State regulators work to avoid federal Clean Air Act sanctions

[July 15, 2023]  By PETER HANCOCK
Capitol News Illinois
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SPRINGFIELD – Illinois faces a deadline next month to either change the way it enforces air pollution emission limits on heavy industries or face federal sanctions that could eventually result in restricted access to billions of dollars in federal highway funding.

But state agencies are working to avoid that as they rush to meet an Aug. 12 deadline imposed by the federal government to put a new regulatory framework in place that will comply with the federal government’s current interpretation of the Clean Air Act.

Those rule changes, which come from the Illinois Pollution Control Board, are up for review on Tuesday, July 18, before the General Assembly’s Joint Committee on Administrative Rules, a 12-member group that exercises oversight over the state’s administrative rulemaking process.

“At this point, any future course for this rulemaking depends entirely on JCAR’s review and decision-making on this proposal,” IPCB staff attorney Tim Fox said in a phone message. “The board awaits that review and decision-making at its meeting on Tuesday.”

At issue is a policy Illinois has had since the 1970s that allows factories, power plants, and other industries with air pollution emission permits to exceed their emission limits during startups, shutdowns, or malfunctions, or SSM events.

The so-called “SSM exemption” is written into a facility’s emission permit and provides the facility’s owners a level of immunity from civil lawsuits if they are sued for violating their emission limits.

The policy is based on the idea that no machine works perfectly all the time and there are occasionally unforeseeable events such as power outages or floods that will force a facility to shut down for a period of time and then restart, which can result in short-term excess emissions.

But it’s a policy that courts have said since 2008 violates the federal Clean Air Act, and it’s one that the U.S. Environmental Protection Agency has been telling Illinois and other jurisdictions since 2015 that they need to repeal.

Now, Illinois faces an Aug. 12 deadline to repeal the regulations that allow SSM exemptions and submit to the EPA a new state implementation plan, or SIP – a document that spells out the policies and regulations the state will use to implement the Clean Air Act. Otherwise, failure to comply will trigger federal sanctions against the state.

Jack Darin, executive director of the Illinois chapter of the Sierra Club, an environmental group that has been pushing for regulatory changes at both the state and federal level, said in a phone interview that the change is needed to protect public health.

“The public health can be subjected to a lot more significant pollution during these events, and that's why the Clean Air Act requires that facilities have plans in place to deal with that,” he said. “It could be additional pollution controls or other steps to make sure that we're not putting even more pollution into the air we breathe during these startup, shutdown, and malfunction events. And Illinois rules have been lacking these requirements for over a decade.”

But Donovan Griffith, vice president of government affairs for the Illinois Manufacturers’ Association, said the issue is not that simple, and that removing legal protections against SSM events could dramatically increase the risk of doing business.

“You're going to have companies that are going to have to make a decision,” he said in a separate interview. “I mean, you can't plan for a storm to knock out your power. You can't plan for certain things that happen. They'll have to make the decision whether or not they're going to restart their operations and just be out of compliance or not operate at all.”

Years of controversy

Controversy over SSM exemptions goes back as far as the 1970s. But for Illinois, the issue has been percolating for about the last dozen years, spanning the course of three presidential administrations.

In 2011, the national Sierra Club filed a petition with the U.S. EPA asking that it take stronger action to disallow SSM exemptions and affirmative defense provisions. In 2013, the agency announced that it was considering taking action on that petition. In 2015, during the Obama administration, EPA issued an “SIP call” for 36 states and nine additional local jurisdictions, including Illinois, to submit new state implementation plans.

The Illinois Environmental Protection Agency building is pictured in Springfield. (Capitol News Illinois file photo)

That occurred during the early months of Republican Gov. Bruce Rauner’s administration, which did not immediately respond to the SIP call. According to testimony filed at a public hearing earlier this year, IPCB officials said the agency sought additional guidance from U.S. EPA about how to establish alternative limits for SSM events, but it did not receive a response before the Obama administration ended in January 2017.

In April 2017, the then-new Trump administration put the SIP call on hold so it could reevaluate the issue. Three years later, in October 2020, EPA issued what it called a nonbinding “guidance memorandum” suggesting that policies such as those in place in Illinois and elsewhere would be permissible in some circumstances.

One month later, however, Democrat Joe Biden defeated Donald Trump for reelection. Soon after he took office, EPA issued a new memorandum withdrawing the Trump administration’s memo and reasserting the policy that SSM exemptions were no longer acceptable.

Looming sanctions

Finally, in January 2022, EPA issued a new SIP call, starting a clock for Illinois and several other state and local jurisdictions to come into compliance or face mandatory sanctions.

If the state does not come into compliance by Aug. 12, EPA will impose what are called “offset sanctions,” meaning any new or significantly modified sources of pollution for which a permit is required will come under significantly stricter emission limits.

And if the state does not comply by Feb. 11, 2024, its access to federal highway funds will be restricted to safety projects, capital programs for public transit and a select few other categories of funding.

Those sanctions would be lifted once the U.S. EPA determines the state has submitted an acceptable new SIP.

Because of the looming deadline, the rule change has been put on a “fast track” schedule, but that has irritated industry officials who say they haven’t had enough time to submit comments or try to negotiate an agreement.

“I think we've known since January 2022 that this was coming, which is why there was a lot of communications from the regulated community to the agency about discussing this issue,” Griffith, of the Illinois Manufacturers’ Association, said. “We didn't hear much from them until November of 2022, when they basically said, ‘here's our proposal that we plan on filing.’”

The compressed timeline also upset some members of JCAR, which previously discussed the proposed rule change at its June 13 meeting.

“It was Nov. 17 that you reached out and asked for comments. That's a week before Thanksgiving,” Rep. Curtis Tarver, D-Chicago, told IPCB and IEPA officials during that meeting. “You allowed 10 business days. The 11th, it was due. That's absolutely – I hope that's uncommon.”

Jack Jennings, deputy director of the IEPA, explained that the agencies at first tried to get clarification from the U.S. EPA about what would be acceptable, and it wasn’t until later in the year that the agencies learned that they needed to completely repeal the language allowing SSM exemptions.

JCAR and the agencies agreed at the June meeting to extend the rulemaking period for 45 days, during which time they hoped to work with U.S. EPA and industry groups to reach an agreement.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.