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### UNITED STATES ENVIRONMENTAL PROTECTION**AG~N.~y:~:.,.t.;;,i ,:;~**  

### REGION IX**l~tG;Ci'Hd_ hLJ;.i;:iI'~l:**  CLEn:\. 

### 75 Hawthorne Street SanFrancisco, CA 94105 IN THE MATTER OF: ) ) Black Hills Corp., ) DocketNo. CAA-09-2009- C!)C)

# A.g ) 

### ) CONSENT AGREEMENT AND FINAL 

### ORDER Respondent. ) 

### PURSUANT TO 40 C.F.R. 

### § 22.13(b) CONSENT AGREEMENT I. PRELIMINARY STATEMENT 1. Complainant, the U.S. Environmental Protection Agency, Region 9 ("EPA") and Black Hills Corporation ("Black Hills" or "Respondent") enter into this Consent Agreement to settle all matters pertainingto this case, as described below. 2. In a letter dated May 13, 2005, Respondent requested an applicability detenninationby EPA's Clean Air Markets Division ("CAMD") as to whether the BlackHills Las Vegas Cogeneration Unit 1 ("LVC Unit 

### I" or "the Facility"),**loca~ed** at 1701 East Alexander Road, North Las Vegas 89030, had retained its Acid Rain Program Exemption. OnFebruary 6,2008, EPA made an applicability determination that LVC Unit I was subject to the Acid Rain Program
as ofJanuary 1, 2002, and was not exempt under 40 C.F.R. § 72.6(b). 3. In a letter dated February 22, 2008, Respondent sent a letter to EPA selfdisclosing a series ofpotential violations ofthe CleanAir Act, 42 U.S.C. § 7401 et seq. ("CAA"), at the Facility. Thepotential violations related to BlackHills' failure to comply with the regulatory requirements under 40 C.F.R. Parts 70, 72 and 75, ofthe Acid Rain Program. The Respondent requested that EPA apply the "Final Policy Statement on Incentives for Self-Policing: Discovery, \--.---, -- 

### --_.-.-_._---. - - - ---

Black Hills Corp. 2 Consent Agreement and Final Order Disclosure, Correction, and Prevention ofViolations," 65 Fed. Reg. 19618, April 11, 2000 ("Audit Policy") to the selfdisclosed violations. 4. 

### In a letter dated September 15,2008, from EPA's CAMD, Respondent was notified of
a penalty of$35,183 for excess emissions ofsulfur dioxide from the Facilityin accordance with 40 C.F.R. 

### § 77.6.ll. JURISDICTIONIW AIVER OF RIGHT TO HEARING· 5. This Consent Agreement is entered into pursuant to Section 113(d)(1) ofCAA and the "Consolidated Rules ofPractice Governing the Administrative Assessment ofCivil Penalties, Issuance ofCompliance or Corrective Action Orders, and the Revocation, Termination or Suspension ofPenn its," 40 C.F.R. Part 22 (64 Fed. Reg. 40138, July 23, 1999)(''the Consolidated Rules"). 6. Section 22.13(b) ofthe Consolidated! Rules provides thatwhere the parties agree to settlement ofone ormore causes ofactionbefore the filing ofa complaint, a proceedingmay be simultaneously commenced and concludedbythe issuance ofa consent agreement and final order. Respondent stipulates that EPA hasjurisdiction over this matter. Respondent agrees not 

### to contest EPA'sjurisdictionwithrespect to execution ofthis Consent Agreement, issuance of the attached Final Order, orthe enforcement thereof. 40 C.F.R. § 22.18. 7. Respondent hereby waives its right to request ajudicial or administrative hearing on any issue oflaw or fact set forth inthis Consent Agreement and its right to appeal the proposed Final Order accompanying this Consent Agreement. 8. Respondent admits the facts stipulated to in this Consent Agreement. 40 C.F.R.--- ----.---.

Black Hills Corp. 3 Consent Agreement and Final Order § 22.18(b). 

### III. PARTIES BOUND 9. This Consent Agreement and the attached Final Order applyto and are bindipgupon theparties hereto, their officers, agents, successors, and assigns. Any change in ownership or corporate status ofRespondent including, but not limitedto, any transfer 

### ofassets orreal or personal property shall not alter Respondent's responsibilities under this Consent Agreement. 

### IV. STIPULATED FACTS 10. Respondent is a "person" subject to the requirements ofSection 113(d)(1) ofCAA. 11. Respondent voluntarily provided EPAwithinfonnation 

### in its letters ofFebruary 22, 2008, August 21,2008, September 17,2008, August 17, 2009, and September 9,2009, concerning Respondent's requestthat EPA apply the Audit Policyto the selfdisclosed violations at its Facility. 12. The violations Respondent disclosed include the following: a) failure to complywith all ofthe requirements ofthe Acid Rain Programpursuant to 40 C.F.R. § 72.6(a); b) failure to submit an Acid Rain Permit Application pursuant to 40 C.F.R. § 72.30; c) failure to submit to CAMD a certificate ofrepresentation pursuant to 40 C.F.R. § 72.24; d) failure to notify Region 9 ofAcid Rain certification and to develop certification report for Clark County, Nevada and EP A pursuantto 40 C.F.R. 

### § 72.20(a); e) failure to meet the general operating requirements as defined at 40 C.F.R. § 75.10; 

### :t) failure to conductmanual linearitytesting, manual cycle response testing, collect and evaluate seven-day drift test data, install certified fuel flowmeter and upgrade GE CEMS DAS Software pursuant to 40 C.F.R. 

### § 7S.20{c); g) failure to submit an electronic

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Black Hills Corp. 4 Consent Agreement and Final Order monitoring planto EPA pursuant to 40 C.F.R. § 75.62; h) failure to transfer allowances to cover
excess emissions pursuant to 40 C.F.R. § 75.35; and 

### i) failure to submit a monitoringplanto EPA and to Clark Countypursuant to 40 C.F.R. § 75.62(a)(2) andj) failure to request current Clark County Operating Pennit and Title V Permit changes pursuant to 40 C.F.R. § 70.7. 13. Based on the information provided byRespondent, EPAhas determined that for the violations set forth in Paragraph 12 above, Respondent has meteach ofthe following conditions set forth inthe Audit Policy.
a. The violations disclosed byRespondent were discovered through an "environmental audit" conducted at its Facility, which meets the criteria defined in Section II (B) ofthe Audit Policy. b. The violations disclosed byRespondent were identified voluntarily, notthrough a monitoring, sampling or auditing procedure required by statute, regulation, permit, orjudicial or administrative order or consent agreement.
c. The violations were promptly disclosed within the twenty-one day time period from the date they were discovered. d. The violations at Respondent's facility were identified and disclosed prior to the commencement ofa federal, state, or local agency inspection, investigation, orinformation request, notice ofa citizen suit, legal complaintby a third party, orimminent discoveryby a regulatory agency.
e. Respondent has identified the steps the Facilityhas taken to promptly correct the violation and to prevent a recurrence ofthe violation.

### Black Hills Corp. 5 Consent Agreement and Final Order f. 

### According to Black Hills's February 22, 2008 letter, the violations disclosed by Respondent or closely related violations have not occurredpreviously within the past three years at the same facility and are not part ofapattern ofviolations on the part ofRespondent over the past five years. g. The violations disclosed by Respondenthas not resulted in serious actual harm to human health or the environment, nor has the violation presented an imminent and substantial endangennent to public health or the environment. The violations atissue do not violate the specific tenns ofanyjudicial or administrative order or consent agreement. h. Respondent has cooperated with EPA and provided the information necessary for the Agency to determine the applicability ofthe Audit Policy to its disclosure. 14. The economic benefit**ofnon~compliance** 

### received byRespondent for violations is deemed insignificant. 

# v. PENALTY 

### 15. Based on the information provided by Respondent in letters dated February 22, 2008, August 21,2008, September 17,2008, and August 17, 2009, EPA 

### has detennined that Respondent has met all ofthe conditions ofthe Audit Policy and qualifies for a 100 percent reduction in the gravity-based component ofthe civil penaltyfor the selfdisclosed violations identified in Paragraph 12 above. Therefore, EPA will not assess a**gravity~based** 

### civil penalty against Respondent concerning this violation. 16. EPA has detennined the economic ibenefit ofnoncompliance that has accrued to Respondent of$189 as aresult ofthe**violatio~** 

### identified in Paragraph 12 above ofis

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Black Hills Corp. 

### 6 Consent Agreement and Final Order insignificant. Therefore, EPA will not assess a penalty for the economicbenefit for noncompliance with CAA. Accordingly, the civil penalty assessed inthis matter is zero ($0).



### VI. CERTIFICATION 21. By signing this Consent Agreement, Respondent certifies thatitis**~ently** in compliance with the provisions ofthe Acid Rain Program identified inParagraph 12 above. Respondent agrees to undertake all necessary actions to continue the internal procedures to preventrecurrences ofviolations ofsuch environmental requirements. 22. By signing this Consent Agreement, Respondent certifies that the information it has supplied concerning this matter was at the time ofsubmission, and is, truthful, accurate, and complete for each such submission, response and statement. Respondent realizes that there are significant penalties for submitting false ormisleading infonnation, including criminal penalties for knowing submission ofsuch information, 18 U.s.C. § 1001. 23. EPA reserves the right to revokethis Consent Agreement and accompanying settlement penalty ifand to the extent that any infonnation orcertification provided by Respondent, upon which any civil penaltymitigation granted herein for such violation was based,
was materially false or inaccurate at the time such information or certification was provided to EPA, and EPA reserves the right to assess and collect any and all civil penalties for any violation described herein. Such revocation shall beinwriting and shall become effective upon receiptby Respondent. 24. This Consent Agreement and the accompanying Final Orderresolve onlythose civil claims specified inparagraph 12 above. Nothing herein shall beconstrued to limit the authorityBlack Hills Corp. 7 Consent Agreement and Final Order ofEPA andlor the United States to undertake action against any person, including the Respondent, inresponse to any condition which EPA orthe United States determines may present an imminent and substantial endangerment to the public health, welfare orthe environment, enforcement actions for CAA violations not addressed bythis CAFO, nor shall anything inthis Consent Agreement or the accompanying Final Order be construed 

### to resolve, and the United States reserves its authorityto pursue, criminal sanctions against Respondent. Further, this CAFO does not limit enforcement actions under laws administered by state or local authorities. VII. EFFECT OF SETTLEMENT 25. This Consent Agreement, upon incorporation into a Final Orderbythe EPA Region 9 Judicial Officer and full satisfaction bythe parties, shallbe a complete and full civil settlement of the specific violation set forth inparagraph 12 above. 26. The provisions ofthis ConsentAgreement and Final Order shall bebinding upon Respondent, its agents, successors or assigns. 27. Respondent's obligations.under this Consent Agreement, ifany, shall end when Respondent has performed all ofthe tenns ofthe Consent Agreement in accordance with the Final Order. 28. Eachpartyto this Consent Agreement shall bearits own costs for this matter, including any costs and attorneys fees associated with anypast, present, or future proceedings. VIII. EFFECTIVE DATE 29. Respondent and EPA agree to issuance ofthe attached Final Order. Upon filing, EPA will transmit a copy ofthe filed Consent Agreejpent 

### to the Respondent. This Consent

### Black Hills Corp. 8 

### Consent Agreement and Final Order Agreement and the attached Final Order shall become effective upon execution ofthe Final Order by the EPA Region 9 Judicial Officer and filing with the Hearing Clerk. The foregoing Consent Agreement is Hereby Stipulated, Agreed, and Approved for Entry: F

or Respondent:

Mr. Mark Lux Vice President and General Manager Black Hills Energy For Complainant:

. etor, Air Divis n EPA Region 9

## Sc~r: 111107 :26:1" Date
.

### UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX

IN THE MATTER OF: 75 Hawthorne Street San Francisco, CA 94105

Black Hills Corp., ) ) ) ) ) PlI Q 

### ?-:. 

### <0 Docket No. CAA- .,

## '1
....All () -\**~** t:) • Respondent. ) 

### FINAL ORDER Pursuant to 40 C.F.R. §22.18(b) ofEPA's Consolidated Rules ofPractice, 64 Fed. Reg. 40138 (July 23, 1999), and Section 113(d)(1) ofthe Clean Air Act (CAA); the Consent Agreement resolving this matter is hereby approved and incorporated byreference into this Final Order. Itishereby ordered that: Respondent shall comply with all ofthe terms ofthe Consent Agreement, incorporated hereinbyreference, and with the requirements set forth inthe CAA and regulations thereunder;

So Ordered, this 

## 30 day,of

# ~

# ber ,2009.

Regional Judicial 

### 0 er U.S. Environmental rotection Agency, Region IXCERTIFICATE OF SERVICE I certify that the original ofthe foregoing Consent Agreement and Final Orderwas hand delivered to the Regional Hearing Clerk, United States Environmental Protection AgencyRegion 

### 9, 75 Hawthorne Street, San Francisco, California, 

### 94105, and that a 

### true and correct copy ofthe Consent Agreement and Final Order was placed in the United States Mail, certified mail, return receipt requested, addressed as follows: Mr. Mark Lux Vice President and General Manager Black Hills Energy 

### 350 Indiana Street, Suite 

### 400 Golden, CO, 

### 80401 Certified Mail Number: 

### 7009 0820 0001 3646 5915 Mr. Dennis Arfinann, Partner Hogan 

### & Hartson LLP 

### 1470 Walnut Street, Suite 

### 200 Boulder, CO 

### 80302 Certified Mail Number: 

### 700908200001 36465939

# Dated:_--.:.Cf.....;...!_~o_I_D--"9 __ _ Fo-P.**~** Steven Annsey Regional Hearing Clerk Office ofRegional Counsel (ORC-I) U.S. Environmental Protection Agency 

### 75 Hawthorne Street San Francisco, CA 

### 94105

### ------------

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthome Street San Francisco, CA 94105-3901

CERTIFIED MAIL 

### # 7009 08200001 36465915 RETURN RECEIPT REQUESTED
Mr. MarkLux Vice President and General Manager Black Hills Energy 350 Indiana Street, Suite 400 Golden, CO 80401 

### SEP 3 0 2009

RE: Black Hills Corporation Las Vegas Cogeneration Unit 1 Dear Mr. Lux: Enclosed is your copy ofthe Consent Agreement and Final Order ("CAFO") filed pursuant to section 113(d) ofthe Clean Air Act, 42 U.S.c. §§ 7401-7671q. Ifyou have any questions concerning the CAFO, please contact Mark Sims, Enforcement Office, at 415-972-3965. Thank you for your cooperation in this matter.

Enclosure
cc: Mr. Lewis Wallenmeyer (Clark County DAQEM) Mr. Dennis Arfmann (Hogan and Hartson)

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