from the Illinois Pollution Control Board No. 98-102

The opinion of the court was delivered by: Justice McCULLOUGH

Pursuant to section 41(a) of the Illinois Environmental Protection Act (Act) (415 ILCS 5/41(a) (West 1998)), section 3-113(a) of the Administrative Review Law (735 ILCS 5/3-113(a) (West 1998)), and Supreme Court Rule 335 (155 Ill. 2d R. 335), petitioner Panhandle Eastern Pipe Line Company brings this direct review of a decision of the Illinois Pollution Control Board (Board). The Board upheld a denial by the Illinois Environmental Protection Agency (IEPA) of petitioner's application to revise a permit. This court has allowed the Illinois Environmental Regulatory Group to file a brief as amicus curiae.

The issues are whether (1) the appeal should be denied because petitioner has expressly abandoned any challenge to the Board's second ground for upholding the denial of application; (2) the IEPA lacked authority to reconsider emission limitations in a previously issued permit in general and because petitioner did not seek timely review of that permit when issued; and (3) federal regulations for prevention of significant deterioration (PSD) became applicable because petitioner's facility exceeded the emission limitation in the previously issued permits even though petitioner sought revision of those limitations because (a) that limitation was set to avoid PSD application and (b) it may have been miscalculated. We affirm.

The relevant facts are undisputed. On September 17, 1987, petitioner filed with the IEPA an application for a construction permit to replace 12 of its 15 compressor engines at the Glenarm Station in Sangamon County, Illinois, with four newer engines. On February 10, 1988, the IEPA issued a construction permit for petitioner to replace the old engines and imposed three special conditions: (1) to avoid the application of federal PSD rules (40 C.F.R. §52.21 (1988)), the overall increase in nitrogen oxides (NOx) emissions from the replacements would not exceed 39.9 tons per year; (2) based on emission rates calculated from standard emission factors, gas usage from the most recent one-year period, and the allowed increase of 39.9 tons per year, NOx emissions for the four new compressor engines "shall not exceed 461.3 tons per year"; and (3) petitioner was required to maintain records of the hours of operation and gas usage of each new compressor engine. Petitioner did not seek Board review of the decision awarding the permit. See Ill. Rev. Stat. 1987, ch. 111 1/2, par. 1040 (now 415 ILCS 5/40 (West 1998)) (Board review provision). These conditions were also included in four operating permits issued on August 30, 1988; September 14, 1989; June 5, 1990; and July 26, 1991. The last of these operating permits expired June 26, 1996. Petitioner also did not seek Board review of the conditions in these permits.

After determining in August 1996 that Glenarm station was exceeding the 461.3 tons per year NOx emission limitation, the IEPA issued a violation notice on March 20, 1997. The notice charged petitioner with violating conditions 1 and 2 of the operating permit and a federal regulation (40 C.F.R. §52.21 (1999)) because the 461.3-tons-per-year limit was meant to avoid applicability of the federal PSD standards. Petitioner responded by letter indicating that it would submit within 45 days, as required by the notice, an application for the appropriate permit addressing NOx limitation standards.

On May 19, 1997, petitioner filed a proposed compliance commitment agreement and an application for a minor source "modifying the original permit to correct the emission limitation in that permit and provide for the installment of pre-combustion chamber control technology on the two un-controlled engines" installed pursuant to the 1988 construction permit. Petitioner further proposed an NOx emission limitation of 774.9 tons per year to avoid federal PSD standard application because (1) the calculation should have been based on emissions in 1985 and 1986 and (2) 1987 had warmer than usual weather so the natural gas usage was less.

In a letter dated June 18, 1997, the IEPA notified petitioner that the new construction permit application was incomplete. In response, in October 1997, petitioner filed additional documents in support of the application for modified permit. On December 24, 1997, the IEPA denied the application for construction permit because of violation of the PSD standards. The IEPA decision stated petitioner had not provided adequate best available control technology (BACT) analysis as required by PSD regulations, it had not demonstrated the emission limitation that petitioner had proposed could be achieved, and the documents submitted by petitioner did not adequately substantiate the methods used to develop the proposed emission factors. Petitioner was allowed to reapply.

Petitioner sought review before the Board. On January 21, 1999, the Board issued a lengthy decision affirming the IEPA's denial of the permit. The accompanying order stated:

"1. The Board affirms the Agency's determination to deny the permit because Panhandle did not satisfy PSD requirements for BACT and thus failed to prove that it would not violate section 9.1(d) of the Act.

2. The Board affirms the Agency's determination to deny the permit because Panhandle did not adequately support its proposed emission factor for retired engines 1101 and 1110 and thus failed to prove that it would not violate Section 9.1(d) of the Act."

After the Board denied petitioner's motions for reconsideration and a stay of the application of the PSD limits, this administrative review followed.

The issues raised on appeal relate to interpretation of statutes and administrative rules (Richards Tire Co. v. Zehnder, 295 Ill. App. 3d 48, 56, 692 N.E.2d 360, 366 (1998) (interpretation of a statute is a question of law); Central Illinois Public Service Co. v. Illinois Commerce Comm'n, 243 Ill. App. 3d 421, 428, 610 N.E.2d 1356, 1361 (1993) (construction of administrative rules and regulations is governed by the same standard as construction of statutes)) and the facts are undisputed (Bridgestone/Firestone, Inc. v. Doherty, 305 Ill. App. 3d 141, 147, 711 N.E.2d 799, 804 (1999) (legal effect of undisputed facts is a question of law unless divergent inferences may be drawn from them). Questions of law are considered de novo by this court. Mount Vernon Education Ass'n v. Illinois Educational Labor Relations Board, 278 Ill. App. 3d 814, 818, 663 N.E.2d 1067, 1071 (1996).

On page 13 of appellant's brief, petitioner states:

"The Agency's second ground[] for denial was that the manufacturer data on emissions for retired engines 1101-1112 submitted as a supplement to the application on December 12, 1997 was 'not accompanied by documentation and information that would allow it to be relied upon.' Since this second ground only relates to information relevant to the appropriate level of a revised Nox emissions limit (not to whether revising the limit is possible), and Panhandle's application demonstrated that it would comply with ...


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