By Amanda Durish Cook

Environmental groups have moved to halt an attempted roll-back of Illinois’ emissions standards, which would weaken pollution limits for Dynegy’s coal-fired generation fleet within the state.

The Environmental Defense Fund, Environmental Law and Policy Center (ELPC), Natural Resources Defense Council (NRDC), Sierra Club and Respiratory Health Association last week filed a joint motion to stop the Illinois Pollution Control Board from holding hearings on the proposed emissions rule change until Dynegy completes its merger with Vistra in late April. (See Vistra Energy Swallowing Dynegy in $1.7B Deal.)

The nonprofits argue that Vistra has so far been uninvolved with drafting the Multi-Pollutant Standard rulemaking and won’t be bound to “any of Dynegy’s statements about how it would operate the plants were the rule to be implemented.”

In their motion, the groups say, “It is unknown whether, in a few months’ time, the new owners will wish to pursue the current proposed rule modifications, maintain the current rule, or propose additional or different modifications…In several months…Dynegy will no longer be the decision-makers.”

The groups further contend that while Dynegy’s proposed pollutant rulemaking is predicated on its need for financial relief, the company’s financial picture will be sunnier after the merger.

“The resulting company will have over $4 billion in equity and face an entirely different financial situation, undercutting Dynegy’s main argument for the rule change,” the organizations claim.

Dynegy attorneys worked with the Illinois Environmental Protection Agency last year to revise the state’s 2006 clean air standard for coal plants. The company is seeking to replace the current rate-based emissions limits with an annual cap on sulfur dioxide and nitrogen oxide emissions for the state’s coal fleet as a whole. If approved, the new sulfur dioxide limit would be almost double what Dynegy emitted last year, while the nitrogen oxide cap would be 79% higher. Additionally, the caps would not decline should Dynegy retire or mothball any plants. (See “Illinois EPA Rule Change Still in the Works,” Dynegy Auction Proposal Fails to Gain Ill. Lawmaker Support.)

Dynegy says it will not waver in its pursuit of aggregate annual tonnage caps and contends that the hearings should continue as planned.

“Dynegy’s focus is on business as usual. As a result of anti-trust laws, we have to operate independently of Vistra Energy. We believe the established hearing process that’s being conducted by the Illinois Pollution Control Board should continue,” said Dynegy spokesman David Byford.

More than that, Byford argued, the motion is bad for business in the state.

“The motion by the environmentalists sets a bad precedent and will have a chilling effect on anyone doing business or considering doing business in Illinois. Any prudent owner will undertake a number of internal and external initiatives to help the plants’ viability, and evaluate each plant on a stand-alone basis, just as any business — large or small — would do,” he said in an email to RTO Insider.

Byford also contends that the Illinois EPA estimates that allowable sulfur dioxide emissions under the proposed rule would be 17% lower than under the current rule, while nitrogen oxide emissions would be 24% lower. But environmental groups have said the draft rule will permit overall emissions to exceed those of Dynegy’s fleet in the last two years, and some predict the company will shutter its more expensive coal plants with modern pollution controls, allowing cheaper plants without scrubbers to run.

The groups also argue the rulemaking stands to benefit a company that will soon cease to exist.

“This motion will ensure that Illinois doesn’t rush to change important pollution standards that protect the health and environment of Illinoisans only to help a company that will no longer be in existence by the middle of this year,” said NRDC staff attorney Toba Pearlman.

“The Illinois Environmental Protection Agency has been talking to the wrong company. It’s time to put an end to this poorly conceived, backroom proposal to boost profits at the expense of public health,” said ELPC staff attorney Lindsay Dubin.

The Pollution Control Board held one hearing on the proposed rule change in Peoria last month, and has scheduled another for March 6 in Edwardsville.