Environmental Progress - Summer 2000

Peaker Plants Generating High Public Interest

Part-time power generators are sparking heated debates around proposed sites.

Director's Viewpoint

Peaker plants. As I toured the state with Governor Ryan this spring, it was a term we heard quite often.

The deregulation of the electric utility industry in Illinois has opened up new markets for independent generators of power, particularly during high-demand periods such as hot summer days when air conditioners are humming.

In recent months, several "peaker" plants - relatively small electric generating units that use natural gas-fueled turbines - have been proposed for locations in various parts of Illinois. They have been nicknamed "peaker plants" or "peakers" because they generally operate only during periods of high electric demand when their power can fetch relatively high prices as a supplement to power produced by larger, full-time baseline power plants. In the past 18 months, over 40 peaker plants have been proposed, about half of them in the Chicago metropolitan area and the remainder downstate.

Peaker plants generally are located in close proximity to both natural gas pipelines (natural gas is used to generate the electricity) and major power distribution lines (through which the electricity generated by the plant is distributed). A number of those areas are in northern and western Chicago suburban areas, sometimes near residential areas. The proposed introduction of these facilities has prompted very vocal concern and opposition among some folks who live near them, particularly in Lake, McHenry and DuPage counties.What does all of this have to do with the Illinois EPA?

We are involved because under federal and state law, these plants are required to obtain permits from the Illinois EPA which specify and limit the amounts of regulated air pollutants they can put into the air.

Under federal regulations, most peakers fall under the category of "minor sources" because natural gas is a relatively clean burning fuel and the hours during which the peakers propose to operate are limited. The major regulated pollutant emitted by peakers is nitrogen oxides (NOx), which contribute to the formation of ground-level ozone or smog.

Most of these plants, equipped with the use of low-NOx burners, have submitted permit applications to Illinois EPA that would provide for annual NOx emissions of less than 250 tons per year, the federal threshold for "minor" sources. To put this into context, we estimate total statewide emissions of NOx last year from stationary sources totaled about 422,000 tons (a reduction of about 90,000 tons from 1998). In contrast, coal-fired baseline power plants, which can legally emit thousands of tons of NOx per year, are "major" sources, along with industrial boilers, and other sources.

One of the problems with NOx is that it can lead to the formation of ground-level ozone, commonly referred to as smog. The contribution of NOx to the formation of ozone was studied in depth by the nation's top private and government scientists during the two-year Ozone Transport Assessment Group study that involved 37 states and the U.S. Environmental Protection Agency. One of OTAG's most interesting and important conclusions was that NOx typically travels hundreds of miles (generally within the 200-500 mile range in the Midwest) before it contributes to smog formation. This means, for example, that smog in the Chicago region is influenced by power plants in other states and downstate, and that NOx coming out of smokestakes in the Chicago area can influence smog levels in central Michigan or Door County, Wisconsin.

By law, Illinois EPA is required to review and make a decision on peaker plant permit applications within 180 days unless the applicant waives the deadline. If the proposed plant meets all of the applicable state and federal regulations, we are required by law to grant the permit. If we do not act within 180 days, legally the permit is considered to have been issued.

Some citizens have expressed concern that because the emissions from these plants would be concentrated during the summer months rather than over a 12-month period, applying the annual "minor source" limits might be a loophole in the federal regulations. Recently, we asked the United States Environmental Protection Agency to evaluate this issue (because federal regulations were involved) and to advise whether, from their perspective, Illinois EPA was properly responding to permit applications. U.S. EPA responded that we are using the correct approach.

Based on what we know about the performance of these peaker units, if they comply with current environmental standards, there is no indication of any significant harm to the environment or public health from their operations. Further, NOx emissions from peakers, as well as other sources, will be subject to significant additional reductions in the near future as we work to reduce Illinois' contribution to smog formation in other states. We constantly review the standards applied to peaker plants to ensure their adequacy, and you have our commitment that we will continue to do so.

At the same time, much can be done on the local level. With the appropriate zoning and land planning in place, a local government can control its own fate and determine whether to allow a peaker plant to be developed. Decisions about proximity to residential neighborhoods, aesthetics, impact on traffic patterns and other land use issues can and should be made by local governments. An air pollution control permit issued by Illinois EPA is not, in itself, a green light to construction of a peaker plant. Illinois EPA does not have the authority to address such potential peaker issues as traffic and aesthetics, but local government does.

Finally, Governor Ryan has requested that the Illinois Pollution Control Board hold informational hearings to address some of the issues surrounding peakers. This will provide an opportunity for anyone interested in these facilities to learn more. More information about the hearings, including dates and locations, is available from the Pollution Control Board, which may be contacted by telephone at 217/524-8500.